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Allowing Corporates To Own Bank

This article is based on “Crumbling Firewalls” which was published in The Economic and Political Weekly on 05/12/2020. It talks about...

07 Dec 2020 Mobilization of Resources
Monetary Policy: RBI

Why in News Recently, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has left the repo rate unchanged and maintained an...

05 Dec 2020 Mobilization of Resources
Electrification of Railways

Why in News Recently, the Minister of Railways has inaugurated the newly electrified Dhigawara-Bandikui section of North Western Railway and flagged...

30 Nov 2020 Mobilization of Resources
Mission COVID Suraksha

Why in News The Government of India has announced the stimulus package of Rs. 900 crore for the Mission COVID Suraksha, the Indian Covid-19 Vaccine...

30 Nov 2020 Mobilization of Resources
Cabinet Approves Capital Infusion into NIIF

Why in News Recently, the Union Cabinet has given its approval to the proposal for equity infusion by the Government of Rs. 6000 crores in NIIF Debt...

27 Nov 2020 Mobilization of Resources
KIIFB Controversy

Why in News Recently, the Enforcement Directorate (ED) has opened a preliminary inquiry to examine if borrowings by the Kerala Infrastructure...

24 Nov 2020 Mobilization of Resources
UAE Issues Golden Card Visa

Why in News Recently, the United Arab Emirates (UAE) has approved the issuance of a 10-year golden card visa for more professionals, including PhD...

17 Nov 2020 Mobilization of Resources
PLI Scheme for Ten More Sectors

Why in News The Union Cabinet has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in 10 more sectors for enhancing...

12 Nov 2020 Mobilization of Resources
The Big Picture: Natural Gas Economy

Why in News? Recently, the Government of India has allowed complete marketing freedom for natural gas produced from non-regulated fields. The...

11 Nov 2020 Mobilization of Resources
Startups In India

This article is based on “India is in the middle of a much-needed start-up revolution” which was published in The Hindustan Times on...

10 Nov 2020 Mobilization of Resources
Four Years of Demonetisation

Why in News 8th November 2020 marked the four year anniversary of demonetisation, when Rs. 500 and Rs. 1,000 notes were withdrawn from the system in...

09 Nov 2020 Mobilization of Resources
WhatsApp UPI and NPCI Regulations

Why in News Recently, WhatsApp (a unit of Facebook) has introduced payments services in India following approval by the National Payments...

07 Nov 2020 Mobilization of Resources
Virtual Global Investor Roundtable

Why in News Recently, the Prime Minister has chaired the Virtual Global Investor Roundtable (VGIR), with an aim to attract investment into the...

06 Nov 2020 Mobilization of Resources
India-UAE Meet on Investments

Why in News Recently, the eighth meeting of the India-UAE High-Level Joint Task Force on Investments has been virtually hosted by India in the wake...

05 Nov 2020 Mobilization of Resources
Natural Gas Marketing Reforms

This article is based on “How India is unbottling the ‘gas economy’” which was published in The Hindu Businessline on...

02 Nov 2020 Mobilization of Resources
RBI’s Annual Report on State Finances

Why in News Recently, the Reserve Bank of India (RBI) released its annual report on state finances. Key Points Covid-19 Impact: The double...

29 Oct 2020 Mobilization of Resources
India - Australia Circular Economy Hackathon

Why in News Atal Innovation Mission (AIM- an initiative set up by NITI Aayog), in association with Australia’s Commonwealth Scientific and...

27 Oct 2020 Mobilization of Resources
Insurance Sector in India

This article is based on “Keeping it Saral” which was published in The Hindu Businessline on 22/10/2020. It talks about the journey of...

26 Oct 2020 Mobilization of Resources
Forex Reserves

Why in News According to the Reserve Bank of India (RBI) data, the country’s foreign exchange (forex) reserves touched a lifetime high of USD...

24 Oct 2020 Mobilization of Resources
Rationalisation of Autonomous Institutions

Why in News The Ministry of Finance has recommended that the Ministry of Environment, Forest and Climate Change (MoEFCC) “disengage”...

20 Oct 2020 Mobilization of Resources

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		'title' => 'Allowing Corporates To Own Bank',
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<p>This article is based on <a href="https://www.epw.in/journal/2020/48/editorials/crumbling-firewalls.html" target="_blank" rel="noopener"><strong>&ldquo;Crumbling Firewalls&rdquo;</strong></a> which was published in The Economic and Political Weekly on 05/12/2020. It talks about the pros and cons of recent RBI&rsquo;s Internal Working Group recommendation of allowing industrial houses to promote or own banks.</p>
</div>
<p>Recently, Internal Working Group (IWG) to the Reserve Bank of India the recommended making necessary amendments to the <a href="/daily-updates/daily-news-editorials/co-operative-banking-in-india#:~:text=The%20banking%20related%20functions%20such,the%20Banking%20Regulation%20Act%2C%201949." target="_blank" rel="noopener"><strong>Banking Regulation Act, 1949</strong></a> so as to allow industrial houses to enter into Indian Banking system.</p>
<p>This recommendation of opening up of the banking sector to the corporate sector is in consonance with the policy for giving additional banking licences to more aspirants, including non-banking financial companies.</p>
<p>However, ownership of banks by business groups has always been a contentious idea. In the world , many countries have opted to build strong firewalls between banks and other businesses.</p>
<p>Thus, there is a need to weigh in the pros and cons of allowing industrial houses to promote or own banks.</p>
<h3>Pros of Allowing Corporates To Own Bank</h3>
<ul style="list-style-type: square;">
<li><strong>Plugging Capital Gap:</strong> The biggest pro will be that India&rsquo;s banks need capital. Currently, the government keeps picking money from the taxpayers pocket and funding the public sector banks.<br />
<ul style="list-style-type: circle;">
<li>Hence, by allowing the big corporates into the banking sector the capital requirement can be fulfilled.</li>
</ul>
</li>
<li><strong>Facilitating Financial Inclusion:</strong> As a lot of people do not have access to banking in the country, the entry of corporates into the banking sector would mean the opening of more branches and subsequently bringing more people into the banking net.</li>
<li><strong>Improving Competition:</strong> Privatization of banks has been a long-proposed reform in the Indian banking industry. Allowing corporates into the banking sector will further pressurize Public sector banks to become competitive.</li>
</ul>
<h3>Cons of Allowing Corporates To Own Bank</h3>
<p>There are many reasons for onerous restrictions on bank ownership by industry groups, which are as follows:</p>
<ul style="list-style-type: square;">
<li><strong>Connected Lending &amp; Moral Hazard:</strong> A bank with no connections to business houses can effectively screen loan applicants and thus ensure efficient allocation of funds to accelerate the overall growth of the economy.<br />
<ul style="list-style-type: circle;">
<li>Industry-group-owned banks, on the other hand, will be under constant pressure to favour group companies, at the expense of more deserving ones, which can be labelled as connected lending.</li>
<li>Connected Lending can effectively transfer the project risks from the business group to the banks, with the costs finally being borne by the other shareholders of the bank or even by the taxpayers in the case of a bank collapse.</li>
<li>In economic terms, it may deter efficient fund use and affect profitability &amp; solvency.</li>
<li>In ethical terms, this will erode the bank&rsquo;s role as an effective financial and create a moral hazard or conflict of interest situation.</li>
</ul>
</li>
<li><strong>Circular Lending &amp; Difficulty In Regulation:</strong> Another risk associated with banks owned by industry groups is circular lending.<br />
<ul style="list-style-type: circle;">
<li>Under circular lending, corporate bank X funding projects of an industry group, which owns corporate bank Y, and corporate bank Y funding projects of an industry group owning bank Z, and finally, corporate bank Z funding projects of industry group owning bank X.</li>
<li>With available legal structures and the proliferation of shell companies, makes it hard to track such lending on a real-time basis.</li>
</ul>
</li>
<li><strong>Inequality &amp; Concentration of Wealth:</strong> Corporates owing banks will add more muscle to big industry groups, which already dominate many important sectors of the economy, including telecom, organised retail, aviation, software and e-commerce. <br />
<ul style="list-style-type: circle;">
<li>Their tie-up with banks, which is the core of the financial sector, will not only jeopardise the interests of smaller players but also help them leverage their strength into other new markets.</li>
<li>This will further accelerate the concentration of wealth and increasing inequalities.</li>
<li>This may lead to the emergence of new big power centres that would soon throttle the government&rsquo;s ability to steer the economy in the right direction.</li>
</ul>
</li>
<li><strong>Contradicting the Previous Ruling:</strong> The banking sector in India has been in trouble for the last few years, keeping that in mind the RBI in 2016 had created new guidelines on the limit of lending to a single company. <br />
<ul style="list-style-type: circle;">
<li>The rationale behind this ruling was that if a bank lends too much to one company only then it risks losing that money if the company sinks.</li>
<li>Therefore, the recommendation of allowing the entry of industry groups in the banking sector is in contraction with the above-said ruling in 2016.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>The pros and cons analysis of mixing industry and finance indicates that the move may not be conducive to growth, public finance and the future of the Indian economy itself. So rather than concentration of too much economic power in the hands of corporates, it will be wise to carry out the long-pending banking reforms and strengthen the functional autonomy of RBI.</p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #f5f7ff;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>There is a need to conduct a thorough analysis before allowing industrial houses to promote or own banks. Discuss.</p>
</td>
</tr>
</tbody>
</table>
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		'title' => 'Monetary Policy: RBI',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <a href="/daily-updates/daily-news-analysis/repo-rate-unchanged-1" target="_blank" rel="noopener"><strong>Monetary Policy Committee</strong></a> (MPC) of 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 left the<a href="/daily-updates/daily-news-analysis/repo-rate-unchanged-1" target="_blank" rel="noopener"><strong> repo rate unchanged</strong></a> and <strong>maintained an <a href="/daily-updates/daily-news-analysis/rbi-monetary-policy-1" target="_blank" rel="noopener">accommodative policy stance</a></strong> as it prioritised support for the economy's recovery over inflation amid the <a href="/daily-updates/daily-news-analysis/covid-19-now-pandemic-who" target="_blank" rel="noopener"><strong>Covid-19 pandemic.</strong></a></p>
<ul style="list-style-type: square;">
<li>It has also announced various other <a href="/daily-updates/daily-news-analysis/liquidity-measures-extended-for-banks" target="_blank" rel="noopener"><strong>liquidity management measures</strong></a> and steps to <strong>improve<a href="/daily-updates/daily-news-analysis/fraud-oversight-wing" target="_blank" rel="noopener"> regulatory oversight</a></strong> of the financial system.</li>
<li>The MPC is a <strong>statutory and institutionalized framework</strong> under the <strong>RBI Act 1934,</strong> for maintaining price stability, while keeping in mind the objective of growth. It <strong>determines the policy interest rate</strong> (repo rate)<strong> required to achieve the inflation target</strong> (4%).</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Repo Rate:</strong><br />
<ul style="list-style-type: circle;">
<li>The MPC has kept the RBI&rsquo;s key lending rate, the <strong>repo rate, steady at 4%</strong> and <strong>reverse repo rate </strong>at<strong> 3.35%.</strong><br />
<ul style="list-style-type: disc;">
<li>The <strong>repo rate,</strong> also known as the <strong>policy rate,</strong> is the interest rate at which the RBI provides loans to banks.</li>
<li>The <strong>reverse repo</strong> is the rate at which commercial banks park their money with the central bank.</li>
</ul>
</li>
<li>It has left key policy rates <strong>unchanged for the third time in a row</strong> in the wake of persistently high retail inflation, even as it pointed to the economy, which contracted in the last two quarters, showing signs of early recovery.</li>
<li>The central bank has <strong>slashed the repo rate by 115 basis points</strong> (bps) <strong>since late March</strong> to cushion the economy from the fallout of the Covid-19 and the resultant <a href="/daily-updates/daily-news-editorials/covid-19-and-lockdown" target="_blank" rel="noopener"><strong>lockdowns.</strong></a><br />
<ul style="list-style-type: disc;">
<li>Generally, <strong>a low repo rate translates into low cost loans</strong> for the general masses.</li>
</ul>
</li>
</ul>
</li>
<li><strong>GDP Projections:</strong><br />
<ul style="list-style-type: circle;">
<li>The real <strong><a href="/daily-updates/daily-news-analysis/gdp-decreases-to-11-year-low" target="_blank" rel="noopener">Gross Domestic Product</a></strong>&nbsp;(GDP) for FY 2020-21 has been projected at <strong>-7.5%.</strong><br />
<ul style="list-style-type: disc;">
<li><strong>Real GDP</strong> is an <strong>inflation-adjusted measure</strong> that reflects the value of all goods and services produced by an economy in a given year.</li>
</ul>
</li>
<li>However, with the country gradually opening up after the lockdown and the improvement in activity in the second quarter, GDP is expected to<strong> expand by 0.1% in the December quarter</strong> and<strong> 0.7% in the March quarter.</strong><br />
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-analysis/gdp-contracted-by-23-9-in-first-quarter" target="_blank" rel="noopener"><strong>GDP growth contracted by 23.9%</strong></a> in the Q1 of 2020 compared to the same period (April-June) in 2019.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Inflation:</strong><br />
<ul style="list-style-type: circle;">
<li><a href="/daily-updates/daily-news-editorials/return-of-inflation#:~:text=Inflation%20refers%20to%20the%20rise,transport%2C%20consumer%20staples%2C%20etc.&amp;text=Inflation%20is%20indicative%20of%20the,unit%20of%20a%20country's%20currency." target="_blank" rel="noopener"><strong>Inflation</strong></a> still remains a concern for policymakers as the <a href="/daily-updates/daily-news-editorials/india-s-food-processing-industry-1" target="_blank" rel="noopener"><strong>supply-side bottlenecks</strong></a> <strong>had fuelled inflation and large margins were being charged</strong> to the consumer.</li>
<li><strong>Cost push pressure or cost push inflation</strong> continue to impinge on core inflation, which has not changed much and could firm up as economic activity normalises and demand picks up.<br />
<ul style="list-style-type: disc;">
<li><strong>Cost-push Inflation:</strong> Spurt in production prices of certain commodities also causes inflation as the price of the final product increases.</li>
<li><strong>Core Inflation:</strong> It <strong>excludes volatile goods</strong> from the basket of commodities tracking <strong>Headline Inflation.</strong> These volatile commodities mainly comprise<strong> food and beverages</strong> (including vegetables) and <strong>fuel and light (crude oil).</strong></li>
</ul>
</li>
<li>RBI <strong>projected retail inflation to average 6.8% in Q3,</strong> before moderating to 5.8% in Q4 and 5.2% to 4.6% in the first half of the fiscal year 2021-22, with risks broadly balanced.</li>
<li>This <strong>constrains monetary policy at the current juncture from using the space available to act in support of growth.</strong> At the same time, the signs of recovery are far from being broad-based and are dependent on sustained policy support.</li>
<li><a href="/daily-updates/daily-news-analysis/inflation-data-august-2020" target="_blank" rel="noopener"><strong>Consumer Price Inflation</strong></a> (CPI) at a<strong> six-year high of 7.6% in October,</strong> which is well above its medium target level of 4% within a band of plus/minus 2%.</li>
</ul>
</li>
<li><strong>Accommodative Stance:</strong><br />
<ul style="list-style-type: circle;">
<li>The MPC had decided to <strong>continue with the accommodative stance</strong> as long as necessary, at least during the current financial year and into the next financial year, to <strong>revive growth on a durable basis and mitigate the impact of Covid-19</strong> on the economy.</li>
</ul>
</li>
<li><strong>Risk-based Internal Audit Norms:</strong><br />
<ul style="list-style-type: circle;">
<li>RBI has announced the introduction of <strong>risk-based internal audit norms</strong> for large <a href="/daily-updates/daily-news-analysis/urban-co-operative-banks" target="_blank" rel="noopener"><strong>Urban Cooperative Banks</strong></a> (UCBs) and <a href="/daily-updates/daily-news-analysis/liquidity-boost-to-nbfcs" target="_blank" rel="noopener"><strong>Non-Banking Financial Companies</strong></a> (NBFCs), as part of measures aimed at <strong>improving governance and assurance functions</strong> at supervised entities.</li>
<li>The RBI also moved to harmonise the guidelines on the <strong>appointment of statutory auditors</strong> for commercial banks, UCBs and NBFCs in order <strong>to improve the quality of financial reporting.</strong></li>
<li>It had been decided <strong>to put in place transparent criteria for the declaration of dividends by different categories</strong> of NBFCs.</li>
<li>With a view to deepening financial markets,<a href="/daily-updates/daily-news-analysis/recapitalisation-of-rrbs" target="_blank" rel="noopener"><strong> regional rural banks</strong></a> would be allowed to access the <strong>Liquidity Adjustment Facility</strong> (LAF) and <strong>Marginal Standing Facility</strong> (MSF) of the RBI, as also the call/notice money market.<br />
<ul style="list-style-type: disc;">
<li><strong>LAF</strong> is a tool used in monetary policy by the RBI, that allows banks to borrow money through repurchase agreements (repos) or for banks to make loans to the RBI through reverse repo agreements.</li>
<li><strong>MSF</strong> is a window for scheduled banks to borrow overnight from the RBI in an emergency situation when interbank liquidity dries up completely. Under interbank lending, banks lend funds to one another for a specified term.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Digital Payment Security Controls Directions:</strong><br />
<ul style="list-style-type: circle;">
<li>To significantly improve the ecosystem of digital payment channels with robust security and convenience for users, the RBI has <strong>proposed to issue <a href="/summary-of-important-reports/niti-aayog-digital-payments-trends-issues-and-opportunities" target="_blank" rel="noopener">Digital Payment</a> Security Controls directions for the regulated entities.</strong></li>
<li>These directions will <strong>contain requirements for robust governance, implementation and monitoring of certain minimum standards</strong> on common security controls for channels like Internet and mobile banking and card payments.</li>
</ul>
</li>
<li><strong>Targeted Long-Term Repo Operations:</strong><br />
<ul style="list-style-type: circle;">
<li>RBI has decided to<strong> bring the 26 stressed sectors identified by the<a href="/daily-updates/daily-news-analysis/k-v-kamath-committee-on-restructuring-of-loans" target="_blank" rel="noopener"> Kamath Committee</a> within the ambit of sectors eligible under on tap Targeted <a href="/daily-updates/daily-news-analysis/long-term-reverse-repo-operation#:~:text=Long%20Term%20Reverse%20Repo%20Operation%20(LTRO)%20is%20a%20mechanism%20to,of%20credit%20to%20the%20economy.&amp;text=Funds%20through%20LTRO%20are%20provided,rate%20of%20one%20day%20repo." target="_blank" rel="noopener">Long-Term Repo Operations</a></strong> (TLTRO), providing <strong>more liquidity</strong> to the slowdown-hit economy.<br />
<ul style="list-style-type: disc;">
<li>The RBI had announced the TLTRO on Tap scheme in <strong>October 2020,</strong> which will be available up to <strong>31<sup>st</sup> March 2021.</strong></li>
<li>Accordingly, it was decided to conduct on tap TLTRO with <strong>tenors of up to three years for a total amount of up to Rs. 1 lakh crore</strong> at a floating rate linked to the policy repo rate with flexibility to enhance the amount and period after a review of the response to the scheme.</li>
</ul>
</li>
<li>Under TLTRO, banks can<strong> invest in specific sectors through debt instruments</strong> like <strong>corporate bonds, commercial papers and non-convertible debentures</strong> (NCDs) to push the credit flow in the economy.</li>
<li>As part of the <a href="/daily-updates/daily-news-analysis/measures-on-atmanirbhar-bharat-3-0" target="_blank" rel="noopener"><strong>Aatmanirbhar Bharat Package 3.0</strong></a>, the Centre launched the <a href="/daily-updates/daily-news-analysis/emergency-credit-line-guarantee-scheme-1" target="_blank" rel="noopener"><strong>Emergency Credit Line Guarantee Scheme 2.0</strong></a> (ECLGS 2.0).<br />
<ul style="list-style-type: disc;">
<li>Under it, the corpus of Rs. 3 lakh crore of existing ECLGS 1.0 was extended to provide 100% guaranteed collateral-free additional credit to entities in 26 stressed sectors identified by the Kamath panel.</li>
</ul>
</li>
<li>According to the RBI,<strong> banks are encouraged to synergise the two schemes by availing funds from RBI under on tap TLTRO and seek guarantee under ECLGS 2.0</strong> to provide credit support to stressed sectors.</li>
</ul>
</li>
</ul>
<p><a href="https://www.thehindu.com/business/Economy/rbi-keeps-key-rates-unchanged/article33246372.ece#:~:text=The%20RBI%20also%20brightened%20its,it%20had%20forecast%20in%20October." target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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		'title' => 'Electrification of Railways',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <strong>Minister of Railways</strong> has inaugurated the newly electrified<strong> Dhigawara-Bandikui section </strong>of <strong>North Western Railway</strong> and flagged off the first <strong>train on this electrified route</strong> from <strong>Dhigawara station </strong>in<strong> Alwar District,</strong> Rajasthan.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>History of Railways:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>1832:</strong> The <strong>first railway proposals</strong> for India were made in Madras.</li>
<li><strong>1837:</strong> The country got its<strong> first train in the form of Red Hill Railway,</strong> which was built with the sole purpose of transporting granite for road building.</li>
<li><strong>1853:</strong> In <strong>April,</strong> India&rsquo;s<strong> first passenger train,</strong> operated by the Great Indian Peninsula Railway<strong> ran between Bori Bunder (Mumbai) and Thane.</strong></li>
<li><strong>1925: In February, the first electric passenger train</strong> ran between <strong>Victoria Terminus and Kurla</strong> (Mumbai).</li>
<li><strong>1951:</strong> Indian Railways was<strong> nationalised.</strong></li>
</ul>
</li>
<li><strong>Current Electrification:</strong><br />
<ul style="list-style-type: circle;">
<li>Indian Railways has set a <strong>target to complete Electrification of its Broad gauge network by December 2023.</strong></li>
<li>More than <strong>66% of the Broad gauge route</strong> has already been<strong> electrified.</strong></li>
<li>With <strong>18065 km of electrification,</strong> Railways recorded a <strong>371% increase in electrification during 2014-20</strong> period as compared to 2009-2014.</li>
</ul>
</li>
<li><strong>Benefits of Electrification:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Speed:</strong> 100% electrification will provide<strong> seamless train operation by eliminating detention of trains</strong> due to change in traction (action of drawing or pulling something over a surface) from diesel to electric and vice versa.</li>
<li><strong>Capacity:</strong> It will help Railways in<strong> enhancing line capacity due to higher speed and higher haulage capacity</strong> of electric locomotives.</li>
<li><strong>Safety: Improved signaling system</strong> will lead to enhanced safety in train operations.</li>
<li><strong>Less Financial Burden:</strong> Electric traction is much <strong>cheaper and efficient</strong> compared with diesel traction as running trains on electric traction is<strong> 50% cheaper</strong> than diesel.</li>
<li><strong>Seamless Movement: Electric Multiple Units</strong> (EMUs) are ideal for suburban services, which require <strong>higher acceleration and braking features</strong> for frequent starts and stops.</li>
<li><strong>Employment Generation:</strong> Direct employment during the construction phase for electrification will translate to about 20.4 crore man days, which will significantly boost the employment.</li>
<li><strong>Energy Security:</strong> Total shift to electric traction will <strong>reduce fossil fuel consumption</strong> of about 2.83 billion liters per annum and also give a subsequent reduction in <a href="/daily-updates/daily-news-analysis/greenhouse-gas-levels-reach-record-highs-un-report" target="_blank" rel="noopener"><strong>greenhouse gases</strong> </a>(GHG) emissions.<br />
<ul style="list-style-type: disc;">
<li>GHG emission for electric traction falls below diesel traction, making it an environmentally friendly option.</li>
</ul>
</li>
<li><strong>Energy Bill Savings:</strong> It provides savings of<strong> Rs. 13,510 crore per annum</strong> in fuel bill as <strong>maintenance of electric locomotive is low</strong> as compared to diesel locomotive.<br />
<ul style="list-style-type: disc;">
<li>Regeneration facilities of electric locomotives will <strong>save 15-20% energy</strong> and also there is a <strong>reduced overall requirement of electric locomotives</strong> due to their <strong>higher horsepower.</strong></li>
</ul>
</li>
<li><strong>Sustainability: Reduced carbon footprint</strong> as environmental cost per tonne Km for electric traction is less as compared to diesel traction.<br />
<ul style="list-style-type: disc;">
<li>In line with the commitment made by India in<strong><a href="/important-institutions/drishti-specials-important-institutions-international-institution/unfccc" target="_blank" rel="noopener"> Conference of Parties (COP) 21</a> (Paris)</strong> total shift to electric traction will <strong>reduce Carbon Dioxide</strong> (CO<sub>2</sub>) <strong>emission of Railways by 24% till 2027-28.</strong></li>
<li><strong>Carbon footprint</strong> can be defined as the total amount of <strong>GHG</strong> produced directly and indirectly to support <strong>human activities,</strong> usually expressed in equivalent<strong> tons of </strong>CO<strong><sub>2</sub>.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Using More Renewable Energy:</strong><br />
<ul style="list-style-type: circle;">
<li>In<strong> July 2020</strong>, Indian Railways<a href="/daily-updates/daily-news-analysis/indian-railways-to-use-more-renewable-energy" target="_blank" rel="noopener"><strong> decided to be self-reliant for its energy needs</strong></a> by utilizing its vacant lands for <a href="/infographics/info-paper3/renewable-energy" target="_blank" rel="noopener"><strong>Renewable Energy</strong></a> (RE) projects.</li>
<li>It will utilize <a href="/to-the-points/paper3/solar-energy" target="_blank" rel="noopener"><strong>solar energy</strong></a> for meeting its traction power requirements.</li>
</ul>
</li>
</ul>
<p><a href="https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1677014#:~:text=Rail%20Electrification%20gets%20super%20boost.,-A%20critical%20section&amp;text=has%20already%20electrified.-,With%2018065%20km%20of%20electrification%2C%20Railways%20record%20an%20astonishing%20371,41500%20km%20already%20electrified." target="_blank" rel="noopener"><strong>Source:PIB</strong></a></p>',
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		'article_id' => (int) 7096,
		'category_id' => (int) 21,
		'title' => 'Mission COVID Suraksha',
		'description' => '<h3>Why in News</h3>
<p>The Government of India has announced the<strong> stimulus package of Rs. 900 crore</strong> for the <strong>Mission COVID Suraksha,</strong> the Indian Covid-19 Vaccine Development Mission, which will <strong>help the development process of the vaccine candidates.</strong></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>About:</strong><br />
<ul style="list-style-type: circle;">
<li>Mission COVID Suraksha is India&rsquo;s <strong>targeted effort to enable the development of indigenous, affordable and accessible vaccines</strong> for the country and will complement the ongoing mission of <a href="/daily-updates/daily-news-editorials/atma-nirbhar-bharat-abhiyan-challenges" target="_blank" rel="noopener"><strong>Atmanirbhar Bharat.</strong></a></li>
<li>The Centre had announced this package during the <a href="/daily-updates/daily-news-analysis/economic-stimulus-iii" target="_blank" rel="noopener"><strong>third economic stimulus.</strong></a></li>
<li>The Mission with its <strong>end-to-end focus from preclinical development through clinical development and manufacturing and regulatory facilitation for deployment,</strong> would consolidate all available and funded resources towards accelerated product development.</li>
</ul>
</li>
<li><strong>Grant:</strong><br />
<ul style="list-style-type: circle;">
<li>Phase-I of the Mission has been allotted <strong>Rs. 900 Crore for a period of 12 months.</strong></li>
<li>The grant will be provided to the<strong> Department of Biotechnology</strong> (DBT) for Research and Development (R&amp;D) of Indian <a href="/daily-updates/daily-news-analysis/coronavirus-disease-named-covid-19" target="_blank" rel="noopener"><strong>Covid-19</strong></a> vaccines.</li>
</ul>
</li>
<li><strong>Stakeholders:</strong><br />
<ul style="list-style-type: circle;">
<li>It will be<strong> led by DBT</strong> and implemented by a dedicated <strong>Mission Implementation Unit</strong> at the <a href="/daily-updates/daily-news-editorials/making-india-a-biotech-hub" target="_blank" rel="noopener"><strong>Biotechnology Industry Research Assistance Council</strong></a> (BIRAC).</li>
<li>The existing activities under <a href="/daily-updates/daily-news-analysis/national-biopharma-mission#:~:text=The%20National%20Biopharma%20Mission%20(NBM,funded%20by%20World%20Bank%20loan." target="_blank" rel="noopener"><strong>National Bio Pharma Mission</strong> </a>(NBM) and<strong> Ind-CEPI Mission</strong> will provide complementary strengths to this Mission.<br />
<ul style="list-style-type: disc;">
<li>The DBT is supporting the implementation of the Ind-CEPI Mission, &ldquo;Epidemic preparedness through rapid vaccine development: Support of Indian vaccine development aligned with the global initiative of the<a href="/daily-updates/daily-news-analysis/thsti-part-of-vaccine-assessment-project" target="_blank" rel="noopener"><strong> Coalition for Epidemic Preparedness Innovations</strong></a> (CEPI)&rdquo;.</li>
<li>The Ind-CEPI Mission was approved in<strong> March 2019.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Objectives:</strong><br />
<ul style="list-style-type: circle;">
<li>Accelerating pre-clinical and clinical development.</li>
<li>Licensure of Covid-19 vaccine candidates that are currently in clinical stages or ready to enter the clinical stage of development.</li>
<li>Establishing clinical trial sites.</li>
<li>Strengthening the existing central laboratories and suitable facilities for animal studies, production facilities and other testing facilities to support the vaccine development.</li>
<li>Supporting the development of common harmonized protocols, training, data management systems, regulatory submissions, internal and external quality management systems and accreditations.</li>
<li>Supporting capabilities for process development, cell line development and manufacturing of GMP batches for animal toxicology studies and clinical trials.</li>
<li>Developing suitable<strong> Target Product Profile</strong> so that vaccines being introduced through the mission have preferred characteristics applicable to India.</li>
</ul>
</li>
<li><strong>Vaccine Candidates:</strong><br />
<ul style="list-style-type: circle;">
<li>A total of<strong> 10 vaccine candidates have been supported by DBT</strong> so far at both academia and industry and as on date and<strong> 5 vaccine candidates are in human trials.</strong><br />
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-analysis/phase-ii-iii-clinical-trials-of-covishield" target="_blank" rel="noopener"><strong>Covishield</strong></a>: The <a href="/daily-updates/daily-news-analysis/pneumococcal-conjugate-vaccine-1" target="_blank" rel="noopener"><strong>Serum Institute of India</strong></a> (SII) is conducting the <a href="/to-the-points/Paper2/drugs-and-clinical-trials-rules-2019" target="_blank" rel="noopener"><strong>phase-3</strong></a> trial of the <strong>Oxford-Astrazeneca</strong> Covid-19 vaccine.</li>
<li><a href="/daily-updates/daily-news-analysis/covaxin-approved-for-human-clinical-trials" target="_blank" rel="noopener"><strong>Covaxin</strong></a>: The indigenously developed <strong>Bharat Biotech</strong> and the <a href="/daily-updates/daily-news-analysis/icmr-to-test-for-community-transmission-of-covid-19" target="_blank" rel="noopener"><strong>Indian Council of Medical Research</strong> </a>(ICMR) vaccine has already started the phase III clinical trial.</li>
<li><a href="/daily-updates/daily-news-analysis/clinical-trial-of-covid-19-vaccine-zycov-d" target="_blank" rel="noopener"><strong>ZyCoV-D</strong></a>: Indigenously developed vaccine by<strong> Zydus Cadila</strong> has completed the phase-2 clinical trial in the country.</li>
<li><a href="/daily-updates/daily-news-analysis/russian-covid-vaccine-sputnik-v" target="_blank" rel="noopener"><strong>Sputnik V</strong></a>: The combined phase 2 and 3 clinical trials of the<strong> Russian Covid-19 vaccine</strong> Sputnik V in India are about to get started.</li>
<li><a href="/daily-updates/daily-news-analysis/pfizer-s-covid-19-vaccine-candidate#:~:text=India%20is%20preparing%20to%20administer,vaccine%20candidates%20in%20the%20future." target="_blank" rel="noopener"><strong>BNT162b2</strong></a>: India is focusing on training for conducting phase II and III human clinical trials of the <strong>Pfizer's Covid-19 vaccine candidate</strong> along lines of India&rsquo;s regulatory mechanism.</li>
</ul>
</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Clinical Trials</strong></p>
<ul style="list-style-type: square;">
<li>It is a <strong>systematic study to generate data for discovering or verifying the clinical and pharmacological profile</strong> (including pharmacodynamic and pharmacokinetic) or <strong>adverse effects</strong> of a new drug on humans.</li>
<li>It is the <strong>only way of establishing the safety and efficacy</strong> of any drug before its introduction in the market for human use and is preceded by animal trials where the efficacy and side effects are observed in animals and an estimated drug dose is established.</li>
<li>Clinical trials of drugs developed in India<strong> have to undergo all four phases of trials in India.</strong><br />
<ul style="list-style-type: circle;">
<li>Phase I or clinical pharmacology trials or &ldquo;first in man&rdquo; study.</li>
<li>Phase II or exploratory trials.</li>
<li>Phase III or confirmatory trials.</li>
<li>Phase IV trials or post-marketing phase.</li>
</ul>
</li>
</ul>
</div>
<p><a href="https://www.pib.gov.in/PressReleasePage.aspx?PRID=1676998" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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		'article_id' => (int) 7084,
		'category_id' => (int) 21,
		'title' => 'Cabinet Approves Capital Infusion into NIIF',
		'description' => '<h3>Why in News</h3>
<p>Recently, the Union Cabinet has given its approval to the proposal for equity infusion by the Government of<strong> Rs. 6000 crores </strong>in<strong> NIIF Debt Platform</strong> - sponsored by the <strong>National Investment and Infrastructure Fund (NIIF).</strong></p>
<ul style="list-style-type: square;">
<li>This was <strong>one of the twelve key measures</strong> made by the Union Minister for Finance as part of <a href="/daily-updates/daily-news-analysis/atmanirbhar-bharat-and-economic-stimulus" target="_blank" rel="noopener"><strong>Government of India&rsquo;s stimulus to the economy</strong></a>, under <a href="/daily-updates/daily-news-analysis/atmanirbhar-bharat-and-economic-stimulus" target="_blank" rel="noopener"><strong>Atmanirbhar Bharat.</strong></a></li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Background:</strong><br />
<ul style="list-style-type: circle;">
<li>As per the <a href="/daily-updates/daily-news-analysis/national-infrastructure-pipeline-1" target="_blank" rel="noopener"><strong>National Infrastructure Pipeline</strong></a> (NIP), investment in infrastructure sector is targeted at <strong>Rs. 111 lakh crore over the next 5 years</strong> across various sub-sectors, creating substantial need for debt financing.</li>
<li>It would require at least <strong>Rs. 60 to 70 lakh</strong> crores in <strong>debt financing.</strong></li>
<li>Current environment requires well-capitalized specialized infrastructure focused financial institutions, such as <strong>NIIF Debt Platform</strong> being <strong>developed by NIIF</strong> which can focus on lending across the project life cycle with a strong capital base and expertise driven approach.</li>
</ul>
</li>
<li><strong>The current approval of equity infusion is subject to two conditions:</strong><br />
<ul style="list-style-type: circle;">
<li>Out of the proposed amount, only <strong>Rs. 2,000</strong> crore would be allocated during the current year <strong>2020-21.</strong><br />
<ul style="list-style-type: disc;">
<li>However, in view of the unprecedented financial situation and availability of limited fiscal space due to the prevailing <a href="/daily-updates/daily-news-editorials/covid-19-and-india-1" target="_blank" rel="noopener"><strong>Covid-19</strong></a>, the proposed amount may be disbursed <strong>only if there is readiness and demand for debt raising.</strong></li>
</ul>
</li>
<li><strong>NIIF</strong> will take all necessary steps to use the <strong>equity investments from Domestic and Global pension funds and sovereign wealth funds</strong> expeditiously.</li>
</ul>
</li>
<li><strong>NIIF Debt Platform: </strong><br />
<ul style="list-style-type: circle;">
<li><strong>It comprises of:</strong><br />
<ul style="list-style-type: disc;">
<li><strong>Aseem Infrastructure Finance Limited (AIFL):</strong> It is an IFC (Infrastructure Finance Company), established with the aim of playing a transformative role in growth of Indian infrastructure debt financing.</li>
<li><strong>NIIF Infrastructure Finance Limited (NIIF-IFL):</strong> It was incorporated as an <strong>Infrastructure Debt Fund (IDF)</strong> in 2014 for financing operating infrastructure projects.</li>
</ul>
</li>
<li><strong>Contribution:</strong> It is expected to contribute nearly<strong> Rs. 1 lakh crores</strong> in debt to the infrastructure sector over the<strong> next 5 years.</strong></li>
<li><strong>Impact :</strong><br />
<ul style="list-style-type: disc;">
<li>It will act as a<strong> catalyst in attracting more investments</strong> into the infrastructure sector as envisaged in <strong>NIP.</strong></li>
<li>The process will also<strong> help relieve exposure of banks to infrastructure projects</strong> and <strong>free up space for new green-field projects.</strong></li>
<li>It will <strong>enhance liquidity of infrastructure assets</strong> and<strong> lower the risks.</strong></li>
<li>It is expected that a <strong>well-capitalized, well-funded and well-governed NIIF debt Platform</strong> can play a major role in <strong>infrastructure financing and development of the bond market in India</strong> by acting as an intermediary between the bond markets and infrastructure projects and companies.</li>
</ul>
</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>National Investment and Infrastructure Fund</strong></p>
<ul style="list-style-type: square;">
<li>NIIF is a<strong> government-backed entity</strong> established to provide long-term capital to the country&rsquo;s infrastructure sector.
<ul style="list-style-type: circle;">
<li>The <strong>Indian government has a 49% stake</strong> in NIIF with the rest held by foreign and domestic investors.</li>
<li>With the Centre&rsquo;s significant stake, NIIF is considered <strong>India&rsquo;s quasi-sovereign wealth fund.</strong></li>
</ul>
</li>
<li>It was set up in<strong> December 2015</strong> as a <a href="/daily-updates/daily-news-analysis/a-special-fund-for-housing-projects" target="_blank" rel="noopener"><strong>Category-II Alternate Investment Fund.</strong></a></li>
<li>Across its <strong>three funds viz. Master Fund, Fund of Funds, and Strategic Opportunities Fund,</strong> it manages over USD 4.3 billion of capital.</li>
<li>Its registered office is in <strong>New Delhi.</strong></li>
</ul>
<p><strong>Terms</strong></p>
<ul style="list-style-type: square;">
<li><strong>Debt financing:</strong><br />
<ul style="list-style-type: circle;">
<li>When a company borrows money to be paid back at a future date with interest, it is known as debt financing.</li>
</ul>
</li>
<li><strong>Equity:</strong><br />
<ul style="list-style-type: circle;">
<li>Equity represents the shareholders&rsquo; stake in the company, identified on a company's balance sheet.</li>
</ul>
</li>
<li><strong>Sovereign wealth fund:</strong><br />
<ul style="list-style-type: circle;">
<li>A sovereign wealth fund is a state-owned investment fund composed of money generated by the government, often derived from a country's surplus reserves.</li>
</ul>
</li>
<li><strong>Pension fund:</strong><br />
<ul style="list-style-type: circle;">
<li>A pension fund is any plan, fund, or scheme which provides retirement income.</li>
</ul>
</li>
<li><strong>Bond:</strong><br />
<ul style="list-style-type: circle;">
<li>It is a <strong>fixed income instrument</strong> that represents a loan made by an investor to a borrower. In simpler words, a bond acts as a contract between the investor and the borrower. Mostly <strong>Companies and Government</strong> issue bonds and <strong>investors</strong> buy those bonds as a<strong> savings and security option.</strong></li>
</ul>
</li>
</ul>
</div>
<p><a href="https://www.thehindu.com/business/govt-allots-2000-cr-for-infra-funding/article33178833.ece" target="_blank" rel="noopener"><strong>Source:TH</strong></a></p>',
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		'article_id' => (int) 7055,
		'category_id' => (int) 21,
		'title' => 'KIIFB Controversy',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <a href="/daily-updates/daily-news-analysis/changes-in-the-prevention-of-money-laundering-act" target="_blank" rel="noopener"><strong>Enforcement Directorate</strong> </a>(ED) has opened a preliminary inquiry to examine if borrowings by the <a href="/daily-updates/daily-news-analysis/kerala-the-first-indian-state-to-issue-masala-bond" target="_blank" rel="noopener"><strong>Kerala Infrastructure Investment Fund Board</strong></a> (KIIFB) from overseas markets violated the provisions of the<a href="/daily-updates/daily-news-analysis/liberalised-remittance-scheme" target="_blank" rel="noopener"><strong> Foreign Exchange Management Act (FEMA) 1999.</strong></a></p>
<ul style="list-style-type: square;">
<li>KIIFB was established to <strong>manage the Kerala Infrastructure Investment Fund</strong> (KIIF), as per the<strong> KIIF Act 1999.</strong></li>
<li>In<strong> 2016,</strong> the government <strong>changed the role of KIIFB</strong> from handler of investment bonds to an<strong> entity to mobilise the resources for developmental projects</strong> over and beyond the budget.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li>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 &shy;General</strong></a> (CAG) highlighted that the KIIFB had raised Rs. 2,150 crore from the international market without the consent of the Central government in 2019.<br />
<ul style="list-style-type: circle;">
<li>A <strong>prior consent</strong> of the Government of India is necessary before a State Government raises a loan.</li>
</ul>
</li>
<li>KIIFB had also overstepped its legal bounds by issuing <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> to raise money from foreign markets in violation of <strong>Article 293 (1) of the Constitution.</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Article 293 (1):</strong> The executive power of a State extends to borrowing within the territory of India upon the security of the Consolidated Fund of the State within such limits. State governments can give guarantees within such limits as fixed by the legislature of the concerned State.</li>
</ul>
</li>
<li>The ED has also asked 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) about the details of &lsquo;no objection certificate&rsquo; it had supposedly extended to the KIIFB, enabling the agency to take sizable loans from the foreign financial market.</li>
<li><strong>Implications of Inquiry:</strong><br />
<ul style="list-style-type: circle;">
<li>The investigation could potentially<strong> cause a fall in the revenues</strong> of the <strong>KIIFB.</strong></li>
<li>It might <strong>affect the extended loans</strong> being offered to KIIFB by the <a href="/important-institutions/drishti-specials-important-institutions-international-institution/world-bank-group" target="_blank" rel="noopener"><strong>International Finance Corporation</strong></a> (IFC) - a part of the <strong>World Bank group.</strong></li>
<li>With an ongoing investigation,<strong> investors would not be willing to buy its masala bonds,</strong> which will further lead to loss of revenues.</li>
<li>The investigation can also <strong>result in an administrative paralysis, halting all the infrastructure development projects</strong> for which the KIIFB had collected the funds.</li>
</ul>
</li>
<li><strong>Kerala Government&rsquo;s Stand:</strong><br />
<ul style="list-style-type: circle;">
<li>It disagrees with the CAG's finding on the basis that<strong> KIIFB is a corporate entity and not the State government.</strong><br />
<ul style="list-style-type: disc;">
<li>As per <strong>FEMA provisions, corporate entities can issue masala bonds</strong> to raise funds from foreign markets.</li>
</ul>
</li>
<li>Kerala also criticises the move because CAG has <strong>unilaterally submitted its audit</strong> observations <strong>without giving the State its right of reply.</strong></li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Masala Bonds</strong></p>
<ul style="list-style-type: square;">
<li>They are<strong> rupee-denominated bonds</strong> used by <strong>Indian companies to raise funds</strong> from the <strong>overseas market</strong> in Indian rupees.</li>
<li><strong>Eligibility for Issuance:</strong><br />
<ul style="list-style-type: circle;">
<li>According to RBI, <strong>any corporate, body corporate and Indian bank is eligible to issue</strong> these bonds overseas.</li>
<li>These can be <strong>issued and subscribed</strong> by a resident of such country that is a member of the <a href="/daily-updates/daily-news-analysis/financial-action-task-force-1" target="_blank" rel="noopener"><strong>financial action task force</strong> </a>(FATF) and whose securities market regulator is a member of the <strong>International Organisation of Securities Commission</strong> (IOSCO). It can also be subscribed by <strong>multilateral and regional financial institutions</strong> where India is a member country.<br />
<ul style="list-style-type: disc;">
<li>IOSCO is the international body that brings together the world's securities regulators and is recognised as the global standard setter for the securities sector.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Limitations:</strong><br />
<ul style="list-style-type: circle;">
<li>As per the <strong>RBI guidelines,</strong> the money raised through such bonds <strong>cannot</strong> be used for<strong> real estate activities</strong> other than for development of<strong> integrated township or affordable housing projects.</strong></li>
<li>Also, it cannot be used for investing in capital markets, purchase of land and on-lending to other entities for such activities as stated above.</li>
</ul>
</li>
</ul>
</div>
<p><a href="https://www.thehindu.com/news/national/kerala/ed-opens-inquiry-into-kiifb-working/article33154864.ece" target="_blank" rel="noopener"><strong>Source:TH</strong></a></p>',
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	(int) 6 => object(Cake\ORM\Entity) {

		'article_id' => (int) 7004,
		'category_id' => (int) 21,
		'title' => 'UAE Issues Golden Card Visa',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <strong>United Arab Emirates</strong> (UAE) has approved the issuance of a <strong>10-year golden card visa</strong> for more professionals, including PhD holders, physicians, engineers as well as graduates from certain universities.</p>
<ul style="list-style-type: square;">
<li><strong>Golden Visa</strong> is <strong>citizenship by investment or residency by investment program</strong>. It is <strong>directed to wealthy foreign nationals</strong> who want to acquire residency in a certain country by investing a substantial amount of money or by purchasing a property.</li>
</ul>
<h3>Key Points<a href="http://www.drishtiias.com/images/uploads/1605591609_image1.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1605591609_image1.png" style="float: right; margin: 5px;" width="468" height="278" caption="false" /></a></h3>
<ul style="list-style-type: square;">
<li><strong>UAE&rsquo;s Golden Card Visa:</strong><br />
<ul style="list-style-type: circle;">
<li>It grants <strong>10-year residency</strong> to these visa holders and their families.</li>
<li><strong>Eligibility:</strong><br />
<ul style="list-style-type: disc;">
<li>All holders of doctorate degrees, medical doctors and computer, electronics, programming, electrical and biotechnology engineers.</li>
<li>Those with specialised degrees in<a href="/loksabha-rajyasabha-discussions/in-depth-artificial-intelligence" target="_blank" rel="noopener"><strong> artificial intelligence</strong> </a>(AI), <a href="/to-the-points/paper3/big-data-1" target="_blank" rel="noopener"><strong>big data</strong></a> and <strong>epidemiology</strong>, as well as <strong>high school students</strong> living in the UAE who rank top in the country and students from certain universities with a <strong>Grade Point Average</strong> (GPA) of <strong>3.8 or higher</strong>.</li>
</ul>
</li>
<li>The changes will take place from <strong>1<sup>st</sup> December 2020</strong>.</li>
</ul>
</li>
<li><strong>Background:</strong><br />
<ul style="list-style-type: circle;">
<li>Foreigners in the UAE usually have <strong>renewable visas valid for only a few years tied to their employment</strong>.</li>
<li>In <strong>May 2019,</strong> the UAE <strong>started granting 5 and 10-year renewable visas</strong> to certain foreign investors, entrepreneurs, chief executives, scientists and outstanding students, under the <strong>Golden Card scheme</strong>.<br />
<ul style="list-style-type: disc;">
<li>The scheme offers unprecedented benefits to the cardholders and their families while creating an attractive environment for business and growth.</li>
<li>It attracts greater foreign investment and stimulates the local economy, making it more efficient and attractive for investors.</li>
<li>It also increases the UAE's competitiveness and reaffirms the country's position as a global incubator.</li>
</ul>
</li>
<li>The government in the past couple of years has made its <strong>visa policy more flexible, offering longer residencies</strong> for certain types of investors, students and professionals.</li>
</ul>
</li>
<li><strong>Reasons Behind the Move:</strong><br />
<ul style="list-style-type: circle;">
<li>The UAE's economy has been hit hard by the <a href="/daily-updates/daily-news-analysis/covid-19-now-pandemic-who" target="_blank" rel="noopener"><strong>Covid-19 pandemic</strong></a> and <a href="/daily-updates/daily-news-analysis/oil-prices-below-zero" target="_blank" rel="noopener"><strong>low oil prices</strong></a>, <strong>prompting many expatriates to leave</strong>. The move <strong>intends to bring them back</strong> now and keep the &ldquo;talented people and great minds&rdquo; in the Gulf country and <strong>help in nation-building</strong>.</li>
<li>It will <strong>attract talented professionals from various fields</strong> of expertise and further <strong>encourage innovation, creativity and applied research,</strong> adding to the appeal of a career in the UAE for the world&rsquo;s brightest minds.</li>
</ul>
</li>
<li><strong>Significance for India:</strong><br />
<ul style="list-style-type: circle;">
<li>It would <strong>attract more Indian professionals and businessmen</strong> to the Gulf nation and <strong>strengthen the <a href="/daily-updates/daily-news-analysis/india-uae-meet-on-investments" target="_blank" rel="noopener">India-UAE Relations</a></strong>.<br />
<ul style="list-style-type: disc;">
<li>The <strong>Indian expatriate community is reportedly the largest ethnic community in the UAE,</strong> constituting roughly <strong>about 30%</strong> of the country's population, which has played a major <strong>role in the economic development</strong> of the UAE.</li>
</ul>
</li>
<li>It will also <strong>facilitate the return of Indians who want to resume work</strong> after the <strong>relaxation of Covid-19-related restrictions,</strong> for which <strong>India had <a href="/daily-updates/daily-news-analysis/gulf-cooperation-council-and-india" target="_blank" rel="noopener">requested the members of the Gulf Cooperation Council</a></strong> (GCC) in early November 2020.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Recent Developmental Events in the UAE</strong></p>
<ul style="list-style-type: square;">
<li>In <strong>March 2019,</strong> the <a href="/daily-updates/daily-news-editorials/an-opening-in-abu-dhabi" target="_blank" rel="noopener"><strong>46<sup>th</sup> session of the Council of Foreign Ministers</strong></a> of the <a href="/daily-updates/daily-news-analysis/organisation-of-islamic-cooperation-oic" target="_blank" rel="noopener"><strong>Organisation of Islamic Cooperation</strong></a> (OIC), was held in Abu Dhabi where India was invited as a guest of honour.<br />
<ul style="list-style-type: circle;">
<li>The UAE hosted the event and had strongly defended the decision to invite India despite Pakistan&rsquo;s strong objection and threat to boycott the event.</li>
</ul>
</li>
<li>In <strong>February 2020,</strong> the UAE issued an operating licence for the <a href="/daily-updates/daily-news-analysis/arab-world-s-first-nuclear-power-plant" target="_blank" rel="noopener"><strong>Arab world's first nuclear power plant</strong></a>, paving the way for it to start production in 2020.</li>
<li><strong>UAE Mars Mission:</strong> In <strong>July 2020,</strong> the UAE launched a <a href="/daily-updates/daily-news-analysis/hope-uae-mars-mission" target="_blank" rel="noopener"><strong>Mars probe named Amal</strong></a> (Hope) from Japan, marking the Arab world&rsquo;s first interplanetary mission.</li>
<li>In <strong>September 2020,</strong> the UAE signed the <strong><a href="/daily-updates/daily-news-analysis/israel-uae-and-bahrain-abraham-accord" target="_blank" rel="noopener">Abraham Accord</a> with Israel and Bahrain</strong>, which is the first Arab-Israeli peace deal in 26 years.</li>
</ul>
</div>
<p><a href="https://www.thehindu.com/news/international/uae-to-extend-golden-visas-eligibility-criteria/article33103220.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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	(int) 7 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6982,
		'category_id' => (int) 21,
		'title' => 'PLI Scheme for Ten More Sectors',
		'description' => '<h3>Why in News</h3>
<p>The Union Cabinet has given its approval to introduce the <strong>Production-Linked Incentive (PLI) Scheme in 10 more sectors</strong> for enhancing India&rsquo;s manufacturing capabilities and exports <strong><a href="/daily-updates/daily-news-analysis/atmanirbhar-bharat-and-economic-stimulus" target="_blank" rel="noopener">(Atmanirbhar Bharat)</a>.</strong></p>
<ul style="list-style-type: square;">
<li>Earlier, the government<strong> had announced a <a href="/daily-updates/daily-news-analysis/schemes-for-electronic-manufacturing" target="_blank" rel="noopener">production linked incentive</a> or PLI scheme for medical devices, mobile phones and specified active pharmaceutical ingredients,</strong> with a proposed outlay of Rs. 51,311 crore.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>PLI Scheme:</strong><br />
<ul style="list-style-type: circle;">
<li>A scheme that aims to give companies <strong>incentives on incremental</strong> sales from products manufactured in domestic units.</li>
<li>The scheme invites foreign companies to set units in India, however, it also aims to encourage local companies to set up or expand existing manufacturing units.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1605176667_image1.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1605176667_image1.png" style="display: block; margin-left: auto; margin-right: auto;" width="350" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li><strong>Expansion of PLI Scheme to Ten More Sectors:</strong><br />
<ul style="list-style-type: circle;">
<li>The ten sectors include <a href="/to-the-points/paper3/food-processing-in-india" target="_blank" rel="noopener"><strong>food processing</strong></a>, <a href="/to-the-points/paper3/telecom-sector-issues-and-challenges" target="_blank" rel="noopener"><strong>telecom</strong></a>, <a href="/daily-updates/daily-news-analysis/electronics-manufacturing-in-india" target="_blank" rel="noopener"><strong>electronics</strong></a>, <a href="/daily-updates/daily-news-editorials/textile-sector-and-atmanirbharta" target="_blank" rel="noopener"><strong>textiles</strong></a>, <strong>specialty steel, automobiles and auto components, solar photo-voltaic modules and white goods such as air conditioners and LEDs.</strong></li>
<li>The sectors had been identified on the basis of their potential to create jobs and make India self-reliant.</li>
<li>The PLI scheme for these ten sectors will be operational for<strong> five years</strong> with a <strong>total estimated outlay of Rs 1.45 lakh crore.</strong><br />
<ul style="list-style-type: disc;">
<li>The PLI scheme will be<strong> implemented by</strong> the concerned ministries/departments.</li>
<li>Savings from one PLI scheme of an approved sector can be utilized to fund another sector.</li>
</ul>
</li>
<li>The scheme for these sectors will be <strong>in addition to</strong> the PLI schemes for <strong>mobile phones and allied equipment manufacturing, pharmaceutical ingredients and medical devices.</strong> <br />
<ul style="list-style-type: disc;">
<li>Several <strong>more pharmaceutical products have been brought under the aegis of the PLI scheme,</strong> including complex generics, anti-cancer and diabetic drugs, in-vitro diagnostic devices and special empty capsules.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Benefits:</strong> The PLI scheme across these 10 key specific sectors will make <strong>Indian manufacturers globally competitive,</strong> attract<strong> investment</strong> in the areas of core competency and cutting-edge technology; ensure efficiencies; create <strong>economies of scale;</strong> enhance exports and make India an integral part of the <strong>global supply chain.</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Push to Digital Economy:</strong> <br />
<ul style="list-style-type: disc;">
<li>India is expected to have a <strong>USD 1 trillion digital economy</strong> by 2025. Additionally, the Government's push for <a href="/to-the-points/paper3/Data-Localisation" target="_blank" rel="noopener"><strong>data localization</strong></a>, <a href="/daily-updates/daily-news-editorials/india-must-get-on-the-iot-highway-fast" target="_blank" rel="noopener"><strong>Internet of Things</strong></a>, projects such as <strong>Smart City and Digital India</strong> are expected to increase the demand for electronic products.</li>
</ul>
</li>
<li><strong>Increase Exports:</strong> <br />
<ul style="list-style-type: disc;">
<li>The Indian pharmaceutical industry is the<strong> third largest</strong> in the world by volume and 14<sup>th</sup> largest in terms of value. It contributes<strong> 3.5%</strong> of the <strong>total drugs and medicines exported</strong> globally.</li>
<li>India is the world's<strong> second largest steel producer in the world.</strong> It is a <strong>net exporter of finished steel.</strong> A PLI scheme in <strong>Specialty Steel</strong> will help in enhancing manufacturing capabilities for value added steel leading to increase in total exports.<br />
<ul style="list-style-type: disc;">
<li>Specialty steel is made by adding various elements to iron, to achieve various properties, such as heat resistance, hardness, and corrosion resistance.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Secure Telecom Infrastructure:</strong> <br />
<ul style="list-style-type: disc;">
<li>Telecom equipment forms a<strong> critical and strategic element of building a secured telecom infrastructure</strong> and India aspires to become a major original equipment manufacturer of telecom and networking products.</li>
</ul>
</li>
<li><strong>Doubling Farmers&rsquo; Income:</strong> <br />
<ul style="list-style-type: disc;">
<li>The growth of the processed food industry leads to <strong>better price</strong> for farmers and <strong>reduces high levels of wastage.</strong></li>
</ul>
</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>Growth in production and exports of industrial goods will greatly <strong>expose the Indian industry to foreign competition and ideas,</strong> which will help in improving its capabilities to innovate further.</li>
<li>Promotion of the manufacturing sector and creation of a conducive manufacturing ecosystem will not only enable <strong>integration with global supply chains</strong> but also establish backward linkages with the <strong>MSME sector</strong> in the country.</li>
<li>It will lead to overall growth in the economy and<strong> create huge employment</strong> opportunities.</li>
</ul>
<p><a href="https://www.pib.gov.in/PressReleasePage.aspx?PRID=1671912" target="_blank" rel="noopener"><strong>Source:PIB</strong></a></p>',
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	(int) 8 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6971,
		'category_id' => (int) 15,
		'title' => 'The Big Picture: Natural Gas Economy',
		'description' => '<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/M62cF5PhNbg" 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>Recently, the Government of India has allowed complete marketing freedom for natural gas produced from non-regulated fields. The Union Cabinet has approved a standard e-bidding procedure to discover the price of gas. <br />
<ul style="list-style-type: circle;">
<li>The policy aims to provide <strong>standard procedure for sale of natural gas</strong> in a transparent and competitive manner to discover market price by issuing guidelines for sale by contractor through e-bidding.</li>
<li>This will bring <strong>uniformity in the bidding process</strong> across the various contractual regimes and policies to avoid ambiguity and contribute towards ease of doing business.</li>
</ul>
</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Ease of Doing Business:</strong> The whole ecosystem of policies (production, infrastructure and marketing of natural gas) has been made more transparent with a focus on <a href="/daily-updates/daily-news-analysis/ease-of-doing-business-2020" target="_blank" rel="noopener"><strong>Ease of Doing Business.</strong></a></li>
<li><strong>Encourage investments:</strong> Fulfilling the notion of <a href="/daily-updates/daily-news-analysis/atmanirbhar-bharat-and-economic-stimulus" target="_blank" rel="noopener"><strong>Atmanirbhar Bharat</strong></a>, these reforms encourage investments in the domestic production of natural gas and <strong>reduce import dependence.</strong></li>
<li>Though the producers will continue to be barred from participating in such auctions, the affiliates would still be allowed to bid.</li>
<li>The domestic gas production will have complete marketing and pricing freedom.<br />
<ul style="list-style-type: circle;">
<li>However, the existing pricing mechanism for gas produced by state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd from fields given to them on a nomination basis would continue.</li>
</ul>
</li>
<li>The reforms will also help India in shifting towards a <strong>gas based economy.</strong></li>
<li>The increased gas production consumption will help in the<strong> improvement of the environment.</strong></li>
<li>More <strong>employment opportunities</strong> will be there in the gas consuming sectors including <a href="/to-the-points/paper3/micro-small-and-medium-enterprises-msme" target="_blank" rel="noopener"><strong>MSMEs.</strong></a></li>
</ul>
<div class="border-bg">
<p><strong>Oil and Natural Gas Corporation</strong></p>
<ul style="list-style-type: square;">
<li>Oil and Natural Gas Corporation (ONGC) is a Maharatna Public Sector Undertaking (PSU) of the Government of India.</li>
<li>It was set up in 1995 and is under the Ministry of Petroleum and Natural Gas.</li>
<li>It is the largest crude oil and natural gas company in India, contributing around 70% to Indian domestic production.</li>
</ul>
</div>
<h3>Natural Gas</h3>
<ul style="list-style-type: square;">
<li>Natural gas is found with petroleum deposits and is released when crude oil is brought to the surface. It can be used as a domestic and industrial fuel.</li>
<li>In India, Jaisalmer, Krishna Godavari delta, Tripura and some areas offshore in Mumbai have natural gas resources.</li>
</ul>
<h3>Why Natural Gas?</h3>
<ul style="list-style-type: square;">
<li><strong>Excess usage of fossil fuels:</strong> The average global share of fossil fuels in the <a href="/to-the-points/paper3/energy-security" target="_blank" rel="noopener"><strong>energy basket</strong></a> is 84% which is even more for India.<br />
<ul style="list-style-type: circle;">
<li>According to the <a href="/daily-updates/daily-news-analysis/opec" target="_blank" rel="noopener"><strong>International Energy Agency (IEA)</strong></a>, India is the world's third largest consumer of oil.</li>
<li>Dependence on coal and oil needs to be reduced and natural gas has to be replaced as much as possible.</li>
</ul>
</li>
<li><strong>Share of Natural Gas:</strong> While the world average share of natural gas in the energy basket is 23%, it is only 6% for India.<br />
<ul style="list-style-type: circle;">
<li>However, the government of India has set the target to make it 15% by 2030.</li>
<li>Our consumption has been 1/3<sup>rd</sup> of world average. That would increase in future.</li>
</ul>
</li>
</ul>
<h3>Associated Challenges</h3>
<ul style="list-style-type: square;">
<li><strong>ONGC under APM:</strong> In India, 80% of natural gas produced by ONGC and Oil India Limited falls under<strong> Administered Price Mechanism (APM)</strong> which means the government controls its price.</li>
<li><strong>Reform related challenge:</strong> Currently, the reform impacts only 20% of gas production,while the nominated fields account for 80% India&rsquo;s gas production. <br />
<ul style="list-style-type: circle;">
<li>The policy does not include existing producers.</li>
<li>These fields will be out of the benefit zone of the new policy.</li>
</ul>
</li>
<li><strong>The fertilizer Industry:</strong> The impediment is most of the gas coming from the nominated fields is going to fertilizers which is highly subsidised, hence the sector does not have its control over marketing and setting prices.</li>
<li><strong>Limited Reserves:</strong> Resources of natural gas are limited in India; 55% of natural gas is imported in the form of <strong>Liquified Natural Gas (LNG)</strong> (which is even costlier).<br />
<ul style="list-style-type: circle;">
<li>India&rsquo;s reserves for natural gas are <strong>located in deep or ultradeep water</strong> which requires specific technology and higher cost and extraction is difficult.</li>
</ul>
</li>
<li><strong>Varied Prices:</strong> In India, natural gas is sold at varied prices- the gas under administered price regime at $1.79 per mBtu and other domestic gas in the range of $4.5 to $5.5 per mBtu.</li>
</ul>
<div class="border-bg">
<p><strong>Note:</strong></p>
<ul style="list-style-type: square;">
<li>The<strong> unit MBtu</strong> is a measure unit of energy, defined as one thousand the British thermal unit (symbol: Btu). The "M" stands for one thousand, distinguishing with the SI mega (M) prefix, which stands for one million.</li>
<li><strong>Liquefied natural gas (LNG)</strong> is natural gas that has been cooled to a liquid state (liquefied), at about -260&deg; Fahrenheit, for shipping and storage. <br />
<ul style="list-style-type: circle;">
<li>The volume of natural gas in its liquid state is about 600 times smaller than its volume in its gaseous state in a natural gas pipeline.</li>
</ul>
</li>
</ul>
</div>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Realising the Opportunity:</strong> At present, when the prices are low for importing natural gas, India should take the advantage and enter into contracts with the countries rich in natural gas resources such as Iran, Turkmenistan and Myanmar to bring ga to India through pipelines.</li>
<li><strong>More Reforms:</strong> More aggressive and dynamic reforms is what is needed in the field. <br />
<ul style="list-style-type: circle;">
<li>To go ahead, we need to reform our whole structure (subsidies) to improve the production.</li>
</ul>
</li>
<li><strong>Putting the producers and buyers in charge:</strong> Government should allow the producers and buyers more control of the price. ONGC shall undergo reforms in terms of its marketing and pricing freedom, E-bidding etc.</li>
<li><strong>Alternative:</strong> No doubt natural gas is a cleaner fuel but<strong> cannot be called a green fuel,</strong> that&rsquo;s why more inclination should be there towards electricity; more dependence on electricity should be there as compared to natural gas or any other fuel.</li>
<li><strong>Government as a facilitator:</strong> The government should act as a facilitator and improve quality and quantity of the resources available.</li>
<li><strong>Self reliance:</strong> Infrastructure and facilities should be provided within the country. The import dependence of 55% should be taken on a serious note and should be brought down.</li>
<li><strong>Subsidy in fertilizers:</strong> The government should take action accordingly so that fertiliser subsidy goes directly into farmers account and fertiliser industry doesn't get subsidised so that they too could have their freedom in marketing and pricing.</li>
<li><strong>Extend to the entire gas sector:</strong> The policy should be extended to the entire gas sector, the government should move away from administrative price mechanism (APM).</li>
</ul>
<h3>Conclusion</h3>
<ul style="list-style-type: square;">
<li>There is Immense potential as far as gas consumption in India is concerned. The need is to scale up in a big way as natural gas is a far more cleaner fuel than any of the fossil fuel.</li>
<li>Natural Gas is going to be a very important part of the country's economy, at least for the next 3 decades, therefore, a holistic approach is needed to find the best suited source of energy from an economic as well as environmental point of view.</li>
</ul>',
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		'article_id' => (int) 6969,
		'category_id' => (int) 22,
		'title' => 'Startups In India',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.hindustantimes.com/analysis/india-is-in-the-middle-of-a-much-needed-start-up-revolution/story-iJtS8APZFZgcHwPhOzNNLJ.html" target="_blank" rel="noopener"><strong>&ldquo;India is in the middle of a much-needed start-up revolution&rdquo;</strong> </a>which was published in The Hindustan Times on 10/11/2020. It talks about the issues and way forward related to the startup ecosystem in India.</p>
</div>
<p>In recent years, startups have been receiving increased attention in many parts of the world. In India, the number of startups has increased fast and more support has become available in all dimensions. It is due to vast <a href="/daily-updates/daily-news-analysis/policy-reforms-for-startups" target="_blank" rel="noopener"><strong>commercial potential for startups</strong></a>, India is often described as <strong>&ldquo;the</strong> <strong>poster child of emerging markets&rdquo;.</strong></p>
<p>Today Startups are being widely recognised as important engines for growth and jobs generation. Through innovation and scalable technology, startups can generate impactful solutions, and thereby act as vehicles for socio-economic development and transformation.</p>
<p>However, still there are many challenges that act as a hindrance in realising the true potential of startups in India.</p>
<h3>Opportunities Available</h3>
<p>India now has 38,756 officially-recognised start-ups &ndash; with 27 <a href="/daily-updates/daily-news-analysis/policy-reforms-for-startups" target="_blank" rel="noopener"><strong>unicorns</strong></a>, eight of which achieved this status in 2020 &ndash; and is the third-largest tech start-up hub globally. Apart from it, India&rsquo;s economy, demography and government&rsquo;s active support provides a wide scope for establishing a thriving startup environment.</p>
<ul style="list-style-type: square;">
<li><strong>Growing Indian Economy:</strong> Just before sudden disruption by <a href="/daily-updates/daily-news-editorials/comprehensive-action-plan-for-covid-19" target="_blank" rel="noopener"><strong>Covid-19 pandemic</strong></a>, the Indian economy continued to grow and purchasing power was increasing steadily.
<ul style="list-style-type: circle;">
<li>As economic recovery is expected in the short-term, the rising consumption will be driven by the growth of upper-middle income and high-income segments of the population.</li>
<li>Thus, the size of indian market provides ample opportunity for startups to grow.</li>
</ul>
</li>
<li><strong>Favourable Demography:</strong> The demographics of the Indian population is another advantage. Half of the country&rsquo;s population are below the age of 25 years.
<ul style="list-style-type: circle;">
<li>The nearly 700 million people born through the late 1980s to the 2000s carry material ambitions and have the ability to spend.</li>
<li>This makes them a huge section of population that has the ability to absorb the innovative goods and services provided by startups.</li>
</ul>
</li>
<li><strong>Active Government Support:</strong> Government of India launched the flagship initiative, <a href="/daily-updates/daily-news-analysis/the-start-up-india-fund" target="_blank" rel="noopener"><strong>&ldquo;Startup India&rdquo;</strong></a> in 2016. The program envisages to build a strong ecosystem that is conducive for the growth of startup businesses and kickstarted an entrepreneurship revolution.
<ul style="list-style-type: circle;">
<li>Further, the overhaul of the digital payments ecosystem is being led by State innovation (NPCI), with Aadhaar, Jan Dhan, UPI, and India Stack.</li>
<li>As India improved its digital connectivity, market access barriers have been brought down and created a favourable ecosystem for startups.</li>
</ul>
</li>
<li><strong>High Scope in Rural Areas:</strong> As the majority of India&rsquo;s population still resides in rural areas, many startups have focused towards providing ease of living in rural areas. For example:
<ul style="list-style-type: circle;">
<li>FIA Global - with a network of 26,000 banking agents - is using Artificial Intelligence (AI) to deliver financial products and services such as remittance services and access to credit in rural areas, and has reached over 34 million customers.</li>
<li>MFine provides an AI-powered health care platform for people to consult over 3,500 doctors.</li>
<li>PharmEasy connects local pharmacy stores and diagnostic centres to verify prescriptions and deliver over 100,000 medicines.</li>
</ul>
</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1605011882_image2.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1605011882_image2.png" style="display: block; margin-left: auto; margin-right: auto;" caption="false" width="503" height="437" /></a></p>
<h3>Associated Challenges</h3>
<ul style="list-style-type: square;">
<li><strong>Issues Emanating From Regional Imbalance:</strong> India is a highly diverse country with a plethora of cultures, languages, ethnicities and religions.
<ul style="list-style-type: circle;">
<li>Due to this, the startups&rsquo; understanding of them is often limited to certain regions. In that sense, comparative advantages are linked to specific regions.</li>
</ul>
</li>
<li><strong>Digital Divide:</strong> As nearly 70% of the Indian population lives in rural areas, the customers of the mass market tend to come from low-income backgrounds in villages.
<ul style="list-style-type: circle;">
<li>This often discourages many startups to come up with a pan-India approach.</li>
</ul>
</li>
<li><strong>Issues of Funding:</strong> For running a startup, a significant amount of working capital is required. Many startups, especially at early stages, are bootstrapped, i.e. self-funded through the founders&rsquo; own savings, or using capital from friends and family.</li>
<li><strong>Hiring Challenge:</strong> For many job-seekers, joining a startup as an employee is not an attractive career option, due to the inherent risk that the startup might fail.
<ul style="list-style-type: circle;">
<li>In addition to this, many job applicants are not sufficiently skilled. Startups see a gap between the knowledge taught to students in colleges and the knowledge needed for the jobs, especially in sectors in which technologies change at a fast pace.</li>
</ul>
</li>
<li><strong>Complex Regulatory Environment:</strong> The government of India has introduced policies that aim to ease the business environment for startups. However, the present regulatory framework in which startups operate is widely seen as difficult, inefficient and unpredictable.
<ul style="list-style-type: circle;">
<li>For example, the government has imposed &ldquo;Angel Tax&rdquo;, which was introduced in 2012 with the aim to thwart money laundering, but it also discourages investment in startups.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Integration with School Curriculum:</strong> The <a href="/daily-updates/daily-news-analysis/national-education-policy-2020" target="_blank" rel="noopener"><strong>National Education Policy, 2020</strong></a> envisages to promote student entrepreneurs by offering vocational education in partnership with industries and introducing coding for schoolchildren.
<ul style="list-style-type: circle;">
<li>This can have a favourable impact on the startup ecosystem in India, if entrepreneurial skills are integrated with the education curriculum under new education policy.</li>
</ul>
</li>
<li><strong>Bridging Digital Divide:</strong> There is a need to fill infrastructure gaps esp in rural areas, promote digital literacy and help people become more knowledgeable about the digital world. In this regard, the government initiative of <a href="/search/Pradhan%20Mantri%20Gramin%20Digital%20Saksharta%20Abhiyan" target="_blank" rel="noopener"><strong>Digital Saksharta Abhiyaan</strong></a> is a step in the right direction.</li>
<li><strong>Promoting Agri-Startups:</strong> As still the majority of Indian workforce is employed in agriculture, there is a need to clear roadblocks and promote <a href="/daily-updates/daily-news-analysis/agritech-startups" target="_blank" rel="noopener"><strong>agri-startups.</strong></a>
<ul style="list-style-type: circle;">
<li>The new farm acts give greater choice to farmers and incentivise start-ups to transform the agriculture value chain in storage, finance, transport, aggregation, and marketing.</li>
</ul>
</li>
<li><strong>Startups in High-end Technology:</strong> The recently-released Draft Space Policy states that &ldquo;Indian entities can undertake design, development and realization of satellites and associated communication systems.
<ul style="list-style-type: circle;">
<li>They can establish satellite systems through their own built satellite or procured satellite.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>In present times startups in India are witnessing a golden chapter in the history of Indian entrepreneurship. However, still the indian government has a crucial role to play in positioning India as the Tech Garage of the World. It should act as a catalyst, and bring together the synergies of the private sector with the aim of innovating for India and the world.</p>
<p><a href="http://www.drishtiias.com/images/uploads/1605012004_image1.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1605012004_image1.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: #fffbf7;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Startups are recognised as important engines for growth and jobs generation. Discuss various challenges that act as a hindrance in realising the true potential of startups in India.</p>
</td>
</tr>
</tbody>
</table>
<p style="text-align: center;"><iframe width="560" height="315" src="https://www.youtube.com/embed/Vlfe2oP4zj4" 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/india-and-biden-the-hindu-editorial-on-india-us-ties-after-donald-trump/article33053717.ece" target="_blank" rel="noopener"><strong>&ldquo;India and Biden: On post-Trump ties&rdquo;</strong></a> which was published in The Hindu on November 09<sup>th</sup>, 2020. Now watch this on our Youtube channel.</p>',
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		'article_id' => (int) 6960,
		'category_id' => (int) 21,
		'title' => 'Four Years of Demonetisation',
		'description' => '<h3>Why in News</h3>
<p><strong>8<sup>th</sup> November 2020</strong> marked the <strong>four year anniversary of demonetisation,</strong> when Rs. 500 and Rs. 1,000 notes were withdrawn from the system in 2016.</p>
<ul style="list-style-type: square;">
<li><strong>Demonetisation:</strong> It is the act of <strong>stripping a currency unit of its status as legal tender.</strong> It occurs whenever there is a <strong>change of national currency</strong> and the current form or forms of money is<strong> pulled from circulation and retired, often to be replaced with new notes or coins.</strong></li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Objectives of Demonetisation:</strong><br />
<ul style="list-style-type: circle;">
<li>To <strong>discourage the use of high-denomination notes for illegal transactions</strong> and thus <strong>curb the widespread use of black money.</strong></li>
<li>To <strong>encourage <a href="/daily-updates/daily-news-editorials/challenges-of-digitisation-and-way-forward" target="_blank" rel="noopener">digitisation of commercial transactions</a></strong>, <a href="/daily-updates/daily-news-editorials/formalization-of-the-economy-is-a-form-of-coercion" target="_blank" rel="noopener"><strong>formalise the economy</strong></a> and so,<strong> boost government tax revenues.</strong><br />
<ul style="list-style-type: disc;">
<li>The <strong>formalisation of the economy</strong> means bringing companies under the regulatory regime of government and subject to laws related to manufacturing and income tax.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Operation Clean Money:</strong><br />
<ul style="list-style-type: circle;">
<li>It was launched by the <strong>Income Tax Department</strong> (CBDT) for<strong> e-verification of large cash deposits</strong> made during the period from 9<sup>th</sup> November to 30<sup>th</sup> December 2016.</li>
<li>The programme was launched on 31st January 2017 and entered into the second phase in May 2017.</li>
<li>It aimed to <strong>verify cash transaction status</strong> (exchange/savings of banned notes) of taxpayers during the demonetisation period and to <strong>take tax enforcement action</strong> if transactions do not match the tax status.</li>
</ul>
</li>
<li><strong>Impact of the Move:</strong><br />
<ul style="list-style-type: circle;">
<li>Currency with public stood at <strong>Rs. 17.97 lakh crore on 4<sup>th</sup> November 2016 and declined to Rs 7.8 lakh crore in January 2017</strong> after demonetisation.<br />
<ul style="list-style-type: disc;">
<li><strong>Currency with Public:</strong> As per 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) definition, currency with public is arrived at after deducting cash with banks from total currency in circulation.</li>
<li><strong>Currency in Circulation:</strong> It refers to cash or currency within a country that is physically used to conduct transactions between consumers and businesses.</li>
</ul>
</li>
<li><strong>Demands fell,</strong> businesses faced a crisis and<a href="/daily-updates/daily-news-analysis/gdp-decreases-to-11-year-low#:~:text=Growth%20in%20Fiscal%20Year%202019,6.1%25%20in%202018%2D19." target="_blank" rel="noopener"><strong> gross domestic product</strong> </a>(GDP) <strong>growth declined nearly 1.5%,</strong> with many<strong> small units and shops being shut</strong> down and it also <strong>created a <a href="/daily-updates/daily-news-editorials/shadow-banking-and-the-crisis-in-the-indian-economy" target="_blank" rel="noopener">liquidity shortage.</a></strong><br />
<ul style="list-style-type: disc;">
<li>Liquidity shortages or crises arise when financial institutions and industrial companies scramble for, and <strong>cannot find the cash they require to meet their most urgent needs or undertake their most valuable projects.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Current Trends:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Currency with Public:</strong> On <strong>23<sup>rd</sup> October 2020,</strong> the currency with the public stood at a record high of <strong>Rs. 26.19 lakh crore, up 45.7%</strong> from November 2016.<br />
<ul style="list-style-type: disc;">
<li>The <strong>pace of rise in currency with the public has been very sharp over the last 10 months</strong> as it has risen from Rs. 21.79 lakh crore as on 3rd January 2020 to the current number in October 2020.</li>
<li>The hike was mainly <strong>driven by a rush for cash by the public between March and May amidst the stringent<a href="/daily-updates/daily-news-analysis/impact-of-lockdown-on-indian-corporates" target="_blank" rel="noopener"> lockdowns</a></strong> to tackle the spread of the <a href="/daily-updates/daily-news-analysis/covid-19-now-pandemic-who" target="_blank" rel="noopener"><strong>Covid-19 pandemic.</strong></a></li>
<li>It shows that the <strong>cash in the system has been steadily rising,</strong> even though the government and the RBI had pushed for a less-cash society, digitisation of payments and slapped restrictions on the use of cash in various transactions.</li>
</ul>
</li>
<li><strong>Digitisation:</strong> According to an<strong> RBI study on digital payments,</strong> although digital payments have been growing gradually in recent years, both in value and volume terms across countries, <strong><a href="/daily-updates/daily-news-analysis/currency-to-gdp-ratio#:~:text=The%20currency%20in%20circulation%20as,is%20highest%20in%20three%20years." target="_blank" rel="noopener">currency in circulation to GDP ratio</a> has increased in consonance with the overall economic growth.</strong></li>
<li><strong>Tax Revenues:</strong> Along with demonetisation, the introduction of the <strong><a href="/to-the-points/paper3/goods-and-services-tax-gst-1" target="_blank" rel="noopener">Goods and Services Tax</a></strong> (GST), the<strong><a href="/to-the-points/paper3/insolvency-and-bankruptcy-code-3" target="_blank" rel="noopener"> Insolvency and Bankruptcy Code</a> </strong>(IBC), <a href="/to-the-points/Paper2/rera-act-2016" target="_blank" rel="noopener"><strong>Real Estate (Regulation and Development) Act 2016</strong></a> and <a href="/daily-updates/daily-news-analysis/prosecution-under-benami-act-stuck" target="_blank" rel="noopener"><strong>Benami Transactions (Prohibition) Amendment Act, 2016</strong></a> encouraged compliance such that the <strong>number of income tax returns and the number of income tax filers grew</strong> at a healthy rate in 2017 and 2018.</li>
<li><strong>Counterfeit Currency:</strong> In the year <strong>2015-16,</strong> more than <strong>4 lakh fake notes</strong> of Rs. 500 and Rs. 1,000 were captured. This number <strong>reduced to 45,400 fake notes</strong> of Rs. 500 and Rs. 2,000 in<strong> 2018-19.</strong> However, the number of fake notes among the new design notes of Rs. 500 <strong>more than doubled</strong> with an increase of 121% whereas those of Rs. 2000 increased by 21.9% over the previous year during 2018-19, according to the annual report of RBI.</li>
<li><strong>Terrorism:</strong> It was believed that<strong> stopping the high-value currency from circulating will restrict funds used for terrorist activities</strong> which will gradually decrease the terrorist activities in the country. But, on the contrary, the number of such<strong> incidences rose in the years 2016, 2017, and 2018, compared to 2015.</strong>
<ul style="list-style-type: disc;">
<li>While 728 people died in terrorist activities in 2015; the number of casualties rose to 905, 812, and 940 in such activities in 2016, 2017, and 2018, according to the <strong>South Asia Terrorism Portal</strong> (SATP) data.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>Demonetisation was an expeditious move to boldly counter the black money and parallel economy (illegal economy, such as money laundering, smuggling, etc.) threat with visible impact on how the government's policies are perceived in international circles of economic power.</li>
<li>This move by the government achieved larger significance for a globally connected India as it showed boldness in tackling an issue which has remained a thorn in the growth success story of this generation.</li>
</ul>
<p><a href="https://indianexpress.com/article/business/banking-and-finance/four-years-since-demonetisation-cash-in-system-steadily-rising-at-all-time-high-7015964/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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	(int) 11 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6949,
		'category_id' => (int) 21,
		'title' => 'WhatsApp UPI and NPCI Regulations',
		'description' => '<h3>Why in News</h3>
<p>Recently, <strong>WhatsApp</strong> (a unit of Facebook) has <strong>introduced payments services in India</strong> following approval by the National Payments Corporation of India (NPCI).</p>
<ul style="list-style-type: square;">
<li>The NPCI approval also follows another recent <strong>direction imposing a cap of 30% of the total volume of transactions processed in <a href="/daily-updates/daily-news-editorials/payment-revolution-in-india" target="_blank" rel="noopener">Unified Payments Interface</a></strong> (UPI), applicable to all third-party app providers, <strong>effective from 1<sup>st</sup> January 2021.</strong><br />
<ul style="list-style-type: circle;">
<li>UPI is a<strong> single platform that merges various banking services and features</strong> under one umbrella and turns<strong> smartphones into a virtual debit card,</strong> allowing <strong>real-time bank-to-bank payments</strong> to be made using a mobile number or virtual payment address (UPI ID).</li>
</ul>
</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>WhatsApp UPI in India:</strong><br />
<ul style="list-style-type: circle;">
<li>People can send <strong>money on WhatsApp to anyone using a UPI supported app.</strong></li>
<li>India is <strong>one of the biggest markets for WhatsApp,</strong> which first started testing its UPI-based payments system in 2018 and would now <strong>compete with existing players such as Paytm, Google Pay, Amazon Pay and PhonePe.</strong></li>
<li>It is <strong>working with five leading banks in India</strong> viz. ICICI Bank, HDFC Bank, Axis Bank, the State Bank of India, and Jio Payments Bank.</li>
<li>However, <strong>not all users in India would be able to access</strong> payment features because NPCI had mandated <strong>expansion</strong> of WhatsApp&rsquo;s UPI user base<strong> in a graded manner</strong> starting with a maximum registered user base of 20 million.</li>
</ul>
</li>
<li><strong>Imposition of 30% Cap:</strong><br />
<ul style="list-style-type: circle;">
<li>The guidelines stipulate<strong> any entity not exceeding 30% of the total transaction volume to be in compliance.</strong> However,<strong> entities exceeding</strong> the said market share have been given time<strong> till 2023 to comply.</strong></li>
<li>The cap will be calculated on the <strong>basis of total volume of transactions processed in UPI during the preceding three months on a rolling basis.</strong></li>
<li>Seeing the <strong>recent growth in UPI transaction volumes,</strong> NPCI analysed the <strong>risks in the UPI ecosystem</strong> and introduced the cap.<br />
<ul style="list-style-type: disc;">
<li>The idea for a 30% cap on UPI transaction volumes was <strong>first brought up in a meeting of the NPCI&rsquo;s Steering Committee on UPI in 2019</strong> after concerns of <strong>rising dominance with non-bank third-party app providers</strong> were raised.</li>
<li>As of <strong>October 2019, Google Pay and PhonePe</strong> together had around <strong>80% of transaction volumes</strong> in UPI on their platforms.</li>
</ul>
</li>
<li>The NPCI is <strong>yet to issue the risk assessment</strong> of the UPI ecosystem on the basis of which the new norms were brought in and <strong>the Standard Operating Procedure</strong> (SOP) for the newly introduced restrictions on transaction volumes.</li>
<li>Another reason is<strong> banks&rsquo; concerns about the sudden rise in transaction volumes and the subsequent load</strong> on their systems, especially after the introduction of WhatsApp UPI.</li>
<li>The move could <strong>disincentivize platforms from on-boarding customers of a lower ticket size</strong> and in effect, <strong>could prevent the efforts to accelerate digital payments.</strong></li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>National Payments Corporation of India</strong></p>
<ul style="list-style-type: square;">
<li>It is an <strong>umbrella organisation for all retail payments systems</strong> in India.</li>
<li>It was set up with the guidance and support of 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) and <a href="/daily-updates/daily-news-analysis/ease-2-0-banking-reforms-index" target="_blank" rel="noopener"><strong>Indian Banks&rsquo; Association</strong></a> (IBA).</li>
<li><strong>Objectives:</strong><br />
<ul style="list-style-type: circle;">
<li>To consolidate and integrate the existing multiple systems into a nation-wide uniform and standard business process for all retail payment systems.</li>
<li>To facilitate an affordable payment mechanism to benefit the common man across the country and propel financial inclusion.</li>
</ul>
</li>
</ul>
</div>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>Digital payments in India is still in its development phase and any interventions at this point should be made with a view to accelerate consumer choice and innovation. A choice based and open model is key to drive this momentum.</li>
<li>The 30% cap has implications for hundreds of millions of users who use UPI for their daily payments and it could impact the further adoption of UPI and the end goal of financial inclusion.</li>
</ul>
<p><a href="https://www.thehindu.com/business/whatsapp-introducespayment-services-in-india/article33042793.ece" target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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	(int) 12 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6935,
		'category_id' => (int) 21,
		'title' => 'Virtual Global Investor Roundtable',
		'description' => '<h3>Why in News</h3>
<p>Recently, the <strong>Prime Minister has chaired the Virtual Global Investor Roundtable</strong> (VGIR), with an aim to attract investment into the country.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Virtual Global Investor Roundtable:</strong> It is <strong>an exclusive dialogue</strong> between leading global institutional investors, Indian business leaders and the highest decision-makers from the Government of India and Financial Market Regulators.</li>
<li><strong>Organised by:</strong> Ministry of Finance and the <strong>National Investment and Infrastructure Fund</strong> (NIIF).</li>
<li><strong>Focus for 2020:</strong> Discussions around India&rsquo;s economic and investment outlook, structural reforms and the government&rsquo;s vision for the path to a USD 5 trillion economy by 2024-25.</li>
<li><strong>Highlights:</strong><br />
<ul style="list-style-type: circle;">
<li><strong><a href="/daily-updates/daily-news-analysis/atmanirbhar-bharat-and-economic-stimulus" target="_blank" rel="noopener">Aatmanirbhar Vision</a>:</strong> It is a <strong>well-planned economic strategy</strong> that aims to<strong> use the capabilities of India&rsquo;s businesses and skills of its workers</strong> to make India into a global manufacturing powerhouse.</li>
<li><a href="/daily-updates/daily-news-analysis/esg-funds-becoming-popular-in-india" target="_blank" rel="noopener"><strong>ESG Score</strong></a>: India has companies ranking high on <strong>Environmental, Social and Governance (ESG)</strong> scores.</li>
<li><a href="/daily-updates/daily-news-analysis/national-infrastructure-pipeline-1" target="_blank" rel="noopener"><strong>National Infrastructure Pipeline</strong></a>: Under it, India has an ambitious plan to<strong> invest USD 1.5 trillion</strong> in various social and economic infrastructure projects, aimed for faster economic growth and alleviation of poverty in the country.</li>
<li><strong>Initiatives Taken to Improve Manufacturing Potential and Ease of Doing Business:</strong><br />
<ul style="list-style-type: disc;">
<li>One Nation, One Tax system in the form of <a href="/to-the-points/paper3/goods-and-services-tax-gst-1" target="_blank" rel="noopener"><strong>Goods and Services Tax</strong></a> (GST), one of the <strong>Lowest <a href="/daily-updates/daily-news-analysis/gst-council-and-corporate-tax" target="_blank" rel="noopener">Corporate Tax</a> rates </strong>and<strong> Faceless regime for <a href="/daily-updates/daily-news-analysis/transparent-taxation-honoring-the-honest" target="_blank" rel="noopener">Income Tax</a></strong> (IT) <strong>assessment and appeal.</strong></li>
<li>A <a href="/daily-updates/daily-news-editorials/right-code-for-labour" target="_blank" rel="noopener"><strong>new labour laws</strong></a> regime balancing the welfare of workers and ease of doing business for the employers and <a href="/daily-updates/daily-news-analysis/expansion-of-production-linked-incentive-scheme#:~:text=Under%20the%20scheme%2C%20electronics%20manufacturing,phones%20and%20specified%20electronic%20components." target="_blank" rel="noopener"><strong>Production Linked Incentive schemes</strong></a> in specific sectors.</li>
</ul>
</li>
<li><strong>Initiative Taken for the Development of the Financial Sector:</strong> <br />
<ul style="list-style-type: disc;">
<li>Unified authority for the <a href="/daily-updates/daily-news-analysis/international-financial-services-centres-authority-1" target="_blank" rel="noopener"><strong>International Financial Services Centre</strong></a>, liberal <a href="/daily-updates/daily-news-analysis/rise-in-foreign-direct-investment" target="_blank" rel="noopener"><strong>Foreign Direct Investment</strong> </a>(FDI) regime, suitable policy regimes for investment vehicles like <a href="/daily-updates/daily-news-analysis/infrastructure-investment-trusts-as-fundraiser" target="_blank" rel="noopener"><strong>Infrastructure Investment Trust</strong> </a>and<strong> Real Estate Investment Trust.</strong></li>
<li>Implementation of <a href="/to-the-points/paper3/insolvency-and-bankruptcy-code-3" target="_blank" rel="noopener"><strong>Insolvency and Bankruptcy Code</strong></a> (IBC), financial empowerment through <strong>Direct Benefit Transfer</strong> and fin-tech based payment systems like <a href="/daily-updates/daily-news-analysis/upi-transactions" target="_blank" rel="noopener"><strong>Ru-Pay cards and BHIM-UPI.</strong></a></li>
</ul>
</li>
<li>The opportunity created by the<a href="/daily-updates/daily-news-analysis/national-education-policy-2020" target="_blank" rel="noopener"><strong> National Education Policy 2020</strong> </a>in setting up campuses of foreign universities in India was also highlighted.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>National Investment and Infrastructure Fund</strong></p>
<ul style="list-style-type: square;">
<li>NIIF is a <strong>government-backed entity</strong> established to provide long-term capital to the country&rsquo;s infrastructure sector. <br />
<ul style="list-style-type: circle;">
<li>The<strong> Indian government has a 49% stake</strong> in NIIF with the rest held by foreign and domestic investors.</li>
<li>With the Centre&rsquo;s significant stake, NIIF is considered <strong>India&rsquo;s quasi-sovereign wealth fund.</strong></li>
</ul>
</li>
<li>It was set up in <strong>December 2015</strong> as a <a href="/daily-updates/daily-news-analysis/a-special-fund-for-housing-projects" target="_blank" rel="noopener"><strong>Category-II Alternate Investment Fund</strong></a>.</li>
<li>Across its <strong>three funds viz. Master Fund, Fund of Funds, and Strategic Opportunities Fund,</strong> it manages over USD 4.3 billion of capital.</li>
<li>Its registered office is in <strong>New Delhi.</strong></li>
</ul>
</div>
<p><a href="https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1670444" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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		'article_id' => (int) 6932,
		'category_id' => (int) 21,
		'title' => 'India-UAE Meet on Investments',
		'description' => '<h3>Why in News</h3>
<p>Recently, the eighth meeting of the <strong>India-UAE High-Level Joint Task Force on Investments</strong> has been virtually hosted by India in the wake of the ongoing <a href="/daily-updates/daily-news-analysis/covid-19-now-pandemic-who" target="_blank" rel="noopener"><strong>pandemic</strong></a>.</p>
<h3>Key Points<a href="http://www.drishtiias.com/images/uploads/1604573841_image4.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1604573841_image4.png" width="431" height="256" style="float: right;" /></a></h3>
<ul style="list-style-type: square;">
<li>The <strong>Joint Task Force was created in 2012</strong> as a crucial forum for further <strong>deepening the economic ties</strong> between the UAE and India.<br />
<ul style="list-style-type: circle;">
<li>The mechanism has assumed greater importance as the two countries signed the <strong>Comprehensive Strategic Partnership</strong> (CSP) <strong>Agreement</strong> in<strong> January 2017</strong> and the Joint Task Force is an integral component of it.<br />
<ul style="list-style-type: disc;">
<li>The focus areas underlined in the CSP were economy with emphasis on a <strong>two-way flow of investments, counter-terror cooperation and defence ties</strong>.</li>
<li>India has signed<strong> CSPs with the UK, Indonesia, Vietnam and <a href="/daily-updates/daily-news-analysis/india-australia-virtual-summit" target="_blank" rel="noopener">Australia</a></strong>.</li>
</ul>
</li>
</ul>
</li>
<li>At the meeting, both sides reviewed the existing<strong> UAE Plus</strong> and the <strong>Fast Track Mechanism created in 2018</strong>.<br />
<ul style="list-style-type: circle;">
<li><strong>UAE Plus</strong> is a special and dedicated desk constituted under <a href="/daily-updates/daily-news-analysis/invest-india-business-immunity-platform" target="_blank" rel="noopener"><strong>Invest India</strong></a> with Arabic speaking officials to help facilitate investments.</li>
<li>The <strong>Fast Track Mechanism </strong>aims to<strong> resolve any challenges experienced by UAE investors </strong>in India.</li>
</ul>
</li>
<li><strong>Scope of Improvement:</strong><br />
<ul style="list-style-type: circle;">
<li>Explore ways to <strong>facilitate investments</strong> in key Indian and UAE sectors with potential for economic growth, and to maintain their dialogue and further build on the considerable achievements of the Joint Task Force.</li>
<li><strong>Encourage investment and cooperation</strong> in areas of mutual interest with the purpose to stimulate economic activities in the post-Covid-19 times.</li>
<li><strong>Address specific barriers</strong> to trade, like <a href="/daily-updates/daily-news-analysis/anti-dumping-duty-on-steel-imports#:~:text=Dumping%20impacts%20the%20price%20of,and%20its%20trade%20distortive%20effect." target="_blank" rel="noopener"><strong>anti-dumping duties</strong></a>, tariffs and regulatory restrictions between the two countries with an aim to further <strong>strengthen the trade and economic ties and to coordinate efforts and promote mutual cooperation</strong>.</li>
<li>Continue the work between respective<strong> civil aviation authorities to ensure speedy normalisation of air transport</strong> operations for their mutual benefit.</li>
<li><strong>Development and operation of UAE-based funds</strong> to invest in India, in the light of the <a href="/daily-updates/daily-news-analysis/new-norms-for-fpi#:~:text=FPIs%20shall%20be%20permitted%20for,and%20invest%20in%20Indian%20markets." target="_blank" rel="noopener"><strong>Foreign Portfolio Investor Regulations 2019</strong></a> by 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</strong></a> (SEBI).<br />
<ul style="list-style-type: disc;">
<li>India agreed to look into these issues with the objective of facilitating further direct investments of UAE-based funds and seeking mutually beneficial solutions in that regard.</li>
</ul>
</li>
<li><strong>Focus on opportunities for cooperation and potential investments in key sectors</strong> in India including the <strong>healthcare and pharmaceutical </strong>industry, <strong>mobility and logistics, food and agriculture, energy and utilities</strong> and others.</li>
</ul>
</li>
</ul>
<h3>India-UAE Relations</h3>
<ul style="list-style-type: square;">
<li>India and the United Arab Emirates (UAE) enjoy strong bonds of friendship based on age-old cultural, religious and economic ties between the two nations.</li>
<li>The relationship <strong>flourished after</strong> the accession of H.H. Sheikh Zayed Bin Sultan Al Nahyan as the Ruler of Abu Dhabi in <strong>1966</strong> and subsequently with the <strong>creation of the UAE Federation in 1971</strong>.</li>
<li><strong>Political Relations:</strong><br />
<ul style="list-style-type: circle;">
<li>In <strong>August 2019,</strong> UAE <strong><a href="/daily-updates/daily-news-analysis/uae-awards-highest-civilian-honour-to-the-prime-minister" target="_blank" rel="noopener">awarded ZAYED Medal</a></strong>, their highest civilian award, <strong>to the Prime Minister of India</strong> for consolidating the long-standing friendship and joint strategic cooperation between the two nations.</li>
<li>Indian Prime Minister&rsquo;s visit to the UAE in <strong>August 2015</strong> marked the beginning of a new and <strong>comprehensive and strategic partnership</strong>.</li>
<li>The Crown Prince of Abu Dhabi visited India in <strong>February 2016</strong> and had <strong>wide-ranging discussions on bilateral, regional and multilateral issues of mutual interest</strong>.</li>
</ul>
</li>
<li><strong>Commercial Relations:</strong><br />
<ul style="list-style-type: circle;">
<li>India-UAE trade was around <strong>USD 59 billion making UAE, India&rsquo;s third-largest trading partner</strong> for the year <strong>2019-20</strong> after China and the USA.</li>
<li>The <strong>UAE is the second-largest export destination of India</strong> with an amount of over <strong>USD 29 billion for the year 2019-20</strong>.</li>
<li>For the<strong> UAE, India is the second-largest trading partner</strong> for the year <strong>2019</strong> with an amount of around <strong>USD 41.43 billion</strong> for non-oil trade.</li>
<li><strong>India&rsquo;s Major Exports:</strong> Food items, Machinery, Gems and Jewellery, Textiles, Engineering and Machinery Products, Chemicals, etc.</li>
<li><strong>India&rsquo;s Major Import:</strong> Crude Oil, Petroleum and Petroleum Products, Precious Metals, Minerals, Chemicals, Wood and Wood Products.</li>
</ul>
</li>
<li><strong>Cultural Relations:</strong><br />
<ul style="list-style-type: circle;">
<li>The two nations <strong>share historical ties and have maintained regular cultural exchanges</strong> both at official and popular levels.</li>
<li>They signed a <strong>Cultural Agreement in 1975</strong> and the embassies continue to organise various cultural activities on their own as well as by collaborating with other cultural organisations.</li>
</ul>
</li>
<li><strong>Indian Community:</strong><br />
<ul style="list-style-type: circle;">
<li>The UAE is<strong> home to the Indian expatriate community of more than 2.6 million,</strong> the largest expatriate community in the UAE, which has played a <strong>major role in the economic development</strong> of the UAE.</li>
<li>Recently, India has asked the members of the <a href="/daily-updates/daily-news-analysis/gulf-cooperation-council-and-india" target="_blank" rel="noopener"><strong>Gulf Cooperation Council (GCC) which also includes UAE</strong></a>, to facilitate the return of Indians who want to resume work with the relaxing of Covid-19-related restrictions.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Recent Developmental Events in the UAE</strong></p>
<ul style="list-style-type: square;">
<li>In March 2019, the <a href="/daily-updates/daily-news-editorials/an-opening-in-abu-dhabi" target="_blank" rel="noopener"><strong>46<sup>th</sup> session of the Council of Foreign Ministers</strong></a> of the<a href="/daily-updates/daily-news-analysis/organisation-of-islamic-cooperation-oic" target="_blank" rel="noopener"><strong> Organisation of Islamic Cooperation (OIC)</strong></a>, was held in Abu Dhabi where India was invited as a guest of honour.<br />
<ul style="list-style-type: circle;">
<li>The <strong>UAE</strong> hosted the event and had <strong>strongly defended the decision to invite India</strong> despite Pakistan&rsquo;s strong objection and threat to boycott the event.</li>
</ul>
</li>
<li>In <strong>February 2020,</strong> the UAE issued an operating licence for the <a href="/daily-updates/daily-news-analysis/arab-world-s-first-nuclear-power-plant" target="_blank" rel="noopener"><strong>Arab world's first nuclear power plant</strong></a>, paving the way for it to start production in 2020.</li>
<li><strong>UAE Mars Mission:</strong> In July 2020, the UAE launched a <a href="/daily-updates/daily-news-analysis/hope-uae-mars-mission" target="_blank" rel="noopener"><strong>Mars probe named Amal (Hope)</strong></a> from Japan, marking the <strong>Arab world&rsquo;s first interplanetary mission.</strong></li>
<li>In <strong>September 2020,</strong> the UAE signed the <a href="/daily-updates/daily-news-analysis/israel-uae-and-bahrain-abraham-accord" target="_blank" rel="noopener"><strong>Abraham Accord</strong></a> with Israel and Bahrain, which is the <strong>first Arab-Israeli peace deal in 26 years</strong>.</li>
</ul>
</div>
<p><a href="https://www.pib.gov.in/PressReleasePage.aspx?PRID=1669792" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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	(int) 14 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6905,
		'category_id' => (int) 22,
		'title' => 'Natural Gas Marketing Reforms',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.thehindubusinessline.com/opinion/how-india-is-unbottling-the-gas-economy/article32984963.ece" target="_blank" rel="noopener"><strong>&ldquo;How India is unbottling the &lsquo;gas economy&rsquo;&rdquo;</strong></a> which was published in The Hindu Businessline on 30/10/2020. It talks about the significance and steps for India to become a market economy.</p>
</div>
<p>Recently, <a href="/daily-updates/daily-news-analysis/reforms-in-exploration-and-licensing-policy-oil-gas" target="_blank" rel="noopener"><strong>Natural Gas Marketing Reforms</strong></a> were approved by the government of India. These were introduced with the objective to prescribe standard procedure to discover the market price of gas through a transparent and competitive e-bidding process.</p>
<p>Globally, natural gas has been gaining traction as a key alternative and an ideal fuel to support the energy shift in favour of cleaner and greener energy sources. India too is on its path to become a <a href="/to-the-points/paper3/sustainable-development-3#:~:text=Economic%20Sustainability%3A,all%20its%20forms%20and%20dimensions." target="_blank" rel="noopener"><strong>sustainable development</strong></a> and has set a vision to become <a href="/to-the-points/Paper2/year-end-review-2019-ministry-of-petroleum-natural-gas" target="_blank" rel="noopener"><strong>a gas-based economy.</strong></a></p>
<p>However, a well-functioning gas market will require the enabling regulatory framework to reduce entry/exit barriers, achieve balance between safeguarding the interests of customers pricing, delivery expectations and sellers returns expectations.</p>
<h3>India&rsquo;s Pursuit of Becoming Gas Economy</h3>
<ul style="list-style-type: square;">
<li>With its aim to increase the share of gas in the energy mix from the current 6% to about 15% by 2030, India has bolstered its efforts in making the environment favourable to ensure such an increase.</li>
<li>Gas markets will play a crucial role in achieving the national aspirations of increasing the share of gas.</li>
<li>Increasing domestic gas production has been a key government priority. Further, the plan to achieve<a href="/loksabha-rajyasabha-discussions/the-big-picture-gas-grid-fuel-for-all" target="_blank" rel="noopener"><strong> &lsquo;One Nation One Gas Grid&rsquo;</strong> </a>will shift Indian economy towards a gas-based economy.</li>
<li>A liquid and well-functioning domestic gas market, as also suggested by <a href="/daily-updates/daily-news-analysis/global-energy-review-2020-iea" target="_blank" rel="noopener"><strong>International Energy Agency (IEA)</strong></a>, would be a strong pillar for building gas economy in India.</li>
</ul>
<h3>Significance of Recent Reforms</h3>
<ul style="list-style-type: square;">
<li>The latest reforms are with the intent to keep to the letter and spirit of ensuring marketing and pricing freedom for gas pricing in India.</li>
<li>They allow transparent price discovery based on e-bidding through an independent agency selected from a panel maintained by the Directorate General of Hydrocarbons.</li>
<li>This permits affiliates to participate in the bidding process for sale of gas and allow marketing freedom to certain field development plans (FDPs) where production sharing contracts already provide pricing freedom.</li>
<li>This is to bring uniformity to the bidding process across various contractual regimes and policies to avoid ambiguity.</li>
<li>Such a platform will aid in expanding the gas industry by providing competitive and transparent pricing, flexibility in procurement and payment security.</li>
</ul>
<h3>Associated Challenges</h3>
<ul style="list-style-type: square;">
<li><strong>Nascent Gas Sector:</strong> The gas makes only 6% of India&rsquo;s energy basket mix.<br />
<ul style="list-style-type: circle;">
<li>While the government is putting all its might, critics are quick to point out that domestic production is yet to take off and majority of India&rsquo;s gas requirement continues to be met through imports.</li>
</ul>
</li>
<li><strong>Differential Pricing:</strong> Today, gas in India is sold at varied prices &mdash; the gas under administered price regime at $1.79 per mBtu and other domestic gas in the range of $4.5 to $5.5 per mBtu. <br />
<ul style="list-style-type: circle;">
<li>This hampers the evolution of a vibrant gas market.</li>
</ul>
</li>
<li><strong>Public Sector Domination:</strong> Almost 80 per cent of Indian domestic gas is produced from blocks given on nomination basis to national oil companies. <br />
<ul style="list-style-type: circle;">
<li>Also, the obsolete technology and efficiency with the public sector hampers gas production as well.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Deregulation of Pricing:</strong> A key aspect of ensuring market reforms to boost gas economy, would be deregulation of pricing for domestically produced gas. <br />
<ul style="list-style-type: circle;">
<li>It will allow freedom to price and market domestic gas and in turn boost domestic production, making it more viable for players to invest.</li>
<li>Moreover, market-determined and affordable pricing would also boost industrial growth and economic competitiveness.</li>
</ul>
</li>
<li><strong>Boosting Infrastructure:</strong> These markets have greatly benefited from factors such as open access to infrastructure, system operator, unbundled marketing and transport functions and market-friendly transport access and tariff besides strong pipeline infrastructure.</li>
<li><strong>Freeing Gas Markets:</strong> Through ensuring price benchmarks, it will drive competition across the value chain and stimulate investments in exploration and production along with downstream infrastructure. <br />
<ul style="list-style-type: circle;">
<li>Moreover, factors such as inclusion under GST and an overarching regulatory framework will also play an important role in boosting the overall gas markets.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>India has currently gas pipeline infrastructure of around 16,000 km and plans to double the capacity in 2-3 years. Coupled with necessary policy and regulatory support, India can indeed accelerate its pace towards building a market-based gas economy.</p>
<p><img class="content-img" src="http://www.drishtiias.com/images/uploads/1604318797_image 0.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="600" caption="false" /></p>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr>
<td style="width: 100%; border-style: dotted; border-color: #ff0000; background-color: #fffdf0;">
<p><span style="color: #000080;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Natural gas is an ideal fuel to support the energy shift in favour of cleaner and greener energy sources. Critically examine the potential of India becoming a gas based economy.</p>
</td>
</tr>
</tbody>
</table>
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		'article_id' => (int) 6877,
		'category_id' => (int) 21,
		'title' => 'RBI’s Annual Report on State Finances',
		'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> released its annual report on state finances.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Covid-19 Impact:</strong> The double whammy (also termed as <strong>scissor effect</strong>) of the <a href="/daily-updates/daily-news-analysis/covid-19-now-pandemic-who" target="_blank" rel="noopener"><strong>Covid-19 pandemic</strong></a> &mdash; <strong>a collapse in revenue</strong> and <strong>rise in health-related and other costs</strong> &mdash; is likely to have a significant impact on state government finances.</li>
<li><strong>Fiscal Deficit:</strong> As most states presented their budgets before the onset of the pandemic, their budget estimates of deficits are <strong>unlikely to capture the true picture of the ongoing fiscal year (2020-21)</strong>.<br />
<ul style="list-style-type: circle;">
<li>The average value of <strong>gross fiscal deficit to GSDP</strong> (Gross State Domestic Product) for the states which presented their budget before the outbreak of the pandemic is 2.4%, while the average for the remaining states that made post-outbreak budget presentations is 4.6%.</li>
<li>This indicates that the <strong>gross fiscal deficit of states is going to double for the 2020-21 period</strong>.</li>
<li><strong>Fiscal Deficit</strong> is the difference between the total income of the government and its total expenditure.</li>
</ul>
</li>
<li><strong>Capital Spending:</strong> Capital spending by the states is going to be <strong>lower than budgeted levels</strong> this year. Also, States may treat <strong>capital expenditure as a residual element</strong>.<br />
<ul style="list-style-type: circle;">
<li>Lower spending is a result of states<strong> not being able to start a lot of projects</strong> due to the lockdown in the first quarter and monsoon in the second quarter.</li>
<li>Capital expenditure undertaken by states is generally treated as a residual and is <strong>prone to adjustment, conditional upon revenue generation</strong>.</li>
<li>Capital expenditure is the <strong>money spent on the acquisition of assets like land, buildings, machinery, equipment</strong>, as well as <strong>investment in shares</strong>.<br />
<ul style="list-style-type: disc;">
<li>It accounts for more than 60% of general government (centre + states) capital expenditure.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Tax Buoyancy:</strong> The implied tax buoyancy for 2020-21 is higher than budgeted on the basis of 2019-20 revised estimates. <br />
<ul style="list-style-type: circle;">
<li>Tax buoyancy is the <strong>ratio of change in taxes and GSDP</strong> (Gross State Domestic Product). <strong>Higher tax buoyancy implies that tax collection would rise at a faster pace for the same rise in incomes.</strong></li>
</ul>
</li>
<li><strong>GST Revenue:</strong> States Goods and Service Tax (SGST), the component of the <a href="/daily-updates/daily-news-analysis/fall-in-goods-and-services-tax-gst-collections" target="_blank" rel="noopener"><strong>GST</strong></a>, which accrues directly to the states, would suffer the biggest hit. <br />
<ul style="list-style-type: circle;">
<li>SGST collections fell by 47.2% during the April-June 2020-21 quarter.</li>
<li>State receipts will also suffer because of a fall in the divisible pool of the Centre&rsquo;s tax revenue.</li>
</ul>
</li>
<li><strong>Overall Impact:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>States&rsquo; indebtedness is set to rise,</strong> and if it is not accompanied by an acceleration in growth, fiscal sustainability will become the casualty, overwhelming the modest gains of the prudence in recent years.</li>
<li>Due to a surge in contingent liabilities (guarantees), <strong>state governments may have to put investment projects on hold</strong>.</li>
<li>To give a<strong> boost to aggregate demand</strong>, state governments are <strong>reducing various kinds of expenditure</strong>. These include deferment and deduction of salaries and allowances and rationalisation of travel and establishment expenses.</li>
</ul>
</li>
</ul>
<p><a href="https://indianexpress.com/article/explained/explained-how-covid-19-has-affected-finances-of-state-governments-6906683/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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		'article_id' => (int) 6851,
		'category_id' => (int) 21,
		'title' => 'India - Australia Circular Economy Hackathon',
		'description' => '<h3>Why in News</h3>
<p><a href="/daily-updates/daily-news-analysis/aatmanirbhar-bharat-arise-atal-new-india-challenge" target="_blank" rel="noopener"><strong>Atal Innovation Mission</strong> </a>(AIM- an initiative set up by NITI Aayog), in association with <strong>Australia&rsquo;s Commonwealth Scientific and Industrial Research Organisation</strong> (CSIRO), will organise a two-day hackathon on circular economy, <strong>&lsquo;India-Australia Circular Economy Hackathon (I-ACE)&rsquo;,</strong> in December 2020.</p>
<ul style="list-style-type: square;">
<li>The <strong>idea of I-ACE was conceived during a <a href="/daily-updates/daily-news-analysis/india-australia-virtual-summit" target="_blank" rel="noopener">virtual summit</a> on 4th June, 2020,</strong> between the Indian and Australian prime ministers, exploring innovative ways to boost the circular economy in India and Australia.</li>
</ul>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Focus:</strong> I-ACE will focus on <strong>identification and development of innovative technology solutions</strong> by students, startups and MSMEs of both nations.</li>
<li><strong>Key Themes:</strong><br />
<ul style="list-style-type: circle;">
<li>Innovation in packaging, reducing packaging waste.</li>
<li>Innovation in food supply chains, avoiding waste.</li>
<li>Creating opportunities for plastic waste reduction.</li>
<li>Recycling critical energy metals and e-waste.</li>
</ul>
</li>
<li><strong>Selection of Winners:</strong> Shortlisted students and startups/MSMEs will be called for the hackathon, where two winners (one student and one startup/MSME) per theme from each country will be announced at an award ceremony.</li>
<li><strong>Cash Prize:</strong> Winning teams from both the countries will get cash prizes. The winning Indian student and startup/MSME will be awarded a prize of Rs. 2 lakh and Rs 5 lakh, respectively, coupled with post-hackathon product development opportunities.</li>
</ul>
<h3>Circular Economy</h3>
<ul style="list-style-type: square;">
<li><strong>Meaning:</strong> It is an economy where products are designed for durability, reuse and recyclability and thus almost everything gets reused, remanufactured, and recycled into a raw material or used as a source of energy.</li>
<li><strong>Efficient Use of Resources:</strong> It includes <strong>3 R&rsquo;s (Reduce, Reuse and Recycle),</strong> Refurbishment, Recover, and Repairing of materials.</li>
<li><strong>Example:</strong> If a person is planning to discard his/her mobile, it can be given to someone else (i.e. giving the mobile second life-Reuse), rather than throwing it just like that.<br />
<ul style="list-style-type: circle;">
<li>Once the mobile reaches its end of life, it can be ensured that everything embedded in it, aluminum, copper, plastic etc. should be brought back to production cycle so that the circle of the economy gets completed.</li>
</ul>
</li>
<li><strong>Response to the Linear Process:</strong> Many countries follow a linear process in which raw materials are taken from the environment, turned into new products which are then disposed of after use.</li>
</ul>
<p><a href="http://www.drishtiias.com/images/uploads/1603786065_image2.jpg" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1603786065_image2.jpg" style="display: block; margin-left: auto; margin-right: auto;" width="500" caption="false" /></a></p>
<ul style="list-style-type: square;">
<li><strong>Benefits:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>For Industry:</strong><br />
<ul style="list-style-type: disc;">
<li><strong>Fulfills the need for raw materials:</strong> The output produced by industries in a circular economy comes back to the industries in the form of input, for example, when parts of a mobile will be segregated, copper and aluminum will become raw materials for some industries.</li>
<li><strong>Efficient utilization of resources:</strong> This helps industries in earning cash profits equivalent to 3-5% of their turnover. Ultimately, QCDF (Quality, Cost, Delivery, and Flexibility) and sustainability level of industries get improved.</li>
</ul>
</li>
<li><strong>For Environment:</strong><br />
<ul style="list-style-type: disc;">
<li><a href="/daily-updates/daily-news-editorials/a-better-way-of-waste-management" target="_blank" rel="noopener"><strong>Problem of disposal of waste</strong></a> <strong>gets solved</strong> as in a circular economy, waste is converted into raw materials.</li>
<li>Also <strong>solves the problem of air pollution, water pollution, and land pollution.</strong></li>
</ul>
</li>
<li><strong>For Consumers:</strong><br />
<ul style="list-style-type: disc;">
<li><strong>Cost-Effective:</strong> The products in the circular economy are more cost effective for consumers as they tend to be more efficient, besides having a longer shelf life.</li>
<li><strong>Efficient Products:</strong> Increased Efficiency leads to a reduction in the cost of maintenance as well as that of disposal, which otherwise a consumer has to incur in a huge amount.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Global Response:</strong> Germany and Japan have used it as a binding principle for reorganizing its economy, whereas China even has a law on it (Circular Economy Promotion Law).<br />
<ul style="list-style-type: circle;">
<li>Further, the <a href="/to-the-points/paper3/sustainable-development-3" target="_blank" rel="noopener"><strong>Sustainable Development Goals</strong></a>, adopted by the United Nations Member States in 2015, include many related ambitions.</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Circular Economy and India</strong></p>
<ul style="list-style-type: square;">
<li>India is already on its path to the circular economy. Initiatives of the National Productivity Council (NPC) and government show that. <br />
<ul style="list-style-type: circle;">
<li><strong>NPC</strong> is an autonomous organisation under the Ministry of Commerce &amp; Industry. <a href="/daily-updates/daily-news-analysis/national-productivity-council" target="_blank" rel="noopener"><strong>Productivity Week 2019 Theme</strong></a> was &lsquo;Circular Economy for Productivity and Sustainability&rsquo;.</li>
<li><a href="/loksabha-rajyasabha-discussions/in-depth-digital-india" target="_blank" rel="noopener"><strong>&lsquo;Digital India&rsquo;</strong></a> Program contains a significant component of the recycling of electronic wastes. <a href="/daily-updates/daily-news-analysis/swachh-bharat-mission-urban#:~:text=Swachh%20Bharat%20Mission%2DUrban%20(SBM,certified%20through%20third%2Dparty%20verification." target="_blank" rel="noopener"><strong>Swachh Bharat Mission</strong></a> is also about making wealth out of wastes.</li>
</ul>
</li>
<li>India has a <strong>huge potential for reuse and recycling</strong> as only around 20% of the total waste generated goes into the recycling process.</li>
<li>Manufacturing Sector, especially MSMEs can help a lot in transformation towards a circular economy. The sector should &lsquo;DECIDE&rsquo; i.e.<br />
<ul style="list-style-type: circle;">
<li>Designing processes for refurbishment and easy cycling.</li>
<li>Educating masses on Circular Economy and its benefits.</li>
<li>Collaborative Models for smooth implementation of Circular Economy.</li>
<li>Innovating Products for circularity.</li>
<li>Digitization for transparency, virtualization, dematerialization, and feedback driven intelligence for saving resources.</li>
<li>Energy-Efficient for environmental sustainability.</li>
</ul>
</li>
</ul>
</div>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>India and Australia have had a strong and productive bilateral partnership since a decade and their collaborations across a broad range of areas have yielded significant results.</li>
<li>Circular Economy can lead to the emergence of<strong> more sustainable production and consumption patterns,</strong> thus providing opportunities for developed and developing countries to achieve economic growth and inclusive and sustainable industrial development (ISID) in line with the 2030 Agenda for Sustainable Development.</li>
<li>The transition towards a circular economy requires systematic innovations including new innovative financing models, partnerships, business models and close integration of <strong><a href="/loksabha-rajyasabha-discussions/in-depth-industrial-revolution-4-0" target="_blank" rel="noopener">industry 4.0</a> principles.</strong></li>
</ul>
<p><a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1667604" target="_blank" rel="noopener"><strong>Source: PIB</strong></a></p>',
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		'article_id' => (int) 6847,
		'category_id' => (int) 22,
		'title' => 'Insurance Sector in India',
		'description' => '<div class="border">
<p>This article is based on <a href="https://www.thehindubusinessline.com/opinion/editorial/keeping-it-saral/article32920441.ece" target="_blank" rel="noopener"><strong>&ldquo;Keeping it Saral&rdquo;</strong> </a>which was published in The Hindu Businessline on 22/10/2020. It talks about the journey of the insurance sector in India and its associated issues.</p>
</div>
<p>Insurance is the main element in the operation of national economies throughout the world today. It protects health and assets of the people and stimulates business activities to operate in a cost-effective manner.</p>
<p>Citing this, the <a href="/daily-updates/daily-news-analysis/sandbox-for-fintech" target="_blank" rel="noopener"><strong>Insurance Regulatory and Development Authority</strong> </a>(IRDA) has released guidelines for the insurance sector i.e. <strong>Saral Jeevan Bima (SJB).</strong> Saral Jeewan Bima provides for broad contours of a standard individual term life insurance product which must be adhered by insurance companies.</p>
<p>While India&rsquo;s insurance sector has been growing dynamically in recent years, its share in the global insurance market remains abysmally low.</p>
<p>There are many underlying issues which affect the insurance sector in India such as low penetration and density rates, inadequate investment in insurance products, and the dominant position and deteriorating financial health of public-sector players.</p>
<p>Therefore, the goal of making insurance accessible to all will remain difficult to achieve, until the above mentioned issues are addressed.</p>
<h3>Background of Insurance Sector</h3>
<p>The insurance sector has witnessed many changes over the years including:</p>
<ul style="list-style-type: square;">
<li>Nationalisation of life (LIC Act 1956) and non-life sectors (GIC Act 1972).</li>
<li>Constitution of the Insurance Regulatory and Development Authority of India (IRDAI) in 1999.</li>
<li>Opening up of the sector to both private and foreign players in 2000.</li>
<li>Increase in the foreign investment cap to 26% from 49% in 2015.</li>
<li>The recent notification of 100% foreign direct investment (FDI) for insurance intermediaries (announced in the Union Budget of 2019-20) has further liberalised the sector.</li>
</ul>
<h3>Saral Jeevan Bima</h3>
<p>With SJB, IRDA envisages to increase penetration of insurance in India. Under this scheme:</p>
<ul style="list-style-type: square;">
<li><strong>Standardisation:</strong> IRDA has come up with guidelines for a &ldquo;standard" product&mdash;Saral Jeevan Bima&mdash;specifying the terms and conditions, benefits, and features that life insurance companies must include. Thereby, making it simpler for individuals to buy a term insurance policy.<br />
<ul style="list-style-type: circle;">
<li>SJB will make it easier for the customers to make an informed choice, enhance the trust between the insurers and the insured, and reduce mis-selling as well as potential disputes at the time of claiming settlement.</li>
</ul>
</li>
<li><strong>Inclusive:</strong> The product guidelines mention that insurers should offer the product without restrictions on gender, place of residence, travel, occupation, or educational qualifications.</li>
<li><strong>Securing Interests of Insurers:</strong> Insurers will not be liable for a payout if the policyholder dies within 45 days of taking the policy except in case of accident.</li>
</ul>
<h3>Challenges in India&rsquo;s Insurance sector</h3>
<ul style="list-style-type: square;">
<li><strong>Prevalence of Insurance Gap:</strong> The insurance penetration (ratio of total premium to GDP (gross domestic product)) and density (ratio of total premium to population) stood at 3.69% and US$ 73, respectively for FY18 (fiscal year 2017-18), which is low in comparison with global levels. <br />
<ul style="list-style-type: circle;">
<li>These low penetration and density rates reveal the uninsured nature of large sections of population in India, and the presence of an insurance gap.</li>
</ul>
</li>
<li><strong>Public Sector Dominated:</strong> The insurance sector has transitioned from being an exclusive State monopoly to a competitive market, but public-sector insurers hold a greater share of the insurance market even though they are fewer in number.</li>
<li><strong>Nascent Non-life Insurance:</strong> Life insurance dominates the sector with a huge share of 74.7%, with non-life insurance accounting for the remaining 25.3%. <br />
<ul style="list-style-type: circle;">
<li>In the non-life insurance sector, motor, health, and crop insurance segments are driving growth. India&rsquo;s non-life insurance penetration is below 1%.</li>
<li>In addition, insurance products catering to speciality risks such as catastrophes and cyber security are at a nascent stage of development in the country.</li>
</ul>
</li>
<li><strong>Rural-Urban Divide:</strong> Low insurance penetration and density rates prevail in India. However, Rural participation of insurers remains deficient, and life insurers, especially private ones, gravitate towards the urban population.</li>
<li><strong>Capital Starved Insurers:</strong> Insurers in India lack sufficient capital, and their financial health, particularly that of the public-sector insurers, is in a precarious state.<br />
<ul style="list-style-type: circle;">
<li>Further, investment in the insurance sector got dwindled due to the crisis in banks and NBFCs (non-banking financial companies) sector.</li>
</ul>
</li>
</ul>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li><strong>Rural Centric Approach:</strong> Insurance companies in India will have to show long-term commitment to the rural sector as well, and will have to design products which are suitable for rural people.<br />
<ul style="list-style-type: circle;">
<li>In this context, government insurance schemes such as <a href="/daily-updates/daily-news-editorials/ayushmanbharat" target="_blank" rel="noopener"><strong>Pradhan Mantri Jan Arogya Yojana</strong></a>, <a href="/daily-updates/daily-news-analysis/pradhan-mantri-fasal-bima-yojana-pmfby" target="_blank" rel="noopener"><strong>Pradhan Mantri Fasal Bima Yojana</strong></a>, <a href="/daily-updates/daily-news-editorials/financial-inclusion-4" target="_blank" rel="noopener"><strong>Pradhan Mantri Suraksha Bima Yojana</strong></a>, and <a href="/daily-updates/daily-news-editorials/financial-inclusion-4" target="_blank" rel="noopener"><strong>Pradhan Mantri Jeevan Jyoti Bima Yojana</strong></a> are notable steps in right direction.</li>
</ul>
</li>
<li><strong>Need For Awareness Program:</strong> There is a need for complementary thrust to spread awareness and improve financial literacy, particularly the concept of insurance, and its importance.</li>
<li><strong>Technological Intervention:</strong> Another area that necessitates regulatory scrutiny is that of application of technology in insurance. An example is the emergence of &lsquo;InsurTech&rsquo;, designed to make the claim process simpler and more comprehensible.</li>
<li><strong>Enhanced Role of Regulator:</strong> The regulator needs to exercise vigilance on three other aspects. <br />
<ul style="list-style-type: circle;">
<li>It must ensure that insurance is not denied to lower-income people who make up the bulk of the population and have the most need for protection.</li>
<li>It should insist that insurers facilitate a simple online process for direct buying of insurance products, bypassing intermediaries.</li>
<li>It should ensure that players do not overcharge or add hidden costs.</li>
</ul>
</li>
</ul>
<h3>Conclusion</h3>
<p>Demographic factors, coupled with increasing awareness and financial literacy, are likely to catalyse the growth of the sector. An enhanced regulatory regime that focuses on increasing insurance coverage is the need of the hour.</p>
<p><a href="http://www.drishtiias.com/images/uploads/1603712025_image0.png" target="_blank" rel="noopener"><img class="content-img" src="http://www.drishtiias.com/images/uploads/1603712025_image0.png" style="display: block; margin-left: auto; margin-right: auto;" width="600" 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: #fafbff;">
<p><span style="color: #333399;"><em><strong>Drishti Mains Question</strong></em></span></p>
<p>Discuss the significance of the insurance sector in Indian economy and its underlying issues.</p>
</td>
</tr>
</tbody>
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	(int) 18 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6830,
		'category_id' => (int) 21,
		'title' => 'Forex Reserves',
		'description' => '<h3>Why in News</h3>
<p>According to 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> data, the country&rsquo;s <strong>foreign exchange (forex) reserves touched a lifetime high of USD 555.12 billion</strong> after it surged by USD 3.615 billion in the week ended 16<sup>th</sup> October 2020.</p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Reason Behind the Increase:</strong> <br />
<ul style="list-style-type: circle;">
<li>The rise in total reserves was <strong>due to a sharp rise in Foreign Currency Assets (FCAs),</strong> a major component of the overall reserves.</li>
<li>FCA <strong>jumped by USD 3.539 billion</strong> to USD 512.322 billion.</li>
</ul>
</li>
<li><strong>Foreign Exchange Reserves:</strong><br />
<ul style="list-style-type: circle;">
<li>Foreign exchange reserves are <strong>assets held on reserve by a central bank</strong> in foreign currencies, which can include bonds, treasury bills and other government securities.<br />
<ul style="list-style-type: disc;">
<li>It needs to be noted that <strong>most foreign exchange reserves are held in U.S. dollars.</strong></li>
</ul>
</li>
<li>These assets <strong>serve many purposes</strong> but are most significantly held to ensure that the central bank <strong>has backup funds</strong> if the national currency rapidly devalues or becomes altogether insolvent.</li>
<li><strong>India&rsquo;s Forex Reserves include:</strong><br />
<ul style="list-style-type: disc;">
<li>Foreign Currency Assets</li>
<li>Gold</li>
<li>Special Drawing Rights</li>
<li>Reserve position with the <a href="/important-institutions/drishti-specials-important-institutions-international-institution/international-monetary-fund-imf" target="_blank" rel="noopener"><strong>International Monetary Fund (IMF)</strong></a></li>
</ul>
</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Foreign Currency Assets</strong></p>
<ul style="list-style-type: square;">
<li>FCA are assets that are <strong>valued based on a currency other than the country's own currency.</strong></li>
<li>FCA is the <strong>largest component of the forex reserve. </strong>It is<strong> expressed in dollar terms.</strong></li>
<li>FCA includes <strong>the effect of appreciation or depreciation of non-US units</strong> like the euro, pound and yen held in the foreign exchange reserves.<br />
<ul style="list-style-type: circle;">
<li><strong>Currency appreciation</strong> refers to the increase in value of one currency relative to another in the forex markets.</li>
<li><strong>Currency depreciation</strong> is a fall in the value of a currency in a floating exchange rate system.<br />
<ul style="list-style-type: disc;">
<li>In a <strong>floating exchange rate system,</strong> market forces (based on demand and supply of a currency) determine the value of a currency.</li>
</ul>
</li>
</ul>
</li>
</ul>
<p><strong>Special Drawing Rights</strong></p>
<ul style="list-style-type: square;">
<li>The SDR is an <strong>international reserve asset,</strong> created by the <strong>International Monetary Fund (IMF)</strong> in 1969 to supplement its member countries&rsquo; official reserves.</li>
<li>The SDR is <strong>neither a currency nor a claim on the IMF.</strong> Rather, it is a potential claim on the freely usable currencies of IMF members. SDRs can be exchanged for these currencies.</li>
<li>The value of the SDR is calculated from a weighted basket of<strong> major currencies,</strong> including the U.S. dollar, the euro, Japanese yen, Chinese yuan, and British pound.</li>
<li>The <strong>interest rate on SDRs or SDRi</strong> is the interest paid to members on their SDR holdings.</li>
</ul>
<p><strong>Reserve Position in the International Monetary Fund</strong></p>
<ul style="list-style-type: square;">
<li>A <strong>reserve tranche</strong> position implies a<strong> portion of the required quota of currency each member country must provide to the International Monetary Fund (IMF)</strong> that can be utilized for its own purposes.</li>
<li>The reserve tranche is basically <strong>an emergency account</strong> that IMF members can access at any time without agreeing to conditions or paying a service fee.</li>
</ul>
</div>
<p><a href="https://www.thehindu.com/business/Economy/forex-reserves-hit-record-high-of-55512-bn/article32933210.ece#:~:text=The%20country%27s%20foreign%20exchange%20reserves,16%2C%20according%20to%20RBI%20data." target="_blank" rel="noopener"><strong>Source: TH</strong></a></p>',
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	(int) 19 => object(Cake\ORM\Entity) {

		'article_id' => (int) 6788,
		'category_id' => (int) 21,
		'title' => 'Rationalisation of Autonomous Institutions',
		'description' => '<h3>Why in News</h3>
<p>The <strong>Ministry of Finance has recommended</strong> that the <strong>Ministry of Environment, Forest and Climate Change (MoEFCC) &ldquo;disengage&rdquo; from five autonomous institutions</strong> working under it and <strong>merge two</strong> others, thus <strong>reducing the 16 <a href="/daily-updates/daily-news-editorials/autonomous-bodies" target="_blank" rel="noopener">autonomous organisations</a></strong> under the ministry<strong> to 9.</strong></p>
<h3>Key Points</h3>
<ul style="list-style-type: square;">
<li><strong>Background:</strong><br />
<ul style="list-style-type: circle;">
<li>The recommendations are a part of the report that has been <strong>prepared in accordance with the guidelines prescribed under rule 229 of General Finance rules 2017.</strong> <br />
<ul style="list-style-type: disc;">
<li>Rule 229 pertains to &lsquo;General Principles for setting up of Autonomous Organisations&rsquo;.</li>
<li>The purpose of the report is to make specific and actionable recommendations for rationalisation of <a href="/daily-updates/daily-news-editorials/autonomous-bodies" target="_blank" rel="noopener"><strong>autonomous bodies</strong></a> with a view to furthering the aim of<strong> &lsquo;minimum government, maximum governance,&rsquo;</strong> ensuring<strong> efficient use of public funds.</strong></li>
</ul>
</li>
</ul>
</li>
<li><strong>Recommendations for MoEFCC:</strong><br />
<ul style="list-style-type: circle;">
<li><strong>Disengagement</strong> from the <a href="/daily-updates/daily-news-analysis/sal-forest-tortoise" target="_blank" rel="noopener"><strong>Wildlife Institute of India</strong></a> (WII-Dehradun), <strong>Indian Institute of Forest Management</strong> (IIFM-Bhopal),<strong> Indian Plywood Industries Research &amp; Training Institute</strong> (Bengaluru), <strong>CPR Environmental Education Centre</strong> (Chennai) and <strong>Centre for Environment Education</strong> (Ahmedabad). <br />
<ul style="list-style-type: disc;">
<li>&lsquo;Disengagement&rsquo; will involve<strong> two aspects - phasing out government support</strong> to the institution in a time-bound manner, <strong>disassociating from the management</strong> of the institutions and allowing the relevant industry/stakeholders to run them.</li>
<li><strong>Disengagement</strong> by the government <strong>with a three-year timeline</strong> and a <strong>gradual budget reduction of 25% each year</strong> is recommended.</li>
<li>Both<strong> WII</strong> and<strong> IIFM</strong> can be <strong>converted to deemed universities.</strong></li>
</ul>
</li>
<li>The<strong> Society of Integrated Coastal Management</strong> (New Delhi) should be merged with the <strong>National Centre for Sustainable Coastal Management</strong> (Tamil Nadu), as both perform similar roles of promoting coastal management. This will <strong>avoid duplication</strong> of activities and <strong>attain economies of scale.</strong></li>
<li><strong>Salim Ali Centre for Ornithology and Natural History</strong> (Tamil Nadu), which receives Rs. 14 crore annually from MoEFCC, should be merged with the ministry.</li>
<li><strong>Statutory bodies</strong> such as <a href="/daily-updates/daily-news-analysis/cpcb-notifies-contaminated-sites" target="_blank" rel="noopener"><strong>Central Pollution Control Board</strong></a>, <strong><a href="/daily-updates/daily-news-analysis/upgradation-and-expansion-of-zoos-in-ppp-mode" target="_blank" rel="noopener">Central Zoo Authority</a> (CZA)</strong>, <strong><a href="/daily-updates/daily-news-analysis/national-tiger-conservation-authority" target="_blank" rel="noopener">National Tiger Conservation Authority</a> (NTCA)</strong>, <a href="/daily-updates/daily-news-analysis/sixth-national-report-to-the-convention-of-biological-diversity" target="_blank" rel="noopener"><strong>National Biodiversity Authority</strong></a> should continue to function under and with the financial support of MoEFCC.<br />
<ul style="list-style-type: disc;">
<li>These bodies should be encouraged to become &lsquo;self-financed&rsquo;.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Appreciation:</strong><br />
<ul style="list-style-type: circle;">
<li>This is the <strong>first time ever that such an audit has been done</strong> of institutions which took around four years to get completed.</li>
<li>Making WII and other institutions into deemed universities will <strong>give more freedom to the institutions</strong> to initiate more courses and have enhanced faculties.</li>
</ul>
</li>
<li><strong>Criticism:</strong><br />
<ul style="list-style-type: circle;">
<li>The disengagement will make these institutions <strong>worry for financial issues rather than research,</strong> which should be their prime focus.<br />
<ul style="list-style-type: disc;">
<li>The environment is a public issue and there must be good public institutions to safeguard it.</li>
</ul>
</li>
<li>The government&rsquo;s disengagement from these institutions is seen as <strong>&lsquo;the first step towards sending them into private hands&rsquo;.</strong><br />
<ul style="list-style-type: disc;">
<li>If the government feels that funds are not being utilised properly or the institutions are not performing well, their officials should be held accountable rather than taking the route of disengagement as this will have an impact on those students who dream of studying these specialised subjects but cannot afford the high fees charged by private universities.</li>
</ul>
</li>
</ul>
</li>
<li><strong>Other Related Steps:</strong><br />
<ul style="list-style-type: circle;">
<li>Recently, the<strong> Ministry of Textiles</strong> has <a href="/daily-updates/daily-news-editorials/national-handloom-day-announcements-challenges-ahead" target="_blank" rel="noopener"><strong>abolished the All India Handloom Board and the All India Handicrafts Board.</strong></a></li>
<li>In <strong>2018,</strong> the Union Cabinet had approved the proposal for<strong> closure of Autonomous Bodies,</strong> namely, <strong>Rashtriya Arogya Nidhi (RAN)</strong> and <strong>Jansankhya Sthirata Kosh (JSK)</strong> and the functions were proposed to be vested in Department of Health &amp; Family Welfare (DoHFW).</li>
</ul>
</li>
</ul>
<div class="border-bg">
<p><strong>Autonomous Bodies</strong></p>
<ul style="list-style-type: square;">
<li>These are <strong>set up</strong> whenever it is felt that certain functions need to be discharged outside the governmental set up with some amount of independence and flexibility without day-to-day interference of the Governmental machinery.</li>
<li>These are set up<strong> by the Ministries/Departments concerned with the subject matter</strong> and are funded through grants-in-aid, either fully or partially, depending on the extent which such institutes generate internal resources of their own. <br />
<ul style="list-style-type: circle;">
<li>These <strong>grants are regulated by the Ministry of Finance</strong> through their instructions as well as the instructions relating to powers for creation of posts and etc.</li>
<li>The amount disbursed to autonomous/grantee bodies was Rs. 799.55 billion, which,<strong> in 2019-20, was increased</strong> to Rs. 943.84 billion.</li>
</ul>
</li>
<li>They are mostly registered as societies under the Societies Registration Act, 1860 and in certain cases they have been set up as statutory institutions under the provisions contained in various Acts.</li>
<li>These are a <strong>major stakeholder in the government&rsquo;s functioning</strong> as they are engaged in diverse activities, ranging from formulating frameworks for policies, conducting research, and preserving the cultural heritage, etc. <br />
<ul style="list-style-type: circle;">
<li>Institutes imparting technical, medical and higher education fall in this category.</li>
</ul>
</li>
</ul>
</div>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>There is a need to review the governance of ABs, and devise uniform procedures. Many of ABs act as interfaces between the government and the public. Thus, each ministry should undertake a comprehensive review of ABs under their jurisdiction. ABs that have outlived the cause for which they were established may need to be closed or merged with a similar organisation or their memorandum altered as per the new charter.</li>
</ul>
<p><a href="https://indianexpress.com/article/india/govt-suggests-disengaging-wii-iifm-three-other-premier-green-institutions-6793717/" target="_blank" rel="noopener"><strong>Source: IE</strong></a></p>',
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