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Question and Answer
Q. 253. Spice Routes
The Spice Routes, also known as Maritime Silk Roads, is the name given to the network of sea routes that link the East with the West.
They stretch from the west coast of Japan, through the islands of Indonesia, around India to the lands of the Middle East - and from there, across the Mediterranean to Europe.
It has a distance of over 15,000 kilometres and, even today, is not an easy journey.
From our very earliest history, people have travelled the Spice Routes. These journeys were not undertaken purely in the spirit of adventure - the driving force behind them was trade. Since ancient times, trade has had an important role in human life.
In the case of the Spice Routes the links were formed by traders buying and selling goods from port to port.
The principal and most profitable goods they traded in were spices - giving the routes their name. As early as 2000 BC, spices such as cinnamon from Sri Lanka and cassia from China found their way along the Spice Routes to the Middle East.
Other goods were exchanged too - cargoes of ivory, silk, porcelain, metals and dazzling gemstones brought great profits to the traders who were prepared to risk the dangerous sea journeys.
But precious goods were not the only points of exchange between the traders. Perhaps more important was the exchange of knowledge: knowledge of new peoples and their religions, languages, expertise, artistic and scientific skills. The ports along the Maritime Silk Roads (Spice Routes) acted as melting pots for ideas and information. With every ship that swept out with a cargo of valuables on board, fresh knowledge was carried over the seas to the ship's next port of call.
Perhaps it was their strangeness and rarity that led great medicinal and spiritual values to be attributed to them.
From ancient times, spices were burned as incense in religious ceremonies, purifying the air and carrying the prayers of the people heavenward to their gods.
They were also added to healing ointments and to potions drunk as antidotes to poisons. To hide the many household smells, people burned spices daily in their homes.
They were used as cooking ingredients very early on - not only to add flavour but also to make the food, which was often far from fresh, palatable, particularly in hot climates.
The profits to be made from spices were considerable. They were small and dried, and consequently could be transported easily. The wealth of the spice trade brought great power and influence and, over the centuries, bloody battles were fought to win control of it and the routes along which it took place.
Q. 252. Steps taken for Development of Sericulture
Ans. Government through Central Silk Board (CSB) had implemented a Centrally Sponsored Scheme viz. ‘Catalytic Development Programme’ (CDP) to synergize and disseminate technologies & innovations developed by R&D units of CSB.
The objective under the scheme was to incentivize investment among stakeholders to enhance production, productivity and quality of silk.
The components under the CDP envisaged:
Strengthening and creation of silkworm seed infrastructure,
Development of farm and post-cocoon infrastructure and
Creation of better marketing facilities to ensure remunerative price to primary producers.
Consequent upon closure of CDP with effect from 2015-16, Government through Central Silk Board has been implementing a restructured Central Sector Scheme, viz. ‘Integrated Scheme for the Development of Silk Industry’ for development of Sericulture industry in various. The scheme has the following components:
Research & Development, Training, Transfer of Technology & IT Initiatives
Coordination and Market Development
Quality Certification systems and Brand promotion & Technology up-gradation
Q. 251. Modified Special Incentive Package Scheme (M-SIPS)
The Cabinet had, in 2012 approved the M-SIPS to provide a special incentive package to promote large scale manufacturing in the Electronic System Design and Manufacturing (ESDM) sector.
The scheme provides subsidy for capital expenditure - 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.
The Scheme was amended in 2015 for scope enhancement and simplification of procedure.
The Scheme has attracted investments in the ESDM. The M-SIPS has been able to create positive impact on investment in electronics sector.
The main features of M-SIPS are as follows:
The scheme provides subsidy for investments in capital expenditure - 20% for investments in SEZs and 25% in non-SEZs. It also provides for reimbursement of CVD/excise for capital equipment for the non-SEZ units. For high technology and high capital investment units, like fabs, reimbursement of central taxes and duties is also provided.
The incentives are available for investments made in a project within a period of 10 years from the date of approval.
The incentives are available for 29 categories of ESDM products including telecom, IT hardware, consumer electronics, medical electronics, automotive electronics, solar photovoltaic, LEDs, LCDs, strategic electronics, avionics, industrial electronics, nano-electronics, semiconductor chips and chip components, other electronic components and EMS. Units across the value chain starting from raw materials including assembly, testing, packaging and accessories of these category of products are included. The scheme also provides incentives for relocation of units from abroad.
The Union Cabinet has given its approval for amendment in the Modified Special Incentive Package Scheme (M-SIPS) to further incentivize investments in Electronic Sector and moving towards the goal of ‘Net Zero imports’ in electronics by 2020.
Benefits: Besides expediting investments into the Electronics System Design and Manufacturing (ESDM) sector in India, the amendments in M-SIPS are expected to create employment opportunities and reduce dependence on imports.
The salient features of the amendment are:
The applications will be received under the scheme upto 31st December 2018 or till such time that an incentive commitment of Rs 10,000 crore is reached, whichever is earlier. In case the incentive commitment of Rs 10,000 crore is reached, a review will be held to decide further financial commitments.
The incentives will be available for investments made within 5 years from the date of approval of the project.
A unit receiving incentives under the scheme, will provide an undertaking to remain in commercial production for a period of at least 3 years.
A separate Committee headed by Cabinet Secretary and comprising of CEO, NITI Aayog, Secretary Expenditure and Secretary, MeitY will be set up in respect of mega projects, envisaging more than Rs. 6850 crores (approx. USD 1 Billion) investments.
The Policy covers all States and Districts and provides them an opportunity to attract investments in electronics manufacturing.
Q. 250. Electronics Development Fund (EDF)
Formation of EDF was conceived in the National Policy on Electronics -2012. Later on in 2015, EDF was set up along with the “Digital India” agenda. As part of the "Digital India" agenda of the Government, and to develop the Electronics System Design and Manufacturing (ESDM) sector so as to achieve “Net Zero Imports” by 2020 and to look at India as their next destination to cater to the domestic Indian demand as well as act as an exports hub in the ESDM sector.
It is with this objective that an Electronic Development Fund (EDF) is set up as a "Fund of Funds" to participate in professionally managed "Daughter Funds" which in turn will provide risk capital to companies developing new technologies in the area of electronics, nano-electronics and Information Technology (IT).
What are Fund of Funds and Daughter Funds?
Fund of Fund (FoF) is defined by the securities market regulator, SEBI, as a mutual fund scheme that invests primarily in other schemes of the same mutual fund or other mutual funds. An FoF scheme enables the participating investors to achieve greater diversification and spreads risks across a greater universe. The funds they invest in are commonly known as “daughter funds”.
The EDF will also help attract venture funds, angel funds and seed funds towards R&D and innovation in the specified areas.
It will help create a battery of Daughter funds and Fund Managers who will be seeking good start-ups (potential winners) and selecting them based on professional considerations.
Benefits: Electronics permeate in all sectors of economy and have a great economic and strategic importance. A major characteristic of the electronics sector is the importance of R&D and innovation due to high velocity of technology change. Intellectual Property is the most critical differentiator and a determinant of success for an electronics company.
The Department of Electronics and Information Technology, (Ministry of Communications and IT, Government of India) is coordinating strategic activities, promoting skill development programmes, enhancing infrastructure capabilities and supporting R&D for India’s leadership position in IT and IT-Enabled services. In furtherance to this objective, the Department of Electronics and Information Technology, (Ministry of Communications and IT, Government of India) has agreed to act as the Anchor Investor of the Fund.
Q. 249. SANKALP and STRIVE Schemes
Ans. SANKALP and STRIVE Schemes
SANKALP (Skill Acquisition and Knowledge Awareness for Livelihood Promotion Programme) will be launched in 2017-18.
It will be at a cost of INR 4,000 crore.
SANKALP will provide market relevant training to 3.5 crores youth.
Next phase will be Skill Strengthening for Industrial Value Enhancement (STRIVE).
It will be launched in 2017-18 at a cost of INR 2,200 crore.
STRIVE will focus to improve on the quality and the market relevance of vocational training provided in ITIs.
It will strengthen the apprenticeship programme through industry-cluster approach.
Q. 248. Write a short note on River Information System
RIS is a combination of tracking and meteorological equipment with specialized software designed to optimize traffic and transport processes in inland navigation. The system enables swift electronic data transfer between mobile vessels and shore (base stations) through advance and real-time exchange of information so as to ensure navigation safety in inland waterways. It also provides virtual navigational aids to guide the vessel during navigation.
Inland Waterways Authority of India (IWAI) has taken up installation of RIS initially in National Waterway-1 (NW-1) on river Ganga, in three phases, viz. Haldia-Farakka, Farakka-Patna, and Patna-Varanasi.
All the vessels plying on National Waterways (NWs) need to be made compatible for using RIS. As RIS ensures safety of vessels in navigation, as per the Inland Vessel Act, it will be the responsibility of the states to direct all the vessels to be equipped with RIS compatible equipment.
Out of the existing five National Waterways, NW-1, 2 and 3 have been developed with targeted depth, navigational aids and terminal facilities with storage and mechanized handling facilities. These NWs have been made operational and vessels are plying on them. “Jal Marg Vikas” project for capacity augmentation of NW-1 between Haldia and Allahabad (1620 km), has been initiated with assistance from the World Bank at an estimated cost of Rs. 4200 crores. The project, inter-alia envisages three multi-modal terminals with rail and road connectivity at Varanasi, Sahebganj and Haldia.
NW- 4 and 5 are yet to be made operational for which various studies/ developmental works are underway. Dredging of fairway and construction of temporary terminals has recently started in NW-5. In view of the importance of the inland water transport and its potential to be a supplementary mode of transport to rail and road networks, the Government has launched an ambitious plan of developing 106 more inland waterways identified in 24 States, for which a National Waterways Act, 2016 has been passed by the Parliament.
Q. 247. Discuss Indias emerging role for Cooperative Security and Military Intervention in the South China Sea.
China’s growing power and influence and its mounting military assertiveness are causing concern not only to India, but also to most other countries in the Indo-Pacific region.
Strategic Partnerships to meet the Challenge
China’s brazen violation of international norms in recent years, particularly its construction of military facilities on reclaimed islands in the South China Sea, and its growing military power, including maritime power, pose a growing strategic challenge to India and its strategic partners.
China senses the emergence of a security vacuum in the Indo-Pacific region and is rushing to fill it. It has also dropped the phrase “peaceful rise” while referring to its military and economic growth. It should be obvious to perceptive observers that China’s rise is unlikely to be entirely peaceful.
China’s rapid economic growth has been fairly uneven and non-inclusive. There is a deep sense of resentment against the leadership of the Communist Party for the denial of basic freedoms and rampant corruption. The discontentment simmering below the surface could boil over and lead to an uncontrollable spontaneous implosion. The crash of Chinese stock markets over a year ago may have provided the first glimpse of impending implosion.
Also, given its recent belligerence, China could behave irresponsibly somewhere in the Indo-Pacific region. It could decide to intervene militarily in the South China Sea, or to occupy one or more of the disputed Senkaku/ Diaoyu islands that are at present controlled by Japan. Or, it may opt to resolve territorial and boundary disputes with its neighbours through the use of military force.
Both the contingencies have a low probability of occurrence, but will be high impact events with widespread ramifications if either of them comes to pass. The US, which is the leading provider of security in the Indo-Pacific, and India, will need strong partners to deal with the fallout and to manage the consequences. Hence, the India-US strategic partnership makes eminent sense as a hedging strategy for both countries.
India has a long-standing territorial dispute with China. It has noted China’s growing military assertiveness in the region with consternation, especially China’s periodic deployment of PLA Navy submarines in the northern Indian Ocean. China has signed an agreement with Pakistan to invest US$ 46 billion to develop the CPEC from Xinjiang to Gwadar on the Makran Coast. Despite the fact that part of the CPEC will pass through POK, China has not consulted India.
Cooperative Security Framework
Though it will be a gradual and long-drawn process, a cooperative security framework may eventually emerge for peace and stability in the Indo-Pacific and for the security of the global commons – air space, space, cyber space and the sea-lanes of communication to enable the freedom of navigation and the free flow of trade. Together with the US and its other strategic partners, India must take the lead in establishing such a framework. If China is willing to join this security architecture, it should be welcomed.
The defence cooperation element of the Indo-US strategic partnership must be taken to the next higher trajectory to enable:
joint threat assessment;
contingency planning for joint operations;
sharing of intelligence;
simulations and table-top exercises – besides training exercises with troops;
coordination of command, control and communications; and,
planning for deployment and logistics support.
All of these activities will need to be undertaken in concert with other strategic partners such as Australia, Japan, Singapore, South Korea and Vietnam.
US normally point to India:
joining international counter-terrorism and counter-proliferation efforts;
upholding the rules and norms governing maritime trade;
providing help to the littoral states to meet their security needs;
helping to counter piracy and narcotics trafficking; and,
continuing to taking the lead in humanitarian and disaster relief (HADR) operations in the region.
These expectations are unexceptionable and India has already been contributing extensively to achieving these common goals.
Force Structure Necessary
India is gradually emerging as a dominant power in the Indo-Pacific and is preparing to discharge its regional responsibilities. In keeping with its rapidly growing strategic interests and regional responsibilities, India is likely to be increasingly willing to join its strategic partners to intervene militarily in its regional neighbourhood when the situation so demands. While India would prefer to do so with a clear mandate from the United Nations Security Council and under the UN flag, it may not be averse to joining ‘coalitions of the willing’ when its vital national interests are threatened and consensus in the Security Council proves hard to achieve.
Stemming from the need for contingency planning, particularly in support of its forces deployed for United Nations (UN) peace-keeping and peace-support duties and for limited power projection, India will need to raise and maintain in a permanent state of quick-reaction readiness adequate forces to participate in international coalitions in India’s area of strategic interest.
India’s area of strategic interest now extends from the South China Sea in the east to the Horn of Africa in the west. With the proposed rapid reaction capabilities in place, it will be clear to potential adversaries that India will not hesitate to intervene in conjunction with its strategic partners if its vital national interests are threatened.
Q. 246. Deen Dayal Antyodaya Yojana
Ans. What is DAY?
Deen Dayal Antyodaya Yojana - National Livelihoods Mission (NRLM) was launched by the Ministry of Rural Development (MoRD), Government of India in 2011.
The Mission aims at creating efficient and effective institutional platforms of the rural poor enabling them to increase household income through sustainable livelihood enhancements and improved access to financial services.
NRLM has set out with an agenda to cover 7 Crore rural poor households, across 600 districts, 6000 blocks, 2.5 lakh Gram Panchayats and 6 lakh villages in the country through self-managed Self Help Groups (SHGs).
In addition, the poor would be facilitated to achieve increased access to their rights, entitlements and public services, diversified risk and better social indicators of empowerment.
To reduce poverty by enabling the poor households to access gainful self-employment and skilled wage employment opportunities, resulting in appreciable improvement in their livelihoods on a sustainable basis, through building strong grassroots institutions of the poor.
Universal Social Mobilisation
At least one woman member from each identified rural poor household, is to be brought under the Self Help Group (SHG) network in a time bound manner.
Special emphasis is particularly on vulnerable communities such as manual scavengers, victims of human trafficking, Particularly Vulnerable Tribal Groups (PVTGs), Persons with Disabilities (PwDs) and bonded labour.
NRLM has devised special strategies to reach out to these communities and help them graduate out of poverty.
Participatory Identification of Poor (PIP)
The inclusion of the target group under NRLM is determined by a well-defined, transparent and equitable process of participatory identification of poor, at the level of the community.
All households identified as poor through the PIP process is the NRLM Target Group and is eligible for all the benefits under the programme.
Target Group is identified through the Participatory Identification of Poor (PIP) method. The NRLM Target Group (NTG) derived through the PIP is de-linked from the BPL.
NRLM works on both demand and supply sides of financial inclusion.
On the demand side, it promotes financial literacy among the poor and provides catalytic capital to the SHGs and their federations.
On the supply side, the Mission coordinates with the financial sector and encourages use of Information, Communication & Technology (ICT) based financial technologies, business correspondents and community facilitators like ‘Bank Mitras’.
It also works towards universal coverage of rural poor against risk of loss of life, health and assets. Further, it works on remittances, especially in areas where migration is endemic.
Livelihoods –NRLM focuses on stabilizing and promoting existing livelihood portfolio of the poor through its three pillars – ‘vulnerability reduction’ and ‘livelihoods enhancement’ through deepening/enhancing and expanding existing livelihoods options and tapping new opportunities in farm and non-farm sectors; ‘employment’ - building skills for the job market outside; and ‘enterprises’ - nurturing self-employed and entrepreneurs (for micro-enterprises).
Convergence and partnerships
Convergence: NRLM places a high emphasis on convergence with other programmes of the MoRD and other Central Ministries. Convergence is also sought with programmes of state governments for developing synergies directly or indirectly with institutions of the poor.
Partnerships with NGOs and other CSOs: NRLM has been proactively seeking partnerships with Non-Government Organizations (NGOs) and other Civil Society Organizations (CSOs), at two levels - strategic and implementation.
Linkages with PRIs: In view of the eminent roles of Panchayat Raj Institutions (PRIs), it is necessary to consciously structure and facilitates a mutually beneficial working relationship between Panchayats and institutions of the poor, particularly at the level of Village Panchayats.
National Rural Livelihoods Project (NRLP)
NRLP has been designed as a sub-set of NRLM to create ‘proof of concept’, build capacities of the Centre and States and create an enabling environment to facilitate all States and Union Territories to transit to the NRLM. NRLP would be implemented in 13 high poverty states accounting for about 90 percent of the rural poor in the country. Intensive livelihood investments would be made by the NRLP in 107 districts and 422 blocks of 13 states (Assam, Bihar, Chhattisgarh, Jharkhand, Gujarat, Maharashtra, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, West Bengal, Karnataka and Tamil Nadu). Distribution of project funds among the states would be based on inter-se poverty ratios.
Q. 245. Norms for NGOs seeking govt. funds
Draft guidelines outlining stringent regulations intended to enhance accountability of lakhs of NGOs and voluntary organisations receiving nearly Rs 1,000 crore of government grants every year were submitted by the Centre to the Supreme Court.
Organisations wanting to get government funds must register afresh online with Niti Aayog's `NGO-Darpan' portal giving details of past work, fund utilisation, yearly audit reports and key persons managing the NGO or VO.
Government would have the right to initiate criminal prosecution and blacklist an NGO for not meeting the deadline for completing a project for which grant was given or if money was misused.
The registration system should facilitate seamless operation of applicable provisions of the Income Tax Act and Foreign Contribution Regulation Act (FCRA) with respect to NGOs without the need for cumbersome processes, which create mutual distrust and scope for misuse.
Another provision mandates NGOs and their office-bearers to execute a bond, equivalent to the money received, promising to refund the amount with 10% interest if funds are misused or not used for the sanctioned purpose. The members of the executive committee of the organisation shall execute a bond in favour of the President of India, for the sanctioned amount in the prescribed format, binding themselves jointly and severally to the terms & conditions.
In the event of the grantee (NGOVO) failing to comply with the conditions or committing breach of the conditions of the bond, the signatories to the bond shall be jointly and severally liable to refund to the President of India, the whole or part amount of the grant with interest at the rate of 10% per annum thereon or the sum specified in the bond.
More than 33 lakh NGOs and VOs operated in India but less than 10% (3.07 lakh) filed audited accounts before the competent authority.
Q. 244. Aichi Biodiversity Targets
In the tenth meeting of the Conference of the Parties, held in 2010, in Nagoya, Aichi Prefecture, Japan, adopted a revised and updated Strategic Plan for Biodiversity, including the Aichi Biodiversity Targets, for the 2011-2020 period.
This plan provides an overarching framework on biodiversity, not only for the biodiversity-related conventions, but for the entire United Nations system and all other partners engaged in biodiversity management and policy development.
Parties agreed to translate this overarching international framework into revised and updated national biodiversity strategies and action plans within two years. Key elements
The rationale for the new plan is that biological diversity underpins ecosystem functioning and the provision of ecosystem services essential for human well-being.
It provides for food security, human health, the provision of clean air and water; it contributes to local livelihoods, and economic development, and is essential for the achievement of the Millennium Development Goals, including poverty reduction.
The conclusions of the third edition of the Global Biodiversity Outlook (published in 2010) analyses future biodiversity scenarios and reviews possible actions that might be taken to reduce future loss.
The mission of the new plan is to take effective and urgent action to halt the loss of biodiversity in order to ensure that by 2020 ecosystems are resilient and continue to provide essential services, thereby securing the planet's variety of life, and contributing to human well-being, and poverty eradication.
To ensure this, pressures on biodiversity are reduced, ecosystems are restored, biological resources are sustainably used and benefits arising out of utilization of genetic resources are shared in a fair and equitable manner; adequate financial resources are provided, capacities are enhanced, biodiversity issues and values mainstreamed, appropriate policies are effectively implemented, and decision-making is based on sound science and the precautionary approach."
Strategic Goals and the Aichi Biodiversity Targets
The new plan consists of five strategic goals, including twenty Aichi Biodiversity Targets. Strategic Goal A: Address the underlying causes of biodiversity loss by mainstreaming biodiversity across government and society. Strategic Goal B: Reduce the direct pressures on biodiversity and promote sustainable use. Strategic Goal C: To improve the status of biodiversity by safeguarding ecosystems, species and genetic diversity. Strategic Goal D: Enhance the benefits to all from biodiversity and ecosystem services. Strategic Goal E: Enhance implementation through participatory planning, knowledge management and capacity building.
The twenty headline Aichi Biodiversity Targets for 2015 or 2020 are organized under the five strategic goals. The goals and targets comprise both aspirations for achievement at the global level, and a flexible framework for the establishment of national or regional targets.
Parties are invited to set their own targets within this flexible framework, taking into account national needs and priorities, while also bearing in mind national contributions to the achievement of the global targets, and report thereon to the eleventh meeting of the Conference of the Parties.
Means for implementation: The Strategic Plan will be implemented primarily through activities at the national or subnational level, with supporting action at the regional and global levels.
Programmes of work: The thematic programmes of work of the Convention include: biodiversity of inland waters, marine and coastal biodiversity, agricultural biodiversity, forest biodiversity, biodiversity of dry and sub-humid lands, mountain biodiversity and island biodiversity. Together with the various cross-cutting issues, they provide detailed guidance on implementation of the Strategic Plan, and could also contribute to development and poverty reduction.
Q. 243. Why has India chosen to become a member of the International Energy Agency?
Ans. About IEA
The International Energy Agency (IEA) is a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis. The IEA was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market and other energy sectors.
India IEA relation
India joined the ranks of the IEA’s membership on March 30, 2017, albeit as a “Member by Associate”, it was seen inevitable, as one can’t talk about the future of the global energy markets without talking with India.
Long before India formally came on board the IEA, it had been engaging with the organisation. As early as 1998, India had signed the Declaration of Cooperation covering issues related to energy security and statistics.
The priority area for co-operation had been in oil and gas security and, to that end, the IEA and India’s Ministry for Petroleum and Natural Gas (Mo&PNG) signed a Memorandum of Understanding (MoU) in 2011, the first time that the IEA signed one with a key partner country in the area of emergency preparedness.
Interestingly, despite the cooperative nature of the relationship, India has been wary in committing itself to the IEA’s agenda.
The rationale then was that while interacting and cooperating with the IEA would allow India to maximise the strategic depth of its crude oil reserves as well as benefit from the IEA’s technical assistance in the energy sector, it would preclude it from taking on the obligations entailed by membership.
However, over time, and with the increasing move towards greater integration with the global energy market, the government has been interacting more frequently with the Agency, holding high level policy dialogues and workshops, joint research and analyses projects on energy sectors and markets, and exchanging technical know-how and information on future projections.
The IEA’s rationale for inviting non-OECD countries to join it is evident, as the agency benefits from the growing association of emerging economies by gaining access to their data and by adding to the oil stockpiles in the event of supply disruptions, which is its raison d’etre.
Second, given the IEA’s growing role in combating climate change, it allows the promotion of clean energy technologies in some of the world’s largest carbon emitters.
Advantages for India
Current government’s goal of not only providing access to electricity for the people under its “24x7 Power For All” initiative but also in meeting its climate change targets undertaken under the Paris Climate change agreement may be a giant leap.
Moreover, it will provide India the geopolitical platform to take the lead in climate and energy issues.
It would also give India an opportunity to become the voice of the developing world. International Solar Alliance (ISA) initiative in particular. For India, the ISA provides it with a platform to position itself as a leader on the world energy and environment stage.
However, given that the success of the initiative will depend largely on the number of countries coming on board, collaboration with other multilateral bodies, including the UN, IEA, IRENA (International Renewable Energy Agency) as well as corporates and industry, among others, is critical as these will assist in adapting the technologies needed by developing member countries to their specific conditions and economic realities.
Given that over 70 per cent of the world's energy consumption comes under the IEA umbrella, the association with the IEA will substantially increase India’s relevance in global energy governance. Finally, and more importantly, the IEA can encourage financial institutions to support India’s energy, particularly, its solar energy programme.
Q. 242. What do you know of Micro Units Development Refinance Agency (MUDRA) Bank?
Ans. Micro Units Development Refinance Agency (MUDRA) Bank is a refinance institution for micro-finance institutions. As on date, MUDRA is conceived not only as a refinance institution and but also as a regulator for the micro finance institutions (MFIs).
The MUDRA Bank is primarily be responsible for –
1) Laying down policy guidelines for micro/small enterprise financing business
2) Registration, Regulation, Accreditation /rating of MFI entities
3) Laying down responsible financing practices to ward off indebtedness and ensure proper client protection principles and methods of recovery
4) Development of standardized set of covenants governing last mile lending to micro/small enterprises
5) Promoting right technology solutions for the last mile
6) Formulating and running a Credit Guarantee scheme for providing guarantees to the loans which are being extended to micro enterprises
7) Creating a good architecture of Last Mile Credit Delivery to micro businesses under the scheme of Pradhan Mantri Mudra Yojana.
MUDRA has a corpus of Rs. 20,000 crores made available from the shortfalls of Priority Sector Lending. In addition, there is a credit guarantee corpus of Rs. 3,000 crores for guaranteeing loans being provided to the micro enterprises.
MUDRA Bank will refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana.
MUDRA Bank operates through regional level financing institutions who in turn connect with last mile lenders such as Micro Finance Institutions (MFIs), Small Banks, Primary Credit Cooperative Societies, Self Help Groups (SHGs), NBFC (other than MFI) and such other lending institutions.
In lending, MUDRA gives priority to enterprises set up by the under-privileged sections of the society particularly those from the scheduled caste / tribe (SC/ST) groups, first generation entrepreneurs and existing small businesses. There are estimated to be some 5.77 crore small business units in India 62% of these are owned by SC/ST/OBC.
MUDRA Bank will be operationalised as a subsidiary of Small Industries Development Bank of India (SIDBI).
Q. 241. Great Indian Bustard
The Great Indian Bustard is a bustard found in India and the adjoining regions of Pakistan. A large bird with a horizontal body and long bare legs, giving it an ostrich like appearance, this bird is among the heaviest of the flying birds. Once common on the dry plains of the Indian subcontinent, as few as 250 individuals were estimated in 2011 to survive and the species is critically endangered by hunting and loss of its habitat, which consists of large expanses of dry grassland and scrub. These birds are often found associated in the same habitat as blackbuck. It is protected under Wildlife Protection Act 1972 of India. In India, the bird was historically found in Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Odisha, Andhra Pradesh, Rajasthan, Gujarat, Maharashtra, Karnataka and Tamil Nadu. Today the bustard is restricted to isolated pockets in Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Madhya Pradesh and Rajasthan (shared with Pakistan).
Great Indian bustards make local movements but these are not well understood although it is known that populations disperse after the monsoons.
The habitat where it is most often found is arid and semi-arid grasslands, open country with thorn scrub, tall grass interspersed with cultivation. It avoids irrigated areas. The major areas where they are known to breed are in central and western India and eastern Pakistan. The dry semi-desert regions where it was found in parts of Rajasthan has been altered by irrigation canals that have transformed the region into an intensively farmed area.
The Rajasthan government will set up a captive breeding centre for the great Indian bustard in an attempt to boost the wild population of the country's most critically endangered bird. The task of conservation will be taken up through two facilities in Kota and Jaisalmer districts. This will be the first such facility in the country aimed at saving the bird, which is the State bird of Rajasthan. Its last remnant wild population of about 90 in Rajasthan accounts for 95% of the total world population. The captive breeding centre will come up at Sorsan in Kota district, while a hatchery will be set up at Mokhala in Jaisalmer district in the next one year. Wildlife Institute of India (WII) is its scientific arm. For the breeding centre, the comparatively moist habitat of Sorsan has been selected. The region has better rainfall, besides forest land, and it was home to the bustards until two decades ago. After the chicks are raised, they would be transported to the desert for reintroduction in the wild.
Q. 240. HRIDAY
National Heritage City Development and Augmentation Yojana (HRIDAY) was launched on 21 January 2015 with the aim of bringing together urban planning, economic growth and heritage conservation in an inclusive manner to preserve the heritage character of each Heritage City. The Scheme shall support development of core heritage infrastructure projects including revitalization of linked urban infrastructure for heritage assets such as monuments, Ghats, temples etc. along with reviving certain intangible assets. These initiatives shall include development of sanitation facilities, roads, public transportation & parking, citizen services, information kiosks etc.With a duration of 4 years (completing in November 2018) and a total outlay of â‚¹500 crore , the Scheme is set to be implemented in 12 identified Cities namely, Ajmer, Amaravati, Amritsar, Badami, Dwarka, Gaya, Kanchipuram,Mathura, Puri, Varanasi, Velankanni and Warangal.
Q. 239. Recent legislative and regulatory measures to boost investor interest
Ans. In the recent past, India has embarked upon a number of legislative and regulatory measures that are certain to create a positive impact on the investment climate prevailing in the country and capable of boosting the confidence of investors.
Some key measures include:
Insolvency and Bankruptcy Code, 2016
The recent enactment of a comprehensive legislation relating to insolvency of corporates, firms and individuals has been a much awaited move.
The Insolvency and Bankruptcy Code, 2016 (IBC) lays down a resolution process that is time bound and undertaken by professionals.
It creates an institutional mechanism for insolvency resolution process for businesses operated by companies, individuals or any other entities, either by coming up with a viable survival mechanism or by ensuring their prompt liquidation.
Through this enactment, Parliament has codified the laws governing insolvency and bankruptcy of both corporates and individuals, which were spread over a number of legislations.
The Financial Resolution and Deposit Insurance Bill, 2016 (Draft)
The IBC 2016, does not provide for resolution of corporates providing financial services.
Recently, a draft Bill for this purpose has been recommended by a working group constituted by the Centre and it aims to establish a framework to carry out the resolution of certain categories of financial service providers in distress and to provide deposit insurance to consumers of certain categories of financial services.
The draft Bill not only consolidates the resolution provisions presently scattered in different statutes, but also introduces new requirements like classification of financial service providers into various categories of risk to viability, submission of resolution/restoration plans, etc. and new methods for resolution, on the lines of prevalent international practices.
The overall mechanism contemplated under the Bill would certainly bring in more clarity in terms of the rights of investors in the event of resolution of the investee financial service provider and is expected to improve investor confidence in the market.
SARFAESI Act and DRT Act
Slow pace of recovery of financial debts has been imposing considerable strain on the financial position of the lenders, thus raising concerns for any investor of such lenders.
Specialised laws establishing Debt Recovery Tribunals (DRTs) and empowering secured creditors to enforce security interest without the intervention of court, have been in vogue for several years now. While, such mechanisms have definitely facilitated faster recovery, much more needs to be done.
Some of the changes made with respect to the functioning of DRTs are:
Stricter time lines for filing of written statement, conclusion of hearings, etc. to expedite adjudication
Filing of recovery application, documents and written statements in electronic form
Uniform procedure for conduct of proceedings
Q. 238. Malegam panel proposes 24 % cap on interest rate on MFI loans
Aimed at reviving the crisis- ridden micro finance sector, a Reserve Bank of India Committee suggested that micro finance institutions (MFIs) be allowed to charge a maximum interest of 24 per cent on small loans which cannot exceed Rs. 25,000.
The committee, headed by Reserve Bank's Central Board Director Y. H. Malegam, also pitched for creation of a separate category of non-banking financial companies (NBFC-MFI) for the micro finance sector.
The panel also said small loans of up to Rs. 25,000 could be given to families having an income up to Rs. 50,000 per annum. On repayment, the borrowers should be given the option of weekly or fortnightly or monthly return of the loan.
At least 75 per cent of loans extended by MFIs should be for income generation purposes.
Borrower cannot take loans from more than two MFIs.
The decisions taken by the State government to regulate MFIs slowed down the loan recovery process hitting the financial health of the sector. It was further aggravated by the reluctance of banks to support MFIs.
To deal with the problem, the RBI had relaxed provisioning norms to enable banks to continue lending to the cash-strapped MFIs.
About the regulations of MFIs: it should be done by the National Bank for Agriculture and Rural Development (NABARD) in close coordination with the RBI.
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