Boost to plain packaging (TH)
Thailand and Saudi Arabia introducing plain packaging of tobacco products. Both countries are the first in the Asian and Arab regions, respectively, to adopt the tough measure in order to curb tobacco consumption. In December 2012, Australia became the first country to introduce plain packaging following the WHO Framework Convention on Tobacco Control (FCTC) guidelines. World Trade Organisation (WTO), in June 2018, has recommended the plain packaging.
Significance of Plain Packaging: Plain packaging standardizes the appearance of tobacco products. Other than brand and product names displayed in a standard color and font style, it prohibits the use of logos, colors, brand images or promotional information. Besides increasing the effectiveness of health warnings, it reduces the attractiveness of tobacco products, with no scope for using packaging to advertise and promote consumption. Along with higher taxes and large pictorial warnings, plain packaging can serve as a tool to deter new users and prompt existing users to quit
Packaging standard in India: In April 2016, India increased the size of graphic pictorial warnings, by 85%, on the packaging of tobacco products (both front and back). According to the Global Adult Tobacco Survey 2016-2017, the percentage of users in India who thought of quitting because of such warning labels increased sharply to 62% (cigarette), 54% (bidi) and 46% (smokeless tobacco users). The number of tobacco users dropped by eight million
Impact of Plain Packaging: Plain packaging along with other measures led to 0.55 percentage point reduction in smoking prevalence in Australia.
Establishing Gas Trading Hub/Exchange in the country
It has been agreed to establish the gas trading hub(s)/exchange(s) in the country wherein the natural gas can be freely traded and supplied through a market mechanism.
Development of Natural Gas Grid:
To develop the natural gas grid, Government has taken a decision to provide a capital grant of Rs. 5176 crore (i.e. 40% of the estimated capital cost of Rs. 12,940 Crore) to GAIL for development of a 2655 Km long Jaddishpur-Haldia/Bokaro-Dhamra Gas Pipeline (JHBDPL) project.
This pipeline will transport Natural Gas to the industrial, commercial, domestic and transport sectors in the States of Bihar, Jharkhand, Odisha, West Bengal and Uttar Pradesh.
An Integrated Refinery-cum-Petrochemical Complex:
Oil Public Sector Undertakings (PSUs) namely Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have decided to set up an integrated refinery-cum-petrochemical complex with a refining capacity of 60 MMTPA (Million Metric Tonnes Per Annum) at Babulwadi, Taluka Rajapur in Ratnagiri District in the state of Maharashtra.
The establishment of a hub is an attempt to meet operators’ demands for the adoption of a market-based gas-pricing regime. But India faces challenges in making the dream a reality, amid concerns over third-party access and competition.
The gas hub plan ties in with Prime Minister Narendra Modi’s efforts to boost the share of natural gas in India’s energy mix to 15% by 2030, from just over 6% now.
Domestic supply is also increasing. ONGC, India’s largest producer, supplied 23.5bn cubic meters of gas in the 2017-18 financial year and plans to almost double this within the next four years.
The Indian authorities, are considering overhauling the policy of fixed domestic gas prices, currently based on a formula derived from prices in the US, Canada, UK and Russia. Delhi sees itself as a potential candidate for Asia’s largest LNG trading hub, in a region that lacks accurate benchmarks reflecting Asian gas fundamentals.
Parivesh (Pro-Active and Responsive facilitation by Interactive, Virtuous and Environmental Single-window Hub)
An ambitious web-based single-window system ‘Parivesh’ will be rolled-out at state levels by January 15, bringing an end to the clearance nightmare for entrepreneurs. The automated system for submission, clearance and monitoring has already been implemented at the Central level.
What is it?
It is an environmental single window hub for Environment, Forest, Wildlife and CRZ clearances. This Single-Window Integrated Environmental Management System has been developed in pursuance of the spirit of ‘Digital India’ initiated by the Prime Minister and capturing the essence of Minimum Government and Maximum Governance.
“PARIVESH” is a workflow based application, based on the concept of web architecture. It has been rolled out for online submission, monitoring and management of proposals submitted by Project Proponents to the Ministry of Environment, Forest and Climate Change (MOEFCC), as well as to the State Level Environmental Impact Assessment Authorities (SEIAA).
It seeks to give various types of clearances (e.g. Environment, Forest, Wildlife and Coastal Regulation Zone Clearances) from Central, State and district-level authorities.
The system has been designed, developed and hosted by the Ministry of Environment, Forest and Climate Change, with technical support from National Informatics Centre, (NIC).
It provides single registration and single sign-in for all types of clearances (i.e. Environment, Forest, Wildlife and CRZ), unique-ID for all types of clearances required for a particular project and a single Window interface for the proponent to submit applications for getting all types of clearances (i.e. Environment, Forests, Wildlife and CRZ clearances).
Significance and benefits of the platform:
PARIVESH offers a framework to generate economic growth and strengthens Sustainable Development through e- Governance. With automatic highlighting of non-compliance by the system, PARIVESH helps in improving the overall performance and efficiency of the whole appraisal process.
It also helps the processing authorities, as it has a Single Window System for Central, State and District level clearances.
The facility of Geographic Information System (GIS) interface for the Appraisal Committee will help them in analyzing the proposal efficiently, automatic alerts (via SMS and emails) at important stages to the concerned officers, committee members and higher authorities to check the delays, if any.
It also enables project proponents, citizens to view, track and interact with scrutiny officers, generates online clearance letters, online mailers and alerts to state functionaries in case of delays beyond stipulated time for processing of applications.
Export Promotion Cell for MSMEs
The Ministry of Micro, Small and Medium Enterprises has established an Export Promotion Cell. The cell aims to create to create a sustainable ecosystem for micro, small and medium enterprises (MSMEs). MSMEs are the pillars of the Indian economy. The promotion cell aims to create a sustainable ecosystem for micro, small and medium enterprises (MSMEs). The Promotion cell will aid the MSME sector in the following ways:
Integration of MSMEs into the global value chain.
Evaluation of readiness of MSMEs to export their products and services.
Recognition of areas where improvements are required in order to be able to export effectively and efficiently.
Governing Council to be set up
In order to ensure the efficient delivery of the export-related interventions for the MSMEs, the MSME Ministry has decided to set up a governing council chaired by the secretary of the MSME ministry and co-chaired by the development commissioner, MSME.
The council will also comprise of senior officials and members from ministries of MSME and commerce, MSME Export Promotion Council, Export Development Authority, Commodity Boards, and other bodies.
Union Cabinet approves amendments to the Trade Union Act, 1926
The Union Cabinet meeting chaired by Prime Minister Narendra Modi has approved the amendment to the Trade Union Act, 1926.
The amendment bill provides for inserting of section 10A in the Trade Union Act, 1926 to power centre and state governments to recognize trade unions and federation of trade unions at central as well as state level. The amendment bill once passed by the parliament, the Ministry of Labour would issue rules and regulations prescribing the manner of recognition of these trade unions.
Benefits from the Proposed recognition to Trade Unions
The benefits of formal recognition to the trade unions are:
Ensure true representation of workers in the tripartite bodies in a transparent manner.
Check on the arbitrary nomination of workers’ representatives by the Government.
Reduce the duplicacy of such exercise by different departments.
The recognised trade unions may be assigned specific roles at Central or State level. This would aid in developing inclusive governance. The Indian Trade Unions Act, 1926 provided for only registration of trade unions and there was a long pending demand to grant recognition to trade unions. The amendment bill fulfils this long-standing demand.
Ministry of Commerce clarifies on FDI rules in e-commerce
The Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce has clarified that the Foreign Direct Investment (FDI) rules for e-commerce have not allowed foreign investment in the inventory-based model or multi-brand retailing.
Provisions for FDI in e-commerce
The DIPP has clarified on the following provisions: FDI is allowed only in the business-to-business (B2B) e-commerce segment and not in the business-to-consumer (B2C) segment which in effect is the multi-brand retail or the inventory-based e-commerce model.
DIPP further has clarified that through FDI in B2B e-commerce, an e-commerce entity providing marketplace will not, directly or indirectly, influence the sale price of goods or services. If it does so, such renders such business would be rendered as an inventory based model. The DIPP clarifies that an e-commerce platform operating an inventory based model does not only violate the FDI policy on e-commerce but also circumvents the FDI policy restrictions on multi-brand retail trading.
Challenges for start-ups in India
Citizens’ engagement forum LocalCircles has released a report on challenges faced by start- ups in India. The report is based on responses from over 15,000 start-ups, SMEs and entrepreneurs.
Challenge for start- ups: Corruption, Bureaucratic inefficiencies. Securing loans. Funding
Angel tax: Angel tax is one area that falls under corruption and bureaucratic inefficiencies as it takes the focus of entrepreneurs away from building a product or service to responding to tax notices and filing appeals, something that start-ups can clearly do without.
Angel tax continued to be a key pain point for start-ups, where the assessing officers in many cases reject the valuation method used by the start-up and instead treat the capital raised as income from other sources, thereby, raising a tax demand and penalty on the start-up. Several start-ups and angel investors have raised concerns over notices received from the authorities related to taxation of angel funds. The Centre has set up a panel to look into the taxation issues faced by start-ups and angel investors.
What is Angel Tax?
Angel Tax is a 30% tax that is levied on the funding received by startups from an external investor. However, this 30% tax is levied when startups receive angel funding at a valuation higher than its ‘fair market value’. It is counted as income to the company and is taxed. The tax, under section 56(2)(viib), was introduced by in 2012 to fight money laundering. The stated rationale was that bribes and commissions could be disguised as angel investments to escape taxes. But given the possibility of this section being used to harass genuine startups, it was rarely invoked.
Why is Angel tax problematic?
There is no definitive or objective way to measure the ‘fair market value’ of a startup. Investors pay a premium for the idea and the business potential at the angel funding stage. However, tax officials seem to be assessing the value of the startups based on their net asset value at one point. Several startups say that they find it difficult to justify the higher valuation to tax officials.
In a notification dated May 24, 2018, the Central Board of Direct Taxes (CBDT) had exempted angel investors from the Angel Tax clause subject to fulfilment of certain terms and conditions, as specified by the Department of Industrial Policy and Promotion (DIPP). However, despite the exemption notification, there are a host of challenges that startups are still faced with, in order to get this exemption.
Institutions in News- DRI:
Directorate of Revenue Intelligence, formed in 1957, is the major intelligence agency which eradicates smuggling of drugs, gold, diamonds, electronics, foreign currency, counterfeit Indian currency, etc.
The Directorate of Revenue Intelligence functions under the Central Board of Excise and Customs in the Ministry of Finance, Department of Revenue. The Directorate is run by officers from Central Excise and Customs. Though its early days were committed to combating smuggling in of gold, it has now tuned itself to the changing nature of crimes in the field of narcotics and economic crimes.
National Highways Authority of India (NHAI) plans to raise Rs10,000 crore through Bharatmala Taxable Bonds in the ongoing financial year. As per the internal and extra budgetary resources approved for 2018-19 by the government, a sum of Rs62,000 crore is to be raised by NHAI through various instruments/sources including Bharatmala bonds.
What is Bharatmala project?
Bharatmala Project is the second largest highways construction project in the country since NHDP, under which almost 50,000 km or highway roads were targeted across the country. Bharatmala will look to improve connectivity particularly on economic corridors, border areas and far flung areas with an aim of quicker movement of cargo and boosting exports.
NHAI: The National Highways Authority of India was constituted by an act of Parliament, the National Highways Authority of India Act,1988. It is responsible for the development, maintenance and management of National Highways entrusted to it and for matters connected or incidental thereto. The Authority was operationalised in Feb, 1995.
Action against Industries Polluting Ganga River: Government of India has launched the Namami Gange Programme in May 2015, with the total budgetary outlay of Rs. 20,000 crore for the period from 2014-2015 till 31 December 2020 to accomplish the twin objectives of effective abatement of pollution, conservation and rejuvenation of National River Ganga and its tributaries.
Namami Gange Programme – is an umbrella programme which integrates previous and currently ongoing initiatives by enhancing efficiency, extracting synergies and supplementing them with more comprehensive & better coordinated interventions.
Government of India is supplementing the efforts of the state governments in addressing the pollution of river Ganga by providing financial assistance to the states.
961 Grossly Polluting Industries (GPIs) have been identified on main stem of river Ganga. Cleaning of the river is a continuous process and efforts are being made to complete the projects by the year 2020 for creating adequate Sewage Treatment Capacity.
Each day, more than 500 million liters of wastewater from industrial sources are dumped directly into Ganga. In many places, this wastewater entering the rivers is completely raw, completely untreated.
Main Pillars of the Namami Gange Programme are:
Sewerage Treatment Infrastructure River-Surface Cleaning Afforestation Industrial Effluent Monitoring River-Front Development Bio-Diversity Public Awareness Ganga Gram
Its implementation has been divided into:
Entry-Level Activities (for immediate visible impact), Medium-Term Activities (to be implemented within 5 years of time frame) and Long-Term Activities (to be implemented within 10 years). National Mission for Clean Ganga, endeavors to deploy best available knowledge and resources across the world for Ganga rejuvenation. Clean Ganga has been a perennial attraction for many international countries that have expertise in river rejuvenation. Countries like Australia, United Kingdom, Germany, Finland, Israel, etc. have shown interest in collaborating with India for Ganga Rejuvenation.
Lok Sabha Passes the Companies (Amendment) Bill, 2018
The Lok Sabha has passed the Companies (Amendment) Bill, 2018. The bill aims to amend the Companies Act, 2013. The bill would replace the ordinance promulgated on November 2018.
Features of the Companies (Amendment) Bill, 2018
The features of the bill are: It provides for re-categorisation of offences. The bill re-categorises 16 offences including the issuance of shares at a discount, and failure to file an annual return as a civil offence. The bill aims to remove the clause of imprisonment for officers for defaulting the rule which prohibits issuing shares at a discount, except in certain cases. Instead, the bill provides for a penalty equal to the amount raised by the issue of shares at a discount or five lakh rupees, whichever is lower. The Bill states that a company may not commence business, unless it files a declaration within 180 days of incorporation, confirming that every subscriber to the Memorandum of the company has paid the value of shares agreed to be taken by him, and files a verification of its registered office address with the Registrar of Companies within 30 days of incorporation.
The Bill transfers the power to approve any changes in the financial year for a company associated with a foreign company and any alteration in the incorporation document of a public company which has the effect of converting it to a private company to the central government from the National Company Law Tribunal. The Bill provides that failure make a declaration of interest when a person holds the beneficial interest of at least 25% shares in a company or exercises significant influence or control over the company may either be fined or imprisoned for up to one year or both. The bill increases the ceiling up to which the regional director can compound (settle) offences with a penalty of up to twenty-five lakhs from five lakh rupees. The amendments are brought in as per the recommendations of a committee constituted to suggest changes to the Companies Act, 2013.
National Entrepreneurship Awards 2018 presented at New Delhi
The Ministry of Skill Development and Entrepreneurship (MSDE) presented the National Entrepreneurship Awards 2018 by honouring 30 outstanding young entrepreneurs and three entrepreneurship ecosystem builders for their exceptional contribution in entrepreneurship development at a ceremony held in New Delhi.
Those honoured included:
Roshan Kahtoon, 23, from Bihar, who despite her physical disability, has beaten all odds and has set up a small bangle manufacturing unit.
Shruthi Reddy Sethi, 33, of Kolkata, who began Anthyesti Funeral Services to provide end-to-end funeral management service.
Tana Sumpaaged, 35, of the Nyishi tribe, Arunachal Pradesh, who is successfully running piggery farms and fisheries and helping local people, women, housewives and unemployed youth with quality training and livelihood support.
Mahipal Chary Kadivendi, 38, of Telangana, who has developed a self-propelled weeder-cum-cultivator that can be used for a number of agricultural processes such as hoeing, weeding, tilling, sowing and also for applying fertilizer or insecticides.
National Entrepreneurship Awards
The National Entrepreneurship Awards was instituted by the Ministry of Skill Development and Entrepreneurship in 2016 to encourage a culture of entrepreneurship across the country. Each of the enterprise/individual winners receives a trophy, certificate and a cash prize of Rs 5 lakh, while each of the winning organizations/institutes receives a trophy, certificate and a cash prize of Rs 10 lakh.
Utilisation of funds by the Ministry of Housing and Urban Affairs
The data released by the Ministry of Housing and Urban Affairs outlines the following trends in the utilisation of funds: Developing metro rail networks and housing development has been the top priority of the Central Government’s urban development strategy.
The central government has allocated Rs 53,000 crore to the States in four years to implement metro projects and Rs 33,000 crore for the Pradhan Mantri Awas Yojana-Urban. 17 cities are implementing 27 metro projects, of which 10 are 50:50 joint ventures between the Government of India and the respective States. The central government has allocated 40 per cent funds for metros and 25 per cent for the housing projects in four years. The allocation for the Heritage City Development and Augmentation Yojana (HRIDAY) was less than even 1 per cent of the total allocation.
Heritage City Development and Augmentation Yojana (HRIDAY)
HRIDAY was launched by the Ministry of Housing and Urban Affairs was launched to preserve and revitalise soul of the heritage city to reflect the city’s unique character by encouraging aesthetically appealing, accessible, informative & secured environment. The scheme is being implemented in 12 identified Cities namely, Ajmer, Amaravati, Amritsar, Badami, Dwarka, Gaya, Kanchipuram, Mathura, Puri, Varanasi, Velankanni and Warangal in a mission mode. Of the Rs 8,750 crore released to the states under the Swachh Bharat Mission–Urban, only 48 per cent funds has been utilised.
The states have utilised 54 per cent i.e. Rs 9,876 crore of the Rs18,390 crore under the AMRUT scheme. The allocation to the North-Eastern Region Urban Development Programme (NERUDP) and the 10% Lumpsum Scheme of the Ministry of Housing and Urban Affairs was just 1 per cent of the total allocation.
10% Lumpsum Scheme
Under the 10% Lumpsum Scheme of the Ministry of Housing and Urban Affairs, 10% of the Annual Plan Budget of the Ministry is earmarked for implementation of projects / schemes for the North Eastern States including Sikkim.
North-Eastern Region Urban Development Programme (NERUDP)
The North Eastern Region Urban Development Programme (NERUDP) has been taken up with the financial assistance from Asian Development Bank (ADB). The scheme is being implemented in the capital cities of 5 North Eastern States viz. Agartala (Tripura), Aizawl (Mizoram), Gangtok (Sikkim), and Kohima (Nagaland) covering priority urban services likeWater Supply, Sewerage and Sanitation, and Solid Waste Management besides capacity building, institutional and financial reforms of urban local bodies. The States have utilised 67 per cent of the Central funds provided under the eight urban development projects. To monitor the progress of schemes and funds allocated to the States, various institutional frameworks such as submission of periodic progress reports, review meetings, video conferences and field visits have been put in place by the Ministry of Housing and Urban Affairs.
‘Mission Indradhanush’ has been selected as one of the 12 best practices globally and has been featured in a special issue of the British Medical Journal titled ‘Improving vaccination coverage in India: lessons from Intensified Mission Indradhanush, a cross-sectoral systems strengthening strategy’. Mission Indradhanush was showcased during the ‘Partner’s Forum’ held at New Delhi on 12th-13th December 2018 which was attended by around 1200 international and national delegates working on Maternal, New-born, Child and Adolescent Health.
Mission Indradhanush –
To strengthen and re-energize the programme and achieve full immunization coverage for all children and pregnant women at a rapid pace, the Government of India launched “Mission indradhanush” in December 2014.
Mission Indradhanush’s Goal –
The ultimate goal is to ensure full immunization with all available vaccines for children up to two years of age and pregnant women. The Government has identified 201 high focus districts across 28 states that have the highest number of partially immunized and unimmunized children.
Intensified Mission Indradhanush (IMI) – To further intensify the immunization programme, Prime Minister Narendra Modi launched the Intensified Mission (IMI) on October 8, 2017. Government of India aims to reach each and every child up to two years of age and all those pregnant women who have been left uncovered under the routine immunization programme/UIP.
Drugs to skip price control for 5 years
The provisions of Drug Price Control Order (DPCO), 2013 shall not apply to drugs for treating orphan diseases.
Important Facts: As per The Drug Price Control Order (DPCO), 2013, innovative patented drug will be exempted from the price control regulations for five years since the start of commercial marketing of the product in India. This includes ‘orphan drugs’ used to treat rare genetic disorders. The DPCO fixes the prices of scheduled formulations and monitors maximum retail prices of all drugs, including the non-scheduled formulations. The amendments were made on the basis of the NITI Aayog’s recommendations to the Department of Pharmaceuticals (DoP).
Three types of innovation can qualify for this benefit: If a new drug has been developed using indigenous research and development and has been granted a patent under the Indian law, it can seek exemption from price control from the date, when it starts commercial production in the country.
Second, if a pharma company discovers a new process to make an existing drug and gets a patent for it under the Indian law, it can apply for a five-year relaxation from price regulation
Finally, a finished drug which uses a new delivery system (such as controlled release or sustained release) developed through domestic research and development would also be eligible for exemption from price control.
But in this case, the five-year count would begin from the date it gets a market approval from the drug regulator of the country and not from the time it starts producing the drug
Under the amended DPCO, the Centre will continue fixing prices in line with market-based data available on drugs.
An alternative model, cost-based pricing, takes into account the actual money that went into developing the drug, sourcing the raw material and so on.
Pricing of Medicines in India
The National Pharmaceutical Pricing Authority (NPPA) under the Department of Pharmaceuticals is tasked with the responsibility of fixing the prices of medicines in India.
The NPPA implements the Drugs (Prices Control) Order (DPCO), 2013 which aims at making available essential and life-saving medicines to all at affordable prices through price control.
The DPCO, 2013 draws its powers from the Essential Commodities Act, 1955 (EC Act).
The DPCO, 2013 follows a market-based pricing methodology for fixing the ceiling prices of medicines. The key principle underlying the market-based pricing methodology of the DPCO, 2013 is “essentiality”
This principle is satisfied by considering the list of medicines included in the National List of Essential Medicines (NLEM) declared by the Ministry of Health and Family Welfare
Currently, patented medicines included in the NLEM fall under the purview of the DPCO, 2013.
Patented medicines developed outside India fall under price regulation if listed in the NLEM; if not, such medicines remain outside the price control regime.
There is no express provision either in the WTO or the TRIPS agreement that explicitly prohibits price regulation of patented medicines
About Market-based pricing
The DPCO uses market-based mechanisms to set price ceilings. It works differently, depending on how many products are in a category:
If a drug is one of many drugs within a given product category, the price ceiling is the simple average of the prices of all drugs that have at least 1% of market share within that category (plus a 16% pharmacists’ margin).
If a drug is the only one within a given drug category, the new price ceiling for that category will be a fixed percent, based on price reductions in similar categories.
Significance of such moves:
It would encourage Indian pharma players to actively invest in Research & Development.
Help the market grow and also immensely benefit the common man who would have better access to newer and more innovative product
The unaffordable prices of patented medicines compromise equitable access to them and threaten the financial sustainability not only of patients, but even that of the public health system
The latest move has also upset the Indian drug manufacturing industry as well.
Several developed economies have price regulation mechanisms for patented drugs in some form or the other. While the UK’s National Health Service and insurers in the US negotiate prices with drug makers.
Canada has a board that looks at bringing down prices of patented drugs. France, Germany and Australia, too, have varying forms of benchmark pricing.
Vijay Mallya declared as Fugitive Economic Offender
The Prevention of Money Laundering (PMLA) court in Mumbai has declared Vijay Mallya as a Fugitive Economic Offender. Vijay Mallya is the first businessman to be charged under the new fugitive economic offender’s act 2018.
Declaration of the Fugitive Economic Offender
Vijay Mallya is declared as the Fugitive Economic Offender under the following provisions:
According to the Fugitive Economic Offenders Act, 2018 a fugitive economic offender is a person against whom an arrest warrant has been issued for his or her involvement in economic offences involving at least Rs. 100 crore or more and has left India to avoid prosecution. The investigating agencies have to file an application in a Special Court under the Prevention of Money-Laundering Act, 2002 containing details of the properties to be confiscated, and any information about the person’s whereabouts. The Special Court will issue a notice for the person to appear at a specified place and date at least six weeks from the issue of notice. Proceedings will be terminated if the person appears. If not the person would be declared as a Fugitive Economic Offender based on the evidence filed by the investigating agencies. The person who is declared as a Fugitive Economic Offender can challenge the proclamation in the High Court within 30 days of such declaration according to the Fugitive Economic Offenders Act, 2018.
Nafed sell pulses to states under the scheme of Central Government
The National Agricultural Cooperative Marketing Federation of India Ltd (Nafed) has sold over 5 lakh tonnes (lt) pulses to 10 States and a Union Territory at discounted rates under the scheme of central government.
Why the central government had introduced the scheme?
The first of its kind scheme was introduced by the central government to clear the stock procured during the past few years and improve nutritional indicators for poor households. The objectives of the scheme are: Making pulses available to poor people at affordable rates. Reduction of the sale of pulses, procured by the government procurement agencies, in the open market as it often brings down the mandi prices of the freshly harvested crop, which in turn is against the interests of farmers.
Features of the scheme
The salient features of the scheme are:
The subsidised price of the pulses is Rs 15 lower than the weighted average mandi price of any of the pulses and the states have to borne by states. There is no limit on how much a State can buy from Nafed under the scheme, but the states are required to justify the demand. The states are required to distribute the pulses only through welfare schemes and should produce the evidence. The scheme is already showing the desired impact particularly on the lifting of market prices. Reports suggest that the mandi prices of pulses have already increased on an average by Rs 300-1,000 a quintal in different markets, even though it was just two and a half months since the scheme was launched.
Rail Kumbh Seva Mobile App
Rail Kumbh Seva Mobile App has been launched by the North Central Railway (NCR) to help the devotees arriving in Allahabad for the Kumbh Mela.
The Mobile Application ‘Rail Kumbh Seva Mobile App’ has been designed to provide critical and valuable information to the devotees, tourists and other passengers who will visit Allahabad during the Kumbh Mela period. The app will assist the devotees in the following ways:
The app will assist to navigate through the city and the mela grounds.
The app will also provide information regarding all the ‘Mela special’ trains that will be run during the period.
The app will provide a link to the user to buy both unreserved and reserved train tickets.
The app will aid in knowing their current location and also aid in getting directions to reach railway stations, the mela zone, major hotels, bus stations and other facilities within Allahabad city.
The app will also provide information about passenger amenities available at the stations like parking lots, refreshment rooms, waiting rooms, book stall, food plaza, ATMs and train enquiry
Kumbh Mela at Allahabad
The Mythological story related to Kumbh is narrated below,
“During an ongoing war between the demons and the demigods for the possession of the elixir of immortality (Amruth), few drops fell to earth at four places: Allahabad, Haridwar, Nasik, and Ujjain. At each of the four places, Kumbh Mela is held. At Allahabad, the drop of Amruth is believed to be fallen near Sangam and people assemble near the Sangam during Kumbh Mela to purge themselves of all sins by taking a dip in the waters and attain Moksha (Salvation).” The Kumbh Mela is held in these four places based on the astrological calculations it returns to each place after a gap of twelve years. The normal Kumbh Mela is held every 3 years, the Ardh (half) Kumbh Mela is held every six years at Haridwar and Allahabad (Prayag) while the Purna (complete) Kumbh mela takes place every twelve years, at four places Prayag (Allahabad), Haridwar, Ujjain, and Nashik. The Maha Kumbh Mela is celebrated at Prayag after 144 years (i.e. after 12 ‘Purna Kumbh Melas’).
Benefits of the Aadhaar – where it stands today’
The Union Finance Minister Arun Jaitley has released a Facebook post titled ‘Benefits of the Aadhaar – where it stands today’ highlighting how the efficient use of the Aadhaar based identification has aided in improving the governance and in efficient delivery of services.
How Aadhaar has aided in reducing leakages?
The Finance Minister highlights the efficacy of Aadhaar in reducing leakages through following instances:
The Minister cites that Aadhaar’s use in the delivery of subsidies has helped saved Rs 90,000 crore in the last few years till March 2018 by eliminating several duplicate, non-existent and fake beneficiaries.
The Digital Dividend Report of the World Bank estimates that India can save Rs 77,000 crore every year by the use of Aadhaar.
The Minister further states from savings through efficient implementation of Aadhaar the government can fund three schemes of the size of Ayushman Bharat.
How Aadhaar benefitted the people?
The Minister notes that with Aadhaar the government was able to eliminate middlemen and the benefits of various welfare schemes were directed to the bank accounts of the beneficiaries. Under the schemes like
PAHAL and Ujjwala beneficiaries are given cooking gas subsidies through direct benefit transfer (DBT) in their Aadhaar-linked bank accounts. 33 crore MGNREGA cardholders are getting wage payment directly through DBT in their bank accounts.
The Finance Minister gave special credits to Shri Nandan Nilekani who spearheaded the Aadhaar in the beginning days and Dr Ajay Bhushan Pandey, who subsequently provided it with the direction and expansion.
The Impact of Crude Price Shock on CAD, Inflation and Fiscal Deficit
The RBI has released a paper titled ‘The Impact of Crude Price Shock on CAD, Inflation and Fiscal Deficit’. The paper outlines how the crude price shock will have an adverse impact on current account deficit (CAD), Inflation and Fiscal Deficit.
Highlights of the Research Paper
Since India is heavily dependent on oil imports for meeting its domestic demand, it remains susceptible to global crude price shocks. The research paper highlights the interrelation between the crude prices, CAD, Inflation and Fiscal Deficit as explained below: An increase in crude price worsens the CAD and this adverse impact cannot be significantly contained through higher growth. Hence a crude price shock will result in high CAD to GDP ratio.
The crude price of USD 85/barrel in the worst case scenario will result in deficit increases by USD 106.4 billion, which is 3.61 per cent of the GDP on account of the oil shock.
Every increase of USD 10/barrel in crude prices leads to an additional USD 12.5 billion deficit. This is roughly 43 bps of the country’s GDP. Hence every USD 10/barrel increase in crude price will shoot up the CAD/GDP ratio by 43 bps.
The study states that if the price increase is passed on directly to the final consumers, it will result in increased inflation.
It is estimated that a USD 10/barrel increase in crude price at the price of USD 65/barrel will lead to a 49 basis points increase in headline inflation and a USD 10/barrel increase in crude price at the price of USD 55/barrel gives around a 58 bps increase in headline inflation. If the government decides not to pass on the USD 10/barrel increase in crude price to customers the fiscal deficit would increase by 43 bps. The study concludes by stating that the actual impact on the inflation and fiscal deficit will depend on the level of government intervention through changes in tax and subsidy in the domestic oil markets.
CSO releases advance estimates of National Income for 2018-19
The Central Statistics Office (CSO) under the Ministry of Statistics and Programme Implementation has released the first advance estimates of National Income for 2018-19.
Highlights of the Estimate
The Estimate makes the following observations:
The Indian economy is expected to grow at 7.2 per cent in the financial year 2018-19 which is higher than the 6.7 per cent GDP growth in the previous financial year 2017-2018.
The Real GVA (Gross Value Added) is expected to grow at 7 per cent in the current fiscal as against 6.5 per cent in 2017-18.
The CSO estimates that the expansion in activities in agriculture, forestry and fishing is likely to increase to 3.8 per cent in the current fiscal from 3.4 per cent in the preceding year.
The manufacturing sector is expected to grow at 8.3 per cent in 2018-19, up from 5.7 per cent in 2017-18.
India’s per capita income in real terms (at 2011-12 prices) during 2018-19 is likely to attain a level of Rs 91,921 as compared to Rs 86,668 for the year 2017-18. The per capita income would grow at a rate of 6.1 per cent.
Central Statistics Office (CSO)
The Central Statistics Office (CSO) under the Ministry of Statistics and Programme Implementation coordinates the statistical activities in the country and evolves statistical standards. The functions of the CSO include National Income Accounting, conducting of Annual Survey of Industries, Economic Censuses and its follow up surveys, compilation of Index of Industrial Production, as well as Consumer Price Indices for Urban Non-Manual Employees, Human Development Statistics, Gender Statistics, imparting training in Official Statistics, dissemination of statistical information, work relating to trade, energy, construction, and environment statistics, revision of National Industrial Classification, etc
National Policy for Domestic Workers
The Union Ministry of Labour and Employment has notified the draft National Policy on Domestic Workers. The policy aims to provide social security benefits to an estimated 39 lakh people employed as domestic workers by private households, of which 26 lakhs are female domestic workers.
Features of the Policy
The important features of the policy are: Facilitating the domestic workers to register as unorganised workers under the Unorganised Workers’ Social Security Act, 2008. This will help domestic workers to access and obtain social security benefits like life and disability cover, health and maternity benefits, as well as old age protection.
Providing domestic workers with the right to form their own associations and unions.
Right to minimum wages and access to social security.
Right to enhance their skills.
Protection of domestic workers from abuse and exploitation, giving them access to courts.
Tribunals for grievance redressal, the establishment of a mechanism for the regulation of private placement agencies.
Establishment of a grievance redressal system for domestic workers.
Under the Unorganised Workers Social Security Act, 2008, the Central Government is providing social security benefits relating to life and disability cover, health and maternity benefits, old age protection to the unorganised workers including domestic workers. The Union Ministry of Labour and Employment is also in process of drafting a universal social security code that would cover even domestic workers, who are otherwise deprived of benefits such as medical insurance, pension, maternity and mandatory leave.
Transport Subsidy Scheme
To facilitate the process of industrialization in hilly, remote and inaccessible areas, transport incentive is provided to the states of: North Eastern Region (including Sikkim) under North Eastern Industrial Development Scheme (NEIDS) – 2017
Jammu & Kashmir under Industrial Development Scheme – 2017
Lakshadweep and A&N Islands under Lakshadweep and Andaman & Nicobar Island Development Scheme – 2018
Industrial Units can avail Incentives:
Under the above mentioned schemes, all eligible industrial units can avail incentive on transportation of only finished goods through Railways or the Railway Public Sector Undertakings, Inland Waterways or scheduled airline (shipping for Andaman & Nicobar and Lakshadweep islands also) for five years from the date of commencement of commercial production/operation.
Freight Subsidy Scheme (FSS): The FSS (2013) replaced the Transport Subsidy Scheme, 1971. It was in operation in all 8 North Eastern States, Himachal Pradesh, Uttarakhand, J&K, Darjeeling District of West Bengal, Andaman & Nicobar Islands and Lakshadweep islands. The FSS has been discontinued since 22.11.2016. But, the industrial units under these schemes during their currency are eligible for the benefits of the scheme.
While the inland transport incentive is available for certain landlocked states, there is no proposal to provide the same to the state of Chhattisgarh.
About Transport Subsidy Scheme –
Government of India had introduced Transport Subsidy Scheme (TSS) on 23.7.1971 to develop industrialization in the remote, hilly and inaccessible areas.
The objective is to develop industrialization in the remote, hilly and inaccessible areas in 8 North Eastern Region.
DIPP (Department of Industrial Policy and Promotion) is the implementing agency of TSS/FSS.
Monitoring and Review Mechanism:
In order to check any misuse, Directorates of Industries in each beneficiary State/UT are required to: Carry out periodical checks to ensure that the raw materials/finished goods for which transport subsidy is given in actually used for the intended purpose, To draw up procedures and arrangements for scrutinizing the claims and for promote payment of the claims, To lay down a system of pre-registration and to fix and indicate the capacity of the units during registration, To lay down procedure to ensure regular inflow of information regarding the movement of raw material and finished goods, To lay down that statistics of production and utilization or raw material should be maintained and kept open for inspection.
The Ministry of Labour & Employment is implementing the National Career Service (NCS) Project to provide a variety of employment related services like job matching, career counseling, vocational guidance, information on skill development courses, etc.
Highlights of NCS Project: It includes establishment of Model Career Centers by the State Government/Institutions of repute to provide variety of employment related services using technology. The NCS project has also been enhanced to interlink the Employment Exchanges with NCS portal and organizing job fairs.
Employment Exchanges/Model Career Centers – functions under the administrative control of the State Governments/Institutions and they are organizing job fairs locally for the benefit of the job seekers from time to time.
A National ICT based portal is developed primarily to connect the opportunities with the aspirations of youth. The portal facilitates registration of job seekers, job providers, skill providers, career counselors, etc.
National Bamboo Mission
The restructured National Bamboo Mission (NBM) was approved in April, 2018 for implementation till the end of 14th Finance Commission i.e. 2019-2020.
Aim of the Mission: It aims to inter-alia supplement farm income of farmers with focus on the development of complete value chain of bamboo sector linking growers with industry.
Implementation: The scheme is being implemented in non-forest Government land, farmers field in States where it has social, commercial and economical advantage, including the bamboo rich States of North Eastern region and Madhya Pradesh, Maharashtra, Chhattisgarh, Odisha, Karnataka, Uttarakhand, Bihar, Jharkhand, Andhra Pradesh, Telangana, Gujarat, Tamil Nadu and Kerala.
Till Now: 88 Bamboo Treatment Units, 464 Product Development/Processing Units, 135 Infrastructure Projects for Promotion and Development of Bamboo Markets, and an area of 15740 ha for plantation has been approved.
Financial Assistance to North Eastern States is provided in the ratio of 90:10 between Central & State Government.
A number of consultations have been held with State Governments and Industry to invigorate the bamboo sector in the region.
About National Bamboo Mission –
The Mission envisages promoting holistic growth of bamboo sector by adopting area-based, regionally differentiated strategy and to increase the area under bamboo cultivation and marketing.
Key Outputs: Coverage of 1,05,000 ha area under bamboo in two years by ensuring adequate stocks of selected genetically superior quality planting material. Promotion and diversification of bamboo products through establishment of micro, small, medium & large processing units and development of value chain in bamboo. Setting up and strengthening of bamboo mandi/bazaars/rural haats, including promoting online trade. Enhanced cooperation within the country related to research, technology, product development, machinery, trade information and knowledge sharing platform particularly for NE States to give a boost to the low key bamboo based industry in the country.
The NBM will be a sub-scheme of National Mission on Sustainable Agriculture (NMSA) under the umbrella scheme Krishonnati Yojana.
Funding Pattern: 60:40 between Centre and State Govt. for all States (excepting NE & Hilly states), 90:10 for the NE & Hilly States, and 100% for Union Territories/R&D Institutes/Bamboo Technology Support Groups (BTSGs) and National Level Agencies.
Source : PIB
Nilekani Panel to strengthen the Digital Payments Ecosystem:
The Reserve Bank of India (RBI) has constituted a high-level committee under Nandan Nilekani to suggest measures to strengthen the safety and security of digital payments in the country.
RBI has provided the following terms of reference for the committee:
To encourage digitisation of payments and enhance financial inclusion through digitization.
Reviewing the existing status of digitisation of payments in the country, identifying the current gaps in the ecosystem and suggesting ways to bridge them.
Assessing the current levels of digital payments in financial inclusion.
Suggest measures to strengthen the safety and security of digital payments.
Suggest a road map for increasing customer confidence and trust while accessing financial services through digital modes.
Undertake cross-country analysis to identify best practices to accelerate digitisation of the economy and financial inclusion through greater use of digital payments.
Suggest a medium-term strategy for deepening of digital payments.
First female chief economist of IMF:
Gita Gopinath has joined International Monetary Fund as its chief economist. She is the first woman to occupy the post of chief economist of IMF. She is the 11th chief economist of the IMF.
Role of Chief Economist: The Chief Economist is also the Director of the Fund’s Research Department and is responsible for providing independent advice to the Fund on its policy issues, integrating ideas of the research in the design of policies, conveying these ideas to the policymakers inside and outside the fund and managing all research done at IMF. The Chief Economist is part of the senior leadership team of the IMF and directly advises the Managing Director. The Chief Economist also leads about a hundred PhD economists in the Research Department.
RBI allows tokenization of card transactions
The Reserve Bank of India has allowed tokenization of debit, credit and prepaid card transactions to enhance the safety of the digital payments ecosystem in the country. The bank has offered permission for the process using all types of payment services and methods, including near-field communication (NFC), magnetic secure transmission (MST), in-app payment methods and cloud services.
What is Tokenization?
Tokenization will replace card details with a code, called a “token,” which will be specifically for the card, the token requestor and the device being used to pay. Instead of the card’s details, the token will act as the card at point of sale (POS) terminals and quick response (QR) code payment systems. The goal of the process is to improve the safety and security of payments.
Gold monetization program
Reserve Bank of India has allowed central and state governments and entities owned by them to deposit gold under its Gold Monetization Scheme. Furthermore, charitable institutions have also been made eligible to deposit gold with banks to earn interest under the program.
Gold Monetization Scheme:
Gold Monetization Scheme was launched in 2015. The basic aim of this scheme is to monetise all the gold which is lying idle with individuals or institutions like banks.
The key features of Gold Monetization scheme are as follows:
The persons can open Gold Saving Account in designated banks and anyone can deposit physical gold via BIS certified collection, purity testing centres (CPTCs). The minimum amount of gold thus deposited is 30 gms, no upper limit. The gold is deposited for short term (1-3 years), medium term (5-7 years) and long term (12-15 years). The gold thus collected is sent to refineries and banks have tripartite / bipartite agreements with refineries and CPTCs. On maturity, one can get back the cash / physical gold for short term deposits and cash only for long term deposits. The scheme allows banks’ customers to deposit their idle gold holdings for a fixed period in return for interest in the range of 2.25 per cent to 2.50 per cent.
‘Private consumption, a $6 tn opportunity’
WEF has released a report titled Future of Consumption in Fast-Growth Consumer Market – India.
Highlights of the report:
As per the report, domestic private consumption, that accounts for a major portion of India’s gross domestic product (GDP), is expected to develop into a $6 trillion growth opportunity that would make India the world’s third-largest economy by 2030. Currently it is at $1.5 trillion. The potential, however, offers both challenges and opportunities as India would have to address critical societal issues, including skill development and employment of the future workforce, socio-economic inclusion of rural India and creating a healthy and sustainable future for its citizens. If realised, this would make India’s consumer market, the third-largest in the world, behind the U.S. and China.
Major driving factors: The future of consumption in India in 2030 is anchored in rising incomes and a broad-based pattern of growth and benefit sharing. The growth of the middle class would lift nearly 25 million households out of poverty and further, India would have 700 million millennials and Gen Z consumers, who have grown up in a more open and confident country.
The potential would only materialise if business and policy-makers pursue an inclusive approach towards the economic and consumption growth. The study identified three critical societal challenges that need to be addressed.
Skill gaps: With nearly 10-12 million working-age people expected to emerge in India over the next decade, the country faces a huge challenge in providing the workforce with the right skills. More than one-half of Indian workers will require reskilling by 2022 to meet the talent demands of the future, stated the report.
Access-barriers: India will have to manage socio-economic inclusion of rural India as, by 2030, 40% of Indians will be urban residents. Physical connectivity, digital connectivity and financial inclusion income is constraining the spending and well-being of rural dwellers, and these ‘access-barriers’ need to be addressed to ensure social and economic inclusion in India over the next decade.
Business and policy-makers will have to take the initiative on improving health and liveability for India’s citizens by providing them with access to affordable healthcare, promoting sustainable development, and seeking solutions to urban congestion.
Partnership Summit to be held in Mumbai
The Partnership Summit provides for a global platform to dialogue, debate, deliberate and engage Indian and global leaders on economic policy and growth trends in India. The 25th edition of the Partnership Summit would be inaugurated by Vice President of India, M Venkaiah Naidu in Mumbai. The Partnership Summit is being organized by the Department of Industrial Policy and Promotion, Ministry of Commerce & Industry, Government of India, State Government of Maharashtra and Confederation of Indian Industry. The Partnership Summit 2019 will showcase India in the present landscape of an emerging “New India” and the “New Global Economic Address”.
The sessions will be held on the following themes in the Partnership Summit:
Partnering with New India
Reforms and De-regulation – Strategies to Boost Investment
The Infra Expanse – A Super Imperative for Growth
The Inclusion Dynamics – A Digital Wireframe for all
The Summit will be presided by Union Minister of Commerce & Industry, Suresh Prabhu. He will deliver the keynote address. A Special address will be delivered by Minister of Trade of South Korea, Kim Hyun Chong and Minister of Economy of UAE, Sultan bin Saeed Al Mansoori.
Cabinet approves Currency Swap Agreement with Japan
The Union Cabinet has approved India’s Currency Swap Agreement with Japan. The $75-billion bilateral currency swap arrangement is a milestone in mutual economic cooperation and special strategic and global partnership between two countries.
Currency Swap Agreements
A Currency swap agreement is a foreign exchange agreement between two parties to exchange a given amount of one currency for another and, after a specified period of time, to give back the original amounts swapped.
How Currency Swap Agreement can benefit India?
The currency swap agreement can be beneficial to India in the following ways:
The currency swap facilities make it easier for India to pay for its imports. This aids in addressing the challenge of depreciation.
Since the Currency swap agreement involves trading in local currencies. Countries pay for imports and exports through their own currencies rather than involving a third country currency. This does away with the charges involved in multiple currency exchanges.
The currency swap makes it easier to improve liquidity conditions.
Currency swap agreements help in saving for a rainy day when the economy is not looking in good shape.
The swap agreements also contribute towards stabilising the country’s balance of payments (BoP) position.
The agreement aids in improving the confidence in the Indian market.
Together with ensuring that the agreed amount of capital is available to India, it also brings down the cost of capital for Indian entities while accessing the foreign capital market.
The Currency Swap Agreement was concluded between Prime Minister Narendra Modi and Japan’s Prime Minister Shinzo Abe during the summit level meeting at Yamanashi, Japan.
Tata Steel’s Netherlands plant recognised as the Factory of the Future
The World Economic Forum has recognised Tata Steel’s plant at IJmuiden in the Netherlands as Manufacturing Lighthouse with state-of-the-art production facilities which successfully adopt and integrate the cutting-edge technologies of the future and drive financial and operational impact.
Recognition to Tata Steel
The recognition of the Tata Steel was due to the following factors:
Acknowledgement of the thriving culture of innovation at Tata Steel and advanced analytics team’s vision and commitment to realise more efficient, productive and responsible steelmaking. The pioneering use of advanced analytics to optimise the way raw materials are used, increase the yield at every step of the steelmaking process and further improve logistics between the different processes and the quality of the product for customers.
The Advanced Analytics Academy gives Tata Steel employees an impetus to find solutions for waste reduction, quality improvement and overall reliability of production processes.
The World Economic Forum organizes a network of leading intelligent production companies as Manufacturing Lighthouses under its ‘Shaping the Future of Production’ initiative to allow the exchange of knowledge and promote collaborations in the area of the ‘Fourth Industrial Revolution’ in production. These Manufacturing Lighthouses showcases how best a strategy for the Fourth Industrial Revolution be developed by training employees, cooperating with other parties, implementing changes in the workplace and in the value chain through greater efficiency and contribute to reducing the climate footprint of production companies by 50 per cent.
Important decisions of the GST council meet
The GST Council meeting on January 10 has taken the following important decisions:
The exemption limit for Goods and Services Tax (GST) registration has been increased to Rs 40 lakh from the current Rs 20 lakh to ease the cost of compliance for small taxpayers or micro, small and medium enterprises (MSMEs). This exemption limit has been doubled to Rs 20 lakh for North-Eastern and hilly states. The increased exemption limit of Rs 40 lakh is applicable for those businesses who deal in goods and also do intra-state trade and not for those who do inter-state transactions. The small States such as Puducherry which have a small assess base have been given the option to ‘opt in’ or move to a lower exemption and registration limit. The threshold limit for the compensation scheme under which small traders and businesses pay a 1 per cent tax based on turnover has been increased to Rs 1.5 crore. The dealer under the composition scheme cannot issue tax invoice because the dealer cannot charge tax from their customers. They need to pay the tax out of their own pocket. The dealer is required to issue the bill of supply. Service providers and suppliers of both goods and services up to a turnover of Rs 50 lakh would be eligible to opt for the GST composition scheme and pay a tax of 6 per cent. Kerala has been allowed to levy a 1 per cent calamity cess on the intra-state sale of goods and services for a period of up to two years to mobilise revenues to meet the cost of rehabilitating parts of states that were ravaged by floods. A seven-member group of ministers would be formed to address the differences of opinion emerged at the meeting on the issues like the issues related to the lottery. These decisions would be beneficial for MSMEs, which were adversely affected after the introduction of GST.
Goods and Services Tax Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax. The GST Council is chaired by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers in-charge of Finance or Taxation of all the States. Every decision of the Goods and Services Tax Council shall be taken by a majority of not less than three-fourths of the weighted votes of the members present and voting. The vote of the Central Government shall have the weightage of one-third of the total votes cast, and the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting
RBI tweaks Gold Monetisation Scheme
The Reserve Bank of India (RBI) has made changes with the Gold Monetisation Scheme (GMS) to allow charitable institutions, central government entities and state government entities to deposit gold under GMS.
Now the entities allowed to deposit gold under the scheme include Resident Indians [Individuals, HUFs, Proprietorship & Partnership firms, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations, Companies, charitable institutions, Central Government, State Government or any other entity owned by Central Government or State Government].
Why the ambit to deposit gold under the scheme was expanded?
The reasons for expanding the ambit are:
To bring out the unaccounted gold with the charitable institutions.
To enable the government agencies to deposit gold which they had confiscated.
Gold Monetisation Scheme
The Gold Monetisation Scheme was launched with the tagline Earn, while you secure. The scheme provides the dual benefit of, interest (denominated in gold) on the gold deposited and an option of encashing the gold at maturity. All the scheduled commercial banks except the RRBs are authorised to implement the scheme.
The gold deposits can be made under 3 term deposit plans:
Short term:1 to 3 years
Medium term:5 to 7 years
Long term:12 to 15 years
Short-term deposit rates are decided by the banks concerned, while the medium and long-term deposit interest rates are decided by the Central Government.
The minimum deposit one can make in a gold monetisation scheme is 30 grams of any purity and there is no maximum limit. The capital gains from the scheme are exempted from capital gains tax, wealth tax and income tax.
National Clean Air Programme Launched
The Union Environment Minister Harsh Vardhan launched the National Clean Air Programme (NCAP). The programme aims to tackle the challenge of increasing pollution in the cities and towns.
Features of the Programme
The important features of the programme are:
It is a five-year action plan with a tentative target of 20-30% reduction in concentrations of PM10 and PM2.5 by 2024, with 2017 as the base year.
The plan covers 102 non-attainment cities, across 23 states and Union territories, which were identified by the Central Pollution Control Board (CPCB) on the basis of their ambient air quality data between 2011 and 2015.
Cities are considered as Non-attainment cities, if they were consistently showing poorer air quality than the National Ambient Air Quality Standards. Cities included under the list of Non-attainment cities Delhi, Varanasi, Bhopal, Kolkata, Noida, Muzaffarpur, and Mumbai.
The centre plans to scale up the air quality monitoring network across India under the programme.
Studies would be conducted across 102 non-attainment cities to ascertain pollution sources and the extent of their contribution.
The Apex committee in the Ministry of Environment would periodically review the progress of these components on the basis of appropriate indicators, which will be evolved.
Each city would be asked to develop its own action plan for implementation based on sources of pollution.
A three-tier system, including real-time physical data collection, data archiving, and an action trigger system in all 102 cities, besides extensive plantation plans, research on clean-technologies, landscaping of major arterial roads, and stringent industrial standards are proposed under the plan.
State-level plans of e-mobility in the two-wheeler sector, rapid augmentation of charging infrastructure, stringent implementation of BS-VI norms, boosting public transportation system, and adoption of third-party audits for polluting industries are proposed part of the plan.
The plan document is not binding on the states since the document is not a legal document.
The Environmentalists criticised the plan for not making it legally binding. The Environmentalists demand a more stringent action to ensure the safety and well being of millions of lives risk because of the continuously growing air pollution crisis.
Banks to review mudra loan book
The finance ministry has asked the banks to review all loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY or Mudra loan scheme), as the non-performing assets (NPA) have crossed Rs 11,000 crore within three years of the launch of the scheme. The rising NPAs under the scheme are a matter of concern. It is already three years and there is a need to review how the banks are sanctioning the loans. The RBI has already flagged its concerns regarding the bad loans to the government.
What went wrong?
In order to push the scheme, there had been an overemphasis on banks to meet loan disbursal targets. In the race to meet the target, the credentials of loan-seekers were not being properly verified and in many instances, loans were being given without any collateral or security, making it difficult for the banks to go after defaulters.
Pradhan Mantri MUDRA Yojana (PMMY) scheme:
The PMMY Scheme was launched in April, 2015. The scheme’s objective is to refinance collateral-free loans given by the lenders to small borrowers. The scheme, which has a corpus of Rs 20,000 crore, can lend between Rs 50,000 and Rs 10 lakh to small entrepreneurs. Banks and MFIs can draw refinance under the MUDRA Scheme after becoming member-lending institutions of MUDRA. Mudra Loans are available for non-agricultural activities upto Rs. 10 lakh and activities allied to agriculture such as Dairy, Poultry, Bee Keeping etc, are also covered. Mudra’s unique features include a Mudra Card which permits access to Working Capital through ATMs and Card Machines.
There are three types of loans under PMMY:
Shishu (up to Rs.50,000).
Kishore (from Rs.50,001 to Rs.5 lakh).
Tarun (from Rs.500,001 to Rs.10,00,000).
Objectives of the scheme:
Fund the unfunded: Those who have a business plan to generate income from a non-farm activity like manufacturing, processing, trading or service sector but don’t have enough capital to invest can take loans up to Rs 10 lakh.
Micro finance institutions (MFI) monitoring and regulation: With the help of MUDRA bank, the network of microfinance institutions will be monitored. New registration will also be done.
Promote financial inclusion: With the aim to reach Last mile credit delivery to micro businesses taking help of technology solutions, it further adds to the vision of financial inclusion.
Reduce jobless economic growth: Providing micro enterprises with credit facility will help generate employment sources and an overall increase in GDP.
Integration of Informal economy into Formal sector: It will help India also grow its tax base as incomes from the informal sector are non-taxed.
The business case for 5G
The main advantage of 5G technology is that it will allow users to access high speed internet and more bandwidth.
5G Technology – 5G is the next generation mobile Internet connectivity that would offer much faster and more reliable networks, which would form the backbone for the emerging era of Internet of Things (IoT).
Penetration of 4G – As per Mobile Broadband Index released
Due to launch of 4G service, India witnessed 82 % growth in mobile traffic.
Mobile data traffic consumption driven by video contributed to 65-67 %.
Average monthly data usage has been increased by 11 GB which is on par with developed market.
In terms of connectivity India stands at 109th position in a list of 124 countries which is lower than Pakistan, Myanmar and Sri Lanka. Low connectivity leads to congestion and poor internet speed and it’s getting worse when number of users are increasing.
Argument in Favor of 5G:
5G technology is capable to provide 10 times more speed that 4G technology.
Main advantage claimed is that 5G can resolve the issue of congestion especially when large number of users are concentrated at a single place. This mean user can stream videos regardless of how many people are streaming at the same time.
From Industries perspective 5G can bring evolution when Internet of Things (IoT) concept, will gain momentum. Industries involved into manufacturing, energy and utilities will have ample of opportunity.
Latency is very less say about 1-millisecond
Up to 100x number of connected devices per unit area (compared with 4G LTE)
90% reduction in network energy usage
Up to 10-year battery life for low power IoT devices
Argument against 5G in India and Globally.
Investment – Implementation will require enormous and unjustifiable capital investments.
Lack of Regulatory bodies in India’s Telecom sector – 5G needs a proper strategy for its implementation and with lack of regulatory bodies, it seems impossible for India to achieve in near future.
India lacks in Fibre Infrastructure – Optical Fibre plays a key role in the implementation of any new generation of network. Due to lack of Fibre infrastructure, India faces poor quality of service and call drop issues which indicate towards country’s low investment in Fibre and backhaul infrastructure.
Government promulgates Companies (Amendment) Ordinance, 2019
The government has re-promulgated the Companies (Amendment) Ordinance, 2019 to amend the Companies Act 2013. Even though the Companies (Amendment) Bill, 2018 for this effect was passed in Lok Sabha, it was pending before Rajya Sabha. The ordinance was first issued in November and would have ceased to be operational from January 21. Hence the government has decided to re-promulgate the ordinance.
Features of the Companies (Amendment) Bill, 2018
The Loksabha had passed the Companies (Amendment) Bill, 2018. The bill had important features like re-categorisation of offences, reducing the burden on special courts and bringing down the applicable penalties for small companies, enhancing the jurisdiction of Regional Director for compounding offences, empowers the central government to allow certain companies to have a different financial year instead of being determined by the National Company Law Tribunal among others. The main objective of the amendment bill was the promotion of ease of doing business along with better corporate compliance.
Promulgation of Ordinance
Article 123 of the Constitution empowers the President to promulgate Ordinances to amend certain laws when either of the two Houses of Parliament is not in session and hence it is not possible to enact laws in the Parliament. Ordinances must be must be approved by Parliament within six weeks of reassembling or they shall cease to operate. Similar power to promulgate the ordinance has been provided to the Governor of the state under Article 213. Ordinances were provided as a stop-gap arrangement and not as an alternative legislation process. The promulgation of the ordinance is subject to judicial review
Sovereign gold bonds on sale between Jan 14-18: Govt
The government has decided to issue new series of sovereign gold bonds between January 14 and January 18 at Rs 3,214 per gram and those who subscribe to the bonds online will get a discount of Rs 50 per gram.
Sovereign gold bond scheme
The Sovereign gold bond scheme was introduced by the government in 2015 to reduce the demand for physical gold by shifting a part of the physical bars and coins purchased every year for investment into gold bonds. The features of the scheme are: Sovereign gold bonds are issued by the RBI on behalf of the government.
Sovereign gold bonds are denominated in grams of gold and investments can be done in multiples of one gram with a maximum limit of 4 kg per person.
The Resident Indians including individuals (in his capacity as an individual, or on behalf of minor child, or jointly with any other individual), HUFs, Trusts, Universities and Charitable Institutions are eligible to avail these bonds.
The tenor of the Bond is of 8 years with an exit option in 5th, 6th and 7th year.
The investors will also be compensated at a fixed interest rate of 2.50 per cent per annum payable semi-annually on the nominal value. Bonds can be used as collateral for loans. The interest on Gold Bonds shall be taxable and are exempted from the capital gains tax on redemption. Bonds will be tradable on stock exchanges. The Sovereign gold bonds also aid in maintaining the current account deficit as most of the demand for gold in India is met through imports.
National Action Plan for Drug Demand Reduction (2018-2023)
The Ministry of Social Justice and Empowerment has drafted National Action Plan for Drug Demand Reduction (2018-2023) for addressing the problem of drug and substance abuse in the country, dumping a long-pending draft policy on the matter.
Components of the Action Plan
The components of the National Action Plan for Drug Demand Reduction (2018-2023) are: The Action Plan aims to employ a multi-pronged strategy involving education, de-addiction and rehabilitation of affected individuals and their families to address the issue. The Action Plan focuses on preventive education, awareness generation, counselling, treatment and rehabilitation of drug-dependent people, besides training and capacity-building of service providers through the collaborative efforts of the Centre, state and NGOs. Several measures like coordination with implementing agencies for controlling the sale of sedatives, painkillers and muscle relaxant drugs, holding awareness generation programmes and checking online sale of drugs by stringent monitoring by the cyber cell are proposed under the Action Plan. The Action Plan also proposes awareness generation through social, print, digital and online media, and engagement of celebrities, besides strengthening the national toll-free helpline for drug prevention. The Action Plan calls for persuading principals, directors, vice chancellors of educational institutions to ensure that no drugs are sold within/nearby the campus. The Action Plan also aims at increasing community participation and public cooperation in the reduction of demand by involving Panchayati Raj institutions, Urban Local Bodies, Nehru Yuva Kendra Sangathan and other local groups like Mahila Mandals, self-help groups etc to tackle the menace of drugs. A steering committee would be constituted under the chairmanship of the secretary, Social Justice Ministry, and with representatives from the Ministries of Health, Human Resource Development, Women and Child Development, Home Affairs, Skill development and Entrepreneurship to monitor the effective implementation of the Action Plan. The Action Plan proposes module for re-treatment, ongoing treatment and post-treatment of addicts of different categories and age groups and database on substance use. The Ministry of Social Justice and Empowerment in collaboration with the National Drug Dependence Treatment Centre (NDDTC) under the AIIMS, is conducting a national survey on the extent and pattern of substance abuse.
Relaxation of Norms under PCA Framework
It is said that the finance ministry and the Reserve Bank of India are working on providing some relaxation on the prompt corrective action (PCA) framework for stressed banks.
Prompt Corrective Action (PCA) Framework
Prompt Corrective Action (PCA) framework has been issued by the RBI to maintain the sound financial health of banks. The RBI will initiate certain structured and discretionary actions for the bank under the PCA. The PCA framework kicks in when the Banks breach any of the three key regulatory trigger points
Capital to risk-weighted assets ratio
Net non-performing assets
Return on assets.
The PCA framework is aimed at nudging the banks to take corrective measures in a timely manner, in order to restore their financial health. Eleven Banks which are under PCA framework are Dena Bank, Central Bank of India, Bank of Maharashtra, UCO Bank, IDBI Bank, Oriental Bank of Commerce, Indian Overseas Bank, Corporation Bank, Bank of India, Allahabad Bank and United Bank of India.
Why there is a proposal for providing relaxation now?
After several measures taken for capital infusion in the Public Sector Banks, the Banks are well-capitalised. Even though the banks have not only shown improvement on recoveries but have further de-risked their portfolios. The relaxation would aid banks in exiting the PCA framework. The Parliamentary Committee on Finance had observed that “It is not clear as to how these banks will turn around their operations with the existing curbs on lending and even deposit-taking in the case of some. This could trigger a vicious cycle in the banking sector and the economy at large”. The committee had recommended reviewing the PCA framework.
PSU banks to bring down govt equity to 52%
The Finance Ministry has asked the public sector banks to gradually reduce the government’s equity to 52 per cent. Currently, some of the public sector banks have government’s holding beyond 75 per cent.
Why the disinvestment?
The decision to bring down the government’s equity to 52 per cent was taken due to the following reasons:
Dilution of the government’s stake will help banks to meet 25 per cent public float norms set by the SEBI.
To align with the best corporate practices.
Encourage the banks to follow the prudential lending norms.
The Ministry of Finance has authorised the Public Sector Banks to take necessary steps in bringing down the government equity based on the marketing conditions.
Rules of SEBI
A notification under the Securities Contracts Regulations (Amendment) Rules makes it mandatory for all listed entities to have a minimum public float of 25%.
SEBI: The Securities and Exchange Board of India (SEBI) was established under the provisions of the Securities and Exchange Board of India Act, 1992 on April 12, 1992. SEBI aims to protect the interests of investors in securities and to promote the development and regulate the securities market in the country.
Vision 2040 document: Aviation
The Union Minister for Civil Aviation Suresh Prabhu released the Vision 2040 document in the Global Aviation Summit 2019. The Global Aviation Summit 2019 is organized in Mumbai with the theme ‘Flying for All’.
Forecasts of the Vision Document
The forecasts of the Vision 2040 document are:
The document estimates that India will need 200 airports and an investment of $40-50 billion to handle at least 1.1 billion passengers flying to, from and within the country.
It is estimated that passenger traffic (to, from and within India) for FY 2040 would be 1.1 billion, which is six times the 187 million traffic recorded in FY 2018.
Most of the airports’ passenger capacity will saturate in the next 15 years and India will have to nearly double the count from 99 to 200.
Even the second airports in regions like Delhi and Mumbai would be saturated by 2040 and will require a third airport.
In order to cater to this huge passenger traffic, India will have to holistically develop airports having all stakeholders on board. This has to be coupled with providing quality service to flyers.
The scheduled airline fleet will rise from 622, at the end of March 2018, to 2,360 till March 2040.
Even though India is a “price sensitive” market, gradual rise in per capita incomes, increased (perceived) value of ‘time’, propensity for leisure and tourism will lead to more and more Indians using airways as a medium to travel.
Recommendations made in the Vision Document
The Vision Document makes the following recommendations:
Ushering in amendments to Land Acquisition, Rehabilitation and Restructuring Act, 2013 and adopting “land-pooling” techniques to develop newer airports.
Lower Goods and Services Tax (GST) since taxes add pressure on the airline’s bottom line. Aviation turbine fuel (ATF) to be brought under GST.
The Vision document for 2040 also addresses areas of concerns for maintenance, repair and overhaul (MRO), human resource development, aviation safety and security, ground handling mechanism, air navigation and remotely piloted aircraft (drones).
GoM to address GST issues related of the Real Estate Sector
The Union government has set up a seven-member Group of Ministers (GoM) to examine and suggest ways to resolve the issues plaguing the real estate sector after the implementation of the Goods and Services Tax (GST).
Terms of Reference
The Terms of reference of the panel are:
Suggest a plan of action to address the problems facing both developers and buyers.
Examine the various aspects of levying GST on the transfer of development rights and development rights in a joint development agreement and suitable model.
Look at the legality of inclusion or exclusion of land or any other ingredient in the scheme and suggest a valuation mechanism.
Examine GST levy on Transfer of Development Rights and development rights in a joint development agreement and suitable model.
The GoM headed Gujarat deputy chief minister Nitin Patel has finance ministers of Kerala, Punjab, Karnataka, Maharashtra and Uttar Pradesh and Goa’s Minister of Panchayat as members.
Waterway projects to boost N-E connectivity
The Centre is working on developing a network of waterway projects in the North-East and neighbouring countries like Bangladesh to enhance connectivity to the region as part of its Act East policy.
Current scenario of connectivity in North-East
The north-eastern states of India are dependent on a narrow stretch of about 22-kilometre land (popularly known as the Chicken neck) in West Bengal’s Siliguri for connectivity to the rest of India
Proposed International Waterway Projects
India and Bangladesh:
309-kilometre Ashuganj-Zakiganj stretch of the Kushiyara River
146-kilometre Sirajganj-Daikhowa of Jamuna River
Note: India-Bangladesh Protocol on Inland Water Transit and Trade (PIWTT), renewed in 2015 allows Indian and Bangladeshi vessels to use identified waterways in the two countries. The protocol is an agreement between the two governments for the transportation of goods and keeping their respective waterways navigable while providing infrastructure facilities
India and Myanmar:
Kaladan Multi-Modal Transit Transport Project: It connects Kolkata to Sittwe port by sea from there to Paletwa through river Kaladan and finally to Zorinpui at Mizoram border by road.
Significance of the Projects
Proposed Sirajganj-Daikhowa waterway will facilitate connectivity between National Waterway-1 (the Ganga) and National Waterway-2 (the Brahmaputra)
It will also enable movement of larger vessels from Varanasi in Uttar Pradesh to Assam’s Sadiya, via Bangladesh.
Kaladan Multi-Modal Transit Transport Project is expected to contribute to North-East’s economic development by opening up the sea route to it.
The Kaladan project will also reduce pressure on the Siliguri Corridor
Indians over 65 and under 15 can now visit Nepal and Bhutan with Aadhaar
According to a Home Ministry communiqué, Aadhaar cards have been made valid travel documents for Indians under 15 and over 65 years travelling to Nepal and Bhutan. Indian citizens going to Nepal and Bhutan don’t need a visa if they have a valid passport, a photo identity card issued by the government of India or an election ID card issued by the Election Commission. Earlier, persons over 65 and under 15 could show their PAN card, driving licence, Central Government Health Service (CGHS) card or ration card as identity proof but not the Aadhaar card. It is important to note that Indians other than those under 15 and above 65years will not be able to use Aadhaar to travel to Nepal and Bhutan
Detecting the movement of illegitimate funds is a challenging task
Money laundering is a process of converting illegitimate money into legitimate money to avoid law enforcement agencies scrutiny
Forms of Illegitimate Money:
Black Money: resulting from tax evasion
Pink Money: resulting from drug trafficking
Red Money: resulting from crime acts
International’s Efforts to counter Money Laundering:
1988: United Nations convention (Vienna convention) to prevent drug-related money laundering: includes international cooperation to fight money laundering and relaxation in bank secrecy law to curb criminal use of financial system
1989: Basel Committee on Banking Supervision decided that banks should assist law enforcement agencies in tackling money laundering
1989: Financial Action Task Force (FATF) a intergovernmental body created for development and promotion of national and international policies to combat money laundering and terror financing. India became its member in 2010
1995: Egmont Group, consisting of Financial Intelligence Units (FIU) of 155 countries to enforce the international cooperation. India joined it in 2007
India’s Effort to counter Money Laundering:
2005: Prevention of Money Laundering Act 2002 (PMLA): primary agency responsible for enforcing the act is the Directorate of Enforcement
2004: Financial Intelligence Unit (FIU) : responsible for collecting intelligence from the financial sector and sharing it with investigative agencies
Smart Food Executive Council
Associations including the Asia-Pacific Association of Agricultural Research Institutions (APAARI), Forum for Agricultural Research in Africa (FARA), West and Central African Council for Agricultural Research and Development (CORAF), Food Agriculture and Natural Resources Policy Analysis Network (FANRPAN), and the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) together have formed the Smart Food Executive Council.
Smart Food Executive Council:
Formed under the aegis of the Smart Food Initiative that was launched in 2013.
Need: Stemmed from the strategic thinking around the need for food that fulfils the criteria of being good for the consumer, good for the planet and good for the farmer.
Objective: To diversify staples which can have the strongest impact on nutrition, the environment and farmer welfare.
Significance: Given that staples may typically constitute 70% of a meal and are often eaten three times a day, diversifying them can have a pronounced impact on overcoming malnutrition and poverty and coping with climate change and environmental degradation.
This would contribute to the Sustainable Development Goals (SDGs) for overcoming poverty and hunger (SDG 1 and 2), responsible consumption and production (SDG 12), along with adaptation to climate change (Goal 13). The approach taken will include gender equality (SDG 5) and action through partnerships (SDG 17). The Smart Food initiative is founded by the International Crops Research Institute for the Semi-Arid-Tropics (ICRISAT) and aims to build food systems where the food is good for you (highly nutritious), good for the planet and good for the smallholder farmer. It is an initiative which will initially focus on popularizing millets and sorghum.
Microsoft launches e-platform under Project ReWeave to help Handloom weavers
Microsoft India launched a new e-commerce platform ‘re-weave.in’ under project ReWeave to aid handloom weavers.
Benefits of e-commerce platform
The e-commerce platform would provide the following benefits:
The e-commerce platform would connect artisans to the buyers directly enabling them to expand to newer customers and markets.
Provide a platform to showcase signature collections created by the weaver communities, showcase traditional designs and products created from natural dyes to a broad set of customers.
The e-commerce platform would aid in weavers in increasing their income and earning a sustainable livelihood while also reviving traditional forgotten Indian art.
Project ReWeave was initiated by Microsoft India (R&D) Pvt. Limited in 2016 as part of its Philanthropies efforts, with the aim to revive the handloom weaving ecosystem in India. Under the initiative, Microsoft is working closely with NGO partner, Chaitanya Bharathi to provide infrastructure, financing and marketing support to help weaver families keep their weaving traditions alive by sustaining livelihoods.
New Advisory Committee Under NITI Aayog to Regulate Prices Of Medicines
Ministry of chemicals and fertilizers announced the formation of a standing committee on affordable medicines and health products (SCAMHP) to decide list of drugs which should be under price control. Currently, NPPA which is an autonomous body and responsible for regulating prices of medicines and health products such as stents under the National List of Essential Medicines (NLEM), besides monitoring prices of those that are not on the list. From now onwards, the NITI Aayog committee will decide which drugs should be under price control.
Current Pricing of Drugs: The Health ministry prepares the list of drugs eligible for price regulation. The department of pharmaceuticals (DoP) then incorporates NLEM into Schedule 1 of the Drugs (Prices Control) Order (DPCO). Following this, NPPA fixes the prices of drugs in this schedule.
Standing Committee on affordable medicines and health products (SCAMHP).
Committee will be headed by Niti Aayog Member (Health). Will be a recommending body to the National Pharmaceutical Pricing Authority (NPPA) regarding prices of pharmaceutical products. Committee has also been empowered to take any issues with respect to price control of the drugs. The committee can take a matter for examination, suo-moto or on the recommendations/request of DoP, NPPA and Department of Health & Family Welfare.
NPPA is an independent body under Department of Pharmaceuticals under the Union Ministry of Chemicals and Fertilizers.
Its functions are to: fix/revise the controlled bulk drugs prices and formulations, enforce prices and availability of the medicines under the Drugs (Prices Control) Order, 1995/2013, recover amounts overcharged by manufacturers for the controlled drugs from the consumers, monitor the prices of decontrolled drugs in order to keep them at reasonable levels. NPPA fixes ceiling price of essential medicines that are listed in Schedule I of DPCO, 2013. The calculation of prices cap for essential drugs is based on simple average of all medicines in particular therapeutic segment with sales of more than 1%. Medicines that are not under price control, manufacturers are allowed to increase the maximum retail price by 10% annually.
The National Pharmaceutical Pricing Authority (NPPA) has capped the prices of 31 more drugs. With these 31 drugs, the NPPA has brought 791 medicines under price control.
What is an Essential Medicine?
According to World Health Organization (WHO), Essential medicines are the medicines that “satisfy the priority health care needs of the population”. People should have access to these medicines at all times in sufficient amounts. The prices should be at generally affordable levels.
What is National List of Essential Medicines (NLEM)?
NLEM is a list of medicines prepared by the Ministry of Health and Family Welfare based on essentiality and made part of the Drugs Price Control Orders (DPCO), 2013 (DPCO 2013) in the form of first Schedule of the DPCO 2013. NLEM is the basis for the National Pharmaceutical Pricing Authority (NPPA), to revise the list of medicines that should come under government price control. The first National List of Essential Medicines (NLEM) of India was prepared and released in 1996. This list was subsequently revised in 2003, 2011 and 2015.
What is Drugs Price Control Orders (DPCO), 2013 (DPCO 2013)?
DPCO 2013 is an order issued by the Central Government having power under section 3 of the Essential Commodity Act, 1955 which enables it to fix the prices of essential bulk drugs and their formulations mentioned under the NLEM. The formulations which are included in NLEM i.e. first Schedule of the DPCO 2013 are known as Scheduled Formulations. Any person acting in contravention of the DPCO 2013 is punishable under section 7 of the Essential Commodities Act, 1955.
Centre’s debt-to-GDP falls, States’ rises
According to the Status Paper on Government Debt for 2017-18, Centre’s debt-to-GDP has fallen while State’s debt-to-GDP increased. Centre’s total debt as a percentage of GDP reduced to 46.5% in 2017-18 from 47.5% as of March 31, 2014. Total debt of the States rose to 24% in 2017-18 (increase of 63%), and is estimated to be 24.3% in 2018-19. Outstanding liabilities of States have increased sharply during 2015-16 and 2016-17, following the issuance of UDAY bonds Further, ratings agencies have predicted that the combined fiscal deficit of the States to be 3.2% of GDP in financial year 2020.State governments showed a tendency to hold large cash surpluses/investments in Cash Balance Investment Account on a consistent basis and resorted to market borrowings to finance their GFD (Gross Fiscal Deficit)
Debt-to-GDP Ratio: It is the ratio between a government’s debt and its gross domestic product (GDP)
NK.Singh Committee on Fiscal Responsibility and Budget Management: It recommended that the debt-to GDP ratio should be 40% for the Centre and 20% for the States, respectively, by 2023. It said that the 60% consolidated Central and State debt limit was consistent with international best practices, and was an essential parameter to attract a better rating from the credit ratings agencies.
Fiscal Responsibility and Budget Management Act (FRBMA)
The FRBM Act 2003 in its amended form was passed by the government to bring fiscal discipline and to implement a prudent fiscal policy. High fiscal deficit was the one major macroeconomic problem faced by Indian economy around 2000. It was argued that high deficits lead to inflation, reduces consumption, result in a crowding out of the private sector investment, rising unemployment and falling living standards of the people. Thus arose a need to institutionalize a new fiscal discipline framework.
Features of FRBM Act:
• The revenue deficit should be reduced to an amount equivalent by 0.5% or more of GDP every year, beginning with the financial year 2004-05 and eliminate revenue deficit by March, 2009,
• The fiscal deficit should be reduced by 0.3% or more of the GDP every year, beginning with the financial year 2004-05and bringing it down to 3% of GDP by March 2009.
• The Central Government should not provide guarantees in excess of 0.5% of GDP in any financial year, beginning with 2004-05
• The Central Government should not assume additional liabilities in excess of 9% of GDP for financial year 2004-05 and progressive reduction of this limit by at least 1 % point of GDP in each subsequent year
• The RBI should not subscribe to primary issues of Central Government securities from the year 2006-07.
• The Finance Minister to make a quarterly review of trends in receipts and expenditure in relation to budget and place the outcome of such reviews before both the Houses of Parliament.
• The Central Government should specify four fiscal indicators- Fiscal deficit as a percentage of GDP; Revenue deficit as a percentage of GDP; Tax revenue as a percentage of GDP; Total outstanding liabilities as percentage of GDP.
• The Central Government should place in each financial year before houses of Parliament three statements-Medium Term Fiscal Policy Statement; Fiscal policy strategy statement; Macro-economic Framework statement along with Annual Financial Statement and Demands for grants.
• The FRBM Act States that the Central Government shall not borrow from RBI except by way of means and advances to meet temporary excess of cash disbursements over cash receipts.
• The revenue and fiscal deficit may exceed the targets specified in Rules only on grounds of national security or national calamity or such other exceptional grounds as the Central Government may specify
FRBM- The Impact and Limitations
A. Impact on deficits
FRBM act has been violated more than adhered to since its enactment.
• Since its enactment, the act has been paused for four times including a reset of the fiscal deficit target in 2008-09 following the global financial crisis.
• In 2010-11, Government replaced revenue deficit with the concept of Effective Revenue Deficit in the budget documents.
• In Budget 2012-13, the finance act changed the FRBM act and it brought in a new commitment of eliminating the effective revenue deficit. The amended rules extended the time for elimination of Effective revenue deficit by March 2015 and bringing down fiscal deficit to 3% by March 2017.
• The Act has helped on the issues relating to fiscal consolidation due to the mandatory medium-term and strategy statements which are required to be presented annually before Parliament. Implementing the Act, the government had managed to cut the fiscal deficit to 2.7% of GDP and revenue deficit to 1.1% of GDP in 2007–08.
B. Impact on development
Has the law been successful to ensure that the growth momentum is maintained, without either significantly fueling inflation or curtailing socio-economic welfare expenditure?
• While we notice a drastic fall in deficits, it has largely been on account of reductions in critical sectors of the economy.The Union Government’s development expenditure as proportion of GDP declined in the post FRBM era from 7.49% in 2002-03 to 6.42 % in 2005-06.
• An analysis of revenue account of the development expenditure by states shows that in almost all sectors there has been a decline in the post FRBM era. In case of education, it declined from around 2.5 % of GDP in 2002-03 to less than 2.2 % of GDP in 2005-06. In Health sector, the decline has been from 0.6% to 0.49 % and in agriculture, from 0.67 % to 0.58 %. In overall Social sectors, it declined from 4.5 %of GDP to 4.16 % of GDP during the period.
Thus the act and its rules are adverse to social sector expenditure necessary to create productive assets and general upliftment of rural poor of India.
C. Impact on credit growth
Further the FRBM Act ignores the possible inverse link between fiscal deficit (fiscal expansion) and bank credit (monetary expansion). That is, if credit growth falls, fiscal deficit may need to rise and if credit rises, fiscal deficit ought to fall — to ensure adequate money supply to the economy.
• Data on money supply growth, bank credit and GDP establishes that, in the last six years, both money supply growth and credit expansion have halved absolutely and in relation to GDP growth. Even the combined fiscal deficit (fiscal expansion) and credit growth (monetary expansion) as a percentage of GDP has halved from 17.4 per cent in 2009-10 to 8.8 per cent, which is less than nominal GDP growth. Thus the FRBM Act has not only reduced fiscal deficit but also starved the growing economy from much needed investment.
D. FRBM Act as a borrowed concept
The 3 per cent fiscal deficit limit which emerged from the famous Maastricht Treaty to form the European Union (EU) in 1992 was applied to Indian context without any modifications.
• Fiscal deficit is the quantum amount a nation borrows to meet expenditure. As long as we restrict borrowing to investment needs it does not seem logical to say why a nation should borrow only 3 per cent of its GDP to make investments. The investment needs are independently determined by the structural developments in the economy, its stock of capital and its planned growth profile.
Thus the FRBM Act has faced numerous hurdles in its implementation and has become a subject of animated debate. It is in this context the Finance Minister’s Budget proposal to have a committee to review the implementation of the FRBM Act is right step to ask the question whether the law has served the purposes for which it was envisaged.
Difference Among Tax Exemption, Tax Deduction and Tax Rebate
Tax exemptions: Reduces the overall taxable income. It refers to income, expenditure or investment on which no tax is levied. Tax exemptions can be claimed from a specific source of income and not from the gross total income. For example, once can claim House Rent Allowance (HRA) and Leave Travel Allowance (LTA) which will get deducted from gross income and hence lower taxable income.
Tax deductions: This is a reduction from a taxpayer’s gross income as a result of expenses like transportation charges, medical expenses, tuition fees etc. The aim is to reduce the amount of one’s income on which tax will be levied. For example, Deduction under Section 80C for specific types of investments like Provident Fund, Public Provident Fund, National Savings Certificate,
Tax Credit: It is a tax incentive, which is used by the government to encourage the payment of taxes. The major advantage of a tax credit is that it directly minimizes the tax liability. For example, Input Tax Credit and Income Tax Credit etc.
Tax rebates: A tax rebate is a refund on taxes when an individual has lower tax liability than the tax he or she has paid. A tax rebate helps to reduce the tax burden on individuals in the low-income bracket. Income tax rebates apply to those who have an annual income under Rs. 5 lakhs and the individual is eligible for a rebate of their entire tax payable or Rs. 2,500, whichever is less.
Tax Evasion: Tax evasion is a deliberate attempt by a person/organisation/entity to avoid paying a true tax liability. In some countries it is a criminal offence.
Tax Avoidance: Tax Avoidance is the artful and knowledgeable filing and reporting of income and write-offs in a way that maximizes deductions and takes advantage of tax laws
Tax Foregone: The tax/Revenue Foregone is tax expenditures arising out of measures such as special tax rates, exemptions, deductions, rebates, deferrals and credits which are an integral part of the tax policy of the Government.
‘Size India’ project
The Clothing Manufacturers Association of India (CMAI) will work with the Union Ministry of Textiles in the “Size India” project, which is expected to be launched next month.
CMAI will conduct a study across India to arrive at standard sizes.
‘Size India’ project:
The ‘Size India’ project will help create a India-specific size chart for the textiles and garment industry.
Aim: To arrive at standard Indian sizes for apparels.
Significance: The project will reduce overall prices and the consumers will stand to benefit from it.
Details of the project: Under the project, anthropometric data will be collected from 25,000 sample (with men and women in equal numbers) population in age group 15 to 65 years across six major cities. It will create database of measurements that will result in standardized size chart which is representative of Indian population and can be adopted by apparel industry.
Why have standard size?
Apparel retail is one of the important drivers of modern retail in India, with its total size estimated to be $72 billion. Developed countries such as the U.S. and U.K. have standard sizes for apparels. Having standard sizes will reassure customers when they purchase a product, both online and at outlets, and will reduce wastages for the apparel manufacturers. At present, large percentage of population face difficulty in finding clothes that fit them perfectly according to their body measurements. This is mainly due to differences in anthropometric built of people in different geographical regions across the country.
National Bench of the Goods and Services Tax Appellate Tribunal (GSTAT)
Cabinet has approved creation of National Bench of the Goods and Services Tax Appellate Tribunal (GSTAT).
It shall be situated at New Delhi.
Composition: Presided over by its President and shall consist of one Technical Member (Centre) and one Technical Member (State). It is the forum of second appeal in GST laws and the first common forum of dispute resolution between Centre and States. The appeals against the orders in first appeals issued by the Appellate Authorities under the Central and State GST Acts lie before the GST Appellate Tribunal, which is common under the Central as well as State GST Acts.
CGST Act provides for the Appeal and Review Mechanism for dispute resolution under the GST Regime. The Act empowers the Central Government to constitute, on the recommendation of Council, by notification, with effect from such date as may be specified therein, an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority.
Input Credit under GST:
Concerned over a decline in GST revenues, tax officials are likely to examine the high usage of input tax credit (ITC) to set off tax liability by businesses.
What is Input Tax Credit (ITC)?
It is the tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale. In other words, businesses can reduce their tax liability by claiming credit to the extent of GST paid on purchases.
A business under composition scheme cannot avail of input tax credit. ITC cannot be claimed for personal use or for goods that are exempt. One of the positive features of GST is that it helps to avoid the undesirable cost cascading effect (or tax on tax) that existed previously. Now, in the case of GST, there is the mechanism of Input Tax Credit (ITC) which helps to eliminate the cost cascading effect of the pre-GST tax regime. Under GST, there is not cost cascading effect because of two facts. First, most of the taxes are merged under a single tax, and second, the input tax credit.
Atal Setu of Goa
“Atal Setu” on the Mandovi river in Goa has been inaugurated.
Features of the bridge: It is 5.1-km long cable-stayed bridge connecting state capital Panaji with north Goa. The bridge is constructed by the GIDC (Goa Infrastructure Development Corporation) in collaboration with construction major Larsen and Toubro.
Mahadayi, also known as the Mandovi river, is known as a lifeline in the northern parts of Karnataka. The river originates and flows for 28 kilometer in Karnataka and goes through Maharashtra and Goa before meeting the Arabian Sea.
What’s the difference between a full Budget and an interim Budget?
What is interim budget?
A vote on account or interim Budget, means that the government seeks the approval of Parliament for meeting expenditure for the first four months of the fiscal year (April-March) with no changes in the taxation structure. The estimates are presented for the entire year, as is the case with the regular Budget
When is an interim budget presented?
The government of the day presents an interim budget if it does not have the time to present a full Budget or because national elections may be near. In the latter situation, propriety demands that the task of framing the full Budget be left to the incoming government.
What is difference between full budget and interim budget?
A full budget is the presentation of annual finances of the government, change in existing tax slabs, announcement of new schemes and sops for different sectors of the economy. However, in case of an interim budget, change in tax slabs are not made and no new schemes are announced; only finance estimates are presented. In case of an election year, the incoming government has full freedom to change the estimates completely when the final Budget is presented.
Odisha govt. transfers funds to sharecroppers under KALIA
Odisha Chief Minister transferred funds to 57,614 sharecroppers under the Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme
Under the scheme, Rs 10,180 crore will be spent over three years until 2020-21 in providing financial assistance to nearly 50 lakh families of cultivators and landless agricultural labourers. All farmers will be provided Rs 10,000 per family as assistance for cultivation. Each family will get Rs 5,000 separately in the Kharif (on Akshaya Tritiya) and Rabi seasons (on Nuakhai day), for six cropping seasons between 2018-19 and 2021-22. Further, crop loans up to Rs. 50,000 would be provided interest-free to the beneficiaries. Also, around 10 lakh landless families will be supported with Rs. 12,500 to take up agricultural activities like small goat-rearing units, mini layer units, duck units, fishery kits for fishermen and women, mushroom cultivation and bee keeping.
The fast moving consumer goods (FMCG) industry is expected to clock double digit growth in the current year, though the growth is likely to be lower than that of the previous year, which saw the sector benefit from the overall health of the economy and lower inflation.
Consumption growth in 2018 was led by favourable macros like growth in GDP, lower inflation and manufacturers passing on the benefits of margin expansion from the GST regime.
Overview of FMCG sector:
Fast-moving consumer goods (FMCG) sector is the 4th largest sector in the Indian economy with Household and Personal Care accounting for 50% of FMCG sales in India. Growing awareness, easier access and changing lifestyles have been the key growth drivers for the sector.
The government has allowed 100% Foreign Direct Investment (FDI) in food processing and single-brand retail and 51% in multi-brand retail. This would bolster employment and supply chains, and also provide high visibility for FMCG brands in organised retail markets, bolstering consumer spending and encouraging more product launches.
Some of the major initiatives taken by the government to promote the FMCG sector in India are as follows:
Consumer Protection Bill with special emphasis on setting up an extensive mechanism to ensure simple, speedy, accessible, affordable and timely delivery of justice to consumers. The Goods and Services Tax (GST) is beneficial for the FMCG industry as many of the FMCG products such as Soap, Toothpaste and Hair oil now come under 18 per cent tax bracket against the previous 23-24 per cent rate. The GST is expected to transform logistics in the FMCG sector into a modern and efficient model as all major corporations are remodeling their operations into larger logistics and warehousing.
Renault-Nissan has signed a pact with National Skill Development Corporation to train its workforce in the alliance plant in Chennai for future technologies. NSDC would assist the Renault-Nissan workforce develop competency standards in emerging manufacturing technologies.
NSDC: National Skill Development Corporation India (NSDC), established in 2009, is a not- for- profit company set up by the Ministry of Finance. NSDC was set up by Ministry of Finance as Public Private Partnership (PPP) model. The Government of India through Ministry of Skill Development & Entrepreneurship (MSDE) holds 49% of the share capital of NSDC, while the private sector has the balance 51% of the share capital.
Functions: NSDC aims to promote skill development by catalyzing creation of large, quality and for-profit vocational institutions. It also provides funding to build scalable and profitable vocational training initiatives. Its mandate is also to enable support system which focuses on quality assurance, information systems and train the trainer academies either directly or through partnerships. It also develops appropriate models to enhance, support and coordinate private sector initiatives.