Pr

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msSpeci
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CURRENT
AFFAIRS
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Sep
16-Feb
17)
Modul
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ECONOMY
 Index
Sr. no. Topic Page no.

1. 24x7 Power for All 8

2. 100% FDI in White Label ATM operations 8

3. Agricultural Marketing and Farmer Friendly Reforms Index 8

4. Amendments to Plantation Labour Act 9

5. Asia-Pacific Trade and Investment Report 9

6. Banking Cash Transaction Tax 10

7. Blockchain technology 10

8. Cabinet approves setting up of Indias first Medipark 11

9. CBDT signs Advance Pricing Agreements 11

10. CBDT to use data from Project Insight to widen tax base 12

11. Chit Fund scam 12

12. City Wealth Index 12

13. Coal Mitra portal 13

14. Credit Enhancement Guarantee fund 13

15. Defence Innovation Fund 13

16. Demonetization 14

17. Defence Innovation Fund 14

18. Direct Benefit Transfer in Fertilizer Sector 14

19. Direct Selling guidelines framework 15

20. Draft National Electricity Plan (generation) 16

21. Draft National Policy on Software Products 17

22. Draft National Steel Policy (NSP), 2017 17

23. Draft policy to build suburban tracks 18

24. Ease of doing business rankings among states 18

25. Ease of doing business rankings 18

26. Ease of living index 18

27. Economic Freedom Index 19

28. E-laabh 19

29. e-NAM 20

30. Energy Savings Certificates 20

31. E-Nivaran 21

32. Fifth Annual Employment- Unemployment Survey 21

33. Finance Act 2017 Introduces Amendments In IT Act 22

Enabling Searches Without Disclosing Reasons To Believe
34. Finance Ministry sets up a panel to consolidate the 22
regulation of pension products
35. Financial Data Management Centre 23

36. FIPB to be abolished 23

37. GARV-II App 24

38. Global competitiveness Index 25

39. Global Innovation Index 25

40. Global Investment Agreement 25

41. Global Microscope Report 2016 26

42. Government announces enhanced support under 26

Merchandise Exports from India Scheme (MEIS)
43. Government approves strategic sale in PSUs 27

44. Government collects thousands of crores under disclosure 27

window of IDS
45. Government constitutes Insolvency And Bankruptcy Board 28

46. Government makes Aadhaar mandatory for food subsidy 28

47. Govt proposes Payments Regulatory Board in RBI 29

48. Govt says that service charge is optional 29

49. Green Bonds 30

50. GST Rate structure 30

51. Harmonized Master List of infrastructure subsectors 31

52. IMF Adds Chinese Renminbi to Special Drawing Rights 31

Basket
53. Inclusive Development Index 2017 32

54. India Innovation Index 33

55. India Responsible Business Index 33

56. Indias Current account surplus 34

57. Indias first International Exchange 34

58. Indias model Bilateral Investment Treaty 34

59. Indian Bridge Management System 35

60. Indian Enterprise Development Service 35

61. Intellectual Property Rights (IPRs) 36

62. Jharkhand becomes the first state to implement DBT for 37
kerosene
63. Logistics Efficiency Enhancement Programme 38

64. Long term Irrigation Fund 38

65. World manufacturing production report 39

66. World Logistics Performance Index 39

67. World Employment and Social Outlook 2016 Report 39

68. World bank approves loan for Eastern Dedicated Freight 40

Corridor
69. VittiyaSakshartaAbhiyan 40

70. Urja Ganga Project 41

71. Urban bias in Micro Finance Institutions 41

72. Union government provides financial assistance to states 42

for projects under AIBP
73. UdeDeshKaAamNaagrik (UDAN) scheme 42

74. Trade receivables Discounting System (TReDS) 43

75. Trade Facilitation Agreement (TFA) 43

76. Termination of Bilateral Investment Treaties (BITs) 44

77. Tax holiday for Coastal Economic Zones 44

78. TAMRA portal 45

79. Study finds lacunae in implementation of Aadhar card 45

based PDS
80. Small traders to be exempted from GST 46

81. Small finance banks 47

82. SEBI to tighten algorithmic trading rules 47

83. SEBI relaxes rules for Angel Investors 48

84. SEBI allows Options trading in farm produce 49

85. Revised Double Taxation Avoidance Agreement (DTAA) 50

with Cyprus
86. Revenue Insurance Scheme for plantation crops 50

87. Reliance ties up with Dassault to execute Rafale offsets 51

88. Regional Comprehensive Economic Partnership (RCEP) 51

89. Reforms proposed for Budget 2017-18 52

90. Lucky Grahak Yojana and Digi Dhan Vyapar Yojana 53

91. Market Economy Status to China 54

92. Market Stabilization Scheme bonds 54

93. Mata Prasad committee 55

94. Merchant Shipping Bill 2016 55

95. Mining Surveillance System 56

96. ADB approves funds for Indias first Coastal Industrial 56

Corridor
97. Municipalities to issue smart city bonds 56

98. RBI's Financial Stability Report 57

99. RBI overhauls debt restructuring schemes 58

100. Ratan Watal panel 58

101. Railways first non-fare revenue policy 59

102. Railways India Development Fund 59

103. Railways India Development Fund 59

104. Railway introduces flexi-fare method for booking tickets 59

105. Pusa Arhar 16 60

106. National Transit Oriented Development Policy (TOD) 60

107. OPEC cuts output 61

108. Niryat Bandhu Scheme 61

109. National Apprenticeship Promotion Scheme 61

110. Pulses in news 62

111. Public Financial Management System 62

112. Penny stocks may come under long-term capital gains tax 63
net
113. NK Singh panel submits its report 63

114. OPEC cuts output 64

115. National Food Security Act implemented in the entire 64

country
116. NHAI plans a new funding route 64

117. Non-Performing Assets (NPA) and Bad Banks 64

118. Payment of Wages (Amendment) Bill, 2016 66

119. PradhanMantri Gram Sadak Yojana (PMGSY) 67

120. Project Saksham 67

121. Public Sector Asset Rehabilitation Agency (PARA) 68

122. Public Debt Management cell 68

123. Permanent Residency Status to Foreign Investors 69

124. NPPA caps coronary stent prices 69

125. NIIF to manage green energy fund 71

126. Problem of excess steel capacity 71

127. Place of Effective Management (PoEM) 72

 24x7 Power for All with the minimum capitalization
norms for foreign investment in
NBFC activities.
The Ministry of Power, Government of India
signed the 24x7 Power ForAll (PFA)
Types of ATMs-
roadmap document with the state of Tamil
Nadu. White label ATMs-
o White Label ATMs are those
About PFA- ATMs which set up, owned and
operated by non-bank
24x7 PFA program is aimed
entitiesincorporated under
at providing access to reliable and
Companies Act 1956.
quality power supply to all
citizens/ establishments by 2019. Brown label ATMs-
o Brown label ATMs are owned
PFA is a Joint Initiative of
and maintained by service
Government of India (GoI) and State
provider whereas bank whose
Governments with the objective to
brand is used on ATM takes care
make 24x7 power available to all
of cash management and
households.
network connectivity.
The Program has been instrumental
in mainstreaming the Ministrys Green label ATMs-
o These ATMs are provided
focus on energy efficiency and
specifically for Agricultural
Demand Side Management
transactions.
interventions and has resulted in
increased participation with speedy Orange Label ATMs-
rollout of UJALA and other LED o ATMsprovided for Share
schemes. Transactions.
The PFA Program has also benefited Yellow Label ATMs-
several states in addressing o ATMs provided for E-commerce
funding gap for the investments Pink label ATM-
required to ensure 24x7 power o ATM provided for women
access to all. The funding gap banking
analysis conducted as part of the
exercise enabled the Ministry to
assist states through innovative Agricultural Marketing and Farmer
means of financing. Friendly Reforms Index

100% FDI in White Label ATM NITI Aayog launches the first ever
operations agricultural marketing & farm friendly
reforms Index.
Government has allowed Foreign
Investment upto 100% in White Label ATM About the Index-
(WLA) operations, subject to the following The index ranks states based on
conditions:- the initiatives taken by them in
Any non-bank entity intending to implementing farm sector reforms.
set up WLA should have minimum To address the issue of low levels of
net worth of Rs. 100 crore as per productivity, growth and incomes
latest financial years audited ailing the farm sector, NITI Aayog
balance sheet, which is to be has identified three key areas for
maintained at all times. reform:
In case the entity is also engaged in o Agricultural market reforms
any other 18 Non-Banking Finance o Land lease reforms
Company (NBFC) activities, then the o Reforms related to forestry on
foreign investment in the company private land felling and transit
setting up WLA, shall also comply of trees.
 Agricultural marketing reforms
include implementation of seven
provisions proposed under model
APMC Act, joining eNAM initiative,
special treatment to fruits and
vegetables for marketing and level of
taxes in mandis.
The second area of reforms
included in the index is relaxation in
restrictions related to lease in and
lease out agricultural land and
change in law to recognise tenant
and safeguard land owners
liberalisation.
The third area included in the
index represent freedom given to
farmers for felling and transit of
trees grown on private land.
The state of Maharashtra achieved
first rank followed by
Gujarat.Puducherry was ranked
last.
Amendments to Plantation Labour Act
The Centre is planning to amend the
Plantation Labour Act (PLA), 1951 in a
major way to exclude in kind components
being regarded as wages.
Additional information-
Under the PLA 1951, plantation
workers get various benefits either
subsidised or free. These include
rations, housing, education,
firewood and medical facilities.
A large section of the mainstream
tea industry bears the cost of
providing these services. The
industry does not pay statutory
minimum wages, saying that the
monetized value of the facilities
provided compensates for this.
The proposed amendment is now
seeking to exclude from the
definition of wage the in-kind
benefits that were being hitherto
included.
The Central and State governments
rolled out a clutch of social sector
schemes which can be implemented
in the tea estates. The Centre now
wants the plantation industry to
share this cost with the government
under the amended PLA.
A 2009 Report of a Committee on
the Cost Competitiveness of India
Tea Industry had pointed out that
the PLA had added to production
costs and lowered competitiveness.
Asia-Pacific Trade and Investment
Report
The United Nations Economic and Social
Commission for Asia and the Pacific
(ESCAP) recently released Asia-Pacific
Trade and Investment Report 2016 (APTIR).
Additional information-
The Asia-Pacific Trade and
Investment Report (APTIR) is an
annual publication prepared by
the Trade, Investment and
Innovation Division of the United
Nations Economic and Social
Commission for Asia and the
Pacific.
It provides information on and
independent analyses of trends and
developments in: (a) intra- and
inter-regional trade in goods and
services; (b) foreign direct
investment; (c) trade facilitation
measures; (d) trade policy measures;
and (e) preferential trade policies
and agreements.
The report said that Asia-Pacific
trade flows were wavering amid
sluggish global economic and trade
growth, downward movement of
world commodity prices and an
uncertain policy environment.
It added that international and
intra-regional trade costs of India
remained higher compared with the
trade costs of best-performing
economies in Asia and the Pacific.
About ESCAP-
United Nations Economic and Social
Commission for Asia and the Pacific
is one of the five regional
commissions of the United Nations
Economic and Social Council.
 It was established in 1947to
encourage economic cooperation
among its member states.
ESCAP's regional focus is managing
globalization through programs in
environmentally sustainable
development, trade, and human
rights.
Its headquartered in Bangkok (Thailand).
Banking Cash Transaction Tax
The committee of chief ministers on digital
payments recommended the on Tuesday
government to levy banking cash
transaction Tax (BCTT) on transactions of
Rs 50,000 and above to curb use of cash
for large transactions.
About BCTT-
BCCT was introduced with effect The
from June 1, 2005, to track
unaccounted money and trace its
source and destination. It was
withdrawn with effect from April 1,
2009.
BCCT was a tax of 0.1% on cash
withdrawals of more than Rs.
50,000 (for individuals) and Rs. One
lakh for others, in a single day, from
non-savings bank accounts
maintained with any scheduled
bank.
This tax was applicable only on cash
and not on payment by cheques.
BCCT is different from Banking
Transaction Tax (BTT) which was
suggested by the Pune based think
tank, to replace all existing taxes. It
included charging 2-4% of
transaction tax on every form of
transaction including electronic and
cheque payments.
Recommendations of Chief Ministers
committee on Digital Payments-
The committee recommended giving
tax incentives and subsidies to
boost digital transactions, but also
levy a banking cash transaction tax
on cash transactions of Rs 50,000
and above.
It also recommended abolition of
merchant discount rate (MDR) to
make digital payments cheaper than
cash.
The committee also asked the
Centre to promote Aadhaar Enabled
Payment System (AEPS) by
incentivising and not charging MDR.
The panel also suggested that there
should be no retrospective taxation
on merchants doing digital
transactions.
The other recommendations include
tax incentives for micro ATMs,
biometric sensors etc. and tax
refund for consumers using digital
payment up to a certain proportion
of annual income.
Blockchain technology
Reserve Bank of India has
successfully tested blockchain
technology for trade application. The
evaluation was carried out in partnership
with MonetaGo, domestic banks and other
financial institutions.
Additional information-
The RBI's arm, Institute for
Development and Research in
Banking Technology (IDRBT),
conducted the project using the
technology behind Bitcoin in a trade
application with banks and the
National Payments Corporation of
India (NPCI) participating too.
Following the project, IDRBT last
week released a white paper titled,
'Applications of blockchain
technology to banking and
financial sector in India'.
Blockchain is a public ledger that
enables historical recording of all
transactions that has occurred in a
network in a way that it cannot be
altered.
The system works like a
shared Google spreadsheet, but
much more potent and secure. So,
each transaction gets recorded on
the spreadsheet for all in the system
to see, but one can only make
 changes once all parties agree to country, envisaged to boost the
augmenting it. local manufacturing of hi-end
The technology can help banks products at a significantly lower
automate inter-organisation cost, resulting in affordable
processes, significantly improve healthcare delivery.
transparency and reset existing It would contribute to the
operational benchmarks. development of medical devices and
While blockchain eliminates the technology sector and allied
need for a central regulator in disciplines in the countrybesides
case of banking, it also allows smart generating employment.
contracts to be enforced so that
banks can keep track of shipments CBDT signs Advance Pricing
and disburse loans accordingly. Agreements
In India, ICICI bank and Yes Bank
have already executed pilot projects Central Board of Direct Taxes has entered
to validate these propositions. into multiple Advance Pricing
Agreements over the course of the entire
Bit-Coin- month.
Bitcoin is a cryptocurrency and
an electronic payment system. Additional information-
Bitcoin is open-source; its design is The total number of APAs entered
public, nobody owns or controls into by the CBDT has
Bitcoin. reached 140. This includes 10
The system is peer-to-peer, and Bilateral APAs and 130 Unilateral
transactions take place between APAs.
users directly, without an The APAs pertain to various sectors
intermediary. of the economy like Telecom,
These transactions are verified by Pharmaceutical, Banking & Finance,
network nodes and recorded in a Steel, Retail, Information
public distributed ledger called the Technology, etc.
blockchain, which uses bitcoin as A transfer price is the price at which
its unit of account. divisions of a company transact with
Since the system works without a central each other. Transfer prices are used
repository or single administrator, bitcoin is when individual entities of a larger
called the first decentralized digital multi-entity firm are treated and
currency. measured as separately run entities.

Cabinet approves setting up of Indias Advance Pricing Agreements (APAs)-

An APA is an ahead-of-time
first Medipark agreement between a taxpayer and a
tax authority on an
The Union Cabinet here on Wednesday
appropriate transfer
approved "mini Ratna" public sector
pricing methodology (TPM) for a set
undertaking HLL Lifecare to sub-lease its
of transactions at issue over a fixed
land on the outskirts of Chennai,for
period of time.
setting up the country's first medical
APAs are of three types:
devices manufacturing park.
o Unilateral: This type of APA
involves only the taxpayer and
Additional information-
his/her countrys tax authority.
The shareholding of HLL in the
o Bilateral: It is signed between
project would be above 50 per cent.
taxpayer, tax authority of host
The Medipark project will be the country and the foreign tax
first manufacturing cluster in the authority.
medical technology sector in the
 o Multilateral APA: It is signed
between taxpayers, tax authority
of host country and more than
one foreign tax authorities.
The APA Scheme was introduced in
the Income-tax Act in 2012 and the
Rollback provisions were
introduced in 2014.
The scheme endeavours to provide
certainty to taxpayers in the domain
of transfer pricing by specifying the
methods of pricing and setting the
prices of international transactions
in advance.
CBDT to use data from Project Insight
to widen tax base
Chairperson of the Central Board of Direct
Taxes (CBDT) has said that the department
will use various data sets mined through
Project Insight to widen the tax base by
detecting undisclosed income
About Project Insight-
Project Insight is an initiative of
the finance ministry to widen the
tax base by detecting tax evaders
using technology.
'Project Insight' will be implemented
in phased manner during the period
2016-2018.
The project has been initiated for
data mining, collection, collation
and processing of information for
effective risk management with a
view to widening and deepening tax
base.
The City Wealth Index released by
It will also set up a streamlined data
international property consultants Knight
exchange mechanism for other
and Frank in their annual wealth report
government departments
ranks Mumbai at 21, ahead of megapolises
like Toronto, Washington DC and Moscow.
Chit Fund scam
About the Index-
CBI arrested two Member of Parliaments as
part of its probe into the Rose Valley chit
fund scandal.
Prelims related facts-
A Chit fund is a kind of savings
scheme. A chit fund company is a
company that manages, conducts,
or supervises such a chit fund, as
defined in Section of the Chit Funds
Act, 1982.
Such schemes can be conducted by
organised financial institutions or
may be unorganised schemes
between friends and/or relatives.
Chit funds in India are governed by
various state or central laws.
Direct selling is
the marketing and selling of
products directly to consumers
away from a fixed retail location.
In multi-level marketing (MLM), an
employee earns not just by Direct
Selling but also by recruiting more
people to work under him (for the
company), by the way of
commissions. Some companies also
pay the employee an additional
amount based on the sales of the
distributor he has brought into the
business.
A pyramid scheme is a form of
investment (illegal in many
countries including India) in which
each paying participant recruits two
further participants, with returns
being given to early participants
using money contributed by later
ones.With a pyramid scheme no
product or service of inherent value
is being exchanged for money.
City Wealth Index
The City Wealth Index maps the
lifestyle and investment decisions
made by the super rich i.e. Ultra
High Net Worth Individuals
(UHNWI).
The kind of decisions by UNHWIs
that go into the preparation of this
study include property prices paid,
 capacity to buy sports teams,
private jets and, among other
collectibles, art, wines etc.
There is enough evidence to show
that this kind of consumption is
increasing and fairly rapidly, led, of
course, by the exorbitant rise in real
estate prices
UHNWIs are those with net assets
worth over $ 30 million (roughly Rs
200 crore).
The number of UHNWIs in India has
increased by 290% during the last
decade.
Coal Mitra portal
Union Ministry for Power, Coal, New &
Renewable Energy and Mines,
launched Coal Mitra.
About the portal-
The Coal Mitra Web Portal has been
designed to bring about flexibility in
Utilization of Domestic Coal by
transferring the reserves to more
cost efficient State/Centre owned or
Private sector generating stations,
leading to lower generation costs
and ultimately lesser cost of
electricity for the consumers.
The web portal would be used by
the State/Central Gencos to display
information about normative fixed
and variable charges of
electricity for the previous month as
well as margin available for
additional generation, so as to
enable the utilities identify stations
for transfer of coal.
It would host data on Operational
and Financial parameters of each
coal based station; Quantity and
source of supply coal to the power
plant; and Distance of Power plant
form the Coal mine.
Credit Enhancement Guarantee fund
India Infrastructure Finance Co. Ltd (IIFCL)
has been chosen as the lead promoter of
the Credit Enhancement Guarantee fund.
About the Fund-
The fund was proposed in Union
Budget 2016.
The credit enhancement fund will be
floated by a non-banking financial
company (NBFC) with IIFLC holding
at least 26% stake. Life Insurance
Corp. of India will hold up to a 15%
stake.
A credit enhancement fund provides
an additional source of assurance or
guarantee that the borrower will
service their loan.
It can also help borrowers raise
loans at reduced interest rates.
It would provide a boost to the
infrastructure sector.
With a seed capital of Rs1,500crore,
the fund may be able to provide
guarantees for up to Rs40,000 crore
worth of infrastructure projects.
Further details of the fund would be
announced later.
Defence Innovation Fund
Bharat Electronics Ltd (BEL)-Hindustan
Aeronautics Ltd (HAL) plans to set up 100-
crore defence innovation fund.
About the fund-
The main objective of the fund is to
promote start-ups in the defence
sector.
When this is set up, the defence
PSUs will also be encouraged to take
up greater outsourcing from the
private sector besides vendor
development.
It will be a 50:50 joint organisation
under Section 8 of the Companies
Act.
HAL-BEL plans to set up the
organisation with a focus on
identifying and developing
innovative products for the defence
sector.
The company or organisation will be
aided and advised by a knowledge
partner to handhold BEL-HAL in
identifying start-ups or innovation
that suits the countrys defence
 needs. The knowledge partner will
be working along on honorary basis.
Demonetization
On 8 November 2016, the Government of
India announced the demonetisation of all
500 and 1,000 banknotes.
Additional information-
The official reason given was to
curtail the shadow economy and
crack down on the use of illicit and
counterfeit cash to fund illegal
activity and terrorism.
The Reserve Bank of India
stipulated a window of fifty days
until 30 December 2016 to deposit
the demonetised banknotes as credit
in bank accounts. The banknotes
could also be exchanged over the
counter of bank branches upto a
limit.
Specified Bank Notes (Cessation of
Liabilities) Act, 2017-
Specified Bank Notes Cessation of
Liabilities Ordinance, 2016 was
promulgated in December 2016 and
was later made into a law.
The law makes possession of more
than 10 pieces of the old notes by
individuals and more than 25 pieces
for study, research or numismatics
purpose, a criminal offence,
attracting fine of Rs10,000 or five
times the cash held, whichever is
higher.
It also provides for a minimum fine
Rs 50,000 for a false declaration by
persons who were abroad during the
demonetisation period (9 November-
30 December, 2016) and given time
to deposit such scrapped notes with
RBI till 31 March.
The Act ends the liability of the
Reserve Bank of India and the
government on the demonetised
currency notes.
The law prohibits the holding,
transferring or receiving of scrapped
notes from 31 December, 2016, and
seeks to confer power on the court
of a first class magistrate to impose
the penalty.
Defence Innovation Fund
Bharat Electronics Ltd (BEL)-Hindustan
Aeronautics Ltd (HAL) plans to set up 100-
croredefence innovation fund.
About the fund-
The main objective of the fund is to
promote start-ups in the defence
sector.
When this is set up, the defence
PSUs will also be encouraged to take
up greater outsourcing from the
private sector besides vendor
development.
It will be a 50:50 joint organisation
under Section 8 of the Companies
Act.
HAL-BEL plans to set up the
organisation with a focus on
identifying and developing
innovative products for the defence
sector.
The company or organisation will be
aided and advised by a knowledge
partner to handhold BEL-HAL in
identifying start-ups or innovation
that suits the countrys defence
needs. The knowledge partner will
be working along on honorary basis
Direct Benefit Transfer in Fertilizer
Sector
The Centre plans a dry run of direct benefit
transfer (DBT) in fertilisers in the 14
identified districts from December.
About Direct Benefit Transfer (DBT)-
Direct benefit Transfer scheme was
initiated in 2013.
The primary aim of this Direct
Benefit Transfer program is to bring
transparency and terminate
pilferage from distribution of funds
sponsored by Central Government of
India.
 This program aims to transfer
subsidies directly to the people
through their bank accounts.
The beneficiaries would purchase
the commodity at the market price
and the subsidy would be directly
transferred to their reported bank
accounts.
The DBT program has been
implemented for many schemes like
scholarships, MGNREGA and LPG.
How DBT in Fertilizer is different from
DBT in other fields?
Under the DBT in fertilizer sector,
the subsidy will be released to the
fertilizer companies instead of the
beneficiaries, after the sale is made
by the retailers to the beneficiaries.
As per the government, direct
transfer of subsidy to beneficiaries
like in LPG cannot be introduced in
fertilizer sector as the beneficiaries
and their entitlement is not clearly
defined. Also, because the quantum
of subsidy is fairly large in case of
fertilisers.
Multiple subsidized products, urea
and 21 grades of
Phosphatic&Potassic fertilizers have
different subsidy rates. The subsidy
rate in respect of urea varies from
company to company due to
different production processes,
energy efficiencies of plants etc.
So DBT would be implemented in
the following way:
o As soon as a farmer purchases a
bag of fertiliser, hell have to
identify himself through a point-
of-sale (PoS) device placed with
the retailer. Aadhaar number or
Kisan Credit Cards will be the
basis of identification.
o The farmer will buy fertiliser at a
subsidised rate itself and not at
market price, which is the case
with most such experiments.
o Once the farmer identifies
himself, a recommendation of his
soil condition
and fertiliser requirement will be
generated, which he may or may
not follow.
o Thereafter, the difference between
the market rate and subsidised
amount will be credited into the
bank account of the
manufacturer.
Initially, the subsidy will be paid
weekly and then on a real-time
basis as and when the system
stabilizes.
Direct Selling guidelines framework
Ministry of Consumer Affairs, Food and
Public Distribution released model
guidelines to states on direct selling.
Additional information-
Direct selling is
the marketing and selling of
products directly to consumers
away from a fixed retail location.
In multi-level marketing (MLM), an
employee earns not just by Direct
Selling but also by recruiting more
people to work under him (for the
company), by the way of
commissions. Some companies also
pay the employee an additional
amount based on the sales of the
distributor he has brought into the
business.
A pyramid scheme is a form of
investment (illegal in many
countries including India) in which
each paying participant recruits two
further participants, with returns
being given to early participants
using money contributed by later
ones. With a pyramid scheme no
product or service of inherent value
is being exchanged for money.
About the Guidelines-
The guidelines are advisory and
have to be implemented by the
states.
It is envisaged in the guidelines that
the State Governments will set up a
mechanism to monitor/ supervise
the activities of Direct Sellers and
Direct Selling Entities regarding
compliance of the guidelines
Any direct selling entity conducting
direct selling activities has to submit
an undertaking to the Department
of Consumer Affairs within 90 days,
stating that it is in compliance with
these guidelines.
The guidelines seek to protect
consumers and sales agents and bar
ecommerce platforms from offering
products or services of direct sales
companies without their written
consent.
The guidelines say agreements
between a company in this business
and its agents should comply with
provisions of the Indian Contract
Act, 1872, and agents should not be
asked or induced to buy more
products that what can be expected
to be sold to consumers.
Further, agents should be allowed to
withdraw their participation and get
a refund for goods and services.
Draft National Electricity Plan
(generation)
Central Electricity Authority of India (CEA),
the apex planning body for the power sector
in India, released its draft National
Electricity Plan, 2016 (NEP).
Additional information-
This document primarily highlights
the demand side projections, and
presents a perspective on electricity
supply sources till 2027.
A key highlight of this draft plan is
no coal-based capacity addition is
required to meet the countrys power
demand by 2027as 50,025 MW of
coal capacity (presently under
construction) will suffice for the
overall demand.
It is also expected that the share of
non-fossil (hydro, nuclear, and
renewable energy sources) based
capacity will reach 46.8 percent by
2021-22, and will further increase
to 56.5 percent by the end of 2026-
27.
Central Electricity Authority of India
(CEA)-
The Central Electricity Authority of
India (CEA) is a statutory
organisation constituted under
section 70(1) of the Electricity Act
2003.
The CEA advises the government on
matters relating to the National
Electricity Policy and formulates
short-term and perspective plans for
the development of electricity
systems.
Preparation of technical standards
for construction of electrical plants,
electric lines and connectivity to the
grid is the responsibility of CEA as
per section 73 (b) of the Electricity
Act, 2003
The CEA is also responsible for
concurrence of hydro power
development schemes of central,
state and private sectors taking into
consideration the factors which will
result in efficient development of the
river for power generation.
National Electricity Policy-
The Central Government notifies the
National Electricity Policy in
compliance with section 3 of the
Electricity Act 2003.
The Central Government shall, from
time to time, prepare the National
Electricity Policy and tariff policy, in
consultation with the State
Governments and the Authority for
development of the power system
based on optimal utilization of
resources such as coal, natural gas,
nuclear substances or materials,
 hydro and renewable sources of
energy.
The
Draft National Policy on Software
Products
The government has issued the draft of first
ever National Software Policy.
residents, for domestic software
development.
policy also
suggests establishing 30 dedicated
entrepreneur parks across Tier 2
and Tier 3 cities which will provide
support for technical software and
other infrastructure to develop
software products.

Salient features of the Draft policy-
The policy strives for a tenfold
increase in share of the global
software product market by 2025to
estimated $148 billion.
It aims to create 3.5 million direct
and indirect jobs by 2025.
The draft policy aims to create
conducive environment for creation
of 10,000 technology start-ups to
develop software products that are
globally competitive.
The government aims to leverage the
start-up India initiative under the
proposed policy to ensure ease of
business.
According to the draft policy, the
government has promised that it will
create an enabling framework for
inclusion of Indian software product
in government procurement.
The concerns of the software
industry would be addressed
through an Inter-Ministerial
Coordination Group.
The draft policy has provision to
create a specialised talent pool of
1,000,000 professionals by 2025
conversant with nuances of software
product development that can
support the growth of software
product industry.
The draft suggests allocating a
defined portion of the Rs 100,000
crore ElectronicDevelopment
Fund, with a support of Rs 100
crore by Ministry of Electronics and
Information Technology (MeitY),
under the PPP (public private
partnership) model, for funding
software startups.
Additionally, it intends to set up an
Innovation Fund by the Ministry of
Finance, promoted by Indian
Draft National Steel Policy (NSP), 2017
The Ministry of Steel has prepared the draft
policy named The National Steel Policy
(NSP), 2017 to ensure that the steel sector
follows a sustainable path of development.
About the Draft-
The draft has proposed setting up
greenfield steel plants along Indias
coastline, under the aegis of
Sagarmala project, to tap cheap
imported raw materials such as
coking coal and export the output in
a more cost-effective manner.
The policy envisages to more than
double Indias domestic steel
production capacity to 300 million
tonnes by 2030-31.
It anticipates a requirement of 10
lakh crore of fresh investments to
meet that goal and expects at least
11 lakh new jobs being created in
the process.
It focuses on impediments like high
input costs, availability of raw
materials, import dependency and
financial stress plaguing the sector.
To cut down reliance on expensive
imports of coking coal, the policy
has mooted gas-based steel plants
and technologies such as electric
furnaces to bring down the use of
coking coal in blast furnaces.
According to the policy,public sector
firms in the steel sector should aim
for economies of scale and will be
encouraged to divest their non-core
assets through mergers and
restructuring.
Draft policy to build suburban tracks
Indian railways have come up with a draft
policy to build suburban tracks.
About the Draft-
The policy aims to ease congestion.
Suburban railway projects are
proposed to be implemented and
operated through a special purpose
vehicle (SPV) with equal equity
participation from the respective
state governments and the Railways.
SPVs would be empowered to
propose a surcharge on passengers
for recovering operating losses and
capital costs of such projects.
The policy plans to build exclusive
tracks for suburban services.
According to the draft guidelines,
state governments would set up a
dedicated urban transport fund
through levy of dedicated taxes,
levies, betterment tax, impact fee
etc.
The state governments will be
required to conduct feasibility
studies of the project at their own
cost which will be examined by
zonal Railways.
Ease of doing business rankings among
states
Andhra Pradesh and Telangana jointly
topped the Ease of Doing Business
Reforms Ranking 2015-16, followed by
Gujarat.
Additional information-
The rankings are formulated by the
Department of Industrial Policy and
Promotion (DIPP) and the World
Bank jointly.
The states were ranked on their
implementation of DIPP-proposed
reforms in period between July 2015
and June 2016.
DIPP ranked states on six key
reform areas: single-window
systems, tax reforms, construction
permits, environment and labour
reforms, inspection reforms, and
commercial disputes and paper-less
courts.
For calculating Indias score in Ease
of doing Business rankings on a
global level, World Bank considers
only two Indian cities- Mumbai and
Delhi.
Ease of doing business rankings
India was ranked 130th in Ease of doing
business rankings.
Ease of Doing Business-
The ease of doing business index is
an index created by the World Bank
Group.
Higher rankings (a low numerical
value) indicate better, usually
simpler, regulations for businesses
and stronger protections of property
rights.
A nation's ranking on the index is
based on the average of 10
subindices:
o Starting a business
o Dealing with construction
permits
o Getting electricity
o Registering property
o Getting credit
o Protecting investors
o Paying taxes
o Trading across borders
o Enforcing contracts
o Resolving insolvency
New Zealand ranked 1st in 2017.
Ease of living index
The World Bank Group will soon bring
out an ease of living index that will rank
cities globally.
Additional information-
The index could include categories
on social inclusion, cost of living,
public transport, housing,
education, health, environment-
friendliness etc.
Indian government has criticized the
methodology for Ease of Doing
business ranking of World Bank.
 The rankings survey only two cities
in India- Mumbai and Delhi. This
does not capture the reform
measures being undertaken in
majority of the states.
Economic Freedom Index
India was ranked 128th in Index of
Economic Freedom.
About the Index-
It is an annual guide published by
The Heritage Foundation,
Washington based Think Tank.
The economic freedom of a country
is measured based on
quantitative and qualitative factors,
grouped into four broad categories,
or pillars, of economic freedom:
o Rule of Law (property rights,
government integrity, judicial
effectiveness)
o Government Size (government
spending, tax burden, fiscal
health)
o Regulatory Efficiency (business
freedom, labor freedom,
monetary freedom)
o Open Markets (trade freedom,
investment freedom, financial
freedom)
A countrys overall score is derived
by averaging these twelve economic
freedoms, with equal weight being
given to each.
E-laabh
In an attempt to try paying subsidy in cash
instead of kind to the targeted beneficiaries,
the Animal Husbandry and
Development and Fisheries Department of
Telangana launched a new software, e-
Laabh.
About the Scheme-
e-Laabh scheme would make the
Sunandini scheme an online
process.
A dairy farmer could register their
details, including Aadhaar number
and bank account details, in the
nearby MeeSevacentres or even
through smartphones.
The department would verify the
eligibility and then transfer the
subsidy into the beneficiarys
account.
The farmer could then buy the feed
from any place of his/her choice
from the market by paying cash and
then uploading the bill to the
department.
The online process would give the
a
farmer the freedom to buy quality
feed while the department would
save the cost on the tender process,
12
procuring material, storing it, and
distributing it.
The concept, if successful, would
become a precursor to the Universal
Basic Income scheme
Sunandini Scheme-
The scheme was launched by the
government of Andhra Pradesh (pre
partition) under the Rashtriya Krishi
Vikas Yojana 2013-14
It aims to supply cattle feed, a
mineral rich supplement, for the
healthy growth of a calf into a young
buffalo and improve the milk yield.
Under the scheme, each farmer gets
cattle feed for two calves. The feed
procured from suppliers at 6,000
per unit is supplied for two years by
the department.
The government gives 75% subsidy
to SC, ST farmers and 50% subsidy
to others.
Under the convention process, the
dairy farmers would submit
applications to get registered under
Dairy the scheme, and the department,
based on the requirement, would
invite tenders from suppliers.
Once the feed was procured from
the lowest bidder, the farmer would
go to the designated outlet and take
the stock.

e-NAM
Union Ministry of Agriculture & Farmers
Welfare announced successfully completion
of first phase of e-NAM. The ministry also
launched e-NAM Mobile App.
Additional information-
So far, 417 markets from 13 states
have been integrated with e-National
Agriculture Market (e-NAM). They
are: Andhra Pradesh, Chhattisgarh.
Gujarat , Haryana, Himachal
Pradesh, Jharkhand, Madhya
Pradesh, Rajasthan, Telangana,
Uttar Pradesh, Maharashtra, Odisha
and Uttarakhand.
Agriculture marketing is
administered by the States as per
their agri-marketing regulations.
Under these regulations, the State is
divided into several market areas
(called Mandi), each of which is
administered by a separate
Agricultural Produce Marketing
Committee (APMC) which imposes
its own marketing regulation
(including fees).
This leads to fragmentation of
markets even within a state.
e-National Agriculture Market (e-NAM)-
e-NAM is the electronic trading
platform for the National Agriculture
Market.
It networks the existing APMC
mandis to create a unified national
market for agricultural commodities.
The NAM Portal provides a single
window service for all APMC related
information and services. This
includes commodity arrivals &
prices, buy & sell trade offers etc.
NAM creates a unified market
through online trading platform,
both, at State and National level and
promotes uniformity, streamlining of
procedures across the integrated
markets, removes information
asymmetry between buyers and
sellers and promotes real time price
discovery.
Energy Savings Certificates
Procedure for Transaction of Energy
Saving Certificates has been approved by
the Central Electricity Regulatory
Commission (CERC) under the Perform,
Achieve and Trade (PAT) scheme. The
certificates can now be traded on a
separate market platform.
Central Electricity Regulatory
Commission (CERC)-
CERC is a statutory
body functioning with quasi-
judicial status under sec 76 of
the Electricity Act 2003.
CERC was instituted primarily to
regulate the tariff of Power
Generating companies owned or
controlled by the government of
India, and any other generating
company which has a composite
scheme for power generation and
interstate transmission of energy.
It formulate an efficient tariff setting
mechanism, which ensures speedy
and time bound disposal of tariff
petitions, promotes competition,
economy and efficiency in the
pricing of bulk power and
transmission services and ensures
least cost investments.
It facilitates inter-state trading and
promotes development of power
market.
Perform, Achieve and Trade (PAT)-
Perform, Achieve and Trade (PAT)
scheme is a component under
National Mission for Enhanced
Energy Efficiency (NMEEE).
PAT scheme was launched in 2012.
PAT is a market based mechanism
to enhance cost effectiveness
through certification of excess
energy savings in energy intensive
industries (sectors such as thermal
power generation, cement, fertiliser,
aluminium etc) that can be traded.
The scheme provides the option to
trade any additional certified energy
savings with other designated
 consumers to comply with the The facility can also be used by
Specific Energy Consumption those who do not have a PAN
reduction targets. The Energy number.
Savings Certificates (ESCerts) so
issued will be tradable on special The 'e-nivaran' has been now
trading platforms. connec
In simple terms, energy intensive
industries were given targets for
reducing energy consumption. Over- Fifth Annual Employment-
achievement by a certain Unemployment Survey
commercial unit is converted into
tradable 'Energy Savings Certificate'
Fifth Annual Employment-
at the end of the targeted year,
which it can sell to the ones that Unemployment Survey
couldn't achieve the targets. Fifth Annual Employment-Unemployment
Targets for improvements in energy Survey published by Labour Bureau
efficiency are set under section 14 of estimated the unemployment rate at 5%
the Energy Conservation Act, 2001
in a manner that reflects fuel usage Additional information-
and the economic effort involved.
In rural sector, unemployment rate
was 5.1% whereas in urban sector,
Bureau of Energy Efficiency (BEE)- the unemployment rate was 4.9%
BEE is an agencyunder At the all India level, the female
the Ministry of Power. It was created unemployment rate was estimated
in March 2002 under the provisions to be 8.7 percent, whereas for males
of the nation's 2001 Energy
it was 4 percent.
Conservation Act.
The mission of the Bureau of Energy
Efficiency is to assist in developing About Labour Bureau-
policies and strategies with a thrust Labour Bureau is an attached office
on self-regulation and market of Ministry of Labour and
principles with the primary objective Employment.
of reducing energy intensity of the
It is responsible for the collation,
Indian economy.
collection and publication of
statistics and related information on
E-Nivaran
wages, earnings, productivity,
labour turn-over, etc.
The Central Board of Direct Taxes (CBDT)
It is a storehouse of important
has launched e-nivaran (Electronic
economic indicators like Consumer
Resolution) facility for online redressal of
Price Index Numbers for Industrial,
taxpayers grievances.
Agricultural and Rural Labourers;
wage rate indices and data on
Additional information-
industrial relations.
The 'e-nivaran' module will work on
the lines of the internet-based
Income Tax Returns (ITRs) filing
system and taxpayers can register Finance Act 2017 Introduces
all complaints related to delay in Amendments In IT Act Enabling
refunds, filing of e-returns, PAN Searches Without Disclosing Reasons
issues etc. on it To Believe

Amendments-
The Finance Act 2017 proposes a
vital Amendment in the Income Tax
Act 1961 relating to procedure for
searches under the Act.
The Income Tax Department will not
be required to disclose the reason
for carrying out an I-T raid.
The I-T Department won't need to
justify on what basis an individual
scrutinised and why his financial
assets were evaluated.
An income tax officer or assistant
commissioner, in place of the
principal commissioner, can now
authorize a 'survey'.
Section 132 of the I-T Act was
amended so that anything can be
'provisionally attached'.
Earlier property of a tax evader
could be 'attached' only after court
order after thorough examination of
the evidence collected by the search
officer.Now a search officer who
conducts a survey (raid) has the
authority to 'seize or attach' the
property.
Finance Ministry sets up a panel to
consolidate the regulation of
pension products
The Finance Ministry has set up a high-
level committee to consolidate the
regulation of pension products.
Additional information-
The Pension Fund Regulatory and
Development Authority (PFRDA) was
set up with the intent of regulating
all pension products.
But currently, pension products
floated by insurance companies
come under the purview of the
Insurance Regulatory and
Development Authority (IRDA) while
those sold by mutual funds are
overseen by the SEBI.
Employees Pension Fund
Organization (EPFO) is also outside
the purview of PFRDA.
The committee would have
representatives from all financial
sector regulators SEBI, IRDA, RBI
and PFRDA.
Its mandate will be to look into the
issue of bringing these companies
which are offering pension plans
under different regulators under the
purview of PFRDA.
Pension Fund Regulatory and
Development Authority (PFRDA)-
PFRDA is a pension regulator which
was established by Government of
India on in 2003.
PFRDA was made a statutory body
in 2013 with the passage of Pension
Fund Regulatory and Development
Authority Bill.
According to the PFRDA Act 2013,
the Authority should consist of a
chairperson and not more than six
members, of whom at least three
shall be whole-time members, to be
appointed by the government.
The chairperson and every whole-
time member would hold office for a
term of five years and would be
eligible for reappointment.
The age limit for chairperson is 65
years, while for whole-time members
62 years.
A part-time member should hold
office as such for a term not
exceeding five years from the date
on which he enters upon his office.
PFRDA is the regulator for
the National Pension Scheme (NPS).
PFRDA is responsible for
appointment of various
intermediaries in the system such
as Central Record Keeping Agency
(CRA), Pension Fund Managers,
Custodian, NPS Trustee Bank, etc.
Insurance Regulatory and Development
Authority of India (IRDAI)-
IRDAI is an autonomous, statutory
agency tasked with regulating and
promoting the insurance and re-
insurance industries in India.
It was constituted by the Insurance
Regulatory and Development
Authority Act, 1999.
 Objectives of the IRDA include
promoting competition to enhance
customer satisfaction with increased
consumer choice and lower
premiums while ensuring the
financial security of the insurance
market.
Financial Data Management Centre
A government appointed panel has
suggested setting up a financial data
management centre (FDMC) for managing
the repository of financial regulatory data to
ensure stability in the economy.
Additional information-
The Committee, headed by Ajay
Tyagi (additional secretary in
finance ministry), has submitted its
report and a draft bill titled The
financial data management centre
bill 2016.
The Act will establish a body to take
measures to standardize data from
regulators in consultation with the
regulators, enable financial service
providers to submit data in a
standardised electronic format,
analyse the data and maintain a
financial system database.
The powers of the Financial Data
Management Centre (FDMC) will
include the establishment, operation
and maintenance of the financial
system database along with
collecting financial regulatory data
and providing access to it.
The body will also provide analytical
support to the Financial Stability
and Development Council (FSDC) on
issues relating to financial stability.
The coverage of the FDMC will be
limited to all financial sector
regulators notified by the central
government.
Financial Stability and Development
Council (FSDC)-
The Council is chaired by the Union
Finance Minister and its members
are:
o Governor, Reserve Bank of India;
o Finance Secretary and/or
Secretary, Department of
Economic Affairs;
o Secretary, Department of
Financial Services;
o Chief Economic Adviser,
Ministry of Finance;
o Chairman, Securities and
Exchange Board of India;
o Chairman, Insurance Regulatory
and Development Authority
o Chairman, Pension Fund
Regulatory and Development
Authority.
The Council deals, inter-alia, with
issues relating to financial stability,
financial sector development, inter
regulatory coordination, financial
literacy, financial inclusion and
macro prudential supervision of the
economy including the functioning
of large financial conglomerates.
No funds are separately allocated to
the Council for undertaking its
activities.
FIPB to be abolished
The Foreign Investment Promotion Board
(FIPB), will be abolished in 2017-18,
Finance Minister has announced.
Additional information-
More than 90 per cent of total FDI
inflows are now through the
automatic route.
The FIPB has also put in place e-
filing and online processing of FDI
applications.
The government is yet to announce
the modalities of the new system of
processing applications, which fall
under the approval route.
The government allows 100 per cent
FDI in most sectors. While FDI up to
a certain limit, say 51 per cent or 74
per cent, is permitted through the
automatic route in many sectors, for
 higher FDI it has to be routed
through the FIPB.
In the defence sector, while the
government allows 100 per cent FDI,
it is subject to conditions, such as
the foreign investor providing access
to modern technology.
The single-brand retail sector
continues to be weighed down by
the condition of compulsory
domestic sourcing of 30 per cent of
inputs, which could be relaxed for a
few years if the investor qualifies as
one manufacturing items with
cutting-edge technology.
In multi-brand retail, while the
policy allows 51 per cent FDI, the
government has so far opposed
entertaining any new application in
the area.
FDI is prohibited in lottery,
gambling, atomic energy, and
railway operations.
Although India banned FDI in
tobacco manufacturing in 2010,
foreign tobacco companies are
allowed to invest through technology
collaboration, licensing agreements
and by forming a trading company.
The government is considering a
blanket ban on FDI in tobacco.
Foreign Investment Promotion Board
(FIPB)-
FDI flows in India can be under two
categories automatic route and approval
route.
FIPB is the designated institution
which considers the FDI proposals
that require government approval.
It also grants composite approvals
involving foreign investment/ foreign
technology.
FIPB is located in the Department of
Economic Affairs, Ministry of
Finance and the Finance Minister is
in charge of the FIPB.
The Secretary of Department of
Economic Affairs, Ministry of
Finance will be the Chairperson of
the FIPB.
As per the June 2016 FDI policy
revision, the FIPB can give
recommendations of FDI proposals
below Rs 5000 crore to the Minister
of Finance for consideration.
GARV-II App
Power Ministry will launch a new app,
GARV-II, to provide real time data of all six
lakh villages of the country.
Additional information-
Earlier version of GARV mobile
phone application used to provide
data about rural electrification
regarding 18,452 un-electrified
villages.
The new version GARV-II will
provide real time data for all six lakh
villages in the country.
GARV-II will enable the citizens to
participate in the development work
and can give their input about rural
electrification program.
GARV-II will have a citizen
engagement window 'SAMVAD'to
enhance participation. They can
contribute in the programme by
providing their feedback and
suggestions
Village-wise works sanctioned under
Deen Dayal Upadhyaya Gram Jyoti
Yojana (DDUGJY) have also been
mapped to monitor progress of
works in each village.
The progress on various works will
be updated by the implementing
agencies of the states on day to day
basis.
DeenDayal Upadhyaya Gram Jyoti Yojana
(DDUGJY)-
DDUGJY is a scheme designed to
provide continuous power supply to
rural India.
The scheme replaces the existing
Rajiv Gandhi Grameen Vidyutikaran
Yojana.
It focuses on feeder separation
(rural households & agricultural)
and strengthening of sub-
transmission & distribution
infrastructure including metering at
all levels in rural areas.
This will help in providing round the
clock power to rural households and
 adequate power to agricultural The Global Innovation Index (GII) is
consumers. an annual ranking of countries by
their capacity for, and success in,
Global competitiveness Index innovation.
It is published by Cornell University,
India currently ranks 39th in Global INSEAD, and the World Intellectual
Competitiveness Index
Property Organization, in
About the Index- partnership with other organisations
The Global Competitiveness Report and institutions.
assesses the competitiveness The GII relies on two sub-indices
landscape of economies and the Innovation Input Sub-Index and
provides insight into the drivers of the Innovation Output Sub-Index.
their productivity and prosperity.
Input sub-index is based on five
The report is published annually by
World Economic Forum. pillars- Institutions, Human capital
Since 2004, the Global and research, Infrastructure,
Competitiveness Report ranks Market sophistication, and Business
countries based on the Global sophistication.
Competitiveness Index developed Output sub-index is based on two
by Xavier Sala-i-Martin and Elsa V. pillars: Knowledge and technology
Artadi.
outputs and Creative outputs.
It is made up of over 110 variables,
of which two thirds come from the
Executive Opinion Survey, and one Global Investment Agreement
third comes from publicly available
sources such as the United Nations. India has rejected a proposal by Canada
The variables are organized into and the European Union (EU) to negotiate a
twelve pillars, with each pillar multilateral agreement on investment that
representing an area considered as would include contentious issues such as
an important determinant of allowing multinational companies to drag a
competitiveness. government into arbitration in case of a
dispute.
About World Economic Forum-
The World Economic Forum (WEF) Additional information-
is a Swiss nonprofit foundation, The proposal was made at an
based in Geneva. informal breakfast meeting of trade
It was established in 1971. ministers on the sidelines of the
It is committed to improving the World Economic Forum (WEF) in
state of the world by engaging Davos.
business, political, academic, and Commerce minister of India, present
other leaders of society to shape at the meeting, said India had
global, regional, and industry prepared a model Bilateral
agendas. Investment Treaty (BIT) that would
form the basis of negotiation with
Global Innovation Index countries.

Investor-State Dispute Settlement

India was ranked at 66th position in Global
(ISDS) mechanism-
Innovation Index ISDS is a system through which
individual companies can sue
About the Index- countries for alleged discriminatory
practices.
 The ISDS mechanism has become
contentious as it permits companies
to drag governments to international
arbitration without exhausting the
local remedies and claim huge
amounts as compensation citing
losses they suffered due to reasons,
including policy changes.
About the model BIT-
India had released a model BIT in
December 2015.
It has since given notices of
termination to all its existing
partners in BITs, including
European Union.
The revised model BIT will be used
for re-negotiation of existing BITs
and negotiation of future BITs.
The new model also includes
protection of investment as an
objective of BITs.
It not only defines investments but
also contains a negative list of
investments.
Other features include an
"enterprise" based definition of
investment, non-discriminatory
treatment through due process,
national treatment, etc.
The model BIT also has a refined
Investor State Dispute Settlement
(ISDS) provision requiring investors
to exhaust local remedies before
commencing international
arbitration, and limiting the power
of the tribunal to awarding
monetary compensation alone.
Most of the countries has expressed
concerns over the provisions of the
investment treaty and have shown
no interest in negotiating on its
basis.
Global Microscope Report 2016
India has been ranked 3rd in the 2016
Global Microscope Report
Additional information-
The Global Microscope 2016 report
assesses the regulatory environment
for financial inclusion across 12
indicators and 55 countries.
Peru and Colombia jointly top the
rankings.
It is developed by The Economist
Intelligence Unit with support from
the Multilateral Investment Fund (a
member of the Inter-American
Development Bank Group), the
Center for Financial Inclusion at
Accion and the Metlife Foundation.
Government announces enhanced
support under Merchandise Exports
from India Scheme (MEIS)
Department of Commerce has extended
support to certain new products and
enhanced the rate of incentives for certain
other specified products under the
Merchandise Exports from India Scheme
(MEIS).
About MEIS-
Merchandise Exports from India
Scheme (MEIS) is one of the two
schemes introduced in Foreign
Trade Policy of India 2015-20, as a
part of Exports from India Scheme.
(The other scheme is Service
Exports from India Scheme).
The Government of India has
brought in the Merchandise Exports
Incentive Scheme (MEIS), replacing
five other similar incentive schemes
present in the earlier Foreign Trade
Policy 2009-14.
The scheme provides incentive in
the form of duty credit scrip to the
exporter to compensate for his loss
on payment of duties.
The scrip can be transferred or used
for payment of a number of
duties/taxes including the customs
/ excise duty / service tax.
The incentive is paid as percentage
of the realized value (in free foreign
 exchange) for notified goods going to
notified markets.
To determine the quantity of
incentive, the countries have been
segregated into three groups:
o Group A has Indias traditional
destinations such as the EU
countries and USA.
o Group B has the maximum
number of countries and covers
almost all of Indias major export
destinations globally. Group B
has the highest quantum of
incentive.
o Group C has no incentive at all.
It can be divided into, SAARC,
Australia and New Zealand,
some EU and African countries.
Government approves strategic sale in
PSUs
The Union Cabinet today gave in- principle
approval to Niti Aayog's proposal for
strategic sale in over a dozen public sector
undertakings (PSUs) including those that
are making profits.
Additional information--
The government had in this years
budget set a strategic sale target of
Rs 20,500 crore.
The strategic sale plan had been
prepared by NitiAayog.
The cabinet committee on economic
affairs (CCEA) has allowed for
strategic sales through a two-stage
auction process.
Prelims related facts-
Department of Disinvestment was
formed in 1999.
In 2005, the government formed a
National Investment Fund or NIF, to
which the proceeds of disinvestment
were channeled.
The government has renamed the
Department of Disinvestment as the
Department of Investment and
Public Asset Management (DIPAM).
There are primarily three
approaches to disinvestment (for the
government)-
o Minority stake sale -
A disinvestment in which even
after selling the stakes, the
government retains a majority
stake in the company (greater
than 51%), thus ensuring
managerial control.
o Majority stake sale-
A disinvestment in which the
governmentsells off a majority
stake and retains a minority
stake in the company (less than
50%). Historically, majority
disinvestments have typically
been made to strategic partners,
hence it is also called a Strategic
sale.
o Complete privatisation-
In this type, the government sells
its entire stake to the buyer and
relinquishes any control over the
company.
Government collects thousands of
crores under disclosure window of IDS
Central Board of Direct Taxes (CBDT) had
received total disclosures of Rs. 65,250
crore under the Income Disclosure Scheme,
2016 in the form of cash and other assets.
Income Declaration Scheme (IDS)-
Income declaration scheme,
2016 was an amnesty scheme
introduced by Union government as
a part of the 2016 Union budget to
unearth black money and bring it
back into the system.
It provided an opportunity to all
persons who have not declared
income correctly in earlier years to
come forward and declare such
undisclosed income(s).
Under the Scheme, such income as
declared by the eligible persons,
would be taxed at the rate of 30%
plus a KrishiKalyanCess of 25% on
the taxes payable and a penalty at
the rate of 25% of the taxes payable,
 thereby totalling to 45% of the
income declared under the scheme.
The scheme was in force for a period
of 4 months from 1st June, 2016 to
30th September, 2016 for filing of
declarations and payments towards
taxes, surcharge & penalty.
The scheme guaranteed immunity
from prosecution under the Income
Tax Act, Wealth Tax Act, 1957, and
the Benami Transactions
(Prohibition) Act, 1988 and also
ensured that declarations under it
would not be subjected to any
scrutiny and inquiry.
Government constitutes Insolvency
And Bankruptcy Board
The Centre has constituted a four-member
Insolvency and Bankruptcy Board of India
(IBBI) under the Chairmanship of MS
Sahoo.
Additional information-
The Board has been constituted
under the provisions of Insolvency
and Bankruptcy Code 2016.
The main activity of the board would
be to regulate the functioning of
insolvency professionals, insolvency
professional agencies and
information utilities.
While the Centre has for now set up
the board with four members, going
forward this will be expanded to 10.
Insolvency and Bankruptcy Code 2016-
The Code creates time-bound
processes for insolvency resolution
of companies and
individuals. These processes will be
completed within 180 days.
The resolution processes will be
conducted by licensed insolvency
professionals (IPs). These IPs will be
members of insolvency professional
agencies (IPAs). IPAs will also
furnish performance bonds equal to
the assets of a company under
insolvency resolution.
Information utilities (IUs) will be
established to collect, collate and
disseminate financial information to
facilitate insolvency resolution.
The Insolvency and Bankruptcy
Board of India will be set up to
regulate functioning of IPs, IPAs and
IUs.
The National Company Law Tribunal
(NCLT) will adjudicate insolvency
resolution for companies. The Debt
Recovery Tribunal (DRT) will
adjudicate insolvency resolution for
individuals.
Government makes Aadhaar
mandatory for food subsidy
In a step aimed at better targeting of
subsidies and checking leakages, the
government has made it mandatory to have
an Aadhaar number for availing benefits
under the National Food Security Act
(NFSA).
Additional information-
Aadhaar is a 12-digit unique
identification number issued by the
Indian government to every
individual resident of India. The
Unique Identification Authority of
India (UIDAI) is responsible for
managing and assigning Aadhaar
numbers and Aadhaarcards.
In March, the Aadhaar (Targeted
Delivery of Financial and Other
Subsidies, Benefits and Services)
Bill, 2016 was passed by the
parliament. It is also referred to as
Aadhaar Act
The Act will provide statutory
backing for transfer of subsidies and
benefits to eligible people having
Aadhaar (UID) number.
The National Food Security Act,
2013 is an Act of Parliament which
aims to provide subsidized food
grains to approximately two thirds
of India's population.
Upto 75% of the rural population
and 50% of the urban population
will be covered under this Act.
Under the NFSA, eligible households
come under two well-defined
categories: priority households,
 entitled to 5 kg of foodgrains per
person per month at nominal prices,
and Antyodaya households (the
poorest), entitled to 35 kg per
household per month.
The prices for priority households
were: Rice at 3/kg, wheat at 2/kg
and Coarse grains (millet) at 1/kg.
There is also a provision for food
security allowance to entitled
beneficiaries in case of non-supply
of entitled foodgrains or meals.
Govt. proposes Payments Regulatory
Board in RBI
Finance Minister proposed creation of a six-
member Payments Regulatory Board in the
RBI, headed by its Governor, as part of
bringing about structural reforms in the
payment eco-system.
Additional information-
Necessary amendments are
proposed in the Finance Bill 2017 to
create a Payments Regulatory Board
in the Reserve Bank of India by
replacing the existing Board for
Regulation and Supervision of
Payment and Settlement Systems.
RatanWatal committee had
recommended structural reforms in
the payment eco system, including
amendments to the Payment and
Settlement Systems Act, 2007.
Board for Regulation and Supervision of
Payment and Settlement Systems
The Board for Regulation and
Supervision of Payment and
Settlement Systems (BPSS), a sub-
committee of the Central Board of
the Reserve Bank of India is the
highest policy making body on
payment systems in the country.
The BPSS is empowered for
authorising, prescribing policies and
setting standards for regulating and
supervising all the payment and
settlement systems in the country.
The Department of Payment and
Settlement Systems of the Reserve
Bank of India serves as the
Secretariat to the Board and
executes its directions.
In India, the payment and
settlement systems are regulated by
the Payment and Settlement
Systems Act, 2007 (PSS Act) which
was legislated in December 2007
Govt. says that service charge is
optional
The Department of Consumer Affairs has
announced that the service charges, which
restaurants include in addition to taxes, are
optional.
Additional information-
The Consumer Protection Act, 1986
provides that a trade practice which,
for the purpose of promoting the
sale, use or the supply of any goods
or for the provision of any service,
adopts any unfair method or
deceptive practice, is to be treated
as an unfair trade practice.
A consumer can make a complaint
to the appropriate consumer forum
established under the Act against
unfair method or deceptive practice
Under this provision, making service
charge compulsory is an unfair
trade practice.
So, the Department has said that a
consumer dissatisfied with the
services can have the charge waived
off.
Green Bonds
Green bond issuance so far in 2016 has
reached USD 78 billion (EUR 74.6bn) and
the full-year figure will double that of 2015.
Prelims related facts-
A green bond is like any other
regular bond but with one key
 difference: the money raised by the change finance in the context of
issuer is earmarked towards mobilizing USD 100 billion by 2020.
financing `green' projects, i.e. assets
or business activities that are GST Rate structure
environment-friendly. Such projects
could be in the areas of renewable
A 4-tier GST tax structure of 5, 12, 18 and
energy, clean transportation,
28 per cent was decided by the GST
sustainable water management etc.
Council today.
Green bonds are issued by
multilateral agencies such as the Additional information-
World Bank, corporations,
With a view to keep inflation in
government agencies and
check, a zero tax rate will apply to
municipalities.
50% of the items present in the
consumer price index basket,
Global Environment Facility (GEF)-
including foodgrains such as rice
The Global Environment Facility and wheat.
(GEF) was established in 1992 in
The next tax slab will be 5%,
Rio Earth Summit.
wherein items of mass consumption
GEF is a multilateral agency of 18 like spices, tea and mustard oil will
agencies including United be taxed.
Nations agencies, multilateral
There will be two standard rates of
development banks, national
12% and 18% where a majority of
entities and international NGOs
the items used by the common man
working with 183 countries to
will be taxed.
address the worlds environmental
There will be a higher slab of 28%
issues.
where items currently attracting a
It is a financial mechanism for 5
tax of 27-31% will be taxed.
major international environmental
On demerit and sin goods such as
conventions: the Minamata
aerated drinks, luxury cars, tobacco
Convention on Mercury, the
and pan masala, a cess will be
Stockholm Convention on Persistent
levied by the centre over and above
Organic Pollutants (POPs), the
the 28% slab. The cess will be levied
United Nations Convention on
in such a manner that the final tax
Biological Diversity (UNCBD), the
incidence on such demerit items is
United Nations Convention to
not less than the existing tax rates.
Combat Desertification (UNCCD)
This cess amount, along with the
and the United Nations Framework
proceeds of the clean energy cess,
Convention on Climate Change
will be used to compensate states
(UNFCCC).
for losses arising from GST,
Green Climate Fund (GCF)- This cess will have a sunset clause
of five years.
The Green Climate Fund (GCF) is a
fund within the framework of the The states and the centre are also
UNFCCC founded as a mechanism working on a similar tax structure
to assist developing countries in for services, with most services
adaptation and mitigation practices being taxed at 18% and a few
to counter climate change. The GCF essential services at 12% and 5%
is based in Incheon, South Korea. The tax rate on gold will be decided
It is governed by a Board comprising later.
24 members (with equal numbers
from developed and developing About GST-
country Parties) and is intended to GST is a single, indirect tax on the
be the main fund for global climate supply of goods and services for the
whole nation.
 Features of the tax were
incorporated in the constitution by
the 101st Constitutional Amendment
Act.
It is a tax paid on value addition at
each stage. Credit for input taxes to
be paid at each stage will be
available in subsequent stages of
value addition.
It subsumes many taxes under it,
such as:
o Central taxes: Excise duty,
Service tax, Countervailing duty etc
o State taxes: Value Added Tax,
Entertainment tax, Octroietc
Alcoholic liquor for human
consumption has been kept out of
the purview of GST.
Petroleum and petroleum products
will be subject to GST levy on a later
date.
Both the centre and the state will
levy GST simultaneously across the
value chain.
GST rates to be levied on different
products are decided by the Goods
and Services Tax(GST) Council.
Harmonized Master List of
infrastructure subsectors
Sports infrastructure has recently been
added to Harmonized Master List of infra
subsectors.
About the list-
The list contains all the sectors that
come under Infrastructure sector
in India.
The List was approved in 2012 by
Cabinet Committee on
Infrastructure to harmonize the
existing definitions of infrastructure
sectors.
The Harmonized Master list of
infrastructure sub-sectors consists
of five core sectors. They are:
Transport, Energy, Water and
sanitation, Communication, Social
and commercial infrastructure.
The institutional mechanism to
update the Master List and for
revisiting the sub-sectors outside
the Master List, is a Committee
chaired by Secretary, Department of
Economic Affairs(DEA) with
Secretary, Department of Revenue,
Chief Economic Adviser, and one
representative each of RBI, SEBI,
IRDA, PFRDA and the Secretary of
the concerned Administrative
Ministry/Department, as members.
The Committee will be serviced by
DEA and will make
recommendations to the Finance
Minister for decision.
IMF Adds Chinese Renminbi to Special
Drawing Rights Basket
Effective October 1, the International
Monetary Fund (IMF) is adding the Chinese
renminbi (RMB) to the basket of currencies
that make up the Special Drawing Right, or
SDR.
Additional information-
Along with Yuan, the other
currencies in the basket are: U.S.
dollar, euro, yen, and British pound.
It marks the first time a new
currency has been added since the
euro was added in 1999.
The Renminbis inclusion reflects
the progress made in reforming
Chinas monetary, foreign exchange,
and financial systems, and
acknowledges the advances made in
liberalizing and improving the
infrastructure of its financial
markets.
About Special Drawing Rights (SDR)-
The SDR is an international reserve
asset created by the IMF in 1969 to
supplement its member countries
official reserves.
The SDR is neither a currency, nor a
claim on the IMF. Rather, it is a
potential claim on the freely usable
currencies of IMF members.
Holders of SDRs can obtain these
currencies in exchange for their
SDRs in two ways:
o Through the arrangement of
voluntary exchanges between
members.
 o And by the IMF designating
members with strong external
positions to purchase SDRs from
members with weak external
positions.
In addition to its role as a
supplementary reserve asset, the
SDR serves as the unit of account of
the IMF and some other
international organizations.
The value of SDR is calculated as
the sum of specific amounts of each
basket currency valued in U.S.
dollars, on the basis of exchange
rates quoted at noon each day in the
London market.
There are two main criteria for a
currency to be included in the SDR
basket:
The first is the export criterion,
which requires that the currencies
in the basket be issued by the top
exporters of the world.
The second is the requirement for
currencies in the SDR basket to be
determined by the Fund to be freely
usablethat is, widely used to
make payments for international
transactions and widely traded in
the principal exchange markets.
About IMF-
The IMF was conceived at a UN
conference in Bretton Woods, United
States, in July 1944.
The IMF's primary purpose is to
ensure the stability of the
international monetary systemthe
system of exchange rates and
international payments that enables
countries (and their citizens) to
transact with each other.
It is headquartered in Washington
DC (USA)
The IMF has a Managing Director,
who is head of the staff and
Chairperson of the Executive Board.
The Managing Director is appointed
by the Executive Board for a
renewable term of five years.
Most resources for IMF loans are
provided by member countries,
primarily through their payment of
quotas.
IMF plays a central role in the
management of balance of
payments difficulties and
international financial crises.
Inclusive Development Index 2017
India has been ranked 60thamong 79
developing economies in the Inclusive
Development Index.
About the Index-
The Inclusive Development Index is
based on a set of 12 Key
Performance Indicators that provide
a multidimensional assessment of
living standards.
The index ranks 109 countries
according to their current level of
inclusive development, and also
provides a view on recent
performance over 5 years.
Together, these features allow users
to understand both the state and
direction of inclusive growth around
the world.
Inclusive Growth and Development
Report 2017 said that most
countries are missing important
opportunities to raise economic
growth and reduce inequality at the
same time because the growth
model and measurement tools that
have guided policymakers for
decades require significant
readjustment.
It is released by World Economic
Forum.
India Innovation Index
NITI Aayog, Department of Industrial Policy
& Promotion (DIPP) and Confederation of
Indian Industry (CII) together launched
India Innovation Index.
About the Index-
It will rank states on Innovations
through countrys first online
innovation index portal that will
 capture data on innovation from all
Indian states and regularly update it
in real time.
The India Innovation Index
Framework will be structured based
on the best practices followed in
Global Innovation Index (GII)
indicators and additionally by
adding India-centric parameters
those truly reflect the Indian
innovation ecosystem.
It will be a one-stop data warehouse
and will track progress on each
indicator at the National level and
the State level on real-time basis.
India Innovation Indexwill be jointly
developed by NITI Aayog, DIPP and
CII, in consultation with World
Economic Forum, the World
Intellectual Property Organization,
Cornell University and others with
the objective to rank Indian states
as per their innovation prowess and
provide impetus to them to build
their respective innovation
ecosystems.
Global Innovation Index-
The Global Innovation Index (GII) is
an annual ranking of countries by
their capacity for, and success in,
innovation.
It is published by Cornell University,
INSEAD, and the World Intellectual
Property Organization, in
partnership with other organisations
and institutions.
The GII relies on two sub-indices
the Innovation Input Sub-Index and
the Innovation Output Sub-Index.
Input sub-index is based on five
pillars- Institutions, Human capital
and research, Infrastructure,
Market sophistication, and Business
sophistication.
Output sub-index is based on two
pillars: Knowledge and technology
outputs and Creative outputs.
India currently ranks 66th out of
128 countries on the Global
innovation Index (GII) 2016.
India Responsible Business Index
A collaborative effort of non-profitsOxfam
India, Corporate Responsibility Watch,
Praxis and Partners in Changehas put
together the second edition of India
Responsible Business Index (IRBI), a follow-
up from 2015.
Additional information-
IRBI is an attempt to gauge how
Indian firms are coping with the
interests of various stakeholders.
The index ranks the top 100 BSE-
listed companies on their
performance on five parameters
inclusive supply chain, community
as stakeholders, community
development, employee dignity and
human rights and non-
discrimination at the workplace.
The index states that businesses
need to recognize their role in
creating an environment in which
the rights of workers and other
stake-holders, including
communities throughout the supply
chain are respected.
Another key aspect of responsible
business is for companies to treat
communities as stakeholders. The
coming of corporate social
responsibility (CSR) rules in 2014
has increased awareness and
expenditure by firms on community
development
Oxfam India said that this years
index shows improvement over last
years
Indias Current account surplus
India is likely to post its first current
account surplus in nine years in the latest
quarter
Prelims related facts-
A countrys Balance of Payments
(BoP) account consists of two
components: Current Account and
Capital Account.
Current account refers to an
account which records all the
 transactions relating to export and
import of goods and services and
unilateral transfers during a given
period of time.
Capital account records all those
transactions, between the residents
of a country and the rest of the
world, which cause a change in the
assets or liabilities of the residents
of the country or its government.
Current Account is further divided
into Visible and Invisible trade.
Visible trade consists of import and
export of goods.
Invisible trade consists of: net
services, net investment income and
net transfer payments.
A deficit is when a countrys imports
exceed its exports in value. A
surplus is the opposite of deficit, i.e.
value of exports is more than value
of imports.
A trade deficit means that value of
goods imported is more than value
of goods exported.
The effects of a current account
deficit include: currency
depreciation, inflation, cheaper
exports etc.
For India, a surplus is a negative
sign, as it reflects weak investment
demand (because Indian firms need
to buy capital goods and machinery
from abroad) and subdued exports.
Indias first International Exchange
Prime Minister inaugurated Indias first
international exchange India INX at the
International Financial Service Centre
(IFSC) of GIFT City.
Additional information-
A subsidiary of Bombay Stock
Exchange, India INX is one of the
worlds most advanced technology
platforms with a turn-around-time
of 4 micro seconds which will
operate for 22 hours a day, allowing
international investors and NRIs to
trade from anywhere across the
globe.
INX will trade initially in equity
derivatives, currency derivatives,
commodity derivatives including
index and stocks. It plans to offer
depository receipts and bonds later.
Indias model Bilateral Investment
Treaty
Indias Bilateral Investment Treaty with
Netherlands would expire in September
2016. The government has decided that all
the new (and existing) Bilateral Investment
Treaties (BITs) will be based on the model
BIT.
About the model BIT-
India had released a model BIT in
December 2015.
It has since given notices of
termination to all its existing
partners in BITs, including
European Union.
The revised model BIT will be used
for re-negotiation of existing BITs
and negotiation of future BITs.
The new model also includes
protection of investment as an
objective of BITs.
It not only defines investments but
also contains a negative list of
investments.
Other features include an
"enterprise" based definition of
investment, non-discriminatory
treatment through due process,
national treatment, etc.
The model BIT also has a refined
Investor State Dispute Settlement
(ISDS) provision requiring investors
to exhaust local remedies before
commencing international
arbitration, and limiting the power
of the tribunal to awarding
monetary compensation alone.
Most of the countries has expressed
concerns over the provisions of the
investment treaty and have shown
no interest in negotiating on its
basis.

Indian Bridge Management System
Ministry of Road Transport & Highways and
Shipping launched the Indian Bridge
Management System (IBMS) in New Delhi.
About IBMS-
IBMS is being developed to create an
inventory of all bridges in the
country and rate their structural
condition so that timely repair and
rehabilitation work can be carried
out based on the criticality of the
structure.
During inventory creation each
bridge is assigned a unique
identification number or National
Identity Number based on the state,
RTO zone and whether it is situated
on an National Highway, State
Highway or is a district road.
Then the precise location of the
bridge in terms of latitude-longitude
is collected through GPS and based
on this, the bridge is assigned
a Bridge Location Number.
Thereafter, engineering
characteristics like the design,
materials, type of bridge, its age,
loading, traffic lane etc are collected
and are used to assign a Bridge
Classification Number to the
structure.
These are then used to do a
structural rating of the structure on
a scale of 0 to 9, and each bridge is
assigned a Structural Rating
Number.
In addition to the structural rating,
the bridges are also being
assigned Socio-Economic Bridge
Rating Number which will decide the
importance of the structure in
relation to its contribution to daily
socio-economic activity of the area
in its vicinity.
Based on this inventory IBMS will
analyse data and identify bridges
that need attention. Further
inspection will be carried out
wherever required to improve the
operational availability of the
structure, enhance its life and
prioritize repair work.
IBMS is the largest platform in the
world owned by a single owner, with
database that could exceed 1,50,000
bridge structures.
Indian Enterprise Development
Service
The Union Cabinet has given its approval
for the formation of a new service in the
name of Indian Enterprise Development
Service (IEDS).
Additional information-
The cadre would be created in the
Office of Development Commissioner
(MSME), Ministry of Micro, Small
and Medium Enterprises (MSME).
The service has been created by
absorbing 11 trades, recruitment to
which had been done differently
following different rules.
The creation of the new cadre and
change in structure will not only
strengthen the organization but will
also help to achieve the vision of
Startup India, Stand-up India
and Make in India.
The Indian Enterprise Development
Services, to start with, will have a
cadre strength of 617 officers.
These officers will man 72 field
offices of the Development
Commissioner and the headquarters
in Delhi.
Intellectual Property Rights (IPRs)
About IPRs-
Intellectual property rights are the
rights given to persons over the
creations of their minds. They
usually give the creator an exclusive
right over the use of his/her
creation for a certain period of time.
Intellectual property is divided into
two categories:
 o Industrial Property includes
patents for inventions,
trademarks, industrial designs
and geographical indications.
o Copyright covers literary works
(such as novels, poems and
plays), films, music, artistic
works (e.g., drawings, paintings,
photographs and sculptures)
and architectural design. Rights
related to copyright include
those of performing artists in
their performances, producers of
phonograms in their recordings,
and broadcasters in their radio
and television programs.
A patent is an exclusive right
granted for an invention a product
or process that provides a new way
of doing something, or that offers a
new technical solution to a problem.
A patent provides patent owners
with protection for their inventions.
Protection is granted for a limited
period, generally 20 years.
A trademark is a distinctive sign
that identifies certain goods or
services produced or provided by an
individual or a company.
An industrial design right is an
intellectual property right that
protects the visual design of objects
that are not purely utilitarian. An
industrial design consists of the
creation of a shape, configuration or
composition of pattern or color, or
combination of pattern and color in
three-dimensional form containing
aesthetic value.
A geographical indication is a sign
used on goods that have a specific
geographical origin and possess
qualities or a reputation due to that
place of origin.
Prelims related facts-
TRIPS-
o The Agreement on Trade-Related
Aspects of Intellectual Property
Rights (TRIPS) is an international
legal agreement between all the
member nations of the World
Trade Organization (WTO). It sets
down minimum standards for the
regulation by national
governments of many forms of
intellectual property (IP) as
applied to nationals of other WTO
member nations.
o The three main features of the
Agreement are: Standards,
Enforcement and Dispute
Settlement.
o The obligations under the
Agreement will apply equally to
all Member countries, but
developing countries will have a
longer period to phase them in.
o The TRIPS Agreement is a
minimum standards agreement,
which allows Members to provide
more extensive protection of
intellectual property if they so
wish.
o Every member has to enact laws
to enforce the provisions of
Agreement.
The Patents Act, 1970-
o It is the legislation that governs
patents in India. The Patents Act
has been repeatedly amended:
1999, 2002, 2005 and 2006 to
make it TRIPS-compliant.
o Section 3 of the Patents Act lists
inventions that are not
patentable.
o Section 3(d) of the Indian Patent
Act restricts grant of patent for
"incremental innovations" in
many drugs unless it provides
significant therapeutic
advantages to existing molecules.
Evergreening
o Evergreening is a term commonly
used in pharma patent parlance.
It essentially means filing patents
using a strategy, which can
increase the patent protection
(exclusivity) beyond the normal
term (20 years).
o This is commonly done by aslight
modification of the former
patents description.
Compulsory Licensing-
o Compulsory licensing is when a
government allows someone else
to produce the patented product
or process without the consent of
 the patent owner. It is one of the
flexibilities on patent protection
included in the WTOs agreement
on intellectual property the
TRIPS (Trade-Related Aspects of
Intellectual Property Rights)
Agreement.
o In essence, under a compulsory
license, an individual or company
seeking to use another's
intellectual property can do so
without seeking the rights
holder's consent, and pays the
rights holder a set fee for the
license.
o The TRIPS Agreement does list a
number of conditions for issuing
compulsory licences, in Article
31.
National IPR Policy 2016-
o The National IPR Policy is a vision
document that aims to create and
exploit synergies between all
forms of intellectual property (IP),
concerned statutes and agencies.
o It sets in place an institutional
mechanism for implementation,
monitoring and review.
o It sets in place an institutional
mechanism for implementation,
monitoring and review.
o The Policy lays down the
following seven objectives:
To create public awareness
about the economic, social
and cultural benefits of IPRs
among all sections of society.
To stimulate the generation of
IPRs.
To have strong and effective
IPR laws, which balance the
interests of rights owners with
larger public interest.
To modernize and strengthen
service-oriented IPR
administration.
Get value for IPRs through
commercialization.
To strengthen the
enforcement and adjudicatory
mechanisms for combating
IPR infringements.
To strengthen and expand
human resources, institutions
and capacities for teaching,
training, research and skill
building in IPRs.
Jharkhand becomes the first state to
implement DBT for kerosene
Jharkhand became the first state to
implement DBT for kerosene. The project
was initiated in four selected districts of the
state.
Additional information-
Where the scheme for direct transfer
of subsidy is introduced, the
consumer will pay the non-
subsidized price of kerosene at the
time of purchase. Subsequently, the
amount of subsidy will be directly
transferred to the bank account of
the beneficiary.
To avoid any inconvenience to the
beneficiary during the initial
purchase through payment of non-
subsidized price, an initial amount
of subsidy shall be credited to all
eligible beneficiaries.
As a part of this scheme,
implementing States will be given
fiscal incentives equivalent to 75 %
of subsidy saved in the first two
years, 50 % of subsidy saved in
third year and 25 % of subsidy
saved in 4th year.
About Direct Benefit Transfer (DBT)-
Direct benefit Transfer scheme was
initiated in 2013.
The primary aim of this Direct
Benefit Transfer program is to bring
transparency and terminate
pilferage from distribution of funds
sponsored by Central Government of
India.
This program aims to transfer
subsidies directly to the people
through their bank accounts.
The beneficiaries would purchase
the commodity at the market price
and the subsidy would be directly
transferred to their reported bank
accounts.
 The DBT program has been
implemented for many schemes like
scholarships, MGNREGA and LPG.
Logistics Efficiency Enhancement
Program
About the program-
Logistic Efficiency Enhancement
Program (LEEP) aims to enhance the
freight transportation in India
through improving cost, time,
tracking and transferability of
consignments through
infrastructure, procedural and
Information Technology (IT)
interventions.
It aims to support the `Make in
India initiative through a `Move in
India drive.
The programme has been initiated
under Bharatmala Pariyojana.
A part of the programme is being
funded by World Bank.
About Bharatmala-
Bharatmala is an umbrella
scheme under which many other
schemes, projects and programs are
integrated.
The project is under the Ministry of
Road Transport and Highways.
Bharatmala has four components-
o Development of state roads
along coastal areas or border
areas, including connectivity of
non-major ports.
o Connectivity for backward areas,
religious and tourist places.
o Setubhratam Pariyojana: This is
for the construction of about
1,500 major bridges and 200
ROBs (road over bridges) and
RUBs (road under bridges).
o District headquarters
connectivity scheme for the
development of newly declared
National Highways.
o The program is expected to be
completed by 2022.
Long term Irrigation Fund
Ministry of Water Resources, River
Development and Ganga Rejuvenation and
NABARD signed an agreement to
operationalise the Long Term Irrigation
Fund (LTIF).
About the Fund-
The fund will be instituted in
NABARD as part of Pradhan Mantri
Krishi Sinchayee Yojana (PMKSY).
The Fund, with an initial corpus of
about Rs. 20,000 crore, was
announced in the Union Budget
2016-17.
Corpus would be raised by way of
budgetary resources and market
borrowings.
The Fund will be used to complete
the 99 prioritized irrigation projects
as part of the Pradhan Mantri Krishi
Sinchayee Yojana (PMKSY).
It will also be used to fund fast
tracking of implementation of
incomplete major & medium
irrigation projects.
About NABARD-
National Bank for Agriculture and
Rural Development (NABARD)was
established on the recommendations
of B.Sivaraman Committee.
It was established in 1982 to
implement the National Bank for
Agriculture and Rural Development
Act 1981, hence it is a statutory
body.
Its a paid up capital stood at Rs.
5,000 crore as on 31 March 2016,
out of which 99.6% is held by the
government and 0.4% is held by
RBI.
It serves as an apex financing
agency for the institutions providing
investment and production credit for
promoting the various
developmental activities in rural
areas
It refinances and regulates the
institutions which provide financial
help to the rural economy.
 It does not provide credit directly to railroads, roads, information
individual farmer(s). technology).
o Ease of arranging competitively
World manufacturing production priced shipments.
report o Competence and quality of
logistics services (e.g., transport
According to the latest world operators, customs brokers)
manufacturing report, world o Ability to track and trace
manufacturing output will increase by only
consignments
2.8 % in 2016.
o Timeliness of shipments in
Additional information- reaching destination within the
The report is published by United scheduled or expected delivery
Nations Industrial Development time.
Organization (UNIDO).
The main objective of this report is
to provide an overview of the current
growth trends of the world World Employment and Social Outlook
manufacturing production by 2016 Report
country groups and by major
sectors. International Labour Organisation (ILO)
The report states that recently released its World Employment
manufacturing production is likely and Social Outlook report.
to rise by only 1.3 % in
industrialised countries and by 4.7 Additional information-
% in developing ones. It is the ILOs flagship report on
world of work issues.
World Logistics Performance Index It explores the inter-connected
nature of macroeconomic policies on
the one hand, and employment and
India was ranked at 35th place in 2016 in social outcomes on the other.
World Logistics Performance Index The report World Employment and
Social Outlook: Trends 2016,
About the Index- provides a global overview of recent
The Index is an interactive trends in employment,
unemployment and labour force
benchmarking tool created to help
participation as well as different
countries identify the challenges
dimensions of job quality such as
and opportunities they face in their vulnerable employment and working
performance on trade logistics and poverty.
what they can do to improve their A key finding is that the expansion
performance. of the world economy has been too
It is released by World Bank every weak to close the significant
employment and social gaps that
year.
have emerged since the beginning of
It is the weighted average of the the global crisis in 2008.
country scores on the following six Since 2007, more than 76 million
key dimensions: jobs have been lost and this jobs
o Efficiency of the clearance gap is set to widen further mainly
process by border control due to a continuous decline in the
agencies. labour force in developed countries
and rising unemployment in
o Quality of trade and transport
emerging economies.
related infrastructure (e.g. ports,
 The report predicts that the number
of unemployed in India would
increase to 17.6 million by 2017.
About ILO-
ILO was founded in 1919 and it
became the first specialized agency
of the UN in 1946.
The only tripartite U.N. agency, the
ILO brings together governments,
employers and workers
representatives of 187 member
States, to set labour standards,
develop policies and devise
programmes promoting decent
work for all women and men.
India is among the founding
members of ILO
World bank approves loan for Eastern
Dedicated Freight Corridor
The Government of India and the World
Bank today signed a $650 million
agreement towards the third loan for the
Eastern Dedicated Freight Corridor.
Eastern Dedicated Freight Corridor
(EDFC)-
The Eastern Dedicated Freight
Corridor (EDFC) project is part of
India's Dedicated Freight Corridor
(DFC) programme.
The EDFC project involves the
construction of a 1,839km-long
freight line extending from Ludhiana
to Kolkata.
The main objective of the project is
to meet the growing demand for
freight on the Eastern Corridor,
which starts from Dankuni in West
Bengal, and passes through the
states of Jharkhand, Bihar, Uttar
Pradesh (UP) and Haryana before
finally ending at Ludhiana.
This corridor will also pass
through Dadri (The origin point
of Western Dedicated Freight
Corridor) which will serve as a
junction.
The Indian Government plans to set
up seven integrated manufacturing
clusters along the corridor with an
investment of approximately $1bn.
The Eastern corridor is backed up
by World Bank.
Vittiya Saksharta Abhiyan
The Union Ministry for Human Resource
Development (HRD) have launched Vittiya
Saksharata Abhiyan (VISAKA).
About the program-
The programme has been launched
to spread awareness about the
cashless economic system.
The purpose of the `Vittiya
Saksharta Abhiyan is to actively
engage the youth/ students of
Higher Education Institutions to
encourage and motivate all payers
and payees to use a digitally enabled
cashless economic system for
transfer of funds
Under it, young students and
faculty members will be roped to
encourage and motivate people to
use a digitally enabled cashless
economic system for transfer of
fund.
For active participation of youth and
faculty, HRD Minister also launched
a webpage where students can
register themselves.
Urja Ganga Project
Prime Minister laid the foundation stone of
the highly ambitious gas pipeline project,
Urja Ganga, in Varanasi.
About the project-
The 2,540 km long gas pipeline
project aims to provide piped
cooking gas to residents of Varanasi
within two years and, in another
year after that, cater to millions of
people in states like Bihar,
 Jharkhand, West Bengal and
Odisha.
The government also plans to create
25 industrial clusters in these states
which can utilize the gas as fuel and
generate employment in these areas.
With the Urja Ganga project, 20
lakh households will get Piped
Natural Gas (PNG) connections.
The seven main station cities
include Varanasi, Patna,
Jamshedpur, Kolkata, Ranchi,
Bhubaneswar and Cuttack as the
major beneficiaries of the project.
The project is being implemented by
Gas Authority of India Limited
(GAIL).
Urban bias in Micro Finance
Institutions
As per the latest data, compiled by industry
self-regulatory organization Sa-Dhan, for
the first time in its 25-year history, Indian
MFIs have more urban clients than rural
ones.
Micro Finance Institutions (MFIs)-
A microfinance institution is an
organization that offers financial
services to low income populations.
Various types of institutions offer
microfinance: credit unions,
commercial banks, NGOs (Non-
governmental Organizations),
cooperatives etc. In India , the for-
profit MFIs are referred to as Non-
Banking Financial Company - Micro
Finance Institution (NBFC-MFI).
In India, microfinance institutions
(MFIs) cannot collect deposits, but
sell insurance products, besides
offering small loans that are
typically paid back in weekly or
monthly installments.
Mudra Bank-
Micro Units Development and
Refinance Agency Bank (MUDRA
Bank), is aa public sector financial
institution setup by the Government
of India.
MUDRA was registered as a
Company in March 2015 under the
Companies Act 2013 and as a Non
Banking Finance Institution with
the RBI in April 2015.
The bank would be responsible for
developing and refinancing all
Micro-enterprises sector by
supporting the finance Institutions
which are in the business of lending
to micro / small business entities
engaged in manufacturing, trading
and service activities.
Under the aegis of PradhanMantri
Mudra Yojana (PMMY), MUDRA has
created three products / schemes:
o Shishu : covering loans upto
50,000/-
o Kishor : covering loans above
50,000/- and upto 5
lakh
o Tarun : covering loans above 5
lakh and upto 10
lakh
MUDRA Card is a debit card issued
against the MUDRA loan account,
for working capital portion of the
loan. The borrower can make use of
MUDRA Card in multiple withdrawal
and credit, so as to manage the
working capital limit in a most
efficient manner.
Union government provides financial
assistance to states for projects under
AIBP
Union Ministry for Water Resources, River
Development and Ganga Rejuvenation
released the first installment of Rs. 1500
crore to the states as central assistance for
99 prioritized irrigation projects under
Accelerated Irrigation Benefits Program
(AIBP).
Additional information-
This amount has been released for
50 projects in the states of Gujarat,
Karnataka, Madhya Pradesh,
Maharashtra, Manipur, Odisha,
Punjab, Rajasthan and Telangana.
 These projects will cover all most all
drought prone districts of 18 States
of country and will also go a long
way to contain the incident of
suicide by farmers.
Irrigation is a state subject and
irrigation projects are formulated,
executed and funded by the State
Governments themselves from their
own resources.
The Finance Minister in his budget
speech of 2016 had announced for
creation of dedicated Long Term
Irrigation Fund (LTIF) in NABARD
with an initial corpus of about Rs.
20,000 crore.
Accelerated Irrigation Benefits Program
(AIBP)-
Central Government launched the
AIBP in the year 1996-97 to provide
Central Assistance to
major/medium irrigation projects in
the country, with the objective to
accelerate implementation of such
projects which were beyond
resource capability of the States or
were in advanced stage of
completion.
Priority was given to those projects
which were benefiting Tribal and
Drought Prone Areas.
The loan under the programme is
being provided on the basis that the
concerned state has to share, from
its own resources, part of the
expenditure on project components
selected under AIBP.
As per the revised AIBP Guidelines
from the year 1999-2000 onwards,
the ratio of CLA to States share is
2:1 for General Category States
while for Special Category States, it
is 3:1.
Ude Desh Ka Aam Naagrik (UDAN)
scheme
The Ministry of Civil Aviation launched the
Ministrys Regional Connectivity Scheme
UDAN in New Delhi.
UDAN-
UDAN is an innovative scheme to
develop the regional aviation
market. It will create affordable yet
economically viable and profitable
flights on regional routes so that
flying becomes affordable to the
common man.
UDAN envisages providing
connectivity to un-served and
under-served airports of the country
through revival of existing air-strips
and airports. The scheme would be
in operation for a period of 10 years.
Interested airline and helicopter
operators can start operations on
hitherto un-connected routes by
submitting proposals to the
Implementing Agency. The operators
could also seek a Viability Gap
Funding (VGF).
All such route proposals would then
be offered for competitive bidding
through a reverse bidding
mechanism and the route would be
awarded to the participant quoting
the lowest VGF per Seat.
The successful bidder would then
have exclusive rights to operate the
route for a period of three years.
Such support would be withdrawn
after a three year period, as by that
time, the route is expected to
become self-sustainable.
UDAN Flights will have both
subsidized and non subsidized
seats.
The fare for a one hour journey of
approx. 500 km on a fixed wing
aircraft or for a 30 minute journey
on a helicopter would now be
capped at Rs. 2,500 for subsidized
seats.
The subsidy would be provided
through
o A financial stimulus in the form
of concessions from Central and
State governments (like reduced
excise duty, service tax, VAT on
ATF) and airport operators (for
example no Landing and Parking
charges).
o Viability Gap Funding to the
interested airlines.
 A Regional Connectivity Fund would
be created to meet the viability gap
funding requirements under the
scheme. The RCF levy per departure
will be applied to certain domestic
flights.
The partner State Governments
(other than North Eastern States
and Union Territories where
contribution will be 10 %) would
contribute a 20% share to this fund.
The selection of airports where
UDAN operations would start would
be done in consultation with State
Government.
The UDAN is likely to a give a major
fillip to tourism and employment
generation in the hinterland.
Trade receivables Discounting System
(TReDS)
About TReDS-
Trade Receivables Discounting
System or TReDS is an initiative
undertaken by Reserve Bank Of
India to safeguard the interest of
micro, small and medium
enterprises (MSMEs).
It is an institutional setup for flow of
finance to micro, small and medium
enterprises (MSMEs) through
multiple financiers at a competitive
rate.
It has been set up under Payment
and Settlement Systems Act 2007.
MSME sellers, corporate buyers and
financiers both banks and non-
bank (NBFC factors) are direct
participants in the TReDS.
It will provide a platform to bring
these participants together for
facilitating uploading, accepting,
discounting, trading and settlement
of the invoices/bills of MSMEs.
All registered MSMEs can discount
their bills of exchange or invoice
through TReDS with a quoted price.
This system will ensure the
competitive pricing offer from the
financer. The seller can opt for a
financer of his choice.
Trade Facilitation Agreement (TFA)
The WTO's trade facilitation agreement has
come into effect with its two-thirds
members ratifying the pact.
About TFA-
TFA is the first multilateral deal
concluded in the 21 year history of
the World Trade Organization.
It was a part of the Bali Package of
decisions agreed upon in 2013
The deal will ease trade processes,
bring down barriers to trade and
enhance the capacity of the
developing world to better engage
with the global trading network.
It is expected to provide a much-
needed boost to beleaguered global
growth.
It also includes faster clearance
procedures, enhanced conditions for
freedom of transit for goods
improvements, improved appeal
rights for traders as well as reduced
fees and formalities connected with
the import and export of goods.
However, these reforms will only
follow after countries independently
notify various provisions. The basic
set of provisions will be
implemented by least-developed
countries (LDC) within one year
from now.
Also, many countries, including
India, will receive more time to set in
motion a further set of provisions.
According to a WTO study, once
the TFA is fully implemented,
developing countries such as India
are predicted to increase the
number of new products exported
by as much as 20%, with least
developed countries likely to see an
increase of up to 35%.
Termination of Bilateral Investment
Treaties (BITs)
India unilaterally terminated its BIT with
Netherlands.

Additional information-
A bilateral investment treaty (BIT) is
an agreement establishing the terms
and conditions for
private investment by nationals and
companies of one state in another
state.
India had released a model BIT in
December 2015.
It has since given notices of
termination to all its existing
partners in BITs, including
European Union.
The revised model BIT will be used
for re-negotiation of existing BITs
and negotiation of future BITs.
The new model also includes
protection of investment as an
objective of BITs.
It not only defines investments but
also contains a negative list of
investments.
Other features include an
"enterprise" based definition of
investment, non-discriminatory
treatment through due process,
national treatment, etc.
The model BIT also has a refined
Investor State Dispute Settlement
(ISDS) provision requiring investors
to exhaust local remedies before
commencing international
arbitration, and limiting the power
of the tribunal to awarding
monetary compensation alone.
Most of the countries has expressed
concerns over the provisions of the
investment treaty and have shown
no interest in negotiating on its
basis.
Tax holiday for Coastal Economic
Zones
The Union Budget 2017-18 is likely to give
Indias first coastal economic zones (CEZs),
a 10-year holiday from corporation tax.
However, there could be a rider these units
must generate a specific threshold of direct
jobs.
About Coastal Economic Zones (CEZs)-
The CEZs are aimed at promoting
development of port-proximate
industrial clusters, encourage port-
led development, reduction of
logistics cost and time for movement
of EXIM and domestic cargo and
enhance the global competitiveness
of Indian manufacturing sector.
According to a preliminary proposal,
CEZs would have to be around 450-
km long areas from the sea, where
big manufacturing and export-
oriented units would come up to set
up labour-intensive industries such
as clothing, footwear, electronics as
well as electrical and light
manufacturing to tap overseas
markets.
The CEZs would have liberal land
and labour laws.
14 perspective CEZs have been
identified under the Sagarmala
project. Indias first two CEZs are
expected to come up in Gujarat and
Andhra Pradesh.
TAMRA portal
Ministry of Mines launched Transparency,
Auction Monitoring and Resource
Augmentation (TAMRA) Portal and Mobile
Application.
About the portal-
TAMRA is a step to speed up mining
activity in India and facilitate all the
stakeholders to track the status of
the statutory clearances associated
with blocks for getting mines to
reach till operationalisation for the
same.
It will be an interactive platform for
all the stakeholders to compress the
timeline for statutory and other
clearances as it is expected to help
minimise the gestation period for
starting production.
 TAMRA covers block-, state- and
mineral-wise information of the
blocks to be auctioned, monitors
various statutory clearances and
also highlights the additional
resources generated through e-
auction.
In case of delay in obtaining any
clearances, TAMRA will send out
triggers to the authority concerned
so that the remedial steps can be
taken immediately.
The mines ministry will also receive
triggers generated by TAMRA, which
will facilitate expediting clearances
in case the timelines set against
each of the statutory clearances are
not met.
Further, the status of each of the
clearances will be reflected on the
portal.
This portal also enables the
successful bidder to provide
suggestions and other inputs for
improving the current process of
issuing statutory clearances in the
mining sector.
Study finds lacunae in implementation
of Aadhar card based PDS
A study of PDS in 9 states, led by
economist John Dreze, found that Aadhaar-
based biometric authentication in the PDS
suffered from many drawbacks including
failure of Point of Sale (PoS) machines and
remote servers, incorrect Aadhar card
identification, quantity fraud etc
About Public Distribution System (PDS)-
PDS is a food security system
established by the Government of
India under Ministry of Consumer
Affairs, Food, and Public
Distribution
It is managed jointly by Central
government and the state
governments.
The Central Government, through
Food Corporation of India (FCI), has
assumed the responsibility for
procurement, storage,
transportation and bulk allocation
of food grains to the State
Governments.
The operational responsibility
including allocation within State,
identification of eligible families,
issue of Ration Cards etc., rests with
the State Governments.
Presently, there are four
commodities under the PDS, namely
wheat, rice, sugar and kerosene.
PDS in India has undergone many
improvements with Revamped
Public Distribution System (RPDS)
launched in 1992 and Targeted
Public Distribution System (TPDS)
launched in 1997.
Under the TPDS, beneficiaries were
divided into two- Below Poverty Line
(BPL) and Above Poverty Line (APL),
with BPL receiving entitlements at a
subsidized price and APL receiving
entitlements at 100% of economic
cost.
Antyodaya Anna Yojana (AAY)-
It was launched in order to make
TPDS more focused and targeted
towards poorest of the poor families.
o Under AAY, food grains were
provided at a subsidized rate of
Rs.2/- per kg. for wheat and
Rs.3/- per kg for rice.
o The scale of issue that was
initially 25 kg per family per
month was increased to 35 kg
per family per month with effect
from 2002.
Changes brought by The National
Food Security Act (NFSA) 2013:
o Upto 75% of the rural
population and 50% of the
urban population will be covered
under TPDS.
o Under the NFSA, the APL
category is abolished and eligible
households come under two
well-defined categories: priority
households, entitled to 5 kg of
foodgrains per person per month
at nominal prices, and
Antyodaya households (the
poorest), entitled to 35 kg per
household per month.
o The prices for priority
households were: Rice at 3/kg,
 wheat at 2/kg and Coarse
grains (millet) at 1/kg.
About Aadhar card-
Aadhaar is a 12-digit unique
identification number issued by the
Indian government to every
individual resident of India. The
Unique Identification Authority of
India (UIDAI) is responsible for
managing and assigning Aadhaar
numbers and Aadhaarcards.
In March, the Aadhaar (Targeted
Delivery of Financial and Other
Subsidies, Benefits and Services)
Bill, 2016 was passed by the
parliament. It is also referred to as
Aadhaar Act
The Act will provide statutory
backing for transfer of subsidies and
benefits to eligible people having
Aadhaar (UID) number.
Every resident shall be entitled to
obtain an Aadhaar number.
To obtain an Aadhaar number, an
individual has to submit his:-
o Biometric information
(photograph, finger print, iris
scan)
o Demographic (name, date of
birth, address) information.
The collected personal information
cannot be revealed by the authority
except under two cases- In the
interest of national security and on
the orders of a court.
The Act prescribes a punishment of
imprisonment upto three years and
minimum fine of Rs 10 lakh for
revealing personal information in
any other case by anyone.
The Act also provides a statutory
backing to UIDAI. It specifies its
composition and functions.
Small traders to be exempted from GST
The Goods & Services Tax (GST) Council
has decided that businesses in the
Northeastern and hill states with annual
turnover below Rs.10 lakh would be out of
the GST net, while the threshold for the
exemption in the rest of India would be an
annual turnover of Rs.20 lakh.
About GST-
GST is a single, indirect tax on the
supply of goods and services for the
whole nation.
Features of the tax were
incorporated in the constitution by
the 101st Constitutional Amendment
Act.
It is a tax paid on value addition at
each stage. Credit for input taxes to
be paid at each stage will be
available in subsequent stages of
value addition.
It subsumes many taxes under it,
such as:
o Central taxes: Excise duty,
Service tax, Countervailing duty
etc
o State taxes: Value Added Tax,
Entertainment tax, Octroi etc.
Alcoholic liquor for human
consumption has been kept out of
the purview of GST.
Petroleum and petroleum products
will be subject to GST levy on a later
date.
Both the centre and the state will
levy GST simultaneously across the
value chain.
There are three components of GST:
o Central GST (CGST) Levied and
collected by the Centre
o State GST (SGST) Levied and
collected by the states
o Integrated GST (IGST) -
It will be levied on the inter-state
transactions of goods and
services. It will be levied and
collected by the Centre.
 GST rates to be levied on different
products are decided by the Goods
and Services Tax (GST) Council.
The Council will consist of:
o Union Finance Minister as the
chairman.
o Union Minister of State in-
charge of Revenue or Finance
and ministers in-charge of
Finance or Taxation of each
state as members.
Recently, Lok Sabha passed four
GST bills to setup the GST
framework.
Small finance banks
Utkarsh Micro Finance launched its Small
Finance Bank in January 2017
About Small Finance Banks (SFB)-
The aim behind these banks is to
provide financial inclusion to
sections of the economy not being
served by other banks, such as
small business units, small and
marginal farmers etc.
Banks with a small finance bank
license can provide basic banking
service of acceptance of deposits
and lending.
They were established as public
limited companies in the private
sector.
The minimum paid-up equity capital
for small finance banks shall be Rs.
100 crore.
They are governed by the provisions
of Reserve Bank of India act 1934,
Banking Regulation act 1949 and
other relevant statutes.
Since they are non-scheduled
banks, they cannot borrow funds
from Reserve Bank of India like
other scheduled commercial banks.
They are required to adhere to
maintenance of Cash Reserve Ratio
(CRR) and Statutory Liquidity Ratio
(SLR).
SEBI to tighten algorithmic trading
rules
The Securities and Exchange Board of India
(SEBI) plans to further tighten the
regulations for algorithmic trading to
minimize instances of misuse of such
systems that can be used to execute
complex trading strategies at a very high
speed.
Additional information-
India was one of the few countries in
the world to regulate algorithmic
trading.
SEBI is looking to further
strengthen the norms so that
instances of flash crashes that have
happened overseas, and also in
India a few times, could be
minimized.
Algorithmic trading, also referred to
as algo trading and black box
trading, is a trading system that
utilizes advanced and complex
mathematical models and formulas
to make high-speed decisions and
transactions in the financial
markets.
Algorithmic trading involves the use
of fast computer programs and
complex algorithms to create and
determine trading strategies for
optimal returns.
On the National Stock Exchange
(NSE), algo trades accounted for
close to 16% of all trades. On the
BSE, it was 8.56% in January.
A flash crash is a very rapid, deep,
and volatile fall in security prices
occurring within an extremely short
time period.
A flash crash frequently stems
from trades executed by black-box
trading, combined with high-
frequency trading, whose speed
and interconnectedness can result
in the loss and recovery of billions of
dollars in a matter of minutes and
seconds.
SEBI relaxes rules for Angel Investors

In an attempt to boost early-stage funding
in startups, SEBI on Wednesday relaxed
norms for Angel investors.
Additional information-
Angel Investor is individual who
provides capital for a business start-
up, usually in exchange
for convertible debt or ownership
equity.
SEBI made amendments to SEBI
(Alternative Investment Funds)
Regulations, 2012 for changing the
rules.
It increased the upper limit for
number of angel investors in a start-
up to 200 from 49.
It also reduced the
minimum investment amount
in startups by angel investors to Rs
25 lakh from Rs. 50 lakh.
The changed rules allow angel funds
to invest in startups incorporated
within five years before the day of
investment, up from three years.
The lock-in period for investment
has been reduced from three years
to one year.
The changed rules bar promoters
and the top management of
companies from entering into
agreements with private equity
players for an additional
compensation without a nod from
the company's board and
shareholders.
Securities and Exchange Board of India
(SEBI)-
The Securities and Exchange Board
of India was established on April 12,
1992 in accordance with the
provisions of the Securities and
Exchange Board of India Act, 1992.
SEBIs primary function is to protect
the interests of investors in
securities and to promote the
development of, and to regulate the
securities market.
Collective investment schemes of
NIDHI and Chit Fund are out of the
purview of SEBI.
SEBI (Alternative Investment Funds)
Regulations
These are a set of regulations
introduced by SEBI in 2012, to
regulate pooled investment funds in
India, such as real estate, private
equity and hedge funds.
These regulations apply to all pooled
investment funds registered in India
which received capital from Indian
or foreign investors. They were
introduced to bring unregistered
funds in India under the ambit of
law.
The Alternative Investment Funds
(AIFs) have been categorized into
three classes:
o Category I: These funds receive
incentives from the government,
SEBI or other regulating
agencies. These include social
venture funds, infrastructure
funds, venture capital funds and
SME funds.
o Category II: These funds are
allowed to invest anywhere in
any combination, but cannot
take debts, except for day-to-day
operation purposes. These
include private equity funds and
debt funds.
o Category III: Funds that make
short-term investments and then
sell, like hedge funds, come
under this.
The Regulations make it mandatory
to obtain certificate of registration
from SEBI for enabling AIFs to
operate under one of the above 3
categories.
SEBI allows Options trading in farm
produce
Securities and Exchange Board of India
(Sebi) allowed commodity derivative
exchanges to launch options contracts for
trading with the aim of increasing liquidity
and attracting more investors to the
commodities market.
Additional information-
 Six new products- diamond, tea,
eggs, cocoa, pig iron and brass-
have been added to the list of
commodities on which derivative
contracts can be launched and
traded.
At present, only futures contracts
based on individual commodities are
traded on commodity bourses.
Every exchange will need prior
approval from SEBI for launching
options trading for which detailed
norms will be released later.
At present, the National Commodity
and Derivatives Exchange (NCDEX)
and Multi Commodity Exchange of
India (MCX) are the two main
nationwide commodity exchanges.
Prelims related facts-
Futures and Options are derivative
instruments traded on the stock
exchange.
The instrument has no independent
value, with the same being derived
from the value of the underlying
asset. The asset could be securities,
commodities or currencies.
A futures contract allows you to buy
or sell an underlying stock or index
at a preset price for delivery on a
future date.
Options are of two types -- call and
put. A call option gives a buyer the
right to purchase an underlying
stock or index at a preset price
during a contracts liquid life. A put
option lets a buyer sell the share at
preset price during the contract life.
A call seller has the obligation to
give delivery to the buyer at the
preset price even if current market
price is higher than former. A put
seller has the obligation to buy
underlyingproduct from the buyer at
preset price even if current market
price of the share is lower.
A commodities exchange is an
exchange where various
commodities and derivatives
products are traded.
Most commodity markets across the
world trade in agricultural products
and other raw materials.
Securities and Exchange Board of India
(SEBI)-
The Securities and Exchange Board
of India was established on April 12,
1992 in accordance with the
provisions of the Securities and
Exchange Board of India Act, 1992.
SEBIs primary function is to protect
the interests of investors in
securities and to promote the
development of, and to regulate the
securities market.
SEBI board consists of 9 members-
o The chairman who is nominated
by Union Government of India.
o Two members, i.e., Officers from
Union Finance Ministry.
o One member from the Reserve
Bank of India.
o The remaining five members are
nominated by Union
Government of India, out of
them at least three shall be
whole-time members.
Collective investment schemes of
NIDHI and Chit Fund are out of the
purview of SEBI.
Revised Double Taxation Avoidance
Agreement (DTAA) with Cyprus
A revised Agreement between India and
Cyprus for the Avoidance of Double
Taxation and the Prevention of Fiscal
evasion (DTAA) with respect to taxes on
income, along with its Protocol, was signed.
Additional information-
New DTAA provides for source based
taxation of capital gains arising from
alienation of shares, instead of
residence based taxation provided
under the existing DTAA.
However, a grandfathering clause (a
clause exempting certain pre-
existing classes of people or things)
has been provided for investments
made prior to 1st April, 2017, in
respect of which capital gains would
 continue to be taxed in the country
of which taxpayer is a resident.
The new Agreement provides for
Assistance between the two
countries for collection of taxes. The
new Agreement also updates the
provisions related to Exchange of
Information to accepted
international standards.
This will enable exchange of banking
information and allow the use of
such information for purposes other
than taxation.
Agreement expands the scope of
permanent establishment and
reduces the tax rate on royalty in
the country from which payments
are made to 10% from the existing
rate of 15%.
Cyprus was the only country to have
been blacklisted by India as a non-
cooperative jurisdiction (in 2013),
due to lack of effective exchange of
information.
Double Taxation Avoidance Agreement
(DTAA)-
A DTAA, also referred to as a Tax
Treaty, is a bilateral economic
agreement between two nations
that aims to avoid or eliminate
double taxation of the same income
in two countries.
A DTAA applies in cases where a
tax-payer resides in one country and
earns income in another.
DTAAs can either be comprehensive
to cover all sources of income or be
limited to certain areas such as
taxing of income from shipping, air
transport, inheritance, etc.
DTAAs are intended to make a
country an attractive investment
destination by providing relief on
dual taxation. Such relief is
provided by exempting income
earned abroad from tax in the
resident country or providing credit
to the extent taxes have already
been paid abroad.
But the problem is DTAAs can
become an incentive for even
legitimate investors to route
investments through low-tax
regimes to sidestep taxation. This
leads to loss of tax revenue for the
country.
Revenue Insurance Scheme for
plantation crops
The commerce ministry has approved the
pilot Revenue Insurance Scheme for
Plantation Crops for protecting the growers
from the risks such as yield loss, pest
attacks etc.
About the scheme-
Revenue Insurance Scheme for
Plantation Crops (RISPC) is an
improved form of the Price
Stabilization Fund (PSF) scheme
which was discontinued in 2013.
RISPC was approved in September
2016 and will be implemented on a
pilot basis for two years covering
tea, coffee, rubber, cardamom and
tobacco in eight districts in West
Bengal, Kerala, Karnataka, Andhra
Pradesh, Assam, Sikkim and Tamil
Nadu by the commodity boards.
It aims at protecting growers of
plantation crops from the twin risks
of yield loss due to adverse weather
parameters, pest attacks etc. and
income loss caused by fall in
international/domestic prices.
Reliance ties up with Dassault to
execute Rafale offsets
Dassault Aviation of France has entered
into a partnership with Reliance group to
execute offsets for the recently concluded
deal for 36 Rafale fighter jets.
Additional information-
The contract, valued at Rs
30000crore, is the largest offset
contract to be executed by any
defence company in India till date.
The Joint Venture will focus on aero
structures, electronics and engines
and intends to strengthen
 infrastructure and supply chain in
India for the aerospace sector.
It will also focus on promoting
research and development projects
under the Indigenously Designed,
Developed and Manufactured
(IDDM) category.
Defence Procurement Procedure 2016-
A partial version of the ninth version
of the Defence Procurement
Procedure (DPP) was released by the
Ministry of Defence (MoD) in March
2016.
It was formulated on the
recommendations of Dhirendra
Singh Committee that was formed to
look into Defence Procurement
Procedure 2013
The DPP 2016 replaced the Defence
Procurement Procedure 2013 (DPP
2013) and came into force on 1 April
2016.
DPP 2013 had 5 procurement
categories (in decreasing order of
preference)-Buy(Indian), Buy
Make (Indian), Make, Buy & Make,
Buy (Global).
To provide a greater thrust to the
Make in India initiative in defence
production, DPP-2016 has
introduced a new procurement
category, Buy (IndianIndigenously
Designed, Developed and
Manufactured), or Buy (Indian
IDDM).
It replaces Buy (Indian) as the most
preferred category in the hierarchy
of six procurement categories.
This category refers to procurement
from Indian vendors of products
that are indigenously designed,
developed and manufactured and
have at least 40 per cent indigenous
content. If the product is not
designed and developed
indigenously, it will have to have 60
per cent indigenous content.
Regional Comprehensive Economic
Partnership (RCEP)
The 2nd RCEP Intersessional Ministerial
Meeting was held from 3 to 4 November
2016 in Cebu, Philippines.
About RCEP-
Regional Comprehensive Economic
Partnership (RCEP) is a proposed
free trade agreement (FTA) between
the ten member states of the
Association of Southeast Asian
Nations (ASEAN) (Brunei, Cambodia,
Indonesia, Laos, Malaysia,
Myanmar, the Philippines,
Singapore, Thailand, Vietnam) and
the six states with which ASEAN
has existing free trade agreements
(Australia, China, India, Japan,
South Korea and New Zealand).
RCEP negotiations were formally
launched in November 2012 at the
ASEAN Summit in Cambodia. The
& agreement is scheduled to be
finalized by the end of 2017.
The objective of launching RCEP
negotiations is to achieve a modern,
comprehensive, high-quality, and
mutually beneficial economic
partnership agreement among the
ASEAN Member States and ASEANs
FTA partners.
The RCEP negotiation includes:
trade in goods, trade in services,
investment, economic and technical
cooperation, intellectual property,
competition, dispute settlement, e-
commerce, small and medium
enterprises (SMEs) and other issues.
If negotiated successfully, RCEP
would create the worlds largest
trading bloc accounting for about 40
percent of world trade.
Reforms proposed for Budget 2017-18
Union Cabinet has approved the following
budgetary reforms:
i. Merger of Railway budget with the
general budget
ii. Advancement of Budget date
 iii. Scrapping the distinction between
plan and non plan expenditure
Additional information-
A separate Railway budget was a
colonial legacy with no economic
rationale.
From now, the Appropriation Bill
will contain details about Railways
finances.
The government was of the view that
the Plan/Non-Plan bifurcation of
expenditure leads to a fragmented
view of resource allocation to
various schemes.
It was also felt that the bias in
favour of Plan expenditure by Centre
as well as the state governments has
led to a neglect of essential
expenditures on maintenance of
assets.
Also, after the abolition of the
Planning Commission, the relevance
of plan and non-plan expenditure is
lost.
Revenue budget deals with the
current receipts and expenditure of
the government.
Capital budget deals with long-term
receipts and expenditure. It shows
the assets and liabilities of the
government.
Both- Revenue and Capital Budget-
are further divided into Receipts and
Expenditure.
The Expenditure used to be further
divided into Plan and Non plan
expenditure.
Non-plan expenditure is what the
government spends on the so-called
non-productive areas, such as
salaries, subsidies, loans and
interest, while plan
expenditure pertains to the money
to be set aside for productive
purposes, like various projects of
ministries and capacity building.

Prelims related facts-

Under Art 112 of the Constitution,
the President lays the Annual
Financial Statement before both the
Houses of Parliament, each year.
The Article also distinguishes
between expenditure from the
Consolidated Fund of India and
expenditure charged on the
Consolidated Fund of India.
Expenditure charged on the
Consolidated Fund of India
(established under Art 266(1) of the
Constitution) is not voted upon by
the Parliament.
As per Art 266(3), no money can be
appropriated from the Consolidated
Fund of India without Parliaments
approval.
So, the government introduces (and
passes) an Appropriation Bill (under
Art 114 of the Constitution) to
withdraw money for the expenditure
from the Consolidated Fund of
India.
The budget comprises of two major
parts- Revenue Budget and Capital
Budget.
 Lucky Grahak Yojana and Digi Dhan eligible Transaction IDs [which are
Vyapar Yojana generated automatically as soon as
the transaction is completed] by
software to be developed by NPCI.
NITI Aayog launched Lucky GrahakYojana
and DigiDhanVyaparYojana in December To ensure that the focus of the
scheme is on small transactions
2016 to encourage digital payments and a
(entered into by common people),
transition to less-cash economy.
incentives shall be restricted to
About the schemes-
transactions within the range of Rs
The schemes give cash awards to
50 and Rs 3000.
consumers (Lucky GrahakYojana)
and merchants
About National Payment Corporation of
(DigiDhanVyaparYojana) who utilize
India (NPCI)-
digital payment instruments for
personal consumption expenditures. NPCI is a not for profit company
which is charged with a
National Payment Corporation of
responsibility of guiding India
India (NPCI) is the implementing
towards being a cashless society. It
agency for this scheme.
is an umbrella organization for all
The primary aim of these schemes is
retail payments system in India.
to incentivize digital transactions so
NPCI was incorporated in December
that electronic payments are
2008 as a Section 25 company
adopted by all sections of the
under Companies Act 1956 (now
society, especially the poor and the
Section 8 of Companies Act 2013)
middle class.
It was set up with the guidance and
It will comprise of two major
support of the Reserve Bank of India
components, one for the Consumers
(RBI) and Indian Banks Association
and the other for the Merchants:
(IBA).
o Lucky Grahak Yojana
[Consumers]: The core objective is to consolidate
and integrate the multiple systems
Daily reward of Rs 1000 to be
with varying service levels into
given to 15,000 lucky
nation-wide uniform and standard
Consumers for a period of
business process for all retail
100 days;
payment systems.
Weekly prizes worth Rs 1
lakh, Rs 10,000 and Rs. 5000 The other objective is to facilitate an
for Consumers who use the affordable payment mechanism to
alternate modes of digital benefit the common man across the
Payments country and help financial
This will include all forms of inclusion.
transactions viz. UPI, USSD, NPCI has ten promoter banks
AEPS and RuPay Cards but namely, State Bank of India, Punjab
will for the time being exclude National Bank, Canara Bank, Bank
transactions through Private of Baroda, Union Bank of India,
Credit Cards and Digital Bank of India, ICICI Bank, HDFC
Wallets. Bank, Citibank and HSBC.
o Digi- Vyapar Yojana[
Market Economy Status to China
Merchants]:
Prizes for Merchants for all
digital transactions conducted As per Chinas 2001 agreement with WTO,
at Merchant establishments it will get a Market Economy Status in
Weekly prizes worth Rs. December 2016.
50,000, Rs 5,000 and Rs.
2,500
Additional information-
The winners shall be identified
through a random draw of the
 As per the agreement, a 15-year The MSS bills and securities are
time period (i.e. till December 2016) matched by an equivalent cash
was given to China to carry out balance held by the government
with the Reserve Bank. Hence, they
internal reforms and transition into
have only a marginal impact on the
a market economy. government's revenue and fiscal
Exports from a country with Market positions.
Economy Status (MES) are accepted
at the production costs and selling Mata Prasad committee
price as the benchmark.
This limits the ability and the A committee, headed by power system
quantum of anti-dumping duty that expert Mata Prasad, appointed by the
can be imposed on the goods from Central Electricity Regulatory Commission
has suggested an overhaul in transmission
the country.
planning to facilitate transfer of power on
Many countries, including India, are economic principles.
reluctant to accept the MES status
of China. Recommendations of the committee-
This is primarily because unlike The committee has suggested that
market economies where the prices transmission planning be aligned to
are determined by demand and meet customer aspirations as
opposed to the existing system
supply, there is still significant
where transmission is associated
government interference in with long-term power purchase
determining prices of items in agreements (PPAs).
China. According to the committee,
transmission planning can be done
on the basis of projected load of the
Market Stabilization Scheme bonds
states and anticipated generation
scenario based on economic
Reserve Bank of India (RBI) has revised the principles of merit order operation.
ceiling on issuance of securities under the In case of renewable energy sources,
market stabilization scheme (MSS) to Rs6 the committee said the transmission
trillion, from the previous limit of system may be planned by the
Rs30,000crore for financial year 2016-17. central transmission utility (CTU)
based on estimated capacity
Additional information- additions in perspective plan and
Market Stabilization scheme (MSS) renewable purchase obligations of
is a monetary policy intervention by each state.
the RBI to withdraw excess liquidity The committee has suggested
(or money supply) by selling system studies be carried out for
government securities in the various generation and load
economy. The MSS was introduced scenarios during peak and off-peak
in April 2004. hours, considering renewable
MSS bonds are special bonds floated capacity addition and scheduling of
on behalf of the government by the various generating stations that
RBI for the specific purpose of mop dont have any PPAs.
ping up the excess liquidity in the Further, the committee has
system when regular government emphasised the need for the
bonds prove inadequate. creation of a central repository of
These are mostly shorter-tenure generators in the Central Electricity
bonds, of less than six months Authority of India (CEA), where any
maturity. generation project developer
 proposing to set up a new
generation plant must register itself.
This will not only provide vital data
for the transmission planning
process but will alleviate problems
due to uncoordinated generation
additions.
Merchant Shipping Bill 2016
The Union Cabinet has approved the
Merchant Shipping Bill, 2016 for
introducing it in the Parliament.
About the bill-
The Bill provides for repealing of
Merchant Shipping Act, 1958 as
well as for the repealing of the
Coasting Vessels Act, 1838.
The Bill aims at simplifying the law
governing the merchant shipping in
India.
The Bill establishes a National
Shipping Board for advising the
central government on the
development of Indian shipping.
Members of the Shipping Board will
include:
o Six Members of Parliament
o Upto 16 members representing
the central government, ship-
owners, and seafarers.
The Bill allows the central
government to create a Seafarers
Welfare Board.
The Board will advise the central
government on measures to promote
the welfare of seafarers with regard
to lodging and boarding, provision of
hospitals and educational facilities
etc.
Every Indian vessel must be
registered at a port or place in India
that has been declared as a port of
registry by the central government.
The Bill requires all ships to comply
with various international
conventions such as The Safety
Convention, 1974, The Convention
on the International Regulations for
Preventing Collisions at Sea, 1972,
and The International convention for
Safe Containers, 1972.
The Bill provides for the manner of
prevention and containment of
pollution from vessels. It provides
for civil liability in case of damage
caused due to oil pollution.
The Bill was later introduced in
LokSabha during the winter session.
Mining Surveillance System
The mines ministry has launched Mining
Surveillance System (MSS), a pan-India
surveillance network using latest satellite
technology, to check illegal mining.
About MSS-
The Ministry of Mines, through
Indian Bureau of Mines (IBM), has
developed the Mining Surveillance
System (MSS), in collaboration with
Ministry of Electronics and
Information Technology (MeitY) and
Bhaskar acharya Institute for Space
Applications and Geo-informatics
(BISAG), Gandhinagar.
MSS is a satellite-based monitoring
system which aims to establish a
regime of responsive mineral
administration, through public
participation, by facilitating State
Governments in curbing instances
of illegal mining.
Any unusual land use change
activity observed on satellite imagery
in a zone up to 500m from the
boundary of mining lease area is
captured and flagged off as Triggers,
which may also include illegal
mining.
MSS will trigger an alarm whenever
there is an instance of illegal mining
outside permitted areas.
The MSS also includes user-friendly
mobile-app for use of mining
officials which will receive alerts, do
field verification and submit
inspection reports.
This mobile app also aims to
establish a participative monitoring
system where the citizens also can
use this app and report unusual
mining activity

ADB approves funds for Indias first
Coastal Industrial Corridor
The Asian Development Bank (ADB) today
approved $631 million in loans and grants
to develop the first key 800-
kilometersection (Visakhapatnam-Chennai)
of a planned 2,500-kilometer-long East
Coast Economic Corridor.
About East Coast Economic Corridor-
East Coast Economic Corridor is
Indias first Coastal Economic
Corridor.
It stretches from Kolkata to
Tuticorin and covers the states of
West Bengal, Odisha, Andhra
Pradesh and Tamil Nadu.
The Corridor will spur development
on Indias eastern coast and create
seamless trade links with other
parts of South and Southeast Asia.
Visakhapatnam-Chennai Industrial
Corridor section will be the first
Industrial Corridor to be developed
on the coastline.
There will be four main centres
along the Vishakhapatnam-Chennai
Industrial Corridor:
Vishakhapatnam, Kakinada,
Amravati and Yerpedu-Srikalahasti
About Asian Development Bank-
The Asian Development Bank (ADB)
is a regional development
bank established on 19 December
1966.
It is headquartered in Manila
(Philippines).
ADB has 67 members, of which 48
are from within Asia and the Pacific
and 19 outside.
The ADB was modeled closely on
the World Bank, and has a similar
weighted voting system where votes
are distributed in proportion with
members' capital subscriptions.
At the end of 2014, Japan holds the
largest proportion of shares at
15.7%. The United States holds
15.6%, China holds 6.5%, India
holds 6.4%, and Australia holds
5.8%.
Its main focus area is Infrastructure
development but it also provides
loans for projects in fields of
Agriculture and Food security,
Climate change and Disaster Risk
management etc.
Municipalities to issue smart city
bonds
As many as 60 municipalities across the
nation may issue bonds in the next nine to
12 months to raise funds for developing
smart cities.
Additional information-
All 100 municipalities and urban
local bodies (ULB) that have been
given the mandate to develop smart
cities will line up their high yield
bonds.
To make
the municipalities professional
enough to approach investors, the
government has selected nine
transaction advisories, whose work
would be to handhold the bodies
to float municipal bonds.
The bonds will be either secured
through existing assets, or will have
government guarantees.
The government has not yet decided
if these bonds would be tax-free.
The government had amended the
Income Tax Act in 2001 to allow the
local bodies to raise funds through
tax-free bonds.
Prelims related facts:
A municipal bond is a debt security
issued by a municipality or county
to finance its capital expenditures.
A credit rating is necessary to float
municipal bonds for mobilizing
resources as the rating certifies the
quality of the bonds.
The 74th Constitutional Amendment
Act paved way for the improvement
of institutional capacity of ULBs and
opened their routes for raising
independent revenue by directly
 levying taxes, fees and accessing
capital market.
Art 243X provides the Urban Local
Bodies the power to raise funds by
various methods.
Ahmadabad Municipal Corporation
was the first to issue such bonds.
The major sources of funds for these
bodies are grants-in-aid and
subsidised loans by central and
state government.
In India, while SEBI had framed the
regulations for such bonds,
municipal bodies have been weak in
raising finances using municipal
bonds.
RBI's Financial Stability Report
Reserve Bank of India (RBI) has released its
Financial Stability Report (FSR) December
2016.
Additional information-
The report has warned against a
sharp rise in the non-performing
assets (NPAs) of banks.
The report indicated that the risks
to the banking sector remained
elevated due to continuous
deterioration in asset quality, low
profitability and liquidity.
Among the bank groups, public
sector banks may continue to
register the highest GNPA ratio, it
said. The PSBs GNPA ratio may
increase to 12.5 per cent in March
2017 and then to 12.9 per cent in
March 2018 from 11.8 per cent in
September 2016.
The business growth of scheduled
commercial banks (SCBs) remained
subdued as they continued to lag
behind their private sector peers.
With the implementation of global
regulatory reforms most of the major
international banks have become
more resilient in terms of capital
and liquidity, the RBI said.
On the financial sector regulation,
the RBI stated that regulatory
measures on partial credit
enhancement will support the
corporate bond market in India.
The report also stated that the
guidelines on market mechanism
and large exposures will help in
reducing banks exposures to large
corporates.
RBI overhauls debt restructuring
schemes
In a step to address corporate stress,
Reserve Bank of India (RBI) made sweeping
changes to existing loan recast schemes
like S4A, 5/25 and SDR.
Changes made by RBI-
Scheme for sustainable structuring
of stressed asset (S4A)-
o The revised norms say in case a
non-performing asset (NPA) is
restructured under S4A norms,
the sustainable part of the debt
can be classified as standard if
banks set aside provisions equal
to at least 50% of the debt
classified as unsustainable or
20% of aggregate debt, whichever
is higher.
o RBI also said the unsustainable
part of debt in any S4Awhether
the account was NPA or standard
at the time of restructuring
could be upgraded to standard, if
the sustainable half of the debt
performed satisfactorily for one
year.
o It has given lenders additional
time up to 180 days for
hammering out a restructuring
package under the scheme.
Previously it was 90 days.
5/25 scheme-
o RBI has increased the coverage to
all sectors.
o It has also allowed smaller
projectswhere banks have at
least Rs250 croreexposureto
qualify for this scheme.
 o It has allowed lenders to extend
the 5/25 scheme to new project
loans.
Strategic Debt Restructuring (SDR)-
o The new promoter should have
acquired at least 26 per cent of
the paid-up equity capital of the
borrower company.
o The regulations state the new
promoter of the company will also
be in control of the borrower
company,
o It also adds the new promoter
should be the single-largest
shareholder of the borrower
company, which will allow the
promoter to make sweeping
changes vis--vis board and
operations.
Ratan Watal panel
Committee on Digital Payments, headed by
Shri.Ratan P Watal,submitted its report to
the Finance Minster.
About the report-
The 11-member committee was
notified in September 2016 by the
Union Finance Ministry to review
existing payment systems in country
and recommend appropriate
measures for encouraging Digital
Payments.
The report suggests that The
Payment and Settlement Systems
Act, 2007 should be replaced by an
updated law.
It has suggested two options
for regulating digital payments
either create an independent
payments regulator within the
framework of the Reserve Bank of
India (RBI) or make the RBIs Board
for Regulation and Supervision of
Payment and Settlement Systems
(BPSS) more independent.
Apart from this, it had also
suggested interoperability between
banks and non-bank digital
payment gateways/entities as well
as within non-banks.
The other major suggestions have
been withdrawal of all charges on
digital-based transactions by the
government, with special emphasis
on low-value transactions (that are
mainly financed by cash).
RBI has also been asked to upgrade
the existing real-time gross
settlement system (RTGS) and
National Electronic Funds Transfer
(NEFT) systems so that they operate
on a 24/7 basis.
The committee has called for
mandating government departments
and agencies to provide options to
consumers to pay digitally as well as
incentivize consumers to make
payments (including payment of
fines and penalties) to the
government electronically.
The use of AadhaareKYC(know-
your-customer) and Aadhaar-
enabled Payments System (AEPS)
has been encouraged by the
committee.
A reduction in import duty has been
suggested to make POS terminals
affordable for the acquiring banks.
Railways first non-fare revenue policy
Indian Railways has launched a non-fare
revenue policy to reduce its dependence on
traditional revenue streams such as
passenger and freight traffic.
About the policy-
The non-fare revenue policy allows
Railways to consider unsolicited
proposals to earn through non-fare
sources with several flexible terms
and conditions.
Under the policy advertising will be
allowed in areas so far unused
along tracks, road over bridges, level
crossing gates, etc.
It will also allow all forms of
advertising, including digital and
rights will be awarded for 10 years.
A train branding policy was also
introduced under which
advertisement through vinyl
wrapping of train exteriors,
 (including windows of AC coaches)
and inside coaches will be allowed.
Similarly, a content-on-demand and
rail radio policy allows monetization
of entertainment-based services on
trains and at railway stations.
The policy also includes leasing out
spaces at platforms to ATMs.
Railways expects that these
initiatives have the potential to
generate over Rs 18,000 crore of
revenue.
Railways India Development Fund
To attract investors for the expansion and
modernisation of rail infrastructure,
Railways is setting up a Rs 30,000 crore
fund to for implementation of remunerative
projects across country.
About the Fund-
Railway Infrastructure Development
Fund (RIDF) will be used to finance
various rail-infra projects in the
country.
The RIDF, to be supported by the
World Bank, will have 20 percent
funding from the Finance
Ministry and the rest will come from
pension and sovereign funds.
Projects with minimum rate of
return ranging between 14 per cent
and 16 per cent will be taken up by
the RIDF.
Railway introduces flexi-fare method
for booking tickets
The government has decided to introduce a
dynamic pricing system on Rajdhani,
Shatabdi and Duronto trains.
Additional information-
Only the first 10% of the tickets sold
in Rajdhani, Shatabdi and Duronto
trains will be available at the
original listed price.
Fares will go up by 10% after the
sale of every 10% of the tickets.
After the sale of 50% of the tickets
corresponding with a 50% increase
in fares no further increases will
be levied.
Vacant berths left at the time of
charting would be offered for
current booking. Tickets under
current booking shall be sold at the
last price sold for that class.
The Tatkal charges would remain
the same. These have been retained
at the earlier 1.5% of the basic fare.
Pusa Arhar 16
A new, high-yielding pigeon pea (Arhar),
called Pusa Arhar 16, developed by
government scientists could prove a game
changer for inflation-wary policymakers
and consumers alike.
About PusaArhar 16-
It is created by scientists at the
Indian Agricultural Research
Institute (IARI).
It has a maturity time of 120 days,
down from the 160-270 days needed
by varieties now in use.
It also requires less water and is
suitable for mechanized harvesting
with no loss in yields, at about 20
quintals/hectare.
It is suitable for both intensive
cultivation areas such as Punjab
and rain-fed areas of central India.
The new breed plants have an early
and synchronous maturity.
This semi-dwarf variety allows for
high density planting, which is
important for realizing higher yield
and mechanization.
Additional information-
India is the largest producer,
consumer and importer of pulses
and it is a price-sensitive
commodity.
 Pigeon pea is a leguminous plant
grown in Kharif season.
It can tolerate temperatures as high
as 35oC. Frost is lethal for it.
An average annual rainfall of 60-
100cms is most suitable for it.
Although it can tolerate rainfall upto
200cms and is also renowned for
draught tolerance.
National Transit Oriented
Development Policy (TOD)
The Union urban development ministry has
formulated a national policy framework for
transit oriented development (TOD).
About the policy-
Transit Oriented Development (TOD)
promotes living close to mass urban
transit corridors like the Metros,
monorail and bus rapid transit
(BRT) corridors.
This policy seeks to enhance the
depth of understanding of States
and UTs on TOD as a viable solution
to many of the challenges like
haphazard urban growth and
sprawl, mobility, pollution, housing
choices etc.
This new urban design and planning
in the form of TOD, is being
incentivized by the Ministry under
two more initiatives viz., Metro
Policy and Green Urban Mobility
Scheme.
Under the new Metro Policy, TOD
has been mandatory while under
Green Urban Mobility Scheme, TOD
has been made an essential
reform and is given priority for
receiving central assistance.
Under TOD, city densification will be
promoted along mass transit
corridors through vertical
construction by substantially
enhancing FARs (Floor Area Ratio)
backed by promotion of Non-
motorized Transport Infrastructure
for walking and cycling to transport
stations.
Dense living along transit corridors
besides resulting in enhanced living
and travel experience, will also
improve ridership of mass transit
systems.
If properly executed, TOD could
emerge as a means of financing
mass transit project, for which the
demand is growing.
TOD promotes integration of land
use planning with transportation
and infrastructure development to
avoid long distance travel in cities
through compact development as
against the present pattern of
unplanned and haphazard urban
growth.
TOD Policy also aims at inclusive
development by ensuring mixed
neighbourhood development in the
form of a range of housing choices
including affordable housing and
ensuring spaces for street vendors.
OPEC cuts output
OPEC countries took a collective decision in
Algiers to cut down collective output.
Organization of the Petroleum Exporting
Countries (OPEC)-
OPEC is an intergovernmental
organization of 13 nations, founded
in 1960 in Baghdad by the first five
members (Iran, Iraq, Kuwait, Saudi
Arabia, Venezuela), and
headquartered since 1965
in Vienna.
As of 2015, the 13 countries
accounted for an estimated 42
percent of global oil production and
73 percent of the world's "proven" oil
reserves.
OPEC's members are Algeria,
Angola, Ecuador, Gabon, Iran, Iraq,
Kuwait, Libya, Nigeria, Qatar, Saudi
Arabia (the de facto leader), United
Arab Emirates, and Venezuela. Two-
thirds of OPEC's oil production and
reserves are in its six Middle
Eastern countries that surround the
oil-rich Persian Gulf.
 Saudi Arabia has the highest oil National Apprenticeship Promotion
production among the members. Scheme
Approval of a new member country
requires agreement by three-
The Union government has notified the
quarters of OPEC's existing
members, including all five of the National Apprenticeship Promotion Scheme
founders. that would offer financial incentives to
employers.

Niryat Bandhu Scheme About the scheme-

September 2016 marks the completion of
the first year of online programme
NiryatBandhu@ Your Desktop under
Niryat Bandhu Scheme.
Niryat Bandhu Scheme
The Niryat Bandhu Scheme was
announced as part of Foreign Trade
Policy 2009-14 to focus on
mentoring the first generation
entrepreneurs in the field of
international trade.
Directorate General of Foreign Trade
(DGFT) is responsible for
implementation of the scheme.
The scheme was launched for
mentoring new and potential
exporters on the intricacies of
foreign trade through counselling,
training, and outreach programme.
Last year, an online program:
NiryatBandhu@ Your Desktop was
launched, with Indian Institute of
Foreign Trade (IIFT) as the nodal
agency.
The online program will enable the
participants to learn the intricacies
of import-export business from their
homes.
The lectures are transmitted live
(through video conferencing
sessions) and the participants are
free to address their queries to the
reputed faculty members.
It is the first scheme to offer
financial incentives to employers.
The government will share 25% of
total cost of stipend paid to the
apprentices with the employers i.e.
25% of the cost would be borne by
the government.
The government has earmarked an
outlay of Rs 10,000 crore to provide
apprenticeship training to 50 lakh
apprentices by 2019-20.
The scheme will be implemented by
Director General of Training (DGT)
under the aegis of Union Ministry of
Skill Development and
Entrepreneurship (MSDE).
Pulses in news
i. A government constituted expert
panel under CEA Arvind
Subramanian, on pulse price
rise, submitted its report.
ii. Also, the government has
decided to double the buffer
stock limit of pulses.
Additional information-
The committee was formed to advise
long term measure to augment
supply of pulses.
Some of its recommendations are:
increasing the Minimum Support
Price (MSP) for pulses, a buffer stock
of 2 million tonnes, pushing states
to delist pulses from the APMC law
 and encouraging development of
indigenous GM technologies.
The additional procurement (for
buffer stock) would be done by
central agencies like Food
Corporation of India, National
Agricultural Cooperative Marketing
Federation of India Ltd.
(NAFED) etc. and the state
governments.
The funding would be provided
through Price Stabilization Fund
About Price Stabilization Fund (PSF)-
The Fund was established as a
Central Sector Scheme, with a
corpus of Rs.500 crores, to support
market interventions for price
control of perishable agri-
horticultural commodities.
It was established by the Agriculture
Ministry but was later shifted to
Consumer Affairs Ministry.
PSF will be used to advance interest
free loan to State Governments and
Central agencies to support their
working capital and other expenses
on procurement and distribution
interventions for such commodities.
For this purpose, the States will set
up a revolving fund to which Centre
and State will contribute equally
(50:50).
The ratio of Centre-State
contribution to the State level
corpus in respect of North East
States will be 75:25.
Public Financial Management System
The Centre is planning to fast track the
process of implementation of Public
Financial Management System (PFMS) in
the country.
About PFMS-
The PFMS is an electronic platform
that compiles, collates and makes
available in real-time, information
regarding all government schemes,
and, significantly, provides the
government real-time information on
resource availability and utilisation
across schemes.
The platform will allow government
expenditure to adopt a Just-in-
Time (JIT) approach, with payments
made only when they are needed.
The electronic fund tracking
mechanism will allow the
government to monitor and access
the more than Rs.1 lakh crore of idle
funds lying with it under various
heads.
Penny stocks may come under long-
term capital gains tax net
The government plans to withdraw tax
exemption on long-term capital gains
(LTCG) made on the sale of penny stocks to
end the use of stock markets for tax
evasion.
Additional information-
Currently, any capital gains from
shares held for more than a year are
fully exempt from paying taxes.
The taxability of LTCG depends on
whether Securities Transaction Tax
(STT) was paid at the time of sale of
shares. LTCG will be tax-exempt
only if the investor had paid STT at
the time of sale of shares on a
recognized stock exchange.
Current rules, the tax department
claims, were being misused by
entities to book fake LTCG gains
and manipulate markets.
Prelims related facts-
A penny stock typically trades
outside of the major market
exchanges at a relatively low price
and has a small market
capitalization.
These stocks are generally
considered highly speculative and
high risk because of their lack of
liquidity, small capitalization and
limited disclosure.
 Most penny stocks dont trade on
the major market exchanges.
Securities Transaction Tax is a tax
payable on the value of securities
transacted through a recognized
stock exchange. As of 2016, it is
0.1% for delivery-based equity
trading.
NK Singh panel submits its report
N.K. Singh panel submitted its report on
revising the Fiscal Responsibility and
Budget Management Act.
Additional information-
The Committee consisted of Dr. Urjit
R. Patel, Governor, Reserve Bank of
India (RBI), Shri Sumit Bose, former
Finance Secretary, Dr. Arvind
Subramanian, Chief Economic
Adviser and Dr. Rathin Roy,
Director, National Institute of Public
Finance & Policy (NIPFP) as
members.
The Government had constituted a
Committee in May, 2016 to review
the Fiscal Responsibility and Budget
Management (FRBM) Act under the
Chairmanship of Shri N.K. Singh.
Subsequently, the Terms of
Reference were enlarged to seek the
Committees views on certain
recommendations of the Fourteenth
Finance Commission and the
Expenditure Management
Commission.
Recommendations-
Committee has called for a gradual
reduction of the fiscal deficit to 2.5
per cent of the GDP and revenue
deficit to 0.8 per cent by 2022-23.
It has also said the Centre should
replace the existing Fiscal
Responsibility and Budget
Management (FRBM) Act, 2003,
with a new law and also set up a
Fiscal Council.
The committee has also called for
institutional reforms in general
governments fiscal management,
including the Centre giving consent
to State borrowings under Article
293 of the Constitution and
requesting the RBI to issue a
consolidated annual prospectus for
planned bond and loan issues by
each government.
The report said that government
should adopt fiscal deficit as the key
operational target consistent with
achieving the medium-term debt
ceiling, adding that escape clause
should be used only in specified
circumstances.
The report also includes a draft
Fiscal Responsibility and Debt
Management Bill, 2017.
OPEC cuts output
OPEC countries took a collective decision in
Algiers to cut down collective output.
Organization of the Petroleum Exporting
Countries (OPEC)-
OPEC is an intergovernmental
organization of 13 nations, founded
in 1960 in Baghdad by the first five
members (Iran, Iraq, Kuwait, Saudi
Arabia, Venezuela), and
headquartered since 1965
in Vienna.
As of 2015, the 13 countries
accounted for an estimated 42
percent of global oil production and
73 percent of the world's "proven" oil
reserves.
OPEC's members are Algeria,
Angola, Ecuador, Gabon, Iran, Iraq,
Kuwait, Libya, Nigeria, Qatar, Saudi
Arabia (the de facto leader), United
Arab Emirates, and Venezuela. Two-
thirds of OPEC's oil production and
reserves are in its six Middle
Eastern countries that surround the
oil-rich Persian Gulf.
Saudi Arabia has the highest oil
production among the members.
Approval of a new member country
requires agreement by three-
quarters of OPEC's existing
members, including all five of the
founders.
 National Food Security Act
implemented in the entire country
With Kerala and Tamil Nadu rolling out the
National Food Security Act (NFSA), now the
Act has been implemented in all the States
and Union Territories.
National Food Security Act (NFSA)-
The National Food Security Act,
2013 is an Act of Parliament which
aims to provide subsidized food
grains to approximately two thirds
of India's population.
Up to 75% of the rural population
and 50% of the urban population
will be covered under this Act.
Under the NFSA, eligible households
come under two well-defined
categories: priority households,
entitled to 5 kg of foodgrains per
person per month at nominal prices,
and Antyodaya households (the
poorest), entitled to 35 kg per
household per month.
The prices for priority households
were: Rice at 3/kg, wheat at 2/kg
and Coarse grains (millet) at 1/kg.
Identification of eligible households
is to be done by States/UTs.
Eldest woman of the household of
age 18 years or above to be the head
of the household for the purpose of
issuing of ration cards.
Pregnant women and lactating
mothers and children in the age
group of 6 months to 14 years will
be entitled to meals as per
prescribed nutritional norms under
Integrated Child Development
Services (ICDS) and Mid-Day Meal
(MDM) schemes. Higher nutritional
norms have been prescribed for
malnourished children upto 6 years
of age.
Pregnant women and lactating
mothers will also be entitled to
receive maternity benefit of not less
than Rs. 6,000.
There is also a provision for food
security allowance to entitled
beneficiaries in case of non-supply
of entitled foodgrains or meals.
NHAI plans a new funding route
The National Highways Authority of India
(NHAI) is preparing to start the process of
monetizing toll-based operational road
assets under the toll, operate and transfer
(TOT) model, aimed to bring new
investments to the highways sector.
Additional information-
This will be Indias first exercise in
auctioning NHAIs operational
projects.
Under the TOT model, stretches of
national highway already
constructed by the NHAI or a
concessionaire will be bid out to the
private sector for a fixed time period
(concession period).
The NHAI can securitize the toll
receivables by collecting upfront the
concession fee.
The private party will operate and
collect toll on the stretch during the
concession period. It would also be
responsible for maintaining the
roads during this period.
The model takes away two key risks
in the road sectordelays or cost
overruns and initial traffic
discoveryas the assets that will be
offered under this (model) will be
operational with some tolling
history.
NHAI can lease up to 75 national
highway projects which are fetching
tolls for at least two years to various
entities on the TOT model.
Non-Performing Assets (NPA) and Bad
Banks
To reduce the quantum of bad loans in
sectors like steel, power and shipping, the
finance ministry has asked successful PSUs
such as NTPC and Steel Authority of India
to examine taking over some stressed
projects in their respective sectors, in
coordination with the lender banks.
Rising NPAs in recent years have negatively
affected banks' balance sheets, hampering
their ability to lend. There have been o Written off assets are those the
suggestions to deal with this problem by bank or lender doesnt count the
creating Bad Banks. money borrower owes to it.
To solve the problem of bad loans in
Concept of Bad Banks- India, the Reserve Bank of India
A bad bank is a corporate structure (RBI) has introduced multiple
to isolate high risk assets held by schemes over the last few years:
a bank or a financial organisation. Flexible Refinancing of
The proposed bad bank would be a Infrastructure (5/25 scheme), Asset
centralised agency that would take Reconstruction (ARC), Strategic
over the largest and most difficult Debt Restructuring (SDR), Asset
stressed loans from public sector Quality Review (AQR) and
banks in order to help clean their Sustainable Structuring of Stressed
balance sheets. Assets (S4A).
The approach of a Bad Bank allows
good banks to focus on their core Flexible Refinancing of Infrastructure
business of lending while the bad (5:25 scheme)
bank can specialize in maximizing The 5:25 scheme allows banks to
value from the high risk assets. extend long-term loans of 20-
The first bank to use the bad bank 25 years to match the cash flow of
strategy was Mellon Bank, which projects, while refinancing them
created a bad bank entity in 1988. every 5 or 7 years.
Until now, banks were typically not
Prelims related facts- lending beyond 10-12 years. As a
India has been trying to solve its result, cash flows of infrastructure
Twin Balance Sheet (TBS) problem firms were stretched as they tried to
overleveraged companies and meet shorter repayment schedules.
bad-loan-encumbered banks, which Infrastructure projects give positive
is a legacy of the boom years in mid- cash flows after a long duration
2000s. (typically after the start of
Stressed assets = NPAs + Operations). This scheme helps in
Restructured loans +Written Off making long term infrastructure
Assets projects viable by matching cash
o A nonperforming asset (NPA) flows with the repayment schedule.
refers to a classification for loans
on the books of financial Asset Reconstruction Company
institutions that are in default or Asset Reconstruction Company
are in arrears on (Securitization Company /
scheduled payments of principal Reconstruction Company) is a
or interest. In most cases, debt company registered under Section 3
is classified as nonperforming of the Securitisation and
when loan payments have not Reconstruction of Financial Assets
been made for a period of 90 and Enforcement of Security
days. Interest (SRFAESI) Act, 2002. It is
o Restructured asset or loan are regulated by Reserve Bank of India
that assets which got an as anNon Banking Financial
extended repayment period, Company.
reduced interest rate, converting ARC performs the following
a part of the loan into equity, functions:
providing additional financing, o Acquisition of financial assets.
or some combination of these o Change or takeover of
measures. A restructured loan Management or Sale or Lease of
also indicates bad asset quality Business of the Borrower
of banks. o Rescheduling of Debts
 o Enforcement of Security Interest Scheme, the total loans by all
o Settlement of dues payable by institutional lenders in the
the borrower account should exceed Rs 500
ARCIL is Indias first Asset crore.
Reconstruction Company o Moratorium cannot be offered by
the banks on the sustainable
Strategic Debt Restructuring (SDR)- part of the debt.
Under SDR, banks who have given o Banks cannot extend the
loans to a corporate borrower gets repayment schedule of the debt
the right to convert the full or part or reduce the interest rate on the
of their loans into equity shares in debt.
the loan taken company. o While converting the debts into
The SDR an initiative can be taken equity or equity related
by the group of banks or Joint instruments, the banks must
Lender Forum (JLF) that have given follow the valuation criteria laid
loans to the particular defaulted down by RBI.
entity. The JLF is a committee
comprised of the entire bankers who
have given loans to a potentially Payment of Wages (Amendment) Bill,
stressed or stressed borrower.The
2016
Scheme will not be applicable to a
single lender.
The Payment of Wages (Amendment) Bill,
The basic purpose of SDR is to
2016 was introduced in Lok Sabha on
ensure more stake of promoters in
December 15, 2016 by the Minister of
reviving stressed accounts and
Labour and Employment.
providing banks with enhanced
capabilities in the management of
About the Bill-
the company.
The Bill amends the Payment of
Wages Act, 1936.
Sustainable Structuring of Stressed
Under the 1936 Act, all wages must
Assets (S4A)-
be paid either in coin or currency
The S4A Scheme aims at deep
notes, or both. However, the
financial restructuring of big debted
employer may pay his employees
projects.
wages either by cheque or by
Under this scheme, the lenders
crediting it into his bank account,
(Banks) are required to convert the
after obtaining his written
lenders debt into two- sustainable
authorization.
debt and unsustainable debt.
The Bill amends the 1936 Act to
Sustainable debt is that part of the
permit the employer to pay an
debt that can be repaid by the
employees wages: (i) in coin or
borrower using his current cash
currency notes; or (ii) by cheque; or
flows.
(iii) by crediting them into his bank
The banks then convert the account. The Bill removes the
unsustainable debt into equity. requirement of obtaining written
The scheme makes financial authorization for payment of wages
restructuring of large projects at the by cheque or through a bank
same time helping the lender's account.
ability to deal with such stressed However, the relevant central or
assets. state government may specify
However, there are certain certain industrial or other
conditions that need to be satisfied establishments where the employer
for the application of this scheme- should pay his employees only by: (i)
o For an account to be eligible for cheque; or (ii) crediting the wages in
restructuring under the S4A
 his bank account.
Pradhan Mantri Gram Sadak Yojana
(PMGSY)
The governments flagship rural road
connectivity programme, PradhanMantri
Gram Sadak Yojana (PMGSY), is expected
to achieve its annual target of constructing
roads this year.
About PMGSY-
The PradhanMantri Gram Sadak
Yojana (PMGSY) was launched in
2000 by Govt. of India to provide
connectivity to unconnected
Habitations as part of a poverty
reduction strategy.
The PMGSY is under the authority
of the Ministry of Rural
Development.
It is a 100% Centrally Sponsored
Scheme. 50% of the Cess on High
Speed Diesel (HSD) is earmarked for
this Program.
The primary objective of the PMGSY
is to provide Connectivity, by way of
an All-weather Road to the eligible
unconnected Habitations in the
rural areas, in such a way that all
Unconnected Habitations with a
population of 1000 persons and
above are covered in three years
(2000-2003) and all Unconnected
Habitations with a population of 500
persons and above by the end of the
Tenth Plan Period (2007).
In respect of the Hill States (North-
East, Sikkim, Himachal Pradesh,
Jammu & Kashmir, Uttaranchal)
and the Desert Areas (as identified
in the Desert Development
Programme) as well as the Tribal
(Schedule V) areas, the objective
would be to connect Habitations
with a population of 250 persons
and above.
The PMGSY will permit the
Upgradation (to prescribed
standards) of the existing roads in
those Districts where all the eligible
Habitations of the designated
population size have been provided
all-weather road connectivity.
However, it must be noted that
Upgradation is not central to the
Programme and cannot exceed 20%
of the States allocation as long as
eligible Unconnected Habitations in
the State still exist.
The Sub-Group of Chief Ministers
on Rationalization of Centrally
Sponsored Schemes has
recommended in its report that fund
sharing pattern of PMGSY should be
in the ratio of 60:40 between the
Centre and States for all States
except for 8 North Eastern and 3
Himalayan States for which it will be
90:10.
Project Saksham
The Cabinet Committee on Economic
Affairs has approved Project Saksham, a
New Indirect Tax Network (Systems
Integration) of the Central Board of Excise
and Customs (CBEC).
About the project-
It is an indirect tax network that will
help in the implementation of Goods
and Services Tax (GST).
It will help in:
o Implementation of Goods and
Services Tax (GST)
o Extension of the Indian Customs
Single Window Interface for
Facilitating Trade (SWIFT)
o Other taxpayer-friendly initiatives
under Digital India and Ease of
Doing Business of Central Board
of Excise and Customs.
CBES will upgrade its IT systems
(under the project).
The IT systems will eventually be
integrated with the Goods &
Services Tax Network (GSTN) for
payment and returns, registrations,
GSTN Data transfer to CBEC etc.
It will be developed with the help of
Wipro.
 Public Sector Asset Rehabilitation Prelims related facts-
Agency (PARA) India has been trying to solve its
Twin Balance Sheet (TBS) problem
overleveraged companies and
Economic Survey 2016-17 has suggested
bad-loan-encumbered banks, which
setting up a centralised Public Sector Asset
is a legacy of the boom years in mid-
Rehabilitation Agency (PARA) that could
2000s.
take charge of the largest, most difficult
cases, and make politically tough decisions Stressed assets = NPAs +
to reduce debt. Restructured loans +Written Off
Assets
Additional information- o A nonperforming asset (NPA)
refers to a classification for loans
The Survey reaches to the
on the books of financial
conclusion that a PARA may be
institutions that are in default or
necessary because:
are in arrears on
o Public discussion of the bad loan
scheduled payments of principal
problem has focused on bank
capital. But far more problematic or interest. In most cases, debt is
classified as nonperforming
is finding a way to resolve the bad
when loan payments have not
debts.
been made for a period of 90
o Some debt repayment problems
days.
have been caused by diversion of
o Restructured asset or loan are
funds. But the vast majority has
that assets which got an
been caused by unexpected
extended repayment period,
changes in the economic
reduced interest rate, converting
environment after the Global
a part of the loan into equity,
Financial Crisis.
providing additional financing, or
o Restoring public sector banks to
financial health will require large some combination of these
measures. A restructured loan
write-downs.
also indicates bad asset quality of
o Among other issues, they face
banks.
severe coordination problems,
o Written off assets are those the
since large debtors have many
bank or lender doesnt count the
creditors, with different interests.
money borrower owes to it.
And they find it hard financially
and politicallyto grant them To solve the problem of bad loans in
sizeable debt reductions, or to India, the Reserve Bank of India
take them over and sell them. (RBI) has introduced multiple
o It increases the costs to the schemes over the last few years:
government since bad debts of Flexible Refinancing of
the state banks keep rising, and Infrastructure (5/25 scheme), Asset
increases the costs to the Reconstruction (ARC), Strategic
economy, by hindering credit, Debt Restructuring (SDR), Asset
investment, and therefore growth. Quality Review (AQR) and
o Since, private run Asset Sustainable Structuring of Stressed
Reconstruction Companies Assets (S4A).
(ARCs) have not been successful
either in resolving bad debts,
though international experience Public Debt Management cell
shows that a professionally run
central agency with the The Finance Ministry has set up a Public
government backing could Debt Management Cell (PDMC) with a view
overcome the coordination and
to streamline government borrowings and
political issues
better cash management with the overall
objective of deepening bond markets.
Additional information-
PDMC will be upgraded to Public
Debt Management Agency in few
years.
This arrangement will allow
separation of debt management
functions from RBI to PDMA in a
gradual and seamless manner.
PDMC will have only advisory
functions to avoid any conflict with
the statutory functions of RBI.
PDMC has been tasked to plan
government borrowings, including
market borrowings and other
borrowings, like Sovereign Gold
Bond issuance.
PDMC has also been asked to
develop an Integrated Debt
Database System (IDMS) as a
centralised data base for all
liabilities of government, on a near
real time basis.
Public Debt Management Agency-
General Budget 2015-16 proposed
setting up Public Debt Management
Agency (PDMA) as an independent
agency to bring both Indias external
borrowings and domestic debt under
one roof.
The Public Debt Management
Agency (PDMA) was proposed to be
set up as an autonomous agency
that will act as an investment
banker to the government and will
raise capital through bonds for the
government.
At present, RBI through the Internal
Debt Management Department
(IDMD) manages the public debt of
the central and state governments
whereas the external debt (and long
term debt management) is managed
by the Union government directly.
Permanent Residency Status to
Foreign Investors
The Union Cabinet has approved the
scheme for grant of Permanent Residency
Status (PRS) to foreign investors subject to
the relevant conditions as specified in the
FDI Policy.
About the scheme-
The scheme will be applicable only
to foreign investors fulfilling the
prescribed eligibility conditions,
his/her spouse and dependents.
In order to avail this scheme, the
foreign investor will have to invest a
minimum of Rs. 10 crores to be
brought within 18 months or Rs.25
crores to be brought within 36
months.
Further, the foreign investment
should result in generating
employment to at least 20 resident
Indians every financial year.
Permanent Residency Status will be
granted for a period of 10 years
initially with multiple entry facility,
which can be renewed for another
10 years.
PRS will serve as a multiple entry
visa without any stay stipulation
and PRS holders will be exempted
from the registration requirements.
PRS holders will be allowed to
purchase one residential property
for dwelling purpose.
The spouse/ dependents of the PRS
holder will be allowed to take up
employment in private sector.
NPPA caps coronary stent prices
The National Pharmaceutical Pricing
Authority (NPPA) fixed the rates of bare
metal stents and drug-eluting stents at Rs
7,260 and 29,600 respectively.
About NPPA-
The National Pharmaceutical Pricing
Authority was set up as an attached
office (by an executive order) of the
Department of Chemicals and
Petrochemicals (now Department of
Pharmaceuticals since July, 2008)
on in August 1997.
It has been entrusted inter-alia,
with the following functions:
o To implement and enforce the
provisions of the Drugs Price
Control Order (DPCO),
1995/2013 in accordance with
the powers delegated to it.
o To undertake and/or sponsor
relevant studies in respect of
pricing of drugs/formulations.
o To monitor the availability of
drugs, identify shortages, if any,
and to take remedial steps.
o To render advice to the Central
Government on
changes/revisions in the drug
policy.
o To render assistance to the
Central Government in the
parliamentary matters relating
to the drug pricing.
Drugs (Prices Control) Order and
National List of Essential Medicines-
Drug Price Control Orders (DPCO)
are issued by the Government, in
exercise of the powers conferred
under section 3 of the Essential
Commodities Act, 1955, for enabling
the Government to declare a ceiling
price for essential and life saving
medicines (as per a prescribed
formula) so as to ensure that these
medicines are available at a
reasonable price to the general
public.
Price controls are applicable to what
is generally known as Scheduled
drugs or Scheduled formulations
that is, those medicines which are
listed out in the Schedule I of Drug
Price Control Order (DPCO), issued
by the Government of India from
time to time.
Since 2013, scheduled formulations
consist of the Essential Medicines
declared so by the Government
through its National List of
Essential Medicines (NLEM).
Thus, NLEM forms the basis of
deciding which medicines should
come under price control via DPCO.
Any formulation based on
combination of any one of these
drugs appearing under NLEM can
be subject to price fixation.
As per Para 19 of the DPCO-2013,
the Government may, in case of
extra-ordinary circumstances and in
public interest, fix the ceiling price
or retail price of any drug, whether
scheduled or non-scheduled or a
new drug for such period, as it may
deem fit.
National Pharmaceutical Pricing
Policy (NPPP) is the policy governing
price control and DPCO is the order
by which price control is enforced.
The Drug Price Control Orders are
issued by Ministry of Chemicals and
Fertilisers, which is the main nodal
administrative.
It is pertinent to note that the Drugs
& Cosmetics Act, 1940 and Rules
made thereunder administered by
the Ministry of Health and Family
Welfare do not contain any
provisions for pricing of drugs.
Instead, pricing of drugs is
administered under the provisions
of the Drug Price Control Order
(DPCO) and National
Pharmaceutical Pricing Policy by
the National Pharmaceutical Pricing
Authority
National Pharmaceutical Pricing Policy
2012(NPPP)-
The salient features of National
Pharmaceutical Pricing Policy, 2012
(NPPP-2012) are as under:
o The regulation of prices of drugs
is on the basis of essentiality of
drugs as specified under
National List of Essential
Medicines (NLEM)-2011.
 o The regulation of prices of drugs
is on the basis of regulating the
prices of formulations only.
o The regulation of prices of drugs
is on the basis of fixing the
ceiling price of formulations
through Market Based Pricing
(MBP).
The objective of National Pharmaceutical
Pricing Policy-2012 is to put in place a
regulatory framework for pricing of drugs so
as to ensure availability of required
medicines essential medicines at
reasonable prices even while providing
sufficient opportunity for innovation and
competition to support the growth of
industry.
would be invested by long term
international investors, such as a
Sovereign Wealth Funds, Insurance
and Pension Funds, etc.
NIIF is formed as a trust (set up
under the provisions of Indian
Trusts Act 1882) created by the
Government of India. NIIF is
registered with Securities and
Exchange Board of India ("SEBI") as
a Category II Alternate Investment
Fund ("AIF") under the SEBI
(Alternative Investments Funds)
Regulations, 2012.
The fund has been set up as a fund
of funds structure with an aim to
generate risk adjusted returns for
its investors alongside promoting
infrastructure development and
technology in the country by means
of investments.

About Indian Renewable Energy

NIIF to manage green energy fund Development Authority-

The Centre has decided the National Indian Renewable Energy

Infrastructure Investment Fund (NIIF) will Development Agency Limited
manage a $2-billion fund for renewable (IREDA) is a Mini Ratna (Category
energy. I) Government of India Enterprise
under the administrative control of
Additional information- Ministry of New and Renewable
The renewable energy fund was Energy (MNRE).
envisaged during the climate change IREDA is a Public Limited
discussions in Paris in 2015
Government Company established
The fund is both for old projects
looking for re-finance and new as a Non-Banking Financial
projects. Institution in 1987.
The NIIF would contribute $490 It is engaged in promoting,
million to its corpus, The Indian developing and extending financial
Renewable Energy Development assistance for setting up projects
Authority will add $110 million to relating to new and renewable
the corpus and $1 billion will be
sources of energy.
sourced from sovereign funds and
through financing instruments.

About NIIF- Problem of excess steel capacity

National Investment and
Infrastructure Fund (NIIF)is set up Major steel producers China, India and
as a quasi-sovereign wealth fund Japan along with other G20 nations have
with a corpus of Rs.40,000 called for increased sharing of information
crorewherein the Government of as well as more cooperation by forming a
India would invest 49% and the rest
global forum to address the issue of excess
steel capacity.
Additional information-
Excess steel capacity amidst
softening prices along with a weak
global economy recovery has led to
erosion of sales and profits of firms
across countries.
The problem is exacerbated by
subsidies and other types of support
from government or government-
sponsored institutions.
Many countries including USA and
India have imposed heavy duties on
imports of cheap steel from
countries such as China.
Impact on India:
o Imported steel being cheaper
than domestic steel, is preferred
by the consumers.
o This leads to fall in profits and
liquidity crunch in the domestic
firms.
o This in turn affects their
capacity to repay loans (and
interests), having a cascading
effect on the number of non-
performing assets (NPAs) with
the banks.
Highest NPAs are in steel sector
followed by national highways.
Place of Effective Management (PoEM)
The Central Board of Direct Taxes (CBDT)
has issued final guidelines for determining
the place of effective management (PoEM)
of a company.
About PoEM-
To determine the residential status
of foreign companies, the Finance
Act 2015 introduced the concept of
place of effective management or
PoEM.
Place of Effective Management
(PoEM) has been defined in the
finance bill to mean a place where
the key management and
commercial decisions that are
necessary for the conduct of the
business of an entity as a whole are
made.
If a companys place of effective
management is India, it will be
treated as an Indian resident and its
global income will be taxable in
India.
But the criteria to determine the
place of effective management were
missing and so in Budget 2016
POEM was deferred by a year.
Guidelines for determining PoEM-
Quantitatively, companies with
turnover of Rs 50 crore or less in a
financial year will be exempt from
the POEM provisions.
Qualitatively, companies with active
business outside India will be
exempt from these provisions.
The guidelines further provide the
active business outside India
(ABOI) test for determining whether
the company is engaged in active
business outside India.
The CBDT clarified that the intent is
to target shell companies and
companies that are created for
retaining income outside India
although the real control and
management of affairs is located in
India and not to target Indian
multinationals that are engaged in
business activity outside India.
As per the guidelines, the place of
effective management in case of a
company engaged in active business
outside India shall be presumed to
be outside India if the majority
meetings of the board of directors of
the company are held outside India.
However, if on the basis of facts and
circumstances, it is established that
the Board of directors of the
company are standing aside and not
exercising their powers of
management and such powers are
being exercised by either the holding
company or any other person(s)
resident in India, then the place of
effective management shall be
considered to be in India.
 The CBDT also stressed on the fact
that these guidelines are not
intended to cover foreign companies
or to tax their global income, merely
on the ground of presence of
permanent establishment or
business connection in India.