Central Sector Scheme for Industrial Development of Jammu & Kashmir
Context:
Government of India has formulated New Industrial Development Scheme for Jammu & Kashmir (J&K IDS, 2021) for the development of Industries in the UT of Jammu & Kashmir.
About the scheme:
J&K IDS, 2021 is a Central Sector Scheme. The scheme aims to take industrial development to the block level in UT of J&K, which is first time in any Industrial Incentive Scheme of the Government of India.
The financial outlay of the proposed scheme is Rs.28400 crore for the scheme period 2020-21 to 2036-37.
Scheme while encouraging new investment, also nurtures the existing industries in J&K by providing them working capital support at the rate of 5% for 5 years.
Objective:
Main purpose of the scheme is to generate employment which directly leads to the socio economic development of the region.
It aims at development of Manufacturing as well as Service Sector Units in J&K.
Key Features of the Scheme:
Scheme is made attractive for both smaller and larger units.
It attempts for a more sustained and balanced industrial growth in the entire UT.
Scheme has been simplified on the lines of ease of doing business by bringing one major incentive- GST Linked Incentive- that will ensure less compliance burden without compromising on transparency.
It is not a reimbursement or refund of GST but gross GST is used to measure eligibility for industrial incentive to offset the disadvantages that the UT of J&K face.
Major Impact and potential:
Scheme is to bring about radical transformation in the existing industrial ecosystem of J&K with emphasis on job creation, skill development and sustainable development.
It will attract new investment and nurturing the existing ones, thereby enabling J&K to compete nationally with other leading industrially developed States/UTs of the country.
ECONOMY
GDP is likely to contract by 7.7% this fiscal: govt.
Context:
The National Statistical Office has come out with the Advance estimates of India’s GDP figures.
Details:
Advance estimates reveal that India’s real Gross Domestic Product is headed towards a contraction of 7.7% in 2020-21 and the GVA (Gross Valued added) shrinking by 7.2%.
India’s economy had expanded 4.2% in 2019-20 but entered a recessionary phase with two successive quarters of sharp contraction triggered by the COVID-19 lockdowns.
The first quarter of the current fiscal year saw a contraction of up to 23.9%, however, with the gradual lifting of lockdown restrictions and the ‘unlocking of the economy’, the GDP shrank by 7.5% in the second quarter — leading to a real GDP contraction of 15.7% in the first half of 2020-21.
The estimates now seem to suggest that the economy will surface in the second half to record near-zero growth, or a mere 0.1% contraction, the estimates suggest.
This is based on an improved performance under several performance indicators in the past few months. The RBI has revised its GDP projection, now projecting a 7.5% contraction in the year compared to its earlier estimate of a 9.5% decline.
Sector-wise breakup:
Only two sectors managed to record an expansion in growth in GVA, with agriculture continuing its good performance through the first half of the year into the second half (3.4%) and electricity, gas, water supply and other utility services posting (2.7%).
The cause for worry came from the steep decline in trade, hotels, transport, communication and services related to broadcasting (-21.4%), followed by construction (-12.6%), mining and quarrying (-12.4%) and manufacturing (-9.4%).
Public administration, defence and other services are also projected to contract by 3.7%, while financial, real estate and professional services shall record a marginal 0.8% decline year-on-year, as per the advanced estimates.
Real GVA at basic prices is estimated at Rs 123.39 lakh crore in 2020-21, against Rs 133.01 lakh crore in 2019-20, while the real GDP in 2020-21 is likely to attain a level of Rs 134.40 lakh crore, as against the provisional GDP estimate for 2019-20 of Rs 145.66 lakh crore.
Conclusion:
The Finance Ministry is of the view that the advanced estimates are indicative of a better economic performance in the third and fourth quarters.
A cursory look into the GDP figures paints an optimistic picture in the form of a post lockdown V-shaped recovery of the economy.
On the demand side, real GDP in 2020-21 has been supported by an estimated increase in Government Consumption Expenditure by 5.8%
The pandemic which has affected economies around the world will be the chief reason in India witnessing a negative GDP growth rate for the first time after 1979-80.
Advance Estimates of GDP of 2020-21
Context:
Advance Estimates of GDP of 2020-21 released by National Statistics Office.
Details:
The real GDP at 2011-12 prices in 2020-21 has been estimated to contract by 7.7 per cent and nominal GDP at current prices by 4.2 per cent.
As per quarterly estimates of NSO, real GDP contracted by 15.7 percent in the first half of 2020-21.
Real GDP on a quarter-on-quarter basis grew at 21 percent from Q1: FY 2020-21 to Q2: FY 2020-21.
The AE of 2020-21 reflect continued resurgence in economic activity in Q3 and Q4 – which would enable the Indian economy to end the year with a contraction of 7.7 percent.
The continuous quarter-on-quarter growth endorses the strength of economic fundamentals of the country to sustain a post-lockdown V-shaped recovery.
On the demand side, real GDP in 2020-21 has been supported by an estimated increase in Government Consumption Expenditure by 5.8 percent.
On the supply side, agriculture is estimated to register a positive growth of 3.4 percent against 4.0 percent as per the PE of 2019-20.
In the manufacturing sector, electricity sector is estimated to register a positive growth of 2.7 percent.
The pandemic and associated public health measures have adversely affected the contact-sensitive services sector where trade, hotels, transport & communication are estimated to contract by 21.4 percent in FY:2020-21.
Liberalised Authorised Economic Operator Package for MSMEs
Context:
CBIC introduces flagship Liberalised Authorised Economic Operator Package for MSMEs.
Details:
The Central Board of Indirect Taxes & Customs (CBIC) has taken a new initiative to introduce its flagship “Liberalised MSME AEO Package” for Micro Small and Medium Enterprises (MSMEs) for swift customs clearances.
In order to attract MSMEs to become Authorised Economic Operators (AEOs) and avail various benefits, the CBIC has relaxed the compliance criteria provided the MSMEs have a valid certificate from their line-ministry.
The ‘Liberalised MSME AEO Package’ scheme is a voluntary compliance programme which enables swifter Customs clearance for accredited stakeholders in the global supply chain namely importers, exporters, logistic service providers, custodians, etc.
Which MSMEs can apply for the scheme?
The relaxed requirements allow MSMEs who have filed minimum 10 customs clearance documents in one year and who have a clean compliance record over 2 years to apply for the scheme.
Benefits of the scheme:
Simplified documentation
CBIC commits to take a decision on an application for grant of AEO status within only 15 days from electronic submission of complete documents for AEO Tier 1
Reduction in bank guarantee requirements
Facility of Direct Port Delivery (DPD) of imported containers
Direct Port Entry (DPE) of Export Containers
High level of facilitation in customs clearance of consignments thereby ensuring shorter cargo release time
Facility of a Client Relationship Manager at the customs port as a single point of interaction
HEALTH
Panel to study NFHS-5 findings
Context:
The Health and Family Welfare Ministry has set up a technical expert group to examine the adverse findings from the National Family Health Survey-5.
About the committee:
The committee is chaired by Joint Secretary Preeti Pant and includes experts from medicine and nutrition.
Mandate:
To recommend programmatic and policy interventions to improve” indicators pertaining to malnutrition, stunting, anaemia, and C-section.
Findings of NFHS 5:
The survey provides data of States and UTs on over 130 parameters. On various parameters, major number of states have worsened over the last round of survey (NFHS 4 – 2015-16).
The children born between 2014 and 2019 are more malnourished than the previous generation.
Infant and child mortality declined in most of the Indian states.
Sikkim, Assam, Goa and Jammu & Kashmir witnessed a steep decline in Neonatal Mortality Rate (NMR), Infant Mortality Rate (IMR) and Under-Five Mortality Rate (U5MR).
Meghalaya, Manipur and Andaman & Nicobar Island reported increase in all the three categories of child mortality – NMR, IMR and U5MR.
Among all the surveyed states and UTs, Bihar displayed the highest prevalence in Infant and child mortality in all three categories, while the lowest death rate was reported in Kerala.
Significance of NFHS 5 Results:
Massive increase in child malnutrition and rising levels of anemia in women and pregnant ladies clearly imply that the children born during 2015-2019 might be suffering from deficiencies.
Though India displayed improvement in child malnutrition between NFHS 3 (2005-06) and NFHS 4 (2015-16), the nation has now taken U-turn for the worse in terms of malnutrition among children, as per the NFHS 5 results.
INFRASTRUCTURE
New freight corridor a big boost: PM
Context:
Indian Prime Minister flagged off the world’s first 1.5 km-long electrified double-stack container train and inaugurated the New Rewari-New Madar section of the Western Dedicated Freight Corridor.
Details:
The Prime Minister has highlighted the need to modernize the country’s infrastructure and said it was pivotal to India’s growth aspirations.
The portion of the Western Dedicated Freight Corridor is expected to benefit farmers, industrialists and businessmen in the National Capital Region, Haryana and Rajasthan.
Western Dedicated Freight Corridor:
A Dedicated Freight Corridor (DFC) is a high speed and high capacity railway corridor that is exclusively meant for the transportation of freight or in other words goods and commodities. DFC involves the seamless integration of better infrastructure and state of the art technology.
The corridor would catalyze the development of growth centres and points in several cities. The corridor is also expected to have positive spillovers like the creation of job opportunities and acting as an enabler for attracting new investments.
The corridor will provide the much-needed impetus to the local industries and manufacturing units by securing them faster and cheaper access to the national and international markets.
Access to ports in the states of Gujarat and Maharashtra will also be made more convenient and easy.
Eastern Dedicated Freight Corridor:
The Eastern Dedicated Freight Corridor (EDFC) with a route length of 1856 km runs from Dankuni in West Bengal to Ludhiana (Punjab).
It covers Punjab, Haryana, Uttar Pradesh, Bihar, Jharkhand and West Bengal.
Through a portion of the Eastern Dedicated Freight Corridor, the New Bhaupur-New Khurja section, farm produce can be transported from Punjab and coal from Jharkhand is being supplied to the National Capital Region, Haryana and Punjab.
Besides connectivity, there is an element of increased speed with the current maximum speed of 90 kilometres per hour.
About 133 railway stations in nine States would be impacted by the Dedicated Freight Corridor. New multi-model logistic parks, freight terminals, container depots/terminals and parcel hubs would be developed at these places.
The list of beneficiaries would include villages, farmers, the poor and the small businesses and also will help attract big manufacturers.
Northeast link:
Connectivity has been a persistent problem with the North-east region, the current rapid infrastructural expansion will be linking all the Northeast State capitals to the national rail network.
The work of indigenously developing high-speed tracks was also underway.
Conclusion:
The Prime Minister also took up the opportunity to announce a digital payment of Rs 18,000 crores to farmers under the direct benefit transfer scheme.
The Government initiatives at improving infrastructure have to be applauded, especially when these projects have been completed on a priority basis despite the pandemic disrupting several activities.
INTERNATIONAL RELATIONS
USTR slams India’s digital tax, holds off on tariffs
Context:
The USTR’s Section 301 has called out India’s digital taxation regime, claiming it is not in sync with international tax principles.
Details:
The Office of the United States Trade Representative (USTR) is an agency of professionals dealing with trade issues.
The Office of the U.S. Trade Representative (USTR) is responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and overseeing negotiations with other countries.
The Section 301 report, a flagship publication of USTR has said that the digital services taxes adopted by India, Italy and Turkey discriminate against U.S. companies and are inconsistent with international tax principles.
India’s Digital Service Tax:
India’s DST imposes a 2% tax on revenue generated from a broad range of digital services offered in India, including digital platform services, digital content sales, digital sales of a company’s own goods, data-related services, software-as-a-service, and several other categories of digital services.
India’s DST explicitly exempts Indian companies—only “non-residents” must pay the tax.
‘Tax impacts U.S. firms’:
USTR has concluded the digital taxes imposed by France, India, Italy and Turkey discriminate against big U.S. tech firms, such as Google, Facebook, Apple and Amazon.com, referred to as the GAFA tax.
The issues of contention are the application of taxation to revenue rather than income, extraterritorial application, and failure to provide tax certainty.
India’s Defence:
India has defended the 2% equalization levy saying that it does not discriminate against U.S. companies as it applies uniformly across all non-resident e-commerce operators.
The Commerce and Industry Ministry has said the intention of imposing such a levy is to create an ecosystem that fosters fair competition and reasonableness.
Another reason behind the levy is to exercise the sovereign right of the government to tax businesses that have a close nexus with the Indian market through their digital operations.
The charge of extraterritorial application is not accurate as it applies only to the revenue generated from India.
MISCELLENOUS
Pravasi Bharatiya Divas 2021
Context:
Pravasi Bharatiya Divas (PBD) 2021 to be held on January 9, 2021.
Details:
This is the 16th PBD to be held since the event was first held in 2003.
The theme for PBD 2021 is “Contributing to Atmanirbhar Bharat”.
The Youth PBD will also be celebrated on the theme “Bringing together Young Achievers from India and Indian Diaspora”.
Bureau of Indian Standards (BIS)
Context:
Bureau of Indian Standards celebrates its 74th foundation day.
EDUCON-2020
Context:
Union Education Minister inaugurates two-day Virtual International Akhand Conference ‘EDUCON-2020’.
About the Conference:
The two-day International Conference is being organized by Central University of Punjab, Bathinda (CUPB) in collaboration with the Global Educational Research Association (GERA).
The focal theme of EDUCON-2020 is Envisioning Education for Transforming Youth to Restore Global Peace.
The conference is being attended by academicians from across the globe.
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