Indian Economy | Topic: Issues Relating to Growth & Development - Capital Market & SEBI

crackIAS.com Source : www.thehindu.com Date : 2019-07-01 NEW FRAMEWORK: ON SEBI'S NORMS FOR MUTUAL FUND INVESTMENTS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Capital Market & SEBI

After introducing a new standard framework for credit rating agencies last month, the Securities and Exchange Board of India came up with more stringent regulations to govern the management of mutual funds. The mutual fund industry came under its scrutiny after some mutual funds in the last few months had to postpone redemption of their fixed maturity plans (FMPs). HDFC Mutual Fund and Kotak Mutual Fund came to grief and had to roll over or proportionately reduce redemption of their FMPs in April after some Essel group companies failed to redeem their non-convertible debentures where the funds had invested. According to the new SEBI regulations, liquid mutual fund schemes will have to invest at least 20% of their funds in liquid assets like government securities. They will be barred from investing more than 20% of their total assets in any one sector; the current cap is 25%. When it comes to sectors like housing finance, the limit is down to 10%. These measures are aimed to prevent situations such as the one being witnessed now. While the mandated investment in government securities will ensure a modicum of liquidity, the reduction in sectoral concentration will discipline funds and force them to diversify their risks. Some mutual funds entered into standstill agreements with companies in whose debt instruments the funds had invested. This is not a welcome practice and goes against the interests of investors in the mutual fund. SEBI has done the right thing by banning funds from entering into such standstill agreements. Further, SEBI has required that assets of mutual funds be valued on a mark-to-market basis in order to better reflect the value of their investments.

While SEBI’s intent to deal with the risks within the financial system is commendable, there could be unintended consequences to the regulator’s actions — which need watching. One of the new regulations introduced by SEBI is to increase the exit load on short-term investments in liquid mutual funds to discourage sudden demands for redemption. This could possibly hinder fund flow into the bond market, which in India is already quite undeveloped when compared to the rest of the world. While SEBI is doing a commendable job in disciplining the markets and intermediaries, the larger question is whether the regulator can really protect investors beyond a certain point. Market investments involve risk, and investors seeking high returns may in fact be willing to assume the increased risk that comes with such investment. That said, what the regulator is probably more concerned about is the ripple effect of defaults and roll-overs on the system. Investor confidence can be shaken by defaults and that will have consequences for the economy. Viewed from this perspective, the regulator’s latest rules should be welcomed.

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crackIAS.com Source : www.thehindu.com Date : 2019-07-01 FROM BABY STEPS TO GIANT STRIDES, GST GAINS MOMENTUM Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

As more service providers walk into GST, the economy gets more formalised.Reuters

The historical goods and services tax (GST) which was implemented across the country from July 1, 2017 is now two years old. India was not new to indirect tax levies, but consolidating Central and State levies and achieving uniformity was no joke. Credit is due to the Central Government as well as each and every State Government and officials who participated in this exercise.

What industry got

The industry loves GST for harmonising taxes, elimination of cascading effect of tax, widening the scope of input tax credit and for achieving a uniform tax rate for a product or service across the country. Tangible benefits include faster refunds, less interaction with tax authorities, abolition of checkposts, etc. There are other intangible benefits on account of GST. In the past, a manufacturer in State A would lose a customer in State B if he made a CST supply.

To prevent the loss, the manufacturer would open a depot in order to effect a local supply in State B. The depot was not a business requirement, but one of tax.

Under GST, a supplier can supply goods from any part of India and tax or input tax credit is no longer an arbitrage in competition.

The customer is now in a position to source from any supplier and the latter is in a position to access markets across India.

Industry gains include elimination or dismantling of structures created under the pre-GST era for tax purposes, supply-chain efficiencies, direct customer access, and a robust transparent trail for the movement of goods. On the flip side, the industry is extremely unhappy with the massive increase in compliance requirements, frequent battles with the GST portal, wastage of manhours in dealing with technical glitches, and facing potential loss of ITC on account of supplier facing similar problems.

The industry is also not happy with frequent changes in law, including scenarios where the portal does not permit what the law permits.

WhatcrackIAS.com government got

Monthly revenue from GST has crossed Rs. 1,00,000 crore, even though the GDP growth is low and the economy is witnessing a slump. GST has resulted in the widening of the tax base. Excellent data mining has resulted in identification of tax evasion at an early stage. E-way bill system has brought in an effective, transparent movement trail.

Higher tax collections even without intervention indicates compliance. As more and more vendors and service providers walk into GST, the formalisation of economy takes place. The walk-in is voluntary and sometimes compelled by the bigger player, who prefers only registered compliant suppliers since ITC is linked with vendor compliance.

The natural corollary would be the increase in direct tax collections from these new assessees. Many manufacturing states had anticipated huge losses on account of GST compared to their pre-GST collections.

This has not happened probably due to significant consumption of services in such manufacturing States.

The government, however, is extremely unhappy with the fake invoice racket and rightly so. These players provide a disservice to the economy and also to honest tax payers. While action is welcome, the government should pursue the route of adjudication, prosecution and early conviction instead of the threat of non-bailable arrest provisions which have a potential for misuse.

Unlike many other countries which faced massive inflation on account of introduction of GST, India did not face any inflation. This was probably due to an effective rate of tax policy, as well as timely course correction.

The National Anti-Profiteering Authority had also played a role, but has outlived its objective. There was no necessity for a two-year extension. The consumer has gained the most in GST. From an era of cascading taxes, which had nearly 30% of taxes on goods; dual and multiple levies on services, the consumer is now seeing massive reduction in the rate of tax for goods and services.

In a typical restaurant, where there used to be VAT of 2% or 12.5% and a service tax of 6%, the customer is enjoying a flat 5% which is lower than the VAT rates applicable in many countries in the European Union. Awareness of GST among consumers is at an all-time high, thanks to social media.

However, the downside to this is tax evasion, which is now driven by consumers. In the past, when a customer procured goods or services, he was least bothered about the tax rate since excise duty was invisible. The VAT rate was low and was not a significant deterrent. When the overall indirect tax levy was 30%, it was not reflected in the invoice, but when the rate has declined to 12% and 18%, awareness about GST makes the customer assume it is a new levy which affects his pocket, and the consumer opens the cash channel.

The law

GST law has turned out to be the most complex one on account of design faults and frequent tinkering. The distinction between goods and services manifests itself in GST in multiple segments.crackIAS.com The Advance Ruling mechanism has failed since most rulings are in favour of the revenue and in some cases, against the provisions of the statute. The constitution of the AAR is the issue, since it is not presided by a judicial member and comprises sitting officers of the tax department. The GST Council has played a stellar role in cooperative federalism since 35 meetings have taken place, where resolutions have been passed unanimously despite political differences.

This kind of unanimity is unseen even in flat association meetings. In only two years of existence, 32 amendments to the CGST Act; 31 amendments to the CGST Rules; 87 CGST rate Notifications; 179 CGST non-rate Notifications; 90 IGST rate Notifications; 19 IGST non-rate Notifications; 101 Board Circulars; 10 Removal of Difficulty Orders; matching Notifications from 29 States, do not indicate a simple law.

(The writer is an advocate and tax consultant)

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.thehindu.com Date : 2019-07-02 KEY INVESTMENT METRIC Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Capital Market & SEBI

What is Net Asset Value?

The Net Asset Value (NAV) is typically used in the context of mutual funds and exchange traded funds.

NAVs offer a transparent way to arrive at a value for a fund. The value to the investor is arrived at on a per-unit basis.

Why is it necessary?

When you invest in a mutual fund, you are given a certain number of units at a certain value.

Depending on how the mutual fund performs, the value of its assets and liabilities change, reflecting in the price per unit, hence determining the value of your investment.

An investor in the mutual fund can buy more units or can redeem her units for cash. The net asset value per unit determines the value of the transaction.

How is NAV calculated?

Net Asset Value per unit = (total assets — total liabilities) / total number of outstanding units

How often does the NAV change?

Unlike share values that change real-time depending on the price they command in the markets, NAVs for mutual funds are determined by the end-of-day value of the shares in which the mutual fund has invested.

Is the NAV the best indicator of a fund’s performance?

While the NAV is a reasonably good indicator of a fund’s performance, it is not wholly accurate.

Coupled with the NAV reading, one has to look at the dividend or interest that the fund has paid out to investors over a period.

Mutual funds typically pay out dividends, or interest accrued, to investors. SincecrackIAS.com these are ‘assets’ that go out of the fund’s books (unless reinvested), the NAV comes down proportionately.

That does not by itself mean that there has been a dip in the fund’s performance. The annual total return is a better indicator of a fund’s wholesome performance.

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crackIAS.com Source : www.thehindu.com Date : 2019-07-02 MONEY IN SWISS BANKS: INDIA RANKED 74 Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

India has moved down one place to 74th rank in terms of money parked by its citizens and enterprises with Swiss banks, while the U.K. has retained its top position, as per data released by the central banking authority of the Alpine nation.

India was ranked 73rd last year, after jumping from its 88th rank a year ago.

An analysis of the latest annual banking statistics of the Swiss National Bank (SNB) shows that India remains ranked very low when it comes to money parked by Indian individuals and enterprises in Swiss banks, including through their India-based branches, while accounting for 0.07% of the aggregate funds parked by all foreign clients of the Switzerland-based banks.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.thehindu.com Date : 2019-07-03 NOT BY WISHFUL THINKING Relevant for: Indian Economy | Topic: Issues relating to Mobilization of resources incl. Savings, Borrowings & External Resources

In early June, at a NITI Aayog meeting, Prime Minister Narendra Modi set a clear and bold economic target — to grow India into a $5 trillion economy by 2024. It is now for ‘Team India’, as the meeting was bannered, to translate this target into a plan and policies and programmes. Historically, such goals by popularly elected leaders have voiced the aspiration of voters and energised nations to realise their potential.

What does the targeted $5 trillion economy mean in familiar economic terms? It is 350,00,000 crore of gross domestic product (GDP) at current prices, at 70 to a U.S. dollar exchange rate. India’s (provisional) GDP in 2018-19 at current prices is 190,10,164 crore (or $2.7 trillion), which means the annual per capita income is 1,42,719, or about 11,900 per month.

The target implies an output expansion by 84% in five years, or at 13% compound annual growth rate. Assuming an annual price rise of 4%, in line with the Reserve Bank of India’s inflation target, the required growth rate in real, or inflation-adjusted, terms is 9% per year. To get a perspective, India officially grew at 7.1% per year over the last five years, but the annual growth rate never touched 9%. Hence, the target seems ambitious. Is it doable?

How does the target compare with the Asian experience? China, with a historically unprecedented growth record in its best five years, during 2003-07, grew at 11.7%; South Korea, between 1983 and 1987, grew at 11%. So, Mr. Modi’s target is smaller than the best historical records and may seem realistic.

What would it take to grow at 9%? No country grew at such a pace without mobilising domestic saving and raising fixed investment rates.

In the last five years, on average, the domestic saving rate was 30.8% of gross national domestic income (GNDI), and the investment rate (gross capital formation to GDP ratio) was 32.5%. Assuming the underlying technical coefficients remain constant, a 9% annual growth rate calls for 39% of domestic saving rate and 41.2% of investment rate. Correspondingly, shares of private consumption need to shrink to about 50% of GDP from the current level of 59% of GDP at current prices, assuming foreign capital inflow remains at 1.7% of GDP.

In other words, India will have to turn into an investment-led economy as it happened during the boom last decade (2003-08) before the financial crisis, or like China since the 1980s. Granting that rapid technical progress or changes in output composition could reduce the required incremental capital-output ratio (ICOR), it nevertheless will call for a nearly 8-9 percentage point boostcrackIAS.com to saving and investment rates. If, however, the economy has grown at a much slower pace than the officially claimed rate — as the on-going GDP debate suggests and at 4.5% as the former Chief Economic Adviser Arvind Subramanian has pegged it — then Mr. Modi’s growth target would become even more daunting.

These stark facts call for a re-thinking in the ruling dispensation that seems to hail India as a consumption-led growth story. There is a belief that greater foreign capital (FDI) inflow would fill in the investment gap, as evident from the NITI Aayog Vice-Chairman’s various pronouncements. History shows that no country has succeeded in accelerating its growth rate without raising the domestic saving rate to close to 40% of GDP. Foreign capital can fill in some vital gaps but is not a substitute for domestic resources. Even in China, FDI inflows as a proportion of GDP never exceeded 5-6%, most of which was in fact round-tripped capital through Hong Kong for securing better property rights at home.

Gross FDI inflow into India peaked in 2008-09 at 2.7% of GDP, decelerating thereafter. As it increasingly consists of private equity (PE) with a three- to five-year tenure, mostly acquiring capital assets (contrary to the textbook FDI definition as fixed capital formation for the long term) net FDI rate is lower than the gross inflows, standing at 1.5% of GDP in 2017-18. Hence, there is a need for caution against the exuberance (or opportunistic bias) that FDI will help to get to the $5 trillion GDP target.

What is serious is that the economy has slowed down for a while now. The domestic saving rate has declined from 31.4% in 2013-14 to 29.6% in 2016-17; and gross capital formation rate from 33.8% to 30.6% during the same period. The banking sector’s ability to boost credit growth is limited by non-performing assets (NPAs) and the governance crisis in the financial sector. Export to GDP ratio has declined rapidly, with a looming global trade war on the horizon, as has been indicated by the Baltic Dry Index. The highly regarded leading indicator of global trade, currently trading at 1354 is forecasted to decline to less than 1,000 index points by the year-end (a decline from its historic high of 11,793 points in May 2008, just before the financial crisis set in).

Given the foregoing, the $5 trillion target appears daunting. It may yet be doable, provided policymakers begin with a realistic assessment, by willing to step up domestic saving and investment, and not by the wishful thinking of FDI-led growth accelerations in uncertain economic times.

R. Nagaraj is with the Indira Gandhi Institute of Development Research, Mumbai

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-03 HIGH POWERED COMMITTEE OF CHIEF MINISTERS CONSTITUTED FOR ‘TRANSFORMATION FOR INDIAN AGRICULTURE’ Relevant for: Indian Economy | Topic: Agriculture Issues and related constraints

NITI Aayog High Powered Committee of Chief Ministers constituted for ‘Transformation for Indian Agriculture’

Maharashtra CM Devendra Fadnavis to be the Convenor

CMs of Karnataka, Haryana, Arunachal Pradesh, Gujarat, UP, MP & Union Minister of Agriculture, RD & Panchayati Raj to be the Members

Member , NITI Aayog Ramesh Chand to be the Member Secretary

Committee to discuss measures for transformation of agriculture and raising farmers’ income

Modalities for adoption and time bound implementation of agriculture sector reforms to be suggested by the Committee

Committee to submit its report in Two Months PostedcrackIAS.com On: 01 JUL 2019 8:25PM by PIB Delhi Agriculture, rural development , water conservation and its proper use have been among the major planks of NDA Government led by Prime Minister Shri Narendra Modi. In keeping with his promises and subsequent to the deliberations of Governing Council meeting of NITI Aayog, the Prime Minister has set up a High Powered Committee of Chief Ministers for ‘Transformation of Indian Agriculture’. The composition of the committee is follows:

i. Sh. Devendra Fadnavis, Chief Minister, Maharashtra : Convenor ii. Sh H.D. Kumaraswamy, Chief Minister, Karnataka : Member iii. Sh. Manohar Lal Khattar, Chief Minister, Haryana : Member iv. Sh. Pema Khandu, Chief Minster, Arunachal Pradesh : Member v. Sh. Vijay Rupani, Chief Minster, Gujarat : Member vi. Sh. Yogi Adityanath, Chief Minister, Uttar Pradesh : Member vii. Sh. Kamal Nath, Chief Minister, Madhya Pradesh : Member viii. Sh.Narendra Singh Tomar, Minister, Agriculture Rural Development and Panchyati Raj, GoI : Member ix. Sh. Ramesh Chand, Member NITI Aayog : Member-Secy

The terms of Reference (ToR) of the Committee would be

i) to discuss measures for transformation of agriculture and raising farmers’ income and suggest modalities for adoption and time bound implementation of following reforms by States/UTs:

a) The….State/Union Territory ‘Agriculture Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017’ (APLM Act, 2017) circulated by Ministry of Agriculture and Farmers’ Welfare, GoI to States/UTs.

b) The …..States/Union Territory ‘Agriculture Produce and Livestock, Contract Farming and Services (Promotion & Facilitation) Act, 2018’ circulated by Ministry of Agriculture and Farmers Welfare, GoI to States/UTs.

ii) to examine various provisions of Essential Commodity Act (ECA), 1955 and situations that require ECA. To suggest changes in the ECA to attract private investments in agricultural marketing and infrastructure.

iii) to suggest mechanism for linking of market reforms with e-NAM, GRAM and other relevant Centrally Sponsored Schemes.

iv) to suggest policy measures to (a) boost agricultural export (b) raise growth in food processing (c) attract investments in modern market infrastructure, value chains and logistics.

v) to suggest measures to upgrade agri-technology to global standards and improve access of farmers to quality seed, plant propagation material and farm machinery in agriculturally advance countries.

vi) to propose any other relevant reforms for transformation of agriculture sector and raising farmers’ income. ThecrackIAS.com committee will submit its report within two months of the date of notification of the Committee.

The High Powered Committee of Chief Ministers for ‘Transformation of Indian Agriculture’ will be serviced by NITI Aayog.

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crackIAS.com Source : www.thehindu.com Date : 2019-07-04 A SCHEME FOR FARMERS THAT HAS NOT REACHED MOST FARMERS Relevant for: Indian Economy | Topic: Agriculture Issues and related constraints

The PM-KISAN scheme was operationalised on February 24.

The Pradhan Mantri Kisan Samman Nidhi (PM-Kisan), a cash transfer programme that draws on major initiatives by two State governments, has a long way to go in terms of both its implementation and scope of coverage. Even as the cropping season is under way, the scheme’s support has not reached farmers in most of the country’s regions.

Launched by the Centre at the end of its previous tenure and made effective retrospectively from December 1, 2018, the measure is a necessary state response to assuage agrarian unrest. The scheme’s original objective, to “supplement financial needs” of the country’s Small and Marginal Farmers (SMFs) and to “augment” farm incomes, has now been broadened to include all categories of agricultural landowners. This expansion would benefit an additional 10% of rural landed households.

PM-Kisan offers 6,000 a year per household in three instalments. Broadly speaking, this amounts to only about a tenth of the production cost per hectare or consumption expenditure for a poor household. Hence, though what the programme offers is meagre, it promises some relief to poor farmers by partially supplementing their input costs or consumption needs.

The cash transfer is not linked to the size of the farmer’s land, unlike Telangana’s Rythu Bandhu scheme, under which farmers receive 8,000 per annum for every acre owned. While landless tenants have been left out in both the schemes, the link with land size makes the support provided by the Telangana scheme more substantial. PM-Kisan also falls short of Odisha’s Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme, which includes even poor rural households that do not own land.

Though the first quarterly instalment, for the December 2018-March 2019 period, was to be provided in the last financial year, the benefits of PM-Kisan have not reached farmers in most parts of the country. With kharif cultivation activity under way already, the scheme’s potential to deliver is contingent on its immediate implementation.

There are 125 million farming households owning small and marginal holdings of land in the country,crackIAS.com who constitute the scheme’s original intended beneficiaries. However, at present, the list of beneficiaries includes only 32% (40.27 million) of these households.

Further, a majority of the intended beneficiary households are yet to receive even their first instalment of 2,000. Only 27% (33.99 million) received the first instalment, and only 24% (29.76 million) received the second. In budgetary terms, only 17% of the estimated 75,000 crore expenditure has been spent. Moreover, implementation in certain States has been prioritised. U.P., for instance, accounts for one-third of total beneficiary households — 33% (11.16 million) in the first instalment and 36% (10.84 million) in the second. About half of the State’s SMF households have been covered. Only two other States — Gujarat and Andhra Pradesh — have gained a prominent share. A total of 17 States have received a negligible share of the first instalment, accounting for less than 9%.

For the scheme to be effective, PM-Kisan needs to be uniformly implemented across regions. However, one needs to be mindful that it is not a fix for larger structural issues. Cash transfers will cease to be effective if the state withdraws from its other long-term budgetary commitments in agricultural markets and areas of infrastructure such as irrigation. Subsidies for inputs, extension services, and procurement assurances provide a semblance of stability to agricultural production. Food security through the National Food Security Act is also closely linked to government interventions in grain markets. If the budgetary allocations shift decisively in favour of cash transfers, they will be a cause for great concern. Further, the scheme recognises only landowners as farmers. Tenants, who constitute 13.7% of farm households and incur the additional input cost of land rent, don’t stand to gain anything if no part of the cultivated land is owned. Hence, there is a strong case to include landless tenants and other poor families.

Moreover, though the scheme is conceptualised to supplement agricultural inputs, it ceases to be so without the necessary link with scale of production (farm size) built into it. It becomes, in effect, an income supplement to landowning households. If income support is indeed the objective, the most deserving need to be given precedence.

Bhim Reddy is a Fellow at the Institute for Human Development, Delhi; Abhishek Shaw is a doctoral student in Economics

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END Downloaded from crackIAS.com crackIAS.com© Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-04 JOB OPPORTUNITIES BY FDI Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Foreign Capital, Foreign Trade & BOP

Ministry of Commerce & Industry Job Opportunities by FDI

Posted On: 03 JUL 2019 5:07PM by PIB Delhi

The details of FDI inflow & FDI equity inflow reported during the last five years are as under:

FDI Equity Total FDI S. Financial Inflow Inflow No. Year Amount in Amount in US$ million US$ million 1. 2014-15 29,737 45,148 2. 2015-16 40,001 55,559 3. 2016-17 (P) 43,478 60,220 4. 2017-18 (P) 44,857 60,974 5. 2018-19 (P) 44,366 64,375

(P): Figures are provisional subject to reconciliation with RBI crackIAS.com Foreign Direct Investment is largely a matter of private business decisions. FDI inflows depend on a host of factors such as the availability of natural resources, market size, infrastructure, general investment climate as well as macro-economic stability and investment decision of foreign investors.

Sector wise details of FDI reported through equity inflow during the last five years are given below:

S. 2014-15 2015-16 2016-17 2017-18 2018-19 Sector Total No Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar FDI FDI FDI FDI FDI FDI in US$ in US$ in US$ in US$ in US$ in US$ million million million million million million METALLURGICAL 1 359.34 456.31 1,440.18 371.76 598.84 3,226.43 INDUSTRIES 2 MINING 683.52 518.95 26.19 34.36 222.31 1,485.33 3 POWER 707.04 868.80 1,112.98 1,621.00 1,105.64 5,415.47 NON-CONVENTIONAL 4 615.95 776.51 783.57 1,204.46 1,446.16 4,826.66 ENERGY PETROLEUM & 5 1,077.72 48.81 123.20 9.32 65.33 1,324.38 NATURAL GAS BOILERS AND 6 STEAM GENERATING 1.33 77.91 53.91 68.13 0.01 201.29 PLANTS PRIME MOVER (OTHER THAN 7 230.70 159.13 286.88 159.06 244.92 1,080.68 ELECTRICAL GENERATORS) ELECTRICAL 8 574.83 444.88 2,230.69 488.72 976.50 4,715.63 EQUIPMENTS COMPUTER 9 SOFTWARE & 46.82 167.17 70.19 84.86 11.50 380.54 HARDWARE 10 ELECTRONICS 96.84 208.39 83.97 196.87 451.88 1,037.95 AUTOMOBILE 11 2,725.64 2,526.82 1,609.32 2,089.53 2,623.22 11,574.52 INDUSTRY 12 SEA TRANSPORT 37.69 0.33 22.34 0.01 0.05 60.43 RAILWAY RELATED 13 129.73 73.99 87.57 98.54 72.19 462.02 COMPONENTS INDUSTRIAL 14 716.79 568.26 329.30 462.82 338.18 2,415.35 MACHINERY 15 MACHINE TOOLS 24.06 126.38 23.89 45.16 44.93 264.42 AGRICULTURAL 16 72.35 16.44 15.19 17.20 5.78 126.96 MACHINERY EARTH-MOVING 17 30.11 97.66 52.23 29.18 34.16 243.33 MACHINERYcrackIAS.com MISCELLANEOUS MECHANICAL & 18 186.69 274.57 245.24 106.42 162.67 975.59 ENGINEERING INDUSTRIES COMMERCIAL, OFFICE & 19 33.39 36.68 7.44 20.97 11.78 110.27 HOUSEHOLD EQUIPMENTS MEDICAL AND 20 145.93 173.26 479.71 87.23 156.72 1,042.85 SURGICAL APPLIANCES INDUSTRIAL 21 0.85 7.42 0.80 2.28 1.62 12.97 INSTRUMENTS SCIENTIFIC 22 32.34 6.36 76.66 5.53 3.15 124.05 INSTRUMENTS 23 FERTILIZERS 225.32 20.93 0.89 26.68 86.73 360.54 CHEMICALS (OTHER 24 762.76 1,469.95 1,392.80 1,307.90 1,980.99 6,914.40 THAN FERTILIZERS) PHOTOGRAPHIC 25 RAW FILM AND 0.75 0.00 0.00 0.00 0.00 0.75 PAPER 26 DYE-STUFFS 54.89 3.32 10.70 0.00 1.52 70.43 DRUGS & 27 1,497.74 754.26 857.39 1,009.96 265.97 4,385.32 PHARMACEUTICALS TEXTILES 28 (INCLUDING 177.43 230.13 618.95 454.45 198.14 1,679.10 DYED,PRINTED) PAPER AND PULP 29 (INCLUDING PAPER 116.21 85.21 197.61 71.17 38.00 508.21 PRODUCTS) 30 SUGAR 27.77 105.85 15.92 7.90 1.10 158.54 FERMENTATION 31 225.38 202.36 110.86 38.48 149.49 726.57 INDUSTRIES FOOD PROCESSING 32 515.86 505.88 727.22 904.90 628.24 3,282.10 INDUSTRIES VEGETABLE OILS 33 148.34 34.22 108.45 85.12 116.22 492.35 AND VANASPATI SOAPS, COSMETICS 34 & TOILET 177.22 193.26 92.60 137.03 154.09 754.20 PREPARATIONS 35 RUBBER GOODS 284.51 296.15 262.76 392.21 197.64 1,433.27 LEATHER,LEATHER 36 GOODS AND 34.21 17.13 2.30 22.00 4.52 80.16 PICKERS 37 GLUE AND GELATIN 21.44 0.82 90.60 3.76 13.29 129.91 38 GLASS 41.82 25.78 51.69 70.92 35.59 225.80 39 CERAMICS 35.29 51.21 15.40 50.12 58.09 210.11 CEMENT AND 40 208.99 19.69 2,130.10 19.44 17.61 2,395.83 GYPSUMcrackIAS.com PRODUCTS 41 TIMBER PRODUCTS 8.97 53.17 10.23 9.91 7.75 90.03 DEFENCE 42 0.08 0.10 0.00 0.01 2.18 2.37 INDUSTRIES DIAMOND,GOLD 43 280.18 58.54 123.92 233.03 29.15 724.82 ORNAMENTS TEA AND COFFEE (PROCESSING & 44 1.43 1.12 1.60 20.02 13.64 37.81 WAREHOUSING COFFEE & RUBBER) PRINTING OF BOOKS (INCLUDING LITHO 45 72.58 122.81 53.17 228.40 549.80 1,026.75 PRINTING INDUSTRY) 46 COIR 1.36 0.00 0.00 0.00 0.00 1.36 MISCELLANEOUS 47 765.88 668.77 296.40 398.76 441.16 2,570.96 INDUSTRIES Grand Total 14,216.10 12,555.69 16,333.01 12,695.58 13,568.42 69,368.79

This information was given by the Minister of Commerce and Industry, PiyushGoyal, in a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-04 INVEST INDIA PROGRAMME Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Foreign Capital, Foreign Trade & BOP

Ministry of Commerce & Industry Invest India Programme

Posted On: 03 JUL 2019 5:04PM by PIB Delhi

Invest India was formed in 2009 under Section 25 of the Companies Act 1956 for promotion of foreign investment with 49% equity of the then Department of Industrial Policy and Promotion, Ministry of Commerce and Industry and 51% shareholding by FICCI. The current shareholding pattern of Invest India is 51 % of Industry Associations (i.e. 17% each of FICCI, CII & NASSCOM) and the remaining 49% of Central and 19 State Governments.

As reported by Invest India, it is currently working with 1003 companies, with an indicated investment worth USD 137 Billion and indicated employment of 1,981,147 extending end-to-end facilitation support. Out of these, investments worth USD 23 Billion and 138,083 employment have been realized during September 2014 till date. Invest India has responded to 190,431 business requests during the period from September 2014 till date and is actively working with several Indian States to build capacity and strengthen existing Investment Promotion Agencies as well as bring in global best practices in investment targeting, promotion and facilitation areas.

The projects which are being handled by Invest India, inter-alia, include the following:

1. Proactive Investor Targeting: Invest India identifies target companies across focus sectors from target markets looking to initiate investment into India or further expansion in India. crackIAS.com 1. Handholding support: The provision of high quality services to support investors throughout the investment life cycle is extremely important and Invest India creates vital differentiation and an invaluable service offering of guidance, handholding, problem solving and facilitation for investors.

1. Bilateral CEO Forums: Government of India has institutionalized bilateral CEOs forums with various countries to identify new avenues for cooperation and take initiatives to facilitate business links between countries. Invest India takes up the responsibility of acting as the nodal point for investment related issues/ recommendations and help action investment specific resolutions raised at the CEOs Forums.

1. Country – Sector Outreach: Invest India proactively contributes to national and regional policy development by planning Country/Sector interactions.

1. Strategic Investment Research Unit: It shapes India’s investment landscape and drives a step change in the quality and quantity of FDI. The Strategic Investment Research unit not only act as a strong pillar for the core functions of the IPA, like investor targeting and facilitation, but also assist in preparing investment related briefings.

1. Harnessing Information & Communication Technology for FDI:Invest India scales up use of technology for investment targeting and facilitation. Using Information and Communication Technology, IPAs are putting in place increasingly sophisticated investor inquiry tracking tools to handle and process such inquiries

1. Working with State Investment Promotion Agencies: Invest India plays a central role in ensuring that FDI is on the agenda of all State agencies, State Governments and stakeholders, highlighting the substantial economic and social benefits which can be accrued locally from FDI.

1. Startups: Startup India is a flagship initiative of the Government of India, intended 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. The Department for crackIAS.comPromotion of Industry and Internal Trade with the help of Invest India aims to empower Startups to grow through innovation and design through this intiative.

1. Accelerating Growth of New India’s Innovations (AGNIi): It aims to support the ongoing efforts to boost the innovation ecosystem in the country by connecting innovators across industry, individuals and the grassroots to the market and helping commercialise their innovative solutions. Invest India provide a platform for innovators to bring their market ready products and solutions to industry thereby helping propel India into a new era of inclusive economic growth.

1. India Investment Grid: India Investment Grid (IIG) is an online platform to showcase investment opportunities in India to global investors. The platform is looked after by Invest India. The efforts of Invest India and measures taken by the Government on FDI policy liberalization along with improvement in ease of doing business climate have resulted in unprecedented growth of total FDI inflows. India has recorded USD 64.38 billion FDI inflow in the year 2018-19 which is an increase of 78.6% over financial year 2013-14 when total FDI inflow was USD 36.05 billion.

Department for Promotion of Industry and Internal Trade conducts regular review of the performance of Invest India. Further, the Board of Directors, under chairmanship of Secretary, Department for Promotion of Industry and Internal Trade, including nominees from Government of India, FICCI, CII and NASSCOM manages and oversee the overall operations, direction and strategy of the company. Regular meetings of the Board of Directors are held to monitor the operational and overall performance of Invest India.

The Books of Accounts of the company are examined and audited by Statutory Auditors appointed in each Annual General meeting by the Board of Directors and Shareholders as per the Company Act. In addition, audits are also conducted by the Government. No financial irregularity has been detected.

The sector-wise and financial year wise details of FDI equity inflow reported since April, 2014 to March 2019 are given below:

STATEMENT ON FINANCIAL YEAR WISE FDI EQUITY INFLOWS FROM APRIL 2014 TO MARCH 2019

S. 2014-15 2015-16 2016-17 2017-18 2018-19 Sector Total No. crackIAS.comApr-Mar Apr-Mar Apr-Mar Apr-Mar Apr-Mar FDI FDI FDI FDI FDI in US$ in US$ in US$ in US$ in US$ million million million million million METALLURGICAL 1 359.34 456.31 1,440.18 371.76 598.84 3,226.43 INDUSTRIES 2 MINING 684.39 520.67 55.75 36.41 223.58 1,520.81 3 POWER 707.04 868.80 1,112.98 1,621.00 1,105.64 5,415.47

4 NON-CONVENTIONAL 615.95 776.51 783.57 1,204.46 1,446.16 4,826.66 ENERGY PETROLEUM & NATURAL 5 1,079.02 103.02 180.40 24.18 138.43 1,525.06 GAS BOILERS AND STEAM 6 1.33 77.91 53.91 68.13 0.01 201.29 GENERATING PLANTS PRIME MOVER (OTHER 7 THAN ELECTRICAL 230.70 159.13 286.88 159.06 244.92 1,080.68 GENERATORS) 8 ELECTRICAL EQUIPMENTS 574.83 444.88 2,230.69 488.72 976.50 4,715.63 COMPUTER SOFTWARE & 9 2,296.04 5,904.36 3,651.71 6,153.20 6,415.21 24,420.52 HARDWARE 10 ELECTRONICS 96.84 208.39 83.97 196.87 451.88 1,037.95 11 TELECOMMUNICATIONS 2,894.94 1,324.40 5,563.69 6,211.84 2,667.91 18,662.78 INFORMATION & 12 BROADCASTING 254.96 1,009.34 1,516.68 638.67 1,252.36 4,672.01 (INCLUDING PRINT MEDIA) 13 AUTOMOBILE INDUSTRY 2,725.64 2,526.82 1,609.32 2,089.53 2,623.22 11,574.52 AIR TRANSPORT 14 74.56 361.25 83.40 628.53 190.64 1,338.37 (INCLUDING AIR FREIGHT) 15 SEA TRANSPORT 333.22 429.30 735.06 1,051.49 279.25 2,828.31 16 PORTS 1.90 0.00 0.00 0.00 0.00 1.90 RAILWAY RELATED 17 129.73 73.99 87.57 98.54 72.19 462.02 COMPONENTS 18 INDUSTRIAL MACHINERY 716.79 568.26 329.30 462.82 338.18 2,415.35 19 MACHINE TOOLS 24.06 126.38 23.89 45.16 44.93 264.42 AGRICULTURAL 20 72.35 16.44 15.19 17.20 5.78 126.96 MACHINERY EARTH-MOVING 21 30.11 97.66 52.23 29.18 34.16 243.33 MACHINERY MISCELLANEOUS 22 MECHANICAL & 186.69 274.57 245.24 106.42 162.67 975.59 ENGINEERING INDUSTRIES COMMERCIAL, OFFICE & 23 33.39 36.68 7.44 20.97 11.78 110.27 HOUSEHOLD EQUIPMENTS MEDICAL AND SURGICAL 24 145.93 173.26 479.71 87.23 156.72 1,042.85 APPLIANCES 25 INDUSTRIAL INSTRUMENTS 0.85 7.42 0.80 2.28 1.62 12.97 26 crackIAS.comSCIENTIFIC INSTRUMENTS 32.34 6.36 76.66 5.53 3.15 124.05 27 FERTILIZERS 225.32 20.93 0.89 26.68 86.73 360.54 CHEMICALS (OTHER THAN 28 762.76 1,469.95 1,392.80 1,307.90 1,980.99 6,914.40 FERTILIZERS) PHOTOGRAPHIC RAW FILM 29 0.75 0.00 0.00 0.00 0.00 0.75 AND PAPER 30 DYE-STUFFS 54.89 3.32 10.70 0.00 1.52 70.43 DRUGS & 31 1,497.74 754.26 857.39 1,009.96 265.97 4,385.32 PHARMACEUTICALS 32 TEXTILES (INCLUDING 197.42 230.13 618.95 454.45 198.14 1,699.09 DYED,PRINTED) PAPER AND PULP 33 (INCLUDING PAPER 116.21 85.21 197.61 71.17 38.00 508.21 PRODUCTS) 34 SUGAR 27.77 105.85 15.92 7.90 1.10 158.54 FERMENTATION 35 225.38 202.36 110.86 38.48 149.49 726.57 INDUSTRIES FOOD PROCESSING 36 515.86 505.88 727.22 904.90 628.24 3,282.10 INDUSTRIES VEGETABLE OILS AND 37 148.34 34.22 108.45 85.12 116.22 492.35 VANASPATI SOAPS, COSMETICS & 38 177.22 193.26 92.60 137.03 154.09 754.20 TOILET PREPARATIONS 39 RUBBER GOODS 284.51 296.15 262.76 392.21 197.64 1,433.27 LEATHER,LEATHER GOODS 40 34.21 17.13 2.30 22.00 4.52 80.16 AND PICKERS 41 GLUE AND GELATIN 21.44 0.82 90.60 3.76 13.29 129.91 42 GLASS 41.82 25.78 51.69 70.92 35.59 225.80 43 CERAMICS 35.29 51.21 15.40 50.12 58.09 210.11 CEMENT AND GYPSUM 44 208.99 19.69 2,130.10 19.44 17.61 2,395.83 PRODUCTS 45 TIMBER PRODUCTS 8.97 53.17 10.23 9.91 7.75 90.03 46 DEFENCE INDUSTRIES 0.08 0.10 0.00 0.01 2.18 2.37 47 CONSULTANCY SERVICES 458.13 517.47 261.14 759.67 410.61 2,407.02 SERVICES SECTOR (Fin.,Banking,Insurance,Non 48 Fin/Business,Outsourcing,R&D 3,250.03 6,889.46 8,684.07 6,708.58 9,157.54 34,689.68 ,Courier,Tech. Testing and Analysis, Other) HOSPITAL & DIAGNOSTIC 49 567.85 742.35 747.38 708.09 1,044.61 3,810.29 CENTRES 50 EDUCATION 78.86 230.78 160.12 285.75 776.73 1,532.23 51 HOTEL & TOURISM 777.01 1,332.69 916.13 1,131.97 1,075.75 5,233.55 52 TRADING 2,727.96 3,845.32 2,338.40 4,348.13 4,462.13 17,721.93 53 RETAIL TRADING 168.72 262.24 450.94 223.78 442.83 1,548.51 54 AGRICULTURE SERVICES 59.95 84.65 76.43 110.19 88.07 419.29 DIAMOND,GOLD 55 280.18 58.54 123.92 233.03 29.15 724.82 crackIAS.comORNAMENTS TEA AND COFFEE (PROCESSING & 56 1.43 1.12 1.60 20.02 13.64 37.81 WAREHOUSING COFFEE & RUBBER) PRINTING OF BOOKS 57 (INCLUDING LITHO 72.58 122.81 53.17 228.40 549.80 1,026.75 PRINTING INDUSTRY) 58 COIR 1.36 0.00 0.00 0.00 0.00 1.36

59 CONSTRUCTION 870.25 4,510.71 1,860.73 2,729.69 2,258.00 12,229.38 (INFRASTRUCTURE) ACTIVITIES CONSTRUCTION DEVELOPMENT: Townships, 60 housing, built-up infrastructure 769.14 112.55 105.14 539.57 213.15 1,739.55 and construction-development projects MISCELLANEOUS 61 765.88 668.77 296.40 398.76 441.16 2,570.96 INDUSTRIES Grand Total 29,737.27 40,000.98 43,478.27 44,856.75 44,366.03 202,439.31

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-04 PROMOTION OF INNOVATION Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Commerce & Industry Promotion of Innovation

Posted On: 03 JUL 2019 5:03PM by PIB Delhi

Various Government Ministries/Departments viz. Ministry of Human Resource Development (MHRD), Department of Science and Technology (DST), Department of Bio-technology (DBT), NITI Aayog and Ministry of Electronics and Information Technology (MeitY) have launched schemes for promotion of innovation. The details of such schemes are:

1. Department of Science & Technology has launched a NIDHI program (National Initiative for Developing and Harnessing Innovations) under which programmes for setting up of incubators, seed fund, accelerators and 'Proof of concept' grant for innovators and entrepreneurs have been launched. Under NIDHI, PRAYAS (Promoting and Accelerating Young and Aspiring innovators & Startups) programme has been initiated in which established Technology Business Incubators (TBI) are supported with PRAYAS grant to support innovators and entrepreneurs with grants for ‘Proof of Concept’ and developing prototypes. A maximum grant of Rs. 220 lakh is given to a TBI for establishing a PRAYAS Centre which includes Rs.100 lakh for PRAYAS SHALA, Rs. 20 lakh for operational cost of PRAYAS Centre and maximum of Rs. 10 lakh to one innovator for developing prototype. Funding for ten innovators is given to the TBI in a year.

1. To boost entrepreneurial spirit in India, the Atal Innovation Mission (AIM), a flagship initiative of NITI Aayog, is supporting two programs for setting up and scaling up of incubation centres. The Atal Incubation Centres (AICs) scheme supports setting up of green field incubation centres that nurture innovative start-up businesses in their pursuit to become scalable and sustainable enterprises. The Established Incubation Centres scheme provides scale-up support to well performing existing incubation centres, referred to as Established Incubation Centers (EICs), where AIM intends to further augment their performance by providing them scale-up support. In both of these schemes, AIM is crackIAS.comproviding grants of upto INR 10 Crores over a period of 3-5 years.

● Ministry of Electronics & Information Technology (MeitY), Government of India has taken various initiatives and measures to encourage entrepreneurs to develop indigenous products in Information and Communications Technology (ICT) domain and also improve innovation-led ecosystem with scheme and programmes to support researchers, start-ups and MSMEs. Technology Incubation and Development of Entrepreneurs (TIDE) Scheme was put in place by MeitY in 2008 to promote innovation by nurturing startups in Information Technology, Communications & Electronics (ICTE) domain. Under the TIDE Scheme, financial assistance is provided to Institutions of Higher Learning to strengthen their Technology Incubation Centres for enabling young entrepreneurs to create technology startup companies for commercial exploitation of technologies developed by them. Enhanced version Technology Incubation and Development of Entrepreneurs (TIDE 2.0) Scheme is to promote tech entrepreneurship through financial and technical support to incubators engaged in supporting ICT startups using emerging technologies such as Internet of Things (IoT), Artificial Intelligence (AI), Block-chain, Robotics etc.

1. Biotechnology Industry Research Assistance Council (BIRAC), A Public Sector Undertaking of Department of Biotechnology (DBT) has been promoting incubators in biotechnology sector for innovative idea through the following programmes:

1. i) BIRAC BioNEST (BIRAC Bio-incubation: Nurturing Entrepreneurs for Scaling up Technology): BIRAC’s Flagship programme which creates / supports world-class bio- incubators for startups/ entrepreneurs to provide incubation space, mentor networks, instrumentation facilities, IP and technology management support.

1. ii) SEED(Sustaining Enterprise and Entrepreneurship Development) Fund: Equity basedfunding support of up to Rs. 30 Lakh to startups and enterprises through bio- incubators for scaling up.

● iii) LEAP (Launching Entrepreneurial Driven Affordable Products Fund for Start-ups) Fund: Equity based funding support of up to Rs 1 Cr to startups and enterprises implemented through Incubators for scaling enterprises.

1. Ministry of Human Resource Development is setting up Incubation centers/Research Parks in the institutions of higher learning independently or in conjunction with DBT and DST. Further, DST and MHRD have jointly taken up initiative for establishment of Research Parks, Technology Business Incubators and Startup Centres. The objective of setting up Research Parks is to propel successful innovation through incubation and joint Research and Development (R&D) efforts between academia and industry. Further, through Ucchatar Avishkar Yojana(UAY) Government aims to make students more accustomed with the outer world and give them market-oriented mind set. No specific proposal to invite foreign investments to promote innovation in the country is under consideration of Department of Industrial Policy and Promotion. However, Government has put in place an investor- friendly policy, wherein except for a small negative list, most sectors are open crackIAS.comfor 100% FDI under the Automatic route including innovation / R&D, subject to applicable laws/ regulations; security and other conditionalities.

Further, to attract foreign investments in the country, and showcase its diverse market and transformative technology innovations to the Investors across the world, DPIIT organized the Startup India Global Venture Capital Summit on 6th and 7th December 2018, bringing together over 250 participants from over 20 countries across the globe. The dialogue focused on the huge return-generating potential of India’s vast and diverse market monetized through cutting- edge technologies supported by investor-friendly regulations. Multiple sessions and Roundtables were organized for foreign investors with the concerned government stakeholders to understand and solve for the regulatory and policy challenges faced for investments in India.

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-04 IMPACT OF START UP INDIA Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Commerce & Industry Impact of Start up India

Posted On: 03 JUL 2019 5:02PM by PIB Delhi

A formal mechanism has been put in place in form of Monitoring Committee to review progress of Startup India programme on regular basis. The Monitoring Committee comprises representative from Department for Promotion of Industry and Internal Trade (DPIIT), NITI Aayog, Department of Revenue (Ministry of Finance), Ministry of Micro, Small and Medium Enterprises, Department of Science and Technology (Ministry of Science and Technology), Department of Bio-Technology (Ministry of Science and Technology), Ministry of Electronics and Information Technology, Department of Higher Education (Ministry of Human Resources Development) and Small Industries Development Board of India (SIDBI). The Monitoring Committee continuously reviews progress & implementation of various measures for growth of startup ecosystem.

In order to meet the objectives of the Startup India initiative commenced on 16th January 2016, Government of India announced Action Plan containing 19 Action Points. The progress made with respect to each Action Point is given below:

S.No. Item Simplification and Progress Handholding Compliance Regime Startups recognised under Startup India 1. 1. based on Self- initiative can self-certify their compliance certification against 6 labour and 3 environment laws

● Dedicated team setup under Invest India (not for profit facilitation arm of the crackIAS.comMinistry of Commerce and Industry) ● 1,38,170 queries addressed by the Startup India team

2. Startup India Hub ● One-on-One Facilitation: The Startup India Team has been able to facilitate 682 cases till 31st May, 2019

● Engaged with 100+ Venture Capitalist and angel networks having deal flow arrangement with most of them

● Mapped out 177 incubators, 360 mentors and 71 accelerators

● Deal flow arrangement with banks including Union Bank, Yes Bank, Axis Bank, etc.

● 3,18,506 users registered on the Startup India Portal

● 19,247 Startups recognized by Department for Promotion of Industry and Internal Trade (DPIIT)

● 9 International bridges established to established market opportunities for Startups in the respective countries Rolling out of Mobile ● 2,39,136 aspiring and existing 3. App and Portal entrepreneurs registered for the course

● 3,157 mentor, investor and incubator connections established through the portal for Startups

● 123,000+ monthly visits on the portal

● 112 Innovation Hunts and programs hosted on the Startup India portal by various government departments and corporates. Total of 8,159 applications received through these programs. ■ Startups are eligible for 80% rebate in patent filing fees and 50% rebate in trademark filing fees. Additionally, Startups will also be considered for expedited examination of patent applications to reduce time taken in granting patents. Legal Support and ■ 425 Patent facilitators and 606 Fast-tracking Patent 4. crackIAS.comExamination at Lower Trademark facilitators have been Costs empanelled under this scheme to provide free-of-charge services to Startups.

● 1496 patent applications have been granted 80% rebate on filing fee.

● 2761 trademark applications have been granted 50% rebate on fill fee.

● 389 applications were granted expedited examination and 103 patents were granted.

● Public procurement norms relaxed for startups through exemptions on (November 2016) Prior turnover criteria; andPrior experience criteria Applicable on all tenders issued by Central Ministries and Central Public Relaxed Norms of Service Undertakings (CPSUs) 5. Public Procurement for ● Startups exempt from submitting Earnest Startups Money Deposit requirements (July 2017) ● GeM Startup Runway launched – dedicated corner for startups to sell products & services to Government (February 2019) 1,862 Startups registered7,697 procurement orders worth Rs. 275 Crore received

● MCA has notified Startups as “Fast track firms”

6. Faster Exit for Startups ● Enabling them to wind up operations within 90 days vis-a-vis 180 days for other companies Funding Support and

Incentives

● Twice of Govt. contribution received by venture funds is invested into DPIIT recognised startups

● Small Industries Development Bank of Providing Funding India (SIDBI) has committed Rs. 3123.20 Support through a crore to 49 SEBI registered Alternative 7. Fund of Funds with a Investment Funds (AIFs). These funds Corpus of Rs. 10,000 have raised a corpus fund of Rs. 27,478 crore crore. crackIAS.com● Rs. 483.46 core have been drawn from the SIDBI Fund of Funds

● Rs. 1625.73 crore have been invested into 247 startups. The earlier Cabinet Note on Credit Guarantee Credit Guarantee Scheme for Startups has been withdrawn and Fund for Startups the Department is under process of re-drafting the cabinet note keeping in view the suggestions of SIDBI. Section 54EE and 54 GB have been inserted Tax Exemption on 9. in the Income-tax Act, 1961 to provide Capital Gains exemption from capital gains tax. Tax Exemption to 149 start-ups have been benefited under this 10. Startups for 3 years incentive Tax Exemption on 689 startups have been benefitted under 11 Investments above Fair this incentive Market Value Industry-Academia

Partnership and Incubation The Department is planning to organize Organizing Startup Global Startup Conclave 2020 in February, Fests for Showcasing 2020 which will be a 4 days mega global 12. Innovation and event like SLUSH, CES, Web Summit with an Providing a aim to position India as the next startup Collaboration Platform destination.

● 8,878 Schools selected for setting up Atal Tinkering Labs Rs. 20 Lakhs will be given to each school over 5 years.Rs. 12 Lakhs Launch of Atal / school disbursed to 3,020 schools Innovation Mission ● 102 Incubation Centres selected Rs. 10 (AIM) with Self- crore to be given to each centre over 5 13. Employment and years.Rs. 57.68 crore disbursed to 31 Talent Utilization New Incubation CentresRs. 38.91 crore (SETU) Program disbursed to 8 Established Incubation Centres

● 24 Atal New India Challenges conducted 951 applications received; 54 shortlisted Atal Innovation Mission 102 Incubation Centres selected

● Rs. 10 crore to be given to each centre over 5 years. Harnessing Private crackIAS.com● Rs. 57.68 crore disbursed to 31 New 14. Sector Expertise for Incubation Centres Incubator Setup ● Rs. 38.91 crore disbursed to 8 Established Incubation Centres 24 Atal New India Challenges conducted

● 951 applications received; 54 shortlisted Building Innovation DST 15. Centres at National ● Rs. 18.69 Crore disbursed to 11 Incubators

● 15 Startup Centres have been approved; 10 centres received a grant of Rs. 3.75 Lakh DBT

● Rs. 195.90 Crore disbursed as a grant-in- aid to 4 bio-clusters

Institutes ● Rs. 174.26 Crore disbursed to 41 Bio- incubators through BioNEST

● Rs. 6.23 Crore has been disbursed to 4 BIRAC Regional Centres

● Rs. 150 Crore fund setup as a Fund of Funds to Bio-incubators

● Rs. 8.5 Crore disbursed to 13 Bio- incubators (BIRAC SEED FUND) 8 Universities have been selected for setting up Research Parks identified with total sanction amount of Rs. 680 Crore Rs. 233 Crore has been disbursed to following Research Parks Setting up of 7 New Research Parks ● IIT Delhi 16. Modeled on the ● IIT Kanpur Research Park Setup ● IIT Gandhinagar at IIT Madras ● IIT Mumbai

● IIT Guwahati

● IIT Kharagpur

● IIT Hyderabad

● IISc Bangalore DBT

● Rs. 195.90 Crore disbursed as a grant-in- aid to 4 bio-clusters Promoting Startups ● Rs. 174.26 Crore disbursed to 41 Bio- in the incubators through BioNEST

17. Biotechnology ● Rs. 6.23 Crore has been disbursed to 4 crackIAS.comSector BIRAC Regional Centres

● Rs. 150 Crore fund setup as a Fund of Funds to Bio-incubators Rs. 8.5 Crore disbursed to 13 Bio-incubators (BIRAC SEED FUND) Launching of NIDHI (National Initiative for Developing and 18. Innovation Focused Harnessing Innovations) Programs for ● Grand challenge conducted to promote entrepreneurship amongst student community

● 224 Applications received; out of 30 finalists selected, 12 student run teams awarded Rs. 10 Lakh each

Uchchatar Avishkar Yojana Students ● 148 projects sanctioned in Uchchatar Avishkar Yojna

● Rs. 220.75 Crore released under the UAY scheme MANAK (Million Minds Augmenting National Aspiration and knowledge)

● Rs. 10,000 granted to 1,03,497 students in the last 3 years under the MANAK Scheme Annual Incubator This activity is being coordinated by NITI 19. Grand Challenge Aayog

crackIAS.com

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-04 SAFEGUARDING THE INTELLECTUAL PROPERTY RIGHTS Relevant for: Indian Economy | Topic: Issues relating to Intellectual Property Rights (IPRs)

Ministry of Commerce & Industry Safeguarding the Intellectual Property Rights

Posted On: 03 JUL 2019 5:01PM by PIB Delhi

The Government has taken several steps that have led to an improvement in patent filing, as also for safeguarding the Intellectual Property Rights (IPR). Some of these steps, inter alia, are:

● National IPR Policy for India was adopted by the Government of India on 12th May, 2016, as a vision document that lays the future roadmap of IPRs in India. The Cell for IPR Promotion and Management (CIPAM) has been set up to coordinate the implementation of the National IPR Policy. ● IP awareness programmes have been undertaken in academic institutions, at both school and college level, as also for industry. ● To streamline the processing of IP applications, IP procedures have been simplified and made user friendly by amendment to the Patents Rules in 2016 and Trademarks Rules in 2017. ● Since 2014-15, the manpower has been augmented both in the Patent office and Trademarks registry which has resulted in major impact on pendency of IP applications. In the year 2018-19, 15284 patents were granted, as against 5978 in the year 2014-15. In the same period, the number of trademarks registered in a year has also gone up from 41583 to 316798. Domestic filing of patent applications has increased from 12,071 in 2014-15 to 17,163 in 2018-19, showing a 42% increase.

The Government has taken following steps, inter alia, to enable and assist startups for filing of patents:

● Under the amended Patents Rules, 80% patent fee reduction has been provided for Startups as compared to large companies. ● Under the Scheme for Facilitating Startups Intellectual Property Protection (SIPP), 208 Patent Agents have been empanelled as facilitators by the Controller General of Patents, Trademarks and Designs, to provide assistance to Startups in the preparation and filing of theircrackIAS.com patent applications and, subsequently, during the stage of prosecution of applications before the Patent Office. Fees of the facilitators are paid by the Government as per the norms of the scheme. ● Startups are also eligible for getting the processing of their patent applications expedited. As on 31st May 2019, 1719 Startups have availed the benefit of 80% fee rebate. Further, 512 Startups filed for expedited examination of their patent application, of which 453 have been examined, and 151 patents already granted.

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Lok Sabha today. ***

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-04 STATUS OF TECHNOLOGY HUBS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Commerce & Industry Status of Technology Hubs

Posted On: 03 JUL 2019 5:00PM by PIB Delhi

Currently, 59 Software Technology Parks of India (STPI) Centres are operational across the country out of which 51 Centres are in Tier-II/ III locations. Further, 24 new STPI Centres have been approved by the Governing Council of STPI which are at various stages of implementation. (Annexure 1)

Technology Development Programmes (TDP): Department of Science and Technology has been implementing Technology Development Programmes (TDP) to facilitate conversion of proof-of-concepts for technologies/ techniques/ processes/products into advance prototypes for validation and demonstration in field settings. The main objectives of the program include:

• Support R&D for development of innovative technologies in identified areas.

• Promote application of advanced technology for improving the performance and value addition to existing technology.

• Capacity building in the area of technology development in terms of human resource and infra-structure.

The sub schemes of TDP are:

• Advanced Manufacturing Technologies (AMT) aligning to Make in India

• Biomedical Device and Technology Development Program (BDTD) aligning to Swasth Bharat

• Device Development Program (DDP) aligning to Make in India

• Science and Heritage Research Initiative (SHRI) crackIAS.com• Technology Development Program (TDP) aligning to Make in India

• Technology Mission for Indian Railways (TMIR) aligning to Make in India

• Waste Management Technologies (WMT) aligning to Swachh Bharat and Smart City

The US firm KPMG has released a report based on 750 industry representatives including startup entrepreneurs and FORTUNE 500 executives titled ‘The Changing Landscape of Disruptive Technologies’. The Report ranks India in third place, as 13 percent of the respondents indicated India’s potential for technology breakthroughs.

No such assessment is made by the Government and no data of FDI is maintained based on Industrial Estates or on geographical location other than States.

During the period 2014-2019 FDI Inflow of USD 286.28 billion (provisional) have been reported in the country.

ANNEXURE 1

List of existing STPI Centres

S.N State Centre Name City type 1 Kakinada Tier II/III 2 Tirupati Tier II/III Andhra Pradesh 3 Vijayawada Tier II/III 4 Vizag Tier II/III 5 Assam Guwahati Tier II/III 6 Bihar Patna Tier II/III 7 Chhattisgarh Bhilai Tier II/III 8 Goa Goa Tier II/III 9 Gandhinagar Tier II/III Gujarat 10 Surat Tier II/III 11 Haryana Gurgaon Tier I 12 Himachal Pradesh Shimla Tier II/III 13 Jammu Tier II/III Jammu and Kashmir 14 Srinagar Tier II/III 15 Ranchi Tier II/III Jharkhand 16 Deoghar Tier II/III 17 Karnataka Bengaluru Tier I 18 Hubli Tier II/III 19 Mangalore Tier II/III

20 Manipal Tier II/III 21 Mysore Tier II/III 22 Kerala Thiruvananthapuram Tier II/III 23 Gwalior Tier II/III Madhya Pradesh 24 Indore Tier II/III 25 Aurangabad Tier II/III 26 Kolhapur Tier II/III 27 Nagpur Tier II/III Maharashtra 28crackIAS.comNasik Tier II/III 29 Mumbai Tier I 30 Pune Tier I 31 Manipur Imphal Tier II/III 32 Meghalaya Shillong Tier II/III 33 Mizoram Aizawl Tier II/III 34 Berhampur Tier II/III 35 Odisha Bhubaneswar Tier II/III 36 Rourkela Tier II/III 37 Pondicherry Pondicherry Tier II/III 38 Punjab Mohali Tier II/III 39 Jaipur Tier II/III Rajasthan 40 Jodhour Tier II/III 41 Sikkim Gangtok Tier II/III 42 Chennai Tier I Tamil Nadu 43 Coimbatore Tier II/III

44 Madurai Tier II/III

45 Tirunelveli Tier II/III

46 Trichy Tier II/III 47 Hyderabad Tier I Telangana 48 Warangal Tier II/III 49 Allahabad Tier II/III 50 Kanpur Tier II/III Uttar Pradesh 51 Lucknow Tier II/III 52 Noida Tier I 53 Uttarakhand Dehradun Tier II/III 54 Durgapur Tier II/III 55 Haldia Tier II/III 56 West Bengal Kharagpur Tier II/III 57 Kolkata Tier I 58 Siliguri Tier II/III 59 Tripura Agartala Tier II/III

List of upcoming STPI Centres

S.N State Centre Name City Type 1 Arunachal Pradesh Itanagar Tier II/III 2 Bhagalpur Tier II/III Bihar 3 Darbhanga Tier II/III 4 Bokaro Tier II/III 5 Jharkhand Dhanbad Tier II/III 6 Jamshedpur Tier II/III 7 Bhopal Tier II/III 8 Madhya Pradesh Chhindwada Tier II/III 9 Jabalpur Tier II/III 10 Nagaland Kohima-Dimapur Tier II/III 11 Angul Tier II/III 12 Balasore Tier II/III 13 Odisha Jajpur Tier II/III 14 Koraput (Jeypore) Tier II/III 15crackIAS.comSambalpur Tier II/III 16 Punjab Amritsar Tier II/III 17 Karnataka Davangere Tier II/III 18 Agra Tier II/III 19 Gorakhpur Tier II/III Uttar Pradesh 20 Meerut Tier II/III 21 Varanasi Tier II/III 22 Haryana Panchkula Tier II/III 23 Gujarat Bhavnagar Tier II/III 24 Himachal Pradesh Kangra Tier II/III

This information was given by the Minister of Commerce and Industry, PiyushGoyal, in a written reply in the Lok Sabha today.

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crackIAS.com Source : www.hindustantimes.com Date : 2019-07-05 BECOMING A $5-TRILLION ECONOMY Relevant for: Indian Economy | Topic: Issues relating to Planning & Economic Reforms

The Economic Survey for 2018-19 will probably be remembered for its insights on how India can become a $5-trillion economy, an articulated objective of the prime minister. Analysing the progress of several East and South East Asian nations, it makes a case for a growth model built around investment and exports with private investment being catalysed by conducive foreign investment rules, political stability, and an efficient judiciary. There is little to quibble about here, although reviving the investment cycle through public investment seems easier (and also more pragmatic). While foreign investors will no doubt be drawn to India’s large market (as long as policies are conducive), large Indian companies, their balance sheets loaded with debt, have been in no position to invest over the past few years (and the situation will likely continue for a few more).

ALSO WATCH | Mint Budget Round-Table: How Modi govt can achieve $5 trillion economy aim

Within this larger formula prescribed by the Economic Survey, three subsidiary strands stand out – simply for their acuity in understanding some uniquely Indian problems. The first is the Survey’s understanding that part of India’s problem is a huge number of sub-scale enterprises (or dwarfs as it calls them). Sub-scale companies typically have low productivity and quality; nor do they create jobs. The second is the Survey’s recommendation for a national floor for the minimum wage, something that would immediately improve the lot of almost a third of India’s working population which, according to the survey, does not earn this now. The new wage code cleared by the Union Cabinet will do this – but it has to be cleared by Parliament. The third is the Survey’s focus on behavioural economics when it comes to public policy – India has been a zealous adopter of technology in governance, but it is the understanding of the underlying behavioural aspects of change – getting people to use toilets as opposed to just building them, for instance – that can have a greater impact.

Yet another Economic Survey has put forth some interesting and radical ideas. It is time the Union Budget and other policies started reflecting some of these.

First Published: Jul 04, 2019 19:49 IST

END Downloaded from crackIAS.com crackIAS.com© Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-05 ELECTRICITY GENERATION THROUGH ATOMIC ENERGY Relevant for: Indian Economy | Topic: Infrastructure: Energy incl. Renewable & Non-renewable

Department of Atomic Energy Electricity generation through atomic energy

Posted On: 04 JUL 2019 5:05PM by PIB Delhi

The share of atomic energy in the overall electricity generation in the country was about 2.93% in the year 2017-18.

Nuclear share has remained around 3% of the total electricity generation in the country. The main reason for low share has been the low installed capacity base. The reasons for low capacity base are:

1. Technology development and international embargo regime that persisted from 1974 to 2008. As a result, all the technologies for nuclear power including the fuel cycle technologies had to be developed within the country, thus took time.Another constraint faced during the first two decades was availability of financial resources, as it had to solely depend on budgetary support. However, the earlier constraints have now been overcome and nuclear power programme is poised for rapid expansion.

To increase the share of nuclear power generation, the Government has taken several steps to increase the nuclear power capacity and to provide adequate quantity of fuel. These include:

i. Resolution of issues related to Civil Liability for Nuclear Damage (CLND) Act & Creation of Indian Nuclear Insurance Pool (INIP). crackIAS.com

ii. Accord of administrative approval and financial sanction of - ten (10) indigenous 700 MW Pressurized Heavy Water Reactors (PHWRs) to be set up in fleet mode & two (02) units of Light Water Reactors (LWRs) to be set up in cooperation with Russian Federation.

iii. Amendment of the Atomic Energy Act to enable Joint Ventures of Public Sector Companies to set up nuclear power projects.

iv. Entering into enabling agreements with foreign countries for nuclear power cooperation including supply of fuel.

This information was provided by the Union Minister of State (Independent Charge) Development of North-Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances & Pensions, Atomic Energy and Space, Dr Jitendra Singh in written reply to a question in Rajya Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-05 NUCLEAR PLANT EXPANSION PROGRAMME Relevant for: Indian Economy | Topic: Infrastructure: Energy incl. Renewable & Non-renewable

Department of Atomic Energy Nuclear Plant Expansion Programme

Posted On: 04 JUL 2019 5:04PM by PIB Delhi

Finance Minister’s budget speech in Lok Sabha on 29.02.2016 for 2016-17 budget included the following reference to nuclear energy:

“In the power sector, we need to diversify the sources of power generation for long term stability. Government is drawing up a comprehensive plan, spanning next 15 to 20 years, to augment the investment in nuclear power generation. Budgetary allocation up to Rs 3,000 crore per annum, together with public sector investments, will be leveraged to facilitate the required investment for this purpose.”

To meet the large equity requirements involved in implementation of the planned nuclear power expansion programme, formation of Joint Ventures (JV) of Nuclear Power Corporation of India Limited (NPCIL) with other PSUs was contemplated. In this context, NPCIL entered into Joint Ventures (JV) with Public Sector Undertakings NTPC Limited, Indian Oil Corporation Limited and National Aluminium Company Limited (NALCO). The Government also brought an Amendment of the Atomic Energy Act to enable Joint Ventures of Public Sector Companies to set up nuclear power projects.

The equity funding of the projects presently under construction and projects whose administrative approval and financial sanction is available, have been tied up.

crackIAS.com***** BB/NK/PJ

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crackIAS.com Source : www.indianexpress.com Date : 2019-07-05 THE GROWTH DRIVER Relevant for: Indian Economy | Topic: Issues relating to Planning & Economic Reforms

For an economy in slowdown mode, the key to reviving the growth momentum is private investment, which is a function of the “animal spirits” of entrepreneurs. One must give credit to the Finance Ministry’s Economic Survey, unveiled a day before the presentation of the Narendra Modi government’s first Union Budget in its second innings, for recognising this basic truth. Although it does not explicitly admit it, the Indian economy is, indeed, today caught in a vicious cycle of investments not happening on the ground, jobs drying up and, in turn, impacting income and consumption. This is the opposite of what happens in a virtuous cycle, where “investment, productivity growth, job creation, demand and exports feed into each other and enable animal spirits in the economy to thrive”. The Survey is right that the macroeconomic stability indicators — whether pertaining to inflation, external current account or even fiscal balances — are much better than they were five years ago and it is time to “shift gears” to enable an average annual real GDP growth of 8 per cent for India to become a $5 trillion economy by 2024-25. But the key driver for it is investment — more specifically, private investment.

But how does one get firms to invest, which is ultimately a forward-looking activity? It basically requires the upfront costs of a project to be less than the present value of the expected rewards from the investment. The Survey has pointed out — which may not be in sync with the Reserve Bank of India’s views, at least till recently — that real rates of interest in India have increased significantly over the years and are high even on cross-country comparison. There is, therefore, need to lower the cost of capital. Further, it has argued that the country only needs a “mildly positive real rate”, which will not necessarily lead to lower savings. Savings are driven primarily by demographics and income growth: Both of these are favourable for India, given a rising proportion of its working population that will both earn more and save more.

There are other useful suggestions by the Survey that may be worth considering. The first is a redesign of tax policy, including for start-ups. High tax rates on corporate profits and notices received by new economy companies on angel funding from venture capital investors are certainly not a good idea. They need a complete review, especially in the current context where animal spirits are low. Reviving those spirits will present the biggest and most immediate challenge for the Modi government as it begins its second term.

Download the Indian Express apps for iPhone, iPad or Android © 2019crackIAS.com The Indian Express Ltd. All Rights Reserved END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.thehindu.com Date : 2019-07-05 ‘FDI NEEDED TO SPUR THE VIRTUOUS CYCLE IN INDIA’ Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Foreign Capital, Foreign Trade & BOP

Foreign investment in India is needed to spur the domestic private investment cycle, says Chief Economic Adviser (CEA) Krishnamurthy Subramanian. Excerpts from a Q&A session:

Could you elaborate on what you mean about treating data as a public good?

Let me start with an example. Imagine a woman in a village accessing on her smart phone all the hospitals that are there in her vicinity. Not only can she access the hospitals but she can click on a particular hospital and get the quality of emergency care, let’s say, of that hospital. And suppose, she can get this in the local language. Now, if someone falls ill in her village, she knows very well where to go. This is an example of ease of living that can be generated by bringing in data.

That is possible today and it can’t happen without viewing data as a public good. While you have companies like Amazon, Google, etc. which utilise data, they do it in a particular area. They will only do it where there is profit, they are private entities.

Much like the government invests in public goods such as roads, ports, etc., these [data for public use] are areas where the private sector will not make investments. It can reduce inclusion and exclusion errors as well via Aadhaar.

That’s the basic idea. And it can be created within the framework of the privacy laws in the country because we have the necessary technologies to do that.

The main plank of your Survey is that investment will drive all the other factors of the economy such as growth and job creation. Where will this investment come from?

When we were writing this chapter, we had the choice of going into each of these details or focussing on the big picture message, which is what we need to do to get on that 8% growth path.

These are questions to which we have the answers, but we wanted to keep the Survey focussed.

I think some of the overhang from the previous period has unwound completely. Second, banks have crackIAS.comcleaned up their balance sheets and credit to large firms has started going up. Third, which I think is a very important opportunity that we have not tapped enough, is that if you look at the global environment in terms of liquidity and the surplus and the interest rate environment that has been prevailing, it is as benign as it ever was. There is a lot of flush liquidity that is looking for avenues for investment.

If you have an economy that is going to grow at 8% growth rates, this money finds it profitable to be invested there.

In order to trigger this virtuous cycle, we have to rely on some of these foreign savings. They can come in and start investment, and once this happens, that will enhance productivity, which creates jobs, fosters exports and thereby, demand.

In the Survey, you have missed out on focussing on the banking sector or the problems affecting the NBFC sector. Why is that?

As I articulated, we wanted to focus on the big picture. We will be writing another Survey in six months, that will be presented on January 30. So, we had to make a choice. One thing we knew very well when we started working on the Survey is that this will be the Survey of a new government and therefore, a government that potentially has five years to implement policies.

Banks have cleaned up their balance sheets and credit to large firms has started going up

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crackIAS.comEND Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.thehindu.com Date : 2019-07-05 ‘AADHAAR AIDED MGNREGS BENEFICIARIES’ Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

Refuting criticism of Aadhaar-linked payments and the direct benefit transfer system, the Economic Survey 2018-19 has used the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) as a case study to show the benefits of the use of technology in improving targeting and efficiency in welfare schemes, especially for the most vulnerable groups.

Going forward, the Survey recommends that digital technology and the JAM troika — Jan Dhan, Aadhaar and Mobile — be expanded to other welfare schemes. The Survey cites data on the timeliness of wage payments, worker turnout, demand and supply of work under the scheme before and after Aadhaar-linked payments (ALP) were implemented as a proof for its benefits.

Data show that in 2014-15, less than 27% of wage payments were generated within 15 days. Direct benefit transfers were introduced two years later. By 2018-19, more than 90% of wage payments were generated within 15 days. “Payment delays drive away farmers in genuine distress, while others not in distress take the benefits. A person undergoing economic distress needs immediate and certain liquidity. Working for uncertain promised wages, which are likely to be realised with a substantial lag, presents an unattractive proposition for a person in distress as delayed payments effectively imply zero wages in adverse times,” says the Survey. The Survey also compared the MGNREGS performance in blocks affected by drought versus other blocks, using drought as a proxy for distress. In drought-affected blocks, the number of persons demanding work increased more than 20% after the implementation of ALP, while there was no effect in other blocks. A similar trend is seen in the supply of work. Muster rolls, which are work site attendance registers, show a 19% increase after ALP implementation in most blocks. In drought-affected blocks, muster rolls increased by 44%.

“It appears that before the implementation of ALP, the rural poor treated MGNREGS as an option to earn additional income during good times rather than a shock absorber during bad times. This actually defeated the purpose of the programme. Post implementation of ALP, there is a reversal of trend, wherein an increase in demand for work under MGNREGS is observed in drought-affected areas,” says the Survey, arguing that effective targeting has been possible because of ALP.

The Survey suggests that going forward, “demand for work under MGNREGS may be used to develop a real-time indicator of distress at the granular district or panchayat level.” The Survey also recommends that other welfare schemes implement the lessons learnt from Aadhaar linkagescrackIAS.com in MGNREGS. Scholarships, pensions, and subsidies for food, kerosene, and gas cylinders should be next in line to implement Aadhaar-based payments, it said.

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crackIAS.com Source : www.thehindu.com Date : 2019-07-05 ‘RECOVERY UNDER IBC HIGHER AT 43%’ Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Recovery by financial creditors has seen a significant rise after the Insolvency and Bankruptcy Code (IBC) kicked in compared with the previous recovery regimes like Debt Recovery Tribunal, Lok Adalat and SARFAESI Act, the Economic Survey for 2018-19 pointed out.

Between 2007 and 2017, recovery from all those other sources was 23% while the same was 43% under the IBC between 2017-19. “These earlier mechanisms have resulted in an average recovery of 23% to lenders as against nearly 43% under the IBC,” the Survey said. The overall recovery in resolved cases is nearly Rs. 74,497 crore for the financial creditors, the Survey said.

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crackIAS.comEND Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.thehindu.com Date : 2019-07-05 NEEDED: A WELL-DESIGNED MINIMUM WAGE SYSTEM Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

A well-designed and streamlined minimum wage system is required to reduce wage inequality in the country, the Economic Survey says.

Currently, the minimum wage system, under the Minimum Wages Act, 1948, in India is complex, with 1,915 different minimum wages defined for different job categories across States, the survey said. Despite the complex system, workers were still falling through the gaps, it said.

“One in every three wage workers in India is not protected by the minimum wage law,” it said, citing the International Labour Organisation.

For instance, the survey stated, domestic workers were covered under minimum wage laws in only 18 States and Union Territories. It also pointed out that while the law did not discriminate between men and women, analysis of different wages showed a bias.

“For instance, women dominate in the category of domestic workers while men dominate in the category of security guards. While both these occupations fall within the category of unskilled workers, the minimum wage rate for domestic workers within a State is consistently lower than that for the minimum wage rates for security guards,” the survey said.

Apart from increasing the ambit of the minimum wage system, it recommended deciding minimum wages on the basis of skills and split across geographical regions. With the government in the process of bringing the Code on Wages Bill in Parliament, the survey said the rationalisation of minimum wages proposed by the Bill should be supported.

The survey suggested the government should notify a “national floor minimum wage” across five regions, after which the States can fix their own minimum wages, but not lower than the floor wage.

This, it said, would bring uniformity and make States “almost equally attractive from the point of view of labour cost for investment as well as reduce distress migration.”

The floor wage is currently non-statutory.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 UNION BUDGET PROPOSES PERMITTING 100% FOREIGN DIRECT INVESTMENT (FDI) FOR INSURANCE INTERMEDIARIES Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Foreign Capital, Foreign Trade & BOP

Ministry of Finance Union Budget proposes permitting 100% Foreign Direct Investment (FDI) for insurance intermediaries

Easing of Local Sourcing Norms also proposed for FDI in Single Brand Retail sector

Rationalization of existing Know Your Customer (KYC) norms for FPIs contemplated to make it more investor friendly

NRI-Portfolio Investment Scheme Route proposed to be merged with Foreign Portfolio

Investment Route with a view to provide NRIs with seamless access to Indian equities

Posted On: 05 JUL 2019 1:42PM by PIB Delhi

It is being contemplated to permit 100% Foreign Direct Investment (FDI) for insurance intermediaries. This was announced by the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman while presenting the Union Budget 2019-20 in the Parliament today. She further proposed that Local sourcing norms will be eased for FDI in Single Brand Retail sector. The FinancecrackIAS.com Minister also added that FDI inflows into India have remained robust despite global headwinds. Global Foreign Direct Investment (FDI) flows slid by 13% in 2018, to US$ 1.3 trillion from US$ 1.5 trillion the previous year – the third consecutive annual decline.

The Finance Minister further stated that according to UNCTAD’s World Investment Report 2019. India’s FDI inflows in 2018-19 remained strong at US$ 64.375 billion marking a 6% growth over the previous year.

The Finance Minister proposed to further consolidate the gains in order to make India a more attractive FDI destination: 1. The Government will examine suggestions of further opening up of FDI in aviation, media (animation, AVGC) and insurance sectors in consultation with all stakeholders.100% Foreign Direct Investment (FDI) will be permitted for insurance intermediaries.Local sourcing norms will be eased for FDI in Single Brand Retail sector. FPIs will be permitted to subscribe to listed debt securities issued by ReITs and InvITs. The Finance Minister further added that time has come that India not only gets integrated into global value chain of production of goods and services, but also become part of the global financial system to mobilise global savings, mostly institutionalized in pension, insurance and sovereign wealth funds. Towards this end, the Government is contemplating organizing an Annual Global Investors Meet in India, using National Infrastructure Investment Fund (NIIF) as the anchor, to get all three sets of global players- top industrialists/corporate honchos, top pension/insurance/sovereign wealth funds and top digital technology/venture funds.

The Finance Minister stated that an important determinant of attracting cross-border investments is availability of investible stock to the FPIs. This issue assumes greater significance in view of the gradual shift, from stock targeted investments, towards passive investment whereby funds track global indices composition of which depends upon available floating stock.

Union Budget 2019-20 propose to increase the statutory limit for FPI investment in a company from 24% to sectoral foreign investment limit with option given to the concerned corporates to limit it to a lower threshold, the Minister added.

The Finance Minister also stated that as a key source of capital to the Indian economy, it is important to ensure a harmonized and hassle free investment experience for Foreign Portfolio Investors. Hence, it is proposed to rationalize and streamline the existing Know Your Customer (KYC) norms for FPIs to make it more investor friendly without compromising the integrity of cross-border capital flows.

The Finance Minister further proposed to merge the NRI-Portfolio Investment Scheme Route with Foreign Portfolio Investment Route with a view to provide NRIs with seamless access to Indian equities.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 STRATEGIC DISINVESTMENT OF SELECT CPSES A PRIORITY FOR THE GOVERNMENT Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Heavy Industries & Public Enterprises Strategic disinvestment of select CPSEs a priority for the Government

Posted On: 05 JUL 2019 2:16PM by PIB Delhi

Strategic disinvestment of select CPSEs will continue to remain a priority of the Government said Union Finance and Corporate Affairs Minister while presenting Union Budget 2019-20 in Parliament today. In view of current macro-economic parameters, the Government will not only reinitiate the process of strategic disinvestment of Air India, but will offer more CPSEs for strategic participation by the private sector.

The Government will undertake strategic sale of PSUs and will also continue to do consolidation of PSUs in the non-financial space as well.

The Finance Minister said that Government is considering, to go below 51% to an appropriate level, on case to case basis, in case where the Undertaking is still to be retained in Government control. The Government has also decided to modify present policy of retaining 51% stake inclusive of the stake of Government controlled institutions.

She said that Government intends to further encourage retail participation in CPSEs which, of late, has shown very encouraging upward trend. In order to provide additional investment space, the Government will realign its holding in CPSEs, including Banks to permit greater availability of its shares and to improve depth of its market.

crackIAS.com ETFs have proved to be an important investment opportunity for retail investors and has turned out to be a good instrument for Government of India’s divestment programme. To expand this further, Government will offer an investment option in ETFs on the lines of Equity Linked Savings Scheme (ELSS). This will also encourage long term investment in CPSEs.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 KEY HIGHLIGHTS OF UNION BUDGET 2019-20 Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Key Highlights of Union Budget 2019-20

Posted On: 05 JUL 2019 1:59PM by PIB Delhi

The Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman made her maiden Budget Speech today and presented the Union Budget 2019-20 before the Parliament. The key highlights of Union Budget 2019 are as follows:

10-point Vision for the decade

● Building Team India with Jan Bhagidari: Minimum Government Maximum Governance. ● Achieving green Mother Earth and Blue Skies through a pollution-free India. ● Making Digital India reach every sector of the economy. ● Launching Gaganyan, Chandrayan, other Space and Satellite programmes. ● Building physical and social infrastructure. ● Water, water management, clean rivers. ● Blue Economy. ● Self-sufficiency and export of food-grains, pulses, oilseeds, fruits and vegetables. ● Achieving a healthy society via Ayushman Bharat, well-nourished women & children, safety of citizens. ● Emphasis on MSMEs, Start-ups, defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices under Make in India.

Towards a 5 Trillion Dollar Economy

● “People’s hearts filled with Aasha (Hope), Vishwas (Trust), Aakansha (Aspirations)”, says FM. ● Indian economy to become a 3 trillion dollar economy in the current year. ● Government aspires to make India a 5 trillion dollar economy. ● “IndiacrackIAS.com Inc. are India’s job-creators and nation’s wealth-creators”, says FM. ● Need for investment in: Infrastructure.Digital economy.Job creation in small and medium firms. ● Initiatives to be proposed for kick-starting the virtuous cycle of investments. ● Common man’s life changed through MUDRA loans for ease of doing business. ● Measures related to MSMEs: Pradhan Mantri Karam Yogi Maandhan Scheme

■ Pension benefits to about three crore retail traders & small shopkeepers with annual turnover less than Rs. 1.5 crore. ■ Enrolment to be kept simple, requiring only Aadhaar, bank account and a self-declaration. Rs. 350 crore allocated for FY 2019-20 for 2% interest subvention (on fresh or incremental loans) to all GST-registered MSMEs, under the Interest Subvention Scheme for MSMEs.Payment platform for MSMEs to be created to enable filing of bills and payment thereof, to eliminate delays in government payments.

● India’s first indigenously developed payment ecosystem for transport, based on National Common Mobility Card (NCMC) standards, launched in March 2019. ● Inter-operable transport card runs on RuPay card and would allow the holders to pay for bus travel, toll taxes, parking charges, retail shopping. ● Massive push given to all forms of physical connectivity through: Pradhan Mantri Gram Sadak Yojana.Industrial Corridors, Dedicated Freight Corridors.Bhartamala and Sagarmala projects, Jal Marg Vikas and UDAN Schemes. ● State road networks to be developed in second phase of Bharatmala project. ● Navigational capacity of Ganga to be enhanced via multi modal terminals at Sahibganj and Haldia and a navigational lock at Farakka by 2019-20, under Jal Marg Vikas Project. ● Four times increase in next four years estimated in the cargo volume on Ganga, leading to cheaper freight and passenger movement and reducing the import bill. ● Rs. 50 lakh crore investment needed in Railway Infrastructure during 2018-2030. ● Public-Private-Partnership proposed for development and completion of tracks, rolling stock manufacturing and delivery of passenger freight services. ● 657 kilometers of Metro Rail network has become operational across the country. ● Policy interventions to be made for the development of Maintenance, Repair and Overhaul (MRO), to achieve self- reliance in aviation segment. ● Regulatory roadmap for making India a hub for aircraft financing and leasing activities from Indian shores, to be laid by the Government. ● Outlay of Rs. 10,000 crore for 3 years approved for Phase-II of FAME Scheme. ● Upfront incentive proposed on purchase and charging infrastructure, to encourage faster adoption of Electric Vehicles. ● Only advanced-battery-operated and registered e-vehicles to be incentivized under FAME Scheme. ● National Highway Programme to be restructured to ensure a National Highway Grid, using a financeable model. ● Power at affordable rates to states ensured under ‘One Nation, One Grid’. ● Blueprints to be made available for gas grids, water grids, i-ways, and regional airports. ● High Level Empowered Committee (HLEC) recommendations to be implemented: Retirement of old & inefficient plants.Addressing low utilization of gas plant capacity due to paucity of Natural Gas. ● Cross subsidy surcharges, undesirable duties on open access sales or captive generation forcrackIAS.com industrial and other bulk power consumers to be removed under Ujjwal DISCOM Assurance Yojana (UDAY). ● Package of power sector tariff and structural reforms to be announced soon. ● Reform measures to be taken up to promote rental housing. ● Model Tenancy Law to be finalized and circulated to the states. ● Joint development and concession mechanisms to be used for public infrastructure and affordable housing on land parcels held by the Central Government and CPSEs.

● Measures to enhance the sources of capital for infrastructure financing: Credit Guarantee Enhancement Corporation to be set up in 2019-2020.Action plan to be put in place to deepen the market for long term bonds with focus on infrastructure.Proposed transfer/sale of investments by FIIs/FPIs (in debt securities issued by IDF-NBFCs) to any domestic investor within the specified lock-in period. ● Measures to deepen bond markets: Stock exchanges to be enabled to allow AA rated bonds as collaterals.User-friendliness of trading platforms for corporate bonds to be reviewed. ● Social stock exchange: Electronic fund raising platform under the regulatory ambit of SEBI.Listing social enterprises and voluntary organizations.To raise capital as equity, debt or as units like a mutual fund. ● SEBI to consider raising the threshold for minimum public shareholding in the listed companies from 25% to 35%. ● Know Your Customer (KYC) norms for Foreign Portfolio Investors to be made more investor friendly. ● Government to supplement efforts by RBI to get retail investors to invest in government treasury bills and securities, with further institutional development using stock exchanges. ● Measures to make India a more attractive FDI destination: FDI in sectors like aviation, media (animation, AVGC) and insurance sectors can be opened further after multi- stakeholder examination.Insurance Intermediaries to get 100% FDI.Local sourcing norms to be eased for FDI in Single Brand Retail sector. ● Government to organize an annual Global Investors Meet in India, using National Infrastructure Investment Fund (NIIF) as an anchor to get all three sets of global players (pension, insurance and sovereign wealth funds). ● Statutory limit for FPI investment in a company is proposed to be increased from 24% to sectoral foreign investment limit. Option to be given to the concerned corporate to limit it to a lower threshold. ● FPIs to be permitted to subscribe to listed debt securities issued by ReITs and InvITs. ● NRI-Portfolio Investment Scheme Route is proposed to be merged with the Foreign Portfolio Investment Route. ● Cumulative resources garnered through new financial instruments like Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs) as well as models like Toll-Operate-Transfer (ToT) exceed Rs. 24,000 crore.

● New Space India Limited (NSIL), a PSE, incorporated as a new commercial arm of Department of Space. ● To tap the benefits of the Research & Development carried out by ISRO like commercialization of products like launch vehicles, transfer to technologies and marketing of spacecrackIAS.com products.

Direct Taxes

● Tax rate reduced to 25% for companies with annual turnover up to Rs. 400 crore ● Surcharge increased on individuals having taxable income from Rs. 2 crore to Rs. 5 crore and Rs. 5 crore and above. ● India’s Ease of Doing Business ranking under the category of ‘paying taxes’ jumped from 172 in 2017 to 121 in the 2019. ● Direct tax revenue increased by over 78% in past 5 years to Rs. 11.37 lakh crore Tax Simplification and Ease of living - making compliance easier by leveraging technology:

● Interchangeability of PAN and Aadhaar Those who don’t have PAN can file tax returns using Aadhaar.Aadhaar can be used wherever PAN is required. ● Pre-filling of Income-tax Returns for faster, more accurate tax returns Pre-filled tax returns with details of several incomes and deductions to be made available.Information to be collected from Banks, Stock exchanges, mutual funds etc. ● Faceless e-assessment Faceless e-assessment with no human interface to be launched.To be carried out initially in cases requiring verification of certain specified transactions or discrepancies. Affordable housing

st ● Additional deduction up to Rs. 1.5 lakhs for interest paid on loans borrowed up to 31 March, 2020 for purchase of house valued up to Rs. 45 lakh. Overall benefit of around Rs. 7 lakh over loan period of 15 years. Boost to Electric Vehicles

● Additional income tax deduction of Rs. 1.5 lakh on interest paid on electric vehicle loans. ● Customs duty exempted on certain parts of electric vehicles. Other Direct Tax measures

● Simplification of tax laws to reduce genuine hardships of taxpayers: Higher tax threshold for launching prosecution for non-filing of returnsAppropriate class of persons exempted from the anti-abuse provisions of Section 50CA and Section 56 of the Income Tax Act. Relief for Start-ups

● Capital gains exemptions from sale of residential house for investment in start-ups extended till FY21. ● ‘Angel tax’ issue resolved- start-ups and investors filing requisite declarations and providing information in their returns not to be subjected to any kind of scrutiny in respect of valuations of share premiums. ● Funds raised by start-ups to not require scrutiny from Income Tax Department E-verification mechanism for establishing identity of the investor and source of funds. ● Special administrative arrangements for pending assessments and grievance redressal No inquiry in such cases by the Assessing Officer without obtaining approval of the supervisory officer.crackIAS.com ● No scrutiny of valuation of shares issued to Category-II Alternative Investment Funds. ● Relaxation of conditions for carry forward and set off of losses. NBFCs

● Interest on certain bad or doubtful debts by deposit taking as well as systemically important non-deposit taking NBFCs to be taxed in the year in which interest is actually received. International Financial Services Centre (IFSC)

● Direct tax incentives proposed for an IFSC: 100 % profit-linked deduction in any ten-year block within a fifteen-year period.Exemption from dividend distribution tax from current and accumulated income to companies and mutual funds.Exemptions on capital gain to Category-III Alternative Investment Funds (AIFs).Exemption to interest payment on loan taken from non-residents. Securities Transaction Tax (STT)

● STT restricted only to the difference between settlement and strike price in case of exercise of options.

Indirect Taxes

Make In India

● Basic Customs Duty increased on cashew kernels, PVC, tiles, auto parts, marble slabs, optical fibre cable, CCTV camera etc. ● Exemptions from Custom Duty on certain electronic items now manufactured in India withdrawn. ● End use based exemptions on palm stearin, fatty oils withdrawn. ● Exemptions to various kinds of papers withdrawn. ● 5% Basic Custom Duty imposed on imported books. ● Customs duty reduced on certain raw materials such as: Inputs for artificial kidney and disposable sterilised dialyser and fuels for nuclear power plants etc.Capital goods required for manufacture of specified electronic goods. Defence

● Defence equipment not manufactured in India exempted from basic customs duty Other Indirect Tax provisions

● Export duty rationalised on raw and semi-finished leather ● Increase in Special Additional Excise Duty and Road and Infrastructure Cess each by Rs. 1 per litre on petrol and diesel ● Custom duty on gold and other precious metals increased ● Legacy Dispute Resolution Scheme for quick closure of pending litigations in Central Excise and Service tax from pre-GST regime

Grameen Bharat / Rural India

● UjjwalacrackIAS.com Yojana and Saubhagya Yojana have transformed the lives of every rural family, dramatically improving ease of their living. ● Electricity and clean cooking facility to all willing rural families by 2022. ● Pradhan Mantri Awas Yojana – Gramin (PMAY-G) aims to achieve "Housing for All" by 2022: Eligible beneficiaries to be provided 1.95 crore houses with amenities like toilets, electricity and LPG connections during its second phase (2019-20 to 2021-22). ● Pradhan Mantri Matsya Sampada Yojana (PMMSY) A robust fisheries management framework through PMMSY to be established by the Department of Fisheries.To address critical gaps in the value chain including infrastructure, modernization, traceability, production, productivity, post-harvest management, and quality control. ● Pradhan Mantri Gram Sadak Yojana (PMGSY) Target of connecting the eligible and feasible habitations advanced from 2022 to 2019 with 97% of such habitations already being provided with all weather connectivity.30,000 kilometers of PMGSY roads have been built using Green Technology, Waste Plastic and Cold Mix Technology, thereby reducing carbon footprint.1,25,000 kilometers of road length to be upgraded over the next five years under PMGSY III with an estimated cost of Rs. 80,250 crore. ● Scheme of Fund for Upgradation and Regeneration of Traditional Industries’ (SFURTI) Common Facility Centres (CFCs) to be setup to facilitate cluster based development for making traditional industries more productive, profitable and capable for generating sustained employment opportunities.100 new clusters to be setup during 2019-20 with special focus on Bamboo, Honey and Khadi, enabling 50,000 artisans to join the economic value chain. ● Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’ (ASPIRE) consolidated. 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs) to be setup in 2019-20.75,000 entrepreneurs to be skilled in agro-rural industry sectors. ● Private entrepreneurships to be supported in driving value-addition to farmers’ produce from the field and for those from allied activities. ● Dairying through cooperatives to be encouraged by creating infrastructure for cattle feed manufacturing, milk procurement, processing & marketing. ● 10,000 new Farmer Producer Organizations to be formed, to ensure economies of scale for farmers. ● Government to work with State Governments to allow farmers to benefit from e-NAM. ● Zero Budget Farming in which few states’ farmers are already being trained to be replicated in other states. ● India’s water security New Jal Shakti Mantralaya to look at the management of our water resources and water supply in an integrated and holistic mannerJal Jeevan Mission to achieve Har Ghar Jal (piped water supply) to all rural households by 2024To focus on integrated demand and supply side management of water at the local level.Convergence with other Central and State Government Schemes to achieve its objectives.1592 critical and over exploited Blocks spread across 256 District being identified for the Jal Shakti Abhiyan.Compensatory Afforestation Fund Management and Planning Authority (CAMPA) fund can be used for this purpose. ● Swachh Bharat Abhiyan 9.6 crore toilets constructed since Oct 2, 2014.More than 5.6 lakh villages have become Open Defecation Free (ODF).Swachh Bharat Mission to be expanded to undertake sustainable solid waste management in every village. ● Pradhan Mantri Gramin Digital Saksharta Abhiyan, Over two crore rural Indians made digitallycrackIAS.com literate.Internet connectivity in local bodies in every Panchayat under Bharat-Net to bridge rural-urban divide.Universal Obligation Fund under a PPP arrangement to be utilized for speeding up Bharat-Net.

Shahree Bharat/Urban India

● Pradhan Mantri Awas Yojana – Urban (PMAY-Urban)- Over 81 lakh houses with an investment of about Rs. 4.83 lakh crore sanctioned of which construction started in about 47 lakh houses.Over 26 lakh houses completed of which nearly 24 lakh houses delivered to the beneficiaries.Over 13 lakh houses so far constructed using new technologies. ● More than 95% of cities also declared Open Defecation Free (ODF). ● Almost 1 crore citizens have downloaded Swachhata App. ● Target of achieving Gandhiji’s resolve of Swachh Bharat to make India ODF by 2nd October 2019. To mark this occasion, the Rashtriya Swachhta Kendra to be inaugurated at Gandhi Darshan, Rajghat on 2nd October, 2019.Gandhipedia being developed by National Council for Science Museums to sensitize youth and society about positive Gandhian values. ● Railways to be encouraged to invest more in suburban railways through SPV structures like Rapid Regional Transport System (RRTS) proposed on the Delhi-Meerut route. ● Proposal to enhance the metro-railway initiatives by: Encouraging more PPP initiatives.Ensuring completion of sanctioned works.Supporting transit oriented development (TOD) to ensure commercial activity around transit hubs.

Youth

● New National Education Policy to be brought which proposes Major changes in both school and higher educationBetter Governance systemsGreater focus on research and innovation. ● National Research Foundation (NRF) proposed To fund, coordinate and promote research in the country.To assimilate independent research grants given by various Ministries.To strengthen overall research eco-system in the country This would be adequately supplemented with additional funds. ● Rs. 400 crore provided for “World Class Institutions”, for FY 2019-20, more than three times the revised estimates for the previous year. ● ‘Study in India’ proposed to bring foreign students to study in Indian higher educational institutions. ● Regulatory systems of higher education to be reformed comprehensively: To promote greater autonomy.To focus on better academic outcomes. ● Draft legislation to set up Higher Education Commission of India (HECI), to be presented. ● Khelo India Scheme to be expanded with all necessary financial support. ● National Sports Education Board for development of sportspersons to be set up under Khelo India, to popularize sports at all levels ● To prepare youth for overseas jobs, focus to be increased on globally valued skill-sets including language training, AI, IoT, Big Data, 3D Printing, Virtual Reality and Robotics. ● Set of four labour codes proposed, to streamline multiple labour laws to standardize and streamline registration and filing of returns. ● AcrackIAS.com television program proposed exclusively for and by start-ups, within the DD bouquet of channels. ● Stand-Up India Scheme to be continued for the period of 2020-25. The Banks to provide financial assistance for demand based businesses.

Ease of Living

● About 30 lakh workers joined the Pradhan Mantri Shram Yogi Maandhan Scheme that provides Rs. 3,000 per month as pension on attaining the age of 60 to workers in unorganized and informal sectors. ● Approximately 35 crore LED bulbs distributed under UJALA Yojana leading to cost saving of Rs. 18,341 crore annually. ● Solar stoves and battery chargers to be promoted using the approach of LED bulbs mission. ● A massive program of railway station modernization to be launched.

Naari Tu Narayani/Women

● Approach shift from women-centric-policy making to women-led initiatives and movements. ● A Committee proposed with Government and private stakeholders for moving forward on Gender budgeting. ● SHG: Women SHG interest subvention program proposed to be expanded to all districts.Overdraft of Rs. 5,000 to be allowed for every verified women SHG member having a Jan Dhan Bank Account.One woman per SHG to be eligible for a loan up to Rs. 1 lakh under MUDRA Scheme.

India’s Soft Power

● Proposal to consider issuing Aadhaar Card for NRIs with Indian Passports on their arrival without waiting for 180 days. ● Mission to integrate traditional artisans with global markets proposed, with necessary patents and geographical indicators. ● 18 new Indian diplomatic Missions in Africa approved in March, 2018, out of which 5 already opened. Another 4 new Embassies intended in 2019-20. ● Revamp of Indian Development Assistance Scheme (IDEAS) proposed. ● 17 iconic Tourism Sites being developed into model world class tourist destinations. ● Present digital repository aimed at preserving rich tribal cultural heritage, to be strengthened.

Banking and Financial Sector

● NPAs of commercial banks reduced by over Rs. 1 lakh crore over the last year. ● Record recovery of over Rs. 4 lakh crore effected over the last four years. ● Provision coverage ratio at its highest in seven years. ● Domestic credit growth increased to 13.8%. ● Measures related to PSBs: Rs. 70,000 crore proposed to be provided to PSBs to boost credit.crackIAS.comPSBs to leverage technology, offering online personal loans and doorstep banking, and enabling customers of one PSBs to access services across all PSBs.Steps to be initiated to empower accountholders to have control over deposit of cash by others in their accounts.Reforms to be undertaken to strengthen governance in PSBs. ● Measures related to NBFCs: Proposals for strengthening the regulatory authority of RBI over NBFCs to be placed in the Finance Bill.Requirement of creating a Debenture Redemption Reserve will be done away with to allow NBFCs to raise funds in public issues.Steps to allow all NBFCs to directly participate on the TReDS platform. ● Return of regulatory authority from NHB to RBI proposed, over the housing finance sector. ● Rs. 100 lakh crore investment in infrastructure intended over the next five years. Committee proposed to recommend the structure and required flow of funds through development finance institutions. ● Steps to be taken to separate the NPS Trust from PFRDA. ● Reduction in Net Owned Fund requirement from Rs. 5,000 crore to Rs. 1,000 crore proposed: To facilitate on-shoring of international insurance transactions.To enable opening of branches by foreign reinsurers in the International Financial Services Centre. ● Measures related to CPSEs: Target of Rs. 1, 05,000 crore of disinvestment receipts set for the FY 2019-20.Government to reinitiate the process of strategic disinvestment of Air India, and to offer more CPSEs for strategic participation by the private sector.Government to undertake strategic sale of PSUs and continue to consolidate PSUs in the non-financial space.Government to consider going to an appropriate level below 51% in PSUs where the government control is still to be retained, on case to case basis.Present policy of retaining 51% Government stake to be modified to retaining 51% stake inclusive of the stake of Government controlled institutions.Retail participation in CPSEs to be encouraged.To provide additional investment space:

■ Government to realign its holding in CPSEs ■ Banks to permit greater availability of its shares and to improve depth of its market. Government to offer an investment option in ETFs on the lines of Equity Linked Savings Scheme (ELSS).Government to meet public shareholding norms of 25% for all listed PSUs and raise the foreign shareholding limits to maximum permissible sector limits for all PSU companies which are part of Emerging Market Index.

● Government to raise a part of its gross borrowing program in external markets in external currencies. This will also have beneficial impact on demand situation for the government securities in domestic market. ● New series of coins of One Rupee, Two Rupees, Five Rupees, Ten Rupees and Twenty Rupees, easily identifiable to the visually impaired to be made available for public use shortly.

Digital Payments

● TDS of 2% on cash withdrawal exceeding Rs. 1 crore in a year from a bank account ● Business establishments with annual turnover more than Rs. 50 crore shall offer low cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants. MegacrackIAS.com Investment in Sunrise and Advanced Technology Areas

● Scheme to invite global companies to set up mega-manufacturing plants in areas such as Semi-conductor Fabrication (FAB), Solar Photo Voltaic cells, Lithium storage batteries, Computer Servers, Laptops, etc Investment linked income tax exemptions to be provided along with indirect tax benefits.

Achievements during 2014-19 ● 1 trillion dollar added to Indian economy over last 5 years (compared to over 55 years taken to reach the first trillion dollar). th th ● India is now the 6 largest economy in the world, compared to 11 largest five years ago. rd ● Indian economy is globally the 3 largest in Purchasing Power Parity (PPP) terms. ● Strident commitment to fiscal discipline and a rejuvenated Centre-State dynamic provided during 2014-19. ● Structural reforms in indirect taxation, bankruptcy and real estate carried out. ● Average amount spent on food security per year almost doubled during 2014-19 compared to 2009-14. ● Patents issued more than trebled in 2017-18 as against the number in 2014. ● Ball set rolling for a New India, planned and assisted by the NITI Aayog.

Roadmap for future

● Simplification of procedures. ● Incentivizing performance. ● Red-tape reduction. ● Making the best use of technology. ● Accelerating mega programmes and services initiated and delivered so far.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 BUDGET SPEECH SUMMARY – PART A Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Budget Speech Summary – Part A

Posted On: 05 JUL 2019 1:57PM by PIB Delhi

Indian economy becoming a 3 trillion dollar economy this year with World’s 3rd largest economy in terms of Purchasing Power Parity, government’s intention to invest Rs. 100 lakh crore in infrastructure in next 5 years, enhaced target of over one lakh 5,000 crore of disinvestment in 2019-20, proposal to provide Rs.70,000 crore to PSBs to boost credit, doubling of food security budget in last 5 years, faster adoption of Electric vehicles with an outlay of Rs.10,000 crore, opening of 18 new Indian diplomatic missions in Africa, development of 17 iconic Tourism Sites into world class tourist destinations and issuance of new series of coins of 1,2,5,10 & 20 rupees are some of the key highlights of the Union Budget 2019-20 presented to Parliament by Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman today.

In her maiden Budget speech, the Finance Minister said that Har Ghar Jal to all rural households by 2024 under Jal Jeevan Mission, “Housing for All” by 2022 under Pradhan Mantri Awas Yojana-(Gramin), upgradation of 1,25,000 kms of rural road under PMGSY-III in 5 years with an outlay of more than 80,000 crore with all weather connectivity provided to over 97% of such habitations, common facility centres under SFURTI for Bamboo, Honey and Khadi clusters, setting up of 80 Livelihood Business Incubators and 20 Technology Business incubators in 2019-20 to develop 75,000 skilled entrepreneurs in agro-rural industry sectors are some of the important New Deals for the Rural and Agricultural sectors of the Economy.

Smt. Sitharaman said that the first term of PM Modi-led-NDA-Government stood out as a performing Government, a Government whose signature was in the last mile delivery. Between 2014-19, government provided a rejuvenated Centre-State dynamic, cooperative federalism, GST Council, and a strident commitment to fiscal discipline. It set the ball rolling for a New India, planned and assisted by the NITI Aayog, a broad based think tank and has shown its deeds that the principle of “Reform, Perform, Transform” can succeed. crackIAS.com On many programmes and initiatives government had worked on unprecedented scales.

Pre- 2014 Post-2014 Food Security Rs.1.2 Lakh Crores Rs. 1.8 Lakh Crores Number of Patents 4000 13,000(2017-18) MSP Rs. 89,740 crores Rs. 1,71,127.48 crores(2018-19)

The Finance Minister said that mega programmes and services initiated and delivered during the last 5 years will now be further accelerated and sincere efforts will be made to further simplify procedures, incentivize performance, reduce red-tape and make the best use of technology to achieve the desired goals.

The Finance Minister elaborated that the Indian economy will grow to become a 3 trillion dollar economy in the current year and will reach the vision of Prime Minister to become 5 trillion dollar economy in the next five years. It is now the sixth largest in the world, while it was at 11th position in 2014. In Purchasing Power Parity terms, India is in fact, the 3rd largest economy already, only next to China and the USA. She said that to attain this and more the country needs to continue undertaking many structural reforms like the many big reforms in particular in the last 5 years in indirect taxation, bankruptcy and real estate. Even the common man’s life was being changed through MUDRA loans to help him do his business, and through several programmes it was being ensured that his/her kitchen had become smokeless, his/her house got electricity connection and women’s dignity was respected with the provision of toilets in homes.

Smt. Sitharaman said that gone are the days of policy paralysis and license-quota-control regimes. India Inc. are India’s job-creators and they are the nation’s wealth-creators. She said, “Together, with mutual trust, we can gain, catalyze fast and attain sustained national growth. I wish to propose a number of initiatives as part of a framework for kick-starting the virtuous cycle of domestic and foreign investments”.

Referring to connectivity as the lifeblood of an economy, the Finance Minister said that the Government has given a massive push to all forms of physical connectivity through Pradhan Mantri Gram SadakYojana, industrial corridors, dedicated freight corridors, Bhartamala and Sagarmala projects, Jal Marg Vikas and UDAN Schemes. While the industrial corridors would improve infrastructure availability for greater industrial investment in the catchment regions, the dedicated freight corridors would mitigate the congestion of our railway network benefitting the common man. The ambitious programme of Bharatmala would help develop national road corridors and highways, while Sagarmala would enhance port connectivity, modernization and port-linked industrialization. If Sagarmala is aimed at improving the infrastructure for external trade, equally it is the poor man’s transport too. Waterways are proven as a cheap mode of transport. The Jal Marg Vikas project for capacity augmentation of navigation on National Waterways is aimed at smoothening internal trade carried through inland water transport. These initiativescrackIAS.com will improve logistics tremendously, reducing the cost of transportation and increasing the competitiveness of domestically produced goods.

The Finance Minister said that as the world’s third largest domestic aviation market, the time is ripe for India to enter into aircraft financing and leasing activities from Indian shores. She said, for providing an enabling ecosystem for growth in India of Maintenance, Repair and Overhaul (MRO) industry, it is proposed to leverage India’s engineering advantage and potential to achieve self-reliance in this vital aviation segment. She added that the government will adopt suitable policy interventions to create a congenial atmosphere for the development of MRO in the country.

The Finance Minister informed that Phase-II of FAME Scheme 2019, following approval of the Cabinet with an outlay of Rs.10,000 crore for a period of 3 years, has commenced from 1st April, 2019. The main objective of the Scheme is to encourage faster adoption of Electric vehicles by way of offering upfront incentive on purchase of Electric vehicles and also by establishing the necessary charging infrastructure for electric vehicles.

Dwelling on the Railways, Smt. Sithraman said that it is estimated that Railway Infrastructure would need an investment of Rs. 50 lakh crores between 2018-2030. Given that the capital expenditure outlays of Railways are around 1.5 to 1.6 lakh crores per annum, completing even all sanctioned projects would take decades. It is therefore proposed to use Public-Private Partnership to unleash faster development and completion of tracks, rolling stock manufacturer and delivery of passenger freight services. She said that to take connectivity infrastructure to the next level, government will build on the successful model in ensuring power connectivity – One Nation, One Grid – that has ensured power availability to states at affordable rates and she proposed to make available a blueprint this year for developing gas grids, water grids, i-ways, and regional airports.

Referring to welfare measures, the Fianance Minister said that the Government of India has decided to extend the pension benefit to about three crore retail traders & small shopkeepers whose annual turnover is less than Rs.1.5 crore under a new Scheme namely Pradhan MantriLaghuVyapari Mann-DhanYojana (PMLVMY). Enrolment into the Scheme will be kept simple requiring only Aadhaar and a bank account and rest will be on self-declaration.

Recognizing that investment-driven growth requires access to low cost capital, the Finance Minister said, India requires investments averaging Rs. 20 lakh crores every year (USD 300 billion a year) and therefore a number of measures are proposed to enhance the sources of capital for infrastructure financing:

● A Credit Guarantee Enhancement Corporation for which regulations have been notified by the RBI, will be set up in 2019-20. ● An action plan to deepen the market for long term bonds including for deepening markets for corporate bond repos, credit default swaps etc., with specific focus on infrastructure sector, will be put in place. ● ItcrackIAS.com is proposed to permit investments made by FIIs/FPIs in debt securities issued by IDF- NBFCs to be transferred/sold to any domestic investor within the specified lock-in period.

On the subject of Foreign Direct Investment, Smt. Sitharaman said that FDI inflows into India have remained robust despite global headwinds. India’s FDI inflows in 2018-19 remained strong at US$ 64.375 billion marking a 6% growth over the previous year. She added that the Government will examine suggestions of further opening up of FDI in aviation, media (animation, AVGC) and insurance sectors in consultation with all stakeholders and suggested following measures: 1. 100% Foreign Direct Investment (FDI) will be permitted for insurance intermediaries.Local sourcing norms will be eased for FDI in Single Brand Retail sector. FPIs will be permitted to subscribe to listed debt securities issued by ReITs and InvITs.

On a similar issue, the Finance Minister informed that even though India is the world's top remittance recipient, NRI investment in Indian capital markets is comparatively less. With a view to provide NRIs with seamless access to Indian equities, she proposed to merge the NRI- Portfolio Investment Scheme Route with the Foreign Portfolio Investment Route.

Dwelling on the rural issues and Rural India, the Finance Minister said that Prime Minister Shri Narendra Modi’s two mega initiatives of Ujjwala Yojana and Saubhagya Yojana- have transformed the lives of every rural family, dramatically improving ease of their living. Household access to clean cooking gas has seen an unprecedented expansion, through provision of more than 7 crore LPG connections. All villages, and almost 100% households across the country havebeen provided with electricity. She informed that by 2022, the 75th year of India’s independence, every single rural family, except those who are unwilling to take the connection will have an electricity and a clean cooking facility. Similarly, under Pradhan MantriAwasYojana – Gramin (PMAY-G) a total of 1.54 crore rural homes have been completed in the last five years. In the second phase of PMAY-G, during 2019-20 to 2021-22, 1.95 crore houses are proposed to be provided to the eligible beneficiaries. These houses are also being provided with amenities like toilets, electricity and LPG connections. With the use of technology, theDBT platform and technology inputs, average number of days for completion of houses has reduced from 314 days in 2015-16 to 114 days in 2017-18.

The Finance Minister said that Pradhan MantriGram SadakYojana (PMGSY) has brought many socio economic gains in the rural areas and its target for completion was advanced from 2022 to 2019, as all weather connectivity has now been provided to over 97% of such habitations. This has been possible by maintaining a high pace of road construction of 130 to 135 km per day in the last 1,000 days. She underlined that the PMGSY-III is envisaged to upgrade 1,25,000 kms of road length over the next five years, with an estimated cost of Rs. 80,250 crore.

Smt. Sitharaman said that the ‘Scheme of Fund for Upgradation and Regeneration of Traditional Industries’ (SFURTI) aims to set up more Common Facility Centres (CFCs) to facilitate cluster based development to make the traditional industries more productive, profitable and capable for generating sustained employment opportunities. The focused sectors are Bamboo, Honey and KhadicrackIAS.com clusters. The SFURTI envisions setting up 100 new clusters during 2019-20 which should enable 50,000 artisans to join the economic value chain. Further, to improve the technology of such industries, the Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE) has been consolidated for setting up of Livelihood Business Incubators (LBIs) and Technology Business Incubators (TBIs). The Scheme contemplates to set up 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs) in 2019-20 to develop 75,000 skilled entrepreneurs in agro-rural industry sectors. Government also hopes to form 10,000 new Farmer Producer Organizations, to ensure economies of scale for farmers.

To provide benefits to fishermen communities through a focused Scheme – the Pradhan Mantri Matsya Sampada Yojana (PMMSY) – the Department of Fisheries will establish a robust fisheries management framework. They will address critical gaps in strengthening the value chain, including infrastructure, modernization, traceability, production, productivity, post-harvest management, and quality control.

Finance Minister said that ensuring India’s water security and providing access to safe and adequate drinking water to all Indians is a priority of the Government. A major step in this direction has been the constitution of the Jal Shakti Mantralaya, integrating the Ministry of Water Resources, River Development and Ganga Rejuvenation and Ministry of Drinking Water and Sanitation. This new Mantralaya will look at the management of our water resources and water supply in an integrated and holistic manner, and will work with States to ensure HarGharJal – (piped water supply) to all rural households by 2024 under the Jal Jeevan Mission. The Government has identified 1592 Blocks which are critical and over exploited, spread across 256 District for the Jal Shakti Abhiyan. Besides using funds available under various Schemes, the Government will also explore possibility of using additional funds available under the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) for this purpose.

Under the Pradhan Mantri Gramin Digital SakshartaAbhiyan, over two crore rural Indians have so far been made digitally literate. To bridge rural-urban digital divide, Bharat-Net is targeting internet connectivity in local bodies in every Panchayat in the country. This will be speeded up with assistance from Universal Obligation Fund and under a Public Private Partnership arrangement.

Under Pradhan Mantri Awas Yojana – Urban (PMAY-Urban), over 81 lakh houses with an investment of about Rs.4.83 lakh crores have been sanctioned of which construction has started in about 47 lakh houses. Over 26 lakh houses have been completed of which nearly 24 lakh houses have been delivered to the beneficiaries. There is large scale adoption of new technologies for construction of these houses. Over 13 lakh houses have so far been constructed using these new technologies.

The 150th birth anniversary of Mahatma Gandhi is an apt occasion for us to re-dedicate ourselves to the ideals of Mahatma Gandhi. Prime Minister Modi took the Sankalp of achieving Gandhiji’s resolve of Swachh Bharat to make India Open Defecation Free by 2nd October 2019. I am verycrackIAS.com satisfied and happy to report that this would be achieved by the 2nd October.

The Finance Minister said that the Government will bring in a New National Education Policy to transform India’s higher education system to one of the global best education systems. The new Policy proposes major changes in both school and higher education among others, better Governance systems and brings greater focus on research and innovation. It also proposed to establish a National Research Foundation (NRF) to fund, coordinate and promote research in the country. She said that these initiatives have up-graded the quality of education. There was not a single Indian institution in the top 200 in the world university rankings five years back. Due to concerted efforts by our institutions to boost their standards and also project their credentials better, we have three institutions now – two IITs and IISc Bangalore – in the top 200 bracket.

Smt Sitharaman said that through the implementation of ‘KayakaveKailasa’, the Government will enable about 10 million youth to take up industry-relevant skill training through the Pradhan Mantri Kaushal Vikas Yojana (PMKVY). This is helping to create a large pool of skilled manpower with speed and high standards. She also added that the government will also lay focus on new-age skills like Artificial Intelligence (AI), Internet of Things, Big Data, 3D Printing, Virtual Reality and Robotics, which are valued highly both within and outside the country, and offer much higher remuneration.

She said that the Government has decided to increase contribution to 12% for both Employees Provident Fund and Employee’s Pension Scheme for all sectors w.e.f. 01.04.2018. As a result of this measure, number of beneficiaries increased by almost 88 lakhs during FY 2018-19. As on 31.03.2019, total beneficiaries under the Scheme are 1,18,05,000 and the establishments benefitting are 1,45,512. The Government is proposing to streamline multiple labour laws into a set of four labour codes. This will ensure that process of registration and filing of returns will get standardized and streamlined.

Smt Sitharaman dsaid that this Government has supported and encouraged women entrepreneurship through various schemes such as MUDRA, Stand UP India and the Self Help Group (SHG) movement. In order to further encourage women enterprise, she proposed to expand the Women SHG interest subvention programme to all districts. Furthermore, for every verified women SHG member having a Jan Dhan Bank Account, an overdraft of Rs.5,000 shall be allowed. One woman in every SHG will also be made eligible for a loan up to Rs. 1 lakh under the MUDRA Scheme.

On tourism front, the Finance Minister said that the Government is developing 17 iconic Tourism Sites into world class tourist destinations and to serve as a model for other tourism sites. The Iconic Tourism Sites would enhance visitor experience which would lead to increase visits of both domestic and international tourists at these destinations. She also informed that with the objective of preserving rich tribal cultural heritage, a digital repository is developed where documents, folk songs, photos & videos regarding their evolution, place of origin, lifestyle, architecture, education level, traditional art, folk dances and other anthropological details of the tribescrackIAS.com in India are stored. The repository will further be enriched and strengthened.

The Finance Minister flagged the ten points of Government’s Vision:

1. Building physical and social infrastructure;Digital India reaching every sector of the economy;Pollution free India with green Mother Earth and Blue Skies;Make in India with particular emphasis on MSMEs, Start-ups, defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices;Water, water management, clean Rivers;Blue Economy;Space programmes. Gaganyan, Chandrayan and Satellite programmes;Self-sufficiency and export of food-grains, pulses, oilseeds, fruits and vegetables;Healthy society – Ayushman Bharat, well-nourished women & children. Safety of citizensTeam India with Jan Bhagidari. Minimum Government Maximum Governance.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 SEVERAL TAX PROPOSALS AIM TO PROMOTE INVESTMENTS IN START-UPS AND SUNRISE INDUSTRIES IN THE COUNTRY Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Several tax proposals aim to promote investments in startups and sunrise industries in the country

Lower 25% corporate tax rate is to be applicable to those with annual turnover upto Rs.400 crore instead of the current limit of Rs.250 crore

Increase in surcharge by 3% for those with taxable income between 2-5 crore rupees and by 5% to those with income of over rupees 5 crore

Digital economy to be promoted. A tds of 2% on cash withdrawal exceeding Rs.1 crore in a year from a bank account is proposed

Both direct and indirect tax incentives for promotion of electric vehicles in a big way announced

Several customs duty proposals announced for promoting make in India, reducing import dependence, protection to MSME sector and promoting clean energy crackIAS.com Special additional excise duty and road & infrastructure cess of one Rupee each on petrol and diesel proposed

Customs duty on gold and other precious metals increased from 10% to 12.5%

Posted On: 05 JUL 2019 1:56PM by PIB Delhi PROMOTING INVESTMENTS

Several of the tax proposals announced by the Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman, while presenting the Union Budget 2019-20 in Parliament today, are aimed at promoting investments in Sunrise Advanced Technology industries and in Start-ups. To boost economic growth and Make in India, a Scheme is to be launched to invite global companies through a transparent competitive bidding to set up mega-manufacturing plants in sunrise and advanced technology areas such as Semi-conductor Fabrication (FAB), Solar Photo Voltaic cells, Lithium storage batteries, Solar electric charging infrastructure, Computer Servers, Laptops, etc. Such global companies are to be give investment linked income tax exemptions under Section 35 AD of the Income Tax Act, and other indirect tax benefits.

The Finance Minister, Smt. Nirmala Sitharaman presenting her maiden budget, said “to resolve the so-called ‘angel tax’ issue, the start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums. The issue of establishing identity of the investor and source of his funds will be resolved by putting in place a mechanism of e-verification. With this, the funds raised by start-ups will not require any kind of scrutiny from the Income Tax Department. Special administrative arrangements shall be made by CBDT for pending assessments of start-ups and redressal of their grievances. No inquiry or verification in such cases can be carried out by the Assessing Officer without obtaining approval of his supervisory officer. ” Start-ups will not be required to justify fair market value of their shares issued to Category-II Alternative Investment Funds also. Valuation of shares issued to these funds shall be beyond the scope of income tax scrutiny. She said it is also proposed to relax some of the conditions for carry forward and set off of losses in the case of start-ups. It is also proposed to extend the period of exemption of capital gains arising from sale of residential house for investment in start-ups up to 31.3.2021.

AFFORDABLE HOUSING

Affordable housing gets further encouragement in the form of additional tax deduction of Rs.1.5 lakh beyond Rs. 2 lakh of interest paid on loans borrowed upto 31st March, 2020 for purchase of an affordable house valued up to Rs. 45 lakh. The Finance Minister said “thus a person purchasing an affordable house will now get an enhanced interest deduction up to Rs. 3.5 lakh. This will translate into a benefit of around Rs 7 lakh to the middle class home-buyers over their loan period of 15 years.” crackIAS.com MODERNISATION OF TAX ADMINISTRATION

Expressing thanks to the taxpayer, including self-employed, small traders, salary earners and senior citizens, Smt. Sitharaman said that “the direct tax revenue has significantly increased over the past couple of years. It has increased by over 78% from Rs. 6.38 lakh crore in Financial Year 2013-14 to around Rs. 11.37 lakh crore in Financial Year 2018-19. It is now growing at double digit rate every year.”

Saying that those in the highest income brackets need to contribute more to the nation’s development and for revenue mobilization, the Finance Minister announced enhancement of surcharge of 3 % on individuals having taxable income from Rs. 2 crore to Rs. 5 crore and 7 % for those with taxable income of Rs. 5 crore and above.

At the same time, several measures are announced to leverage technology to make tax administration and tax payment easier. Those without Pan Card are now allowed to file income tax returns by quoting their Aadhar number.

Pre-filled tax returns would be made available to taxpayers with details of salary income, capital gains from securities, bank interests, and dividends and tax deductions etc,. Information regarding these incomes will be collected from the concerned sources such as Banks, Stock exchanges, mutual funds, EPFO, State Registration Departments etc.

A Scheme of Faceless Assessment in electronic mode involving no human interface is being launched this year in a phased manner. To start with, such e-assessments shall be carried-out in cases requiring verification of certain specified transactions or discrepancies. Cases selected for scrutiny shall be allocated to assessment units in a random manner and notices shall be issued electronically by a Central Cell, without disclosing the name, designation or location of the Assessing Officer. The Central Cell shall be the single point of contact between the taxpayer and the Department.

CORPORATE TAX

On corporate tax, the Minister said, “we continue with phased reduction in rates. Currently, the lower rate of 25 % is only applicable to companies having annual turnover up to Rs 250 Crore. This is proposed to be widened to include all companies having annual turnover up to Rs 400 crore. This would cover 99.3% of the companies. With this only, 0.7 % of companies will remain outside this rate”.

DIGITAL PAYMENTS

To further encourage digital payments practices in the country or discourage cash payments, the Finance Minister announced several measures which include discouraging the practice of making business payments in cash, proposal to levy TDS of 2% on cash withdrawal exceeding Rs.1 crore in a year from a bank account. Business establishments with annual turnover more than Rs. 50 crore shall offer low cost digital modes of payment to their customers and no charges or Merchant Discount Rate is to be imposed on customers as well as merchants. RBI and Banks will absorb these costs from the savings that will accrue to them on account of handling less cash as people move to these digital modes of payment. Necessary amendments are being made in the Income Tax Act and the Payments and Settlement Systems Act, 2007 to give effectcrackIAS.com to these provisions. ELECTRIC VEHICLES

For promotion of electric vehicles in a big way in the country, both direct and indirect tax incentives are announced. The Finance Minister said –“considering India’s large consumer base, we aim to envision India as a global hub of manufacturing of Electric Vehicles”. Inclusion of Solar storage batteries and charging infrastructure in the above Scheme will boost our efforts, she said. The Finance Minister announced that the “Government has already moved GST Council to lower the GST rate on electric vehicles from 12% to 5%. Also to make electric vehicle affordable to consumers, our Government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. This amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicle”. The Minister while proposing increase in customs duties on automobile and automobile parts, had provided for exemption of customs duties on certain parts of electric vehicles.

CUSTOM DUTY PROPOSALS

In general, other Customs Duty proposals are aimed at promoting Make in India, reducing import dependence, protection to MSME sector, promoting clean energy, curbing non-essential imports and correcting inversions.

To provide level playing field to domestic industry, custom duties are enhanced on 36 items including :

● Cashew kernels ● Fatty acids. Acid oils from refining used in manufacture of oleochemicals and soaps ● Poly Vinyl Chloride ● Floor cover of plastics, Wall or ceiling coverings of plastics ● Articles of plastic ● Butyl Rubber ● Chlorobutyl rubber or bromobutyl rubber ● Paper for newsprint and magazines ● Printed books (including covers for printed books) and printed manuals ● Water blocking tapes for manufacture of optical fiber cables ● Ceramic roofing tiles and ceramic flags and pavings, hearth or wall tiles etc. ● Stainless steel products ● Wire of other alloy steel (other than INVAR) ● Base metal fittings, mountings and similar articles suitable for furniture, doors, staircases, windows, blinds, hinge for auto mobiles ● Indoor and outdoor unit of split –system air conditioner ● Stone crushing (cone type) plants for the construction of roads ● Charger/ power adapter of CCTV camera/ IP camera and DVR / NVR ● Loudspeaker ● Digital Video Recorder (DVR) and Network Video Recorder (NVR) ● CCTV camera and IP camera ● Optical Fibres, optical fibre bundles and cables ● Friction material and articles thereof (for example, sheets, rolls, strips, segments, discs, washers,crackIAS.com pads), not mounted, for brakes, for clutches or the like, with a basis of asbestos, of other mineral substances or of cellulose, whether or not combined with textile or other materials. ● Glass mirrors, whether or not framed, including rear-view mirrors ● Locks of a kind used in motor vehicles ● Catalytic Converter ● Oil or petrol filters for internal combustion engines ● Intake air filters for internal combustion engines ● Lighting or visual signaling equipment of a kind used in bicycles or motor vehicles ● Horns for vehicle ● Other visual or sound signalling equipment for bicycle and motor vehicle ● Parts of visual or sound signaling equipment, windscreen wipers, defrosters and demisters of a kind used in cycles or motor vehicles ● Windscreen wipers, defrosters and demisters, Sealed beam lamp units, Other lamps for automobiles. ● Completely Built Unit (CBU)of vehiclesfalling under heading 8702, 8704 ● Chassis fitted with engines, for the motor vehicles of headings 8701 to 8705 ● Bodies (including cabs), for the motor vehicles of headings 8701 to 8705 Similarly, to support domestic industry, Customs Duty has been proposed to be reduced on certain raw materials and capital goods as follows:

● Naphtha ● Methyloxirane (Propylene Oxide) ● Ethylene dichloride (EDC) ● Raw materials used in manufacture of Preform of Silica: -

a. Silicon Tetra Chloride b. Germanium Tetra Chloride c. Refrigerated Helium Liquid d. Silica Rods e. Silica Tubes

● Wool fibre, Wool Tops ● Inputs for the manufacture of CRGO steel: -

a. MgO coated cold rolled steel coils b. Hot rolled coils c. Cold-rolled MgO coated and annealed steel d. Hot rolled annealed and pickled coils e. Cold rolled full hard

● Amorphous alloy ribbon ● Cobalt mattes and other intermediate products of cobalt metallurgy ● Capital goods used for manufacturing of following electronic items, namely-

a. Populated PCBA b. Camera module of cellular mobile phones c. Charger/Adapter of cellular mobile phone d. crackIAS.comLithium Ion Cell e. Display Module f. Set Top Box g. Compact Camera Module

While Customs duty is imposed on certain electronic goods, now being manufactured in India to promote domestic industry, custom duty on the other hand is removed on certain other capital goods required for manufacture of specified electronic goods.

To encourage export of sports goods, certain items to a certain limit, like foam and pinewood are included in the list of items allowed for duty free import. Similarly, “Export duty is being rationalised on raw and semi-finished leather to provide relief to this sector’ the Minister said.

The Minister said “Defence has an immediate requirement of modernisation and upgradation. This is national priority. For this purpose, import of defence equipment that are not being manufactured in India are being exempted from the basic customs duty.”

GST AND WAY FORWARD

While stating that with introduction of GST, 17 taxes and 13 cesses have become one tax, it also led to transformation of operations wherein a transport truck has started doing two trips in the same time that it was doing one with simplification of operations. She said reduction of GST rates have led to relief of about 92,000 crore rupees per annum.

The Finance Minister stated that free accounting software for preparation of tax returns is being made available to small businesses and a fully automated GST refund module is expected to be implemented soon. She said taxpayer with an annual turnover of less than 5 crores is to file quarterly returns. Electronic invoice details are to be captured in a central system to enable pre-filled taxpayer returns and a simultaneous e-way bill to be generated. These are expected to begin from January, 2020 reducing the compliance burden significantly.

LEGACY DISPUTE RESOLUTION

The Minister proposed a “Legacy Dispute Resolution Scheme that will allow quick closure of litigations.” She said “more than 3.75 lakh crore rupees is blocked in litigations in service tax and excise duties from pre-GST regime.” She urged the trade and business to avail this opportunity of dispute resolution scheme to be called as Sabka Vishwas Legacy Dispute Resolution Scheme, 2019. This scheme is to be notified in due course allows persons discharged under it not liable for prosecution.

CUSTOMS VIOLATIONS

The Minister also proposed certain amendments to the Customs Act to prevent certain bogus entities from resorting to unfair practices to benefit from export incentives. Provisions to make violations involving duty free scripts and drawback facility of over 50 lakh rupees cognizable and non-bailable offence are being made in the Customs Act. The amendment to the Customs Act, 1962 proposes to introduce provision for verification of Aadhar or any other identitycrackIAS.com to prevent smuggling. It also empowers customs authorities to arrest a person who has committed an offence outside India.

NBFCs

A provision for allowing all Non-Banking Financial Companies to avail the facility of offering the interest to be taxed in the year in which it is actually received like in the case of Scheduled Banks is to be made. This was announced by the Finance Minister in her Budget Speech today.

INTERNATIONAL FINANCIAL SERVICES CENTRE(IFSC)

Several direct tax incentives including 100% profit-linked deduction under Section 80-LA in any ten-year block within a fifteen-year period has been announced for the International Financial Services Centre (IFSC) in GIFT City. “Exemption from dividend distribution tax from current and accumulated income to companies and mutual funds, exemptions on capital gain to Category-III Alternative Investment Funds (AIF) and interest payment on loan taken from non- residents”, have also been announced for IFSC.

EXCISE ON CIGARETTES

The Finance Minister said as National Calamity and Contingent duty is contested with regard to tobacco products and crude as there is no basic excise duty on these items, a nominal basic excise duty is now proposed to be imposed. Rates for such basic excise duties have been announced as set forth in the Fourth Schedule to the Central Excise Act, 1944.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 INDIA’S 10- POINT ‘VISION FOR THE DECADE’ FLAGGED IN BUDGET 2019-20 Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance India’s 10- point ‘Vision for the Decade’ flagged in Budget 2019-20

India to become a 3 trillion Dollar Economy this year and a 5 trillion Dollar Economy by 2024-25

India requires Investments averaging Rs. 20 lakh crores every year

Gone are the days of policy paralysis and license-quota- control regimes: Finance Minister

Posted On: 05 JUL 2019 1:52PM by PIB Delhi

“Indian economy will become a 3 trillion dollar economy in the current year and is on the path of achieving the Prime Minister’s vision of a 5 trillion dollar economy by 2024-25”, said Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, while presenting the Union Budget 2019-20 in Parliament today. It took over 55 years for the Indian economy to reach 1 trillion dollar and in the last 5 years, the government has added 1 trillion dollar to reach about 2.7 trillion dollar. India is now the sixth largest economy in the world, up from 11th position five years ago, she added.

Beginning her speech on a high note, the Finance Minister termed the recently concluded General Election as an election charged with brimming hope and desire among the citizens of the country for a bright and stable New India. These elections were a stamp of their approval of a performing Government, a Government whose signature was in the last mile delivery, she added.crackIAS.com

Finance Minister stated that between 2014-19, the Government provided a rejuvenated Centre- State dynamic, cooperative federalism, GST Council, a strident commitment to fiscal discipline and set the ball rolling for a New India, planned and assisted by the NITI Aayog. In the last five years, the Government initiated many big reforms in particular, in indirect taxation, bankruptcy, real estate and those in the social sector improving common man’s life. She added that the last mile delivery stood out and the unknown citizen in the nooks of our country stood out with evidence. The Government has shown by its deeds that the principle of “Reform, Perform, Transform” can succeed.

Setting pace for the vision for India in the next decade, the Finance Minister stated that mega programmes and services which were initiated and delivered during the last 5 years will now be further accelerated. The Government plans to simplify procedures, incentivize performance, reduce red-tape and make the best use of technology to achieve the desired goals. “Gone are the days of policy paralysis and license-quota-control regimes. India Inc. are India’s job- creators. They are the nation’s wealth-creators”, she said while emphasizing the substantial role of India’s private industry in growing our economy.

Citing its genesis in the Interim Budget 2019-20 presented in February 2019, the Finance Minister flagged ten points of the Government’s ‘Vision for the Decade’:

● Building physical and social infrastructure;Digital India reaching every sector of the economy;Pollution free India with green Mother Earth and Blue Skies;Make in India with particular emphasis on MSMEs, Start-ups, Defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices;Water, water management, clean Rivers;Blue Economy;Space programmes. Gaganyan, Chandrayan and Satellite programmes;Self-sufficiency and export of food-grains, pulses, oilseeds, fruits and vegetables;Healthy society – Ayushman Bharat, well-nourished women & children. Safety of citizens;Team India with Jan Bhagidari. Minimum Government Maximum Governance.

Elaborating on the above points, Finance Minister emphasized on an investment-driven growth model to achieve the goal of 5 Trillion dollar economy. She stated that the Government recognizes that investment-driven growth requires access to low cost capital. It is estimated that India requires investments averaging Rs. 20 lakh crores every year (USD 300 billion a year).

Further, the Finance Minister stated that it is estimated that Railway Infrastructure would need an investment of Rs. 50 lakh crores between 2018-2030. She proposed to use Public-Private Partnership to unleash faster development and completion of projects and to make available a blueprint this year for developing National Highway Grid, gas grids, water grids, i-ways, and regional airports. crackIAS.com Focusing on unlocking the true potential of Public Sector Undertakings, Finance Minister said that strategic disinvestment of select CPSEs would continue to remain a priority of this Government, along with consolidation of PSUs in the non-financial space. Government is considering, in case where the Undertaking is still to be retained in Government control, to go below 51% to an appropriate level on case to case basis. Government is setting an enhanced target of Rs. 1,05,000 crore of disinvestment revenue for the financial year 2019-20, she added.

To prepare India’s youth to also take up jobs overseas, Finance Minister said that the Government will increase focus on skillsets needed abroad including language training. Focus would be laid on new-age skills like Artificial Intelligence (AI), Internet of Things, Big Data, 3D Printing, Virtual Reality and Robotics, which are valued highly both within and outside the country, and offer much higher remuneration.

Further in her Budget Speech, Finance Minister also proposed to start a television programme within the DD bouquet of channels exclusively for start-ups, discussing issues affecting their growth, matchmaking with venture capitalists and for funding and tax planning.

Regarding Industry sector, Finance Minister stated that under the Interest Subvention Scheme for MSMEs, Rs. 350 crore has been allocated for FY 2019-20 for 2% interest subvention for all GST registered MSMEs, on fresh or incremental loans. Government will create a payment platform for MSMEs to enable filing of bills and payment thereof on the platform itself. Further, the Government is proposing to streamline multiple labour laws into a set of four labour codes, which is expected to reduce disputes, she added.

Summing up the vision of the Government, Smt. Sitharaman stated, “Marking 75 years of our Independence, We should place emphasis on our ‘Duty’ towards India, without undermining ‘Rights’.”

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crackIAS.comEND Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 POLICY MEASURES TO PROMOTE GROWTH AND EMPLOYMENT GENERATION IN INDIAN ECONOMY Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Policy Measures to promote Growth and Employment Generation in Indian Economy

Posted On: 05 JUL 2019 1:50PM by PIB Delhi

The Union Budget 2019-20 presented today by Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, lays down a vision for India becoming a 5 trillion dollar economy by 2024-25. Investment-driven growth and employment generation form the cornerstone of this vision.

The Tax Policy Measures in this direction are as under:

● Profit-linked deduction was introduced for start-ups. ● The scope of investment-linked deduction was broadened by including certain new sectors, including infrastructure, which are critical to growth. ● InvestmentcrackIAS.com allowance and higher additional depreciation was provided for undertakings set up in backward regions of states of Andhra Pradesh, Bihar, Telangana and West Bengal. ● Incentive for employment generation was broadened and the conditions for eligibility to claim the incentive were relaxed. ● Benefit was provided for computation of MAT liability and carry forward of loss for companies under Insolvency and Bankruptcy code (IBC). ● Safe Harbour provisions were further liberalised to align with industry standards. ● Scope of domestic transfer pricing provisions was restricted only for transactions between enterprises having profit-linked deductions. ● Pass through status was provided to Category I & II Alternative Investment Funds (AIFs). ● The time period for carry forward of MAT credit was increased from 10 to 15 years.

Above initiatives were proposed as part of a framework for kick-starting the virtuous cycle of domestic and foreign investments. “We need to invest heavily in infrastructure, in digital economy and on job creation in small and medium firms”, the Finance Minister stated. The common man’s life changed through MUDRA loans to help him do his business.

Government has announced its intention to invest Rs.100 lakh crores in infrastructure over the next five years, the Finance Minister stated. The massive push given to all forms of physical connectivity through Pradhan Mantri Gram Sadak Yojana, industrial corridors, dedicated freight corridors, Bhartamala and Sagarmala projects, Jal Marg Vikas and UDAN Schemes would give the required boost to the economy.

Measures to enhance the Sources of Capital for Infrastructure Financing:

● A Credit Guarantee Enhancement Corporation to be set up in 2019-2020. ● An action plan to deepen the market for long term bonds with specific focus on infrastructure sector, to be put in place. ● Proposal to permit investments made by FIIs/FPIs in debt securities issued by IDF-NBFCs to be transferred/sold to any domestic investor within the specified lock-in period. crackIAS.com “We shall further simplify procedures, incentivize performance, reduce red-tape and make the best use of technology. Big structural reforms in particular, in indirect taxation, bankruptcy and real estate carried out”, the Finance Minister stated. The number of patents issued more than trebled in 2017-18 as against the number in 2014.

The ‘Vision for the Next Decade’ laid down in the Budget document focuses upon building physical and social infrastructure; Make in India with particular emphasis on MSMEs, Start-ups, defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices, among others, emphasize on employment generation and growth.

Under the Interest Subvention Scheme for MSMEs, Rs. 350 crore has been allocated for FY 2019-20 for 2% interest subvention for all GST registered MSMEs, on fresh or incremental loans. Government would create a payment platform for MSMEs to enable filing of bills and payment thereof on the platform itself to eliminate delays in government payments. Further, Government would extend the pension benefit to about three crore retail traders & small shopkeepers whose annual turnover is less than Rs.1.5 crore under a new Scheme namely Pradhan Mantri Karam Yogi Maandhan Scheme.

The Budget proposes setting up 100 new clusters during 2019-20 envisioned which should enable 50,000 artisans to join the economic value chain under the Scheme of Fund for Upgradation and Regeneration of Traditional Industries’ (SFURTI). Further, 10,000 new Farmer Producer Organizations are proposed to be formed, to ensure economies of scale for farmers, under the Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’ (ASPIRE).

To address Human Resource creation, the Budget proposes a New National Education Policy which would bring major changes in both school and higher education, better governance systems and greater focus on research and innovation. Further, there is a proposal to establish a National Research Foundation (NRF) to fund, coordinate and promote research in the country.

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Finance Minister stated that an amount of Rs. 400 crore is proposed to be provided under the head, “World Class Institutions”, for FY 2019-20, more than three times the revised estimates for the previous year.

Other measures that would give a boost to the economy and employment generation would include a proposal to streamline multiple labour laws into a set of four labour codes to ensure standardization and streamlining of registration and filing of returns. Further, there is also a proposal to start a television programme within the DD bouquet of channels exclusively for startups, Smt. Sitharaman added.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 DD CHANNEL FOR START-UPS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Commerce & Industry DD channel for start-ups

Posted On: 05 JUL 2019 1:48PM by PIB Delhi

The Union Minster of Finance and Corporate Affairs, Nirmala Sitharaman said that the Government proposes to start a channel within the DD bouquet of channels exclusively for startups.

Presenting the Union Budget 2019-20 in Parliament today, she said that the channel will serve as a platform for promoting start-ups, discussing issues affecting their growth, matchmaking with venture capitalists and funding and tax planning. She said that this channel will be designed and executed by start-ups themselves.

The condition for carry forward and set off of losses in cases of eligible start-ups is proposed to be relaxed enabling them to carry forward their losses on satisfaction of any one of the two conditions - continuity of 51% shareholding/voting power of continuity of 100% of original shareholders. Further, the provision which allows exemption of capital gains from sale of residential property on investment of net consideration in equity shares of eligible start-up shall be extended by 2 years. The benefit will be available for sale of residential property on or before 31st March, 2021. The condition of minimum holding of 50% of share capital or voting rights in the start-up is proposed to be relaxed to 25%. The condition restricting transfer of new asset being computer or computer software is also proposed to be relaxed from the current 5 years to 3 years.

Start-ups in India are taking firm roots and their continued growth needs to be encouraged. To resolve the so-called ‘angel tax’ issue, the start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums. The issue of establishing identity of the investor and sourcecrackIAS.com of his funds will be resolved by putting in place a mechanism of e-verification. With this, funds raised by start-ups will not require any kind of scrutiny from the Income Tax Department, she informed.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 UNION BUDGET PROPOSES NUMBER OF MEASURES TO ENHANCE THE SOURCES OF CAPITAL FOR INFRASTRUCTURE FINANCING Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Union Budget proposes number of measures to enhance the sources of capital for infrastructure financing

Credit Guarantee Enhancement Corporation to be set up in 2019-20

An action plan to deepen the market for long term bonds to be put in place

Posted On: 05 JUL 2019 1:47PM by PIB Delhi

A Credit Guarantee Enhancement Corporation is to be set up in 2019-20. This was announced by the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, while presenting the Union Budget 2019-20 in Parliament today.

The Finance Minister further said that we recognize that investment-driven growth requires access to low cost capital. It is estimated that India requires investments averaging Rs. 20 lakh crore every year (USD 300 billion a year).

The Finance Minister further added that a number of measures are proposed to enhance the sources of capital for infrastructure financing, which are as follows;

● A Credit Guarantee Enhancement Corporation for which regulations have been notified by the RBI, will be set up in 2019-20. ● An action plan to deepen the market for long term bonds including for deepening markets for corporate bond repos, credit default swaps etc., with specific focus on infrastructure sector, will be put in place. ● TocrackIAS.com permit investments made by FIIs/FPIs in debt securities issued by IDF-NBFCs to be transferred/sold to any domestic investor within the specified lock-in period.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 TAX RATES FOR INDIVIDUALS HAVING TAXABLE INCOME FROM RS. 2 CR - 5 CR AND RS. 5 CR & ABOVE TO BE INCREASED BY AROUND 3 % AND 7 % RESPECTIVELY Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Tax rates for individuals having taxable income from Rs. 2 cr - 5 cr and Rs. 5 cr & above to be increased by around 3 % and 7 % respectively

Direct Tax revenue increases by over 78 % in FY2018-19 from FY 2013-14; rose to Rs. 11.37 lakh crore from Rs. 6.38 lakh crore

Relief proposed in Levy of Securities Transaction Tax (STT)

Additional deduction of up to Rs.1.5 lakh for interest paid on loans for purchase of affordable house

Additional Income Tax deduction of Rs. 1.5 lakh on interest paid on loans taken to purchase Electric Vehicles

Posted On: 05 JUL 2019 1:47PM by PIB Delhi

The effective tax rates for the higher income group individuals having taxable income from Rs. 2 crore to Rs. 5 crore and Rs. 5 crore and above is proposed to be increased by around 3 percent and 7 percent respectively. Presenting the General Budget 2019-20 in the Parliament today, Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman said, “In view of rising incomecrackIAS.com levels, those in the highest income bracket need to contribute more to the Nation’s development”. Thanking the taxpayers, she said that they are playing a major role in Nation building.

Referring to several measures taken in the past to alleviate the tax burden on small and medium income earners, the Minister said, “Those having annual income upto Rs. 5 lakh are not required to pay any income tax”. This includes self-employed as well as small traders, salary earners, and senior citizens, she added.

Tax Revenue Up Due to slew of efforts taken by the Government, the direct tax revenue has significantly increased by over 78 percent from Rs. 6.38 lakh crore in Financial Year 2013-14 to around Rs. 11.37 lakh crore in Financial Year 2018-19. The Minister stated that the increase has been significant in last couple of years. The Direct Tax revenue grew by 19.13 percent to Rs. 10, 02, 741 crore in 2017-18 (Rs. 8, 41, 713 crore in 2016-17) and by 13.46 percent in 2018-19. The number of taxpayers also increased by approximately 48 percent over the period 2013-14 to 2017-18, from 5.71 crore taxpayers to 8.4 crore taxpayers, due to various initiatives and taxpayer outreach programmes undertaken by the Government.

Relief in Levy of Securities Transaction Tax (STT)

In her speech, the Finance Minister proposed to give relief in levy of Securities Transaction Tax by restricting it only to the difference between settlement and strike price in case of exercise of options.

Additional Deduction of Interest for Affordable Housing

In order to provide a further impetus to affordable housing, the Minister proposed to allow an additional deduction of up to Rs.1,50,000/- for interest paid on loans borrowed up to 31st March, 2020 for purchase of an affordable house valued up to Rs. 45 lakh. Therefore, a person purchasing an affordable house will now get an enhanced interest deduction up to Rs. 3.5 lakh. This will translate into a benefit of around Rs.7 lakh to the middle class home-buyers over their loan period of 15 years.

For realisation of the goal of ‘Housing for All’ and affordable housing, a tax holiday has already been provided on the profits earned by developers of affordable housing. Also, interest paid on housing loans is allowed as a deduction to the extent of Rs. 2 lakh in respect of self-occupied property.

Promoting Electric Vehicles

To make Electric Vehicles affordable to consumers, the Minister said that the Government will provide additional income tax deduction of Rs. 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. This amounts to a benefit of around Rs. 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicle. Considering India’s large consumer base, the she stated, “We aim to leapfrog and envision India as a global hub of manufacturing of Electric Vehicles. Inclusion of Solar storage batteries and charging infrastructure in the above scheme will boost our efforts”. The Government has already moved GST council to lower the GST rate on electric vehicles from 12% to 5%, she added.

Level Playing Field for Non Banking Financial Companies (NBFCs) RecognisingcrackIAS.com the increasingly important role of NBFCs in India’s financial system and to provide level playing field, the Finance Minister has proposed to tax the interest on bad or doubtful debts in the year in which it is actually received. Presently this is allowed for scheduled banks, public financial institutions, state financial corporations, state industrial investment corporations, cooperative banks and certain public companies like housing finance companies.

Measures to promote the International Financial Services Centre (IFSC)

To promote IFSC in GIFT City, the Finance Minister proposed to further provide several direct tax incentives to an IFSC including 100 percent profit-linked deduction under section 80-LA in any ten-year block within a fifteen-year period, exemption from dividend distribution tax from current and accumulated income to companies and mutual funds, exemptions on capital gain to Category-III AIF and interest payment on loan taken from non-residents.

Compulsory Filing of Return

The General Budget 2019-20 proposes to make return filing compulsory for persons, who have deposited more than Rs. 1 crore in a current account in a year, or who have expended more than Rs. 2 lakh on foreign travel or more than Rs. 1 lakh on electricity consumption in a year or who fulfils the prescribed conditions, in order to ensure that persons who enter into high value transactions also furnish return of income. It is also proposes to provide that a person whose income becomes lower than maximum amount not chargeable to tax due to claim of rollover benefit of capital gains shall also be required to furnish the return.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 NEW SPACE INDIA LTD. INCORPORATED AS A NEW COMMERCIAL ARM OF D/O SPACE: FINANCE MINISTER Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Department of Space New Space India Ltd. incorporated as a new commercial arm of D/o Space: Finance Minister

Company to spearhead commercialization of various space products

Posted On: 05 JUL 2019 1:46PM by PIB Delhi

Presenting the General Budget 2019-20 in the Parliament today, Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman said that a Public Sector Enterprise viz. New Space India Limited (NSIL) has been incorporated as a new commercial arm of Department of Space to tap the benefits of the Research & Development carried out by ISRO.

The Company will spearhead commercialization of various space products including production of launch vehicles, transfer to technologies and marketing of space products. The Minister said that, “India has emerged as a major space power with the technology and ability to launch satellites and other space products at globally low cost. Time has come to harness this ability commercially”.

The Budget Estimates for Department of Space for FY 2019-20 is Rs 12,473.26 crore as compared to the RE of Rs 11,200 crore in FY 2018-19. crackIAS.com Outlay of major schemes:

(in Rs crore)

Schemes 2018-19 (RE) 2019-20 (BE)

Space Technology (including Gaganyan) 6993 8408

Space Applications 1595 1885

INSAT Satellite Systems 1330 884

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 UNION BUDGET PROPOSES MEASURES TO DEEPEN CORPORATE DEBT MARKETS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Union Budget proposes measures to deepen Corporate Debt markets

Government will work with regulators RBI/SEBI to enable stock exchanges to allow AA rated bonds as collaterals

Posted On: 05 JUL 2019 1:45PM by PIB Delhi

A number of measures to further deepen bond markets have been proposed by the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, while presenting the Union Budget 2019-20 in Parliament today.

The Finance Minister said, “Corporate Debt markets are crucial for the infrastructure sector. Though the number and value of bond issuances had gone up, there has been a dip in the last two years. The market is skewed in favour of private placement”.

The Finance Minister added that given the need to further deepen bond markets, a number of measures are proposed to be taken up, which are as follows;

● To deepen the Corporate tri-party repo market in Corporate Debt securities, Government will work with regulators RBI/SEBI to enable stock exchanges to allow AA rated bonds as collaterals. ● User-friendliness of trading platforms for corporate bonds will be reviewed, including issues arising-out of capping of ISINs.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 UNION BUDGET ENVISIONS INDIA AS A GLOBAL HUB FOR MANUFACTURING ELECTRIC VEHICLES Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Union Budget envisions India as a global hub for manufacturing electric vehicles

Says inclusion of solar storage batteries and charging infrastructure in the fame scheme will Boost production

Government has sought lowering of GST on electric vehicles from 12% to 5%

Union Budget says government will provide additional income tax deduction of Rs 1.5 Lakh on Interest paid on loans taken to purchase electric vehicles

Posted On: 05 JUL 2019 1:45PM by PIB Delhi

The Union Budget has outlined various proposals for giving a boost to manufacturing of electric vehicles and developing India as a global hub for the same.

In her maiden budget speech in Parliament today, the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman said that Under Phase-II of the FAME Scheme, only advanced battery and registered e-vehicles will be incentivized, with greater emphasis on providing affordable and environment friendly public transportation options for the common man. The main objective of the Scheme is to encourage faster adoption of electric vehicles through upfront incentive on purchase of such vehicles and also by establishing the necessary charging infrastructure for the same. Phase II of FAME has an outlay of Rs10,000 crore for a period of 3 years, and has commenced from 1st April, 2019. The FinancecrackIAS.com Minister has further said that the inclusion of solar storage batteries and charging infrastructure in the FAME scheme will give a boost to manufacturing, which is needed for India to leapfrog and become a global hub for manufacturing of these vehicles.

The Finance Minister also said that the Government has already moved GST council to lower the GST rate on electric vehicles from 12% to 5%. Also to make electric vehicles affordable to consumers, the Union Budget says the government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. This amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicle. To further incentivise e-mobility, customs duty is being exempted on certain parts of electric vehicles.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 UNION BUDGET PROPOSES CREATION OF A SOCIAL STOCK EXCHANGE- UNDER THE REGULATORY AMBIT OF SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) FOR LISTING SOCIAL ENTERPRISES AND VOLUNTARY ORGANIZATIONS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Union Budget proposes creation of a social stock exchange- under the regulatory ambit of Securities and Exchange Board of India (SEBI) for listing social enterprises and voluntary organizations

Government to take up necessary measures for inter- operability of RBI depositories and SEBI depositories

Posted On: 05 JUL 2019 1:44PM by PIB Delhi

Creation of a social stock exchange has been proposed by the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, while presenting the Union Budget 2019-20 in Parliament today.

The Finance Minister said that it is time to take our capital markets closer to the masses and meet various social welfare objectives related to inclusive growth and financial inclusion. The Minister further stated that “I propose to initiate steps towards creating an electronic fund raising platform – a social stock exchange - under the regulatory ambit of Securities and Exchange Board of India (SEBI) for listing social enterprises and voluntary organizations working for the realization of a social welfare objective so that they can raise capital as equity, debt or as units like a mutual fund”.

The Finance Minister added that it is important to get retail investors to invest in treasury bills and securities issued by the Government. Efforts made by the Reserve Bank will need to be supplemented with further institutional development using stock exchanges. For this purpose, inter-operabilitycrackIAS.com of RBI depositories and SEBI depositories would be necessary to bring about seamless transfer of treasury bills and government securities between RBI and Depository ledgers and for enabling this. The Government will take up necessary measures in this regard in consultation with RBI and SEBI.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 PUBLIC SECTOR BANKS PROPOSED TO BE PROVIDED RS 70,000 CRORE CAPITAL TO BOOST CREDIT Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Public Sector Banks proposed to be provided Rs 70,000 crore capital to boost credit

Government will provide one time six months' partial credit guarantee to Public Sector Banks for first loss of up to 10%

Appropriate proposals for strengthening regulatory authority of RBI over NBFCs being placed in Finance Bill

Posted On: 05 JUL 2019 1:43PM by PIB Delhi

Public Sector Banks are to be further provided Rs 70,000 crore capital to boost credit for a strong impetus to the economy. To further improve ease of living, they will leverage technology, offering online personal loans and doorstep banking, and enabling customers of one Public Sector Bank to access services across all Public Sector Banks. While presenting Union Budget 2019-20 in Parliament today, the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman informed that in addition, Government will initiate steps to empower accountholders to remedy the current situation in which they do not have control over deposit of cash by others in their accounts. Reforms will also be undertaken to strengthen governance in Public Sector Banks.

Financial gains from cleaning of the banking system are now amply visible. The NPAs of commercial banks have reduced by over Rs 1 lakh crore over the last year, record recovery of over Rs 4 lakh crore due to IBC and other measures has been effected over the last four years, provisioncrackIAS.com coverage ratio is now at its highest in seven years, and domestic credit growth has risen to 13.8%.

She further informed that, the Government has smoothly carried, out consolidation, reducing the number of Public Sector Banks by eight. At the same time, as many as six Public Sector Banks have been enabled to come out of Prompt Corrective Action framework.

Non-Banking Financial Companies (NBFCs)

The Finance Minister informed that Non-Banking Financial Companies (NBFCs) are playing an extremely important role in sustaining consumption demand as well as capital formation in small and medium industrial segment. NBFCs that are fundamentally sound should continue to get funding from banks and mutual funds without being unduly risk averse. For purchase of high- rated pooled assets of financially sound NBFCs, amounting to a total of Rupees one lakh crore during the current financial year, Government will provide one time six months' partial credit guarantee to Public Sector Banks for first loss of up to 10%. Further, Reserve Bank of India (RBI) is the regulator for NBFCs. However, RBI has limited regulatory authority over NBFCs. Appropriate proposals for strengthening the regulatory authority of RBI over NBFCs are being placed in the Finance Bill.

She said that NBFCs which do public placement of debt have to maintain a Debenture Redemption Reserve (DRR) and in addition, a special reserve as required by RBI, has also to be maintained. To allow NBFCs to raise funds in public issues, the requirement of creating a DRR, which is currently applicable for only public issues as private placements are exempt, will be done away with. To bring more participants, especially NBFCs, not registered as NBFCs- Factor, on the TReDS platform, amendment in the Factoring Regulation Act, 2011 is necessary and steps will be taken to allow all NBFCs to directly participate on the TReDS platform.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 PROVIDING ACCESS TO SAFE AND ADEQUATE DRINKING WATER TO ALL INDIANS IS A PRIORITY OF THE GOVERNMENT Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Providing access to safe and adequate drinking water to all Indians is a priority of the Government

Jal Jeevan Mission to ensure HarGharJal (piped water supply) to all rural households by 2024

New Ministry-“Jal Shakti Mantralaya” to manage water resources and water supply in an integrated and holistic manner with the State Governments

Posted On: 05 JUL 2019 1:43PM by PIB Delhi

The Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman said that ensuring India’s water security and providing access to safe and adequate drinking water to all Indians is a priority of the Government. While, presenting the Union Budget 2019-20 in the Parliament today, Smt. Sitharaman said that a major step in this direction has been the constitution of the Jal Shakti Mantralaya, integrating the Ministry of Water Resources, River Development and Ganga Rejuvenation and Ministry of Drinking Water and Sanitation. This new Mantralaya will look at the management of our water resources and water supply in an integrated and holistic manner, and will work with States to ensure HarGharJal – (piped water supply) to all rural households by 2024 under the Jal Jeevan Mission.

This Mission, under the Department of Drinking Water and Sanitation, will focus on integrated demand and supply side management of water at the local level, including creation of local infrastructure for source sustainability like rainwater harvesting, groundwater recharge and managementcrackIAS.com of household wastewater for reuse in agriculture. The Jal Jeevan Mission will converge with other Central and State Government Schemes to achieve its objectives of sustainable water supply management across the country.

The Finance Minister informed that government has identified 1592 Blocks which are critical and over exploited, spread across 256 Districts for the Jal Shakti Abhiyan. Besides using funds available under various Schemes, the Government will also explore possibility of using additional funds available under the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) for this purpose.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 ESTIMATED SAVINGS/BENEFITS OF RS. 59,599 CRORE UPTO MARCH, 2019 UNDER ‘PAHAL’ SCHEME Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Petroleum & Natural Gas Estimated savings/benefits of Rs. 59,599 crore upto March, 2019 under ‘PAHAL’ scheme

Posted On: 05 JUL 2019 1:42PM by PIB Delhi

There have been estimated savings/benefits of Rs. 59,599 crore for the Government upto March, 2019 under the ‘PAHAL’ scheme of the Ministry of Petroleum and Natural Gas. The statement of fiscal policy, as required under the Fiscal Responsibility and Budget Management Act, 2003, laid in Parliament along with other budget documents by the Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman today, states that 4.23 crore duplicate, fake/non-existent, inactive LPG connections have been eliminated under this DBT scheme. Under the ‘PAHAL’ scheme, beneficiaries buy LPG cylinders at market rate and subsequently received subsidy directly in their bank accounts. Direct Benefit Transfer is a landmark initiative of the Government to ensure that benefits under various welfare and subsidy programmes of the country reach eligible and rightful beneficiaries. The document states that in addition, there are 1.86 crore non-subsidised LPG consumers, including 1.03 crore ‘Give it up’ consumers.

On the issue of Direct Benefit Transfer in PDS kerosene, the statements of Fiscal Policy indicate that till date, 12 State Governments/UTs have voluntarily surrendered their PDS kerosene allocations under DBTK Scheme. Eight State Governments/UTs have already cut down their PDS kerosene allocation to Nil. There has been an overall reduction of 12% for the year 2018-19 in comparison to the allocation of 2017-18.

The Budget Estimates provide an amount of Rs. 37478 crore as Petroleum subsidy for the 2019-20, compared to Rs. 24833 crore in revised estimates of 2018-19. Out of the above, Rs. 32989 crore are earmarked for LPG subsidy while Rs. 4489 crore have been allocated for kerosene subsidy.

*****

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-06 GOVERNMENT SETS ENHANCED TARGET OF RS 1,05,000 CRORE OF DISINVESTMENT DURING 2019-20 Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Ministry of Finance Government sets enhanced target of Rs 1,05,000 crore of disinvestment during 2019-20

Strategic disinvestment of Air India proposed to be reinitiated

More CPSEs proposed for strategic participation by private sector

Posted On: 05 JUL 2019 1:42PM by PIB Delhi

Government is setting an enhanced target of Rs 1,05,000 crore of disinvestment receipts for the financial year 2019-20 said the Union Minister of Finance & Corporate Affairs Smt. Nirmala Sitharaman while presenting the Union Budget 2019-20 in Parliament today. She further informed that Government will undertake strategic sale of PSUs and continue to do consolidation of PSUs in the non-financial space as well.

She informed that the Government has been following the policy of disinvestment in non- financial public sector undertakings maintaining Government stake not to go below 51%. Government is considering, in case where the Undertaking is still to be retained in Government control, to go below 51% to an appropriate level on case to case basis. Government has also decided to modify present policy of retaining 51% Government stake to retaining 51% stake inclusive of the stake of Government controlled institutions.

The Finance Minister said that “strategic disinvestment of select CPSEs would continue to remain a priority of this Government. In view of current macro-economic parameters, Government would not only reinitiate the process of strategic disinvestment of Air India, but would offer more CPSEs for strategic participation by the private sector.” crackIAS.com ******

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crackIAS.com Source : www.economictimes.indiatimes.com Date : 2019-07-06 VIEW: OPENING THE GATES FOR A FOREIGN-FUNDED INDIA GROWTH Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Foreign Capital, Foreign Trade & BOP

By Abheek Barua, Chief Economist, HDFC Bank

Modi government 2.0’s first budget recognises a critical fact — domestic savings are inadequate to fund the 8%-plus real annual growth in GDP needed to take the economy to the $5 trillion target over the next five years. A lot more foreign savings need to be brought in more aggressively. The most important step in this direction is the decision to finally break the taboo against the sovereign government seeking funds abroad. This could be the clichéd gamechanger for Indian borrowers abroad. While GoI may actually borrow a small amount in line with its conservative external debt management practices there could be significant ‘externalities’.

A sovereign bond issue would help set a clear benchmark for other external bond issuances and is likely to bring borrowing costs down across the board for Indian companies as well as increase the appetite for Indian debt paper. Efforts like the possibility of upping the investment limits in media and aviation, easing local sourcing norms for single-brand retailers, and the merger of the NRI-portfolio investment and the foreign portfolio investment route, all seem to be a part of a cohesive strategy to get foreigners to fund India’s growth. There is also a clear effort to improve capital market mechanisms to ensure that the sluices are unclogged.

There is some effort to address some of the immediate growth bottlenecks. The Rs 70,000 crore bank recapitalisation for PSBs is certainly more than what most analysts expected. This, coupled with the credit guarantee scheme, could ease some of the credit constraints that both consumers and businesses are facing and revive demand.

What are the problems with the budget? For one, there is need for clarity on a number of things. Dividends and profits from PSUs and GoI undertakings are forecasted to be a whopping Rs 1,63,000 crore. The bulk of this comes from RBI that is expected to pay Rs 90,000 crore this fiscal year against the Rs 68,000 crore paid last year. One wonders if this contains the transfer of RBI’s surplus reserves on its balance sheet.

The funding of the large banking recapitalisation programme needs to be explained better. While GoI is issuing recapitalisation bonds, the question is whether these bonds will make their way into the markets at all and potentially impact interest rates. Or will it merely be a balance sheet exercise in which bonds are swapped for equity on bank’s balance sheet without seeping into the financial markets at all? crackIAS.com Very broadly, the numbers do add up to yield a fiscal deficit target of 3.3% of GDP. The disinvestment estimates are a tad higher than in February’s interim budget. But a renewed emphasis on strategic sales, a tax-break on retail investments in exchange traded funds of PSUs and, perhaps, a little help at the last minute from the business of cross-holdings, the targets should be met. Solid growth in ‘non-tax’ receipts like disinvestments and dividends compensate for the rather sedate growth in tax collections of around 11% the budget assumes for 2019-20.

Gross market borrowing target for GoI is Rs 7,10,000 crore that will go into the funding the fiscal gap. While it is high in absolute terms, it hasn’t exceeded the amount projected in the interim budget. Besides, that GoI seems to remain committed to fiscal consolidation, and is also seeking new (external) avenues to fund its deficit has triggered a rally in the bond markets. If external fund flows do jump on the bank of some of the new initiatives to invite foreign capital, domestic borrowing costs should remain low. By Abheek Barua, Chief Economist, HDFC Bank

Very broadly, the numbers do add up to yield a fiscal deficit target of 3.3% of GDP. The disinvestmentcrackIAS.com estimates are a tad higher than in February’s interim budget. But a renewed emphasis on strategic sales, a tax-break on retail investments in exchange traded funds of PSUs and, perhaps, a little help at the last minute from the business of cross-holdings, the targets should be met. Solid growth in ‘non-tax’ receipts like disinvestments and dividends compensate for the rather sedate growth in tax collections of around 11% the budget assumes for 2019-20.

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crackIAS.com Source : www.thehindu.com Date : 2019-07-07 AADHAAR CAN BE USED FOR CASH TRANSACTIONS BEYOND RS 50,000 IN PLACE OF PAN: REVENUE SECY Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

The Aadhaar number can now be quoted for cash transactions of more than Rs. 50,000 and for all other purposes where traditionally the income tax PAN number was mandatory, Revenue Secretary Ajay Bhushan Pandey said on Saturday. Banks will make upgrades to allow acceptance of Aadhaar, Mr. Pandey said. This follows the Budget allowing interchange of PAN and Aadhaar for filing taxes.PTI

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END crackIAS.comDownloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.thehindu.com Date : 2019-07-08 NO EASY ANSWER TO ECONOMIC SLOWDOWN Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

The most keenly watched number in the Union Budget is, perhaps, the ratio of fiscal deficit to GDP. A decline in the ratio is cheered by commentators and the markets. An increase is a seen as a setback to reforms.

This year, the number was of greater interest than before thanks to the vision outlined by the Economic Survey for 2018-19 a day earlier. Earlier editions of the Survey had suggested that since private investment was not taking off, there was scope for public investment to pick up the slack.

The latest Survey leaves no room for such ambiguities. It makes clear that private investment is the key driver of growth and jobs. It follows that the government must make fewer demands on public savings so that more of it is available for private investment. In other words, going by the Survey’s analysis, there is no escape from an even sharper focus on fiscal consolidation.

It is astonishing, therefore, that Finance Minister Nirmala Sitharaman’s Budget speech did not even mention the fiscal deficit figure, perhaps a first of sorts! Nor did it make any reference to a path towards the fiscal deficit target of 3.3% of GDP. The omission reflects the limitations imposed on the Finance Minister by trends in revenue and expenditure.

In 2011-12, the fiscal deficit to GDP ratio was 5.9%. By 2015-16, it had declined to 3.9%. Thereafter, it has got stuck at around 3.5%. The Budget for 2018-19 missed the targets set earlier, for 2017-18 and 2018-19. It outlined a revised ‘glide path’ with fiscal deficit targets of 3.3% for 2018-19, 3.1% for 2019-20 and 3% for 2020-21. The Budget for 2019-20 shows that the revised targets too have been missed thus far. The fiscal deficit for 2018-19 has ended up 3.4% of GDP; for 2019-20, it is estimated at 3.3%. It would be a brave soul who believes that the target of 3% for 2020-21 will be met.

Nirmala’s maiden Budget is all about incremental measures

The government has had some success in reining in traditional items of revenue expenditure. Major subsidies (food, fertiliser, petroleum), which used to claim 2% or more of GDP, have stabilised at 1.4% of GDP. But new items of expenditure have emerged. The PM-Kisan scheme, which provides 6,000 for each farming household per year, will cost the government 75,000 crore in 2019-20. The outlays on the National Rural Employment Guarantee Scheme have crept up with each passing year. The bigcrackIAS.com disappointment has been in respect of tax revenues. The expectation following demonetisation and the introduction of the Goods and Services Tax (GST) was that both direct and indirect taxes would rise. As a result, the tax to GDP ratio would move to a different trajectory. The Budget for 2018-19 projected the tax to GDP ratio to rise from 11.6% in 2017-19 to 12.1% in 2018-19 and further to 12.4% in 2019-20. The Budget for 2019-20 dashes these hopes. It estimates the tax to GDP ratio at 11.9% in 2018-19 and 11.7% in 2019-20. The shortfall in GST collections in 2018-19 seems to have set the clock back for fiscal consolidation.

How do we balance the fiscal numbers when the tax to GDP ratio is not coming up to expectations? The Chief Economic Adviser has indicated that the government pins its hopes on capital receipts from disinvestment and the sale of land belonging to the government including public sector enterprises (PSEs). Disinvestment in the sense of strategic sale of PSEs has not really taken off. Much of disinvestment has involved the buying of equity in PSEs by other PSEs. The sale of government land is bound to be a long-drawn-out process and one with fraught with controversy over valuation. Moreover, the sale of government assets to balance the Budget merely defers fiscal problems to the future. It is not the answer to the problem of fiscal sustainability.

In the short term, the government’s hopes must rest on the Bimal Jalan committee on the economic capital framework for the Reserve Bank of India (RBI). The government’s intention in setting up the committee was to see whether some of the RBI’s reserves could be used to mitigate the fiscal position. The report has been submitted, but is yet to be made public. There are reports that the majority does not favour a one-shot transfer to the government, something the government would have liked.

Private investment is constrained not just by the crowding out effect of a high fiscal deficit. Earlier editions of the Economic Survey had identified the twin balance sheet problem, that is, high levels of debt in companies and high non-performing assets of banks, as an important constraint on private investment. The Economic Survey of 2018-19 contends that reducing policy uncertainty can somehow overwhelm the drag caused by the twin balance sheet problem. This is questionable. The broad direction of policy has never been in doubt since the onset of economic reforms, even if the pace has varied in response to the situation on the ground. Had policy uncertainty been a serious issue, it would have surely been reflected in inflows of foreign capital, whether foreign institutional investment or foreign direct investment.

Resolving the twin balance sheet remains the key to reviving private investment. This requires the government to provide adequate capital to public sector banks (PSBs). The Budget’s biggest positive is the allocation of 70,000 crore towards capital for PSBs. However, the allocation is meaningful only if it is spent at one go in the current financial year, not staggered over several years. Only then will banks have enough capital to cover provisions for non-performing assets as well as provide loans to firms.

The Budget also makes an attempt to address the liquidity problem at NBFCs. It provides cover for loss of up to 10% on purchase of pooled assets of NBFCs of a total value of 100,000 crore during the current financial year. Many see it as a government bailout of private NBFCs. The apprehensions may be misplaced. The loss cover is only for six months and is intended only for well-rated portfolios and NBFCs. Banks may be incentivised to buy more of the portfolios of the better NBFCs, not those of the weaker ones.

The government expects that by boosting the flow of credit, the recapitalisation of PSBs will help revive private investment. What if it doesn’t? Should the government continue to focus on a single number for the fiscal deficit target? Or would it be more realistic to accept a broad range, keeping in mind the fall in the inflation rate and the decline in the combined fiscal deficit of the CentrecrackIAS.com and the States? The answer to the economic slowdown may not be as simple as the Survey makes out.

T.T. Ram Mohan is a professor at IIM Ahmedabad. [email protected]

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crackIAS.com Source : www.hindustantimes.com Date : 2019-07-08 OPINION Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

India’s GDP grew at 5.8% in the quarter ending March, 2019, the lowest figure since the 5.3% recorded in the quarter ending March 2014. The GDP growth rate has been coming down continuously since June 2018. A section of academics and commentators, including a former chief economic advisor to the Narendra Modi government, think that the economy is doing worse than what the official statistics tell us. In a paper published last month, Arvind Subramanian argued that official GDP statistics could be overestimating India’s GDP by around 2.5 percentage points. The Prime Minister’s Economic Advisory Council has rejected Subramanian’s arguments in a rejoinder. A final resolution of this debate is not possible unless the government constitutes an independent committee to ascertain the veracity of GDP statistics. The debate on magnitude of the GDP growth rate notwithstanding, both the government and its critiques are in agreement over the fact that the Indian economy is showing unmistakable signs of a slowdown. The question is how does one reverse it? The government, as evident from both Thursday’s Economic Survey and Friday’s Union Budget, believes private investment holds the key. That may well be the case. Still, any credible answer to this has to look at the GDP as a sum of parts and the relative weight of these at a given point in time. Here’s why.

Elementary economics tells us that there are two ways to look at what constitutes the GDP of a country. The first is a sector-wise approach, with agriculture, industry and services being its three major components. The overall GDP growth is a weighted average of share of each sector in the economy and their respective growth rates. The second is an expenditure/ demand classification, with consumption (private and government), investment and net exports as the three major components. While each of these sub-categories matter for present growth, investment is a crucial determinant for future growth as well.

As an economy gets modernised -- economic transformation in economics jargon -- the share of agriculture in GDP comes down and that of industry and services increases. A change in sector- wise distributioncrackIAS.com of GDP, however, is no guarantee of the same for income distribution in an economy. This depends on the share of employment in different sectors of the economy. An example can make it clear. Let us assume that the total GDP of a country in a given year is ~100 with the share of agriculture, industry and services being ~20, ~35 and ~45 respectively. Now, let us assume two different scenarios for the employment share of these sectors. If the employment share of each of these sectors were the same as their GDP share, then the GDP would be equally distributed in the economy. If there were 100 workers in the economy, and all workers in a sector made the same amount of money, then everyone would earn one rupee in this case. Things would be radically different if the employment-income shares of sectors are different. Let us assume that agriculture had half of the workers, while industry and services had a 40% and 10% share in employment. In this case, 50 workers in agriculture would earn 40 paisa each, 40 workers in industry would earn 87 paisa each and the 10 workers employed in services would make Rs 4.5 each. To be sure, a real economy can never have same levels of earnings for all workers in a sector too. For example a CEO, a freshly hired engineer and a porter in a car manufacturing company would have very different earnings.

The Indian economy, for a long time, has been closer to the second example discussed here. Even as the share of agriculture in GDP has come down from 27.3% in 1991 to 14.5% in 2018, its share in employment has been relatively stagnant, having come down from 63% to 44% during this period..

This has basically meant that a large number of workers engaged in agriculture in the Indian economy have much less incomes, and hence purchasing power, than their peers engaged in nonagricultural activities. Why should distribution of purchasing power concern a discussion on economic growth?

It matters because purchasing power is an important determinant of how much of what is sold, and, to a large extent, produced in an economy. For instance, India’s benchmark inflation measure, Consumer Price Index (CPI) assigns a much higher weightage to food items than that of a developed country such as the US. Inflation indices are representative of the average demand from a household in an economy. This means that nonfood items have a more broad- based demand, and hence market, in the US than in India.

The higher share of food items in average demand is also a reflection of lower overall incomes in an economy. As is to be expected, the potential for value addition (income generation) in food items is much less than non-food items. This means that an economy where food items have a greater share in average spending will be making more of low value addition goods than an economy with a higher share of average non-food demand. For an economy like India, a big boost in demand for non-food items, especially of the high value kind, can generate big tailwinds for overall GDP growth by increasing their production. It is for this reason that developments such as deceleration in automobile sales, which has what has been happening in India in the recent period, are seen with concern -- they hit production in high income generating sectors.

The discussion so far allows us to bring our focus to the demand side break-up of GDP. If consumption demand, especially for automobiles rather than food, is slowing then it is a double whammy for GDP growth. This is because it affects consumption demand in the current period and investment demand in the future. Investment demand is adversely affected because an entrepreneur, who is not being able to sell even current output, is unlikely to have, and therefore put more money for increasing or improving production. To becrackIAS.com sure, domestic demand is not the only avenue for GDP growth. A country can always make products and sell them in foreign markets, even if there are no buyers at home. The positive impact of exports on a country’s income is offset by imports, which add to another country’s demand. However, there are two important limitations to exploiting this as a driver for growth. A country can be import dependent for critical resources such as oil, which can lead to an ever increasing import bill, and hence declining net exports, as incomes increase. India is a good example of this due to its dependence on oil-imports. The other important challenge comes from the nature of the domestic market. Normally, producers first start their businesses in the domestic market and then enter the export markets. Therefore a country which does not have a broad based market for high value products, and hence lack of domestic expertise for manufacturing such products, is unlikely to reap success in exporting such products as well. This constraint can be navigated when a foreign entrepreneur brings such technical knowhow via the foreign direct investment (FDI) route. This explains why developing economies such as India are always keen on promoting FDI. It also explains why finance minister Niramala Sitharaman said in her budget speech that India would seek to attract technology majors to come in and set up factories to make new-age products such as Electric vehicles, solar equipment and batteries.

The FDI route has its own limitations, though. A big-ticket FDI will only materialise if the investor hopes to capture a big share of the domestic or foreign market. With global growth slowing, demand in foreign markets is likely to lose pace. Global exports have in any case been growing at a slower pace than before the 2008 financial crisis. The slowdown in global export growth post-2008 has affected India disproportionately, which can be seen from the fact that India’s export growth has come down significantly after this period. If the slowdown in global exports were to continue, India would continue to face a squeeze on an important driver of economic growth in the near future.

For a country like India, where the domestic market is constrained due to many workers having low incomes, domestic market growth is limited to selected goods. Mobile phones in the recent period are one such example in India. However, not all FDI is an unambiguous blessing. For example, if a Chinese phone manufacturer were to set up its final assembly plant in India, and import most components for making these phones, the net export impact would be limited for the Indian economy. Such an FDI will also kill the possibility of developing indigenous entrepreneurs in these sectors.

The problems listed here are much easier to discuss than solve. Most of these are also similar to what can be termed a vicious cycle. If mass incomes are lower, there won’t be enough demand for high value food items, which would restrict domestic production and knowledge creation about producing these and hence prevent the country from becoming a successful exporter of these. It is naive to think that all these issues can all be solved immediately. Politics also plays it part. For example, farmers’ incomes would improve if food prices in India were to become higher. But this would mean an extra burden on most other Indians, who spend a large share of their earnings on food.

The key to successful economic transformation lies in having a holistic picture about the challenges facing the economy and then synchronising specific policy responses with the right opportunities for making these interventions.

Back-to-back decisive victories for Narendra Modi have brought an element of continuity for the present regime in the country. This merits that the evaluation of its economic performance should also be done on these long-term parameters rather than just quarterly or even annual economic statistics. First Published:crackIAS.com Jul 07, 2019 11:38 IST

END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.economictimes.indiatimes.com Date : 2019-07-08 BUDGET 2019: VISA, MASTERCARD BRACE FOR SERIOUS BLOW AFTER SITHARAMAN'S E-PAYMENT PUSH Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

MUMBAI: The government's move to do away with bank charges on electronic payments for businesses with an annual turnover of Rs 50 crore could hit Mastercard and Visa hard as merchants will now find it more profitable to accept UPI and other local e-payments.

Large retailers (with a turnover of over Rs 50 crore) are the mainstay of retail credit card transactions. These retailers have been paying fees by way of merchant discount rate (MDR) of close to 2%.

The finance minister Nirmala Sitharaman in her budget said that it would be mandatory for such large companies to provide their customers with low-cost electronic payment options. These include Bhim UPI (unified payments interface), UPI-QR Code, Aadhaar Pay, certain debit cards, NEFT (national electronic funds transfer), and RTGS (real time gross settlement).

The budget also ensures that the customer does not pay a fee for using any of these channels and the charges are borne by banks and the RBI.

This means that the business now has an electronic payment channel that will improve its margin by 2%.

The new section, 269SU, of the Income-tax Act requiring large businesses to provide a facility for acceptance of payment through electronic modes will come into effect later this year from November 1, 2019.

"The move will lead to an increase in the UPI-based to onboard them by the likes of PhonePe, Paytm and Google Pay. RBI wants these companies to deploy BharatQR, which can be accessed by any bank customer.

According to Anand Ramachandran, CFO, Ingenico ePayments India, the two moves - no MDR for businesses above Rs 50 crore turnover and 2% tax deduction on cash withdrawals over Rs 1 crore per annum are a further nudge to industry to lower the entry barrier to digital payments.

"The proposal to set up a payment platform for MSMEs for online presentation and payment of invoices will not only help cash flow but also give a huge boost to digital payments, as the entire supply chain will now be incentivised to go digital. Also, the platform opens up possibilities for accessingcrackIAS.com lower cost funding," Ramachandran added.

Change on the cards? payments from customers to merchants and this might probably lead to some migration from cards to merchants, which could in the long term impact card volumes and influence behavioural change of merchants towards UPI," said Rajeev Agarwal, founder of Innovity Payments, a firm that sets up payment infrastructure for retail.

The choice of words 'certain debit cards' in the speech has led many to believe that the government might be seeking to differentiate between Rupay and other payment cards like Visa and Mastercard.

Payment operators are upset that there is no incentive for payment companies providing acceptance infrastructure. Some players feel that the government may have chosen to ignore the small businesses given that there is a lot of competition. MUMBAI: The government's move to do away with bank charges on electronic payments for businesses with an annual turnover of Rs 50 crore could hit Mastercard and Visa hard as merchants will now find it more profitable to accept UPI and other local e-payments.

Large retailers (with a turnover of over Rs 50 crore) are the mainstay of retail credit card transactions. These retailers have been paying fees by way of merchant discount rate (MDR) of close to 2%.

The budget also ensures that the customer does not pay a fee for using any of these channels and the charges are borne by banks and the RBI.

This means that the business now has an electronic payment channel that will improve its margin by 2%.

Change on the cards? payments from customers to merchants and this might probably lead to some migration from cardscrackIAS.com to merchants, which could in the long term impact card volumes and influence behavioural change of merchants towards UPI," said Rajeev Agarwal, founder of Innovity Payments, a firm that sets up payment infrastructure for retail.

The choice of words 'certain debit cards' in the speech has led many to believe that the government might be seeking to differentiate between Rupay and other payment cards like Visa and Mastercard.

crackIAS.com Source : www.thehindu.com Date : 2019-07-09 RBI BOARD FINALISES ‘UTKARSH 2022’ Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

The Reserve Bank of India (RBI) board, which met in New Delhi, finalised a three- year roadmap to improve regulation and supervision, among other functions of the central bank.

This medium term strategy — named Utkarsh 2022 — is in line with the global central banks’ plan to strengthen the regulatory and supervisory mechanism, sources aware of the board meeting told The Hindu.

“It is a three-year road map for medium term objective to be achieved for improving regulation, supervision of the central bank,” said a source.

“Worldwide, all central banks strengthen the regulatory and supervisory mechanism, everybody is formulating a long-term plan and a medium-term plan. So, the RBI has also decided it will formulate a pragramme to outline what is to be achieved in the next three years,” the source added.

An internal committee was formed, which was anchored by outgoing Deputy Governor Viral Acharya, to identify issues that needed to be addressed over the next three years. While around a dozen areas were identified by the committee, some board members felt that areas could be filtered and lesser number of areas can be identified for implementation in the next three years.

“The idea is that the central bank plays a proactive role and takes preemptive action to avoid any crisis,” said another source, highlighting the IL&FS debt default issue and the crisis of confidence the non-banking financial sector faced in the aftermath.

In a statement after the board meeting, the RBI said the board finalised the three -year medium- term strategy document of the Reserve Bank, ‘which covered, inter-alia, its mission and vision statement.’

The board also approved the RBI’s budget for the July 2019—June 2020 period. Other matters discussed by the board included issues relating to currency management and payment systems, the statement added.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-09 MAINTENANCE OF CAR BY BANKS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Maintenance of CAR by Banks

Posted On: 08 JUL 2019 4:53PM by PIB Delhi

As per RBI guidelines, banks are required to maintain a minimum Capital to Risk-weighted Assets (CRAR) of 9% on an ongoing basis. As on 31.3.2019, all Public Sector Banks (PSBs) and Private Sector Banks meet this minimum CRAR requirement. As per RBI’s Financial Stability Report (FSR) of June 2019, as on 31.3.2019, the CRAR, for Scheduled Commercial Banks (which include both PSBs and Private Sector Banks) and PSBs was 14.3% and 12.2% respectively.

As per FSR of June 2019, growth of gross non-performing assets (NPAs) has decelerated across all bank groups, including PSBs, and further, due to the increased pace of recognition of NPAs, NPAs in the banking system peaked in March 2018 and have since declined to 9.3% in March 2019, signalling a turnaround in the NPA cycle. In addition, under the baseline scenario of macro-stress tests for credit, FSR has projected further decrease in the gross NPA ratio of all Scheduled Commercial Banks to 9.0% by March 2020, driven by a decline in the gross NPA ratios of PSBs'' from 12.6% to 12.0% over the same period.

As per the Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999, credit rating agencies rate securities offered by way of public or rights issue. Accordingly, credit rating agencies rate securities and not industry. However, recent credit rating agency reports have highlighted several positive aspects regarding the Indian Banking sector including inter-alia, the following:

i. CRISIL, a subsidiary of the leading international credit rating agency S&P Global, in its article titled ‘Bank NPAs to shrink 350 bps to ~8% by March 2020’, has stated: “Asset quality of banks should witness a decisive turnaround this fiscal with gross non-performing assets (NPAs) reducing by 350 basis points (bps) over two years to ~8% by March 2020 compared with a peak of ~11.5% in March 2018 and 9.3% in March 2019... PSBs should see their gross NPAs climb down over 400 bps to ~10.6% by March 2020.” ii. ICRA, an associate of the leading international credit rating agency Moody’s Investor Service, in its report titled ‘ICRA Looks at Sectoral Development Prospects for NDA 2.0’, has stated: “The GNPAs and NNPAs of PSBs is expected to decline to 8.1-8.4% and 3.5- 3.6%crackIAS.com by March 2020.”

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-09 BANK CUSTOMER CARE CENTRES Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Bank Customer Care Centres

Posted On: 08 JUL 2019 4:52PM by PIB Delhi

Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched with the objective to inter-alia provide universal access to banking facilities. Under the scheme all rural and semi-urban areas were mapped into 1.59 lakh Sub-Service Areas (SSAs) where one SSA catering to 1,000 to 1,500 households. While 0.33 lakh SSAs have been covered with bank branches, 1.26 lakh SSAs, have been covered by deployment of interoperable Bank Mitras. Bank Mitras provide banking services to customers including financial transactions.

As apprised by banks 10,472 SSAs are covered through Business Correspondents for providing banking services in the state of Bihar.

As far as Customer Care Centres are concerned, banks are permitted to set up such centres, as part of their grievance redressal mechanism.

As per the Reserve Bank of India’s circular dated 1.7.2014 the banks are to adopt technology- based solutions for managing the risk as engagement of intermediaries such as Business Facilitators/ Correspondents involves significant reputational, legal and operational risks.

Further, banks have been directed to constitute Grievance Redressal Machinery for redressing complaints about services rendered by the BCs. The name and contact number of designated grievance redressal officer are also made known and widely publicized. If a complainant does not get satisfactory response from the bank within 60 days from the date of his/her lodging the compliant, he/she will have the option to approach the Office of the Banking Ombudsman concerned for redressal of his/her grievance/s.

Accordingly, all BCs related complaints are handled by respective banks or through Banking Ombudsman, in terms of the extant RBI guidelines. This wascrackIAS.com stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-09 REGULATORY COMPLIANCE BY PRIVATE BANKS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Regulatory Compliance by Private Banks

Posted On: 08 JUL 2019 4:51PM by PIB Delhi

Regulatory mechanism are in place to deal with non-compliance with directions on “Know Your Customer/Anti-Money Laundering Norms” (KYC/AML norms) and on reporting of frauds by lenders and banks, and deficiencies in regulatory compliance by lenders.

In this regard, Reserve Bank of India (RBI) has informed that with a view to developing a sound framework and process for enforcement action, a separate Enforcement Department (EFD) has been established within RBI with effect from 3.4.2017 as a centralised department to speed up regulatory compliance. RBI has further informed that instances of regulatory deficiencies, including non-compliance with KYC/AML norms by private sector lenders and banks, are flagged in RBI’s inspection reports and pursued for compliance by RBI’s supervisory department. Some of the deficiencies and instances of non-compliance are taken up for enforcement action (in the nature of imposing a monetary penalty) by EFD in accordance with policy framed in this regard based on, inter alia, materiality of the violation. Since the creation of EFD, monetary penalty amounting to Rs. 148.91 crore has been imposed on 43 private lenders and banks for regulatory deficiencies, out of which penalty of Rs. 8.30 crore has been imposed on nine private lenders and banks for non-compliance with directions on KYC/AML norms.

Further, as per inputs received from the Department of Revenue, the Director, Financial Intelligence Unit - India (FIU-IND), based on inquiry initiated under the Prevention of Money Laundering Act, 2002 (PMLA), is empowered to take suitable actions against erring entities for non-compliance of legal obligations under PMLA. Director, FIU-IND has imposed penalty against 10 private sector banks where non- compliance of the provision of Chapter IV of PMLA and the Prevention of Money LaunderingcrackIAS.com Rules, 2005 had been reported or detected.

RBI has also issued Master Directions on Frauds ? Classification and Reporting, which require banks to report frauds beyond a threshold amount to law enforcement agencies, monitoring and follow-up of cases by a special committee, quarterly placement of information before the Audit Committee of bank Board concerned, and annual review of frauds by the bank concerned. These cover, inter alia, preventive measures, fraud detection systems, systemic lacunae, remedial action, monitoring of progress of investigation and recovery, and staff accountability. This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-09 BANK SERVICE CHARGES Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Bank Service Charges

Posted On: 08 JUL 2019 4:51PM by PIB Delhi

As per extant guidelines of Reserve Bank of India (RBI), following basic minimum facilities to the Basic Savings Bank Deposit Account (BSBDA) are provided free of charge and without any requirement for maintaining minimum balance in the account:

1. Deposit of cash at bank branch as well as ATMs/Cash Deposit Machines (CDMs).Receipt/ credit of money through any electronic channel or by means of deposit /collection of cheques drawn by Central/State Government agencies and departments.No limit on number and value of deposits that can be made in a month.Minimum of four withdrawals in a month, including ATM withdrawals.ATM Card or ATM-cum-Debit Card.

Accordingly, as on March, 2019 the above facilities are provided to 57.3 crore BSBD accounts (including 35.27 crore PMJDY accounts) free of charge.

In addition to the above, banks may provide additional value-added services, including issue of cheque book, beyond the above minimum facilities, which may/may not be priced (in non- discriminatory manner) subject to disclosure. The availment of such additional services are to made at the option of the customers. However, while offering such additional services, banks shall not require the customer to maintain a minimum balance and offering such additional services would also not make BSBD account a non-BSBD Account, so long as the prescribed minimum services are provided free of charge by the banks.

For accounts other than BSBD accounts, as per Reserve Bank of India (RBI)’s Master Circular on “Customer Service in Banks” dated July 1, 2015, banks are permitted to fix service charges on variouscrackIAS.com services rendered by them, as per their Board approved policy, while ensuring that the charges are reasonable and not out of line with the average cost of providing these services. Banks have been advised to identify basic services and the principles to be adopted/ followed by them for ensuring reasonableness in fixing such charges. They are also advised to take steps to ensure that customers are made aware of the service charges upfront and changes in the service charges are implemented only with the prior notice to the customers.

The Reserve Bank of India (RBI) vide its circular on ‘National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) systems – Waiver of charges’ dated 11.06.2019, has decided that with effect from July 1, 2019, processing charges and time varying charges levied on banks by RBI for outward transactions undertaken using the RTGS system, as also the processing charges levied by RBI for transactions processed in NEFT system would be waived by the Reserve Bank. The banks are also advised by RBI to pass on the benefits to their customers for undertaking transactions using RTGS and NEFT systems.

The quantum of charges (Rs in crore) collected by RBI since 2016-17 is as follows:

Year (April to RTG Total March) NEFT S Processin Membership g + Time NEFT Clearing

Charges Varying house Charges Charges FY 2016- 0.89 45.94 38.71 85.54 17 FY 2017- 0.94 52.30 46.28 99.52 18 FY 2018- 0.99 56.37 52.92 110.29 19 FY 2019-20 (April-June) 0.25 14.69 13.62 28.56

Source: RBI

This waiver of processing and time varying charges by RBI on banks will accordingly reduce the cost of RTGS and NEFT transactions for the customers and will give fillip to digital fund movement.

Following RBI guidelines, rural branches and Financial Literacy Centres (FLCs) of banks conduct camps for financial literacy across the country. Rural branches and FLCs of banks have been advised by RBI to use the audio visuals on basic financial awareness messages inter-alia including electronic payment systems NEFT/RTGS prepared by National Centre for FinancialcrackIAS.com Education.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-09 INFRASTRUCTURE INVESTMENT Relevant for: Indian Economy | Topic: Infrastructure: Roads

Ministry of Finance Infrastructure Investment

Posted On: 08 JUL 2019 4:50PM by PIB Delhi

India has been spending much more than Rs 1 trillion per annum on infrastructure. For example, the Budget Estimate of Government expenditure on Infrastructure in 2018-19 was Rs. 5.97 trillion. As per Interim Budget 2019-2020, India has a vision to become a five trillion dollar economy in the next five years and a ten trillion dollar economy in the next eight years thereafter. Infrastructure investment needs to increase commensurately to attain these targets.

Government has taken a number of initiatives to boost infrastructure investment in the economy:

i. Government has launched sectoral initiatives such as Bharatmala Pariyojana for development of the road sector, Sagarmala Programme which aims to promote port-led development with a view to reducing logistics cost for international and domestic trade, Ude Desh Ka Aam Nagrik (UDAN) - Regional Connectivity Scheme (RCS) which aims at facilitating regional air connectivity by making it affordable, Ujjawal Discom Assurance Yojana (UDAY) for effecting financial and operational turnaround of Power Distribution Companies, etc. ii. Government has also launched innovative financing vehicles such as Infrastructure Debt Funds (IDFs), Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs); mainstreaming of Public Private Partnerships (PPPs) across infrastructure sectors through viability gap funding; periodic review of Harmonized Master List of Infrastructure Sub-sectors; and establishment of the National Investment and Infrastructure Fund (NIIF).

This crackIAS.comwas stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-09 CAPITAL SHORTAGE IN PSBS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Capital Shortage in PSBs

Posted On: 08 JUL 2019 4:50PM by PIB Delhi

As per RBI guidelines, banks in India are required to maintain a minimum Capital to Risk- weighted Assets Ratio (CRAR) of 9%. As on 31.3.2019, all 18 Public Sector Banks (PSBs) meet this minimum CRAR requirement.

In the Union budget for the financial year 2019-20, Government has proposed to make provision for infusion of Rs. 70,000 crore capital to PSBs to boost credit for a strong impetus to the economy.

As per inputs received from State Bank of India, bank has obtained approval for raising equity capital of up to Rs. 20,000 crore from the market by way of Qualified Institutional Placement (QIP) or other modes till 31.3.2020.

The bank has further informed that at present it is well capitalised, with CRAR of 12.72% as on 31.3.2019 against regulatory requirement of 11.325% and, depending upon the requirement, it would decide on raising capital at an appropriate time during the financial year.

PSBs source capital through internal capital generation, mobilisation of capital from markets, and infusion by the Government. Thus, capital infusion by the Government complements PSB’s internal capital generation and mobilisation of capital from markets. During the period from financial year (FY) 2008-09 to FY2018-19, PSBs have mobilised Rs. 2,81,616 crore of capital through sources other than Government, and have posted net profit of Rs. 98,373 crore, of which a sizeable proportion has contributed to internal capital generation. During the same period, Government has infused capital of Rs. 3,15,721 crore in PSBs.

This wascrackIAS.com stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-09 RS. 15 LAKH BEING PROVIDED TO MICRO AND SMALL ENTERPRISES FOR TECHNOLOGY UPGRADATION Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Micro,Small & Medium Enterprises Rs. 15 lakh being provided to Micro and Small Enterprises for Technology Upgradation

Posted On: 08 JUL 2019 4:17PM by PIB Delhi

Lack of access to latest technologies affects the capability of Small and Medium Enterprises to compete in the global market. In order to support SMEs in accessing latest technologies, the Ministry of Micro, Small and Medium Enterprises (MSME) implements a scheme named Credit Linked Capital Subsidy and Technology Up-gradation Scheme (CLCS-TUS). One of the components under the schemes is Credit Linked Capital Subsidy (CLCS) under which capital subsidy up to Rs. 15 Lakh is provided to Micro and Small Enterprises (MSEs) for accessing modern technology.

Other measures aimed at enhancing competitiveness are as follows:

● Building awareness of Intellectual Property Rights (IPR). ● Undertaking digital empowerment initiatives. ● Supporting entrepreneurial and managerial development through Incubators. ● Providing design expertise to manufacturing enterprises. ● Adopting lean manufacturing practices. ● Enabling ZED Certification. This information was given by Shri Nitin Gadkari, Union Minister for Micro, Small and Medium Enterprises in a written reply to a question in Rajya Sabha today.

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Ministry of Shipping Measures taken for Promotion of Indian Coastal Shipping Industries

Posted On: 08 JUL 2019 4:16PM by PIB Delhi

The Minister of State Shipping (I/C) and Chemical & Fertilizers Shri Mansukh Mandaviya in a written reply to a question in Rajya Sabha today informed that the Government has relaxed Cabotage under section 406 & 407 of the Merchant Shipping Act, 1958, for the coastal movement of Agriculture, horticulture, fisheries and animal husbandry commodities. The said relaxation has given wider geographical spread for distribution of fertilizers for the benefit of farming community.

He informed thatin order to promote coastal shipping, the Ministry of Shipping, in exercise of power vested in the Central Government vide Section 407(3) of the Merchant Shipping Act, had relaxed cabotage and allowed foreign flag ships to engage in the coastal trade of India without obtaining licence from Directorate General of Shipping for coastal movement of the following:

● For specialized vessels such as RO-RO, RO-PAX, Hybrid Ro-Ro, Pure car carriers, pure car and truck carriers, LNG vessels and over-dimensional cargo or project cargo vide order dated 2nd September, 2015. st ● EXIM/EMPTY containers vide order dated 21 May, 2018; nd ● Agriculture, horticulture, fisheries and animal husbandry commodities vide order dated 22 May, 2018, and nd ● Fertilizers vide order dated 22 June, 2018. He further informed that in addition, the Ministry of Shipping in exercise of power vested vide Section 406 (1) of the said Act, had allowed foreign flag ships chartered by a citizen of India or a company or a cooperative society to engage in coastal trade of India for movement of above mentioned cargoes without obtaining a licence from Directorate General of Shipping.

The licensing condition has been relaxed for certain type of specialized foreign ships due to non- availabilitycrackIAS.com of adequate number of such Indian flagged vessels. Similar relaxation for specific cargoes/commodities has been made to make available additional vessels for carriage of cargoes on the coast at competitive freight rates. This would encourage modal shift from road and rail transport to coastal shipping and eventually benefit the end-users. Both, the coastal trade and the transshipment of containers from Indian Ports, have shown an increase subsequent to the relaxation of licensing conditions for plying of foreign ships for specified types of cargoes.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-10 TECHNOLOGICAL GAP OF CPSES Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Heavy Industries & Public Enterprises Technological Gap of CPSEs

Posted On: 09 JUL 2019 4:16PM by PIB Delhi

The Government has implemented Maharatna, Navratna and Miniratna scheme for Central Public Sector Enterprises (CPSEs) under which the Boards of these CPSEs have been delegated powers, inter-alia, to enter technology joint ventures or strategic alliances and to obtain by purchase or other arrangement technology and know-how as per Government guidelines. Further, ‘R&D, Innovation, Technology up-gradation’ has been included as a non-financial parameter under the system of Memorandum of Understanding for CPSEs (except for CPSEs in the financial sector) with a weight of up to 10% in order to provide focus on efforts of management of CPSEs in this regard.

All CPSEs function under the administrative jurisdiction of concerned Ministry/Departments. The Board of Directors of a CPSE is responsible for regular review of performance of the concerned CPSE and to decide on steps to be taken for enhancing output/productivity of the company as per its operational needs and business plans with the approval of the competent authority. The concerned administrative Ministry/Department also undertakes periodic review of performance of CPSEs under their respective jurisdiction to facilitate policy interventions required for enhancing output/productivity of concerned CPSE(s).

This information was given by the Minister of Heavy Industries & Public Enterprises, Arvind Ganpat Sawant, in a written reply in the Lok Sabha today.

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Cabinet Cabinet approves the Banning of Unregulated Deposit Schemes Bill, 2019

Bill to be introduced in ensuing session of Parliament

Posted On: 10 JUL 2019 6:04PM by PIB Delhi

The Union Cabinet, chaired by the Prime Minister Narendra Modi has approved the banning of Unregulated Deposit Schemes Bill, 2019. It will replace the banning of Unregulated Deposit Schemes Ordinance, 2019.

The banning of Unregulated Deposit Schemes Bill, 2019 will replace the Ordinance promulgated on 21st February, 2019, which will otherwise cease to operate after six weeks after reassembly of Parliament.

Impact

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

Background

The banning of Unregulated Deposit Scheme Bill, 2018 was considered by the Lok Sabha in its sitting held on 13th February, 2019 and after discussion, the same was passed, as amended through the proposed official amendments, as the banning of Unregulated Deposit Scheme Bill, 2019. However, before the same could be considered and passed in the Rajya Sabha, the Rajya Sabha was adjourned sine die on the same day.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 CABINET APPROVES CODE ON OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS BILL, 2019 Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Cabinet Cabinet approves Code on Occupational Safety, Health and Working Conditions Bill, 2019

13 Central Labour Laws brought in ambit of New Code

Posted On: 10 JUL 2019 6:04PM by PIB Delhi

In the spirit of ‘Sabka Saath, Sabka Vikaas’ and ‘Sabka Vishwas’, the NDA Government led by Prime Minister Narendra Modi has been continuously working for the benefit of people from various walks of life. With this objective, the Union Cabinet chaired by Prime Minister Narendra Modi has approved for introduction of the Code on Occupational Safety, Health and Working Conditions Bill, 2019 in the Parliament. This proposal would enhance the coverage of the safety, health and working conditions provisions manifold as compared to the present scenario. The decision will enhance the coverage of the safety, health and working conditions provisions manifold as compared to the present scenario.

The New Code has been drafted after amalgamation, simplification and rationalisation of the relevant provisions of the 13 Central Labour Acts:

● The Factories Act, 1948; ● The Mines Act, 1952; The Dock Workers (Safety, Health and Welfare) Act, 1986; ● The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996; ● The Plantations Labour Act, 1951; ● The Contract Labour (Regulation and Abolition) Act, 1970; ● The Inter-State Migrant workmen (Regulation of Employment and Conditions of Service) Act, 1979; ● ThecrackIAS.com Working Journalist and other Newspaper Employees (Conditions of Service and Misc. Provision) Act, 1955; ● The Working Journalist (Fixation of rates of wages) Act, 1958; ● The Motor Transport Workers Act, 1961; ● Sales Promotion Employees (Condition of Service) Act, 1976; ● The Beedi and Cigar Workers (Conditions of Employment) Act, 1966; and ● The Cine Workers and Cinema Theatre Workers Act, 1981. After the enactment of the Code, all these Acts being subsumed in the Code will be repealed.

Benefits

● Safety, Health, welfare and improved Working Conditions are pre-requisite for well-being of the worker and also for economic growth of the country as healthy workforce of the country would be more productive and occurrence of less accidents and unforeseen incidents would be economically beneficial to the employers also. With the ultimate aim of extending the safety and healthy working conditions to all workforce of the country, the Code enhances the ambit of provisions of safety, health, welfare and working conditions from existing about 9 major sectors to all establishments having 10 or more employees. *****

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 BOOST TO RURAL ROAD CONNECTIVITY Relevant for: Indian Economy | Topic: Infrastructure: Roads

Cabinet Committee on Economic Affairs (CCEA) Boost to Rural Road Connectivity

1,25,000 Km Road Length to be Consolidated

Estimated Cost Rs 80,250 Crore

Cabinet approves Launch of Pradhan Mantri Gram Sadak Yojana-lll (PMGSY-III)

Posted On: 10 JUL 2019 5:47PM by PIB Delhi

In a major boost to rural road connectivity across the country, the Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval for the launch of Pradhan Mantri Gram Sadak Yojana-lll (PMGSY-III). It involves consolidation of Through Routes and Major Rural Links connecting habitations to Gramin Agricultural Markets (GrAMs), Higher Secondary Schools and Hospitals.

Under the PMGSY-III Scheme, it is proposed to consolidate 1,25,000 Km road length in the States.The Scheme will also include Through Routes and Major Rural Links that connect habitations to Gramin Agricultural Markets (GrAMs), Higher Secondary Schools and Hospitals.

Impact

● This would facilitate easy and faster movement to and from Gramin Agricultural Markets (GrAMs), Higher Secondary Schools and Hospitals. ● Roads constructed under PMGSY would also be maintained properly. Financial Implications

● It will entail an estimated cost of Rs 80,250 crore (Central Share-Rs. 53,800 crore, State Share- Rs 26,450 crore).

● ThecrackIAS.com funds would be shared in the ratio of 60:40 between the Centre and State for all States except for 8 North Eastern and 3 Himalayan States (Jammu & Kashmir, Himachal Pradesh & Uttarakhand) for which it is 90:10. Implementation

● Project period: 2019-20 to 2024-25. ● Selection of candidate roads based on the sum total of the marks obtained by particular road on the basis of parameters of population served, market, educational and medical facilities, etc. ● Construction of bridges upto 150 m in plain areas and 200 m in Himalayan and NE States proposed, as against the existing provisions of 75 m and 100 m in plain areas and Himalayan and NE States respectively. ● The States shall be asked to enter into a Memorandum of Understanding (MoU) before launching of PMGSY-III in the concerned State for providing adequate funds for maintenance of roads constructed under PMGSY post 5-year construction maintenance period. Progress under PMGSY

A total of 5,99,090 Km road length has been constructed under the scheme since inception till April, 2019 (inclusive of PMGSY-I, PMGSY-II and RCPLWEA Scheme.

Background

PMGSY-III scheme was announced by the Finance Minister in Budget Speech for the year 2018-19.

The CCEA in its meeting held on 9th August, 2018 approved continuation of PMGSY-I & II beyond 12th Five Year Plan and covering of balance eligible habitations under PMGSY-I by March 2019, PMGSY-II, and habitations under identified LWE blocks (100-249 population) by March 2020.

PMGSY-I

PMGSY was launched in December, 2000 with an objective to provide single all-weather road connectivity to eligible unconnected habitation of designated population size (500+ in plain areas and 250+ in North-East, hill, tribal and desert areas as per Census, 2001) for overall socio- economic development of the areas. 97% of the eligible and feasible habitations have already been connected by all-weather road.

Road Connectivity Project for Left Wing Extremism Area (RCPLWEA)

Government launched Road Connectivity Project for Left Wing Extremism affected Areas in the year 2016 as a separate vertical under PMGSY to provide all-weather road connectivity with necessary culverts and cross-drainage structures in 44 districts (35 are worst LWE affected districts and 09 are adjoining districts), which are critical from security and communication point of view. Under the Scheme, 5,066 Km road length has been sanctioned.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 NUCLEAR INSURANCE POOL Relevant for: Indian Economy | Topic: Infrastructure: Energy incl. Renewable & Non-renewable

Department of Atomic Energy Nuclear Insurance Pool

Posted On: 10 JUL 2019 4:59PM by PIB Delhi

The Government has created an Indian Nuclear Insurance Pool (INIP) on 12th June, 2015. M/s. General Insurance Corporation of India (GIC-Re), along with several other Indian Insurance Companies, have launched the Indian Nuclear Insurance Pool (INIP) with a capacity of 1500 crore to provide insurance to cover the liability as prescribed under Civil Liability for Nuclear Damage (CLND) Act, 2010. This has addressed issues related to Civil Liability for Nuclear Damage (CLND) Act and had facilitated commencement of work in setting up new nuclear power projects.

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

This information was provided by the Union Minister of State (Independent Charge) Development of North-Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances & Pensions, Atomic Energy and Space, DrJitendra Singh in written reply to a question in Lok Sabha today.

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crackIAS.comEND Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 PRICE STABILISATION FUND Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Foreign Capital, Foreign Trade & BOP

Ministry of Commerce & Industry Price Stabilisation Fund

Posted On: 10 JUL 2019 4:54PM by PIB Delhi

In view of the fluctuating nature of international prices in plantation crops and the dependence of growers on the export markets, Government launched and implemented the Price Stabilization Fund (PSF) Scheme from 1st April, 2003 to 30th September, 2013 to provide financial relief to small growers of coffee, tea, rubber and tobacco having land holdings up to four hectares. This financial relief was provided when prices of these commodities fell below the price spectrum band. Every year, a uniform price spectrum band for all four commodities was announced by the High Powered Committee (HPC) constituted by the Department of Commerce with a range of + 20 % to - 20 % of moving average of the previous seven years international prices of the crops.

The scheme was based on the principle of contributions from the growers and the Government depending on normal/boom/distress periods, with a provision for withdrawal by the growers during the distress period. The Price Stabilization Fund Trust (PSFT) was set up by the Department of Commerce and NABARD to implement the PSF Scheme. The grower members were required to deposit Rs. 500 (non-refundable) towards entry fee, which would form part of the PSF Corpus. If the price falls within the band, the year would be declared as normal year and growers as well as PSFT would deposit Rs. 500 each in the PSF saving account of grower opened for the purpose of the scheme in the Nationalized banks. If the price goes above the upper band, the year would be declared as boom yearand only the grower would deposit Rs. 1000 in the account and if the price falls below lower band, the year would be declared as distress year and only PSFT would deposit Rs. 1000 in the growers’ accounts. In distress year, each eligible grower was allowed to withdraw Rs.1000 from the respective account. The scheme was closed on 30/9/2013. Therefore,no fund was allocated and utilized under the scheme during the last three years.

A corpus fund was set up in the year 2003 with the Government of India’s contribution of Rs. 432.88 crore and growers’ contribution of Rs. 2.67 crore (Total Rs. 435.55 crore) to implement the PSF scheme. The PSFT, set up in September, 2003 for a period of ten years was implementing the PSF scheme and operating the PSF Corpus Fund. As per the provisions of the scheme, interest earned on the Corpus was utilized for implementing the scheme, keeping the corpus fund vested in the Public Account of Government of India intact. The PSF Trust has been crackIAS.comre-registered for a period of 10 years commencing from 11/9/2013. As per the guidelines of the PSF, interest is calculated at the end of each financial year and transferred to the Reserve Fund –PSFT.

The PSF scheme was not successful. The scheme was reviewed in October, 2012 with a view to rectify the deficiencies in the scheme. As a result, a draft modified PSF Scheme was prepared and discussed in the meeting held on 4/6/2014 under the chairmanship of Expenditure Secretary. In the meeting, it was decided that the available corpus with the Price Stabilization Fund Trust may be utilized by the Department of Commerce to implement a modified insurance premium subvention scheme for insuring the growers. Accordingly, the Department of Commerce approved a pilot scheme in the name of Revenue Insurance Scheme for Plantation Crops (RISPC) to protect small growers of tea, coffee, rubber & cardamom from the twin risks of weather and prices for implementing in nine districts of seven States by the commodity boards through selected insurance companies. However, the scheme did not elicit desired response from the target groups and insurance companies.

The Indian Institute of Plantation Management Bengaluru evaluated the scheme and recommended crop specific insurance schemesfor Coffee, Tea, Cardamom and Tobacco so that the needs of each crop could be met. The commodity boards have been advised to formulate suitable schemes as recommended by the evaluation study. The finalization and approval of the modified scheme is dependent upon the submission of suitable schemes addressing the deficiencies of the earlier scheme.

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 PROMOTION OF AGRO EXPORTS Relevant for: Indian Economy | Topic: Transport & Marketing of agricultural produce

Ministry of Commerce & Industry Promotion of Agro Exports

Posted On: 10 JUL 2019 4:53PM by PIB Delhi

Promoting agricultural exports is a continuous process. To promote the agricultural exports, the Government has introduced a comprehensive Agriculture Export Policy with the following vision:

“Harness export potential of Indian agriculture, through suitable policy instruments, to make India a global power in agriculture, and raise farmers’ income.”

Inter-alia, the objectives of the Agriculture Export policy are as under:

i. To diversify our export basket, destinations and boost high value and value added agricultural exports, including focus on perishables. ii. To promote novel, indigenous, organic, ethnic, traditional and non-traditional Agri products exports. iii. To provide an institutional mechanism for pursuing market access, tackling barriers and dealing with sanitary and phytosanitary issues. iv. To strive to double India’s share in world agri exports by integrating with global value chains. v. Enable farmers to get benefit of export opportunities in overseas market.

The Government has also brought out a new Central Sector Scheme – ‘Transport and Marketing Assistance for Specified Agriculture Products’ - for providing assistance for the international component of freight, to mitigate the freight disadvantage for the export of agriculture products, and marketing of agricultural products.

The Department of Commerce also has several schemes to promote exports, including exports of agricultural products, viz. Trade Infrastructure for Export Scheme (TIES), Market Access Initiatives (MAI) Scheme, Merchandise Exports from India Scheme (MEIS) etc. In addition, assistance to the exporters of agricultural products is also available under the Export Promotion Schemes of Agricultural & Processed Food Products Export Development Authority (APEDA), Marine Products Export Development Authority (MPEDA), Tobacco Board, Tea Board, Coffee Board,crackIAS.com Rubber Board and Spices Board. This information was given by the Minister of Commerce and Industry, PiyushGoyal, in a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 PRODUCTION OF NATURAL RUBBER Relevant for: Indian Economy | Topic: Major Crops, Cropping Patterns and various Agricultural Revolutions

Ministry of Commerce & Industry Production of Natural Rubber

Posted On: 10 JUL 2019 4:52PM by PIB Delhi

The total production of Natural Rubber (NR) during 2018-19 is provisionally estimated at 648000 tonnes. The production of NR during April-May 2019 is provisionally estimated at 74000 tonnes.

The Natural Rubber prices have been at relatively low levels during the past few years in domestic and international markets. However, the rubber prices started increasing during the recent weeks and the average price for the RSS4 grade in June, 2019 was 150.29 per kg. The Natural Rubber prices are determined by market forces and a range of factors which inter-alia include trends in economic growth in major consuming countries, oil/synthetic rubber prices, weather conditions and developments in future markets.

The domestic NR market generally follows the trend in world market with occasional divergences due to region specific and seasonal factors. No quantitative restrictions can be imposed on the import of NR under WTO commitments. The domestic NR price is sensitive to import of NR. Therefore, to regulate the import of NR, the Government has increased the duty on import of dry rubber from “20% or Rs. 30 per kg whichever is lower” to “25% or Rs. 30 per kg whichever is lower” from 30.4.2015.

The Government has also reduced the period of utilization of imported dry rubber in January 2015 under advance licensing scheme from 18 months to 6 months. The Director General of Foreign Trade (DGFT) has imposed port restriction on the import of Natural Rubber by restricting the port of entry to Chennai and NhavaSheva (Jawaharlal Nehru Port) since 20th January, 2016.

State-wise production of NR upto 2018-19 is given below:

State-wise production of NR (Tonne) State 2015-16 2016-17 2017-18 (P) 2018-19 (P) KeralacrackIAS.com438630 540400 540775 490460 Tamil Nadu 19495 21140 21110 21500 Traditional 458125 561540 561885 511960 Total Tripura 44245 50985 50500 53050 Assam 14560 19970 23300 24300 Meghalaya 7360 8950 9050 9100 Nagaland 3020 4320 4820 4930 Manipur 1660 2090 1790 1850 Mizoram 595 742 742 750 Arunachal 360 478 428 450 Pradesh North East 71800 87535 90630 94430 Total Karnataka 29400 38800 38300 38200 A&N Islands 240 240 240 275 Goa 640 645 575 625 Maharashtra 925 1185 1185 1250 Odisha 315 400 450 480 West Bengal 325 335 335 380 Andhra 230 320 400 400 Pradesh Others Total 32075 41925 41485 41610 Non Traditional 103875 129460 132115 136040 Total Grand Total 562000 691000 694000 648000

Source: Rubber Board

P: Provisional

This information was given by the Minister of Commerce and Industry, PiyushGoyal, in a written reply in the Lok Sabha today.

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crackIAS.com END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 TEA GARDENS Relevant for: Indian Economy | Topic: Major Crops, Cropping Patterns and various Agricultural Revolutions

Ministry of Commerce & Industry Tea Gardens

Posted On: 10 JUL 2019 4:47PM by PIB Delhi

At present, there are 1585 number of established tea gardens in the country. The names of the companies operating the tea gardens as per the Baseline Survey conducted in the year 2015 by the Tea Board is given in Annexure-1. The details of total number of permanent /temporary workers state-wise as per the Baseline Survey conducted by the Tea Board in 2015 for the organized sector in the country is given in the following Table:

S.No State Permanent Temporary Total 1 Assam 400352 284302 684654 2 West Bengal 241144 96172 337316 3 Tripura 7953 5304 13257 4 Arunachal Pradesh 141 487 628 5 Sikkim 397 0 397 6 Meghalaya 19 125 144 7 Bihar 20 40 60 8 Himachal Pradesh 55 508 563 9 Mizoram 15 50 65 10 Uttarakhand 668 948 1616 11 Tamil Nadu 39311 10099 49410 12 Kerala 33534 7239 40773 13 Karnataka 2638 421 3059 All India 726247 405695 1131942 Source: Tea Board

At present, 11 tea gardens are closed in the country. The main reasons for closure of these gardens are attributed to poor yield of the estates, ageing bush profile and high vacancy percentage in tea area, negligible uprooting / replanting of age old tea bushes for years, poor garden management practices, falling quality and price realizations, overall lack of development perspective,crackIAS.com highly debt oriented funding strategy and ownership disputes. The details indicating state-wise closed tea estates (T.E) and number of workers affected are given below:

Sl. No. of Workers affected Name of the T.E State/UT No. Permanent Temporary Dheklapara T.E 200 1 West Bengal 604 (Approx.) Bundapani T.E 2 West Bengal 1215 68

Dharanipur T.E 450 3 West Bengal 357 (Approx.) Redbank T.E 700 4 West Bengal 888 (Approx.) 150 5 Surendranagar T.E West Bengal 301 (Approx.) 6 Madhu T.E West Bengal 947 - 7. Panighata West Bengal 787 - 8 Manabarrie West Bengal 452 101 M/s Peermade Tea Co. Ltd.- 9. 220 - Peermade&Lonetree T.E. Kerala M/s MMJ Plantations- 10. Kerala Kottamala&Bonami T.E 375 - 11 Bonaccord Kerala 220 - Total = 6366 1669

Source: Tea Board

The following steps have been taken by the Government for revival of the closed tea estates in the country:

(i) The Dheklapara Tea Estate was officially liquidated by the Calcutta High Court. The garden was put up for e-auction by the Calcutta High Court (Official Liquidator) on 11th May, 2012, but no prospective buyer was available. The West Bengal Govt. has cancelled land lease in respect of Bundapani, Redbank, Dharanipur, Surendranagarand Madhu tea estates and taken possession of the land to find out new entrepreneur.

(ii) A committee headed by the District Magistrates in North Bengal districts regularly monitors the welfare measures and different schemes introduced by the State government in the tea gardens.

(iii) The Government of Kerala has constituted Plantation Workers’ Relief Fund in the districts of Thiruvananthapuram, Palakkad, Waynad and Idukki. The fund is utilized for the relief activities such as nutritious food, study materials, note books, school bags and umbrellas to the children of workersin the closed gardens of the State. Medical camps crackIAS.comare being organised and financial assistance extended for the medical treatment of deadly diseases to the labourers.

The Tea Board under the Tea Development & Promotion Scheme is extending financial assistance to the small growers for uprooting and replanting, rejuvenation, pruning, irrigation, assistance to Self Help Groups (SHGs), field mechanization, assistance to Farmers’ Producers Organizations (FPOs), annual award for SHGs & FPOs, setting up of new factories by FPOs, setting up mini factories, workshop/training, development & promotion of organic farming and organic conversion.

Assistance provided by the Tea Board under the Tea Development & Promotion Scheme during the last three years and current year for the benefit of small tea growers is given below:

States Years (Rs. In Lakh) 2016-17 2017-18 2018-19 2019-2020 Assam 446.2 328.32 885.54 105.00 Tripura 17.33 29.24 133.93 0.23 Arunachal Pradesh 0.61 0.95 0.87 0.00 Nagaland 0.43 0.10 14.74 0.00 Meghalaya 0.5 0.72 6.22 0.00 Mizoram 9.67 98.60 19.43 0.00 Tamil Nadu 179.94 295.21 104.76 29.71 Kerala 74.54 406.44 117.91 2.81 Karnataka 0.00 0.13 0.00 0.00 West Bengal 48.16 55.61 578.51 30.44 Bihar 0.77 0.00 0.16 0.00 Himachal Pradesh 24.78 97.64 85.62 6.71 Uttarakhand 2.78 87.4 97.51 6.08 Total = 805.71 1400.36 2045.20 180.98

Source: Tea Board

District Green Leaf Price Monitoring Committee (DGLPMC) has been notified in all tea growing districts of India under the chairmanship of District Collector/Deputy Commissioner to ensure remunerative prices for green leaf to the small teas growers. The committee notifies Minimum Benchmark Price (MBP) every month by taking into consideration the average sale price of made tea for the previous month for all the factories located in the district.

The Tea Board was set up under section 4 of the Tea Act, 1953. The Tea Board comprises of a Chairman and 31 members appointed by the Government of India, including the representatives of the major tea growing States, representatives of the Parliament and members representing different sections of the tea industry.

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The Head office of the Tea Board is located in Kolkata, West Bengal and there are two Zonal Offices, one each at Guwahati and Coonoor. The Tea Board functions as an apex body concerned with overall development of the tea industry in India by providing necessary assistance for research and developmental activities aimed at increasing production, productivity and quality; facilitation of trade and promotion of exports so as to ensure maximum returns to the producers including small growers, safeguarding the interests of the workers and the consumers.

Welfare needs of plantation workers, including tea, are addressed through the provisions of the Plantation Labour Act which are implemented by the tea estates under the supervision of the state governments. In addition, the Tea Board also undertakes several welfare activities which are supplemental in nature. Such activities aimed at Human Resource Development (HRD) consists of measures for improving the health and hygiene of workers, education of wards of workers and imparting training for improvement of skills.

Funds provided under the Human Resource Development (HRD) during the last three years and the current year are given in the following table:

Total (Rs. in Year crores) 2016-17 4.65 2017-18 5.22 2018-19 2.45 2019-20 (Upto30-6-2019) 0.45 Provisional Total 12.77

Source: Tea Board

For the overall development of the tea industry, including tea growers, the Government of India, through Tea Board is implementing the Tea Development & Promotion Scheme. Different nodal officers of the Tea Board are responsible implementation of the different components of the Scheme. The Deputy Chairman, Tea Board periodically reviews the progress of implementation of the Scheme. All the services for implementation of the various components of the scheme are provided through online e-governance mechanism and all payments are made through e- payment mode i.e. RTGS/NEFT.

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Annexure-1

List of Tea Companies

S.NO. COMPANY NAME 34 GONESHBARI TEA CO. PVT.LTD. 1 SIANG TEA & INDUSTRIES PVT LTD 35 JALLAN GOLAGHAT TEA CO PVT LTD 2 IRRINGMARA TEA CO (1951) LTD 36 GOBINDAPORE TEA CO. PVT LTD 3 SUBLIME AGRO LIMITED 37 BARAK VALLEY CEMENT LTD. 4 DOYAPORE TEA INDUSTRIES (P) LTD. 38 GOPAL KRISHNA TEA CO. PVT. LTD. 5 HASHMUKH.R.PATEL SRI HARISH. R. PATEL. 39 BURAGOHAIN AGRO ASSOCIATES THE ASSAM TEA & TEASEED PLANTATIONS M.K.JOKAI AGRI PLANTATIONS PRIVATE 6 40 (P) LTD. LIMITED 7 THE GROB TEA CO. LTD. 41 DHUNSERI PETROCHEM & TEA LIMITED 8 GILLANDERS ARBUTHNOT & CO. LTD. 42 HARISHPUR TEA CO. PVT. LTD. 9 KANOI PLANTATIONS PVT. LTD. 43 MARUDHAR TEA CO. PVT. LTD. 10 ETHELWOLD ESTATE PRIVATE LIMITED 44 HANUMAN TEXNIT & INDUSTRIES LTD CHOUDHURY TEA & AGRO INDUSTRIES PVT 11 45 STEWART HOLL(INDIA) LTD LTD JALLAN FURKATING TEA COMPANY (PVT) 12 46 RUKMINI TEA INDISTRIES (P) LTD LTD. APEEJAY TEA SURRENDRA CORPORATE 13 B & A LTD. 47 SERVICE PVT. LTD. 14 BANSHIDHAR SEWBHAGOVAN & CO 48 KPC PLANTATIONS PVT LTD 15 GANGABARI TEA CO. PVT. LTD 49 ANDREW YULE & COMPANY LIMITED 16 THE BARAK TEA CMPANY LTD 50 HIAJULI TEA COMPANY LIMITED 17 DHUNSERI TEA & INDUSTRIES LIMITED 51 HOOGRAJULI (ASSAM) TEA CO. LTD. 18 THE AHMED TEA CO PVT LTD 52 GOODRICKE GROUP LIMITED NANDLALL & SONS TEWA INDUSTRIES 19 MCLEOD RUSSEL INDIA LIMITED 53 (P) LTD. 20 ROSSEL TEA LIMITED 54 JAINCO TEA (P) LTD 21 MOHEEMA LTD 55 JOONKTOLLEE TEA & INDUSTRIES LTD. AMALGAMATED PLANTATIONS PRIVATE 22 56 JALANNAGAR TEA ESTATE (P) LTD LIMITED 23 ASSAM COMPANY INDIA LIMITED 57 SPBP TEA PLANTATION LTD. 24 THE BORMAHJAN TEA CO.(1936) LTD. 58 BHUMYA TEA CO. PVT. LTD. SONTONZA CONSTRUCTION & 25 AMRAWATI TEA CO. PVT. LTD. 59 CARRIERS PVT. LTD. 26 RYDAK SYNDICATE LIMITED 60 THE ALL INDIA TEA & TRADING CO LTD 27 THE CHAMONG TEA CO LTD 61 SHREE JAGADAMBA CO PVT. LTD BIJOY KRISHNA SADHAN ASHRAM TRUST 28 62 KHEMANI TEA COMPANY PVT. LTD. BOARD 29 VISHNU TEA & INDUSTRIES PVT LTD 63 KUYKIS LTD. 30 crackIAS.comBAGASA PLANTATION PVT LTD 64 ASSAM TEA CORPORATION LIMITED 31 WARREN TEA LIMITED 65 SURMA TEA & AGRO INDUSTRIES 32 RUNGAMATTEE TEA & INDUSTRIES LTD 66 SONAI RIVER TEA CO. LTD. 33 M K SHAH EXPORTS LIMITED 67 DHELAKHAT TEA CO. LTD 68 DHONESWARI WOOD PRODUCTS LTD 102 NIDHI PACKERSPVT LTD NORTHERN EVANGELICAL LUTHERAN 69 103 RUKONG TEA ESTATE PVT LTD CHURCH 70 MODINAGAR TEA CO. (P) LTD 104 THE JOREHAUT GROUP LIMITED 71 LUXMI TEA CO.LTD. 105 RUTTONPORE PLANTATIONS PVT.LTD. 72 MUKTABARI TEA ESTATES PVY. LTD. 106 SAROJINI TEA CO. (P) LTD.

73 BOCHAPATHAR TEA ESTATE PRIVATE LTD. 107 SALONAH TEA ESTATE (P) LTD. 74 NAHORBARI TEA COMPANY PVT. LTD. 108 SAPOI TEA COMPANY LIMITED 75 NAWKA TEA PLANTATIONS 109 SANKAR TEA CO PVT LTD 76 NAHORJAN TEA CO. (PVT) LTD 110 SENGAJAN TEA CO. PVT. LTD. 77 NARSINGPORE TEA CO LTD 111 BASANTIPUR TEA CO LTD 78 NARAYANPUR TEA CO.(P) LTD. 112 SECONEE T.E PVT. LTD 79 NAMBURNADI TEA CO. LTD. 113 MAUD TEA & SEED CO. LTD. 80 MADARKHAT TEA CO PVT LTD 114 KAMAL TEA INDUSTRIES LTD. 81 SADASIVA TEA CO PVT LTD 115 ASSAM DAIRY FARM 82 KYANG TEA SEED CO. LTD. 116 TONGANI TEA CO LTD 83 BORNEWRIA TEA CO. PVT. LTD. 117 TOCKLAI EXPERIMENTAL STATION 84 NEW MANAS TEA ESTATES PVT LTD 118 MONABARI TEA CO. LTD. 85 NOORBARI TEA CO. PVT. LTD. 119 TONGANAGAON TEA CO PVT LTD 86 PORAPKAR DEALERS PVT.LTD 120 TULIP TEA CO. LTD. 87 PADAM PLANTATIONS PVT LTD 121 H.P.BARUA TEA ESTATES (P)LTD. 88 MANTRI TEA COMPANY PRIVATE LTD 122 KATILCHERRA KHANDSARI SUGAR MILLS 89 BENGAL TEA & FABRICS LTD. 123 UMABARI TEA CO. PVT. LTD. 90 PANBARI TEA COMPANY LIMITED 124 CACHAR NATIVE GOINT STOCK CO.LTD 91 PULSAR COMMERCE PRIVATE LTD 125 KHETAN KRISHI FARM 92 HANUMAN PLANTATION LIMITED 126 MOKALBARI KANOI TEA ESTATE (P) LTD 93 JOREHAUT GROUP LIMITED 127 MADHUTING TEA PVT LTD 94 MADHUPUR TEA ESTATE PVT.LTD. 128 AGARWALLA AGRICULTURAL CO (P) LTD 95 THENGALBARI ESTATES PVT LTD 129 BIJULI TEA PVT. LTD. 96 RANGSALI TEA COMPANY PVT. LTD. 130 KAKADONGA T.E.S. PVT LTD 97 RABBANIA TEA CO(P) LTD 131 KAMALPUR (ASSAM) T.E. (P) LTD. 98 RAJARAMPORE TEA& INDUSTRIES (P) LTD. 132 GUPTU & CO (P) LTD 99 BEMOLAPUR TEA COMPANY PVT LTD 133 GROB TEA CO LTD 100 PRITHUNAGAR TEA CO. (P) LTD. 134 KALYANI TEA CO LTD 101 PURANIMATI PLANTATION PRIVATE LTD 135 FARMEX TEA CO. PVT. LTD.

136 KOOMBER TEA CO. PVT LTD 170 A SHAH AND S SHAH SHRI RAM TEA COMPANY PRIVATE 137 crackIAS.com 171 SHREE KRISHNA TEA CO PVT LTD LIMITED 138 BUNI DOOARS TEA CO. LTD 172 AMBICA TEA ESTATE 139 KOLKATA TEA COMPANY 173 BAJRANGPUR TEA CO. (P) LTD 140 KOLONY TEA ESTATE PVT LTD 174 GOUR NITYA TEA CO INDUS. LTD 141 ENVER PLANTATIONS PVT. LTD. 175 BAGRODIA CHAI PVT.LTD. DARSHANLAL ANAND PRAKASH & SONS 142 176 JALAN CHARITY TRUST PVT LTD KRISHNAKALI TEA ESTATE UNIT OF 143 177 SINGHI INDUSTRIES PVT LTD RADHARANI T.E. 144 LALLAMUKH TEA CO. PVT. LTD 178 BANWARIPUR T.E.

145 HATIGARH ASSOCIATES

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 FDI IN MULTI - BRAND RETAIL Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Foreign Capital, Foreign Trade & BOP

Ministry of Commerce & Industry FDI in Multi - Brand Retail

Posted On: 10 JUL 2019 4:40PM by PIB Delhi

India has received FDI in multi-brand retail from one foreign company of United Kingdom. State/UT-wise data of FDI inflow is not centrally maintained.

There is no proposal under consideration of the Government to increase Foreign Direct Investment (FDI) in multi brand retail sector in the country.

The retail market sector depends on a number of factors, including FDI. However, FDI is largely a matter of private business decisions. FDI inflows depend on a host of factors such as availability of natural resource, market size, infrastructure, general investment climate as well as macro-economic stability and investment decision of foreign investors.

Under the Foreign Direct Investment (FDI) Policy, the details of norms for undertaking multi- brand retail trading in the country is given below:

FDI Policy in Multi Brand Retail Trading

% of Equity/ Sector/Activity Entry Route FDI Cap Multi Brand Retail Trading 51% Government

1. FDI in multi brand retail trading, in all products, will be permitted, subject to the following conditions: (i) Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry,fishery and meat products, may be unbranded. crackIAS.com(ii) Minimum amount to be brought in, as FDI, by the foreign investor, would be USD 100 million.

(iii) At least 50% of total FDI brought in the first tranche of USD 100 million, shall be invested in 'back-end infrastructure' within three years, where ‘back-end infrastructure’ will include capital expenditure on all activities, excluding that on front-end units; for instance, back-end infrastructure will include investment made towards processing, manufacturing, distribution, design improvement, quality control, packaging, logistics, storage, ware-house and agriculture market produce infrastructure. Expenditure on land cost and rentals, if any, will not be counted for purposes of backend infrastructure. Subsequent investment in backend infrastructure would be made by the MBRT retailer as needed, depending upon its business requirements.

(iv) At least 30% of the value of procurement of manufactured/processed products purchased shall be sourced from Indian micro, small and medium industries, which have a total investment in plant & machinery not exceeding USD 2.00 million. This valuation refers to the value at the time of installation, without providing for depreciation. The ‘small industry’ status would be reckoned only at the time of first engagement with the retailer, and such industry shall continue to qualify as a ‘small industry’ for this purpose, even if it outgrows the said investment of USD 2.00 million during the course of its relationship with the said retailer. Sourcing from agricultural co-operatives and farmers’ co-operatives would also be considered in this category. The procurement requirement would have to be met, in the first instance, as an average of five years’ total value of the manufactured/processed products purchased, beginning 1st April of the year during which the first tranche of FDI is received. Thereafter, it would have to be met on an annual basis.

(v) Self-certification by the company, to ensure compliance of the conditions at serial nos. (ii), (iii) and (iv) above, which could be cross-checked, as and when required. Accordingly, the investors shall maintain accounts, duly certified by statutory auditors.

(vi) Retail sales outlets may be set up only in cities with a population of more than 10 lakh as per 2011 Census or any other cities as per the decision of the respective State Governments, and may also cover an area of 10 kms around the municipal/urban agglomeration limits of such cities; retail locations will be restricted to conforming areas as per the Master/Zonal Plans of the concerned cities and provision will be made for requisite facilities such as transport connectivity and parking.

(vii) Government will have the first right to procurement of agricultural products.

viii. The above policy is an enabling policy only and the State Governments/Union Territories would be free to take their own decisions in regard to implementation of the policy. Therefore, retail sales outlets may be set up in those States/Union Territories which have agreed, or agree in future, to allow FDI in MBRT under this policy. The list of States/Union Territories which have conveyed their agreement is at (2) below. Such agreement, in future, to permit establishment of retail outlets under this policy, would be conveyed to the Government of India through the Department of Industrial Policy & Promotion and additions would be made to the list at (2) below accordingly. The establishment of the crackIAS.comretail sales outlets will be in compliance of applicable State/Union Territory laws/ regulations, such as the Shops and Establishments Act etc. ix. Retail trading, in any form, by means of e-commerce, would not be permissible, for companies with FDI, engaged in the activity of multi-brand retail trading.

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 GROWTH IN MANUFACTURING SECTOR Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Commerce & Industry Growth in Manufacturing Sector

Posted On: 10 JUL 2019 4:38PM by PIB Delhi

The growth of India’s Manufacturing Gross Value Added (GVA) and Gross Domestic Product (GDP) from the year 2005-06 at constant (2011-12) prices is given below:

Growth rate (in per cent) of Manufacturing GVA and GDP at constant (2011-12) prices Year Growth rate of Manufacturing Growth rate of GDP 2005-06 9.3 7.9 2006-07 17.8 8.1 2007-08 7.0 7.7 2008-09 4.7 3.1 2009-10 11.0 7.9 2010-11 7.7 8.5 2011-12 3.1 5.2 2012-13 5.5 5.5 2013-14 5.0 6.4 2014-15 7.9 7.4 2015-16 13.1 8.0 2016-17 7.9 8.2 2017-18 5.9 7.2 2018-19 6.9 6.8

Source: National Statistical Office. crackIAS.com The figures for the years 2016-17, 2017-18 and 2018-19 are provisional

As per the latest available estimates of GDP by National Statistical Office, the share of GVA of manufacturing sector in GDP at constant prices at 2011-12 for the last three years is given below:

Share (in per cent) of Manufacturing GVA in GDP at constant prices (2011-12) 2016-17 2017-18 2018-19 Share of manufacturi 16.7 16.5 16.5 ng

Source: National Statistical Office.

The figures for the years 2016-17, 2017-18 and 2018-19 are provisional

The Government has been continuously taking steps to boost manufacturing and spur economic growth. It aims at creating a conducive environment by streamlining the existing regulations and processes and eliminating unnecessary requirements and procedures. ‘Make in India’ programme aims at making India a global hub for manufacturing, research and innovation and an integral part of the global supply chain. Several steps to boost domestic manufacturing are being taken as part of schemes such as ‘Startup India’, ‘Ease of Doing Business’, Modified Industrial Infrastructure Upgradation Scheme, Business Reform Action Plan and Intellectual Property Rights (IPR) Policy. Foreign Direct Investment (FDI) policy and procedures have been simplified and liberalized progressively.

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Lok Sabha today.

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END Downloaded from crackIAS.com crackIAS.com© Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 LAUNCH OF PHASE-II OF DBT IN FERTILIZER SUBSIDY Relevant for: Indian Economy | Topic: Issues related to direct & indirect Farm Subsidies and MSP

Ministry of Chemicals and Fertilizers Launch of Phase-II of DBT in Fertilizer Subsidy

Posted On: 10 JUL 2019 12:59PM by PIB Delhi

Union Minister for Chemicals and Fertilizers, Shri D.V. Sadananda Gowda launched the Phase- II of the Direct Benefit Transfer of Fertilizer Subsidy (DBT 2.0), here today. Minister of State for Shipping (IC) and Chemicals & Fertilizers, Shri Mansukh L. Mandaviya also graced the occasion. The Department of Fertilizers (DoF) has implemented the Phase-I of Direct Benefit Transfer (DBT) system in fertilizer subsidy pan-India in Fertilizers w.e.f. March 2018.

Talking about Prime Minister, Shri Narendra Modi’s vision of ‘Less Government, More Governance, Shri Gowda said that only by bringing transparency in administration can the Government bring a positive change in lives of the people. DBT in fertilizer subsidy is such a step in the direction of bringing ease of living in the lives of farmers through use of modern technology and plugging leakages, pilferages and black marketing, the Minister added.

The new initiatives of DBT 2.0 are as under:

● DBT Dashboards: In order to facilitate accurate information gathering and decision- making w.r.t. the position of requirement/supply/availability of various fertilizers at National, State and District levels, the DoF has developed various dashboards. These dashboards provide various reports regarding the Fertilizer Stock position at ports, plants, in States, at District levels; Proportionate requirement for the season and availability of stocks at various levels; Top 20 buyers; Frequent buyers; Retailers not selling fertilizers etc. The reports would facilitate real-time monitoring of the availability and sale of fertilizers within each State/UT. Public can access the dashboards by clicking the e-urvarak website of DoF (www.urvarak.nic.in). ● PoS 3.0 Software: The Multi-lingual facility would provide Aadhar virtual ID option for registration, login and sale activity in DBT software. It would also have a provision for area-specific, crop-specific recommendations based on Soil Health Card (SHC) data. Further, it would capture sale to farmers, mixture manufacturers, planter association separately. ● Desktop PoS Version: Keeping in view the various operational challenges viz. limited PoS vendors,crackIAS.com rush of sales due to peak season etc. the department has developed a multilingual desktop version of PoS software as an alternative or added facility to PoS devices. Retailers with laptops and computer systems can use high-speed broadband service for fertilizer sales. The Desktop software is more robust and secure as the application is developed and handled directly from the central HQ team at DoF. Addressing the gathering, Shri Mansukh Mandaviya laid stress on e-governance as a platform to achieve good governance in the country. Talking about the new initiatives under DBT 2.0, the Minister said that these by implementation of second phase of DBT, the system would become more transparent and the penetration of fertilizer subsidy would further be increased in the country. Phase-I DBT system in Fertilizers (DBT 1.0) envisaged the release of 100% subsidy on various fertilizer grades to the fertilizer companies on the basis of actual sales made by the retailer to the beneficiaries. The Phase-II of DBT will explore the feasibility of direct cash transfer to farmer’s accounts. An expert committee under NITI Aayog has been constituted on 28.09.2017 as per the request of the DoF, to suggest a model for the implementation of phase-2.

A Project Monitoring Cell was set up at DoF to oversee implementation of DBT exclusively. 24 State Coordinators have been appointed across all States to monitor the on-going DBT activities.

Implementation of the DBT Scheme requires deployment of PoS devices at every retailer shop, training of retailers for operating PoS device. Across the country, Lead Fertilizer Supplier (LFS) have conducted 8943 training sessions till date. 2.24 Lakh PoS devices have been deployed across all States. 670.99 Lakh Metric tonnes Fertilizers have been sold through PoS devices till June 2019.

To address network connectivity issues, DoF has come up with various options as under:

● PoS devices were provided with multiple connectivity options such as Wi-Fi, LAN, PSTN, SIM, etc. ● A network survey/assessment can be conducted at retail shops, to identify the telecom service providers having good connectivity in that area. ● Simple measures such as attaching an antenna to the PoS device can give better signal reception. To address peak season sales, a single retailer can install more than one PoS device at the retail point. There is a provision to use maximum up to 5 PoS devices at a single retail point under DBT system.

Further, a dedicated 15-member Multi-lingual Help Desk has been set up to provide quick response to the queries of wide range of stakeholders across the country as a preparatory to DBT implementation. The helpdesk will operate from 9.30 am to 6.00 pm on all working days including Saturdays. The toll free number of the helpdesk is 1800115501. Further, WhatsApp is being used extensively for quick response to grievances of various stakeholders.

To address the issues of malfunctioning PoS devices, separate toll free lines have been provided by PoS vendors viz., Visiontek, Analogics and Oasys. Dedicated manpower/vendor support system has been provided by the PoS vendors across all States. Further, DBT State Coordinators have been appointed by DoF in every State/UT to monitor the implementation of DBT and for quick resolution of hardware/software problems.

Dignitaries on the dais included Secretary, Fertilizers, Shri Chhabilendra Roul, Additional Secretary,crackIAS.com Fertilizers, Shri Dharam Pal. The gathering comprised of the who’s who of fertilizer sector including CMDs of Fertilizer Cos., along with senior officers of DoF.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 RISE IN NPAS OF PSBS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Rise in NPAs of PSBs

Posted On: 09 JUL 2019 8:19PM by PIB Delhi

As per Reserve Bank of India (RBI) data on domestic operations, aggregate gross advances of PSBs increased from Rs. 16,96,051 crore as on 31.3.2008 to Rs. 45,90,570 crore as on 31.3.2014. As per RBI inputs, the primary reasons for spurt in stressed assets have been observed to be, inter-alia, aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of Non-Performing Assets (NPAs). As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for. Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of PSBs, as per RBI data on domestic operations, rose from Rs. 2,67,065 crore as on 31.3.2015, to Rs. 8,45,475 crore as on 31.3.2018, and as a result of Government’s 4R’s strategy of recognition, resolution, recapitalisation and reforms, have since declined by Rs. 1,35,366 crore to Rs. 7,10,109 crore as on 31.3.2019 (provisional data as reported by RBI on 2.7.2019).

Government adopted the comprehensive 4R’s strategy consisting of recognition of NPAs transparently, resolution and recovering value from stressed accounts, recapitalising Public Sector Banks (PSBs), and reforms in PSBs and financial ecosystem to ensure a responsible and clean system. Steps taken under these strategies to expedite and enable resolution of NPAs of PSBs, and to improve the condition of banks include, inter-alia, the following:

i. Change in credit culture was effected, with the Insolvency and Bankruptcy Code (IBC) fundamentally changing the creditor-borrower relationship, taking away control of the defaulting company from promoters/owners and debarring wilful defaulters from the resolution process and debarring them from raising funds from the market. ii. Over the last four financial years, PSBs were recapitalised to the extent of Rs. 3.12 lakh crore, with infusion of Rs. 2.46 lakh crore by the Government and mobilisation of over Rs. 0.66 lakh crore by PSBs themselves. iii. Key reforms were instituted in PSBs as part of PSBs Reforms Agenda, include the following: iv.crackIAS.comBoard-approved Loan Policies of PSBs now mandate tying up necessary clearances/approvals and linkages before disbursement, scrutiny of group balance-sheet and ring-fencing of cash flows, non-fund and tail risk appraisal in project financing. v. Use of third-party data sources for comprehensive due diligence across data sources has been instituted, thus mitigating risk on account of misrepresentation and fraud. vi. Monitoring has been strictly segregated from sanctioning roles in high-value loans, and specialised monitoring agencies combining financial and domain knowledge have been deployed for effective monitoring of loans above Rs. 250 crore. vii. To ensure timely and better realisation in one-time settlements (OTSs), online end-to-end OTS platforms have been set up. Enabled by the above steps, financial gains from cleaning of the banking system are now amply visible. Gross NPAs of PSBs, as per RBI data on domestic operations, have reduced over the last financial year (provisional data) by Rs. 1,35,366 crore, and as per RBI data on global operations, PSBs have recovered an amount of Rs. 3,09,568 crore over the last four financial years, including a record recovery of Rs. 1,21,076 crore in the last financial year (provisional data).

As per RBI data on domestic operations, the gross NPAs of PSBs, as on 30.6.2014, 31.3.2017, and 31.3.2019 (provisional data) were Rs. 2,24,542 crore, Rs. 6,41,057 crore and Rs. 7,10,109 crore respectively, which amounts to an increase of 10.77% over the last three financial years. RBI has apprised that the details of NPAs of PSBs as on 30.6.2019 are not available. Bank-wise details are at Annex.

Note: Figures cited above for PSBs for 31.3.2019 exclude those for IDBI Bank Limited, which was recategorised as a private sector bank by RBI with effect from 21.1.2019.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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Annex

Gross NPA of Public Sector Banks

GNPA % age increase between Bank As on As on As on 30.6.2 31.3.2 31.3.2 31.3.2017 014 017 019 and Asset Quality Review crackIAS.com31.3.2019 (AQR) initiated in 2015 for 20,52 28,69 clean and fully provisioned Allahabad Bank 7,599 39.85% 0 8 bank balance-sheets revealed high incidence of 17,67 28,97 Andhra Bank 6,827 63.97% Non-Performing Assets 0 4 (NPAs). As a result of AQR 10,64 34,93 40,38 and subsequent transparent Bank of Baroda 15.61% 1 5 8 recognition by PSBs, stressed accounts were 11,16 42,72 51,16 Bank of India 19.76% reclassified as NPAs and 0 4 7 expected losses on 17,18 15,32 Bank of Maharashtra 3,761 (-)10.85% 9 4 31,80 36,16 Canara Bank 7,905 13.72% 1 5 11,44 27,25 32,35 Central Bank of India 18.73% 9 1 6 17,04 20,72 Corporation Bank 5,470 21.58% 5 4 12,61 12,76 Dena Bank 3,169 1.18% 9 8 10,76 38,22 IDBI Bank Limited - - 2 3 stressed loans, not provided for earlier under 13,15 Indian Bank 4,415 9,588 37.21% flexibility given to 6 restructured loans, were 32,52 32,41 Indian Overseas Bank 8,781 (-)0.33% provided for. All such 1 6 schemes for restructuring Oriental Bank of 22,85 21,71 stressed loans were 5,983 (-)5.00% Commerce 9 7 withdrawn. Primarily as a result of transparent Punjab and Sind Bank 3,010 6,298 8,606 36.65% recognition of stressed 19,33 53,12 76,72 assets as NPAs, the gross Punjab National Bank 44.43% 5 1 4 NPAs of Public Sector Banks (PSBs) increased. 56,83 1,05,5 1,70,8 State Bank of India (SBI) 61.83% Enabled by Government’s 0 49 13 4R’s strategy, as per RBI State Bank of Bikaner and 10,67 2,331 data on domestic Jaipur 7 operations, PSBs have 18,21 recovered Rs. 3,09,568 State Bank of Hyderabad 6,174 2 crore over the last four Merge financial years, including State Bank of Mysore 2,490 9,915 d Merged record recovery of Rs. 17,84 with with SBI 1,21,076 crore during 2018- State Bank of Patiala 3,375 7 SBI 19 (provisional data as reported by RBI on State Bank of Travancore 3,282 8,817 2.7.2019). Bharatiya Mahila Bank 0 55 Limited 15,66 22,34 Syndicate Bank 4,742 42.70% 2 8 crackIAS.com21,69 29,23 UCO Bank 5,982 34.72% 9 3 30,92 47,55 Union Bank of India 9,902 53.76% 8 4 10,95 12,05 United Bank of India 7,097 10.06% 2 3 Vijaya Bank 2,069 6,382 8,923 39.82% Source: RBI (domestic operations) Note: IDBI Bank Limited was recategorised as a private sector bank by RBI with effect from 21.1.2019

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 HEALTH OF LIVESTOCK AND ANIMALS Relevant for: Indian Economy | Topic: Economics of Animal-Rearing incl. White, Blue & Pink Revolutions

Ministry of Fisheries, Animal Husbandry & Dairying Health of Livestock and Animals

Posted On: 09 JUL 2019 6:40PM by PIB Delhi

For promotion of health of livestock and animals, the Department of Animal Husbandry & Dairying implements a Centrally Sponsored Scheme “Livestock Health & Disease Control” (LH&DC), which envisages control & containment of economically important animal diseases by providing central financial assistance to the States. Under this scheme, vaccination is carried out for control of diseases like Foot and Mouth Disease (FMD), Peste des Petits Ruminants (PPR), Brucellosis, Anthrax, Hemorrhagic Septicemia (HS), Black Quarter (BQ), Classical Swine Fever, Ranikhet disease, etc. This scheme also provides for establishment & strengthening of veterinary hospitals and dispensaries for veterinary services. Training of veterinarians and para- veterinarians is conducted for latest techniques, technology and advancement in treatments.

To prevent the ingress of exotic animal diseases into the country through imported Livestock and Livestock Products, this Department has setup 6 (six) Animal Quarantine and Certification Services Centers (AQCS) in the country at New Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore.

This Department provides financial assistance for strengthening of the 5 (five) Regional Disease Diagnostic Laboratories (RDDLs) at Jalandhar, Banglore, Kolkata, Pune, Guwahati and a Centre for Animal Disease Research & Diagnosis (CADRAD) of IVRI Izatnagar to enhance disease diagnostic facilities in the country.

In view of economic importance of Foot & Mouth Disease (FMD) and Brucellosis, the National Animal Disease Control Programme for Foot and Mouth Disease (FMD) and Brucellosis (NADCP) has been approved by Cabinet on 31.05.2019 as a new Central Sector Scheme with a total outlay of Rs.13,343.00 crore for five years (2019-24). An amount of Rs.2682.84 crore is proposed for Financial Year 2019-20. It has following components:

I. Foot and Mouth Disease (FMD) Control Programme - It envisages 100% vaccination coverage of cattle, buffaloes, sheep, goats and pigs at six-months interval in the entire country. Further, animals would be identified using unique animal identification ear tags. The programme also includes de-worming of the targeted population of livestock twice a year. II. BrucellosiscrackIAS.com Control Programme: It envisages 100% vaccination coverage of female cattle and buffalo calves (4-8 months of age) once in a life time.

This information was given in a written reply by the Minister of State for Fisheries, Animal Husbandry and Dairying, Shri Sanjeev Balyan in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 NPAS WRITTEN OFF BY PSBS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance NPAs Written Off By PSBs

Posted On: 09 JUL 2019 8:26PM by PIB Delhi

As per inputs received from Public Sector Banks (PSBs), valuation reports are obtained from banks’ empanelled valuers and banks do not follow a practice of obtaining valuation reports from practising member of the Institute of Chartered Accountants of India (ICAI).

As per inputs received from PSBs, till 31.3.2019, resolution plans have been approved in 68 cases by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 (IBC). The total resolution amount approved in these cases was Rs. 65,320 crore. Provision held by PSBs in these cases was Rs. 33,556 crore as on 31.3.2019. PSBs provided for an additional amount of Rs. 21,727 crore, which amounts to 18.02% of the principal outstanding in these accounts.

As per inputs received from PSBs, as on 31.3.2019, FIRs have been filed against 3,154 wilful defaulters.

To strengthen PSBs, Government has implemented a comprehensive 4R’s strategy consisting of recognition of NPAs transparently, resolution and recovering value from stressed accounts, recapitalising PSBs, and reforms in PSBs and financial ecosystem to ensure a responsible and clean system. Steps taken under these strategies include, inter-alia, the following:

1. Change in credit culture was effected, with the IBC fundamentally changing the creditor- borrower relationship, taking away control of the defaulting company from promoters/owners and debarring wilful defaulters from the resolution process and debarring them from raising funds from the market. 2. Over the last four financial years, PSBs were recapitalised to the extent of Rs. 3.12 lakh crore, with infusion of Rs. 2.46 lakh crore by the Government and mobilisation of over Rs. 0.66 lakh crore by PSBs themselves. 3. Key reforms were instituted in PSBs as part of PSBs Reforms Agenda, which include, inter-alia, the following: crackIAS.com 1. Board-approved Loan Policies of PSBs now mandate tying up necessary clearances/approvals and linkages before disbursement, scrutiny of group balance-sheet and ring-fencing of cash flows, non-fund and tail risk appraisal in project financing. 2. Use of third-party data sources for comprehensive due diligence across data sources has been instituted, thus mitigating risk on account of misrepresentation and fraud. 3. Monitoring has been strictly segregated from sanctioning roles in high-value loans, and specialised monitoring agencies combining financial and domain knowledge have been deployed for effective monitoring of loans above Rs. 250 crore. 4. To ensure timely and better realisation in one-time settlements (OTSs), online end-to-end OTS platforms have been set up. Gains to PSBs are amply visible in their growing financial strength. As per RBI data on global operations (including provisional data for March 2019, as reported on 2.7.2019), gross NPAs of PSBs have reduced over the last financial year by Rs. 1,06,032 crore, record recovery of Rs. 3,09,568 crore has been effected over the last four financial years (excluding recovery in IDBI Bank Limited made during 2018-19), and domestic credit growth has risen to 10.20% during financial year 2018-19.

Growing strength of PSBs is also evident from the fact that all PSBs meet minimum regulatory capital requirement, 6 PSBs are now out of PCA restrictions, balance-sheets of PSBs have been cleaned up through transparent recognition of NPAs and their provision coverage ratio is at its highest level in seven years, and asset quality has improved sharply.

Note: NPA Figures cited above for PSBs include those for IDBI Bank Limited, which was recategorised as a private sector bank by RBI with effect from 21.1.2019.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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Ministry of Finance Waiving off Loans of Farmers in Drought Prone Areas

Posted On: 09 JUL 2019 8:25PM by PIB Delhi

State-wise details of agriculture credit disbursement as reported by the National Bank for Agriculture and Rural Development (NABARD) during the year 2018-19 (provisional) is given in Annexure.

There is no proposal under consideration of the Union Government to waive off loans of farmers. However, to reduce the debt burden of farmers, the following major initiatives have been taken:

· With a view to ensure availability of agriculture credit at a reduced interest rate of 7% p.a. to the farmers, the Government of India in the Department of Agriculture Cooperation and Farmers’ Welfare (DAC&FW) implements an interest subvention scheme for short term crop loans up to Rs. 3.00 lakh. The scheme provides interest subvention of 2% per annum to Banks on use of their own resources. Besides, additional 3% incentive is given to the farmers for prompt repayment of the loan, thereby reducing the effective rate of interest to 4%.

· Under the aforesaid interest subvention scheme, to provide relief to farmers affected by natural calamities, the interest subvention (2%) on crop loan continues to be available to banks for the first year on the restructured amount. Such restructured loans may, however, attract normal rate of interest from the second year onwards as per the policy laid down by the Reserve Bank of India (RBI).

· In order to provide relief to the farmers affected due to severe natural calamities, the Government in DAC&FW has decided that interest subvention of 2% per annum will be made available to banks for first three years/entire period (subject to a maximum of five years) on the restructured loan amount, and in all such cases the benefit of prompt repayment incentive at 3% per annum shall also be provided to the affected farmers. The grant of such benefits in cases of severe natural calamities shall, however, be decided by a High Level Committee (HLC) based on the recommendation of Inter-Ministerial Central Team (IMCT) and Sub Committee of National Executive Committee (SC-NEC).

crackIAS.com· Reserve Bank of India (RBI) has issued directions for Relief Measures to be provided by respective lending institutions in areas affected by natural calamities which, inter alia, include restructuring/rescheduling of existing crop loans and term loans, extending fresh loans, relaxed security and margin norms, moratorium, etc. These directions have been so designed that the moment calamity is declared by the concerned District Authorities, they are automatically set in motion without any intervention, thus saving precious time. The benchmark for initiating relief measures by banks has been reduced from 50% to 33% crop loss in line with the National Disaster Management Framework. Banks have been advised not to insist for additional collateral security for restructured loans. · Loan to distressed farmers indebted to non-institutional lenders is an eligible category of farm credit under the Priority Sector Lending (PSL) as per directions issued by RBI.

· To enhance coverage of small and marginal farmers in the formal credit system, RBI has decided to raise the limit for collateral-free agriculture loans from Rs. 1 lakh to Rs. 1.6 lakh.

· The requirement of ‘no due’ certificate has also been dispensed with for small loans upto Rs.50,000/- to small and marginal farmers, share croppers and the like and, instead, only a self-declaration from the borrower is required.

· To bring small, marginal, tenant farmers, oral lessees, etc. into the fold of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks.

· Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN) scheme has been implemented to provide an assured income support to all farmers, irrespective of the size of their land holdings subject to the exclusion factor. Under this scheme direct income support @ of Rs. 6,000 per year will be transferred directly into the bank accounts of beneficiary farmers, in three equal installments of Rs.2,000 each.

· Pradhan Mantri Fasal Bima Yojana (PMFBY) provides a comprehensive insurance cover against failure of insured crops due to non-preventable natural risks, thus providing financial support to farmers suffering crop loss/ damage arising out of unforeseen events; stabilizing the income of farmers to ensure their continuance in farming; and encouraging them to adopt innovative and modern agricultural practices.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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Annexure AgriculturecrackIAS.com Credit Disbursemsent ( Number of Accounts in lakh and Amount in Rs.Crore) 2018-19 (Provisional) Number of S.No States Amount Disbursed Accounts 1 DELHI 0.26 24,422.02 2 HARYANA 31.54 63,126.07 HIMACHAL 3 10.31 9,017.77 PRADESH JAMMU & 4 9.53 13,117.12 KASHMIR 5 PUNJAB 34.35 76,858.90 6 RAJASTHAN 77.65 83,266.87 7 CHANDIGARH UT 0.37 1,991.19 ARUNACHAL 8 0.05 54.54 PRADESH 9 ASSAM 8.90 6,940.52 10 MANIPUR 0.22 247.94 11 MEGHALAYA 0.30 196.87 12 MIZORAM 0.11 362.69 13 NAGALAND 0.38 209.40 14 SIKKIM 0.12 156.44 15 TRIPURA 3.82 2,643.64 16 A & N ISLAND 0.10 128.87 17 BIHAR 43.19 32,152.73 18 JHARKHAND 8.88 3,960.07 19 ODISHA 58.92 27,346.75 20 WEST BENGAL 60.60 45,941.20 21 CHHATTISGARH 17.75 10,328.50 22 MADHYA PRADESH 82.34 62,112.81 23 UTTARAKHAND 7.04 10,273.97 24 UTTAR PRADESH 102.19 88,647.09 25 GOA 0.62 1,330.58 26 GUJARAT 39.31 66,558.40 27 MAHARASHTRA 63.01 86,809.11 28 D & N HAVELI UT 0.02 62.19 29 DAMAN & DIU UT 0.01 43.86 30 ANDHRA PRADESH 126.04 124,499.76 31 TELANGANA 49.02 57,606.06 32 KARNATAKA 86.29 72,880.18 crackIAS.com33 KERALA 84.47 90,632.36 34 PUDUCHERRY 3.68 2,782.38 35 TAMILNADU 221.88 188,050.45 36 LAKSHADWEEP UT 0.00 2.92 TOTAL 1233.30 1,254,762.20

Source: NABARD

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 FINANCIAL PROBLEMS IN BANKS DUE TO FRAUDS AND NPAS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Financial Problems in Banks Due to Frauds and NPAs

Posted On: 09 JUL 2019 8:24PM by PIB Delhi

As per Reserve Bank of India (RBI) data on global operations, aggregate gross advances of nationalised banks increased from Rs. 11,33,137 crore as on 31.3.2008 to Rs. 34,03,717 crore as on 31.3.2014. As per RBI inputs, the primary reasons for spurt in stressed assets have been observed to be, inter-alia, aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of NPAs. As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for. Further, all such schemes for restructuring stressed loans were withdrawn. Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of nationalised banks, as per RBI data on global operations, rose from Rs. 1,92,809 crore as on 31.3.2015, to Rs. 4,62,114 crore as on 31.3.2017, and to Rs. 6,16,586 crore as on 31.3.2018, and as a result of Government’s 4R’s strategy of recognition, resolution, recapitalisation and reforms, have since declined by Rs. 49,795 crore to Rs. 5,66,791 crore as on 31.3.2019 (provisional data). The details of gross NPAs for financial year 2019-20 upto May is not available as data is collated only on a quarterly basis.

Government has implemented a comprehensive 4R’s strategy consisting of recognition of NPAs transparently, resolution and recovering value from stressed accounts, recapitalising Public Sector Banks (PSBs), and reforms in PSBs and financial ecosystem to reduce NPAs and strengthen PSBs. Steps taken under this strategy include, inter-alia, the following:

1. Board-approved Loan Policies of PSBs now mandate tying up necessary clearances/approvals and linkages before disbursement, scrutiny of group balance-sheet and ring-fencing of cash flows, non-fund and tail risk appraisal in project financing. 2. Use of third-party data sources for comprehensive due diligence across data sources has been instituted, thus mitigating risk on account of misrepresentation and fraud. 3. Monitoring has been strictly segregated from sanctioning roles in high-value loans, and specialised monitoring agencies combining financial and domain knowledge have been deployed for effective monitoring of loans above Rs. 250 crore. 4. To ensure timely and better realisation in one-time settlements (OTSs), online end-to-end OTS platforms have been set up. Enabled by the above steps, financial gains from cleaning of the banking system are now amply visible. Gross NPAs of nationalised banks, as per RBI data on global operations (including provisional data for March 2019, as reported on 2.7.2019), have reduced over the last financial year by Rs. 49,795 crore, and recovery of Rs. 2,19,407 crore has been effected by these banks over the last four financial years, including a record recovery of Rs. 86,013 crore in the last financial year.

Government has taken comprehensive steps to reduce the incidence of frauds in banks. The steps taken include, inter-alia, the following:

i. all accounts exceeding Rs. 50 crore, if classified as NPAs, be examined by banks from the angle of possible fraud, and a report placed before the bank’s Committee for Review of NPAs on the findings of this investigation; ii. examination be initiated for wilful default immediately upon reporting fraud to RBI; and iii. report on the borrower be sought from the Central Economic Intelligence Bureau in case an account turns NPA.

2. Fugitive Economic Offenders Act, 2018 has been enacted to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts. The act provides for attachment of property of a fugitive economic offender, confiscation of such offender’s property and disentitlement of the offender from defending any civil claim. 3. PSBs have been advised to obtain certified copy of the passport of the promoters/directors and other authorised signatories of companies availing loan facilities of more than Rs. 50 crore and, decide on publishing photographs of wilful defaulters, in terms of RBI’s instructions and as per their Board-approved policy and to strictly ensure rotational transfer of officials/employees. The heads of PSBs have also been empowered to issue requests for issue of Look Out Circulars (LOCs). 4. crackIAS.comFor enforcement of auditing standards and ensuring the quality of audits, Government has established the National Financial Reporting Authority as an independent regulator. 5. Instructions/advisories have been issued by Government to PSBs to decide on publishing photographs of wilful defaulters, in terms of RBI’s instructions and as per their Board- approved policy, and to obtain certified copy of the passport of the promoters/directors and other authorised signatories of companies availing loan facilities of more than Rs. 50 crore. 6. In order to bring transparency and accountability in the larger financial system, bank accounts of 3.38 lakh inoperative companies were frozen over the last two financial years. The impact of the above steps is reflected in Reserve Bank of India (RBI)’s Financial Stability Report (FSR) of June 2019. As per FSR, systemic and comprehensive checking of legacy stock of NPAs of PSBs for frauds has helped unearth frauds perpetrated over a number of years, which is getting reflected in increased number of reported incidents of frauds in recent years compared to previous years. Further, details of the amount involved in frauds of Rs. 1 lakh and above that occurred during the last three financial years (FYs), reported by nationalised banks to RBI, as per inputs received from RBI, are as under:

Amount FY of Numb involved occurrence er (in crore Rs.) 2016-17 22,844 1,141 2017-18 6,522 833 2018-19 5,030 404

The details of bank frauds of Rs. 1 lakh and above for financial year 2019-20 up to May are not available as data is collated only on a quarterly basis.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 WAIVING OFF CHARGES ON NEFT AND RTGS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Waiving off Charges on NEFT and RTGS

Posted On: 09 JUL 2019 8:23PM by PIB Delhi

The banks are also advised by RBI to pass on the benefits to their customers for undertaking transactions using RTGS and NEFT systems. This waiver of processing and time varying charges by RBI on banks will reduce the cost of RTGS and NEFT transactions and will give fillip to digital fund movement.

There is an increase in NEFT and RTGS transactions during the last three years as illustrated in the table given below (in crore) :

Year RTGS (Customer + Interbank) NEFT 2016-17 10.78 162.21 2017-18 12.44 194.64 2018-19 13.66 231.89

Source: RBI

As apprised by RBI, total number of online transactions including Real Time Gross Settlement (RTGS), Electronic Clearing Service (ECS), National Electronic Fund Transfer (NEFT), Immediate Payment Service (IMPS), National Automated Clearing House (NACH), Unified Payment Interface (UPI) (including Bharat Interface for Money (BHIM) and Unstructured Supplementary Service Data (USSD)), Prepaid Payment Instruments (PPIs), Credit Cards at Point of Sale (PoS) and online, Debit Cards at Point of Sale (PoS) and online (in crore) since 2016-17 is as follows:

crackIAS.comYear Total Transactions (in crore) 2016-17 977.94 2017-18 1471.19 2018-19 2338.44

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 MINIMUM KYC WALLETS FOR LOW VALUE TRANSACTIONS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Minimum KYC Wallets for Low Value Transactions

Posted On: 09 JUL 2019 8:22PM by PIB Delhi

As apprised by the Ministry of Electronics and Information Technology (MeitY), Government of India has initiated incentive schemes such as BHIM cash-back scheme for individuals, BHIM incentive scheme for merchants, BHIM Aadhaar merchant incentive scheme for promotion and wider adoption of digital payment.

Further, MeitY vide their gazette notification No. 6(19)/2017-DPD-1 dated 27th December, 2017 has notified the reimbursement of MDR charges on Debit cards/ BHIM- UPI and BHIM Aadhaar Pay transactions of value upto Rs. 2000 for two years effective from 1st Jan, 2018, in order to promote and enable acceptance of UPI based payments at the small and micro merchants.

Also Reserve Bank of India (RBI), as the regulator of Payment and Settlement Systems in the country, sets the necessary regulatory framework, generally, through a consultative process, to ensure that different types of payment systems thrive in the country to meet the payment needs of different segments of society. The regulatory framework has also encouraged enhanced participation of non-bank entities in the payments domain. Details of the various payment systems catering to the financial needs of society are at Annex - I.

As apprised by Reserve Bank of India (RBI), they have issued ‘Master Direction on Issuance and Operation of Prepaid Payment Instruments (Master Direction on PPIs) dated October 11, 2017 (updated as on February 25, 2019). Accordingly para 9.1 (i) of this Master Direction, the PPIs is allowed for a period of 18 months by accepting minimum details of PPI holder.crackIAS.com KYC of such PPIs need to be completed within this period, else no further loading is allowed. However, the balance is allowed to be utilised for purchase of goods and services.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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Annex - I

Details of the various payment systems S.No. catering to the financial needs of society National Financial Switch (NFS) for ATM 1 transactions Cheque Truncation System (CTS) for 2 image-based cheque clearing 3 Express Cheque Clearing System (ECCS) Immediate Payment Service (IMPS) for 24 4 x 7 payments Cards for physical and e-commerce 5 transactions Aadhaar Enabled Payments System (AEPS) for Aadhaar authenticated 6 payments predominantly at Business Correspondents. National Automated Clearing House 7 (NACH) for bulk and repetitive payments and receipts. Aadhaar Payment Bridge System (APBS) 8 for DBT payments. Unified Payments Interface (UPI) for mobile 9 payments; National Unified USSD Platform (NUUP) for mobile payments. BHIM-Aadhaar Pay – for mobile payments 10 for merchant transactions. Bharat Bill Payments System (BBPS) – for 11 pan-India bill payments. National Electronic Toll Collection (NETC) – 12 for toll payments. National Electronic Funds Transfer (NEFT) – for funds transfer across all computerised 13 branches of banks (member / sub-member crackIAS.comof NEFT) across the country. Real Time Gross Settlement (RTGS) system – for transfer of money from one 14 bank account to another on a "real time" and on "gross" basis. Prepaid Payment Instruments (PPIs) – for facilitating purchase of goods and services, 15 including funds transfer, against the value stored on such instruments. White Label ATMs (WLAs) – to bridge the 16 gap in ATM infrastructure particularly in rural and semi urban areas. Trade Receivables Discounting System (TReDS) – for facilitating the financing of 17 trade receivables of MSMEs through multiple financiers.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-11 BANK REFORMS TO CHECK FRAUDS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Bank Reforms to Check Frauds

Posted On: 09 JUL 2019 8:21PM by PIB Delhi

Occurrence of frauds was enabled by laxity in the financial system, and the underlying causes have been systematically dealt with by the Government through comprehensive steps for reduction in occurrence of frauds, and their proactive checking and timely detection. The steps taken in this regard include, inter-alia, the following:

1. Government has issued “Framework for timely detection, reporting, investigation etc. relating to large value bank frauds” to Public Sector Banks (PSBs), for systemic and comprehensive checking of legacy stock of their non-performing assets (NPAs), which provides, inter-alia, that— 2. all accounts exceeding Rs. 50 crore, if classified as NPAs, be examined by banks from the angle of possible fraud, and a report placed before the bank’s Committee for Review of NPAs on the findings of this investigation; 3. examination be initiated for wilful default immediately upon reporting fraud to RBI; and 4. report on the borrower be sought from the Central Economic Intelligence Bureau in case an account turns NPA. 5. Fugitive Economic Offenders Act, 2018 has been enacted to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts. The act provides for attachment of property of a fugitive economic offender, confiscation of such offender’s property and disentitlement of the offender from defending any civil claim. 6. PSBs have been advised to obtain certified copy of the passport of the promoters/directors and other authorised signatories of companies availing loan facilities of more than Rs. 50 crore and, decide on publishing photographs of wilful defaulters, in terms of Reserve Bank of India (RBI)’s instructions and as per their Board-approved policy and to strictly ensure rotational transfer of officials/employees. The heads of PSBs have also been empowered to issue requests for issue of Look Out Circulars. 7. For enforcement of auditing standards and ensuring the quality of audits, Government has established the National Financial Reporting Authority as an independent regulator. 8. crackIAS.comInstructions/advisories have been issued by Government to PSBs to decide on publishing photographs of wilful defaulters, in terms of RBI’s instructions and as per their Board- approved policy, and to obtain certified copy of the passport of the promoters/directors and other authorised signatories of companies availing loan facilities of more than Rs. 50 crore. 9. In order to bring transparency and accountability in the larger financial system, bank accounts of 3.38 lakh inoperative companies were frozen over the last two financial years. The impact of the above steps is reflected in RBI’s Financial Stability Report (FSR) of June 2019. As per FSR, systemic and comprehensive checking of legacy stock of NPAs of PSBs for frauds has helped unearth frauds perpetrated over a number of years, which is getting reflected in increased number of reported incidents of frauds in recent years compared to previous years. The details of frauds of Rs. 1 lakh and above that occurred during the last three financial years (FYs), reported by PSBs to RBI, as per inputs received from RBI, are as under:

Amount FY of Number of involved occurrence cases (in crore Rs.) 2016-17 1,745 24,291 2017-18 1,545 6,916 2018-19 739 5,149 Bank-wise details are at Annex.

Note: Figures cited above for PSBs include those for IDBI Bank Limited, which was recategorised as a private sector bank by RBI with effect from 21.1.2019.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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Annex

Details of frauds (Based on date of occurrence - Amount Involved Rs. 1 lakh and above) for Public Sector Banks

Amounts in crore Rs.

FY FY FY Bank Name 2016-17 2017-18 2018-19 Allahabad Bank 63 11 12 Comprehensive measures AndhracrackIAS.com Bank 36 37 11 have been taken to Bank of Baroda 140 84 32 prevent frauds including directions to banks to Bank of India 95 99 52 examine all NPA accounts Bank of Maharashtra 34 32 38 above Rs. 50 crore from Canara Bank 48 50 24 the angle of possible fraud, initiation of criminal Central Bank of India 59 56 45 proceedings, enactment Corporation Bank 52 12 5 of Fugitive Economic Offenders Act 2018, Dena Bank 24 11 3 IDBI Bank Limited 91 94 99 Indian Bank 70 47 20 Indian Overseas Bank 53 34 30 creation of Central Fraud Oriental Bank of Commerce 42 24 8 Registry, empowering Punjab and Sind Bank 22 3 0 Bank Heads to request for issue of Look Out Punjab National Bank 101 108 33 Circular, establishment of State Bank of India 469 618 236 National Financial State Bank of Bikaner and Reporting Authority, 5 Jaipur Straight through processing between Core State Bank of Hyderabad 6 Merged Merged Banking System and with with State Bank of Mysore 12 SWIFT, advice to banks to SBI SBI obtain certified copy of State Bank of Patiala 6 passport of promoters State Bank of Travancore 15 /directors of companies Syndicate Bank 127 78 27 availing loan exceeding Rs. 50 crore etc. UCO Bank 31 41 27 Union Bank of India 83 69 15 United Bank of India 29 15 20 Vijaya Bank 32 22 2 Source: RBI

Note: IDBI Bank Limited was recategorised as a private sector bank by RBI with effect from 21.1.2019.

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END crackIAS.comDownloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.thehindu.com Date : 2019-07-12 JOBLESS GROWTH BECOMES MORE SYSTEMIC Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

Concept of business movement, Arrows

The findings of the latest employment survey, called the Periodic Labour Force Survey (2017- 18), are a cause for concern as the scenario is still far from anything that would denote decent employment. The two biggest issues here are: the shrinking share of the labour force; and the rising unemployment.

The labour force participation rate (% of people working or seeking work in the above-15 years age category) in the earlier survey of 2012 was 55.5%. This has shrunk to 49.7% in 2018. There is an absolute decline in the number of workers from 467.7 million in 2012 to 461.5 million in 2018.

Recent attempts by some to create an impression that self-employment has not been captured by the National Sample Survey is absolutely false since the definition of ‘employment’ includes in itself ‘self-’ as well as ‘wage employment’. Within the category of ‘self-employed’, the survey also counts those engaged in ‘unpaid family labour’.

Can the government help create jobs?

The figure for the overall unemployment rate at 6.1% is 2.77 times the same figure for 2012. A few experts have raised doubts about comparability of estimates between the two periods though we feel that they are not substantial issues that prevent anyone from a judicious comparison.

The rise in overall unemployment has both locational and gender dimensions. The highest unemployment rate of a severe nature was among the urban women at 10.8%; followed by urban men at 7.1%; rural men at 5.8%; and rural women at 3.8%.

When we ignore the location of residence, we find that severe unemployment among men at 6.2% was higher than among women at 5.7%. However, given the sharp decline in women’s labour force participation rate, they have been losing out heavily due to the double whammy of exclusion from the labour force and an inability to access employment when included in the labour force. The decline in women’s labour force participation from 31% to 24% means that India is among the countries with the lowest participation of women in the labour force.

The issue of educated unemployment, given its link with not just growth but also with transformativecrackIAS.com development, has never been as acute as at present. Defined as unemployment among those with at least a secondary school certificate, it is at 11.4% compared to the previous survey’s figure of 4.9%.

The sum and substance of the jobs data

But what is significant is that the unemployment rates go up as levels of education go up. Among those with secondary school education, it is 5.7% but jumps to 10.3% when those with higher secondary-level education are considered.

The highest rate is among the diploma and certificate holders (19.8%); followed by graduates (17.2); and postgraduates (14.6%).

Of course, educated persons are likely to have aspirations for specific jobs and hence likely to go through a longer waiting period than their less-educated counterparts. They are also likely to be less economically deprived. But the country’s inability to absorb the educated into gainful employment is indeed an economic loss and a demoralising experience both for the unemployed and those enthusiastically enrolling themselves for higher education.

Here again, the burden is the highest among urban women (19.8%) followed by rural women (17.3%), rural men (10.5%) and urban men (9.2%). Among the educated, women face a more unfavourable situation than men despite a low labour force participation rate. Compared to the earlier 2012 survey, unemployment of educated men has more than doubled in both rural and urban areas and in the case of women, the rate has nearly doubled. However, it is important to remember is that the rate was higher for educated women, when compared to educated men, in both the periods.

It is almost scandalous that youth unemployment rate (unemployment among those in the 15-29 years age category) has reached a high 17.8%. Even here, the women stand more disadvantaged than the men, especially urban women, whose unemployment rate of 27.2% is more than double the 2012 figure of 13.1%. The rate for urban men, at 18.7%, is particularly high as well.

The overall conclusion here is that the trend of ‘jobless growth’ that was till recently confined largely, if not only, to the organised sector has now spread to other sectors of the economy, making it more generalised. This calls for a thorough re-examination of the missing linkages between growth and employment.

K.P. Kannan is a former Director, Centre for Development Studies. G. Raveendran is a former Additional Director General, Central Statistical Organisation

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.thehindu.com Date : 2019-07-12 TREAD WITH CAUTION: ON LABOUR LAWS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

As part of its commitment to simplify and consolidate labour rules and laws under four codes, the Union Cabinet has cleared the Occupational, Safety, Health and Working Conditions Code, a week after it approved the Code on Wages Bill. The latter seeks to include more workers under the purview of minimum wages and proposes a statutory national minimum wage for different geographic regions, to ensure that States will not fix minimum wages below those set by the Centre. These steps should be welcomed. The Code on labour safety and working conditions include regular and mandatory medical examinations for workers, issuing of appointment letters, and framing of rules on women working night shifts. Other codes that await Cabinet approval include the Code on Industrial Relations and the Code on Social Security. Unlike these pending bills, especially the one related to industrial relations that will be scrutinised by labour unions for any changes to worker rights and rules on hiring and dismissal and contract jobs, the two that have been passed should be easier to build a consensus on, in Parliament and in the public sphere. Organised unions have vociferously opposed changes proposed in the Industrial Relations code, especially the proviso to increase the limit for prior government permission for lay-off, retrenchment and closure from 100 workers as it is currently, to 300. The Economic Survey highlighted the effect of labour reforms in Rajasthan, suggesting that the growth rates of firms employing more than 100 workers increased at a higher rate than the rest of the country after labour reforms. But worker organisations claim that the implementation of such stringent labour laws in most States is generally lax. Clearly, a cross- State analysis of labour movement and increase in employment should give a better picture of the impact of these rules.

Simplification and consolidation of labour laws apart, the government must focus on the key issue of job creation. The Periodic Labour Force Survey that was finally made public in late May clearly pointed to the dire situation in job creation in recent years. While the proportion of workers in regular employment has increased, unemployment has reached a 45-year high. The worker participation rate has also declined between surveys held in 2011-12 and 2017-18. The government’s response to this question has either been denial, as was evident after the draft PLFS report was leaked last year, or silence, after it was finally released. In such a situation, the government should be better off building a broader consensus on any major rule changes to existing worker rights rather than rushing through them for the sake of simplification. The consolidated code bills should be thoroughly discussed in Parliament and also with labour unions before being enacted.

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crackIAS.com Source : www.indianexpress.com Date : 2019-07-12 FIRST, LET THERE BE INVESTMENT Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

Bijapurkar is the author of We Are Like That Only and A Never-before World: Tracking the evolution of Consumer India.

The 2019 Economic Survey’s focus on investment as a key driver of economic growth is very welcome. It changes the alarming paradigm that business and media have been working with — since investment is not happening, in order to bolster slowing economic growth the focus of policymaking should shift to boosting consumption, with cash transfers, reduced excise duties, decreased interest rates on retail loans and so on. Why investment has slowed down and how to revive it has not received even a fraction of the public attention that consumption has.

There are few takers for the notion, despite data, that for most of consumer India, unless incomes grow there is no way consumption can or should grow. Only the richest 20 per cent of Indian households (R20), which incidentally is the so-called middle class (based on most people’s mental models of the middle class) have surplus money (income minus expenditure) to grow their expenditure faster than their incomes. The rest have virtually no surplus even in good times.

Consumption growth when economic activity is slow can only come from more consumption by R20, of the things that they consume, much of which is discretionary. Consumption growth from the rest can’t happen unless their incomes grow. This can’t happen if investment is slow resulting in slow economic activity, and hence lower earning opportunities. This problem is even more pronounced given that the majority of Indians, including R20, are self-employed and don’t get a regular income. It is not prudent to say “let them eat cake” by lowering interest rates and encouraging more people to borrow to consume. Most will be hard pressed to pay their EMIs, even at lower interest rates. Economist friends patiently explain why getting a GDP growth number on the back of an unreal, propped up consumption is a good thing to do. “Think of it like a glucose booster shot for the economy,” they say. But are booster shots the best way to deal with a body weakened by ailments?

From this perspective, it is very reassuring that the Economic Survey and Union Budget have stayed away from administering such booster shots as the mainstay of the economic revival strategy, and have focused instead on addressing the fundamental problem of increasing economic activity. Through the mantra of “investment-led growth”, the Economic Survey puts the highestcrackIAS.com priority on strengthening the supply side to rev up economic activity. Through the planned massive infrastructure push in the Budget and the focus on what the Economic Survey calls behavioural nudges, the life-foundation of consumer India, the goose that lays the golden egg of consumption is sought to be strengthened.

It is well known that every unit of improvement in living infrastructure and human capital creates a disproportionate and sustainable jump in consumption over time. The Economic Survey does mention stimulating consumer demand but more in the context of better administration of the minimum wage system. It mentions, in passing, the link between the minimum wage for the poorest sections of citizens and strengthening the middle class, but that is a leap as wide as the chasm that exists in income and social distance between them. It, however, stopped well short of suggesting additional money for the purpose of directly stimulating consumption.

It is also time for the media and India Inc. to buy in and shift the narrative around corporate financial performance from what the government should do to make the macro environment less hostile and more supportive, to what individual companies can do by way of strategy, ability and efforts to improve their performance when consumer incomes are growing slowly. The government of India is not India Inc’s marketing director in charge of making top lines grow.

Growing revenue and profits in times of slow consumer income growth can come from competing across categories for a larger share of the enormous household consumption expenditure that already exists, even after removing around half of it for essentials. In tough times, summer holiday travel and new two-wheelers compete, as do premium toiletries and new clothes. Market share growth is another obvious route available. The last quarter of 2018-19 underscored these two points. Even as the media yelled “doomsday, consumption slows down”, there was a wide variation in levels of performance across different product categories and companies.

Slowdowns in consumption are perceived when expectations based on past growth rates are not met. Fundamental changes are afoot in consumer India, which may require an adjustment of expectations.

Consider televisions. Recently, a stock market analyst said that the macroeconomic scenario is really worse than what we thought because of poor television set sales, despite the World Cup. From the consumer point of view, the answer is clear. The 30 per cent of Indians who are yet to own a TV are seriously low income and will buy one as soon as they have a steady income. The replacement and upgrade demand that had fuelled the category in the past is now more discretionary than ever because the quality and features and service levels of existing TVs are pretty good. Many people are choosing to upgrade their mobile phones instead. Home theatres, once a favourite upgrade category for the rich, are not so hot any more because going to England to watch the match (as you can see from the crowd shown on TV) is the new cool thing.

Let’s take the case of cars: Creating a more favourable macro environment for car companies to do well isn’t necessary. Car sales are restricted to R20 households (a chunk of whom are in rural areas) and ownership in R20 is still so low that there is plenty of room for growth. There’s plenty of surplus money with these people to buy a car and banks love to lend to them. However, if they are choosing not to buy then stimulating consumption by the government is just tapping into their greed and giving money to the poor will not help. It has to be the car companies who tempt them to buy, making long term-short term trade-offs.

The two-wheeler story is different. Two-wheeler buyers come from all income groups across the board, in both rural and urban India, and in the absence of a humming investment-led economy offering plenty of work, and with rising fuel prices, significant buy, replace or upgrade sales aren’tcrackIAS.com going to happen even with stimuli. Two-wheeler buyers are the heart of the Indian consumer and revving up the economy will make them immediately upgrade their foremost productivity tool.

Indian consumers are dying to consume more. Consumption growth will follow income growth, which will follow more available work. That’s why the push for investment and public goods in this budget, rather than a push for propping up consumption, is so important.

Bijapurkar is the author of We Are Like That Only and A Never-before World: Tracking the evolution of Consumer India Download the Indian Express apps for iPhone, iPad or Android

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crackIAS.com Source : www.indianexpress.com Date : 2019-07-12 WAGE IMBALANCE Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

Last week, the Union cabinet approved the revised version of the Code on the Wages Bill. The bill envisages a national minimum wage, linked to factors such as skill level and geographical region. This national wage would effectively serve as a floor wage, with states having the option of setting higher wages. Minimum wage legislation forms a vital component of the architecture for social protection. A well designed minimum wage system, as articulated in the Economic Survey 2018-19, can help “reduce inequalities in income, bridge gender gaps in wages and alleviate poverty”. It could also help address the imbalance of power between workers and employers.

Having said that, the government must carefully think through the consequences of this move for the very constituency it seeks to address. There is concern that if wages are pushed up, without being linked to productivity, companies will respond by hiring fewer workers. In a country where preference for capital intensive production is well documented, despite the abundance of labour, a high minimum wage may further skew the capital-labour ratio. It is also likely that companies will try to circumvent the system by opting to route part of their workforce through informal channels. By pushing up costs, a high minimum wage could erode competitiveness, making certain segments economically unfeasible. Coming at a time when India is struggling to find ways to boost exports, especially those of labour intensive sectors such as garments, such a move might have unintended consequences. And while the bill has proposed to take into account regional variations, wage differences across regions could impact labour mobility. Then, there’s also the structure of the labour market in India to consider. The duality of the labour market, characterised by the presence of a large informal sector — 93 per cent workers are in the informal economy according to the latest Economic Survey — suggests that enforcement is likely to be problematic.

It is also true that with little bargaining power, workers are being squeezed, and that the government must intervene to address this. Though the share of workers’ wages in gross value added has risen to 12.7 per cent in 2016-17, up from a low of 9.2 per cent in 2007-08, it remains well below levels seen in the early 1980s. But it must be asked whether, for serving the goals of equity and justice, a high minimum wage is the best way forward. Lowering the costs associated with formalisation, creating more flexible labour laws, might be a more prudent approach. DownloadcrackIAS.com the Indian Express apps for iPhone, iPad or Android © 2019 The Indian Express Ltd. All Rights Reserved

END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-12 STARTUP INDIA PROGRAMME FOR MSME SECTOR Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Micro,Small & Medium Enterprises Startup India Programme for MSME Sector

Posted On: 11 JUL 2019 2:57PM by PIB Delhi

Government has launched the Startup India Initiative with the objective of building strong ecosystem for nurturing innovation and startups in the country. The incentives available to Startups under Startup India initiative are given below:

i. Self-Certification under 6 Labour Laws & 3 Environmental Laws. ii. Relaxation in Public Procurement Norms. iii. Faster exit under the Bankruptcy Code. iv. Rebates on Patent & Trademark filing fees, support from facilitators and to expedite examination of Patent application. v. Income Tax exemption. vi. Exemption from Income Tax on investments received above fair market value. vii. Funding support under the Fund of Funds for Startups. viii. Guidance and facilitation support from Startup India Hub.

Government has notified Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 under MSMED Act, 2006. The policy mandates 25% annual procurement from MSEs by Central Ministries/Departments/Public Sector Enterprises (CPSEs). Out of 25% target of annual procurement from MSEs, 4% is earmarked for procurement from MSEs owned by SC/ST entrepreneurs and 3% from MSEs owned by Women Entrepreneurs. In order to monitor effective implementation of this Policy, Ministry of MSME has launched a Portal, namely, MSME “SAMBANDH”

This information was given by Shri Nitin Gadkari, Union Minister for Micro, Small and Medium EnterprisescrackIAS.com in written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.indianexpress.com Date : 2019-07-13 MAXIMISE REVENUE, MINIMISE TAX Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

The writer is Contributing Editor at The Indian Express, and Consulting Editor at Network 18

Bhasin is a New Delhi based policy researcher

Budget 2019-20 contained major tax changes to direct taxes, both personal and corporate. It may have been the last time that we witnessed such changes. Very likely, when Budget 2020-21 is presented, the government would have accepted the direct tax code report, and direct taxes will go the way of excise taxes — out of the budget.

The budget reduced the corporate tax rate (CTR) from 30 per cent to 25 per cent for all firms with a turnover of Rs 400 crore. Earlier, the 25 per cent slab was applicable for firms with a turnover of Rs 250 crore. The FM stated that this move would cover 99.3 per cent of all firms in India. However, it is unclear as to how much of the total corporate taxes is accounted for by these 99.3 per cent of firms. Speculation abounds – is it as low as 10 per cent? We do not know.

Tax rates are always an item of discussion and debate, and now more so than ever. President Donald Trump lowered the CTR for the US from 35 per cent to 21 per cent in 2018. As shown below, the lower tax rate was well chosen by Trump because that is close to the optimal tax rate. But that is getting ahead of the story.

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OECD has recently released a comprehensive set of data on corporate taxes, for close to a 100 economies. [https://stats.oecd.org/ Index.aspx?DataSetCode=RS_GBL]. The data reveals what has been feared (and argued) for a long time — India has one of the highest (actually the highest) corporate tax rate in the world. And, according to OECD, it also has the highest effective corporate tax rate (ECTR) — and that to by a huge margin. India’s ECTR is estimated by OECD at 44 per cent. Their definition includes all taxes paid by corporates in different countries — for example, corporate tax, dividend tax, capital gains tax. Incidentally, the second- highest ETR is for Argentina and it is 9 ppt (percentage points) lower than India, and third is France, 11 ppt lower. China’s ECTR is 20 ppt lower than India at 23.6 per cent! One reason why China has got all the investments, and growth, at least relative to India?

In this age of globalisation, no country is an island. Competitiveness is affected by tax rates, interest rates, exchange rates, and labour costs. However, gone are the days when countries could devalue their way to prosperity. China accomplished this via massive undervaluation for about 20 years, from 1990-2010. Their success ensured that such undervaluation (read currency manipulation) would never again be allowed by the Western powers. It is likely that Trump’s trade war would not have occurred if China had been more responsible with the setting of its exchange rate.

What can countries do to improve their competitiveness, given that the mercantilist route is no longer an option? They can reduce its cost of capital, make labour more competitive, make industry more competitive, and rekindle animal spirits. On the first three counts, the budget has moved in the right direction. Sovereign bond borrowing is an idea whose time has definitely come, notwithstanding the perennial naysayers and those not comprehending the fundamental nature of change in the world. Inflation nowhere (including India) is the bogey it once was. Also naysayers should note, and answer the following question — between fiscal years 2004 and 2011 (the so-called Golden Age of Indian growth) the real repo rate averaged minus 1 per cent. For the fiscal years 2016-2018 real repo rates averaged 2.3 per cent. Go figure the growth implications.

Since Shaktikanta Das assumed governorship of the RBI, there has been considerable improvement in communication and a gradual lowering of policy rates, but this has also been accompanied by a more than equal lowering of inflation, that is, the real repo rate has yet to move below 2.3 per cent. The sovereign bond issue will help, but don’t look for a quick acceleration in GDP growth.

Exchange rate change is no longer operational, labour codes are too slow to change, and monetary policy is sluggish in its operation, and impact. The only real growth option for Indian policymakers — cut tax rates to internationally competitive levels. And what might that be? Around 22 per cent for all firms, and we obtain that result from a comparative study (see below — and chart).

But first, a comment on the personal income tax (PIT) rate increase in the budget. The move to increase PIT rates to developed country levels is not in the right direction. It seems that there was more old-fashioned morality (tax the rich) than revenue maximisation at play. At best, the government plans to raise Rs 5,000 crore more by socking it to the rich. (Total personal income tax collection is budgeted at Rs 5,00,000 crore). And even that may not happen as tax arbitrage between the much lower corporate tax rate and the near highest individual income tax rate (only 10 percrackIAS.com cent of countries have a higher than 43 per cent top PIT rate) will move animal spirits towards payment of corporate tax. And if not tax arbitrage, tax evasion may lower gain in PIT collection.

Ostensibly, tax rates are set to maximise tax revenue — and tax revenue depends on both income and tax compliance. Tax compliance can either be considered as more firms filing taxes or more firms revealing a closer approximation to true income. Improving compliance alone can ensure greater resource mobilisation through taxation — and without increasing the tax rate (and may indeed occur if the tax rate is reduced).

The non-linear relationship between tax rate and tax revenue (as per cent of GDP) is revealed by the famous Laffer curve – with zero tax rates, you get zero tax revenue and with 100 per cent tax rate, you get zero tax revenue. In-between, logically, the share of tax revenue increases, before peaking and declining toward zero. Several “truths” become evident from even a cursory glance at the chart. First, that OECD cross-country data for 2017 conforms (fits) the inverted U- shaped curve rather well — and the inverted U is a close approximation to a normal distribution (red line in chart). Second, that the lowest bang for the tax buck is obtained in India, possibly because tax rates are set on the basis of morality rather than revenue maximisation. In India, we tax at 44 per cent to get 3.5 per cent of tax revenue (as percentage of GDP). Both Korea and Israel (and other countries) obtain this same amount of revenue with half of India’s taxation levels. As the chart shows, the tax rate level at which revenue is maximised is around 23 per cent — half India’s tax level.

Why is the effective tax rate in India so high? In India, firms must pay a corporate tax, which is followed by a surcharge and an additional 15 per cent dividend distribution tax (DDT). The revenue mobilisation from DDT is marginal compared to the overall tax revenue from corporate taxes. Estimates suggest that the resource mobilisation from DDT is just around 8 per cent of the total corporate tax revenue. A steep 15 per cent DDT only dissuades firms from issuing dividends to their shareholders. Forget about double taxation as there’s another moral Indian tax icing — if an individual earns more than Rs 10 lakh of dividend income, she must pay an additional 10 per cent tax. So the same income is taxed thrice in India — and only in India.

Both the budget and the Economic Survey focused on revival of private investment to ensure sustained long-term growth. Thus, there is strong case for further and aggressive reduction in tax rates on the grounds of revival of investment, and helping India become a $5 trillion economy. With another budget just six months down the line, there is hope that the government will realise its mistake and depart from misguided taxation policies.

Bhalla is contributing editor, The Indian Express. Bhasin is a New Delhi-based policy researcher. Views are personal

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END Downloaded from crackIAS.com crackIAS.com© Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-13 CRISIS IN JUTE INDUSTRY Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles Crisis in Jute Industry

Posted On: 12 JUL 2019 4:12PM by PIB Delhi

There is no report of crisis in jute industry including closure of jute mills, loss of jobs, intense competition and cheap imports from Bangladesh. In-fact, during the last two years 10 jute twine mills have re-opened in Andhra Pradesh benefitting 20,000 workmen directly and indirectly. With a view to protect domestic jute industry, anti- dumping duty on import of jute goods from Bangladesh and Nepal has been imposed w.e.f. 5th January, 2017. The details of jute/jute products produced and imported/exported during the last three years is at Annexure-A.

Government of India is implementing various schemes for welfare of jute workers, improving productivity and quality of jute and overall development of jute industry in jute growing states. The details of various schemes implemented for upliftment of jute sector are at Annexure-B.

National Jute Board (NJB) is implementing the Incentive scheme for Acquisition of Plants and Machinery (ISAPM) for modernization in Jute mills & JDP units. During 2014-15 to 2018-19, NJB has released capital subsidy amounting to Rs. 4971.19 lakhs to jute mills and JDP units.

Year 2014-15 2015-16 2016-17 2017-18 2018-19* Assistance/Subsi dy 362.18 355.57 1739.21 1427.23 1087.00 (Rs. In lakhs) No. of Mills / unit 18 22 39 52 27

DetailscrackIAS.com of jute mills those who participated under this scheme and availed assistance are given at Annexure C.

Annexure-A

Production of Jute Goods

Qty: ‘000 M. Tons Carpet Hessian Sacking Backing Yarn Others Total Cloth 2016-17 178.6 871.6 3.0 93.3 45.8 1142.3 2017-18 173.3 902.7 1.9 51.7 48.5 1178.1 2018-19 141.0 846.5 0.5 45.2 47.1 1080.3

Source: Indian Jute Mills Association

Total Exports of Jute goods

Qty: 000’ M. Tons

Value: Rs. / Crore Year Hessian Sacking Yarn Others JDPs Total Qty. Value Qty. Value Qty. Value Qty. Value Value Qty. Value 2016 - 17 78.6 930.18 46.6 411.80 9.2 72.76 4.1 68.50 590.95 140.7 2074.20 2017 – 18 86.8 917.24 44.8 407.19 16.9 130.19 4.2 72.43 631.49 155.3 2158.56 2018 – 19 64.1 802.69 37.0 432.91 13.6 109.42 7.0 112.75 815.50 121.7 2273.27

Source: DGCI&S, Kolkata

Total Imports of Jute goods (from Bangladesh)

Qty: 000’ M. Tons

Value: Rs. / Crore Year Hessian Sacking Yarn Others JDPs Total crackIAS.com Qty. Value Qty. Value Qty. Value Qty. Value Value Qty. Value 2016 - 17 5.9 57.56 43.8 307.43 79.1 502.43 9.7 54.17 10.02 140.2 931.60 2017 – 18 11.9 122.37 45.4 413.73 50.0 310.94 7.5 23.82 9.43 115.4 880.28 2018 – 19 18.1 184.40 54.1 432.66 49.2 292.13 5.8 30.39 12.34 108.3 951.92

Source: DGCI&S, Kolkata

Exports of jute goods to Top 20 Countries

Value: Rs. / Crore

2016-17 2017-18 2018-19 Sl. Country Value % Country Value % Country Value % 1 U S A 415.31 20 U S A 454.07 21 U S A 492.73 22 2 GHANA 168.62 8 GHANA 183.87 9 GHANA 258.38 11 3 U K 155.92 8 U K 141.81 7 U K 158.82 7 GERMA COTE D’ NETHER 4 99.81 5 107.53 5 114.62 5 NY IVOIRE LAND NETHER GERMAN AUSTRA 5 98.37 5 99.75 5 98.70 4 LAND Y LIA AUSTRA GERMA 6 82.40 4 NEPAL 92.59 4 97.19 4 LIA NY SAUDI NETHER COTE D' 7 71.74 3 82.63 4 81.15 4 ARAB LAND IVOIRE COTE D' SAUDI 8 68.05 3 78.49 4 SPAIN 76.63 3 IVOIRE ARAB AUSTRA INDONE 9 SUDAN 56.18 3 48.37 2 52.82 2 LIA SIA NEW U ARAB U ARAB 10 51.10 2 47.17 2 ZEALAN 52.69 2 EMTS EMTS D SAUDI 11 CANADA 42.95 2 TURKEY 42.14 2 52.13 2 ARAB INDONE 12 ITALY 42.43 2 39.57 2 FRANCE 47.59 2 SIA EGYPT 13 39.23 2 CANADA 38.63 2 ITALY 39.99 2 A RP BELGIU U ARAB 14 SPAIN 34.72 2 37.46 2 39.67 2 M EMTS crackIAS.comNEW BELGIU 15 ZEALAN 33.38 2 ITALY 37.38 2 36.93 2 M D BELGIU 16 32.94 2 SPAIN 36.70 2 JAPAN 34.06 1 M TANZAN EGYPT A 17 32.61 2 35.90 2 CANADA 33.15 1 IA REP RP TANZANI 18 TURKEY 32.51 2 31.81 1 SUDAN 32.70 1 A REP NEW TANZAN 19 JAPAN 28.51 1 ZEALAN 31.46 1 32.70 1 IA REP D 20 FRANCE 27.45 1 FRANCE 30.68 1 PERU 19.82 1 Total of Total of Total of 20 20 20 1614.23 79 1698.01 80 1852.47 79 countrie countrie countrie s s s Total of Total of Total of All jute 2074.20 All jute 2158.56 All jute 2273.27 goods goods goods

Source: DGCI&S, Kolkata

Annexure-B

Steps/Schemes for welfare of jute workers, development of jute industry, resolving problems of jute producers and increasing productivity and export of jute:

Mandatory Packaging in Jute Materials

Under the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987, Government specifies the commodities and the extent to which they are mandatorily required to be packed in Jute Packaging Materials. At present, a minimum of 100% of food grains and a minimum of 20% of sugar are to be compulsorily packed in jute sacking.

MSP operation in raw jute

Whenever the market price of raw jute falls below a certain level, the Jute Corporation of India (JCI) procures raw jute at Minimum Support Price (MSP), fixed on the basis of recommendation of the commission for Agricultural Cost and Prices (CACP) from jute growers to safeguard their interest.

Workers’ Welfare Scheme:

Swachhatta Abhiyan – Sulabh Sauchalaya:

NJB provides assistance to the jute mills for improvement of sanitation, health facilities and working conditions of jute mill workers. The rate of assistance is @90% of actual expenses subjectcrackIAS.com to maximum of Rs. 60.00 lakh (per mill / annum). Under this scheme, 1365 Toilet units have been constructed in 46 Jute Mills from 2014-15 to 2018-19.

Scholarship Scheme for the girl children of the workers of jute mills, JDP-MSMEs

NJB provides Scholarship / Incentive support to the girl children of the workers of Jute Mills / JDP – MSME units on passing out Secondary and Higher Secondary examinations. Scholarship / Incentive of Rs. 1133.05 lakh have been given to 17,722 girl children of Jute Mills / JDP MSME workers for being successful in Secondary and Higher secondary examinations from 2014-15 to 2018-19.

JUTE –ICARE (Jute: Improved Cultivation and Advanced Retting Exercise)

National Jute Board (NJB) in association with Jute Corporation of India Ltd (JCI) and Central Research Institute for Jute and Allied Fibres (CRIJAF), Ministry of Agriculture is implementing an scheme for welfare of Jute farmers namely Jute –ICARE (Improved Cultivation and Advanced Retting Exercise) for the last four years in a phased manner covering 69 blocks under jute growing states till 2018-19. Through this scheme, the farmers have been encouraged to grow jute by using certified seeds, adopting scientific technique in jute cultivation and retting to produce quality jute and increase productivity and to reduce the cost of jute production for the jute farmers.

Incentive Scheme for Acquisition of Plant & Machinery

Keeping in mind the need to modernise the jute mills by increasing their productivity and to replace the old machines by new and technologically advanced machines; National Jute Board (NJB) has been implementing schemes for modernization of jute industry. The scheme has been instrumental in bringing new investment to the industry. The ISAPM scheme has been launched in 2013 with an incentive @20% of the cost of machineries to Jute mills and 30% to the MSME –JDP units. During 2014-15 to 2018-19, capital subsidy amounting to Rs. 4971.19 lakhs to jute mills and JDP units has been released.

Market Promotion Support

Market Promotion support is provided to the jute artisans, entrepreneurs, weavers, NGOs, Women Self Help Groups (WSHGs) for selling, marketing and promotion of their products in India and abroad. The fairs organized by NJB are means of livelihood to these groups of people. Some of the prominent events among others were – IITF, Delhi, Surajkund Mela, Tex Trends, Delhi, Taj Mahotsav, Lucknow Mahotsav, Shilpgram Udaipur, Giftex, Mumbai, Indian Handicrafts and gift fair, Greater Noida etc where National Jute Board organise and facilitate participation of jute units for promotion of jute products. The Market Promotion Support beneficiaries are JDP Units, Jute Mills, WSHGs etc.. The Market promotion fairs/exhibitions are organised and participated in throughout the country. NJB also provides export promotion supports to the jute exporters and facilitate participation in International fairs Business delegation, Buyer Seller Meet (BSM) for boosting exports. DesigncrackIAS.com Development Scheme - NJB Jute Design Cell at NID A Jute Design Cell for development of Jute Shopping Bags and Lifestyle Accessories has been set up at the Innovative Centre for Natural Fibres (ICNF) of National Institute of Design (NID), Ahmedabad.

Jute Integrated Development Scheme (JIDS)

JID Scheme aims at setting up local units and agencies at distant locations around the country through collaboration with bonafide bodies to carry out various activities. JID agencies act as a facilitator for providing Basic, Advance and Design Development training programmes and rendering the backward and forward linkages to the existing and potential entrepreneurs at grass-root levels mainly on technology application and design /product development and disseminations.

Jute Raw Material Bank (JRMB) Scheme

The scheme has been designed to make jute raw material available to the small and tiny artisans / entrepreneurs locally at mill gate price, suiting to the present requirement and sustainability of the decentralized JDP sector in the country.

Export Market Development Assistance Scheme

Export Market Development Assistance (EMDA) Scheme facilitates registered manufacturers and exporters of jute products to participate in international fairs and business delegation abroad for export promotion of lifestyle and other JDPs and boost exports. During 2014-15 to 2018-19, an amount of Rs. 17.21 crores has been disbursed to registered jute exporters for participation in international fairs under the scheme.

Retail Outlet of Jute Diversified Products and Bulk Supply Scheme

Retail Outlet scheme supports supply chain and bulk supply of JDPs by the jute entrepreneurs for selective and mass consumption. During 2014-15 to 2018-19, an amount of Rs. 347.90 lakh has been provided to 80 beneficiaries/entrepreneurs under this scheme.

Annexure-C

State/Mill-wise disbursement of Incentive under ISAPM Scheme

Incentive Amount released Name of the Jute Total Sl. No. Mill 2016-17 2017-18 2018-19 (Rs.) (Rs.) (Rs.) (Rs.) West Bengal Hooghly Infrastructure Pvt.

1 Ltd. crackIAS.com6,139,800 2,029,000 153,000 8,321,800 (Hukumchand Jute Mill) Dalhousie Jute 2 Company 880,000 7,628,666 3,258,000 11,766,666 Kanknarrah Co. 3 Ltd. 826,952 6,477,827 7,304,779 Alliance Mills 4 (Lessees) Ltd. 6,687,000 944,000 4,567,000 12,198,000 Aditya Translink (P) Ltd. 5 (Samnuggur 1,444,000 236,000 1,680,000 North) Jagatdal Jute & 6 Industries Ltd. 4,974,385 5,107,000 10,081,385 RDB Textiles

7 Limited 1,165,200 1,665,000 6,249,400 9,079,600 (Victoria Jute Mill) Vijai Shree Ltd.

8 (Fort William 890,000 2,985,000 2,346,000 6,221,000 Jute)

9 Ashoka Exports 270,520 386,400 697,435 1,354,355 Ludlow Jute & 10 Specialities Ltd. 2,030,920 2,576,602 4,607,522 Cheviot Company 11 Ltd. 13,761,506 211,500 13,973,006 The Angus 12 Company Ltd. 697,000 225,600 922,600 The Naihati Jute 13 Mills Co. Ltd. 2,830,400 14,988,000 17,818,400 Caledonian Jute 14 & Industries Ltd. 2,771,000 2,928,600 2,359,700 8,059,300 Bowreah Jute Mill 15 Private Ltd. 16,704,400 2,104,800 18,809,200 Jankalyan Vinimay Pvt. Ltd. 16 (Megna Jute 807,000 1,780,000 2,587,000 Mills) Maheswari Jute 17 Spinners Pvt. Ltd. 4,898,000 1,609,600 6,507,600 The Empire Jute 18 Company Ltd. 832,000 832,000 Reliance Jute 19 Mills (Int.) Ltd. 4,447,400 5,284,993 4,986,000 14,718,393

20 crackIAS.comGloster Limited 14,898,096 4,082,800 18,980,896 Kamarhatty 21 Company Ltd. 4,379,000 4,379,000 Premchand Jute

22 & Industries Pvt. 8,184,171 8,184,171 Ltd. Kamakshi Jute 23 Industries Ltd. 3,973,444 3,973,444

24 Birla Corporoation 25,000,000 25,000,000 Sree Durga Fibre 25 Products 820,000 820,000 1,640,000 Uma Spinners 26 Pvt. Ltd. 1,020,000 1,020,000 Agarpara Jute 27 Mills Ltd. 5,856,187 5,856,187 Richie Bags & 28 Fashion Pvt. Ltd. 92,824 92,824 Trand Vyappar 29 Ltd. 1,115,000 110,000 1,225,000 G.D.Cement Pvt. 30 Ltd. 360,000 360,000 OSB Overseas 31 Pvt. Ltd. 146,700 146,700 CMTP Exports 32 Pvt. Ltd. 400,500 400,500 Kariwala 33 Industries Ltd. 1,930,324 1,930,324 The Baranagore 34 Jute Factory Plc. 4,408,200 4,408,200 Ganges Jute Pvt. 35 Ltd. 10,022,724 10,022,724 ECO Jute Pvt. 36 Ltd. 1,545,400 1,545,400 Tepcon Int. (I) 37 Ltd. 1,686,000 1,686,000 Goyeal

38 Merchants Pvt. 1,388,000 1,388,000 Ltd. The Hooghly Mills 39 Co. Ltd. 27,000 27,000 Budge Budge Co. 40 Ltd. 9,887,200 9,887,200 Ashis Bags & 41 crackIAS.comFashions Pvt. Ltd. 571,200 571,200 Earth Bags 42 Exports Pvt. Ltd. 2,464,422 2,464,422

43 Auckland Int. Ltd. 1,666,800 1,666,800 Mahadeo Jute & 44 Industries Ltd. 352,000 352,000

45 Patra Jute Mill Pvt. Ltd. 410,000 410,000

Total : (A) 104,492,194 109,105,347 50,863,057 264,460,598

Andhra Pradesh Andhra Pradesh 1 Fibres Limited 178,000 178,000 Sri Sitarama

2 Lakshmi Jute 1,328,258 1,328,258 Mills (P) Ltd. Rajam Poly 3 Packs Ltd. 360,000 360,000

Total : (B) 1,866,258 1,866,258

Assam Prakash Jute

1 Industries Pvt. 2,230,000 2,230,000 Ltd.

Total : (C) 2,230,000 2,230,000 Grand Total : (A)

+ (B) + ( C) 268,556,856

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-13 TEXTILE EXPORT CLUSTERS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles Textile Export Clusters

Posted On: 12 JUL 2019 4:13PM by PIB Delhi

There is no scheme for establishing textile export clusters at present.

Government is implementing the Scheme for Integrated Textile Park (SITP) under which support is provided for creation of infrastructure facilities on cluster basis under PPP mode. Fifty-ninetextile parks have been approved and are under various stages of implementation as per statement attached.

The details of the textile units approved by Government are as follows:

Units Name of the park State Status S.no. Proposed HindupurVyapar Apparel Park 1 Andhra Pradesh 10 Sanctioned Limited MAS Fabric Park (India) Pvt. 2 Andhra Pradesh 16 Sanctioned Ltd. Brandix India Apparel City 3 Andhra Pradesh 17 Completed Private Limited Tarakeswara Textile Park Pvt. 4 Andhra Pradesh 10 Sanctioned Ltd. 5 Guntur Textile Park, Guntur Andhra Pradesh 61 Sanctioned 6 PragJyoti Textile Park at Assam Assam 42 Sanctioned 7 crackIAS.comGujarat Eco-Textile Park Limited Gujarat 33 Completed Mundra SEZ Textile & Apparel 8 Gujarat 11 Completed Park Limited 9 Fairdeal Textile Park Pvt. Ltd. Gujarat 30 Completed Vraj Integrated Textile Park 10 Gujarat 15 Completed Limited 11 Sayana Textile Park Limited Gujarat 50 Completed 12 Surat Super Yarn Park Limited Gujarat 27 Completed 13 RJD Integrated Textile Park Ltd. Gujarat 579 Completed 14 Kejriwal Integrated Textile Park Gujarat 34 Sanctioned Shanti Integrated Textile Park 15 Gujarat 45 Sanctioned Pvt Ltd., Surat Palsana ITP Park, Surat, 16 Gujarat 62 Sanctioned Gujarat Amitara Green High Tech 17 Gujarat 11 Sanctioned Textile Park Pvt Ltd. NSP Infrastructure Private 18 Gujarat 42 Sanctioned Limited, Surat 19 Karanj Integrated Textile Park Gujarat 42 Sanctioned 20 Shahlon Textile Park Gujarat 25 Sanctioned Aalishan Eco Textile Park, 21 Haryana 12 Sanctioned Panipat 22 Himachal Pradesh Textile Park Himachal Pradesh 8 Sanctioned Jammu and 23 J&K Textile Park 27 Sanctioned Kashmir Kashmir Wool & Silk Textile Jammu and 24 50 Sanctioned Park, Ghatti, J & k Kashmir 25 Gulbarga Textile Park Pvt. Ltd. Karnataka 47 Sanctioned Doddabalapur Integrated Textile 26 Karnataka 72 Completed Park Metro Hi-Tech Cooperative Park 27 Maharashtra 72 Completed Ltd Baramati Hi-Tech Textile Park 28 Maharashtra 22 Completed Limited 29 Deesan Infrastructure Pvt. Ltd Maharashtra 50 Completed Islampur Integrated Textile Park 30 Maharashtra 10 Completed Pvt Ltd., Sangli, Maharashtra Latur Integrated Textile Park Pvt 31 Maharashtra 10 Completed Ltd, Latur, Maharashtra 32 crackIAS.comAsmeetaInfratech Ltd. Maharashtra 599 Completed Pride India Co-operative Textile 33 Maharashtra 170 Completed Park Limited Purna global Textile Park 34 Maharashtra 89 Sanctioned Limited KallappannaAwade Co- 35 Operative Industrial Estate & Maharashtra 85 Sanctioned Integrated Textile Park Ltd. Satyaraj Integrated Textile Park, 36 Maharashtra 41 Sanctioned Shirol, Kolhapur Dhule Textile Park, Dhule, 37 Maharashtra 61 Sanctioned Maharashtra Hinganghat Integrated Textile 38 Maharashtra 10 Sanctioned Park Pvt.Ltd. Shri Ganesh, Dhule, 39 Maharashtra 12 Sanctioned Maharashtra 40 Lotus integrated Textile Park Punjab 7 Completed Rhythm Textile & Apparel Park 41 Punjab 14 Sanctioned Limited Ludhiana Integrated Textile 42 Punjab 55 Sanctioned Park Limited NextGen Textile Park Private 43 Rajasthan 26 Sanctioned Limited Kishangarh Hi-Tech Textile 44 Rajasthan 34 Sanctioned Weaving Park Limited Jaipur Integrated Texcraft Park 45 Rajasthan 20 Completed Pvt. Ltd. SIMA Textile Processing Centre 46 Tamil Nadu 10 Sanctioned Pvt Ltd Palladam Hi-Tech Weaving 47 Tamil Nadu 90 Completed Park Komarapalayam Hi-Tech 48 Tamil Nadu 56 Sanctioned Weaving Park Limited 49 Karur Integrated Textile Park Tamil Nadu 35 Completed Madurai Integrated Textile Park 50 Tamil Nadu 17 Completed Limited PerarignarAnna Handloom Silk 51 Tamil Nadu 115 Sanctioned Park Ltd. Pallavada Technical Textile 52 Tamil Nadu 10 Sanctioned Park crackIAS.comThe Great Indian Linen & Textile 53 Tamil Nadu 20 Sanctioned Infrastructure Company Limited Pochampally Handloom Park 54 Telangana 2000 Completed Limited 55 Whitegold Textile Park Telangana 10 Sanctioned 56 Ecotex, Uttar Pradesh Uttar Pradesh 36 Sanctioned Farrukhabad Textile park 57 Uttar Pradesh 50 Sanctioned Pvt.Ltd. 58 EIGMEF Apparel Park Limited West Bengal 73 Sanctioned Hosiery Park at Howrah, West 59 West Bengal 176 Sanctioned Bengal

This information was given by the Union Minister of Textiles, SmritiZubinIrani, in a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-13 MODERNISATION OF JUTE MILLS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles Modernisation of Jute Mills

Posted On: 11 JUL 2019 6:20PM by PIB Delhi

Keeping in mind the need to modernise the jute mills by increasing their productivity and to replace the old machines by new and technologically advanced machines, National Jute Board (NJB) has been implementing schemes for modernization of jute industry. The scheme has been instrumental in bringing new investment to the industry.

The ISAPM scheme has been launched in 2013 with an incentive @20% of the cost of machineries to jute mills and 30% to the MSME –JDP units. During 2014-15 to 2018-19, capital subsidy amounting to Rs. 4971.19 lakhhas been released to jute mills and JDP units.

Ten composite jute manufacturing units have been establishedin the last five years.

The effective installed capacity of the industry is around 16.5 lakh metric tonne and around 11.5 lakh metric tonnes of jute goods is produced in the country. The difference in the production and capacity is due to labour related issues including shortage of labour.

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in a written reply in the Rajya Sabha today.

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END crackIAS.comDownloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-13 PROMOTION OF TRADITIONAL TEXTILE-MAKING SKILLS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles Promotion of Traditional Textile-Making Skills

Posted On: 11 JUL 2019 6:20PM by PIB Delhi

In order to encourage Indian traditional textile-making, the government has been implementing various policy initiatives. Block Level Clusters is one of the components of the National Handloom Development Programme. Comprehensive Handloom Cluster Development Scheme (CHCDS), provides financial assistance upto Rs. 2 crores for setting up of Common Facility Centres (CFCs) including Common Service Centres (CSCs).

28 Weavers’ Service Centres (WSCs) are functioning across the country that are documenting traditional handloom textile products using different techniques viz. sale of traditional handloom products atvarious craft melas, exhibitions sponsored by the government, display of weaving skills/techniques, linking of handloom weavers with e-commerce, documentation of samples/products in digital format and developing new designs in different themes under the project “Tantavi” and promoting them through exhibitions and releasing catalogues.

National Centre for Textile Designs (NCTD) was set up in 2001 to promote traditional and contemporary designs so as to make handloom sector more responsive to the rapidly changing market demand. Presently, it is working from the premises of Weavers Service Centre (WSC), Delhi.

Indian Handloom Brand (IHB) promote production of niche handloom products with high quality, authentic traditional designs with zero defect and zero effect on environment.

Weaving & Designing Training Centre at Kullu, Himachal Pradesh has been established to keep alive the traditional profession of woollen products and meet out the increasing demand of skilled weavers/artisans. The training centre imparts training to unemployed youth and also upgrade skill of existing weavers by providing training in handloom weaving.

Silk Samagra is being implemented for the development of sericulture Industry in the country. UndercrackIAS.com this scheme, support is being provided to establish Common facility centres towards silk processing activities like Tub Dyeing, Arm dyeing and Fabric processing/finishing units for the benefit of traditional Silk making. These Common facility Centres will help in survival of traditional silk making in different regions of the country.

Jute Integrated Development Scheme(JIDS)aims at setting up local units and agencies at distant locations around the country through collaboration with bonafide bodies to carry out various activities. JID provides basic, advance and design development training programmes and rendering the backward and forward linkages to the existing and potential entrepreneurs at grass-root levels mainly on technology application and design /product development and disseminations

Samarth Scheme for Capacity Building in Textile Sector (SCBTS) was launched in 2017 for three years with an outlay of Rs. 1300 crore. The scheme will have National Skill Qualification Framework (NSQF) compliant training courses with funding forms as per the Common Norms notified by Ministry of Skill Development and Entrepreneurship (MSDE). 10 lakh people are expected to be skilled and certified in various segments of textile sector through the scheme, out of which 1 lakh will be in traditional sectors.

A Workshop on Bridging Japan and India by Bamboo was organised by Cane and Bamboo Technology Centre (CBTC) Assam at Bamboo and Cane Development Institute, Agartala, on 2ndAugust 2018. On that occasion Japan’s Economic Minister and Forest Minister of Tripura Government and other official officers were present. During the workshop,Japanese Artisan and Shilp-guru of Tripura, traditional Northeast artisans exchanged their crafts ideas and developed craft items.

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in a written reply in the Rajya Sabha today.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.pib.nic.in Date : 2019-07-13 NEW SCHEMES FOR SILK SECTOR Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles New Schemes for Silk Sector

Posted On: 11 JUL 2019 6:19PM by PIB Delhi

Under the Central Sector Scheme Government of India implementing “Silk Samagra”through Central Silk Board with a total outlay of Rs. 2161.68 crore for three years (2017-2020) for development of sericulture in the country.It focuses on improving quality and productivity of domestic silk thereby reducing the country’s dependence on imported silk. Under the scheme, assistance is extended to sericulture stakeholders for the beneficiary oriented components like, raising of Kissan nursery, plantation with improved Mulberry varieties, Irrigation, chawki rearing centres with incubation facility, construction of rearing houses, rearing equipment, door to door service agents for disinfection and input supply, support for Improved reeling units like Automatic Reeling units, multi-end Reeling machines, Improved Twisting machines and support for post yarn facilities for quality silk and fabric production.

Under North East Region Textile Promotion Scheme (NERTPS) implemented to promote Textile Industry in the North East Region by the Ministry of Textiles, 38 Sericulture projects have been implemented in the identified potential districts under three broad categories viz., Integrated Sericulture Development Project (ISDP) and Intensive BivoltineSericulture Development Project andAspirational Districts. Total cost of these projects is Rs. 1,106.97 crore, of which Government of India’s share is Rs. 955.07 crore.Objective of these projects is to establish sericulture as viable commercial activity in NER by creating necessary infrastructure and imparting skills to the locals for silkworm rearing and allied activities in the value chain.

The allocation madeand expenditure incurred under the scheme during the last three years is given below:

(Rs. in crore)

Scheme Year Silk Samagra NERTPS Allocation 542.50 232.27 2017-18crackIAS.com Expenditure 542.50 232.27 Allocation 601.29 90.00 2018-19 Expenditure 598.70 65.72 Allocation 730.00 124.98 2019-20 Expenditure (till date) 182.50 1.70

This information was given by the Union Minister of Textiles, SmritiZubinIrani, in a written reply in the Rajya Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-13 POLICY INITIATIVES FOR COTTON PRODUCERS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles Policy Initiatives for Cotton Producers

Posted On: 11 JUL 2019 6:18PM by PIB Delhi

To encourage the cotton spinning millers in the country, the Government has been implementing various policy initiatives and schemes viz., announcement of key reforms under a Special Package that includes additional incentives under the Amended Technology Upgradation Fund Scheme (ATUFS), relaxation of Section 80JJAA of Income Tax Actand introduction of fixed term employment for the apparel sector. Government is providing rebate of State and Central taxes/ levies embedded in manufacturing, assistance to exporters under Market Access Initiative (MAI) Scheme.

Under Pradhan MantriRojgarProtsahanYojana (PMRPY), Government is providing entire 12% of Employer’s contribution towards Employees’ Provident Fund (EPF) and Employees Pension Scheme (EPS). The rates under Merchandise Exports from India Scheme (MEIS) have been enhanced from 2% to 4% for apparel & made ups and 5% to 7% for handloom & handicrafts.The interest equalization rate for pre and post shipment credit for exports done by Micro, Small and Medium Enterprises (MSMEs) of textile sector has been enhanced from 3% to 5%.The benefits of this scheme have also been extended to merchant exporters which was earlier limited to only manufacturer exporters.

There is no report of cotton producers suffering from exorbitant cotton rates. The Association of Cotton Producers have also not submitted any representation to the Ministry for curtailment of rising prices of raw cotton.

This information was given by the Union Minister of Textiles, SmritiZubinIrani, in a written reply in the Rajya Sabha today.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-13 EMPLOYMENT IN TEXTILE INDUSTRY Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles Employment in Textile Industry

Posted On: 11 JUL 2019 6:18PM by PIB Delhi

As per the latest available Annual Survey of Industries, employment in the Textiles and Wearing Apparel were 25.27 lakh in 2014-15, 26.48 lakh in 2015-16 and 26.97 lakh in 2016-17.

Government has been implementing various schemes for welfare and development of textile workers/weavers including handicraft artisans.

Under the group insurance scheme for powerloom workers, insurance cover is provided to all powerloom weavers/workers in the case of natural death, accidental death as well as partial and permanent disability due to accident. Additionally, the weavers/workers enrolled under this scheme are entitled for educational grant of Rs. 600/- per child half-yearly for two children studying in 9th to12th standard for a maximum period of 4 years.Under the scheme, total number of powerloom weavers/workers enrolled was 1.11 lakh in 2015-16, 1.32 lakh in 2016-17 and 1.62 lakh in 2017-18.

Under the Textile Workers Rehabilitations Fund Scheme (TWRFS) which has been merged with the Rajiv Gandhi Shramik Kalyan Yojana (RGSKY) of the Ministry of Labour& Employment, the textile workers rendered jobless due to permanent closure of the mills, are provided a relief of 75% of the wage employment in the first year, 50% in the second and 25% in the third year.

Under the “Handloom Weavers Comprehensive Welfare Scheme, (HWCWS), life and accidental insurance are provided to handloom weavers/workers in the age groups of 18-50 years. It was, then, converged under Mahatma Gandhi BunkarBimaYojana (MGBBY). The HWCWS has been merged under Pradhan MantriJeevanJyotiBimaYojana (PMJJBY) and Pradhan Mantri Suraksha BimaYojana (PMSBY).

Total of targeted enrollment of weavers/workers under the PMJJBY and converged MGBBY are 5.32 lakh for 2017-18 and 6.65 lakh for 2018-19 which include 3.84 lakh for general states and 2.84 lakh for North Eastern States. As add on benefit to the above, scholarship@Rs. 180/- per month per child isprovided toa maximum of two children of the beneficiaries studying 9th to 12th standard.crackIAS.com Welfare programmes being implemented for handicraft artisansare Rajiv Gandhi Shilpi Swasthya Bima Yojana (RGSSBY), BimaYojana for Handicrafts Artisans (Aam Admi Bima Yojana (AABY), support to artisans in indigent circumstances, credit guarantee scheme, interest subvention scheme and issue of identify cards and creation of data-base.

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in a written reply in the Rajya Sabha today.

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crackIAS.com Source : www.economictimes.indiatimes.com Date : 2019-07-14 INTERNATIONAL FINANCIAL SERVICES CENTRE: MUCH NEEDED FOR INDIA Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Foreign Capital, Foreign Trade & BOP

By Taponeel Mukherjee

In a rapidly transforming global economic landscape in the face of Brexit, trade wars, debates around central bank policy and India emerging as a major economy in aggregate terms, a focus on creating a financial hub in India is both required and commendable. The Union Budget 2019 has provided incentives to ensure a renewed focus on the International Financial Services Centre (IFSC) at GIFT City, Gandhinagar. Tax measures to boost investor interest is timely and a good start.

An asset-financing hub can help fund critical sectors in the economy. One such sector that can benefit from an Indian financial centre is aviation. Through a financial hub not only will India benefit from the asset usage from a consumption point of view but will also help through creating a financing ecosystem that creates value through a host of interlinked industries in the IFSC.

Currently, most asset financing, such as airline financing, is done outside India in other financial hubs that have long attracted capital. But as India continues to become a more significant user of aviation infrastructure, a renewed focus on utilising IFSC to bring "home" the financing aspect of the asset will be vital. Such a measure will deliver the above-mentioned twin objectives of consumer access to assets and capital access for business.

The need to push the IFSC as an asset-financing hub assumes even greater importance, as one factors in the growth that Asia will see in asset demand. Taking the aviation sector as an example, one can see why a centralised financial hub in India assumes great importance. A report by IATA in October 2018 found that more than half of the total number of new passengers globally over the next twenty years will be from Asia. Additionally, by 2030, China, India and Indonesia will comprise three of the top four aviation markets. The financial hub, such as IFSC truly needs to capture a significant component of the financing market as consumption trends such as aviation market growth gather further momentum in Asia.

Indian policymakers and businesses must view the IFSC as a "centralised infrastructure ecosystem" as opposed to a single point of financing availability. Utilising the aviation financing example from above to illustrate this point would imply that the IFSC must not only look to capture the asset-financing component of the aviation market growth but eventually become a hub for aviation asset management, aviation insurance and allied industries.

Mainly,crackIAS.com as Indian consumers fly more, the aim must be for the IFSC to provide an avenue for centralised financial infrastructure hub that can truly cater to the needs of a growing economy. An increasing volume of passengers will imply a more significant number of airports and an increase in the size of airports. Therefore, financing planes, managing the assets, providing insurance to both air carriers and airport operators will all be business lines that will witness significant growth.

The inter-linkages also create the ecosystem in terms of services, human capital and ancillary industries that are so essential for long-run success of a financial centre such as the IFSC. The need to cater to a multitude of needs, as mentioned above, will create the demand for high- quality human capital and boost the services industry relating to finance, information technology, legal and accounting needs. The creation of a large service industry base will help fund the IFSC hub better and create a network effect that will allow top-quality human capital to cater to the diverse industries bound by a common financial centre.

Besides aviation, with the increased financialisation of the economy and the need for higher amounts of capital at optimal funding levels, the IFSC can deliver significant value for a variety of industries related to financial services, insurance and asset management in India.

While the measures in the Union Budget 2019 are welcome, but to truly establish the IFSC as a global financial hub, it will need renewed attention on strengthening the regulatory framework. Most importantly, stability and consistency in policy will be vital. A financial centre and surrounding businesses are by their very nature long-term decision based and hence must be looked at through a "long-term policy lens". That said, India's push for a global financial hub is a necessity in its ambition to further its position as a global economic superpower.

(The views expressed in this article are personal and that of the author. The author heads Development Tracks, an infrastructure advisory firm. You can contact him at [email protected] or @Taponeel on Twitter) By Taponeel Mukherjee

The need to push the IFSC as an asset-financing hub assumes even greater importance, as one factors in the growth that Asia will see in asset demand. Taking the aviation sector as an example, one can see why a centralised financial hub in India assumes great importance. A reportcrackIAS.com by IATA in October 2018 found that more than half of the total number of new passengers globally over the next twenty years will be from Asia. Additionally, by 2030, China, India and Indonesia will comprise three of the top four aviation markets. The financial hub, such as IFSC truly needs to capture a significant component of the financing market as consumption trends such as aviation market growth gather further momentum in Asia.

Mainly, as Indian consumers fly more, the aim must be for the IFSC to provide an avenue for centralised financial infrastructure hub that can truly cater to the needs of a growing economy. An increasing volume of passengers will imply a more significant number of airports and an increase in the size of airports. Therefore, financing planes, managing the assets, providing insurance to both air carriers and airport operators will all be business lines that will witness significant growth.

END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.indianexpress.com Date : 2019-07-15 THE REAL CURE Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

The Global Multidimensional Poverty Index (MPI) 2019 report, an initiative of the Oxford Poverty and Human Development Initiative and the United Nations Development Programme, released last week, says that India has recorded the fastest absolute reduction in the Index value among 10 countries across every developing region. According to this report, between 2005-06 and 2015-16, India lifted 271 million out of poverty and reduced deprivations in many of its 10 indicators, particularly in assets, cooking fuel, sanitation and nutrition. It also says that Jharkhand, among the poorest regions in the world, reduced the incidence of multi-dimensional poverty — captured in indicators such as nutrition, sanitation, child mortality, housing, cooking fuel, years of schooling and electricity — the fastest.

The greatest period of poverty decline between 2005 to 2015-16 in India’s recorded history was possible because of high growth averaging over 8 per cent or close to it. That pace of economic growthcrackIAS.com over a sustained period helped create the fiscal space for welfare programmes both by the Centre and the states, ensuring better access to food, nutrition, health and cooking fuel. The knock-on impact has been felt by states, too, with poverty levels declining faster in better managed states which had invested hugely in the social sector. Such high growth helped the government launch schemes such as MGNREGA, which threw up work opportunities. The Modi government, too, can be credited for schemes or programmes designed to provide pucca housing, toilets, cooking gas, power, roads and healthcare or the public provision of private goods with a lot of positive externalities.

But all these programmes need resources which can come only from growth with its trickle-down effect. So the focus has to be on growth to further reduce and eliminate poverty and to ensure economic convergence among states. A couple of percentage points’ increase or decrease in growth can make a big difference to a nation’s destiny.

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crackIAS.com Source : www.hindustantimes.com Date : 2019-07-16 POVERTY INDEX: WELL DONE, BUT STILL A LONG WAY TO GO Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

The 2019 global Multidimensional Poverty Index (MPI) from the UN Development Programme and the Oxford Poverty and Human Development Initiative, which was released last week, confirmed that India’s poverty reduction programmes are on the right track.

The report said that incidence of multidimensional poverty almost halved between 2005-06 and 2015-16, climbing down to 27.5%, indicating that the number of poor people in the country fell by more than 271 million within 10 years. Among states, Jharkhand showed the greatest improvement, with Arunachal Pradesh, Bihar, Chhattisgarh, and Nagaland slightly behind. Multidimensional poverty defines poor not only on the basis of income, but also on other indicators, including poor health, poor quality of work and the threat of violence. The poorest district is Alirajpur in Madhya Pradesh, where 76.5% of people are poor – the same as Sierra Leone in Sub-Saharan Africa.

India’s progress in reducing multidimensional poverty has happened thanks to investments in key areas. The country reduced deprivation in nutrition from 44.3% in 2005-06 to 21.2% in 2015- 16. Child mortality dropped from 4.5% to 2.2%; deprivation in sanitation from 50.4% to 24.6%; people deprived of cooking fuel from 52.9% to 26.2%; and those deprived of drinking water from 16.6% to 6.2%.

The positive numbers, however, cannot hide another stark reality.

Despite poverty reduction across religions and caste groups, the report also found that 50% of tribals in the country are poor, as are 33% of Dalits and 33% of Muslims. Keeping in view the ambitions of the 2030 Agenda for Sustainable Development, how can India ensure that Dalits, Muslims and tribals are not left behind? The UN’s recently released World Economic Situation and Prospects as of mid-2019 makes a critical point: Economic growth alone is not sufficient for poverty reduction.

What matters are the types of investment by the State. Countries that have driven poverty reduction trends, the report added, have focused their investments on people, importantly through the provision of health, education and social protection. India has been doing that; now it needs to put the pedal to the metal by not just increasing investments in these areas, but also improving implementation of national programmes and ensuring that they reach the last mile. First Published:crackIAS.com Jul 15, 2019 20:15 IST

END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-16 RESOLUTION OF STRESSED ASSETS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Resolution of Stressed Assets

Posted On: 15 JUL 2019 6:16PM by PIB Delhi

On 12.2.2018, Reserve Bank of India (RBI) issued a circular on Resolution of Stressed Assets — Revised Framework. RBI has informed that Supreme Court, vide its order dated 2.4.2019, held the said circular as non-est, necessitating issue of a revised circular for expeditious and effective resolution of stressed assets. RBI has further informed that against this background, RBI on 7.6.2019 has issued “Prudential Framework for Resolution of Stressed Assets” for early resolution of stressed assets in a transparent and time-bound manner, giving complete discretion to lenders with regard to design and implementation of resolution plans, while providing for disincentives in the form of additional provisioning for delay in implementation of resolution plan or initiation of insolvency proceedings, and making mandatory the signing of an inter-creditor agreement, providing for majority decision-making by all lenders. As per inputs received from Indian Banks’ Association (IBA), the Prudential Framework issued by RBI vide the circular dated 7.6.2019 has made signing of inter-creditor agreement mandatory before working out the resolution proposal for a particular stressed account and, in this connection, IBA has drafted an inter-creditor agreement and circulated the same among its member banks to facilitate the resolution process. IBA has further apprised that this draft agreement is not with reference to any particular sector, including the power sector.

A number of steps have been taken by the Government to help revive stalled projects. A project monitoring group has been set up and is working as an institutional mechanism to resolve a variety of issues, including fast-tracking of approvals. Till 1.1.2019, more than 3,191 issues raised in the PMG portal pertaining to 725 projects with anticipated investment of Rs. 29.88 lakh crore had been resolved, and 513 inter-ministerial meetings and 247 meetings with Chief Secretaries of States had been held for resolution of related issues/clearances. Further, inter-ministerial groups were constituted by the nodal ministries concerned for the shipping, textile, power, telecommunications, renewable energy and MSMEs sectors to examine systemic issues affecting viability and repayment capacity of the sectors.

This was stated by Shri Anurag Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today. crackIAS.com *****

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-16 USAGE OF FINANCIAL INSTRUMENTS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Usage of Financial Instruments

Posted On: 15 JUL 2019 6:16PM by PIB Delhi

As per the NABARD All India Rural Financial Inclusions Survey (NAFIS) 2016-17, 50.6% of all households (including agricultural and non-agricultural households) in Tier-III to Tier-VI centres with population of less than 50,000 affirmed to have saved any money during one year preceding date of survey.

With a view to increasing banking penetration and to promote financial inclusion across the country, a National Mission on Financial Inclusion known as Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched on 28thAugust, 2014 at national level by the Hon’ble Prime Minister. Under the Yojana, a Basic Saving Bank Deposit (BSBD) account is opened without requirement of any minimum balance. Till 03.07.2019, a total of 36.06 crore accounts have been opened under PMJDY across the country with aggregate deposit of `1,00,495 crore. Out of total 36.06 crore accounts, 21.37 crore (59.26%) are in rural/semi-urban centres.

Further, to consolidate the gains made through financial inclusion initiatives implemented so far and deepen it further to accelerate the participation of the masses in the economic growth of the country, PMJDY has been extended beyond 14.8.2018 with following modification:

● Existing Over Draft (OD) limit of ` 5,000 revised to `10,000. ● There will not be any conditions attached for OD upto `2,000. ● Age limit for availing OD facility revised from 18-60 years to 18-65 years. ● The accidental insurance cover for new RuPay card holders raised from existing `1 lakh to `2 lakh to new PMJDY accounts opened after 28.8.2018.

For opening of accounts under PMJDY, the focus has now been shifted to from “every household to every adult”, with added emphasis on usage of accounts by enhancing DBT flows through these accounts, adoption of social security schemes, linking saving product to Jan Dhan accounts, promoting digital payments through the use of RuPay cards, etc.

This was stated by Shri Anurag Thakur, Minister of State for Finance & Corporate Affairs in a writtencrackIAS.com reply to a question in Lok Sabha today. *****

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-16 REVIVAL OF COOPERATIVE SOCIETIES Relevant for: Indian Economy | Topic: Transport & Marketing of agricultural produce

Ministry of Finance Revival of Cooperative Societies

Posted On: 15 JUL 2019 6:15PM by PIB Delhi

Cooperative Societies is a State Subject under Entry 32 of the State List of Seventh Schedule of the Constitution of India. National Bank for Agriculture and Rural Development (NABARD) has informed that the functioning of Cooperative Banks is guided by the Cooperative Societies Act of the respective States. At the State level, the Registrar of Cooperative Societies (RCS) of respective States exercises control over the Cooperative Banks. However, the banking functions of the Cooperative Banks are regulated by Reserve Bank of India under the Banking Regulation Act, 1949 (as applicable to Cooperatives).

The Government has taken the following measures to revive the Short Term Cooperative Credit Structure (STCCS).

a. Based on the recommendation of Vaidyanathan Committee, Government implemented a revival package for STCCS encompassing legal and institutional reforms, measures to improve the quality of management and financial assistance as necessary for their democratic, self-reliant and efficient functioning. Under the revival package, Government of India released `9,245 crore.

b. Recognizing the need to revamp ailing Cooperative Banks so that they are able to cater to the needs of farmers at their doorstep, the Union Government in 2014 announced implementation of the Scheme for revival of 23 Unlicensed DCCBs in the four States i.e Uttar Pradesh, Maharashtra, West Bengal and Jammu & Kashmir. The entire share of Union Government of `673.29 crore under the Scheme was released to NABARD for onward transmission to Cooperative Banks as per the scheme provisions.

The scheme guidelines prescribed achievement of certain deliverables by DCCBs which, inter alia, included attainment of the minimum level of CRAR, reduction of NPA level, enhancement deposits, building up strong Management Information System (MIS) and implementationcrackIAS.com of Core Banking Solution (CBS) etc.

To enable Cooperative Banks to meet the crop loan and term loan requirements of farmers, Government has set up two Funds in NABARD, to be met out of the shortfall in priority sector lending targets by commercial banks, as under:

i. Short Term Cooperative Rural Credit (Refinance) Fund: Through this Fund NABARD provides concessional short term refinance to Cooperative Banks for their crop loan lending. Such refinance is given to banks at an interest rate of 4.5% per annum, provided the banks lend to the ultimate borrower at an interest rate of 7% per annum upto an amount of `3 lakh per borrower. An amount of `45,000 crore has been allocated for the said Fund during 2018-19.

ii. Long Term Rural Credit Fund (LTRCF): This fund has been set up for the purpose of providing long term refinance support to Cooperative Banks and Regional Rural Banks at a concessional rate of interest for their lending towards investment activities in agriculture. Government has allocated additional resources of `15,000 crore to this Fund during 2018- 19.

This was stated by Shri Anurag Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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Ministry of Finance Payments through Debit Cards

Posted On: 15 JUL 2019 6:15PM by PIB Delhi

As per Reserve Bank of India (RBI), the limit for purchase of goods and services through a card are decided by the card-issuer bank. As apprised by Public Sector Banks (PSBs), the maximum limit of making payment through debit card for making a purchase has not been reduced by banks.

As apprised by Central Board of Direct Taxes (CBDT), Department of Revenue, the Government has taken various steps to move towards a less cash economy and reduce generation and circulation of black money. Finance Act, 2017, section 269ST, inserted in the Income-tax Act, 1961, provides that no person is permitted to receive an amount of Rs 2 lakh or more:-

i. in aggregate from a person in a day; ii. in respect of a single transaction; or iii. in respect of transactions relating to one event or occasion from a person; otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account. Further, penalty provision at the rate of 100 per cent of such amount is applicable, if amount is received in violation of the above provisions of section 269ST of the Act.

This was stated by Shri Anurag Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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Ministry of Finance Bank Charges for Transactions

Posted On: 15 JUL 2019 6:14PM by PIB Delhi

Accordingly, as on March, 2019 the above facilities are provided to 57.3 crore BSBD accounts (including 35.27 crore PMJDY accounts) free of charge.

For accounts other than BSBD accounts, as per Reserve Bank of India (RBI)’s Master Circular on “Customer Service in Banks” dated July 1, 2015, banks are permitted to fix service charges on various services rendered by them, as per their Board approved policy, while ensuring that the charges are reasonable and not out of line with the average cost of providing these services. Banks have been advised to identify basic services and the principles to be adopted/ followed by them for ensuring reasonableness in fixing such charges. They are also advised to take steps to ensure that customers are made aware of the service charges upfront and changes in the service charges are implemented only with the priorcrackIAS.com notice to the customers. As apprised by Reserve Bank of India (RBI), the total number of savings accounts in Public Sector Banks has increased since 2015. The details are as follows:

Year Total no. of Savings Accounts (in crore) 2015 88.39 2016 101.37 2017 112.88 2018 119.25

This was stated by Shri Anurag Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-16 RECOVERY UNDER SARFAESI ACT Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Recovery under SARFAESI Act

Posted On: 15 JUL 2019 6:14PM by PIB Delhi

The Central Government administers the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) which allows banks and financial institutions to recover their dues exceeding one lakh rupees by proceeding against secured assets of the borrower/guarantor without the intervention of the court/tribunals. The Government is not involved in commercial decisions or recovery proceedings of banks or financial institutions. As such, to address any concerns about property valuation, there are adequate provisions under Rule 8 (5) of the Security Interest (Enforcement) Rules, 2002 under the SARFAESI Act, that cast a duty on the Authorised Officer of the secured creditor (bank or financial institution) to obtain the valuation of the property from an approved valuer (as defined in the Rules) and, in consultation with the secured creditor, fix the reserve price of the property before putting the property on sale. Any aggrieved debtor/borrower has recourse to filing appeal in the Debts Recovery Tribunal (DRT) against action under the SARFAESI Act and further recourse to appeal against the DRT’s decision is available in the Debts Recovery Appellate Tribunal.

The SARFAESI Act does not differentiate between debtors/borrowers on any basis, including the financial status or debt value.

Substantive amendments were made in the SARFAESI Act on 14.8.2016 through the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016, in consultation with stakeholders. At present there is no proposal to amend the SARFAESI Act or the Rules framed thereunder.

This was stated by Shri Anurag Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-16 DISINVESTMENT OF PUBLIC SECTOR BANKS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Disinvestment of Public Sector Banks

Posted On: 15 JUL 2019 6:13PM by PIB Delhi

As per RBI data on global operations, aggregate gross advances of Public Sector Banks (PSBs) increased from Rs. 18,19,074 crore as on 31.3.2008 to Rs. 52,15,920 crore as on 31.3.2014. As per RBI inputs, the primary reasons for spurt in stressed assets have been observed to be, inter- alia, aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of Non-Performing Assets (NPAs). As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for. Further, all such schemes for restructuring stressed loans were withdrawn. With the recognition of stress since 2015, the adverse impact of the hidden stress became manifest as weakness in financial indicators of PSBs.

To strengthen the financial position of PSBs, over the last four financial years, Government has invested Rs. 2,45,997 crore in PSBs as a part of comprehensive 4R’s strategy that comprises recognising NPAs transparently, resolution and recovering value from stressed accounts through clean and effective laws and processes, recapitalising PSBs and reforming banks through the PSB Reforms Agenda. Steps taken under this strategy include, inter-alia, the following:

● Change in credit culture was effected, with the Insolvency and Bankruptcy Code (IBC) fundamentally changing the creditor-borrower relationship, taking away control of the defaulting company from promoters/owners and debarring wilful defaulters from the resolution process and debarring them from raising funds from the market. ● Over the last four financial years, PSBs were recapitalised to the extent of Rs. 3,11,796 crore, including mobilisation of over Rs. 65,799 crore by PSBs themselves. (iii) Key reforms were instituted in PSBs as part of PSBs Reforms Agenda, including the following: ● Board-approved Loan Policies of PSBs now mandate tying up necessary clearances/approvals and linkages before disbursement, scrutiny of group balance-sheet andcrackIAS.com ring-fencing of cash flows, non-fund and tail risk appraisal in project financing. ● Use of third-party data sources for comprehensive due diligence across data sources has been instituted, thus mitigating risk on account of misrepresentation and fraud. ● Monitoring has been strictly segregated from sanctioning roles in high-value loans, and specialised monitoring agencies combining financial and domain knowledge have been deployed for effective monitoring of loans above Rs. 250 crore. ● To ensure timely and better realisation in one-time settlements (OTSs), online end-to-end OTS platforms have been set up. Positive impact on PSBs of Government’s 4R’s strategy is now visible and includes, inter- alia¸ the following: ● (i) Record recovery of Rs. 3,16,479 crore over the last four financial years, including record recovery of Rs 1,27,987 crore in FY 2018-19, has been effected. ● (ii) Assets quality has improved as reflected in 45% year-on-year reduction in slippage into NPAs in FY 2018-19, and 63% reduction in 31 to 90 days overdue corporate accounts by March 2019 from their peak in June 2017. ● (iii) With stress recognition largely completed, significant headway in recovery and resolution under IBC, and reduced slippages as a result of improved underwriting and monitoring, gross NPAs of PSBs have started declining, after peaking in March 2018, registering a decline of Rs. 1,06,032 crore, from Rs. 8,95,601 crore in March 2018 to Rs. 7,89,569 crore in March 2019. Thus, by addressing the underlying causes behind the build-up of stress in PSBs through comprehensive reform to change credit culture and tighten discipline in the financial system, institutionalising robust underwriting and monitoring, governance reforms, and leveraging technology, PSBs have emerged stronger.

Note: Figures cited above for PSBs include those for IDBI Bank Limited, which was recategorised as a private sector bank by RBI with effect from 21.1.2019

This was stated by Shri Anurag Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.pib.nic.in Date : 2019-07-16 CHARGES WAIVER ON DIGITAL TRANSACTIONS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Charges Waiver on Digital Transactions

Posted On: 15 JUL 2019 6:12PM by PIB Delhi

In order to promote digital payments, MeitY vide their notification dated 27th December, 2017 has allowed reimbursement of MDR charges on Debit cards/ BHIM-UPI and BHIM Aadhaar Pay transactions for value upto Rs. 2000, for two years effective from 1st Jan, 2018.

All public transport operators have been requested to enable National Common Mobilty Card (NCMC) for digital payments.

As per the Budget speech 2019-20, Hon’ble Finance Minister has, inter-alia, proposed that business establishments with annual turnover of more than Rs.50 crore shall offer low cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants. RBI and Banks will absorb these costs from the savings that will accrue to them on account of handling less cash as people move to these digital modes of payment.

This was stated by Shri Anurag Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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Ministry of Finance Interest-Free Loan to Farmers

Posted On: 15 JUL 2019 6:11PM by PIB Delhi

Government fixes agriculture credit disbursement targets for the banking sector every year. Details of agriculture credit disbursement by banks during the last three years as reported by National Bank for Agriculture and Rural Development (NABARD) are as under:

(Amount in `crore)

Year Amount 2016-17 9,15,509.92 2017-18 10,65,755.67 2018-19* 12,54,762.20 *provisional

With a view to ensure availability of agriculture credit at a reduced interest rate of 7% p.a. to the farmers, the Government of India in the Department of Agriculture Cooperation and Farmers Welfare (DAC&FW) implements an interest subvention scheme for short term crop loans up to `3.00 lakh. The scheme provides interest subvention of 2% per annum to Banks on use of their own resources. Besides, additional 3% incentive is given to the farmers for prompt repayment of the loan, thereby reducing the effective rate of interest to 4%.

Under the aforesaid interest subvention scheme, to provide relief to farmers affected by natural calamities, the interest subvention (2%) on crop loan continues to be available to banks for the first year on the restructured amount. Such restructured loans may, however, attract normal rate of interest from the second year onwards as per the policy laid down by the Reserve Bank of India (RBI).

In order to provide relief to the farmers affected due to severe natural calamities, the GovernmentcrackIAS.com in DAC&FW has decided that interest subvention of 2% per annum will be made available to banks for first three years/entire period (subject to a maximum of five years) on the restructured loan amount, and in all such cases the benefit of prompt repayment incentive at 3% per annum shall also be provided to the affected farmers. The grant of such benefits in cases of severe natural calamities shall, however, be decided by a High Level Committee (HLC) based on the recommendation of Inter-Ministerial Central Team (IMCT) and Sub Committee of National Executive Committee (SC-NEC).

The Government of India/ Reserve Bank of India (RBI)/ NABARD have, inter alia, taken the following major initiatives for providing hassle free crop loans to farmers of the country. The Kisan Credit Card (KCC) Scheme, enables farmers to purchase agricultural inputs such as seeds, fertilisers, pesticides, etc. and draw cash to satisfy their agricultural and consumption needs. The KCC Scheme has since been simplified and converted into ATM enabled RuPay debit card with, inter alia, facilities of one-time documentation, built-in cost escalation in the limit, any number of drawals within the limit, etc.

The credit limit/ loan amount under KCC is fixed by Banks as per guidelines prescribed in the Master Circular dated July 4, 2018 issued by RBI. The short term credit limit under KCC for the first year is determined based on Scale of Finance for the crop (as decided by District Level Technical Committee) x Extent of area cultivated + 10% of limit towards post- harvest/household/ consumption requirements + 20% of limit towards repairs and maintenance expenses of farm assets + crop insurance and/or accident insurance including personal accidental insurance scheme (PAIS), health insurance & asset insurance. The limit for second and subsequent years (3rd, 4th and 5th year) is arrived based on first year limit for crop cultivation purpose plus 10% of the limit towards cost escalation / increase in scale of finance and estimated term loan component for the tenure of Kisan Credit Card, i.e., five years.

The short term loan limit arrived for the 5th year plus the estimated long term loan requirement will be the Maximum Permissible Limit (MPL) and is to be treated as the Kisan Credit Card limit.

Under the KCC Scheme, a flexible limit of `10,000 to `50,000 has been provided to marginal farmers (as Flexi KCC) based on the land holding and crops grown including post harvest warehouse storage related credit needs and other farm expenses, consumption needs, etc., plus small term loan investments without relating it to the value of land.

As per RBI directions, Domestic Scheduled Commercial Banks are required to lend 18% of the Adjusted Net Bank Credit (ANBC) or Credit Equivalent to Off-Balance Sheet Exposure (CEOBE), whichever is higher, towards agriculture. A sub-target of 8% is also prescribed for lending to small and marginal farmers including landless agricultural labourers, tenant farmers, oral lessees and share croppers. Similarly, in the case of Regional Rural Banks 18% of their total outstanding advances is required to be towards agriculture and a sub-target of 8% has been set for lending to small and marginal farmers.

To enhance coverage of small and marginal farmers in the formal credit system, RBI has decided to raise the limit for collateral-free agriculture loans from `1 lakh to `1.6 lakh.

The requirement of 'no due’ certificate has also been dispensed with for small loans up to `50,000 to small and marginal farmers, share-croppers and the like and, instead, only a self- declaration from the borrower is required.

To bring small, marginal, tenant farmers, oral lessees, etc. into the fold of institutional credit, Joint crackIAS.comLiability Groups (JLGs) have been promoted by banks. This was stated by Shri Anurag Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-16 BSBD ACCOUNTS SCHEME Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance BSBD Accounts Scheme

Posted On: 15 JUL 2019 6:10PM by PIB Delhi

Reserve Bank of India (RBI) vide its circular dated 10.06.2019 has revised their earlier instructions dated 10.08.2012 on Basic Savings Bank Deposit (BSBD) accounts. As per the revised Instructions, Banks are advised to offer the following basic minimum facilities in the BSBD Account, free of charge, without any requirement of minimum balance.

Deposit of cash at bank branch as well as ATMs/Cash Deposit Machines (CDMs) Receipt/ credit of money through any electronic channel or by means of deposit /collection of cheques drawn by Central/State Government agencies and departments No limit on number and value of deposits that can be made in a month Minimum of four withdrawals in a month, including ATM withdrawals ATM Card or ATM-cum-Debit Card.

Further, Banks are free to provide additional value-added services, including issue of cheque book, beyond the above minimum facilities, which may/may not be priced (in non- discriminatory manner) subject to disclosure. The availment of such additional services should be at the option of the customers.

However, while offering such additional services, banks shall not require the customer to maintain a minimum balance. Offering such additional services would not make it a non- BSBD Account, so long as the prescribed minimum services are provided free of charge. The BSBD Accounts are considered a normal banking service available to all.

As informed by banks, conversion of BSBD account into normal savings bank account is allowed only at the written request of the customer. RBI under Banking Regulation Act, 1949 can impose penalty on banks for non-compliance of any instructions issued by it.

This was stated by Shri Anurag Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.thehindu.com Date : 2019-07-17 CHINESE CHECK: ON ECONOMIC TROUBLES Relevant for: Indian Economy | Topic: Issues relating to Planning & Economic Reforms

The Chinese economy is seeing the first signs of trouble after long years of sustained growth that rode on cheap labour and high volumes of exports. Data released by the National Bureau of Statistics on Monday revealed that the economy grew by 6.2% in the second quarter, its slowest pace in 27 years. This is in contrast to the growth rates of 6.4% and 6.6% reported for the first quarter and the full year of 2018, respectively. The faltering growth rate was due to a slump in exports in June amidst China’s ongoing trade war with the United States and the downturn witnessed by sectors such as housing construction, where investor sentiments play a major role. Many economists believe that the worst may not yet be over for China and that economic growth could further worsen in the coming quarters. But just as growth seems to be faltering, the latest growth figures also showed that the retail sales and industrial output components of the growth numbers witnessed steady growth, suggesting that domestic demand may be compensating for the dropping appetite for Chinese exports weighed down by high tariffs. But with China still heavily reliant on exports and its trade war with the U.S. showing no signs of coming to an end, the pressure on growth is likely to remain for some more time. So the Chinese government, which has tried to boost the economy through measures such as tax cuts, increased public spending and a relaxation in bank reserve requirements to encourage banks to increase lending, will hope that domestic demand for its goods will hold up the economy.

China’s quarterly GDP numbers, while useful in many ways, don’t reveal very much about the underlying challenges facing the country. One is the need to improve the credibility of data released by the Chinese government. An even larger challenge is the urgent need to restructure the Chinese economy from one that is driven heavily by state-led investment and exports to one that is driven primarily by market forces. The high-growth years of the Chinese economy were made possible by the huge amount of liquidity provided by the Chinese state and the large and affordable workforce that helped build China into an export powerhouse. But now, with China’s tried and tested growth model facing the threat of getting derailed as the export and investment boom comes to an end, the Chinese will have to build a more sustainable model, or forfeit hopes of double-digit economic growth in the future. As of now, there are no signs to suggest that the Chinese authorities are looking at implementing deep-seated structural reforms reminiscent of its early decades of liberalisation that can help fundamentally restructure the economy. There might not be a need for radical macroeconomic changes, but China’s economic troubles will not go away unless the government boosts domestic consumption and reduces the reliance on exports.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 ORGANIC FARMING Relevant for: Indian Economy | Topic: Major Crops, Cropping Patterns and various Agricultural Revolutions

Ministry of Agriculture & Farmers Welfare Organic Farming

Posted On: 16 JUL 2019 6:07PM by PIB Delhi

Realizing the potential and benefits of organic farming and to improve the economic condition of farmers in the country, Government of India is promoting organic farming through the dedicated schemes of Paramparagat Krishi Vikas Yojana (PKVY) and Mission Organic Value Chain Development for North Eastern Region (MOVCDNER) under National Mission for Sustainable Agriculture (NMSA) since 2015-16. Under PKVY, flexibility is given to states to adopt any model of Organic Farming including ZBNF depending on farmer’s choice that is free from chemicals, pesticides residues and adopts eco-friendly low cost technologies.

Under PKVY, assistance of Rs. 50,000 per hectare/ 3 years is allowed out of which Rs. 31,000 (61%) is provided to farmer directly through DBT for input (biofertilisers, biopesticides, vermicompost, botanical extracts etc) production/ procurement, packing, marketing etc.

Under MOVCDNER , assistance is provided to the farmers in a value chain mode starting from formation of Farmers Producer Organisations (FPOs), on/off farm input production, supply of seeds/ planting materials, post harvest infrastructure including collection, sorting, grading facilities, establishment of integrated processing unit, refrigerated transportation, pre-cooling/ cold stores chamber, branding, labelling and packaging, etc .

These schemes are implemented through State Governments at district and village level depending on the interest of the farmers. PKVY scheme is being implemented in 29 States & UTs and MOVCDNER scheme is implemented in the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura since 2015-16.

This information was given in a written reply by the Union Minister of Agriculture and Farmers Welfare Shri Narendra Singh Tomar in Lok Sabha today.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 WITHDRAWAL OF MINIMUM BALANCE PENALTY BY BANKS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Withdrawal of Minimum Balance Penalty by Banks

Posted On: 16 JUL 2019 6:21PM by PIB Delhi

According to Reserve Bank of India (RBI) guidelines, banks do not have any Minimum Balance requirement for Basic Savings Bank Deposit accounts (BSBD), including accounts opened under Pradhan Mantri Jan DhanYojana (PMJDY). As on March 2019, there were 57.3 crore BSBD accounts across the country including 35.27 crore (61.6%) Jan-Dhan accounts. Hence, for these accounts there are no charges for not maintaining minimum balance. BSBD accounts are considered normal banking services available to all and it offers certain basic minimum facilities free of charge.

For accounts other than BSBD accounts, as per RBI’s Master Circular on “Customer Service in Banks” dated July 1, 2015, banks are permitted to fix service charges on various services rendered by them, as per their Board approved policy, while ensuring that the charges are reasonable and not out of line with the average cost of providing these services. Further, banks have been advised to identify basic services and the principles to be adopted/ followed by them for ensuring reasonableness in fixing such charges. Banks are also advised to take steps to ensure that customers are made aware of the service charges upfront and changes in the service charges are implemented only with the prior notice to the customers.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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Ministry of Finance Seeding of Bank Account and Linking with Aadhaar

Posted On: 16 JUL 2019 6:20PM by PIB Delhi

Ministry of Electronics and Information Technology (MeitY) has apprised that “The Aadhaar and Other Laws (Amendment) Bill, 2019” has been passed by the Parliament. The bill, inter-alia, has the provision for allowing the use of Aadhaar authentication on voluntary basis as acceptable Know Your Customer (KYC) document, by inserting Section 11A under the Prevention of Money Laundering Act, 2002.

Further, as per Reserve Bank of India (RBI’s) Master Direction on KYC dated 25.2.2016 (as amended in May 2019), banks are to obtain the Aadhaar number from an individual who is desirous of receiving any benefit or subsidy under any scheme notified under section 7 of the Aadhaar (Targeted Delivery of Financial and Other subsidies, Benefits and Services) Act, 2016 (18 of 2016).

As far as the requirement of Aadhaar number for receipt of certain subsidies, benefits and services etc. are concerned, Section 7 of The Aadhaar (Targeted Delivery of Financial and Other subsidies, Benefits and Services) Act, 2016 (18 of 2016), inter-alia, provides that:

“The Central Government or, as the case may be, the State Government may, for the purpose of establishing identity of an individual as a condition for receipt of a subsidy, benefit or service for which the expenditure is incurred from, or the receipt therefrom forms part of, the Consolidated Fund of India, require that such individual undergo authentication, or furnish proof of possession of Aadhaar number or in the case of an individual to whom no Aadhaar number has been assigned, such individual makes an application for enrolment:

Provided that if an Aadhaar number is not assigned to an individual, the individual shall be offered alternate and viable means of identification for delivery of the subsidy, benefit or service.”

The linking of the bank accounts with Aadhaar for receiving subsidy/direct benefit transfers from the Government, including the State Governments is done as per the extant provisions of the Aadhaar (Targeted Delivery of Financial and Other subsidies, Benefits and Services)crackIAS.com Act, 2016 (18 of 2016).

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 FORMATION OF NATIONAL RURAL BANK Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Formation of National Rural Bank

Posted On: 16 JUL 2019 6:18PM by PIB Delhi

The Parliamentary Standing Committee on Finance (2003) in its 55th Report recommended that Government may consider the setting up of an apex body viz. National Rural Bank of India. Government has been receiving various representations from time to time in this regard.

Government examined the proposal in consultation with the State Governments and Sponsor Banks and in the Action Taken Report on the recommendations in the aforesaid Report of Parliamentary Standing Committee on Finance (2003), Government, inter alia, stated that “The proposal for consolidating the RRBs under a National Rural Bank or NABARD has not been favoured so far for various reasons. State Governments and sponsor banks were consulted in a meeting taken by Secretary (FS) on 1.5.2004 on the proposal made by the select Group of CMDs. Sponsor Banks were supportive of the proposal but most of the States favoured state level amalgamation without any additional financial support.”

The steps taken by the Government to strengthen the RRBs are as under:

1. Government had initiated the process of structural consolidation of RRBs in 2004-05 by amalgamating RRBs of the same Sponsor Bank within a State. The amalgamation process brought down the number of RRBs from 196 to 82. With a view to enable RRBs to minimize their overhead expenses, optimize the use of technology, enhance the capital base and area of operation and increase their exposure, the process of amalgamation of RRBs was again carried out in the year 2011. During 2011-2014, the number of RRBs was brought down to 56 from 82. In the year 2018-19, amalgamation of RRBs has been carried out based on a roadmap proposed by NABARD and consultation with respective Sponsor Banks and State Governments. Accordingly, the number of RRBs has been brought down to 45 from 56, as on 01.04.2019. It is expected that amalgamation will bring about better efficiency of scale, higher productivity, improved financial health of the RRBs and greater credit flow to rural areas. crackIAS.com 2. Recapitalization support is provided to RRBs to augment their capital so as to comply with regulatory capital requirements.

3. Periodic review of financial performance of RRBs, including business diversifications, profit planning, revenue management and NPA management through conduct of national level meetings by NABARD and through Empowered Committee (EC) meetings at state level.

4. Regular Capacity building efforts are undertaken by NABARD like training at Bankers Institute of Rural Development (BIRD), conduct of Organizational Development Initiative (ODI), exposure visits, etc.

5. NABARD provides regular policy support to RRBs in matters relating to human resources and an arrangement has been made for redressal of grievances through Joint Consultative Committee (JCC).

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 CMS TO FILE ONLINE COMPLAINT AGAINST BANKS AND NBFCS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance CMS to File Online Complaint Against Banks and NBFCS

Posted On: 16 JUL 2019 6:19PM by PIB Delhi

Reserve Bank of India (RBI) has informed that the Complaint Management System (CMS) was launched on June 24, 2019. The total number of complaints received against banks and NBFCs as on July 05, 2019 are given below:-

Complaints received against Grand Total Banks 10,249 NBFCs 133 Total 10,382

CMS is an application for filing of complaints with RBI against any of the regulated entities. The complaints falling under the grounds of complaints of the Banking Ombudsman (BO) Scheme, 2006 and Ombudsman Scheme for NBFCs, 2018 are resolved as per the provisions of Schemes.

Clause 7(2) of the BO Scheme reads as ‘The Banking Ombudsman shall receive and consider complaints relating to the deficiencies in banking or other services filed on the grounds mentioned in clause 8 irrespective of the pecuniary value of the deficiency in service complained and facilitate their satisfaction or settlement by agreement or through conciliation and mediation between the bank concerned and the aggrieved parties or by passing an Award as per the provisions of the Scheme.’

Clause 7(2) of the Ombudsman Scheme for NBFC reads as ‘The Ombudsman shall receive and consider complaints relating to the deficiencies in services filed on any one or more of the grounds mentioned in Clause 8 and facilitate their satisfaction or settlement by agreement or through conciliation and mediation between the non-banking financial company concerned and the aggrievedcrackIAS.com party or by passing an Award in accordance with the provisions of the Scheme.’ At present there is no IVR system to track the status of complaints.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 SCHEME TO PROVIDE LOANS UNDER SHORT TERM AGRICULTURE LOAN Relevant for: Indian Economy | Topic: Agricultural Finance & Insurance

Ministry of Finance Scheme to Provide Loans Under Short Term Agriculture Loan

Posted On: 16 JUL 2019 6:17PM by PIB Delhi

In order to provide short term crop loans upto `3.00 lakh to farmers at a concessional interest rate of 7 per cent per annum, the Government of India in the Department of Agriculture Cooperation and Farmers Welfare (DAC&FW) implements an interest subvention scheme which provides interest subvention of 2% per annum to lending institutions viz. Public Sector Banks (PSBs), Private Sector Commercial Banks (in respect of loans given by their rural and semi urban branches only), Regional Rural Banks (RRBs) and Cooperative Banks on use of their own resources. Besides, additional 3% incentive is given to the farmers for prompt repayment of the loan, thereby reducing the effective rate of interest to 4%.

As reported by the National Bank for Agriculture and Rural Development (NABARD) the number of farmers who have availed crop loans from Cooperative Banks and RRBs and benefited with 3% prompt repayment incentive under the scheme in Maharashtra during the last 3 years are given in following table:

No. of farmers provided 3% prompt repayment Year incentive 2015-16 2636190 2016-17 1825900 2017-18* 790724

*(provisional)

As regards commercial banks, the State wise data in respect of farmers benefitted under InterestcrackIAS.com Subvention Scheme is not maintained centrally by Reserve Bank of India. Government releases funds to settle interest subvention claims of banks through Reserve Bank of India and NABARD. The details of amount released under Interest Subvention Scheme during the last three years are as under:

(`in crore)

Year 2015-16 2016-17 2017-18 Released 13,000 13,397.13 13045.72

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 AMENDING SECRECY CLAUSE TO DISCLOSE THE BORROWERS NAME Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Amending Secrecy Clause to Disclose the Borrowers Name

Posted On: 16 JUL 2019 6:17PM by PIB Delhi

As per Reserve Bank of India (RBI)’s data on global operations, aggregate gross advances of Public Sector Banks (PSBs) increased from Rs. 18,19,074 crore as on 31.3.2008 to Rs. 52,15,920 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia, aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of Non-Performing Assets (NPAs). As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for. Further, all such schemes for restructuring stressed loans were withdrawn. Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of PSBs, as per RBI data on global operations, rose from Rs. 2,79,016 crore as on 31.3.2015, to Rs. 8,95,601 crore as on 31.3.2018, and as a result of Government’s 4R’s strategy of recognition, resolution, recapitalisation and reforms, have since declined by Rs. 1,56,060 crore to Rs. 7,39,541 crore as on 31.3.2019 (provisional data on global operations for 31.3.2019 as reported by RBI on 2.7.2019).

i. Change in credit culture has been effected, with the Insolvency and Bankruptcy Code (IBC) fundamentally changing the creditor-borrower relationship, taking away control of the defaulting company from promoters/owners and debarring wilful defaulters from the resolution process and debarring them from raising funds from the market. ii. Over the last four financial years, PSBs have been recapitalised to the extent of Rs. 3.12 lakh crore, with infusion of Rs. 2.46 lakh crore by the Government and mobilisation of over Rs.crackIAS.com 0.66 lakh crore by PSBs themselves enabling PSBs to pursue timely resolution of NPAs. iii. Key reforms have been instituted in PSBs as part of the PSBs Reforms Agenda, including the following:

a. Board-approved Loan Policies of PSBs now mandate tying up necessary clearances/approvals and linkages before disbursement, scrutiny of group balance-sheet and ring-fencing of cash flows, non-fund and tail risk appraisal in project financing. b. Use of third-party data sources for comprehensive due diligence across data sources has been instituted, thus mitigating risk on account of misrepresentation and fraud. c. Monitoring has been strictly segregated from sanctioning roles in high-value loans, and specialised monitoring agencies combining financial and domain knowledge have been deployed for effective monitoring of loans above Rs. 250 crore. d. To ensure timely and better realisation in one-time settlements (OTSs), online end-to-end OTS platforms have been set up. Enabled by the above steps, as per RBI data on global operations, the NPAs of PSBs, after reaching a peak of Rs. 8,95,601 crore as on 31.3.2018, have declined by Rs. 1,56,060 crore to Rs. 7,39,541 crore as on 31.3.2019 (provisional data), and PSBs have effected record recovery of Rs. 3,09,568 crore over the last four financial years, including record recovery of Rs. 1,21,076 crore during 2018-19 (provisional data).

As per RBI data on global operations as on 31.3.2019 (provisional data), the total funded amount outstanding of the top 100 NPA borrowers of PSBs was Rs. 3,22,108 crore, amounting to 43.6% of gross NPAs of PSBs.

As per inputs from RBI, lists of suit-filed wilful defaulters of Rs. 25 lakh and above and of suit- filed defaulters of Rs. 1 crore and above stand disclosed in public domain on the websites of Credit Information Companies (CICs) while the list of non-suit filed wilful defaulters is confidential in nature and is exempt from disclosure under section 45E of the Reserve Bank of India Act, 1934. No legislation to amend legal disclosability as above has been introduced by the Government. In this connection, RBI has apprised that confidentiality of information related to bank customers is a universally accepted phenomenon.

Note: Figures for PSBs for the financial year 2018-19 exclude those for IDBI Bank Limited, which was recategorised as a private sector bank by RBI with effect from 21.1.2019.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.comEND Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 DUE TO THE CENTRAL GOVERNMENT’S 4R’S STRATEGY OF RECOGNITION, RESOLUTION, RECAPITALISATION AND REFORMS, NPAS HAVE SINCE DECLINED BY RS. 1,06,032 CRORE TO RS. 7,89,569 CRORE AS ON 31.3.2019 Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Due to the Central Government’s 4R’s strategy of Recognition, Resolution, Recapitalisation and Reforms, NPAs have since declined by Rs. 1,06,032 crore to Rs. 7,89,569 crore as on 31.3.2019

Posted On: 16 JUL 2019 6:14PM by PIB Delhi

As per inputs received from Reserve Bank of India (RBI), as on 31.3.2019, there were 1,938 unique borrowers with funded amount outstanding (FAO) of more than Rs. 25 crore who had defaulted on their loans. Regarding the list of such borrowers, RBI has apprised that under the provisions of section 45E of the Reserve Bank of India Act, 1934, RBI is prohibited from disclosing credit information. Section 45E provides that credit information submitted by a bank shall be treated as confidential and not be published or otherwise disclosed.

As per RBI data on global operations, aggregate gross advances of Public Sector Banks (PSBs) increased from Rs. 18,19,074 crore as on 31.3.2008 to Rs. 52,15,920 crore as on 31.3.2014. As per RBI inputs, the primary reasons for spurt in stressed assets have been observed to be, inter- alia, aggressive lending practices, wilful default / loan frauds / corruption in some cases, and economic slowdown. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of NPAs. As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for. Further, all such schemes for restructuring stressed loans were withdrawn. Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of PSBs, as per RBI data on global operations, rose from Rs. 2,79,016 crore as on 31.3.2015, to Rs. 8,95,601 crore as on 31.3.2018, and as a result of Government’s 4R’s strategy of recognition, resolution, recapitalisation and reforms, NPAs have since declined by Rs. 1,06,032crackIAS.com crore to Rs. 7,89,569 crore as on 31.3.2019 (provisional data as reported by RBI on 2.7.2019).

A number of initiatives have been taken for stricter check on loan advances of large amounts, including, inter alia, the following:

1. PSBs have been asked to examine all accounts exceeding Rs. 50 crore, if classified as NPA, from the angle of possible fraud and to immediately initiate examination of the issue of wilful default once a fraud is reported. 2. Key reforms were instituted in PSBs as part of PSBs Reforms Agenda, including the following:

3. Through enactment of the Insolvency and Bankruptcy Code, 2016, taking over of management of the affairs of the corporate debtor at the outset of the corporate insolvency resolution process and debarment of wilful defaulters and persons associated with NPA accounts from the process have been provided for, which has instilled greater credit discipline among corporate debtors. 4. PSBs have put in place arrangements for checking credit information reports of Credit Information Companies for sanction and renewal of corporate loans. 5. A Central Repository of Information on Large Credits (CRILC) has been created to collect, store and disseminate data on all borrowers’ credit exposures of Rs. 5 crore and above, to enable better monitoring. 6. To enable banks to inform relevant authorities if need arises, PSBs have been advised to obtain a certified copy of the passport of promoters/Directors and other authorised signatories of companies availing of loan facilities of more than Rs. 50 crore. The heads of PSBs have also been empowered to issue requests for issue of Look Out Circulars. 7. A Central Fraud Registry has been created for all frauds reported by banks to RBI, involving amount above Rs. 1 lakh. Enabled by the above steps, financial gains from cleaning of the banking system are now amply visible. As per RBI data on global operations, the NPAs of PSBs, after reaching a peak of Rs. 8,95,601 crore as on 31.3.2018, have since declined by Rs. 1,06,032 crore to Rs. 7,89,569 crore as on 31.3.2019 (provisional data for the financial year ending March 2019). PSBs have recovered Rs. 3,16,479 crore over the last four financial years, including a record recovery of Rs. 1,27,987 crore during 2018-19 (provisional data for the financial year ending March 2019, as reportedcrackIAS.com by RBI on 9.7.2019). Note: Figures cited above for PSBs include those for IDBI Bank Limited, which was recategorised as a private sector bank by RBI with effect from 21.1.2019.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 PSBS BRANCHES IN RURAL AREAS FOR SUCCESS OF PMJDY Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance PSBs Branches in Rural Areas for Success of PMJDY

Posted On: 16 JUL 2019 6:14PM by PIB Delhi

Under Pradhan Mantri Jan Dhan Yojana (PMJDY), account holders are provided banking services free of charge and without any requirement of maintaining minimum balance. As per the information provided by banks, district-wise number of accounts opened under PMJDY in Gujarat as on 03.07.2019 is at Annexure I. State-wise details of deposit balance in PMJDY as on 03.07.2019 is at Annexure II.

Reserve Bank of India (RBI) has rationalized its Branch Authorisation Policy and granted general permission to domestic Scheduled Commercial Banks (excluding Regional Rural Banks), including Public Sector Banks, to open banking outlets (a fixed point service delivery unit, manned by either bank’s staff or its Business Correspondents) at any place in the country, without seeking prior approval of RBI in each case, subject to at least 25 percent of the total number of banking outlets opened during a financial year being in unbanked rural centres (Tier 5 and Tier 6 centres ie. having population less than 10,000). For this purpose, banking outlets opened in any centre having population less than 50,000 in North Eastern states and Sikkim and also Left Wing Extremism (LWE) affected districts as notified by the Government of India are also considered as equivalent to opening of banking outlets in unbanked rural centres.

Under PMJDY scheme all villages were mapped into 1.59 lakh Sub-Service Areas (SSAs) where one SSA catering to 1,000 to 1,500 households. As informed by banks, while 0.33 lakh SSAs have been covered with bank branches, 1.26 lakh SSAs have been covered by deployment of interoperable Bank Mitras.

As per RBI, since the launch of PMJDY in August 2014, the number of rural branches of Scheduled Commercial Banks (SCBs) has increased from 41,823 in March 2014 to 51,653 in March, 2019. Further, number of Branch less mode / Business Correspondents (BCs) of Scheduled Commercial Banks (SCBs) in rural areas has also increased from 3.37 lakh in March, 2014 to 5.15 lakh in March, 2018.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a writtencrackIAS.com reply to a question in Lok Sabha today. ****

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Annexure I “PSBs branches in rural areas for success of PMJDY” Total Number of accounts opened under PMJDY in Gujarat as on 03.07.2019 District PMJDY Accounts Ahmadabad 1137933 Amreli 227839 Anand 470256 Arvalli 255369 Banas Kantha 1024251 Bharuch 494486 Bhavnagar 586314 Boatad 118779 Chhotaudepur 121133 Devbhoomi Dawarka 87637 Dohad 844455 Gandhinagar 205834 Gir Somnath 165110 Jamnagar 331213 Junagadh 315936 Kachchh 484639 Kheda 535284 Mahesana 401521 Mahisagar 61134 Morbi 97760 Narmada 241106 Navsari 356933 Panch Mahals 607206 Patan 359394 Porbandar 86108 Rajkot 552828 Sabar Kantha 420025 Surat 1450148 SurendranagarcrackIAS.com409055 Tapi 199603 The Dangs 102381 Vadodara 788624 Valsad 535919 Total 14076213 Source: Banks

Annexure II “PSBs branches in rural areas for success of PMJDY” Deposit in PMJDY accounts as on 03.07.2019 Deposit in PMJDY Accounts (in Rs. State crore) Andaman & Nicobar Islands 23.76 Andhra Pradesh 1981.73 Arunachal Pradesh 118.07 Assam 3519.40 Bihar 9888.03 Chandigarh 105.10 Chhattisgarh 3214.06 Dadra & Nagar Haveli 49.67 Daman & Diu 18.89 Delhi 1783.14 Goa 90.79 Gujarat 4264.10 Haryana 3253.33 Himachal Pradesh 592.18 Jammu & Kashmir 949.45 Jharkhand 3194.51 Karnataka 3639.04 Kerala 1295.84 Lakshadweep 8.38 Madhya Pradesh 5134.27 Maharashtra 6058.64 Manipur 201.56 Meghalaya 244.02 MizoramcrackIAS.com88.03 Nagaland 54.79 Odisha 4494.46 Puducherry 39.52 Punjab 2555.18 Rajasthan 7541.72 Sikkim 39.66 Tamil Nadu 1937.10 Telangana 1694.20 Tripura 682.05 Uttar Pradesh 18235.10 Uttarakhand 1108.46 West Bengal 12397.70 Total 100495.95 Source: Banks

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 MORE SECURITY FEATURES IN ATM/DEBIT CARDS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance More Security Features in ATM/Debit Cards

Posted On: 16 JUL 2019 6:13PM by PIB Delhi

Reserve Bank of India (RBI) has issued various instructions to banks in respect of security and risk mitigation measures related to card transactions, which are as follows:

i. Provide online alerts for all card transactions. ii. Introduce additional security measures, inter-alia, including the following:

a. All new debit cards and credit cards to be issued only for domestic usage, unless international use is specifically sought by the customers. b. To ensure that the terminals installed at the merchants for capturing card payments (including the double swipe terminals used) should be certified for PCI-DSS (Payment Card Industry-Data Security Standards) and PA-DSS (Payment Applications-Data Security Standards). c. To ensure that all acquiring infrastructure that is currently operational on IP (Internet Protocol) based solutions are mandatorily made to go through PCI-DSS and PA-DSS certification. This should include acquirers, processors / aggregators and large merchants.

● (iii) To convert all existing Magstripe cards issued by them to EMV Chip and PIN cards. ● (iv) To mandatorily put in place Additional Factor of Authentication (AFA) for all Card Not Present (CNP) transactions.

As apprised by Reserve Bank of India (RBI), no specific studies have been conducted by RBI pertaining to existing practices in European Countries and other foreign nations. However, global best practices are also considered at the time of preparing any policy.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a writtencrackIAS.com reply to a question in Lok Sabha today. ****

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 GROWTH OF DAIRY SECTOR Relevant for: Indian Economy | Topic: Economics of Animal-Rearing incl. White, Blue & Pink Revolutions

Ministry of Fisheries, Animal Husbandry & Dairying Growth of Dairy Sector

Posted On: 16 JUL 2019 6:10PM by PIB Delhi

The growth rate of dairy sector in terms of total milk production in the country is given in the following table:

Growth rate during 2013 2013-14 2018-19* -14 to 2018-19 Estimated Milk 137.7 188.1 36.6% Production(million tonnes)

* Provisional (based on the outcomes of annual Integrated Sample Survey conducted during the period March 2018 to February 2019)

Further, the demand of milk production across the country has not been assessed.

As per 19th Livestock Census-2012, the total cattle population in the country is 190.90 million numbers which covers all rural and urban areas including rain fed areas of the country.

To overcome the shortage of feed and fodder in the country, the Ministry of Fisheries, Animal Husbandry and Dairying is implementing Centrally Sponsored Scheme National Livestock Mission with a Sub Mission on Feed and Fodder Development since 2014-15. Under the Sub-Mission, financial assistance is provided to the Animal Husbandry Departments of the States/UTs including Milk Co-operatives for feed and fodder development under the following components:

● Fodder Production from Non-forest wasteland/ rangeland / grassland/ non-arable land ● Fodder production from Forest land ● Fodder Seed Procurement/ Production & Distribution ● Introduction of Hand Driven Chaff-Cutter ● Introduction of Power Driven Chaff-Cutter ● Distribution of low capacity, tractor mountable Fodder Block Making units, hay baling machines/reapers/forage harvesters crackIAS.com● Establishment of silage making Units ● Establishment of by-pass protein production units ● Establishment of Area Specific Mineral Mixture / Feed Pelleting/ Feed Manufacturing Unit. ● Establishment/modernization of Feed Testing Laboratories This information was given in a written reply by the Minister of State for Fisheries, Animal Husbandry and Dairying, Shri Sanjeev Balyan in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 REHABILITATION OF STRAY CATTLE Relevant for: Indian Economy | Topic: Economics of Animal-Rearing incl. White, Blue & Pink Revolutions

Ministry of Fisheries, Animal Husbandry & Dairying Rehabilitation of Stray Cattle

Posted On: 16 JUL 2019 6:09PM by PIB Delhi

As per the Article 246(3) of the Constitution of India in List II of Seventh Schedule the Preservation, protection and improvement of stock and prevention of animal diseases; veterinary training and practice is under State list on which the State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule. Further, as per the Article 48 of the Constitution of India State shall endeavour to organise agriculture and animal husbandry on modern and scientific lines and shall, in particular, take steps for preserving and improving the breeds, and prohibiting the slaughter, of cows and calves and other milch and draught cattle.

Further, as per Section 3 of the Prevention of Cruelty to Animals Act, 1960, it is the duty of every person having care or charge of any animal to take all reasonable measures to ensure the well being of such animal and to prevent infliction of unnecessary pain and sufferings. Section 11(1) (h) of Prevention of Cruelty to Animals Act, 1960 provides that it is a cruelty, if any person, being the owner of (any animal) fails to provide such animal with sufficient food, drink or shelter and as per the Section 11 (1)(i) it is a Cruelty, if any person, without reasonable cause, abandons any animal in circumstances which tender it likely that it will suffer pain by reason or starvation, thirst and it is also a punishable offense under PCA Act, 1960. The Provisions of the Prevention of Cruelty to Animals Act, 1960 and Rules framed there under need to be implemented by the State Governments.

However, the Animal Welfare Board has issued advisory on stray animals to all the State Governments/ Union Territories vide letter dated 12th July, 2018. The Gaushalas are established to take care of stray animals (s). The Animal Welfare Board encourages such organizations by providing grant-in-aid for taking care of the animals with the budget provided by the Government of India. Apart from the aforementioned actions, many state governments is also taking various actions for rehabilitating stray cattle.

This information was given in a written reply by the Minister of State for Fisheries, Animal Husbandry and Dairying, Shri Sanjeev Balyan in Lok Sabha today. crackIAS.com**** APS/AS

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 ADOPTION OF METHODS OF IRRIGATION Relevant for: Indian Economy | Topic: Different types of Irrigation & Irrigation systems storage

Ministry of Agriculture & Farmers Welfare Adoption of Methods of Irrigation

Posted On: 16 JUL 2019 6:07PM by PIB Delhi

The net sown area in the country is 140130 thousand ha and net irrigated area is 68385 thousand ha. As per available information, the area covered under drip irrigation is 4374.53 thousand ha.

An Impact evaluation study of Micro Irrigation scheme was carried out by Department of Agriculture Cooperation & Farmers Welfare in 2014 through M/s Global Agri System Ltd. The major findings of the study are as under:

● Irrigation cost is reduced by 20% to 50% with average of 32.3%. ● Electricity consumption is reduced by about 31%. ● Saving of fertilizers in the range of 7% to 42%. ● Average productivity of fruits and vegetables increased by about 42.3% and 52.8%. ● Overall income enhancement of farmers in the range of 20% to 68% with an average of 48.5%. Water use efficiency of Micro Irrigation including drip irrigation is as high as 80 to 95% in comparison to only 30-50% in conventional flood irrigation resulting in considerable amount of saving irrigation water under drip irrigation as also evident from the research studies conducted on different crops by centres of All India Coordinated Research Project on Irrigation Water Management in different agro-ecological regions of India.

Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW) is implementing Per Drop More Crop component of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY-PDMC) which focuses on enhancing water use efficiency at farm level through Micro Irrigation technologies viz. Drip and Sprinkler Irrigation systems.

Besides, the Department creates awareness about Micro Irrigation by wide publicity through press & print media, publication of leaflets/booklets, organization of workshops, exhibitions, farmer fairs, information on State/Government of India web portals etc. In addition, Indian Council of Agricultural Research (ICAR) imparts training and organizes field demonstrations through Krishi Vigyan Kendras (KVK) to educate farmers for promotion of Micro Irrigation.crackIAS.com This information was given in a written reply by the Union Minister of Agriculture and Farmers Welfare Shri Narendra Singh Tomar in Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-17 LAUNCHING THE BROADBAND READINESS INDEX FOR INDIAN STATES AND UNION TERRITORIES (2019- 2022) Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Demographic Economics & Various Indexes

Ministry of Communications Launching the Broadband Readiness Index for Indian States and Union Territories (2019-2022)

Posted On: 16 JUL 2019 4:31PM by PIB Delhi

The Department of Telecom (DoT) and the Indian Council for Research on International Economic Relations (ICRIER) signed a Memorandum of Understanding (MoU) to develop a Broadband Readiness Index (BRI) for Indian States and Union Territories (UT). The first estimate will be made in 2019 and subsequently every year until 2022.Shri. Sanjay Shamrao Dhotre, Union Minister of State for Human Resource Development, Communications and Electronics & Information Technology, Ms. Aruna Sundararajan, Chairman Digital Communications Commission& Secretary, DoT,Shri. Amit Yadav, Joint Secretary, DoT, Dr. Rajat Kathuria, Director and Chief Executive, ICRIER and Ms. Geetha Nair, Secretary, ICRIER were present at the signing ceremony.

The National Digital Communication Policy (NDCP) 2018 acknowledged the need for building a robust digital communications infrastructure leveraging existing assets of the broadcasting and power sectors including collaborative models involving state, local bodies and the private sector. Accordingly, the policy recommended that a BRI for States and UTs be developed to attract investments and address Right of Way(RoW) challenges across India.

This index will appraise the condition of the underlying digital infrastructure and related factors at the State/UT level. Such an exercise will provide useful insights into strategic choices made by States for investment allocations in ICT programmes. In the spirit of competitive federalism, the index will encourage states to cross learn and jointly participate in achieving the overall objective of digital inclusion and developmentcrackIAS.com in India. The framework will not only evaluate a state’s relative development but will also allow for better understanding of a state’s strengths and weaknesses that can feed into evidence-based policy making. The methodology developed as a part of this research will be adapted and used on an annual basis for systematic evaluation of state-performance on metrics set out as the goals for 2022 under the new policy. As a result, ranking and understanding State/UT performance over time will be an important part of the exercise.

The BRI consists of two parts. Part I will focus on infrastructure development based on the measurement of nine parameters. These are provided in the Table below. Part II consists of demand side parameters which will be captured through primary surveys. It will include indicators such as percentage of households using computers/ laptops with internet connection, percentage of households with fixed broadband connection, internet users as a percentage of the population, smart phones density, percentage of households with at least one digitally literate member, etc. Theprimary survey will be conducted annually until 2022.

S.No Proposed BRI Indicators Availability of State Policy on RoW and Towers (based on DoT RoW 1 Rules 2016 Percentage of ROW cases given permission within 60 days of the first 2 application Availability of a centralized IT Portal for ROW clearances across all 3 Government land and building owning authorities. 4 Adoption of the National Building Code 2016 by the State State policy to have enabling provisions for access togovernment lands (i) and buildings for installation of telecom towers (ii) State policy to have enabling provision for 24* 7 telecom operations Standardized RFP template for smart city implementation – enabling rules (iii) promoting non exclusivity and infrastructure sharing in a non- discriminatory manner Common duct policy based on the Central Government’s “Dig Once (iv) Policy” 5 Percentage of mobile towers connected with fibre 6 Number. of fibre kms per sq. KM/ per capita/ per 100 households Percentage of public institutions / offices connected by FTTX (Hospitals 7 including PHCs, Police stations, Schools and CSCs) Percentage of towers receiving grid supply (Duration: Urban 20 hours; 8 Rural 12 Hours) (i) crackIAS.comPriority electricity connection available to telecom towers in the state (ii) Supply of electricity at affordable/ industrial rates to telecom towers NagarNet –Number of Public Wi-Fi Hotspots in urban areas 9 JanWiFi – Number of Public Wi-Fi Hotspots in rural areas

The development of BRIwill be a collaborative exercise with stakeholders including State governments and industry associations like the Tower and Infrastructure Providers Association (TAIPA), the Internet Service Providers Association of India (ISPAI) and the Cellular Operators Association of India (COAI). This will be a first of its kind exercise that will comprehensively measure the development of telecom infrastructure at the sub national level.

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Read this release in: Hindi

crackIAS.com Source : www.prsindia.org Date : 2019-07-17 PRSINDIA Relevant for: Indian Economy | Topic: Infrastructure: Airports

Introduced Rajya Sabha Jul 12, 2019 Gray

crackIAS.com Source : www.thehindu.com Date : 2019-07-18 CABINET OKAYS AMENDMENTS TO BANKRUPTCY CODE Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

The Union Cabinet on Wednesday approved amendments to the Insolvency and Bankruptcy Code, placing a greater emphasis on more time-bound resolution and laying down voting rules of the financial creditors.

“The Union Cabinet today approved the proposal to carry out seven amendments to the Insolvency and Bankruptcy Code 2016 through the Insolvency and Bankruptcy Code (Amendment) Bill, 2019,” the government said in a release.

Among the amendments approved is the one that mandates a deadline for the completion of the resolution process within 330 days, including all litigation and judicial processes. “Votes of all financial creditors covered under Section 21(6A) shall be cast in accordance with the decision approved by the highest voting share [more than 50%] of financial creditors on present and voting basis,” the release added.

Minimum liquidation

Another amendment allows for creditors who voted against the majority to receive a minimum liquidation value. This decision would have retrospective effect in cases where the resolution plan has not yet been finalised or has been appealed against. The Amendment Bill also states that the resolution plan will be binding on all the stakeholders, including governments, to whom a debt is owed.

“Welcome amendments to the IBC, specifically the clarity around process timelines, and the clarity around the binding nature of the proposed resolution vis-a-vis the central, state and local governments,” Sanjeev Krishan, Partner & Leader – PE & Deals, PwC India said.

“Allowing all possible corporate actions as part of the proposed resolution plans can also help save time and effort for applicants.”

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crackIAS.com Source : www.indianexpress.com Date : 2019-07-18 COST OF BORROWING Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

After dropping below 6.3 per cent in the opening hours of trading on Wednesday, the 10-year government bond yield closed the day at 6.35, falling to levels last seen in the aftermath of demonetisation. Since the Union budget was presented on July 5, G-Sec yields have fallen by more than 30 bps.

This faster than expected decline in yields can be attributed to several factors. First, by sticking to the path of fiscal consolidation, despite doubts over its revenue projections, the government seems to have assuaged the concerns of the bond market.

Second, despite the associated risks, the proposal to meet part of the Centre’s borrowings through international markets, which would reduce the supply of government paper in the domestic market, has had a salutary effect.

Third, with growth faltering, the case for greater monetary stimulus, especially with the monetary policy committee shifting its stance to accomodative, strengthens. A rate cut in August looks certain.

Fourth, there has been a significant easing of liquidity conditions in recent months. Fifth, globally, central banks are increasingly adopting a dovish tone, making Indian G-Secs an attractive investment. But, notwithstanding the decline in government bond yields, the fundamental question of transmission remains. Will the fall in G-Sec yields lead to a commensurate fall in the cost of funds across the broader economy? And will this help stimulate investment and consumption?

The trends over the past few months indicate that transmission of lower rates has been faster in the corporate bond market than in bank lending rates. Corporate bond yields fell by 34 bps between April and June according to CARE ratings. There is scope for further decline.

With the term premium falling, there is likely to be a gradual fall in credit risk in the coming quarters, as the risk perception of some segments, particularly that of NBFCs, reduces once the recent policy initiatives kick in. This would lower the spread between corporate bonds and G- Secs enticing corporates to raise more funds through the bond markets. Corporate bond issuances have in fact risen of late, averaging Rs 41,044 crore in May and June, up 67 per cent from April.crackIAS.com In the case of banks, the transmission of lower interest rates has been to a lesser extent, as banks’ cost of funds continues to remain high. It is only when the cost of funds (deposits) comes down that banks will lower lending rates. To ensure greater transmission, in addition to greater clarity from the RBI on its liquidity management framework, the government would do well to closely align interest rates on small savings with G-Sec yields.

Though it has recently cut the interest rate for small savings by 10 bps, a closer alignment in the coming quarters could lead to a gradual fall in bank deposit rates, translating to lower lending rates to the broader economy. Download the Indian Express apps for iPhone, iPad or Android

crackIAS.com Source : www.indianexpress.com Date : 2019-07-18 TESTING THE WATERS: MENTION OF BLUE ECONOMY IN BUDGET MUST SERVE AS AN IMPETUS FOR THE SECTOR Relevant for: Indian Economy | Topic: Infrastructure: Ports & Waterways

The writer is chairman, National Shipping Board

Experts dissecting Budget 2019 have been remiss in not discussing the inclusion of an agenda to develop the Blue Economy. The development of the Blue Economy can play a critical role in nation building by enhancing the GDP, not just by exploitation of under-water resources but by developing it as a platform for infrastructure expansion into the ocean, especially when there is a shortage of space on land.

The idea is to expand port activities on the sea rather than on land.

Inclusion of the Blue Economy in the budget encourages me to talk of the possible re-calibration of its growth potential, first, by improving the measurement of its contribution to the economy and then through strategic policy interventions to enhance its contribution to manufacturing and services.

Using the SMART (Specific, Measurable, Achievable, Realistic, Time-tested) formula, we can set a time-bound action plan.

As noted in SMART, any good strategy must have elements which can be monitored. And to do this, they must be measurable. A strategy to develop blue manufacturing and blue services will have to focus on several sub-sectors. I suggest that for effective policy intervention, the entire spectrum of the Blue Economy will require a deep analysis of the underlying constituents of these sub-sectors. As a beginning, the strategy should spell out a well-accepted and tested methodology for such a statistical analysis.

A dedicated national-level institution, skilled in such state-of-the-art analytical approaches, will have to be given this responsibility. Based on this analysis, and a study of the trends of the underlying constituents of these subsectors in the GDP, a graded policy intervention will be the first part of implementation.

The sub-sectors where measurement is possible are: Blue trade in both goods and services, includingcrackIAS.com the development of marine services (such as port services, ship repair, maritime finance and insurance, marine ICT and digitisation); blue investment (port and transloading in mid-seas, coastal-to-hinterland connectivity); blue SMEs — a sub-category of the SMEs as defined by the Ministry of Small and Medium Enterprises (MSME) and administered by a separate division in the MSME and blue manufacturing (development of dedicated industrial parks, as is being envisaged under the Sagarmala, protection risks of coastal natural calamities, etc.)

While the arithmetic of sectoral analysis is important for identifying the areas requiring graded intervention, an effective strategy to increase the value addition will need policy interventions in the areas of upscaling the available technology for manufacturing and delivery of blue services. These will be further underpinned by training and reskilling of the available manpower, for which a coordinated plan (across the organs of states and central governments) will be needed.

No strategy can be implemented without efforts to enhance resource availability, both from the public and the private sectors. The strategy must make sure that there is no overlap and that the balance of resources is maintained. A path-breaking relook at the regulations to ease the flow of private investment will be needed. Some time-tested paradigms of PPPs (Public Private Partnerships) will be ideal. The strategy must realise the context of the federal structure within which it will have to operate. Therefore, a mechanism to coordinate the efforts of the coastal districts/municipalities/panchayats, coastal state governments, and the Union government will need to be established. Akin to the Tribal Sub-Plan in the budget exercise, a dedicated chapter on the Blue Economy in the state and Union budgets could be a beginning.

A reasonable time-frame and an institutional coordination machinery will make the plan realistic and achievable. A national coordination mechanism for monitoring is absolutely necessary for any strategy in a federal structure, such as ours. Commitment to the development of the Blue Economy has been expressed by a mention in the budget speech. This has laid the foundation and will provide the initial traction to create the space for implementation of the strategy.

This article first appeared in today’s paper under the headline: “Testing the waters”. The writer is former secretary, Ministry of Shipping and Ministry of Mines, former chairman of the National Shipping Board and former chairman of Inland Waterways Authority of India.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-18 AGRI EXPORT ZONES Relevant for: Indian Economy | Topic: Transport & Marketing of agricultural produce

Ministry of Commerce & Industry Agri Export Zones

Posted On: 17 JUL 2019 5:29PM by PIB Delhi

The Government had notified 60 Agri Export Zones in 20 States till 2004-05. All the Agri Export Zones have since completed their intended span of 5 years. As such, as of now, there are no functional Agri Export Zones in the country.

Promotion of agricultural exports is a continuous process. To promote the agricultural exports, the Government has introduced a comprehensive Agriculture Export Policy with the following vision:

Harness export potential of Indian agriculture, through suitable policy instruments, to make India a global power in agriculture, and raise farmers’ income.

The Department of Commerce also has several schemes to promote exports, including exports of agricultural products, viz. Trade Infrastructure for Export Scheme (TIES), Market Access Initiatives (MAI) Scheme and Merchandise Exports from India Scheme (MEIS). In addition, assistance to the exporters of agricultural products is also available under the Export Promotion Schemes of Agricultural & Processed Food Products Export Development Authority (APEDA), Marine Products Export Development Authority (MPEDA), Tobacco Board, Tea Board, Coffee Board, Rubber Board and Spices Board.

The product-wise details of agricultural exports from the country, during the last three years, are at Annexure-I. State-wise data for exports is not published by the DirectoratecrackIAS.com General of Commercial Intelligence & Statistics (DGCI&S). Annexure-I

EXPORT OF AGRICULTURAL PRODUCTS

Quantity: in thousand units; Value: USD Million

2016-17 2017-18 2018-19 Description UNIT Quantity Value Quantity Value Quantity Value 11,85,27 14,32,45 14,36,680. Marine Products KGS 5,903.06 7,389.22 6,802.24 2.87 6.67 63 Rice -Basmati TON 3,985.21 3,208.60 4,056.85 4,169.56 4,414.61 4,712.44 Buffalo Meat TON 1,323.58 3,903.49 1,350.25 4,037.11 1,233.38 3,587.15 10,14,45 10,96,32 10,91,789. Spices KGS 2,851.95 3,115.37 3,322.56 3.31 2.85 68 Rice(Other Than TON 6,770.83 2,525.19 8,818.53 3,636.60 7,599.75 3,040.22 Basmati) Cotton Raw Incld. TON 996.09 1,621.11 1,101.47 1,894.25 1,143.07 2,104.41 Waste Oil Meals TON 2,632.26 805.45 3,570.78 1,093.16 4,486.14 1,511.52 Sugar TON 2,544.01 1,290.71 1,757.93 810.9 3,987.96 1,359.75 5,99,195. 6,97,092. 6,19,376.5 Castor Oil KGS 674.73 1,043.99 883.78 56 50 7 2,43,429. 2,72,894. 2,70,300.1 Tea KGS 731.26 837.36 830.9 62 98 2 2,88,613. 3,17,828. 2,82,889.0 Coffee KGS 842.84 968.57 822.34 37 97 2 Fresh Vegetables TON 3,404.07 863.12 2,448.02 821.76 2,933.37 810.44 Fresh Fruits TON 817.06 743.23 714 761.79 754.75 794.04 Guargam Meal TON 419.95 463.35 494.13 646.94 513.22 674.88 Misc Processed 455.59 550.55 - 658.35 Items - - Cashew TON 91.79 786.93 90.06 922.41 78.22 654.43 Processed Fruits 5,33,152. 5,73,281. 5,92,174.5 KGS 584.79 646.92 639.65 And Juices 10 42 8 Tobacco 2,04,447. 1,85,363. 1,89,538.7 KGS 634.38 593.88 570.28 UnmanufacturedcrackIAS.com42 88 0 Cereal Preparations TON 339.95 531.7 353.35 552.61 347.77 551.74 3,07,328. 3,36,850. 3,11,987.3 Sesame Seeds KGS 402.17 463.9 538.94 55 37 4 90,352.3 1,02,262. 1,80,698.3 Dairy Products KGS 253.73 303.05 481.55 1 55 8 Groundnut TON 725.71 809.6 504.04 524.82 489.19 472.74 Tobacco 324.31 340.37 - 410.96 Manufactured - - Other Cereals TON 734.77 212.3 864.24 248.59 1,277.00 349.06 2,32,179. 2,41,013. 2,31,601.9 Alcoholic Beverages LTR 298.9 326.67 300.91 33 37 3 Processed 1,92,855. 2,12,203. 2,28,872.6 KGS 263.57 282.87 293.95 Vegetables 77 36 4 Pulses TON 136.72 191.05 179.6 227.75 285.83 259.34 25,649.5 29,579.5 Cocoa Products KGS 162.18 177.47 27,603.73 192.69 0 3 2,55,803. 2,70,396. 3,07,367.5 Milled Products KGS 121.37 136.01 151.46 65 97 0 Other Oil Seeds TON 193.27 126 295.1 174.79 213.83 131.57 Fruits / Vegetable 11,288.6 14,465.7 KGS 78.16 104.04 17,419.48 124.92 Seeds 2 7 Sheep/Goat Meat TON 22.01 129.69 22.8 130.9 21.67 124.65 Vegetable Oils TON 60.47 116.29 37.06 87.83 49.95 106.79

Poultry Products 79.11 85.7 - 98.17 - - Molasses TON 390.67 47.06 123.97 15.06 841.16 83.76 22,020.3 20,703.5 Floricltr Products KGS 81.55 78.73 19,726.56 81.78 3 1 12,424.6 Animal Casings KGS 173.24 2.06 50.68 14,882.83 68.27 6 Wheat TON 265.61 66.85 322.79 96.72 226.23 60.31 Shellac KGS 6,065.00 33.6 6,530.85 44.22 6,996.04 43.7 14,070.4 Niger Seeds KGS 17.46 9,215.04 10.84 13,370.58 13.64 6 Natural Rubber TON 24.46 37.65 7.7 13.89 6.66 11.02 Cashew Nut Shell 11,404.7 KGS 6.56 8,325.16 5.06 5,300.66 3.87 Liquid 6 Processed Meat TON 0.14 0.69 0.27 1.54 0.41 2 OthercrackIAS.com Meat TON 0.01 0.03 0.45 1.09 0.85 1.96 33,283.4 38,425.5 TOTAL 38,739.10 1 2

Source: DGCI&S

This information was given by the Minister of State in the Ministry of Commerce and Industry,Hardeep Singh Puriin a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-18 TIME TAKEN FOR SECURITY CLEARANCE TO FDI PROPOSALS HALVED IN LAST 5 YEARS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Foreign Capital, Foreign Trade & BOP

Ministry of Home Affairs Time taken for Security Clearance to FDI Proposals Halved in Last 5 Years

Posted On: 17 JUL 2019 5:42PM by PIB Delhi

Ministry of Home Affairs makes every endeavour to accord security clearance to cases of foreign direct investment (FDI) expeditiously. The average time taken for clearance of such proposals has reduced significantly from about four months in 2014 to about two months in 2019. Only seven cases of FDI are presently under the consideration of Ministry of Home Affairs and no case is pending beyond prescribed time limit.

This was stated by the Minister of State for Home Affairs, Shri G. Kishan Reddy in a written reply to question in the Rajya Sabha today.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.pib.nic.in Date : 2019-07-18 SELECTED AREAS FOR SEZS Relevant for: Indian Economy | Topic: Investment Models: PPP, SEZ, EPZ and others

Ministry of Commerce & Industry Selected areas for SEZs

Posted On: 17 JUL 2019 5:40PM by PIB Delhi

There were 7 Central Government Special Economic Zones (SEZs) and 12 State/Private Sector SEZs prior to the enactment of the SEZ Act, 2005. In addition, 416 proposals for setting up of SEZs in the country have been accorded formal approval under the SEZ Act, 2005. Presently, 351 SEZs are notified, out of which 232 SEZs are operational. States/Union Territories-wise details of SEZs is at Annexure-I.

SEZs being set up under the SEZ Act, 2005 and SEZ Rule, 2006 are primarily private investment driven. As per the Special Economic Zones Act, 2005, a Special Economic Zone (SEZ) may be established either jointly or severally by the Central Government, State Governments or any person for manufacture of goods or rendering services or for both or as a Free Trade and Warehousing Zone. Proposals for setting up of SEZs are considered by the Board of Approval only after written consent of the concerned State Government. No proposal for establishment of Special Economic Zone (SEZ) in Bihar is pending with the Department of Commerce at present.

As per Section 30 of the SEZ Act, 2005, any goods removed from a SEZ to the Domestic Tariff Area shall be chargeable to duties of customs including anti-dumping, countervailing and safeguard duties under the Customs Tariff Act, 1975, where applicable, as leviable on such goods when imported. The revenue received by the Government from developed SEZ during the last five years, year-wise is as below:

Year-wisecrackIAS.com revenue from duty for the Domestic Tariff Area Sale Transactions Year Duty Amount Paid (Rs. Crores) 2014-15 3,035 2015-16 4,183 2016-17 5,528 2017-18 18,095 2018-19 26,810

Annexure-1

States/Union Territories-wise distribution of approved SEZs State Total Central Government Formal Operational Government / Private Approvals Notified SEZs SEZs set up Sector SEZs granted SEZs under (Including States/UTs prior to the set up prior under the the SEZ Act, prior to enactment to the SEZs Act, 2005 SEZs Act + of SEZs Act, enactment 2005 under the 2005 of SEZs Act, SEZs Act) 2005 Andhra 1 0 32 27 19 Pradesh Chandigarh 0 0 2 2 2 Chhattisgar 0 0 2 1 1 h Delhi 0 0 2 0 0 Goa 0 0 7 3 0 Gujarat 1 2 28 24 20 Haryana 0 0 24 21 6 Jharkhand 0 0 1 1 0 Karnataka 0 0 62 51 31 Kerala 1 0 29 25 19 Madhya 0 1 10 5 5 Pradesh MaharashtracrackIAS.com1 0 49 43 30 Manipur 0 0 1 1 0 Nagaland 0 0 2 2 0 Odisha 0 0 7 5 5 Puducherry 0 0 1 0 0 Punjab 0 0 5 3 3 Rajasthan 0 2 5 4 3 Tamil Nadu 1 4 53 50 40 Telangana 0 0 63 57 29 Uttar 1 1 24 21 12 Pradesh West 1 2 7 5 7 Bengal GRAND 7 12 416 351 232 TOTAL

This information was given by the Minister of State in the Ministry of Commerce and Industry,Hardeep Singh Puriin a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-18 EXPORT PROMOTION SCHEME Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Foreign Capital, Foreign Trade & BOP

Ministry of Commerce & Industry Export Promotion Scheme

Posted On: 17 JUL 2019 5:36PM by PIB Delhi

The Government of India has launched a scheme namely, Trade Infrastructure for Export Scheme (TIES) from FY 2017-18 with the objective to assist Central and State Government Agencies for creation of appropriate infrastructure for growth of exports from the States. The Scheme provides financial assistance in the form of grant-in-aid to Central/State Government owned agencies for setting up or for up-gradation of export infrastructure as per the guidelines of the Scheme. The scheme can be availed by the States through their Implementing Agencies, for infrastructure projects with overwhelming export linkages like the Border Haats, Land customs stations, quality testing and certification labs, cold chains, trade promotion centres, dry ports, export warehousing and packaging, SEZs and ports/airports cargo terminuses. The Scheme guidelines are available at http://commerce.gov.in.

Under the TIES Scheme, a total of 28 export infrastructure projects have been provided financial assistance during FY 2017-18, 2018-19 and 2019-20 (as on 1st July, 2019). The state-wise and Year-wise details of projects, located in various States/UTs, is given at Annexure-I.

The Government of India strives to ensure a continuous dialogue with the State Governments and Union Territories on measures for promoting exports and for providing an international trade enabling environment in the States, and to create a framework for making the States active partners in boosting exports from India.

Under the Foreign Trade Policy (FTP), DGFT operates various Export promotion schemescrackIAS.com such as Advance Authorization, Duty Free Import Authorization, Export Promotion of Capital Goods, Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS). To give effect to these schemes, Central Board of Indirect Taxes and Customs has issued various exemption notifications. The details of various exemptions provided for these schemes are given in the FTP.

MEIS was introduced in the FTP from 01.04.2015, providing rewards for exporters of specified goods. The objective of the MEIS is to offset infrastructural inefficiencies and associated costs involved in exporting goods/products which are produced/manufactured in India. The scheme incentivizes exporters in terms of Duty Credit Scrips at the rate of 2, 3, 4, 5, 7 % of FOB Value of exports realized. These scrips are transferable and can be used to pay certain Central Duties/taxes including Customs Duties.

As regards promotion of trade in services, Government of India provides fiscal benefits through Services Exports from India Scheme (SEIS) for some identified sectors. Government of India is following a multi-pronged strategy, including negotiating meaningful market access through multilateral, regional and bilateral trade agreements, trade promotion through participation in international fairs/exhibitions and focused strategies for specific markets and sectors to promote Trade in Services. An ‘Action Plan for Champion Sectors in Services’ has also been approved in February, 2018 to give focused attention to 12 Champion Services Sector like Information Technology / Information Technology Enabled Services, Tourism and Hospitality Services and Medical value Travel.

The Agriculture Export Policy was launched in 2018 to harness export potential of Indian agriculture, through suitable policy instruments, to make India global power in agriculture and raise farmers’ income. This comprehensive “Agriculture Export Policy” aims to increase agricultural exports by integrating Indian farmers and agricultural products with the global value chains.

Section 10AA of the Income-tax Act, 1961 provides for deduction of profits and gains derived from the export of articles or things or from services in respect of newly established Units in Special Economic Zones. Such deduction is allowed to an entrepreneur as referred to in clause (j) of section 2 of the Special Economic Zones Act, 2005, from his Unit, who begins to manufacture or produce articles or things or provide any services during the previous year relevant to any assessment year commencing on or after the 1st day of April, 2006, but before the first day of April, 2021. The deduction is allowed as under: crackIAS.com hundred per cent of profits and gains derived from the export, of such articles or things or from services for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which the Unit begins to manufacture or produce such articles or things or provide services, as the case may be, and fifty per cent of such profits and gains for further five assessment years and thereafter.

For the next five consecutive assessment years, so much of the amount not exceeding fifty per cent of the profit as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account (to be called the "Special Economic Zone Re-Investment Reserve Account") to be created and utilized for the purposes of the business of the assesse in the manner laid down.

Annexure-I

Details of projects approved under TIES [FY 17-18 to FY 19-20 (till 01.07.2019)] Number of TIES fund Name of new S.No. Year released State/UT projects (in Rs.Cr.) approved 2017-18 3 5.85 2018-19 0 2.85* 1 Karnataka 2019-20 0 0 Total 3 8.7 2017-18 1 6.5 2018-19 0 6.5* 2 Kerala 2019-20 0 0 Total 1 13 2017-18 1 6 2018-19 1 5.83 3 Manipur 2019-20 0 0 Total 2 11.83 2017-18 2 8.15 Andhra 2018-19 0 26.01* 4 Pradesh 2019-20 0 1.99* Total 2 36.15 crackIAS.com2017-18 2 14.78 2018-19 4 15.65 5 Tamil Nadu 2019-20 3 6.56 Total 9 36.99 2017-18 2 25.71 Madhya 2018-19 0 0 6 Pradesh 2019-20 0 0 Total 2 25.71 2017-18 1 1.07 Uttar2018-19 0 0 7 Pradesh 2019-20 0 0 Total 1 1.07 2017-18 1 1.52 Maharashtr 2018-19 0 0 8 a 2019-20 0 0 Total 1 1.52 2017-18 1 6.15 2018-19 0 0 9 Tripura 2019-20 0 0 Total 1 6.15 2017-18 1 4.27 West2018-19 0 2.56* 10 Bengal 2019-20 0 0 Total 1 6.83 2017-18 0 0 2018-19 1 8 11 Delhi 2019-20 0 0 Total 1 8 2017-18 0 0 2018-19 2 3.06 12 Rajasthan 2019-20 0 0 Total 2 3.06 2017-18 0 0 2018-19 1 2.81 13 Chandigarh 2019-20 0 0 crackIAS.comTotal 1 2.81 2017-18 0 0 2018-19 0 0 14 Assam 2019-20 1 3.95** Total 1 3.95** GRAND 28 165.77 TOTAL * Includes disbursement of subsequent installments for a previously sanctioned project **Funds yet to be disbursed

This information was given by the Minister of State in the Ministry of Commerce and Industry, Hardeep Singh Puriin a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-18 NUCLEAR PLANTS EXPANSION PROGRAMME Relevant for: Indian Economy | Topic: Infrastructure: Energy incl. Renewable & Non-renewable

Department of Atomic Energy Nuclear Plants Expansion Programme

Posted On: 17 JUL 2019 3:48PM by PIB Delhi

Finance Minister’s budget speech in Lok Sabha on 29.02.2016 for 2016-17 budget included the following reference to nuclear energy:

“In the power sector, we need to diversify the sources of power generation for long term stability. Government is drawing up a comprehensive plan, spanning next 15 to 20 years, to augment the investment in nuclear power generation. Budgetary allocation up to 3,000 crore per annum, together with public sector investments, will be leveraged to facilitate the required investment for this purpose.”

The Government has already accorded administrative approval and financial sanction for setting up four units of 700 MW each at Gorakhpur in Haryana and the first two units - GHAVP 1&2 (2X700 MW) are under construction.

The process of identification of suitable sites for locating future nuclear power plants is an ongoing activity, carried out by the Standing Site Selection Committee (SSSC) of the Department of Atomic Energy.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-18 ROAD AND RAIL CONNECTIVITY IN NORTH EASTERN REGION Relevant for: Indian Economy | Topic: Infrastructure: Railways

Ministry of Development of North-East Region Road and rail connectivity in North Eastern Region

Posted On: 17 JUL 2019 1:43PM by PIB Delhi

The road and rail connectivity of main land to the States in the North Eastern Region is through the Siliguri Corridor.

In the last four years under the schemes of M/o DoNER, road projects worth Rs.821.56 crore were sanctioned and under schemes of North Eastern Council (NEC) Rs.1293.65 crore was released for development of infrastructure like roads and bridges, ISBT, airports, railway in North Eastern Region. Under the SARDP-NE including Arunachal Package of Roads and Highways, 1262 km of road length worth Rs.17,065 crore has been completed in the last four years in the North East Region (NER). Under Bharatmala Pariyojana (BMP) roads stretches aggregating to about 5301 km in NER have been approved for improvement. Out of this, 3246 km road length has been approved for development of Economic Corridors in the North East. Under Pradhan Mantri Gram Sadak Yojana, road length of 20,708 km has been constructed at a cost of Rs.9033.76 crore, thereby connecting 3123 habitations in North Eastern Region.

In respect of Rail Connectivity, during the last four years the entire North East Region has been converted to the Broad Gauge (BG) network. The State wise details are given below:

State wise details of conversion from MG to BG rail line in the last three years

Name of State Rail Link Arunachal Pradesh Balipara–Bhalukpong Assam Rangiya-Murkongselek Assam Lumding-Silchar Tripura Kumaraghat-Agartala crackIAS.comManipur Arunachal-Jiribam Mizoram Kathakal–Bhairabi

In respect of Air Connectivity, modernization and development of Airports have been taken up. This includes construction of a new integrated terminal building at Guwahati, Imphal and Agartala Airports; Extension of Runway at Dibrugarh Airport; Strengthening of Runway, Taxiway at Dimapur Airport; and upgradation works at Tezu Airport. The Greenfield Airport at Pakyong has been completed and is now operational. A new Greenfield Airport at Holongi (Itanagar) has also been taken up for improving connectivity in the North East region. Moreover, Regional Connectivity Scheme (RCS-UDAN) has been launched to provide connectivity to unserved and underserved Airports within the country and to promote regional connectivity by making the airfare affordable through Viability Gap Funding (VGF). The North East has been kept as a priority area under RCS-UDAN.

The Ministry of Tourism has identified several segments like Eco-Tourism, Rural Tourism, Medical Tourism, Wellness Tourism, Adventure Tourism, Cruise Tourism, Sustainable Tourism, Agri-Tourism, Promotion of Cuisines as having huge potential for the North East Region. The Swadesh Darshan Scheme of Ministry of Tourism is aimed at developing theme based tourist circuits in the Country, including the North East Region. Under this scheme, projects worth Rs.1315.06 crore have been sanctioned for the North East Region in the last four years and Rs.783.40 crore has been released for the same. The Ministry of Tourism also organizes the ‘International Tourism Mart’ in the North East States for promotion of the North East Region.

As per the information available, major projects taken up in the North-East Region inter alia include Promotion of MSMEs in North Eastern Region and Sikkim, Comprehensive Telecom Development Project (CTDP) for the North-Eastern Region, Comprehensive Scheme for strengthening of Transmission and Distribution Systems (CSST&DS), North Eastern Region Power System Improvement Project (NERPSIP), National Sports University at Imphal, Agartala- Akhaura Rail-Link to connect the existing Agartala station in Tripura to Akhaura Station of Bangladesh Railways, development of Brahmaputra and 19 new waterways including Barak.

In addition to above M/o Housing and Urban Affairs facilitates and assists 8 North Eastern States for schemes like Swachh Bharat Mission – Urban (SBM–U), Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Smart Cities Mission (SCM), Pradhan Mantri Awas Yojana (Urban) (PMAY-U) and North Eastern Region Urban Development Programme (NERDUP) and 10% Lumpsum Scheme to improve the quality of life in cities and towns covered under these Missions/Schemes.

In addition to above, Ministry of Development of North Eastern Region has also taken up projects for filling gaps in infrastructure through its schemes such as NLCPR-State, North East Road Sector Development Scheme (NERSDS), Schemes of North Eastern Council (NEC) and North East Special Infrastructure Development Scheme (NESIDS).

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crackIAS.com Source : www.thehindu.com Date : 2019-07-19 CMS’ PANEL MULLS MOVE TO TIE STATE FARM REFORMS TO FUNDS Relevant for: Indian Economy | Topic: Agriculture Issues and related constraints

With a view to usher in sweeping reforms to boost agricultural growth, a panel of Chief Ministers discussed ways to bring State Governments on board including the possibility of linking the adoption of reforms to the Finance Commission’s grants and allocations.

Some of the reforms discussed by the panel, which held its first meeting at the NITI Aayog on Thursday, included the potential scrapping of the Essential Commodities Act (ECA) for the food sector and a review of agricultural subsidies, said Maharashtra Chief Minister Devendra Fadnavis who chaired the meeting. The dismantling of market monopolies, and steps to increase private investment and investment credit in the sector were also mulled, Mr. Fadnavis told reporters on the sidelines of the meeting.

‘State subject’

“Agriculture is a State subject and all the States must be brought on board,” he said, emphasising the importance of simultaneous and time-bound reforms across States to bring effective transformation countrywide. “Central government grants and the Finance Commission allocations should be linked with the agriculture reforms implemented by States,” he opined.

The panel has finalised its terms of reference and is preparing a paper to be circulated among States. State government feedback is expected by August 7, and the panel is due to meet again in Mumbai on August 16. The meeting was attended by Union Agriculture Minister Narendra Singh Tomar and the Chief Ministers of Gujarat, Haryana and Arunachal Pradesh. The Madhya Pradesh Chief Minister participated via video conferencing, while the Uttar Pradesh Chief Minister sent his input in writing.

Mr. Fadnavis asserted that farm sector growth had lagged behind other sectors as it had not been part of the economic reforms of 1991. Almost three decades later, the Chief Ministers are attempting to build consensus around structural changes in the agriculture sector.

Bipartisan view

The Chief Ministers of both Gujarat and Madhya Pradesh — one from the BJP and the other from the Congress — spoke on the need to do away with the restrictions of the Essential Commodities Act in the food sector, according to Mr. Fadnavis. The panel also discussed ways to ensure fair prices and end manipulative monopolies in the local agriculture produce mandis, as well as the need to remove obstacles to the implementation of the digital e-NAM system in all States.crackIAS.com

Approaches to spur growth in the food processing sector, which must grow at a faster pace than the overall agriculture sector in order to increase farmers’ income, were also discussed.

The panel also considered the need for better coordination between the Agriculture and Commerce Ministries to ensure a dynamic pricing policy based on global market trends for major agricultural commodities.

With regard to subsidies, the panel discussed ways to ensure that they are targeted better in order to maximise benefits for farmers. Holding that private investments were key to the growth of the sector, the panel discussed ways to reduce credit costs and improve linkages with financial institutions.

The need for States to adopt the Centre’s Model Contract Farming Act was also stressed at the meeting.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.thehindu.com Date : 2019-07-19 INAPPROPRIATE TEMPLATE FOR A LEGITIMATE TARGET Relevant for: Indian Economy | Topic: Issues relating to Planning & Economic Reforms

Getty Images/istockphoto | Photo Credit: Creative-Touch

The recently-released Economic Survey either glosses over or ignores many acute challenges faced by the Indian economy — like the severe agrarian crisis; the troubles of loss-making and debt-ridden public sector units; and the issues plaguing public sector banks.

Economic Survey 2019 in six charts

While the Survey is not incorrect in highlighting the importance of incorporating insights from psychology into economics, it is odd that this has been done so late in the day. Many other countries like the U.K., Australia and Singapore have for long being applying such points to policy design and implementation areas and the issue has been discussed in India over the last few years as well. It is unclear what added value the report truly has to offer here.

One issue that the Survey rightly underlines is the need for India to revive private investment if it is to achieve the magical $5-trillion economy status by 2024-25. However, what is odd here is that to stress this, the document invokes the age-old comparison between India and East Asian countries. It is rather strange that the Survey brings up something that has been taught in economic development classes over the last two decades.

Here, a question that arises is: Can the East Asian model help revive India’s floundering investment rates? Some crucial reminders are worth underlining.

Read: Full text of Economic Survey 2019

The East Asian model was largely a story driven by the newly industrialised economies (NIEs) of Singapore, Hong Kong, South Korea and Taiwan, and Japan earlier.

Specifically, the prime goal in various NIEs from 1960s through to the 1990s (prior to the Asian Financial Crisis) was to raise gross savings rates. While the rise in household savings was partly due to the positive demographic dividend, a variety of other factors, including macroeconomic stability, low inflation, lack of social safety nets, inability to leverage (due to a highly regulated banking system) and forced savings (fully-funded Provident Funds) also played a role. State- owned enterprises had to operate with budget constraints. This, coupled with the fiscal discipline practised by the economies, ensured that the public sector did not crowd out private savings and, incrackIAS.com some cases, actually added to national savings. Union Budget 2019-20: Bucks for the banks

Another goal was to ensure that the private savings were actually intermediated into the formal financial system, failing which the cost of capital would remain high and the availability of capital for investment would be low. To achieve this, importance was given to the establishment of a safe and secure public sector banking system (usually in the form of postal savings networks) where deposits were guaranteed by the central bank and interest incomes was taxed lightly, if at all. The state-owned banks were tightly regulated as financial stability was the cornerstone of overall macroeconomic stability. Financial inclusion was encouraged, though the focus was on actual use of the deposit accounts rather than just their opening. While the manufacturing sector was viewed as a growth engine and open to export competition, the banking sector, in all economies apart from Hong Kong, remained tightly regulated and closed to foreign banks. Even Singapore initially adopted a dual banking structure that sheltered the domestic economy largely from significant short-term bank flows. It resorted to a calibrated policy to allow fully licensed foreign banks only in the late 1990s.

So, while these economies were generally successful in encouraging savings, the cost of capital was rather high, not unlike the problem in India today. To tackle this, the East Asian economies undertook financial repression — conventionally understood as a ceiling price keeping lending rates lower than market equilibrium.

The macro does not gel with the micro

This, in normal circumstances, would have led to disintermediation from the formal financial system, a consequent reduction in the quantity of financing and the creation of a shadow banking system. However, central banks of these economies maintained tight oversight, and selective capital controls ensured that the low-yielding savings did not leave their countries of origin, while limited financial development forestalled the possibility of people looking for savings alternatives.

Along with these, the governments undertook sophisticated industrial policies to promote domestic investment, much of which was export-led (though not necessarily free-market based). The governments understood that a vertical industrial policy (of ‘picking winners’) would not work without a sound horizontal industrial policy (dealing with labour and land reforms, bringing about basic literacy and raising women’s participation in the labour force). Besides, incentives also had clear guidelines and sunset clauses and mechanisms were in place to phase out support. Thus, winners prospered while losers were allowed to fail.

In addition, the bureaucracies of these East Asian economies had what Berkeley sociologist Peter Evans referred to as “embedded autonomy”. This allowed the state to be autonomous, yet embedded within the private sector and enabled the two to work together to develop policies or change course if the policies did not work. This made industrial policy operate as a process of self-discovery, as emphasised by Harvard economist Dani Rodrik. It is the lack of this embedded autonomy in the next-tier NIEs of Malaysia, Thailand and Indonesia that has been partly responsible for them being stuck in the ‘middle income trap’.

Thus, much of the investment and export acceleration in East Asian countries was due to heterodox policies and reforms that were carefully calibrated, well-sequenced and implemented at a time when the external environment was far less hostile than it is today. These measures allowed the nations to benefit from their demographic dividends and transform themselves into developedcrackIAS.com economies in record time. A Budget that goes nowhere

In contrast, due to political and other compulsions, India’s reforms since 1991 have been rather haphazard and of a ‘stop-and-go’ nature with perverse consequences, all of which has made it much more challenging for the country to take full advantage of its demographic dividend.

Successive governments have neither had the tool-sets and the policy space nor the embedded autonomy needed to drive the industrial transformation as in the East Asian countries.

Though measures like reducing policy uncertainty; ensuring that the fiscal expenditures do not crowd out private savings and investment; enhancing the efficiency of financial intermediation; and dealing with land acquisition and environment clearances are all essential to reignite investment, we do not need to invoke the East Asian example to understand the importance of these.

Ramkishen S. Rajan is a Professor at the Lee Kuan Yew School of Public Policy, Singapore. Sasidaran Gopalan is a Senior Research Fellow at the Nanyang Business School, Singapore

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-19 FUNDS FOR WELFARE OF WEAVERS Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

Ministry of Textiles Funds for Welfare of Weavers

Posted On: 18 JUL 2019 4:35PM by PIB Delhi

Budgetary allocation of funds is not made State-wise. However, indicative physical targets are allotted to States and funds are released to various Implementing Agencies based on viable proposals received and utilisation of previously released funds.

The Government of India, Ministry of Textiles is implementing following schemes for promotion & development of handlooms and welfare of handloom weavers across the country:

1. National Handloom Development Programme (NHDP) 2. Comprehensive Handloom Cluster Development Scheme (CHCDS) 3. Handloom Weavers’ Comprehensive Welfare Scheme (HWCWS) 4. Yarn Supply Scheme (YSS)

1. National Handloom Development Programme (NHDP)

i. Block Level Cluster: Introduced in 2015-16 as one of the components of National Handloom Development Programme (NHDP). Financial assistance upto Rs. 2.00 crore per BLC for various interventions such as skill upgradation, Hathkargha Samvardhan Sahayata, product development, construction of workshed, project managementcrackIAS.com cost, design development, setting up of common facility centre (CFC) etc. is provided. Besides, financial assistance upto Rs. 50.00 lakh is also available for setting up of one dye house at district level. The proposals are recommended by the State Government.

ii. Handloom Marketing Assistance is one of the components of National Handloom Development Programme. In order to provide marketing platform to the handloom agencies/weavers to sell their products directly to the consumers, financial assistance is provided to the States/eligible handloom agencies for organising marketing events in domestic as well as overseas markets.

iii. Weavers’ MUDRA Scheme: Under the Weavers’ Mudra Scheme, credit at concessional interest rate of 6% is provided to the handloom weavers. Margin money assistance to a maximum of Rs. 10,000 per weaver and credit guarantee for a period of 3 years is also provided. MUDRA portal has been developed in association with Punjab National Bank to cut down delay in disbursement of funds for margin money and interest subvention

iv. HATHKARGHA SAMVARDHAN SAHAYATA (HSS): Hathkargha Samvardhan Sahayata (HSS) was introduced on 1st December 2016 with an objective to provide looms/accessories to the weavers to enhance their earnings through improved productivity and quality of the handloom products. Under the scheme, 90% of the cost of loom/accessory is borne by the Government of India while remaining 10% is borne by the beneficiary. The Government of India’s share is released directly in the Bank account of the beneficiary through designated agency.

v. EDUCATION OF HANDLOOM WEAVERS AND THEIR CHILDREN: Ministry of Textiles has signed Memorandums of Understanding with Indira Gandhi National Open University (IGNOU) and National Institute of Open Schooling (NIOS) to secure educational facilities for the weavers and their families. NIOS offers Secondary and Senior Secondary level education with specialized subjects on design, marketing, business development, etc. through distance learning mode for handloom weavers, whereas IGNOU offers continuing education programs through accessible and flexible learning opportunities relevant to the aspirations of handloom weavers and their children for career progression.

Ministry of Textiles is providing reimbursement of 75% of the fee towards admission to NIOS/IGNOU courses in case of SC, ST, BPL, and Women learners belonging to handloom weavers’ families.

VI. “India Handloom” Brand- During the celebration of 7th August 2015 as National crackIAS.comHandloom Day, ‘India Handloom’ Brand was launched by Hon’ble Prime Minister for branding of high quality handloom products. It promotes production of niche handloom products with high quality, authentic traditional designs with zero defect and zero effect on environment. Since its launch, 1232 registrations have been issued under 122 product categories and sale of Rs. 689.72 crore as reported on 31-03-2019.

Initiatives with various leading brands has been undertaken to bring out a separate range of handloom garments in their brand.

VII. e-commerce- In order to promote e-marketing of handloom products, a policy frame work was designed and under which any willing e-commerce platform with good track record can participate in online marketing of handloom products. Accordingly, 23 e-commerce entities have been engaged for on-line marketing of handloom products. A total sale of Rs. 34.72 crore has been reported through the online portal as on 31-03-2019.

VIII. Urban Haats are set up in the big towns/metropolitan cities to provide adequate direct marketing facilities to the craft persons/weavers and eliminate middle agencies. 38 such Urban Haats have been sanctioned across the country so far.

2. Comprehensive Handloom Cluster Development Scheme:

The Comprehensive Handloom Cluster Development Scheme (CHCDS) is implemented for development of Mega Handloom Clusters covering atleast 15000 to 25,000 handlooms and financial assistance as GoI share from Rs. 40.00 to Rs.70.00 crore is in a period of 5 years. 8 mega handloom clusters taken up as announced in the Budgets i.e. Varanasi, Sivasagar (2008-09), Virudhunagar, Murshidabad (2009-10), Prakasam and Guntur districts and Godda and neighboring districts (2012-13), Bhagalpur &Trichy (2014-15).

Under the scheme, components like conducting Diagnostic Study, engaging Designer, Product Development, Corpus for raw material, Construction of Worksheds (for BPL/SC/ST/Women weavers), Skill up-gradation etc. are fully funded by Government of India, while the components like Technology up-gradation, lighting units funded 90% and other common infrastructural projects like Design Studio, Marketing Complex, Value Addition Centres and Publicity are funded by the Government of India to the extent of 80%.

3. Handloom Weavers’ Comprehensive Welfare Scheme

Weavers Comprehensive Welfare Scheme (HWCWS) is providing life, accidental and disability insurance coverage under the components Pradhan Mantri Jivan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Converged crackIAS.comMahatma Gandhi Bunkar Bima Yojana(MGBBY).

4. Yarn Supply Scheme:

Yarn Supply Scheme is being implemented throughout the country to make available all types of yarn at Mill Gate Price. The scheme is being implemented through National Handloom Development Corporation. Under the Scheme freight is reimbursed and depot operating charges at 2% is given to depot operating agencies. A component of 10% price subsidy also exists on hank yarn, which is applicable on cotton, domestic silk and woollen yarn with quantity caps.

The details of funds released for handloom activities to various States under National Handloom Development Programme (NHDP) and Comprehensive Handloom Cluster Development Scheme (CHCDS) during the last three years is Annexed.

Under the Handloom Weavers’ Comprehensive Welfare Scheme and Yarn Supply Scheme, the funds are released to the implementing agencies i.e. LIC of India and NHDC respectively. The above funds released to the implementing agencies as per the proposals initiated by them and utilization of the previously released funds. The details of total funds and released during the last three years is as under:

(Rs. in crore)

S. No. Name of the Scheme Total funds Funds released Handloom Weavers’ 01 63.55 53.59 Comprehensive Welfare Scheme 02 Yarn Supply Scheme 616.91 588.03 ANNEXURE (Rs. in Crore) Funds released S. No. Name of the States during 2016-17 to 2018-19 1 Andhra Pradesh 23.56 2 Bihar 5.63 3 Chhattisgarh 1.22 4 Delhi 0.22 5 Himachal Pradesh 2.49 6 Haryana 0.04 7 Gujarat 3.56 8 Kerala 1.15 9 Madhya Pradesh 3.00 10 Maharashtra 2.78 crackIAS.com11 Jammu & Kashmir 4.82 12 Jharkhand 11.00 13 Karnataka 2.61 14 Orissa 12.96 15 Rajasthan 0.81 16 Tamilnadu 95.08 17 Telangana 2.93 18 Uttar Pradesh 23.99 19 Uttarakhand 0.90 20 West Bengal 22.03 Total 220.78 NER 21 Arunachal Pradesh 2.480 22 Assam 49.10 23 Manipur 4.32 24 Mizoram 1.77 25 Nagaland 4.16 26 Meghalaya 0.08 27 Sikkim 0.97 28 Tripura 1.46 Total 64.34 Grand Total 285.12

*****

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in written reply in the Rajya Sabha today.

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END Downloaded from crackIAS.com crackIAS.com© Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-19 IMPACT OF DEMONETISATION AND GST ON TEXTILE INDUSTRY Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles Impact of Demonetisation and GST on Textile Industry

Posted On: 18 JUL 2019 4:34PM by PIB Delhi

Ministry of Textiles has not conducted a study on the impact of demonetization and GST on textile sector as no negative impact of demonetisation was observed by the Ministry during its implementation of schemes/field visits.

GST rates for garments and made up articles is 5% of sale value not exceeding Rs. 1000 per piece and 12% for articles of sale value exceeding Rs. 1000 per piece. The GST rates are lesser than the pre-GST incidence of taxes on these goods. To reduce the cost of garment industry, GST rate on manmade fibre yarns has been reduced from 18% to 12%. Further, the refund of accumulated input tax credit on fabrics has also been allowed to reduce cost of fabrics which is a major input for garments. Further, under the Interest Subvention Scheme, it was announced in the budget speech that 350 crore allocated for 2 per cent interest subvention for all GST- registered MSMEs on fresh or incremental loans.

Government has taken a number of steps for promotion of investment, production exports and for creation of new job opportunities in the textile sector which inter-alia include the following:

(i) To increase competitiveness of textile industry, Government announced a Special Package for garments and made-ups sectors of Rs.6000 crore which was launched in 2016 to promote investment, boost exports and employment generation of around 1.11 crore jobs. The package offers Rebate of State Levies (RoSL), labour law reforms, additional incentives under Amended Technology Upgradation Fund Scheme ATUFS and relaxation of Section 80JJAA of Income Tax Act. The RoSL scheme has been replaced by the new RoSCTL (Rebate of State and Central Taxes and Levies) scheme w.e.f 7th March crackIAS.com2019 and shall remain in force up to 31.03.2020. The rates under Merchandise Exports from India Scheme (MEIS) have been enhanced from 2% to 4% for garment and made- ups, 5% to 7% for handloom and handicrafts w.e.f. 1st November 2017. Products such as fibre, yarn and fabric in the textile value chain are being strengthened and made competitive through various schemes, inter alia, Powertex for fabric segment, ATUFS for all segments except spinning, Scheme for Integrated Textile Parks (SITP) for all segments, etc. Assistance is also provided to exporters under Market Access Initiative (MAI) Scheme. Government has enhanced interest equalization rate for pre and post shipment credit for exports done by MSMEs of textile sector from 3% to 5% w.e.f. 02.11.2018. Benefits of Interest Equalization Scheme has been extended to merchant exporters from 02.01.2019 which was earlier limited to only manufacturer exporters.

(ii) Amended Technology Upgradation Fund Scheme is being implemented to upgrade technology/machinery of textile industry with an outlay of Rs. 17,822 crore during 2016-2022 which will attract investment of Rs.1 lakh crore and generate 35.62 lakh employment in the textile sector by 2022.

(iii) Under the Scheme of Integrated Textile Park (SITP), Government provides 40% subsidy with a ceiling of Rs.40 crore to set up Textile Parks for creation of textile infrastructure and employment generation.

(iv) A separate scheme for development of knitting and knitwear has been launched recently to boost production in knitting and knitwear clusters which provide employment to nearly 24 lakh persons.

(v) Government has approved a new scheme viz., ‘Samarth – Scheme for Capacity Building’, to train 10 lakh youth for a period of three years from 2017-18 to 2019-20, at an estimated cost of Rs.1300 crore. The scheme aimed at providing demand driven, placement oriented National Skills Qualifications Framework (NSQF) compliant skilling programmes to incentivize and supplement the efforts of the industry in creating jobs in the organised and related sector including skilling and skill-upgradation in the traditional sector.

(vi) Apart from the above, Government has been implementing various schemes for promoting investment, production, employment generation and for boosting exports in the textile sector. These include PowerTex India Scheme - for Powerloom Sector Development; Silk Samagra- the integrated silk development scheme; Integrated Processing Development Scheme (IPDS), North Eastern Region Textile Promotion Scheme (NERTPS), Incentive Scheme for Acquisition of Plants and Machinery (ISAPM) for Jute Industry and Jute Diversified Products Manufacturing Units, innovation and expansion under Technology Mission on Technical Textiles- for Promoting Usage of Agro textiles, Focus Incubation Centre, etc. Furthermore, Government has been encouraging and supportingcrackIAS.com the traditional handloom and handicraft sectors including silk, wool and jute sectors for enhancing production and employment generation in these segments.

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in written reply in the Rajya Sabha today.

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(Release ID: 1579349) Visitor Counter : 111

crackIAS.com Source : www.pib.nic.in Date : 2019-07-19 EXPANSION OF SERICULTURE Relevant for: Indian Economy | Topic: Major Crops, Cropping Patterns and various Agricultural Revolutions

Ministry of Textiles Expansion of Sericulture

Posted On: 18 JUL 2019 4:33PM by PIB Delhi

A web portal “SILKS” (Sericulture Information Linkage Knowledge System) has been developed in collaboration with North Eastern Space Applications Centre (NESAC), Umiam, Meghalaya and being used by the State Sericulture Departments, Central Silk Board (CSB) & planners to find out potential areas for development of Sericulture in the States. “SILKS” is a single window, ICT (Information and Communication technology) based information and Advisory Services System for planners, field staff and farmers practicing sericulture. A total 108 districts in 24 States covered in first phase of the project. In second phase of the project, total 70 more districts in 25 states have been taken up for study under Silk Samagra - Integrated Scheme for Development of Silk Industry (ISDSI) which is in final stage.

Central Silk Board (CSB), a statutory body under the Ministry of Textiles has developed an Indigenous Automatic Silk Reeling Machine (ARM) involving domestic manufacturers for promotion under Transfer of Technology (TOT) in the field to support ‘Make in India’ concept. The Indigenous ARM of 200 end capacity has been included and promoted under the GOI Flagship Programme ‘’ Silk Samagra’’ (2017-2020) with a unit cost of Rs.76.65 lakh. CSB is providing Technical & Financial assistance for weaving and processing sector under its beneficiary oriented Central Sector Scheme “Silk Samagra’’ for the year 2019-20.

In respect of silk machinery related to Vanya silk, nine different Vanya silk reeling & Spinning machines have been promoted/implemented in various Plans. Further, the implementation of improved machines is being continued under Silk Samgra (2017-20). In order to replace/eradicate thigh reeling, which is unhygienic and against dignity of women, the Buniyad reeling machine has been developed and is being popularized. As on March-2019, 4530 Buniyad reeling machine has been distributed among the tribal women under “Silk Samagra”.

UndercrackIAS.com “Silk Samagra” (2017-18 to 2019-20) being implemented by CSB, following steps are being taken for further modernization of seed producing centres in different states for enhancing their productivity and production capacities.

i. Revolving capital fund support for seed production centres ii. Purchase of seed testing equipment for seed production centres iii. Up-gradation of production units and cold storage facilities

To encourage Private participation in seed production, National Silkworm Seed Organization (NSSO) under Central Silk Board has initiated a move to attract small and large scale seed producers to the sector. Central Silk Board has initiated action to develop private Registered Seed Producers (RSP) in Bivoltine hybrid seed production programme, for which different technical and technological supports are being extended to them, which are as follows:

i. Supply of P1 Bivoltine Seed Cocoons: As a hand holding to promote bivoltine seed production, CSB is supplying quality seed cocoons to the RSPs, on cost basis. ii. Cold Storage Support to the RSPs for preservation of Bivoltine silkworm seed produced by them. iii. Uniform selling price of bivoltine seed by all agencies. iv. Technological hand-holding and Skill development: The RSPs are provided hands-on- training in commercial bivoltine seed production under Central Seed Act and also regularly being supported technically time to time.

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in written reply in the Rajya Sabha today.

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(Release ID: 1579347) Visitor Counter : 113

END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.pib.nic.in Date : 2019-07-19 SURVEY ON EMPLOYMENT IN TEXTILE SECTOR Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

Ministry of Textiles Survey on Employment in Textile Sector

Posted On: 18 JUL 2019 4:39PM by PIB Delhi

A survey for skill gap analysis in textile and clothing sector of India was conducted by the Textiles Committee in May 2018. The survey estimated additional employment to the tune of 62.12 lakh in organised sector by 2020. The study also projected skilling requirement for 30.56 lakh persons in which 23.89 Lakh was for Apparel Sector.

With a view to address the skilled manpower requirements of textile sector, the Ministry had been implementing Integrated Skill Development Scheme (ISDS) from 2010-11 to 2017-18. The scheme was implemented on pan India basis. Under the scheme, 11.14 lakh persons were trained out of which 8.43 lakh persons were given employment.

In order to continue the endeavour of the Ministry in addressing the skill gap in the textile industry, the Government has approved a new scheme titled Samarth-Scheme for Capacity Building in Textile Sector (SCBTS) for the entire value chain of textile sector, excluding Spinning and Weaving in the organized sector, for a period of three years from 2017-18 to 2019-20 with an outlay of Rs. 1300 crore. The objectives of the scheme inter alia include providing demand driven, placement oriented National Skills Qualifications Framework (NSQF) compliant skilling programmes to incentivize and supplement the efforts of the industry in creating jobs in the organised textile and related sectors and to provide skilling and skill-upgradation in the traditional sectors. 10.00 lakh persons will be trained under the scheme.

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in written reply in the Rajya Sabha today. crackIAS.com ***

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crackIAS.com Source : www.thehindu.com Date : 2019-07-20 GREEN SHOOTS OF ECONOMIC GROWTH Relevant for: Indian Economy | Topic: Issues relating to Planning & Economic Reforms

India’s dream of becoming a $5-trillion economy by 2024 is now in the open with a ‘blue sky’ vision envisaged in the Economic Survey this year. The document lays down a clear strategy to augment the growth of key sectors by shifting gears as the current economic conditions are smooth in terms of macroeconomic stability to expand growth. However, unless there are adequate investment reforms in primary sectors, steps taken to augment growth in other sectors would be futile.

According to the Food and Agriculture Organisation (FAO), insufficient investment in the agriculture sector in most developing countries over the past 30 years has resulted in low productivity and stagnant production.

In India, with a steadily decreasing share of 14.4% in Gross Value Added since 2015-16, the sector’s contribution to a $5-trillion economy would be around $1 trillion — assuming a positive annual growth rate hereafter.

What a $5 trillion economy would look like

Investment is the key to unlocking the potential of a developing economy. However, the myopic policy regime in the past several decades has resulted in sluggish investment growth in the farm sector. Therefore, strengthening the sector with an enabling investment package (both public and private) is critical.

First, the wave of investment should touch segments such as agro-processing, and exports, agri-startups and agri-tourism, where the potential for job creation and capacity utilisation is far less. Integrating the existing tourism circuit with a relatively new area of agri-tourism (as a hub- and-spoke model), where glimpses of farm staff and farm operations are displayed to attract tourists, would help in boosting the investment cycle and generate in-situ employment.

$5 trillion target achievable, says Chief Economic Adviser

Second, investment needs to be driven to strengthen both public and private extension advisory systems and the quality of agri-education and research through collaboration and convergence. It would also serve as a stage to demonstrate resource conservation and sustainable use through organic, natural and green methods, and also zero budget natural farming.

Third, given that India has the highest livestock population in the world, investment should be made to utilise this surplus by employing next-generation livestock technology with a strong emphasiscrackIAS.com not only on productivity enhancement but also on conservation of indigenous germplasm, disease surveillance, quality control, waste utilisation and value addition. This would lead to a sustained increase in farm income and savings with an export-oriented growth model.

Fourth, investment in renewable energy generation (using small wind mill and solar pumps) on fallow farmland and in hilly terrain would help reduce the burden of debt-ridden electricity distribution companies and State governments, besides enabling energy security in rural areas.

Fifth, a farm business organisation is another source of routing private investment to agriculture. Linking these organisations with commodity exchanges would provide agriculture commodities more space on international trading platforms and reduce the burden of markets in a glut season, with certain policy/procedural modifications.

Finally, data is the key driver of modern agriculture which in turn can power artificial intelligence- led agriculture, e-markets, soil mapping and others. Currently, there are issues of enumeration, maintenance and accessibility to help maintain agri-data on various fronts. There also needs to be a centralised institutional mechanism to help maintain farm level-data available for real time (virtual) assessment, while also helping plug the loopholes in subsidy distribution, funding and unrealistic assumption in production estimation. This will help in effectively implementing and monitoring various schemes for a pragmatic food system.

Union Budget 2019-20 first take: Moving strategically to a $5-trillion economy

It is widely accepted that resource conservation comes with behavioural change, which needs dedicated investment in behavioural farm research sets. Perhaps this would help find a way to leverage nudge policies/choice architecture for resource conservation, fertilizer use, irrigation and electricity consumption. Above all, there is a need to converge fragmented investments (public, private and foreign) to address the structural weaknesses in the agriculture sector, enunciated in the Economic Survey 2016-17.

Though economic transition has seen significant growth contribution from services and industry, agriculture remains the most trusted sector in helping alleviate poverty, hunger and malnutrition and ensuring better income distribution.

An earlier experience of BRIC (Brazil, Russia, India and China) nations has shown that a 1% growth in agriculture is at least two to three times more effective in reducing poverty than similar growth in non-agricultural sectors. Public investment in agriculture research and development in terms of percentage share in agri GVA stands at 0.37%, which is fairly low in comparison to between 3% and 5% in developed countries.

Also, in real terms, current investment can create an enabling environment to route private investment in R&D. Therefore, public investment in agriculture should see a commensurate rise with a healthy mix of education, research and extension encouraging ‘blue-sky thinking’ in all segments, while pushing for a targeted pruning of public expenditures on subsidies, kind transfers, loan waivers and populist measures.

Agriculture and its allied sectors are believed to be one of the most fertile grounds to help achieve the ambitious Sustainable Developmental Goals (SDGs). However, with the current pace of agriculture growth, India requires ‘patient capital’, as financial returns to investment are unlikely to materialise in the initial years. An inclusive business model facilitating strong investor- farmer relations should be created, with a legal and institutional framework for governance. Expanding institutions is essential to accommodate the developmental impacts of foreign agriculturalcrackIAS.com investment. Naveen P. Singh and Ranjith P.C. are with the ICAR-National Institute of Agricultural Economics and Policy Research, New Delhi. The views expressed are personal

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crackIAS.com Source : www.indianexpress.com Date : 2019-07-20 NOW, MISSION ECONOMY Relevant for: Indian Economy | Topic: Issues relating to Planning & Economic Reforms

The writer is a senior advocate of the Madras High Court

Fifty years ago, Apollo11 landed on the moon and realised the audacious goal set by the US President Kennedy in 1961 of sending a man to the moon and bringing him back safely by the end of the decade. Equally audacious is the goal set by Prime Minister Narendra Modi of increasing India’s GDP from $2.8 trillion to $5 trillion in just five years.

NASA engineers asked a critical question: What are the most essential things that must be dealt with to achieve this goal? They came up with three issues: Navigation, propulsion and life- support (for the astronauts). It is equally necessary for India to identity the most critical things that it has to grapple with to achieve the $5 trillion target. These are our tax system, regulatory laws and the attitude towards the private sector.

The biggest stumbling block to achieving the $5 trillion target is that each of these factors work in their own sphere unmindful of the fact that while their actions may achieve their individual goals, they may cause serious damage to the national policy objective. Our policy is to encourage foreign direct investment but our tax laws and the tax administration are so aggressively anti-industry that most foreign investors would rather set up manufacturing units in China, Thailand or Vietnam. The tax authorities have a single-minded focus of achieving their revenue targets, and any method justifies the end. This results in the most ridiculous tax demands that lead to extensive litigation. It is a matter of serious concern that India, with less than 2 per cent of global trade, has more transfer-pricing disputes than any other country.

Our regulatory and labour laws, particularly at the state level, still require multiple licences and permits that make it very difficult to set up an industry. A large number of these laws have to be dismantled if Make in India is to become a reality. The land acquisition laws now require at least 48 months to set up a large project. The sugar industry is a classic example of the government’s populist policy crippling an entire industry. No industry can survive if the state-regulated raw material price is more than the market-driven selling price of the final product.

The third factor is critical to achieving our ambitious target. There has to be a change in the attitude towards the private sector, particularly big business. We must stop treating private enterprise as a necessary evil rather than as an affirmative good. China, whose GDP equaled India’s a few decades ago, is now a $13 trillion economy with almost the same population. It has becomecrackIAS.com the largest manufacturing centre only because of private enterprise. Just one example shows the gap: China’s garment exports in 2017 were $110 billion, while India’s exports were just $17 billion.

The same story is repeated in several sectors. None of this would have been possible without the Chinese government actively and aggressively encouraging the private sector. We will have to examine what are the tax, labour and regulatory laws that have made China so successful? And how many of these incentives and policies can be replicated?

We have just five years to achieve this target. Jim Collins, the famous management guru, laments that several companies choose to ignore the “brutal facts”; so do nations, at their peril. Several industries are in a precarious position and there is an overall slowdown of the economy. The Indian economy is in need of a serious overhaul if we are to generate large-scale employment. The failure of several “global investors” conferences is a grim indicator that India is not an attractive investment destination.

The task of achieving the $5 trillion goal has to be equally shared by states. With the same party in power in the Centre and several states, it will be easier to implement large-scale reforms that are now necessary. We have two options: To continue with the status quo of focusing on large government sponsored infrastructure and welfare schemes to drive growth, with the attendant requirement of massive borrowings or actively encourage private investment to make India the second-largest manufacturing nation. Only the second option will enable India to reach the target by 2024. The tax and regulatory laws must function in unison and must be designed to become growth oriented. If we change course, like NASA, we can achieve our ambitious goal. If we continue on the existing path, the $5 trillion dream will remain a mirage.

The writer is a senior advocate, Supreme Court.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-20 SCHEME FOR INTEGRATED TEXTILE PARK Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles Scheme for Integrated Textile Park

Posted On: 19 JUL 2019 5:28PM by PIB Delhi

The Scheme for Integrated Textile Park (SITP) was approved during the 10th Five Year Plan in 2005.Five (5) Textile Parks have been sanctioned so far, under SITP in the state of Andhra Pradesh. A sum of Rs.4.75 crores have been released to these Textile Parks during the last two years and the current year.

There are a total of 59 textile parks approved under SITP by the Ministry. Although, there are no specific apparel parks under SITP, there are36 Textiles Parks which have apparel units under them. Status of Textile Parks in Andhra Pradesh under the SITP in terms of employment generation is at Annexure A.

This Ministry is implementing the Integrated Processing Development Scheme (IPDS) for enabling the textile processing sector to meet environmental standards through adoption of appropriate technology, specifically in the area of water and waste water management. The Scheme is a demand driven scheme. This Ministry has sanctioned 7 Projects under the IPDS for setting up ‘Common Effluent Treatment plants’ (CETPs) with Zero Liquid Discharge (ZLD) systems out of which 3 projects arein the state Rajasthan, 3 projects are in the state of Tamil Nadu and 1 project is in the state of Gujarat. Also, required CETPs may be included in SITP proposal under ‘Common Facility’ component.

Scheme for Integrated Textile Park is a demand driven scheme in which the prospective entrepreneurs can send their proposals to the Government, after completioncrackIAS.com of stipulated conditions as per guidelines. The Textile Parks under SITP approved in the state of Gujarat are given in Annexure-B.

Annexure-A

Status of Textile Park under SITP in Andhra Pradesh

Sr. Proposed Actual (till Name of the Park Location Status No. Employment date) Brandix India Apparel 1 Vishakhapatnam 60000 19000 Completed City Pvt. Ltd. 2 MAS Fabric Park Nellore 31000 550 Sanctioned HindupurVyapaar 3 Hindupur 10500 0 Sanctioned Apparel Park 4 Guntur Textile Park Guntur 2960 0 Sanctioned Tarakeswara Textile 5 Nellore 2199 0 Sanctioned Park

ANNEXURE-B

Sanctioned SITP Parks in Gujarat

Sl.No. Name of the park Location State Status Gujarat Eco-Textile 1 Surat Gujarat Completed Park Limited Mundra SEZ Textile & 2 Kutch Gujarat Completed Apparel Park Limited Fairdeal Textile Park 3 Surat Gujarat Completed Pvt. Ltd. Vraj Integrated Textile 4 Ahmadabad Gujarat Completed Park Limited Sayana Textile Park 5 Surat Gujarat Completed Limited crackIAS.comSurat Super Yarn Park 6 Surat Gujarat Completed Limited Ichhapore, RJD Integrated Textile Taluka - Hazira, 7 Gujarat Completed Park Ltd. Dist- Surat, Gujarat. Kejriwal Integrated 8 Surat Gujarat Under progress Textile Park Shanti Integrated Village 9 Textile Park Pvt Ltd., NaviPardi, Ta. Gujarat Under Progress Surat Kamrej Palsana ITP Park, 10 Palsana Gujarat Under Progress Surat, Gujarat Amitara Green High MojeNaikaKhed 11 Tech Textile Park Pvt Gujarat Under Progress a Gujarat Ltd. NSP Infrastructure 12 Ichhapore Gujarat Standstill Private Limited, Surat Molvan, Taluka Karanj Integrated 13 Mangrol, Surat Gujarat Under Progress Textile Park District 14 Shahlon Textile Park Mangrol-Taluka Gujarat Under Progress

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in a written reply in the Lok Sabha today.

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END Downloaded from crackIAS.com crackIAS.com© Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-20 JUTE MILLS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles Jute Mills

Posted On: 19 JUL 2019 5:27PM by PIB Delhi

The Government is ensuring consistent demand for jute mills under the Jute Packaging Materials (Compulsory Use in Packing Commodities) [JPM Act], 1987. At present, a minimum of 100% of food grains and a minimum of 20% of sugar procured by State Procuring Agencies (SPAs) are to be compulsorily packed in jute sacking.

The Government of India has launched Incentive Scheme for Acquisition of Plants and Machinery (ISAPM) for Jute Industry and Jute Diversified Products Manufacturing Units to facilitate modernization and up-gradation in existing and new jute mills/JDP units by way of capital subsidy. The Government has also imposed Anti-Dumping Duty on jute goods originating from Bangladesh and Nepal to protect domestic jute industry.

The different jute mills under National Jute Manufactures Corporation (NJMC) Ltd. formed through nationalization of six jute mills including Alexandra, Kinnison and Khardahwere closed due to financial losses and the closure was approved by Cabinet Committee of Economic Affairs (CCEA) after the revival scheme failed to materialise.

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in a written reply in the Lok Sabha today.

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(Release ID: 1579538) Visitor Counter : 50 crackIAS.com

END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-20 HEALTH INSURANCE SCHEME FOR WEAVERS Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

Ministry of Textiles Health Insurance Scheme for Weavers

Posted On: 19 JUL 2019 5:20PM by PIB Delhi

Health Insurance Scheme was implemented by Ministry of Textiles till 30.09.2014 to provide health care facility to handloom weavers. The healthcare facility was provided through a Health Insurance Company which was selected by open tender procedure. Only the annual premium was paid to the Health Insurance Company as per the actual enrolment done. The health insurance claims submitted by the weavers were paid directly by Health Insurance Company. No irregularity in utilizing the Government of India funds were noticed in the implementation of the scheme.

The Government of India, Office of the Development Commissioner (Handicrafts) is implementing following Schemes for promotion and development of Handicrafts Sector:

National Handicraft Development Programme (NHDP)

Comprehensive Handicrafts Cluster Development Scheme (CHCDS)

National Handicraft Development Programme (NHDP)

Base Line Survey & Mobilization of Artisans under Ambedkar Hastship Vikas Yojana

Design & Technology upgradation (DTU) HumancrackIAS.com Resource Development (HRD) Direct Benefit to Artisans (DBA)

Infrastructure and Technology Support (ITS)

Research and Development (R&D)

Marketing Support & Services (MSS)

Comprehensive Handicrafts Cluster Development Scheme(CHCDS)

Mega Cluster (MC)

Special Projects under Integrated Development and Promotion of Handicraft (IDPH)

The State-wise financial assistance provided under these schemes during the last three years is Annexed.

For strengthening the Yarn Supply Scheme, the guidelines have been revised during 2018-19. Under the Scheme, 10% price subsidy is provided on cotton, domestic Silk, Woolen yarn and Linen yarn in hank form with quantity restrictions, besides the supply of yarn at Mill Gate Price without quantity restrictions.

ANNEXURE crackIAS.com Financial assistance provided for promotion and development of Handicrafts Industries during the last three years.

Amount released STATE/UTs (Rs in Lakhs) A & N Islands 56.89 Andhra Pradesh 2227.66 Arunachal Pradesh 132.14 Assam 1127.32 Bihar 1369.83 Chandigarh 46.67 Chhattisgarh 221.53 Delhi 1313.12 Goa 14.25 Gujarat 644.06 Haryana 258.07 Himachal Pradesh 514.54 Jammu & Kashmir 1276.47 Jharkhand 210.18 Karnataka 432.38 Kerala 253.15 Madhya Pradesh 838.05 Maharashtra 494.33 Manipur 794.22 Meghalaya 233.14 Mizoram 83.52 Nagaland 159.49 Odisha 677.78 Puducherry 83.70 Punjab 501.11 Rajasthan 1192.20 Sikkim 155.16 Tamil Nadu 360.22 Telangana 981.71 Tripura 224.53 Uttar Pradesh 4444.11 UttrakhandcrackIAS.com245.65 West Bengal 415.90 TOTAL 21983.08

This information was given by the Union Minister of Textiles, SmritiZubinIrani, in a written reply in the Lok Sabha today. ***

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-20 HANDLOOM WEAVERS Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

Ministry of Textiles Handloom Weavers

Posted On: 19 JUL 2019 5:19PM by PIB Delhi

As per 3rd handloom census, there are 43.31lakh handloom weavers and allied workers in the country, including Rajasthan, Uttar Pradesh and Maharashtra. A Statement showing State-wise number of handloom weavers and workers is at Annexure-I.

The weaverscooperative societies come under the purview of State Governments.However based on the reports received, so far 1477 societies are not active in the States of Rajasthan(736), Uttar Pradesh(324) and Maharashtra(417).

The Government has promulgated the Handlooms (Reservation of Articles for Production) Act, 1985 to protect the interest of handlooms weavers in the country. 11 textiles articles are exclusively reserved with some technical specifications for production on handlooms.Implementing agencies carry out powerloom inspections to check any violation of the Act. Central Assistance is also provided under the Scheme to the eligible State Governments for effective implementation of the Act. An amount of Rs. 761.67 Lakh has been released during the last three years to the ten eligible State Governments to implement the Act.

The Government of India, Ministry of Textiles is implementing following schemes for promotion & development of handlooms and welfare of handloom weavers across the country:

National Handloom Development Programme (NHDP) ComprehensivecrackIAS.com Handloom Cluster Development Scheme (CHCDS) Handloom Weavers’ Comprehensive Welfare Scheme (HWCWS)

Yarn Supply Scheme (YSS)

Under the above schemes, financial assistance is provided for raw materials, purchase of looms and accessories, design innovation, product diversification, infrastructure development, skill upgradation, lighting units, marketing of handloom products and loan at concessional rates. Those cooperative societies which are not functioning well can also improve their performance by utilizing the assistance given under these schemes.

National Handloom Development Programme (NHDP)

Block Level Cluster: Introduced in 2015-16 as one of the components of National Handloom Development Programme (NHDP). Financial assistance upto Rs. 2.00 crore per BLC for various interventions such as skill upgradation, Hathkargha Samvardhan Sahayata, product development, construction of workshed, project management cost, design development, setting up of common facility centre (CFC) etc. Is provided. Besides, financial assistance upto Rs. 50.00 lakh is also available for setting up of one dye house at district level. The proposals are recommended by the State Government.

Handloom Marketing Assistance is one of the components of National Handloom Development Programme. In order to provide marketing platform to the handloom agencies/weavers to sell their products directly to the consumers, financial assistance is provided to the States/eligible handloom agencies for organising marketing events in domestic as well as overseas markets.

Weavers’ MUDRA Scheme: Under the Weavers’ Mudra Scheme, credit at concessional interest rate of 6% is provided to the handloom weavers. Margin money assistance to a maximum of Rs. 10,000 per weaver and credit guarantee for a period of 3 years is also provided. MUDRA portal has been developed in association with Punjab National Bank to cut down delay in disbursement of funds for margin money and interest subvention

HATHKARGHA SAMVARDHAN SAHAYATA (HSS)

HathkarghaSamvardhanSahayata (HSS) was introduced on 1st December 2016 with an objective to provide looms/accessories to the weavers to enhance their earnings through improvedcrackIAS.com productivity and quality of the handloom products. Under the scheme, 90% of the cost of loom/accessory is borne by the Government of India while remaining 10% is borne by the beneficiary. The Government of India’s share is released directly in the Bank account of the beneficiary through designated agency.

EDUCATION OF HANDLOOM WEAVERS AND THEIR CHILDREN:

Ministry of Textiles has signed Memorandums of Understanding with Indira Gandhi National Open University (IGNOU) and National Institute of Open Schooling (NIOS) to secure educational facilities for the weavers and their families. NIOS offers Secondary and Senior Secondary level education with specialized subjects on design, marketing, business development, etc. through distance learning mode for handloom weavers, whereas IGNOU offers continuing education programs through accessible and flexible learning opportunities relevant to the aspirations of handloom weavers and their children for career progression.

Ministry of Textiles is providing reimbursement of 75% of the fee towards admission to NIOS/IGNOU courses in case of SC, ST, BPL, and Women learners belonging to handloom weavers’ families.

“India Handloom” Brand- During the celebration of 7th August 2015 as National Handloom Day, ‘India Handloom’ Brand was launched by Hon’ble Prime Minister for branding of high quality handloom products. It promotes production of niche handloom products with high quality, authentic traditional designs with zero defect and zero effect on environment. Since its launch, 1232 registrations have been issued under 122 product categories and sale of Rs. 689.72 crore as reported on 31-03-2019.

Initiatives with various leading brands has been undertaken to bring out a separate range of handloom garments in their brand.

e-commerce- In order to promote e-marketing of handloom products, a policy frame work was designed and under which any willing e-commerce platform with good track record can participate in online marketing of handloom products. Accordingly, 23 e-commerce entities have been engaged for on-line marketing of handloom products. A total sales of Rs.34.72 crore has been reported through the online portal as on 31-03-2019.

Urban Haats are set up in the big towns/metropolitan cities to provide adequate direct marketing facilities to the craft persons/weavers and eliminate middle agencies. 38 such Urban Haats have been sanctioned across the country so far. crackIAS.com Comprehensive Handloom Cluster Development Scheme:

The Comprehensive Handloom Cluster Development Scheme (CHCDS) is implemented for development of Mega Handloom Clusters covering atleast 15000 to 25,000 handlooms and financial assistance as Government of India share from Rs. 40.00 to Rs.70.00 crore is in a period of 5 years. 8 mega handloom clusters taken up as announced in the Budgets i.e. Varanasi, Sivasagar (2008-09), Virudhunagar, Murshidabad (2009-10), Prakasam and Guntur districts and Godda& neighboring districts (2012-13), Bhagalpur &Trichy (2014-15).

Under the scheme, components like conducting Diagnostic Study, engaging Designer, Product Development, Corpus for raw material, Construction of Worksheds (for BPL/SC/ST/Women weavers), Skill up-gradation etc. are fully funded by Government of India, while the components like Technology up-gradation, lighting units funded 90% andother common infrastructural projects like Design Studio, Marketing Complex, Value Addition Centres, Publicity etc., are funded by the GOI to the extent of 80%.

Handloom Weavers’ Comprehensive Welfare Scheme

Weavers Comprehensive Welfare Scheme (HWCWS) is providing life, accidental and disability insurance coverage under the components Pradhan Mantri Jivan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha BimaYojana(PMSBY) and Converged Mahatma Gandhi Bunkar Bima Yojana(MGBBY).

Yarn Supply Scheme

Yarn Supply Scheme is being implemented throughout the country to make available all types of yarn at Mill Gate Price. The scheme is being implemented through National Handloom Development Corporation. Under the Scheme freight is reimbursed and depot operating charges @2% is given to depot operating agencies. A component of 10% price subsidy also exists on hank yarn, which is applicable on cotton, domestic silk and woolen yarn with quantity caps.

Annexure-I

Details of Statewise number of handloom weavers and allied workers as per 3rd handloom census of 2009-10

No. of handloom weavers SN State & allied workers crackIAS.com1 Andhra Pradesh 2,89,809 2 Arunachal Pradesh 33,041 3 Assam 16,43,453 4 Bihar 43,392 5 Chhattisgarh 8,191 6 Delhi 2,738 7 Gujarat 11,009 8 Haryana 7,967 9 Himachal Pradesh 13,458 10 Jammu & Kashmir 33,209 11 Jharkhand 21,160 12 Karnataka 89,256 13 Kerala 14,679 14 Madhya Pradesh 14,761 15 Maharashtra 3,418 16 Manipur 2,18,753 17 Mizoram 43,528 18 Meghalaya 13,612 19 Nagaland 66,490 20 Odisha 1,14,106 21 Pondicherry 2,803 22 Punjab 2,636 23 Rajasthan 31,958 24 Sikkim 568 25 Tamil Nadu 3,52,321 26 Telangana 66,029 27 Tripura 1,37,177 28 Uttar Pradesh 2,57,783 29 Uttrakhand 15,468 30 West Bengal 7,79,103 Total 43,31,876

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in a written reply in the Lok Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-20 CONTRIBUTION OF TEXTILE INDUSTRY Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles Contribution of Textile Industry

Posted On: 19 JUL 2019 5:13PM by PIB Delhi

The percentage of contribution of Textile industry to industrial production and Gross Domestic production(GDP) for the year 2014-15 to 2016-17 are given below at table (i) and income from textile exports for the years 2016-17 to2018-19 is given below at table (ii):-

Share of Textiles Sector to India’s GDP and GDP of Manufacturing Sector(at Basic prices)(Rs. in crore)

% share of Textile Industry to GDP of manufacturing % share of Textile Industry to India’s Year Sector GDP 2014-15 13.50 2.33 2015-16 12.43 2.22 2016-17 12.65 2.30

Source: National Accounts Statistics, 2018.

India’s textiles exports including handicrafts from 2016-17 to 2018-19:

(Rs in crore)

Year 2016-17 2017-18 2018-19 Textiles exports including handicrafts (Rs. in crore) 265340.00 255159.98 255336.98

There are estimatedto be more than 4.5 crore people engaged/employed directly in the textile industry and another 6 crore people in allied sectors including a large numberof women and rural populationcrackIAS.com employed in the sector. Government has taken a number of steps for promotion of investment, production, exports and employment generation in the textile sector across the country which inter-alia include the following:-

A special package of Rs.6000 crore was launched in 2016 to promote investment, boost exports and employment generation (estimated 1.11 crore jobs) in apparel and made-ups sectorwith three main components viz., (i) Remission of State Levies (ROSL) full refund of the State level taxes paid by the exporters; (ii) production linked additional incentive of 10% under the Amended Technology Up-gradation Fund Scheme (ATUFS) and (iii) full employer’s contribution (12%) of the Employees Provident Fund (EPF) under the PradhanMantriParidhanRozgarProtsahanYojana (PMPRPY)for a period of three years w.e.f 1st April,2018 to employees of garment industry who are earning less than Rs. 15,000 per month for all sectors including Textiles and Apparel (T&A) sector;

Amended Technology Upgradation Fund Scheme - to upgrade technology/machineries of textile industry with an outlay of Rs.17, 822crore during 2016-2022 which will attract investment of Rs.1 lakh crore and generate 35.62 lakh employments in the textile sector by 2022.

Under the Scheme of Integrated Textile Park (SITP), 40% subsidy is provided with a ceiling of Rs.40 crore to set up Textile Parks for creation of textile infrastructure and employment generation.

A separate scheme for development of Knitting and knitwear has been launched in January,2019 with an outlay of Rs.47.72 crore for a period upto 31.3.2020to boost production in knitting and knitwear clusters which provide employment to nearly 24 lakh persons.

Government has approved a new scheme viz., ‘Samarth – Scheme for Capacity Building’, to train 10 lakh youth for a period of three years from 2017-18 to 2019-20, at an estimated cost of Rs.1300 crore. The scheme is aimed at providing demand driven, placement oriented National Skills Qualifications Framework (NSQF) compliant skilling programmes to incentivize and supplement the efforts of the industry in creating jobs in the organised and related sector including skilling and skill-upgradation in the traditional sector.

National Handloom Development Programme - Comprehensive Handloom Cluster Development Scheme, Handloom Weaver Comprehensive Welfare Scheme and Yarn Supply Schemes –providing basic inputs, looms and accessories, design and development, infrastructure development, marketing of handloom products, etc.

National Handicrafts Development Programme (NHDP) and Comprehensive Handicraft Cluster Development Schemes - for holistic development of handicrafts clusters through integrated approach by providing support for design, technology up-gradation, infrastructure development, marketing etc.

“PowerTex India”— launched on 1st April, 2017 with an outlay of Rs. 487 crore for three years for loom upgradation, infrastructure creation and access to concessional credit - push to the fabric segment;

A new scheme ‘Silk Samagra’ was launched for a period of 3 years upto 2019-20, with an outlay of Rs.2161.68 crore for comprehensive development of the silk sector - Integrated Sericulture Development Project and Intensive BiovoltineSericulture Development Project-including38 sericulture projects are being implemented in 8 North East States at a total cost of Rs. 1107 crore crackIAS.comfrom 2014-15 to 2020-21 to cover 63,000 beneficiaries; Jute ICARE for increasing the income of farmers by at least 50% through promotion of certified seeds, better agronomic practices and use of microbial re-using of Jute plant;

Integrated Wool Development Programme for growth of wool sector by way of machine sheep shearing, strengthening of wool market and processing and woollen product manufacturing;

North East Region Textile Promotion Scheme (NERTPS) for promoting textiles industry in the NER by providing infrastructure, capacity building and marketing support to all segments of textile industry; As detail given in table (a),(ii)in reply to part (a) of the question above, export increased from Rs. 255159.98 crore in 2017-18 to Rs. 255336.98cr in 2018-19.

Apart from the above, Government has been taking various initiativesfor increasing competitiveness and exports of textile products including knitwear and handloom such as Special Package for garments and made-ups sectors - Rebate of State Levies (RoSL); labour law reforms; additional incentives under Amended Technology Upgradation Fund Scheme ATUFS; and relaxation of Section 80JJAA of Income Tax Act. The RoSL scheme has been replaced by the new RoSCTL (Rebate of State and Central Taxes and Levies) scheme w.e.f 7th March 2019 and shall remain in force up to 31.03.2020.

Further, the rates under Merchandise Exports from India Scheme (MEIS) have been enhanced from 2% to 4% for garment and made-ups, 5% to 7% for handloom and handicrafts w.e.f. 1st November 2017. Financial assistance is also provided to exporters under Market Access Initiative (MAI) Scheme. Government has enhanced interest equalization rate for pre and post shipment credit for exports done by MSMEs of textile sector from 3% to 5% w.e.f. 02.11.2018. Benefits of Interest Equalization Scheme have been extended to merchant exporters from 02.01.2019 which was earlier limited to only manufacturer exporters.To reduce the cost of garment industry, GST rate on manmade fibre yarns has been reduced from 18% to 12%.

The refund of accumulated input tax credit on fabrics has also been allowed to reduce cost of fabrics which is a major input for garments. Further, under the Interest Subvention Scheme, it was announced in the budget speech that 350 crore allocated for 2 per cent interest subvention for all GST-registered MSMEs on fresh or incremental loans.

Besides the above, Government has been encouraging and supporting the traditional handloom and handicraft sectors including silk, wool and jute sectors for enhancing production and employment generation in these segments.

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in a written reply in the Lok Sabha today.

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crackIAS.comEND Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.indianexpress.com Date : 2019-07-22 FROM PLATE TO PLOUGH: A WIN-WIN DEAL Relevant for: Indian Economy | Topic: Issues related to direct & indirect Farm Subsidies and MSP

The writer is chair professor for agriculture at ICRIER. Views are personal

In her budget speech, the Union finance minister (FM) said: “At the centre of everything that we do, we keep gaon, garib aur kisan in mind.” Here then is a small mantra for her to transform the lives of the kisan and the poor in rural areas. Just streamline the food and fertiliser subsidies by converting them to direct cash transfers to identified beneficiaries. This can be done through the JAM trinity (Jan Dhan, Aadhaar and Mobile). Such a measure would not only empower the poor and farmers but also usher in a policy shift that can save the exchequer least Rs 50,000 crore every year. The government can invest this in agri-R&D and better water management, in measures to ensure the country’s food security for the next 25 years and to augment farmers’ incomes.

Let us first talk about the food subsidy. The food subsidy allocation in the budget is Rs 1,84, 220 crore — let us say Rs 1.84 lakh crore. How many are aware that the pending dues of the Food Corporation of India (FCI) stand at Rs 1.86 lakh crore? Year after year, there is under- provisioning of the food subsidy in the budget and the FCI is being asked to borrow from the banks so that the fiscal deficit can be shown under control. The FCI’s loans from the banks have now crossed Rs 2.48 lakh crore (see figure).

Two things stand out. One, the under-provisioning of the food subsidy — including overdues — in the budget. There is more under the carpet (Rs 1.86 lakh crore) than in the budget (Rs 1.84 lakh crore). Two, the real deficit in the budget is much more than what is claimed.

But here I am more concerned about the efficiency, equity and sustainability of the food subsidy regime under the National Food Security Act (NFSA) — a legacy of UPA-2. Does the FM really think that 67 per cent of the population covered under the NFSA cannot afford basic food? There is more than 90 per cent subsidy on rice and wheat under the PDS — the economic cost of rice hovers around Rs 35 per kg and that of wheat is about Rs 25 per kg, while rice is being sold via the PDS at Rs 3 per kg and wheat at Rs 2 per kg.

Interestingly, in rural areas in a majority of states, rice (paddy) is sold at less than the minimum support price (MSP). The landless labourers and small and marginal farmers, most of whom are covered under PDS, produce these staples. The government first buys paddy and wheat from rural areas and, after adding almost 50 per cent cost for procurement, stocking and distribution on topcrackIAS.com of the MSP price, sells the back most of this grain to people in rural areas. The government can achieve its ends in a much more cost-effective way if it transfers an equivalent amount of food subsidy in the form of cash to the beneficiary’s accounts. The beneficiary will have the freedom to buy anything — rice, wheat, coarse cereals, pulses or even milk and eggs, which are more nutritious. Diversified diets will signal the need for diversification in farms. The government can keep some stocks for strategic purposes but gradually reduce procurement and shrink the size and operations of FCI, especially in areas where the water table is depleting fast — the northwest of the country, for example.

Further, the government has to think whether the coverage under PDS should be 67 per cent of the population or if it should be brought down to, say, 40 or even 30 per cent. Also, the NFSA allows the government to hike issue prices. Why should the price of rice be kept at Rs 3 per kg and that of wheat at Rs 2 per kg? This leads to massive diversion of PDS supplies to the open market. The Shanta Kumar Panel had estimated the leakages in PDS at 46 per cent.

The Modi government has introduced PoS machines and weeded out some fake ration cards. But leakages continue — rough estimates put it at 30-40 per cent. Fair price shop (FPS) owners are much smarter than the government. Leakages can be reduced if the issue price is linked to say 50 to 75 per cent of the MSP. If the Modi government can do this, not only will it result in massive efficiency and equity but ensure sustainability as well.

Now, look at the fertiliser subsidy. The FM has allocated Rs 80,000 crore for fertilisers in the budget. The fertiliser industry says that there is massive under-provisioning. The industry also claims that Rs 38,000 crore of its dues are pending with the government. With this under- provisioning, the subsidy dues will cross Rs 50,000 crore. Which industry can feel upbeat if its dues from the government pile up, year after year?

The problem is that the government does not have the will to revise the urea price, which at roughly $80 per tonne, is the lowest in the world. The average cost of production of the industry is around $250 per tonne, import parity hovers around $300 per tonne and keeps fluctuating, depending on global prices. The government has revived some almost dead plants (for example at Gorakhpur and Ramgundam) that produce urea at more than $400 per tonne.

It seems there is no economic rationale either in the pricing of urea for the farmers at $80 per tonne or producing urea, at the margin, at $400 per tonne. This is leading to large leakages and inefficient use, besides polluting the groundwater table — in fact, the environment at large. Interestingly, crops do not absorb more than 25 per cent of the urea being applied in India. So, basically, we are subsidising the pollution of the environment.

Can the Modi government rationalise these subsidies by converting them into direct cash transfers on a per hectare basis? Our back-of-the-envelope calculations show that the government can save about Rs 50,000 crore every year through such measures. The money can be invested in agri-R&D and water management. That would be the biggest reform in agri- food space

The writer is Infosys Chair Professor for Agriculture at ICRIER

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END crackIAS.comDownloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.thehindu.com Date : 2019-07-22 SUCKING UP SURPLUS: SEBI NEEDS FINANCIAL AUTONOMY TO REMAIN EFFECTIVE Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Capital Market & SEBI

The Centre’s decision to clip the wings of the Securities and Exchange Board of India has not gone down too well with its members. Yet, the Centre is refusing to budge. In a letter dated July 10, SEBI Chairman Ajay Tyagi said the Centre’s decision to suck out SEBI’s surplus funds will affect its autonomy. SEBI employees had also written to the government with the same concern. As part of the Finance Bill introduced in Parliament, the Centre had proposed amendments to the Securities and Exchange Board of India Act, 1992 that were seen as affecting SEBI’s financial autonomy. To be specific, the amendments required that after 25% of its surplus cash in any year is transferred to its reserve fund, SEBI will have to transfer the remaining 75% to the government. On Friday, the government rejected the plea from SEBI’s officials asking the government to reconsider its decision, thus paving the way for further conflict. Prima facie, there seems to be very little rationale in the government’s decision to confiscate funds from the chief markets regulator. For one, it is highly unlikely that the quantum of funds that the government is likely to receive from SEBI will make much of a difference to the government’s overall fiscal situation. So the amendment to the SEBI Act seems to be clearly motivated by the desire to increase control over the regulator rather than by financial considerations. This is particularly so given that the recent amendments require SEBI to seek approval from the government to go ahead with its capital expenditure plans.

A regulatory agency that is at the government’s mercy to run its financial and administrative operations cannot be expected to be independent. Further, the lack of financial autonomy can affect SEBI’s plans to improve the quality of its operations by investing in new technologies and other requirements to upgrade market infrastructure. This can affect the health of India’s financial markets in the long run. In the larger picture, this is not the first time that the government at the Centre has gone after independent agencies. The Reserve Bank of India and the National Sample Survey Office have come under pressure in recent months, and the latest move on SEBI adds to this worrisome trend of independent agencies being subordinated by the government. The Centre perhaps believes it can do a better job of regulating the economy by consolidating all existing powers under the Finance Ministry. But such centralisation of powers will be risky. Regulatory agencies such as SEBI need to be given full powers over their assets and be made accountable to Parliament. Stripping them of their powers by subsuming them under the wings of the government will affect their credibility.

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crackIAS.com Source : www.thehindu.com Date : 2019-07-23 PANEL FOR BAN ON CRYPTOCURRENCIES IN INDIA Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Capital Market & SEBI

“All these cryptocurrencies have been created by non-sovereigns.” The report went on to highlight the fact that crypto-currencies do not have any intrinsic value of their own and lack any of the attributes of a currency.

“Therefore, the Committee is of clear view that the private crytocurrencies should not be allowed,” the report said. “These cryptocurrencies cannot serve the purpose of a currency. The private cryptocurrencies are inconsistent with the essential functions of money/currency, hence private cryptocurrencies cannot replace fiat currencies.”

The Committee, however, leaves the door open for the central bank issued cryptocurrencies, adding that it endorsed the RBI’s stance of banning any sort of interface of cryptocurrencies with the banking system in India.

While the committee has taken a strong stance against cryptocurrencies, it has highlighted the benefits of the underlying technology— the distributed ledger technology (DLT) and blockchain. “The Committee recommends that the RBI examine the utility of using DLT based systems for enabling faster and more secure payment infrastructure,” the report said.

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crackIAS.com Source : www.thehindu.com Date : 2019-07-23 SIX REASONS WHY THE ECONOMIC SURVEY’S PRESENTATION OF MGNREGA IS MISLEADING Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

A chapter in the recent Economic Survey on the “transformational” impact of Aadhaar on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) merits scrutiny. It presents a skewed and unbalanced view of the programme’s technical interventions instead of taking a comprehensive view of the implementation. The Survey draws heavily from the Indian School of Business’s working paper titled “A Friend Indeed: Does The Use of Digital Identity Make Welfare Programs Truly Counter-Cyclical?”

A rebuttal of this working paper, published in November 2018, highlighted glaring flaws on three counts — factual, methodological and conceptual. Yet the paper has been uncritically accepted and widely cited in the Survey. This raises questions about the credibility of the Chief Economic Adviser’s (an affiliate of the ISB) office. Here are six reasons why the Economic Survey’s presentation of the MGNREGA is misleading.

Aadhaar has to be understood as merely being a pipeline for funds transfer in the MGNREGA. A lack of adequate financial allocation, pending liabilities and low wages have dogged the programme over the past eight years. About 20% of the Budget allocation in each of the last five years is of pending wage liabilities from previous years. It was worst in 2016-17, when pending liabilities were 35% (13,220 crore) out of a total allocation of 38,500 crore. MGNREGA wages in many States are about 40% lower than the Ministry of Labour’s national minimum wage. Instead of sufficiently funding MGNREGA, a legal right, in times of severe drought, there is disproportionate attention by the government towards creating a complex architecture based on technical solutions.

Second, the Economic Survey misrepresents the continuous technological interventions in the MGNREGA since its inception. Electronic funds transfer started as far back as in 2011 through the Electronic Fund Management System (eFMS), and became symbolic of the Direct Benefit Transfers (DBT). This served as the basis for the National Electronic Fund Management System (N-eFMS), introduced, in 2016. The Survey uses the term “ALP” for Aadhaar-linked payments and conflates it with the DBT by repeatedly referring to the time before 2015 as “pre-DBT” to make its claims. The conflation of terms prevents one from making an honest assessment on the effect that different interventions have had.

Third, the Survey makes strong assertions that timely payment of wages have positively impacted worker participation. To support this, the Survey makes dubious causal claims on reduction in payment delays due to the introduction of Aadhaar. However, their understanding of paymentcrackIAS.com delays is faulty.

Wage payments to MGNREGA workers happen in two stages. The first is the time taken by the blocks to generate the electronic Funds Transfer Orders (FTO) and send it digitally to the Central government. The second is the time taken by the Central government to process these FTOs and transfer wages to workers’ accounts. While it is true that delays in the first stage have reduced, those in the second stage continue to be unacceptably high. Only about 30% of the payments are credited on time; the Central government takes more than than 50 days (which is the second stage) to transfer wages to workers. The Survey only considers the delays in the first stage. Aadhaar has no role in reducing the delays in the first stage but comes into play only in the second stage. Therefore the claim in the Survey that the “ALP has positively impacted the flow of payments under the scheme” is a manipulation of facts.

Fourth, the Survey attributes an increase in demand for and supply of work in drought-affected areas to Aadhaar ignoring other crucial factors. For instance, it ignores the Supreme Court’s orders on drought (Swaraj Abhiyan vs. Union of India (2015), which coincided with the duration of the working paper’s analysis. Taking cognisance of the Court’s orders and continuing monitoring, the Ministry of Rural Development issued strict directives (between 2014 and 2017) to ensure allocation of works and on-time payment of wages.

These judicial-administrative directives, which came into effect after Aadhaar was introduced, played an important role in the increase in the MGNREGA work uptake in drought areas. Not accounting for the Court’s orders as a contributing factor in their “causal” analysis makes their findings unreliable. In fact, in Rajasthan, under the new State government, the ‘work demand’ campaign initiated in December 2018 has resulted in a 67% increase in employment generated and a record number of households having completed 100 days of work under the MGNREGA. There is a three-fold increase in employment generation in Karnataka in 2019 compared to 2018. This demonstrates how political and administrative priorities can have a strong positive impact on the programme.

Fifth, while the Survey rightfully acknowledges the nature of positive targeting of the MGNREGA — with women, Dalits and Adivasis benefitting the most — it wrongfully attributes it wholly to the introduction of Aadhaar. The argument denies the unambiguous impact of the universal access of the MGNREGA without having to meet any eligibility criteria. It is disappointing that in independent India, an official document on the state of the economy compares a constitutionally backed legal guarantee to the largesse of feudal kings. This should have been expected as the Survey misses the point that the programme was introduced as a legal right and not as an act of charity. Indeed, to this end, the Minister for Rural Development recently made an odd comment: “I am not in favour of continuing with MNREGA because it is for the poor and the government wants to eradicate poverty.”

Sixth, the Survey’s claims about the ALP identifying “ghost beneficiaries” is exaggerated as an RTI query showed that they accounted for only about 1.4% of total households in 2016-17.

The technology historian, Melvin Kranzberg, wrote, “Technology is neither good nor bad; nor is it neutral.” It is telling that the Survey completely ignores numerous instances where technology has resulted in violation of workers’ rights under the MGNREGA — some examples are not registering work demand, not paying unemployment allowance and compensation for payment delays among others. In fact,crackIAS.com another ISB study, not cited in the Economic Survey shows that 38% of the Aadhaar- based transactions in Jharkhand were diverted to a different account. Overlooking these fundamental issues, cherry-picking studies and using flawed analyses to justify technocracy is an example of ethical paralysis. While the Economic Survey harps about an ill-designed technological pipeline, the fact is that a landmark labour programme is being put on a ventilator.

Rakshita is affiliated with the Social Accountability Resource Unit. Rajendran Narayanan teaches at Azim Premji University, Bangalore

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crackIAS.com Source : www.prsindia.org Date : 2019-07-23 PRSINDIA Relevant for: Indian Economy | Topic: Infrastructure: Roads

Introduced Lok Sabha Jul 15, 2019 Gray

crackIAS.com Source : www.pib.nic.in Date : 2019-07-23 SKILL INDIA MISSION TO FARMERS Relevant for: Indian Economy | Topic: E-technology in the aid of farmers

Ministry of Skill Development and Entrepreneurship Skill India Mission to Farmers

Posted On: 22 JUL 2019 4:28PM by PIB Delhi

The National Skill Development Mission (NSDM) was launched by the Hon’ble Prime Minister on 15th July, 2015, to provide a strong institutional framework to implement and scale up skill development efforts across the country. Under this initative, the Government is implementing more than 40 skill development schemes/programmes across 20 Central Ministries/Departments, for providing a variety of skill development training programmes on pan India basis. As per the information provided by Ministries, 85.98 Lakh persons have been trained in 2018-19.

The Ministry of Skill Development and Entrepreneurship (MSDE) imparts employable skills to the youth through long term and short term training. The Ministry is implementing its flagship scheme Pradhan Mantri Kaushal Vikas Yojana 2.0 (PMKVY 2.0) on pan-India basis with a target to provide skilling to one crore people across the country in various sectors including Agriculture. Under the Centrally Sponsored Centrally Managed (CSCM) component of scheme, as on 12.06.2019, 49.10 Lakh have been trained across the country; out of which 4 lakh candidates have been trained in Rajasthan which include 5628 from Udaipur district.

Further, under Recognition of Prior Learning (RPL) component of PMKVY 2.0, up skilling of farmers have been made via bridge course training in the job roles namely organic grower, dairy farmer, pulses cultivator etc. Under this project, 12488 beneficiaries have been enrolled in the State of Rajasthan.

Long term training is imparted through Industrial Training Institutes (ITIs). There are 1808 ITIs in the State of Rajasthan with a training capacity of 3.59 lakh; out of which 21 ITIs with a seating capacity of 5,584 are in Udaipur. In addition some new trades like Internet of Things (Smart Agriculture) and Soil Testing and Crop Technician have been introduced to keep pace with Technological innovations.

This information was given in a written reply by the Minister of State for Skill Development and Entrepreneurship Shri. R. K. Singh in the Lok Sabha today. crackIAS.com *****

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crackIAS.com Source : www.prsindia.org Date : 2019-07-24 PRSINDIA Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Capital Market & SEBI

Introduced Lok Sabha Jul 19, 2019 Gray

crackIAS.com Source : www.pib.nic.in Date : 2019-07-24 BRINGING POTENTIAL BORROWERS UNDER CREDIT NET Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance Bringing Potential Borrowers under Credit Net

Posted On: 23 JUL 2019 5:45PM by PIB Delhi

As per news release dated 21.5.2018 issued by TransUnion CIBIL, a Credit Information Company, a study by the company has calculated that approximately 220 million consumers meet the target age range — from 20 to 69 — and income level of at least Rs. 2,50,000 per year, to be attractive to lenders foSr retail products. On this basis, it states that the total population of “credit-eligible” consumers in India is roughly 220 million, and further states that, of this eligible population, only about one-third — 72 million — are currently credit active, meaning that they have a live account with a bank or lending institution, while the remainder — nearly 150 million — are not currently credit active, but would meet the age and income requirements that would make them potentially attractive to lenders.

Eligibility for credit is a function of a potential borrower’s repayment capacity and creditworthiness. Repayment capacity is assessed on the basis of both income and expenditure cash flows, as well as assets and liabilities. Further, creditworthiness is reflected in the borrower’s track record in meeting credit and other payment obligations such as taxes and utility bill, as well as the borrower’s risk profile.

It is not correct to make age and income criteria as the primary basis for arriving at the figure of the potential eligible consumers for credit as credit is based on demand for it and is also dependent on the repayment capacity, applicant’s liabilities, including tax liabilities, availability of requisite details and documents to enable the bank to arrive at a decision in its commercial judgement with due regard to the technical feasibility and economic viability of the proposal and the creditworthiness of the applicant, in accordance with the bank’s Board-approved loan policy.

Government has taken a number of steps to make the credit-seeking experience hassle- free. These steps enabling more and more potential borrowers under credit net so as to boost the economy include, inter alia, the following:

i. WithcrackIAS.com the mandate of Pradhan Mantri Jan Dhan Yojana not being limited to opening deposit accounts but to also enable access to credit, banks led by PSBs have been extending credit through the overdraft facility, available under the scheme, to accountholders having satisfactory conduct of account. ii. For MSMEs, Pradhan Mantri MUDRA Yojana, for providing loans up to Rs. 10 lakh to non- corporate, non-farm small and micro enterprises, and Stand Up India scheme, for extending institutional credit system for loans between Rs. 10 lakh and Rs. 1 crore to undeserved strata of society like the Scheduled Castes and the Scheduled Tribes, and women entrepreneurs, have been successfully launched by the Government. Further, Public Sector Banks (PSBs) have taken the initiative for hassle-free and expeditious in principle approval for loans to MSMEs in contactless digital mode through the psbloansin59minutes.com platform,which private sector banks have subsequently on- boarded and all PSBs have on-boarded the Trade Receivable electronic Discounting System (TReDS) platform, enabling online discounting of trade receivables by MSMEs for faster realisation against the receivables. iii. To further improve the system of loan sanctioning and disbursement PSBs, reforms initiated by Government under PSB Reforms Agenda include, inter alia, the following:

a. For time-bound credit decision making for better turnaround time of loan proposals, comprehensive Loan Management Systems (LMS) have been put in place in banks for personal segment and MSME loans b. Decision-making layers for loan sanctioning have been rationalised and restricted to a maximum of three layers. c. Proactive reach-out and faster automated processing for personal loans have been enabled to greater use of dedicated sales channels, including digital channels, co- origination of loans in tie-up with non-banking financial companies, external partnerships and dedicated marketing workforce.

iv. For agriculture, RuPay Kisan Credit Card (KCC), a smart card cum debit card has been introduced to meet the production credit requirements of farmers in a timely and hassle- free manner. v. Vidya Lakshmi, a common web-based portal (www.vidyalakshmi.co.in), has been launched to facilitate education loans application to banks on an anytime, anywhere basis.

All these steps taken by the Government have enabled India’s rank on “Ease of getting credit” in World Bank’s Ease of Doing Business Index to improve steadily from 44 in 2016 to 22 in 2018. Further, year-on-year domestic credit growth from the banking system has risen to 13.8% as on 31.3.2019, as per RBI data.

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Rajya Sabha today.

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-24 NPAS IN SCHEDULED COMMERCIAL BANKS Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Ministry of Finance NPAs in Scheduled Commercial Banks

Posted On: 23 JUL 2019 5:39PM by PIB Delhi

As per Reserve Bank of India (RBI)’s data on global operations, aggregate gross advances of Scheduled Commercial Banks (SCBs) increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia, aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of Non-Performing Assets (NPAs). As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for. Further, all such schemes for restructuring stressed loans were withdrawn. Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of SCBs, as per RBI data on global operations, rose from Rs. 3,23,464 crore as on 31.3.2015, to Rs. 10,36,187 crore as on 31.3.2018, and as a result of Government’s 4R’s strategy of recognition, resolution, recapitalisation and reforms, have since declined by Rs. 1,02,562 crore to Rs. 9,33,625 crore as on 31.3.2019 (provisional data reported by RBI on 2.7.2019).

With regard to the number of loans transformed into NPA after 2014, RBI has informed that it does not collect data on NPAs based on the original date of sanction of loans and as such, it does not have information with reference to any particular date of disbursal.

Government has implemented a comprehensive 4R’s strategy, consisting of recognition of NPAs transparently, resolution and recovery of value from stressed accounts, recapitalising of Public Sector Banks (PSBs), and reforms in PSBs and the wider financial ecosystem for a responsible and clean system. Comprehensive steps have been taken under the 4R’s strategy to reduce NPAs of PSBs, including, inter-alia, the following: crackIAS.com i. Change in credit culture has been effected, with the Insolvency and Bankruptcy Code (IBC) fundamentally changing the creditor-borrower relationship, taking away control of the defaulting company from promoters/owners and debarring wilful defaulters from the resolution process and debarring them from raising funds from the market. ii. SARFAESI Act has been amended to make it more effective, with provision for three months’ imprisonment in case the borrower does not provide asset details, and for the lender to get possession of mortgaged property within 30 days. iii. Suits for recovery of dues are also filed by banks before DRTs. Six new DRTs have been established to expedite recovery. iv. Over the last four financial years, PSBs have been recapitalised to the extent of Rs. 3.12 lakh crore, with infusion of Rs. 2.46 lakh crore by the Government and mobilisation of over Rs. 0.66 lakh crore by PSBs themselves enabling PSBs to pursue timely resolution of NPAs. v. Key reforms have been instituted in PSBs as part of the PSBs Reforms Agenda, including the following:

Enabled by the above steps, as per RBI data on global operations, the NPAs of SCBs, after reaching a peak of Rs. 10,36,187 crore as on 31.3.2018, have declined by Rs. 1,02,562 crore to Rs. 9,33,625 crore as on 31.3.2019 (provisional data for the financial year ending March 2019), and SCBs have effected record recovery of Rs. 4,01,424 crore over the last four financial years, including record recovery of Rs. 1,56,746 crore during 2018-19 (provisional data).

This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Rajya Sabha today.

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crackIAS.com END Downloaded from crackIAS.com © Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-25 FRUIT EXPORTS Relevant for: Indian Economy | Topic: Transport & Marketing of agricultural produce

Ministry of Commerce & Industry Fruit Exports

Posted On: 24 JUL 2019 6:18PM by PIB Delhi

India’s share in world exports of fruits like apple, pear, peach, plum, apricot and cherry is very low. These fruits are grown in temperate climates and in India can be grown only in specific regions. As such, the availability of exportable surplus of these fruits as well as availability of right quality, colour, size, texture and aroma of fruits, suitable for exports, is low. Details of India’s share in world fruit exports are as under:

World export vis-à-vis India's export (Year: 2018)

Quantity in MT, Value in USD Mill.

World India India's Share in % Product Quantity Value Quantity Value (Value) Total (Fresh Fruits - HS Codes - 99,409.73 - 692.15 0.6963 0803 to 0810)) Apples 81,60,765.00 8,230.03 12,894.00 5.61 0.0682 Cherries (Sour Cherries & Other 7,98,963.00 3,569.86 14.00 0.04 0.0010 Cherries) Pears 26,37,662.00 2,831.97 2.00 0.01 0.0002 - - Peaches, Incl. Nectarines, Fresh 19,67,948.00 2,521.12 0.0000

Plums & Sloes, Fresh 7,33,294.00 996.69 86.00 0.03 0.0027 Apricots, Fresh 3,81,162.00 482.06 9.00 0.04 0.0081 Source: ITC Trade Map

For overall promotion of agricultural exports, the Government has introduced a comprehensive AgriculturecrackIAS.com Export Policy. The Agricultural & Processed Food Products Export Development Authority (APEDA), an autonomous organisation under the administrative control of the Department of Commerce, has the mandate to promote exports of fruits. APEDA provides assistance to the exporters of fruits under various component of its scheme “Agriculture & Processed Food Export Promotion Scheme of APEDA” viz. Infrastructure Development, Quality Development and Market Development. In addition, incentives are available on export of various fruits under the Merchandise Exports from India Scheme (MEIS). Assistance is also provided to exporters/state governments under various other schemes of Department of Commerce - Trade Infrastructure for Export Scheme (TIES), Transport & Marketing Assistance (TMA) Scheme and Market Access Initiative (MAI) Scheme. The details of total quantity and value of fruits exported during the last three years and the current year, fruit wise, are given below:

India's Exports of Fresh Fruits

Quantity in MT; Value in USD Million

2019-20 (Apr- 2016-17 2017-18 2018-19 May) DESCRIPTION Quantit Quantity Value Quantity Value Quantity Value Value y 198471. 205039. 246133.7 32862.9 GRAPES FRESH 267.04 303.71 334.77 44.08 30 41 7 6 POMEGRANATES 49852.0 52391.8 73.31 85.97 67891.80 98.76 5500.73 7.55 FRESH 4 2 52761.0 49671.3 MANGOES FRESH 66.46 59.45 46510.22 60.24 8954.21 14.02 0 2 110750. 102521. 134503.4 24753.4 BANANAS, FRESH 57.83 54.39 59.24 10.12 57 88 0 4 ORANGES FRESH 48111.6 37049.0 17.48 14.64 43098.28 34.62 915.50 0.24 OR DRIED 4 9 OTHER FRUITS, 38113.3 24611.8 16.46 10.95 15203.39 12.99 1512.02 1.04 FRSH 2 0 22550.0 14780.6 APPLES FRSH 9.40 7.18 16744.61 10.80 7.13 0.00 2 8 26346.3 26219.3 WATER MELONS 8.89 8.86 33366.47 9.90 2523.94 0.67 6 0 14116.8 17480.3 LEMONSAND LIMES 8.59 8.50 21121.33 6.41 1093.21 0.69 9 1 PAPAWS (PAPAYAS) 12442.7 10030.3 7.63 6.44 9785.61 5.26 1029.21 0.44 FRESH 6 9 OTHERS - 42.82 - 41.47 - 23.80 - 2.30 TOTAL 575.92 601.56 656.79 81.15

Source: DGCI&S

This information was given by the Union Minister of Commerce and Industry, PiyushGoyal, in a writtencrackIAS.com reply in the Lok Sabha today.

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crackIAS.com ndin Global Innovation Index-2019

Source : www.pib.nic.in Date : 2019-07-25 INDIA RANKED 52NDIN GLOBAL INNOVATION INDEX- 2019 Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Demographic Economics & Various Indexes

Ministry of Commerce & Industry India Ranked 52ndin Global Innovation Index-2019

Commerce & Industry Minister Releases Global Innovation Index Rankings

Posted On: 24 JUL 2019 5:45PM by PIB Delhi

Union Minister of Commerce & Industry and Railways, PiyushGoyal, launchedthe Global Innovation Index (GII) 2019 in New Delhi, today. India jumped five places to improve its position from 57th last year to 52nd in 2019.

Speaking on this occasion Commerce and Industry Minister first congratulated all those involved in the process and said that India has made a significant progress to 52nd rank in the GII-2019 and now the culture of innovation is coming to the centre-stage. He said that India will continue its efforts to reach upwards of top 50 ranks in the GII that Prime Minister, Narendra Modi set a goal. He further said that India will not rest on past laurels until it achieves its target of positioning itself among the top 25 countries of the Global Innovation Index. To achieve this ranking he urged all stakeholders to work in mission mode.

PiyushGoyal urged the R&D institutions, universities and private sector to transform the country into a hub of innovation. The Commerce and Industry Ministry requested the World Intellectual Property Organization (WIPO) to factor in India’s rural innovation as part of the innovation index in future.

Commerce and Industry Minister in his address said that the improvement in the rankings should inspire Indians to help marginalized and under privileged section of society and R&D must provide sustainable solutions to the problems that India is facing at present like rising pollution levels in cities, water crises faced in different parts of the country, depleting natural resources, issues of climate change and solving problems of food wastage. All these problems that the countrycrackIAS.com is facing should be solve through innovative ideas. The Commerce and Industry Minister further added that India must be a responsive country and work in mission mode by engaging with academia, private sector and government agencies to improve the quality of citizens’ lives even in the remotest parts of the country.

Referring to GII theme of this year which is Creating Healthy Lives - The Future of Medical Innovation, PiyushGoyal said that Government of India is focusing on not just curative but preventive healthcare where wellness becomes a part of society.

The GII rankings are published every year by Cornell University, INSEAD and the UN World Intellectual Property Organization (WIPO) and GII Knowledge Partners. This is the 12th edition of the GII rankings of 129 economies based on 80 indicators ranging from intellectual property filing rates to mobile-application creation, education spending and scientific and technical publications.

Switzerland remains number one is the GII index followed by Sweden, the United States of America, the Netherlands, the United Kingdom, Finland, Denmark, Singapore, Germany and Israel.

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(Release ID: 1580124) Visitor Counter : 445

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-25 USE OF GI LOGO Relevant for: Indian Economy | Topic: Issues relating to Intellectual Property Rights (IPRs)

Ministry of Commerce & Industry Use of GI LOGO

Posted On: 24 JUL 2019 5:21PM by PIB Delhi

Agricultural, natural or manufactured goods are registered as Geographical Indications (GI) by the Geographical Indications Registry as per the provisions of the Geographical Indications of Goods (Registration & Protection) Act, 1999.

The Government is not aware of any index by the name of International Intellectual Property (IP) Index published by any multilateral organisation. However, a private entity namely, Global Intellectual Property Centre of the U.S. Chamber of Commerce, prepares an International Intellectual Property Index, which does not provide a composite view of the IP regime in any country. The intellectual property rights indicators used in the index are selective and hence not a true reflection of the state of Intellectual Property Rights (IPR) protection and innovation in India.

India has a well-established legislative, administrative and judicial framework to safeguard IPRs, which meets its international obligations while utilizing the flexibilities provided in the international regime to address its developmental concerns. India has a Trade Related Aspects of Intellectual Property Rights (TRIPS) compliant, robust, equitable and dynamic IPR regime.

In addition, the Government of India has taken various steps to further strengthen the IPR regime of the country, some of which are as follows:

● The National IPR Policy, 2016 was adopted on 12.05.2016 as a vision document to guide future development of IPRs in the country.

● The administration of Copyright Act, 1957 and Semiconductor Integrated Circuits Layout-Design Act, 2000, along with their associated Registries, has crackIAS.combeen transferred to the Department for Promotion of Industry and Internal Trade (DPIIT).

● Subsequently, under the Finance Act, 2017, the Copyright Board has also been merged in the Intellectual Property Appellate Board.

● The Patents Rules, 2003 and the Trademarks Rules, 2002 have been amended whereby the IP processes have been re-engineered to streamline them and make them more user-friendly.

● Manpower in the Intellectual Property offices has been ramped up significantly with fresh recruitments. This augmentation of manpower has already had a salutary effect on the examination and disposal of patent and trademark applications. The examination time for trademark applications has come down from the earlier 13 months to just 1 month. The disposal of patent applications has increased by more than twofold in 2018-19 vis-à-vis 2015-16.

● IPR awareness and training programmes are held for academic institutions, industry associations and enforcement agencies.

● Special provisions have been made for startups and MSMEs.

● The Government has entered into an agreement with WIPO for establishment of Technology and Innovation Support Centers (TISC).

● The Commercial Courts set up under the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 also deal with IP disputes.

● India has acceded to a number of multilateral treaties and agreements in the past two years, such as WIPO Copyright Treaty, WIPO Performance and Phonograms Treaty, Nice Agreement concerning the international classification of goods & services for the purposes of registration of marks, the Vienna Agreement establishing an international classification of the figurative elements for marks and Locarno Agreement establishing an international classification for industrial designs.

As on 20.07.2019, 301 Indian products have been registered as GIs. The list of Indian GI products registered State-wise is given below:

List of Indian GI Products eligible for use of GI Logo:

S.NO Registered GI Products Type State 1 Guntur Sannam Chilli Agricultural Andhra Pradesh 2 Bandar Laddu Food Stuff Andhra Pradesh 3 Tirupathi Laddu Food Stuff Andhra Pradesh 4 Allagadda Stone Carving Handicraft Andhra Pradesh Andhra Pradesh Leather 5 crackIAS.comHandicraft Andhra Pradesh Puppetry 6 Bobbili Veena Handicraft Andhra Pradesh Budithi Bell & Brass Metal 7 Handicraft Andhra Pradesh Craft Dharmavaram Handloom 8 Handicraft Andhra Pradesh Pattu Sarees And Paavadas 9 Durgi Stone Carvings Handicraft Andhra Pradesh 10 Etikoppaka Toys Handicraft Andhra Pradesh 11 Kondapalli Bommalu Handicraft Andhra Pradesh 12 Machilipatnam Kalamkari Handicraft Andhra Pradesh Mangalagiri Sarees And 13 Handicraft Andhra Pradesh Fabrics 14 Sri Kalahasthi Kalamkari Handicraft Andhra Pradesh 15 Udayagiri Wooden Cutlery Handicraft Andhra Pradesh 16 Uppada Jamdani Sarees Handicraft Andhra Pradesh 17 Venkatagiri Sarees Handicraft Andhra Pradesh 18 Arunachal Orange Agricultural Arunachal Pradesh 19 Assam (Orthodox) Tea Agricultural Assam Assam Karbi Anglong 20 Agricultural Assam Ginger 21 Boka Chaul Agricultural Assam 22 Joha Rice of Assam Agricultural Assam 23 Tezpur Litchi Agricultural Assam 24 Muga Silk of Assam Handicraft Assam 25 Bhagalpuri Zardalu Agricultural Bihar 26 Katarni Rice Agricultural Bihar 27 Magahi Paan Agricultural Bihar 28 Shahi Litchi of Bihar Agricultural Bihar 29 Silao Khaja Food Stuff Bihar Applique (Khatwa) Work of 30 Handicraft Bihar Bihar 31 Bhagalpur Silk Handicraft Bihar 32 Madhubani Painting Handicraft Bihar 33 Darjeeling Tea Agricultural West Bengal Sikki Grass Products of 34 Handicraft Bihar Bihar Sujini Embroidery Work of 35 Handicraft Bihar Bihar 36 Pokkali Rice Agricultural Kerala 37 Jeeraphool Agricultural Chhattisgarh 38 Bastar Dhokra Handicraft Chhattisgarh 39 Bastar Iron Craft Handicraft Chhattisgarh 40 Bastar Wooden Craft Handicraft Chhattisgarh Champa Silk Saree And 41 Handicraft Chhattisgarh Fabrics 42 Feni Manufactured Goa 43 Bhalia Wheat Agricultural Gujarat 44 Gir Kesar Mango Agricultural Gujarat 45 crackIAS.comAgates of Cambay Handicraft Gujarat 46 Jamnagari Bandhani Handicraft Gujarat 47 Kachchh Shawls Handicraft Gujarat 48 Kutch Embroidery Handicraft Gujarat 49 Patan Patola Handicraft Gujarat 50 Sankheda Furniture Handicraft Gujarat 51 Surat Zari Craft Handicraft Gujarat 52 Tangaliya Shawl Handicraft Gujarat 53 Pethapur Printing Blocks Handicraft Gujarat 54 Rajkot Patola Handicraft Gujarat 55 Himachali Kala Zeera Agricultural Himachal Pradesh 56 Kangra Tea Agricultural Himachal Pradesh 57 Chamba Rumal Handicraft Himachal Pradesh 58 Kangra Paintings Handicraft Himachal Pradesh 59 Kinnauri Shawl Handicraft Himachal Pradesh 60 Kullu Shawl Handicraft Himachal Pradesh 61 Himachali Chulli Oil Manufactured Himachal Pradesh 62 Kolhapuri Chappal Handicraft Karnataka & Maharashtra 63 Alleppey Green Cardamom Agricultural Kerala & Tamilnadu Kerala, Karnataka & 64 Malabar Pepper Agricultural Tamilnadu Maharashtra & Madhya 65 Nagpur Orange Agricultural Pradesh Maharashtra, Gujarat, 66 Warli Painting Handicraft Dadara & Nagar Haveli, Daman Diu Punjab / Haryana / Himachal Pradesh / Delhi 67 Basmati Agricultural / Uttarkhand / Uttar Pradesh / Jammu & Kashmir Punjab, Haryana & 68 Phulkari Handicraft Rajasthan 69 Araku Valley Arabica Coffee Agricultural Andhra Pradesh & Odisha Mansooned Malabar 70 Agricultural Arabica Coffee Karnataka & Kerala Monsooned Malabar 71 Agricultural Karnataka & Kerala Robusta Coffee Telangana & Andhra 72 Banaganapalle Mangoes Agricultural Pradesh 73 Kani Shawl Handicraft Jammu & Kashmir 74 Kashmir Paper Mache Handicraft Jammu & Kashmir 75 Kashmir Pashmina Handicraft Jammu & Kashmir Jammu & Kashmir 76 Kashmir Sozani Craft Handicraft

Kashmir Walnut Wood 77 Handicraft Jammu & Kashmir Carving Kashmiri Hand Knotted 78 Handicraft Jammu & Kashmir Carpet 79 crackIAS.comKhatamband Handicraft Jammu & Kashmir 80 Appemidi Mango Agricultural Karnataka Bababudangiris Arabica 81 Agricultural Karnataka Coffee 82 Bangalore Blue Grapes Agricultural Karnataka 83 Bangalore Rose Onion Agricultural Karnataka 84 Byadagi Chilli Agricultural Karnataka 85 Chikmagalur Arabica Coffee Agricultural Karnataka 86 Coorg Arabica Coffee Agricultural Karnataka 87 Coorg Green Cardamom Agricultural Karnataka 88 Coorg Orange Agricultural Karnataka 89 Devanahalli Pomello Agricultural Karnataka 90 Hadagali Malligae Agricultural Karnataka 91 Kamalapur Red Banana Agricultural Karnataka 92 Mysore Betel Leaf Agricultural Karnataka 93 Mysore Malligae Agricultural Karnataka 94 Nanjanagud Banana Agricultural Karnataka 95 Sirsi Supari Agricultural Karnataka 96 Udupi Malligae Agricultural Karnataka 97 Udupi Mattu Gulla Brinjal Agricultural Karnataka 98 Dharwad Pedha Food Stuff Karnataka 99 Bidriware Handicraft Karnataka Channapatna Toys And 100 Handicraft Karnataka Dolls 101 Ganjifa Cards of Mysore Handicraft Karnataka 102 Guledgudd Khana Handicraft Karnataka 103 Ilkal Sarees Handicraft Karnataka 104 Karnataka Bronzeware Handicraft Karnataka 105 Kasuti Embroidery Handicraft Karnataka 106 Kinhal Toys Handicraft Karnataka 107 Molakalmuru Sarees Handicraft Karnataka 108 Mysore Rosewood Inlay Handicraft Karnataka 109 Mysore Silk Handicraft Karnataka 110 Mysore Traditional Paintings Handicraft Karnataka 111 Navalgund Durries Handicraft Karnataka 112 Sandur Lambani Embroidery Handicraft Karnataka 113 Udupi Sarees Handicraft Karnataka 114 Mysore Agarbathi Manufactured Karnataka 115 Mysore Sandal Soap Manufactured Karnataka 116 Mysore Sandalwood Oil Manufactured Karnataka 117 Central Travancore Jaggery Agricultural Kerala Chengalikodan Nendran Kerala 118 Agricultural Banana Marayoor Jaggery 119 Agricultural Kerala (Marayoor Sharkara) 120 Navara Rice Agricultural Kerala 121 Nilambur Teak Agricultural Kerala 122 Palakkadan Matta Rice Agricultural Kerala 123 Vazhakulam Pineapple Agricultural Kerala 124 crackIAS.comWayanaad Robusta Coffee Agricultural Kerala Wayanad Gandhakasala 125 Agricultural Kerala Rice 126 Wayanad Jeerakasala Rice Agricultural Kerala 127 Alleppey Coir Handicraft Kerala Aranmula Kannadi 128 Handicraft Kerala (Aranmula Metal Mirror) Balaramapuram Sarees And 129 Handicraft Kerala Fine Cotton Fabrics 130 Brass Broidered Coconut Handicraft Kerala Shell Crafts of Kerala Cannanore Home 131 Handicraft Kerala Furnishings Chendamangalam Dhoties 132 Handicraft Kerala & Set Mundu 133 Kasaragod Sarees Handicraft Kerala Kuthampully Dhoties & Set 134 Handicraft Kerala Mundu 135 Kuthampully Sarees Handicraft Kerala 136 Maddalam of Palakkad Handicraft Kerala 137 Payyannur Pavithra Ring Handicraft Kerala 138 Screw Pine Craft of Kerala Handicraft Kerala 139 Kaipad Rice Agricultural Kerala 140 Ratlami Sev Food Stuff Madhya Pradesh Bagh Prints of Madhya 141 Handicraft Madhya Pradesh Pradesh Bell Metal Ware of Datia and 142 Handicraft Madhya Pradesh Tikamgarh 143 Chanderi Sarees Handicraft Madhya Pradesh 144 Leather Toys of Indore Handicraft Madhya Pradesh Maheshwar Sarees & 145 Handicraft Madhya Pradesh Fabrics Jhabua Kadaknath Black 146 Manufactured Madhya Pradesh Chicken Meat 147 Ajara Ghansal Rice Agricultural Maharashtra 148 Alphonso Agricultural Maharashtra 149 Ambemohar Rice Agricultural Maharashtra 150 Beed Custard Apple Agricultural Maharashtra 151 Bhiwapur Chilli Agricultural Maharashtra 152 Dahanu Gholvad Chikoo Agricultural Maharashtra 153 Jalgaon Banana Agricultural Maharashtra 154 Jalgaon Bharit Brinjal Agricultural Maharashtra Maharashtra 155 Jalna Sweet Orange Agricultural

156 Kolhapur Jaggery Agricultural Maharashtra 157 Lasalgaon Onion Agricultural Maharashtra 158 Mahabaleshwar Strawberry Agricultural Maharashtra 159 Mangalwedha Jowar Agricultural Maharashtra 160 Marathwada Kesar Mango Agricultural Maharashtra 161 crackIAS.comNashik Grapes Agricultural Maharashtra 162 Navapur Tur Dal Agricultural Maharashtra 163 Purandar Fig Agricultural Maharashtra 164 Sangli Raisins Agricultural Maharashtra 165 Sangli Turmeric Agricultural Maharashtra Sindhudurg & Ratnagiri 166 Agricultural Maharashtra Kokum 167 Solapur Pomegranate Agricultural Maharashtra 168 Vengurla Cashew Agricultural Maharashtra 169 Waghya Ghevada Agricultural Maharashtra 170 Waigaon Turmeric Agricultural Maharashtra Karvath Kati Sarees And 171 Handicraft Maharashtra Fabrics 172 Paithani Sarees And Fabrics Handicraft Maharashtra 173 Puneri Pagadi Handicraft Maharashtra 174 Solapur Chaddar Handicraft Maharashtra 175 Solapur Terry Towel Handicraft Maharashtra 176 Nashik Valley Wine Manufactured Maharashtra 177 Kachai Lemon Agricultural Manipur 178 Moirang Phee Handicraft Manipur 179 Shaphee Lanphee Handicraft Manipur 180 Wangkhei Phee Handicraft Manipur 181 Khasi Mandarin Agricultural Meghalaya 182 Memong Narang Agricultural Meghalaya 183 Mizo Chilli Agricultural Mizoram 184 Naga Mircha Agricultural Nagaland 185 Chakhesang Shawl Handicraft Nagaland 186 Naga Tree Tomato Agricultural Nagaland 187 Ganjam Kewda Flower Agricultural Odisha 188 Kandhamal Haladi Agricultural Odisha Berhampur Patta (Phoda 189 Handicraft Odisha Kumbha) Saree & Joda 190 Bomkai Saree & Fabrics Handicraft Odisha Dhalapathar Parda & 191 Handicraft Odisha Fabrics 192 Gopalpur Tussar Fabrics Handicraft Odisha 193 Habaspuri Saree & Fabrics Handicraft Odisha 194 Khandua Saree And Fabrics Handicraft Odisha 195 Konark Stone Carving Handicraft Odisha 196 Kotpad Handloom Fabric Handicraft Odisha 197 Orissa Ikat Handicraft Odisha 198 Orissa Pattachitra Handicraft Odisha 199 Pipli Applique Work Handicraft Odisha Sambalpuri Bandha Saree & 200 Handicraft Odisha Fabrics 201 Ganjam Kewda Rooh Manufactured Odisha Tirukanur Papier Mache 202 Handicraft Pondicherry Craft 203 Villianur Terracotta Works Handicraft Pondicherry 204 crackIAS.comBikaneri Bhujia Food Stuff Rajasthan 205 Bagru Hand Block Print Handicraft Rajasthan 206 Blue Pottery of Jaipur Handicraft Rajasthan 207 Kathputlis of Rajasthan Handicraft Rajasthan 208 Kota Doria Handicraft Rajasthan 209 Molela Clay Work Handicraft Rajasthan 210 Pokaran Pottery Handicraft Rajasthan Sanganeri Hand Block 211 Handicraft Rajasthan Printing 212 Thewa Art Work Handicraft Rajasthan 213 Makrana Marble Natural Rajasthan 214 Sikkim Large Cardamom Agricultural Sikkim 215 Eathomozhy Tall Coconut Agricultural Tamil Nadu Erode Manjal (Erode 216 Agricultural Tamil Nadu Turmeric) 217 Nilgiri (Orthodox) Agricultural Tamil Nadu 218 Sirumalai Hill Banana Agricultural Tamil Nadu 219 Virupakshi Hill Banana Agricultural Tamil Nadu 220 Arani Silk Handicraft Tamil Nadu 221 Bhavani Jamakkalam Handicraft Tamil Nadu 222 Chettinad Kottan Handicraft Tamil Nadu 223 Kancheepuram Silk Handicraft Tamil Nadu 224 Kovai Kora Cotton Sarees Handicraft Tamil Nadu 225 Madurai Sungudi Handicraft Tamil Nadu Mahabalipuram Stone 226 Handicraft Tamil Nadu Sculpture Nachiarkoil Kuthuvilakku 227 Handicraft Tamil Nadu (“Nachiarkoil Lamp”) Pattamadai Pai 228 Handicraft Tamil Nadu (“Pattamadai Mat”) 229 Salem Fabric Handicraft Tamil Nadu Salem Silk know as Salem 230 Handicraft Tamil Nadu Venpattu 231 Swamimalai Bronze Icons Handicraft Tamil Nadu Temple Jewellery of 232 Handicraft Tamil Nadu Nagercoil 233 Thanjavur Art Plate Handicraft Tamil Nadu 234 Thanjavur Doll Handicraft Tamil Nadu 235 Thanjavur Painting Handicraft Tamil Nadu 236 Thanjavur Veenai Handicraft Tamil Nadu 237 Thirubuvanam Silk Sarees Handicraft Tamil Nadu 238 Toda Embroidery Handicraft Tamil Nadu 239 Coimbatore Wet Grinder Manufactured Tamil Nadu 240 East India Leather Manufactured Tamil Nadu 241 Madurai Malli Agricultural Tamil Nadu 242 Hyderabad Haleem Food Stuff Telangana 243 Adilabad Dokra Handicraft Telangana 244 Cheriyal Paintings Handicraft Telangana 245 Gadwal Sarees Handicraft Telangana Narayanpet Handloom 246 crackIAS.comHandicraft Telangana Sarees 247 Nirmal Furniture Handicraft Telangana 248 Nirmal Paintings Handicraft Telangana 249 Nirmal Toys and Craft Handicraft Telangana 250 Pembarthi Metal Craft Handicraft Telangana 251 Pochampally Ikat Handicraft Telangana 252 Siddipet Gollabama Handicraft Telangana 253 Silver Filigree of Karimnagar Handicraft Telangana 254 Warangal Durries Handicraft Telangana 255 Tripura Queen Pineapple Agricultural Tripura 256 Allahabad Surkha Guava Agricultural Uttar Pradesh 257 Kalanamak Rice Agricultural Uttar Pradesh Mango Malihabadi 258 Agricultural Uttar Pradesh Dusseheri Banaras Metal Repousse 259 Handicraft Uttar Pradesh Craft Varanasi Soft Stone Jali 260 Handicraft Uttar Pradesh Work 261 Agra Durrie Handicraft Uttar Pradesh Banaras Brocades And 262 Handicraft Uttar Pradesh Sarees Banaras Gulabi Meenakari 263 Handicraft Uttar Pradesh Craft 264 Farrukhabad Prints Handicraft Uttar Pradesh 265 Firozabad Glass Handicraft Uttar Pradesh 266 Ghazipur Wall Hanging Handicraft Uttar Pradesh Hand Made Carpet of 267 Handicraft Uttar Pradesh Bhadohi 268 Kanpur Saddlery Handicraft Uttar Pradesh 269 Khurja Pottery Handicraft Uttar Pradesh 270 Lucknow Chikan Craft Handicraft Uttar Pradesh 271 Lucknow Zardozi Handicraft Uttar Pradesh 272 Mirzapur Handmade Dari Handicraft Uttar Pradesh 273 Moradabad Metal Craft Handicraft Uttar Pradesh 274 Nizamabad Black Pottery Handicraft Uttar Pradesh 275 Saharanpur Wood Craft Handicraft Uttar Pradesh 276 Varanasi Glass Beads Handicraft Uttar Pradesh Varanasi Wooden 277 Handicraft Uttar Pradesh Lacquerware & Toys 278 Kannauj Perfume Manufactured Uttar Pradesh 279 Meerut Scissors Manufactured Uttar Pradesh 280 Chunar Balua Patthar Natural Uttar Pradesh 281 Uttarakhand Tejpatta Agricultural Uttarakhand 282 Gobindobhog Rice Agricultural West Bengal 283 Malda Fazli Mango Agricultural West Bengal Malda Khirsapati (Himsagar) 284 Agricultural West Bengal Mango 285 Malda Laxman Bhog Mango Agricultural West Bengal 286 crackIAS.comTulaipanji Rice Agricultural West Bengal 287 Banglar Rasogolla Food Stuff West Bengal 288 Bardhaman Mihidana Food Stuff West Bengal 289 Bardhaman Sitabhog Food Stuff West Bengal 290 Bengal Dokra Handicraft West Bengal 291 Baluchari Saree Handicraft West Bengal Bankura Panchmura 292 Handicraft West Bengal Terracotta Craft 293 Bengal Patachitra Handicraft West Bengal 294 Dhaniakhali Saree Handicraft West Bengal 295 Joynagar Moa Food Stuff West Bengal 296 Madurkathi Handicraft West Bengal 297 Nakshi Kantha Handicraft West Bengal 298 Purulia Chau Mask Handicraft West Bengal 299 Santiniketan Leather Goods Handicraft West Bengal 300 Santipore Saree Handicraft West Bengal Wooden Mask of 301 Handicraft West Bengal Kushmandi

This information was given by the Union Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Lok Sabha today.

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(Release ID: 1580111) Visitor Counter : 374

crackIAS.com Source : www.pib.nic.in Date : 2019-07-26 REVISION OF LOAN LIMIT IN MSME SECTOR RECOMMENDED Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Micro,Small & Medium Enterprises Revision of Loan Limit in MSME Sector Recommended

Posted On: 25 JUL 2019 4:34PM by PIB Delhi

A Committee constituted by Reserve Bank of India (RBI) has submitted its Report to the RBI wherein it has been recommended that the limit for collateral free lending should be increased to Rs.20 lakh for MSMEs and Self-Help Groups (SHGs). The Committee has also recommended revision of loan limit sanctioned under MUDRA to Rs.20 lakh from Rs.10 lakh.

This information was given by Shri Nitin Gadkari, Union Minister for Micro, Small and Medium Enterprises in written reply to a question in Lok Sabha today.

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(Release ID: 1580275) Visitor Counter : 297

Read this release in: Urdu , Marathi

END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.prsindia.org Date : 2019-07-26 PRSINDIA Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Banking, NPAs and RBI

Introduced Rajya Sabha Jul 24, 2019

crackIAS.com Source : www.hindustantimes.com Date : 2019-07-26 RECONSIDER SOVEREIGN EXTERNAL BORROWING Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

According to a Bloomberg report, the Government of India is planning to raise $10 billion in its first overseas bond sale by October. The decision to resort to this route for raising capital was announced in the budget earlier this month. While the initial offerings might be for euro or yen- denominated bonds, dollar offerings have not been ruled out. There are both pros and cons of using this route to raise capital.

The biggest benefit of such bonds is that interest rates in international markets are much lower than domestic markets. Such borrowing also does not lead to the government crowding out the private sector from a finite, and decelerating, pool of domestic savings. The biggest risk is that such borrowings have an in-built unpredictability because of foreign exchange movements. Because the debt has to be repaid in foreign currency out of domestic resources, a depreciation in the Indian rupee vis-à-vis the currency in which the debt is denominated can lead to a spike in domestic debt burden. Given the sovereign guarantee, it will have to be repaid at all costs, unlike a corporate loan, which need not be paid in case of bankruptcy. An unforeseen disruption in global markets in the future can derail the calculations which form the basis of taking any such debt in the present.

It is because of these downside risks that a wide gamut of economists and policy makers, including three former governors of the Reserve Bank of India, have advised against this route to raise investible resources. The cautionary voices also include economists who are a part of the Prime Minister’s Economic Advisory Council. These are people whose service and allegiance to the best interests of the Indian economy are beyond doubt. Even the Swadeshi Jagran Manch has spoken against this plan. Therefore, it is necessary that the government engages with these voices and tweaks its policy decision to allay their concerns. Any such decision will not be seen as a sign of political weakness, but a rational decision to heed to wise counsel within the country. It is in our best interests to continue avoiding riskier forms of engagement with the global economy.

First Published: Jul 25, 2019 20:08 IST

END Downloaded from crackIAS.com crackIAS.com© Zuccess App by crackIAS.com Source : www.pib.nic.in Date : 2019-07-27 INTEGRATED SCHEME FOR DEVELOPMENT OF SILK INDUSTRY Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Ministry of Textiles Integrated Scheme for Development of Silk Industry

Posted On: 26 JUL 2019 5:50PM by PIB Delhi

Under the Central Sector Scheme Silk Samagra an Integrated Scheme for Development of Silk Industry (ISDSI) implemented by Government of India through Central Silk Board (CSB) with a total outlay of Rs. 2161.68 crore for three years (2017-18 to 2019-20) for the overall development of silk industry in the Country with an objective to scale up production by improving the quality and productivity. The scheme comprises four major components viz. (i) Research & Development, Training, Transfer of Technology and Information Technology Initiatives, (ii) Seed Organizations, (iii) Coordination and Market Development and (iv) Quality Certification Systems (QCS) / Export Brand Promotion and Technology Up- gradation.

Features of the Scheme

All the four major components of Silk Samagra are interlinked with each other and aimed at a common goal. The main objective of the scheme is to maintain Breeders stock, Breed improvement through R&D Projects, Development of mechanized practices, Technology translation through Sericulture Information Linkages and Knowledge System (SILKS) Portal, Mobile Application for Stakeholders and for seed quality monitoring, develop technology packages, impart training on improved technology programmes to Stakeholders, and transfer technology to the field through front line demonstration, produce Basic & Commercial Seed of the improved Silkworm breeds developed by the Research Institutes, encourage Private Partnership in Seed sector, and Maintain & Certify the quality standards set by the R&D units for Silkworm Seed, Cocoon, Raw Silk and Silk products covering the entire Silk valuecrackIAS.com chain.

Major Interventions:

1. Research & Development: Race improvement through development of improved host plant varieties and improved disease resistant Silkworm breeds through collaborative research with reputed National Research organizations like IITs, CSIR, IISc and International research institutes on Sericulture.

2. Seed organisation: Seed production units will be strengthened to bring in quality standards in production network, besides increasing the production capacity to cater to the increased silk production target, promote adopted seed rearers to generate quality seed cocoons, Private Graineurs to produce quality seed and Chawki Rearing Centres (CRCs) with Incubation facilities to produce and supply chawki worms,

3. Quality Certification /Brand Promotion: Promote Indian silk through quality certification by Silk Mark not only in the domestic market but also in the Export market. Besides, emphasis has been given for use of Silkworm by-products (pupa) for Poultry feed, Sericin for Cosmetic Applications and Product Diversification into non-woven fabrics, Silk Denim, Silk Knit etc. for value addition.

The scheme also comprises of various beneficiary oriented components to support Mulberry, Vanya and Post Cocoon Sectors. These interventions cover the major areas viz. (a) Development and expansion of host plant, (b) Strengthening and creation of Silkworm seed Multiplication infrastructure, (c) Development of farm and post-cocoon infrastructure, (d) Up-gradation of reeling and processing technologies in Silk, and (e) Capacity Building through Skill development / Enterprise Development Programme.

The above scheme interventions are expected to increase /improve the production and productivity of silk. The details of expected outcome of the scheme are as under:

● Increase the Silk production from the level of 30,348 MTs (Metric Tonne) during 2016- 17 to 38,500 MTs by end of 2019-20, crackIAS.com

● Increase the production of Bivoltine Import Substitute Silk to 8500 MTs from 5266 MTs in 2016-17

● Increasing Vanya Raw Silk production to 11,500 MTs from 9075 in 2016-17 MTs.

● To produce International Grade Silk of 4A and above to minimize the import to bare minimum.

● To generate additional employment to about 15 lakh person by reaching 100 lakh persons by end of March,2020 from the level of 85.10 lakh persons in 2016- 17.

The details of funds sanctioned/ allocated and utilized under “Silk Samagra” scheme during the years 2017-18, 2018-19 and 2019-20 in the country including Tamil Nadu are given below:

(Rs. in crore)

2017-18 2018-19 2019-20 Sanctione Sanction Utilized Sanctione d/ Utilized ed/ Utilized (Till date, d/allocated allocated allocated 2019) 542.50 542.50 601.29 598.70 730.00 182.50

The details of funds released in respect of Tamil Nadu State under “Silk Samagra” towards implementation of various beneficiary oriented components during 2017-18 and 2018-19 are given below:

State 2017-18 2018-19 Tamil Nadu (Rs. in lakh) 1110.44 622.42

82562 villages under 455 districts in 26 silk producing states have been covered under the scheme “Silk Samagra”. crackIAS.com Sericulture is an agro-based cottage industry having huge employment and income generating potential in rural and semi-urban areas. It is estimated that sericulture industry provides employment to approximately 91.20 lakh persons (including 3.40 lakh persons in the State of Tamil Nadu) in rural and semi-urban areas in the country as of March-2019. Of these, a sizeable number of workers belong to the economically weaker sections of society, including women. This is mainly due to implementation of Government schemes and efforts made by State/ Central Government.

The main aim of “Silk Samagra” Scheme is to empower downtrodden, poor & backward tribal families through various activities of sericulture in the country including women. Women constitute over 60% of those employed in down-stream activities of sericulture like mulberry garden management, leaf harvesting and silkworm rearing etc. Even silk reeling industry including weaving is largely supported by them. An average of 30% women beneficiaries are being covered under the “Silk Samagra”. Women SHGs are involved in implementation of various beneficiary oriented components under “Silk Samagra” specially group activities. Through beneficiary oriented components of the scheme, support has been extended under Tribal Sub Plan (TSP) to take up sericulture activities by tribal for their livelihood. The scheme as employment provider tool improved the living standards and economic conditions of the downtrodden, poor, backward & tribal families by supporting to take up various sericulture activities for their livelihood.

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in a written reply in the Lok Sabha today.

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END Downloaded from crackIAS.com © Zuccess App by crackIAS.com crackIAS.com Source : www.pib.nic.in Date : 2019-07-27 MUGA YARNS Relevant for: Indian Economy | Topic: Major Crops, Cropping Patterns and various Agricultural Revolutions

Ministry of Textiles Muga Yarns

Posted On: 26 JUL 2019 5:47PM by PIB Delhi

For Conservation of Muga in natural habitat, under Integrated Sericulture Development Project (ISDP) of North East Region Textile Promotion Scheme (NERTPS), the Government of India has approved a project on conservation of Muga in natural habitat in Assam, Arunachal Pradesh, Bodoland Territorial Council (BTC) and Meghalaya. Memorandum of Understanding (MoU) has been signed between Forest Department, State Sericulture Department and Central Muga and Eri Research & Training Institute (CMER&TI), CSB, Lahdoigarh, Jorhat. The scheme is being implemented in the following areas:

1. Upper Doigrung Wild Life area, KarbiAnglong / Golaghat, Assam 2. Kuklung Reserve Forest range for muga ex-situ conservation site in BTC 3. Mebo Reserve Forest, Pasighat Forest Division, Pasighat in Arunachal Pradesh 4. Bagmara Reserve forest, Balpakram National Park, and Tura Peak in Meghalaya

Assistance is also provided to these States to identify and develop pockets in the forest for intensive plantations of different food plants of the Muga silkworm and to build the population in wild habitat for their use in breeding programmes and replenishment of stocks at P4 level of Basic Seed Multiplication. CSB’s Research & Development Institute, Central Muga and Eri Research & Training Institute at Lahdoigarh, Jorhat, Assam has come out with user friendly technologies viz., biological control of uzi fly, Lahdoi- disinfectant andmother moth examination & egg surface sterilization to ensure disease freeness of the progeny.Under North-East Region Textile Promotion Scheme (NERTPS), the beneficiaries have been supported with critical inputs for disease management through Departments of Sericulture of NE states. Two P4units, five P3units for production of basic silkworm seed and one Muga Silkworm Seed Production Centre have been established for the production of commercial mega silkworm seed under the reorganized Muga Silkworm Seed Organization (MSSO) of CSB.

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in a written reply in the Lok Sabha today. crackIAS.com ***

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crackIAS.com Source : www.pib.nic.in Date : 2019-07-27 AMBEDKAR HASTSHILP VIKAS YOJANA Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

Ministry of Textiles Ambedkar Hastshilp Vikas Yojana

Posted On: 26 JUL 2019 5:41PM by PIB Delhi

The Government launched the Ambedkar Hastshilp Vikas Yojana (AHVY) in the year 2001-2002 with a view to mobilize the artisans into Self Help Groups thrift and credit, training of Self Help Groups on various aspects of forming and running the community business enterprises for self sustainability of artisans. The salient features of the Yojana are as follows:-

1. Ambedkar Hastshilp Vikas Yojana (Base Line Survey & Mobilization of Artisans) 2. Design & Technology Upgradation 3. Human Resource Development 4. Direct Benefit to Artisans 5. Infrastructure and Technology Support 6. Research and Development 7. Marketing Support & Services

During this current financial year (2019-20), the Government has taken initiative to organize campaign to educate cluster artisans about the scope of producer company, its importance for long term sustainable business development for the cluster and motivate prospective artisans/Self Help Groups members to form producer companies in various cluster areas across the country.

The Government has identified and adopted 90 clusters across the country which will also cover aspirational districts, women clusters, weaker section and export potential clusters.crackIAS.com The objective is to transform these clusters in a time period of 3 years by ensuring self-sustainment of the Self Help Groups/artisans of these clusters.

In addition to the above, the Government organized Hastkala Sahyog Shivirs at more than 300 places all over the country for providing Aadhaar linked Pahchan card, marketing facilities, facilitating to artisans through Mudra loan and enrolment of artisans under Pradhan Mantri Jeeven Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Aam Aadmi Bima Yojana for the welfare of artisans during the Hastkala Sahyog Shivirs.

The details of funds provided during the last three years, State/UT- wise under the scheme is given in Annexure-I.

Annexure - I

State/UT wise data of fund sanctioned and artisans benefitted under Ambedkar Hastshilp Vikas Yojana (AHVY) (Rs. In Lakhs) 2016-17 2017-18 2018-19 S.No. State FundArtisans FundArtisans FundArtisans Sanction Benefitte Sanction Benefitte Sanction Benefitte ed d ed d ed d Andaman 1 & 0.00 0 0.00 0 16.40 800 Nicobar Andhra 2 8.92 550 0.00 0 18.05 2050 Pradesh Arunacha 3 52.88 1190 34.86 140 4.50 1500 l Pradesh 4 Assam 304.88 17235 350.94 6021 119.87 940 5 Bihar 62.06 983 52.43 1880 21.45 1100 Chhattisg 6 98.79 2840 9.60 60 15.45 120 arh 7 Delhi 0.00 0 4.50 530 3.50 700 8 Goa 13.30 530 0.00 0 0.00 0 9 Gujarat 150.17 12150 613.17 10010 259.15 2020 10 Haryana 44.79 1030 9.45 60 0.00 0 Himachal 11 42.95 1340 4.50 530 16.17 290 crackIAS.comPradesh 12 J & K 187.82 9870 161.14 5090 1.50 500 Jharkhan 13 1.78 600 0.00 0 0.00 0 d Karnatak 14 14.50 850 0.00 0 0.00 0 a 15 Kerala 32.47 600 18.60 1120 0.00 0

16 Madhya 325.58 15592 168.26 8895 101.25 1710 Pradesh Maharas 17 91.81 2880 8.00 600 28.77 1580 htra 18 Manipur 283.67 24884 122.64 4460 42.07 300 Meghalay 19 0.00 0 0.00 0 0.90 300 a 20 Mizoram 54.61 1630 0.00 0 0.00 0 21 Nagaland 60.74 1250 4.80 30 0.00 0 22 Orissa 21.02 2250 69.81 2740 15.45 120 Pondiche 23 0.00 0 0.00 0 0.00 0 rry 24 Punjab 86.86 1930 64.12 360 26.95 390 Rajastha 25 140.57 3780 17.52 1560 6.73 230 n 26 Sikkim 0.00 0 0.00 0 0.00 0 Telangan 27 0.00 0 11.10 560 2.10 700 a Tamil 28 0.60 200 0.00 0 0.00 0 Nadu 29 Tripura 53.20 2500 4.72 30 0.00 0 Uttar 30 322.38 18140 262.76 17150 228.50 2870 Pradesh Uttarakha 31 32.23 1380 76.08 3810 19.45 520 nd West 32 10.19 50 1.50 500 0.00 0 Bengal Total 2498.84 126234 2070.53 66136 948.23 18740

This information was given by the Union Minister of Textiles, Smriti Zubin Irani, in a writtencrackIAS.com reply in the Lok Sabha today. ***

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crackIAS.com Source : www.prsindia.org Date : 2019-07-27 PRSINDIA Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Industry & Services Sector incl. MSMEs and PSUs

Introduced Lok Sabha Jul 25, 2019

crackIAS.com Source : www.thehindu.com Date : 2019-07-29 GOVERNING INDIA THROUGH FISCAL MATH Relevant for: Indian Economy | Topic: Issues relating to Growth & Development - Public Finance, Taxation & Black Money incl. Government Budgeting

While it is important for a government to pursue a sound economic policy, including management of the public finances, it is yet another matter to make a fetish of any one aspect of it. The latter appears to govern this government’s approach to policy when the fiscal deficit is given pride of place in its self-assessment. Not only is this unlikely to yield results on its own, it is not even necessarily prudent.

Soon after the Budget for 2019-20 was presented, one of the Finance Minister’s predecessors remarked that “fiscal prudence rewards economies”. This was perhaps issued both as praise for the Budget itself and as a justification of the approach taken during his own tenure. Though a concern for the size of the fiscal deficit would have been inevitable since the enactment of the Fiscal Responsibility and Budget Management Bill in 2003, and has therefore been on the radar of political parties of all persuasions at the Centre, it has been raised to special significance since 2014. It figured in the most recent Economic Survey, and its anticipated magnitude for 2019-20 was the final statement in the Budget speech that had followed. The Finance Minister had commenced the speech saying how the government was committed to fiscal discipline.

In the context, “fiscal discipline” is understood as taking the economy towards the 3% of the gross domestic product. The basis for this figure can be queried but that is beside the point. Actually, the point is two fold: whether the fiscal deficit should be the sole index of fiscal management and what a reduction in the deficit would achieve. To suggest that fiscal prudence rewards economies is to suggest both that the fiscal deficit is the right indicator of fiscal soundness and that reducing it is bountiful.

While a sound fiscal policy is highly desirable, the magnitude of the fiscal deficit is not always and everywhere — think here of the state of the economy — a good measure of soundness. First, the fiscal deficit reflects the overall imbalance in the Budget. Embedded in the accounts of the government is the revenue account which is a statement of current receipts and expenditure. A fiscal deficit may or may not contain within it a deficit on the revenue account, termed the “revenue deficit”. The possible embeddedness of a revenue deficit within a fiscal deficit muddies the waters somewhat. For movements in the overall, or fiscal, deficit by itself tell us nothing about what is happening to the revenue deficit. Why should we worry, one might ask. We worry because it is the balance on the revenue deficit that indicates whether the government is saving out of its income or spending more than it receives as current revenue. A revenue deficit implies that the government is dissaving.

A fiscal deficit co-terminus with a revenue deficit is to be frowned upon as it implies that at least somecrackIAS.com part of the borrowing is to finance current consumption, something a government ought prudently to avoid, at least for long. Therefore, unless the revenue deficit is kept explicitly in the picture, we cannot deduce the soundness of economic management from a mere reduction in the fiscal deficit. In fact, in the Budget for 2019-20, while the fiscal deficit projected is marginally lower than earlier, the revenue deficit is projected to rise. Even though the magnitude of the changes is minuscule, their direction calls into question the Finance Minister’s claim that the government is committed to fiscal discipline. It is yet another instance when the fiscal deficit can end up being no more than window dressing. While a pathological adherence to a revenue account balance is itself avoidable, a steady revenue deficit as the fiscal deficit shrinks makes a mockery of fiscal consolidation. Worse still it is open to the interpretation that the exercise is ideological in that it aims only to shrink the size of government, fiscal prudence be damned. A detour through history would help bring some perspective here. A revenue deficit of the Central government is relatively recent, having been virtually non-existent till the 1980s. After that a rampant populism has taken over all political parties, reflected in revenue deficits accounting for over two thirds of the fiscal deficit such as the case today. Revenue deficits have become structural in India by now. This has three implications: that the public debt is only bound to rise; we are permanently borrowing to consume, and leaving it to future generations to inherit the debt. While the populism referred to is not the monopoly of any one political party, it is particularly stark in the case of the present one which relentlessly flags its virtue in lowering the fiscal deficit.

We can see the hollowness of the claim that fiscal consolidation or the shrinking of the fiscal deficit is always and everywhere prudent, for the issue is what is happening to the revenue deficit. Now onto the former Finance Minister’s claim that “it rewards” economies. This government has lowered the fiscal deficit alright, though not as much as the United Progressive Alliance government, but the rewards are yet to be seen. Export growth has slowed and the unemployment rate has risen. Even private investment has not soared, an outcome predicted following the claim that government borrowing “crowds out” private investment.

Of late an entirely new dimension has been added to fiscal management, but here again the appropriateness of conducting economic policy by reference to the magnitude of the fiscal deficit remains the issue. In the last Budget the government has signalled its intention to borrow in foreign currency from the international market. This is an innovation alright as the Government of India has so far never borrowed in the international markets, leaving it to public sector organisations and the private corporate sector to do so.

In the Budget speech of the 17th Lok Sabha, the Finance Minister justified the move in terms of the very low share of foreign debt to GDP. The proposal has received criticism, some of it focussing on the consequences of exchange rate volatility. Benefits have been flagged too, such as that Indian sovereign bonds will attract a lower risk premium because the price of the foreign- currency-denominated sovereign bond will now be discoverable. This though ignores the biggest lesson from the global financial crisis of 2007, that the market cannot be relied upon to price risk correctly. And, both arguments overlook the foreign exchange constraint.

Dollar-denominated debt has to be repaid in dollars. Right now our reserves are fairly high but this could change. Oil prices could go back to where they were, the trade war initiated by U.S. President Donald Trump holds little prospect for faster export growth, and portfolio investment may flow out. While these are only possibilities, they point to the need to ultimately base your borrowing plan on expected dollar earnings. The opportunity offered by low global interest rates right now is not matched by the likelihood of robust export growth.

In the final analysis though, it is not the risk of exchange rate depreciation or stagnant exports or even capital flight that is the issue; it is the rationale for borrowing. With revenue deficits the overwhelmingcrackIAS.com part of the fiscal deficit, we would be borrowing to finance consumption. Dollar denominated sovereign debt is just a matter of shifting this borrowing overseas. That is the real issue.

Pulapre Balakrishnan is Professor of Economics, Ashoka University and Senior Fellow, IIM Kozhikode

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crackIAS.com Source : www.thehindu.com Date : 2019-07-29 WHAT IS ZERO BUDGET NATURAL FARMING? Relevant for: Indian Economy | Topic: Major Crops, Cropping Patterns and various Agricultural Revolutions

A cotton field in Andhra Pradesh. (Below) Subhash Palekar | Photo Credit: Mahesh Kumar A.

The story so far: Finance Minister Nirmala Sitharaman thrust zero budget farming into the spotlight in the first Budget speech of the 17th Lok Sabha earlier this month, calling for a “back to the basics” approach. She said, “We need to replicate this innovative model through which in a few States, farmers are already being trained in this practice. Steps such as this can help in doubling our farmers’ income in time for our 75th year of Independence.” Several States, including Andhra Pradesh and Himachal Pradesh, have been aggressively driving a shift towards this model.

Zero budget natural farming (ZBNF) is a method of chemical-free agriculture drawing from traditional Indian practices.

It was originally promoted by Maharashtrian agriculturist and Padma Shri recipient Subhash Palekar, who developed it in the mid-1990s as an alternative to the Green Revolution’s methods driven by chemical fertilizers and pesticides and intensive irrigation. He argued that the rising cost of these external inputs was a leading cause of indebtedness and suicide among farmers, while the impact of chemicals on the environment and on long-term fertility was devastating. Without the need to spend money on these inputs — or take loans to buy them — the cost of production could be reduced and farming made into a “zero budget” exercise, breaking the debt cycle for many small farmers.

Instead of commercially produced chemical inputs, the ZBNF promotes the application of jeevamrutha — a mixture of fresh desi cow dung and aged desi cow urine, jaggery, pulse flour, water and soil — on farmland. This is a fermented microbial culture that adds nutrients to the soil, and acts as a catalytic agent to promote the activity of microorganisms and earthworms in the soil. About 200 litres of jeevamrutha should be sprayed twice a month per acre of land; after three years, the system is supposed to become self-sustaining. Only one cow is needed for 30 acres of land, according to Mr. Palekar, with the caveat that it must be a local Indian breed — not an imported Jersey or Holstein.

A similar mixture, called bijamrita, is used to treat seeds, while concoctions using neem leaves and pulp, tobacco and green chillis are prepared for insect and pest management.

The ZBNF method also promotes soil aeration, minimal watering, intercropping, bunds and topsoil mulching and discourages intensive irrigation and deep ploughing. Mr. Palekar is against vermicomposting, which is the mainstay of typical organic farming, as it introduces the the most commoncrackIAS.com composting worm, the European red wiggler (Eisenia fetida) to Indian soils. He claims these worms absorb toxic metals and poison groundwater and soil.

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

A limited 2017 study in Andhra Pradesh claimed a sharp decline in input costs and improvement in yields. However, reports also suggest that many farmers, including in Mr. Palekar’s native Maharashtra, have reverted to conventional farming after seeing their ZBNF returns drop after a few years, in turn raising doubts about the method’s efficacy in increasing farmers’ incomes.

ZBNF critics, including some experts within the Central policy and planning think tank NITI Aayog, note that India needed the Green Revolution in order to become self-sufficient and ensure food security. They warn against a wholesale move away from that model without sufficient proof that yields will not be affected. Sikkim, which has seen some decline in yields following a conversion to organic farming, is used as a cautionary tale regarding the pitfalls of abandoning chemical fertilizers.

According to the Economic Survey, more than 1.6 lakh farmers are practising the ZBNF in almost 1,000 villages using some form of state support, although the method’s advocates claim more than 30 lakh practitioners overall. The original pioneer was Karnataka, where the ZBNF was adopted as a movement by a State farmers’ association, the Karnataka Rajya Raitha Sangha. Large-scale training camps were organised to educate farmers in the method. According to a survey carried out in those early years, ZBNF farmers all owned small plots of land, had some access to irrigation and owned at least one cow of their own.

In June 2018, Andhra Pradesh rolled out an ambitious plan to become India’s first State to practise 100% natural farming by 2024. It aims to phase out chemical farming over 80 lakh hectares of land, converting the State’s 60 lakh farmers to ZBNF methods.

Himachal Pradesh, Chhattisgarh, Kerala, Karnataka and Uttarakhand have also invited Mr. Palekar to train their farmers.

Despite the ZBNF buzz caused by the Budget speech, the Finance Minister did not actually announce any new funding to promote it. Last year, the Centre revised the norms for the Rashtriya Krishi Vikas Yojana- Remunerative Approaches for Agriculture and Allied sector Rejuvenation (RKVY-RAFTAAR), a flagship Green Revolution scheme with an allocation of 3,745 crore this year, and the Paramparagat Krishi Vikas Yojana, which has an allocation of 325 crore and is meant to promote organic farming and soil health. Under the revised guidelines, both Centrally-sponsored schemes now allow States to use their funds to promote the ZBNF, vedic farming, natural farming, cow farming and a host of other traditional methods.

Andhra Pradesh says it has utilised 249 crore from these schemes to promote the ZBNF over a two-and-a-half year period. The State estimates it will need 17,000 crore to convert all of its 60 lakh farmers to the ZBNF over the next 10 years. However,crackIAS.com this is only a fraction of the spending on Central government subsidies for fertilizers, pesticides and mass irrigation that has driven the Green Revolution model.

NITI Aayog has been among the foremost promoters of Mr. Palekar and the ZBNF method. However, its experts have also warned that multi-location studies are needed to scientifically validate the long-term impact and viability of the model before it can be scaled up and promoted country-wide.

The Indian Council of Agricultural Research is studying the ZBNF methods practised by basmati and wheat farmers in Modipuram (Uttar Pradesh), Ludhiana (Punjab), Pantnagar (Uttarakhand) and Kurukshetra (Haryana), evaluating the impact on productivity, economics and soil health including soil organic carbon and soil fertility.

If found to be successful, an enabling institutional mechanism could be set up to promote the technology, NITI Aayog vice-chairman Rajiv Kumar has said. The Andhra Pradesh experience is also being monitored closely to judge the need for further public funding support.

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Farmers in India, despite being a major part of political slogans and a constant topic in media debates, are largely unrelieved of their incessant

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crackIAS.com Source : www.hindustantimes.com Date : 2019-07-29 REGION-BASED JOBS RESERVATION IS WRONG Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

On July 24, the Andhra Pradesh legislative assembly passed the AP Employment of Local Candidates in Industries and Factories Bill, 2019, that mandates employment of at least 75% state candidates in the respective units. The “local” reservation, a poll promise of chief minister, Jaganmohan Reddy, will extend to industries, factories, joint venture units, and projects taken up under public-private partnership initiatives. Mr Reddy is not the first CM to take such a retrograde step. Similar promises have been made by Gujarat chief minister, Vijay Rupani, and, more recently, by Madhya Pradesh chief minister, Kamal Nath. While Maharashtra did not promise or enact such a law, politicians such as Maharashtra Navnirman Sena chief, Raj Thackeray, has often made scathing attacks on migrants from Uttar Pradesh and Bihar and demanded that young people from the state should be given priority if there are any job opportunities in the state.

It is not too difficult to figure out the reason for such demands. India’s agriculture is in crisis, and there is a serious dearth of jobs in manufacturing. While one appreciates the challenging situation, reservation is not the answer to the problem. It may, instead, be a counterproductive move. Moreover, such laws go against the constitutional rights of Indians to live, work, and settle in any part of the country. In fact, there are scores of studies that show migration is good because it brings skills that are otherwise probably unavailable in a particular state, and also improves the economic condition of the people in the home state because, as economist, Chinmay Tumbe, puts it evocatively, “Remittances from all these places flow all through the year to thousands of villages and small towns, much like the tributaries of the river Ganga”. Besides the financial aspect, who can deny the importance of cultural and social interaction in a country as spectacularly diverse as India?

More importantly, such a law discourages the private sector. A company will think twice to set up its industry in a state that put these kinds of restrictions, instead of investing in the basic building blocks of a citizen: health, education, and skill training. An educated, healthy and well-trained citizen is always an asset, and any industry will be keen to employ people based on these parameters rather than where she lives/comes from.

First Published: Jul 28, 2019 18:06 IST

END Downloaded from crackIAS.com crackIAS.com© Zuccess App by crackIAS.com Source : www.prsindia.org Date : 2019-07-30 PRSINDIA Relevant for: Indian Economy | Topic: Issues Related to Poverty, Inclusion, Employment & Sustainable Development

Introduced Lok Sabha Jul 23, 2019

crackIAS.com