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Oil Prices Below Zero

Why in News Recently, the prices of West Texas Intermediate (WTI), the best quality of crude oil in the world, fell to minus $40.32 a barrel in...

22 Apr 2020 Economy
World Economic Outlook Report: IMF

Why in News Recently, the International Monetary Fund (IMF) has released its World Economic Outlook (WEO) report. Key Points The Covid-19...

15 Apr 2020 Economy
Crowdfunding

Why in News Recently, a 11 year old girl from Hyderabad has collected ₹6.2 lakh using crowdfunding to buy food for the less fortunate during...

15 Apr 2020 Economy
Neighboring Rights Law

Why in News The French competition regulator has asked Google to negotiate with publishers and news agencies the remuneration due to them under the...

13 Apr 2020 Economy
Impact of Covid-19 on Global Economy

Why in News Recently, the United Nations Conference on Trade and Development (UNCTAD) has observed that the economic uncertainty sparked by the...

03 Apr 2020 Economy
The Economic Impact of Coronavirus

Why in News The Coronavirus outbreak is having a negative impact on the various sectors of the economy. Impact on Indian Economy GDP Growth...

04 Mar 2020 Economy
Perils of Neo-Liberal Era

This article is based on “Towards a new world order” which was published in The Hindu on 14/02/2020. It talks about issues related to...

24 Feb 2020 Economy
Different Irrigation Systems

Irrigation Irrigation is the artificial application of water to the soil or agricultural field. It is the replacement or supplementation of...

17 Feb 2020 Economy
Operation Twist

Why in News The Reserve Bank of India has announced that it will carry out US-style 'Operation Twist' to bring down interest rates. Key...

20 Dec 2019 Economy
Insolvency and Bankruptcy Code

For...

12 Dec 2019 Economy
Insolvency and Bankruptcy Code

Why in News The Union Cabinet has approved the proposal to make amendments in the Insolvency and Bankruptcy Code (IBC), 2016, through the Insolvency...

12 Dec 2019 Economy
Industrial Corridors

Why in News Government has approved the development of the five industrial corridor projects which will be implemented through National Industrial...

09 Dec 2019 Economy
Industrial Corridors

For...

09 Dec 2019 Economy
Telecom Sector: Issues and Challenges

Introduction India is currently the world’s second-largest telecommunications market with a subscriber base of 1.20 billion and has...

05 Dec 2019 Economy
Telecom Sector: Issues and Challenges

For...

05 Dec 2019 Economy
Iran’s New Oil Field

Why in News Iran has discovered a new oil field in its southwestern province of Khuzestan. The field covers 2,400 square kilometres and contains...

11 Nov 2019 Economy
Relaxation of Fumigation Norms on Import of Onions

Why in News The Ministry of Agriculture and Farmers Welfare has allowed the relaxation of fumigation norms for the import of onions for a limited...

07 Nov 2019 Economy
NBFC Liquidity Norms

The Reserve Bank of India (RBI) has introduced ‘liquidity management framework’ for Non-Banking Financial Companies (NBFCs). The RBI...

05 Nov 2019 Economy
Global Competitiveness Index 4.0: WEF

The World Economic Forum (WEF) has released the 2019 edition of the Global Competitiveness Report which features the Global Competitiveness Index 4.0...

10 Oct 2019 Economy
Injeti Srinivas Committee Report on CSR

The committee chaired by Injeti Srinivas, secretary, corporate affairs ministry, has submitted its recommendations on Corporate Social Responsibility...

14 Aug 2019 Economy

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		'article_id' => (int) 5101,
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		'title' => 'Oil Prices Below Zero',
		'description' => '<h3>Why in News</h3>
<p>Recently, the prices of<strong> West Texas Intermediate (WTI),</strong> the<strong> best quality of crude oil</strong> in the world, <strong>fell to minus $40.32 a barrel</strong> in interlay trade in <strong>New York (the USA).</strong></p>
<ul style="list-style-type: square;">
<li>It means that the seller of crude oil would be paying the buyer $40 for each barrel that is bought.</li>
<li>It is the <strong>lowest crude oil price ever recorded</strong> below the zero mark while the <strong>previous lowest</strong> was recorded <strong>immediately after World War II (WWII).</strong></li>
</ul>
<h3>Oil Pricing</h3>
<ul style="list-style-type: square;">
<li>Generally the <a href="/daily-updates/daily-news-analysis/talks-on-oil-cut-deal-at-g-20" target="_blank" rel="noopener"><strong>Organization of the Petroleum Exporting Countries</strong></a> <strong>(OPEC)</strong> used to <strong>work as a cartel and fix prices</strong> in a favourable band.<br />
<ul style="list-style-type: circle;">
<li>OPEC is <strong>led by Saudi Arabia,</strong> which is the <strong>largest exporter of crude oil in the world (single-handedly exporting 10% of the global demand).</strong></li>
<li>It could bring down prices by increasing oil production and raise prices by cutting production.</li>
</ul>
</li>
<li>The global oil pricing mainly <strong>depends upon the partnership between the global oil exporters</strong> instead of well-functioning competition.</li>
<li><strong>Cutting oil production</strong> or <strong>completely shutting down</strong> an oil well is a difficult decision, because <strong>restarting</strong> it is immensely<strong> costly and complicated.</strong><br />
<ul style="list-style-type: circle;">
<li>Moreover, if a country cuts production, it <strong>risks losing market share</strong> if other countries do not follow the suit.</li>
</ul>
</li>
<li>Recently, OPEC has been working with <strong>Russia, as</strong> <a href="/daily-updates/daily-news-analysis/opec" target="_blank" rel="noopener"><strong>OPEC+</strong></a> to fix the global prices and supply.</li>
</ul>
<h3>Reasons for Price Fall</h3>
<ul style="list-style-type: square;">
<li>Crude oil prices were <strong><a href="/daily-updates/daily-news-editorials/oil-prices-crash" target="_blank" rel="noopener">already falling</a> before the global <a href="/daily-updates/daily-news-analysis/21-days-lockdown" target="_blank" rel="noopener">lockdown</a></strong> due to the<strong> higher supply and lower demand.</strong><br />
<ul style="list-style-type: circle;">
<li>They were close to $60 a barrel at the start of 2020 and, by March-end, they were closer to $20 a barrel.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1587548054_image3.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1587548054_image3.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="600" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li>Problems arose when <strong>Saudi Arabia and Russia disagreed over the production cuts,</strong> required to keep prices stable.<br />
<ul style="list-style-type: circle;">
<li>Consequently, Saudi Arabia led oil-exporting countries started <strong>undercutting each other on price</strong> while <strong>producing the same quantities of oil.</strong></li>
<li>This strategy was<strong> unsustainable</strong> on its own and the global spread of <a href="/daily-updates/daily-news-analysis/coronavirus-disease-named-covid-19" target="_blank" rel="noopener"><strong>Covid-19</strong></a> <strong>made it even worse</strong> as it sharply <strong>reduced the economic activity</strong> and the <strong>oil-demand.</strong></li>
</ul>
</li>
<li>Oil-exporting countries decided to <strong>cut production by 10 million barrels a day</strong> (the <strong>highest production cuts)</strong> and yet the demand for oil was reducing even further.<br />
<ul style="list-style-type: circle;">
<li>This<strong> supply demand mismatch</strong> resulted in <strong>exhausted storage capacities.</strong></li>
</ul>
</li>
<li>It is important to highlight that the <strong>US</strong> became the <strong>largest producer of crude oil in 2018</strong> and the current US President has been pushing for <strong>higher oil prices</strong> instead of making efforts for lower prices like the previous US Presidents.</li>
<li>The oil prices started falling steeply because the <strong>May contracts for WTI were due to expire on 21<sup>st</sup> April, 2020</strong> which posed <strong>huge challenges</strong> for both the <strong>oil producers</strong> and the <strong>consumers (contractors/buyers).</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Producers:</strong> They started selling the oil at unbelievably low prices because<strong> shutting production would have been costlier to restart when compared to the marginal loss on May sales.</strong></li>
<li><strong>Consumers:</strong> They were facing the <strong>problem of storage.</strong> There is no space to store the oil even if they decided to buy and take the delivery.<br />
<ul style="list-style-type: disc;">
<li><strong>Accepting the oil delivery, paying for the transportation and storage would have been costlier than the hit on contract price.</strong></li>
</ul>
</li>
<li>In the short term, for both the holders of the delivery contract and the oil producers, it was less costly to pay $40 a barrel and get rid of the oil instead of storing it (consumers/buyers) or stopping production (producers). So this led to the <strong>negative WTI oil contract prices.</strong></li>
</ul>
</li>
</ul>
<h3>Future of Oil Prices</h3>
<ul style="list-style-type: square;">
<li>It was the <strong>WTI price for May in the US markets</strong> that went <strong>so low.</strong> Crude oil prices at <strong>other places fell but not too much.</strong></li>
<li>Prices for <strong>June and the coming months</strong> are pegged <strong>between $20 and $35 a barrel.</strong></li>
<li><strong>Investment budgets of exploration and production companies</strong> are <strong>expected to drop</strong> because of the <strong>low shale oil prices.</strong></li>
<li>Normally, this should force oil exporting countries to <strong>cut back production and negate the excess supply, restoring balance</strong> in the oil markets but the possibility of recent events from happening again cannot be ruled out.</li>
<li>Eventually, it would be the <strong>demand-supply mismatch</strong> (adjusted for how much can be stored away) that will<strong> decide the fate of oil prices.</strong></li>
</ul>
<h3>Impact on India</h3>
<ul style="list-style-type: square;">
<li>There is<strong> no direct impact</strong> on India because Indian crude oil basket does not comprise WTI and it <strong>only has Brent and oil from some of the Gulf countries.</strong><br />
<ul style="list-style-type: circle;">
<li>However, the <strong>weakness in WTI reflects on the falling prices</strong> of Indian basket as well because<strong> oil is traded globally</strong> and has<strong> indirect impacts.</strong></li>
</ul>
</li>
<li>The lower price can be <strong>beneficial for India in two ways:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>For Individuals:</strong> If the government passes on the <strong>lower prices to consumers,</strong> then<strong> individual consumption will be boosted</strong> whenever the<strong> economic recovery</strong> starts in India.</li>
<li><strong>For Governments:</strong> If both, central and the state, governments decide to<strong> levy higher taxes</strong> on oil, it can <strong>boost government revenues.</strong></li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1587548088_image2.jpg" target="_blank" rel="noopener"><strong><img class="content-img" src="http://www.drishtiias.com/images/uploads/1587548088_image2.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="600" caption="false" /></strong></a></p>
<div class="border-bg">
<p><strong>Difference between Brent and WTI</strong></p>
<ul style="list-style-type: square;">
<li><strong>Brent crude oil</strong> originates from oil fields in the <strong>North Sea</strong> between the Shetland Islands and Norway, while <strong>West Texas Intermediate</strong> (WTI) is sourced from <strong>US oil fields,</strong> primarily in Texas, Louisiana, and North Dakota.</li>
<li><strong>WTI with a lower sulphur content (0.24%)</strong> than <strong>Brent (0.37%),</strong> is considered <strong>"sweeter".</strong></li>
<li>Both oils are <strong>relatively light,</strong> but Brent has a slightly higher API gravity, making WTI the lighter of the two.<br />
<ul style="list-style-type: circle;">
<li><strong>American Petroleum Institute (API) gravity</strong> is an indicator of the density of crude oil or refined products.</li>
</ul>
</li>
<li><strong>Brent crude price</strong> is the international benchmark price used by the<strong> OPEC</strong> while <strong>WTI crude price</strong> is a benchmark for <strong>US oil prices.</strong><br />
<ul style="list-style-type: circle;">
<li>Since <strong>India imports primarily from OPEC</strong> countries, Brent is the benchmark for oil prices in India.</li>
</ul>
</li>
<li><strong>Cost of shipping for Brent</strong> crude is typically<strong> lower,</strong> since it is <strong>produced near the sea</strong> and it can be put on ships immediately. Shipping of WTI is priced higher since it is produced in landlocked areas like Cushing, Oklahoma where the storage facilities are limited.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1587548112_image4.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1587548112_image4.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="600" caption="false" /></a></p>
</div>
<p><a href="https://indianexpress.com/article/explained/why-crude-oil-prices-fell-below-zero-6373139/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 5034,
		'category_id' => (int) 21,
		'title' => 'World Economic Outlook Report: IMF',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <a href="/important-institutions/drishti-specials-important-institutions-international-institution/international-monetary-fund-imf" target="_blank" rel="noopener"><strong>International Monetary Fund (IMF)</strong></a> has released its <strong><a href="/daily-updates/daily-news-analysis/economic-growth-forecast" target="_blank" rel="noopener">World Economic Outlook (WEO) report</a>.</strong></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li>The <a href="/daily-updates/daily-news-analysis/covid-19-now-pandemic-who" target="_blank" rel="noopener"><strong>Covid-19 pandemic</strong></a> is having a severe effect on the world economy. As countries implement necessary <strong>quarantines and social distancing</strong> practices to contain Covid-19, the world has been put in a <strong>Great Lockdown.</strong><br />
<ul style="list-style-type: circle;">
<li>It is expected to cause a -<strong>3% change (i.e., a contraction) in global output in 2020,</strong> which is much <strong>worse than the 2008-09 financial crises.</strong></li>
<li><strong>Case of India:</strong> India&rsquo;s growth is <strong>expected to dip to 1.9% in 2020 and rebound to 7.4% in 2021.</strong><br />
<ul style="list-style-type: disc;">
<li>India&rsquo;s growth projection for 2020 is <strong>3.9% less than what was projected for the country</strong> in the January update to the WEO while its rebound in 2021 is 0.9 % higher than the January projection.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Growth Projections:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Emerging Asia:</strong><br />
<ul style="list-style-type: disc;">
<li>Emerging Asia is projected to be the only region that <strong>grows in 2020, at a rate of 1.0% -</strong> still more than 5 percentage points below the previous decade&rsquo;s average.</li>
<li>In China, where the coronavirus&rsquo;s impacts were first recorded this year, first quarter economic activity could have contracted by 8% year on year. <strong>China is projected to grow at 1.2% in 2020 and 9.2% in 2021.</strong></li>
<li>Apart from<strong> India&rsquo;s modest 1.9% in 2020, Indonesia is expected to grow at 0.5%,&nbsp;</strong>while <strong>others in the region experience contractions.</strong></li>
</ul>
</li>
<li><strong>Advanced economies:</strong><br />
<ul style="list-style-type: disc;">
<li>Advanced economies will have an <strong>output change of -6.1% (i.e., a contraction) in 2020</strong> followed by 4.5% in 2021.</li>
<li>The <strong>U.S. is projected to contract by 5.9%</strong> in 2020 and grow by 4.7% 2021.</li>
<li>The <strong>Euro area, will contract by 7.5%</strong> in 2020 and grow by 4.7% 2021.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Impact on Global GDP:</strong><br />
<ul style="list-style-type: circle;">
<li>The cumulative loss to global <a href="/daily-updates/daily-news-analysis/base-year-for-gdp-calculations" target="_blank" rel="noopener"><strong>Gross Domestic Product (GDP)</strong></a> over 2020 and 2021 from the pandemic crisis could be around <strong>9 trillion dollars,</strong> greater than the economies of Japan and Germany, combined.</li>
<li>Assuming that the pandemic fades in the second half of this year, with containment efforts gradually easing up, the <strong>world economy is projected to grow at 5.8% in 2020</strong> as economic activity normalizes, aided by policy.</li>
<li>If the pandemic does not recede in the second half of 2020, global GDP would<strong> fall an additional 3% in 2020.</strong></li>
</ul>
</li>
<li><strong>Measures to combat the impact:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Policymakers have to make targeted fiscal, monetary and financial sector interventions</strong> to support impacted households and businesses.</li>
<li>Fiscal measures <strong>should be two-fold:</strong><br />
<ul style="list-style-type: disc;">
<li>Cushioning the impact on the most-exposed households and businesses</li>
<li>Reducing firm closures , i.e., preserving economic relationships.</li>
</ul>
</li>
<li><strong>Monetary stimulus</strong> by large central banks and liquidity facilities to reduce systemic stress will help limit the shock, positioning the economy for a better recovery.</li>
<li><strong>Strong multilateral cooperation</strong> is essential to overcome the effects of the pandemic, including to help financially constrained countries facing twin health and funding shocks, and for channeling aid to countries with weak healthcare systems.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>International Monetary Fund</strong></p>
<ul style="list-style-type: square;">
<li>IMF is an organization working to <strong>foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty</strong> around the world.</li>
<li>Created in <strong>1945,</strong> the IMF is governed by and accountable to the <strong>189 countries</strong> that make up its near-global membership.India Joined on December 27, 1945.</li>
<li>The IMF's primary purpose is to ensure the stability of the international monetary system&mdash;the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. <br />
<ul style="list-style-type: circle;">
<li>The Fund's mandate was updated in 2012 to include<strong> all macroeconomic and financial sector issues</strong> that bear on global stability.</li>
</ul>
</li>
</ul>
<p><strong>World Economic Outlook</strong></p>
<ul style="list-style-type: square;">
<li>WEO is a survey by the IMF that is usually published <strong>twice a year in the months of April and October.</strong></li>
<li>It analyzes and predicts <strong>global economic developments</strong> during the near and medium term.</li>
<li>In response to the growing demand for more frequent forecast updates, the WEO Update is published in January and July between the two main WEO publications released usually in April and October.</li>
</ul>
</div>
<p><a href="https://www.thehindu.com/business/Economy/coronavirus-imf-projects-19-growth-for-india-in-2020/article31340201.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'article_id' => (int) 5022,
		'category_id' => (int) 21,
		'title' => 'Crowdfunding',
		'description' => '<h3>Why in News</h3>
<p>Recently, a 11&shy; year old girl from Hyderabad has collected ₹6.2 lakh using crowdfunding to buy food for the less fortunate during the <a href="/daily-updates/daily-news-analysis/21-days-lockdown" target="_blank" rel="noopener"><strong>lockdown</strong></a>.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Crowdfunding</strong> is a method of raising capital through the collective effort of a <strong>large number of individual investors.</strong></li>
<li>This approach taps into the collective efforts of a large pool of individuals, primarily <strong>online via social media</strong> and crowdfunding platforms and leverages their networks for greater reach and exposure.</li>
</ul>
<h3>Types of Crowdfunding</h3>
<ul style="list-style-type: square;">
<li>The 3 primary types of crowdfunding are <strong>donation-based, rewards-based, and equity-based.</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Donation-Based Crowdfunding:</strong> Donation-based crowdfunding is a way to source money for a project by asking a large number of contributors to individually donate a small amount to it. In return, the backers may receive token rewards that increase in prestige as the size of the donation increases. For the smallest sums, however, the funder may receive nothing at all.</li>
<li><strong>Rewards-Based Crowdfunding:</strong> Rewards-based crowdfunding involves individuals contributing to a business in exchange for a <strong>&ldquo;reward,&rdquo;</strong> typically a <strong>form of the product or service which company offers.</strong> Even though this method offers backers a reward, it&rsquo;s still generally considered a subset of donation-based crowdfunding since<strong> there is no financial or equity return.</strong></li>
<li><strong>Equity-Based Crowdfunding:</strong> Unlike the donation-based and rewards-based methods, equity-based crowdfunding allows contributors to become <strong>part-owners of the company by trading capital for equity shares.</strong> As equity owners, the contributors receive a financial return on their investment and ultimately receive a <strong>share of the profits in the form of a dividend or distribution.</strong></li>
</ul>
</li>
</ul>
<h3>Benefits of Crowdfunding</h3>
<ul style="list-style-type: square;">
<li>From tapping into a wider investor pool to enjoying more flexible fundraising options, there are a number of <strong>benefits to crowdfunding</strong> over traditional methods:<br />
<ul style="list-style-type: circle;">
<li><strong>Reach &ndash;</strong> By using a crowdfunding platform, one has access to thousands of accredited investors who can see, interact with, and share the fundraising campaign.</li>
<li><strong>Presentation &ndash;</strong> By creating a crowdfunding campaign, one goes through the invaluable process of looking at the business from the top level&mdash;its history, traction, offerings, addressable market, value proposition, with digestible packages.</li>
<li><strong>PR &amp; Marketing &ndash;</strong> From launch to close, one can share and promote the campaign through social media, email newsletters, and other online marketing tactics.</li>
<li><strong>Validation of Concept &ndash;</strong> Presenting the concept or business to the masses affords an excellent opportunity to <strong>validate and refine offering.</strong></li>
<li><strong>Efficiency &ndash;</strong> One of the best things about online crowdfunding is its ability to <strong>centralize and streamline fundraising efforts.</strong></li>
</ul>
</li>
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		'article_id' => (int) 4995,
		'category_id' => (int) 21,
		'title' => 'Neighboring Rights Law',
		'description' => '<h3>Why in News</h3>
<p>The <strong>French competition regulator has asked Google to negotiate with publishers and news agencies</strong> the remuneration due to them <strong>under the law relating to neighboring rights.</strong></p>
<ul style="list-style-type: square;">
<li>The French regulator has announced that Google must <strong>start paying media for sharing their content,</strong> as its practices had caused serious harm to the press sector.</li>
<li>The order is an<strong> interim decision.</strong> Though the order is only for the French press, it has global ramifications for Google and the press, as it can set a legal precedent and shape the discourse around the economics of news on the net.</li>
<li>The neighboring rights law that came into force on 24<sup>th</sup> July, 2019 in France aims to set the conditions for a balanced negotiation between publishers, news agencies and digital platforms, in order to redefine, in favour of press publishers and news agencies, the sharing of the value between these actors.</li>
</ul>
<h3>Neighboring Rights</h3>
<ul style="list-style-type: square;">
<li>According to the <a href="/daily-updates/daily-news-analysis/china-at-top-in-global-patent-race" target="_blank" rel="noopener"><strong>World Intellectual Property Organization (WIPO)</strong></a>, related rights, also referred to as neighboring rights, <strong>protect the legal interests of certain persons and legal entities that contribute to making works available to the public or that produce subject matter which, while not qualifying as works under the copyright systems of all countries,</strong> contains sufficient creativity or technical and organizational skill to justify recognition of a copyright-like property right.</li>
<li><strong>Traditionally,</strong> related rights have been granted to<strong> three categories of beneficiaries:</strong><br />
<ul style="list-style-type: circle;">
<li>Performers (actors/musicians);</li>
<li>Producers of sound recordings (also referred to as phonograms); and</li>
<li>Broadcasting organizations.</li>
</ul>
</li>
</ul>
<h3>Protection in India</h3>
<ul style="list-style-type: square;">
<li>The <strong>Copyright Act, 1957</strong> protects original literary, dramatic, musical and artistic works and cinematograph films and sound recordings from unauthorized uses. Unlike the case with patents, <strong>copyright protects the expressions and not the ideas.</strong> There is no copyright in an idea.<br />
<ul style="list-style-type: circle;">
<li>Copyright is a right given by the law to creators of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings. In fact, it is a bundle of rights including, inter alia, rights of reproduction, communication to the public, adaptation and translation of the work.</li>
<li>Copyright is an <a href="/to-the-points/paper3/intellectual-property-rights" target="_blank" rel="noopener"><strong>Intellectual Property Right (IPR).</strong> </a><br />
<ul style="list-style-type: disc;">
<li>Intellectual Property Rights (IPR) are the rights given to persons over the creations of their minds: inventions, literary and artistic works, and symbols, names and images used in commerce.</li>
<li>Other IPRs include trademarks, <a href="/daily-updates/daily-news-editorials/potential-of-gis-is-waiting-to-be-tapped" target="_blank" rel="noopener"><strong>geographical indications</strong></a>, industrial designs, patents, etc.</li>
</ul>
</li>
</ul>
</li>
<li>Copyright as provided by the Indian Copyright Act is valid only within the borders of the country. To secure protection to Indian works in foreign countries, <strong>India has become a member of the following international conventions on copyright and neighbouring (related) rights:</strong><br />
<ul style="list-style-type: circle;">
<li>Berne Convention for the Protection of Literary and Artistic works, 1886.</li>
<li>Universal Copyright Convention (Revised in 1971).</li>
<li>Convention for the Protection of Producers of Phonograms against Unauthorised Duplication of their Phonograms, 1971.</li>
<li>Multilateral Convention for the Avoidance of Double Taxation of Copyright Royalties, 1979.</li>
<li>Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement, 1995.</li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/business/companies/french-competition-watchdog-tells-google-to-pay-news-cos-for-sharing-their-content-6357009/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 4904,
		'category_id' => (int) 21,
		'title' => 'Impact of Covid-19 on Global Economy',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <strong><a href="/daily-updates/daily-news-analysis/uncdat-world-investment-report-2019" target="_blank" rel="noopener">United Nations Conference on Trade and Development</a> (UNCTAD)</strong> has observed that the economic uncertainty sparked by the <a href="/daily-updates/daily-news-analysis/coronavirus-disease-named-covid-19" target="_blank" rel="noopener"><strong>Covid-19</strong></a> will likely cost the global economy $1 trillion in 2020.</p>
<ul style="list-style-type: square;">
<li>The observation is based on the <a href="/daily-updates/daily-news-analysis/world-economic-situation-and-prospects-2020" target="_blank" rel="noopener"><strong>World Economic Situation and Prospects 2020</strong></a> released by UNCTAD.</li>
</ul>
<h3>Key Observations</h3>
<ul style="list-style-type: square;">
<li>A <strong>slowdown in the global economy to under 2%</strong> for this year is envisaged which will probably cost in the order of $1 trillion.<br />
<ul style="list-style-type: circle;">
<li><strong>Worst possible scenario:</strong> If the world economy grew at only 0.5% which would involve a $2 trillion hit to <a href="/daily-updates/daily-news-analysis/base-year-for-gdp-calculations" target="_blank" rel="noopener"><strong>gross domestic product</strong></a> (GDP).</li>
<li><strong>Best case scenario:</strong> With moderate declines in private consumption, investment and exports and offsetting increases in government spending, global growth would fall to 1.2% in 2020.</li>
</ul>
</li>
<li><strong>Global financial market is fluctuating</strong> due to the<strong> supply-chain interruptions from China</strong> and<strong> oil price uncertainty</strong> among major producers.</li>
<li><strong>European economies</strong> had already been performing extremely badly towards the end of 2019.<br />
<ul style="list-style-type: circle;">
<li><strong>Europe</strong> is almost certain to go into <strong>recession</strong> over the coming months.</li>
<li><strong>German</strong> economy is in a<strong> fragile</strong> state.</li>
<li><strong>Italian</strong> economy and other parts of the <strong>European periphery</strong> are also facing very <strong>serious stresses</strong> right now.</li>
</ul>
</li>
<li>Many parts of the <strong>Latin American</strong> region are also vulnerable.<br />
<ul style="list-style-type: circle;">
<li><strong>Argentina</strong> in particular will be struggling as a consequence of the knock-on effects of this pandemic.</li>
</ul>
</li>
<li>The <strong>least developed countries</strong> whose economies are driven by the<strong> sale of raw materials</strong> will also face hard consequences.</li>
<li>Heavily-indebted <strong>developing countries,</strong> particularly <strong>commodity exporters,</strong> face a particular threat due to the <strong>weaker export returns linked to a stronger US dollar.</strong><br />
<ul style="list-style-type: circle;">
<li>The likelihood of a <strong>stronger dollar</strong> as investors seek safe-havens for their money and the almost certain<strong> rise in commodity prices</strong> as the global economy slows down, means that commodity exporters are particularly <strong>vulnerable.</strong></li>
</ul>
</li>
</ul>
<h3>Suggestions</h3>
<ul style="list-style-type: square;">
<li>A series of <strong>dedicated policy responses and institutional reforms</strong> are needed to prevent a localized health scare from turning into a global economic meltdown.</li>
<li>Governments need to <strong>spend now in order to prevent more damaging meltdown</strong> in the coming times.<br />
<ul style="list-style-type: circle;">
<li><strong>Chinese</strong> Government is likely to introduce <strong>significant expansionary measures &ndash;</strong> shorthand for increasing spending or tax cuts.</li>
<li>The<strong> US</strong> government is in an election year and it needs to do <strong>more than simply cutting taxes and reducing interest rates.</strong></li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>United Nations Conference on Trade and Development</strong></p>
<ul style="list-style-type: square;">
<li>It was established in <strong>1964</strong> to promote development-friendly integration of developing countries into the world economy.</li>
<li>UNCTAD is a <strong>permanent intergovernmental body</strong> headquartered at <strong>Geneva</strong> in Switzerland.</li>
<li>Some of the <strong>reports published by it are:</strong><br />
<ul style="list-style-type: circle;">
<li>Trade and Development Report</li>
<li>World Investment Report</li>
<li>The Least Developed Countries Report</li>
<li>Information and Economy Report</li>
<li>Technology and Innovation Report</li>
<li>Commodities and Development Report</li>
</ul>
</li>
</ul>
</div>
<p><a href="https://news.un.org/en/story/2020/03/1059011" target="_blank" rel="noopener"><strong>Source: UN</strong></a></p>',
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		'article_id' => (int) 4608,
		'category_id' => (int) 21,
		'title' => 'The Economic Impact of Coronavirus',
		'description' => '<h3>Why in News</h3>
<p>The <a href="/daily-updates/daily-news-editorials/novel-coronavirus-2019-ncov" target="_blank" rel="noopener"><strong>Coronavirus outbreak</strong></a> is having a negative impact on the various sectors of the economy.</p>
<h3>Impact on Indian Economy</h3>
<ul style="list-style-type: square;">
<li><strong>GDP Growth Rate</strong><br />
<ul style="list-style-type: circle;">
<li>The <a href="/daily-updates/daily-news-analysis/oecds-forecast-for-global-economy-in-2060" target="_blank" rel="noopener"><strong>Organisation for Economic Co-operation and Development (OECD)</strong></a> has slashed India&rsquo;s growth forecast for 2020-21 by 110 basis points (bps) to 5.1%, warning that the impact of the Covid-19 outbreak on business confidence, financial markets and the travel sector, including disruption to supply chains, could shave 50 bps off global growth in 2020.</li>
</ul>
</li>
<li><strong>Pharmaceuticals:</strong> Given the pharmaceutical industry&rsquo;s deep linkages to China, the supply chain of raw materials of drugs has taken a hit. <br />
<ul style="list-style-type: circle;">
<li>The production facilities in Himachal Pradesh &mdash; largest pharma hub of Asia &mdash; have warned of suspension.</li>
<li>Active Pharmaceutical Ingredients (APIs), also called bulk drugs, are significant ingredients in the manufacture of drugs. The Hubei province of China, the epicentre of the coronavirus, is the hub of the API manufacturing industry.</li>
<li>India is heavily import-dependent for APIs from China. India&rsquo;s API imports stand at around $3.5 billion per year, and around 70%, or $2.5 billion, come from China.</li>
</ul>
</li>
<li><strong>Automobile Industry</strong><br />
<ul style="list-style-type: circle;">
<li>China is one of the leading suppliers of auto components in India, accounting for 27% of the total imports.</li>
<li>The coronavirus is expected to have an impact on the Indian automotive industry and therefore also on the automobile component and forging industries, which had already reduced their production rate due to the market conditions and on account of the impending change over to BS-VI emission norms from BS-IV from April 2020.</li>
</ul>
</li>
<li><strong>Stock Market</strong><br />
<ul style="list-style-type: circle;">
<li>On 28<sup>th</sup> February, the Indian stock market registered one of its worst crashes in a single day. Indian indices fell over 3.5%, marking the second biggest fall in Sensex history.</li>
<li>The Sensex plunged 1,448.37 points to close at 38,297.29, while the Nifty tanked 3.711% or 431.55 points to settle a little above the 11,200 mark.</li>
<li>The Sensex's worst fall in history was on 24th August, 2015, when the indices fell 1,624 points on the back of a slump in the Chinese markets and rising crude oil prices.</li>
</ul>
</li>
<li><strong>Currency</strong><br />
<ul style="list-style-type: circle;">
<li>The month of March is typically good for the Indian currency as remittances, from both overseas citizens and companies, tend to boost the exchange rate.</li>
<li>In the past decade, the rupee has appreciated seven times against the dollar in March. But March 2020 could be hard on the exchange rate and the rupee&rsquo;s sharp drop to 73.25 per dollar on 3rd March, 2020 is evidence of this. One of the reasons is an increase in the number of reported cases of coronavirus in India.</li>
</ul>
</li>
</ul>
<h3>Global Scenario</h3>
<ul style="list-style-type: square;">
<li><strong>Global Growth:</strong> The world's economy could grow at its slowest rate since 2009 this year due to the coronavirus outbreak, according to the Organisation for Economic Cooperation and Development (OECD). The OECD has forecast growth of just 2.4% in 2020, down from 2.9% in November 2019</li>
<li><strong>Fall in Customer Demand:</strong> Some people are choosing to avoid activities that might expose them to the risk of infection, such as going out shopping. Restaurants, car dealerships and shops have all reported a fall in customer demand.</li>
<li><strong>Travel Industry:</strong> The number of cases diagnosed is increasing around the world every day. Thus, many countries have introduced travel restrictions to try to contain the virus's spread, impacting the travel industry massively.</li>
<li><strong>Beneficiaries</strong><br />
<ul style="list-style-type: circle;">
<li>Consumer goods giant Reckitt Benckiser, for example, has seen a boost in sales for its Dettol and Lysol products.The disinfectant is seen as providing protection against the spread of the disease, although its effectiveness has not yet been scientifically proven.</li>
<li>The price of gold - which is often considered a "safe haven" in times of uncertainty - has also increased. Its spot price hit a seven-year high of $1,682.35 per ounce in February 2020.</li>
</ul>
</li>
</ul>
<h3>Global Response</h3>
<ul style="list-style-type: square;">
<li>The COVID-19 outbreak was declared a Public Health Emergency of International Concern by the WHO on 30th January 2020.</li>
<li>According to recommendations by the World Health Organization, the diagnosis of COVID-19 must be confirmed by the Real Time- Polymerase Chain Reaction (PCRT-PCR) or gene sequencing for respiratory or blood specimens, as the key indicator for hospitalisation.</li>
<li>$15 million dollars has been released from the UN&rsquo;s Central Emergency Fund to help fund global efforts to contain the spread of the COVID-19 coronavirus, particularly vulnerable countries with weak health care systems.</li>
<li>Vaccines are being developed.</li>
</ul>
<h3>Indian Response</h3>
<ul style="list-style-type: square;">
<li>The Indian government arranged for the evacuation of 366 Indian citizens from Wuhan in a special Air India flight on 31<sup>st</sup> January 2020. The passengers were placed under quarantine for a period of 14 days.<br />
<ul style="list-style-type: circle;">
<li>A second batch of passengers, including seven Maldivan citizens evacuated by the government, arrived from Wuhan on 1st February 2020. The repatriated passengers were also monitored.</li>
</ul>
</li>
<li>The government has already introduced travel restrictions and suspended visas from affected countries.</li>
<li>A detailed containment plan has been shared with states. States have been asked to identify possible isolation areas in hospitals that can accommodate larger numbers.</li>
<li>The Indian health minister advised people to approach the government helpline numbers regarding the doubts related to symptoms of the deadly disease. The situation is being monitored at the highest level.</li>
<li>PCR Test: If PCR test is positive, the sample is sent to the National Institute of Virology in Pune, which is the only government laboratory currently doing genome sequencing, for final confirmation.</li>
</ul>
<div class="border-bg">
<p><strong>National Institute of Virology</strong></p>
<ul style="list-style-type: square;">
<li>The National Institute of Virology is one of the major Institutes of the Indian Council of Medical Research (ICMR).</li>
<li>It was established at Pune, Maharashtra State in 1952 as Virus Research Centre (VRC) under the auspices of the ICMR and the Rockefeller Foundation (RF), USA.</li>
</ul>
</div>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>It is critical to mount a coordinated and coherent response. This not only means involvement of both public and private sectors but also allopathic and non-allopathic medical systems, different departments such as police, fire, transportation, tourism, food supplies and other sectors.</li>
</ul>
<p><a href="https://www.thehindu.com/business/sensex-sheds-more-than-900-points-on-virus-alarm-in-india/article30965635.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'article_id' => (int) 4521,
		'category_id' => (int) 22,
		'title' => 'Perils of Neo-Liberal Era',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.thehindu.com/opinion/lead/towards-a-new-world-order/article30813398.ece" target="_blank" rel="noopener"><strong>&ldquo;Towards a new world order&rdquo;</strong> </a>which was published in The Hindu on 14/02/2020. It talks about issues related to the neo-liberal economic order and suggests a suitable alternative to it.</p>
</div>
<p>Capital can be defined as money, equipment, and other resources which are privately owned. Private ownership provides the owner with the opportunity to grow, develop and reap the benefits of using those resources for productive endeavours. Based on this capitalism, in its elementary stages fosters free enterprise and innovation.</p>
<p>Current world economic order can be termed as <strong>neo-capitalism or neo-liberalism</strong> order which focuses on <strong>Laissez-faire (market freedom), globalisation, intellectual property rights, free movement of goods, services, investment and ideas.</strong></p>
<p>However, over the course of the neoliberal era, economies around the world have become more and more unequal. Such conditions question neo-capitalism's long term viability as the key driving force of world economic order.</p>
<h3>Issues Related to Neo-liberal Era</h3>
<ul style="list-style-type: square;">
<li><strong>Increasing Inequalities:</strong> Social inequalities and the grim problems of stark and continuing poverty are at the epicentre of the current world order. This can be reflected by the <a href="/daily-updates/daily-news-analysis/global-inequality-crisis-report-oxfam-international" target="_blank" rel="noopener"><strong>Oxfam Report 2019:</strong></a><br />
<ul style="list-style-type: circle;">
<li>2,153 billionaires have more wealth than 4.6 billion people.</li>
<li>The world&rsquo;s richest 22 men have more money than all the women in Africa.</li>
<li>According to Oxfam, if governments were to increase taxation on the wealthiest 1% for the next 10 years, that would be the equivalent to creating 117 million jobs in education, health and elderly care and other sectors.</li>
</ul>
</li>
<li><strong>Creation of Monopolies:</strong> Despite its alleged commitment to market competition, the neoliberal economic agenda instead brought the decline of competition and the rise of close to monopoly power in vast swaths of the economy: pharmaceuticals, telecom, airlines, agriculture, banking, industrials, retail.</li>
<li><strong>Unsustainable Economic Growth:</strong> One of the chief characteristics of economic development is the intensification of energy use. There is an unprecedented concentration of high energy density in all economic development strategies.<br />
<ul style="list-style-type: circle;">
<li>The bulk of the energy continues to be generated from non-renewable sources.</li>
<li>The developed world&rsquo;s primary objective is to capture energy-generating resources from across continents and put them to use to push their GDP growth to greater heights.</li>
<li>This unsustainable economic growth model is against the concept of sustainability, as it sacrifices the need of future generations for the welfare of present generations.</li>
</ul>
</li>
<li><strong>Developing Countries at Disadvantage:</strong> High consumption of energy by the developed world has been accompanied by the disposal of residual products (&lsquo;e-waste&rsquo;) on the shores of many African and Asian countries.<br />
<ul style="list-style-type: circle;">
<li>As a result, the poor in the developing world are, unwittingly, drawn and exposed to toxic, hazardous materials like lead, cadmium and arsenic.</li>
</ul>
</li>
<li>Also, <strong>the &lsquo;globalisation&rsquo;</strong> phenomenon has led to the <strong>exploitation of the developing world,</strong> with most countries being treated as a source of cheap labour and critical raw material.</li>
<li>Further, <strong>high expenses on research and Intellectual Property Rights favour the developed countries,</strong> as it hinders the transfer of technology which may aid sustainable development.</li>
<li>Moreover, the sustainability of neo-liberal economic order got exposed during the 2007-2008 Global financial crisis due to which the global economy was on the verge of collapse.</li>
</ul>
<h3>Way Forward</h3>
<p>Improvement in &lsquo;Ease of Doing Business&rsquo; needs to be balanced with the improvement in Human Development Index.</p>
<ul style="list-style-type: square;">
<li>The current neo-liberal model can be replaced by<strong> &lsquo;Nordic Economic Model&rsquo;,</strong> which pertains to the remarkable achievements of the <strong>Scandinavian countries comprising Denmark, Finland, Iceland, Sweden, Norway, and allied territories.</strong></li>
</ul>
<div class="border-bg">
<p><strong>Nordic Economic Model</strong> is comprised of:</p>
<ul style="list-style-type: square;">
<li>Effective welfare safety nets for all.</li>
<li>Corruption-free governance.</li>
<li>A fundamental right to tuition-free education, including higher education.</li>
<li>A fundamental right to good medical care.</li>
<li>Nordic Countries also shut down the tax havens.</li>
<li>Also, in Nordic countries, personal and corporate income tax rates are very high, especially on the very rich.</li>
<li>They also have large public sector enterprises; extensive and generous universal welfare systems and considerable state involvement in promoting and upholding welfare states.</li>
<li>By following this economic model, These nations are among the richest in the world when measured in terms of GDP per capita.</li>
<li>UN reports also indicate that the Nordic countries are the happiest countries in the world.</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li><strong>New Model for the Corporate Sector:</strong> A new format has emerged under which a company&rsquo;s performance is measured through four &lsquo;Ps&rsquo;.<br />
<ul style="list-style-type: circle;">
<li><strong>The first is &lsquo;P&rsquo; for &lsquo;profit&rsquo;.</strong></li>
<li><strong>The second &lsquo;P&rsquo; is for &lsquo;people&rsquo;:</strong> How the companies actions impact not only employees but society as a whole.</li>
<li><strong>The third &lsquo;P&rsquo; is for &lsquo;planet&rsquo;:</strong> Companies actions and plans should be sensitive to the environment.</li>
<li><strong>The fourth &lsquo;P&rsquo; is for &lsquo;purpose&rsquo;</strong>: Companies and individuals must develop a larger purpose than &lsquo;business as usual&rsquo;.</li>
<li>Using big data and text analytics, a company&rsquo;s performance can be measured in terms of all the four &lsquo;P&rsquo;s and a corporate entity can be thus held accountable.</li>
</ul>
</li>
<li>Redistribution of wealth and resources is needed to end extreme poverty. This can be done by taxing wealth, high incomes, and cracking down on loopholes and inadequate global tax rules.</li>
<li>Apart from these, there is a requirement of global consensus and the will to make the planet more sustainable, so that all individuals can live with justice and equality.</li>
</ul>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #daf2f5;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Like the Nordic model, in India, the government needs to regulate the market forces in order to address social problems such as widespread poverty. Discuss.</p>
</td>
</tr>
</tbody>
</table>',
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		'article_id' => (int) 4457,
		'category_id' => (int) 28,
		'title' => 'Different Irrigation Systems',
		'description' => '<h3>Irrigation</h3>
<ul style="list-style-type: square;">
<li>Irrigation is the artificial application of water to the soil or agricultural field. It is the replacement or supplementation of rainwater with another source of water. It is used in dry areas and during periods of inadequate rainfall.</li>
<li>The main idea behind irrigation systems is to assist in the growth of agricultural crops and plants by maintaining with the minimum amount of water required, suppressing weed growth in grain fields, preventing soil consolidation etc.</li>
</ul>
<h3>Well and Tube Well Irrigation</h3>
<ul style="list-style-type: square;">
<li>Wells are mainly found in U.P., Bihar, Tamil Nadu, etc. There are various types of wells &ndash; shallow wells, deep wells, tube wells, artesian wells, etc. From the shallow wells water is not always available as the level of water goes down during the dry months. Deep wells are more suitable for the purpose of irrigation as water from them is available throughout the year.</li>
<li>At places where ground water is available, a tube-well can be installed near the agricultural area. A deep tube well worked by electricity, can irrigate a much larger area (about 400 hectares) than a surface well (half hectares). Tube wells are mostly used in U.P., Haryana, Punjab, Bihar and Gujarat.</li>
<li><strong>Merits:</strong> Well is simplest, cheapest and independent source of irrigation and can be used as and when the necessity arises. Several chemicals such as nitrate, chloride, sulphate, etc. found in well water add to the fertility of soil. More reliable during periods of drought when surface water dries up.</li>
<li><strong>Demerits:</strong> Only limited area can be irrigated. In the event of a drought, the ground water level falls and enough water is not available. Tubewells can draw a lot of groundwater from its neighbouring areas and make the ground dry and unfit for agriculture.</li>
</ul>
<h3>Canal Irrigation</h3>
<ul style="list-style-type: square;">
<li>Canals can be an effective source of irrigation in areas of low level relief, deep fertile soils, perennial source of water and extensive command area. Therefore, the main concentration of canal irrigation is in the northern plain of India, especially the areas comprising Uttar Pradesh, Haryana and Punjab.</li>
<li>The digging of canals in rocky and uneven areas is difficult and uneconomic. Thus, canals are practically absent from the Peninsular plateau area. However, the coastal and the delta regions in South India do have some canals for irrigation.<a href="http://www.drishtiias.com/images/uploads/1581943559_image4.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943559_image4.png" style="float: right;" width="250" caption="false" /></a></li>
<li><strong>Two types: <em>Inundation canals,</em></strong> which are taken out from the rivers without any regulating system like weirs etc. at their head. Such canals provide irrigation mainly in the rainy season when the river is in flood and there is excess water.<em><strong> Perennial Canals</strong></em> are those which are taken off from perennial rivers by constructing a barrage across the river. Most of the canals in India are perennial.</li>
<li><strong>Merits:</strong> Most of the canals provide perennial irrigation and supply water as and when needed. This saves the crops from drought conditions and helps in increasing the farm production.</li>
<li><strong>Demerits:</strong> Many canals overflow during the rainy season and flood the surrounding areas. Canal irrigation is suitable in plain areas only.</li>
</ul>
<h3>Tank Irrigation<a href="http://www.drishtiias.com/images/uploads/1581943596_image2.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943596_image2.png" style="float: right;" width="250" caption="false" /></a></h3>
<ul style="list-style-type: square;">
<li>A tank is developed by constructing a small bund of earth or stones built across a stream. The water impounded by the bund is used for irrigation and other purposes. Tank comprises an important source of irrigation in the Karnataka Plateau, MP, Maharashtra, Odisha, Kerala Bundelkhand area of UP, Rajasthan and Gujarat.</li>
<li><strong>Merits:</strong> Most of the tanks are natural and do not involve heavy cost for their construction and have longer life span. In many tanks, fishing is also carried on, which supplements both the food resources and income of the farmer.</li>
<li><strong>Demerits:</strong> Many tanks dry up during the dry season and fail to provide irrigation when it is required. Lifting of water from tanks and carrying it to the fields is a strenuous and costly exercise.</li>
</ul>
<h3>Drip Irrigation<a href="http://www.drishtiias.com/images/uploads/1581943627_image1.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943627_image1.png" style="float: right;" width="250" caption="false" /></a></h3>
<ul style="list-style-type: square;">
<li>In drip irrigation, water is applied near the plant root through emitters or drippers, on or below the soil surface, at a low rate varying from 2-20 liters per hour. The soil moisture is kept at an optimum level with frequent irrigations.</li>
<li>Among all irrigation methods, drip irrigation is the most efficient and can be practiced for a large variety of crops, especially in vegetables, orchard crops, flowers and plantation crops.</li>
<li><strong>Merits:</strong> Fertilizer and nutrient loss is minimized due to localized application and reduced leaching. Field leveling is not necessary. Recycled non-potable water can be used. Water application efficiency increases. Soil erosion and weed growth is lessened.</li>
<li><strong>Demerits:</strong> Initial cost can be more, can result in clogging, wastage of water, time and harvest, if not installed properly.</li>
</ul>
<h3>Sprinkler Irrigation<a href="http://www.drishtiias.com/images/uploads/1581943655_image3.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943655_image3.png" style="float: right;" width="250" caption="false" /></a></h3>
<ul style="list-style-type: square;">
<li>In this method, water is sprayed into the air and allowed to fall on the ground surface somewhat resembling rainfall. The spray is developed by the flow of water under pressure through small orifices or nozzles. The sprinkler irrigation system is a very suitable method for irrigation on uneven lands and on shallow soils.</li>
<li>Nearly all crops are suitable for sprinkler irrigation systems except crops like paddy, jute, etc. The dry crops, vegetables, flowering crops, orchards, plantation crops like tea, coffee are all suitable and can be irrigated through sprinklers.</li>
<li><strong>Merits:</strong> Suitable to all types of soil except heavy clay. Water saving. Increase in yield. Saves land as no bunds etc. are required.</li>
<li><strong>Demerits:</strong> Higher initial cost. Under high wind conditions and high temperature distribution and application efficiency is poor.</li>
</ul>
<h3>Other Types of Irrigation<a href="http://www.drishtiias.com/images/uploads/1581943695_image6.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943695_image6.png" style="float: right;" width="250" caption="false" /></a></h3>
<ul style="list-style-type: square;">
<li><strong>Furrow Irrigation:</strong> Furrow irrigation is a type of surface irrigation in which trenches or &ldquo;furrows&rdquo; are dug between crop rows in a field. Farmers flow water down the furrows and it seeps vertically and horizontally to refill the soil reservoir. Flow to each furrow is individually controlled.<br />
<ul style="list-style-type: circle;">
<li>One of the difficulties of furrow irrigation is ensuring uniform dispersion of water over a given field. Another difficulty with furrow irrigation is the increased potential for water loss due to runoff.</li>
</ul>
</li>
<li><strong>Surge Irrigation:</strong> Surge irrigation is a variant of furrow irrigation where the water supply is pulsed on and off in planned time periods. The wetting and drying cycles reduce infiltration rates resulting in faster advance rates and higher uniformities than continuous flow.</li>
<li><strong>Ditch Irrigation:</strong> It is a rather traditional method, where ditches are dug out and seedlings are planted in rows. The plantings are watered by placing canals or furrows in between the rows of plants. Siphon tubes are used to move the water from the main ditch to the canals.<a href="http://www.drishtiias.com/images/uploads/1581943728_image5.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1581943728_image5.png" style="float: right;" width="250" caption="false" /></a></li>
<li><strong>Sub Irrigation or Seepage Irrigation:</strong> It is a method of irrigation where water is delivered to the plant root zone from below the soil surface and absorbed upwards. The excess may be collected for reuse.<br />
<ul style="list-style-type: circle;">
<li>Advantages are water and nutrient conservation, and labor-saving.</li>
<li>The outfitting cost is relatively high. Potential problems, such as the possibility of increased presence of disease in recycle water.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<p>The farmers should be acquainted with the type of soil moisture, quality of irrigation water, frequency of irrigation for the proper implementation of irrigation systems.</p>',
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		'article_id' => (int) 3937,
		'category_id' => (int) 21,
		'title' => 'Operation Twist',
		'description' => '<h3>Why in News</h3>
<p>The <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener"><strong>Reserve Bank of India</strong></a> has announced that it will carry out <strong>US-style 'Operation Twist'</strong> to bring down interest rates.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li>RBI will conduct <strong>simultaneous purchase and sale of government</strong> securities under <strong>Open Market Operations (OMO)</strong> for ₹10,000 crore each.</li>
<li>It will purchase the longer-term maturities (i.e government bonds maturing in 2029), and simultaneously sell the shorter duration ones (i.e. short-term bonds maturing in 2020).</li>
<li>The eligible participants can bid or submit offers in electronic format on <a href="/daily-updates/daily-news-analysis/rbi-to-buy-g-secs" target="_blank" rel="noopener"><strong>RBI&rsquo;s Core Banking Solution (E-Kuber).</strong></a></li>
</ul>
<div class="border-bg">
<p><strong>&lsquo;Operation Twist&rsquo;</strong></p>
<ul style="list-style-type: square;">
<li>&lsquo;Operation Twist&rsquo; is when the<strong> central bank uses the proceeds from the sale of short-term securities to buy long-term government debt papers,</strong> leading to <strong>easing of interest rates on the long term papers.</strong></li>
<li>Operation Twist first appeared in 1961 as a way to strengthen the U.S. dollar and stimulate cash flow into the economy.</li>
<li>In June 2012, Operation Twist was so effective that the yield on the 10-year U.S. Treasury dropped to a 200-year low.</li>
</ul>
</div>
<h3>Open Market Operations</h3>
<ul style="list-style-type: square;">
<li>Open Market Operations (OMO) is one of the<a href="/daily-updates/daily-news-analysis/rbi-keeps-policy-rates-unchanged" target="_blank" rel="noopener"><strong> quantitative (to regulate or control the total volume of money) monetary policy tools</strong></a> which is employed by the central bank of a country to <strong>control the money supply in the economy.</strong></li>
<li>OMOs are conducted by the RBI by way of <strong>sale or purchase of government securities (g-secs)</strong> to adjust money supply conditions.</li>
<li>The central bank sells g-secs to remove liquidity from the system and buys back g-secs to infuse liquidity into the system.</li>
<li>These operations are often conducted on a <strong>day-to-day basis</strong> in a manner that balances inflation while helping banks continue to lend.</li>
<li>RBI carries out the OMO <strong>through commercial banks</strong> and <strong>does not directly deal</strong> with the public.</li>
<li>The RBI uses OMO along with other monetary policy tools such as repo rate, cash reserve ratio and statutory liquidity ratio to adjust the quantum and price of money in the system.</li>
</ul>
<h3>Benefits</h3>
<ul style="list-style-type: square;">
<li>This simultaneous purchase and sale will bring down interest on long term loans which can lead to<strong> increase in economic spending.</strong></li>
<li>OMOs are primarily done to maintain ample liquidity in the system, which reflects that the <a href="/daily-updates/daily-news-analysis/repo-rate-unchanged" target="_blank" rel="noopener"><strong>RBI is keen that banks should transmit lower rates to borrowers.</strong></a></li>
<li>The action of Operation Twist by the RBI is<strong> encouraging for the market.</strong> This step may become a <strong>driving factor for long-term economic activity</strong> and the addition of new investment stock.</li>
</ul>
<p><a href="https://www.thehindu.com/business/markets/rbi-to-conduct-operation-twist-to-manage-yields-on-dec-23/article30351441.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'article_id' => (int) 3991,
		'category_id' => (int) 33,
		'title' => 'Insolvency and Bankruptcy Code',
		'description' => '<p><a href="http://www.drishtiias.com/images/uploads/1577357857_Insolvency%20and Bankruptcy Code (Mind Map).png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1577357857_Insolvency and Bankruptcy Code (Mind Map).png" width="488" height="1003" style="display: block; margin-left: auto; margin-right: auto;" /></a></p>
<p style="text-align: center;"><a href="/to-the-points/paper3/insolvency-and-bankruptcy-code-3" target="_blank" rel="noopener"><em>For TTP</em></a></p>',
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		'article_id' => (int) 3871,
		'category_id' => (int) 28,
		'title' => 'Insolvency and Bankruptcy Code',
		'description' => '<h3>Why in News</h3>
<p>The Union Cabinet has approved the proposal to make amendments in the <a href="/loksabha-rajyasabha-discussions/in-depth-insolvency-and-bankruptcy-code-act" target="_blank" rel="noopener"><strong>Insolvency and Bankruptcy Code (IBC), 2016,</strong></a> through the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019. The amendments aim to remove certain difficulties being faced during insolvency resolution process to realise the objects of the code and to further ease doing of business.</p>
<h3>Insolvency and Bankruptcy Code, 2016</h3>
<p><strong>Insolvency and Bankruptcy Code, 2016</strong> provides a time-bound process for resolving insolvency in companies and among individuals.</p>
<ul style="list-style-type: square;">
<li><strong>Insolvency</strong> is a situation where individuals or companies are unable to repay their outstanding debt.</li>
<li><strong>Bankruptcy,</strong> on the other hand, is a situation whereby a court of competent jurisdiction has declared a person or other entity insolvent, having passed appropriate orders to resolve it and protect the rights of the creditors. It is a legal declaration of one&rsquo;s inability to pay off debts.</li>
<li>The Government implemented the Insolvency and Bankruptcy Code (IBC) to consolidate all laws related to insolvency and bankruptcy and to tackle Non-Performing Assets (NPA), a problem that has been pulling the Indian economy down for years.</li>
<li>The Code is quite different from the earlier resolution systems as it shifts the responsibility to the creditor to initiate the insolvency resolution process against the corporate debtor.</li>
<li>The recently proposed amendments aim to remove bottlenecks, streamline the corporate insolvency resolution process, and protect the last mile funding in order to boost investment in financially distressed sectors.<br />
<ul style="list-style-type: circle;">
<li>Ring-fencing the companies resolved under the IBC from regulatory actions during past management can make the IBC process attractive for investors and acquirers.</li>
</ul>
</li>
</ul>
<p><strong>Objectives of IBC</strong></p>
<ul style="list-style-type: square;">
<li>To consolidate and amend all existing insolvency laws in India.</li>
<li>To simplify and expedite the Insolvency and Bankruptcy Proceedings in India.</li>
<li>To protect the interest of creditors including stakeholders in a company.</li>
<li>To revive the company in a time-bound manner.</li>
<li>To promote entrepreneurship.</li>
<li>To get the necessary relief to the creditors and consequently increase the credit supply in the economy.</li>
<li>To work out a new and timely recovery procedure to be adopted by the banks, financial institutions or individuals.</li>
<li>To set up an Insolvency and Bankruptcy Board of India.</li>
<li>Maximization of the value of assets of corporate persons.</li>
</ul>
<h3>Salient features of the Insolvency and Bankruptcy Code, 2016</h3>
<ul style="list-style-type: square;">
<li>Covers all individuals, companies, Limited Liability Partnerships (LLPs) and partnership firms.</li>
<li>Adjudicating authority:<br />
<ul style="list-style-type: circle;">
<li><strong>National Company Law Tribunal (NCLT)</strong> for companies and LLPs</li>
<li><strong>Debt Recovery Tribunal (DRT)</strong> for individuals and partnership firms</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Insolvency Resolution Process</strong></p>
<ul style="list-style-type: square;">
<li>Insolvency resolution process can be initiated by any of the stakeholders of the firm: firm/debtors/creditors/employees.</li>
<li>If the adjudicating authority accepts, an <strong>Insolvency resolution professional (IP)</strong> is appointed.</li>
<li>The power of the management and the board of the firm is transferred to the <strong>committee of creditors (CoC).</strong> They act through the IP.</li>
<li>The IP has to decide whether to revive the company (insolvency resolution) or liquidate it (liquidation).</li>
<li>If they decide to revive, they have to find someone willing to buy the firm.</li>
<li>The creditors also have to accept a significant reduction in debt. The reduction is known as a haircut.</li>
<li>They invite open bids from the interested parties to buy the firm.</li>
<li>They choose the party with the best resolution plan, that is acceptable to the majority of the creditors (75 % in CoC), to take over the management of the firm.</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li>Establishment of an <strong>Insolvency and Bankruptcy Board of India</strong> to exercise regulatory oversight over insolvency professionals, insolvency professional agencies and information utilities.</li>
<li><strong>Insolvency professionals</strong> handle the commercial aspects of insolvency resolution process.</li>
<li><strong>Insolvency professional agencies</strong> develop professional standards, code of ethics and be first level regulator for insolvency professionals members leading to development of a competitive industry for such professionals.</li>
<li><strong>Information utilities</strong> collect, collate, authenticate and disseminate financial information to be used in insolvency, liquidation and bankruptcy proceedings.</li>
<li>Enabling provisions to deal with <strong>cross border insolvency.</strong></li>
</ul>
<h3>Achievements of the IBC</h3>
<ul style="list-style-type: square;">
<li>IBC is a vast improvement on the two earlier laws legislated to recover bad loans &mdash;the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDB).</li>
<li><strong>Speedier Resolution:</strong> Before IBC, resolution processes took an average of 4-6 years, after the enactment of IBC, they came down to 317 days.</li>
<li><strong>Higher Recoveries:</strong> Recoveries are also higher: 43% after the IBC, against 22% before it.</li>
<li>Due to the institution of IBC, we have seen that many business entities are paying up front before being declared insolvent. The success of the Act lies in the fact that many cases have been resolved even before it was referred to NCLT.</li>
<li>A steady increase in the number of admitted corporate insolvency resolution process (CIRP) cases. <br />
<ul style="list-style-type: circle;">
<li>By the end of March 2019, a total of 1858 cases were admitted for resolution &ndash; of which 152 have been appealed/reviewed/settled, 91 have been withdrawn, 378 ended in liquidation and 94 have ended in approval of resolution plans.</li>
</ul>
</li>
</ul>
<h3>Challenges for IBC</h3>
<ul style="list-style-type: square;">
<li><strong>Lack of operational NCLT benches:</strong> Though the government had, in July 2019, announced setting up of 25 additional single and division benches of NCLT at various places including Delhi, Jaipur, Kochi, Chandigarh, and Amravati, most of these remain non-operational or partly operational on account of lack of proper infrastructure or adequate support staff.</li>
<li><strong>low approval rate of resolution plans:</strong> According to the data from the Insolvency and Bankruptcy Board of India (IBBI), of the 2,542 corporate insolvency cases filed between December 1, 2016 and September 30, 2019, about 156 have ended in approval of resolution plans &mdash; a mere 15%.</li>
<li>High number of liquidations is a cause for major worry as it violates IBC&rsquo;s principal objective of resolving bankruptcy.</li>
<li><a href="/daily-updates/daily-news-editorials/issues-in-ibc" target="_blank" rel="noopener"><strong>Slow judicial process</strong></a> in India allows the resolution processes to drag on, this was the same reason for slow recovery under SICA or RBBD.</li>
</ul>
<h3>Conclusion</h3>
<p>Operationalisation of IBC, till now, has been spoiled by myriad factors ranging from frivolous challenges posed by operational creditors and promoters to shortage of judges in tribunals. As a result, an important piece of legislation like IBC, which was expected to usher in a new era of ease of doing business, may fall into the trap of implementation failure. Timely amendments, which provide more teeth to the Code, can only rescue the process. New amendments of 2019 in IBC should be closely watched and observed in that light.</p>
<p><a href="/mind-map/gs-paper3/insolvency-and-bankruptcy-code-mindmap" target="_blank" rel="noopener"><em>For Mind Map</em></a></p>',
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	(int) 11 => object(Cake\ORM\Entity) {

		'article_id' => (int) 3844,
		'category_id' => (int) 28,
		'title' => 'Industrial Corridors',
		'description' => '<h3>Why in News</h3>
<p>Government has <a href="/daily-updates/daily-news-analysis/industrial-corridors" target="_blank" rel="noopener"><strong>approved the development of the five industrial corridor projects</strong></a> which will be implemented through National Industrial Corridor Development and Implementation Trust (NICDIT).</p>
<h3>Introduction</h3>
<ul style="list-style-type: square;">
<li>An industrial corridor is basically a <strong>corridor comprising of multi-modal transport services</strong> that would pass through the states as main artery. <br />
<ul style="list-style-type: circle;">
<li>Freight cargo from industrial and National Investment and Manufacturing Zones (NIMZs) located upto a distance of 100-150 km on both sides of this main artery are brought to the industrial corridor via rail and road feeder links that provides last mile connectivity.</li>
<li>This will lower costs of logistics and enable firms to focus on their areas of core competence.</li>
</ul>
</li>
<li>Industrial corridors offer <strong>effective integration between industry and infrastructure,</strong> leading to overall economic and social development.</li>
<li>Industrial corridors constitute world-class infrastructure, such as:<br />
<ul style="list-style-type: circle;">
<li>High-speed transportation network &ndash; rail and road</li>
<li>Ports with state-of-the-art cargo handling equipment</li>
<li>Modern airports</li>
<li>Special economic regions/industrial areas</li>
<li>Logistic parks/transhipment hubs</li>
<li>Knowledge parks focused on catering to industrial needs</li>
<li>Complementary infrastructure such as townships/real estate</li>
<li>Other urban infrastructure along with enabling policy framework</li>
</ul>
</li>
<li>Five industrial corridor projects have been identified, planned and launched by the Government of India. These corridors are spread across India, with strategic focus on inclusive development to provide a boost to industrialization and planned urbanization.</li>
<li>Manufacturing is a key economic driver in each of these projects. These projects are expected <strong>to play a critical role in raising the share of contribution of the manufacturing sector from approximately 16% to 25% by 2025.</strong></li>
<li>Smart cities are being developed along these corridors. These cities, with state-of-the-art infrastructure, will house the new workforce that is required to power manufacturing, in turn leading to planned urbanization.</li>
</ul>
<h3>Five Industrial Corridors</h3>
<ul style="list-style-type: square;">
<li><strong>Delhi-Mumbai Industrial Corridor (DMIC)</strong> covers Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Gujarat and Maharashtra.<br />
<ul style="list-style-type: circle;">
<li>The corridor covers an overall length of 1483 km between the political capital, Delhi, and the business capital, Mumbai, of India.</li>
<li>The US $100 bn project is being <strong>funded by the Government of India, Japanese loans, investments by Japanese firms</strong> and through Japan depository receipts issued by Indian companies.</li>
<li>DMIC Project aims to create futuristic Industrial Cities by leveraging the &ldquo;High Speed &ndash; High Capacity&rdquo; connectivity backbone provided by the Western Dedicated Freight Corridor (DFC)</li>
</ul>
</li>
<li><strong>Chennai-Bengaluru Industrial Corridor (CBIC)</strong> covers Tamil Nadu, Andhra Pradesh and Karnataka.<br />
<ul style="list-style-type: circle;">
<li>It is being<strong> funded by the Japan International Cooperation Agency</strong> (JICA).</li>
</ul>
</li>
<li><strong>Bengaluru-Mumbai Economic Corridor (BMEC)</strong> covers Maharashtra and Karnataka.<br />
<ul style="list-style-type: circle;">
<li>It is being developed<strong> with the help of Britain (UK).</strong></li>
<li>The Delhi Mumbai Industrial Corridor Development Corporation (DMICD) and the UK Trade and Investment (UKTI) have been determined as the nodal agencies on the Indian and UK sides respectively.</li>
</ul>
</li>
<li><strong>Amritsar-Kolkata Industrial Corridor (AKIC)</strong> covers Punjab, Haryana, Uttarakhand, Uttar Pradesh, Bihar, Jharkhand and West Bengal.<br />
<ul style="list-style-type: circle;">
<li>The Project extends from Amritsar (Punjab) to Dankuni (West Bengal) for a length of 1839 kms.</li>
<li>The Eastern Dedicated Freight Corridor is the backbone of this economic corridor.</li>
</ul>
</li>
<li><strong>East Coast Economic Corridor (ECEC)</strong> covers West Bengal, Odisha, Andhra Pradesh and Tamil Nadu. Vizag to Chennai segment of this Corridor has been taken as phase-1.<br />
<ul style="list-style-type: circle;">
<li><strong>Vizag-Chennai Industrial Corridor (VCIC)</strong> is the first coastal economic corridor in the country.</li>
<li>It covers more than 800 km of Andhra Pradesh&rsquo;s coastline and is aligned with the Golden Quadrilateral. It also plays a critical role in the &ldquo;Act East Policy&rdquo; of India.</li>
<li>In September 2016, the <strong>Asian Development Bank (ADB) approved loans</strong> and grants worth US$ 631 mn for the infrastructural development along the VCIC.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1575888931_image1.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1575888931_image1.png" width="488" height="508" style="display: block; margin-left: auto; margin-right: auto;" caption="false" /></a></p>
<h3>Significance of Industrial Corridors in India</h3>
<ul style="list-style-type: square;">
<li><strong>Economic Significance:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Avenues for Exports:</strong> The Industrial Corridors are likely to<strong> lower the cost of logistics</strong> thereby <strong>increasing the efficiency of industrial production structure.</strong> Such an efficiency <strong>lowers the cost of production</strong> which <strong>makes the Indian made products more competitive</strong> in international markets. The production of export surplus would <strong>generate employment opportunities</strong> and <strong>raise per capita incomes.</strong></li>
<li><strong>Job Opportunities:</strong> Development of Industrial Corridors would attract investments for the development of Industries which is likely to create more jobs in the market. Moreover, people would find job opportunities close to their homes and would not have to migrate to far-off places <strong>(would prevent distress migration)</strong>.</li>
<li>These corridors would provide necessary logistics infrastructure needed to reap<strong> economies of scale,</strong> thus enabling firms to focus on their areas of core competence.</li>
<li>Industrial corridor <strong>provides opportunities for private sector investment</strong> in the provision of various infrastructure projects associated with the exploitation industrial opportunity.</li>
<li>Apart from the development of infrastructure, long-term advantages to business and industry along the corridor include <strong>benefits arising from smooth access to the industrial production units, decreased transportation and communications costs, improved delivery time and reduction in inventory cost.</strong></li>
</ul>
</li>
<li><strong>Environmental Significance:</strong> The establishment of Industrial Units in a scattered manner along the industrial corridor across the length of the state will<strong> prevent concentration of industries in one particular location</strong> which exploited the environment beyond its carrying capacity and caused environmental degradation.</li>
<li><strong>Socio-Economic Significance:</strong> The cascading effect of industrial corridors in socio-economic terms are many such as <strong>setting up of industrial townships, educational institutions, hospitals.</strong> These will further raise the standards of human development.<br />
<ul style="list-style-type: circle;">
<li>Availability of jobs locally would help in preserving family as an institution. This will also increase <strong>social integration</strong> in the country</li>
</ul>
</li>
</ul>
<h3>Challenges Associated with Industrial Corridors</h3>
<ul style="list-style-type: square;">
<li><strong>Land Acquisition:</strong> Since the industrial corridor would cut across the length of the state, acquisition of land has been slow because of legal hurdles and the amount of compensation.</li>
<li><strong>Technological Knowhow:</strong> Since India lacks technological knowhow in certain sectors, it would be prudent to raise FDI caps to allow foreign players to bring in the required technological knowhow and encourage Indian investment in setting up ancillary and auxiliary industries in that sector.</li>
<li>India&rsquo;s <strong>taxation regime</strong> needs to clearly define the tax liabilities of foreign firms operating in India as permanent establishments and otherwise.</li>
<li><strong>Macroeconomic stability:</strong> It is necessary to have a stable exchange rate so that foreign players with investments in India can avoid currency risks.</li>
<li>India needs to clearly lay down <strong>ground rules for cancellation of licenses in Bilateral Investment Treaties</strong> which could later create confusion as in case of Antrix-Devas deal.</li>
<li>The <strong>economic and financial feasibility</strong> of industrial corridors should be ensured by attracting potential investors to set up manufacturing units at NMIZ.</li>
<li>Massive investment in industrial corridor will pave the way for<strong> large human displacement and destruction of fertile agricultural land.</strong></li>
<li>Fear of <strong>widening Rural-urban gap</strong> in terms of Human Development, economic well-being and standards of living.</li>
</ul>
<div class="border-bg">
<p><strong>National Investment &amp; Manufacturing Zones</strong></p>
<ul style="list-style-type: square;">
<li>National Investment &amp; Manufacturing Zones (NIMZs) are one of the important instruments of National Manufacturing Policy, 2011. NIMZs are envisaged as <strong>large areas of developed land</strong> with the requisite eco-system for<strong> promoting world class manufacturing activity.</strong></li>
<li><strong>The main objective of Special Economic Zones is promotion of exports,</strong> while<strong> NIMZs are based on the principle of industrial growth</strong> 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.</li>
<li>So far the Government has granted &lsquo;in-principle&rsquo; approval to the fourteen NIMZs (outside the DMIC region). These are:<br />
<ul style="list-style-type: circle;">
<li>Nagpur in Maharashtra</li>
<li>Prakasam in Andhra Pradesh</li>
<li>Chittoor in Andhra Pradesh</li>
<li>Medak in Telangana</li>
<li>Hyderabad Pharma NIMZ at Rangareddy and Mahabubnagar Districts in Telangana.</li>
<li>Tumkur in Karnataka</li>
<li>Kolar in Karnataka</li>
<li>Bidar in Karnataka</li>
<li>Gulbarga in Karnataka</li>
<li>Kalinganagar, Jajpur District in Odisha</li>
<li>Ramanathapuram District of Tamil Nadu</li>
<li>Ponneri Taluk, Thiruvallur District, Tamil Nadu</li>
<li>Auraiya District in Uttar Pradesh</li>
<li>Jhansi District in Uttar Pradesh</li>
</ul>
</li>
</ul>
</div>
<h3>Conclusion</h3>
<ul style="list-style-type: square;">
<li>To make the corridors successful, India have to be part of the Industrial Revolution 4.0, which will be shaped by a fresh wave of innovation in areas such as smart robotics, materials that are lighter and tougher, and a manufacturing process built around 3D printing and analytics.</li>
<li>Industrial corridors will help India&rsquo;s efforts to lead the world in the fourth wave of industrial revolution. Effective execution of this plan could make India take a major leap in the race of development.</li>
</ul>
<p><a href="/mind-map/gs-paper3/industrial-corridors-mindmap" target="_blank" rel="noopener"><em>For MInd Map</em></a></p>',
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		'article_id' => (int) 3990,
		'category_id' => (int) 33,
		'title' => 'Industrial Corridors',
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<p style="text-align: center;"><a href="/to-the-points/paper3/industrial-corridors-2" target="_blank" rel="noopener"><em>For TTP</em></a></p>',
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		'article_id' => (int) 3811,
		'category_id' => (int) 28,
		'title' => 'Telecom Sector: Issues and Challenges',
		'description' => '<h3>Introduction</h3>
<ul style="list-style-type: square;">
<li>India is currently the world&rsquo;s second-largest telecommunications market with a subscriber base of 1.20 billion and has registered strong growth in the past decade and a half.</li>
<li>Contribution of mobile phone industry as a part of gross domestic product (GDP) of the country in 2014 has been to the tune of US$ 400 billion.</li>
<li>According to a report prepared by the Groupe Speciale Mobile Association (GSMA), as of January 2019, India has witnessed a 165% growth in app downloads in the past two years.</li>
<li>Based on the data available from GSMA, this sector will create close to 4 million additional jobs by 2020.</li>
<li>Tele-density of Indian telecom industry (wireless plus wire line) has grown from a low of 3.60% in March 2001 to 84% in March 2016.</li>
<li><strong>Telecom is the second highest revenue earner for the government, after income tax:</strong> The sector is expected to contribute as much as 90% of the government&rsquo;s non-tax revenue. Digital India programme is also almost completely dependent on the telecom sector.</li>
<li>The liberal and reformist policies of the Government of India have been instrumental along with strong consumer demand in the rapid growth in the Indian telecom sector. The deregulation of Foreign Direct Investment (FDI) norms has made the sector one of the fastest growing and a top five employment opportunity generator in the country.</li>
</ul>
<h3>Evolution of the Telecom Sector in India</h3>
<ul style="list-style-type: square;">
<li>Indian telecom sector is <strong>more than 165 years old.</strong></li>
<li><strong>Telecommunications was first introduced in India in 1851</strong> when the first operational land lines were laid by the government near Kolkata (then Calcutta), although telephone services were formally introduced in India much later in 1881.</li>
<li>Further, in 1883, telephone services were merged with the postal system. <strong>In 1947, after India attained independence, all foreign telecommunication companies were nationalised to form the Posts, Telephone and Telegraph (PTT),</strong> a body that was governed by the Ministry of Communication.</li>
<li><strong>The Indian telecom sector was entirely under government ownership until 1984,</strong> when the private sector was allowed in telecommunication equipment manufacturing only.</li>
<li>The government concretised its earlier efforts towards developing R&amp;D in the sector by setting up an autonomous body &ndash; <strong>Centre for Development of Telematics (C-DOT) in 1984</strong> to develop state-of-the-art telecommunication technology to meet the growing needs of the Indian telecommunication network.</li>
<li>The actual evolution of the industry started after the <strong>Government separated the Department of Post and Telegraph in 1985 by setting up the Department of Posts and the Department of Telecommunications (DoT).</strong><strong></strong></li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1575544757_image1.jpg" target="_blank" rel="noopener"><strong><img class="content-img" src="http://www.drishtiias.com/images/uploads/1575544757_image1.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="601" height="451" caption="false" /></strong></a></p>
<h3>Issues and Challenges of Telecom Sector</h3>
<ul style="list-style-type: square;">
<li><strong>High Right-of-Way (ROW)</strong> cost: Sometimes, state governments charge a huge amount for permitting the laying of fiber, etc.</li>
<li><strong>Lack of fixed line penetration:</strong> India has very little penetration of fixed-line in its network whereas most of the developed countries have a very high penetration of fixed lines (telephone line that traveled through a metal wire or optical fiber as part of a nationwide telephone network).
<ul style="list-style-type: circle;">
<li>Only around 25% of Towers in India are connected with fibre networks, whereas in developed nations, it is in excess of 70%.</li>
<li>5G Network requires towers to be connected to with very high-speed systems. Those high speeds are not possible on the present radio systems.</li>
</ul>
</li>
<li><strong>Declining Average Revenue Per User (ARPU):</strong> ARPU decline now is sharp and steady, which, combined with falling profits and in some cases serious losses, is prompting the Indian telecom industry to look at consolidation as the only way to boost revenues.
<ul style="list-style-type: circle;">
<li>Recently, the Supreme Court allowed the government&rsquo;s plea to recover adjusted gross revenue of about Rs 92,000 crore from telcos, that further adds to their stress.</li>
</ul>
</li>
<li><strong>Limited Spectrum Availability:</strong> Available spectrum is less than 40% as compared to European nations and 50% as compared to China.</li>
<li><strong>Low Broadband Penetration:</strong> Low broadband penetration in the country is a matter of concern. As per white paper presented on broadband at the last International Telecommunication Union (ITU), <strong>broadband penetration in India is only 7%.</strong></li>
<li>Over the Top (OTT) applications such as WhatsApp, OLA and so on do not need permission or a pact with a telecommunications company. This hampers the revenue of telecommunication service providers.</li>
<li><strong>Huge fluctuations in the duties on Telecom Equipment</strong> which contribute to connecting the whole system from the central server to the consumer.</li>
<li><strong>Timeframe of policy execution:</strong> Government have withdrawn a lot of things to benefit telecom sector but by the time it gets executed to the market, it becomes too late.</li>
<li><strong>Lack of Telecom Infrastructure in Semi-rural and Rural areas:</strong> Service providers have to incur huge initial fixed cost to enter semi-rural and rural areas.</li>
<li><strong>Pressure on Margins Due to Stiff Competition:</strong> With competition heating up post entry of Reliance Jio, other telecom players are feeling the heat of substantial drop in tariff rates both for voice and data (more significant for data subscribers).</li>
</ul>
<h3>Steps Taken by the Government</h3>
<ul style="list-style-type: square;">
<li>A new <a href="/daily-updates/daily-news-analysis/the-national-digital-communications-policy-2018" target="_blank" rel="noopener"><strong>National Digital Communications Policy</strong></a> - <strong>2018 (NDCP-2018)</strong> was unveiled in Oct 2018, to replace National Telecom Policy-2012, to cater to the modern needs of the digital communications sector of India. The policy aims to attract USD 100 billion worth of investments and generate 4 million jobs in the sector by 2022.</li>
<li>Telecom Commission was re-designated as the <strong>"Digital Communications Commission&rdquo;.</strong></li>
<li>In 2017, Department of Telecom (DoT) came up with a gazette notification, advising the state governments to give quicker ROW permission and charge very little amount to service providers. Though, only some states responded.</li>
<li>The government has provided benefits to telecom sector by withdrawing some duties.</li>
<li>The government has fast-tracked reforms in the telecom sector and continues to be proactive in providing room for growth for telecom companies.</li>
<li>The Department of Information Technology intends to <strong>set up over 1 million internet-enabled common service centres across India</strong> as per the <a href="/to-the-points/Paper2/e-governance-1" target="_blank" rel="noopener"><strong>National e-Governance Plan.</strong></a></li>
<li>FDI cap in the telecom sector has been increased to 100% from 74%. Out of 100%, 49% will be done through automatic route and the rest will be done through the FIPB approval route.
<ul style="list-style-type: circle;">
<li>FDI of up to 100% is permitted for infrastructure providers offering dark fibre, electronic mail and voice mail.</li>
</ul>
</li>
<li>The Government of India has introduced Digital India programme under which all the sectors such as healthcare, retail, etc. will be connected through the internet.</li>
</ul>
<h3>Suggestions</h3>
<ul style="list-style-type: square;">
<li><strong>NDCP-2018 advocates:-</strong>
<ul style="list-style-type: circle;">
<li>Establishment of a <strong>National Digital Grid</strong> by creating a National Fibre Authority;</li>
<li>Establishing <strong>Common Service Ducts and utility corridors</strong> in all new city and highway road projects;</li>
<li>Creating a <strong>collaborative institutional mechanism</strong> between Centre, States and Local Bodies for Common Rights of Way, standardization of costs and timelines;</li>
<li><strong>Removal of barriers to approvals;</strong> and</li>
<li>Facilitating development of <strong>Open Access Next Generation Networks.</strong></li>
</ul>
</li>
<li><strong>Explore the option of revenue sharing agreement</strong> between Internet players and telecommunication companies.</li>
<li><strong>Outsourcing non-core functions</strong> such as network maintenance, IT operations and customer service.</li>
<li><strong>Divestment of tower assets</strong> into separate companies will enable curb costs and focus on core operations.</li>
<li><strong>Introduce new and efficient technologies</strong> such as M2M (technology that enables networked devices to exchange information and perform actions without the manual assistance of humans) and cloud computing.</li>
<li><strong>Benefits of industry status</strong> in line with other infrastructure sectors in the country to be implemented.</li>
<li><strong>Penetration of rural markets</strong> (72% of population staying in rural areas) will be the key growth driver.</li>
<li>The government should <strong>increase the network area through optical fibre</strong> instead of copper which is expensive. This is necessary to ensure last mile connectivity.</li>
<li>The government needs to prepare a ground for <strong>easy right-of-way permissions</strong> and lower cost of right-of-ways.</li>
<li>It is time to go for a <strong>generational shift</strong> to ensure that <strong>current tariff is financially viable</strong> for service providers.</li>
<li>Telecom Operators should leverage on the talent pool in the country which is bringing in a lot of<strong> new innovations in AI, blockchain technology</strong> etc.</li>
<li><strong>New Infrastructure on shareable basis</strong> just like the way telecom service providers share the cost of towers is need of the hour.</li>
<li>The government should spend more on R&amp;D and create an environment that makes India capable of manufacturing and exporting hardware components like mobile handsets, CCTV Cameras, touch screen monitors etc.</li>
</ul>
<h3>Conclusion</h3>
<ul style="list-style-type: square;">
<li>The telecom sector in India has to deal with various challenges like maintaining the sufficient spectrum, adoption of new technologies faster to be able to use the new features and techniques to serve the customers with better and feature rich service.</li>
<li>A proactive and facilitatory government role regarding telecom sector is the need of the hour given the huge opportunities provided by the sector.</li>
<li>Independent and statutory body, <strong>Telecom Regulatory Authority of India</strong> (TRAI) has an important role to play as a watchdog of the sector. A more proactive and timely Dispute Resolution by <strong>TDSAT</strong> (Telecom Disputes Settlement and Appellate Tribunal) is the need of the hour.</li>
</ul>
<p><a href="/mind-map/gs-paper3/telecom-sector-issues-and-challenges-mindmap" target="_blank" rel="noopener"><em>For Mind Map</em></a></p>',
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		'article_id' => (int) 3989,
		'category_id' => (int) 33,
		'title' => 'Telecom Sector: Issues and Challenges',
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<p style="text-align: center;"><a href="/to-the-points/paper3/telecom-sector-issues-and-challenges" target="_blank" rel="noopener"><em>For TTP</em></a></p>',
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		'article_id' => (int) 3591,
		'category_id' => (int) 21,
		'title' => 'Iran’s New Oil Field',
		'description' => '<h3>Why in News</h3>
<p>Iran has discovered a new oil field in its southwestern province of <strong>Khuzestan.</strong> The field covers 2,400 square kilometres and contains over <strong>50 billion barrels of crude.</strong></p>
<ul style="list-style-type: square;">
<li>The new oil field <strong>could become Iran&rsquo;s second-largest field</strong> after one containing 65 billion barrels in Ahvaz (capital of Khuzestan Province). <a href="http://www.drishtiias.com/images/uploads/1573460257_image4.jpg" target="_blank" rel="noopener"><img width="473" height="335" class="content-img" style="float: right;" src="http://www.drishtiias.com/images/uploads/1573460257_image4.jpg" caption="false" /></a></li>
<li>The discovery has come at a time when <strong>Iran is facing</strong> <a href="/daily-updates/daily-news-analysis/us-reimposes-sanctions-on-iran" target="_blank" rel="noopener"><strong>American sanctions</strong></a> against it after the US pulled out of the <a href="/daily-updates/daily-news-analysis/india-cuts-iranian-oil-imports-ahead-of-us-sanctions" target="_blank" rel="noopener"><strong>2015 nuclear deal.</strong></a><br />
<ul style="list-style-type: circle;">
<li>The other countries involved in the deal - Germany, France, Britain, Russia and China - are struggling to save the deal. However, they have offered no means by which Iran can sell its oil abroad.</li>
<li>Iran has been seen going beyond the deal&rsquo;s stockpile and enrichment limits. It has just begun injecting uranium gas into centrifuges at an <strong>underground <a href="/daily-updates/daily-news-analysis/fordow-nuclear-facility" target="_blank" rel="noopener">Fordow plant</a></strong> located near Tehran.</li>
</ul>
</li>
</ul>
<h3>Iran&rsquo;s Oil Reserves</h3>
<ul style="list-style-type: square;">
<li>Iran already has proven oil reserves of roughly <strong>150 billion barrels.</strong> <br />
<ul style="list-style-type: circle;">
<li>Oil reserves refer to crude that&rsquo;s economically feasible to extract.</li>
<li>Khuzestan is home to Iran&rsquo;s crucial oil industry.</li>
</ul>
</li>
<li>Iran currently has the <strong>world&rsquo;s fourth-largest proven deposits of crude oil</strong> after Venezuela, Saudi Arabia and Canada.
<ul style="list-style-type: circle;">
<li>It also has the world&rsquo;s <strong>second-largest deposits of natural gas</strong> after Russia.</li>
</ul>
</li>
<li>It shares a massive offshore field in the Persian Gulf with Qatar. <br />
<ul style="list-style-type: circle;">
<li><strong>&ldquo;Offshore&rdquo;</strong> refers to the development of oil fields and natural gas deposits under the ocean.</li>
</ul>
</li>
</ul>
<p><a href="https://www.thehindu.com/news/international/iran-finds-new-oilfield-with-53-billion-barrels-hassan-rouhani/article29936946.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'article_id' => (int) 3554,
		'category_id' => (int) 21,
		'title' => 'Relaxation of Fumigation Norms on Import of Onions',
		'description' => '<h3>Why in News</h3>
<p>The Ministry of Agriculture and Farmers Welfare has allowed the relaxation of fumigation norms for the <strong>import of onions</strong> for a limited time period.</p>
<ul style="list-style-type: square;">
<li>The liberalized fumigation norms will facilitate private import of onions from <strong>Afghanistan, Egypt, Turkey, and Iran.</strong> It will help to <strong>boost the availability and check price rise of onions.</strong></li>
<li>The norms will also provide relaxation from the endorsement on the <strong>Phytosanitary Certificate (PSC) as per the Plant Quarantine Order, 2003</strong> for onion imports.</li>
<li>The imported onions which arrive at Indian ports without fumigation and endorsement to that effect on the PSC would be <strong>fumigated in India</strong> by the <strong>importer through an accredited treatment provider.</strong></li>
<li>On a regular basis, imported onions are allowed in the country <strong>only after the commodity is fumigated and certified by the exporting nation.</strong><br />
<ul style="list-style-type: circle;">
<li>Importers are subjected to <strong>four times additional inspection fees</strong> on account of non-compliance.</li>
<li>However, current consignments of onions under liberalized norms <strong>will not be penalised for non-compliance.</strong></li>
</ul>
</li>
</ul>
<h3>Fumigation</h3>
<ul style="list-style-type: square;">
<li><a href="/daily-updates/daily-news-analysis/phosphine-as-fumigant" target="_blank" rel="noopener"><strong>Fumigation</strong></a> is a <strong>pest control method that involves filling the airspace</strong> within a structure with <strong>toxic gas. Eg. Methyl Bromide, Phosphine, etc.</strong><br />
<ul style="list-style-type: circle;">
<li>Methyl bromide is <strong>forbidden</strong> in developed nations, and its use was restricted by the <a href="/daily-updates/daily-news-analysis/greenhouse-gas-levels-reach-record-highs-un-report" target="_blank" rel="noopener"><strong>Montreal Protocol</strong> </a>due to its<strong> role in ozone depletion.</strong></li>
</ul>
</li>
<li>It is mainly used to control pests in storage buildings (structural fumigation), soil, and grains.</li>
<li>It is also used during processing <strong>of goods to be imported or exported to prevent transfer of exotic organisms.</strong></li>
<li>It is seen as the <strong>most effective way to kill all pests, insects, and nematodes.</strong></li>
</ul>
<h3>Phytosanitary Certificate</h3>
<ul style="list-style-type: square;">
<li>Phytosanitary certificates are issued to indicate that consignments of plants, plant products meet specified phytosanitary import requirements under <strong>International Plant Protection Convention (IPPC), 1951.</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Phytosanitary measures</strong> are aimed at the protection of human, animal and plant health from diseases, pests, and contaminants.</li>
</ul>
</li>
<li>Usually, PSCs are generated by the <strong>exporting country.</strong></li>
<li>It can <strong>only be issued by an authorized officer from a government department</strong> that is authorized by a <strong>National Plant Protection Agency (NPPO).</strong> <br />
<ul style="list-style-type: circle;">
<li>NPPO is in force to protect the threat of spreading pests, contamination or diseases into the country of import.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Plant Quarantine Order, 2003</strong></p>
<ul style="list-style-type: square;">
<li>It ensures the <strong>import of pest and fungus free agricultural commodities in</strong> the country which <strong>is or may be destructive to crops.</strong></li>
<li>Plant quarantine is a <strong>technique that ensures disease- and pest-free plants.</strong><br />
<ul style="list-style-type: circle;">
<li>During the process, a <strong>plant is isolated</strong> while tests are performed to detect the presence of a problem</li>
</ul>
</li>
</ul>
</div>
<p><a href="https://pib.gov.in/PressReleseDetail.aspx?PRID=1590631" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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		'article_id' => (int) 3533,
		'category_id' => (int) 21,
		'title' => 'NBFC Liquidity Norms',
		'description' => '<p>The <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener"><strong>Reserve Bank of India (RBI)</strong></a> has introduced <strong>&lsquo;liquidity management framework&rsquo;</strong> for <a href="/daily-updates/daily-news-editorials/A%20nuanced%20understanding%20of%20the%20NBFC%20sector" target="_blank" rel="noopener"><strong>Non-Banking Financial Companies (NBFCs).</strong></a></p>
<ul style="list-style-type: square;">
<li>The RBI move has come following <strong>liquidity crunch</strong> among some NBFCs in meeting their recent repayment obligations after the collapse of the Infrastructure Leasing and Financial Services (IL&amp;FS) group.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Liquidity Coverage Ratio</strong><br />
<ul style="list-style-type: circle;">
<li>All non-deposit taking NBFCs (NBFC-NDs) with asset size of Rs 10,000 crore and above and all deposit-taking NBFCs have to maintain a liquidity buffer in terms of Liquidity Coverage Ratio (LCR). <br />
<ul style="list-style-type: disc;">
<li>However <strong>Type I - NBFC-ND</strong> entities are exempt from the applicability of LCR norms.</li>
<li>Type I - NBFC-ND entities are those which do not accept public funds and do not have customer interface and do not intend to engage in such activities.</li>
</ul>
</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Note</strong></p>
<ul style="list-style-type: square;">
<li>LCR refers to the<strong> proportion of highly liquid assets held by companies</strong> to ensure their ongoing ability to meet short-term obligations.</li>
<li>It will <strong>promote resilience of NBFCs to potential liquidity disruptions by</strong> ensuring that they have sufficient <strong>High Quality Liquid Asset (HQLA)</strong> to survive any acute liquidity stress scenario lasting for 30 days.</li>
<li><strong>HQLAs</strong> mean liquid assets that can be readily sold or immediately converted into cash at little or no loss of value, or used as collateral to obtain funds in a range of stress scenarios.</li>
</ul>
</div>
<ul style="list-style-type: circle;">
<li>The LCR requirement will be <strong>binding on NBFCs from 1<sup>st</sup> December, 2020</strong> with the minimum HQLAs to be held being 50% of the LCR, progressively reaching up to the level of 100% by 1st December, 2024.</li>
<li><strong>Assets to be included as HQLA</strong> include cash, government securities and marketable securities issued or guaranteed by foreign sovereigns. These assets should be free of any financial liability.</li>
<li><strong>Significance:</strong> The presence of liquid reserve will prevent a NBFC from going into a default loss if some inflows get delayed.</li>
</ul>
<ul style="list-style-type: square;">
<li>NBFCs should <strong>adopt liquidity risk monitoring tools</strong> and metrics in order to capture strains in liquidity position.</li>
</ul>
<p><a href="https://indianexpress.com/article/business/banking-and-finance/nbfcs-asked-to-maintain-liquidity-buffer-minimum-stock-of-hqlas-to-be-held-fixed-6103253/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 3335,
		'category_id' => (int) 21,
		'title' => 'Global Competitiveness Index 4.0: WEF',
		'description' => '<p>The <a href="/daily-updates/daily-news-analysis/wef-india-economic-summit" target="_blank" rel="noopener"><strong>World Economic Forum (WEF)</strong></a> has released the 2019 edition of the Global Competitiveness Report which features the Global Competitiveness Index 4.0 (GCI 4.0).<a href="http://www.drishtiias.com/images/uploads/1570706132_image5.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1570706132_image5.jpg" style="float: right;" width="220" height="434" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li>The World Economic Forum introduced the <strong>new Global Competitiveness Index 4.0 in 2018.</strong> GCI 4.0 provides a detailed map of the factors and attributes that drive productivity, growth and human development in the era of the <strong>Fourth Industrial Revolution.</strong><br />
<ul style="list-style-type: circle;">
<li>The <strong>GCI 4.0</strong> covers <strong>141 economies,</strong> which account for <strong>99% of the world&rsquo;s GDP.</strong></li>
</ul>
</li>
<li>The GCI 4.0 of 2019 reveal that, on average, most economies continue to be <strong>far from the competitiveness &ldquo;frontier&rdquo;</strong>&mdash;the aggregate ideal across all factors of competitiveness. <br />
<ul style="list-style-type: circle;">
<li>A country&rsquo;s performance on the overall GCI is reported as a <strong>&lsquo;progress score&rsquo; on a 0-to-100 scale,</strong> where <strong>100 represents the &lsquo;frontier&rsquo;,</strong> an ideal state where an issue ceases to be a constraint to productivity growth.</li>
</ul>
</li>
<li>This edition of the report focuses on building shared prosperity (addressing inequality) and managing the transition to a sustainable economy (addressing environmental issues) along with competitiveness and growth.</li>
<li>The report is based on <strong>12 set of factors (pillars) that determine productivity.</strong> These are: Institutions; Infrastructure; ICT adoption; Macroeconomic stability; Health; Skills; Product market; Labour market; Financial system; Market size; Business dynamism; and Innovation capability.</li>
<li>The index has been <strong>an annual edition since 1979.</strong></li>
</ul>
<h3>Key Findings</h3>
<ul style="list-style-type: square;">
<li>India has moved down <strong>10 places to the rank of 68<sup>th</sup></strong> compared to the <strong>58<sup>th</sup> rank of 2018</strong> primarily because of <strong>faster improvements of several countries</strong> previously ranked lower.</li>
<li><strong>Positives for India:</strong><br />
<ul style="list-style-type: circle;">
<li>India ranks high on <strong>macroeconomic stability (90, 43<sup>rd</sup>)</strong> and <strong>market size (93.7, 3<sup>rd</sup>),</strong></li>
<li>India performs well when it comes to <strong>innovation (50.9, 35<sup>th</sup>),</strong> well ahead of most emerging economies and on par with several advanced economies.</li>
<li>Its <strong>financial sector (69.5, 40<sup>th</sup>)</strong> is relatively deep and stable.</li>
</ul>
</li>
<li><strong>Challenges for India:</strong><br />
<ul style="list-style-type: circle;">
<li>India ranks beyond 100<sup>th</sup> on five pillars and features in the top 50 of just four pillars.</li>
<li>Major shortcomings in some of the basic enablers of competitiveness, <strong>like ICT adoption is limited (31.1, 120<sup>th</sup>)</strong> but has improved sharply (+8 since the 2017 edition).</li>
<li><strong>Health conditions</strong> remain poor, as reflected in low healthy life expectancy (59.4 years, 109<sup>th</sup>), which is one of the shortest outside Africa and significantly below the South Asian average.</li>
<li><strong>Weak banking system</strong> (60.4, 89<sup>th</sup>).</li>
<li>India must <strong>also grow its skills base</strong> (50.5, 107<sup>th</sup>).</li>
<li><strong>Product market efficiency</strong> (50.4, 101<sup>st</sup>) is undermined by a <strong>lack of trade openness</strong> (43.9, 131<sup>st</sup>).</li>
<li>The labour market is characterized by a <strong>lack of worker rights&rsquo; protections</strong>, insufficiently developed active labour market policies and critically low participation of women (ratio of female workers to male workers of 0.26, 128<sup>th</sup>)</li>
</ul>
</li>
<li>In South Asia, <strong>Sri Lanka is the most improved country in the region at 84<sup>th</sup>,</strong> Bangladesh (105<sup>th</sup>), Nepal (108<sup>th</sup>) and Pakistan (110<sup>th</sup>).</li>
<li><strong>China (28<sup>th</sup>)</strong> is the<strong> best performer</strong> among the<strong> BRICS</strong> countries.<br />
<ul style="list-style-type: circle;">
<li>The <strong>Russian Federation</strong> ranks <strong>43<sup>rd</sup>, South Africa</strong> is <strong>60<sup>th</sup>, India</strong> is <strong>68<sup>th</sup> and Brazil</strong> is ranked <strong>71<sup>st</sup>.</strong></li>
</ul>
</li>
<li><strong>Singapore</strong> has become the <strong>world's most competitive economy in 2019,</strong> pushing the <strong>US to second</strong> place.<br />
<ul style="list-style-type: circle;">
<li><strong>Hong Kong Special Administrative Region (SAR)</strong> is ranked <strong>3<sup>rd</sup>, the Netherlands</strong> is <strong>4<sup>th</sup> </strong>and<strong> Switzerland</strong> is ranked <strong>5<sup>th</sup></strong> in the index.</li>
</ul>
</li>
<li><strong>Vietnam (67<sup>th</sup>)</strong> registered the highest improvement across the globe.</li>
</ul>
<p><a href="https://economictimes.indiatimes.com/news/economy/indicators/india-slips-10-places-on-global-competitiveness-index-singapore-on-top/articleshow/71498559.cms" target="_blank" rel="noopener"><strong>Source: ET</strong></a></p>',
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		'article_id' => (int) 2856,
		'category_id' => (int) 21,
		'title' => 'Injeti Srinivas Committee Report on CSR',
		'description' => '<p>The committee chaired by <strong>Injeti Srinivas,</strong> secretary, corporate affairs ministry, has submitted its <strong>recommendations on Corporate Social Responsibility (CSR)</strong> to the Minister of Corporate Affairs (MCA).</p>
<div class="border-bg">
<p><strong>Corporate Social Responsibility (CSR)</strong></p>
<ul style="list-style-type: square;">
<li>The term "Corporate Social Responsibility" in general can be referred to as <strong>corporate initiative to assess and take responsibility for the company's effects on the environment</strong> and impact on social welfare.</li>
<li>In India, the concept of CSR is governed by <strong>clause 135 of the Companies Act, 2013</strong>.</li>
<li>India is the <strong>first country in the world to mandate CSR spending</strong> along with a framework to identify potential CSR activities.</li>
<li>The CSR provisions within the Act is <strong>applicable</strong> to companies with <strong>an annual turnover of 1,000 crore and more,</strong> or a <strong>net worth of Rs. 500 crore and more, or a net profit of Rs. 5 crore and more</strong>.</li>
<li>The Act requires companies to setup a CSR committee which shall recommend a Corporate Social Responsibility Policy to the Board of Directors and also monitor the same from time to time.</li>
<li>The Act encourages <strong>companies to spend 2% of their average net profit in the previous three years</strong> on CSR activities.</li>
<li>The indicative activities, which can be undertaken by a company under CSR, have been specified under<strong> Schedule VII</strong> of the Act. The activities include:<br />
<ul style="list-style-type: circle;">
<li>Eradicating extreme hunger and poverty,</li>
<li>Promotion of education, gender equality and empowering women,</li>
<li>Combating Human Immunodeficiency Virus, Acquired Immune Deficiency Syndrome and other diseases,</li>
<li>Ensuring environmental sustainability;</li>
<li>Contribution to the <strong>Prime Minister's National Relief Fund</strong> or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women etc.</li>
</ul>
</li>
</ul>
</div>
<h3>Recommendations</h3>
<ul style="list-style-type: square;">
<li>The <strong>expenses towards CSR should be eligible for deduction</strong> in the computation of taxable income.</li>
<li>A clarification may be issued that for newly incorporated companies, the CSR obligation under Section 135 of the Companies Act shall lie only after they have been in existence for three years.</li>
<li>A provision to <strong>carry forward unspent CSR balance for three to five years</strong>.<br />
<ul style="list-style-type: circle;">
<li>CSR should not be used as a &ldquo;means of resource-gap funding for government schemes&rdquo;.</li>
<li><a href="/daily-updates/daily-news-analysis/companies-amendment-bill-2019" target="_blank" rel="noopener">The Companies (Amendment) Act, 2019</a> provides that the CSR expenditure which remains unspent in three years would be transferred to any fund specified in Schedule VII of the Companies Act such as the Swachh Bharat Kosh, the Clean Ganga Fund, and the Prime Minister&rsquo;s Relief Fund.</li>
<li>The committee report said that the central government funds should be discontinued as CSR spend, and instead a <strong>special designated fund</strong> should be created for transfer of <strong>unspent CSR money beyond three to five years</strong>.</li>
</ul>
</li>
<li><strong>Aligning Schedule VII</strong> of the Companies Act with the <a href="/loksabha-rajyasabha-discussions/in-depth-indias-sustainable-development-goals" target="_blank" rel="noopener">United Nations Sustainable Development Goals</a>.</li>
<li>The companies having CSR-prescribed amount below ₹50 lakh may be exempted from constituting a CSR Committee.</li>
<li>The <strong>violation of CSR compliance may be made a civil offence</strong> and shifted to the penalty regime. <br />
<ul style="list-style-type: circle;">
<li>This is a departure from the recent policy change which had provided for a three-year jail term for violating CSR norms.</li>
</ul>
</li>
<li>Introducing impact assessment studies for CSR obligations of ₹5 crore or more.</li>
<li>CSR spending has to be a &ldquo;board-driven process to provide innovative technology-based solutions for social problems&rdquo; and that the board has to assess the credibility of an <strong>implementation agency,</strong> which have to be <strong>registered with the MCA</strong> to carry out CSR activities.</li>
<li><strong>Developing a CSR exchange portal to connect contributors,</strong> beneficiaries and agencies, allowing CSR in social benefit bonds and promoting social impact companies.</li>
</ul>
<p><a href="https://www.thehindu.com/business/csr-expenditure-may-be-made-tax-deductible-says-committee/article29086517.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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