Pradhan Mantri Shram-Yogi Maandhan Yojana
Announced in the budget.
Pradhan Mantri Shram-Yogi Maandhan Yojana- key facts:
It is a scheme for the unorganised sector workers with monthly income upto Rs 15,000. A sum of Rs 500 crore has been allocated for the Scheme.
This scheme shall provide an assured monthly pension of Rs 3,000 from the age of 60 years on a monthly contribution of a small affordable amount during their working age.
An unorganised sector worker joining pension yojana at the age of 29 years will have to contribute only Rs 100 per month till the age of 60 years. A worker joining the pension yojana at 18 years, will have to contribute as little as Rs 55 per month only.
The Government will deposit equal matching share in the pension account of the worker every month.
Need and Significance of the scheme:
It is expected that at least 10 crore labourers and workers in the unorganised sector will avail the benefit of the scheme within next five years making it one of the largest pension schemes of the world.
Half of India’s GDP comes from the sweat and toil of 42 crore workers in the unorganised sector working as street vendors, rickshaw pullers, construction workers, rag pickers, agricultural workers, beedi workers, handloom, leather and in numerous other similar occupations. The Government must provide them comprehensive social security coverage for their old age.
Source: The Hindu
New panel for welfare of nomadic communities
The Centre will form a welfare panel for nomadic, semi-nomadic and de-notified communities. Announced in Budget.
A Welfare Development Board will also be set up under the Ministry of Social Justice and Empowerment to design and implement programmes for these hard-to-reach communities.
The committee will be set up under NITI Aayog to complete the task of identifying de-notified, nomadic and semi-nomadic communities.
The committee will follow up on the work of the Renke Commission and the Idate Commission.
Denotified and Nomadic Tribes:
The Denotified Tribes are communities that were listed or notified as ‘born criminal ‘by the British under a number of laws. The term, ‘Denotified and Nomadic Tribes’, can be traced to the Criminal Tribes Act (CTA) of 1871.
The colonial government notified nearly 200 tribal communities to be hereditary criminals, cementing their societal identity as outcasts and subjecting them to constant harassment by the administration.
Forest laws that came into force from the mid-nineteenth century onwards deprived a large number of communities of their traditional rights of hunting and gathering. The new laws criminalised their very source of livelihood when it practiced.
When the forests were cleared by the British for commercial use and forest communities asked to contribute to labour, some communities resisted and were declared ‘criminal’.
The British thought that communities had lost their legitimate means of livelihood, they must have been living by indulging in criminal activities due to arrival of road and railway networks. After India gained Independence, these tribes were ‘de-notified’ from the list of Criminal Tribes.
Idate commission Recommendations:
Denotified Nomadic and Semi-Nomadic Tribes are poorest of the poor, most marginalised and most downtrodden communities who are subject to social stigma, atrocity and exclusion. Therefore, the commission has recommended giving protection to Denotified Nomadic and Semi-Nomadic Tribes the communities under the Atrocities Act.
The government should provide strong legal protections and constitutional safeguards, including the extension of the Protection of Atrocities Act to the NT/ DNT/ SNT communities by creating a separate Third schedule as Scheduled De-notified, Nomadic and Semi-Nomadic Tribes.
Noting that all that the Centre has done so far are “symbolic reparations”, the Idate Commission advocated for release of 2011 caste census, which is yet to be made public, at least on the DT/ NT/ SNT community, so that policies can be made specifically for these communities.
Source: The Hindu
Best Practices in Budget survey
The Transparency International conducted a survey to analyse the best practices followed by the states in the Budget Formulation.
The survey was based on 4 parameters which include public disclosure, budgetary process, post-budget fiscal management and efforts to make the budget more transparent and citizen-friendly.
Highlights of the Survey:
The top slot in the survey was occupied by Assam. Assam was followed by Andhra Pradesh and Odisha.
Meghalaya, Manipur and Punjab figured in the bottom list.
Assam is the only state out of the 29 states and 2 UTs, which has published a Citizens Budget in the public domain. Also, the government of Assam is the only government that has conducted budget awareness campaigns across 17 districts.
An international non-governmental organization based in Berlin, Germany.
Founded in 1993 by a group of individuals who decided to take up a stance against corruption.
The Corruption Perception Index is the most widely used indicator of corruption worldwide.
Source: The Hindu
INSTEX – Instrument In Support Of Trade Exchanges
It is a payment mechanism being setup by the European Union to secure trade with Iran and skirt US sanctions after Washington pulled out of the landmark nuclear deal last May.
Key features of INSTEX:
INSTEX will allow trade between the EU and Iran without relying on direct financial transactions.
INSTEX is registered at Paris with an initial 3,000 Euros in the capital and a supervisory board with members from France and Germany and chaired by the UK.
It is a project of the governments of France, Germany and Britain and will receive the formal endorsement of all 28 EU members.
It will initially be used for non-sanctionable trade, including humanitarian goods such as medicine, food and medical devices.
This mechanism is the first concrete step by the EU to counter Trump’s unilateral decision to withdraw from the nuclear deal.
The launching of INSTEX is not only a matter of Iran-EU relations but also embodies a new approach by the bloc towards US policies. It “becomes an opportunity when it’s understood as an experiment and as part of a bigger project to strengthen EU economic power.
How has the US reacted?
It has warned EU that any attempt to evade its “maximum pressure” campaign on Iran would be subject to stiff penalties.
Intermediate-Range Nuclear Forces (INF) Treaty
The U.S is suspending its obligations under the Intermediate-Range Nuclear Forces (INF) Treaty effective February 2 and will withdraw from the treaty in six months.
US in early December announced that it would suspend its obligations under the INF treaty by Feb. 2, citing Russian “cheating,” unless Moscow comes into compliance with the terms of the pact. The U.S. government says the new Russian missile violates provisions of the pact that ban production, testing and deployment of land-based cruise and ballistic missiles with a range of 310 to 3,400 miles.
What would happen in the absence of treaty?
It is unclear what INF-prohibited systems the United States could deploy to Europe or Asia in the near term. The U.S. military has not developed any land-based missiles within the prohibited ranges for decades and has only just started funding a new ground-launched cruise missile to match the 9M729.
Moscow is in a very different position and could rapidly expand deployment. The number of operational 9M729 missiles has been quite limited, but released from its official obligations under the treaty, Moscow could deploy more units rapidly.
Russia could also effectively reclassify the RS-26 Rubezh, an experimental system that has been tested just above the INF Treaty’s 5,500-kilometer limit. To avoid violating the INF, Russian officials previously described the RS-26 as an intercontinental ballistic missile. However, it could form the basis for a missile of a slightly shorter range if Moscow wished to boost its INF forces — without counting it under the U.S.-Russian New Strategic Arms Reduction Treaty, or New START, governing longer-range systems.
This move is also likely to undermine the 2010 New START treaty governing U.S. and Russian long-range nuclear systems. The INF Treaty’s demise will undercut New START by reopening questions on the relationship between intermediate and strategic systems that have been resolved for 30 years by the elimination of ground-based, intermediate-range missiles.
Intermediate-Range Nuclear Forces Treaty:
The Intermediate-Range Nuclear Forces Treaty (INF Treaty, formally Treaty Between the United States of America and the Union of Soviet Socialist Republics on the Elimination of Their Intermediate-Range and Shorter-Range Missiles) is a 1987 arms control agreement between the United States and the Soviet Union.
Under the INF Treaty, the U.S. and the U.S.S.R. agreed to eliminate within three years all ground-launched-missiles of 500-5,500 km range and not to develop, produce or deploy these in future.
The U.S. destroyed 846 Pershing IIs and Ground Launched Cruise Missiles (GLCMs) and the U.S.S.R., 1,846 missiles (SS-4s, SS-5s and SS-20s), along with its support facilities.
Importance of the Intermediate Nuclear Forces (INF) Treaty in U.S.-Russia relations:
Under the Treaty, the two parties agreed that a whole important class of nuclear weapons would be removed from Europe, and only tactical nuclear weapons (TNW) or short-range missiles mostly deployed on the territory of Germany would remain.
The INF Treaty for years served to mitigate fears of both parties in relation to possibility of military escalation, operational miscalculation, and helping to shift the logic of MAD [mutually assured destruction] to the higher “more sensitive” political level.
Source: The Hindu
The Reserve Bank of India (RBI) has lifted the Prompt Corrective Action (PCA) framework operational curbs on Bank of India (BoI), Bank of Maharashtra (BoM) and Oriental Bank of Commerce (OBC).
The PCA restrictions were lifted after these banks provided a written commitment that they would comply with the norms of minimum regulatory capital, net NPAs (Non-performing Assets) and leverage ratio on an ongoing basis. These Banks have also apprised RBI of the structural and systemic improvements they have put in place.
What is PCA?
PCA norms allow the regulator to place certain restrictions such as halting branch expansion and stopping dividend payment. It can even cap a bank’s lending limit to one entity or sector. Other corrective action that can be imposed on banks include special audit, restructuring operations and activation of recovery plan. Banks’ promoters can be asked to bring in new management, too. The RBI can also supersede the bank’s board, under PCA.
When is PCA invoked?
The PCA is invoked when certain risk thresholds are breached. There are three risk thresholds which are based on certain levels of asset quality, profitability, capital and the like. The third such threshold, which is maximum tolerance limit, sets net NPA at over 12% and negative return on assets for four consecutive years.
What are the types of restrictions?
There are two type of restrictions, mandatory and discretionary. Restrictions on dividend, branch expansion, directors compensation, are mandatory while discretionary restrictions could include curbs on lending and deposit. In the cases of two banks where PCA was invoked after the revised guidelines were issued — IDBI Bank and UCO Bank — only mandatory restrictions were imposed. Both the banks breached risk threshold 2.
What will a bank do if PCA is triggered?
Banks are not allowed to renew or access costly deposits or take steps to increase their fee-based income. Banks will also have to launch a special drive to reduce the stock of NPAs and contain generation of fresh NPAs. They will also not be allowed to enter into new lines of business. RBI will also impose restrictions on the bank on borrowings from interbank market.
Small and medium enterprises will have to bear the brunt due to this move by RBI. Since the PCA framework restricts the amount of loans banks can extend, this will definitely put pressure on credit being made available to companies especially the MSMEs.
Large companies have access to the corporate bond market so they may not be impacted immediately. It has been predicted that if more state-owned banks are brought under PCA, it will impact the credit availability for the MSME segment.
Source: The Hindu
Pradhan Mantri Kisan Samman Nidhi
To provide an assured income support to the small and marginal farmers, the Government is launching the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN).
About Pradhan Mantri Kisan Samman Nidhi:
Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs. 6,000 per year.
This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal installments of Rs. 2,000 each.
Around 12 crore small and marginal farmer families are expected to benefit from this. It would not only provide assured supplemental income to the most vulnerable farmer families, but would also meet their emergent needs especially before the harvest season. It would pave the way for the farmers to earn and live a respectable living.
Source: The Hindu
New e-commerce policy comes into effect
India’s new e-commerce policy came into effect on February 1, 2019. A new set of policy rules had been formed for the e-commerce companies. DIPP gave them a 60-day window period for aligning themselves to the government’s modified foreign direct investment (FDI) rules.
Key Highlights of the new policy:
Bar online retailers from selling products through vendors in which they have an equity interest.
Also bars them from entering into exclusive deals with brands for selling products only on their platforms.
All online retailers will be required to maintain a level playing field for all the vendors selling their products on the platform, and it shall not affect the sale prices of goods in any manner.
Disallows e-commerce players to control the inventory of the vendors. Any such ownership over the inventory will convert it into inventory based model from marketplace based model, which is not entitled to FDI.
Under the new rules, the e-commerce retailer shall be deemed to own the inventory of a vendor if over 25 per cent of the purchases of such a vendor are through it.
Restricts marketplaces from influencing prices in a bid to curb deep discounting. With this, special offers like cashback, extended warranties, faster deliveries to some brands will be prohibited, with the view to provide a level playing field.
The key objective behind the revising the FDI rules for the e-commerce giants is to level the playing field in the retail space, as heavy discounting on online retail sites was causing heavy losses to the small and medium brick and mortar stores.
Expected impacts and outcomes:
The policy will impact global e-commerce players like Walmart-owned Flipkart and Amazon, who would have to change their business structures to comply with the new policy, which was announced late in December.
The new norms could take a massive toll on the earnings of Amazon and Flipkart. Earlier this month, both the e-commerce companies had asked that the deadline be extended by 4 and 6 months respectively, leading to traders’ opposition.
Source: The Hindu
Rashtriya Gokul Mission
The Finance Minister Piyush Goyal announced the allotment of ₹750 crore to the Rashtriya Gokul Mission (RGM). The objective is to get native breeds to produce more milk, be more fecund, and to raise the quality of Indian cows and bulls to eventually outdo Jerseys and Holsteins.
About Rashtriya Gokul Mission:
To conserve and develop indigenous bovine breeds, government has launched ‘Rashtriya Gokul Mission’ under the National Programme for Bovine Breeding and Dairy Development (NPBBD).
The Mission is being implemented with the objectives to: a) development and conservation of indigenous breeds b) undertake breed improvement programme for indigenous cattle breeds so as to improve the genetic makeup and increase the stock; c) enhance milk production and productivity; d) upgrade nondescript cattle using elite indigenous breeds like Gir, Sahiwal, Rathi, Deoni, Tharparkar, Red Sindhi and e) distribute disease free high genetic merit bulls for natural service.
Rashtriya Gokul Mission will be implemented through the “State Implementing Agency (SIA viz Livestock Development Boards). State Gauseva Ayogs will be given the mandate to sponsor proposals to the SIA’s (LDB’s) and monitor implementation of the sponsored proposal. All Agencies having a role in indigenous cattle development will be the “Participating Agencies” like CFSPTI, CCBFs, ICAR, Universities, Colleges, NGO’s, Cooperative Societies and Gaushalas with best germplasm.
Funds under the scheme will be allocated for the establishment of Integrated Indigenous Cattle Centres viz “Gokul Gram”.
Gokul Grams will be established in: i) the native breeding tracts and ii) near metropolitan cities for housing the urban cattle.
Gokul Gram will act as Centres for development of Indigenous Breeds and a dependable source for supply of high genetic breeding stock to the farmers in the breeding tract.
The Gokul Gram will be self sustaining and will generate economic resources from sale of A2 milk (A2 milkis cow’s milk that mostly lacks a form of β-casein proteins called A1 and instead has mostly the A2 form), organic manure, vermi-composting, urine distillates, and production of electricity from bio gas for in house consumption and sale of animal products.
The Gokul Gram will also function as state of the art in situ training centre for Farmers, Breeders and MAITRI’s.
The Gokul Gram will maintain milch and unproductive animals in the ratio of 60:40 and will have the capacity to maintain about 1000 animals. Nutritional requirements of the animals will be provided in the Gokul Gram through in house fodder production.
Gokul Gram will also be set up near to metropolitan cities for managing urban cattle. Metropolitan Gokul Gram will focus on genetic upgradation of urban cattle.
Source: The Hindu
An international conference and exhibition of rare artefacts about the life and legacy of 8th century Buddhist sage Guru Padmasambhava is being held in New Delhi.
The conference is titled “Life and Legacy of Guru Padmasambhava”.
The conference also celebrates the 50 years of diplomatic relations between India and Bhutan.
Key facts on Guru Padmasambhava:
Guru Padmasambhava is known as the Second Buddha because he played a seminal role in spreading Buddhism and Buddhist teachings across the Himalayan region including Northeast India, Nepal, Bhutan and Tibet.
In Tibetan, Guru Padmasambhava is generally referred to as Guru Rinpoche, which means “precious master.”
He undertook many travels across India, Bhutan, Tibet and Nepal.
Thangka paintings, sculptures and photographs portray the life and teachings of the Guru.
Union Budget 2019-20- Highlights
Finance Minister Piyush Goyal presented the Interim Budget 2019-20 on February 1, 2019. It was the last Budget of the present Government before the 2019 Lok Sabha elections. An interim budget is usually passed by the Lok Sabha without discussion.
Interim Budget 2019 proposed a 10-point vision for 2030:
Individual tax payers with taxable income of up to Rs 5 lakh will get full tax rebate from now on.
Those earning Rs 6.5 lakh will not have to pay tax, if they invested in specified savings such as PF, PPF, etc.
However, the tax slabs will remain unchanged.
This move will benefit around 3 crore middle class tax payers.
For salaried persons, Standard Deduction is being raised from the current Rs 40,000 to Rs 50,000.
The Tax Deducted at Source (TDS) on fixed deposits and postal deposits will be exempted for interest earned up to Rs 40,000 from Rs 10,000 currently.
The rent up to Rs 2.4 lakh will be exempted from TDS.
The benefit of capital gains of up to Rs 2 crore will be increased to investment on two residential houses. This benefit can be availed only once in a lifetime.
The benefit of the section 80IBA of Income Tax Act will be extended for one more year for availing of the affordable housing.