CONTEXT:

The Department of Agriculture, Cooperation and Farmers Welfare, Government of India is taking several measures to facilitate the farmers and farming activities at field level during the lockdown period. The updated status is given below:

• Under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) Scheme during the lockdown period from 24.3.2020 till date, about 8.89 crore farmer families have been benefitted and an amount of Rs. 17,793 crore has been released so far.
• In order to provide food security during the prevailing situation due to COVID-19 pandemic, the Government has decided to distribute pulses to the eligible households under Pradhan Mantri Garib Kalyan Yojana (PM-GKY). About 107,077.85 MT pulses have so far been issued to the States/UTs.

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)

• Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is a Central Sector scheme with 100% funding from Government of India. The Scheme is effective from 1.12.2018.
• Under the Scheme an income support of Rs.6000/- per year is provided to all farmer families across the country in three equal installments of Rs.2000/- each every four months.
• Definition of family for the Scheme is husband, wife and minor children.
• The entire responsibility of identification of beneficiary farmer families rests with the State / UT Governments.
• The fund is directly transferred to the bank accounts of the beneficiaries.
• Farmers covered under the Exclusion Criteria of the Operational Guidelines are not eligible for the benefit of the Scheme.
• For enrollment, the farmer is required to approach the local patwari / revenue officer / Nodal Officer (PM-Kisan) nominated by the State Government.
• The Common Service Centres (CSCs) have also been authorized to do registration of the farmers for the Scheme upon payment of fees.
• Farmers can also do their self-registration through the Farmers Corner in the portal.
• Farmers can also edit their names in PM-Kisan database as per their Aadhaar database / card through the Farmers Corner in the portal.
• Farmers can also know the status of their payment through the Farmers Corner in the portal.

CONTEXT:

The Department of Agriculture, Cooperation and Farmers Welfare, Government of India is taking several measures to facilitate the farmers and farming activities at field level during the lockdown period. The updated status is given below:

• Under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) Scheme during the lockdown period from 24.3.2020 till date, about 8.89 crore farmer families have been benefitted and an amount of Rs. 17,793 crore has been released so far.
• In order to provide food security during the prevailing situation due to COVID-19 pandemic, the Government has decided to distribute pulses to the eligible households under Pradhan Mantri Garib Kalyan Yojana (PM-GKY). About 107,077.85 MT pulses have so far been issued to the States/UTs.

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)

• Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is a Central Sector scheme with 100% funding from Government of India. The Scheme is effective from 1.12.2018.
• Under the Scheme an income support of Rs.6000/- per year is provided to all farmer families across the country in three equal installments of Rs.2000/- each every four months.
• Definition of family for the Scheme is husband, wife and minor children.
• The entire responsibility of identification of beneficiary farmer families rests with the State / UT Governments.
• The fund is directly transferred to the bank accounts of the beneficiaries.
• Farmers covered under the Exclusion Criteria of the Operational Guidelines are not eligible for the benefit of the Scheme.
• For enrollment, the farmer is required to approach the local patwari / revenue officer / Nodal Officer (PM-Kisan) nominated by the State Government.
• The Common Service Centres (CSCs) have also been authorized to do registration of the farmers for the Scheme upon payment of fees.
• Farmers can also do their self-registration through the Farmers Corner in the portal.
• Farmers can also edit their names in PM-Kisan database as per their Aadhaar database / card through the Farmers Corner in the portal.
• Farmers can also know the status of their payment through the Farmers Corner in the portal.

CONTEXT:

MHA issues 5th Addendum to exempt Operations of Marine Fishing/Aquaculture Industry and its Workers from Lockdown Restrictions to fight COVID-19

NEWS:

Ministry of Home Affairs (MHA) has issued an addendum to the consolidated guidelines to all Ministries/Departments regarding the Nationwide lockdown to fight COVID-19.

The 5th addendum exempts from lockdown restrictions the operations of the Fishing (Marine)/Aquaculture Industry, including feeding and maintenance, harvesting, processing, packaging, cold chain, sale and marketing; hatcheries, feed plants, commercial aquaria, movement of fish/ shrimp and fish products, fish seed/feed and workers for all these activities.

CONTEXT:

Government Grants exemption from Basic Custom duty & Health Cess on import of Ventilators , PPE  , COVID Test Kits &Face & Surgical Masks.

NEWS

In the context of Covid-19 situation, considering the immediate requirement of ventilators and other items,the Central Government has granted exemption from Basic Customs Duty and Health cess, on the import of the following goods, with immediate effect:

• Ventilators,
• Face masks, surgical Masks,
• Personal protection equipment (PPE)
• Covid-19 test kits
• inputs for manufacture of the aboveitems

This basic customs duty exemption shall be available upto the 30th September, 2020.

CONTEXT:

MCA allows  companies to hold Extraordinary General Meetings (EGMs) through VC or OAVM complemented with e-Voting facility/simplified voting through registered emails

NEWS:

• The Ministry of Corporate Affairs (MCA) is fully cognizant of the difficulties faced by companies on account of the ongoing nation-wide lockdown and social distancing due to COVID 19. The Ministry has also taken note of various representations received from industry associations and corporates on the need to facilitate companies in taking certain emergent/ urgent measures in the face of extreme disruptions and dislocation caused by the pandemic.
• Taking stock of the situation, the MCA had earlier allowed all meetings of the Board of directors upto 30th June 2020, to be conducted through Video Conferencing (VC) or other audio visual means (OAVM) vide its notification date 19.03.2020, including meetings on items where the physical presence of directors is otherwise required.
• The Companies Act, 2013 allows ordinary and special resolutions to be passed through postal ballot/e-voting route without holding a physical general meeting. However, in present lockdown/social distancing conditions due to COVID 19, postal ballot facility cannot be utilized by the companies.
• MCA allows listed companies or companies with 1,000 shareholders or more which are required to provide e-voting facility under the Companies Act, 2013 to conduct EGM through VC/ OAVM and e-Voting.  For other companies, a highly simplified  mechanism for voting through registered emails has been put in place for easy compliance.

CONTEXT:

Due to outbreak of the Covid-19 pandemic, there is severe disruption in the normal working of almost all sectors. To mitigate the hardships of taxpayers, the CBDT has issued the following directions/clarifications by exercise of its power u/s 119 of the Income-tax Act, 1961 (the Act):

All the assessees who have filed application for lower or nil deduction of TDS/TCS for F.Y. 2020-21 and whose applications are pending for disposal as on date and they have been issued such certificates for F.Y. 2019-20

DIFFERENCE BETWEEN TDS(Tax Deducted at Source) AND TCS(Tax Collected at Source):

TDS is deducted on the following types of payments:

• Salaries
• Interest payments by banks
• Commission payments
• Rent payments
• Consultation fees
• Professional fees

CONTEXT:

First-ever Indore – Kishangarh flight commenced under UDAN.

UDAN:

• Ude Desh Ka Aam Naagrik (UDAN) was launched as a regional connectivity scheme under the Ministry of Civil Aviation in 2016.
• It is an innovative scheme to develop the regional aviation market.
• The objective of scheme is to create affordable yet economically viable and profitable flights on regional routes so that flying becomes affordable to the common man even in small towns.
• The scheme envisages providing connectivity to un-served and underserved airports of the country through the revival of existing air-strips and airports. The scheme is operational for a period of 10 years. (Under-served airports are those which do not have more than one flight a day, while unserved airports are those where there are no operations.)

UDAN 1.0

• Under this phase, 5 airlines companies were awarded 128 flight routes to 70 airports (including 36 newly made operational airports)

UDAN 2.0

• In 2018, the Ministry of Civil Aviation announced 73 underserved and unserved airports.
• For the first time, helipads were also connected under phase 2 of UDAN scheme.

UDAN 3.0

• 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.

CONTEXT:

•  The Eight Core Industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).
• The combined Index of Eight Core Industries stood at 132.9 in February 2020, which increased by 5.5 percent as compared to the index of February,2019. Its cumulative growth during April to February, 2019-20 was 1.0per cent.

8 CORE INDUSTRIES AND ITS CORRESPONDING WEIGHTS AND PERCENTAGES OF GROWTH:

1.Coal

 Coal production (weight: 10.33per cent)increasedby 10.3 per cent in February 2020 over February,2019. Its cumulative index declinedby 1.2 per centduring April toFebruary, 2019-20over corresponding period of the previous year.

2.Crude Oil

 Crude Oil production (weight: 8.98per cent) declinedby 6.4 per cent inFebruary, 2020 over February,2019. Its cumulative index declined by 6.0 per centduring April toFebruary, 2019-20over the corresponding period of previous year.

3.Natural Gas

 The Natural Gas production (weight: 6.88per cent) declinedby9.6 per cent in February, 2020 over February,2019. Its cumulative index declined by 4.8 per centduring April toFebruary, 2019-20 over the corresponding period of previous year.

4.Refinery Products

 Petroleum Refinery production (weight: 28.04per cent)increasedby7.4 per cent inFebruary, 2020 overFebruary,2019. Its cumulative index increasedby 0.3 per centduring April to February, 2019-20over the corresponding period of previous year.

5.Fertilizers

 Fertilizers production (weight: 2.63 per cent) increased by 2.9 per cent in February, 2020 overFebruary,2019. Its cumulative index increasedby 4.1 per cent during April toFebruary, 2019-20 over the corresponding period of previous year.

6.Steel

Steel production (weight: 17.92per cent)declinedby 0.4 per cent inFebruary, 2020 over February,2019. Its cumulative index increased by 5.0 per centduring April to February, 2019-20 over the corresponding period of previous year.

7.Cement

Cement production (weight: 5.37per cent) increasedby8.6per cent inFebruary, 2020overFebruary,2019. Its cumulative index increasedby1.8per centduring April to February, 2019-20over the corresponding period of previous year.

8.Electricity

 Electricity generation (weight: 19.85per cent) increasedby11.0per cent in February, 2020over February,2019. Its cumulative indexincreased by1.8per cent duringApril to February, 2019-20over the corresponding period of previous year.

CONTEXT:

Government is regulating 24 class of medical devices which have been notifiedB as drugs under Drugs & Cosmetics Act, 1940 and Drugs & Cosmetics Rules, 1945.

Of the above, 4 medical devices viz. (i) Cardiac Stents (ii) Drug Eluting Stents (iii) Condoms and (iv) Intra Uterine Device (Cu-T) are scheduled medical devices for which ceiling prices have been fixed.

These 4 medical devices are under price control. As regard remaining non-scheduled medical devices which are notified/regulated as drugs, NPPA is currently monitoring Maximum Retail Prices (MRPs) of the DPCO, 2013 to ensure that no manufacturer/importers can increase the price more than ten percent in preceding twelve months.

DRUG POLICY OF INDIA:

As per the Modifications in Drug Policy, 1986 announced in September, 1994, the main objectives of the Drug Policy are as under :

• ensuring abundant availability, at reasonable prices of essential and life saving and prophylactic medicines of good quality;
• strengthening the system of quality control over drug production and promoting the rational use of drugs in the country;
• creating an environment conducive to channelising new investment into the pharmaceutical industry with a view to encourage cost-effective production with economic sizes and introducing new technologies and new drugs; and
• strengthening the indigenous capability for production of drugs.

DRUG PRICE CONTROL ORDER (DPCO):

The Drugs Prices Control Order, 1995 is an order issued by the Government of India under Sec. 3 of Essential Commodities Act, 1955 to regulate the prices of drugs. 

For the purpose of implementing provisions of DPCO, powers of Govt. have been vested in NPPA. 

How are the prices of drugs in the controlled category regulated ?

As per the provisions of DPCO, NPPA fixes the Ceiling price for medicines in the controlled category.

What is "Ceiling Price" ?

Ceiling price means a price fixed by the Government for Scheduled formulations in accordance with the provisions of DPCO 2013.

Are all the drugs marketed in the country under price control ?

No. The National List of Essential Medicines (NLEM) 2011 is adopted as the primary basis for determining essentiality, which constitutes the list of scheduled medicines for the purpose of price control. The DPCO 2013 contains 680 scheduled drug formulations spread across 27 therapeutic groups. However, the prices of other drugs can be regulated, if warranted in public interest.

NATIONAL PHARMACEUTICAL PRICING AUTHORITY (NPPA):

The Authority, interalia, has been entrusted with the task of fixation/revision of prices of pharmaceutical products (bulk drugs and formulations), enforcement of provisions of the Drugs (Prices Control) Order and monitoring of the prices of controlled and decontrolled drugs in the country.

CONTEXT:

In the wake of lockdown due to ongoing Covid-19 pandemic, the Government has extended the benefit of 2% Interest Subvention (IS) to Banks and 3% Prompt Repayment Incentive (PRI) to all farmers upto 31^st May, 2020 for all crop loans upto Rs.3 lakh given by banks which have become due or are becoming due between 1^st March, 2020 and 31^st May, 2020.

INTEREST SUBVENTION SCHEME:

• The interest subvention scheme for farmers aims at providing short term credit to farmers at subsidised interest rate.  The policy came into force with effect from Kharif 2006-07. The scheme is being implemented for the year 2018-19 and 2019-20.
• The interest subvention will be given to Public Sector Banks (PSBs), Private Sector Banks, Cooperative Banks and Regional Rural Banks (RRBs) on use of own funds and to NABARD for refinance to RRBs and Cooperative Banks.
• The Interest Subvention Scheme is being implemented by NABARD and RBI.

1. Interest subvention for short term crop loans:

• The Central Government provides to all farmers for short term crop loan upto one year for loan upto Rs. 3 lakhs borrowed by them.
• Under this scheme, the farmers can avail concessional crop loans of upto Rs.3 lakh at 7 per cent rate of interest. It also provides for an additional subvention of 3 per cent for prompt repayment within a period of one year from the date of advance. The scheme will help farmers to avail short term crop loans up to Rs. 3 lakh payable within one year at only 4 per cent per annum.  In case farmers do not repay the short term crop loan in time they would be eligible for interest subvention of 2% as against 5% available above.                                       
• The amount of interest subvention will be calculated on the crop loan amount from the date of its disbursement/drawal up to the date of actual repayment of the crop loan by the farmer or up to the due date of repayment of crop loan fixed by the bank whichever is earlier subject to a maximum period of one year.
• Interest Subvention would be available only on credit requirement for cultivation of crops and post-harvest loan components under ST limit of KCC. Limit towards household / consumption requirement / maintenance expenses of farm assets, term loan etc. will be outside the purview of the Interest Subvention Scheme.
• To ensure hassle-free benefit to farmers under Interest Subvention scheme, the lending institutions may make Aadhar linkage mandatory for availing short term crop loans during 2018-19 and 2019-20.

2. Interest subvention for post harvest loans:

• As a measure to check distress sale, post-harvest loans for storage in accredited warehouses against Negotiable Warehouse Receipts (NWRs) are available for upto 6 months for KCC holding small & marginal farmers. The Interest Subvention Scheme will continue for one year and it will be implemented by NABARD and RBI.
• In order to give relief to small and marginal farmers who would have to borrow at 9% for the post harvest storage of their produce, the Central Government has approved an interest subvention of 2% i.e an effective interest rate of 7% for loans upto 6 months. 

3. Interest subvention for relief to farmers affected by natural calamities:

To provide relief to the farmers affected by Natural Calamities, the interest subvention of 2% will be provided to Banks for the first year on the restructured amount. Such restructured loans will attract normal rate of interest from the second year onwards as per the policy laid down by the RBI.

4. Interest subvention under Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM):

The Ministry of Rural Development, Government of India launched a new programme known as National Rural Livelihoods Mission (NRLM) by restructuring and replacing the Swarnjayanti Gram Swarozgar Yojana (SGSY) scheme with effect from April 01, 2013. NRLM was renamed as Deendayal Antyodaya Yojana – National Livelihoods Mission (DAY-NRLM) with effect from March 29, 2016.

DAY-NRLM is the flagship program of Govt. of India for promoting poverty reduction through building strong institutions of the poor, particularly women, and enabling these institutions to access a range of financial services and livelihood services.

DAY-NRLM has a provision for interest subvention, to cover the difference between the Lending Rate of the banks and 7%, on all credit from the banks/ financial institutions availed by women SHGs, for a maximum of ? 3,00,000 per SHG. This will be available across the country in two ways:

• In 250 identified Districts banks will lend to the women SHGs @7% up to an aggregated loan amount of Rs 3,00,000/-.The SHGs will also get additional interest subvention of 3% on prompt payment, reducing the effective rate of interest to 4%.
• In the remaining districts also, all women SHGs under DAY-NRLM will be SHGs are eligible for interest subvention to the extent of difference between the lending rates and 7% for the loan up to Rs 3,00,000, subjected to the norms prescribed by the respective SRLMs. This part of the scheme will be operationalized by SRLMs.

CONTEXT:

Government has granted relaxation in the nationwide lockdown for activities related to agriculture-farming and allied activities with a view to address problems being faced by the farming community. This will also ensure uninterrupted harvesting of crops.

Keeping in view the demands of farmers and concerned organisations and at the directions of the Prime Minister, the Union Government urgently considered and sympathetically examined the issue, following which a practical solution was arrived at in the interest of farmers and related communities.

In exercise of the powers conferred under Section 10(2)(I) of the Disaster Management Act with the Chairperson, National Executive Committee. Under this Addendum, activities related to Agriculture and related products, services and such other activities have been brought under the exception categories from the 21 day lockdown.

This will allow unhindered harvesting of crops. 

The following categories have been exempted from the lockdown:

1. Agencies engaged in procurement of agriculture products, including MSP operations;
2. ‘Mandis’ operated by the Agriculture Produce Market Committee or as notified by the State Government;
3. Farming operations by farmers and farm workers in the field;
4. ‘Custom Hiring Centres (CHC)’ related to farm machinery;
5. Manufacturing and packaging units of fertilisers, pesticides and seed; &
6. Intra and Inter-State movement of harvesting and sowing related machines like combined harvester and other agriculture/horticulture implements

This decision has been taken with a view to facilitate unhindered activities related to agriculture and farming so as to ensure essential supplies to the common man and that the farmers and common people do not face any difficulty during the lockdown. Government of India has issued necessary directions to the concerned Ministries/Departments and designated officials of the States and UTs.

CONTEXT:

Invest India Business Immunity Platform launched to help businesses withstand COVID-19.

BUSINESS IMMUNITY PLATFORM:

• It was launched by Invest India, India’s national investment promotion & facilitation agency, under the Ministry of Commerce and Industry.
• The platform, hosted on the Invest India website, is designed as a comprehensive resource to help businesses and investors get real-time updates on India’s active response to COVID-19.
• This dynamic and constantly updating platform keeps a regular track on developments with respect to the virus, provides latest information on various central and state government initiatives, gives access to special provisions, and answers and resolves queries through emails and on WhatsApp.
• The Business Immunity Platform (BIP) is the active platform for business issue redressal, operating 24/7, with a team of dedicated sector experts and responding to queries at the earliest.
• Invest India has also announced a partnership with SIDBI for responding and resolving queries for MSMEs.
• While COVID-19 continues to disrupt normal life, the impact of this crisis on businesses across the country is being continuously assessed.
• The portal also maps and highlights the response mechanism put in place by leading Indian companies such as sanitation of staff vehicles, placing orders in alternate markets, disabling biometric attendance systems, setting up of medical task force, requesting trainees to go home, business continuity plan, barring entry of visitors, suspension of air travel, usage of video-conferencing and tele-conferencing, developing online solutions and other unique initiatives.

CONTEXT:

• Post Offices provide basic postal and ?nancial services during COVID-19 lockdown

• During the lockdown to curtail the spread of COVlD-19, Post Of?ces are providing basic postal and ?nancial services. Priority is being given to delivery of essential Items through the postal network.
• Facility of withdrawal and deposit under Post Office Savings Bank and India Post Payments Bank is also available.
• ATM facility and AEPS (Aadhar Enabled Payment System) are made available in Post Offices for withdrawal of cash from accounts standing in any bank.
• Department of Posts is also ensuring that essential services are provided by implementing safety measures across its supply chain to protect its employees and effecting safe delivery of services to the citizens.

Aadhar Enabled Payment System:

1. In order to further speed track Financial Inclusion in the country, Two Working Groups were constituted by RBI on MicroATM standards and Central Infrastructure & Connectivity for Aadhaar based financial inclusion transactions with members representing RBI, Unique Identification Authority of India, NPCI, Institute for Development and Research in Banking Technology and some special invitees representing banks and research institutions.
2. The working group on MicroATM standards & Central Infrastructure & Connectivity has submitted its report to RBI.
3. As a part of the working group it was proposed to conduct a Lab level Proof of concept (PoC), integrating the authentication & encryption standards of UIDAI, to test the efficacy of MicroATM standards and transactions using Aadhaar before they are put to actual use.
4. The PoC was successfully demonstrated at various venues.
5. AePS is a bank led model which allows online interoperable financial inclusion transaction at PoS (MicroATM) through the Business correspondent of any bank using the Aadhaar authentication.AePS allows you to do six types of transactions.
6. The only inputs required for a customer to do a transaction under this scenario are:-

• IIN (Identifying the Bank to which the customer is associated)
• Aadhaar Number
• Fingerprint captured during their enrollment

Objectives:

• To empower a bank customer to use Aadhaar as his/her identity to access his/ her respective Aadhaar enabled bank account and perform basic banking transactions like cash deposit, cash withdrawal, Intrabank or interbank fund transfer, balance enquiry and obtain a mini statement through a Business Correspondent
• To sub-serve the goal of Government of India (GoI) and Reserve Bank of India (RBI) in furthering Financial Inclusion.
• To sub-serve the goal of RBI in electronification of retail payments.
• To enable banks to route the Aadhaar initiated interbank transactions through a central switching and clearing agency.
• To facilitate disbursements of Government entitlements like NREGA, Social Security pension, Handicapped Old Age Pension etc. of any Central or State Government bodies, using Aadhaar and authentication thereof as supported by UIDAI.
• To facilitate inter-operability across banks in a safe and secured manner.
• To build the foundation for a full range of Aadhaar enabled Banking services.

Services Offered by AePS

• Cash Withdrawal
• Cash Deposit
• Balance Enquiry
• Aadhaar to Aadhaar Fund Transfer
• Mini Statement
• Best Finger Detection

BHIM Aadhaar Pay:

BHIM Aadhaar Pay is meant for merchants to receive digital payments from customers over the counter through Aadhaar authentication. It allows for any merchant associated with any acquiring bank on BHIM Aadhaar Pay service, to allow the merchant to accept payment from a customer of any bank, by authenticating the customer’s biometrics – currently only fingerprints, directly from the customer’s Aadhaar enabled bank account and receive the sale proceeds instantaneously directly into merchant’s own bank account.

To be able to effect the same, the merchant must have an Android mobile with the BHIM Aadhaar app and a certified biometric scanner attached with the mobile phone on the USB port AND both the merchant and customer should have had linked their Aadhaar numbers to their bank accounts respectively.

Aadhar Payment  Bridge:

Aadhaar Payment Bridge (APB) System, one of the unique payment systems implemented by NPCI, uses Aadhaar number as a central key for electronically channelizing the Government benefits and subsidies in the Aadhaar Enabled Bank Accounts (AEBA) of the intended beneficiaries.

Advantages of APB:

•  Eliminates inordinate delays, multiple channels & paper-work involved in the existing system.
•  Transfers benefits & subsidies in a seamless & timely manner and directly into the Aadhaar Enabled Bank Account.
•  In case of change in bank account, customer is not required to convey the bank account details or change in bank details to the Government Department or Agency.
• Customer not required to open multiple bank accounts for receiving benefits and subsidies of various social welfare schemes – Customer just need to open one account and seed his/her Aadhaar number in the bank account to start receiving benefits and subsidies directly into his/her Aadhaar Enabled Bank Account.

CONTEXT:

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, has given its approval for continuation of the process of recapitalization of Regional Rural Banks (RRBs) by providing minimum regulatory capital to RRBs for another year beyond 2019-20, that is, up to 2020-21 for those RRBs which are unable to maintain minimum Capital to Risk weighted Assets Ratio (CRAR) of 9%, as per the regulatory norms prescribed by the Reserve Bank of India.

The CCEA also approved utilization of Rs.670 crore as central government share for the scheme of Recapitalization of RRBs (i.e. 50% of the total recapitalization support of Rs.1340 crore), subject to the condition that the release of Central Government’s share will be contingent upon the release of the proportionate share by the sponsor banks.

Benefits of Recapitalisation:

A financially stronger and robust Regional Rural Banks with improved CRAR will enable them to meet the credit requirement in the rural areas.   

With the recapitalization support to augment CRAR, RRBs would be able to continue their lending to these categories of borrowers under their PSL target, and thus, continue to support rural livelihoods.

Background:

• Consequent upon RBI’s decision to introduce disclosure norms for Capital to Risk Weighted Assets Ratio (CRAR) of RRBs with effect from March 2008, a committee was set up under the Chairmanship of Dr. K.C. Chakrabarty.
• Based on the Committee’s recommendations, a Scheme for Recapitalization of RRBs was approved by the Cabinet in its meeting held on 10^th February, 2011 to provide recapitalization support of Rs. 2,200 crore to 40 RRBs with an additional amount of Rs. 700 crore as contingency fund to meet the requirement of the weak RRBs, particularly in the North Eastern and Eastern Region.
• Therefore, based on the CRAR position of RRBs, as on 31^st March of every year, National Bank for Agriculture and Rural Development (NABARD) identifies those RRBs, which require recapitalisation assistance to maintain the mandatory CRAR of 9%.

IMPORTANCE OF RRBS:

1. As per RBI guidelines, the RRBs have to provide 75% of their total credit under PSL (Priority Sector Lending). RRBs are primarily catering to the credit and banking requirements of agriculture sector and rural areas with focus on small and marginal farmers, micro & small enterprises, rural artisans and weaker sections of the society.
2. In addition, RRBs also provide lending to micro/small enterprises and small entrepreneurs in rural areas.

CRAR:

The CRAR, also known as the Capital Adequacy Ratio (CAR), is the ratio of a bank’s capital to its risk.

• It is a measure of the amount of a bank’s core capital expressed as a percentage of its risk-weighted asset.
• The enforcement of regulated levels of this ratio is intended to protect depositors and promote stability and efficiency of financial systems around the world.
• It determines the bank’s capacity to meet the time liabilities and other risks such as credit risk, operational risk, etc.
• In the most simple formulation, a bank’s capital is the “cushion” for potential losses, and protects the bank’s depositors and other lenders.
• Banking regulators in most countries define and monitor CAR to protect depositors, thereby maintaining confidence in the banking system.

CONTEXT:
 

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi was apprised of a Memorandum of Understanding (MoU) signed between Ministry of Railways, Government of India with DB Engineering & Consulting GMBH of Germany for technological cooperation inRailway Sector. The MoU was signed in February, 2020.

Background:

• Ministry of Railways have signed Memorandums of Understanding (MoUs)/ Memorandums of Cooperation (MoCs)/ Administrative Arrangements (AAs)/ Joint Declarations of Intent (JDIs) for technical cooperation in the rail sector with various foreign Governments and National Railways in respect of identified areas of cooperation, which include high speed rail, speed raising of existing routes, development of world class stations, heavy haul operations and modernization of rail infrastructure etc.
• German Railways will assist Indian Railways to make country's existing rail corridors semi high speed. The semi high speed trains will run at 200 km per hour.

NEWS:

This Memorandum of Understanding (MoU) for technological cooperation in Railway Sector will enable cooperation in the following areas:

1. Freight operations (including cross-border transport, automotive transport and logistics,)
2. Passenger operations (including high-speed and cross-border traffic),
3. Infrastructure building and management (including dedicated freight corridors and development of passenger stations),
4. Development of a modern, competitive railway organization (including the improvement of organizational structures and railway reformation),
5. IT   solutions   for   railway operations, marketing   and   sales   as   well   as administrative purposes,
6. Predictive Maintenance,
7.  Private train operations, and
8. Any other area which may be mutually agreed in writing between the two parties.

CONTEXT:

Finance Minister announces Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against Corona Virus

 NEWS:

• Insurance cover of Rs 50 Lakh per health worker fighting COVID-19 to be provided under Insurance Scheme
• 80 crore poor people will to get 5 kg wheat or rice and 1 kg of preferred pulses for free every month for the next three months
• 20 crore women Jan Dhan account holders to get Rs 500 per month for next three months
• Increase in MNREGA wage to Rs 202 a day from Rs 182 to benefit 13.62 crore families
• An ex-gratia of Rs 1,000 to 3 crore poor senior citizen, poor widows and poor disabled
• Government to front-load Rs 2,000 paid to farmers in first week of April under existing PM Kisan Yojana to benefit 8.7 crore farmers
• Central Government has given orders to State Governments to use Building and Construction Workers Welfare Fund to provide relief to Construction Workers

The Union Finance & Corporate Affairs Minister Smt. Niramla Sitharaman today announced Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against Corona Virus. While addressing the press conference here today, Smt. Sitharaman said “Today’s measures are intended at reaching out to the poorest of the poor, with food and money in hands, so that they do not face difficulties in buying essential supplies and meeting essential needs.”

The Minister of State for Finance & Corporate Affairs Shri Anurag Singh Thakur was also present besides Shri Atanu Chakraborty, Secretary, Department of Economic Affairs and Shri Debashish Panda, Secretary, Department of Financial Services. Following are the components of the Pradhan Mantri Garib Kalyan Package: —

PRADHAN MANTRI GARIB KALYAN PACKAGE

I. Insurance scheme for health workers fighting COVID-19 in Government Hospitals and Health Care Centres:

Safai karamcharis, ward-boys, nurses, ASHA workers, paramedics, technicians, doctors and specialists and other health workers would be covered by a Special insurance Scheme.

Any health professional, who while treating Covid-19 patients, meet with some accident, then he/she would be compensated with an amount of Rs 50 lakh under the scheme.

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.

II.  PM Garib Kalyan Ann Yojana

Government of India would not allow anybody, especially any poor family, to suffer on account of non-availability of foodgrains due to disruption in the next three months.

80 crore individuals, i.e, roughly two-thirds of India’s population would be covered under this scheme.

Each one of them would be provided double of their current entitlement over next three months.

This additionality would be free of cost.

Pulses:

To ensure adequate availability of protein to all the above mentioned individuals, 1 kg per family, would be provided pulses according to regional preferences for next three months.

These pulses would be provided free of cost by the Government of India.

III. 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 

IV. 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:

Under PM Garib Kalyan Yojana, 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.

Under this package, 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.

Government will give them Rs 1,000 to tide over difficulties during next three months.

MNREGA

Under PM Garib Kalyan Yojana, MNREGA 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.

V. Self-Help groups:

Women organised through 63 lakhs Self Help Groups (SHGs) support 6.85 crore households.

Limit of collateral free lending would be increased from Rs 10 to Rs 20 lakhs.

VI. 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:

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.

CONTEXT:

MHA issues SOPs for Maintaining Supply of Essential Goods during 21-day Nationwide Lockdown to fight COVID-19

Union Ministry for Home Affairs (MHA) issued Standard Operating Procedure (SOPs) for maintaining supply of essential goods today, in order to relieve hardships faced by people during 21-day nationwide lockdown to fight the Coronavirus outbreak.

NEWS:

1. For this, the SOPs suggest to let e-commerce remain operational and encourage home delivery of essential goods, while ensuring strict social distancing.
2. The SOPs prescribe that employees or persons engaged in the supply chain shall be allowed to commute on the basis of e-pass or any other certification issued by the concerned local authorities, on production of a valid photo identity card.
3. In case of unorganized sector, persons engaged in the supply of essential goods may be allowed based on approval/authorization by the local authorities.
4. The SOPs, inter alia, also prescribe that the facilities engaged in supply of essential goods would carry out regular health and sanitation check-up of employees engaged and provide them proper protective gear.

ESSENTIAL COMMODITIES ACT, 1955:

• The Essential Commodities Act, 1955 was enacted to ensure the easy availability of essential commodities to consumers and to protect them from exploitation by unscrupulous traders.
• The Act provides for the regulation and control of production, distribution and pricing of commodities which are declared as essential.
• Essential items under the Act include drugs, fertilisers, pulses and edible oils, and petroleum and petroleum products.
• The Act aim at maintaining/increasing supplies/securing equitable distribution and availability of these commodities at fair prices.
• Centre invokes the ECA Act’s provisions to impose stock limits in case of price/quantity distortions in the market to ensure adequate availability of essential commodities at reasonable prices.
• States are the implementing agencies to implement the EC Act, 1955 and the Prevention of Black marketing & Maintenance of Supplies of Essential Commodities Act, 1980, by exercising powers delegated to them.
• The list of essential commodities is reviewed from time to time with reference to their production and supply and in consultation with concerned Ministries/Departments.
• Currently, the restrictions like licensing requirement, stock limits and movement restrictions have been removed from almost all agricultural commodities.
• Exemptions:Wheat, pulses and edible oils, edible oilseeds and rice are certain exceptions.

???????RECENT ISSUES WITH THE ECA,1955:

• To control soaring prices of onions over the last few months, centre through ECA imposed stock limits on onions. Instead of decreasing prices, this actually increased price volatility.
•      Economic Survey 2019-20 were against Essential Commodities Act (ECA) and other “anachronistic legislations” and interventionist government policies, including drug price control, grain procurement and farm loan waivers.
•     With too-frequent stock limits, traders may have no reason to invest in better storage infrastructure in the long run.

CONTEXT:

• Based on the experience of past crop insurance schemes and with a view to include more risks under crop insurance and making it more affordable to the farmers etc., Pradhan Mantri Fasal Bima Yojana (PMFBY) has been introduced for implementation from Kharif 2016 season. 
• The scheme also aims to cover the risk of crop yield losses of insured farmers against all non-preventable natural risks from pre-sowing to post-harvest and to provide adequate claim amount and timely settlement of claims. 

PMFBY SCHEME:

• The Pradhan Mantri Fasal Bima Yojana was launched in 2016 and is being administered by the Ministry of Agriculture and Farmers Welfare.
• It provides a comprehensive insurance cover against failure of the crop thus helping in stabilising the income of the farmers.
• Scope: All food & oilseed crops and annual commercial/horticultural crops for which past yield data is available.
• Premium: The prescribed premium is 2% to be paid by farmers for all Kharif crops and 1.5% for all rabi crops. In the case of annual commercial and horticultural crops, the premium is 5%.
• The scheme is compulsory for loanee farmers availing Crop Loan /Kisan Credit Card (KCC) account for notified crops and voluntary for others.
• The scheme is implemented by empanelled general insurance companies. The selection of the Implementing Agency (IA) is done by the concerned State Government through bidding.

CONTEXT:

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, has given its approval for introducing the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) .

Remission of Duties and Taxes on Exported Products (RoDTEP):

• The new scheme will be implemented from 1^st January 2020 and will replace the existing Merchandise Exports from India Scheme (MEIS) and create a fully automated route for Input Tax Credit (ITC) in the GST to help increase exports in India.
   
• By adopting to RoDTEP scheme, Indian exporters will be able to meet the international standards for exports as affordable testing and certification will be made available to exporters within the country instead of relying on international organizations.
• Under the Scheme an inter-ministerial Committee will determine the rates and items for which the reimbursement of taxes and duties would be provided.
• RoDTEP provides a mechanism would be created for reimbursement of taxes/ duties/ levies, at the central, state and local level, which are currently not being refunded under any other mechanism, but which are incurred in the process of manufacture and distribution of exported products.
• In line with “Digital India”, refund under the Scheme, in the form of transferable duty credit/electronic scrip will be issued to the exporters, which will be maintained in an electronic ledger. The Scheme will be implemented with end to end digitization.
• The refunds under the RoDTEP scheme would be a step towards “zero-rating” of exports, along with refunds such as Drawback and IGST.
• A monitoring and audit mechanism, with an Information Technology based Risk Management System (RMS), would be put in to physically verify the records of the exporters. As and when the rates under the RoDTEP.

• ADVANTAGES: It is expected to adequately incentivize exporters by reducing duties paid on exports and will initiate the refund of various taxes to exporters. ITC is provided to set off tax paid on the purchase of raw materials, consumables, goods or services that were used in the manufacturing of goods or services. This helps in avoiding double taxation and the cascading effect of taxes. Also under it, tax assessment is set to become fully automatic for exporters. Businesses will get access to their refunds for GST via an automatic refund-route. This would increase the economy for the country and working capital for the enterprise. This scheme is going to give a boost to the domestic industry and Indian exports providing a level playing field for Indian producers in the International market so that domestic taxes/duties are not exported. At present, GST taxes and import/customs duties for inputs required to manufacture exported products are either exempted or refunded. However, certain taxes/duties/levies are outside GST, and are not refunded for exports, such as, VAT on fuel used in transportation, Mandi tax, Duty on electricity used during manufacturing etc. These would be covered for reimbursement under the RoDTEP Scheme.

CONTEXT:

As reported by States/ UTs as on 01.04.2019, country had about 17.87 Crore rural households out of which around 3.27 Crore rural households were with tap connections and around 14.60 Crore rural households were to be provided with tap connections. To enable every rural household in the country to have potable water at service level of 55 litre per capita per day (lpcd) through Functional Household Tap Connection (FHTC) by 2024, Government of India, in partnership with the States, has launched Jal Jeevan Mission (JJM).

BACKGROUND:

Jal Jeevan Mission (JJM) Background The Central Government assistance to States for rural water supply began in 1972 with the launch of Accelerated Rural Water Supply Programme. It was renamed as National Rural Drinking Water Programme (NRDWP) in 2009, which is a centrally sponsored scheme with fund sharing between the Centre and the States. Under NRDWP, one of the objectives was to “enable all households to have access to and use safe & adequate drinking water within premises to the extent possible”.

It was proposed to achieve the goal by 2030, coinciding with the United Nation’s Sustainable Development Goals. But now, it is has been planned to achieve the goal by 2024 through Jal Jeevan Mission (JJM). As per the information available with DDWS, as on 31.3.2019, only 18.33% of rural households i.e., 3.27 Crore out of the total 17.87 Crore rural households in the country, have piped water connection.

Jal Jeevan Mission (JJM) :

Government of India has restructured and subsumed the ongoing National Rural Drinking Water Programme(NRDWP) into Jal Jeevan Mission (JJM) to provide Functional Household Tap Connection (FHTC) to every rural household i.e., Har Ghar Nal Se Jal (HGNSJ) by 2024.

 The following kinds of works/ schemes are proposed to be taken up under JJM:

(i)In-village water supply (PWS) infrastructure for tap water connection to every household;

(ii) Reliable drinking water source development/ augmentation of existing sources;

(iii) Transfer of water (multi-village scheme; where quantity & quality issues are there in the local water sources);

(iv) Technological intervention for treatment to make water potable (where water quality is an issue, but quantity is sufficient);

(v) Retrofitting of completed and ongoing piped water supply schemes to provide FHTC and raise the service level;

(vi) Grey water management;

 (vii) Capacity building of various stakeholders and support activities to facilitate the implementation.

The goal of JJM is to provide functional household tap connection to every household with service level at the rate of 55 litres per capita per day (lpcd)

Funding Mechanism: The fund sharing pattern between Centre and State is 90:10 for Himalayan (Uttarakhand, Himachal Pradesh) and North-Eastern States, 100:0 for UTs and 50:50 for rest of the States.

Administrative Mechanism :National level National Jal Jeevan Mission, State level State Water and Sanitation Mission (SWSM), District level District Water and Sanitation Mission (DWSM) and Gram Panchayat level Paani Samiti/ Village Water & Sanitation Committee (VWSC)/ User group

CONTEXT:

Startup India initiative was announced by the Prime Minister of India on 15^th August, 2015. The flagship initiative has an objective to build a strong eco-system for nurturing innovation and Startups in the country that will drive sustainable economic growth and generate large scale employment opportunities.  Further to this, an Action Plan for Startup India was unveiled by the Prime Minister of India on 16th January 2016.

 The action plan comprises of 19 action items spanning across areas such as “Simplification and handholding”, “Funding support and incentives” and “Industry-academia partnership and incubation”. Since its inception, 28,979, Startups across the country have been recognised by Department for Promotion of Industry and Internal Trade (DPIIT) as on 01.03.2020

FUND OF FUNDS TO START UPS: 

• There is no provision under Startup India initiative for sanctioning of funds to startups directly. However, Government of India has established a Fund of Funds for Startups (FFS) with corpus of Rs. 10,000 crores, to meet the funding needs of startups. DPIIT is the monitoring agency and Small Industries Development Bank of India (SIDBI) is the operating agency for FFS.
• The total corpus of Rs. 10,000 crores is envisaged to be provided over the 14^th and 15^th Finance Commission cycles based on progress of the scheme and availability of funds. As on 18^th February 2020,
• SIDBI has committed Rs 3123.20 crore to 47 SEBI registered Alternative Investment Funds (AIFs).
• These funds have raised a corpus fund of Rs. 25,728 crore. Further, the AIFs have invested a total of Rs. 3,378.47 crore into 320 startups out of which Rs. 912.91 crore have been drawn from Fund of Funds for Startups. Fund of Funds does not directly invest into startups but provides capital to SEBI-registered Alternate Investment Funds (AIFs), known as daughter funds, who in turn invest money in growing Indian startups through equity and equity-linked instruments.
• Thus, there is no direct fund allocation from DPIIT to States/UTs under Startup India initiative.
•  Startup India is an ongoing initiative. Necessary measures are being taken based on continuous consultations with all stakeholders.

Salient features of Startup India action plan:

• Compliance Regime based on Self-Certification with an objective to reduce the regulatory burden on Startups thereby allowing them to focus on their core business and keep compliance cost low.
• Startup India Hub with an objective to create a single point of contact for the entire Startup ecosystem and enable knowledge exchange and access to funding.
• Rolling out of Mobile App and Portal with an objective to serve as the single platform for Startups for interacting with Government and Regulatory Institutions for all business needs and information exchange among various stakeholders.
• Legal Support and Fast-tracking Patent Examination at Lower Costs with an objective to promote awareness and adoption of IPRs by Startups and facilitate them in protecting and commercializing the IPRs by providing access to high quality Intellectual Property services and resources, including fast-track examination of patent applications and rebate in fees.
• Relaxed Norms of Public Procurement for Startupswith an objective to provide an equal platform to Startups across sectors vis-à-vis the experienced entrepreneurs/ companies in public procurement.
• Faster Exit for Startupswith an objective to make it easier for Startups to wind up operations.
• Providing Funding Support through Fund of Funds with a Corpus of Rs. 10,000 crores with an objective to provide funding support for development and growth of innovation driven enterprises.
• Credit Guarantee fund for Startupswith objective to catalyze entrepreneurship by providing credit to innovators across all sections of society.
• Tax Exemptions on Capital Gains with an objective to promote investments into Startups by mobilizing the capital gains arising from sale of capital assets.
• Tax Exemptions to startups for 3 Years with an objective to promote the growth of Startups and address working capital requirements.
• Tax Exemption on Investments above Fair Market Value with an objective to encourage seed-capital investment in Startups.
• Organizing Startup Fests for Showcasing Innovation and Providing a Collaboration Platform with an objective to galvanize the Startup ecosystem and to provide national and international visibility to the Startup ecosystem in India.
• Launch of Atal Innovation Mission (AIM) with an objective to serve as a platform for promotion of world-class Innovation Hubs, Grand Challenges, Startup businesses and other self employment activities, particularly in technology driven areas.
• Harnessing Private Sector Expertise for Incubator Setup with an objective to ensure professional management of Government sponsored / funded incubators, Government will create a policy and framework for setting-up of incubators across the country in public private partnership.
• Building Innovation Centers at National Institutes with an objective to propel successful innovation through augmentation of incubation and R&D efforts.
• Setting up of 7 New Research Parks Modelled on the Research Park Setup at IIT Madras with an objective to propel successful innovation through incubation and joint R&D efforts between academia and Industry.
• Promoting Startups in the Biotechnology Sector with an objective to foster and facilitate bio-entrepreneurship.
• Launching of Innovation Focused Programs for Students with an objective to foster a culture of innovation in the field of Science and Technology amongst students.
• Annual Incubator Grand Challenge with an objective to support creation of successful world class incubators in India. 

CONTEXT:

The steps regarding the steps to boost exports was given by the Minister of Commerce and Industry, Shri Piyush Goyal, in a written reply in the Lok Sabha today.

NEWS:     

Primary focus by Government on export promotion schemes/ policies is to refund duties and taxes levied on inputs used in production of export products, reduce cost disability by providing incentives to specified products and improve all-round ease of doing business.

Overall thrust is on enhancing competitiveness and growth in exports of all products groups across all destinations. As a result, our export products and destinations are fairly diversified.

In Financial Year 2018-19 products were exported to 233 countries/territories covering all big and small trading countries. During this period, we exported products in all the 168 principal commodity groups.

Government is taking holistic measures to make exports competitive whether it is ensuring access to affordable credit, initiating exporter friendly schemes, promoting districts as export hubs, improving logistics and improving utilisation of Free Trade Agreements (FTAs).

STEPS TAKEN BY GOVERNMENT ARE:

1. A new Foreign Trade Policy (FTP) 2015-20. The policy, inter alia, rationalised the earlier export promotion schemes and introduced two new schemes, namely Merchandise Exports from India Scheme (MEIS) for improving export of goods   and ‘Services Exports from India Scheme (SEIS)’ for increasing exports of services. Duty credit scrips issued under these schemes were made fully transferable.
2. Based on Mid-term Review of the FTP 2015-20 undertaken on 5th December, 2017, incentives for labour intensive / MSME sectors were increased by 2%.
3.  A new Logistics Division was created in the Department of Commerce for integrated development of the logistics sector.  India’s rank in World Bank’s Logistics Performance Index moved up from 54 in 2014 to 44 in 2018.
4.  Interest Equalization Scheme on pre and post shipment rupee export credit was introduced from 1.4.2015 providing interest equalisation at 3% for labour intensive / MSME sectors. The rate was increased to 5% for MSME sectors with effect from 2.11.2018 and merchant exporters were covered under the scheme with effect from 2.1.2019.
5. For improving ease of doing business, online issuance of Importer Exporter Codes (IEC), has been started. India’s rank in World Bank ‘Ease of Doing Business’ ranking improved from 142 in 2014 to 63 in 2019 with the rank in ‘trading across borders’ moving up from 122 to 80.
6.  A new scheme called “Trade Infrastructure for Export Scheme (TIES)” was launched with effect from 1^st April 2017 to address the export infrastructure gaps in the country.
7.  A comprehensive “Agriculture Export Policy” was launched on 6th December, 2018 with an aim to double farmers’ income by 2022 and provide an impetus to agricultural exports.
8.  A new scheme called “Transport and Marketing Assistance” (TMA) has been launched for mitigating disadvantage of higher cost of transportation for export of specified agriculture products.

CONTEXT:

The information regarding the steps to boost domestic investments in India was given by the Minister of Commerce and Industry, Shri Piyush Goyal, in a written reply in the Lok Sabha today.

NEWS:
 

Under the scheme of Investment Promotion, Department for Promotion of Industry and Internal Trade supports Sectoral Ministries and State Governments for organizing  investment events, summits, road-shows and other promotional activities.

 Continuous efforts are made by Ministries and States for Facilitating investments besides handholding services to such investors.

Recently Government has taken various steps in addition to ongoing schemes to boost domestic investments in India. These include the National Infrastructure Pipeline, Reduction in Corporate Tax, easing liquidity problems of NBFCs and Banks, trade policy measures to boost domestic manufacturing, and so on.   

In order to protect, support and promote small enterprises as also to help them become self-supporting, a number of protective and promotional measures have been undertaken by the Government.

The various types of help extended by different support agencies of the Government are:

 (i) Credit Support, (ii) Marketing Support, (iii) Entrepreneurship Development, (iv) Technology Upgradation, (v) Industrial Infrastructure, (vi) Technical Training, (vii) Institutional Structure, (viii) Assistance Programmes, (ix) special incentives for setting up of Enterprises in backward areas etc.

While most of the institutional support services and incentives are provided by the Central Government, others are offered by the State Governments in varying degrees to attract investments and promote small industries with a view to enhance industrial-production and to generate employment in  their respective States.                

Syllabus subtopic: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

Prelims and Mains focus: about the HSR corridors; reforms in railway sector

Context: The Railways is undertaking measures for improving speed of both passenger and freight trains. Improvement in average speed of trains is a continuous exercise for Railways.

Steps taken

• The Government in August 2019 has approved two projects for raising of speed to 160 Kmph on existing New Delhi-Mumbai (including Vadodara-Ahmedabad) and New Delhi-Howrah (including Kanpur-Lucknow) routes.

• In addition, the Railways have sanctioned a large number of capacity enhancement works over various zones which when commissioned, are bound to increase the speed of trains and cut travel time on various routes.

About the high speed corridors

• At present, Mumbai-Ahmedabad High Speed Rail (HSR) corridor is the only HSR Project which is sanctioned and the same is under execution with the technical & financial cooperation from Government of Japan.

• Further, Ministry of Railways has decided to undertake Detailed Project Report (DPR) for the following six HSR corridors:

1. Delhi – Noida – Agra – Kanpur – Lucknow- Varanasi (865 kms)

2. Delhi – Jaipur – Udaipur – Ahmedabad (886 kms)

3. Mumbai – Nasik – Nagpur (753 kms)

4. Mumbai – Pune – Hyderabad (711 kms)

5. Chennai – Bangalore – Mysore (435 kms)

6. Delhi – Chandigarh – Ludhiana – Jalandhar – Amritsar (459 kms)

• The work of undertaking DPR has been entrusted to National High Speed Rail Corporation Ltd. (NHSRCL).

Syllabus subtopic: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

Prelims and Mains focus: about the meeting; about PMG; about Invest India and its functions

Context: Minister of Railways and Commerce & Industry chaired a meeting for the review of 17 large-size infrastructure projects on 27th of February in Department of Promotion of Industry and Internal Trade (DPIIT), New Delhi.

About the meeting

• The meeting was attended by Minister of State for commerce and industry, senior officers of DPIIT, Chief Secretaries of Karnataka and Maharashtra, and senior officers of Jharkhand, Odisha, and Uttar Pradesh (through Video Conference). Senior officials of key ministries including Railways, Power, Petroleum and Natural Gas, Road Transport and Highways as well as Invest India were also present to address the issues raised through the Project Monitoring Group (PMG).

• In the meeting, Ministers and senior officials assessed critical projects, with important socio-economic and industrial significance. A total of 36 issues in 17 projects with total anticipated investment of Rs. 32,910 crores were reviewed.

About Project Monitoring Group (PMG).

• Project Monitoring Group (PMG) is an institutional mechanism of DPIIT to expedite resolution of issues and removal of regulatory bottlenecks in projects, with investments upward of Rs. 500 crores in India.

• Invest India provides implementational support to PMG in identifying and following up on issues with the States.

• PMG enlists unresolved project issues of all Public, Private and ‘Public–Private Partnership’ (PPP) projects and undertakes fast-tracking of approvals, sectoral policy issues and removal of bottlenecks for expeditious commissioning.

• It has till date resolved more than 3500 issues in 809 projects and has unlocked anticipated financial investment of more than Rs. 32 lakh crores. At the moment, PMG and Invest India are handling 588 issues in 260 projects, with total anticipated investment of Rs.10 lakh crore.

About Invest India

• Invest India is the National Investment Promotion and Facilitation Agency of India and acts as the first point of reference for investors in India.

• It is set up as a nonprofit venture under the Department of Industrial Policy and Promotion, Ministry of Commerce and Industries, Government of India.

• Operationalized in early 2010, Invest India is set up as a joint venture company between the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry (35% equity), Federation of Indian Chambers of Commerce and Industry (FICCI) (51% equity), and State Governments of India (0.5% each).

• Thus, essentially, Invest India is a private company, unlike India Brand Equity Foundation – another investment promotion agency in India set up by the same Ministry – Ministry of Commerce & Industry.

• Invest India’s specialists provide multiple forms of support such as market entry strategies, deep dive industry analysis, partner search and location assessment, and policy advocacy with decision makers.

Functions:

• The core mandate of Invest India is investment promotion and facilitation.
• It provides sector-specific and state-specific information to a foreign investor, assists in expediting regulatory approvals, and offers hand-holding services.
• Its mandate also includes assisting Indian investors to make informed choices about investment opportunities overseas.
• Its experts, specializing across different countries, Indian states and sectors, handhold investors through their investment lifecycle ? from pre-investment to after-care.

Syllabus subtopic: Food Processing and Related Industries in India- Scope’ and Significance, Location, Upstream and Downstream Requirements, Supply Chain Management.

Prelims and Mains focus: about the portal: features and significance; about Operation Greens

Context: Union Minister of Food Processing Industries, launched the– Market Intelligence and Early Warning System (MIEWS) Web Portal.

About MIEWS portal: features and significance

• The MIEWS Dashboard and Portal is a ‘first-of-its-kind’ platform for ‘real time monitoring’ of prices of tomato, onion and potato (TOP) and for simultaneously generating alerts for intervention under the terms of the Operation Greens (OG) scheme.

• The portal would disseminate all relevant information related to TOP crops such as Prices and Arrivals, Area, Yield and Production, Imports and Exports, Crop Calendars, Crop Agronomy, etc in an easy to use visual format.

• As per the terms of the OG Scheme, during a glut situation, evacuation of surplus production from producing areas to consumption centres will be undertaken as determined by the following:

1. When the prices fall below preceding 3 years’ average market price at the time of harvest;
2. When the prices fall more than 50% compared to last year’s market price at the time of harvest;
3. When the prices fall less than the benchmark, if any, fixed by the State / Central Government for a specified period.

• The MIEWS system is designed to provide advisories to farmers to avoid cyclical production as well as an early warning in situations of gluts. For decision makers, the MIEWS system will help in

1. monitoring of supply situation for timely market intervention,
2. assist in rapid response in times of glut to move produce from glut regions to deficit/consuming regions and
3. providing inputs for export/import decision making.

• The salient features of the MIEWS portal include:

1. A dashboard that would indicate low price and high price alerts as well as price forecasts for 3 month forward
2. Prices and arrivals of TOP crops across the country including interactive charts and comparisons with previous seasons
3. Area, Yield and Production of TOP crops
4. Crop Agronomy and Trade Profile of each of the TOP crops
5. Regular and special reports on the market situation of the TOP crops. The portal will have public and private sections into which the aforementioned features would be divided. Sections like Prices and arrivals, Area, yield and production, Crop Agronomy and Trade Profile would be accessible to the public while the regular and special market intelligence reports and price forecasts would be accessible only to the policy makers.

• This portal is a novel initiative of MoFPI leveraging IT tools and furthering the goals of Digital India. Previously, the Ministry has been credited for streamlining the entire project application, implementation & evaluation process online through its Sampada portal & Dashboard. MoFPI has recently received accolades from the, Ministry of Personnel, Public grievances & Pensions, Government of India for effectively implementing e-Office.

• The initiative of MoFPI is expected to leverage the strengths of IT in real time monitoring and timely responding to any exigency on account of supply side irregularity or constraints in respect of these three crops. If successful, this model can be further expanded and emulated by other concerned departments/Ministries of Government of India.

Operation Greens (OG) scheme

• In the budget speech of Union Budget 2018-19, a new Scheme “Operation Greens” was announced on the line of “Operation Flood”, with an outlay of Rs.500 crores to promote Farmer Producers Organizations (FPOs), agri-logistics, processing facilities and professional management.

• Accordingly, the Ministry has formulated a scheme for integrated development of Tomato, Onion and Potato (TOP) value chain.

The objectives of Operation Greens scheme are:

1. Enhancing value realisation of TOP farmers by targeted interventions to strengthen TOP production clusters and their FPOs, and linking/connecting them with the market.

2. Price stabilisation for producers and consumers by proper production planning in the TOP clusters and introduction of dual use varieties.

3. Reduction in post-harvest losses by creation of farm gate infrastructure, development of suitable agro-logistics, and creation of appropriate storage capacity linking consumption centres.

4. Increase in food processing capacities and value addition in TOP value chain with firm linkages with production clusters.

5. Setting up of a market intelligence network to collect and collate real time data on demand and supply and prices of TOP crops.

The scheme has two-pronged strategy of Price stabilisation measures (for short term) and integrated value chain development projects (for long term).

(I) Price Stabilisation Measures

(a) NAFED is the Nodal Agency to implement price stabilisation measures. MoFPI will provide 50% of the subsidy on the following two components:

1. 1. Transportation of Tomato Onion Potato(TOP) Crops from production to storage;
   2. Hiring of appropriate storage facilities for TOP Crops;

(b) Creation of Market Intelligence and Early Warning System – ‘MIEWS’ Web Portal and Dashboard – a platform for monitoring prices of TOP Crops

(II) Integrated value chain development projects

1. 1. Formation and Capacity Building of FPOs
   2. Quality production
   3. Post-harvest processing facilities – At Farm Level
   4. Post-harvest processing facilities – At Main Processing Site
   5. Agri-Logistics
   6. Marketing / Consumption Points

Syllabus subtopic: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

Prelims and Mains focus: about the key features of the train and its route

Context: After the successful run of the Tejas Express trains operating on the Lucknow-Delhi and Ahmedabad-Mumbai routes, Indian Railways is going to start operation of the third corporate passenger train - Kashi Mahakal Express.

Details of the new train

• It will connect religious places of the state of Madhya Pradesh and Uttar Pradesh. Kashi Mahakal Express will be inaugurated on 16th February, 2020 followed by routine commercial run from 20th February 2020 onwards. The inaugural run of the train will be flagged off from Varanasi by PM Modi through video link.

• The superfast fully air-conditioned passenger train to be operated by Indian Railway Catering & Tourism Corporation (IRCRC) will connect three Jyotirlinga – Omkareshwar (Near Indore),  Mahakaleshwar (Ujjain) and Kashi Vishwanath (Varanasi) besides also connecting the industrial and educational hub of Indore and Bhopal the capital of Madhya Pradesh.

• The train will operate thrice a week between Varanasi and Indore: once via Prayagraj (Allahabad) and twice via Lucknow. The route of the train will be via Sultanpur - Lucknow/Prayagraj – Kanpur – Jhansi -  Bina - Sant Hiradnagar – Ujjain -  Indore and back. The train will cover a total distance of 1131 km between Varanasi and Indore via Lucknow and a distance of 1102 km between Varanasi and Indore via Prayagraj (Allahabad) in approximately 19 hours.  

• Kashi Mahakal Express will be the first passenger train of its own kind which promises to be a full service overnight journey train with high levels of on-board services complemented with exclusive optional tour packages for the passengers covering the religious, business as well as tourism sites of the states of Uttar Pradesh and Madhya Pradesh. Being its first long distance overnight journey train, Indian Railways’ PSU IRCTC has geared up to provide a host of facilities and services to the passengers on-board including high quality vegetarian food, on-board bedrolls and housekeeping services and on-board security services.

• Giving due respect to the religious sentiments of the travelling passengers and offer them with a value addition for various religious places and tourism sites covered by Kashi Mahakal Express, IRCTC is making tour packages of cities and religious sites covered by the train such as Kashi, Omkareshwar, Mahakaleshwar, Bhopal, Sanchi, Ujjain, Bhimbetka, Ayodhya and Prayag.

Syllabus subtopic: Effects of Liberalization on the Economy, Changes in Industrial Policy and their Effects on Industrial Growth.

Prelims and Mains focus: about the key highlights of the survey

Context: The Public Enterprises Survey -2018-19 was tabled in both the Houses of Parliament on 10^th February 2020.

About the survey

• The Department of Public Enterprises (DPE), Ministry of Heavy Industries & Public Enterprises, Government of India brings out the Public Sector Enterprises Survey on the performance of Central Public Sector Enterprises (CPSEs) every year.

• As per the Survey 2018-19, there were total 348 CPSEs as on 31^st March, 2019 out of which 249 were operational. Remaining 86 CPSEs were under construction and 13 CPSEs were under closure or liquidation.

The highlights of the performance of CPSEs, during 2018-19 are given  below:

• Total paid up capital in all CPSEs as  on 31.3.2019 stood at Rs. 2,75,697 crore as compared to Rs. 2,53,977 crore as on 31.3.2018, showing a growth of 8.55%.

• Total financial investment in all CPSEs stood at Rs.16,40,628 crore as on 31.3.2019 compared to Rs.14,31,008 crore as on 31.3.2018, recording a growth of 14.65%.

• Capital Employed in all CPSEs stood at Rs. 26,33,956 crore on 31.3.2019 compared to Rs.23,57,913 crore as on 31.3.2018 showing a growth of 11.71 %.

• Total gross revenue from operation of all CPSEs during 2018-19 stood at Rs. 25,43,370 crore compared to Rs. 21,54,774 crore in the previous year showing a growth of 18.03 %.

• Total income of all CPSEs during 2018-19 stood at Rs. 24,40,748 crore compared to Rs.20,32,001 crore in 2017-18, showing a growth of 20.12%.

• Profit of 178 profit making CPSEs stood at Rs. 1,74,587 crore during 2018-19 compared to Rs. 1,55,931crore in 2017-18 showing a growth in profit by 11.96%. 

• Loss of 70 loss making CPSEs stood at Rs.31,635 crore in 2018-19 compared to Rs.32,180 crore in 2017-18 showing decrease in losses by 1.69 %.

• Overall net profit of operating CPSEs during 2018-19 stood at Rs. 1,42,951 crore as compared to Rs. 1,23,751 crore during 2017-18 showing a growth in overall profit of 15.52%.

• Reserves & Surplus of CPSEs stood at Rs. 9,93,328crore as on 31.03.2019 as compared to Rs. 9,26,906 crore as on 31.03.2018, showing an increase by 7.17%.

• Net worth of all CPSEs went from Rs.11,15,552 crore as on 31.03.2018 to Rs. 12,08,758 crore as on 31.03.2019 showing an increase of 8.36 %.

• Contribution of CPSEs to Central Exchequer by way of excise duty, customs duty, GST, corporate tax, interest on Central Government loans, dividend and other duties and taxes stood at Rs. 3,68,803 crore in 2018-19 as against Rs. 3,52,361 crore in 2017-18, showing an increase of 4.67%.

• Foreign exchange earnings of 79 CPSEs through exports of goods and services stood at Rs. 1,43,377 crore in 2018-19 against Rs. 98,714 crore in 2017-18, showing an increase of 45.24%.

• Foreign exchange expenditure of 144 CPSEs on imports and royalty, know-how, consultancy, interest and other expenditure stood at Rs.6,64,914crore in 2018-19 against Rs. 5,22,256crore in 2017-18 showing an increase of 27.32%.

Syllabus subtopic: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

Prelims and Mains focus: about the new major port and its significance; about major ports in India

Context: The Union Cabinet, chaired by the Prime Minister has given its 'in-principle' approval for setting up a Major Port at Vadhavan near Dahanu in Maharashtra.

About the port

1. Vadhavan port will be developed on "land lord model".

2. A Special Purpose Vehicle (SPV) will be formed with Jawaharlal Nehru Port Trust (JNPT) as the lead partner with equity participation equal to or more than 50% to implement the project.

3. The SPV will develop the port infrastructure including reclamation, construction of breakwater, besides establishing connectivity to the hinterland. All the business activities would be undertaken under PPP mode by private developers.

4. Total cost of the project is likely to be Rs.65,544.54 crore.

5. With the development of Vadhavan port, India will break into the countries with top 10 container ports in the world.

About Jawaharlal Nehru Port

• The position of JN Port, the biggest container port in India is 28^th in the world with a traffic of 5.1 million TEUs (Twenty-Foot Equivalent Units).

• Even after the completion of 4th terminal at JN Port with a capacity increase upto10 million TEUs by 2023, it will stand as the 17^th largest container port in the world.

• JNPT caters to the hinterland of Maharashtra, North Karnataka, Telangana and secondary hinterland of Gujarat, Madhya Pradesh, Rajasthan, NCR, Punjab and Uttar Pradesh.

Why the need felt for Vadhavan Port?

• There is a need for a deep draft port that will accommodate the largest Container Ships in the world and also cater to the spill over traffic from JNPT port once its planned capacity of 10 million TEUs is fully utilized.

• JNPT and Mundra, the two largest container handling ports of the country (for mid size container ships only), have drafts of 15 M and 16 M respectively, while the world's largest container handling modern deep draft ports require a draft of 18M-20M.

• The Vadhavan port has a natural draft of about 20 meters close to the shore, making it possible for it to handle bigger vessels at the port. Development of Vadhavan port will enable call of container vessels of 16,000-25,000 TEUs capacity, giving advantages of economies of scale & reducing logistics cost.

• The ever increasing size of container ships makes it imperative that a deep draft container port in West Coast of India is developed. Increasing containerization of cargo in the wake of value-added manufacturing sector makes it important to prepare India’s port infrastructure for handling value-added import and export to facilitate manufacturing activity.

• Container traffic in the JNPT hinterland is expected to grow from 4.5 MTEUs currently to 10.1 MTEUs by 2022-25 when JNPT's potential will be fully exhausted. The demand for container traffic will further accelerate after the plans for improving logistic infrastructure fructify and the 'Make in India' push drives greater exports and manufacture sourcing to India.

Syllabus subtopic: Government Budgeting.

Prelims and Mains focus: reforms announced in the various sectors during the Union Budget 2020-21

Context: Union Minister for Finance & Corporate Affairs, while presenting the Union Budget 2020-21, in Parliament, said that infrastructure was crucial to the theme of “Economic development” and hence the Budget which is dedicated to provide “Ease of Living” to all citizen.

Reforms announced

• Emphasising need for efficiency of India Sea Ports and use of technology to improve their performance, the FM said the government would consider corporatizing at least one major port and subsequently its listing on the stock exchanges.

• Inland Waterways: the “Jal Vikas Marg” on National Waterway-1 will be completed and further the 890 Km Dhubri-Sadiya connectivity will be done by 2022”.

• Arth Ganga-  PM’s vision to energise economic activity along the river banks. In order to boost the transport Infrastructure in the country the Union Budget has provided for about Rs 1.70 Lakh Crore.

• Civil Aviation Sector: 100 more airports would be developed by 2024 to support Udaan scheme. India’s Air traffic has grown rapidly as compared to global average and the Air fleet number was expected to go up from the present 600 to 1200 during this time.

• Farmer’s income: In the direction of doubling farmers’ income by 2022, among other measures, the Finance Minister also announced launch of “Krishi Udaan” by the Ministry of Civil aviation on International & National routes. This is aimed to help improve value realisation especially in North-East and Tribal districts.

• Power and Renewable Energy: The FM also proposed an allocation of Rs. 22000 crore for Power and Renewable Energy sector in 2020-21. Finance minister urged all States and Union Territories to replace conventional meters by prepaid “Smart Meters” in the next 3 years and measures to reform DISCOMs.

• The Finance Minister proposed in the Budget that national gas grid would be expanded from the present 16200 km to 27000 km with further reforms to be undertaken to facilitate transparent price discovery and ease of transactions.

• The Finance Minister also proposed to extend corporate tax rate of 15% to new domestic companies engaged in the generation of electricity.

Syllabus subtopic: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Prelims and Mains focus: about the key highlights of the economic survey and various suggestions given in it

Context: The Union Minister for Finance & Corporate Affairs, presented the Economic Survey 2019-20 in the Parliament today.

The Key Highlights of the Economic Survey 2019-20 are as follows:

Wealth Creation: The Invisible Hand Supported by the Hand of Trust

• India’s dominance as global economic power for three-fourths of economic history manifests by design.
• Kautilya’s Arthashastra postulates the role of prices in an economy (Spengler, 1971).
• Historically, Indian economy relied on the invisible hand of the market with the support of the hand of trust:
  1. Invisible hand of the market reflected in openness in economic transactions.
  2. Hand of trust appealed to ethical and philosophical dimensions.
• Post-liberalisation, Indian economy supports both pillars of the economic model advocated in our traditional thinking.
• Survey illustrates enormous benefits accruing from enabling the invisible hand of the market.
• Exponential rise in India’s GDP and GDP per capita post-liberalisation coincides with wealth generation.
• Survey shows that the liberalized sectors grew significantly faster than the closed ones.
• Need for the hand of trust to complement the invisible hand, illustrated by financial sector performance during 2011-13.
• Survey posits that India’s aspiration to become a $5 trillion economy depends critically on:
  1. Strengthening the invisible hand of the market.
  2. Supporting it with the hand of trust.
• Strengthening the invisible hand by promoting pro-business policies to:
•  Provide equal opportunities for new entrants.
•  Enable fair competition and ease doing business.
•  Eliminate policies unnecessarily undermining markets through government intervention.
•  Enable trade for job creation.
•  Efficiently scale up the banking sector.
• Introducing the idea of trust as a public good, which gets enhanced with greater use.
• Survey suggests that policies must empower transparency and effective enforcement using data and technology.

Entrepreneurship and Wealth Creation at the Grassroots

• Entrepreneurship as a strategy to fuel productivity growth and wealth creation.
• India ranks third in number of new firms created, as per the World Bank.
• New firm creation in India increased dramatically since 2014:
  1. 12.2 % cumulative annual growth rate of new firms in the formal sector during 2014-18, compared to 3.8 % during 2006-2014.
  2. About 1.24 lakh new firms created in 2018, an increase of about 80 % from about 70,000 in 2014.

• Survey examines the content and drivers of entrepreneurial activity at the bottom of the administrative pyramid – over 500 districts in India.

• New firm creation in services is significantly higher than that in manufacturing, infrastructure or agriculture.

• Survey notes that grassroots entrepreneurship is not just driven by necessity.

• A 10 percent increase in registration of new firms in a district yields a 1.8 % increase in Gross Domestic District Product (GDDP).

• Entrepreneurship at district level has a significant impact on wealth creation at the grassroots.

• Birth of new firms in India is heterogeneous and dispersed across districts and sectors.

• Literacy and education in a district foster local entrepreneurship significantly:

• 1. Impact is most pronounced when literacy is above 70 per cent.
  2. New firm formation is the lowest in eastern India with lowest literacy rate (59.6 % as per 2011 Census).
• Physical infrastructure quality in the district influences new firm creation significantly.
• Ease of Doing Business and flexible labour regulation enable new firm creation, especially in the manufacturing sector.
• Survey suggests enhancing ease of doing business and implementing flexible labour laws can create maximum jobs in districts and thereby in the states.

Pro-business versus Pro-markets

• Survey says that India’s aspiration of becoming a $5 trillion economy depends critically on:
  1. Promoting ‘pro-business’ policy that unleashes the power of competitive markets to generate wealth.
  2. Weaning away from ‘pro-crony’ policy that may favour specific private interests, especially powerful incumbents.

• Viewed from the lens of the Stock market, creative destruction increased significantly post-liberalisation:
  1. Before liberalisation, a Sensex firm expected to stay in it for 60 years, which decreased to only 12 years after liberalisation.
  2. Every five years, one-third of Sensex firms are churned out, reflecting the continuous influx of new firms, products and technologies into the economy.

• Despite impressive progress in enabling competitive markets, pro-crony policies destroyed value in the economy:
  1. An equity index of connected firms significantly outperformed market by 7 % a year from 2007 to 2010, reflecting abnormal profits extracted at common citizens’ expense.
  2. In contrast, the index underperforms market by 7.5 % from 2011, reflecting inefficiency and value destruction inherent in such firms.

• Pro-crony policies such as discretionary allocation of natural resources till 2011 led to rent-seeking by beneficiaries while competitive allocation of the same post 2014 ended such rent extraction.
• Similarly crony lending that led to wilful default, wherein promoters collectively siphoned off wealth from banks, led to losses that dwarf subsidies for rural development.

Undermining Markets: When Government Intervention Hurts More Than It Helps

• Government intervention, though well intended, often ends up undermining the ability of the markets to support wealth creation and leads to outcomes opposite to those intended.
• Four examples of anachronistic government interventions:

1. Essential Commodities Act (ECA), 1955:

o Frequent and unpredictable imposition of blanket stock limits on commodities under ECA distorts:

• The incentives for the creation of storage infrastructure by the private sector.
• Movement up the agricultural value chain.
• Development of national market for agricultural commodities.

o Imposition of stock limits on dal in 2006-Q3, sugar in 2009-Q1 and onions in September, 2019 spiked up the volatility of the retail and wholesale prices of onions.

o The Ministry of Consumer Affairs must examine whether the ECA is relevant in today’s India.

o With raids having abysmally low conviction rate and no impact on prices, the ECA only seems to enable rent-seeking and harassment.

o Survey suggests there is clear evidence for jettisoning this anachronistic legislation.

2. Drug Price Control under ECA:

o The regulation of prices of drugs, through the DPCO 2013, led to increase in the price of the regulated pharmaceutical drug vis-à-vis that of an unregulated but similar drug.

o The increase in prices is greater for more expensive formulations than for cheaper ones and for those sold in hospitals rather than retail shops.

o These findings reinforce that the outcome is opposite to what DPCO aims to do - making drugs affordable.

o Government, being a huge buyer of drugs, can intervene more effectively to provide affordable drugs by combining all its purchases and exercising its bargaining power.

o Ministry of Health and Family Welfare must evolve non-distortionary mechanisms that utilise Government’s bargaining power in a transparent manner.

3. Government intervention in Grain markets:

o Policies in the food-grain markets led to:

• Emergence of Government as the largest procurer and hoarder of rice and wheat.
• Crowding out of private trade.
• Burgeoning food subsidy burden
• Inefficiencies in the markets, affecting the long run growth of agricultural sector.

o The food-grains policy needs to be dynamic and allow switching from physical handling and distribution of food-grains to cash transfers/food coupons/smart cards.

4. Debt waivers:

o Analysis of debt waivers given by States/Centre:

• Full waiver beneficiaries consume less, save less, invest less and are less productive after the waiver, compared to the partial beneficiaries.
• Debt waivers disrupt the credit culture.
• They reduce formal credit flow to the very same farmers, thereby defeating the purpose.

• Survey suggests that:
• Government must systematically examine areas of needless intervention and undermining of markets; but it does not argue that there should be no Government intervention.
• Instead it suggests that the interventions that were apt in a different economic setting may have lost their relevance in a transformed economy.
• Eliminating such instances will enable competitive markets spurring investments and economic growth.

Creating Jobs and Growth by Specializing in Network Products

• Survey says India has unprecedented opportunity to chart a China-like, labour-intensive, export trajectory.
• By integrating “Assemble in India for the world” into Make in India, India can:
  • Raise its export market share to about 3.5 % by 2025 and 6 % by 2030.
  • Create 4 crore well-paid jobs by 2025 and 8 crore by 2030.

• Exports of network products can provide one-quarter of the increase in value added required for making India a $5 trillion economy by 2025.
• Survey suggests a strategy similar to one used by China to grab this opportunity:
  • Specialization at large scale in labour-intensive sectors, especially network products.
  •  Laser-like focus on enabling assembling operations at mammoth scale in network products.
  • Export primarily to markets in rich countries.
  • Trade policy must be an enabler.

• Survey analyses the impact of India’s trade agreements on overall trade balance:
  • India’s exports increased by 13.4 % for manufactured products and 10.9 % for total merchandise
  • Imports increased by 12.7 % for manufactured products and 8.6 per cent for total merchandise.
  • India gained 0.7 % increase in trade surplus per year for manufactured products and 2.3 % per year for total merchandise.

Targeting Ease of Doing Business in India

• A jump of 79 positions to 63 in 2019 from 142 in 2014 in World Bank’s Doing Business rankings.

• India still trails in parameters such as Ease of Starting Business, Registering Property, Paying Taxes and Enforcing Contracts.

• Survey has numerous case studies:
  • For merchandise exports, the logistics process flow for imports is more efficient than that for exports.
  • Electronics exports and imports through Bengaluru airport illustrate how Indian logistical processes can be world class.

• The turnaround time of ships in India has almost halved to 2.48 days in 2018-19 from 4.67 days in 2010-11.

• Suggestions for further Ease of Doing Business:

• • Close coordination between the Logistics division of the Ministry of Commerce and Industry, the Central Board of Indirect Taxes and Customs, Ministry of Shipping and the different port authorities.
  • Individual sectors such as tourism or manufacturing require a more targeted approach that maps out the regulatory and process bottlenecks for each segment.

Golden jubilee of bank nationalisation: Taking stock

• Survey observes 2019 as the golden jubilee year of bank nationalization
• Accomplishments of lakhs of Public Sector Banks (PSBs) employees cherished and an objective assessment of PSBs suggested by the Survey.
•  Since 1969, India’s Banking sector has not developed proportionately to the growth in the size of the economy.
• India has only one bank in the global top 100 – same as countries that are a fraction of its size: Finland (about 1/11th), Denmark (1/8th), etc.
•  A large economy needs an efficient banking sector to support its growth.
•  The onus of supporting the economy falls on the PSBs accounting for 70 % of the market share in Indian banking:
  • PSBs are inefficient compared to their peer groups on every performance parameter.
  • In 2019, investment for every rupee in PSBs, on average, led to the loss of 23 paise, while in NPBs it led to the gain of 9.6 paise.
  • Credit growth in PSBs has been much lower than NPBs for the last several years.

• Solutions to make PSBs more efficient:
  • Employee Stock Ownership Plan (ESOP) for PSBs’ employees
  • Representation on boards proportionate to the blocks held by employees to incentivize employees and align their interests with that of all shareholders of banks.
  • Creation of a GSTN type entity that will aggregate data from all PSBs and use technologies like big data, artificial intelligence and machine learning in credit decisions for ensuring better screening and monitoring of borrowers, especially the large ones.

Financial Fragility in the NBFC Sector

•  Survey investigates the key drivers of Rollover Risk of the shadow banking system in India in light of the current liquidity crunch in the sector.
•  Key drivers of Rollover Risk:
  • Asset Liability Management (ALM) Risk.
  • Interconnectedness Risk.
  • Financial and Operating Resilience of an NBFC.
  • Over-dependence on short-term wholesale funding.

• Survey computes a diagnostic (Health Score) by quantifying the Rollover risk for a sample of HFCs and Retail-NBFCs (which are representative of their respective sectors).
•  The analysis of the Health Score has the following findings:
  • The HFC sector exhibited a declining trend post 2014 and overall health of the sector worsened considerably by the end of FY2019.
  • The Score of the Retail-NBFC sector was consistently below par for the period 2014 -19.
  • Larger Retail-NBFCs had higher Health Scores but among medium and small Retail- NBFCs, the medium size ones had a lower score for the entire period of 2014-19.

• Survey suggests that the Health Score provides an early warning signal of impending liquidity problems.

•  Equity markets react favourably to increase in Health Score of individual HFCs and Retail-NBFCs.

•  The Survey prescribes this analysis to efficiently allocate liquidity enhancements across firms (with different Health Scores) in the NBFC sector, thereby arresting financial fragility in a capital-efficient manner.

Privatization and Wealth Creation

•  Survey examines the realized efficiency gains from privatization in the Indian context and bolsters the case for aggressive disinvestment of CPSEs.
•  Strategic disinvestment of Government’s shareholding of 53.29 per cent in HPCL led to an increase of around Rs. 33,000 crore in national wealth.
•  Survey presents an analysis of the before-after performance of 11 CPSEs which underwent strategic disinvestment from 1999-2000 to 2003-04:
  • Financial indicators such as net worth, net profit, return on assets (ROA), return on equity (ROE) etc of the privatized CPSEs, on an average, have improved significantly.
  • Privatized CPSEs have been able to generate more wealth from the same resources.

•  Survey suggests aggressive disinvestment of CPSEs to:
  • Bring in higher profitability.
  • Promote efficiency.
  • Increase competitiveness.
  • Promote professionalism.

Is India’s GDP Growth Overstated? No!

• GDP growth is a critical variable for decision-making by investors and policymakers. Therefore, the recent debate about accuracy of India’s GDP estimation following the revised estimation methodology in 2011 is extremely significant.
• As countries differ in several observed and unobserved ways, cross-country comparisons have to be undertaken by separating the effect of other confounding factors and isolating effect of methodology revision alone on GDP growth estimates.
• Models that incorrectly over-estimate GDP growth by 2.7 % for India post-2011 also misestimate GDP growth over the same period for 51 out of 95 countries in the sample.
• Several advanced economies such as UK, Germany and Singapore have their GDPs misestimated with incompletely specified econometric model.
• Correctly specified models that account for all unobserved differences and differential trends in GDP growth across countries fail to find any misestimating of growth in India or other countries.
• Concerns of a misestimated Indian GDP are unsubstantiated by the data and are thus unfounded.

Thalinomics: The Economics of a Plate of Food in India

• An attempt to quantify what a common person pays for a Thali across India.
• A shift in the dynamics of Thali prices since 2015-16.
• Absolute prices of a vegetarian Thali have decreased significantly since 2015-16 across India and the four regions; though the price has increased during 2019-20.
• Post 2015-16:
  • Average household gained close to Rs. 11, 000 on average per year from the moderation in prices in the case of vegetarian Thali.
  • Average household that consumes two non-vegetarian Thalis gained close to Rs. 12, 000 on average per year during the same period.
• From 2006-07 to 2019-20:
  • Affordability of vegetarian Thalis improved 29 %.
  •  Affordability of non-vegetarian Thalis improved by 18 %.

India’s Economic Performance in 2019-20

• India’s GDP growth moderated to 4.8 % in H1 of 2019-20, amidst a weak environment for global manufacturing, trade and demand.
• Real consumption growth has recovered in Q2 of 2019-20, cushioned by a significant growth in government final consumption.
• Growth for ‘Agriculture and allied activities’ and ‘Public administration, defense, and other services’ in H1 of 2019-20 was higher than in H2 of 2018-19.

• India’s external sector gained further stability in H1 of 2019-20:
  • Current Account Deficit (CAD) narrowed to 1.5 % of GDP in H1 of 2019-20 from 2.1 % in 2018-19.
  • Impressive Foreign Direct Investment (FDI).
  • Rebounding of portfolio flows.
  • Accretion of foreign exchange reserves.
  • Sharper contraction of imports as compared to that of exports in H1 of 2019-20, with easing of crude prices.

• Headline inflation expected to decline by year end:
  • Increased from 3.3 % in H1 of 2019-20 to 7.35 % in December 2019-20 due to temporary increase in food inflation.
  • Rise in CPI-core and WPI in December 2019-20 suggests building of demand pressure.

• Deceleration in GDP growth can be understood within the framework of a slowing cycle of growth:
  • Financial sector acted as a drag on the real sector (investment-growth-consumption).

• Reforms undertaken during 2019-20 to boost investment, consumption and exports:
  • Speeding up the insolvency resolution process under Insolvency and Bankruptcy Code (IBC).
  • Easing of credit, particularly for the stressed real estate and NBFC sectors.
  •  Announcing