Onlyias Indian Economy Udaan Plus

UDAAN 500
PLUS
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FOR PRELIMS 2021
INDIAN ECONOMY
CURRENT AFFAIRS
January 2020 to January 2021
covering
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500
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ONLYIAS UDAAN PLUS: ECONOMY

OPEN MARKET SALE SCHEME (OMSS) ............................... 19
1. AGRICULTURE ..................................................................7
CONSUMER-FARMER (CONFARM) INITIATIVE .................. 19
NATIONAL AGRICULTURAL COOPERATIVE MARKETING
2. INDUSTRY AND INFRASTRUCTURE................................. 20
FEDERATION OF INDIA (NAFED) .......................................... 7
DIGITISATION OF LAND RECORDS ....................................... 7 DEDICATED FREIGHT CORRIDOR (DFC) ............................. 20
CHC FARM MACHINERY AND KRISHI KISAN APP .................. 7 RAILWAY RESTRUCTURING ............................................... 20
UREA SUBSIDY ..................................................................... 7 KISAN RAIL SCHEME .......................................................... 21
NUTRIENT BASED SUBSIDY SCHEME ................................... 7 INDUSTRY 4.0 .................................................................... 21
MARKET INTELLIGENCE AND EARLY WARNING SYSTEM ..... 8 MAKE IN INDIA INITIATIVE ................................................ 21
TILHAN MISSION ................................................................. 8 NATIONAL STARTUP ADVISORY COUNCIL ......................... 21
SCHEME FOR FORMATION AND PROMOTION OF FPOS ...... 8 START-UP VILLAGE ENTREPRENEURSHIP PROGRAMME
SANJIV PURI PANEL ............................................................. 9 (SVEP) ............................................................................... 22
BOOST FOR DAIRY SECTOR .................................................. 9 NORTH EAST GAS GRID PROJECT....................................... 22
‘SECTORAL APPLICATION HUB IN TECHNOLOGIES FOR NATIONAL GAS GRID ........................................................ 23
AGRICULTURE AND WATER’ ................................................ 9 CITY GAS DISTRIBUTION (CGD) NETWORKS ...................... 23
CROP DIVERSIFICATION PROGRAMME (CDP)...................... 9 OIL AND GAS EXPLORATION .............................................. 23
MARKET INTERVENTION SCHEME (MIS) ............................. 9 ONGC BEGINS PRODUCTION IN BENGAL BASIN ................ 23
SCHEME FOR FORMALIZATION OF MICRO FOOD INTEGRATED STEEL HUB ................................................... 23
PROCESSING ENTERPRISES ............................................... 10 IRON-ORE POLICY 2021 ..................................................... 24
PRADHAN MANTRI MATSYA SAMPADA YOJANA .............. 10 NATIONAL INFRASTRUCTURE PIPELINE ............................ 24
SARAS COLLECTION ........................................................... 11 NATIONAL TECHNICAL TEXTILES MISSION ........................ 24
DISTRESSED ASSETS FUND–SUB-ORDINATE DEBT FOR SPECIAL ECONOMIC ZONE (SEZ)........................................ 25
MSMES .............................................................................. 11 REAL TIME MARKET IN ELECTRICITY .................................. 25
ANIMAL HUSBANDRY INFRASTRUCTURE DEVELOPMENT TELECOM INDUSTRY IN INDIA ........................................... 25
FUND ................................................................................. 11 TELECOMMUNICATION CONSUMERS EDUCATION AND
SUBVENTION VS SUBSIDY ........................................................ 11 PROTECTION FUND (TCEPF) .............................................. 25
NEERA ............................................................................... 11 ‘BUNDLING’ TYPE SCHEME BY MNRE ................................ 25
SAHAKAR MITRA SCHEME ................................................. 12 IREDA AND GREEN WINDOW ............................................ 25
AGRICULTURE INFRASTRUCTURE FUND ........................... 12 SARAS INITIATIVE .............................................................. 25
ZORAM MEGA FOOD PARK (MFP) ..................................... 12 SOLAR CHARKHA MISSION ................................................ 26
KHAZAN AGRICULTURE ..................................................... 13 REWA SOLAR PLANT.......................................................... 26
AGRIDEX ............................................................................ 13 COAL BED METHANE (CBM) .............................................. 26
POKKALI RICE: KERALA ...................................................... 13 MINERALS (OTHER THAN ATOMIC AND HYDRO CARBONS
KRISHI MEGH..................................................................... 13 ENERGY MINERALS) CONCESSION (AMENDMENT) RULES,
RESTRUCTURED WEATHER BASED CROP INSURANCE 2021 .................................................................................. 26
SCHEME ............................................................................ 14 COMMERCIAL COAL MINING ............................................ 26
PM KISAN SAMPADA YOJANA ........................................... 14 SCHEMES APPROVED TO PROMOTE DRUG
NATIONAL BAMBOO MISSION .......................................... 14 MANUFACTURING ............................................................ 27
RASHTRIYA GOKUL MISSION .................................................... 15 ELECTRONICS MANUFACTURING CLUSTERS (EMC) SCHEME
PRADHAN MANTRI MATSYA SAMPADA YOJANA (PMMSY)15 .......................................................................................... 27
BIOTECH-KISAN PROGRAMME .......................................... 15 PRODUCTION-LINKED INCENTIVE MANUFACTURING
KRITAGYA HACKATHON .................................................... 15 SCHEME ............................................................................ 28
PAKUR HONEY ................................................................... 15 SCHEME FOR PROMOTION OF MANUFACTURING OF
TRIBES INDIA E-MARKETPLACE ......................................... 16 ELECTRONIC COMPONENTS AND SEMICONDUCTORS
KUMBHAR SASHAKTIKARAN YOJANA................................ 16 (SPECS) .............................................................................. 28
PILOT SCHEME ON FORTIFICATION OF RICE ...................... 17 NATIONAL POLICY ON ELECTRONICS 2019 ........................ 28
NATIONAL AGRICULTURAL HIGHER EDUCATION POLICY .. 17 SOFTWARE TECHNOLOGY PARKS OF INDIA (STPI)............. 28
SAHAKAR PRAGYA ............................................................. 17 INDIAN STRATEGIC PETROLEUM RESERVE ........................ 28
MINIMUM SUPPORT PRICE (MSP)..................................... 18 COIR GEO TEXTILE ............................................................. 29
DRAFT MODEL TENANCY ACT, 2019 .................................. 18 SUGAR INDUSTRY IN INDIA ............................................... 29
TRIFOOD PARKS ................................................................ 19 PRADHAN MANTRI MUDRA YOJANA (PMMY)................... 30
SAGUNA RICE TECHNIQUE ................................................ 19 SWADES INITIATIVE .......................................................... 30
PRODUCTION OF SAFFRON AND HEENG (ASAFOETIDA) IN UPWARD REVISION OF MSME DEFINITION ....................... 30
INDIA ................................................................................. 19 BANK OF SCHEMES, IDEAS, INNOVATION & RESEARCH
KISAN CREDIT CARD (KCC) SCHEME................................... 19 PORTAL ON MSMES .......................................................... 31
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1

DRAFT RULES FOR CODE ON WAGES ................................. 31 FIVE STAR VILLAGES SCHEME ............................................ 47
ASEEM PORTAL ................................................................. 31 INDIA’S FIRST SEAPLANE PROJECT .................................... 47
INDIA’S FIRST PUBLIC EV CHARGING PLAZA ...................... 31 SHASHI S. VEMPATI COMMITTEE ...................................... 48
KAKRAPAR ATOMIC POWER PLANT (INSERT MAP) ........... 31 GOVERNMENT TO REGULATE OTT .................................... 48
AIM ICREST ........................................................................ 32 PM WANI SCHEME ............................................................ 48
MEGHNAGHAT COMBINED-CYCLE POWER PLANT............ 32 NATIONAL COMMON MOBILITY CARD ............................. 49
KHADI AGARBATTI ATMA NIRBHAR MISSION ................... 33 RODTEP SCHEME ............................................................... 49
ETHANOL BLENDED PETROL (EBP) PROGRAMME ............. 33
4. INDIAN INSURANCE MARKET ........................................ 50
MODEL CONCESSION AGREEMENT FOR BOT MODEL ....... 33
ENTREPRENEURS IN RESIDENCE (EIR) PROGRAMME ........ 34 INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
SAROD-PORTS ................................................................... 34 OF INDIA (IRDAI) ............................................................... 50
SHYAMA PRASAD MOOKERJEE PORT ................................ 35 DOMESTIC SYSTEMICALLY IMPORTANT INSURERS (D-SIIS)50
LAND PORTS AUTHORITY OF INDIA (LPAI) .................................. 35 ATAL PENSION YOJANA ..................................................... 50
VADHAVAN PORT ................................................................... 35 AROGYA SANJEEVANI........................................................ 50
PORT MANAGEMENT MODELS ................................................. 35 INSURANCE INTERMEDIARIES ........................................... 51
INTEGRATED ROAD ACCIDENT DATABASE PROJECT (IRAD) PANDEMIC RISK POOL ....................................................... 51
.......................................................................................... 35
5. MONEY MARKET ........................................................... 52
LI-LO (LINE IN LINE OUT) SUBSTATION .............................. 36
INDIA ENERGY MODELLING FORUM ................................. 36 MOBILE TRADING.............................................................. 52
NATIONAL AUTHORITY FOR RECYCLING OF SHIPS............. 36 MASALA BONDS ................................................................ 52
COUNTRY’S FIRST MULTI-MODAL LOGISTIC PARK ............ 36 GOLD EXCHANGE TRADED FUND ...................................... 52
NATIONAL PROGRAM AND PROJECT MANAGEMENT POLICY DECLINING INVESTMENTS IN P-NOTES ............................. 52
FRAMEWORK .................................................................... 37 AT-1 BONDS ...................................................................... 53
NATIONAL PRODUCTIVITY COUNCIL ................................. 37 ELECTRONIC DEVELOPMENT FUND (EDF) ......................... 53
INDIA’S FIRST GREEN ENERGY CONVERGENCE PROJECT ... 37 ESG FUNDS ........................................................................ 53
COASTAL SHIPPING BILL, 2020 .......................................... 38
6. BANKING SECTOR OF INDIA........................................... 54
LAKSHADWEEP TO GET OPTICAL FIBRE CABLE .................. 38
DRAFT INDIAN PORTS BILL,2020 ....................................... 39 INDIA’S DIGITAL FINANCE INFRASTRUCTURE .................... 54
GREEN NATIONAL HIGHWAYS CORRIDORS PROJECT ........ 39 BAD BANK ......................................................................... 54
DEVELOPMENT OF WIND PARKS/WIND-SOLAR HYBRID PROVISIONING NORMS..................................................... 54
PARK ................................................................................. 40 DIFFERENCE BETWEEN NON-BANKING FINANCIAL
LIGHT HOUSE PROJECTS .................................................... 40 COMPANY (NBFC) AND BANK ........................................... 55
SAGARMALA SEAPLANE SERVICES (SSPS) .......................... 41 SPECIAL LIQUIDITY SCHEME FOR NBFCS/HFCS.................. 55
GOLDEN QUADRILATERAL & GOLDEN DIAGONAL SECTIONS ASSET RECONSTRUCTION COMPANY (ARC) ...................... 55
.......................................................................................... 41 SUPERVISORY ACTION FRAMEWORK (SAF) ....................... 55
PRARAMBH – STARTUP INDIA INTERNATIONAL SUMMIT . 42 EASE (ENHANCED ACCESS AND SERVICE EXCELLENCE) 3.0 56
STARTUP INDIA SEED FUND .............................................. 42 INDIA POST PAYMENTS BANK (IPPB) ................................. 56
ELECTRONICS INCENTIVE SCHEMES .................................. 42 MCLR (MARGINAL COST OF FUNDS BASED LENDING RATE)
‘ICOMMIT’ INITIATIVE ....................................................... 43 .......................................................................................... 56
MINERAL LAWS (AMENDMENT) ORDINANCE, 2020 ......... 43 REPO LINKED LENDING RATE ............................................ 56
LIQUIDITY MANAGEMENT FRAMEWORK FOR NBFCS ....... 57
3. SERVICE SECTOR IN INDIA ..............................................44
RECENT ANNOUNCED MERGERS OF BANKS...................... 57
FUTURE SKILLS PRIME ....................................................... 44 FINANCIAL STABILITY AND DEVELOPMENT COUNCIL (FSDC)
UNIVERSAL SERVICE OBLIGATION FUND (USOF) ............... 44 .......................................................................................... 57
E-COMMERCE IN INDIA ..................................................... 44 NET DEMAND AND TIME LIABILITIES (NDTL) ..................... 58
BHARAT MARKET .............................................................. 44 CORE INVESTMENT COMPANIES....................................... 58
SATELLITE TOWN RING ROAD (STRR) ................................ 45 FUGITIVE ECONOMIC OFFENDERS ACT ............................. 58
THE CONSUMER PROTECTION ACT, 2019 ......................... 45 PARTIAL CREDIT GUARANTEE SCHEME ............................. 58
BIS-CARE ........................................................................... 45 NEW UMBRELLA ENTITY (NUE) FOR RETAIL PAYMENT
BUREAU OF INDIAN STANDARDS ...................................... 45 SYSTEMS ........................................................................... 58
BHARAT AIR FIBRE SERVICES ............................................. 46 AMENDMENTS TO BANKING REGULATION ACT................ 59
NATIONAL IPR POLICY 2016 .............................................. 46 COOPERATIVE BANKS ....................................................... 59
NIP ONLINE DASHBOARD .................................................. 46 DEPOSIT INSURANCE AND CREDIT GUARANTEE
CHUNAUTI CONTEST ......................................................... 46 CORPORATION (DICGC)..................................................... 60
RORO SERVICE OF SOUTH WESTERN RAILWAY ................. 47 CENTRAL FRAUD REGISTRY ............................................... 60

2

REGULATING ACTIVITIES OF PAYMENT AGGREGATORS TAXATION LAWS (AMENDMENT) BILL, 2019 ..................... 73
(PAS) AND PAYMENT GATEWAYS (PGS) ............................ 60 MINIMUM ALTERNATIVE TAX (MAT) ................................ 73
RE-CAPITALIZATION OF RRBS ............................................ 60 DEFERRED TAX .................................................................. 73
RECAPITALISATION OF RRBS.............................................. 60 DIVIDEND DISTRIBUTION TAX (DDT) ................................. 73
STRESSED URBAN CO-OPERATIVE BANKS TO FACE PCA-LIKE DIRECT TAX VIVAD SE VISHWAS ACT, 2020 ....................... 74
CURBS ............................................................................... 61 ADJUSTED GROSS REVENUE.............................................. 74
INTEGRATED MARKET SURVEILLANCE SYSTEM (IMSS)...... 61 TAXING GLOBAL TECHNOLOGY COMPANIES .................... 74
VIRTUAL CURRENCY .......................................................... 61 TAXATION AND OTHER LAWS (RELAXATION OF CERTAIN
BANKING UNDER PUBLIC UTILITY SERVICE ........................ 62 PROVISIONS) ORDINANCE, 2020 ....................................... 74
LONG TERM REPO OPERATION (LTRO) .............................. 62 BORDER ADJUSTMENT TAX ............................................... 75
TARGETED LONG-TERM REPO OPERATION (TLTRO) ......... 62 TRANSPARENT TAXATION – HONORING THE HONEST ...... 75
BASEL NORMS ................................................................... 63 UNIFIED GAS PRICE SYSTEM .............................................. 75
BASEL III NORMS ............................................................... 63 NATURAL GAS ................................................................... 76
CAPITAL CONSERVATION BUFFER (CCB) ........................... 63 SIN GOODS AND SIN TAX ................................................... 76
COUNTERCYCLICAL CAPITAL BUFFER (CCYB) FOR BANKING RETROSPECTIVE TAXATION ............................................... 76
.......................................................................................... 63 TURANT CUSTOMS............................................................ 77
NIDHI COMPANIES ............................................................ 63 GREEN TAX ........................................................................ 77
SPECIAL LONG TERM TRANSITION LOAN TO DISCOMS FOR INDEPENDENT COMMISSION FOR THE REFORM OF
COVID-19 .......................................................................... 64 INTERNATIONAL CORPORATE TAXATION (ICRICT) ............ 77
SMALL FINANCE BANKS..................................................... 64
8. PUBLIC FINANCE............................................................ 78
ROLL OVER RISK ................................................................ 64
EMERGENCY CREDIT LINE GUARANTEE SCHEME (ECLGS) . 64 GROSS BUDGETARY SUPPORT........................................... 78
HOUSING FINANCE COMPANIES ....................................... 64 FISCAL RESPONSIBILITY AND BUDGET MANAGEMENT ACT
SUPERVISORY AND REGULATORY CADRE (SSRC) ............... 65 (FRBM), 2003 .................................................................... 78
P K MOHANTY COMMITTEE .............................................. 65 FRBM AMENDMENTS THAT WERE PART OF THE FINANCE
WAYS AND MEANS ADVANCE (WMA) SCHEME ................ 65 BILL 2018 ........................................................................... 78
FRAUD OVERSIGHT WING ................................................. 65 FINANCIAL STABILITY AND DEVELOPMENT COUNCIL (FSDC)
NATIONAL FINANCIAL REPORTING AUTHORITY (NFRA) .... 66 .......................................................................................... 78
CURRENCY SWAP FACILITY ................................................ 66 TASK FORCE ON SUSTAINABLE PUBLIC PROCUREMENT (SPP)
DOLLAR SWAP AGREEMENT BETWEEN INDIA AND US ...... 66 .......................................................................................... 78
PRE-PACKS ........................................................................ 66 NATIONAL INSTITUTE OF PUBLIC FINANCE AND POLICY ... 78
MONETIZATION OF DEFICIT .............................................. 67 OPEN BUDGET INITIATIVE AND OPEN BUDGET SURVEY.... 79
K. V. KAMATH COMMITTEE ............................................... 67 PUBLIC DEBT MANAGEMENT AGENCY (PDMA) ................ 79
SPECIAL LIQUIDITY FACILITY FOR MUTUAL FUNDS (SLF-MF) DEBT TO GDP RATIO .......................................................... 79
.......................................................................................... 68 9TH EDITION OF THE STATUS PAPER ON THE GOVERNMENT
ROUND THE CLOCK RTGS FACILITY .................................... 68 DEBT ................................................................................. 79
OPEN MARKET OPERATIONS (OMO) ................................. 68 CONTINGENCY FUND (CF) OF THE CENTRAL BANK ............ 79
REVISED PRIORITY SECTOR LENDING (PSL) GUIDELINES.... 68 CONTINGENCY FUND (CF) OF THE CENTRAL BANK ............ 80
PUBLIC CREDIT REGISTRY (PCR) ......................................... 69 FOREIGN CONTRIBUTION (REGULATION) ACT 2010 ......... 80
PRADHAN MANTRI JAN DHAN YOJANA ...................................... 69 MONETIZATION OF DEFICIT .............................................. 80
SHADOW BANKING SYSTEM ............................................. 69 REGULATORY SANDBOX.................................................... 81
RESERVE BANK INNOVATION HUB .................................... 69 COMPOUND INTEREST WAIVER SCHEME ......................... 81
ASSET RECONSTRUCTION COMPANIES (ARCS) .................. 70 AMENDMENTS TO PUBLIC PROCUREMENT ORDER, 2017 81
POSITIVE PAY MECHANISM ............................................... 70 SCHEME FOR FINANCIAL SUPPORT TO PPP IN
TARP-LIKE PROGRAMME................................................... 70 INFRASTRUCTURE VGF ...................................................... 82
FULLY ACCESSIBLE ROUTE (FAR)........................................ 70 CURRENT ACCOUNT .......................................................... 83
PAYMENTS INFRASTRUCTURE DEVELOPMENT FUND (PIDF) OFF BUDGET BORROWINGS .............................................. 83
.......................................................................................... 71
9. EXTERNAL SECTOR OF INDIA ......................................... 84
LEGAL ENTITY IDENTIFIER (LEI) SYSTEM ............................ 71
NATIONAL STRATEGY FOR FINANCIAL INCLUSION (NSFI) .. 71 UN COMMISSION ON INTERNATIONAL TRADE LAW
JAYANT KUMAR DASH COMMITTEE .................................. 72 (UNCITRAL) ....................................................................... 84
SINGLE SBI BRANCH FOR ALL FCRA ACCOUNTS ................. 72 HARMONIZED SYSTEM OF NOMENCLATURE (HSN) CODE 85
NON-BANKING FINANCIAL COMPANIES- MICROFINANCE NEST: TO INCREASE INVESTMENT COORDINATION .......... 85
INSTITUTIONS (NBFC-MFIS) .............................................. 72 INTERNATIONAL FINANCIAL SERVICES CENTRES (IFSC) ..... 85
LIBERALISED REMITTANCE SCHEME (LRS) ......................... 85
7. TAXATION ......................................................................73
3

NON-TARIFF MEASURES (NTMS) ....................................... 85 SURETY BONDS ................................................................. 99
REVITALIZING SEZS ............................................................ 86 BSE E-AGRICULTURAL MARKETS LTD. (BEAM) PORTAL ..... 99
WTO PEACE CLAUSE .......................................................... 86 INTERNATIONAL ORGANIZATION OF SECURITIES
WTO APPELLATE BODY...................................................... 87 COMMISSIONS (IOSCO) .................................................... 99
PALM OIL IMPORT FROM MALAYSIA ................................. 87 INFRASTRUCTURE INVESTMENT TRUST (INVIT) ................ 99
TRIPS FLEXIBILITIES ........................................................... 88 NHAI'S INVIT ..................................................................... 100
PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL ZERO-COUPON BONDS OR ACCRUAL BONDS .................. 100
PROPERTY, 1883 ............................................................... 88 NEGATIVE-YIELD BONDS ................................................. 100
FOREX RESERVES ............................................................... 88 FLOATING RATE BONDS .................................................. 100
BILATERAL INVESTMENT TREATY (BIT) .............................. 89 BSE MUNICIPAL BOND LISTING ....................................... 101
TARIFF RATE QUOTA SCHEME ........................................... 89
11. HUMAN DEVELOPMENT AND SUSTAINABLE
INDIA ECONOMIC STRATEGY (IES)..................................... 90
DEVELOPMENT ................................................................101
SUPPLY CHAIN RESILIENCE INITIATIVE (SCRI) .................... 90
AGRIOTA ........................................................................... 90 UNNAT BHARAT ABHIYAN 2.0 ......................................... 101
‘PHASE ONE’ TRADE DEAL ................................................. 90 PM SVANIDHI .................................................................. 101
MERCHANDISE EXPORTS FROM INDIA SCHEME (MEIS) .... 90 PRADHAN MANTRI UJJWALA YOJANA (PMUY) ............... 102
INDIA BECOMES 5TH LARGEST ECONOMY ........................ 91 VOLUNTARY NATIONAL REVIEW ..................................... 102
ZEROING METHODOLOGY................................................. 91 AFFORDABLE RENTAL HOUSING COMPLEXES (AHRCS) ... 102
SINGAPORE CONVENTION ON MEDIATION ...................... 91 INDIA ENERGY MODELING FORUM ................................. 103
CAROTAR .......................................................................... 91 KUMHAR SASHAKTIKARAN YOJANA................................ 103
U.S. PRIORITY WATCH LIST FOR INTELLECTUAL PROPERTY TRIFOOD PROJECT........................................................... 103
(IP) RIGHTS ........................................................................ 92 PRIME MINISTER EMPLOYMENT GENERATION PROGRAM
DEPRECIATION OF RUPEE.................................................. 92 (PMEGP).......................................................................... 104
RISE IN FOREIGN DIRECT INVESTMENT (FDI) ..................... 92 ATAL BIMIT VYAKTI KALYAN YOJANA .............................. 104
REVISED FDI POLICY .......................................................... 92 TRIBAL ENTREPRENEURSHIP DEVELOPMENT PROGRAMME
SECTORS IN WHICH FDI IS PROHIBITED ............................. 93 ........................................................................................ 104
TRADE POLICY REVIEW MECHANISM (TPRM) ................... 93 UDYAM SAKHI PORTAL.................................................... 105
ADVANCED MARKET COMMITMENTS (AMCS) .................. 93 #ARTHSHASTRI CAMPAIGN ............................................. 105
CERTIFICATE OF ORIGIN (CO) ............................................ 93 KALA KUMBH – HANDICRAFTS THEMATIC EXHIBITION’ .. 105
SPECIAL DRAWING RIGHTS (SDR) BY IMF .......................... 93 COVID-19 SHRI SHAKTI CHALLENGE ................................ 105
ATMANIRBHAR BHARAT V/S IMPORT SUBSTITUTION....... 94 PRIME MINISTER’S NATIONAL RELIEF FUND (PMNRF) .... 105
UNNATEE (UNLOCKING NATIONAL ENERGY EFFICIENCY POTENTIAL)
10. SECURITY MARKET IN INDIA .........................................94
........................................................................................ 106
DEBT INSTRUMENTS ......................................................... 94 PURVODAYA SCHEME: ACCELERATED DEVELOPMENT OF
GHOSTING......................................................................... 94 STEEL SECTOR ................................................................. 106
APPLICATION SUPPORTED BLOCKED AMOUNT (ASBA) ATMA NIRBHAR BHARAT ROZGAR YOJANA..................... 106
MECHANISM ..................................................................... 94 SDG INVESTOR MAP FOR INDIA ...................................... 106
SIDE POCKETING ............................................................... 95 SUSTAINABLE DEVELOPMENT SOLUTIONS NETWORK
BHARAT-22 ETF ................................................................. 95 (SDSN) ............................................................................. 107
NATIONAL COMMODITY AND DERIVATIVES EXCHANGE WORLD SUSTAINABLE DEVELOPMENT SUMMIT 2020 .... 107
(NCDEX)............................................................................. 95 SVAMITVA SCHEME ........................................................ 107
CORONA BONDS ............................................................... 95 E20 FUEL ......................................................................... 107
INDIA INX .......................................................................... 95 SHRAM SHAKTI PORTAL .................................................. 108
INDIA INX’S GLOBAL SECURITIES MARKET (GSM) .............. 96 MAHATMA GANDHI INSTITUTE OF EDUCATION FOR PEACE
NSE KNOWLEDGE HUB ...................................................... 96 AND SUSTAINABLE DEVELOPMENT (MGIEP)................... 108
CONSOL BONDS ................................................................ 96
12. INDEX AND REPORTS IN NEWS ...................................108
SOVEREIGN GOLD BOND SCHEME .................................... 96
FOLLOW ON PUBLIC OFFER (FPO) ..................................... 96 WORLD ECONOMIC OUTLOOK ........................................ 108
NATIONAL INTERNET EXCHANGE OF INDIA (NIXI) ............. 97 STATE ENERGY EFFICIENCY INDEX ................................... 108
BOND PRICE ...................................................................... 97 WORLD COMPETITIVENESS INDEX 2019 ......................... 108
FULLY ACCESSIBLE ROUTE FOR G-SECS.............................. 97 ECOWRAP REPORT .......................................................... 109
GREEN BONDS................................................................... 98 LASPEYRES INDEX ............................................................ 109
INDIAN GAS EXCHANGE (IGX)............................................ 98 TIME TO CARE REPORT/ INEQUALITY REPORT ................ 109
INDIAN ENERGY EXCHANGE (IEX) ...................................... 98 GLOBAL INVESTMENT TREND MONITOR REPORT ........... 109
SOCIAL STOCK EXCHANGES ............................................... 98 GLOBAL ECONOMIC PROSPECTS ..................................... 109

4

ASIAN DEVELOPMENT OUTLOOK (ADO) ......................... 109 FINANCIAL STABILITY REPORT ......................................... 120
WORLD ECONOMIC SITUATION AND PROSPECTS 2021 .. 109 INDIAN TELECOM SERVICES PERFORMANCE INDICATOR
CONSUMER CONFIDENCE SURVEY .................................. 109 REPORT ........................................................................... 120
SELF EMPLOYMENT ......................................................... 109 ECONOMIC OUTLOOK SURVEY ....................................... 120
INTERNATIONAL INTELLECTUAL PROPERTY INDEX ......... 110 HUMAN DEVELOPMENT INDEX (HDI) 2020 ..................... 120
EASE OF LIVING INDEX (EOLI) AND MUNICIPAL “BEATEN OR BROKEN? INFORMALITY AND COVID-19 IN
PERFORMANCE INDEX (MPI) 2019 .................................. 110 SOUTH ASIA” REPORT ..................................................... 121
VOLATILITY INDEX (VIX)................................................... 110 “WOMEN AND TRADE: THE ROLE OF TRADE IN PROMOTING
FINANCIAL MANAGEMENT INDEX (FMI) FOR RURAL WOMEN’S EQUALITY” REPORT ....................................... 121
DEVELOPMENT ............................................................... 110 POVERTY AND SHARED PROSPERITY REPORT 2020......... 121
WORLD EMPLOYMENT AND SOCIAL OUTLOOK .............. 110 WORLD FOOD PRICE INDEX 2020: FAO ........................... 121
THE DOLLAR INDEX ......................................................... 110 INDIA INNOVATION INDEX 2020 ..................................... 122
ILO MONITOR: COVID-19 AND THE WORLD OF WORK .... 111 WOMEN, BUSINESS & THE LAW INDEX ........................... 122
UN WORLD HAPPINESS REPORT- 2020............................ 111 GLOBAL RISK REPORT ...................................................... 122
INDIA: 3RD LARGEST PRODUCER OF ELECTRICITY ........... 111 GLOBAL TALENT COMPETITIVE INDEX (GTCI) 2020 ......... 122
BEE’S STAR RATING PROGRAMME .................................. 112 GLOBAL SOCIAL MOBILITY INDEX .................................... 123
WORLD BANK REPORT ON REMITTANCES....................... 112 GREEN BOND IMPACT REPORT 2019............................... 123
SHARED RESPONSIBILITY, GLOBAL SOLIDARITY REPORT . 112 GREEN BONDS SCENARIO IN INDIA ................................. 123
GLOBAL HUNGER INDEX (GHI) 2020 ................................ 112 EASE OF DOING BUSINESS RANKINGS ............................. 123
“WORLD'S WOMEN 2020: TRENDS AND STATISTICS “IMPACT OF ENERGY EFFICIENCY MEASURES FOR THE YEAR
REPORT”.......................................................................... 113 2018-19” REPORT ........................................................... 123
GLOBAL WEALTH REPORT 2020 ...................................... 113 NIRF INDIA RANKINGS 2020/ “INDIA RANKINGS 2020” ... 123
STATE OF FOOD AND AGRICULTURE 2020 REPORT ......... 113 GLOBAL MULTIDIMENSIONAL POVERTY INDEX 2020 ..... 123
GLOBAL ENERGY TRANSITION INDEX 2020 ..................... 113 SUSTAINABLE OCEAN ECONOMY FOR 2050 REPORT ...... 123
GLOBAL ENERGY REVIEW 2020: IEA ................................ 113 SDG INDEX 2020 .............................................................. 124
WORLD INVESTMENT REPORT 2020 ............................... 114 DIGITAL PAYMENTS INDEX (DPI) ..................................... 124
GLOBAL ECONOMIC PROSPECTS (GEP) 2020 REPORT ..... 114
13. IMPORTANT CONCEPTS IN ECONOMY ........................124
FINANCIAL SECRECY INDEX ............................................. 114
R&D STATISTICS AND INDICATORS 2019-20 REPORT ...... 114 GREENFIELD AND BROWNFIELD PROJECTS ..................... 124
BUSINESS CONFIDENCE INDEX ........................................ 115 EARNEST MONEY DEPOSIT (EMD) ................................... 124
BUSINESS RESPONSIBILITY REPORTING (BRR) ................. 115 MAHARATNA, NAVRATNA AND MINIRATNA STATUS ..... 125
EXPORT PREPAREDNESS INDEX 2020 .............................. 115 SHARED ECONOMY ......................................................... 125
GLOBAL INDICES TO DRIVE REFORMS AND GROWTH (GIRG) TERMINOLOGIES WITH RESPECT TO RECESSION............. 125
EXERCISE ......................................................................... 115 TECHNICAL RECESSION ................................................... 126
BUSINESS REFORM ACTION PLAN (BRAP) RANKING OF LIQUIDITY TRAP............................................................... 126
STATES ............................................................................ 115 LIQUIDITY TRAP............................................................... 126
RANKING OF STATES ON SUPPORT TO STARTUP K-SHAPED ECONOMIC RECOVERY ................................... 126
ECOSYSTEMS ................................................................... 116 SECURED OVERNIGHT FINANCING RATE (SOFR) ............. 126
GLOBAL INNOVATION INDEX 2020.................................. 116 GINI COEFFICIENT ........................................................... 127
EASE 2.0 BANKING REFORMS INDEX ............................... 116 HELICOPTER MONEY ....................................................... 127
STATES STARTUP RANKING 2019 .................................... 116 STAGFLATION ................................................................. 127
GLOBAL ECONOMIC FREEDOM INDEX 2020.................... 117
14. MISCELLANEOUS ........................................................128
RAJIV MEHRISHI PANEL ................................................... 117
SPECIAL REPORT ON SUSTAINABLE RECOVERY ............... 117 DRAFT NATIONAL STATISTICAL COMMISSION (NSC) BILL,
HUMAN CAPITAL INDEX 2020 ......................................... 117 2019 ................................................................................ 128
WORLD RISK INDEX 2020 ................................................ 117 SAKSHAM ........................................................................ 128
NOBEL PRIZE IN ECONOMICS .......................................... 118 HALLMARKING MADE MUST FOR GOLD JEWELLERY ....... 128
CONSUMER PRICE INDEX FOR INDUSTRIAL WORKERS (CPI- MANI APP BY RBI ............................................................. 128
IW) .................................................................................. 118 BHOOMI RASHI PORTAL .................................................. 128
INDEX OF EIGHT CORE SECTOR INDUSTRIES.................... 118 PROJECT MONITORING GROUP (PMG) PORTAL .............. 129
PURCHASING MANAGER INDEX (PMI) ............................ 119 LLP SETTLEMENT SCHEME .............................................. 129
WORLD TRADE REPORT................................................... 119 CHAMPIONS PORTAL ...................................................... 129
ENERGY EFFICIENCY REPORT 2020 .................................. 119 COVID-19 ACTIVE RESPONSE AND EXPENDITURE SUPPORT
INVESTMENT PROMOTION AWARD ................................ 119 PROGRAMME ................................................................. 130
INDIA WORKPLACE EQUALITY INDEX .............................. 120 ELECTRICITY (RIGHTS OF CONSUMERS) RULES, 2020 ...... 130

5

SURVEY ON HOUSEHOLD SOCIAL CONSUMPTION:
EDUCATION..................................................................... 131
DRONE CENSUS ............................................................... 131
DIGITAL SKY PLATFORM .................................................. 131
TYLER PRIZE ..................................................................... 131
RESKILLING REVOLUTION ................................................ 131
TRACK AND TRACE PLATFORM FOR BUSINESS ................ 131
SAKSHAM 2020: SANRAKSHAN KSHAMTA MAHOTSAV .. 131

WORLD’S FASTEST-GROWING CITIES .............................. 131

SPICE+ ............................................................................. 131
MULTI-DONOR TRUST FUND ........................................... 132
INTELLECTUAL PROPERTY FACILITATION CENTRE ........... 132
INDIA’S FIRST WOMEN TRADE CENTRE ........................... 132
GLOBAL CONSORTIUM FOR DIGITAL CURRENCY
GOVERNANCE ................................................................. 132
CENTRE FOR MONITORING INDIAN ECONOMY (CMIE) ... 132
STRATEGIC SECTOR ......................................................... 132

6

1. AGRICULTURE CHC Farm Machinery App:
• The Multi-lingual Mobile App CHC Farm
NATIONAL AGRICULTURAL COOPERATIVE Machinery is available to custom service providers
MARKETING FEDERATION OF INDIA (NAFED) for registration and uploading with geo-reference
photographs of agricultural machinery.
Recently, National Agricultural Cooperative
• Through CHC Farm Machinery App, farmers can
Marketing Federation of India (NAFED), wasted over
select and order the required machinery at
half of its onion buffer stock due to poor storage, at a feasible rate from the Custom Hiring Centers
time when government is importing tonnes of onion located in the radius of 50 Kms.
to keep prices at check.

Krishi Kisan App:
About NAFED:
• It will provide farmers the information of best
§ It is registered under the Multi State Co-
demonstration of high-yielding crops and
operative Societies Act with the objective to
seeds in their nearby area.
promote Co-operative marketing of agricultural
• Any farmer with high quality of crops can utilize
produce to benefit the farmers.
this platform to demonstrate best practices of
§ It is the nodal agency to implement price
cultivation to other farmers so that this will help
stabilization measures under Operation
other farmers also to adopt these methods.
Greens.
• The App will also help in geo-tagging and geo-
§ NAFED along with FCI with proactive role of state
governments also physically procures oilseeds, fencing of crop and give weather forecast
pulses and copra under the Price Support message to farmers.
Scheme (PSS) which in turn is under the umbrella UREA SUBSIDY
scheme of PM-AASHA.
• Recently, Centre has drawn up a plan to ease the
DIGITISATION OF LAND RECORDS controls on the retail prices of urea.
§ Recently, Ministry of Rural Development • Now, government is choosing for direct transfer
informed that about 90 per cent of villages in (DBT) of urea subsidy to the beneficiary farmers’
India have computerized the Records of Right bank accounts instead of DBT to firms based on
(RoR) and about 53 per cent of survey maps point of sale.
showing boundaries and ownership of land have
been digitised. Urea policy India:
§ Telangana and Maharashtra top the list of • Urea is the source of nitrogenous fertilizer and
states with 99% computerisation of land records it is heavily subsidized by the Central Government.
data followed by Andhra Pradesh at 98%. Today urea is the only fertilizer which remains
§ Along with some States in the North East, Kerala controlled.
at 43.24% and Jammu and Kashmir at 9.32% • Urea Subsidy is a part of Central Sector Scheme
are lagging behind in the computerization of land of Department of Fertilizers and is wholly
records. financed by the Government of India through
§ The Centre, through the Digital lndia Land Budgetary Support.
Records Modernisation Programme (DILRMP), • India is second largest consumer of urea
is providing financial assistance to the States for fertilizers after China.
the computerisation of land records.
§ Karnataka was the first State to computerise land NUTRIENT BASED SUBSIDY SCHEME
records under the ‘Bhoomi Project’, followed by • The scheme was set up in 2010 to ensure the
Andhra Pradesh and Tamil Nadu. availability of phosphatic and potassic fertilizers
to farmers at an affordable price, as the retail
CHC FARM MACHINERY AND KRISHI KISAN APP prices of such non-urea fertilisers are
• Union Minister for Agriculture and Farmers decontrolled and set by manufacturers.
Welfare launches two mobile Apps – ‘CHC Farm • Under this, government announces a fixed rate of
Machinery and Krishi Kisan App for Geo subsidy (in Rs. per Kg basis), on each nutrient of
Tagging’ in New Delhi.
7

subsidized P&K fertilizers, namely Nitrogen (N), Ø When the prices fall more than 50%
Phosphate (P), Potash (K) and Sulphur (S). compared to last year’s market price at the
• It is applicable to 22 fertilizers (other than Urea) time of harvest;
for which MRP will be decided taking into account Ø When the prices fall less than the
the international and domestic prices of P&K benchmark, if any, fixed by the State/ Central
fertilizers, exchange rate, and inventory level in Government for a specified period.
the country.
• Ministry of Chemicals and Fertilizers is nodal. TILHAN MISSION
§ Tilhan Mission to make the country self-reliant
MARKET INTELLIGENCE AND EARLY WARNING in oilseed production.
SYSTEM § India is the fourth largest vegetable oil
§ Union Ministry of Food Processing has launched economy in the world after the USA, China and
Market Intelligence and Early Warning System Brazil.
(MIEWS) Portal for Monitoring prices of TOP § Today, the oilseeds account for 13% of the
Crops - Tomato, Onion and Potato. cropped area in the country.
§ MIEWS portal would help in planning and timely § The oilseed accounts for 13% of the Gross
intervention for price stabilization and Cropped Area
generating alerts. § Still, India is the largest importer of palm oil in
§ The MIEWS Dashboard and Portal is a ‘first-of-its- the world.
kind’ platform for ‘real time monitoring’ of
prices of tomato, onion and potato (TOP) and for SCHEME FOR FORMATION AND PROMOTION OF
simultaneously generating alerts for intervention FPOs
under the terms of the Operation Greens (OG) § The Cabinet Committee has given its approval for
scheme. 10,000 FPOs to be formed in five years period
§ The portal would disseminate all relevant from 2019-20 to 2023-24 to ensure economies of
information related to TOP crops such as Prices scale for farmers.
and Arrivals, Area, Yield and Production, Imports § Concept of FPO begun during 2011-12
and Exports, Crop Calendars, Crop Agronomy, etc.
in an easy-to-use visual format. About the Scheme
§ A dashboard that would indicate low price and § It would be a new Central Sector Scheme titled
high price alerts as well as price forecasts for 3 “Formation and Promotion of Farmer Produce
months forward. Organizations (FPOs)” to form and promote
10,000 new FPOs.
Operation Greens Scheme: § Under Department of Agriculture, Cooperation &
§ In the budget speech of Union Budget 2018-19, a Farmers Welfare (DAC&FW).
new Scheme “Operation Greens (OG)” was § Initially there will be three implementing
announced on the line of “Operation Flood”. Agencies to form and promote FPOs, namely
§ The scheme provides an outlay of Rs.500 crores Small Farmers Agri-business Consortium (SFAC),
to promote Farmer Producers Organizations National Cooperative Development Corporation
(FPOs), Agri-logistics, processing facilities and (NCDC) and National Bank for Agriculture and
professional management. Rural Development (NABARD).
§ Accordingly, the Ministry has formulated a scheme § States may also nominate their Implementing
for integrated development of Tomato, Onion Agency in consultation with DAC&FW.
and Potato (TOP) value chain. § DAC&FW will allocate Cluster/States to
§ As per the terms of the OG Scheme, during a glut Implementing Agencies which in turn will form
situation, evacuation of surplus production from the Cluster-Based Business Organization in the
producing areas to consumption centers will be States.
undertaken as determined by the following:
Ø When the prices fall below preceding 3 Modes for promotion:
years’ average market price at the time of § FPOs will be promoted under “One District One
harvest; Product” cluster to promote specialization and

8

better processing, marketing, branding & export 2022-23) and the repayment period has been
by FPOs. extended up to 2030-31.
§ There will be a provision of Equity Grant for § It also proposed to intensify the Quality Milk
strengthening equity base of FPOs. Programme for both cooperative and private
§ There will be a Credit Guarantee Fund of up to sector with fund sharing basis to improve quality
Rs. 1,000 crore in NABARD. of milk.
§ Ministry: This Central Sector Scheme was
Steps taken for FPOs promotion: launched by Department of Animal Husbandry
• Integration to e-National Agriculture Market (e- and Dairying, Ministry of Fisheries, Animal
NAM) Husbandry & Dairying.
• 100 percent income tax exemption is being given § Aim: To create additional milk processing
from profit derived by FPOs having annual capacity, invest in infrastructure to modernize and
turnover upto Rs.100 crore for activities such as bring efficiency in dairy processing plants and
post-harvest value addition to agriculture etc. machinery.
§ Beneficiaries: End Borrowers such as Milk
Unions, State Dairy Federations, Milk
Producer Organisation (PO):
Cooperatives, Milk Producer Companies etc.
§ A Producer Organisation (PO) is a legal entity
§ Under the scheme, fund has been set up under
formed by primary producers, viz. farmers,
NABARD. Funding will be in the form of interest-
milk producers, fishermen, weavers, rural
bearing loan, implemented by National Dairy
artisans, craftsmen.
Development Board (NDDB) and National
§ A PO can be a producer company, a
Dairy Development Cooperation (NCDC)
cooperative society or any other legal form
directly through the End Borrowers.
which provides for sharing of profits/benefits
§ The respective State Government will be the
among the members.
guarantor of loan repayment.
§ FPO is one type of PO where the members are
farmers. Small Farmers’ Agribusiness ‘SECTORAL APPLICATION HUB IN
Consortium (SFAC) is providing support for TECHNOLOGIES FOR AGRICULTURE AND WATER’
the promotion of FPOs.
• IIT-Ropar set up application hub for research into
SANJIV PURI PANEL stubble burning and water issues.
• Setup under national mission on Inter-disciplinary
• The Fifteen Finance Commission has appointed Cyber Physical Systems and is granted by Union
Sanjiv Puri as head of an eight-member high-level government’s Science and Engineering Research
expert group to suggest measures to increase Board (SERB).
farm productivity and incentivise states to
boost agricultural exports. CROP DIVERSIFICATION PROGRAMME (CDP)
• Mandate: To recommend measurable
§ Crop Diversification Programme (CDP) is a sub
performance incentives for States to
scheme of Rashtriya Krishi Vikas Yojana
encourage agriculture exports as well as to
(RKVY).
promote crops to enable high import substitution.
§ It is being implemented in Original Green
BOOST FOR DAIRY SECTOR Revolution States to divert the area of paddy
crop to alternate crops and in tobacco growing
§ Recently, Central government has made some states to encourage tobacco farmers to shift to
changes in Dairy Processing and Infrastructure alternate crops/cropping system.
Development Fund (DIDF) scheme to take the § Under CDP for replacing paddy crop, assistance is
white revolution (associated with milk provided for four major interventions viz.,
production) to the next level. alternate crop demonstrations, farm
§ Government increased the interest subvention mechanization & value addition, site-specific
or subsidy on loans given to the dairy sector activities & contingency for awareness,
from 2 per cent to 2.5 per cent. training, monitoring, etc.
§ The funding period of the scheme is revised
(earlier 2017-18 to 2019-20: now 2018-19 to MARKET INTERVENTION SCHEME (MIS)
9

§ Scheme meant to protect the growers of § The Scheme will majorly focus on perishables.
perishable commodities from making distress
sales, especially at times when prices fall below Objectives:
the cost of production. § Increase in access to finance by micro food
§ MIS is a price support mechanism implemented processing units.
on the request of State Governments. § Increase in revenues of target enterprises.
§ It is for procurement of perishable and § Enhanced compliance with food quality and safety
horticultural commodities in the event of a fall standards.
in market prices. § Strengthening capacities of support systems.
§ Under the MIS, a pre-determined quantity at a § Transition from the unorganized sector to the
fixed MIP is procured by NAFED as the Central formal sector.
agency. § Special focus on women entrepreneurs and
§ The scheme can be invoked by a State which is Aspirational districts.
willing to bear half the losses of procurement, with § Encourage Waste to Wealth activities.
the remainder being borne by the Centre. § Focus on minor forest produce in Tribal Districts.
§ It is implemented when there is at least a 10%
increase in production or a 10% decrease in Benefits of the scheme:
the ruling rates over the previous normal year § Nearly eight lakh micro- enterprises will benefit
§ Objective: to protect the growers of these through access to information, better exposure
horticultural/agricultural commodities from and formalization.
making distress sale in the event of bumper crop § It will enable them to formalize, grow and
during the peak arrival period when prices fall to become competitive.
very low level. § The project is likely to generate nine lakh skilled
§ The Department of Agriculture & Cooperation and semi-skilled jobs.
is implementing the scheme. § Increased access to common services like
§ Under MIS, funds are not allocated to the States. sorting, grading, processing, packaging, storage
Instead, central share of losses as per the etc.
guidelines of MIS is released to the State
Governments/UTs, for which MIS has been PRADHAN MANTRI MATSYA SAMPADA YOJANA
approved, based on specific proposals received Aims to bring about a Blue Revolution through
from them. sustainable and responsible development of the
§ There are other agencies designated by the state fisheries sector in India.
government for a fixed period or till the prices are
stabilized above the MIP whichever is earlier. Objectives:
§ The area of operation is restricted to the § Augmenting fish production and productivity at a
concerned state only. sustained average annual growth rate of about 9%
§ The MIS has been implemented in case of to achieve a target of 22 million metric tons by
commodities like apples, kinnoo/malta, garlic, 2024-25.
oranges, galgal, grapes, mushrooms, clove, black § Creation of direct gainful employment
pepper, pineapple, ginger, red-chillies, coriander opportunities to about 15 lakh fishers, fish
seed etc. farmers, fish workers, fish vendors etc.
§ Doubling of fishers, fish farmers and fish
SCHEME FOR FORMALIZATION OF MICRO FOOD workers incomes by 2024.
PROCESSING ENTERPRISES § Duration: 5 years from FY 2020-21 to FY 2024-25
§ Centrally Sponsored Scheme. Expenditure to be in all States/Union Territories.
shared by the Government of India and States at § Nodal Ministry: Department of Fisheries,
60:40. Ministry of Animal Husbandry, Dairying and
§ 2,00,000 micro-enterprises are to be assisted Fisheries.
with credit linked subsidies. § ‘Cluster or area-based approach’ would be
§ Duration: Scheme will be implemented over a 5- followed with requisite forward and backward
year period from 2020-21 to 2024-25. linkages and end to end solutions.
§ Cluster based approach.
10

SARAS COLLECTION § To facilitate incentivization of investments in
the establishment of infrastructure in the animal
§ The Union Minister for Rural Development and
husbandry sector.
Panchayati Raj launched “The Saras Collection”
§ The fund had been proposed as part of the Atma
on the Government e Marketplace (GeM)
Nirbhar Bharat.
portal recently.
§ Beneficiaries: Farmer Producer Organizations
§ Aims to showcase daily utility products made by
(FPOs), MSMEs, Section 8 Companies, Private
rural self-help groups (SHGs) in rural areas with
Companies and individual entrepreneurs with
market access to Central and State Government
minimum 10% margin money contribution by
buyers.
them.
§ Under this initiative, the SHG sellers will be able to
§ The balance 90% would be the loan component
list their products in 5 product categories, namely:
to be made available by scheduled banks.
1) handicrafts,
§ The government will provide 4% interest
2) handloom and textiles,
subvention to eligible beneficiaries from the
3) office accessories,
Aspirational Districts and 3% for beneficiaries
4) grocery and pantry, and
from other Districts.
5) personal care and hygiene.
§ GeM will provide dashboards for functionaries at Subvention Vs Subsidy
the national, state, district and block level to
provide them realtime information about the • Subsidy is a grant, especially from the government
number of products uploaded by SHGs to boost production and consumption. The
§ Significance: The Saras Collection will do away government pays a part of the cost of production
with intermediaries in the supply chain, thus of certain goods or services.
ensuring better prices for SHGs and spurring • But a subvention scheme offers a relief in the
employment opportunities at the local level. buyer’s loan interest burden but does not make
anything free. The seller often adds the interest to
DISTRESSED ASSETS FUND–SUB-ORDINATE be paid by him to the cost of the product.
DEBT FOR MSMES
NEERA
§ Aims to extend support to the promoters of the
operational MSMEs which are stressed and have § The Khadi and Village Industries Commission
become NPA as on 30th April, 2020. (KVIC) has rolled out a unique project to produce
§ It provides a guarantee cover worth Rs. 20,000 NEERA and PALM JAGGERY which has huge
crores to the promoters who can take debt from potential to create employment.
the banks to further invest in their stressed § The project that aims at promoting Neera as a
MSMEs as equity. substitute to soft drinks while also creating self-
§ Implementation: The scheme will be employment to Adivasis and traditional trappers
operationalized through Credit Guarantee Fund was launched at Dahanu in Palghar district of
Trust for MSEs (CGTMSE). Maharashtra.
§ Neera, extracted from palm trees before
Features of the Scheme: sunrise, is a nutrient-rich health drink
§ Promoter(s) of the MSMEs will be given credit consumed in many states.
equal to 15% of their stake (equity plus debt) or
Rs. 75 lakh whichever is lower. The Khadi and Village Industries Commission
§ Promoter(s) in turn will infuse this amount in (KVIC):
the MSME unit as equity and thereby enhance § It is a statutory body established under Khadi and
the liquidity and maintain debt-equity ratio. Village Industries Commission Act, 1956.
§ 90% guarantee coverage for this sub-debt will § Ministry: It is an apex organisation under the
be given under the Scheme and 10% would come Ministry of Micro, Small and Medium
from the concerned promoters. Enterprises.
§ Functions: seeks to – “plan, promote, facilitate,
ANIMAL HUSBANDRY INFRASTRUCTURE organise and assist in the establishment and
DEVELOPMENT FUND development of khadi and village industries in the
rural areas in coordination with other agencies
11

engaged in rural development wherever § Coverage: The fund will provide loans to
necessary.” Primary Agricultural Credit Societies (PACS),
Marketing Cooperative Societies, Farmer
SAHAKAR MITRA SCHEME Producers Organizations (FPOs), Self Help Group
§ It aims to help cooperative institutions access (SHG), farmers, Joint Liability Groups (JLG) among
innovative ideas of young professionals while others.
the interns will gain experience of working in the § All loans will have interest subvention of 3% per
field to be self-reliant. annum up to a limit of ₹2 crore. This subvention
§ Nodal Agency: Sahakar Mitra Scheme is an will be available for a maximum period of seven
initiative of National Cooperative Development years.
Corporation (NCDC). § Credit guarantee coverage will also be available
§ Eligibility: Professional graduates in for eligible borrowers from this financing facility
disciplines such as Agriculture and allied areas, IT under Credit Guarantee Fund Trust for Micro
etc. and also who are pursuing or have and Small Enterprises (CGTMSE) scheme for a
completed their MBA degrees in Agri-business, loan up to ₹2 crore.
Cooperation, Finance, International Trade etc will § The National, State and District level
also be eligible. Monitoring Committees will be set up to ensure
§ Financial Support: Each intern will get financial real-time monitoring and effective feed-back.
support over a 4 months internship period.
§ Significance: The scheme is expected to assist Farmer Innovation Fund
cooperative institutions to access new and Indian Council of Agricultural Research (ICAR) is
innovative ideas of young professionals while the poised to set up fund as a part of this system, an
interns gain experience of working in the field innovation centre would be established in New
giving the confidence to be self-reliant. Delhi where the innovations would be scientifically
validated.
National Cooperative Development
Corporation: International Fund for Agricultural
§ NCDC was established by an Act of Parliament Development (IFAD)
in 1963 as a statutory Corporation under the • Established in 1977, it is an international
Ministry of Agriculture & Farmers’ Welfare. financial institution and a specialized agency of
§ Head Office at New Delhi and multiple Regional the United Nation. It is headquartered in Rome,
Offices. Italy.
§ It is a major financial institution for • It is one of the major outcomes of the 1974
cooperatives, and has recently started Mission World Food Conference.
Sahakar 22, which aims to double farmers’ • It invests in rural people by empowering them
income by 2022. to reduce poverty, increase food security,
improve nutrition and strengthen resilience.

The Union Government had constituted an inter-
ministerial committee headed by Ashok Dalwai to ZORAM MEGA FOOD PARK (MFP)
prepare a blueprint for doubling farmers' income by • This is the first Mega Food Park operationalized in
2022.
the State of Mizoram.

AGRICULTURE INFRASTRUCTURE FUND Mega Food Parks scheme:
§ Aims to provide a medium-long term debt • Parent Ministry: Ministry of Food Processing
financing for investment in viable projects for Industries is implementing Mega Food Park
post-harvest management Infrastructure and Scheme in the country since 2008.
community farming assets through interest • Aim: It aims at providing a mechanism to link
subvention and financial support. agricultural production to the market by
§ Duration: FY 2020 to 2029. bringing together farmers, processors and
retailers.

12

• Funding: A maximum grant of Rs 50 crore is given • No group of related commodities may constitute
for setting up a MFP, in minimum 50 acres of more than 40% of the total weightage in the index
contiguous land with only 50% contribution to in order to ensure diversification.
the total project cost. • NCDEX has partnered with National Stock
• Implementation: Implemented by a Special Exchange (NSE) Indices, a leading Index service
Purpose Vehicle (SPV) which is a Body Corporate provider, to maintain and disseminate real-time
registered under the Companies Act. NCDEX AGRIDEX values.
• Benefits: These food parks give a major boost to
the food processing sector by adding value and About NCDEX:
reducing food wastage at each stage of the supply • It is the country’s leading agricultural
chain with particular focus on perishables. commodity exchange, which offers services
across the entire value-chain of agricultural
KHAZAN AGRICULTURE
commodities.
• It is practised in Goa’s estuarine system. This • It offers a wide range of benchmark products
system is a carefully designed topo-hydro- across agriculture commodities.
engineered agro-aquacultural ecosystem • It brings buyers and sellers together
mainly based on the regulation salinity and tides. through its electronic trading platform.
• In low-lying brackish coastal floodplains and
mangrove forests, bunds are made using locally POKKALI RICE: KERALA
available material to prevent the ingress of
saltwater. • Farmers in West Bengal are experimenting with
• To control the flow of tidal waters, openings are the Pokkali variety of rice.
built in the bunds fitted with one-way gates. • The pokkali variety of rice is known for its
These channels fill in with the oncoming tide and saltwater resistance and flourishes in the rice
bring with them fish, crab and shrimp, and the paddies of coastal Kerala districts.
gates would automatically shut when the water • The uniqueness of the rice has brought it the
level was equal on both sides. Geographical Indication (GI) tag.
• This prevents the water from overflowing into • The organically-grown Pokkali is famed for its
the fields used to grow paddy and which has a low peculiar taste and its high protein content.
tolerance to salt. When the tide receded, these • Pokkali has medicinal properties and its higher
gates would open outwards automatically, value of antioxidants and low carbohydrate
allowing the water to drain out. content makes it preferable to those on a low
• The Khazan system allows for the farmer and the sugar diet.
fisher to harmoniously coexist. • Other GI Tag Registered Varieties from Kerala:
Kaipad, Wayanad Jeerakasala, Wayanad
AGRIDEX Gandhakasala, Palakkadan Matta and Navara.
• National Commodity and Derivatives Exchange KRISHI MEGH
(NCDEX) announced the commencement of
trading in the country’s first agriculture futures • It is a data recovery centre setup to protect the
index called AGRIDEX. data of the Indian Council of Agricultural Research
• NCDEX AGRIDEX is India’s first return based (ICAR).
agricultural futures Index which tracks the • It aims to meet the services and infrastructure
performance of the ten liquid commodities (both needs of Digital Agriculture of National
kharif and rabi seasons) traded on NCDEX Agricultural Research and Education System
platform. (NARES).
• Ten commodities include Castor seed, Chana, • The centre has been set up at National Academy
Coriander, Cotton Seed Oil cake, Guar Gum, Guar of Agricultural Research Management
Seed, Jeera, Mustard Seed, Ref Soya oil and Soy (NAARM), Hyderabad.
bean. • Significance: It is a step forward towards digital
agriculture of New India.


13

National Agricultural Research & Education • To create robust supply chain infrastructure for
System: perishables
• NARES is a Government of India-World Bank • Implemented by the Ministry of Food Processing
funded project, designed for strengthening the Industries (MoFPI).
national agricultural education system in the
country. Components: Seven component schemes under
• The overall objective of the project is to provide PMKSY:
more relevant and high-quality education to the 1. Mega Food Parks.
agricultural university students that is in tune 2. Integrated Cold Chain and Value Addition
with the New Education Policy - 2020. Infrastructure.
3. Infrastructure for Agro-Processing Clusters.
Indian Council of Agricultural Research 4. Creation of Backward and Forward Linkages.
(ICAR): 5. Creation/Expansion of Food Processing &
• It is an autonomous organisation under the Preservation Capacities.
Department of Agricultural Research and 6. Food Safety and Quality Assurance Infrastructure.
Education (DARE), Ministry of Agriculture 7. Human Resources and Institutions.
and Farmers Welfare.
• Union Minister of Agriculture serves as its NATIONAL BAMBOO MISSION
president.
• Recently Union Minister for Agriculture and
Farmers’ Welfare has virtually inaugurated 22
RESTRUCTURED WEATHER BASED CROP bamboo clusters.
INSURANCE SCHEME • The restructured NBM was launched in 2018-19
• Launched in 2016, all farmers including for the holistic development of the complete
sharecroppers and tenant farmers growing the value chain of the bamboo sector and is being
notified crops in the notified areas are eligible for implemented in a hub (industry) and spoke
coverage. model.
• Nodal Agency: Ministry of Agriculture & Farmers • It aims to connect farmers to markets so as to
Welfare. enable farmer producers to get a ready market for
• However, farmers should have an insurable the bamboo grown and to increase the supply of
interest on the insured crop. appropriate raw material to the domestic
• The non-loanee farmers are required to submit industry.
necessary documentary evidence of land records. • The Sector Skill Councils established under the
• Major weather perils covered under the scheme National Skill Development Agency (NSDA) will
are rainfall, relative humidity, temperature, wind impart skills and recognition of prior learning to
speed and Hailstorms. traditional artisans, encouraging the youth to
• Risk period would ideally be from the sowing carry forward their family traditions.
period to the maturity of the crop. • NBM also supports local artisans through
locally grown bamboo species, which will
PM KISAN SAMPADA YOJANA actualize the goal of Vocal for Local and help
increase the income of farmers, reducing
• It is a Central Sector Scheme aimed at creating
dependency on imports of raw material.
modern infrastructure with efficient supply

chain management from farm gate to retail outlet.
Indian Forest Act and Bamboo cultivation
Objectives: • The Indian Forest Act 1927 was amended in 2017
• Creation of modern infrastructure for food to remove bamboo for the category of trees.
processing mega food parks/ clusters and • As a result, anyone can undertake cultivation and
individual units business in bamboo and its products without the
• To create effective backward and forward need of a felling and transit permission.
linkages – linking farmers, processors and • Import policy has also been modified to ensure
markets the progress of the bamboo industry in the
country.

14

Rashtriya Gokul Mission • The Biotech-Krishi Innovation Science Application
Network (Biotech-KISAN) programme focuses on
• Under Ministry of Agriculture & Farmers Welfare.
taking innovative technologies to the farmers.
• Aims to conservation and development of
• It is a farmer centric scheme for farmers by the
indigenous breeds in a focused and scientific
Ministry of Science & Technology, developed by
manner.
and with farmers.
• It is a project under National Programme for
• It is a pan-India program, following a hub-and-
Bovine Breeding and Dairy Development.
spoke model and stimulates entrepreneurship
• The objectives of this mission include
and innovation in farmers and empowers women
Conservation of indigenous breeds and their
farmers.
development to improve their genetic makeup,
• It has a unique feature to identify and promote
enhancing the milk productivity and distribution
local farm leadership in both genders.
of disease free high genetic merit bulls for natural
service. • It aims to understand the problems of water,
soil, seed and market faced by the farmers and
• Scheme is implemented on 100% grant-in-aid
provide simple solutions to them.
basis and throughout the country.
• The Biotech-KISAN hubs are expected to fulfil the
PRADHAN MANTRI MATSYA SAMPADA YOJANA technology required to generate agriculture
(PMMSY) and bio-resource related jobs and better
livelihood ensuring biotechnological benefits to
• It is a flagship scheme for focused and small and marginal farmers.
sustainable development of the fisheries • Currently, there are a total of eight Biotech-
sector in the country as a part of the Atma Nirbhar KISAN Hubs in different Agro-climatic Zones.
Bharat Abhiyan.
• Nodal Ministry: Department of Fisheries, KRITAGYA HACKATHON
Ministry of Animal Husbandry, Dairying and
Fisheries. • It is being organized in order to promote
potential technology solutions for enhancing
• The scheme Adopt ‘Cluster or Area-based
farm mechanization with special emphasis on
Approaches’ and create fisheries clusters through
women friendly equipment.
backward and forward linkages.
• The hackathon has been planned by the Indian
• It focuses especially on employment generation
Council of Agricultural Research (ICAR) under
activities such as seaweed and ornamental fish
National Agricultural Higher Education Project
cultivation.
(NAHEP).

• Students, faculties and
innovators/entrepreneurs from any
university / technical institution across the
country can apply and participate in the event in
the form of a group.
• It will help in enhancing the learning
capabilities, innovations and disruptive
solutions, employability and entrepreneurial
drive in Farm Mechanization sector.
PAKUR HONEY
• Recently, the Union Minister of Tribal Affairs
has decided to launch 'Pakur Honey' through
TRIFED & Tribes India.
• It is 100% natural honey which is Multi Floral,
Forest Fresh, gathered by Santhal Tribals and
Vulnerable Pahadhiya tribes from Pakur,
BIOTECH-KISAN PROGRAMME Jharkhand.

15

• The tribal Santhal community of Pakur District, • It is a long-standing partnership with Amazon,
Jharkhand have set an example by exploring the which has enabled sellers and artisans to sell
potential of beekeeping commercially. Tribes India products across India and the world.
• The Pure Multiflora Honey is collected from a • It will help to accelerate the growth of tribal-
variety of flowers and floras. owned and run handicraft businesses, TRIFED
• The Natural Multiflora honey is a good source of (Tribes India) will now be associated with
anti-oxidants and antiseptic vitamins, Amazon’s Seller Flex Program.
nutrients, enzymes and other herbal properties. • This program is intended to share Amazon’s best
practices in warehousing, inventory
TRIBES INDIA E-MARKETPLACE management, and shipping with sellers.
• Minister of Tribal Affairs will virtually launch • The support and expertise from Amazon will help
India’s largest handicraft and organic products empower thousands of artisans and weavers
marketplace- Tribes India E-Marketplace on the who are part of Tribes India.
occasion of Gandhi Jayanti (2nd October). Minor Forest Produce (MFP)
• It is an ambitious initiative through which TRIFED • The non-wood forest products generally
aims to onboard 5 lakh tribal producers for
termed Minor Forest Produce.
sourcing of various handicraft, handloom,
• This includes all non-timber forest produce
natural food products across the country and
of plant origin and includes bamboo, canes,
brings to you the best of tribal produce.
fodder, leaves, gums, waxes, dyes, resins and
• The suppliers comprise of individual tribal
many forms of food including nuts, wild fruits,
artisans, tribal SHGs, Organisations/
honey, lac, tusser etc.
Agencies/ NGOs working with tribals.
• Significance: This path-breaking initiative of
TRIFED under the Ministry of Tribal Affairs will Recent initiatives by TRIFED:
showcase the produce and handicrafts of tribal • Tech for Tribals, an initiative of TRIFED
enterprises from across the country. supported by Ministry of MSME, aims at capacity
• It will help them market their products building and imparting entrepreneurship
directly. skills to tribal forest produce gatherers enrolled
under the Pradhan Mantri Van Dhan Yojana
(PMVDY).
TRIFED
• Launched Van Dhan Samajik Doori Jagrookta
• TRIFED is a national-level apex organization Abhiyaan, which is aimed at educating Tribals
functioning under administrative control of engaged in gathering NTFPs in forest areas, on
Ministry of Tribal Affairs. covid-19 response, key preventive behaviour like
• Established in August 1987 by then Ministry of social distancing, home quarantine, hygiene tips.
Welfare under Multi State Cooperative • Initiated steps to provide the Van Dhan Self Help
Societies Act 1984 (which has now been Groups (SHGs) with protective masks and
replaced by Multi-State Cooperative Societies hygiene products (Soaps, Disinfectants, etc.) that
Act, 2002). are necessary for carrying out their operations in
• TRIFED helps tribal people manufacture a safe manner.
products for national and international
markets on a sustainable basis. KUMBHAR SASHAKTIKARAN YOJANA
• It also supports the formation of Self-Help
Groups and imparting training to them. • Recently, electric pottery wheels to 100 potter
families in Maharashtra were distributed under
• Headquartered in New Delhi.
the KSY of Khadi and Village Industries
• It mainly undertakes two functions Minor
Commission (KVIC).
Forest Produce (MFP) development and
• Launched in 2018, aims to strengthen and
Retail Marketing and Development.
improve the living of potters in the country by
making them self-reliant (Atma Nirbhar).
TRIBES INDIA joins Amazon Seller Flex program:

16

• Features: Providing potters with modern • It is set to bring academic credit banks and
equipment and training to reconnect them with degree programmes with multiple entry and
the society and revive their art. exit options to the 74 universities focused on crop
• Implementation: KVIC has created proper sciences, fisheries, veterinary and dairy training
marketing channels including tie-up with the and research.
Indian Railway for selling the products of potters.
Student READY
• Benefits: Proper training and distribution of
• NAHEP has launched the Student READY -
advanced equipment under the scheme has
Rural Entrepreneurship Awareness
eliminated drudgery from the process of
Development Yojana.
pottery making and also resulted in increasing
• The programme requires all students to
the production by 3-4 times.
undertake a six-month internship.
PILOT SCHEME ON FORTIFICATION OF RICE • The internship is provided usually in their
fourth year, to gain hands-on training, rural
• It is a Centrally Sponsored Scheme which aims awareness, industry experience, and research
to address anaemia and micronutrients’ expertise and entrepreneurship skills.
deficiency amongst beneficiaries consuming rice
supplied under PDS.
SAHAKAR PRAGYA
• Implementation: 15 State Governments have
identified their respective districts (1 district per • It is an innovative capacity building initiative for
state) for implementing the Scheme. the farmers associated with such entities in the
country.
It is the deliberate addition of one • Sahakar Pragya is the latest in the series of farmer
Food or more micronutrients to food so focused steps by National Cooperative
Fortification as to correct or prevent a deficiency Development Corporation (NCDC).
and provide a health benefit. • The 45 new training modules of Sahakar Pragya
It is the process by which the of the NCDC will impart training to primary
Bio nutritional quality of food crops cooperative societies in rural areas along with
Fortification is improved through agronomic Lakshmanrao Inamdar National Cooperative
practices, conventional plant Research and Development Academy (LINAC).
breeding or modern biotechnology. • Sahakar Pragya embodies enhancing NCDC’s
training capacity by 18-fold through an
NATIONAL AGRICULTURAL HIGHER EDUCATION elaborate network of 18 Regional Training
POLICY Centers across the country by the dedicated
• ICAR has recently launched Rs.1100 crore LINAC set up and fully funded by NCDC.
ambitious National Agricultural Higher Education
Project (NAHEP). Some Initiative of NCDC:
• Funding by World Bank and the Indian Ø SAHAKAR-22 to develop cooperatives are in
Government on a 50:50 basis. focus; 222 districts, including aspirational
• The objective of the NAHEP for India is to support districts, Nurturing Primary Level Cooperatives.
participating agricultural universities and Ø SAHAKAR MITRA – Scheme on Internship
Programme
ICAR in providing more relevant and higher
Ø YUVA SAHAKAR– Start Up Scheme in
quality education to Agricultural University
Cooperatives
students.
Ø AYUSHMAN SAHAKAR– for creation of
• In addition, a four-year degree in Agriculture,
healthcare infrastructure and services are also
Horticulture, Fisheries and Forestry has been
active schemes.
declared a professional degree.
• The overall objective of the project is to provide
more relevant and high-quality education to
the agricultural university students that is in tune
with the New Education Policy – 2020.

17

National Cooperative Development recommended by them at least cover these costs
Corporation (NCDC): in some of the major producing States.
• It is a statutory corporation set up under the
National Cooperative Development It covers all paid-out costs directly
Corporation Act, 1962. incurred by the farmer — in cash
• Parent Organization: Under the Ministry of A2 and kind — on seeds, fertilizers,
Agriculture & Farmers Welfare. pesticides, hired labour, leased-in
• The objectives of NCDC are planning and land, fuel, irrigation, etc.
promoting programmes for production, A2+FL It includes A2 plus an imputed value
processing, marketing, storage, export and of unpaid family labour.
import of agricultural produce, livestock etc. It is a more comprehensive cost that
on cooperative principles. C2 factors in rentals and interest
• It is the apex financing organization of Union forgone on owned land and fixed
Agriculture Ministry. capital assets on top of A2+FL.
• It is a major institution for cooperatives.
DRAFT MODEL TENANCY ACT, 2019
• NCDC functions through its Head Office at
New Delhi and multiple Regional Offices. • It envisages to balance the interest and rights of
both the owner and tenant and to create an
MINIMUM SUPPORT PRICE (MSP) accountable and transparent ecosystem for
renting the premises in disciplined and efficient
• The major demand of the protesting farmers has manner.
been that the government guarantee in writing the • The Model Act provides for its applicability for the
MSP system, which assures them of a fixed price whole of the State i.e., urban as well as rural
for their crops, 1.5 times of the cost of areas in the State.
production. • Establish Rent courts and Tribunals:
• MSP is the minimum price paid to the farmers for
Ø Rent Authority may direct for
procuring food crops. It is announced by the compensation on the person responsible for
Government at the beginning of the sowing cutting off or withholding the essential supply.
season. Ø To ensure speedy redressal of disputes, it
• Government announces minimum support also proposes to establish Rent Court and
prices (MSPs) for 22 mandated crops and fair Rent Tribunal that have to dispose off the
and remunerative price (FRP) for sugarcane by cases within 60 days.
taking into account the supply and demand Ø Act provides for fast-track quasi-judicial
situation for the commodity; market price trends mechanism for adjudication of disputes.
and implications for consumers (inflation), Officer of the rank of deputy collector or
environment and terms of trade between higher will act as rent authority to
agriculture and non-agriculture sectors. adjudicate any issue arising out of a rental
disagreement
Which production costs were taken in fixing the • Rent: All premises (residential or commercial)
MSPs? shall be rented only after a written agreement on
• CACP considers both A2+FL and C2 costs while mutually agreed terms.
recommending MSP. However, C2 costs are used • Security Deposits: It proposes to cap the security
by CACP primarily as benchmark reference deposit to maximum of two month’s rent in case of
costs (opportunity costs) to see if the MSPs residential properties and Security deposit to be
refunded by the landlord at the time of taking over
Commission for Agricultural Costs and Prices vacant possession of the premises.
(CACP) • Repair and Maintenance: If the landowner
• It is an attached office of the Ministry of refuses to carry out the required repairs, the
Agriculture and Farmers Welfare. tenant can get the work done and deduct the same
• Formed on 1 January 1965. from periodic rent. A landowner cannot enter the
• It is not a statutory body set up through an rented premises without 24-hour prior notice to
Act of Parliament. carry out repairs or replacement.
18

TRIFOOD PARKS KISAN CREDIT CARD (KCC) SCHEME
• The TRIFED operating under Ministry of Tribal • The Kisan Credit Card (KCC) scheme was launched
Affairs signed a memorandum of understanding by the Government of India in 1998.
with Akhil Bhartiya Vanvasi Kalyan Ashram to • It is being implemented by Commercial Banks,
setup TRIFOOD parks in Madhya Pradesh. RRBs, Small Finance Banks and Cooperatives.
• It is a joint initiative of TRIFED (under the • Objective: To provide adequate and timely
Ministry of Tribal Affairs) and the Ministry of credit support from the banking system to the
Food Processing. farmers for their cultivation and other needs as
• TRIFOOD Parks are food processing centers indicated below:
aiming at promoting value addition to minor Ø To meet the short-term credit requirements
forest produce. for cultivation of crops;
• It was launched under the Van Dhan Yojana in Ø Post-harvest expenses and Produce marketing
2020. loan;
• The parks procure raw materials from the Van Ø Consumption requirements of farmer
Dhan Kendras and process them to be sold across household;
the country through Tribes India outlets. Ø Working capital for maintenance of farm
• The minimum support price for minor forest assets and activities allied to agriculture;
produce is fixed by the Tribal Affairs Ministry Ø Investment credit requirement for agriculture
and it is revised every three years by a pricing and allied activities.
cell constituted under the Ministry. • Coverage: Small farmers, marginal farmers,
sharecroppers, oral lessee and tenant farmers, Self
SAGUNA RICE TECHNIQUE Help Groups (SHGs) or Joint Liability Groups
• The Saguna Rice Technique (SRT) technique will (JLGs) are eligible for availing benefits under the
help stop the stubble burning in Punjab and scheme.
Haryana.
OPEN MARKET SALE SCHEME (OMSS)
• This zero till technique is a unique Conservation
Agriculture (CA) type of cultivation method. • For sale of wheat and rice so as to check
• This method is used to cultivate rice and related inflationary trend in prices of foodgrains.
rotation crops without ploughing, puddling and • By Food corporation of India (FCI) has been to
transplanting rice on permanent raised beds. carry buffer stocks.
• The SRT iron forma tool facilitates planting of • Recently Food Ministry has allowed NGOs and
crop in predetermined distances enabling precise charitable organisations to directly buy wheat and
plant population per unit area. rice from the Food Corporation of India at Open
Market Sale Scheme rates without going through
PRODUCTION OF SAFFRON AND HEENG the e-auction process.
(ASAFOETIDA) IN INDIA • So far, only State governments and registered bulk
• Institute of Himalayan Bioresource Technology users like roller flour mills were allowed to do so.
(CSIR-IHBT) and the Government of Himachal
CONSUMER-FARMER (CONFARM) INITIATIVE
Pradesh, have jointly decided to increase the
production of these two spices. • An unique initiative by Telangana govt. to ensure
• The introduction of IHBT developed crops of food availability to consumers and secure income
heeng and saffron is expected to reduce the import for farmers.
of these spices. • Confarm initiative was started in 2018 by Deccan
• Recently, the Kashmir saffron got Geographical Development Society (DDS) and Disha Collective,
Indication (GI) tag status. the two community-level organizations.
• There is no production of heeng in India and • Under this, consumers support a group of farmers
currently about raw heeng is being imported in the beginning of a farming season with about Rs
from Afghanistan, Iran, and Uzbekistan. 12,500 per acre for their farming needs.
• Heeng is a perennial plant and it produces resin • In return, at the time of harvest, consumers are
from the roots after five years of plantation. given products according to the value they
invested leaving the middlemen out.
19

2. INDUSTRY AND INFRASTRUCTURE undertake planning & development, mobilization
of financial resources and construction,
DEDICATED FREIGHT CORRIDOR (DFC) maintenance and operation of the DFCs.
• It has been set up with 100% equity by Ministry
Indian Railways conducted a trial run on Rewari – of Railways and registered as a company under
Madar Section of Western Dedicated Freight Corridor the Companies Act 1956.
(WDFC).

Western Dedicated Freight Corridor (WDFC):
• WDFC connecting Dadri in UP to Mumbai-
Jawaharlal Nehru Port (JNPT) will traverse
through the states of UP, Haryana, Rajasthan,
Gujarat and Maharashtra.

Eastern Dedicated Freight Corridor (EDFC):
• EDFC, starting from Dankuni in West Bengal will
pass through the States of Jharkhand, Bihar, UP
and Haryana to terminate at Ludhiana in Punjab.
RAILWAY RESTRUCTURING
• Recently, Union Cabinet approved organizational
restructuring of the Indian Railways (IR).
• Presently, the management and administration of
Railways is governed by a pool of Group A officers,
drawn from Indian Engineering Services (such
as Indian Railway Service of Engineers etc.) and
the Civil Services (such as Indian Railway Traffic

Service etc.) in eight technical and non-technical
About DFC: cadres respectively.
• DFC is a high-speed and high-capacity railway •
Restructuring of the Railways has been on the
corridor dedicated exclusively for freight (goods agenda for decades, as unification of services has
and commodity) movement. been recommended by various committees
• The project was first proposed in April 2005 to including:
address the needs of the rapidly developing Indian Ø Prakash Tandon Committee (1994),
economy. Ø Rakesh Mohan Committee (2001),
• In 2006, the Government of India established a Ø Sam Pitroda Committee (2012)
Ø Bibek Debroy Committee (2015).
dedicated body, the Dedicated Freight Corridor
Corporation of India (DFCCIL), to develop two
KELKAR COMMITTEE
corridors- Western Dedicated Freight Corridor
Appointed in 2015 on Revisiting & Revitalising the
(WDFC) and Eastern Dedicated Freight Corridor
PPP model of Infrastructure Development
(EDFC).
• Four more Freight Corridors were also announced
in 2010: Railway restructuring: The approved reforms -
1. East-West Corridor (Kolkata-Mumbai) • Creation of Indian Railway Management
2. North-South Corridor (Delhi-Chennai) Service (IRMS): A unified central service by the
3. East Coast Corridor (Kharagpur-Vijaywada) unification of the existing eight Group A
4. Southern Corridor (Chennai-Goa) services of the Railways in consultation with
Department of Personnel and Training and UPSC
About Dedicated Freight Corridor Corporation of to facilitate recruitment and enable Railways to
India (DFCCIL): recruit engineers/non-engineers as per need.
• It is a Special Purpose Vehicle set up under the • Re-organisation of Railway Board: Railway
administrative control of Ministry of Railways to board will no longer be organised on
20

departmental lines, and replaced with a leaner 4. Machine Learning and Cloud Computing
structure organised on functional lines. The board
will have a Chairman, who will act as 'Chief
Executive Officer (CEO)' along with 4 Members
responsible for Infrastructure, Operations &
Business Development, Rolling Stock and
Finance respectively.
• The existing service of Indian Railway Medical
Service (IRMS) to be consequently renamed as
Indian Railway Health Service (IRHS).

About Railway Board:
• It is the apex decision-making body of Indian
Railways which reports to the Parliament via
the ministry of railways. MAKE IN INDIA INITIATIVE
• It is organized into various departments like • Initiative by Ministry of Commerce and
mechanical, electrical, traffic and finance that Industry.
are vertically separated from the top to bottom. • The three major objectives were:
• A member of the board, usually a secretary 1. to increase the manufacturing sector’s growth
rank officer, heads each department. rate to 12-14% per annum in order to increase
the sector’s share in the economy;
KISAN RAIL SCHEME 2. to create 100 million additional
manufacturing jobs in the economy by 2022;
• Kisan Rail is proposed under Union budget
and
2020-2021 to build seamless national cold supply
3. to ensure that the manufacturing sector’s
chain for perishable goods like milk, meat and fish
contribution to GDP is increased to 25% by
• Indian Railways will set up a “Kisan Rail” through
2022 (revised to 2025) from the current 16%.
PPP arrangements.
• There shall be refrigerated coaches in Express and NATIONAL STARTUP ADVISORY COUNCIL
Freight trains.
• In accordance to the scheme, temperature- • Government has set up the National Startup
controlled centres have been set up in Uttar Advisory Council to advise the government on
Pradesh, Delhi and Maharashtra under Kisan nurturing the culture of innovation among the
Vision project of the Container Corporation of citizens.
India. • National Startup Advisory Council was formed
with an aim to drive sustainable economic
INDUSTRY 4.0 growth and generate employment
opportunities.
• ‘Industry 4.0’ commonly referred to as the fourth
industrial revolution, is a name given to the Composition of the Council:
current trend of automation, interconnectivity
• Chairman: Minister for Commerce & Industry.
and data exchange in manufacturing
• Convener of the Council: Joint Secretary,
technologies to increase productivity.
Department for Promotion of Industry and
• It provides insight into production process to take
Internal Trade.
the decisions in real time basis, minimizing
• Ex-officio Members: Nominees of the concerned
human errors and ensure that resources are put
Ministries/ Departments/Organisations not
to the best utilization, what is called the Overall
below the rank of Joint Secretary.
Equipment Effectiveness (OEE).
• Non-official members, to be nominated by the
• Industry 4.0 is a complex Cyber-Physical
Central Government, from various categories like
Systems which synergizes production with:
founders of successful startups, veterans who
1. Internet of Things
have grown and scaled companies in India,
2. Artificial Intelligence
persons capable of representing the interests of
3. Big Data & Analytics
21

investors into startups, etc. The term of the non- promotion (CRP-EP) who are local and support
official members will be for a period of two years. entrepreneurs setting-up rural enterprises.
• The CRP-EPs are certified and provides business
Functions: support services to the entrepreneurs.
• The Council will suggest measures to foster a
culture of innovation amongst citizens and WHAT IS A STARTUP ?
students, in particular, promote innovation in all An entity will be considered a startup if it fulfills the
sectors of the economy across the country. conditions:
• It will also suggest measures to facilitate public • Entity Type: Incorporated as a private limited
organizations to assimilate innovation with a company or Registered as a partnership firm or
view to improving public service delivery, Registered as a limited liability partnership in
promote creation, protection and India
commercialization of intellectual property rights. • Turnover: Must not exceed 100 crore rupees
• Further, it will suggest measures to make it in any fiscal year.
easier to start, operate, grow and exit • Age: Below 10 years from date of incorporation
businesses by reducing regulatory compliances • Nature of Activity: working towards –
and costs, promote ease of access to capital for Innovation, Development or improvement of
start-ups. products/services, Scalability, Job or Wealth
START-UP VILLAGE ENTREPRENEURSHIP Creation.
PROGRAMME (SVEP)
NORTH EAST GAS GRID PROJECT
SVEP has made an impressive progress and has
extended business support services and capital • Cabinet approves Capital Grant as Viability Gap
infusion to 153 blocks of 23 states as of August 2020. Funding to Indradhanush Gas Grid Limited for
setting up the North East Natural Gas Pipeline
About: Grid.
• It is a sub-scheme under the Deendayal Antodaya • As per the plan, Gas Pipeline Grid would be
Yojana-National Rural Livelihoods Mission (DAY- developed in the eight states of the North-Eastern
NRLM). region i.e., Arunachal Pradesh, Assam, Manipur,
• It is a flagship rural livelihood mission of Ministry Meghalaya, Mizoram, Nagaland, Sikkim and
of Rural Development. Tripura.
• Objective: It has the objective of helping rural • Total length of pipeline is 1656 KM and tentative
households including women to set-up project cost is Rs 9265 crore.
enterprises. • Quantum of viability Gap Funding (VGF) would
• Focus of the scheme: Providing self- be capped at 60% of estimated project cost.
employment opportunities with financial • The Capital Grant will provide natural gas
assistance and training in business management supplies to various types of consumers viz.
and soft skills while creating local community Industrial, Domestic, CNG (Transport) etc.
cadres for promotion of enterprises. • Availability of Natural gas across the region is
• Entrepreneurship Development Institute of India expected to boost industrial growth without
(EDII), Ahmedabad is the technical support impacting the environment.
partner of SVEP. • It is a part of “Hydrocarbon Vision 2030 for
• SVEP promotes both individual and group North-East India” .
enterprises, set-up and promote enterprises
majorly on manufacturing, trading and service Indradhanush Gas Grid Limited (IGGL) is a joint
sectors. venture company of five Central Public Sector
Enterprises (IOCL, ONGC, GAIL, Oil India Limited
Who are community resource persons – and Numaligrh Refinery Limited) incorporated to
enterprise promotion? develop and operate Natural gas pipeline grid
• The programme seeks to develop pool of in North-East region.
community resource persons – enterprise
22

Viability Gap Funding • Regulates the refining, processing, storage,
• It is usually seen that many projects, like a road transportation, distribution, marketing and sale of
connecting a rural area, generates high petroleum, petroleum products and natural gas
economic returns, but the financial returns excluding production of crude oil and natural gas
may not be sufficient for a profit seeking so as and to ensure uninterrupted and adequate
investor. supply of petroleum, petroleum products and
• In such condition, the project would not natural gas in all parts of the country.
attract private investment. In such cases, the
government extends its support to the OIL AND GAS EXPLORATION
investors by sharing a fraction of the cost, • Environment Ministry has exempted oil and gas
making the project viable. firms, looking to conduct exploratory drilling,
• For the successful completion of such projects, from seeking environmental clearance.
the government has designed Viability Gap • Until today, exploratory surveys have merited the
Funding (VGF). highest level of environmental scrutiny — called
• Viability Gap Finance means a grant to category ‘A’ — that required project proponents to
support projects that are economically prepare an environment impact assessment (EIA)
justified but not financially viable. plan, have it scrutinised by a Centrally constituted
committee of experts and subject the proposal to
NATIONAL GAS GRID a public hearing involving the locals of the
proposed project site.
• It is an interconnected National Gas Grid has been
• While public hearings, even for category A
envisaged to ensure the adequate availability and
projects are frequently exempted if they are
equitable distribution of natural gas in all parts of
offshore, the new amendments demote
the country.
exploratory projects to the category of ‘B2’. This
• At present, there are about 16800 km long Natural means it will be conducted by the States
Gas pipeline network which is operational in the concerned and will not require an EIA.
country.
• Development of an offshore or onshore drilling
• It aims to balance regional power inequality, site as a hydrocarbon block will, however,
Connect various Gas sources and develop City Gas continue to merit a category A treatment.
Distribution (CGD) Networks in various cities for
supply of CNG and PNG. Nanar Oil Refinery Project: in Maharashtra. An
• PM Urja Ganga Project is part of this. ambitious three trillion dollar joint venture
between IOC, HPCL and BPCL and Saudi Petroleum
CITY GAS DISTRIBUTION (CGD) NETWORKS
giant Aramco and Abu Dhabi National Oil Company.
• Under the Petroleum and Natural Gas
Regulatory Board (PNGRB) Act 2006, PNGRB ONGC BEGINS PRODUCTION IN BENGAL BASIN
grants the authorization to the entities for
developing a City Gas Distribution (CGD) network • Asokenagar-1 well, Bengal Basin in 24 Paragana
(including PNG network) in a specified district.
Geographical Area (GA) of the country. • India’s eighth functional basin after Krishna-
• CGD sector has four distinct segments – Godavari (KG), Mumbai Offshore, Assam Shelf,
Compressed Natural Gas (CNG) predominantly Rajasthan, Cauvery, Assam-Arakan Fold Belt and
used as auto-fuel and Piped Natural Gas (PNG) Cambay.
used in domestic, commercial and Industrial
INTEGRATED STEEL HUB
segments.
• Ministry of steel in partnership with CII and JPC is
Petroleum and Natural Gas Regulatory Board organizing the launch of Purvodaya-Accelerated
(PNGRB) Development of Eastern Region through an
• Statutory body constituted under The Petroleum Integrated Steel hub.
and Natural Gas Regulatory Board Act, 2006 to • The initiative aims at developing the eastern
protect the interest of the consumers. states through an integrated steel hub.

23

• The proposed Integrated Steel Hub would of the years from financial years 2019-20 to 2024-
encompass the states of Odisha, Jharkhand, 25.
Chhattisgarh, West Bengal and Northern
Andhra Pradesh. National Infrastructure Pipeline:
• The hub would enable swift capacity addition and • NIP will enable a forward outlook on
improve overall competitiveness of steel infrastructure projects which will create jobs,
producers both in terms of cost and quality. improve ease of living, and provide equitable
• In addition to increased steel capacity, this hub access to infrastructure for all, thereby making
would also help enhance best-in-class value growth more inclusive.
addition capabilities. • During the fiscals 2020 to 2025, sectors such as
Energy (24%), Roads (19%), Urban (16%), and
Benefits of the Hub: Railways (13%) amount to around 70% of the
• It would lead to socio-economic development in projected capital expenditure in infrastructure in
the Eastern region. India.
• It helps in significant employment opportunities • It has outlined plans to invest more than ₹102
across the entire value chain creating over 2.5 lakh crore on infrastructure projects by 2024-
Million jobs in the region. 25, with the Centre, States and the private sector
• It would also spur development in other to share the capital expenditure in a 39:39:22
manufacturing industries across sectors. formula.
IRON-ORE POLICY 2021 NATIONAL TECHNICAL TEXTILES MISSION

• Policy has been approved by Ministry of • Technical textiles are defined as textile materials
Railways. Policy governs the allocation of rakes and products manufactured primarily for their
and transportation of iron-ore. technical performance and functional
• Provisions will be updated in the rake allotment properties rather than aesthetic and decorative
system module by the Centre for Railway characteristics.
Information Systems (CRIS). • Ministry of Textiles is nodal agency.
• Scrutiny of documentation by Railways has been • Technical textiles include textiles for automotive
removed/ Executive Director Rake Movement of applications, medical textiles, geotextiles,
Railway Board (EDRM) office, Kolkata will have no agro-textiles, and protective clothing.
regulatory role in the new policy but will be • The Mission will be implemented for four years
undertaking an analysis of various iron-ore traffic from 2020-2021 and will have four components:
for further improvement of Railway freight 1. The first component will focus on research
loading. and development and innovation and will
have an outlay of ₹1,000 crore. The research
NATIONAL INFRASTRUCTURE PIPELINE will be at both, fibre level and application-
• Government has released Report of the Task based in geo, agro, medical, sports and
Force on National Infrastructure Pipeline for mobile textiles and development of bio-
2019-2025. degradable technical textiles.
• Prime Minister in his Independence Day speech 2. The second component will be for promotion
and development of market for technical
2019 had highlighted that ₹100 lakh crore would
be invested on infrastructure over the next 5 textiles. The Mission will aim at taking
years. domestic market size to $40 billion to $50
billion by 2024.
• The emphasis would be on ease of living: safe
3. The third component will focus on export
drinking water, access to clean and affordable
promotion so that technical textile exports
energy, healthcare for all, modern railway
from the country reach from the ₹14,000
stations, airports, bus terminals and world-class
crore now to ₹20,000 crore by 2021-2022
educational institutes.
and ensure 10% average growth every year till
• Task Force was constituted to draw up the
the Mission ends.
National Infrastructure Pipeline (NIP) for each
4. The last component will be on education,
training and skill development.
24

SPECIAL ECONOMIC ZONE (SEZ) • The TCEPF Regulations, 2007, which have now
been amended, provide the basic framework for
• Duty-free enclave and deemed to be foreign
depositing unclaimed money of consumers by
territory for the purposes of trade operations,
service providers, maintenance of the TCEPF and
duties and tariffs.
other related aspects.
• India’s SEZ Policy was implemented from 1 April,
• The income from the fund is utilised for
2000. Subsequently SEZ Act, 2005 was introduced.
programmes and activities relating to consumer
• Exports from SEZs are growing at a faster rate
education and protection.
than overall exports from the country.
• Baba kalyani committee was on special ‘BUNDLING’ TYPE SCHEME BY MNRE
economic zones (SEZ).
• Ministry of New and Renewable Energy (MNRE)
has prepared a "Draft Scheme for Supply of
NFE Rules: It is primary requirement for SEZ units
Round-The-Clock (RTC) Power from Renewable
to be eligible for benefits is to have a positive net Energy (RE) based (solar, wind or small hydro)
foreign exchange (NFE). Net Foreign Exchange
Power Projects, complemented with Power from
criteria is determined by subtracting the value of Thermal (coal) Power Projects."
imported inputs, input services and capital goods
• Bundling is a marketing strategy that consists of
along with the value of all payments made in
companies selling several products or services.
foreign exchange from the value of exports)
IREDA AND GREEN WINDOW
REAL TIME MARKET IN ELECTRICITY
• The Indian Renewable Energy Development
• Recently, Pan-India Real time market in Electricity Agency (IREDA) is planning to set up a dedicated
launched. It is an organised market platform “Green Window to serve the unserved segments of
enabling buyers and sellers to meet their energy renewable energy.
requirement closer to real time operation.
• Under this, auctions will be held 48 times a day, About Green Window:
once every half an hour. • A green window would lower the risk for
• It became operational on two platforms: Indian traditional banks to finance green energy and
Energy Exchange (IEX) and Power Exchange India tap into international capital to help India power
Limited (PXIL). its cities and rural communities.
• Power System Operation Corporation Ltd • Green windows, like green banks, are public
(POSOCO) will route electricity from supply entities created to work with the private sector
sources to consumption Point (POSOCO is wholly to increase investment in green energy and bring
owned Govt of India enterprise under Ministry of clean energy financing into the mainstream.
power) • They are innovative and new tools that have been
successful in the United Kingdom, Australia,
TELECOM INDUSTRY IN INDIA Japan, Malaysia and the United States.
• Currently, India is the world’s second-largest
telecommunications market with a subscriber Indian Renewable Energy Development
base of 1.16 billion and tele-density of 87.37% in Agency (IREDA):
FY20. • IREDA is India’s leading financial institution
• India also ranks as the world’s second largest dedicated to clean energy expansion.
market in terms of total internet users. • Since its founding under MNRE in 1987, IREDA
has financed the largest share of renewable
TELECOMMUNICATION CONSUMERS EDUCATION energy projects in India.
AND PROTECTION FUND (TCEPF)
• TRAI said telecom service providers will need to SARAS INITIATIVE
deposit all unclaimed money of consumers,
• Coal India’s flagship subsidiary NCL (Northern
including excess charges and security deposit into
Coalfields Limited) has set up a centre named
this.

25

SARAS (Science and Applied Research Clean Technology Fund:
Alliance and Support). • Aims to provide scaled up financing to
• It aims to promote innovation, R&D and skill contribute to the demonstration,
development along with improving company’s deployment and transfer of low-carbon
operational efficiency and utilize resources at technologies with a significant potential for
optimum level. long-term greenhouse gas emissions savings.
• SARAS will help and enable the company in • The World Bank is the Trustee and
Integration of Innovation and Research for administering unit of CTF Fund.
enhancing coal production, productivity, and
safety in mines.
COAL BED METHANE (CBM)
SOLAR CHARKHA MISSION • Coal bed methane (CBM) is an unconventional
• The mission was launched by Ministry of Micro, form of natural gas found in coal deposits.
Small and Medium Enterprises (MSME) in • It is considered as an alternative source for
2018. augmenting India’s energy resource.
• The primary objective of the mission was to
implement 50 Solar Charkha Clusters across Coal Bed Methane in India:
the country with a budget of Rs. 550 crores for the • India’s CBM resources are estimated at around 92
year 2018-19 and 2019-20. trillion cubic feet (TCF) or 2,600 billion cubic
• It is envisaged to generate direct employment meters (BCM).
for nearly one lakh persons. • India has the fifth largest proven coal reserves
• Solar Charkha units established under the in the world and thus holds significant prospects
mission have been classified as 'Village for exploration and exploitation of CBM.
Industries'. • The country’s coal and CBM reserves are found
• Khadi and Village Industries Commission in 12 states of India, with the Gondwana
(KVIC) is the implementing agency of the sediments of eastern India holding the bulk.
scheme. • The Damodar Koel valley and Son valley are
prospective areas for CBM development.
The objective of the scheme is to:
Uses of CBM:
• Ensure inclusive growth by generation of
• It can be used for power generation,
employment, especially for women and youth, and
sustainable development through solar charkha • As a feedstock for fertilizers,
clusters in rural areas. • Industrial uses such as in cement production,
• Boost rural economy and help in arresting rolling mills, steel plants, and methanol
migration from rural to urban areas. production.
• Leverage low-cost, innovative technologies and MINERALS (OTHER THAN ATOMIC AND HYDRO
processes for sustenance. CARBONS ENERGY MINERALS) CONCESSION
(AMENDMENT) RULES, 2021
REWA SOLAR PLANT
§ 750 MW Solar plant set up at Rewa, Madhya • Prepared by Ministry of Mines to amend the
Pradesh. Minerals Concession Rules, 2016
§ It is the first solar park of India to receive • Aims to terminate the iron ore leases of those
funding from the World Bank and also the first mines that have, not started production after lapse
project to get funding from Clean Technology of 7-8 months of auction and not maintained
Fund in India. minimum dispatch quantity up to the level
§ The project is also the first renewable energy required under MCR for three consecutive
project to supply to an institutional customer quarters.
outside the state, the Delhi Metro Rail Corporation.
COMMERCIAL COAL MINING
§ Impact: The project would lead to avoiding 15.4
lakh tonnes of carbon dioxide generation
every year.

26

• India has the world’s 4th largest coal reserve • Parks will have common facilities such as
and is 2nd largest producer after China, still India solvent recovery plant, distillation plant,
stands as 2nd largest coal importer. power & steam units, common effluent
• To ensure energy security through assured coal treatment plant etc.
supply, address poor working conditions etc., coal • The scheme will be implemented by State
mining was nationalised in 1973 by Coal Mines Implementing Agencies (SIA)to be set up by the
(Nationalisation) Act, 1973. respective State Governments.
• So, private sector firms were only allowed to mine • Despite being 3rd largest in the world by
coal for use in their captive (own) use. volume the Indian pharmaceutical industry is
• Recently, government came with the Mineral Laws significantly dependent on import of basic raw
(Amendment) Act, 2020 which amends the Mines materials, viz., Bulk Drugs that are used to
and Minerals (Development and Regulation) Act, produce medicines.
1957 (MMDR Act) and the Coal Mines (Special • In some specific bulk drugs, the import
Provisions) Act, 2015, under which current dependence is 80 to 100%.
auction process is launched.
2. Production Linked Incentive (PLI) Scheme:
Lifeline UDAN: Initiative of Ministry of Civil • The PLI scheme aims to promote domestic
Aviation for air transport of medical cargo and manufacturing of critical Key Starting
essential supplies across India amid lockdown Materials (KSMs)/Drug Intermediates and
Active Pharmaceutical Ingredients (APIs) in
ROPAX: A water transport service by Ministry of the country.
Shipping launched a roll on-roll off cum passenger • Under the scheme financial incentive will be
ferry service, called ‘ROPAX’, between Mumbai & given to eligible manufacturers of identified 53
Mandwa. critical bulk drugs on their incremental sales over
the base year (2019-20) for a period of 6 years.
SCHEMES APPROVED TO PROMOTE DRUG • This will reduce India's import dependence on
MANUFACTURING other countries for critical KSMs/Drug
Recently, the Union Cabinet has approved two Intermediates and APIs.
schemes: • The scheme will be implemented through a
1. Scheme on Promotion of Bulk Drug Parks and Project Management Agency (PMA) to be
2. Production Linked Incentive (PLI) Scheme nominated by the Department of Pharmaceuticals.

About Scheme: Active Pharmaceutical Ingredients (APIs)
• Objective: Promote domestic manufacturing of • APIs, also called bulk drugs, are significant
critical Key Starting Materials/Drug ingredients in the manufacture of drugs.
Intermediates and Active Pharmaceutical The Hubei province of China is the hub of the
Ingredients in the country. API manufacturing industry.
• Drug intermediates are the drugs used as raw • India is heavily import-dependent for APIs
materials for the production of bulk drugs. from China. India’s API imports stand at around
• Active Pharmaceutical Ingredient or API is the $3.5 billion per year, and around 70%, or $2.5
chief therapeutic entity in a drug product billion, come from China.

1. Promotion of Bulk Drug Parks Scheme:
• The government aims to develop 3 mega Bulk ELECTRONICS MANUFACTURING CLUSTERS
Drug parks in India in partnership with States. (EMC) SCHEME
• Government of India will give Grants-in-Aid to
• Launched in 2012 by MeitY to provide quality
States with a maximum limit of Rs. 1000 Crore
infrastructure within a cluster. Under the scheme,
per Bulk Drug Park.
50% of the project cost for greenfield EMC and
• A sum of Rs. 3,000 crores have been approved for
75% for brownfield EMC is given by the Ministry
this scheme for next 5 years.
as grant.

27

• Under 2.0 version of the Electronics SOFTWARE TECHNOLOGY PARKS OF INDIA
Manufacturing Cluster Scheme, infrastructure (STPI)
support will be provided for a group of industries
• Established in 1991, it is an autonomous society
that are part of the product supply chain rather
under Ministry of Electronics and Information
than individual industries.
Technology (MeitY) with the objective of
• Modified Electronics Manufacturing Clusters
encouraging, promoting and boosting the export
(EMC 2.0) Scheme would support setting up of of software from India.
both Electronics Manufacturing Clusters (EMCs)
• Chairperson :Union Minister for Electronics &
and Common Facility Centers (CFCs)
Information Technology.
PRODUCTION-LINKED INCENTIVE • In light of the current coronavirus pandemic, the
MANUFACTURING SCHEME Ministry of Electronics and Information
Technology (MeitY) has decided to provide rental
• It aims to boost domestic production and waiver to IT companies housed in STPI premises
attract investment in mobile phone in the country from March to June.
manufacturing, specified electronic components,
including assembly, testing, marking and INDIAN STRATEGIC PETROLEUM RESERVE
packaging (ATMP) units.
• To make the best use of the low international
• It shall extend an incentive of 4% to 6% on
crude prices, public sector oil companies have
incremental sales (over base year) of goods
been filling ISPRL’s caverns at Mangaluru and
manufactured in India and covered under target
Udupi (Padur) with crude oil.
segments, to eligible companies, for a period of

five years.
SCHEME FOR PROMOTION OF MANUFACTURING

OF ELECTRONIC COMPONENTS AND
SEMICONDUCTORS (SPECS)
• It offers financial incentive of 25% of capital
expenditure for the manufacturing of goods that
constitute the supply chain of an electronic
product.
• The scheme is the successor of earlier incentive
scheme namely Modified Incentive Special
Package Scheme (M-SIPS).
• Incentives will be available for investment made
within 5 years from the date of acknowledgement
of application.

NATIONAL POLICY ON ELECTRONICS 2019
• To ensure energy security, the Government of
• Policy envisions positioning India as a global hub India decided to set up 5 million metric tons
for Electronics System Design and Manufacturing (MMT) of strategic crude oil storages at three
(ESDM). locations namely, Visakhapatnam, Mangalore
• It replaces the National Policy of Electronics 2012 and Padur (near Udupi).
(NPE 2012). It gives special package of incentives • Strategic reserves are also being set up at
for mega projects and promote Industry-led R&D Chandikhole in Odisha.
and innovation in all sub-sectors of electronics.
• The construction of the Strategic Crude Oil Storage
• Provide incentives and support for significantly facilities is being managed by Indian Strategic
enhancing availability of skilled manpower, Petroleum Reserves Limited (ISPRL).
including re-skilling.
• Create Sovereign Patent Fund (SPF) to promote Indian Strategic Petroleum Reserves Limited:
the development and acquisition of IPs in ESDM • It was founded in 2005.
sector.
28

• It is an Indian company responsible for • It protects the land surface and promotes quick
maintaining the country’s strategic petroleum vegetation.
reserves. • It is totally biodegradable, and helps in soil
• ISPRL is a wholly owned subsidiary of the Oil stabilization.
Industry Development Board, which functions • It can dissipate the energy of flowing water and
under the administrative control of the Ministry of absorb the excess solar radiation.
Petroleum and Natural Gas.
SUGAR INDUSTRY IN INDIA
• Recently, a NITI Aayog task force on sugarcane
and sugar industry submitted its report to the
government.
• Its mandate included recommendations on crop
diversification to reduce adverse impact on
ground water and aligning sugar industry with
global markets.

Sugarcane pricing in India:
• The pricing of sugarcane is governed by the
statutory provisions of the Sugarcane (Control)
Order, 1966 issued under the Essential
Commodities Act (ECA), 1955.
COIR GEO TEXTILE
• Fair and Remunerative Price (FRP): It is the
• Recently, the National Rural Infrastructure cane price announced by the Central Government
Development Agency (NRIDA) has announced that on the basis of the recommendations of the
coir geo textiles will be used for construction Commission for Agricultural Costs and Prices
of rural roads under the Pradhan Mantri Gram (CACP) after consulting the State Governments
Sadak Yojana (PMGSY-III). and associations of sugar industry.
• As per the PMGSY new technology guidelines for • FRP is minimum price paid by mills to farmers.
road construction, 15% length in each batch of • It replaced the erstwhile Statutory Minimum
proposals, is to be constructed using new Price.
technologies. • It assures margins on account of profit and risk
• Out of this 5% roads are to be constructed using to farmers, irrespective of the fact whether sugar
IRC accredited technology. mills generate profit or not and is not dependent
• The IRC has now accredited coir Geo textiles for on the performance of any individual sugar mill.
construction of rural roads. As per these • It is based on the following parameters-
instructions, 5% length of the rural roads under Ø Cost of production of sugarcane.
PMGSY-III will be constructed using Coir Geo Ø Return to the growers from alternative crops
textiles. and the general trend of prices of agricultural
commodities.
Coir Geo Textile Ø Availability of sugar to consumers at a fair
• Coir is a 100% natural fiber, obtained from a price.
renewable source – the coconut husk. Ø Price at which sugar produced from sugarcane
• No chemical treatment Coir: Geo Textile is is sold by sugar producers
naturally resistant to rot, molds and moisture, Ø Recovery of sugar from sugarcane.
and free from any microbial attack hence it Ø The realization made from sale of by-products
needs no chemical treatment. viz. molasses, bagasse and press mud or their
imputed value.

Ø Reasonable margins for the growers of
Benefits:
sugarcane on account of risk and profits.
• It has a permeable, natural and strong fabric with

high durability.

29

State Advised Price (SAP)- Citing differences in cost • SWADES Skills Card (SSC): The returning
of production, productivity levels and also as a result citizens are required to fill up an online SWADES
of pressure from farmers' groups, some states declare Skills Card.
state specific sugarcane prices called State Advised • The card will facilitate the returning citizens
Prices (SAP), usually higher than the FRP. with suitable employment opportunities
through discussions with key stakeholders
PRADHAN MANTRI MUDRA YOJANA (PMMY) including State Governments, Industry
• Government has approved a 2% interest subsidy Associations and Employers.
for Shishu loan account holders under the Pradhan
Mantri Mudra Yojana (PMMY) for a period of 12 National Skill Development Corporation
months to eligible borrowers. • NSDC is a not-for-profit public limited company
• It was launched by the Prime Minister in 2015. incorporated under section 25 of the Companies
• Aims to provide loans up to 10 lakhs to the non- Act, 1956 (corresponding to section 8 of the
corporate, non-farm small/micro enterprises. Companies Act, 2013).
• Lending Institutions: Commercial Banks, RRBs, • It was set up by the Ministry of Finance as a Public
Small Finance Banks, MFIs and NBFCs. Private Partnership (PPP) model.
• Categories of Loans: MUDRA has created three • The Government of India through the Ministry of
products as per the stage of growth and funding Skill Development & Entrepreneurship (MSDE)
needs of the beneficiary micro unit: holds 49% of the share capital of NSDC, while the
1. Shishu: Covering loans up to Rs. 50,000. private sector has the balance 51% of the
2. Kishore: Covering loans above Rs. 50,000 and share capital.
up to Rs. 5 lakhs • It aims to promote skill development by
3. Tarun: Covering loans above Rs. 5 lakh and up catalyzing creation of large, quality and for-profit
to Rs. 10 lakhs. vocational institutions.
• Loans under this scheme are collateral-free
loans. UPWARD REVISION OF MSME DEFINITION
• Union Cabinet has announced policy changes for
SWADES INITIATIVE the MSME sector as part of the Atma Nirbhar
• The Government of India has launched a new Bharat package.
initiative SWADES to conduct a skill mapping • It may be noted that this revision was done after
exercise of the returning citizens under the 14 years since the MSME Development Act came
Vande Bharat Mission. into existence in 2006.
• Objective: To create a database of qualified • It has also been decided that the turnover with
citizens based on their skill sets and experience respect to exports will not be counted in the
and fulfil demand of Indian and foreign limits of turnover for any category of MSME units
companies. whether micro, small or medium.
• SWADES stands for Skilled Workers Arrival • This is yet another step towards ease of doing
Database for Employment Support. business.
• Bodies Involved: This is a joint initiative of the
Ministry of Skill Development &
Entrepreneurship, the Ministry of Civil
Aviation and the Ministry of External Affairs.
• Implementation: MSDE’s implementation arm
National Skill Development Corporation
(NSDC) is supporting the implementation of the
project.
• The collected information will be shared with the • MSMEs have a huge impact on the country's GDP-
companies for suitable placement opportunities making a contribution of 29 percent.
in the country. • They contribute to almost half of exports from the
country. Additionally, more than 11 crore
people are employed in the MSME sector.
30

BANK OF SCHEMES, IDEAS, INNOVATION & • Norms for fixing minimum wage: Minimum
RESEARCH PORTAL ON MSMES wages will be calculated on the basis of the
geographical area of employment and the skill
• Ministry of Micro, Small and Medium Enterprises
category of an employee.
(MSME) has launched portal aims to gives access
to all Schemes of Union, State/ union territories • For this purpose, the central government will
divide the geographical area into three categories:
for MSMEs.
metropolitan, non-metropolitan and rural
• It has provision for uploading Ideas, Innovations &
areas.
Researches in the sector by users.
• The occupations are also divided into four skill
• It has features of crowd sourcing of Ideas,
categories: unskilled, semi-skilled, skilled and
evaluation and rating the ideas by crowd sourcing,
highly skilled.
which will help in decision making.
• Technical committee: A Technical Committee
• It facilitates venture capital to connect with user
will be formed to suggest, modify, add or delete
having idea, innovation and research and also
particular occupations in the tentative list of four
options are available for adding Banks,
categories: unskilled, semi-skilled, skilled and
Government Labs, Incubators, Accelerators,
highly skilled.
Foreign collaboration in future.
ASEEM PORTAL
DRAFT RULES FOR CODE ON WAGES
• The Labour and Employment Ministry has notified • The Ministry of Skill Development and
the draft Code on Wages (Central) Rules under the Entrepreneurship (MSDE) has launched ‘Atma
Code on Wages,2019. Nirbhar Skilled Employee Employer
• Code on wages, 2019 has amended and Mapping’(ASEEM) portal.
consolidated laws relating to wages, bonus and • ASEEM refers to all the data, trends and analytics
related matters. which describe the workforce market and map
• The Code subsumed four labour laws: demand of skilled workforce to supply.
1. Payment of Wages Act,1936, • The portal has been developed by the National
2. Minimum Wages Act, 1948 Skill Development Corporation (NSDC) in
3. Payment of Bonus Act, 1965 and collaboration with Better Place.
4. Equal Remuneration Act, 1976. • It is an AI-based portal which will map details of
workers based on regions and local industry
demands and will bridge the demand-supply gap
Key Provisions of Draft Wage Rules:
of skilled workforce across sectors.
• Working hours: The normal working day shall
comprise eight hours of work and one or more INDIA’S FIRST PUBLIC EV CHARGING PLAZA
intervals of rest which in total shall not exceed
one hour. • Union Minister for Power inaugurated India’s first
• Central Advisory Board: Government will set up public EV (Electric Vehicle) charging plaza at
a Central advisory board to fix the floor-level Chelmsford Club in New Delhi.
minimum wages. • Bodies involved: Energy Efficiency Services
• Calculation of minimum wage: The criteria for Limited (EESL) in collaboration with NDMC has
fixing the minimum rate of wages per day for established the public EV Charging Plaza in
employees include: Central Delhi.
1. Standard family of four (self, spouse and two • The EV charging plaza is a new avenue for
children) making e-mobility convenient in India.
2. Daily intake of 2700 calories per • Features: The plaza will host 5 Electric Vehicle
consumption unit, Chargers of different specifications.
3. 10% expenditure on rent,
KAKRAPAR ATOMIC POWER PLANT (INSERT
4. 20% expenditure of fuel, electricity, and
MAP)
miscellaneous items, and
5. 25% expenditure on education, medical • It has recently achieved its criticality, which is a
requirements and contingencies. landmark event in India’s domestic civilian
nuclear programme.
31

Extra Information:
• Pressurized Heavy Water Reactor (PHWR): It is
a nuclear reactor, which uses natural uranium as
its fuel and heavy water(deuterium oxide D2O) as
its coolant and neutron moderator.
• Nuclear Fission: It is a process in which the
nucleus of an atom splits into two or more
smaller nuclei and usually some by product
particles. When the nucleus splits, the kinetic
energy of the fission fragments is transferred to
other atoms in the fuel as heat energy, which is
eventually used to produce steam to drive the
turbines.

'Thermal Margin’ refers to the extent to which the
operating temperature of the reactor is below its
maximum operating temperature.
AIM ICREST
Atal Innovation Mission (AIM) has launched ‘AIM-
iCREST’ in partnership with Bill & Melinda Gates
Foundation and Wadhwani Foundation.

About: About AIM iCREST:
• Kakrapar Atomic Power Plant is the country’s • AIM’s iCREST stands for Incubator Capabilities
first 700 MWe (megawatt electric) unit, located enhancement program for a Robust Ecosystem
in Gujarat. focused on creating high performing Startups.
• It is the biggest indigenously developed variant of • Purpose: It has been designed to enable the
the Pressurized Heavy Water Reactor (PHWR). incubation ecosystem and to support the
• The operationalization of India’s first 700MWe growth of AIM’s established incubators across
reactor marks a significant scale-up in India.
technology.
• It is significant in terms of optimization of its Also Remember:
PHWR design. • Business incubators: These are institutions that
• It addresses the issue of excess thermal support entrepreneurs in developing their
margins and an improvement in the economies businesses especially in initial stages.
of scale, without significant changes to the design • Atal innovation mission (AIM): It was set up by
of the 540 MWe reactor. NITI Aayog in 2016 to promote a culture of
• The 700MWe capacity would constitute the innovation and entrepreneurship by creating
biggest component of the expansion plan of institutions and programs that enhance
India to ramp up its existing nuclear power innovation in schools, colleges, and entrepreneurs
capacity of 6,780 MWe to 22,480 MWe by 2031. in general.

Criticality: MEGHNAGHAT COMBINED-CYCLE POWER PLANT
• The normal operating condition of a reactor, in Recently, Asian Development Bank (ADB) has signed a
which nuclear fuel sustains a fission chain $ 200 million financing deal with the Reliance
reaction. Bangladesh LNG and Power Limited (RBLPL).
• A reactor achieves criticality when each fission
event releases a sufficient number of neutrons About:
to sustain an ongoing series of reactions.

32

• The deal aims to build and operate a 718- • Background: It was launched in 2003 by the
megawatt combined-cycle gas-fired power plant Ministry of Petroleum & Natural Gas
in Bangladesh. (MoP&NG).
• The plant is proposed to be located on land • Aim: To achieve blending of Ethanol with
allotted by Bangladesh Power Development Board Petrol with a view to reduce pollution, conserve
(BPDB), in Meghnaghat, Narayanganj District foreign exchange and increase value addition in
near Dhaka. the sugar industry enabling them to clear cane
price arrears of farmers.
Combined-Cycle Power Plant • Implementation: The Government is
• A combined-cycle power plant is a relatively more implementing the programme through Oil
efficient way of producing electricity. Marketing Companies (OMCs).
• It uses both a gas and a steam turbine together
to produce up to 50 % more electricity from the Also Remember
same fuel than a traditional simple-cycle plant. • 1G and 2G Bioethanol: 1G bioethanol plants
• It will reduce the share of environmentally utilise sugarcane juice and molasses, byproducts
harmful and expensive fuels like coal and oil. in the production of sugar as raw material while
2G plants utilise surplus biomass and agricultural
KHADI AGARBATTI ATMA NIRBHAR MISSION waste to produce bioethanol.
Union Minister for MSME has approved a program • Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran
proposed by Khadi and Village Industries Commission Anukool fasal awashesh Nivaran) Yojana: It was
(KVIC) named “Khadi Agarbatti Atma Nirbhar launched in 2019 to provide financial support
Mission”. to Integrated Bioethanol Projects using
lignocellulosic biomass and other renewable
feedstock.
About Mission:
• It aims at creating employment for unemployed MODEL CONCESSION AGREEMENT FOR BOT
and migrant workers in different parts of the MODEL
country while increasing domestic Agarbatti
production substantially. Recently, an inter-ministerial group (IMG) has
approved changes to the model concession agreement
• The scheme has been designed based on the
(MCA) used for building privately-funded highways on
Public Private Partnership (PPP) mode.
the Build-Operate and Transfer (BOT) toll model.

Features:
Background:
• Under this, KVIC will provide Automatic
• BOT toll model accounted for almost 96% of
Agarbatti making machines and powder
NHAI’s all project awards in 2011-12, which
mixing machines to the artisans through the
came down almost to zero in the last two
private Agarbatti manufacturers who will sign the
fiscals, due to various issues in existing MCA for
agreement as business partners.
BOT (Toll) projects.
• Further, KVIC will provide a 25% subsidy on the
• This has forced NHAI to shift to Engineering
cost of the machines and will recover the
Procurement and Construction (EPC) and
remaining 75% of the cost from the artisans in
Hybrid Annuity Model (HAM).
installments every month.
• However, overdependence on EPC and HAM is
• The business partner will provide the raw
adversely impacting the finances NHAI. Thus, new
material to the artisans for making Agarbatti
changes in BOT model were proposed to attract
and will pay them wages on a job work basis.
private investors.
ETHANOL BLENDED PETROL (EBP) PROGRAMME
Key features and expected benefits of modified
The government has set targets of 10% bioethanol MCA:
blending of petrol by 2022 and to raise it to 20% by • Revised revenue assessment: Under the clause,
2030 under the Ethanol Blended Programme (EBP). in every five years during the concession period,
the revenue potential of a project will be re-
About EBP:
33

assessed, against every 10 years now. Therefore, if Entrepreneurs in Residence (EIR) under the National
need be, the concession could will be extended Initiative for Developing and Harnessing Innovations
early in the tenure of the contract, adding to (NIDHI) programme.
certainty of cash flows.
• Land acquisition: The work order for building About:
highway projects will be issued only when 90 per • It is one of the sub-programs introduced under
cent of the land is acquired and this will form a the National Initiative for Developing and
part of the condition precedent. Delays in land Harnessing Innovations (NIDHI) programme.
acquisition and approvals have led to significant • Aim: To inspire the best talents to be
delays in project completion and have been the entrepreneurs, to minimise the risk involved in
prime reason for significant cost overruns. pursuing startups and to partially set off their
• Dispute resolution board (DRB): It provides for opportunity costs of high paying jobs.
setting up a dispute resolution board which will • Nodal Department è Department of Science
act as a continuous dispute resolution mechanism and Technology.
and provides for timely redressal within 90 days. • Funding: It supports aspiring or budding
This is a welcome step, as arbitration processes entrepreneurs of considerable potential for
have been dragged for years, leading to significant pursuing a promising technology business idea
lock-up of developers' funds. over a period up to 18 months with a subsistence
grant up to Rs 30,000 per month with a
Types of investment models: maximum cap for total support of Rs 3.6 lakh.
1. Build Operate and Transfer (BOT) Toll model:
Under this model, a road developer constructs the NIDHI
road and he is allowed to recover his investment • It was launched by the Department of Science
through toll collection. There is no government and Technology as an umbrella scheme to
payment to the developer as he earns his money
support ideas and innovations (knowledge-
invested from tolls.
2. BOT Annuity Model: A developer builds a based and technology-driven) into successful
highway, operates it for a specified duration and start-ups.
transfers it back to the government. The • Under NIDHI, PRAYAS (Promoting and
government starts payment to the developer Accelerating Young and Aspiring innovators &
after the launch of commercial operation of the Start-ups) programme has been initiated in which
project. established Technology Business Incubators (TBI)
3. Engineering, Procurement and Construction
are supported with PRAYAS grant to support
(EPC) Model: Under this model, the cost is
completely borne by the government. Government innovators and entrepreneurs with grants for
invites bids for engineering knowledge from the ‘Proof of Concept’ and developing prototypes.
private players. Procurement of raw material and
construction costs are met by the government. The SAROD-PORTS
private sector’s participation is minimum and Union Minister of State for Shipping (I/C) has
is limited to the provision of engineering expertise launched ‘SAROD-Ports’ (Society for Affordable
4. Hybrid Annuity Model (HAM): HAM is a mix of Redressal of Disputes – Ports).
BOT Annuity and EPC models. As per the design,
the government will contribute to 40%of the About SAROD-Ports:
project cost in the first five years through annual • It aims to provide an Affordable Dispute
payments (annuity). The remaining payment will Redressal Mechanism for all kinds of disputes of
be made on the basis of the assets created and the the maritime sector with the panel of technical
performance of the developer. experts as arbitrators.
• It was established under Societies Registration
ENTREPRENEURS IN RESIDENCE (EIR)
Act, 1860.
PROGRAMME
The Department of Science & Technology (DST)
secretary has launched a brochure featuring
34

• Composition: It consists of members from Indian container-handling modern deep draft ports
Ports Association (IPA) and Indian Private require a draft of at least 18-20m.
Ports and Terminals Association (IPTTA). • Vadhavan port will be developed on "landlord
• Coverage: It will advise and assist in settlement model". All the business activities would be
of disputes through arbitrations in the maritime undertaken under the private-public partnership
sector, including ports and shipping sector in (PPP) mode by private developers.
Major Port Trusts, Non-major Ports, including • It is being developed in a manner that 65 acres of
private ports, jetties, terminals and harbors. mangroves around the port area are not harmed.
• It will also cover disputes between granting Also, it has been claimed that there will be ‘no land
authority and Licensee/Concessionaire acquisition’ and ‘no displacement.
/Contractor and also disputes between • India is the sixteenth largest maritime country in
Licensee/Concessionaire and their contractors the world.
arising out of and during the course of execution
of various contracts. Port Management Models
• Service Port model (The port authority owns the
SHYAMA PRASAD MOOKERJEE PORT
land and all available assets—fixed and mobile—
• Recently, Kolkata port renamed as Shyama and performs all regulatory and port functions.
Prasad Mookerjee Port. It is located in West Here, the port trust is both the landlord and the
Bengal. cargo terminal operator).
• Kolkata Port is the oldest operating port in • Landlord port model: The publicly governed
India, and was constructed by the British East port authority acts as a regulatory body and as
India Company and is the only riverine Major Port landlord while private companies carry out port
with Navigational channel being one of the longest operations—mainly cargo-handling activities. E.g.
in the world. Kamarajar Port.
• Currently, most major port trusts in India carry
Land Ports Authority of India (LPAI) out terminal operations as well, resulting in a
• LPAI statutory body established under Land Ports hybrid model of port governance.
Authority of India Act, 2010.
INTEGRATED ROAD ACCIDENT DATABASE
• LPAI intends to provide safe, secure and
PROJECT (IRAD)
systematic facilities for movement of cargo as well
passengers at its Integrated Check Posts (ICPs) Ministry of Road and Transport Highways has
along the international borders of India. organized a training programme for the
• Currently, the LPAI is building the Passenger implementation of the Integrated Road Accident
Terminal Building at Dera Baba Nanak, Kartarpur Database Project (iRAD).
Sahib Corridor.
About iRAD:
Vadhavan port • It is a central accident database management
• Union Cabinet has given its 'in-principle' approval system that will help in analyzing causes of road
for setting up a Major Port at Vadhavan, located crashes and in devising safety interventions to
north of JNPT in Maharashtra. reduce such accidents in the country.
• India has 12 major and 205 notified minor and • Developed by: It has been developed by the
intermediate ports. Only two major ports, namely Indian Institute of Technology-Madras (IIT-M)
Jawahar Lal Nehru Port Trust (JNPT) (1989) and and will be implemented by the National
Ennore (Kamrajar) Port (1999), and 9 minor ports Informatics Centre.
by state governments have been developed in the • Cost: The project costs ₹258 crore and is being
last 30 years. supported by the World Bank.
• Port site at Vadhavan has an 18m draft naturally • Implementation: The system will be first piloted
available. Two largest container ports of the in the six States with highest fatalities from road
country, JNPT and Mundra, have drafts of 15m and crashes — Karnataka, Madhya Pradesh,
16m, respectively, whereas the world’s largest Maharashtra, Rajasthan, Tamil Nadu and Uttar
Pradesh.

35

Working: • It will consist of an inter-ministerial and a steering
• The IRAD mobile application enables police committee.
personnel to enter details about a road • The inter-ministerial committee will be convened
accident along with photos and videos, following by NITI Aayog and headed by its CEO
which a unique ID will be created for the incident. • The committee will review the
• Subsequently, an engineer from the Public Works studies/modelling activities and provide
Department or the local body will receive an directions and new areas of research.
alert on his mobile device. He or she will then visit • The steering committee will comprise
the accident site, examine it and feed the required representatives of the ministries, Industry
details, such as the road design. Associations (FICCI and CII), Academia (IIT
• Data thus collected will be analyzed by a team at Bombay, Ahmedabad, and Delhi) and Policy
IIT-M which will then suggest if corrective research organizations, think tanks and
measures in road design need to be taken. funding agencies.
LI-LO (LINE IN LINE OUT) SUBSTATION NATIONAL AUTHORITY FOR RECYCLING OF

The Union Minister of State (I/C) for Power and New SHIPS
& Renewable Energy, laid foundation stone for Union government has established National Authority
construction of LILO of Kishenganj-Darbhanga 400kV for Recycling of Ships under the section 3 of the
Transmission Line at Saharsa in Bihar through a Recycling of Ships Act, 2019.
virtual event.
About:
About LILo Substation: • The Directorate General of Shipping will be now
• The substation is the part of an electrical supply notified as National Authority for Recycling of
system which transmits the high voltage from the Ships.
generating substations to the local distribution • It will be set up in Gandhinagar, Gujarat.
networks. • The location of the office will benefit the Ship
• In LILo (Line In Line Out) Substation, a long Recycling yard owners situated in Alang,
distribution line is brought in and brought out Gujarat which is home of Asia’s largest ship
from newly created substation as shown below. breaking and ship recycling industry in the world.
• This scheme is bit expensive because of the need • It will be the apex body, which is authorised to
of an extra layout; however it is more secure. administer, supervise and monitor all
• Saharsa is located in extreme Northern Part of activities relating to ship recycling.
Bihar and is a flood prone area due to inflow of • DG Shipping will be the final authority for the
water from Nepal. various approvals required by the Ship-
Recycling yard owners and State Governments.
INDIA ENERGY MODELLING FORUM • Under Ship Recycling Act, 2019, India has
NITI Aayog announced the governing structure of acceded to Hong Kong Convention for Ship
India Energy Modelling Forum (IEMF). Recycling under International Maritime
Organization (IMO).
About IEMF:
• It is a joint initiative of NITI Aayog and United NOTE: DG Shipping is a representative of India in
States Agency for International Development IMO and all the conventions of IMO are being enforced
(USAID) under the US–India Strategic Energy by DG Shipping.
Partnership.
• It aims to engage Indian researchers, COUNTRY’S FIRST MULTI-MODAL LOGISTIC
knowledge partners, think tanks and national PARK
and international government agencies and The first-ever multi-modal logistic park shall come up
departments for modelling and long-term energy in Assam on October 20, 2020.
planning.
About
Governing structure of IEMF:

36

• Ministry for Road Transport and Highways will be NATIONAL PRODUCTIVITY COUNCIL
nodal ministry. National Productivity Council (NPC) has been granted
• The park will provide direct connectivity to air, accreditation conforming to ISO 17020:2012 by
road, rail and waterways to the people. National Accreditation Board for Certification Body
• It will be developed under the ambitious (NABCB), Quality Council of India (QCI).
Bharatmala Pariyojana of the Government of
India. About NPC:
NATIONAL PROGRAM AND PROJECT • Parent body: NPC is an autonomous body under
Department for Promotion of Industry & Internal
MANAGEMENT POLICY FRAMEWORK
Trade (DPIIT), Ministry of Commerce &
NITI Aayog and Quality Council of India (QCI) have Industry, Government of India.
recently launched the ‘National Program and Project • Objective: NPC is a national level organization to
Management Policy Framework’ (NPMPF), with the promote productivity culture in India.
aim of bringing radical reforms in the way • Established in 1958.
infrastructure projects, are executed in India. • Status: It is an autonomous, multipartite, non-
profit organization and has been registered as a
About: Society under the Societies Registration Act XXI of
• It is developed by NITI Aayog and the Quality 1860.
Council of India which proposed a four-level • NPC is a constituent of the Tokyo-based Asian
certification system for project managers linked to Productivity Organisation (APO), an Inter-
project scale. Governmental Body, of which the Government of
• The framework envisages to bring radical India is a founder member.
reforms in the way infrastructure projects are • Functions: NPC teams up with its clients to work
executed in India. out solutions towards accelerating
• It has an action plan to: productivity, enhancing competitiveness,
Ø Adopt a program and project management increasing profits, augmenting safety and
approach to infra development. reliability and ensuring better quality. It provides
Ø Institutionalize and promote the profession of reliable database for decision-making,
program and project management and build a improved systems and procedures, work culture
workforce of such professionals. as well as customer satisfaction both internal &
Ø Enhance institutional capacity and capability external.
of professionals.
INDIA’S FIRST GREEN ENERGY CONVERGENCE
Quality Council of India PROJECT
• QCI was set up in 1997 as an autonomous body. Energy Efficiency Services Limited (EESL), a joint
• It was setup jointly by the Government of India venture of PSUs under the Ministry of Power and
and the Indian Industry represented by the three Department of New & Renewable Energy (DNRE), Goa,
premier industry associations i.e. Associated have signed a MOU to implement India’s first
Chambers of Commerce and Industry of India Convergence Project in the State.
(ASSOCHAM), Confederation of Indian Industry
(CII) and Federation of Indian Chambers of About
Commerce and Industry (FICCI) • Focus: It focuses on energy solutions that lie at the
• Aim: It aims to establish and operate national confluence of renewable energy, electric mobility
accreditation structure and promote quality and climate change.
through National Quality Campaign. • Objective: It seeks to connect seemingly
• Nodal Ministry: The Department of Industrial independent sectors like Solar Energy, Energy
Policy & Promotion, Ministry of Commerce & Storage and LED lights to provide solutions, which
Industry, is the nodal ministry for QCI. can enable in decarbonisation and affordable
• Chairman of QCI is appointed by the Prime energy access.
Minister on recommendation of the industry to
the government. Mechanism:
37

• EESL is offering convergent interventions, sharing between the regulators, industry and
which solve multiple gap areas in the energy other participants.
ecosystem. • Schedule of Penalties: It enables the Central
• Solutions such as solarised agriculture feeders, Government to revise fines without amending the
LED street lights in local villages and battery Act and thus, makes it easier to revise fines to keep
energy storage systems. up.
• Leveraging the carbon financing mechanism to
rapidly strengthen rural infrastructure in a clean LAKSHADWEEP TO GET OPTICAL FIBRE CABLE
and sustainable manner, and to create a resilient The Union Cabinet has approved laying of undersea
and sustainable rural community in India. optical fibre cable to connect 11 islands of
• EESL’s climate financing interventions currently Lakshadweep with Kochi by May 2023.
include Gram UJALA, Decentralised Solar and
Gram Panchayat Street Lights programmes. About:
• How will the project benefit Goa? è Goa had set a • Objective: The Project envisages provision of a
target of generating 150 MW of green energy in direct communication link through a dedicated
next three years. Also, it has plans to set up 100 submarine Optical Fibre Cable (OFC) between
MW of solar power plants. Kochi and 11 Islands of Lakshadweep viz.
Kavaratti, Kalpeni, Agati, Amini, Androth, Minicoy,
Energy Efficiency Services Limited Bangaram, Bitra, Chetlat, Kiltan and Kadmat.
• founded in 2009. • Funding: The project would be funded by
• It is a joint venture of four national Public- Universal Service Obligation Fund(USOF).
Sector Undertakings: NTPC Limited, Power • Implementation: Bharat Sanchar Nigam Ltd.
Finance Corporation Limited, Rural Electrification (BSNL) has been nominated as Project Execution
Corporation Limited and POWERGRID Agency and Telecommunications Consultant India
Corporation of India Limited. Ltd. (TCIL) as the Technical Consultant of the
• It was set up under the Ministry of Power to Project.
facilitate implementation of energy efficiency • Target: The project is targeted to be completed
projects. by May 2023.
• EESL is a Super-Energy Service Company
(ESCO), which enables consumers, industries, and Universal Service Obligation Fund (USOF)
governments to effectively manage their energy • It was set up in 2002 and was given statutory
needs through energy-efficient technologies. status under the Indian Telegraph
(Amendment) Act, 2003.
COASTAL SHIPPING BILL, 2020 • Objective: Enabling rural Indians to achieve their
Ministry of Shipping has issued the draft of Coastal fullest potential and participate productively in
Shipping Bill, 2020 for suggestions from the the development of the nation by virtue of being
stakeholders and general public. effectively connected through a reliable and
ubiquitous telecommunications network.
About highlights of the Bill:
• Mandatory licensing for all foreign vessels. Submarine Communications cable:
• National Coastal and Inland Shipping Strategic • It is a cable laid on the sea bed between land-based
Plan: It aims for the seamless integration of inland stations to carry telecommunication signals across
waterway routes with maritime coastal transport. stretches of ocean and sea.
The aim is to enable transportation of goods solely • The optical fiber elements are typically
via water-based modes of transport, from inland individually coated with plastic layers and
waterways to coastal shipping routes. contained in a protective tube suitable for the
• National Register of Coastal Shipping: It environment where the cable will be deployed.
contains all information about the coasting trade • Importance of submarine cables:
of India. Such a register would ensure • Currently 99 percent of the data traffic that is
transparency of procedure and aid in information crossing oceans is carried by undersea cables.

38

• The reliability of submarine cables is high, GREEN NATIONAL HIGHWAYS CORRIDORS
especially when multiple paths are available in the PROJECT
event of a cable break. The Centre and the World Bank signed a USD 500
• The total carrying capacity of submarine cables is million project to build safe and green national
in the terabits per second, while satellites typically highway corridors in Rajasthan, Himachal Pradesh,
offer only 1,000 megabits per second and display Uttar Pradesh and Andhra Pradesh.
higher latency.
About:
DRAFT INDIAN PORTS BILL,2020
• It will support the Road Transport and Highways
Ministry of Ports, Shipping and Waterways has Ministry to construct 783 kilometers of
circulated draft of Indian Ports Bill 2020 for public highways in various geographies by
consultation which will repeal and replace the Indian integrating safe and green technology designs
Ports Act, 1908. such as local and marginal materials, industrial by-
products and other bioengineering solutions.
About: • States covered: Rajasthan, Himachal Pradesh,
• Constitution of Maritime Port Regulatory Uttar Pradesh and Andhra Pradesh.
Authority to regulate state maritime board and • The project will help reduce GHG emissions in
scheduled ports. the construction and maintenance of highways.
• Maritime Ports Tribunal and Maritime Ports • The $500 million loan from the International
Appellate Tribunal to curb anti-competitive Bank for Reconstruction and Development (IBRD)
practises in the port sector and act as a speedy and has a maturity of 18.5 years including a grace
affordable grievance redressal mechanism. period of five years.
• Formulation of the National Port policy and
National Port plan in consultation with Coastal Key Features of the project:
State Governments, State Maritime Boards and • The project supports an in-depth analysis of
other stakeholders. gender-related issues in the transport sector
• Incorporating all up-to-date conventions/ along with help in creating jobs for women by
protocols to which India is a party which help to training women-led micro enterprises and
ensure safety, security, pollution control, women collectives to implement green
performance standards and sustainability of technologies in the highway corridors.
ports. • The project will also strengthen and widen
existing structures; construct new pavements,
drainage facilities and bypasses; improve
junctions and introduce road safety features.

The International Bank for Reconstruction and
Development (IBRD)
• It is an international financial institution.
• Established in 1944
• Headquarter: Washington, D.C., USA
• Functions: It is the lending arm of World Bank
Group.
• It offers loans to middle-income developing
countries.
• It is the first of five member institutions that
compose the World Bank Group.
• The IBRD and its concessional lending arm, the
International Development Association (IDA), are
collectively known as the World Bank as they

share the same leadership and staff.

39

DEVELOPMENT OF WIND PARKS/WIND-SOLAR Photovoltaic-wind, Hydro-wind and
HYBRID PARK Photovoltaic-Biomass etc.
Ministry of New and Renewable Energy (MNRE)
LIGHT HOUSE PROJECTS
recently proposed the scheme for “Development of
Wind Parks/Wind-Solar Hybrid Park”. Prime Minister will lay the foundation stone of Light
House Projects (LHPs) under Global Housing
About the proposed scheme: Technology Challenge-India (GHTC-India) at six sites
• Sites have been identified across seven states, across six States.
Tamil Nadu, Andhra Pradesh, Karnataka,
Telangana, Gujarat, Rajasthan and Madhya About:
Pradesh. • Light House Projects (LHPs) showcase the new-
• The capacity of each park proposed is around 500 age best of alternate global technologies,
MW and more but shall not be less than 50 MW. materials and processes in the construction
• Centre will provide financial assistance for sector at a large scale for the first time in India.
development of parks. • They are being constructed under Global
• State Government will select park developer and Housing Technology Challenge-India (GHTC-
facilitate the park developer in acquisition/ India).
leasehold of the identified site, in obtaining all • They will be constructed at six sites across six
statutory clearances. states such as Madhya Pradesh, Gujarat, Tamil
• Wind Energy Park will provide a plug and play Nadu, Jharkhand, Tripura and Uttar Pradesh.
solution (availability of land, transmission, • They comprise about 1000houses at each
necessary infrastructure and necessary location along with allied infrastructure
approvals) to the investors for installing wind/ facilities.
wind-solar power projects. • They will demonstrate and deliver ready to live
Jaisalmer Wind Park, Rajasthan with installed houses within twelvemonths, as compared to
capacity of 1,064 MW is largest wind park in India. conventional brick and mortar construction.
• They will serve as live laboratories for
• Also, MNRE issued tariff-based competitive facilitating transfer of technology to the field
bidding guidelines for power procurement from and its further replication.
grid-connected solar-wind hybrid projects
(hybrid renewable energy).
• Recently, government also cleared land allotment Global Housing Technology Challenge-India
for a mega renewable energy hybrid park in Kutch • Launched by Ministry of Housing & Urban
region with capacity 41,500-megawatts (solar and Affairs.
wind). • Purpose: GHTC envisages to provide an
ecosystem for adoption of innovative
What is hybrid renewable energy? technologies in the housing construction sector
• Hybrid renewable energy usually comprises of in a holistic manner.
two or more renewable energy sources • Components of GHTC-India include:
combined in such a way to provide an efficient 1. Construction Technology India Biennial
system with appropriate energy conversion Expo-cum-Conference
technology connected together to feed power to 2. Identifying and Mainstreaming Proven
local load or grid. Demonstrable Technologies for
• Renewable Energy Hybrids are the solution to a Construction of Light House Projects
reliable, affordable and dispatchable 3. Identifying Potential Future
integration of renewable energies, from the Technologies for Incubation and
combination and integration of renewable energy Acceleration Support through Affordable
generation sources with one another, such as wind Sustainable Housing Accelerators - India
and solar. (ASHA - India).
• There are different types of hybrid renewable
energy systems like Biomass-wind-fuel cell,
40

Affordable Sustainable Housing Accelerators – • Airline operators will be invited to form a SPV
India (ASHA-India) with SDCL.
• It aims to promote domestic research and • The routes may be operated under the
entrepreneurship by providing incubation and government’s subsidised Ude Desh Ka Aam
acceleration support to potential future Nagrik (UDAN) scheme.
technologies.
• Features: Under ASHA-India initiative, five ASHA- GOLDEN QUADRILATERAL & GOLDEN DIAGONAL
India Centers have been setup for providing SECTIONS
incubation and acceleration support. Golden Quadrilateral Project:
• The potential technology winners under • It is a highway network which links Delhi,
acceleration support will be announced by the Mumbai, Kolkata and Chennai thus connecting
Prime Minister. the major industrial, agricultural and cultural
• The technologies, processes and materials centres of India
identified through this initiative will provide a • The project was started in 2001 by Atal Bihari
major fillip to young creative minds, start-ups, Vajpayee under the NDA government and was
innovators and entrepreneurs. completed in January 2012.
• It was the Phase-1 of the bigger National
SAGARMALA SEAPLANE SERVICES (SSPS) Highway Development Project that was
Recently, the Ministry of Ports, Shipping and launched in 1998 by the same government.
Waterways is kicking off its ambitious Project of • It is managed by the National Highways
Sagarmala Seaplane Services (SSPS). Authority of India (NHAI) under the Ministry of
Road, Transport and Highways.

About:
• The project aims at initiating the process of
commencing operations of the Seaplane
services, on the select routes, under a Special Benefits of the project:
Purpose Vehicle (SPV) framework through • It has brought opportunities for farmers,
prospective airline operators. through improved transportation of produce
• SPV is a legal object formed for a specifically- from the agricultural hinterland to major cities
defined singular purpose. and ports for export, through lesser wastage and
• The project execution and implementation would spoils.
be through Sagarmala Development Company • It is driving economic growth directly, through
Ltd (SDCL), which is under the administrative construction as well as through indirect demand
control of the Ministry of Ports, Shipping and for cement, steel and other construction materials.
Waterways.

41

PRARAMBH – STARTUP INDIA INTERNATIONAL prototype development, product trials, market-
SUMMIT entry, and commercialization of products or ideas.
Prime Minister Narendra Modi will interact with • Funding: The Scheme will offer start-ups up to
Rs. 20 Lakhs as a grant for Proof of Concept.
startups and address ‘Prarambh: Startup India
International Summit’ on 15-16th January 2021. Upto Rs.50Lakhs can also be availed through
About convertible debentures or debt or debt-linked
instruments for commercialization.
• Organized by Department for Promotion of
• Need è It is the need of the hour that the
Industry and Internal Trade, Ministry of
Commerce and Industry. technologies of the future come out of the lab
of Asia and the entrepreneurs of the future should
• The two-day Summit is being organised as a follow
be prepared from here.
up of the announcement made by the Prime

Minister at the fourth BIMSTEC Summit held in
Kathmandu in August 2018 wherein India Fund of Funds for Start-ups (FFS) Scheme
committed to host the BIMSTEC Startup Conclave. • It was launched by the Prime Minister in 2016 in
• The Summit marks the 5th anniversary of the line with the Start-up India Action Plan.
Startup India initiative, launched by the Prime • Purpose: The fund has a corpus of INR 10,000
Minister on 16 January, 2016. crore and is managed by Small Industries Bank
• Over 25 countries and more than 200 global of India(SIDBI) for contribution to the corpus of
speakers shall participate. Alternative Investment funds (AIFs) which in
• The Summit will be the largest startup turn invest in equity and equity–linked
confluence organised in India since the launch instruments of various Startups.
of the Startup India initiative.
ELECTRONICS INCENTIVE SCHEMES

Objectives: The government has launched three incentive
• The sessions of the Summit are designed to schemes with a total outlay of about ₹48,000 crore to
showcase the spread and depth of boost large-scale manufacturing of electronics in the
entrepreneurship based on innovation in India. country. These three schemes are:
• Provide opportunities to startups for entering
domestic (private and public) and international 1. Production Linked Incentive
markets • Targeted at mobile phone manufacturing and
• Enable ease of doing business for start-ups and specified electronic components. The government
investors. initially plans to incentivise 10 firms — five
global and five local.
Start-Ups In India • This Scheme shall extend an incentive of 4% to
• A Start-up is an entity, incorporated or registered 6% on incremental sales(over base year) of
in India for less than 7 years. goods manufactured in India and covered under
• Its annual turnover should be less than 25 crores the target segments, to eligible companies, for a
in any preceding financial year. period of five years subsequent to the base
• It should be working towards innovation, year.
development, deployment or commercialization
of new products, processes or services driven by 2. Scheme for Promotion of Manufacturing of
technology or intellectual property. Electronic Components and Semiconductors
(SPECS):
STARTUP INDIA SEED FUND • It shall provide financial incentive of 25% on
capital expenditure for the identified list of
About electronic goods, i.e., electronic components,
• Objective: Fund has been set up to provide initial semiconductor/ display fabrication units,
capital to the startups. After that start-ups will Assembly, Test, Marking and Packaging (ATMP)
be provided with the Govt. Guarantees, to help units, specialized sub-assemblies and capital
them raise debt capital. goods for manufacture of aforesaid goods.
• Coverage: The fund would offer financial
assistance to startups for proofs of concept,
42

3. Modified Electronics Manufacturing Clusters • Ordinance adds a new type of license, called
(EMC 2.0) Scheme prospecting license-cum-mining lease.
• It shall provide support for creation of world • Ordinance provides that prior approval of the
class infrastructure along with common central government will not be required in
facilities and amenities, including Ready Built granting these licenses for coal and lignite, in
Factory (RBF) sheds / Plug and Play facilities for certain cases. These include cases where:
attracting major global electronics manufacturers, 1. the allocation has been done by the central
along with their supply chains. government, and
2. the mining block has been reserved by the
Significance: With the three new schemes, the central or state governments to conserve a
government aims to manufacture electronics worth mineral.
₹8 lakh crore, while generating employment for • Ordinance provides that the holders of NREP
about 10 lakh people in the next five years. permits may apply for a prospecting license-cum-
mining lease or mining lease.
‘iCOMMIT’ INITIATIVE • Ordinance provides that state governments can
Recently, the iCommit initiative was launched on the take advance action for auction of a mining
occasion of the World Environment day (5th June). lease before its expiry. However, MMDR Act
permitted auction Only after end of lease period.
About
• Aim: To call upon all stakeholders and Additional Information:
individuals to continue moving towards energy • Mining industry serves as the base for the power
efficiency, renewable energy and sector, with around 72% of India’s current power
sustainability to create a robust and resilient being generated through coal.
energy system for India in the future. • India has world’s 4th largest coal reserves + India
• Nodal agency: The initiative is driven by Energy imports around 50% of its coal used).
Efficiency Services Limited (EESL), under the
administration of the Ministry of Power,
Government of India.

Significance:
• A healthy power sector can help the nation in
meeting the objective of energy access and
security for all.
• It seeks to bring together a diverse spectrum of
government and private players to build a new
energy future for India.
MINERAL LAWS (AMENDMENT) ORDINANCE,

2020
• It amends the Mines and Minerals
(Development and Regulation) Act, 1957
(MMDR Act) and the Coal Mines (Special
Provisions) Act, 2015 (CMSP Act)
• CMSP Act in 2015, provides for the auction and
allocation of mines whose allocation was cancelled
by the Supreme Court.
• Key amendments in mineral laws are Composite
license for prospecting and mining, Removal of
restriction on end-use of coal, Clarifes Eligibility
for auction of coal and lignite blocks, Transfer of
statutory clearances to new bidders among others.
43

3. SERVICE SECTOR IN INDIA Important Projects under USOF:
• Bharat Net– It is planned to connect all the 2,
FUTURE SKILLS PRIME 50,000 Gram Panchayats in the country for
providing broadband connectivity in the Gram
• In February 2018, Future Skills Initiative was
Panchayats.
announced at Hyderabad to reskill the IT
• Services in Left Wing Extremist Areas (LWE).
industry workforce in emerging technologies and
• 25000 Wi-Fi Hotspots - The objective of the
job roles.
scheme is to set up 25,000 public Wi-Fi hotspots
• Jointly rolled out by Ministry of Electronics and
at rural telephone exchanges of BSNL.
IT along with NASSCOM.
• Submarine OFC Connectivity between Mainland
• The Future Skills platform currently offers
India and A & N Islands.
reskilling/ upskilling in 10 emerging
technologies like Artificial Intelligence, Cyber E-COMMERCE IN INDIA
Security, Blockchain, etc. across 70 new job roles
and 155 new skills. Recently, The Competition Commission of India (CCI)
• Now, Future Skills initiative is extended as released a Report titled ‘Market Study on E-
PRIME to industry professionals across commerce in India: Key Findings and Observations’.
different segments, higher education students banks.
and government officials, with the goal to train 4
lakh professionals in next three years. E-commerce sector and related terminologies:
• E-commerce means buying and selling of goods
UNIVERSAL SERVICE OBLIGATION FUND (USOF) and services including digital products over digital
Telecoms likely to get more time to pay ₹42,000 cr in & electronic network.
spectrum dues. • Types of e-commerce business models:

About: • An e-commerce activity where
• It is a non-lapsable fund and deposited into the inventory of goods and services
Consolidated Fund of India, hence it requires Inventory is owned by e-commerce entity
prior parliamentary approval to be dispatched. based and is sold to the consumers
• Idea behind the fund and levy is to provide model directly. E.g.- Grofers.
universal access to telecom services to rural • FDI is not permitted in
and remote areas at affordable and reasonable inventory-based model of e-
prices. commerce.
• Universal Service Levy (USL) is collected from • Means providing of an
the Service Providers at a defined percentage of information technology
Adjusted Gross Revenue (AGR) as a component platform by an e-commerce
of Licence Fee (now it is 5% of the AGR). entity on a digital & electronic
• The fund was created under department of Marketplace network to act as a facilitator
telecommunications, Ministry of based between buyer and seller.
communication and information technology. model E.g.- Amazon, Flipkart etc.
• It is headed by the USOF Administrator who • 100% FDI under automatic
reports to the Secretary, Department of route is permitted in
Telecommunications (DoT). marketplace model of e-
• The Indian Telegraph (Amendment) Act, 2003 commerce.
giving statutory status to the Universal Service
Obligation Fund (USOF).
BHARAT MARKET
• The USOF works through a bidding process,
where funds are given to the enterprise quoting Traders’ body Confederation of All India Traders
the lowest bid for providing services in rural area- (CAIT) will soon launch a national e-commerce
(minimum subsidy maximum service). marketplace ‘bharat market’ for all retail traders in
collaboration with several technology partners.

44

About Bharat market: responsible to compensate for injury or damage
• Online e-commerce marketplace, will integrate caused by defective product or deficiency in
the capabilities of various technology companies services.
to provide end-to-end services in the logistics • Rules on E-commerce and Unfair Trade
and supply chains from manufacturers to end Practices: Consumer Protection (E-commerce)
consumers, including deliveries at home. Rules, 2020 will be notified under the Act where
• The e-commerce portal will include a nationwide E-commerce entities are required to provide
participation by retailers. information to consumers relating to return,
• Aim: to bring 95% of retail traders onboard the refund, exchange, warranty and guarantee,
platform, who would exclusively run the portal. delivery and shipment and country of origin
among others.
SATELLITE TOWN RING ROAD (STRR) • Redressal: E-commerce entities have to
• It is an economic corridor that encompasses acknowledge the receipt of consumer complaint
two states of Karnataka and Tamil Nadu. within 48 hours and redress the complaint
• The project is part of Bharatmala Pariyojna and within one month from the date of receipt. They
will be implemented by the National Highways will also have to appoint a grievance officer for
Authority of India (NHAI). consumer grievance redressal.

Bharatmala Pariyojna
• It is an umbrella initiative under the Ministry of
Road Transport and Highways.
• Aim: To subsume unfinished projects of National
Highways Development Project (NHDP) launched
in 1998 and also focus on new initiatives like
development of roads for better connectivity.
• Implementation: National Highways Authority of
India (NHAI) has been tasked with implementing
the programme.
THE CONSUMER PROTECTION ACT, 2019

The Consumer Protection Act, 2019 has come into
force replacing the old Consumer Protection Act,
1986.

Key Features:

• Central Consumer Protection Authority
(CCPA): It has been set up to promote, protect and BIS-CARE
enforce the rights of the consumer by inquiring
into violations of consumer rights, Union Consumer Affairs Minister has launched the
investigating and launching prosecution at the Bureau of Indian Standard (BIS) Mobile App named
appropriate forum among others. “BIS-Care”.
About BIS-Care
• Consumer Disputes Redressal Commission
(CDRCs): They will be set up at the district, state • The app aims to allow consumers to check the
and national levels. authenticity of the ISI-marked and hallmarked
products and also lodge complaints using the
• Alternate Dispute Resolution Mechanism of
application.
Mediation: A complaint will be referred by a
Consumer Commission for mediation wherever • It is important to ensure that consumers are
scope for early settlement exists and parties aware of the standards and quality products
agree for it. and help in eliminating the supply of sub-standard
products.
• Product liability: A manufacturer or product
service provider or product seller will be held BUREAU OF INDIAN STANDARDS
45

Bureau of Indian Standards celebrates its foundation Commercialization of IPRs, Enforcement and
day on 6th January 2021. Adjudication and Human Capital Development.

About: NIP ONLINE DASHBOARD
• Bureau of Indian Standards (BIS) is the National • It is a one-stop solution for all stakeholders
Standard Body of India working under the aegis looking for information on infrastructure projects
of Ministry of Consumer Affairs, Food & Public in India.
Distribution, Government of India. • The dashboard is being hosted on the India
• Founded on 23 December 1986 by the Bureau of Investment Grid (IIG).
Indian Standards Act, 1986.
• The Bureau of Indian Standards Act, 2016 made India Investment Grid
the BIS a National Standards Body. The BIS Act • It is an interactive and dynamic online platform
has been implemented since 12 October 2017. that showcases updated and real-time investment
• Headquartered: New Delhi. opportunities in the country.
• Functioning: BIS is responsible for the • Developed by: It is an initiative of Department for
harmonious development of the activities of Promotion of Industry & Internal Trade (DPIIT)
standardization, marking and quality Ministry of Commerce and Invest India, the
certification of goods and for matters connected National Investment Promotion and Facilitation
therewith or incidental thereto. Agency.
• Headquartered in New Delhi. • It allows investors to search a pan-India
database for investment opportunities across
BHARAT AIR FIBRE SERVICES
sectors; Track the progress of preferred projects
The Union Ministry of Communications has and indicate interest and Directly communicate
inaugurated “Bharat Air Fibre Services” at Akola in with project promoters.
Maharashtra.
CHUNAUTI CONTEST
About: Union Ministry for Electronics and Information
• The Bharat Air Fibre services are introduced by Technology has launched “Chunauti”- Next
BSNL as part of Digital India initiates by the GoI. Generation Startup Challenge Contest.
• Aim: It aims to provide Wireless Connectivity in
the range of 20 KMs from the BSNL Locations. About
• Features: It provides internet connectivity upto • It aims to further boost start-ups and software
100 Mbps speed. products with special focus on Tier-II towns in
• It is completely wireless and offers broadband the country.
up to 10Mbps up to a distance of 5 Kms. • The contest will identify around three hundred
• These services are special and different from other start-ups working in specified areas and
operators as BSNL is providing unlimited free providing them seed funds of up to 25 lakh
voice calling. rupees and other facilities.
• Benefits: Customers at remote places also will be • The areas identified potential under the scheme
benefitted as BSNL comes with the cheapest are: Edu Tech, Agri Tech, Fintech solutions for
services with the support of Telecom masses, Supply Chain and Logistic management,
Infrastructure Partners (TIPs). Infrastructure, Medical Healthcare as well as jobs
and skilling.
NATIONAL IPR POLICY 2016
• Cost: The government has allocated a budget of
• Policy aims to create and exploit synergies over 95 crore rupees over a period of three
between all forms of intellectual property (IP), years for this programme.
concerned statutes and agencies.
• Seven objectives of IPR Policy are IPR Awareness, Software Technology Parks of India (STPI)
generation of IPRs, Legal and Legislative • It is an Autonomous Society.
Framework, Administration and Management, • Established in 1991.

46

• Parent Organization: Ministry of Electronics and Ø Funded Post Office Savings Account linked
Information Technology (MeitY). India Post Payments Bank Accounts;
• Purpose: To encourage, promote and boost the Ø Postal Life Insurance Policy/Rural Postal Life
Software Exports from India. Insurance Policy; and
Ø Pradhan Mantri Suraksha Bima Yojana
RORO SERVICE OF SOUTH WESTERN RAILWAY Account / Pradhan Mantri Jeevan Jyoti Bima
Yojana Account.
First ever RORO service of South Western Railway
from Nelamangla (near Bengaluru) to Bale (near • The scheme is being launched on pilot basis in
Solapur) has been started. Maharashtra and will be implemented nation-
wide afterwards.
About • The entire state of Maharashtra will be covered
• Roll On-Roll Off (RORO) is a concept of carrying under the scheme.
road vehicles loaded with various • Implementation: The scheme will be
commodities, on open flat railway wagons. implemented by a team of five Gramin Dak Sevaks
• RORO services are combination of best features who will be assigned a village for marketing of all
of road and rail transports and they offer door products, savings and insurance schemes of the
to door service with minimal handling Department of Posts.
transported by fat and direct rail link. • This team will be headed by the Branch Post
Master of the concerned Branch Office.
Also Remember INDIA’S FIRST SEAPLANE PROJECT
• The RO-RO train services were first introduced
in Indian Railways on Konkan Railways in The first of the five seaplane services in Gujarat will
1999. be inaugurated on October 31, the birth anniversary of
• India's first Roll On-Roll Off (Ro-Ro) ferry Sardar Vallabhbhai Patel.
service between Ghogha in Bhavnagar district
and Dahej in Bharuch district, which will About
facilitate vehicular and passenger ferry services • A seaplane is a fixed-winged aeroplane
across the Gulf of Cambay in Gujarat. designed for taking off and landing on water. It
offers the public the speed of an aeroplane with
FIVE STAR VILLAGES SCHEME the utility of a boat.
• The first seaplane project of the country shall
Recently, the Department of Posts has launched a Five connect Sabarmati River in Ahmedabad to the
Star Villages Scheme. Statue of Unity in Kevadia in Narmada district.

• Union Ministry of Civil Aviation is nodal ministry.
About Five Star Villages Scheme:
• Other spots: Dharoi dam (Mehsana district) to
• It aims to ensure universal coverage of flagship
connect Ambaji and Shatrunjay dam
postal schemes in rural areas of the country.
(Bhavnagar district) and Tapi in the next phase.
• It seeks to bridge the gaps in public awareness
• As per the directive, the Airports Authority of
and reach of postal products and services,
India (AAI) requested state governments of
especially in interior villages.
Gujarat, Assam, Andhra Pradesh and
• Under the scheme, all postal products and services Telangana and the administration of Andaman &
will be made available and marketed and Nicobar to propose potential locations for
publicized at village level. setting up water aerodromes to boost the tourism
• The branch offices will function as one-stop sector.
shop to cater all post office-related needs of
villagers. Environmental Impact:
• The schemes covered under the Five Star • The water aerodrome is not a listed
scheme include: project/activity in the Schedule to the
Ø Savings Bank accounts, Recurrent Deposit Environmental Impact Assessment Notification,
Accounts, NSC / KVP certificates; 2006 and its amendments.
Ø Sukanya Samridhi Accounts/ PPF Accounts;

47

• However, the Expert Appraisal Committee was • Currently, there is no law or autonomous body
of the opinion that the activities proposed under governing digital content.
the water aerodrome project may have a similar • At present, the Press Council of India regulates
type of impact as that of an airport. the print media, the News Broadcasters
• In its proposal seeking environmental clearance, Association (NBA) represents the news
the Director of Aviation, Government of Gujarat, channels, the Advertising Standards Council of
had expressed fears of environmental impact India regulates advertising while the Central
during the stage of construction. Board of Film Certification (CBFC) monitors films.
• Also, according to the state government, during • The central government’s move to bring the OTT
seaplane operations, there will be turbulence platforms under the I&B Ministry will give the
created in the water while take-off and landing government control over the OTT platforms which
of seaplanes which will lead to more mixing of were unregulated till now.
oxygen in the water having a positive impact on
the aquatic ecosystem near seaplane operations. Various Sectors and Regulating Bodies:

SHASHI S. VEMPATI COMMITTEE Print Media • Press Council of India (a
The Information and Broadcasting Ministry has statutory, quasi-judicial
constituted a four-member committee to review authority).
the guidelines on TRPs (Television Rating Points). • News Broadcasting
Standards Authority (self-
About regulatory body) set up by
• Chaired by: The committee will be chaired by the News Broadcasters
Shashi S. Vempati, CEO, Prasar Bharti. Association (NBA) regulates
Television television news.
TRP: • Electronic Media
• It represents how many people from which socio- Monitoring Centre, set up in
economic categories watched which channels for 2008, monitors content on
how much time during a particular period. TV.
• Methodology: For calculating TRP, BARC has • Broadcasting Content
installed “Bar-O-Meters” in over 45,000 Complaints Council
empanelled households. These households are (independent and self-
classified into 12 categories under the New regulatory) for television
Consumer Classification System (NCCS). entertainment.
• Central Board of Film
Broadcast Audience Research Council (BARC): Films Certification (CBFC) under
• It is an industry body jointly owned by advertisers, the Ministry of Information
ad agencies and broadcasting companies, and Broadcasting.
represented by The Indian Society of Advertisers, Advertisement • Advertising Standards
the Indian Broadcasting Foundation and the Council of India (a self-
Advertising Agencies Association of India. regulatory body).
GOVERNMENT TO REGULATE OTT PM WANI SCHEME

Government has brought video streaming over-the- Union Cabinet has approved a public Wi-Fi access
top(OTT) platforms under the ambit of the Ministry of network called PM-WANI (Wi-Fi Access Network
Information and Broadcasting. Interface).

About About
• OTT platforms: It is a streaming media service • Aim: To enable easily accessible public Wi-Fi
offered directly to viewers via the Internet. hotspots spread across the country.
Examples include Netflix, Amazon’s Prime • It was first recommended by the Telecom
Video, Hot star and others. Regulatory Authority of India (TRAI) in 2017.

48

• Implementation: PM-WANI will be operated by • Ministry of housing & urban affairs brought to the
different players as described herein under: fore the National Common Mobility Card (NCMC)
Ø Public Data Office (PDO): It will establish, to enable seamless travel by different metros
maintain and operate only WANI compliant and other transport systems across the country
Wi-Fi Access Points and deliver broadband besides retail shopping and purchases.
services to subscribers.
Ø Public Data Office Aggregator (PDOA): It RoDTEP SCHEME
will be an aggregator of PDOs and perform RoDTEP stands for Remission of Duties and Taxes
the functions relating to Authorization and on Export Products. It is a new scheme that is
Accounting. applicable with effect from January 1st, 2021, formed
Ø App Provider: It will develop an App to to replace the existing MEIS (Merchandise Exports
register users and discover WANI from India Scheme).
compliant Wi-Fi hotspots in the nearby area
and display the same within the App for About:
accessing the internet service. • RoDTEP is a scheme for the Exporters to make
Ø Central Registry: It will maintain the details Indian products cost-competitive and create a
of App Providers, PDOAs and PDOs. To begin level playing field for them in the Global Market.
with, the Central Registry will be maintained • It has replaced the current Merchandise
by Centre for Development of Telematic (C- Exports from India Scheme (MEIS), which is not
DOT). in compliance with WTO norms and rules.
• Other Features: There would be no licence fee • The new RoDTEP Scheme is fully WTO compliant
for providing broadband internet through these scheme.
public Wi-Fi networks.
• Significance of the project: Public Wi-Fi Features:
networks will ‘democratize’ content • The scheme will refund to exporters the
distribution and broadband access to millions embedded Central, State and local taxes that
at affordable rates. This will be the UPI (unified were so far not being given rebate or refunded.
payments interface) of connectivity services. • The refund will be credited in the exporter's
ledger account with Customs and used to pay
NATIONAL COMMON MOBILITY CARD
Basic Customs duty on imported goods. The
• Prime Minister has launched the ambitious credits can also be transferred to other importers.
National Common Mobility Card (NCMC) service • The RoDTEP rates will be notified shortly by the
for the Delhi Metro’s Airport Express Line. Department of Commerce, based on the
recommendation of a Committee chaired by
About former Commerce and Home Secretary Dr. G.K.
• The idea of NCMC was floated by the Nandan Pillai. The final Report of the Committee is
Nilekani committee set up by the Reserve Bank expected shortly.
of India (RBI).
• This one card will give integrated access to the STUDENT NOTES:
commuters wherever they travel, whichever
public transport they take.

How it works?
• NCMC is an automatic fare collection system. It
will turn smartphones into an inter-operable
transport card that commuters can use
eventually to pay for Metro, bus and suburban
railways services.
• This card runs on RuPay card.
• The stored value on card supports offline
transaction across all travel needs with minimal
financial risk to involved stakeholders.
49

4. INDIAN INSURANCE MARKET • D-SIIs are perceived as insurers that are ‘too big
or too important to fail’ (TBTF).
INSURANCE REGULATORY AND DEVELOPMENT • Therefore, the continued functioning of D-SIIs is
AUTHORITY OF INDIA (IRDAI) critical for the uninterrupted availability of
insurance services to the national economy.
• IRDAI is a statutory body formed under an Act of How are they classified?
Parliament, i.e. Insurance Regulatory and • To identify such insurers and put them to
Development Authority Act, 1999 (IRDAI Act
enhanced monitoring mechanism, IRDAI has
1999) for overall supervision and development
developed a methodology for identification and
of the Insurance sector in India. supervision of D-SIIs.
• IRDAI is a 10-member body including the
• The parameters, as per the methodology, include:
chairman, five full-time and four part-time 1. Size of operations in terms of total revenue,
members appointed by the government of India. including premium underwritten and the
• It was created based on the recommendations of value of assets under management.
the Malhotra Committee, 1999. 2. Global activities across more than one
• Objective of the IRDAI: promotion of jurisdiction.
competition so as to enhance customer • Implications: The three insurers will now be
satisfaction through increased consumer choice subjected to enhanced regulatory supervision.
and fair premiums, while ensuring the financial
security of the Insurance market. ATAL PENSION YOJANA
• IRDAI’s Head Office – Hyderabad
• Scheme offers monthly, quarterly and half yearly
Functions of IRDA: payment options
• Protect the rights of insurance policy holders. • Existing swavalamban scheme subscribers 18-40
yrs of age can switch to APY.
• Provide registration certification to life
insurance companies. • All eligible family members may subscribe to APY
• Renew, modify, cancel or suspend this in their names for higher pension benefits to
registration certificate as and when appropriate; family.
promote efficiency in conduct of insurance • For the unorganised sector workers who do not
business. have sufficient and reliable old age security
• Promote and regulate professional organisations • APY is regulated by PFRDA.
connected with insurance and reinsurance
business; regulate investment of funds by Pension Fund and Regulatory Development
insurance companies. Authority (PFRDA)
• Adjudication of disputes between insurers and • PFRDA is a statutory body established by an Act
intermediaries or insurance intermediaries. of Parliament to promote old age income security
by establishing, developing and regulating
DOMESTIC SYSTEMICALLY IMPORTANT pension funds, to protect the interests of
INSURERS (D-SIIS) subscribers to schemes of pension funds and for
matters connected there with or incidental
Three insurers- Life Insurance Corporation of India
thereto.
(LIC), General Insurance Corporation of India (GIC)
• PFRDA performs the function of appointing
and New India Assurance Co. have been recognised
various intermediate agencies like Pension Fund
as Domestic Systemically Important Insurers (D-SIIs)
Managers, Central Record Keeping Agency
for 2020-21.
(CRA) etc.

About: • It develops, promotes and regulates the pension
industry under National Pension System and
• D-SIIs refer to insurers of such size, market
also administers the Atal Pension Yojana.
importance and domestic and global inter-
connectedness whose distress or failure would
AROGYA SANJEEVANI
cause a significant dislocation in the domestic
financial system. • Insurance Regulatory and Development Authority
has mandated all general and health insurance
50

companies to offer a Standard Health Insurance • Indian Nuclear Insurance Pool was created in
Product (SHIP). 2015 by GIC-Re, along with several other Indian
Insurance Companies.
INSURANCE INTERMEDIARIES • It has a capacity of ₹1500 crore to provide
• These are brokers or agents who liaise between insurance to cover the liability as prescribed
insurance companies and customers. under Civil Liability for Nuclear Damage Act,
• Department for Promotion of Industry and 2010.
Internal Trade (DPIIT) recently allowed 100% FDI
in insurance intermediaries through the STUDENT NOTES:
automatic route.

PANDEMIC RISK POOL
A working group of IRDAI has recommended setting
up of an Indian Pandemic Risk Pool with public-
private-government participation to provide
coverage for losses resulting from pandemics like
COVID-19 in future.

About pandemic risk pool:
• A pool refers to the practice of insurance
companies coming together and committing
funds to meet claims arising out of any
particular insured risk in proportion to the
business they do. In this manner, claim pay-out is
shared among all pool participants.

• This method is followed when there is too much
uncertainty about the risk for any insurer to take
a call, like in nuclear risks, or when the losses are
high and companies are reluctant to issue policies.

• Similar pandemic pool proposals across the world,

including in the US, France and Germany, are in

various stages of approval.

General Insurance Corporation of India (GIC Re):
• GIC Re was setup in 1972, under the Companies
Act, 1956.
• It was formed for the purpose of superintending,
controlling and carrying on the business of
general insurance.

Indian Terrorism Pool:
• India has created a Pool for Terrorism in 2002,
that covers loss, damage, cost or expense directly
caused by, resulting from or in connection with
any action taken in suppressing, controlling,
preventing or minimizing the consequences of an
act of terrorism by the duly empowered
government or military authority.
• The Pool is administered by GIC Re.

Indian Nuclear Pool:
51

5. MONEY MARKET Gold ETF:
• A gold exchange traded fund (Gold ETF) is a
MOBILE TRADING passive investment fund that aims to track the
price of physical gold.
• Mobile trading refers to trading in the stock • Since it’s an ETF, the units are listed on stock
market using a mobile phone. exchanges and investors can buy or sell units on
• The Securities and Exchange Board of India the exchange platform like any equity instrument.
(SEBI) approved trading through mobile • Simply put gold ETF is like buying gold in an
phones way back in 2010. electronic form.
• Trading apps of brokerages like Zerodha, 5paisa, • While selling a gold ETF unit, an investor will not
ICICI Direct, Upstox, HDFC Securities, Angel get physical gold but the cash equivalent.
Broking, Sharekhan and Kotak Securities feature
among the top apps in the finance category in DECLINING INVESTMENTS IN P-NOTES
both Android and iOS.
Investments in the Indian capital market through
MASALA BONDS participatory notes (P-notes) have hit a nearly 11-year
low by the end of December 2019. The use of P-notes
• Masala bonds are rupee-denominated has been on a decline since 2017.
instruments issued abroad by Indian
borrowers. About:
• They are bonds issued outside India by an • Recently, Securities and Exchange Board of India
Indian entity or corporate. (SEBI) mandated that some of the existing FPIs
• The advantage of these bonds is that any will have to get separate registrations if they
depreciation in the rupee will not affect the want to issue p-notes based on derivatives.
borrower. • Less favourable treatment of non-FATF member
• As it is pegged into Indian currency, if the jurisdictions, such as Mauritius, from the
rupee rates fall, investors bear the risk. perspective of higher KYC restrictions.
• Indian corporates usually issue Masala Bonds to • Issuers will also have to file suspicious
raise funds from foreign investors. transaction reports with the Indian Financial
• The first Masala bond was issued in 2014 by Intelligence Unit on P-Notes.
IFC (investment branch of the World Bank) • Carry out reconfirmation of the P-Note position
for the infrastructure projects in India. on a semi-annual basis besides carrying out KYC
• Investors from outside of India who would reviews every year.
like to invest in Indian assets can invest in
Masala bonds. Indian entities like HDFC, NTPC Participatory Notes (P-Notes):
and India bulls Housing have raised funds via • P-notes are offshore derivative instruments of
Masala Bonds. underlying Indian assets. These are issued by
• Masala bond was the first Indian bond to get registered Foreign Portfolio investors (FPIs) to
listed in London Stock Exchange. overseas investors or hedge funds who wish to be
• These are called as Dim-Sum Bond (China), part of the Indian stock market without
Samurai Bond (Japan), Yankee (USA) and registering themselves with SEBI directly. E.g.
bulldog (UK) Citigroup and Deutsche Bank
• Recently, Asian Development Bank (ADB) has • Benefits: They provide access to quick money to
listed its 10-year masala bonds worth ₹850 crore the Indian capital market. Moreover, it enables
on the global debt listing platform of India INX. the investors to avoid the cumbersome
regulatory approval process. Investors save
GOLD EXCHANGE TRADED FUND
time, money and scrutiny associated with direct
Holdings in gold-backed exchange traded funds and registration.
similar products hit an all-time high, worries about the • The primary reason why P-Notes are worrying is
escalating US-China trade war and uncertainty over because of the anonymous nature of the
monetary policy led to increased demand for the instrument as these investors could be beyond
precious metal. the reach of Indian regulators.

52

AT-1 BONDS option and can opt to pay only interest on these
bonds for eternity.
India’s fourth-largest private lender YES bank was
placed under a moratorium by RBI and its perpetual • Two, banks issuing AT-1 bonds can skip interest
payouts for a particular year or even reduce the
debt additional tier-1 (AT1 bonds) would become
worthless if RBI does ask mutual funds to write down bonds’ face value without getting into hot water
their value. with their investors, provided their capital ratios
fall below certain threshold levels. These

AT-1 bonds: thresholds are specified in their offer terms.
• AT-1, short for Additional Tier-1 bonds, are a type • Three, if the RBI feels that a bank is tottering on
the brink and needs a rescue, it can simply ask
of unsecured, perpetual bonds that banks issue
to shore up their core capital base to meet the the bank to cancel its outstanding AT-1 bonds
Basel-III norms. without consulting its investors. This is what has
happened to YES Bank’s AT-1 bond-holders who
• Basel III norms were a set of rules that banking
are said to have invested ₹10,800 crore.
regulators around the world came up with after
the global financial crisis in 2008, to strengthen ELECTRONIC DEVELOPMENT FUND (EDF)
bank balance sheets. Requiring banks to have their
own skin in the game in the form of permanent • Launched in 2015, aimed to increase
capital, before taking on deposits or loans, is one availability of credit have not completely
of the underlying principles of Basel III norms. fructified.
• RBI’s version of Basel III norms requires Indian • EDF was set up as a “Fund of Funds” to
banks to hold a minimum capital amounting to participate in professionally managed “Daughter
11.5% of their risk-weighted loans. Of this, about Funds” which in turn provided risk capital to
9% is supposed to be the bank’s core capital companies developing new technologies in the
(called Tier 1), with 5.5% in equity. area of electronics.
• AT1 bonds are issued by banks to supplement • Formation of EDF was conceived in the National
their permanent or Tier 1 capital which is Policy on Electronics -2012.
mainly made up of equity shares.
• These bonds can partly or fully skip their interest ESG FUNDS
payments for any year if the bank’s Tier 1 capital Recently, ICICI Prudential Mutual Fund has come out
ratios fall below the RBI’s thresholds. They can with its ESG fund.
also give interest payouts a miss if the bank makes
losses and has insufficient reserves. About ESG Funds:
• Bank can also reduce the principal value of these • ESG is a combination of three words i.e.
bonds temporarily or for good, if its equity Tier 1 environment, social and governance.
ratio falls below specified limits. • It is a kind of mutual fund. Its investing is used
• There are two routes through which retail folk synonymously with sustainable investing or
have acquired these bonds — initial private socially responsible investing.
placement offers of AT-1 bonds by banks seeking • Difference between the ESG funds and other
to raise money; or secondary market buys of funds:
already-traded AT-1 bonds based on Ø Typically, a mutual fund looks for a good
recommendations from brokers. stock of a company that has potential
earnings, management quality, cash flows,
Why are they important? the business it operates in, competition etc.
• AT-1 bonds have several unusual features Ø However, while selecting a stock for
lurking in their fine print, which make them very investment, the ESG fund shortlists
different from plain bonds. companies that score high on environment,
• One, these bonds are perpetual and carry no social responsibility and corporate
maturity date. Instead, they carry call options governance, and then looks into financial
that allow banks to redeem them after five or 10 factors.
years. But banks are not obliged to use this call Ø Therefore, the key difference between the ESG
funds and other funds is 'conscience' i.e the

53

ESG fund focuses on companies with 6. BANKING SECTOR OF INDIA
environment-friendly practices, ethical
business practices and an employee- INDIA’S DIGITAL FINANCE INFRASTRUCTURE
friendly record.
• Regulated by Securities and Exchange Board of Recently, a Paper titled 'The design of digital
India (SEBI). financial infrastructure: lessons from India' was
released by the Bank for International Settlements
• The first ESG mutual fund was launched by the
State Bank of India - SBI Magnum Equity ESG Fund. (BIS).

About Bank for International Settlements (BIS):
STUDENT NOTES:
• Founded in 1930, BIS is an international financial
organisation owned by 60 central banks,
representing countries from around the world
including India.
• Mission: to serve central banks in their pursuit of
monetary and financial stability, to foster
international cooperation in those areas and to act
as a bank for central banks.
• It carries out its work through its meetings,
programmes and through the Basel Process –
hosting international groups pursuing global
financial stability and facilitating their
interaction.
• Its headquarter is in Basel, Switzerland.

BAD BANK

• Bank set up to buy the bad loans and other
illiquid holdings of another financial institution.
• Entity holding significant non-performing assets
will sell these holdings to the bad bank at market
price + By transferring such assets to the bad bank,
the original institution may clear its balance sheet
although it will still be forced to take write-downs.
PROVISIONING NORMS
• Recently, RBI has provided clarification on ‘special
provisioning’ of loans which are under
moratorium.
• Under loan provisioning, banks have to set aside
earning or provide funds to a prescribed
percentage of their bad assets.
• Provisioning norms are prescribed by the RBI as
per asset classification. For example- The normal
provisioning of NPA is 15% for secured loans and
25% of unsecured loans.
• RBI has now clarified that provisioning should be
considered only for loans categorised as Special
Mention Accounts-2 (SMA-2) at the start of
moratorium period.
• SMA is an account which is exhibiting signs of
incipient stress.

54

Asset Classification as per RBI • Scheme aims to help NBFCs and HFCs to improve
SMA-0: Principal or interest payment not their liquidity position and avoid any potential
overdue for more than 30 days but systemic risks to the financial sector.
account showing signs of incipient • SPV will purchase short-term papers from eligible
stress. NBFCs/ HFCs of debt up to ₹30,000 crore, who will
SMA-1: Principal or interest payment utilise the proceeds under this scheme solely for
overdue between 31-60 days. the purpose of extinguishing existing liabilities.
SMA-2: Principal or interest payment
overdue between 61-90 days. ASSET RECONSTRUCTION COMPANY (ARC)
NPA Principal or interest payment Public sector banks have increased the pace of sale of
overdue for a period of more than non-performing assets (NPAs) to asset reconstruction
90 days (or two crop seasons for companies in order to trim their NPAs.
short duration crops and one crop
season for long duration crops). About
Substandard Asset that has remained NPA for a • Special type of financial institution that buys the
Assets period less than or equal to 12 debtors of the bank at a mutually agreed value and
months. attempts to recover the debts or associated
Doubtful Asset that has remained in the sub- securities by itself so that the latter can clean up
Assets standard category for a period of 12 their balance sheets.
months. • This helps banks to concentrate in normal banking
Loss Assets: An asset where loss has been activities.
identified by the bank or internal or • Narasimham Committee – I (1991) envisaged
external auditors or the RBI setting up of a central Asset Reconstruction Fund
inspection but the amount has not to facilitate Banks to improve their balance sheets
been written off wholly. by cleaning up their non-performing loans
portfolio. Later, Narasimham Committee – II
(1998) proposed ARCs.
DIFFERENCE BETWEEN NON-BANKING • ARC is incorporated under the Companies Act
FINANCIAL COMPANY (NBFC) AND BANK and registered with Reserve Bank of India under
• NBFCs provides Banking services to People the Securitization and Reconstruction of
without holding a Bank license. Financial Assets and Enforcement of Security
• NBFC cannot accept Demand Deposits. Interest (SARFAESI) Act, 2002.
• NBFC is not a part of the payment and settlement
system. • The SARFAESI Act helps reconstruction of bad
• NBFC cannot issue Cheques drawn on itself. assets without the intervention of courts.
• Deposit insurance facility of the Deposit Insurance • RBI regulates ARCs as Non-Banking Financial
and Credit Guarantee Corporation is not available Companies (NBFC).
for NBFC depositors, unlike banks. • ARCIL was the first ARC set up by ICICI Bank, State
• NBFC is not required to maintain Reserve Ratios Bank of India and IDBI.
(CRR, SLR etc.). • Role of ARCs are Acquisition of financial assets,
• NBFC cannot indulge Primarily in Agricultural, takeover of Management / Sale or Lease of
Industrial Activity, Sale-Purchase, Construction of Business of the Borrower, Rescheduling of Debts,
Immovable Property. Enforcement of Security Interest and Settlement
of dues payable by the borrower.
SPECIAL LIQUIDITY SCHEME FOR NBFCS/HFCS
Capital needs for ARCs:
• Recently, RBI has announced a special liquidity
• Reserve Bank of India has hiked the capital
scheme for non-banking finance companies
requirement for asset reconstruction companies
(NBFCs)/HFCs through a Special Purpose Vehicle
to Rs 100 crore from Rs 2 crore effective April 1,
(SPV).
2019.
SUPERVISORY ACTION FRAMEWORK (SAF)

55

• Reserve Bank of India (RBI) has decided to • It cannot offer all the services that a commercial
impose restrictions on urban cooperative bank offers.
banks (UCBs) for deterioration of financial • It can take deposits upto 1 lakh per account and
position, in line with the Prompt Corrective Action it can issue debit cards but not credit cards.
(PCA) framework that is imposed on commercial • It cannot lend.
banks. • It has to maintain Cash Reserve Ratio (CRR).
• Under this revised Supervisory Action Framework • RBI has mandated the minimum paid-up equity
(SAF), UCBs will face restrictions for worsening of capital for payments bank at 100 crores.
three parameters: • These entities have to invest a minimum 75% of
1. When net non-performing assets exceed 6% of demand deposit balances in Statutory Liquidity
net advances Ratio (SLR) – eligible government securities or
2. When they incur losses for two consecutive treasury bills with maturity of up to one year.
financial years or • It can hold a maximum of 25% in current and
3. Have accumulated losses on balance sheets & time/fixed deposits with other commercial
if capital adequacy ratio falls below 9%. banks for operational purposes and liquidity
management.
EASE (ENHANCED ACCESS AND SERVICE
• A payments bank can work as a business
EXCELLENCE) 3.0
correspondent (BC) of another bank.
• Finance ministry launches Ease 3.0 for tech- • They can also distribute simple financial products
enabled banking. EASE Agenda is a common like mutual fund units and insurance products.
reform agenda for PSBs aimed at
institutionalizing clean and smart banking. It was MCLR (MARGINAL COST OF FUNDS BASED
launched in 2018 LENDING RATE)
State Bank of India (SBI), the country’s largest lender,
INDIA POST PAYMENTS BANK (IPPB)
reduced its benchmark lending rate — the MCLR — by
India Post Payments Bank Announces Rollout of 10 basis points (bps).
Aadhaar Enabled Payment Services at the First
Anniversary of its Business Operations. About:
• The marginal cost of funds-based lending rate
About: (MCLR) refers to the minimum interest rate of a
• India Post Payments Bank (IPPB) has been bank below which it cannot lend, except in some
established under the Department of Posts, cases allowed by the RBI.
Ministry of Communication with 100% equity • It is an internal benchmark or reference rate for
owned by Government of India. the bank.
• The fundamental mandate of India Post Payments
Bank is to remove barriers for the unbanked & The main components of MCLR:
underbanked and reach the last mile leveraging Negative carry- It is the cost that the banks have
the Postal network comprising 155,000 Post on account of to incur while keeping reserves
Offices (135,000 in rural areas) and 300,000 CRR: with the RBI.
Postal employees. Operating It is the operating expenses
costs: incurred by the banks.
Payment Banks: Tenor It denotes that higher interest
• Payment Bank was established to provide premium: can be charged from long term
payments/remittance services to migrant loans.
labour workforce, low-income households, small Marginal cost of It is the novel element of the
businesses and other unorganized sector entities. funds: MCLR. The marginal cost of
• Nachiket Mor Committee recommended funds will comprise of Marginal
creation of Payment Banks. cost of borrowings and return
• India’s first payments bank was launched by on net worth.
Airtel.
REPO LINKED LENDING RATE

56

State Bank of India (SBI), the country’s largest lender, • Assets to be included as HQLA include cash,
decided to link all the floating rate retail loans and government securities and marketable
loans to micro, small and medium enterprises (MSME) securities issued or guaranteed by foreign
to the Reserve Bank of India’s (RBI) repo rate, with sovereigns. These assets should be free of any
effect from October 1. financial liability.

About: RECENT ANNOUNCED MERGERS OF BANKS
• The RBI had mandated external benchmark • Merger of Bank of Baroda (BoB), Vijaya Bank
linked interest rate to all banks for faster and Dena Bank that took effect this financial year.
transmission of monetary policy rate. • Apart from PNB, UBI and OBC, the government
• The interest rate of the repo rate linked loan will had also announced three other sets of mergers —
be below the present structure of MCLR linked Union Bank of India, Corporation Bank and
loans. Andhra Bank; Allahabad Bank and Indian Bank;
• Linking floating rate loans to repo rate would and, Canara Bank and Syndicate Bank.
mean every time there is a change in repo rate, • The government is yet to announce the scheme of
interest rates will change automatically. amalgamation for these mergers for which
Cabinet approval is required.
Difference between MCLR and Repo linked loans:
‘Assessment of the progress of digitisation from
cash to electronic’: by RBI. Recently RBI announced
new Digital Payments Index (DPI).
FINANCIAL STABILITY AND DEVELOPMENT

COUNCIL (FSDC)
LIQUIDITY MANAGEMENT FRAMEWORK FOR
NBFCs • FSDC is the apex regulatory body for regulating
financial sector which is vital for bringing healthy
• The Reserve Bank of India (RBI) on Monday and efficient financial system in the economy.
introduced its liquidity management framework • FSDC was established in 2010 and the first
for cash strapped non-banking financial meeting of the Council was held on 31st
companies (NBFCs). December, 2010.
Liquidity Management Framework: • FSDC has replaced the High-Level Coordination
• NBFCs have to now maintain a liquidity buffer of Committee on Financial Markets (HLCCFM), which
high-quality liquid assets to meet short-term was facilitating regulatory coordination, though
obligations so that they can survive any acute informally, prior to the setting up of FSDC.
liquidity crisis.
• The RBI has mandated non-deposit taking NBFCs Composition:
with an asset size of Rs 10,000 crore and all • Union Finance Minister is chairman of FSDC.
deposit taking NBFCs irrespective of the asset size • Members include the RBI Governor, heads of the
to maintain a liquidity buffer in terms of liquidity financial sector regulatory authorities (i.e., SEBI,
coverage ratio (LCR) from December 1, 2020. IRDA, RBI, PFRDA and FMC), Finance Secretary
• However, core investment companies, smaller and/or Secretary, Department of Economic Affairs
NBFCs (non-deposit taking), non-operating (Ministry of Finance), Secretary, (Department of
financial holding companies and standalone Financial Services, Ministry of Finance) and the
primary dealers have been exempted from the Chief Economic Adviser.
LCR requirements.
• High Quality Liquid Asset (HQLA) means liquid Mandate:
assets that can be readily sold or immediately • FSDC would monitor macro prudential
converted into cash at little or no loss of value, or supervision of the economy, including the
used as collateral to obtain funds in a range of functioning of large financial conglomerates.
stress scenarios. • It will address inter-regulatory coordination
issues and thus spur financial sector development.
57

• It will also focus on financial literacy and Absconding businessman Nirav Modi has been
financial inclusion. declared a Fugitive Economic Offender under Fugitive
• What distinguishes FSDC from other such Economic Offenders act.
similarly situated organizations across the globe is
the additional mandate given for development of About:
financial sector. • It allows for declaring a person as an offender
after an arrest warrant has been issued against the
NET DEMAND AND TIME LIABILITIES (NDTL) individual and the value of offences exceeds 100
• NDTL is sum of demand and time liabilities crores.
(deposits) of banks with public and other banks • Another condition for declaring a person a fugitive
wherein assets with other banks is subtracted to economic offender (FEO) is when the individual
get net liability of other banks. refuses to return to the country to face
• Deposits of banks are its liability and consist of prosecution in the specified cases.
demand and time deposits of public and other • As per the law, a special FEOA court can order the
banks. confiscation of a FEO’s properties, including those
• Reserve Bank of India (RBI) has exempted banks which are benami, and the proceeds of crime in
from maintaining cash reserve ratio (CRR) for and outside India.
loans to retail and micro, small and medium • Once properties are confiscated, the Union
enterprises for five years, if these loans are government has the right over them, and it can
extended between January 31 and July 31, 2020. dispose them after 90 days.
• At present, CRR is 3.00% (till March 21, 2021)
PARTIAL CREDIT GUARANTEE SCHEME
of net demand and time liabilities. Banks do not
earn any interest for maintaining CRR with the • It allows for purchase of high-rated pooled
RBI. assets from financially-sound non-banking
financial companies (NBFCs) and housing finance
CORE INVESTMENT COMPANIES companies (HFCs) by public sector banks (PSBs).
• Core Investment Companies (CICs) are a • The scheme would cover NBFCs and HFCs that
specialized Non-Banking Financial Companies might have slipped into “SMA-0” category during
(NBFCs). the one-year period prior to August 1, 2018, and
• They have asset size of Rs 100 crore and above. asset pools rated “BBB+” or higher.
• Their main business is acquisition of shares and • The window for one-time partial credit guarantee
securities with certain conditions. offered by the government would remain open till
• It holds not less than 90% of its net assets in the June 30, 2020 or till such date by which Rs 1 lakh
form of investment in equity shares, preference crore worth of assets get purchased by the banks,
shares, bonds, debentures, debt or loans in group whichever is earlier.
companies. • The Finance Minister would have the power to
• Group companies are an arrangement involving extend the validity of the scheme by up to three
two or more entities related to each other months by taking into account its progress.
through any of the following relationships, viz., NEW UMBRELLA ENTITY (NUE) FOR RETAIL
Subsidiary, Joint venture, Associate, Promoter- PAYMENT SYSTEMS
promotee for listed companies, a related party,
Common brand name, and investment in equity The Reserve Bank of India (RBI) has proposed to set
shares of 20% and above. up a new pan-India new umbrella entity (NUE) or
• It does not trade in its investments in shares, entities focusing on retail payment systems with a
bonds, debentures, debt or loans in group minimum paid-up capital of Rs 500 crore.
companies except through block sale for the
purpose of dilution or disinvestment. NUE:
• It accepts public funds. • The proposed entity will set up, manage and
operate new payment systems especially in the
FUGITIVE ECONOMIC OFFENDERS ACT retail space.

58

• It will set up, manage and operate new payment • This will bring 35 multi-state cooperative banks
systems especially in the retail space consisting of under the RBI’s regulatory framework on the line
ATMs, white label PoS, Aadhaar-based payments of other cooperative banks.
and remittance services, develop payment • Consequently, depositors in these banks will be
methods among others. able to get cover under the Deposit Insurance
• It would comprise of but not limited to ATMs, and credit Guarantee Corporation (DICGC).
white label PoS, Aadhaar-based payments and Moreover, the RBI will have the power to
remittance services, develop payment methods, supersede the board of these banks if the
standards and technologies, monitor related requirement comes across.
issues and internationally. • Central Registrar which is central government
• It would take care of developmental objectives bodies and the apex body for the local registrar of
like enhancement of awareness about the cooperative societies will remain responsible for
payment systems. the administration and operational side of the
• The RBI retains the right to approve the management.
appointment of directors as also to nominate a • Currently, Urban Co-operative Banks are
member on the board of the NUE. regulated and supervised by State Registrars of
• RBI has also disallowed any single promoter or Co-operative Societies (RCS) in case of single-
group to hold more than 40% investment in the State co-operative banks and Central Registrar of
capital of the NUE. Co-operative Societies (CRCS) in case of multi-
• The NUE should conform to the norms of State cooperative banks and by the RBI.
corporate governance along with ‘fit and • Cooperative banks would be regulated under the
proper’ criteria for persons to be appointed on its RBI’s banking guidelines and their auditing
board. would also be done as per its norms.
• Qualifications would be laid down for
Functions: appointments, including that of Chief Executive
• Operate clearing and settlement systems. Officers.
• Identify and manage relevant risks such as • Prior permission from the RBI would be
settlement, credit, liquidity and operational and required for the appointment of key positions.
preserve the integrity of the system. • The regulator would deal with issues such as loan
• Monitor retail payment system developments waivers.
and related issues in the country and • The RBI would also have powers to supersede
internationally to avoid shocks, frauds and the board of any cooperative bank in financial
contagions that may adversely affect the system distress.
and the economy in general. • The proposed amendments, along with the
government’s decision to increase the insurance
AMENDMENTS TO BANKING REGULATION ACT cover on bank deposits from ₹1 lakh to ₹5 lakh,
In the wake of the recent Punjab & Maharashtra have been brought to strengthen the financial
Cooperative (PMC) Bank crisis, the Union Cabinet stability of cooperative banks and boost public
approved amendments to the Banking Regulation Act confidence in the banking system.
to give powers to the Reserve Bank of India (RBI)
to issue licences to multi-state cooperative banks. COOPERATIVE BANKS
• These are customer owned financial entities
Banking Regulations Act treats office-bearers of established on a co-operative basis which provide
private banks on a par with public servants when a wide range of regular banking and financial
public money is involved, permitting law enforcement services.
agencies to invoke the anti-corruption Act against • They are registered under the State’s
them wherever there are enough grounds to do so. Cooperative Societies Act or MSCS Act, 2002.
• They also come under the regulatory ambit of
About: the Reserve Bank of India (RBI) under two laws:
1. Banking Regulations Act, 1949, and

59

2. Banking Laws (Co-operative Societies) Act, transaction without any involvement in
1955 handling of funds.
• RBI has released guidelines for regulating
DEPOSIT INSURANCE AND CREDIT GUARANTEE activities of Payment Aggregators and Payment
CORPORATION (DICGC) Gateways in the country.
• DICGC came into existence in 1978 after the • Non-bank PAs will require authorisation from the
merger of Deposit Insurance Corporation (DIC) RBI under the Payment and Settlement Systems
and Credit Guarantee Corporation of India Ltd. Act, 2007 (PSSA).
(CGCI) after passing of the Deposit Insurance • E-commerce marketplaces (e.g. flipkart, Paytm)
and Credit Guarantee Corporation Act, 1961 by providing PA services should separate PA services
the Parliament. from the marketplace business etc.
• It serves as a deposit insurance and credit
guarantee for banks in India. RE-CAPITALIZATION OF RRBs
• It is a fully owned subsidiary of and Recently, the Centre has approved a ₹1,340-crore
is governed by the Reserve Bank of India. recapitalization plan for Regional Rural Banks (RRBs).
• DICGC charges 10 paise per ₹ 100 of deposits
held by a bank. The premium paid by the insured About:
banks to the Corporation is paid by the banks and • The step will help those RRBs which are unable
is not to be passed on to depositors. to maintain a minimum CRAR of 9%, as per the
• DICGC last revised the deposit insurance cover regulatory norms prescribed by the RBI.
to ₹ 1 lakh on May 1, 1993, raising it from ₹ • The recapitalization process of RRBs was
30,000 since 1980. The protection cover of approved by the cabinet in 2011 based on the
deposits in Indian banks through insurance recommendations of a committee set up under
is among the lowest in the world. the Chairmanship of K C Chakraborty.
• The Damodaran Committee on ‘Customer
Services in Banks’ (2011) had recommended a Regional Rural Banks:
five-time increase in the cap to ₹5 lakh due • Regional Rural Banks (RRBs) are financial
to rising income levels and increasing size of institutions which ensure adequate credit for
individual bank deposits. agriculture and other rural sectors.
• Banks, including regional rural banks, local area • RRBs were set up on the basis of the
banks, foreign banks with branches in India, and recommendations of the Narasimham Working
cooperative banks, are mandated to take deposit Group (1975),and after the legislation of the
insurance cover with the DICGC. Regional Rural Banks Act, 1976.
• The first Regional Rural Bank “Prathama Grameen
CENTRAL FRAUD REGISTRY Bank” was set up on 2nd October, 1975.
• Set-up by RBI, it is an online searchable database • The equity of a regional rural bank is held by the
of frauds reported by banks, in the form of Central Central Government, concerned State
Fraud Registry, has been set up to enable timely • The main objectives of RRBs are:
identification, control and mitigation of fraud risk Ø To provide credit and other facilities to the
and for carrying out due diligence during the small and marginal farmers, agricultural
credit sanction process. labourers, artisans and small entrepreneurs in
rural areas.
REGULATING ACTIVITIES OF PAYMENT Ø To check the outflow of rural deposits to
AGGREGATORS (PAS) AND PAYMENT GATEWAYS urban areas and reduce regional
(PGS) imbalances and increase rural employment
• Payment Aggregators facilitate e-commerce generation.
sites and merchants in accepting payment • The RRBs are required to provide 75% of their
instruments from the customers. total credit as priority sector lending.
• Payment Gateways are entities that provide RECAPITALISATION OF RRBs
technology infrastructure to route and
facilitate processing of an online payment
60

• Centre has approved a ₹1,340-crore weak as reflected in parameters like non-
recapitalisation plan for regional rural banks performing asset ratio and return on assets.
(RRBs) to improve their capital-to-risk weighted • The parameters that invite corrective action
assets ratio (CRAR), strengthening these from the central bank are:
institutions that are critical to the provision of 1. Capital to Risk weighted Asset Ratio (CRAR),
credit in rural areas. 2. Net Non-Performing Assets (NPA),
• Cabinet Committee on Economic Affairs (PM is 3. Return on Assets (RoA) and
Head of CCEA) gave its nod for an outlay of ₹670 4. Leverage ratio.
crore as the central share for the scheme with
other 50% to be contributed by other partners. INTEGRATED MARKET SURVEILLANCE SYSTEM
• This would provide minimum regulatory (IMSS)
capital for those RRBs that are unable to • The RBI has proposed to implement IMSS,
maintain the minimum CRAR of 9%. This has which would include capabilities for market
been an ongoing scheme since 2011. surveillance, management information system
• RRBs are required to provide 75% of their (MIS) reports, standard and ad hoc reports
total credit as priority sector lending with (through slicing and dicing of data), and
primary focus on agricultural credit, including compliance monitoring.
small and marginal farmers, as well as micro • Tata Consultancy Services and two others vendors
entrepreneurs and rural artisans. have been shortlisted for implementation of
Integrated Market Surveillance System (IMSS) by
STRESSED URBAN CO-OPERATIVE BANKS TO RBI.
FACE PCA-LIKE CURBS
The Reserve Bank of India (RBI) has decided to revise VIRTUAL CURRENCY
Supervisory Action Framework (SAF) on urban co- Recently Supreme Court set aside a ban by the Reserve
operative banks (UCBs) for deterioration of financial Bank of India (RBI) on banks and financial institutions
position, in line with the prompt corrective action from dealing with virtual currency holders and
(PCA) framework that is imposed on commercial exchanges.
banks.
About:
About News: • In a circular in 2018, the RBI had banned banks
• Under this, UCBs will face restrictions on from dealing with virtual currency exchanges
worsening of 3 parameters: and individual holders on the grounds that these
1. Net non-performing assets exceed 6% of net currencies had no underlying fiat and that it was
advances. necessary in the larger public interest to stop
2. Losses for two consecutive financial years or banks from providing any services related to
have accumulated losses on their balance these.
sheets • There is no globally accepted definition of what
3. Capital adequacy ratio (CAR) falls below 9%. exactly is virtual currency.
• Some agencies have called it a method of
About PCA: exchange of value; others have labelled it a
• It is a framework under which banks with weak goods item, product or commodity.
financial metrics are put under watch by the RBI. • The underlying technology of virtual currencies
• The RBI introduced the PCA framework in are called blockchain, defined bitcoins as “a new
2002 as a structured early-intervention electronic cash system that’s fully peer-to-peer,
mechanism for banks that become under- with no trusted third party”.
capitalised due to poor asset quality, or vulnerable • All users of such virtual currencies would be able
due to loss of profitability. to see and keep track of the transactions taking
• It aims to check the problem of Non-Performing place.
Assets (NPAs) in the Indian banking sector.
• PCA framework is about imposing certain
restrictions on expansion of branches and
dividend distribution by banks that are financially
61

Virtual Currencies Vs Crypto Currencies: currently represents 237 banking companies
• Virtual currency is the larger umbrella term for operating in India.
all forms of non-fiat currency being traded • Indian Banks' Association is managed by a
online. managing committee, and the current managing
• Virtual currencies are mostly created, distributed committee consists of one chairman, 3 deputy
and accepted in local virtual networks. chairmen, 1 honorary secretary and 26
• Cryptocurrencies, on the other hand, have an members.
extra layer of security, in the form of • All public sector banks, old generation private
encryption algorithms. sector banks like HDFC Bank, ICICI Bank, Axis
• Cryptographic methods are used to make the Bank and Federal Bank are members of IBA.
currency as well as the network on which they are • New generation private sector lenders like Kotak
being traded, secure. Bank, IndusInd Bank and Yes Bank are outside
• Most cryptocurrencies now operate on the block the purview of IBA norms.
chain or distributed ledger technology, which • Function: IBA was formed for development,
allows everyone on the network to keep track of coordination and strengthening of Indian
the transactions occurring globally. banking, and assist the member banks in various
• Organizations across the globe have called for ways including implementation of new systems
caution while dealing with virtual currencies, and adoption of standards among the members.
while also warning that a blanket ban of any sort
could push the entire system underground, which LONG TERM REPO OPERATION (LTRO)
in turn would mean no regulation. • RBI has announced a new liquidity facility under
Long Term Repo Operations (LTRO) to inject
SC order on cryptocurrency: Recently, SC uplifted liquidity in the banking system.
ban on Cryptocurrency imposed by RBI more than • Under LTRO, RBI will conduct term repos of one-
one year ago. The relief for players involved in Virtual year and three-year tenors of appropriate sizes
Currencies may be only temporary given that the for up to a total amount of Rs 1 lakh crore at the
Centre, in a draft law, has proposed to ban all private policy repo rate.
cryptocurrencies. • LTRO scheme will be in addition to the existing
LAF and MSF (Marginal Standing Facility)
BANKING UNDER PUBLIC UTILITY SERVICE operations.
• LTRO will lead to decline in short term lending
Union government has declared banking industry as a
rates of banks.
public utility service for six months till October 21
under the provisions of the Industrial Disputes Act. TARGETED LONG-TERM REPO OPERATION
(TLTRO)
About:
• Bringing banking services under the provisions of The Reserve Bank of India (RBI) has said it has
this Act means that the banking sector would not received Rs 1.13 lakh crore worth of bids in the
see any strikes by employees or officers during Targeted Long Term Repo Operation (TLTRO)
the operation of the law starting from April 21. conducted for an amount of Rs 50,000 crore with a
• The notification was issued by the labour three-year tenor.
ministry on April 17against the backdrop of the
coronavirus pandemic which has significantly About:
impacted economic activities. • TLTRO is a tool that lets banks borrow one to
Indian Banks’ Association (IBA): three-year funds from the central bank at the
• Representative body of management of banking repo rate, by providing government securities
in India operating in India. with similar or higher tenure as collateral.
• Established as an association of Indian banks • This helps banks get funds for a longer
and financial institutions based in Mumbai. duration as compared to the short-term (up to 28
• Formed in 1946 days) liquidity provided by the RBI through other
tools such as liquidity adjustment facility (LAF)
• Membership: With an initial membership
and marginal standing facility (MSF).
representing 22 banks in India in 1946, IBA
62

• LTROs provide banks with access to cheaper risk-weighted assets. (Currently 2% under Basel
capital from the RBI. II).
• This, in turn, encourages them to lend more and • Leverage Ratio: It is ratio of Tier 1 capital by the
spur economic activity. average total consolidated assets of a bank. Under
• They can also invest these long-term funds in this, banks are required to hold a leverage ratio in
assets that yield better returns to improve excess of 3%. It was introduced under Basel-III.
profitability. • Basel III introduced two liquidity ratios:
• This will comprise Rs. 25,000 crore to NABARD for 1. Liquidity Coverage Ratio: The Liquidity
refinancing regional rural banks (RRBs), Coverage Ratio requires banks to hold
cooperative banks and micro finance institutions sufficient highly liquid assets that can
(MFIs); Rs. 15,000 crore to SIDBI for on- withstand a 30-day stressed funding
lending/refinancing; and Rs. 10,000 crore to NHB scenario as specified by the supervisors.
for supporting housing finance companies (HFCs). 2. Net Stable Funding Ratio: Net Stable Funding
• RBI stipulated that small and mid-sized NBFCs Ratio (NSFR) requires banks to maintain
and micro-finance institutions (MFIs) should stable funding above the required amount of
receive at least 50% of these funds. stable funding for a period of one year of
extended stress.
BASEL NORMS
CAPITAL CONSERVATION BUFFER (CCB)
• Basel Committee on Banking Supervision is an
international committee formed in 1974 to • CCB is mandatory capital that financial
develop standards for banking regulation. institutions are required to hold above minimum
• It consists of central bankers from 27 countries regulatory requirement.
and the European Union. • According to CCB norms, banks will be required to
• It is headquartered in the office of Bank for hold a buffer of 2.5% Risk Weighted Assets
International Settlements (BIS) in Basel, (RWAs) in the form of Common Equity, over and
Switzerland. above Capital Adequacy Ratio of 9%.
• It developed a series of policy • Designed to ensure that banks build up capital
recommendations known as Basel Accords buffers outside periods of stress which can be
(Basel I Basel II and Basel III), which suggested drawn down, as losses are incurred .
minimum capital requirements to keep bank • Systematically important banks are subject to
solvent during the times of financial stress. higher capital requirements.
BASEL III NORMS COUNTERCYCLICAL CAPITAL BUFFER (CCYB)

FOR BANKING
Implementation of Basel-III were deferred by a year to
January 2023, due to Covid-19 pandemic. • Recently, RBI has deferred implementation of
countercyclical capital buffers (CCyB) and
About extended the realisation period for export
• Basel III accord is a set of financial reforms that proceeds.
was developed by the Basel Committee on • It intends to protect the banking sector against
Banking Supervision (BCBS), with the aim of losses that could be caused by cyclical systemic
strengthening regulation, supervision, and risk risks increasing in the economy.
management within the banking industry • It promotes a sustainable provision of credit to the
• Due to the impact of the 2008 Global Financial economy by making the banking system more
Crisis on banks, Basel III was introduced to resilient and less pro-cyclical.
improve the banks’ ability to handle shocks from • The rule was first introduced in Basel III norms.
financial stress and to strengthen their • Basel III is a voluntary set of measures agreed
transparency and disclosure. upon by central banks all around the world.

Basel-III norms: NIDHI COMPANIES
• Minimum capital requirements for banks is 4.5%
of common equity, as a percentage of the bank’s
63

• These are a class of NBFC and Reserve Bank of EMERGENCY CREDIT LINE GUARANTEE SCHEME
India (RBI) has powers to issue directives for them (ECLGS)
related to their deposit acceptance activities. The Union Cabinet has given its approval for the
• It works on the principle of mutual benefits that Emergency Credit Line Guarantee Scheme (ECLGS) for
are regulated by the Ministry of Corporate MSMEs and MUDRA borrowers.
Affairs.
• It is a company registered under the Companies About ECLGS
Act, 2013. • Aim: To mitigate the economic distress being
• Central Government has amended the provisions faced by about 45 lakh MSMEs by providing them
related to Nidhi companies under the Companies additional funding of up to Rs 3 lakh crore in the
Act, 2013 to make the regulatory regime for Nidhi form of a fully guaranteed emergency credit line.
Companies more effective. • Duration: The loan will be provided for four years
with a moratorium of one year on the principal
SPECIAL LONG TERM TRANSITION LOAN TO
amount.
DISCOMS FOR COVID-19
• Eligibility: All MSME borrower accounts with
• Financial assistance is meant to help the discoms outstanding credit of up to Rs.25 crore as on 29th
clear their dues to power producers, both February,2020 and with annual turnover of up
belonging to the Central public sector to Rs.100 crore would be eligible for the scheme.
undertakings (PSUs) and the private sector, and They can get up to 20% fresh loans of their
transmission companies. entire outstanding credit.
• To be paid in two tranches, the loan will have a • Guarantee: National Credit Guarantee Trustee
tenure of up to 10 years, including moratorium of Company (NCGTC) will provide 100% guarantee
not more than 3 years. against losses on loans advanced to eligible
MSMEs and MUDRA borrowers. No Guarantee
SMALL FINANCE BANKS Fee shall be charged by NCGTC from the Member
• SFB recommended by Nachiket mor committee on Lending Institutions (MLIs) under the Scheme.
financial inclusion, aims to encourage financial • Interest Rates: The Interest rates under the
inclusion. Scheme are capped at 9.25% for banks and
• It is a Differentiated bank (niche banks). financial institutions and at 14% for non-
• Minimum paid-up equity capital for small finance banking financial companies (NBFCs).
banks shall be Rs. 100 crore. • Benefits of the scheme:
• The promoter's minimum initial contribution to Ø The scheme aims to mitigate the distress
the paid-up equity capital of such small finance caused by COVID-19 and the consequent
bank shall at least be 40 per cent (can be brought lockdown, which has severely impacted
down to 26 per cent within 12 years from the date manufacturing and other activities in the
of commencement of business of the bank). MSME sector.
• They are required to maintain Cash Reserve Ø The scheme is expected to provide credit to
Ratio (CRR) and Statutory Liquidity Ratio the sector at a low cost, thereby enabling
(SLR). MSMEs to meet their operational liabilities
• They are required to extend 75 per cent of its and restart their businesses.
Adjusted Net Bank Credit (ANBC) to the sectors
HOUSING FINANCE COMPANIES
eligible for classification as priority sector lending
(PSL) by the Reserve Bank. The Reserve Bank of India (RBI) has proposed
stringent norms for housing finance companies.
ROLL OVER RISK
• It is a risk associated with the refinancing of Housing Finance Companies:
debt. • A HFC is a company registered under Companies
• Generally, the shorter-term the maturing debt, the Act, 1956 which primarily transacts or has as one
greater the borrower's rollover risk. of its principal objects, transacting of the business
of providing finance for housing, whether directly
or indirectly.
64

• HFC is considered a NBFC under the RBI’s • Specialized Supervisory and Regulatory Cadre
regulations. (SSRC) will comprise officers in Grade B to
• Last year, regulation of HFCs was handed over to Executive Director level.
RBI from National Housing Bank (NHB). • On November 1, 2019, RBI decided to reorganise
• Qualification for HFC’s: To qualify as a housing its regulation and supervision departments. It
finance company, 50% of net assets should be to merged the three regulatory departments
real estate lending of which at least 75% should (department of banking, non-banking and
be towards individual housing loans. cooperative bank) into one and did likewise for
• Classification: RBI has classified housing finance the three supervisory departments.
companies (HFC) as systemically important and • As a result, there is only one supervisory
non-systemically important: department which looks after supervision of
Ø Non-deposit taking HFCs with asset size of banks, NBFCs and cooperative banks and only one
₹500 crore and above and all deposit taking regulatory department for these three.
HFCs irrespective of asset size will be treated
as systemically important HFCs. P K MOHANTY COMMITTEE
Ø HFCs with asset size below ₹500 crore will • The RBI has constituted a five-member Internal
be treated as non-systemically important Working Group to review present ownership
HFCs. guidelines and corporate structure for
• Minimum Net Owned Fund: RBI has proposed to Indian Private Sector Banks.
double the minimum net owned fund (NOF) • RBI Central Board Director P K Mohanty will head
requirement for housing finance companies to Rs the committee.
20 crore. • It will submit its report by 30th September, 2020.
• Lending: HFCs can either lend to the group
company in real estate business or lend to WAYS AND MEANS ADVANCE (WMA) SCHEME
retail individual homebuyers in the projects of
• WMA limit is proposed to be revised to Rs 1.20
group entities but not to both.
lakh crore and would be reviewed on a need basis

(from Rs 75,000 crore last year) due to COVID-19.
RESIDEX
• WMA was introduced in 1997 to meet
• RESIDEX is India’s first official Housing Price mismatches in the receipts and payments of
Index (HPI) that captures the price changes of the government.
residential housing.
• RBI gives temporary loan facilities to the centre
• It was launched by National Housing Bank in 2007 and state governments as a banker to government.
covering 26 cities.
• The government can avail of immediate cash from
• It helps buyers and sellers to check and compare the RBI, if required. But it has to return the
prices before entering a transaction. amount within 90 days. Interest is charged at the
• Components of RESIDEX include HPI @ market existing repo rate.
price and HPI @ Assessment Prices. • Recently, the Government has hiked Ways and
• Recently, RESIDEX was revamped and the new Means Advance (WMA) limit with the Reserve
RESIDEX has been expanded to 50 cities which Bank of India (RBI) by 60%.
includes smart cities and state capitals.
• Base year for the new RESIDEX has been moved FRAUD OVERSIGHT WING
from 2007 to 2012-13.
• The Reserve Bank of India (RBI) is in the
SUPERVISORY AND REGULATORY CADRE (SSRC) process of putting together an exclusive wing for
banking fraud oversight.
• Initiated by the Reserve Bank of India (RBI). • This wing will have teams for meta-data
• RBI has decided to recruit 35% of the specialised processing and analysis, artificial intelligence
supervisory and regulatory cadre (SSRC) from the analysis units, as well as proactive risk assessment
market while the remaining 65% will be recruited cells.
via internal promotions. • Fraud oversight wing may comprise up to 600
officers along with experts from the private sector.

65

NATIONAL FINANCIAL REPORTING AUTHORITY • The parties agree to swap back these quantities
(NFRA) of their two currencies at a specified date in the
Recently, It has constituted a Technical Advisory future which could be the next day or even two
years later using the same exchange rate as in the
Committee (TAC) under the Chairmanship of R
Narayanaswamy, Professor IIM-Bangalore. first transaction.
• Benefits è These swap operations carry no
About NFRA: exchange rate or other market risks as
• It is an independent regulator to oversee the transaction terms are set in advance.
auditing profession and accounting standards in • Hence, it provides benefit to the country which is
India. getting dollars to use reserves at any time in
• It was formed in 2018 under Companies Act order to maintain an appropriate level of balance
2013. of payments or short-term liquidity.
• Composition: It consists of one chairman, 3 full- DOLLAR SWAP AGREEMENT BETWEEN INDIA
time members and one secretary.
AND US
• Functions: It is responsible for transparency and
reliability of financial statements and information • Dollar swap is a kind of currency swap. The word
presented by listed companies and large unlisted swap means exchange.
companies in India. • Currency swap between the two countries is an
• Its account is monitored by the Comptroller and agreement to exchange currencies with
Auditor-General of India. predetermined terms and conditions.
• Headquartered in New Delhi. • India is working with the United States to secure a
dollar (currency) swap line that would help in
Powers: providing an additional comfort in an event of any
• It can probe listed companies and those abrupt outflow of funds.
unlisted public companies having paid-up • India already has a currency swap facility with
capital of no less than Rs 500 crore or annual other central banks like Japan, UAE etc.
turnover of no less than Rs 1,000 crore. • In a dollar swap arrangement, the US Federal
• It can investigate professional misconduct Reserve will provide dollars to a foreign central
committed by members of the Institute of bank. At the same time, the foreign central bank
Chartered Accountants of India (ICAI) for (RBI in Indian case) provides the equivalent
prescribed class of body corporate or persons. amount of funds in its currency to the Fed, based
on the market exchange rate at the time of the
Technical Advisory Committee (TAC) transaction.
• Compositions: The TAC comprises 7 members,
PRE-PACKS
including the Chairman.
• Role: It would aid and advise the NFRA on issues In 2020, Ministry of Corporate Affairs (MCA)
related to the drafts of accounting standards and formed a committee led by MS Sahoo, chairperson of
auditing standards. the Insolvency and Bankruptcy Board of India, to look
into including pre-packs as a resolution mechanism
CURRENCY SWAP FACILITY under the IBC.

The Reserve Bank of India (RBI) has signed a $400-
Pre-Packs:
million currency swap facility with Sri Lanka under
the SAARC Currency Swap Framework 2019-22. • It is an agreement for debt resolution of
distressed company through Agreement
Currency Swap: between secured creditors and investors instead
of a public bidding process.
• Under this, a country provides dollars to a
foreign central bank which at the same time • The sale then takes place on the date of initiation
provides the equivalent funds in its currency to of insolvency proceedings or after the
the former based on the market exchange rate at appointment of insolvency administrator.
the time of the transaction.

66

• Government may amend the Insolvency and 2. Indirect monetization (IM): In this method,
Bankruptcy Code (IBC) to introduce pre- packs as deficits are monetized as the government
a resolution mechanism. issues bonds in the primary market and the
• Process would be completed much faster than RBI purchases an equivalent amount of
the traditional Corporate Insolvency Resolution government bonds from the secondary
Process (CIRP). market in the form of Open Market
• In India, such a system would require that Operations (OMOs).
financial creditors agree on terms with potential
investors and seek approval of the resolution plan Primary vs. Secondary Market:
from the National Company Law Tribunal • The primary market is where securities are
(NCLT). created, while the secondary market is where
• Benefits: One major benefit of pre-pack is the those securities are traded by investors.
speed of sale, which often results in higher • In the primary market, companies sell new stocks
returns for creditors when compared with and bonds to the public for the first time, such as
alternative routes into insolvency. with an initial public offering (IPO).
• Drawback: The key drawback of a pre-packaged • The secondary market is basically the stock
insolvency resolution is the reduced market and refers to the BSE, NSE, New York Stock
transparency compared to the Corporate Exchange, the Nasdaq, etc.
Insolvency Resolution Process (CIRP) as financial
creditors would reach an agreement with a K. V. KAMATH COMMITTEE
potential investor privately and not through an • Resolution Framework for Covid-19-related
open bidding process. Stress envisages to make recommendations on

the required financial parameters to be factored in
Insolvency and Bankruptcy Board of India into the resolution plans, with sector-specific
• The Insolvency and Bankruptcy Board of India benchmark.
was established on 1st October 2016 under the • Assets of the banking system comprises of loans
Insolvency and Bankruptcy Code, 2016 (Code). given and investment (in bonds) made by banks.
• It provides for a time-bound process to resolve • Quality of the asset indicates how much of the
insolvency and the code applies to companies, loans taken by the borrowers are repaid in the
partnerships and individuals. form of interests and principal.

MONETIZATION OF DEFICIT Important Terms:
• If the expenditure of the government exceeds its 1. Stressed assets: NPAs + Restructured loans +
income, the government is said to have incurred a Written off assets.
fiscal deficit. This deficit financing has to be done 2. NPA: means interest or principal is not repaid by
either by borrowing from the market or the borrower during a specified time period
monetization of deficit through RBI. (‘overdue’ for a period of 90 days.) Bad assets are
• In simple words, monetization of fiscal deficits further classified into substandard asset, doubtful
involves the financing of such extra expenses with asset, and loss assets depending upon how long a
money, instead of debt to be repaid at some future loan remains as an NPA.
dates. So, it is a form of "non-debt financing". As 3. Restructured loans: Assets which got an
a result, under monetization, there is no increase extended repayment period, reduced interest
in net (not gross) public debt. rate, converting a part of the loan into equity,
• It can occur only through one of two providing additional financing, or some
modalities: combination of these measures. Hence, under
1. Direct Monetization (DM): Under this restructuring a bad loan is modified as a new
method, RBI prints new currency and loan.
purchases government bonds directly from 4. Written off Assets: Those the bank or lender
the primary market (from the government) doesn’t count the money borrower owes to it.
using this currency. As a result, this supports The financial statement of the bank will indicate
the spending needs of the government.

67

that the written off loans are compensated by-transaction basis throughout the RTGS
through some other way. business hours.
SPECIAL LIQUIDITY FACILITY FOR MUTUAL OPEN MARKET OPERATIONS (OMO)

FUNDS (SLF-MF)
• Open market operations is the sale and purchase
• Facility was recently announced by RBI, SLF-MF is of government securities and treasury bills by
on-tap (On-tap implies that is available whenever RBI or the central bank of the country.
needed) and open-ended (Open-ended implies • Objective: To regulate the money supply in the
that there is no restriction on the amounts that economy.
banks are allowed to borrow) and will be available • It is one of the quantitative monetary policy
to all LAF (liquidity adjustment facility) eligible tools.
banks. • RBI carries out the OMO through commercial
• LAF eligible banks: All the Scheduled banks and does not directly deal with the public.
Commercial Banks are eligible to participate in
LAF auctions except the Regional Rural Banks. OMOs vs liquidity:
• Under it, the RBI shall conduct repo operations of • When the central bank wants to infuse liquidity
90 days tenor at the fixed repo rate. into the monetary system, it will buy government
securities in the open market. This way it
ROUND THE CLOCK RTGS FACILITY provides commercial banks with liquidity.
• It enables real-time transfer of funds to a • In contrast, when it sells securities, it curbs
beneficiary’s account and is primarily meant for liquidity. Thus, the central bank indirectly
large-value transactions. controls the money supply and influences short-
• Real time means the processing of instructions term interest rates.
at the time they are received and gross
settlement implies that settlement of funds RBI employs two kinds of OMOs:
transfer instructions occurs individually. 1. Outright Purchase (PEMO) – this is permanent
and involves the outright selling or buying of
24x7x365 RTGS Decision: The Reserve Bank of India government securities.
(RBI) has decided to make available the RTGS system 2. Repurchase Agreement (REPO) – this is short-
round the clock on all days from December 2020 term and are subject to repurchase.
in order to facilitate swift and seamless payments in
REVISED PRIORITY SECTOR LENDING (PSL)
real-time for domestic businesses and institutions.
GUIDELINES

RTGS vs NEFT: The Reserve Bank of India (RBI) revised priority
• RTGS is meant for large-value instantaneous sector lending (PSL) guidelines to include
fund transfers while NEFT is generally used for entrepreneurship and renewable resources, in line
fund transfers of up to Rs. 2 lakhs. with emerging national priorities. RBI also recently
Ø The minimum amount to be remitted through increased the limits for renewable energy, including
RTGS is Rs. 2,00,000 with no upper or solar power and compressed bio-gas plants.
maximum ceiling.
Ø There is no limit imposed by RBI for funds About PSL:
transfer through NEFT system. However, • The concept of ‘Priority sector lending’ focuses
banks may place amount limits based on their on the idea of increasing the lending of the banks
own risk perception with the approval of its towards few specified sectors and activities in the
board. economy. The banks are mandated to encourage
• Mechanism: the growth of such sectors with adequate and
Ø NEFT is an electronic fund transfer system timely credit.
in which the transactions received up to a
particular time are processed in batches. Following are the key features of PSL
Ø Contrary to this, in RTGS, the transactions are methodology:
processed continuously on a transaction-
68

• The provisions of PSL apply to every • Committee has been appointed under YM
Commercial Bank [including Regional Rural Deosthalee.
Bank (RRB), Small Finance Bank (SFB), Local • Main benefit would be to provide lenders with a
Area Bank] and Primary (Urban) Co-operative 360-degree view of the borrower’s outstanding
Bank (UCB) other than Salary Earners’ Bank credits and past performance
licensed to operate in India by the Reserve Bank of • PCR will help to reduce NPAs.
India.
• All scheduled commercial banks and foreign banks Pradhan Mantri Jan Dhan Yojana
(with a sizable presence in India) are mandated to • Financial inclusion program of government.
set aside 40% of their Adjusted Net Bank Credit • Focuses on coverage of rural as well as urban
(ANBC) for lending to these sectors. areas.
• Regional rural banks, co-operative banks and • Any individual above the age of 10 years can open
small finance banks have to allocate 75% of ANBC BSBDA Account. Plan envisages universal access
to PSL. to banking facilities with at least one basic banking
• Sectors in PSL: Agriculture, MSME, Export Credit, account for every household.
Education, Housing, Social Infrastructure, • The beneficiaries would get rupay Debit card
Renewable Energy. having inbuilt accident insurance cover of Rs. 1
• Fresh categories included in the PSL category: lakh. Plan also envisages channelling all
Ø Bank finance of up to ₹50 crore to start-ups Government benefits (from Centre / State / Local
(Start-ups were considered under the MSME Body) to the beneficiary’s accounts and pushing
category). the Direct Benefits Transfer (DBT) scheme of the
Ø loans to farmers both for installation of solar Union Government.
power plants for solarisation of grid-
connected agriculture pumps. SHADOW BANKING SYSTEM
Ø For setting up compressed biogas (CBG)
plants. • Financial system outside regular banking system.
Ø Higher weightage has been assigned to • Term was coined by economist Paul McCulley in
incremental priority sector credit in 2007.
‘identified districts’ where priority sector • Showdown banking system have a higher cost of
credit flow is comparatively low. funding and are out of regulatory oversight.
Ø The targets prescribed for ‘small and
RESERVE BANK INNOVATION HUB
marginal farmers’ and ‘weaker sections’ are
being increased in a phased manner. Reserve Bank of India (RBI) has announced the setting
Ø Higher credit limit has been specified for up of an Innovation Hub under the chairmanship of
farmer producer organisations Kris Gopalakrishnan.
(FPOs)/farmers producers companies (FPCs)
undertaking farming with assured marketing About:
of their produce at a pre-determined price. • The RBI set up the hub to promote, support and
Ø Loan limits for renewable energy have been hand-hold cross thinking.
doubled. • The hub will aim to increase the use of innovative
Ø For improvement of health infrastructure, technologies across the finance sectors.
credit limit for health infrastructure • The hub acts as a centre for incubation and
(including those under ‘Ayushman Bharat’) ideation of new capabilities that can be leveraged
has been doubled. to create innovative financial services and
products.
PUBLIC CREDIT REGISTRY (PCR) • The hub will aid in achieving the following
• PCR is planned as an extensive database of credit objectives:
information for all credit products in the country Ø Efficient Banking services.
from point of origination of credit to its Ø Deepen Financial Inclusion.
termination. Ø Strengthen consumer protection.
• PCR to be set up by RBI. It may require Ø Business Continuity in times of emergency.
amendment in RBI Act 1934 • Features:
69

Ø The Hub will collaborate with financial sector POSITIVE PAY MECHANISM
institutions, technology industry and
• Positive Pay is a fraud detection tool adopted by
academic institutions and coordinate efforts
banks to protect customers against forged,
for exchange of ideas and development of
altered or counterfeit cheques.
prototypes related to financial innovations.
• It cross verifies all details of the issued cheque
Ø It would also develop internal infrastructure
before funds are encashed by the beneficiary.
to promote fintech research and facilitate

engagement with innovators and start-ups.
Process:

• Under this, the issuer of the cheque submits
Kris Gopalakrishnan Committee
electronically through channels like SMS,
• The Committee was formed by the Ministry of
mobile app and Internet banking, certain
Information Technology in September 2019.
minimum details of cheque to the drawee bank,
• It submitted a report on Non-Personal Data details of which are cross-checked with the
Governance Framework in July 2020. presented cheque by Cheque Truncation System
(CTS).
ASSET RECONSTRUCTION COMPANIES (ARCs)
• Any discrepancy is flagged by CTS to the drawee
Recently, former central bankers favoured role of bank and presenting bank who then take
Asset reconstruction companies (ARCs) in insolvency redressal measures.
resolution. • Cheque Limits: It ensures that every high-value
cheque valued at Rs 50,000 and above is
About ARCs: crossed checked with details provided by the
• ARC is a special type of financial institution that issuing party or the individual.
buys the debtors of the bank at a mutually • This will cover approximately 20 per cent of
agreed value and attempts to recover the debts or transactions by volume and 80 per cent by
associated securities by itself. value.
• Narasimham Committee – I (1991): envisaged • Developed by: National Payments Corporation
setting up of a central Asset Reconstruction Fund of India (NPCI) will develop the facility of Positive
to facilitate Banks to improve their balance sheets Pay in CTS and make it available to participant
by cleaning up their non-performing loans banks.
portfolio. Later, Narasimham Committee – II
(1998) proposed ARCs. TARP-LIKE PROGRAMME
• ARC is incorporated under the Companies Act • TARP was a programme to purchase toxic assets
and registered with Reserve Bank of India under and equity from financial institutions to
the Securitisation and Reconstruction of strengthen its financial sector done by US
Financial Assets and Enforcement of Security Federal Reserve in 2008 during the peak of the
Interest (SARFAESI) Act, 2002. Lehman Crisis.
• RBI regulates ARCs as Non-Banking Financial • India plans TARP-like programme to bail out
Companies. NBFCs.

ARCIL was the first ARC set up by ICICI Bank, State FULLY ACCESSIBLE ROUTE (FAR)
Bank of India and IDBI. There are around 24 ARCs now
• RBI has introduced a separate channel called Fully
and Edelweiss is the largest one.
Accessible Route (FAR) to enable non-residents

to invest in specified Government of India
Role of ARCs as defined under SARFAESI Act: dated securities.
• Acquisition of financial assets • It was earlier announced in Union budget 2020-
• Change or takeover of Management / Sale or Lease 21.
of Business of the Borrower • Under this route, non-resident investors can
• Rescheduling of Debts invest in specified government securities without
• Enforcement of Security Interest any investment ceilings.
• Settlement of dues payable by the borrower • These securities attract no foreign portfolio
investor (FPI) limits. However, FPI limit in all
70

other G-secs is 6 per cent. Domestic investors can • The maximum cost of the physical acceptance
also invest in these. device eligible for subsidy is Rs 10,000
• There are other two mechanisms for foreign (including one-time operating cost up to Rs 500).
investors: • The maximum cost of the digital acceptance
1. Medium-Term Framework where FPI limit device eligible for subsidy is Rs 300 (including
on G-sec is 6% and on SDLs is 2% and onetime operating cost up to Rs 200).
2. Voluntary Retention Route, which allows • Fixing Accountability: Acquirers of the subsidy
investors easier rules in return for a shall submit quarterly reports on the
commitment to remain invested for a longer achievement of targets to the RBI.
period.
LEGAL ENTITY IDENTIFIER (LEI) SYSTEM
PAYMENTS INFRASTRUCTURE DEVELOPMENT
The Reserve Bank of India introduced the Legal
FUND (PIDF)
Entity Identifier system for all payment transactions
Recently, the Reserve Bank of India (RBI) has of fifty crores and above through NEFT (National
announced the creation of a Rs. 500-crore Payments Electronic Funds Transfer) and RTGS (Real Time
Infrastructure Development Fund (PIDF). Gross Settlement).

About: About:
• The setting of PIDF is in line with the measures • The LEI is a 20-digit number used to uniquely
proposed by the vision document on payment identify parties to financial transactions
and settlement systems in India 2019-2021. worldwide.
• It is also in line with the RBI's proposal to set up • Developed by: International Organization for
an Acceptance Development Fund which will be Standardization.
used to develop card acceptance infrastructure • Objective: To improve the quality and accuracy of
across small towns and cities. financial data systems for better risk management
• Objective: to encourage deployment of Point of post the Global Financial Crisis.
Sale (PoS) infrastructure, both physical and • The LEI has been introduced by the RBI in a
digital, in tier-3 to tier-6 centres and north eastern phased manner for participants in the over the
states. counter (OTC) derivative and non-derivative
• Setting up of this fund is in line with the markets as also for large corporate borrowers.
recommendations of committee chaired by • In India, LEI can be obtained from Legal Entity
Nandan Nilekani. Identifier India Ltd. (LEIL), which is also
• Duration: The fund will be operational for three recognised as an issuer of LEI by the Reserve Bank
years effective from 1st January, 2021 and may under the Payment and Settlement Systems Act,
be extended for two more years. 2007.
• Management: An Advisory Council (AC) under
the chairmanship of RBI deputy governor BP Code structure of LEI:
Kanungo has been constituted for managing the It is an alpha-numeric string. The first four
PIDF. characters identify the local operating unit. The
• Implementation: The types of acceptance characters five to eighteen are assigned by the Local
devices to be covered under the scheme are Operating Unit. The last two characters are Check sum
physical PoS, mPoS, GPRS, PSTN, and QR code- digits. The Checksum digits are used to identified the
based payments (mPoS - mobile PoS, GPRS - errors that occur during the process of transaction.
General Packet Radio Service, PSTN - Public
Switched Telephone Network). NATIONAL STRATEGY FOR FINANCIAL
• However, payment methods that are not inter- INCLUSION (NSFI)
operable would not be considered under the • Reserve Bank of India (RBI) has chalked out an
PIDF. ambitious strategy for financial inclusion till 2024,
• PIDF scheme is on a reimbursement basis and in which it aims to strengthen the ecosystem for
accordingly, the claim has to be submitted only various modes of digital financial services in all
after making payment to the vendor. Tier-II to Tier VI centres to create the necessary
71

infrastructure to move towards a less-cash society • The share of NBFC-MFIs (microfinance
by March 2022. institutions) in the overall microfinance sector has
• NSFI is for the period of 2019-2024. come down to a little more than 30% as several
large MFIs had converted into Small Finance
JAYANT KUMAR DASH COMMITTEE Banks.
• The working group consists of both internal and
external members and is chaired by Jayant STUDENTS NOTES:
Kumar Dash, Executive Director, RBI.
• The working group will:
Ø Evaluate digital lending activities and
assess the penetration and standards of
outsourced digital lending activities in RBI
regulated entities;
Ø Identify the risks posed by unregulated
digital lending to financial stability, regulated
entities and consumers; and
Ø Suggest regulatory changes to promote
orderly growth of digital lending.
• It will also recommend measures for expansion
of specific regulatory or statutory perimeter
and suggest the role of various regulatory and
government agencies. It will also recommend a
robust fair practices code for digital lending
players.

SINGLE SBI BRANCH FOR ALL FCRA ACCOUNTS

• The Union Home Ministry has asked all NGOs
seeking foreign donations to open a designated
FCRA account at the State Bank of India’s New
Delhi branch by March 31, 2021.
• NGOs registered under FCRA shall not receive any
foreign donations in any other bank account from
April 1, 2021.
• In September, the Foreign Contribution
(Regulation) Act, 2020 was amended by
Parliament and a new provision that makes it
mandatory for all non-government
organizations and associations to receive
foreign funds in a designated bank account at
SBI’s New Delhi branch was inserted.
NON-BANKING FINANCIAL COMPANIES-

MICROFINANCE INSTITUTIONS (NBFC-MFIS)
• NBFC MFI is a non-deposit taking NBFC (other
than a company licensed under section 25 of the
Indian Companies Act, 1956) that meets the
following conditions: minimum Net Owned Funds
(NOF) of Rs.5 crore. (For those in the North
Eastern Region Rs. 2 crores are required as
minimum NOF) and at least 85% of its Total Net
Assets are in the nature of “Qualifying Assets” .

72

7. TAXATION • It can refer to a situation where a business has
overpaid taxes or taxes paid in advance on its
TAXATION LAWS (AMENDMENT) BILL, 2019 balance sheet.

Lok Sabha passes Bill to effect corporate tax reduction. Deferred Tax Liabilities:

• A deferred tax liability is a tax that is assessed or
About:
is due for the current period but has not yet been
• Taxation Laws (Amendment) Bill, 2019, will paid.
amend the Income Tax Act 1961 and the
• The deferral comes from the difference in timing
Finance Act 2019. between when the tax is accrued and when the tax
• The main aim of the bill is to promote growth and is paid.
investment in domestic manufacturing sector. • A deferred tax liability records the fact the
• The bill provides an option for the domestic company will, in the future, pay more income
companies to pay taxes at the rate of 22%. tax because of a transaction that took place during
• This can be availed only if the companies are not the current period, such as an instalment sale
claiming deductions under the Income Tax act. receivable.
• The companies opting for the new tax rates need
not pay Minimum Alternate Taxes (MAT). DIVIDEND DISTRIBUTION TAX (DDT)
MINIMUM ALTERNATIVE TAX (MAT) Finance Minister announced abolition of DDT to be
paid by companies in her budget speech.
• The Finance Ministry said companies opting for
the lower corporate tax rate of 22% will not be About:
allowed to reduce their tax liability by claiming • A dividend is a return given by a company to its
deductions towards additional depreciation and shareholders out of the profits earned by the
Minimum Alternative Tax (MAT) credits. company in a particular year.
• Dividend constitutes income in the hands of the
About MAT: shareholders which ideally should be subject to
• It is the minimum tax imposed on book profit of income tax.
companies who record nil or negligible profit • However, the income tax laws in India provide
to pay the usual corporate income tax. for an exemption of the dividend income
• Book profit means the net profit as shown in the received from Indian companies by the investors
profit & loss account for the relevant previous. by levying a tax called the DDT on the company
• It is applicable to all companies, except those paying the dividend.
engaged in infrastructure and power.
Who were required paid DDT?
DEFERRED TAX
• Any domestic company which is
ICICI Bank net hit by higher deferred tax. declaring/distributing dividend is required to
pay DDT at the rate of 15% on the gross amount
About of dividend as mandated under Section 115O of
• Deferred tax is a form of tax levied on companies. the Income Tax Act.
• Deferred tax can arise as a result of timing • DDT was also applicable on mutual funds.
difference or temporary differences in
accounting. Why it is scrapped?
• There are two forms of deferred taxes, knows as • Every MNE investing in India is faced with the
Deferred Tax Assets and Deferred Tax question of tax-efficient repatriation of profits that
Liabilities. accumulate here.
• The dividend that the holding company would
Deferred Tax Asset: receive would have already suffered substantial
• A deferred tax asset is an asset on a company's tax in India, although indirectly.
balance sheet that may be used to reduce its
taxable income.

73

• The foreign company would normally be required transactions originating from India in the
to pay tax on the dividend so received in its home amended Finance Bill 2020.
jurisdiction.
• DDT being a tax in the Indian company and the About:
foreign company not paying taxes directly on such • India will levy an equalization levy of 2% on sales
dividend income in India, it would not be able to made by foreign e-commerce companies in the
claim foreign tax credit in its home jurisdiction. country. This will impact those companies that
• This resulted in a double whammy for foreign don’t have a base in India, but sell their goods here.
companies as, at a group level, they suffered • Equalization Levy is a direct tax, which is
double taxation. withheld at the time of payment by the service
recipient
DIRECT TAX VIVAD SE VISHWAS ACT, 2020 • The levy would be imposed on those companies
• Act provides an opportunity to taxpayers to settle that have a turnover or sales of over Rs 2 crore
direct tax disputes by paying due taxes with in the previous year.
complete waiver of interest and penalty till June • Also, the compliance of the levy has been shifted
30, 2020. to the non-resident service provider.
• It is applicable to all the appeals/petitions filed by • Now, expanded scope stretches beyond goods
taxpayers or the income tax department, with the and services supplied to Indian residents and
following forums: Commissioner of Income-tax includes supplies to any person using an Indian
(Appeals); Income-tax Appellate Tribunal; High Internet Protocol (IP) address.
Court; or Supreme Court as on the 31st day of • For example, a foreign citizen availing services,
January, 2020. whilst visiting India and using the Indian IP
• Pending appeal may be against disputed tax, address is also covered.
interest or penalty. • In budget 2018, the government had proposed to
• Disputes not covered under the Act: where get its fair share of tax from business-to-
prosecution has been initiated before the consumer transactions by introducing the
declaration is filed or which involve persons who concept of “Significant Economic Presence”.
have been convicted or are being prosecuted for • The idea was to tax profits of those digital
offences under certain laws. businesses that don’t have a physical presence
in India but derive significant economic value
ADJUSTED GROSS REVENUE from the country.
• Adjusted Gross Revenue (AGR) is the usage and • In this year’s budget, it was announced that SEP
licensing fee that telecom operators are charged provisions have been deferred to April 1, 2021.

by the Department of Telecommunications (DoT).
• It is divided into spectrum usage charges and Global Scenario: Australia - Turnover tax called
licensing fees, pegged between 3-5 percent and 8 digital services tax is proposed. New Zealand -
percent respectively. Amazon tax is proposed. OECD has considered the
Action Plan 1 called “Addressing the tax challenges of
• As per DoT, the charges are calculated based on all
the Digital Economy" as part of its Base Erosion and
revenues earned by a telco – including non-
telecom related sources such as deposit interests Profit Shifting Project (BEPS). France has
and asset sales. Telcos, on their part, insist that implemented tax on large technology companies with
AGR should comprise only the revenues generated large annual global revenue called GAFA Tax (Google
from telecom services. Apple Facebook Amazon)
• Supreme Court has upheld the definition of
TAXATION AND OTHER LAWS (RELAXATION OF
Adjusted Gross Revenue (AGR) calculation as
CERTAIN PROVISIONS) ORDINANCE, 2020
stipulated by the Department of
Telecommunications. Recently, the government has promulgated the
'Taxation and Other Laws (Relaxation of Certain
TAXING GLOBAL TECHNOLOGY COMPANIES Provisions) Ordinance, 2020’.
The government has expanded the scope of
equalization levy to all overseas e-commerce About:

74

• The Ordinance brings into effect various tax Prime Minister has launched the platform called
compliance related measures announced on “Transparent Taxation – Honoring the Honest”.
March 24, 2020 in the wake of COVID-19
pandemic. About:
• The government has extended the deadline for • Aim: To bring transparency in income tax
filing income tax, last dates for making systems and empower taxpayers.
investments in instruments such as National • Features: The main features of the platform are
Savings Certificates, Public Provident Fund for faceless assessment, faceless appeal and
claiming income tax benefits, etc. taxpayer charter.
• The last date for linking PAN with biometric ID
Aadhaar has been extended by three months to Faceless Assessment:
June 30. • It aims to eliminate the interface between the
• The Ordinance has also amended the provisions taxpayer and the income tax department.
of the Income-tax Act to provide the same tax • There will be no need for the taxpayer to visit
treatment to the Prime Minister’s Citizen the income tax office or the officer.
Assistance and Relief in Emergency Situations • The selection of a taxpayer is possible through
Fund (PM-CARES Fund) as available to the Prime systems using analytics and Artificial Intelligence.
Minister’s National Relief Fund (PMNRF). • The system abolishes territorial jurisdiction. A
• The donation made to the PM-CARES Fund shall taxpayer may belong to a particular city but the
be eligible for 100% deduction under section assessment order, review and the finalisation
80G of the I-T Act. will take place in different cities.

BORDER ADJUSTMENT TAX Faceless Appeal:
• Recently, a NITI Aayog member has favored • Under the system, appeals will be randomly
imposing a Border Adjustment Tax (BAT) on allotted to any officer in the country. The identity
imports to provide a level-playing field to of the officer deciding the appeal will remain
domestic industries. unknown.
• BAT is a duty that is proposed to be imposed on • The taxpayer will also not be required to visit the
imported goods in addition to the customs levy income tax office or the officer and the appellate
that gets charged at the port of entry. decision will be team-based and reviewed.
• BAT is a fiscal measure that imposes a charge on
goods or services in accordance with the Taxpayer Charter:
destination principle of taxation. • This outlines the rights and responsibilities of
• Generally, BAT seeks to promote “equal both tax officers and taxpayers.
conditions of competition” for foreign and • This is to ensure fairness and avoid harassment in
domestic companies supplying products or the quest of collecting taxes from the citizens.
services within a taxing jurisdiction. • Only three countries in the world so far have
enshrined the rights of taxpayers, namely Canada,
Need of BAT: Australia and the US. Through taxpayer charter,
• The Indian industry has been complaining to the India also joins the list.
government about domestic taxes like electricity
duty, duties on fuel, clean energy cess, mandi tax, UNIFIED GAS PRICE SYSTEM
royalties, biodiversity fees that get charged on Government is planning to cut down the cost of
domestically produced goods as these duties get transportation of natural gas by setting a fixed tariff
embedded into the product. for the transportation of natural gas for longer
• But many imported goods do not get loaded distances to boost gas consumption.
with such levies in their respective country of
origin and this gives such products price Background:
advantage in the Indian market. • Currently, tariffs for pipeline usage are divided
into zones of 300 km, with the tariff increasing
TRANSPARENT TAXATION – HONORING THE
HONEST
75

for zones further away from the point where gas is • Pricing of domestically produced natural gas:
injected.
• Thus, these tariffs increase the cost for buyers Administered • Set by the Government of
of gas further away from the point of injection Price India every six months.
of natural gas. All of India’s imported natural gas Mechanism • Weighted average of
arrives at terminals on the west coast leading to (APM) prevailing prices in US, UK,
costs for buyers increasing, the further east they Canada and Russia.
are located. • Pricing regime covers almost
• The government is proposing a unified price 80% of the domestically
system with one price for those transporting gas produced natural gas.
nearby within 300 km and one price for those Non- • Applicable on contractual
transporting gas beyond 300km. Administered agreements-based gas
• Also, Petroleum and Natural Gas Regulatory Price production.
Board (PNGRB) has published a discussion paper Mechanism • Only 20% of the total
on moving from a system where buyers of gas are (Non-APM) or domestic production.
charged for every pipeline, to a single charge Free Market • New reform would cover
across a pipeline network. gas beneficiaries in this regime.

Steps taken for better pricing: SIN GOODS AND SIN TAX
• Gas price pooling, 2015: Under the plan, price of
• Finance Minister recently said that two-wheelers
cheaper domestic gas will be averaged or pooled
are neither a luxury nor sin goods and so, merit a
with cost of expensive imported LNG to create a
GST rate revision. Two-wheelers currently attract
uniform rate for fertilizer plants.
28% GST.
• Indian Gas Exchange (IGX): launched recently, as
• Sin goods are goods which consider harmful to
a digital trading platform that will allow buyers
society, like Alcohol and Tobacco, Candies, Drugs,
and sellers of natural gas to trade both in the spot
Soft drinks, Fast foods, Coffee, Sugar, Gambling
market and in the forward market for imported
and Pornography.
natural gas across three hubs —Dahej and Hazira
in Gujarat, and Kakinada in Andhra Pradesh. • According to the current GST rate structure, some
of the sin goods that attract a cess include
• Hydrocarbon Exploration Licensing Policy: All
cigarettes, pan masala and aerated drinks. Apart
gas production from new discoveries can be sold
from sin goods, luxury products like cars also
at market-based prices, though it remains subject
attract a cess.
to a price ceiling.
• Not under GST: As gas prices are not under GST, RETROSPECTIVE TAXATION
it has led to varying tax rates on natural gas
production and related value chain, such as • Retrospective Taxation allows a country to pass a
pipelines and retailing in different states. rule on taxing certain products, items or
services and deals and charge companies from
NATURAL GAS a time behind the date on which the law is
passed.
• Mixture of gases which are rich in hydrocarbons
• Countries use this route to correct any
consisting of methane, nitrogen, carbon dioxide
anomalies in their taxation policies that have, in
etc.
the past, allowed companies to take advantage of
• Natural gas reserves are deep inside the earth
such loopholes.
near other solid & liquid hydrocarbons beds like
• Apart from India, many countries including the
coal and crude oil. It is not used in its pure form
USA, the UK, the Netherlands, Canada, Belgium,
• Domestically produced natural gas contributes to
Australia and Italy have retrospectively taxed
only 48% of India’ total consumption of domestic
companies.
gas + It is being supplied from the oil & gas fields

located at western and south-eastern areas viz.
What is the Bilateral Investment Treaty?
Hazira basin, Mumbai offshore & KG basin as well
as North East Region (Assam & Tripura).

76

• The BIT was signed for promotion and • The revenue collected through the green tax will
protection of investment by companies of each be kept in a different account and will only be
country in the other’s jurisdiction. utilised for tackling pollution.
• The two countries would, under the BIT, ensure • Exemptions: The following vehicles will be
that companies present in each other’s exempted from the Green Tax proposal:
jurisdictions would be “at all times be accorded Ø Strong hybrids, EVs, and vehicles that run on
fair and equitable treatment and shall enjoy alternative fuels such as CNG, LPG, and
full protection and security in the territory of ethanol.
the other”. Ø Vehicles used in farming such as tractors,
harvesters, and tillers.
United Nations Commission on International
Trade Law: Differential Taxation:
• UNCITRAL was established in 1966 as a • Personal vehicles are proposed to be charged
subsidiary body of the United Nations General green tax at the time of renewal of registration
Assembly (UNGA). certification after 15years.
• It is the core legal body of the United Nations • Public transport vehicles, such as city buses, will
system in the field of international trade law. be charged lower green tax.
• It adopted the UNCITRAL Model Law on • Higher green tax (50% of road tax) will be
International Commercial Arbitration in 1985 levied on vehicles being registered in highly
and the UNCITRAL Conciliation Rules in 1980. polluted cities.
• The UNGA has recommended the use of the said • Differential tax will also be charged depending on
Model Law and Rules in cases where a dispute fuel (petrol/ diesel) and the type of vehicle.
arises in the context of international commercial
relations and the parties seek an amicable How will the Green Tax be used?
settlement of that dispute by recourse to • Revenue collected from the green tax will be kept
conciliation. in a separate account. The amount will be used
• India has also incorporated these uniform for tackling the problem of pollution.
principles of Arbitration and Dispute • The tax will also be used by states to set up state-
Resolution (ADR) in the Arbitration and of-art facilities to monitor the emission.
Conciliation Act, 1996 which has been amended
several times. INDEPENDENT COMMISSION FOR THE REFORM
• The Arbitration Act provides for ADR OF INTERNATIONAL CORPORATE TAXATION
mechanisms like arbitration, conciliations, etc. (ICRICT)
for national and international stakeholders. • Unique body of prominent and influential thinkers
which promotes international corporate tax
TURANT CUSTOMS reform and a more inclusive discussion of
• Central Board of Indirect Taxes and Customs corporate tax rules.
launches its flagship programme 'Turant Customs'
at Bengaluru & Chennai. STUDENT NOTES:
• Importers will now get their goods cleared from
Customs after a faceless assessment is done
remotely by the Customs officers located outside
the port of import.

GREEN TAX

• The Ministry of Road Transport and Highways
will levy a green tax on transport vehicles older
than eight years at the time of renewal of fitness
certificate at the rate of 10% to 25% of road tax.


77

8. PUBLIC FINANCE About FSDC:
• It is a non-statutory apex level body setup in
GROSS BUDGETARY SUPPORT 2010 on the recommendations of Raghuram
Rajan committee (2008).
During the Parliamentary Consultative Committee • Objectives: To strengthen and institutionalize
meeting of the North Eastern Region, the issue of
the mechanism for maintaining financial
utilisation of 10% GBS in NER by Non-exempt Central
stability, enhancing inter-regulatory coordination
Ministries/Departments was discussed in detail. and promoting financial sector development.

• Functions: It is charged with financial literacy,
About:
financial inclusion and macro prudential
• The Government's support to the Central plan supervision of the economy, including the
is called the Gross Budgetary Support. functioning of large financial conglomerates.
• It includes sources of revenue raised by the • Chairman: Union Finance minister.
Government and tax collection.
• Members:
• The amount to be allocated to GBS is fixed by Ø Heads of Financial Sector Regulators (RBI,
the Finance Commission. SEBI, PFRDA & IRDA)
• It collects the requirement of all the ministries and Ø Secretaries of various Departments
fixes the amount based on priority. Ø Chief Economic Adviser
• Like other budget, GBS is also split into revenue Ø Minister of state responsible for the
and capital components. Department of Economic Affairs (DEA)
Ø Chairperson of the Insolvency and Bankruptcy
FISCAL RESPONSIBILITY AND BUDGET
Board of India (IBBI) among others.
MANAGEMENT ACT (FRBM), 2003
• The Act’s long-term objective is for India to TASK FORCE ON SUSTAINABLE PUBLIC
achieve fiscal stability and to give the Reserve PROCUREMENT (SPP)
Bank of India (RBI) flexibility to deal with inflation • Constituted by Department of Expenditure. It
in India. will Review international best practices in the area
• It limited the fiscal deficit to 3% of the GDP. of SPP, will list the current status of SPP in India
• Under Section 4(2) of the Act, the Centre can across Government organizations, prepare a draft
exceed the annual fiscal deficit target citing Sustainable Procurement Action Plan and
grounds that include national security, war, Recommend an initial set of product/service
national calamity, collapse of agriculture etc. categories (along with their specifications) where
SPP can be implemented.
FRBM AMENDMENTS THAT WERE PART OF THE
• Currently, in India, there is no public
FINANCE BILL 2018
procurement law at the national level.
• The original FRBM Act 2003 had said that you
have to bring down the fiscal deficit to 3% and the NATIONAL INSTITUTE OF PUBLIC FINANCE AND
revenue deficit to 0%. POLICY
• The 2018 Finance Bill actually did away with the Urjit Patel has been appointed chairman of the
revenue deficit target. So, there is no revenue National Institute of Public Finance and Policy
deficit target any more. (NIPFP). He will succeed Vijay Laxman Kelkar.
• In the last two years, the fiscal deficit has been
brought down to 3.3% and the revenue deficit is About:
actually increasing. • NIPFP is an autonomous body set up jointly by
the Ministry of Finance, the erstwhile Planning
FINANCIAL STABILITY AND DEVELOPMENT Commission, and several state governments.
COUNCIL (FSDC) • It is registered under the Societies Registration
Union Minister for Finance has chaired the 22nd Act, 1860.
Meeting of the Financial Stability and Development • Formation: It was founded in 1976.
Council (FSDC). • Functions:


78

Ø It undertakes research, policy advocacy and DEBT TO GDP RATIO
capacity building in areas related to public
• Ratio of a country's public debt to its gross
economics.
domestic product (GDP).
Ø One of the major mandates of the institute is to
• It indicates a particular country’s ability to pay
assist the Central, State and Local
back its debts.
governments in formulating and reforming
public policies by providing an analytical base. 9TH EDITION OF THE STATUS PAPER ON THE
• Funding: It receives an annual grant from the GOVERNMENT DEBT
Ministry of Finance and various State
governments. However, it maintains an • Debt to GDP ratio for the Central Government
independent non-government character. declined from 47.5 per cent in 2011- 12 to 45.7 per
• Location: New Delhi. cent in 2018-19.
• Gross Fiscal Deficit (GFD) as a percentage of GDP
Governing Body: has been on a declining trend since 2012-13.
• It includes the Revenue Secretary, Economic • The share of short-term debt is within safe limits
Affairs Secretary and the Chief Economic Advisor and has stabilised after some rise during 2005 to
from the Union Finance Ministry and 2012.
representatives from NITI Aayog, RBI and three • Most of the government debt is at fixed interest
state governments. rates.
• It also includes three distinguished economists, • The ratio of interest payments to revenue receipts
members of sponsoring agencies and other (IP-RR) of the Central Government was 37.5 per
invitees. cent in 2018-19 as compared to 35.6 per cent in
• It is involved in appointing the Chairman and the 2012-13.
Director.
CONTINGENCY FUND (CF) OF THE CENTRAL
• The usual tenure of a chairman is four years, which
can be extended. BANK
The Reserve Bank of India (RBI) has retained a
OPEN BUDGET INITIATIVE AND OPEN BUDGET whopping amount of Rs 73,615 crore within the RBI
SURVEY by transferring it to the Contingency Fund (CF) of the
• Conducted by the International Budget central bank.
Partnership (IBP).
• It is a global research and advocacy program to About:
promote public access to budget information and This is a specific provision meant for meeting
the adoption of accountable budget systems. unexpected and unforeseen contingencies
• The open budget survey has been covering 117 including:
countries. It rates the level of transparency in • Depreciation in the value of securities,
budget across nations on a scale of 0-100. • Risks arising out of monetary/exchange rate
• India is placed at 53rd position among 117 nations policy operations,
in terms of budget accountability and • Systemic risks and any risk arising on account of
transparency. the special responsibilities enjoined upon the
Reserve Bank.
PUBLIC DEBT MANAGEMENT AGENCY (PDMA)
Under what provisions does the central
• Government has decided to setup a statutory government receive money from the RBI?
Public Debt Management Agency (PDMA) to
• As per Section 47 of the RBI Act, profits or
bring both, India's external (managed by
surplus of the RBI are to be transferred to the
Ministry of Finance) and domestic debt
government, after making various contingency
(managed by RBI) under one roof.
provisions, public policy mandate of the RBI,
• The first step towards this direction was the including financial stability considerations.
establishment of a Public Debt Management Cell
• The RBI’s transfer this year is as per the Economic
(PDMC) within Budget Division, Ministry of
Capital Framework (ECF) adopted by the RBI
Finance in 2016.
board last year.
79

Also Remember: foreign company or a foreign company in which
• Currency and Gold Revaluation Account an Indian holds 50% or more shares.
(CGRA): It is maintained by the Reserve Bank to • Registration: It is mandatory for all such NGOs
take care of currency risk, interest rate risk and to register themselves under the FCRA. The
movement in gold prices. registration is initially valid for five years and it
• CGRA provides a buffer against exchange rate/ can be renewed subsequently if they comply
gold price fluctuations. It can come under with all norms.
pressure if there is an appreciation of the rupee • Purpose of Foreign contribution: Registered
vis-à-vis major currencies or a fall in the price of associations can receive foreign contributions for
gold. social, educational, religious, economic and
• Investment Revaluation Account Foreign cultural purposes. Filing of annual returns on
Securities (IRA-FS): The unrealized gains or the lines of Income Tax is compulsory.
losses on revaluation in foreign dated securities • Ministry of Home Affairs (MHA) New Rules: In
are recorded in the IRA-FS account. 2015, the MHA notified new rules which required
• Investment Revaluation Account-Rupee NGOs to give an undertaking that the acceptance
Securities (IRA-RS): The unrealized gains or of foreign funds is not likely to prejudicially
losses on revaluation is accounted for in affect the sovereignty and integrity of India or
Investment Revaluation Account-Rupee Securities impact friendly relations with any foreign state
(IRA-RS). and does not disrupt communal harmony.
• It also said all such NGOs would have to operate
CONTINGENCY FUND (CF) OF THE CENTRAL accounts in either nationalised or private banks
BANK which have core banking facilities to allow
• The Reserve Bank of India (RBI) has retained a security agencies access on a real time basis.
whopping amount of Rs 73,615 crore within the
MONETIZATION OF DEFICIT
RBI by transferring it to the Contingency Fund
(CF) of the central bank. • If the expenditure of the government exceeds its
• Contingency Fund is a specific provision meant for income, the government is said to have incurred a
meeting unexpected and unforeseen fiscal deficit. This deficit financing has to be done
contingencies. either by borrowing from the market or
• This includes depreciation in the value of monetisation of deficit through RBI.
securities, risks arising out of monetary/exchange • In simple words, monetization of fiscal deficits
rate policy operations, systemic risks and any risk involves the financing of such extra expenses with
arising on account of the special responsibilities money, instead of debt.
enjoined upon the Reserve Bank. • It is a form of "non-debt financing”. Under Direct
Monetization, RBI prints new currency and
FOREIGN CONTRIBUTION (REGULATION) ACT purchases government bonds.
2010 • Under Indirect monetization, deficits are
• Objective: It is an act of Parliament enacted in monetized as the government issues bonds in the
1976 and amended in 2010 to regulate foreign primary market and the RBI purchase an
donations and to ensure that such contributions equivalent amount of government bonds from the
do not adversely affect internal security. secondary market.
• Coverage: It is applicable to all associations, • Monetisation of deficit was in practice in India till
groups and NGOs which intend to receive foreign 1997, whereby the central bank automatically
donations. monetised government deficit through the
• Members of the legislature and political issuance of ad-hoc treasury bills.
parties, government officials, judges and • Treasury bills are money market instruments, are
media persons are prohibited from receiving any short term debt instruments issued by the
foreign contribution. Government of India and are presently issued in
• However, in 2017 the FCRA was amended three tenors (91, 182 and 364 days).
through the Finance Bill to allow political parties
to receive funds from the Indian subsidiary of a
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• In 1994 and 1997, two agreements were signed located/performed in the International Financial
between the government and RBI to completely Services Centres in India.
phase out funding through ad-hoc treasury bills. • Composition:
• Later on, with the enactment of Fiscal Ø The IFSCA will consist of nine members,
Responsibility and Budget Management appointed by the central government.
(FRBM) Act, 2003, RBI was completely barred Ø This Include Chairperson, a member each
from subscribing to the primary issuances of the from the RBI, SEBI, the Insurance Regulatory
government. and Development Authority of India (IRDAI),
• The FRBM Act as amended in 2017 contained an and the Pension Fund Regulatory and
escape clause which permits monetisation of the Development Authority (PFRDA)
deficit under special circumstances. Ø Two members from the Ministry of Finance.
Ø Two other members will be appointed on the
REGULATORY SANDBOX recommendation of a Selection Committee.
The International Financial Services Centres • All members of the IFSC Authority will have a
Authority (IFSCA) has introduced a framework for term of three years, subject to reappointment.
“Regulatory Sandbox”.
COMPOUND INTEREST WAIVER SCHEME

About: Government of India has announced a scheme called,
• It is a safe harbour, where businesses can test ‘Scheme for grant of ex-gratia payment of difference
innovative products under relaxed regulatory between compound interest and simple interest for
conditions. six months to borrowers in specified loan accounts’.
• Typically, participating companies release new
products in a controlled environment to a About:
limited number of customers for a limited period • Aim: To provide major relief for individuals and
of time. MSME borrowers by waiver of the compound
interest on specified loans for six months period.
IFSCA Regulatory Sandbox: • In simple words, the borrowers need to pay
• The Regulatory Sandbox shall operate within the simple interest on their loan amount for the six
IFSC located at GIFT City. month period between March and August as
• Entities operating in the capital market, banking, against the compound interest.
insurance and financial services space shall be • Categories: The loans eligible under the scheme
granted certain facilities and flexibilities to include MSME loans, education loans, housing
experiment with innovative FinTech solutions in a loans, consumer durable loans, credit card
live environment with a limited set of real dues, automobile loans, personal loans to
customers for a limited time frame. professionals and consumption loans.
• These features shall be fortified with necessary • Eligibility: Any borrower whose aggregate of all
safeguards for investor protection and risk facilities with lending institutions is more than ₹2
mitigation. crore (sanctioned limits or outstanding amount)
will not be eligible for ex-gratia payment under
International Financial Services Centers this scheme. Also, the loan accounts should not be
Authority: non-performing assets (NPA) as on the date
• It is a statutory body established in 2020. mentioned above.
• It works under the Department of Economic • Lending Institutions: The lending institution has
Affairs, Ministry of Finance. to be either a banking company, or a public
• Headquartered in Gandhinagar, Gujarat. sector bank, co-operative bank or a regional
• Objectives: IFSCA has an objective to develop a rural bank, or All India Financial Institution, a
world class FinTech hub at the IFSC located at non-banking financial institution, housing finance
GIFT City in Gandhinagar (Gujarat, India). company or a micro finance institution.
• Roles and functions: Its main function is to
AMENDMENTS TO PUBLIC PROCUREMENT
develop and regulate the financial products,
ORDER, 2017
financial services and financial institutions

81

Recently, Public Procurement (Preference to Make in Departments, PSUs, autonomous institutions and
India) Order, 2017 was amended to give more local bodies.
preference to local suppliers. • It aims to bring in transparency, promote ease of
doing business, simplify the process of
About Public Procurement (Preference to Make in procurement.
India), Order 2017: • The purchases through GeM by Government users
• It was issued under General Financial Rules 2017 have been made mandatory by Ministry of
to promote domestic value addition in public Finance.
procurement.
• Under this, as revised in June 2020, only Class-I 3. Defence Acquisition Procedure (DPP) 2020:
and Class-II local suppliers are eligible to bid in • It proposes increasing the Indigenous Content
procurement of all goods, services or works, and (IC) stipulated in various categories of
with estimated value of purchases less than Rs. procurement by about 10% to support the ‘Make
200 crores. in India’ initiative.
• Global tender enquiry can be issued with the • It also proposes, New Category Buy (Global –
approval of the competent authority for purchases Manufacture in India) with minimum 50% IC on
less than Rs. 200 crores. cost basis of total contract value.
• It is applicable on procurement of goods, services
and works (including turnkey works) by a Central SCHEME FOR FINANCIAL SUPPORT TO PPP IN
Ministry, Department, attached, subordinate INFRASTRUCTURE VGF
offices, autonomous bodies controlled by the Cabinet Committee on Economic Affairs has approved
Government of India, Government companies, the continuation and revamping of Scheme for
their Joint Ventures and Special Purpose Vehicles. Financial Support to Public Private Partnerships
• For the verification of the local content, self- (PPPs) in Infrastructure Viability Gap Funding (VGF)
certification would be necessary. Nodal Scheme till 2024-25.
Ministries may also constitute committees with
internal and external members for independent About:
verifications of the self-declarations. • Aim: To promote PPPs in social and Economic
• A committee in Department for Promotion of Infrastructure leading to efficient creation of
Industry and Internal Trade will oversee the assets and ensuring their proper Operation and
implementation of this order. Maintenance and make the economically/ socially
essential projects commercially viable.
Other measures for promotion of local supplies in
public procurement: Sub Scheme -1:
• Objective: To cater Social Sectors such as Waste
1. Public Procurement Policy for Micro and Small Water Treatment, Water Supply, Solid Waste
Enterprises (MSEs) Order, 2018: Management, Health and Education sectors etc.
• It was notified under Micro, Small and Medium • These projects face bankability issues and poor
Enterprises (MSME) Development Act, 2006. revenue streams to cater fully to capital costs.
Under this, every Central Ministry /Department / • Eligibility: The projects eligible under this
PSUs shall set an annual target for 25% category should have at least 100% Operational
procurement from MSE Sector. Cost recovery.
• A sub-target of 4% and 3% out of 25% is • Contribution: The Central Government will
earmarked MSEs owned by SC/ST and Women provide a maximum of 30% of Total Project Cost
entrepreneurs respectively. (TPC) as VGF and State Government/Sponsoring
• 358 items are also reserved for exclusive Central Ministry/Statutory Entity may provide
purchase from MSE sector. additional support up to 30% of TPC and the
remaining project cost will come through private
2. Government eMarket place (GeM). participation.
• GeM was launched in 2016 as an end-to-end e-
portal for procuring common-use goods and Sub Scheme -2:
services by Central and State Government
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• Objective: To support pilot social sectors projects. OFF BUDGET BORROWINGS
• The projects may be from Health and Education One of the most sought-after details in any Union
sectors where there is at least 50% Operational Budget is the level of fiscal deficit. As such, it is keenly
Cost recovery. watched by rating agencies — both inside and outside
• Contribution: In such projects, the Central the country. One of the ways to do this is by resorting
Government and the State Governments together to “off-budget borrowings”.
will provide up to 80% of capital expenditure and
upto 50% of Operation & Maintenance (O&M) About
costs for the first five years. • These are loans that are taken not by the Centre
• The Central Government will provide a maximum directly and are not calculated under the
of 40% of the TPC. In addition, it may provide a budget.
maximum of 25% of Operational Costs of the • These loans are taken by PSUs or other public
project in the first five years of commercial institutions on the directions of the central
operations. government. Such borrowings are used to fulfill
the expenditure needs of these institutions.
CURRENT ACCOUNT

The current account surplus moderated to $15.5 Are these borrowings included in the fiscal deficit?
billion (2.4% of GDP) in the quarter ended September • The liability to repay these loans is not formally
of 2020-21 from $19.2 billion (3.8% of GDP) in the on the Centre. Thus, they are not included in the
first quarter this fiscal. The current account saw a national fiscal deficit.
deficit of $7.6 billion (1.1%) in the year-ago quarter. • This helps keep the country’s fiscal deficit within
acceptable limits.
About:
• Current account maintains a record of the How are off-budget borrowings raised?
country’s transactions with other nations, in • The government can ask a PSU to raise the
terms of trade of goods and services, net required funds from the market through loans
earnings on overseas investments and net or by issuing bonds.
transfer of payments over a period of time, such as • Example: In the Budget 2020-21, the government
remittances. paid only half the amount budgeted for the food
• This account goes into a deficit when money sent subsidy bill to the Food Corporation of India. The
outward exceeds that coming inward. shortfall was met through a loan from the
• The current account constitutes net income, National Small Savings Fund. This allowed the
interest and dividends and transfers such as Centre to halve its food subsidy bill.
foreign aid, remittances, donations among others.
• It is measured as a percentage of GDP. CAG Report: In 2019, Comptroller and Auditor
General report has pointed out that this route of
The formulae for calculating CAD is: financing puts major sources of funds outside the
• Current Account = Trade gap + Net current control of Parliament.
transfers + Net income abroad
• Trade gap = Exports – Imports. What will be the fiscal deficit if we include off-
budget borrowings?
Why does Current account matter? • Due to various sources of off-budget borrowing,
• Current account balance measures the external the true fiscal deficit is difficult to calculate.
strength or weakness of an economy. • However, in July 2019, the CAG had pegged the
• A current account surplus implies the country is a actual fiscal deficit for 2017-18 at 5.85% of GDP
net lender to the rest of the world, while a instead of the government version of 3.46%.
deficit indicates it is a net borrower.
• A country with rising Current Account Deficit Fiscal Deficit
(CAD) shows that it has become uncompetitive, • It is essentially the gap between what the central
and investors are not willing to invest there. government spends and what it earns.
They may withdraw their investments.
83

• In other words, it is the level of borrowings by the 9. EXTERNAL SECTOR OF INDIA
Union government.
• This fiscal deficit is the most important metric to UN COMMISSION ON INTERNATIONAL TRADE
understand the financial health of any LAW (UNCITRAL)
government’s finances.
Recently, the Government of India has announced that

the International Arbitration Tribunal has dismissed
STUDENT NOTES:
all claims against India in entirety in relation to
cancellation of Letters of Intent for providing 2G
services.

About UNCITRAL:

• The UN Commission on International Trade Law

(UNCITRAL) is a subsidiary body of the U.N.

General Assembly.

• It is responsible for helping to facilitate

international trade and investment.

• Established by the UNGA in 1966.

• Mandate is “to promote the progressive
harmonization and unification of international
trade law” through conventions, model laws, and
other instruments that address key areas of
commerce, from dispute resolution to the
procurement and sale of goods.
• Annual sessions held alternately in New York City
and Vienna, where it is headquartered.
• The Tribunal constituted in accordance with the
UNCITRAL Arbitration Rules 1976 is seated at the
Hague, Netherlands, and proceedings are
administered by the Permanent Court of
Arbitration.
• UNCITRAL's original membership comprised 29
states and was expanded to 60 in 2004. The
membership is representative of the various
geographic regions and the principal economic
and legal systems of the world.

Permanent Court of Arbitration (PCA):
• PCA is a permanent intergovernmental
organization established by treaty at the First
Hague Peace Conference, Netherland in 1899.
• It is dedicated to serve the international
community in the field of dispute resolution and
to facilitate arbitration and other forms of
dispute resolution between States.
• The PCA has a Financial Assistance Fund which
aims at helping developing countries meet part
of the costs involved in international arbitration
or other means of dispute settlement.
• It has a three-part organizational structure
consisting of (a) Administrative Council that
oversees its policies and budgets (b) panel of
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independent potential arbitrators known as the INTERNATIONAL FINANCIAL SERVICES CENTRES
Members of the Court and its (c) Secretariat (IFSC)
known as the International Bureau headed by the
The Bill to set up a unified Authority to regulate
Secretary-General.
financial products.

HARMONIZED SYSTEM OF NOMENCLATURE
About
(HSN) CODE
• An IFSC caters to customers outside the
No imports will be allowed without HSN code into jurisdiction of the domestic economy.
the country said the Union Minister of Commerce & • Such centres deal with flows of finance, financial
Industry and Railways, Piyush Goyal in New Delhi. products and services across borders.
• London, New York and Singapore can be counted
About as global financial centres.
• HS code are used by Customs authorities, • It would provide corporates easier access to global
statistical agencies, and other government financial markets.
regulatory bodies, to monitor and control the • The first IFSC in India has been set up at the
import and export of commodities. Gujarat International Finance Tec-City (GIFT
• The Harmonised System is a six-digit City) in Gandhinagar.
identification code. • In India the SEZ Act 2005 allows setting up an
• It is Developed by the World Customs IFSC in an SEZ or as an SEZ after approval from the
Organization (WCO). central government.
• It is known as “universal economic language” for
goods. LIBERALISED REMITTANCE SCHEME (LRS)
• It is a multipurpose international product
• To remit money across the border, without
nomenclature.
seeking specific approvals.
NEST: TO INCREASE INVESTMENT • Under the Reserve Bank of India’s (RBI) LRS, all
COORDINATION resident individuals, including minors are allowed
to remit up to $250,000 in a financial year under
The Ministry of External Affairs has decided to set up various heads.
a new division called NEST-New and Emerging • The residents can also transfer money for capital
Strategic Technologies. account transactions under LRS.
• It was first introduced in 2004 and there are no
About restrictions on the frequency of remittances
• The NEST will act as a nodal point to exchange (available in any freely convertible foreign
views with foreign governments on new and currency) under LRS.
emerging strategic technologies. • It is not available to corporates, partnership firms,
• The division will help in collaboration with foreign HUF, Trusts, etc.
partners in the field of 5G and artificial • Under this, people cannot send money to
intelligence. countries identified as ‘non-cooperative’ by
• It will also help assess foreign policy and the Financial Action Task Force and to entities
international legal implications of new and identified as posing terrorist risks.
emerging technologies and technology-based • LRS restricts buying and selling of foreign
resources, and recommend appropriate foreign exchange abroad, or purchase of lottery tickets or
policy choice. sweep stakes, proscribed magazines and so on.
• The division will also be holding responsibility for
matters that involves negotiations with NON-TARIFF MEASURES (NTMs)
multilateral fora like the United Nations, G20.
According to recently published “The Asia-Pacific
• This will help to safeguard India’s interests as
Trade and Investment Report 2019”, non-tariff
such forums govern the rules of access to such
measures (NTMs) have increased in the past two
technologies.
decades.

About
85

• The report has been published by United SEZs in India have achieved 100-billion-dollar
Nations Economic & Social Commission for worth of exports in FY 2019-20.
Asia and the Pacific (ESCAP) and the United
Nations Conference on Trade and About SEZ:
Development (UNCTAD). • Special Economic Zone (SEZ) is a specifically
delineated duty-free enclave and deemed to be
What are non-tariff measures? foreign territory for the purposes of trade
• Non-tariff measures (NTMs) are policy measures operations, duties and tariffs.
other than ordinary customs tariffs that can • India’s SEZ Policy was implemented from 1 April,
potentially have an economic effect on 2000. Subsequently SEZ Act, 2005 was
international trade in goods, changing quantities introduced
traded, or prices or both. • Objectives of SEZs: generation of economic
• NTMs are broadly distinguished into technical activity, promotion of exports and investment,
measures (SPS measures, TBTs etc.) and non- employment generation, infrastructure
technical measures. These are further development.
distinguished in hard measures (e.g. price & • SEZ Rules provide for simplified procedures for
quantity control measures), threat measures (e.g. conducting business, single window clearances,
anti-dumping duties) and other measures such as simplified compliance procedures and emphasis
trade-related finance and investment measures. on self-certification.
• Recommendations of the Baba Kalyani
Types of NTMs: Committee: Reincarnation of SEZs as
• Sanitary and Phytosanitary Measures: employment and Economic Enclaves (3Es) and
Measures that are applied to protect human or shift focus from export to economic and
animal life from risks arising from contaminants employment growth.
or disease-causing organisms in food.
• Technical Barriers to Trade: Measures referring Net Foreign Exchange criteria is determined by
to technical regulations and procedures, related to subtracting the value of imported inputs, input
environmental and sustainable standards E.g. services and capital goods along with the value of all
Labelling requirements as in case of refrigerators payments made in foreign exchange from the value of
need to carry a label indicating their size, weight & exports.
electricity consumption level
• Licensing, quotas, prohibitions & quantity- WTO PEACE CLAUSE
control: Measures to restrain the quantity of
India has invoked the peace clause of WTO for
goods that can be imported exceeding the ceiling on support it can offer farmers
• Price Control Measures: Measures intending to for rice, marking the first time any country that has
control or affect the prices of imported goods. E.g. used this clause.
Minimum import prices imposed on precious
metals like gold to cut down non-essential
imports.
• Export Related Measures: Measures applied by
the government of the exporting country on
exported goods E.g. Exports of cultural heritage
objects are prohibited.
• Geographical restrictions on eligibility:
Restrictions on imports of dairy products from
countries
• Contingent Trade Protective Measures: About:
Measures implemented to counteract particular • To India informed WTO that the value of its rice
adverse effects of imports in the market. E.g. Anti- production was $43.67 billion in 2018-19 and it
Dumping Duty, Countervailing Duty etc. gave subsidies worth $5 billion which is 11.46%
of the value of production.
REVITALIZING SEZs
86

• However, the Agreement on Agriculture (AoA) Recently India resumed its palm oil import from
under WTO has a limit pegged at 10% for Malaysia after a ban of the nearly four-month period
developing countries, which is a de-minimis level. with an order worth 200,000 tonnes crude palm oil.
“De minimis level” is minimal amount of
domestic support that is allowed even though they Background:
distort trade. • India restricted and put a ban on the import of
palm oil early this year, following the adverse
Peace Clause: remarks of the then Prime Minister of Malaysia
• The peace clause protects a developing Mahathir Mohamad on the new citizenship law
country’s food procurement programmes against and the Kashmir issue.
action from WTO members in case subsidy
ceilings are breached.
• It also provides that Green Box domestic
support measures cannot be the subject of
countervailing duty action or other subsidy
action under the WTO Agreement on Subsidies
and Countervailing Measures. However, other
domestic support measures which are in
conformity with the provisions of the Agreement
on Agriculture may be the subject of
countervailing duty actions.
• Hence, under the present ‘Peace Clause’,
developing countries can provide WTO-
prohibited subsidies to farmers without
inviting any dispute under the Agreement on About Palm Oil:
Agriculture. • It’s an edible vegetable oil that comes from the
fruit of oil palm trees, having the scientific name
WTO APPELLATE BODY “Elaeis guineensis”.
• For proper enforcement of trade rules, a binding, • Palm oil is an incredibly efficient crop,
two-stage dispute settlement system was producing more oil per land area than any other
established at the World Trade Organization in the equivalent vegetable oil crop fulfilling 35% of the
1990s. world’s vegetable oil demand on just 10% of
• The Appellate Body is the scaffolding of the the land.
dispute settlement system, with seven standing • Two types of oil can be produced, crude palm oil
members. comes and palm kernel oil, of which crude has
• In the first stage for adjudicating trade disputes, a more demand.
panel would decide cases brought before it by the • Palm oil is an extremely versatile oil that has
members. Rulings issued by the panels can be many different properties and is present in nearly
appealed at the Appellate Body. 50 per cent packaged.
• As part of the second-stage of adjudication, the • Currently, Indonesia and Malaysia make up over
Appellate Body can uphold, modify or reverse the 85% of global supply but there are 42 other
legal findings and conclusions of a panel. countries that also produce palm oil.
• Therefore, the Appellate Body’s decisions are final
and adopted within 30 days by the dispute About Palm Oil Trade
settlement body. • India is the world’s largest edible oil importer.
• Sanctions can be imposed on a member in case of • India has a demand of more than 9 million tonnes
its failure to comply with the Appellate Body’s of palm oil a year, which is nearly two-thirds of
rulings. total import of edible oil.
• Out of total palm oil imports, a record 4.4 million
PALM OIL IMPORT FROM MALAYSIA tonnes palm oil was imported from Malaysia in

87

2019 making it second to Indonesia in terms of • Agreement is in line with the main conventions
trade volume. of the WIPO, the Paris Convention for the
Protection of Industrial Property (Paris
TRIPS FLEXIBILITIES Convention) and the Berne Convention for the
India has asked the G20 members to work on an Protection of Literary and Artistic Works.
agreement that would enable countries to use the • The areas of intellectual property that it covers
flexibilities under TRIPs. are:
Ø Copyright and related rights,
About: Ø Trademarks,
• TRIPS flexibilities are ‘policy spaces’ for Ø Geographical indications,
countries to mitigate the impact of patents (i.e., Ø Industrial designs,
the excessively high price of patented medicines Ø New varieties of plants;
due to lack of competition). Ø Layout-designs of integrated circuit,
• TRIPs agreement and subsequent Doha Ø Trade secrets and test data.
Declaration on TRIPS and Public Health of 2001
provide some flexibilities in this regard. Membership in the WTO includes an obligation to
• Flexibilities aim to permit developing and least- comply with the TRIPS Agreement.
developed countries to use TRIPS-compatible PARIS CONVENTION FOR THE PROTECTION OF
norms in a manner that enables them to pursue o
INDUSTRIAL PROPERTY, 1883
their own public policies, either in specific fields
like access to pharmaceutical products or • It was one of the first intellectual property
protection of their biodiversity, in establishing treaties.
macroeconomic, institutional conditions that • It established a Union for the protection of
support economic development. industrial property.
• The Convention is currently still in force.
Some major flexibilities under TRIPs are: • Administered by the World Intellectual Property
• Compulsory Licensing: Compulsory licensing Organization (WIPO).
enables a competent government authority to • Khadi Village Industries Corporation (KVIC) is
license the use of a patented invention to a third eyeing international trademark for ‘khadi’ under
party or government agency without the consent the Paris Convention for protection of industrial
of the patent-holder. property.
• Parallel importation: It is importation without
the consent of the patent-holder of a patented FOREX RESERVES
product marketed in another country either by the According to the Reserve Bank of India (RBI) data, the
patent holder or with the patent-holder’s consent. country’s foreign exchange (forex) reserves touched a
• It enables access to affordable medicines lifetime high of USD 580.3 billion (as of march 2021).
because there are substantial price differences India has the 4th largest foreign exchange reserves
between the same pharmaceutical product sold in in the world, after China, Japan and Switzerland.
different markets.
About Forex Reserves:
About TRIPS Agreement: • Foreign-exchange reserves (also called forex
• The TRIPS Agreement, which came into effect in reserves or FX reserves) are reserve assets held
1995, is the most comprehensive multilateral by a central bank in foreign currencies, used to
agreement on intellectual property. back liabilities on their own issued currency as
• It was negotiated between 1986 and 1994 during well as to influence monetary policy.
the Uruguay Round of the General Agreement on • Reserves are denominated and expressed in the
Tariffs and Trade (GATT), which led to the US dollar, which is the international numeraire
establishment of the World Trade Organization for the purpose.
(WTO).
• It sets out the minimum standards of protection India’s foreign exchange reserves comprise:
to be provided by each Member.

88

• Foreign currency assets (FCAs): These are India and BITs:
maintained in currencies like US dollar, euro, • India started signing BITs in early 1990s and
pound sterling, Australian dollar and Japanese signed the first BIT with the United Kingdom (UK)
yen. in 1994, since then India has signed BITs with 84
• Gold countries.
• SDR (special drawing rights) in IMF: This is the • BITs have been one the major drivers of FDI
reserve currency with IMF. inflows into India. Total FDI to India has
• RTP (reserve tranche position) in IMF: This is increased from $4,029 million in 2000-2001 to
the reserve Capital with IMF. $43,478 in 2016-17.
• However, a penalty awarded by an Investor-State
Governance: Dispute Settlement (ISDS) tribunal in the White
• India’s FOREX is governed by RBI under RBI act, Industries case in 2011, and subsequent ISDS
1934. notices served against India in a wide variety of
• The level of foreign exchange reserves is largely cases involving regulatory measures led to a
the outcome of the RBI’s intervention in the review of the BITs.
foreign exchange market. • Since its adoption, India has unilaterally
terminated 66-odd BITs between 2016 and
Importance of Forex: 2019. Since then, India has signed just three
• Reserves are held for maintaining liquidity and treaties, none of which is in force yet.
allowing time to absorb shocks in situations
where access to borrowing is curtailed or are very MODEL BIT (Adopted by India in 2016)
costly. • Definition of Investment: Model BIT has adopted
• It provides confidence that the authorities are Enterprise based definition and has moved away
committed to the timely discharge of external from assets-based definition
obligations and to supporting the value of the • Most Favoured Nation (MFN): not part of Model
local currency. BIT. This clause prohibits the host state from
• It is an important component of the Balance of discriminating the investors from different
Payment and an essential element in the analysis countries
of an economy’s external position. • Fair and Equitable Investment (FET): not part
of Model BIT + foreign investor is protected
BILATERAL INVESTMENT TREATY (BIT) against unacceptable measures of the host state by
As India attempts to attract investments, there have rules of international law
been calls to review India’s model Bilateral • Investor-state dispute settlement (ISDS)
Investment Treaty (BIT) 2016. mechanism: part of model BIT and allows
companies to seek international arbitration only
About: when all domestic options exhausts.
• Bilateral investment treaties (BITs) are treaties
between two countries aimed at protecting International Centre for Settlement of Disputes
investments made by investors of both (ICSID)
countries. • ICSID is the world’s leading institution devoted to
• These treaties impose conditions on the international investment dispute settlement.
regulatory behaviour of the host state and ICSID was established in 1966 by the Convention
limit interference with the rights of the foreign on the Settlement of Investment Disputes for legal
investor. dispute resolution and conciliation between
• Imposing obligations on host states to accord Fair international investors.
and Equitable Treatment (FET) to foreign • ICSID convention is ratified by 155 countries.
investment. India is not a party to the ICSID convention.
• There is International Centre for Settlement of
Disputes (ICSID) under investor-state dispute TARIFF RATE QUOTA SCHEME
settlement (ISDS) mechanism for dispute Centre has notified norms for import of 5 lakh tonnes
redressal between international investors. of maize under Tariff Rate Quota Scheme during the

89

current financial year at a concessional customs duty political behaviour and disruption to the supply
of 15 per cent. chain.

About: AGRIOTA
• Under the scheme, the government allows import E-market platform launched to bridge gap between
of four products such as maize (corn), milk and Indian farmers and UAE food industry.
cream in powder, granules, crude sunflower
seed or safflower oil and fractions thereof; and About AGRIOTA:
refined rape, colza or mustard oil and fractions • It is an E-market agricultural commodity
thereof at concessional rates of customs duty. trading platform launched by the UAE
Government to bridge the gap between Indian
Tariff Rate Quota (TRQ): rural farmers and the UAE Food Industry.
• It is a mechanism that allows a set quantity of • The platform will allow farmers to connect with
specific products to be imported at a low or the UAE food industry directly bypassing
zero rate of duty. intermediaries.
• The TRQ commitment does not apply any limits on • It also optimizes the supply chain and ensures
the quantity of import of a product. traceability creating value for all stakeholders.
• Instead, it applies a higher rate of duty for that
specific product once imports up to the TRQ Global Food Security Index:
commitment have been reached. • It measures food security across most of the
• TRQ is a two-tiered tariff instrument. countries of the world.
• Imports entering within the quota portion of a • It was first published in 2012 and is managed
TRQ are subject to a lower tariff rate called the and updated annually by The Economist’s
tariff quota rate. intelligence unit.
• The later imports (above the quota) face a much • In 2019, Singapore topped the index and India
higher tariff rate, which is normally the MFN (Most was ranked 72nd out of 113 countries.
Favored Nation) tariff.
• MFN tariffs are what countries promise to impose Global Food Policy Report:
uniformly on imports from other members of the • It has been released by the International Food
WTO. Policy Research Institute (IFPRI).
• The theme of the 2019 report is “Rural
INDIA ECONOMIC STRATEGY (IES) Revitalization”. The report highlights the
• Ambitious plan to transform Australia's urgency of rural revitalization to address a
economic partnership with India out to 2035. growing crisis in rural areas.
• India was Australia's eighth-largest trading
partner and fifth-largest export market in 2018- ‘PHASE ONE’ TRADE DEAL
19, driven by coal and higher education. • Between USA and China. China has agreed to
purchase $200 billion worth of U.S. goods and
SUPPLY CHAIN RESILIENCE INITIATIVE (SCRI) services in 2020 and 2021, on top of the amounts
India, Japan and Australia have begun discussions imported in 2017.
on launching a trilateral Supply Chain Resilience
Initiative (SCRI) to reduce the dependency on China. MERCHANDISE EXPORTS FROM INDIA SCHEME
(MEIS)
About Recently a limit has been imposed on total rewards
• Objective: The objective of the initiative is to under the Merchandise Exports from India Scheme
attract FDI with a vision of creating an economic (MEIS).
powerhouse and strengthening the relationship
among partner countries. About MEIS
• Significance: The initiative is a direct response to • Objective: to enhance the export of notified
companies that are concerned about Chinese goods manufactured in a country.

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• History: The scheme has been introduced through • The convention was adopted in December, 2018
the Foreign Trade Policy (FTP) and came into and opened for signature in August, 2019.
effect on 1 April 2015. • Signatories: As of September 1, 2020, the
• Implement by Ministry of Commerce and Convention has 53 signatories, including India,
Industry. China and the United States. Ecuador is the most
• Duration: The MEIS will be applicable till the recent country to ratify the Convention.
year 2020. • Significance: The convention helps businesses
• Cost: Under this scheme, over Rs.22,000 crore seeking enforcement of a mediated settlement
per year has been allocated by the Government of agreement across borders to apply directly to the
India for exports. courts of countries that have signed and ratified
• Under MEIS, a percentage of realized FOB (Free the treaty instead of having to enforce the
on Board) value (2, 3, or 5%) of the exports are settlement agreement as a contract in accordance
payable as incentives. with each country’s domestic process.
• The rewards are paid in the form of the MEIS duty
credit scrip that can be used to pay for a CAROTAR
number of taxes/duties including: The Customs (Administration of Rules of Origin under
Ø Excise duty Trade Agreements) Rules, 2020 (CAROTAR, 2020),
Ø Customs duty will come into force from 21st September 2020.
Ø Service tax.
• Imported inputs and scrips can be transferred About:
fully offering flexibility to exporters. • They set guidelines for enforcement of the ‘rules
• The incentives that are available under MEIS are of origin’ for allowing preferential rate on imports
also available to units located in Special Economic under free trade agreements.
Zones (SEZs). • They supplement the existing operational
certification procedures prescribed under
INDIA BECOMES 5TH LARGEST ECONOMY different trade agreements (FTA/ PTA/ CECA/
• India overtakes UK, France. CEPA).
• According to a US-based think tank World • They were notified on 21st August, 2020 by the
Population Review, India’s economy is the fifth Department of Revenue. 30 day period was
largest in the world with a GDP of $2.94 trillion. given to importers and other stakeholders to
familiarize themselves with new provisions.
ZEROING METHODOLOGY
CAROTAR Rules:
• Zeroing refers to a controversial methodology
• An importer is now required to do due diligence
used by the United States for calculating
antidumping duties against foreign products. before importing the goods to ensure that they
The foreign domestic price (FDP) of the product is meet the prescribed originating criteria.
compared with its U.S. import price (USIP) • A list of minimum information which the
adjusted for transportation and handling costs importer is required to possess has also been
provided in the rules along with general guidance.
SINGAPORE CONVENTION ON MEDIATION • An importer would now have to enter certain
origin related information in the Bill of Entry,
Singapore Convention on Mediation has entered into
as available in the Certificate of Origin.
force marking a significant development in
international commercial dispute resolution.
Free Trade Agreement:

About EBP: • It is an arrangement between two or more
countries or trading blocs that primarily agree to
• Singapore Convention also known as the United
reduce or eliminate customs tariff and non-tariff
Nations Convention on International
barriers on substantial trade between them.
Settlement Agreements Resulting from
Mediation is an international agreement regarding • Coverage: It covers trade in goods (such as
the recognition of mediated settlements. agricultural or industrial products) or trade in

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services (such as banking, construction, trading • Currency appreciation
etc.). discourages a country's
• It also covers other areas such as intellectual export activity as its
property rights (IPRs), investment, government products and services
procurement and competition policy etc. become costlier to buy.
• India has inked FTAs with several countries, Currency • It is a fall in the value of a
including Japan, South Korea, Sri Lanka and Depreciation: currency in a floating
ASEAN members. exchange rate system.
• Economic fundamentals,
U.S. PRIORITY WATCH LIST FOR INTELLECTUAL political instability, or risk
PROPERTY (IP) RIGHTS aversion can cause currency
• India continues to be on the ‘Priority Watch List’ depreciation.
of the United States Trade Representative • Currency depreciation
(USTR) for lack of adequate Intellectual Property encourages a country's
(IP) rights protection and enforcement, according export activity as its
to the USTRs Annual Special 301 Report. products and services
• India was ranked among the top five source become cheaper to buy.
countries for fake goods by the Organization of
Economic Development and Cooperation (OECD) RISE IN FOREIGN DIRECT INVESTMENT (FDI)
in 2019. • According to data released by the Department for
• India had made “meaningful progress” to Promotion of Industry and Internal Trade
enhance IP protection and enforcement in some (DPIIT), total Foreign Direct Investment (FDI) in
areas in 2019 and had acceded to the World India increased in the 2019-20 financial year.
Intellectual Property Organization (WIPO) • The sectors that attracted the most foreign inflows
Internet Treaties and the Nice Agreement. during 2019-20 included services, computer
• The Nice Agreement establishes a classification of software and hardware, telecommunications,
goods and services for the purposes of registering trading and automobiles.
trademarks and service marks. • Singapore emerged as the largest equity FDI
source.
DEPRECIATION OF RUPEE
Recently, the Indian rupee depreciated below the 74 REVISED FDI POLICY
levels against the US dollar. • India has revised its FDI policy to prevent
opportunistic takeovers of firms hit by the
About: lockdown.
• Manage Floating exchange rate lies in between of • Now, an entity of a country that shares a land
the two extremes of fixed and floating exchange border with India can invest in firms here only
rate. through government route (Indirectly done for
• In a floating exchange rate system, market forces China) This applies to “beneficial owners” who is
(based on demand and supply of a currency) resident of a neighbouring country - even if the
determine the value of a currency. investing company is not located there.
• Investors from countries not covered by the new
Currency • It is an increase in the value policy only have to inform the RBI after a
Appreciation: of one currency in relation transaction rather than asking for prior
to another currency. permission from the relevant government
• Currencies appreciate department.
against each other for a
variety of reasons, including FDI in Automatic vs. Government Route
government policy, interest • Under the government route, foreign investor has
rates, trade balances and to take prior approval of respective
business cycles. ministry/department.

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• Through automatic route, the investor just has to • Reviews are conducted by the Trade Policy
inform the RBI after the investment is made. Review Body (TPRB) on the basis of a policy
• Also, Proposals involving FDI exceeding Rs 50 statement by the Member under review and a
billion are placed before the Cabinet Committee on report prepared by economists in the Secretariat's
Economic Affairs irrespective of sector or country. Trade Policy Review Division.
SECTORS IN WHICH FDI IS PROHIBITED ADVANCED MARKET COMMITMENTS (AMCS)

• Lottery businesses • Bond structure backed by high-income countries
• Gambling and betting would allow money to be raised in the capital
• Chit funds markets.
• Nidhi Company • An AMC is a legally- binding agreement for an
• Trading in Transferable Development Rights amount of funds to subsidize the purchase, at a
(TDRs) given price, of an as yet unavailable vaccine
• Real estate business excluding construction and against a specific disease-causing high morbidity
REITs and mortality in developing countries.
• Manufacturing of cigars, cheroots, cigarillos and CERTIFICATE OF ORIGIN (CO)
cigarettes etc.
• Sectors not open to private sector investment such • Recently, Ministry of Commerce and Industry has
as atomic energy, railway operations etc. designed an online platform for issuance of
'certificate of origin’ (CO), to facilitate shipments
TRADE POLICY REVIEW MECHANISM (TPRM) during the COVID-19 crisis.
The second and final Session of India’s seventh Trade • A CO is an important international trade
Policy Review (TPR) concluded recently at the World document that certifies that goods in a particular
Trade Organization in Geneva. export shipment are wholly obtained, produced,
About: manufactured or processed in a particular
• It is an important mechanism under the WTO’s country.
monitoring function. • They declare the ‘nationality’ and ‘content’ of
• The Trade Policy Review Mechanism (TPRM) was the product and also serve as a declaration by the
an early result of the Uruguay Round. exporter to satisfy customs or trade requirements.
• It is the main transparency instrument of the • The document is important to claim duty
WTO, affording opportunities for a process of concessions under free- trade agreements (FTAs).
collective evaluation of the trade policies and • An exporter has to submit a CO at the landing port
practices of individual members. of the importing country.
• The objectives of the TPRM, as expressed in • There are two types of COs:
Annex 3 of the Marrakesh Agreement, include 1. Non-Preferential COs which certify that the
facilitating the smooth functioning of the goods are subject to no preferential treatment.
multilateral trading system by enhancing the They are also known as “Normal COs”.
transparency of Members’ trade policies. 2. Preferential COs, which certify that goods are
• All WTO Members are subject to review under subject to reduced tariffs or exemptions when
the TPRM. they are exported to countries extending these
privileges.
Mechanism: • The Rules of Origin chapter in trade agreements
• The Annex mandates that the four Members with sets guidelines for how to issue a legitimate CO
the largest shares of world trade (currently the (Preferential COs).
European Union, the United States, Japan and SPECIAL DRAWING RIGHTS (SDR) BY IMF
China) be reviewed each three years, the next 16
be reviewed each five years, and others be • India is not supporting a general allocation of new
reviewed each seven years. Special Drawing Rights (SDR) by the
• A longer period may be fixed for least- International Monetary Fund (IMF) because it
developed country Members. feels it might not be effective in easing COVID-19-
driven financial pressures.
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• The new SDR allocation was supposed to provide 10. SECURITY MARKET IN INDIA
all 189 members with new foreign exchange
reserves with no conditions. DEBT INSTRUMENTS
• SDR is an international reserve asset, created
by the IMF in 1969 to supplement its member • RBI recently permitted banks to invest in debt
countries’ official reserves. instruments through Mutual Funds (MFs) or
• The value of the SDR is based on a basket of five Exchange Traded Funds without allocating
additional charges.
currencies—the U.S. dollar, the euro, the
Chinese renminbi, the Japanese yen, and the • It is a documented, binding obligation that
British pound sterling. provides funds to an entity in return for a promise
from the entity to repay a lender or investor in
• The SDR is neither a currency nor a claim on the
IMF. Rather, it is a potential claim on the freely accordance with terms of a contract.
usable currencies of IMF members. • It is a tool an entity can utilize to raise capital.
• SDRs can be exchanged for these currencies. • The contracts include detailed provisions on the
deal such as collateral involved, the rate of
ATMANIRBHAR BHARAT V/S IMPORT interest, the schedule for interest payments, and
SUBSTITUTION the timeframe to maturity if applicable.
• As per RBI’s extant Basel III guidelines, if a bank
• Import substitution relied extensively on holds a debt instrument directly, it would have to
imposing high import tariffs and discouraging allocate lower capital as compared to holding the
foreign trade, while Atmanirbhar Bharat focuses same debt instrument through a mutual fund
on reforms and improving ease of doing business, (MF)/exchange traded fund (ETF).
including for foreign firms in the country.
• Import Substitution model advocated a GHOSTING
centralised, top-down model whereas
Atmanirbhar Bharat emphasizes on freeing Indian To keep ghost traders at bay, Aadhaar authentication
entrepreneurship and innovation from or physical verification will be made mandatory for
bureaucratic hurdles. new traders coming under the Goods and Services Tax
regime from January 2020 by the GST Network.
• Idea of self-reliance is not about a return to the era

of import substitution or isolationism.
About Ghosting
• The idea of Atmanirbhar Bharat if based on 5
• Ghosting is an illegal practice whereby two or
pillars:
more market makers collectively attempt to
1. First Pillar is Economy,
influence a stock's price.
2. Second Pillar is Infrastructure,
3. Third Pillar is Our System, policies, • Corrupt companies use ghosting to affect stock
prices so they can profit from the price movement.
4. Fourth Pillar is Our Demography and
5. Fifth pillar is Our Demand • The industry calls this ghosting because, like a
spectral image or a ghost, this collusion among
STUDENT NOTES: market makers is difficult to detect.
• The goal is mutually beneficial as those involved
are looking to capitalize on the change in price for
personal gain.

APPLICATION SUPPORTED BLOCKED AMOUNT

(ASBA) MECHANISM

• It refers to an online mechanism wherein the
application money is kept blocked in the
applicant's account and is debited only at the time
of allotment.
• Process developed by the India's Stock Market
Regulator SEBI for applying to IPO.


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• This effectively does away with the whole process 6. Utilities
related to refund of money to investors in
instances wherein the issue is oversubscribed. Exchange Traded Fund (ETF):
• In ASBA, an IPO applicant's account doesn't get • ETF is index funds that offer the security of a fund
debited until shares are allotted to them. and liquidity of stock listed and traded on
exchanges.
SIDE POCKETING • They are basically basket of stocks with assigned
UTI Credit Risk Fund and Reliance Ultra Short weights that reflects the composition of an index.
Duration Fund announced their intent to side pocket • They are similar to mutual funds in a certain
bonds issued by Altico Capital after it as rated default manner but are more liquid as they can be sold
grade by an agency. quickly on stock exchanges like shares.
• The ETFs trading value is based on the net asset
About Side Pocket: value of the underlying stocks that it
• A side pocket is a type of account utilized in hedge represents. Their trading value is based on net
funds to differentiate illiquid assets from more asset value of the underlying stocks that it
liquid investments. represents.
• The Securities and Exchange Board of India (SEBI) • Their price changes daily as they are traded
introduced the side pocketing framework on the throughout day.
back of IL&FS fallout, putting a lot of pressure on
the net asset value of most debt funds that owned NATIONAL COMMODITY AND DERIVATIVES
IL&FS group papers in their portfolio. EXCHANGE (NCDEX)
• Once an investment enters a side pocket account, • It is country’s leading agricultural commodity
only the current participants in the hedge fund exchange, which offers services across the entire
are entitled to a share of it. value-chain of agricultural commodities.
• All existing investors in the scheme are allotted • NCDEX offers a wide range of benchmark products
equal number of units in the segregated portfolio across agriculture commodities.
as held in the main portfolio and no redemption • It brings buyers and sellers together through its
or subscription is allowed in the segregated electronic trading platform.
portfolio.
• Future investors will not receive a share of the CORONA BONDS
proceeds if the asset's returns become realized. • Corona bonds are joint debt issued to member
states of the EU. The funds would be common and
INSIDER TRADING: the illegal practice of trading on would come from the European Investment
the stock exchange to one's own advantage through Bank.
having access to confidential information. • This would be mutualised debt, taken collectively
by all member states of the European Union.
BHARAT-22 ETF • Countries like Italy, Spain which have suffered
Bharat-22 ETF fourth tranche on October 3. huge deaths due to Covid-19 are demanding such
kind of economic measures from the EU to meet
About: the extraordinary situation.
• Bharat 22 is an Exchange-traded fund (ETF) that • However, Germany, Netherlands, Austria and
will track the performance of 22 stocks the Finland, also known as the “Frugal Four”, the
government plans to pare its stake in. fiscally conservative EU states have opposed such
• The Bharat 22 ETF was initially launched by the type of idea.
Government in financial year 2017-18.
• The Bharat-22 ETF will span six sectors: INDIA INX
1. Basic materials, • India International Exchange Limited (India INX)
2. Energy, is India’s first international exchange located
3. Finance, at the Gujarat International Finance-Tech City
4. FMCG (Fast-Moving Consumer Goods), (GIFT City).
5. Industrials and
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• Launched in 2017, it is a subsidiary of BSE CONSOL BONDS
Limited.
• Consol bond (also known as perpetual bond) is a
• Operating on an advanced technology platform of fixed income security with no maturity date.
EUREX T7, Exchange is fastest in the world with
• It is often considered a type of equity, rather
a turn-around time of 4 micro seconds .
than debt.
INDIA INX’S GLOBAL SECURITIES MARKET (GSM) • The major benefit of these bonds is that they pay a
steady stream of interest payments forever.
• It is India’s first international primary market However, these bonds can be redeemed at
platform that connects global investors with issuer's discretion.
Indian and foreign issuers. • According to some experts, The introduction of the
• This provides global investors an opportunity to Consol bonds would have been a better solution
invest in Indian securities without assuming any for the Indian government if people would have
currency risk and in a regulatory regime invested in consol bonds instead of making
comparable with any other leading jurisdiction. donations to PM-CARES. It could have made
citizens as active participants in handling the
NSE KNOWLEDGE HUB economic scenario of the country.
Union Commerce minister has inaugurated the “NSE
Knowledge Hub”. SOVEREIGN GOLD BOND SCHEME
• Introduced in 2015, to help reduce India’s over
About dependence on gold imports.
• The ‘NSE Knowledge Hub’ is an Artificial • The minimum permissible investment is 1 gram of
Intelligence (AI) powered learning ecosystem. gold while the maximum limit for subscription is 4
• The platform has been developed by NSE kg for individual, 4 kg for HUF and 20 Kg for trusts
Academy, a wholly-owned subsidiary of the and similar entities per fiscal (April-March)
National Stock Exchange (NSE). notified by the Government from time to time.
• This platform seeks to assist the banking, financial, • Sovereign gold bond is a substitute for holding
securities and insurance (BFSI) sector in physical gold. The bonds are issued by the
enhancing skills for their employees. Reserve Bank of India (RBI) on behalf of the
• It also aims to help the academic institutions in government and is a bond denominated in gold.
preparing future-ready talent skilled for the • These bonds are backed by a sovereign
financial services industry. guarantee and can also be held in demat form.
• The platform will also be available on mobile and • They are priced as per the underlying spot gold
will attempt to bring together world-class content prices.
and learners through this state- of-the-art and • These bonds offer an interest at the rate of 2.5%
future-ready platform. per annum on the principal investment amount.
• While the interest on the bonds are taxable, the
About NSE: capital gains at the time of redemption are exempt
• The National Stock Exchange of India Limited from tax.
(NSE) is the leading stock exchange of India, • These bonds can also be used as collateral for
located in Mumbai. availing loans from banks and NBFCs.
• The NSE was established in 1992 as the first • SGB has a fixed tenure of eight years, though
demutualized electronic exchange in the country. early redemption is allowed after the fifth year
• NSE has a fully-integrated business model from issuance.
comprising exchange listings, trading services, • Since the bonds are listed on the exchange, these
clearing and settlement services, indices, market can be transferred to other investors as well.
data feeds, technology solutions and financial
education offerings. FOLLOW ON PUBLIC OFFER (FPO)
• It also oversees compliance by trading and Public sector ITI Ltd. is scheduled to float a follow-on
clearing members and listed companies with the public offer (FPO) to list an additional 18 crore equity
rules and regulations of the exchange. shares in the third or fourth week of January.

96

About: • Usually bonds are issued at coupon rates close to
• A follow-on public offering (FPO) is the issuance the prevailing interest rate, so that they can be
of shares to investors by a company listed on a sold close to their face values.
stock exchange.
• A follow-on offering is an issuance of additional Bonds:
shares made by a company after an initial public • Bonds and equities are two important
offering (IPO). instruments issued by corporate to mobilize
• Companies usually announce FPOs to raise equity funds.
or reduce debt. • Bonds are debt, whereas stocks are equity. By
• The two main types of FPOs are: purchasing equity (stock), an investor becomes an
1. Dilutive—meaning new shares are added— owner in the issuing entity.
and • By purchasing a debt instrument like bond, an
2. Non-dilutive—meaning existing private investor becomes a creditor to the corporation (or
shares are sold publicly. government).
• The primary advantage of being a creditor (by
At-the-Market Offering (ATM): purchasing bonds) is that he has a higher claim
• If the company is not satisfied with the available on assets than shareholders do.
price of shares on a given day, it can refrain from • In the case of bankruptcy, a bondholder will get
offering shares. his money back before a shareholder.
• At-the-Market Offering is a type of FPO by which a
company can offer secondary public shares on Terms related to bonds:
any given day, usually depending on the prevailing • Face Value of Bond: In bond investing, face value,
market price, to raise capital. or par value, is commonly referred to the amount
paid to a bondholder at the maturity date,
NATIONAL INTERNET EXCHANGE OF INDIA given the issuer doesn’t default. The face value is
(NIXI) also known as the repayment amount.
• NIXI not for profit Organization under Section 8 of • Coupon: A coupon payment on a bond is a
the Companies Act, 2013 and was registered in periodic interest payment that the bondholder
2003 receives during the time between when the bond
• For peering of Internet Service Providers (ISPs) is issued and when it matures.
among themselves to route the domestic traffic • Maturity Date: Maturity date is the date when
within the country, instead of taking it all the way the principal (face value) is paid back. The final
to US/Abroad. coupon and the face value of a debt security are
• It will offer free Internationalized Domain Name repaid to the investor on the maturity date.
(IDN) in 22 official Indian languages along with
every IN domain (India’s Country Code Top Level FULLY ACCESSIBLE ROUTE FOR G-SECS
domain) booked by the registrant. Reserve Bank of India has introduced a separate
channel called Fully Accessible Route (FAR) to enable
BOND PRICE non-residents to invest in specified Government of
• Bond price is the present discounted value of India dated securities.
future cash stream generated by a bond.
• It refers to the sum of the present values of all About FAR
likely coupon payments plus the present value • Under this route, non-resident investors can
of the par value at maturity. invest in specified government securities
• The price of a bond and its yield-to-maturity are without any investment ceilings.
negatively correlated to each other. • These securities attract no foreign portfolio
• When the yield-to-maturity is higher than the investor (FPI) limits. FPI limit in all other G-secs
coupon rate, the price of a bond is less than the is 6 percent.
face value and vice-versa. • Domestic investors can also invest in these.
• It was earlier announced in Union budget 2020-
21.
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• There are other two mechanisms for foreign sustainable energy (wind, solar etc.), Clean
investors: transportation (mass transportation), Sustainable
1. Medium-Term Framework where FPI limit water management, Climate change adaptation,
on G-sec is 6% and on SDLs is 2%. Energy efficiency (efficient and green buildings),
2. Voluntary Retention Route, which allows Sustainable waste management (recycling, waste
investors easier rules in return for a to energy etc.), Sustainable land use (including
commitment to remain invested for a longer sustainable forestry and agriculture, afforestation
period. It encourages Foreign Portfolio etc.) and Biodiversity conservation.
Investors to undertake long-term investments
in Indian debt markets. INDIAN GAS EXCHANGE (IGX)
Recently, India launched its first gas exchange which
Government Security (G-Sec): has been named as the Indian Gas Exchange (IGX).
• A G-Sec is a tradable instrument issued by the
Central Government or the State Governments. It About:
acknowledges the Government’s debt obligation. • The IGX is a digital trading platform that will
• Such securities are either: allow buyers and sellers of natural gas to trade
1. Short term Called treasury bills which have both in the spot market and in the forward
Maturities of less than one year. presently market for imported natural gas.
issued in three tenors, namely, 91-day, 182 • Features: It will allow trading across three
day and 364 day. There are also cash hubs — Dahej and Hazira in Gujarat, and Kakinada
Management Bills (CMBs) which have a in Andhra Pradesh.
maturity of less than 90 days. • Imported Liquefied Natural Gas (LNG) will be
2. Long term: Called Government bonds or regassified and sold to buyers through the
dated securities Maturity of one year or exchange, removing the requirement for buyers
more. and sellers to find each other.
• The Central Government issues both treasury • The exchange also allows much shorter
bills and bonds or dated securities while, contracts – for delivery on the next day, and up to
• the State Governments issue only bonds or a month – while ordinarily contracts for natural
dated securities, which are called the State gas supply are as long as six months to a year.
Development Loans (SDLs). • This will mean that buyers do not have to contact
• G-Secs carry practically no risk of default and, multiple dealers to ensure they find a fair price.
hence, are called risk-free gilt-edged
instruments. Benefits: IGX is expected to facilitate transparent
• Major players in the G-Secs market include price discovery in natural gas, and facilitate the
commercial banks Primary Dealers, insurance growth of the share of natural gas in India’s energy
companies, co-operative banks, regional rural basket. It removes the requirement for buyers and
banks, mutual funds, provident and pension funds. sellers to find each other to ensure a fair price deal.
• Retail investors including individuals are allowed
participation on “non-competitive” basis in select INDIAN ENERGY EXCHANGE (IEX)
auctions of dated Government of India (GoI) • First and largest energy exchange in India.
securities and Treasury Bills. • It is regulated by the Central Electricity
• There are also Cash Management Bills (CMBs) Regulatory Commission (CERC).
which have a maturity of less than 90 days. • IEX is one of the two power exchanges in India
GREEN BONDS (Other being Power Exchange India Ltd (PXIL).
• Green Bonds are debt instruments issued by SOCIAL STOCK EXCHANGES

financial, non-financial or public entities • A working group constituted by the Securities and
where the proceeds are 'ear-marked' for use Exchange Board of India (SEBI) on Social Stock
towards financing ‘green’ projects. Exchanges (SSEs) has recommended allowing
• As per SEBI ‘green bonds’ are denoted as such if non-profit organisations to directly list on such
funds are to be utilized for Renewable and platforms.
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About SSE: • When a principal breaks a bond’s terms, the
• An SSE is a platform which allows investors to harmed party can make a claim on the bond to
buy shares in social enterprises vetted by an recover losses.
official exchange.
• The SSE will function as a common platform Why Surety Bond in the Road Sector?
where social enterprises can raise funds from • Surety bonds in the road sector guarantees
the public. satisfactory completion of a project by a
• It will function on the lines of major stock contractor and provide performance security to
exchanges like BSE and NSE. However, the various government agencies.
purpose of the Social Stock Exchange will be
different – not profit, but social welfare. BSE E-AGRICULTURAL MARKETS LTD. (BEAM)
• Under the regulatory ambit of SEBI, a listing of PORTAL
social enterprises and voluntary organizations • Bombay Stock Exchange (BSE) has launched an
will be undertaken so that they can raise capital electronic spot platform for agricultural
as equity, debt or as units like a mutual fund. commodities through its subsidiary BSE
• Idea of a SSE for listing of social enterprise was Investments.
mooted in the Union Budget 2019-20. • Platform will function as a national spot trading
platform.
Why SSEs? • Spot market is where financial instruments are
• India needs massive investments in the coming exchanged for immediate delivery, such as
years to be able to meet the human development commodities, currencies, and securities.
goals identified by global bodies like the UN. • Spot commodity refers to a commodity that is
• Currently, social enterprises are very active in being sold (on the spot market) with the intention
India. However, they face challenges in raising of being delivered to the buyer fairly immediately
funds. - either presently or within only a few days.

Benefits: INTERNATIONAL ORGANIZATION OF SECURITIES
• There is a great opportunity to unlock funds from COMMISSIONS (IOSCO)
donors, philanthropic foundations and CSR • Recently, International Financial Services
spenders, in the form of zero-coupon zero
Centres Authority (IFSCA), Gujarat became an
principal bonds. These bonds will be listed on the associate member of IOSCO which will provide
SSE.
IFSCA, platform to exchange information at global
• At first, the SSE could become a repository of level on areas of common interests and to learn
social enterprises and impact investors. from the experiences and best practices of the
SURETY BONDS regulators of other well established financial
centres.
Insurance regulator IRDAI has formed a panel under • IOSCO is international body established in
G Srinivasan, director, National Insurance Academy, 1983 that brings together world's securities
to assess the suitability of the Indian insurance regulators.
industry or any other sector to offer Surety Bonds for • It develops, implements and promotes adherence
road contracts in the country. to internationally recognized standards for
securities regulation.
About SURETY BONDS: • 1st IFSC in India has been set up at the Gujarat
• It is a three-party agreement that legally binds International Finance Tec-City (GIFT).
together a principal who needs the bond, an • To regulate such institutions, government
obligee who requires the bond and a surety established IFSCA with its head office in
company that sells the bond. Gandhinagar, Gujarat.
• Significance: Surety bonds provide financial
guarantee that contracts will be completed INFRASTRUCTURE INVESTMENT TRUST (INVIT)
according to pre-defined and mutual terms.
Recently, the Cabinet Committee on Economic Affairs
has approved monetisation of assets of POWERGRID
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through Infrastructure Investment Trust (InvIT) • Centre would recapitalise Punjab & Sind Bank
model. using this bond. Centre has allowed this bank to
account for these securities under ‘Held to
About InvIT model: Maturity’ portfolio without any limit.
• It is like a mutual fund, which enables direct • Also it will not qualify as Statutory Liquidity
investment of small amounts of money from Ratio eligible papers.
possible individual/institutional investors in
infrastructure to earn a small portion of the NEGATIVE-YIELD BONDS
income as return. China recently sold negative-yield debt for the first
• Regulated by the SEBI (Infrastructure time, and this saw high demand from investors across
Investment Trusts) Regulations, 2014. Europe.

About Power grid: About:
• It is a public limited company under the • Negative-Yield Bonds are debt instruments that
administrative control of the Ministry of Power, offer to pay the investor a maturity amounts
Government of India. lower than the purchase price of the bond.
• It started its commercial operation in the year • These are generally issued by central banks or
1992-93 and is today, a Maharatna company, governments, and investors pay interest to the
engaged in the business of power transmission. borrower to keep their money with them.

NHAI's InvIT Why do investors buy Negative Yield Bonds?
• National Highway Authority of India (NHAI) • Pledge Asset: Bonds are often used to pledge as
recently unveiled the Infrastructure Investment collateral for financing and as a result need to be
Trust (InvITs) roadmap. held regardless of their price or yield.
• InvITs will be a trust established under the • Currency Gain: Some investors believe they can
Indian Trust Act, 1882 and Securities and still make money even with negative yields. For
Exchange Board of India (Infrastructure example, foreign investors might believe the
Investment Trusts) Regulations, 2014. currency’s exchange rate will rise, which would
• InvIT Trust will be formed with an objective of offset the negative bond yield.
investing primarily in infrastructure projects • Deflation Risk: Domestically, investors might
and InvIT may hold assets either directly or expect a period of deflation, or lower prices in
through an SPV or a holding. the economy, which would allow them to make
money by using their savings to buy more goods
Real Estate Investment Trust (REIT) and services.
Listed entities which owns and manages • Safe Haven Assets: Investors might also be
buildings/properties. It functions like mutual fund. interested in negative bond yields if the loss is
REITs bound by norms of SEBI and RERA. REITs less than it would be with another investment.
aims to facilitate more domestic and foreign
FLOATING RATE BONDS
investment in real estate.
• FRS bonds are fixed income instruments
ZERO-COUPON BONDS OR ACCRUAL BONDS offered by the Government of India which come
• A zero-coupon bond is a debt security that does with a lock-in period.
not pay interest but instead trades at a deep • Unlike regular bonds that pay a fixed rate of
discount, rendering a profit at maturity, when the interest, floating rate bonds have a variable rate of
bond is redeemed for its full face value. interest.
• Because they offer the entire payment at maturity, • The interest rate risk is largely mitigated as these
zero-coupon bonds tend to fluctuate in price, bonds will pay higher return when prevailing
much more so than coupon bonds. rates are high.
• Difference between purchase price and par value • The best time to buy floating rate bonds is when
indicates the investor's return. rates are low and are expected to rise.

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• The FRS bonds are a 100% risk free investment 11. HUMAN DEVELOPMENT AND
option as interest payments on these are
guaranteed by the Government of India.
SUSTAINABLE DEVELOPMENT
• The interest earned on FRBs will be taxed, TDS
UNNAT BHARAT ABHIYAN 2.0
will be deducted on interest payment similar to an
Fixed Deposit, the same can be claimed back while Recently, the Human Resource Minister has claimed
filing Income Tax returns. that the Unnat Bharat Abhiyan is 'transforming the
living conditions in villages'.
BSE MUNICIPAL BOND LISTING
About:
• Bonds issued by the Lucknow Municipal
Corporation (LMC) listed on the BSE (Bombay • Unnat Bharat Abhiyan is a flagship program of
stock exchange). the Ministry for Human Resource Development
(MHRD).
• 9th city in India to raise capital through municipal
bonds. • It aims to link the Higher Education Institutions
• LMC’s bond issuance offered coupon of 8.5% and with a set of at least (5) villages, so that these
institutions can contribute to the economic and
had tenure of 10 years.
social betterment of these village communities
• The issuance had garnered 4.5 times subscription.
using their knowledge base.
• LMC bond were rated AA and AA (CE) Stable by

Brickwork Ratings. Money raised using such
Main Objectives:
bonds is typically used for infra projects such as
• To engage the faculty and students of Higher
roads, water and housing.
Educational Institutions (HEIs) in identifying

development issues in rural areas and finding
STUDNETS NOTES:
sustainable solutions for the same.

• Identify &select existing innovative

technologies, enable customisation of

technologies, or devise implementation methods

for innovative solutions, as required by the people.

• To allow HEIs to contribute to devising systems

for smooth implementation of various
Government programmes.

Unnat Bharat Abhiyan 2.0
• It is the upgraded version of Unnat Bharat
Abhiyan 1.0. It was launched in 2018.
• The scheme is extended to all educational
institutes; however, under Unnat Bharat Abhiyan
2.0 participating institutes are selected based on
the fulfillment of certain criteria.

PM SVANIDHI
The Ministry of Housing and Urban Affairs has
launched a micro-credit facility for street vendors
under the Swanidhi Scheme.

About PM Svanidhi:
• It is a special micro-credit facility scheme to
enable more than 50 lakh urban/peri-urban &
rural street vendors to restart their livelihoods
affected due to the lockdown.

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• Duration: The scheme will be applicable till identified through the Socio-Economic Caste
March 2022. Census (SECC) is given a deposit-free LPG
• Expected beneficiaries: This loan will be given to connection with financial assistance of Rs 1,600
those who run shops on the roadside, handcart per connection by the Centre.
or streetcar. Fruit-vegetable, laundry, saloon • Target: Initially the target was installation of 5
and paan shops are also included in this category. crore LPG connections by 2019. But the target
was revised to 8 crore which has been achieved in
Features of the Scheme: September, 2019.
• Under this, each of the street vendors will be given
a credit loan of Rs 10,000which they can return VOLUNTARY NATIONAL REVIEW
as monthly installments within a year. • NITI Aayog presented India’s second Voluntary
• Those who repay their loans on time will get 7% National Review (VNR) at the United Nations
annual interest as subsidy which will be High-level Political Forum (HLPF) on Sustainable
transferred in their bank accounts. Development, 2020.
• The loans would be without collateral. There will • India’s first VNR was presented in 2017.
be no penalty on early repayment of the loan. • The VNR 2020 report titled - Decade of Action:
Taking SDGs from Global to Local.
“PM SVANidhi” Portal. • NITI Aayog is responsible for overall
• The portal will provide an integrated end to end coordination and monitoring of the SDGs in the
IT interface to users for availing benefits under country, in close collaboration with Ministry of
the scheme. Statistics and Programme Implementation
• Developed by SIDBI, which is the scheme (MoSPI).
implementation partner for PM SVANidhi.
• Purpose: It will accept loan applications from AFFORDABLE RENTAL HOUSING COMPLEXES
Street Vendors, who can apply directly or with (AHRCS)
the help of Common Service Centers/ Urban Local Recently, the Union Cabinet has given its approval for
Bodies/ Self Help Groups. Affordable Rental Housing Complexes (AHRCs) for
urban migrants and poor.
PRADHAN MANTRI UJJWALA YOJANA (PMUY)
The Union cabinet has approved an extension till end About AHRCs:
September for availing free cooking gas cylinders • AHRC will be as a sub-scheme under Pradhan
under the Pradhan Mantri Ujjwala Yojana (PMUY). Mantri Awas Yojana-Urban (PMAY-U).
• Nodal Ministry: Ministry of Housing and Urban
About PMUY: affairs.
• Nodal Ministry: Ministry of Petroleum & Natural • Approach: The scheme will have a two-pronged
Gas. approach:
• Aim: To replace the unclean cooking fuels mostly 1. The existing vacant government funded
used in rural India with the clean and more housing complexes will be converted into
efficient LPG (Liquefied Petroleum Gas). ARHCs through a concession agreement for 25
• Launched Year: 2016 years.
• Objectives: 2. Special incentives like use permission, 50%
Ø Empower women and protect their health additional Floor Area Ratio, concessional loan
Ø Reduce the serious health hazards at priority sector lending rates, tax reliefs at
associated with cooking based on fossil fuel par with affordable housing will be offered to
Ø Reduce the number of deaths in India due to private and public entities to develop ARHCs
unclean cooking fuel and on their own available vacant land for 25
Ø Prevent young children from a significant years.
number of acute respiratory illnesses caused • Target Beneficiaries: A large part of workforce in
due to indoor air pollution. manufacturing industries, service providers in
• Features: Under the scheme, an adult woman hospitality, and construction or other sectors,
member of a below poverty line family
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laborers, students etc. who come from rural areas 3,000 per month to nearly Rs 12,000 per
or small towns. month.

INDIA ENERGY MODELING FORUM Benefits provided:
An India Energy Modelling Forum was launched on • Training for advanced pottery products
July 2, 2020. • Latest, new technology pottery equipment’s like
the electric Chaak.
About IEMF • Market linkages and visibility through KVIC
• Background: It was established by the joint exhibitions
working group meeting of the Sustainable
Growth Pillar. KVIC
• Sustainable Growth Pillar is an important pillar of • Formation: The KVIC is a statutory body formed
India–US Strategic Energy Partnership co- in April 1957 under the ‘Khadi and Village
chaired by NITI Aayog and USAID. Industries Commission Act of 1956’.
• The SG pillar entails energy data management, • Parent Organization: It is an apex organisation
energy modelling and collaboration on low under the Ministry of Micro, Small and Medium
carbon technologies as three key activities. Enterprises, with regard to khadi and village
• Composition: The forum would include industries within India.
knowledge partners, data agencies and • Functions: It seeks to plan, promote, facilitate,
concerned government ministries. organise and assist in the establishment and
• NITI Aayog will initially coordinate the activities development of khadi and village industries in
of the forum and finalizing its governing structure. the rural areas.

Energy Modelling Forum (EMF) TRIFOOD PROJECT
• The Energy Modelling Forum (EMF) in USA was Union Tribal Affairs Minister has e-launched the
established in 1976 at Stanford University. tertiary processing centers of ‘Trifood Project’.
• Functions: It was to connect leading modelling
experts and decision makers from government, About:
industry, universities, and other research • It is an initiative of the Ministry of Tribal Affairs
organizations. in association with the Ministry of Food
• Significance: It provides an unbiased platform Processing (MoFPI).
to discuss the contemporary issues revolving • Aim: To enhance the income of tribals through
around energy and environment. better utilization of and value addition to the
Minor Forest Produce(MFP) collected by the
KUMHAR SASHAKTIKARAN YOJANA tribal forest gatherers.
The Centre has distributed 100 electric potter wheels • It is being implemented by Tribal Cooperative
to 100 trained artisans under the KSY. Marketing Development Federation of
India(TRIFED).
About KSY: • To achieve this, as a start, two Minor Forest
• Bodies involved: Kumbhar Sashaktikaran Produce (MFP) processing units will be set up in
Program is an initiative of the Khadi and Village the following locations.
Industries Commission (KVIC). • Raigad Unit, Maharashtra that will be used for
• Aim: It aims for empowerment of potter value addition to Mahua, Amla, custard apple and
community in the remotest of locations in the Jamun and will produce Mahua drink, amla juice,
country. candy, Jamun juice and custard apple pulp.
• Coverage: The program reaches out to the potters • Jagdalpur multi-commodity processing centre,
in U.P, M.P, Maharashtra, J&K, Haryana, Chhattisgarh will be used for the processing of
Rajasthan, West Bengal, Assam, Gujarat, Tamil commodities like Mahua, Amla, honey, cashew,
Nadu, Odisha, Telangana and Bihar. tamarind, ginger, garlic and other fruits and
• The average income of potters under the Kumhar vegetables.
Sashaktikaran Yojana has gone up from nearly Rs
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Minor Forest Produce (MFP) About:
• The Scheduled Tribes and Other Traditional • It was launched in 2018 by Employees State
Forest Dwellers Act, 2006 defines minor forest Insurance (ESI) Corporation.
produce as all non-timber forest produce of • Aim: To provide financial support to those who
plant origin. lost their jobs or rendered jobless for whatsoever
• MFP includes bamboo, brushwood, stumps, reasons due to changing employment patterns.
canes, cocoon, honey, waxes, Lac, tendu leaves, • Coverage: The scheme is for Insured Persons (IP)
medicinal plants, roots among others. covered under the Employees State Insurance Act,
1948.
PRIME MINISTER EMPLOYMENT GENERATION
PROGRAM (PMEGP) What are the latest changes?
The approval of projects under the Prime Minister's • Eligibility criteria for availing the relief has been
Employment Generation Program (PMEGP) increased relaxed, as under:
44% during the first five months (April - August) of the • The payment of relief has been enhanced to 50%
financial year 2020-21. of average of wages from earlier 25% of average
wages payable upto maximum 90 days of
About PMEGP: unemployment.
• Funding: Central sector scheme. • Instead of the relief becoming payable 90 days
• Administered by: the Ministry of Micro, Small after unemployment, it shall become due for
and Medium Enterprises (MoMSME). payment after 30 days.
• Launched in 2008-09. • The Insured Person can submit the claim
• It is a credit-linked subsidy scheme which directly to ESIC Branch Office instead of the
promotes self-employment through setting up of claim being forwarded by the last employer and
the payment shall be made directly in the bank
micro-enterprises, where subsidy up to 35% is
provided by the Government through Ministry of account of IP.
MSME for loans up to ₹25 lakhs in manufacturing • The Insured Person should have been insurable
and ₹10 lakhs in the service sector. employment for a minimum period of 2 years
before his/her unemployment and should have
Implementation: contributed for not less than 78 days in the
contribution period immediately preceding to
• National Level- Khadi and Village Industries
Commission (KVIC) as the nodal agency. unemployment.

• State Level- State KVIC Directorates, State Khadi
and Village Industries Boards (KVIBs), District ESIC
Industries Centers (DICs) and banks. • It is a Statutory and Administrative body under
the Ministry of Labour and Employment.
Eligibility: • It administers ESIC Act, 1948.
• Any individual above 18 years of age, Self Help
Groups, Institutions registered under Societies TRIBAL ENTREPRENEURSHIP DEVELOPMENT
Registration Act 1860, Production Co-operative PROGRAMME
Societies and Charitable Trusts are eligible. Recently, the Union Minister of Tribal Affairs has
• Existing Units and the units that have already launched the 'Tribal Entrepreneurship Development
availed Government Subsidy under any other Programme'.
scheme of Government of India or State
Government are not eligible. About Tribal Entrepreneurship Development
• Only new projects are considered for sanction Programme
under PMEGP. • It is a joint initiative of Ministry of Tribal Affairs
and Associated Chambers of Commerce and
ATAL BIMIT VYAKTI KALYAN YOJANA Industry of India (ASSOCHAM).
Relaxation in eligibility criteria and enhancement in • It is aimed at ensuring the quality of life to the
the payment of unemployment benefits under the Atal last man in the line and strengthening tribal
Bimit Vyakti Kalyan Yojana of ESIC. entrepreneurship.
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• It would optimize the contribution of the tribal • Launch: Covid-19 Shri Shakti Challenge was
community to the growing economy of the country launched by MyGov in collaboration with UN
and support India's vision of becoming ''Atma Women in April 2020.
Nirbhar''. • Objective: To encourage and involve women
led startups to come up with innovative solutions
ASSOCHAM that can help in the fight against Covid-19 or solve
• The Associated Chambers of Commerce and problems that impact a large number of women.
Industry of India (ASSOCHAM) is one of the apex • Selection Criteria: Evaluation of the solutions
trade associations of India. proposed by the startups was done on the
• The organisation represents the interests of parameters that included innovation, usability,
trade and commerce in India, and acts as an relevance and impact of their idea on the society.
interface between issues and initiatives. • Top 3 entries were selected as winners, and in
• The goal of this organisation is to promote both view of the high quality of solutions presented, 3
domestic and international trade, and reduce additional entries were recognised as ‘Promising
trade barriers while fostering conducive Solutions’.
environment for the growth of trade and industry • Cash Prize: Rs. 5 lakhs each for the top 3
of India. winners, Rs. 2 lakhs each to the 3 startups
chosen for their promising solutions.
UDYAM SAKHI PORTAL
MyGov:
• Launched by Ministry of Micro, Small & Medium
• Launched in 2014.
Enterprises
• It aims to encourage women entrepreneurs by • MyGov is an innovative platform to build a
creating business models revolving around low- partnership between Citizens and Government
with the help of technology for growth and
cost products and services to resolve social
inequities. development of India.

#ARTHSHASTRI CAMPAIGN UN Women
• It was established in 2010.
• Finance Ministry would explain economic terms
• UN Women is the United Nations entity
through animated videos to help the common man
dedicated to gender equality and the
and students understand the Budget exercise in a
empowerment of women.
simple way.
• A global champion for women and girls, UN
KALA KUMBH – HANDICRAFTS THEMATIC Women was established to accelerate progress
EXHIBITION’ on meeting their needs worldwide.
• Organised by Ministry of Textiles PRIME MINISTER’S NATIONAL RELIEF FUND

• Objective is to promote Geographical Indication (PMNRF)
(GI) crafts and heritage of India.
• Launched in 1948, Prime Minister’s National
• It is sponsored by the Export Promotion Council
for Handicrafts (EPCH) Relief Fund (PMNRF) in India is the fund raised to
provide support for people affected by natural and
• The EPCH was established under Companies Act in
man-made disasters, first created by Jawaharlal
the year 1986-87 and is a non-profit organisation,
Nehru to support the displaced people from
with an object to promote, support, protect,
Pakistan during Partition.
maintain and increase the export of handicrafts.
• Disbursements are made with the approval of the
COVID-19 SHRI SHAKTI CHALLENGE Prime Minister.
• PMNRF has not been constituted by the
Recently, six women led startups have won Covid-19 Parliament.
Shri Shakti Challenge organized by MyGov in • Fund is recognized as a Trust under the Income
collaboration with UN WOMEN.
Tax Act and the same is managed by Prime
Minister or multiple delegates for national causes.
About: PMNRF is exempt under Income Tax Act.
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• Prime Minister is the Chairman of PMNRF. ATMA NIRBHAR BHARAT ROZGAR YOJANA
• These contributions also qualify as CSR Finance minister has announced the Atmanir Bhar
(corporate social responsibility). Bharat Rozgar Yojana scheme.
• PMNRF accepts only voluntary donations by
individuals and institutions. Contributions flowing About:
out of budgetary sources of Government or from • Aim: To incentivise the creation of new
the balance sheets of the public sector employment opportunities during the Covid-19
undertakings are not accepted. economic recovery phase.
• At the time of natural calamity of devastating • Beneficiaries (new employees) under Scheme:
scale, Prime Minister, makes an appeal for Ø Any new employee joining employment in
donation to the fund. EPF registered establishments on monthly
UNNATEE (Unlocking NATional Energy Efficiency wages less than Rs 15,000.
Ø EPF members drawing a monthly wage of
Potential)
less than Rs 15,000 who made exit from
• Bureau of Energy Efficiency (BEE) has employment during covid-19 pandemic from
developed a national strategy document for March 1, 2020, to September 30, 2020 and are
accelerating energy efficiency in India. employed on or after October 1, 2020.
• The strategy document titled UNNATEE • Government Contribution: Central Government
(Unlocking NATional Energy Efficiency potential) will provide subsidy for two years in respect of
describes a plain framework and implementation new eligible employees engaged on or after
strategy to establish a clear linkage between 01.10.2020 at following scale:
energy supply-demand scenarios and energy Ø Establishments employing up to 1000
efficiency opportunities. employees: Employee’s contributions (12%
• Towards developing an energy efficient nation of Wages) & Employer’s contributions (12%
(2017-2031). of wages) totalling 24% of wages
Ø Establishments employing more than 1000
PURVODAYA SCHEME: ACCELERATED employees: Only Employee’s EPF
DEVELOPMENT OF STEEL SECTOR contributions (12% of EPF wages)
• Ministry of Steel in partnership with CII and Joint • Duration: The scheme will be operational till June
Plant Committee recently launched PURVODAYA: 30, 2021.
Accelerated development of eastern India through
integrated steel hub in Kolkata, West Bengal. SDG INVESTOR MAP FOR INDIA
• Aims to enable swift capacity addition and The Invest India and the United Nations Development
improve overall competitiveness of steel Programme has launched the sustainable
producers both in terms of cost and quality. development goal investor map for India.
• The focus will be on eastern states of India About:
(Odisha, Jharkhand, Chhattisgarh, West • Aim: It aims to help public and private sector
Bengal) and northern part of Andhra Pradesh stake-holders direct capital towards
which collectively hold ~80% of the country’s iron Investment Opportunity Areas (IOAs) that can
ore, ~100% of coking coal and significant portion contribute to the nationally determined
of chromite, bauxite and dolomite reserves. sustainable development needs of India.
• Through this programme, the government aims to
transform logistics and utilities infrastructure Implementation:
which would change the socio-economic • It has laid out 18 Investment Opportunity Areas.
landscape in the eastern India. • This investment opportunity areas are in six
• As per the National Steel Policy 2017, critical sustainable development goals that were
government aims to develop a total steel launched by the United Nations.
production capacity of 300 million tonne by 2030- • The map will enable the factors that will help India
31, where around 200 million tonne is envisaged in achieving its sustainable development goals.
from the five eastern states. • It will help India understand how it can reduce the
SDG financing gap in the country.
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6 Priority Sectors: About SVAMITVA Scheme:
• Including Education, Healthcare, Agriculture and • It is a Central Sector Scheme that aims to provide
Allied Services, Financial Services, Renewable an integrated property validation solution for
Energy and Alternatives, and Sustainable rural India, engaging the latest Drone Surveying
Environment. technology, for demarcating the inhabitant land in
rural areas.
Invest India: • Aim: It aims to update the ‘record-of-rights’ in
• It was set up in 2009 as a non-profit venture the revenue/property registers and issue
under the Department for Promotion of Industry property cards to the property owners in rural
and Internal Trade, Ministry of Commerce and areas.
Industry. • Involved bodies: It is a collaborative effort of
• It is the National Investment Promotion and the Ministry of Panchayati Raj (MoPR) (Nodal
Facilitation Agency of India and acts as the first Ministry for implementation of the scheme), State
point of reference for investors in India. Panchayati Raj Departments, State Revenue /
Land Records Departments and Survey of India
Sustainable Development Goals (SDGs): (technology partner for implementation).
• These were launched at the United Nations
Conference on Sustainable Development in Rio de About Survey of India
Janeiro in 2012. • It is the National Survey and Mapping
• It consists of 17 goals and 169 specific targets that Organization of the country under the
are to be achieved by 2030. However, they are not Department of Science & Technology.
legally binding. • It was set up in 1767 and is the oldest scientific
department of the Govt. of India.
SUSTAINABLE DEVELOPMENT SOLUTIONS • It takes a leadership role in providing user
NETWORK (SDSN) focused, cost effective, reliable and quality
• It has been operating since 2012 under the geospatial data, information and intelligence for
auspices of the UN Secretary-General. meeting the needs of national security, sustainable
• SDSN mobilizes global scientific and technological national development, and new information
expertise to promote practical solutions for markets.
sustainable development, including the
implementation of the Sustainable Development E20 FUEL
Goals (SDGs) and the Paris Climate Agreement. Ministry of Road Transport and Highways has
• SDSN is also publishing the annual SDG Index & published a notification seeking comments from the
Dashboards Global Report. public for adoption of E20 fuel to promote green fuel
like ethanol.
WORLD SUSTAINABLE DEVELOPMENT SUMMIT
2020 About:
• Annual flagship event of The Energy and • It means blending 20% of ethanol with gasoline
Resources Institute (TERI). as an automotive fuel.
• It provides a platform for global leaders and • The current permissible level of blending is
practitioners to discuss and deliberate over 10% of ethanol, though India reached only 5.6%
climatic issues of universal importance. of blending in 2019.
• Theme 2020: ‘Towards 2030 Goals: Making the
Decade Count’. Significance:
• It will help in reducing emissions of carbon
SVAMITVA SCHEME dioxide, hydrocarbons, etc.
The SVAMITVA (Survey of Villages and Mapping with • It will help reduce the oil import bill, thereby
Improvised Technology in Village Areas) scheme was saving foreign exchange and boosting energy
recently launched by the Prime Minister on the security.
occasion of National Panchayati Raj.
Compatibility of Vehicles:

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As per the government, the compatibility of the 12. INDEX AND REPORTS IN NEWS
vehicle to the percentage of ethanol in the blend of
ethanol and gasoline shall be defined by the vehicle WORLD ECONOMIC OUTLOOK
manufacturer and the same shall be displayed on
the vehicle by putting a clearly visible sticker. • By International Monetary Fund (IMF).
• It had projected Indian economy growth rate @
Ethanol 11.5% in 2021.
• Ethanol having chemical formula of C2H5OH can • It suggests that India will be the only major
be produced from crops like sugarcane, maize, economy to register a double-digit growth this
wheat which have high starch content. year, followed by China.
• In India, ethanol is mainly produced from
STATE ENERGY EFFICIENCY INDEX
sugarcane molasses by the fermentation
process, Hence, since ethanol is produced from • The index is developed by Bureau of Energy
plants that harness the power of the sun, ethanol Efficiency (BEE) in association with Alliance for
is also considered as green fuel. an Energy-Efficient Economy (AEEE).
• The index tracks the progress of Energy Efficiency
SHRAM SHAKTI PORTAL Initiatives in 36 States and Union Territories
based on 97 significant indicator.
• It is a National Migration Support Portal.
• The State Energy Efficiency Index categorises
• It will record various data including demographic
states as based on their efforts and
profile, livelihood options, skill mapping and
achievements towards energy efficiency
migration pattern.
implementation.
• It would effectively help in the smooth
1. Front Runner
formulation of state and national level programs
2. Achiever
for migrant workers.
3. Contender
• The tribal migration repository, Shram Shakti
4. Aspirant
would be able to successful able to address the

data gap and empower migrant workers who
Highlight of the Index:
generally migrate in search of employment and
• The top-performing states in the State EE Index
income generation.
2019 - Haryana, Kerala and Karnataka - are in
MAHATMA GANDHI INSTITUTE OF EDUCATION the ‘Achiever’ category.
FOR PEACE AND SUSTAINABLE DEVELOPMENT • There isn’t any ‘front runner’ state.
(MGIEP)
Bureau of Energy Efficiency (BEE)
• MGIP is UNESCO's category 1 Research Institute. • The BEE is a statutory body under the Ministry
• Established by UNESCO in cooperation with the of Power, Government of India.
Government of India in 2012. • It was created in 2002 under the provisions of
• Support member governments, provide advocacy, the nation's 2001 Energy Conservation Act.
commission research and enhance capacity • The agency's function is to develop programs
building for Education for Sustainable which will increase the conservation and efficient
Development (ESD) and Peace Education. use of energy in India.
• Both MGIEP and UNESCO will play a major role in
the implementation of the National Educational WORLD COMPETITIVENESS INDEX 2019
Policy -2020.
• Released by Institute for Management
Development (independent academic
institution)
• India ranked 43rd out of 63 nation's.
• Singapore has retained its top position.
• This index is different from Global Competitive
Index which is released by World Economic
Forum.
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ECOWRAP REPORT ASIAN DEVELOPMENT OUTLOOK (ADO)
• Published by SBI. • Report released by Asian Development Bank
• Ecowrap report recommends the government to (ADB).
opt for the unconditional cash transfer to farmers • The ADO analyses economic and development
to alleviate agrarian distress rather than Universal issues in developing countries in Asia.
Basic Income (UBI) scheme. • According to report the Indian economy is
expected to contract by 4% during the current
LASPEYRES INDEX financial year (2020-21).
• Laspeyres Index is a methodology to calculate the
WORLD ECONOMIC SITUATION AND PROSPECTS
consumer price index by measuring the change in
the price of the basket of goods to the base year. 2021
• Released by United Nation's Department of
TIME TO CARE REPORT/ INEQUALITY REPORT Economic and Social Affairs (UN DESA).
• Released by Oxfam (World Inequality Report is a • It said that the world economy was hit by a once-
report by the World Inequality Lab at the Paris in-a-century crisis a Great Disruption unleashed
School of Economics) by the Covid-19 pandemic in 2020.
• Declared that India's richest 1 % hold more than • India's economy is projected to grow at 7.3% in
four-times wealth held by bottom 70% of the 2021.
country's population. • Global economy shrank by 4.3% in 2020, over
• Inequality can be measured with Lorenz Curve two-and-a-half times more than during the global
and Indices like Gini index, Atkinson’s index, financial crisis of 2009.
Robin Hood index (Hoover index).
• India is the second-most unequal country CONSUMER CONFIDENCE SURVEY
globally. The RBI conducted a consumer confidence survey; it
is at a 6-year low in September.
GLOBAL INVESTMENT TREND MONITOR REPORT
• Compiled by United Nations Conference on About:
Trade and Development (UNCTAD) • Consumer confidence weakened in September
• India was among the top 10 recipients of Foreign with both the current situation index (CSI) and
Direct Investment in 2019. the future expectations index (FEI) recording
declines.
GLOBAL ECONOMIC PROSPECTS • The sentiment around income turned negative
for the first time.
World Bank released its semi-annual Global
Economic Prospect. • Around 47.9% of participants opined that the
economic situation of the country has worsened.
About: SELF EMPLOYMENT
• The World Bank lowered its growth estimate for
India to 5 per cent for the current fiscal from the • As per latest Periodic Labour Force Survey (PLFS)
earlier projection of 6 per cent. report, self-employment between 2009-10 to
• It has forecasted global economic growth at 5 2017-18 among:
per cent in 2020. 1. Rural men increased to 57.8% from 53.5%.
• Global Economic Prospects is a World Bank 2. Rural women increased to 57.7% from 55.7
Group flagship report that examines global %.
economic developments and prospects, with a 3. Urban men decreased to 39.2% from 41.1%
special focus on Emerging Market and 4. Urban women decreased to 34.7% from
Developing Economies (EMDE). 41.1%.
• It is issued twice a year, in January and June. • In the urban areas, there is a decline in the
• The January edition includes in-depth analyses of percentage of self-employed or casual labour due
topical policy challenges while the June edition increase in the percentage of people working on
contains shorter analytical pieces. regular wage or salary.

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• Recently, ILO’s latest report titled ‘Small three pillars: Quality of Life, Economic Ability and
Matters’ also discussed the contribution of self- Sustainability.
employment across various countries. As per the • For the first time, as part of the Ease of Living
report, 85 per cent of workers in India are self- Index Assessment, a Citizen Perception Survey is
employed or do casual work. being conducted.

Periodic Labour Force Survey (PLFS): VOLATILITY INDEX (VIX)
• It was launched in April 2017 by the Ministry of • VIX (Volatility index) is an index used to measure
Statistics & Programme Implementation. the near term volatility expectations of the
• It was launched as a new regular employment markets.
unemployment survey with certain changes in • Volatility signifies the rate and magnitude of
survey methodology, data collection mechanism change in the stock price or index value.
and sampling design vis-à-vis the earlier • The movement in the VIX index reflects the
quinquennial (once in every five years) overall market volatility expectations over the
Employment and Unemployment surveys of next 30 days.
NSSO. • Given the nature of the index, it is also known as
‘fear gauge’ or ‘fear index’.
INTERNATIONAL INTELLECTUAL PROPERTY • The VIX index was first created by the Chicago
INDEX Board Options Exchange (CBOE) and
The U.S Chamber of Commerce’s Global Innovation introduced in 1993based on the prices of S&P
Policy Center (GIPC) has released the International 500 index.
Intellectual Property Index 2020. • The India VIX was launched by National Stock
Exchange (NSE) in 2010and is based on the
About: computation methodology of CBOE though
• The index maps the Intellectual Property (IP) amended to align with the Indian markets.
ecosystem in 53 global economies representing • India VIX indicates the Indian market’s volatility
over 90% of global GDP. from the investor’s perception.
• It uses 50 unique indicators which span across • India VIX also has a strong negative correlation
nine categories of protection namely patents, with Nifty. i.e. every time India VIX falls, Nifty
copyrights, trademarks, design rights, trade rises and when India VIX rises, Nifty falls.
secrets, commercialization of IP assets,
enforcement, systemic efficiency and membership FINANCIAL MANAGEMENT INDEX (FMI) FOR
and ratification of international treaties. RURAL DEVELOPMENT
• Initiative by Ministry of Rural Development
Key takeaways from the index: • It ranks the performance of the States on the basis
• The US, UK, Sweden, France and Germany of certain parameters
remained the top five economies on the index. • Preparation of annual plan, expeditious release of
• India has been ranked at 40th out of 53 State’s share, timely utilization of the funds etc.
countries in the index. It was placed at 36th
position among 50 countries in 2019. WORLD EMPLOYMENT AND SOCIAL OUTLOOK
EASE OF LIVING INDEX (EOLI) AND MUNICIPAL • International Labour Organisation (ILO) has
PERFORMANCE INDEX (MPI) 2019 released the World Employment and Social
Outlook: Trends 2020 (WESO) report.
• Ministry of Housing & Urban Affairs launched • The annual WESO Trends report analyses key
two Assessment Frameworks. labour market issues including unemployment,
• MPI, 2019 will assess performance of labour under-utilisation, working poverty, income
municipalities on five enablers- Service, Finance, inequality, labour income share and factors that
Planning, Technology and Governance. exclude people from decent work.
• EoLI is aimed at providing a holistic view of
Indian cities. EoLI 2019 will facilitate the THE DOLLAR INDEX
assessment of ease of living of citizens across
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• It is an index of the value of the United States and looked into how the social, urban and natural
dollar relative to a basket of foreign currencies, environments combine to affect happiness.
often referred to as a basket of U.S. trade partners'
currencies. The Index goes up when the U.S. dollar Important points From the Report:
gains "strength" when compared to other • Finland is ranked as the world’s happiest nation
currencies. for the third consecutive year.
• Nordic states dominated the top 10, along with
ILO MONITOR: COVID-19 AND THE WORLD OF countries such as Switzerland, New Zealand and
WORK Austria.
• International Labour Organisation (ILO) recently • The countries at the bottom are those afflicted by
released third edition of its report. violent conflicts and extreme poverty, with
Zimbabwe, South Sudan and Afghanistan
International Labour Organisation (ILO). classified as the world’s least happy nations.
• Specialized agency of the United Nation's
headquartered in Geneva, Switzerland. India’s Performance:
• It is the only tripartite U.N. agency that brings • India, previously ranked at 140 dropped to 144.
together governments, employers and workers to • Its rank is way lower than its neighbors. Nepal is
set labour standards, develop policies and devise ranked 92, Pakistan is at 66, Bangladesh at 107
programmes promoting decent work for all and Sri Lanka at 130.
women and men. • India is a new entrant to the bottom-fifteen group.
• It has 187 member States including India + It was
created in 1919, as part of the Treaty of INDIA: 3RD LARGEST PRODUCER OF
Versailles. ELECTRICITY
• Other reports released by the ILO: • As per the Key World Energy Statistics 2019,
1. World Employment and Social Outlook, India is the 3rd largest producer of electricity in
2. Global Wage Report the world.
3. World Social Protection Report. • India was 106th in terms of per capita
consumption in 2017.
UN WORLD HAPPINESS REPORT- 2020
• The Sustainable Development Solutions Network About
(SDSN) for the United Nations released the World • With a generation of 1,497 Terawatt-hour (TWh),
Happiness Report. India is the third largest producer and the third
• March 20 was designated as the World Happiness largest consumer of electricity in the world
Day by the UN General Assembly in 2012. after the US and China.
• KWES is published by the International Energy
About: Agency (IEA).
• The World Happiness Report ranks 156 • Although power generation has grown more than
countries 100-fold since independence, growth in demand
• Basis: How happy their citizens perceive has been even higher due to accelerating economic
themselves to be. activity.
• The rankings are based on polling (Gallup World • Electricity is also one of the eight core industries
Poll) which looks at six variables: of India.
1. GDP per capita, • Electricity use and access are strongly correlated
2. Social support, with economic development.
3. Healthy life expectancy,
4. Freedom, Some schemes Related to electricity:
5. Generosity, • Saubhagya Scheme: The 'Pradhan Mantri Sahaj
6. Absence of corruption. Bijli Har Ghar Yojana' was launched by the
• The 2020 Report for the first-time ranked cities Government of India with the aim of providing
around the world by their subjective well-being electricity access to over 40 million families in
the country.

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• The Ujwal Discom Assurance Yojna: UDAY was • Remittances to India are likely to drop by 23 per
launched by the Ministry of Power to help turn cent from $83 billion last year to $64 billion this
around the poor financial situation of state year due to the coronavirus pandemic, which has
discoms. resulted in a global recession
• Unnat Jyoti by Affordable LEDs for All (UJALA): • In 2019, India is estimated to have received $83.1
It aims to promote efficient lighting, enhance billion in remittances from people working
awareness on using efficient equipment which overseas, about 12% of the total expected global
reduce electricity bills and help preserve the inflow.
environment. • International remittances in 2018 (2020 report)
reached $689 billion, out of which India received
The project is spearheaded by the Energy Efficiency $78.6 billion from the 17.5 million living abroad.
Services Limited.
SHARED RESPONSIBILITY, GLOBAL SOLIDARITY
BEE’S STAR RATING PROGRAMME REPORT
• To commemorate its 19th foundation day, Bureau Recently, the United Nations Secretary General,
of Energy Efficiency (BEE), Ministry of Power released a report titled “Shared Responsibility, Global
organized a Stakeholder Consultation to develop a Solidarity: Responding to socio-economic impacts of
vision towards building an energy efficient India. Covid-19”, a call to action, for the immediate health
response required to tackle the many social and
About: economic dimensions of crisis.
• The Star Labeling Programme has been
formulated by Bureau of Energy Efficiency, as About:
part of its mandate, under the Energy • Report includes estimates from a host of UN
Conservation Act, 2001. agencies, with findings such as
• Under this Programme, BEE has covered 24 According to the UN International Labour
appliances till date wherein 10 appliances are Organization (ILO), five to 25 million jobs will
under mandatory regime. be eradicated,
• Recently BEE has expanded the coverage by • UN Conference on Trade and Development
including Energy Efficient “Deep Freezers” and (UNCTAD) projected a 30 to 40 % downward
“Light Commercial Air Conditioners (LCAC)”. pressure on global foreign direct investment
• Through launch of these two new appliances flows while the World Tourism Organization
under voluntary regime, 26 appliances would (UNWTO) saw a 20–30 per cent decline in
now be covered under this programme. international arrivals.
• The Star Labeling Programme for Deep Freezer • The International Telecommunication Union
and LCAC has been launched on a voluntary basis (ITU) anticipated that 3.6 billion people will be
and the energy consumption standards will be offline and the UNESCO forecast that 1.5 billion
effective up to 31st December 2021. students out of school.
• Deep freezer and LCAC are major energy
guzzlers in commercial space, therefore, it is GLOBAL HUNGER INDEX (GHI) 2020
imperative that these two appliances shall be • Annual Report jointly published by Concern
included in the program to save energy and Worldwide and Welthungerhilfe since 2006.
reduce CO2 emission. • India has been ranked at 94 among 107 countries
• With these two products only, a total savings of in the GHI 2020 (India was ranked 102 in 2019).
around 9 Billion units of electricity is expected to • With a score of 27.2, India has a level of hunger
be saved for the country by FY 2030. that is “serious”.
• The Global Hunger Index score is calculated on
WORLD BANK REPORT ON REMITTANCES four indicators —
The World Bank has released a report on the impact 1. Undernourishment;
of the COVID-19 on migration and remittances. 2. Child wasting, that is the share of children
under the age of five who have low weight for
About Important findings: their height, reflecting acute undernutrition;

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3. Child stunting, that is children under the age WORLD ECONOMIC FORUM (WEF)
of five who have low height for their age, • Status: Not-for-profit organization. Under the
reflecting chronic undernutrition; and Swiss Host-State Act, it is recognized as an
4. Child mortality, the mortality rate of children International Institution for Public-Private
under five years. Cooperation.
• HQ: Cologny - Geneva, Switzerland.
“WORLD'S WOMEN 2020: TRENDS AND
• Founded in 1971.
STATISTICS REPORT”
• Mission: Improving the state of the world by
• Released by UN Department of Economic and engaging business, political, academic, and other
Social Affairs. leaders of society to shape global, regional, and
• Report provided a reality-check on the global industry agendas.
status of women 25 years since adoption of Beijing
Declaration and Platform for Action. Davos meet
• Annually, it organizes a meeting at the end of
GLOBAL WEALTH REPORT 2020 January in Davos, a mountain resort in
• Recently, Credit Suisse released it. Graubünden, in the eastern Alps region of
• It provides the most comprehensive and up-to- Switzerland.
date coverage of information on household wealth • The meeting brings together some 2,500 top
worldwide. business leaders, international political
leaders, economists for up to four days to discuss
STATE OF FOOD AND AGRICULTURE 2020 the pressing global issues.
REPORT
• By Food and Agriculture Organization (FAO) Reports published:
• Key highlights of report: Achieving Sustainable 1. Global Competitiveness Report,
Development Goal (SDG) pledges, including the 2. Global Information Technology Report,
zero hunger, is still achievable, but only by 3. Global Gender Gap Report,
ensuring more productive and sustainable use of 4. Global Risks Report,
freshwater and rainwater in agriculture. 5. Global Travel and Tourism Report,
6. Financial Development Report and
GLOBAL ENERGY TRANSITION INDEX 2020 7. Global Enabling Trade Report.
• Energy transition refers to the global energy GLOBAL ENERGY REVIEW 2020: IEA
sector’s shift from fossil-based systems of energy
production and consumption — including oil, International Energy Agency (IEA) has released its
natural gas and coal — to renewable energy Global Energy Review 2020 report.
sources like wind and solar, as well as lithium-ion
batteries. Key point from report:
• India has moved up two places to rank 74th on a • Global energy demand is projected to fall 6% in
global energy transition index released by World 2020.
Economic Forum (WEF). • Renewables were the only source that posted a
growth in demand, driven by larger installed
About Index: capacity and priority dispatch.
• Released by: This annual list is compiled by • Global coal demand was hit the hardest, falling
Geneva-based World Economic Forum (WEF). by almost 8% compared with the first quarter of
• Criteria: It has ranked 115 economies on how 2019.
well they are able to balance energy security and
access with environmental sustainability and About International Energy Agency:
affordability. • IEA is an autonomous intergovernmental
• Results for 2020 show that 75 per cent of organisation.
countries have improved their environmental • Established in 1974, IEA is an autonomous body
sustainability. within the Organization for Economic Co-
operation and Development.
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• Headquarters (Secretariat) in Paris, France. The World Bank has released its Global Economic
• Before becoming a member country of the IEA, a Prospects (GEP) 2020 report.
candidate country must meet several criteria. For
e.g. It must have crude oil or product reserves About GEP Report:
equivalent to 90 days of the previous year’s net • GEP is a World Bank Group flagship report that
imports. examines global economic developments and
• Roles and functions: prospects, with a special focus on emerging
Ø To help its members respond to major oil market and developing economies.
supply disruptions, a role it continues to • It is issued twice a year, in January and June.
fulfill today. • The January edition includes in-depth analyses
Ø Also tracking and analyzing global key of topical policy challenges while the June
energy trends, promoting sound energy edition contains shorter analytical pieces.
policy, and fostering multinational energy
technology cooperation. Key Points:
• India became an associate member of the • On poverty:
International Energy Agency in 2017. Ø Current estimates show that 60 million
• IEA is made up of 30 member countries. people could be pushed into extreme
poverty in 2020.
Reports Published by IEA • Policy choices:
• Global Energy & CO2 Status Report. Ø Policy choices made today — include greater
• World Energy Outlook. debt transparency to invite new
• World Energy Statistics. investment, foster advances in digital
• World Energy Balances. connectivity, and a major expansion of cash
• Energy Technology Perspectives. safety nets for the poor.
Ø The financing and building of productive
WORLD INVESTMENT REPORT 2020 infrastructure are among the hardest-to-
solve development challenges in the post-
The World Investment Report 2020 has been released pandemic recovery.
by the UN Conference on Trade and Development • Emerging Market and Developing Economies
(UNCTAD). (EMDEs):
Ø EMDEs face health crises, restrictions and
About World Investment Report: external shocks like falling trade, tourism
• The World Investment Report has been published and commodity prices, as well as capital
annually since 1991. outflows.
• It covers the latest trends in foreign direct Ø These countries are expected to have a 3-8%
investment around the world. output loss in the short term, based on
studies of previous pandemics, as per the
Key Points: analysis.
• India’s Investment Scenario: India was the
world’s 9th largest recipient of foreign direct FINANCIAL SECRECY INDEX
investments (FDI) in 2019 with $51 billion in
• By Tax Justice Network, a U.K.-based financial
foreign investment.
advocacy group
• In 2018, India was the world’s 12th largest
• India has managed to reduce its contribution to
recipient with $42 billion foreign investment.
global financial secrecy, with its rank falling from
• Global Scenario: Global FDI flows are forecast to
32 on the 2018 index to 47 in 2020, (but this is
decrease by up to 40% in 2020 from their 2019
partly because the new edition of the index covers
value of $1.54 trillion. This would bring FDI below more countries than it did two years ago).
$1 trillion for the first time since 2005.
R&D STATISTICS AND INDICATORS 2019-20
GLOBAL ECONOMIC PROSPECTS (GEP) 2020
REPORT
REPORT

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• It is based on the national S&T survey 2018 (BRSR)’ has been recommended to better reflect
brought out by the National Science and the intent and scope of reporting on non-financial
Technology Management Information (NSTMIS), parameters.
Department of Science and Technology (DST). • The BRSR would be integrated with the MCA 21
• The report captures the R&D landscape of the portal.
country through various Input-Output S&T • The information captured through BRSR filings
Indicators in the form of Tables and graphs. should be used to develop a Business
• India’s gross expenditure in R&D has tripled Responsibility-Sustainability Index for
between 2008 & 2018.India spent 0.7% of its GDP companies.
on R&D in 2017-18. • The top 1000 listed companies are to undertake
this reporting mandatorily.
BUSINESS CONFIDENCE INDEX • The reporting requirement may be extended by
• National Council of Applied Economic MCA to unlisted companies above specified
Research (NCAER) has released Business thresholds of turnover and/or paid-up capital.
Confidence Index (BCI).
EXPORT PREPAREDNESS INDEX 2020
• It tracks the business sentiments of around 600
Indian companies to compute the composite NITI Aayog in partnership with the Institute of
index. Competitiveness has released the Export
Preparedness Index (EPI) 2020.

NCAER
About EPI:
• The National Council of Applied Economic
• It is the first report which examines export
Research is a Delhi based think tank that was
established in 1956. preparedness and performance of Indian
states and intends to identify challenges and
• Formation: The TATA Foundation and other
opportunities; enhance the effectiveness of
premier organizations came together to
government policies and encourage a facilitative
form the think tank with the support of
regulatory framework.
Government of India.
• Parameters: The index ranked states on the basis
• Aim: The aim of the body is to give support to
of 4 pillars a) Policy b) Business Ecosystem c)
both government and private sector
Export Ecosystem and d) Export Performance.
economic researches.
• Since 1991, the council is tracking the GLOBAL INDICES TO DRIVE REFORMS AND
business confidence in the country on a GROWTH (GIRG) EXERCISE
quarterly basis.
• The objective of the exercise is to fulfil the need to
BUSINESS RESPONSIBILITY REPORTING (BRR) measure and monitor India’s performance on
various important social and economic
Ministry of Corporate Affairs (MCA) has released a parameters.
report of the Committee on Business Responsibility • NITI Aayog as the nodal agency has been
Reporting (BRR) under the chairmanship of assigned the responsibility of leveraging the
Gyaneshwar Kumar Singh. monitoring mechanism of the Global
About BRR Multidimensional Poverty Index (MPI) to drive
• It is a disclosure of adoption of responsible reforms.
business practices by a listed company to all its • As the Nodal agency for the MPI, NITI Aayog has
stakeholders. constituted a Multidimensional Poverty Index
• Business Responsibility Reporting is applicable Coordination Committee (MPICC).
to all types of companies including
manufacturing, services etc. BUSINESS REFORM ACTION PLAN (BRAP)
RANKING OF STATES
Key Recommendations:
• 4th edition announced recently by the
• A new reporting framework called the ‘Business
Department of Industrial Promotion and
Responsibility and Sustainability Report
Internal Trade (DPIIT), Ministry of Commerce.
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• One “major change” in the current rankings is the Recently, the EASE (Enhanced Access and Service
government’s decision to link the state’s Excellence) 2.0 Banking Reforms Index on
performance “exclusively” to user feedback. performance of Public Sector Banks (PSB) from
• The larger objective of attracting investments and March 2018-2020 was released and best performing
increasing Ease of Doing Business in each State banks on EASE were felicitated.
was sought to be achieved by introducing an Ministry of Finance & Corporate Affairs released
element of healthy competition through a system the results of the EASE Banking Reforms Index 2.0.
of ranking states based on performance in
implementation of BRAP. About EASE Banking Reforms Index:
• EASE stands for ‘Enhanced Access and Service
RANKING OF STATES ON SUPPORT TO STARTUP Excellence’. It was launched in 2018 with the
ECOSYSTEMS aim to institutionalize clean and smart banking.
• 2nd Edition launched recently • Prepared by: The index is prepared by the Indian
• Conducted by the Department for Promotion of Banking Association (IBA) and is commissioned
Industry and Internal Trade (DPIIT) by the Finance Ministry.
• The objective is to foster competitiveness and • EASE 2.0 further progresses the reforms built in
propel States and Union Territories to work EASE 1.0 by making the reforms journey
proactively towards uplifting the startup irreversible, strengthening processes and systems
ecosystem. and driving outcomes.
• It has 7 broad reform area, consisting of 30 action • Parameters: It ranks Public Sector Banks across
points ranging from Institutional Support, Easing six themes namely:
Compliances, Relaxation in Public Procurement 1. Responsible banking
norms, Incubation support, Seed Funding Support, 2. Customer Responsiveness
Venture Funding Support, and Awareness & 3. Credit offtake
Outreach. 4. PSBs Udyamitra for MSMEs
• India is the 3rd largest startup ecosystem in the 5. Deepening Financial Inclusion and Digitisation
world and is home to 32 unicorns (startups with 6. Ensuring Outcomes- Governance/HR.
valuation greater than $1 billion).
STATES STARTUP RANKING 2019
GLOBAL INNOVATION INDEX 2020 The Results of the second edition of “States Startup
The Global Innovation Index (GII), 2020 has been Ranking 2019” has been released by the Minister of
released. Commerce & Industry.

About GII 2020: About:
• It is an annual ranking that quantifies the state • The exercise was conducted by the Department
of national innovation ecosystem across for Promotion of Industry and Internal Trade
countries. In 2020, it has ranked 131 countries. (DPIIT).
• The index is a leading reference for measuring an • Objective: To foster competitiveness and
economy’s innovation performance. propel States and Union Territories to work
• Published by: The index has been released jointly proactively towards uplifting the startup
by the World Intellectual Property ecosystem.
Organization (WIPO), Cornell University and • Parameters: The states were ranked according to
INSEAD Business School. performances across 7 broad reform areas
• The metrics include institutions, human capital consisting of 30 action points ranging from:
and research, infrastructure, market 1. Institutional support
sophistication and business sophistication, 2. Easing compliances
knowledge and technology outputs and 3. Relaxation in public procurement norms
creative outputs. 4. Incubation centers
5. Seed funding
• Theme for 2020: Who Will Finance Innovation?
6. Venture funding
EASE 2.0 BANKING REFORMS INDEX 7. Awareness and outreach.

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• Coverage: A total of 22 states and 3 Union • It consists of the knowledge, skills, and health that
Territories participated in the exercise, including people accumulate over their lives, enabling them
four states from North East India. to realize their potential as productive members of
society.
GLOBAL ECONOMIC FREEDOM INDEX 2020 • It was launched in 2018 as part of the Human
The Global Economic Freedom Index 2020 has been Capital Project (HCP), a global effort to
released as a part of the Economic Freedom of the accelerate progress towards a world where all
World: 2020 report by the Fraser Institute in children can achieve their full potential.
Canada. In India, the report was co-published by • Aim: It measures how much capital each country
Delhi-based Centre for Civil Society. loses through lack of education and health. The
Index ranges between 0 and 1 with 1 meaning
About: maximum potential is reached.
• The report measures the ‘economic freedom’ or • Methodology: The Index is based on the following
the ability of individuals to make their own three pillars:
economic decisions in a country, by analyzing
policies and institutions of these countries. Survival • Share of children surviving
• Indicators: It ranks countries by looking at past the age of 5.
indicators like: • Quantity of education
1. Regulation, (Expected years of schooling
2. Freedom to trade internationally School by age 18)
3. Size of government • Quality of education
4. Property rights (Harmonized test scores).
5. Government spending • Adult survival rates (Share of
6. Taxation. 15-year-olds who survive
Health until age 60)
RAJIV MEHRISHI PANEL • Healthy growth among
• Mandate: It will measure the impact on the children (Stunting rates of
national economy and financial stability of children under 5).
waiving of interest and Covid-19 related
moratorium. • HCI 2020: It measures health and education data
• It will also give suggestions to mitigate financial for 174 countries – covering 98% of the
constraints of various sections of society in this world’s population – up to March 2020.
respect and measures to be adopted in this regard.
Key Takeaways:
SPECIAL REPORT ON SUSTAINABLE RECOVERY • Topped by: The index has been topped by
• Recently International Energy Agency (IEA), in Singapore. It was followed by Hong Kong, Japan,
collaboration with NITI Aayog, presented it. Korea and Canada.
• It is a part of IEA’s flagship World Energy • India: It has been ranked at the 116th position in
Outlook series. the index. However, India’s score has increased to
• The report proposes a number of actions that 0.49 from 0.44 in 2018.
could be taken over the next three years to
WORLD RISK INDEX 2020
revitalize economies and boost employment while
making energy systems cleaner and more • It is part of the World Risk Report 2020
resilient. released by the United Nations University
Institute for Environment and Human Security
HUMAN CAPITAL INDEX 2020 (UNU-EHS), Bundnis Entwicklung Hilft and the
Recently, the World Bank released the Human Capital University of Stuttgart in Germany.
Index (HCI) report for 2020. • Released annually since 2011.
• It is calculated on a country-by-country basis,
About: through the multiplication of exposure and

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vulnerability and describes the disaster risk for health and transport by workers has been given a
various countries and regions. sizable jump in weight from 23% earlier to 30%
• A comparison with the WRI 2019, shows that all now.
south Asian countries have slipped on their ability
to adapt to the reality of climate emergency. Consumer Price Index (CPI):
• Among continents, Oceania is at the highest risk, • It measures changes in the price level of a
followed by Africa and the Americas. market basket of consumer goods and
• According to the World Risk Index (WRI) 2020, services purchased by households.
India is ‘poorly prepared’ to deal with ‘climate • Released by: CPI data is released monthly by
reality’, due to which it is vulnerable to extreme the Central Statistics Office (CSO) which
natural. functions under the Ministry of Statistics and
Programme Implementation.
NOBEL PRIZE IN ECONOMICS
• There are four types of CPI:
The 2020 Nobel Prize in Economic Sciences has been 1. CPI-IW (Industrial Worker),
awarded to Paul R. Milgrom and Robert B. Wilson 2. CPI-UNME (Urban Non-Manual
“for improvements to auction theory and Employees),
inventions of new auction formats.”. 3. CPI-AL (Agricultural Labourers)
4. CPI-RL (Rural Labourers)
About:
• Auction theory studies how auctions are designed, Determining inflation: RBI has adopted CPI as the
what rules govern them, how bidders behave and key measure for determining inflation situation of
what outcomes are achieved. Indian economy on the recommendation of Urjit
• The oldest form of auction is the auction of a Patel Committee.
bankrupt person’s property to pay off his
creditors. This simple design of such an auction is
the highest open bidder getting the property (or Consumer Price Index-Industrial Workers
(CPI-IW):
the commodity in question).
• The CPI-IW is mainly used for determining
CONSUMER PRICE INDEX FOR INDUSTRIAL dearness allowance (DA) paid to central/state
WORKERS (CPI-IW) government employees and workers in the
industrial sectors besides measuring inflation
The labour ministry has revised the base year of in retail prices, fixation and revision of
the Consumer Price Index-Industrial Workers minimum wages in scheduled employments
(CPI-IW) from 2001 to 2016, giving more weight to • CPI-IW is compiled and maintained by the
spending on housing, education and health in inflation Labour Bureau, an attached office of the
index calculation. Ministry of Labour & Employment.

About:
• Changing the base year reflects the changing INDEX OF EIGHT CORE SECTOR INDUSTRIES
consumption pattern, giving more weightage to Recently, the Office of Economic Adviser within the
spending on health, education, recreation and Department for Promotion of Industry and Internal
other miscellaneous expenses, while reducing the Trade released the Index of Eight Core Industries (ICI)
weight of food and beverages. for September 2020.

Changes: About Core Sector Industries:
• Following the change in base year, the index will • The eight core sector industries include coal,
give 39% weight to food and beverage crude oil, natural gas, refinery products,
consumption of workers now as against 46.2% fertilizer, steel, cement and electricity.
earlier. In contrast, spending on housing will get • Weightage: The eight core industries comprise
almost 17% weight as against 15.2% earlier. nearly 40.27% of the weight of items included
• Among consumption categories, a segment in the Index of Industrial Production (IIP).
comprising spending on heads like education,

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• The eight Core Industries in decreasing order of encouraging technology
their weightage: Refinery Products > Electricity diffusion.
> Steel > Coal > Crude Oil > Natural Gas > Negative • Distorting trade, diverting
Cement > Fertilizers. spillovers: investment or promoting
unfair competition with the
Significance: winner-takes-all
• The eight industries are the essential “basic” characteristics of certain
and/or “intermediate” ingredient in the digital industries.
functioning of the broader economy.
• The mapping of health of eight core industries ENERGY EFFICIENCY REPORT 2020
provides a fundamental understanding of the state • International Energy Agency (IEA) has released
of the economy. the annual Energy Efficiency Report 2020.
• The slow pace of global progress on energy
PURCHASING MANAGER INDEX (PMI)
efficiency is set to slow further in 2020 as a result
Recently India’s PMI rose from 56.8 in September to of the economic impacts of the COVID-19 crisis.
58.9 in October 2020.
International Energy Agency (IEA)
About PMI: • The IEA is an autonomous intergovernmental
• Purchasing Managers Index (PMI) is an indicator organisation which works to ensure reliable,
of business activity - both in the manufacturing affordable and clean energy.
and services sectors. • Established: It was established in the wake of
• It is calculated separately for the 1973 (set up in 1974) oil crisis after the OPEC
manufacturing and services sectors and then a cartel had shocked the world with a steep increase
composite index is also constructed. in oil prices.
• The PMI summarizes whether market conditions • Headquarters: Paris, France.
as viewed by purchasing managers are • Members: It has 30 member countries and eight
expanding, neutral, or contracting. association countries. India became an associate
• Private sector survey (generally released by member in2017.
Nikkei India). PMI measures activity at the • Other Report: World Energy Outlook report is
purchasing or input stage. released by IEA annually.
• It do not measure informal sector activity.
• PMI Data means the following: INVESTMENT PROMOTION AWARD
Ø The headline PMI is a number from 0 to 100.
United Nations Conference on Trade and
Ø PMI above 50 represents an expansion when
Development (UNCTAD) has declared Invest India as
compared to the previous month;
the winner of the United Nations Investment
Ø PMI under 50 represents a contraction, and
Promotion Award.
Ø A reading at 50 indicates no change.

WORLD TRADE REPORT About
• The Award recognizes and celebrates the
World Trade Organization (WTO) has released the outstanding achievements of the World’s best-
report titled ‘World Trade Report 2020: Government practice investment promotion agencies.
Policies to Promote Innovation in the Digital Age’. • The evaluation was based on UNCTAD’s
assessment of work undertaken by 180 national
About: Investment Promotion Agencies (IPAs) across the
• It is an annual report published since 2003 by world.
the World Trade Organization to deepen • IPAs response to the pandemic became the basis
understanding about trends in trade, trade policy for the evaluation of the 2020 United Nations
issues, and the multilateral trading system (MTS). Investment Promotion Award.
• Germany, South Korea and Singapore have been
Positive • Generating growth, creating some of the past winners of the award.
spillovers: new markets and
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Invest India: About
• It was set up in 2009 as a non-profit venture • It is the country’s first comprehensive
under the Department for Promotion of benchmarking tool for employers to measure
Industry and Internal Trade, Ministry of their progress on LGBT+ inclusion at the
Commerce and Industry. workplace.
• It is the National Investment Promotion and • Launched by: It was launched by non-profit
Facilitation Agency of India and acts as the Keshav Suri Foundation, partnered with Pride
first point of reference for investors in India. Circle, Stonewall UK and FICCI.
• Parameters: The index measures nine areas:

policies and benefits, employee lifecycle,
Business Immunity Platform: employee network group, allies and role models,
• It was launched by Invest India to provide a senior leadership, monitoring, procurement,
comprehensive resource to help businesses community engagement and additional work.
and investors get real-time updates on • Winners: Twenty-one firms won under the gold
India’s active response to COVID-19 category while 18 were placed under silver and
(Coronavirus). 13 got bronze.

United Nations Conference on Trade and FINANCIAL STABILITY REPORT
Development (UNCTAD): • Released by the RBI, stress tests show that the
• UNCTAD is a permanent intergovernmental Gross Non-Performing Assets (GNPA) ratio of
body established by the United Nations General banks may increase from 7.5% in September 2020
Assembly in 1964. to 13.5% by September 2021 under the baseline
• It is part of the UN Secretariat. scenario.
• It reports to the UN General Assembly and the • If the macroeconomic environment worsens into a
Economic and Social Council, but has its own severe stress scenario, the GNPA ratio may
membership, leadership, and budget. escalate to 14.8%.
• It is also a part of the United Nations
Development Group. INDIAN TELECOM SERVICES PERFORMANCE
• It is a central agency that monitors INDICATOR REPORT
performance of Investment promotion Agencies • Released by the Telecom Regulatory Authority of
(IPAs) and identifies global best practices. India (TRAI)
• Objectives and roles: It support developing • Report provides broad perspective of Telecom
countries to access the benefits of a globalized Services in India.
economy more fairly and effectively. Along with • Compiled mainly based on the information
other UN departments and agencies, it also furnished by the Service Providers.
measures the progress made in the Sustainable
Development Goals, as set out in Agenda 2030. ECONOMIC OUTLOOK SURVEY
• Headquartered in Geneva, Switzerland.
• Released by FICCI.
• Some of the reports published by it are:
• GDP to contract 8 % in FY21.
1. Trade and Development Report
• Annual median growth forecast by the industry
2. World Investment Report
body is based on response from leading
3. Global Investment Trend Monitor Report
economists representing industry, banking and
4. The Least Developed Countries Report
financial services sectors.
5. Information and Economy Report
6. Technology and Innovation Report HUMAN DEVELOPMENT INDEX (HDI) 2020
7. Commodities and Development Report.
India dropped two ranks in the United Nations’
INDIA WORKPLACE EQUALITY INDEX Human Development Index this year, standing at 131
out of 189 countries.
India’s 1st LGBT+ workplace equality index has been

launched. History: Pakistani economist Mahbub-ul-Haq
created HDI in 1990 which was further used to
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measure the country’s development by the United The other indices that form the part of the
Nations Development Program (UNDP). Report are:
1. Inequality-adjusted Human Development Index
About HDI: (IHDI),
• Released by: United Nations Development 2. Gender Development Index (GDI),
Programme (UNDP). 3. Gender Inequality Index (GII) and
• HDI is a statistical tool used to measure a 4. Multidimensional Poverty Index (MPI).
country’s overall achievement in its social and
economic dimensions. “BEATEN OR BROKEN? INFORMALITY AND
• Every year UNDP ranks countries based on the COVID-19 IN SOUTH ASIA” REPORT
HDI report released in their annual report. • Released by World Bank.
• It is one of the best tools to keep track of the level • It analyses the impact of school closures because
of development of a country, as it combines all of Covid on children.
major social and economic indicators that are • South Asia is set to plunge into its worst-ever
responsible for economic development. recession in 2020 as the devastating impacts of
• Various indicators under HDI: Calculation of the COVID-19 on the region’s economies linger.
index combines four major indicators:
1. Life expectancy for health, “WOMEN AND TRADE: THE ROLE OF TRADE IN
2. Expected years of schooling, PROMOTING WOMEN’S EQUALITY” REPORT
3. Mean of years of schooling for education and • Jointly published by World Bank Group and the
4. GNI per capita for the standard of living. World Trade Organization (WTO).

• This report marks the first major effort to quantify
how women are affected by trade through the use
of a new gender-disaggregated labor dataset.
POVERTY AND SHARED PROSPERITY REPORT

2020
• Biennial Report published by World Bank
group.
• It provides the latest and most accurate estimates
on trends in global poverty and shared prosperity.
• According to the report “new poor” will be more
For the first time: PHDI urban poor and be more engaged in informal
• This metric is called- the Planetary Pressures- services and manufacturing and less in
adjusted HDI, or PHDI. agriculture.
• For the first time, the United Nations Development
Programme introduced a new metric to reflect WORLD FOOD PRICE INDEX 2020: FAO
the impact caused by each country’s per-capita • The Food and Agriculture Organization’s (FAO)
carbon emissions and its material footprint, food price index averaged 107.5 points in
which measures the amount of fossil fuels, metals December 2020, up 2.3 points from November
and other resources used to make the goods and 2020.
services it consumes. • It was introduced in 1996 as a public good to
help in monitoring developments in the global
India’s performance: agricultural commodity markets.
• India dropped two ranks, standing at 131 out of • The FAO Food Price Index (FFPI) is a measure of
189 countries. the monthly change in international prices of a
• If the Index were adjusted to assess the basket of food commodities.
planetary pressures caused by each nation’s • It measures changes for a basket of cereals,
development, India would move up eight places oilseeds, dairy products, meat and sugar.
in the ranking, according to the report.
•
Base Period: 2014-16.

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Food and Agriculture Organization: 2. Identify innovation related opportunities and
• FAO is a specialized agency of the United challenges for the states.
Nations that leads international efforts to defeat 3. Assist in modifying governmental policies to
hunger. foster innovation.
• Headquartered in Rome, Italy. • Parameters: The index measures innovation
• Founded in 16 October 1945. inputs through ‘Enablers’ and innovation output
• It conducts research, provides technical as ‘Performance.’
assistance to projects, operates educational • Enablers: There are Five Enabler pillars that
and training programs, and collects data on capture elements of the state economy. They act as
agricultural output, production, and development. inputs for the innovation environment. They are:
• Composed of 197 member states, the FAO is Human Capital, Investment, Knowledge
governed by a biennial conference representing Workers, Business Environment, Safety and
each member country and the European Union, Legal Environment.
which elects a 49-member executive council. • Performance: The two Performance pillars that
• The Director-General serves as the chief depict the performance are: Knowledge Output
administrative officer. and Knowledge Diffusion.

Initiatives Taken by FAO: Performance of various states:
• Globally Important Agricultural Heritage Systems • Major States: Karnataka has continued to occupy
(GIAHS). the top position followed by Maharashtra, Tamil
• Monitors the Desert Locust situation throughout Nadu, Telangana, Kerala, Haryana, Andhra
the world. Pradesh, Gujarat, Uttar Pradesh and Punjab.
• UT and City–States: Delhi has retained its first
• The Codex Alimentarius Commission or CAC is
the body responsible for all matters regarding the rank in this category followed by Chandigarh.
implementation of the Joint FAO/WHO Food • North-Eastern/Hill States category: Himachal
Standards Programme. Pradesh has topped the index in this category
• The International Treaty on Plant Genetic followed by Uttarakhand.
Resources for Food and Agriculture was WOMEN, BUSINESS & THE LAW INDEX
adopted by the Thirty-First Session of the
Conference of the Food and Agriculture • Index released by World Bank to analyze the
Organization in 2001. impact of laws and regulations (legal gender
equality) on women’s economic opportunity
INDIA INNOVATION INDEX 2020 (entrepreneurship and employment) in 190
Recently, India Innovation Index Report 2020 was economies.
released by NITI Aayog in which Karnataka • India was ranked 117th and scored 74.4 out of
retained its top position in the major States 100.
category.
GLOBAL RISK REPORT

About: • Released by World Economic Forum (WEF).
• The first edition of the index was launched in • It is part of the Global Risks Initiative which
October 2019. brings stakeholders together to develop
• Index is on the lines of the Global Innovation sustainable, integrated solutions.
Index (GII) • A “global risk” is defined as an uncertain event or
• The Index is aimed at providing an effective tool condition that, if it occurs, can cause significant
to track the state of innovation at both the negative impact for several countries or industries
national and the state level. within the next 10 years.
• The index intends to accomplish the following
three functions: GLOBAL TALENT COMPETITIVE INDEX (GTCI)
1. Rank all States and Union Territories based on 2020
their index score. • Compiled by INSEAD in collaboration with Addeco
and Google.
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• Launched for the first time in 2013, GTCI is annual • The indicator measures the performance of
benchmarking report that measures the ability countries across 10 different dimensions which
of countries to compete for talent. are: starting a business, dealing with construction
• Theme of this year report is “Global Talent in the permits, getting electricity, registering property,
Age of Artificial Intelligence”. getting credit, protecting minority investors,
• India has climbed eight places to 72nd rank in the paying taxes, trading across borders, enforcing
2020. In the BRICS grouping, China was ranked contracts, and resolving insolvency.
42nd, Russia (48th), South Africa (70th) and Brazil
at 80th position. “IMPACT OF ENERGY EFFICIENCY MEASURES FOR
• Switzerland topped the index THE YEAR 2018-19” REPORT
• Released by Bureau of Energy Efficiency (BEE)
GLOBAL SOCIAL MOBILITY INDEX with overall objective of the study is to assess the
• 1st ever released by WEF, assesses the 82 impact of all the energy efficiency schemes/
economies on “10 pillars” spread across the programmes in India in terms of total energy
following five key dimensions: Health, Education, saved and reduction in the amount of CO2
Technology, Work and Protection & Institutions. emissions in 2018-19.
• Denmark holds the first place.
• India ranks 76th out of 82 economies. NIRF INDIA RANKINGS 2020/ “INDIA RANKINGS
2020”
GREEN BOND IMPACT REPORT 2019 • Ministry of Human Resource Development
• Released by World Bank (MHRD) has taken this important initiative of
• Renewable Energy & Energy Efficiency and Clean creating a National Institutional Ranking
Transportation made up 66% of all Green Bond Framework (NIRF), which has been used since
commitments by World Bank. 2015.
• Broad Parameters: Teaching, Learning and
GREEN BONDS SCENARIO IN INDIA Resources, Research and Professional Practices,
Graduation Outcomes, Outreach and Inclusivity
• India’s First Green Bond was issued by Yes
and Peer Perception.
Bank Ltd in 2015.
• 90% of the parameters in NIRF are completely
• In 2016, India became 2nd country (after China) to
objective and fact-based, while only 10% is based
provide national level guidelines for Green bonds,
on the subjective parameter of perception.
issued by SEBI.
• According to the 2019-20 Economic Survey, India GLOBAL MULTIDIMENSIONAL POVERTY INDEX
has the second largest green bond market. 2020
• India’s first listed Green Bond on ‘India INX’ issued
by Indian Railway Finance Corporation. • Released by the United Nations Development
• FICCI and Climate Bonds Initiative (CBI) Programme (UNDP) and the Oxford Poverty
established the Indian Green Bonds Council in and Human Development Initiative (OPHI).
2016 having representation from banking, • MPI is the product of the incidence of poverty
finance, insurance, public and private sector etc. to (proportion of poor people) and the intensity of
propose solutions towards the development of a poverty (average deprivation score of poor
green bonds market in India. people) and is therefore sensitive to changes in
• CBI is an international organisation working to both components.
mobilise bond market for climate change • The MPI ranges from 0 to 1 and higher values
solutions. imply higher poverty.
EASE OF DOING BUSINESS RANKINGS SUSTAINABLE OCEAN ECONOMY FOR 2050

REPORT
• Given by World Bank.
• India climbs 14 notches in ease of doing business • Recently released by High Level panel for
ranking - Moves to 63rd slot from 77 last year, Sustainable Economy (Ocean Panel).
among 190 nation's. • High Level Panel for a sustainable Ocean Economy
commissioned this report to examine the global
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net benefit of implementing sustainable, ocean- 13. IMPORTANT CONCEPTS IN
based interventions over a 30-year period (2020-
2050).
ECONOMY

GREENFIELD AND BROWNFIELD PROJECTS
High Level Panel For Sustainable Economy (Ocean
Panel): Finance ministry constitutes a task force under the
• It is a unique initiative of 14 serving world leaders chairmanship of Secretary (DEA) for drawing up
building momentum towards a sustainable ocean National Infrastructure Pipeline of Rs 100 Lakh Crore
economy. from FY 2019-20 to FY 2024-25.
• India is not a member.
• It is supported by the UN Secretary-General's About:
Special Envoy for the Ocean. • The National Infrastructure Pipeline would
• It was established in 2018. include greenfield and brownfield projects
costing above Rs 100 crore each.
SDG INDEX 2020 • The Task Force will also enable robust marketing
of the pipeline of projects requiring private
• It was prepared by teams of independent experts
investment through the India Investment Grid
at the Sustainable Development Solutions
(IIG), National Investment & Infrastructure
Network (SDSN) and the Bertelsmann Stiftung
Fund (NIIF), etc.
• Six broad transformations: Education and skills,

Health and wellbeing, Clean energy and industry,
Greenfield and Brownfield projects:
Sustainable land use, Sustainable cities, Digital
• Greenfield and brownfield investments are two
technologies.
types of foreign direct investment.
• Sweden is placed at the top of the index.
• With green field investing, a company will build its
• India stands at the 117th position.
own, brand new facilities from the ground up.
DIGITAL PAYMENTS INDEX (DPI) • Brownfield investment happens when a company
purchases or leases an existing facility.
• Reserve Bank of India (RBI) has constructed a • In a greenfield investment, parent company
composite Digital Payments Index (DPI) to opens a subsidiary in another country. Instead
capture the extent of digitisation of payments of buying an existing facility in that country, the
across the country company begins a new venture by constructing
• March 2018 is base period for index. new facilities in that country.
• It will be published on RBI’s website on a semi- • Brownfield investments, an entity purchases
annual basis from March 2021. or leases an existing facility to begin new
• 5 broad parameters: production.
1. Payment Enablers (weight 25%)
2. Payment Infrastructure – Demand-side factors India Investment Grid
(10%) • India Investment Grid (IIG) is an initiative of
3. Payment Infrastructure – Supply-side factors Department for Promotion of Industry & Internal
(15%) Trade (DPIIT) Ministry of Commerce,
4. Payment Performance (45%) Government of India and Invest India, the
5. Consumer Centricity (5%). National Investment Promotion and
Facilitation Agency.
STUDENT NOTES: • The India Investment Grid (IIG) is a home for
investment opportunities across India which
works on a single interactive platform.
• This was formed as an initiative to enhance the

business platform in India.

EARNEST MONEY DEPOSIT (EMD)

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• Earnest Money deposit is the amount a buyer Ø Net profit to net worth
pays to show that his interest in a said Ø Earnings per share
property is genuine. Ø Profit before interest and taxes to turnover
• The money is often paid once a verbal acceptance Ø Profit before depreciation, interest and taxes
upon an offer has been made. to capital employed
• The Earnest Money deposit is also known as a Ø Manpower cost to total cost of
binder, token money or good-faith deposit. production/services
Ø Inter-Sectoral performance

MAHARATNA, NAVRATNA AND MINIRATNA Miniratna
STATUS • Those CPSEs which fulfill these two criteria are
Government of India has accorded ‘Maharatna’ status eligible to be considered for grant of Miniratna
to public sector undertaking’s (PSU’s) Hindustan status.
Petroleum Corporation Limited (HPCL) and Power • The CPSEs which have made profits in the last 3
Grid Corporation. years continuously
• The CPSEs which have positive net worth.
About: • As of 2019, there are 10 Maharatnas, 14
• Status of Maharatna, Navaratna and Miniratna is Navratnas and 73 Miniratnas.
given to the Central Public Sector Enterprises • There are nearly 300 CPSEs (central public sector
(CPSE) in India. enterprises) in total.
• The Department of Public Enterprises under
Ministry of Heavy Industries & Public Enterprises SHARED ECONOMY
is the nodal department for all the Central Public The shared economy in India is estimated to be an
Sector Enterprises (CPSEs). about $2 billion industry by the end of the current
• It makes policies and guidelines for the year, according to a recent report by Maple Capital
performance evaluation and improvement of the Advisors.
PSUs/ CPSEs.
About
Eligibility Criteria: • The sharing economy, also known as
collaborative consumption or peer-to-peer-
Maharatna based sharing, is a concept that highlights the
• Having Navratna status. ability of individuals to rent or borrow goods
• Listed on Indian stock exchange with minimum rather than buy and own them.
prescribed public shareholding under SEBI • The ‘shared economy’ includes segments such as
regulations. co-working (Awfis, WeWork India), co-living
• Average annual turnover of more than Rs. 25,000 (Stanza Living, OYO Life, Oxford Caps), shared
crore, during the last 3 years. mobility (Uber, Ola, Shuttl) and furniture rental
• Average annual net worth of more than Rs. 15,000 (Furlenco, Rentomojo.)
crore, during the last 3 years.
• Average annual net profit after tax of more than TERMINOLOGIES WITH RESPECT TO RECESSION
Rs. 5,000 crore, during the last 3 years. • According to recent bulletin of Reserve Bank of
• Should have significant global India on state of economy there is a contraction
presence/international operations. for a second consecutive quarter (Quarter 2).
• The contraction of Q2 is crucial because it implies
Navaratna that India has entered a “technical recession” in
• A CPSE which falls under the Miniratna (Category the first half of 2020-21 for the first time in its
– I and Schedule ‘A’ CPSEs), has obtained rating of history.
‘very good’ or ‘excellent’ in 3 of the last 5 years.
• A CPSE which has composite score of 60 or above Expansionary When the overall output of goods
in the 6 selected performance parameters, Phase and services (measured by the
namely; GDP) increases from one quarter

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(or month) to another, the • It leads to a scenario where any additional money
economy is said to be in an supply that is generated in the economy get
expansionary phase. channelled towards savings rather than
Recessionary When the overall output of goods investment thus rendering the economy to remain
Phase and services (measured by the at same liquidity level.
GDP) decreases from one quarter
(or month) to another, the
economy is said to be in a
recessionary phase. In a
recessionary phase, the GDP
contracts from one quarter to
another.
Business Cycle In an economy, the expansionary
phase and recessionary phase
together are called a “business
cycle”.
TECHNICAL RECESSION LIQUIDITY TRAP

The Reserve Bank of India has said that India has • Liquidity trap is a contradictory economic
entered a “technical recession” in the first half of situation in which interest rates are very low
2020-21— for the first time in its history. and savings rates are high, rendering monetary
Technical Recession: policy ineffective.
• Technical Recession - The commentators often • It leads to a scenario where any additional money
consider a recession to be in progress when real supply that is generated in the economy get
GDP has declined for at least two consecutive channeled towards savings rather than
quarters in order to get around the empirical investment.
technicalities associated with the recession.
• It is most often caused by a one-off event (in this K-SHAPED ECONOMIC RECOVERY
case, the COVID-19 pandemic and the lockdowns The prospects of a K-shaped recovery from COVID are
imposed to combat it) and is generally shorter in increasing both in India and across the world. Various
duration. Shapes of economic recovery:
• Z-shaped recovery: most-optimistic scenario in
Difference between Technical Recession and which the economy quickly rises after a crash.
Recession: • V-shaped recovery: economy quickly recoups
The technical recession is mainly used to capture the lost ground and gets back to the normal growth
trend in GDP but the Recession encompasses an trend-line.
appreciably more broad-based decline in economic • U-shaped recovery: economy, after falling,
activity that covers several economic variables struggles and muddles around a low growth rate
including employment, household and corporate for some time, before rising gradually to usual
incomes and sales at businesses. levels.
• W-shaped recovery: growth falls and rises, but
LIQUIDITY TRAP falls again before recovering
Recently, the IMF economist Gita Gopinath stated that • yet again, thus forming a W-like chart.
the global economy may be heading towards a • L-shaped recovery: worst-case scenario, in
liquidity trap. which growth after falling, stagnates at low levels
and does not recover for a long, long time.
About liquidity trap: • J-shaped recovery = unrealistic scenario, growth
• A liquidity trap is a contradictory economic rises sharply from the lows much higher than the
situation in which interest rates are very low and trend-line and stays there.
savings rates are high, rendering monetary policy
ineffective. SECURED OVERNIGHT FINANCING RATE (SOFR)

126

• Secured Overnight Financing Rate (SOFR) is a suggest inverse relationship between inflation
secured interbank overnight interest rate. and unemployment.
• It is a replacement for USD LIBOR (London Inter- • It was the stagflation in the United States in the
bank Offered Rate) that may be phased out end- 1970s, caused by rising oil prices after the
2021. Organization of the Petroleum Exporting
• The overnight rate is generally the interest rate Countries cut supplies abruptly, which first led
that large banks use to borrow and lend from many to question the validity of the Phillips Curve.
one another in the overnight market.
STUDENTS NOTES:
Why SOFR?
• Global regulators decided to move away from the
Libor, a vital part of the financial system after it
was revealed in 2012 that banks around the world
manipulated it.
• It also didn’t help that volume underlying the
benchmark dried up.
• K. regulators set the deadline at 2021 for
financial firms and investors to transition away
from the Libor.

GINI COEFFICIENT

• A common measure of inequality, of cash

holding in India is as high as 0.71, where 0

indicates perfect equality and 1 indicates perfect

inequality.

• Other measurements of inequality such as the

Atkinson Index and the Generalised Entropy

Index.

HELICOPTER MONEY

• American economist Milton Friedman coined
this term.
• This is an unconventional monetary policy tool
aimed at bringing a flagging economy back on
track.
• It involves printing large sums of money and
distributing it to the public.
• It basically denotes a helicopter dropping
money from the sky.

STAGFLATION
• Stagflation is an economic scenario where an
economy faced both high inflation and low growth
(and high unemployment).
• Conventional view among economists is that there
is an inverse relationship between economic
growth and inflation.
• The idea was first proposed by New Zealand
economist William Phillips, after whom the
“Phillips Curve” is named, based on statistical
studies of inflation and unemployment and
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14. MISCELLANEOUS conservation aimed at reducing excessive
dependence of the country on oil requirement.
DRAFT NATIONAL STATISTICAL COMMISSION
HALLMARKING MADE MUST FOR GOLD
(NSC) BILL, 2019
JEWELLERY
Recently, Union Cabinet approved organizational
Selling gold jewellery or artefacts without hallmark
restructuring of the Indian Railways (IR).
from the Bureau of Indian Standards from January 15,

About the salient features of the Bill: 2021, onwards is punishable offence

• The Composition of NSC: The Bill proposes for
About
the Commission to be composed of:
• It is a purity certification which will protect the
Ø A fulltime Chairman and five full time
members (appointed by the Central public against lower cartage and ensure
consumers do not get cheated while buying gold
Government on the recommendation of the
ornaments.
Search Committee)
Ø Deputy Governor, RBI as nominated by the • Consumers have to watch out for four marks on
Governor, RBI hallmarked gold jewellery:
Ø Chief Statistician of India (the position was 1. BIS mark
created by the same executive order that 2. Purity in carat
established the present NSC in 2005.) 3. Assay centre’s name
Ø Chief Economic Advisor (Ministry of Finance) 4. Jewellers’ identification mark.
as ex-officio member
• Statistical Audit: It provides for establishing Bureau of Indian Standards
National Statistical Audit and Assessment • The Bureau of Indian Standards (BIS) is the
Organization within NSC with a Chief Statistical national Standards Body of India working under
Auditor in the rank of Secretary to the GoI. the aegis of Ministry of Consumer Affairs, Food
• Independent secretariat for the Commission: & Public Distribution, Government of India.
To further strengthen the autonomy of the • It is established by the Bureau of Indian
commission, the bill also proposes setting up of an Standards Act, 1986 which came into effect on 23
independent secretariat for the Commission December 1986.
headed by a Secretary rank officer of GoI. • The Minister in charge of the Ministry or
Department having administrative control of the
SAKSHAM BIS is the ex-officio President of the BIS.
• Saksham is a people-centric fuel conservation
MANI APP BY RBI
mega campaign of Petroleum Conservation
Research Association (PCRA) under the aegis of • The Reserve Bank of India (RBI) has launched
Ministry of Petroleum and Natural Gas. a mobile app- Mobile Aided Note Identifier (MANI)
• It also aims to intensify efforts for making to help visually-impaired people to identify the
citizens aware about conservation and denomination of currency notes.
effective utilization of petroleum products • The application can scan the currency notes
leading to better health and environment. using the camera of the mobile phone. However,
the app does not authenticate a note as either
About PCRA: genuine or counterfeit.
• Petroleum Conservation Research Association • It also gives audio output in Hindi and English.
(PCRA) is a registered society set up under the It will work in offline mode once installed.
aegis of Ministry of Petroleum & Natural Gas,
Government of India. BHOOMI RASHI PORTAL
• PCRA is engaged in promoting energy efficiency • Launched in 2018 by the Ministry of Road
in various sectors of economy. Transport & Highways with the help of National
• It also helps the government in proposing informatics Centre (NIC).
policies and strategies for petroleum • It acts as a single point platform for online
processing of land acquisition projects to
128

accelerate highway infrastructure development in • LLPs are a flexible legal and tax entity that
India. allows partners to benefit from economies of scale
• The portal has been integrated with the Public by working together while also reducing their
Financial Management System (PFMS) for liability for the actions of other partners.
depositing the compensation in the account of • LLPs are registered under the Limited Liability
affected/ interested persons on a real-time basis. Partnership Act 2008.
• LLP contains elements of both ‘corporate
PFMS: structure’ as well as ‘partnership firm
• It is a web-based online software application structure’, hence called as hybrid between
developed and implemented by the Office of company and partnership.
Controller General of Accounts (CGA). • A difference between LLP and joint stock
• Aim: To facilitate a sound Public Financial company is that, the internal governance structure
Management System for the Government of India of a company is regulated by statute (i.e.
(GoI) by establishing an efficient fund flow Companies Act, 1956) whereas for LLP by
system as well as a payment cum accounting contractual agreement between partners.
network.
• Its coverage includes: a) Central Sector and CHAMPIONS PORTAL
Centrally Sponsored Schemes b) Direct Benefit Union Ministry of MSME has launched CHAMPIONS
transfer among others. portal www.Champions.gov.in a Technology driven
Control Room-Cum-Management Information System.
PROJECT MONITORING GROUP (PMG) PORTAL About:
• Project Monitoring Group (PMG) is an • It is a technology driven Control Room-Cum-
institutional mechanism of the Department of Management Information System which utilizes
Promotion of Industry and Internal Trade modern information and communication
(DPIIT), Ministry of Commerce and industry. technology (ICT) tools.
• It aims to facilitate issue resolution in projects • The name CHAMPIONS stands here for Creation
that are facing delays or awaiting regulatory and Harmonious Application of Modern Processes
clearances with State and/or Central Ministries. for Increasing the Output and National Strength.
• Any infrastructural or industrial project (domestic • Aim: The system utilizing modern ICT tools is
or foreign) with an investment of Rs. 500 Crores aimed at assisting Indian MSMEs march into big
and above is eligible for PMG assistance. league as National and Global CHAMPIONS.
• Further, the portal is assisted by Invest India • Features: The portal is for making the smaller
which provides implementational support in units big by solving their grievances, encouraging,
identifying and following up on issues with the supporting, helping and handholding. It is a real
States. one-stop-shop solution of MSME Ministry.
• Hub & Spoke Model: As part of the system a
LLP SETTLEMENT SCHEME network of control rooms is created in a Hub &
Ministry of Corporate Affairs launched Limited Spoke Model. The Hub is situated in New Delhi
Liability Partnership (LLP) settlement Scheme, 2020. in the Secretary MSME’s office. The spokes will be
in the States in various offices and institutions of
About: Ministry.
• LLP Settlement Scheme allows a one-time • The portal is also fully integrated with the
condonation of delay in filing statutorily required Government’s main grievances portal CPGRAMS
documents with the Registrar and to gain and MSME Ministry’s web-based mechanisms.
immunity from prosecution.
• The Scheme shall come into force on the 16th Centralized Public Grievance Redress and
March, 2020 and shall remain in force up to 13th Monitoring System (CPGRAMS):
June, 2020. This is part of governments efforts to • It is an online web-enabled system developed by
promote ease of doing business. National Informatics Centre in association with
Directorate of Public Grievances (DPG) and
About LLP:
129

Department of Administrative Reforms and Public The Ministry of Power has for the first time laid down
Grievances (DARPG). Rights to the Electricity Consumers through
• Aim: To enable submission of grievances by the “Electricity (Rights of Consumers) Rules, 2020”.
aggrieved citizens to Ministries or
departments who scrutinize and take action for About
speedy and favourable redress of these • Aim: These rules serve to “empower” consumers
grievances. with rights that would allow them to access
continuous supply of quality, reliable electricity.
COVID-19 ACTIVE RESPONSE AND EXPENDITURE • The Ministry of Power framed the proposed rules
SUPPORT PROGRAMME under Section 176 of the Electricity Act 2003.
Government of India and Asian Infrastructure • Electricity is a concurrent subject and the Centre
Investment Bank (AIIB) has signed a $750 million has the power to make rules to be implemented
“COVID-19 Active Response and Expenditure Support in each state.
Programme”.
Key Provisions: Rights and Obligations-
About Programme: • Distributor: It is the duty of every distribution
• Aim: To assist India to strengthen its response licensee to supply electricity on request made
to the adverse impacts of the COVID-19 pandemic by an owner or occupier of any premises in line
on poor and vulnerable households. with the provisions of Act.
• Programme Beneficiaries: Families below • Consumer: Whereas, consumers have a right to
poverty line, farmers, healthcare workers, women, have minimum standards of service for supply
widows, people with disabilities, senior citizens, of electricity from the distribution licensee.
construction workers and vulnerable groups. • Meteringè No connection shall be given without
• Funding: It is financed under the COVID-19 Crisis a meter that shall be a smart prepayment meter
Recovery Facility of the AIIB and co-financed by or prepayment meter.
the Asian Development Bank (ADB). • Release of new connection and modification in
• Implementation: It will be executed by the existing connection à Maximum time period
Department of Economic Affairs, Ministry of of 7 days in metro cities and 15 days in other
Finance. municipal areas and 30 days in rural areas, has
been fixed to provide new connection and modify
About AIIB: an existing connection.
• The Asian Infrastructure Investment Bank (AIIB) • Billing and Payment: There should be
is a multilateral development bank with a transparency applicable consumer tariff and
mission to improve social and economic outcomes bills, with the option to pay advance bills.
in Asia. • Reliability of supply: The distribution licensee
• HQ: Beijing, China. shall supply 24×7 power to all consumers.
• It is established by a multilateral treaty - AIIB However, the Commission may specify lower
Articles of Agreement. hours of supply for some categories of consumers
like agriculture.
• India joined AIIB in 2016 as a regional member
of the Bank. • Compensation mechanism: Automatic
compensation shall be paid to consumers for
• Members: Further, 14 of the G-20 nations are AIIB
which parameters on standards of performance
members including France, Germany, Italy and the
can be monitored remotely.
United Kingdom.
• Consumer as prosumer: While the prosumers
• China is the largest shareholder in AIIB with a
will maintain consumer status and have the
26.06% voting power, followed by India with a
same rights as the general consumer, they will
7.62% voting power.
also have the right to set up Renewable Energy
ELECTRICITY (RIGHTS OF CONSUMERS) RULES, (RE) generation units including roof top solar
2020 photovoltaic (PV) systems – either by himself or
through a service provider.
• Distribution licensee shall establish a centralized
24×7 toll-free call center Consumer Services.
130

• Consumer Grievance Redressal Forum (CGRF) equity, while significantly reducing
to include consumer and prosumer environmental risks and ecological scarcities.”
representatives. • Pavan Sukhdev’s ground-breaking 2008 report on
• Though Maximum time line of 45 days has been The Economics of Environment and Biodiversity
specified for grievance redressal, licensee shall (TEEB), was hosted by UNEP and became the
specify the time within which various types of foundation for the Green Economy movement.
grievances will be resolved.
RESKILLING REVOLUTION
SURVEY ON HOUSEHOLD SOCIAL CONSUMPTION:
• Initiative by the WEF to provide one billion
EDUCATION people with better education, skills and jobs by
• National Statistical Office (NSO), Ministry of 2030.
Statistics and Programme Implementation has • India recently joined the World Economic Forum's
conducted a survey on Household Social Reskilling Revolution as a founding government
Consumption: Education as part of 75th round of member.
National Sample Survey (NSS). • Founding governments include Brazil, France,
India, Pakistan, the Russian Federation, UAE and
the US.
DRONE CENSUS • WEF also released a report titled 'Jobs of
• India’s first drone census by the Ministry of civil Tomorrow: Mapping Opportunity in the New
Aviation. Economy' to identify jobs that require reskilling.
• DGCA issued the civil aviation requirements which
regulates use of drones and provides the process TRACK AND TRACE PLATFORM FOR BUSINESS
for obtaining unique Identification number • World Economic Forum (WEF) launched the
Unmanned aircraft operator permit UAOP and first neutral and public traceability platform.
other operational requirements. • Platform is based on the blockchain technology
• Drone federation of India a non- government, not- and has been developed to assist businesses
for-profit, industry-led body working in the across industries address the consumer demands
unmanned aviation space. for ethical and environmentally friendly products.
• Recently Ministry of Civil Aviation announced a
scheme providing a window up to January 31, SAKSHAM 2020: SANRAKSHAN KSHAMTA
2020 for voluntary registration of all drones and MAHOTSAV
their operators. • Month long fuel conservation campaign of
Petroleum Conservation Research Association
DIGITAL SKY PLATFORM
(PCRA).
• It is the first-of-its-kind national unmanned traffic • PCRA is a registered society set up under the aegis
management (UTM) platform that implements of Ministry of Petroleum & Natural Gas As a non-
“no permission, no takeoff” (NPNT). profit organization, PCRA is a national
• UTM operates as a traffic regulator in drone government agency engaged in promoting energy
airspace to ensure that drones remained on the efficiency in various sectors of economy.
approved flight paths.
• Before every single flight, drone pilots are WORLD’S FASTEST-GROWING CITIES
required to request permission to fly via a mobile • A survey by the Economist Intelligence Unit
app, which will automatically process the request (EIU).
and grant or reject it. • Cities are ranked based on “Total % change, 2015-
20 forecast”.
TYLER PRIZE
•
Malappuram (1st), Kozhikode (4th) and Kollam
• Environmental economist Pavan Sukhdev was (10th) were the only three cities to make it to the
awarded the 2020 Tyler Prize for his work in the top 10.
domain of green economy.
• As per UNEP, Green Economy is the one that SPICE+
“improves human well-being and builds social
131

• An integrated electronic form for incorporating • Launched by World Economic Forum (WEF) in
new companies wherein the EPFO and ESIC its annual meeting in Davos.
registration numbers will also be allotted at the • It aims to bring together leading companies,
same time. financial institutions, government representatives
• The Ministry of Corporate Affairs would etc. It also aims to increase access to the financial
introduce the form. system through innovative policy solutions that
• Currently, the Ministry has the electronic form are inclusive and interoperable.
SPICe (Simplified Proforma for Incorporating
Company Electronically) and that would be CENTRE FOR MONITORING INDIAN ECONOMY
replaced with SPICe+. (CMIE)
• The incorporation of companies is made through • Recently released a survey on the current
the Corporate Affairs Ministry’s portal MCA21. unemployment situation in India. According to the
The new form would be available on this portal. survey, more than 20% of Indian Economy has lost
their job.
MULTI-DONOR TRUST FUND • The CMIE was established in 1974. It produces
• Fund will complement the World Health business and economic databases. It is an
Organization (WHO)’s Strategic Preparedness and independent think tank.
Response Plan, and the UN Office for the
Coordination of Humanitarian Affairs (OCHA)’s STRATEGIC SECTOR
Consolidated Global Humanitarian Appeal for • Government, in 1999 classified the PSEs into
COVID-19. strategic and nonstrategic areas for the purpose
• Fund has three aims, with a finance window for of disinvestment.
each one: stop transmission of the virus, protect • The industrial activities or industries belonging to
the most vulnerable from its socio-economic sectors of national importance are categorised as
impacts, and make countries more resilient to Strategic sectors.
future health crises. • Currently, following areas are categorised as
• The Fund’s contribution will be monitored, with strategic PSEs: Arms & Ammunition, atomic
real-time information on activities made available energy and Railways transport.
online. • All other CPSEs are considered as non-strategic.
INTELLECTUAL PROPERTY FACILITATION
CENTRE
• IPFC, is a joint project of NRDC and MoMSME,
which aims to promote awareness and adoption of
Intellectual Property Rights amongst
entrepreneurs and MSMEs in India while making
accessible to high quality IP services and
Resources.
• National Research Development Corporation
(NRDC) is an enterprise under the Ministry of
Science and Technology.
INDIA’S FIRST WOMEN TRADE CENTRE

• It will be setup at Angamaly, Kerala in consonance
with United Nations Sustainable Development
Goals
• It aims to accelerate women entrepreneurship and
secure gender parity.
GLOBAL CONSORTIUM FOR DIGITAL CURRENCY

GOVERNANCE
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