Economy and Agriculture

CC_COMPILATION_ECONOMY & AGRICULTURE MAY- DEC.
-2023
Table of Conents
Tax on Online Gaming Platforms .................................................. 29
BANKING ........................................................ 4
New GST Compliance Measures ................................................... 30
Monetary Policy.................................................................................... 4
Windfall tax .......................................................................................... 31
Evergreening of Loans........................................................................ 5
New Angel Tax Norms...................................................................... 31
Prepaid Payment Instrument (PPI) ................................................. 6
Double Taxation Avoidance Agreement (DTAA) ..................... 32
Credit information companies ......................................................... 6
Local bodies can be allocated a portion of GST collections 32
Interoperability of Cards .................................................................... 8
Dividend Distribution Tax (DDT) ................................................... 33
External benchmark-based lending rate (EBLR) mechanism . 8
RBI Proposal to Classify a Borrower as a “Wilful Defaulter” ... 9
MISCELLANEOUS ......................................... 33
Card-On-File Tokenization (CoFT) ................................................ 10 FDI Inflows ............................................................................................ 33
Deceptive Advertising Practices: Menace of 'Dark Patterns' in
Rising Unsecured Loans in India ................................................... 10
e-Market ............................................................................................... 34
RBI Surplus Transfer .......................................................................... 11
Internationalization of rupee.......................................................... 35
RBI’s riot provisions ........................................................................... 11
Reverse Book-Building Process ..................................................... 37
Incremental Cash Reserve Ratio (ICRR) ...................................... 11
Nobel Prize in Economic Sciences 2023 ..................................... 37
INDUSTRY ..................................................... 12 India and its Trade Disputes ........................................................... 39
Sugar Industries in India .................................................................. 12 World Co-Operative Economic Forum ........................................ 39
Fertiliser Subsidy ................................................................................ 13 Circular Migration .............................................................................. 39
Pricing Mechanism for Gas ............................................................. 14 Project Mariana................................................................................... 40
Issue of Illegal Mining ...................................................................... 15 Global Innovation Index-2023 ....................................................... 40
Differential time-based electricity tariffs .................................... 16 Digital Consent Acquisition (DCA) System ................................ 41
India imposes anti-dumping duty on Chinese steel............... 17 International Competition Network ............................................. 41
The Perils of Patent Amendments ................................................ 18 Penny Drop Verification ................................................................... 41
Reputation of India’s Pharma Industry ....................................... 18 Embedded Finance ............................................................................ 42
INFRASTRUCTURE ....................................... 19 International Monetary Fund Proposal to Increase IMF
Multi-Modal Logistics Parks (MMLPs) ......................................... 19 Quotas ................................................................................................... 42
SC upholds the validity of key IBC provisions........................... 43
CAPITAL MARKET ........................................ 20
India inks Supply Chain pact at IPEF. ........................................... 43
Central Counterparties ..................................................................... 20
Special Economic Zones (Fifth Amendment) Rules, 2023 ..... 44
Dabba Trading .................................................................................... 21
Periodic Labour Force Survey (PLFS) ........................................... 45
One-hour trade settlement ............................................................ 22
Dollarization......................................................................................... 45
Finfluencers under SEBI’s scrutiny ................................................ 22
Goldilocks Effect ................................................................................. 46
Index Funds.......................................................................................... 23
Fiscal Prudence ................................................................................... 46
Corporate Debt Market Development Fund ............................. 24
Boost to UPI Limits for Health & Edu and Regulatory
Sovereign Green Bonds (SGB) ....................................................... 25
Framework for Digital Lending ...................................................... 46
Surety Bonds ....................................................................................... 26
SIDBI and TDB collaboration to enhance credit access for
World's First Green Bond Standards............................................ 26 MSMEs ................................................................................................... 47
Demat Debit and Pledge Instruction ........................................... 27 Investor Risk Reduction Access platform ................................... 47
India’s 50-year bond ......................................................................... 27 Laundromat Countries...................................................................... 48
Securities Appellate Tribunal (SAT) .............................................. 28 Off-Budget Liabilities ........................................................................ 48
Catastrophe bonds ............................................................................ 28 GIFT NIFTY ............................................................................................ 48
Non-Convertible Debentures......................................................... 28 Gresham’s law ..................................................................................... 49
TAXATION .................................................... 29 SCHEMES ...................................................... 50

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Growing Tax Base in India ............................................................... 29 Open Market Sale Scheme.............................................................. 50
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CC_COMPILATION_ECONOMY & AGRICULTURE MAY- DEC. -2023
Changes in the PLI scheme for White Goods ........................... 50 International Cotton Advisory Committee (ICAC) ................... 63
Liberalized Remittance Scheme (LRS) ......................................... 51 India becomes the chair of the International Sugar
Composition Scheme of GST ......................................................... 52 Organization (ISO) for 2024............................................................ 63
Rise in Horticulture Output ............................................................. 64
Drones to Women Self-Help Groups Scheme .......................... 52
Nutrient-based subsidy.................................................................... 64
Interest Equalization Scheme ......................................................... 53
Pusa-2090 to replace Pusa-44 ....................................................... 65
REPORTS IN NEWS: ..................................... 53
Expanding cultivation of GI-tagged Onattukara Sesame...... 65
'The Impact of Disaster on Agriculture and Food Security'
Report by FAO .................................................................................... 53 Agri Stack Project ............................................................................... 66
Basic Animal Husbandry Statistics 2023 ..................................... 54 General Crop Estimation Survey.................................................... 66
Report on Currency and Finance 2022-23 ................................. 56 CMV and ToMV: mosaic virus ........................................................ 67
LEADS 2023 report ............................................................................ 56 Pesticide Monocrotophos ............................................................... 67
Rise in Global Debt: Institute of International Finance (IIF) Heat-Tolerant Wheat Seeds ........................................................... 68
Report .................................................................................................... 57 GM Dhara Mustard Hybrid (DMH-11) ......................................... 68
World Energy Employment 2023 Report ................................... 58 Borlaug Award .................................................................................... 68
'Hidden Streams: Linkages Between Illicit Markets, Financial Dr. M.S. Swaminathan....................................................................... 69
Flows, Organized Crime, and Terrorism’ Report ...................... 59
Rubber plantation in North-East India to be increased......... 69
Crypto Can't Be Legal Tender: IMF-FSB Paper ......................... 60
Fourteenth World Spice Congress (WSC) .................................. 70
India Finance Report- CAFRAL ...................................................... 61
Malta Farming ..................................................................................... 70
AGRICULTURE: ............................................. 61 Issues with GM Crops ....................................................................... 70
National Mission for Edible Oils .................................................... 61 The Popularity of Hybrid Seeds ..................................................... 71
Direct-Seeding Method ................................................................... 62
Tea fortification .................................................................................. 62
Saffron Production: Red Gold ........................................................ 63
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BANKING
period. In this situation, RBI submits its G-
Monetary Policy
Sec as collaterals.
News Excerpt:
• Marginal Standing Facility (MSF): This is the
RBI kept the repo rate unchanged at 6.5% amid concerns
interest rate at which the RBI lends short-term loans
over the global banking crisis.
to banks, using their G-Sec of SLR quota as
What is Monetary Policy (MP)?
collateral.
• MP is a macroeconomic policy designed by a
• Standing Deposit Facility: This is similar to the
country's central bank. It aims to manage the money
reverse repo rate, but in this case, RBI doesn't pledge
supply and interest rates and shapes several
any G-Sec as collateral.
variables, including consumption, savings,
• Open Market Operations: RBI buys and sells G-Sec
investment, and capital formation.
to control the money supply. Therefore
• It ensures price stability, economic growth, job
o When RBI Buys G-Sec: INCREASE in money
creation, and social justice in any country.
supply
• According to the Philip Curve, Higher inflation
o When RBI Sells G-Sec: DECREASE in money
lowers unemployment, so inflation at a controlled
supply
level is considered a sine qua non for any economy.
Tools of Monetary Policy
• Quantitative Tools: Also known as Indirect tools, Repo Pause
their impact is felt on the entire economy and not Repo Pause is the decision of the RBI to pause the expected
on a particular sector. These include: hike in the Repo Rate. Several reasons could have directed the
o Statutory Reserve Requirements: These are present pause, such as:
set on a fortnightly basis and help in • OPEC+ production cut for 2023.
preventing bank runs. • Banks' liquidity crisis in the Western economies such as the
▪ Cash Reserve Ratio: JM Keynes first US and Europe.
proposed this idea. It is the deposit that • Breathing space provided by the moderation in inflation
banks have to keep with the RBI. Banks rate forecast for FY24 to 5.2 percent.
do not earn an interest rate on such • Slump in consumption.
deposits except in exceptional • Tepid private investment.
circumstances. It is mandated under the
RBI Act 1934. • Qualitative tools: Unlike quantitative tools, which
▪ Statutory Liquidity Ratio (SLR): These control the volume of loans, Qualitative tools
are the deposits banks must keep in control the distribution of loans to a particular
liquid assets with RBI, e.g., Gold, sector of an economy. These include:
Government securities (G-Sec), Treasury o Moral Suasion or Publicity: It means using
bills, etc. The ratio is mandated under the persuasion rather than a penalty to bring a
Banking Regulation Act 1949 and change.
cannot be more than 40% of a bank's Net o Direct Action: If any bank flouts RBI's directive,
Demand and Time liabilities. then RBI can punish the same bank. For
o Liquidity Adjustment Facility instance, in 2019, it introduced a Clawback
▪ Repo Rate: The rate at which a bank provision, in which if top executives committed
borrows from RBI on a short-term basis any scam or fraud, they must return any
by pledging its G-Sec as collateral. previously paid salary or bonus even if they are
However, Banks can't use securities retired or left their job after the scam.
already pledged under SLR. It is the o Loan to Value (LTV): This is a cap placed on
policy rate to control inflation in India. loans pledged against a physical asset such as
▪ Reserve Repo Rate: The rate at which Gold or a House. RBI fixes the rate; accordingly,
the bank earns interest for parking its the maximum amount sanctioned is decided.
surplus fund with the RBI for a shorter
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For instance, if LTV is 75%, then only 75% of the

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asset value could be lent by a bank.
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o Priority Sector Lending (PSL): Started in o The RBI has emphasized that the support
1968, PSL norms mandate banks to lend at measures alone are insufficient if banks do not
least 40% of their loans to the priority enhance their risk management and
sector defined by the RBI. These include governance practices.
sectors like agriculture, micro and small o It highlights the need for banks to improve
enterprises, and the weaker section. their overall risk assessment and governance
Understanding the Stance of RBI frameworks.
RBI announces its monetary policy stance in every MPC o The RBI has also initiated supervisory actions
announcement, this includes: against some large private sector banks for
• Calibrated Tightening: They will either increase or lapses in governance.
keep the repo rate unchanged, but they will not cut • Penalties for Non-Compliance:
it. o Several banks have been penalized by the
• Neutral: They can increase or decrease or keep the RBI for violating norms related to Know
repo rate the same. Your Customer (KYC), customer grievance
• Accommodative: In this case, they will either redressal, fraud reporting, and other
decrease or keep the repo rate unchanged, but they regulations.
will never increase it.
Loans or debt Good borrowers Repayment obligations
instruments are are convinced to of borrowers are adjusted
Evergreening of Loans exchanged enter into using internal or office
News Excerpt: between two structured deals accounts.
lenders to avoid with stressed
The Governor of the Reserve Bank of India (RBI) raised
classifying them borrowers.
concerns regarding the banks' adoption of overly as non-
ambitious growth strategies and their involvement in the performing
practice of evergreening loans. assets.
About Evergreening of Loans
Selling and Structured Internal Account
Evergreening loans involve extending new or additional
Buying Back Deals Adjustments
loans to borrowers unable to repay existing loans. The Loans
practice aims to hide the true status of non-
performing assets or bad loans. It is also referred to as Stressed borrowers or
zombie lending. Approaches Utilized for related entities receive
Evergreening Loans new loans or loan
Impact of Evergreening Loans:
renewals near the
● Creates a false impression of banks' asset quality repayment date of
and profitability. previous loans.
● Delays the recognition and resolution of stressed
assets. Renewing or Disbursing
New Loans
● Undermining credit discipline increases moral
hazard among borrowers. Other measures to control the Evergreening of loans:
● Erodes trust and confidence among depositors, • Robust Risk Assessment: Thorough due diligence,
investors, and regulators. repayment capacity analysis, and assessment of the
RBI initiatives countering Evergreening of loans borrower's business model are essential in
• RBI's Support Measures for the Banking Sector: identifying potential risks and avoiding the need for
o The RBI has implemented various measures to evergreening loans.
assist the banking sector, including liquidity • Transparent Reporting and Disclosure: Accurate
support and regulatory forbearance. and timely information enables regulators, investors,
o Additionally, establishing an asset and stakeholders to assess the financial health of
reconstruction company (ARC) and banks and detect any potential evergreening
introducing a resolution framework have been practices.
initiated. • Proper Asset-Liability Management (ALM) to
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• Emphasis on Risk Management, Assessment and address risks arising from maturity mismatches,
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Governance: interest rate fluctuations, and market risks.

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• Effective Communication and Media Interaction: • DICGC's deposit insurance coverage extends to
Open and transparent communication helps all licensed commercial banks, including Local
maintain confidence in the banking system. Area Banks (LABs), Payments Banks (PBs), Small
• Compliance with ESG (Environmental, Social and Finance Banks (SFBs), Regional Rural Banks
Governance) Norms: Adopting sustainable (RRBs), and cooperative banks regulated by the
practices, disclosing ESG performance, and aligning RBI.
lending policies with climate change and social • DICGC's insurance coverage encompasses various
welfare goals are necessary. types of deposits, including savings, fixed, current,
• Recommendations of P J Nayak Committee: The and recurring deposits, as well as accrued interest.
Committee to Review Governance of Boards of • Each bank depositor is insured for a maximum of
Banks suggests imposing penalties, such as Rs 5 lakh, covering both the principal and interest
cancelling unvested stock options and claw-back of held by them at the time of the bank's liquidation or
bonuses, on officers involved in significant failure. Previously, the insurance cover provided by
evergreening. DICGC was Rs 1 lakh, but it was raised to Rs 5 lakh
in 2020.
• DICGC does not provide insurance coverage for
Prepaid Payment Instrument (PPI) deposits of foreign governments, central/state
News Excerpt: governments, inter-bank deposits, deposits of
A committee responsible for reviewing customer service State Land Development Banks with State
standards for RBI-regulated entities has proposed cooperative banks, any deposits received outside
extending the Deposit Insurance and Credit Guarantee India, or any amount specifically exempted by the
Corporation (DICGC) to include Prepaid Payment corporation with RBI's approval.
Instruments (PPIs) to protect against fraud and
unauthorized transactions.
Understanding PPI: Credit information companies
● They are financial instruments that enable various News Excerpt:
transactions, including purchasing goods and The Reserve Bank of India penalized four credit
services, financial services, and remittance facilities, information companies (CICs) for failing to update
utilizing their stored funds. borrowers' credit information.
● PPIs can take the form of cards or digital wallets.
Importance of CICs
● There are two types of PPIs: Small PPIs and full-KYC
• They rate the borrowers on a scale of 300-900, with
(Know Your Customer) PPIs. 900 being the highest rating.
● Small PPIs can be further classified as PPIs up to • The lender decides whether to grant the borrower a
Rs 10,000 with cash loading capability and PPIs loan based on the company credit report and credit
up to Rs 10,000 without cash loading capability. score.
● PPIs can be loaded or reloaded with funds through • CIC is playing a vital role in developing behaviour-
cash deposits, bank account debits, or credit and based credit risk models, which help introduce healthy
debit card transactions. competition and innovation in the Indian Financial
● PPI cash loading is limited to Rs 50,000 per month, system.
considering the overall limit of the respective PPI. • CIC’s role is important because they help:
● Banks and non-banks are authorized to issue PPIs o Discourage repeat defaulters and concurrent
upon obtaining approval from the RBI. borrowers.
Understanding DICGC o Study and assess the risk its customers pose to
• DICGC, a subsidiary of the RBI, is responsible for minimize undesirable customer selection.
providing deposit insurance to protect
depositors' funds. Credit Information Company (CIC)
• The deposit insurance system plays a crucial role in ● Credit Information Company (CIC) or Credit
maintaining financial system stability by assuring Bureau is an RBI-licensed and authorized
small depositors that their deposits are protected in organization that collects, maintains, and analyzes
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case of a bank failure. the consumer and business credit information of

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Table 1: Benefits of Credit Information Flow to
individuals and companies across the nation, as
Different Stakeholders
provided by financial institutions.
Stakehold Benefits
● Based on the provided data, Credit Information er
Company prepares Credit Information Report (CIR) Lenders, ● Stakeholders can see the client's
for individuals and Credit Company Report (CCR) for Creditors, complete range of credit obligations,
companies. CIC further calculates and generates alternative payment status, and level of
credit scores for individuals and credit ranks for data indebtedness or over-indebtedness.
companies based on their creditworthiness and past providers ● Stakeholders can price risk
credit history. appropriately and provide custom
● Currently, there are four CICs — products and services to meet the
specific needs of clients.
o Credit Information Bureau (India) Ltd (CIBIL),
● Stakeholders can assess new
o Equifax Credit Information Services Pvt Ltd, borrowers with no formal credit
o Experian Credit Information Company of India histories (specifically low-income
Pvt Ltd and groups, women borrowers, and small
o CRIF High Mark Credit Information Services and medium-sized enterprises).
Pvt Ltd. ● Stakeholders can proactively manage
collections to streamline the process
● These companies are governed by the Credit
and expend effort where needed to
Information Companies (Regulation) Act
maximize collections where the
(CICRA)-2005.
recovery rate is highest.
RBI’s Action on CICs Consumers ● Credit reporting enables consumers to
• The RBI issued notices to these companies advising establish "Reputational collateral"
them to show cause why a penalty should not be based on credit history, thus reducing
imposed for their failure to comply with the the need for physical collateral.
provisions of the CIC (R) Act read with the CIC Rules. ● Consumers who make on-time
• The RBI then warranted the imposition of a payments, do not miss payments, and
engage in other good borrowing and
monetary penalty on the company.
repayment behaviour will benefit, and
Reasons for RBI Action
creditors may offer them better terms
• The RBI had received many complaints from of credit or higher credit lines.
customers about CICs not updating the status of ● Consumers can benefit from reporting
borrowers. nontraditional data, such as payments
• As a result, many customers were unable to get for telephone bills, utilities, and other
loans or credit card information. charges, to the credit bureau. Those
consumers who do not have formal
relationships with banks and other
creditors can show that they meet
other payment obligations
responsibly and are worthy of credit.
Regulators ● Comprehensive information sharing
and enables regulators and supervisors to
supervisors develop appropriate regulatory tools
for macro and micro-prudential
supervision.
● It provides supervisors with the
information for systemic risk
monitoring and prudential
supervision.
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Interoperability of Cards • It includes access to exclusive deals and benefits

connected to numerous networks.
News Excerpt:
• The flexibility to change networks in response to
The RBI has released a draft circular to revolutionize
evolving circumstances gives users more leverage
consumer financial management by promoting
over their financial choices.
interoperability in credit, debit, and prepaid cards,
allowing consumers to choose their preferred networks. • The end user ultimately benefits from this enhanced
power over market dynamics, which fosters
healthy competition between card networks and
Interoperability is the technical compatibility that
issuers.
enables a payment system to be used in conjunction
with other payment systems.
Impact on the Economy
Interoperability allows Prepaid Payment Instrument
• The competition can drive innovation, improve
(PPI) Issuers, System Providers, and System
service quality, and lead to the introduction of new
Participants in different systems to undertake, clear,
benefits and rewards programs, ultimately
and settle payment transactions across systems
enhancing the consumer experience.
without participating in multiple systems.
• Increased interoperability can boost digital
transactions, especially when integrated with
Relevance of the proposal platforms like UPI, which can contribute to the
• It is a customer-centric strategy that allows people growth of the digital economy.
to select from various card networks, including • The flexibility to switch networks based on specific
recognizable brands like American Express, Diners needs, such as international travel, can lead to
Club International, Mastercard, RuPay, and Visa, more informed financial decisions and optimized
which is at the core of the RBI's plan. spending, positively influencing personal financial
• When applying for a credit or debit card, customers management.
cannot choose their preferred card network.
Instead, they are constrained by the issuing bank's
External benchmark-based lending rate
choice of network affiliation.
• The present system hinders healthy competition
(EBLR) mechanism
and blocks innovation in the payments sector. News Excerpt:
• A new proposal by the RBI mandates that card The Reserve Bank of India (RBI) has asked the banks to
issuers give customers the option to choose their be transparent in resetting the interest rate and EMIs
of floating-rate home loans under the external
preferred card network either during the card
benchmark-based lending rate (EBLR) mechanism.
issuance process or at a later time. The proposal
About EBLR
aims to correct this problem.
● The lending rates set by banks based on external
• According to the RBI, the current agreements
benchmarks are known as external benchmark
between card networks and issuers do not
lending rates.
adequately accommodate user choice.
● The RBI mandated that banks develop a standard
• The RBI also recommends that cards be provided
external benchmark for loans starting on October 1,
across numerous networks to prevent issuers from
2019.
entering into contracts that ban customers from
● The following are four external benchmarking
using other card networks.
mechanisms:
• This step ensures that people are not limited to a
o The RBI announced the repo rate.
single network and may take advantage of the
o The yield on a 91-day Treasury bill.
unique benefits of many networks.
o The yield on the 182-day Treasury bill.
Choice and Interoperability
o Financial Benchmarks India Pvt. Ltd. (FBIL)
• It allows people to select their preferred card developed market interest rate benchmarks.
networks and customize their payment ● EBLR in banking is extremely relevant because banks
alternatives to suit their particular needs and cannot offer loans to customers at a rate lower than
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preferences. the EBLR rate. Banks use EBLR to decide the interest
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rate on home loans and other loans.

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Shift from IBLR to EBLR ▪ By informing his bank, a borrower can switch his
• Several issues with the IBLR (Internal Benchmark Home Loan linked to MCLR to an external
Lending Rate) have led to the shift to EBLR. benchmark.
• Banks only partially distributed the advantages of MCLR:
the RBI's reduction in the repo and reverse repo ● The RBI implemented the MCLR, or Marginal Cost of
rates to borrowers. In such a case, the borrowers Fund-based Lending Rate, a system for calculating the
were at a loss. interest rate on credit, which was extended in April 2016.
• The loan rate is affected by several factors. These ● The MCLR is used for all rupee loans disbursed and credit
factors could include the bank's spread, current (loan) limits renewed after April 1, 2016.
financial picture, list of depositors, and non- The Impact of EBLR on the Economy
performing assets (NPAs). ● The transmission of monetary policy will
• Since several factors were connected to the internal noticeably improve due to the significant rise in
benchmark rate (IBLR), no actual change in EBLR-based lending.
effective interest rates could be made. ● The transmission of monetary policy illustrates how
• The requirement for greater transparency in adjustments to the central bank's policy rates
determining internal benchmark rates hampers the impact different areas of economic activity, such
transmission of lending rates. as lending and inflation.
Internal Benchmark Lending Rate (IBLR):
The Internal Benchmark Lending Rates are a set of
RBI Proposal to Classify a Borrower as a
reference lending rates calculated after considering
factors like the bank's current financial overview, “Wilful Defaulter”
deposits, and non-performing assets (NPAs). BPLR, Base News Excerpt:
rate, and MCLR are examples of Internal Benchmark Banks are expected to witness a spike in wilful defaults
Lending Rates. following the RBI proposal to classify a borrower as a
wilful defaulter within six months of the account
Benefits of EBLR for the Borrowers and the Banks:
• The EBLR rate has various advantages for both becoming a non-
borrowers and lending banks. performing asset Non-performing asset
• The spread over the EBLR is entirely up to the banks' (NPA). (NPA):
discretion. Who are willful It is a loan or advance for
defaulters? which the principal or interest
• Since the EBLR is an external rate, loan applicants payment remained overdue
• ‘Willful default’
will be notified sooner of a policy rate reduction for 90 days.
action affecting lending rates. would be deemed
• The interest rates that borrowers can compare to have occurred if the borrower has defaulted in
various banks charge. This makes it easier for meeting their repayment obligations to the lender
consumers to compare different loan options even when they can honour the obligations.
because they are aware of each bank's profit margin • It happens when the borrower does not utilize the
relative to the fixed interest rate. finance from the lender for the specific purpose for
How does EBLR impact the borrower’s EMI outgo? which it was availed and has diverted the funds for
▪ Based on the rise in outstanding loans related to other purposes without the knowledge of the bank.
external benchmarks, banks indicated a strong • The Reserve Bank of India has issued a draft paper
improvement in transmission due to the ongoing for handling
liquidity surplus conditions. willful
▪ A Home Loan taken out before October 1, 2019, is defaulters,
most likely to be linked to a Marginal Cost of wherein it has
Funds-based Lending Rate (MCLR). expanded the
▪ The MCLR Home Loan is linked to a one-year MCLR scope for
rate, and banks add their margin/spread to the regulated
MCLR rate to give the customer the final interest entities that
rate. can classify
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borrowers as
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willful
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defaulters, refine the identification process, and
mandate a review and finalization on willful default
Rising Unsecured Loans in India
aspects within six months of an account being
classified as NPA. News Excerpt:
How willful defaulters affect the economy? Banks in India are seeing a rise in stress related to
● Impact on the Economy: The impact of willful unsecured personal loans.
defaulters is not limited to the banking sector; it also More details on the news:
extends to the broader economy and can stifle ● The risk of Indian banks' unsecured retail loans is
rising as lending to borrowers with overdue debt has
economic growth.
increased.
● Affects the financial health of banks: Deliberate
● The share of loans to borrowers with weaker risk
default on loans directly affects the financial health
profiles and increased retail borrowers' leverage
of the banks. has risen.
● Rising NPA: Willful defaulters contribute to the ● As per RBI data, the share of unsecured loans in
banking sector's rising Non-Performing Assets their non-food, non-agricultural portfolio, after
(NPAs). large corporates, home loans, and NBFCs, has risen
● Trust erosion: Willful defaulters erode the trust of from 5.6% in March 2019 to 8% in April 2023.
banks and financial institutions. What are Unsecured Loans?
● Impact on the market: When major business ● Does not require any type of collateral.
figures or companies are found to be willful ● Riskier than secured loans for lenders, so they
defaulters, investor confidence in the corporate require higher credit scores for approval.
sector can be damaged, affecting stock prices and ● If a borrower defaults, the lender may commission a
market stability. debt collection agency or take the borrower to
court. Examples include credit cards, student loans,
and personal loans.
Card-On-File Tokenization (CoFT) Benefits of unsecured loans:
News Excerpt: ● Promote entrepreneurship: Unsecured loans can
RBI to introduce card-on-file tokenization at the bank help aspiring entrepreneurs start and grow their
level. Guidelines issued by the Reserve Bank of India (RBI) businesses.
on Card Tokenization, w.e.f 1st July 2022, specify that - ● Financial Inclusion: It promotes financial inclusion
clear card number, CVV Expiry date and any other by providing access to credit for individuals and
sensitive information related to cards cannot be
businesses who may not have valuable assets to use
stored by merchants for processing online
as collateral.
transactions.
● Faster approval processes: The borrowers can
About CoFT:
access funds quickly in times of need, which can be
● CoFT or tokenization is the process of replacing a
vital for addressing emergencies.
card's 16-digit number on the plastic card with a
● Credit products diversification: Unsecured loans
unique alternate card number, or 'Token', which is
contribute to a diverse range of credit products
unique for a combination of card, token requestor,
available in the market, giving borrowers a wider
and device.
choice.
● It provides ecosystem security and an enhanced
● No collateral: It does not require a customer to
checkout experience.
Benefits: pledge assets as collateral. This means that a
● Enhance convenience for cardholders to get tokens customer is not at risk of losing property if he/she
created and linked to their existing accounts with cannot repay the loan.
Challenges of unsecured loan:
various e-commerce applications.
● Destabilize financial system: Many borrowers
● Safer as the actual card details are not
defaulting on their unsecured loans can lead to
shared/stored with the merchants to perform the
significant financial losses for lending institutions,
transaction.
potentially destabilizing the financial system if left
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● This allows secure online transactions without

unchecked and leading to a significant increase in
exposing sensitive details like card number and card
NPAs.
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verification value (CVV).
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● Economic Inequality: Uneven access to unsecured ● Provides a fiscal buffer to support budget
loans can contribute to economic inequality. targets and assists in offsetting potential losses
● High-interest rates: Due to higher interest rates, from lower disinvestment, telecom pay-outs, or
the borrowers may end up paying a significant tax revenues.
amount in interest over the life of the loan. ● Enhances the government's ability to manage
● Over-indebtedness of customers: High availability fiscal deficits with relative ease.
of unsecured loans can lead to consumer over-
indebtedness, impacting personal finances.
RBI’s riot provisions
● Default risk: Since no collateral is involved, lenders
News Excerpt:
face a higher risk of default on unsecured loans.
Steps taken: The state government of Manipur has invoked a rarely
● The RBI regularly monitors the financial health of used Reserve Bank of India (RBI) provision regarding
banks and NBFC to ensure they maintain adequate loan restructuring and rescheduling. It is based on
chapter No. 7 of the "Reserve Bank of India (Relief
capital and liquidity to withstand shocks related to
Measures by Banks in Areas Affected by Natural
unsecured loans.
Calamities) Directions, 2018," which is related to "Riots
● RBI has asked the Banks and NBFCs to strengthen
and Disturbances.”
their internal surveillance mechanisms and address
Provisions:
the build-up of risks.
According to RBI (Relief Measures by Banks in Areas
● It has asked banks to monitor their unsecured
Affected by Natural Calamities) Directions, 2018-
lending portfolios, specifically credit cards. • Whenever RBI advises the banks to extend
rehabilitation assistance to riot/disturbance-
RBI Surplus Transfer affected persons.
• However, it shall be ensured that only genuine
News Excerpt: persons, duly identified by the State
The Union Government has received a substantial fiscal Administration as having been affected by the
boost as the Reserve Bank of India (RBI) has approved riots/ disturbances, are provided assistance as
for a significant transfer of surplus funds. The surplus per the guidelines.
transfer for the accounting year 2022-23 totals Rs 87,416 • In the event of large-scale riots where most of the
State/Area is affected and the State Administration
crore, marking a remarkable 188% increase compared to
is not in a position to identify the riot/disturbance-
the previous year.
affected persons, subject to SLBC's specific decision,
Factors Responsible for the Surge
the onus of identifying genuine persons will rest
● Public sector banks and oil marketing companies with banks.
recorded higher dividends.
● Investments yielded increased earnings, while
valuation changes on dollar holdings, revaluation Incremental Cash Reserve Ratio (ICRR)
of forex assets, and adjustments in reserves as per News Excerpt:
the Bimal Jalan Committee recommendations The RBI has asked banks to maintain an ICRR of 10% on
also contributed to the surplus. the increase in their deposits.
● The impact of rupee depreciation against the About ICRR:
dollar affected the surplus transfer. ● RBI has the option to impose ICRR, in addition to the
● The surplus distribution framework with higher CRR, in periods of excess liquidity in the system.
rates resulted in increased payouts.
Cash Reserve Ratio
● Earnings from the sale of foreign exchange and
investments in US treasuries were higher.
• Banks are required to maintain liquid cash
Implication of the surge amounting to a certain proportion of their NDTL
● Offers fiscal relief to the government, particularly with the RBI.
in addressing uncertainties in the divestment • This tool controls the economy's liquidity and
program and managing fiscal numbers. acts as a buffer during periods of bank stress.
11
● Helps mitigate potential shortfalls in tax • Banks are currently required to maintain 4.5 % of
buoyancy and other revenue sources. their NDTL as CRR with the RBI.
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● This order means that banks will now have to park ● Major cultivation is largely concentrated in Uttar
more liquid cash with the RBI. Pradesh. In western India, it is spread over
Impact of this activity by RBI: Maharashtra and Gujarat, as well as in the irrigated
● Targeting Inflation: Through sucking out the tracts of Karnataka, Tamil Nadu, Telangana, and
liquidity in the market, banks will have lesser money Andhra Pradesh.
to lend. It will eventually bring down demand for
goods and services, thus bringing down prices.
● Interest rates in the Market: Short-term interest
rates can increase as the supply of funds in the
economy gets tight.
o The introduction of ICRR, even temporarily, will
impound banks' resources and have an upward
impact on market rates.
o While there will still be surpluses in the market,
the concept of impounding resources will exert
upward pressure on sentiment and, hence,
interest rates.
● Balancing the liquidity: Hiking the CRR would have
had monetary policy connotations, so the temporary
increase is aimed to be a non-disruptive way of
dealing with the issue of excess liquidity in the
system after the recent demonetization.
How will ICRR be discontinued?
● Based on an assessment of the situation and ● Sugarcane yields are low in northern India, whereas
liquidity conditions, the ICRR would be released in they are high in southern India. This is because the
stages so that system liquidity would not be tropical climate of South India provides for a higher
subjected to sudden shocks and money markets sucrose content.
would function in an orderly manner.
● However, all Scheduled Banks will have to maintain Rangarajan Committee
a 10% incremental cash reserve ratio (ICRR). Established in 2012 to provide suggestions on sugar
sector regulation. It has recommended several
suggestions:
INDUSTRY • Abolish quantitative sugar export and import
limitations and replace them with suitable tariffs. So,
Sugar Industries in India there are no more outright prohibitions on sugar
exports.
News Excerpt:
• The minimum radial distance concept should be re-
Recent estimates suggest that sugar exports from India
examined.
now stand second only to Brazil. Between 2017-18 and
• The selling of by-products should be unrestricted, and
2021-22, exports have soared from USD 810.9 million to
the market should establish pricing.
USD 4.6 billion. It is estimated that sugar exports may
• States should also alter their policies to allow mills to
cross USD5.5 billion in the current fiscal year.
use bagasse-generated energy.
Sugarcane
• Remove the restrictions on the distribution of non-levy
● It is a tropical area crop mainly cultivated in sub-
sugar.
humid and humid climates. It is largely an irrigated
crop in India. It requires
o Temperature: Between 21-27°C with a hot and Sugar Industry and Export from India
humid climate. • In India, around 5 lakh people are directly employed
in sugar mills, and there are about 50 million
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o Rainfall: Around 75-100 cm.

o Soil Type: Deep, rich, loamy soil. sugarcane farmers.
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• India is the 2nd largest sugar producer after Brazil, restricting competition, inhibiting entry, and
with about 15% of the global sugar production preventing further investment by entrepreneurs.
share. • Problems with production—The majority of sugar
• Indian sugar exports have ballooned from a mere 6.2 mills are unable to benefit from economies of scale.
lakh tonnes in 2017 -18 to 110 lakh tonnes in 2021- Further, India's sugar production cost is high
22. Of this export, 56.29 lt is raw sugar, while white compared to international levels.
sugar accounted for 53.71 lt. • Seasonal Nature: A seasonal industry lasts about
• The biggest importers of Indian sugars are: 4-5 months every year. This results in financial
o Raw Sugar- Indonesia- Bangladesh-Saudi losses for workers and a lack of full utilization of
Arabia-Iraq-Malaysia sugar mills.
o White Sugar- Afghanistan-Somalia-Djibouti- • Faulty policies: To control the sugar demand-supply
Sri Lanka-China- Sudan. quagmire, the government introduced various
• Indian Raw Sugar has seen a significant rise in its interventions, such as export duties, stock limits on sugar
exports and fetching a 4% premium over the global mills, and changes in meteorological rules. However, these
benchmark price. This is attributed to several have created more problems for the industry than
factors, such as: solutions.
o Ease of transport and distribution as it can
be transported in large vessels with no
Fertiliser Subsidy
bagging or containerization.
News Excerpt:
o It is free of dextran (a bacterial compound
The government
formed when the cane is exposed to the sun
will roll out a
for too long after harvesting).
modified direct
o It carries very high polarization, i.e., it has
benefit transfer
very high sucrose content, and thus, it is easy
(DBT) scheme of
to refine.
fertilizers on a pilot
o It acts as an alternative to refineries during
basis. Under the
the off-season in Brazil.
Challenges Faced by the Sugar Industry new plan, sales of
• Crop Competition: Sugarcane competes with subsidized
other food and cash crops such as rice, cotton, etc. fertilizers to
This impacts the availability of sugarcane to mills farmers will be capped, taking into consideration their
and creates volatility in the market. land holdings.
Fertiliser Subsidy in India:
• Low-Output- India's output per hectare is
• Fertilizers are natural or artificial substances that
exceedingly low in comparison with leading
improve the growth and productivity of plants.
sugarcane-producing countries. Similarly, the
• They contain the chemical elements Nitrogen (N),
average rate of sugarcane sugar recovery is less
Phosphorus (P) and Potassium (K).
than ten per cent which is again quite low.
• In India, there are 3 basic fertilizers: Urea, DAP and
• Cane reservation area and bonding issue- Both
Muriate of Potash (MOP).
farmers and Sugar mill owners are bonded with
• The Government of India provides a subsidy to
each other through the Cane reservation policy
fertilizer producers so that they can sell their
under which a mill owner had to purchase from
products at low rates to farmers.
cane farmers within the cane reservation area.
• Various types of subsidies are provided, such as:
Conversely, farmers are bound to sell to the mill.
o Subsidy on Urea: Urea is the most produced,
This disrupts farmers' bargaining power and
imported, and consumed fertilizer. Urea Subsidy
restricts the options for the mill owners.
is based on the cost of production at each plant,
• Minimum distance criteria—The government has
and the units are required to sell the fertilizer at
mandated a minimum radial distance of 15 km
the government-set Maximum Retail Price
between any two sugar mills, but this often distorts
13
(MRP).
the market by giving mills power over farmers,
o Subsidy on Non-urea Fertilizers: These are
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generally decontrolled fertilizers, but these are

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brought under the control regime due to global o NBP (UK)
geopolitical turbulence. They are regulated o Russian Gas
under the Nutrient Based Subsidy (NBS) • The price of these benchmarks in the prior year
Scheme. is used and is applied for six months. For instance,
Issues Related to Fertiliser Subsidy in India the price applicable from April 1 to September 30,
• Subsidy on urea and DAP makes them cheaper vis-à- 2022, is based on benchmark prices from January to
vis other fertilizers. This makes them prone to December 2021.
overuse. • This formula created several issues, such as:
• The use of N, P, and K in India is far away from the o Despite real-time price rises, domestic users pay
ideal ratio of 4:2:1. This can be attributed to the fact less. As a result, producers are disincentivized
that Urea and DAP contain more than 30% of any and thereby decrease their output.
single nutrient. This results in an imbalance that has o This creates an unending cycle in which the
implications for soil health, crop yield, and food government imports gas at higher prices,
security. forcing end users to buy imported gas at higher
• Subsidized urea is getting diverted to bulk prices.
buyers/traders or even non-agricultural users such as New Pricing Mechanism
plywood and animal feed makers. • It is based on the recommendations of the Kirit
Parikh Panel.
• The panel made the following recommendations:
Pricing Mechanism for Gas
o For Legacy fields- It will be indexed to the
News Excerpt:
crude oil price. It will be 10% of the monthly
The Union Cabinet has approved significant changes in
average of Indian Crude Basket and shall be
the pricing regime for domestic natural gas under the
notified monthly.
ambit of the administered price mechanism.
o For Nomination fields (acreages that the
Pricing Mechanism of Natural Gas
government awarded to ONGC and OIL before
1999, i.e., before the auction process was
introduced), they will be subject to the
Administered Price Mechanism (the
government sets the price of natural gas
produced by oil and gas companies) and will be
subject to a floor and a ceiling.
o Both New Wells (drilled in areas where oil and
gas reserves are known or suspected to exist but
have not yet been developed) and Well
Interventions (Involve various techniques that
are used to increase the productivity of existing
wells) in the nomination fields of ONGC and OIL
would be allowed a premium of 20% over the
APM price.
• There shall be no revision in the ceiling price for
two years, after which the cap will increase by 25
cents per year.
Significance of the Move
Existing Mechanism
• Linking with the crude oil prices makes natural gas
• Most natural gas produced in India doesn't
more relevant to India’s consumption basket.
command a market-determined price.
• It will remove the time lag factor, and now data on
• To set the price, the government uses a formula in
the Indian crude basket price from the previous
which the weighted average price of four global
month will form the basis for determining the APM
14
benchmarks:
o Henry Hub (USA) gas price.
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o Alberta Gas (Canada)
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• It will significantly decrease prices of Piped Natural • Environmental degradation: Illegal mining can
Gas (PNG) for households and Compressed Natural cause deforestation, soil erosion, and water
Gas (CNG) for transport. pollution, impacting wildlife habitats and causing
• The move shall also lower the fertilizer subsidy ecological damages.
burden and help the domestic power sector.
Issue of Illegal Mining Manganese Ore
News Excerpt: • It is an element found in the Earth’s crust and is the
The Indian Bureau of Mines (IBM) had flagged massive twelfth most abundant.
• It is a nutrient important for metabolising
irregularities and corruption in mining Manganese ore in
carbohydrates, cholesterol, and amino acids.
Odisha.
• It has multiple industrial applications, such as in the
Mining in India
production of steel and aluminium alloys, the smelting
● India is endowed with huge mineral resources,
of iron ore, and batteries.
including fuel, metallic and non-metallic minerals,
• Though Manganese is associated with all geological
and minor minerals. The mining sector is an formations, it is mostly found in the Dharwar
important segment of the Indian economy. system.
● A large number of small operational mines • Odisha is the leading producer, with major deposits
characterizes the Indian mining industry. Most of the in Bonai, Kendujhar, Sundergarh, Gangpur, Koraput,
mines in India are in Madhya Pradesh, followed by Kalahandi, and Bolangir.
Gujarat, Karnataka, Odisha, Chhattisgarh, Andhra
Pradesh, Rajasthan, Tamil Nadu, Maharashtra,
Jharkhand, and Telangana. Mining in Constitution
● Mining contributes about 2.5% of the Indian GDP Under Schedule 7
and employs millions of people. • List-I-Central List- Item 54-Central government owns
Illegal Mining in India minerals within the exclusive economic zone of India
About (EEZ)
• It is the illegal extraction of minerals, ores, and • List-II-State List- Item 23- State government own the
other valuable resources without the authorities' minerals located within their boundaries.
necessary permits, licenses, or approvals. Such
extraction also involves the violation of • Heavy metal pollution: The clear disregard for the
environmental, labour and other safety safety of illegal mining leads to heavy metal
standards. pollutant contamination. Chemicals like mercury
• Illegal mining is primarily of two types. and cyanide pose serious risks to public health and
nearby communities.
• Human Rights Violations: Illegal mining has
resulted in the loss of life, including police officers.
It is also associated with forced labour, child labour,
and the exploitation of large populations.
Measures Against Illegal Mining
• Legal Measures:
o Section 23C of the Mines and Minerals
(Development and Regulation) Act 1957
empowers the State Governments to frame
o Mining without any approvals, whether the
rules to prevent illegal mining.
major minerals are notified by the central
o The State Government submits quarterly
government or minor minerals are notified by
returns to the Indian Bureau of Mines on the
state governments.
prevention of illegal mining. These returns
o Mining is above the permissible limit set by the
contain details such as the number of cases
lease approved by the government.
15
Impact: detected and actions taken, etc.

• Loss to the state exchequer: Several states in India • Surveillance:
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have lost crores of rupees as revenue.

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o The Indian Bureau of Mines (IBM) has set up specified by the respective State Electricity
two laboratories to monitor mining activities Regulatory Commission (SERC) — of the day shall be
using GIS and remote sensing software. at least 20 per cent lower than the normal tariff.
o Mineral Conservation and Development • On the other hand, tariffs during peak hours will be
Rules 2017 mandates the mineral concession at least 20 per cent higher than the normal tariff for
holders to submit drone images & satellite commercial and industrial consumers, and at least
imageries to the Indian Bureau of Mines. It 10 per higher for other consumers.
allows IBM to monitor the mining activities in • ToD tariff would be applicable for Commercial and
the country remotely without much human Industrial consumers having Maximum demand of
intervention. 10 KW and above, from 1st April, 2024 and for all
o Mining Surveillance System (MSS) is a other consumers except agricultural consumers,
satellite-based monitoring system that aims to latest from 1st April, 2025.
establish a regime of responsive mineral o Time of Day tariff shall be made effective
administration by curbing instances of illegal immediately after installation of smart meters,
mining activity through automatic remote for the consumers with smart meters.
sensing detection technology. Potential benefits of ToD power tariffs
ToD tariff system is described as a “win-win” proposition
for consumers as well as the country’s power system.
Differential time-based electricity tariffs
For Consumer
News Excerpt: • The TOD tariffs, which are separate tariffs for peak
The Union Power Ministry has amended the Electricity hours, solar hours, and normal hours, send price
(Rights of Consumers) Rules, 2020, and the changes signals to consumers to manage their load
included the introduction of time-of-day (ToD) tariff according to the tariff.
provisions. • With awareness and effective utilization of the ToD
Changes in Electricity Rules, 2020
tariff mechanism, consumers can reduce their
● The current amendment to the Rules is a
electricity bills. Since solar power is cheaper, the
continuation of the measures taken by the
tariff during solar hours will be less, which will
government to empower power consumers, to
benefit the consumer.
ensure a 24/7 reliable electricity supply at affordable
• The move is expected to provide some flexibility to
cost, and to maintain a conducive ecosystem for
consumers to plan and optimize their electricity
investment in the power sector.
consumption so that the major share of their power
● The changes are:
use falls in the discount window.
o Introduction of Time of Day (ToD) Tariff and
• The objective of the move is to offer a nudge to
o Rationalization of smart metering provisions.
consumers to optimize their electricity
About Time-of-Day (ToD) tariff
consumption, especially during peak hours. This is
• The time of Day (TOD) tariff is recognized globally
also a major demand side management (DSM) tool
across electricity industries as an important
that is expected to result in better grid integration
Demand-Side Management (DSM) measure. It is
of the increasing share of renewable power in India.
used to incentivize consumers to shift a portion of
For Govt. and service providers
their loads from peak times to off-peak times,
• During the non-solar hours, mostly thermal, hydel
thereby improving the system load factor by
and gas-based power is consumed, which is
reducing the demand on the system during peak
relatively costlier than solar power. Hence, tariffs
periods.
during non-solar hours will be relatively higher,
• Broadly, time-based power tariff structures can be
reflecting the higher cost of electricity.
static — predetermined tariffs based on time blocks
• As for peak power consumption hours, the
— or dynamic — determined on a real-time basis in
government hopes to discourage consumers from
accordance with the actual demand conditions.
placing excessive loads on the grid with higher-
There are some other variants as well, but those are
than-normal tariffs.
16
combinations of static and dynamic pricing models.

• If the load on the grid during peak consumption
• Under the ToD tariff system, the power tariff during
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hours goes down, the requirement for additional

“solar hours” — the duration of eight hours a day as
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investments in grid infrastructure for ● To maintain a level playing field: These measures
maintenance and upgradation also declines over can help in ensuring a level playing field for
the medium to long term. domestic producers, ensuring that they can
• The government also expects the ToD tariff compete fairly with foreign competitors.
structure to lead to better integration of ● To protect the domestic industries: Imposing anti-
renewable energy sources with the country’s dumping duty protects the country’s domestic
electricity grid, which will hopefully expedite India’s businesses against the unfair competition created
energy transition. by foreign exporters by reducing the export prices
• The ToD tariff will improve the management of against their fair price.
renewable generation fluctuations, incentivize ● Revenue for the government: Imposing these
demand increase during periods of high RE duties can generate revenue for the government
generation hours, and thereby increase grid through the collection of duties on imported
integration of larger quantities of renewable power. products. This revenue can be used for various
public purposes.
India imposes anti-dumping duty on ● Broader trade policy: Imposing anti-dumping duty
can be part of a broader strategic trade policy aimed
Chinese steel
at safeguarding essential industries and reducing
News Excerpt:
reliance on imports for critical materials.
India imposed an anti-dumping duty on some Chinese
steel for five years. Other types of duty
Details on the news: ● Basic Customs Duty: This duty is imposed on the
● The move comes amid a 62% rise in steel imports value of goods at a specified rate as it is fixed on an
from China to India between April and July 2023, ad-valorem basis. After being amended time and
compared to the same timeframe last year. China again, it is currently regulated by the Customs Tariff
had to beat South Korea to become the biggest Act of 1975. The Central Government, however,
steel exporter to India. holds the right to exempt specific goods from this
● The evidence of export price indicates that tax.
● Countervailing duty: It is also known as duties, is a
the Chinese exporters are exporting the goods to
trade import duty imposed under World Trade
third countries at significantly dumped and injurious
Organization rules to neutralize the negative effects
prices.
of subsidies
China is the largest producer of steel in the world, ● Protective Duty: This duty is imposed in order to
accounting for almost half of the world's total output. shield the domestic industry against the imports at
Other major steel-producing countries include Japan, rates that are recommended by the Tariff
India, Russia, South Korea, and the United States. Commissioner.
● Safeguard Duty: As the name suggests, this duty
The top net importers of finished steel equivalent are
serves as a means of safeguarding the rise in
the US, Russia, the UK, Canada, France, etc.
exports. Sometimes, if the government feels that a
rise in exports can damage the existing domestic
● Such duty on steel wheels was imposed in 2018, and industry, it may levy this duty.
the ministry has recommended a continued Demerits of imposing Anti-Dumping duties:
imposition for another five years. ● Trade barrier: There is a risk of using anti-dumping
● As per the government, there is healthy duty as a trade barrier rather than a legitimate tool
competition in the Indian market and for addressing unfair trade practices.
continuation of the duties would not deprive the ● Inflated price: This can lead to higher prices for
domestic industry of any requirements. particular goods in the domestic market.
● Retaliatory measures: This can lead to retaliatory
What is an Anti-dumping duty? measures by other countries, affecting the export
An anti-dumping duty is a protectionist tariff that a opportunities for domestic industries in global
17
domestic government imposes on foreign imports that markets.

it believes are priced below fair market value. ● Disrupt global supply chains: The anti-dumping
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Merits of imposing Anti-dumping duties: duties can disrupt global supply chains, potentially
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leading to inefficiencies in production and • Discretionary powers may be granted to the
distribution. patent controller to determine who can file pre-
grant oppositions, contrary to previous judicial
The Perils of Patent Amendments
decisions that allowed both organizations and
News Excerpt: individuals to do so. These changes could weaken
The Union government released the Draft Patents the safeguards in India's patent system, which is
(Amendment) Rules, 2023, which proposes several ironic considering that earlier in the year, the Indian
significant changes, including introducing fees for pre- Patent Office rejected a US pharmaceutical giant's
grant opposition filings and centralizing authority with application to extend a monopoly on a key
the patent controller. tuberculosis drug.
Reason for Impact: • Extending the time frame for working statement
• India is the leading generic drug producer in the submissions and eliminating the need for
world. India fulfils more than 60 per cent of the manufacturing details and pricing information
global demand for vaccines. India plays a critical may obstruct the procedure for obtaining
role in vaccines by meeting 40-70% of the World compulsory licenses, potentially hindering access to
Health Organization’s demand for DPT and BCG essential medicines at affordable rates.
vaccines and 90% of the global market for Need to stand firm:
measles vaccines. • India should actively address challenges related to
• However, India has long struggled to access good patents and intellectual property rights and
quality and affordable medicines. Soaring costs of strongly oppose any efforts to restrict the waiver
healthcare, including medicines, push 3% of Indians of patents for drugs and vaccines. India is already
into poverty every year. compliant with the World Trade Organization's
• The Economic Survey 2023 projects the share of Trade-Related Aspects of Intellectual Property
out-of-pocket expenditure (OOPE) in healthcare Rights (TRIPS) agreement and has aligned its Patent
at 48.2%, significantly higher than the global Act accordingly.
average of 18 per cent. • Access to affordable medicines is vital for vulnerable
Harmful Amendments and its effects: communities globally, and India, often considered
• Proposed amendments include introducing fees the 'pharmacy of the world', plays a crucial role in
for pre-grant opposition filings and centralizing ensuring this accessibility. With India's growing
authority with the patent controller. These changes population, the government must explore ways to
deviate from not charging fees for pre-grant keep high-quality medications affordable and
opposition filings and allowing anyone to provide accessible to impoverished and marginalized
crucial information to the patent office under populations.
Section 25(1) of the Indian Patents Act, 1970. • The Indian Patent Office is currently overwhelmed
• Restricting who can file pre-grant oppositions, with patent applications, straining its capacity to
especially patient groups, could impede efforts to process them effectively. Proposed amendments
prevent the issuance of undeserved patents for aim to simplify the patent application and granting
medicines. This is concerning, as it might affect the process. While these amendments may ease the
timely availability of cost-effective generic burden on the patent office, there are concerns that
medications. they disproportionately favour global
• The working statement submission interval may be pharmaceutical giants; hence, a balance should be
extended from annually to once every three maintained.
financial years, and the need to disclose whether
patented products are made in India or
imported, along with their pricing details, could be Reputation of India’s Pharma Industry
eliminated. These proposals could have a News Excerpt:
detrimental effect on India's healthcare system, A few countries have accused ‘Made in India’ medicines
limiting the ability of patient groups to initiate pre- of causing deaths, blindness and severe injury to their
18
grant oppositions, which are crucial for preventing citizens. Also, Indian doctors protested against a new
undeserved patents on medicines. rule introduced by the National Medical Commission
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(NMC) mandating that all doctors write prescriptions ensure compliance with stringent standards for both
with only the generic names of drugs, not brand names. domestic and export markets.
Concern Regarding Quality of Made in India • Education and Engagement: Communicate
Medicine: transparently with doctors and the public regarding
• Quality Control and Testing: The instances of generic medicines' benefits and quality assurances,
adulteration leading to fatalities in India and other fostering trust in domestically produced drugs.
countries suggest a systemic failure in quality • Regulatory Reforms: Revise legislation to establish
control measures. The need for rigorous a centralized regulator with specialized skills and
inspections, adequate testing equipment, and resources to standardize and enforce drug quality
qualified personnel within manufacturing nationwide.
facilities is crucial. While mandating testing for • Global Reputation Management: Prioritize
exported cough syrups is a step, it's insufficient. rebuilding trust by actively addressing quality
o The focus should also be on ensuring domestic concerns and complying with international
products meet the same standards to safeguard standards to maintain India's status as a reliable
Indian patients. pharmaceutical supplier.
• Doctor Opposition to Generic Prescriptions: The
lack of faith among doctors in prescribing only
generic names stems from concerns about INFRASTRUCTURE
therapeutic equivalence and quality variations
among generics. Multi-Modal Logistics Parks (MMLPs)
o This distrust affects patient access to
News Excerpt:
competitively priced medicines. Instead of
The government of India is planning to bid out 6-7 multi-
addressing these concerns, the government
modal logistics parks in the next financial year (2023-
paused the new rule, missing an opportunity to
2024).
educate and engage doctors and the public on Understanding MMLPs:
generics' benefits and quality assurances. ● MMLPs are based on the Hub & Spoke model. It
• Regulatory Framework and Legislation: The tends to integrate multiple modes of freight
Drugs, Medical Devices, and Cosmetics Bill of
transport through highways, railways & inland
2023 seems to overlook fundamental issues
waterways.
highlighted by expert committees.
o The absence of a centralized regulator and a
proposal for an independent, skilled regulatory
setup remain unaddressed.
o Harmonizing regulations across states and
empowering a competent central regulator
could enhance oversight and consistency in
drug quality.
• Reputation and Global Impact: Ineffective
regulation impacts public health and damages the
reputation of India's pharmaceutical industry
globally.
o This has led to repercussions, such as the US
contemplating onshoring pharmaceutical
● They are envisaged to be developed as state-of-the-
manufacturing and African nations aiming to
art large-scale warehousing facilities for different
reduce dependence on Indian imports.
types of commodities.
o This threatens India's position as the "pharmacy
● Focus areas under the MMLPs are:
to the developing world."
o Technology-driven-state-of-the-art freight
Addressing the challenges:
management system.
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• Enhanced Oversight: Invest in robust inspection

o Value-added services range from packaging to
processes, quality control measures, and training to
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labelling.
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o Mechanized material handling and related value- o Include the infrastructure schemes of various
added services Ministries and State Governments.
● Features of MMLPs in India: o It will leverage technology extensively, including
o MMLP sites in India are strategically placed and spatial planning tools with ISRO imagery.
act as a focal point of logistics in the region. o To improve connectivity and make Indian
o It acts as an example of cooperative federalism businesses more competitive, economic zones
as implementing agencies are Special Purpose like textile clusters, pharmaceutical clusters,
Vehicles formed by central and state agencies. defence corridors, electronic parks, industrial
o Developed under Public-Private-Partnership corridors, fishing clusters, and agri zones should
(PPP) based on a Design, Build, Finance, Operate, be created.
and Transfer (DBFOT) model. • Gati-Shakti, as a digital platform, will bring 16
● Advantages of MMLPs: Ministries, including Railways and Roads,
o Improved efficiency of the logistics sector, together for integrated planning and coordinated
lowering overall freight costs and warehousing implementation of infrastructure connectivity
costs and improving the tracking of projects.
consignments, etc.
Rail freight movement lowers the CO2
o
CAPITAL MARKET
emissions on a per tonne per km basis. Hence,
MMLPs can aid in India’s objective of a 45
percent reduction in carbon intensity by 2030. Central Counterparties
o Increased freight movement on higher-sized News Excerpt: The European Securities and Markets
trucks and rail will lead to a 20 percent Authority (ESMA), the market regulator of the EU
reduction in freight vehicles catering to the financial markets, has derecognized six Indian Central
demands. Counterparties (CCPs) in accordance with the European
Key Schemes for MMLP Development Market Infrastructure Regulation (EMIR).
Bharat Mala Pariyojana (BMP) Understanding CCPs:
• BMP is an umbrella program for the highways under ● These financial institutions act as an intermediary
the aegis of the Ministry of Road Transport and between buyers and sellers in various derivatives and
Highways. equities markets.
• The focus of the scheme is on: ● They help in facilitating the clearing and
o Improvement of efficiency of present freight settlement process in financial markets.
corridors by elimination of choke points. ● They increase the efficiency and stability of
o Improved connectivity for the North East by financial markets by reducing the risk associated
leveraging synergies with Inland Waterways. with counterparty, operational, settlement, market,
o Use of technology & scientific planning, satellite legal, and default issues.
mapping for project preparation, and asset ● They collect money from each party involved in the
monitoring. trade and, in return, guarantee the terms of the trade.
o Seamless connectivity with neighbouring ● They perform two functions:
countries with Integrated Check Posts (ICPs) ● Clearing:
o Connect 550 districts in the country through o Validate the details of the trade
national highway linkages. o Ensure both parties have sufficient funds to
PM Gati Shakti National Master Plan (PMGS-NMP) complete the transactions.
• It provides multimodal connectivity infrastructure to ● Settlement:
various economic zones. o Transfer of ownership of the asset- from the
• There are seven engines under the scheme for seller to the buyer
economic transformation, seamless multimodal ● CCPs dealing with money market instruments and
connectivity, and logistics efficiency namely: foreign exchange derivatives are regulated by the
Railways, Roads, Ports, Waterways, Airports, Reserve Bank of India (RBI) under the Payment
20
Mass Transport, and Logistics Infrastructure. and Settlement Systems Act, 2007. While those
• The vision of the scheme:
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dealing with securities and commodity derivatives
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are regulated by the Securities and Exchange Board ▪ If not, then they will have to unwind
of India (SEBI). positions with the central counterparties
About Derecognition Decision over the next 6 to 9 months.
Dabba Trading
RELATED: RBI AND BANK OF ENGLAND SIGN MOU ON CCIL
COOPERATION News Excerpt:
● In 2022, the European Securities and Markets The National Stock Exchange (NSE) has sent notices to
Authority (ESMA) withdrew recognition of some entities involved in Dabba trading.
Indian clearing entities, including CCIL. Understanding Dabba Trading:
● This move led to a disagreement because the RBI ● It is a form of informal trading that occurs outside
wanted to avoid foreign supervision of these entities, the stock exchanges' purview.
stating that they follow strong risk management ● Under this transaction, however, traders place a bet
practices.
on stock price movements without incurring a real
● In response, RBI and BoE have now signed this MoU,
allowing BoE to trust and rely on RBI's regulatory
transaction and taking physical ownership of a
activities. particular stock.
● The agreement also supports CCIL's application to be ● Such transactions result in gambling centered around
recognized as a third-country clearing entity by the stock price movements, which are illegal and
Bank of England. unregulated.
● This recognition is necessary for UK-based banks like ● It is recognized as an offence under Section 23(1) of
Barclays and Standard Chartered to continue the Securities Contracts (Regulation) Act (SCRA),
providing clearing and settlement services in India.
1956, and upon conviction, can invite imprisonment
for a term extending up to 10 years or a fine up to
• ESMA de-recognized six CCPs, including The ₹25 crores, or both.
Clearing Corporation of India (CCIL), Indian Clearing Issues Associated with Dabba Trading:
Corporation Ltd (ICCL), NSE Clearing Ltd (NSCCL), • All dabba transactions are dealt with in cash and
Multi Commodity Exchange Clearing (MCXCCL), outside the purview of recognized software.
India International Clearing Corporation (IFSC) Ltd Thus, they escape taxation, resulting in government
(IICC), and NSE IFSC Clearing Corporation Ltd revenue loss.
(NICCL). • It creates risks for the investor as it is outside the
• These are derecognized due to their failure to meet regulatory purview. Investors lack formal provisions
all EMIR requirements. for investor protection, dispute resolution
• There are no cooperation arrangements between mechanisms, and grievance redressal mechanisms
ESMA and Indian regulators – the RBI, the SEBI, available within an exchange.
and the International Financial Services Centres
Authority (IFSCA).
• India is opposing ESMA supervision as these
domestic CCPs operate in India and not in the EU
and are, hence, not subject to the ESMA regulations.
• Further, India opined that these six CCPs have robust
risk management and that a foreign regulator
should not inspect them.
• Impact of the decision
o These CCPs will no longer be able to provide
services to clearing members and trading
venues established in the EU.
o It will impact European banks functioning in
India for two reasons: • There is a high chance that the broker will default
▪ They will need as much as 50 times higher on paying the investor or that the entity will become
21
capital to carry out trades involving the insolvent or bankrupt.

Indian central counterparties. • It could lead to the growth of black money besides
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perpetuating a parallel economy, leading to risks

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About Finfluencers
● Finfluencers are people with public social media
platforms who offer advice and share personal
experiences about money and investing in
stocks.
● Their videos cover budgeting, investing, property
buying, cryptocurrency advice and financial trend
tracking.
Issues related to it
• Finfluencers have drawn the ire of the investors’
community, given that they provide unsolicited
‘stock’ tips on various social media platforms
without being registered investment advisers.
entailing money laundering and criminal • It is unclear if these influencers have any educational
activities. or professional qualifications to offer such financial
advice and if there is any kind of monetary
transaction between them and the entity they are
One-hour trade settlement promoting.
News Excerpt: • Some of them have lakhs of followers, and millions
SEBI said it will bring in a one-hour settlement of of people across the country closely follow their
trades. investment advice.
Trade settlement o They post videos in English and Hindi and a mix
● Settlement is a two-way process that involves the of English and Hindi. This has raised concern
transfer of funds and securities on the settlement that scamsters are using this method to
date. A trade settlement is said to be complete once manipulate share prices.
the securities purchased by a listed company are • Numerous unregistered finfluencers are
delivered to the buyer and the seller gets the money. manipulating the market, offering qualified advice
● The current cycle of T+1 means trade-related to the gullible public, and earning huge money by
settlements happen within a day or 24 hours of way of commission from these platforms and the
the actual transactions. market by transacting on those stocks they talked
● The migration to the T+1 cycle came into effect in up or talked down.
January 2023. • There is the issue of unregistered investment
● India became the second country in the world advisors, who pose greater risks to unsuspecting
after China to start the T+1 settlement cycle in top- investors. More importantly, we see examples of
listed securities, bringing operational efficiency, misuse of their SEBI registrations by even some
faster fund remittances, share delivery, and ease for registered advisors.
stock market participants. Steps taken by SEBI
● The technology for implementing one-hour trade • The Board has decided to tighten the disclosure
settlement exists, but the system needs additional norms for large foreign portfolio investors.
technology development for instantaneous trade • SEBI has been cautioning the public against falling
settlement, which may take more time. Thus, SEBI into their advisory traps on one hand and also
expects the instantaneous trade settlement to be hinting at bringing out regulations to contain their
launched by the end of 2024. free-run.
• Earlier, SEBI had clamped down on some WhatsApp
Finfluencers under SEBI’s scrutiny groups and Telegram channels, which were used to
News Excerpt: leak key market-moving data.
The market watchdog SEBI will formulate rules and • SEBI has been planning to direct brokers and mutual
guidelines to regulate the unregistered financial funds to limit the use of financial influencers to curb
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influencers or “finfluencers” who offer investment the spread of financial advice via social media
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advisors to the public.
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advertising and marketing campaigns through such • Disclose their • Provide real-time
influencers. holdings on a transparency into
• In its guidelines, SEBI will require social media quarterly basis. their holdings.
influencers to register and follow most of the other Category Passive Investing Active Investing
norms applicable to registered financial advisors. Process Buy and hold Frequent buying and
• SEBI has been constantly enhancing its technology securities for longer selling of securities
and surveillance prowess. term
Objective Mirror significant Investors try to
stock indexes to be outperform the market
Index Funds at par with the and reap more and more
News Excerpt: market profits
The Motilal Oswal Asset Management Company Tenure Long-term Both short-term and
investment goals long-term investment
(MOAMC) survey revealed that 87% of the respondents
objectives
prefer Index funds, while 42% opt for Exchange Traded
Reasons for popularity
Funds (ETFs).
About Index Funds: • Lower expense Ratios: The expense ratio
● Index funds are a type of passively managed represents the portion of the fund's assets that are
mutual fund that aims to replicate the performance used to cover the costs associated with managing
of specific market indexes, such as NIFTY 50 or and operating the fund. A lower expense ratio
SENSEX. They are a tool for passive investing. means that a larger portion of the investment is
● Passive investing broadly refers to a buy-and-hold retained rather than being used to cover fund
portfolio strategy for long-term investment expenses.
horizons, with minimal market trading. Index • Consistent returns: The returns obtained from
investing is perhaps the most common form of index funds are generally consistent in nature
passive investing, whereby investors seek to compared to other passive investing tools such as
replicate and hold a broad market index or indices. ETFs and mutual funds, thus assuring a security of
● Other types of Passive investing include ETFs and investment.
Mutual funds. Some popular index funds in India • Changes in tax laws regarding fixed-income
are HDFC index funds, Nippon India Index, ICICI, mutual funds have influenced investors' decisions
TATA Nifty 50, SBI Nifty, etc. to invest in index funds.
Index funds ETFs • Transparent: Index funds show the volatility of the
• Passively managed • Passively managed market right away; hence, they appear to be a safer
mutual fund. investment fund. alternative to investing.
Benefits provided by Index funds
• Managed by fund • Traded on stock
managers. exchanges like • Index funds are often recommended for long-term
individual stocks. risk-averse investors because of their key
• Aims to replicate the
advantages, such as consistency and lower costs.
performance of • Traded throughout
Over longer periods, the stock market tends to
specific market the day like stocks.
appreciate, and index funds provide good returns.
indexes. • No minimum
• They reduce the risk of picking individual stocks, as
• Traded at the end of investment
index funds offer diversification over a wide range
the trading day. requirements.
of stocks and sectors.
• May have minimum • Offer a wider variety
• They don’t require constant monitoring, research,
investment of investment
and tactical decision-making from investors.
requirements. options, including
• Available for a range specialized sectors,
of asset classes – commodities, and
stocks, bonds and international
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even commodities. markets.

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Corporate Debt Market Development course of the market. During market dislocation,
investment-grade corporate debt securities are to
Fund
be purchased by CDMDF.
News Excerpt: • CDMDF's acquisition authority extends to listed
The Finance Minister inaugurated the Corporate Debt
corporate debt securities only, with a maturity of up
Market Development Fund (CDMDF) and initiated AMC
to 5 years.
Repo Clearing Limited (ARCL).
• Transactions at CDMDF should be conducted at fair
Backstop facility: prices and not at the distress prices.
It is a financial mechanism to provide a safety net
Need of the fund:
against market dislocation and other crises. o Liquidity: During the pandemic, secondary market liquidity
It instills confidence in the market by assuring in the corporate debt market declined significantly, making
investors. For example, CDMDF provides a backstop it difficult to buy and sell securities.
facility for investment-grade corporate debt securities. o Safety net: For the corporate debt market to grow,
If crises occur, CDMDF can step in and make purchases. investors and issuers must be assured of the safety of their
investments. CDMDF will provide this safety assurance to
About: the stakeholders.
● Union Budget 2021-22 announced the creation of a o Growth of CBM: The fund is needed for continued
permanent institutional framework to enhance unrestricted growth of the corporate bond market.
o Trust: The fund will build trust among the corporate bond
secondary market liquidity in the Corporate Bond
market stakeholders, thereby creating an environment
Market (CBM).
conducive to long-term investing.
● Earlier this year, SEBI approved the CDMDF o Risk mitigation: Funds will act as a cushion in market
framework. dislocations by preventing sudden liquidity crunches and
● The corporate bond market has grown steadily in shortages.
the last decade, with the outstanding stock of o Policy goals: It aligns with the government's commitment
corporate bonds having increased four-fold from Rs to boost the liquidity of the secondary market and foster
12 trillion to Rs 41 trillion in 2022. It includes REITs, economic growth.
InvIT’s and Municipal debt securities. o International recognition: It will enhance India's image as
an attractive financial investment destination and attract
Corporate Debt Market Development Fund
investors.
(CDMDF):
• CDMDF is an alternative investment fund (AIF) Recent initiatives regarding CDMDF:
designed to meet the requirements of the corporate • Guarantee Scheme for Corporate Debt (GSCD) to
bond market. It acts as a safeguard mechanism for provide guarantee cover against debt to be raised
securities and instills confidence in investors in the by the Corporate Debt Market Development Fund
market. (CDMDF).
• It has a total backstop facility of Rs 33,000 crore. • Prevalent challenges in the Corporate Bond
Government contribution stands at Rs 30,000 crore Market: According to the Bank for International
while the rest of Rs 3000 crore will be provided by Settlements –
Asset Management Companies. • Rating profile: The corporate debt market is largely
• It has twin objectives – CDMDF will acquire debt controlled by companies with strong credit ratings.
securities and enhance the liquidity of the secondary Hence, CBM caters to these corporations.
market. • Mode of Issuance: Privately issued bonds hold a
• National Credit Guarantee Trust Company (NCGTC) significant share as compared to public offerings.
will be the fund's guarantor. Public offerings have transparency and offer better
SEBI’s guidelines for CDMDF price discovery.
• CDMDF's tenure will be 15 years (it can be • Investor profile: The majority of the investors are
extended), and it will be initiated as a closed-ended domestic institutions such as insurance companies,
scheme. banks, etc. The Participation of individual retail
• CDMDF to focus on low-duration government investors is limited.
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securities, treasury bills, and corporate bonds with a

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maturity not exceeding 7 days during the normal
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• Specialized Bonds: India has been unable to attract About Sovereign Green Bonds
the global pool of ESG (environmental, social, • Green bonds are used by a variety of organizations,
governance) funds. including governments and businesses, to finance
• Price transparency: There is a lack of reliable and environmentally friendly projects.
up-to-date information about financial markets. • These bonds are a subclass of green bonds that
Also, a benchmark to figure out the value of bonds fund programmes like the development of
across different investors is not set. renewable energy sources, adaptation to climate
change, and environmental preservation.
• They assist governments with revenue
Sovereign Green Bonds (SGB)
generation while promoting environmentally
News Excerpt: friendly development and addressing climate
The PFRDA Chairman stated that the regulator supports change.
pension funds investing in sovereign green bonds • The ability of sovereign green bonds to provide both
(SGBs). financial gains and positive environmental impacts
About:
attracts investors.
● In 2008, the World Bank issued the first-ever
• These bonds strengthen transparency through
labelled green bond to support the financing of
regular third-party verification and project-
projects addressing climate change.
specific reporting.
● The International Energy Agency's (IEA) 2021
• Sovereign Green Bonds take advantage of the
World Energy Outlook suggests that 70% of the
growing market for environmentally friendly
$4 trillion needed for net zero must go to emerging
investments to support global initiatives for a
economies. Sovereign issuance can attract crucial
greener and more sustainable future.
capital inflow.
Significance
• The Union Budget 2022-23 announced the issue of
• "Sovereign Green Bonds serve many purposes that
Sovereign Green Bonds in keeping with the
support sustainable development. They encourage
ambition to significantly reduce the economy's low-carbon economies and improve climate
carbon intensity. resilience by providing funding for activities
• India's updated NDC targets include achieving net- addressing the effects of climate change, such as
zero emissions by 2070, reducing emission critical infrastructure and renewable energy."
intensity by 45% by 2030, reaching 50% • These bonds also help preserve the environment
cumulative electric power capacity, and adding by funding habitat restoration and sustainable
2.5 to 3 billion tons of CO2 equivalent through land use, protecting ecosystems and
expanded forest cover by 2030. biodiversity.
• The 'Panchamrit' plan, announced at COP26, • They demonstrate governmental commitment to
strengthens India's leadership in reducing global promoting global sustainability and developing
warming by aiming for a temperature increase of global collaboration because they are in line with
less than 1.5°C. the Paris Agreement and the United Nations
• Green bond global cumulative issuance reached $4 Sustainable Development Goals.
trillion as of February 2023. • Sovereign Green Bonds increase the amount of
green financing available and motivate
Panchamrit Plan
governments to prioritize sustainability by
During the COP26 event, the Prime Minister introduced
attracting environmentally conscious investors.
Panchamrit, a collection of five commitments:
• They encourage the expansion of the green
• Reach 500GW non-fossil energy capacity by 2030
finance market, fostering innovative thinking
• 50 per cent of its energy requirements from renewable
and entrepreneurial spirit in the clean energy and
energy by 2030
technology industries.
• Reduction of total projected carbon emissions by one
• The bonds foster accountability and
billion tonnes from now to 2030
• Reduction of the carbon intensity of the economy by transparency, increase public knowledge of
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45 per cent by 2030, over 2005 levels environmental issues, and encourage a more
• Achieving the target of net zero emissions by 2070 comprehensive concept of sustainable
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development.
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Challenges Why does the EU need a green bond standard?
• Ensure truthful and open projects and stay away • The global and
from misleading claims, especially in the face of EU green bond Europe is the world's biggest
complex regulations. markets grew issuer of green bonds,
• Establishing uniform criteria for assessing by an average accounting for more than
environmental effects while relying on validated of 50% per year half of the global volume in
techniques. between 2015 2021, though issuance is still
• Getting reliable information is essential for and 2020, but only 3%- 3.5% of the overall
making wise decisions even with limited they bond market.
information. represented
• Maintaining a balance between practicality and only 3 to 3.5% of overall bond issuance in 2020.
thoroughness, avoiding exorbitant time and More rapid growth of a high-quality green bond
financial commitment. market is needed to meet the targets in the Paris
• Resolving market fragmentation for "green" Agreement and the European Green Deal.
investments and promoting the flow of funding to • However, there is no uniform green bond standard,
sustainable projects. and this is an obstacle to market development.
• Decreasing the "green premium" will draw in more • The European green bond standard would allow
investors while addressing the high costs of better regulation of the green bond market,
environmentally friendly activities. improve supervision, make it transparent, and
prevent firms from presenting themselves as more
Surety Bonds environmentally friendly than they really are, a
practice known as greenwashing.
News Excerpt:
Benefits:
Surety bonds are key to infrastructure growth.
● Demonstrating the issuer's commitment to
About Surety Bond:
sustainability and transparency enhances its
It is a legally binding agreement between the obligee,
reputation and credibility, resulting in positive
principal, and surety parties.
media attention and stakeholder engagement.
● It guarantees that the principal will meet the
● Attracts a wider and more diverse pool of investors
commitments indicated in a contract. If the principal
looking for ESG criteria in their portfolios, lowering
fails to meet these obligations, the surety
compensates the obligee, reducing their financial
What is a bond?
risk.
● The Insurance Regulatory and Development A bond is a debt instrument in which an investor loans
Authority of India (IRDAI) has issued guidelines money to an entity (typically corporate or
for surety bonds, which are designed to ensure that government) that borrows the funds for a defined
they are issued fairly and transparently. period of time at a variable or fixed interest rate.
● These bonds serve as a vital risk management tool Companies, municipalities, states, and sovereign
as well as a contract enforcement mechanism. governments use bonds to raise money to finance
various projects and activities. Owners of bonds are
debt holders, or creditors, of the issuer.
World's First Green Bond Standards
News Excerpt:
the cost of capital and increasing the availability
The European Union is establishing the first-in-the-world of funding.
European green bond standard to prevent companies ● Contribute to the achievement of climate and
from presenting themselves as more environmentally environmental goals by supporting the
friendly. development and deployment of renewable
About Green Bonds: energy sources.
A green bond is a fixed-income instrument designed to
support climate-related or environmental projects.
26
Green bonds finance or re-finance investments, projects,

expenditures, or assets that help address climate and
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environmental issues.
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Demat Debit and Pledge Instruction due to the strong demand for their financial
products.
News Excerpt:
• Insurance products often necessitate an additional
SEBI has introduced a new document called Demat
10 years of bond duration to align with asset-liability
Debit and Pledge Instruction (DDPI) to replace Power
management gaps.
of Attorney (PoA) to pledge and repledging stocks for
• A 50-year bond will likely lead to a flat yield curve,
margin purposes.
extending the maturity of the government's debt
About DDPI:
while keeping its overall interest costs in check. It will
● The DDPI serves the same purpose as PoA and
also extend the weighted average maturity of
mitigates its misuse.
outstanding bonds.
● Clients can use DDPI to authorise the stock broker
About Bond Yield:
and depository participant to access their
• Bond yield is the return an investor realizes on an
beneficiary ownership account (BOA) only to meet
investment in a bond. A bond can be purchased for
pay-in Obligations for the settlement of trades
more than its face value, at a premium, or less than
executed by them.
its face value, at a discount. Price and yield are
● The use of DDPI will be limited only for two
inversely related, and as the price of a bond goes
purposes:
up, its yield goes down.
o For the transfer of securities held in the
Relation between interest rates and bond price &
beneficial owner account of the client towards
bond yield:
stock exchange-related deliveries or settlement
• Interest rates: These rates are set by RBI and
obligations arising out of trades executed by
influence the overall cost of borrowing and returns
such a client.
on investments. Higher interest rates generally
o Pledging or re-pledging securities in favour of
attract foreign investors seeking better returns,
the trading member or clearing member to
while lower rates may deter them.
meet the client's margin requirements.
• Bond Prices: Bond prices have an inverse
● The DDPI needs to be executed only if the client
correlation to interest rate movements; that is, if
provides his/her explicit consent, including internet-
market rates increase after a bond issue, the price of
based trading.
these bonds declines, and vice-versa.
● It has been done in a bid to curb the misuse of PoA
• Bond Yields: They reflect the fixed interest
given by clients to stock brokers.
payments as a percentage of the bond's current
price. Rising interest rates lead to higher bond
India’s 50-year bond yields, making bonds more attractive to foreign
News Excerpt: investors seeking better returns.
India debuted and fully sold its first-ever 50-year bond Types of Government Bonds in India:
at a cut-off yield of 7.46%. • Government Securities (G-Secs Bonds) are long-
About the news: term debt instruments issued by the Government of
• The government sold 100 billion rupees worth of India through auctions conducted by the Reserve
the 2073 bond to fulfil a long-standing demand by Bank of India (RBI).
life insurance companies and pension funds, notably • State Development Loans (SDLs): These are issued
the Life Insurance Corporation of India (LIC). by State Governments, and RBI coordinates the
• The inaugural auction of India's 50-year bond saw actual process of selling these securities.
robust demand, signalling a growing interest among • Treasury bills (T-Bills): Short-term debt
insurance companies and pension funds in ultra- instruments issued by the Government of India and
long-term securities. presently issued in three tenors, namely, 91 days,
• The government's issuance of long-term bonds can 182 days, and 364 days.
extend the tenure of debt sales and manage • Inflation-Indexed Bonds (IIBs): The principal value
interest costs effectively. of these bonds is adjusted for inflation, and they
Why demand for the 50-year bonds? offer a fixed interest rate on top of the inflation-
27
• Over the past few years, insurers and pension funds adjusted principal.
have increased their purchases of government debt
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• Sovereign Gold Bonds (SGBs): Dated government o Investors buy bonds, and if a major disaster
securities denominated in grams of gold. The RBI occurs, like the recent floods, insurers use
Gold Bond scheme allows investors to invest in gold the money from these bonds to cover their
without holding physical gold. Recently, they have losses.
been allowed for NRIs as well. The benefit of these bonds:
• RBI Floating Rate Bond: Unlike traditional fixed- • Insurance and reinsurance companies use them to
rate bonds, the interest rate on these bonds is not shift big risks to investors in the capital market.
fixed but fluctuates periodically based on changes in This reduces their overall costs and frees up money
a reference rate. In the case of RBI Bonds, the for new insurance businesses.
reference rate is usually the Repo Rate set by the • Investors in cat bonds get regular interest
Reserve Bank of India (RBI) payments, like regular corporate bonds.
• If no qualifying disaster occurred, the insurance
company would pay a coupon to the investors.
Securities Appellate Tribunal (SAT) • But if it did occur, then the principal would be
News Excerpt: forgiven, and the insurance company would use this
The SAT quashed SEBI’s order that had barred Zee money to pay their claim-holders.
Entertainment Enterprises promoter from holding key
managerial posts in the company.
About: Non-Convertible Debentures
● The SAT is a statutory and autonomous body News Excerpt
created as per provisions of Section 15K of the Adani Ports and Special Economic Zone Ltd. announced
Securities and Exchange Board of India (SEBI) Act, that it will raise ₹5,250 crore by issuing non-convertible
1992. debentures and 2.5 billion rupees through non-
● The presiding officer and other board members are cumulative redeemable preference shares.
elected by the selection committee by the Prime About:
Non-Convertible Debentures (NCDs):
Minister of India.
• A debenture is a type of long-term debt instrument
● The jurisdiction of the SAT extends to companies
issued by a company to raise funds from public or
situated across India.
institutional investors.
● It hears and disposes of appeals against orders
• Some debentures have a feature of convertibility
passed by the SEBI or an adjudicating officer under
into shares (Convertible Debentures) after a certain
the act and exercises jurisdiction, powers and
point of time at the discretion of the owner, while
authority conferred on the Tribunal.
others don't (Non-Convertible).
• Companies use NCDs as tools to raise long-term
Catastrophe bonds funds through public issues.
News Excerpt: • To compensate for this drawback of non-
Insurance companies in India have faced losses from convertibility, lenders are usually given a higher
various natural disasters, such as the December Chennai rate of return compared to convertible debentures.
floods. Over the years, the industry has developed Preference shares: Company stock with dividends that
instruments to deal with such disasters: catastrophe are paid to shareholders before common stock (equity
bonds or 'cat bonds'. share) dividends are paid out.
What is a 'cat bond'? Cumulative preference Non-cumulative
• It's a financial safety net for the insurance industry. shares preference shares
o Cat bonds provide insurers with quick access to ● Requires the ● Do not issue any
funds during large disasters. company to pay omitted or unpaid
o Recent destruction events, such as Cyclone shareholders all dividends.
Michaung, brought the insurance companies dividends, including ● If the company
under stress. those that were chooses not to pay
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o Investors benefit by earning interest on the omitted in the past, dividends in any
bonds they hold. before the common given year, the
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shareholders can shareholders of the

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receive their dividend non-cumulative by making tax evasion or avoidance a more
payments. preferred stock complicated exercise.
● While these dividend have no right or ● Introduction of new tracking features: As per
payments are power to claim such the government, the introduction of new tracking
assured, they may forgone dividends features has helped the income tax department
only sometimes be at any time in the widen the tax base.
disbursed promptly. future. ● The introduction of new data sources in the
Statement of Financial Transactions (SFT), such
as dividends, interest, details of shares and mutual
funds, information from GSTN, the introduction of a
TAXATION new TDS code, etc., has led to a 12-fold jump in
reported information, with the addition of
Growing Tax Base in India information about 3 crore persons.
News Excerpt: Implications of growing tax base:
There has been a steady increase in both direct and ● Reduce budget deficits: It can help the
indirect taxpayers in India over the past few years, government reduce budget deficits and achieve
leading to an increase in the overall tax base. fiscal sustainability.
Related Data: ● Reduction in tax evasion: When more people and
● During the assessment year 2014-15, the number of businesses are brought into the tax net, there is
companies paying tax stood at 7.46 lakh. By 2022- increased scrutiny and accountability, reducing
23, it had risen to 10.7 lakh, an increase of around tax evasion.
43%. ● Higher tax collections: A broader tax base results
● Over the same period, the number of individual in higher tax collections. It helps the government
taxpayers grew by 65 %, rising from 5.38 crore to finance various public expenditures, such as
8.9 crore. infrastructure development, healthcare, education,
● The disaggregated data shows that small taxpayers and social welfare programs.
(those ● Reduced tax rates: If the tax base expands, the
with government may consider reducing tax rates. Lower
Tax base: It is the total value of all
incomes tax rates can stimulate economic growth and
assets, income, and economic activity
less than encourage compliance.
that can be taxed by a taxing authority,
Rs 5 lakh) ● Reduction of income inequality: A broader tax
usually a government. It is used to
account base can be used to implement more progressive
calculate tax liabilities. The tax base's
for a taxation policies, which can help redistribute
size and growth (increase or decrease)
sizable wealth and reduce income inequality.
are crucial to local, state, or central
number of government planning.
these new Tax on Online Gaming Platforms
taxpayers.
News Excerpt:
● Similar trends can be observed in the case of
The Central Board of Direct Taxes (CBDT) implemented
indirect taxpayers. The number of active GST
fresh tax regulations for online gaming platforms.
payers (as of June 2023) stood at 1.4 crore, up from Key Highlights of the New Rules:
1.2 crore in 2019. ● No TDS on winnings up to Rs 100:
Reasons for growing tax base in India:
o Online gaming platforms are not required to
● Growing size of economy: Part of this increase in
deduct tax at the source if the net winning
the tax base is a natural consequence of the
amount is below Rs 100.
economy's growing size—more companies are
o This exemption provides relief for players with
setting up shop, more individuals are entering the
smaller winnings.
labour force, and more formal sector jobs are ● Taxable Deposits:
29
being created. o Bonus, referral bonuses, and incentives online

● Formalization of the economy: The growing gaming companies provide are taxable
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formalisation of the economy will likely play a role deposits.

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About CBDT considerations associated with their revenue

• It operates as a statutory body under the Central streams.
Board of Revenue Act of 1963. • Meeting the requirements and comprehending the
• It falls within the Department of Revenue under new tax regulations could pose challenges in terms
the Ministry of Finance. of compliance.
• Its role involves contributing to policy and • There is a chance that players may move to
planning related to direct taxes in India and jurisdictions with more favourable tax
overseeing the implementation of direct tax laws regulations.
through the Income Tax Department.
• Direct taxes encompass income tax, corporation New GST Compliance Measures
tax, and other similar taxes.
News Excerpt:
The government has reduced the threshold for
o These deposits are subject to tax under Rule 133
businesses to generate e-Invoices for Business-to-
of the Income-tax Act.
Business (B2B) transactions from Rs 10 crore to Rs 5
● Calculation of Net Winnings:
crore.
o Net winnings in the online gaming industry are
About:
calculated separately for each user account.
This step aims to combat tax evasion and enhance
o The total amount across all user accounts
compliance within the Goods and Services Tax (GST)
associated with an individual is considered for
system. Additionally, the government has introduced the
deposit, withdrawal, or balance calculation.
Automated Return Scrutiny Module (ARSM) for GST
o Transfers between user accounts under the
returns. This backend application is designed for central
same online intermediary belonging to the
tax officers to facilitate efficient scrutiny and processing
same user are not treated as withdrawals or
of GST returns.
deposits.
o Withdrawals or deposits between one user's Automated Return Scrutiny Module
account and another user's account are The Automated Return Scrutiny Module (ARSM) is a
considered withdrawals. component of the ACES-GST backend application. It
● Valuation of Winnings: utilizes data analytics to identify potential risks and
o The fair market value is used to determine the inconsistencies in GST returns.
valuation of winnings in kind, except when the This enables tax officers to examine the GST returns
online gaming intermediary has purchased the of Center Administered Taxpayers, selected based on
winnings before providing them to the user. the risks identified by the system.
o If the online gaming intermediary manufactures The module also generates alerts to notify tax officers of
items as winnings, the fair market value is any instances of non-compliance that are detected.
considered. The implementation of the automated return scrutiny
● TDS Provision for Online Gaming: module has already begun, starting with the scrutiny of
o Section 194BA was introduced in the Income- GST returns for the fiscal year 2019-20, using the data
tax Act, 1961, by the Finance Act 2023, to already available to tax officers.
regulate online gaming transactions.
Understanding e-invoicing under GST
o Online gaming platforms are required to deduct
● e-Invoicing is a system where B2B invoices and other
income tax at a rate of 30% on net winnings
documents are electronically authenticated by the
from a user's account.
GSTN for use on the GST portal.
o TDS is deducted at the time of withdrawal and
● It involves submitting standard invoices on a
at the end of the financial year.
common e-invoice portal and automating reporting
Impact of the Move
with one-time input of invoice details.
• Online gamers may experience a greater tax load,
● The Invoice Registration Portal (IRP) assigns each
thus leading to a decrease in gaming income.
invoice a unique identification number, which
• Esports organizations might need to modify their
30
transfers information to the GST portal and e-Way

financial models and take into account the tax
Bill portal in real time.
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● The e-Way Bill is a digital compliance mechanism in their income due to external incidents that they
that allows the person responsible for moving are not responsible for, a Windfall Tax is levied on
goods to upload relevant information before the their earnings.
goods are transported. It facilitates faster movement
of goods.
New Angel Tax Norms
● e-Invoicing eliminates manual data entry when filing
News Excerpt:
returns and generating e-way bills.
The Income Tax Department has notified new angel tax
● The primary objective of implementing e-invoicing
rules that comprise a mechanism to evaluate the shares
is to enable interoperability across the entire GST
issued by unlisted startups to investors.
ecosystem, as approved by the GST Council.
About the Angel Tax:
● It helps pre-populate the return and reduces
● Angel tax (income tax at the rate of 30.6%) is levied
reconciliation issues for tax authorities.
when an unlisted company issue shares to an
● The implementation of e-invoicing aims to tackle
investor at a price higher than its fair market value
cases of fake invoices, fraud, and improper claiming
(FMV).
of input tax credits.
● Earlier, it was imposed only on investments made by
● Real-time data access provided by e-invoicing helps
a resident investor.
in curbing tax evasion and reducing fraud.
Significance of Lowering Thresholds for e-Invoice
• The reduction in the threshold for e-invoicing holds Fair market value (FMV) is the price a product would
great significance as it extends the compliance sell for in the open market, assuming that both buyer and
requirements to a larger number of businesses, seller are reasonably knowledgeable about the asset, are
particularly small and medium-sized enterprises, behaving in their own best interests, are free of undue
thereby contributing to increased GST revenue pressure, and are given a reasonable time period for
collections. completing the transaction.
• Additionally, it is anticipated to effectively combat
tax evasion, expand the tax base under the GST ● The new rule prescribes five methods for non-
regime, and furnish tax authorities with additional resident investors: comparable company multiple
data to enhance overall compliance. method; probability-weighted expected return
• By mandating a wider adoption of e-invoicing, the method; option pricing method; milestone analysis
government aims to mitigate mismatch errors and method; and replacement cost method.
fraudulent practices associated with the creation of ● The notified Rule 11 UA expands the valuation
counterfeit invoices. methodologies to include globally accepted
methodologies and provides broad parity to
Windfall tax resident and non-resident investors.
News Excerpt: ● The budget attempts to address differences in
tax treatment between two similar taxpayers.
The Government of India hiked the windfall tax on crude
o The Finance Bill 2023 proposes to remove the
oil.
condition of residency from the section, making
● As the name suggests, “windfall” refers to a
it applicable even when shares are issued to
dramatic and unanticipated increase in profits.
non-resident investors.
On the other hand, “tax” implies an imposition levied
o Finance Act, 2023 brought in an amendment to
on this dramatic income growth.
bring the consideration received from non-
● The government imposes this tax when they notice
residents for the issue of shares by an unlisted
a sudden rise in an industry’s revenue. For
company within the ambit of section 56(2)(vii b)
instance, the recent Russia-Ukraine war benefitted
of the Income-tax Act, 1961(the Act), which
oil and gas industries with a sudden rise in their
provides that if such consideration for issue of
profit. So, the government imposed a windfall tax on
shares exceeds the Fair Market Value(FMV) of
these industries.
31
the shares, it shall be chargeable to income-

● These profits cannot be attributed to the company's
tax under the head 'Income from other
activities, like its business expansion or strategy.
Page
sources'.
Hence, when industries experience massive growth
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Income from other sources: ensure that international tax agreements are
• It is a residuary head of income that includes adhered to.
any income that is not exempt from tax and needs The story/background behind the case:
to be included in the total income and not • India has Double Taxation Avoidance Agreements
chargeable under the following heads: a) (DTAAs) with various countries, including the
Salaries, b) Income from house property, c) Profits Netherlands, France, Switzerland, Slovenia,
and gains from business or profession d) Capital Colombia, and Lithuania. These DTAAs govern the
gains. taxation of dividends paid by Indian entities to
• Certain incomes, such as winnings from residents of these countries.
lotteries, gifts, interest on enhanced o These DTAAs also contain a Most Favored
compensation, etc., are always taxable under this Nation (MFN) provision.
heading. o This provision states that if India extends a
preferential tax treatment to any third country
member of the OECD, the same treatment
Double Taxation Avoidance Agreement
should be accorded to the countries mentioned
(DTAA) above under their respective DTAAs.
News Excerpt: • Slovenia, Colombia, and Lithuania were not
Recently, the Supreme Court (SC) passed a judgment in OECD members when they signed their DTAAs with
the Assessing Officer Circle (International Taxation) India. However, they later became OECD members,
vs. Nestle India case interpreting the Most Favored which triggered the MFN provision in their
Nation (MFN) clause in the DTAA. respective DTAAs.
About DTAA: • Initially, the Delhi High Court held that under the
This provision allows India to sign tax treaties with other MFN provision, the preferential tax treatment in, for
countries to avoid being taxed twice. India has DTAA example, the India-Slovenia DTAA should extend
with 85 countries till June 2023. to the India-Netherlands DTAA.
• One of the foremost challenges foreign investors o However, the Supreme Court overruled this
face in India is uncertainty regarding taxation decision, holding that the benefits extended to
measures. Slovenia (a later OECD member) do not apply
• Taxation-related improbabilities arise not just due retroactively to the India-Netherlands DTAA.
to the actions of the executive but also the judiciary.
This makes doing business in India difficult for
foreign players. Local bodies can be allocated a portion of
About the Judgment: GST collections
● The SC disposed of 11 petitions involving News Excerpt:
corporations such as Nestle (a Swiss multinational NK Singh Chairperson of the 15th Finance Commission
company) and Steria (a European company). and the Institute of Economic Growth, suggested that a
• The question in judgment was whether the most specific percentage of the Goods and Services Tax
favoured nation (MFN) clause in tax treaties, such (GST) could be allocated to local bodies.
as the Double Taxation Avoidance Agreements
(DTAAs) that India has signed, could be given effect Recommendations:
in India without notification for the same under • Allocation out of GST collections to the third tier is
Section 90 of the Income-Tax Act or in simple terms not a function of the Finance Commission but of
it addressed whether the MFN clause should be the GST Council.
automatically enforced or if it requires a separate o States can negotiate with the Central
notification. Government regarding the increment in their
o To this question, the SC answered that treaties share of the taxes provided by the GST Council.
and protocols do not automatically confer rights • The timely formation of a State Finance
upon the parties upon India’s entry into them. Commission, functioning similarly to the Central
32
• The court emphasized that appropriate notifications Finance Commission, and the thorough analysis of
under Section 90(1) are essential. It emphasizes recommendations, submission to the State
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the need for clarity and a strict legal process to Legislature, and presentation of reports related to
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action taken significantly impact the financial Dividend Distribution Tax (DDT) on a buyback of shares
viability of third-tier institutions. worth Rs 19,000 crore under a scheme of arrangement.
Procedure followed by GST council on tax issues What is a dividend?
• Every decision of the Goods and Services Tax ● Return given by a company to its shareholders out
Council shall be taken at a meeting by a majority of the profits earned in a particular year.
of at least three-fourths of the weighted votes of ● It can be issued in various forms, such as cash
the members present and voting. payment, stocks, etc.
• The vote of the Central Government shall have a ● Decided by its board of directors and requires the
weightage of one-third of the total votes cast. shareholders' approval.
• The votes of all the State Governments taken ● It is not obligatory for a company to pay.
together shall have a weightage of two-thirds of Dividend Yield:
the total votes cast. ● Measure of the annual dividend income an investor
• Necessity of coherence and symmetry in the can expect to receive from an investment in a
regulatory framework for the entire urban sector. particular stock.
• There is a need for change in the bureaucrats' and ● Helps investors assess the income potential of a
developmental banks' processes, procedures, stock.
and mindsets to innovate private capital. ● Calculated by dividing the annual dividend per share
o They should use guarantees, hybrid capital, and by the stock's current market price.
blended finance and avoid the principle of About Dividend Distribution Tax (DDT):
cascade finance. ● It was a tax imposed by the Indian government on
o This will allow them and governments to companies that distributed dividends to their
harness private capital more innovatively and shareholders.
creatively than before, avoiding the need for ● It was introduced to tax the dividend income
public-sector banks to wait for clients. received by shareholders indirectly through the
• There is a need to spend $140 per person per year, company rather than taxing the dividend income at
but instead, India spends around $20. Masterplans the individual level.
for transportation and more coherent metropolitan ● DDT has been repealed and abolished under the
architecture are needed. Finance Act 2020.
o For example, Mumbai has 10 Municipal Bodies ● Indian corporations are no longer obligated to pay
and 1 Panchayati Raj body running the city. DDT on dividends paid to shareholders. Instead,
• The model of certain cities in successful urban shareholders will be forced to pay tax on
dividends based on their tax bracket.
planning can be followed.
● For example, if a shareholder is in the 30% tax
o E.g., cities such as Surat and Ahmedabad have
bracket, the dividend received will be subject to 30%
seen a drastic reduction in slums.
tax.
o Urban planning needs political will to be
● Dividend income is taxed in the hands of the
pushed through to implementation.
shareholders only if it is distributed on or after
• Financial transparency: It builds trust in
01-04-2020.
government among the citizens and courts their
willingness to pay their taxes and other levies, which
in turn maximizes the authority's budget. MISCELLANEOUS
o The local government should pay attention to
the preparation, presentation, and
FDI Inflows
dissemination of quality financial information
News Excerpt:
to the citizens in a timely and engaging.
In the fiscal year ending March 2023, India witnessed a
significant decline in Foreign Direct Investment (FDI)
Dividend Distribution Tax (DDT) inflows. Gross FDI inflows in FY23 amounted to USD 71
News Excerpt: billion, indicating a 16% decrease compared to the
33
The Chennai bench of the Income Tax Appellate Tribunal previous fiscal year. This decline marks the first instance
(ITAT) recently ruled against Cognizant Technology of FDI inflows decreasing in the country in the past
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Solutions India, stating that the company is liable to pay ten years.
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Understanding FDI • Infrastructure Deficit: Despite ongoing efforts to
● FDI is a form of cross-border investment where an enhance infrastructure, India still experiences
investor establishes a lasting interest in a foreign significant gaps in areas like transportation, logistics,
enterprise. power, and telecommunications. Insufficient
● FDI can take different forms, including acquiring infrastructure adversely affects the ease of doing
shares, establishing subsidiaries or joint ventures, business and increases operational costs for foreign
providing loans, or transferring technology. investors.
● FDI is recognized as a crucial contributor to Measures to boost FDI in India
economic growth. It brings capital, technology, ▪ Simplify and Streamline Regulatory
skills, market access, and employment opportunities Processes
▪ Improve Infrastructure Development
to the host country.
▪ Enhance Investor Protection Mechanisms
About India’s FDI Pattern
▪ Promote Sector-Specific Investment Policies
• India has emerged as an appealing destination for
foreign direct investment (FDI) due to factors such
as its large and expanding domestic market, Deceptive Advertising Practices: Menace
favourable demographics, political stability, of 'Dark Patterns' in e-Market
liberalized policy framework, and improved business News Excerpt:
environment. The Department of Consumer Affairs and the Advertising
• As per the Department for Promotion of Industry Standards Council of India (ASCI) recently held a joint
and Internal Trade (DPIIT), India has received a total consultation with stakeholders on the menace of dark
FDI inflow of USD 871.01 billion during the period of patterns. The ASCI has developed guidelines for the
April 2000 to June 2022. same, and the central government is also working
• According to the World Investment Report 2022, towards norms against dark patterns.
India holds the 7th position among the top 20 host About Dark Patterns:
economies for FDI in 2021. ● The dark pattern phrase was firstly introduced by
• In FY22, India witnessed the highest-ever FDI Harry Brignull as a user experience researcher in the
inflows, reaching USD 84.8 billion, which included U.K. in 2010 to characterise deceptive strategies
USD 7.1 billion of FDI equity inflows, specifically in used to trick clients.
the services sector.
● Dark pattern refers to a type of design or user
• Singapore (27.01%), the USA (17.94%), Mauritius interface technique intentionally designed to
(15.98%), the Netherlands (7.86%), and Switzerland manipulate or deceive users into making certain
(7.31%) have emerged as the top five countries choices or performing specific actions that may not
contributing to FDI equity inflows in India. be in the best interests of consumers.
Why is it deceptive?
Challenges related to FDI in India:
• It is a deceptive method employed to influence
• Taxation and Regulatory Compliance: Although
user behaviour to benefit the company
India has implemented various tax reforms,
implementing it.
complexities and uncertainties persist in the tax
• For example, a common dark pattern is the "sneak
regime. Foreign investors encounter challenges due
into basket" technique used on e-commerce
to frequent changes in tax laws, multiple layers of
websites.
taxation, and disputes over tax assessments, which
How is it deceptive?
impact compliance and tax planning.
• When a user adds an item to their shopping cart, a
• Competition from Other Emerging Markets: India
dark pattern may be employed by automatically
faces competition from other emerging markets,
adding additional items to the cart without the
including China, Vietnam, and Indonesia, in
user's explicit consent or explicit notification.
attracting foreign direct investment (FDI). These
countries offer competitive advantages such as
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lower production costs, improved infrastructure, and

investor-friendly policies.
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• It may mislead the user into purchasing more items patterns" in social media interfaces that violate
than they intended, potentially increasing the General Data Protection Regulation (GDPR) laws.
company's sales.
• Similarly, many of us have been faced with pop-up Types of Dark Patterns
requests for our personal information, where we find False Urgency: This tactic creates a sense of urgency or
it difficult to locate the 'decline' link. scarcity to pressure consumers into making a purchase or
• If customers wish to remain on a website, it is taking action.
Basket Sneaking: Websites or apps use dark patterns to add
extremely challenging for them to decline the
additional products or services to the shopping cart without
acquisition of their personal data, as the option to
user consent.
opt-out is very finely placed.
Subscription Traps: This tactic makes it easy for consumers
• By using such dark patterns, digital platforms violate
to sign up for a service but difficult for them to cancel it, often
the consumer's right to full transparency of the by hiding the cancellation option or requiring multiple steps.
services they use and control over their browsing Confirm Shaming: It involves guilt as a way to make
experience. consumers adhere. It criticizes or attacks consumers for not
The legal status of Dark patterns conforming to a particular belief or viewpoint.
• This aspect of dark matter is very complex, as Forced Action: This involves forcing consumers to take an
differentiating between manipulation and action they may not want to take, such as signing up for a
fraudulent intent can be challenging. Presently, service to access content.
there are no specific regulations against or to Nagging: It refers to persistent, repetitive and annoyingly
prevent dark patterns in most countries. constant criticism, complaints, and requests for action.
• However, individuals who have experienced harm as Interface Interference: This tactic involves making it difficult
a result of dark patterns may potentially seek for consumers to take certain actions, such as cancelling a
compensation for damages. subscription or deleting an account.
• In 2022, Google and Facebook faced repercussions Bait and Switch: This involves advertising one product or
due to their cookie banners. These companies were service but delivering another, often of lower quality.
charged with violating EU and French regulations by Hidden Costs: This tactic involves hiding additional costs
from consumers until they are already committed to making
making it more difficult for users to reject cookies
a purchase.
than to accept them.
Disguised Ads: Disguised ads are advertisements that are
Global regulation on dark patterns
designed to look like other types of content, such as news
• Regulators in other jurisdictions such as the
articles or user-generated content.
European Union, USA and UK have taken action
against dark patterns involving unfair and deceptive
practices in online interfaces, which were found to
be detrimental to consumers. The activities which Internationalization of rupee
the platforms were observed to be indulging News Excerpt: The Reserve Bank of India’s (RBI) inter-
include: - departmental group (IDG) had mentioned that the rupee
o Non-consensual enrolment in subscription has the potential to become an internationalized
programs (USA) currency.
o Pressure selling using misleading Internationalisation of the rupee:
countdown clock (UK) ● It is a process that involves increasing the use of the
o Secretly saving credit card information and rupee in cross-border transactions.
charging users without consent (USA) ● It involves promoting the rupee for import and
o Putting in place a cancellation process export trade and then other current account
designed to deter consumers from opting transactions, followed by its use in capital account
out of subscriptions (Norway). transactions. These are all transactions between
• Guidelines from the European Data Protection residents in India and non-residents.
Board were released in 2022. They offered designers ● Requirements for Internationalisation:
and users of social media platforms practical o The internationalisation of the currency, which is
35
guidance on how to spot and avoid so-called "dark closely interlinked with the nation’s economic
progress, requires further opening up of the
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currency settlement and a strong swap and participants. There is a need for trust, familiarity, and
forex market. confidence in the currency.
o More importantly, it will require full Recommendations of RBI panel for
convertibility of the currency on the capital internationalisation of rupee
account and cross-border transfer of funds ▪ As part of the long-term measures to achieve
without any restrictions. India has allowed only internationalisation of the rupee, the panel
full convertibility on the current account as of suggested the inclusion of the rupee in the SDR
now. (Special Drawing Rights) basket.
o Currently, the US dollar, the Euro, the Japanese ▪ For the short term, the group has suggested-
yen and the pound sterling are the leading
reserve currencies in the world. China's efforts The SDR is an international reserve asset created by
to make its currency renminbi have met with the IMF (International Monetary Fund) to supplement
only limited success so far. the official reserves of its member countries. The
Advantages of internationalisation of the rupee value of the SDR is based on a basket of five
• The use of the rupee in cross-border transactions currencies-
mitigates currency risk for Indian businesses. ● the U.S. dollar,
• Protection from currency volatility not only ● the euro,
reduces the cost of doing business but also enables ● the Chinese renminbi,
better growth of business, improving the chances ● the Japanese yen and
for Indian businesses to grow globally. ● the British pound sterling.
• Reserves help manage exchange rate volatility
o adoption of a standardised approach for
and project external stability; they impose a cost
examining the proposals on bilateral and
on the economy.
multilateral trade arrangements for invoicing,
• Internationalisation of the rupee reduces the need
o settlement and payment in the rupee and
to hold foreign exchange reserves. Reducing
local currencies,
dependence on foreign currency will make India less
o encouraging the opening of rupee accounts
vulnerable to external shocks. for non-residents both in and outside India
• As the use of the rupee becomes significant, the and integrating Indian payment systems with
bargaining power of Indian businesses would other countries for cross-border transactions.
improve, adding weight to the Indian economy and
▪ Over the next two to five years (For the medium
enhancing India’s global stature and respect.
term), the group has recommended-
Challenges to the internationalisation of the rupee
o a review of taxes on masala (rupee-
• Volatility issue: The volatility of the rupee is a
denominated bonds issued outside India by
bigger issue in the international market. Fluctuations
Indian entities) bonds,
in the value of the rupee can impact trade o International use of Real Time Gross
competitiveness, foreign investment flows, and Settlement (RTGS) for cross-border trade
financial stability in the international market. transactions and inclusion of Indian
• Capital related issue: As a capital deficient country, Government Bonds in global bond indices.
India needs foreign capital to fund its growth. If a ▪ India should use the existing bilateral and
substantial portion of its trade is in rupee, non- multilateral payment and settlement mechanisms,
residents would hold rupee balances in India which such as ACU (Asian Clearing Union), to
would be used to acquire Indian assets. internationalise the rupee.
• Competitions with other currencies: The Indian ▪ The RBI should also look at expanding the footprint
currency has to face competition with the US dollar, of rupee-denominated payment mechanisms.
Chinese renminbi, British pound sterling, etc., so it is ▪ The RBI should step up measures for the inclusion of
not going very easy to become relevant in the Indian Government Bonds (IGBs) in global bond
current world order. indices and also suggest rationalisation of the FPI
• Adoption by market participants: The process of regime to facilitate a more conducive environment
36
internationalisation of the rupee is a bigger for foreign investments into the Indian debt markets
challenge than acceptance and adoption by market
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(both government and corporate).
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▪ It suggested strengthening the financial market • Reverse Book building happens in the same manner
by fostering a global 24×5 rupee market and as book building happens, the only difference is
recalibration of the FPI (foreign portfolio investor) here the shareholders place their sell orders along
regime. with a bid-ask price.
Cases that require following the Reverse book-
building process
Reverse Book-Building Process
▪ The delisting of securities may occur in situations
News Excerpt:
when the public shareholding in the company
SEBI is reviewing delisting regulations to prevent the falls below the minimal threshold outlined in the
manipulation of shares. It may allow fixed-price listing criteria or listing agreement. Takeovers,
delisting instead of the current reverse book-building mergers, and acquisitions, for instance, in which a
method. promoter or another party purchases the majority of
About: the company's shares.
● The SEBI (Delisting of Securities) Guidelines 2003
▪ These are cases where a promoter or member of
were published by the Securities and Exchange management has attempted to combine their
Board of India and govern the removal of securities shares of the company in a way that causes the
from stock exchanges. The rules, among other public shareholding to fall below the minimal
things, give a promoter's voluntarily delisting a threshold outlined in the listing agreement or
general structure. conditions.
● The SEBI (Delisting of Equity Shares) Regulations ▪ Delisting is required as a result of orders from stock
2009, published by the Securities and Exchange exchanges or SEBI.
Board of India, allow for the voluntary removal of SEBI's Review and Proposed Changes
equity shares from stock exchanges. • Keki Mistry's suggestions were given to SEBI, which
● In an effort to prevent manipulation of shares of a acknowledged the necessity for a revision of the
firm that has chosen to delist from the stock delisting rules.
markets, SEBI is examining the rules for listed • Instead of depending entirely on the reverse book-
companies that choose to delist. building process, the regulator is considering
Delisting of securities allowing corporations to delist shares at a set price.
• Removing a company's securities from a stock The Advantages of a Fixed Price Mechanism
market is referred to as delisting. When a company • It simplifies transactions and negotiations by
is delisted, the stock market no longer allows the establishing a predetermined price, reducing the
trading of its securities. Delisting could be need for complex price discovery processes. This
obligatory or discretionary.
predictability promotes efficiency and ease of trade.
• When a company decides to delist its securities
• Fixed pricing can enhance market stability and
compulsorily rather than voluntarily, it is
investor confidence, as it minimizes the
penalized for failing to immediately submit required
fluctuations and uncertainties associated with
paperwork or satisfy other listing agreement criteria.
variable pricing systems.
• If a company wants to delist its securities, it must
• For consumers, fixed pricing provides
buy back 90% of all the outstanding shares.
transparency, allowing them to make informed
About Reverse Book Building
purchasing decisions without worrying about
• Reverse Book Building is a mechanism by which the sudden price changes.
Acquirer/Company offers to buy back shares from
its shareholders.
• The SEBI (Delisting of Equity Shares) Regulations Nobel Prize in Economic Sciences 2023
2009, published by the SEBI, set forth the general News Excerpt:
framework for voluntary delisting by a promoter or Claudia Goldin has become the first woman to win the
acquirer through a procedure known as Reverse Sveriges Riksbank Prize in Economic Sciences in Memory
of Alfred Nobel 2023.
37
Book Building. It also allows for the voluntary

delisting of equity shares from stock exchanges. She has provided the first comprehensive account of
Page
women’s earnings and labour market participation
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through the centuries. Her research reveals the causes the service sector in the early twentieth century.
of change and the primary sources of the remaining Goldin explained this pattern as the result of
gender gap. structural change and evolving social norms
regarding women’s responsibilities for home and
family.
Figure : The participation of women as tracked against time. Also
indicated
● During thearetwentieth
the significant changes
century, that took education
women's place with the changing
scenario.
levels continuously increased, and in most high-
income countries, they are now substantially higher
than for men. Access to contraceptive pills was an
important factor in this shift, allowing women to
plan their careers and families for the long run.
Why has the pattern changed?
● She noted that only about 50% of all women
actively seek work or are in paid employment, while
the corresponding figure for men is 80%. Those
In-depth:
women who participate earn significantly less
The first two female winners were: (only three women
than their male counterparts for the same
have won this prestigious prize). occupation.
Elinor Ostrom: She became the first woman to win the ● Data shows that despite modernization, economic
prestigious Nobel Prize in Economic Sciences in 2009. growth, and rising proportions of employed women
She was awarded for her analysis of economic in the 20th century, the earnings gap hardly closed
governance, especially the “Tragedy of Commons.” for a long period. Historically, much of the gender
Ester Duflo: She was awarded in 2019 for her gap in earnings could be explained by differences in
experimental approach to alleviating global poverty. education and occupational choices.
Professor Claudia Goldin’s work: ● However, Goldin has shown that the bulk of this
• She won this award for “having advanced our earnings difference is now between men and
understanding of women’s labour market women in the same occupation and that it largely
outcomes”. arises with the birth of the first child. She explains
• She researched the 200 years of archives of the that part of the explanation is that educational
United States of America to demonstrate how and decisions, which impact a lifetime of career
why gender differences in earnings and opportunities, are made at a relatively young age.
employment rates have changed. ● Opportunities for paid female work expanded in
the 20th century with
Alfred Nobel constituted a series of prizes in Physics,
o Structurally, change is attributable to the
Chemistry, Physiology or Medicine, Literature, and Peace
– the Nobel Prizes. In 1968, Sveriges Riksbank expansion of white-collar work (work at a desk
(Sweden’s central bank) established The Sveriges in office settings like professional service,
Riksbank Prize in Economic Sciences in Memory of Alfred administrative work, etc.
Nobel. o Technological change affects the nature of work
at the office and home.
Her findings: o Changes in access to education, such as
How has the pattern changed? expanding
She contradicted the popular belief that the secondary
Marriage Bars:
participation of women in the workforce showcases a schooling
It is the requirement that
linear upward trend when plotted against time. She for women.
women working in certain jobs
confirmed that the data shows a U-shaped curve, i.e., a Yet, the social stigma
must leave that job when they
decrease is noticed at first, with an increase later. attached to the marry. It was widely prevalent
● The participation of married women decreased employment of till the 1960s in the developed
with the transition from an agricultural to an married women and
38
countries.
industrial society in the early nineteenth century. explicit institutional
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Still, it then started to increase with the growth of barriers (i.e., so-
www.ksgindia.com
called marriage bars) severely limited the impact of bilateral trade agreements are becoming more
improved opportunities. common.
● Discourage protectionist measures: WTO
discourages protectionist measures and maintaining
India and its Trade Disputes
open markets.
News Excerpt:
India and the US have mutually resolved all six trade
disputes pending at the WTO. World Co-Operative Economic Forum
More details: News Excerpt:
● With this, the pending trade disputes have been Leading cooperative sector experts have come together
resolved between the two nations. India also agreed to form the World Cooperative Economic Forum
to remove retaliatory Customs duties on 28 US (WCopEF) to give voice to over three million
products, such as almonds, walnuts, and apples.
cooperatives spread across the globe. These
● These duties, imposed in 2019, had come in
cooperatives employ around 10% of the total workforce
response to the USA's move the previous year to
impose a 25% import duty on steel products and worldwide.
10% on aluminium products on the grounds of About the WCopEF:
national security. • The WCopEF will bring together, for the first time,
Significance of this dispute resolution: co-operators, social scientists, cooperative
● The decision to end the trade disputes is expected economists, policymakers, and other stakeholders
to have a positive impact on India's exports to the to brainstorm about the economy.
US. Further, India has highlighted its interest in the • It also intends to raise issues and concerns of the
restoration of its status under the US Generalized cooperative sector with governments and other
System of Preferences (GSP) programme. stakeholders around the globe.
● It showcases India’s new approach to trade issues, • The WCopEF will strive to promote cooperative
which is to solve the issues mutually. thinking and cooperative movement.
● Resolving outstanding WTO disputes represents an • It will be based in New Delhi, India.
important milestone in the U.S.-India trade
relationship while reducing tariffs on certain Circular Migration
products, which enhances crucial market access
News Excerpt: In India, internal migration (within a
for producers of both countries.
particular country or state) has almost always been
● Experts believe that this resolution will help
circular. According to the Periodic Labour Force Survey
strengthen the 2+2 dialogue between India and
July 2020-June 2021, the all-India migration rate was
the US and facilitate further promotion of trade.
28.9%, with a 26.5 % migration rate in rural areas and
Relevance of WTO:
34.9% in urban areas.
It is difficult to conclude whether out-of-court
About Circular Migration:
resolutions diminish the importance of the WTO’s
• Definition: According to Philippe Fargues,
dispute settlement mechanism.
migration can defined as circular if it meets the
● A crucial platform for developing nations: It
following criteria
remains a crucial platform for small and developing
o Temporary residence in the destination
nations to engage in international trade
location,
negotiations.
o Possibility of multiple entries into the
● Addressing global challenges: The WTO can play a
destination country,
role in addressing global challenges, such as the
o Freedom of movement between the country
COVID-19 pandemic and vaccine distribution.
of origin and the country of destination
● Trade liberalization: The WTO has not only
during the period of residence,
enhanced the value and quantity of trade but has
o Legal right to stay in the destination country,
also helped in eradicating trade and non-trade
o Protection of migrants’ rights,
barriers.
Healthy demand for temporary labour in the
39
o
● Multilateralism: The WTO upholds the importance
destination country.
of multilateralism in the world where unilateral and
Page
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Global Innovation Index-2023

News Excerpt:
ORIGIN COUNTRY
UMPLOYMENT
RELIEF, ALLEVIATE India retains the 40th Position in the Global Innovation
FINANCIAL AND LABOUR Index (GII) 2023 among 132 countries.
DESTINATION
HUMAN INCREASED
MIGRANTS
NEEDS,
COUNTRY
CAPITAL, INCREASE INCOME, About the Index:
GREATER WORK
COUNTERACT ECONOMIC
EXPERIENCE, ● The index is published annually by the World
POPULATION PRODUCTION.
LOSS DUE TO HUMAN Intellectual Property Organization (WIPO).
CAPITAL
EMIGRATION.
DEVELOPMENT. ● The GII is a reliable tool for governments across the
world to assess the innovation-led social and
economic changes in their respective countries.
● It occurs mostly among low-income groups who
migrate to avail themselves of seasonally available ● Since 2019, the GII has been recognized by the
jobs in another country, city, place, etc. United Nations General Assembly as a benchmark
● According to the report of the United Nations F for measuring innovation in the context of the
Economic Commission for Europe Task Force, when i United Nations' SDGs.
g
measuring circular migration, one is called a circular Key findings-
u
migrant if one has completed at least ‘two loops’ ● r India leads the lower middle-income group,
between two countries.
e performing strongly in every innovation pillar except
● This can balance out the needs of development and B for Infrastructure.
individual economic advancement.
● e India holds the top ranking within the Central and
● Increased access to modern forms of transport and n Southern Asia region for Human capital and
communication, social networks, and the growth of e
multinational corporations have aided the advent of research (48th), Business sophistication (57th) and
f
circular migration. i Knowledge and technology outputs (22nd).
t o Strong indicators include ICT services exports
s (5th), Venture capital received (6th), Graduates
Project Mariana t in science and engineering (11th) and Global
News Excerpt: o corporate R&D investors (13th).
Project Mariana completes cross-border settlement of t
o The GII report states that India, Iran,
wholesale Central Bank Digital Currencies (CBDCs). h
e Philippines, Turkiye, Vietnam and Indonesia
About Project Mariana: are among the economies within the GII top
S
● It involved the Bank for International Settlements t 65 that climbed fastest in the ranking over the
(BIS) and the Central Banks of France, Singapore a last decade.
and Switzerland. ● k Switzerland – for a 13th year – ranks first in the
● This project explores how the future of FX trading e
GII 2023. Sweden is now 2nd and the United
and settlement could look in a world where central h
States on 3rd, followed by the United Kingdom
o
banks have issued central bank digital currencies
l (4th) and Singapore (5th).
(CBDCs), and financial market infrastructures include d
elements of decentralized finance (DeFi). e About WIPO:
● It pioneers the use of novel technology for interbank rIt is a United Nations specialized agency created in 1967
foreign exchange markets. sto promote intellectual property protection across the
● It successfully demonstrated that it is feasible to world by cooperating with countries as well as
exchange wholesale CBDC across borders using international organizations. It has currently 193 member
novel concepts such as automated market makers. countries (including 190 UN members states and the
● The project is purely experimental and does not Cook Islands, Holy See and Niue; Palestine has
indicate that any of the involved central banks permanent observer status) and is headquartered in
intend to issue CBDC or endorse DeFi or a particular Geneva, Switzerland.
technological solution.
● Its architecture balances central banks' domestic
need for oversight and autonomy with financial
institutions' interest in efficiently holding,
40
transferring, and settling wholesale CBDC across

borders.
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Digital Consent Acquisition (DCA) System International Competition Network

News Excerpt: News Excerpt:
The Telecom Regulatory Authority of India (TRAI) has The Competition Commission of India (CCI) joined the
asked banks and other entities sending out commercial International Competition Network's (ICN) steering
messages to telecom subscribers via SMS or voice calls group.
to take "urgent" steps to be onboard the Digital About ICN:
Consent Acquisition (DCA) system as per stipulated ● It is an informal, virtual network that seeks to
timelines. facilitate cooperation between competition law
About: authorities globally.
• The crackdown on Unsolicited Commercial ● The ICN is unique as it is the only global body
Communications like spam and pesky messages devoted exclusively to competition law
had seen TRAI issuing directions in June 2023 to enforcement, and its members represent national
all the access providers to develop and deploy and multinational competition authorities.
the DCA facility for creating a unified platform and ● It comprised 132 member states from 120
process to seek and register customers' consent competition jurisdictions exclusively devoted to
digitally across all telecom operators and international competition enforcement.
'Principal Entities'. ● Members produce work products through their
Principal Entities: involvement in flexible project-oriented and results-
Banks, other financial institutions, insurance based working groups.
companies, trading companies, business entities, and About the Competition Commission of India (CCI):
real estate companies are Principal Entities or ● CCI is the chief national competition regulator in
Senders in Telecom Commercial Communications India.
Customer Preference Regulations, 2018 (TCCCPR- ● It is a statutory body within the Ministry of
2018). Corporate Affairs. It is responsible for enforcing the
They send commercial messages to telecom Competition Act 2002 to promote competition and
subscribers through SMS or voice calls. prevent activities that adversely affect competition
in India.
• TRAI has set a deadline of September 30 for ● The CCI looks into cases and investigates them if
onboarding Principal Entities (PEs) from the banking, the same hurts competition.
insurance, finance, and trade sectors and November ● CCI also approves combinations under the act so
30 for onboarding PEs from the remaining sectors. that two merging entities do not overtake the
Limitation of the Prevalent System: market.
In the prevalent system, consent is obtained and
maintained by various PEs.
• As a result, the Access Providers could not verify Penny Drop Verification
the authenticity of consent. News Excerpt:
• Furthermore, there was no unified system for The Pension Fund Regulatory and Development
clients to provide or withdraw consent, necessitating Authority (PFRDA) makes 'penny drop' verification
a revision by TRAI.
mandatory for NPS fund withdrawal.
The new DCA process has been established to
streamline the process of seeking and revoking the About:
consent of the consumers. ● It is a form of bank account validation in which a
• It is clearly stated that, following the implementation penny, usually INR 1, is deposited into the bank
account.
of DCA, all current consents obtained by
● For example, if a business registers a new vendor,
alternative means will be considered null and
one of the foremost requirements would be to verify
void, and all PEs will be required to seek new
the vendor’s bank account details.
consents solely through digital means.
● This is done to ensure the validity of the account so
that neither the business nor the vendor faces any
problems during payment transfers.
41
● The procedure not only verifies the authenticity of

the customer's bank account but also checks
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whether the mentioned account is operative.

www.ksgindia.com
Benefits Challenges 28 % in transaction volume and value, respectively,
• Financial inclusion: Offers • Transparent and ethical between fiscal 2021 and 2023.
services that customers may business practices: There • The embedded finance market in India is expected
not be able to find are concerns about
to reach $530 billion by 2025
elsewhere, meaning that customer protection from
users can take advantage of unfair practices,
more opportunities. transparency, high fees, or International Monetary Fund Proposal to
• Streamlined or predatory lending.
“frictionless” payments: • Data privacy and security Increase IMF Quotas
Provide access to better issues: There is a risk of a News Excerpt:
payment and financial higher susceptibility to data International Monetary Fund (IMF) Executive Board
options and help breaches, fraud, and cyber
Approves a Proposal to Increase IMF Quotas.
businesses handle security threats, potentially
eroding trust.
About the news:
transactions in a simplified
way. • Inequality due to Digital • The Executive Board approved a proposal to be
• Adoption of digital Divide: Certain populations considered by the Board of Governors to conclude
payment: Diminishing the are excluded, or access is the 16th General Review of Quotas (16th Review)
dependence on cash and limited to those with
with a significant increase in quotas.
enhancing the efficiency of smartphones and internet
connectivity.
• The proposal follows the guidance from the
financial transactions.
• Contribute to economic • Connectivity issue: The International Monetary and Financial Committee
growth: Contribute to limited digital infrastructure (IMFC) at the 2023 Annual Meetings.
economic growth by and connectivity may • Approval by the Board of Governors requires an 85
fostering a thriving fintech hinder the seamless per cent majority of the total voting power.
ecosystem and supporting adoption of embedded
Proposal of Quotas:
various industries. finance.
• The proposal is centred around an increase in
● In addition, the procedure also helps ascertain
whether the account details provided belong to the quotas of 50 per cent, allocated to members in
same vendor or not. proportion to their current quotas. The quota
● The PFRDA has made 'penny drop' verification increase would enhance the IMF’s permanent
resources and strengthen the quota-based
mandatory for timely money transfers.
nature of the Fund by reducing the reliance on
Embedded Finance borrowing and thus ensuring the primary role of
News Excerpt: quotas in Fund resources.
Embedded finance has emerged as an innovative • Effect: The proposal envisages that once quota
approach to connecting with a vast pool of consumers. increases are in effect, borrowed resources
About Embedded Finance: comprising the Bilateral Borrowing Agreements and
• It is the seamless integration of financial services New Arrangements to Borrow (NAB) would be
into a traditionally non-financial platform. reduced to maintain the Fund’s current lending
• It enables customers to access financial services capacity.
within the app and in context. Importance of Quotas:
o E.g.- customers can make cashless payments • The membership has also acknowledged the
within a ride-hailing app, “buy now pay urgency and importance of quota share realignment
later” services, banking apps in ridesharing to better reflect members’ relative positions in the
platforms, integrated payment processing on world economy while protecting the quota shares of
e-commerce platforms, and insurance the poorest members, and many members would
products offered through travel sites and have supported a quota realignment now, together
services. with the proposed quota increase.
o Enables businesses in the MSME, B2C, and • An adequately resourced IMF is essential to
B2B segments to increase their customer safeguard global financial stability and respond to
lifetime value, monetize their customer base, members' potential needs in an uncertain and
and vertically scale their product offering. shock-prone world.
42
• The payment vertical within embedded finance has

undergone a substantial transformation, boasting a
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compound annual growth rate (CAGR) of 76 % and

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How does the IMF use quotas? guarantor before the appointment of the resolution
• Resource Contributions: Quotas determine the professional and imposition of a moratorium on the
maximum amount of financial resources a member assets of the personal guarantor.
is obliged to provide to the IMF. o "Interestingly, Section 96(1) of the IBC
• Voting Power: Quotas are a key determinant of imposes the rigour of moratorium upon the
alleged guarantor, automatically, upon mere
voting power in IMF decisions. Members get one
filing of the application under Section 95 of the
vote per SDR100,000 of quota plus basic votes,
Code, without any requirement of prior notice
which are the same for all members. which itself is violative of the basic canons of
• Access to Financing: Quotas determine the the principles of natural justice."
maximum amount of loans a member can obtain • Such restrictions on the liberties of a person,
from the IMF under normal access. including restrictions to discharge any debt without
• SDR Allocations: Quotas determine a member’s affording any opportunity of hearing, are not only
share in a general allocation of SDRs. ultra vires of the Constitution but also unknown in
law.
• The scheme of Section 97(5) of the Code does not
SC upholds the validity of key IBC
contemplate any alternative to the appointment of
provisions. a Resolution Professional.
News Excerpt:
The Supreme Court upheld certain key provisions of the
India inks Supply Chain pact at IPEF.
Insolvency and Bankruptcy Code (IBC) amid the claim of
News Excerpt:
several petitioners that they violate fundamental rights,
like the right to equality to those against whom India, the USA, and 12 other members of the Indo-
insolvency proceedings are initiated. Pacific Economic Framework (IPEF) have signed a
About the news: supply chain resilience agreement.
• A bench comprising Chief Justice D Y Chandrachud About IPEF:

and justices J B Pardiwala and Manoj Misra decided • The Indo-Pacific Economic Framework (IPEF)
as many as 391 petitions challenging various initiative involves 14 member countries, including
provisions of the IBC. These provisions deal with India, the USA, Australia, Japan, Fiji, South Korea,
the various stages of insolvency proceedings New Zealand, Singapore, and Thailand.
against a defaulting firm or individuals. • This framework represents 40% of the global
• Upholding the provisions to be constitutionally gross domestic product and 28% of the global
valid, the bench held that they did not suffer from trade in goods and services.
arbitrariness as contended. • The primary aim of this collaboration is to enhance
• According to the bench, the IBC cannot be held to economic cooperation and reduce dependence
operate retroactively in order to be held violative on China by strengthening supply chain resilience
of the Constitution. Thus, the statute does not suffer among member nations.
from the vices of manifest arbitrariness. • The framework is structured around four pillars:
Violative Points of Fundamental Rights as per trade, supply chains, clean economy, and fair
petitioners: economy (addressing issues like tax and anti-
• According to petitioners, "The impugned provisions corruption).
are inherently violative of the principle of natural • India has joined all the pillars except the one
justice and strike at the root of the right of concerning trade.
livelihood, right to trade and profession, and Key developments in the IPEF agreement:
also the right to equality of the petitioner under
• Supply Chain Resilience Agreement: This
Article 21 (right to life), 19(1)(g) (Right to
practice any profession), and 14 (right to agreement aims to reduce reliance on China and
equality, respectively, of the Constitution". relocate the production of critical sectors and
essential goods among member nations.
43
• According to them, none of the impugned

provisions contemplated any opportunity of • Agreement Details: The signed supply chain
Page
granting a hearing to an alleged personal agreement aims to make IPEF supply chains more
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resilient, integrated, and robust. It is expected to • However, repayment of tax concessions associated
contribute to the region's economic development as with the non-processing area will be required.
a whole. • The repayment of tax benefits will be determined by
• Implementation and Benefits: The pact will come calculating the benefits provided for the processing
into force after implementation by any five member area of the SEZ.
countries. About Processing and Non-Processing Area:
o It is expected to bring benefits like supply chain Processing Area Non- Processing Area
diversification, increased investments, deeper
integration of India into global value chains, The processing area in a • The non-processing
support for small and medium enterprises SEZ is the designated area in an SEZ refers to
(MSMEs), and a seamless regional trade space where units are the space where
established for the supporting
ecosystem.
primary purpose of infrastructure is
• Establishment of Bodies: The agreement includes manufacturing goods developed.
establishing three new bodies within IPEF to or rendering services • Activities in the non-
facilitate cooperation among partners: the Supply that contribute directly processing area are not
Chain Council, the Supply Chain Crisis Response to the economic activity directly involved in the
Network, and the IPEF Labour Rights Advisory and objectives of the core business
Board. SEZ. operations of
o The advisory board aims to promote labour manufacturing or
rights, sustainable trade and investment, and service provision.
opportunities for investment in businesses Significance of the Amendment:
that respect labour rights. • Reduction of SEZ Vacancy: The move is expected
to reduce vacancies in SEZs, making them more
appealing to businesses. After the phasing out of tax
Special Economic Zones (Fifth benefits, occupiers have become less inclined to stay
Amendment) Rules, 2023 in SEZs.
• Addressing Compliance Concerns: The
News Excerpt:
amendment addresses these concerns and is
The Ministry of Commerce and Industry has amended expected to make SEZs more attractive for
the Special Economic Zones (SEZ) Rules, 2006. businesses with no excessive compliance concerns.
About the Amendments: • Positive Impact on REITs: It is likely to have a
• The amendment permits the demarcation of a positive impact on Real Estate Investment Trusts
portion of the built-up area within an SEZ unit on a (REITs) with significant SEZ space in their portfolios,
floor-by-floor basis as a non-processing area. as the demand for such spaces may increase.
• This area may be used for setting up and operation • Harmonious co-existence: It will pave the way for
of businesses with a focus on Information a harmonious co-existence of SEZ and non-SEZ
Technology (IT) and IT-enabled services, and at such entities within a unified campus, enhancing the ease
terms and conditions as may be specified by the of doing business for corporations, developers, and
Board of Approval. investors.
• Boost economy and employment: This
• A non-processing area shall consist of a complete
progressive reform will aim to increase occupancy
floor.
within IT SEZ Parks, in turn boosting economic
• A part of a floor cannot be demarcated as a non- activity and creating more jobs.
processing area. o For Example, India’s SEZ occupancy levels are
• Demarcation of a non-processing area shall not be currently around 80%, and this amendment will
allowed if it decreases the processing area to less further elevate the attractiveness of our 20
than 50% of the total area or less than the specified million square feet of premium grade-A office
44
area. spaces.
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Special Economic Zones (SEZs): ● The increase in LFPR and the fall in unemployment
• The Special Economic Zones (SEZs) policy was led to a rise in self-employment, including unpaid
launched in April 2000. The Special Economic Zones household work and small business enterprises.
Act 2005 was passed in May 2005, and the SEZs ● Quality of employment has declined with a
Rules came into effect in 2006. decrease in wage employment, while self-
• The SEZ Act 2005 provides for the establishment, employment has increased to 57.3%.
development, and management of the SEZs for the ● There is a substantial increase in the share of
promotion of exports and matters connected women in agriculture, reaching 64.3% in 2022-23,
therewith or incidental thereto. possibly driven by pandemic-induced distress and
• SEZs in India are areas that offer incentives to economic slowdown.
resident businesses and typically offer competitive ● Government initiatives like Mudra Yojana and PM
infrastructure, duty-free exports, tax incentives, SVA Nidhi are facilitating the growth of family
and other measures designed to make it easier to enterprises, contributing to the rise in self-
conduct business. employment.
Periodic Labour Force Survey (PLFS) Dollarization

News Excerpt: News Excerpt:
The latest Periodic Labour Force Survey (PLFS) released Argentina’s president-elect had pledged to dollarise his
by the National Statistical Office (NSO) shows shifts in country during the campaign.
India's labour market dynamics and the record-low What is Dollarisation?
unemployment rate. Dollarisation refers to using the U.S. dollar in addition
Unemployment rate and rise in labour force to or in place of the country’s indigenous currency. It
participation: represents a case of currency substitution.
• The latest Periodic Labour Force Survey (PLFS), • When a country's currency loses its utility as a
released last month by the National Statistical Office medium of exchange owing to hyperinflation or
(NSO), shows the unemployment rate at 3.2 % instability and is replaced by the dollar, the country
during the 12 months from July 2022 to June 2023— is said to have been dollarized.
the lowest recorded since the NSO started the • Dollarisation is common in developing nations with
survey in April 2017. weak central monetary authority. It can be done
• Unemployment declined both in rural as well as in either by an official decree or through acceptance
urban areas. by the market participants.
• The quality of employment has declined Pros and Cons of Dollarisation:
continuously over the past few years, as wage BENEFITS CHALLENGES
employment, which is the better form of Lower Administrative Cost Loss of Monetary
Autonomy
employment, is at its lowest level since the survey
Lower Interests Costs Loss of vital national
started in April 2017. symbol
• The data also shows a steady rise in the Labour Base for a sounder financial Greater vulnerability to
Force Participation Rate (LFPR) to 57.9 % in 12 sector foreign influence
months to June 2023 from 49.8% between July 2017 Less currency volatility
and June 2018. No currency conversion
costs
• That means currently, three out of five working-age
Indians — between 15 and 59 years old are looking Efficiency gains could be considerable and will be
for work. shared commensurately by both sides, the United
Increase in self-employment States as well as the country that dollarizes.
● The share of self-employed people increased to Is dollarisation a solution to an economy?
57.3 % from July 2022 to June 2023, from 55.8 % in • Dollarisation can help control hyperinflation by
the previous 12-month cycle and 52.2 % in the breaking the vicious cycle between rising prices
45
period between July 2017 and June 2018. and rising money supply.
• If the domestic currency is replaced by dollars, the
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money supply can no longer be controlled by vested
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political interests that can raise spending for About the news:
political purposes. • The Government of India has set the Fiscal deficit
• Prices would be forced to moderate because target at 5.9% of GDP for FY24.
customers would no longer be able to access • The first tranche of Supplementary Demands for
currency, decreasing consumption demand Grants seeks approval for Rs 1.29 trillion. It is a sign
conveniently. of fiscal prudence ahead of the 2024 general
• The dollar's stable value would ensure that foreign elections.
and domestic economic agents could make long-
term plans for economic activity, which would • The second tranche of Supplementary Demands for
otherwise be impossible with a currency that rapidly Grants is expected in February 2024 during the
lost value. Budget session. This money will go to fertilizers,
food subsidies, and defence.
Goldilocks Effect • The government remains confident in meeting the
fiscal deficit target due to robust tax collections.
News Excerpt:
The RBI's Growth and Inflation forecasts indicate a FISCAL PRUDENCE SUPPLEMENTARY
Goldilocks Effect on the economy by the second quarter GRANTS
of the next fiscal year. • Fiscal prudence is the ● The additional
What is the Goldilocks Effect? recognition of the limits to grant required to
It is the premise that people are inclined to seek 'just the public spending. meet the
right amount' of something. Leveraging the • It is the responsible government's
Goldilocks Effect is fairly straightforward, but it can management of required
only work for certain businesses, the ones that can offer government finances, expenditure is
tiered options for a single product or service. emphasizing balanced called a
Application: budgets, efficient resource supplementary
allocation, and careful debt grant.
• In the context of pricing, businesses capitalize on the
management. Grants.
effect by offering three versions of a product at
• There are limits to how ● When grants
different price points: one high-end, one middle,
much spending can be authorized by the
and one low-end.
financed through higher Parliament fall
• Goldilocks Pricing is one of the effect’s more short of the
prominent applications. It’s a psychological pricing taxation, as increasing
income-tax rates is both required
strategy that rests on the concepts of expenditure, an
politically unpopular and
o Product differentiation estimate is
economically damaging.
o Comparative pricing presented as
• It involves transparent,
o Bracketing Supplementary or
accountable, and long-
Additional grants.
• Product differentiation: It is the practice of term planning to ensure
● These grants are
distinguishing certain products from others. economic stability, prevent
presented and
Businesses can only leverage the Goldilocks Effect if crises, and maintain public
passed by the
they can differentiate their products from one trust by judiciously handling Parliament before
another. expenditures, revenues, and the end of the
o This then needs to be combined with debt levels.
financial year.
comparative pricing, where businesses offer
multiple versions of a product simultaneously of
varying quality, attached to corresponding price Boost to UPI Limits for Health & Edu and
points. Regulatory Framework for Digital
Lending
Fiscal Prudence News Excerpt:
News Excerpt: The Reserve Bank of India (RBI) enhances UPI payment
Government limits additional spending to Rs 58,378 limits and proposes rules for the web aggregation of
46
crore for fiscal prudence before 2024 elections. loans and the creation of a Fintech Repository.
Page
www.ksgindia.com
About the news: SIDBI and TDB collaboration to enhance
• The RBI has made important changes to digital credit access for MSMEs
payments and lending. It increased the UPI payment
limits to pay up to Rs. 5 lakhs from Rs 1 lakh for News Excerpt:
healthcare and education. Small Industries Development Bank of India (SIDBI) and
• The enhanced limit will help consumers make UPI the Technology Development Board (TDB) formalized a
payments of higher amounts, especially for both Memorandum of Understanding (MoU) for easier
education and healthcare purposes. credit access to MSMEs involved in technology
• To ensure fairness in online loans, the RBI has also development.
proposed rules for companies that gather loan About the news:
offers from different lenders (called web-
• The agreement includes mutual referral of
aggregation of loan products).
• It also proposed creating a FinTech Repository to additional funding needs for previously funded
companies.
better understand and control the partnerships
between banks, finance companies, and FinTech • Dedicated key contacts streamline coordination for
seamless referral exchange between TDB and
firms.
o It will be run by the RBI’s Innovation Hub. The SIDBI.
• The collaboration aims to promote innovation, job
rationale behind this framework is to
understand developments in the fintech creation, and overall economic development in the
MSME sector.
ecosystem better as financial entities such as
banks and NBFCs are increasingly partnering • SIDBI's recent initiatives include launching the
MSME Economic Activity Index – Sumpoorn to
with them.
• This move is expected to bring more clarity and address knowledge gaps and support credit flow.
trust to the digital lending sector, making it safer for Small Industries Technology
people to use online financial services. Development Bank of Development Board
India (SIDBI) (TDB)
Unified Payments Interface (UPI):
• It is an instant payment system developed by the • It is a pioneer • The Government of India
development bank in the constituted the
National Payments Corporation of India (NPCI),
country that was Technology Development
an RBI-regulated entity. established solely to focus Board (TDB) in 1996, under
• It is a system that powers multiple bank accounts on the MSME sector. the Technology
into a single mobile application (of any • It is a wholly-owned Development Board Act,
participating bank), merging several banking subsidiary of IDBI 1995, as a statutory body.
features, seamless fund routing & merchant (Industrial Development • It promotes the
Bank of India) and has development and
payments into one hood.
come into existence via a commercialization of
• Growth: Since its launch in 2016, UPI has rapidly special Act in 1988; it has indigenous technology
gained popularity and currently boasts around 260 been operational since and the adaptation of
million users, with its growth forecast looking 1990. imported technology for
promising. • SIDBI was formed with the wider application.
• Global Expansion: The domestic success of UPI is aim of providing a central • The TDB is the first
unit for financing, organization of its kind
paving the way for its international expansion. India
promotion, and within the government
is the world's leading remittance market in terms of framework with the sole
development of the MSME
inflows. It has signed agreements with more than units. objective of
two dozen countries to expand UPI beyond its • It provides a huge source
commercializing the
borders. fruit of indigenous
of finance for the
research.
development, promotion,
marketing, and • The Board plays a
commercialization of the proactive role by
MSME sector. encouraging enterprises
47
to take up technology-
oriented products.
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Investor Risk Reduction Access platform ● The media coverage of Laundromat countries aims
to raise awareness about the risks associated with
News Excerpt:
money laundering, advocate for regulatory reforms,
India's stock exchanges, including the Bombay Stock
and enhance the enforcement of global anti-money
Exchange (BSE) and the National Stock Exchange (NSE),
laundering measures.
have jointly developed the Investor Risk Reduction
Access (IRRA) platform.
IRRA platform Off-Budget Liabilities
• IRRA platform has been developed to reduce risks News Excerpt:
faced by investors in the eventuality of technical The Indian government discontinued off-budget
glitches at the trading member’s end at both the borrowings in FY2022 to improve fiscal transparency. It
primary site and disaster recovery site. also intends to pre-pay the remaining Off-Budget
• Its purpose is to provide investors with an commitments.
opportunity to square off/close their open About Off-Budget Liabilities:
positions and cancel pending orders using the IRRA ● Off-Budget liabilities are debts incurred by state-run
platform in case of technical glitches or unforeseen entities to fund government programmes and
outages that render the trading member’s site subsidies outside of the regular budget.
inaccessible. ● These agencies raise funds by issuing bonds with
• It is not meant to take fresh positions or orders but higher interest rates than government securities (G-
only to cancel the pending orders. secs).
Need for IRRA ● However, because the loan's burden is not legally on
• Growing reliance on technology in the securities the Centre, the loan is not included in the national
market has led to an increase in glitches, causing fiscal deficit. This contributes to keeping the
disruptions in trading services and raising investor country's fiscal deficit within acceptable boundaries.
complaints. ● By the end of FY21, the Centre's off-budget liabilities
• Investors with open positions face the risk of being were close to Rs 6.7 trillion.
unable to close their positions during such
disruptions, especially in volatile markets.
• Existing business continuity plans of trading GIFT NIFTY
members may not always prevent disruptions, such News Excerpt:
as delays in moving to Disaster Recovery sites or GIFT NIFTY is the first cross-border initiative in
cyber-attacks. connecting India and Singapore’s capital markets.
About:
• It is a new derivatives index that was launched by the
Laundromat Countries National Stock Exchange of India (NSE) in its
News Excerpt: International Financial Services Centre (IFSC) at GIFT
The term "Laundromat" gained prominence in the news City, Gujarat.
with the exposure of a vast money laundering scheme. • GIFT NIFTY is a dollar-denominated futures
Laundromat countries contract based on the Nifty 50 index and is traded
● Laundromat countries are nations that have been on the NSE IFSC exchange. (SGX NIFTY has been
implicated in engaging in money laundering rebranded and given a new identity as GIFT NIFTY).
activities, specifically through the use of large-scale • The launch of GIFT Nifty is expected to make it easier
financial transactions to conceal and transfer illicit for foreign investors to trade in the Indian stock
funds across international borders. market. Currently, foreign investors can only trade in
● Money launderers employ a network of shell the Indian stock market through the NSE or BSE.
companies and multiple fictitious transactions to However, the NSE and the BSE are located in India,
obscure the true origin and destination of the funds. which can make it difficult for foreign investors to
● The Russian Laundromat case exposed the trade during Indian business hours.
involvement of various countries as facilitators in the
48
• GIFT Nifty is regulated by the Securities Exchange

money laundering process. Board of India (SEBI).
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Benefits- Bank, the Bank of Central African States and the
• Gift Nifty will be traded in USD US Dollar, which will Central Bank of West African States.
eliminate the foreign exchange risk that foreign ● The other Bank Governors who earned an ‘A+’ grade
investors face when trading in Nifty. in the Global Finance Central Banker Report Cards
• Gift Nifty will be traded in the IFSC, which is a tax- 2023 are Thomas J. Jordan (Switzerland) and
free zone. This means that foreign investors will not Nguyen Thi Hong (Vietnam).
have to pay any taxes on their profit from trading in
Gift Nifty therefore enhancing outreach for investors
Mera Bill Mera Adhikaar campaign
and enhancing the capital market ecosystem.
• GIFT City is a SEZ, which means that it has simplified The Government of India, in association with State
regulations. This can make it easier for foreign Governments, launched an ‘Invoice Incentive Scheme’
investors to trade in GIFT Nifty. by the name ‘Mera Bill Mera Adhikaar’ to encourage
• Operating time is 21 hours, which includes market customers to ask for invoices/bills for all purchases.
About the scheme:
timings in India, Europe, and the USA.
● This Scheme is built on a foundation of incentives
and awareness campaigns, with a multi-pronged
Financial Inclusion (FI) Index approach towards transforming consumer
The Financial Inclusion (FI) Index of the RBI stood at behaviour and fostering accountability among
60.1% for the financial year ending in March 2023, as sellers.
compared to 56.4% in March 2022, due to improvements ● It aims to bring a cultural and behavioural change in
in Usage and Quality dimensions. the general public to ‘Ask for a Bill’ as their right and
About the Financial Inclusion Index entitlement.
● FI-Index was launched in 2021 to track the process ● By facilitating consumers in obtaining and recording
of ensuring access to financial services and timely their bills, the government is actively involving
and adequate credit for vulnerable groups, such as citizens in combating tax evasion and promoting
weaker sections and low-income groups, at an honest business practices.
affordable cost.
● It is a comprehensive index, incorporating details of
banking, investment, insurance, postal, as well as
Gresham’s law
the pension sector in consultation with government News Excerpt:
and respective sector regulators. The law came into play during the economic crisis in Sri
● It was created to capture the extent of financial Lanka last year, during which the Sri Lankan central bank
inclusion across the country. fixed the exchange rate between the Sri Lankan rupee
● The index captures information on various aspects and the U.S. dollar.
of financial inclusion in a single value ranging About Gresham’s law:
between 0 and 100, where 0 represents complete ● It refers to the dictum that “bad money drives out
financial exclusion and 100 indicates full financial good.” It comes into play when the exchange rate
between two currencies is fixed by the
inclusion.
government at a certain ratio different from the
market exchange rate.
Global Finance Central Banker Report ● Such price fixing causes the undervalued currency
Card 2023 (currency whose price is fixed at a level below the
RBI Governor Shaktikanta Das has been rated 'A+' in market rate) to go out of circulation. The overvalued
the Global Finance Central Banker Report Cards 2023. currency remains in circulation, but it does not find
About Global Finance Central Banker Report Card: enough buyers.
● It is an annual publication by Global Finance since ● This theory often describes the stability and
1994 which grades the performance of central bank movement of different currencies in global markets.
governors in 101 significant countries, territories, ● Stable currencies, such as the U.S. dollar or the Euro,
can be considered good money as they circulate as
49
and regions, encompassing entities such as the

European Union, the Eastern Caribbean Central an international medium of exchange.
Page
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● Weaker currencies of less developed nations buyer, it will now range from 10-100 metric
circulate very little outside the jurisdictions of their tonnes (MT).
issuing countries and can be considered bad • Suspension of sale of grains to states: Central
money. Govt. stopped the sale of rice and wheat from the
Central pool under the OMSS to state governments,
SCHEMES also disallowing private bidders to sell their OMSS
supplies to state governments.
o However, the sale of rice under the OMSS will
Open Market Sale Scheme continue for north-eastern states, hilly states,
News Excerpt: and states facing law and order situations and
States have been looking at alternative ways of natural calamities at an existing rate of Rs 3,400
procuring wheat and rice in the aftermath of the Food per quintal.
Corporation of India’s (FCI) quantity restrictions. FCI Reason given by Central Govt. for changes
refused to allow states to procure the two food grains • The rationale given by the FCI is that the quantities
through its Open Market Sale Scheme (OMSS). have been reduced this time “to accommodate more
Open Market Sale Scheme (OMSS) small and marginal buyers and to ensure wider reach
● This scheme is started by central govt. to curb food of the scheme”.
supply-related issues. o Due to global supply chain shocks like the
o Under the Open Market Sale Scheme, the FCI Russia-Ukraine conflict and hampered
sells surplus food grains time-to-time from the production at home, retail food inflation has
central pool especially wheat and rice in the risen sharply.
open market to traders, bulk consumers, retail o FCI contends this move will allow the supplies to
chains and so on at pre-determined prices. the general public immediately.
● OMSS is operationalised by the FCI every year. o The objective behind the move is also to curb
● The FCI does this through e-auctions where open retail prices as allowing smaller bids should
market bidders can buy specified quantities at the ideally break monopolies of bulk buyers,
prices set at the start of a cycle and revised routinely. allowing more competitive bids by small buyers.
● States are also allowed to procure food grains • Another reason for the move is to meet the FCI’s
through the OMSS without participating in the food security obligations because in recent years,
auctions for their needs beyond what they get from production of agriculture crops was affected due to
the central pool to distribute to NFSA beneficiaries. untimely rains, rise in temperature in the month of
● Under the scheme, the procurement of food grains March and so on, making it incumbent upon the FCI
like wheat and paddy for the central pool happens to release its stocks “judicious manner under the
in Rabi and Kharif marketing seasons by the FCI and OMSS” so that the overall stock position is
State corporations according to procurement maintained at a comfortable level”.
estimates finalised by the government of India • The Centre has explained the discontinuation of
before the seasons. These purchases happen at the OMMS grains to the states by giving the same
minimum support price. rationale. “In order to ensure that the inflationary
● Every year OMSS is activated during the lean season, trends are kept under control while ensuring
the time between harvests, to improve and regulate adequate stock levels in the Central pool, it has been
domestic supply and availability of the two grains. It decided to exclude State governments from the
brings down their prices in the open market, ambit of OMSS”.
essentially making the scheme a measure to curb
food grain inflation.
Changes in the PLI scheme for White
Changes in OMSS
• Reduce Quantity: Recently, the Centre decided to Goods
restrict the quantity that a single bidder can News Excerpt:
purchase in a single bid under the OMSS. The central government has introduced changes to the
50
o While the maximum quantity allowed earlier rules governing the production-linked incentive (PLI)
scheme for white goods.
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was 3,000 metric tonnes (MT) per bid for a
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Changes incorporated in the PLI Scheme for white imported appliances by encouraging domestic
goods: production, thus decreasing the trade deficit.
● Shift to Cost-Plus Method: One significant ● Stimulating economic growth: Increased
alteration is the adoption of the “Cost-Plus” method production and consumption of these appliances
instead of the “Comparable Uncontrolled Price” contribute to higher GDP and create employment
method for calculating sales prices in cases of opportunities.
captive consumption or supplies to group ● International standards: The scheme encourages
companies. This shift also necessitates changes to companies to meet international quality and safety
the definition of “Arm’s length.” standards, improving the quality of white goods.
● Eligible Investments Expanded: The revised ● Better supply chain ecosystem: The growth in
guidelines now consider investments in Tool rooms white goods manufacturing can encourage the
for manufacturing Moulds and Dies as eligible development of a robust supply chain ecosystem,
under Capital Investment. This expansion broadens making India an integral part of the global supply
the scope of investment avenues for beneficiaries. chains.
● Extension for Reporting New ● Advancement of technology: To qualify for PLI
Facilities: Beneficiaries are now granted an benefits, manufacturers must invest in advanced
additional year over and above the initial two years technology, research and development, and
for reporting the establishment of an additional innovation.
manufacturing facility.
● Revised Claim Submission Date: The last date for
submission of claims and refunds of excess
Liberalized Remittance Scheme (LRS)
incentives due to discrepancies between statutory News Excerpt
compliance and records provided at the time of Outward remittances under the Liberalised Remittance
claim filing has been updated. Scheme (LRS) in the April-September quarter of the
● Administrative Ministry Site Visits: The fiscal year 2023-24 has shown growth on a year-on-year
amendment allows for site visits by the basis.
Administrative Ministry to ensure compliance with About LRS:
the scheme. • It is a foreign exchange policy initiative under the
Foreign Exchange Management Act, 1999
● Roll Over of Bank Guarantee: Bank guarantees can
(FEMA’99), introduced by the Reserve Bank of India
now be rolled over, providing flexibility to
in 2004. It intended to simplify and streamline the
beneficiaries.
process of remitting funds outside India.
● Production Linked Incentive (PLI) is a form of Working of LRS:
performance-linked incentive to give companies • The FEMA’99 states that LRS is available to all
incentives on incremental sales from products resident individuals, including minors and students.
manufactured in domestic units. It is aimed at
• The eligible citizens must have an Indian bank
account, a valid Permanent Account Number (PAN),
boosting the manufacturing sector and to reduce
and a passport.
imports.
• They can use the remitted amount for educational,
● White goods: Consumer durables or home
business, personal, or other purposes.
appliances traditionally available only in white. • Residents can avail of foreign exchange facilities
They include appliances such as washing machines, within the limit of USD 2,50,000 only, revised from
air conditioners, LED lights, stoves, refrigerators, a limit of previous USD 25,000 consistent with
etc. prevailing macro and micro economic conditions.
● This initiative is expected to significantly boost • There are no restrictions on the frequency of
domestic value addition, elevating it from the remittances under LRS.
current 15-20 % to 75-80 %. • The remittances can be made in any freely
convertible foreign currency.
51
Prohibited Items Under LRS:

Significance of white goods in the PLI Scheme:
• Remittance for any purpose specifically prohibited
● Reduce reliance on imported appliances: The PLI
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under Schedule I (like purchase of lottery

scheme aims to reduce the country's reliance on
www.ksgindia.com
tickets/sweep stakes, proscribed magazines, etc.) or ● However, not every GST-registered person can
any item restricted under Schedule II of Foreign opt for this scheme.
Exchange Management (Current Account
Transactions) Rules, 2000. Drones to Women Self-Help Groups
• Remittances for trading in foreign exchange abroad.
Scheme
• Capital account remittances, directly or indirectly, to
countries identified by the Financial Action Task News Excerpt:
Force (FATF) as "non-cooperative countries and The Union Cabinet has approved a central sector
territories" occasionally. scheme to provide drones to women self-help groups
• Remittances directly or indirectly to those entities (SHGs).
identified as posing a significant risk of committing About the scheme
acts of terrorism as advised separately by the • The scheme aims to provide drones to 15,000
Reserve Bank to the banks. selected women SHGs during the period 2023-24
Reasons for the increase in Remittances: to 2025-2026 to provide rental services to farmers
● Tax Change: The surge in outward remittances is for agricultural purposes.
likely due to the change in the LRS tax scheme. • According to the Economic Survey - 2022, India has
o During the Union Budget FY- 2023-24, the around 1.2 crore SHGs, 88% of them are all
government proposed increasing the tax women.
collected at source (TCS) on liberalized overseas • The scheme seeks to emphasize the integration of
remittances from 5% to 20% for amounts technology, women's empowerment, and
above Rs 7 lakh for all purposes except agricultural innovation.
education and medical treatment.
• Drones are being demonstrated across the country,
● Capital Inflow: This has resulted in a sharp increase
emphasizing their role in efficient fertilization, pest
in equity and debt investment and the purchase of
immovable property. control, and precision agriculture.
● Growth in international travel: International travel Key highlights:
increased by 34.38 per cent year-on-year, leading to ● Empowerment and Training: Identified clusters
increased remittances. conducive to drone usage will be targeted, and
15,000 women SHGs across states will be selected to
receive drones. Comprehensive training programs
Composition Scheme of GST
will equip members with drone piloting skills and
News Excerpt:
agricultural expertise, enabling them to provide
To lower the burden of complying with various Goods
rental services and support.
and Services Tax (GST) law provisions, a separate scheme
● Financial Support: Central Financial Assistance
under GST called the 'Composition Scheme Under
covers 80% of the drone cost, up to a maximum of
GST' was introduced by the government.
Rs. Eight Lakh will be extended to the SHGs. The
About the scheme:
remaining amount can be raised through the
● The composition scheme under GST requires
National Agriculture Infra Financing Facility (AIF),
businesses to file GST returns on a quarterly and
with an interest subvention of 3% on the AIF loan.
annual basis. This is different from the monthly
● Innovative Roles: Members of SHGs will be trained
mandatory GST return filing.
as drone pilots and technicians, facilitating not just
● It offers the benefit of paying a fixed percentage of
drone operation but also repairs and maintenance,
their turnover as a tax instead of the regular GST
bridging the gap between suppliers and SHGs.
rates applicable to various goods and services.
● Nano Fertilizer Adoption: The scheme promotes
● Individuals selling goods and having annual
the use of Nano Fertilizers like Nano Urea and Nano
turnover up to Rs 1.5 crore (Rs 75 lakh for special
DAP through drone services, facilitating efficient
category States) in a financial year can opt for a
pesticide application and fertilizer distribution.
composition scheme under GST. In the case of
● Economic Empowerment: Envisioned as a means
service providers (other than restaurants), this
of sustainable business and livelihood support, the
turnover threshold limit is fixed at Rs 50 lakh. For
52
scheme aims to enable 15,000 SHGs to earn an

restaurants, the turnover threshold limit is Rs 1.5 additional income of at least Rs.1 lakh per
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crore. annum.
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Interest Equalization Scheme • The MSME sector is essential for job creation. The
scheme is primarily intended for labour-intensive
News Excerpt:
industries.
The Union Cabinet has approved an additional allocation
• The current proposal is intended for exports by
of Rs 2500 Cr for the continuation of this Scheme till 30th
recognized tariff line merchants and
June 2024.
manufacturer exporters, as well as MSME Sector
About the scheme:
manufacturer exporters. Increased exports from
The Government of India (GoI) announced the Interest
these labour-intensive sectors and MSMEs will result
Equalisation Scheme on Pre- and Post-Shipment Rupee
in job creation in the country.
Export Credit to eligible exporters in 2015, which was
initially valid for 5 years.
• The rate of interest equalization @ 3% per annum REPORTS IN NEWS:
was available on Pre Shipment Rupee Export Credit
and Post Shipment Rupee Export Credit.
'The Impact of Disaster on Agriculture
• The scheme would not be available to merchant
exporters. Government, however, reserves the
and Food Security' Report by FAO
right to modify/amend the Scheme at any time. News Excerpt:
• Banks are required to completely pass on the benefit The report found that the frequency of extreme disaster
of interest equalization, as applicable, to the eligible events has risen significantly over the past 50 years.
exporters upfront and submit the claims to RBI for Details from the report:
reimbursement, duly certified by the external ● The report found that disaster events are becoming
auditor. more frequent and severe, and their impact is also
• The Scheme was not fund-limited and extended expected to worsen.
the benefit without any limit to all exporters. ● The year 2023 ended the warmest decade on
Recent Extensions in the Scheme: record, marked by unprecedented extreme weather
• The government of India has approved the events and large-scale disasters.
extension of the Interest Equalization Scheme for ● The 1970s saw approximately 100 disaster events
Pre and Post-Shipment Rupee Export Credit per year. In the last 20 years, that number has
(‘Scheme’) up to March 31, 2024, or till further increased to about 400 globally.
review, whichever is earlier. Impact of extreme weather events on world
• Currently, the Scheme provides an interest agriculture:
equalization benefit at the rate of 2% on pre and ● Agricultural activities and livelihoods rely heavily on
post-shipment Rupee export credit to merchant environmental conditions, natural resources, and
and manufacturer exporters of 410 identified tariff ecosystems. Globally, the agriculture sector faces
lines at 4 digit level and 3% to all MSME growing threats from hazards such as flooding,
manufacturer exporters. drought, and environmental degradation.
• The Scheme has now been made fund-limited, ● For instance, in Pakistan, exceptional monsoon
and benefits to individual exporters have been rainfalls in 2022 led to nearly $4 billion in damages
capped at Rs 10 Cr per annum per IEC (Import to the agricultural sector.
Export Code).
• The scheme shall be implemented by RBI through
various Public and non-public Sector banks that
provide pre and post-shipment credit to the
exporters.
Benefits of the Scheme
• The availability of pre- and post-shipment packing
credit at competitive rates is essential for the export
sector's international competitiveness.
53
• According to a study undertaken by IIM Kashipur,

the effect of the Interest Equalisation Scheme has
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been helpful to the country's export growth.
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● Data from 88 Post Disaster Needs Assessments Bihar, Punjab, and Haryana, impacting crops like
surveys (PDNAs) conducted from 2007 to 2022 in wheat and rice.
60 countries indicated that agricultural losses ● Landslides and glacial melting: In states such as
constituted an average of 23% of the overall impact Himachal Pradesh and Uttarakhand, climate
of disasters across all sectors. change-induced glacial melting and increased
landslides affect apples and other horticultural
produce.
Basic Animal Husbandry Statistics 2023

News Excerpt:
Basic Animal Husbandry Statistics Report 2023
comprising Milk, Egg, Meat, and Wool production was
released by the Ministry
of Fisheries, Animal
Husbandry & Dairying. Animal Husbandry:
About the report: It is the branch of
• Livestock production agriculture that deals
Region-wise impact: Asia bore the largest share of is estimated annually with animals raised for
economic losses (45%), while Africa, Europe, and the based on the meat, fibre, milk, or other
Americas displayed similar orders of magnitude. Integrated Sample products. It includes
Oceania experienced the lowest total losses. day-to-day care,
Survey (ISS)
● In absolute terms, high-income, lower-middle- selective breeding, and
outcomes, whose
the raising of livestock.
income, and upper-middle-income countries survey methodology
reported higher losses, while low-income countries is designed by ICAR-
and Small Island Developing States experienced Indian Agricultural Statistics Research Institute
lower levels. (ICAR-IASRI).
● However, when considering losses relative to • Integrated Sample Survey is the only scheme
agricultural value added, low-income countries through which considerable data, particularly on the
suffered losses more than double those of upper- production estimate of Major Livestock Products
middle-income countries on average. (MLPs) viz. Milk, Eggs, Meat, and Wool are being
Impact on Indian agriculture: generated for policy formulation in the livestock
● Loss of cropping areas: In the last six years, the sector.
country lost 33.9 million hectares of cropped area • The 2023 report is based on the data from 1st March
due to floods and excess rains and 35 million 2022 to 28th February 2023. The entire period of
hectares due to drought. one year is divided into three Seasons of 4
● The threat of mass hunger: The IFPRI Global Food months. These Seasons are:
Policy 2022, climate change and food systems,
India’s food production could drop by 16 per cent,
and the number of those at risk of hunger could be
increased by 23 percent due to climate change.
● Drop in yield of crops: Coastal regions are prone to
cyclones and flooding, which destroys rice and jute
crops in regions such as West Bengal. Also,
The estimates of 4 products, i.e. Milk, Egg, Meat, and
unpredictable monsoons have caused fluctuations
Wool, for the year 2022-23 are summarized below:
in crop yields, particularly in cash crops like cotton
1. Milk Production:
and sugarcane.
• The total milk production in the country is
● Effects on Water Availability: Reduced monsoon
estimated at 230.58 million tonnes (2022-23), an
54
rainfall, cold waves, and prolonged dry spells have

increase of 3.83% over the previous year.
affected the water availability for irrigation in UP,
• According to production data from the Food
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and Agriculture Organization Corporate

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Statistical Database(FAOSTAT), India ranks 1st • India ranks 8th in the world in terms of total
in the world in terms of total milk Meat production (Source: FAO).
production. Milk production in India has Top Meat Producing States:
registered a fifty-one per cent increase during In terms of production: Uttar Pradesh (12.20 %) >West
the last eight years. Bengal (11.93 %)> Maharashtra (11.50 %)> Andhra
Top Milk Producing States:
In terms of Production, Uttar Pradesh(15.72
%)>Rajasthan (14.44 %)>Madhya Pradesh (8.73
%)>Gujarat (7.49 %) > Andhra Pradesh (6.70 %).
Pradesh (11.20 %) > Telangana (11.06 %)
Together, they contribute 53.08% of the total milk 4. Wool Production:

production in the country. The total Wool production in the country is estimated at
2. Egg Production: 33.61 million kg, with an annual increase of 2.12% over
• The total Egg production in the country has the previous year.
been estimated to be 138.38 billion during Top Wool-Producing States:
2022-23, an annual increase of 6.77% from the In terms of Production: Rajasthan (47.98%)>Jammu &
previous year. Kashmir (22.55%)> Gujarat (6.01%),>Maharashtra
• India ranks 3rd in the world in terms of total (4.73%) >Himachal Pradesh (4.27%). They contribute
Egg production (Source: FAO).
Top Egg Producing State: In terms of Production:

Andhra Pradesh(20.13 %) >Tamil Nadu (15.58 %)>
Telangana (12.77 %)> West Bengal (9.94%) > Karnataka
(6.51 %). Together, they contribute 64.93% of the 85.54% of total wool production in the country.
total egg production in the country. Way Forward:
3. Meat Production: • This survey fulfils the need for the timely availability
• The total Meat production in the country is of reliable and updated data relating to various
55
estimated at 9.77 million tonnes, an annual livestock indicators, which will further help evolve,
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increase of 5.13% over the previous year.
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monitor, and evaluate various developmental achieving its green transition targets by 2030 and
schemes in this sector. make the net-zero goal by 2070 attainable.
• It also contributes to the stock of time series • Central banks have to influence investment
data on the production of milk, meat, egg, and decisions and the allocation of resources and credit
wool, which may be used in research and to achieve sustainability targets. This includes
policy-making. directing banks and other financial institutions to
consider climate and environmental risks through
Report on Currency and Finance 2022-23 various regulations.
News Excerpt:
The report released by the Reserve Bank of India LEADS 2023 report
highlighted that India’s total expenditure for adaptation News Excerpt:
to climate change could reach 85.6 lakh crore by 2030. LEADS (Logistics Ease Across Different States) 2023
About the Report: report, released by the Union Ministry of Commerce
● It is an annual publication of the RBI covering various and Industry, recognizes the achievements of 11 states
aspects of the Indian economy and financial system. and two union territories in enhancing logistics ease.
● The present-year theme of the report is 'Towards a LEADS initiative:
Greener Cleaner India”. LEADS was conceived in 2018 on the lines of the
● The present report focuses on the Logistics Performance Index (LPI) of the World Bank
o Challenges and opportunities of climate change but has evolved over time to suit the Indian context
for India better. This adaptation ensures that the assessment
o The role the financial sector is poised to play in aligns with the unique challenges and dynamics of the
achieving a low-carbon and climate-resilient Indian logistics landscape.
development path. ● LEADS initiative categorizes States based on their
● The present report covers four dimensions of geographic demographics into 4 categories:
climate change and assesses future challenges to Landlocked, Coastal, Northeastern regions, and
sustainable high growth in India: Union Territories.
o Unprecedented scale and pace of climate ● For grading each of these categories into three
change categories:
o Macroeconomic effects of such changes o The “Achievers” are States that have shown
o Enlist the implications for financial stability for exemplary logistics ecosystems with exceptional
the same infrastructure and transparent regulatory
o Policy options to mitigate climate risks. processes.
Key Highlights of the Report: o The “Fast Movers” are States that are moving
• To achieve net zero emissions by 2070, India needs towards becoming Achievers by notifying
to increase its use of renewable energy and should progressive policy and legislative initiatives
aim for renewables to account for 80% of its energy along with new infrastructure projects.
mix by 2070-71. This would require an accelerated o The “Aspirers” – States that have initiated their
reduction in the energy intensity of GDP by about journey towards logistics ease and excellence by
5% annually. adopting national best practices to improve
• India needs to spend 2.5% of GDP annually till 2030 further their contribution towards India's
to address the infrastructure gap caused by climate emerging position as a global manufacturing
events. This requires policies that help in mobilizing and logistics hub.
adequate resources and reallocating current Performance Highlights from LEADS 2023:
resources to contribute effectively to India’s net- Achievers Fast Movers Aspirers
zero target.
• Public sector banks are more vulnerable to climate- Coastal Andhra Kerala, Goa, Odisha,
related financial risks than private sector banks. Group Pradesh, Maharashtra West Bengal
56
• Only a balanced policy intervention can ensure Gujarat,

progress across all policy levers and, help India in
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Is Indian Debt sustainable?
Karnataka,
● Middle of the rank: India falls in the middle of the
Tamil Nadu
ranks of indebted countries than the debt-heavy US
or Japan, but worse than comparable emerging
Landlock Haryana, Madhya Bihar, economies.
ed Group Punjab, Pradesh, Chhattisgarh,
o In 2020, total liabilities of the Centre and states
hit an all-time high of 89.3% of GDP, mainly due
Telangana, Rajasthan, Himachal
to central spending on COVID-19 relief. It
Uttar Uttarakhand Pradesh,
declined in the following years but remains
Pradesh Jharkhand
around 84% of GDP, which is fairly high for an
emerging economy.
North- Assam, Arunachal Manipur,
● Long tenure and fixed rate coupons: India’s public
East Sikkim, Pradesh, Meghalaya,
debt is dominated by loans with long tenure and
Group Tripura Nagaland Mizoram fixed rate coupons. Longer tenures are known to
reduce rollover risk.
Union Chandigarh, Andaman & Daman & Diu/
Territori Delhi Nicobar, Dadra & Nagar
es Rollover risk is a risk associated with the refinancing of
Lakshadwee Haveli, Jammu
debt. It is commonly faced by countries and companies
p, & Kashmir,
when a loan or other debt obligation (like a bond) is about
Puducherry Ladakh
to mature and needs to be converted (rolled over) into new
debt.
Rise in Global Debt: Institute of
International Finance (IIF) Report ● Low share of floating rate debt: The low share of
News Excerpt: floating rate debt (5.6% of central government debt
(March 2021) reduces interest rate risk.
As per this report, Global debt rose to an all-time high of
o US dollar-denominated debt remained the largest
$307 trillion by the end of June 2023. Noticeably, Global
component of India's external debt, with a share of
debt has only risen by about $100 trillion over the last 54.4 percent in end-June 2023, followed by debt
decade. denominated in the Indian rupee (30.4 percent),
What is global debt? and the rest with SDR (5.9 percent), Yen (5.7
Global debt refers to the borrowings of governments, percent), and the Euro (3.0 percent).
private businesses, and individuals. Governments ● Debt mainly in rupees: India's debt is mainly in
borrow to meet various expenditures they cannot meet rupees, which reduces its currency risk. It also
through tax and other revenues. Governments may also explains why the sharp rupee depreciation in 2022
borrow to pay interest on their borrowed money to fund did not result in ballooning interest payments.
past expenditures. The private sector borrows ● GDP growth higher than borrowing: India’s GDP
predominantly to make investments. growth has usually been higher than the
State of Global Debt: government borrowing rate.
● As per IMF, Global public debt has tripled since the Thus, India’s debt is considered sustainable, meaning it
mid-1970s to reach 92 percent of GDP (or just above is expected to meet its current and future debt
$91 trillion) by end-2022. obligations without default.
● More than 80% of the rise in debt in the first half of Causes for rising global debt:
2023 has come from advanced economies such as ● Rising interest: During the first half of 2023, total
the U.K. and the U.S.A. global debt rose by $10 trillion amid rising interest
● Among emerging markets, the biggest rise came rates, which were expected to affect demand for
from China, India, and Brazil. loans adversely.
● The US ($ 30.1 trillion) owes as much money as the ● Rising money supply: A rise in debt levels over
next four countries with the highest debt, including time is expected since the total money supply
China ($14 trillion), Japan ($10.2 trillion), France ($3.1 usually rises each year in countries across the globe.
57
trillion), and Italy ($2.9 trillion). ● Economic recession: According to the World Bank,
the world may be heading towards a global
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recession in 2023. Government spending typically

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increases to stimulate economic growth and provide ● Manage exchange rates: To ensure
relief, leading to higher debt levels. competitiveness in international trade and to
● Budget deficits: A budget deficit occurs when the minimize the risk of currency devaluation, it is
government spends more than it collects in important to manage the exchange rates carefully.
revenue. To cover these deficits, they issue bonds ● Assistance from Global Agencies: It is vital to
and accumulate debt. encourage international financial institutions such as
o For example, the United States has consistently the IMF and World Bank to provide financial
run budget deficits, resulting in a significant assistance to heavily indebted and vulnerable
national debt. economies.
● Currency Devaluation: Countries experiencing ● Responsible fiscal policies: Responsible fiscal
currency devaluation might see their debt levels rise policies should be adopted by the government,
when their debt is denominated in foreign which includes reducing budget deficits during
currencies. periods of economic growth to build fiscal buffers.
Implications of rising global debt: ● Monitor debt sustainability: Monitor debt
● Unsustainability: Rising global debt levels usually sustainability, and regular assessment is needed to
lead to concerns about the sustainability of such ensure that debt levels remain manageable relative
debt. It passes on the debt burden to future to GDP and export earnings.
generations. ● Other suggestions: Boost alternatives to
● Default risk: Rising interest rates can increase borrowing, manage borrowing and lending better,
pressure on governments and force them to either increase accountability to improve the behaviour of
default outright or inflate away their debt. borrowers & lenders, and introduce better ways of
managing shocks and crises.
Inflating away public debt:
Inflating away public debt refers to the idea that a
government can reduce the real value of its debt by
World Energy Employment 2023 Report
creating inflation. The theory is that as prices rise, the News Excerpt:
value of the debt, which is fixed in nominal terms, will The second edition of the World Energy Employment
decrease in real terms. (WEE) report has been published by the International
Energy Agency (IEA).
About World Energy Employment (WEE) Report:
● Austerity Measures: The governments may • The WEE 2023 Report builds on national labour
implement austerity measures to control debt by statistics to provide a more comprehensive
cutting public services and raising taxes, which can estimate of today's energy workforce and a forward
be economically challenging. view to 2030.
● Crowd out the private sector: High government • The report considers direct jobs related to the
debt levels can crowd out private sector investment activities outlined, including upstream roles
by absorbing available funds in the financial correlated to energy.
markets, affecting economic growth. • The report tracks the evolution of the energy
● Downgrading by credit rating agencies: Credit workforce from before the pandemic to the present
rating agencies may downgrade a country's through the global energy crisis.
creditworthiness if its debt levels become • The report presents a thorough inventory of energy
unsustainable, leading to higher interest rates and employment, including estimates of labour force
high borrowing costs. size and distribution across regions, industries, and
How to properly and sustainably manage Debt? technologies.
● Adopt best practices: Adherence to international • WEE 2023 also includes, for the first time,
sovereign debt issuance and management employment data for the extraction of important
principles. minerals such as copper, cobalt, nickel, and lithium.
● Debt restructuring: When there is a risk of default, Highlights of the Report:
58
it is better to consider debt restructuring or • According to a global report from the International
rescheduling to provide relief and ensure Energy Agency (IEA), clean energy has exceeded
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sustainability.
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traditional fossil fuel jobs (32 million) for the first 'Hidden Streams: Linkages Between Illicit
time in 2021, with 35 million jobs available.
Markets, Financial Flows, Organized
• The report shows that clean energy jobs are
steadily maintaining the lead and growing at more Crime, and Terrorism’ Report
than 3.6 times the rate of fossil fuel jobs. News Excerpt:
• The report said that clean energy sectors added A recent FICCI (Federation of Indian Chambers of
4.7 million jobs globally, while fossil fuel jobs Commerce & Industry) Report based on data from
recovered more slowly after layoffs in 2020 and international agencies states that the impact of India's
remain around 1.3 million below pre-pandemic illicit financial flows works out to around 5 per cent of
employment levels. its GDP.
o However, new opportunities in clean energy About Illicit Trade:
outweigh job losses in fossil fuels. ● Selling of goods in violation of
• China saw the greatest increase in clean energy national/international laws, which are meant to
job growth from 2019 to 22 and the greatest cover illegal goods due to their characteristics, as
decrease in fossil fuel employment, reflecting the well as those that contravene laws by how they are
sheer magnitude of its energy sector. produced, distributed, marketed, labelled, identified,
• China (51 percent), India (27 percent), and certified, or sold.
Indonesia together accounted for nearly 85 ● Illicit trade can occur both in black markets and in
percent of all coal supply jobs worldwide in 2022. legitimate markets.
o These three countries' coal mining is less ● The illegal economy in India has an overall score of
mechanized than in advanced economies. 6.3 in India, higher than the average score of 5 of
• Solar photovoltaic (PV) cells, wind, electric other 122 countries. In the organized crime
vehicles (EV), battery production, heat pumps, segment, India has a lower score of 4.3 against the
and essential mineral mining have accounted for average of 5.2.
more than half of the job increase in clean energy Causes of Illicit Trade in India:
since 2019. ● Demand: Demand for banned or restricted goods
India’s Status in World Energy Employment: such as narcotics, wildlife products, and
• In India, employment in the fossil fuel sector counterfeit pharmaceuticals fuels illicit trade.
increased above pre-pandemic levels in 2019. ● High taxes: Products like tobacco, alcohol, gold,
Conversely, the country generated the fourth- and luxury goods are taxed highly in India, leading
highest number of new clean energy jobs. to smuggling and illicit production.
• In 2019-22, India and West Asia were the only major ● Widespread corruption: Corruption among
regions to witness increases in clean energy and government officials and law enforcement
fossil fuel employment. agencies facilitates illicit trade.
• Overall, India has the third-highest number of ● Poverty: Poverty and Unemployment can drive
energy workers, trailing only China and the Asia- people to engage in illegal activities to make a
Pacific area. living.
● Weak law enforcement: Particularly in remote or
About IEA: border areas of our neighbours like Myanmar,
It was established in 1974 under the Framework of the Bangladesh, Bhutan, Nepal, and Pakistan makes it
Organisation for Economic Cooperation and
easier for illicit trade to flourish.
Development (OECD) to ensure the security of oil
supplies.
India is not a member but an associate country.
The IEA was created in response to the 1973-1974 oil
crisis when an oil embargo by major producers pushed
prices to historic levels and exposed the vulnerability of
industrialized countries to dependency on oil imports.
59
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● E-commerce platforms: In recent years, "Policies for Crypto-Assets" at the request of the
counterfeit trade conducted through E- Indian G20 Presidency.
commerce platforms has played an increasingly About “Policies for Crypto-Assets” Paper:
important role ● The paper sets out a roadmap towards a
in shaping illicit Forms of Illicit Trade in India: coordinated policy response for crypto-assets.
trade. • Human & Wildlife Central bank digital currencies (CBDCs) are not
Impacts of Illicit Trafficking within the scope of this paper.
Trade: • Illegal Arms & Drug Trade ● The paper recommends that Crypto assets should
● Economic • Money Laundering not be granted official currency or legal tender
Losses: A • Counterfeit products
status, but it has also argued against an outright
substantial blanket ban on crypto assets.
• Smuggled items
economic loss ● Potential benefits of Crypto-assets include cheaper
• Illegal alcohol
takes place to and faster cross-border payments, increased
the economy financial inclusion, greater portfolio diversification
and the government due to illegal trade. and operational resilience, increased transparency
● Undermine legal businesses: Counterfeit of illicit and traceability of transactions.
products such as alcohol and cigarettes can What is cryptocurrency?
undermine the legitimate alcohol and tobacco ● A cryptocurrency is a digital or virtual currency
industries. secured by cryptography, which makes it nearly
● Public health issue: Counterfeit products such as impossible to counterfeit or double-spend. Its
pharmaceuticals and substandard medical devices defining feature is that they are generally not
pose severe health risks. issued by any central authority, rendering them
● Security threats: Illicit trade can be linked to theoretically immune to government interference or
organized crime, terrorism financing, and other manipulation. They are by definition borderless and
security threats. For example, smuggling arms and require international collaboration to prevent
ammunition across India's borders can pose
regulatory arbitrage.
significant security challenges.
Legality of cryptocurrencies in India:
● Ecological consequences: Illicit trade in wildlife
● Neither the government nor the central bank, the
products, such as ivory and exotic animals, threatens
biodiversity. Reserve Bank of India (RBI), has recognized
● Social issues: The availability of cheap, illicitly cryptocurrencies.
produced alcohol and drugs can contribute to ● In the Union Budget 2022, the government of India
alcoholism, drug abuse, and related health announced a 30% tax on gains from
problems. It also damages the livelihoods of local cryptocurrencies and a 1% tax deducted at
communities dependent on tourism. source.
● Impact on SDG goals: From smuggling, Recommendations of the paper:
counterfeiting, and tax evasion to the illegal sale or ● Safeguard Monetary stability: Direct connections
possession of goods, services, humans, and wildlife, between crypto-assets and systemically important
illicit trade is compromising the attainment of the financial institutions have been limited but their
UN SDGs in significant ways. increased adoption, can hamper monetary stability.
● Undermine the intellectual property rights: Countries should also avoid holding crypto assets in
Counterfeit goods undermine the intellectual
official reserves due to the volatile nature of their
property rights of legitimate creators and
value.
innovators.
● Safeguard Financial stability: If interconnections
between crypto-asset activities and the traditional
Crypto Can't Be Legal Tender: IMF-FSB financial system were to increase, the spill-over
Paper effects may impact important parts of traditional
News Excerpt: finance. They could amplify existing vulnerabilities
The International Monetary Fund and the Financial and pose new risks to global financial stability.
60
Stability Board have jointly developed a paper titled ● Fiscal and Exchange Rate Risk: Outlining the fiscal
risks, the synthesis paper said that if crypto assets
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were granted official currency or legal tender status,

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government revenues could be exposed to an indication of the evolving preferences of
exchange rate risk. borrowers and lenders.
● Safeguard monetary sovereignty: An effective • According to the report, Of the 14,000 newly
Monetary-Policy Framework (MPF) safeguards the founded start-ups between 2016 and 2021, close
monetary sovereignty of any country. The to half belonged to the fintech industry.
transmission of monetary policy would weaken if o Fintech lending is projected to exceed
firms and households prefer to save and invest in traditional bank lending by 2030.
crypto-assets that are not pegged to the domestic • As the sector grows, customer needs and
fiat currency. The borderless nature of the crypto- preferences for digital financial services, paired with
assets ecosystem limits the effectiveness of better accessibility, would be the major factors for
individual national regulation. fintechs to rise above traditional bank lending.
● Guard against excessive capital flow volatility: Concerns:
Policymakers should guard against excessive capital • The CAFRAL report highlighted concerns such as
flow volatility by taking steps such as clarifying the usurious interest rates, unethical recovery practices,
legal status of crypto assets. The paper has and data privacy issues, among others, in the
cautioned that if capital flow management measures backdrop of the rapid growth in digital lending.
become less effective, jurisdictions may need to • Borrowers are often not aware of the total costs
consider greater exchange rate flexibility, balancing of borrowing.
the three competing objectives of the Impossible o Information on the charges is not
Trinity of monetary autonomy, exchange rate communicated to them upfront.
stability and free capital flows. • Another concern is many fake/illegal apps in the
● Amplified macro-financial risks for emerging marketplace.
and developing economies: They may face o Users downloading a lending app cannot verify
amplified macro-financial risks from crypto assets whether it is legal or not.
due to a less developed tax framework, large o Moreover, there are many instances of third
unbanked population, and larger cross-border parties harassing borrowers regarding the
transaction costs. Thus, it is necessary to clarify the recovery of loans and bothering consumers at
financial law application and treatment of crypto- odd hours and by using physical and violent
assets, where necessary. means.
● Security concerns: The FSB and IMF have also
drawn attention towards money laundering,
terrorist financing, and the proliferation of
AGRICULTURE:
weapons of mass destruction risks associated with
virtual assets. The report has asked countries to National Mission for Edible Oils
identify and take appropriate steps to manage and News Excerpt: Mega plantation drive organized by
mitigate those risks, including the adoption of states and oil palm processing companies under the
Financial Action Task Force (FATF) standards. National Mission for Edible Oils- Oil Palm (NMEO-OP).
About:
India Finance Report- CAFRAL It is a centrally sponsored scheme under Ministry of
Agriculture and Farmers Welfare. It aims to enhance
News Excerpt:
the edible oilseeds production and oils availability by
The Centre for Advanced Financial Research and
harnessing Oil Palm area expansion, increasing crude
Learning (CAFRAL) recently published a report that said
palm oil production and to reduce import burden on
fintech lending was poised to exceed traditional lending
edible oils. It has a special focus on the Northeast region
by 2030.
and the Andaman and Nicobar Islands.
Key points of the report:
Targets:
• Fintech lending is set to surpass traditional
● It aims to increase the oil palm production area to
lending by 2030 for mid-small income.
10 lakh ha. and boost the Crude Palm Oil production
61
• This projection was a testament to the growing

to 11.20 lakh tonnes by 2025-26.
influence of technology in the financial sector and
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● Increase consumer awareness to maintain vitamin B12. It also revealed a considerable rise in
consumption level of 19.00 kg/person/annum till haemoglobin levels.
2025-26. About Food Fortification:
● Strategy for implementation include increasing ● It refers to a process in which in order to boost the
production of seedlings by establishment of seed nutritional content of staple foods such as rice, milk,
garden, nurseries of oil palm. It also includes and salt, important vitamins and minerals such as
Improving productivity and increasing drip irrigation iron, iodine, zinc, Vitamin A & D are added.
coverage under oil palm, diversification of area from ● These nutrients may or may not have been present
low yielding cereals crops to oil palm, inter-cropping in the food prior to processing.
during gestation period of 4 years. Price assurance About Tea Fortification:
to the oil palm farmers for the FFB (fresh fruit ● According to the new study, fortifying tea with
bunches)- known as the Viability Price (VP). folate and vitamin B12 may help counter anaemia
● Andhra Pradesh, Telangana, and Kerala are major and neural tube defects (NTD) in Indian women
Oil palm growing States and account 98% of total because tea is the most often consumed beverage
production. in India.
● The majority of Indian women have inadequate
dietary folate and vitamin B12 intake, which
Direct-Seeding Method contributes to anaemia and the high frequency of
News Excerpt: The direct-seeding method gains folate-responsive neural tube defects (NTDs) in
currency in India's paddy-growing regions. India.
About: ● Both vitamin B12 and folate are required for the
● Direct seeding is a crop establishment system body's creation of red blood cells.
wherein rice seeds are sown directly into the field, as ● Vitamin B12 is required for normal folate absorption
opposed to the traditional method of growing and utilization in the body; folate shortage can result
seedlings in a nursery, then transplanting into in severe birth defects (NTDs).
flooded fields. ● Neural tube abnormalities occur when the neural
● There are three methods of planting crops by direct tube, which eventually becomes the brain, spinal
seeding: broadcast, hill, and drill. cord, and surrounding tissues, does not close
● It involves sowing pre-germinated seeds directly properly during foetal development.
into the soil using specialized equipment. Related in News: Many planters have urged the
● This method is beneficial for crops like rice and government to immediately intervene and take
wheat, which are commonly cultivated in India. appropriate steps to control the Tea Mosquito Bug
Advantages:
(Helopeltistheivora) (TMB) problem in the tea
● No significant reduction of yield under optimal
plantations in India.
conditions. About
● Savings on irrigation water by 12-35% under ● The Tea Mosquito Bug is a sap-sucking insect
efficient water management practices. that primarily infests tea bushes, particularly the
● Cost savings as it eliminates the need for manual young leaves and buds. It belongs to the Miridae
transplanting, thus farmers can save time and labor family and has a distinctively elongated body
expenses. Reduces cultivation time, energy shape.
● It also reduces the risk of transplant shock and ● Tea Mosquito Bugs extract sap from the tender
improves crop establishment. leaves and shoots, causing damage that results in
● It allows for better fertilizer management as the the withering and deformation of tea leaves, and
nutrients can be directly applied to the sown area the infested leaves exhibit characteristic silvering
● Faster maturation of crops.
or bronzing.
● Lower GHG emissions
Economic and Social Implications
• It reduces crop yield and quality, affecting their
Tea fortification income and livelihoods.
62
News Excerpt: A recent study on 43 women in • Its feeding activity causes damage to the leaves,
Maharashtra reported a significant rise in Folate and
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resulting in a decrease in tea quality. Infested

Vitamin B12 levels after fortifying tea with folate and
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leaves may show silvering or bronzing, affecting Confederation of Indian Textile Industry (CITI) and the
the appearance and final taste. Cotton Association of India (CAI).
• Tea growers may resort to the use of chemical About:
insecticides to control Tea Mosquito Bug • The theme is “Cotton Value Chain: Local
populations. These chemicals can have negative Innovations for Global Prosperity,” reflecting a
effects on the environment, including the shift from economic considerations to ecological
potential contamination of water sources, soil sustainability.
degradation, and harm to non-target organisms. • It aims to serve as a platform for sharing innovations,
• Infestations of the Tea Mosquito Bug can benchmarks, good practices, and experiences across
necessitate changes in farming practices. This the globe on productivity, climate resilience, and
leads to increased labour and production costs. circularity for a vibrant cotton economy.
• India has the largest area under cotton cultivation
and is currently the second-largest global producer,
Saffron Production: Red Gold representing about 25% of the world's area under
News Excerpt: cultivation.
Saffron production has dwindled in India. • Maharashtra has the highest area under cultivation
About Saffron: (41.2 lakh ha), followed by Gujarat (27.1 lakh ha) and
• It is derived from the crocus plant. Telangana (17.9 lakh ha), accounting for 72% of the
• The deep-red threads, called stigma, are removed total cotton acreage in the country.
from between the crocus petals and dried to form • Launching the 'Kasturi Cotton Bharat' brand marks
Saffron. India's foray into providing complete end-to-end
• Around 90% of India's saffron production comes traceability and transparency solutions using
from Kashmir, where it has been grown for Blockchain technology.
centuries. About the International Cotton Advisory Committee
• It can take between 2,00,000 and 3,00,000 flowers to (ICAC):
produce just 1 kg of Saffron. • It is an intergovernmental UN-recognized body of
• It is a highly labor-intensive industry where each cotton-producing and consuming nations.
process, from planting the corms, plucking the • It was formed in 1939.
flowers, and gently removing the red stigmas from • India, along with Brazil, Egypt, France, Sudan, and
the flowers to the final grading, is meticulously the USA, is one of the founder members of this
carried out by skilled workers with decades of forum.
experience in the trade. • The Plenary Meeting of ICAC is held annually in the
Factors leading to lower production of Saffron: member countries of ICAC at their invitation.
• Rains, higher temperatures, and snowfall have o This provides a forum for discussions on
become erratic and uncertain, and thus, climate international issues of importance to the World
change is creating havoc for saffron fields. Cotton industry.
• The amount of land devoted to saffron o It provides an opportunity for the industry and
production has reduced in the country. the government leaders from cotton-producing,
• The expansion of towns and villages onto saffron consuming, and trading countries to deliberate
fields and the lack of investment in irrigation and on matters of mutual concern.
training for farmers are also responsible.
India becomes the chair of the

International Cotton Advisory International Sugar Organization (ISO)
Committee (ICAC) for 2024
News Excerpt:
News Excerpt: In its 63rd council meeting, the
The Ministry of Textiles, Government of India hosted the
International Sugar Organization (ISO), an apex body
81st Plenary Meeting of the International Cotton
for sugar and related products headquartered in
63
Advisory Committee (ICAC) in Mumbai, in association

London, has announced India as the organization's chair
with the Cotton Corporation of India Limited (CCI), the
for 2024.
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International Sugar Organization (ISO):

www.ksgindia.com
● ISO is the unique intergovernmental body ● Additionally, horticulture extends to activities like
devoted to improving conditions in the world's plant preservation and the restoration of
sugar market through Debate, Analysis, Special landscapes, as well as arboriculture, which focuses
Studies, Transparent Statistics, Conferences, and on the care of ornamental trees and lawns.
Workshops. Significance of horticulture in India:
● It has a proactive attitude to include ethanol ● Rural development: It provides a way to generate
from sugar crops. During the mid-90s, it helped to income and employment, particularly for women
promote the increasing role of biofuels. and the marginalized sections of society.
India’s Sugar Industry: ● Source of foreign exchange: It is also an important
• India is the largest consumer and largest producer source of foreign exchange for India, with a
of sugar in the world. significant portion of the country’s horticultural
• India’s sugar trends undeniably affect the world produce being exported to other countries.
market, with about 15% share in global sugar ● Food and nutrition security: Horticultural crops,
consumption and about 20% sugar production. such as vitamins and minerals, play a vital role in
• With Brazil in the Western Hemisphere, India is the providing food and nutritional security.
market leader in the sugar industry in the Eastern Challenges:
Hemisphere. ● Post-harvest losses: The post-harvest period refers
to the time from when the food is harvested until it
Rise in Horticulture Output reaches retail markets for consumption. This time
lag leads to significant losses in the quantity and
News Excerpt:
quality of the produce. In 2022, India lost about 5–
India's horticulture production is estimated to have risen
13% of its fruits and vegetables between
annually by 1.37 % to 351.92 million tonnes in 2022-23
harvesting and consumption.
due to better productivity.
Status of Horticulture in India: ● Logistical issues: India's inadequate cold storage &
● It contributes around 30.4% to GDP while using only warehousing, rail, road, and logistics infrastructure
13.1% of the gross cropped area, making it a impacts the transport and storage of horticultural
significant player in India's agricultural growth. products.
● The productivity of horticulture has increased ● Market Access: Lack of efficient marketing
significantly from 8.8 tonnes per hectare (TPH) in channels challenges reaching consumers and
2001-02 to 12.1 TPH in 2020-21. export markets.
● India has emerged as a world leader in producing ● Biotic Stress: The states in India face pest and
various fruits like mango, banana, guava, and disease challenges due to their unique agro-
papaya. It is the second-largest producer of fruits ecological conditions. E.g.- Pests like the Assam tea
and vegetables. mosquito bug and diseases like blister blight
● Among the new crops, kiwi, gherkins, kinnow, date affect tea and other horticultural crops.
palm, and oil palm have been successfully ● Shifting Climatic patterns and water crisis: The
introduced for commercial cultivation in the horticultural crops are susceptible to climate
country. conditions. Erratic monsoons, extreme weather
● Bangladesh, UAE, Nepal, Netherlands, Malaysia, Sri events, and water crises in west, central, and parts
Lanka, the UK, Oman, and Qatar are India’s major of peninsular India result in crop failures and
export destinations for fresh fruits and vegetables. reduced yields.
What is Horticulture?
● Horticulture is a field of plant agriculture focusing Nutrient-based subsidy
on garden crops such as fruits, vegetables, and
News Excerpt:
ornamental plants. Cabinet approved nutrient-based fertilizer subsidy for
● This encompasses the growth of a wide range of the Rabi season 2023-24
items, such as fruits, vegetables, nuts, seeds, herbs, About:
64
sprouts, mushrooms, algae, flowers, seaweeds, and ● The Union Cabinet approved Rs. 22,303 crore F
non-edible plants like grass, ornamental trees, and subsidies on P&K (Phosphorus and Potassium) i
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decorative plants. fertilizers for the current Rabi season to ensure g

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farmers continue to get soil nutrients at reasonable address pollution issues in the National Capital
rates despite high global prices. Region.
● The Centre will provide farmers with 25 ● The Pusa-44 variety of paddy and "the period in
grades/types of P&K fertilizers at subsidized prices which it is grown", i.e. its extended maturation
through fertilizer manufacturers/importers. period, contribute to the problem of stubble
● The current NBS Policy covers 25 grades of P&K burning.
fertilizers, namely DAP, MAP, TSP, MOP, ● The Indian Agricultural Research Institute (IARI) has
Ammonium Sulphate, SSP, PDM, and other 18 developed an improved rice variety called Pusa-
grades of NPKS complex fertilizers. 2090 as an alternative to Pusa-44.
● The revised rates are lower than what was approved ● Pusa-2090 offers similar high yields to Pusa-44
for the kharif season. The Union Cabinet had but matures in a shorter period, potentially
approved a Rs 1.08 lakh crore fertilizer subsidy for reducing the need for stubble burning.
the 2023-24 Kharif season. What is Pusa-44? What is Pusa-2090?
● The Nutrient-Based Subsidy Scheme governs the
• Pusa-44 is a long-duration • It is an improved
subsidy on P&K fertilizers.
rice variety developed in version of Pusa-
What is Nutrient-based subsidy (NBS)?
1993 by the Indian 44 that yields
● The NBS Policy implied that subsidies would be
Agricultural Research just as much and
fixed for each fertiliser nutrient. It has been
Institute (IARI) that takes matures in only
instrumental in ensuring the availability of essential
155-160 days to mature. 120-125 days.
nutrients to farmers at subsidized prices since 1 April
• The crop is transplanted in • It is a cross
2010.
mid-June and is ready for between Pusa-
● Based on the nutrients (N, P, K&S), the fertilizers
harvesting only towards 44 and CB-501,
are provided to the farmers at the subsidized rate
late October. Since that an early-
under NBS.
leaves little time for field maturing
● The government has now approved the revision in
preparation to sow the Japonica rice
NBS rates to provide 25 grades of P&K fertilizers to
next wheat crop, ideally line.
farmers during the rabi and kharif seasons.
before mid-November, • It is not only
● It will ensure the availability of diammonium
farmers resort to burning early-maturing
phosphate DAP and other P&K fertilizers to farmers
the standing stubble and but also
at subsidized, affordable, and reasonable prices
loose straw that remains contributed to a
during the Kharif season.
after harvesting. stronger stem
● This will enable farmers to access essential fertilizers and produced
• With Punjab facing severe
necessary for their agricultural activities. more grains per
groundwater depletion
The objective of NBS:
and the availability of panicle (grain-
● To ensure the balanced application of fertilizers bearing ear-
short-duration paddy
● To improve the growth of the indigenous fertilizer heads).
varieties, the government
industry
aims to conserve one
● To contain the subsidy bill
month of irrigation
● To leave open MRP to be fixed by fertilizer
water by banning the
manufacturers/importers at a reasonable level.
variety and shifting to
Pusa-2090.
Pusa-2090 to replace Pusa-44
News Excerpt: Expanding cultivation of GI-tagged
A short-duration rice variety called Pusa-2090 can Onattukara Sesame
replace Pusa-44.
News Excerpt:
About:
Efforts are being made to expand the cultivation of GI-
● The Supreme Court has directed the Punjab,
tagged Onattukara sesame.
65
Haryana, Uttar Pradesh, and Rajasthan governments

to stop crop stubble burning immediately to
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www.ksgindia.com
About the scheme: Agri Stack Project
• The Kerala government has launched a financial
News Excerpt:
incentive scheme for farmers to grow sesame on
India has launched the Agri Stack project to promote
fields and homesteads to increase the area under
digital agriculture nationwide.
sesame cultivation.
About:
• The seeds can be procured at the market price
● Twenty-three States have formed Steering
from government shops.
Committees to oversee the implementation of Agri
• It will also allow farmers and groups to use the
Stack.
workforce of Thekkekara Karshika Karma Sena and
● 22 States have provided Application Programming
a tractor for field preparation and other activities.
Interfaces (APIs) to verify farmer land records.
Onattukara Sesame:
● States like Odisha, Karnataka, and Maharashtra are
• The sesame seeds grown in the Onattukara region
making concerted efforts to digitalize farmer details,
have exceptional medicinal benefits due to their
land records, crop surveys, and scheme delivery.
high levels of Vitamin E and antioxidants.
● The International Finance Corporation has outlined
• They also contain oleic, linoleic, and palmitoleic
dimensions for a toolbox design to facilitate the
acids, essential for maintaining good health.
transition to digitalizing the agricultural
• In addition to the traditional Ayali variety, farmers ecosystem.
in the region are also growing other varieties, such ● Farmers have concerns about sharing extensive farm
as Kayamkulam-1, Thilak, Thilathara, and data due to privacy issues, which the Digital Personal
Thilarani. Data Protection Bill 2023 is expected to address.
Geographical Indication (GI) tag:
About Agri Stack Project:
● It is a status that the government gives to products
● Agri Stack is the digital foundation being set up by
that correspond to a specific geographical
the government to make it easier to bring various
location or origin.
stakeholders together to improve agriculture in
● It helps identify the product's source as part of
India and enable better outcomes and results for the
certification that it possesses certain qualities and is
farmers by using data and digital services.
made according to traditional methods or its
● It is an effort to bring together high-quality data
geographical origin.
and make it readily available to the stakeholders that
● GI tag can be used for any manufactured product,
need it so that they can create new services using
agricultural, food, or handicraft.
the data.
● India enacted The Geographical Indications of
● Evolved from the thinking of the InDEA 2.0
Goods (Registration and Protection) Act, 1999
Architecture by MeitY, Agri Stack is being built by
● Laws and treaties covering GIs are administered by:
the Ministry of Agriculture & Farmers Welfare.
o World Intellectual Property Organisation
● It aims to make it easier for farmers to access
(WIPO)
cheaper credit, higher-quality farm inputs,
o The World Trade Organization’s Agreement on
localized and specific advice, and more informed
Trade-Related Aspects of Intellectual Property
and convenient market access.
Rights (TRIPS).
Other GI products from Kerala:
• Alleppey Green Cardamom General Crop Estimation Survey
• Brass broidered coconut shell craft News Excerpt:
• Chendamangalam saree Department of Agriculture and Farmers Welfare
• Kasaragod saree (DA&FW) has launched the mobile application and the
• Kuthampully Saree web portal for the General Crop Estimation Survey
• Malabar pepper (GCES) to revolutionize farming practices.
• Pokkali Rice About GCES:
• Screw pine craft of Kerala ● It covers around 68 crops (52 food and 16 non-
• Wayanad Gandhakasala rice, etc. food) in 22 States and 4 Union Territories.
66
● The yield rate estimates are based on scientifically

designed crop-cutting experiments conducted
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under the survey.

www.ksgindia.com
GCES Portal and App: • CMV was identified in cucumber in 1934, which
Key Features: gave the virus its name.
● Comprehensive Information- The portal and the Regions Affected- Maharashtra is affected by
app provide a comprehensive repository of yield cucumber mosaic virus (CMV) and Karnataka and other
estimation including village-wise GCES plan and plot South Indian states tomato mosaic virus (ToMV).
details where the crop-cutting experiments are Sources of spreading of virus - ToMV spreads mainly
conducted, post-harvesting crop weight and driage through infected seeds, saplings, agricultural tools and
weight of the crop. often, through the hands of nursery workers who don’t
● Geo-referencing- It enables the primary worker to sanitise themselves properly before entering the fields.
draw the boundary of the experimental plot and • CMV is spread by aphids, which are sap-sucking
upload photos of the plot as well as of the crops insects. CMV too can spread through human
through it. This feature will ensure transparency and touch. Conditions of high temperature followed by
accuracy of the data as well. intermittent rain, which allow aphids to multiply, are
Key Challenges Addressed: conducive to the spread of CMV.
● Delay in Reporting- • Aphids are small sap-sucking insects and members
o Current manually done data collection, of the superfamily Aphidoidea.
compilation and yield estimation cause delays Measures for controlling the virus – ToMV can remain
in reporting by states. dormant in weeds and plant remains around the field,
o In the new process, the field data will be and come back later. Fields must, therefore, be cleared
collected using a GPS-enabled mobile of weeds and plant material before fresh planting.
application and stored in the server ensuring • Plants cannot be cured of ToMV, but the infection
on-time reporting of crop statistics. can be controlled with good agricultural practices
● Transparency- and by following bio safety standards in Nursery,
o GPS-enabled devices provide precise latitude and compulsory seed treatment to stop its spread.
and longitude coordinates for data collection
points. Pesticide Monocrotophos
o This ensures that data is linked to specific News Excerpt:
geographic locations, removing ambiguity or The Government of India has banned the use of a
manipulation of data collection. controversial pesticide Monocrotophos. Along with
monocrotophus, the three other insecticides that were
banned are Dicofol, Dinocap and Methomyl.
CMV and ToMV: mosaic virus What is Monocrotophus?
News Excerpt: Monocrotophos is a water-soluble organophosphate
CMV and ToMV: The two ‘mosaic’ insecticide with high oral and moderate dermal toxicity.
viruses that infected tomato crop has led to Sharp The recent directive provides a one-year transitional
increase in the price of tomato due to low production of period for farmers to adopt alternatives.
the vegetable. Yavatmal pesticide poisoning: 20 farmers in Yavatmal
About- CMV and ToMV – The two plant pathogens have district of Maharashtra died due to pesticide poisoning
similar names and cause similar damage to crops, but in 2017. Pesticide Monocrotophos, whose unapproved
they belong to different viral families and spread mixture was reportedly used in the cotton fields, was
differently. blamed for the poisoning.
• ToMV belongs to the Virgaviridae family and is Central Insecticides Board and Registration
closely related to the tobacco mosaic virus Committee (CIBRC): For the effective enforcement of
(TMV). ToMV hosts include tomato, tobacco, the Insecticides Act, of 1968 the two bodies have been
peppers, and certain ornamental plants. constituted at the Central level viz. Central Insecticides
• CMV has a much larger host pool that Board and Registration Committee. The enforcement of
includes cucumber, melon, eggplant, tomato, the Act was transferred to the Ministry of Agriculture in
carrot, lettuce, celery, cucurbits (members of the year 1970 by the Ministry of Health and Family
67
the gourd family, including squash, pumpkin, Planning.

zucchini, some gourds, etc.), and some
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ornamentals.
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Heat-Tolerant Wheat Seeds o Thus, increasing the productivity of mustard in

the country is vital for the economic well-being
News Excerpt:
of farmers and self-sufficiency in edible oil
The Centre has asked the states to promote heat-
production.
tolerant wheat seeds among farmers for the upcoming
rabi season, in the background of a 5% decrease in
About Genetically Modified Crops:
monsoon this year.
Genetic modification of crops using the available and
About the seeds:
vast genetic diversity in conjunction with traditional
● The wheat varieties DBW187 and DBW222 have
farming has been well documented for increased
been found superior in terms of heat tolerance.
productivity, contributing to global food, feed, and
● During the crop season 2021-22, these have shown
fibre security.
heat tolerance with yield gain of 3.6% and 5.4%,
Bt Cotton was commercialized as the first GM crop in
respectively as compared to HD-3086. India more than 20 years ago and has been viewed
About Heat-Tolerance varieties: globally as a great success story in terms of economic
● There are 800 climate-resistant varieties available advantage to farmers and to the nation.
in the country.
● Breeding of heat-tolerant wheat varieties remains
one of the most strategic approaches to cope with ● India's first indigenous GM food crop, Mustard,
the risk of unseasonal heat waves and to ensure has failed to meet the minimum weight criteria
food and nutritional security. required for the commercial release as seed. It
● Heat tolerance must be combined with the ability to weighs about 3.5 grams per 1,000 seeds, which is
cope with drought stress to lower any anticipated lower than the norm of 4.5 grams to be eligible for
losses. notification as a seed variety.
● IARI scientists have bred wheat varieties with what is About GEAC:
termed “mild vernalisation requirement” or the need
● The Genetic Engineering Appraisal Committee
for a certain minimum period of low winter
(GEAC) is the regulatory body under the
temperatures for initiation of flowering.
● The early-sown IARI varieties not only have a longer Environment Ministry (MoEF&CC) for GM crops.
window for grain development but also for ● GEAC is chaired by the Special /Additional Secretary
vegetative stage growth between germination and of MoEF&CC and co-chaired by a representative
flowering. from the Department of Biotechnology (DBT).
● They can accumulate more biomass along with grain ● It is responsible for the assessment of proposals
weight. related to the release of genetically engineered
organisms and products into the environment,
GM Dhara Mustard Hybrid (DMH-11) including experimental field trials.
News Excerpt:
India’s first genetically modified mustard crop Dhara Borlaug Award
Mustard Hybrid (DMH-11) has failed to meet the News Excerpt:
minimum weight criteria required for the commercial “Bihana Didi” wins Borlaug Award for introducing
release as seed. drought-tolerant rice variety ‘Sahbhagi Dhan’ in
A Focus on Mustard: Odisha.
● India faces a major deficit in edible oils, with 60% of About the news:
its demand being met by imports. ● Indian agriculture scientist Swati Nayak became the
o During 2020-21, India imported around 13.35 third Indian agriculture scientist to win the
MT of edible oils, costing around ₹ 80,000 crore. prestigious Norman E Borlaug Award for 2023.
o Out of all the imported edible oils, the share of ● She is fondly referred to as “Bihana Didi,” meaning
palm oil is about 56%, followed by soybean oil “Seed Lady”.
at 27%, and sunflower at 16%. ● Sahbhagi Dhan is a drought-tolerant rice variety,
o Mustard is one of the most important edible oil suitable for hilly uplands and ‘BINA Dhan-11’, is a
crops in India; however, its per-hectare yield is
68
flood-tolerant variety containing a submergence-

very low as compared to the global average. tolerant Sub1 gene identified from an indigenous
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land race of Odisha.
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● The other two Indian recipients have been- ● Reducing hunger: His work contributed
o Govindaraj (2022)- recognized for his significantly to reducing hunger and improving
outstanding leadership in mainstreaming food security in India. The increased agricultural
biofortified crops, particularly pearl millet, in productivity resulting from the Green Revolution
India and Africa.
helped to feed a rapidly growing population.
o Mukherji (2012)- chosen for her research on
Contribution as an Institution Builder:
groundwater resources in agriculture, which
● Modernizing ICAR: He worked on strengthening
led to major policy changes benefiting
thousands of farmers in West Bengal. and modernizing the Indian Council of Agricultural
About the Norman Borlaug Award: Research (ICAR) and its affiliated institutions,
● The award, instituted by the World Food Prize making them more research-oriented and
Foundation, is named in honour of Nobel Laureate responsive to the needs of farmers.
and Green Revolution's chief architect, Dr Norman E ● National Commission on Farmers: In November
Borlaug. It is endowed by the Rockefeller 2004, the Union government made Dr Swaminathan
Foundation. chairman of the National Commission on Farmers.
● It recognizes exceptional, science-based
Popularly known as the Swaminathan
achievement in international agriculture and food
Commission, the panel submitted five reports in
production by an individual under the age of 40.
● The Nobel Peace Prize 1970 was awarded to two years to the Centre. Its main recommendation
was that the Minimum Support Price should be at
Norman E. Borlaug "for having given a well-founded
hope”- the green revolution. least 50% more than the weighted average cost of
production.
Dr. M.S. Swaminathan

Rubber plantation in North-East India to
News Excerpt: Renowned agricultural scientist M.S.
Swaminathan, known as the father of India’s Green be increased
Revolution, passed away at the age of 98. News Excerpt: The Rubber Board is implementing a
Contributions of M.S. Swaminathan: project to expand the area under natural rubber in the
● Green Revolution: He was instrumental in Northeastern States.
spreading high-yielding varieties of rice and wheat, Natural Rubber:
which transformed India from being dependent on • Natural rubber is from the monomer isoprene (2-
food imports to being self-sufficient. methyl-1,3-butadiene).
About Rubber Board:

• It is a statutory organization headquartered in Kottayam,
Kerala, constituted under the Rubber Act, 1947. It functions
under the Ministry of Commerce and Industry.
• Composition: The Board is headed by
a chairman appointed by the Central Government and
has 28 members.
● Educating and training farmers: He understood

• It is a native of the Amazon basin, introduced to
the importance of educating and training farmers in
countries in the tropical belts of Asia and Africa in
modern agricultural techniques.
the late nineteenth century.
o For this, he established Agricultural Extension
• Climatic conditions
Programs to disseminate knowledge about
• Moist and humid climates with heavy rainfall of
improved farming practices and the use of HYV
more than 200 cm.
seeds.
• Equatorial climates and temperatures above 25
● Conserving agricultural biodiversity: He
degrees Celsius.
advocated for conserving agricultural biodiversity
• Well-drained, weathered soils.
69
through the preservation of traditional crop

Rubber production in India: Worldwide, India is 3rd
varieties and the sustainable use of genetic
largest producer and 4th largest consumer of natural
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resources to ensure long-term food security.

www.ksgindia.com
rubber and 5th largest consumer of natural and synthetic • It is grown in the hills of Uttarakhand and is used
rubber together. to make processed juice, jam, jelly squash, candies,
Rubber Growing Areas in India etc.
• Traditional: Tamil Nadu’s Kanyakumari District and • West Bengal farmers are inspired by the success
Kerala. stories of Bangladesh farmers. Farmers of
• Non-traditional: Coastal Karnataka, Goa, Sundarbans, South and North 24 pargana, Malda,
Maharashtra’s Konkan Region, coastal Andhra Murshidabad, Purulia, Bankura and Alipurduar have
Pradesh and Orissa, the northeastern provinces, the started malta farming.
Andaman and Nicobar Islands, etc. • Dhaka Tribune report: According to the report,
the fruit is a high-value crop with several
therapeutic benefits. Bangladesh has already
Fourteenth World Spice Congress (WSC)
started to assist farmers in malta farming to
News Excerpt:
increase their income.
The 14th edition of the World Spice Congress (WSC)
• The fruit Malta is thought to strengthen the
began at Vashi in Navi Mumbai.
immune system.
About World Spice Congress (WSC):
• It is useful in treating conditions linked to vitamin
• It was planned and conceived in 1990 as a forum for
C deficiency, including pneumonia, high blood
discussion and interaction between the importers
pressure, stomach, intestinal issues, anaemia, joint
and exporters of spices.
pain, bleeding gums, and tooth loss.
• It is the conglomeration of the global spice
• The seeds make high-protein cow feed and
industry to deliberate the concerns and
fertilizer.
considerations of the sector over its three-decades-
• The peel is used to make facemasks to treat acne
long presence.
and other skin conditions.
• Since its inception, it has been organized under the
• The cost of malta saplings is low as compared to
leadership of the Spices Board, Ministry of
mangoes varieties. It also starts producing fruits
Commerce and Industry, Government of India.
within two years of plantation and yields
• Theme for 2023: VISION 2030: S-P-I-C-E-S
significant quantities after five years.
(Sustainability, Productivity, Innovation,
Collaboration, Excellence and Safety).
About the Spices Board of India Issues with GM Crops
• It was constituted on 26th February 1987 under the News Excerpt:
Spices Board Act 1986 with the merger of the India has seen a robust debate on GM crops in the last
erstwhile Cardamom Board (1968) and Spices Export two decades. Environmentalists, scientists, politicians,
Promotion Council (1960). farmers, consumers and the higher judiciary have asked
• It is functioning under the Ministry of Commerce probing questions about the safety, efficacy and even
& Industry. the very necessity of GM food.
• It is responsible for the export promotion of the 52 About:
scheduled spices and the development of • Transgenic crops are plants that have been altered
Cardamom (small and large). using genetic engineering techniques.
• These crops have undergone the insertion of specific
Malta Farming genes into their DNA, granting them novel
characteristics or traits that are absent in the species
News Excerpt:
through conventional breeding methods.
Emerging trend of Malta farming in West Bengal.
About • In India, all activities associated with GMOs and their
• Malta is the citrus fruit almost similar in products are regulated by the Union Ministry of
appearance to sweet lime, differentiated by a ring Environment, Forest and Climate Change (MoEFCC)
at one end. It is also known as siki-mausambi in under the provisions of the Environment
West Bengal. (Protection) Act, 1986.
70
• The Genetic Engineering Appraisal Committee

(GEAC) under MoEFCC is entrusted with reviewing,
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monitoring, and approving various activities

www.ksgindia.com
involving GMOs, including their import, export, The Regulatory Process for Transgenic Crops in India
transport, manufacture, use, or sale. • The development of transgenic crops entails the
• GEAC endorsed the commercial cultivation of insertion of transgenic genes into plants to achieve a
genetically modified mustard. Additionally, GM consistent, protective response.
foods are subject to regulations by the Food Safety • This process involves a blend of scientific methodology
and Standards Authority of India (FSSAI) in and chance. Prior to open field trials, safety
accordance with the Food Safety and Standards Act, assessments by committees are carried out.
2006. • These trials occur within agricultural universities or
• Various acts and rules, such as the Environment controlled plots managed by the Indian Council for
Protection Act (1986), Biological Diversity Act (2002), Agricultural Research (ICAR).
Plant Quarantine Order (2003), GM policy under • For transgenic plants, superiority over non-GM
Foreign Trade Policy, Food Safety and Standards Act counterparts and environmental safety for commercial
(2006), and the Drugs and Cosmetics Rule (8th approval are prerequisites. Open field trials assess
Amendment, 1988), contribute to the regulatory adaptability across diverse seasons and geographical
framework governing GM crops in India. conditions.
Comparison between GM Crops and Conventional

Crops
The Popularity of Hybrid Seeds
GM Crops Conventional Crops
News Excerpt:
• Modified using genetic • Bred through natural The popularity of Hybrid Seeds has been increasing among
engineering crossbreeding over farmers in India for over a decade due to their quicker
techniques, altering generations.
harvesting as compared to Open-Pollinated Variety (OPV)
DNA directly.
• Gradual development or traditional seeds.
• Faster development due to lower, involving
due to targeted gene many generations to National Seeds Corporation Limited (NSC):
insertion. achieve desired traits.
• Incorporated in 1963, National Seeds Corporation
• Highly precise • Relies on natural genetic Limited (NSC) carries out foundation and certified
modification of specific variation, less precise. seed production.
traits.
• Limited to existing traits • It is wholly owned by the Indian government and is
• May face resistance within the species. managed by the Ministry of Agriculture and
from pests over time.
• May require more Farmers' Welfare.
• Can conflict with chemical inputs.
• It belongs to the Miniratna Category I.
traditional practices in
some regions. What are hybrid seeds?
Current Status in India • In agriculture and gardening, hybrid seed is produced

by deliberately cross-pollinated plants that are
• Within India, only Cotton is presently commercially
genetically diverse.
cultivated as a genetically modified (GM) crop.
Experiments are underway for additional crops like • Hybrid seeds are used to improve the characteristics of
brinjal, tomato, maize, and chickpea, utilizing the resulting plants, such as better yield, greater
transgenic technology. uniformity, improved colour, and disease resistance.
• However, an ongoing legal case in the Supreme Court Hybrid Seeds in India:
questions the authorization of transgenic food crops, • The Green Revolution in India in the 1960s, when
seeking to halt GM mustard due to concerns about the government focused primarily on boosting
prohibited herbicide usage. agricultural productivity, is where hybrids first
• Historical cases involve the GEAC's endorsement of GM appeared. The National Seed Corporation was
mustard in 2017 after additional testing, and the established to create, store, and distribute high-yield
71
government's indefinite suspension of GM brinjal in variety seeds to accomplish this.

2010.
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www.ksgindia.com
• Until the 1980s, the public sector provided farmers according to the 25th Report of the Standing
with seeds from open-pollinated varieties (OPV). Committee on Agriculture. (2021)
• The government started allowing private companies • The private sector's share of the country's seed market
to create and sell hybrid types in the 1990s. has increased from 57.3 percent in 2017–18 to 64.5
• The diversity of the nation's crops and the percent in 2020–21.
conventional kinds better adapted to the regional • According to 2019 research, by the Indian Council
Climate are threatened by this tendency, which has of Food and Agriculture, the country's seed industry
persisted. had a value of US $4.1 billion in 2018, representing
• Traditional varieties, which are hand-selected by growth of 15.7% from 2011 to 2018, and is anticipated
farmers from the field after harvest for use the to increase at a pace of 13.6% from 2019-24 to reach a
following year and can be repeated for generations, or value of US $9.1 billion by 2024.
open-pollinated variety (OPV) seeds, which are typically • Farmers have a gap between two crop cycles to
developed by agricultural universities and can be used plant short-duration crops like potatoes because
for five to seven years, mature much more quickly than hybrid seeds have a quicker harvest quality.
hybrid varieties. • Approximately 85% of this seed market comprises
Why is there increasing demand for hybrid seeds in wheat and paddy.
India?
• In India, hybrid seeds are only available for paddy,
• In India, hybrid seeds are primarily developed and sold which takes up roughly 6% of the 44 million hectares
by national and international private sector companies, of rice-growing land there.
72
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www.ksgindia.com

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CC_COMPILATION_ECONOMY & AGRICULTURE MAY- DEC.

TAXATION .................................................... 29 SCHEMES ...................................................... 50

Growing Tax Base in India ............................................................... 29 Open Market Sale Scheme.............................................................. 50

LEADS 2023 report ............................................................................ 56 Pesticide Monocrotophos ............................................................... 67

For instance, if LTV is 75%, then only 75% of the

asset value could be lent by a bank.

Governance: interest rate fluctuations, and market risks.

case of a bank failure. the consumer and business credit information of

Interoperability of Cards • It includes access to exclusive deals and benefits

rate on home loans and other loans.

● This allows secure online transactions without

verification value (CVV).

o Rainfall: Around 75-100 cm.

generally decontrolled fertilizers, but these are

o Alberta Gas (Canada)

Impact: detected and actions taken, etc.

have lost crores of rupees as revenue.

combinations of static and dynamic pricing models.

hours goes down, the requirement for additional

domestic government imposes on foreign imports that markets.

• Enhanced Oversight: Invest in robust inspection

dealing with securities and commodity derivatives

capital to carry out trades involving the insolvent or bankrupt.

perpetuating a parallel economy, leading to risks

advisors to the public.

even commodities. markets.

securities, treasury bills, and corporate bonds with a

maturity not exceeding 7 days during the normal

Green bonds finance or re-finance investments, projects,

shareholders can shareholders of the

being created. o Bonus, referral bonuses, and incentives online

formalisation of the economy will likely play a role deposits.

About CBDT considerations associated with their revenue

transfers information to the GST portal and e-Way

the shares, it shall be chargeable to income-

lower production costs, improved infrastructure, and

(both government and corporate).

Book Building. It also allows for the voluntary

women’s earnings and labour market participation

Global Innovation Index-2023

transferring, and settling wholesale CBDC across

Digital Consent Acquisition (DCA) System International Competition Network

● The procedure not only verifies the authenticity of

whether the mentioned account is operative.

• The payment vertical within embedded finance has

compound annual growth rate (CAGR) of 76 % and

• A bench comprising Chief Justice D Y Chandrachud About IPEF:

• According to them, none of the impugned

Periodic Labour Force Survey (PLFS) Dollarization

money supply can no longer be controlled by vested

• GIFT Nifty is regulated by the Securities Exchange

and regions, encompassing entities such as the

was 3,000 metric tonnes (MT) per bid for a

Prohibited Items Under LRS:

under Schedule I (like purchase of lottery

scheme aims to enable 15,000 SHGs to earn an

• According to a study undertaken by IIM Kashipur,

been helpful to the country's export growth.

Basic Animal Husbandry Statistics 2023