Normal provisioning of NPA is: 15% (secured loans) and 25% (unsecured loans)

Loan/ moratorium loan and its effects:

a. Retain capacity to loan
b. Not result in asset classification
downgrade
c. Will not qualify as default for Credit
Info Co.s (CIC)
d. Not adversely impact credit history
e. Interest cost not lost to banks

Disequilibrium Model: to explain present

crisis of invst led economic crisis:
InvstProdu.vityEX emplt
AD Invstrepeat
Impact of Operation Twist: Consumer loan demand inc; invest inc.; savings dec spending
inc; govt needs to pay lower interests

March 2020 Statement on Devptal and Regulatory Policies:

a) Expanding Liquidty; b) Reinforcing monetary transmission; c) Easing financial stress by
relaxing repyt pressures; d) improving functioning of markets

Widening monetary policy rate corridor

LTRO, TLTRO, e-Kuber;

Recovery patterns: Z-shaped, V-shaped; U-shaped; W-shaped; L-shaped;

Meaning of Vocal for Local:

a. Products to be made in India
b. Promotion of local brands
c. Indian Manufacturing
d. Supply chain management
e. Products to be made competitive vis-vis global brands (local for global)
How?
a. Branding and marketing
b. Ban low grade ingredients
c. Rationalise GST
8 sectors under ANB

1. Coal Sector:
a. Introduction of commercial mining coal sector
i. Overall aim: self-reliance in meeting energy needs and save 30k cr
annually on IM bill on thermal costs; To being competition, transparency
and private sector participation in the coal sector
ii. Tools to achieve these 2 goals:
- A revenue-sharing mechanism instead of regime of fixed ₹/ton
- Entry Norms Liberalised: non-captive also
- There will be exploration-cum-production regime for partially
explored blocks against earlier provision of auction of fully explored
coal blocks.
- Production earlier than scheduled will be incentivized through rebate
in revenue-sharing
b. Diversified opportunities in coal sector
i. Coal gasification/ Liquefaction will be incentivized through rebate in
revenue share lower envt impact and help transition to gas-based econ
ii. Infrastructure development of 50k cr will be done for evacuation of
enhanced Coal India Ltd.’s target of 1B ton coal production by 2023-4 plus
coal prodn from private blocks. It includes infra like mechanized transfer
of coal (conveyor belts) from mines to railway sidings  it will reduce
environmental impact
c. Liberalised regime in coal sector
i. Coal Bed Methane (CBM) extraction rts auctioned from CIL’s coal mines
ii. EoDB measures, such as Mining Plan simplification, will be taken. This will
allow for approx. 40% increase in annual production.
iii. The requirement for prior experience for prospective bidders for coal
blocks has also been removed from the list eligibility criteria for bidders.
iv. Coal price for comm. Mining-- to be det on basis of a National Coal Index
2. Mineral Sector
a. Strl reforms for growth, emplt and bring state-of-the-art tech esp. in exploration
b. Intro of a composite exploration-cum-mining-cum-production regime
c. 500 mining blocks wld be offered through an open+ transparent auction process
d. Jt. Auction of Bauxite and Coal mineral blocks to enhance Al industry’s
competitiveness will be intro to help Al industry reduce electricity costs.
e. Remove the distinction between captive and non-captive mines to allow transfer
of mining leases and sale of surplus unused minerals, leading to better efficiency
in mining and production.
f. Ministry of Mines is in process of developing Mineral Index
3. Defence Sector
a. Enhancing Self-Reliance in Defence Production
i. Make in India for Self-Reliance in Defence Production will be promoted by
notifying a list of weapons/ platforms for ban on IM with year-wise
timelines, indigenization of IMd spares, and separate budget provisioning
for domestic capital procurement. This will reduce huge Defence IM bill.
 ii. Improve autonomy, accountability ad efficiency in ordnance Supplies by
Corporatisation of Ordnance Factory Board
b. Policy Reforms in Defence Production
i. FDI limit in defence manufacturing will be raised from 49% to 74%
ii. There will be time-bound def procurement process and faster dec-making
iii. Realistic setting of Qlt.ve requirements of weapons/ platforms and
overhauling trial and testing procedures
4. Civil Aviation Sector
a. Efficient Airspace Management for Civil Aviation: Restrictions on utilisation of the
Indian Air Space will be eased so that civilian flying becomes more efficient.
Benefits wld be:
i. A total benefit of ₹1000 cr/year
ii. Lead to optimal utilisation of airspace
iii. Reduction in fuel use, time
iv. Positive environmental impact as less fuel use
b. More World-class airport through PPP
i. 6 more airports for O+M on PPP basis
ii. Addnal investment by private players in 12 airports in 1st+ 2nd rounds
c. India to become a global hub for Aircraft, Repair and Overhaul (MRO)
i. Tax regime for MRO ecosystem has been rationalized
ii. Aircraft component repairs and airframe maintenance to increase from
800 cr to 2000 cr in 3 years
iii. Major engine manufacturers to set up engine repair facilities in India
iv. Convergence between Defence sector and the civil MROs will be estd. to
create econ of scale maintenance cost of airlines to come down.
5. Power sector
a. Tariff Policy Reform:
i. Consumer Rights
- DISCOM inefficiencies not to burden consumers
- Stds of service and assd. penalties for DISCOMs
- DISCOMs to ensure adequate power; load-shedding to be penalized
ii. Promote industry
- Progressive reduction in cross-subsidies
- Generation+ transmission proj developers selected competitively
iii. Sustainability of Sector
- DBT for subsidy
- Smart prepaid meters
b. Privatisation of Distribution
i. Power depts./ utilities in UTs will be privatized
ii. This will lead to better service to consumers and improvement in op.l+
fin.l efficiency in distribution
iii. This will also provide a model for emulation by other utilities
6. Social Infrastructure: boosting private sector investment through revamped viability
gap funding scheme-- ₹8100 crore
7. Space sector: Boosting private participation in space activities:
a. Level playing field to private companies in sats, launched+ space-based services
b. Predictable policy+ regu envt to pvt players will be provided
 c. Pvt sector will be allowed to use ISRO facilities and other relevant assets to
improve their capacities
d. Future projects for planetary exploration, outer space travel, etc., shall also be
open for private sector
e. There will be liberal geo-spatial data policy for providing remote-sensing data to
tech-entrepreneurs.
8. Atomic Energy Related Reforms
a. Research reactor in PPP mode for production of medical isotopes shall be estd to
promote affordable treatment for cancer and other diseases
b. Facilities in PPP mode to use irradiation technology for food preservation—to
compliment agri reforms and assist farmers shall also be established.
c. India’s robust start-up ecosystem will be linked to nuclear sector ad for this,
Technology Devpt-cum-incubation Centres will be set up for fostering synergy
between research facilities and tech-entrepreneurs.

MSME Sector—Infuse liquidity

a. ₹3L cr collateral-free loans
b. Liquidity relief measures- ₹30,000 crore were also announced for NBFCs, HFCs, etc.
c. ₹90k cr for power distri co.s
d. Speed up real estate projects to help stressed developers and consumers both under
RERA and other schemes
e. ₹50k cr equity infusion for MSMEs through Fund of Funds
f. Change in definition of MSMEs (EX not counted in limits of turnovers)
g. MSME payts to be released within 45 days’ timeframe
h. CHAMPIONS portal

Migrant Workers and Street Vendors

a. ONORC
b. Special credit facilities of 5k cr for 50L street vendors
c. ₹2L cr to farmers through KCC
d. 2.5cr farmers, including fishermen and animal husbandry farmers, wld be able to get
instnal credit at concessional rate
e. GoI allowed states to fund the food and shelter facilities to migrant workers from
Disaster response fund-- ₹11k cr

MONETISATION OF DEFICIT
1. Explain market borrowing, indirect monetisation (OMO), Direct monetisation
2. History
 3. Mechanism: GoI asks RBI to issue bonds RBI issues
bond RBI buys bonds RBI prints money and lends
to GoI
4. Inflationary impact
5. Finance Act 2017; COVID-19
6. Args for Monetisation (C Rangarajan)
a. GDP down
b. Govt tax revenue down
c. Exp is up
d. Inflation is low
7. Args against: (D Subbarao)
a. Interest rate is low
b. Banks have savings
c. Inflation
d. (self) Floodgates for continuation, even after crisis

WHY FOREX
a. Support and maintain confidence in monetary policy
and ER managt; confidence in market; during national emergencies like COVID
b. Intervene in support of national currency
c. Limit external vulnerabilities; cover IM bill
1. APMC: 1960s/70s birth of organised market
a. It was enacted by most states
b. All primary wholesale assembling markets brought under the Act
c. Features/ Drawbacks of APMC:
i. APMC Act of the state divides the state into various notified Market
committee areas fragmentation of market hinder infra development
ii. Multiple license requirements for trading in a state and levy of market fee
at multiple points along with high incidence of fee
iii. Insufficient number of markets
iv. Infra deficit in markets
v. High market fees
2. MSP: meaning; who fixes, formula, etc;
Issues:
a. 6-7% farmers get benefit of MSP
b. Not a legal right
c. Corruption/ bribery--- explain
d. Less procurement centres traders make profits as intermediaries
e. Lack of infra to sell
f. Distorts markets
g. Rice-wheat system crop diversification dented
h. Rice-wheat system envt degradation, deterioration of soil nutrient profile and
depleting water table
i. States-disparity
Swaminathan report-- mention
3. Contract farming: an agt between a buyer and farmers, which establishes conditions
for the production and marketing of a farm product.
a. Adv:
i. World class mechanized agro technology
ii. An assured upfront price
iii. Assured market outlet for his produce
iv. Bulk supplies
v. Crop monitoring on a regular basis
vi. Technical advice, free of cost at his doorstep
vii. Inputs too, if agreed
For industry:
viii. Uninterrupted and regular flow of raw material
ix. Protection from fluctuation in market pricing
x. Long term planning made possible
xi. Dedicated supplier base
xii. Generates goodwill for the organisation
4. Model APMC Act 2003:
a. Provides for direct sale of farm produce to contract farming sponsors
b. Provides for setting up “Special Markets” for “specified agricultural
commodities”—mostly perishables
c. Permits private persons, farmers and consumers to establish new markets for
agri produce in any area
d. A single fee on the sale of notified agri commodities in any market area
 e. Replaces licensing with registrations of market functionaries which wld allow
them to operate in one or more different market areas
f. Provides for the establishment of consumers’ and farmers’ markets direct sale
to consumers
g. Create market infra from revenue of APMC
Inadequacies:
a. It failed to create a national—or even state—level common market
b. Buyers have to pay APMC charges even when the produce is sold directly
outside APMC area
c. Bars AMPCs+ Commn agents from deducting mkt fee/ commn from the seller
d. Model APMC Act provides for setting up of markets by private secto, but
won’t create competition for APMC as pvt mkt will have to collect APMC fee
5. E-NAM 2016
a. E-NAM is a pan-India electronic trading portal which networks the existing APMC
mandis to create a unified national market for agri commodities
b. Single window service for all APMC related info+ services
c. E-NAM is being impl. by SFAC (Small farmers Agribusiness consortium)
d. Why:
i. Consumers pay high price; farmers get low price
ii. Fragmented market poor flow of goods between markets
iii. Real time price discovery
iv. Access to nation-wide mkt
v. Better quality product at reasonable prices
e. Implications of NAM
i. Buyers can buy products across India
ii. Results in increased number of traders and greater competition
iii. Ensure open price discovery and better returns to farmers
iv. Increase competition amongst farmers from diff states
Total 1000 APMCs in 21 states/ UTs with a user base of 1.66 cr farmers, 1.31
lakh traders, 73k commn agents, 1012 FPOs
6. Model Agriculture Produce and Livestock Act APLM 2017:
a. Aim:
i. Single License/ Agri market for both produce awa livestock
ii. More markets (at a dist of every 80 km)
iii. Single unified fee for all mkts in state
iv. Cap fees at 1% (F+V) anf 2% (grains); commn fee at 2% (non-perishables)
and 4% (perishables)
v. Single license for trading within and outside state
vi. Promote online or e-NAM platforms
vii. Allow warehouses and cold storages to act as regulated markets
 note: Governance+ administrative
reforms repealed not in notes

1. ₹1L cr AIF for farm gate infra for farmers: Central Sector Scheme
a. Why the scheme:
i. Agri+ allied activities are primary income source for 58% popn
ii. 85% farms are small-holding farming (<2ha)manage 45% agri lands
iii. Low agri-income
iv. Ltd. infra connecting farmers to market
v. Stagnant investment in agri with <2% over last 5 years
vi. Lack of investor confidence low plowback ratio (14%)
b. Objectives of AIF:
i. Mobilise a medium- to long- term debt financing facility for invst in viable
projects relating to post-harvest managt infra and community farming
assets through incentives and financial support
ii. It is aimed for Farm Gate+ aggregation points+ post-harvest managt infra
c. Duration of the Scheme: 2020-1 to 2029-30 (10 years)
d. Eligible Projects:
i. Post-Harvest Managt Projects like:
supply chain services incl. e-NAM, warehouses, silos, pack-houses,
assaying units, sorting and grading units, cold chains, logistics facilities,
primary processing centres, ripening chambers
 ii. Viable projects for building community farming assets incl.:
Organic inputs production, bio-stimulant production units, infra for smart
and precision agri, project identified for supply chain infra, etc.
e. Sector-specific focus: 24% of total grants-in-aid—for SC/ST entrepreneurs; and
ensure adequate coverage to women and other weaker segments
f. Budgetary support for 3: Interest subvention, credit guarantee fee, admin cost

2. Micro-Food Enterprises
a. Why needed
i. Vocal for Local with global outreach
ii. Unorgd. ME units wld undergo technical
upgradation to attain FSSAI stds.
b. Focus: organic, herbal, nutritional, health-
based India has comparative adc
c. Support to: existing MEs, FPO, SHGs,
cooperatives
d. Cluster-based approach
e. Objectives:
i. Increase in access to finance by ME
ii. Increase in revenue f the entrepreneurs
iii. Enhanced compliance with food quality and safety standards
iv. Transition from the unorganized sector to the formal sector
v. Spl. focus on women entrepreneurs and aspirational districts
vi. Encourage waste-to-wealth activities
Dalwai Committee: we waste 30% of produce
vii. Focus on minor forest produce in tribal districts
f. Features: CSS; 5 years; credit-linked subsidy, focus on perishables
3. PM Matsya Sampada Yojana—umbrella scheme
a. Why needed: Importance of fisheries (food, nutria, emplt, income, SL angle); 2 cr
fishers and fish farmers at primary level and 4 cr along the value chain
GVA share in agri-GVA= 7.28% (potential in doubling farmers’ income)
b. CSS component has 3 components:
i. Enhancement of production and productivity
ii. Infra and Posy-harvest management
iii. Fisheries Management and Regu framework
4. AHIDF: Will help pvt sector get capital to meet upfront invst reqd for these projects
and also enhance overall returns for investors; such invsts in processing and value
addn infra by eligible beneficiaries wld also promote EX of these processes and VA
commodities.
5. National Animal Disease Control Programme: for Foot and Mouth Disease (FMD) and
Brucellosis. Expected coverage= 53 crore
6. From TOP to TOTAL
Op Green: announced in Budget ’18-19; run by
MoFPI; Nodal Ag.= NAFED; expl.

TOTAL: all fruits and veg:

a. 50% subsidy on transport from surplus to
deficient markets
b. 50% subsidy on storage, incl cold storage
Impact of Total: better prices to farmers; reduced wastages (Dalwai); Affordable

Food Processing Industry FPI

1. Definition: FP comprises 2 processes: Manufactured processes (physical changes,
edible and commercial value) and VA processes (Value embedded)

2. Scope of FPI in India:

a. Sunrise industry
b. Strong domestic demand
c. Supply side advantages
d. Rising EX opportunities
e. Untapped market with strong
growth potential
f. Potential global outsourcing hub
g. Supply chain infra+ contract farming
3. Mega-Food Parks 2008
a. Defn: basically, a hub comprising Collection Processing Centres and Primary
Processing centres as spokes.
b. Now a sub-scheme under PM-Kisan
c. Idea: bring together farmers, processors and retailers and link agri production to
the mkt
d. Diagram
e. Reasons for poor performance:
i. Availability of 50 acres land
ii. Change in land use from agri to industries
iii. Getting statutory approval from state governments
iv. Banks charge high interest rates for the loans
v. Marketability of products made by small players
vi. Land mafia
4. Cold Chain, VA and Preservation Infra Scheme 2008:
a. Aim: Provide integrated cold chain and preservation infra facilities, without any
break, from farm-gate to consumer
b. Set up by Cos, corporations, cooperatives, SHGs, FPOs, NGOs, GoI, GoS, PSUs, etc
 c. Covers creation of infra facility along entire supply chain viz. pre-cooling,
weighing, sorting, grading, waxing, facilities at farm level, multi-product/ multi
temperature cold storage, mobile cooling units, etc.
5. SAMPADA:
a. Allocation of 6k cr expected to leverage 31.4k cr invst, benefit 20 L farmers
and generate 5.3L jobs
b. Umbrella scheme:
i. Ongoing schemes like MFP, etc.
ii. New Schemes like New Agro-Clustering schemes, creating bwd/ fwd
linkages, etc.
iii. Private sector-drive scheme
c. Objective: supplement agri, modernize processing, decrease agri-waste
6. TOP 2018-19 to TOTAL—done earlier
7. Scheme for Formalisation of MFEs—done earlier
8. Supply Chain Management
Defn: process of planning, implementing and controlling the operations of the supply
chains as efficiently as possible. It is imp for raw material, processed food, F+V.
a. Key challenges in supply chain management in FPI:
i. Poor infra levels in food supply chain
ii. High consumer demand for freish or live-cut produce
iii. Large share of unorganized players in supply chain
iv. Operating commercial viability challenges
v. Regional imbalances
vi. Limited infra supply chain wastage; reduce qly and nutria level of food
(e.g. wastage in F+V= 6-18% in post-harvest portions of value chain)
b. Solutions:
i. Need of both government and private players
ii. FDI
iii. Policy support
c. Role of supermarkets in Supply chain management:
i. There are 3 routes available to farmer:
- Route 1: Farmer APMC Mandi retail market
- Route 2: Farmer supermarket (contract farming) retail market
- Route 3: Farmers MFS/ FPI Supermarkets Retail market
ii. Benefit to farmer: no middlemen, better prices, ready market, input/ tech
iii. Benefit to consumer: quality product, better prices, assured supply
1. KM Chandrasekhar Committee 2012 New FPI regulations 2014
a. FPI merged 3 existing modes of investment (FII, QFI, Sub-Accounts)
b. FPIs are allowed to invest in equity, DRs, MFs, ETFs, and debt and these are held
by investors in another country.
c. FPI regime regulated by SEBI
d. 10% cap: for FPI/ FDI distinction
e. 24% Limit (Now Changed- see Budget 2019-20 point): All FPIs taken together
cannot acquire >24% of paid-up capital of an Indian company unless BoD passing
spl. resolution
f. FPI registration is carried out by DDPs (Designated Depository Participants) on
permanent basis. DDPs are decided by SEBI.
g. Categories of FPI (Changed—done later)
h. NRIs were not included under FPI (Now changed)

2. HR Khan Wking Group on FPI (2018-19) Constituted by SEBI to simplify FPI regu, etc.
a. FPI in Two categories (earlier 3)
b. Merge NRI
c. Allow NRI non-controlling stake
d. Allow NRI to invest as FPI <25% stake
e. Ease KYC for FPI and off market transfers of stake
f. Offshore funds floated by Indian MFs now permitted to invest in India after
registering as fpi
g. Amendt in regu for CRAs to ensure that any listed/ unlisted entity, before getting
rated, gives consent to obtain info about them
h. Central Banks that are not member of BIS also eligible for FPI registration under
categ 1 itself.

3. Union budget 2019-20: FPI limit in indiv companies raised from 24% to respective
sectoral limits (decide by Mo Commerce and Industry)
4. VRR:
5. RBI Reforms
a. Need for reforms:
Before 2020 Budget, FPI anticipated the following:
i. No rate cut by RBI rel. higher than expected rates Bonds P wld fall
ii. GoI wld issue a lot of govt bonds to borrow huge amount inc. supply of
bonds Bond price wld fall
So, FPIs started to sell need for reforms
b. Short-term investment limit in G-secs, GoSs and corp. bonds from 20% to 30%
c. Doubled investment cap under VRR from 75k cr to 1.5L cr
RBI permitted more time to FPIs in adhering with condns under VRR
d. FAR Fully Accessible Route enabled by RBI in G-secs for NRIs; no limits on NRIs
6. FDI Reforms to prevent takeovers (CHN Factor): April 2020
7. FPI Reforms to prevent takeovers (CHN Factor): May 2020
4th ed. of EoDB rankings of the states by
DPIIT (Mo Commerce) + WB
a. Based on impl. of BRAP (Business
Reform Action Plan)
b. Why are business reforms
important for India?
i. WB: corruption, electricity,
tax rates, practices of
competitors in the informal
sector, and access to
finance, as the biggest

obstacles to firm performance in India

ii. The performance of manufacturing awa
key regu interfaces varies significantly across
Indian states
iii. To inc share of manufacturing in GDP to
25% by 2022 (Make in India) and create 100M
jobs
iv. State variance provides a useful baseline
for identifying for improvement for ind.l
development
c. How rankings done?
MoC BRAP (80 reforms, 187 reform points, 12 business regu areas) states
implement it states submit proof of impl. and give list of users survey on
users rank
User-based/ feedback-based ranking system
d. 12 business regulatory areas (useful as key words in answers):
1. Basics:
SEZ is a geographic area in which the business and trade laws are different from the
rest of the country (DTA)
Aim: BoT, Invst, Jobs
2. Evolution: CHN- explain Kandla EPZ SEZ Rules 2000 SEZ Act 2005
3. Assessment:
a. Taxation: uncertain, grey areas, custom duties in domestic sales, MAT+ DDT,
Sunset clause
b. Labour laws: Just like DTA
c. Investment: Mostly service SEZs low invst reqd.; very very low invst in manuf
d. Emplt: Urban only; no obligation to create emplt; not enough manuf emplt
e. Global competition: many units migrated to ASEAN, CHN, etc. as better policies
f. Un-utilised assets: 50% SEZ is vacant; many have exited abroad; many closing
due to COVID; Idle assets cld further worsen the banking crisis.
4. SEZ in India—success or failure
a. On the face of it, SEZ looks impressive.
i. 240 SEZs are operational with total investment of 5.37Trillion rupees
ii. 2M emplt created
b. But policy has been less than successful:
i. Agitations over land acquisition
ii. Controversies over adeq compensation to farmers
iii. Not improve devpt indicators near areas of operation
iv. Politics in site selection
5. Baba Kalyan committee (2018)
a. SEZ philosophy from EX-oriented to broad-based emplt+ growth approach (Emplt
and Economic Enclaves)
b. Extension of sunset clause beyond 2020; retain tax benefits earlier withdrawn
c. Develop integrated ind.l. and urban development
d. Formulation of separate rules and procedures for manuf and service SEZs
e. Infra status to SEZs to improve access to finance
f. Dispute resolution through arbitration+ commercial courts
g. Procedural relaxations for developers+ tenants to improve exit issues
h. Flexibility of long-term lease for developers and tenants
6. Suggestions for SEZ:
a. India wld have to find alt str of incentives for SEZs, not be linked to EX income
Incentives for units in SEZs can be based on other performance indicators like
emplt, invst in R+D, etc. (to make it compatible with WTO)
b. Focus: provide incentives for adopting green+ sustainable business practices—
imp to cater to key EX mkts like US, EU
c. Complementary facilities such as certification and lab testing shld be subsidised
d. Duties on goods from SEZ to DTA shld be at par with FTA partners’ tariffs
e. Infra status to all components in SEZ for better financing
f. E-governance, easy exit,
g. Permission for domestic units to op from non-processing area without availing
indirect tax exemptions.
h. Flexibility of utilisation of non-processing area (dual) for social infra creation
i. Model: GIFT SEZ;
PPP In Health

1. HEALTHCARE EXPENDITURE IN INDIA

a. India’s public health expenditure was 1.29% of GDP in 2019-20. This includes estab.
exp., salaries, budget support to various instns, hospitals, transfers to states.
b. Total health exp (Public spending+ GDP) = 3.6% (US= 16.9%, Brazil= 9.2%, CHN= 5%)
c. Total per capita govt spending on healthcare has doubled from 1008₹ per person
(2015) to 1944₹ (2020) but this is very slow (15% of the rise is due to pay hikes)
d. Per capita capital exp on health < 200₹ per capita
e. 12 states spend <1% of GSDP on healthcare
f. Healthcare infra:
i. Hospital beds= 8.5 per 10,000 people
ii. Physicians= 8 per 10k people
2. Need for Health PPP
a. Cost efficiency
b. Paltry budget allocation
c. Widening gaps in service
d. Low private investment
e. Social inclusion and sustainability
3. Models:
a. Traditional model
i. Pvt: develop+ improve facilities+ provide services
ii. Selection: lowest bid
iii. Like a pvt hospital on public- reqd to make certain beds, etc. available to
publicly-funded patients+ pay fees to GoI/ get subsidy
b. 2016 GoI created Model Concessional Agt for PPP in health sector:
i. Centre= district hospitals
ii. Focus= Non-communicable diseases
in tier- 2,3 cities
c. NITI-A+ WB 4 models:
i. Management of contract
ii. Purchasing of services
iii. BOT Model
iv. Co-Location Model
d. 15th FC: advocated greater role for PPP in
health
 to move from 1% to 2.5% by 2024 of GDP in public health exp
i. Public HCS: focus on primary health care at local level
ii. Pvt: provide specialty care
iii. Focus on poorer states
iv. GoS to hire doctors on contracts
v. Greater role of paramedics and frontline health workers
vi. Create Indian Medical Services
vii. Need working relnship between GoI and pvt partners: From “emergency
based” relnship to “holistic reln”
4. Issues with PPP in health
a. Delayed regulatory clearances
b. Undeveloped corporate bond market
c. NPA and bank crisis
d. Weak governance
e. Scam of huge capitation to get degree in connected medical private college
f. Inadequate data: not sharing data in name of business secrecy
g. Lack of proper working condns of contractual workers employed by private
players
5. Way Ahead: Under PPP, we focus only on tertiary care ove beyond into entire
health care support system

PPP in Defence

1. Intro
a. One of largest users and IMr of conventional defence equipment
b. 3rd highest defence budget
2. Issues:
a. Defence reqts 70% IMP+ 30% domestic (even in this, mostly IMd parts)
b. Most domestic prodn through: OFs or defence PSUs
c. Indig R+D outdates
d. Slow and ineffectic Transfer of tech
e. Lack of private sector participation due to overwhelming presence of PSUs and
OF
f. Problem of spare parts, service and maintenance of equipment by foreign firms
g. Low foreign investment
3. 2001 FDI Policy in defence sector
a. 100% opening up for Indian private sector participation
b. FDI 26%
Both subj to government approval
2016: Up to 49%
2020: Up to 74$ (s.t. National security)
4. Why private sector shies away?
a. Uncertainty of procurement
b. Sometimes, preference to foreign manufactures equipment
c. Not commercially lucrative for foreign companies to set up base in India.
d. Cap on firms with >49% FI as prime vendor
e. Ambihous FDI policy—“nationl security”
5. DPP
a. Defence offsets (Based on Kelkar Committee 2005):
obligation of supplier to do either:
i. Direct purchases from Indian defence industries
ii. FDI in Indian defence industries
iii. Invest in local industry
iv. Invest in R+D in Indian defence firms
Explain rationale:
b. Critical evaluation:
i. +ve: diminished shady arms dealers, transparency and probity in process
ii. -ve: rigidity of procedure
c. DPP-2020:
i. Objectives:
- Turning India into global manufacturing hub
- ANB, Make in India
ii. Salient features:
- For EoDB
 Time bound def procurement process and faster decision
making: set up a project management unit to support contract
management and to streamline acquisition process
 Revised offset guidelines:
Prefer manuf of complete defence products
No offset for G-to-G, Single vendor and IGA
 Rationalisation of procedure for trials and testing
- To develop India into global manufacturing hub:
 FDI in defence manufacturing
- To promote make in India and ANB:
 Reservation in categories for Indian vendors
 Ban on IM of certain items
 Indigenization of IMd spares by co-production facilities
through IGA
- Cost cutting features:
 Leasing has been introduced
- R+D
 Mission Raksha Gyan Shakti
 6. ANB Defence:
a. Ban on IM of certain items
b. Indigenization of IMd spares
c. Separate budget for domestic capital procurement
d. Corporatisation of ordnance factory board
e. FDI to 74%
f. Time-bound defence procurementprocess and faster decision making process
g. Realistic setting of qualitative requirements

Equalisation levy- done