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Promoting Digital Banking

Why in News Recently, the Union Minister of State for Finance has stated in the Rajya Sabha that the Government has taken a number of steps to...

28 Jul 2021 Mobilization of Resources
30 Years of Economic Liberalisation

Why in News Recently, on the 30th anniversary of the economic liberalisation reforms, former Prime Minister of India, Manmohan Singh, raised...

26 Jul 2021 Mobilization of Resources
PLI Scheme For Specialty Steel

Why in News Recently, the Union Cabinet approved the Production-Linked Incentive (PLI) scheme (Central Sector Scheme) for manufacturing Speciality...

24 Jul 2021 Mobilization of Resources
Investment Climate in India

Why in News Recently, the US State Department released a report titled '2021 Investment Climate Statements: India'. The report lauded the structural...

24 Jul 2021 Mobilization of Resources
Subsidy Scheme to Boost Merchant Ships

Why in News Recently, the Union Cabinet has approved a scheme for providing subsidy support to Indian Shipping companies in global tenders floated...

23 Jul 2021 Mobilization of Resources
Stand Up India Scheme

Why in News Recently, the Ministry of Finance has extended the Standup India Scheme up to the year 2025. Key Points Launch: It was launched...

21 Jul 2021 Mobilization of Resources
Growth Matters

This article is based on Growth matters but income levels matter more which was published in The Hindu on 14/07/2021. It talks about the challenges...

14 Jul 2021 Mobilization of Resources
India Industrial Land Bank

Why in News The India Industrial Land Bank (IILB), a GIS-based portal, has seen a 30% increase in page views each month since April 2021. Key...

12 Jul 2021 Mobilization of Resources
India's Covid-19 Emergency Response Package: Phase II

Why in News The Union Cabinet has recently approved a Rs. 23,123 crore package to boost emergency response and healthcare systems. It includes...

09 Jul 2021 Mobilization of Resources
Output Pact: OPEC+

Why in News Recently, the United Arab Emirates (UAE) pushed back against a plan by the Organization of the Petroleum Exporting Countries (OPEC+)...

06 Jul 2021 Mobilization of Resources
Economic Relief Package after Covid- Second Wave

Why in News Recently, the Ministry of Finance announced a slew of measures to provide relief to diverse sectors affected by the second wave of...

29 Jun 2021 Mobilization of Resources
International MSMEs Day

Why in News Every year, Micro, Small and Medium-sized Enterprises (MSMEs) Day is celebrated on 27th June to recognise the contribution of these...

28 Jun 2021 Mobilization of Resources
Reform Linked Borrowing

Why in News Indian states were able to borrow an extra Rs. 1.06 lakh crore in 2020-21 (FY21) due to the Reform Linked Borrowing window. This was...

24 Jun 2021 Mobilization of Resources
Development Financial Institutions

This article is based on “Why DFIs have regained relevance today” which was published in The Hindu Business line on 22/06/2021. It...

23 Jun 2021 Mobilization of Resources
Increase in Direct Tax Collections

Why in News India’s direct tax collections in the first two and a half months (April - June) of 2021-22 stand at nearly Rs. 1.86 lakh crore,...

23 Jun 2021 Mobilization of Resources
1991 Reforms & 2021 Crisis

This article is based on “From 1991, the lessons for the India of 2021” which was published in The Hindustan Times on 19/06/2021. It...

21 Jun 2021 Mobilization of Resources
Global Minimum Tax

This article is based on “Illusion of redistributive justice” which was published in The Indian Express on 15/06/2021. It talks about...

15 Jun 2021 Mobilization of Resources
El Salvador Adopts Bitcoin as Legal Tender

Why in News El Salvador, a small coastal country in Central America has become the first in the world to adopt Bitcoin, as legal tender. Legal...

11 Jun 2021 Mobilization of Resources
Saral Jeevan Bima: IRDAI

Why in News Saral Jeevan Bima, launched by IRDAI (Insurance Regulatory and Development Authority of India) in 2020, has become a popular term life...

09 Jun 2021 Mobilization of Resources
Importance of Blue Economy

This article is based on “After the pandemic, the centrality of the Blue Economy in recovery” which was published in The Hindustan Times...

08 Jun 2021 Mobilization of Resources

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		'title' => 'Promoting Digital Banking',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <strong>Union Minister of State for Finance</strong> has stated in the<a href="/daily-updates/daily-news-editorials/role-of-rajya-sabha" target="_blank" rel="noopener"><strong> Rajya Sabha</strong></a> that the Government has taken a <strong>number of steps to facilitate digital banking, doorstep banking services and digital lending platforms.</strong></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Digital Banking:</strong>
<ul style="list-style-type: circle;">
<li>It is the <strong>digitization (or moving online) of all the traditional banking activities and programs services</strong> that were historically only available to customers when physically inside of a bank branch.</li>
<li>This includes activities like Money Deposits, Withdrawals, and Transfers, Checking/Saving Account Management, Applying for Financial Products, Loan Management, Bill Pay, Account Services.</li>
</ul>
</li>
<li><strong>Challenges:</strong>
<ul style="list-style-type: circle;">
<li><strong>Internet access</strong> is not the only barrier to adoption of digital payments.</li>
<li><strong>Educating users as well as ensuring the security</strong> of their data is essential.</li>
</ul>
</li>
<li><strong>Initiatives Highlighted:</strong>
<ul style="list-style-type: circle;">
<li><strong>EASE Reforms Agenda:</strong> It was <strong>launched in January 2018 jointly by the government and PSBs.</strong>
<ul style="list-style-type: disc;">
<li>It was c<strong>ommissioned through Indian Banks&rsquo; Association and authored by Boston Consulting Group.</strong></li>
<li>EASE Agenda is <strong>aimed at institutionalizing CLEAN and SMART banking.</strong></li>
<li><strong>EASE Reforms Index:</strong> The Index <strong>measures performance of each PSB on 120+ objective metrics.</strong> The goal is to continue driving change by encouraging healthy competition among PSBs.</li>
<li><strong>EASE 1.0:</strong> The EASE 1.0 report showed significant improvement in PSB performance in resolution of <a href="/daily-updates/daily-news-editorials/solving-the-npa-crisis-in-india" target="_blank" rel="noopener"><strong>Non Performing Assets</strong></a> (NPAs) transparently.</li>
<li><strong>EASE 2.0:</strong> EASE 2.0 builds on the foundation of EASE 1.0 and introduced new reform Action Points across six themes to make reforms journey irreversible, strengthen processes and systems, and drive outcomes.
<ul style="list-style-type: disc;">
<li>The six themes of EASE 2.0 are: Responsible Banking; Customer Responsiveness; Credit Off-take, PSBs as UdyamiMitra (SIDBI portal for credit management of MSMEs); Financial Inclusion &amp; Digitalisation; and Governance and Human Resource (HR).</li>
</ul>
</li>
<li><strong>Ease 3.0:</strong> It seeks to enhance ease of banking in all customer experiences, using technology viz.<strong> Dial-a-loan, Partnerships with FinTechs and E-commerce companies, [email protected], Tech-enabled agriculture lending, EASE Banking Outlets etc.</strong></li>
<li><strong>Ease 4.0:</strong> State-run banks will focus on <strong>co-lending with non-banking firms, digital agriculture financing, synergies and technological resilience for 24x7 banking</strong> as part of their reforms agenda for this fiscal, Ease 4.0.</li>
</ul>
</li>
<li><strong>PSBloansin59 minutes.com:</strong>
<ul style="list-style-type: disc;">
<li>Initiation of digital lending has been made contactless through <strong>PSBloansin59 minutes.com</strong>, using triangulation of <strong>credit bureau</strong>, <strong>income-tax and</strong> <a href="/to-the-points/paper3/goods-and-services-tax-gst-1" target="_blank" rel="noopener"><strong>goods and services tax (GST)</strong></a> data, to provide online in principle approval for <a href="/to-the-points/paper3/micro-small-and-medium-enterprises-msme" target="_blank" rel="noopener"><strong>Micro, Small and Medium Enterprises (MSME)</strong></a> loans.</li>
</ul>
</li>
<li><strong>Trade Receivables Discounting System (TReDS) Platform:</strong>
<ul style="list-style-type: disc;">
<li><strong>Online bill discounting for MSMEs</strong> has been enabled on a competitive basis <strong>through Public Sector Banks (PSBs) onboarding onto the <a href="/daily-updates/daily-news-analysis/support-and-outreach-initiative-for-msme-sector" target="_blank" rel="noopener">TReDS platform</a></strong> and the proportion of online discounted bills has grown rapidly.
<ul style="list-style-type: disc;">
<li><strong>Bill Discounting</strong> is a trade-related activity in which a company's unpaid invoices which are due to be paid at a future date are sold to a financier (a bank or another financial institution).</li>
</ul>
</li>
</ul>
</li>
<li><strong>Jeevan Pramaan' Initiative:</strong>
<ul style="list-style-type: disc;">
<li>This<strong> initiative for pensioners</strong> has enabled senior citizen pensioners the facility to update their annual life certificate online.</li>
</ul>
</li>
<li><strong>Doorstep Banking Services:</strong>
<ul style="list-style-type: disc;">
<li><strong>PSB Alliance</strong>, an initiative of all<strong> PSBs and Indian Banks' Association</strong>, has launched <strong>doorstep banking services for all customers.</strong></li>
<li>Through &lsquo;Door Step Banking&rsquo;, customers can avail major Banking transaction services at their Doorstep.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Current Status:</strong>
<ul style="list-style-type: circle;">
<li>Now, nearly <strong>72% of financial transactions of PSBs</strong> are done through digital channels, with doubling of customers active on digital channels from 3.4 crore in FY 2019-20 to 7.6 crore in FY 2020-21.</li>
<li>The share of <strong>financial transactions undertaken through home and mobile channels</strong> has increased from <strong>29% in FY 2018-19 to 76% in FY 2020-21.</strong></li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>Digital is the only way forward. Banks will have to hitch to this bandwagon by adapting new age technologies like <strong><a href="/daily-updates/daily-news-analysis/blockchain-technology-in-voting" target="_blank" rel="noopener">Blockchain</a>, <a href="/loksabha-rajyasabha-discussions/in-depth-artificial-intelligence" target="_blank" rel="noopener">Artificial Intelligence</a>, Machine Learning, and <a href="/daily-updates/daily-news-editorials/india-must-get-on-the-iot-highway-fast#:~:text=Internet%20Of%20Things%20(IoT)%20is%20a%20computing%20concept%20that%20describes,than%20the%20object%20by%20itself." target="_blank" rel="noopener">Internet of Things (IOT)</a>.</strong></li>
<li>Cross-selling through Intelligent Analytics driven on the strength of big data and curated product offerings for different customer segments is what will distinguish banking offerings.</li>
</ul>
<p><a href="https://pib.gov.in/PressReleseDetailm.aspx?PRID=1739651" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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		'article_id' => (int) 8984,
		'category_id' => (int) 21,
		'title' => '30 Years of Economic Liberalisation',
		'description' => '<h3>Why in News</h3>
<p>Recently, on the 30<sup>th</sup> anniversary of the <a href="/daily-updates/daily-news-editorials/1991-reforms-2021-crisis" target="_blank" rel="noopener"><strong>economic liberalisation reforms</strong></a>, former Prime Minister of India, Manmohan Singh, raised concerns over the macro-economic stability of the country.</p>
<ul style="list-style-type: square;">
<li>According to him, the current <a href="/daily-updates/daily-news-analysis/the-economic-impact-of-coronavirus" target="_blank" rel="noopener"><strong>economic crisis triggered by the Covid-19 pandemic</strong></a> is more challenging than during the 1991 economic crisis and the nation would need to recalibrate its priorities to ensure a dignified life for all Indians.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>1991 Crisis &amp; Reforms: </strong><br />
<ul style="list-style-type: circle;">
<li><strong>1991 Crisis:</strong> In 1990-91, India faced a severe<strong><a href="/daily-updates/daily-news-analysis/strong-balance-of-payments" target="_blank" rel="noopener"> Balance of Payments (BOP)</a> crisis</strong>, where its foreign exchange reserves were just adequate to finance 15 days of imports. There were many factors that led to the BOP crisis:<br />
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-analysis/increased-fiscal-deficit-1#:~:text=Fiscal%20Deficit%20Target%20Fixed%20for,Gross%20Domestic%20Product%20(GDP)." target="_blank" rel="noopener"><strong>Fiscal Deficit</strong></a>: The fiscal deficit during 1990-91 was around 8.4% of GDP.</li>
<li><strong>Gulf War I:</strong> In 1990-91, the situation was aggravated by the rise in the price of oil due to Iraq&rsquo;s invasion of Kuwait.</li>
<li><strong>Rise in Prices:</strong> The inflation rate increased from 6.7% to 16.7% due to a rapid increase in money supply and the country&rsquo;s economic position became worse.</li>
</ul>
</li>
<li><strong>Nature and Scope of 1991 Reforms:</strong> In order to get out of the macro-economic crisis in 1991, India launched a New Economic Policy, which was based on LPG or <strong>Liberalisation, Privatisation and Globalisation model.</strong> <br />
<ul style="list-style-type: disc;">
<li>Then Finance Minister, Manmohan Singh, was the prime architect of the historic 1991 liberalisation.</li>
<li>The broad range of reforms under the LPG model included:<br />
<ul style="list-style-type: disc;">
<li><strong>Liberalising Industrial Policy:</strong> Abolition of industrial license permit raj, Reduction in import tariffs, etc.</li>
<li><strong>Beginning of Privatisation:</strong> Deregulation of markets, Banking reforms, etc.</li>
<li><strong>Globalisation:</strong> Exchange rate correction, liberalising foreign direct investment and trade policies, Removal of mandatory convertibility cause, etc.</li>
</ul>
</li>
<li>These reforms are credited and applauded for the high economic growth seen from 1991 to 2011 and substantial reduction of poverty from 2005 to 2015.</li>
</ul>
</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1627299172_image8.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1627299172_image8.png" style="display: block; margin-left: auto; margin-right: auto;" width="600" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li><strong>2021 Crisis:</strong>
<ul style="list-style-type: circle;">
<li>The <a href="/loksabha-rajyasabha-discussions/the-big-picture-economic-recovery-for-india" target="_blank" rel="noopener"><strong>World Economic Outlook Report 2021</strong></a>, states that the Indian economy is expected to grow by 12.5% in 2021 and 6.9% in 2022.<br />
<ul style="list-style-type: disc;">
<li>However, the pandemic has massive unemployment in the informal sector and poverty is increasing after decades of decline.</li>
</ul>
</li>
<li>The<strong> social sectors of health and education have lagged behind</strong> and not kept pace with our economic progress. <br />
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-editorials/covid-19-and-food-security" target="_blank" rel="noopener"><strong>Too many lives and livelihoods</strong> </a>have been lost that should not have been, during the pandemic.</li>
</ul>
</li>
<li>Inspector Raj is set to make a comeback through the <a href="/daily-updates/daily-news-analysis/proposal-to-ban-flash-sales-on-e-commerce-sites" target="_blank" rel="noopener"><strong>policy for e-commerce</strong></a> entities.</li>
<li>India is back to the old habits of borrowing excessively or<a href="/daily-updates/daily-news-editorials/rbi-surplus-transfer-to-the-government" target="_blank" rel="noopener"><strong> extracting money (in form of dividends) from the RBI</strong></a> to finance the fiscal deficit.</li>
<li>The <a href="/daily-updates/daily-news-analysis/indian-migrants-and-challenges" target="_blank" rel="noopener"><strong>migrant labour crisis</strong> </a>has laid bare the gaps in the growth model.</li>
<li>India foreign trade policy is again suspecting trade liberalisation, as India has already decided to opt-out of the 16-nation <a href="/daily-updates/daily-news-editorials/rcep-india#:~:text=Recently%2C%20the%20Regional%20Comprehensive%20Economic,the%20world's%20largest%20trading%20blocs." target="_blank" rel="noopener"><strong>Regional Comprehensive Economic Partnership (RCEP)</strong> </a>trade deal.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<p>The 1991 reforms helped the economy stave off a crisis and then bloom. It is time to outline a credible new reform agenda that will not just bring GDP back to pre-crisis levels, but also ensure growth rates higher than it had when it entered the pandemic.</p>
<p><a href="https://indianexpress.com/article/india/road-ahead-more-daunting-need-to-recalibrate-priorities-manmohan-singh-7419547/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 8959,
		'category_id' => (int) 21,
		'title' => 'PLI Scheme For Specialty Steel',
		'description' => '<h3>Why in News</h3>
<p>Recently, the Union Cabinet approved the <a href="/daily-updates/daily-news-analysis/pli-scheme-for-food-processing-industry" target="_blank" rel="noopener"><strong>Production-Linked Incentive (PLI)</strong></a> scheme (<a href="/daily-updates/daily-news-analysis/proposal-to-hike-monthly-pensions" target="_blank" rel="noopener"><strong>Central Sector Scheme</strong></a>) for manufacturing<strong> Speciality Steel (SS)</strong> with a budgetary outlay of <strong>Rs 6,322 crore</strong> over a period of five years from <strong>2023-24.</strong></p>
<div class="border-bg">
<p><strong>Speciality Steel</strong></p>
<ul style="list-style-type: square;">
<li>It <strong>is value-added steel,</strong> which is made by processing normal finished steel.</li>
<li>It is done by converting normal finished steel into high value-added steel by way of <strong>coating, plating and heat treatment.</strong></li>
<li>Apart from the automobile sector and specialised capital goods, they can be used in various strategic applications such as <strong>defence, space, power etc.</strong></li>
<li>SS are<strong> categorized in various types</strong> such as, coated/plated steel products, high strength/wear resistant steel, speciality rails, alloy steel products and steel wires, electrical steel etc.</li>
</ul>
</div>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>PLI Scheme:</strong><br />
<ul style="list-style-type: circle;">
<li>In order to<strong> boost domestic manufacturing and cut down on import bills,</strong> the central government<strong> in March 2020 introduced a PLI scheme</strong> that aims to give companies incentives on incremental sales from products manufactured in domestic units.</li>
<li>The scheme<strong> invites foreign companies to set units in India,</strong> however, it also aims to <strong>encourage local companies</strong> to set up or expand existing manufacturing units.</li>
<li>The Scheme <strong>has also been approved for sectors such as</strong> automobiles, <strong><a href="/daily-updates/daily-news-analysis/pli-scheme-for-it-hardware-and-pharmaceuticals" target="_blank" rel="noopener">pharmaceuticals, IT hardware including laptops</a></strong>, <a href="/daily-updates/daily-news-analysis/schemes-for-electronic-manufacturing" target="_blank" rel="noopener"><strong>mobile phones &amp; telecom equipment</strong></a>, <a href="/daily-updates/daily-news-analysis/pli-scheme-for-ten-more-sectors" target="_blank" rel="noopener"><strong>white goods</strong></a>, <a href="/daily-updates/daily-news-analysis/national-programme-on-advanced-chemistry-cell-battery-storage" target="_blank" rel="noopener"><strong>chemical cells</strong></a>,<a href="/daily-updates/daily-news-analysis/pli-scheme-for-food-processing-industry" target="_blank" rel="noopener"><strong> food processing</strong></a> and textiles, etc.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1627107293_image1.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1627107293_image1.png" style="display: block; margin-left: auto; margin-right: auto;" width="350" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li><strong>PLI for Speciality Steel:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Aim:</strong> To <strong>help India's SS production reach 42 Million Tonnes (MT) by 2026-27</strong> from 18 MT today.</li>
<li><strong>Categories:</strong> There are five <strong>categories of specialty steel which have been chosen in the PLI Scheme:</strong><br />
<ul style="list-style-type: disc;">
<li>Coated/plated steel products.</li>
<li>High strength/wear resistant steel.</li>
<li>Speciality rails.</li>
<li>Alloy steel products and steel wires.</li>
<li>Electrical steel.</li>
</ul>
</li>
<li><strong>Slabs:</strong> There are<strong> three slabs of PLI incentives,</strong> the lowest being <strong>4%</strong> and highest being <strong>12%.</strong></li>
<li><strong>Beneficiaries:</strong> Both<strong> big players</strong> i.e. integrated steel plants and to the <strong>smaller players</strong> (secondary steel players).<br />
<ul style="list-style-type: disc;">
<li>Any<strong> company registered in India,</strong> engaged in manufacturing of the identified &lsquo;specialty steel&rsquo; grades will be <strong>eligible to participate in the scheme.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Reason for choosing speciality Steel:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>To Increase Production:</strong><br />
<ul style="list-style-type: disc;">
<li>SS has been chosen as the target segment by the government because <strong>out of a production of 102 million tonnes of steel</strong> in 2020-21, <strong>only 18 million tonnes of value-added steel/speciality steel</strong> were produced in the country.</li>
</ul>
</li>
<li><strong>To Reduce Imports:</strong><br />
<ul style="list-style-type: disc;">
<li>Most of the<strong> imports into India are in the value-added and speciality segment.</strong> The PLI scheme<strong> will boost manufacturing capacities</strong> by Indian mills in this segment and MSMEs will be able to source from them directly.<br />
<ul style="list-style-type: disc;">
<li>Out of<strong> 6.7 million tonnes of imports of steel in</strong> 2020-21, approximately <strong>4 million tonnes were of speciality steel,</strong> resulting in <a href="/daily-updates/daily-news-analysis/forex-reserves-7" target="_blank" rel="noopener"><strong>Foreign Exchange (Forex)</strong> </a>outgo of approximately <strong>Rs 30,000 crore.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Sector in Uptrend:</strong><br />
<ul style="list-style-type: disc;">
<li>The steel sector<strong> is on an uptrend</strong> and major integrated <strong>producers have lined up major expansion plans.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Significance:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Promote Local Manufacturing:</strong><br />
<ul style="list-style-type: disc;">
<li>It will ensure finished steel be made in India only, thereby ensuring that the scheme <strong>promotes end-to-end manufacturing</strong> within the country.</li>
<li>It will help <strong>create global manufacturing champions</strong> in India and bring the country <strong>on a par with global steel making majors</strong> such as South Korea and Japan.</li>
</ul>
</li>
<li><strong>Employment Generation:</strong><br />
<ul style="list-style-type: disc;">
<li>It will generate employment for about <strong>5 lakh people,</strong> including direct employment for <strong>68,000 people.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Expected Outcome:</strong><br />
<ul style="list-style-type: circle;">
<li>It is expected to<strong> bring investments worth about Rs 40,000 crore</strong> and result in a <strong>capacity addition of 25 million tonnes (MT) for speciality steel.</strong></li>
<li>The <strong>export of SS would become about 5.5 MT</strong> against the<strong> current 1.7 MT</strong> earning a Forex of Rs 33,000 crore.</li>
</ul>
</li>
<li><strong>Initiatives related to Steel:</strong><br />
<ul style="list-style-type: circle;">
<li><strong><a href="/daily-updates/daily-news-analysis/mission-purvodaya-accelerated-development-of-steel-sector" target="_blank" rel="noopener">Mission Purvodaya</a>:</strong> It was launched in 2020 for the accelerated development of eastern India through the establishment of an integrated steel hub in Kolkata, West Bengal.</li>
<li><strong><a href="/to-the-points/paper3/iron-and-steel-industry-in-india" target="_blank" rel="noopener">National Steel Policy 2017</a>:</strong> To attain Self-sufficiency in steel production by providing policy support &amp; guidance to private manufacturers, MSME steel producers, it was launched in 2017.</li>
<li><strong>Adoption of the Fourth Industrial Revolution (<a href="/loksabha-rajyasabha-discussions/in-depth-industrial-revolution-4-0#:~:text=It%20is%20an%20initiative%20of,brought%20about%20by%20smart%20technologies." target="_blank" rel="noopener">Industry 4.0</a>):</strong> It will improve manufacturing processes, material usage, energy efficiency, plant and worker productivity, supply chain and product life-cycle.</li>
<li><strong>Steel Research and Technology Mission of India:</strong> It provides for the grant of financial assistance to various institutions including <strong><a href="/important-institutions/drishti-specials-important-institutions-national-institutions/council-of-scientific-and-industrial-research" target="_blank" rel="noopener">Council of Scientific and Industrial Research</a> (CSIR)</strong> laboratories and academic institutions for carrying out research in the iron and steel sector including environmental issues like utilisation of wastes, improvement in energy efficiency and reduction in <strong><a href="/infographics/info-paper3/greenhouse-gas-emission" target="_blank" rel="noopener">greenhouse gases</a> (GHG)</strong> emission.</li>
</ul>
</li>
</ul>
<p><a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1737722" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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		'article_id' => (int) 8958,
		'category_id' => (int) 21,
		'title' => 'Investment Climate in India',
		'description' => '<h3>Why in News</h3>
<p>Recently, the<strong> US State Department released a report</strong> titled '2021 Investment Climate Statements: India'. The report <strong>lauded the structural economic reforms</strong> carried by the Government of India, in the wake of economic slowdown and<a href="/daily-updates/daily-news-editorials/comprehensive-action-plan-for-covid-19" target="_blank" rel="noopener"><strong> Covid-19 pandemic.</strong></a></p>
<ul style="list-style-type: square;">
<li>However, the report asserts that India <strong>remains a challenging place to do business.</strong></li>
<li>Earlier, the <strong>UK India Business Council (UKIBC)</strong> emphasized that some of the reforms under the <a href="/daily-updates/daily-news-analysis/atmanirbhar-bharat-concerns" target="_blank" rel="noopener"><strong>Atmanirbhar Bharat programme could have negative consequences</strong></a> for the UK and all multinational companies.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Recent Economic Reforms:</strong>
<ul style="list-style-type: circle;">
<li><strong>Privatization:</strong> In February 2021, the Government of India announced plans to raise $2.4 billion through an <a href="/daily-updates/daily-news-analysis/government-s-disinvestment-plans" target="_blank" rel="noopener"><strong>ambitious privatization program</strong></a> that would dramatically reduce the government&rsquo;s role in the economy.</li>
<li><strong>FDI Liberalization:</strong> In August 2019, the government announced a <a href="/daily-updates/daily-news-analysis/revised-fdi-norms" target="_blank" rel="noopener"><strong>new package of liberalization measures</strong> </a>and brought a number of sectors including coal mining and contract manufacturing under the<a href="/daily-updates/daily-news-analysis/new-fdi-rule" target="_blank" rel="noopener"><strong> automatic route.</strong></a><br />
<ul style="list-style-type: disc;">
<li>In March 2021, Parliament further liberalized India&rsquo;s insurance sector, increasing the <a href="/daily-updates/daily-news-analysis/new-rules-for-increased-fdi-in-insurance-sector" target="_blank" rel="noopener"><strong>foreign direct investment (FDI) limits to 74% from 49%.</strong></a></li>
</ul>
</li>
<li><strong>Atmanirbhar Bharat Abhiyan:</strong> In order to combat economic slowdown pertaining to Covid-19, the Government of India launched <a href="/daily-updates/daily-news-analysis/atmanirbhar-bharat-and-economic-stimulus" target="_blank" rel="noopener"><strong>Atmanirbhar Bharat Abhiyan.</strong></a><br />
<ul style="list-style-type: disc;">
<li>This programme envisages extensive social welfare and economic stimulus programs and increased spending on infrastructure and public health.</li>
<li>Further, it aims towards cutting down import dependence by focusing on substitution while improving safety compliance and quality goods to gain global market share.</li>
</ul>
</li>
<li><strong>PLI Scheme:</strong> The government also adopted<a href="/daily-updates/daily-news-analysis/expansion-of-production-linked-incentive-scheme" target="_blank" rel="noopener"><strong> production linked incentives</strong></a> to promote manufacturing in pharmaceuticals, automobiles, textiles, electronics, and other sectors.</li>
<li><strong>Insolvency and Bankruptcy Code:</strong> The introduction and implementation of the <a href="/loksabha-rajyasabha-discussions/in-depth-insolvency-and-bankruptcy-code-act" target="_blank" rel="noopener"><strong>Insolvency and Bankruptcy Code (IBC)</strong></a> in 2016 led to an overhaul of the previous framework on insolvency and paved the way for much-needed reforms.<br />
<ul style="list-style-type: disc;">
<li>Among the areas where India has improved the most in the <a href="/daily-updates/daily-news-analysis/ease-of-doing-business-2020" target="_blank" rel="noopener"><strong>World Bank&rsquo;s Ease of Doing Business Ranking</strong></a> the past three years has been under the resolving insolvency metric.</li>
</ul>
</li>
<li><strong>Matching Global Standards of Arbitration:</strong> The government of India passed <a href="/daily-updates/daily-news-analysis/ease-of-doing-business-2020" target="_blank" rel="noopener"><strong>Arbitration and Conciliation (Amendment) Act, 2021.</strong></a><br />
<ul style="list-style-type: disc;">
<li>The Act contains provisions to deal with domestic and international arbitration and defines the law for conducting conciliation proceedings.</li>
</ul>
</li>
<li><strong>Sovereign Wealth Funds:</strong> In 2016, the Indian government established the <a href="/daily-updates/daily-news-analysis/cabinet-approves-capital-infusion-into-niif" target="_blank" rel="noopener"><strong>National Infrastructure Investment Fund (NIIF)</strong></a>, touted as India&rsquo;s first sovereign wealth fund to promote investments in the infrastructure sector. <br />
<ul style="list-style-type: disc;">
<li>The government agreed to contribute $3 billion to the fund, while an additional $3 billion will be raised from the private sector.</li>
</ul>
</li>
<li><strong>Labour Code:</strong> In the budget 2021 the government announced that the <a href="/daily-updates/daily-news-analysis/labour-reforms-1" target="_blank" rel="noopener"><strong>four labour codes</strong> </a>shall be implemented in India with effect from 1<sup>st</sup> April 2021. <br />
<ul style="list-style-type: disc;">
<li>These labour codes envisage simplifying the country&rsquo;s archaic labour laws and give impetus to economic activity without compromising with the workers&rsquo; benefits.</li>
</ul>
</li>
<li><strong>Other Measures for Improving Ease of Doing Business:</strong> <br />
<ul style="list-style-type: disc;">
<li><strong><a href="/daily-updates/daily-news-analysis/invest-india-business-immunity-platform" target="_blank" rel="noopener">Invest India</a>:</strong> It is the official investment promotion and facilitation agency which works with investors through their investment lifecycle to provide support with market entry strategies, industry analysis, partner search, and policy advocacy as required.</li>
<li><strong>PRAGATI Initiative:</strong> To fast-track the approval process, especially in the case of major projects, the government of India started the <a href="/daily-updates/daily-news-analysis/invest-india-business-immunity-platform" target="_blank" rel="noopener"><strong>Pro-Active Governance and Timely Implementation (PRAGATI initiative).</strong></a><br />
<ul style="list-style-type: disc;">
<li>It is a digital, multi-modal platform to speed the government&rsquo;s approval process.</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li><strong>Economic Policies Bothering Foregin Investors:</strong>
<ul style="list-style-type: circle;">
<li><strong>Controversial Decisions:</strong> Recently, the government took two controversial decisions i.e. <a href="/daily-updates/daily-news-analysis/article-370-and-35-a-revoked" target="_blank" rel="noopener"><strong>removal of special constitutional status from the state of Jammu and Kashmir (J&amp;K)</strong></a> and the passage of the <a href="/to-the-points/Paper2/citizenship-amendment-act-2019" target="_blank" rel="noopener"><strong>Citizenship Amendment Act (CAA), 2019.</strong></a> <br />
<ul style="list-style-type: disc;">
<li>However, India maintains that the CAA and scrapping of Article 370 was its internal matter and that &ldquo;no foreign party has any locus standi on issues pertaining to India&rsquo;s sovereignty.&rdquo;</li>
</ul>
</li>
<li><strong>New Protectionist Measures:</strong> Several sectors of the economy continue to retain equity limits for foreign capital as well as management and control restrictions, which deter investment.<br />
<ul style="list-style-type: disc;">
<li>For example, in 2016, India allowed up to <a href="/daily-updates/daily-news-analysis/100-fdi-in-air-india-for-nris" target="_blank" rel="noopener"><strong>100% FDI in domestic airlines</strong></a>, but the issue of substantial ownership and effective control (SOEC) rules that mandate majority control by Indian nationals have not yet been clarified.</li>
</ul>
</li>
<li><strong>Bilateral Investment Agreements and Taxation Treaties:</strong> India adopted a new <a href="/daily-updates/daily-news-editorials/model-bilateral-investment-treaty" target="_blank" rel="noopener"><strong>model Bilateral Investment Treaty (BIT)</strong></a> in December 2015, following several adverse rulings in international arbitration proceedings. <br />
<ul style="list-style-type: disc;">
<li>The new model BIT does not allow foreign investors to use investor-state dispute settlement methods, and instead requires foreign investors first to exhaust all local judicial and administrative remedies before entering international arbitration.</li>
</ul>
</li>
<li><strong>Procurement Rules that Limit Competitive Choices:</strong> <a href="/daily-updates/daily-news-analysis/restrictions-on-public-procurement" target="_blank" rel="noopener"><strong>Preferential Market Access (PMA) for government procurement</strong></a> has created substantial challenges for foreign firms operating in India. <br />
<ul style="list-style-type: disc;">
<li>State-owned &ldquo;Public Sector Undertakings&rdquo; and the government accord a 20% price preference to vendors utilizing more than 50% local content.</li>
</ul>
</li>
<li><strong>Intellectual Property Rights:</strong> India remained on the<a href="/daily-updates/daily-news-analysis/u-s-priority-watch-list-for-ipr" target="_blank" rel="noopener"><strong> Priority Watch List in the 2020 Special 301 Report</strong></a> due to concerns over weak intellectual property (IP) protection and enforcement.</li>
<li><strong>Corruption:</strong> India, with a score of 40, ranked 86 among 180 countries in <a href="/daily-updates/daily-news-analysis/corruption-perception-index-2020#:~:text=India%27s%20rank%20has%20slipped%20six,of%20180%20countries%20in%202019." target="_blank" rel="noopener"><strong>Transparency International&rsquo;s 2020 Corruption Perception Index.</strong></a></li>
<li><strong>Other Issues:</strong> There are other issues that restrict the expansion in bilateral trade.For example, <a href="/to-the-points/paper3/agriculture-export-policy-2018-1" target="_blank" rel="noopener"><strong>sanitary and phytosanitary measures</strong> </a>and Indian-specific standards not aligned with international standards.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>The Government of India should foster an attractive and reliable investment climate by reducing barriers to investment and minimizing bureaucratic hurdles for businesses.</li>
<li>The Governments of India and the other countries should cooperate in areas such as standards, trade facilitation, competition, and <a href="/daily-updates/daily-news-analysis/atmanirbhar-bharat-concerns" target="_blank" rel="noopener"><strong>anti-dumping</strong></a> practices.</li>
</ul>
<p><a href="https://indianexpress.com/article/world/us-says-india-remains-challenging-place-to-do-business-urges-to-minimise-bureaucratic-hurdles-7416922/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 8947,
		'category_id' => (int) 21,
		'title' => 'Subsidy Scheme to Boost Merchant Ships',
		'description' => '<h3>Why in News</h3>
<p>Recently, the Union Cabinet has approved<strong> a scheme for providing subsidy support to Indian Shipping companies in global tenders</strong> floated by Ministries and<strong><a href="/daily-updates/daily-news-analysis/department-of-public-enterprises" target="_blank" rel="noopener"> Central Public Sector Enterprises (CPSEs)</a> for import of government cargo.</strong></p>
<ul style="list-style-type: square;">
<li>The scheme <strong>provides a subsidy of Rs. 1,624 crore over five years.</strong></li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Highlights of the Scheme:</strong><br />
<ul style="list-style-type: circle;">
<li>The scheme envisages an<strong> increase in flagging</strong> and would link access to Indian cargo to investment in Indian ships.<br />
<ul style="list-style-type: disc;">
<li>Flagging in is the <strong>process of adding a vessel to the national registry</strong> and "flagging out" is the process of removing a vessel from a national registry.</li>
</ul>
</li>
<li>The subsidy support varies <strong>from 5% to 15%</strong> of the lowest quote offered by the foreign shipping company, depending on whether the ship was flagged after or before 1<sup>st</sup> February, 2021.</li>
<li>However, <strong>ships older than 20 years will not be eligible under the scheme,</strong> according to the Ministry of Ports, Shipping and Waterways.</li>
</ul>
</li>
<li><strong>Rationale of the Scheme:</strong>
<ul style="list-style-type: circle;">
<li><strong>Small Size of Indian Shipping Industry:</strong> Despite having a 7,500 km long coastline, a significant <strong><a href="/daily-updates/daily-news-analysis/draft-export-policy-unveiled" target="_blank" rel="noopener">national EXIM (Export-Import) trade</a>, a policy of 100% FDI in shipping since 1997,</strong> the Indian shipping industry and India's national fleet is proportionately small when compared with its global counterparts.<br />
<ul style="list-style-type: disc;">
<li>Currently the Indian fleet comprises a meagre <strong>1.2% of the world fleet in terms of capacity.</strong></li>
<li>The share of Indian ships in the carriage of India's EXIM trade has drastically declined from 40.7% in 1987-88 to about 7.8% in 2018-19.</li>
</ul>
</li>
<li><strong>Offsetting Higher Operational Costs:</strong> Currently, Indian shipping industry bears relatively higher operating costs, owing to factors like higher costs of debt funds, taxation on wages of Indian seafarers, IGST on import of ships, blocked GST tax credits, etc.<br />
<ul style="list-style-type: disc;">
<li>In this context, these higher operational costs would be offset to a large extent through the subsidy support and it would be more attractive to flag merchant ships in India.</li>
</ul>
</li>
<li><strong>Increasing Foreign Exchange Outgo:</strong> Owing to high operational costs, importing a shipping service by an Indian charterer is cheaper than contracting the services of a local shipping company.<br />
<ul style="list-style-type: disc;">
<li>This has led to an increase in foreign exchange outgo on account of freight bill payments to foreign shipping companies.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Significance of the Scheme: </strong><br />
<ul style="list-style-type: circle;">
<li><strong>Generating Employment:</strong> Increase in Indian fleet will provide direct employment to Indian seafarers since Indian ships are required to employ only Indian seafarers.<br />
<ul style="list-style-type: disc;">
<li>Further, cadets wishing to become seafarers are required to obtain on-board training on ships. Indian ships will therefore provide training slots for young Indian cadet boys and girls.</li>
</ul>
</li>
<li><strong>Strategic Advantages:</strong> A policy to promote the growth of the Indian shipping industry is also necessary because having a bigger national fleet would provide economic, commercial, and strategic advantages to India.</li>
<li><strong>Economic Advantages:</strong> A strong and diverse indigenous shipping fleet will not only lead to foreign exchange savings but would also reduce excessive dependence on foreign ships for transporting India&rsquo;s critical cargoes.<br />
<ul style="list-style-type: disc;">
<li>Thus, it would help in achieving the objective of Atmanirbhar Bharat and contribute to the Indian GDP.</li>
</ul>
</li>
</ul>
</li>
</ul>
<p><a href="https://www.thehindu.com/news/national/cabinet-nod-for-subsidy-scheme-to-boost-merchant-ships/article35322029.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'article_id' => (int) 8932,
		'category_id' => (int) 21,
		'title' => 'Stand Up India Scheme',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <strong>Ministry of Finance </strong>has<strong> extended the Standup India Scheme up to the year 2025.</strong></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Launch:</strong><br />
<ul style="list-style-type: circle;">
<li>It was launched in April 2016<strong> to promote entrepreneurship at the grass-root level</strong> focusing on economic empowerment and job creation.</li>
</ul>
</li>
<li><strong>Aim:</strong><br />
<ul style="list-style-type: circle;">
<li>To leverage the institutional credit structure to <strong>reach out to the underserved sector of people such as SCs, STs and Women Entrepreneurs.</strong></li>
</ul>
</li>
<li><strong>Facilitates Bank Loans:</strong><br />
<ul style="list-style-type: circle;">
<li>The objective of this scheme is<strong> to facilitate bank loans</strong> between<strong> Rs.10 lakh and Rs.1 crore to at least one SC or ST borrower</strong> and at<strong> least one woman borrower</strong> per bank branch of Scheduled Commercial Banks<strong> for setting up a Greenfield enterprise.</strong><br />
<ul style="list-style-type: disc;">
<li>This enterprise may be in manufacturing, services or the trading sector.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Eligibility:</strong><br />
<ul style="list-style-type: circle;">
<li>SC/ST and/or women entrepreneurs; above 18 years of age.</li>
<li>Loans under the scheme are available <strong>for only Greenfield projects.</strong><br />
<ul style="list-style-type: disc;">
<li>A greenfield project is one which is not constrained by prior work. It is constructed on unused land where there is no need to remodel or demolish an existing structure.</li>
</ul>
</li>
<li>Borrower<strong> should not be in default</strong> to any bank or financial institution.</li>
<li>In case of non-individual enterprises, <strong>at least 51%</strong> of the shareholding and controlling stake should be held by either <strong>an SC/ST or Woman entrepreneur.</strong></li>
</ul>
</li>
<li><strong>New Changes:</strong><br />
<ul style="list-style-type: circle;">
<li>The <strong>margin money requirement</strong> for loans under the Scheme <strong>has been reduced from 'upto 25%' to 'upto 15%'</strong> and <strong>activities allied to agriculture</strong> have been included in the Scheme.</li>
</ul>
</li>
<li><strong>Connect Centers:</strong><br />
<ul style="list-style-type: circle;">
<li>The offices of SIDBI (Small Industries Development Bank of India) and <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/national-bank-for-agriculture-and-rural-development-nabard" target="_blank" rel="noopener"><strong>NABARD (National Bank for Agriculture and Rural Development)</strong></a> are designated <strong>Stand-Up Connect Centres (SUCC).</strong></li>
</ul>
</li>
<li><strong>Performance so far:</strong><br />
<ul style="list-style-type: circle;">
<li>Banks have sanctioned Rs 26,204 crore to about <strong>1,16,266 beneficiaries</strong> under the Scheme in the <strong>last five years.</strong></li>
<li>The scheme has<strong> benefited more than 93,094 women entrepreneurs.</strong></li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1626863181_image5.jpg" target="_blank" rel="noopener"><strong><img class="content-img" src="http://www.drishtiias.com/images/uploads/1626863181_image5.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="651" height="273" /></strong></a></p>
<p><a href="https://pib.gov.in/PressReleseDetailm.aspx?PRID=1737320" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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		'article_id' => (int) 8871,
		'category_id' => (int) 22,
		'title' => 'Growth Matters',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.thehindu.com/opinion/op-ed/growth-matters-but-income-levels-matter-more/article35311246.ece" target="_blank" rel="noopener"><strong>Growth matters but income levels matter more</strong></a> which was published in The Hindu on 14/07/2021. It talks about the challenges facing economic growth and ways to achieve a high growth rate.</p>
</div>
<p>After the <a href="/daily-updates/daily-news-analysis/reasons-for-rising-covid-19-infections-second-wave" target="_blank" rel="noopener"><strong>Covid-19</strong></a> shock economic growth has been showing a downward trend and private investment and demand has also been decreasing.</p>
<p>In the context, India needs a sharp revival of demand for which higher per capita incomes are necessary.</p>
<p>However, there are several challenges needed to be tackled in order to increase the demand and economic growth rate.</p>
<div class="border-bg">
<p><strong>Some Observations About Economy</strong></p>
<ul style="list-style-type: square;">
<li>The agriculture sector continued its impressive growth performance, reiterating that it still remains as the vital sector of the economy, especially at times of crisis.</li>
<li>The manufacturing sector continued its subdued growth performance, failing to emerge as the growth driver, with production interruptions due to localised lockdowns to be blamed.</li>
<li>The contraction in trade (-18.2%), construction (-8.6%), mining (-8.5%) and manufacturing (-7.2%) is a matter of concern as these sectors account for the bulk of low-skilled jobs.</li>
</ul>
</div>
<h3>Challenges Confronting Economic Growth</h3>
<ul style="list-style-type: square;">
<li><strong>Rising unemployment rate:</strong> According to the Centre for Monitoring Indian Economy (CMIE), in May 2021, India&rsquo;s labour participation rate at 40% was the same as it was in April 2021. But, the unemployment rate shot up to 11.9% from 8%. <br />
<ul style="list-style-type: circle;">
<li>A stable labour participation rate combined with a higher unemployment rate implies a<strong> loss of jobs</strong> and a fall in the employment rate.</li>
<li>According to CMIE, over 15 million jobs were lost in May 2021, higher than the 12.3 million in November 2016, the month of demonetisation.</li>
</ul>
</li>
<li><strong>High Informality:</strong> Job losses bring out the high informality and vulnerability of labour in India as of the total jobs lost during pandemic were of daily wage earners.This challenges inclusive growth and higher economic growth potential of the country.</li>
<li><strong>Low Business Confidence:</strong> Business confidence index (BCI), from the survey by the FICCI, has fallen down severely. <a href="/daily-updates/daily-news-analysis/purchasing-managers-index-1" target="_blank" rel="noopener"><strong>Purchasing Managers Index (PMI)</strong></a> has also slipped to a 10-month low indicating that the manufacturing sector is showing signs of strain with growth projections being revised lower.
<ul style="list-style-type: circle;">
<li>Both BCI and PMI slipping down indicates that the overall optimism towards 2021-22 is low, which could <strong>impact investments and cause further job losses</strong></li>
</ul>
</li>
<li><strong>Weak Demand:</strong> With household income being severely impacted and past savings being already drawn on during the first wave of <strong>covid-19 pandemic,</strong> demand conditions are weak.</li>
</ul>
<h3>Issues With India&rsquo;s Policy Response</h3>
<ul style="list-style-type: square;">
<li>There has been <strong>less direct action by the government</strong> to support the vulnerable to alleviate their hardships.</li>
<li>The bulk of the <strong>policy measures are supply side measures</strong> and not on the demand side. <br />
<ul style="list-style-type: circle;">
<li>In times of financial anxiety, what is needed is direct state spending for a quick demand boost.</li>
</ul>
</li>
<li>Large parts of all the stimulus packages announced till now would work in the <strong>medium term</strong> (not immediate). These include policies related to the external sector, infrastructure and manufacturing sector.</li>
<li>The use of credit backstops as the main plank of policy has limits compared to any direct measure on the demand side as this could result in poor growth performance if private investments do not pick up.</li>
<li>Further, the credit easing approach would take a longer time to multiply incomes as lending involves a lender&rsquo;s discretion and borrower&rsquo;s obligation.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Sharp Revival in Overall Demand:</strong> Growth recovery depends on demand recovery. Increased demand will come only with increased saving and increased income levels. <br />
<ul style="list-style-type: circle;">
<li>Investment, especially private investment, is the &ldquo;key driver&rdquo; that drives demand, creates capacity, increases labour productivity, introduces new technology, allows creative destruction, and generates jobs.</li>
</ul>
</li>
<li><strong>Export Promotion:</strong> External demand looks robust as India&rsquo;s exports touched USD 32 billion in May 2021, 67% higher than in May 2020 indicating that global demand rebound is fast.<br />
<ul style="list-style-type: circle;">
<li>Also Export finance can be provided to exporters.</li>
</ul>
</li>
<li><strong>Increasing the MGNREGA funding and expanding to Urban areas:</strong> The <a href="/daily-updates/daily-news-editorials/mgnrega-and-migrant-crisis" target="_blank" rel="noopener"><strong>MGNREGA</strong></a> programme has proved to be a bedrock of support in the normal times and during times of difficulty (like Covid-19) and it will be a good idea to expand the scheme to urban areas.</li>
<li><strong>Transfer of Cash benefits:</strong> A meaningful cash transfer can restore confidence in these families. Money in the hands of people can provide an immediate sense of security and confidence, which is the cornerstone to restoring economic normalcy.<br />
<ul style="list-style-type: circle;">
<li>It will raise the consumption and demand of the economy and can bring back the virtuous cycle in play.</li>
</ul>
</li>
<li><strong>Use of technology:</strong> With rising internet penetration, governments should collaborate with industry leaders to create online tutorials in local regional languages to impart knowledge and skills to all.</li>
<li><strong>Promoting labour-intensive sectors</strong> such as gems and jewellery, textiles and garments and leather goods.</li>
</ul>
<h3>Conclusion</h3>
<p>Focusing on growth rates has its merits in the long term as achieving higher income levels require sustained growth for longer periods.</p>
<p>India is slowly but surely on the path to economic recovery and investment is the way to sustain this growth momentum.</p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #f5fcf7;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Direct action through government policy response to create demand is the ideal way to sustain the growth momentum. Comment.</p>
</td>
</tr>
</tbody>
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		'article_id' => (int) 8838,
		'category_id' => (int) 21,
		'title' => 'India Industrial Land Bank',
		'description' => '<h3>Why in News</h3>
<p>The <strong>India Industrial Land Bank (IILB),</strong> a <strong>GIS-based portal</strong>, has seen a 30% increase in page views each month since April 2021.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>India Industrial Land Bank (IILB):</strong><br />
<ul style="list-style-type: circle;">
<li><strong><a href="/pdf/dipp-renamed-as-dpiit.pdf" target="_blank" rel="noopener">Department for Promotion of Industry &amp; Internal Trade (DPIIT)</a> has developed IILB portal, a GIS-enabled database of industrial areas/clusters</strong> across the country to adopt a committed approach towards resource optimization, industrial upgradation and sustainability.</li>
<li>The portal serves as a <strong>one-stop solution to the free and easy accessibility of all industrial information</strong> including availability of raw material, agriculture, horticulture, minerals, natural resources; distance from key logistic nodes; layers of terrain and urban infrastructure.</li>
<li>It <strong>aims to provide information on available land for prospective investors</strong> looking at setting up units in the Country.</li>
<li>It also provides <strong>links to State GIS Portals and State Land Banks.</strong></li>
</ul>
</li>
<li><strong>Geographic Information System (GIS):</strong><br />
<ul style="list-style-type: circle;">
<li>A GIS is a <strong>computer system for capturing, storing, checking, and displaying data</strong> related to positions on Earth&rsquo;s surface.</li>
<li>By relating seemingly unrelated data, GIS can help individuals and organizations<strong> better understand spatial patterns</strong> and relationships.</li>
<li>GIS can use any information that includes location. The <strong>location can be expressed in many different ways,</strong> such as latitude and longitude, address, or ZIP code.</li>
<li>GIS can include <strong>data about people, such as population, income, or education level.</strong><br />
<ul style="list-style-type: disc;">
<li>It can also include <strong>information about the sites of factories, farms, and schools, or storm drains, roads, and electric power lines</strong> etc.</li>
</ul>
</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1626075765_image7.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1626075765_image7.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="600" caption="false" /></a></p>
<p><a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1734169" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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		'article_id' => (int) 8821,
		'category_id' => (int) 21,
		'title' => 'India's Covid-19 Emergency Response Package: Phase II',
		'description' => '<h3>Why in News</h3>
<p>The Union Cabinet has recently approved a Rs. 23,123 crore package to boost emergency response and healthcare systems.</p>
<ul style="list-style-type: square;">
<li>It includes funding for 20,000 additional ICU (intensive care unit) beds and the setting up of paediatric units in all districts, ahead of a potential third wave of <a href="/daily-updates/daily-news-analysis/coronavirus-disease-named-covid-19" target="_blank" rel="noopener"><strong>Covid-19</strong></a> in the country.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Background:</strong><br />
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-analysis/rs-15000-crore-sanctioned-to-states" target="_blank" rel="noopener"><strong>Phase I of Package</strong></a>: In March 2020, when the country was faced with the first wave of the Covid-19 pandemic, the Central Sector Scheme of Rs. 15,000 crore was announced for the<strong> "India Covid-19 Emergency Response and Health Systems Preparedness Package".</strong><br />
<ul style="list-style-type: disc;">
<li>It aimed at providing a critical impetus to the efforts of the Ministry of Health and Family Welfare (MoHFW) and States/UTs, and catalysing health systems activities for pandemic management.</li>
</ul>
</li>
<li>Since mid-February 2021, the country is experiencing a <a href="/daily-updates/daily-news-analysis/reasons-for-rising-covid-19-infections-second-wave" target="_blank" rel="noopener"><strong>second wave</strong></a> which has spread into rural, peri-urban and tribal areas.</li>
</ul>
</li>
<li><strong>Phase II of Package:</strong><br />
<ul style="list-style-type: circle;">
<li>The Phase-II of the Package has <a href="/daily-updates/daily-news-editorials/reforming-centrally-sponsored-scheme" target="_blank" rel="noopener"><strong>Central Sector (CS)</strong> </a>and <a href="/daily-updates/daily-news-editorials/reforming-centrally-sponsored-scheme" target="_blank" rel="noopener"><strong>Centrally Sponsored Schemes (CSS)</strong> </a>components.<br />
<ul style="list-style-type: disc;">
<li>The Union government fully funds the central sector schemes, whereas centrally sponsored schemes are jointly funded by the Centre and states.</li>
</ul>
</li>
<li>It would be<strong> implemented from 1<sup>st</sup> July 2021 to 31<sup>st</sup> March 2022.</strong></li>
</ul>
</li>
<li><strong>Purpose:</strong><br />
<ul style="list-style-type: circle;">
<li>Includes funding for paediatric units in all 736 districts, and the setting up of 20,000 ICU beds, 20% of which would be &ldquo;hybrid&rdquo;, that is, for adults as well as children. <br />
<ul style="list-style-type: disc;">
<li>There are apprehensions about<strong> a third wave of Covid-19 affecting children more than before.</strong></li>
</ul>
</li>
<li>It is <strong>aimed at preventing the problems observed during the second wave,</strong> including lack of transport facilities for oxygen and shortage of medicines, from happening again.</li>
<li>The Centre <strong>would provide support to its hospitals, the All India Institutes of Medical Sciences, and other institutes of national importance,</strong> for repurposing 6,688 beds for Covid-19 management.</li>
<li><a href="/printpdf/genome-sequencing-in-india" target="_blank" rel="noopener"><strong>Genome sequencing</strong></a> machines would be provided to the<a href="/daily-updates/daily-news-analysis/national-centre-for-disease-control-ncdc" target="_blank" rel="noopener"><strong> National Centre for Disease Control.</strong></a></li>
<li>The package would also provide for the expansion of the national telemedicine platform, <a href="/daily-updates/daily-news-analysis/telemedicine-service-platform-esanjeevani" target="_blank" rel="noopener"><strong>eSanjeevani</strong></a>, by increasing daily consultations from 50,000 at present to 5 lakh.</li>
<li><strong>States would be supported</strong> to carry out at least 21.5 lakh tests a day and add 8,800 ambulances.</li>
</ul>
</li>
</ul>
<p><a href="https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=1733841" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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	(int) 9 => object(Cake\ORM\Entity) {

		'article_id' => (int) 8794,
		'category_id' => (int) 21,
		'title' => 'Output Pact: OPEC+',
		'description' => '<h3>Why in News</h3>
<p>Recently, the United Arab Emirates (UAE) pushed back against a plan by the <a href="/daily-updates/daily-news-analysis/opec" target="_blank" rel="noopener"><strong>Organization of the Petroleum Exporting Countries (OPEC+) Plus</strong></a> group to <strong>extend the global pact to cut oil production beyond April 2022.</strong></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>The Output Pact &amp; Fluctuating Oil Price:</strong><br />
<ul style="list-style-type: circle;">
<li>The OPEC+ group of countries had, in April 2020, entered into a <strong>two-year agreement (Output Pact), which entailed steep cuts in crude production to deal with a sharp fall in the price of oil</strong> as a result of the <a href="/daily-updates/daily-news-editorials/comprehensive-action-plan-for-covid-19" target="_blank" rel="noopener"><strong>Covid-19 pandemic.</strong></a> <br />
<ul style="list-style-type: disc;">
<li>The price of <a href="/daily-updates/daily-news-analysis/impact-of-crude-oil-price-hike" target="_blank" rel="noopener"><strong>Brent crude</strong></a> hit an <strong>18-year low of under USD 20 per barrel in April 2020</strong> as economic activity around the world crashed as countries dealt with the pandemic.</li>
</ul>
</li>
<li>In <strong>November 2020, the prices started rising</strong> and in <strong>July 2021, they were USD 76.5 per barrel</strong> mainly due to the steady<strong> rollout of <a href="/daily-updates/daily-news-editorials/covid-19-vaccination" target="_blank" rel="noopener">vaccination programmes</a> around the world.</strong></li>
<li>OPEC+, however, <strong>maintained lower levels of production</strong> despite crude oil prices reaching pre-Covid levels, with Saudi Arabia, notably, announcing a further cut in production of 1 million barrels per day for the February-to-April period, which <strong>helped boost rising prices even further.</strong><br />
<ul style="list-style-type: disc;">
<li>The OPEC+ group ran into <strong>sharp criticism from developing economies, including India, for deliberately maintaining low supply levels to raise prices.</strong></li>
</ul>
</li>
<li>In April, OPEC+ agreed to gradually increase crude production, including a <strong>phased end to Saudi Arabia&rsquo;s 1 million barrel per day cut in production by July.</strong></li>
</ul>
</li>
<li><strong>UAE&rsquo;s Objection:</strong><br />
<ul style="list-style-type: circle;">
<li>UAE agreed that there was a need to increase crude oil production from August 2021, but did not agree to a condition by the <strong>OPEC Joint Ministerial Monitoring Committee (JMMC) </strong>that the <strong>two-year production agreement be extended by six months.</strong></li>
<li>The UAE&rsquo;s key objection to the existing agreement is the <strong>reference output used to calculate the total production apportioned to each oil-exporting country.</strong> <br />
<ul style="list-style-type: disc;">
<li>The <strong>baseline production level reference</strong> used in the current agreement was <strong>not reflective of the UAE&rsquo;s production capacity</strong> and, therefore, led to the UAE being apportioned a lower share of total production of crude oil.</li>
<li>UAE would be open to extending the agreement if baseline production levels were reviewed to be fair to all parties.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Impact of OPEC+ conflict on India:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Delayed Relief:</strong><br />
<ul style="list-style-type: disc;">
<li>If the UAE and other OPEC+ nations do not reach an agreement to increase production in August, <strong>expected relief in the form of lower crude oil prices could be delayed. </strong></li>
</ul>
</li>
<li><strong>High Domestic Prices:</strong><br />
<ul style="list-style-type: disc;">
<li>India is currently <strong>facing record-high prices of petrol and diesel.</strong> High crude prices have led to <strong>Indian oil marketing companies hiking the price of petrol by about 19.3%</strong> and that of diesel by about 21% since the beginning of 2021.</li>
</ul>
</li>
<li><strong>Slow Recovery:</strong><br />
<ul style="list-style-type: disc;">
<li>The high price of crude oil was<strong> slowing down the economic recovery of developing economies post the <a href="/daily-updates/daily-news-analysis/covid-19-now-pandemic-who" target="_blank" rel="noopener">pandemic</a>.</strong></li>
</ul>
</li>
<li><strong>Inflation:</strong><br />
<ul style="list-style-type: disc;">
<li>The high prices might also increase the <a href="/daily-updates/daily-news-analysis/current-account-deficit" target="_blank" rel="noopener"><strong>Current Account Deficit</strong></a> and put <a href="/daily-updates/daily-news-analysis/inflation-data-august-2020" target="_blank" rel="noopener"><strong>inflationary pressure</strong> </a>on the Indian economy.</li>
</ul>
</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Organization of the Petroleum Exporting Countries</strong></p>
<ul style="list-style-type: square;">
<li><strong>About:</strong><br />
<ul style="list-style-type: circle;">
<li>It is a <strong>permanent, intergovernmental organization, created at the Baghdad Conference in 1960,</strong> by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.</li>
<li>It aims <strong>to manage the supply of oil in an effort to set the price of oil in the world market,</strong> in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.</li>
</ul>
</li>
</ul>
<ul style="list-style-type: square;">
<li><strong>Headquarter:</strong><br />
<ul style="list-style-type: circle;">
<li>Vienna, Austria.</li>
</ul>
</li>
<li><strong>Membership:</strong><br />
<ul style="list-style-type: circle;">
<li>OPEC membership is <strong>open to any country</strong> that is a substantial exporter of oil and which shares the ideals of the organization.</li>
<li><strong>OPEC has a total of 13 Member Countries</strong> viz. Iran, Iraq, Kuwait, United Arab Emirates (UAE), Saudi Arabia, Algeria, Libya, Nigeria, Gabon, Equatorial Guinea, Republic of Congo, Angola and Venezuela are members of OPEC.</li>
</ul>
</li>
</ul>
<p><strong>Organization of the Petroleum Exporting Countries Plus</strong></p>
<ul style="list-style-type: square;">
<li>It is a loosely affiliated entity consisting of the<strong> OPEC members and 10 of the world's major non-OPEC oil-exporting nations which are:</strong><br />
<ul style="list-style-type: circle;">
<li>Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.</li>
</ul>
</li>
</ul>
</div>
<p><a href="https://indianexpress.com/article/explained/opecs-output-pact-proposal-how-will-decision-affect-india/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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	(int) 10 => object(Cake\ORM\Entity) {

		'article_id' => (int) 8732,
		'category_id' => (int) 21,
		'title' => 'Economic Relief Package after Covid- Second Wave',
		'description' => '<h3>Why in News</h3>
<p>Recently, the<strong> Ministry of Finance</strong> announced a slew of <strong>measures to provide relief to diverse sectors</strong> affected by the<a href="/daily-updates/daily-news-analysis/reasons-for-rising-covid-19-infections-second-wave" target="_blank" rel="noopener"><strong> second wave of Covid-19 pandemic.</strong></a></p>
<ul style="list-style-type: square;">
<li>It aims<strong> to prepare the health systems for emergency response</strong> and provide <strong>impetus for growth and employment.</strong> However it will<strong> increase the <a href="/daily-updates/daily-news-analysis/increased-fiscal-deficit-1" target="_blank" rel="noopener">Fiscal Deficit</a> by 0.6%</strong> as per a report of State Bank of India.</li>
<li>A total of <strong>17 measures amounting to Rs. 6,28,993</strong> crore were announced in the Economic Relief Package.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1624965644_image6.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1624965644_image6.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="500" caption="false" /></a></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Economic Relief from Pandemic:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Loan Guarantee Scheme for Covid Affected Sectors:</strong><br />
<ul style="list-style-type: disc;">
<li>Additional<strong> credit of Rs 1.1 lakh crore will flow to the businesses.</strong> This includes <strong>Rs 50,000 crore for the health sector</strong> and<strong> Rs 60,000 crore for other sectors,</strong> including tourism.<br />
<ul style="list-style-type: disc;">
<li>The health sector component is aimed at <strong>scaling medical infrastructure targeting underserved areas</strong> (i.e. non-metropolitan areas).</li>
</ul>
</li>
<li><strong>Guarantee Coverage:</strong> 50% for expansion &amp; 75% for new projects. <br />
<ul style="list-style-type: disc;">
<li>For <a href="/daily-updates/daily-news-editorials/aspirational-districts-programme" target="_blank" rel="noopener"><strong>aspirational districts</strong></a>, the guarantee cover of 75% will be available for both new projects and expansion.</li>
</ul>
</li>
<li>Maximum loan admissible under the scheme is Rs. 100 crore and guarantee duration is up to 3 years.</li>
</ul>
</li>
<li><strong>Emergency Credit Line Guarantee Scheme:</strong><br />
<ul style="list-style-type: disc;">
<li>Expand the <a href="/daily-updates/daily-news-analysis/expansion-of-emergency-credit-line-guarantee-scheme#:~:text=The%20ECLGS%20provides%20for%20the,Banking%20Financial%20Companies%20(NBFCs)." target="_blank" rel="noopener"><strong>Emergency Credit Line Guarantee Scheme (ECLGS)</strong></a>, launched as part of <a href="/daily-updates/daily-news-analysis/atmanirbhar-bharat-and-economic-stimulus" target="_blank" rel="noopener"><strong>Atmanirbhar Bharat Package</strong></a> in May, 2020, by Rs 1.5 lakh crore.</li>
</ul>
</li>
<li><strong>Credit Guarantee Scheme for Micro Finance Institutions:</strong><br />
<ul style="list-style-type: disc;">
<li>It is a new scheme which <strong>aims to benefit the smallest of the borrowers</strong> who are served by the network of <a href="/daily-updates/daily-news-analysis/microfinance-institutions" target="_blank" rel="noopener"><strong>Micro Finance Institutions (MFIs).</strong></a></li>
<li>Guarantee will be provided to <a href="/mains-practice-question/question-364" target="_blank" rel="noopener"><strong>Scheduled Commercial Banks</strong></a> for loans to new or existing <a href="/daily-updates/daily-news-analysis/credit-guarantee-for-nbfc-mfis" target="_blank" rel="noopener"><strong>Non-Banking Financial Company (NBFC)-MFIs</strong> </a>or MFIs for<strong> on lending upto Rs 1.25 lakh to approximately 25 lakh small borrowers. </strong></li>
</ul>
</li>
<li><strong>Extension of Aatmanirbhar Bharat Rozgar Yojana (ANBRY):</strong><br />
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-analysis/measures-on-atmanirbhar-bharat-3-0" target="_blank" rel="noopener"><strong>ANBRY</strong></a> incentivises employers for creation of new employment, restoration of loss of employment through <strong><a href="/daily-updates/daily-news-analysis/epfo-disbursed-claims" target="_blank" rel="noopener">Employees&rsquo; Provident Fund Organisation (EPFO)</a>.</strong></li>
</ul>
</li>
<li><strong><a href="/daily-updates/daily-news-analysis/pradhan-mantri-garib-kalyan-ann-yojana" target="_blank" rel="noopener">Pradhan Mantri Garib Kalyan Ann Yojana</a>:</strong><br />
<ul style="list-style-type: disc;">
<li>To the beneficiaries under the <a href="/daily-updates/daily-news-analysis/inclusion-of-the-disabled-in-national-food-security-act-2013" target="_blank" rel="noopener"><strong>National Food Security Act (NFSA), 2013</strong></a>, 5 kg of food grains per month free will be provided during May-November 2021.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Strengthening Public Health:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>New Scheme for Children and Paediatric Care:</strong><br />
<ul style="list-style-type: disc;">
<li>A new scheme for<strong> strengthening public health infrastructure and human resources with outlay of Rs. 23,220 crore</strong> was also announced.</li>
<li>It will<strong> focus on short term emergency preparedness</strong> with special emphasis on children and paediatric care/paediatric beds.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Growth &amp; Employment:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Free one month tourist visa</strong> to 5 lakh tourists.</li>
<li>Additional Subsidy for <strong><a href="/daily-updates/daily-news-analysis/fertiliser-subsidy" target="_blank" rel="noopener">DAP &amp; P&amp;K fertilizers</a>.</strong></li>
<li><strong>Climate Resilient Special Traits Varieties:</strong><br />
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-analysis/indian-council-of-agricultural-research" target="_blank" rel="noopener"><strong>Indian Council of Agricultural Research (ICAR)</strong></a> has developed <a href="/daily-updates/daily-news-editorials/an-innovative-method-for-boosting-nutrition" target="_blank" rel="noopener"><strong>biofortified crop</strong></a> varieties having high nutrients like protein, iron, zinc, vitamin-A.</li>
<li>These varieties are <strong>tolerant to diseases, insects, pests, drought, salinity, and flooding,</strong> early maturing and amenable to mechanical harvesting also developed.</li>
<li>21 such varieties of <strong>rice, peas, millet, maize, soyabean, quinoa, buckwheat, winged bean, pigeon pea &amp; sorghum</strong> will be dedicated to the nation.</li>
</ul>
</li>
<li><strong>Revival of North Eastern Regional Agricultural Marketing Corporation :</strong><br />
<ul style="list-style-type: disc;">
<li>A revival package of Rs 77.45 crore will be provided to <a href="/daily-updates/daily-news-analysis/north-eastern-regional-agricultural-marketing-corporation-limited-neramac" target="_blank" rel="noopener"><strong>North Eastern Regional Agricultural Marketing Corporation (NERAMAC)</strong></a>.</li>
<li>NERAMAC has facilitated registration of 13<a href="/daily-updates/daily-news-analysis/gi-tag-for-pakistani-basmati#:~:text=A%20Geographical%20Indication%20(GI)%20is,are%20due%20to%20that%20origin." target="_blank" rel="noopener"><strong> Geographical Indicator (GI)</strong></a> crops of North-East.</li>
<li>It has prepared a plan to give<strong> 10-15% higher price to farmers by-passing middlemen/agents.</strong></li>
<li>It also proposes to set up<strong> North-Eastern Centre for Organic Cultivation,</strong> facilitating equity finance to entrepreneurs.</li>
</ul>
</li>
<li><strong>Boost for Project Exports:</strong><br />
<ul style="list-style-type: disc;">
<li>It has been decided to provide an additional corpus to the<strong> National Export Insurance Account (NEIA)</strong> over 5 years. This will enable it to underwrite additional Rs. 33,000 crore of project exports.<br />
<ul style="list-style-type: disc;">
<li><strong>NEIA</strong> Trust<strong> promotes Medium and Long Term (MLT) project exports</strong> by extending risk covers.</li>
<li>It provides cover to buyer&rsquo;s credit, given by <strong>EXIM (Export-Import) Bank,</strong> to less credit-worthy borrowers and supporting project exporters.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Boost to Export Insurance Cover:</strong><br />
<ul style="list-style-type: disc;">
<li>It has been decided to<strong> infuse equity in <a href="/daily-updates/daily-news-analysis/nirvik-scheme" target="_blank" rel="noopener">Export Credit Guarantee Corporation (ECGC)</a></strong> over 5 years to boost export insurance cover by Rs. 88,000 crore.</li>
</ul>
</li>
<li><strong>Digital India:</strong> <br />
<ul style="list-style-type: disc;">
<li>Additional Rs. 19,041 crore will be provided<strong> to implement<a href="/daily-updates/daily-news-analysis/bharatnet-project" target="_blank" rel="noopener"> Bharat Net</a> in PPP model in 16 States </strong>on<a href="/daily-updates/daily-news-analysis/financial-support-to-public-private-partnerships-in-infrastructure" target="_blank" rel="noopener"><strong> viability gap funding </strong></a>basis.</li>
<li>This will <strong>enable expansion and upgradation of Bharat Net to cover all Gram Panchayats and inhabited villages.</strong></li>
</ul>
</li>
<li><strong>Extension of PLI Scheme:</strong><br />
<ul style="list-style-type: disc;">
<li>Tenure of<a href="/daily-updates/daily-news-analysis/schemes-for-electronic-manufacturing" target="_blank" rel="noopener"><strong> Production-Linked Incentive (PLI) scheme</strong></a> for<a href="/daily-updates/daily-news-analysis/expansion-of-production-linked-incentive-scheme" target="_blank" rel="noopener"><strong> Large Scale Electronics Manufacturing</strong> </a>has been decided to be extended by one year i.e. till 2025-26.</li>
</ul>
</li>
<li><strong>Reform-Based Result-Linked Power Distribution Scheme:</strong><br />
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-analysis/budget-2021-highlights-infrastructure" target="_blank" rel="noopener"><strong>Revamped Reforms-Based, Result-Linked power distribution scheme</strong> </a>of financial assistance to DISCOMS for infrastructure creation, up-gradation of system, capacity building and process improvement was announced in the <a href="/daily-updates/daily-news-analysis/budget-2021-highlights-health-and-wellbeing" target="_blank" rel="noopener"><strong>Union Budget of 2021-22</strong></a>. <br />
<ul style="list-style-type: disc;">
<li>It <strong>aims at state specific intervention</strong> and to provide<strong> assistance for installation of 25 crore smart meters, 10,000 feeders, 4 lakh km of LT overhead lines.</strong></li>
</ul>
</li>
<li>The amount available under the scheme is <strong>in addition to the allowed <a href="/daily-updates/daily-news-analysis/reform-linked-borrowing#:~:text=Under%20this%20reforms%2Dlinked%20borrowing,2%2C000%20crore%20for%20capital%20expenditure." target="_blank" rel="noopener">additional borrowing</a> of 0.5% of Gross Domestic Product</strong> of State which will be available to the States annually for the next four years subject to carrying out specific power sector reforms.</li>
<li>Ongoing works of <a href="/daily-updates/daily-news-analysis/integrated-power-development-scheme" target="_blank" rel="noopener"><strong>Integrated Power Development Scheme (IPDS)</strong></a>, <a href="/daily-updates/daily-news-analysis/saubhagya-scheme" target="_blank" rel="noopener"><strong>Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and SAUBHAGYA</strong></a> will also be merged in the scheme.</li>
</ul>
</li>
<li><strong>New streamlined process for PPP Projects and Asset Monetization:</strong><br />
<ul style="list-style-type: disc;">
<li>A new policy will be formulated for appraisal and approval of <a href="/to-the-points/paper3/ppp-investment-model" target="_blank" rel="noopener"><strong>Public-Private Partnerships (PPP)</strong> </a>proposals and monetization of core infrastructure assets, including through <strong><a href="/daily-updates/daily-news-analysis/infrastructure-investment-trusts-as-fundraiser" target="_blank" rel="noopener">Infrastructure Investment Trusts (InvITs)</a>.</strong></li>
<li>The policy will aim<strong> to ensure speedy clearance of projects to facilitate private sector&rsquo;s efficiencies</strong> in financing construction and management of infrastructure.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h3>Significance of the Package</h3>
<ul style="list-style-type: square;">
<li>It would usher in much-needed liquidity and help <strong>revive the employment-intensive sectors such as tourism.</strong></li>
<li>It will help <strong>save livelihoods and mitigate further closures and also create new job opportunities.</strong></li>
<li>It will <strong>bolster efforts for any such healthcare challenges</strong> in the future.</li>
<li>It will <strong>enable the Covid-affected Sectors to rise from the challenges</strong> they had faced over the past year and a half.</li>
<li>The liquidity for small businesses could<strong> indirectly revive the fortunes of larger industries</strong> they source from and help repair broken supply chains.</li>
</ul>
<p><a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1730963" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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	(int) 11 => object(Cake\ORM\Entity) {

		'article_id' => (int) 8717,
		'category_id' => (int) 21,
		'title' => 'International MSMEs Day',
		'description' => '<h3>Why in News</h3>
<p>Every year, <strong>Micro, Small and Medium-sized Enterprises (MSMEs) Day</strong> is celebrated on&nbsp;<strong>27<sup>th</sup> June</strong> to recognise the<strong> contribution of these industries</strong> in the implementation of the <a href="/to-the-points/paper3/sustainable-development-3" target="_blank" rel="noopener"><strong>Sustainable Development Goals (SDGs).</strong></a></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>History:</strong><br />
<ul style="list-style-type: circle;">
<li>The <a href="/important-institutions/drishti-specials-important-institutions-international-institution/united-nations-1" target="_blank" rel="noopener"><strong>United Nations (UN)</strong></a> designated<strong> 27<sup>th</sup> June </strong>as<strong> Micro, Small and Medium-sized Enterprises Day</strong> through a <strong>resolution</strong> passed in the<strong> UN General Assembly</strong> in April 2017.</li>
<li>In May 2017, a program titled <strong>'Enhancing National Capacities for Unleashing Full Potentials of MSMEs in Achieving the SDGs in Developing Countries'</strong> was launched.</li>
<li>It has been funded by the 2030 Agenda for <strong>Sustainable Development Sub-Fund of the United Nations Peace and Development Fund.</strong></li>
</ul>
</li>
<li><strong>Significance:</strong><br />
<ul style="list-style-type: circle;">
<li>The <strong>UN</strong> wants <strong>countries to recognise sustainable development goals</strong> and <strong>create awareness</strong> about them.<br />
<ul style="list-style-type: disc;">
<li>An<strong> International Trade Centre survey</strong> on <strong><a href="/daily-updates/daily-news-editorials/comprehensive-action-plan-for-covid-19" target="_blank" rel="noopener">Covid-19</a> impact</strong> among businesses in 136 countries has shown that <strong>nearly 62% of women-led small businesses</strong> have been strongly affected by the crisis, compared to just over half of firms led by men, and <strong>women-owned are 27%</strong> more likely<strong> not to survive</strong> the pandemic.</li>
</ul>
</li>
<li><strong>Formal and informal MSMEs</strong> make up over <strong>90% of all firms and account,</strong> on average, for<strong> 70% of total employment</strong> and <strong>50% of GDP.</strong> As such, they are key actors in achieving a green recovery.</li>
</ul>
</li>
<li><strong>2021 Theme:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>MSME 2021: Key to an inclusive and sustainable recovery.</strong></li>
</ul>
</li>
<li><strong>Role of MSMEs in Indian Economy:</strong><br />
<ul style="list-style-type: circle;">
<li>They are the growth accelerators of the Indian economy, contributing about <strong>30% of the country&rsquo;s gross domestic product (GDP).</strong></li>
<li>In terms of <strong>exports,</strong> they are an integral part of the<strong> supply chain and contribute about&nbsp;</strong><strong>48% of the overall exports.</strong></li>
<li>MSMEs also play an<strong> important role in employment generation,</strong> as they employ about <strong>110 million people across the country.</strong>
<ul style="list-style-type: disc;">
<li>Interestingly, MSMEs are intertwined with the rural economy as well, as more than half of the MSMEs operate in rural India.</li>
</ul>
</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1624871116_image4.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1624871116_image4.png" style="display: block; margin-left: auto; margin-right: auto;" width="800" caption="false" /></a></p>
<div class="border-bg">
<p><strong>Initiatives to Promote MSME Sector</strong></p>
<ul style="list-style-type: square;">
<li>The Ministry of Micro, Small &amp; Medium Enterprises (M/o MSME) envisions a vibrant MSME sector by promoting growth and development of the MSME Sector, including Khadi, Village and Coir Industries.</li>
<li>The <strong>Micro; Small and Medium Enterprises Development (MSMED) Act was notified in&nbsp;</strong><strong>2006</strong> to address policy issues affecting MSMEs as well as the coverage and investment ceiling of the sector.</li>
<li><strong><a href="/daily-updates/daily-news-analysis/prime-minister-s-employment-generation-program#:~:text=Launch%3A%20The%20Government%20of%20India,as%20well%20as%20urban%20areas." target="_blank" rel="noopener">Prime Minister&rsquo;s Employment Generation programme (PMEGP)</a>:</strong> It is a <strong>credit linked subsidy scheme,</strong> for setting up of <strong>new micro-enterprises</strong> and to<strong> generate employment</strong> opportunities in <strong>rural as well as urban areas of the country.</strong></li>
<li><strong><a href="/daily-updates/daily-news-analysis/scheme-of-fund-for-regeneration-of-traditional-industries" target="_blank" rel="noopener">Scheme of Fund for Regeneration of Traditional Industries (SFURTI)</a>:</strong> It aims to properly organize the <strong>artisans and the traditional industries</strong> into clusters and thus provide<strong> financial assistance</strong> to make them competitive in today's market scenario.</li>
<li><a href="/daily-updates/daily-news-editorials/the-elixir-for-msmes-access-to-credit" target="_blank" rel="noopener"><strong>A Scheme for Promoting Innovation, Rural Industry &amp; Entrepreneurship (ASPIRE)</strong></a>: The scheme promotes innovation &amp; rural entrepreneurship through rural Livelihood Business Incubator (LBI), Technology Business Incubator (TBI) and Fund of Funds for start-up creation in the agro-based industry.</li>
<li><strong><a href="/pdf/support-and-outreach-initiative-for-msme-sector.pdf" target="_blank" rel="noopener">Interest Subvention Scheme for Incremental Credit to MSMEs</a>:</strong> It was introduced by 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> wherein <strong>relief is provided</strong> upto<strong> 2% of interest</strong> to all the<strong> legal MSMEs on their outstanding fresh/incremental term loan/working capital</strong> during the period of its validity.</li>
<li><strong><a href="/daily-updates/daily-news-analysis/pmegp-and-cgtmse" target="_blank" rel="noopener">Credit Guarantee Scheme for Micro and Small Enterprises</a>:</strong> Launched to facilitate easy flow of credit, guarantee cover is provided for collateral free credit extended to MSMEs.</li>
<li><strong>Micro and Small Enterprises Cluster Development Programme (MSE-CDP):</strong> It aims to enhance the productivity and competitiveness as well as capacity building of MSEs.</li>
<li><strong>Credit Linked Capital Subsidy and Technology Upgradation Scheme (CLCS-TUS):</strong> CLCSS aims at <strong>facilitating technology upgradation of Micro and Small Enterprises (MSEs)</strong> by providing<strong> 15% capital subsidy for purchase of plant &amp; machinery.</strong></li>
<li><strong><a href="/daily-updates/daily-news-analysis/champions-portal-for-msme" target="_blank" rel="noopener">CHAMPIONS portal</a>:</strong> It aims to assist <strong>Indian MSMEs</strong> march into the big league as <strong>National and Global CHAMPIONS</strong> by solving their grievances and encouraging, supporting, helping and hand holding them.</li>
<li><strong>MSME Samadhan:</strong> It enables them to directly register their cases about delayed payments by Central Ministries/Departments/CPSEs/State Governments.</li>
<li><strong>Udyam Registrations Portal:</strong> This new portal assists the government in<strong> aggregating the data on the number of MSMEs in the country. </strong></li>
<li><strong>MSME SAMBANDH:</strong> It is a<strong> Public Procurement Portal.</strong> It was launched to monitor the implementation of the Public Procurement from MSEs by Central Public Sector Enterprises.</li>
</ul>
</div>
<p><a href="https://www.hindustantimes.com/india-news/micro-small-and-medium-sized-enterprises-day-know-history-significance-101624753163330.html" target="_blank" rel="noopener"><strong>Source: HT</strong></a></p>',
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		'article_id' => (int) 8685,
		'category_id' => (int) 21,
		'title' => 'Reform Linked Borrowing',
		'description' => '<h3>Why in News</h3>
<p>Indian <strong>states were able to borrow an extra Rs. 1.06 lakh crore</strong> in 2020-21 (FY21) due to the <strong>Reform Linked Borrowing window.</strong></p>
<ul style="list-style-type: square;">
<li>This was announced to provide an additional leeway to states in order to cope with the adverse effects of<a href="/daily-updates/daily-news-editorials/comprehensive-action-plan-for-covid-19" target="_blank" rel="noopener"><strong> Covid-19 pandemic</strong> </a>on the economy.</li>
</ul>
<div class="border-bg">
<p><strong>Note</strong></p>
<ul style="list-style-type: square;">
<li><strong>Chapter II of Part XII of the Constitution of India</strong> deals with borrowing by the Central Government and State Governments.</li>
<li>It comprises <strong>two provisions - Article 292</strong> which covers <strong>borrowing by the Central Government and Article 293</strong>, which covers <strong>borrowing by State Governments.</strong></li>
<li><strong>Article 293 (3) requires State Governments</strong> that are indebted to the Central Government <strong>to seek the consent of the Central Government</strong> before raising further borrowings.</li>
</ul>
</div>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>About:</strong><br />
<ul style="list-style-type: circle;">
<li>This was a nudge, <strong>incentivising the States to adopt progressive policies to avail additional funds.</strong></li>
<li>In <strong>October 2020</strong>, the <strong>Central government had linked permission for additional borrowing of 1% of their <a href="/daily-updates/daily-news-analysis/gdp-contracted-by-23-9-in-first-quarter#:~:text=According%20to%20the%20recent%20National,reporting%20quarterly%20data%20in%201996." target="_blank" rel="noopener">GSDP</a></strong> (Gross State Domestic Product) to<strong> implementation of four critical reforms</strong>, which are:<br />
<ul style="list-style-type: disc;">
<li>Implementation of One Nation One Ration Card System,</li>
<li>Ease of doing business reform,</li>
<li>Urban Local body/ utility reforms and</li>
<li>Power Sector reforms.</li>
</ul>
</li>
<li>Under this reforms-linked borrowing window, <strong>states were to get access to funds of up to Rs 2.14 lakh crore</strong> on completion of all the <strong>four reforms.</strong></li>
<li>For states completing <strong>three of the four reforms</strong>, the Centre would provide <strong>additional funds assistance of Rs. 2,000 crore</strong> for <strong><a href="/daily-updates/daily-news-analysis/scheme-for-special-assistance-to-states-for-capital-expenditure" target="_blank" rel="noopener">capital expenditure</a>.</strong></li>
<li>For FY 2021-22, the <strong>net borrowing ceiling for states has been fixed at 4%</strong> of the projected GSDP (about Rs 8.46 lakh crore), based on recommendations of the <a href="/daily-updates/daily-news-analysis/15th-finance-commission-recommendations-resource-allocation" target="_blank" rel="noopener"><strong>Fifteenth Finance Commission</strong></a>.</li>
</ul>
</li>
<li><strong>One Nation One Ration Card System (ONORC) Reforms:</strong><br />
<ul style="list-style-type: circle;">
<li>This was aimed to ensure that the beneficiaries under the <a href="/daily-updates/daily-news-analysis/revising-national-food-security-act-2013-niti-aayog" target="_blank" rel="noopener"><strong>National Food Security Act (NFSA)</strong></a> and other welfare schemes, especially the migrant workers and their families, get ration from any <a href="/to-the-points/paper3/public-distribution-system-1" target="_blank" rel="noopener"><strong>Fair Price Shop (FPS</strong></a>) across the country.</li>
<li>Other aims of the intended reform were to better target beneficiaries, elimination of bogus/ duplicate/ ineligible ration cards and thus enhance welfare and reduce leakage.</li>
<li>For this, the reform conditions stipulated <a href="/daily-updates/daily-news-analysis/aadhar-and-its-voluntary-use" target="_blank" rel="noopener"><strong>Aadhar</strong></a> <strong>Seeding of all Ration Cards</strong>, biometric authentication of beneficiaries and automation of all the FPS in the State.</li>
</ul>
</li>
<li><strong>&lsquo;Ease of Doing Business&rsquo; Reforms:</strong><br />
<ul style="list-style-type: circle;">
<li>It is to facilitate a better environment and seamless process for entrepreneurs and companies to operate.</li>
<li>The reforms stipulated in this category are:<br />
<ul style="list-style-type: disc;">
<li>Completion of first assessment of <strong>&lsquo;District Level Business Reform Action Plan&rsquo;.</strong></li>
<li><strong>Elimination of the requirements of renewal of&nbsp;</strong><strong>Registration&nbsp;certificates</strong>/approvals/licences obtained by businesses under various Acts.</li>
<li>Implementation of <strong>a computerized central random inspection system</strong> under the Acts.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Urban Local Body/ Utility Reforms:</strong><br />
<ul style="list-style-type: circle;">
<li>These reforms are <strong>aimed at financial strengthening of <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/panchayati-raj-institution-pri" target="_blank" rel="noopener">ULBs (Urban Local Bodies)</a></strong> in the States and to enable them to provide better public health and sanitation services to citizens.</li>
<li>It<strong> required states to notify floor rates of property tax and of water and sewerage charges.</strong>This was in consonance with stamp duty guideline values for property transactions and current costs in urban areas.</li>
</ul>
</li>
<li><strong>Power Sector Reforms:</strong><br />
<ul style="list-style-type: circle;">
<li>There are three parameters a state must meet under the power sector reforms - <strong>reduction in Aggregate Technical &amp; Commercial (AT&amp;C) losses</strong>, targeted <strong>reduction in Average Cost of Supply and</strong> <strong>Average Revenue Realisation (ACS-ARR) gap, </strong>and <strong>direct benefit transfer (DBT) of electricity subsidy to farmers.</strong></li>
</ul>
</li>
</ul>
<p><a href="https://www.thehindu.com/business/Economy/tying-reforms-incentives-helped-widen-adoption/article34918648.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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	(int) 13 => object(Cake\ORM\Entity) {

		'article_id' => (int) 8681,
		'category_id' => (int) 22,
		'title' => 'Development Financial Institutions',
		'description' => '<div class="border">
<p>This article is based on<a href="https://www.thehindubusinessline.com/opinion/why-dfis-have-regained-relevance-today/article34913371.ece" target="_blank" rel="noopener"><strong> &ldquo;Why DFIs have regained relevance today&rdquo;</strong></a> which was published in The Hindu Business line on 22/06/2021. It talks about the role of Development financial institutions in infrastructure building.</p>
</div>
<p><a href="/daily-updates/daily-news-editorials/development-financial-institution" target="_blank" rel="noopener"><strong>Development financial institutions</strong></a> provide long-term credit for capital-intensive investments spread over a long period and low yielding rates of return, such as urban infrastructure, mining and heavy industry, and irrigation systems.</p>
<p>They act as critical intermediaries for channelling long-term finance required for infrastructure and realising higher economic growth.</p>
<p>In India, after the 1991 reforms, major DFIs were converted into commercial banks. However, after these there were few institutions in the country which could take care of industrial or infrastructure development.</p>
<p>Therefore, in order to plug the infrastructure deficit, the government has taken a positive step by making a proposal to re-establish the DFIs in India.</p>
<h3>DFI: Background &amp; Present Status</h3>
<ul style="list-style-type: square;">
<li>Development banks are different from commercial banks, which mobilize short- to medium-term deposits and lend for similar maturities to avoid a maturity mismatch.</li>
<li>In India, the first DFI was operationalized in 1948 with the setting up of the Industrial Finance Corporation (IFC).</li>
<li>DFIs in India like Industrial Development Bank of India (IDBI), Industrial Credit and Investment Corporation of India (ICICI) and IFCI did play a significant role in aiding industrial development in the past with the best of the resources made available to them.</li>
<li>However, after 1991 reforms, the concessional funding they were getting from <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> and the government was no longer available in the subsequent years.
<ul style="list-style-type: circle;">
<li>As a consequence, IDBI and ICICI had to convert themselves into universal banks.</li>
</ul>
</li>
<li>While these DFIs disappeared, a new set of institutions like IDFC (1997), IIFCL (2006) and more recently, <a href="/daily-updates/daily-news-analysis/cabinet-approves-capital-infusion-into-niif" target="_blank" rel="noopener"><strong>National Investment and Infrastructure Fund (NIIF) (2015)</strong></a> emerged to focus on funding infrastructure.</li>
<li>In budget 2021, with the initial capital base of ₹20,000 crore as committed by the government, the new DFI, assuming a leverage of around 7 times, can lend up to ₹1.4 trillion.</li>
</ul>
<h3>Need for DFI</h3>
<ul style="list-style-type: square;">
<li><strong>Infrastructure Building:</strong> Inadequate and inefficient infrastructure leads to high transaction costs, which in turn stunts an economy&rsquo;s growth potential.
<ul style="list-style-type: circle;">
<li>Therefore, DFIs makes sense as the Centre government envisages mobilizing nearly ₹100 lakh crore for the ambitious <a href="/daily-updates/daily-news-analysis/national-infrastructure-pipeline-1" target="_blank" rel="noopener"><strong>National Infrastructure Pipeline.</strong></a></li>
</ul>
</li>
<li><strong>International Precedent:</strong> Irrespective of the level of development, countries across the world have set up development banks to finance key infrastructure and manufacturing projects.
<ul style="list-style-type: circle;">
<li>For instance, the European Investment Bank (EIB) acts like a DFI for Europe.</li>
</ul>
</li>
<li><strong>Lack of Finance for Infrastructure:</strong> Although India has a long-term debt market for the government securities and corporate bonds cut, it is still out of reach of retail investors and unable to meet the large infrastructure financing needs.</li>
<li><strong>Economic Crisis Triggered By Covid-19 Pandemic:</strong> The Covid-19 pandemic has exacerbated inequality, the poverty gap, unemployment, and the economy&rsquo;s slowing down.
<ul style="list-style-type: circle;">
<li>Thus, infrastructure building through DFIs can help in quick economic recovery.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Mobilizing Capital For DFI:</strong> To lend for the long term, DFI requires correspondingly long-term sources of finance.
<ul style="list-style-type: circle;">
<li>In this context, the government may allow equity investment by institutions having a long term horizon like insurance companies, pension funds to augment the capital.</li>
<li>Further, DFI can be adequately capitalized by the sovereign-backed funds, alternative routes such as capital gains/tax-free bond issues, external borrowings, and loans from multilateral agencies.</li>
</ul>
</li>
<li><strong>Administration of DFI:</strong> The ownership and organisation structure are critical and require greater clarity as this would have bearing on the functioning, flexibility, governance of the institution and its long-term sustainability.</li>
<li><strong>Functionality of DFI:</strong> It is critical to hire experts with a good understanding of infrastructure, policies, financing and risk management to work with the institution by offering market-driven lending packages.</li>
<li><strong>Reaching Out Retail Investors:</strong> The government needs to set up institutions and network platforms to reach retail investors and incentivise and structure the bonds/instruments so that they are attracted to invest long-term in those instruments.</li>
<li><strong>Periodic Review of DFI:</strong> Periodic reviews are necessary to ensure that the DFI remains relevant by taking into account changing priorities of the economy and making consequential adjustments in the role.</li>
</ul>
<h3>Conclusion</h3>
<p>For a developing country like India, it is desirable that the new DFI remains viable and sustainable to be able to cater to the long-term development financing requirements.</p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #fffefa;">
<p><span style="color: #333399;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Development Financial Institutions (DFIs) are critical intermediaries for channelling long-term finance required for infrastructure and realising higher economic growth. Discuss.</p>
</td>
</tr>
</tbody>
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	(int) 14 => object(Cake\ORM\Entity) {

		'article_id' => (int) 8674,
		'category_id' => (int) 21,
		'title' => 'Increase in Direct Tax Collections',
		'description' => '<h3>Why in News</h3>
<p>India&rsquo;s direct tax collections in the first two and a half months (April - June) of <strong>2021-22</strong> stand at nearly <strong>Rs. 1.86 lakh crore</strong>, which is <strong>double the collections over the same period of last year</strong> that was affected by the national lockdown.</p>
<ul style="list-style-type: square;">
<li>The collections last year over the same period were Rs. 92,762 crore.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1624448049_image2.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1624448049_image2.jpg" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="309" height="726" /></a></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Surge in Direct Tax Collections:</strong><br />
<ul style="list-style-type: circle;">
<li>It includes <strong>Corporation Tax collections</strong> of Rs. 74,356 crore and P<strong>ersonal Income Tax inflows</strong>, which include the <strong>Security Transaction Tax</strong> of Rs. 1.11 lakh crore.</li>
<li>The jump in the direct tax collections <strong>reflects healthy exports</strong> and a <strong>continuation of various industrial and construction activities.</strong></li>
<li>It is expected that <a href="/daily-updates/daily-news-analysis/gdp-revival-forecast-rbi#:~:text=The%20real%20GDP%20growth%20in,the%20Q1%20of%202021%2D22." target="_blank" rel="noopener"><strong>GDP (Gross Domestic Product)</strong> </a>will record a<strong> double-digit expansion</strong> in <strong>Quarter 1 of 2021-22.</strong></li>
</ul>
</li>
<li><strong>Direct Tax:</strong><br />
<ul style="list-style-type: circle;">
<li>A direct tax is a tax that a person or organization pays directly to the entity that imposed it.</li>
<li>An individual taxpayer, for example, pays direct taxes to the government for various purposes, including income tax, real property tax, personal property tax, or taxes on assets.</li>
</ul>
</li>
<li><strong>Corporation Tax:</strong><br />
<ul style="list-style-type: circle;">
<li>Corporation tax is a direct tax<strong> imposed on the net income or profit</strong> that enterprises make from their businesses.</li>
<li>Companies, both public and privately registered in India under the <strong>Companies Act 1956</strong>, are liable to pay corporation tax.</li>
<li>This tax is<strong> levied at a specific rate</strong> according to the provisions of the <strong><a href="/loksabha-rajyasabha-discussions/policy-watch-direct-tax-code" target="_blank" rel="noopener">Income Tax Act, 1961</a>.</strong></li>
<li>In September 2019, India slashed corporate tax rates <strong>to 22% from 30%</strong> for <strong>existing companies</strong> and to <strong>15% from 25%</strong> for new manufacturing companies.<br />
<ul style="list-style-type: disc;">
<li>Including a surcharge and cess, the effective tax rate for existing companies now stands at 25.17%, down from 35%.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Security Transaction Tax (STT):</strong><br />
<ul style="list-style-type: circle;">
<li>It is a direct tax <strong>charged on purchase and sale of securities</strong> that are listed on the recognized stock exchanges in India.</li>
<li>Both purchaser and seller need to pay <strong>0.1% of share value</strong> as STT.</li>
</ul>
</li>
<li><strong>Advance Tax Collections:</strong><br />
<ul style="list-style-type: circle;">
<li>Advance tax is <strong>paid by those who have tax liability of Rs. 10,000 or more</strong> in a financial year. It is <strong>paid by both salaried and businesses</strong>, thus including collections from corporate tax and personal income tax.</li>
<li>Advance tax is paid as and when the money is earned <strong>in four instalments</strong> rather than at the end of the <strong>fiscal year.</strong></li>
<li>It is considered an indication <strong>of economic sentiment.</strong></li>
<li>The <strong>first instalment</strong> or 15% of the annual tax is to be paid by 15<sup>th&nbsp;</sup>June, the <strong>second</strong> <strong>by</strong> 15<sup>th</sup> September (30%), the <strong>third by</strong> 15<sup>th</sup> December (30%), and the rest by 15<sup>th</sup> March.</li>
</ul>
</li>
<li><strong>Dividend Distribution Tax (DDT):</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Dividend refers to the distribution of profits to shareholders</strong> of a company.</li>
<li>Thus, the dividend distribution tax is a type of tax that is payable on the dividends offered to its shareholders by the corporation.</li>
<li>In the <strong>Union Budget for 2020-2021</strong> the <strong>DDT was withdrawn from the tax paid by the dividend payer.</strong> Instead, from April 2021 on, dividends would be taxed in the hands of the recipients, i.e. shareholders of the distributing company.<br />
<ul style="list-style-type: disc;">
<li>The proposed rate is 10% for dividends paid to shareholders resident in India and 20% if paid to foreign investors.</li>
</ul>
</li>
</ul>
</li>
<li><strong>TDS/TCS:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Tax Deduction at Source:</strong> A person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government.</li>
<li><strong>Tax Collection at Source:</strong> It is an additional amount collected as tax by a seller of specified goods from the buyer at the time of sale over and above the sale amount and is remitted to the government account.</li>
</ul>
</li>
<li><strong>Government Initiatives to Improve Direct Taxes:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>For Personal Income Tax -</strong> The Finance Act, 2020 has provided an option to individuals and co-operatives for paying income-tax at concessional rates if they do not avail specified exemption and incentive.</li>
<li><strong>Vivad se Vishwas:</strong> Under <a href="/daily-updates/daily-news-analysis/direct-tax-vivad-se-vishwas-bill-2020" target="_blank" rel="noopener"><strong>Vivad se Vishwas</strong></a>, declarations for settling pending tax disputes are currently being filed.<br />
<ul style="list-style-type: disc;">
<li>This will benefit the Government by generating timely revenue and also to the taxpayers by bringing down mounting litigation costs.</li>
</ul>
</li>
<li><strong>Expansion of scope of TDS/TCS-</strong> For widening the tax base, several new transactions were brought into the ambit of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS).<br />
<ul style="list-style-type: disc;">
<li>These transactions include huge cash withdrawal, foreign remittance, purchase of luxury cars, e-commerce participants, sale of goods, acquisition of immovable property, etc.</li>
</ul>
</li>
<li><strong><a href="/daily-updates/daily-news-analysis/transparent-taxation-honoring-the-honest" target="_blank" rel="noopener">&lsquo;Transparent Taxation - Honoring The Honest&rsquo;</a> platform:</strong> It is aimed at bringing transparency in income tax systems and empowering taxpayers.</li>
</ul>
</li>
</ul>
<p><a href="https://www.thehindu.com/business/Economy/direct-tax-collections-surge-in-2021-22/article34831432.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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	(int) 15 => object(Cake\ORM\Entity) {

		'article_id' => (int) 8659,
		'category_id' => (int) 22,
		'title' => '1991 Reforms & 2021 Crisis',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.hindustantimes.com/opinion/from-1991-the-lessons-for-the-india-of-2021-101624118192034.html" target="_blank" rel="noopener"><strong>&ldquo;From 1991, the lessons for the India of 2021&rdquo;</strong></a> which was published in The Hindustan Times on 19/06/2021. It talks about the 30 years of 1991 reforms and lessons that can be learned from it in dealing with the economic crisis induced by Covid-19 pandemic.</p>
</div>
<p>Thirty years ago, the <a href="/pdf/1606104094-25-years-of-1991-reforms.pdf" target="_blank" rel="noopener"><strong>liberalization regime launched in 1991</strong></a> completed its 30 years in 2021. The 1991 was a landmark moment in India&rsquo;s post-independence history that changed the nature of the economy in fundamental ways.</p>
<p>A severe balance of payments problem triggered an acute economic crisis in 1991. In response, India&rsquo;s economic establishment launched a multipronged reforms agenda to repair India&rsquo;s macroeconomic balance sheet and ignite growth.</p>
<p>Three decades later, the country faces another big test due to the Covid-19 pandemic. While the two crises differ vastly in content and structure, they are completely comparable in their respective severities.</p>
<h3>Significance of 1991 Reforms</h3>
<p><strong>India&rsquo;s Post-1990 Economic Strategy</strong></p>
<ul style="list-style-type: square;">
<li>It dismantled the vast network of controls and permits that dominated the economic system.</li>
<li>It redefined the role of the state as a facilitator of economic transactions and as a neutral regulator rather than the primary provider of goods and services.</li>
<li>It led to moving away from a regime of import substitution and to integrate fully with the global trading system.</li>
</ul>
<p><strong>Effect of Reforms</strong></p>
<ul style="list-style-type: square;">
<li>By the first decade of the 21<sup>st</sup> century, India began to be seen as one of the fastest growing emerging markets.</li>
<li>The 1991 reforms unleashed the energies of Indian entrepreneurs, gave untold choice to consumers and changed the face of the Indian economy.</li>
<li>Far from poverty increasing, for the first time, there was a substantial reduction in it.</li>
</ul>
<h3>Comparing 1991 Crisis With 2021</h3>
<p><strong>High Fiscal Deficit</strong></p>
<ul style="list-style-type: square;">
<li><strong>1991 Crisis:</strong> 1991 crisis was caused by excess domestic demand sucking in imports and widening the current account deficit (CAD). <br />
<ul style="list-style-type: circle;">
<li>A loss of confidence triggered an outflow of funds and financing CAD forced a sharp drawdown in reserves.</li>
</ul>
</li>
<li><strong>2021 Crisis:</strong> The pandemic-induced lockdown brought the wheels of economic activity to a grinding halt, triggering a sharp economic contraction.<br />
<ul style="list-style-type: circle;">
<li>This has resulted in a collapse in production following the disruption caused by the pandemic, which, in turn, has caused a fall in demand.</li>
<li>Faced with a collapse in demand, it is appropriate to increase the fiscal deficit. The government allowed the fiscal deficit to expand to 9.6% last year.</li>
</ul>
</li>
</ul>
<p><strong>Macroeconomic Situation</strong></p>
<ul style="list-style-type: square;">
<li><strong>1991 Crisis:</strong> India had to pledge tonnes of gold to stave off a default on sovereign debt. Then, we had almost run out of foreign exchange to pay for critical imports.</li>
<li><strong>2021 Crisis:</strong> Today, the economy is shrinking at a rapid pace, with the central government defaulting on its revenue commitments to the states. <br />
<ul style="list-style-type: circle;">
<li>Today, we have run out of jobs for our hordes of unemployed; poverty is increasing after decades of decline.</li>
</ul>
</li>
</ul>
<p><strong>Criticism of the Reform</strong></p>
<ul style="list-style-type: square;">
<li><strong>1991 Reforms:</strong> The 1991 reforms package faced heavy criticism as being dictated by the International Monetary Fund (IMF) and World Bank. <br />
<ul style="list-style-type: circle;">
<li>Further, some of the reforms were criticized as a sellout to capitalists.</li>
</ul>
</li>
<li><strong>2021 Reforms:</strong> Such a centralised approach to reforms may not work now. It can be seen in the protest emanating from <a href="/current-affairs-news-analysis-editorials/news-editorials/2020-12-01" target="_blank" rel="noopener"><strong>three farm laws.</strong></a></li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Sustaining Public Expenditure:</strong> In the short term, sustaining public expenditure is a key to reviving growth.<br />
<ul style="list-style-type: circle;">
<li>Currently public expenditure is highly desirable for providing more funds for vaccination and to cover expanded demand for the<a href="/daily-updates/daily-news-editorials/mgnrega-and-migrant-crisis" target="_blank" rel="noopener"><strong> MGNREGA</strong> </a>which is proving to be a valuable safety net.</li>
<li>Also, there is a need to undertake a credible path for deficit reduction over the next three years and revising revenue targets to a more realistic level.</li>
</ul>
</li>
<li><strong>Mutually Supportive Reforms:</strong> The 1991 reforms succeeded because they were structured around a core package of mutually supportive reforms.<br />
<ul style="list-style-type: circle;">
<li>Thus, the need is to move away from a long list of reforms towards a more strategic approach, focussing on the most critical reforms needed immediately.</li>
<li>In this context, the power sector, the financial system, governance structures and even agricultural marketing need reforms.</li>
</ul>
</li>
<li><strong>Improving Investment Climate:</strong> Investment is a key source of aggregate demand and economic growth. In this context:<br />
<ul style="list-style-type: circle;">
<li>Perceptions regarding growth prospects are key.</li>
<li>The policy framework must be supportive of fresh investments so that entrepreneurs are encouraged to take risks.</li>
<li>Non-economic factors such as a peaceful environment and social cohesion are also relevant.</li>
<li>The government must begin to act on all these fronts.</li>
</ul>
</li>
<li><strong>Maruti Model of Disinvestment:</strong> The government should reduce its ownership to 26% in each undertaking, including banks, to strategic partners, like it did under the Maruti disinvestment following 1991 reforms.<br />
<ul style="list-style-type: circle;">
<li>In this context, PSUs like Air India, BPCL, and Concor can be sold within the next six months, with the commitment that two dozen PSUs would be divested at the &lsquo;Maruti model&rsquo; every year for the next five years.</li>
<li>This will help in generating billions of rupees of investible surplus for the government.</li>
</ul>
</li>
<li><strong>Multi-stakeholders Approach:</strong> Today&rsquo;s reforms also require much more discussion and consensus-building. The central government needs to work in tandem with state governments and consult different stakeholders impacted by reform decisions.</li>
</ul>
<h3>Conclusion</h3>
<p>The 1991 reforms helped the economy stave off a crisis and then bloom. It is time to outline a credible new reform agenda that will not just bring GDP back to pre-crisis levels, but also ensure growth rates higher than it had when it entered the pandemic.</p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #f7f8ff;">
<p><span style="color: #800000;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>1991 reforms energised the Indian economy and lifted millions out of poverty. As India grapples with a post-pandemic economic crisis, there are lessons on what to reform and how. Discuss.</p>
</td>
</tr>
</tbody>
</table>
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	(int) 16 => object(Cake\ORM\Entity) {

		'article_id' => (int) 8612,
		'category_id' => (int) 22,
		'title' => 'Global Minimum Tax',
		'description' => '<div class="border">
<p>This article is based on <a href="https://indianexpress.com/article/opinion/columns/g7-summit-global-minimum-tax-corporate-tax-rates-7359184/" target="_blank" rel="noopener"><strong>&ldquo;Illusion of redistributive justice&rdquo;</strong></a> which was published in The Indian Express on 15/06/2021. It talks about the issues associated with the proposed global minimum tax.</p>
</div>
<p>The recent G7 meeting saw the finance ministers of the seven nations communicating their commitment to a <a href="/daily-updates/daily-news-analysis/global-minimum-corporate-tax-rate-g7#:~:text=About%3A,enterprises%20make%20from%20their%20businesses." target="_blank" rel="noopener"><strong>global minimum tax</strong></a> (GMT) of at least 15 per cent and sharing the excess profits of the 100 largest companies with the countries where they operate.</p>
<p>Since the inception of the <a href="/mains-practice-question/question-223#:~:text=Base%20erosion%20and%20profit%20shifting%20(BEPS)%20refers%20to%20tax%20avoidance,low%20or%20no%2Dtax%20locations." target="_blank" rel="noopener"><strong>Base Erosion and Profit Shifting (BEPS) programme</strong></a>, the proposal for GMT is another positive step towards global taxation reforms.</p>
<p>This aims to stop giant companies from shifting their profits to low-tax havens via what are basically shell companies. Another rationale that runs behind this proposal is the rise of money laundering and terror financing.</p>
<p>However, there are many issues associated with GMT, especially pertaining to the developing world. These issues must be resolved before coming to the final agreement.</p>
<h3>Understanding Tax Haven</h3>
<ul style="list-style-type: square;">
<li><strong>Definition:</strong> A tax haven is generally an offshore country that offers foreign individuals and businesses little or no tax liability in a politically and economically static environment.</li>
<li><strong>Characteristics:</strong> Characteristics of tax haven countries generally include no or low-income taxes, minimal reporting of information, lack of transparency obligations, lack of local presence requirements, and marketing of tax haven vehicles.</li>
<li><strong>Modus Operandi:</strong> Generally, tax havens do not require residency or business presence for individuals and businesses to benefit from their tax policies. <br />
<ul style="list-style-type: circle;">
<li>Individuals and corporations can potentially benefit from low or no taxes charged on income in foreign countries where loopholes, credits, or other special tax considerations may be allowed in accordance with the law.</li>
<li>An IMF research paper estimated that $12 trillion of global corporate investment was &ldquo;just phantom investment&rdquo; to avoid tax.</li>
</ul>
</li>
<li><strong>Popular Tax Havens:</strong> A list of some of the most popular tax haven countries includes Andorra, the Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, the Channel Islands, the Cook Islands, Hong Kong, Mauritius, Lichtenstein, Monaco, Panama, British Virgin Islands, and the Cayman Islands.</li>
<li><strong>Intranational Tax Havens</strong>: In some cases, intranational locations may also be identified as tax havens if they have special tax laws.</li>
<li><strong>Regulatory Oversight:</strong> Worldwide, there are some programs in place to increase the enforcement of offshore investment reporting. The Automatic Exchange of Financial Information is one example, overseen by OECD.<br />
<ul style="list-style-type: circle;">
<li>To maximize tax receipts, many foreign governments maintain relatively constant pressure on tax havens to release information regarding offshore investment accounts.</li>
<li>However, because of the monetary burdens, regulatory oversight may not always be a top national priority.</li>
</ul>
</li>
</ul>
<h3>How Will GMT Work?</h3>
<ul style="list-style-type: square;">
<li><strong>Taxing Ultimate Parent Entities:</strong> It gives the jurisdictions of the ultimate parent entities &mdash; of firms with revenue above 750 million euros &mdash; the first right to tax the differential between the actual and the effective tax rate.</li>
<li><strong>Mirror Rule:</strong> A mirror rule that gives source countries such as India the right to withhold a higher rate on cross-border payments to low-tax jurisdictions is subject to certain thresholds and more so would require bilateral treaty renegotiations unlike the rules applicable to residence countries.</li>
</ul>
<h3>Associated Issues With GMT</h3>
<ul style="list-style-type: square;">
<li><strong>Race To Bottom:</strong> The minimum tax will essentially imply that even tax incentives that exist in treaty rates or local tax systems may no longer be available. <br />
<ul style="list-style-type: circle;">
<li>This remains a problem for developing and underdeveloped countries, where tax incentives work in attracting investment.</li>
<li>Even for a country like India, the recent push to bring foreign investors through the international financial services centre is an incentive.</li>
</ul>
</li>
<li><strong>Exclusivist in Nature:</strong> The proposal of GMT is exclusivist in nature, as the rules for the world were being decided by select developed countries. <br />
<ul style="list-style-type: circle;">
<li>Further, there concerns of loss of sovereignty to tax remain for developing countries.</li>
</ul>
</li>
<li><strong>Counteractive Effect:</strong> If all nations do not agree to the global minimum tax proposal, it may spark a new sort of competition &mdash; corporations will search for countries without the minimum tax rule as their residence. <br />
<ul style="list-style-type: circle;">
<li>This inturn will result in creation of new tax havens.</li>
</ul>
</li>
<li><strong>Dualistic Nature of Developed Countries:</strong> Britain has long connived in creating tax havens in British territories like Bermuda, British Virgin Islands, Cayman Islands, and the Channel Islands. <br />
<ul style="list-style-type: circle;">
<li>Further, some countries, including India, have already started taxing digital MNCs on the basis of their revenue. It was the US administration that threatened India and other such countries with retaliation.</li>
</ul>
</li>
<li><strong>Impeding Development in Developing Countries:</strong> A 15% minimum corporate tax will hit not just tax havens but countries, including India, that offer tax breaks for specific purposes &mdash; export industries, investment in backward areas or Special Economic Zones, green investments, R&amp;D, accelerated depreciation, and affecting other legitimate incentives.</li>
</ul>
<h3>Conclusion</h3>
<p>The simplest, most honest solution is to decree an Alternative Minimum Tax of 15% regardless of tax breaks. Any country wishing to attain political or social goals through special incentives will have to do so through budgetary grants, not tax concessions.</p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #fafffa;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>The proposal for Global Minimum Tax is a positive step towards global taxation reforms. However, there are many issues associated with it, especially pertaining to the developing world. Discuss.</p>
</td>
</tr>
</tbody>
</table>',
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	(int) 17 => object(Cake\ORM\Entity) {

		'article_id' => (int) 8586,
		'category_id' => (int) 21,
		'title' => 'El Salvador Adopts Bitcoin as Legal Tender',
		'description' => '<h3>Why in News</h3>
<p><strong>El Salvador, a small coastal country in Central America</strong> has become the <strong>first in the world</strong> to adopt <a href="/daily-updates/daily-news-analysis/bitcoins" target="_blank" rel="noopener"><strong>Bitcoin</strong></a>, as <strong>legal tender.</strong></p>
<ul style="list-style-type: square;">
<li><strong>Legal tender</strong> is the <strong>legally recognized money</strong> within a given political jurisdiction.</li>
</ul>
<p style="text-align: center;"><a href="http://www.drishtiias.com/images/uploads/1623409710_image4.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1623409710_image4.png" caption="false" width="463" height="263" /></a></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Bitcoin:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Introduction:</strong><br />
<ul style="list-style-type: disc;">
<li>Introduced in 2009, it is a type of <a href="/daily-updates/daily-news-editorials/cryptocurrency-and-india" target="_blank" rel="noopener"><strong>cryptocurrency</strong></a> that enables instant payments to anyone. <br />
<ul style="list-style-type: disc;">
<li><strong>Cryptocurrency</strong> is a specific type of <strong>virtual currency,</strong> which is decentralised and protected by cryptographic encryption techniques.</li>
<li><strong>Bitcoin, Ethereum, Ripple</strong> are a few notable examples of cryptocurrencies.</li>
</ul>
</li>
<li>Bitcoin is based on an<strong> open-source protocol</strong> and is not issued by any <strong>central authority.</strong></li>
</ul>
</li>
<li><strong>Use:</strong><br />
<ul style="list-style-type: disc;">
<li>Originally, Bitcoin was intended to provide an alternative to <a href="/current-affairs-news-analysis-editorials/news-analysis/05-03-2020/print" target="_blank" rel="noopener"><strong>fiat money</strong> </a>and become a universally accepted medium of exchange directly between two involved parties.<br />
<ul style="list-style-type: disc;">
<li>Fiat money is a government-issued currency that is not backed by a commodity such as gold.</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li><strong>Reason behind this Decision:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Loss on Remittances:</strong><br />
<ul style="list-style-type: disc;">
<li><strong>El Salvador</strong> relies heavily on<strong> money sent back from workers abroad.</strong></li>
<li>Bitcoin adoption may make these <strong>remittances quicker and cheaper.</strong></li>
</ul>
</li>
<li><strong>Boost Financial Inclusion:</strong><br />
<ul style="list-style-type: disc;">
<li>It is also expected to <strong>boost financial inclusion</strong> in their country as the majority of the population does not have access to formal banking channels.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Concerns:</strong><br />
<ul style="list-style-type: circle;">
<li>In the absence of a <strong>central regulating authority</strong>, legalizing bitcoin will have potential for <strong>fraud and money laundering, high energy costs and extreme volatility.</strong></li>
</ul>
</li>
<li><strong>Implications for the Crypto World:</strong><br />
<ul style="list-style-type: circle;">
<li>This could<strong> potentially encourage</strong> other <strong>smaller countries with weaker economies</strong> to open up to<strong> crypto</strong> as an alternative to <strong>fiat currencies,</strong> paving the way for mainstream future adoption worldwide.</li>
<li>Already, <strong>Venezuela and many African countries</strong> have started using cryptocurrencies as a long term store of value, as their currencies are deflating quickly.</li>
</ul>
</li>
<li><strong>Some Lessons for India:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Not a Instance for Monetary Policy:</strong><br />
<ul style="list-style-type: disc;">
<li>El Salvador does not have its <strong>own monetary policy,</strong> hence, no local currency to protect. It runs on the monetary policy of the US Federal Reserve. <br />
<ul style="list-style-type: disc;">
<li>Therefore, any changes in Federal Reserve policies will definitely affect the Country. Hence, it is looking at such alternatives.</li>
</ul>
</li>
<li>Since,<strong> India has its own currency and a central bank,</strong> therefore coexistence of bitcoin and rupee side by side becomes difficult.</li>
</ul>
</li>
<li><strong>Impact on Remittances:</strong><br />
<ul style="list-style-type: disc;">
<li>The impact <strong>Bitcoin has on remittance inflows</strong> would be worth monitoring for India, which is home to the <strong>largest remittance market in the world.</strong><br />
<ul style="list-style-type: disc;">
<li>According to a <strong><a href="/daily-updates/daily-news-analysis/report-on-global-remittances-world-bank" target="_blank" rel="noopener">World Bank report</a>, India</strong> received over <strong>USD 83 billion</strong> in remittances in <strong>2020.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Impact on Money Laundering:</strong><br />
<ul style="list-style-type: disc;">
<li>The implication of this move for money laundering is unclear at the moment.</li>
<li>Currently, El Salvador is not considered deficient under the <a href="/daily-updates/daily-news-analysis/fatf-retains-pakistan-in-grey-list" target="_blank" rel="noopener"><strong>Financial Action Task Force (FATF)</strong> </a>money laundering requirements.</li>
<li>However, with large scale cryptocurrency inflows and outflows, it would be expected that El Salvador would comply with the 2019 FATF guidance on Virtual Currencies.</li>
</ul>
</li>
</ul>
</li>
<li><strong>India&rsquo;s Current Stand on Cryptocurrency:</strong><br />
<ul style="list-style-type: circle;">
<li>In 2018, <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener"><strong>The Reserve Bank of India (RBI)</strong> </a>issued a circular preventing all banks from dealing in cryptocurrencies. This circular was declared unconstitutional by the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/supreme-court-of-india" target="_blank" rel="noopener"><strong>Supreme Court</strong> </a>in May 2020.</li>
<li>Recently, the government has announced to introduce a bill; <strong>Cryptocurrency and Regulation of Official Digital Currency Bill, 2021,</strong> to create a sovereign digital currency and simultaneously ban all private cryptocurrencies.</li>
<li>In India, the funds that have gone into the Indian blockchain start-ups account for less than 0.2% of the amount raised by the sector globally.</li>
<li>The current approach towards cryptocurrencies makes it near-impossible for blockchain entrepreneurs and investors to acquire much economic benefit.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>The <strong>overall takeaway</strong> for India from the El Salvador case is <strong>not</strong> in the<strong> monetary sense</strong> at all but as an example of how far countries are willing to go to attract what they believe is the ultimate prize &ndash; <strong>innovators and entrepreneurs working on this emerging sector.</strong></li>
<li>This is the <strong>wealth that India has definitely and has barely protected with policy.</strong></li>
<li>While deliberations continue in India on the monetary and financial regulations around cryptocurrency, it is important that attention be paid to incentives for India&rsquo;s developers working on key innovations in the space.</li>
</ul>
<p><a href="https://indianexpress.com/article/explained/explained-what-el-salvador-legalising-bitcoin-means-for-india-7351272/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 8558,
		'category_id' => (int) 21,
		'title' => 'Saral Jeevan Bima: IRDAI',
		'description' => '<h3>Why in News</h3>
<p>Saral Jeevan Bima, <strong>launched by <a href="/daily-updates/daily-news-analysis/new-rules-for-increased-fdi-in-insurance-sector" target="_blank" rel="noopener">IRDAI</a> (Insurance Regulatory and Development Authority of India) in 2020</strong>, has become a popular <strong>term life insurance product</strong> among masses.</p>
<ul style="list-style-type: square;">
<li>IRDAI is an <strong>autonomous body</strong> that was established <strong>in 1999</strong> to regulate and develop the insurance industry.</li>
</ul>
<div class="border-bg">
<p><strong>Term Life Insurance</strong></p>
<ul style="list-style-type: square;">
<li>Term life insurance guarantees payment of a stated death benefit to the insured's beneficiaries if the insured person dies during a specified term.</li>
<li>These policies have no value other than the guaranteed death benefit and feature no savings component as found in a whole life insurance product.</li>
<li>Term life premiums are based on a person&rsquo;s age, health, and life expectancy.</li>
</ul>
</div>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li>IRDAI in October 2020<strong> had mandated all life insurers to launch the Saral Jeevan Bima</strong> plans from 1<sup>st </sup>January 2021.</li>
<li>Saral Jeevan Bima is <strong>a regulator-mandated standard term life insurance plan</strong> offering basic <strong>protection to people who are self-employed or belong to a lower income category.</strong></li>
<li>It is a pure term life insurance product that <strong>can be purchased by people in the age group of 18 to 65 years</strong> and will have <strong>a policy term of 5 to 40 years.</strong></li>
<li>The <strong>sum assured</strong> for the term life insurance policy ranges from <strong>Rs 5 lakh</strong> to <strong>Rs 25 lakh</strong> (in multiples of Rs 50,000).<br />
<ul style="list-style-type: circle;">
<li>However, the insurer will have the <strong>option of providing a sum assured beyond Rs 25 lakh.</strong></li>
</ul>
</li>
<li>It <strong>provides for payment of sum assured in lump sum to the nominee</strong> in case of the life assured&rsquo;s unfortunate death during the policy term.</li>
<li>There are <strong>no exclusions, other than suicides.</strong></li>
</ul>
<p><a href="https://indianexpress.com/article/business/saral-jeevan-bima-bridging-the-gap-between-india-and-bharat-7347895/lite/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 8556,
		'category_id' => (int) 22,
		'title' => 'Importance of Blue Economy',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.hindustantimes.com/opinion/after-the-pandemic-the-centrality-of-the-blue-economy-in-recovery-101623076536394.html" target="_blank" rel="noopener"><strong>&ldquo;After the pandemic, the centrality of the Blue Economy in recovery&rdquo;</strong> </a>which was published in The Hindustan Times on 07/06/2021. It talks about the importance of the Blue economy as a model of development.</p>
</div>
<p>One of the major challenges following the pandemic is the loss of livelihoods and jobs. One of the ways for recovery and growth can go through the ocean. The <a href="/to-the-points/paper3/blue-economy" target="_blank" rel="noopener"><strong>Blue Economy</strong> </a>represents enormous potential for sustainable economic activity and job creation after the crisis.</p>
<p>India has a unique maritime position, with a 7,517-km long coastline and an Exclusive Economic Zone of over two million sq-km. Having vast ocean resources at their disposal &ndash; presenting a huge opportunity for boosting their economic growth and to tackle unemployment, food security and poverty.</p>
<p>The resources in these areas can spur India&rsquo;s economic recovery in a manner that is also beneficial to our climate and environment.</p>
<h3>Blue Economy vs Ocean Economy</h3>
<ul style="list-style-type: square;">
<li>The &lsquo;Blue Economy&rsquo; is an emerging concept which encourages better stewardship of our ocean or &lsquo;blue&rsquo; resources.</li>
<li>Similar to the &lsquo;Green Economy&rsquo;, the blue economy model aims for improvement of human wellbeing and social equity, while significantly reducing environmental risks and ecological scarcities.</li>
<li>International society believes that the blue economy covers three economic forms: <br />
<ul style="list-style-type: circle;">
<li>Economy coping with global water crisis</li>
<li>Innovative development economy</li>
<li>Development of marine economy</li>
</ul>
</li>
<li>It is important to note that the blue economy goes beyond viewing the ocean economy solely as a mechanism for economic growth.</li>
<li>In the ocean economy model, large-scale industrial nations sought to exploit the maritime and marine resources, often without a view to the effects their activities have on the future health or productivity of those same resources.<br />
<ul style="list-style-type: circle;">
<li>For example through shipping, commercial fishing, and the oil, gas, minerals and mining industries.</li>
</ul>
</li>
<li>The blue economy is not just about market opportunities; it also provides for the protection and development of more intangible &lsquo;blue&rsquo; resources.<br />
<ul style="list-style-type: circle;">
<li>For example, traditional ways of life, carbon sequestration, and coastal resilience to help vulnerable states mitigate the often devastating effects of climate change.</li>
</ul>
</li>
<li>It provides for an inclusive model in which coastal states - which sometimes lack the capacity to manage their rich ocean resources - can begin to extend the benefit of those resources to all.</li>
</ul>
<h3>Significance of Blue Economy</h3>
<ul style="list-style-type: square;">
<li><strong>High Return on Investment:</strong> New research commissioned by the high-level panel for a sustainable ocean economy, co-chaired by the Norwegian Prime Minister (PM), shows that every dollar invested in key ocean activities yields five times i.e. $5 in return, often more.<br />
<ul style="list-style-type: circle;">
<li>It is for good reason that the Government of India (GOI)&rsquo;s Vision of New India by 2030 highlighted the Blue Economy as one of the 10 core dimensions of growth.</li>
</ul>
</li>
<li><strong>Synergy With SDG:</strong> It supports all of the <a href="/to-the-points/paper3/sustainable-development-3" target="_blank" rel="noopener"><strong>United Nations&rsquo; Sustainable Development Goals (SDGs)</strong></a>, especially SDG14 &lsquo;life below water&rsquo;.</li>
<li><strong>Sustainable Energy:</strong> Supporting the increasing demand for renewable energy, offshore regions have tremendous potential in the form of offshore wind, waves, ocean currents including tidal currents, and thermal energy.</li>
<li><strong>Importance For India:</strong> With an over 7,500-km-long coastline spread across nine coastal states, 12 major, and 200 minor ports, India's blue economy supports 95% of the country's business through transportation and contributes an estimated 4% to its Gross Domestic Product (GDP).<br />
<ul style="list-style-type: circle;">
<li>All the sectors across the blue economy have the potential to engage a large workforce and have been doing so from the past many decades at least in sectors such as fishing, aquaculture, fish processing, marine tourism, shipping and port activities.</li>
<li>Now, engagement in new sectors such as offshore wind, marine biology, biotechnology, and other activities like shipbuilding and ship breaking is also rising extensively.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Providing Blue Stimulus:</strong> A Sustainable and Equitable Blue Recovery to the COVID-19 Crisis report, highlights five blue stimulus actions that can spur recovery and build a sustainable ocean economy in India and globally.<br />
<ul style="list-style-type: circle;">
<li>These include investments in coastal and marine ecosystem protection; sewage and wastewater infrastructure for coastal communities; and sustainable marine aquaculture.</li>
<li>They also include incentives for zero-emission marine transport and sustainable ocean-based renewable energy.</li>
</ul>
</li>
<li><strong>International Cooperation: <a href="/daily-updates/daily-news-analysis/draft-blue-economy-policy" target="_blank" rel="noopener">India-Norway Integrated Ocean Management Initiative</a></strong> is a good example, whereby researchers and officials are cooperating on improving the governance of ocean resources through marine spatial planning.</li>
<li><strong>Education In Blue Economy:</strong> The number and type of educational programmes on both the traditional and emerging sectors of the blue economy should be offered at universities and engineering/technical institutes for sustained supply of trainer personnel.</li>
<li><strong>Gandhian Approach:</strong> India should look to adopt the Gandhian approach of balancing economic benefits with sustainability for meeting the broader goals of growth, employment generation, equity and protection of environment.</li>
</ul>
<h3>Conclusion</h3>
<p>The ocean has a role to play in strengthening resilience to economic and environmental disruptions. Investing in shipping decarbonisation, sustainable seafood production and ocean-based renewable energy provides for better health outcomes, richer biodiversity, more secure jobs and a safer planet for generations to come.</p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #edf3ff;">
<p><span style="color: #800000;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Blue economy for India means a number of economic opportunities related to ocean and marine ecosystems, playing an important role in generating and sustaining livelihoods. Discuss.</p>
</td>
</tr>
</tbody>
</table>
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