Day-4 : Economy MCQs

Based on Current Affairs 

7. Consider the following statements about CHAMPIONS Portal:

1. It is a technology packed control room-cum-management information system.
2. The system utilising modern ICT tools is aimed at assisting Indian SHGs and other small businesses to march into big league as National and Global CHAMPIONS.
3. The portal was launched under the Ministry of Human Resource Development.

Which of the given statements is/are not correct?

      (a) 1 and 3

      (b) 2 and 3

      (c) 3 only

      (d) 1 and 2

 

 

 

8. Consider the following statements about One Nation-One Ration Card:

1. The ration card portability scheme will allow 67 crore NFSA beneficiaries in all states to use their cards at any ration shop anywhere in the country.
2. The scheme would cover all beneficiaries by March 2022 in two phases from 2022-24 and 2024-25.
3. The scheme allow migrant workers to access subsidised food away from their home villages.

Which of the given statements is/are correct?

      (a) 1 and 3

      (b) 2 only

      (c) 3 only

      (d) 1, 2 and 3

 

 

 

9. Energy Transition Index is released by which among the following institute?

      (a) World Economic Forum

      (b) World Bank

      (c) International Solar Alliance

      (d) United Nations

 

 

 

10. Consider the following statements about New law for Contract farming:

1. The Union Finance Minister has announced plans to enact a central law to permit barrier-free inter-State trade of farm commodities except e-trading.
2. The Centre will be deregulating the sale of nine types of agricultural produce to assure contract farming as a legal framework by amending the Essential Commodities Act, 1955.
3. The Centre plans to ensure a facilitative legal framework to oversee contract farming

Which of the given statements are correct?

      (a) 1 and 3

      (b) 2 and 3

      (c) 3 only

      (d) 1, 2 and 3

 

 

 

11. Under the Atmanirbhar Bharat Abhiyan stimulus package 1 lakh crore rupee farm infrastructure fund financed by NABARD to which of the following:

1. Farmer producer organisations
2. Primary agriculture cooperative societies
3. Agriculture entrepreneurs and start-ups
4. State owned agencies

Which of the given statements are correct?

      (a) 1, 2 and 3

      (b) 1, 2 and 4

      (c) 2, 3 and 4

      (d) All of the Above

 

 

 

12. Consider the following statements:

1. Corporate enterprises have been offered relief via changes to the Insolvency and Bankruptcy Code (IBC) and the Companies Act.
2. The new Public Sector Enterprise Policy promotes the entry of private companies into every sector of industry, while limiting public sector enterprises to only strategic sectors.
3. Under the Atmanirbhar Bharat Abhiyan, additional 1.5 lakh crore rupees allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and its sub-schemes.

Which of the given statements are correct?

      (a) 1 and 3

      (b) 3 only

      (c) 1 and 2

      (d) 1, 2 and 3

 

 

 

13. Which of the following option is incorrect about DSR method:

      (a)  The DSR technology recommended in Punjab as an alternative method of rice

      (b)The method is less time consuming and labour intensive than the conventional practice

      (c) The method can save irrigation water and energy (power) in contrast to the modern methods

      (d) Under DSR, the crop matures 7-10 days earlier than puddle transplanted rice

 

14. Consider the following statements about Aatma Nirbhar Bharat:

1. Under the provision made for Rs. 20,000 crore subordinate debt for two lakh MSMEs which are NPA or are stressed.
2. The five pillars of Aatma Nirbhar Bharat are Economy, Infrastructure, System, Vibrant Demography and Strong supply chain.
3. General Financial Rules (GFR) of the Government will be amended to disallow global tender enquiries in procurement of Goods and Services.

Which of the given statements are correct?

      (a) 1 and 2

      (b) 1 and 3

      (c) 2 only

      (d) 1, 2 and 3

 

 

 

15. Consider the following statements about Measures to boost business under Atmanirbhar Bharat Abhiyan:

1. The amendments will de-clog the criminal courts and National Company Law Tribunal (NCLT).
2. The Centre has approved Defence Testing Infrastructure Scheme (DTIS) which aims to give a boost to domestic defence and aerospace manufacturing.
3. In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed.

Which of the given statements are correct?

      (a) 1 and 3

      (b) 2 and 3

      (c) 3 only

      (d) 1, 2 and 3

 

 

 

16. Consider the following statements about National Migrant Information System (NMIS):

1. It has developed by Ministry of Labour.
2. It is to maintain a central repository of migrant workers and help in speedy inter-state communication.
3. Because of the contacts numbers of migrants it is the most disputed online portal.

Which of the given statements is/are not correct?

      (a) 1 and 2

      (b) 1 and 3

      (c) 2 only

      (d) 1, 2 and 3

 

 

Answers

7. Consider the following statements about CHAMPIONS Portal:

1. It is a technology packed control room-cum-management information system.
2. The system utilising modern ICT tools is aimed at assisting Indian SHGs and other small businesses to march into big league as National and Global CHAMPIONS.
3. The portal was launched under the Ministry of Human Resource Development.

Which of the given statements is/are not correct?

      (a) 1 and 3

      (b) 2 and 3

      (c) 3 only

      (d) 1 and 2

Answer: (b)

Explanation:

• Statement 1 is correct: It is a technology packed control room-cum-management information system.
• Statement 2 is incorrect: The system utilising modern ICT tools is aimed at assisting Indian MSMEs march into big league as National and Global CHAMPIONS.
• Statement 3 is incorrect: In a major initiative Union Ministry of MSME has launched CHAMPIONS portal.

 

For more information read the following:

 

CHAMPIONS Portal

• In a major initiative Union Ministry of MSME has launched CHAMPIONS portal, a Technology driven Control Room-Cum-Management Information System.

Details

• The system utilising modern ICT tools is aimed at assisting Indian MSMEs march into big league as National and Global CHAMPIONS.
• The CHAMPIONS stands here for Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength. Accordingly, the name of the system is CHAMPIONS.
• As the name suggests, the portal is basically for making the smaller units big by solving their grievances, encouraging, supporting, helping and handholding. It is a real one-stop-shop solution of MSME Ministry.

How does it work?

• It is a technology packed control room-cum-management information system. In addition to ICT tools including telephone, internet and video conference, the system is enabled by Artificial Intelligence, Data Analytics and Machine Learning.
• It is also fully integrated on real time basis with GOI’s main grievances portal CPGRAMS and MSME Ministry’s own other web based mechanisms.
• The entire ICT architecture is created in house with the help of NIC in no cost. Similarly, the physical infrastructure is created in one of ministry’s dumping rooms in a record time.

 

 

8. Consider the following statements about One Nation-One Ration Card:

1. The ration card portability scheme will allow 67 crore NFSA beneficiaries in all states to use their cards at any ration shop anywhere in the country.
2. The scheme would cover all beneficiaries by March 2022 in two phases from 2022-24 and 2024-25.
3. The scheme allow migrant workers to access subsidised food away from their home villages.

Which of the given statements is/are correct?

      (a) 1 and 3

      (b) 2 only

      (c) 3 only

      (d) 1, 2 and 3

Answer: (c)

Explanation:

1. Statement 1 is incorrect: the ration card portability scheme will allow 67 crore NFSA beneficiaries in 23 connected States to use their cards at any ration shop anywhere in the country,
2. Statement 2 is incorrect: The scheme would cover all beneficiaries by March 2021.
3. Statement 3 is correct: The scheme would allow migrant workers to access subsidised food away from their home villages.

 

For more information read the following:

 

Migrant workers to get free food-grains

• Second tranche of the economic stimulus package has been announced by the Finance Minister.

Background:

• The first tranche of measures include ₹3 lakh crore collateral free 4-year tenure loan for micro, small and medium enterprises (MSMEs) with moratorium on payment for first 12 months. A loan provision of ₹20,000 crore for stressed MSMEs was also made and a ₹30,000 crore special liquidity scheme for investment in debt papers of NBFCs were announced, among other schemes.
• Also, a relief package of ₹1.7 lakh crore was announced earlier by the government.

More Information

Free foodgrains:

• A major focus of the second tranche of the economic stimulus package announced is to provide free foodgrains for the next two months to migrant workers who do not have ration cards.
• The move to provide free foodgrains for migrant workers is an extension of the Pradhan Mantri Garib Kalyan Yojana, which provided an additional monthly free rice or wheat allocation to 80 crore people with ration cards covered by the National Food Security Act (NFSA).

• • Over the past few months, migrant workers and others without ration cards have struggled without access to this free food.

• The Centre will spend ₹3,500 crore for this purpose.

Extension of credit facilities:

• It also includes an extension of credit facilities for urban housing, street vendors and farmers.
• Street vendors who have been hit hard by the lockdown will be given access to easy credit through a ₹5,000 crore scheme, which will offer ₹10,000 loans for initial working capital.
• The Centre plans a drive to enrol 2.5 crore farmers who are not yet part of the Kisan Credit Cards scheme, along with fish workers and livestock farmers, and provide them with ₹2 lakh crore worth of concessional credit. NABARD (National Bank for Agriculture and Rural Development) will also extend additional refinance support worth ₹30,000 crore to rural banks for crop loans.

Subvention relief:

• An interest subvention scheme for small businesses has been announced.
• Small businesses who have taken loans under the MUDRA-Shishu scheme, meant for loans worth ₹50,000 or less, will receive a 2% interest subvention relief for the next year.
• This would cost the government ₹1,500 crore.

Creation of affordable rental housing:

• The Centre will help create affordable rental housing for the urban poor and provide relief worth ₹1,500 crore to small businesses through an interest subvention scheme.

• • Noting that migrant workers and other urban poor face difficulties in finding affordable housing, the Finance Minister said a scheme to build rental housing complexes through public private partnership mode would be launched under the existing Pradhan Mantri Awas Yojana (PMAY) scheme.
  • Both public and private agencies will be incentivised to build rental housing on government and private land, while existing government housing will be converted into rental units.

• The credit linked subsidy scheme for lower middle class housing under PMAY will also be extended by one year to March 2021.

• • It is hoped that this would also create jobs and stimulate demand for the steel, cement and construction industries.

One Nation-One Ration Card:

• It is announced that, by August 2020, the ration card portability scheme will allow 67 crore NFSA beneficiaries in 23 connected States to use their cards at any ration shop anywhere in the country.
• This would allow migrant workers to access subsidised food away from their home villages. The scheme would cover all beneficiaries by March 2021.

 

9. Energy Transition Index is released by which among the following institute?

      (a) World Economic Forum

      (b) World Bank

      (c) International Solar Alliance

      (d) United Nations

Answer: (a)

Explanation:

All the options are incorrect except (a)

For more information read the following:

 

Energy Transition Index

• Recently, the World Economic Forum (WEF) has released the annual rankings of the global Energy Transition Index.

More Information

• The index benchmarks 115 economies on the current performance of their energy systems across

1. Economic development and growth,
2. Environmental sustainability and energy security
3. Access indicators
4. Readiness for transition to secure, sustainable, affordable and inclusive energy systems.

• According to the recent report Sweden has topped the Index for the third consecutive year and is followed by Switzerland and Finland in the top three.
• Only 11 out of 115 countries have made steady improvements in ETI scores since 2015.
• Argentina, China, India and Italy are among the major countries with consistent annual improvements.
• In China (78th), problems of air pollution have resulted in policies to control emissions, electrify vehicles and develop the world’s largest capacity for solar photovoltaic (SPV) and onshore wind power plants.
• Scores for the US, Canada, Brazil and Australia were either stagnant or declining.
• India has moved up two positions to rank 74th with improvements in all three dimensions of the energy triangle namely:

1. Economic development and growth.
2. Energy access and security.
3. Environmental sustainability.

• For India, gains have come from a government-mandated renewable energy expansion programme i.e. to add 275 GW by 2027.
• India has also made significant strides in energy efficiency through bulk procurement of LED bulbs, smart meters and programs for labelling of appliances. Similar measures are being experimented to drive down the costs of electric vehicles (EVs).

 

10. Consider the following statements about New law for Contract farming:

1. The Union Finance Minister has announced plans to enact a central law to permit barrier-free inter-State trade of farm commodities except e-trading.
2. The Centre will be deregulating the sale of nine types of agricultural produce to assure contract farming as a legal framework by amending the Essential Commodities Act, 1955.
3. The Centre plans to ensure a facilitative legal framework to oversee contract farming

Which of the given statements are correct?

      (a) 1 and 3

      (b) 2 and 3

      (c) 3 only

      (d) 1, 2 and 3

Answer: (c)

Explanation:

1. Statement 1 is incorrect: the Union Finance Minister has announced plans to enact a central law to permit barrier-free inter-State trade of farm commodities and e-trading.
2. Statement 2 is incorrect: The Centre will be deregulating the sale of six types of agricultural produce, including cereals, edible oils, oilseeds, pulses, onions and potatoes, by amending the Essential Commodities Act, 1955.
3. Statement 3 is correct: plans to ensure a facilitative legal framework to oversee contract farming

 

For more information read the following:

 

New law for contract farming

• Atmanirbhar Bharat Abhiyan economic stimulus package.

More information

• A major provision of the Atmanirbhar Bharat Abhiyan economic stimulus package involves the fulfilment of the long-pending agricultural marketing reforms.

Promoting inter-state trade:

• The Centre has been attempting to reform agricultural marketing through a model Act and encouraging States to adopt it. However, given the wide divergence of the laws of different states, these laws have not been effective enough.
• In this light, the Union Finance Minister has announced plans to enact a central law to permit barrier-free inter-State trade of farm commodities and e-trading. This will allow farmers to sell produce at attractive prices beyond the current mandi system.
• The centre argues that though agricultural marketing comes under the State List, the inter-State trade falls in the central list and the centre can, therefore, make such a law.

Contract farming:

• There are also plans to ensure a facilitative legal framework to oversee contract farming.
• This would provide farmers with assured sale prices and quantities even before the crop is sown and also allow private players to invest in inputs and technology in the agricultural sector.

Deregulating produce:

• The Centre will be deregulating the sale of six types of agricultural produce, including cereals, edible oils, oilseeds, pulses, onions and potatoes, by amending the Essential Commodities Act, 1955.

• Stock limits will not be imposed on these commodities except in case of national calamity or famine or an extraordinary surge in prices. These stock limits would not apply to processors and exporters.
• The argument for the deregulation is that the Essential Commodities Act was enacted at a time of food scarcity, and needs to reflect current concerns wherein the farmer’s income is as important as ensuring consumer demands.

Investment in infrastructure:

• The economic stimulus package also includes a plan to invest 1.5 lakh crore rupees to build farm-gate infrastructure and support logistics needs for fish workers, livestock farmers, vegetable growers, beekeepers and related activities.

 

 

 

11. Under the Atmanirbhar Bharat Abhiyan stimulus package 1 lakh crore rupee farm infrastructure fund financed by NABARD to which of the following:

1. Farmer producer organisations
2. Primary agriculture cooperative societies
3. Agriculture entrepreneurs and start-ups
4. State owned agencies

Which of the given statements are correct?

      (a) 1, 2 and 3

      (b) 1, 2 and 4

      (c) 2, 3 and 4

      (d) All of the Above

Answer: (a)

Explanation:

All the statements are correct except (4)

For more information read the following:

 

1 lakh crore rupee farm infra fund to be financed by NABARD: FM

• The Union Finance Minister has announced plans for a 1 lakh crore rupees farm infrastructure fund as part of the Atmanirbhar Bharat Abhiyan stimulus package.

Background:

• Supply chain disruptions during COVID-19 revealed critical gaps in agricultural infrastructure and logistics systems.

• • Farmers were forced to throw away their produce or sell their produce at a loss due to the lockdown. The consumers also faced supply issues during the lockdown.

More Information

• The 1 lakh crore rupees Agriculture Infrastructure Fund will be financed and managed by the National Bank for Agriculture and Rural Development (NABARD).
• Financing will be provided to primary agriculture cooperative societies, farmer producer organisations, agriculture entrepreneurs and start-ups to develop cold chain storage and other post-harvest management infrastructure at the farm gate and aggregation points.
• The stimulus package also includes plans to strengthen infrastructure in food processing, fisheries, animal husbandry, horticulture, herbal cultivation and beekeeping with total funding of 50,000 crore rupees.

 

 

12. Consider the following statements:

1. Corporate enterprises have been offered relief via changes to the Insolvency and Bankruptcy Code (IBC) and the Companies Act.
2. The new Public Sector Enterprise Policy promotes the entry of private companies into every sector of industry, while limiting public sector enterprises to only strategic sectors.
3. Under the Atmanirbhar Bharat Abhiyan, additional 1.5 lakh crore rupees allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and its sub-schemes.

Which of the given statements are correct?

      (a) 1 and 3

      (b) 3 only

      (c) 1 and 2

      (d) 1, 2 and 3

Answer: (c)

Explanation:

1. Statement 1 is correct: Corporate enterprises have been offered relief via changes to the Insolvency and Bankruptcy Code (IBC) and the Companies Act.
2. Statement 2 is correct: The new Public Sector Enterprise Policy promotes the entry of private companies into every sector of industry, while limiting public sector enterprises to only strategic sectors.
3. Statement 3 is incorrect: There is an additional 40,000 crore rupees allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

 

 

 

For more information read the following:

Centre throws open all sectors to private players

• The fifth tranche of the Atmanirbhar Bharat Abhiyan stimulus package announced by the Finance Minister.

More Information

• The major provisions of the final tranche of the Atmanirbhar Bharat Abhiyan stimulus package include the following:

• • There is an additional 40,000 crore rupees allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
  • The new Public Sector Enterprise Policy promotes the entry of private companies into every sector of industry, while limiting public sector enterprises to only strategic sectors.

• The new policy will notify specific strategic sectors in which at least one PSU will remain, although private companies will also be allowed.
• Even in the strategic sectors, no more than four PSUs will be allowed, with the rest being privatised, merged or brought under holding companies.
• PSUs in all other sectors will be privatised.

• • Corporate enterprises have been offered relief via changes to the Insolvency and Bankruptcy Code (IBC) and the Companies Act.

• • • Fresh insolvency proceedings would be suspended for a year.
    • COVID-19 related debt will not trigger defaults.
    • Firms will be allowed to list abroad directly.

• • State governments have been given more fiscal room in the current crisis with the hiking of their borrowing limits from 3% to 5% of Gross State Domestic Product (GSDP). However, the hiked limits will be conditional on States implementing reforms related to ration portability, ease of doing business, power distribution, and urban local bodies.

Significance:

• The total package announced under the Atmanirbhar Bharat Abhiyan stimulus package amounts to 20.97 lakh crore rupees accounting to 9.8% of GDP.
• The decision to allocate 40,000 crore rupees to the MGNREGA scheme in addition to the 61,000 crore rupees allocated in the Budget was widely welcomed, as a measure that will support rural livelihoods at a time when returning migrants swell unemployment in the villages.
• The hike in borrowing limits of the state is important as GSDPs are likely to contract, further shrinking possible borrowing at a time when States are at the frontline of containment and relief operations. The increase in borrowing limits would make extra resources worth 4.28 lakh crore rupees available to States.

For the health sector, there is the announcement for increased public expenditure including infectious disease hospital blocks in every district and public laboratories in every block. There are provisions for higher number of health and wellness hubs.

 

 

13. Which of the following option is incorrect about DSR method:

      (a)  The DSR technology recommended in Punjab as an alternative method of rice

      (b)The method is less time consuming and labour intensive than the conventional practice

      (c) The method can save irrigation water and energy (power) in contrast to the modern methods

      (d) Under DSR, the crop matures 7-10 days earlier than puddle transplanted rice

Answer: (c)

Explanation:

The option (c) is right

For more information read the following:

 

 Punjab farmers’ to go for direct seeding of rice

• Kharif sowing of paddy in Punjab.

More Information

• As the labour shortage is imminent owing to exodus of migrant labourers amid the ongoing lockdown, farmers in Punjab seem all set to go for direct seeding of rice (DSR) this Kharif season, moving away from the traditional practice of raising rice nursery and then transplanting rice seedlings in a puddled field.
• The DSR technique called ‘tar-wattar DSR’ has been developed and successfully tested on a good scale at farmers’ fields.

Advantages of DSR method:

• The DSR technology recommended in Punjab as an alternative method of rice (paddy) planting offers several advantages:

• • It will help save irrigation water and energy (power) in contrast to the conventional method.
  • The DSR technique is less time consuming and labour intensive than the conventional practice.
  • There is lesser weed problem, besides the reduced incidence of nutrient deficiency, especially iron, owing to lesser leaching of nutrients and deeper root development.
  • The technology has a wide adaptability as it is suitable for medium to heavy textured soils including sandy loam, loam, clay loam and silt loam, which account for 87% area of paddy cultivation in Punjab.
  • The DSR offers avenue for groundwater recharge as well as it prevents the development of hard pan just beneath the plough layer.
  • Under DSR, the crop matures 7-10 days earlier than puddle transplanted rice, hence, it gives more time for the management of paddy straw, for the timely sowing of the next wheat crop.
  • Results from research trials and farmers’ field survey have also indicated that wheat grain yield, after DSR, is 1.0-1.2 quintal per acre higher than puddle transplanted rice.
  • The DSR involves more precision in timing and greater accuracy in operations compared to conventional transplanted rice.

 

 

14. Consider the following statements about Aatma Nirbhar Bharat:

1. Under the provision made for Rs. 20,000 crore subordinate debt for two lakh MSMEs which are NPA or are stressed.
2. The five pillars of Aatma Nirbhar Bharat are Economy, Infrastructure, System, Vibrant Demography and Strong supply chain.
3. General Financial Rules (GFR) of the Government will be amended to disallow global tender enquiries in procurement of Goods and Services.

Which of the given statements are correct?

      (a) 1 and 2

      (b) 1 and 3

      (c) 2 only

      (d) 1, 2 and 3

Answer: (b)

Explanation:

1. Statement 1 is correct: Provision made for Rs. 20,000 cr subordinate debt for two lakh MSMEs which are NPA or are stressed.
2. Statement 2 is incorrect: five pillars of Aatma nirbhar Bharat – Economy, Infrastructure, System, Vibrant Demography and Demand.
3. Statement 3 is correct: General Financial Rules (GFR) of the Government will be amended to disallow global tender enquiries in procurement of Goods and Services.

 

For more information read the following:

 

Aatma Nirbhar Bharat

Highlights

• • A Special economic and comprehensive package of Rs 20 lakh crores – equivalent to 10% of India’s GDP.
  • Call for Self-Reliant India Movement with five pillars of Aatma nirbhar Bharat – Economy, Infrastructure, System, Vibrant Demography and Demand.

Economic Front  

For MSME Sector

Rs 3 lakh crore Emergency Working Capital Facility for Businesses, including MSMEs

• • To provide relief to the business, additional working capital finance of 20% of the outstanding credit as on 29 February 2020, in the form of a Term Loan at a concessional rate of interest will be provided.
  • This will be available to units with upto Rs 25 crore outstanding and turnover of up to Rs 100 crore whose accounts are standard, any  guarantee or collateral of their own is not required.
  • The amount will be 100% guaranteed by the Government of India providing a total liquidity of Rs. 3.0 lakh crores to more than 45 lakh MSMEs.

Rs 20,000 crore Subordinate Debt for Stressed MSMEs

• Provision made for Rs. 20,000 cr subordinate debt for two lakh MSMEs which are NPA or are stressed.
• Government will support them with Rs. 4,000 Cr. to Credit Guarantee Trust for Micro and Small enterprises (CGTMSE).
• Banks are expected to provide the subordinate-debt to promoters of such MSMEs equal to 15% of his existing stake in the unit subject to a maximum of Rs 75 lakhs.

Rs 50,000 crore equity infusion through MSME Fund of Funds

• • Govt will set up a Fund of Funds with a corpus of Rs 10,000 crore that will provide equity funding support for MSMEs.
  • The Fund of Funds shall be operated through a Mother and a few Daughter funds.
  • It is expected that with leverage of 1:4 at the level of daughter funds, the Fund of Funds will be able to mobilize equity of about Rs 50,000 crores.

New Definition of MSME and other Measures for MSME

• • Previously, an enterprise with investment up to Rs 25 lakh was called a micro unit, Under the Investment definition, a firm upto investment of Rs 1 crore is to be called Micro unit, of Rs 10 crore is to be called as small unit and investment greater than Rs 20 crore will be called as medium unit.
  • Under the Turn-over definition a firm with turnover of Rs 5 crore is to be called a micro unit, of Rs 50 crore will be called as small unit and turn over greater than Rs 100 core is to be called as Medium unit.
  • It is to be noted that for an enterprise to come under the category of MSME it has to fulfill both investment and turn over conditions.
  • Also, under the new definition, the differentiation between the manufacturing and service based MSMEs are being removed.

No Global tenders for Government tenders of uptoRs 200 crore

• • General Financial Rules (GFR) of the Government will be amended to disallow global tender enquiries in procurement of Goods and Services of value of less than Rs 200 crores.

2% Interest Subvention for 12 months for Shishu MUDRA loanees- Relief of Rs. 1,500 crore

• • Government of India will provide Interest subvention of 2% for prompt payees for a period of 12 months to MUDRA Shishu loanees, who have loans below Rs 50,000.
  • The current portfolio of MUDRA Shishu loans is around Rs 1.62 Lakh crore.

• • This will provide relief of about Rs 1,500 crore to Shishu MUDRA loanee.

On Emplolyee’s Provident Fund

• EPF Contribution to be reduced for Employers and Employees for 3 months to 10% from 12% for all establishments covered by EPFO for next 3 months.

For NBFCs

Rs. 30,000 crore Special Liquidity Scheme for NBFC/HFC/MFIs

• • Government will launch Rs 30,000 crore Special Liquidity Scheme, liquidity being provided by RBI.
  • Investment will be made in primary and secondary market transactions in investment grade debt paper of NBFCs, HFCs and MFIs.
  • This will be 100 percent guaranteed by the Government of India.

Rs. 45,000 crore Partial credit guarantee Scheme 2.0 for Liabilities of NBFCs/MFIs

• • Existing Partial Credit Guarantee scheme is being revamped and now will be extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs).
  • Government of India will provide 20 percent first loss sovereign guarantee to Public Sector Banks.

Tax related measures

• • Reduction in Rates of ‘Tax Deduction at Source’ and ‘Tax Collected at Source” – The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 percent of the specified rates for the remaining period of FY 20-21.This will provided liquidity to the tune of Rs 50,000 Crore.
  • The due date of all Income Tax Returns for Assessment Year 2020-21 will be extended to 30 November, 2020, tax audit due date will be extended to 31 October 2020.
  • The date for making payment without additional amount under the “Vivad Se Vishwas” scheme will be extended to 31 December, 2020.

For Real Estate

RERA

• • State Governments are being advised to invoke the Force Majeure clause under RERA.
  • The registration and completion date for all registered projects will be extended up to 6 months and may be further extended by another 3 months based on the State’s situation.
  • Various statutory compliances under RERA will also be extended concurrently.

Boost to housing sector

• • The Credit Linked Subsidy Scheme for Middle Income Group (annual Income between Rs 6 and 18 lakhs) will be extended up to March 2021.
  • This will benefit 2.5 lakhs middle income families during 2020-21 and will lead to investment of over Rs 70,000 crore in housing sector.
  • This will create significant number of jobs by giving boost to Housing sector and will stimulate demand for steel, cement, transport and other construction materials.

Affordable Rental Housing Complexes for Migrant Workers

• Central Government will launch a scheme for migrant workers and urban poor to provide ease of living at affordable rent.
• Converting government funded houses in the cities into Affordable Rental Housing Complexes (ARHC) under PPP mode through concessionaire; manufacturing units, industries, institutions, associations to develop Affordable Rental Housing Complexes (ARHC) on their private land and operate; and Incentivizing  State Govt agencies/Central Government Organizations on similar lines to develop Affordable Rental Housing Complexes (ARHC) and operate.
• The exact details of the scheme will be released by the Ministry/Department.

Agriculture Front

For farmers through NABARD

• • NABARD will extend additional re-finance support of Rs 30,000 crore for meeting crop loan requirement of Rural Cooperative Banks and RRBs. This refinance will be front-loaded and available on tap.
  • This is over and above Rs 90,000 crore that will be provided by NABARD to this sector in the normal course.
  • This will benefit around 3 crore farmers, mostly small and marginal and it will meet their post-harvest Rabi and current Kharif requirements.

Credit boost under Kisan Credit Card Scheme

• • A special drive to provide concessional credit to PM-KISAN beneficiaries through Kisan Credit Cards.
  • Fisherman and Animal Husbandy Farmers will also be included in this drive.
  • This will inject additional liquidity of  Rs 2 lakh crore in the farm sector. 2.5 crore farmers will be covered.

Agri Infrastructure Fund

• • Financing facility of Rs. 1,00,000 crore will be provided for funding Agriculture Infrastructure Projects at farm-gate & aggregation points (Primary Agricultural Cooperative Societies, Farmers Producer Organizations, Agriculture entrepreneurs, Start-ups, etc.).
  • Impetus for development of farm-gate & aggregation point, affordable and financially viable Post Harvest Management infrastructure.
  • Fund will be created immediately.

Formalisation of Micro Food Enterprises (MFE)

• •  ‘Vocal for Local with Global outreach’ will be launched to help 2 lakh MFEs who need technical upgradation to attain FSSAI food standards, build brands and marketing.
  • Existing micro food enterprises, Farmer Producer Organisations, Self Help Groups and Cooperatives to be supported.
  • The focus will be on women and SC/ST owned units and those in Aspirational districts and a Cluster based approach (e.g. Mango in UP, Tomato in Karnataka, Chilli in Andhra Pradesh, Orange in Maharashtra etc.) will be followed.

Pradhan Mantri Matsya Sampada Yojana (PMMSY)

• • The Government will launch the PMMSY for integrated, sustainable, inclusive development of marine and inland fisheries. Rs 11,000 crore for activities in Marine, Inland fisheries and Aquaculture and Rs. 9000 crore for Infrastructure – Fishing Harbors, Cold chain, Markets etc shall be provided.
  • Cage Culture, Seaweed farming, Ornamental Fisheries as well as New Fishing Vessels, Traceability, Laboratory Network etc. will be key activities.
  • There will be provisions of Ban Period Support to fishermen (during the period fishing is not permitted), Personal & Boat Insurance.
  •  The focus will be on Islands, Himalayan States, North-east and Aspirational Districts.

Animal Husbandry Infrastructure Development Fund

• An Animal Husbandry Infrastructure Development Fund of Rs. 15,000 crore will be set up, with an aim to support private investment in Dairy Processing, value addition and cattle feed infrastructure.
• Incentives will be given for establishing plants for export of niche products.

Promotion of Herbal Cultivation

• • The National Medicinal Plants Board (NMPB) has supported 2.25 lakh hectare area under cultivation of medicinal plants. 10,00,000 hectare will be covered under Herbal cultivation in next two years with outlay of Rs. 4,000 crore.
  • This will lead to Rs. 5,000 crore income generation for farmers.
  • NMPB will bring 800-hectare area by developing a corridor of medicinal plants along the banks of Ganga.

Beekeeping Initiatives

• • Scheme for Infrastructure development related to Integrated Beekeeping Development Centers, Collection, Marketing and Storage Centers, Post-Harvest & value Addition facilities etc;
  • Capacity building with thrust on women, and Development of quality nucleus stock and bee breeders.
  • This will lead to increase in income for 2 lakh beekeepers and quality honey to consumers.

Extension of Operation Greens

• “Operation Greens” run by Ministry of Food Processing Industries (MOFPI) will be extended from tomatoes, onion and potatoes to ALL fruit and vegetables.
• The Scheme would provide 50% subsidy on transportation from surplus to deficient markets, 50% subsidy on storage, including cold storages and will be launched as pilot for the next 6 months and will be extended and expanded.
• This will lead to better price realization to farmers, reduced wastages, and affordability of products for consumers.

Amendments to Essential Commodities Act

• The Government will amend Essential Commodities Act. Agriculture food stuffs including cereals, edible oils, oilseeds, pulses, onions and potato shall be deregulated.
• Stock limit will be imposed under very exceptional circumstances like national calamities, famine with surge in prices.
• Further, No such stock limit shall apply to processors or value chain participant, subject to their installed capacity or to any exporter subject to the export demand.

Agriculture Produce Pricing and Quality Assurance

• • The Government will finalize a facilitative legal framework to enable farmers to engage with processors, aggregators, large retailers, exporters etc. in a fair and transparent manner.
  • Risk mitigation for farmers, assured returns and quality standardization shall form integral part of the framework.

Measures for supporting the poor

Free food grains supply to migrants for 2 months

• • For the migrant labour, additional food grain to all the States/UTs at the rate of 5 kg per migrant laborer and 1 kg Chana per family per month for two months i.e. May and June, 2020 free of cost shall be allocated. Migrant laborers not covered under National Food Security Act or without a ration card in the State/UT in which they are stranded at present will be eligible.
  • States/UTs shall be advised to put a mechanism for targeted distribution as envisaged in the scheme. 8 Lakh MT of food-grain and 50,000 MT of Chana shall be allocated.
  • The entire outlay of Rs. 3500 crore will be borne by Government of India.

Rs 5,000 crore Credit facility for Street Vendors

• • A special scheme will be launched within a month to facilitate easy access to credit to Street vendors, who are amongst the most adversely impacted by the present situation for enabling them to restart their businesses.
  • Under this scheme, bank credit facility for initial working capital up to Rs. 10,000 for each enterprise will be extended. 
  • This scheme will cover urban as well as rural vendors doing business in the adjoining urban areas.

Employment using CAMPA funds

• • Approximately Rs 6,000 crore of funds under Compensatory Afforestation Management & Planning Authority (CAMPA) will be used for Afforestation and Plantation works, including in urban areas, Artificial regeneration, assisted natural regeneration, Forest management, soil & moisture conservation works, Forest protection, forest and wildlife related infrastructure development, wildlife protection and management etc.
  • This will create job opportunities in urban, semi-urban and rural areas and also for Tribals (Adivashis).

Other Sector Wise Reforms

Coal Sector

Commercial Mining

• Introduction of competition, transparency and private sector participation in the Coal Sector through:
  • A revenue sharing mechanism instead of regime of fixed Rupee/tonne. Any party can bid for a coal block and sell in the open market.
  • There will be exploration-cum-production regime for partially explored blocks against earlier provision of auction of fully explored coal blocks. This will allow private sector participation in exploration.

Diversified Opportunities in Coal Sector

• • Coal Gasification / Liquefication will be incentivised through rebate in revenue share.
  • This will result in significantly lower environment impact and also assist India in switching to a gas-based economy.

Liberalised Regime in Coal Sector

• • Coal Bed Methane (CBM) extraction rights will be auctioned from Coal India Limited’s (CIL) coal mines.
  • Ease of Doing Business measures, such as Mining Plan simplification, will be taken.
  • This will allow for automatic 40% increase in annual production.

Mineral Sector

Enhancing Private Investments

• • Introduction of a seamless composite exploration-cum-mining-cum-production regime.
  • 500 mining blocks would be offered through an open and transparent auction process.
  • Joint Auction of Bauxite and Coal mineral blocks to enhance Aluminum Industry’s competitiveness will be introduced to help Aluminum industry reduce electricity costs.

Policy reforms in Mineral Sector

• • The distinction between captive and non-captive mines to allow transfer of mining leases and sale of surplus unused minerals, leading to better efficiency in mining and production shall be removed.
  • Ministry of Mines is in the process of developing a Mineral Index for different minerals.
  • There will be rationalization of stamp duty payable at the time of award of mining leases.

Defence Sector

Enhancing Self Reliance in Defence Production

• • ‘Make in India’ for Self-Reliance in Defence Production will be promoted by notifying a list of weapons/platforms for ban on import with year wise timelines, Indigenization of imported spares, and separate budget provisioning for domestic capital procurement.
  • This will help reduce huge Defence import bill.
  • Improve autonomy, accountability and efficiency in Ordnance Supplies by Corporatisation of Ordnance Factory Board.

Policy Reforms in Defence Production

• • FDI limit in the Defence manufacturing under automatic route will be raised from 49% to 74%.
  • There will be time-bound defence procurement process and faster decision making will be ushered in by setting up of a Project Management Unit (PMU) to support contract management.
  • Realistic setting of General Staff Qualitative Requirements (GSQRs) of weapons/platforms and overhauling Trial and testing procedures.

Civil Aviation Sector

Efficient Airspace Management for Civil Aviation

• • Restrictions on utilization of the Indian Air Space will be eased so that civilian flying becomes more efficient.
  • This will bring a total benefit of about Rs 1,000 crore per year for the aviation sector.
  • This will lead to optimal utilization of airspace; reduction in fuel use, time and will have positive environmental impact.

More World-Class Airports through PPP

• • 6 more airports have been identified for 2nd round bidding for Operation and Maintenance on Public-Private Partnership (PPP) basis.
  • Additional Investment by private players in 12 airports in 1st and 2nd rounds is expected to bring around Rs. 13,000 crore.
  • Another 6 airports will be put out for the third round of bidding.

Global hub for Aircraft Maintenance, Repair and Overhaul (MRO)

• • Tax regime for MRO ecosystem has been rationalized. Aircraft component repairs and airframe maintenance to increase from Rs 800 crore to Rs 2,000 crore in three years.
  • It is expected that major engine manufacturers in the world would set up engine repair facilities in India in the coming year.
  •  Convergence between Defence sector and the civil MROs will be established to create economies of scale, this will lead to maintenance cost of airlines to come down.

Power Sector

Rs 90,000 crore Liquidity Injection for DISCOMs

• • Power Finance Corporation and Rural Electrification Corporation will infuse liquidity in the DISCOMS to the extent of Rs 90000 crores in two equal instalments.
  • This amount will be used by DISCOMS to pay their dues to Transmission and Generation companies.
  • Further, CPSE GENCOs will give a rebate to DISCOMS on the condition that the same is passed on to the final consumers as a relief towards their fixed charges.

Tariff Policy Reform

Consumer Rights

• • DISCOM inefficiencies not to burden consumers
  • Standards of Service and associated penalties for DISCOMs
  • DISCOMs to ensure adequate power; load-shedding to be penalized

Promote Industry

• • Progressive reduction in cross subsidies
  • Time bound grant of open access
  • Generation and transmission project developers to be selected competitively.

Sustainability of Sector

• • No Regulatory Assets
  • Timely payment of Gencos
  • DBT for subsidy; Smart prepaid meters

Privatization of Distribution in UTs

• • Power Departments / Utilities in Union Territories will be privatised.
  • This will lead to better service to consumers and improvement in operational and financial efficiency in Distribution.
  • This will also provide a model for emulation by other Utilities across the country.

Space Sector

• Private sector will be allowed to use ISRO facilities and other relevant assets to improve their capacities. 
• Future projects for planetary exploration, outer space travel etc shall also be open for private sector.
• There will be liberal geo-spatial data policy for providing remote-sensing data to tech-entrepreneurs.

Atomic Energy

• Research reactor in PPP mode for production of medical isotopes shall be established to promote welfare of humanity through affordable treatment for cancer and other diseases.
• Facilities in PPP mode to use irradiation technology for food preservation – to compliment agricultural reforms and assist farmers shall also be established.
• India’s robust start-up ecosystem will be linked to nuclear sector and for this, Technology Development-cum-Incubation Centres will be set up for fostering synergy between research facilities and tech-entrepreneurs.

 

 

15. Consider the following statements about Measures to boost business under Atmanirbhar Bharat Abhiyan:

1. The amendments will de-clog the criminal courts and National Company Law Tribunal (NCLT).
2. The Centre has approved Defence Testing Infrastructure Scheme (DTIS) which aims to give a boost to domestic defence and aerospace manufacturing.
3. In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed.

Which of the given statements are correct?

      (a) 1 and 3

      (b) 2 and 3

      (c) 3 only

      (d) 1, 2 and 3

Answer: (d)

Explanation:

1. Statement 1 is correct: The amendments will de-clog the criminal courts and National Company Law Tribunal (NCLT).
2. Statement 2 is correct: Defence Testing Infrastructure Scheme (DTIS), which aims to give a boost to domestic defence and aerospace manufacturing.
3. Statement 3 is correct: In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed.

 

For more information read the following:

 

Measures to boost business under Atmanirbhar Bharat Abhiyan

Related to IBC

• Minimum threshold to initiate insolvency proceedings has been raised to Rs.1 crore (from Rs.1 lakh, which largely insulates Micro, Small and Medium Enterprises-MSMEs).
• Special insolvency resolution framework for MSMEs under Section 240A of the Insolvency and Bankruptcy Code (IBC) will be notified.
• Suspension of fresh initiation of insolvency proceedings up to one year, depending upon the pandemic.
• Empowering the Central Government to exclude Covid-19 related debt from the definition of “default” under the IBC for the purpose of triggering insolvency proceedings.

Related to the Companies Act

• Decriminalization of Companies Act, 2013 violations involving minor technical and procedural defaults (shortcomings in Corporate Social Responsibility (CSR) reporting, inadequacies in Board report, filing defaults, etc).
• Majority of the compoundable offences sections to be shifted to Internal Adjudication Mechanism (IAM).
• The amendments will de-clog the criminal courts and National Company Law Tribunal (NCLT).

Ease of Doing Business for Corporates

• Direct listing of securities by Indian public companies in permissible foreign jurisdictions.
• Private companies which list Non-Convertible Debentures (NCDs) on stock exchanges not to be regarded as listed companies.
• Power to create additional/specialized benches for National Company Law Appellate Tribunal (NCLAT).
• Lower penalties for all defaults for Small Companies, One-person Companies, Producer Companies and StartUps.

Public Sector Enterprise Policy for a New, Self-reliant India

• List of strategic sectors requiring the presence of Public Sector Enterprises (PSEs) in public interest will be notified.
• In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed.
• In other sectors, PSEs will be privatized (timing to be based on feasibility etc.).

Defence Testing Infrastructure Scheme

• Union Government has approved the launch of Defence Testing Infrastructure Scheme (DTIS).
• It aims to give a boost to domestic defence and aerospace manufacturing.
• It has an outlay of Rs 400 crore for creating state of the art testing infrastructure for defence testing sector.
• It envisages to setup six to eight new test facilities in partnership with private industry.
• This will facilitate indigenous defence production, consequently reduce imports of military equipment and help make the country self-reliant.
• The projects under the Scheme will be provided with up to 75% government funding in the form of ‘Grant-in-Aid’.
• The remaining 25% of the project cost will have to be borne by the Special Purpose Vehicle (SPV) whose constituents will be Indian private entities and State Governments.
• The SPVs under the Scheme will be registered under Companies Act 2013 and shall also operate and maintain all assets under the Scheme, in a self-sustainable manner by collecting user charges.
• While majority of test facilities are expected to come up in the two Defence Industrial Corridors (DICs), the Scheme is not limited to setting up Test Facilities in the DICs only.

Defence Industrial Corridor in India

• Union Government in 2019, has set up defence industrial corridors in Uttar Pradesh and Tamil Nadu.
• These defence corridors will facilitate a well-planned and efficient industrial base that will lead to increased defence production in the country.
• The corridors overlap with existing defence public sector companies, and aim to ensure connectivity among various defence industrial units.

1. Uttar Pradesh Defence Industrial Corridor includes – Lucknow, Kanpur, Agra, Aligarh, Chitrakoot and Jhansi.
2. Tamil Nadu Defence Industrial Corridor includes – Chennai, Hosur, Salem, Coimbatore and Tiruchirappalli.

Special Purpose Vehicle

• A Special Purpose Vehicle (SPV) is a legal entity that is formed for a well-defined, sole and narrow purpose.
• It is generally a company formed to fulfill one or a group of narrow objectives by its promoters.
• SPVs are generally formed to isolate a company’s assets or activities.
• The activities or assets are distanced into the new entity, i.e., the SPV and so investors or lenders feel more comfortable.
• It is basically a means to separate the risk and free up capital.
• The SPVs and the sponsoring company (sometimes the parent company) are insured against the risk of bankruptcy.
• SPVs are also used to securitize loans or any other receivables.
• Other uses of SPVs include circumventing certain regulatory constraints, maintaining the confidentiality of intellectual property, property investing especially in countries that have different tax rates for property sale gains and capital gains.
• Objectives of SPV are

1. Securitization – Banks create SPVs commonly to securitise loans.
2. Risk-sharing –SPV creation allows companies to legally isolate risks of a project.
3. Property sale – If the taxes on property sales are higher than that of the capital gain, a company can establish an SPV which will own the properties for sale. Then, it can sell the SPV instead of the properties and then pay tax on the capital gain instead of the property sales tax.
4. Asset transfer– If certain assets are hard to transfer, a company can create an SPV to own these assets. After that, the company can sell the SPV as a part of a mergers and acquisitions process.

 

 

16. Consider the following statements about National Migrant Information System (NMIS):

1. It has developed by Ministry of Labour.
2. It is to maintain a central repository of migrant workers and help in speedy inter-state communication.
3. Because of the contacts numbers of migrants it is the most disputed online portal.

Which of the given statements is/are not correct?

      (a) 1 and 2

      (b) 1 and 3

      (c) 2 only

      (d) 1, 2 and 3

Answer: (b)

Explanation:

1. Statement 1 is incorrect: the National Disaster Management Authority (NDMA) has developed.
2. Statement 2 is correct: maintain a central repository of migrant workers and help in speedy inter-state communication.
3. Statement 3 is incorrect: The mobile numbers of people can be used for contact tracing and movement monitoring during Covid-19.

 

For more information read the following:

 

National Migrant Information System (NMIS)

• Recently, the National Disaster Management Authority (NDMA) has developed an online dashboard called ‘National Migrant Information System (NMIS)’.

More Information

• The online portal (NMIS) would maintain a central repository of migrant workers and help in speedy inter-state communication to facilitate the smooth movement of migrant workers to their native places.

• The key data pertaining to the persons migrating has been standardized for uploading such as name, age, mobile no., originating and destination district, date of travel etc.
• States will be able to visualize how many people are going out from where and how many are reaching their destination States.
• It has additional advantages like contact tracing, which may be useful in overall Covid-19 response work.
• The mobile numbers of people can be used for contact tracing and movement monitoring during Covid-19.