Economics|Civilsdaily

WeshouldbecarefulabouthowwemeasureGDP:Rajan
NewGDPseries,ineffectforayearnow,hasbeencriticisedbyeconomists.
1.RBIGovernorhasraiseddoubtsoverthenewmethodologyusedtocalculatethecountrysgrossdomesticproduct(GDP).
2.Hecitedtheexampleoftwomotherswhobabysiteachotherskids,andsaidthereisariseineconomicactivityaseachpaystheother,butthenet
effectontheeconomyisquestionable.
3.ThecountrysGDPnumberswererevisedwiththebaseyearof201112fromtheearlier200405.
4.ThemethodologyofcalculatingGDPwaschangedasthenewmethodologytakesGDPatmarketpricesintoaccount,whichincludesindirect
taxesandexcludessubsidies.
5.Governorindicatedthatcountryneededpoliciestoincentivisejobcreationandruedthatwehavepoliciesdirectedtowardscapitalsubsidies
alone.
Centrehandpicks20smartcitiesforfirstphaseofplan
Ministrytosoonintroducecreditratingtoattractinvestors.
1.Thelistof20citiesthathavequalifiedtobuildsmartinfrastructurewithRs.200croreeachfromtheCentralgovernmentsfirstphaseoffunding.
2.TheMinistryhasgiventopratingtoBhubaneswarforitsrobustSmartCityplan.
3.Missionpromotesintegratedcityplanning,whereSwachhBharatMissionandAtalMissionforRejuvenationandUrbanTransformation
complementeachother.
4.TheCentralgovernmenthascreatedanoutsideagencynamedSpecialPurposeVehicle(SPV).
5.ThiswillbeheadedbyaCEO,andwillbegivenpowerstoexecutetheproposeddevelopmentsandprojects.
1.Indiaisintoaneraofmarketablesurplusbuttherearenobuyersforproduce.
2.Anxietyononionsandpulsesetc.aretheconsequencesoflopsidedfarmsupportprogrammes.
3.Theconversationonthefarmsectorneedstoradicallyshiftfromfocusingonfearsofinsufficientproductiontoissuesofnutritionandsafety.
4.Indiaisalreadyamongthelargestproducersoffoodgrain,pulses,sugarcane,teaetc.,eventhoughwelagbehindincropyields.

5.Differencesintheyieldsb/wfarmsandlabscanbebridgedbyimprovedextensionservices.
6.Productivitycanalsobeenhancedacrossthespectrumwithoutaddingextrainputs(andwithfewerseeds)ifwesimplyupgradesowing
machinery.
7.Farmerownershipofmachinerywillleadtodebt,serviceleasingwillleadtoprosperity.
TheIndianExpress
CentresetsupcommitteetofixBtCottonseedprices
Thegovernmentconstitutedacommitteetoexecuteitscottonpricecontrolorderthatwilldecidethepricefarmerspaytoseedcompanies.
1.9membercommitteehasadeadlineof31MarchtodecideontheMSPofgeneticallymodifiedBtcottonseeds.
2.Thecommitteeisslatedtomeetwithinaweekortwotodecidethemaximumsaleprice(MSP)ofcottonseeds,includingroyaltyfeesanddealers
margins.
3.Theagricultureministryon7DecemberissuedapricecontrolordertobringuniformityinBtcottonseedprices.
4.AsseveralstatessuchasMaharashtra,AndhraPradeshandTelanganahavebroughtinpricecontrolorders.
5.AtleastsixmillionfarmersgrowcottoninIndia,over95%ofwhichisgrownusingthetransgenicBttechnology.
6.Thecommitteewillbeheadedbythejointsecretary(seeds)intheministry,andwillhavetheagriculturesecretariesofTelanganaandGujaratas
members.
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RajasthanGovt.signsMoUtojoinUDAY
1.TheRajasthanGovernmentanditspowerdistributioncompaniesordiscomssignedapactwiththeCentre.
2.UndertheUjwalDiscomAssuranceYojana(UDAY)aimedatrelievingthedebtburdenofthemostindebteddiscomsinthecountry.
3.RajasthandiscomshaveatotaldebtofRs.80,500crorewhichis18.7percentofthecountrystotaldiscomdebtofRs.4.3lakhcrore.
4.ThissigningoftheMoUswithRajasthanisverysignificantbecausethestatesdiscomshavethelargestdebt.
5.Rajasthanwasthefirsttocometomeetuswhenwecametopowertohighlightthisproblem.
Indiatoinstallhotlinesat13airportstodealwithhijackings
Themoveisamongseveralbeingadoptedinthewakeofheightenedsecurityconcernsandincludenewguidelinesforpassengersandvisitors.
1.Indiasaviationministrywillinstallhotlinesin13importantairportstopluganycommunicationgapsintheeventaplaneishijacked.

2.Indiahaswitnessedaround6hijackingssinceindependence.
3.ExpertscitecommunicationgapsasthemainreasonwhynothingwasdonewhentheplanestoppedtorefuelinAmritsar.
4.Theairportsare:Delhi,Mumbai,Kolkata,Chennai,Hyderabad,Bengaluru,Trivandrum,Nagpur,Ahmedabad,Chandigarh,Jaipur,Lucknowand
Guwahati.
5.Theplanisthatthehijackedplanewillbedivertedtotheclosestairportquickly.
6.Instantcommunicationongroundsituationandpotentialdemandsofhijackersberelayedimmediatelytothecontrolrooms.
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OrganictagtoboostSikkimscardamomexports
Organicallygrownlargecardamommaybepricedhigherthanitsfertiliserfedcounterpartbuttheformerhasburgeoningpremiumclass
consumersabroad.

1.TheglobaldemandforlargecardamomgrowninIndiaisexpectedtorisewithSikkim,whichproducesachunkofthishighlyvaluedspice.
2.Theorganicallyraisedlargecardamom,initiativeunderMakeinIndiamission,aimstomakethecountryaglobalhubofindigenously
developedproducts.
3.Sikkim,whichgrowslargecardamomin17,000hectaresofland,produces4,000metrictonnes(90percentofthecountrysproduction)ofthe
spiceannually.
4.SpicesBoardhasateamof50oddemployeesworkinginSikkimtonotjustsustainorganicfarmingbutempowerthegrowerstoearnmorefrom
theirproduce.
5.TheSpicesBoardissettounveilaneplatformforitsfamedfortnightlyauctioninSikkimstraditionalspicemarketofSingtam.
Centrecallsforbridgingskillgapincivilaviationsector
Buildingarobustfundmechanismfortraining,creatinginfrastructureandimprovingtrainingprocess.

1.CivilAviationMinisterraisedconcernsoverthetremendousmismatchbetweentheskillsrequiredforthecivilaviationsectorandtheavailabilityof
suitablemanpower.
2.Stakeholdersshouldcometogethertoworkoutwaysforskilldevelopment,takingintoconsiderationtherequirementsandemployment
opportunitiesavailableinallsegmentsofthecivilaviationsector.
3.ThisincludesMaintenance,RepairandOperations(MRO)andcargo,bothwithinandoutsidethecountry.
4.ICRAManagementConsultancyServicesLtd.(IMaCS)hasrecommendedsettingupaNationalCivilAviationTrainingAuthorityandCargoand
GroundHandlingSectorSkillCouncil.
GovernmentmullsShomepanelsuggestionsontaxadministration
ThegovernmentisconsideringtherecommendationsoftheParthasarathiShomecommitteeaimedatsimplifyingtaxadministration.
1.AmongthekeyproposalsoftheTaxAdministrationReformCommission(TARC),headedbyDr.Shome,wasasuggestionthatIncomeTax
Returnformsshouldalsoincludewealthtaxdetails.
2.Thepanelhadmootedthatretrospectiveamendmentstotaxlawsshouldbeavoided.
3.AsaprincipleandthatthepostofRevenueSecretarybeabolished.
4.OtherrecommendationswerefortheCBDTandCBECtobemerged.
5.FortheuseofPermanentAccountNumber(PAN)tobewidened.
Bengalteaindustryseesrayofhopeinministersvisit
ThestatehasmadeglobalheadlineswithreportsofstarvationdeathsinthegardensinNorthBengal.
1.Thestate,whichhasinitsfoldthefamedDarjeelingbrand,hassincelastyear,madeinternationalheadlineswithreportsofstarvationdeathsin
thegardensinNorthBengal.
2.Talkswithacrosssectionoftheindustryrevealed,thattheministerhasacceptedtheneedtoexaminePlantationLabourAct.
3.Thepossibilityofaskingworkerstoacceptaminimumwagestructurethatencompassesthebenefitsnowbeingextended,totheworkersunder
thePLA.
4.AsperlateststatisticsbetweenJanandOct2015productioninWestBengalislowerat274millionkgscomparedtoayearagofigure.
5.TheissueofhighcostsisplaguingtheorganisedindustrythroughouttheteaproducingregionsinAssam,WestBengalandtheSouth.
EthanoltobeunderPrioritySectorLending

PetroleumMinistryistoensurethatethanolproductionisbroughtundertheprioritysectorlendingnormbybanks.
1.Thiswouldencouragesugarmillstoinvestinaddingdistillerycapacity&ensurethattheycouldtakeloansforthisat23%lessthantheexisting
marketrates.
2.Centrehasplannedtoaugmentethanolstoragefacilities,sothatsugarmillscouldraiseoutputwithoutworryingaboutstorageand
transportation.
3.Ministryhassoughtanassurancefromthemillsthattheydproduceenoughethanoltoachieveafull5%blendingwithpetrol.
4.Governmentrulesmandate5%ethanolblendingwithpetrolformorethanadecadebutthetargethasneverbeenmet,duetodisagreement
overthepriceOMCswouldpaytomillers.
5.ProductionofethanolfromsugardistilleriesisthesecondbiggestpollutantoftheGangariver.
BusinessStan
MauritiustoexclusivelyofferBiofarmingTechnologytoIndia
VariousareasofcooperationinMSMESectorbetweenboththecountriesdiscussed.
1.FirstJointCommitteeMeetingbetweenIndiaandMauritiusforthecooperationinMSMEsectorwasheldsuccessfullyon21stJanuary2016.
2.Theissuesdiscussedforcooperationwereintheareasofcapacitybuildingthroughtrainingoftrainers,surveysonpotentialareas,andtrade
fairsexchangeofbusinessmissions,settingupofbusinessincubators,etc.
3.Itwasalsoagreedtoformulateanactionplanintheareaofcoir,khadiandhandicraftsectorsinadditiontotheaboveareas.
4.GovernmentofMauritiushasexclusivelyofferedtoIndiafortransferofbiofarmingtechnologyandalsoexchangeofcooperationinthehealth
sector.
PIB
PMOseeksindustryinputstospurgrowth
Theperformanceof8coresectorsinNovemberisworrying,withtheiroutputshrinking.
1.ThePMOhassoughtindustryrecommendationsonrevivingandsustainingthegrowthmomentuminthecoresectorsofmanufacturingand
infrastructure.
2.IndustryhadurgedfinanceministerJaitleytospurdomesticdemandintheBudgetinordertoreviveprivatesectorinvestments.
3.Tosustainthereformsprocessinspecificsectorsandassesspolicyissuesbeyondtheshorttermimperativeswhichcanbeaddressedinthe

Budget.
4.Thoughindustrialoutputhasgrownat3.9percentfromApriltoNovember2015,itremainsvolatile.
5.Aftersurging9.8percentinOctoberlastyear,theindexofindustrialproductionfellby3.2percentinNovemberitsworstperformancesince
October2011.
1.TheBSESensexhasplungedbelowthelevelwhenModisecuredastunningvictoryinelections.
2.RupeehasfallenbelowRs68tothedollarforthefirsttimesinceAugust2013(timeoftapertantrum)
3.Thisvolatilityowesmoretoglobalfactors,especiallyadeepeningChineseslowdown,collapseincommoditypricesandUSFednormalisation
ofitsmonetarypolicy.
4.USFederalReserveembarkingonanormalisationofitsmonetarypolicy.
5.Inrealeffectiveterm,rupeehasactuallystrengthensagainstabasketof6currenciesafteradjustingforinflationdifferential.
6.Weakeningagainstthedollaris,thus,asignofthelattersstrengtheninginanuncertainglobalenvironmentwherethegreenbackhasbecome
everyinvestorssafehavenasset.
7.Ourfocusshouldbeonimprovingthedomesticinvestmentenvironmentandpreservingmacroeconomicstability.
TheIndianExpress
1.Borrowersindulginginfraudtypicallytakeadvantageofthelackofinformationwithbanks.
2.Thus,RBIhasputinplaceacentralfraudregistryasearchabledatabasetohelpbanksdetectinstancesoffraudbyborrowersearlyon.
3.Fraudsof1L5CrwillbemonitoredbytherespectiveregionalofficeoftheRBIandabove5CrwillbemonitoredbytheCentralFraud
MonitoringCell(CFMC)ofRBI.
4.Giventheincessantriseinbadloanssincethelast2yearsandmostofthesearisingoutoffraudulentbehaviour.
5.RBIhasbeenurgingbankstodetectsuchcasesatanearlystagetoavoidabighitlaterontheirbooks.
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Cabinetnodforpowertariffpolicy
Inamajorshift,powercompaniesareallowedtopasscostsontoconsumersarisingoutofanychangesintaxes,cessesandleviesleviedon
them.

Theamendedpolicysaidthatthepowerregulatorhastocomeupwithaclearactionplantoensure247powersupplytoallconsumersby202122orearlier.

1.Topromoterenewableenergyandimprovetheeaseofdoingbusinessfordevelopersinthesector.
2.Byallowingpowergeneratorstoselltheirsurpluspoweronthepowerexchangeandsharingtheproceedswithstategovernment.
3.Theamendmentsarebasedon4Eselectricityforall,efficiencythatwillensureaffordabletariffs,theenvironment,andeaseofdoingbusiness
toattractgreaterinvestmentinthesector.
4.Thenewpolicyalsomandatesthatnointerstatetransmissionchargeswillbelevieduntilatimetobespecifiedbythegovernment.
5.Thisautomaticapprovalwasearlierlimitedto50percentcapacityexpansions.
6.Towardsthepowerforallinitiative,thepolicyenablesthecreationofmicrogridsinremotevillagesasyetunconnectedtothegrid.
TheFutureofElectricityinFastGrowingEconomies:WorldEconomicForum
TheWEFreportistitled:TheFutureofElectricityinFastGrowingEconomiesAttractingInvestmenttoProvideAffordable,Accessibleand

SustainablePower.
1.Indiaspowersectorisataninflectionpoint&itcalledfordevelopinganintegratedoutlookforthecountrysenergysector.
2.Mostofitselectricitydemandinthenext2decadeswillbemetbyburningfossilfuelsdespitehugeinvestmentsinrenewables.
3.Tariffsandratesforfuelpricing,coststhatarepassedthroughtocustomers,andpeakpowerpoliciesandpricingshouldallbetransparentand
consistentacrossstates.
4.Alignmentbetweenfederalandstategovernmentobjectivesiscritical,asIndiadevolvessignificantpowertothestates.
5.Indiasplantoadd175GWofcapacityfromrenewablesby2022cansucceedonlyiftherelevantstakeholdersactinwaysthatencourage
investmentinthispartofthesector.
6.Critically,regulatorsshouldensurelongtermtariffconsistencywithnoretroactivechangesorflipflops
BusinessStan
SikkimbecomesthefirstfullyorganicstateofIndia
1.Withapopulationofaround6lakhs,thestatealsoknownastheLandofFlower,willnowbeknownforitsOrganicinitiativetoo.
2.Overtheyearsaround75000hectaresoflandinthestatehasbeenconvertedintocertifiedorganicfarms.
3.FollowingtheguidelinesasprescribedbyNationalProgrammeforOrganicProduction.
4.Within1.24milliontonnesoforganicproductioninthecountryaround80000millionissuppliedbySikkimalone.
5.Withthis,SikkimnowjoinshandswiththeorganicstatesoftheforeigncountrieslikeCalifornia,Wisconsinamongothers.
TheEconomicTimes
Righttrack
Connectingthenortheasterncapitalsbyrailwillproduceenormousdividends.
1.FirstbroadgaugelocomotivehasrolledintothecapitalofTripuraonatrialrun,passengerserviceswillcommenceinMarch,andtravellerswill
beabletoridedirectlytoKolkata.
2.BusservicealreadyconnectsthetwocitiesbuttheroutecutsthroughBangladesh.Thisexcludestravellerswithoutpassports
3.Thisisthefirststepinalongoverdueproject,deadlinedfor2020,toconnectthecapitalsofallthenortheasternstatestotherestofIndia.
4.By2017,alinewillbelaidtoAkhaurainBangladesh,whichwillofferthroughconnectivityallthewaytoChittagong.
5.RailwaysystemhasservedIndiaasagreatunifier,bindingtogetherdiverseculturesinawebofsteel.
6.ThisprojectwillreducethepsychologicaldistanceswhichseemtosequestertheNortheast.

TheIndianExpress
1.Weareaccusedofnothavingtheadministrativecapacityofferretingoutwrongdoing.
2.DominantbankingcultureinIndiaworkslikeanetthatletsthebigdefaultersescapewithoutanypenaltiesbyrestructuringtheirdebts.
3.Amountrecoveredfromcasesdecidedin201314undertheDebtRecoveryTribunalswasjust13percentofthetotalamountatstake.
4.Worsestill,thesecaseswereestimatedtotake4years,insteadofthemandated6monthsunderthelaw,toresolve.
5.RBIinitiatedtheStrategicDebtRestructuring(SDR),whichallowscreditorbankstoconverttheirunpaidloanintoequityandtakeamajority
ownershipofthetroubledfirms.
6.Governmentcanhelpbypassingthelongpendingbankruptcycode.
7.Keyreasonswhylargedefaulterstendtogetawayisthattheycanseeklegalrecourse,whichisaverylongdrawnoutprocessinIndia.
TheIndianExpress
EaswarCommitteeReport
1.Thecommitteewassetupbythegovttochangedirecttaxlaws.
2.Ithassuggestedseveraltaxpayerfriendlymeasurestoimprovetheeaseofdoingbusiness,reducelitigationandacceleratethetaxdispute
resolution.
3.Nearly65%ofpersonalITcollectioninIndiawasthroughtaxdeductedatsource(TDS)andthusthereisneedofsimplification,enhancement
andrationalisationofthresholdlimits.
4.ItproposeddeferringthecontentiousIncomeComputationandDisclosureStandards(ICDS)provisionsandmakingtheprocessofrefundsfaster.
5.SomeoftheserecommendationsarelikelytobeapartoftheUnionbudget,whileothersmaycomethroughexecutiveaction.
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7thpaycommissionawardtobedelayed
1.Thedelayin7thpaycommissionawardwouldallowtokeepfiscaldeficitclosetothetargeted3.9%and3.5%ofGDPforthisfinancialyearand
thenextrespectively.
2.Withamassivefinancialresourcecrunchestimatedfor201617,thegovt.isplanningtodefertheimplementationofthe7thPayCommission
award.
3.TheaggregateBudgetnumberswouldbeimpossibletosustainonthebackofthecurrenttrendingrowthoftaxreceipts.
4.AccordingtoCAG,thetaxreceiptsarejust50%oftheBudgetestimatesafterthefirst8monthsoftheyear.
5.ThereisalsosluggishpaceofGDPgrowthandthealmostnegativedeflator.

BusinessStan
Convergenceofschemestoboostinvestmentsinagriculture
1.Aspergovtdata,publicinvestmentshowedlowergrowth(11.42%)thanprivateinvestment(19.81%)during200405to201213.
2.Currently,publicandprivateinvestmentsarefinancedthroughtwosources:
Loansfromfinancialinstitutionsbyindividualsandgovts.
Budgetarysupportfromthecentralandstategovts.
3.Toachievehighgrowthinagriculture,weneedtoincreasebothpublicandprivateinvestments.
4.Higherinvestmentwillleadtocreationofbackwardandforwardlinkages,besidessupportingproduction,processingandmarketing.
5.SincetheCentreandstateshavesimilarschemesforfinancinginvestments,thereisduplicationorconcentrationofactivitiesinparticularareas.
6.Therefore,thereisaneedtopoolthefinancialresourcesofthecentralandstategovts.
BusinessStan
PMinauguratesSikkimOrganicFestival2016
HeaddressedthePlenarySessionoftheNationalConferenceonSustainableAgricultureandFarmersWelfare,atGangtokinSikkim.
1.ThePrimeMinisterrecalledCoP21meetinginParis,wheretheideaofbacktobasicshadbeenraisedforcefully.
2.HesaidSikkimhasalreadyachievedthatfeatoflivinginharmonywithnature,andisthereforeamodelofdevelopmentwhichalsoprotects
nature.
3.ThePrimeMinistercomplimentedSikkimforGangtokbeingratedasthe10thcleanestcityinasurveyconductedbytheGovernmentofIndia.
4.ThePrimeMinisterexhortedStatestoidentifyadistrict,orevenablock,toconverttoa100percentorganicarea.
5.ThePrimeMinistersuggestedthatadigitalonlineplatformofprogressivefarmersshouldbedevelopedineachState.
PIB
Centrecallsforpracticalfiscaldecentralizationtostrengthenlocalbodies
1.TheCentrecalledforpracticalfiscaldecentralisationbyStateFinanceCommissions(FC)whiledistributingresourcesbetweenthestategovts
andlocalbodies.
2.The14thFChaveearmarkedmorethan2lakhcrorerupeesforGramPanchayatsduring201520.
3.Theprimaryemphasiswillbeonprovisionofbasicserviceslikeruralinfrastructure,sewage,sanitationandwatersupply.
4.TheFChasrecommendedgrantsintwopartsabasicgrantandaperformancegrant.

5.StateshavegenerallyassignedmostofthesefunctionstoPRIs,butthecorrespondingdevolutionoffundsandfunctionariesremainsacritical
issue.
6.Theownsourcerevenuesofthelocalbodiesbeingverysmall,theylargelydependonthedevolutionoffundsfromtheCentralandtheState
GovtsandFC.
PIB
1.First,thedebttoGDPratiowouldremainundercontrol.
2.Second,financeministerwouldmaintainhiscredibility.
3.Thedecisiontosticktothepathoftheannouncedfiscaltargetsisgoodnotjustinthelongrunbutalsointheshortterm.
4.Immediatelyitwillcreatespaceformonetarypolicyeasing
5.Unlike,say,inEurope,wherethereisnoscopeforcuttingthepolicyratethatisnearzero,inIndia,thereisamplescopetocutit.
6.Reductionintheinterestburdencouldpossiblypreventmorecompaniesfromgoingtowardsbankruptcy,thushelpingbanksandoverall
economy.
TheIndianExpress
Startandgo
StartupIndiaisoverdue.Butcreationofenablingpolicyenvironmentmustnotberestrictedtostartups.
1.Itpromisesswiftapprovalsforstartingenterprises,easierexits,taxandfiscalincentives,fasterregistrationofpatentsandprotectionof
intellectualpropertyrights.
2.Signalsapossibleendtotheinspectorraj.
3.Taxbreaksdohelpbutwhatismorecriticalisanenablingregulatoryandbusinessenvironmentthatwillfosterinnovationandhaveacascading
impactonentrepreneurship.
4.Fundingnowonoffercouldperhapsbedirectedmoretowardssegmentstoughtoraisecapitalinsuchasfoodprocessing,ratherthanmobile
basedapplicationsorecommercefirms.
5.Easingofrulesandcreationofaconducivepolicyenvironmentshouldnotberestrictedjusttostartups.Itshouldbeextendedtoall
businesses.
TheIndianExpress
Letsknowthecontroversyabout5/20rule

1.Accordingtothe5/20rule,allairlinesinIndiaarepermittedtoflyabroadonlyifithasfiveyearsofdomesticflyingexperienceandatleast20
aircraftinitsfleet.
2.Thisrulewasapprovedbythegovt.inDecember2004whenmanydecisionsweretakentoprotectnationalcarrierAirIndia.
3.TheUniongovtisevaluatingabolishingthe5/20rule,initsdraftcivilaviationpolicy.
4.Theprivateairlineswhichareallowedtoflyabroadhaveallopposedtheproposaltoabolishtheruleasitwillimpacttheirmarket.
5.However,thenewairlineslikeVistara&AirAsiaIndiaareinfavourofscrappingtherulewhichisrestrictingthemtoflytointernationalairportsfrom
India.
Caseforspecialenablingenvironmentforstartups
Smallentrepreneursfinditdifficulttonavigatethecomplexbureaucraticandregulatorymaze.
1.Startupsholdthepotentialofcreatingmorejobsatatimewhenthemanufacturingsectorisfacingaslump.
2.ThatmaylastlongergivenglobaleconomicprospectsandtheslowdowninChina,whichhasbeenoneoftheenginesofglobalgrowth.
3.Withgrowingautomation,themanufacturingsectormaynolongerbeinapositiontocreatejobs.
4.ThefactisthatthereisafundamentalproblemofdemandandtherealchallengefortheIndianeconomynowistofundseverallargeprojects
beitroads,highwaysorrailways.
5.Startupsarejobcreatorslikethelargenumberofselfemployedwhoformasignificantpartofthecountryslabourforce.
Custom
AirIndiachangesstandon5/20ruletoallowprivateairlinestoflyabroad
1.Inamajorshiftinitsstance,AirIndiahasdroppeditsresistancetoabolish5/20ruleforIndiancarrierstobeabletoflyabroad.
2.Thedraftcivilaviationpolicyhasbeendelayedmainlyduetothegovernmentsunclearstandoverthe5/20rule.
3.Thegovtisevaluating3optionskeepingtherule,completelydoingawaywithitorreplacingitwithacreditbasedsystem.
4.TheshiftinstandbyAIwillgivemoreroomtothegovttoabolishtheruletherebyhelpingVistaraandAirAsiaIndiatoflyabroad.
MUDRAnottoregulatemicrofinanceinstitutions:Govt
1.ThegovthassaidthattheRBIwouldcontinuetoregulateMFIsregisteredasNBFCswiththecentralbank.
2.MUDRABankwillregulatebanksonlyforthepurposeofMUDRAloaning.
3.MUDRALtdcurrentlyoperatesasanNBFCregisteredwiththeRBI,butrecentlygovt.approvedconversionofMUDRALtdintoMUDRASIDBI
Bank.

4.TheproposedBankwillalsooverseetheRs3,000croreCreditGuaranteeFundtofacilitatetheMUDRAscheme.
5.TheFundwillprovideinsuranceagainstdefaultonMUDRAloanstothemaximumextentof50%,therebyhelpingreducerisktakenbybanksand
financialinstitutions.
TheIndianExpress
SpaceXsuccesslaunchesspacestartupstonewheights
InvestorconfidencehasbeenbuoyedbythehistoriclandingofSpaceXsFalcon9,uprightandintact,onDecember21.

Itwasthefirsteversuccessfulrecoveryofareusablerocket.

1.SpaceXssuccessfullandingofareusablerocketboosterinDecember,2015.
2.Opensanewfrontierforcommercialspacestartupsbyofferingtremendouscostsavingsandattractingventurecapitalistswhoonceshiedaway
fromspatialventures.
3.Spacestartupsincludenanosatellitemakers,earthimagingandweathertrackingtechnologydevelopers.
4.SpaceX,foundedbyhightechentrepreneurElonMusk,hadonesuccessfulrocketlandingaftermultiplefailures,andmoreworktodo.
StartupIndiatobeunveiledtoday
Tomakeiteasierforsettingupnewventuresandclosingunviableones,besidesclearingregulatoryissuesthathamperaccesstofinance.

Around40SiliconValleyheavyweightsareexpectedtotakepartintheinauguralceremonyofStartUpIndialaunch.Photo:@DIPPGOI/Twitter

1.TheStartUpIndiamissionenvisagestechnologybusinessincubatorsandresearchparks.
2.HRDMinistryandDepartmentofS&Thaveagreedtopartnerinaninitiativetosetupover75suchstartupsupporthubsintheNITs,IIITs,the
IISERsandNIPERs.
3.ProgrammeincludeaStartupsandEntrepreneurshipLaw.
4.Googlewillbeoffering$15,000ofequityfundingforearlystagestartupsatasessioncalledLaunchpadAcceleratorwherestartupscanmake
livepresentationsabouttheirbusinessideas.
CanepricearrearscamedowntoRs2,700crfromRs.21,000cr
1.Themeasurestakenbythegovttoimproveliquiditypositionofsugarmillsenabledthemtoclearcanepriceduesoffarmers.
2.ThecanepricearrearswerereducedfromRs.21,000crtoaboutRs2,700cr.
3.Themeasuresincludedprovidingincentiveonrawsugarexport,extendedfinancialassistanceintheformofsoftloan.
4.ItalsoprovidedfixedremunerativepriceforsugarcaneandwaivedoffexcisedutyonethanolsuppliedunderEthanolBlendingProgram.
5.Recently,aproductionsubsidywasprovidedtosugarmillstooffsetcostofcaneandfacilitatetimelypaymentofcanepricedues.
PIB
IndiasignsaagreementwithWorldBankforWatershedProject.
1.TheGovtofIndiasignedaloanagreementwithWorldBankfortheNeeranchalNationalWatershedProject.
2.TheprojectwillbeimplementedbytheMinistryofRuralDevelopmentoverasixyearperiod(201621).
3.ItwillsupportthePradhanMantriKrishiSinchayiYojanainhydrologyandwatermanagement,agriculturalproductionsystems,capacity
buildingandmonitoringandevaluation.
4.Allthe29stateswhichimplementthewatershedprojectswillbenefitfromNeeranchal.
5.12%ofthewastelandareawillbetargetedthroughthisprojecttomakeabout336lakhhectaresoflandarable.
PIB
Startupsfortaxbreaks,singlewindowsystem
With4,200enterprises,IndiaalreadyranksthirdintheworldforthenumberofstartupsaftertheU.S.andtheU.K.

1.Simplifiedtaxstructure,easycomplianceprocessandsinglewindowsystemaresomeoftheissuesthatstartupsexpecttobeaddressed
throughthemuchawaitedStartupIndiapolicy.
2.Easeofdoingbusinessisimportantforanyenterprisebutcriticalforstartups.
3.Allentrepreneurslookforsinglewindowclearances,easeofdoingbusiness,incentivestodevelopregionsandclarityontaxationstructures.
4.Theprobleminmostcasesisnottheregulationbuttheredtapethatmakescompliancedifficultdespitebestintentions.
5.ManystartupsbegintheirjourneyhereinIndiabutquicklymoveabroadastheyareintimidatedbythecomplexityofregulationinIndia.
CabinetapprovesPradhanMantriFasalBimaYojana

1.TheUnionCabinethasapprovedthePradhanMantriFasalBimaYojana,apathbreakingschemeforfarmerswelfare.
2.Therewillbeauniformpremiumofonly2%tobepaidbyfarmersforallKharifcropsand1.5%forallRabicrops.
3.Thepremiumamountiscappedat5%forhorticultureandannualcommercialcrops.
4.Thepremiumratestobepaidbyfarmersareverylowandbalancepremiumwillbepaidbythegovttoprovidefullinsuredamounttothefarmers
againstcroplossonaccountofnaturalcalamities.
5.Thereisnoupperlimitongovtsubsidy,evenifbalancepremiumis90%,itwillbebornebythegovt.
6.ThegovtliabilityonpremiumsubsidywouldbesharedbytheCentralandStategovernmentsona50:50basis.
7.Smartphoneswillbeusedtocaptureanduploaddataofcropcuttingtoreducethedelaysinclaimpaymenttofarmers.
8.Thegovt.expectstheschemetohelpincreasetheinsurancecoverageto50%fromtheexistinglevelofabout2527%ofcroparea.
PIB
Agriproblemsandsolutions
1.From1999till2012,Indiasfarmingsectorhasexperiencedaboutthebestrecordofgrowth,productionandfarmerincome.
2.Indiasbestrecordsofproductivitylagothernationsbyalargemargin.
3.Duringthelasttwoagriculturalseasons,Indiasfarminghasbeendevastatedbyinclementweather.
4.Indianeedsanintegrated,managerialframeworkforagriculturestateledentrepreneurialrisktakingwithrespecttofarming
5.Theholisticplanshouldencompass5pillarstechnology,riskinstitutionsandfinancing,institutionsofgovernance,policyandskills,
6.Agriculturebeingastatesubject,developingaconsensuswiththestatesandexecutinganationalagendaisanurgentrequirement.
TheIndianExpress
Riseandfall
2datasetspointtotenuousnatureofIndiaseconomicrecovery.
1.First,industrialproduction(IIP)contractedinNovembertothelowestlevelinover4yearswithmanufacturingsectorespcapitalgoodsoutput
abarometerofinvestmenttosharemuchoftheblame.
2.CPIroseto5.6percentforDecember,thoughitremainswithintheRBIsJanuarytargetlevelof6percent.Themainreasonherewasthehigher
foodpriceinflation.
3.Datapaintsacontradictorypicture.Anaemicindustrialperformancewithrisinginflationratherthanfallinginflation,whichisnotthecase.
4.CPIcontinuestoberelativelyhighandsticky,despitethesharpfallincommoditypricesglobally,especiallycrude.
5.Challengesifthegovernmenttriestojumpstarttheeconomythroughhigherexpenditure,itwillworsenitsfiscaldeficit,resultinginincreased

inflationandputpressureontheRBItoraiseinterestrates.
6.IftheRBI,ontheotherhand,triestoreduceinterestratesinordertoincentiviseeconomicactivity,itmayfurtherweakenitsgripovertheCPI
inflationtargetsithassetitself.
7.Qualityofitsexpenditureiskey.
8.Governmentmustringfencecapitalexpenditureandrestartprivatecapexcycle.
9.ReachingouttoruralIndia,wheredemandhascollapsed.
TheIndianExpress
Maharashtrasaw3,228farmersuicidesin2015
With610deathsinjusttwomonths,Staterecordshighesteversuicidesbyfarmers.
1.DataobtainedfromthegovernmentshowsVidarbhawastheworsthitlastyear,witharound1,541farmersfromAmaravatiandNagpur
divisioncommittingsuicides.
2.Packageswillnolongerworkforfarmersandthegovernmentseemstobemissingthispointcompletely.
3.Thereisaneedoffarmerorientedpolicyandnotpackages.
4.PMModilaunchedthePMCropInsuranceScheme,whichassurescoveringover50%ofthefarmersinthecoming3years.
5.Underthisscheme,90%premiummoneywillbepaidbytheCentreandnotjustthefullygrowncropbuteventhestemwillbeinsured.
Powersector'sdemandsfromupcomingbudget
TheoverallimpactofpresenttaxationregimeatbothCentralandstatelevelsleadstohigherpriceofpower.
1.TheinclusionofpowerandcoalsectorsinGSTregimewillresultinloweringofbulkpower,retailtariffandsupporttheMakeInIndia.
2.Inclusionofpower,coalandnaturalgasinGSTregimetosubsumemultipletaxesandtherebyreducethecostofpowerprojectsandtheper
unittariff.
3.InfrastructureindustrystatustotheT&Dsectorsothatallrelatedtaxbenefitscanbeavailed.
4.EventhoughgenerationisexemptfromCENVAT,exciseandVAT,taxesonpowergenerationequipmentandotherinputsremainembeddedinthe
costofpower.
BusinessStan
StartUpIndiaschemestofinallytakeoff

TheSETUschemesresourceswouldbedevotedtostrengtheningincubatorsandsettinguptinkeringlabswhereideascanbeshapedinto
prototypesbeforetheyareripeforfunding.
1.ThegovernmentcanfinallystartdeployingfundsfromtheSelfEmploymentandTalentUtilisation(SETU)schemeandtheAtalInnovation
Mission(AIM).
2.Topromotestartupsandscientificresearch,afterover10monthsofspadework.
3.AIMwouldfocusoninvitingaspiringentrepreneurstosolveIndiascontemporarysocioeconomicproblemsviagrandchallenges.
4.Thatoffersubstantialawardstoincubateandscaleupwinningideas.
5.Anoverarchingsupervisorybodywithabout10membersisbeingformedtooverseetheallocationoffundsundertheschemestolineministries.
PartnershipSummitAndhraPradesh
Dealscoveringagamutofsectorswerealsosignedretail,steelandgas,amongothers,andpledgedpolicychangesthatwouldensureease
ofdoingbusiness.
1.FirsteverretailpolicybyastateinIndiathatmakesiteasierforretailerstodobusinessinthestate.
2.Itproposessingledeskclearanceofbusinessplans,letsstoresstayopenlonger.
3.Makesiteasierforretailerstoacquirelandtobuildwarehouses,simplifieslabourlawsandrelaxesstockinglimitsforessentialcommodities.
4.ItisaimedatattractinginvestmentsworthRs.5,000croreandcreating20,000additionaljobsinthesectorby2020.
LiveMint
MinesandMinerals(DevelopmentandRegulation)(Amendment)Bill,2016
Thenewlawwillallowcompaniesthatreceivedmininglicenceswithouthavinggonethroughtheauctionprocesstotransfertheseleases.
1.The2015lawallowedtransferofminesallottedthroughauctionsbutwassilentoncaptivemininglicencesallottedinthepastonthebasisof
recommendationsbyascreeningcommittee.
2.ItwillmakeM&Aseasierinthesteelcement,andmetalssectors.
3.Itgivesacquirersrawmaterialsecurityandscopeforitsoptimaluseinenduseplantsinthecement,steelandaluminiumsectors.
4.Itwillalsohelpbanksliquidatesuchlicencesiftheyhavebeenmortgagedtoit..
LiveMint
Governmentlauncheswebbasedrailtrackmanagement

Inamajorsteptowardsdigitization,theIndianRailwayslaunchedawebbasedsystemtomonitortrackmaintenanceonarealtimebasisby
replacingmorethanalakhregistersrelatedtoit.
1.Thewebbasedmanagementoftrackmaintenancewillbeimplementedinallthe68divisionsoftheIndianRailways.
2.Variousactivitiessuchastrackinspection,monitoringandmaintenancewillnowbedoneontheeplatform.
3.UnionRailwaysMinisterSureshPrabhutermedthesystemascostandtimesaving,addingthatithassavedaboutRs1,100croreinazone.
4.ThesystemwillgivealertsthroughSMSandemailstotheconcernedofficialsintheRailways.
Let'sknowaboutDefenceAcquisitionCouncil(DAC)?
1.TheGovernmenthassetupaDefenceAcquisitionCouncilheadedbytheRakshaMantrifordecisionmakinginregardtothetotalityofthenew
planningprocess.
2.WhichinteraliainvolvesaccordinginprincipleapprovalofCapitalAcquisitionsinthelongtermperspectiveplanandforeachCapitalAcquisition
programme.
3.ThedecisionflowingfromtheDefenceAcquisitionCouncilaretobeimplementedbythefollowing3Boards
DefenceProcurementBoardheadedbytheDefenceSecretary
DefenceProductionBoardheadedbytheSecretary(DefenceProduction)
DefenceResearch&DevelopmentBoardheadedbytheSecretary(DefenceResearch&Development)
Custom
FilliptoMakeinIndiaindefencepurchases
1.AttemptingtostreamlinedefenceacquisitionsandgiveabigimpetustoindigenisationthroughtheMakeinIndiainitiative.
2.ThegovernmenthasapprovedmajorchangestotheDefenceProcurementProcedure(DPP).
3.NewcategorytopromotedomesticmanufacturingincludinggovernmentfundingforR&DandrecognitionoftheMSMEintechnology
development.
4.RecommendationsoftheexpertcommitteeheadedbyformerHomeSecretaryDhirendraSinghwereconsideredandmostofthemwere
approved.
5.TheDPP2016willhaveanewcategory,IndigenouslyDesigned,DevelopedandManufactured(IDDM)platforms,whichwillbethepriorityroute
forprocurements.

Let'sknowsomeprovisionsofproposedIndustrialRelationsBill
1.Theproposedbillsaysthattheworkersaffectedbyretrenchmentorfactoryclosurewillbereskilledbyemployers
2.Employerswillcontribute30dayswageofeveryretrenchedworkerimmediatelybeforetheretrenchment,inareskillingfund.
3.Thecompensationforaretrenchedworkerisproposedtobeincreased3timesto45dayspayforeverycompletedyearofwork.
4.Itwillalsotightennormsforestablishingunions,asnooutsiderwillbeallowedtobecomeofficebearerofaunionintheorganisedsector.
5.Theproposedlawwouldputanendtoflashstrikesasworkerswillhavetogiveastrikenoticeofatleast2weeks.
Newfarminsurancescheme
Themoveisanattempttostemruraldistressasfarmersarefacingthreesuccessivecropfailuresduetoinclementweatherconditions.
1.Rateofpremiumwillbeabout1/10thofexistingrates.Currentlyfarmersarepayingashighas25%whichisnotaffordableformarginalfarmers.
2.Itwillhelpcoverabouthalfofallfarmersinthenext3years.
3.Alsoputtousemobilephonestoassesscropyieldsandcutdownpayoutdelays.
4.Lowpenetrationofcropinsuranceschemes,lackofawarenesscoupled,highpremiumratesandlowerclaimpaymentsarethemajorconcerns
beforethegovernment.
LiveMint
NITIAayogplansmodelleaselaw
NITIAayoghastakenupwiththeStatesaproposalforunlockingthevalueoffarmlandthroughleasing.
1.NITIAayogwillprepareaamodellandleasinglawfortheStatestouseforreforminglandleaseprovisions.
2.Theinterestedlandownerscoulddeposittheirlandparcelsinalandbankforcultivatorstoleaseland.
3.Thelandbankwillactasaintermediaryandtransfersrentfromtheactualcultivatortoownerwhilechargingasmallfeetocoveritscosts.
4.Thisisexpectedtopermittheconsolidationofoperationallandholdings,giventhefragmentationoffarmlandholdingsinthecountry.
Taxonseedfundingtobescrapped
AccordingtoestimatesbytheteamofofficialsworkingontheStartUpIndiaprogramme,startupsinthecountryreceivedaround9billiondollars
offundingin2015.
1.ThegovernmenthasdecidedtoscrapataxonseedfundingprovidedtostartupsbyIndianangelinvestorsintheupcomingUnionBudget.
2.TohelpdomesticfinanciersbankrollnewentrepreneurialventuresunderitsStartUpIndiacampaign.

3.Thetaxprovisioninquestiontreatsinfusionoffundsbydomesticangelinvestorsasincomeinthehandsofthestartup,makingIndia.
4.Theonlycountryintheworldtopenaliselocalangelinvestorsinsuchamanner.
5.Thistaxappliesonlytodomesticinvestorsandthusactsasadisincentivetolocalfundingforstartupsthatthegovernmentwantstoincentivise
instead.
Corporateoptimismonthewaneasnewinvestmentsdeclinesharply
Industrysoptimismabouttheinvestmentclimatehaswanedduetoasharprecentdeclineinthevalueofnewprojectannouncements,data
fromtheCentreforMonitoringIndianEconomy(CMIE)shows.
1.NewprojectsworthRs.1lakhcrorewereannouncedintheDecember2015quarter,downfromRs.4lakhcroreinDecember2014.
2.NewprojectannouncementswereatRs.8.2lakhcroreincalendaryear2015ascomparedtoRs.9.4lakhcrorein2014.
3.Atthesametime,thedatashowsthatthevalueofstalledprojectsfelltoRs.1,723.2croreintheDecember2015quarter,downfromRs.86,177.3
crorein2014.
4.Thestockofstressedassetscomein5differentbucketsspecificpermissions,sectoralissues,marketrelatedpostponements,promoter
fundingissues.
DragonsfiremaysingeIndianindustry
CommerceMinistry,ChiefEconomicAdvisor,NITIAayogViceChairmantomeetsoontoassessimpact.
1.ThedeclineinthevalueofChinascurrencyagainstthedollarisaworryingdevelopmentasitmayleadtoasharpincreaseincheapimports
hurtingseveralIndianindustries.
2.Thedepreciationoftheyuanmayexpandthecountrystradedeficit.
3.IndiastradedeficitwithChinahadballoonedfrom$1.1billionin200304to$48.5billionin201415orover4timesIndiasexportstoChina($11.9
billion)inFY15.
4.ThegovernmentisconsideringproposalstoprotectdomesticsteelmanufacturersfromcheapsteelimportsmainlyfromChina.
5.Tooffsettheimpactoftradedeficit,IndiahadsoughtmoreinvestmentsfromChinaespeciallyinmegaindustrialparks(inStatessuchasGujarat
andMaharashtra).
RiverInformationSystem(RIS)LaunchedtoFacilitateSafe,AccurateNavigation
Thesystemenhancesswiftelectronicdatatransferbetweenmobilevesselsandshore(Basestations)throughadvanceandrealtimeexchangeof

information.
1.ThefirstofitskindinIndia,thenewsystemwillfacilitatesafeandaccuratenavigationonNationalWaterway1ontheGangesRiver.
2.RISisbeingimplementedundertheoverallresponsibilityofInlandWaterwayAuthorityofIndia,astatutorybodyadministeredbytheMinistry
ofShipping.
3.RISarecombinationofmoderntrackingequipmentrelatedhardwareandsoftwaredesignedtooptimizetrafficandtransportprocessesininland
navigation.
4.PhaseIIoftheRiverInformationSystemfromFarakkatoPatnaandPhaseIIIfromPatnatoVaranasiwouldalsobeimplementedonpriority.
TheIndianExpress
CabinetapprovesMoUwithSingaporetomanageairports
TheUnionCabinetapprovedthesigningofaMoUwithSingaporeforoperatingandmaintainingtheterminalbuildingofairportsatJaipurand
Ahmedabad.
1.ThisisthefirsttimetheAirportsAuthorityofIndiawillawardoperationandmaintenancecontracttoanyentityforterminalbuilding.
2.Theobjectiveistoestablishmutualcooperationinthefieldofcivilaviation.
3.Thiscooperationwillbeextendedtootherairportswithmutualconsent.
4.ItenvisagescollaborationwithSingaporeinareassuchastrafficdevelopment,commercialdevelopment,masterplanninganddesign,training
anddevelopment,cargohandlingandmanagementamongothers.
Biodiversitydatabaseforsmartcityinitiativetobelaunchedsoon
AbiodiversitydatabaseforurbanIndiawillbepreparedforbetterspeciesdiversitymanagement,dovetailedtothesmartcityinitiative.
1.TheNationalBotanicalResearchInstitute(NBRI),Lucknow,hasmadeaproposaltoitsparentorganisation,theCouncilofScientificandIndustrial
Research(CSIR),whichhasgivenitsconsent.
2.Thecoreinfrastructureofasmartcitydemandssustainableenvironmentandhealth,andtheportalwillbehelpfulinthisregard.
3.Theportalwillhelpidentifyastowhichspecieswouldbesuitableforgrowinginaparticularenvironment.
4.Tostartwith,theNBRIwilluploadthepublisheddatabasepertainingtothelocalbiodiversityofeachcity,includingthevarietiesofplantsand
treesthatareendemictoit.
Railregulatortosetfares,ensurefaircompetition

1.TheUniongovthasproposedtosetuparailregulatorforfixingfaresandensuringlevelplayingfieldforprivateinvestmentsinrailway
infrastructure.
2.TheRailDevelopmentAuthoritywouldbeanindependentbody,housedoutsidetheMinistryofRailways.
3.TheRailwaysMinistryisplanningtosetitupthroughanexecutiveorderandlateronwidenitspowers.
4.Itwillbeauthorisedtopenalisecartelisation,abuseofdominanceandotherunfairmarketmechanisms.
5.Anappellatebodyisalsoproposedtobeformedandtherole,structureandcompositionofthebodywillbesimilartootherregulators.
Agriculture&FarmersWelfareMinisterReleasesHorticulturalStatistics
Inordertoprovidedetailedinformationonhorticulturecrops,HorticulturalStatisticsataGlance2015broughtoutbyDepartmentof
Agriculture.
1.Thiscoveringdiverseaspectssuchasarea,production,productivity,growthtrends,percentageshare,valueofoutputandsoonformajor
horticulturalcrops.
2.TheylaunchedaProgrammeinSeptember,2014calledCoordinatedProgrammeonHorticultureAssessmentandMAnagementusing
geoiNformatics(CHAMAN).
3.UnderwhichscientificmethodologiesofRemoteSensingandSampleSurveyisbeingusedforassessmentofareaandproductionofmajor
horticulturecrops.
4.LaunchedaProgrammecalledHorticultureAreaandProductionInformationSystem(HAPIS)inFebruary,2015.
5.Thisisawebportalforonlinesubmissionofdistrictleveldatapertainingtoareaandproductionofhorticulturecrops.
PIB
Alathurtobecomefirstorganicblockpanchayat
AlathurisallsettobecomethefirstblockpanchayatinKeralatoachieveselfsufficiencyinproductionandconsumptionoforganicallygrown
vegetables.
1.Theblockpanchayathasbegunanovelinitiativeinthisregardwiththecooperationof8gramapanchayatsunderit.
2.Bytheendofthenexteconomicyear,theblockwillproduceallfruitsandvegetablesforitsresidentsbasedontherequirement.
3.AfarmersmarketwithouttheinvolvementofmiddlemenwillalsobesetupatVadakkancheryintheblock.
4.Afterachievingselfsufficiency,retailoutletswillbestartedinotherpartsoftheStatetoselltheexcessquantityoffruitsandvegetables.

Interestsubventionshouldbephasedout:centralbankpanel
Thegovernmentmustdoawaywiththeinterestsubventionschemeandploughbackthesubsidyintoauniversalcropinsuranceschemefor
smallandmarginalfarmers.
1.Themovecantransformtheagriculturesectorandpromotefinancialinclusion,accordingtothepanelheadedbyDeepakMohanty,executive
director,RBI.
2.Digitisationoflandrecordsforcleartitlesandcreditlinkagearenecessarytoestablishevidenceofcultivation.
3.Thereisaspecificpurposeofsubventionwherefarmersreceiveloansatalowercostwiththegovernmentpayingthebalance.
4.Inordertoensureactualcreditsupplytotheagriculturalsector,thecommitteerecommendedintroductionofAadhaarlinkedmechanismfor
CreditEligibilityCertificates.
5.TheMohantypanelnotedsignificantfinancialexclusioncontinuetopersistsinthenortheastern,easternandcentralstatestoachievenear
universalaccess.
KelkarchalksoutrulesforPPPrevival
InfrastructureinvestmentsofaboutRs.12lakhcrremainedstuckasofendDec.2014.
1.TheKelkarpanelhascomeoutwithclearcutnormsonresolvingissuesandclarifyingnormsonrenegotiationofcontracts.
2.KelkarCommitteereporthasrecommendedcreationofmultidisciplinaryexpertinstitutions.
3.ToaddresstheproblemofstalledPPPprojectsandlegacyissuesplaguingtheprojects.
4.ThereportsaysthatanInfrastructurePPPProjectReviewCommittee(IPRC)beconstitutedcomprisingatleastoneexpertinfinanceand
economics,law.
5.ItrecommendscreationofanInfrastructurePPPAdjudicationTribunal,tobechairedbyaformerSCJudgeorformerHCChiefJustice,withat
least1technicalandfinancialmember.
VajpayeesroadschemesooninNaxalhitareas
RoadMinistryfailedtofinishfirstphaseRuralDevelopmentMinistrytotakeover.
1.TheMinistryofRoadTransportandHighwaysmaylosetheresponsibilityofbuildingroadsandbridgesintheMaoistaffectedStates.
2.ThePradhanMantriGramSadakYojana(PMGSY),thebrainchildofformerPremierVajpayee,whichwaslaunchedin2004,implementedbythe
RuralDevelopmentMinistry.

3.Maoistrelatedincidentstoucheda5yearlowin2015,with1,006incidentsreportedthisyearascomparedto1,760in2011.
4.TheCentreisworkingonanambitiousplanforseamlessconnectivitybetweenthe10NaxalaffectedStatesandisallsettolaunchtheRoad
RequirementPlanII.
NBFCssectorspecificexpertisedrivessustainedincreaseinmarketshare
1.TherecentCIIreportonNBFCsshowsthattheyhavesteadilyeatenintoretailbanksshareofcreditintheIndianmarketoverthelastdecade.
2.NBFCshavetakenlargeshareinsectorssuchashomeloansandcommercialvehicleloans,duetotheirsectorspecificexpertise.
3.NBFCscommand90%oftheusedcommercialvehiclemarket,80%oftheloanagainstpropertymarket,and70%oftheconsumerdurables
market.
4.TheNBFCsshareofoverallcreditgrewfrom10%in200405to13%in201415.
5.NBFCsareattractivetofirsttimebuyerswhovalueastrongrelationshipwiththeofficialfromthelendingagency.
Draftcivilaviationpolicysettobefinalisedtoday
Theministryisexpectedtotakedecisionsonkeyissuesincludingthemuchtalkedabout5/20rulewhichsetsthenormsforairlinestofly
abroad.
1.Alltheairlinesincludingincumbentshadopposedthegovernmentsproposalonreplacingthe5/20rulewithacreditbasedsystem.
2.The5/20rulemeansanyairlinewith5yearsofdomesticflyingexperienceand20aircraftinitsfleetwereallowedtogoabroad.
3.Thecivilaviationministry,initsinternalmeetings,hasgivenagoaheadtotheproposedregionalconnectivityscheme.
4.Throughthisscheme,afundwillbeformedbylevyinga2percentcessonalldomesticandinternationalticketsfromnextyeartofundthelosses
ofairlinesflyingonregionalroutes.
ModelTextfortheIndianBilateralInvestmentTreaty(BIT)
BITshelpprojectIndiaasapreferredforeigndirectinvestment(FDI)destinationaswellasprotectoutboundIndianFDI.
1.TheUnionCabinethasgivenitsapprovalfortherevisedModelTextfortheIndianBilateralInvestmentTreaty(BIT).
2.ItwillbeusedforrenegotiationofexistingBITsandnegotiationoffutureBITs.
3.ABITincreasesthecomfortlevelandbooststheconfidenceofinvestorsbyassuringalevelplayingfield.
Itwillalsobeusedforinvestmentchaptersin
ComprehensiveEconomicCooperationAgreements(CECAs)

ComprehensiveEconomicPartnershipAgreements(CEPAs)
FreeTradeAgreements(FTAs).
Govt.lowersgrowthoutlook,stressessupplysidereforms
Withoutreforms,GDPgrowthnextyearisunlikelytobesignificantlygreater
1.IndialowereditsGDPgrowthprojectionforthecurrentyeartobetween77.5percentagainsttheearlierforecastof8.18.5percent.
2.ThecutinforecastfollowsGDPgrowthinthefirsthalfoftheyearslowingto7.2percentfrom7.5percentinthelastyear.
3.Economicgrowthwasdraggeddownbythe17.4percentdeclineinexportsandadverseimpactofdeficientmonsoonsonfarmsectoroutput.
4.Theslowdownwillposeachallengetomeetingthefiscaldeficittargetof3.9percentofGDPandwillalsoplaceastressontaxrevenue
collections.
TNAUusessatelliteimagesforcropmanagement
ImagesanddatadecipheredtherefromwillhelptheStateGovernmentframepoliciesandfarmersgetpreciseinputsandquickdisbursement
ofcropinsurance.
1.TamilNaduAgriculturalUniversity(TNAU),Coimbatore,calculatedhowmuchcultivatedareawasinundated,soonaftertherecentrainshit
hard.
2.UniversitysquickassessmentandcommunicationtoStateGovernment,usingimagesobtainedfromEuropeanSpaceAgencysSentinel1A
satellite.
3.TheUniversitysaccesstothesatelliteimagesfollowsatieupundertheRemoteSensingInformationforInsuranceonCropsinEmerging
Economiesproject.
4.TheUniversityusestheimagestoidentifycrops,estimateareaofcultivation,prepareseasonalitymap,phenologymapandyieldmap.
U.S.civilsocietygroupsbackIndiasstandatWTO
1.IndiasdemandtosafeguardtheinterestsofpoorfarmersandfoodsecurityprogrammeshasreceivedsupportwithintheU.S.
2.TheyurgedtheUStoagreetoaproposalonapermanentsolutiontotheissueoffoodstocksprogrammestosupportfoodsecurity.
3.TheyaskedtheUStoagreetotherevisionofthebaselinefiguresonpublicspendingonagriculturetoreflectcurrentprices.
4.Ministersfrom162membercountriesoftheWTOwillgatherattheNairobiduringDecember1518fornegotiationsmeantforadealtoopenup
globaltrade.

Indiafourthlargestsourceofblackmoney:Report
Indiahasbeenrankedthefourthbiggestsourceofblackmoney,with$510billionworthofillicitfinancialflowsduring20042013,or$51billion
annually,onaverage.
1.ThiswasstatedinareportwhichwasreleasedrecentlybyGlobalFinancialIntegrity(GFI),aresearchandadvisorygroupbasedin
Washington.
2.Accordingtothereport,$1.1trillionflowedoutofdevelopingandemergingeconomiesillicitlyin2013alone.
3.Thecapitaloutflowmainlystemmedfromtaxevasion,crime,corruptionandotherillegalactivities.
4.Chinatopsthelistfor20042013,with$139billionaverageillicitfinancialflowperannum,followedbyRussiaandMexico.
BusinessStan
Dogovernmentshavearoletoplayinhealthcare?Andhow?

1.Purecapitalistmarketssaythattheinvisiblehandofthemarketwillproducethebestpossibleoutcomes.
2.But,weknowthatsuchmarketsdonotbydesignhavetheabilitytoprovidepublicgoodstoall.Why?
3.Whatarepublicgoods?Wewillseethedefinitionlater.
4.Hence,eventhemarketpuristsrelentandsaythatprovisionofpublicgoodsisalegitimatepartofgovernmentinterventionintheeconomy.
5.Butwhatshouldwedoforhealthcare?Therearemorefactorsinvolvedthanjustpricingofdrugs.
6.Youhaveasymmetricdistribution,communicationgapsbetweenproviders&patientsandsoon.
LiveMint
CropProtectionThroughAtomicTechnique
TheResearcheffortsinvolvingmutationbreedingthroughradiationandalliedtechniquesatBhabhaAtomicResearchCentre(BARC),a
constituentunitofDepartmentofAtomicEnergy(DAE).

1.Inthelast10years,thegroundnutvarietiesofBARChavecontributedtoabout14.2%ofNationalBreedersseedindent.
2.ThesevarietieshavebecomeverypopularingroundnutgrowingStateslikeGujarat,AndhraPradesh,Odisha,Maharashtra,Rajasthanand
Karnataka.
3.Inaddition,thepulsevarietiesofBARClikemungbean,pigeonpeaandblackgramhavealsoplayedanimportantroleinincreasingoverall
nationalproductivity.
4.BARCmungvarietiessuchasTJM3,TMB37andTM962accountedfor24%whilepigeonpeavarietyTJT501accountedfor18%ofthetotal
nationalbreederseedindents.
PIB
CCEAapprovescreationofbufferstockofpulses
Inabidtokeeppulsespriceundercheck,thatwentskyrocketingduringpastfewmonths,theCentrehasdecidedtodoit.
1.CabinetCommitteeonEconomicAffairs(CCEA)gaveitsapprovalforcreationofbufferstockofpulses.Thebufferstockwillbecreatedin
currentyearitself.
2.ProcurementofpulseswillbedoneatmarketpricesthroughtheFCI,theNationalAgriculturalCooperativeMarketingFederationofIndiaLtd.
(NAFED),theSmallFarmersAgribusinessConsortium(SFAC).
3.Theprocurementinkharifandrabi201516willbedoneatmarketpriceaboveMSPoutofthepricestabilisationfund.
4.Thismovewillreduceapricefluctuationsandwillalsohelpinprovidingremunerativepricestofarmersintimesofexcessproduction.
Letsknowabout5labourreformlegislations
1.PaymentofBonus(Amendment)Bill,2015:Tomakemoreworkerseligibleforbonusanddoublebonuspayouts.
2.ChildLabour(ProtectionandRegulation)AmendmentBill,2012:Barschildrenfromhazardousoccupationtilltheageof18,butallowsthose
under14toworkinafamilyenterprise.
3.TheSmallFactories(RegulationofEmploymentandConditionsofServices)Bill2014:Toexemptfirmsupto40employeesfromcompliancewith
6majorlabourlaws.
4.LabourCodeonWagesBill,2014:Toreplace4lawspertainingtominimumwages,paymentofsalariesandbenefits.
5.LabourCodeonIndustrialRelationsBill,2015:Toreplace3labourlaws,includingTradeUnionsActof1926andIndustrialDisputesActof1947.
IndiamayratifyWTOtradefacilitationpact
IndiaislikelytoratifytheWTOsTradeFacilitationAgreement(TFA),aimedateasingcustomsrulestoexpeditetradeflows.

1.But,IndiamightnotnotuseallavailableflexibilitiesintheTFAtodeterminethetimingofimplementationofvariouscommitments.
2.ItispartofthegovtsinitiativestoattractmoreinvestmentbyimprovingIndiasrankingintheWorldBankseaseofdoingbusinessreport,
3.Theitemswhicharestillunresolvedincludefindingapermanentsolutiontotheissueofpublicstockholdingforfoodsecuritypurposesaswellas
measurestoprotectpoorfarmersfromsuddenimportsurgesoffarmproducts.
Centretosetup12petrochemicalcomplexes
Thegovernmentwasworkingonapolicytohaveatleastonepetrochemicalcomplexineachrefinerywhichcouldresultinaninvestmentoffew
lakhcrore.
1.Atpresent,therearefourPetroleum,ChemicalsandPetrochemicalsInvestmentRegion(PCPIR)orpetrochemicalcomplexesinthecountry.
2.APCPIRisusuallyadelineatedareaformanufacturingvarioustypesofpetrochemicalcompounds.
3.PCPIRarecurrentlypresentinGujarat,AndhraPradesh,OdishaandTamilNadu.
4.AsperthePCPIRpolicy,theCentrehastoensuretheavailabilityofexternalphysicalinfrastructurelinkagestotheseregions.
5.Includingrail,roadconnectivitytonationalhighways,ports,andtelecomconnectivity.
Govt.tobreathenewlifeintoailingjuteindustry
Over40lakhfarmersandnearlyfourlakhmillworkersdependonthejuteindustryfortheirlivelihood.
1.UnionTextilesMinistryhasurgedStategovernmentstohelpdiversifytheailingjuteindustrybyexploringnewavenuesforpromotion.
2.Mostimportantly,jutegeotextileproductscanbeusedincivilengineeringworkssuchasroadconstructionandprotectionofhillslopes.
3.Indiaaccountsforanestimated70percentoftheworldstotalproductionofjuteproducts.
4.Over90millsarecurrentlyoperational,67inWestBengalalone.
5.TherestareinBihar,Assam,Tripura,UttarPradeshandAndhraPradesh.
GSTBill:governmentmaygoforcompromise
InsteadofonefixedGSTrate,govt.maygoforataxbandof18to24%.
1.Ofthe3objections,CongresshasontheGSTBill,itisbecomingincreasinglyclearthatgovernmentispreparedtoaddressit.
2.Itiswillingtoscrapthe1percentadditionalorigintaxproposedtohelpmanufacturingstates,tomakeupthelossestheymayincurduetoGST.
3.Bypromisingtomakeupthoselossesfor5yearsandsetupagrievanceredressalmechanism.
4.Onthirdissue,cappingtheGST,acommitteeheadedbyCEAArvindSubramanianispreparingareportthatcouldbeoutthisweek.

5.Governmentfeelsthatifthereisafixedrateintheconstitutionalamendment,anychangeinfuturewillbedifficult.
Maharashtraisbiggeststateeconomy,saysBrickworkRatings
Nationwideanalysisfindsstateaccountsforover27percentofgrossstatedomesticproductandregistered11.69percentgrowth.
1.MaharashtraisthebiggesteconomyatRs16.87lakhcroreintermsofgrossstatedomesticproduct(GSDP),followedbyTamilNaduandUttar
Pradesh.
2.Maharashtraearnsapproximately70percentofitstotalreceiptsthroughtaxrevenues,thehighestamongthebiggerstates,followedbyGujarat
andTamilNadu.
3.Maharashtrasinfantmortalityrate(IMR)of25isbelowthenationalaverageforallstates,whichstandsat50.
4.ThethreefastestgrowingstateswereBiharat17.06percent,MP(16.86percent)andGoa(16.43percent).
ConsultativeCommitteediscussesDraftNationalCivilAviationPolicy
AmeetingoftheParliamentaryConsultativeCommitteeoftheMinistryofCivilAviationwasheldinNewDelhi,todiscusstheDraftNational
CivilAviationPolicy,2015.
1.ItaimsatprovidingaconduciveenvironmentandalevelplayingfieldtovariousaviationsubsectorslikeAirlines,Airports,Cargo,Aerospace
Manufacturing,andSkillDevelopment.
2.Italsoaimstobringairtravelwithinreachofthecommonmanbyfacilitatingregionalairconnectivityatreasonablerateswithinthecountry.
3.Thecommitteelaudedforthethrustitlaysonregionalconnectivityandonmakingairtravelavailableforthecommonmaninsmallercitiesat
reasonablecosts.
CanwediscusscoreissuesinCivilAviationsector?
PIB
Indiashowingearlysignsofrecovery:Moodys
Someofthebasicparametersofrecoverywerelookingbetter,asgrowthintheproductionofcapitalgoodshaspickedup,accordingtodata.
1.AnincreaseinpublicsectorexpenditureandanupturnincapitalreplacementcyclearedrivinginvestmentinIndia.
2.Itwilltakeawhileforprivateinvestmenttoshowasustainablerevival.
3.Indiaseconomywasforecasttogrowforecastat7percentfor2015and7.5percentfor2016,whichtakeintoaccountaslowerinvestment
recovery.

4.ReportforecastingtheGDPgrowthof2.8percentintheG20economiesin2016,withrecoveryexpectationsinU.S.offsetbyslowergrowthin
Chinaandemergingmarkets.
DoKnowaboutPradhanMantriKrishiSinchaiYojana?
Theobjectiveistoconvergeinvestmentsinirrigationatthefarmlevelandprovideendtoendsolution.
Fourcomponentsare:
AcceleratedIrrigationBenefitProgramme(AIBP)FocusesonfastercompletionofongoingMajorandMediumIrrigationincludingNational
Projects.
HarKhetkoPaaniThiscomponentmainlyfocusesoncreationofnewwatersourcesthroughminorirrigationthatincludesbothsurfaceand
groundwater.
PerDropMoreCropItpromotesefficientwaterconveyanceandprecisionwaterapplicationdeviceslikedrips,sprinklers,pivots,raingunsinthe
farm(JalSinchan).
WatershedDevelopmentFocusesoneffectivemanagementofrunoffwaterandimprovedsoil&moistureconservationactivities
Suchasridgeareatreatment,rainwaterharvesting,insitumoistureconservationonwatershedbasis.
PIB
LetsknowaboutMinimumAlternateTax(MAT)?
1.MATisataxeffectivelyintroducedinIndiabytheFinanceActof1987,IncomeTaxAct,1961(ITAct).
2.Tofacilitatethetaxationofzerotaxcompaniesi.e.,thosecompanieswhichshowzeroornegligibleincometoavoidtax.
3.MATisanattempttoreducetaxavoidance.
4.Introducedtocontainthepracticesfollowedbycertaincompaniestoavoidthepaymentofincometax,eventhoughtheyhadtheabilitytopay.
5.MATisappliedwhenthetaxableincomecalculatedasperthenormalprovisionsintheITActisfoundtobelessthan18.5%ofthebookprofits.
Custom
Fromnonperformingtoperforming
Awellfunctioninginsolvencyresolutionframeworkisfundamentalfordealingwithbusinessfailures
WhatsnewinIBCdraft?
TheministryoffinancerecentlyreleasedthedraftInsolvencyandBankruptcyCode(IBC),proposedbytheBankruptcyLawReforms

Committee.
Aneffectiveinsolvencyresolutionprocessisonetool,amongothers,forbanksandothercreditorstoaddresslowrecoveryrates.
WhatstheissueofBanksinIndia?
BanksinIndiafaceacuteproblemsofassetquality.
Perceivingthatlawsdidnotsufficientlyempowersecuredcreditorstoactivaterecoverybyseizingsecurity.
Howdoessinglecomprehensivelawempowersthesystem,withtheproposedIBC?
Itempowersallcreditorssecured,unsecured,financialandoperationaltotriggerresolution.
Itenablestheresolutionprocesstostartattheearliestsignoffinancialdistress.
Itprovidesasingleforumoverseeingallinsolvencyandliquidationproceedings.
Itreplacesexistingmanagementduringinsolvencyproceedingswhilekeepingtheenterpriseasagoingconcern.
Thewayforward
Theproposedframeworkstrengthenscreditors,withoutdiscriminationanditwillpreventnewloansfromgettingaddedtoexistingstockofNPAs.
Itwillaiddevelopmentofalternativedebtsecurities,spreadtheriskofcorporatefailureacrosslargersetsofcreditors.
Itleadtothedoublebenefitoflowersystemicriskanddeeperdebtfinanceforarapidlygrowingeconomyofentrepreneurs.
LiveMint
Baddebtsofbanksatunacceptablelevel:FM
Sixsectorsthatwerefacingmaximumstress,ironandsteel,textile,power,sugar,aluminiumandconstruction.
1.Thehealthofthepublicsectorbanks(PSBs)wasakeysubject,particularlyinrelationtothefactthatacarriedoverproblemofthepast
continuestopersist.
2.Thereformsannouncedinthepowersectorwillrelievetheproblemswiththedistributioncompanies.
3.ThegrossThenonperformingassets(NPAs)ofpublicsectorbankswereat6percent,upfrom5.2percentinMarch.
4.Thegovernmentisalsointheprocessofframingabankruptcycodeaimedtotacklewilfuldefaultandadraftpaperwasrecentlyreleased.
InsolvencyresolutioninIndiaplaguedbywiderangeofproblems:report
TheaveragedurationforinsolvencyresolutioninIndiais4.3years,significantlyhigherthanthatofSouthAsiaregion(2.6years)andthatof
OECDhighincomecountries(1.7years).

1.AsurveyofIndiancompaniesbytheconsultancyalsofoundthattherearesystemicproblemsinthewaystressedassetsarerelievedcurrently.
2.SARFAESI[SecuritisationandReconstructionofFinancialAssetsandEnforcementofSecurityInterestAct]givessecuredlendersthelegalright
toreplaceineffectualmanagement.
3.Itisimpossibletoachieve,aspromoterstendtolitigateandthelongtimetakenforresolutioninthecurrentjudicialsystemleadsto
severedegradationinvalueoftheassets.
4.ThereportrecommendsthattheproposedNationalCompanyLawTribunalshouldhaveaseparatebenchforhandlingbankruptcycases.
Delicatebalancing:Aspendingboost,butaninflationaryaftershocklikely
Onthefiscalfront,expertsfeelthataburdenofRs73,000croreinFY17maynotposeamajorproblemfortheCentre.
1.Marketexpertssay,whileononehanditwillprovideabigstimulustotheeconomyincomingyears.
2.Ontheotherhand,itwouldbeinflationaryinnature,thuscallsfordelicatebalancingbetweengrowthandinflation.
3.Onthefiscalfront,expertsfeelthataburdenofRs73,000croreinFY17maynotposeamajorproblemfortheCentre.
4.Analystsfeelthatitwillleadtoriseinconsumptionandwillthusprovideboosttotheeconomy.
5.Crisilpointedout,consumptiongetboostasstatestoohaveimplementedwagehikesbyadelayofoneyearandthatbyperkinguphousehold
consumptiondemand.
CPCrevisionswillfacilitatefasterimprovementincapacityutilisationinthefiscal2017.
TheIndianExpress
LaunchofTechnologyAcquisitionandDevelopmentFundunderNationalManufacturingPolicy
1.TechnologyAcquisitionandDevelopmentFund(TADF)underNationalManufacturingPolicybeingimplementedbyDepartmentofIndustrialPolicy
&Promotion(DIPP).
2.TADFisanewschemetofacilitateacquisitionofClean,Green&EnergyEfficientTechnologies.
3.ItisinformofTechnology/Patents/IndustrialDesignavailableinmarketavailableinIndiaorglobally,byMicro,Small&MediumEnterprises
(MSMEs).
4.Schemewouldfacilitateacquisitionofclean&greentechnologiesbymicro,smallandmediumunitsacrossthesectorsandthus,bridgethe
technologicalgapatanaffordablecost.
5.SchemeisconceptualisedtocatalysemanufacturinggrowthinMSMEsectortocontributetothenationalfocusofMakeinIndia.
PIB

CCIslapsRs258crpenaltyonIndiGo,SpiceJet,JetAirways
CompetitionCommissionofIndia(CCI)hasslappedpenaltiesforcartelisationinfixingcargofuelsurcharge.
1.ItalsoissuedaceaseanddesistorderagainstairlinesonthecomplaintfiledbyExpressIndustryCouncilofIndia(EICI).
2.These3airlinesactedincollusiontofixfuelsurchargerateswhichresultedinindirectlydeterminingtheratesofaircargotransport.
3.Itwascontraventionoftheanticompetitiveagreementsintheaircargoindustry.
4.Fuelsurchargewasessentiallyintroducedtomitigatefuelpricevolatility.
5.Cartelisationofitbyleadingairlinershasharmedthefaircompetitioninthemarket.
TheIndianExpress
MinistryseeksmorethanRs.25,000crforureasubsidybills
TheFertiliserMinistryhassoughtRs.25000crfromtheFinanceMinistryformakingsubsidypaymentstodomesticureamanufacturers.
1.Thegovt.hadallocatedRs.72,968.56croreforfertilisersubsidy,outofwhichRs.38,200crorewasearmarkedfordomesticurea.
2.Itisfacingshortageoffundsformakingpaymentstodomesticureamanufacturersduetosubsidyarrearsfromthepreviousyears.
3.Thegovt.hastakenslewofmeasurestoimprovetheefficiencyofureamanufacturerssoastoreducethesubsidybill.
4.Ithasissuedrevisedenergynormsunderthenewureapolicyforexisting25gasbasedureaplantsinthecountry.
Bailoutsgaloreinpowersector:Wherestheplug
Thenewschemehingesonthepremisethatwithloansofftheirbooksandimprovedbalancesheets,SEBswillbeabletoselltherestoftheir
outstandingdebtasbondsbackedbystategovt.guarantee.
1.ThegoodthingaboutUDAYisthatitpromisesnograntsorupfrontwritedownoflossesfordistributionutilities.
2.Thebiggestquestionisthat,whetherthenewschemehasenoughincentivesbuiltintodrawstategovts.
3.ThesetakenoverloanswillnotbecountedforthestatesFRBMlimitsforthecurrentfiscalyearandthenext.
4.Itisunclearwhethertherewillbeasubstantialnumberofstatesthatwouldactuallycomeforwardfortakingupthisscheme,aslongasitremainsa
voluntaryone.
TheIndianExpress
GovernmentconsidersAfricaroutetohelpcentralPSUs
CentreplanstohelpCentralPublicSectorUndertakings(CPSUs),includingthoseincurringlosses,setupsubsidiariesorformjointventures

withStateownedenterprises(SOEs)inpoorAfricancountries.
1.DepartmentofPublicEnterprises(DPE)wantsMEAtoinfluenceAfricancountries,especiallythosewithhardlyanyprivatecapitalinvestment.
2.TheDPE,asperitsproposal,wantstheseAfricancountriestoreserveseveralsectorsforSOEs.
3.TheAfricancountrieswillhavetomakepoliciesconduciveforthePSUstooperate.
4.PrivatecompaniestendtonottaketheriskofinvestinginunstableeconomiessuchasthoseinAfrica.
5.SoPSUs,withthehelpofAfricangovernments,cantakeleadininvestmentsandtheprivatesectorcanthenfollow.
NITIPanelProposesAgriReformstoCurbPriceRise
NITIAayogsTaskForceonAgriculturehasrecommendedbigbangreformstoaddressissueoffrequentspurtincropprices.
1.Reporttalksabouttheneedforreformsintheagriculturesectorinabigwaytoaddressissues.
2.AsBadweather,fluctuationincropprices,anddemandandsupplyproblemsinthelongterm.
ImportantRecommendations
Guaranteedpricesforatleasthalfthekeycrops
Settingupofaunifiednationalagriculturemarket
Changinglandleaselaws
Mechanismtofacilitateeasyexitforfarmerswhowanttomoveoutofagriculture.
TheEconomicTimes
UDAYschemeforfinancialturnaroundofPowerDistributionCompanies
UjwalDISCOMAssuranceYojna(UDAY)forfinancialrestructuringofdebtofpowerdistributioncompanies.
1.SchemeaimsatfinancialturnaroundandrevivalofPowerDistributioncompanies(DISCOMs)andensuresasustainablepermanentsolution.
2.AllowspowerDISCOMsinselectedstatestoconverttheirdebtintostatebondsaswellasrolloutnumberofmeasurestoimproveefficiencyat
powerplants.
3.ItImprovesoperationalefficienciesofDISCOMs,Reduceofcostofpower,ReduceinterestcostofDISCOMs,Enforcefinancialdisciplineon
DISCOMs.
4.Improveoperationalefficiencybyswappingofcoallinkages,monitoringtechnicalandcommercial(AT&C)losses,smartmeteringandfeeder
separationinstates.

WithUDAYScheme,UnionGovernmentseekstoacceleratetheprocessofreformacrosstheentirepowersectorinordertoensureaffordableand
accessible247PowerforAll.
PIB
Bankruptcypanelcallsforinsolvencyregulator
ProposedBankruptcyCodewillreplaceoveracenturyoldinsolvencyact,PresidencyTownsInsolvencyAct,1909,ensurestimebound
disposalofinsolvencyapplication.
1.BankruptcyLawReformsCommittee(BLRC),headedbyTKVishwanathan.
2.Itsuggestedsettingupaninsolvencyregulatortoexerciseregulatoryoversightoverinsolvencyprofessionalsandagencies.
3.Toensurespeedierwindingupofinsolventcompaniesandprovidingeasierexitroutetoinvestors.
4.Recommended,bankruptcy&insolvencyprocessesforindividualswithannualgrossincomeoflessthanRs60,000andaggregateassetsofnot
morethanRs20,000.
Indialacksaneffectiveoverarchingmechanismtoensurequickwindingupofbusinessesandcompensationtootherstakeholders.
TheIndianExpress
Smallteagrowersseekinternationalagency
Internationalagencyhasproposedtohelprepresentthesmallteagrowerssector,whichcurrentlycontributesabout70percentoftheworld
teacrop.
1.Effortsarealsoontofindwaystodirectlymarketsmallteagrowersproduce.
2.RecentintersessionmeetingoftheIntergovernmentalGroupofFAOinItalydiscussedtheplan.
3.RepresentativesfromIndia,SriLanka,Kenya,China,Japan,Malawi,theU.S.,U.K.andotherspresent.
4.NeedforaninternationalbodyforsmallteagrowerswasbroughtbyquiteafewteagrowingcountriesincludingIndia,SriLanka,Kenyaand
Indonesia.
5.Pricerealisation,qualityandcostofproductionwerecoreissuesaffectingsegment.
ThecontributiontosegmentoftheteaindustryishighestinSriLankaandKenya.Cappingregionalfares,underproposedRCSscheme,willhurt
airlines,saysCRISIL
1.TheproposedRegionalconnectivityschemewillbeabignegativefortheheavilyindebtedandlossmakingairlines,asitwouldcapfareson
regionalroutes.

2.RCSneedsmoreexplanationasthereisnoclarityonwhetherafareofRs.2,500perhourwouldbecappedevenforlastminutebooking.
3.Almost50%ofexpensesofanairlineareduetofuelcosts,astotaltaxonjetfuelisaround45%.SomeStateslevyashighas30%taxonATF.
4.ThelinkingofreductioninStateleveltaxonATFto1%orbelowtoavailthecappedpriceswouldhelpbringdowntheoveralloperationalcostfor
airlines.
1.RBIhasallowednonresidentIndianstosubscribetotheNPSenablingthemaccessoldageincomesecurity.
2.NPSwillactasaninvestmentoptionforNRIsunderForeignExchangeManagementAct(FEMA),1999.
3.NRIsmaysubscribetotheNPSthroughnormalbankingchannelsandthepersoniseligibletoinvestaspertheprovisionsofthePFRDAAct,
2013.
4.NPSisgovernedandadministeredbythePensionFundRegulatoryandDevelopmentAuthority(PFRDA),launchedin2004.
5.Itwasextendedforallcitizensofthecountryfrom1May2009includingtheunorganisedsectorworkersonvoluntarybasis.
TheEconomicTimes
Caponsmalltownfaresmooted
TheCivilAviationMinistryunveiledthedraftaviationpolicyafterawiderangeofconsultations.
1.ItproposedtocapsmalltownroutefaresatRs.2,500perflyinghourperticket.
2.Ithasalsoproposeda2%cessonalldomestictrunkrouteticketsaswellasinternationalticketstosubsidiseflightsonsmalltownroutes.
3.OneoftheinitiativesproposedistheRegionalConnectivitySchemetoboostairtravelinsmallertowns.
4.Thegovt.willworktowardsrevivalofunservedairports,buildnofrillsairportsandalsogiveincentivesandsubsidiestostakeholders.
5.ThepolicysuggestsanumberofincentivesfortheMaintenance,RepairandOverhaul(MRO)sector.
6.Thedraftproposesopenskiespolicyforcountrieswithin5,000kmwitheffectfromApril1,2020.
7.However,thepolicyprovidesnoclarityonthe5/20rule.
Thebroaderaimofthereviseddraftpolicyistopreparethegroundfor30croredomesticticketingby2022and50croreby2027,besides
targetinginternationalticketingat20crore.
Uptheranks
IndiasimprovedDoingBusinessrankputsthespotlightonstateandlocalgovernments

1.TheWorldBankslatestDoingBusinessreportranksIndia130outof189countries.
2.OneofthemainreasonsfortheimprovementwasthecurrentgovernmentamendingtheCompaniesAct.
3.Anotherreason,Indiajumpeda29rungsingettingelectricity,changesmadebytheDelhiandMumbaielectricityutilities,thatmadegettinga
connectioneasier.
4.Indiaranksashocking183fordealingwithconstructionpermits,anareaintheexclusivejurisdictionoftheselevelsofgovernment.
5.TheCentrecouldenactamodernbankruptcycode,aspromisedinthisyearsbudget.
6.Agoodstarthasalsobeenmadewiththeformationofacommitteetooverhaulthe1961IncomeTaxActtomakeitlesslitigationprone.
7.Theserankingsare,atbest,anincompletesnapshotofmicroregulatoryconstraintsthataffectsmallandmediumenterprises.
GovernmentsatvariouslevelsmustnotethatIndiaisnotthemosthospitableplaceforSMEs,whicharekeyforjobcreation.

TheIndianExpress
Centretakesstepstospeedupaffordablehousingschemes
MinistryofHousingandUrbanPovertyAlleviationalongwithotherministrieswillsetupasystemthroughwhichaffordablehousingprojectsare
clearedatafasterpace.
1.Thegovt.isbattlingahousingdeficitof18.78millionunits,ofwhicheconomicallyweakerpopulationrequires95%ofhousingunits.
2.TheCentreisurgingstatestoreducestampduties,registrationandconversionfee.
3.Thiswillhelpinquicklyfillingthehousingstockforthepoorandlowincomepeopleacross989cities.
Themainhurdlesinfillingthehousingstockare:
Shortageoflandinurbanareas
Stringentlanduseregulations
Inadequateinfrastructuretosupportmorehousingneighbourhoods
Risingcostsofconstructionmaterial
Insufficientfinancing
Restrictedmortgagefinancing
Rentcontrollaws
IncomeTaxDeptsetsuppaneltosimplifytaxlaw
JusticeR.V.Easwarcommitteelookintoprovisionsthatareleadingtolitigationduetodifferentinterpretations.
1.TheIncomeTaxDepartmentsetupaJusticeR.V.EaswarcommitteeinordertosimplifytheprovisionsoftheIncomeTaxAct,1961.
2.ObjectiveistostudytheprovisionsorphrasesintheAct,leadingtolitigationduetodifferentinterpretations,thatareimpactingtheeaseofdoing
business.
3.Tosimplytaxissues,FinanceMinisterlaunchedapilotprojectofesahyog.
4.UnderthisinitiativetheDepartmentwillprovideanendtoendeserviceusingSMS,emailstoinformthetaxpayersofthemismatch.
esahyoginitiativebyIncomeTaxDepartmenttoprovideanonlineportaltohelptaxpayersresolveanymismatchesintheirreturns
withouthavingtovisittheIncomeTaxDepartmentoffices.Over80,000tonnesofseizedpulseswillbeavailableinopenmarket
Importersseekexemptionfromstocklimits

1.TheCentredeclaredthatthe82,462.53tonnesofpulsesseizedinvariousStatesundertheEssentialCommoditiesActwouldbemadeavailable
intheopenmarket.
2.Toaugmentsuppliesandarrestfurtherhikeinthepricesofturanduraddals.
3.Nowordontherateatwhichthesepulseswillbemadeavailableintheopenmarket.
4.Pulsesimportersandmillershaveurgedthegovernmenttoliftstockholdinglimitsonpulses.
5.Pulsespricesshotupduetoshortageinsuppliesowingtodrought.
Indiamovesupineaseofdoingbusinessranking
WorldBankofficiallaudseffortsofModigovernment,Ittookfourmonthsin2005tostartabusinessinIndia,butittakesonly29daysnow
1.Indiaimproveditspositionfromlastyears134to130intheWorldBankDoingBusiness2016ranking.
2.LastyearsreportrankedIndiaat140,thisyearsreportfeaturestherecalculated2015rankings,inwhichIndiacomesat134.
3.TheWBDoingBusinessreports,startedin2002,reviewbusinessregulationsandtheirenforcementacross189countries.
4.AmongSouthAsianeconomies,Indiamadethebiggestimprovementinbusinessregulation.
5.Indiaranksinthetop10inProtectingMinorityInvestors(8).
Theimprovementintwoindicators,startingabusinessandgettingelectricity,pushedIndiauptheladder.Theproblemofdebtconcentration
Indiaisnowcomingtotermswiththecostsofcronycapitalism
Letsfindsomerootsinthepast,fordangerousgrowthincorporatedebt?
First,theburstingoftheIndiancreditbubble,whenbankloansgrewaround10percentagepointsfasterthannominalGDP,hasleftbehind
inevitablecracksinthefinancialsystem.
Second,theconcertedpushforhigherprivateinvestmentininfrastructureencouragedcompaniestotakeonexcessdebt.
While,inexplicablepolicyofallowingcompaniesinthenontradablesectortotakeonforeigndebtisbeyondrationaleconomicexplanation.
Third,theregulatorymessduringlastfewyears,projectsgotstalledaftermoneywasputonthegroundandprojectsgotintotroublebecause
ofpolicyconfusionsthatwerebeyondcontrol.
Fourth,mostheavilyindebtedcompaniesshowsthatthereisastronglinkbetweenthecurrentfinancialfragilityandcronycapitalismexcesses
ofthepastdecade.
Whatnow,Istheiranywaytomoveout?Tworeasons,whymoreurgentactionisneeded.

First,financialfragilityintheIndianprivatesectorisoneclearworryamongglobalinvestors.
Second,theIndianeconomicrecoverycannotbesustainedunlessprivatesectorinvestmentpicksup,andthatisdifficultunlesscorporate
financialsimprove.
Indiaisnowcomingtotermswiththecostsofcronycapitalism.Thebillshouldnotbepresentedtotaxpayers.
WhatisthewayoutforleveragedcompaniesinIndia,Canyoufindsomesolutions?
LiveMint
FinMinmovesCabinetnoteonmonetarypolicycommittee
TheRBIaverycredibleinstitution,nothingwillbedoneinMPCthatunderminestheroleoftheRBI
1.Cabinetnoteonsettinguptheproposedmonetarypolicycommittee(MPC),whereRBIisexpectedtoretainitsdominantrole.
2.MPCtotakekeydecisionsoninterestratechanges,andisdecidedbythecentralbankGovernoronadviceofthetechnicaladvisorycommittee.
3.GovernmentandRBIhavealreadysignedamonetarypolicyframeworkthathassetaninflationtargetof4percent.
4.MPCcomprisesofSevenmembers,threefromtheRBIandthreegovernmentnominees,withtheRBIGovernorhavingthecastingvote.
5.Underthecurrentsystem,RBIGovernorisappointedbythegovernment,butcontrolsmonetarypolicyandhasvetopowerovertheexisting
advisorycommitteeofRBImembers.
TheIndianExpress
Needtocheckflawsinbankingsystem:Rajan
Thebankingsectoriscurrentlystrugglingwithhighnonperformingassets(NPAs)
1.RBIGovernorsaidthereisaneedtocheckflawsinthebankingsystemtoensurethatdefaultersarenotletoffscotfree.
2.Calledforfocusinimplementationofeconomicreformsandimprovingcapacityateverylevelofeconomyandvillage.
3.Hestressedontheroleofgovernmentspendinginrevivinggrowth,especiallybecauseexportsarenotdoingaswellasinthepast.
4.Therearecertainaspectslikemacrostability,humancapital,businessenvironment,taxation,judiciaryandallocatingresourcesthatplayakeyrole
inboostingoureconomy.
5.NeedtoconstitutestatelevelcoordinationcommitteestomonitorunregisteredandillegaloperatorswiththeChiefSecretary,DGPandDistrict
Collectorsinthecommittees.
Whatistheneutralrealinterestrate?

TherealpolicyrateinIndiaisclosetotheneutralrealinterestrate,reinforcestheviewthatRBIwilldesistfromfurtherratecutsuntiltheendof
nextyear
1.TheRBIhassaidthattheneutralrealinterestrateinIndiashouldbe1.52%forthisstageofeconomicrecovery.
2.Thismeasureistherateatwhichdesiredsavingsequaldesiredinvestmentsortherateatwhichgrowthisclosetopotentialandinflationisstable.
Whyisitimportant?
AsNomuraeconomistspointout,summingupobservationsfromarecentRBIstaffworkingpaper,ifprojectedinflationishigherthanthe
inflationtarget,thentheactualrealratesmustbehigherthantheneutralrealratetoensurethanmonetarypolicyisantiinflationary.
LiveMint
JapanoffersIndiasoftloanfor$15bnbullettrainvirtuallyfree
TokyospushinIndiacomesjustweeksafteritlostouttoChinaonthecontracttobuildIndonesiasfirstfasttrainlink.
1.JapanhasofferedtofinanceIndiasfirstbullettrain,estimatedtocost$15billion,ataninterestrateoflessthan1percent.
2.Tokyowaspickedtoassessthefeasibilityofbuildingthe505kilometrecorridorlinkingMumbaiwithAhmedabad.
3.JapansdecisiontogivevirtuallyfreefinanceforModispetprogrammeispartofitsbroaderpushbackagainstChinasinvolvementin
infrastructuredevelopmentinSouthAsia.
4.ThetwoprojectsarepartofaDiamondQuadrilateralofhighspeedtrainsover10,000kmoftrackthatIndiawantstosetupconnectingDelhi,
Mumbai,ChennaiandKolkata.
DiamondQuadrilateralisaprojectoftheIndianrailwaystoestablishhighspeedrailnetworkinIndia.Thisquadrilateralwillconnectthefourmetro
citiesinIndia,i.e.Delhi,Mumbai,ChennaiandKolkata.
TheIndianExpress
Tourismsectoragoldminetobeexplored:PM
1.PMstressedtheneedforimprovingthetourismsectoracrossthecountry.
2.TheCentralgovt.isfocusingonstrengtheningthefacilitiesateverytouristdestinationandtransitpoints.
3.Tourismisoneofthefastestgrowingsectorsinthecountryandithadthepotentialtoofferemploymentopportunitieseventothepoorestofthe
poor.
4.ThePMemphasisedtheneedforbuildingworldclassinfrastructuretoattracttouristsaswellasmakingthetourismsectorsustainable.

Vistaraaimsforthesky,butneedstodogroundwork
Boggeddownbyitspoornetworkandsmallsize,theairlineisnowrethinkingitsplans
1.Ninemonthsafteritslaunch,Vistaraseemstohavereturnedtothedrawingboard.
2.Vistarahasanaveragepassengerloadfactorof60percentascomparedtotheaverageof82percentinotherairlines.
3.Theairlineisclearlynotdrawingthecrowdsthewayithadanticipated.
4.Vistaradistinguisheditselfbyofferinghigherfaresthanthecompetition,butnowithasbeenforcedtomatchupitseconomyclassfareswiththose
ofthenofrillscarriers.
5.VistaraisanIndianairlinebasedinGurgaonwithitshubatDelhiIndiraGandhiInternationalAirport.
Thecarrier,ajointventurebetweenTataSonsandSingaporeAirlines.Vistarawasthefirstairlinetointroducepremiumeconomyseatson
domesticroutesinIndia
BusinessStan
GapwideningbetweenruralandurbanIndia
Despitetwosuccessiveyearsofdrought,overallfoodinflationinIndiahasremainedtepid.
1.Inflationhasbeenslowingbothinruralandurbanareas,awideningdifferencebetweenthetwoasruralinflationisdeceleratingatamuch
slowerpace.
2.Theresultantgapbetweenruralandurbaninflationhasmorethandoubledoverthelastoneyear,byHSBCGlobalResearchshow.
3.TheexcessinflationinruralIndia,isarisingfromfood,fuel,transportationaswellasfromcoreinflation.
4.Thedifferencebetweenruralandurbaninflationismoststarkforfuelandtransportation,followedbycoreandtoalesserextentfood.
5.RuralIndiasfuelmixismoregearedtowarddomesticallyproducedfirewood,chipsandbiogasinputs,whicharenotapartoftheglobaldeflation
cycle.
Higherinvestmentinruralinfrastructureandmeaningfulagriculturalreformsareneededtomakegrowthweatherproofandputitonahigher,
moresustainablepath.Godavaritobedeclarednationalwaterway
ItwouldlaythefoundationstoneforfourlaningthenationalhighwayfromYadagiriguttatoWarangal.
1.TheCentreagreedtoincludethestretchoftheriverGodavarifromNasikinMaharashtratoRajahmundryinAndhraPradeshintherevised
NationalWaterwaysBill,2015.

2.TheNationalWaterwaysBillwastabledintheparliamentinMayfordeclaringanadditional101inlandwaterwaysasnationalwaterways.
3.ThebillwasexaminedbytheParliamentaryStandingCommitteeonTransport,TourismandCulture.
4.Itrecommended,arevisedbillbetabledduringthenextsessionbyincludingthestretchofGodavarifromNasiktoRajahmundry.
InlandWaterwaysAuthorityofIndia(IWAI)isthestatutoryauthorityinchargeofthewaterwaysinIndia.WorldrecognisesIndiasstrongstanding
amidglobaleconomicturmoil
Fromeconomicpointofview,today,worldislookinguptoIndianotonlywithsenseofhopebutalsosatisfaction.
1.PMannouncedthataseriesofbankingsectorreformswereinthepipelinethatwouldboostgrowthinruralareas.
2.Effortsarebeingmadetomakebankingpremisesless,paperlessandeventuallycurrencyless,therebycurbingblackmoneymenace.
3.Thegovt.hasplanstoinfuseRs.70,000croreinthePSBsinthenextfewyearstohelpthemdealwiththedistressedassetsissue.
4.TheglobalratingagencyS&PhasretainedthesovereigncreditratingforIndiaatBBBwithstableoutlook.
IndiastillwaitingforEconomicUnion?
1.FinanceministerArunJaitleyhasonceagainreiteratedtheneedforfreemovementofgoodsacrossthecountry.
2.ThecheckpostsatstatebordersareaninsulttounitedIndia.
3.Thebestwaytopullthemdownisthroughaflatgoodsandservicestax(GST),asmosteconomistsrealize.
4.Thetechnicalissuesaremoreorlesssettled.
5.Itishightimethatthefractiouspoliticalclassclosesadealthatallagreetobuthavebeenblockingfortacticalreasons.
Aslewoffreetradeagreementsarebeingsignedacrosstheworld.TheIndiangovernmenttooisbusyinafewnegotiationsofthistype.Thatis
neededasitwillhelpIndiatakeadvantageofglobalopportunities.
ButevenmoreimportantistheneedforIndiatostrikeafreetradedealwithitself.
LiveMint
NeedforaninsuranceindextomeasurefinancialandsocialprogressinIndia:study
DistributionisthekeytoenhancinginsurancepenetrationinIndiaasdistributorsplayapivotalroleineducatingandadvisingclients
1.ThereisaneedtosetupaninsuranceindexinIndiaforinsurancepenetrationtobequantifiedasameasureoffinancialandsocialprogress.
2.Byincludinginsuranceparameter,itispossibletogetamoreholisticviewoftheextentoffinancialunderpenetration.
3.At3.9percent(201314),insurancepenetrationinIndiaagainsttheworldaverageof6.3percentlargelyduetolimitedfinancialawareness

andliteracy
4.Indiaisfarbehindadvancedeconomiesoninsurancedensity,whichismeasuredasaratioofpremiumtototalpopulation.
5.Insurancepenetrationmeasuredas,aratioofpremiumtogrossdomesticproduct(GDP).
Governmenttryingtoincreasedomesticopiumproduction
MadhyaPradesh,RajasthanandUttarPradesharetheonlythreestatesallowedtogrowopiuminthecountry.
1.Indiaisoneofthefewcountriesthatlegallygrowopiumpoppyandtheonlycountrywhichlegallyproducesopiumgum.
2.Opiumpoppyplantisthesourceofopiumgum,whichcontainsseveralindispensablealkaloidssuchasmorphine,codeineandthebaine.
3.Morphineisthebestanalgesicintheworld,Codeineiscommonlyusedinthemanufactureofcoughsyrups.
4.Thelicencingpolicyallowscultivatorstoovershoottheiractualareaundercultivationbyonlyupto5percent,failingwhichtheirlicencewillnotbe
renewedthenextyear.
Barcodingnormmayhit1,000pharmacompanies
ThebattleforaccesstoaffordableIndiangenericdrugshasanewthreat:barcoding.
1.PharmaceuticalcompaniesinIndiaareexpectedtocomplywithmandatorybarcodingofmedicinestrips,asperdirectivesoftheCommerce
Ministry.
2.FromOctober1,themedicinestripsandcontainerswillbeexpectedtohaveaparentchildrelationship.
3.Thismeans,barcodewillensurethateveryuniquestripofdrugwillgointoauniquesecondarypackage(containingtheprimarypackofdrugswith
safetyinstructions).
4.AimistotracktheoriginsofashipmentandtocurbthedistributionofspuriousdrugsasthosemanufacturedinIndia.
5.Nearly1,000smallandmediumsizedpharmaceuticalfirms,accountfor40percentofIndiastotaldrugexportswillbeoutofbusiness.
CanindiacreatethenextgoogleopenCurrentstatusofStartupsinIndia:
IndiaisthelargestincubatorinAsia,3rdbiggestintheworld.
Indianstartupshavereceivedmorethan$3.5billionintheventurefundingduringJanJun2015.
UShascitedregulatoryhurdles.Whatarethesolutions?
Clearandsimplerules
TaxtreatywithUS,becausemostinvestmentsareroutedthroughMauritiusorSingapore.

Thefavourablecapitaltaxgainsexemptionisavailablethroughthesecountries,incaseinvestorwanttoexit.
Azerocapitalgainsregimewillincreasetheflowssubstantially.
Introducebankruptcycode/law.
Simplifycompanycreation.
Streamlineissuesexits&liquidity.
Whatissospecialaboutstartups?
InUS,theyareresponsiblefor2/3rdofjobs.
Indianstartupswillemploymajorityofthe10lakhyouththatjointheworkforceeverymonth.
TheIndianExpress
Indiabagsthirdslotinglobalstartupspace
Indiahasemergedastheyoungeststartupnationintheworldwithover72%offoundersarelessthan35yearsold.
1.Thecountryhaspresenceofmorethan4,200startups,makingitthe3rdlargeststartupbaseworldwide.
2.Thesectorgrewattherateof40%overthelastyear,overtakingIsrael.
3.Around1,200techstartupswerebornintheyear2015,outofwhichmorethan50%focusonecommerce,consumerservicesandaggregators
business.
4.Bengalururemainsthehotdestinationforentrepreneurstolaunchtheirbusinessandwasranked15globally.
ReasonsforgrowthofStartupsinIndia:
InvestmentbybusinesstycoonslikeRatanTataandAzimPremjiinstartups.
Rapidincreaseintheavailabilityofriskcapital.
LargeIndianenterpriseshavealsoformeddedicatedcorpustoinvestinstartups.
ImpactsofStartupsonIndia:
ItiscontributingtotheIndianeconomyinmanyways.
Itispositivelyimpactingthelifestylesofcitizens.
TheyarecreatinginnovativetechnologysolutionsthatareaddressingthekeysocialproblemsthatIndiaisfacing.
NobelPrizeinEconomicsgoestoAngusDeaton

Mr.DeatonfromPrincetonUniversitywasawardedforhisanalysisofconsumption,poverty,andwelfare
1.Bylinkingdetailedindividualchoicesandaggregateoutcomes,hisresearchhashelpedtransformthefieldsofmicroeconomics,
macroeconomics,anddevelopmenteconomics.
2.HedevelopedtheIdealDemandSystem,awayofestimatinghowthedemandforeachgooddependsonthepricesofallgoodsandonindividual
incomes.
3.TheeconomicsawardofficiallyknownastheBankofSwedenPrizeinEconomicSciencesinMemoryofAlfredNobelwasntcreatedbyNobel,but
bySwedenscentralbankin1968.
Fromplatetoplough:Doesanyonelovethefarmer?
Agriculture,wherealmosthalfofIndiasworkforceisengaged,continuestobeinthedoldrums.Andnooneseemstobeperturbedaboutit.
Thatspatheticandtragic.

Since201213,agricultureislimping,partlyduetodroughtsandpartlyduetothecollapseincommodityprices.
GovernmentofficialsviewiththeRBIintakingallthecreditfortaminginflation,especiallyfoodinflation.
Ifpolicyinstrumentsaresopowerfulthen,howpricesofonionsandpulses,havegoneupbymorethan50percentinasingleyear?
WhatAnalysisandreportssayabout?
Analysisshowsthatalmosttwothirdsofthedeclineinfoodinflationhasresultedfromthefallinglobalprices.
Thisisleadingtoadeclineinagriexports,risingimportsandfallingfoodinflationathome.
Theaveragegrowthofagricultureduringthefirstfouryearsofthe12thFiveYearPlanisgoingtobeonlyaround1.5percent.
WhatistheroleofpublicpolicyandSolutionstoresurrectAgrieconomy?
First,weneedatruechampionofagricultureintheUnioncabinet,someonewhohasaclearvisionandthecommitmentandpassiontotapthe

fullpotentialofIndianagricultureinaglobalsetting.
Second,itisabouttimetheCentredeclaredadroughtintheworsthitstates,likeMaharashtra,Karnataka,MadhyaPradesh,Gujarat,Uttar
Pradesh,Bihar,HaryanaandevenPunjab.
TheCentreshouldaskthestatestoassessthedamagesinthenexttwoweeks.
Further,theassessmentsbeingmade,basedonthedegreeofdamage,theCentreshouldfrontloadthecompensationpackage.
Cropinsuranceneedstoberesurrected.Andfarmersshouldbemainstreamedsothattheyavailoflifeinsuranceschemes,theAtalpension
scheme,etc.
ThesemeasureswillrevealthePMsconcernandcompassionforthefarmingcommunity.Itwouldbegoodeconomics,aswellasgoodpolitics.
TheIndianExpress
TwelvePacificRimcountriesinkTPPagreement
1.12otherPacificRimcountrieshavesignedTransPacificPartnership(TPP)agreementwhichcoversabout40percentoftheworldeconomy.
2.ThefinalagreementwassignedinAtlanta,USwhichwasundernegotiationforfiveyearsandwasdelayedrepeatedlybynegotiationsoverdrug
patents.
3.ItshouldbenotedthatChinabeingworldssecondlargesteconomyhasbeennotpartoftheagreement.
4.TPPagreementwillpavewaycreationofaneweconomicblocwithreducedtradebarriersbetweenthe12nationsinvolved.
These12countriesare:Singapore,Malaysia,Vietnam,BruneiDarussalam,Japan,Canada,UnitedStates,Mexico,Peru,Chile,AustraliaandNew
Zealand.
NYT
ICRISATintroducesfingermilletasmandatecrop
TheICRISATgenebankholdsnearly6,000fingermilletgermplasmaccessionsfrom24countries,conservedforuseinresearchand
development.
1.Fingermillet,whichfiguredamongthesixsmallmilletsinresearchportfoliooftheInternationalCropsResearchInstitutefortheSemiArid
Tropics(ICRISAT).
2.Itprovideseconomicopportunityforsmallholders.
3.HarnessingOpportunitiesforProductivityEnhancementofSorghumandMilletsinSubSaharanAfricaandSouthAsia(HOPE)projectfundedby
theBill&MelindaGatesFoundation.
4.ShowingencouragingresultsinimprovingproductivityoffingermilletandhouseholdincomesinEastAfrica.

5.ICRISATscientistsinEastandSouthernAfricanregionhavegeneratedawholegenomesequenceoffingermillet.
InKarnatakafingermilletisamongtheclimatesmartcropsthatfigureshighontheagendaofthegovernment.RBIactionstobringannualFPI
fundsofRs.48,000crore
1.TherecentmonetarypolicyreviewcouldattractanaverageannualflowofRs.48,000croreingovt.bondsfromoverseasinvestorsforthenext
fewyears.
2.Thisgraduallyaugmenteddemandforgovt.bondswillhaveasustained,salutaryimpactonbondpricesorsustaineddeclineinyields.
3.ThelimitsforFPIinvestmentingovt.securitieswillbeincreasedinphasesto5%oftheoutstandingstocksbyMarch2018.
4.ThemeasuretoenhanceparticipationinstatedevelopmentloansbybringingtheFPIinvestmentto2%byMarch2018,arelikelytoenhancethe
marketappetite.
5.TheratingagencyIndiaRatings,expectstherupeetooutperformmostemergingmarketcurrencies.
Exportsoftop5sectorsdip25%inAugust
1.Exportsoftop5sectorsviz.engineering,petroleum,gemsandjewellery,textilesandpharmaceuticalsfellbyabout25%,duetoglobaldemand
slowdown.
2.Thesefivesectorsaccountedforabout65%ofthecountrystotalmerchandiseexportsin201415.
3.Thesearelabourintensivesectorsandgovt.shouldannouncestepstocontainthedipinoutboundshipments.
4.Thecontinuousdeclineinexportsisexpectedtoimpactjobsandputpressureonthecurrentaccountdeficit.
Indiahasaimedattakingexportsofgoodsandservicesto$900billionby2020andraisingthecountrysshareinworldexportsto3.5%from
2%.
Totalexportsinthepast4financialyearshavebeenhoveringataround$300billion.
WTOlowersworldtradegrowthestimate
WorldTradeOrganisation(WTO)revisingitsprojectionsforgrowthinworldtradedownwards.
1.Earlier,WTOhadpredictedasubduedrecoveryinworldtradegrowthwasestimatedtoimprovefrom2.8percentin2014to3.3percentin2015.
2.CommerceMinistryhadanambitioustargetofdoubleIndiasexportsingoodsandservicesfrom$465billionto$900billionoverfiveyears.
3.Therecertainlycanbeacaseforshorttermameliorativemeasures.
4.Someofthemajorexportsectorsareemploymentintensiveandiftheysuffer,thiswillhaveabitofadominoeffect.

5.Tradepolicysays,needtomoveawayfromsubsidiesandaddressingchallengesrelatingtoproceduralhurdles,transactioncostsand
infrastructuredeficits.
Custom
ThenameisRajan,RaghuramRajan
Rajancancertainlyjustifytheswaggerwithwhichhespokeatthepostpolicypressconference
1.MynameisRaghuramRajanandIdowhatIdo,jokedtheRBIgovernorwhenaskedwhetherthecentralbanksoutlookwashawkishwhilethe
policystatementisdovish.
2.Inonecleanshot,RBIhassilencedcriticswhowereinsistingthatgrowthintheeconomywasbeingheldbackbythehighrealinterestratesinthe
economy.
3.RBIsdecisionwasdrivenbyanumberofdomesticandglobalfactors.
4.Domestically,theenablingfactorsforaratecuthadbeenputinplace,withconsumerpriceinflationremainingincheck.
5.Theebbingofinflationintheyearsofarisduetoacombinationoflowmonthonmonthincreasesinpricesandfavourablebaseeffects.
6.Growth,remainssluggish,forcingthecentralbanktobringdownitsgrowthprojectionfor201516to7.4%fromtheearlierforecastof7.6%.
7.Underlyingeconomicactivity,remainsweakonaccountofthesustaineddeclineinexports,rainfalldeficiencyandweakerthanexpected
momentuminindustrialproductionandinvestmentactivity.
8.Keepingthosetwodomesticfactorsinmindagainstthebackdropofaweakeningglobaleconomy,Rajanappearstohavetakenaleapoffaithand
frontloaded50basispointsinratecuts.
RajanannouncedthatRBIwillgraduallyincreasetheforeigninvestmentlimitincentralgovernmentbondsto5%oftheoutstandingstockof
governmentsecuritiesbyMarch2018.
LiveMint
GovernmentannouncedthemergerofFMCwithSEBIAmovetoboostderivativesregulation&encouragemorecompetitionandbetterprice
convergence.
1.AmalgamationofForwardMarketCommission(FMC)andSEBIwouldbringconvergenceofregulationsinthecommoditiesandequity
derivativesmarkets.
2.SEBIneedstohaveapropermechanismtocaptureanyaberrationsinthephysicalmarketthatwoulddisruptthederivativesmarket.
3.SEBIhascreatedaseparateCommodityCellandhassetupnewdepartmentsforregulationofcommoditiesderivativesmarket.
4.AninternalcommitteewasearliersetupatSEBItoevaluateandsuggestregulatorychangesformergerandpreparearoadmapforthesame.

1.AgroupofinvestorsfromtheUSexpressedinterestininvestinginthehighwayssectorinIndia.
2.InvestmentsopportunitiestothetuneofRs60,00070,000croreformaintainingcompletedhighways&newprojects,estimatedat$45billionunder
theNationalHighwaysDevelopmentProgramme.
3.TheinvestorswerekeenonoperationscontractsforcompletedstretchesofpublicfundedhighwaysontheTOT(tolloperatetransfer)basis.
4.Itwouldhelpthegovernmentmobiliseadditionalresourcesfornewhighwaysacrossthecountry.
5.UndertheTOTmodel,completedstretchesofhighwaysbytheNationalHighwaysAuthorityofIndia(NHAI)oraconcessionairewillbebidoutto
theprivatesectorforaconcessionperiodof30yrs.
6.Abigpushintheroadssectoriskeytothegovtsinfrastructurefocus,whereinithastargettoawardhighwayprojectsworthRs3.5lakhcrore.
TheIndianExpress
ADBseesslowergrowthforAsiaGrowthindevelopingAsiawilllikelybeslowerthanpreviouslythoughtasaslowdowninChinaseconomyhurts
demand.
1.DevelopingAsiaisnowexpectedtogrow5.8percentand6.0percentthisyearandin2016,downfromtheADBsJulyforecastof6.1percentand
6.2percent.
2.Theregion,whichgroups45countriesinAsiaPacific,grew6.2percentin2014.
3.FearsofaChinaledglobalslowdown,whichhadsentglobalstockmarketstumbling,promptedtheU.S.FederalReservelastweektoholdoff
onraisinginterestratesforthefirsttimeinalmostadecade.
4.CapitaloutflowscouldaccelerateaheadoftheFedratehikeandurgedpolicymakerstostrengthenfinancialsystemsintheregiontomitigate
shocks.
5.Indiasgrowthisseenweakerat7.4percentand7.8percentforthisyear.
Reuters
Merchandiseexportstodeclinebyover13%inFY16
1.Indiasmerchandiseexportsin201516areforecasttodeclineto$265268billion,significantlylowerthan$310.5billioninthepreviousfiscal.
2.Thisismainlyduetosharperosionincommoditypricesglobally.
3.Theglobalmerchandiseeconomyhasmovedtoabearishandlowcostsituationwheredemandrelatesmainlytotheactualconsumption.
4.Thereisnosentimentbuilduparoundcommoditiesandthusthedemandisactuallyrestrictedtotherealconsumption.
5.Indianexportshadachievedalandmarkof$300billionin201112forthefirsttime,makingthecountryasizeableplayeringlobalexports.
IndianRailwaysdevelopshybridvacuumtoilets

1.DevelopmentCelloftheRailwayBoardhascomeupwithadesignthatcombinestheadvantagesofvacuumtoiletsandbiotoiletstocreatea
newdesignofahybridvacuumtoilet.
2.Theconceptofahybridvacuumtoiletisafirsteversystemofitskindtohavebeendevelopedandbuiltbyanyrailwaysystemintheworld.
3.TheprototypeconsistsofacustomdesignedVacuumtoiletadaptedfromacommerciallyavailablevacuumtoiletthatisusedinaircraftswhich
evacuatesitsdischargeintoabiodigestertankwhichisnowsuccessfullyproveninthebiotoiletsofIndianRailways.
Rememberthisyearsprelimquestiononbiodigesters!
PIB
RBIsstepstocreatesmallbanks
1.RBI,hasselected10financialinstitutionstosetupseparatesmallbankstolendtosmallbusinessesandfarmers,whotypicallystruggletoget
fundingfromtraditionallenders.
2.PrivateequitybackedUjjivanFinancialServicesPvtLtdandJanalakshmiFinancialServicesPvtLtdwereamonginstitutions.
3.Morethan100millionpeopleinthecountryworkatsmallbusinessesbutonlyabout4percentofsmallbusinesseshaveaccesstoinstitutional
finance.
4.Thewinnerswillinfuturebeabletobecomefullyfledgedbanksdependingontheirperformanceandiftheycomplywithrulesforbanks.
Reuters
Endingchildlabourby2025farcical
1.Globalleaderswillthismonthpledgetoendby2025,aspartoftheU.N.SustainableDevelopmentGoals(SDGs)toimprovethelivesofthe
poorest.
2.Indiahasintroducedlawstoprotectchildrenandensuretheirschooling,aswellasarangeofsocialwelfareschemes.
3.Censusdatashowstherewere4.35millionlabourersagedbetweenfiveand14in2011against12.66millionadecadeago.
4.InternationalLabourOrganization(ILO)reportputsthenumberofchildworkersinIndiaagedbetween517at5.7million,outof168million
globally.
5.Morethanhalfareinagriculture,toilingincotton,sugarcaneandricepaddyfieldswheretheyareoftenexposedtopesticidesandriskinjuryfrom
sharptoolsandheavyequipment.
6.Childrenwhohelptheirfamilyorfamilybusinessescanworkoutsideschoolhours,andthoseinentertainmentorsportscanworkprovideditdoes
notaffecttheireducation.
7.ThegovernmentsaidtheexceptionsareaimedatstrikingabalancebetweeneducationandIndiassocioeconomicreality.

8.Allowingchildrentohelpparentsinfamilyworkalsoprovidesskillsdevelopmentforthechildandsuccourforthechildaswellasthepoorparents.
Reuters
WorldBankranksGujaratasmostinvestorfriendlyState
1.GujarathascomeoutontopintheWorldBanksfirsteverrankingofStatesontheeaseofdoingbusinessinIndia.
2.TherankingsreflecttheeaseofdoingbusinessintheseStatesbythesmallandmediumenterprisesratherthanforeigninvestors.
3.GujaratisfollowedbyA.P.,Jharkhand,ChattisgarhandM.P.
4.Thesestatesperformedwellintermsofepaymentoftaxesandreforms,constructionpermits,easeofbusinessandenvironmental
clearances.
5.Thelargestrecipientsofforeigninvestments,MaharashtraandTamilNadu,arerankedeighthandtwelfthwithlessthan50%scores.
RestructuringtheDoPforfinancialinclusion
AcorporatestructureforDoPmayallowdifferentwhollyownedsubsidiariestocarryoutspecificcommercialactivities

1.TheRBIslicenceforpaymentsbanktoIndiaPostshouldseparatethebankingbusinessfromvariousotherservicesprovidedbyDoP.A
commercialfocusonthebankingbusinessisdesirableforviabilityandefficiency.
2.WithRBIslicencecomestheconditionthatIndiaPostcannotacceptdepositsofmorethanRs.1lakhperaccount.
3.ConcernsexpressedbyPublicsectorbanks(PSBs)aboutincreasingcompetitionfortheirlowcostcurrentandsavingsdepositsonaccountof
paymentsbanksareentirelymisplacedbecauseDoPwasalreadyinthisbusinessbefore,norwouldotherpaymentsbanksmakethingsworse
forPSBs.
4.RBIsinsistenceonchargingATMwithdrawalsandimposingabsolutelimitsondepositsperaccountmaydiscouragepeoplefromdoingbusiness
withpaymentsbanks.
5.Openingabankaccountisonlyanecessaryconditiontoachievefinancialinclusion.
6.Thesufficientconditionistoensurethatallneedyhouseholdsgetadequateinstitutionalcreditandinsurancecoverataffordablecosts.
7.TheexperienceofcommercialbankingforacoupleofyearswouldhaveenabledIndiaPosttoimproveitsoperationsandbecomeamajorplayer

inruralareas.
AcorporatestructureforDoPmayallowdifferentwhollyownedsubsidiariestocarryoutspecificcommercialactivities,utilizingthenetworkofpost
officesonarentalbasis.Thiswouldenhancethequalityofservicesprovidedwithcostefficiencyandcommercialviability.
CanwediscussifDoPisthefutureforruralfinancialinclusion?
LiveMint
UtilisingMSMEsasenginesforgrowth
ItisworthconsideringwhethermoneylenderscanbebroughtunderregulationandaninterestcapbeimposedforlendingtoMSMEs,asisthe
caseinJapan.
1.RecentgrowthdataforIndiarevealsthattherehasbeenasignificantslowdownintheindustrialgrowthrate,especiallymanufacturing,inthe
firstquarter,AprilJune,2015.
2.AccordingtoAnnualReport(AR)oftheRBI,grosscapitalformationhasbeendecliningovertheyears,especiallyhouseholds.The
performanceoftheagriculturesectorhasalsobeenslowerduetouncertainrains.
3.Incontextofcontinuinguncertaintyintheagriculturesectorbecauseofsubstantialdependenceonrainfedirrigation,analternativepowerpack,
unutilised,ismicro,smallandmediumenterprises(MSMEs).
4.MSMEsaregenerallylabourintensive,theyhavethecapabilitytocreatemorejobstocatertoayoungdemographiccountrylikeIndia.
5.Supplysideeffortsisinaction,butneedistogeneratedemandsiderequirementfromthegeneralpublictosetupMSMEs.Therefore,thereis
needtonurtureentrepreneursfromayoungage.
6.IfthecountryhastosuccessfullylaunchtheMakeinIndiaprogramme,itneedstotrainyoungentrepreneurs,inadditiontodevelopingskillsatskill
developmentcentres.
MSMEsmainproblemisfinance
1.JanDhanYojana(JDY)couldbeusedtodirectfinancialresourcestotargetedMSMEs.
2.InthecaseofJapan,thegovernmenthasimposedacaponinterestratesonloansthatamoneylenderextendstoMSMEs.
3.Itisworthconsideringwhethermoneylenderscouldbebroughtunderregulationnow,giventechnologicalprogress,asachievedinthecaseof
Japan,andaninterestcapbeimposedforlendingtoMSMEs.
4.TheroleoffinancialeducationisveryimportantforMSMEsinassessingappropriatestartupfinanceandinempoweringthemtousefinancial
productsandservicestomanagerisksandotherbusinessneeds.

5.SkilldevelopmentthroughtrainingprogrammsofbankersisalsonecessaryforassessingMSMEsthatcanbebankfinanced.
BridgingtheNorthEastforActEastCanNortheastbecomeeconomichubofIndia?Whatfactorspromoteorpreventfromthathappening?

SoutheastAsiaandEastAsiahavebecomethemostdynamiccomponentsofIndiasexternaleconomicrelations.
1.GeographywiseTheregionsharesmorethan4,500kmofinternationalborder,impartsacriticalroletoIndiasNortheastinthepursuitofany
plantofostereconomicintegrationwithbothSouthandSoutheastAsianneighbours.
2.Theselandbordersalsobecomeimportantforensuringbordersecurityandmaintainingpeaceandtranquility.
3.TheNortheastisconnectedtotherestofIndiathroughthenarrowSiliguricorridorquiteappropriatelycalledtheChickensNeck.
4.ThefirstneedtoimproveconnectivitybetweentheNortheastandtherestofIndiathesecondwouldbetoenhanceconnectivitywithinthe

Northeastitselfandthethirdwouldbetoestablishnewcrossbordertransportandcommunicationlinkswithneighbours.
5.TherehastobeamasterplanforlinkingalltheNortheasternstatestogetherwithanetworkofroad,railandairlinks.
6.Northeastconnectivityhasnotbeengivenmuchattentionsofar,butwithoutprogressinthiscategory,theActEastpolicywouldnotbringeconomic
benefitstotheregion.
7.Crossborderconnectivityneedstobefocus.ThereisanambitiousTrilateralHighwayProjecttolinkIndia,MyanmarandThailand,with
possibleextensionstoLaosandVietnam.
8.EconomicintegrationwithlargerEastAsiasuchasthroughtheBangladeshChinaIndiaMyanmar(BCIM)corridorwouldthenbepossibleon
moreequalterms.
Ifallthesecomesintorealpicture,theneconomicallyvibrantsubregionaleconomiczonewouldemerge,withtheNortheastasitshub.
BusinessStan
Indiasglobalhubfearsmorejoblosses
1.Nearlyhalfadozenlargediamondcompaniesinthecityhavecloseddown:asignificanthitforanindustrythatemploysnearlyamillion
peopleinIndia,twothirdsoftheminSurat.
2.Chineseconsumerspullbackfromluxurypurchases,leavingjewellerswithstocksofunsoldjewelleryandgems.
3.JobsareacriticalissueforIndiasgovernment,strugglingtoreviveeconomicgrowthtoaratethatwillcreateemploymentformillionsjoiningthe
workforceeveryyear.
4.ChinarepresentsfifthoftheworldpolisheddiamondmarketandaccountsforthesameproportionofIndias$23billionofannualexports.
LessonsfromdroughtinMarathwadaWateravailabilityhasnotdeterioratedonlybecauseofthepoormonsoon.AmartyaSensseminalworkon
Famine
1.Massstarvationisnotnecessarilytheresultofinadequatefoodsupply.Heopenedupnewareasofinquirythatfocussedonwhathavecometobe
knownasentitlementfailures.
2.SenhasfamouslyarguedthathumanmistakesforcedpeopleintostarvationinBengalin1943eventhoughfoodproductioninthatyearwashigher
thanitwasin1941.
3.ManypartsofIndiaarenowbattlingseveredrought.Thereisnodoubtthatthewatercrisisintheseareasisbecauseofamonsoonfailure.
4.Yet,themaininsightfromSensworkonfaminesappliestodroughtaswell.Villagesareparchednotonlybecauseoferraticrains.Thepolitical
economyofwateruseintheregionalsodeservesmorepublicattention.
5.OneofthebestexamplesofthisrightnowistobefoundintheparchedMarathwadaregionofMaharashtra.

Thenwhatswrongwithfarmers?
1.Therainshavefailedforthesecondyearinarowbutwateravailabilityhasalsodeterioratedbecauseoftherapidspreadofwaterintensive
sugarcanecultivation,promotedbylocalpoliticalelites.
2.SugardominatesthepoliticaleconomyofruralMaharashtra.Thesuccessfulspreadofsugarcooperativesinthewesterndistrictsofthe
state,especiallybecauseoftheeasyavailabilityofwateraswellasthehighsocialcapitalthathelpedthecooperativemovement.
3.Cooperativeshavenowbeencapturedbypowerfulpoliticianswhothenusetheirhefttogetsubsidiesforsugarcanefarming.
4.Therearenow61sugarmillsinMarathwada,regionaccountsforaroundtwothirdsofthetotalsugarproductioninMaharashtra,ifthedry
districtofSolapurisalsotakenintoaccount.
5.OneResearchestimatesthatthetotalwaterrequiredforsugarcanecultivationinMarathwadais4,300millioncubicmetres(mcm),ordoublethe
storagecapacityofthelargestdamontheGodavariintheregion.Justcrushingthisyearsstandingcropwillneed17mcm,enoughtoprovide
drinkingwaterto15.85lakhpeopletillthenextmonsoon.
6.Thelongertermissuesalsoneedtobehonestlydebated,fromfiguringoutwaystopricewatersothatwaterintensivecropsdonotget
implicitsubsidiesindryregionstohelpingfarmersshiftoutofsugarcanetocreatingapublicculturethatprivilegeswater
conservation.
7.AninterimsolutionsuggestedbyformerchiefministerPrithvirajChavaniseminentlysensible:nomoresugarfactoriesshouldbeallowedtobe
setupinMarathwada.
WatercrisisinMarathwadahighlightsthreeoverlappingissues
1.ThestructuralproblemsinIndianagriculture,theinabilitytoframeadequatepoliciestoavoidatragedyofthecommonsandhowlocal
politicalelitescaptureresources.
2.Thedominantnarrativeaboutamonsoonfailureisthemostimportantone,butitalsoallowsthepoliticalclasstopretendthatentirevillages
havenowaterforreasonsbeyondthecontrolofmerehumanbeingssuchasthemselves.
3.ThewaywaterresourceshavebeencapturedforsugarcanecultivationinMarathwadashowsthatthereisanotherparallelnarrativethat
doesnotabsolvelocalpoliticalelites.
Itisanimportantlessonfortherestofthecountryaswell.
LiveMint
Indiarankslowoninclusivegrowth,developmentinWEFreport
Rankedinthebottomhalfofthe38countriesthatmakeupourlowermiddleincomebracket.

1.IndiasoverallplaceintheGlobalCompetitivenessIndex20142015rankingsis71outof144countries.
2.ParticularlydisappointingisitspositionintermsofFiscalTransfers,whereitranks37thoutof38.Italsoranksverylowat32ndforTaxCode
and36thforsocialprotection.
3.WEFsaidthatIndiawouldneedtoprioritiseimprovementwouldbeAssetbuildingandentrepreneurship,inparticulartheSmallbusiness
ownership.
4.Forbusinessandpoliticalethics,Indiaranks12th,whileitranks11thontheFinancialintermediationofrealeconomyinvestmentpillar,
whichsuggeststhatmoneyinvestedintheeconomygenerallygetsdirectedtowardsproductiveuses.
WhataretheparametersofGlobalCompetitivenessIndex?WhyitisimportantforIndianeconomy?ASHAworkerstodetectfarmersin
depression
TheASHAworkerswillbetaughttogradethefarmersmentalstateundermild,moderateorseverecategories.

1.Inaoneofitskindattempt,thestategovernmentislookingatcontrollingfarmersuicidesbygettingpsychoanalysisquestionnairesfilledby
themandsubsequentlytreatthemfordepression,whereverrequired.
2.Thenewinitiativeunderthementalhealthcellofthepublichealthdepartmentisinabidtoreducefarmerdeathsacrossthe14districtsthat
havebeenmassivelyhitbydroughtinMaharashtra.
3.Trainingwillbeprovidedto20,350accreditedsocialhealthactivists(ASHA)foridentifyingdepressedfarmersandreferringthemforfurther
treatmentatdistrictortalukalevels.
4.ASHAworkersarelocalwomenresidentsknowntothevillagersandareeducatedtillStdVIII.Theywillvisitfarmersfromdoortodoorand
getasetof16questionsansweredinayesoranoformat.
5.Thequestions,preparedbyafourmembercommitteeofpsychiatristswillrevolvearoundthefarmerscropproduce,anyexistingdiseasethat
theymighthave,whethertheyhaveenoughfoodtoeat,financialcrisisandremarksoffamilymembers.

CanyouSuggestmoresolutionstosolvesuicideproblemsoffarmers?
TheIndianExpress
MATtoForeigninvestors:MoreclaritysoughtonPNotes
1.GovernmentacceptingtherecommendationoftheJusticeA.P.ShahCommitteeonapplicabilityofMinimumAlternativeTax(MAT)to
ForeignPortfolioInvestors(FPIs).
2.GovernmenthasdecidedtomakeappropriateamendmentstotheIncometaxAct,whichwouldclarifythatMATprovisionswouldnotbeapplicable
toFPIsnothavingaplaceofbusinessorpermanentestablishmentinIndia,fortheperiodpriortoApril1,2015.
3.PNotesareoverseasderivativeinstruments(ODIs)issuedbyFPIs(earlierForeignInstitutionalInvestors)tooverseasinvestors,whowishto
investinthedomesticstockmarketwithoutregisteringthemselveswiththeSecuritiesandExchangeBoardofIndia(SEBI).
4.Thedecisionwillhelpinrevivingtheinvestorconfidenceandensuringclarityoftaxationinthehandsoftheforeigninvestors.
5.MATwasintendedtobeappliedoncompaniespayingnoorlowtaxeventhoughdeclaringhigherprofits.Itisnotapplicabletoforeigncompanies
nothavingaplaceofbusinessorpermanentestablishmentinIndia.
6.AsalsonotedbytheAPShahcommittee,achangeinthissettledpositioninAugust2014isextremelylateinthedayandisagainsttheintentof
thelegislation.
7.TheFinanceAct,2015attemptedtorationalisethepositionbyprovidingrelieffromMATtoforeigncompaniesoncapitalgains,royalties,interest
andfeesfortechnicalservicesearnedinIndiawitheffectfromApril1,2015.
RBIcrisisfundshortoftarget

Forthelasttwoyears,theRBIhasmadenotransferstoitsContingencyFundoritsAssetDevelopmentFund.
1.ContingencyfundswiththeReserveBankofIndia(RBI),usedincaseofunforeseenshocks,havefallento8.4percentoftotalassets,against
atargetof12percent,asshowninitsAnnualReportfor201415.
2.Forthelasttwoyears,theRBIhasmadenotransferstoitsContingencyFund(CF)oritsAssetDevelopmentFund(ADF).Thebalanceinthese
funds,therefore,hasbarelychangedsince2013,whentheymadeup10.1percentoftotalassets.
3.Thewidertheareaofresponsibilitiesofacentralbank,greatertherisksand,hence,highertherequirementofcapital,thereportsaid.
4.Acentralbankmayrequirerecapitalisation,preciselyatatimewhenthefiscalpositionisunderstrain,say,duetoafinancialcrisis,itadded.
5.TheannualreportalsoshowedthattheRBIhadbeentransferring99.9percentofitsprofitstothegovernment,withoutkeepinganyamountfor
itself.Thisisasharpincreasefromthe4050percentithadtransferredinthe201013period.
6.In2015,theBankofEnglandtransferredamere93poundstothegovernmentwhiletheU.S.FederalReserveisrequiredbylawtotransfermost

ofitsprofitstothegovernment.
LetscheckwhatpurposeservedbyRBIsCFandADF?[opedsnap]Welcomesteponoilfields
1.Thegovernmenthastakenarefreshingandprogressiveapproachwithrespecttotheunutilisednaturalresourceslockedawayinthe69
smallandmarginaloilfieldslyingwiththestateownedexplorationagencies.
2.Approvedtheauctionoftheseoilfieldstoprivate,andevenforeign,companies,andinitiatedanewapproachinthelicensingandproceeds
sharingmechanisms.
3.Thefirststepwastomovefromaprofitsharingmechanismtoarevenuesharingmechanism.Therevenuesharingapproachissimpler,andis
likelytoearnthegovernmentmoremoneyandreducesdelaysanddisputes.
4.Underthenewplan,companieswillbeallowedtosellcrudeoilornaturalgasatmarketprices,withoutanyinterferencefromthe
government.
5.Therevenueandroyaltysharingmechanismwillbepeggedatthismarketrate.
6.Theotherwelcomestephastodowiththelicensingmethod.
7.Companieswillreceiveaunifiedlicenceforallhydrocarbons,includingconventionalonessuchasoilandgas,andnonconventionalones
suchasshaleoilandshalegas.
8.Thisshowsgovernmentsmovetowardsenhancingtheeaseofdoingbusiness.
LetsDigoutprocessofformationofcrudeoil?Shallwe?Indiarelativelyinsulatedagainstdeflation.Why?
Indiaremainsaverybrightspotintheglobaleconomybecausewehavegrowthandwehaverobustunderlyingdemandtrends.
1.Indiaisrelativelyinsulatedfromdeflationarytendenciesduetostrongdemandtrends,butthereisstillaneedtobewatchful.Powerful
deflationaryforcesthatareatworkintheglobaleconomy.
2.TheonerealchallengethatloomsaheadforIndiaseconomyappearsnottobepriceinflationbutpossiblypricedeflation,Dr.
Subramaniansaid.
3.Someofthepublicinvestmentthatwearerampingupnow,strongdemandtrendsandhopefullyareasonablemonsoonwillenableusto
achievethe8percentGDPgrowth,.
4.Withthegovernmentworkinghardtoincreasetheeaseofdoingbusiness,andthestrongdemandintheeconomy,ForeignInstitutional
Investorsarelikelytostartreturningtothecountry.
5.SkillsIndiaisoneprogrammewherehandsonskillstoworkerswillbeprovidedsotheycanjoinindustry,includingtheauto
componentsindustry.

6.Inaddition,thegovernmentisplanninganinvestmentofRs8.5lakhcroreintheIndianRailways,investmentsinroadshavedoubledand
theNationalInfrastructureInvestmentFundwillfurtherhelpinprovidinginvestmentintheinfrastructuresector.
Whatelsedoyouthinkworksforoureconomy?Globalgrowthlikelytobeweakerthanexpected:IMFchief
Ms.LagardesaidAsiaisstillexpectedtoleadglobalgrowth,butthepaceisslowingwithariskofpossiblysaggingfurtherduetorecent
financialmarketvolatility.
TheheadoftheInternationalMonetaryFundsaysglobaleconomicgrowthislikelytobeweakerthanearlierexpectedandwillremainatmoderate
levels.
Asiaisstillexpectedtoleadglobalgrowth,butthepaceisslowingwithariskofpossiblysaggingfurtherbecauseofrecentfinancialmarket
volatility.
Globaleconomicsituationwillhaveasignificantimpactondevelopingcountries,includingIndonesia.
IndiamustencourageentryofRenminbiintoIMFsSDR.Why?IndiahassomethingstolearnfromChina.
IndiashouldseektoemulatetheChinesemodelofdevelopmentthatisbasedonexportsandbuildingreserves.
1.IndiasstrategicobjectiveshouldbetostrengthenmultilateralinstitutionsandusethemtopressureChina.
2.Inparticular,headded,IndiashouldtrytomaketheAsianInfrastructureBankasuniversalaspossibleespeciallyconvincingtheUSto
jointocounterChinasregionalintereststhroughthebank.
3.HetermedtheUSrefusaltojointheBankahugemistake.
4.TheChinesetransition,hesaid,wasoneofahugeshiftingofresourcesfrommanufacturingtoservices.
Custom
Providesubsidytofarmersdirectly,RBItellsgovt
1.Expressingconcernoverdistortionofthecreditcultureinagriculture,theReserveBankofIndia(RBI)haswrittentothegovernment.
2.Themovecomesamidrisingnonperformingassets(NPA)pertainingtothesector.GrossNPAs,aspercentageoftotalagriculturalloans,
increasedto4.7percentasofMarchthisyear.
3.Thegovernmentprovidesthreepercentinterestsubventionforshorttermcroploans,throughbanksthatchargealoweramountfromthe
farmerandgetitreimbursedfromRBIattheendofeveryquarter.
4.RisingbadloansintheinterestratesubventionschemewasaconcernwashighlightedinRBIsrecentlyreleasedannualreport.

5.Thoughthegovernmenthasbeenincentivisingrepaymentofagriculturalloansthroughtheinterestsubventionscheme,thishasnot
helpedimproveassetquality.
BusinessStan
[Discuss]GDPgrowthestimates:Grapplingwithnewcomplexities
LetusfirstunderstandthenewmethodologyonGDPnumbers,changedtoreflectthenewbaseyearof201112againsttheearlieroneof2004
05.
1.Therevisedmethodology,changedthewayGDPnumbershavebeencalculated.Thenewmethodwasusedtocalculatethefiguresfor201415.
2.ThenewnumberschangedGDPgrowthto5.1percentfromtheearlier4.5percentfor201213andFor201415,thegrowthcameat7.3per
cent.
3.Now,GDPistakenatmarketprices.Thisincludesindirecttaxesandexcludessubsidies,quitedifferentfromwhathadbeencalculatedsofar.
WhichwasGDPatfactorcost,whichincludedsubsidiesandexcludedindirecttaxes.
4.TheCentralStatisticsOfficeusespricedeflatorstoconvertnominalGDPintorealGDP,whichisamixofWPI,CPIandotherpriceindices.
Letsdigoutmoreon
1.Whythisnewmethodologycomesintopicturethisyear?
2.WhatisdifferencebetweenNominalGDPandRealGDP?
BusinessStan
RBIdeclaresSBI,ICICIBanksystemicallyimportantbanks
1.RBIhasdeclaredSBIandICICIbanksasDomesticSystemicallyImportantBanks(DSIBs).
2.DSIBsareperceivedasbankswhichareequivalentoftoobigtofallinothercountries.
3.DSIBcategorybanksneedtosetasidemorecapitalperloanthantheirpeerstopreventacontagioneffect,incaseoffinancialcrisis.
4.TheDSIBframeworkrequirestheRBItodisclosethenamesofbanksdesignatedasDSIBseveryyearinAugust,startingfromAugust2015.
5.ThisisinlinetodirectionsofBaselCommitteeonBankingSupervision,toallmembercountriestohavearegulatoryframeworktodealwith
SIBs.
HAMmodelattractsMalaysiandevelopers
Govt.haskickedoffeffortstowooMalaysiancontractors,whohavebeenamongtheearliestinvestorsintheroadssectorinIndia.

Recently,MalaysiancontractorshaveexpressedinterestindevelopingtheDelhiMeerutExpressway(DME),thefirstprojecttobebidunderHAM
model.
1.ThenewlyconceivedHybridAnnuityModel(HAM)isdesignedtomakeinvestmentsinroadprojectsmoreattractiveforprivateplayer.
2.Inthenewmodel,govt.takesalltheriskincludingthetraffic.
3.Asthemodelassuresdevelopersgettingbacktheirinvestment,itisboundtoattractbidsfromprivateplayer.
4.TheHAMmodelwasconceivedinthelastfinancialyeartobringbackprivateparticipationinhighwayprojects.
5.Thegovt.wouldprovide40%oftheprojectcosttothedevelopertostartwork.
6.Theremaininginvestmentshavetobebornebydeveloper.
7.NHAIwillcollecttollandrefundtheamountininstallmentsoveraperiodof1520years.
TheIndianExpress
RBIasksGovttospeedupreformsinbankingsystem
1.RBIwarnedgovt.thatanydelayinreformofthebankingsystemwouldleadtogreaterriskintheeconomy.
2.Heemphasizedtheneedtoincreaseefficiencythroughgreaterentryandcompetition.
3.Hestressedontheneedformoregovt.participationinthecountrysfinancialmarketstoincreasetheirsize,depth,andliquidity.
4.Govt.cancreatesupportingframeworksthatimprovetransparency,contractenforcement,andprotectionsformarketparticipantsagainstabusive
practices.
5.ForacountryasbigandpopulousasIndia,reformscannotbeshotsinthedark,subjectingtheeconomytogreatuncertaintyandrisk.
[opedsnap]Paymentsbankscanchangethefuture.How?

Theprinciplebehindpaymentsbanksissimple
Acceleratingthepenetrationoffinancialservicesamonglowincomeconsumersbyleveragingtechnologyandthelarge,nonbankingretailnetwork
withoutcompromisingthesecurityofthefinancialsector.
WiththeReserveBankofIndia(RBI)sinprincipleapprovalto11paymentsbanks,Indiahastakenonebigstepforwardontheroadlaidoutseven
yearsago.
Challenges,ifany?
ArecentConsultativeGrouptoAssistthePoorreporttitledDoingDigitalFinanceRightconcludedthatlowincomeconsumersarehesitantto
adoptdigitalmodesforfinancialtransactionsdueto:

1.Inabilitytotransactduetonetwork/servicedowntime
2.Insufficientagentliquidityorfloat,whichalsoaffectsabilitytotransact
3.Userinterfacesthatmanyfindcomplexandconfusing
4.Poorcustomerrecourseforgrievancesandqueries
5.Nontransparentfeesandotherterms
6.Fraudthattargetscustomers
7.Inadequatedataprivacyandprotection
LiveMint
CalculateddevaluationbyChina
1.ThePeoplesBankofChinaconsecutivedoublecutswith1.9%and1.6%hassentshockwavesaroundtheworld.
2.ThisdoubledosehadasharpnegativeimpactonmanyAsiancurrencies.
3.Rupeetooslippeddowntoits2yearlowlevel,butrelativelylessaffectedascomparedtoitsAsianpeers.
4.IMFisoptimisticthattheChinesemovewillhelpachievemarketdeterminedexchangerates.
5.However,thecontextofcutisbasedonthepremiseoftheirdeceleratingeconomy,duetoitsexcessivedependenceonexports.
6.ThisstepcanalsobereadinlightofmakingYuanaglobalreservecurrencyatIMF.
NitinGadkaris5bigticketprojectstomoderniseinlandwaterways
101NationalWaterways
Indiahasnumerousrivers,canals,creeks,lakesthatcanbedevelopedasinlandwaterways,butonlyfivewaterwayshavebeendeclaredasnational
waterways(NWs)
IntegratedNationalWaterwaysTransportationGrid
Allthe5declaredNWscannotbejoinedtocreateanationalwaterwaygrid,butatleastthreecanformagridintheEast.
JalMargVikas(RiverGanga)
WorldBankassistedprojecttodevelopfornavigationtheHaldiaAllahabadstretchonNationalWaterways1.

NW1passesthroughfourstatesandpotentiallyservesthecitiesofHaldia,Howrah,Kolkata,Bhagalpur,Patna,Ghazipur,VaranasiandAllahabad
andseveralindustrieslocatedalongtheGangabasin.
YamunaRejuvenationActionPlan
Maketheriverusablefornavigation,watertransportetc.
CruiseTourism
EasierImmigrationProcedures:VisaonArrivalshortlytobegivento114countriesatairportsmustbeextendedtoseaports.
CabotageWaiver:CurrentlyforeignvesselscallingonMumbaicannottakeIndianpassengerswhomaywanttogouptoGoaorKochi.
DevelopmentofLakshadweepasacruisedestination:TheLakshadweepIslandscanbedevelopedliketheMaldives
TheEconomicTimes
FirstriverinfosysteminAugust

1.Indiaissettodeployitsfirstworldclassriverinformationsystem(RIS)bytheendofAugustintheSagarFarakkasectionofNationalWaterway
(NW)1,thestretchwiththehighesttraffic.
2.TheRISwillfunctionlikeairtrafficcontroltoensuresmoothflowofvesselsandcargoonthewaterway.
3.HowisthisgoingtohelptheIndianEconomyinalonger/shorterrun?

Sincethermalpowerplants,cementandfertilisercompanies,andFoodCorporationofIndiahaveexpressedinterestinusingNW1asacheapand
cleanformoftransport,theRISwouldactasacatalystinpromotingwaterways.
WhatarethemajorcheckpointsintheNW1stretch?
BusinessStan
SugarwoesPMpitchesformoreethanolblending
1.PrimeMinisterNarendraModihasaskedhisministerialcolleaguestotakeconcreteeffortstoimplementethanolblendingwithpetrolfrom2to5%
whichcouldeventuallyberaisedto10%andexploringthepossibilityofexportingsugartoliquidatesugarstock.
2.SugarindustryowesaboutRs14,398croretocanefarmersandisunabletomakepaymentasitisfacingsevereliquiditycrunchonaccountof
surplusproductionthathasresultedinlowpricesofsugarinthedomesticmarket.
Doyouthinkthiswillsolvetheproblemforthesugarcaneindustryatlarge?Thissolutionwillhavetoweighagainstourcapacitytoproduce
suchahugeamountofethanolandwhathappenstothechemicalsectoratlarge.Butwhatelse?
BusinessStan
[cdexplains]MinimumAlternateTax
[Correction]MATisaformofDirectTax.Why?Readtheexplanationaftertheinfograph.

MATcameintothepicturebecausecompanieswerenotpayingtaxesbytheexemptionsanddeductionsundertheIncomeTaxAct.
SotheyhaventpaidtheirINCOMETAXduringanassessmentyear.
InordertomakethempaytheirINCOMETAX,ITActcameupwithsection115JBwhichsaysthatthecompaniesshouldsimultaneouslycompute
incometaxundernormalprovisionsandundersection115JBandshouldpaythehigherofthosetwoamounts.Bythisprovision,companiescannot
evadetax.
HerewhatcompaniesarepayingisanALTERNATIVEAMOUNTastaxtotheirzeroamountoftax.SothatisaDIRECTTAX.
ThistaxisleviedontheCOMPANYandispaidbytheCOMPANY.NootherorganizationorpersonpaysMATonthebehalfofthecompanyand
eventhecompanycannotshiftthisburdentoanyotherassessee.
WealsohaveAMT(AlternateMinimumTax)whichisforassesseesotherthancompanies.TheconceptandtherateissamebetweenMATand
AMTbutonlytheapplicabilityisdifferent.
TheIndianExpress
CentretopumpRs.70,000cr.intoPSUbanks
1.Inabidtoboostinvestments,CentrewilloverthenextfouryearsinfuseRs.70,000croreoutofbudgetaryallocationsintoPSUbanksRs.25,000
inthisyearandthenext,Rs.10,000crorein201718and201819.
2.NIIFwillmakeequityinvestmentsofRs.20,000croreeveryyearincommerciallyviablelonggestationprojects.
3.Reasonforthecapitalinfusionisglobalanddomesticslowdownindemand,menaceofNPAsandloweredprofitabilityofPSUbanks.
4.NIIFisowned49%bythegovt.outsidethepurviewoftheParliamentandCAG,andisrunbycommercialmanagers.
[Discuss]CananyoneelaborateontheneedforRBItobeindependent?
Dontthenormalprinciplesofpoliticalaccountabilitygovt.isaccountabletopeopleandthuswilltakecareofgrowth/inflation/interestrate
decisionsinthebestinterestsofpeople,applyhere?

Isitjustasimplematterofseparationofpowers?Certainbodiesmustbeindependentfromgovernmentcontrol,thoughindependenceinnoway
shouldimplylackofaccountability.
Willthisbringtheconflictofgrowthandinflationtothefore?Theproblemisthatmonetarypolicytoolswillresultingrowthwithimmediate
effects.However,anypolicydecisionsregardinginflationtakesalongtimeforittotakeeffect.
Letshaveabetter,moreinformeddebatearoundthis.Shallwe?
LiveMint
[Discuss]RBIattheriskoflosingautonomy?
RBIhasalwaysbeeninnewsfortwothingsthelegendaryRaghuramRajanandthe(infinite)committeeshesummons.Onesuch

committeewastheUrjitPatelCommitteewhichhadsuggestedsomereformswhichhavesnowballedintothemoderndayspeculationofRBIs
autonomyloss.Whatstherealdeal?
FSLRCdraftgivesthecentretherighttoappoint4outof7monetarypolicycommitteemembers,andtakesawaythevetopowerofRBIgovernor.
1.ThelatestFSLRCdraftgivestheUniongovernmenttherighttoappoint4outof7MPCmembers.
FSLRCFinancialSectorLegislativeReformsCommission
MPCMonetaryPolicyCommittee
2.ItalsotakesawaythevetopoweroftheRBIgovernorevenashewillhaveacastingvoteintheeventofatieintheMPC(whichcanhappenifone
memberisabsentatthemeeting).

Rememberthe2014UrjitPatelCommitteereport?
RBIdeputygovernorUrjitPatelhadrecommendeda5memberMPCwiththegovernorasthechairman.OverlytiltedinfavourofRBI,thisreport
alsosuggestedthatthegovernorand,inhisabsencethedeputygovernor,willhaveacastingvoteincaseofatie,butitwasnotinfavourofthe
governorenjoyingthevetopower.
TheFSLRCdraftgoesaheadandplacesmorepowerinthehandsofthegovt.

LiveMint
Toughtimesforfertilizerindustry
1.InabsenceofawellplannedGovt.policy,topfertilizermanufacturerslikeTataandBirlaaremullinguponexitingtheindustry.
2.Majorreasonsareexcessfocusandusageofurea,delayedsubsidypayments,nonavailabilityofdomesticnaturalgasandinconsistentGovt.
policy.
3.UreaishighlysubsidizedwhichmakesthepricesofdecontrolledNPKfertilizers34timeshigher,thereby,decreasingtheirconsumption.
4.ThoughtheGovt.allowedgaspoolingrecently,buttheentirebenefitgoestoureaindustryandnottoNPKmanufacturers.
5.Withoutadevelopedfertilizerindustry,schemeslikeSoilHealthCards,SecondGreenRevolutionetc.willremainonlypaperschemes.
6.SubsidyofmorethanRs.30,000croresisoutstandingtomanufacturerssomeofwhichdatesbackto2008.

Asubsidyandsomequestions

1.Uniongovt.hasdecidedtoextendtheinterestsubventionschemeonbankloansgiventolandowningfarmersat7%.
2.Recently,RBIinvestigationfoundapparentdiversionofagriculturalloansforunintendedpurposes.
3.Theloanamountsareusedtorepayexistingdebtstomoneylenders,depositedinfixedamountschemestoearnhigherinterest,etc.
4.Mostfarmersdontearnenoughtomeettheirbasicneeds,sotheseloansserveasanauxiliaryincometomeetconsumptionexpenditure.
5.Consumptionexpenditureistheexpenditureonpurchaseofgoodsandservicesforusebyhouseholds.

6.Govt.shouldrethinkthemannerinwhichfarmersaresubsidisedsoastofinancefarmingratherthanconsumption.
GivetheRBIitsindependence
1.ThenewdraftofIndianFinancialCodereleasedbyfinanceministryprovidesforsettingupofaMonetaryPolicyCommittee(MPC)todecidepolicy
rate.
2.Currently,TechnicalAdvisoryCommittee(TAC)advisesRBIonsuchissues,butRBIgovernorhastherighttovetoanydecisionofTAC.
3.FSLRCsuggestedthat7memberMPC,shallbeappointedafterdueconsultationsbetweenthegovt.andtheRBI,with3nomineesfromgovt.and
vetopowerforRBIgovernor.
4.However,thedraftseekstovestinthegovt.thepowertonominate4memberstotheMPC,withoutanyvetopowertoGovernor.
5.Though,itisnotwrongtoallowthegovt.asayinthemattersofmonetarypolicy,butitappearstoundermineRBIsautonomy.
ALabourLitmusTest

1.TheIndustrialDisputesActprovestobeanimpedimentintheinvestmentsinIndiabecauseofachapter,whichwasincorporatedintoitduring
IndiraGandhisregime.
2.ThechapterVBhasaclausewhichsaysthatanyemployerwhoemploysaspecifiednumberofpeoplehastotakepriorapprovalofthegovt.in
thetimeoflayoffs,retrenchmentorclosure.
3.In1976thisspecialnumberwasfixedat300workersbutlaterina1984,itwaschangedto100,therebymakingtheprovisionevenmore

restrictive.
4.Weneedtoensureabalancebetweenworkersprotectionandinvestorsconfidence.
5.Indianlabourlawsareseenassomeofthemostrestrictiveintheworld.
TheIndianExpress
Govt.extendsschemetoboosttheelectronicsindustry
1.Govt.extendedModifiedSpecialIncentivePackageScheme(MSIPS)by5yearsandadded15newproductcategories.
2.Electronicssectorhaspotentialtoattract$100Billioninvestmentsandprovidejobsto28millionpeople.MSIPSissupposedtobolstertheMakein
IndiaandDigitalIndiainitiatives.
3.Someofthenewproductcategoriesaresmartcards,consumerappliances(likewashingmachines,airconditioners),opticalfibresandInternetof
Things(IoT)productsetc.
4.TheschemewasoriginallyapprovedinJuly2012for3yearstoprovidecapitalsubsidyof20percentinSEZor25percentinnonSEZunits
engagedinmanufacturingofelectronicsitems.

BusinessStan

[cdexplains]GST:Goodforbusiness,snagforfederalism?

TheGSTisataxreformthathasbeenonthecardsformorethanadecade.Inprinciple,itisthesameastheValueaddedTax(VAT)already
adoptedbyallIndianStatesbutwithawiderbase.WhiletheVATwhichreplacedthesalestaxwasimposedonlyongoods,theGSTwill
beaVATongoodsandservices.
1.Inthecurrenttaxregime,Statestaxsaleofgoodsbutnotservices.
2.TheCentretaxesmanufacturingandservicesbutnotwholesale/retailtrade.
3.TheGSTisexpectedtousherinauniformtaxregimeacrossIndia.
TwoArgumentsgiveninfavourofGST:
4.GST,bysubsuminganarrayofindirecttaxesunderonerubricwill

simplifytaxadministration
improvecompliance
eliminateeconomicdistortionsinproduction,trade,andconsumption
5.Ifwearegivingcreditfortaxespaidoninputsateverystageofthesupplychainandtaxingonlythefinalconsumerwewillhelpcontrol
productioncosts.
AccordingtotheFinanceMinisterArunJaitley,theGSTwilladd2%tothenationalGDP.
AlosingpropositionfortheStates?
Allgoodsandserviceswillbedividedintocertaincategories.Therateswillbefixedbycategory,andifIamastate,Icannotshiftacommodity
fromalowertoahigherrate,orputitintheexemptcategory.
AccordingtotheConstitution,theStateshavecompleteautonomyoverlevyofsalestaxes,which,onaverage,accountedfor80%oftheirrevenue.
Now,theratesforboth,theCGSTandtheSGST,willbefixedbytheGSTCouncil,wherethechairmanwillbeFinMin!
Now,eventhoughtheCentralGSTwillcompensatethestatesfund,thiswillerodetheirautonomytodothings(catertotheinterest
groupsthemselves).These&afewmore,aresomeofthelingeringquestions.Economypickingupneedmorereformsforstronggrowth
HereiswhatRajanhastosayon
1.EconomyIwouldsay(theeconomyis)pickingup.Weseesomesignsofcapitalinvestmentpickingup.Thereisacontinuingneed,whichthe
governmentistryingtoaddress,ofputtingsomeofthestalledprojectsbackontrack.
2.MonsoonInflationisalwaysamatterofconcern.Thenewsonthemonsoonfronthasbeengoodsofar.Butitissomethingthatweare
watching.
3.FIIlimitsinbondsWehavebroadlydecidedtolookatlimitstwiceayearandwejusthavetofixthedate.Wearecommittedtoasteady
expansionintheabsolutevalueofFII(foreigninstitutionalinvestor)participation.
TheEconomicTimes
[opedsnap]Globalcooperationforthecommongood
RaghuramRajanhaswarnedthattheworldisatriskofrepeatingthemistakesitmadeduringtheGreatDepression(19291939).

Whywouldhesayso?Aseriesofpolicymistakesmademattersworseduringthosepainfulyears.
1.Centralbankscutbackmoneysupply.
2.Competitivedevaluationsdidnothelp.
3.Tradebarrierswereraised.
4.Fiscalspendingremainedconservativebytodaysstandards.
Thewaytogoforwardisglobalcooperation.
Onecountryhastoanchortheglobalmonetarysystemwithastablecurrency.TheUSdidthejobformanydecades,butittoohasbasicallybeen
printingmoneywithoutacareaboutwhathappensintherestoftheworld.

LiveMint
InconversationwiththeCommerceSecyRajeevKher

Sir,yourviewsontheexportdata.Lastsixmonths,ithasbeenverybadonourexporteconomy.
Thiswholedimensionofexportsgoingdownisdefinitelyalarming.AsiawhichisoneofthelargestdestinationsforIndianexportshasalso
beengenerallyslowingdownwhetheritisChinaorJapanoranyothermarket,ASEAN,sothatisofcourseonemajorreason.
WhatisthetypicalconstitutionofthebasketofIndiasexports?
Aboutmorethan30%ofexportsarecomingoutofpetroleumproductsandgemsandjewelleryandbecausethepetroleumpriceshavegonedown
sothereforeconsequentreductionofpetroleumproductpricesisalsohappening.
Whataboutourexportcompetitiveness?
TwomainissuesthereStructuralissuesforexampleinfrastructureisonebigissue&thentheEaseofdoingbusiness,whichtobefairis
aworkinprogress.
Whataccordingtoyouarethemeasurethatareneededasfarasexportsareconcerned?Measureswouldberequiredonbothsides
Oneisthefrontendsideandthatiswherethesesmallincentivesthatwedobywayofexportincentivesdohelpparticularlythesmallsector.
Thereisahugedemandforinterestsubventionschemeswhichweretherein1314butnotoperationalin1415.Itwillbeagreatboonto
sectorswhicharetraditionallynicheforexamplethetextilesector.
Custom

RBIbacksmovetoencourageedeals
Earlierthismonth,thegovernmentreleasedadraftproposalthat,ifaccepted,willseeincometaxbenefitsforconsumers,whopredominantlyuse
electronictransactionsforpayments.
Whatelse?KeyIssuestobeaddressed:
1.Theadvancesrelatedfraudscontinuetobethemajorconcernforbanks,especiallybecauseoftheirsizeandfarreachingimplicationstotheir
financialsoundnessandintegrity.
2.Aspecialvarietyoffrauds,whichareincreasinginnumberandintermsofspeed,arethecyberfrauds.
Afterthoughts:
Banksshouldmakeanefforttoreallyknowtheircustomerstheirbackgrounds,statedactivitiesorprofession,theirsignaturestyleofoperation
anddigitalfootprintinthecaseofonlinetransactions,etc.
Thiswouldallowabanktodrawuparobustcustomerprofileandputuparedflagifthereisanyexceptiontothenorm.
[opedsnap]Forrichfarmers
Itishardtounderstandthelogicofraisingtheminimumsupportpriceforricewhenthegovernmentissittingonamountainoffoodgrain.
1.InApril,theFoodCorporationofIndia&statesheldcloseto52milliontonnesofwheatandrice,whichismorethansufficientforallsubsidized
consumptionneedsduringtheyear.
2.Still,thegovernmentsdesiretoshowthatitwasdoingsomethingforfarmershasoutweighedeconomicrationale.
Forexample,itisunderstandablethatsupportpriceforpulseshasbeenraised.Mostfarmersgrowinglentilsarepoorandliveinrainfed
areas.Wheatandricefarmers,incontrast,haveaccesstoirrigation.
LiveMint
[cdexplains]Disinvestment:Challenges&Opportunities

1.ThetermdisinvestmentreferstotheprocessthroughwhichthegovernmentoffloadsaportionofitsshareholdinginaPSU.
2.Capitalreceiptssogarneredwillhelpincentralgovernmentfinances.
3.Importantly,however,underdisinvestment,governmentwillremainthemajorityshareholderevenifitspostdivestmentshareholdingis
smallerthanbefore.
ThegovernmenthopestogarnerRs.69,500croreofcapitalreceiptsthisyearfromstrategicsaleandsellingsharesinunlistedcompanies.

Standingfirmat51percent
1.Governmentownershipwithatleast51%stakeafterdivestmenthasbeennonnegotiableinmostcases.
2.EconomiclogicwouldsuggestafurtherdivestmentinsomePSBstoenablethemraiseadditionalcapital.
Theusualchallenges
1.BewareofthecriticsSellingfamilyjewels,asthecriticsofdisinvestmentcallit,canneverbepopularnotwiththeunionsnorwiththe
politicians.
2.Attemptstobluntthecriticismbylettingthemarketdiscoverthepricethroughbookbuildingprocessandsoonhavenothelped.
3.Accountability&TimingissuesThereisneveragoodtimeanymorethanthereisacorrectprice.Consequently,decisionmakingbythe
governmentisathanklesstask.
[opedsnap]Findingablueprintforrailwayreforms&implementingit
1.ThenewreportbyBibekDebroytalksaboutarailwayregulatoryauthorityaprerequisitefortherestructuringoftherailwaysallowingmore
openparticipationofprivateplayers.
2.KeyFact94%ofrailwaysrevenuesarespentonoperatingcosts.
3.SureshPrabhu,theRailwayministerisattemptingtosetitsfinancesright.
4.Theministerisnowengagingmorewithstategovernmentstogetthemonboardforinvestmentsinnewprojects.
5.Chartingoutaplantoruntherailwaysonmorecommerciallines,dismantlingofthepresentorganisationalstructuremarkedbyapowerfulrailway
board.
TheIndianExpress
EngineeringgoodsexportstoSouthAsiaontherise
1.ManySouthAsiancountries,whichusedtoaccountforasmallshareinIndianengineeringexports,arenowemergingaspromisingmarkets.
2.TheEEPC,theapexbodyofIndianengineeringexports,givescredittotheNeighbourhoodFirstpolicyofPMModi.
3.SouthAsiancountrieshavebecomeamajormarketforus,givingusmorethan15%ofthetotalshipments,AnupamShah,EEPCChairman,said.
4.AnEEPCofficialsaidthatwhileSriLanka,BangladeshandNepalweremajorimporters,therewasinsignificanttradewithBhutanandAfghanistan
andalmostniltradewithPakistan.
Govt.mustbuysurplussugar:Industry
1.TheGovt.decisiontogiveaRs.6Kcroreinterestfreeloantothesugarindustrytohelpitcleararrearstofarmershasnotgonedownwellwiththe

industrybody.
2.Ithadalsowaivedexcisedutiesonethanolinthenextsugarseasontofurtherincentiviseethanolsuppliesfortheblendingprogram.
3.Theindustryontheotherhand,isdemandingthecreationofatwomilliontonnebufferstockofsugarongovernmentaccounttoreducestocks.
4.AgenciesliketheFCIorMMTC,STCorAPEDAshouldinsteadbuyout2.53milliontonnesofsurplussugarfromtheindustrytohelpitreduce
stocksandpayupthefarmers.
[opedsnap]IndiasupcomingWTOchallenges
1.IndiaandtheUSareonthecuspofcementingrelationsonseveralfrontsbutnotonthegroundoftradeagreements@WTO.
2.Washingtonhaspointedafingeratthecontinuedbarriers,largelyin2sectorsagricultureandintellectualpropertyprotectioninIndia.
3.USraised3setsofconcernsaboutIndianagriculturepoliciesIndiasunpredictabletariffpolicies,Indiasunscientificandunjustifiableimport
barriersonagriculturalproducts&Indiasfarmsubsidies.
4.UShasbeenonthepathofprojectingChinaandIndiaastheuntoldsubsidyvillains.
5.WilltheModigovernmentstandupforitspoorfarmers?ThatisthetestitwouldfaceatNairobi.
LiveMint
[opedsnap]DefendingIndiasIPR
1.IndiahadamendedtheIndianPatentsAct,1970tobringitslawsinlinewiththeagreementonTradeRelatedAspectsofIntellectualProperty
Rights(TRIPS).
2.ThelegislationraisedthebarforwhatconstitutesaninventionandwhatcannotbepatentedinIndia.
3.InevitablybigpharmahavelobbiedwiththeirgovernmentstoforceIndiatodilutetheprovisions(UShasputIndiaontheprioritylist).
4.IndiamaynothaveanIPRpolicybutithasastronglegalfoundation.
5.ThereisawellfunctioningPatentsofficewithsufficientexperiencetograntpatentsandupholdconsumerinterests.
6.WeneedtoworktowardsaligningourIPRlawswithglobalstandards.
GSTBillagainstspiritoffiscalfederalism
AndhrasFMhasurgedRajyaSabhatoconsidertheconcernsofstatesbeforepassingtheGSTBill.
1.TheproposedamendmentBillwouldempowertheCentretolevytaxontobaccoandtobaccoproductsinadditiontotheGST.
2.However,thesamepowerwasdeniedtotheStatesandthiswouldresultinsubstantialrevenuelosstotheStates.
3.Similarlysubsumingadvertisementtax,bettingandgamblingtaxwouldhaveadverseimpactonrevenuesoflocalbodies.

Hesuggested,thereshouldbeexplicitprovisionsintheConstitutionalAmendmentBilltoprotectandpreservethefiscalautonomyoftheStates.
ThecompositionofGSTCouncil,theapexbodyforGSTadministration,wassuchthatitwouldgive1/3votingpowertotheCentre.Thus,the
CentrewouldhaveavirtualvetopowerovertheStatesonallthedecisionsoftheGSTCouncil.
Gendergapbecomingachasminlabourmarket
UNreportsayswomenareforcedtoworkunderharshconditions.
TheProgressoftheWorldsWomen20152016reportcomes20yearsafterthelandmarkFourthWorldConferenceonWomeninBeijing.
1.Indevelopingregions,upto95%ofwomensemploymentisinformal,injobsthatareunprotectedbylabourlawsandlacksocialprotection.
2.InSouthAsia,thegenderpaygapis35%forwomenwithchildrencomparedto14%forthosewithout.
3.ThisisacarepenaltythatunfairlypunisheswomenforsteppinginwhentheStatedoesnotprovideresources
BharatiyaMahilaBankwinsAsianBankerAchievementAward2015

1.BMBisIndiasfirstallwomenpublicsectorbankandwasformallylaunchedonNovember19,2013.
2.Itsobjectiveistofocusonthebankingneedsofthewomenandpromoteeconomicempowerment.
3.Italsoseekstoaddressthegenderrelatedissuesandwillbehelpfulinfinancialinclusion.
4.InBudget201314,UnionGovernmenthadapprovedRs1,000croreseedcapitalforthebank.
5.HeadquarterofBharatiyaMahilaBankislocatedinNewDelhi.
GKToday
Gujaratlaunchesindustrialtourism
1.GujarattourismCorporationalongwithAksharTravelsbeginsIndustrialtourpackage.

2.Wherein,personcanseeNanoplantinSanand,PipavavportnearAmreli,AlangshipbreakingyardinBhavnagarandAmulDairyinAnand.
3.LocationsofplacesimportantformatchthefollowingtypeMCQsinIndianEconomicGeography.
WhatisMAT,theMASSIVEdemandthathasbeenputonFIIsandFPIs?
1.In1987,PMRajivGandhi,inchargeoftheFinanceportfolio,introducedwhathecalledaMinimumCorporateTax.Thiswastotargetcorporates
whichmadeprofits&paiddividendstoshareholders,butpaidverylittleor,insomecases,zerotaxes.
2.Thelawbackthenallowedseveraldeductionsandexemptionswhichcouldbeutilisedtosignificantlylowerorescapetaxliability.
3.IncameP.Chidambaram&YashwantSinharespectivelyalongtheFMportfolioandFIIs(foreigninstitutionalinvestors)wereexemptedfromMAT.
4.ButtheITdept.raisedhueandcrywhentheyissuednoticestosomeoftheFIIsforpastsettlements.
5.Youknowhowpowerfultheseglobalinvestorslobbiesareright?
TheIndianExpress
TworisksthathauntagricultureWeather&Prices
1.Still,lessthan20%oftheIndianfarmersarecoveredbycropinsurance.
2.Somehow,theIndianpsychecannotseemtoacceptpayingtheinsurancepremiumthatwouldbeforegoneshouldnoadverseeventtakeplace.
3.Itisalsotruethatmostpoorpeoplecannotaffordeventhelowestpremiumforinsurance.
4.Andimagineitthiswayastaggering70%ofthejuntawhichdependsonAgriculturewakesupeverydayfacingrisk&uncertainty.
5.AsIndianagriculturewillhavetoadoptnewandexpensivetechnologiestocounterclimatechange,insurancecoverbecomesevenmorecritical.
6.NarendraModigovernmentneedstobeapplaudedfortryingtointroduceamarketbasedfarmincomeinsuranceschemecombinedwithweather
basedcropinsuranceproductsthatwillreplacetheadhocgrants.
LiveMint
EthanolBlending:Alastingsolutionforsugarmills
1.Indiansugarpricesareattheirlowestinthelast7years.
2.Ethanol,whichisaplentifulproductinthesugarmanufacturingprocessandisblendedwithpetrol,canbeavitalrevenueearnerforthemills.
3.Ethanolblendingisonlyataround3%.Itcouldeasilyberaisedto10%&thismayhelpinreducingthesugarsurplusarrears.
4.AnothersuggestionThegovt.shouldbuy3milliontonnesofsugaratcostofproductionandstoreitasabuffer.
5.Exportsarenotviableanymoreasinternationalpriceshavedeclinedduetoaglut.
[cdexplains]HowdoesMSPwork?

1.GovernmentfixesMSPsofvariouskharif&rabicropseveryyear.CommissionforAgriculturalCosts&Prices(CACP)takescareofthis.
2.ProcurementunderMSPisundertakenbythedesignatedCentralandStateGovernmentagenciesandCooperatives.
3.ProducershavetheoptiontoselltheirproducetoGovernmentagenciesorintheopenmarketasisadvantageoustothem.
4.States/UTshavebeenadvisedtoamendtheirrespectiveStateAPMCActsonthelinesofModelAct,2003.
TheModelActprovidesfordirectmarketing,contractfarming,farmers/consumermarkets,settingupofmarketsinprivateandcooperative
sectors,etradingetc.
PIB
MUDRAisbreakingthemyth
1.Thecorporatehousesandbigindustriesemployonly12.5millionpeopleasagainst120millionbytheMSMEsector.
2.Thelargeindustrieshavewidevarietyoffacilitiesforcredit,whereasMSMEsufferfromcreditcrunch.
3.MUDRAwillfocuson5.75croreselfemployedpeoplewhousefundsofRs11lakhcrore.
4.NSSOReport2013:Thereare57.7millionsmallbusinessunits,mostlyindividualproprietorship,whichrunmanufacturing,tradingorservices
activities.
5.Thesmallbusinessunitsincludesmallmanufacturingunits,shopkeepers,fruits,vegetablevendors,truckandtaxioperators,foodserviceunits,
artisans,foodprocessors,streetvendors.

BusinessStan
Newregime,oldphilosophy
1.Thereisalwaysacasefordirectgovernmentinterventiontosolveanyoneofourmanychronicproblems,tojustifytheneedforMUDRAbank.
2.Thegovt.istryingtoensureequitythroughdeterminedgovernmentactionthatpreviouslydrovethegovt.tonationalisebanksandbringpriority
sectorlending.
3.However,suchdirectedcredithasnotworkedsuccessfullyinthepast.
4.Thegovt.controloverbankshadledtolargescalecorruptionandrepeatedrecapitalisationthroughtaxpayersmoney.
5.MUDRAbankhasbeenoverburdenedwithmanyconflictingobjectivesandtoomanyroles,viz.alender,consultant,regulator,thinktankandan
agentofsocialchange.
6.Thisnewbankhaslittleaccountabilityfortaxpayersmoney,whichhasalreadywastedonnumerousinitiativestosupportsmallbusinessesof
variouskinds.

BusinessStan
ThefineprintofMudraBank
1.Thebankwillbefinanciallychallengedsinceinception,ifitisfundedthroughnonbudgetarysupport.
2.Thefundsforthebankwouldbesourcedfromshortfallintheachievementsoftheprioritysectorlending(PSL)targets.
3.Currently,theshortfallinthePSLtargetsofthedomesticscheduledcommercialbanksaredepositedinRuralInfrastructureDevelopmentFund
(RIDF)andforforeignbanksinSmallEnterprisesDevelopmentFund.
4.Thefactofthematteristhatbankshavebeensurpassingthetargetsinallyears,since2002,exceptforthelastthreeyears.
5.Theshortfallliesonlyinagriculturalloans,butitwouldbeunfairtodivertthetargetforagriculturefromRIDFtomicrounits.
Custom
MawanaSugarsalmostgivesup
1.WelcometoUP,wheresugarmillsareraringtoshutdowntheoperations!
2.Outhere,sugarcaneandsugarpricesarenotlinkedunlikewhatsbeendoneinMaharashtraandKarnataka.
3.Banksarerunningawayfromgivingloanstomills.Mostofthemoneythatiscomingfromthesaleofsugarisgoingtofarmers&millsaregetting
~nothing.
4.Thestatescanfixetheirowncaneprice,whichismuchhigherthantheCentrescaneprice,knownasFairandRemunerativePrice(FRP).
5.ButheresacatchMillscannotshutdownwhentheywanttheycandosoonlywhenthedistrictmagistrateallowsthemtodoso.
BusinessStan
AcatalystforIndias10%GDPgrowth
1.Informalsectoraccountsfor90%ofournonagriculturalworkforce,50%oftheGDP&40%ofthenonfarmGDP.
2.AnalystspointthattheIndianGDPcanberaisedbyalmost15%iftheinformalsectordataisincorporatedintheGDPseries.
3.TheMUDRAbankwillboostloansandcutborrowingcostsforthecashstarveddomesticsmallbusinesses.
4.Itisusingmicrofinance,aneconomicdevelopmenttooltoassistthelowerincomegroupstodevelopandgrowtheirsmallbusinesses.
5.Thisgovernmentisrighttoseethepotentialofthissectortodriveupjobsandtaxes.
6.Thiswillcreateaforcemultiplierontheeconomyandtaxrevenuesbyasuccessfulformalisationoftheinformalsector.
BusinessStan