Baliyan Economic Development 2020

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TOPIC
1 GROWTH AND DEVELOPMENT
GDP ESTIMATION IN INDIA

Context: Recently, the Ministry of Statistics and Programme Implementation (MOSPI) is considering changing of base year for
GDP calculation from 2011-12 to 2017-18.
Base Year
• The base year of the national accounts is chosen to enable inter-year comparisons. It gives an idea about changes in
purchasing power and allows calculation of inflation-adjusted growth estimates.
• The last series has changed the base year to 2011-12 from 2004-05 in compliance with the latest international
standards, the 2008 System of National Accounts (2008 SNA) evolved by the UN - which was an update from 1993 SNA.
Need for Change
• Accuracy: Change of base year to calculate GDP is done in line with the global exercise to capture economic information
accurately.
• Globally Aligned: GDP based on 2011-12 did not reflect the current economic situation correctly. The new series will be
in compliance with the United Nations guidelines in System of National Accounts-2008.
• A revision in the base year is essential for better policymaking. It is meant to track structural changes in an economy and
improve or update macroeconomic indicators that reflect the economic performances of a country.
• Ideally, the base year should be changed after every five years.
MIDDLE INCOME TRAP

Context: Recently Rathin Roy, member ofPrime Minister’s Economic Advisory Council (PMEAC)predicts thatIndia faces a
structural slowdown and is heading for a certain middle-income trap.
ECONOMIC ADVISORY COUNCIL
About Middle Income Trap:
• Economic Advisory Council to the Prime
• The term ‘middle-income trap’, first coined by Indermit Gill,
Minister (PMEAC) is a non-constitutional,
HomiKharas, refers to the possibility that economies could get
non-permanent and independent body
stuck at a certain level of income.
constituted to give economic advice to the
• According to World Bankthe ‘middle-income range’ countries
Government of India, specifically the Prime
with gross national product that has remained between $1,000
Minister.
to $12,000 at constant prices.
• Bibek Debroy is the chairman of the current EAC.
¾ However, as they reach middle-income status, they tend to
slow down as they lose some of their advantages. They fail to converge with wealthier nations and do not get beyond
middle-income status.
• It is a status of low productivity and entrenched inequality.
• Mexico and Brazil are classic examples of such countries.
Categorisation of countries in MIT
• World Bank has used the 2018 data of gross national income (GNI) percapita to categorize countries into following four
categories:
1. Low income: Countries with GNI per capita is up to $1,025
2. Lower middle-income: Those with GNI per capita from $1,026 to $3,995. Ex: India – its per capita income in 2018
was $2,020, at the halfway point for the lower middle-income category.
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1 Economic Development
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3. Upper middle-income: Countries with GNI Per capita between $3,995 and $12,375 are upper middle income Ex:
Brazil, South Africa, Mexico, China
4. High income: Per capita income above $12,375 makes a country high income. Ex: US, Germany, Japan, Korea.
CIRCULAR ECONOMY
Context: Recently at Circular Economy Symposium 2019, NITI Aayog CEO said that Circular Economy has the potential to
generate 1.4 crore jobs in next 5-7 years.
Circular Economy
• A circular economy is an industrial system that is restorative or
regenerative by intention and design.
• It replaces the end-of-life concept with restoration, shifts
towards the use of renewable energy, eliminates the use of toxic
chemicals which impair reuse and return to the biosphere.
• It aims for the elimination of waste through the superior design of
materials, products, systems and business models.
• Circular economy is based on four principles. They are:
¾ Circular economy aimsto design out waste. The products
are designed and optimized for a cycle of disassembly and
reuse. This sets it apart from disposal and even recycling,
where large amounts of embedded energy and labour are
lost.
¾ It introduces a strict differentiation between consumable
and durable components of a product.
9 Consumables in the circular economy are largely made of biological ingredients that are non-toxic and
possibly even beneficial, and can safely be returned to the biosphere, either directly or in a cascade of consecutive
uses.
9 Durables such as engines or computers, on the other hand, are made of technical nutrients unsuitable for
the biosphere, such as metals and most plastics. These are designed from the start for reuse, and products
subject to rapid technological advance are designed for upgrade.
¾ The energy required to fuel this cycle should be renewable by nature, again to decrease resource dependence
and increase systems resilience.
¾ It replaces the concept of a consumer with that of a user which calls for a new contract between businesses
and their customers based on product performance. The durable products are leased, rented or shared wherever
possible. If they are sold, there are incentives or agreements in place to ensure the return and thereafter the reuse
of the product.
• Circular economy has the potential to increase productivity and create jobs, whilst reducing carbon emissions and
preserving valuable raw materials. It provides for a way of creating value.
MERGER OF NSSO AND CSO

Context: The government has decided to merge the National Sample Survey Office (NSSO) with the Central Statistics Office
(CSO) under the Ministry of Statistics and Programme Implementation (MoSPI) into the National Statistical Office (NSO).
Details:
• Ministry of Statistics and Programme Implementation has two wings, one relating to Statistics and the other- Programme
Implementation.
• The Statistics Wing called the National Statistical Office (NSO) consists of the Central Statistical Office (CSO)and the
National Sample Survey Office (NSSO).
¾ CSO coordinates the statistical activities in the country and also evolves statistical standards.
¾ NSSO is responsible for conduct of large-scale sample surveys in diverse fields on an all India basis.
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• NSO would be headed by the Ministry of Statistics and Programme Implementation (MoSPI) secretary and 3 director
generals will assist him. All divisions will report to the secretary through Director Generals.
• Apart from the above wings, there is National Statistical Commission (NSC) created through a resolution of Government
of India based on the recommendations of the Rangarajan Commission and one autonomous institute, viz., Indian
Statistical Institute (ISI) declared as an institute of national importance by an Act of Parliament.
¾ NSC has a mandate to evolve policies, priorities and standards in statistical matters.
MADHYA PRADESH TO OPEN TIME BANK

Context: Madhya Pradesh government’s Happiness department has planned to set up a TimeBank.
About Time Bank
• TimeBank is a reciprocal service exchange which uses units of Important Facts
time as a currency. • Madhya Pradesh is the first state in the country
• TimeBank would lend currency in exchange for an hour. that created the Happiness Department in 2016.
• This earned hour could be used to learn a new skill, without the • The state government also prepared a
need to pay any paper money. happiness calendar for helping its citizens to
• The core value behind this idea is that we all are assets that are remain happy and dedicated to the right causes.
driven by reciprocity. Giving focused attention to each & every voice will help promote the equality and dignity of
labour.
• It is a new way to link untapped social capacity to unmet social needs.
• Whenever a bank member needs a service or wants to acquire a skill, for e.g, gardening or playing the guitar, the member
could exchange a credit worth an hour with another member knowing that particular skill.
History
• The idea of Timebank was conceived in 1827. But the concept gained popularity with the setting up of the first Time Bank
in Japan in 1973.
• Later, the CEO of TimeBanks U.S.A popularized the idea of Time Dollars. Today, there are more than 500 such communities
across 32 countries.
ECONOMIC CENSUS
Context: Seventh Economic Census is underway which was supposed to be completed by March 2020 but the report might get
delayed.
About Economic Census
• Economic Census is the complete count of all entrepreneurial units located within the geographical boundaries of the
Country.
• Information on number of establishments and employment in all type of establishments, unpaid/paid workers, female
workers, child workers, ownership of establishments, use of power, registration of establishments, source of finance etc.
is collected.
• Complete address of enterprises having 10 or more workers is recorded.
• It is 100% centrally sponsored scheme of the Ministry of Statistics and Program Implementation, Government of
India.
• Ministry of Statistics and Programme Implementation (MoSPI) has tied up with CSC e-Governance Service for the
7thEconomic Census.
• The entire Census is being conducted on a digital platform by the use of an application which will ensure high accuracy
and data security
THE CODE ON WAGES, 2019

Context: The Code on Wages, 2019 was passed in the Parliament which seeks to regulate wage and bonus payments in all
employments where any industry, trade, business, or manufacture is carried out.
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Key Provisions of the Code

• The Code replaces the following four laws:
¾ Payment of Wages Act, 1936, ¾ Minimum Wages Act, 1948,
¾ Payment of Bonus Act, 1965, and ¾ Equal Remuneration Act, 1976.
• Coverage: The Code will apply to all employees. The central government will make wage-related decisions for employments
such as railways, mines, and oil fields, among others. State governments will make decisions for all other employments.
¾ Wages include salary, allowance, or any other component expressed in monetary terms. This does not include
bonus payable to employees or any travelling allowance, among others.
• Floor wage: According to the Code, the central government will fix a floor wage, taking into account living standards
of workers. Further, it may set different floor wages for different geographical areas. Before fixing the floor wage, the
central government may obtain the advice of the Central Advisory Board and may consult with state governments.
¾ The minimum wages decided by the central or state governments must be higher than the floor wage.
• Fixing the minimum wage: The Code prohibits employers from paying wages less than the minimum wages. Minimum
wages will be notified by the central or state governments. This will be based on time, or number of pieces produced.
The minimum wages will be revised and reviewed by the central or state governments at an interval of not more
than five years. While fixing minimum wages, the central or state governments may take into account factors such as:
(i) skill of workers, and (ii) difficulty of work.
• Gender discrimination: The Code prohibits gender discrimination in matters related to wages and recruitment of
employees for the same work or work of similar nature.
¾ Work of similar nature is defined as work for which the skill, effort, experience, and responsibility required are the same.
• Advisory boards: The central and state governments will constitute advisory boards.
¾ The Central Advisory Board will consist of: (i) employers, (ii) employees (in equal number as employers), (iii) independent
persons, and (iv) five representatives of state governments.
¾ State Advisory Boards will consist of employers, employees, and independent persons.
¾ Further, one-third of the total members on both the central and state Boards will be women.
¾ The Boards will advise the respective governments on various issues including: (i) fixation of minimum wages, and (ii)
increasing employment opportunities for women.
OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS (OSH) CODE

Context: According to the Labour Ministery, government will push the Occupational Safety, Health and Working Conditions
(OSH) Code in the Budget session of Parliament for approval.
Key Provisions
• Coverage:The Code seeks to regulate health and safety conditions of workers in establishments with 10 or more
workers, and in all mines and docks.It does not apply to apprentices. Further, certain provisions of the Code such as
health and working conditions, apply to all employees.
• It subsumes and replaces 13 labour laws relating to safety, health and working conditions. These laws include: Factories
Act, 1948; Mines Act, 1952; Dock Workers Act, 1986; Contract Labour Act, 1970; and Inter-State Migrant Workers Act,
1979.
• The Bill proposes one registration for an establishment instead of multiple registrations. Presently 6 labour acts out
of 13 provide for separate registration of the establishment.
• License and Registration:Establishments covered by the Code are required to register with registering officers within 60
days, appointed by the central or state governments.
• Welfare facilities, working conditions and work hours for different types of establishments and workers will be prescribed
by the central or state governments through rules.
• The Code sets up occupational safety boards at the national and state level to advise the central and state governments
on the standards, rules, and regulations to be framed under the Code.
• The Code creates special provisions for certain classes of establishments such as factories, mines, dock workers, and
constructions workers. These include separate provisions on licenses, safety regulations, and duties of employers.
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SOCIAL SECURITY CODE

Context: Labour Minister has introduced the Code on Social Security, 2019, in the Lok Sabha but not passed in the Parliament
till now.
Key Features of the Code:
• It replaces nine laws related to social security, including the Employees’ Provident Fund Act, 1952, the Maternity Benefit
Act, 1961, and the Unorganised Workers’ Social Security Act, 2008.
¾ Social security refers to measures to ensure access to health care and provision of income security to workers.
• Social security schemes: Under the Code, the central government may notify various social security schemes for the
benefit of workers. These include an Employees’ Provident Fund (EPF) Scheme, an Employees’ Pension Scheme (EPS), and
an Employees’ Deposit Linked Insurance (EDLI) Scheme. These may provide for a provident fund, a pension fund, and an
insurance scheme, respectively.
• In addition, the central or state government may notify specific schemes for gig workers, platform workers, and
unorganised workers to provide various benefits, such as life and disability cover.
¾ Gig workers refer to workers outside of the traditional employer-employee relationship (e.g., freelancers).
¾ Platform workers are workers who access other organisations or individuals using online platforms and earn money
by providing them with specific services.
¾ Unorganised workers include home-based and self-employed workers.
• Coverage and registration: The Code specifies different applicability thresholds for the schemes. For example, the EPF
Scheme will apply to establishments with 20 or more employees. The ESI Scheme will apply to certain establishments with
10 or more employees, and to all establishments which carry out hazardous or life-threatening work notified by the
central government.
¾ These thresholds may be amended by the central government.All eligible establishments are required to register
under the Code, unless they are already registered under any other labour law.
• Contributions: The EPF, EPS, EDLI, and ESI Schemes will be financed through a combination of contributions from the
employer and employee.
¾ For example, in the case of the EPF Scheme, the employer and employee will each make matching contributions of
10% of wages, or such other rate as notified by the government.
¾ All contributions towards payment of gratuity, maternity benefit, cess for building workers, and employee
compensation will be borne by the employer.
¾ Schemes for gig workers, platform workers, and unorganised workers may be financed through a combination of
contributions from the employer, employee, and the appropriate government.
• Social security organisations: The Code provides for the establishment of several bodies to administer the social security
schemes. These include:
¾ Central Board of Trustees, headed by the Central Provident Fund Commissioner, to administer the EPF, EPS and EDLI
Schemes,
¾ Employees State Insurance Corporation, headed by a Chairperson appointed by the central government, to
administer the ESI Scheme,
¾ National and state-level Social Security Boards, headed by the central and state Ministers for Labour and
Employment, respectively, to administer schemes for unorganised workers, and
¾ State-level Building Workers’ Welfare Boards, headed by a Chairperson nominated by the state government, to
administer schemes for building workers.
• The bill seeks to establish a social security fund and tap the corporate social responsibility fund to offer unorganized
sector workers medical, pension, death and disability benefits via the employee’s state insurance corporation.
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CODE ON INDUSTRIAL RELATIONS

Context: The Industrial Relations Code, 2019 has been introduced in the Lok Sabha but not passed in the Parliament till now.
Key Features of the Code:
• It seeks to replace three labour laws: (i) the Industrial Disputes Act, 1947, (ii) the Trade Unions Act, 1926, and (iii) the
Industrial Employment (Standing Orders) Act, 1946.
• Trade unions: Under the Code, seven or more members of a trade union can apply to register it.Trade unions that have
a membership of at least 10% of the workers or 100 workers, whichever is less, will be registered.
¾ The central or state government may recognise a trade union or a federation of trade unions as Central or State
Trade Unions respectively.
• Unfair labour practices: The Code prohibits employers, workers, and trade unions from committing any unfair labour
practices listed in a Schedule to the Code. These include:
¾ Restricting workers from forming trade unions,
¾ Establishing employer sponsored trade union of workers, and
¾ Coercing workers to join trade unions.
• Lay-off and retrenchment: The Code defines lay-off as the inability of an employer, due to shortage of coal, power, or
breakdown of machinery, from giving employment to a worker.
¾ It also provides for employers to terminate the services of a worker, i.e., retrenchment.
¾ Employers of industrial establishments such as mines, factories and plantations with at least 100 workers are required
to take prior permission of the central or state government before lay-off, retrenchment or closure.The central or
state government can modify this threshold number of workers by notification.

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TOPIC
2 PUBLIC FINANCE
TASK FORCE REPORT ON DIRECT TAX CODE

Context: A committee headed by CBDT member Akhilesh Ranjan submitted its report on replacing the Income Tax Act with
a new Direct Tax Code.
What is Direct Tax Code?
• The government aims to simplify the structure of direct tax laws in India into a single legislation through Direct Taxes Code
(DTC).
• The DTC will replace the Income-tax Act, 1961, and other direct tax legislation like the Wealth Tax Act, 1957.
• The first attempt was made in 2010 by the introduction of the New Direct Tax Code (DTC) 2010 by former Finance
Minister, Pranab Mukherjee.
• After deliberation, a revised version of the DTC was introduced in 2013, without success.
• The current government again attempted to further revise the DTC in 2017 and a task force was formed in this regard.
Possible Impact of Implementation of DTC
The new direct tax code will try to bring more assesses into the tax net, make the system more equitable for different classes
of taxpayers, make businesses more competitive by lowering the corporate tax rate and phase out the remaining tax exemptions
that lead to litigation.
Important Terminologies used in the Report
• Branch Profit Tax: Tax imposed on the branches of foreign companies in addition to the normal corporate income tax on
the branch’s income. This is equivalent to the tax on dividends which would be due if the branch had been a subsidiary of
the foreign company and had distributed its profit as dividends.
• Dividend Distribution Tax (DDT): The Dividend Distribution Tax is a tax levied on dividends that a company pays to its
shareholders out of its profits. It is taxable at source and is deducted at the time of the company distributing dividends.
• Transfer Pricing: Transfer pricing is an accounting and taxation practice that allows for pricing transactions internally
within businesses and between subsidiaries that operate under common control or ownership.
¾ The transfer pricing practice extends to cross-border transactions as well as domestic ones.
¾ The “arm’s-length principle” of transfer pricing states that the amount charged by one related party to another for
a given product must be the same as if the parties were not related. An arm’s-length price for a transaction is
therefore what the price of that transaction would be on the open market.
• Advance Pricing Agreements (APAs): An APA is a contract between a taxpayer and at least one tax authority specifying
the pricing method that the taxpayer will apply to its related-company transactions.
¾ These programmes are designed to help taxpayers voluntarily resolve actual or potential transfer pricing disputes in
a proactive and cooperative manner.
¾ APAs gives certainty to taxpayers, reduce disputes, enhance tax revenues and make the country an attractive
destination for foreign investments.
¾ These agreements wouldbe binding both on the taxpayer as well as the government.
MULTILATERAL CONVENTION TO IMPLEMENT TAX TREATY

Context: Government of India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures (MLI) to
prevent Base Erosion and Profit Shifting (BEPS)
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About the Convention Base Erosion and Profit Shifting (BEPS)

• The Multilateral Convention is an outcome of the OECD/G20 Project • It refers to the phenomenon where companies
(BEPS Project), of which India is a member, to tackle Base Erosion shift their profits to other tax jurisdictions,
and Profit Shifting (BEPS). which usually have lower rates, thereby
¾ This project was designed to work on anti-evasion measures eroding the tax base in India.
that could curb tax planning strategies in exploiting gaps and • Developing countries’ higher reliance on
mismatches in tax rules to artificially shift profits to low or no- corporate income tax means they suffer
tax locations. from BEPS disproportionately.
¾ Such geographies have little economic activity, resulting in little or no overall corporate tax being paid.
• The MLI will be applied alongside existing tax treaties, modifying their application in order to implement the BEPS
measures.
• The ratification will modify India’s double tax avoidance treaties in order to curb revenue loss through treaty abuse and
base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities
generating the profits are carried out.
• The Convention enables countries to implement the tax treaty related changes through the multilateral route without
the need to bilaterally re-negotiate each such agreement.
• The convention enables all signatories to meet treaty-related minimum standards that were agreed as part of the BEPS
package.
REFORMS IN CORPORATE TAXATION

Context: The Government announced a major cut in the corporate income tax (CIT) rate applicable to the domesticcompanies.
Two new sections viz. 115BAA and 115BAB have been inserted in the Income Tax Act.
The Finance Ministry made it clear that companies opting for a lower tax of 22 per cent will not be eligible for accumulated
additional depreciation and Minimum Alternative Tax (MAT) credit.
• Details about the Corporate Taxation is covered in SAMADHAAN: Economic Survey Volume 2 – Page No. 7
• Details about the Minimum Alternate Tax is covered in SAMADHAAN: Budget 2020-21 – Page No. 19
DIVIDEND DISTRIBUTION TAX (DDT)

Context: The task force on direct tax code (DTC) has recommended abolishing Dividend Distribution Tax (DDT) with a view to
promoting investment.
Also, Budget 2020-21 announced the scrapping of dividend distribution tax (DDT) to be paid by the companies.
Details:
• It is a return given by a company to its shareholders out of the profits earned by the company in a particular year.
• The provisions of DDT were introduced by the Finance Act, 1997. Only a domestic company is liable for the tax.
Domestic companies have to pay the tax even if the company is not liable to pay any tax on their income.
• A foreign company is exempted from paying dividend distribution tax on dividend paid to its shareholders.
• Companies are at present are subject to DDT at 15 per cent of the aggregate dividend declared, distributed or paid. As
it also includes a 12 per cent surcharge and a 3 per cent education cess, the effective DDT rate comes to 20.35 per cent.
• The tax on dividends is a triple levy. Dividend basically means the distribution of a company’s after-tax profits.
¾ The tax paid by a company is the first level.
¾ DDT is the second level.
¾ Super Rich Dividend Tax - 10% tax on anyone who earns dividend income of Rs 10 lakh or above - is the third.
• DDT applies to mutual funds as well. Because fund houses deduct DDT at source, dividends from MF schemes are tax-
free for shareholders.
• The DDT for debt funds is more than DDT on equity-oriented mutual funds.
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SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME

Context: Sabka Vishwas, the dispute resolution scheme was launched in the Budget 2019-20, for pending disputes relating
to erstwhile Service Tax and Central Excise Acts, which are now subsumed under GST.
About Sabka Vishwas Scheme
• The two main components of the Scheme are dispute resolution and amnesty.
¾ The dispute resolution component is aimed at liquidating the legacy cases of Central Excise and Service Taxthat
are subsumed in GST and are pending in litigation at various forums.
¾ The amnesty component of the Scheme offers an opportunity to the taxpayers to pay the outstanding tax and be
free of any other consequence under the law.
• It provides a one-time window to eligible persons to declare their tax dues and pay the same in accordance with the
provisions.
• It provides substantial relief in the tax dues for all categories of cases as well as full waiver of interest, fine and penalty.
• It gives complete amnesty from prosecution proceedings.
• It will help in reducing the tax litigation and improving ease of doing business.
Central Taxes Subsumed under GST State Taxes Subsumed under GST
• Central Excise Duty • State VAT
• Duties of Excise (Medicinal and Toilet Preparations) • Central Sales Tax
• Additional Duties of Excise (Goods of Special Importance) • Luxury Tax
• Additional Duties of Excise (Textile and its products) • Octroi and Entry Tax
• Additional Duties of Customs • Entertainment and Amusement Tax
• Special Additional Duty of Customs • Taxes on Advertisement
• Service Tax • Purchase Tax
• Central Surcharges and Cesses • Taxes on lotteries, betting and gambling
• State Surcharges and Cesses
AMENDMENTS TO PREVENTION OF MONEY LAUNDERING ACT

Context: With the assent of President, the Finance Act, 2019 brought some changes to the Prevention of Money Laundering
Act, 2002.
Prevention of Money Laundering Act
Changes in the Act
• It is the legal framework in India to combat
• Money Laundering will be treated as a stand-alone crime. money laundering.
• The Enforcement Directorate (ED) is empowered to make money • The provisions of this act are applicable to all
laundering investigation. financial institutions, banks(Including
• It has removed the pre-requirement of FIR or charge-sheet by RBI),mutual funds, insurance companies,
other agencies for investigation. and their financial intermediaries.
• The jurisdiction of the Special Court shall not depend upon any • It defined ‘money laundering’ as any processor
orders passed in respect of the scheduled offence under the activity connected with proceeds of crime
act. including its concealment, possession,
• The ED officers are empowered to arrest an accused without acquisition or use and projecting or claiming
warrant as all PMLA offences will be cognizable and non-bailable. it as untainted property.
• The changes expanded the scope of ‘proceeds of crime’ which includes concealment, possession, acquisition, use and
projecting or claiming it as untainted money or property will be treated as independent offences under the act.
• For inter-departmental and inter-agency coordination, the centre is empowered to set up an Inter-Ministerial
Coordination Committee.
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Enforcement Directorate (ED)

• It is a law enforcement and economic intelligence agency responsible for enforcing economic laws and fighting economic
crime in India.
• It is a multi-disciplinary organization mandated with the task of enforcing Foreign Exchange Management Act (FEMA),
1999 and Prevention of Money Laundering Act (PMLA), 2002.
• The administrative control of ED is under Department of Revenue (Ministry of Finance).
Global Efforts to combat Money Laundering
• 1988 Vienna Convention – Criminalizes the money laundering for drug trafficking.
• 1990 Council of Europe Convention – Establishes a common criminal policy on money laundering.
• G10’s Basel Committee on banking Supervision – They issued a ‘statement of principles’.
• Steps taken by Financial Action Task Force (FATF).
Financial Action Task Force (FATF)
• It is the main international body engaged in continuous, comprehensive efforts both to define policy and to promote the
adoption of countermeasures against money laundering.
• It is an inter-governmental organizationset up by the governments of the G-7 countries at their 1989 Economic
Summit.
• The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about
national legislative and regulatory reforms.
• Its headquarters is in Paris, France.
• The FATF meeting is conducted thrice in a year.
DOCUMENT IDENTIFICATION NUMBER

Context: While marching towards Digital India, the Central Board of
Central Board of Direct Taxes (CBDT)
Direct Taxes implemented Document Identification Number (DIN).
• It is a statutory authority functioning under
About DIN
the Central Board of Revenue Act, 1963.
• It is an 8-digit unique identification numberto ensure greater
• It is a part of Department of Revenue under
accountability and transparency in tax administration.
the Ministry of Finance.
• It has a lifetime validity.
• The officials of the Board in their ex-officio
• It will apply to all kind of communications from the income tax
capacity also function as a Division of the
department, whether it is related to assessment, appeals,
Ministry dealing with matters relating to
investigation, penalty, and rectification among other things.
levy and collection of direct taxes.
• Any communication that does not include the Document
identification number(DIN) will be considered invalid according to section 282b of the Income Tax Act.
• It would also help taxpayers detect fake notices and letters as the notice would be verifiable.
GST COUNCIL VOTED FOR THE FIRST TIME IN ITS 38th MEETING
Context: Goods and Services Tax (GST) Council voted for the first time in its 38thmeeting held on December 18. The proposal to
have a higher single rate for lotteries went through by a majority, with 21 votes in favour.
About GST Council
The Goods & Services Tax Council (GST Council) is a constitutional body and has been created under Article 279-A of the
Constitution of India.
Voting Rules in GST Council
• As per the Constitution (One Hundred and First Amendment) Act, 2016, in case of voting, every decision of the GST
Council has to be taken by a majority of not less than three-fourths of the weighted votes of the members present.
• The vote of the central government has a weightage of one-third of the total votes cast, and the votes of all the state
governments taken together have a weightage of two-thirds of the total votes cast in that meeting.
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Composition:
• As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre and the States,
shall consist of the following members: -
¾ Union Finance Minister - Chairperson;
¾ Union Minister of State in charge of Revenue or Finance - Member;
¾ Minister in charge of Finance or Taxation or any otherMinister nominated by each State Government - Members.
Functions of GST Council:
• As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related
to GST, like Taxes, cesses, and surcharges to be subsumed under the GST;
¾ Goods and services which may be subject to, or exempt from GST;
¾ The threshold limit of turnover for application of GST;
¾ Rates of GST; Model GST laws, principles of levy, apportionment of IGST and principles related to the place of supply;
¾ Special provisions with respect to the eight north-eastern states, Himachal Pradesh, Jammu and Kashmir, and
Uttarakhand; and Other related matters.
¾ GST rates will include the floor rates with bands, special rates for raising additional resources during natural disasters/
calamities, special provisions for certain States, etc.
15th FINANCE COMMISSION REPORT FOR FY 2020-21

Context: Recently, N.K. Singh headed 15th Finance Commission had submitted its report with recommendations for the FY
2020-21.
• The share of states in the centre’s taxes is recommended to be decreased from 42% during the 2015-20 periods to 41%
for 2020-21.
Criteria for Devolution
Criteria 14th FC 2015-20 15th FC 2020-21 Finance Commission
Income Distance 50.0 45.0 • Article 280 of the Constitution of
India provides for a F inance
Population (1971) 17.5 -
Commission as a quasi judicial body.
Population (2011) 10.0 15.0 • It is constituted by the President of
Area 15.0 15.0 India every fifth year or at such
earlier time as he considers necessary.
Forest Cover 7.5 -
• The chairman and four other
Forest and Ecology - 10.0 members hold office for such period
Demographic Performance - 12.5 as specified by the President in his
Tax Effort - 2.5 order.
• They are eligible for reappointment.
Total 100 100
Understanding the Terminologies
• Income distance: Income distance is the distance of the state’s income from the state with the highest income. The
income of a state has been computed as average per capita GSDP during the three-year period between 2015-16 and
2017-18. States with lower per capita income would be given a higher share to maintain equity among states.
• Demographic performance: The Terms of Reference (ToR) of the Commission required it to use the population data of
2011 while making recommendations. Accordingly, the Commission used only 2011 population data for its recommendations.
• The Demographic Performance criterion has been introduced to reward efforts made by states in controlling their
population. It will be computed by using the reciprocal of the total fertility ratio of each state, scaled by 1971 population
data. States with a lower fertility ratio will be scored higher on this criterion. The total fertility ratio in a specific year
is defined as the total number of children that would be born to each woman if she were to live to the end of her child-
bearing years and give birth to children in alignment with the prevailing age-specific fertility rates.
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• Forest and ecology: This criterion have been arrived at by calculating the share of dense forest of each state in the
aggregate dense forest of all the states.
• Tax effort: This criterion has been used to reward states with higher tax collection efficiency. It has been computed as
the ratio of the average per capita own tax revenue and the average per capita state GDP during the three-year period
between 2014-15 and 2016-17.
Grants-in-aid
In 2020-21, the following grants will be provided to states: (i) revenue deficit grants, (ii) grants to local bodies, and (iii) disaster
management grants. The Commission has also proposed a framework for sector-specific and performance-based grants.
OTHER TAXES IN NEWS

ANGEL TAX
Context: Recently, the government announced that angel tax will not be applicable on start-ups registered with the Department
for Promotion of Industry and Internal Trade (DPIIT).
An entity will be considered a startup
About Angel Tax
• Till upto 10 years from its incorporation date.
• It is a kind of direct tax that the receiver (startup) of the fund
from an angel investor has to pay. • If an entity’s turnover for any of the financial
years since its incorporation hasn’t exceeded
• It is term used to refer to the income tax payable on capital
INR 100 Cr.
raised by unlisted companies.
• Under theSec 56(2) (viib) of the Income-tax Act, 1961 – known as Angel Tax, where a startup (unlisted company)
receives any consideration for issue of shares which exceeds the fair market value (FMV) of such shares, such excess
consideration is taxable in the hands of the recipient as income from other sources.
• The government has prescribed a specific method of calculating Fair Market Value (FMV). It isgenerally the assessing
officer that determines the market value.
• Angel tax is imposed only on investments made by a resident investor. It should be noted that angel tax is not
applicable in case the investments are made by any non-resident or venture capital funds
GAFA TAX
Context: The French Parliament introduced a tax known as GAFA, making France one of the first countries to impose a tax on
digital giants.
Details
• The GAFA tax refers to an acronym for Google, Apple, Facebook and Amazon.
• The legislation will impose a 3% levy on sales generated in the country by non-tax paying online giants.
India’s Equalisation Levy
• Equalisation Levy was introduced in India in 2016, with the intention of taxing the digital transactions i.e. the income
accruing to foreign e-commerce companies from India.
• It is aimed at taxing business to business transactions.
• Equalisation Levy is a direct tax, which is withheld at the time of payment by the service recipient. The two
conditions to be met to be liable to equalisation levy:
• The payment should be made to a non-resident service provider;
• The annual payment made to one service provider exceeds Rs. 1,00,000 in one financial year.
• Currently, not all services are covered under the ambit of equalisation Levy. The following services covered:
• Online advertisement;
• Any provision for digital advertising space or facilities/ service for the purpose of online advertisement;
• Any other service which may be notified later.
• Currently, the applicable rate of tax is 6% of the gross consideration to be paid.

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TOPIC
3 FINANCIAL SECTOR
ELEPHANT BONDS
Context: Recently, a High Level Advisory Group on Trade Policy (HLAG) headed by Surjit S Bhalla has suggested the government
to issue ‘Elephant Bonds’. The HLAG was set up under the Ministry of Commerce and Industry in the year 2018.
Key Points:
• An Elephant Bond is a 25-year sovereign bond (a bond issued by a national government).
• This bond is issued to those people who declare their previously Additional Information
undisclosed income and are then bound to invest 50% of that
• Countries like Indonesia, Pakistan,
amount in these securities.
Argentina, and the Philippines have already
• The fund gathered by the issuance of these bonds is utilized to
launched their own tax amnesty schemes
finance infrastructure projects only.
for persons who disclose undeclared
• One of the key features of the proposed mechanism is that
those disclosing their black money will receive immunity from all
income without the risk of prosecution.
local laws including those under foreign exchange, black • Tax amnesty is a limited-time opportunity
money laws, and taxation laws. for a specified group of taxpayers to pay a
• This would enable people to bring their offshore undisclosed defined amount, in exchange for
wealth into India without fear of prosecution. forgiveness of tax liability (including
• The move is also expected to bring down the real interest rate. It interests and penalties).
will also strengthen the rupee.
CENTRE AIMS TO NIP PONZI SCAMS

Context: Recently, the President had given his assent to the Banning of Unregulated Deposit Schemes Act, 2019 to protect
the interests of depositors and holding deposit-takers accountable.
Key Highlights of the Act
Objectives:It provides for a mechanism to ban unregulated deposit schemes and protect the interests of depositors.
Definition of Deposits:It defines a deposit as an amount of money received through an advance, a loan, or in any other
form, with a promise to be returned with or without interest.
• It also defines certain amounts which shall not be included in the definition of deposits The Act amended
such as amounts received in the form of loans from relatives and contributions towards
↓
capital by partners in any partnership firm.
RBI Act, 1934
Unregulated deposit scheme: A deposit-taking scheme is defined as unregulated if it is taken
↓
for a business purpose and is not registered with the regulators listed in the Act.Currently,
nine regulators oversee and regulate various deposit-taking schemes. These include: SEBI Act, 1992
• Reserve Bank of India (RBI) – Regulates deposits accepted by NBFCs ↓
• Securities and Exchange Board of India (SEBI) – Regulates Mutual Funds Multi-State Cooperative
Societies Act, 2002
• Ministry of Corporate Affairs’
• State and union territory governments – Regulates Chit Funds
Deposit Takers: It defines deposit takers as an individual, a group of individuals, or a company who asks for (solicits), or
receives deposits. Banks and entities incorporated under any other law are not included as deposit takers.
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Central Database: It provides for the central government to Ponzi scheme

designate an authority to create an online central database • The Ponzi scheme is named after a swindler named
for information on deposit takers. Charles Ponzi, who orchestrated the first one in 1919.
Offences and penalties: The Act defines three types of offences, • A Ponzi scheme is a fraudulent investing scam promising
and penalties related to them. These offences are: high rates of return with little risk to investors.
• Running (advertising, promoting, operating or accepting • It is similar to a pyramid scheme in that both are based
money for) unregulated deposit schemes, on using new investors’ funds to pay the earlier backers.
• Fraudulently defaulting on regulated deposit schemes, and • It is an investment fraud in which clients are promised
• Wrongfully inducing depositors to invest in unregulated a large profit at little to no risk.
deposit schemes by willingly falsifying facts.
THE CHIT FUNDS (AMENDMENT) ACT, 2019

Context: Parliament passed the Chit Funds (Amendment) Bill, 2019 and received the President’s assent which provides for
raising the monetary limits for chit funds to
Chit Funds
three folds.It seeks to amend the Chit Funds
• A chit fund is a type of saving scheme where a specified number of
Act, 1982.
subscribers contribute payments in instalment over a defined period.
• The 1982 Act regulates chit funds, and
• Periodically, one of the subscribers is chosen by drawing a chit to receive
prohibits a fund from being created
the prize amount from the fund.
without the prior sanction of the state
• The company managing the chit fund (foreman) would retain a
government.
commission from the prize amount every month.
Key provisions of the Act
• Chit funds are legal and registered and are different from Ponzi
Substitution of Terms: It changes the names schemes as well as unregulated deposits.
of ‘chit amount’, ‘dividend’ and ‘prize
Laws governing Chit Funds
amount’ to ‘gross chit amount’, ‘share of
discount’ and ‘net chit amount’ respectively. • Classifying them as contracts, the Supreme Court has read chit funds
as being part of the Concurrent List of the Indian Constitution.
• Chit Amount (Gross Chit Amount) – The
Both the Centre and States can frame legislations regarding chit funds.
sum of subscriptions payable by all the
subscribers of a chit. • RBI and SEBI does not regulate Chit Funds.
• States like Tamil Nadu, Andhra Pradesh and Kerala had enacted
• Dividend (Share of Amount) – The share
legislation (e.g The Kerala Chitties Act, 1975 and The Tamil Nadu Chit
of the subscriber in the amount kept apart
Funds Act, 1961) for regulating chit funds.
for running the chit.
• In 1982, the Ministry of Finance enacted the Chit Funds Act, 1982 to
• Prize Amount (Net Chit Amount)–The
regulate the sector. The responsibility for enforcing the provisions
difference between chit amount and the
of this Act lies with the state government.
amount kept apart for running the chit.
¾ Under this Act, the chit fund businesses can be registered and
Foreman’s Commission: It seeks to increase
regulated only by the respective State Governments.
the foreman’s commission from 5% to 7%.
¾ Regulator of chit funds is the Registrar of Chits appointed by
Aggregate amount of chits: It increases the respective state governments under Section 61 of Chit Funds Act.
limits for chits conducted by individuals, and
¾ In case of failure of a chit fund business, the responsibility for
for every individuals in a firm with less than or
winding up such a business also vests with the respective State
more than four partners.
Governments.
Application of the Act: The Act does not apply
to chits started before the act was enacted and chits where the amount is less than Rs.100. The Act removes the limit of Rs.100
and allows state government to specify the base amount over which the provisions of the Act will apply.
BOND YIELD AND INVERSION

Context
Recently, bond yields are being keenly watched as talks of a recession gets louder globally.
What are Bonds?
• A bond is an instrument to borrow money. It could be floated/issued by a country’s government or by a company to
raise funds.
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• Since government bonds (referred to as G-secs in India, Treasury in the US, and Gilts in the UK) come with the sovereign’s
guarantee, they are considered one of the safest investments. As a result, they also give the lowest returns on investment
(or yield).
Bond Yields
• The yield of a bond is the effective rate of return that it earns. But the rate of return is not fixed - it changes with the
price of the bond.
• Relationship between Bond Price and Bond Yield: Bond yields go up when bond prices go down and bond yields go down
when bond prices go up.
¾ At the time of recession, investors find it suitable to invest in bonds which are safer instruments rather than
investing in stocks or other riskier assets and therefore pushes up the bond prices. This leads to decline in bond yields.
¾ So, government bond yields falling typically suggests that economic participants “expect” growth to slow down in the
future.
• Relationship between Interest Rate and Bond Yield: Bond Yield is directly proportional to an interest rate in an economy.An
increase in interest rate in an economy leads to an increase in bond yields.
Yield Curve and Bond Yield Inversion
• A yield curve is a graphical representation of yields for bonds (with an equal credit rating) over different time horizons.
• The steepness of the yield curve is determined by how fast an economy is expected to grow. The faster it is expected
to grow, the more the yield for longer tenures.
¾ When the economy is expected to grow only marginally, the yield curve is “flat”.
• Bond Yield inversionis defined aswhen the yield on a longer tenure bond becomes less than the yield for a shorter
tenure bond.
¾ An inverted yield curve shows that investors expect the future growth to fall sharply.
CORPORATE BOND MARKET

Context: The Task Force appointed under T N Manoharan has suggested
About Corporate Bonds
that a self-regulatory body (SRB) of market participants be set up to
A corporate bond is a type of debt instrument
develop appropriate benchmark rates for secondary market purchase
that is issued by a firm and sold to an investor
and sale of corporate loans just like corporate bonds.
• Committee on Development of Corporate Bond Market in Indiawas constituted in 2018 by SEBI under the chairmanship
of H.R. Khan.
State of Capital Markets: Bond Market vs Equity Markets
• Unlike the Indian equities market where the daily volumes of traded stocks are high, signifying liquidity or enough opportunity
for both buyers and sellers, the debt market is dominated more by trading in government bonds or securities.
• Over time, more Indian companies —both listed and unlisted ones — have started issuing bonds that offer semi-
annual interest payments to investors. But these bonds aren’t traded much due to limited investor base and low liquidity.
This, in turn, leads to lower volumes of their trades compared to the other segment of the capital market.
Measures taken in 2019-20 to deepen Corporate Bond Market
• The government will work with market regulators like RBI or SEBI to enable stock exchanges to allow AA rated bonds as
collaterals.
• Foreign Portfolio Investors (or FPIs) will be allowed to invest in debt securities issued by Infrastructure Debt Funds.
• A Credit Guarantee Enhancement Corporation, for which regulations have been notified by the RBI, will be set up in 2019-
20. It provides guarantee to bonds issued by completed projects.
BHARAT BOND ETF

Context:Cabinet Committee on Economic Affairs, chaired by Prime Minister, recently approved the creation of Bharat Bond
Exchange Traded Fund (ETF).
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Details: About Exchange Traded Fund (ETF)

• Bharat Bond exchange-traded fund (ETF) is India’s first corporate bond • An exchange-traded fund (ETF) is
ETFissued by state-run companies to be traded in stock market. a basket of securities that trade on
• The ETF will invest in a portfolio of AAA-rated bonds of public sector entities an exchange, just like a stock.
in two investment options for fixed maturity periods of three years and 10 • ETF share prices fluctuate all day
years. as the ETF is bought and sold; this
• The move will help public-sector companies raise funds through debt is different from mutual funds that
instruments and further develop domestic capital market. only trade once a day after the
market closes.
• The ETF will also increase the participation of retail investors as they are
currently not participating in bond markets due to liquidity and accessibility constraints.
• It is a pure Debt Fund. Its equity counterpart is Bharat 22 Fund. The government has launched Bharat 22 Fund that
contained the stocks of companies few years back. So, if Bharat 22 was an equity fund, Bharat Bond is a debt fund.
GOVERNMENT SECURITIES
• A Government security is a tradable instrument issued by the Central Government or the State Governments. It
acknowledges the Government’s debt ‘obligation.
• Such securities are short term (usually called treasury bills or Cash Management Bills with original maturities of less than
one year) or long term (usually called Government bonds or dated securities with original maturity of one year or more).
• Government securities carry practically no risk of default and, hence, are called risk-free gilt-edged instruments.
• In India, only the Central Government and not the state government can issue treasury bills and bonds or dated
securities while the State Governments issue only bonds or dated securities, which are called the State Development
Loans (SDLs).
• In terms of Sec. 21A (1) (b) of the Reserve Bank of India Act, 1934, the RBI may, by agreement with any State Government
undertake the management of the public debt of that State. Accordingly, the RBI has entered into agreements with 29
State Governments and one Union Territory (UT of Puducherry) for management of their public debt.
Treasury Bills (T-bills)
• Treasury bills or T-bills, which are money market instruments, are short term debt instruments issued by the Government
of India and are presently issued in three tenors, namely, 91 day, 182 day and 364 day.
• Treasury bills are zero coupon securities and pay no interest. They are issued at a discount and redeemed at the face value
at maturity.
Cash Management Bills (CMBs)
• In 2010, Government of India, in consultation with RBI introduced a new short-term instrument, known as Cash
Management Bills (CMBs), to meet the temporary mismatches in the cash flow of the Government of India.
• The CMBs have the generic character of T-bills but are issued for maturities less than 91 days.
Dated G-Secs
• Dated G-Secs are securities which carry a fixed or floating coupon (interest rate) which is paid on the face value, on half-
yearly basis. Generally, the tenor of dated securities ranges from 5 years to 40 years.
• The Public Debt Office (PDO) of the Reserve Bank of India acts as the registry / depository of G-Secs and deals with the
issue, interest payment and repayment of principal at maturity. Most of the dated securities are fixed coupon securities.
State Development Loans (SDLs)
• State Governments also raise loans from the market which are called SDLs.
• SDLs are dated securities issued through normal auction similar to the auctions conducted for dated securities issued by
the Central Government. Interest is serviced at half-yearly intervals and the principal is repaid on the maturity date.
• Like dated securities issued by the Central Government, SDLs issued by the State Governments also qualify for SLR. They
are also eligible as collaterals for borrowing through market repo as well as borrowing by eligible entities from the RBI
under the Liquidity Adjustment Facility (LAF).
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MASALA BONDS
Context: Asian Development Bank (ADB) has listed its 10-year masala About India INX
bonds worth Rs 850 crore on the global debt listing platform of India INX.
• India INX is the country’s first international
• The Kerala Infrastructure Investment Fund Board (KIIFB) is the first exchange, located at International Financial
sub-sovereign entity in India to tap the offshore Rupee Services Centre, GIFT City in Gujarat.
international bond market • It is a subsidiary of BSE Limited.
About Masala Bonds
• These are debt instruments offered in capital markets outside India and are denominated in Indian rupees (meaning
that the principal amount is linked to exchange rate of rupee).
• They are offered and settled in dollars to raise Indian rupees from international investors.
• As such, the currency risk in these bonds resides with the investor.
• The investor base in these bonds is much wider than the FPIs, which invest in the Indian markets.
• The objective of Masala Bonds is to fund infrastructure projects in India, fuel internal growth via borrowings and
internationalise the Indian currency.
• The subscriber of these bonds can sell rupee bonds to a third party (domestic or offshore)but the proceeds from the issue
can’t be used for real estate activities or capital market investment.
• IFC, the private arm of the World Bank launched the first offshore bond programme of $1 billion in October 2013.Post
2016, companies such as HDFC, NHAI, REC, IIFCL and NTPC issued ‘masala bonds.’
• Masala Bonds are regulated under the External Commercial Borrowing Policy of RBI.
Who can issue these bonds?
Any corporate (entity registered as a company under the Companies Act, 1956/ 2013) or body corporate (entity specially
created out of a specific act of the Parliament) and Indian banks are eligible to issue Rupee denominated bonds overseas. Real
Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) coming under the regulatory jurisdiction of
the Securities and Exchange Board of India (SEBI) are also eligible.
SEBI PANEL ON DIRECT OVERSEAS LISTING

Context: The Securities and Exchange Board of India (SEBI) has initiated consultations with various stakeholders including the
central government on the issue after a committee it appointed recommended that Indian companies be allowed to list in
select overseas jurisdictions directly.
Current Scenario
• Currently, Indian firms can only use the depository receipts route — American Depository Receipt (ADR) or Global Depository
Receipt (GDR) — to list on overseas exchanges.
• Companies incorporated in India can today list their debt securities on international exchanges (masala bonds) but their
equity share capital can be listed abroad only through the ADR/GDR route.
• For foreign companies wanting to list on Indian exchanges, the Indian Depository Receipt (IDR) is the only option
currently.
Indian Depository Receipt: It is a financial instrument denominated in Indian rupees in the form of a depository receipt.
It enables foreign companies to raise funds from the Indian securities markets.
Global Depository Receipts: Indian companies are allowed to raise equity capital in the international markets through
the issue of GDR. GDR are designated in USD/Euros or any other foreign currency. The proceeds of GDR can be utilized
for various purposes.
American Depository Receipts: It is a negotiable security that represents securities of a company that trades in the
U.S. financial markets.ADR route is taken as non-USA companies are NOT allowed to list on US stock exchanges by issuing
shares.These are like shares issued to US retail and institutional investors and are listed in NASDAQ/NYSE.
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PARTICIPATORY NOTES (P-NOTES)

Context: Investments in the Indian capital market through participatory notes (P-notes) is declining continuously.
About P-Notes
• P-Notes are among the group of investments considered to be Offshore Derivative Investments (ODIs).
• These are used by overseas market participants that don’t want to get registered as FPIs.
• P-notes are not issued in India, rather these are issued by an India registered FPI to other overseas investors.
• The FPI will be the entity to initiate a transaction in our stock markets, which could be on behalf of foreign clients.
• P-notes are then issued by the FPI to the client, underlining that the securities are held on behalf of the client albeit in the
name of the FPI.
• The P-note holder is entitled to all the dividends, capital gains and other payouts on the underlying securities.
• FPIs have to periodically report to SEBI on P-note issuance without the need to name the final beneficiary.
ALTERNATIVE INVESTMENT FUND (AIF)

Context: The government has announced the creation of an Alternate Investment Fund (AIF) with a targeted corpus of Rs
25,000 crore for the completion of stalled housing projects.
• Sovereign funds and pension funds will be allowed to invest in the category II AIF.
About Alternate Investment Funds (AIFs)
• Alternate Investment Fund or AIF means any fund established orincorporated in India which is a privately pooled
investment vehicle whichcollects funds from sophisticated investors, whether Indian or foreign, forinvesting it in
accordance with a defined investment policy for the benefit of itsinvestors.
• AIF does not include funds covered under the SEBI (Mutual Funds)Regulations, 1996, SEBI (Collective Investment Schemes)
Regulations, 1999or any other regulations of the Board to regulate fund management activities.
Types of AIFs
• Category I: Venture Capital Funds, Startup / Early stage funds, Infrastructure funds: Such funds generally invest in
start-ups or early-stage ventures, social ventures, SMEs, infrastructure or other sectors which are considered socially or
economically important for the country. These funds receive incentives or concessions by SEBI or the government of India.
• Category II: Private equity funds: Private equity (PE) funds, especially Real Estate PE funds, typically reduce the risk
profile by offering diversified investment portfolios managed by experienced fund managers.
• Category III: Hedge funds – Category III AIFs are a unique class of privately pooled funds that employ a range of
complicated trading strategies including but not limited to arbitrage, margin trading, futures and derivatives trading, etc.
to generate returns.
SOCIAL STOCK EXCHANGE

Context: In the Union Budget of 2019-20, Finance Minister proposed to set up a Social Stock Exchange.
About Social Stock Exchange
Securities and Exchange Board of India (SEBI)
• It will be administered by Securities and Exchange
• Itis a statutory body established under the provisions of SEBI
Board of India (SEBI).
Act, 1992
• It is an electronic fund raising platform for the
realization of social welfare objectives so that • Its objective is toprotect the interests of investors in securities
they can raise capital as equity, debt or as units like and to promote and regulate the securities market.
a mutual fund. • It is a quasi-legislative and quasi-judicial body which can
• It will enable investors to carry out impact draft regulations, conduct enquiries, pass rulings and impose
investing. penalties.
• It will allow the listing of social enterprises, bodies • A Securities Appellate Tribunal (SAT) has been constituted
working for social welfare and other voluntary to protect the interests of entities that feel aggrieved by
organizations. SEBI’s decision.
• It is an innovative measure to involve public • SAT has the same powers as vested in a civil court and their
participation in social causes through equity route. decision can be appealed in Supreme Court.
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• Social Stock Exchanges are present globally and allow entities operating in sectors including environment,
transportation, health etc. in raising risk-capital.
• India is not the first country to adopt social stock exchange. Countries like Canada, United Kingdom, Singapore, South
Africa, Brazil, and Kenya have already initiated their own social stock exchanges.
• SEBI has constituted a Working Group under the chairmanship of Ishaat Hussain to prepare draft norms for Social
Stock Exchange.
Impact Investments
• Itis an investment made into companies, organizations and funds with anintention to generate a measurable
social and environmental impact alongside a financial return.
• Impact investments can be made in both emerging and developed markets, and target a range of returns from
below market to market rate, depending on investors’ strategic goals.
• An investor’s intention to have a positive social or environmental impact through investments is essential to
impact investing.
• It is expected to generate a financial return on capital or, at minimum, a return of capital.
NORMS FOR CREDIT RATING AGENCIES BY SEBI

Context: Recently, the Securities and Exchange Board of India (SEBI) has released guidelines for Enhanced Disclosuresby
Credit Rating Agencies (CRAs).
About Credit Rating Agencies
• It evaluates and assesses an individual’s or a company’s creditworthiness.
• These agencies consider a debtor’s income and credit lines to analyse the debtor’s ability to repay the debt or if there is
any credit risk associated.
• (SEBI) reserves the right to authorise and regulate credit rating agencies according to SEBI Regulations, 1999 of the SEBI
Act, 1992.
• The Credit rating agencies in India are: CRISIL Limited, India Ratings and Research Pvt. Ltd, Credit Analysis and
Research Limited (CARE), The Investment Information and Credit Rating Agency (ICRA), Brickwork Ratings India Pvt.
Ltd, SMERA Ratings Limited and Infometrics Valuation and Rating Pvt. Ltd.

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TOPIC
4 EXTERNAL SECTOR
BILATERAL INVESTMENT TREATY CLAIMS AGAINST INDIA DISMISSED

Context: The government has announced that the International Arbitration Tribunal has dismissed all claims against India in
entirety in relation to the cancellation of Letters of Intent for providing 2G services.
Details
About Bilateral Investment Treaties (BITs)
• The claims were filed by Tenoch Holdings Limited (Cyprus),
Mr. Maxim Naumchenko (Russian Federation) and Mr. These are agreements between two countries (States) for
Andrey Poluektov (Russian Federation) against India the reciprocal promotion and protection of investments in
under the Bilateral Investment Treaties with Cyprus each other’s territories by individuals and companies
and Russian Federation. situated in either State.
• The proceedings were administered by the Permanent India signed its first BIT in 1994 with the United Kingdom.
Court of Arbitration (PCA). The following are the essential clauses covered under BITs:
• Bilateral Investment Treaties between the two 1. Applicability
countries allow a private investor to initiate dispute 2. Fair and Equitable Treatment and Full Protection & Security
arbitration proceedings against the government to 3. National treatment and Most-favored-nation treatment,
protect its investments. 4. Expropriation,
• The verdict was pronounced last year in July 2019 by the 5. Dispute settlement mechanisms, both between States
International Arbitration Tribunal constituted in and between an investor and a State.
accordance with the United Nations Commission on
International Trade Law (UNCITRAL) Arbitration Rules, 1976.
About International Arbitration Tribunal:
• It is an independent non-governmental panel of independent and impartial experts.
• It comprises of three members nominated by the Parties (or appointed by the International Arbitration Institution, or by
a National Court) on the basis of their legal and practical expertise and knowledge, to render a final and binding award.
RESIDENT INDIANS REMITTED OUT MORE MONEY THAN EVER UNDER LRS
Context: The outflow of funds by resident Indians under LRS over the last five years has almost negated the inflow of funds by
FPIs in the same period.
About LiberalisedRemittance Scheme (LRS)
• This is the scheme of the Reserve Bank of India, introduced in the year 2004.
• Under the scheme, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial
year (April – March) for any permissible current or capital account transaction or a combination of both.
Not Eligible: The Scheme is not available to corporations, partnership firms, Hindu Undivided Family (HUF), Trusts etc.
• Though there are no restrictions on the frequency of remittances under LRS, once a remittance is made for an amount up
to USD 2,50,000 during the financial year, a resident individual would not be eligible to make any further remittances
under this scheme.
Remitted Money can be used for:
• Expenses related to travelling (private or for business), medical treatment, studies, gifts and donations, maintenance of
close relatives and so on.
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• Investment in shares, debt instrumentsand buy immovable properties in the overseas market.
• Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions
permitted under the scheme.
Prohibited Transactions:
• Any purpose specifically prohibited under Schedule-I (like the purchase of lottery tickets, proscribed magazines, etc.) or
any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000.
• Trading in foreign exchange abroad.
• Capital account remittances, directly or indirectly, to countries identified by the Financial Action Task Force (FATF) as “non-
cooperative countries and territories”, from time to time.
• Remittances directly or indirectly to those individuals and entities identified as posing a significant risk of committing acts
of terrorism as advised separately by the Reserve Bank to the banks.
NON-TARIFF MEASURES (NTM)

About NTMs
NTMs are policy measures other than ordinary customs tariffs that can potentially have an economic effect on international
trade in goods, changing quantities traded, or prices or both.
Classification of NTMs
Examples of NTMs
1. Sanitary and Phytosanitary Measures:Measures that are applied to protect human or animal life from risks arising from:
additives, contaminants, toxins or disease-causing organisms in food.
2. Technical Barriers to Trade:Measures referring to technical regulations, and procedures for assessment of conformity
with technical regulations and standards.
3. Price-Control Measures:Measures implemented to control or affect the prices of imported goods.
4. Licensing, Quotas, Prohibitions & Quantity Control: Control measures generally aimed at restraining the quantity of
goods that be imported.
5. Contingent Trade-Protective Measures: Measures implemented to counteract particular adverse effects of imports in
the market of the importing country contingent upon the fulfilment of certain procedural and substantive requirements.
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a. Anti-Dumping Duty:Country A imposes an anti-dumping duty on imports of biodiesel products from country B, to
offset an injurious dumping by country B found to exist via an investigation.
b. Countervailing Duty:Country A imposes a countervailing duty on imports of semiconductors from country B, to
offset the subsidies granted by country B on the production of semiconductors found to exist via an investigation
ELECTRONIC CERTIFICATE OF ORIGIN

Context: Recently, Ministry of Commerce and Industry has launched a Common Digital Platform for issuance of Electronic
Certificate of Origin.
Details
• It will be a single access point for all exporters, for all Free About Certificate of Origin
Trade Agreements (FTAs)/Preferential Trade Agreements • A Certificate of Origin (CO) is an important
(PTAs) and for all agencies concerned. international trade document that certifies that
• It will be issued electronically which can be in paperless format goods in a particular export shipment are
if agreed to by the partner countries. wholly obtained, produced, manufactured or
• It provides administrative access to Department of Commerce processed in a particular country.
for reporting and monitoring purposes. • They declare the ‘nationality’ of the product
• The platform will be made live for FTAs in a phased manner as and also serve as a declaration by the exporter
per the concurrence of the concerned partner countries. to satisfy customs or trade requirements.
• Exporters may register on this platform and apply for Certificate of Origins to any of the designated agencies.
• The given below table compares the new platform with respect to the existing process in providing Certificate of Origin.
New Platform Existing Process

The issuance process is electronic, paperless and Current process requires the exporter to visit the agency
transparent. thrice for each certificate.
Real-time tracking of FTA utilization at product level, country Real-time tracking is not possible as data is fragmented
level etc. across various agencies.
Electronic Certificate of Origin issued. Physical Certificates of Origin issued.
Possible to electronically exchange Certificate of Origin with Electronic exchange of Certificate of Origin not possible.
the partner countries.
Reduces transaction cost and time for the exporters Current processes take more time and cost
NIRVIK: A NEW EXPORT CREDIT INSURANCE SCHEME

Context:Ministry of Commerce & Industries through the Export Credit Guarantee Corporation (ECGC) has launched a new
Export Credit Insurance Scheme (ECIS) called NIRVIK to enhance loan availability and ease the lending process.
Export Credit Insurance
• Export Credit Insurance (ECI) protects an exporter of products and services against the risk of non-payment by a
foreign buyer.
• The ECI significantly reduces the payment risks associated with doing international business by giving the exporter
conditional assurance that payment will be made if the foreign buyer is unable to pay.
NIRVIK
• Nirvik was proposed by the Finance Minister as part of the stimulus package to give boost to the exports.
• At present, the Export Credit Guarantee Corporation (ECGC) provides a cover of 60% of the loss to banks. The new scheme
will provide 90% coverage of the principal and interest of the loan for pre- and post-shipment credit, and half of this
will be provided in 30 days.
• The existing premium rate would be lowered under the new scheme and loans categorised into two broad categories of
those below 80 crore and those above that amount.
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¾ Loans above 80 crore will be further divided into those that are not for gold, jewellery or diamonds, and those that
are. The gems, jewellery and diamond (GJD) sector borrowers with limit of more than Rs 80 crore will have a higher
premium rate as compared to non-GJD sector borrowers of this category due to the higher loss ratio.
Export Credit Guarantee Corporation of India
• ECGC Ltd is wholly owned by the Ministry of Commerce and Industry.
• The Government of India had initially set up Export Risks Insurance Corporation in 1957.
• After the introduction of insurance covers to banks during the period 1962-64, the name was changed to Export Credit
& Guarantee Corporation Ltd in 1964.It was changed to ECGC Ltd in August 2014.
• Its objective was to promote exports from the country by providing credit risk insurance and related services for exports.
WTO DISPUTE SETTLEMENT MECHANISM

Context: The US has stalled appointments of members in the appellate body of WTO’s dispute settlement system.
About the Dispute Settlement System
• World Trade Organization (WTO) has a dispute settlement body (DSB) that settles trade disputes among members.
Disputes can arise from trade policies of members that are violative of the WTO rules.
• WTO procedures require sixty days of ‘consultations’ among the disputants to resolve the dispute failing which a
disputes panel is set up.
• There is no separate DSB but the General Council which is the second highest body in the organization works as the DSB
while giving verdict on the trade dispute.
• DSB conclusion can be challenged in an appellate body which hears appeals and then makes the final and binding
decision in disputes.
¾ The Appellate Body was established in 1995 under Article 17 of the Understanding on Rules and Procedures Governing
the Settlement of Disputes (DSU).
¾ The Appellate Body is composed of seven Members who are appointed by the DSB to serve for four-year terms,
with the possibility of being reappointed once.
¾ The Appellate Body can uphold, modify or reverse the legal findings and conclusions of a panel, and Appellate
Body Reports, once adopted by the Dispute Settlement Body (DSB), must be accepted by the parties to the dispute.
¾ The Appellate Body has its seat in Geneva, Switzerland.
• After the ruling, the erring nation is directed to make changes in its laws to make them WTO compliant within a reasonable
time.
• If the ‘losing country’ does not correct its laws, the complainant country is allowed to take cross retaliatory measures.
DEVELOPING COUNTRY STATUS IN WTO

Context: The South Korean Government has decided not to seek any special treatment as a developing country from future
negotiations at the World Trade Organization (WTO).
• A group of 45 nations including India and China has insisted that countries must be allowed to make their own assessments
regarding their developing country status.
Definition of a ‘Developing Country’ in the WTO
• There are no WTO definitions of “developed” and “developing” countries. Members announce for themselves whether
they are “developed” or “developing” countries.
• However, other members can challenge the decision of a member to make use of provisions available to developing
countries.
• A WTO member announces itself as a developing country does not automatically mean that it will benefit from the
unilateral preference schemes of some of the developed country members such as the Generalized System of Preferences
(GSP).
¾ In practice, it is the preference giving country which decides the list of developing countries that will benefit from the
preferences.
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Advantages of a Developing Country Status

• The WTO Agreements contain special provisions which give developing countries special rights. These provisions are
referred to as “Special and Differential Treatment” (S&D) provisions.
• The special provisions include:
¾ Longer time periods for implementing Agreements and commitments,
¾ Measures to increase trading opportunities for developing countries,
¾ Provisions requiring all WTO members to safeguard the trade interests of developing countries (Eg: Anti-dumping,
safeguards, technical barriers to trade, etc.)
• General Agreement on Trade and Tariffs (GATT) includes the provision of non-reciprocity in trade negotiations between
developed and developing countries — when developed countries grant trade concessions to developing countries,
they should not expect the developing countries to make matching offers in return.
GEOGRAPHICAL INDICATION (GI) TAG

Context: Recently, the Government of India has allotted GI tags to four new products from Tamil Nadu, Mizoram and Kerala.
Department of Promotion of Industry and Internal Trade (DPIIT) registered GIs for Palani Panchamirtham from Tamil Nadu,
Tawlhlohpuan and Mizo Puanchei from Mizoram and Tirur Betel leaf from Kerala.
About GI Tags
• GI is an indication used on products that have a specific GI Tags of 2019
geographical origin and possess the qualities or reputation that • KandhamalHaldi-Agricultural-Odisha
are due to that origin.
• KodaikanalMalaiPoondu-Agricultural - Tamil
• Approved by the Geneva-headquartered World Trade
Nadu
Organization, a GI tag recognises the place of origin of a product
• Pawndum-Handicraft-Mizoram
and the specific qualities or means of production associated
with it. • Ngotekherh-Handicraft-Mizoram
• A geographical indication right enables those who have the right • Hmaram-Handicraft-Mizoram
to use the indication to prevent its use by a thirdparty whose • Gulbarga Tur Dal-Agricultural-Karnataka
product does not conform to the applicable standards. • Khola Chilli-Agricultural-Goa
• GI is granted to a community or group or an institution that • Idu Mishmi Textile-Handicraft - Arunachal
represents the interests of the product. It is generallynot granted Pradesh
to an individual. • Dindigul Locks-Manufactured - Tamil Nadu
• The product canbe an agricultural, natural or manufactured • Kandangi Saree-Handicraft - Tamil Nadu
one.
• SrivilliputturPalkova - Food Stuff- Tamil Nadu
• It is valid for a decade, after which it can be renewed for another
• Kaji Nemu-Agricultural - Assam
10 years.
• India, as a member of the World Trade Organization (WTO), enacted the Geographical Indications of Goods
(Registration & Protection)Act, 1999 has come into force with effect from 15thSeptember 2003.
¾ The Act is administered by the Controller General of Patents, Designs and Trademarkswhois the Registrarof
Geographical Indications.
ICEDASH AND ATITHI

Context:Union Minister of Finance and Corporate Affairs unveiled two new IT initiatives – ICEDASH and ATITHI – for improved
monitoring and pace of customs clearance of imported goods and facilitating arriving international passengers by electronic
filing of customs baggage and currency declarations.
About ICEDASH:
• It is an Ease of Doing Business (EoDB) monitoring dashboard of the Indian Customs helping public sees the daily
customs clearance times of import cargo at various ports and airports.
• With ICEDASH, Indian Customs has taken a lead globally to provide an effective tool that helps the businesses compare
clearance times across ports and plan their logistics accordingly.
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• This dashboard has been developed by Central Board of Indirect Taxes and Customs in collaboration with National
Informatics Centre.
About ATITHI:
• Introduced by CBIC, ATITHI is a mobile app for international travellers to file the customs declaration in advance.
• It will facilitate hassle free and faster clearance by customs at the airports and enhance the experience of international
tourists and other visitors at our airports.
• Passengers can use this app to file declaration of dutiable items and currency with the Indian customs even before
boarding the flight to India.
• ATITHI is available on both, iOS and android.
Central Board of Indirect Taxes and Customs

• CBIC is a part of the Department of Revenue under the Ministry of Finance.
• It deals with the tasks of formulation of policy concerning levy and collection of Customs, Central Excise duties, Central
Goods & Services Tax and IGST, prevention of smuggling and administration of matters relating to Customs, Central
Excise, Central Goods & Services Tax, IGST and Narcotics to the extent under CBIC’s purview.
National Informatics Centre
• It was established in 1976, under Ministry of Electronics and Information Technology and is located in New Delhi.
• NIC provides network backbone and e-Governance support to the Central Government, State Governments and UT
Administrations.

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TOPIC
5 AGRICULTURE
BASICS OF AGRICULTURE
Share of workers employed in Agriculture:According to Census 2011, out of the total workers of 481.7 million, there are 118.7
million cultivators and 144.3 million agricultural labourers, which means approximately 55 per cent of the total workers were
employed in agriculture and allied sector.
• The percentage share of workers engaged in agriculture sector has been declining. As per Labour Bureau Report
2015-16, 46.1 per cent of the working population was employed in agriculture and allied sector.
Operational Landholdings in India:The average size of operational land holding in 2015-16 was 1.08 hectare.The small and
marginal holdings taken together (0.00-2.00 ha) constituted 86.21 per cent while their share in the operated area stood at
47.34 per cent in 2015-16.
Contribution to GDP:In 2018-19, the share of Agriculture & Allied GVA in overall GVA at 2011-12 prices was 14.4 per cent.
Agricultural activities have been divided into two broad heads, viz., crop and allied. Allied activity covers livestock,
forestry and fisheries.To stimulate the productivity of these activities, GoIundertook policy measures which led to various
agricultural revolutions:
• Green Revolution in Cereal Production • White Revolution in Milk Production
• Gene Revolution in Cotton Production • Blue Revolution in Fisheries Production
AGRICULTURAL CREDIT
Context:As many as nine states have reported a decline in banks’ credit outstanding to agriculture and allied activities during
the financial year ended March 2019, despite a rise in the overall credit offtake to the sector across the country.
Types of Agricultural Credit
Co-operative Banking Structure
• Short-term credit is the credit given to farmers to meet their
short-term needs like purchasing seeds, fertilizers, paying wages • The co-operative banking sector thrives either
to hired workers for a period less than 15 months etc. Such loans as three-tier or two-tier structure.
are usually paid back after harvest. • The three-tier structure includes StCB, DCCB
• Medium-term credit includes the credit facilities given to farmers and PACS, whereas in two-tier structure only
for medium periods ranging between 15 months and 5 years. StCB and PACS are present.
They extend for usually longer than short term credit and are • In the three-tier structure, the lower level tiers,
mostly used for the purchasing of cattle, pumping sets, and other i.e. DCCB and PACS extend credit to individual
agricultural implements. borrowers using their own funds/deposits and
• Long-term credit. When farmers require finance for a long period claim refinance from the upper tier, i.e. PACS
of more than 5 years for a long-term purpose, like buying additional from DCCB/StCB and DCCB from StCB.
land or making permanent improvement on the land like drilling • In the two-tier structure, PACS provide credit
of wells, reclamation of land, horticulture etc, it is termed as to individual borrowers and claim refinance
long-term credit. from StCB. In some cases, the StCBs also extend
Institutional vs Non-Institutional Sources: The average loan taken credit to the individuals through its branches
by agricultural households indicated that 72 per cent of the credit across the state.
requirement was met through institutional sources and 28 per cent from non-institutional sources.
• Scheduled commercial banks contributed the major share (78 – 80 per cent) in agricultural and allied credit.The share
of all co-operative banks/institutions (i.e. StCBs, DCCBs and PACS put together) constituted 15-16 per cent.RRBs
contributed the remaining 5 per cent of the agricultural credit.
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• Crop loan accounts for more than 90 per cent of the total agricultural credit though its contribution to total output is
approx. 60 per cent which means that the allied sector gets only 10 per cent of total credit while contributing the
remaining 40 per cent of the total output.
• The proportion of short-term crop loans to crop-related investment credit from 51:49 in the year 2000, drastically
changed to 75:25 in 2018.
Government | RBI Initiatives in boosting Agri Credit
1. Priority Sector Lending (PSL): RBI has earmarked 10% for Agriculture and 8% for small and Marginal Farmers.
• Marginal Farmer: upto 1 ht. landholding
• Small Farmer: more than 1 but upto 2 ht. of landholding.
2. Interest Subvention Scheme: It was introduced for short-term crop loans in 2006-07. The 2 per cent interest subvention
is reimbursed to banks (through RBI and NABARD) based on the funds released by the government against their claims.
Besides 2 per cent interest subvention, 3 per cent prompt repayment incentive (PRI), introduced in 2009-10, is given
reducing the cost of loan to 4 per cent.
3. Kisan Credit Card: Look at the details given below.
KISAN CREDIT CARD

Context: Recently, the government has extended the facility of Kisan Credit Card (KCC) to fisheries and animal husbandry
farmers.
Other Details KISAN CREDIT CARD (KCC)
• The KCC holders for animal husbandry and fisheries have • It was launched in 1998 with anaim of providing short-
the credit limit of Rs. 2 lakh to meet their working capital term formal credit to farmers.
requirements for animal husbandry and fisheries
• RRBs, Cooperative Banks and Public Sector
activities.
Commercial Banks have implemented the Kisan
• Interest subvention is available for animal husbandry Credit Card scheme in India.
and fisheries farmers @ 2% per annum at the time of
• All farmers who are eligible for the Kisan Credit Card
disbursal of loan and additional interest subvention will be issued a smart card cum debit card in addition
@ 3 % per annum in case of prompt repayment as to the Kisan Credit Card.
Prompt Repayment Incentive.
• Kisan Credit Card is valid for 5 yearssubject to annual
Eligibility of Kisan Credit Card (KCC) review.
• All farmers-individuals/Joint borrowers who are owner • Limit to be fixed on the basis of operational land
cultivators. holding, cropping pattern and scale of finance.
• Tenant farmers, oral lessees and Share Croppers etc. The basic features associated with the card are mentioned
• SHGs or Joint Liability Groups of farmers including tenant below:
farmers, share croppers etc., • Credit to meet the financial requirements of
The criterion for eligible beneficiaries under Kisan Credit Card agricultural and other allied activities.
(KCC) for Animal Husbandry and Fisheries is as follows: • Ancillary credit for crop production and other
• Inland Fisheries and Aquaculture – a) Fishers, Fish contingencies.
Farmers (individual & groups/partners/share croppers/ • Investment credit for agricultural requirements such
tenant farmers), Self Help Groups, Joint Liability Groups as dairy animals, pump sets etc.
and Woman groups; and b) The beneficiaries must own
• Produce marketing loans.
or lease any of the fisheries related activities such as
• Post-harvest expenses.
pond, tank, open water bodies, raceway, hatchery,
rearing unit, possess necessary license for fish farming • Insurance coverage for Kisan Credit Card holders,
and fishing related activities, and any other State specific including asset insurance and personal accident
fisheries and allied activities. insurance scheme (PAIS).
• Marine Fisheries – Beneficiaries as listed above who own or lease registered fishing vessel, boat, possess necessary
fishing license/permission for fishing in estuary and sea, fish farming/ mariculture activities in estuaries and open
sea and any other State specific fisheries and allied activities.
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• Poultry and small ruminant – Farmers, poultry farmers either individuals or joint borrower, Joint Liability Groups or Self
Help Groups including tenant farmers of sheep/goats/pigs/poultry/birds/rabbit and having owned/rented/leased sheds.
• Dairy – Farmers and Dairy farmers either individuals or joint borrower, Joint Liability Groups or Self Help Groups including
tenant farmers having owned/rented/leased sheds.
mKISAN PORTAL
Context: Recently, Ministry of Agriculture and Farmers’ Welfare provided a state-wise distribution of farmers registered on
‘mKISAN portal’. More than 24 billion SMSs have been sent to the farmers since the launch of the portal.
About mKISAN Portal (Tool of Agricultural Extension)
• The portal enablesall Central and State government organisations in agriculture and allied sectors to give information/
services/advisories to farmers by SMS in their language, preference of agricultural practices and location.
• SMSs can be sent in 12 languages viz., Bengali, Gujarati, Hindi, Kannada, Malayalam, Marathi, Oriya, Punjabi, Tamil,
Telugu, Urdu and English.
• Ithas been conceptualized, designed and developed in-house within the Department of Agriculture & Cooperation.
• USSD (Unstructured Supplementary Service Data), IVRS (Interactive Voice Response System) and Pull SMS are value
added services which have enabled farmers and other stakeholders not only to receive broadcast messages but also to get
web-based services on their mobile without having internet.
• Semi-literate and illiterate farmers have also been targeted to be reached through voice messages.
BHARTIYA POSHAN KRISHI KOSH

Context: Recently, Ministry of Women and Child Development in collaboration with Bill & Melinda Gates Foundation (BMGF)
announced the BharatiyaPoshan Krishi Kosh (BPKK).
About BharatiyaPoshan Krishi Kosh
• The BPKK project has two components: (a) Development of a Food Atlas and (b) Documentation of promising practices for
Jan-Andolan for POSHAN Abhiyaan.
• The Agro-Food Atlas is to act as a repository of diverse crops across 128agro-climatic zones of the country having
three parts:
¾ Crops currently being grown.
¾ Agro-ecological conditions (soil, organic carbon content, ground water availability).
¾ Guidance on how a greater diversity of crops could be encouraged in a particular district or block to promote dietary
diversity and nutrition.
• The projectdocuments social, behavioural and cultural practices that promote and reinforce healthy dietary behaviours.
• The Kosh aims to reduce malnutrition among women and children across the country, through a multi-sectoral results-
based framework, including agriculture.
NABVENTURES: FUND FOR RURAL AGRICULTURE START-UP

Context: Recently, NABARD has launched an Apex Development Financial Institution for equity investments in agriculture and
rural-focused start-ups.
NABARD
Details
• It was established in 1982 as an apex development
• It is launched by Nabventures(under Companies Act, 2013)
financial institution.
which is a subsidiary of NABARD.
• It was constituted on the recommendation of B.
• Nabventures has proposed a corpus of 500 crorewith an
Sivaraman Committee.
option to retain over-subscriptions of Rs 200 crore, called
as the greenshoe option. • It replaced the Agricultural Credit Department and
Rural Planning and Credit Cell of RBI, and
• The fund will be used for investing in start-ups engaged
Agricultural Refinance and Development
inagriculture, food and rural development space.
Corporation (ARDC).
• It will enhance the investment ecosystem in the core areas
of agriculture, food and improvement of rural livelihoods. • It is now 100% owned by the government of India.
• The fund is registered with SEBI as a Category II Alternative Investment Fund.
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About Greenshoe Option

• A greenshoe option is an over-allotment option.
• In the context of an initial public offering (IPO), it is a provision in an underwriting agreement that grants the underwriter
the right to sell investors more shares than initially planned by the issuer, if the demand for a security issue proves higher
than expected.
NCDEX- AGRIDEX
Context: NCDEX, a leading agri-commodity bourse, launched an index AGRIDEX, in collaboration with National Stock Exchange
(NSE).
About AGRIDEX
• It will track and replicate the performance of the ten mostliquid commodities traded on the NCDEX platform.
• It is a return-based agri-features index.
• It will act as a robust indicator of the broader market.
• NCDEX will launchcash settled tradable futures contracts on AGRIDEX on receipt of SEBI’s approval.
• Futures trading on AGRIDEX will also enhance overall liquidity on exchange platform.
National Commodity & Derivatives Exchange Limited (NCDEX)
• It is a professionally managed online multi commodity exchange.
• It is a public limited company incorporated under Companies Act, 1956 in 2003.
• It is a national level, technology driven de-mutualised online commodity exchange with an independent Board of
Directors and professional management.
• It is regulated be Securities and Exchange Board of India (SEBI).
NATIONAL MARINE FISHERIES (REGULATION AND MANAGEMENT) ACT, 2019

Context: The Union government passed the National Marine Fisheries (Regulation and Management) Bill, 2019 for regulation
and management of fisheries and fishing related activities.
Fisheries and Aquaculture Infrastructure Development
Fisheries Sector in India Fund (FIDF)
• India is the second largest fish producer in the world • Objective: FIDF would provide concessional finance
with a total production of 13.7 million metric tonnes in to State Governments / UTs and State entities,
2018-19 of which 65 per cent was from inland sector. cooperatives, individuals and entrepreneurs etc., for
• Fish and fish product exports emerged as the largest taking up of the identified investment activities of
group in agricultural exports in 2018-19.Currently, the fisheries development.
USA is the largest market for Indian seafood products • Nodal Loaning Entities (NLEs): National Bank for
with a share of 26.46% in terms of India’s exports of marine Agriculture and Rural Development (NABARD),
products followed by South East Asian Countries- 25.71% National Cooperatives Development Corporation
and the European Union Nations- 20.08%. (NCDC) and all scheduled banks are the designated
• The fishing sector accounts for 5.2 per cent share of NLEs in disbursal of the fund.
agricultural GDP and around 1% of the GDP of country. • Interest rate: The Department of Fisheries under the
• Andhra Pradesh tops the list of Inland and Marine fish FIDF provides interest subvention up to 3% per annum
production. for providing the concessional finance by the NLEs at
the interest rate not lower than 5% per annum.
• As fisheries is a state subject, fishing in the Internal
Waters and Territorial Seas (TS) come within the purview of the concerned states.
• Other activities in the TS and activities including fishing beyond the TS up to the limit of the EEZ, are in the Union list.
• There is no central law framed which covers the entire EEZ.
• An independent Department of Fisheries has been created in 2019 to provide sustained and focused attention
towards the development of fisheries sector.
• To address the gaps in fisheries infrastructure, the government has created the Fisheries and Aquaculture Infrastructure
Development Fund.
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Key Highlights of the Act

• India has obligations to frame laws under the United Nations Convention on the Law of the Sea (UNCLOS) 1982 and the
World Trade Organisation (WTO) agreements.
• It provides fornationalization of Exclusive Economic Zone (EEZ) by prohibiting fishing by foreign fishing vessels.
• Indian fishing vessel must obtain a permit if they desire of fishing in the EEZ, outside the Territorial Sea (TS).
• No permit shall be issued unless the fishing vessel is registered under the Merchant Shipping Act, 1958.
• No permit shall be granted under this Act to foreign fishing vessel for fishing and fishing related activities within the
exclusive economic zone of India.
• The Central Government may by notification in the Official Gazette, designate one or more Central Government or
State Government agencies or officials or create a new government agency to discharge any one or more of its powers
and functions under this Act.
• Notwithstanding anything contained in the Code of Criminal Procedure, 1973, every offence punishable under this Act
shall be cognizable.
• It respects the jurisdiction of our coastal states over the Territorial Sea.
• It proposes social security for fish workers and calls for protection of life at sea during severe weather events.
• It is provides for responsible and long-term sustainable and optimal utilization of marine fish resources.
About UNCLOS:
• The United Nations Convention on the Law of the Sea (UNCLOS) is an international treaty which was adopted and
signed in 1982.
• It replaced the four Geneva Conventions of April, 1958, which respectively concerned the territorial sea and the
contiguous zone, the continental shelf, the high seas, fishing and conservation of living resources on the high
seas.
• The Convention has created three new institutions on the international scene: International Tribunal for the Law of
the Sea, International Seabed Authority, and Commission on the Limits of the Continental Shelf.
• It is the completely binding prevailing law of the sea.
• It defines the rights and responsibilities of nations with respect to their use of the world’s oceans, establishing
guidelines for businesses, the environment, and the management of marine natural resources.
• The UN has no direct operational role in the implementation of the Convention.
• India ratified this convention in 1995.
Zones under UNCLOS
Under UNCLOS, the sea and resources in the water and the seabed are classified into three zones — the internal waters
(IW), the territorial sea (TS) and the exclusive economic zone (EEZ).
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• Internal Waters: It is on the landward side of the baseline which includes gulfs and small bays.It also includes littoral
areas such as ports, rivers, inlets and other marine spaces landward of the baseline (low-water line) where the port
state has jurisdiction to enforce domestic regulations.
• Territorial Sea:According to UNCLOS, the territorial sea can be defined as the area which extends up to 12 nautical
miles from the baseline of a country’s coastal state.Coastal nations enjoy sovereignty over airspace, sea, seabed and
subsoil and all living and non-living resources in territorial sea area.
• Contiguous Zone: It can be defined as the belt which extends 12 nautical miles beyond the territorial sea limit.
• Exclusive Economic Zone(EEZ): It is an area beyond and adjacent to the territorial sea. It can extend to a maximum
200 nautical miles from the baselines.Coastal nations have sovereign rights for exploration, exploiting, conserving
and managing all the natural resources in EEZ.
• High Seas: It can be defined as the part of the sea that is not included in the exclusive economic zone, in the
territorial sea, or in the internal waters of a coastal state or archipelagic waters of an archipelagic state.
BLUE REVOLUTION
Context:Vice-President inaugurated the fifth edition of the Aqua Aquaria India in Hyderabad.It is a biennial exhibition organised
by the Marine Products Export Development Authority (MPEDA).
About Marine Products Export
Blue Revolution in India Development Authority (MPEDA):
• It was launched in India during the 7thFive Year Plan (FYP) that went from
• It is a nodal coordinating, state-owned
1985 to 1990 during which the government sponsored the Fish Farmers
agency engaged in fishery production
Development Agency (FFDA).
and allied activities.
• During the 8thFYP, from 1992-97, the Intensive Marine Fisheries Program
• It was established in 1972 under the
was launched in which collaboration with MNCs was encouraged.
Marine Products Export Development
• The focus of the Blue Revolution 2.0 (Neel Kranti Mission) is on
Authority Act (MPEDA), 1972.
development and management of fisheries. This covers inland fisheries,
aquaculture, marine fisheries including deep sea fishing, mariculture and • It functions under the Union Ministry
all activities undertaken by the National Fisheries Development Board. of Commerce and Industry.
¾ It is a central sector scheme. The share of centre and state is 50:50 for general states and 80:20 for Hilly/North-east
states.
¾ The National Fisheries Development Board (NFDB) was established in 2006 as an autonomous organization under
the administrative control of the Department of Fisheries, Ministry of Agriculture and Farmers Welfare, to enhance
fish production and productivity in the country and to coordinate fishery development in an integrated and holistic
manner.
¾ Now, the Board works under the Ministry of Fisheries, Animal Husbandry and Dairying.
20th LIVESTOCK CENSUS

Context:Recently, the 20thLivestock Census report has been released by Department of Animal Husbandry & Dairying, Ministry
of Fisheries, Animal Husbandry and Dairying.
About Livestock Census:
• This census has been conducted in the country periodically since 1919-20. Since then it has been conducted onceevery 5
years.
• The Livestock Census covers all domesticated animals and its head-counts.
• This enumeration was done both in rural and urban areas.
Key Results of the 20thLivestock Census:
• The total Livestock population is 535.78 million in the country showing an increase of 4.6% over Livestock Census-
2012
• Total Bovine population (Cattle, Buffalo, Mithun and Yak) is 302.79 Million in 2019 which shows an increase of about 1%
over the previous census.
• In 20thLivestock Census, 35.94%-Cattle, 27.80%-Goat, 20.45%-Buffaloes, 13.87%-Sheep, 1.69%-Pigs.
• The total number of cattle in the country in 2019 is 192.49 million showing an increase of 0.8 % over previous Census.
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• The other livestock including mithun, yak, horses, ponies, mule, donkeys, camel together contribute around 0.23%
of the total livestock.
• Uttar Pradesh (UP) has recordedhighest livestock population in 2019 followedby Rajasthan, MP, West Bengal and Bihar.
INAPH PROJECT
Context: Recently, India is implementing the world’s biggest project of tagging every bovine animal through Information
Network for Animal Productivity and Health (INAPH) project.
National Dairy Development Board
About INAPH • It has been constituted as a body corporate
• The objective behind INAPH is to enable proper identification of and declared an institution of national
animals and traceability of their products, be it milk or meat. importance by an Act of Parliament.
• The nodal agency and repository for INAPH is the National Dairy • Initially, it wasregistered as a society
Development Board (NDDB). under the Societies Act 1860, but later on
• A 12-digit unique identification number will be given to each animal was merged with the erstwhile Indian
under this project. Dairy Corporation, a company formed and
• This unique identification number will track the population of registered under the Companies Act 1956.
livestock. • It was created to promote, finance and
• Animal UID – also known as Pashu Aadhar - is similar to Aadhaar in support producer-owned and controlled
organisations.
three ways:
¾ It assigns a unique random identification number to each animal.
¾ It captures a host of data and information useful for the effective and scientific management of India’s livestock
resources.
¾ It will be the biggest global database of animals.
• The first phase would cover the country’s 94 million-odd productive “in milk” female cow and buffalo population (all
indigenous, non-descript, crossbred as well as exotic milch animals).
• Each animal will be provided a thermoplastic polyurethane ear tag bearing its unique identification number.
• INAPH is equipped to send messages to farmers, providing appropriate advice regarding their animals.
• The database generated should be seen as a significant step in heralding the next White Revolution.
EDIBLE OIL DEFICIENCY

Classification of Oils
• Edible -soybean, rapeseed-mustard, groundnut, sesame, sunflower, safflower and niger
• Non-edible - castor and linseed
Context: Ministry of Commerce made a plea to the Ministry of Agriculture to work out
a plan for self-sufficiency in edible oils.
Important Facts
• Indonesia is the world’s largest producer and exporter of palm oil followed by
Malaysia.
• India is the world’s largest importer of edible oil.
• As much as 70 per cent of India’s domestic demand for edible oil is met through
imports, of which palm oil constitutes around 80 per cent.
¾ Import of edible oil is the third largest item after crude oil and gold.
¾ Low domestic production of edible oilis mainly due to rainfed conditions,
high seed cost, small-holding with limited resources, low seed replacement
rate and low productivity.
¾ The capacity utilisation of the domestic oil industry is 35-50% because of low
availability of raw material and eased import of refined oil.
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Yellow Revolution
• The revolution launched in 1986- 1987 to increase the production of edible oil, especially mustard and sesameseeds
to achieve self-reliance is known as the Yellow Revolution.
• Sam Pitroda is Known as the father of the Yellow Revolution in India.
• Yellow Revolution targets nine oilseeds that are groundnut, mustard, soybean, safflower, sesame, sunflower, niger,
linseed, and castor.
BEEKEEPING DEVELOPMENT COMMITTEE

Context: Recently, Bibek Debroy led Beekeeping Development Committee has submitted its report to Economic Advisory
Council to the Prime Minister.
Honey Bee Industry in India
• As per Food and Agricultural Organization, in 2017-18, India ranked eighth in terms of honey productionwhile China
stood first with a production level.
• India has a potential of about 200 million bee colonies as against 3.4 million bee colonies today.
• Beekeeping cannot be restricted to honey and wax only but can also be done for developing products such as pollen,
propolis, royal jelly and bee venom which are also marketable.
National Bee Board
• It is a Registered Society under Societies Registration Act, 1860.
• It is promoted by Small Farmers Agribusiness Consortium (SFAC).
• It was reconstituted in 2006.
MERI FASAL MERA BYORA

Context: Recently, the Haryana government announced the launch of ‘Meri Fasal,MeraByora’ portal.
About the Portal
• It will provide the farmers of the state with multiple services on a single portal.
• The farmers can register into the portal to access all the online services offered by the Haryana Government.
• The crop of registered farmers on this portal will be purchased at the support price fixed by the Government.
• The Government, through this portal, will directly benefit the farmers on every scheme introduced for the welfare of farmer.
• The farmers will be provided with an incentive of Rs.10 Per acre on registering under this portal.
• Under this portal, the options for selling and marketing the agricultural products are also available for making
competitive returns.
• The Village Level Enterprise (VLE) of the Common Service Centres located in the villages will register the crop details of
farmers online at the free of cost.
SEED AWARDS
Context: SEED Awards 2019 were announced recently which included 5 India start-ups working on sustainable development.
About SEED
• It was founded by the United Nations Environment Programme (UNEP), the United Nations Development Programme
(UNDP) and International Union for Conservation of Nature (IUCN).
• It was established at the 2002 World Summit on Sustainable Development in Johannesburg.
• It is a global partnership for action on sustainable development and the green economy.
• It works in Asian and African countries including Ghana, India, Indonesia, South Africa, Thailand and Uganda and
supports small and growing enterprises with business and capacity-building support.
• The SEED award highlights the contribution of green and social enterprises to advancing the Sustainable Development
Goals (SDGs).
• The 2019 SEED Awards categorized includes SEED Low Carbon, SEED Africa Awards, SEED South Africa Climate
Adaptation Awards and SEED Gender equality award.
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TOPIC
6 INDUSTRY
INDICES TO MEASURE INDUSTRIAL PRODUCTION

INDEX OF INDUSTRIAL PRODUCTION (IIP)
• IIP is a composite indicator that measures the growth rate of industry groups classified under:
¾ Broad sectors, namely, Mining (14.37%), Manufacturing (77.63%) and Electricity (7.99%).
¾ Use-based sectors, namely Basic Goods, Capital Goods, and Intermediate Goods.
• It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics and Programme
Implementation.
• Base Year for IIP is 2011-2012.
• The eight core industries of India represent about 40% of the weight of items that are included in the IIP.
INDEX OF EIGHT CORE INDUSTRIES
• The Eight Core Industries comprise 40.27 percent of the weight of items included in the Index of Industrial Production
(IIP).
• Base Year: 2011-12
• Released by:Office of Economic Adviser (OEA), Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce
& Industry.
• The eight Core Industries in decreasing order of their weightage: Petroleum Refinery>Electricity>Steel>Coal>Crude Oil>
Natural Gas> Cement>Fertilizers.
MICRO, SMALL AND MEDIUM ENTERPRISES

Context: Recently, Reserve Bank of India (RBI) has set up an eight-member expert committee under former SEBI chairman
U.K. Sinha to understand the structural bottlenecks and factors
affecting the performance of the Micro, Small and Medium
Enterprises (MSME).
• The Minister for Micro, Small and Medium Enterprises
and Road Transport & Highways has recently approved
the changes in the Interest Subvention Scheme for
MSMEs.
• Requirement of Udyog Aadhar Number (UAN) is
dispensed with for units eligible for GST.
Interest Subvention Schemes for MSMEs:
• It was launched with an aim to encourage both
manufacturing & service enterprises to increase productivity.
• Under this scheme, the government provides 2%
interest subvention for all GST (Goods and Service tax)
registered MSMEs on fresh or incremental loans of up to
Rs 1 crore.
• Small Industries Development Bank of India (SIDBI) is the national level nodal implementation agency of this scheme,
which is in operation for a period of two financial years FY 2019 and FY 2020.
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NATIONAL INVESTMENT AND MANUFACTURING ZONES (NIMZS)

Context:Government has granted final approval to three National Investment and Manufacturing Zone (NIMZ) – one in
Kalinganagar, Jajpur district of Odisha, another in Prakasam district of Andhra Pradesh and a third in Sangareddy district
(erstwhile Medak district) of Telangana.
About NIMZs
• National Investment & Manufacturing Zones (NIMZs) are one of the important instruments of National Manufacturing
Policy, 2011 (now called Make in India).
• NIMZs have been conceived as large integrated industrial townships with state of-the-art infrastructure; land use on
the basis of zoning; clean and energy efficient technology; necessary social infrastructure; skill development facilities,
etc., to provide a conducive environment for manufacturing industries.
• The NIMZ will be declared by the State Government as an industrial township under Article 243Q(1)(c) of the
Constitution.
• Central government provides external physical infrastructure linkages to the NIMZs including rail, road, ports, airports
and telecom, in a time-bound manner and also provides viability gap funding wherever required.
• The State Government will constitute a Special Purpose Vehicle (SPV) to discharge the functions specified in the policy.
• The SPV will prepare a strategy for the development of the zone and an action-plan for self-regulation to serve the purpose
of the policy.
• Department for Promotion of Industry and Internal Trade (former DIPP) is the nodal agency for NIMZ.
• NIMZ can be proposed with land area of at least 5000 hectares.
• Land will be selected by state governments and preference would be given to uncultivable land.
Difference with SEZs
• The main objective of Special Economic Zones is promotion of exports, while NIMZs are based on the principle of
industrial growth in partnership with States and focuses on manufacturing growth and employment generation.
• NIMZs are different from SEZs in terms of size, level of infrastructure planning, governance structures related to regulatory
procedures, and exit policies.
ENERGY SECTOR – AT A GLANCE
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Total Installed Capacity
Sector MW % of Total
Central Sector 93,097 25.2%
State Sector 103,292 28.0%
Private Sector 173,039 46.8%
Total 3,67,281
Fuel MW % of Total
Total Thermal 2,30,701 62.8%
Coal 1,98,495 54.2%
Lignite 6,760 1.7%
Gas 24,937 6.9%
Diesel 510 0.1%
Hydro (Renewable) 45,699 12.4%
Nuclear 6,780 1.9%
RES* (MNRE) 86,759 23.5%
Total 369,428
COMMERCIAL MINING OF COAL

Context:Parliament have recently passed the Mineral Laws (Amendment) Bill, 2020 which opens up the coal sector for commercial
mining by paving way for private and global players.
• This Act amends the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and the Coal Mines
(Special Provisions) Act, 2015 (CMSP Act).
• The Coal Mines Special Provision Act 2015, which provides for opening up of commercial coal mining to private and public
entities, is an offshoot of the 1973 Act.
Regulation of the Coal Sector
• The Ministry of Coal has the overall responsibility of managing coal reserves in the country.
• India is the third-largest producer of coal in the world, but also third-biggest importer of coal despite having the
world’s fourth largest coal reserves.
• India’s coal industry was predominantly driven by the private sector in the early years after Independence.
• Indira Gandhi government in 1973 transferred all coal holdings to public sector company “Coal India Ltd” through the
Coal Mines (Nationalisation) Act, 1973.
• TheAct allows private Indian companies to mine coal only for captive use.
¾ Captive mining is the coal mined for a specific end-use by the mine owner, but not for open sale in the market. End-
uses currently allowed under the CMN Act include iron and steel production, generation of power, cement
production and coal washing.
¾ The central government may notify additional end-uses.
• Till 1993, there were no specific criteria for the allocation of captive coal blocks.Captive mining for coal was allowed in
1993 by amendments to the CMN Act.
• In 2019, Government allowed 100% FDI under the automatic route in coal mining for captive consumption.
• The Mineral Laws (Amendment) Act, 2020removes this restriction on the use of coal mined by such companies.
Companies will be allowed to carry on coal mining operation for own consumption, sale or for any other purposes, as may
be specified by the central government.
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Other Details
• India will now offer coal mines to private companies ‘only for commercial mining and sale purpose’, thereby moving away
from the earlier regime of offering mines for captive use.
• The coal ministry will auction coal blocks for commercial mining on a revenue sharing basis which is based on the
recommendations of an expert committee headed by former Central Vigilance Commissioner Pratyush Sinha.
ULTRA MEGA POWER PROJECTS (UMPPS)

About UMPPs
• These are a series of ambitious power projects
planned by the Government of India with a
capacity of approximately 4000 MW each.
• The projects will substantially reduce power
shortages in the country. The Central
Government has accordingly taken the
initiatives for facilitating the development of
16 Ultra Mega Power Projects of about 4,000
MW capacity each under tariff based
competitive bidding route using super critical
technology on build, own and operate basis.
• These projects would use Super Critical
Technology with a view to achieve higher
levels of fuel efficiency, which results in fuel
saving and lower greenhouse gas emissions.
• Ministry of Power in association with the
Central Electricity Authority and Power
Finance Corporation Ltd. has launched an
initiative for the development of coal-based
UMPP’s in India.
• Mundra UMPP is fully commissioned and
generating electricity.
DISCOM DEBT TO RETURN TO PRE-UDAY LEVELS

Context:As per a recent report of the rating agency CRISIL, the total debt of state-owned DISCOMS is set to increase to pre-
Uday levels of Rs 2.6 trillion by the end of this fiscal year 2019-2020.
Energy Efficiency Services Limited (EESL)
Details:
• It is an energy service company (ESCO) of the
• In 2015, Ministry of Power, Government of India launched the Government of India and is the world’s largest
Ujwal DISCOM Assurance Yojana (UDAY). It was designed to public ESCO.
turn around the precarious financial position of state power • It is 100% government owned, a joint venture
distribution companies (DISCOMs). of state-owned NTPC Limited, Power Finance
• DISCOMs are responsible for buying electricity from the Corporation, Rural Electrification Corporation
generation companies and selling them to consumers. and POWERGRID.
• The DISCOMs losses, which had progressively reduced in the • EESL was formed under India’s Ministry of
first couple of years (since the inception of UDAY), have rebounded Power to facilitate energy efficiency projects.
in 2019 to nearly double the losses recorded the previous
Aggregate Technical and Commercial (AT&C) Losses
year.
It has two components
• According to PRAAPTI (Payment Ratification and Analysis in
Power procurement for bringing Transparency in Invoicing of • Technical Loss: It is due to the flow of power in
transmission and distribution system.
generators) portal, the discoms’ total outstanding dues to
power gencos (power generating companies) rose 48% in • Commercial Loss: It is due to theft of electricity,
October 2019. deficiencies in metering, etc.
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• Discoms have also missed the year 2019 UDAY target to bring down their Aggregate Technical and Commercial (AT&C)
losses to 15%.
About UDAY Yojana
The UjwalDiscom Assurance Yojana (UDAY) was launched by the Ministry of Power in November 2015 to help turn around
the poor financial situation of state DISCOMs.
Critical Components
• Takeover of 75% of discom debt by state governments,
• Reduction in AT&C losses,
• Timely tariff revisions and elimination of the gap between the Average Cost of Supply (ACS) and Average Revenue
Realised (ARR) by the financial year 2019.
States to take over future losses of DISCOMs as per trajectory in a graded manner.
[0% of loss of 14-15 & 15-16; 5% of 16-17; 10% of 17-18; 25% of 18-19 & 50% of 2019-20]
MINERAL LAWS (AMENDMENT ACT), 2020

Context: The Mineral Laws (Amendment) Bill, 2020 was Seventh Schedule
passed by the Parliament which amends the Mines and
• Entry 23 of State List (List II) confers power on the State
Minerals (Development and Regulation) Act, 1957 (MMDR
Government for the regulation of minerals subject to the
Act) and the Coal Mines (Special Provisions) Act, 2015 (CMSP
Entry 54 of List I.
Act).
• Entry 54 of Centre List (List I) also confers power on the
• The MMDR Act regulates the overall mining sector
Central Government for regulation of certain mines and
in India. The CMSP Act provides for the auction and
minerals decided by the Parliament by law.
allocation of mines whose allocation was cancelled by
Ownership of Mineral
the Supreme Court in 2014.
• The State Governments are the owners of minerals located
• Schedule I of the Act provides a list of all such mines;
within the boundary of the State concerned.
Schedule II and III are sub-classes of the mines listed
• The Central Government is the owner of the minerals
in the Schedule I.
underlying the ocean within the territorial waters or the
• Schedule II mines are those where production had
Exclusive Economic Zone of India.
already started then, and Schedule III mines are ones
Granting Mineral Concessions
that had been earmarked for a specified end-use.
• The State Governments grant mineral concessions for all
Important Provisions of the Act
the minerals located within the boundary of the State,
• Removal of restriction on end-use of coal: Currently, under the provisions of the Mines and Minerals
mining companies can use the coal produced only for (Development and Regulation) Act, 1957 and Mineral
specified end-uses such as power generation and steel Concession Rules, 1960.
production. The Act removes this restriction, allowing • However, for minerals specified in the First Schedule to
companies to carry on coal mining operation for the Mines and Minerals (Development and Regulation)
own consumption, sale or for any other purposes, Act, 1957 approval of the Central Government is
as may be specified by the central government. necessary. Schedule I contains minerals such as coal
• Eligibility for auction of coal and lignite blocks: The and lignite, minerals of the “rare earths” group containing
Act clarifies that the companies need not possess any Uranium and Thorium.
prior coal mining experience in India in order to Minor Minerals
participate in the auction of coal and lignite blocks. • Central Government notifies certain minerals as ‘minor’
This enables 100% foreign direct investment in the minerals from time to time for which the absolute powers
sector through automatic route. for deciding on procedures of seeking applications for and
• Composite license for prospecting and mining: granting mineral concessions, fixing rates of royalty, dead
Currently, separate licenses are provided for rent, and power to revise orders rest only with the State
prospecting and mining of coal and lignite, called Government. Example of minor minerals include building
prospecting license, and mining lease, respectively. stones, gravel, ordinary clay, ordinary sand.
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The Act adds a new type of license, called prospecting license-cum-mining lease. This will be a composite license
providing for both prospecting and mining activities.
• Prior approval from the central government: Under the MMDR Act, state governments require prior approval of the
central government for granting reconnaissance permit, prospecting license, or mining lease for coal and lignite.
The Act provides that prior approval of the central government will not be required in granting these licenses for coal and
lignite, in certain cases. These include cases where: (i) the allocation has been done by the central government, and (ii) the
mining block has been reserved to conserve a mineral.
KABIL SET UP TO ENSURE SUPPLY OF CRITICAL MINERALS

Context: Ministry of Mines announced the setting up of Khanij Bidesh India Ltd. (KABIL) to ensure a consistent supply of
critical and strategic minerals to Indian domestic market.
About KABIL NALCO
• It is a joint venture company of National Aluminium • It is a Navaratna Central Public Sector Enterprise.
Company Ltd. (NALCO), Hindustan Copper Ltd. (HCL) • It is under Ministry of Mines.
and Mineral Exploration Company Ltd. (MECL).
• It is one of the largest integrated Bauxite-Alumina-
• It will work towards acquisition, exploration and Aluminium- Power Complex in the country.
processing of strategic minerals abroad for commercial
Strategic Minerals
use and for supplying to meet the domestic
• It is also known as Critical Minerals is a broad-based
requirements.
category that constitutes various minerals and elements.
• It will ensure mineral security of the nation, and will help
• A critical material may or may not be strategic, while
in realizing the overall objective of import substitution.
a strategic mineral will always be critical.
• It has identified twelve strategic minerals with the initial
• Vital Strategic Minerals include Antimony, Molybdenum,
focus will be on lithium and cobalt.
Borates, Nickel,Chromium, Cobalt, Silver, Copper,
• NALCO has the highest equity participation of 40% while
Titanium, Diamond, Tungsten, Germanium, Vanadium,
HCL and MECL have 30% each.
Lithium, Zinc and Rare earths
• It will boost India’s efforts towards Electric Vehicles.
SAIL SIGNS MOU WITH GeM

Context: Recently, Steel Authority of India becomes the first CPSE Steel Authority of India (SAIL)
to enter into MoU with Government e-Marketplace (GeM).
• It is largest steel-making company in India.
Details
• The Government of India owns about 75% of SAIL’s
• The MoU aims towards maximizing the procurement of equity and retains voting control of the Company and
Goods and Services on GeM portal. by virtue of its ‘Maharatna’ status, enjoys significant
• It will promote inclusiveness, broadening of base, operational and financial autonomy.
transparency and efficiency in public procurement and Government e-Marketplace
achieve cashless and paperless transaction.
• It is a National Public Procurement Portal providing
• It provides for setting up of GeM Organizational end to end online marketplace for procurement of
Transformation Team - Project Management Unit (GOTT- common use Goods & Services required by various
PMU). Government Departments / Organisations / PSUs.
• GOTT-PMU will assist the buyer agency to transform their • It aims to enhance transparency, efficiency and speed
business activities, processes, competencies and models to in public procurement.
fully leverage the opportunities of an open market based
• It provides the tools of e-bidding, reverse e-auction
procurement.
and demand aggregation to facilitate the
• SAIL has become the first PSU to establish GOTT PMU for government users, achieve the best value for their
transforming their procurement landscape and increasing money.
their footprint on GeM.
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SUGAR INDUSTRY IN INDIA

Context: Recently, the Indian Sugar Mill Association (ISMA) has informed that the country’s 2019-20 sugar output could fall
21.6% to 26 million tonnes, the lowest level in three years.
Sugarcane Pricing Mechanism
Sugar Industry in India
• The pricing of sugarcane is governed by Sugarcane
• India is the largest consumer as well as producer of sugar (Control) Order, 1966 issued under the Essential
in the world. Commodities Act (ECA), 1955.
• It plays an important role in generating the sizable • There are two types of pricing of sugarcane in India:
employment in the rural sector directly and through its ¾ Fair and Remunerative Price (FRP): It is the cane
ancillary units. price announced by the Central Government on
• There are two distinct agro-climatic regions of sugarcane the basis of the recommendations of the
cultivation in India: Commission for Agricultural Costs and Prices
o Tropical Sugarcane region includes the states of (CACP) after consulting the State Governments
Maharashtra, Andhra Pradesh, Tamil Nadu, Karnataka, and associations of sugar industry.
Gujarat, Madhya Pradesh, Goa, Pondicherry and ¾ State Advised Prices (SAP): Citing differences in
Kerala. cost of production, productivity levels and also
o Sub-tropical sugarcane region includes U.P, Bihar, as a result of pressure from farmers’ groups,
Haryana and Punjab. some states declare state specific sugarcane
prices called State Advised Prices (SAP), usually
• In respect of white crystal sugar, India is ranked first for
higher than the SMP/FRP.
7 times in the last 10 years.
• Sugar Industry is regarded second after textile industry in India as per the agro-processing industry in the country.
STEEL IMPORT MONITORING SYSTEM

Context: Recently, Ministry of Commerce and Industry has launched the Steel Import Monitoring System (SIMS).
About SIMS
• It will provide advance information about steel import to Steel Sector in India
government and other stakeholders, including producers and
• As of 2018, India is the second largest producer
consumers, to have effective policy interventions.
of steel after China.
• The system has been developed in consultation with Ministry
• India is slated to surpass USA to become the world’s
of Steelon the pattern of US Steel Import Monitoring and second largest steel consumer in 2019.
Analysis (SIMA) system.
• India allows 100 per cent Foreign Direct
• The importers of specified steel products will register in Investment (FDI) in the steel sector under the
advance on the web portal of SIMS providing necessary automatic route.
information. Importer Exporter Code
• The registration will be online and automatic and no human • It is a 10-digit code number given to an exporter
intervention is required. or importer by the regional office of the Director
• The importer can apply for registration not earlier than 60th General of Foreign Trade (DGFT), Department
day and not later than 15th day before the expected date of of Commerce.
arrival of import consignment.
• The automatic Registration Number granted shall remain valid for a period of 75 days.
• The information about the steel imports provided by the importers on the SIMS will be monitored by the Ministry of
Steel.
• Any business importing steel products covered under the licensing program is required to create a license for concerned
imports. Importers, importing agents, or brokers, may apply for this license.
• License is required for each customs entry and multiple products can included in one license.
• Foreign filers may apply for a license as long as they have a valid Indian IEC (Importer Exporter Code) number.
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STEEL SCRAP RECYCLING POLICY

Context: Recently, Ministry of Steel launched the Steel Scrap Recycling Policy to promote circular economy in the steel sector.
Details of the Policy
• It provides a framework to facilitate and promote establishment of metal scrapping centres in India for scientific
processing and recycling of ferrous scrap.
• It does not envisage setting up of scrap centres in the country by the government.
• Its objective is to promote a formal and scientific collection, dismantling and processing activities for end of life
products.
• Its aim is to create a mechanism for treating waste streams and residues produced from dismantling and shredding
facilities in compliance to Hazardous & Other Wastes (Management & Transboundary Movement) Rules, 2016.
• It will promote 6Rs principles of Reduce, Reuse, Recycle, Recover, Redesign and Remanufacture through scientific
handling, processing and disposal of all types of recyclable scraps.
KHADI GETS A SEPARATE HS CODE

Context: Recently, Ministry of Commerce and Industry has allocated a separate harmonised system (HS) code for Khadi.
Details
Khadi and Village Industries Commission (KVIC)
• HS Stands for Harmonized System and it is a six digit
• It is a statutory body established under Khadi and
identification code.
Village Industries Commission Act of 1956.
• It was developed by the World Customs Organization
(WCO). • Its objective is to provide employment to the rural
people and to produce saleable goods for the
• Custom officers use HS Code to clear every commodity
economic upliftment of the poor people.
that enters or crosses any international border.
• The move will help increase in export of khadi in the • It helps villages by providing financial assistance to
international market. individuals and institutions for the development and
implementation of Khadi and Village Industries.
• The export of Khadi will be exclusively categorized from
the general league of textile products. • It is under the administrative control of Ministry
• The HS code will help in keeping a constant eye not only of Micro, Small and Medium Enterprises (MSME).
on export figures, but it will also help in planning export strategies.
L2PRO INDIA
Context: Recently, Department of Promotion of Industry and Internal Trade (DPIIT) launched a website and mobile application
on Intellectual Property Rights (IPR).
CIPAM
Details
• It is a professional body under the aegis of Department
• The website and applicationhas been developed by Cell for
for Promotion ofIndustry and Internal Trade (DPIIT).
IPR Promotion and Management (CIPAM)-DPIIT in
• It ensures focused action on issues related to IPRs.
collaboration with Qualcomm and National Law
University (NLU). • It assists in simplifying and streamlining of IP
processes, apart from undertaking steps for
• The modules of this e-learning platform (L2Pro India IP e-
furthering IPR awareness, commercialization and
learning Platform and the L2Pro India Mobile App) will aid
enforcement.
and enable youth, innovators, entrepreneurs in
understanding IPRs for their ownership and protection. • It has taken up the initiative to promote Geographical
Indications to supplement the incomes of our farmers,
• Learners will access the L2Pro IP e-learning platform through
weavers, artisans and craftsmen.
their desktop, laptop, mobile browser and mobile
application and will be provided e-certificates by CIPAM-DPIIT and NLU Delhi and Qualcomm on successful completion of
the e-learning modules.
• Both the website and app will be very useful to the start-up community which holds great promise for India and its
economy.
• It has been successfully implemented in Germany, United Kingdom, Italy and France.
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TOPIC
7 INFRASTRUCTURE
NATIONAL INFRASTRUCTURE PIPELINE (NIP)

Context: The Government has released a report of the task force on National Infrastructure Pipeline for 2019-2025.
Details:
• Earlier the government had highlighted that Rs. 100 lakh crore would be invested on infrastructure over the next 5 years.
• The emphasis would be on ease of living: safe drinking water, access to clean and affordable energy, healthcare for all,
modern railway stations, airports, bus terminals and world-class educational institutes.
• Task Force chaired by Secretary, Department of Economic Affairs (DEA) was constituted to draw up the National
Infrastructure Pipeline (NIP) for each of the years from financial years 2019-20 to 2024-25.
About National Infrastructure Pipeline (NIP)
• NIP will enable a forward outlook on infrastructure projects which will create jobs, improve ease of living, and provide
equitable access to infrastructure for all, thereby making growth more inclusive.
• The projects have been classified under two broad categories namely economic infrastructure and social infrastructure
for both ease of doing business and ease of living.
• During the fiscals 2020 to 2025, sectors such as Energy (24%), Roads (19%), Urban (16%), and Railways (13%) amount
to around 70% of the projected capital expenditure in infrastructure in India.
• It has outlined plans to invest more than ¹ 102 lakh crore on infrastructure projects by 2024-25, with the Centre, States
and the private sector to share the capital expenditure in a 39:39:22 formula.
NEW STRATEGIC DISINVESTMENT POLICY

Context: Cabinet has recently approved a new process of strategic disinvestment with a view to expedite the privatization of
select PSUs.
Strategic Disinvestment
About the New Process:
• Strategic disinvestment would imply the sale of
• The Cabinet approved the new policy under which the substantial portion of the Government share holding
Department of Investment and Public Asset Management, of a central public sector enterprise (CPSE) of upto
DIPAM(under the Ministry of Finance) has been made the
50%, or such higher percentage as the competent
nodal department for the strategic stake sale.
authority may determine, along with transfer of
• Earlier, PSUs for strategicsale wereidentified by NITI management control.
Aayog only but now DIPAM and NITI Aayog will jointly
• Disinvestment and Privatisation are often loosely
identify PSUs for strategic disinvestment.
used interchangeably. There is, however, a vital
• It will help in streamlining and speeding up the process, difference between the two.
reducing the role of administrative ministries which often
• Disinvestment may or may not result in Privatisation.
used to place hurdles in the path of major stake sales.
• Strategic disinvestment is transferring the ownership and control of a public sector entity to some other entity mostly
to a private sector entity. Unlike the simple disinvestment, strategic sale implies some sort of privatisation.
Different approaches of Disinvestments:
• Minority Disinvestment: A minority disinvestment is one such that, at the end of it, the government retains a majority
stake in the company, typically greater than 51%, thus ensuring management control.
• Majority Disinvestment: A majority disinvestment is one in which the government, post disinvestment, retains a minority
stake in the company i.e. it sells off a majority stake.
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• Complete Privatisation: Complete privatisation is a form of majority disinvestment wherein 100% control of the company
is passed on to a buyer.
RENEWABLE ENERGY AT A GLANCE

• As a part of Nationally Determined Contributions under the Paris Accord on Climate Change, India has made a pledge that
by 2030, 40% of our installed power generation capacity shall be from non-fossil fuel sources and also by 2030, reduce
emission intensity of GDP by 33-35 % from 2005 level.
• To fulfil the commitment, 175 GW of renewable energy capacity will be installed by the year 2022.
• India has 5th global position for overall installed renewable energy capacity, 4thposition for wind power and 5thposition for
solar power.
Renewable Energy Targets and Status
Sectors Targets (in GW) Installed Capacity (in GW)

Solar Power 100 32.53
Wind Power 60 37.28
Bio Energy 10 9.94
Small Hydro 5 4.65
Total 175 84.40
POWER PURCHASE AGREEMENTS

Context: Recently, various states have been working to renegotiate the Power Purchase Agreements (PPAs) with therenewable
energy companies.
About Power Purchase Agreements:
• A Power Purchase Agreement (PPA) is a legal contract between an electricity generator (provider) and a power purchaser
(host). The power purchaser purchases energy, and sometimes also capacity and/or ancillary services, from the electricity
generator.
• The seller under the PPA is typically an independent power producer, or ‘IPP’. Energy sales by regulated utilities are
typically highly regulated, so that no PPA is required or appropriate.
¾ During the past decade privately owned IPPs selling electricity to the power industry has become common place.
• The PPA is often regarded as the central document in the development of independent electricity generating assets
(power plants), and is a key to obtaining project financing for the project.
• The power purchase agreements vary a lot in different states and for different kinds of energy.
• Solar and wind energy developers sign a contract with a power purchaser — mostly distribution companies (discoms) —
for a prescribed period (typically 25 years) at a particular tariff rate per unit, which is based on the capital cost, land
costs as well as other operations and maintenance (O&M) costs for the supply of all the generated power.
‘MUST RUN STATUS’

Context: The Ministry of New and Renewable Energy (MNRE) has issued a letter to the chief secretaries of all states and union
territories, asking them to ensure that ‘must run’ status has been accorded to both wind and power projects in the states
in line with the Indian Electricity Grid Code 2010 and the Electricity Act 2003.
Details:
• According to existing instructions, solar and wind power can be curtailed only for reasons of grid safety and security
and that too after communicating reasons of curtailment in writing to generators.
¾ ‘Curtailment’ refers to an action under which off-take (flow) of the generated power is restricted or denied,
resulting in the decrease of a plant’s output.
¾ ‘Must-run’ means that utilities, state load dispatch centres (SLDCs) and distribution companies (discoms) have
to prioritise the evacuation of the generated power from renewable energy.
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• Indian Electricity Grid Code 2010 asks SLDCs to prioritise scheduling of renewable power over other generators/sources
to incentivise green energy projects, unless there are technical constraints (eg, congestion or unavailability).
• SLDCs were allowed to back down/cut down RE power only after exhausting all options, including running thermal power
plants at a technical minimum plant load factor of 55 per cent, and it should be done equitably.
PACE SETTER FUND

Context:Ministry of New and Renewable Energy recently awarded grants to the awardees of the second round of PACEsetter
fund programme.
Details
• The PACEsetter fund was constituted by India and the USA in 2015 as a joint fund.
• The mission of the PACEsetter Fund is to accelerate the commercialization of innovative off-grid clean energy access
solutions by providing early-stage grant funding that would allow businesses to develop and test innovative products,
business models and systems.
• The Fund’s main purpose is to improve the viability of off-grid renewable energy businesses that sell small scale (less
than 1 megawatt) clean energy systems to individuals and communities without access to grid-connected power or with
limited/intermittent access.
WORLD ENERGY CONGRESS

Context: Abu Dhabi hosted the 24thWorld Energy Congress. The theme of the congress ‘Energy for Prosperity’.
About the World Energy Congress:
• It is the World Energy Council’s global flagship event.
• It offers a unique platform for global energy leaders to explore new energy futures, critical innovation areas, and new
strategies.
• Held in every three yearsand positioned as the flagship event of the World Energy Council, the Congress is the longest-
running and most influential energy event in the world.
About World Energy Council:
• Formed in 1923, the Council is the UN-accredited global energy body, representing the entire energy spectrum,
• Composed of more than 3,000 member organisations located in over 90 countries and drawn from governments, private
and state corporations, academia, NGOs and energy-related stakeholders.
SPECIAL ECONOMIC ZONES (AMENDMENT) ACT, 2019

Context: Recently, Indian Parliament has passed the Special Economic Zone (Amendment) Bill, 2019.
Key Features of the Act Special Economic Zones (SEZs)
• It amends the Special Economic Zones Act, • India was one of the first in Asia to recognize the effectiveness of
2005 and replaces Special Economic Zones the Export Processing Zone (EPZ) model in promoting exports,
Ordinance, 2019. with Asia’s first EPZ set up in Kandla in 1965.
• SEZ Act, 2005 provides for the establishment, • SEZ is an area in a country that is subject to unique economic
development and management of Special regulations that differ from other regions of the same country.
Economic Zones for the promotion of exports. • It is a specifically delineated duty-free enclave and shall be
• Under the Act of 2005, the definition of a deemed to be foreign territory for the purposes of trade
person includes an individual, a Hindu undivided operations and duties and tariffs.
family, a company, a co-operative society, a • SEZs are zones intended to facilitate rapid economic growth by
firm, or an association of persons. leveraging tax incentives to attract foreign dollars and
¾ The Amendment Act adds two more technological advancement.
categories to this definition by including • The SEZ Rules provide for different minimum land requirement
a trust, or any other entity which may for different class of SEZs.
be notified by the central government. • Every SEZ is divided into a processing area where alone the SEZ
¾ A trust or any entity notified by the central units would come up and the non-processing area where the
government will be eligible to be supporting infrastructure is to be created.
considered for grant of permission to set up a unit in these zones, which enjoy certain tax and other incentives.
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• The Amendment opens up the possibility for all types of trusts to operate from the SEZs - public charitable trusts, private
trusts run by big and small corporate houses, business trusts like real estate investment trusts (REITs) and infrastructure
investment trusts (InvITs), private companies with their own PF trusts and port trusts run by the government.
• The amendment would also facilitate the use of the SEZ land lying vacant.
Administrative Set-up of SEZs
• The functioning of the SEZs is governed by a three tier administrative set up.
¾ Board of Approval is the apex body and is headed by the Secretary, Department of Commerce.
¾ Approval Committee at the Zone level deals with approval of units in the SEZs and other related issues.
¾ Each Zone is headed by a Development Commissioner, who is ex-officio chairperson of the Approval Committee.
• Once an SEZ has been approved by the Board of Approval and Central Government has notified the area of the SEZ, units
are allowed to be set up in the SEZ.
• All the proposals for setting up of units in the SEZ are approved at the Zone level by the Approval Committee consisting
of Development Commissioner, Customs Authorities and representatives of State Government.
• All post approval clearances including grant of importer-exporter code number, change in the name of the company or
implementing agency, broad banding diversification, etc. are given at the Zone level by the Development Commissioner.
• The performances of the SEZ units are periodically monitored by the Approval Committee and units are liable for penal
action under the provision of Foreign Trade (Development and Regulation) Act, in case of violation of the conditions of the
approval.
WESTERN CORRIDORS
Context:The Dedicated Freight Corridor Corporation of India Ltd. (DFCCIL) has opened the more than 300-km section between
Rewari, Haryana to Madar, Rajasthan, for commercial trial runs. This is the first section to be opened on the under-construction
1,500-km western freight corridor.
About Western Dedicated Freight Corridor (DFC) About Dedicated Freight Corridor Project (DFC)
• It is a broad-gauge corridor. • The DFC project was first proposed in April 2005
• The 1,504-km western freight corridor begins at Dadri in Uttar to address the needs of the rapidly developing
Pradesh and stretches till the country’s largest container port Indian economy.
— Jawaharlal Nehru Port Trust, near Mumbai. • The project involves the construction of six freight
• In October 2006, a dedicated body, the Dedicated Freight corridors traversing the entire country.
Corridor Corporation of India (DFCCIL) has been established ¾ Western DFC (Haryana – Maharashtra)
to carry out the project. ¾ Eastern DFC (Punjab – West Bengal)
• The project will be funded by a soft loan of $4bn provided by ¾ North-South (Delhi – Tamil Nadu)
Japan International Cooperation Agency under special terms ¾ East–West (West Bengal – Maharashtra)
for economic partnership (STEP). On the other hand, the Eastern ¾ East–South (West Bengal – Andhra Pradesh)
DFC is constructed through funds received from the World Bank ¾ South-South (Tamil Nadu – Goa)
and the Ministry of Railways.
Important places in this route
• It passes through Vadodara, Ahmedabad, Palanpur, Phulera and Rewari.
• States: Passing through UP., Haryana, Rajasthan, Gujarat and Maharashtra.
Dedicated Freight Corridor Corporation of India (DFCCIL)
• The DFCCIL is a corporation run by the Ministry of Railways (India) to undertake planning & development, mobilisation
of financial resources and construction, maintenance and operation of the Dedicated Freight Corridors.
• DFCC has been registered as a company under the Companies Act 1956 on 30 October 2006.
LONGEST ELECTRIFIED TUNNEL

Context:The South-Central Railway (SCR) had commissioned the longest electrified tunnel of 6.6 km between Cherlopalli and
Rapuru stations in the state of Andhra Pradesh.
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Details
• The tunnel is part of the recently completed Obulavaripalli-Venkatachalam new railway line.
• The new line also facilitates direct and viable connectivity between South Coast and West Coast.
• It also opens up the viable rail connectivity between Krishnapatnam Port and its hinterland for freight train services.
SILVER LINE PROJECT

Context:Ministry of Railways has granted in-principle approval for the ‘Silver Line’ project, a proposal of the Kerala government.
About the Project:
• It involves laying of semi high-speed trains between the two corners of the state of Kerala.
• The corridor will be built away from the existing line between Thiruvananthapuram and Thrissur.
• It aims to connect major districts and towns with semi high-speed trains that will run on their own tracks.
• Kerala Rail Development Corporation (K-Rail), a joint venture between the Ministry of Railways and the Kerala government
to execute projects on a cost-sharing basis, will be the nodal agency.
INFRASTRUCTURE INVESTMENT TRUST (InvITs)

Context: Cabinet authorises NHAI to set up Infrastructure Investment Trust and monetize National Highway projects.
Details
• National Highways Authority of India (NHAI) will set up the Infrastructure Investment Trust(s) (InvIT) as per InvIT
Guidelines issued by SEBI.
• Under InvIT, highwayprojects will be bundled to form a special purpose vehicle (SPV) to be offered to investors.
• The SPV would then be traded on the stock exchanges, and returns will be linked to the InvIT’s performance in the capital
market.
• This will enable the NHAI to monetize completed national highways that have a toll collection track record of at least one
year and the NHAI reserves the right to levy toll on the identified highway.
About Infrastructure Investment Trusts (InvITs)
• Infrastructure Investment Trusts (InvITs) are mutual fund like institutions that enable investments into the infrastructure
sector by pooling small sums of money from multitude of individual investors for directly investing in infrastructure so as to
return a portion of the income (after deducting expenditures) to unit holders of InvITs, who pooled in the money.
• InvITscan invest in infrastructure projects, either directly or through a special purpose vehicle (SPV).
• InvITs are regulated by the securities market regulator in India- Securities and Exchange Board of India (SEBI).
• An InvIT consists of four elements-
¾ Trustee, who inspects the performance of an InvIT is certified by Sebi and he cannot be an associate of the sponsor
or manager.
¾ ‘Sponsors’ are people who promote and refer to any organisation or a corporate entity with a capital of Rs 100
crore, which establishes the InvIT.
¾ Investment manager is an entity or limited liability partnership (LLP) or organisation that supervises assets and
investments of the InvIT and guarantees activities of the InvIT.
¾ Project manager refers to the person who acts as the project manager and whose duty is to attain the execution of
the project and in case of PPP projects.
• The trust is required to invest a minimum of 80 per cent in revenue generating infra assets. Only the rest can be used
for under-construction assets.
• InvITs are suitable for high net-worth individuals, institutional and non-institutional investors like pension funds,
foreign portfolio investors, mutual funds, banks and insurance firms.
• InvITs are listed on exchanges just like stocks — through IPOs.
• If an investor exits an InvIT before three years, a short-term capital gains tax of 15 per cent is applicable. There are no
long-term capital gains taxes on them.
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FASTAG
Context:Lanes on national highway toll plazas across India will accept toll only through FASTag — fitted in a vehicle that pays
toll automatically when the vehicle crosses the boom barrier of the toll plaza.
About FASTAG:
• FASTag is an electronic toll collection system in India, operated by the National Highway Authority of India (NHAI).
• FASTag is a device that employs Radio Frequency Identification (RFID) technology for making toll payments directly
while the vehicle is in motion. It is affixed on the windscreen, so the vehicle can drive through plazas without stopping.
• The RFID technology is similar to that used in transport access-control systems, like Metro smart card.
• A FASTag is valid for five years and can be recharged as and when required.
• A copy of the vehicle registration certificate and a photo of the vehicle are required to get a FASTag from NHAI.
• Under a new “One Nation, One FASTag” scheme, the NHAI is trying to get states on board so that one tag can be used
seamlessly across highways, irrespective of whether it is the state or the Centre that owns/manages it.
NHAI
• NHAI is an autonomous agency of the Union Government, responsible for management of a network of over 70,000 km
of national highways in India.
• It was established through National Highways Authority of India Act, 1988.
• It is a nodal agency of the Union Ministry of Road Transport and Highways.
• It is responsible for the development, management, operation and maintenance of National Highways.
MULTI-MODAL TERMINAL
Context: Prime Minister has inaugurated India’s second riverine Multi Modal terminal built at Sahibganj in Jharkhand.This
is being constructed on National Waterway-1 (River Ganga) under Jal Marg Vikas Project (JMVP) aided by World Bank.
• The First Multi-Modal Terminal has been constructed at Varanasi over River Ganga.
Jal Marg Vikas Project
• It aims at developing the stretch of the river between Varanasi and Haldia for navigation of large vessels weighing up to
1,500 tonnes to 2,000 tonnes.
• It will promote inland waterways as a cheap and an environment-friendly means of transportation, especially for cargo
movement.
• Inland Waterways Authority of India (IWAI) is the implementing agency.
• The project entails construction of three multi-modal terminals (Varanasi, Sahibganj and Haldia), two inter-modal
terminals, five roll-on-roll-off (Ro-Ro) terminal pairs, night navigation facilities, modern methods of channel marking
etc.
• Jal Marg Vikas Project is expected to be completed by March, 2023.
National Waterways of India
As per the National Waterways Act, 2016, 111 waterways have been declared as NWs.
• National Waterway 1: NW1 starts from Allahabad to Haldia with a distance of 1620 km. The NW1 run through the
Ganges, Bhagirathi and Hooghly river system with having fixed terminals at Haldia, Farrakka and Patna and floating
terminals at most of the riverside cities like Kolkata, Bhagalpur, Varanasi and Allahabad. It will be the longest National
Waterway in India.
• National Waterway 2: NW2 stretchs on Brahmaputra River from Sadiya to Dhubri in Assam state. The NW2 is one of
the major freight transportation waterway of north east India and the third longest Waterway with a total length of 891
km.
• National Waterway 3: NW3 or the West Coast Canal is located in Kerala state and run from Kollam to Kottapuram. The
205 km long West Coast Canal is India’s first waterway with all-time navigation facility. The NW3 is consist of West
Coast Canal, Champakara Canal and Udyogmandal Canal and runs through Kottappuram, Cherthala,
Thrikkunnapuzha, Kollam and Alappuzha.
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• National Waterway 4: NW4 connect Kakinada to Pondicherry through canals, tank and River Godavari along with
Krishna River. The NW4 the second longest waterway of India with a total lenght of 1095 km in Andhra Pradesh and
Tamil Nadu.
• National Waterway 5: NW5 connects Orissa to West Bengal using the stretch on Brahmani River, East Coast Canal,
Matai River and Mahanadi River The 623 km long canal system will handle the traffic of cargo such as coal, fertilizer,
cement and iron.
• National Waterway 6: NW6 is the proposed waterway in Assam state and will connect Lakhipur to Bhanga at River
Barak. The 121 km long waterway will boost trade between Silchar (Assam) to Mizoram.
KALESHWARAM LIFT IRRIGATION PROJECT

Context: Recently, the Chief Minister of Telangana launched the Kaleshwaram Lift Irrigation Project (KLIP).
About KLIP
• It is the world’s largest multi-stage, multi-purpose lift irrigation project.
• It is built across Godavari River and can lift the water to a height of half-a-kilometre.
• It is designed to irrigate 45 lakh acres for two crops in a year, meet the drinking water requirement of 70 percent of the
state and also cater to the needs of the industry.
• The government is planning to lift two thousand million cubic (TMC) feet of Godavari water per day from Medigadda
barrage.
• The Kaleshwaram project will support Mission Kakatiya and Mission Bhagiratha schemes designed to provide drinking
water to many villages and improve the capacities of tanks.
• It was originally called Pranahita-Chevella project of erstwhile Andhra Pradesh. It was redesigned, extended and
rechristened Kaleshwaram project in Telangana in 2014.
Mission Kakatiya
• Mission Kakatiya is aimed at improving the ground water table, reducing the power consumption of farm sector, getting
higher yields, spurring the growth of livestock and rejuvenating rural economy on a whole.
• As part of the Mission, activities like desiltation, repairing damaged sluices and weirs, restoring dilapidated tank bunds,
stone revetments and plugging seepages are carried out.
Mission Bhagiratha
• Its objective is to supply safe drinking water to all the households in the State.
• The main aim of this mission is to ensure safe and sustainable piped drinking water supply from surface water sources
and to provide each household with a tap connection.
PACT FOR COOPERATION BETWEEN INDIAN AND THAI PORTS

Context:India moved closer to accessing a strategic gateway to South East Asia as it finalised a pact for cooperation
between the Ranong port in Thailand and Indian ports in Kolkata, Chennai and Visakhapatnam.
Details:
• According to officials, the Port of Authority of Thailand (PAT) is pressing ahead with the development of Ranong Port as
a logistics gateway between Thailand and India as both countries have agreed to promote a new maritime route.
• With this, sea travel time between India and Thailand will be reduced from 10 to 15 days to seven.
• Currently, cargo ships from Krishnapatnam Port (Andhra Pradesh) travel to Laem Chabang Port in Chon Buri(Thailand) and
Bangkok Port in Bangkok (Thailand) via Malaysia.
PATENT PROSECUTION HIGHWAY PROGRAMME

Context: The Union Cabinet chaired by the Prime Minister has approved the proposal for adoption of Patent Prosecution
Highway (PPH) programme by the Indian Patent Office (IPO) under the Controller General of Patents, Designs & Trade
Marks, India (CGPDTM) with patent offices of various other interest countries or regions.
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About Patent Prosecution Highway programme (PPH): Indian Patent Office

• It will initially commence between Japan Patent Office (JPO) • The Indian Patent Office is administered by the
and Indian Patent Office on pilot basis for a period of three Office of the Controller General of Patents,
years only. Designs & Trade Marks (CGPDTM).
• Under this Pilot programme, IPO will fast track patent • This is a subordinate office of the Government of
applications in certain specified technical fields such as India and administers the Indian law of Patents,
electrical, electronics, computer science, information Designs and Trade Marks.
technology, physics, civil, mechanical, textiles, automobiles and • The CGPDTM reports to the Department for
metallurgy if these applications have already been granted Promotion of Industry and Internal Trade (DPIIT)
patents in Japan. The JPO will reciprocate in the same manner under the Ministry of Commerce and Industry.
if it receives patent applications for innovations that already
have a patent in India.
• Unlike India, JPO has not restricted applications to specified fields as it will accept applications in all fields of technology
under PPH.
Benefits of PPH programme:
• Reduction in time to dispose patent applications.
• Reduction in pendency of patent applications.
• Improvement in quality of search and examination of patent applications.
• An opportunity for Indian inventors including MSMEs and Start ups of India to get accelerated examination of their patent
applications in Japan.
NEW ENERGY PERFORMANCE STANDARDS FOR AIR CONDITIONERS

Context: Bureau of Energy Efficiency (BEE) has notified new energy performance standards for air conditioners.
More about news:
About BEE Star Rating:
• As per the new standards, the Indian Seasonal Energy Efficiency
• Star ratings are provided to all the major kinds
Ratio (ISEER) will range from (3.30 - 5.00) for split and (2.70 – of appliances in the form of labels.
3.50) for window air conditioners.
• Some of the mandatary appliances are: Room
¾ ISEER (Indian Seasonal Energy efficiency ratio) is the Air Conditioners, Frost Free Refrigerators,
energy performance index used for Room Air Conditioners Tubular Florescent Lamps, Distribution
(RACs) and its assessment is based on the bin hours defined Transformers, Direct Cool Refrigerators, Color
in ISO 16358. TV, Electric Geysers, LED Lamps, etc.
¾ This is applicable from 1st January, 2021 onwards. • These star ratings are given out of 5 and they
• Additionally, the 24-degree Celsius default setting has been provide a basic sense of how energy efficient
made mandatory for all room air conditioners covered under the each product is, just in a single glance.
ambit of BEE star-labelling program. • The manufacturers are officially required to put
¾ st
This will be applicable from 1 January 2020 onwards. these labels as per the Standards and
• All brands and types of star labelled room air conditioners, Labelling Program introduced in 2006.
namely, Multi-Stage Capacity Air Conditioners, Unitary Air Conditioners and Split Air Conditioners which are rated from
one star to five star and manufactured, commercially purchased or sold in India are covered under this.
About BEE:
• BEE is a statutory body under the Ministry of Power, Government of India.
• It develops policies and strategies with the primary objective of reducing the energy intensity of the Indian economy.
• BEE coordinates with designated consumers, designated agencies, and other organization to identify and utilize the
existing resources and infrastructure, in performing the functions assigned to it under the Energy Conservation Act
2001.
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PURVODAYA : ACCELERATED DEVELOPMENT OF EASTERN INDIA

Context: Ministry of Steel in partnership with Confederation of Indian Industry and Joint Plant Committee is organizing the
launch of ‘Purvodaya’: Accelerated Development of Eastern Region through an Integrated Steel hub.
About Integrated Steel Hub:
• The proposed Integrated Steel Hub would encompass five states namely Odisha, Jharkhand, Chhattisgarh, West Bengal
and Northern Andhra Pradesh.
• It would focus on 3 key elements mainly capacity addition through easing the setup of greenfield steel plants,
development of steel clusters near integrated steel plants as well as demand centres and transformation of logistics
and utility infrastructure which would change the socio-economic landscape in the East.
• These elements would be supported through additional enablers such as ensured availability of raw materials, presence of
supporting industries such as capital goods and well-established avenues for skill development.
Additional Information
• Odisha, Jharkhand, Chhattisgarh, West Bengal and Northern Andhra Pradesh collectively hold 80% of the country’s
iron ore, 100% of coking coal and a significant portion of chromite, bauxite and dolomite reserves.
• The eastern belt has the potential to add more than 75% of the country’s incremental steel capacity envisioned by the
National Steel Policy.
OPEN ACREAGE LICENSING POLICY

Context: India Govt has announced the opening of the fifth oil and gas block bid round, offering 11 areas for bidding.
About Open Acreage Licensing Policy:
• The Hydrocarbon Exploration and Licensing Policy (HELP) replaced the New Exploration Licensing Policy (NELP) and
were approved in March 2016.
• The Open Acreage Licensing Programme (OALP) along with the National Data Repository (NDR) was launched in June
2017.
• Under this licensing policy, the potential investors choose the exact areas they are interested in, convey their interest
to the government, which then places just those blocks up for bidding.
• Companies are allowed to choose the areas in which they want to explore oil and gas, under OALP. After choosing the
area, companies put in an expression of interest which is then put on auction by the government.
• The process offers attractive and liberal terms like reduced royalty rates, no oil cess, marketing, and pricing freedom,
round the year bidding, freedom to investors for carving out blocks of their interest.
• A single license to cover both conventional and unconventional hydrocarbon resources, exploration permission during the
entire contract period, and an easy, transparent and swift bidding and awarding process are also under this policy.
MOTIHARI-AMELKHUGUNJ OIL PIPELINE

Context:Recently, Prime Ministers of India and Nepal have jointly inaugurated a cross-border petroleum products pipeline.
Details
• Pipeline carries petroleum products from Motihari in India to Amlekhgunj in Nepal.
• This is South Asia’s first cross-border petroleum products pipeline.
• It is 69-km long having a capacity of 2 million metric ton per annum, will provide cleaner petroleum products at affordable
cost to the people of Nepal.
• The project would help to deepen India-Nepal Bilateral Relationship.
NORTH-EAST GAS GRID PROJECT

Context: The Cabinet Committee on Economic Affairs has approved a Capital Grant as the Viability Gap Funding to Indradhanush
Gas Grid Ltd for setting up the North East Natural Gas Pipeline Grid.
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30
About the Project

• The project is being implemented by IGGL, a Joint Important Facts
Venture company of five CPSEs (GAIL, IOCL, ONGC, OIL
• Gas accounts for around 6.2% of India’s primary energy
and NRL).
mix against the global average of 24%. The government
¾ IGGL is mandated to develop and operate Natural plans to increase this to 15% by 2030.
gas pipeline grid in North-East region.
• India’s gas demand is expected to be driven by fertilizer,
• The Viability Gap Funding (VGF) will be capped at 60% power, city gas distribution and steel sectors.
of the estimated cost.
Pradhan Mantri Urja Ganga Project
• It will cover eight states of the North-Eastern region
• GAIL is executing Jagdishpur-Haldia-Bokaro-Dhamra
i.e., Arunachal Pradesh, Assam, Manipur, Meghalaya,
Pipeline (JHBDPL) of length 2,655 km and Barauni-
Mizoram, Nagaland, Sikkim and Tripura.
Guwahati Pipeline of length 729 km under Pradhan
• The Ministry of Petroleum & Natural Gas will identify
Mantri Urja Ganga Project to connect Eastern India.
milestones for major activities for this project and link
the same for releases of capital grant of the project. • Total length of pipeline under Pradhan Mantri Urja Ganga
Project is approx. 3,384 km, out of which 766 km of
• For effective monitoring of the project implementation,
pipelineis in Odisha state and the balance 2,618 km is
a Committee comprising of officials from Ministry of
in the states of Uttar Pradesh, Bihar, Jharkhand, West
Petroleum & Natural Gas, Department of Expenditure,
Bengal & Assam.
Ministry of Development of North East Region,
Ministry of Environment, Forest & Climate Change, and Department of Fertilizers will be formed.
• IGGL will enhance availability of natural gas in North-East and ensure uninterrupted supply of natural gas to industries,
domestic consumers and for transport purposes to establish a clean fuel led economy.
• The North East Gas Grid will get the natural gas supply from GAIL’s Barauni - Guwahati pipeline, which is a part of
Jagdishpur – Haldia & Bokaro – Dhamra Natural Gas Pipeline Project, popularly known as ‘Pradhan Mantri Urja
Ganga’ project.
SPECIAL WINDOW FUND

Context:The Union Cabinet has approved the creation of an Alternative Investment Fund (AIF) of ¹ 25,000 crore to revive
stalled affordable and middle-income housing projects across the country.
Key Points:
• Fund Size
¾ The fund size will initially be ¹ 25,000crore with the government providing ¹ 10,000 crore and the State Bank of India
(SBI) and the Life Insurance Corporation (LIC) providing the balance.
¾ The fund is not capped at ¹ 25,000 crore and will likely grow as a lot of sovereign funds have shown interest.
• Fund Management
¾ The fund will be set up as Category-II Alternative Investment Fund registered with the Securities and Exchange
Board of India (SEBI).
¾ It will be managed by SBICAP Ventures Limited (SVL). It is a wholly owned subsidiary of SBI Capital Markets Ltd.
• Eligible Projects
¾ All affordable and middle-income housing projects that are
9 Stalled for lack of adequate funds
9 Net worth positive
9 Registered with the Real Estate Regulatory Authority (RERA) and
9 That have not been deemed liquidation-worthy.
¾ Stuck projects classified as Non Performing Assets and those undergoing resolution under the National Company
Law Tribunal will also be eligible for funding — a change from the announcement made in September 2019.
• Funding Procedure
¾ The fund will provide money in escrow accounts that can be used only for completion of the identified projects.
¾ The receivables from the project will be used to repay the fund.
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1 GROWTH AND DEVELOPMENT

GDP ESTIMATION IN INDIA

MIDDLE INCOME TRAP

MERGER OF NSSO AND CSO

MADHYA PRADESH TO OPEN TIME BANK

THE CODE ON WAGES, 2019

Key Provisions of the Code

OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS (OSH) CODE

@Essay4CivilServices @TestSeries4UPSC @All_Ncert_Books @Pdfs4AllExams

@UPSCMains_GS1 @UPSCMainsGS2 @UPSCMainsGS3 @UPSCMainsGS4

@Notes4CivilServices @Videos4AllExams @HandWrittenNote @CSAT4_UPSC

@UPSCFutureIAS @CivilServiceBooks @UPSCPrelimsMains @gk_tricks_upsc

CONTACT FOR PROMOTIONS VIRAT

SOCIAL SECURITY CODE

CODE ON INDUSTRIAL RELATIONS

TASK FORCE REPORT ON DIRECT TAX CODE

MULTILATERAL CONVENTION TO IMPLEMENT TAX TREATY

About the Convention Base Erosion and Profit Shifting (BEPS)

REFORMS IN CORPORATE TAXATION

DIVIDEND DISTRIBUTION TAX (DDT)

SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME

AMENDMENTS TO PREVENTION OF MONEY LAUNDERING ACT

Enforcement Directorate (ED)

DOCUMENT IDENTIFICATION NUMBER

15th FINANCE COMMISSION REPORT FOR FY 2020-21

OTHER TAXES IN NEWS

CENTRE AIMS TO NIP PONZI SCAMS

Central Database: It provides for the central government to Ponzi scheme

THE CHIT FUNDS (AMENDMENT) ACT, 2019

BOND YIELD AND INVERSION

CORPORATE BOND MARKET

BHARAT BOND ETF

Details: About Exchange Traded Fund (ETF)

SEBI PANEL ON DIRECT OVERSEAS LISTING

PARTICIPATORY NOTES (P-NOTES)

ALTERNATIVE INVESTMENT FUND (AIF)

SOCIAL STOCK EXCHANGE

NORMS FOR CREDIT RATING AGENCIES BY SEBI

BILATERAL INVESTMENT TREATY CLAIMS AGAINST INDIA DISMISSED

NON-TARIFF MEASURES (NTM)

ELECTRONIC CERTIFICATE OF ORIGIN

New Platform Existing Process

NIRVIK: A NEW EXPORT CREDIT INSURANCE SCHEME

WTO DISPUTE SETTLEMENT MECHANISM

DEVELOPING COUNTRY STATUS IN WTO

Advantages of a Developing Country Status

GEOGRAPHICAL INDICATION (GI) TAG

ICEDASH AND ATITHI

Central Board of Indirect Taxes and Customs

KISAN CREDIT CARD

BHARTIYA POSHAN KRISHI KOSH

NABVENTURES: FUND FOR RURAL AGRICULTURE START-UP

About Greenshoe Option

NATIONAL MARINE FISHERIES (REGULATION AND MANAGEMENT) ACT, 2019

Key Highlights of the Act

20th LIVESTOCK CENSUS

EDIBLE OIL DEFICIENCY

BEEKEEPING DEVELOPMENT COMMITTEE

MERI FASAL MERA BYORA

INDICES TO MEASURE INDUSTRIAL PRODUCTION

MICRO, SMALL AND MEDIUM ENTERPRISES

NATIONAL INVESTMENT AND MANUFACTURING ZONES (NIMZS)