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Missed Annual Disinvestment Targets

Why in News The government has raised less than 3% of budgeted revenues from disinvestment in 2020-21. As a result, the fiscal deficit for the...

28 Jan 2021 Mobilization of Resources
Digital Services Tax

This article is based on “Digital Services Tax: Not about India vs US” which was published in The Indian Express on 25/01/2021. It...

27 Jan 2021 Mobilization of Resources
Green Bonds

Why in News As per a recent study by the Reserve Bank of India (RBI), the cost of issuing green bonds has generally remained higher than other...

25 Jan 2021 Mobilization of Resources
Premium for Traffic Violation

Why in News A Working Group set up by the Insurance Regulatory and Development Authority of India (IRDAI) for Traffic Management has recently...

23 Jan 2021 Mobilization of Resources
KIIFB Borrowings Issue

Why in News Recently, the Comptroller and Auditor General (CAG) of India has opined that the off-budget borrowings made by the Kerala Infrastructure...

21 Jan 2021 Mobilization of Resources
Tourism Sector In India

This article is based on “In our past lies our future… Indian tourism hasn’t marketed the precious assets embedded in our...

20 Jan 2021 Mobilization of Resources
Sustainable Mining

This article is based on “Mining in India equals selling the family gold” which was published in The Hindu on 19/01/2021. It talks...

19 Jan 2021 Mobilization of Resources
Bad Bank

Why in News Recently, the Reserve Bank of India (RBI) Governor has agreed to look at a proposal for creating a Bad Bank. Key Points About: A...

19 Jan 2021 Mobilization of Resources
Government's Disinvestment Plans

Why in News Recently, the Ministry of Finance has extended the bidding deadlines for the strategic disinvestment of Pawan Hans by a month, citing...

18 Jan 2021 Mobilization of Resources
India’s Potential to Increase Cereals Export

Why in News The US Department of Agriculture (USDA) has noted in its latest Grain: World Markets and Trade report that exports of wheat and rice...

15 Jan 2021 Mobilization of Resources
The Big Picture : One Nation, One Gas Grid

Why in News? The Prime Minister of India has recently inaugurated the 450-km natural gas pipeline between Kochi in Kerala to Mangalore in...

12 Jan 2021 Mobilization of Resources
Death Penalty For Sexual Offences

This article is based on “The wrong answer” which was published in The Indian Express on 06/01/2021. It talks about the issues related...

08 Jan 2021 Mobilization of Resources
Last Mile Challenges To Financial Inclusion

This article is based on “Not by digital alone” which was published in The Indian Express on 06/01/2021. It talks about the last mile...

07 Jan 2021 Mobilization of Resources
Payment Infrastructure Development Fund Scheme

Why in News Recently, the Reserve Bank of India (RBI) has announced the operationalisation of the Payment Infrastructure Development Fund (PIDF)...

07 Jan 2021 Mobilization of Resources
MSME Sector In India

This article is based on “Powering MSMEs in the next decade of growth” which was published in The Hindu Bussiness on 23/12/2020. It...

24 Dec 2020 Mobilization of Resources
PCA Ruling on Retrospective Taxation

Why in News Recently, the Permanent Court of Arbitration (PCA) has ruled that the Indian government was wrong in applying a retrospective tax on...

24 Dec 2020 Mobilization of Resources
Fraud Cases in Public Sector Banks

Why in News Public Sector Banks (PSBs) have been reviewing loan accounts and are expected to report more fraud cases in accounts which have earlier...

23 Dec 2020 Mobilization of Resources
Bitcoins

Why in News Recently, Bitcoin, the cryptocurrency, has crossed 20,000 US dollars in value. Bitcoin's price has always been volatile, and there is...

19 Dec 2020 Mobilization of Resources
National Security Directive

Why in News Recently, the Cabinet Committee on Security has approved the setting up of a new National Security Directive on the telecommunication...

18 Dec 2020 Mobilization of Resources
Vehicle Insurance in India

Why in News Recently, the Insurance Information Bureau of India released its annual report (Motor Annual Report 2018-19). Insurance Information...

14 Dec 2020 Mobilization of Resources

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		'title' => 'Missed Annual Disinvestment Targets',
		'description' => '<h3>Why in News</h3>
<p>The <strong>government has raised less than 3% of budgeted revenues from disinvestment in 2020-21.</strong> As a result, the <a href="/daily-updates/daily-news-analysis/increased-fiscal-deficit" target="_blank" rel="noopener"><strong>fiscal deficit</strong></a> for the current year is <strong>set to worsen.</strong></p>
<ul style="list-style-type: square;">
<li>The government describes fiscal deficit of India as &ldquo;the excess of total disbursements from the Consolidated Fund of India, excluding repayment of the debt, over total receipts into the Fund (excluding the debt receipts) during a financial year&rdquo;.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Disinvestment Targets for 2020-21:</strong> <br />
<ul style="list-style-type: circle;">
<li>Presenting the Union Budget of 2020, the Finance Minister had announced a <strong>disinvestment target of Rs 2.1 lakh crore.</strong> Such ambitious targets were set to keep the fiscal deficit under check.</li>
<li>However, the total disinvestment receipts from disinvestment so far this year have amounted to <strong>Rs. 17.9 thousand crore which is just around 3% of the targeted revenues. </strong></li>
</ul>
</li>
<li><strong>Reason for Low Revenues:</strong> <br />
<ul style="list-style-type: circle;">
<li>Annual<strong> targets were set three to four times the usual targeted revenue from disinvestment.</strong></li>
<li>The<strong> slow pace of sales of the public assets</strong> marked for disinvestment.</li>
<li>In the current year, all aspects of the government&rsquo;s functioning was severely impacted by the <a href="/daily-updates/daily-news-editorials/comprehensive-action-plan-for-covid-19" target="_blank" rel="noopener"><strong>Covid-19 pandemic</strong></a>.</li>
<li>It has been in trend that except in a few years, the <strong>government has been unable to raise as much money as it wanted</strong> at the start of the year from disinvestment.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1611830230_image3.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1611830230_image3.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="550" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li><strong>Meaning of Disinvestment:</strong><br />
<ul style="list-style-type: circle;">
<li>Disinvestment means sale or liquidation of assets by the government, usually Central and state public sector enterprises, projects, or other fixed assets.</li>
<li>The <a href="/daily-updates/daily-news-editorials/privatisation-of-pses" target="_blank" rel="noopener"><strong>government undertakes disinvestment</strong></a> to reduce the fiscal burden on the exchequer, or to raise money for meeting specific needs, such as to bridge the revenue shortfall from other regular sources.<br />
<ul style="list-style-type: disc;">
<li>For e.g. the Union government invests in several <a href="/to-the-points/paper3/sectors-of-indian-economy" target="_blank" rel="noopener"><strong>public sector undertakings</strong></a> (PSUs) such as Air India, Bharat Petroleum, Delhi Metro Rail Corporation etc.</li>
<li>Since it is the majority shareholder (meaning that it owns more than 51% of the shares), the Centre can raise money through the liquidation of its shareholding in these PSUs.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Types of Disinvestment Methods: </strong><br />
<ul style="list-style-type: circle;">
<li><strong>Minority Disinvestment:</strong> This type of disinvestment in PSUs is such that, at the end of it, if the government of <strong>India retains a majority stake (typically more than 51%)</strong> in the company, it ensures management control. <br />
<ul style="list-style-type: disc;">
<li>For e.g. Reduced government&rsquo;s share in Life Insurance Corporation in 2020.</li>
</ul>
</li>
<li><strong>Majority Disinvestment:</strong> When disinvestment in PSUs is such that, at the end of it, the <strong>government of India retains a minority stake</strong> in the company i.e. it sells off a majority stake.</li>
<li><strong>Complete Disinvestment or Privatization:</strong> It is a form of majority disinvestment wherein <strong>100% control of the company is passed on to a buyer</strong> i.e government of India completely disinvests from that PSU. <br />
<ul style="list-style-type: disc;">
<li>Like Bharat Aluminium Company, which was sold to the Vedanta group in 2001.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Reasons Behind Disinvesting in PSUs.</strong><br />
<ul style="list-style-type: circle;">
<li>Improving the overall efficiency of their functioning.</li>
<li><strong>Insulating them from political considerations</strong> overshadowing economic and corporate interests.<br />
<ul style="list-style-type: disc;">
<li>Especially when PSU transacts with the government &mdash; for example when it sells its products and services to the government, the pricing may be influenced by factors other than market factors.</li>
</ul>
</li>
<li>To make such a PSU more efficient as it would not be accountable to people and entities other than the government.</li>
<li>Private or corporate ownership could result in more efficient management.</li>
<li>Plugging budget deficits i.e. filling the gap between its expenditures and tax revenues.</li>
<li>Making more money available for other sectors like infrastructure and welfare schemes.</li>
</ul>
</li>
<li><strong>Changed Perspective about Disinvestment:</strong> <br />
<ul style="list-style-type: circle;">
<li>Before economic liberalisation, such efforts to monetise government&rsquo;s assets were criticised as selling the family silver.</li>
<li>But post-liberalisation, reducing government stake, especially in sectors such as the strategic sectors like defence where government presence is not necessary, disinvestment is welcomed.</li>
</ul>
</li>
<li><strong>Nodal Agency for Disinvestment: </strong><br />
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-analysis/strategic-disinvestment" target="_blank" rel="noopener"><strong>Department of Investment and Public Asset Management (DIPAM)</strong> </a>under the Ministry of Finance is tasked with managing the Centre&rsquo;s investments in the PSUs.</li>
<li>Sale of the Centre&rsquo;s assets falls within the mandate of DIPAM.</li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/explained/budget-nirmala-sitharaman-psu-coronavirus-economy-disinvestment-7162876/" target="_blank" rel="noopener"><strong>Source:IE</strong></a></p>',
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		'article_id' => (int) 7561,
		'category_id' => (int) 22,
		'title' => 'Digital Services Tax',
		'description' => '<div class="border">
<p>This article is based on <a href="https://indianexpress.com/article/opinion/digital-services-tax-not-about-india-vs-us-7161267/lite/" target="_blank" rel="noopener">&ldquo;Digital Services Tax: Not about India vs US&rdquo;</a> which was published in The Indian Express on 25/01/2021. It talks about the rationale and concerns associated with the digital services tax.</p>
</div>
<p>Recently, the <a href="/daily-updates/daily-news-analysis/indian-digital-tax-discriminatory-ustr" target="_blank" rel="noopener">United States Trade Representative (USTR) published a report concluding that the 2% digital services tax</a> (DST) introduced by the Indian government ( by the 2020 Finance Act) discriminates against US businesses and contravenes settled principles of international tax law.</p>
<p>The DST is aimed at ensuring that non-resident, digital service providers pay their fair share of tax on revenues generated in the Indian digital market. India&rsquo;s 2% DST is levied on revenues generated from digital services offered in India, including digital platform services, digital content sales, and data-related services.</p>
<p>As the digital economy is increasingly becoming a separate sector of the economy itself, developed countries like the US (where the majority of digital service providers come from) must understand that it would be now difficult to ring-fence the digital economy from the rest of the economy for tax purposes.</p>
<div class="border-bg">
<p><strong>Note:</strong></p>
<ul style="list-style-type: square;">
<li>India was one of the first countries in the world to introduce a <strong>6% equalization levy</strong> in 2016, but the levy was restricted to online advertisement services (commonly known as &ldquo;digital advertising taxes&rdquo; or &ldquo;DATs&rdquo;).</li>
<li>In March 2020, it expanded the scope of the existing equalization levy to a range of digital services that includes e-commerce platforms. Any payment made by non-residents in connection with an Indian user will now attract a 2% levy.</li>
</ul>
</div>
<h3>Concerns Raised by USTR &amp; Counterclaim</h3>
<ul style="list-style-type: square;">
<li>The USTR conducted an investigation under section 301 of the US Trade Act, 1974, which authorizes it to appropriately respond to a foreign country&rsquo;s action that is discriminatory and negatively affects US commerce.</li>
<li>The USTR report found the DST to be discriminatory on <strong>two counts</strong>. <br />
<ul style="list-style-type: circle;">
<li>First, it states that the DST discriminates against US digital businesses because it specifically <strong>excludes from its ambit domestic (Indian) digital businesses</strong>.</li>
<li>Second, according to the report, the DST does not extend to identical services provided by non-digital service providers.</li>
</ul>
</li>
<li>However, India clarified that the DST itself in no way discriminates based on the size of operations or nationality.<br />
<ul style="list-style-type: circle;">
<li>It may predominantly appear that DST is applicable to US companies because the market for digital services is dominated by US-based firms.</li>
<li>Further, any company that has a permanent residence in India is excluded since it is already subject to tax in India.</li>
</ul>
</li>
</ul>
<h3>Rationale of DST</h3>
<ul style="list-style-type: square;">
<li><strong>Prolonged International Tax Law Negotiation:</strong> The agenda to reform international tax law so that digital companies are taxed where economic activities are carried out was formally framed within the <a href="/mains-practice-question/question-223" target="_blank" rel="noopener">OECD&rsquo;s base erosion and profit shifting program</a>.<br />
<ul style="list-style-type: circle;">
<li>However, seven years since its inception, it is still a work in progress.</li>
<li>Due to this, countries are worried that they might cede their right to tax incomes. Therefore, many countries have either proposed or implemented a digital services tax.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Note:</strong></p>
<ul style="list-style-type: square;">
<li>Base erosion and profit shifting (BEPS) refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li><strong>Changing International Economic Order:&nbsp;</strong>The proliferation of digital service taxes (DSTs) is a symptom of the changing international economic order. <br />
<ul style="list-style-type: circle;">
<li>Countries such as India which provide large markets for digital corporations seek a greater right to tax incomes.</li>
</ul>
</li>
<li><strong>Asymmetrical Digital Power:</strong> The taxation of the digitaliized economy turned out to be a relatively contentious issue because there is a huge asymmetry in digital service providers and consumers.<br />
<ul style="list-style-type: circle;">
<li>Further, a redistribution of taxing rights can have significant revenue implications for countries like India and the US. This makes a consensus-based solution harder to achieve.</li>
<li>Thus, countries claim that the exponential increase of the digital economy and the digitalization of the traditional economy require the adoption of new tax rules.</li>
</ul>
</li>
</ul>
<h3>Associated Concerns With DST</h3>
<ul style="list-style-type: square;">
<li><strong>Eventually Burdening Digital Consumers:</strong> Experts suggest that DST can be passed on to consumers. While the Indian customer may not pay this as a tax, this could mean higher prices, contrary to the claim that it taxes the company.</li>
<li><strong>Retaliatory Tariffs:</strong> The USTR investigations could pose a threat of retaliatory tariffs, as similar tariffs were imposed by the US on France.<br />
<ul style="list-style-type: circle;">
<li>Further, it could turn into a <strong>digital trade war-like scenario</strong> and could harm India&rsquo;s Information and communication technology industry.</li>
</ul>
</li>
<li><strong>Double Taxation:</strong> This was severely criticized by many countries as a unilateral measure that would result in double taxation.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>New Model of Digital Taxation:</strong> The core problem that the international tax reform seeks to address is that digital corporations, unlike their brick-and-mortar counterparts, can operate in a market without a physical presence. <br />
<ul style="list-style-type: circle;">
<li>Therefore, taxing in a particular jurisdiction may not augur well with the growth of the digital economy.</li>
<li>To overcome this challenge, countries suggested that a new basis to tax, say, the number of users in a country, could address the challenge to some extent.</li>
<li>The EU and India were among the advocates of this approach.</li>
</ul>
</li>
<li><strong>Expediting Multilateral Negotiations:</strong> While the digital economy and its implications continue to evolve, the multilateral solution at the level of the OECD must be expedited.<br />
<ul style="list-style-type: circle;">
<li>Moreover, it would also require political consensus on multiple issues, including sensitive matters such as setting up of an alternative dispute resolution process comparable to arbitration.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>As countries calibrate their response to competing demands for sovereignty to tax, DST is an interim alternative outside tax treaties. It possesses the advantage of taxing incomes that currently escape tax and creates space to negotiate a final, overarching solution to this conundrum.</p>
<table border="1" style="border-collapse: collapse; background-color: #dcf6fa; border-color: #1da1b5;">
<tbody>
<tr>
<td style="width: 100%;"><em><strong>Drishti Mains Question</strong></em><br /><br />As countries calibrate their response to the growing implications of the digital economy, Digital Services Tax is an interim alternative outside tax treaties. Discuss.</td>
</tr>
</tbody>
</table>
<p style="text-align: center;"></p>
<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/acSeBqfO2UA" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p style="text-align: center;">This editorial is based on <a href="https://indianexpress.com/article/opinion/editorials/climate-change-donald-trump-joe-biden-us-elections-7160172/" target="_blank" rel="noopener">&ldquo;Changing climate&rdquo;</a> published in The Indian Express on January 25<sup>th</sup>, 2020. Now watch this on our Youtube channel.</p>',
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		'article_id' => (int) 7546,
		'category_id' => (int) 21,
		'title' => 'Green Bonds',
		'description' => '<h3>Why in News</h3>
<p>As per a recent study 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 (RBI)</strong></a>, the<strong> cost of issuing green&nbsp;</strong><strong>bonds has generally remained higher than<a href="/daily-updates/daily-news-analysis/special-zero-coupon-recapitalisation-bonds" target="_blank" rel="noopener"> other bonds</a> in India</strong>, largely due to asymmetric information.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Green Bonds (Description):</strong><br />
<ul style="list-style-type: circle;">
<li><strong>About:</strong><br />
<ul style="list-style-type: disc;">
<li>A green bond is a <strong>debt instrument</strong> with which <strong>capital is being raised to fund &lsquo;green&rsquo; projects,</strong> which typically include those relating to renewable energy, clean transportation, sustainable water management etc.<br />
<ul style="list-style-type: disc;">
<li>A bond is a <strong>fixed income instrument</strong> that represents a loan made by an investor to a borrower (typically corporate or governmental).</li>
<li>Bonds <strong>traditionally paid a fixed interest rate (coupon)</strong> to investors.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Growth:</strong><br />
<ul style="list-style-type: disc;">
<li>In 2007, green bonds were <strong>launched by few development banks</strong> such as the European Investment Bank and the <a href="/important-institutions/drishti-specials-important-institutions-international-institution/world-bank-group" target="_blank" rel="noopener"><strong>World Bank</strong></a>. Subsequently, in 2013, corporates too started participating, which led to its overall growth.</li>
</ul>
</li>
<li><strong>Regulation:</strong><br />
<ul style="list-style-type: disc;">
<li>The <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/securities-and-exchange-board-of-india-sebi" target="_blank" rel="noopener"><strong>Securities and Exchange Board of India (SEBI)</strong> </a>has put in place <strong>disclosure norms</strong> for issuance and listing of green bonds.</li>
</ul>
</li>
<li><strong>Benefits:</strong><br />
<ul style="list-style-type: disc;">
<li><strong>Enhances Reputation:</strong> <br />
<ul style="list-style-type: disc;">
<li>Green bonds enhance an <strong>issuer&rsquo;s reputation,</strong> as it helps in showcasing their commitment towards <a href="/to-the-points/paper3/sustainable-development-3" target="_blank" rel="noopener"><strong>sustainable development</strong></a>.</li>
</ul>
</li>
<li><strong>Fulfillment of Commitments:</strong><br />
<ul style="list-style-type: disc;">
<li>Ability to meet commitments, for signatories to climate agreements and other green commitments.</li>
<li>India&rsquo;s <strong><a href="/current-affairs-news-analysis-editorials/news-editorials/11-07-2019" target="_blank" rel="noopener">Intended Nationally Determined Contribution</a> (INDC)</strong> document puts forth the stated targets for India's contribution towards climate improvement and following a low carbon path to progress.</li>
</ul>
</li>
<li><strong>Raised at Lower Costs:</strong><br />
<ul style="list-style-type: disc;">
<li>Green bonds typically<strong> carry a lower interest rate</strong> than the loans offered by the commercial banks.</li>
<li>With an increasing focus of foreign investors towards green investments, it could help in reducing the cost of raising capital.</li>
</ul>
</li>
<li><strong>Sunrise Sectors:</strong><br />
<ul style="list-style-type: disc;">
<li>These green bonds have been crucial in <strong>increasing financing</strong> to<a href="/to-the-points/paper3/sectors-of-indian-economy" target="_blank" rel="noopener"><strong> sunrise sectors</strong> </a>like renewable energy, thus contributing to India&rsquo;s sustainable growth.</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li><strong>Details of RBI&rsquo;s Recent Study:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Current Share:</strong> <br />
<ul style="list-style-type: disc;">
<li>Green bonds constituted only <strong>0.7%</strong> of all the bonds issued in India<strong> since 2018.</strong><br />
<ul style="list-style-type: disc;">
<li>However,<strong> bank lending to the non-conventional energy</strong> (renewable energy) constituted about<strong> 7.9%</strong> of outstanding bank credit to the power sector, as of March 2020.</li>
</ul>
</li>
<li>Most of the green bonds in India <strong>are issued by the public sector units or corporates</strong> with better financial health.</li>
</ul>
</li>
<li><strong>Challenges: </strong><br />
<ul style="list-style-type: disc;">
<li><strong>High Coupon Rate:</strong><br />
<ul style="list-style-type: disc;">
<li>The average coupon rate for green bonds issued since 2015 with maturities between 5 to 10 years have generally <strong>remained higher than the corporate government bonds</strong> with similar tenure.</li>
</ul>
</li>
<li><strong>High Borrowing Cost:</strong><br />
<ul style="list-style-type: disc;">
<li>It has been the<strong> most important challenge due to the asymmetric information. High coupon rate is one of the reasons</strong> for high borrowing cost.</li>
<li><strong>Asymmetric information,</strong> also known as "information failure," occurs when one party to an economic transaction possesses greater material knowledge than the other party.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Suggestion:</strong><br />
<ul style="list-style-type: disc;">
<li><strong>Developing a better information management system</strong> in India may help in reducing maturity mismatches, borrowing costs and lead to efficient resource allocation in this segment.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Other Challenges:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Misuse of Funds:</strong><br />
<ul style="list-style-type: disc;">
<li>There have been serious debates about whether the projects targeted by green bond issuers are green enough because the proceeds of green bonds are being used to fund projects that harm the environment.</li>
</ul>
</li>
<li><strong>Lack of Credit Ratings:</strong><br />
<ul style="list-style-type: disc;">
<li>Lack of credit rating or rating guidelines for green projects and bonds.</li>
</ul>
</li>
<li><strong>Shorter Tenor Period:</strong><br />
<ul style="list-style-type: disc;">
<li>Green bonds in India have a shorter tenor period of about 10 years whereas a typical loan would be for a minimum 13 years. Further Green Projects require more time to bring returns.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>One of the foremost requirements is to<strong> harmonise international and domestic guidelines and standards for green bonds</strong> to develop a robust green bond market. Homogeneity is also required in terms of what constitutes green investments, as varied taxonomies would be antithetical to a cross-border green bond market.</li>
<li><strong>Appropriate capacity building efforts for issuers</strong> in emerging markets to spread knowledge on the benefits and related processes and procedures pertaining to green bonds, would help in addressing the institutional barriers to entry into this market.</li>
<li>In the context of green bonds, <strong>strategic public sector investment could help in attracting private investment</strong> as well as inspire investor confidence in the green bond market overall.</li>
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		'article_id' => (int) 7542,
		'category_id' => (int) 21,
		'title' => 'Premium for Traffic Violation',
		'description' => '<h3>Why in News</h3>
<p>A Working Group set up by the<a href="/daily-updates/daily-news-analysis/sandbox-for-fintech" target="_blank" rel="noopener"><strong> Insurance Regulatory and Development Authority of India</strong> </a>(IRDAI) for Traffic Management has recently proposed to add <strong>&ldquo;traffic violation premium&rdquo;</strong> to the vehicle insurance policy.</p>
<ul style="list-style-type: square;">
<li>Previously in <strong>September 2019,</strong> the IRDAI constituted the Working Group to examine the establishment of a system of Linking Motor Insurance Premium with Traffic Violations.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>About the Premium:</strong> <br />
<ul style="list-style-type: circle;">
<li>Vehicle owners may have to pay<strong> insurance premium</strong> depending on the <strong>traffic violations involving the vehicle.</strong></li>
<li>The working group has recommended inserting a <strong>fifth section to motor insurance</strong> called <strong>&ldquo;traffic violation premium&rdquo;</strong> in addition to <strong>motor own damage insurance, basic <a href="/daily-updates/daily-news-analysis/vehicle-insurance-in-india" target="_blank" rel="noopener">third-party insurance</a>, additional third party insurance and compulsory personal accident premium. </strong></li>
<li><strong>Calculation of Premium:</strong> <br />
<ul style="list-style-type: disc;">
<li>A system of calculating <strong>traffic violation points basis frequency and severity of different traffic offences.</strong></li>
<li>The amount of traffic violation premium will depend upon <strong>driving habits</strong> which will be determined by the <strong>number and types of challans.</strong></li>
<li>Traffic violation premium shall be payable by the<strong> registered owner of the vehicle,</strong> whether an individual or an entity.</li>
</ul>
</li>
<li><strong>Calculation of Points:</strong> <br />
<ul style="list-style-type: disc;">
<li>As per the table of offences provided by the working group, drinking driving will attract the highest penalty of<strong> 100 points,</strong> while wrong parking will have<strong> 10 points penalty.</strong> The <strong>amount of premium</strong> will be <strong>linked to these penalty points.</strong></li>
</ul>
</li>
<li><strong>Data Storage:</strong> <br />
<ul style="list-style-type: disc;">
<li>The data of traffic challans will be stored by the <a href="/daily-updates/daily-news-analysis/rojgaar-sangi" target="_blank" rel="noopener"><strong>National Informatics Centre</strong></a> (NIC) and shared with the<strong> Insurance Information Bureau of India</strong> (IIB) on a daily basis.<br />
<ul style="list-style-type: disc;">
<li>IIB aims to provide <strong>information support in a Complete, Consistent, and Concise manner,</strong> to all <strong>stakeholders associated</strong> either directly or indirectly with the <strong>Insurance Sector,</strong> including Insurers, Regulator and Government Agencies.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Mechanism:</strong> <br />
<ul style="list-style-type: disc;">
<li>The <strong>premium is on the vehicle and not on the driver.</strong> This means when a<strong> new vehicle is bought,</strong> it will start with a <strong>clean traffic violation history and its owner,</strong> when buying motor insurance, will <strong>not need to pay any traffic violation premium,</strong> even if he has a past traffic violation history, either as a driver of a vehicle owned by another person or his own vehicle of similar or a different category.</li>
<li><strong>However,</strong> if a person <strong>renews motor insurance,</strong> s/he will be <strong>assessed for her/his traffic violation points and traffic violation premium</strong> s/he needs to pay.</li>
<li>In case of <strong>transfer of insurance</strong> of a vehicle after sale, the traffic violation premium<strong> would start from ground zero</strong> from the date of vehicle ownership transfer and build depending upon the traffic violations caused by vehicle after ownership transfer.</li>
</ul>
</li>
<li><strong>Use of technology:</strong> <br />
<ul style="list-style-type: disc;">
<li>Insurance Information Bureau of India (IIB) will coordinate with <strong>various States Traffic Police and National Informatics Centre</strong> to capture the<strong> traffic violation data,</strong> calculate violation points of each violating vehicle and make this information available to all general insurers through IT system integration with insurers.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Road Accidents in India:</strong> <br />
<ul style="list-style-type: circle;">
<li>According to the <strong>Ministry of Road Transport, Road Accidents Report issued in 2018,</strong> India witnessed <strong>4.67 lakh road accidents</strong> that killed<strong> 1.51 lakh citizens.</strong></li>
<li>India ranks<strong> first in the number of road accident deaths</strong> across the <strong>199 countries</strong> reported in the <strong>World Road Statistics, 2018</strong> followed by China and US.</li>
</ul>
</li>
<li><strong>Other Government Measures:</strong> <br />
<ul style="list-style-type: circle;">
<li>The government has already introduced heavy penalties on different types of traffic violations in the amended <a href="/daily-updates/daily-news-editorials/the-motor-vehicles-bill-for-road-safety#:~:text=The%20Motor%20Vehicles%20(Amendment)%20Bill%2C%202019%20is%20based%20on,while%20dealing%20with%20transport%20departments." target="_blank" rel="noopener"><strong>Motor Vehicles Act 2019</strong></a>. In addition, the Government of India is also focusing on <strong>Intelligent Traffic Management System</strong> in the Metropolitan and smart cities.</li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/business/irdai-committee-proposes-traffic-violation-premium-7154959/#:~:text=While%20a%20committee%20set%20up,of%20Delhi%20has%20recommended%20this" target="_blank" rel="noopener"><strong>Source:IE</strong></a></p>',
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		'article_id' => (int) 7513,
		'category_id' => (int) 21,
		'title' => 'KIIFB Borrowings Issue',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/comptroller-and-auditor-general-of-india-cag" target="_blank" rel="noopener"><strong>Comptroller and Auditor General (CAG)</strong></a> of India has opined that the <strong>off-budget borrowings</strong> made by the <strong>Kerala Infrastructure Investment Fund Board (KIIFB)</strong> for critical infra projects have <strong>bypassed the limits set on government borrowings under Article 293 (1) of the Constitution</strong> and such borrowings do not have legislative approval.</p>
<ul style="list-style-type: square;">
<li><strong>Off-budget borrowings</strong> are a means by which the government keeps its fiscal deficit in check by making quasi-government entities borrow on its behalf, to partly fund its expenditure plan for the year.</li>
</ul>
<div class="border-bg">
<p><strong>Provisions of Borrowings under Constitution</strong></p>
<ul style="list-style-type: square;">
<li><strong>Borrowing by Centre and the States:</strong> Chapter II in Part XII of the Constitution of India deals with borrowing. Article 292 covers borrowing by the Central Government, and Article 293 covers borrowing by States.</li>
<li><strong>Empowering State Legislatures:</strong> Article 293(1) provides State legislatures the power by law to enable or limit the State&rsquo;s executive powers of borrowing and giving guarantees.</li>
<li><strong>Consent of the Centre:</strong> Under clauses (3) and (4) of Article 293, State Governments need to obtain the consent of the Centre for raising fresh loans in case they are indebted to the latter, and such consent may be granted subject to conditions.</li>
</ul>
</div>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Issues:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Bypassed Constitutional Limit:</strong> CAG reported that KIIFB has bypassed the limits set on government borrowings under Article 293 of the Constitution as these borrowings did not have legislative approval.</li>
<li><strong>Encroachment on Powers of Centre:</strong> The CAG said that<strong> Entry 37 of the List 1 of the Seventh schedule of the Constitution</strong> gives powers of raising foreign loans only to the Centre. Thus, KIIFB borrowings are in violation of the Constitution and encroachment on the powers of the Centre.</li>
<li><strong>Lack of Transparency:</strong> KIIFB borrowings have not been disclosed in the Budget documents or in the accounts. <br />
<ul style="list-style-type: disc;">
<li>It raises doubts on transparency, and of inter-generational equity of the borrowings, the State has to furnish to Centre all the financial statements showing the estimates of receipts and payments of all sources of borrowings, including Open Market borrowings.</li>
</ul>
</li>
<li><strong>Burdened State Finances:</strong> KIIFB raised funds by issuance of bonds which were to be repaid from the petroleum cess and motor vehicle tax. <br />
<ul style="list-style-type: disc;">
<li>CAG reported that since the KIIFB has no source of income, the borrowings by the KIIFB for which the State stood as guarantor, may ultimately turn out to be a <strong>direct liability of the State government.</strong></li>
</ul>
</li>
<li><strong>Risk of Mounting External Liabilities:</strong> The RBI was criticised for granting approval to the state to float<a href="/daily-updates/daily-news-analysis/kerala-the-first-indian-state-to-issue-masala-bond" target="_blank" rel="noopener"><strong> masala bonds.</strong></a> The CAG raised concerns that if this mode was followed by other States, the <strong>external liabilities of the country</strong> would rise substantially without the Centre&rsquo;s knowledge of such liabilities.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Kerala Infrastructure Investment Fund Board (KIIFB)</strong></p>
<ul style="list-style-type: square;">
<li><strong>Establishment:</strong> KIIFB came into existence in 1999 through the <strong>Kerala Infrastructure Investment Fund Act.</strong></li>
<li><strong>Aim:</strong> To provide investment for critical and large infrastructure projects in the State of Kerala.</li>
<li><strong>Features:</strong><br />
<ul style="list-style-type: circle;">
<li>KIIFB was the <strong>first sub-sovereign entity</strong> in India<strong> to tap the offshore rupee international bond market.</strong></li>
<li>In 2019, KIIFB issued its <strong>masala bond</strong> of ₹2,150 crore on the <strong>London Stock Exchange. <a href="/daily-updates/daily-news-analysis/kerala-the-first-indian-state-to-issue-masala-bond" target="_blank" rel="noopener">Masala Bonds</a></strong> are <strong>rupee-denominated bonds</strong> i.e. the funds would be raised from overseas market in Indian rupees.</li>
<li><strong>Attracted investments:</strong> The bond issue helped Kerala government to get multinational corporations to invest in the state, which has traditionally been known for its unfriendly business policies, bureaucratic delays and recurrent industrial strikes.</li>
</ul>
</li>
<li><strong>Change in Role:</strong> In 2016, the role of KIIFB was changed<strong> from handler of investment bonds to an entity to mobilize the resources</strong> for developmental projects over and beyond the budget.</li>
</ul>
</div>
<ul style="list-style-type: square;">
<li><strong>Kerala Government's Concerns:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Detrimental to State development:</strong> According to the government of Kerala, funds from KIIFB are being used to build public infrastructures such as schools, roads, hospitals etc. and such a move by CAG could hurt the interests of the State.</li>
<li><strong>Unilateralism:</strong> Kerala government raised concerns over not giving the State an opportunity to offer its comments, observations or explanation before publishing of the report by the CAG.</li>
<li><strong>Already RBI Approved:</strong> The Kerala government also highlighted the fact that the KIIFB Bonds were raised with the approval of RBI- which is a central body under Government of India, then how such borrowings can be unconstitutional. <br />
<ul style="list-style-type: disc;">
<li><strong>Role of RBI:</strong> <br />
<ul style="list-style-type: disc;">
<li>The<a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener"><strong> RBI</strong> </a>is authorised to act as <strong>an agent of the Central and State Governments</strong> for the issue and management of the latter&rsquo;s bonds and debentures.</li>
<li>The<strong> Internal Debt Management Department</strong> of the RBI has the power to float State Government loans, facilitating investment of surplus cash balances of State Governments in dated securities under various funds.</li>
<li>It is also authorised to make<a href="/daily-updates/daily-news-analysis/wma-borrowings-of-states" target="_blank" rel="noopener"><strong> Ways and Means Advances (WMAs)</strong></a> to the Centre and States, and to fix the limits thereof.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Undermines Federalism:</strong> For decentralisation of financial autonomy, it is necessary to provide a mechanism for regulation of state subnational debt. <br />
<ul style="list-style-type: disc;">
<li>It could promote macroeconomic fiscal stability of the states. Hence, exercise of power conferred to the centre by the article 293 should be strictly confined to the purposes and circumstances.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Review of sub-national Fiscal Policy:</strong> Since the state debt burdens have been rising because of recent fiscal shocks such as<a href="/daily-updates/daily-news-analysis/four-years-of-demonetisation" target="_blank" rel="noopener"><strong> demonetisation</strong></a>, introduction of <a href="/to-the-points/paper3/goods-and-services-tax-gst-1" target="_blank" rel="noopener"><strong>GST</strong></a> and <a href="/daily-updates/daily-news-editorials/covid-19-and-india-1" target="_blank" rel="noopener"><strong>Covid 19 crisis</strong></a>, sub-national fiscal policy of India needs to be reviewed to enable states for subnational borrowings. It shall provide them more opportunities to avail fiscal autonomy.</li>
<li><strong>Validating State Fiscal Responsibility Laws:</strong> Even the Kerala High Court in <strong>Matthew vs Union of India</strong> ruled that that Article 293 is an enabling provision authorising State borrowing and it empowers the states to pass their own<strong> Fiscal Responsibility Laws (FRLs).</strong></li>
<li><strong>Cooperative Federalism:</strong> There is a need to address the legislative concerns of KIIB raised by CAG, and the Centre and Kerala government should take out remedial measures in public interest.</li>
</ul>
<p><a href="https://www.thehindu.com/news/national/kerala/kiifb-borrowings-bypass-limits-for-state-cag/article33603716.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'article_id' => (int) 7512,
		'category_id' => (int) 22,
		'title' => 'Tourism Sector In India',
		'description' => '<div class="border">
<p>This article is based on <a href="https://timesofindia.indiatimes.com/blogs/toi-edit-page/in-our-past-lies-our-future-indian-tourism-hasnt-marketed-the-precious-assets-embedded-in-our-heritage-to-full-potential/" target="_blank" rel="noopener"><strong>&ldquo;In our past lies our future&hellip; Indian tourism hasn&rsquo;t marketed the precious assets embedded in our heritage to full potential&rdquo;</strong></a> which was published in The Times of India on 19/01/2021. It talks about the constraints &amp; opportunities associated with the tourism sector in India.</p>
</div>
<p>The outbreak of the Covid-19 pandemic last year has brought almost all areas of the business to a standstill. Arguably, the worst affected has been the<a href="/to-the-points/paper3/tourism-in-india" target="_blank" rel="noopener"><strong> tourism and hospitality industry</strong></a>, which had to bear the brunt of lockdowns and social distancing.</p>
<p>According to the <a href="/daily-updates/daily-news-analysis/world-tourism-day#:~:text=reaching%20these%20goals.-,United%20Nations%20World%20Tourism%20Organisation,with%20headquarters%20at%20Madrid%2C%20Spain." target="_blank" rel="noopener"><strong>UN World Tourism Organization (UNWTO)</strong></a>, this is by far the worst crisis international tourism has faced since records began in 1950.</p>
<p>Now as the vaccines are available, life will return back to normalcy. Given this, India should seek to actively support the tourism sector, as the sector contributes an estimated 10% to the Indian economy and is our biggest ambassador to the world.</p>
<p>Further, India has inherent competitive advantages as it offers a diverse portfolio of niche tourism products - cruises, adventure, medical, wellness, sports, eco-tourism, film, rural and religious tourism. This competitive advantage will help India become a tourism hub in the world.</p>
<h3>Constraints in Tourism Sector</h3>
<ul style="list-style-type: square;">
<li><strong>Infrastructure and Connectivity:</strong> Deficiencies in infrastructure and inadequate connectivity hamper tourist visits to some heritage sites.<br />
<ul style="list-style-type: circle;">
<li>Also, India has various tourist destinations but few circuits or segments such as the Golden Triangle (Delhi-Agra-Jaipur).</li>
</ul>
</li>
<li><strong>Promotion and Marketing:</strong> Although it has been increasing, online marketing/branding remains limited and campaigns are not coordinated. <br />
<ul style="list-style-type: circle;">
<li>Tourist information centers are poorly managed, making it difficult for domestic and foreign tourists to access information with ease.</li>
</ul>
</li>
<li><strong>Lack of Skills:</strong> The number of adequately trained individuals for the tourism and hospitality sector is a key challenge to giving visitors a world-class experience. <br />
<ul style="list-style-type: circle;">
<li>A limited number of multilingual trained guides, and the limited local awareness and understanding of the benefits and responsibilities associated with tourist growth act as constraints on the sector&rsquo;s growth.</li>
</ul>
</li>
<li><strong>Underutilization of Tourism Potential:</strong> Out of 140 countries, India ranked 8<sup>th</sup> on cultural resources and business travel, 13<sup>th</sup> on price competitiveness, and 14<sup>th</sup> on natural resources in <a href="/daily-updates/daily-news-analysis/travel-and-tourism-competitiveness-index" target="_blank" rel="noopener"><strong>World Economic Forum&rsquo;s Travel &amp; Tourism Competitiveness Report 2019.</strong></a><br />
<ul style="list-style-type: circle;">
<li>Despite these superb rankings, India&rsquo;s overall tourism competitiveness ranking at 34 reveals that India has not monetized or marketed the precious assets embedded in its heritage to their full potential, as other countries do.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>One India One Tourism&rsquo; Approach:</strong> Tourism encompasses multiple ministries and takes place in and within states. <br />
<ul style="list-style-type: circle;">
<li>It thus requires a National Tourism Council, an empowered legislative body that will enable fast-tracking of Centre-state level tourism matters and will create a &lsquo;One India One Tourism&rsquo; approach.</li>
</ul>
</li>
<li><strong>Tourism Should be Declared as Infrastructure:</strong> Tourism infrastructure projects, viz., hotels, resorts, equipment, parks, etc., having a project cost more than Rs. 1 crore should be notified as &lsquo;infrastructure&rsquo; to enable promoters to avail loans on a priority basis.</li>
<li><strong>Skill Development:</strong> There is a need to connect local communities to tourism by encouraging them to set up small enterprises to supply the tourism industry.<br />
<ul style="list-style-type: circle;">
<li>Employment opportunities can be expanded by ensuring that investors and operators in the organized sector are encouraged to hire staff locally</li>
</ul>
</li>
<li><strong>Conservation of Heritage Sites:</strong> Conservation and development of all heritage sites should be undertaken and completed through either government funding or through NGOs/<a href="/daily-updates/daily-news-analysis/corporate-social-responsibility-csr-expenditure" target="_blank" rel="noopener"><strong>Corporate Social Responsibility</strong></a> (CSR) activities.<br />
<ul style="list-style-type: circle;">
<li>The Ministry of Tourism&rsquo;s <a href="/to-the-points/paper3/tourism-in-india" target="_blank" rel="noopener"><strong>Swadesh Darshan and National Mission on Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive (PRASHAD)</strong> </a>schemes are already undertaking the development or maintenance of heritage sites.</li>
</ul>
</li>
<li><strong>Promoting Ease of Tourism:</strong> To truly ensure a seamless tourist transportation experience we need to standardize all interstate road taxes and make them payable at a single point which will facilitate the ease of doing business.</li>
<li><strong>Incredible India 2.0:</strong> Given the diversity of tourism in India, there is a need to actively promote and market niche tourism like Buddhist circuit, Swadesh Darshan, Adventure tourism in Andaman and Nicobar Islands. <br />
<ul style="list-style-type: circle;">
<li>In this context, the Government of India can launch the Incredible India 2.0 campaign, which will promote tourism in 100 Smart &amp; Swachh Tourist Destination Sites.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>Given opportunities in the Tourism sector, it can act as an engine to revive growth and showcases brand India to the world.</p>
<p><a href="http://www.drishtiias.com/images/uploads/1611146393_image4.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1611146393_image4.png" style="display: block; margin-left: auto; margin-right: auto;" width="700" caption="false" /></a></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #fcfcf5;">
<p><span style="color: #333399;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Given opportunities in the Tourism sector, it can act as an engine to revive growth and showcases brand India to the world. Discuss.</p>
</td>
</tr>
</tbody>
</table>
<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/UuEi-Y_YBsQ" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>This editorial is based on <strong><a href="/admin/articles/edit/&lt;iframe%20width=&quot;560&quot; height=&quot;315&quot; src=&quot;https:/www.youtube.com/embed/UuEi-Y_YBsQ&quot; frameborder=&quot;0&quot; allow=&quot;accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture&quot; allowfullscreen&gt;&lt;/iframe&gt;" target="_blank" rel="noopener">&ldquo;Whatever it takes: On govt. powers to combat vaccine hesitancy&rdquo;</a></strong> published in The Hindu on January 19<sup>th</sup>, 2020. Now watch this on our Youtube channel.</p>',
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	(int) 6 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7502,
		'category_id' => (int) 22,
		'title' => 'Sustainable Mining',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.thehindu.com/opinion/op-ed/mining-in-india-equals-selling-the-family-gold/article33603635.ece" target="_blank" rel="noopener"><strong>&ldquo;Mining in India equals selling the family gold&rdquo;</strong></a> which was published in The Hindu on 19/01/2021. It talks about the issues related to the present state of mining practices and the need to adopt sustainable mining.</p>
</div>
<p>India&rsquo;s National Mineral Policy 2019 states that &ldquo;natural resources, including minerals, are a shared inheritance where the state is the trustee on behalf of the people to ensure that future generations receive the benefit of inheritance.&rdquo;</p>
<p>However, mining is the act of removing and consuming a limited resource. Moreover, the Government of India and state governments treat the mineral sale proceeds as revenue or income. This leaves neither the minerals nor their value for future generations to inherit.</p>
<p>Further, as the mined materials support roughly 45% of the world&rsquo;s economic activities, this large-scale mining also has a social and environmental impact.</p>
<p>In this context, there is a need to adhere to the principle of Intergenerational Equity, which makes it imperative to ensure future generations inherit at least as much as that of the current generation.</p>
<h3>Issues Associated with Unsustainable Mining</h3>
<ul style="list-style-type: square;">
<li><strong>Going Beyond Carrying Capacity:</strong> In many cases, mining operations have been carried out without concern for the &lsquo;carrying capacity&rsquo; of the environment and other infrastructural limitations.
<ul style="list-style-type: circle;">
<li>This has put avoidable pressure on the environment and caused inconveniences to the people living in the mining areas.</li>
</ul>
</li>
<li><strong>Loss of Public Revenue:</strong> Driven by lobbying, political donations, and corruption, minerals are often sold at prices significantly lower than what they are worth.
<ul style="list-style-type: circle;">
<li>Illegal mining, in many cases, has a similar effect while additionally causing loss of public revenues.</li>
<li>According to the International Monetary Fund, due to unsustainable mining, many governments of resource-rich nations face declining public sector net worth.</li>
</ul>
</li>
<li><strong>Large Number of Small Mines:</strong> In India, many small mines (including quarries for extracting minor minerals) operate in most states.
<ul style="list-style-type: circle;">
<li>These present difficult challenges for sustainable development as their financial, technical, and managerial limitations restrict their ability to take adequate corrective measures.</li>
</ul>
</li>
<li><strong>Growing Inequality &amp; Loss of Natural Wealth:</strong> Naturally, the extractors are keen to extract as quickly as possible and move on. This deepens inequalities, as a few extractors acquire wealth without proper redistribution to the people.
<ul style="list-style-type: circle;">
<li>It also results in the loss of natural wealth. For example, it is estimated from the annual reports of Vedanta that over eight years (2004-2012), the State of Goa lost more than 95% of the value of its minerals.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Life-Cycle Approach:</strong> There is a need to apply sustainability principles to all stages of the mine life cycle &ndash; exploration, mine planning, construction, mineral extraction, mine closure, and post-closure reclamation and rehabilitation. These principles include elements such as:
<ul style="list-style-type: circle;">
<li>Intra And Inter-generational Equity,</li>
<li>The Precautionary Principle,</li>
<li>Scientific Mining,</li>
<li>Management of Environmental and Socioeconomic Impacts.</li>
</ul>
</li>
<li><strong>Creation of Future Generation Fund:</strong> Like Norway, the entire mineral sale proceeds must be saved in a Future Generations Fund.
<ul style="list-style-type: circle;">
<li>Also, in 2014 the Supreme Court set up a global judicial precedent by ordering the creation of a Goa Iron Ore Permanent Fund. This model is worth emulating in all the major mining areas.</li>
</ul>
</li>
<li><strong>Adherence to Zero-Loss Principle:</strong> If we extract and sell our mineral wealth, the explicit objective must be to achieve zero loss in value.
<ul style="list-style-type: circle;">
<li>The state as trustee must capture the full economic rent (sale price minus the cost of extraction, cost including reasonable profit for extractor).</li>
</ul>
</li>
<li><strong>Consortia of Small Mining Enterprises:</strong> In order to alleviate the limitations of small mines in carrying out sustainable development activities, consortia of small mining enterprises in a region should be promoted.
<ul style="list-style-type: circle;">
<li>Also, technical advisory services should be made available to them in the relevant areas.</li>
</ul>
</li>
<li><strong>Environmental Footprint Framework:</strong> A common sustainable mining framework should be focused on reducing the environmental impacts of mining.
<ul style="list-style-type: circle;">
<li>Strategies for assessing mining operations&rsquo; sustainability include measuring, monitoring, and improving various environmental performance metrics. These are used to determine whether a mining operation is sustainable.</li>
<li>The key metrics for environmental sustainability in mining relate to efficiencies in resource consumption, minimizing land disturbance, pollution reduction, as well as closure and reclamation of exhausted mine lands.</li>
</ul>
</li>
<li><strong>Multi-Stakeholder Approach:</strong> Preparation of a socio-economic assessment report for a mining project should be made a part of the permitting process for the grant and administration of mineral concession to a mining enterprise.
<ul style="list-style-type: circle;">
<li>Mining enterprises should preferably execute local socio-economic development works rather than government and semi-government agencies to avoid the problems of inadequate capacity, political manipulation, and corruption.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>Since minerals are a shared inheritance held in trust for the people and future generations, it is essential that as a nation, we change our paradigm to understand minerals as a &ldquo;shared inheritance,&rdquo; not a source of &ldquo;windfall revenue.&rdquo;</p>
<p><a href="http://www.drishtiias.com/images/uploads/1611060746_image0.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1611060746_image0.png" style="display: block; margin-left: auto; margin-right: auto;" width="500" caption="false" /></a></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #f5f6ff;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>&ldquo;Minerals are a shared inheritance held in trust for the people and future generations&rdquo;. In light of the statement, discuss the issues related to the present state of mining practices and adopt sustainable mining.</p>
</td>
</tr>
</tbody>
</table>
<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/u2qnxG5DaaI" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>This editorial is based on <a href="https://www.hindustantimes.com/opinion/washingtons-return-to-the-paris-climate-accord-is-a-significant-step-build-on-it-101610890146334.html" target="_blank" rel="noopener"><strong>&ldquo;Washington&rsquo;s return to the Paris climate accord is a significant step. Build on it&rdquo;</strong> </a>published in The Hindustan Times on January 17<sup>th</sup>, 2020. Now watch this on our Youtube channel.</p>',
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	(int) 7 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7499,
		'category_id' => (int) 21,
		'title' => 'Bad Bank',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener"><strong>Reserve Bank of India (RBI)</strong></a> Governor has agreed to look at a proposal for creating a <a href="/daily-updates/daily-news-editorials/bad-bank" target="_blank" rel="noopener"><strong>Bad Bank</strong></a>.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>About:</strong><br />
<ul style="list-style-type: circle;">
<li>A bad bank conveys the impression that it will <strong>function as a bank but has bad assets to start with.</strong></li>
<li>Technically, a<strong> bad bank is an <a href="/daily-updates/daily-news-analysis/secondary-market-for-corporate-loans" target="_blank" rel="noopener">Asset Reconstruction Company (ARC)</a></strong> or an Asset Management Company (AMC) that <strong>takes over the bad loans of commercial banks, manages them and finally recovers the money</strong> over a period of time.</li>
<li>The bad bank is not involved in lending and taking deposits, but <strong>helps commercial banks clean up their balance sheets and resolve bad loans.</strong> <br />
<ul style="list-style-type: disc;">
<li>The <strong>takeover of bad loans is normally below the book value</strong> of the loan and the bad bank tries to recover as much as possible subsequently.</li>
</ul>
</li>
<li>US-based Mellon Bank created the<strong> first bad bank in 1988,</strong> after which the concept has been implemented in other countries including Sweden, Finland, France and Germany.<br />
<ul style="list-style-type: disc;">
<li>The<strong> Troubled Asset Relief Programme (TARP)</strong> in the US.</li>
<li>In Ireland, the <strong>National Asset Management Agency</strong> was established in 2009 to respond to the financial crisis.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Need in India:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Economic Recovery:</strong> <br />
<ul style="list-style-type: disc;">
<li>With the <a href="/daily-updates/daily-news-analysis/covid-19-now-pandemic-who" target="_blank" rel="noopener"><strong>pandemic</strong> </a>hitting the banking sector, the RBI fears a spike in bad loans in the wake of a six-month moratorium it has announced to tackle the economic slowdown.</li>
</ul>
</li>
<li><strong>Government Support:</strong> <br />
<ul style="list-style-type: disc;">
<li>Professionally-run bad banks, funded by the private lenders and supported by the government, can be an effective mechanism to deal with <strong><a href="/daily-updates/daily-news-editorials/lessons-from-npa-crisis" target="_blank" rel="noopener">Non-Performing Assets (NPA)</a>.</strong></li>
<li>The<strong> presence of the government</strong> is seen as a means to<strong> speed up the clean-up process. </strong></li>
</ul>
</li>
<li><strong>Rising NPAs:</strong><br />
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-analysis/financial-stability-report-rbi-2" target="_blank" rel="noopener"><strong>Financial Stability Report (FSR)</strong></a>: The RBI noted in its recent <strong>FSR</strong> that the gross NPAs of the banking sector are expected to shoot up to 13.5% of advances by September 2021, from 7.5% in September 2020.</li>
<li><strong>K V Kamath Committee</strong>: Noted that corporate sector debt worth Rs 15.52 lakh crore has come under stress after <a href="/daily-updates/daily-news-editorials/comprehensive-action-plan-for-covid-19" target="_blank" rel="noopener"><strong>Covid-19</strong></a> hit India, while another Rs 22.20 lakh crore was already under stress before the pandemic. <br />
<ul style="list-style-type: disc;">
<li>The committee noted that <strong>companies in sectors such as retail trade, wholesale trade, roads and textiles are facing stress.</strong></li>
<li>Sectors that have been under <strong>stress pre-Covid include <a href="/daily-updates/daily-news-analysis/rbi-to-merge-three-categories-of-nbfcs#:~:text=A%20Non%2DBanking%20Financial%20Company,securities%20of%20a%20like%20nature." target="_blank" rel="noopener">Non-Banking Financial Company (NBFC)</a>, power, steel,<a href="/loksabha-rajyasabha-discussions/the-big-picture-reviving-real-estate" target="_blank" rel="noopener"> real estate and construction.</a></strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>International Precedents:</strong> Many other countries had set up institutional mechanisms to deal with a problem of stress in the financial system.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1611051013_image3.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1611051013_image3.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="650" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li><strong>Challenges :</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Mobilising Capital:</strong> <br />
<ul style="list-style-type: disc;">
<li>Finding buyers for bad assets in a pandemic hit economy will be a challenge, especially when <strong>governments are facing the issue of containing the <a href="/daily-updates/daily-news-analysis/increased-fiscal-deficit" target="_blank" rel="noopener">fiscal deficit.</a></strong></li>
</ul>
</li>
<li><strong>Not Addressing the Underlying Issue:</strong><br />
<ul style="list-style-type: disc;">
<li>Without governance reforms, the <a href="/daily-updates/daily-news-analysis/amalgamation-of-national-banks" target="_blank" rel="noopener"><strong>Public sector banks</strong></a> (accounted for 86%, of the total NPAs) may go on doing business the way they have been doing in the past and <strong>may end up piling-up of bad debts again.</strong></li>
<li>Also, the bad bank idea is like <strong>shifting loans from one government pocket (the public sector banks) to another (the bad bank).</strong></li>
</ul>
</li>
<li><strong>Provisioning Issue Tackled Through Recapitalization:</strong> <br />
<ul style="list-style-type: disc;">
<li>Union Government, in the last few years, has<strong> infused nearly Rs 2.6 lakh</strong> crore in banks through<a href="/daily-updates/daily-news-analysis/recapitalisation-of-rrbs" target="_blank" rel="noopener"><strong> recapitalisation.</strong></a></li>
<li>Those who oppose the concept of bad banks hold that the government has on its part recapitalised the banks to compensate for the write-offs and hence, there is no need for a bad bank.</li>
</ul>
</li>
<li><strong>Market-related Issues:</strong> <br />
<ul style="list-style-type: disc;">
<li>The price at which bad assets are transferred from commercial banks to the bad bank will not be market-determined and <strong>price discovery will not happen.</strong></li>
</ul>
</li>
<li><strong>Moral Hazard:</strong> <br />
<ul style="list-style-type: disc;">
<li>Former RBI Governor Raghuram Rajan had said that a bad bank may create a moral hazard and <strong>enable banks to continue reckless lending practices, without any commitment to reduce NPAs.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Previous Proposals:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>In May 2020</strong> the banking sector, led by the <a href="/daily-updates/daily-news-editorials/payment-revolution-in-india" target="_blank" rel="noopener"><strong>Indian Banks&rsquo; Association</strong></a>, had submitted a proposal for setting up a bad bank to resolve the NPA problem, proposing equity contribution from the government and banks.</li>
<li><strong>In 2017</strong> the <a href="/daily-updates/daily-news-analysis/economic-survey-2019-20-highlights" target="_blank" rel="noopener"><strong>Economic Survey</strong></a> suggested <strong>Public Sector Asset Rehabilitation Agency or PARA,</strong> to buy out the NPAs of high value from Indian banks.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Holistic Reforms:</strong> <br />
<ul style="list-style-type: circle;">
<li>So long as Public sector banks managements remain beholden to politicians and bureaucrats, their deficit in professionalism will remain and subsequently, prudential norms in lending will continue to suffer. Therefore, the debate regarding setting up a bad bank must be preceded by <strong>proper implementation of holistic reforms in the banking sector,</strong> as envisaged under the<strong> Indra Dhanush plan launched in 2015.</strong></li>
</ul>
</li>
<li><strong>Tailor Made Approach:</strong> <br />
<ul style="list-style-type: circle;">
<li>It&rsquo;s a challenge that requires a response on multiple fronts. A <strong>bad bank cannot be the sole response.</strong> The most efficient approach would be to design solutions <strong>tailor-made for different parts of India&rsquo;s bad loan problem</strong> and use Bad Bank only as a last resort once all other methods fail.</li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/explained/npa-bad-bank-balance-sheet-loan-rbi-shaktikanta-das-7151841/" target="_blank" rel="noopener"><strong>Source:IE</strong></a></p>',
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	(int) 8 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7490,
		'category_id' => (int) 21,
		'title' => 'Government's Disinvestment Plans',
		'description' => '<h3>Why in News</h3>
<p>Recently, the Ministry of Finance has extended the bidding deadlines for the strategic <a href="/daily-updates/daily-news-analysis/strategic-disinvestment" target="_blank" rel="noopener"><strong>disinvestment</strong></a> of <strong>Pawan Hans</strong> by a month, citing logistical challenges faced by interested bidders due to the<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>Pawan Hans Limited is a <strong>helicopter service company</strong> based in New Delhi. It is a <a href="/to-the-points/paper3/sectors-of-indian-economy" target="_blank" rel="noopener"><strong>Mini Ratna</strong></a>-I category Public Sector Undertaking.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Background:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Government's Disinvestment Target for 2020-2021:</strong> Government <strong>plans to raise Rs. 2.1 lakh crore</strong> through disinvestment in 2020-21, with just about <strong>Rs. 14,000 crore raised</strong> so far through minority stake sales.</li>
<li><strong>New Public Sector Policy:</strong> As part of the <a href="/daily-updates/daily-news-analysis/atmanirbhar-bharat-and-economic-stimulus" target="_blank" rel="noopener"><strong>&lsquo;Aatmanirbhar Bharat Abhiyan&rsquo;</strong></a> package, the government in May 2020 had announced that there will be a maximum of four public sector companies in the strategic sectors, and state-owned firms in other segments will eventually be privatised.<br />
<ul style="list-style-type: disc;">
<li>Under the policy, <strong>a list of strategic sectors will be notified</strong> where there will be <strong>at least one and a maximum of four public sector enterprises,</strong> apart from private sector companies.</li>
<li>In <strong>other sectors, central public sector enterprises (CPSEs) will be privatised,</strong> depending on the feasibility.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Current Situation:</strong> <br />
<ul style="list-style-type: circle;">
<li>The <strong>Bidding deadline</strong> for the disinvestment of <strong>Pawan Hans</strong> has been <strong>extended by a month.</strong></li>
<li>Strategic sales of public sector firms like <a href="/daily-updates/daily-news-analysis/100-fdi-in-air-india-for-nris" target="_blank" rel="noopener"><strong>Air India</strong></a> and <strong>Bharat Petroleum Corporation Limited (BPCL)</strong> are unlikely to conclude this year.</li>
<li>Further amendments are needed to the LIC Act of 1986 to list the <a href="/daily-updates/daily-news-analysis/initial-public-offer-lic" target="_blank" rel="noopener"><strong>Life Insurance Corporation of India</strong> </a>on the markets.</li>
</ul>
</li>
<li><strong>Need for Disinvestment Proceeds:</strong><br />
<ul style="list-style-type: circle;">
<li>There is a pressure on the government to raise resources to<strong> support the economic recovery</strong> and meet expectations of higher outlays for healthcare.</li>
<li>The increase in public <strong>spending in the upcoming <a href="/to-the-points/paper3/government-budgeting#:~:text=The%20Union%20Minister%20of%20Finance,all%20sections%20of%20the%20society" target="_blank" rel="noopener">Budget</a></strong> will have to be financed to a large extent by garnering disinvestment proceeds and monetising assets.</li>
<li>To <strong>eliminate the need for the government&rsquo;s involvement in non-strategic areas.</strong></li>
</ul>
</li>
</ul>
<h3>Disinvestment</h3>
<ul style="list-style-type: square;">
<li>Disinvestment means<strong> sale or liquidation of assets by the government,</strong> usually Central and state public sector enterprises, projects, or other fixed assets.</li>
<li><a href="/daily-updates/daily-news-editorials/privatisation-of-pses" target="_blank" rel="noopener"><strong>The government undertakes disinvestment </strong></a>to<strong> reduce the fiscal burden</strong> on the exchequer, or<strong> to raise money</strong> for meeting specific needs, such as<strong> to bridge the revenue shortfall from other regular sources.</strong></li>
<li><a href="/to-the-points/paper3/strategic-disinvestment-1" target="_blank" rel="noopener"><strong>Strategic disinvestment</strong> </a>is the<strong> transfer of the ownership and control of a public sector entity to some other entity</strong> (mostly to a private sector entity).<br />
<ul style="list-style-type: circle;">
<li>Unlike the simple disinvestment, strategic sale implies a kind of privatization.</li>
</ul>
</li>
<li>The <strong>disinvestment commission defines strategic sale as the sale of a substantial portion of the Government shareholding of a central public sector enterprises (CPSE) of upto 50%,</strong> or such higher percentage as the competent authority may determine, along with transfer of management control.</li>
<li>The <a href="/daily-updates/daily-news-analysis/strategic-disinvestment" target="_blank" rel="noopener"><strong>Department of Investment and Public Asset Management (DIPAM)</strong> </a>under the Ministry of Finance is the nodal department for the strategic stake sale in the Public Sector Undertakings (PSUs).</li>
<li>Strategic disinvestment in India has been guided by the basic economic principle that the <strong>government should not be in the business to engage itself in manufacturing/producing goods and services in sectors where competitive markets have come of age.</strong><br />
<ul style="list-style-type: circle;">
<li>The economic potential of such entities may be better discovered in the hands of the strategic investors due to various factors, <strong>e.g. infusion of capital, technology up-gradation and efficient management practices etc.</strong></li>
</ul>
</li>
</ul>
<p><a href="https://www.thehindu.com/business/Industry/centre-extends-bidding-deadlines-for-pawan-hans-disinvestment/article33594869.ece#:~:text=The%20Finance%20Ministry%20has%20extended,to%20the%20COVID%2D19%20pandemic." target="_blank" rel="noopener"><strong>Source:TH</strong></a></p>',
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		'article_id' => (int) 7459,
		'category_id' => (int) 21,
		'title' => 'India’s Potential to Increase Cereals Export',
		'description' => '<h3>Why in News</h3>
<p>The <strong>US Department of Agriculture</strong> (USDA) has noted in its latest <strong>Grain: World Markets and Trade report</strong> that<strong> exports of wheat and rice from India are likely to increase.</strong></p>
<h3>Key points</h3>
<ul style="list-style-type: square;">
<li><strong>Findings:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Increase in Wheat Exports:</strong> The US Department of Agriculture (USDA) has recently <strong>upped its forecast of Indian wheat exports </strong>for<strong> 2020-21</strong> (July-June) to <strong>1.8 million tonnes</strong> (mt), as against its earlier estimate of<strong> 1 mt.</strong></li>
<li><strong>Increase in Rice Exports:</strong> USDA has also estimated India&rsquo;s rice exports to have hit a record <strong>14.4 mt</strong> in 2020, up from the <strong>preceding two years.</strong></li>
</ul>
</li>
<li><strong>Causes for Increase in Wheat Exports:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Chinese Stockpiling:</strong> The key driver of global price turnaround seems to be China. The reasons for its building strategic stockpiles of everything aren&rsquo;t as fully clear as their effect on international prices.</li>
<li><strong>Rising Global Prices:</strong> For example, the<strong> Russian government</strong> is levying an export tax on wheat in response to high domestic prices. <strong>Bangladesh,</strong> a potential importer of wheat from Russia is beginning to <strong>shift its purchases towards India.</strong></li>
<li><strong>Ultra-low interest rate</strong> money increasingly being invested into <strong>agri-commodity markets.</strong><br />
<ul style="list-style-type: disc;">
<li>In the wake of Covid 19 Pandemic Various Countries such as the USA, India, Russia are reducing their interest rates.</li>
<li><strong>For example:</strong> Bank of England current bank rate: 0.1%<br />
<ul style="list-style-type: disc;">
<li>Reserve Bank of India current RBI repurchase rate: 4%</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li><strong>Causes for Rise in Rice Exports:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Impact of drought:</strong><br />
<ul style="list-style-type: disc;">
<li>The country&rsquo;s closest competitors<strong> Thailand and Vietnam</strong> have been facing drought leading to <strong>decline</strong> in rice productivity.</li>
<li>Increase in <strong>demand in Bangladesh</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Potential Challenges to Rise in Export:</strong><br />
<ul style="list-style-type: circle;">
<li>Indian wheat is still not competitive at the government&rsquo;s<strong> minimum support price</strong> (MSP) of <strong>Rs 19,750 per tonne.</strong> Further additional cost of<strong> cleaning, bagging, loading and transport to port</strong> would be in addition making export uncompetitive.</li>
<li><strong>Solution:</strong> Procurement of wheat below MSP from Uttar Pradesh, Bihar, Gujarat and Maharashtra, where not much government procurement happens.</li>
</ul>
</li>
<li><strong>Significance:</strong><br />
<ul style="list-style-type: circle;">
<li>Estimates for increase in these exports will be beneficial as India&rsquo;s<strong> own domestic production of rice and wheat</strong> has touched an all-time-high of 118.43 mt and 107.59 mt, respectively, in 2019-20.</li>
<li>Government agencies also procured <strong>an all time high in 2019 -20</strong> thus burdening <strong>government exchequer.</strong></li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Cereals Exports of India</strong></p>
<ul style="list-style-type: square;">
<li>India is one of the<strong> largest producers</strong> as well as<strong> exporter of cereal products in the world.</strong></li>
<li>The important cereals are -<strong> wheat, paddy, sorghum, millet (Bajra), barley</strong> and <strong>maize.</strong></li>
<li>Previously in 2008, India had imposed a ban<strong> on export of rice and wheat etc.</strong> to meet <strong>domestic needs.</strong><br />
<ul style="list-style-type: circle;">
<li>Owing to <strong>huge demand in the global market and country's surplus production,</strong> India allowed limited amounts of export of the commodity.</li>
</ul>
</li>
<li>Rice (including Basmati and Non Basmati) occupy the <strong>major share in India's total cereals export with 95.7% in 2019-20.</strong> Whereas, other cereals including wheat represent only <strong>4.3% share in total cereals exported from India during the year 2019-20.</strong></li>
<li><strong>Major Export Destinations</strong> (2019-20) of <strong>Wheat :</strong> Nepal, Bangladesh , UAE, Somalia.</li>
<li><strong>Major Export Destinations</strong> (2019-20) of<strong> Non Basmati rice:</strong> Nepal, Benin, UAE, Somalia.</li>
<li><strong>Major Export Destinations</strong> (2019-20) of <strong>Basmati Rice:</strong> Iran, Saudi Arab, Iraq, UAE.</li>
</ul>
</div>
<p><a href="https://indianexpress.com/article/india/first-rice-now-wheat-india-rides-on-global-grain-trade-bandwagon-7145485/" target="_blank" rel="noopener"><strong>Source:IE</strong></a></p>',
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	(int) 10 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7434,
		'category_id' => (int) 15,
		'title' => 'The Big Picture : One Nation, One Gas Grid',
		'description' => '<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/wvy_6E2YisY" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<h3>Why in News?</h3>
<ul style="list-style-type: square;">
<li>The Prime Minister of India has recently inaugurated the 450-km natural gas pipeline between Kochi in Kerala to Mangalore in Karnataka.</li>
<li>The government has set the energy roadmap, envisaging more than double the share of cleaner natural gas in the consumption basket, diversifying sources of energy, connecting the nation with one gas pipeline grid and bringing affordable fuel to people and industry.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li>A gas-based economy is crucial for an Atmanirbhar Bharat and work is being done in the direction of <strong>'One Nation, One Gas Grid'.</strong></li>
<li>The pipeline grid is expected to not only help improve clean energy access, but also aid in the development of city gas projects.</li>
<li>The government is also considering the proposal of bringing natural gas under the ambit of <a href="/to-the-points/paper3/goods-and-services-tax-gst-1" target="_blank" rel="noopener"><strong>Good and Services Tax.</strong></a></li>
</ul>
<h3>One Nation, One Gas Grid</h3>
<ul style="list-style-type: square;">
<li>The Indian Power system for planning and operational purposes is divided into five regional grids.
<ul style="list-style-type: circle;">
<li>One Nation, One Gas Grid refers to the integration of these regional grids thus establishing a National Grid for providing energy produced by natural gas to various stakeholders like the central government, the state governments, the public and the private sectors.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1610439260_image1.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1610439260_image1.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="600" caption="false" /></a></p>
<p><strong>Objective and Need of One Nation &amp; One Gas Grid</strong></p>
<ul style="list-style-type: square;">
<li><strong>Meeting the targets:</strong> The initiative of the Indian government will help meet its target of reaching 15% natural gas in its energy basket mix by 2030 which is currently at 6.2-6.5% whereas the global average is 23-24%.</li>
<li><strong>Connecting the nation:</strong> With one nation and one gas grid, the energy produced from natural gas will be supplied to the whole country via a single source.</li>
<li><strong>Improving regional imbalance:</strong> It will help in improving the regional imbalance of gas availability as currently the natural gas is only in limited pockets of the country.</li>
<li><strong>India as a gas based economy:</strong> One nation, one gas grid which will help emerge India as a gas based economy.
<ul style="list-style-type: circle;">
<li>It will not only lead to robust development in the economy but also encourage a clean environment.</li>
</ul>
</li>
<li><strong>Cleaner environment:</strong> In times when conventionalsSources are depleting and mining is being extended to a greater depth and area, natural gas can prove to be a boon by preventing deforestation and desertification.</li>
<li><strong>Reduce import dependency:</strong> The import dependency of natural gas in India has reached to 53%. In order to reduce this high percentage, the government is taking measures to diversify the energy mix of India.</li>
</ul>
<p><strong>India&rsquo;s Targets</strong></p>
<ul style="list-style-type: square;">
<li>To increase the share of natural gas, the government has announced the expansion of the natural gas grid from the previous 17,500 kilometers to 34,500 kilometers. To which, 450 kms have already been added making it approx 18000.
<ul style="list-style-type: circle;">
<li>The next 16000 kms is expected to be achieved in the next 4-6 years.</li>
</ul>
</li>
<li>Primarily, as a grid, the north and west part of India were already connected via LNG terminal.
<ul style="list-style-type: circle;">
<li>In the last 4 years, efforts have also been made to connect eastern India with North via the Jagdishpur-Haldia-Bokaro-Dhamra Pipeline which is a <a href="/loksabha-rajyasabha-discussions/the-big-picture-gas-grid-fuel-for-all" target="_blank" rel="noopener"><strong>PM Urja Ganga Project</strong></a> which is in its final stages and will also add around 3000 kms to the grid.</li>
</ul>
</li>
<li>The southern part of India is also being looked upon and is expected to add about 1500 kms to the grid.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Encouraging investments:</strong> Investing in natural gas should be more encouraged. The share can be divided as : 20% for smaller manufacturing brands whereas for the government and bigger companies it should be 80%.
<ul style="list-style-type: circle;">
<li>It is important because investing in natural gas means investing in:
<ul style="list-style-type: disc;">
<li>Cleaner environment</li>
<li>Better health for our people</li>
<li>Creating more jobs and a better economy for our people.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Educating about natural gas:</strong> One area where we all should work is in educating people about the natural gas economy because at present the lack of knowledge about natural gas based economy is widely persistent.</li>
<li><strong>Empowering the vehicles:</strong> Empowered vehicles are needed to reach the destination of One Nation, One Gas Grid. Vehicles such as GAIL, <a href="/loksabha-rajyasabha-discussions/the-big-picture-natural-gas-economy" target="_blank" rel="noopener"><strong>ONGC</strong></a> etc need to be strengthened and empowered to eradicate natural gas energy poverty.
<ul style="list-style-type: circle;">
<li>It is important to give more importance to companies like ONGC when it comes to upstream for gas and GAIL India when it comes to midstream production and gas distribution, and to companies like Oil India when it comes to oil distribution.
<ul style="list-style-type: disc;">
<li>We need more LNG terminals for more upstream production of gas.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Marketing and pricing reforms:</strong> To increase domestic exploration, investment and production of natural gas, <a href="/daily-updates/daily-news-editorials/natural-gas-marketing-reforms" target="_blank" rel="noopener"><strong>Marketing and Pricing Reforms</strong></a> are the one step that the Government of India has taken in a couple of months.</li>
<li><strong>Natural gas democracy:</strong> Like no citizen of a country should be kept out of democracy, similarly no one should be left out of the benefits of natural gas, it should reach each and every household.</li>
<li><strong>Collaborative effort:</strong> It is not enough that only the central government takes initiatives in the direction, various state govts should also come on board or even a public sector is also as important when it comes to contributing their share in the notion of One Nation, One Gas Grid.</li>
</ul>
<h3>Conclusion</h3>
<p>Tremendous efforts are on the way to achieve clean affordable and sustainable energy but going forward there will be infrastructure related and many other possible challenges that must be tackled in order to end energy poverty in the times to come, ensuring energy security for the citizens as well.</p>',
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	(int) 11 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7411,
		'category_id' => (int) 22,
		'title' => 'Death Penalty For Sexual Offences',
		'description' => '<div class="border">
<p>This article is based on <a href="https://indianexpress.com/article/opinion/columns/maharashtra-shakti-bill-rape-offence-disha-bill-maharashtra-cabinet-7135848/" target="_blank" rel="noopener"><strong>&ldquo;The wrong answer&rdquo;</strong> </a>which was published in The Indian Express on 06/01/2021. It talks about the issues related to the award of the death penalty for sexual offences.</p>
</div>
<p>Sexual offences against women and children are one of the most heinous crimes against humanity. Given this, the public has a real and legitimate interest in addressing such concerns, leading to the death penalty&rsquo;s demand to deter sexual offences purportedly.</p>
<p>In this context, on <a href="/daily-updates/daily-news-analysis/international-human-rights-day-1" target="_blank" rel="noopener"><strong>Human Rights Day 2020</strong></a>, the Maharashtra cabinet approved the Shakti Bill, enlarging the scope of harsher and mandatory sentences &mdash; including the death penalty &mdash; for non-homicidal rape (excluding <a href="/daily-updates/daily-news-editorials/marital-rape-in-india" target="_blank" rel="noopener"><strong>Marital Rape</strong></a>).</p>
<p>The Shakti Bill comes amid the recent legislative trend to invoke the death penalty for sexual offences. For instance, the Andhra Pradesh government passed the <a href="/daily-updates/daily-news-analysis/disha-bill-2019" target="_blank" rel="noopener"><strong>Disha Bill in 2020</strong></a> (pending presidential assent), that provides the death penalty for the rape of adult women.</p>
<p>However, introducing the death penalty diverts attention from deep-rooted issues &amp; long-term solutions. It suggests that the reason for such crimes is that the punishment is not severe enough.</p>
<h3>Associated Issues With Death Penalty Against Sexual Offences</h3>
<ul style="list-style-type: square;">
<li><strong>May Do More Harm To Victim:</strong> Women&rsquo;s right groups have argued that the death penalty is a knee-jerk and populist solution to counter sexual offences. <br />
<ul style="list-style-type: circle;">
<li>Also, Child-right activists insist that introducing capital punishment for non-homicidal rape may lead rapists to kill their victims to erase testimonial evidence.</li>
</ul>
</li>
<li><strong>Death Penalty Won&rsquo;t Remove Prejudice:</strong> Introducing harsher penalties does not remove systemic prejudices from the minds of judges and the police.<br />
<ul style="list-style-type: circle;">
<li>Generally, police might refuse to register complaints or acquit offenders in cases they do not consider &ldquo;serious&rdquo; enough to warrant a mandatory minimum.</li>
</ul>
</li>
<li><strong>Lower Rate of Conviction:</strong> According to crime data from the <a href="/printpdf/crime-in-india-2019-report-ncrb" target="_blank" rel="noopener"><strong>National Crime Records Bureau</strong></a>, in 93.6% of sexual offences, the perpetrators were known to the victims. <br />
<ul style="list-style-type: circle;">
<li>Therefore, introducing capital punishment would deter complainants from registering complaints.</li>
</ul>
</li>
<li><strong>Delay in Closure of Justice:</strong> The execution of a death sentence comes at the end of multiple stages of appeals and avenues of seeking clemency. <br />
<ul style="list-style-type: circle;">
<li>This time extended to the defendant to exhaust all legal remedies will delay the judicial process&rsquo;s finality and closure&mdash;militating against the competing interest of ensuring speedy justice.</li>
<li>It might also see an increase in instances of instant retribution, such as the extrajudicial killing of gang-rape and murder suspects in Hyderabad late in 2019.</li>
</ul>
</li>
<li><strong>Regressive Step:</strong> The <a href="/daily-updates/daily-news-analysis/j-s-verma-committee-on-sexual-harassment-at-workplace-act" target="_blank" rel="noopener"><strong>Justice Verma Committee Report</strong></a> that made several recommendations on the laws on sexual offences (after Nirbhya rape case 2012), held that the death penalty&rsquo;s deterrent effect is &ldquo;a myth&rdquo;. <br />
<ul style="list-style-type: circle;">
<li>The report stated that it would be a regressive step to introduce the death sentence in non-homicidal cases.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Other Issues Related to Shakti Bill</strong></p>
<ul style="list-style-type: square;">
<li>The other anti-women assertion in the bill moves away from the standard of affirmative consent in cases involving adult victims and offenders.<br />
<ul style="list-style-type: circle;">
<li>Significant advocacy from the women&rsquo;s movement led to introducing an affirmative standard of consent, rooted in unequivocal voluntary agreement by women through words, gestures or any form of verbal or non-verbal communication.</li>
</ul>
</li>
<li>In a sharp departure, the bill stipulates that valid consent can be presumed from the &ldquo;conduct of the parties&rdquo; and the &ldquo;circumstances surrounding it&rdquo;.</li>
<li>Rape trials continue to be guided by misogynistic notions, expecting survivors to necessarily resist the act, suffer injuries and appear visibly distressed.</li>
<li>Therefore, the bill&rsquo;s vaguely worded explanation holds dangerous possibilities of expecting survivors to respond only in a particular manner, thus creating the stereotype of an &ldquo;ideal&rdquo; victim.</li>
</ul>
</div>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Plugging Gaps in Justice Delivery:</strong> The most severe gaps in the justice delivery system are reporting a police complaint. Therefore, the focus of the criminal justice system needs to shift from sentencing and punishment to the stages of reporting, investigation, and victim-support mechanisms. In this context, the following measures must be ensured: <br />
<ul style="list-style-type: circle;">
<li>The victim reports a case without any fear.</li>
<li>Police to conduct a sound investigation.</li>
<li>Victim protection throughout the trial.</li>
<li>Making testification as easy and as quick as possible.</li>
<li>Allocation of resources and more robust implementation of the law than is currently evident.</li>
</ul>
</li>
<li><strong>Sensitisation At a Broader Level:</strong> Despite the ever-increasing ambit of the death sentence, there has been little effort to address prejudices in society.<br />
<ul style="list-style-type: circle;">
<li>Addressing the prejudices in the society against sexual offences requires sensitisation of functionaries of the justice system &amp; more importantly society.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>Instead of merely enhancing punishment, tackling crimes against women and children requires broader social reforms, sustained governance efforts and strengthening investigative and reporting mechanisms.</p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #f5fff5;">
<p><span style="color: #800000;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Punitive responses to sexual violence need serious rethinking, given the multitude of perverse consequences and their minor role in addressing the actual needs of rape survivors. Discuss.</p>
</td>
</tr>
</tbody>
</table>
<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/Ytfp3NErDB0" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>This editorial is based on <a href="https://www.hindustantimes.com/editorials/where-india-and-us-diverge-ht-editorial/story-fPy0uthKnZr3iRrt6O8CLL.html" target="_blank" rel="noopener"><strong>&ldquo;Where India and US diverge&rdquo;</strong></a> which was published in The Hindustan Times on January 7<sup>th</sup>, 2020. Now watch this on our Youtube channel.</p>',
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	(int) 12 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7403,
		'category_id' => (int) 22,
		'title' => 'Last Mile Challenges To Financial Inclusion',
		'description' => '<div class="border">
<p>This article is based on <a href="https://indianexpress.com/article/opinion/how-over-reliance-on-tech-worsens-financial-exclusion-in-rural-india-7134424/" target="_blank" rel="noopener"><strong>&ldquo;Not by digital alone&rdquo;</strong></a> which was published in The Indian Express on 06/01/2021. It talks about the last mile challenges to financial inclusion in India.</p>
</div>
<p>Being a welfare state, one of the prime objectives of government policy in India has been to enable financial inclusion and to reduce abject poverty through interventionist public policies. One such approach is the <a href="/daily-updates/daily-news-analysis/rbi-advisory-on-direct-benefit-transfer" target="_blank" rel="noopener"><strong>Direct Benefits Transfer (DBT) initiative.</strong></a></p>
<p>Various government programmes such as maternity entitlements, student scholarships, and wages for <a href="/daily-updates/daily-news-editorials/mgnrega-and-migrant-crisis" target="_blank" rel="noopener"><strong>MGNREGA</strong></a> workers fall under the DBT initiative where the money is transferred to the respective beneficiaries&rsquo; bank accounts.</p>
<p>However, the beneficiaries face many hurdles in accessing their money. For example, in rural areas, beneficiaries have to travel miles and wait for several hours to make one banking transaction.</p>
<p>These hurdles are broadly referred to as <strong>&ldquo;last mile challenges''</strong>. These challenges have widened the distance between the rights holder and their entitlements, which must be urgently resolved.</p>
<h3>Last Mile Challenges &amp; Their Impact</h3>
<ul style="list-style-type: square;">
<li><strong>Digital Exclusions:</strong> A recently published KPMG report found that India&rsquo;s Internet usage is the lowest of the BRICS nations. <br />
<ul style="list-style-type: circle;">
<li>Similarly, the <a href="/daily-updates/daily-news-analysis/digital-quality-of-life-index-2020-surfshark" target="_blank" rel="noopener"><strong>Digital Quality of Life (DQL) Index 2020</strong></a> reflects the dismal performance of India in digital parameters.</li>
<li>Moreover, digital illiteracy, innumeracy, and unfamiliarity with technology hinder the digital product&rsquo;s full uptake.</li>
</ul>
</li>
<li><strong>Unfamiliarity With DBT:</strong> Beneficiaries of DBT do not know what to do when their payments get rejected, often due to technical reasons such as incorrect account numbers and incorrect Aadhaar mapping with bank accounts. <br />
<ul style="list-style-type: circle;">
<li>More importantly, the workers/beneficiaries have rarely been consulted regarding their preferred mode of transacting.</li>
</ul>
</li>
<li><strong>Breeding of Corruption:</strong> The digital exclusion and unfamiliarity of beneficiaries with DBT, has created new forms of corruption.<br />
<ul style="list-style-type: circle;">
<li>This was evidenced in the massive scholarship scam in Jharkhand, where many poor students were deprived of their scholarships owing to a nexus of intermediaries, government officials, banking correspondents and others.</li>
</ul>
</li>
<li><strong>Inadequate Rural Banking:</strong> There are just 14.6 bank branches per 1 lakh adults in India. It is sparser in rural India.<br />
<ul style="list-style-type: circle;">
<li>Moreover, rural banks are short-staffed and tend to get overcrowded.</li>
<li>Accessing banks in rural areas leads to loss of one wage day for the worker. Also, people have to spend money on transportation to access the bank to withdraw their payments/subsidies.</li>
</ul>
</li>
<li><strong>Unsuccessful Banking Correspondent Model:</strong> More than a decade after the first regulations on the Business Correspondent (BC) Model were issued in 2006, banks and other financial service providers are struggling to establish a viable and sustainable business case for branchless banking.</li>
<li><strong>Accountability Issue:</strong> The lack of accountability and absence of grievance redressal continue to impact all DBT programmes.</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Expanding Scope of Social Justice:</strong> Understanding social justice should be broadened by including the right to access own money in a timely and transparent manner. <br />
<ul style="list-style-type: circle;">
<li>Moreover, these rights should be protected through strengthening grievance redressal processes and setting accountability norms for all payment intermediaries.</li>
</ul>
</li>
<li><strong>Providing More Choices:</strong> Universalization of Aadhar Enabled Payment System will enable Aadhar Enabled Bank Account holders to carry out seamless financial transactions.</li>
<li><strong>Establishing a Code of Conduct for BC Model:</strong> Banks should develop standard rules and formulate a code of conduct to develop effective monitoring and supervision of banking correspondents.<br />
<ul style="list-style-type: circle;">
<li>Geotagging and GPS mapping of agent locations to search agent points will also enable better monitoring and supervision.</li>
</ul>
</li>
<li><strong>Uber Model:</strong> There is a need to explore the possibility to adopt the &ldquo;Uber&rdquo; model to handle cash-in/cash-out (CICO), by enabling customers to act as CICO points. <br />
<ul style="list-style-type: circle;">
<li>It will reduce dependence on agents and allow them to go beyond CICO.</li>
<li>On the other hand, customers would be able to transact beyond a stationary and limited agent network.</li>
</ul>
</li>
<li><strong>Promoting Digital Literacy:</strong> Digital literacy is the lynchpin of triggering a revolution in India&rsquo;s financial inclusion and doorstep delivery models.<br />
<ul style="list-style-type: circle;">
<li>In this context, <a href="/pdf/1607550498-conference-on-digital-cashless-economy.pdf" target="_blank" rel="noopener"><strong>Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA)</strong></a> is a step in the right direction.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>There is a clear need for a fresh perspective by re-imagining some key aspects of DBT initiative. It requires that all stakeholders, including the government, regulators, service providers, industry bodies, and others, need to catalyse radical changes in the way the &lsquo;last mile&rsquo; functions at present.</p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #f51d1d; background-color: #fff9cf;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>In rural India, over-reliance on digital technology has worsened financial exclusion. Discuss.</p>
</td>
</tr>
</tbody>
</table>
<p style="text-align: center;"></p>
<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/m5eqIEUgN64" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>This editorial is based on <a href="https://www.hindustantimes.com/editorials/india-at-the-horse-shoe-table/story-KZexjyZVCTyCJKnoDIuqCN.html" target="_blank" rel="noopener"><strong>&ldquo;India at the horseshoe table&rdquo;</strong></a> which was published in The Hindustan Times on January 6th, 2020. Now watch this on our Youtube channel.</p>',
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	(int) 13 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7396,
		'category_id' => (int) 21,
		'title' => 'Payment Infrastructure Development Fund Scheme',
		'description' => '<h3>Why in News</h3>
<p>Recently, 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> (RBI) has announced the operationalisation of the <a href="/daily-updates/daily-news-analysis/payments-infrastructure-development-fund" target="_blank" rel="noopener"><strong>Payment Infrastructure Development Fund</strong></a> <strong>(PIDF) scheme</strong>.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Objective:</strong><br />
<ul style="list-style-type: circle;">
<li>Develop <strong>payment acceptance infrastructure in tier-3 to tier-6 cities</strong> (centres), with a special focus on the <strong>north-eastern states</strong> of <strong>the country</strong>.</li>
</ul>
</li>
<li><strong>Time Period:</strong><br />
<ul style="list-style-type: circle;">
<li>The fund will be operational for <strong>three years</strong> effective from <strong>1<sup>st</sup> January, 2021</strong> and may be extended for <strong>two more years</strong>.</li>
</ul>
</li>
<li><strong>Management:</strong><br />
<ul style="list-style-type: circle;">
<li>An <strong>Advisory Council</strong> (AC) under the chairmanship of RBI <strong>deputy governor BP Kanungo</strong> has been constituted for managing the PIDF.</li>
</ul>
</li>
<li><strong>Fund Allocated:</strong><br />
<ul style="list-style-type: circle;">
<li>The PIDF presently has a corpus of <strong>Rs. 345 crore</strong>, with <strong>Rs. 250 crore</strong> contributed by the RBI and <strong>Rs. 95 crore</strong> by the major <strong>authorised card networks in the country.</strong> The <strong>authorised card networks</strong> shall contribute in all <strong>Rs. 100 crore</strong>.</li>
<li>Besides the initial corpus, PIDF shall also receive annual contributions from <strong>card networks and card issuing banks</strong>.<br />
<ul style="list-style-type: disc;">
<li>For example, Card networks will have to chip in <strong>0.01 paisa per rupee of transaction</strong>.</li>
<li>The role of a <strong>card network</strong> is to facilitate transactions between merchants and card issuers. E.g. Mastercard, Visa.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Implementation:</strong><br />
<ul style="list-style-type: circle;">
<li>The focus shall be to target those merchants who are yet to be <strong>terminalised (merchants who do not have any payment acceptance device).</strong><br />
<ul style="list-style-type: disc;">
<li>Merchants engaged in services such as <strong>transport and hospitality, government payments, fuel pumps, public distribution system (PDS) shops, healthcare and kirana shops</strong> may be included, especially in the targeted geographies.</li>
</ul>
</li>
<li>The fund will be used to <strong>subsidize banks and non-banks for deploying payment infrastructure</strong>, which will be contingent upon specific targets being achieved.</li>
<li>The <strong>Advisory Council will devise a transparent mechanism for allocation of targets</strong> to acquiring banks and non-banks in different segments and locations.<br />
<ul style="list-style-type: disc;">
<li>The <strong>implementation of targets shall be monitored by the RBI</strong> with assistance from card networks, the Indian Banks&rsquo; Association (IBA) and the Payments Council of India (PCI).</li>
<li><strong>Acquiring banks</strong> (also <strong>acquirers or merchant banks</strong>) are financial institutions processing debit and credit card transactions on behalf of a merchant or business.</li>
</ul>
</li>
<li>Tentatively, <strong>tier-3 and tier-4 centres</strong> will be allocated <strong>30%</strong> of the acceptance devices, <strong>tier-5 and tier-6 centres</strong> will get <strong>60%</strong> and the <strong>north eastern states will be given 10%.</strong></li>
<li>Multiple payment acceptance devices and infrastructure supporting underlying card payments, such as <strong>physical Point of Sale, mobile Point of Sale, General Packet Radio Service (GPRS) , Public Switched Telephone Network (PSTN) and QR code-based payments</strong> will be funded under the scheme.</li>
</ul>
</li>
<li><strong>Breakup of Subsidy:</strong><br />
<ul style="list-style-type: circle;">
<li>A subsidy of <strong>30% to 50% of cost of physical PoS and 50% to 75% subsidy for Digital PoS</strong> shall be offered.</li>
<li>The subsidy shall be granted on a <strong>half-yearly basis</strong>, after ensuring that performance parameters are achieved, including conditions for <strong>&lsquo;active&rsquo;</strong> status of the acceptance device and <strong>&lsquo;minimum usage&rsquo;</strong> criteria, as defined.</li>
</ul>
</li>
<li><strong>Fixing Accountability:</strong><br />
<ul style="list-style-type: circle;">
<li>Acquirers of the subsidy shall submit <strong>quarterly reports</strong> on the <strong>achievement of targets to the RBI.</strong></li>
</ul>
</li>
<li><strong>Other Related Steps:</strong><br />
<ul style="list-style-type: circle;">
<li>The setting of PIDF is in line with the measures proposed by the <a href="/daily-updates/daily-news-analysis/payment-and-settlement-systems-in-india-vision-2019-2021-1" target="_blank" rel="noopener"><strong>vision document on payment and settlement systems in India 2019-2021.</strong></a></li>
<li>Reserve Bank of India (RBI) has constructed a composite <a href="/daily-updates/daily-news-analysis/digital-payments-index-rbi" target="_blank" rel="noopener"><strong>Digital Payments Index</strong></a> (DPI) to capture the extent of digitisation of payments across the country.</li>
</ul>
</li>
</ul>
<p><a href="https://www.financialexpress.com/economy/rbi-operationalises-payment-infra-development-fund/2165068/" target="_blank" rel="noopener">Source:FE</a></p>',
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	(int) 14 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7304,
		'category_id' => (int) 22,
		'title' => 'MSME Sector In India',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.thehindubusinessline.com/opinion/powering-msmes-in-the-next-decade-of-growth/article33404359.ece" target="_blank" rel="noopener">&ldquo;Powering MSMEs in the next decade of growth&rdquo;</a> which was published in The Hindu Bussiness on 23/12/2020. It talks about the active areas, opportunities and associated challenges of MSME sector in India.</p>
</div>
<p><a href="/current-affairs-news-analysis-editorials/news-editorials/13-07-2019" target="_blank" rel="noopener"><strong>Micro, Small and Medium Enterprises (MSMEs)</strong></a> have always played a vital role in the Indian economy. Not only do the 6.3 crore MSMEs in India contribute one-third to the GDP of the country but also provide employment to large sections of society.</p>
<p>Moreover, the sector is a critical source of livelihood and provides nearly 110 million jobs. Therefore, with the current emphasis on <a href="/printpdf/atma-nirbhar-bharat-abhiyan-challenges" target="_blank" rel="noopener"><strong>Atmanirbhar Bharat Abhiyan</strong></a>, these MSMEs have become even more significant to India&rsquo;s economic and financial strategy.</p>
<p>Acknowledging the importance of the sector, the government of India (in 2019) envisioned that the sector would account for half of India&rsquo;s GDP and add 50 million fresh jobs over the next five years.</p>
<p>However, there were significant signs of a slowdown due to <a href="/printpdf/comprehensive-action-plan-for-covid-19" target="_blank" rel="noopener">Covid-19</a> (on the demand side) and structural reforms (on the supply side) like GST (goods and services tax) rollout and demonetisation also had adverse effects on the MSME sector.</p>
<h3>Issues Faced by MSME</h3>
<p>The fact that MSMEs contribute 55% and 60% to the GDP of Germany and China respectively is a clear indication that India still has a long way to go in its MSME journey. Following are the are that ails the MSME sector:</p>
<ul style="list-style-type: square;">
<li><strong>The Credit Conundrum:</strong> A concerning gap in India&rsquo;s MSME sector has been the credit supply shortage to MSMEs.
<ul style="list-style-type: circle;">
<li>The formal credit available to this sector is ₹16 trillion. The viable credit gap is ₹20 trillion against a total demand of ₹36 trillion.</li>
<li>Further MSMEs in India typically rely on <a href="/daily-updates/daily-news-editorials/shadow-banking-and-the-crisis-in-the-indian-economy" target="_blank" rel="noopener">NBFCs and MFIs</a> for their financing needs, given the lack of access to the banking sector.</li>
<li>With the NBFC sector enduring a liquidity crunch since September 2018, MSMEs were hard-pressed for money.</li>
</ul>
</li>
<li><strong>Lack of Formalisation Amongst MSMEs:</strong> The main reason for this credit gap is the lack of formalisation amongst MSMEs.
<ul style="list-style-type: circle;">
<li>Almost 86% of the manufacturing MSMEs operating in the country are unregistered.</li>
<li>Even today, out of the 6.3 crore MSMEs only about 1.1 crores are registered with Goods and Services Tax regime.</li>
<li>The number of income tax filers are even less. As a result, Indian MSMEs&rsquo; credit requirement has been largely unmet due to limited availability and access to data and legacy underwriting methods.</li>
</ul>
</li>
<li><strong>Technological Disruption:</strong> India&lsquo;s MSME sector is based on obsolete technology, which hampers its production efficiency.
<ul style="list-style-type: circle;">
<li>With the emergence of new technologies like Artificial Intelligence, Data Analytics, Robotics and related technologies (collectively called as <a href="/loksabha-rajyasabha-discussions/in-depth-industrial-revolution-4-0" target="_blank" rel="noopener">Industry Revolution 4.0</a>) is a bigger challenge for MSMEs than for organized large-scale manufacturing.</li>
</ul>
</li>
<li><strong>Regulatory Cholesterol:</strong> MSMEs require a lot of government services and approvals, for which the entrepreneur has to run around various government departments.
<ul style="list-style-type: circle;">
<li>Getting construction permits, enforcing contracts, paying taxes, starting a business and trading across borders continue to constrain doing business.</li>
<li>Regulatory risks and policy uncertainty in the past have dented investor confidence.</li>
</ul>
</li>
<li><strong>Problem of Scale:</strong> Majority of the firms in MSMEs are micro-enterprises.
<ul style="list-style-type: circle;">
<li>The MSME space is virtually a micro space formed by a plethora of small and local shops and hence, scaling them up is a problem, especially when fund access is challenging.</li>
</ul>
</li>
</ul>
<p>Due to these issues, the productivity of small firms in Indian manufacturing is abysmally low relative to larger firms. This has created a conspicuous &lsquo;missing middle&rsquo; in the size structure of firms, which deters employment generation and dynamism in Indian manufacturing.</p>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Developing Bond Market:</strong> With India&rsquo;s bond markets starting to take shape, promotion of SME bond issuances can provide a fillip to debt capital markets participation of MSMEs.
<ul style="list-style-type: circle;">
<li>While such issuances will provide lower interest rates for MSMEs than other financial intermediaries charge, they will also be a viable high-yield instrument for informed and educated investors operating in the bond market.</li>
</ul>
</li>
<li><strong>Creation of Independent Regulator:</strong> Given the growing importance of the data economy, it is paramount that the government creates an independent body which can advise and provide consultancy to MSMEs and enable them to win in this new, digital world.</li>
<li><strong>Reforming Labour Laws:</strong> Labour laws are not very conducive to MSME growth. They must strike the right balance between providing a growth-oriented framework for MSMEs to run in and providing sufficient protection for the rights of workers.</li>
<li><strong>Improving Regulation:</strong> While Ease of Doing Business has been a focus area, the reporting, approval and compliance requirements for small businesses continue to border on the higher side.
<ul style="list-style-type: circle;">
<li>If we truly want to create a country where MSMEs can influence our economic destiny, it is imperative that they are provided with a hassle-free regulatory framework which works for them rather than against them.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>MSMEs are the backbone of a resilient national economy. Prioritising their development is critical to the future of the country. The government has come out with a variety of enabling mechanisms over the last few years.</p>
<p>India needs more such measures, especially in the current environment. The next decade will be the metamorphosis of India from an emerging power to an established economic powerhouse and MSMEs will be an important cog in the wheel on this journey.</p>
<p><a href="http://www.drishtiias.com/images/uploads/1608812812_image1.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1608812812_image1.png" width="485" height="405" style="display: block; margin-left: auto; margin-right: auto;" /></a></p>
<table border="1" style="width: 100%; border-collapse: collapse; border-color: #099e9e; background-color: #cdfafa;">
<tbody>
<tr>
<td style="width: 100%;">
<p><em><strong>Drishti Mains Question</strong></em></p>
<p>Prioritising the development of the Micro, Small and Medium Enterprises (MSMEs) sector is critical to the future of the country. Critically analyse.</p>
</td>
</tr>
</tbody>
</table>
<p style="text-align: center;"></p>
<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/YH4bdHYjbYE" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="allowfullscreen"></iframe></p>
<p>This editorial is based on <a href="https://www.thehindu.com/opinion/editorial/pandemic-resilience-the-hindu-editorial-on-call-for-a-new-health-law-post-covid-19/article33397152.ece" target="_blank" rel="noopener">&ldquo;Pandemic resilience&rdquo;</a> which was published in The Hindu on December 23rd, 2020. Now watch this on our Youtube channel.</p>',
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	(int) 15 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7303,
		'category_id' => (int) 21,
		'title' => 'PCA Ruling on Retrospective Taxation',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <a href="/daily-updates/daily-news-analysis/international-tribunal-rejects-claims-against-india" target="_blank" rel="noopener"><strong>Permanent Court of Arbitration</strong></a> (PCA) has ruled that the <strong>Indian government was wrong in applying a retrospective tax on energy giant Cairn Plc</strong>.</p>
<ul style="list-style-type: square;">
<li>The verdict comes barely three months after <a href="/daily-updates/daily-news-analysis/pca-decision-on-retrospective-taxation-by-india" target="_blank" rel="noopener"><strong>India lost arbitration to Vodafone Plc</strong></a> over the retrospective tax legislation amendment.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Background:</strong><br />
<ul style="list-style-type: circle;">
<li>In <strong>2006-07, Cairn UK transferred shares</strong> of Cairn India Holdings to Cairn India on which <strong>Income Tax authorities</strong> slapped a <strong>tax demand of Rs. 24,500 crore</strong> as it contended that Cairn UK had made capital gains.<br />
<ul style="list-style-type: disc;">
<li>Owing to different interpretations of capital gains, the <strong>company refused to pay the tax,</strong> which prompted <strong>cases being filed at the <a href="/daily-updates/daily-news-analysis/79th-foundation-day-of-itat" target="_blank" rel="noopener">Income Tax Appellate Tribunal</a></strong> (ITAT) and the <strong>Delhi High Court</strong>.</li>
</ul>
</li>
<li>In <strong>2012,</strong> Indian government&rsquo;s budget <strong>retrospectively amended the tax code,</strong> giving itself the power to go after <strong>mergers and acquisitions (M&amp;A) deals all the way back to 1962</strong> if the underlying asset was in India.</li>
<li>In <strong>2015,</strong> Cairn Energy Plc <strong>commenced international arbitration</strong> proceedings against the Indian government.</li>
</ul>
</li>
<li><strong>PCA Ruling:</strong><br />
<ul style="list-style-type: circle;">
<li>The <strong>Indian government must pay roughly Rs. 8,000 crore in damages</strong> to Cairn.</li>
<li>Cairn Tax Issue was <strong>not just a tax-related issue but an investment-related dispute,</strong> and therefore the issue comes under its jurisdiction.</li>
<li>The Indian government&rsquo;s <strong>retrospective demand was in breach of the guarantee of fair and equitable treatment</strong>.</li>
<li>The Centre had <strong>failed to uphold its obligations under the <a href="/daily-updates/daily-news-editorials/model-bilateral-investment-treaty" target="_blank" rel="noopener">UK-India Bilateral Investment Treaty</a></strong> and international laws in seeking tax payments from the company for its business reorganisation in the country.</li>
</ul>
</li>
<li><strong>India&rsquo;s Stand:</strong><br />
<ul style="list-style-type: circle;">
<li>The government <strong>will study the award and all its aspects</strong> carefully in consultation with its counsel.</li>
<li>After such consultations, the government will <strong>consider all options and make a decision on the further course of action</strong>, including legal remedies before appropriate fora.</li>
</ul>
</li>
</ul>
<p><strong>Retrospective Taxation</strong></p>
<ul style="list-style-type: square;">
<li>It <strong>allows a country to pass a rule on taxing certain products, items or services</strong> and deals and charge companies from a time behind the date on which the law is passed.</li>
<li>Countries <strong>use this route to correct any anomalies in their taxation policies</strong> that have, in the past, allowed companies to take advantage of such loopholes.</li>
<li>Retrospective Taxation <strong>hurts companies that had knowingly or unknowingly interpreted the tax rules differently</strong>.</li>
<li>Apart from India, many countries including the <strong>USA, the UK, the Netherlands, Canada, Belgium, Australia</strong> and <strong>Italy</strong> have retrospectively taxed companies.</li>
</ul>
<div class="border-bg">
<p><strong>Permanent Court of Arbitration</strong></p>
<ul style="list-style-type: square;">
<li>It was <strong>established in 1899</strong> and is <strong>headquartered in The Hague, Netherlands</strong>.</li>
<li><strong>Purpose:</strong> It is an <strong>intergovernmental organization</strong> dedicated to serve the international community in the field of dispute resolution and to facilitate arbitration and other forms of dispute resolution between States.</li>
<li>It has a <strong>three-part organizational structure</strong> consisting of:<br />
<ul style="list-style-type: circle;">
<li><strong>Administrative Council -</strong> to oversee its policies and budgets,</li>
<li><strong>Members of the Court -</strong> a panel of independent potential arbitrators, and</li>
<li><strong>International Bureau -</strong> its Secretariat, headed by the Secretary-General.</li>
</ul>
</li>
<li><strong>Funds:</strong> It has a <strong>Financial Assistance Fund</strong> which aims at helping developing countries meet part of the costs involved in international arbitration or other means of dispute settlement offered by the PCA.</li>
</ul>
</div>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>An investment-friendly business environment would increase economic activity and help raise more revenue over time for the government. It is to be hoped that tax officials&rsquo; desire to deny their defeat and to try and hang on to legally untenable revenue finds an unsympathetic hearing from politicians in the finance ministry.</li>
<li>India needs to craft meaningful and clear dispute resolution mechanisms in cross-border transactions to prevent the disputes from going to international courts, and save the cost and time expenditure. Improving the arbitration ecosystem will have a positive impact on the <a href="/daily-updates/daily-news-analysis/steps-to-boost-ease-of-doing-business" target="_blank" rel="noopener"><strong>ease of doing business</strong></a>.</li>
</ul>
<p><a href="https://indianexpress.com/article/explained/cairn-india-tax-dispute-case-hague-ruling-explained-7116416/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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	(int) 16 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7286,
		'category_id' => (int) 21,
		'title' => 'Fraud Cases in Public Sector Banks',
		'description' => '<h3>Why in News</h3>
<p><a href="/daily-updates/daily-news-analysis/amalgamation-of-three-public-sector-banks" target="_blank" rel="noopener"><strong>Public Sector Banks</strong></a> (PSBs) have been<strong> reviewing loan accounts</strong> and are expected to report more fraud cases in accounts which have earlier been put under their<strong> Early Warning Signals</strong> (EWS) system.</p>
<ul style="list-style-type: square;">
<li>The<strong><a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener"> Reserve Bank of India</a></strong> (RBI) developed the EWS framework as it noticed a delay in the detection and reporting of banking frauds.</li>
<li>The <strong>objective of the EWS framework</strong> is to prevent and detect these offences, to provide timely reporting to regulators and to initiate staff accountability proceedings thereby ensuring that the operations and risk-taking ability of the banks is not impacted.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Data Analysis:</strong><br />
<ul style="list-style-type: circle;">
<li>The <strong>total cases of frauds</strong> (involving Rs. 1 lakh and above) reported by banks and financial institutions <strong>shot up by 28% by volume</strong> and <strong>159% by value during 2019-20</strong> despite the Reserve Bank of India (RBI) tightening the supervision and vigilance.</li>
<li>While there were 6,799 frauds involving Rs. 71,543 crore as of March 2019, the number of frauds jumped to 8,707 involving Rs.1,85,644 crore, says the <a href="/daily-updates/daily-news-analysis/rbi-s-annual-report-2020" target="_blank" rel="noopener"><strong>RBI&rsquo;s Annual Report 2020.</strong></a></li>
<li><strong>PSBs topped the fraud table</strong> with 4,413 cases involving Rs. 1,48,400 crore.</li>
<li><strong>Private banks</strong> reported 3,066 frauds involving Rs. 34,211 crore.</li>
</ul>
</li>
<li><strong>Current Scenario:</strong><br />
<ul style="list-style-type: circle;">
<li>Banks are <strong>going through their accounts which were put on alert earlier.</strong> They will <strong>report fraud</strong> wherever such instances are found in case of large accounts, and <strong>make 100% provision against them.</strong><br />
<ul style="list-style-type: disc;">
<li>These are being reviewed thoroughly to <strong>ensure that banks have adequately provisioned balance sheets.</strong></li>
</ul>
</li>
<li>The RBI also indicated that the <strong>frauds registered during 2019-20 actually occurred</strong> in the <strong>loans sanctioned during 2010-2014.</strong><br />
<ul style="list-style-type: disc;">
<li>The <strong>average lag between the date of occurrence of frauds and their detection</strong> by banks and financial institutions was 24 months during 2019-20.</li>
<li>In <strong>large frauds,</strong> of Rs. 100 crore and above, the <strong>average lag was 63 months.</strong></li>
</ul>
</li>
<li>After <strong>forensic audit and investigation</strong> into these accounts, <strong>diversions and other issues</strong> were found.<br />
<ul style="list-style-type: disc;">
<li>RBI defines <strong>diversion of funds</strong> as utilisation of short-term working capital funds for long-term purposes not in conformity with the terms of sanction; deploying borrowed funds for purposes/activities other than those for which the loan was sanctioned; and transferring borrowed funds to subsidiaries/group companies or other corporates by whatever modalities.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Reasons:</strong><br />
<ul style="list-style-type: circle;">
<li>Weak implementation of EWS by banks.</li>
<li>Non-detection of EWS during internal audits.<br />
<ul style="list-style-type: disc;">
<li><strong>Internal audits</strong> evaluate a<strong> company's internal controls, including its corporate governance and accounting processes.</strong></li>
<li>They ensure compliance with laws and regulations, help maintain accurate and timely financial reporting and data collection.</li>
</ul>
</li>
<li>Non-cooperation of borrowers during forensic audits.<br />
<ul style="list-style-type: disc;">
<li><strong>Forensic audit</strong> is an <strong>examination and evaluation of a firm's or individual's financial records</strong> to derive evidence that can be used in a court of law or legal proceeding.</li>
</ul>
</li>
<li>Inconclusive audit reports.</li>
<li>Lack of decision making in Joint Lenders&rsquo; meetings account.</li>
</ul>
</li>
<li><strong>Overcoming Measures:</strong><br />
<ul style="list-style-type: circle;">
<li>The EWS mechanism is getting<strong> revamped alongside the strengthening of the concurrent audit function,</strong> with <strong>timely and conclusive forensic audits</strong> of borrower accounts under scrutiny.</li>
<li>RBI is engaged in <strong>interlinking various databases and information systems</strong> to improve fraud monitoring and detection.</li>
<li>Online reporting of frauds by the <a href="/daily-updates/daily-news-editorials/A%20nuanced%20understanding%20of%20the%20NBFC%20sector" target="_blank" rel="noopener"><strong>Non-Banking Financial Companies</strong></a> (NBFC) and the <strong>Central Fraud Registry</strong> (CFR) portal of <a href="/mains-practice-question/question-364" target="_blank" rel="noopener"><strong>Scheduled Commercial Banks</strong> </a>(SCBs) augmented with new features, are<strong> likely to be operational by January 2021.</strong><br />
<ul style="list-style-type: disc;">
<li>RBI has put in place CFR, which is a <strong>searchable database to help banks detect instances of fraud</strong> by borrowers early on.</li>
</ul>
</li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/business/banking-and-finance/psbs-scan-older-loans-may-lead-to-more-fraud-discovery-7114116/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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	(int) 17 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7247,
		'category_id' => (int) 21,
		'title' => 'Bitcoins',
		'description' => '<h3>Why in News</h3>
<p>Recently,<strong> Bitcoin,</strong> the <a href="/daily-updates/daily-news-editorials/crypto-currency-exchange" target="_blank" rel="noopener"><strong>cryptocurrency</strong></a>, has crossed<strong> 20,000 US dollars</strong> in value.</p>
<ul style="list-style-type: square;">
<li>Bitcoin's price has<strong> always been volatile,</strong> and there is<strong> no clear explanation</strong> for its current rise.</li>
<li><strong>Cryptocurrency</strong> is a specific type of virtual currency, which is decentralised and protected by cryptographic encryption techniques. <br />
<ul style="list-style-type: circle;">
<li><strong>Bitcoin, Ethereum, Ripple</strong> are a few notable examples of cryptocurrencies.</li>
</ul>
</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Introduction:</strong> <br />
<ul style="list-style-type: circle;">
<li>Bitcoin is a type of digital currency that enables instant payments to anyone. Bitcoin was<strong> introduced in 2009.</strong> Bitcoin is based on an open-source protocol and is<strong> not issued by any central authority.</strong></li>
</ul>
</li>
<li><strong>History:</strong><br />
<ul style="list-style-type: circle;">
<li>The origin of Bitcoin is unclear, as is who founded it. A person, or a group of people, who went by the identity of <strong>Satoshi Nakamoto</strong> are said to have conceptualised an accounting system in the aftermath of the<strong> 2008 financial crisis.</strong></li>
</ul>
</li>
<li><strong>Use:</strong><br />
<ul style="list-style-type: circle;">
<li>Originally, Bitcoin was intended to provide an<strong> alternative to <a href="/current-affairs-news-analysis-editorials/news-analysis/05-03-2020/print" target="_blank" rel="noopener">fiat money</a></strong> and become a universally accepted <strong>medium of exchange directly between two involved parties.</strong> <br />
<ul style="list-style-type: disc;">
<li><strong>Fiat money</strong> is a <strong>government-issued currency</strong> that is <strong>not backed by a commodity such as gold.</strong><br />
<ul style="list-style-type: disc;">
<li>It gives central banks <strong>greater control over the economy</strong> because they can control how much money is printed.</li>
<li>Most modern paper currencies, such as the<strong> US dollar and Indian Rupee are fiat currencies.</strong></li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li><strong>Record of Bitcoins (Blockchain):</strong><br />
<ul style="list-style-type: circle;">
<li>All the transactions ever made are contained in a<strong> publicly available, open ledger,</strong> although in an anonymous and an encrypted form called a<strong> blockchain.</strong><br />
<ul style="list-style-type: disc;">
<li>Transactions can be denominated in <strong>sub-units of a Bitcoin.</strong> <br />
<ul style="list-style-type: disc;">
<li><strong>Satoshi</strong> is the smallest fraction of a Bitcoin.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Blockchain</strong> is a<strong> shared, immutable ledger</strong> that facilitates the <strong>process of recording transactions and tracking assets in a business network.</strong> <br />
<ul style="list-style-type: disc;">
<li>An asset can be <strong>tangible</strong> (a house, car, cash, land) or<strong> intangible</strong> (intellectual property, patents, copyrights, branding).</li>
</ul>
</li>
<li>Virtually<strong> anything of value can be tracked and traded on a blockchain network,</strong> reducing risk and cutting costs for all involved.<br />
<ul style="list-style-type: disc;">
<li>A simple <strong>analogy for understanding blockchain technology</strong> is a<strong> Google Doc.</strong></li>
<li>When one creates a document and shares it with a group of people, the document is distributed instead of copied or transferred.</li>
<li>This creates a <strong>decentralized distribution chain that gives everyone access to the document at the same time.</strong></li>
</ul>
</li>
<li>It needs to be noted that<strong> other usage and applications of Blockchain technology</strong> have emerged in the last few years.<br />
<ul style="list-style-type: disc;">
<li>The government of Andhra Pradesh and Telangana have <strong>put the land records on the blockchain technology</strong> owing to its easy traceability feature.</li>
<li>Election Commission (EC) officials are exploring the<a href="/daily-updates/daily-news-analysis/blockchain-technology-in-voting" target="_blank" rel="noopener"><strong> potential of using blockchain technology to enable remote voting.</strong></a></li>
</ul>
</li>
</ul>
</li>
<li><strong>Acquiring Bitcoins:</strong><br />
<ul style="list-style-type: circle;">
<li>One <strong>can either mine a new Bitcoin</strong> if they have the computing capacity,<strong> purchase them via exchanges,</strong> or <strong>acquire them in over-the-counter, person-to-person transactions.</strong></li>
<li><strong>Miners</strong> are the people who validate a Bitcoin transaction and secure the network with their hardware. <br />
<ul style="list-style-type: disc;">
<li>The Bitcoin protocol is designed in such a way that new Bitcoins are created at a fixed rate.</li>
<li>No developer has the power to manipulate the system to increase their profits.</li>
<li>One unique aspect of Bitcoin is that only<strong> 21 million units</strong> will ever be created.</li>
</ul>
</li>
<li>A <strong>Bitcoin exchange</strong> functions like a bank where a person<strong> buys and sells Bitcoins with traditional currency.</strong> Depending on the demand and supply, the <strong>price of a Bitcoin keeps fluctuating.</strong></li>
</ul>
</li>
<li><strong>Bitcoin Regulation:</strong><br />
<ul style="list-style-type: circle;">
<li>The supply of bitcoins is<strong> regulated by software and the agreement of users of the system</strong> and cannot be manipulated by any government, bank, organisation or individual.</li>
<li>Bitcoin was intended to come across as a <strong>global decentralised currency,</strong> any central authority regulating it would effectively defeat that purpose.</li>
<li>It needs to be noted that multiple governments across the world are<strong> investing in developing Central Bank Digital Currencies (CBDCs),</strong> which are digital versions of national currencies.</li>
</ul>
</li>
<li><strong>Legitimacy of Bitcoins (or cryptocurrencies) in India:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>In the 2018-19 <a href="/to-the-points/paper3/government-budgeting" target="_blank" rel="noopener">budget</a> speech,</strong> the Finance Minister announced that the <strong>government does not consider cryptocurrencies as legal tender</strong> and will take all measures to eliminate their use in financing illegitimate activities or as a part of the payment system.</li>
<li><strong>In April 2018, <a href="/important-institutions/drishti-specials-important-institutions-national-institutions/important-institutions-national-institution-reserve-bank-of-india" target="_blank" rel="noopener">Reserve Bank of India (RBI)</a></strong> notified that entities regulated by it should not deal in virtual currencies or provide services for facilitating any person or entity in dealing with or settling virtual currencies.<br />
<ul style="list-style-type: disc;">
<li>However, the <a href="/daily-updates/daily-news-analysis/ban-on-cryptocurrency-trading-removed" target="_blank" rel="noopener"><strong>Supreme Court struck down the ban</strong> </a>on trading of virtual currencies (VC) in India, which was imposed by the RBI.</li>
</ul>
</li>
<li>The <strong>Supreme Court</strong> has held that <strong>cryptocurrencies</strong> are in the nature of commodities and hence they <strong>can not be banned.</strong></li>
</ul>
</li>
<li><strong>Possible Reasons for the Rise in the Value of the Bitcoin:</strong> <br />
<ul style="list-style-type: circle;">
<li>Increased acceptance during the <a href="/daily-updates/daily-news-analysis/covid-19-now-pandemic-who" target="_blank" rel="noopener"><strong>pandemic.</strong></a></li>
<li>Global <strong>legitimacy from large players</strong> like payments firm PayPal, and Indian lenders like State Bank of India, ICICI Bank, HDFC Bank and Yes Bank.</li>
<li>Some <strong>pension funds </strong>and<strong> insurance funds </strong>are<strong> investing in Bitcoins.</strong></li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1608360316_image1.jpg" target="_blank" rel="noopener"><strong><img class="content-img" src="http://www.drishtiias.com/images/uploads/1608360316_image1.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="650" caption="false" /></strong></a></p>
<p><a href="https://indianexpress.com/article/explained/should-you-invest-in-bitcoin-7109136/" target="_blank" rel="noopener"><strong>Source:IE</strong></a></p>',
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	(int) 18 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7239,
		'category_id' => (int) 21,
		'title' => 'National Security Directive',
		'description' => '<h3>Why in News</h3>
<p>Recently, the<strong> Cabinet Committee on Security</strong> has approved the setting up of a <strong>new National Security Directive</strong> on the <strong>telecommunication</strong> sector.</p>
<ul style="list-style-type: square;">
<li>Also, the Union Cabinet has <strong>approved the auction of 2,251.25 megahertz of spectrum</strong> with a<strong> reserve price of Rs. 3.92 lakh crore.</strong></li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Background:</strong><br />
<ul style="list-style-type: circle;">
<li>The Centre asked all <strong>telecom operators to undertake an &lsquo;information security audit&rsquo;</strong> of their networks.</li>
<li>The<strong> objective</strong> was to <strong>specifically check for any &lsquo;backdoor&rsquo;</strong> or <strong>&lsquo;trapdoor&rsquo; vulnerabilities</strong> in the telecom networks, which can be <strong>exploited to extract information and pass on illegally</strong> to agencies around the world.<br />
<ul style="list-style-type: disc;">
<li>A backdoor or a trap door is a <strong>bug installed in the telecom hardware that allows companies to listen in or collect data</strong> being shared on the network.</li>
</ul>
</li>
<li>Chinese vendors Huawei and ZTE have been <strong>under global scrutiny for allegedly installing backdoor vulnerabilities</strong> and <strong>spying</strong> for the Chinese government and have been <strong>banned by several countries.</strong><br />
<ul style="list-style-type: disc;">
<li>Almost <strong>30% of Bharti Airtel&rsquo;s network comprises Chinese telecom equipment</strong> and it is <strong>40% for Vodafone Idea&rsquo;s</strong> network. <strong>State-run telcos</strong> Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) too <strong>have equipment from Chinese vendors,</strong> including <strong>Huawei</strong> and <strong>ZTE,</strong> in their 3G and older networks.</li>
</ul>
</li>
<li><strong>All vendors</strong> including Huawei and ZTE were<strong> allowed to participate in 5G trials</strong> but their <strong>participation became difficult owing to developments like the Galwan Valley Standoff</strong> in Ladakh.<br />
<ul style="list-style-type: disc;">
<li>The <strong>government barred BSNL and MTNL from using Chinese equipment</strong> for the roll-out of its 4G network.</li>
<li>The <strong>Department of Telecommunications</strong> hinted that it would <strong>announce guidelines asking even private telcos to refrain from using Chinese equipment,</strong> however, no such guidelines have been issued till now.</li>
</ul>
</li>
</ul>
</li>
<li><strong>National Security Directive:</strong><br />
<ul style="list-style-type: circle;">
<li>It aims to <strong>classify telecom products and their sources</strong> under the<strong> &lsquo;trusted&rsquo;</strong> and <strong>&lsquo;non-trusted&rsquo;</strong> categories.</li>
<li>It will make its decision based on <strong>approval of the National Security Committee on Telecom.</strong><br />
<ul style="list-style-type: disc;">
<li>It will be <strong>headed by the deputy National Security Advisor</strong> (NSA) and have members from other departments and ministries, and independent experts as well as two members from the industry.</li>
</ul>
</li>
<li>The<strong> National Cyber Security Coordinator</strong> is the <strong>designated authority</strong> and will <strong>devise the methodology</strong> to designate trusted products.</li>
<li>From among the sources declared as trusted sources by the designated authority, those which <strong>meet the criteria of the Department of Telecom&rsquo;s preferential market access policy</strong> will be certified as <strong>India trusted sources.</strong><br />
<ul style="list-style-type: disc;">
<li>The policy provides <strong>opportunities to local manufacturers of equipment and handsets in the &ldquo;sensitive&rdquo; telecom sector </strong>to<strong> counter dumping of products</strong> by other countries.</li>
</ul>
</li>
<li><strong>Telecom Service Providers</strong> (TSPs) are <strong>required to connect new devices which are designated trusted</strong> products.</li>
<li>However, the directive<strong> will not ask TSPs to mandatorily replace the old and existing equipment</strong> and does not impact the ongoing annual maintenance contracts or upgrades to old equipment either.</li>
</ul>
</li>
<li><strong>Significance:</strong><br />
<ul style="list-style-type: circle;">
<li>Apart from the directive, the government will release at regular intervals new guidelines for<strong> effective monitoring and effective control of the network security</strong> of the TSPs.</li>
<li>The move could potentially make it <strong>more difficult for Chinese telecom equipment vendors</strong> to supply equipment to Indian telecom players.</li>
<li><strong>Mobile applications that either have Chinese origins or have central servers in China</strong> may also find <strong>re-entry in the market extremely difficult.</strong><br />
<ul style="list-style-type: disc;">
<li>Since <strong>June 2020,</strong> the <strong>Centre has banned over 200 Chinese apps,</strong> citing national security concerns.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h3>Telecom Spectrum Auction</h3>
<ul style="list-style-type: square;">
<li>Spectrum in the <strong>frequency bands of 700MHz, 800MHz, 900MHz, 1,800MHz, 2,100MHz, 2,300MHz and 2,500MHz</strong> would be offered for<strong> 20 years.</strong></li>
<li>The auction would help <strong>boost spectrum availability with telecom operators enabling improvements in 4G services.</strong></li>
<li>By winning the right to use spectrum through the auction, incumbent telecom service providers will be<strong> able to augment their network capacity,</strong> whereas<strong> new players will be able to start services.</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Spectrum holding per operator in a service area in India is well below the international average</strong> so any further auctioning of spectrum is needed.</li>
</ul>
</li>
<li><strong>Spectrum Auction:</strong><br />
<ul style="list-style-type: circle;">
<li>It is a <strong>transparent process of spectrum assignment to successful bidders.</strong> <br />
<ul style="list-style-type: disc;">
<li>Sufficient spectrum availability increases the quality of telecom services for the consumers.</li>
</ul>
</li>
<li>It is relevant that the telecom sector today is a key infrastructure provider with <strong>strong linkages with economic growth, direct and indirect employment generation</strong> and expansion of <strong>Digital India.</strong></li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/business/telecom-products-govt-to-come-out-with-trusted-non-trusted-sources-7107760/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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	(int) 19 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7205,
		'category_id' => (int) 21,
		'title' => 'Vehicle Insurance in India',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <strong>Insurance Information Bureau of India</strong> released its annual report <strong>(Motor Annual Report 2018-19).</strong></p>
<ul style="list-style-type: square;">
<li><strong>Insurance Information Bureau (IIB)</strong> was promoted by <a href="/daily-updates/daily-news-analysis/sandbox-for-fintech" target="_blank" rel="noopener"><strong>Insurance Regulatory Development Authority of India (IRDAI)</strong> </a>as a single platform to meet the needs of the insurance industry, in 2009.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Key Findings:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Uninsured Vehicles:</strong><br />
<ul style="list-style-type: disc;">
<li>Nearly<strong> 57% of the total vehicles on the road were uninsured</strong> as of March 2019, up from <strong>54% in March 2018.</strong></li>
<li>The<strong> bulk of uninsured vehicles are two-wheelers,</strong> with the numbers being as high as 66%. <br />
<ul style="list-style-type: disc;">
<li>According to the <a href="/daily-updates/daily-news-editorials/the-motor-vehicles-bill-for-road-safety#:~:text=The%20Motor%20Vehicles%20(Amendment)%20Bill%2C%202019%20is%20based%20on,while%20dealing%20with%20transport%20departments." target="_blank" rel="noopener"><strong>Motor Vehicles Act, 2019</strong></a>, it is <strong>mandatory</strong> for all vehicles to be insured with <strong>third-party vehicle insurance policy.</strong></li>
<li>Third-party insurance is essentially a form of liability insurance purchased by an insured (first-party) from an insurer (second party) for protection against the claims of another (third party). The first party is responsible for their damages or losses, regardless of the cause of those damages.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Reasons:</strong><br />
<ul style="list-style-type: disc;">
<li><strong>Weak enforcement</strong> by traffic police in states, lack of follow-up by insurers and <strong>rising cost of third-party covers</strong> has resulted in a larger number of vehicle owners not renewing their motor insurance policy.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Concerns:</strong><br />
<ul style="list-style-type: circle;">
<li>About 13.2 crore vehicles on Indian roads are plying without the mandatory third-party insurance covers. <strong>Victims of accidents caused by these vehicles will not get adequate compensation</strong> as there would not be any one insurance company on which the liability can be pinned. The owners, too, have limited means to provide compensation.</li>
<li>Findings from the<a href="/daily-updates/daily-news-analysis/road-accidents-in-india-2018" target="_blank" rel="noopener"><strong> annual report on Road Accidents in India</strong></a>, released by the Ministry of Road Transport and Highways in 2019:<br />
<ul style="list-style-type: disc;">
<li><strong>The road accidents numerics:</strong><br />
<ul style="list-style-type: disc;">
<li>It<strong> kills</strong> almost <strong>1.5 lakh people annually</strong> in India.</li>
<li>The<strong> accidents, as well as accident-related deaths</strong> in the period 2010-2018, <strong>dropped drastically compared with the previous decades,</strong> despite the very high rate of growth of automobiles.</li>
<li>The road accident <strong>severity</strong> (the number of persons killed per 100 accidents) has <strong>increased by 0.6% in 2018 compared to 2017.</strong></li>
</ul>
</li>
<li><strong>Major Cause:</strong><br />
<ul style="list-style-type: disc;">
<li><strong>Over-speeding</strong> is a major cause, accounting for 64.4% of the persons killed.</li>
<li><strong>Two-wheelers accounted for the highest share</strong> (35.2%) in total accidents in 2018.</li>
</ul>
</li>
</ul>
</li>
<li><strong>For insurance companies,</strong> the low level of compliance results in a <strong>higher claims ratio as,</strong> on several occasions, the tribunals have held the insurers liable for compensation, asking them to recover from the insured.</li>
</ul>
</li>
<li><strong>Related Global initiatives:</strong><br />
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-analysis/global-status-report-on-road-safety-who" target="_blank" rel="noopener"><strong>Brasilia Declaration on Road Safety (2015):</strong></a><br />
<ul style="list-style-type: disc;">
<li>The declaration was signed at the second Global High-Level Conference on Road Safety held in Brazil. The first conference was held in Russia (2009).</li>
<li>Through the Brasilia Declaration, countries plan to achieve the <a href="/loksabha-rajyasabha-discussions/in-depth-indias-sustainable-development-goals" target="_blank" rel="noopener"><strong>Sustainable Development Goal</strong> </a>3.6 i.e. to half the number of global deaths and injuries from road traffic accidents by 2030.</li>
</ul>
</li>
<li>The<a href="/important-institutions/drishti-specials-important-institutions-international-institution/united-nations-1" target="_blank" rel="noopener"><strong> United Nations</strong></a> has also declared <strong>2010-2020 as the decade of action for Road Safety.</strong></li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>India is <strong>one of the largest auto markets in the world</strong> with over 20 million vehicles sold annually. It is also among the countries with the <strong>highest number of road accidents and fatalities.</strong> In this scenario, it is very risky and dangerous when more than half the vehicles in the country are uninsured.</li>
<li>Insurance will definitely not reduce the death and accidents however it will reduce the loss and will help in post accident recovery.</li>
<li>There is a <strong>need for complementary thrust to spread awareness and improve financial literacy, particularly the concept of insurance, and its importance.</strong></li>
<li>Another area that necessitates regulatory scrutiny is that of<strong> application of technology</strong> in insurance.</li>
<li>The regulator needs to <strong>exercise vigilance</strong> on three other aspects.<br />
<ul style="list-style-type: circle;">
<li>It must ensure that <strong>insurance is not denied to lower-income people</strong> who make up the bulk of the population and have the most need for protection.</li>
<li>It should insist that <strong>insurers facilitate a simple online process</strong> for direct buying of insurance products, bypassing intermediaries.</li>
<li>It should ensure that <strong>players do not overcharge or add hidden costs.</strong></li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/india/over-50-vehicles-on-road-uninsured-report-7103787/" target="_blank" rel="noopener"><strong>Source:IE</strong></a></p>',
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