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DAILY NEWS ANALYSIS

25 Sep, 2021

44 Min Read

PLI Scheme for Automobile & Auto components

GS-II : Governance Policies and Programmes

  • The Government has issued Notification regarding Production Linked Incentive (PLI) Scheme for Automobile & Auto components.
  • The PLI Scheme for the auto sector envisages to overcome the cost disabilities of the industry for manufacture of Advanced Automotive Technology products in India.
  • The incentive structure will encourage industry to make fresh investments for indigenous global supply chain of Advanced Automotive Technology products.
  • It is estimated that over a period of five years, the PLI Scheme for Automobile and Auto Components Industry will lead to fresh investments of over Rs 42,500 crores, incremental production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs.
  • Further this will increase India’s share in global automotive trade.
  • The PLI Scheme for Auto sector is open to existing Automotive companies as well as new Non-Automotive investor companies (who are currently not in automobile or auto component manufacturing business).
  • The scheme has two components viz Champion OEM Incentive Scheme and Component Champion Incentive Scheme.

  • The scheme for Automobile and auto components will be implemented over a period of five years starting from FY 2022-2023.
  • An approved applicant shall be eligible for benefits for 5 consecutive Financial Years.
  • Financial Year 2019-20 shall be treated as the Base Year for calculation of Eligible sales.
  • An existing automotive company or its Group company(ies)will need to meet the Basic Eligibility criteria to receive incentives. New Non-Automotive Investor company or its Group company(ies)(who are currently not in automobile or auto component manufacturing business) are required to meet the Global Net worth criteria of Rs 1000 crore.

The scheme has following components:

  • Champion OEM Incentive Scheme: The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments and any other Advanced Automotive Technology vehicle prescribed by MHI depending upon technical developments.
  • Component Champion Incentive Scheme: The Component Champion Incentive scheme is a ‘sales value linked’ scheme, applicable on pre-approved Advanced Automotive Technology components of all vehicles, CKD/SKD kits, Vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors including automobile meant for military use and any other Advanced Automotive Technology components prescribed by MHI depending upon technical developments.
  • The list of Advanced Automotive Technology Vehicles and Advanced Automotive Technology Components can be modified by MHI from time to time depending upon technological developments.
  • Minimum 50% domestic value addition will be required and Phased Manufacturing Programme similar to FAME-II Scheme will be followed.
  • Pre-approval of eligible product will be done by Testing Agency of MHI as Advance Automotive Product as per the guidelines issued by MHI from time to time.
  • Any eligible product will be incentivized only for once – Component level or Vehicle

Other Production Linked Incentive (PLI) Schemes in India

Source: PIB

Procurement Schemes in India: Government e-Marketplace

GS-III : Economic Issues Industry

About Government e-Marketplace(GeM), 2016 (Ministry of Commerce and Industry)

  • GeM is a one-stop National Public Procurement Portal to facilitate online procurement of common use Goods & Services required by Center, States, their organizations and PSUs.
  • Procurement of goods & services by Ministries and CPSEs is mandatory for goods and services available on GeM. It will bring transparency and efficiency in the government buying process.
  • It also provides the tools of e-bidding and reverse e-auction to facilitate the government users achieve the best value for their money.
  • At present, GeM has > 15 lakh products, ~ 20,000 services, and > 40,000 Government buyer organizations.
  • SWAYATT is an initiative to promote Start-ups, Women and Youth Advantage Through e-Transactions on Government e Marketplace (GeM).
  • GeM Start-up Runway is an initiative of GeM in association with Start -up India to facilitate Start-ups registered with Start -up India to access the public procurement market and sell innovative products and services to government buyers.

Government e-Marketplace wins CIPS Award

  • Government e Marketplace (GeM) was announced as the winner in the "Best Use of Digital Technology" category at the CIPS Excellence in Procurement Awards 2021 (CIPS Awards). GeM emerged the winner in this category after competing with some of the biggest and best names in procurement across the public and private sector globally, including GEP, Jaguar Land Rover, Royal Dutch Shell, Vendigital and Shell. GeM was shortlisted as a finalist in two additional categories as well, i.e., 'Public Procurement Project of the Year' and 'Best Initiative to Build a Diverse Supply Base' where it was in the august company of some path-breaking organizations with great initiatives. The award was received on behalf of GeM by Shri Rohit Vadhwana, First Secretary (Economic), High Commission of India, in the UK at a ceremony held London yesterday.
  • The CIPS Awards are one of the leading recognitions around procurement globally, which is conducted under the aegis of The Chartered Institute of Procurement & Supply (CIPS), London. CIPS is a global not-for-profit organisation and professional body dedicated to promotinggood practices in procurement and supply management, with a community across 150 countries.
  • Recognition of GeM on a global platform of this stature is a tremendous shot in the arm for the GeM team and a testament to the vision of the PM Shri NarendraModi. GeM has brought its technology-driven innovations and strategic business processes in pursuit of three fundamental goals: driving transparency, efficiency and inclusiveness in public procurement. The design and development of the GeM platform- its digital features and functionalities, key business processes as well as the ancillary offline activities like outreach and training of stakeholders-is guided by these three goals. The use of forward-looking technologies has helped GeM to broadly achieve these goals and more, over the past five years. GeM offers a cashless, contactless, and paperless experience for sellers and buyers, and serves as an end-to-end solution for procurement of common use goods and services by Government buyers. GeM has completely replaced a previously fragmented public procurement ecosystem by a unified and easy-to-use e-marketplace helping to leverage competitiveness, accessibility, and economies of scale of a diverse, open and transparent procurement system. GeM is an example of how digital platforms created with a strategic and clear intent to transform legacy processes can effect lasting change.
  • Government e Marketplace is a 100% Government owned Section 8 Company setup under the aegis of Department of Commerce, Ministry of Commerce and Industry for procurement of goods and services by Central and State Government organizations.

Source: PIB

Medical Devices Parks Scheme

GS-III : S&T Health

  • The Union government notified a scheme to promote medical device parks at a financial outlay of ?400 crore till financial year 2024-2025.
  • The scheme aims to ensure easy access to testing and infrastructure facilities. It is expected that this will bring down the cost of production of medical devices, thereby making them more affordable for domestic consumption, the Department of Pharmaceuticals said in a statement.
  • The financial assistance for a selected medical device park would be 90% of the project cost of common infrastructure facilities for the northeastern and hilly States. For the rest, it would be 70%. However, a maximum assistance under the scheme for one such park will be ?100 crore.

Source: TH

Cryptocurrency and China

GS-III : S&T S&T

China’s central bank said all financial transactions involving cryptocurrencies are illegal, sounding the death knell for the digital trade in China after a crackdown on the volatile currencies.

What is Blockchain Technology?

  • Blockchains are a new data structure that is secure, cryptography-based, and distributed across a network. The technology supports cryptocurrencies such as Bitcoin, and the transfer of any data or digital asset.
  • Spearheaded by Bitcoin, blockchains achieve consensus among distributed nodes, allowing the transfer of digital goods without the need for centralized authorisation of transactions.
  • The technology allows transactions to be simultaneously anonymous and secure, peer-to-peer, instant and frictionless.
  • It does this by distributing trust from powerful intermediaries to a large global network, which through mass collaboration, clever code and cryptography, enables a tamper-proof public ledger of every transaction that’s ever happened on the network.
  • A block is the “current” part of a blockchain which records some or all of the recent transactions, and once completed, goes into the blockchain as permanent database. Each time a block gets completed, a new block is generated. Blocks are linked to each other (like a chain) in proper linear, chronological order with every block containing a hash of the previous block.
  • Benefits of blockchain technology:
    1. As a public ledger system, it records and validate each and every transaction made, which makes it secure and reliable.
    2. All the transactions made are authorized by miners, which makes the transactions immutable and prevent it from the threat of hacking.
    3. Blockchain technology discards the need of any third-party or central authority for peer-to-peer transactions.
    4. It allows decentralization of the technology.

What is Bitcoin?

  • Bitcoin is a type of digital currency that enables instant payments to anyone.
  • Bitcoin was introduced in 2009.
  • Bitcoin is based on an open-source protocol and is not issued by any central authority.
  • Bitcoin is a peer-to-peer currency.
  • Bitcoin is the first decentralised digital currency.
  • The price of the world’s most prominent cryptocurrency Bitcoin has more than halved in the last two months after hitting a peak in mid-April.
  • The second-most valuable cryptocurrency, Ether, has seen a similar fall from its peak last month.
  • China’s crackdown against cryptocurrencies, which are those that aren’t sanctioned by a centralised authority and are secured by cryptography, is said to have a lot to do with the crashing of the value of cryptocurrencies.

What has China done?

  • In recent weeks, China has reportedly cracked down on crypto mining operations.
  • The country has over the years accounted for a large percentage of the total crypto mining activity that takes place.
  • In purpose, Bitcoin miners play a similar role to gold miners — they bring new Bitcoins into circulation.
  • They get these as a reward for validating transactions, which require the successful computation of a mathematical puzzle.
  • And these computations have become ever-increasingly complex, and therefore energy-intensive in recent years.
  • Huge mining operations are now inevitable if one is to mine Bitcoins.
  • Access to cheap electricity has made mining lucrative in China.
  • According to the Cambridge Bitcoin Electricity Consumption Index, China accounted for nearly two-thirds of the total computational power last year. Xinjiang and Sichuan provinces accounted for nearly half of this.
  • Now, provincial governments one by one have acted against these mining operations. The latest to do so is Sichuan, which was a hydroelectric-based crypto mining hub.
  • But that’s not all. A few days back, the People's Bank of China directed banks and payment firms to pull the plug on cryptocurrency trading.
  • Actually, there is little change in the policy as far as China is concerned. It first imposed restrictions on cryptocurrencies way back in 2013. It then barred financial institutions from handling Bitcoin.
  • Four years later, it barred what are called initial coin offerings, under which firms raise money by selling their own new cryptocurrencies. This is largely an unregulated market.

What China wants?

  • An inter-ministerial committee report in India two years ago noted that in 2017, the government of China also banned trading between RMB (China’s currency renminbi) and cryptocurrencies.
  • It said, “Before the ban, RMB made up 90% of Bitcoin trades worldwide. In under a year, the trades between RMB and Bitcoin had fallen to under 1% of the world total.”
  • The report also noted that China had decided to prohibit mining within its jurisdiction.
  • While the miners had stopped their activities for some time, the steep increase in the price of Bitcoin had brought many back into action.
  • The fact that cryptocurrencies bypass official institutions has been a reason for unease in many governments.
  • Not just that. The anonymity that it offers aids in the flourishing of dark trades online. While many countries have opted to regulate the world of cryptocurrencies, China has taken the strictest of measures over the years.
  • According to observers, the latest set of measures are to strengthen its monetary hold and also project its new official digital currency.
  • An AFP report said, “China launched tests for a digital yuan in March. Its aim is to allow Beijing to conduct transactions in its own currency around the world, reducing dependency on the dollar which remains dominant internationally.”

Way Forward: European Example EU is working on Anti Money Laundering Directive AMLD. All cryptocurrencies and wallet will have to do KYC norms and register with local authority. India should follow EU example.

Source: TH

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