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NATIONAL MULTIDIMENSIONAL POVERTY INDEX: NITI Aayog released a discussion paper titled ‘Multidimensional Poverty in India since 2005-06’.

About Multidimensional poverty 

• It refers to a measure that considers various factors or dimensions beyond income to assess and understand poverty. 
• Multidimensional poverty encompasses the various deprivations experienced by poor people in their daily lives – such as poor health, lack of education, inadequate living standards, poor quality of work, the threat of violence, among others.
  • Ending poverty in all its forms everywhere, the aim of Sustainable Development Goal (SDG) 1, entails viewing poverty not solely in relation to income and consumption, but as relating to other multiple capabilities. 

Measurement of multidimensional poverty: 

• The Multidimensional Poverty Index (MPI) assesses poverty at the individual level. Alkire-Foster Method is most often used to compute MPIs. 
• Global MPI (GMPI): It is a globally recognized comprehensive measure that captures poverty in multiple dimensions beyond monetary aspects.
  • GMPI Report was first released by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP) since 2010. 
  • It covers 100 developing countries and captures the acute deprivations in health, education, and living standards that a person faces simultaneously. 
  • If a person is deprived in a 1/3rd or more of ten (weighted) indicators, the GMPI identifies them as ‘MPI poor. 
• National MPI (NMPI): It retains the 10 original indicators of the global MPI model and has added two indicators, viz., Maternal Health and Bank Account, in line with India’s national priorities.
  • MPI value is arrived at by multiplying the headcount ratio (H) and the intensity of poverty (A), reflecting both the share of people in poverty and the degree to which they are deprived. 
  • Headcount ratio (H): It indicates proportion of multidimensionally poor in the population. 
  • Intensity of poverty (A): It indicates average proportion of deprivations which is experienced by multidimensionally poor individuals. 
  • Under the government’s Global Indices for Reforms and Growth (GIRG) initiative, NITI Aayog is the nodal agency for MPI.
    • GIRG monitors India’s performance on various important social and economic parameters. 
  • NITI Aayog uses National Family Health Survey (NFHS) to measure the NMPI.
    • The latest NMPI, ‘National Multidimensional poverty: A Progress Review -2023’ is based on the data of NFHS 4 and 5. 

UNIFIED PAYMENTS INTERFACE (UPI):  the Reserve Bank of India (RBI) has announced new rules and regulations to enhance the scope of Unified Payments Interface (UPI) payments.  

About new rules 

Enhancing UPI transaction limit: 

• The transaction limit for UPI payments made to hospitals and educational institutions has been hiked to Rs 5 lakh from Rs 1 lakh earlier. 
• Transaction limit for UPI is capped at Rs. 1 lakh, except in a few categories like Capital Markets (Broking, Mutual Funds, etc.), Collections (Credit card payments, Loan re-payments, EMI), Insurance etc. where transaction limit is Rs. 2 lakhs. 
• Increased e-Mandates for Recurring Online Transactions: Limits for execution of e-mandates without Additional Factor of Authentication (AFA) increased from Rs 15,000 to Rs 1 lakh for credit card bill payments, mutual fund subscriptions and insurance premiums. 

About National Payments Corporation of India (NPCI)

• NPCI is an umbrella organization for operating retail payments and settlement systems in India.
• It is an initiative of RBI and Indian Banks’ Association (IBA) under provisions of Payment and Settlement Systems Act, 2007.
• It has been incorporated as a “Not for Profit” Company under provisions Section 8 of Companies Act 2013.
• It has launched payment products such as RuPay card, IMPS, UPI, BHIM, BHIM Aadhaar, Bharat BillPay etc

About Unified Payments Interface (UPI) and its Features 

• UPI powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features e.g., transfer of funds, etc. 
• It was developed by NPCI in 2016 and built over Immediate Payment Service (IMPS) infrastructure. 
• It is the most successful real-time payment system globally, providing simplicity, safety, and security in person-to-person (P2P) and person to-merchant (P2M) transactions in India. 

New Features of UPI 

• Credit Line on UPI: It enables pre-sanctioned credit lines from banks via UPI. Earlier, only the deposited amount could be transacted through the UPI System. 
• UPI Lite X: Users can both send and receive money offline through any compatible device that supports Near Field Communication (NFC). 
• UPI Tap & Pay: It allows NFC-enabled QR codes at merchants to complete payments, with a single tap without entering the PIN.

Near Field Communication (NFC) is a short-range wireless connectivity technology that transmits data through electromagnetic radio fields to enable two devices to communicate with each other.

Initiatives to promote UPI 

• UPI for secondary market: Introduced by NPCI to enhance the ease of equity trading in country. 
• UPI Chalega Campaign: Launched by NPCI to promote UPI as an easy, safe, and instant mode of payment. It also educates users about various features such as UPI LITE that enables swift low value transaction. 
• MoU between Google India Digital Services and NPCI International Payments: To broaden use of UPI payments, enabling travellers to make transactions abroad and ease remittances process between countries.
• India’s UPI in overseas markets: Various countries like Oman, UAE, France, Nepal, Bhutan etc. are using UPI system for payment. 
• UPI 123PAY: It is an instant payment system for feature phone users who can use UPI payment service in a safe and secure manner.

NON- PERFORMING ASSETS (NPA):RBI’s annual Trend and Progress of Banking in India report for the financial year 2022-23, showed that the gross non-performing assets (GNPA) ratio fell to 3.9 per cent in 2022-23

Reasons for Non-Performing Assets  

• Defective Lending Process
• Willful Defaults: 
• Industrial sickness:
• Regulatory violation
• Frauds by banker and borrower

About Non- Performing Assets (NPA) 

• Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act): It allows secured creditors to take possession of collateral, against which a loan had been provided, upon a default in repayment. 
• A NPA refers to a classification for loans or advances of a bank that are in default or arrears.
  • A loan is in arrears when principal or interest payments are late or missed and becomes an NPA when the interest and/ or instalment of principal remain overdue for more than 90 days. 
  • GNPAs are the sum of all loan assets that are classified as NPAs. 
• Debt Recovery Tribunals: Established under the Recovery of Debts and Bankruptcy Act, 1993 provide for the establishment of Tribunals for expeditious adjudication and recovery of debts. 
• Insolvency and Bankruptcy Code (IBC), 2016: For reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner i.e. within 180 days or the extended period of 90 days. 
• National Asset Reconstruction Company (NARCL): It aims to reduce NPAs of banks, improving financial system stability and efficiency. o It is incorporated under the Companies Act 2013 with PSBs holding a majority stake. 
• Indradhanush plan for revamping PSBs, envisaging infusion of capital in PSBs. 

NPAs Classification

• Substandard assets: NPA for a period less than or equal to 12 months
• Doubtful assets: Remained in the sub-standard category for more than 12 months
• Loss assets: Loss had been identified by the Company or by the internal or external auditor or by RBI, but the amount had not been written off wholly.

G-SECURITIES: Recently, the Reserve Bank of India (RBI) has permitted the lending and borrowing of G-Securities (G-Secs) by issuing directions called RBI (Government Securities Lending) Directions, 2023. 

About G-Securities (G-Secs) 

• G-Sec is a tradeable instrument issued by Central or State Governments. It acknowledges the government’s debt obligation.
  • Such securities are short-term terms usually called Treasury bills (T Bills) with maturities of less than one year (91 days, 182 days, or 364 days) or long-term called Government bonds or dated securities with maturity of one year or more (between 5 years and 40 years). 
  • In India, Central Government issues both T bills and bonds or dated securities while State Governments issue only bonds or dated securities, which are called State Development Loans (SDLs). 
  • G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments. 
• Other G-Sec includes Cash Management Bills (CMBs), introduced in 2010, a new short-term instrument to meet temporary cash flow mismatches of the Government. o CMBs have the generic character of T-bills but are issued for maturities of less than 91 days. 
• G-Secs are issued through auctions conducted by RBI. Auctions are conducted on the electronic platform called the E-Kuber, the Core Banking Solution (CBS) platform of RBI.

Benefits of G-Secs

• Low-risk investments since they are backed by Government
• Stable source of income as they offer fixed interest rates
• Securities such as State Development Loans (SDLs) and Special Securities (Oil bonds, UDAY bonds etc) provide attractive yields.
• Integrating G-Secs in a diversified investment portfolio can help reduce overall risk
• Easily tradable in market, which means that investors can buy and sell them quickly
• Used as collateral to borrow funds in the repo market

T-bills are zero coupon securities and pay no interest. Instead, they are issued at a discount and redeemed at the face value at maturity.Dated G-Secs are securities which carry a fixed or floating coupon (interest rate) which is paid on the face value, on a half-yearly basis.

Initiatives taken for Government -Securities (G-Secs) 

• G-sec Acquisition Programme (G-SAP): Under it, RBI conducts open market operations to purchase G-Secs from the market.
  • It helps the central bank in controlling excessive volatility faced by market participants in G-Secs market. 
• RBI Retail Direct Scheme: Under this, retail investors will have the facility to open and maintain ‘Retail Direct Gilt Account’ (RDG Account) with RBI to access its G-Sec platform. 
• Scheme for Non-competitive Bidding Facility in Auctions of G-Secs: 

PETROLEUM EXPLORATION & PRODUCTION Oil and Natural Gas Corporation (ONGC) has started first crude oil production from its Cluster-2 deep-sea project in the Krishna-Godavari (KG) basin in the Bay of Bengal.

 

Petroleum basin in India 

• A petroleum basin includes a diverse collection of rocks and sediments, but most importantly it contains source rocks.
  • Source rocks are specific shale formations in a basin where oil and gas are born. 
  • There are 26 sedimentary basins in India, covering a total area of 3.4 million square kilometer. • Of the total sedimentary area, 
• ONGC is India’s largest oil and gas producer contributing 72% of the country’s hydrocarbon production. 

Steps taken for enhancing Petroleum E&P 

• Directorate General of Hydrocarbons (DGH) was formed to promote sound management of the oil and natural gas resources. 
• Approval processes have been streamlined by digitization and standardization contractual of submissions on the e-platform. 
• National Data Repository (NDR), launched for public in 2017, serves as a government data bank promoting E&P activities. 
• Upgrade of the NDR to a cloud-based, state-of-the art facility with virtual data rooms is in progress for investors for 24×7 access to E&P data. 
• As per India Hydrocarbon Vision 2025, lays the broad contours/targets for the development of Hydrocarbons. 
• 100% automatic FDI through route for exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, etc.
• National Seismic Programme (NSP) aims to undertake a fresh appraisal in all sedimentary basins across India.  

Data on Oil and gas Market of India 

• 3rd largest energy and oil consumer in the World
•  33% share of Oil and gas in India’s primary energy
• 85.7% was the import dependency of oil while for natural gas it was 48.2%.

Significance of Indigenous Petroleum Exploration and Production

• Reduction in import bill: As India imports about 85% of its crude oil requirement, indigenous petroleum production will reduce trade deficit.
• Strategic Importance: Reduces vulnerability to geopolitical uncertainties, supply disruptions, and price fluctuations in the global market.
• Revenue generation: Indigenous petroleum production contributes to government exchequer through taxes, royalties, and profit-sharing agreements.
• Employment Generation Jobs across a range of activities, including exploration, production, refining, and distribution.

About HELP 

• HELP introduced in 2016, replaced New Exploration Licensing Policy (NELP). 
• Provides for a Single license for E&P for all types of hydrocarbons viz. conventional oil and gas, CBM, shale oil, gas hydrates, etc. 
• Shifted from the previous profit-sharing model to a Revenue Sharing Contract model (i.e., revenue is shared between the government and the contractor).
  • In profit-sharing model, the profit was shared after cost recovery. 
• OALP was introduced enables investors to select blocks of their choice by evaluating data in the NDR and expressing interest. 
• Reduced royalty rates, marketing and pricing freedom, round-the-year bidding, etc. 

 Unconventional Petroleum Resources 

• Oil and natural gas trapped in less permeable rocks is referred to as an unconventional resource because it cannot be explored, developed and produced by conventional processes.
  • “Conventional resources” is a term referring to oil and natural gas trapped in rock that is porous and permeable.
    • The natural pressure of the underground rock formation allows oil and natural gas to flow freely up a petroleum well. 
• These include deposits like:
  • Coalbed Methane (CBM) or Coal Seam Gas (CSG): Refers to methane rich gas naturally in coal seams typically comprising 80% to 90% methane with lower proportions of ethane, propane, nitrogen, and carbon dioxide. 
  • Shale gas/oil: It is a form of natural gas/oil that remain unexpelled, unmigrated, and entrapped within the pore space and fractures of a source rock (commonly, shale). 
  • The shale gas/oil is produced commercially when sufficient fracture conductivity is induced by hydraulic fracturing. 
  • Gas hydrates: These are naturally occurring ice-like solids (clathrates) in which water molecules trap gas molecules in deep-sea sediments and in and below the permafrost soils of the polar regions.  

FOOD PROCESSING INDUSTRY

What is Food processing? 

• Food processing is the set of methods and techniques which are used to transform raw ingredients into finished and semi finished products. 
• According to Ministry of Food Processing Industries (MoFPI), if any raw product of agriculture, animal husbandry or fisheries is transformed in such a way that
  • Its original physical properties undergo a change, 
  • The transformed product is edible and 
  • Has commercial value, then it comes within the domain of Food processing Industry (FPI) 

Institutional Measures 

• Agricultural and Processed Food Products Export Development Authority (APEDA) has been established as per APEDA Act, 1985 for development of export by providing financial assistance, fixing of standards, improving packaging etc 
• The Marine Products Export Development Authority (MPEDA) is a statutory body entrusted with the primary task of promotion of export of marine products. 
• Indian Institute of Packaging (IIP) develops standards for export packaging fruits & vegetables. 
• The Export Inspection Council (EIC) is the official export certification body having global acceptance which ensures quality and safety of products exported. 
• Agriculture Export Policy (2018) has been introduced with the objectives of doubling India’s share in world agri exports by integrating with global value chains. 

Initiatives taken by Government 

• Pradhan Mantri Kisan Sampada Yojana (PMKSY): It is an Central sector scheme for development of Mega Food Parks, Integrated Cold Chain and Value Addition Infrastructure, Food Safety and Quality Assurance Infrastructure etc 
• Pradhan Mantri Formalization of Micro Food Processing Enterprises Scheme (PMFME Scheme) aims at upgradation of micro Food processing units, providing seed capital to SHGs, branding and marketing support
  • One District One Product (ODOP) component of PMFME aims to create specific product clusters. 
• Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) is a central sector scheme to support creation of global food manufacturing champions and support Indian brands in the international markets. 
• Liberalised FDI regime: 100% FDI through automatic route for FPIs and 100% FDI through government-approval route for retail trading, including through e-commerce. 
• Krishi Udan and Krishi Rail schemes have been launched to ease out freight rates enabling smooth movement of perishables

PRADHAN MANTRI GRAM SADAK YOJANA :A parliamentary panel has asked the Union Rural Development Ministry to tighten the supervision of road construction in rural areas under the PMGSY, indicating the use of poor-quality materials. 

About Pradhan Mantri Gram Sadak Yojana 

• It started as a 100 % centrally sponsored scheme launched in the year 2000 to provide all-weather rural road connectivity to eligible rural habitations. 
• Ministry: Ministry of Rural Development 
• Eligibility: Population size >500 in plain areas and >250 in hills and other difficult areas. 
• Funding Pattern: The funding pattern was revised to a 60:40 ratio between Centre and State in 2015-16, and a 90:10 ratio for Northeastern States and Himalayan States. 
• The scheme has four verticals, (i) PMGSY I, (ii) PMGSY II, (iii) Road Connectivity Project for Left Wing Extremism Areas (RCPLWEA), and (iv) PMGSY III.
  • PMGSY I (2000): It was launched to provide rural connectivity, by way of a single all-weather road, to the eligible habitations as per Census 2001. 
  • PMGSY-II (2013): It was launched with a target to upgrade 50,000 Km in various States and Union Territories. 
  • Road Connectivity Project for Left Wing Extremism Affected Areas (RCPLWEA) (2016): It was launched for construction and upgradation of strategically important roads; mainly to improve the road connectivity in left wing extremism affected districts and adjoining areas.
  • PMGSY-III (2019): It was launched for consolidation of 1,25,000 Km to connect major rural links connecting habitations, inter-alia, to Gramin Agricultural Markets (GrAMs), Higher Secondary Schools and Hospitals.

INDIA BECOMES FOURTH-LARGEST STOCK MARKET :India overtakes Hong Kong to become the world’s fourth-largest stock market. Top three stock markets are the US, China, and Japan. 

• According to data compiled by Bloomberg, the combined value of shares listed on Indian exchanges reached USD 4.33 trillion, versus USD 4.29 trillion for Hong Kong, on Jan 22, 2024. 
• Stock market is where investors, both individual and institutional, trade a wide range of securities such as stocks, bonds, Exchange Traded Funds (ETFs), derivatives, etc. 

Two types of stock market: 

• Primary Market: New shares, bonds, etc., are offered for the first time. 
• Secondary Market: Existing securities (equities, bonds, etc.) are traded. e.g., Stock exchanges like Bombay Stock Exchange. 

Regulation of Stock markets in India 

• Securities and Exchange of Board of India (SEBI): Regulates different market intermediaries like stock brokers, stock exchanges, etc. o SEBI is a statutory body under SEBI Act, 1992. 
• Reserve Bank of India (RBI): Regulates Government Securities market, etc. 

DIRECT LISTING OF PUBLIC INDIAN COMPANIES 

• Centre allowed direct listing of public Indian companies on international exchanges of GIFT International Financial Services Centre (GIFT-IFSC). This was enabled by:
  • Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024 and 
  • Amendment to Foreign Exchange Management (Non-debt Instruments) Rules, 2019.
    • Direct Listing Scheme of FEMA rules 2019 provides framework for issuing and listing of equity shares of public Indian companies on international exchanges. 
    • Prior to this, Indian companies were not allowed to issue or list equity shares abroad. 
• Expected benefits: Give Indian companies access to cheaper foreign capital, boost foreign investment, etc. 

AADHAAR-BASED MANDATORY FOR MGNREGA PAY 

• Recently, Aadhaar-based payment system (ABPS) became mandatory for MGNREGS workers. 
• Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) gives a legal guarantee of a hundred days of wage employment in a year to adult members of a rural household willing for unskilled manual work. 
• MGNREGS has utilized APBS since 2017 and is made mandatory now (from 1st January).
  • Government may consider exemption on a case to-case basis if any Gram Panchayat has either a technical problem or an Aadhaar-related problem. 
• ABPS working 
  • ABPS uses the worker’s unique 12-digit Aadhaar number as their financial address. 
  • To be paid under ABPS,
    • A worker’s Aadhaar details must be seeded to her job card; 
    • Her Aadhaar details must be seeded to her bank account; 
    • Her Aadhaar must be mapped with the National Payments Corporation of India (NCPI) database. 
• Significance of the move
  • Curbing corruption by weeding out fake beneficiaries. 
  • Will ensure speedy payments and reduce rejection (due to change of bank account of beneficiaries). 

Other Changes To Make MGNREGS Efficient

• National Mobile Monitoring System (NMMS) app for attendance of MGNREGS workers
• SECURE application for estimating preparation and approval for MGNREGS works
• Geo-MGNREGA for geo-tagging of all completed works
• Project “UNNATI” to upgrade the skill base of the MGNREGS workers

More than 1100 government schemes and programs run by Center and States have been notified to use Aadhaar. 

• Pradhan Mantri Ujjwala Yojana 
• Pradhan Mantri Awas Yojna 
• Pradhan Mantri Fasal Bima Yojana 
• Atal Pension Yojana

 16TH FINANCE COMMISSION 

• It was constituted with the approval of the President of India in pursuance of Article 280(1) of the Constitution. 
• The government appointed Arvind Panagariya (former vice-chairman of NITI Aayog) as the chairman and members would be notified separately. 
• The Commission’s work involves redressing the vertical imbalances between the taxation powers and expenditure responsibilities of the center and the States respectively and equalization of all public services across the States. 
• The commission shall make recommendations on the following
  • Distribution between the Union and States of the net proceeds of taxes and allocation between the States of such proceeds. 
  • Principles for governing the grants-in-aid and revenues of the state under Article 275 of the Constitution. 
  • Measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities based on state finance commission recommendation. 
  • The commission may review present arrangements for financing Disaster Management initiatives, concerning the funds constituted under Disaster Management Act, 2005. 
• The 16th FC recommendations, upon acceptance by the government, would cover the period of five years commencing April 1, 2026.

15th Finance Commission (chaired by NK Singh)

• Set up in 2017, made recommendations for 2020-21 and 2021-22 to 2025-26
• For vertical devolution, the share of states in central taxes is to be 41%.
• Suggested to reduce fiscal deficit to 4% of GDP by 2025-26
• Gave six Criterias for horizontal devolution

DIRECT TAX TO GDP RATIO ROSE TO 15-YEAR HIGH:Direct Tax to GDP ratio rose to 15-year high in FY23 Central Board of Direct Taxes data shows. 

• Key highlight: 
• Direct Tax to GDP ratio reached a 15-year high at 6.11% of GDP in FY23. 
• Direct Tax to GDP ratio gives an estimate of a country’s ability to mobilise resources to fuel its development. ○ Tax Buoyancy, however, declined from 2.52 to 1.18 compared to the previous year. ✓ Tax buoyancy indicates the measure of efficiency or responsiveness in tax collection in response to the growth in GDP. ▪ Tax revenues are considered as buoyant when they increase more than proportionately in response to the increase in GDP even when the rates of taxes remain unchanged. ✓ The recent decline indicates that the current economic growth did not lead to as much of an increase in direct tax collections for FY 23 as seen in FY22. ○ Gross direct tax collections increased by over 173% to Rs 19.72 trillion in FY23 from Rs 7.22 trillion in FY14. 

Initiatives prompting rise in Direct Tax to GDP 

• Corporate tax rate has gradually decreased since the Finance Act of 2016. 
• Phasing out of exemptions and incentives for the corporate sector. 
• Vivad se Vishwas Scheme for reducing litigations in the direct tax payments. 
• Finance Act of 2020 allows individual taxpayers to pay income tax at lower slab rates by forgoing specified exemptions. 
• Other reforms: Aadhaar – PAN linkage, digital technology (Faceless Assessment, Faceless Appeal) to improve tax administration, Taxpayers Charter, etc. 

About direct tax 

• In India, the primary direct taxes at the central level are personal and corporate income taxes, governed by the Income Tax Act of 1961. 
• However, India’s tax-to-GDP ratio is comparatively low, ranking much lower than other countries.
  • For instance, OECD countries typically have an average tax-to-GDP ratio exceeding 30%. 
• The dominance of the informal sector, tax evasion, exemptions and incentives, etc. are key reasons for low ration in India. 

REVERSE FLIP: Many Startups are reverse flipping i.e. moving their overseas holding entities to India. 

• Reverse flipping’: It is a term used to describe the trend of overseas start-ups shifting their domicile to India and listing on Indian stock exchanges. 
• Reasons for Reverse Flipping:
  • Capitalise on India’s large and growing economy 
  • Access to deeper pools of venture capital 
• The Economic Survey 2022-23 recognized the concept of reverse flipping and proposed ways to accelerate the process, such as simplifying corporate laws and capital movements, simplification of taxation, etc

MOMENTUM INVESTING 

Many academic studies have shown that momentum investing can generate high returns. 

About Momentum Investing 

• It refers to a style of investing wherein investors purchase assets such as stocks or bonds that are consistently rising in price, while selling assets whose prices are falling.
  • Momentum investor hope that the upward price momentum of these assets would continue, thus allowing them to sell these assets at higher prices in the future to make profits. 
  • The buy high, sell higher philosophy of momentum investing is in stark contrast to the traditional approach of buy low, sell high.

INDIAN IRON ORE MARKET 

Competition Commission of India (CCI) published a study examining competition in the iron ore market. 

• Iron ore is predominantly composed of iron oxides called magnetite and hematite and yields metallic iron (Fe) when heated with a reductant. 
• CCI study shows India’s self-sufficiency in iron ore production, contributing 7% globally and ranking as the 4th largest producer. 

Concerns raised by CCI 

• Recent years have seen increase in iron ore exports (iron ore has low value as compared to finished products like Steel). 
• Allocation of captive mines (owned by companies for self -use) to some players creates entry barriers. 
• Mines and Minerals (Development and Regulation) Amendment Act, 2021 allows the captive mines to sell up to 50% of surplus iron ore in the open market. 
• Differential pricing of iron ore for different end users is likely to create competition concerns.  

Key Recommendation:

• Discourage export: Iron ore is a non-renewable national resource and crucial to various industries.
  • Prioritise the export of higher value-added products such as finished steel to promote Atmanirbhar Bharat. 
• Upgrade quality: Use cutting-edge technologies to upgrade low-grade iron ore to higher grades. 
• Sustainable mining: Promote clean technology adoption and transformation of production processes into sustainable mineral production modes

BHARATMALA PHASE 1 EXTENDED 

• Bharatmala Phase 1 deadline extended by Six years to 2027-28. 
• Bharatmala Pariyojana, launched under Ministry of Road Transport & Highways, is an umbrella program for highways sector. O

Objectives of Bharatmala Pariyojana 

• Optimize efficiency of freight and passenger movement across country by bridging critical infrastructure gaps. 
• Improving connectivity in North East. 
• Improving efficiency of existing corridors through development of Multimodal Logistics Park. 

Features of Bharatmala Pariyojana 

• Satellite mapping of corridors to identify upgradation requirement. 
• Technology-based automated traffic surveys of over more than 1,500 points. 
• Origin-Destination study of freight movement across 600 districts.

Components of Bharatmala Phase-1

• Economic Corridors (9000 km): To unlock full economic potential
• Inter Corridor and Feeder Route (6000 km): Ensuring holistic connectivity
• National Corridors Efficiency Improvement (5000 km): Enhancing efficiency
• Border Roads and International Connectivity (2000 km): Boosting Border Connectivity
• Coastal Roads and Port Connectivity (2000 km): Leveraging Ports for Progress
• Green field Expressways (800 km): Express speeds for Express gains
• Balance NHDP works (10,000 km): Boosting all round connectivity

2023 LIST OF D-SIBS 

• Reserve Bank of India (RBI) releases 2023 list of Domestic Systemically Important Banks (D-SIBs). 
• D-SIBs are systemically important due to their size, cross-jurisdictional activities, complexity and lack of substitute and interconnection. o It also means that the bank is too big to fail. 
• India’s D-SIB’s are State Bank of India (bucket 4) and HDFC Bank (bucket 2), ICICI Bank (bucket 1).
• D-SIBs have to maintain Additional Common Equity Tier 1 (CET1) requirement as a percentage of Risk Weighted Assets (RWAs). 
• In case a foreign bank having branch presence in India is a Global Systemically Important Bank (G-SIB), it has to maintain additional CET1 capital surcharge.
  • Financial Stability Board (FSB) releases the list of G-SIBs. 

 PAYMENTS INFRASTRUCTURE DEVELOPMENT FUND (PIDF) SCHEME 

RBI extends Payments Infrastructure Development Fund (PIDF) Scheme till 2025. 

About PIDF Scheme 

• It was first operationalized in 2021 for three years. 
• Aims to encourage deployment of payment acceptance infrastructure such as physical Point of Sale (PoS) terminals, Quick Response (QR) codes, in tier-3 to tier-6 centres, North eastern states and UTs of J & K and Ladakh.
  • It was extended to street vendors covered under PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi Scheme) in Tier-1 and Tier-2 centres. 
• PIDF is governed through an Advisory Council and managed and administered by RBI. 
• Types of Acceptance Devices Covered: Physical PoS, mPoS (mobile PoS), GPRS (General Packet Radio Service), PSTN (Public Switched Telephone Network) etc. 

To widen the scope of beneficiaries and acceptance infrastructure, following enhancements are being made under the scheme: 

• Beneficiaries of PM Vishwakarma Scheme in all centres included as merchants under PIDF Scheme. 
• Sound Box devices and Aadhaar-enabled biometric devices are eligible for claim of subsidy under Scheme. 
• Subsidy for special focus areas has been made uniform at 90% of the cost of device, irrespective of the type of device.

Other Initiatives to Promote Digital Payments

• Aadhar Enabled Payment System allows individuals to conduct financial transactions on a Micro-ATM using Aadhar
• Aadhar Payment Bridge System allows ease in bulk and recurring Government benefits and subsidy payments
• Unified Payments Interface introduced as single platform merging various banking services and features under one umbrella
• Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA) to usher in digital literacy

NATIONAL TRANSIT PASS SYSTEM (NTPS) :Union Minister launches National Transit Pass System (NTPS)-‘One Nation-One Pass’. 

• It is under the Ministry of Environment, Forest and Climate Change to facilitate the seamless transit of timber, bamboo, and other Minor Forest Produce (MFP) across the country.
  • Currently, transit permits are issued for the transport of timber and forest produce based on state-specific transit rules. 
• NTPS enables managing records for both inter-state and intra-state transportation of timber, bamboo, and MFP from private lands/government/private depots.
  • States have exempted some species grown on private land from the purview of transit permits, to transport these species No Objection Certificate is provided. 

Benefits of NTPS: 

• Will contribute to ease of doing business by streamlining the issuance of transit permits by providing a unified, online mode across the country.
• Provide a significant impetus to the agroforestry sector.
  • Saving transportation costs and time, and Seamless movement across state borders. 
• Under the Forest Rights Act (FRA) of 2006, MFP includes all non-timber forest produce of plant origin including bamboo, brushwood, stumps, etc. 
• The forest dwellers are legally empowered with the ownership and governance of the MFP through the Panchayat Extension to Scheduled Areas Act, 1996, and FRA, 2006.

Other Initiatives To Promote Forest Produce and MFP

• Pradhan Mantri Van Dhan Yojana focuses on developing value chains for forest-based products and enhancing income of tribals.
• Indian Forest and Wood Certification Scheme designed to promote sustainable forest management and agroforestry
• Marketing of MFP through Minimum Support Price (MSP) & Development of Value Chain for MFP.

ATAL SETU NHAVA SHEVA SEA LINK 

• Inaugurated by PM, it is the country’s longest Sea bridge, also referred to as Mumbai Trans Harbour Link. 
• It is a 21.8 Kms long bridge of which 16.5 km is built completely over the Sea. 
• It connects Sewri in Mumbai with Nhava Sheva in Raigad district, thereby easing travel between Mumbai-Navi Mumbai.

STANDARDISATION IN INDIA 

• Standards Development process in India is largely government led with BIS acting as National Standard Body.
  • Established under BIS Act 2016. 
  • Involved in harmonious development of activities of standardization, certification. marking and quality 
  • Administered by Ministry of Consumer Affairs, Food and Public Distribution with its Minister being President of BIS. 

Other initiatives for standards development: 

• Standards National Action Plan (SNAP) 
• Indian National Strategy for Standardization (INSS) 
• Quality Council of India (QCI) and its Scheme for Accreditation of Standards Developing Organizations (SDOs) 
• One Nation One Standard Scheme of BIS. 

Some certification of BIS

• ISI: Used for standard industrial products in India. Mandatory for some products like electronics and voluntary for others.
• BIS Hallmark: Hallmarking system for the sale of precious metal like gold and silver jewellery which certify the purity of the metal.
• ECO Mark: For labeling of environment friendly products.

UREA GOLD:Cabinet Committee on Economic Affairs (CCEA) approved launch of Urea Gold. 

• Urea gold will support the other initiative of government in the sphere of Environmentally Friendly Fertilizers (EFFs). 

Urea gold is a Sulphur-Coated Urea (SCU). 

• It is a non-organic slow-release fertilizer and is generally prepared by coating preheated urea granules with molten sulphur. 
• Sulphur coating ensures a more gradual release of nitrogen.
  • It prolongs the urea action, thus helping plants to stay greener for longer time. 
  • It will increase efficiency and reduce frequent application of fertilizer, thus enhancing soil health. 
• As per Indian Council of Agricultural Research (ICAR) study, use of SCU leads to reduction in urea consumption by 25%. 
• EFFs are fertilizers that can reduce environmental pollution from nutrient loss by retarding, or even controlling, the release of nutrients into soil.
  • EFFs also include organic fertilizers such as Biocompost, Vermicompost, etc.  

Initiatives for EFFs in India: 

• PM PRANAM (Programme for Restoration, Awareness, Nourishment, and Amelioration of Mother Earth) Scheme. 
• Development of Nano Urea and Neem Coated Urea.
  • Pradhan Mantri Kisan Samruddhi Kendras (PMKSK) will facilitate these fertilizers. 
• GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan), helps in preparing organic manure.

Benefits of Environmentally Friendly Fertilizers

• Decrease NO₂ emissions
• Improve water retention and water holding capacity
• Increase organic matter
• Adjust soil pH

PROTECTION OF PLANT VARIETIES AND FARMERS’ RIGHTS ACT 

Under WTO’s TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights), it is obligatory for a member to provide protection to new plant varieties. 

• Under this, India enacted PPVFR Act. 
• A plant variety which conforms to criteria of Distinctiveness, Uniformity and Stability (DUS) is eligible for registration under PPVFR Act. 

PPVFR Act recognizes following rights: 

• Farmers’ rights: Registration and protection of new variety, farmers’ variety, and extant variety, rewards for conservation of plant genetic resources etc.
• Researchers’ rights: Use of any registered variety for experiments. 
• Breeders’ rights: Exclusive rights to produce, sell, import or export etc.  

PPVFR Authority: 

• It is a statutory body under PPVFR Act, established in 2005. 
• Comes under Ministry of Agriculture and Farmers Welfare. 
• Functions include registration of new plant varieties, rewarding farmers engaged in conservation and preservation of plant genetic resources, maintenance of national register of plant varieties and national gene bank.

SOLAR POWER SCHEME FOR PVTGS HABITATIONS :President has sanctioned implementation of the scheme under new solar power Scheme for Particularly Vulnerable Tribal Groups (PVTGs) Habitations/ Villages. 

• The scheme was launched under Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan (PM JANMAN).

Key features of scheme 

• Two components:
  • Electrification of 1 Lakh PVTG households (HHs) through Off-grid solar power
    • Solar Home Lighting System (SHLS) for scattered un-electrified HHs in PVTG areas. 
    • Solar Mini-grids for cluster of HHs in a PVTG habitation/ hamlet.
  •  Solarization of multi-purpose centers (MPCs) by installation of Off-grid Solar power pack with battery bank. 
• Implementing agency: Respective DISCOMs in PVTG area. 
• Timeline: 2023-24 to 2025-26. 
• Monitoring: By Ministry of New and Renewable Energy (MNRE) and Ministry of Tribal Affairs (MoTA). 
• Grievance Redress mechanism: Vendors shall operationalize helpline number in local language/ language of PVTG area. .

PM JANMAN 

• Aim: To saturate PVTG HHs and habitations with basic facilities such as safe housing, clean drinking water and sanitation, improved access to education, etc.
•  Comprises 11 critical interventions through 9 ministries, including MoTA, over 3 years. 

Implemented as combination of: 

• Centrally Sponsored Schemes in partnership with State Governments/ UT Administrations 
• Central Sector Schemes through line Ministries/Departments. 

Particularly Vulnerable Tribal Groups (PVTGs)

• Centrally recognized special categories from among the Scheduled Tribes (STs)
• First recognized in 1975 as Primitive Tribal Groups (PTGs) on recommendations of U N Dhebar Commission
• In 2006, PTGs were renamed as PVTGs, Currently, there are 75 PVTGs.
• Criteria for identifying PVTGs: Pre-agricultural level of technology, Low level of literacy, Economic backwardness, Declining or stagnant population

GLOBAL HYDROGEN TRADING MECHANISM (GHTM) 

• Indian Gas Exchange or IGX (India’s only gas exchange) 
• They will develop a global hydrogen price index, a benchmark for price discovery and market information on India’s growing green hydrogen market. 
• Benefits: Enhance transparency, boost investor confidence, and facilitate the growth of the green hydrogen market on a global scale. 

(NATIONAL PENSION SYSTEM NPS): 

• Introduced by the Central Government in 2004 to help the individuals have income in the form of pension. 
• Any citizen of India, whether resident or NRI, can join NPS. 
• It is mandatory to all employees joining services of the Central Government (except Armed Forces) and Central Autonomous Bodies on or after 1st January 2004. 
• PFRDA regulates NPS under the PFRDA Act, 2013. 

About PFRDA

• Statutory body established under PFRDA Act, 2013
• Objective is to promote old age income security by establishing, developing and regulating pension funds
• Ministry: Ministry of Finance

FUTURE OF GROWTH REPORT: The report, published by the World Economic Forum (WEF). introduces a multidimensional framework to assess the quality of economic growth across 107 countries globally. 

It characterizes nations’ economic growth across four dimensions: 

Innovativeness; Inclusiveness; Sustainability; and Resilience. 

Framework produces an aggregate result for each pillar on a 0-100 scale, where 100 is an ideal and country is perfect in every pillars. 

RULES EXPLORATION LICENSE FOR MINING 

• Ministry of Mines notified four rules to implement the Exploration License (EL) regime. 
• Notified under the Mines and Minerals (Development and Regulation) (MMDR) Act, 1957, these rules include:
  • Mineral (Auction) Amendment Rules, 2024 
  • Mineral Conservation and Development (Amendment) Rules, 2024 
  • Minerals (Evidence of Mineral Contents) Amendment Rules, 2024 
  • Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Amendment Rules, 2024 
• Exploration License (EL): EL means a licence granted for undertaking reconnaissance operations or prospecting operations or both.
  • It was introduced through MMDR Amendment Act, 2023. 
  • Issued in respect of 29 minerals specified in Seventh Schedule of MMRD Act including Cobalt, Lithium, Nickel, Gold, etc.

COAL/LIGNITE GASIFICATION PROJECTS 

Coal gasification 

• Underground Coal gasification is a process by which coal is converted to useful gases without the need for mining.
  • Gases can subsequently be used to produce heat, generate power or synthesize a variety of chemical products. 
  • It helps in harnessing the coal reserves that are deep, scattered and covered by forests. ○ India has a target to gasify 100 million tonnes of coal by 2030. 

STEEL MAKING :Government is aiming to increase share of scrap in steel making process to 50 % by 2047 says Union Minister of Steel. 

Steel Scrap in Steel making 

• Steel is a material most conducive for circular economy as it can be used, reused and recycled infinitely. 
• While iron ore remains the primary source of steel making, used or re-used steel in form of Scrap is secondary raw material for steel industry. 

• Benefits of Steel scrap 
  • Resource Conservation: Use of every ton of steel scrap shall save 1.1 ton of iron ore, 630 kg of coking coal and 55 kg of limestone. 
  • Reduced carbon footprints: Use of scrap cuts emission by 25 % in comparison to primary route of steelmaking.
    • India’s steel sector accounts for 12% of India’s CO2 emissions. 

Recent Steps Taken

• National Steel Policy, 2017: Aspires to achieve 300MT of steel-making capacity by 2030 with a contribution of 35-40% from EAF route.
  • Electric Arc Furnaces (EAF) route produce steel mostly from scrap collected for recycling. 
  • EAF and Blast Furnace-Basic Oxygen Furnace (BF BOF) route are methods of steelmaking. 
• Steel Scrap Recycling Policy, 2019: Enhances availability of domestically generated scrap to reduce consumption of coal in steel making.

Challenges in Reuse of Steel Scrap

• Import Dependency: India relies on imported high-grade steel scrap to meet demand.
• Logistical Hurdles: Difficulties in moving and storing large quantities efficiently.
• Energy-Intensive Processing Concerns: Concerns about ecological footprint of recycling.
• Challenges in Ensuring Quality: Deterioration over time or contaminations of scrap steel poses a significant challenge.

DECLINE IN INDIVIDUAL INCOME INEQUALITY:

• K-shaped recovery happens when different sections of an economy recover at starkly different rates.
  • Many experts have suggested that post the COVID-19 pandemic, India is experiencing a ‘K shaped’ recovery, where the rich thrive while the less privileged face challenges.

About Gini coefficient 

• Gini coefficient is a statistical measure of income or wealth inequality, ranging from 0 (perfect equality) to 1 (perfect inequality).
  • Theoretically, values over 1 are possible due to negative income or wealth. 
  • Gini coefficient larger than 0.40 is considered high.

STATE GOVERNMENT GUARANTEES :A working group constituted by the Reserve Bank of India (RBI) made certain recommendations to address issues relating to guarantees extended by State governments. 

What is a State Government Guarantee? 

• A ‘guarantee’ is a legal obligation for a State to make payments and protect an investor/lender from the risk of default by a borrower. Guarantees are usually sought when the investors/ lenders are unwilling to bear the risk of default. 
• As Per the Indian Contracts Act (1872), it is a contract to “perform the promise, or discharge the liability, of a third person in case of his default.” 
• Article 292 of the Constitution of India extends the executive power of the Union to the giving of guarantees on the security of the Consolidated Fund of India, within such limits, if any, as may be fixed by Parliament. Similar powers are given to States under Article 293. 
• State Governments often issue guarantees on behalf of various PSEs/ Cooperative Institutions/Urban Local Bodies, etc. to various banks/financial institutions for financing developmental schemes/projects. 

Current Status of State Government Guarantees 

• Extent: State-wise guarantee data for the period 2018-21 suggests that outstanding guarantees constituted less than 10 % of their GSDP for the majority of the states. It has, however, been rising over the years for most of the states.
  • The guarantee given by 27 states was 4% of their aggregate GSDP at the end of 2021-22. 
  • For several states, the power sector accounted for the largest share of guarantees. 
• States with a relatively higher outstanding guarantee levels include Sikkim (12.0%), Telangana (12.0%), Andhra Pradesh (10.4%), and Uttar Pradesh (8.8%).
  • Andhra Pradesh has provided significant guarantees to sectors of agriculture and water supply, sanitation, housing and urban development.

Guidelines for Guarantee Policy of Government of India (2022) 

• Guarantees may be given only for principal amount and normal interest component of the underlying loan.
  • The Fiscal Responsibility and Budget Management Act, 2003 prescribe a limit of 0.5% of GDP for guarantees to be given in any financial year (since FY 2004-05).
    • If this limit is exceeded owing to unforeseen circumstances, the Finance Minister is required to make a statement in both Houses of Parliament explaining the deviation. 
• Guarantees may not be extended for external commercial borrowings; 
• State Government may not extend guarantee for more than 80 % of the project loan, depending on the conditions imposed by the lender; 
• Guarantees once approved, shall not be transferred to any other agency without the prior approval of the Finance Department; 
• Government guarantees shall not be provided to private sector companies/ institutions;
• Appropriate pre-conditions may be specified by the Government while giving the guarantees, e.g., period of guarantee. 

INSURANCE SECTOR IN INDIA 

• Insurance penetration: It is measured as the percentage of insurance premium to Gross Domestic Product (GDP). 
• Insurance density: It is calculated as the ratio of premium to population (per capita premium).

Regulation of the Insurance Sector in India 

• Insurance Act 1938: It provides the legislative framework for the functioning of insurance businesses and regulates the relationship between an insurer, its policyholders, its shareholders, and the regulator. 
• Insurance Regulatory and Development Authority of India (IRDAI): It is a statutory body, established under the provisions of the Insurance Regulatory and Development Authority Act, 1999.
  • Its functions include regulation, promotion and ensuring orderly growth of the insurance business and reinsurance business. 
  • It also certifies insurance companies, protects the interests of policyholders, and adjudicates disputes. 

CARD NETWORKS IN INDIA :The Reserve Bank of India (RBI) has ordered a certain card network to stop “unauthorised payments” made using business cards. 

More on the news 

• The RBI said the card network was allowing businesses to make payments to entities that were not authorized to accept card payments and transactions did not comply with KYC norms. 
• The intermediary in the above case pooled a large amount of funds into an account that was not a designated account under the Payments and Settlement System Act, 2007 (PSS Act). 

What is a Card Network? 

• Card networks: They are developed to utilize one mode of payment to pay for goods and services at multiple merchants and avoid carrying cash around.
  • The authorised card networks tie up with banks / non-banks for the issuance of debit/credit/ prepaid cards. 
  • Card networks connect banks, merchants, and customers (card users) so that transactions can be carried out smoothly and securely. 
  • A fee is charged to the businesses by companies that process its debit and credit card transactions (known as Merchant Discount Rate (MDR)). 
• Card Issuer: Banks typically dominate the choice of card networks that will be issued to their customers while providing a Debit or Credit Card and the customers have little choice in the matter.
  • However, RBI has asked card issuers to provide customers the option to choose from multiple card networks from October 1, 2023. 
  • The RBI also said that card issuers should not enter into any arrangement or agreement with card networks that restrain them from taking the service of other card networks. 

National Payments Corporation of India 

• Genesis: NPCI is an initiative of RBI and Indian Banks’ Association (IBA) under the provisions of the PSS Act, 2007, for creating a robust Payment & Settlement Infrastructure in India. 
• Statutory: It has been incorporated as a “Not for Profit” Company under the provisions of Section 25 of Companies Act 1956 (now Section 8 of Companies Act 2013). 
• Products: Payment products developed by NPCI includes-
  • Immediate Payment Service (IMPS), 
  • National Automated Clearing House (NACH), 
  • Aadhaar enabled Payment System (AePS), 
  • Unified Payments Interface (UPI) etc. 

SMART CITIES MISSION (SCM) 

About Smart Cities Mission (SCM) 

• Launch: Centrally Sponsored Scheme launched by Ministry of Housing and Urban Affairs in 2015. 
• Objective: To promote cities that provide core infrastructure, clean and sustainable environment and give a decent quality of life to their citizens through the application of ‘smart solutions’. 
• Smart Cities: 100 cities have been selected for development as smart cities.
  • The timeline of five years for completion of the projects was set between 2019 and 2023. However, the Mission is now extended to June 2024. 
  • Funding: Central Government gives financial support to the extent of Rs.48,000 crore over 5 years i.e. on an average Rs.100 crore per city per year. 
  • An equal amount on a matching basis is being provided by the State/Urban Local Bodies (ULBs), apart from 13 Himalayan and North-eastern States where the sharing ratio has been revised to 90:10. 
  • Additional resources are raised through convergence, from ULBs’ own funds, grants under Finance Commission, innovative finance mechanisms such as Municipal Bonds, other government programmes and borrowings. 
• Public Private Partnership (PPP): Emphasis has been given on the participation of private sector through PPP. 

Core elements of a Smart City:

• Community at the core: Communities at the core of planning and implementation
• More from Less: Ability to generate greater outcomes with the use of lesser resources
• Coorporative & Competitive Federalism: Cities selected through competion: flexibility to implement projects
• Integration, Innovation, Sustainability: Innovating methods: Integrated and sustainable solutions
• Technology as means, not the goal: Careful selection of technology, relavant to the context of cities
• Convergence: Sectorial and Financial Convergence

PRIME MINISTER MEGA INTEGRATED TEXTILE REGION AND APPAREL (PM MITRA) PARKS SCHEME 

PM MITRA Parks Scheme 

• Genesis: It is inspired by 5F vision (Farm to Fiber to Factory to Fashion to Foreign) of Prime Minister to propel India into a leading global hub for textile manufacturing and exports. 
• Main Objectives: 
  • Develop integrated large scale and modern industrial infrastructure facility including plug and play facilities for total value chain of the textile industry. 
  • Reduce logistics costs by housing entire value chain at one location and improve competitiveness of Indian Textiles. 
  • Help India in attracting investments, boosting employment generation and position itself strongly in the global textile market through augmentation of export potential. 

Features of MITRA Parks: 

• To enable scale, the minimum estimated area per MITRA Park is 1,000 acres. 
• MITRA Parks will offer the opportunity to create an Integrated Textiles Value Chain right from spinning, weaving, processing, and printing to garment manufacturing, accessories making at one location. 
• MITRA parks can be either Greenfield or Brownfield. 

Approved 7 PM MITRA Parks 

• The Government has approved setting up of 7 PM MITRA Parks in Greenfield/Brownfield sites to develop world class infrastructure with an outlay of Rs. 4,445 crore in a period of seven years i.e. up to 2027-28.  

PRADHAN MANTRI MATSYA KISAN SAMRIDHI SAH-YOJANA

About the Scheme 

• Central Sector Sub-scheme: The scheme is under the Central Sector Component of the Pradhan Mantri Matsya Sampada (PMMS). 
• Objectives:
  • Gradual formalization of the unorganised fisheries sector. 
  • Facilitating institutional finance to fisheries sector micro and small enterprises. 
  • Providing a one-time incentive to beneficiaries for purchasing aquaculture insurance. 
  • Incentivizing for improving fisheries sector value-chain efficiencies. 
  • Incentivizing for adoption and expansion of fish and fishery product safety and quality assurance systems. 
• Funding: Total outlay of 6000 crore rupees, of which-
  • 50% will come from public finance including the World Bank and the AFD (French Development Agency) external financing and, 
  • 50 % will be contributed by the beneficiaries from the private sector. 
• Duration: The scheme will be implemented for 4 years from FY 2023-24 to FY 2026-27 across all the States and UTs.

Pradhan Mantri Matsya Sampada Yojana (2020) 

• It aims to bring Blue Revolution through sustainable, responsible and holistic development of fisheries sector including welfare of fish farmers. 
• The PMMSY is an umbrella scheme with two separate components:
  • Central Sector Scheme: The entire project/unit cost will be borne by the Central government (i.e. 100% central funding). 
  • Centrally Sponsored Scheme: The entire project/unit cost will be shared between Centre and State. 
• It is being implemented in all the States and Union Territories for a period of 5 years from FY 2020-21 to FY 2024-25 with investment of Rs. 20,050 crore. 
• Targets of PMMSY:
  • Increasing fish production to 22 million metric tons by 2024-25 from 13.75 million metric tons in 2018-19. 
  • Increasing contribution of fisheries sector to the Agriculture GVA to about 9% by 2024-25 from 7.28% in 2018-19. 
  • Doubling export earnings to Rs.1,00,000 crores by 2024-25 from Rs.46,589 crores in 2018-19. 

Intended beneficiaries

• Fishers, Fish (Aquaculture) Farmers, Fish workers, Fish Vendors or such other person directly engaged in fisheries value chain
• Micro and Small enterprises, Cooperatives, Federations, Village Level Organizations like Self Help Groups (SHGs) etc
• Fish Farmers Producer Organizations (FFPOs) and Startups engaged in fisheries and aquaculture value chains. FFPOs also include Farmers Producer Organizations (FPOs)
• Any other beneficiaries that may be included by the Department of Fisheries as targeted beneficiaries

Key facts about India’s seafood and aquaculture industry:

• In the fiscal year 2021-22, India exported US$ 7759.58 million worth of seafood products.
• India is the 4th largest exporter of fish and fisheries products globally.
• India ranks as the 3rd largest country in fish production worldwide.
• India holds the position of 2nd largest aquaculture producer in the world.

FERTILIZERS SECTOR IN INDIA :Ministry of Chemicals and Fertilizers issued guidelines regarding reasonableness of Maximum Retail Prices (MRPs) of Phosphatic and Potassic (P&K) fertilizers under the Nutrient Based Subsidy (NBS) policy. 

About Nutrient Based Subsidy (NBS) Policy

• Objective: Government introduced the NBS policy in 2010 with an aim to provide fertilizers to the farmers at the subsidized prices.
  • It has been approved for implementation up to FY 2025-26. 
• Basis: It has been framed under Fertilizer (Control) Order (FCO), 1985 issued under Essential Commodities Act, 1955.
  • FCO lays down as to what substances qualify for use as fertilizers in the soil, product-wise specifications, procedure for obtaining license/registration as manufacture/dealer in fertilizers and conditions to be fulfilled for trading thereof, etc. 
• Eligibility: NBS is applicable for 25 grades of P&K fertilizers namely, Di Ammonium Phosphate (DAP), Muriate of Potash (MOP), Mono Ammonium Phosphate (MAP), Triple Super Phosphate (TSP), etc.
  • Government announces a fixed rate of subsidy (in Rs. Per Kg basis), on each primary nutrient of subsidized P&K fertilizers, namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S), on annual basis. 
• Subsidy recommendations: Inter-Ministerial Committee (IMC) recommends per nutrient subsidy for ‘N’, ‘P’, ‘K’ and ‘S’ before the start of the financial year for decision by Department of Fertilizers. 

Urea subsidy policy:

• MRP of urea is statutorily fixed by the Government of India.
  • The difference between the delivered cost of fertilizers at farm gate and MRP payable by the farmer is given as subsidy to the fertilizer manufacturer/importer by the Government of India. 
  • Subsidy on urea is paid on dispatch whereas NBS is paid on quantities sold. 

Fertilizer Grade Definition:

• It refers to the guaranteed minimum percentage of three key nutrients in fertilizer material: Nitrogen (N) , Phosphorus (P), Potash (K)

FDI IN SPACE SECTOR 

Government recently relaxed rules to allow 100% foreign direct investment (FDI) in space sector. 

More about News 

• Existing FDI policy in Space sector: Earlier, FDI was permitted in the establishment and operation of Satellites through the Government approval route only. 
• Amended FDI policy:
  • 100% FDI is allowed in space sector in line with the vision and strategy under the Indian Space Policy 2023. 
  • The liberalized entry routes are aimed to attract potential investors to invest in Indian companies in space.

Foreign Direct Investment (FDI) limits for different segments of the satellite sub-sector in India It’s divided into three categories based on the percentage of FDI allowed under the automatic route:

• Up to 100% FDI under Automatic route:
  • Manufacturing of components and systems/sub-systems for satellites, ground segment, and user segment.
• Up to 74% FDI under Automatic route:
  • Satellites-Manufacturing and Operation, Satellite Data Products and Ground Segment & User Segment.
  • Beyond 74%, these activities fall under the government route.
• Up to 49% FDI under Automatic route:
  • Launch Vehicles and associated systems or subsystems, Creation of Spaceports for launching and receiving Spacecraft.
  • Beyond 49%, these activities fall under the government route.

Steps taken by India to support private sector in space 

• Indian Space Association (ISpA): Launched in 2021, it is the apex, non-profit industry body exclusively working towards successful exploration, collaboration, and development of private and public Space Industry in India. 
• Antrix Corporation Limited: Incorporated as a marketing arm of ISRO. It handles ISRO’s commercial deals for satellites and launch vehicles with foreign customers.
•  The Indian National Space Promotion and Authorization Centre (IN-SPACe): An autonomous nodal agency to facilitate private sector engagement in space activities. 
• To encourage private investment, the government has also exempted private launch service companies from paying GST when they launch satellites. 
• India space policy 2023 suggests that the private sector is a critical stakeholder in the entire value chain of the space economy.  

RASHTRIYA UDYAMITA VIKAS PARIYOJANA (RUVP)

Ministry of Skill Development and Entrepreneurship launched RUVP under Skill India Mission. 

About RUVP: 

• Tailored specifically for beneficiaries of PM SVANidhi (Street Vendors AtmaNirbhar Nidhi) scheme. 
• Offers individuals with comprehensive entrepreneurship training (over a period of 22 weeks) combining theoretical knowledge with practical exposure through experiential learning. 
• Focuses on reskilling and upskilling employees to enhance their competitiveness and adaptability. 
• It will be piloted initially in selected districts, with focus on ensuring 40% women participation. 
• Training will be conducted through offline, online and hybrid modes, with certificates awarded upon completion. 

 STARTUPSHALA 

Department for Promotion of Industry and Internal Trade (DPIIT) launched ‘StartupShala’ – Startup India’s flagship accelerator program. 

• Launched in 2016, Startup India is a flagship initiative of DPIIT to support entrepreneurs and build a robust startup ecosystem in India. 
• About StartupShala o Sector-specific initiative for existing entrepreneurs to provide them access to knowledge, network, funds, and guidance required to scale up. 
• Three-month long accelerator program. 
• 2 Cohorts – Clean Technology and Deep Technology. 
• 20 startups will be selected from each cohort. 

EASE OF DOING BUSINESS REFORMS 

Ministry of Corporate Affairs (MCA) Operationalizes Central Processing Centre to facilitate Ease of Doing Business (EoDB). 

• CPC is established for centralised processing of regulatory compliance forms filed under Companies Act and Limited Liability Partnership Act. 
• It will process applications in time bound and faceless manner on lines of Central Registration Centre (CRC) and Centralized Processing for Accelerated Corporate Exit (C-PACE). 
• CRC provides services for speedy incorporation of companies whereas C-PACE provides centralised processing of applications for voluntary closure of companies. 
• EoDB refers to simplicity, efficiency, and cost effectiveness of setting-up, operating, and closure of businesses in a particular territory. 
• Significance of EoDB reforms
  • Economic growth: Through improved resource allocation, enhanced competitiveness to boost innovation, etc. 
  • Foreign investment: Through reduced bureaucratic hurdles, improved transparency to reduce perceived risks for investors, etc. 
  • Social development: By promoting inclusivity and providing opportunities for marginalized communities to participate in economic activities.

Focus areas of EoDB (Ease of Doing Business) reforms. The four main areas are:

• Simplification: This involves streamlining procedures related to applications, renewals, inspections, filing records, and other administrative processes.
• Rationalization: This focuses on repealing, amending, or subsuming redundant laws to create a more efficient legal framework.
• Digitization: This area emphasizes creating online interfaces and eliminating manual forms and records to move towards a more digital process.
• Decriminalization: This involves reducing or removing criminal penalties for minor technical or procedural defaults.

Initiatives taken for EoDB reforms 

• Labour Law reforms: 29 Central Labour Laws amalgamated & rationalized into 4 labour codes. 
• Foreign investment reforms: Foreign Investment Facilitation Portal (FIF Portal), etc. 
• Business Reform Action Plan 2022, for States/ UTs, comprising of two parts –
  • Action Plan A (Business Centric reforms): National Single Window System, etc. 
  • Action Plan B (Citizen Centric reforms): Online Single Window, Certificates, etc. 

REPORT ON FRAMEWORK FOR INSOLVENCY MEDIATION :Expert committee was constituted by Insolvency and Bankruptcy Board of India (IBBI) with T.K. Vishwanathan as Chairperson to examine the scope of using mediation in various processes under the IBC 2016. 

Mediation framework in India 

• The Mediation Act, 2023 aims to facilitate mediation, especially institutional mediation. 
• Provisions in other legislations: Civil Procedure Code, 1908, Companies Act, 2013, Commercial Courts Act, 2015 and Consumer Protection Act, 2019. 
• India is signatory to the Singapore Convention on Mediation. 

SECURITIES TRIBUNAL (SAT) APPELLATE 

Absence of a full bench is affecting functioning of the SAT leading to delays and disruptions. 

About Securities Appellate Tribunal 

• It is a statutory body established under the provisions of Securities and Exchange Board of India (SEBI) Act, 1992. 
• It hears and disposes appeals against orders passed by
  • SEBI 
  • Pension Fund Regulatory and Development Authority (PFRDA) 
  • Insurance Regulatory Development Authority of India (IRDAI) 
• The Presiding Officer and Judicial Members are appointed by the Central Government in consultation with the Chief Justice of India or his/her nominee while Technical members are appointed on recommendation of a Search-cum-Selection Committee

UNIFIED PAYMENT INTERFACE (UPI) 

• Prime Minister of India jointly inaugurated UPI services with Mauritius and Sri Lanka and also RuPay card services in Mauritius. 
• This will boost digital transformation, promote tourism and strengthen bilateral economies ties with both countries. 

About UPI: 

• It powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features e.g., transfer of funds, etc. 
• Developed by National Payments Corporation of India, an initiative of RBI and Indian Banks’ Association under provisions of Payment and Settlement Systems Act, 2007. 

CODEX COMMITTEE ON SPICES AND CULINARY HERBS (CCSCH) 

• 7th Session of the Codex Committee on Spices and Culinary Herbs (CCSCH) Held at Kochi. 

About CCSCH 

• Establishment: CCSCH was established as one of the Commodity Committees under CAC in 2013. 
• Host: India hosts CCSCH since the beginning and Spices Board India (Ministry of Commerce and Industry) serves as the Secretariat organization. 
• Term of reference : 
  • To elaborate worldwide standards for spices and culinary herbs in their dried and dehydrated state. 
  • Consult with international organizations in the standards development process to avoid duplication. 

Codex Standards 

• About: These are international food texts, i.e. standards, codes of practice, codes of hygienic practice, guidelines and other recommendations. 
• Nature: Codex texts are voluntary and do not have binding effect on national food legislation. 
• Codex and WTO: WTO Agreements on Sanitary and Phytosanitary Measures (SPS Agreement) and on Technical Barriers to Trade (TBT Agreement) encouraged WTO members to harmonise national regulations with international standards.

Codex Alimentarius Commission (CAC):

1. Genesis: An international food standards body established jointly by the Food and Agriculture Organization (FAO) and World Health Organization (WHO) in 1963.
2. Objective: Protecting consumer’s health and ensuring fair practices in food trade.
3. Members: 189 Codex Members. The image confirms that India is a member.
4. Functioning: CAC conducts its work through various Codex committees, including CCSCH (likely Codex Committee on Spices and Culinary Herbs), hosted by different member countries.
5. Standards: Codex standards are voluntary and can be general or specific. They are recognized by the World Trade Organization (WTO) as reference standards.

REPORT ON TRANSFORMING FAIR PRICE SHOPS 

• Standing Committee on Consumer Affairs, Food and Public Distribution submits report on ‘Transforming Fair Price Shops (FPSs)’. 

As per the National Food Security Act, 2013, FPS refers to shops licensed to distribute essential commodities to ration card holders under the Targeted Public Distribution System (TPDS). 

• Such license is issued by an order under section 3 of Essential Commodities Act (ECA), 1955. 
• ECA provide for regulating control of production, supply, distribution, and trade of certain commodities in the general public interest. 
• Launched in 1997 TPDS provides for lower subsidised food prices for Below Poverty Line (BPL) families than those for Above Poverty Line (APL) beneficiaries 

Key issues with FPS: Leakages and diversion of food grains, financial non-viability of FPS, etc. 

Recommendations for transforming FPS 

• Increase sales of non-PDS commodities such as Khadi & Ayush products from MSMEs 
• Form a monitoring cell to track the progress of model FPS in all states. 
• Improve working of Vigilance Committees (VCs) established under NFSA.
  • VCs are established by State Governments at the State, District, Block and FPS levels to ensure transparency and accountability of the functionaries in TPDS. 
• Ensure all ePoS machines are connected to and synchronized with weighing machines for effective delivery of ration.

 Efforts to transform Fair Price Shops (FPS) in India:

• 43,000 FPSs have been enabled as Common Service Centers (CSCs) to serve as access points for various Business-to-Consumer (B2C) and Government-to-Consumer (G2C) services.
• Mudra loans are being provided for capital augmentation and business diversification.
• The Targeted Public Distribution System (TPDS) Control Order 2015 allows the sale of non-PDS items at Fair Price Shops, such as salt and spices.
• 3,200 FPSs have been enabled as banking correspondents to provide banking and financial services.
• Other efforts include automation of FPS and implementation of ONORC (One Nation One Ration Card) for smooth and transparent functioning.

INDIA’S FOOD GRAIN STORAGE SYSTEM :MeitY transfers the technology for Smart Food Grain Storage System (SAFEETY) to the industry. •

• Technology for SAFEETY was developed by the Society for Applied Microwave Electronics Engineering and Research (SAMEER)
•  SAMEER is an autonomous R&D institution under Ministry of Electronics and Information Technology (MeitY).

Need for Scientific Food Grain Storage System 

• Low production capacity: India accounts for 18% of the global population but only 11% of the arable land. 
• Inadequate storage capacity: India’s foodgrain storage capacity is only 145 MMT, covering 47% of the total production at 311 MMT. 
• Food security: FCI has grains beyond its buffer capacity which also requires a robust network of foodgrain storage facilities. 
• Economic viability of farming: Robust storage will reduce wastage, keep farm produce less volatile to market fluctuations and boost foodgrain exports.

 Initiatives for improving the scientific food grain storage system:

• “World’s Largest Grain Storage Plan in Cooperative Sector”: Approved to establish decentralized storage capacity at the Primary Agricultural Credit Societies level.
• Agricultural Marketing Infrastructure (AMI) scheme: Focuses on construction and renovation of godowns/warehouses in rural areas.
• Agriculture Infrastructure Fund: Provides financing facilities for post-harvest management infrastructure and community farming assets.

CABINET ADDITIONAL ACTIVITIES IN NLM APPROVES

Cabinet approves inclusion of additional activities in National Livestock Mission (NLM). 

Key changes 

• Additional coverage: Eligible entrepreneur will get capital subsidy and state government will be  assisted for breed conservation of horse donkey, mule, camel. 

Enhancing Fodder supply: 

• Eligible entrepreneurs will get capital subsidy for seed processing Infrastructure. 
• State government will be assisted for fodder cultivation in the non —forest land, waste land/range land/non-arable, etc. 

Simplification of Livestock Insurance programme: 

• Premium for the farmers has been reduced to 15% as against the current beneficiary share of 20%,30%, 40% and 50%.
  • Remaining premium will be shared by the Centre and the State. 
• Number of animals to be insured has also been increased to 10 cattle unit instead of 5 cattle unit for cattle sheep and goat. 

About NLM 

• Ministry of Fisheries, Animal Husbandry & Dairying 
• Type: Both Centrally Sponsored and Central sector 
• Key objectives 
  • Entrepreneurship development in small ruminant, poultry and piggery sector & Fodder sector. 
  • Increase of per-animal productivity through breed improvement. 
  • Increased meat, egg, goat milk, wool and fodder production. 
• Jurisdiction: Implemented all over India from 2021-22. 

 Sub-missions of the National Livestock Mission (NLM). 

• Breed improvement of Livestock and Poultry
• Feed and Fodder
• Innovation and Extension

ANNUAL INDUSTRIES (ASI) SURVEY:Annual Survey of Industries (ASI) released by the Ministry of Statistics and Programme Implementation (MoSPI). 

Key Highlights 

• In terms of Gross Value Addition, Gujarat remained at the top, followed by Maharashtra, Tamil Nadu, Karnataka and Uttar Pradesh 
• The top five states in terms of employment are Tamil Nadu, Gujarat, Maharashtra, Uttar Pradesh and Haryana. 
• Manufacturing sector showed resilience even after the disruption caused by the pandemic.
  • Main driver of resilient included Manufacture of Basic metal, Coke & Refined Petroleum Products, Pharmaceutical Products, Motor vehicles, etc. 

About Manufacturing Sector 

• Contributes around 17% in the Gross Domestic Product (GDP).
  • India aims to increase share to 25% by 2025. 
  • There is huge potential exporting manufactured goods. 
  • Key Deriving factors: Huge domestic demand, Foreign Direct Investment (FDI), etc. 
• Challenges faced by Sector: Lack of Credit Availability, Low productivity in comparison to other counties like China, Vietnam etc., Informal or unorganised sector, Lack of skilled labour, Infrastructure bottlenecks etc.  

Government Initiatives 

• National Manufacturing Policy, 2011: This was likely introduced to enhance the manufacturing sector’s contribution to the economy.
• Make in India initiative, 2014: A program launched to encourage companies to manufacture their products in India.
• PM Gati Shakti National Master Plan, 2021: A more recent initiative, likely focused on infrastructure and logistics to support economic growth.
• Others:
  • Production Linked Incentive scheme
  • Industrial Corridor Development Programme

SANGAM: DIGITAL TWIN INITIATIVE 

• Department of Telecommunications (DoT) has unveiled the ‘Sangam: Digital Twin’ initiative. 
• This initiative is a Proof of Concept focused on revolutionizing the infrastructure. planning & design of
  • It aims at combining the prowess of Digital Twin and Artificial Intelligence, Internet of Things, 5G, 6G, and next-gen computational technologies. 
  • It brings all stakeholders on one platform to demonstrate practical implementation of innovative infrastructure planning solutions. 
  • It is to be conducted in one of the major cities of India in two stages i.e. Exploration stage and Demonstration stage. 
• Digital Twin is a virtual model designed to accurately reflect a real-world physical object.
  • It spans the object’s lifecycle and uses real-time data sent from sensors to simulate the behavior and monitor operations, thus helping decision making. 
  • Digital twins differ from simulations in its large scale and two-way flow of information. 
  • Digital twins are already being used in power generation equipment, large physical structures, manufacturing operations, healthcare services and automotive industry.

Digital Twins in various applications:

• Remote monitoring: Digital twins make it viable to use in hazardous operations, allowing for safer management of dangerous environments.
• Better predictions: They help in making policy decisions by providing more accurate forecasts and simulations.
• Operational efficiency: Digital twins improve operational efficiency while maintaining output quality, likely through real-time monitoring and adjustments.
• Urban planning: They aid in urban planning by creating different simulations and forecasting scenarios, helping planners make more informed decisions.

Recently, a private company has created digital twin of Hyderabad’s 16th century Qutub Shahi tombs using drone scanners.

• The site includes seven tombs dedicated to the former kings of Golconda.
• They resemble Persian, Pathan and Hindu architectural styles that makes use of grey granite, with stucco ornamentation.
• It is a one-of-its-kind place in the world where the whole dynasty is buried at a single spot.

THREE NEW MAJOR RAILWAY CORRIDORS ANNOUNCED 

PM GatiShakti to be utilized for three new major railway corridors announced under Interim Budget 2024-25. 

• This will enable multi-modal connectivity, including
  • Energy, mineral, and cement corridors 
  • Port connectivity corridors and 
  • High traffic density corridors 
• Significance of the three Corridors 
  • Increase logistics efficiency and reduction of cost of logistics related to rail movement. 
  • Decongestion of high density rail routes 
  • Facilitate modal shift from road to rail and to coastal shipping 
  • Reduction of carbon footprint in logistics. 

About PM GatiShakti National Master Plan 

• Launched in 2021 for providing multimodal connectivity infrastructure to various economic zones. 
• Provides a comprehensive database of the trunk & utility infrastructure, ongoing & future projects of various Infrastructure and Economic Ministries/Departments of Central Government and States/UTs. 
• This data is integrated with the GIS-enabled PM Gati Shakti platform, thereby and monitoring of the Next Generation infrastructure projects on a single portal. 
• Goal of achieving self-reliance and a $5 trillion economy by 2025. 
• Focusses on economic growth driven by 7 engines namely: Railways, Roads, Ports, Waterways, Airports, Mass Transport, and Logistics Infrastructure. 
• It incorporates various infrastructure schemes like Bharatmala, Sagarmala, UDAN, etc. 

6 Pillars of PM Gati Shakti

• Comprehensiveness: Each department will have visibility of each other’s activities providing critical data while planning projects.
• Prioritization: Different Departments will be able to prioritize their projects through cross-sectoral interactions.
• Optimization: Plan will help in selecting the most optimum route in terms of time and cost.
• Synchronization: PM Gati Shakti will help in synchronizing activities of each department.
• Analytical: Plan will provide the entire data at one place with GIS based spatial planning and analytical tools having 200+ layers.
• Dynamic: Plan will help in identifying the vital interventions for enhancing and updating the master plan.

 NITI AAYOG REPORT ON LNG AS A TRANSPORTATION FUEL 

NITI Aayog launched LNG as a Transportation Fuel in Medium and Heavy Commercial Vehicle (M&HCV). 

• Liquefied Natural Gas (LNG) is a clear, colourless, non toxic liquid that forms when natural gas is cooled to the liquid state, at about -162 degrees Celsius for shipping and storage. 

Need of LNG push for M&HCV:  

• Achieving the target of Net Zero by 2070 through CO2 emission reduction. 
• Reducing oil import dependency. 
• India’s rapidly expanding trucking market (expected to more than quadruple in 2050 from 2022) 
• Contribute to a Gas-based economy (achieving a share of natural gas in the primary energy mix to 15% by 2030). 

Challenges in the adoption of LNG: high initial cost compared to traditional diesel trucks, lack of availability of LNG retail outlets, hesitancy in the market, etc. 

WORLD TRADE ORGANIZATION (WTO)

About WTO:

• WTO is an international organization aimed at opening trade for global benefit.
• Established: January 1995
• Created by: Uruguay Round negotiations (1986-94)
• Headquarters: Geneva, Switzerland
• Members: 166 (includes Timor-Leste, 2024)
• India is a founding member of WTO

Objective: To help its members use trade as a means to raise living standards, create jobs and improve people’s lives.

Organizational Structure:

1. Ministerial Conference: Highest decision-making body, meets every two years.
2. General Council:
   • WTO’s decision-making body in Geneva, meeting regularly
   • Also meets as the Dispute Settlement Body and Trade Policy Review Body

Functions: Administering WTO trade agreements

• Forum for trade negotiations
• Settling trade disputes
• Monitoring national trade policies
• Technical assistance and training for developing countries

Reports published by WTO:

• World Trade Report
• World Trade Statistical Review
• Global Trade Outlook
• WTO Annual Report

Key contemporary milestones:

• 2014: The revised Agreement on Government Procurement (GPA) entered into force.
• 2015: Conclusion of landmark $1.3 trillion Information Technology Agreement.
• 2017:
  • Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement amended to ease poor countries’ access to affordable medicines.
  • WTO’s Trade Facilitation Agreement entered into force.

last 5 Ministerial Conferences (MC) of the World Trade Organization:

• MC 9 – Bali, 2013
• MC 10 – Nairobi, 2015
• MC 11 – Buenos Aires, 2017
• MC 12 – Geneva, 2022
• MC 13 – Abu Dhabi, 2024 (Latest)

 Challenges facing the World Trade Organization (WTO):

• Consensus between developing and developed countries: WTO members have not been able to agree on new rules on agricultural goods, highlighting the conflicting interests between developing and developed countries.
• Dysfunctional Dispute Settlement System (DSS): The Appellate Body is now inoperative and the DSS is impaired, as the US began blocking appointments in 2016.
• US-China Trade War: Difficult trade relations between the two largest world economies and WTO members – the US and China – also puts a strain on the WTO.

AGRICULTURE AND FOOD SECURITY :WTO’s 13th Ministerial Conference (MC13), Abu Dhabi concluded without a permanent solution to the public stockholding (PSH) issue, a demand raised prominently by India. 

About PSH Policy 

• Objective: The PSH makes it possible for the government to procure crops from farmers at MSP, and store and distribute these food grains to the poor. 
• DE MINIMIS limits: Under global trade norms, a country’s subsidy bill should not breach the limit of 10 % (for developing countries) and 5 % (for developed countries) of the value of production. 
• Currently, it is calculated as the reference price for 1986-88.  

Peace Clause & India’s Stand 

• Peace Clause: WTO at the Ninth Ministerial Conference (MC9) in Bali and agreed to a “peace clause” as an interim solution for the public stockholding for food security.
  • It was agreed that the “peace clause” would remain in force till MC 11. However, due to non-consensus among the members, it was extended.
• India’s Demand: India is pressing for a permanent solution to the issue of public stockholding (PSH).
  • As part of a permanent solution, India has asked for measures like amendments in the formula to calculate the food subsidy cap.

Why Permanent Solution to PSH is Important for India? 

• A permanent solution to PSH is crucial for India and other developing countries, as it would legitimize higher subsidies for food stockholding programmes. This would protect the interests of the poor and vulnerable farmers and take care of its domestic food security needs. 

Domestic support in agriculture, known as “boxes” in World Trade Organization (WTO) terminology:

• Amber Box: This category includes nearly all domestic support measures considered to distort production and trade, with some exceptions. The image notes that these measures “fall into the amber box.”
• Blue Box: This category is for support that would normally be in the amber box, but is placed in the blue box if the support also requires farmers to limit production.
• Green Box: This category is for subsidies that must not distort trade, or at most cause minimal distortion.

FISHERIES SUBSIDIES AGREEMENT

WTO Agreement on Fisheries Subsidies 

• Geneva Package: The Agreement was adopted during the 12th Ministerial Conference of WTO in 2022 held in Geneva, Switzerland under the ‘Geneva Package’. 
• Aim: To curb harmful subsidies, which are seen as a key factor in the widespread depletion of the world’s fish stocks. 
• Not accepted yet: Acceptance from two-thirds of WTO members is needed for the Agreement to come into effect. The agreement is still short of 39 countries (March 2024). 
• India is not part of the agreement. 

Benefits: It will have positive effects on the sustainability of marine fish stocks and fisheries – 

• By curbing subsidies to illegal, unreported and unregulated fishing 
• By prohibiting subsidies to fishing on overfished stocks 
• By prohibiting subsidies to fishing on the unregulated high seas 

Special and Differential Treatment (S&DT): Under S&DT, Developing Countries and Least Developed Countries (LDCs) have been allowed a transition period of 2 years from the date of entry into force of this Agreement. 

Principles for successful Fisheries Subsidy Negotiation, as given by the World Wide Fund (WWF).

• Covering all significant fishing subsidy programs
• Forbidding harmful fishing subsidies while accommodating beneficial ones
• Taking account of the special needs of developing countries
• Promoting the administration of fishing subsidies on a fisheries-specific basis
• Including mechanisms to improve transparency and accountability
• Being administered in effective coordination with international fisheries bodies

CROSS-BORDER REMITTANCES 

India submitted a draft proposal to reduce the cost of cross-border remittances at MC13. However, it was not included in the final Abu Dhabi Ministerial declaration. 

Key Highlights related to the proposal • Remittance Flow: Out of total remittances of USD 860 billion in 2023, USD 669 billion (about 78%) went to low and middle-income countries. 

Significance of cost reduction in cross-border remittance 

• Increased Flow of Remittances: Cost reduction can increase the inflow of remittances to developing countries and enhance the personal consumption of receiving households.
  • India received the highest remittances about $125 billion in 2023, however, the cost for the remittance was around $7 billion -$8 billion (World Bank report) 
• Economic Growth: Remittance cost reduction can translate into increased trade and business efficiency, fostering overall economic growth by minimizing cross-border payment expenses. 
• Enable UPI to become Global: Remittance cost cut will lead to a big boost for UPI transactions, which has been a game changer in India, and it will have a much greater footprint overseas. E.g., Bhutan, Singapore and UAE among others.
  • It will also help the Indian banking sector, which has been at the forefront of technology, to obtain a larger footprint in the global economy. 

DIGITAL MONOPOLIES AND REGULATION OF DIGITAL ECOSYSTEM :The Ministry of Electronics and Information Technology (MeitY) has expressed strong opposition to Google’s delisting of certain applications from the Play Store. 

Regulation of Digital Ecosystem in India 

• Competition Act, 2002: It aims to promote and sustain competition in markets and protect the interests of consumers among others. The Competition Act follows two approaches to regulation- 
• Information Technology Act, 2000: It is the primary legislation in India that governs various aspects of the digital ecosystem.
  • However, it was enacted in the inception period of the Internet and may not address contemporary challenges. 
• Sector-Specific Rules: The government issues regulations for specific sectors like social media (IT Rules) and e commerce (Consumer Protection Rules) to address emerging issues. E.g.,
  • Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 was introduced to regulate digital media and over-the-top (OTT) platforms. 

India’s Initiatives to Prevent Digital Monopolies 

• Consumer Protection (E-Commerce) Rules, 2020: Introduced to govern the operations of e-commerce platforms and digital marketplaces. These rules aim to prevent anti-competitive practices, ensure transparency, and protect consumer interests. 
• Competition (Amendment) Act, 2023: Introduced new merger notification thresholds and deal value thresholds to capture acquisitions of high-value, data-rich firms that can potentially lead to digital monopolies.
  • Competition Commission of India (CCI) also investigates and takes action against anti-competitive practices by digital platforms. 
• Digital Personal Data Protection Act 2023: It emphasizes the importance of data to prevent the concentration of data in the hands of a few dominant players. 
• Proposed Digital India Act (DIA): The DIA proposes to regulate a vast array of digital enterprises including social media websites, artificial intelligence-based platforms, and e-commerce enterprises. 
• Draft National Data Governance Framework Policy: It aims to create standardized data management and security for non-personal and anonymised data across all government bodies.

HUMAN DEVELOPMENT REPORT (HDR) 2023-2024 

United Nations Development Programme (UNDP) released the Human Development Report (HDR) 2023-2024 titled “Breaking the Gridlock: Reimagining cooperation in a polarised world”. 

About HDR 

• Released by: United Nations Development Programme (UNDP) annually since 1990. 
• Objective: Examines major global challenges that affect human development and recommendations. suggest 
• Human Development Index (HDI): HDI published since 1990, is the core of the HDR. 

Human Development Index (HDI) 

• About: It’s statistical measure used to quantify a country’s achievement in 3 basic dimensions of human development – Long and healthy life, Knowledge, and a decent standard of living. 
• How HDI value is calculated?
  • HDI value is determined by aggregating the country’s scores in 4 indicators and these indicators are compiled into a single number between 0 and 1.0 based on dimension indices. (Refer Infographic)
  • Developed by: Pakistani economist Mahbub ul-Haq. • Significance: It can be used to examine the various policy choices of nations. o For example, if two countries have approximately the same GNI per capita, then the HDI can help to evaluate why they produce widely disparate human development outcomes. • Limitations: The HDI captures only part of what human development entails. It does not reflect on inequalities, poverty, human security, empowerment, etc. o Thus, HDR provides additional composite indices to evaluate other life aspects, including inequality issues such as gender disparity or racial inequality.  

United Nations Development Programme (UNDP)

• About: It’s a United Nations lead agency on international development, UNDP works in 170 countries and territories to eradicate poverty and reduce inequality.
  • In line with the 2030 Agenda, UNDP is implementing six cross-cutting approaches to development, known as Signature Solutions.
• Genesis: It was established in 1966 by merging of the United Nations Expanded Programme of Technical Assistance and the United Nations Special Fund.
• Mandate:
  • UNDP’s mandate is to end poverty, build democratic governance, rule of law, and inclusive institutions.
  • It advocates for change, and connect countries to knowledge, experience and resources to help people build a better life.
  • Its work is concentrated in three focus areas: Sustainable development, Democratic Governance and peace building and Climate and disaster resilience.
  • HQ: New York (USA)

Key Findings about India 

• HDI: Rank Improved to 134 in 2022 from 135 in 2021 (and 130 in 2018). 
• HDI Value: Increased to 0.644 from 0.633 in 2021. o Life expectancy at birth: Improved to 67.7 years (in 2022) from 67.2 (in 2021).
  • Expected years of schooling: Increased to 12.6 years from 11.9 years. 
  • Mean years of schooling: Increased to 6.57 years. 
  • Gross National Income per capita: Improved to $6,951 from $6,542. 
  • Category: Medium human development category. 

HOUSEHOLD CONSUMPTION EXPENDITURE SURVEY (HCES) 2022-23 Why in the news? The About Household Consumption Expenditure Survey (HCES) 

• Objective: It is designed to collect information on the consumption of goods and services by households.   

• Conducted by: NSSO under the Ministry of Statistics and Programme Implementation (MoSPI) has been conducting HCES at regular intervals.
  • Initially, the NSSO was conducted HCES every year (starting 1950-51). However, since its 26th round, the survey has been conducted roughly every 5 years. (The 2017-18 Survey was discarded by the government citing ‘Data Quality’ issues.) 
• Utility of HCES: The data is useful for understanding consumption and expenditure patterns, standard of living and well-being of households. 
• It can play a key role in reviewing critical economic indicators, including GDP, poverty levels, and Consumer Price Inflation. 

National Sample Survey Office (NSSO)

• About: NSSO is part of NSO and subordinate Office under the control of MoSPI.
  • National Statistics Office (NSO) consists of the Central Statistics Office (CSO) and NSSO.
• Purpose: To conduct large scale sample surveys in diverse fields on All India basis.

Functions & Responsibilities:

• It conducts Periodic Labour Force Survey (PLFS), Annual Survey of Industries, and Urban Frame Survey etc.
• NSSO collects data on rural and urban prices and plays a significant role in the improvement of crop statistics.
• It also maintains a frame of urban area units for use in sample surveys in urban area

UMBRELLA ORGANISATION (UO) FOR URBAN COOPERATIVE BANKS (UCBS):Recently, the Ministry of Cooperation constituted the National Urban Cooperative Finance and Development Corporation Limited (NUCFDC), an Umbrella Organisation (UO) for UCBs. 

About NUCFDC 

• 2006: The need for an Umbrella Organisation (UO) for India’s UCB sector was first emphasized by an RBI Working Group chaired by Shri N.S. Viswanathan. 
• 2009: RBI’s Working Group under the chairmanship of Shri V.S. Das recommended a model of a national level UO i.e., NUCFDC. 
• 2019: RBI accorded regulatory approval to the NAFCUB (National Federation of Urban Co operative Banks and Credit Societies Ltd) (refer to the box) for the formation of NUCFDC. 

Major functions envisaged for NUCFDC 

• Offering liquidity and capital support: To raise capital, with plans to reach a capital base of Rs.300 crores to support UCBs.
  • NUCFDC can also offer fund management and other consultancy services to UCBs. 
• Facilitate regulatory compliance:
  • Prepare small banks for compliance with the Banking Regulation Act (BRA), 1949. 
  • Facilitate communication between UCBs and regulators. 
• Develop a shared technology platform: NUCFDC will enable UCBs to widen their range of services at a relatively lower cost. 

National Federation of Urban Co-operative Banks and Credit Societies Ltd (NAFCUB)

• HQ: New Delhi
• Genesis: It is a national co-operative society which in 1977 got registered under the Multi-State Cooperative Societies Act .
• Role: NAFCUB is an Apex Level Promotional body of UCBs and Credit Societies Ltd in the Country.
• Activities:  Training programmes,Research conclaves, Core Banking Solutions (CBS) initiatives

Members: It is open to 

• UCBs and Urban Credit Societies 
• The State Federations /Association of Urban Banks and/or Credit Societies. 
• National Co-operative Union of India 
• Any other organization useful for the furtherance of the objects of the Federation, with the approval of the Central Registrar of Co-operative Societies
  • No individual shall be eligible for membership of the Federation.

PRIMARY AGRICULTURAL CREDIT SOCIETIES (PACS) :Various initiatives have been taken for the expansion and modernization of PACS. 

About PACS 

• Definition: PACS are the grassroot level arms of short-term co-operative credit structure (refer to infographics). 
• Regulation: PACS are registered under Cooperative Societies Act and are administered by concerned State Registrar of Cooperative Societies (RCS).
  • SCBs/DCCBs are also registered under provisions of State Cooperative Societies Act of State concerned and are regulated by RBI. 
  • However, PACS are outside purview of Banking Regulation Act, 1949 and are not regulated by RBI. 
• Refinancing: They are refinanced by NABARD through DCCBs and SCBs. 
• Functions:
  • Gives short-term credit loans and collects repayment from rural borrowers. 
  • They can also provide other input services, like seed, fertilizer, and pesticide distribution to member farmers. 
• Significance: PACS play a key role in financial inclusion.
  • PACS account for 41 % of the KCC loans given by all entities in the Country and 95 % of these KCC loans through PACS are to the Small and Marginal farmers (2022). 
• Current Status: There are more than 65000 functional PACS across country.

Co-operative Agriculture Credit Structure in India, which is divided into two main categories:

• Short Term Credit (Three-Tier System):
  • State/Central Co-operative Bank (SCB)
  • District Central Co-operative Bank (DCCB)
  • Primary Agriculture Credit Society (PACS)
• Long Term Credit (Two-Tier System):
  • State/Central Co-operative Agricultural Rural Development Bank (SCARDB/CCARDB)
  • Primary Co-operative Agricultural Rural Development Bank (PCARDB)

INDIA’S GRAIN STORAGE SYSTEM 

The Prime Minister inaugurated pilot project of ‘World’s Largest Grain Storage Plan in Cooperative Sector’, for 11 

Primary Agricultural Credit Societies (PACS) across 11 States. 

About World’s Largest Grain Storage Plan in Cooperative Sector 

• Ministry: Ministry of Cooperation (MoC). 
• Purpose: To establish decentralized storage facilities at PACS level, alongside other agricultural infrastructure, like, warehouses, custom hiring centers, processing units etc. 
• Benefits to PACS: PACS can avail subsidies and interest subvention benefits for construction of godowns/storage facilities and setting up of other agri infrastructure. 

Major implementing agencies: 

• FCI (Food Corporation of India), 
• CWC (Central Warehousing Corporation), 
• NCDC (National Cooperative Development Corporation) with support of NABARD, 
• NABARD Consultancy Services (NABCONS), 
• NBCC (National Buildings Construction Corporation). 

Other initiatives for augmentation of grain storage capacity 

• Warehousing (Development and Regulation) Act, 2007: Establishes WDRA which is mandated to establish Negotiable Warehouse Receipt (NWR) system for all commodities through a network of registered warehouses, 
• e-NWRs: e-NWR were launched in 2017 by WDRA. o Warehouse Receipts are an acknowledgement in writing or in electronic form issued by a Warehouseman or his authorised representative of receipt for storage of goods not owned by warehouseman. 
• Private Entrepreneur Guarantee (PEG) scheme: FOR AUGMENTING FOOD STORAGE CAPACITY THROUGH PRIVATE PARTICIPATION. 
• National Policy on Handling, Storage and Transportation of Foodgrains, 2000: To minimize storage and transit losses and to introduce modern technology. 
• Grameen Bhandaran Yojana: For construction, renovation and expansion of rural godowns. 
• PM Kisan Sampada Yojana: For Development of cold storage facilities, specialised packaging units, warehousing facilities, etc.

 KRISHI VIGYAN KENDRAS :The Indian Council of Agricultural Research (ICAR) celebrated the Golden jubilee year of establishment of the Krishi Vigyan Kendra (KVK).

About Krishi Vigyan Kendra (KVK) 

• KVKs aims at assessment of location specific technology modules in agriculture and allied enterprises.
  • KVKs are the only institution at the district level in India for technological backstopping in agriculture and allied sectors. 
  • They are an integral part of the National Agricultural Research System (NARS). 
    • NARS in India comprises of Indian Council of Agricultural Research (ICAR) at national level and the State Agricultural Universities (SAUs) at the state level, are major partners in growth & development of Agricultural Research and Education. 
  • KVKs have been functioning as Knowledge and Resource Centre of agricultural technology and linking the NARS with extension system and farmers.
    • Agricultural extension (also known as agricultural advisory services) plays a crucial role in boosting agricultural productivity, increasing food security, improving rural livelihoods, and promoting agriculture as an engine of pro-poor economic growth. 
  • Currently there are around 731 KVKs in the country, established under eleven Agricultural Technology Application Research Institute (ATARI) zones. 

Indian Council of Agricultural Research (ICAR)

• HQ: New Delhi
• Genesis: Established in 1929 as a registered society under The Societies Registration Act, 1860. ○ It was formerly known as Imperial Council of Agricultural Research.
• Ministry: Autonomous organisation under Ministry of Agriculture and Farmers Welfare.
• Function: Apex body for coordinating, guiding and managing research and education in agriculture including horticulture, fisheries and animal sciences.

PATENTS:Over 1 lakh Patents were granted by the Patent office (March, 2023 to March, 2024)

• 7th position in terms of Resident Patent Filing activity in the world (WIPO Report 2022)

International conventions and treaties related to patents:

• Paris Convention (1883): This was the first major international agreement focused on protecting industrial property rights, including patents.
• Patent Cooperation Treaty (1970): This treaty established an international patent filing system.
• Budapest Treaty (1977): This treaty deals with the deposit of microorganisms for patent procedures. It allows deposits at any recognized international depository authority to be valid for patent purposes.
• The image notes that India is a party to all of these agreements.

About Patents and their governance 

• A patent is an exclusive Intellectual Property Right (IPR) granted for an invention, which is a product or a process that provides a new way of doing something or offers a new technical solution to a problem. 
• To get a patent, technical information about the invention must be disclosed to the public in a patent application. 
• Patent protection means that the invention cannot be commercially made, used, distributed, imported or sold by others without the patent owner’s consent. 
• Patents are territorial rights, only applicable in the country or region in which a patent has been filed and granted. 
• Criteria for an invention to be patentable:  It should be novel, Must involve an inventive step, Capable of industrial application, It should not fall under the categories of inventions that are excluded from patentability under the concerned jurisdiction. 

India 

Regulated by the Patents Act, 1970. It repealed the Indian Patents and Designs Act, 1911. 

• It has been amended thrice, in 1999, 2002, and 2005. 
• The Amendment of 2005 ensured compliance of the Patents Act, 1970 with the WTO TRIPS Agreement.
  • Amendment extended the product patent protection to the areas of pharmaceuticals and agricultural chemicals.
• As per the Act, the time Period of patent will be 20 years. 
• Also, as per the Act, there are certain things which cannot be patented in India such as plants and animals in whole or any part including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals etc. 

Key Initiatives taken to facilitate filing of Patents in India 

• National Intellectual Property Rights (IPR) Policy in 2016. It includes
  • Scheme for Facilitating  Start-Ups Intellectual Property Protection (SIPP) to encourage filling of Patent applications by Startups. 
  • Expedited Examination for certain category of applicants, such as Start-ups, small entities, women inventors for expeditious grant of Patents. 
  • National Intellectual Property Awareness Mission (NIPAM), a flagship program to impart IP awareness and basic training in educational institutes. 
  • Patent Facilitation Programme has been revamped to scout patentable inventions and provide full financial, technical and legal support in filing and obtaining patents. 
  • Reduction in filing Fees for Start-ups, MSMEs, and educational Institutes to encourage Patent filling. 
  • IP Mitra: for Startups in patents, trademarks, and designs under the extended Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP). 

World Intellectual Property Organization (WIPO):

• Genesis: WIPO was established in 1967 through the WIPO Convention.
• About: It is a self-funding agency of the United Nations and serves as the global forum for intellectual property (IP) services, policy, information, and cooperation.
• Membership: WIPO has 193 member states, including India.

Key information:

• It governs treaties related to Intellectual Property Rights (IPR), such as the Berne Convention for the Protection of Literary and Artistic Works.
• WIPO releases the Global Innovation Index (GII) in collaboration with Cornell University and INSEAD.
• It also releases reports like the World Intellectual Property Report.

Location: The image indicates that WIPO is based in Geneva, Switzerland.

International Intellectual Property (IP) Index 

• US Chamber of Commerce released 12th edition of its International IP Index. 
• Top countries on the index are USA, UK and France. o India’s position remained unchanged at 42 out of 55 economies.
• IP Index is different from the Global Innovation Index (GII). 
• GII is co-published by World Intellectual Property Organization (WIPO), Cornell University, and INSEAD. 
• GII ranks India at 40th position out of 132 economies. 

UTTAR POORVA TRANSFORMATIVE INDUSTRIALIZATION SCHEME, 2024 (UNNATI 2024) :Union Cabinet approved the Uttar Poorva Transformative Industrialization Scheme, 2024 (UNNATI – 2024). 

Status of Industrialization in Northeast India 

Special Economic Zones (SEZs): 

• There are 5 formally approved SEZs in the NER, out of which 4 are notified. However, none of the SEZs is operational. 
• Specialized industries:
  • Handloom and handicraft industries: It is one of the largest unorganized economic activities in the NER that provides employment for rural and semi-rural population. 
  • Bamboo industry: Nearly two-fifths of bamboo stock in India is concentrated in the NER. 
  • Rubber industry: Tripura is the chief production hub and has been declared the ‘second rubber capital of India’ after Kerala by the Indian Rubber Board. 
• MSMEs: Number of MSMEs in NER are only 2.98% of total MSMEs in India and accounts for 2.62% of total employment.
  • Assam has largest number of MSMEs in NER followed by Tripura and Meghalaya. 
• Connectivity: 
  • Road Connectivity: Total length of national highway has increased to 16,125 Kms in the region. 
  • Inland waterways: National Waterway (NW) 2 from Bangladesh border to Sadiya on Brahmaputra is fully developed and 20 waterways of NER have been declared as National Waterways
    • However, feasibility study for 18 waterways have not been yet completed. 
• International infrastructure projects: There are several international infrastructure projects in different stages of implementation:
  • India- Myanmar-Thailand Trilateral Highway 
  • Kaladan Multimodal Transit Transport Project 
  • India-Bangladesh Protocol Route 
  • Bangladesh-Bhutan-India-Nepal Motor Vehicles Agreement (BBIN-MVA) 

About UNNATI – 2024 

• Ministry: Central Sector Scheme under the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry. 
• Objective: Development of Industries and generation of employment in the states of North East Region. 
• Financial Outlay: More than Rs.10,000 crore from the date of notification for 10 years. (Additional 8 years for committed liabilities). 
• Nodal Agency: North-Eastern Development Financial Corporation Limited (NEDFi) will be the nodal agency for the disbursal of incentives. 

Other initiatives to promote industrialization in the Northeastern Region 

• Prime Minister’s Development Initiative for North Eastern Region (PM-DevINE): It envisages funding infrastructure, supporting social development projects, and generating livelihood opportunities for youth and women. 
• North East Special Infrastructure Development Scheme (NESIDS): A central sector scheme, approved during 2017-18 and extended till 2026. Its two components include:
  • NESIDS (Roads) – to be administered by the North Eastern Council (NEC)
  • NESIDS (Other than Roads Infrastructure (OTRI)) – to be administered by the Ministry of Development of North Eastern Region (MDoNER). 
• Schemes of North Eastern Council (NEC): A central sector scheme for focused development of deprived areas; deprived/neglected sections of society and emerging priority sectors in the North eastern States. 
• NITI Forum for North East: Forum examines various proposals both at the Central and the State levels and prepare plans for the speedy development of the North Eastern Region. o Forum proposed that the development projects in the NER would be based on the concept of “HIRA” (Highways, Inland Waterways, Railways and Airways).
• Digital North East Vision 2022: It identifies eight digital thrust areas – Digital Infrastructure, Digital services, Digital empowerment, Promotion of Electronics Manufacturing, Promotion of IT and ITes including BPOs, Digital Payments, Innovation & Startups and Cyber security. 
• Special Accelerated Road Development programme for North East (SARDP-NE): Ministry of Road, Transport and Highways is implementing the SARDP-NE under Bharatmala Pariyojana Phase I.

ELECTRIC MOBILITY PROMOTION SCHEME- 2024 

The Ministry of Heavy Industries (MHI) has introduced the Electric Mobility Promotion Scheme 2024 (EMPS 2024) to accelerate the adoption of Electric Vehicles in India.  

About EMPS 2024 

• Funding and Tenure: It is a fund-limited scheme with an outlay of Rs. 500 crores for a period of 4 months, w.e.f. 1st April 2024 till 31st July 2024. 
• Objective: Faster adoption of electric two-wheeler (e-2W) and three-wheeler (e-3W) to provide further impetus to the green mobility and development of the electric vehicle (EV) manufacturing ecosystem in the country. 
• Target: It aims to support around 3.72 lakh EVs including e-2W (3.33 lakh) and e-3W (0.38 lakh). 
• Eligible EV categories: With greater emphasis on providing affordable and environment-friendly public transportation options, the scheme will apply mainly to those e-2W and e-3Ws registered for commercial purposes.
  • In addition to commercial use, privately or corporate-owned registered e-2W will also be eligible. 
  • To encourage advanced technologies, the benefits of incentives will be extended to only those vehicles which are fitted with advanced batteries. 
• Components:
  • Subsidies: Demand incentives for e-2W & e-3W.
    •  Available for consumers in the form of an upfront reduced purchase price (Rs. 5,000 per kWH) of EVs, which will be reimbursed to OEM (Original Equipment Manufacturer) by Government of India. 
  • Administration of Scheme including IEC (Information, Education and Communication) activities and fee for Project Management Agency (PMA).

Government initiatives for promotion of EV manufacturing ecosystem: 

• PLI Schemes: Production Linked Incentive (PLI) Scheme for Automobile and Auto Components Industry in India to boost domestic manufacturing of Advanced Automotive Technology products.
  • PLI Scheme for manufacturing of Advanced chemistry cell (ACC) to bring down prices of battery in the country. 
• FAME India: Under FAME India Scheme Phase-II, Phased Manufacturing Programme (PMP) has been introduced for domestic manufacturing of electrical vehicles, its assemblies/ sub-assemblies and parts/sub-parts thereby increasing the domestic value addition. 
• Rationalization of Goods and Services Tax (GST):
  • On electric vehicles from 12% to 5%; 
  • On chargers/charging stations for electric vehicles from 18% to 5%. 
• ‘Technology Platform for Electric Mobility (TPEM)’ formed by Ministry of Science and Technology to play a key role in forming an electric mobility standardization roadmap for India.

ABOUT BBPS:It is an integrated online platform that is being developed by the National Payments 

Corporation of India (NPCI) for all kinds of bill payments. 

• It intends to build an interoperable service through a network of agents, enabling multiple payment modes along with instant generation of receipts of payments. 
• Operates as a tiered structure with NPCI Bharat Bill Pay Ltd (NBBL) as a Central Unit (BBPCU), and Bharat Bill Payment Operating Units (BBPOUs) as operational units.
  • A BBPOU may function either as a Biller Operating Unit (BOU) or a Customer Operating Unit(COU) or both. 

Regulatory framework of BBPS 

• Enable non-bank payment aggregators (PAs) to participate in the system as operating units. 
• BBPCU will set the rules and regulations governing participation criteria and system operations, in addition to the technical standards for participation in the system. 
• COU will provide digital or physical interface to their customers. 
• BOU will be responsible for onboarding billers to BBPS.

PREPAID INSTRUMENTS (PPIS) PAYMENT :Reserve Bank of India has allowed banks and non banks to issue PPIs for public transit services. 

• PPIs will contain “Automated Fare Collection” application related to toll collection, parking etc. 

About PPIs 

• Payment instruments that facilitate purchase of goods and services against the value stored on such instruments. 
• Issued as smart cards, internet wallets etc. 
• While these instruments can be reloaded, withdrawing cash, refund, or fund transfer will not be permitted in PPIs. 
• Cash loading to PPIs shall be limited to Rs.50,000 per month subject to overall limit of PPI. 

SEBI announced launch of Beta version of optional T+0 settlement for limited scrips and brokers. 

• T+0 settlement allows both funds and securities transactions to be settled on same day when the trade is initiated. 
• Presently, Indian securities market operate on T+1 settlement cycle. • 

Foreign Direct Investment (FDI) vs FPI 

• FDI is an investment by a person resident outside India in an unlisted Indian company or in 10% or more of its paid up equity capital of a listed Indian company. 
• FPI is an investment by a person resident outside India in equity instruments (shares, debentures etc.) where such investment is less than 10% of paid up equity capital of a listed Indian company. 

PM  SAMAJIK UTTHAN EVAM ROZGAR ADHARIT JANKALYAN (PM-SURAJ) PORTAL 

Prime Minister launched one-stop PM-SURAJ portal for credit schemes for marginalized sections. 

About PM-SURAJ Portal 

• Nodal Ministry: Ministry of Social Justice and Empowerment (MoSJE). 
• Objective: Uplifting most marginalized sections of society and supporting credit assistance to one lakh entrepreneurs hailing from disadvantaged communities. 
• Credit support will be provided to eligible persons across country, facilitated through banks, Non Banking Financial Company-Micro Finance Institutions’ (NBFC-MFIs), organisations. 

PROJECT GAIA 

Central banks unveiled Project Gaia to evaluate climate financial risks. 

About Project Gaia 

• It is a collaboration between the Bank for International Settlements Innovation Eurosystem Centre, Bank of Spain, etc. Hub 
• It leverages generative artificial intelligence (AI) particularly Large Language Models(LLMs) to facilitate the analysis of climate-related risks in the financial system. 
• Benefits 
  • Can examine firm carbon emissions, green bonds, and optional net-zero commitment disclosures. 
  • Enhanced accessibility to climate-related disclosures, Efficient data extraction, Harmonised climate metrics, Scalability and reliability. 

‘VOCAL FOR LOCAL’ INITIATIVE BY NITI AAYOG 

NITI Aayog Launches ‘Vocal For Local’ Initiative Fostering Grassroots Entrepreneurship and Self- reliance. 

Key Highlights of Initiative 

• Launched under: Aspirational Blocks Programme (ABP). 
• Aim: Encouraging a spirit of self-reliance among people of Aspirational Blocks, propelling them towards sustainable growth and prosperity. 
• It will bolster local economies and also drive inclusive growth. 
• Implementation: Government e-marketplace (GeM) and Open Network for Digital Commerce (ONDC) platforms will provide support to entrepreneurs for e-commerce onboarding, establishing linkages, enhancing financial and digital literacy, etc. 
• ‘Aakanksha’window on GeM portal: Created for showcasing indigenous local products from 500 ABP. 

About ABP 

• Genesis: Launched in 2023 by NITI Aayog, ABP is built on the success of the Aspirational Districts Programme (ADP). 
• Focus: Improving governance to enhance the quality of life of citizens in the most difficult and relatively underdeveloped blocks of India. 
• Coverage: 500 blocks from 27 states and 4 UTs 
• Progress monitoring: Across 40 socio-economic indicators under 5 themes: 
• Programme strategy: 
  • Convergence (of Central and state Schemes) 
  • Collaboration (between NITI Aayog, Central Ministries, State Departments, District and block Administration) 
  • Competition among blocks driven by a spirit of mass Movement 

About ADP 

• ADP was launched in 2018 and initially covered 112 most under-developed districts across the country. 
• With States as the main drivers, this program focuses on the strength of each district, identifying low hanging fruits for immediate improvement and measuring progress by ranking districts every month. 

5 themes for Socio-Economic Indicators:

• Health and Nutrition
• Education
• Agriculture and Allied Services
• Basic Infrastructure
• Social Development

REMISSION OF DUTIES AND TAXES ON EXPORTED PRODUCTS (RODTEP) SCHEME 

Centre has extended RoDTEP scheme to- 

• Advance Authorisation Holders: Refers to manufacturer exporters or merchant exporters tied to supporting manufacturer. 
• Special Economic Zones Units: Designated duty free enclave to be treated as a territory outside the customs territory of India. 
• Export Oriented Units: Defined under Foreign Trade Policy as units undertaking to export their entire production of goods and services (with some exceptions). 

RoDTEP was launched by Ministry of Commerce and Industry in 2021 for refunding various embedded taxes and duties on exported products. 

‘E-KISAN UPAJ NIDHI’ OF WDRA LAUNCHED 

• Ministry of Consumer Affairs, Food & Public Distribution launches ‘e-Kisan Upaj Nidhi’. 
• e-Kisan Upaj Nidhi is a Digital Gateway initiative of Warehousing Development and Regulatory Authority (WDRA). 
• It aims to facilitate farmers in obtaining post-harvest loans from banks against their stocks stored in the WDRA registered warehouses.
  • The loans are provided against electronic negotiable warehouse receipts or e-NWRs (refer to the box).  

About WDRA

• WDRA was established in 2010 under the WDRA Act, 2007. 
• The mission of the Authority is to:
  • Establish a Negotiable Warehouse Receipt (NWR) system for all commodities through a network of registered warehouses, 
  • Making the NWR a prime tool of trade and facilitate finance against it 
  • Enable banks to enhance lending portfolio quality and interest in lending against goods deposited in registered warehouses. 
• WDRA (Negotiable Warehouse Receipts) Regulations, 2011 lays down the rules for NWRs, including terms for standardization, issuance, surrender, etc. 
• FCI, NAFED and National Horticulture Board have issued guidelines that Central Pool Stock should be kept in WDRA registered warehouses. 

Warehouse Receipts 

• Warehouse Receipts are an acknowledgement in writing or in electronic form issued by a Warehouseman or his authorized representative of the receipt for storage of goods not owned by the warehouseman. 
• e-NWR were launched in 2017 by the WDRA

INDIATEX LAUNCHED 

IndiaTex (Innovative Business Practices and Economic Models in the Textile Value Chain in India) is launched 

at BHARAT TEX 2024, one of the largest-ever global textile events organized in India. 

• IndiaTex is a four-year (2023-2027) United Nations Environment Programme (UNEP) project. 
• It is a part of the One UNEP Textile Initiative.
  • This initiative provides strategic leadership and encourages sector-wide collaboration to accelerate a just transition towards a sustainable and circular textile value chain. 

About IndiaTex 

• Objective: Accelerate the transition of the Indian textile sector towards circularity. 
• Implementation: In collaboration with Ministry of Textiles and It will be funded by Denmark’s Ministry of Foreign Affairs. 
• It is based on 3 key concepts: 
  • Eco-innovation: Guides Small and Medium Enterprises (SMEs) in incorporating circularity and resilience into every aspect to reduce the environmental and social impact of human activity. 
  • Product Environmental Footprint (PEF): PEF measures the environmental performance of a good or service throughout its life cycle (European Commission). 
  • Circularity: Based on principle Reduce by design, as well as value-retention processes: Reduce, Reuse, Refurbish, Repurpose, Recycle, etc. 
• Benefits for India: Will improve the textiles sector’s competitiveness and market access.

WEF’S C4IR INAUGURATED AT HYDERABAD 

• World Economic Forum (WEF)’s Centre for Fourth Industrial Revolution Hyderabad. (C4IR) inaugurated at 
• This C4IR will be the world’s first thematic centre which will focus on healthcare and life sciences. 
• The inauguration was done during 21st edition of Bio Asia 2024
• WEF’s C4IR initiative is aimed at harnessing potential of technological progress for equitable and human centred transformation of industries, economies and societies. 

About 4IR (4th Industrial Revolution) 

• 4IR means the digital transformation of the manufacturing industry by technologies such as Artificial Intelligence, Additive Manufacturing, Internet of Things (IoT), etc.
• It also refers to “smart factories”–which are fully connected cyber-physical systems that merges the physical and digital aspects. 

Applications 4IR in healthcare and life sciences 

• Monitoring, recording, visualization and sharing of symptoms using wearable devices. 
• Evidence based care through health profiling and clinical registries. o Facilitates Precision Medicine and targeted drug delivery. 

Challenges: Fragmented and siloed patient information, lack of skilled personnel, privacy concerns, security issues due to cyber challenges, ethical issues, etc. 

Earlier, C4IR(INDIA) centre was also established in Maharashtra. It is coordinated by NITI Aayog.

“The Four Industrial Revolutions“

• 4.0 – 4th revolution: Cyber physical systems Icon: Computer screen with various symbols
• 3.0 – 3rd revolution: Electronic and IT System, automation Icon: Computer chip or processor
• 2.0 – 2nd revolution: Mass Production and electricity Icon: Factory or assembly line with a lightning bolt
• 1.0 – 1st revolution: Mechanization, steam and water power Icon: Machine or engine with water/steam symbol

SABROOM LAND PORT (SLP) 

PM inaugurated Sabroom Landport in Tripura located along India-Bangladesh international border. 

About SLP 

• It is connected to Chittagong port of Bangladesh through Maitree Bridge on River Feni. 
• It will facilitate movement of passengers and cargo between India and Bangladesh. 

Land Ports 

• These are areas on international border including portions of national highways, State highways, etc., notified as land customs station or immigration check post, with facilities for clearance and transport of passengers and goods across the borders. 
• Currently, there are 11 Land Ports operational in India (excluding SLP). 

 SUDARSHAN SETU 

Prime Minister has inaugurated Sudarshan Setu in Gulf of Kutch. 

About Sudarshan Setu (Signature Bridge) 

• India’s longest cable-stayed bridge with solar panels installed on upper portions of the footpath, generating one megawatt of electricity. 
• Four-lane bridge connects Okha mainland and Beyt Dwarka island in Gujarat. 
• It will ease transportation and reduce time of devotees travelling between Dwarka and Beyt Dwarka. 
• It features a footpath adorned with verses from Bhagavad Gita and images of Lord Krishna on both sides.

 SELA TUNNEL 

Prime Minister inaugurated strategically important Sela tunnel in Arunachal Pradesh. 

About Sela tunnel 

• Constructed on road connecting Tezpur in Assam to Tawang in Arunachal Pradesh by Border Road Organization’. 
• Constructed using New Austrian Tunnelling Method (NATM).
  • NATM is a support method to stabilize tunnel perimeter with the help of sprayed concrete and other support and uses regular monitoring to control stability of tunnel. 
• World’s longest bi-lane tunnel (~1.5 kms) to provide all-weather connectivity at an altitude above 13,000 ft. 

ECONOMIC INEQUALITY IN INDIA

Oxfam Report on income and wealth inequality in India. 

• The income shares of the top 1% have consistently increased.
• The income share of the bottom 50% has consistently declined.
• The top 5% of Indians own more than 60% of the country’s wealth.

About Economic Inequality in India

• Wealth Inequality: India is one of the most unequal countries. Rich are getting richer at a much faster pace while the poor are still struggling to earn a minimum wage (Oxfam report). 
• Income Inequality: 22.6% of the national income went to the top 1% (World Inequality database, 2022-23). It is among the very highest in the world, higher than even the US.
  • Rural-Urban Divide: Average Monthly Per Capita Consumption Expenditure is Rs. 3,773 in rural and Rs. 6,459 in urban India (Household Consumption Expenditure Survey 2022-23). 
  • Gender Pay Gap: In India, men earn 82 % of the labour income, whereas women earn 18 % of it (World Inequality Report 2022). 

INHERITANCE TAX 

Inheritance tax is levied on property/asset inherited upon an individual’s death. It differs from estate tax, which is levied on the total value of a deceased person’s estate. 

• It is levied by many countries. E.g. Japan (tax rate is 55%), South Korea (tax rate is 50%) etc.

History of Inheritance Tax in India 

• In India, currently there is no inheritance tax. 
• Earlier, estate duty was imposed in 1953. The tax rate reached up to 85%, making it highly unpopular. Thus, it was abolished in 1985. 
• Similar to Estate duty, gift tax and wealth tax were imposed in India.
  • These were abolished in 1998 and 2015 respectively. However, gift tax was re-introduced in 2004.
    • Under Gift Tax, any gifts received exceeding Rs 50,000 in a financial year is added to the person’s “income from other sources” and taxed according to the income tax slab. 
    • Exceptions include donations, inheritance, and gifts from close relative, gifts during weddings etc. 

Benefits of Inheritance Tax 

• Revenue Generation: It may lead to an increase in revenue generation for the government which can be used for social sector programs to uplift poor people. 
• Reducing Wealth Inequality: It can mitigate the concentration of wealth and reduce economic inequality by redistributing a portion of inherited wealth to fund public programs and services. 
• Promoting Meritocracy: Taxing inherited wealth can help create a more level playing field and promote a meritocratic society. This is because, taxing inherited wealth ensures that success is based more on individual effort and talent rather than family wealth and privilege. 
• Encouraging Productive Investment: It can encourage wealthy individuals to invest their wealth more productively during their lifetimes, rather than simply passing it on to their heirs. 
• Intergenerational Equity: Inheritance tax can help ensure that resources are more evenly distributed across generations, rather than perpetuating dynastic wealth accumulation.

UNEMPLOYMENT IN INDIA 

Status of Unemployment in India 

• Centre for Monitoring Indian Economy: Unemployment rate saw an increase from 7.4 per cent in March 2024 to 8.1 per cent in April 2024. 
• NSSO Data: According to Periodic Labor Force Survey (PLFS) for Calendar Year 2023 released by National Sample Survey Office (NSSO), unemployment rate was 3.1% for calendar year 2023 (in contrast to global unemployment rate of 5.1% in 2023).
  • Urban unemployment rate (5.2%) for calendar year 2023 was higher than rural unemployment rate (2.4%). 
  • According to PLFS for Calendar Year 2023 women’s labor force participation rate was 41%. 
• World Bank Report: In the “South Asia Development Update Jobs for Resilience” report, highlighted below average employment ratios for women in India. 
• International Labor Organization (ILO) report: The “India Employment Report 2024” revealed that one out of every three unemployed individuals was young. 

Reasons behind Unemployment in India 

• Higher population Growth: World Bank has warned that South Asia region including India was not making use of its demographic dividend.
• Illiteracy: According to the ILO report, despite the considerable progress, the level of educational attainments at higher levels remains low and quality is a concern. This acts as a challenge to employment. 
• Skill gap & Challenges in Skill Development: Only about 4.7% of Indian labor force has undergone any formal skill training. 
• Impact of automation and technology on job market: Manufacturing is becoming more capital-intensive and automated, which provides growth but doesn’t provide mass employment. 
• Seasonal nature of employment in certain industries: About 45.76% of the total workforce is engaged in agriculture (Seasonal employment) and allied sector during 2022-23. 
• Casual and informal labor: Due to a scarcity of jobs, individuals often resort to informal sector employment, characterized by low and inconsistent wages. 

Steps Taken towards employment generation 

• Aatmanirbhar Bharat Rojgar Yojana (ABRY): It has been launched as part of Atmanirbhar Bharat package 3.0 to incentivize employers for creation of new employment along with social security benefits. 
• Pradhan Mantri Mudra Yojana (PMMY): Provides collateral free loans upto Rs. 10 lakh to micro/small business enterprises and individuals to enable them to setup or expand their business activities. 
• Prime Minister Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi Scheme): To facilitate collateral free working capital loan to street vendors to restart their businesses, which were adversely impacted during the Covid-19 pandemic. 
• PM Vishwakarma Scheme: To provide end-to-end support to artisans and crafts people of rural and urban areas across the country. The Scheme aims to strengthen and nurture Guru-Shishya parampara. 
• National Education Policy 2.0: It integrates vocational education into mainstream education and proposes that all students receive vocational education from Class 9 onwards. It aims to increase the employability of future generations by emphasizing skill development. 
• Deen Dayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM): A scheme under the Ministry of Rural Development that organizes rural poor women into Self Help Groups. 
• Pradhan Mantri Kaushal Vikas Yojana: Launched by Ministry of Skill Development and Entrepreneurship (MSDE) and implemented by National Skill Development Corporation (NSDC), this Skill Certification scheme enables the youth to take up industry relevant skill training. 
• Others: Make in India, Start-up India, Stand-up India, Digital India, Smart City Mission, Rozgar Melas, etc. 

Four key employment and unemployment indicators:

• Labor Force Participation Rate (LFPR): Defined as the percentage of persons in the labor force (i.e., working or seeking or available for work) in the population.
• Worker Population Ratio (WPR): Described as the percentage of employed persons in the population.
• Activity Status – Usual Status: The activity status is determined based on the reference period of the last 365 days preceding the date of survey.
• Activity Status – Current Weekly Status (CWS): Determined on the basis of a reference period of last 7 days preceding the date of survey.

GROSS FIXED CAPITAL FORMATION (GFCF) 

The sluggish growth of private Gross Fixed Capital Formation (GFCF) as a percentage of Gross Domestic Product (GDP) at current prices has been a significant challenge for the Indian economy.

What are Capital Formation (CF) and Gross Fixed Capital Formation (GFCF)? 

• Capital formation: It refers to the process by which resources are invested in assets like plants, equipment, machinery, etc. as well as in human capital through education, health, skill development, etc. 
• Gross Capital Formation (GCF): It refers to the growth in the size of fixed capital in an economy. It includes
  • Gross Fixed Capital Formation (GFCF): Like land improvements; plant, machinery, and equipment purchases; and the construction of roads, etc. 
  • Change in stock (CIS) of raw materials, semi-finished and finished goods: Stocks of goods held by firms to meet temporary fluctuations in production or sales. 
  • Net acquisition of valuables: like gold, gems, ornaments and precious stones etc. 
• Net capital formation (NCF) is distinguished from GCF in that NCF includes depreciation, obsolescence and accidental damage to fixed capital.

Capital goods: All goods produced for use in future productive processes. This includes machinery, equipment, plants, other buildings and structures, and producers’ stocks of raw materials etc. These are called capital goods.

GFCF includes:

• Structure equipment such as airport, roads etc.
• Addition to livestock used repeatedly (such as dairy cattle, sheep etc.)
• Addition to cultivated crops harvested repeatedly.
• Major repair and maintenance that prolong economic life of assets.
• Intangible assets like software or artistic originals

GFCF does not include:

• Transaction intended as intermediate consumption.
• Machinery and equipment intended for household final consumption expenditure.
• Losses due to natural disaster (flooding, forest fire, etc.)

START-UPS IN RURAL INDIA 

Start-ups are emerging as a beacon of hope in Rural India, especially in the realm of agriculture. 

Role of Start-ups in Rural Economy 

• Rural Development: Scaling startups focused on tackling issues in traditional livelihood practices can push for overall rural economic improvement and achieve the vision of ‘Atmanirbhar gaon’. 
• Employment Generation: Rural startups not only provide innovative solutions to problems but also create employment and livelihood opportunities in rural India. E.g., Meesho, Udaan etc. 
• Education and Skill Development: Rural-urban divide in education accessing has been abridged by the emergence of rural Ed-tech startups. E.g., Paathshaala, Learning Delight etc. 
• Financial Inclusion: Fintech start-ups are working towards providing access to affordable financial services like microcredit, insurance, and digital payments in rural areas. E.g., Bank Saathi 
• Women Empowerment: The SHG led startups have led to the socio-political and economic empowerment of rural women. E.g., Lijjat Papad, SARAL JEEVAN SAHELIS, FARM DIDI ETC. 
• Environmental Sustainability: Rural startups have been contributing to the vision of clean and green India by focusing on harnessing renewable energy. E.g., AgriVijay, Earthshastra Ecotech pvt. Ltd. 
• Water Governance: Several Start-ups are striving to make water accessible and affordable, save agriculture water etc. E.g., Water lab India, Kheyti, boon etc. 
• Agricultural innovation: such as Irrigation as a Service (IaaS).
  • IaaS is an irrigation technology that provides hassle free, pay per use and cost effective on demand irrigation to small and marginal farmers. 
  • It functions on a subscription or pay-per-use basis meaning farmers pay a fixed monthly fee or a fee based on water usage. 
  • Benefits: Improved water efficiency and crop yields, beneficial for water intensive crops like sugarcane, soil health monitoring etc. 

Initiatives Undertaken 

• Startup India: Launched in 2016 to build a strong eco-system for nurturing innovation and startups in the country which will drive economic growth and generate large scale employment opportunities. 
• Startup India Seed Fund Scheme: It aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization. 
• NewGen Innovation and Entrepreneurship Development Centre: It has a mission to promote knowledge based and technology-driven startups by harnessing young minds and their innovation potential in an academic environment. 
• Innovation & Agri-Entrepreneurship Programme: Aims to nurture and promote agri-entrepreneurs by providing financial assistance and nurturing the innovation ecosystem in the agriculture sector. 
• Agriculture Accelerator Fund (AAF): Under the AAF, financial support is provided to entrepreneurs in the field of agriculture and allied sectors to set up their startups.

GLOBAL UNICORN INDEX 2024 

The ‘Global Unicorn Index 2024’ released by research group Hurun. 

• Key-findings of the report 
• In 2023, India had 67 unicorn startups (68 in 2022) and placed third globally. E.g., Delhivery, Nykaa etc. 
• USA led with 703 unicorns, followed by China with 340. 
• The US has 50% of the world’s known unicorns followed by China (25%) and Rest of the World (25%). 
• Founders from India produced more offshore unicorns than any other country, co-founding 109 unicorns outside of India compared with 67 in India. 
• A unicorn startup is a privately held company, without any listing on public exchanges, valued at $1 billion or more and supported with venture capital.
  • Gazelles: Start-ups most likely to ‘go unicorn’ within 3 years. 
  • Cheetahs: Start-ups most likely to ‘go unicorn’ within 5 years.

 INTERNATIONALIZATION OF RUPEE 

Recently, Prime Minister asked the Reserve Bank of India (RBI) to prepare a 10-year strategy to make the Indian rupee a globally accessible and acceptable currency, enabling its internationalization. 

About internationalization of currency 

• An international currency is one that is used and held beyond the borders of the issuing country, not merely for transactions with that country’s residents, but also, for transactions between non-residents. 
• Currency internationalization has thus been described as the international extension of a national currency’s three basic functions of serving as a unit of account, medium of exchange and store of value. 
• Currently, the US dollar, the Euro, the Japanese yen and the pound sterling are the leading reserve currencies in the world. 
• India moved toward partial convertibility in the late 1990s and made subsequent progress with multiple reforms.
  • India has enabled capital-account transactions, such as permitting corporate entities to raise resources through external commercial borrowings and Masala bonds (rupee-denominated bonds issued by Indian entities outside India). 

Determinants of the internationalization of currency:

• Economic fundamentals such as economy’s size and trade network. (Represented by an icon showing a graph or chart)
• Depth and liquidity of capital markets. (Represented by an icon showing coins or currency)
• Stability and convertibility of currency. (Represented by an icon showing exchange or conversion)

Benefits of Internationalization of Currency 

• Limit exchange rate risk: It allows the country’s exporters and importers to limit exchange rate risk as domestic firms can settle their exports/imports in their currency. 
• Access to international financial markets: It permits domestic firms and financial institutions to access international financial markets without assuming exchange rate risk. 
• Boost capital formation: A larger, efficient financial sector reduces capital cost and widens set of financial institutions. 
• Financing budget deficit: It may allow a country’s government to finance part of its budget deficit (or current account deficit) by issuing domestic currency debt in international markets rather than issuing foreign currency instruments. 
• Regulating Capital Flows: It results in lowering the impact of sudden stops and reversals of capital flows and enhances the ability to repay external sovereign debt. 
• Reducing requirement of forex reserves: It reduces the requirement to maintain and depend on large foreign exchange reserves in convertible currencies to manage external vulnerabilities.
  • Presently, India’s foreign exchange reserves are at a record high of $642.63 billion as of March 2022.

“Indian rupee was the legal tender in some Gulf countries, like Kuwait, Bahrain, Qatar and UAE, till the early 1970s.”

Key challenges in the internationalization of currency:

• Exchange Rate Volatility: May result in a potential increase in volatility of its exchange rate in the initial stages.
• Monetary Policy Dilemma or Triffin Dilemma: It is a conflict that arises when a country needs to supply enough of its currency to meet global demand while also maintaining its domestic monetary policies.
• Vulnerability to External Shock: May accentuate an external shock, given the open channel of the flow of funds in and out of the country and from one currency to another.
• Macroeconomic Stability: Integration of financial markets could affect stability in the long-term.

Approach for internationalization of Rupee 

• Capital Account Convertibility: INR (Indian National Rupee) is fully convertible in the current account but partially in the capital account.
  • There is need to review extant Foreign Exchange Management Act (FEMA) provisions and extending incentives for international trade settlements in INR. 
  • Banking Services (loans, guarantees, credit lines, etc.) in INR through offshore branches of Indian banks. 
• Promoting international use of INR: To facilitate international financial transactions in INR, an efficient settlement mechanism, availability of liquidity and development of robust cross-border payments system would be required.
  • Currency Swaps and Local Currency Settlement (LCS): These provide currency diversification that stabilises the local currency, protect businesses against currency risk exposure and reduces transaction costs. 
  • Internalisation of Indian Payment Systems: Extension of global reach of India’s payment systems including Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT) and Unified Payments Interface (UPI). 
  • Inclusion of INR in Continuous Linked Settlement (CLS): CLS is a global system for the settlement of foreign currency transactions on a Payment vs Payment (PvP) basis.
    • CLS system currently settles trades in 18 currencies. However, INR is not among those currencies. 
  • Creation of an Indian Clearing System: Clearing system would provide its member banks with a market to purchase currencies against their domestic currency. 
  • INR as a vehicle currency/contender to Special Drawing Rights (SDR) basket: It can be taken forward by encouraging trade invoicing in INR by expanding trade relations with other economies.

“Capital account convertibility is the ability or freedom to convert domestic currency for capital account transactions.”

Special Drawing Rights (SDR)SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reservesThe value of the SDR is calculated from a weighted basket of 5 major currencies, including the U.S. dollar, the Euro, Japanese yen, Chinese Renminbi, and British pound.

Several steps taken towards the internationalization of the Indian Rupee (INR). 

• Use of Indian Payment Infrastructure: India has linked its UPI system with Singapore’s PayNow and is expanding UPI’s global reach.
• Special Vostro Rupee Accounts (SVRAs): The RBI has established a mechanism for INR trade settlement with 22 countries by allowing their banks to open SVRAs.
• INR as a Designated Foreign Currency in Sri Lanka: This has facilitated INR-based bilateral trade.
• Asian Clearing Union (ACU): The RBI proposed including INR as a settlement currency in the ACU.
• Gujarat International Finance Tec-City (GIFT City): It hosts Financial Market Infrastructures (FMIs), including international exchanges and a depository.
• Bilateral Swap Arrangements (BSA):
  • India has a BSA with Japan for up to USD 75 billion as a financial safety net.
  • India recently signed a 35 billion rupees currency swap agreement with the UAE.

BASEL III ENDGAME 

About Basel III Endgame 

• The final set of rules of Basel III norms has been called “Basel III Endgame.”
  • Basel III is a set of measures developed by the Basel Committee on Banking Supervision to strengthen the regulation, supervision, and risk management of banks. 
  • Potential impact of the Endgame includes Globally Systemically Important Banks (G-SIBs) experiencing an increase of 21% in capital requirements. 
  • Proposed changes are aimed at improving the “strength and resiliency” of the banking system while also improving transparency and consistency in banks’ capital frameworks. 

Basel Committee on Banking Supervision (BCBS):

• Genesis: Established by central bank Governors of G10 countries at the end of 1974.
• Members: It has 45 members comprising central banks and bank supervisors (RBI is one of its members).
• Functions:
  • Established to enhance financial stability by improving the quality of banking supervision worldwide.
  • Serves as a forum for regular cooperation between member countries on banking supervisory matters.
• Governance: BCBS reports to its oversight body “Group of Central Bank and Governors and Heads of Supervision (GHOS)”.
• Implementation of decisions: Its decisions do not have legal force.

Important Terminologies related to Basel Norms 

• Tier I capital (Core Capital): It include paid up share capital, stocks and disclosed reserve.
  • These are more permanent in nature and as a result, have high capacity to absorb losses. 
• Tier II capital (Supplementary Capital): It includes all other capital e.g. Undisclosed reserve, revaluation reserves, general provisions and loss reserves.
  • It is considered less reliable than Tier 1 capital because it is more difficult to accurately calculate and more difficult to liquidate. 
  • Risk weighed Assets (RWA): RWA is linked to minimum amount of capital that banks must have relative to bank’s risk from its lending activities. The more the risk, the more the capital needed to protect depositors. 
  • Capital Adequacy Ratio (CAR) or Capital to Risk (Weighted) Assets Ratio: CAR is a percentage that measures a bank’s financial health by comparing its capital to its risk-weighted assets. 
  • Liquidity Coverage Ratio (LCR): LCR is a requirement that requires banks to maintain a minimum amount of liquid assets to withstand cash outflows over a 30-day period. 
  • Leverage ratio: The leverage ratio i.e. ratio of Tier I capital to the bank’s average total consolidated assets (sum of the exposures of all assets and non-balance sheet items).
    • Leverage ratio shows how much of a company’s capital comes from debt, or how well it can meet its financial obligations. 
  • Net Stable Funding Ratio (NSFR): It is a liquidity standard that measures the amount of stable funding a bank has relative to amount it needs.
    • It promotes resilience by creating incentives for banks to fund their activities with more stable sources of funding. 
  • Capital Conservation Buffer: Banks are required to hold capital conservation buffer to ensure cushion of capital that can be used to absorb losses during financial stress. 
  • Countercyclical Buffer: It is a mechanism that allows banks to build up capital during periods of excessive credit growth to help the banking system absorb losses during downturns

ASSET MONETIZATION :Recently, the National Highway Authority of India (NHAI) raised its highest-ever monetization value of Rs. 15,624.9 Crore through the Infrastructure Investment Trust (InvIT) mode. 

About Asset Monetization (AM) 

• Genesis: The idea of AM was first suggested by a committee led by economist Vijay Kelkar in 2012.
  • AM was announced in the Union Budget 2021-22 through the National Monetisation Pipeline. 
• Definition: AM is the process of creating new sources of revenue for the government and its entities by unlocking the economic value of unutilised or underutilised public assets.
  • A public asset can be any property owned by a public body, roads, airports, pipelines, etc. 
• Authority: An authorised Core Group of Secretaries on Asset Monetisation (CGAM) has been constituted under the chairmanship of the Cabinet Secretary to implement and monitor the project.
• Process of Asset Monetisation (AM) 
  • AM involves the license/lease of a government-owned asset to a private sector entity for a specific period. 
  • The transfer of rights in exchange for payments is governed by a concession agreement that facilitates balanced risk-sharing between the public authority and the private party.  

Need for Asset Monetisation in India 

• Fund the National Infrastructure Pipeline (NIP): NIP is aimed to provide world-class infrastructure to citizens and attract investments into this sector.
  • NIP envisages an investment of 111 lakh crore over 2020 to 2025. 
• Reduction of the fiscal strain: The capital invested by private parties during AM can reduce the fiscal burden on the public sector and free up resources for developing new infrastructure projects. 
• Provision of finance to the State for the creation of new infrastructure: AM plays an important role in providing finance to the State for the creation of new infrastructure. 
• Benefit from private sector efficiencies: AM will invite private sector efficiencies and transparency in the management of public assets. 
• Facilitate economic development of the country: A robust AM plan could upgrade economic productivity, encourage demand, create jobs, boost growth prospects, and accelerate the country’s economic development. Initiatives taken for Asset Monetization 

 Concession Agreement (CA): “It is a contract that gives a company the right to operate a specific business within a government’s jurisdiction or on another firm’s property, subject to particular terms.”

ASSET RECONSTRUCTION COMPANIES 

The Reserve Bank of India (RBI) has issued master Direction – Reserve Bank of India (Asset Reconstruction Companies) Directions, 2024. 

• Issued Under: The powers conferred by Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.
  • Applicable for every ARC registered with the Reserve Bank under Section 3 of the SARFAESI Act, 2002. 
• Aim: To streamline and regulate the functioning of ARCs in India, ensuring transparency, accountability, and integrity in the financial system. 

About ARCs 

• Definition: ARC is a financial institution that buys the Non Performing Assets (NPAs) or bad assets from banks and financial institutions so that the latter can clean up their balance sheets. 
• ARCs are required to resolve the assets within a maximum of 8 years of acquisition of financial assets and redeem the SRs representing the assets. 
• Genesis: SARFAESI Act in 2002 envisaged that ARCs would be registered and regulated by RBI. There are 29 ARCs in operation in India (2022).
  • Narsimham Committee – II (1998) proposed asset reconstruction companies, on the similar lines of asset management companies’ prevalent globally. 
• Types: Based on ownership, ARCs could be public, private or public-private partnership. 
• Examples: National Asset Reconstruction Company Limited (NARCL), India Debt Resolution Company Ltd etc.

Significance of ARCs (Asset Reconstruction Companies)

• Free up Stressed asset: ARCs allow banks/financial institutions to focus on their core function of lending by removing the sticky stressed assets from their books.
• Asset Recovery: ARCs make recovery for lenders by acting as the manager of the stressed assets, enhancing the overall health of the financial system.
• Reviving Business: ARC scan help the borrowers in reviving their businesses.

 Capital Adequacy Ratio (CAR):

• Definition: Capital Adequacy Ratio (CAR) is defined as a measure used to assess the financial strength and stability of banks and other financial institutions.
• Formula: The formula to calculate CAR is given as: CAR = (Tier 1 Capital + Tier 2 Capital) / Risk-Weighted Assets

ADVANCE PRICING AGREEMENTS (APAS)

The Central Board of Direct Taxes (CBDT) has signed highest ever record 125 APAs (including Unilateral and Bilateral APAs) in FY 2023-24 with Indian taxpayers. 

About Advance Pricing Agreements (APAs) 

• It is an agreement between a taxpayer and tax authority. 
• APAs endeavors to provide certainty to taxpayers in domain of transfer pricing by specifying methods of pricing.
  • APA helps determine arm’s length price (ALP) of international transactions in advance for a maximum of five future years. 
  • Further, taxpayer has option to roll back APA for four preceding years, as a result of which, tax certainty is provided for nine years. 

• Transfer Pricing: It is the price of goods and services exchanged between companies that are under common ownership or control.
• Arm’s Length Principal of Pricing: This principle states that the price agreed in a transaction between two related parties must be the same as the price agreed in a comparable transaction between two unrelated parties.

Central Board of Direct Taxes (CBDT) in India. 

• Genesis: CBDT is a statutory authority established under the Central Board of Revenue Act, 1963.
• Ministry: It is part of the Department of Revenue in the Ministry of Finance.
• Functions:
  • CBDT provides essential inputs for policy and planning of direct taxes in India.
  • It is also responsible for the administration of direct tax laws through the Income Tax Department.
• Composition: CBDT consists of a Chairman and six Members.
• Location: The image indicates that CBDT is located in New Delhi.

Double Taxation Avoidance Agreement (DTAA) 

• India & Mauritius signed (not yet ratified) a protocol amending the Double Taxation Avoidance Agreement (DTAA).
• DTAA is an agreement between two countries/territories with an objective to avoid double taxation on same declared asset in two different countries/territories. 
• DTAA between India and Mauritius was first signed in 1982 and amended in 2016. 

Significance of DTAA 

• Promotion of cross-border investment by reducing tax burden on foreign investors. 
• Equitable allocation of right to tax between the ‘source’ and ‘residence’ countries. 
• Provides legal certainty on taxing international income. 

Issues associated with DTAA 

• Treaty Shopping: Takes place when residents of a country, which is not a party to the DTAA, take advantage of the provisions through indirect routes. 
• Double non-taxation: Abuse of DTAA to avoid paying taxes in both countries. 
• Differential interpretations of tax treaties leading to protracted litigations. 

Base Erosion and Profit Shifting (BEPS) 

• Refers to tax planning strategies that exploit gaps and mismatches in tax rules for tax avoidance by shifting profits from higher tax to lower tax jurisdictions. 
• Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS aims to update international tax rules and lessen opportunity for tax avoidance by multinational enterprises. 
• India signed the convention in 2017.

SETTLEMENT CYCLE 

Securities and Exchange Board of India (SEBI) introduced beta version of T+0 rolling settlement cycle on optional basis in addition to the existing T+1 settlement cycle in Stock Markets. 

More on News: 

• Settlement Cycle refers to the period within which securities and funds are delivered and settled after a trade is executed between a buyer and a seller. 
• Traditionally, Indian exchanges followed a T+2 settlement cycle, meaning trades were settled in two business days after the trade execution date (T).
  • T+2 was shifted to T+1 (1 day settlement) in January 2023. 
• T+0 Settlement Cycle refers to a system where Settlement of trades shall happen on the same day after the closure of market. 

 INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA (IRDAI) 

The Insurance Regulatory and Development Authority of India (IRDAI) celebrated its 25th Anniversary.

Insurance Regulatory and Development Authority of India (IRDAI)

Genesis

• Formed based on Malhotra Committee recommendations
• Constituted as an autonomous body in 1999 and incorporated as a statutory body in 2000, under the Insurance Regulatory and Development Authority Act, 1999

Objectives

• Speedy and orderly growth of insurance industry
• Speedy settlement of genuine claims
• Effective grievance redressal mechanism, etc.
• Focus of IRDAI is to strengthen the three pillars of the entire insurance ecosystem:
  1. Insurance customers
  2. Insurance providers
  3. Insurance distributors

Ministry

Ministry of Finance

Composition

IRDAI is a 10-member body:

• 1 Chairman
• 5 Full-time members
• 4 Part-time members

Role of IRDAI

1. Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration
2. Protect the interest of the policyholders
3. Adjudication of disputes between insurers and intermediaries or insurance intermediaries
4. Promoting efficiency in the conduct of insurance business and regulating professional organizations connected with the insurance and reinsurance business

Domestic Systemically Important Insurers (D-SIIs) 

• Insurance Regulatory and Development Authority of India (IRDAI) releases 2023-24 – List of D-SIIs.
  • Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC Re) and New India Assurance Company continue to be identified as D-SIIs. 
• D-SIIs refer to insurers of such size, market importance, and domestic and global inter connectedness, whose distress or failure would cause a significant dislocation in the domestic financial system.
  • D-SIIs are perceived as ‘too big or too important to fail’ (TBTF). 
  • D-SIIs are subject to additional regulatory measures. 

PRADHAN MANTRI FASAL BIMA YOJANA (PMFBY) 

Objectives of PMFBY (Pradhan Mantri Fasal Bima Yojana),

• To provide insurance coverage and financial support to farmers in the event of failure of any of the notified crops as a result of natural calamities, pests & diseases.
• To stabilise the income of farmers to ensure their continuance in farming.
• To encourage farmers to adopt innovative and modern agricultural practices.

Salient features of PMFBY (launched in 2016) 

• Purpose: Comprehensive crop insurance from pre-sowing to post-harvest period 
• Type: Central Sector Scheme. 
• Nature: Demand-driven scheme and is voluntary for the States as well as farmers 
• Implementing Agency: Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW), Ministry of Agriculture & Farmers Welfare (MoA&FW) and the concerned State. 
• Coverage of Farmers: All farmers including sharecroppers and tenant farmers can avail it. o However, in 2020, the scheme was made optional for all farmers including farmers who have taken agri-loans. 
• Coverage of Crops: Food crops (Cereals, Millets and Pulses); Oilseeds; Annual Commercial / Annual Horticultural crops, etc. 
• Premium to be paid: Premium is paid as % of the sum assured or Actuarial Premium Rate (APR), whichever is less. APR is the premium rate set by insurance companies.
  • Premium by farmers: 
    • 2% for Kharif crops
    • 1.5% for Rabi crops
    • 5% for commercial horticulture crops 
• Other notable features: Compulsory use of at least 0.5% of the gross premium collected by insurance companies for IEC activities; intensive use of technology; freedom to States to choose risk cover as per requirements, etc

30 YEARS OF MARRAKESH AGREEMENT 

• World Trade Organization (WTO) is celebrating 30 years of the Marrakesh Agreement. 
• Marrakesh Agreement was signed in Marrakesh, Morocco, by 123 countries in 1994 after the conclusion of the Uruguay Round. 
• It led to the establishment of the WTO in 1995, replacing General Agreement on Tariffs and Trade (GATT) as an international organization. 

About Marrakesh Agreement: 

• It serves as basic framework for trade relations among all WTO members.
• It expanded the scope beyond trade in goods to trade in services, intellectual property, and other topics. 
• It established modern multilateral trading system, facilitating negotiations, dispute settlement, and economic cooperation among members. 
• It created WTO’s governance, establishing the Ministerial Conference (highest decision making body), General Council, and specialized councils. 

Achievements of WTO 

• Lowering trade barriers: Since 1995, real volume of world trade has expanded by 2.7 times and average tariffs have almost halved, from 10.5% to 6.4%. 
• Rise of Global Value Chains: Trade within these value chains today accounts for almost 70% of total merchandise trade. 
• Growth in developing countries: Fastest poverty reduction since 1995 and increased purchasing power in all countries. 
• International Trade Agreements and Rules: TRIPS Agreement, Nairobi Package, Trade Facilitation Agreement, Doha Development Agenda etc.  

UNCTAD REBRANDED AS UN TRADE AND DEVELOPMENT 

• United Nations Conference on Trade and Development (UNCTAD) rebranded as UN Trade and Development. 
• The rebranding marks the start of the 60th anniversary of the organization.
  • This strategic move underscores the organization’s commitment to increasing its global voice on the behalf of developing countries.

Key Achievements: 

• Implementation of Financing for Development, as mandated by the global community in the Addis Ababa Agenda (2015), together with four other major institutional stakeholders.
  • The institution includes the World Bank, the International Monetary Fund, the World Trade Organization, and the United Nations Development Programme. 
• Assisted countries under the Debt Management and Financial Programme. 

About UNCTAD (United Nations Conference on Trade and Development)

• Genesis:
  • Established as a permanent intergovernmental body by the United Nations General Assembly in 1964
  • Now rebranded as UN Trade and Development
• Objective:
  • To aid developing countries, particularly the least developed ones, and transitioning economies in integrating effectively into the global economy
• Members:
  • 195 nations
  • India is confirmed to be a member
• Functions:
  • Helps countries address macro-level development challenges
  • Assists economies to make them less dependent on commodities
  • Aims to limit their exposure to financial volatility
• Organizational Structure:
  • Substantive work is carried out by five divisions
  • Under the leadership of the Secretary-General
• Flagship Reports:
  • Trade and Development Report
  • World Investment Report
  • Digital Economy Report
• Location: Geneva, Switzerland

LIVING WAGE AND MINIMUM WAGE 

• The government sought technical assistance from ILO to create a framework for living wage 
• Presently, India follows the minimum wage, which has remained stagnant since 2017. 
• The Code on Wages passed (2019), proposed a universal wage floor which shall apply to all states once implemented. 

Comparison between living wage and minimum wage:

Differential Aspects	Living Wage	Minimum Wage
Definition	The wage level necessary to afford a decent standard of living for workers and their families.	The lowest legal hourly wage that employers must pay their workers.
Aim	To improve workers’ quality of life.	To protect workers from exploitation.

• The key difference is that a living wage aims to provide a decent standard of living, while a minimum wage sets a legal floor to prevent extreme exploitation. The living wage concept typically results in a higher wage level as it considers the cost of living for workers and their families.

CREDIT DEPOSIT RATIO (CDR) 

About CDR: 

• It is the ratio of how much a bank lends out of the deposits it has mobilised. 
• A higher CDR suggests that a significant portion of the bank’s resources are allocated to loans.
  • It could potentially stimulate economic growth but also implies higher risk. 
• Regulators often monitor CDR to ensure banks maintain a prudent balance between lending and risk management.

SEBI COMPLAINT REDRESS SYSTEM (SCORES 2.0) 

• Securities and Exchange Board of India (SEBI) launched SCORES 2.0 version which strengthens investor complaint redress mechanism in securities market by making process more efficient. 
• SCORES is an online system where investors in securities market can lodge their complaints through web URL and an App. 

Salient features of SCORES 2.0 

• Reduced timelines for redressal of investor complaints across Securities Market i.e. 21 Calendar days from date of receipt of complaint. 
• Introduction of auto-routing of complaints to concerned regulated entity to eliminate time lapses. 
• Integration with KYC Registration Agency database for easy registration.

CLUSTER DEVELOPMENT PROGRAMME (CDP) – SURAKSHA 

Several states are using SURAKSHA platform for disbursing subsidies to horticulture farmers under the CDP.

• CDP is a component of the central sector scheme of National Horticulture Board (NHB). 

About CDP-SURAKSHA 

• SURAKSHA stands for ‘System for Unified Resource Allocation, Knowledge, and Secure Horticulture Assistance’. 
• It allows an instant disbursal of subsidies to farmers in their bank account by utilising the e RUPI voucher from the NPCI. 
• Its key features are database integration with PM KISAN, UIDAI validation, geotagging, geo-fencing etc. 
• CDP-SURAKSHA allows access to farmers, vendors, Implementing Agencies, Cluster Development Agencies etc.

EXPERT COMMITTEE REPORT ON GIFT CITY 

Gujarat International Finance Tech- City (GIFT City) IFSC was established as Special Economic Zone (SEZ) in 2015, in Gujarat. 

• An IFSC caters to customers outside the jurisdiction of the domestic economy. Such centres deal with flows of finance, financial products and services across borders. 
• Opportunities for GIFT IFSC to become Global Finance and Accounting Hub
  • Strong technology-driven outsourcing capabilities. 
  • Large talent pool of skilled manpower in the fields of accounting, etc. 
  • “Accounting and finance services” recognised as one of the 12 Champion sectors in services for exports.

IFSC Authority 

• IFSC Authority is a statutory body established under IFSC Act,2019. 
• A unified regulator for development and regulation of financial products, financial services and financial institutions in IFSCs in India. 

PAYMENT AGGREGATOR (PA) 

About PAs

•  It is a financial technology company that simplifies the process of accepting electronic payments for businesses. E.g., GooglePay, PhonePe, Cashfree etc. 
• It acts as an intermediary between the business and the financial institutions. 
• It is incorporated as a company under the Companies Act, 1956 / 2013. 
• Non-bank PAs require authorisation from RBI under the Payment and Settlement Systems Act, 2007.

INDIA AND GLOBAL VALUE CHAINS (GVCS) 

NITI Aayog CEO highlighted the need for India to get into global value chains (GVCs) to boost exports and secure supply chains. 

What are Global Value Chains (GVCs)? 

• It refers to a production sequence for a final consumer good, with each stage adding value (e.g., production, processing, marketing, transportation, distribution) and with at least two stages taking place in different countries.
  • For example, a smartphone assembled in China might include graphic design elements from the United States, computer code from France, and silicone chips from Singapore. 
• As per OECD, an estimated 70 % of trade occurs through GVC. 
• Countries can participate in GVCs by engaging in either backward or forward linkages based on their economic specialisation.
  • Backward linkages: when one country uses inputs from another country for domestic production.
    • For example, India imports cotton fabric from Italy to make and export shirts. 
  • Forward linkages: when one country supplies inputs/intermediate goods that are used for production in another country.
    • For Example, India supplies auto components to a German automaker for use in car production. 

measures taken to integrate India into Global Value Chains (GVC):

• Foreign Trade Policy 2023:
  • Aims at process re-engineering and automation
  • Goal is to facilitate ease of doing business for exporters
• Production Linked Incentive (PLI) scheme for large scale Electronics manufacturing:
  • Launched in 2020
  • Has encouraged GVC participation
  • Example: 3 of Apple Inc’s contract manufacturers have set up manufacturing bases in India
• One District One Product- Districts as Export Hubs (ODOP-DEH) initiative:
  • Focuses on districts as units for converting into manufacturing and export hubs
  • Involves identifying products with export potential in each district
• Make-in-India Initiative:
  • Launched in 2014
  • Goal is to make India a hub for manufacturing, design and innovation
  • Key outcome: FDI equity inflow in the manufacturing sector increased by 57% between 2014 and 2022

RBI SURPLUS TRANSFER 

Reserve Bank of India (RBI) approved highest-ever surplus transfer of Rs 2.11 lakh crore to government for FY24 which is more than double the previous year’s ₹86,416 crore. 

RBI’s (Reserve Bank of India) income and expenditure:

RBI’s Income:

• Interest on holding of Rupee Securities (RS): Includes interest earned, adjusted with profit/loss on sale and redemption, depreciation, and amortization of RS.
• Interest earned on LAF and MSF operations: Net interest from Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF).
• Interest earned on Loans & Advances: From loans to Central and State Governments, banks, financial institutions, and employees.
• Interest earned from Foreign Sources: Consists of interest income from Foreign Currency Assets (FCA).

RBI’s Expenditure:

• Risk Provisions: A major chunk of expenditure, including two types:
  • Contingency Fund (CF): For unforeseen contingencies like depreciation of securities values, risks from monetary rate policy, etc.
  • Asset Development Fund (ADF): For provisions towards investments in subsidiaries and associated institutions, and to meet internal capital expenditure.
• Printing of notes
• Agency charges: Includes commission to banks, primary dealers, etc.
• Employee cost

Provisions regarding RBI transfer surplus to the government 

• RBI Act, 1934: Under section 48 of the RBI Act, 1934, the RBI is not liable to pay income tax or super tax on any of its income, profits or gains. However, it transfers its surplus to Government after making provisions for contingency funds and ADF.
  • Section 47 of the RBI Act, 1934 mandates that any profits made by the RBI from its operations be sent to the Centre. 
• Committees’ recommendations: Earlier, RBI used to keep a major chunk of this surplus for its Contingency Fund (CF) and Asset Development Fund (ADF). However, after the Malegam Committee (2013) recommendations its transfer of surplus to government increased.
  • Various committees i.e., V Subrahmanyam (1997), Usha Thorat (2004), Y H Malegam (2013) and Bimal Jalan (2018) were formed to decide the ideal amount of surplus transfer. 
• Economic Capital Framework (ECF): It provides a methodology for determining the appropriate level of risk provisions and profit distribution to be made under Section 47 of the RBI Act, 1934.
  • As per this Revised ECF recommended by Bimal Jalan Committee, the amount of surplus that the RBI must transfer to the Centre is determined based on two factors –
    • Realized equity (essentially existing amount in CF): The CF is maintained within a range of 6.5% to 5.5% of the RBI’s balance sheet and the excess amount is to be transferred to the government.
      • The RBI’s Central Board decided to maintain the realized equity level at 5.5%.
    •  Economic capital (essentially CGRA): It should be kept in the range of 20.8-25.4% of the balance sheet and rest should be transferred to government.
      • CGRA includes its capital, reserves, risk provisions and revaluation balances which are unrealized gains, net losses resulting from movement of exchange rate, gold price or interest rate. 

LOGISTICS SECTOR OF INDIA

The major components of logistics are: 

• Procurement of materials from outside suppliers, including negotiation, order placement, inbound transportation etc. 
• Material handling in such a way that the warehouse can process orders efficiently. 
• Warehousing, packaging and inventory control of finished goods until they are sold. 
• Transportation i.e., physical delivery of goods from the organisation to the distributor or dealer and from the dealer to the end customer. 

Steps Taken for Improvement of Logistic Sector in India

National Logistics Policy (NLP) 2022: It addresses the soft infrastructure and logistics sector development aspect. 

• It includes process reforms, improvement in logistics services, digitization, human resource development and skilling. 
• It was launched in 2022 to complement PM Gati Shakti National Master Plan (NMP).
  • PM Gati Shakti NMP addresses integrated development of the fixed infrastructure and network planning. 
• The targets of the NLP are to:
  • Reduce cost of logistics in India – Comparable to global benchmarks of 8-9% of GDP. 
  • Improve the Logistics Performance Index ranking – endeavour is to be among top 25 countries by 2030. 
  • Create data-driven decision support mechanism for an efficient logistics ecosystem. 
• Comprehensive Logistics Action Plan (CLAP) as part of the NLP was launched covering eight action areas including Integrated Digital Logistics Systems, Services Improvement Framework etc. 

Other Steps Taken 

• Unified Logistics Interface Platform (ULIP) It is an indigenous data-based platform which integrates 34 logistics-related digital systems /portals across Ministries / Departments.
• Logistics given infrastructure status: It enabled the logistics sector to access infra-lending at easier terms. 
• Logistics Ease Across Different States (LEADS): An indigenous logistics performance index on lines of the World Bank’s LPI for logistics performance monitoring across states.
  • The survey is conducted annually and States are ranked according to their performance. 
• Multimodal Logistics Parks (MMLPs): They will act as freight aggregation and distribution hubs, and enable long-haul freight movement to reduce transport costs.
  • Government has planned 35 MMLPs with an investment outlay of $6.2 Billion. 
• Bharatmala Pariyojana: About 65,000 km of National Highways are to be constructed in two phases under the program.
• Dedicated Freight Corridors (DFC): To assist in achieving the target mandated under the National Rail Plan 2030 of increasing the share of rail freight traffic from 27% (2019) to 45% (2030). 
• Sagarmala and Inland waterways: It is a flagship programme of the government to promote port-led development in the country through harnessing India’s 7,500 km long coastline and 14,500 km of potentially navigable waterways. 

Logistic Performance Index (LPI) Report for 2023:

• The report is released by the World Bank.
• India’s performance: Ranks 38 out of 139 countries in 2023
  • Improved by 6 places from its rank of 44 in 2018

The LPI is based on six parameters:

• Customs
• Infrastructure
• Ease of arranging shipments
• Quality of logistics services
• Tracking and Tracing
• Timeliness

 INDIA’S AGRICULTURE EXPORT POLICY 

Agricultural exports in India registered 8% decline this year (2023 – 24) and fell short of the ambitious target of $60 billion by 2022 (set by India’s Agricultural Export Policy, 2018).

Agriculture Export Policy (AEP) 2018 

• It is framed with a focus on agriculture export oriented production, export promotion, better farmer realization and synchronization within policies and programs of Government of India. 
• Objective: To Increase Farmer income through value addition and minimize losses across value chain. 

 Targets and aims of India’s Agricultural Export Policy. 

• Double agricultural exports to over US$ 60 Billion by 2022.
• Diversify the export basket, destinations, and boost high value and value-added agricultural exports.
• Promote novel, indigenous, organic, ethnic, traditional and non-traditional agricultural product exports.
• Strive to double India’s share in world agriculture exports by integrating with global value chains.
• Enable farmers to benefit from export opportunities in overseas markets.
• Provide an institutional mechanism for pursuing market access, tackling barriers and dealing with sanitary and phytosanitary issues.

Steps taken for promoting agricultural exports in India, 

• Trade Infrastructure for Export Scheme (TIES):
  • By Ministry of Commerce
  • Assists Central and State Government agencies in creating appropriate infrastructure for export growth
• Market Access Initiatives (MAI) Scheme:
  • By Ministry of Commerce
  • An Export Promotion Scheme to act as a catalyst for promoting India’s exports on a sustained basis
• Agricultural & Processed Food Products Export Development Authority (APEDA):
  • Statutory organization under Department of Commerce
  • Mandate to promote export of agricultural products, including millets, from India
• State-specific Action Plans:
  • Prepared by some states and State Level Monitoring Committees (SLMCs)
  • Nodal Agencies for agricultural exports and Cluster Level Committees formed in several states
• Farmer Connect Portals by APEDA:
  • Platform for farmers, Farmer-Producer Organizations (FPOs), and cooperatives to interact with exporters
• Transport and Marketing Assistance Scheme:
  • Central sector scheme
  • Aims to provide assistance for the international component of freight and marketing of agricultural produce
  • Helps mitigate the disadvantage of higher transportation costs

LAND SQUEEZE 

A report, titled ‘Land Squeeze’ has been released by the International Panel of Experts on Sustainable Food Systems (IPES-Food) showcases pressures on land leading to land inequality in India and across the globe.

Steps taken to address land inequality in India 

Post-Independence Era 

• Abolition of the Zamindari system removed the layer of intermediaries who stood between the cultivators and the state. 
• Tenancy abolition attempted either to outlaw tenancy altogether or regulated rents to give some security to the tenants and was most successful in West Bengal and Kerala. 
• Land Ceiling Acts imposed an upper limit on the amount of land that can be owned by a particular family. 
• Bhoodan Movement initiated by Acharya Vinova Bhave aimed at provisioning of land by gift for the common benefit of the landless. 

Post 2000 

• Scheduled Tribes and Other Traditional Forest Dwellers (Recognition Of Forest Rights) Act, 2006 (Forest Rights Act, 2006) to ensure land tenure, livelihood and food security of the forest dwelling Scheduled Tribes and other traditional forest dweller. 
• Ministry of Panchayati Raj’s Svamitva Scheme provides legal ownership cards to the property owners by mapping land parcels using drone technology. 
• Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013 to ensure a humane, participative, informed and transparent process for land acquisition for industrialisation 
• Model Tenancy Act aims to balance the rights of all types of tenant and landlords and create an accountable and transparent ecosystem for renting of premises in disciplined and efficient manner. 

COMMODITY DEPENDENCE 

About Commodity dependence 

• A country is dependent on the export of commodities (or “commodity-dependent”) when its merchandise exports are heavily concentrated on primary commodities (like crude oil, coal, iron ore, etc.). 
• The source of commodity dependence can be linked to a country’s persistent or structural conditions, such as its resource endowment and factor composition, institutional framework, geographic situation, history among other factors.

ELIGIBILITY FOR BANKING BY SFBS UNIVERSAL 

RBI set eligibility criteria for Small Finance Banks (SFB) to transit into universal banking under on-tap licensing. 

• Universal banks (UBs) are banks that offer a wide range of financial services, beyond commercial banking and investment banking, such as insurance. 
• Until now, SFBs were allowed to primarily undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections 

On-tap licensing: It was introduced in 2016 to allow banks to apply for banking licenses with the RBI throughout the year. 

• Prior to this, banking licenses were granted upon invitation of applications by RBI to prospective players. 

Eligibility for SFBs to transitioning into UBs 

• Net Worth: SFBs must have a minimum net worth of Rs 1,000 crore. 
• Status: SFBs must be scheduled banks with a satisfactory track record of performance for a minimum of 5 years. 
• Financial Health:
  • Profitability: Should have net profits in the last two Financial Years. 
  • Asset Quality: Gross non-performing assets (G NPA) and net NPA (N-NPA) must be less than or equal to 3% and 1%, respectively, over the last two FYs. 
  • Stock Listing: Shares must be listed on a recognized stock exchange. 
  • Promoter Requirements: No addition of new promoters or changes to existing promoters are permitted during the transition.
    • No changes are allowed to the promoter shareholding dilution approved by the RBI. plan previously 
  • Preference: SFBs with a diversified loan portfolio will be preferred.  

About Small Finance Banks (SFBs) from the image:

• Genesis: Announced in the Union budget of 2014-15.
• Registrations: Registered as a public limited company under the Companies Act, 2013.
• Licensing: Licensed and governed under the Banking Regulation Act, 1949. They have no restrictions on where to operate.
• Capital Requirement: 200 crore (except for some SFBs).
• Mandates for financial inclusion: Required to extend 75% of their ANBC (Adjusted Net Bank 

AUTHORISED OPERATOR (AEO) STATUS ECONOMIC 

The Centre has extended AEO status to the gem and jewellery sector. 

About AEO program 

• It is under the aegis of the World Customs Organization (WCO) SAFE Framework. 
• Aims to enhance international supply chain security and facilitate movement of legitimate goods.
• It is in sync with the commitments made under the World Trade Organisation trade facilitation agreement. 
• It enables Indian Customs to enhance and streamline cargo security through close cooperation with the principle stakeholders of the international supply chain. 

INDIA INTERNATIONAL BULLION EXCHANGE (IIBX)

About IIBX 

• Established at GIFT International Financial Services Centre (IFSC), Gandhinagar, Gujarat in 2022. 
• Regulated by IFSC Authority (IFSCA). 
• Promoted by India’s leading market infrastructure institutions like National Stock Exchange, Multi Commodity Exchange of India etc. 
• Benefits 
  • Gateway to import bullion into India. 
  • Provide world class bullion exchange ecosystem to promote bullion trading, investment in bullion financial products and vaulting facilities in IFSCs. 

COST INFLATION INDEX (CII)

• CBDT Notifies CII For Financial Year 2024- 25 for calculating long-term capital gains (LTCG). 
• LTCG is the profit arising from the sale of a capital asset (i.e., Stocks, Bonds, jewellery, buildings, etc.) held for a duration of 12 to 36 months (based on the asset type) 

About CII 

• CII is notified under the Income-tax Act (1961) every year. 
• It is used by taxpayers to compute gains arising out of sale of capital assets after adjusting for inflation.

PARADOX OF THRIFT (POT) THEORY 

This Economic theory was popularised by British economist John Maynard Keynes. 

About PoT 

• A rise in individuals’ savings, by reducing the amount of money spent on goods and services, can cause a fall in overall savings and investments. 
• It believes that higher savings is bad for the wider economy and an economy can grow only by boosting consumer spending. 

Criticisms of PoT 

• It ignores the potential for saved income to be lent out by banks. 
• It also ignores the potential of inflation and deflation in an economy.

UN PANEL FOR CRITICAL ENERGY TRANSITION MINERALS 

• The United Nations (UN) appointed panel on Critical Energy Transition Minerals. 
• The Panel aims to bring all stakeholders across the entire critical energy transition minerals value chain to develop a set of global common and voluntary principles for energy transition.
  • It will address issues relating to equity, transparency, investment, sustainability and human rights. 
• The panel comprises Government and intergovernmental actors including the European Union, African Union, Australia, Indonesia, Colombia, India, etc. 
• Critical Energy Transition Minerals are essential components in many of today’s rapidly growing clean energy technologies, from wind turbines and solar panels to electric vehicles.
  • E.g. copper, lithium, nickel, cobalt etc. 

Challenges/Issues related to Critical Energy Transition Minerals 

• Geographical concentration: Few countries have major reserves; it may exacerbate geopolitical tensions and supply chain disruption.
  • E.g. Lithium triangle– consists of Argentina, Chile and Bolivia 
• Unsustainable Mining and processing: It can lead to water pollution, destruction of ecosystems, etc., and human rights issues (such as child labour). 
• Growing Demand: Mismatch in demand and supply.
• According to the International Energy Agency, demand of critical mineral is set to grow by three and a half times by 2030. 

Other Key Initiative 

Global Initiatives:

• Mineral Security Partnership (MSP): Launched to bolster critical minerals supply chains. India is part of this partnership.
• Critical Minerals Mapping Initiative
• UN Framework on Just Transition for Critical Energy Transition Minerals (Expected to be launched by the end of 2024)

India-specific Initiatives:

• Identification of 30 critical minerals crucial for self-reliance
• Partnership with Australia for lithium and cobalt, and with Argentina for lithium
• Khanij Bidesh India Limited (KABIL): Formed to identify, acquire, process and make commercial use of strategic minerals in overseas locations

DRIP PRICING 

The Department of Consumer Affairs has issued a warning against drip pricing. 

About Drip Pricing 

• It is a pricing technique in which firms advertise only part of a product’s price and reveal other charges later as the customer goes through the buying process. 
• It is used as a tactic to attract customers into initiating the purchasing process 
• It has been identified as a dark pattern under Guidelines for Prevention and Regulation of Dark Patterns, 2023.
  • A Dark pattern refers to practices adopted by online platforms that mislead people into paying for items or services they did not intend to do originally. 

TRAVEL & DEVELOPMENT INDEX, 2024 TOURISM 

Travel & Tourism Development Index (TTDI), 2024 was released by the World Economic Forum (WEF). 

About TTDI, 2024 

• TTDI measures the set of factors and policies that enable the sustainable and resilient development of Travel and Tourism. 
• It is the second edition of an index that evolved from the Travel & Tourism Competitiveness Index (TTCI) series. 
• TTCI is flagship index of WEF that has been in production since 2007. 
• India’s rank improved to 39 in 2024 from 54 in 2021. 

ISHAN INITIATIVE :The Airports Authority of India (AAI) has started work on ISHAN (Indian Single Sky Harmonized Air Traffic Management) Initiative. 

About ISHAN 

• It involves Combining India’s four Flight Information Regions (FIRs) into a single system overseen from Nagpur.
  • Currently, Indian airspace is divided into 4 FIRs i.e. Mumbai, Kolkata, Delhi, Chennai, and a sub-FIR in Guwahati, each managed separately. 
• Unifying these FIRs under a single authority in Nagpur is projected to improve efficiency, safety, and seamlessness in air traffic operations. 

REVISED PRIORITY SECTOR LENDING NORMS 

RBI revises priority sector lending (PSL) guidelines to promote small loan in economically disadvantaged districts with low average loan sizes.

Revised Priority Sector Lending Norms 

• Incentive framework: It establishes an incentive framework for districts with lower credit flow starting from FY25.
  • More weight (125%) will be given to fresh priority sector loans in districts where loan availability is low (less than Rs 9,000 per person). 
• Disincentive framework: In districts with high loan availability (more than Rs 42,000 per person), the loans will have a weight of 90%. 
• Other districts: With exception of outlier districts with low credit availability and those with high loan sizes, all other districts will continue to have the current importance level of 100%. 
• MSME loans: All bank loans to MSMEs shall qualify for classification under PSL.

About Priority Sector Lending (PSL) 

• Priority Sector means those sectors which Government and RBI consider as important for development of the country and are to be given priority over other sectors. 
• Objective
  • To ensure that vulnerable sections of society and underdeveloped areas get access to credit. 
  • To direct a portion of bank credit to specified sectors and sub-sectors that impact large segments of the population and are crucial for the economy. 
• PSL was formalized in 1972 to facilitate flow of credit to such sectors, which though creditworthy, are unable to access credit from formal financial institutions. 
• Various Committees associated with PSL includes:
  • Gadgil Committee, 1969 recommended adoption of Area Approach based on which ‘Lead Bank Scheme’ was adopted. 
  • Ghosh Committee (1982) in which Priority sector categories very revised.

Priority Sector in India’s economic policy: Agriculture, Micro, Small and Medium Enterprises (MSME), Export Credit, Education, Housing, Social Infrastructure, Renewable Energy, Others

Weaker Sections under PSL:

• Small and Marginal Farmers
  • Beneficiaries of Differential Rate of Interest (DRI) scheme (1972), NRLM (National Rural Livelihood Mission), NULM (National Urban Livelihood Mission), Self-Employment Scheme for Rehabilitation of Manual Scavengers (SRMS)
• Distressed farmers indebted to non-institutional lenders
• Artisans, village and cottage industries
• SCs (Scheduled Castes) and STs (Scheduled Tribes)
• SHGs (Self-Help Groups)
• Persons with disabilities
• Individual Women
• Minority communities as notified by Government of India
• Distressed persons other than farmers

Priority Sector Lending Certificates (PSLCs): Certificates to guard against shortfalls in lending to priority sector, that are issued against priority sector loans for banks. Banks can meet their targets & sub-targets by buying these instruments.

Friendshoring: A growing trend where companies focus on building supply chain networks in countries that are regarded as political and economic allies”

INDIA’S TRADE DEFICIT 

• Trade deficit (also known as negative trade balance) occurs when country’s value of imports are more than that of exports. 
• China, USA, UAE, Russia, and Saudi Arabia are India’s largest trading partners. (in descending order) 
• India’s trade deficit with China, Russia, South Korea, and Hong Kong increased as compared to 2022-23, while it narrowed with UAE, Saudi Arabia, Indonesia, and Iraq. 
• USA, Netherlands, UK, Belgium, and Italy are top 5 trading partners with which India has trade surplus.

Impact of higher trade deficit on Economy 

• Depletion of Forex reserves due to the need to pay for excess imports, raising concerns of depreciation of domestic currency. 
• Widening current account deficit which may adversely affect credit rating of the country and raise borrowing costs. 
• Strategic implications due to sustained trade deficit, particularly for essential products or critical sectors. 
• Access to wider range of goods, increased domestic investment if deficit is driven by imports of capital goods, etc. 

AGRICULTURE EXTENSION SYSTEM 

Prime Minister awarded Krishi Sakhi certificates to more than 30,000 women Self-Help Groups (SHGs) in Varanasi. 

Krishi Sakhis 

• Krishi Sakhis are practicing farmers and trained para extension professional in agriculture at grassroot level.
  • Agriculture Extension system support farmers and rural producers in applying scientific research and new knowledge to agricultural practices through education, training and information. 
• Role: To be farmers’ friend at their doorstep with all necessary information, skills and abilities to guide farmers on various aspects of natural farming, providing capacity building and skilling in emerging areas of natural farming and soil health management. 

Krishi Sakhi Convergence Program (KSCP) 

• Ministry: Ministry of Agriculture and Farmers’ Welfare (MoA&FW) and Ministry of Rural Development jointly launched the Krishi Sakhi Convergence Programme (KSCP). 
• Aim: To transform rural India through the empowerment of rural Women as Krishi Sakhi, by imparting training and certification of Krishi Sakhis as Para-extension Workers.
  • It aims to create 70,000 Krishi Sakhis on natural farming and soil health management in a phased manner. 
• Part of Lakhpati Didi program: Under Lakhpati Didi program, the aim is to create 3 crore Lakhpati Didis, one dimension of which is Krishi Sakhi. 
• Implementation: It has been rolled out in 12 States in Phase – 1: Gujarat, Tanil Nadu, Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Karnataka, Maharashtra, Rajasthan, Odisha, Jharkhand, Andhra Pradesh, and Meghalaya.
  • Presently, over 34,000 Krishi Sakhis out of 70,000 have been certified as Para-extension Workers. 

National Mission on Agriculture Extension and Technology (NMAET): Introduced to enable delivery of technology and improve current agronomic practices of farmers under four sub missions, namely: 

• Sub Mission on Agricultural Extension (I)
• Sub Mission on Seed and Planting Material (SMSP)
• Sub Mission on Agricultural Mechanization (SMAM)
• Sub Mission on Plant Protection and Plant Quarantine (SMPP). 

Krishi Vigyan Kendras (KVKs): KVKs are field research units of the ICAR and are meant to test new seed varieties, agronomic practices, machinery etc. in field conditions across different agro-climatic zones before these are cleared for adoption by farmers. 

• Additionally, they conduct farmer outreach programmes through on-farm demonstration plots, training etc.

 TECHNICAL TEXTILES 

The National Technical Textiles Mission’s Empowered Programme Committee has approved seven startup proposals under the GREAT scheme initiative. 

• Grant for Research and Entrepreneurship across Aspiring Innovators in Technical Textiles (GREAT) initiative emerged from the Research, Development, and Innovation component of the National Technical Textiles Mission (NTTM). 

About Technical Textiles 

• Technical textiles are defined as textile materials and products used primarily for their technical performance and functional properties rather than their aesthetic or decorative characteristics. 
• Technical Textiles are used for various applications ranging from agriculture, roads, railway tracks, sportswear, health on one end to bullet proof jacket, fireproof jackets, high altitude combat gear and space applications on another end of spectrum.

About GREAT Initiative 

• Nodal Ministry: Ministry of Textiles 
• Objectives: Encourages young innovators, scientists / technologists, and startup ventures in the field of Technical Textiles to translate their ideas into commercial technologies /products and make India self-reliant. 
• Grant in Aid: Normally upto Rs.50 Lakhs for a period of 18 months. 

Government Initiatives 

National Technical Textiles Mission (NTTM): To position the country as a global leader in Technical Textiles. 

• Implementation period: FY 2020-21 to 2023-24. Nodal Ministry: Ministry of Textiles. 
• Schemes:
  • Production Linked Incentive (PLI) scheme for textiles 
  • PM Mega Integrated Textile Regions and Apparel Parks (MITRA) Scheme 
  • Scheme for Integrated Textile Parks (SITP) 
• Quality Control Regulations: Ministry of textiles has issued Quality Control Order (QCOs) for 19 items of Geo-tech Textiles, 12 items of Protective Textiles items, 20 items of Agro Textiles and 06 items of Meditech Textile. 
• New HSN Codes: Development of new HSN Codes dedicated to technical textiles’ products. 
• Standards in technical textiles: Development of more than 500 Bureau of Indian Standards (BIS) standards for technical textiles. 
• Mandatory usage of technical textiles: Technical textiles products have been identified for mandatory usage across several Central ministries/departments to derive the benefits of technical textiles in various fields of applications.

INDIAN RAILWAYS SAFETY :Recently, several incidents of train derailment/collision in last six months raised concern over railways safety.

Causes of Railway Accidents 

• Derailment: Factors could be inadequate maintenance of locomotives, rolling stock, track, signals etc.; and other operational irregularities. 
• Human Error: The error caused due to human failure, comprising both Railway Staff as well as other than Railway Staff such as road users, passengers, miscreants etc.
  • As per Indian Railways, Around 75% of derailments occur due to `railway staff failure’, and another 10 % derailments are caused by `equipment failures’. 
• Signal Failure: Defective or damaged track circuits and axle counters are leading causes of signal failures.
  • For example- Faulty signal circuit modifications resulted in incorrect signaling, leading to the Balasore train collision in 2023. 
• Fire accidents in coaches: Factors like inflammable material carried by passengers, Short circuit, Negligence by pantry car staff, lease contractor, etc. 
• Human Resources: Vacancy of around 20,000 in safety-critical categories workforce of Indian railways.
  • Safety-critical categories include loco crew, train manager, station master etc. Steps taken for Railway Safety

KAVACH System: KAVACH an Indigenous Automatic Train Protection (ATP) system which has Cab Signalling features-useful for high speeds as well as foggy weather.

• In technical terms it is known as Train Collision Avoidance System (TCAS) or Automatic Train Protection System (ATP) system. 
• As of February 2024, Kavach has so far been deployed on 1465 Route km and 139 locomotives (including Electric Multiple Unit rakes) on South Central Railway.

Working Mechanism of KAVACH system 

• KAVACH uses a network of devices mounted on two trains moving towards each other to avoid a collision. 
• The devices work with the help of Radio Frequency Identification (RFID) tags and Global positioning systems (GPS).
• This system avoids the risk of collision by precisely assessing the course of two trains at “collision risk” and automatically initiating the braking system. 

• Rashtriya Rail Sanraksha Kosh (RRSK): Launched in 2017-18, RRSK is a Rs. 1 lakh crore five-year fund dedicated to upgrading critical railway safety infrastructure. 
• Infrastructure Up gradation: Steps such as Electrical/Electronic Interlocking Systems with centralized operation of points and signals have been provided at stations; interlocking of Level Crossing (LC) Gates, etc. 
• Use of New Technology: Such as GPS-based Fog Safety Devices alert locomotive pilots to upcoming signals and crossings in fog-prone areas, improving safety during low visibility. 
• Eliminated Unmanned level crossing: All unmanned level crossings (UMLCs) on Broad Gauge (BG) route have been eliminated by January 2019. 
• Safety Information Management System (SIMS): In order to put in place a faster and efficient system for accident reporting, analysis and sharing of information between Zonal Railways (ZRs) and Railway Board (RB), a web based application SIMS was developed (2016) by the Safety Directorate of RB. 
• Use of fire retardant materials: The Indian Railways have adopted fire retardant interior furnishing including, wall panelling, flooring, roof panelling etc. to minimize the risk of fire accidents. 

OFFSHORE MINERALS IN INDIA 

In exercise of powers under Offshore Areas Mineral (Development and Regulation) Act 2002, the Central Government framed Offshore Areas (Existence of Mineral Resources) Rules, 2024. 

About Offshore Minerals in India 

• Offshore Mining: It is the process of retrieving mineral deposits from the deep seabed, at a depth of more than 200 metres. 
• Extent: India’s Exclusive Economic Zone (EEZ) of over two million square kilometers holds significant recoverable offshore mineral resources. 
• Mineral Deposits: India’s offshore mineral reserves include gold, diamond, copper, nickel, cobalt, copper, manganese, and rare earth elements essential for development.
• Reserves: Geological Survey of India has delineated the resources of the following minerals in the offshore areas:
  • Lime mud within the EEZ off Gujarat and Maharashtra coasts. 
  • Construction grade sand off Kerala coast. 
  • Heavy mineral placers in the inner-shelf and mid-shelf off Odisha, Andhra Pradesh, Kerala, Tamil Nadu and Maharashtra. 
  • Phosphorite in the Eastern and Western continental margins. 
  • Polymetallic Ferromanganese (Fe-Mn) nodules and crusts in Andaman Sea and Lakshadweep Sea.

FOREIGN DIRECT INVESTMENT (FDI) 

As per data released by Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflows in 2023 24 contracted by 3.49% to $44.42 billion as compared with 2022-23.

Other Key Highlights 

• Maharashtra received highest FDI followed by Gujarat and Karnataka in FY 2023-24. 
• Singapore was the top source of foreign inflows followed by Mauritius and USA in FY 2023-24.
  • Top 5 countries for FDI equity inflows into India during 2000-24 are Mauritius followed by Singapore, USA, Netherland, Japan. 
  • Computer software & Hardware, followed by Service sector and Construction Activities received highest FDI in FY 2023-24.
• Top 5 sectors receiving highest FDI equity inflow during 2000-2024 are Services Sector, Computer Software & Hardware, Trading, Telecommunications, Automobile Industry. 

About FDI 

• It is an investment made by a company or an individual in one country into business interests located in another country. 
• DPIIT is nodal Department for formulation of FDI policy in India. 
• FDI is permitted through Automatic route (Government approval not required) or Government route (approval required).
• Foreign Currency Convertible Bonds, Foreign Institutional Investment with certain conditions and Global Depository Receipts are included in FDI.

FDI is prohibited in Lottery Business, Gambling and Betting, Chit funds, Nidhi company, Trading in Transferable Development Rights etc.

Significance of FDI 

• Stimulates economic growth, enables development in backward areas, ensures exchange rate stability, etc. Concerns regarding FDI in India 
• Most FDI inflow is concentrated in few states like Maharashtra & Karnataka, widening existing inequalities. 
• FDI may lead to unfair competition and ultimately affect domestic companies. 

Initiatives taken to promote Foreign Direct Investment (FDI) in India.

• Liberalization of FDI in sectors like Insurance, Power exchanges etc.
• Investment promotion and facilitation through Invest India Programme.
• Attracting foreign investment through Make in India.

INDIA’S OUTLOOK TO POSITIVE FROM STABLE 

S&P Global Ratings revised its outlook on India to positive from stable and affirmed its ‘BBB-‘ long-term and ‘A-3’ short-term unsolicited foreign and local currency sovereign credit ratings. 

Sovereign Credit Ratings 

• Definition: A sovereign credit rating is a measurement of a government’s ability to repay its debt.
  • Credit ratings map the probability of default and therefore reflect the willingness and ability of borrower to meet its obligations. 
• Parameters: Typically, rating agencies use various parameters to rate a sovereign including growth rate, inflation, government debt, short-term external debt as a percentage of GDP, and political stability. 
• Ratings: Sovereign credit ratings broadly rate countries as either investment grade or  speculative grade, with the latter projected to have a higher likelihood of default on borrowings. o The ratings vary from AAA (highest rating) to D (lowest rating) and the threshold of Investment grade is considered to be BBB- for S&P and Fitch and Baa3 for Moody’s. 
• Significance: When favorable, these ratings can facilitate countries to access global capital markets and foreign investment. 

GLOBAL ECONOMIC PROSPECTS REPORT 

World Bank released ‘Global Economic Prospects Report’ 

• Report called for a significant acceleration in public investments by Emerging Markets and Developing Economies (EMDEs) to meet their development goals. 

About public investment 

• Public investment usually refers to gross fixed capital formation (total value of acquisitions, less disposals, of fixed assets) by the State, whether through central or local governments or publicly owned industries or corporations. infrastructure 
• It encompasses physical or tangible investment in (such as transport, telecommunications, and buildings), but in a broader sense, it can include human or intangible investment in education, skills, and knowledge. 

UNCTAD’S REPORT ON GROWING PUBLIC DEBT

• A World of Debt Report 2024: A growing burden to global prosperity’ released by UN Trade and Development (UNCTAD) Report highlights alarming surge in global public debt and proposes a plan to revamp global financial system to tackle current debt crisis. 
• Public debt refers to general government domestic and external debt. 

Key highlights of Report 

• Debt surge: In 2023, global public debt reached historic peak of $97 trillion. 
• Drivers: Cascading crises and sluggish and uneven performance of global economy. 
• Regional Disparity: Public debt in developing countries (accounting for 30% of global total) is rising at twice the rate of developed countries. o In 2023, India’s public debt reached US$ 2.9 trillion, accounting for 82.7% as a share of GDP. 

Implications of high public debt: 

• High fiscal burden: More than half of developing countries allocate at least 8% of government revenues to interest payments. 
• Decreased developmental spending: 3.3 billion individuals reside in nations where interest payments exceed spending on education and health combined. 
• Climate inaction: Interest outweighs climate investments in emerging and developing countries. 

WORLD EMPLOYMENT AND SOCIAL OUTLOOK: 

The report is published by the International Labour Organisation. 

Key highlights 

• World unemployment to fall slightly in 2024. 
• 183 million people are unemployed (being available at short notice and actively looking for work). 
• 45.6 % of women (aged 15 and above) are employed, compared to 69.2 % of men, a gap of 23.6%
  • Reason for such gap: family responsibilities (marriage and parenthood). 
  • Also, women receive lower labour income than men – especially in the developing world. 
• Informal workers have grown from 1.7 billion in 2005 to 2.0 billion in 2024. 

 PRESTON CURVE 

• It highlights that an increase in per capita income of a country does not cause much of a rise in the life expectancy of its population beyond a point.
  • When a poor country begins to grow, its per capita income rises and causes increase in life expectancy initially due to nutrition, sanitation and access better healthcare. 
  • However, it begins to flatten out after a certain point.

RESERVE BANK OF INDIA (RBI) JOINS PROJECT NEXUS 

Nexus is a multilateral international initiative to enable instant cross-border retail payments by interlinking domestic Instant Payments Systems (IPS). 

• An IPS is an electronic payments system which facilitates inter-bank fund transfer and sends confirmation of payment to the receiver and originator within a minute or less. E.g. Unified Payments Interface (UPI). 

About Project Nexus 

• Conceptualized by the Innovation Hub of the Bank for International Settlements (BIS).
  • BIS was established in 1930 with its head office in Basel, Switzerland and is owned by 63 central banks, including RBI. 
• It will connect IPS of four ASEAN countries (Malaysia, Philippines, Singapore, and Thailand) and India and is expected to go live by 2026. 
• Nexus is designed to standardize the way domestic IPS connects to one another.
  • Rather than an IPS operator building custom connections for every new country to which it connects, the operator only needs to make one connection to Nexus. 
• It aims to achieve G20 targets of enabling cheaper, faster, more transparent and accessible cross border payments

Benefits of Project Nexus: 

• Simplifies cross-border payments, reducing complexity, cost, and transaction time. 
• It offers complementary low-cost and scalable rail for all payment service providers. 
• It bridges gaps in interoperability by fostering standardisation and harmonisation across diverse systems. 

Challenges associated with Cross-Border Payment Systems:

• Lack of interoperability: This suggests that different payment systems across countries may not be compatible or able to communicate effectively with each other.
• Slow and expensive: Cross-border payments are often slower to process and more costly compared to domestic transactions.
• Requirement of additional steps such as currency conversion: This highlights the complexity added by the need to exchange one currency for another in cross-border transactions.
• Difficult to scale: This indicates that expanding or growing cross-border payment systems to handle increased volume or reach more countries presents significant challenges.

RBI LAUNCHES VARIOUS INITIATIVES 

Reserve Bank of India (RBI) has launched three initiatives to enhance public access to the central bank and facilitate regulatory approvals. 

• PRAVAAH portal (Platform for Regulatory Application, Validation, and Authorisation): This is described as a secure and centralized web-based portal used to seek authorisation, license, or regulatory approval.
• Mobile Application for RBI Retail Direct portal: This initiative allows retail investors to transact in government securities using a mobile app.
• Fintech Repository: This is a comprehensive database containing information on the Indian fintech sector. Its aim is to provide a better understanding of the sector from a regulatory perspective.

VARIABLE REPO RATE (VRR) The recent VRR auction by Reserve Bank of India (RBI) witnessed a good response from banks. 

About VRR 

• When RBI desires to infuse liquidity in the economy but Banks are not eager to borrow from RBI at Repo Rates as interest rates in economy may already be lower, in that case RBI allows Banks to borrow at VRR decided by market generally lower than Repo Rate (though not less than Reverse Repo Rate) for duration more than One Day.
• Repo Rate is the rate at which Banks borrow money from RBI which is fixed by RBI. • The borrowing duration is more than One Day and usually up to 14 days. 
• It is a tool to inject short-term liquidity into the banking system. • Similarly Variable Rate Reverse Repo (VRRR) is conducted to absorb the excess liquidity from the system. 

 PUMP AND DUMP SCHEME 

• Recently Sebi imposed a fine on some individuals for allegedly operating a ‘pump and dump’ scheme. 
• It was operated by recommendations shared through Telegram channels, resulting in public shareholders purchasing stock at inflated prices. 

About Pump and Dump Scheme: 

• A manipulation activity involving artificially inflating a stock’s price through false and misleading information/ recommendations. 
• It is done only to sell stock at an inflated price.
• Prevalent in micro-cap and small-cap sectors due to limited public information and lower trading volumes. 
• Impact: Undermine confidence in financial markets, and substantial losses to investors. • Regulation: Under SEBI’s guidelines, it is completely banned.

SEBI AMENDS INFRASTRUCTURE TRUSTS (INVITS) REGULATIONS 2024 

The new norms allow for the issuance of subordinate units by privately placed InvITs only to the sponsors on acquisition of an infrastructure project. 

• The move aims to bridge the difference in valuation done by the sponsor (as a seller) for an asset and that by the InvIT (as a buyer). 

About InvITs 

• A type of investment vehicle similar to a mutual fund that allows investors to invest in  infrastructure projects like toll roads, power lines and pipelines etc. 
• The sponsors (infra companies) set up the InvITs through SEBI and are recognized as borrowers under the SARFAESI act 2002.
  • Parties to an InvIT include its trustee, sponsor, investment manager and project manager. 
• InviTS earn income through tolls, rents, interest or dividends from their investments, which in turn is distributed to the investors as their taxable earnings. 

Significance of InvITs 

• Low ticket size: The investor can invest small amounts 
• Liquidity: Listed on stock exchanges and can be exit at any point 
• Transparency: investors are informed about where their money is invested 
• Low Risk: as the trusts are regulated by SEBI Challenges of investing in InvITs include operational risk, refinancing risk, return risk etc. 

Challenges of investing in InvITs include operational risk, refinancing risk, return risk etc. 

 CLEARING CORPORATIONS :SEBI has formed a committee under Usha Thorat to review ownership and economic structure of clearing corporations.

About  Clearing Corporation (CC) 

• It is an entity which handles the activity of clearing and settlement of trades in securities or other instruments that are traded on stock exchanges. 
• CCs along with stock exchanges and depositories constitute Market Infrastructure Institutions. 
• CCs are significant as central risk management institutions and as a first line regulator. 
• Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations (SECC)) Regulations, 2018 lays down norms for ownership and governance framework of CCs. 

DERIVATIVES TRADING 

About Derivatives 

• Definition: Derivatives are financial contracts that draw their value from an underlying asset.
  • The underlying asset can be a commodity, security, currency, or index. 
• Purpose: Can be used for hedging purposes or speculation. 
• Types: Common types of derivatives include futures, options, and swaps. 

 Derivatives Market 

• In India, the derivative market is regulated by the Securities and Exchange Board of India. 
• India has two types of derivative markets: 
  • Exchanges-traded: Standardised contracts are traded on an exchange. 
  • Over-the-Counter (OTC): is decentralised. Contracts are negotiated directly between two parties.

FRONT RUNNING 

Recently, a Mutual Fund was alleged to have indulged in Front- Running. 

About Front Running 

• Front Running refers to usage of non-public information to directly or indirectly buy or sell securities, or enters into options or futures contracts, in advance of a substantial order. (Securities and Exchange Board of India (SEBI)) 
• It is illegal in India. 
• It undermines confidence in the financial markets and creates an uneven playing field for other investors.
• In 2022, Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 was amended to incorporate provisions to counter front running. 

STATE OF WORLD FISHERIES AND AQUACULTURE 2024 

It is prepared and released by the Food and Agriculture Organization (FAO).

• The report’s special focus is on “Blue Transformation in Action”. 

Key findings of the report 

• With 8 percent of total production, India ranked second in aquatic animals production. 
• For the First time, aquaculture surpassed capture fisheries as the main producer of aquatic animals. 
• With 1.9 million tonnes, India ranked first in Inland fisheries production. 

CONTAINER PORT PERFORMANCE INDEX (CPPI) 

Nine of Indian ports have found their position among top 100 global ports in CPPI in 2023. 

About CPPI (2023) 

• It is developed by the World Bank and S&P Global Market Intelligence. 
• The Index is a comparable assessment of performance based on vessel time in port. 
• It helps to identify opportunities to improve a terminal or a port that will ultimately benefit all public and private stakeholders. 
• Top-ranked container port in the CPPI 2023 is Yangshan Port (China).

DIGITAL PUBLIC INFRASTRUCTURE (DPI) 

The ‘Report of India’s G20 Task Force on DPI’ was released by ‘India’s G20 Task Force on Digital Public Infrastructure for Economic Transformation, Financial Inclusion and Development’. 

What is Digital Public Infrastructure (DPI)? 

• It is a set of shared digital systems that-
  • Should be secure and interoperable, 
  • Can be built on open standards and specifications to deliver and provide equitable access to public and / or private services at societal scale , 
  • Are governed by applicable legal frameworks and enabling rules to drive development, inclusion, innovation, trust, and competition and respect human rights and fundamental freedoms. 

What is ‘Not’ DPI? 

• Interventions which are complementary to DPI: E.g., connectivity infrastructure that improves individuals’ access to mobile & internet via physical infrastructure. 
• Digital processes that may not enable private innovation: E.g., digitizing existing physical processes or workflows to create a government portal.

About India’s DPI 

• India Stack: It is India’s own foundational DPI, consists of 3 interconnected layers:
  • Identity Layer – (e.g, Aadhar, e-KYC etc), 
  • Payment layer (e.g., UPI, Aadhar Payment Bridge etc.) 
  • Data governance layer (e.g, DigiLocker, Account Aggregator etc.).

ANGEL TAX

In Budget 2024-25, government has announced to abolish the angel tax for all classes of investors’ to boost the entrepreneurial spirit and support innovation. 

What is Angel Tax? 

• Definition: Refers to the income tax that the government imposes on funding raised by unlisted companies, or startups, if their valuation exceeds the company’s fair market value.
  • For instance, if the fair market value of a start-up share is Rs 10 a piece, and in a subsequent funding round they offer it to an investor for Rs 20, then the difference of Rs 10 would be taxed as income. 
• Objective: It was introduced in 2012 to curb money laundering and tax evasion. 
• Legal Provision: It was levied under Section 56 (II) (viib) of the Income Tax Act, 1961. 
• Coverage: Earlier it applied only to local investors but the Budget 2023-24 widened its ambit to include foreign investments (with some exceptions).

Fair Market Value (FMV):Defined as the price an asset would sell for under current market conditionsAssumes both the buyer and seller are seeking the best possible priceReflects the true value of an asset in an open marketUnicorn:Refers to a startup companyHas a valuation of over $1 billionReverse Flipping:Involves Indian companies that were initially established overseasThese companies are strategically repatriating their legal headquarters back to IndiaExamples given are PhonePe and Groww

Status of Start-ups in India:

• India has the 3rd largest startup ecosystem in the world.
• There are over 1 lakh (100,000+) recognized startups in India.
• More than 100 startups have achieved “unicorn” status, meaning they have reached a valuation of $1 billion or more.

GIG ECONOMY 

Recently Karnataka government published draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill. More about the Bill .

Gig Workers 

• As per Code on Social Security, 2020, it means a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship. 
• Broadly classified into 2 categories: 
  • Platform based: Whose work is based on online software apps or digital platforms. E.g., delivery workers of Zomato. 
  • Non-platform based: Casual wage workers in conventional sectors, working part-time or full-time. E.g., domestic workers. 
• Drivers of Growth: Technological advancements, urbanization, rising middle-class consumption demands, shifts in consumer preferences towards on-demand services, and desire for greater work-life balance among workers.

 TRANSSHIPMENT PORT 

India welcomed its first cargo ship at its newly built semi-automated transshipment port in Vizhinjam International Transshipment Deepwater Multipurpose Seaport, Kerala. 

Transshipment Port 

• It is a transit hub where cargo from one ship is transferred to another on the way to its final destination. (includes rails, roads, etc.)
  • Smaller parcels of cargo are loaded on a bigger ship which is able to travel to distant ports in other countries. 

Why Vizhinjam

• Strategic Location:
  • It’s located just 10 nautical miles from the international shipping route.
  • This route connects Europe, the Persian Gulf, and the Far East.
• Natural Advantage:
  • The port has a deep draft of 18m.
  • Its curvilinear coast mitigates tsunami impact.
  • The port’s positioning results in only mild erosion.
  • These factors help in minimizing maintenance costs.
• Trans-shipment Hub:
  • Vizhinjam is strategically positioned to become a transshipment hub.
  • It can consolidate and transfer Indian and regional origin cargo to mainline vessels.
  • This can be done at lower costs compared to competitors.

INDIA’S STRUCTURAL TRANSFORMATION

IMF released a Working Paper titled ‘Advancing India’s Structural Transformation and Catch-up to the Technology Frontier’. 

Status of India’s Structural Transformation: 

• Structural change in output: o Share of agriculture and allied activities in output declined from 42% in 1972-73 to 15% in 2019-20. 
• Share of industry (consisting of mining, construction, manufacturing and utilities) rose from 24% in 1972-73 to 25.9% in 2020-21. 
• Share of services in output rose significantly from 34.5 in 1970 to 55.3% in FY 2020. 

Structural change in Employment: 

• Share of agriculture in employment declined from 73.9% in 1972-73 to 42 % in 2018-19. 
• Share of industry in employment rose from 11.3% (1972-73) to 24% (2019-20) in five decades. 
• Share of services in employment increased significantly from 14.8% in 1972-73 to 30.7% in 2019-20 

Presence of informal sector: Between 1983 and 2019, the share of the non-farm sector in employment rose 20%, but the majority of such jobs were of the informal variety. 

Urbanization: India is urbanizing rapidly. By 2036, its towns and cities will be home to 600 million people, or 40 percent of the population, up from 31 percent in 2011 & 20 % in 1971. 

Steps taken for structural reforms in India:

• Tax reforms:
  • Includes Goods and Service Tax and corporate tax rationalization
  • Aims to foster competitiveness, address rising inequality, and promote sustainable economic growth
• Production-Linked Incentive (PLI) scheme:
  • To attract investments in key sectors and cutting-edge technology
  • Intended to bring economies of scale in the manufacturing sector
• Insolvency and Bankruptcy Code (IBC):
  • To improve the credit culture and resource allocation mechanism
• Labour reforms (four codes):
  • To enhance Ease of Doing Business in the country
  • Aims to improve employment creation and output of workers
• Expansion of country’s digital infrastructure:
  • Examples include Bharat Net, India Stack
  • Aims to reduce cost of doing business, formalize the economy, support financial inclusion, and create new business opportunities

SPACE ECONOMY 

India’s Initiatives to promote space-tech entrepreneurship 

• Key organisations
  • IN-SPACe: An autonomous agency under the Department of Space (DoS).
    • Its role includes regulating, promoting, guiding, monitoring, and supervising the space activities of Non Governmental Private Entities (NGPEs) in India. 
  • Antrix Corporation Limited (ACL): A commercial arm of ISRO, was setup in 1992 and is a wholly owned Government of India Company. 
  • New Space India Limited (NSIL): Schedule ‘A’ Category Company under DoS. It was set up in 2019, to handle the commercial activities of ISRO.  
  • Indian Space Association (ISpA): Established in 2020, ISpA is an apex non-profit industry body, setup for development of the private space industry in India. 
• Key Initiatives
  • Indian Space Policy 2023: Enables end-to-end participation of Non-Government Entities (NGEs) in all domain of space activities. 
  • Foreign Direct Investment (FDI): Recent amendment in FDI policy allowed 74% FDI for satellite manufacturing and operation, up to 49% FDI for launch vehicles, spaceports and associated systems etc. 
  • SpaceTech Innovation Network (SpIN), public-private collaboration for start-ups and small and medium- enterprises in space industry. 
  • Tax benefits: Satellite launches are exempted from GST. 
  • Atal Innovation Mission (AIM)
    • ATL Space Challenge: AIM in collaboration with the ISRO and CBSE launched the Atal Tinkering Lab (ATL) Space Challenge. The challenge encourages students to find efficient and innovative solutions for specific, real-world challenges in the Space sector. 
    • Atal Incubation Centre (AIC) Scheme: AIM has supported more than 15 startups working in Space Tech and related industry across India. The focus areas for these startups are in UAV, Drone and Surveillance Equipment, Aero tech, Air Taxi, Space debris tracking and monitoring service, space education among others. 
  • Mentoring: List of retired ISRO subject experts is published on IN-SPACe Digital Platform (IDP). NGEs can approach these mentors directly for expert advice etc.

E-MOBILITY 

The “e-mobility R&D Roadmap for India” report has been released by the Principal Scientific Adviser to the Government of India to achieve net-zero targets. 

Status of electric vehicle (EV) adoption, or “E-mobility,” in India:

• Current EV Sales:
  • Less than 1% of total vehicle sales in India are electric vehicles.
  • This statistic is attributed to the Bureau of Energy Efficiency (BEE).
• Future Growth Projection:
  • The EV industry in India is expected to grow significantly.
  • It’s projected to have a Compound Annual Growth Rate (CAGR) of approximately 47% by 2030.

Government initiatives for promotion of EV Manufacturing Ecosystem 

• Electric Mobility Promotion Scheme 2024 (EMPS 2024): Launched by the Ministry of Heavy Industries (MHI). 
• PLI Schemes: Production Linked Incentive (PLI) Scheme for Automobile and Auto Components Industry in India to boost domestic manufacturing of Advanced Automotive Technology products.
  • PLI Scheme for manufacturing of Advanced Chemistry Cell (ACC) to bring down prices of battery in the country. 
• Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) India: Under FAME India Scheme Phase-II, Phased Manufacturing Programme (PMP) has been introduced. 
• Rationalization of Goods and Services Tax (GST):
  • On electric vehicles from 12% to 5%; 
  • On chargers/charging stations for electric vehicles from 18% to 5%. 
• Promoting Charing Infrastructure: Ministry of Power has issued “Charging Infrastructure for Electric Vehicles – Guidelines and Standards”.
  • Ministry has also designated BEE as the Central Nodal Agency (CNA) for the National-level rollout of charging infrastructure in the country. 
• States’ Initiative: Karnataka, Telangana, Maharashtra and Uttar Pradesh have launched their respective state EV Policies.
• Other: National Electric Mobility Mission Plan (NEMMP) 2020, EV30@30 campaign (at least 30% of new vehicle sales to be electric by 2030), National Mission on Transformative Mobility and Storage etc.

SUSTAINABLE DEVELOPMENT GOALS

 The Sustainable Development Goals Report 2024 is released by UN Department of Economic and Social Affairs (UN DESA). 

About Sustainable Development Goals (SDGs) 

• Background: The concept of sustainable development was described by the 1987 Brundtland Commission Report as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. 
• Subsequently, United Nations Millennium Development Goals (MDGs) were signed in 2000 which committed world leaders to combat poverty, hunger, disease, illiteracy, environmental degradation, and discrimination against women.
  • Each MDG has targets set for 2015 and indicators to monitor progress from 1990 levels. 
• SDGs are the blueprint to achieve a better and more sustainable future for all.
  • They address the global challenges we face, including those related to poverty, inequality, climate change, environmental degradation, peace and justice etc. 
• In 2015, all the countries in the United Nations adopted the 2030 Agenda for Sustainable Development, which sets out a 15-year plan to achieve the Goals and their related targets.
  • It sets out 17 Goals, which include 169 targets to achieve them all by 2030.

CITY GAS DISTRIBUTION (CGD) NETWORK 

About CGD 

• Pipeline Network: CGD network is an interconnected system of underground natural gas pipelines for supplying Piped Natural Gas (PNG) and Compressed Natural Gas (CNG).
  • Natural gas is a relatively clean-burning fossil fuel which mainly comprises Methane (CH4) with a small percentage of other higher hydrocarbons 
  • 4 distinct segments: CNG is predominantly used as auto-fuel, and PNG is used in domestic, commercial and Industrial segments. 
  • Regulation: Under the PNGRB Act 2006, PNGRB grants authorization to the entities for developing a CGD network in specified geographical areas (GAs). 
  • Coverage: Over 33,753 Kms of natural gas trunk pipelines are authorized in the country out of which around 24,623 Kms of pipeline are currently operational 
  • After the latest (12th) bidding rounds, coverage is expected to nearly reach 100% soon, excluding only the Andaman and Nicobar and Lakshadweep Islands. 
  • Growth: The Government of India plans to raise the share of natural gas in the energy basket from around 7% at present to 15% by 2030.

 COAL SECTOR IN INDIA

About the coal sector in India:

• India has the 5th largest geological reserves of coal in the world.
• India is the 2nd largest consumer of coal globally.
• India is also the 2nd largest importer of coal.
• As of 2023, 50.7% of India’s power generation is supported by coal and lignite.

About Coal 

• Coal is a readily combustible, black or brownish black sedimentary rock, predominantly made of carbon.
  • The precursor to coal is peat. Peat is a soft, organic material consisting of partly decayed plant and mineral matter

Types of coal found in India 

• Anthracite: It is the highest grade of coal containing a high percentage of fixed carbon.
  • It is hard, brittle, black and lustrous. It is found in smaller quantity in regions of Jammu and Kashmir. 

• Bituminous: It is a medium grade of coal having high heating capacity. It is the most commonly used type of coal for electricity generation in India.
  • Most of bituminous coal is found in Jharkhand, Odisha, West Bengal, Chhattisgarh, and Madhya Pradesh. 
• Subbituminous: It is black in colour, dull (not shiny) and has a higher heating value than lignite. 
• Lignite: It is the lowest grade coal with the least carbon content. It is found in the regions of Rajasthan, Tamil Nadu, and Jammu & Kashmir. 

The top three states with highest coal reserves in India are Odisha, Jharkhand, Chhattisgarh. They account for approximately 69% of the total coal resources.   

About the World Bank (WB) Group

• IBRD (The International Bank for Reconstruction and Development)
• IDA (The International Development Association)
• IFC (The International Finance Corporation)
• MIGA (The Multilateral Investment Guarantee Agency)
• ICSID (The International Centre for Settlement of Investment Disputes)

Additionally, 

• IBRD and IDA together form the World Bank.
• India is a member of all these institutions except ICSID.

SAARC CURRENCY SWAP ARRANGEMENT 

RBI announced SAARC currency swap framework for 2024-2027. 

• RBI in concurrence with Union Government revised the Framework under which RBI would enter into bilateral swap agreements with SAARC central banks, who want to avail of swap facility. 
• Currency Swap Arrangement (CSA) is a contract under which two counterparties agree to exchange two currencies at a set rate and then to re-exchange those currencies at an agreed upon rate at a fixed date in future. 
• Previously, in 2012, SAARC countries set up Framework on Currency Swap mechanism to meet the short-term forex liquidity requirement. 

Significance of CSAs 

• Helps maintain financial stability during a crisis by providing a backstop line of funding for forex liquidity requirements. 
• Helps in addressing short-term balance of payments stress.

Other significant Currency Swap Agreements (CSAs) that India has entered into:

• BRICS Contingent Reserve Agreement: This was signed in 2015 among the BRICS nations (Brazil, Russia, India, China, and South Africa).
• India-Japan bilateral CSA: This agreement amounts to $75 billion.
• Others: The image mentions additional CSAs, specifically noting India-UAE CSA and India-Sri Lanka CSA.

CREDIT-DEPOSIT (CD) RATIO 

Reserve Bank of India raised concerns over bank’s high CD Ratio and asked them to bridge the gap between credit and deposit growth and reduce CD ratio. 

• CD Ratio is a financial metric representing the percentage of loans a bank has issued relative to its total deposits. 

Key Reasons for high CD ratio 

• Higher credit growth
  • Rising retail credit (includes vehicle loans, personal loans, etc.). 
  • Increasing loans to businesses and MSMEs. 
• Slower deposit growth:
  • Banks are facing stiff competition with each other. 
  • Additionally, customers are transitioning from savers to investors and diverting funds to capital markets, slowing deposit growth. 

Impact of High CD Ratio Bank may face: 

• Pressure on Net Interest Margins (NIM): NIM is a measure of the net return on the bank’s earning assets like investment securities, loans, etc. 
• Liquidity risk: Banks’ may be unable to timely meet payment obligations. 
• Credit risk: Borrowers could default on their contractual obligations

WAYS AND MEANS ADVANCES SCHEME 

Reserve Bank of India (RBI) has increased the Ways and Means Advance (WMA) limit of States/UT to Rs 60,118 crore from existing Rs 47,010 crore. 

• This will enable Sates/UTs to better manage their fiscal situation. 
• Apart from WMA, Special Drawing Facility (SDF), and Overdraft (OD) facility are important financial accommodation instruments availed by States/UTs.
  • These instruments are governed by under the RBI Act, 1934.

About Ways and Means Advance (WMA)  

• Advances to States/UTs provided by RBI to meet temporary mismatches in the cash flows of receipts and payments.
  • Facility is also available for the Union Government. 
• Types: Normal WMA and Special WMA (now known as Special Drawing Facility (SDF))
  • First, a state/UT is provided with a special WMA and after its exhaustion, it gets a normal WMA. 
  • Special WMA has lower interest rate than Normal WMA 
  • Interest rates are linked to Repo rate. 

About Special Drawing Facility (SDF) 

• Availed by State against the collateral of Consolidated Sinking Fund (CSF), Guarantee Redemption Fund (GRF), Auction Treasury Bills (ATBs), etc. 
• CSF and GRF are reserve funds maintained by some State with the RBI. 

About Overdraft Facility 

• Facility is provided whenever financial accommodation to a State exceeds its SDF and WMA limits. 
• Generally, State Governments/UTs can avail overdraft on 14 consecutive days (relaxation can be provided by RBI).  

DOMESTIC MONEY TRANSFER (DMT) 

The Reserve Bank of India (RBI) in a review revised framework for domestic money transfer 

• Framework aims to regulate money transfer services offered by regulated entities in India.’ 
• The framework for Domestic Money Transfer (DMT) was introduced in 2011. 
• The framework is revised by RBI under the Payment and Settlement Systems Act, 2007. 
• Review was done as there has been significant increase in the availability of banking outlets, developments in payment systems for funds transfers, etc. 
• Revised framework shall come into effect from November 01, 2024.  

FINANCIAL INCLUSION INDEX 

RBI released Financial Inclusion Index for March 2024 

• The value of the Index for March 2024 stands at 64.2 vis-à-vis 60.1 in March 2023

About Financial Inclusion Index: 

• It is a comprehensive index incorporating details of banking, investments, insurance, postal as well as the pension sector. 
• It captures the extent of financial inclusion across the country. 
• Single value index (0 to 100), where 0 is complete exclusion and 100 is full inclusion. 
• It includes three broad parameters viz., Access (35%), Usage (45%), and Quality (20%). 
• It is published annually in July. 

NEW SEBI GUIDELINES FOR CREDIT RATING AGENCIES (CRAS) 

Guidelines, issued under SEBI Act (1992) and Regulation 20 of CRA Regulations, will enhance the Ease of Doing business for CRAs and protect investor interests. Key guidelines 

About Credit rating in India 

• Credit ratings: It represents a CRA’s opinion on the probability of timely repayment of debt and the likelihood of default on interest and principal payments. 
• CRA: SEBI (Credit Rating Agencies) Regulations, 1999 defines CRA.
  • A CRA is a corporate body involved (or proposes to be engaged) in rating securities (either listed or to be listed on a SEBI-recognized stock exchange). 
• 7 CRA’s registered with SEBI: CRISIL, CARE, ICRA, Acuité, Brickwork Rating, India Ratings (Ind-Ra) And Research Pvt. Ltd, Infomerics Valuation And Rating Pvt. Ltd.

 CRA (Credit Rating Agency) and a Credit Bureau:

• CRA (Credit Rating Agency):
  • It provides an opinion relating to future debt repayments by borrowers.
  • The focus is on predicting or assessing the likelihood of future repayments.
• Credit Bureau:
  • It provides information on past debt repayments by borrowers.
  • The focus is on historical data about borrowers’ repayment behavior.

INVERSE ETF 

SEBI proposed to introduce a new asset class for investors which can offer investment strategies including long-short equity funds and inverse ETFs. 

About Inverse ETF (‘Short ETF’ or ‘Bear ETF’) 

• It is an Exchange Traded Fund (ETF) constructed by using various derivatives to profit from a decline in the value of an underlying benchmark. 
• ETFs are marketable securities that track an index, a commodity, bonds, or a basket of assets like an Index Fund. 
• It gains from a drop in the value of an underlying benchmark. 
• Only intended for short holding periods. 

SEHER PROGRAM

• Women Entrepreneurship Platform (WEP) and TransUnion CIBIL has launched SEHER Program. 
• WEP is a public-private partnership platform incubated at NITI Aayog aiming at empowering women entrepreneurs. 

About SEHER Program 

• It is a credit education program which will help women entrepreneurs to access financial tools for business growth with financial literacy content and business skills. 
• Program is part of WEP’s Financing Women Collaborative (FWC), a first-of-its-kind initiative aimed at accelerating access to finance for women entrepreneurs. 
• Presently, only 7% of overall outstanding loans to MSMEs are to women-led businesses, signifying the need for improving credit access to women entrepreneurs.

Regional Disparity in Development (India)

• Disparity in Relative Per Capita Income:
  • Western and Southern regions (Delhi, Telangana, Karnataka, Haryana) lead in per capita income.
  • Delhi’s per capita income is 2.5 times the national average.
  • Odisha shows significant improvement in per capita income, but West Bengal lags.
• Dominance of Southern States in GDP Contribution: Southern states contribute over 30% to India’s GDP.
• Better Performance of Maritime States: States with maritime access outperform others, except West Bengal.
• Punjab vs. Haryana: Punjab’s per capita income growth lags behind Haryana’s.
• Eastern States Remain a Concern: Development is slow due to economic and social challenges, despite some stability in Bihar.

Factors Responsible for Regional Disparity:

• Historical: British-era policies favored certain regions, leading to long-lasting economic imbalances.
• Geographical: Difficult terrain in areas like the North-East impacts development.
• Economic: States with advanced industries (Maharashtra, Gujarat) have higher incomes than agrarian states (Bihar, UP).
• Infrastructure Deficit: Poor infrastructure limits growth in underdeveloped regions.
• Governance: Political instability deters investment.
• Failure of Planning Mechanisms: Industries prefer regions with established infrastructure and resources.

Note:

“Dutch disease” refers to when rapid development in one sector, especially natural resources, negatively impacts other sectors.

Implications of Regional Disparity in Development:

• Security Threats: Naxalism is concentrated in underdeveloped areas with large developmental gaps.

• Political Fragmentation: Demands for statehood (e.g., Telangana, Vidarbha) arise from regional imbalances.
• Migration for Livelihood: High migration from underdeveloped states (e.g., UP, Bihar) to more developed areas.
•  Reinforcing Imbalance: Wealthy areas attract more investment, leading to faster growth in cities like Chennai and Bangalore.
• Environmental Impact: Industrial concentration causes pollution, e.g., air and water pollution in Delhi.

Initiatives to Eliminate Regional Disparity in Growth:

• Aspirational Districts Programme (ADP): Focuses on transforming 112 underdeveloped districts.
•  Aspirational Block Programme (ABP): Aims to improve governance and enhance citizens’ quality of life.
•  ‘Vocal for Local’ for Self-reliance: Promotes grassroots entrepreneurship and self-reliance in backward regions.
• Human Resource Development: Focuses on skill development and institutional delivery.
•  Border Area Development Programme (BADP): Addresses needs of people in remote border areas.

Way Ahead to Reduce Regional Disparity:

• Tailored Approaches: Use targeted programs like Hilly Area Development rather than a one-size-fits-all approach.

• Performance-Based Funding: Tie funding to developmental standards and prioritize backward regions.
• Strengthening Governance: Improve administration in backward states to boost revenue and investment.
• Balanced Infrastructure Development: Enhance infrastructure in underdeveloped states to improve investment.

 Sectoral Investment:

• Increase agricultural investment, especially in lagging regions.
• Focus on the service sector to drive growth in backward areas.

Conclusion: For balanced regional development, focus on fostering investment, efficient resource use, better governance, infrastructure improvement, and promoting competitive federalism.

Middle Income Trap

World Bank’s World Development Report 2024: The Middle Income warns countries, including India, risk falling into the middle-income trap.

Definition: Rapidly growing economies stall at middle-income levels, struggling to reach high-income status.

Classification:

• MICs (Middle Income Countries): Per capita GNI between $1,136 and $13,846.
• Lower MICs: GNI $1,136 – $4,465 (India: ~$2,500).
• Upper MICs: GNI $4,466 – $13,845.

Key Trends & Challenges:

Global Trends:

•  Slower progression to high-income status, aging populations, rising debt, geopolitical conflicts, environmental challenges.

India’s Vulnerabilities:

• Untapped Human Capital
• Low employability (51% of graduates).
• Limited formal skill training (2.3% workforce trained).

Innovation Gaps: 

• Low R&D investment (0.64% of GDP) compared to China (2.4%) and the US (3.47%).

Income Inequality: 

• Top 1% holds 22.6% of income, impacting tax revenue, social stability, and economic growth.

STAGNANT INDUSTRIALIZATION

• Skipped from agriculture to services; manufacturing sector remains underdeveloped, leading to employment issues.

Global Challenges:

•  Pressure from high-tech economies, competition with low-wage countries, rising debt, and environmental considerations.

World Bank’s Recommendations:

• Strategy for High-Income Transition (3I Strategy):
• Investment in infrastructure and human capital.
• Infusion of Global Technologies.
• Innovation to boost productivity.

Key to Success: 

• Embrace “Creative Destruction” to drive economic transformation.
• Economic Growth in Lower-Income Nations:
• Investment: Enhance climate for both domestic and foreign investment.
• Lower MIC Transition (2I Strategy):
•  Investment Infusion: Import global ideas/technology and spread across economy.

Upper MIC Transition (3I Strategy):

• Innovation: Develop local technology and innovations to sustain growth.
•  Key Steps for MIC Growth:
•       Human Capital: Focus on skilled workforce and innovation policies (e.g., AIM, IPR).

Market Reforms: 

• Brain gain, strategic support, global market access, and competition laws.

Digital Tech:

•  Boost financial inclusion and mobility through digital tools.

Global Headwinds:

•  Integrate in low-carbon supply chains; push for less trade protectionism.

Conclusion: Tailored policies are essential for MICs like India to escape the middle-income trap.

FINANCIAL INCLUSION AND 10 YEARS OF PMJDY

Pradhan Mantri Jan Dhan Yojana (PMJDY): 10th Anniversary

• Started on August 28, 2014, by PM Narendra Modi to boost financial inclusion.

Objectives:

• Provide banking access for all.
• Promote financial literacy and offer credit, insurance, and pension services.

 Key Features:

• Zero-balance accounts with RuPay debit cards.
• Accidental insurance up to ₹2 lakh.
• Overdraft facility of up to ₹10,000.
• Supports Direct Benefit Transfers (DBT) for government schemes.

 Achievements:

• Over 50 crore accounts; 56% held by women, 67% in rural areas.

• Deposits over ₹2 lakh crore.

• Key in COVID-19 relief disbursement.

 Impact:

• Empowered women and rural communities.

• Boosted Digital India and cashless economy.

 Future Focus:

•  Expand access to micro-pensions, insurance, and credit facilities.

• The initiative has been crucial in bridging India’s financial inclusion gap over the past decade.

Financial Inclusion:

1.  Definition: Access to affordable financial services like savings, credit, and insurance for all (World Bank).

2. Objective: Extend financial services to underserved populations to boost economic growth.

Significance

• Credit Access: Supports MSMEs, job creation, and GDP growth.
• Savings: Encourages saving habits, increasing capital.
• Inclusive Growth: Reduces poverty, boosts education and health investment.
• DBT Savings: Saved ₹63,000 crore in FY22-23.
• Women Empowerment: 55.6% PMJDY accounts held by women.
• Supports SDGs: Helps achieve 7 out of 17 Sustainable Development Goals.

Challenges

• Demand Side: Low income, lack of awareness.
• Supply Side: Banks hesitant to serve low-value customers.
• Infrastructure Gaps: Poor connectivity and power issues, Increased risk due to digital platforms.

Financial Inclusion Initiatives in India

• Kisan Credit Card (KCC) Scheme: Launched in 1998 to provide credit access to farmers.
• Self Help Groups (SHG) & Joint Liability Groups (JLG):  Enable collateral-free loans.
• MGNREGA Wage Payments: Payments made via banks/post offices to promote financial inclusion.
• India Post Payment Banks: Provides microfinance services in rural areas.

Way Forward

• Public-Private Partnerships: Boost mobile money and digital payment services.
• Financial Literacy: Integrate financial education from schools to higher levels.
• Fintech Innovations: Use mobile banking and alternative credit scoring for affordable services.
• Tailored Financial Products: Offer microinsurance and pension schemes like Atal Pension Yojana.

Pradhan Mantri Jan Dhan Yojana (PMJDY)

• Launched: August 2014, under the Ministry of Finance.
• Aim is to Universal access to financial services like savings, credit, insurance, and pensions.

Features:

• BSBDA Accounts: Zero balance, easy KYC, camp-mode account opening.
• Small Accounts: Open without legal documents.
•  Micro-insurance, micro-pension, ₹10,000 overdraft (up to age 65).

RuPay Debit Card: Free accidental insurance cover increased to ₹2 lakhs

Linked Schemes: DBT, PMJJBY, PMSBY, APY, MUDRA.

6 Pillars

1. Universal Banking

2. Credit Guarantee Fund

3. Overdraft Facility

4. Financial Literacy

5. Micro-Insurance

6. Pension for Unorganized Sector

Achievements (Aug 2024)

• Accounts: 53.13 crore (up from 14.72 crore in 2015).
• RuPay Cards: 36.14 crore issued.
• Deposits: Grew 4.12x to ₹2.3 lakh crore.
• Zero-Balance Accounts: Halved to 4.26 crore.
• Rural Reach: 100% villages covered within 5 km of banking.

50 Years of Indian Microfinance Sector

• 1974: India’s first MFI, SEWA Bank, registered as a cooperative bank.
• 1976: Muhammad Yunus founded Grameen Bank in Bangladesh, pioneering modern microfinance.

Regulation: RBI oversees MFIs in India.

Malegam Committee (2010):

•  Recommended a framework for regulating NBFC-MFIs.

Services: Provides small loans, savings accounts, fund transfers, and micro-insurance to underserved populations.

Sector Summary

•  Significance: Key for financial inclusion, poverty reduction, rural development, and women’s empowerment.
•  Challenges: High transaction costs, lack of collateral, higher interest rates, costly credit, and low financial literacy.
•  Government Initiatives: SHG-Bank Linkage Program and Pradhan Mantri Mudra Yojana (PMMY) for loans up to ₹10 lakh (raised to ₹20 lakh in 2024 Budget).
• PMMY Loan Categories: Shishu, Kishore, and Tarun for small/micro enterprises.

National Industrial Corridor Development Programme (NICDP)

•  Recent Approval: Union Cabinet approved 12 new industrial nodes across 10 states, including Uttarakhand, Punjab, Maharashtra, Kerala, UP, Bihar, Telangana, AP, and Rajasthan.
•  Greenfield Smart Cities: New industrial cities will be developed as greenfield smart cities with ‘plug-n-play’ and ‘walk-to-work’ concepts.
•  Programme Launch: Began with the Delhi-Mumbai Industrial Corridor (DMIC) in 2007; now includes 11 corridors managed by NICDC.
•  Objectives: Boost manufacturing growth, systematic urbanization, and use next-gen technologies for integrated infrastructure.
• Investment Attraction: Focuses on attracting investments from large industries and MSMEs to foster a robust industrial ecosystem.
• Enhanced Connectivity: Aligns with PM GatiShakti Plan, promoting multi-modal connectivity for efficient movement of goods and services.

Industrial Corridors

• Key Corridors: Includes Delhi-Mumbai, Amritsar-Kolkata, Bengaluru-Chennai, Vizag-Chennai, and Hyderabad-based corridors, among others, aimed at boosting manufacturing and urban development.
• Objectives: Focus on creating smart industrial cities with advanced infrastructure, enhancing connectivity, and attracting investments to stimulate economic growth.

Industrial Corridor Development:

• GVC Integration: NICDP aims to position India in the global value chain, creating over 4 million jobs with a focus on sustainable, smart industrial cities.
• Challenges: Issues include disjointed planning, governance gaps, lengthy city development timelines, land acquisition hurdles, and environmental concerns.
• Way Forward: Enhance collaboration with local authorities, involve farmers in land projects, improve state-central coordination, and leverage technology for efficient execution.
• Related Initiatives: Includes SEZs for tax benefits, NIMZs for manufacturing hubs, and industrial parks for planned economic growth.

Vadhvan Port:Prime Minister Narendra Modi recently laid the foundation stone for Vadhvan Port near Dahanu in Maharashtra’s Palghar district, aiming to boost maritime infrastructure and trade.

• 13th Major Port: Located in Palghar, Maharashtra, Vadhvan will be India’s largest container port with deep-water capabilities, developed by Vadhavan Port Project Limited (VPPL), a JV between Jawaharlal Nehru Port Authority (74%) and Maharashtra Maritime Board (26%).
• High Capacity: Expected to handle 254 million tonnes of cargo annually and accommodate ultra-large container ships with a natural draft of ~20 meters.

• Strategic Location: Proximity to the Western Freight Corridor and Delhi-Mumbai Expressway will enhance trade, create new business opportunities, and boost local employment.
• Global Trade Hub: Will serve as a gateway for IMEEC and INSTC corridors, reducing transit times and enhancing India’s maritime connectivity.
• Sustainability Focus: Incorporates eco-friendly practices and advanced infrastructure to minimize environmental impact, contributing to India’s port sector growth.
• India’s port sector, the 16th largest globally, handles 95% of trade by volume with 12 major ports (soon 14 with Vadhvan and Galathea) and over 200 non-major ports, ranking 22nd in the World Bank’s Logistics Performance Index with efficient turnaround times.

India’s Port Sector and Initiatives

•  Major and Minor Ports: India has 12 major ports (soon 14 with Vadhvan and Galathea) managed by the central government under the Major Port Authorities Act, 2021, and over 200 minor ports regulated by state governments under the Indian Ports Act, 1908.
• Challenges: Key issues include financing difficulties, regulatory delays, outdated infrastructure, poor connectivity, labor inefficiencies, and high costs in upgrading old ports.

 Port Modernisation: Focus on increasing cargo handling capacity through dredging, improving connectivity, enhancing PPP participation, and creating a maritime fund for inland waterways and non-major port development.

Key Initiatives:

• Sagarmala Programme: Aims to reduce logistics costs and optimize container movement.

• Maritime Amrit Kaal Vision 2047: Focuses on world-class ports and sustainable maritime development.

• National Logistics Portal (Marine) and Sagar Manthan for digital efficiency and transparency.
• Galathea Port: To be India’s 14th major port, developed as an International Container Transshipment Port (ICTP) in Andaman & Nicobar, strategically located near the Malacca Strait to boost India’s EXIM trade and reduce dependence on foreign transshipment hubs like Colombo and Singapore.

PM E-DRIVE Scheme

1. Objective: The PM E-DRIVE Scheme aims to accelerate electric vehicle (EV) adoption by offering upfront incentives, promoting charging infrastructure, and enhancing air quality.

2. Fund Allocation and Targets: With a budget of ₹10,900 crore for 2024-26, it supports e-2Ws, e-3Ws, and e-buses, along with the installation of over 70,000 fast chargers across major cities and highways.

3. Subsidies for EV Purchase: Consumers get demand incentives based on battery capacity, reducing the upfront cost of e-2Ws and e-3Ws. This subsidy is provided to manufacturers and reimbursed by the government.

4. Charging Infrastructure: Public charging stations will be installed in selected cities and highways, following the Ministry of Power’s 2024 guidelines. The scheme includes incentives for e-buses and charging stations.

5. Encouraging Local Manufacturing: The scheme promotes domestic manufacturing of EVs and charging infrastructure, independent of existing PLI schemes,while encouraging states to offer additional fiscal benefits.

6. Phased Manufacturing Programme (PMP): OEMs must follow the PMP to qualify for support, encouraging localized production of EVs and components.

7. EV-Friendly Policies: The scheme includes fiscal and non-fiscal incentives like toll exemptions, reduced road taxes, and public-private partnerships, enhancing the ease of EV adoption in India.

8. PM-eBus Sewa-Payment Security Mechanism (PSM): The scheme supports the deployment of over 38,000 e-buses from 2024-25 to 2028-29, using a Public-Private Partnership model where OEMs/operators handle procurement and operation, with no upfront cost for Public Transport Authorities (PTAs).

• The scheme ensures timely monthly payments to operators through a dedicated fund, with operations supported for up to 12 years, managed by Convergence Energy Services Limited (CESL).

Voluntary Vehicle Modernization Program

1. Launch and Purpose:  The Ministry of Road Transport and Highways introduced the Voluntary Vehicle Modernization Program (Vehicle Scrapping Policy) to phase out outdated, polluting vehicles. It aims to create a network of Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATS) to modernize India’s vehicle fleet.

2. Incentives for Scrapping: 

• Vehicle owners receive a Scrappage Certificate after scrapping their old vehicles, which offers discounts on new vehicle purchases. Commercial vehicle manufacturers provide up to a 3% discount, and passenger vehicle manufacturers offer 1.5%. Additional incentives include tax concessions and registration fee waivers.

3. Mandatory Fitness Testing:

•  Commercial vehicles (CVs) require fitness tests every two years for the first 8 years and annually afterward. Private vehicles (PVs) need a fitness certificate after 15 years. From April 2023, heavy CVs must use ATS for fitness testing, with all other vehicle categories transitioning by June 2024.

4. Benefits:

•  The policy aims to reduce air pollution by removing high-emission vehicles, stimulate the auto industry, enhance road safety, and promote a circular economy by recycling metals like steel and aluminum from scrapped vehicles.

5. Challenges:

•  Key challenges include limited scrapping infrastructure, lack of public awareness, dominance of unorganized scrapping sectors, high new vehicle costs, and weak enforcement leading to fake fitness certifications.

6. Future Plans: 

• The government plans to expand scrapping infrastructure through Public-Private Partnerships (PPP), streamline scrapping procedures, enforce stricter fitness checks, and integrate the management of electric vehicle waste. Public awareness campaigns will be essential for program success.

MINERAL SECURITY PARTNERSHIP FINANCE NETWORK

1. India Joins MSP Finance Network: 

• India has joined the US-led Minerals Security Partnership (MSP) Finance Network to ensure sustainable supply chains for critical minerals, as part of efforts to diversify resources and reduce dependence on China.

2. MSP Finance Network Goals:

•  MSP Finance Network, involving 14 countries and institutions like DFC and JICA, aims to fund global projects for critical minerals by promoting cooperation and private sector investment across production, processing, and recycling.

3. Importance of Critical Minerals: 

• Critical minerals like lithium, cobalt, and rare earth elements are vital for technologies in telecommunications, renewable energy, and defense. These minerals are scarce and face supply chain risks due to limited global production and geopolitical tensions.

4. Challenges for India:

•  India’s limited domestic reserves of critical minerals lead to heavy reliance on imports. Issues such as geopolitical risks, global competition, inadequate recycling infrastructure, and environmental concerns hinder securing these resources.

5. Indian Initiatives and Future Steps:

•  India is addressing these challenges through policies like the Mines and Minerals (Development and Regulation) Amendment Act, international partnerships, recycling initiatives, and proposals to enhance domestic processing and establish a Centre of Excellence for critical minerals.

STEEL SECTOR IN INDIA

1. India’s Steel Sector Goals: 

• India targets 500 million tonnes of steel production by 2034, driven by domestic resources, infrastructure growth, and sectors like railways and automotive.

2. Challenges Facing the Sector:

•  High capital costs, costly logistics, limited coking coal reserves, low per capita consumption, energy intensity, and export challenges due to carbon taxes are key hurdles for the Indian steel industry.

3. Government Initiatives: 

• Policies like the National Steel Policy 2017 and the Production-Linked Incentive (PLI) scheme for specialty steel aim to boost production, support infrastructure projects, and reduce reliance on imports. The “Make in India” initiative encourages domestic steel use across major sectors.

4. Economic and Strategic Significance:

•  Steel production contributes 2% to India’s GDP, and is vital for infrastructure and employment, with a high employment multiplier effect of 6.8x.

5. Decarbonization Efforts:

•  Policies like the Perform, Achieve, and Trade (PAT) scheme, and Steel Scrap Recycling Policy 2019 encourage energy efficiency and recycling. Investments in green technology and reduced CO2 emissions per tonne are ongoing efforts.

6. Way Forward:

•  Enhancing cleaner technology, promoting Industry 4.0 for productivity, diversifying products, and creating advanced alloys are essential to help India’s steel sector meet domestic and international standards and decarbonization goals.

WHITE REVOLUTION AND DIARY SECTOR

1. White Revolution 2.0 Goals:

•  The initiative aims to transform India’s dairy sector, increasing milk procurement by 50%, enhancing infrastructure, empowering women farmers, and promoting dairy exports through NPDD 2.0.

2. White Revolution Background:

•  Launched in 1970 under Operation Flood, the White Revolution made India the world’s largest milk producer, enhancing self-sufficiency and establishing a national milk grid. It was spearheaded by Dr. Verghese Kurien, known as the “Father of India’s White Revolution.”

3. Achievements of the White Revolution:

•  The program improved milk quality, boosted farmer incomes, minimized price fluctuations, and eliminated middlemen. It contributed to rural development and uplifted the socio-economic status of 10 million farmers.

4. Importance of Cooperatives:

•  Dairy cooperatives like Amul and Nandini have enabled small farmers to access markets, improved women’s economic independence, provided credit access, and enhanced resilience to market fluctuations.
•  August 2014, under the Ministry of Finance.

 New Schemes for Agriculture Sector

1. Approval of Seven Schemes:

• The government approved seven major schemes with an outlay of ₹14,235 crore to enhance farmers’ lives and livelihoods, covering digital agriculture, crop science, livestock health, and more.

2. Key Schemes Introduced:

• Digital Agriculture Mission for precision farming.
• Focus on crop science to ensure food and nutritional security.
• Strengthening Agricultural Education to improve policy-making and rural infrastructure.

• Emphasis on livestock health and sustainable horticulture development.
• Enhancement of Krishi Vigyan Kendras (KVKs) for technology dissemination.
• Sustainable management of natural resources.

3. Current Agricultural Challenges:

• 65% of India’s population lives in rural areas; 47% depend on agriculture.
• Farmers’ average monthly income was ₹10,218 in 2018-19.
• Issues include outdated technology, limited mechanization (only 47%), low R&D investment (0.4% of agri-GDP), and restricted access to credit.

4. Natural Resource Management Issues:

• Challenges include soil degradation, overuse of fertilizers, water scarcity, and inefficient water use in rainfed agriculture.

5. Supply Chain and Export Barriers:

• Inadequate infrastructure leads to a 30-35% loss in fruits and vegetables.
• Non-tariff barriers affect exports, and productivity remains low (e.g., rice yield is 2.85 t/ha compared to 4.7 t/ha in China).

6. Leveraging Technology:

• The Digital Agriculture Mission aims to optimize land use, provide weather forecasting, and promote precision farming to reduce yield losses.

7. Special Focus on Sub-sectors:

• Emphasis on livestock and horticulture for higher productivity and sustainability, with dairy and genetic resource management.

8. Recommendations from Ashok Dalwai Committee:

• Encourage professional service providers for farm operations.
• Promote secondary agriculture for value addition and enhance agro-logistics.
• Expand agriculture’s mandate to support industrial raw material needs.

9. Sector Diversification:

• Shift focus from traditional crops like cereals to nutri-cereals, fruits, vegetables, and proteins, aiming for a diversified agricultural approach including dairy, fisheries, and horticulture.

 Digital Agriculture Mission

1. Launch and Objectives:

• The Union Cabinet approved the Digital Agriculture Mission with a budget of ₹2,817 crore to modernize the agriculture sector using Digital Public Infrastructure (DPI). It aligns with the Union Budget announcements for FY 2023-24 and FY 2024-25.

2. Key Features:

• The mission focuses on two pillars: Agri Stack (includes Farmer IDs, geo-referenced village maps, and a Crop Sown Registry) and the Krishi Decision Support System (DSS) for comprehensive data integration on soil, crops, weather, and water resources.
• Targets include creating digital identities for 11 crore farmers over three years and launching a nationwide Digital Crop Survey covering all districts by FY 2025-26.

3. Significance of Digital Agriculture:

• Digital agriculture promotes precision farming and smart farming to optimize resource use, improve farm management, and enhance sustainability. Technologies include drones, remote monitoring, and big data analytics.

4. Benefits for Farmers:

• Aims to provide farmers with access to real-time data, accurate crop yield estimates, better disaster management, and streamlined access to government schemes like crop insurance and credit.

• Expected to generate employment for approximately 2.5 lakh local youth and Krishi Sakhis by creating new roles in digital agriculture services.

5. Challenges:

• Implementation faces hurdles such as fragmented landholdings, high initial costs, insufficient digital infrastructure, low digital literacy among farmers, and language barriers in accessing technology.

6. Government Initiatives to Support Digital Agriculture:

• Frameworks like the India Digital Ecosystem of Agriculture (IDEA), National e-Governance Plan in Agriculture (NeGP-A), and digital platforms like e-NAM and PM-KISAN Mobile App support the mission’s objectives.

7. Conclusion:

• The Digital Agriculture Mission is crucial for transforming Indian agriculture, but it requires robust R&D, policy support, and focus on affordability and accessibility to maximize its impact on farmers’ livelihoods.

Sustainable Livestock Health and Production Scheme

1. Scheme Approval and Focus:

• The Union Cabinet approved a sustainable livestock health and production scheme with a budget of ₹1,702 crore to boost farmers’ income through better livestock and dairy management. The scheme covers animal health, dairy technology, genetic resource management, and animal nutrition.

2. Significance of Livestock Sector:

• India has the world’s largest livestock population and is the leading producer of buffalo meat and milk. Livestock contributes 30.19% of Agricultural GVA and 5.73% of Total GVA (2021-22). It is a key livelihood source for over 70% of rural households and supports food and nutritional security.

3. Challenges in the Livestock Sector:

• Issues include animal diseases (e.g., Foot and Mouth Disease), inadequate veterinary infrastructure, low productivity, high antibiotic use, and unorganized meat production. Other challenges are low insurance coverage (15.47% of animals), fodder shortage, and significant methane emissions.

4. Government Initiatives:

• Programs like Rashtriya Gokul Mission, National Livestock Mission, and National Animal Disease Control Programme (NADCP) focus on breed improvement, capacity building, disease control, and dairy modernization. Extension of Kisan Credit Card (KCC) to livestock farmers also supports the sector.

5. Way Forward for Improvement:

• Suggestions include mobile veterinary services, increasing insurance coverage, promoting livestock-based integrated farming systems, improving market access, and leveraging digital platforms for better value chains. A national review of staffing and training in veterinary services is also recommended.

6. Environmental Considerations:

• Addressing the sector’s impact on greenhouse gas emissions and promoting sustainable practices are essential for balancing livestock productivity with environmental sustainability.

Horticulture Sector in India: 

 Government Scheme for Sustainable Development of Horticulture

• Cabinet approved a scheme with an outlay of ₹1,129.30 crore to promote tropical, sub-tropical, temperate crops, vegetables, floriculture, spices, and medicinal plants.

 Clean Plant Programme (CPP)

• ₹1,766-crore initiative under the Mission for Integrated Development of Horticulture (MIDH) to ensure virus-free, high-quality planting material.
• Core Components: Establishing 9 Clean Plant Centers, certification under the Seeds Act, and infrastructure support for large-scale nurseries.

Horticulture’s Status in India

• Production: 355.48 million tonnes in 2022-23, contributing 33% to Agriculture Gross Value Added (GVA).
• India is 2nd globally in fruits and vegetable production and leads in bananas, mangoes, and papayas.

 Significance of Horticulture

• Addresses food and nutritional security, doubles farmers’ income, generates employment, boosts exports, and supports rural development.

 Initiatives for Horticulture Development

• Mission for Integrated Development of Horticulture (2014): Holistic growth via cluster-based approaches.

• CHAMAN: Geoinformatics for crop assessment.
• Capital Investment Subsidy for cold storage infrastructure.

Challenges in the Sector

• Low export share (1.6%), food safety issues, infrastructure deficits (cold storage inequity), small landholdings, limited value addition, and climate-induced risks.

 Potential Solutions

• Expand cold storage capacity, improve transportation infrastructure, and promote value-added products like processed foods.

 Encouraging Modern Practices

• Focus on precision agriculture, hydroponics, tissue culture, climate-smart agriculture, and water-saving technologies.

 Way Forward

• Build capacity for meeting international standards, enhance credit access for farmers, promote entrepreneurship, and strengthen farm mechanization.

National Pest Surveillance System (NPSS):

1. Objective and Features

• Launched by the Ministry of Agriculture, NPSS uses AI and ML to provide scientific pest management advice. Farmers upload crop photos on its app/portal for expert recommendations.

2. Integrated Pest Management (IPM)

• Eco-friendly approach combining cultural, physical, biological, and chemical methods to minimize pesticide use and enhance crop health.

3. Benefits

• Reduces crop losses (15-25%), production costs, and pesticide residues, promoting higher-quality produce and environmental sustainability.

4. Challenges and Innovations

• Barriers include high initial costs, lack of awareness, and monitoring difficulties. Solutions involve GIS mapping, CRISPR-based pest controls, and drone technology for pest detection.

Pradhan Mantri Mudra Yojana (PMMY):

1. Objective and Overview

• Launched in 2015, PMMY aims to extend affordable credit to micro and small enterprises (MSMEs), bringing them into the formal financial system. It offers loans under three categories: Shishu (up to ₹50,000), Kishore (₹50,001–₹5 lakh), and Tarun (₹5 lakh–₹20 lakh).

2. Achievements

• Provided credit support of ₹18.39 lakh crore to over 35 crore micro and small entrepreneur accounts.
• Women entrepreneurs account for 71.4% of loan accounts (FY 2022), with significant support to SC/ST/OBC borrowers.
• Promoted financial inclusion and small businesses, with 80% of loans under the Shishu category.

3. Challenges Identified

• Rising NPAs: Public sector banks face the highest NPA rates (22.6%), particularly in Kishore accounts.
• Regional disparities: Northeast region records the lowest loan disbursement and declining trends post-FY 2018.
• Implementation gaps: Issues with documentation, connectivity in remote areas, and limited employee capacity hinder progress.

4. Institutional Issues

• Complex processes under the Credit Guarantee Fund for Micro Units (CGFMU) and lack of centralized, digitized platforms for data management and redressal.
• Poor monitoring, absence of standardized performance evaluation, and lack of credit penetration to weaker sections.

5. Way Forward

• Promote awareness through traditional and digital media.
• Digitize the lending process, create real-time beneficiary data portals, and integrate with other schemes like “59-Minute Loans.”
• Incentivize well-performing institutions and adopt group-based lending systems to reduce NPAs and improve outreach.

Creative Economy:

1. Definition and Characteristics

• The creative economy refers to knowledge-based economic activities in creative industries that involve intellectual property, creativity, and cultural value. It is adaptable, technology-driven, and thrives on innovation.

2. Significance

• Globally, it generates $2 trillion annually and provides 50 million jobs. It enhances skill development, education, and India’s soft power while promoting sustainability due to its low reliance on natural resources.

3. Challenges

• Issues include a digital divide, rural-urban disparity (67% of creative workers are urban), slow patent processes, lack of awareness about local arts, and societal bias favoring conventional careers.

4. Initiatives in India

• Efforts include the National Policy on IPR (2016), Zonal Cultural Centers, UNESCO Creative Cities Network, and National Creators Awards to recognize and preserve India’s cultural and creative heritage.

5. Way Forward

• Promote Indian culture globally, improve financing options through credit schemes and crowdfunding, reform IPR frameworks, establish creative hubs, and focus on skill development for digital and entrepreneurial roles.

Model Skill Loan Scheme:

1. Scheme Overview

• Revised scheme aims to provide easy loans for advanced skill courses, with loan amounts up to ₹7.5 lakh, accessible through banks, NBFCs, MFIs, and SFBs. Loans are backed by a 75% credit guarantee.

2. Need for Skill Development

• Addresses challenges like youth unemployment (10% in 2022-23) and job transformation driven by technology (23% jobs to change globally by 2028). Focuses on leveraging India’s demographic dividend and aligning skills with industry demands.

3. Challenges

• Negative perception of vocational training, lack of apprenticeship ecosystems, employment-skill mismatch (only 4.4% of youth receive formal vocational training), and limited mentorship or financial access for startups.

4. Way Forward

• Integrate skill development with education and employment policies, align industry needs with training curricula, expand rural access, and implement global best practices like Germany’s dual education system. Suggestions include creating a reimbursable industry contribution fund and establishing dedicated vocational colleges.

Transit-Oriented Development (TOD):

1. Concept and Benefits

• TOD integrates land use and transport planning to create high-density, mixed-use urban areas around transit hubs (within 500–800 meters). It promotes walkability, efficient public transport, shorter commutes, and reduced carbon footprints. TOD improves real estate values, fosters local economies, and creates vibrant, livable communities with green and public spaces.

2. Government Initiatives

• Policies like the National TOD Policy and Metro Rail Policy 2017 focus on reducing private vehicle dependency, enhancing last-mile connectivity, and creating affordable, walkable communities. Programs like the Smart Cities Mission, Urban Infrastructure Development Fund, and Pradhan Mantri Awas Yojana also emphasize TOD principles.

3. Challenges and Solutions

• Challenges include social exclusion (gentrification), lack of regional coordination, inadequate urban design, and limited financing mechanisms. The World Bank’s 3V Framework suggests assessing node value (importance of transit hubs), place value (livability around stations), and market potential value (development opportunities) to address these issues and guide effective TOD implementation.

Long-Term Capital Gains (LTCG) & Indexation Benefit:

1. Amendments in LTCG Taxation

• The Finance Bill 2024 introduces a choice for taxpayers on immovable property sales before July 23, 2024:
• Old regime: 20% tax with indexation benefit.
• New regime: 12.5% tax without indexation benefit.
• Post-July 23, 2024, only the new regime applies. Exemptions for listed equities, mutual funds, and business trusts increased from ₹1 lakh to ₹1.25 lakh.

2. Indexation and its Role

• Indexation adjusts the purchase price of assets for inflation using the Cost Inflation Index (CII), reducing taxable gains.
• It ensures tax is levied on real gains rather than inflation-driven increases, lowering taxpayers’ liabilities.

3. Significance of Amendments

• Flexibility for property owners to choose tax regimes helps minimize tax burdens.
• Promotes real estate investments by reducing the financial burden of selling properties.
• Reduces the black market by encouraging compliance with tax laws.

4. Concerns and Challenges

• Higher tax liability under the new regime may discourage investments and increase black money transactions through undervaluation of properties.
• The lack of indexation could lead to inequities and potential loss of government tax revenue. Adjustments in the policy may be required for a balanced and fair system.