Daily Current Affairs : 2nd and 3rd February

Daily Current Affairs for UPSC CSE

Topics Covered

  1. Wetlands
  2. Bodoland Dispute and Accord
  3. Centre Rejects advise on Special Grant for States
  4. Facts for Prelims
  5. Budget
  6. Key Highlights of the budget

1 . Wetlands


Context : February 2, was World Wetlands Day. It was on this date in 1971 that the Ramsar Convention on Wetlands was adopted in Ramsar, Iran. Recently the Ministry of Environment, Forests and Climate Change had announced that the Ramsar Convention had declared 10 wetlands from India as sites of “international importance”, taking the total number of Ramsar Sites in the country to 37.

Why the focus on wetlands?

  • The Ramsar Convention definition for wetlands includes marshes, floodplains, rivers and lakes, mangroves, coral reefs and other marine areas no deeper than 6 metres at low tide, as well as human-made wetlands such as waste-water treatment ponds and reservoirs.
  • The IPBES (Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services) the global assessment identified wetlands as the most threatened ecosystem.
  • This impacts 40% of the world’s plant and animal species that live or breed in wetlands, according to UNESCO. Thirty per cent of land-based carbon is stored in peatland; one billion people depend on wetlands for their livelihoods; and wetlands provide $47 trillion in essential services annually, according to the Wetlands Day official website.
  • This year’s Wetlands Day theme is Wetlands and Biodiversity.

What is the status of wetlands in India?

  • India has over 7 lakh wetlands and rules for their protection; yet not one of the wetlands has been notified under domestic laws
  • Wetlands are regulated under the Wetlands (Conservation and Management) Rules, 2017. The 2010 version of the Rules provided for a Central Wetland Regulatory Authority; the 2017 Rules replace it with state-level bodies and created a National Wetland Committee, which functions in an advisory role. The newer regulations removed some items from the definition of “wetlands” including backwaters, lagoon, creeks, and estuaries.
  • “The 2010 Rules required States to identify and prepare Brief Documents, submit them to the Union Ministry of Environment and Forests, which was to notify them. Under the 2017 regulations, the whole process has been delegated to States
  • In February 2017, the Court extended protection to 2,01,503 of these under Rule 4 of the 2010 Rules, and ordered authorities to notify sites. The wetlands were supposed to have been notified by March 25, 2019, 180 days after the 2017 Rules went into force (September 26, 2017). Yet so far, not a single wetland has been notified,” Arya said. The 2,01,503 wetlands, measuring over 2.25 hectares, were identified using ISRO’s satellite imagery..
  • In October 2017, the Supreme Court expressed concern over the disappearance of wetlands, and observed, “If there are no wetlands left, it will affect agriculture and several other things. It is a very, very important issue.”

What does being a Ramsar Site mean?

  • The designation is for “Wetlands of International Importance”. “They are recognised as being of significant value not only for the country or the countries in which they are located, but for humanity as a whole… The inclusion of a wetland in the list embodies the government’s commitment to take the steps necessary to ensure that its ecological character is maintained.
  • The Convention includes various measures to respond to threats to the ecological character of Sites
  • Selection is made on the basis of various criteria defined under the convention. Article 2.2 says: “Wetlands should be selected for the List on account of their international significance in terms of ecology, botany, zoology, limnology or hydrology.”
  • There are currently over 2,300 Ramsar Sites around the world, covering over 2.1 million square km.
  • In India, the 10 new wetlands declared Ramsar Sites are Nandur Madhameshwar in Maharashtra; Keshopur-Miani, Beas Conservation Reserve and Nangal in Punjab; and Nawabganj, Parvati Agra, Saman, Samaspur, Sandi and Sarsai Nawar in UP.

2. Bodoland issue


Context : Last week the Centre, the Assam government and Bodo groups — including all factions of the militant National Democratic Front of Bodoland (NDFB) — signed an agreement for peace and development.

What is the Bodo issue?

  • Bodos are the single largest community among the notified Scheduled Tribes in Assam. Part of the larger umbrella of Bodo-Kachari, the Bodos constitute about 5-6% of Assam’s population.
  • The first organised demand for a Bodo state came in 1967-68 under the banner of the political party Plains Tribals Council of Assam. In 1985, when the Assam Movement culminated in the Assam Accord, many Bodos saw it as essentially focusing on the interests of the Assamese-speaking community. In 1987, the All Bodo Students Union (ABSU) led by Upendra Nath Brahma revived the Bodo statehood demand. The armed group Bodo Security Force arose, under the leadership of Ranjan Daimary, in October 1986. It subsequently renamed itself NDFB, and later split into factions.
  • According to the Memorandum of Settlement (MoS) all NDFB factions under SoO [Suspension of Operations] shall abjure path of violence, surrender their weapons and disband their armed organisations within one month of signing this MoS

What is the Bodoland Territorial Council?

  • It is an autonomous body under the Sixth Schedule of the Constitution. There have been two Bodo Accords earlier, and the second one led to the formation of BTC.
  • The ABSU-led movement from 1987 culminated in a 1993 Bodo Accord, which paved the way for a Bodoland Autonomous Council (BAC), but ABSU withdrew its agreement and renewed its demand for a separate state.
  • In 2003, the second Bodo Accord was signed by the extremist group Bodo Liberation Tiger Force (BLTF), the Centre and the state. This led to the BTC.

What has been settled now?

  • The most significant point is this Accord marks the end of the armed movement.
  • Assam minister Himanta Biswa Sarma said the demand for statehood came to end with the Accord. An ABSU leader, however, said: “It is not mentioned anywhere in the settlement that the ABSU will give up the statehood demand.”
  • The agreement says: “Negotiations were held with Bodo organisations for a comprehensive and final solution to their demands while keeping intact the territorial integrity of the State of Assam.”

What was agreed on territory?

  • The area under the jurisdiction of BTC, formed under the 2003 Accord, was called the Bodo Territorial Autonomous District (BTAD). Now the BTAD was renamed Bodoland Territorial Region (BTR).
  • BTAD comprises Kokrajhar, Chirang, Baksa and Udalguri districts, accounting for 11% of Assam’s area and 10% of its population. Estimates for the Bodo population in BTAD vary.
  • The new Accord provides for “alteration of area of BTAD” and “provisions for Bodos outside BTAD”. A commission appointed by the state government will examine and recommend if villages contiguous to BTAD and with a majority tribal population can be included into the BTR while those now in BTAD and with a majority non-tribal population can opt out of the BTR. This will lead to an increase in the Bodo population in BTR and decrease in non-tribal population, leading to mitigation of inter-community clashes wherever it was happening.
  • The government will set up a Bodo-Kachari Welfare Council for focused development of Bodo villages outside BTAD — which opens up a way to potentially address the needs of Bodos outside BTAD.
  • Several of the provisions agreed upon were an extension of what was already in effect. For instance, it provides for more legislative, executive, administrative and financial powers to BTC; and amendments to the Sixth Schedule of the Constitution to “improve the financial resources and administrative powers of BTC”.
  • The 2020 agreement says the Government of Assam “will notify Bodo language in Devanagri script as the associate official language in the state”.

What happens to the cases that were filed during the armed movement?

  • The settlement says criminal cases for “non-heinous” crimes shall be withdrawn and those in connection with heinous crimes “shall be reviewed case by case according to the existing policy on the subject”.

About Bodo Language

  • Estimated to have 1.5 million speakers (Census 2011), Bodo is listed in the Eighth Schedule of the Constitution.
  • It is spoken in Assam, where the Bodo tribe constitutes about 5-6% of the population, and in Arunachal Pradesh, Nagaland, Meghalaya, and West Bengal.
  • Bodo is officially written in the Devanagri script, the language has a history of having been written in at least three different scripts — until in 1974, the Government recognised Devanagari as its official script.
  • The language is believed to have had its own script in the pre-13th century era, when it was called Deodhai. However, scholars say there are contrasting claims and no concrete proof. 
  • 2020 Accord makes Bodo the associate official language throughout Assam
  • The new Accord also promises to establish a separate directorate for Bodo medium schools, provincialise schools and colleges in the BTAD (Bodoland Territorial Autonomous District) and establish a Cultural Complex-cum-Centre of Excellence named after the late social activist Bodofa Upendranath Brahma in Kokrajhar for protection and promotion of the language.


3 . Facts for Prelims


Poompuhar

  • Poompuhar is a Chola Dynasty port city in Tamil Nadu 
  • There are exhaustive narrations in works of Sangam Tamil literature to infer that the city, located 30 km from the existing Poompuhar town in southern TN, was submerged due to “kadalkol” or rising sea levels.

Filovirus

  • Filoviruses belong to a virus family called Filoviridae and can cause severe hemorrhagic fever in humans and nonhuman primates. So far, three genera of this virus family have been identified: Cuevavirus, Marburgvirus and Ebolavirus.

Bats induced Diseases

  • Bats often carry ebola, rabies, marburg and the SARS coronavirus.
  • Many high-profile epidemics have been traced to bats, and scientists are discovering new bat-borne viruses all the time. Ebola and Marburg viruses are known to cause severe hemorrhagic fevers, which affect many organs and damage the blood vessels, killing more than 50 percent of the people they infect, according to the World Health Organization.

Paraquat

  • Paraquat is a herbicide used in agricultural fields
  • Paraquat consumption leads to pulmonary fibrosis and patients find difficulty in respiration. Similarly, kidney failures occur. Even if a person survives, he will not be fully fit as pulmonary fibrosis worsens with the passage of time.
  • Paraquat does not have antidote.

4 . Centre Rejects advise on Special Grant for States


About the News

  • The 15th Finance Commission had recommended special grants worth ₹6,764 crores to States in 2020-21, to ensure that these states do not receive an amount less than the previous year’s allocation.
  • The Centre has rejected this recommendation on the lines that it seeks to introduce a new principle in allocation as against the already set criteria for allocation.

Accepted recommendations

  • Major recommendations accepted by the Centre include:
    • Granting the states 41% share of the divisible pool of tax collections.
    • The suggested grants-in-aid and post-devolution revenue deficit grants for 14 States.
    • The grants to local bodies.
    • Other grants like disaster-related grants and sectoral grants.

5 . Budget


Context : Budget was presented in the backdrop of India’s economic growth rate, which was the fastest in the world until about 2017, has since slowed significantly.

What was the context of the Budget?

  • In 2019-20, which is the current financial year, the real gross domestic product (GDP) growth is expected to touch a six-year low of 5 per cent. The situation is worse if one looks at nominal GDP growth, which is expected to fall to a 42-year low of just 7.5 per cent. Real GDP is the nominal GDP minus the rate of inflation.
  • If this was just a momentary dip in the growth rate, possibly because of strife in one sector of the economy, the worry may not have been too much. But the fact, despite the government’s strenuous denials, is that the Indian economy has been losing power in one engine of growth after another — and that during the past 12 months, the slowdown has intensified rapidly. It has, in the process, also exposed weaknesses of the Indian economy, which are generally hidden when times are good.
  • Slower economic activity has led to a scenario where even existing jobs are being lost — not to mention the millions that were never created. The resultant decline in incomes has been compounded by a sudden, unexpected, and sharp rise in food inflation towards the end of 2019.

What is the problem with the economy?

  • Broadly, there are four engines that provide the power to drive GDP growth in an economy.
  • These are: Consumption of private individuals (C), Demand for goods from the government (G), Investments from businesses (I) and the net demand from exports and imports (NX). GDP = C + G + I + NX
  • As mentioned earlier, with each passing year, the Indian economy has been losing its engines of growth.

Details of the crisis

  • The corporate investments (I) engine has been slowing sharply since 2011. This has happened because most businesses that took loans in the preceding decade, when the going was good, found their bets failing in the aftermath of the global financial crisis. As such, most businesses that could be expected to invest in the economy were hamstrung as they were severely over-leveraged.
  • The new businesses found that the financiers to the economy, that is the banks (especially the public sector banks, which accounted for 70 per cent to 80 per cent of all lending), were themselves struggling with non-performing assets. Many of these NPAs were the same loans that they had extended to the big businesses who were now hamstrung.
  • Due to domestic bottlenecks and a middling global demand, net exports (NX) were struggling. This trend was not helped by a renewed wave of trade protectionism across the world — reflected in events like Brexit in Europe and the trade war between the United States and China.
  • That left only C and G — that is private consumption and government expenditure — as the engines of growth.
  • Private consumption demand was first hurt in the rural areas with poor commodity prices. While this meant that retail inflation was under control, the purchasing power of farmers declined. This weakness in rural demand was compounded by a collapse in urban demand after credit flow from the non-banking financial sector companies stopped following the meltdown in IL&FS.
  • This is being witnessed in the sales slump across the board — from cars to shampoo sachets.
  • Government demand carried the day for a considerable time. But with a sharp fall in revenues, thanks to a slowing growth, there is no way the government can spend without massively flouting the Fiscal Responsibility and Budget Management (FRBM) Act targets.

What were the options before the government?

  • In the Indian context, C or private consumption demand accounts for roughly 57 per cent of total GDP. Investments (I) are the next big chunk, accounting for 32 per cent. Government spending (G) is the smallest contributor, with net exports (NX) being negative for India.
  • Under normal circumstances, it would have been natural for the government to increase its expenditure and thereby provide a strong growth impulse to the economy. That is because what the government spends turns into someone’s personal income. This income when spent again, generates more economic activity, and further incomes.
  • A slowing economy has upset the government’s tax collections. As such, because the nominal GDP grew by just 7.5 per cent in 2019-20 instead of the Budgeted growth of 12 per cent, the gross tax revenues of the government fell from Rs 24,61,195 crore to Rs 21,63,423 crore — that is a shortfall of Rs 3 lakh crore.
  • The government could have still gone ahead and borrowed more money from the market, but here too there was a problem of supply. In other words, there weren’t enough savings in the market to fuel government demand. As such, the total expenditure of the government is slated to go up by just over 9 per cent over FY20’s budgeted figure.
  • The other option was to boost investments. To a great extent, the government had already tried to do this outside the Budget, when it announced a sharp cut in corporate income tax last year. The tax cut cost the government over Rs 1.5 lakh crore in 2019-20, with little to show in terms of new investment activity. To be sure, investment decisions are not taken in a hurry and even though the corporate tax cut was a welcome decision, and one that is likely to benefit the Indian economy in the medium to long term, at present, in the immediate term, it has been ineffectual.
  • That is because investments follow demand, and consumer demand has been declining sharply. This has resulted in high unsold inventories, and is reflected in capacity utilisation falling to an all-time low late last year.
  • Still, the Finance Minister announced that there will soon be a scheme to encourage investments for the manufacturing of mobile phones, electronic equipment, and semi-conductor packaging. Similarly, she has allowed the electricity generating companies to benefit from the corporate tax cut.
  • That left the biggest driver — private consumption demand — and by the looks of it, the government has tried its best to nudge people to consume more and, by that route, kickstart a virtuous cycle. The government has tried to do this by providing people with some options that enhance their disposable income. However, in the process, it has disincentivised savings.
  • The best example of this is the option of a new Income Tax regime, which removes all exemptions and deductions, but also cuts the tax rates. The government likely hopes that taxpayers will be enthused to opt for this structure because it is likely to leave them with more money in hand.
  • This is likely to be especially true for those taxpayers who are young and lie towards the lower end of the income brackets. That is because in that age and income brackets, the so-called marginal propensity to consume is higher. The richer and higher-salaried workers tend to save most of their income.

What else has been done?

  • The Finance Minister has promised a lot of small but meaningful changes that may make it easier for the economic activity to happen, if they are implemented in right earnest. For instance, the Budget outlines several measures to incentivise start-ups in the country. Similarly, for MSMEs too, there was relief from the compliance burden as the Finance Minister raised the turnover threshold for auditing of accounts for small retailers, traders, shopkeepers etc. five times — from Rs 1 crore to Rs 5 crore.

6 . Key Highlights of Budget


Three prominent themes of the Budget

  • Aspirational India – better standards of living with access to health, education and better jobs for all sections of the society
  • Economic Development for all– “Sabka Saath , Sabka Vikas , Sabka Vishwas”.
  • Caring Society– both humane and compassionate; Antyodaya as an article of faith.
  • Three broad themes are held together by:
    • Corruption free, policy-driven Good Governance.
    • Clean and sound financial sector.
  • Ease of Living underlined by the three themes of Union Budget 2020-21.

Three components of Aspirational India

  • Agriculture, Irrigation, and Rural Development
  • Wellness, Water, and Sanitation
  • Education and Skills

Sixteen Action Points for Agriculture, Irrigation and Rural Development

  • Rs. 2.83 lakh crore to be allocated for the following 16 Action Points:
    • Rs. 1.60 lakh crore for Agriculture, Irrigation & allied activities.
    • Rs. 1.23 lakh crore for Rural development & Panchayati Raj.                          – 
  • Agriculture credit:
    • Rs. 15 lakh crore target set for the year 2020-21.
    • PM-KISAN beneficiaries to be covered under the KCC scheme.
    • NABARD Re-finance Scheme to be further expanded.
  • Comprehensive measures for 100 water-stressed districts proposed.
  • Blue Economy:
    • Rs. 1 lakh crore fisheries’ exports to be achieved by 2024-25.
    • 200 lakh tonnes fish production targeted by 2022-23.
    • 3477 Sagar Mitras and 500 Fish Farmer Producer Organisations to involve youth in fisheries extension.
    • Growing of algae, sea-weed and cage culture to be promoted.
    • Framework for development, management and conservation of marine fishery resources.
  • Kisan Rail to be setup by Indian Railways through PPP:
    • To build a seamless national cold supply chain for perishables (milk, meat, fish, etc.
    • Express and Freight trains to have refrigerated coaches.
  • Krishi Udaan to be launched by the Ministry of Civil Aviation:
    • Both international and national routes to be covered.
    • North-East and tribal districts to realize Improved value of agri-products.
  • One-Product One-Districtforbetter marketing and export in the Horticulture sector.
  • Balanced use of all kinds of fertilizers – traditional organic and innovative fertilizers.
  • Measures for organic, natural, and integrated farming:
    • Jaivik Kheti Portal – online national organic products market to be strengthened.
    • Zero-Budget Natural Farming(mentioned in July 2019 Budget) to be included.
    • Integrated Farming Systems in rain-fed areas to be expanded.
    • Multi-tier cropping, bee-keeping, solar pumps, solar energy production in non-cropping season to be added.
  • PM-KUSUM to be expanded:
    • 20 lakh farmers to be provided for setting up stand-alone solar pumps.
    • Another 15 lakh farmers to be helped to solarise their grid-connected pump sets.
    • Scheme to enable farmers to set up solar power generation capacity on their fallow/barren lands and to sell it to the grid.
  • Village Storage Scheme:
    • To be run by the SHGs to provide farmers a good holding capacity and reduce their logistics cost.
    • Women, SHGs to regain their position as Dhaanya Lakshmi.
  • NABARD to map and geo-tag agri-warehouses, cold storages, reefer van facilities, etc.
  • Warehousing in line with Warehouse Development and Regulatory Authority (WDRA) norms:
    • Viability Gap Funding for setting up such efficient warehouses at the block/taluk level.
    • Food Corporation of India (FCI) and Central Warehousing Corporation (CWC) to undertake such warehouse building.
  • Financing on Negotiable Warehousing Receipts (e-NWR) to be integrated with e-NAM.
  • State governments who undertake implementation of model laws (issued by the Central government) to be encouraged.
  • Livestock:
    • Doubling of milk processing capacity to 108 million MT from 53.5 million MT by 2025.
    • Artificial insemination to be increased to 70% from the present 30%.
    • MNREGS to be dovetailed to develop fodder farms.
    • Foot and Mouth Disease, Brucellosis in cattle and Peste Des Petits ruminants (PPR) in sheep and goat to be eliminated by 2025.
  • Deen Dayal Antyodaya Yojana – 0.5 crore households mobilized with 58 lakh SHGs for poverty alleviation.

Wellness, Water and Sanitation

  • Rs. 69,000 crore allocated for overall Healthcare sector.
  • Rs. 6400 crore (out of Rs. 69,000 crore) for PM Jan Arogya Yojana (PMJAY):
    • More than 20,000 hospitals already empanelled under PM Jan Arogya Yojana (PMJAY).
    • Viability Gap Funding window proposed for setting up hospitals in the PPP mode.
    • Aspirational Districts with no Ayushman empanelled hospitals to be covered in the first phase.
    • Targeting diseases with an appropriately designed preventive regime using Machine Learning and AI.
  • Jan Aushadhi Kendra Scheme to offer 2000 medicines and 300 surgicals in all districts by 2024.
  • TB Harega Desh Jeetega campaign launched – commitment to end Tuberculosis by 2025.
  • Rs. 3.60 lakh crore approved for Jal Jeevan Mission:
    • Rs. 11,500 crore for the year 2020-21.
    • Augmenting local water sources, recharging existing sources, and promoting water harvesting and de-salination.
    • Cities with million-plus population to be encouraged to achieve the objective during the current year itself.
  • Rs.12, 300 crore allocation for Swachh Bharat Mission in 2020-21:
    • Committment to ODF-Plus in order to sustain ODF behaviour.
    • Emphasis on liquid and grey water management.
    • Focus also on Solid-waste collection, source segregation, and processing.

Education and Skills

  • Rs. 99,300 crore for education sector and Rs. 3000 crore for skill development in 2020-21.
  • New Education Policy to be announced soon.
  • National Police University and National Forensic Science University proposedfor policing science, forensic science, and cyber-forensics.
  • Degree level full-fledged online education program by Top-100 institutions in the National Institutional Ranking Framework.
  • Up to 1-year internship to fresh engineers to be provided by Urban Local Bodies.
  • Budget proposes to attach a medical college to an existing district hospital in PPP mode.
  • Special bridge courses to be designed by the Ministries of Health, and Skill Development:
    • To fulfill the demand for teachers, nurses, para-medical staff and care-givers abroad.
    • To bring in equivalence in the skill sets of the workforce and employers’ standards.
  • 150 higher educational institutions to start apprenticeship embedded degree/diploma courses by March 2021.
  • External Commercial Borrowings and FDI to be enabled for education sector.
  • Ind-SAT proposed for Asian and African countries as a part of Study in India program.

Economic Development

Industry, Commerce and Investment

  • Rs. 27,300 crore allocated for 2020-21 for development and promotion of Industry and Commerce.
  • Investment Clearance Cell proposed to be set up:
    • To provide “end to end” facilitation and support.
    • To work through a portal.
  • Five new smart cities proposed to be developed.
  • Scheme to encourage manufacture of mobile phones, electronic equipment and semi-conductor packaging proposed.
  • National Technical Textiles Mission to be set up:
    • With four-year implementation period from 2020-21 to 2023-24.
    • At an estimated outlay of Rs 1480 crore.
    • To position India as a global leader in Technical Textiles.
  • New scheme NIRVIK to be launched to achieve higher export credit disbursement, which provides for:
    • Higher insurance coverage
    • Reduction in premium for small exporters
    • Simplified procedure for claim settlements. 
  • Turnover of Government e-Marketplace (GeM) proposed to be taken to Rs 3 lakh crore.
  • Scheme for Revision of duties and taxes on exported products to be launched.
    • Exporters to be digitally refunded duties and taxes levied at the Central, State and local levels, which are otherwise not exempted or refunded.
  • All Ministries to issue quality standard orders as per PM’s vision of “Zero Defect-Zero Effect” manufacturing.

Infrastructure

  • Rs.100 lakh crore to be invested on infrastructure over the next 5 years.
  • National Infrastructure Pipeline:
    • Rs. 103 lakh crore worth projects; launched on 31st December 2019.
    • More than 6500 projects across sectors, to be classified as per their size and stage of development. 
  • A National Logistics Policy to be released soon: 
    • To clarify roles of the Union Government, State Governments and key regulators.
    • A single window e-logistics market to be created
    • Focus to be on generation of employment, skills and making MSMEs competitive.
  • National Skill Development Agency to give special thrust to infrastructure-focused skill development opportunities.
  • Project preparation facility for infrastructure projects proposed.
    • To actively involve young engineers, management graduates and economists from Universities.
  • Infrastructure agencies of the government to involve youth-power in start-ups.
  • Rs.1.7 lakh crore proposed for transport infrastructure in 2020-21.

Highways

  • Accelerated development of highways to be undertaken, including:
    • 2500 Km access control highways.
    • 9000 Km of economic corridors.
    • 2000 Km of coastal and land port roads.
    • 2000 Km of strategic highways.
  • Delhi-Mumbai Expressway and two other packages to be completed by 2023.
  • Chennai-Bengaluru Expressway to be started.
  • Proposed to monetise at least 12 lots of highway bundles of over 6000 Km before 2024.

Indian Railways

  • Five measures:
    • Large solar power capacity to be set up alongside rail tracks, on land owned by railways.
    • Four station re-development projects and operation of 150 passenger trains through PPP.
    • More Tejas type trains to connect iconic tourist destinations.
    • High speed train between Mumbai and Ahmedabad to be actively pursued.
    • 148 km long Bengaluru Suburban transport project at a cost of Rs 18600 crore, to have fares on metro model. Central Government to provide 20% of equity and facilitate external assistance up to 60% of the project cost.
  • Indian Railways’ achievements: 
    • 550 Wi-fi facilities commissioned in as many stations.
    • Zero unmanned crossings.
    • 27000 Km of tracks to be electrified.

Ports & Water-ways:

  • Corporatizing at least one major port and its listing on stock exchanges to be considered.
  • Governance framework keeping with global benchmarks needed for more efficient sea-ports.
  • Economic activity along river banks to be energised as per Prime Minister’s Arth Ganga concept.

Airports

  • 100 more airports to be developed by 2024 to support Udaan scheme.
  • Air fleet number expected to go up from present 600 to 1200 during this time.

Electricity

  • “Smart” metering to be promoted.
  • More measures to reform DISCOMs to be taken.

Power

  • Rs.22, 000 crore proposed for power and renewable energy sector in 2020-21.
  • Expansion of national gas grid from the present 16200 km to 27000 km proposed.
  • Further reforms to facilitate transparent price discovery and ease of transactions.

New Economy

  • To take advantage of new technologies:
    • Policy to enable private sector to build Data Centre parks throughout the country to be brought out soon.  
    • Fibre to the Home (FTTH) connections through Bharatnet to link 100,000 gram panchayats this year.
    • Rs.6000 crore proposed for Bharatnet programme in 2020-21.
  • Measures proposed to benefit Start-ups:
    • A digital platform to be promoted to facilitate seamless application and capture of IPRs.
    • Knowledge Translation Clusters to be set up across different technology sectors including new and emerging areas.
    • For designing, fabrication and validation of proof of concept, and further scaling up Technology Clusters, harbouring test beds and small scale manufacturing facilities to be established.
    • Mapping of India’s genetic landscape- Two new national level Science Schemes to be initiated to create a comprehensive database.
    • Early life funding proposed, including a seed fund to support ideation and development of early stage Start-ups.
  • Rs.8000 crore proposed over five years for National Mission on Quantum Technologies and Applications.

Caring Society

  • Focus on:
    • Women & child,
    • Social Welfare;
    • Culture and Tourism
  • Allocation of Rs. 35,600 crore for nutrition-related programmes proposed for the FY2020-21.
  • Rs.28, 600 crore proposed for women specific programs.
  • Issue about age of a girl entering motherhood – proposed to appoint a task force to present its recommendations in six months’ time.
  • Financial support for wider acceptance of technologies, identified by Ministry of Housing and Urban Affairs to ensure no manual cleaning of sewer systems or septic tanks, to be provided.
  • Rs. 85, 000 crore proposed for 2020-21 for welfare of Scheduled Castes and Other Backward Classes.
  • Rs. 53, 700 crore provided to further development and welfare of Scheduled Tribes.
  • Enhanced allocation of Rs. 9,500 crore provided for 2020-21 for senior citizens and Divyang.

Culture & Tourism

  • Allocation of Rs. 2500 crore for 2020-21 for tourism promotion.
  • Rs.3150 crore proposed for Ministry of Culture for 2020-21.
  • An Indian Institute of Heritage and Conservation under Ministry of Culture proposed; with the status of a deemed University.
  • 5 archaeological sites to be developed as iconic sites with on-site Museums:
    • Rakhigarhi (Haryana)
    • Hastinapur (Uttar Pradesh)
    • Shivsagar (Assam)
    • Dholavira (Gujarat)
    • Adichanallur (Tamil Nadu)
  • Re-curation of the Indian Museum in Kolkata, announced by Prime Minister in January 2020.
  • Museum on Numismatics  and Trade to be located in the historic Old Mint building in Kolkata.
  • 4 more museums from across the country to be taken up for renovation and re-curation.
  • Support for setting up of a Tribal Museum in Ranchi (Jharkhand).
  • Maritime museum to be set up at Lothal- the Harrapan age maritime site near Ahmedabad, by Ministry of Shipping.
  • State governments expected to develop a roadmap for certain identified destinations and formulate financial plans during 2021 against which specified grants to be made available to the States in 2020-21.

Environment & Climate Change

  • Allocation for this purpose to be Rs.4400 crore for 2020-21.
  • Proposed to advise the utilities to close the running old thermal power plants with carbon emission above the pre-set norms.
  • States that are formulating and implementing plans for ensuring cleaner air in cities above one million to be encouraged.
  • PM launched Coalition for Disaster Resilient Infrastructure (CDRI) with Secretariat in Delhi. Second such international initiative after International Solar Alliance.

Governance

  • Clean, corruption-free, policy driven, good in intent and most importantly trusting in faith.
  • Taxpayer Charter to be enshrined in the Statute will bring fairness and efficiency in tax administration.
  • Companies Act to be amended to build into statues, criminal liability for certain acts that are civil in nature.
    • Other laws with such provisions are to be corrected after examination.
  • Major reforms in recruitment to Non-Gazetted posts in Government and Public sector banks:
    • An independent, professional and specialist National Recruitment Agency (NRA) for conducting a computer-based online Common Eligibility Test for recruitment.
    • A test-centre in every district, particularly in the Aspirational Districts.
  • A robust mechanism to be evolved for appointment including direct recruitment to various Tribunals and specialised bodies to attract best talents and professional experts.
  • Contract Act to be strengthened.
  • New National Policy on Official Statistics to:
    • Promote use of latest technologies including AI.
    • Lay down a road-map towards modernised data collection, integrated information portal and timely dissemination of information.
  • A sum of Rs. 100 crore allocated to begin the preparations for G20 presidency to be hosted in India in the year 2022.
  • Development of North East region:
    • Improved flow of funds using online portal by the Government.
    • Greater access to financial assistance of Multilateral and Bilateral funding agencies.
  • Development of Union Territories of J&K and Ladakh:
    • An amount of Rs. 30,757 crore provided for the financial year 2020-21.
    • The Union Territory of Ladakh has been provided with Rs. 5,958.

Financial Sector

  • Reforms accomplished in PSBs :
    • 10 banks consolidated into 4.
    • Rs. 3,50,000 crore capital infused.
  • Governance reforms to be carried out to bring in transparency and greater professionalism in PSBs.
  • Few PSBs to be encouraged to approach the capital market to raise additional capital
  • Deposit Insurance and Credit Guarantee Corporation (DICGC) permitted to increase Deposit Insurance Coverage to Rs. 5 lakh from Rs.1 lakh per depositor.
  • Scheduled Commercial Bank’s health under monitoring through a robust mechanism, keeping depositors’ money safe.
  • Cooperative Banks to be strengthen by amending Banking Regulation Act for:
    • Increasing professionalism.
    • Enabling access to capital.
    • Improving governance and oversight for sound banking through the RBI.
  • NBFCs eligibility limit for debt recovery reduced from:
    • Rs. 500 crore to Rs 100 crore asset size.
    • Rs 1 crore to Rs 50 lakh loan size.
  • Private capital in Banking system:
    • Government to sell its balance holding in IDBI Bank to private, retail and institutional investors through the stock exchange.
  • Easier mobility in jobs:
    • Auto-enrolment in Universal Pension coverage.
    • Inter-operability mechanism to safeguard the accumulated corpus.
  • Pension Fund Regulatory Development Authority of India Act to be amended to:
    • Strengthen regulating role of PFRDAI.
    • Facilitate separation of NPS trust for government employees from PFRDAI.
    • Enable establishment of a Pension Trust by the employees other than Government.
  • Factor Regulation Act 2011 to be amended to:
    • Enable NBFCs to extend invoice financing to the MSMEs through TReDS
  • New scheme to provide subordinate debt for entrepreneurs of MSMEs by the banks
    • Would be counted as quasi-equity.
    • Would be fully guaranteed through the Credit Guarantee Trust for Medium and Small Entrepreneurs (CGTMSE).
    • The corpus of the CGTMSE would accordingly be augmented by the government.
  • Window for MSME’s debt restructuring by RBI to be extended by one year till March 31, 2021.
    • More than five lakh MSMEs have already been benefitted.
  • An app-based invoice financing loans product for MSMEs to be launched.
    • To prevent the problem of delayed payments and consequential cash flows mismatches.
  • Export promotion of MSMEs:
    • For selected sector such as pharmaceuticals, auto components and others.
    • An Rs 1000 crore scheme anchored by EXIM Bank together with SIDBI.
    • Hand holding support for technology upgradations, R&D, business strategy etc.

Financial Market

  • Deepening Bond Market.
    • Certain specified categories of Government securities to be opened fully for non -resident investors also.
    • FPI limit in corporate bonds increased to 15% from 9% of its outstanding stock.
  • New legislation to be formulated for laying down a mechanism for netting of financial contracts.  
    • Scope of credit default swaps to expand.
  • Debt Based Exchange Traded Fund expanded by a new Debt-ETF consisting primarily of Government Securities.
    • To give attractive access to retail investors, pension funds and long-term investors.
  • A Partial Credit Guarantee scheme for the NBFCs formulated post the Union budget 2019-20 to address their liquidity constraints. 
    • New mechanism to be devised to further this.
    • Government support to securities so floated.

Infrastructure Financing

  • Rs.103 lakh crore National Infrastructure Pipeline projects earlier announced.
  • Rs 22,000 crore to cater to the equity support to Infrastructure Finance Companies such as IIFCL and a subsidiary of NIIF.
  • IFSC, GIFT city: full of potential to become a centre of international finance as well as a centre for high end data processing:
    • An International Bullion exchange(s) to be set up as an additional option for trade by global market participants with the approval of regulator.

Disinvestment

  • Government to sell a part of its holding in LIC by way of Initial Public Offer (IPO).

Fiscal Management

  • XV Finance Commission (FC):
    • XV Finance Commission has given its first report for FY2020-21
    • Recommendations accepted in substantial measure
    • Its final report for five years beginning 2021-22 to be submitted during the latter part of the year.
  • GST Compensation Fund:
    • Balances due out of collection of the years 2016-17 and 2017-18 to be transferred to the Fund, in two instalments.
    • Hereinafter, transfers to the fund to be limited only to collection by way of GST compensation cess.
  • Overhaul of Centrally Sponsored Schemes and Central Sector Schemes necessary:
    • To align them with emerging social and economic needs of tomorrow
    • To ensure that scarce public resources are spent optimally
  • On the recent debate over transparency and credibility of projected fiscal numbers, it is assured that procedure adopted is compliant with the FRBM Act.
  • For the FY 2019-20:
    • Revised Estimates of Expenditure: at Rs.26.99 lakh crore
    • Revised Estimates of Receipts: estimated at Rs.19.32 lakh crore.
  • For year 2020-21:
    • Nominal growth of GDP estimated at 10%.
    • Receipts: estimated at Rs.22.46 lakh cr
    • Expenditure: at Rs.30.42 lakh cr.
  • Significant tax reforms for boosting investments recently undertaken. However, expected tax buoyancy expected to take time.
  • Fiscal deficit of 3.8% estimated in RE 2019-20 and 3.5% for BE 2020-21.  It comprises two ingredients;
    • 3.3% for year 2019-20 and 3% for the 2020-21 budget estimate.
    • Deviation of 0.5%, consistent with Section 4(3) of FRBM Act, both for RE 2019-20 and BE 2020-21. (Section 4 (2) of the FRBM Act provides for a trigger mechanism for a deviation from the estimated fiscal deficit on account of structural reforms in the economy with unanticipated fiscal implications.)
    • Return path, committing to fiscal consolidation without compromising needs of investment out of public funds, is laid in Medium Term Fiscal Policy cum Strategy Statement.
    • Market borrowings: Net market borrowings: Rs.4.99 lakh crore for 2019-20 and Rs.5.36 lakh crore for 2020-21.
  • A good part of the borrowings for the financial year 2020-21 to go towards Capital expenditure that has been scaled up by  more than 21%.

Direct Tax

Direct Tax Proposals – To stimulate growth, simplify tax structure, bring ease of compliance, and reduce litigations.

  • Personal Income Tax:
    • Significant relief to middle class taxpayers.
    • New and simplified personal income tax regime proposed:
Taxable Income Slab (Rs.)Existing tax ratesNew tax rates
0-2.5 LakhExemptExempt
2.5-5 Lakh5%5%
5-7.5 Lakh20%10%
7.5-10 Lakh20%15%
10-12.5 Lakh30%20%
12.5-15 Lakh30%25%
Above 15 Lakh30%30%
  • Around 70 of the existing exemptions and deductions (more than 100) to be removed in the new simplified regime.
  • Remaining exemptions and deductions to be reviewed and rationalised in coming years.
  • New tax regime to be optional – an individual may continue to pay tax as per the old regime and avail deductions and exemptions.
  • Measures to pre-fill the income tax return initiated so that an individual who opts for the new regime gets pre-filled income tax returns and would need no assistance from an expert to pay income tax.
  • New regime to entail estimated revenue forgone of Rs. 40,000 crore per year.
  • MSMEs to boost less-cash economy:
    • Turnover threshold for audit increased to Rs. 5 crore from Rs. 1 crore for businesses carrying out less than 5% business transactions in cash.
  • Cooperatives:
    • Parity brought between cooperatives and corporate sector.
    • Option to cooperative societies to be taxed at 22% + 10% surcharge and 4% cess with no exemption/deductions.
    • Cooperative societies exempted from Alternate Minimum Tax (AMT) just like Companies are exempted from the Minimum Alternate Tax (MAT).
  • Tax concession for foreign investments:
    • 100% tax exemption to the interest, dividend and capital gains income on investment made in infrastructure and priority sectors before 31st March, 2024 with a minimum lock-in period of 3 years by the Sovereign Wealth Fund of foreign governments.
  • Affordable housing:
    • Additional deduction up to Rs. 1.5 lakhs for interest paid on loans taken for an affordable house extended till 31st March, 2021.
    • Date of approval of affordable housing projects for availing tax holiday on profits earned by developers extended till 31st March, 2021.

Tax Facilitation Measures

  • Instant PAN to be allotted online through Aadhaar.
  • Vivad Se Vishwas’ scheme,with a deadline of30th June, 2020, to reduce litigations in direct taxes:
    • Waiver of interest and penalty – only disputed taxes to be paid for payments till 31st March, 2020.
    • Additional amount to be paid if availed after 31st March, 2020.
    • Benefits to taxpayers in whose cases appeals are pending at any level.
  • Faceless appeals to be enabled by amending the Income Tax Act.
  • For charity institutions:
    • Pre-filling in return through information of donations furnished by the done.
    • Process of registration to be made completely electronic.
    • Unique registration number (URN) to be issued to all new and existing charity institutions.
    • Provisional registration to be allowed for new charity institutions for three years. 
    • CBDT to adopt a Taxpayers’ Charter.
  • Losses of merged banks:
    • Amendments proposed to the Income-tax Act to ensure that entities benefit from unabsorbed losses and depreciation of the amalgamating entities.

Indirect Tax

  • GST:
    • Cash reward system envisaged to incentivise customers to seek invoice.
    • Simplified return with features like SMS based filing for nil return and improved input tax credit flow to be implemented from 1st April, 2020 as a pilot run.
    • Dynamic QR-code capturing GST parameters proposed for consumer invoices.
    • Electronic invoice to capture critical information in a centralized system to be implemented in a phased manner.
    • Aadhaar based verification of taxpayers being introduced to weed out dummy or non-existent units.  
    • GST rate structure being deliberated to address inverted duty structure.
  • Customs Duties:
    • Customs duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%. 
    • Basic customs duty on imports of news print and light-weight coated paper reduced from 10% to 5%.
    • Customs duty rates revised on electric vehicles and parts of mobiles.
    • 5% health cess to be imposed on the imports of medical devices, except those exempt from BCD.
    • Lower customs duty on certain inputs and raw materials like fuse, chemicals, and plastics.
    • Higher customs duty on certain goods like auto-parts, chemicals, etc. which are also being made domestically. 
  • Trade Policy Measures
    • Customs Act being amended to enable proper checks of imports under FTAs.
    • Rules of Origin requirements to be reviewed for certain sensitive items.
    • Provisions relating to safeguard duties to be strengthened to enable regulating such surge in imports in a systematic way. 
    • Provisions for checking dumping of goods and imports of subsidized goods being strengthened.
    • Suggestions for reviews of exemptions from customs duty to be crowd-sourced.
  • Excise duty proposed to be raised on Cigarettes and other tobacco products, no change made in the duty rates of bidis.
  • Anti-dumping duty on PTA abolished to benefit the textile sector.

Unprecedented Milestones and Achievements of Indian Economy

  • India now the fifth largest economy of the world.
  • 7.4% average growth clocked during 2014-19 with inflation averaging around 4.5%.
  • 271 million people raised out of poverty during 2006-16.
  • India’s Foreign Direct Investment elevated to US$ 284 billion during 2014-19 from US$ 190 billion during 2009-14.
  • Central Government debt reduced to 48.7% of GDP (March 2019) from 52.2% (March 2014).
  • Two cross-cutting developments:
    • Proliferation of technologies (Analytics, Machine Learning, robotics, Bio-informatics and Artificial Intelligence).
    • Highest ever number of people in the productive age group (15-65 years) in India.
  • GST removed many bottlenecks in the system.

Future Aim for sustaining India’s unique global leadership, driven by Digital Revolution

  • Seamless delivery of services through Digital Governance.
  • Improvement in physical quality of life through National Infrastructure Pipeline.
  • Risk mitigation through Disaster Resilience.
  • Social security through Pension and Insurance penetration.
error: DMCA Protected © iassquad.in