Extra 2020 PDF

MRUNAL’S ECONOMY WIN20CSP UPDATE PACK FOR 19’S BATCHES PILLAR#1
 The advantage of buying Iphone, Oneplus, Nokia or AndroidOne series of phones is they provide (free) operating system
updates/security patches for 2-3 years. I believe coaching industry too needs to adopt similar business practice.
 So, this ‘Win20CSP update patch/handout’ is for my old batch students who had joined my economy classes anywhere
between Jan-2019 to Jan 2020. It contains updates since the end of last year’s UPSC Prelim-2019, including Full Budget
2019 (that came in July after election), (SkyBlue cover) Economic Survey 2018-19, (Purple cover) Economic Survey
2019-20, Budget-2020 and other Current Affairs Updates from newspapers
Take printout → fill up the blanks through my (FREE) lectures for this purpose → don’t staple but punch them & add in
your existing handout file, after appropriate pillars.
10: PILLAR#1A1: MONEY-BARTER TO BITCOIN KE UPDATES
10.1 💸COINS AND NOTES

10.1.1 💸👩‍🦯🤳🏻RBI’s App to help the blind identify currency notes
80 lakh people in India are blind (नेत्रहीन). To help them identify currency notes:
- Old series of Gandhi notes have square (50), triangle (100), circle (500) diamond (1000)
- New series of Gandhi notes have bleed lines, raised printing of Gandhi etc.
- But, so many varieties of notes, difficult for them to remember size & shapes so,
- IIT Ropar developed Roshni App.
- 2020-Jan: RBI launched ‘_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ’ App. Mobile
camera scan & identifies the note (Even if it’s half folded), gives audio notification in
Hindi/English, also works offline. But can’t validate whether note is genuine or fake
(Counterfeit). by _ _ _ _ _ _ Software company has developed it for RBI. If a user is
both blind and deaf, the app will identify note by giving different set of vibrations.
10.1.2 💼Budget-2020: A museum for coins

- a museum on numismatics and trade (सिक्काशास्त्त्र और व्यापार का िंग्रहालय) will be built at
the historic ‘Old Mint Building’ in _ _ _ _ _ .
10.2 💳DIGITAL PAYMENTS / LESS CASH ECONOMY

10.2.1 💳 ⏰NEFT becomes free & available 24/7
NEFT RTGS IMPS
Who runs RBI RBI NPCi
Timing - originally: not on holidays, not 24/7 Not on 24/7 on all days
- From 2019-Dec: 24/7 on all days. holidays
Although settlement at 30-30 min Not 24/7
Fees? - 2019-Jul: RBI waived the charges on NEFT and Not free, though SBI
RTGS, & asked banks to pass benefit to & others gives free
customers. upto “₹.x”
Mrunal’s Economy Win20CSP Updates for 2019 Batch students Pillar#1 → Page 1
10.2.2 💳Digital Payment → MDR developments
 Merchant Discount Rate (MDR: व्यापाररक छूट दर) is the fees that a merchant must pay to
his (acquirer) bank for every credit / debit card transaction. MDR fees is shared among
3 parties
✓ 1) customer’s card issuing bank
✓ 2) merchant’s acquiring bank
✓ 3) payment gateway provider e.g. Mastercard, Visa, Rupay
 2020: RBI allowed RRBs to act as acquiring banks. This will help expanding card
network in rural areas.
 2019: Nirmala.S’s Full Budget: If biz.firm turnover >₹ 50 crore → It must provide
facility to accept Rupay debit card and UPI QR code. (Else penalty under Income Tax
Act) → NO MDR on such transaction. RBI and Banks will absorb this ‘burden’ as a
benefit of not handling so much cash. (Payments and Settlement Systems Act, 2007
rules amended for this part).
10.2.3 👨‍⚖‍💳New Umbrella Entity (NUE) for Retail Payments System (2019)
 Presently, Paytm has rival companies like Mobikwick, Phonepe; Mastercard X Visa; SBI
X Axis Bank; but there is no rival company against NPCi.
 NPCi is an umbrella entity for retail payments system - it operates in card payment
(RuPay), Money transfer (IMPS), Mobile Apps (UPI, BHIM), ATM Network (NFS) etc.
 2020-Feb: RBI issued a draft proposal, “if any Indian company interested to compete in
this (NPCi-like) retail payment segment, we’ll license them as new umbrella entity
(NUE: खुदरा भुगतान के सलए नई छतरी इकाई). Subject to these technical “XYZ” eligibility
requirements.”
 Benefits? More companies like NPCi → more competition → more Innovation and
cheaper services for users. But, still in the draft stage, so #DONT-LOSE-SLEEP
10.2.4 🚕💳 National Common Mobility Card (NCMC, 2019)

Ministry of Housing & Urban Affairs (MoHUA) got India’s 1st indigenously developed ‘One
Nation One Card Model’ with the help of NPCi, Bharat Electronics Limited (BEL), CDAC and
some banks. It has 3 components:
 1) NCMC Card: To be issued by banks. Nature can be Debit/Credit/Prepaid. Can be

used for metro, bus, suburban railways, toll, parking, smart city payments and retail
shopping.
 2) SWEEKAR: Automatic Fare Collection System.
 3) SWAGAT: Swachalit / Automated Gate.
10.2.5 🚕💳 FASTag for paying toll fees at highways (2017)
FASTags are prepaid rechargeable tags that allow for automatic toll collection at
electronic toll collection gates Radio-frequency Identification (RFID)technology.
✓ 2013 onwards Govt required vehicle manufactures to install RFID tags on windscreens.
✓ 2017: National Highways Authority of India (NHAI, a statutory body under Highways
ministry) launched 2 mobile apps MyFASTag and FASTag Partner to facilitate
Electronic Toll Collection (इलेक्ट्रॉनिक पथकर/टोल विूली).
✓ Persons loads up ₹ ₹ in his mobile app → actives RFID tag in his car → when it passes
through highway toll-booth, the money is automatically deducted = faster traffic
movement. (and hidden benefit: tracking of vehicle theft, criminal’s movement etc)
✓ FASTag is vehicle specific and once it is affixed to a vehicle, it cannot be transferred
to another vehicle.
✓ NPCi’s has National Electronic Toll Collection (NETC) provides technological support.
✓ Highways Ministry is also trying to bring inter-operability (आंतरसंचालनीयता) of the
FASTags i.e. single FASTag can be used for paying ₹
- at State Highways Toll Plaza (under State Governments’ purview) as well as
- at National Highways Toll Plaza (under Union Government’s purview).
✓ From 15th January 2020, it shall be mandatory for all vehicles passing through tolls to
have FASTags. Vehicles without FASTags will have pay up 2x normal rates at toll gates.
10.2.6 🕵🏻📒💳 RBI’s Nandan Nilekani Panel (2019: Jan to May)

Nilekani (Ex-chairman of UIDAI) gave total 70+ suggestions. Notable among them are:
Suggested Reforms @Government
 Under Direct Benefit Transfer (DBT: प्रत्यक्ष लाभ अंतरण) mechanism, Government
transfers subsidies and payments directly to beneficiaries account such as MGNREGA or
Pahal-LPG subsidy. But poor people withdraw cash from bank account entirely because
local merchants not accepting digital payments. So, raise awareness about BHIM-UPI
and its adoption.
 Government’s MDR subsidy expires on 2019-Dec. Extend it for another 2 years.
 Give companies tax incentives (कर प्रोत्िाहन) for using digital payments. Reduce the
taxes on the devices required for digital payments.
 Government organizations should not charge convenience fees (सुविधा शुल्क) from
citizens while accepting digital payments. GSTN portal should allow card payments.
 National Common Mobility Card (NCMC): Allow its usage in all transit routes and PoS.
Future mobiles may have NFC technology, then cards may become redundant anyways.
 Setup Computer Emergency Response Team for finance (FIN- CERT: आपातकालीन
प्रततक्रिया टीम).
Nilekani’s Suggested Reforms @RBI

 RBI should prepare area wise ‘Digital Financial Inclusion Index’ (डिजिटल ववत्तीय िमावेशन
िूचकांक) to monitor progress & take remedial steps. Ensure no user is more than 5 kms
away from a banking access point. Local vendor should be made Banking
Correspondent (BC: बैंकसमत्र).
 Setup an Acceptance Development Fund (डिजिटल भुगतान स्त्वीकृतत ववकाि तनधि) to
develop digital payment infrastructure in poorly served areas e.g. subsidy on PoS
devices. RBI and Banks should co-contribute ₹ ₹ in this fund.
 Reduce the MDR / card payment fees. Allow customer to do “x” no. of digital payment
transactions per month with no charges.
 RBI should make NEFT available 24/7 and review charges on its usage. (2019-June: RBI
removed charges on both NEFT and RTGS and asked the banks to pass on the benefits
to customers.)
Nilekani’s Suggested Reforms @NPCi

✓ NPCI should offer RuPay and BHIM UPI in other countries to facilitate remittance to
India.
✓ Encourage local language apps/ software for digital payments.
Nilekani also suggested many technical reforms but notimp4exam
🔠❓MCQ. Who among the following was the Chairman of the Committee on Deepening
Digital Payments appointed by the RBI ? (Asked in CDS2019-II-Q116)
(a) H.R.Khan (b) Nandan Nilekani (c) N.R.Narayana Murthy (d) Sanjay Jain
10.2.7 💳📒🕵🏻 Payment and Settlement Systems in India: Vision 2019 – 2021
RBI published this document in 2019-May. it repeated most of the points that Nilekani
report said. As such not much IMP unless preparing for RBI exams, then
rbi.org.in/Scripts/PublicationVisionDocuments.aspx?Id=921
10.3 💮🔗 MONEY’S EVOLUTION → CRYPTOCURRENCY

10.3.1 💮🔗🐯 Cryptocurrency & India → RBI ban revoked by SC
Since 2013, RBI had been warning Indians not to get involved in cryptocurrency due to
frauds, tax evasion and terror finance.
- 2018: RBI directed all banks/NBFCs/PPI/mobile-wallet companies to stop relations
with any Cryptocurrency company.
- Then certain cryptocurrency exchange website companies like CoinDCX etc went to SC
alleging that
o Parliament has not made any law declaring this activity as illegal (unlike
possession cocaine / narcotics.)
o Even Japan, USA, Singapore etc has not completely banned investment in
cryptocurrency but imposed regulations to control its misuse/fraud.
o Anekantavada philosophy of Jainism: 4 blind men try to describe an elephant
but end up describing only one physical feature of the elephant.
o Similarly, without fully studying the nature/impact of cryptocurrency, a
blanket ban was placed, which has killed their business since no bank is opening
their bank accounts.
- 2020-March: SC revoked the RBI ban because:
o Article _ _ _ _ _: All citizens have the right to practise any profession (व्यविाय
का हक)- including those companies dealing with cryptocurrency.
o Same objective (financial fraud protection) could be achieved by imposing a
less drastic ban.
o So, RBI ban did not pass the test of _ _ _ _ _ _ _ _ (अनप
ु ाततकता की परीक्षा).
What next? RBI may release a calibrated regulation on cryptocurrency e.g. PAN card
required, can’t invest more than ₹”x” lakh per month etc. topic is still developing.
10.3.2 💮🔗 Cryptocurrency & India → ⚖️ Banning of Cryptocurrency Bill, 2019

 Ministry of Finance→ Department of Economic Affairs has proposed a draft bill called
the ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’
(क्रिप्टोक्यूरेंिी पर प्रततबंि और आधिकाररक डिजिटल मुद्रा का ववतनयमन वविेयक, 2019).
 It aims to ban the use of all types of cryptocurrencies issued by private operators. Non-
bailable offense (गैर-िमानती अपराि), jail upto 10 years.
 However, (if and when) RBI launches a blockchain-based digital currency, it’ll be
permitted. Anyways, the Bill still in the draft stage, so #DONT-LOSE-SLEEP
10.3.3 💮🔗🥇 Cryptocurrency & world → Stable-coins

Stablecoin is a type of cryptocurrency whose price is backed by a reserve asset like gold /
dollar / fiat currency e.g. Facebook’s proposed _ _ _ __ , Tether, Basecoin, and TrueUSD.
 But, stablecoins also have challenges: 1) money laundering (िनशोिन / काले िन को वैि
बनाना) 2) terror financing (आतंकी ववत्तपोषण) 3) lack of consumer protection (उपभोक्ता
िंरक्षण की कमी) 4) financial frauds (ववत्तीय िोखािडी).
 2019-Dec: European Union announced, “No stable coins shall be allowed in the EU
until we frame law for it.”
 2019-Jun: G20 summit at Osaka, Japan. The leaders announced similar precautions.
10.3.4 🌐👶🔗💮 Cryptocurrency & world → UNICEF’s Crypto Donation Fund

- UN International Children's Emergency Fund (UNICEF, HQ- New York,USA; 1946)
- 2019-Oct: UNICEF setup a Cryptocurrency Fund to accept donations in
cryptocurrencies. It has become the first UN organization to accept cryptocurrency
<deliberately left empty for page break before next subpillar starts, so you can file the pages accordingly in ur file>
11🐯 PILLAR#1A2: MONETARY POLICY
11.1 📔📔ES20 DATA ON MONEY SUPPLY
Figure 1: zigzag pattern means 'not increasing steadily'.
ES20: Between mid-1990’s to 2016-17: Money multiplier (measured as a ratio of

M3/M0) was mostly increasing. But 2017-18 onwards: Money Multiplier is declining. Could
be attributed to the lack of growth in loaning activities & slowdown in economy.
🔠❓ Money Multiplier in an economy increases with _ _ _? (Asked in Pre-2019)
A. Increase in the cash reserve ratio

B. Increase in the banking habit of the population
C. Increase in the statutory liquidity ratio
D. Increase in the population of the country
11.2 📔📔ES20: DATA ON MEASURES OF MONEY SUPPLY [M1, M3]
Sufficient of remember that Broad money (M3) growth has declined but not in a steady
manner. Beyond that, how/why rise/fall …all that PHD poor cost-benefit.
11.3 🐯 RBI’S MONETARY POLICY TOOLS: UPDATES
11.3.1.1 🐯🗄✂️🗓 CRR Exemption for 5 years (सीआरआर में छूट)

 CRR: first suggested by the British economist J.M. Keynes & first introduced in US
Federal Reserves (=Central Bank of USA).
 Banks must keep this much deposits (or balance) with RBI. RBI doesn’t pay interest on
it usually.
 2020-Feb: RBI announced following to Scheduled Commercial Banks (SCB)
 Whatever new (retail) loans you give for 1) automobiles 2) residential housing / home
mortgages. 3) MSMEs [After 31/Jan/2020 upto 31/Jul/2020]
 You can subtract that much loaned ₹₹ amount from deposits while computing cash
reserve ratio (CRR) for the next five years (from the date when the loan was given or
other technical norms, which are not important).
 In other words, if a bank gives more loans to the above 3 sectors, it’ll have to keep ⬇
CRR → ⬆ loanable funds → profit to the bank. And more loans → more business
activity → economic growth.
11.3.2 🐯🔪🗓 Long Term Repo Operations (LTROs)

 Usually, Repo loans are for short term borrowing from overnight to 14-days.
 But, 2020-Feb: RBI announced to conduct Long Term Repo Operations (LTROs: दीिध
अवधि के रे पो ऋण) of _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ tenors.
 RBI will loan total ₹ 1,00,000 crore, in various rounds through E-Kuber platform.
 RBI’s clients can apply to borrow a minimum ₹1 crore or higher.
 Interest rate: prevailing repo rate. Interest rate will be compounded annually.
 This will increase loanable funds with banks → economic growth can be revived.
 MSF and (short term) repo lending will also be continued separately as per their own
existing norms. LTRO doesn’t aim to eliminate / replace them.
Further operational guidelines, how it impacts the bond yields etc. = poor cost: benefit
11.4 🐯📢🗃🧬MONPOLICY: QUANTITATIVE TOOLS → OPERATION TWIST

Before that, you’ve to be aware of some many basic concepts:
11.4.1 🔪🗃:Security → Debt → G-Sec & Bonds

A ‘Security’ means a certificate/document indicating that its holder is eligible to receive a
certain amount of money at a particular time. This could be a…
Borrower Government Corporate

Short term Treasury bills, Cash Management Bill of Exchange, Commercial
(less than 1 bills Papers, Promissory Notes.
year) →
Long term G-Sec, Sovereign Bonds Bonds / Debentures
(1 year/>) →
Usually lower than Corporates’ Depends on following factors →
Interest rate
because risk is low
11.4.2 🔪🗃:🤵Corporate Bonds: factors that determine its interest rate
If companies want to borrow money, they may issue bonds to investors. e.g. “Whoever
buys this Reliance Bond worth ₹1000, we will pay him 9.40% interest rate per year and
return the principal after 15 years.” Usually the interest rate offered on such bonds
depends on
Factor How it determines corporate bond interest rate

(Risk) Credit Lower credit rating (e.g. CCC or D) → higher interest rate needs
rating of company to be offered because risk of default is high.
Inflation why/how: Ans. Ref: Pillar1C → Inflation Indexed Bonds
Bank deposit Higher the (Bank) deposit interest rate, higher bond interest rate
interest rates needs to be offered to attract households to shift money from
bank savings/FD to corporate bonds.
Yield on G-Sec If G-Sec yield increases, then corporate will have to offer even
higher bond interest rate to attract the investors from G-Sec
investment towards C-Bond investment. (This was primary motive
for Operation Twist)
11.4.3 🔪🗃: 🤑 Bond Yield

 Bond yield is the profit an investor earns on a bond investment.
 Suppose, Government issues a G-Sec or Bond: 8% annual interest, tenure: 1 year
 Bhide Master invests ₹ 100. So, upon 1 year maturity he’ll get ₹ 8 Interest + ₹ 100
Principal = ₹ 108. So his profit or yield will be= 8%
 But suppose, before maturity of 1 year, Bhide Master urgently needs cash. So he sells ₹
100 facevalue bond to Jethalal at a discounted price of ₹90
 Jethalal keeps the it till maturity → Government pays him ₹ 108. So, for Jethalal the
profit OR current bond yield to maturity is….
108−90
=( ) ∗ 100 = 20%
𝑜𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑜𝑓 ₹ 90
11.4.4 🔪🗃: 🤑 Bond Yield ∝ 1/Price

- Bhide bought @100, his yield is 8%; Jetha bought @90, his yield is 20%.
- Thus, Bond yield is inversely related to the current selling price of the bond in the
secondary market.
- If a bond’s demand increases → its selling price will increase → bond yield decrease
(Because of inverse relation)
11.4.5 🔪🗃: 🤑 Bond yield: other factors affecting it

- If the economy is booming, companies are making great profit, investors may sell
bonds at lower prices in a hurry to unlock their money to invest it in shares of
companies, because they think it’ll get them more dividend. Then bond’s current
selling price in the secondary market falls → yield increases.
- If the economy is facing recession (Continuous decline in growth rate) → companies
will NOT make great profit → investors sell shares, and prefer to buy bonds hoping
they’ll get secured fixed interest. Then bond’s demand increases in the secondary
market → selling price increases → yield declines.
11.4.6 🐯📢🗃🧬Operation Twist: why?

- Commercial banks were reluctant to lend money to private sector companies because
of the problem of Bad Loans /Non Performing assets (NPA: More in Pillar1B-2).
- If such companies could borrow money by issuing corporate bonds (at cheaper interest
rate) → more factories, more jobs, more production, more GDP.
- RBI decided to attack the third factor: “If the yield on long term G-Sec decreased,
then automatically Corporate Bond interest rates could also decrease.”
11.4.7 🐯📢🗃🧬RBI’s Operation Twist: methodology (2019-Dec)

Since RBI’s existing monetary policy tools had failed to make loans cheaper for corporates
/ boost the economy. So in 2019-Dec, RBI started a “special OMO” wherein:
RBI _ _ _ _→ shorter -term G-Sec (of 1 year & higher tenor) worth ₹10,000 crore
RBI _ _ _ _ → bought longer -term G-Sec (of 10-14 years tenor) worth ₹10,000 crore
(i.e. equal amount as above, so as to keep money supply neutral)
- Since RBI started buying long-term G-Sec, their demand will rise → price will rise →
yield is lowered. The 10YearGSec’s yield lowered from 6.75% to 6.60%
- And we’ve already learned, Corporate bonds are priced (benchmarked) keeping G-sec
yields in mind.
So, Op Twist → Lower G-Sec yield means →
✓ Private companies can borrow money by issuing their (long term) C-Bonds at much
cheaper interest rate than before.
✓ When a private company meets a bank manager to borrow money, it can negotiate the
loan price, “If your bank does not lend me money at this cheaper interest% then I will
issue my own corporate bonds.” → Even the bank lending rates for corporate loans
could be reduced.
✓ Investor of long term G-Sec will feel discouraged to hold the G-Sec till maturity (10-14
years), He will try to sell it to another party/RBI and pull out his money, then he may
park ₹₹ it a Corporate Bond / Bungalow / car / Goa-vacation etc. Thus, it helps boost
the consumption → economy grows.
समज में आ गया हो तो बढ़िया है , नह ं तो रट्टा मारो जजंदाबाद:

1. 1961: "Operation Twist" was first used by the _ _ _ _ _ _ _ _ _ .
2. 2019: RBI used also done it. Officially called “Special Open Market Operation (OMO)
wherein the Central bank simultaneously buys and sells G-sec of varying maturities to
adjust their yields. Which helps reduce interest rates on corporate bonds/debentures
→ easier to mobilize investment → factory expansion → jobs, GDP growth.
3. Primary objective of Op-Twist-2019 was to borrowing cheaper for corporates through
bond market. It was NOT MEANT For fighting inflation.
4. It ensures better Monetary Policy transmission for economic growth. (because simply
reducing the repo rate has not helped much in making loans cheaper, for corporates.)
5. Net liquidity remains unchanged because ₹10,000 crore goes in and the same amount
comes out of the market.
Beyond this, further PHD on what/why/how = poor cost:benefit for MCQs.For
example “The simultaneous sale of short-term bonds, on the other hand, helps push up
short-term rates which had fallen below RBI's benchmark rate. This would not only correct
the anomaly in the short- and long-term rates ” …. All this is not important for the scope
of competitive exams.
11.4.8 🔪🗃: 🤑 Bond Yield: Related Concepts

Following concepts are not related to monetary policy topic. But I’m shifting them from
Handout Pillar:1C (SEBI-Sharemarket-Bonds) to here for faster revision, since you’ve just
learnt the bond yield topic:
11.4.9 🔪🗃: 📉😟 Inverted Yield Curve = recession is coming

 Yield graph measures the yields of short term and long-term bonds.
 Normally, the Yield on short term bonds << (lower than) Yield on long term bonds.
 But, if the Yield on short term bonds >> (greater than) Yield on long term bonds, then
it is said “Yield Curve has become inverted.”
 Inverted Yield Curve hints that economic recession is coming. This has happened in
the USA. e.g. in 2007 just before the subprime crisis led recession.
 2019: Again, Inverted Yield Curve seen in USA, so investors are selling companies’
shares fearing that recession will come = companies’ profit / dividend will decline.
 Then such scared investors prefer to park money in safe assets like gold → gold
demand rises → gold price increases.
Why/How/What are the other 500 type ke implications? Ans. That M.com/PhD
beyond the scope of UPSC exam.
11.4.10 🔪🗃: 📉 🍕🤯 Negative Bond Yield

 2002: Italy switched its official currency from Italian _ _ _ to Euro currency.
 2019: Italy is undergoing great political and economic crisis. (why/how: NotIMP)
 So, Italian mutual funds and pension funds panicked, and began parking clients’ money
in German Governments’ bonds (currency denomination: Euro) thinking it is much safer
investment.
 Ultimately, a German bond which will return total 108 Euro as principal+maturity, is
being sold at 110 Euro in the secondary market because of this high demand. (Numbers
are hypothetical).
 Here, investor’s yield will be ((108-110)/110) x 100= MINUS -0.02% = This is Negative
Bond Yield = Investor will make losses.
 But Italian mutual funds and pension funds feel this is still better than investing in
Italian banks, companies or Italian G-Sec where they’ll be making EVEN BIGGER losses.
(Then why don’t they invest in gold or real estate to be more safer!!?? Because Italian
regulatory norms don’t permit it.)
Beyond that, Why/How/What are the other 500 type ke cause and consequences?
Ans. That Italian M.com/PhD beyond the scope of UPSC exam.
11.5 🐯📢RBI’S BI-MONTHLY MONETARY POLICIES
Table 1: Monetary Policy Committee members replaced:
RBI side (3 members) Govt. Side (3 members)

1. RBI Governor, as the Ex-officio Chairman. 1. Dr. Chetan Ghate, Indian Statistical
2. Dy.Governor responsible for Monetary Policy. Institute
Michael Patra (from 2020-Jan). Earlier Viral 2. Dr. Pami Dua, Delhi School of
Acharya. Economics
3. One person nominated by RBI Central Board: Janak 3. Dr. Ravindra H. Dholakia, IIM-A
Raj (Executive Director, RBI). Earlier it was
Michael Patra.
Upto Feb-2019 updates should be in your existing handout. Afterwards:

Apr- - Repo cut 25bps (6.25% → 6.00%), stance kept at Neutral.
2019 - Decision not unanimous. Dy. Gov. Viral Acharya fears inflation due to Oil &
El Nino. But, Gov.Shaktikanta Das feels the declined sale of vehicles, air &
sea traffic is pointing to deflationary trend ahead, so rate cut necessary.
- Loan interest rates: External Benchmark mechanism was to be implemented
from 1/4/2019 but decision deferred after bankers’ feedback.
Jun- - Repo Cut 25bps (6.00% → 5.75%), Consequently, the reverse repo rate
2019 @5.50%. MSF and Bank Rate @6%
- Stance: changed from Neutral to accommodative = next time Committee
may decrease the repo rate or keep it unchanged, but, no chances of rate
hike.
- Committee voted unanimously for rate cut because, IMD has predicted 96%
normal monsoon, so high level of food inflation seems unlikely. Fuel prices
rose but overall inflation is offset by falling of other commodities prices.
Thus, CPI inflation remained unchanged at around 3%. Slowdown in trade and
manufacturing due to US-China trade war, and other geopolitical issues. So
cheaper loans required to boost demand and mfg.
measures to promote digital economy
- RBI waives NEFT & RTGS charges. Banks will be required, in turn, to pass
these benefits to their customers.
Aug- - Repo cut _ _ _ (5.75-0.35=5.40). This is largest ever cut in a single time;
2019 accommodative stance.
- RBI’s NEFT will function 24/7 basis on all days, from 2019-December.
- Banks lending to NBFC (who is lending to agro,MSME, housing) will be
counted under Bank’s PSL quota achievement.
- External Benchmark for loans from 1/10/2019.
Oct- - Repo cut 25bps (5.40-0.25=5.15); accommodative stance.
2019 measures to promote digital economy
- We’ll set up an Acceptance Development Fund (ADF: डिजिटल भुगतान स्त्वीकृतत
ववकाि तनधि) as recommended by the Nandan Nilekani Committee on digital
payments.
- We shall identify one district per State/UT, & develop it as 100% digital
payment enabled.
- Large sized Prepaid Payment Instrument (PPI) companies such as Amazon
Pay, Mobikwick etc. will be required to setup Internal Ombudsman (आंतररक
सशकायत तनवारण अधिकारी) to reduce workload of RBI’s digital ombudsman.
Dec- - No changes in Repo Rate or Stance. (_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ stance)
2019 - heavy unseasonal rains → onions & other vegetables supply disrupted →
price rise.
- Pulses’ area under cultivation is declining → supply declining → price rise.
- Milk became more expensive due to rise in fodder prices.
- 13 states’ Electricity distribution companies (DISCOMs) have increased
Electricity prices.
- So, if repo reduced → inflation problem may worsen.
- At the same time, the economy is facing slowdown, sales are down so, if
repo increased → slowdown may worsen. So, the MPC Committee
unanimously decided to keep repo unchanged.
- Regulatory updates related: Urban Co-operative Banks (UCB), Small Finance
Banks, Semi-closed PPI etc in respective pillars.
Feb- - No changes in Repo Rate or Stance because of reasons similar to Dec-2019.
2020 - CPI Inflation rose to 7.4% in december-2019 (which is outside the statutory
limit of 2-6%) & this inflation rate is highest since 2014-July. So, ideally, RBI
should have increased repo rate to combat inflation but
o 1) December-2019 policy had kept Accommodative stance = repo
couldn’t be increased. It could only be kept same/reduced.
o 2) Union Budget-2020 announced various measures to boost economic
growth so Committee preferred to wait & watch how those measures
impact inflation and growth, before changing repo rate.
RBI announces Measures to promote economic growth::
1. LTRO:_ _ _ _ _ _ _ _ _ _
2. _ _ _ _ Exemption based on (new) loans given for 1) automobiles, 2)
residential housing and 3) MSMEs
RBI announces measures to promote digital economy
1. Regional Rural Banks (RRBs) will be allowed to operate as ‘merchant
Acquiring Banks’ (Ref: 1A).
2. RBI to construct a “Digital Payments Index” (DPI) to capture the growth of
digital payments across India.
11.5.1 🔪🤲🏻🏠🛵 Bank’s loan interest rate: External Benchmark (बाहर बेंचमाकक,2019)
Earlier, commercial banks decide their lending rates as per RBI’s Marginal Cost of
Funds based Lending Rate (MCLR). But it did not function effectively in passing the repo
rate cuts to end-borrowers. So, RBI ordered following from 1st October 2019.
1. Banks must link their loan interest rates with “_ _ _ _ _ _ _ _ _ Benchmark + Spread +
Risk premium” system.
2. Individual bank free to pick any one External Benchmark such as
1) RBI repo rate or
2) _ _ _ _ _ _T-bill yield or
3) _ _ _ _ _ _T-bill yield or
4) any other benchmarks by Financial Benchmarks India Ltd.
3. Banks must feed the latest data of external benchmark in above formula, atleast once
every three months.
4. Benefits? Same benefits which MCLR couldn’t fully deliver.
5. It’s applicable to the new loans given to
1) personal loans (taken for any sudden emergency expenditure)
2) retails loans (home, vehicle, electronics etc)
3) Loans to micro & small enterprises
4) Loans medium enterprises (this 4th category is to be added from 1/April/2020).
ES20: The growth of credit to Micro, Small and Medium Enterprises and Textiles has
been negative in 2019. (In other words, banks have loaned less amount of money to them
compared to the previous year). Only in personal loans, there has been a slight growth.
12: PILLAR#1B1-CLASSIFICATION OF BANK-NBFC
12.1 🤩 GOLDEN ANNIVERSARY OF NATIONALIZATION- 📔📔ES20

Economic Survey 2019-20 (released on 31/01/2020) Vol1Ch.07 observed:
- First round of bank nationalisation was done in 1969 wherein 14 Private banks with ₹
50 cr/> deposits were nationalized e.g. Bank of Baroda, PNB, Dena, Canara etc.
- so, 2019-1969=50 years Golden anniversary of the bank nationalisation. (तनिी बैंकों के
राष्ट्रीय करण की स्त्वणध ियंती)
Positive Negative
✓ After nationalisation, the number of Bank ❖ From 1960s to 80s: The Government had
branches in India, the amount of loan given launched 1) "green revolution" 2) focused
to farmers and villagers= has increased. on poverty removal through five year
✓ This greatly contributed to the agriculture plans.
production and poverty removal in the rural ❖ RBI had initiated selective credit control
areas. tools & moral suasion to channelize more
✓ PSBs account for 70% of the banking loans to farmers.
business in India. ❖ So, those actions were responsible for
boosting agriculture & reducing poverty.
✓ Bank nationalization itself has not helped
in it much.
12.1.1 🦄> 🦁: Private sector banks are better than PSBs

ES20 gave tonnes of depressing data about PSBs such as
Indicators : PSBs =losers : PvBs= winners

Total NPA in Majority of NPA here less
Indian Banks
Total Bank >90% occur in PSBs Hardly 7%
frauds in India
Return on For every ₹1 that the government They make 9.6 paise profit
Equity invests as share capital in PSBs → against every ₹1 share
they lose 23 paise. capital.
Even in other technical indicators such as Return on assets, Market-to- book ratio, growth
of new loans, Capital adequacy norms for BASEL, etc: (new) Private sector banks (PvB)s
outperform PSBs. Thus, PSBs are clearly not efficient today. If they become efficient = ₹11
lakh+ crore profit for the Government. After 2013, PSBs’ credit growth has declined →
GDP growth is affected. 2019: PSBs’ total loss > 66,000 crore which is even double than
India’s budget allocation for education. And so on..
12.1.2 🦁 = 🐌 PSBs: reasons for inefficiency & remedies?

Reasons why PSBs are inefficient? Solutions by ES20 (More details in
सािकजननक क्षेत्र के बैंक प्रभािह न है क्योंकक → handout part 1B-2)
PSB staff’s salary does not depend on the - Allow campus recruitment, lateral
profitability of the bank. Employee unions entry in higher management positions
frequently engage in strikes/hartals. → - Make employees ‘part owners’ through
employee stock ownership plan (ESOP)
They’ve apathetic attitude (उदािीन रवैया) -
Use Artificial Intelligence (AI), Machine
Learning (ML), Big Data Analytics,
towards the use of artificial intelligence,
geotagging of mortgaged assets etc.
computer technology, marketing, and
- setup an organization PSBN Network to
customer satisfaction. →
implement above ICT-solutions.
Further, Since the government is the majority shareholder in PSBs,
1) Usually the persons favored by the present-day ruling party become the Board of
directors, irrespective of merit or qualification. Thus, political considerations have
significant control/influence over bank’s business operations.
2) : PSBs are subjected to Right to Information (RTI) act, Central Vigilance
Commission (CVC), Comptroller Auditor General (CAG), Central Bureau of Investigation
(CBI), Courts and media in a more stringent manner. (बैंकर खौफ में रहते है की ईमानदार
तनणधय की भी शक की तनगाहो िे िांच होगी)
3) Consequently, PSB officials fear harassment under the veil of vigilance investigations &
media-trials. They prefer safety and conservatism over risk-taking and innovation.
(रूढ़िवाद पिंद, नवाचार नापिंद)
12.1.3 Merger of 10 PSBs into 4 (Announced in 2019-August)

Amalgamating Banks Anchor Bank
(एकीकृत / विल न होनेिाल ) (सहारा दे नेिाल )
− Oriental Bank of Commerce (1943, 1) PNB. (1984, HQ: Delhi, It’ll become the
HQ: Gurugram, Haryana), 2nd largest bank after SBI, in terms of
− United Bank of India (1950, Kolkata) business size and branch network)
− Syndicate Bank (1925, HQ: Manipal, 2) Canara Bank (1906, HQ: Bengaluru,
Karnataka) Karnataka)
− Andhra Bank (1923, Hyd) 3) Union Bank of India (1919, Mumbai)
− Corporation Bank (1906, Mangaluru)
− Allahabad Bank (1865, Kolkata) 4) Indian Bank (1907, Chennai)
After this process is over, we’ll be left with only 12 PSBs (+1 India Post Payment Bank).
ES20 Vol1Ch7 on 50 years of bank nationalization also noted:
 2019: Global top-100 banks: China (18 banks), USA (12 Banks), Japan > France >
…..India (only 1 bank: SBI at Rank#55).
 Even Sweden and Singapore have more global banks than India, even though these
countries’ size of economy (GDP) is much smaller than India.
 So, given India’s size of economy (in terms of GDP), India should have 6-8 banks in the
global top 100. → These large banks provide large loans → India can reach $5 trillion
GDP by 31/3/2025. (More in Pillar4C)
 Therefore, merger of public sector banks is necessary. It’ll increase the manpower,
financial strength of the merged entities, then they can compete at global level.
12.1.4 🏦 👨‍⚖‍ 🌎🚫🚗📜 On-Tap Licenses for SFB

- 8 out of 10 Small Finance Banks (SFB) became Scheduled Banks. RBI reviewed & found
they have achieved their priority sector targets and helped in financial inclusion. More
competition and new players will help.
- so 2019-June, RBI announced it’ll allow ‘On-Tap’ license for SFB soon. (i.e. no need to
wait for notification unlike IAS exam, apply whenever you wish like a driving license)
Eligibility conditions to get SFB license ‘On Tap’:
- Minimum 200 crore capital.

- resident individuals/professionals with ten years of experience in banking and finance;
- 5 year/> old companies owned by Indian residents
- Existing NBFCs, MFIs, local area banks and payments banks.
- Urban cooperative banks (UCB) allowed to convert into SFB but capital norms slightly
different.
- 2019-Dec: Even Payment banks can convert into SFB, after 5 years of operation.
12.2 📮 (YEARBOOK) DEPT OF POST: POSB VS IPPB

Ministry of Communications has two dept: 1) Depart of Telecommunications 2) Department
of Posts →
✓ Setup by Clive (1766), expanded by Warren Hastings (1774)

✓ 1854: Dalhousie- Post Office Act; 1st postal stamp, rates by weight & not by distance.
✓ 2008: Project Arrow for modernization.
✓ 2013: Telegram stopped by India Post, due to onset of SMS & email.
✓ Dept of Post sells
o Gangajal sourced from Rishikesh and Gangotri.
o UTI-Mutual funds and Sovereign Gold bonds.
✓ Post Shoppe = special outlet in big post offices for philately (stamp collection hobby)
✓ RTI fees can be submitted by buying Indian Postal Orders (IPO). E-IPO = overseas
Indians can pay RTI fees online using this mechanism.
✓ Deen Dayal SPARSH Yojana: Students in class 6-9 given scholarship for philately.
✓ Dhai Akhar Letter Writing Competition wherein students asked to write letters to
Mother Teresa, Tagore etc. 2019-20’s theme “Dear Bapu, you’re immortal.” This
theme is inspired by Albert Einstein’s homage to Gandhi “Generations to come will
scarce believe that such a one as this ever in flesh and blood walked upon this earth”.
✓ Officers’ training conducted at Rafi Ahmed Kidwai National Postal Academy at
Ghaziabad, UP. Kidwai was India's first Minister for Communications.
Dept of Post → Post Office Savings India Post Payments Bank (IPPB)
Bank (PoSB)
foundation Govt Savings Bank Companies act 2013 → Public ltd
Act 1873 company registered in 2016
Accept demand Savings account only 1. Current account
deposits? 2. Savings account
Accept time YES No, bcoz payment bank
deposits?
Can keep more YES No, bcoz payment bank. But u can link
than ₹1 lakh IPPB account with PoSB account to auto-
balance? transfer (=SWEEP) excess balance to
PoSB.
E-Banking and Not directly but you yes , UPI, BHIM, NEFT, IMPS and BBPS
online bill payment can do it by linking (Bharat Bill pay) available.
PoSB account with
IPPB account
Dept of Post → Post Office Savings India Post Payments Bank (IPPB)
Bank (PoSB)
Sukanya Smriddhi Can be opened Not possible. Because time deposits are
(daughter’s fixed not allowed.
deposit account)
loans to individual? No. ₹₹ goes to NSSF Not until it becomes Small Finance Bank
Objective? Promote savings Remittance & digital payments
habits among poor
12.3 🏦 👨‍🌾COOPERATIVE BANKS: KERALA BANK (2019)

- 2019-Oct: RBI permitted Kerala’s all 13 district co-operative banks (DCBs) to be
merged with Kerala State Co-operative Bank.
- The combined entity will be called “Kerala Bank”. It’ll be a ‘State Cooperative Bank.’
12.4 🏦 👨‍⚖‍AIFI: NHB’S REGULATORY POWER SHIFTED TO RBI

- National Housing Bank (NHB, setup through act of parliament in 1988).
- Original boss: RBI (100%). But, (Full) Budget-2019:
o RBI sold its 100% ownership to Govt.
o NHB’s regulatory powers over Housing Finance Cos (NBFC) handed over to RBI.
12.4.1 🏦👨‍⚖‍NBFC → Investment and Credit Companies (new category in 2019)

- 2019: this new category created by merging previous NBFC categories viz. Asset
Finance Companies, Loan Companies, Investment Companies.
- RBI will regulate these RBI added this new category of NBFCs
12.4.2 🏦👨‍⚖‍ Microfinance → Lending norms changed in 2019-Oct

- 2010: RBI’s Y. H. Malegam Committee → RBI created a new NBFC category called Micro
Finance Institution (MFI)
- Give small loans to poor without collateral, flexible EMI.
- Examples: Bandhan (W.Bengal, separately got PvB license), Disha (A'Bad: separately
got SFB license), SKS (Andhra), Cashpor (UP), Ujjivan (Karnataka).
- ES20 appreciated the role of MFI in Helping the weaker section because Majority
of its borrowers are women (97%), SC/ST(30%) and minorities (29%)
- Who regulates them? RBI + Ministry of Corporate Affairs
- *Who can borrow from MFI? Ans. Household whose annual income is not more than ₹
1.25 lakh (rural) or ₹ 2 lakhs (urban).
- *How much can one person borrow from an MFI? Ans. Not More than ₹ 1.25 lakh.
*Before 2019-Oct above limits were lowers.
13: PILLAR#1B-2: BURNING ISSUES IN BANKING-FINANCE
13.1 🏦 👨‍🌾😥 COOPERATIVE BANKS: NEGATIVE NEWS (2019): PMC BANK

- The Punjab and Maharashtra Cooperative (PMC, HQ-Mumbai, setup 1984) is a Multi-
State Scheduled Urban Co-operative Bank. It functions in Maharashtra, Delhi,
Karnataka ,Goa, Gujarat, Andhra Pradesh and Madhya Pradesh.
- PMC bank loaned large amount to a weak company HDIL, because of its cozy relations
with bank directors. Company who couldn’t repay it. NPA became so large, bank might
collapse.
- RBI imposed withdrawal limits on the depositors using the powers of Banking
Regulation Act. Because ‘bank run’ would have been so high even CRR-SLR can’t fulfill
it, if there was no withdrawal limit.
- Merger / closing / liquidation of a cooperative bank requires approval by Government’s
registrar of cooperatives so RBI alone can’t do much action.
- RBI’s Y.H. Malegam Committee (2011) had suggested many reforms on UCBs, but
they’re not yet implemented until Government amends the laws.
- Therefore, RBI offered Urban Cooperative Banks to convert their license into Small
Finance Bank (SFB) then RBI alone will have supervision powers without interference
from Government. But UCB banks not interested, they enjoy the present loopholes.
- Budget-2020: Promised to amend the Banking Regulation Act to increase RBI's powers
over cooperative banks.
❓ Recently the RBI has imposed limitations, initially for a period of six months, on
the withdrawal of amount by account holders of this banks: (UPSC-CDS-i-2020)
(a) IndusInd Bank (b) Dhanlaxmi Bank
(c) Punjab and Maharashtra Cooperative Bank (d) South Indian Bank
13.2 🏦🙊😥YES BANK AND AT1 BONDS (2020)

 2004: Yes Bank, a Private Sector Scheduled Commercial Bank starts (HQ-Mumbai)
 Its founder Rana Kapoor took bribes to approve loans to companies without capacity to
repay loans, such HDIL (This HDIL company also borrowed from PMC bank, causing
another crisis there.). By 2020 Yes bank’s business became unstable.
Equity Capital + Liabilities + NET Profit = Assets

Table 2: Hypothetical figure only for illustration. B.Com/PHD NOT REQUIRED
+Equity Capital +Liabilities +NET =Assets

(Shares) Bonds Deposits Profit (Loans, CRR, SLR
etc)
Healthy bank +11 +3 +78 +1 =100
Loser bank * * +78 -10 =90 (assets⬇ due to
This is happening bad loans)
*How to revive? 11 → ⬆20 (get 3 → ⬇2 +78 (put deposit withdrawal -10 =90
(we must equity infusion (by writing limits to keep this stable.
balance the from SBI etc.) off AT1 besides, if loans given for 10-
Equation) bonds) 15 years project, bank can’t
return depositors’ money abhi
ke abhi)
2020-March: RBI is attempting following for Yes Bank’s revival (पन

ु जीवित करना)
 Deposits Liability: (temporary) withdrawal limits of ₹50,000 on depositors
 ⬇Bond Liability:
o A) Write down ~₹9000 crore worth AT1 Bonds liability from equation. (in other
words, those investors will not get a single paisaa. बॉन्ि की दे यता को खाररि कर
दे ना). These bonds holders are unhappy & will go to court to stop this. OR
alternatively
o B) Convert the AT1 bonds into (lower priced) shares e.g. ₹100 Face Value ka
Bond converted into ₹20 Face Value ka Share (so there is 80% loss /haircut for
the bond holder)
 ⬆Equity Capital: Other banks to provide equity (share) capital worth >₹10,000cr into
Yes Bank → future shareholding maybe SBI (45%),ICICI(6%),HDFC(6%),Axis(3-4%)
But daily ball by ball commentary / and changes in this plan so we need not lose sleep.
13.2.1 🌐🏦 🕵️‍♂‍ BASEL-III norms: Capital Tiers

BASEL-III norms require banks to keep capital against their risk weighted asset ratio. This
capital is subdivided into:
Capital of a Bank Instruments / subtypes: List not exhaustive

Tier1 /  Common Equity Tier-1 (CET1) e.g. ordinary shares.
core capital →  Additional Tier1 (AT1) e.g. AT1 Bonds, Preferential
shares etc.
Tier2 →  Bonds/Debenture, Hybrid instruments
BASEL-III prescribed that banks must keep minimum x%, y% etc in each of these tiers,
depending on their Risk Weighted Asset (RWA).
13.2.2 🔪🗃💇🏼‍♂‍Additional Tier 1 (AT1) Bonds

They have no maturity date (i.e. bank has to pay interest for infinite time / perpetuity
and principal will not be returned). However, bank may ‘buyback’ them after certain
years. If / when a bank makes huge losses → AT1 Bonds’ liability may be
A. written off (खाररज कर दे ना) OR

B. converted into shares (process called ‘Bail-In’).
Beyond this any what/why/how/PHD =poor cost benefit for MCQs.
13.3 👻(🚫🏦): NBFC: SHADOW BANKING (आभासी / प्रनतछाया बैंककंग प्रणाल )

ES20 Vo1 Chapter 08 on ‘NBFC’s Financial Fragility’ (ववत्तीय भंगुरता) observed
 Shadow banking is a set of activities and institutions. They operate partially (or fully)
outside the traditional commercial banking sector. They are not fully regulated by the
RBI. ये िंस्त्थाए पारं पररक बैंक्रकंग तनयमो के दायरे िे बाहर काम करती है .
 A shadow banking system can be composed of a single institution or multiple entities
forming a chain. They mobilize funds by borrowing from banks, issuing Commercial
Papers (CP) and Bonds (Non-convertible debentures)
Table 3: Three important segments of the shadow banking system in India
HFCs Housing Finance Companies. E.g. Dewan Housing Finance Limited (DHFL)
LDMFs - Liquid Debt Mutual Funds invest clients money into short term debt
instruments such as T-bill (of Govt) and Commercial Papers (of
companies).
- e.g. certain schemes by UTI, Kotak, L&T, Tata mutual funds
- 2019: Some of these LDMFs had invested clients money in IL&FS and
DHFL, but failed to get the money back. Nearly ₹4000 crore of investors’
money is stuck, triggering the NBFC crisis in India.
Retail- Retail Non-Banking Financial Companies such as Gold loan companies, asset
NBFCs finance companies etc.
Shadow banking system’s assets are risky and illiquid. If there is a ‘bank run’ like situation
(depositors / investors demanding the money bank) these shadow banks can’t honour the
obligations. As seen in the ILFS crisis (2019)
- Infrastructure Leasing & Financial Services (IL&FS) is a Systemically Important Non

Deposit Taking Non - Banking Finance Company (NBFC - ND – SI: प्रणालीगत रूप िे
महत्वपूण-ध डिपॉजिट न लेनेवाली- गैर-बैंक्रकं ग ववत्त कंपनी) Setup in 1987 HQ@Mumbai.
- Shareholders: LIC > Japan’s Orix group > Abu Dhabi’s group > Central Bank of India >
SBI.
- Challenge? 1-2-3 of above diagram. + loans given to unworthy borrowers with forged
documents, bribes were paid to IL&FS board directors & auditors.
Remedies undertaken by Government

1) Under Companies Act: Ministry of Corporate Affairs (MCA: कारपोरे ट कायध मंत्रालय) replaced
the IL&FS’s Board members. Uday Kotak made new Chairman. MCA constituted the
statutory body National Financial Reporting Authority (NFRA) under Companies Act
2013 for stricter vigilance over Chartered accountants and auditors. (More in SEBI
Handout)
2) Corporate Affairs Ministry’s Serious Fraud Investigation Office (SFIO: गंभीर िोखािडी िांच
कायाधलय) investigating the IL&FS officials & auditors.
3) We’ll encourage tri-party repo system. (Ref: Monetary Policy handout)
4) Companies Act requires all companies (incl. NBFCs) to setup a Debenture Redemption
Reserve (DRR), fill it with % from profit to protect bond investors incase of default.
Government exempted NBFCs, housing finance companies and, listed firms from this
requirement so they can easily mobilize new funds to revive old biz.
5) (Full) Budget-2019: we will setup a Credit Guarantee Enhancement Corporation (CGEC:
िेडिट गारं टी विधन तनगम) regulated by RBI. It’ll be an NBFC company. It’ll provide
guarantee to the lenders on behalf of borrower (by charging fees on borrowers). Then
lenders may feel safer to lend ₹ ₹ to borrower at a cheaper interest rates.
6) We’ll also give partial credit guarantee to PSBs when they loan to financially sound
NBFCs
7) LIC says we’ll not allow IL&FS to collapse (=we may use Policy holders’ money to
rescue it just like IDBI) = may result in “Financial Repression of households”.
8) National Housing Bank introduced Liquidity Infusion Facility (LIFt) of ₹30,000 crore for
additional liquidity to HFCs for individual affordable housing loans.
9) Through Finance Act, 2019, Govt amended RBI Act 1934 to increases RBI power to
regulate NBFCs in following ways: RBI can remove NBFC’s board of directors, debar its
auditors, can inspect any NBFC or its associated group of companies, RBI can force
merger/splitting of non-viable NBFCs, higher fines/penalties for violation.
Remedies undertaken by RBI & SEBI

10) PSBs unable to lend more to IL&FS due to PCA framework. But, RBI relaxed
‘securitization norms’ for NBFCs so they can use existing loan papers to issue new
securities to borrow money from market, thus increasing liquidity /money supply for
NBFCs’ biz operations.
11) SEBI tightened norms for Credit Rating Agencies (CRAs). They’ve to disclose 'default
probability' of bonds & other debt instruments. SEBI tightened norms on Mutual Funds,
regarding where/how they invest clients’ money.
12) RBI tightened norms of asset-liability management (ALM) norms for NBFCs.
13) 2019 July: Dy. Gov Viral Acharya Committee → RBI board approved 3 year medium
term framework to improve regulation & supervision, based on global best practices =
“Utkarsh-2022” roadmap.
14) RBI ordered certain NBFCs to implement BASEL-III norm’s Liquidity Coverage Ratio
(LCR) High Quality Liquid Assets (HQLA) framework in a phased manner by 1/Dec/2024.
Remedies suggested by ES20
15) CEA Subramanian K. has created a “Health Score for NBFCs” (स्त्वास्त््य िूचकांक). It
monitors given NBFC company’s Asset Liability Management (ALM) problems, balance
sheet strength, Operating Resilience etc. and gives them a score between -100 to
+100. Higher scores indicating higher financial stability of the firm. This health score
can provide early warning signals (पूवध चेतावनी) to the Financial regulators → they can
initiate appropriate measures before it's too late.
Q. How exactly do above norms work? Ans.Not-Imp. Because Prelims-

word association sufficient due to technical nature of topic and for
mains the maximum utility of this topic is 250 words.
13.3.1 😥 ⛱ NBFC-Negative News (2019): Thomas Cook NBFC closure in UK

- Thomas Cook was a UK’s travel-related financial services company (1841).
- They provided currency exchange, travel/luggage insurance, ticket booking, hotel
accommodation, tour package etc. facilities.
- Their business declined with the advent of Airbnb, Trivago, Makemytrip & other apps /
websites in travel segment.
- 2019: Thomas Cook couldn’t repay its loans, couldn’t work out resolution plans with
lenders, UK Government did not give bailout money → compulsory liquidation.
❓In September 2019, which one of the following travel giants declared itself
bankrupt? (UPSC-CDS-i-2020)
(a) Expedia (b) Cox & Kings (c) SOTC (d) Thomas Cook
13.3.2 🔪💀 NPA: Data from 📔📔ES20
ES20: NPA had reached its peak in 2018 but now it appears to be declining because of
various measures taken by Government and RBI.
13.3.3 ⚖️🔪 IBC Amendments

- Operational Creditors (OC-कायधिंबंिी लेनदार) = Suppliers, customers, contractors etc.
They don’t have voting power in IBC resolution.
- Financial Creditors (FC-ववत्तीय लेनदार) = banks, NBFC, bond & other debt security
holders + Home buyers. → they’ve to the voting power in IBC resolution.
13.3.4 ⚖️🔪 Insolvency and Bankruptcy Code Amendment (2018: संढ़हता संशोधन)
- Permits Govt to modify norms when applying IBC for MSME.
- RERA registered building (home & office) buyers are classified as ‘financial creditors’.
So, if builder unable to finish project, unable to repay the loans to banks →
homebuyers will have voting power in the I&B resolution process. (More RERA in Pill#6)
- It reduced the voting requirements for faster resolution:
Lenders’ Voting requirements (ऋणदाताओ का प्रस्त्ताव के िमथधन में मतदान) Before After
Routine decisions (िामान्य तनणधयों के सलए) 75% 51%

Key decisions like appointing IP, extending deadlines for resolution 75% 66%
process, approving the resolution plan
Withdrawing resolution plan from NCLT NotIMP 90%
13.3.5 ⚖️🔪🤝 IBC Code (first) Amendment Act (2019: संढ़हता संशोधन)
2019-Aug: it was passed by Parliament, with following features
- Must finish entire process within 330 days, instead of earlier 180-270 days walli limit.
- If too many FCs (e.g. homebuyers): they may appoint a representative (प्रतततनधि) for to
attend the Committee of Creditors on their behalf, for smoother & systematic conduct
of meeting.
13.3.6 ⚖️🔪🤝 IBC Code (second) Amendment Bill 2019)

2019-Dec: introduced in parliament, with following features
 IBC complaints can be made only if the loan amount is minimum “x” or minimum
lenders are “y”. This is to discourage frivolous complaints by lenders. (मामल
ू ी बकाया
ऋणों की सशकायतों को रोकना)
 If the government had given any license, permit, registration etc. then it’ll not be
cancelled while IBC proceedings are going on. (e.g. if a liquor company’s license was
cancelled while ongoing case → no fresh investor would come→ business can NOT be
revived!).
 Ring-fencing from any risk of criminal proceedings: (पुरानी आपराधिक कायधवाही के िामने
नये तनवेशक की क्रकलेबंदी/ मुजक्त) = After IBC restructuring, if a new partner joins/takes
over in the business, he’ll be given immunity from criminal proceedings against
offences committed by previous promoters.
 Plus, many other technical changes but poor cost-benefit chasing them.
13.3.7 🈶🌐🔪🤝 Cross-border Insolvency (सीमा-पार का ढ़दिाललयापन)

- Cross-border insolvency has two facets: 1) foreign creditors should be able to recover
money lent to Indian corporates & VICE VERSA. 2) During Indian company's insolvency
in India, the Indian lenders should be able to recover money from Indian company's
foreign assets easily, AND VICE VERSA.
- IBC sections 234 & 235 have provisions for it, BUT they are not notified yet, so they are
not enforced.
- 2018: Corporate Affairs Ministry's Insolvency Law (reforms) Committee headed by
Injeti Srinivas recommended
o We should create a separate law for Cross-border Insolvency.
o More than 40 nations use United Nations Commission on International Trade
Law (UNCITRAL)'s Model Law of Cross Border Insolvency (1997)
o So, we can use it as a template while making our own law. Government is
working on such bill.
13.3.8 🔪👨‍🔧NPA: relief given to MSMEs in 2019

- 2019-Jan: If an MSME firm had previously taken a bank loan upto ₹25 crore but
defaulted on repayment. RBI permitted banks to do one-time restructuring of such
loans by 31/3/2020 (Subject to certain technical conditions). Budget-2020 asked
the RBI to extend this facility till 31/3/2021.
- 2019-Sept: Government ordered PSBs that even if MSME are not repaying loans,
don’t treat them as NPA till 31/3/2020. This will protect MSMEs from SARFAESI/IBC
proceedings, while the Govt attempts to revive their business through other measures.
Government also ordered PSBs to organize Loan-Melas & give loan to ‘RAM’ category —
retail, agriculture, and MSMEs.
13.3.9 🔪🐯RBI’s ‘Feb-12’ Circular (2018) & Prudential Framework (2019)

- Using the powers of RBI Act, RBI issued a circular on 12th Feb 2018. It discontinued
CDR, S4A, SDR etc. henceforth IBC to be main tool. 1-day default norms, lenders to
immediately start resolution, IF resolution not finalized in 180 days then liquidation.
Penalties for noncompliance.
- 2019-April: SC declared it ultra-vires (क़ानन
ू ीिीमा िे बाहर) because not consistent with
provisions in RBI Act.
2019-June: Consequently, RBI released Prudential Framework for Resolution of Stressed

Assets Directions 2019 (तनावग्रस्त्त पररिंपवत्तयों के ढदशा-तनदे शों के सलए वववेकपूणध रूपरे खा)
- RBI applied it on Banks, AIFI and selected categories of NBFCs- using the powers under
Banking Regulation Act (1949) and RBI Act (1934).
- It discontinued CDR, S4A, SDR, JLF etc. henceforth IBC to be main tool.
- If principal / interest is overdue for 1-30 days, classify loan account as SMA-0. Then,
within 30 days, the lender shall review the loan account, & initiate resolution process
(RP). (Previous Feb-12 circular required lenders to start RP within 1-day of SMA-0.)
- It framed rules to facilitate Sashakt approach #1 and #2-inter-creditor agreement
(ICA).
- Lenders must upload data of ₹5 crore /> loans to RBI’s CRILC portal on weekly basis.
- Forbids loan restructuring for borrowers who have committed frauds/willful default in
past. Forbids evergreening of stressed loans.
13.4 🔪📘 📘 ECONOMIC SURVEY ON NPA (आधथधक िवेक्षण)
13.4.1 🔪📘 📘 Economic Survey 2018-19 on NPA (released in 2019-July)

- With I&B Code and other measures by RBI, the NPA % has declined in 2018-19, and
credit growth has improved. However, banks’ profitability has also declined.
- I&B code's time-bound mechanisms have prompted 'behavioural changes' in corporate
borrowers (कॉपोरे ट दे नदार के व्यवहार में पररवतधन). Now they fear losing control of the
company. This has improved corporate governance, cash and financial discipline.
- By 31/3/2018: ₹ 50,000 crores worth NPAs have been upgraded to std assets (meaning
the (arrogant) borrowers have been forced to resume paying principal & interest
regularly.)
- Due to IBC Code, India's rank has improved in World Bank's Ease of Doing Biz report.
(More in Pillar#4). However, we also need to begin more reforms:
✓ We need to increase the number of NCLT benches, number of IP Professionals, use
ICT technology for faster case proceedings.
✓ We should enact separate law on cross-border insolvency. (िीमा-पार ढदवासलयापन)
✓ Group Insolvency (िमहू ढदवासलयापन): Big Industrialists usually operate through
groups of companies, each having a separate identity e.g. Tata Sons ltd → 1) TCS
2) Tata Motors 3) Tata Steel etc. If one of these company become insolvent, it
creates negative ripples on entire group's financial health. Certain legal-technical
reforms are necessary to address such group-insolvency.
✓ Certain legal-technical reforms to address insolvency cases involving individual
proprietors and partnership firms. (They’re legally different entities than
‘Companies registered under companies Act. More in SEBI handout)
13.4.2 🔪📔📔Economic Survey 2020 on NPA (released in 2020-Jan-31st)

- NPA had reached its peak in 2018 but now it appears to be declining because of various
measures taken by the Government and RBI.
- Nearly 3000 insolvency professionals (as on December 31, 2019).
- Appreciated that IBC proceedings take on average 340 days to complete, unlike
SARFAESI legal proceedings which take 4.3 years.
- Appriciated that IBC helps recovering more amount of loan than SARFAESI in 2018-19
Approx. Amount recovered in crores 2017-18 2018-19
SARFAESI and DRT 33,000 52,000
IBC 5000 71,000
13.4.3 🔪📔📔ES20: Use AI-ML Technology

In PSBs, most of the loan-information processing (=Credit analytics) happens manually
(ऋण ववश्लेषण हस्त्तचासलत रूप िे करते है ). This causes inefficiency, frauds and loan default.
Tools such as _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (कृत्रत्रम
आिूचना और मशीन प्रसशक्षण) can help them in following ways:
 Willful defaulters usually create fictitious companies (फिी कम्पनी) to transfer their
assets / shares / money just before they stop paying loan installments.
 Artificial Intelligence (AI) can alert the authorities through real time surveillance &
data analytics of the borrower’s NEFT/RTGS/DEMAT account transaction.
 Geo-tagging of assets (संपवि की जजयो-टै गगंग) i.e. adding longitude and latitude data with
the photos & videos of the Factory building, machinery, vehicles, aeroplanes,
helicopter etc. Then, →
o Scamster can’t pledge fictitious assets as collaterals for loans (फिी िंपवत्त जििका
अजस्त्तत्व ही नहीं)
o Scamster can’t pledge the same asset as collateral to multiple banks/NBFCs.
(एक ही िंपवत्त को एकाधिक लोगों के पाि धगरती रखकर लोन में िांिली करना)
 Global Positioning System (GPS) chips may be embedded in the factory-machines and
vehicle to track their real time location →
o If scamsters move the machinery out of the factory, the banker will be alerted.
o Bankers can remotely disable machines/vehicles, if loans are unpaid.
 Blockchain Technology can used for storing and verifying the authenticity of the data.
 AI can monitor Social media activities e.g. Borrower is not paying the loan and yet
sharing the Switzerland vacation photos on Instagram = He is a wilful defaulter →
Attach his assets under the SARFAESI Act.
Caution? borrower’s privacy and dignity should also be respected while doing such
computerized surveillance. (उिारकताध की तनिता का भी िम्मान रखना चाढहए)
13.4.4 🔪📔📔ES20: setup PSBN Network

 Government should create a new organization named PSBN (PSB Network), which will
act as a Financial Technology Hub (FinTech: ववत्तीय प्रौद्योधगकी).
 Whenever a borrower applies for loan to a public sector bank → Details sent to PSBN.
 PSBN will verify the creditworthiness (ववत्तीय िाख) and risk profile (ढदवासलयेपन का िोखखम)
of the applicant through:
o Artificial Intelligence (AI), machine learning (ML) and Big Data Analytics- as
explained in the previous section
o E-KYC-Aadhar verification → cross checking his Aadhar number against
Financial data from Corporate Affair Ministry, SEBI/share market, Income Tax
Department, GST, etc.
Benefit? fraud prevention, reduced the burden of NPAs, quicker decision making,
process loan applications faster, cost saving for individual banks as all of them can use a
single hub instead of spending on separate servers/technology.
13.4.5 🤦🏻‍♂‍PSB Banking Personnel Reforms→ 📔📔ES20 Vol1Ch7 (50 years anni.)
- PSBs should be allowed to do
o 1) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ of atleast some specialists (कुछ
ववशेषज्ञों की केम्पि पररिर िे िीिी भती)
o 2) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ in higher management (उच्च प्रबंिन में
पाजश्वधक भती ).
- PSBs should give _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ (ESOP:
कमधचारी स्त्टॉक ववकल्प योिना) to their employees.
ESOP is a type of benefit plan wherein employees are given some shares of the company
(Apart from their regular monthly salary).
When/if company makes more How does employee benefit from ESOP?
profit →
1) Market price of its shares He can sell his shares to a third party for a large gain.
will increase.
2) the dividend to the He can keep the shares with himself, and will get large
shareholders will increase. dividend from the company (in addition of his regular salary)
As shareholders, some of these employees may even join as board members → help
designing more realistic business policies at the apex level. Thus, ESOP changes mind-set
from an “employee” to that of an “owner”. It encourages the employee to work harder
with more dedication, loyalty & passion for company’s profitability and brand image.
13.5 🕵🏻💸 👩‍👩‍👧‍👦 DICGCI: DEPOSITOR’S INSURANCE HIKED BY 💼BUDGET-2020

- 1961: Deposit Insurance and Credit Guarantee Corporation Act (तनक्षेप बीमा और प्रत्यय
गारं टी तनगम)- mandates that all types of banks must buy insurance on their deposit
accounts from DICGC (100% owned by RBI, HQ: Mumbai).
- Banks have to pay premium for this insurance.
- When a bank shuts down, DICGCI will pay upto ₹_ _ _ _ _ _ insurance to every deposit
holder for his principal and interest.
- Budget-2020: raised the insurance coverage to ₹ _ _ _ _
13.5.1 🐯🤲🏻🦁 RBI’s Bimal Jalan panel (2018-Nov)

- It was setup to review RBI’s economic capital framework (आधथधक पूंिी िंरचना) & decide
the guiding principles for dividend transfer to Government.
- 2019- August: RBI board approved its report.
- It updated / reduced buffer related technical norms in such manner that RBI will be
able to transfer more dividend / surplus to the Government.
- Accordingly for 2018-19: (1.23L dividend+52k extra)= ₹ 1.76 crore to be transferred to
government. This will help the government to meet its fiscal deficit target.
13.5.2 RBI’s Financial / Accounting Year (वििीय िर्क में बदलाि)
Before After
RBI’s financial year - For 2020: a smaller balancesheet will
- 1934 onwards: January to December be prepared from 1/July/2020 to
- 1940 onwards: July to June 31/March/2021. Then
- From _ _ _ _ _ _ _ _ _ , RBI will switch
to annual April-March format.
But Govt’s financial year is April-March so, After this reform, _ _ _ _ _
RBI had to give interim dividend to govt
until RBI’s final balancesheet was
prepared, then another (full) dividend was
given.
2019: Bimal Jalan panel recommended above reform → RBI’s central board accepted it
14: PILLAR#1-C: 🐮📈🐻 SEBI-SHARE MARKET
14.1 🔪🗃⏰ DEBT INSTRUMENTS: SHORT TERM (लघु अवधि ऋण उपकरण )

LIBOR London Interbank Offered Rate (LIBOR) is the average interest rate at
which banks in London give short term loans to each other.
It serves a benchmark, using which Global banks decide their call money
/notice money rates.
MIBOR In LIBOR definition, replace the word “London” → “Mumbai” and “Global”
→ “Indian”, and you’ll know what MIBOR is!
CBLO Collateralized Borrowing and Lending Obligation.
Clearing Corporation of India Ltd (CCIL) helps Financial Intermediaries (FI)
to get short term loans through this instrument.
14.2 🔪🗃🗓 DEBT INSTRUMENTS: LONG TERM (ढ़दधक अवधि ऋण उपकरण )

Masala These rupee denominated bonds issued outside India, to borrow money
Bonds for Indian companies.
 2019-May: Kerala became the first state to issue Masala Bonds. Its
Kerala Infrastructure Investment Fund Board (KIIFB) issued Masala
Bond at the London Stock Exchange. Denomination: ₹ ₹ Total Size: ₹
21.5 billion. Tenure: 5 years. Masala Bonds are usually issued by
institutions with AAA rating. Since KIIFB has BB rating, hence offered
higher interest rate: ~9.7% (वरना कोई खरीदता नहीं)
(Proposed) 2019-May: Commerce ministry’s Dr. Surjit S. Bhalla Committee ‘to
Elephant improve India’s share in global trade’ suggested ‘Elephant Bonds’.
Bonds Tenure: 25-years. People declaring Black Money will be required to
invest x%. → ₹ ₹ to be used only for infrastructure projects.
Social 2019-Feb: SIDBI issued ₹ 300 cr. worth Women’s Livelihood Bonds
Impact Bonds (मढहला आिीववका बॉन्ि) with the help of World Bank, UN Women org etc.
(सामाजजक - These bonds will be offered to High Net worth Individuals (HNI),
Impact Investors (rich people interested in ‘indirect’ social service)
प्रभाि बांड)
etc. They’ll earn 3% annual interest rate for tenure of 5 years.
- Money thus collected → SIDBI → Micro Finance Institutes (MFI) →
loaned to individual women entrepreneurs in sectors like food
processing, agriculture, services etc. for loans
14.3 ⚖️🗃 SHARES / EQUITY FINANCE / IPO

 2019: Saudi Arabia’s public sector oil company _ _ _ _ issued world largest IPO worth
>$25 billion. It was listed at Riyadh’s Tadawul Stock Exchange.
 ES20: No of IPO-issuing Companies have declined: 134 (2017) → 103 (2018) → 47
(2019). Which indicates problems like protectionism (trade war), NPA, slowdown in
consumer demand are preventing some of the companies from expanding further.
 (Full) Budget-2019: we’ll set up a Social Stock Exchange under SEBI’s regulation. It’ll
help social enterprises and voluntary organizations to raise capital as equity, debt or
mutual funds. Then SEBI setup Ishaat Hussain panel to study it.
 Day trading / Intra-day trading: Individuals buy and sell shares over the Internet over
a period of a single day's trading, with the speculative intention of profiting from small
price fluctuations.
14.4 🌬🌪:🤷🏾‍♂‍ 👨‍⚖‍ FORCE MAJEURE (अभेद्य शजक्त)

 _ _ _ _ _ word for ‘superior force’. It refers to unexpected external circumstances
(अप्रत्यासशत बाहरी पररजस्त्थततयााँ) that prevent a party to a contract from meeting their
obligations. e.g. Acts of God (natural disasters, epidemics), war, terror attacks.
 In such cases, courts may not punish party for dishonoring contract. (करारनामे के दायजत्व
को न तनभाना)
 E.g. Corona (_ _ _ _ _ _ ) Virus → Singapore Govt put restrictions on entry of Chinese
→ Singapore construction firms facing labour crunch (श्रसमकों की कमी) → invoked ‘Force
Majeure’ to clients, “we can’t finish building your homes/offices in time.”
 Coronavirus: >80k people in >50 nations infected (as of 2020-Feb). Restriction on
global travel and trade. Investors fear that companies will not generate much profit.
Many contracts/ payments will be stuck by Force Majeure. So, large scale withdrawal /
exit of share investors from stock exchanges across the world. Even the BSE _ _ _ _ _
by 1400+ points in a single day.
14.5 SHARE MARKET: MISC. TERMS

14.5.1 🗃🔢 ISIN Number
 International Securities Identification Number (ISIN) is a Unique 12 characters, consisting
of both letters and numbers.
 It’s a serial code to identify securities e.g. Reliance Industries Limited Shares ISIN:
INE002A01018; Infosys Shares: INE009A01021.
 Prevents mistakes in buying/selling shares/bonds of companies with similar sounding
names. Facilitates the digital transactions through DEMAT account.
 RBI issues ISIN for G-sec/T-bill. NSDL issues ISIN for securities other than G-Sec/T-bill.
 (Full) Budget-2019: technical reforms in ISIN for ease in issuing Corporate Bonds.
14.5.2 🗃🕵🏻‍♀‍IOSCO
- International Organization of Securities Commissions (IOSCO) is the international body
of world's securities regulators. SEBI is a member.
- It’s known for its IOSCO Guidelines for Investors Protection and systematic risk in
global economy.
14.5.3 🔗🥏 Initial Coin Offering (ICO)

 Suppose, a company wants to raise investors’ money for launching new cryptocurrency,
or service/app related to an existing cryptocurrency.
 Then, it’ll issue Initial Coin Offering (ICO) → Investor subscribes to it, and receives
‘tokens’ (and not SHARES). Investors can use the ‘tokens’ to buy companies
coins/services or may sell it to a third party.
 RBI has cautioned Indians not to invest in such instruments, because of the dangers
which we already learned in the Handout Pillar#1A-1: Bitcoins.
14.6 INVESTMENT INSTRUMENTS/FUNDS
14.6.1 📦 🤹🏻‍♂‍ 🤴🏻 Sovereign Wealth Fund (SWF: संप्रभु धन कोर्)
 State owned investment fund, wherein central bank, finance ministry and other public
sector financial intermediaries park their surplus fund. →money used for investment.
E.g. Singapore's GIC sovereign wealth fund, Abu Dhabi Investment Authority (ADIA)’s
funds, Qatar Investment Authority (QIA) etc.
 Sidetopic: What is National Investment & Infrastructure Fund (NIIF) Ans. Pillar#5:
Infrastructure handout.
14.6.2 (🦁🔪)📦: (🏛🛒🤝) Bharat Bond (Debt) ETF (2019-Dec)

 Fund Manager (_ _ _ _ _ _ _ Asset Management ltd) → He’ll issue Bharat Bond-ETF.
 Maturity: _ _ _ _ _
 Unit Size: ₹1000 each. So even middle-class investors buy these Bond-ETFs.
 Fund managers will invest this ₹₹ into a basket of bonds issued by Central Public Sector
Enterprises, Central Public Financial Institutions (CPFIs such as public sector bank and
insurance companies) and other Government organizations.
 ETF will be tradable at the stock exchange.
Bharat bond ETF: Benefits?
✓ For Government companies = Easier and more efficient to borrow ₹₹ instead of

individually launching their bonds in the market.
✓ For Investors = safety because of assured return on bonds, irrespective of Government
company’s profit.
✓ Enhanced retail participation → deepening bond markets
✓ In future, more fund managers may be selected, and even non-AAA rated public sector
bonds may also be included.
✓ Budget-2020: given success of Bharat bond ETF, we are planning to launch another
debt-ETF containing G-sec. This will help the retail investors to invest in G-sec.
14.6.3 (🦁📦):(🏗🏠) Govt’s AIF for Real Estate Sector (2019)

 2019-Nov: Govt to setup an alternative investment fund (AIF Category-II) using ₹₹ of
govt, SBI and LIC. (Total 25,000 cr)
 AIF Fund manager: SBI Cap ventures ltd.
 AIF Fund manager will give ₹ (as Debt finance) to builders with unfinished housing
projects → demand for steel, cement, construction workers= economic growth.
14.7 🤼‍♀‍👬 CORPORATE GOVERNANCE (कॉपोरे ट शासि)

SPICe  Earlier, Corporate affairs ministry designed INC-29 online form to
registration of new company. Later it was replaced with Simplified
Proforma for Incorporating Companies (SPICe) Online form.
CARO  An auditor is an authorized personnel that verifies the accuracy of
Guidelines financial records. Their primary objective is to protect businesses from
fraud. Companies Act → Companies Auditor’s Report Order (CARO) =
Auditors have to annually submit reports to the Corporate affairs ministry
15: 1D: ⚰️INSURANCE, PENSION & FINANCIAL INCLUSION
15.1.1 ⚰️💀🏤 🦁 LIC’s Disinvestment (2020, विननिेश)
 LIC’s insurance products come with a sovereign guarantee (िंप्रभु गारं टी) by the Govt. So
people prefer to buy it over private sector insurance policies. This hampers perfect
competition (पूणध प्रततयोधगता).
 If Government shareholding ⬇ → LIC functioning becomes independent → less
financial repression of households (e.g. how LIC bought loss making IDBI under
Government’s pressure. Ref Pillar#1B-1: Banks’ classification).
 So, earlier, International Monetary Fund (IMF, 2018) and Justice B.N.SriKrishna’s
Financial Sector Legislative Reforms Commission (FSLRC-2011: ववत्तीय क्षेत्र वविायी िुिार
आयोग) had also advised the same to Government of India.
 Budget-2020: LIC Act will be amended → LIC will be converted from a statutory
corporation (वैिातनक तनगम) into a listed company → Initial Public Offering (IPO) →
Government will sell part of its shareholding. Because of following reasons:
15.2 💊 GEN INSURANCE → HEALTH INSURANCE (स्िास््य बीमा योजनाएं)
Fixed Benefit Policy (ननजचचत लाभ) Indemnity Based (क्षनतपनू तक आधाररत)
Fixed payment given depending on Upto to the “actual hospitalization cost” from
illness. the total insured sum.
 If the Policy agreement said “if  E.g. Policy covers upto ₹5 lakh annual
you get cancer, we’ll give health insurance.
you ₹50 lakhs.”  So if hospital bill = ₹1.5 lakh then insurance
 So, even if a patient spends ₹10 company will pay ₹1.5. Lakhs only.
lakh on hospitalization, still the Further Subtypes
company will pay ₹50l.  Cashless policy: patient simply goes to an
empanelled hospital = free treatment.
 Non-Cashless policy: patient first pays
hospital bill from own pocket → submits bills
to insurance company → gets refund.
15.2.1 😵: 🧐💊Arogya Sanjeevani Policy (2020)

Too many types of health insurance policies with various features and premiums = a
common man gets confused which health policy is best for him.
So, IRDAI ordered health insurance cos to launch a Standard Health Insurance Product
(SHIP: आदशध स्त्वास्त््य बीमा उत्पाद) to cover the basic health insurance requirements of
every person. Insurance Companies need to launch it FROM or BEFORE 1/April/2020 with
following Features:
✓ Name of the policy must be “Arogya Sanjeevani Policy -<name of the company>”. Any
other name NOT allowed.
✓ Type: _ _ _ _ _ _ _ Health policy insuring minimum ₹1 lakh to maximum ₹5 lakhs.
✓ Validity: minimum 1 year to lifetime
✓ Entry age: Minimum 18 to Maximum 65.
✓ Policy can be availed for (A) self and/or (B) Family Floater policies covering close
family members such as spouse, children, parents. (स्त्वयं / पुरे पररवार के सलए)
✓ What costs will be covered? hospitalization cost, pre and post hospitalization cost,
Ayush treatment (=Ayurveda, homeopathy etc).
15.3 AYUSHMAN BHARAT FUNDING

Budget-2018: Ayushman Bharat launched with two components:
A) Transform 1.5 lakh Primary Health Care Centers (PHC) to be transformed into Health &
Wellness Centres (स्त्वास्त््य और कल्याण केंद्र). Free drugs, checkup, mother-child care etc.
B) National Health Protection Scheme (AB-NHPS) → Later renamed ‘PM Jan Arogya Yojana
(PMJAY)’ giving ₹5 lakh health insurance per (poor family) per year.
15.3.1 PM-JAY Funding pattern after removal of Art 370

Category (श्रेणी) Cost sharing (खचक की साझेदार )
"Special Category States" (विशेर् श्रेणी के राज्य): Union contributes 90%: State
contributes 10% of the cost for
A - North-Eastern States, and
scheme implementation in the
- TWO Himalayan Hilly States: Himachal Pradesh
given State.
and Uttarakhand#
- Other States: who are not in above category 60:40
(UP, Bihar, etc.)
B
- Union territory (UT) with legislature: Delhi,
Puducherry, Jammu & Kashmir.
- UT without legislature (त्रबना वविातयका के केंद्र 100%
C
शासित प्रदे श): Ladakh, Andaman Nicobar etc.
#
- Before the removal of Article 370, the State of J&K was previously in category, so it
got 90:10 funding.
- But as a UT with legislature, J&K will get 60:40. So, 2019-Aug: Central Government
considering creating a new category ‘Hill Union Territory (पहाडी केंद्र शासित प्रदे श)’ so J&K
may continue to received 90:10 funding.
15.3.2 💼Budget-2020: 5% Health CESS

✓ We’ll setup more Ayushman BHARAT hospitals in aspirational (=backward) districts, for
treatment of PM-JAY beneficiaries.
✓ Hospital construction Funding: Public private partnership (PPP) → Public side’s
funding will be provided using 5% health cess on customs duty on imported _ _ _
✓ We’ll use AI and Machine Learning to take preventive actions against the spread of
diseases. Total ₹6400 cr allotted for PM-JAY.
❓ Which one of the following is not a feature of the Ayushman Bharat Scheme?
(UPSC-CDS-i-2020)
(a) There is no cap on family size and age.
(b) The scheme includes pre- and post-hospitalization expenses.
(c) A defined transport allowance per hospitalization will also be paid to the beneficiary.
(d) The scheme provides a benefit cover of Rs. 10 lakh per family.
❓ Centrally sponsored scheme Ayushman Bharat is a national health insurance
system for: (UPSC-Geologist-2020)
a) women b) every citizen c) old age people d) poor and vulnerable.
15.4 🧔⚰️🌽 PM FASAL BIMA YOJANA: NORMS CHANGED IN 2020
Before-2020 From 2020-Kharif
Premium (बीमा-क्रकस्त्त) paid by Farmer’s portion is unchanged. However,
Union:state sharing changed:
farmers: -
 Rabi winter crops (1.5%)
 Kharif summer monsoon (2%)
 Horticulture & Commercial
crops other than oilseed &
pulses 5%
Remainder premium is paid by
Union: State
Suppose a kharif crop insurance Suppose a kharif crop insurance premium = ₹100.
premium = ₹100.  Farmer pays ₹2 of the premium
 Farmer paid ₹2 of the premium  Union pays only ₹25 to 30 based on whether
 Union paid ₹49 + State paid it’s irrigated or unirrigated respectively.
₹49. In other words, Union and  State may have to pay ₹68-73. So, states’
States shared their premium burden increased.
burden half-half (50:50).  However, the Union will bear _ _ _ _ of the
burden in case of North Eastern States.
Compulsory (अतनवायध) for farmer to _ _ _ _ _ _ _ _ _ _ _ _ _ for farmers.
But, critics fear this may result in higher
buy this insurance policy, IF he
premiums (e.g. ₹200) if less farmers are
wanted crop loans from bank
subscribing.
Multiple Perils (एकाधिक आपदाए) ‘Single-peril’ (एकाकी आपदा) insurance can be
covered such as flood, drought, taken e.g. “protection only against drought.” This
hailstorm. But, farmers in will help reduce premium amount.
Rajasthan had no fear of floods.
Government allotted a district Minimum 3 years. And if company shows
/area to an Insurance company for outstanding performance then even more years
usually 1 year. may be granted. This will encourage companies to
invest more in the marketing & insurance agent
network.
-- Updated the methodology for assessment of crop
loss
15.4.1 ⛴🔪(👨‍💼🏦) Insurance to Banks on Exporters’NPA → NIRVIC Scheme (2019)

Boss? _ _ _ _ _ _ _ Ministry → Export Credit Guarantee Corporation (ECGC)
✓ NIRVIK (Niryat Rin Vikas Yojana) is an Export Credit Insurance Scheme (ECIS).
✓ Exporter takes a loan from a bank. But if he defaults then ECGC will cover upto _ _ of
his principal + interest losses to the bank. (Before NIRVIC scheme, it was only 60%)
✓ Exporters pay ‘premium (बीमा-क्रकस्त्त)’ to the bank → bank pays it to ECGC.
✓ Premium rates depend on sector e.g. gems jewellery sector has higher premium
because risk/losses are more than other sectors.
15.4.2 ⚰️🏗📜Title Insurance (जमीन / इमारत का टाइटल बीमा)
- 'Title' (अधिकार-ववलेख) means a legal document showing ownership of a property. 'Title
dispute': usually happens when multiple persons are claiming ownership of the same
land / building.
- 'Title Insurance' protects the new buyer in case of such legal disputes (by refunding the
money he had spent in buying land, construction, legal expenses etc).
- Real Estate Regulation and Development Act 2016 (RERA) requires the builders to buy
this type of insurance. More on RERA in pillar#5.
15.4.3 🌬🌪 (Proposed) Catastrophe Insurance (आपदा बीमा)

 Protects the client from natural and manmade disasters.
 Presently, farmers’ crops are protected from natural disasters through PM-Fasal Bima
Yojana. But, if his own home was destroyed in floods, it’s not covered → Union &
State Governments forced to use taxpayers' money for paying compensation to victims
of floods, cyclones etc.
 2019: IRDAI planning to allow catastrophe insurance (or CAT cover) for poor people.
<update when done>
15.4.4 Insurance progress indicators (बीमा प्रगनत संकेतक)

As per Insurance penetration (%: बीमा Insurance Density ($:बीमा घनत्ि)
ES20
प्रिेश) =Premium divided by _ _ _ =Premium divided by _ _ _
Life ↘Declining in zigzag ↗Improving in zigzag fashion.
(2011-18) fashion. (2.74% in 2018). ($55 in 2018)
Non-Life ↗Improving zigzag fashion. ↗Improving steadily
(2011-18) (0.94% in 2018) ($19 in 2018)
For India, these indicators are low compared to many developing countries due to
aforementioned challenges.
15.4.5 FDI in Insurance Sector changed by 💼 Full Budget-2029

(Full) Budget-2019: FDI limits increased from 49% to 100% in insurance intermediaries i.e.
- Agents & brokers.

- Surveyor/ Loss Assessor.
- Third Party Administrators (e.g. Hospital where treatment is given)
Benefit? Foreign companies can enter this space, increased competition, better services.
16👨‍🔧 → 👴🏻 (💰🗓) PENSION (पें शन)
16.1 EPF COMMUTATION (2020)

 EPFO: Employees’ Pension Scheme (EPS: कमधचाररयों की पेंशन योिना) = worker gets
pension after retirement age (58 years).
 EPF Pension commutation (रूपांतरण)= Worker can partially withdraw his pension in
advance (before reaching retirement age). But, then EPFO will pay him less pension
afterwards when he actually reaches retirement age.
 2020: some technical reforms made to help workers here. What/How?NOTIMP
16.2 OLD PENSION SCHEME (OPS) WILL NOT BE RE-INTRODUCED

- Before-2004: Government was entirely responsible for arranging the pension money
for its employees.
- But after 2004’s NPS: Govt Employee’s salary is partially deducted and invested in
financial securities, his pension is thus “NOT FIXED nor fully paid by Government” but
it’s dynamically linked with dividend & interest generated by those financial
securities.
- Thus, in NPS, Govt employee himself is ‘contributing money’ towards his pension.
- So, some government employee organizations oppose NPS because it does not provide
a fixed pension amount but depends on uncertainty in financial market. They keep
demanding re-introduction of the old pension scheme (OPS: परु ानी पेंशन योजना).
- 2019-July: Govt clarified in Lok Sabha, “We have no plans of reverting to OPS. Because
in OPS, Government has to arrange entire pension money = less funds available for
poor people’s welfare schemes. So, we’re going to keep NPS for Government
employees.”
16.2.1 👨‍🌾 → 👴🤲💰: 🧔 Pension: Three Maan Dhan Yojanas

18-40 Age; ₹ 55-200 LIC Fund manager + Who?
fees; Pension @60=3000 This Ministry co-
→ family pension ₹ 1500 contributes
1) Pradhan Mantri Shram- Labour unorganized sector workers with
Yogi Maan-dhan (Feb’19) monthly income upto ₹15k
2) Pradhan Mantri Laghu ___ Small trader / shopkeepers whose
Vyapari Maan-dhan Yojana annual turnover does not exceed Rs
(Jul’19)# 1.5 crore, based on self-
declaration.
3) Pradhan Mantri KISAN ___ small / marginal farmers with upto
Maan-dhan Yojana 2ht land.
(Aug’19)
- 1 person can join only 1 type of above scheme.
- Income Taxpayers & those who joined EPFO/ESIC are not eligible for any of these
schemes.
- (Full) Budget-2019: announced to launch “Pradhan Mantri Karam Yogi Maandhan
Yojana” for Small traders / shopkeepers. But, when they actually notified it, the title
was changed to “Pradhan Mantri Laghu Vyapari Maan dhan Yojana” technically called,
“National Pension Scheme for Traders and Self Employed Persons Yojana” or in shorter
form “NPS-traders”.
- Budget-2020: we’ll launch a Universal Pension Coverage with auto enrolment for
workers. It’ll cover workers even when they change jobs. <update when actually done>
16.2.2 Separation of PFRDA and NPS Trust

- 2008: PFRDA setup a body NPS Trust. NPS Trust manages the National Pension System
(NPS) and Atal Pension Yojana funds.
- (Full) Budget-2019: PFRDA is the pension sector regulator, so it should separate itself
from NPS-trust which is doing pension business activity. We’ll initiate technical steps
for this. (Recall that Government took over NHB from RBI. Similar pattern visible
here- the financial regulators themselves should not be involved in running financial
products, so that they can work in a dispassionate and impartial manner.)
Sidenote: pensionsanchay.org.in = PFRDA webportal for creating financial awareness
16.3 🛫👨‍🔧SOCIAL SECURITY FOR OVERSEAS INDIANS (PENSION / INSURANCE)

Following schemes’ boss? Ministry of External Affairs (ववदे श मंत्रालय)
16.3.1 🛫👨‍🔧Mahatma Gandhi Pravasi Suraksha Yojana, 2012 to 2017

✓ It was a voluntary “insurance+pension” policy for Indian workers in foreign countries.
✓ but very few people subscribed so ultimately closed in 2017.
16.3.2 🛫👨‍🔧Pravasi Bharatiya Bima Yojana, 2017

Some nations do not have strict laws regulating the entry, employment or safety of foreign
workers. So, the Indian Government classifies them under Emigration Check Required
(ECR: उत्प्रवाि िांच की आवश्यकता) countries. e.g. Saudi, Qatar, UAE, Libya, Malaysia, etc.
✓ It’s compulsory for Indian workers going ECR nations to join Pravasi Bharatiya Bima
Yojana from the empanelled insurance companies.
✓ Insurance cover of Rs. 10 lakhs if accidental death/permanent disability while abroad,
✓ Maternity expenses (प्रिूतत खचध) cover for women worker, Family Hospitalization etc.
✓ Premium: ₹275-375 depending on tenure of policy (पॉसलिी की अवधि के ढहिाब िे).
16.4 🏍🍴🚕 GIG WORKERS’ SOCIAL SECURITY CODE (गगग कमी की सामाजजक सरु क्षा संढ़हता)
 Informal workers (अयथाववधि कमी)= doesn’t have formal job contracts with employers.
E.g. Domestic Maids, Brick Kiln Workers, Construction Labourers, Gurkha Chowkidar,
Dhaabaa cooks/waiters etc.
 Gig workers (गगग कमी)= Uber Taxi Drivers, Amazon/Zomato Delivery boys, Urbanclap’s
beauticians/ plumbers/ AC repairman, Unacademy Educators etc. They are freelancers
/ independent contractors (स्त्वतंत्र ठे केदारों) hired by startup or digital companies for
short-term engagements. While they may have some written contract to deliver
services to the company, but the contract is worded in such manner they are not
“regular employees” of a company = not eligible for EPFO, ESIC etc.
 2019-Sept: Labour Ministry drafting a “social security code for all informal & gig
workers”. It aims to provide insurance on death/disability/sickness, maternity benefit,
pension, scholarship for their children etc.
17(👨🏻‍🌾👨🏼‍🔧:💰)→💳FINANCIAL INCLUSION (वित्तीय समोिेशि)
17.1 RBI’S LEAD BANK SCHEME (1969)

- RBI Selects a public or private sector bank which has significant presence in a rural
area of a given district. Such bank is designated as “Lead Bank”.
- Lead bank prepares credit plan with ‘Service Area Approach’, and coordinate with the
efforts of Government, banks and NBFCs.
❓ (Pre19-SetA) Q61. Service Area Approach was implemented under the purview of
(a) Integrated Rural Development Programme
(b) Lead Bank Scheme
(c) Mahatma Gandhi National Rural Employment Guarantee Scheme
(d) National Skill Development Mission
17.2 💼(FULL) BUDGET-2019: JANDHAN OVERDRAFTS TO WOMEN IN SHG

- Rural Development Ministry → National Rural Livelihoods Mission (NRLM) → Self Help
groups (SHG) are formed.
- Every verified woman SHG member with a PM Jan Dhan account eligible for overdraft
of ₹ 5,000. One woman in every SHG will also be eligible for upto ₹ 1 lakh MUDRA loan.
17.3 🤳🏻 JAN DHAN DARSHAK APP (2018)

Jointly developed by Department of Financial Services (DFS) & National Informatics
Centre (NIC). It helps people find the nearby financial touch points such as Bank branches,
ATMs, Post Offices etc.
17.4 (👨🏻‍🌾👨🏼‍🔧:💰)→ 📦 CHIT FUNDS AND PRIZE CHITS

Chit Funds (गचट् फंड/कोर्) Prize Chits (इनामी गचट्स)
Scheme runs for a definite period of e.g. 12 Scheme is illegal and vaguely
months from Jan to Dec-2020. designed. It runs until idiot investors
keep coming, then it collapses.
 Every month each subscriber deposits equal  There are no official documents
₹₹, as stipulated in the scheme document or account books.
 Every month Foreman draws ‘chit’ →  Scamster will accept whatever
whichever subscribers’ name comes he may small / large amount is offered
get loan / prize. (in next month, previous by the poor person who falls
winners’ names may not be added to the prey.
lottery pool). This way, everyone has an  Investor doesn't know with surety
equal chance of winning. how much is contributed by
other investors?
Even if you won in Feb-2020, still you'll have to Not compulsory to pay the monthly
compulsorily pay monthly deposits until Dec-2020 deposits after you’ve won the prize.
when the scheme is officially over. (Therefore the scheme will collapse
eventually, when new subscribers
stop coming).
This is legal, under Chit Funds Act This is illegal under Prize Chits and
Money Circulation Schemes Banning
Act, 1978
Beyond that, - How does that work? How’s that different from NIDHI companies (regulated
by Ministry of Corporate Affairs) = B.com thing not. Imp. For UPSC.
17.4.1 (👨🏻‍🌾👨🏼‍🔧:💰)→ 📦 Chit Funds (Amendment) Act, 2019

 To amend 1982’s Chit Funds Act.
 Will regulate: ‘Chit Funds’, ‘Kuri’, ‘fraternity fund’, ‘rotating savings and credit
institution (ROSCA)’. (they’re basically synonyms)
 Chit must be drawn in the presence of at least two subscribers. Video-conferencing is
allowed.
 Chit Fund’s fund manager is called ‘Foreman’. New act increases his commission%
 New Act also increases the maximum amount of investment the foreman can accept
from subscribers.
 Further powers with State Governments.
17.5 BANNING OF UNREGULATED DEPOSIT SCHEMES ACT, 2019

- अतनयसमत िमा योिनाओं पर प्रततबंि कानून
- If an entity is soliciting public to deposit /invest money, then it could be regulated by
RBI (Bank, NBFC-D), NHB RBI (Home loan NBFCs), SEBI (MF, ReITs, InvITs etc), IRDAI &
PFRDA, Corporate Affairs ministry (NIDHI), State Governments (chit fund), EPFO, Multi
state cooperative societies Register under Agriculture Ministry.
- A deposit-taking scheme is defined as ‘unregulated’ if person is asking people to
deposit/invest money but he has not registered with any of the above organizations.
E.g. builders, jewellers, etc. Act prohibits advertisement & money collection in it.
- Penalty upto ₹50 crores and jailtime upto 10 years + attaching the assets to refund
depositors within prescribed timelines.
- Union to setup an online central database of deposit-taking activities in the country.
Stay Tuned for the Remaining [Win20CSP] Pillar#2/3/4/5/6’s update packs at

Mrunal.Org/Download
Mrunal’s Economy Win20CSP Update Pack for 19’s Batches Pillar#2
CONTENTS
2 Budget: Theme .................................................................................... 3
2.1 Economic Survey (आर्थिक सर्वेक्षण) .................................................... 3
2.2 Taxation → Direct Taxes updates after Prelims-2019 ......................... 4

2.2.1 : Corporation Tax Cut in 2019-Sep ....................................... 4
2.2.2 : Corporation Tax on Startups ......................................... 4
2.2.3 : Dividend Distribution Tax (DDT: लाभाांश वर्वतरण कर) .................... 4
2.2.4 : Buyback Tax (शेयर की र्वापसी-खरीद पर कर) ........................... 5
2.2.5 : Capital Gains Tax (CGT: पांजीगत लाभ कर) ......................... 5
2.2.6 : Income Tax on Individuals (व्यक्ततक आयकर) ........................... 5

2.2.7 (Optional) New slabs for Income Tax in Budget-2020 ............................. 5
2.2.8 Direct Tax Code (DTC) Task Force (2017-2019) ......................... 6
2.2.9 Tax Deducted at Source (TDS): (स्रोत पर कर कटौती)....................... 7
2.2.10 Tax Collected at Source (TCS): (स्त्रोत पर सांगहृ ीत कर) ..................... 7
2.2.11 Taxation Ordinance 2020 (कराधान अध्यादे श) .............................. 7
2.3 Taxation → Indirect Taxes updates after Prelims-2019 ....................... 8

2.3.1 : GST Council: Composition? जीएसटी पररषद ........................ 8
2.3.2 GST on J&K ...................................................................... 8

2.3.3 : Goods and Services Tax Appellate Tribunal (GSTAT) ............... 8
2.3.4 GST Revenue Collection Figures: जीएसटी राजस्त्र्व प्राक्तत के आांकडे ................ 8
2.3.5 E-Invoice System................................................................ 9

2.3.6 → ( ) Compensation to States → Controversy ....................... 10
2.4 [ ( )] 15th Finance Commission’s First report ....................... 11
2.4.1 [ ]15th FC: Horizontal devolution: in ⬇ order .............. 11
2.4.2 Finance Commissions & the fate of UTs of J&K & Ladakh ................... 11
2.4.3 → ( ु ान) ...... 12

) Grants from Union to States (सांघ से राज्यों को अनद
2.4.4 15th FC: Local Bodies Grants (स्त्थानीय ननकाय अनद

ु ान, 90k cr) ......... 12
2.4.5 Post-Devolution Revenue Deficit Grants (74kcr) ....................... 13

2.4.6 15th FC: Disaster Management Grants (आपदा प्रबांधन अनद
ु ान) ...... 13
2.4.7 15th FC: Sector Specific Grants (क्षेर-वर्वशशष्ट अनुदान, ~7700cr) ........ 13
2.4.8 15th FC: Special Grants: (वर्वशेष अनुदान , ~6700kcr) .................... 14
2.4.9 15th FC: Performance-based incentives (ननष्पादन-आधाररत प्रोत्साहन) . 14

2.4.10 15th FC: Other recommendations to Govt ......................................... 14
2.4.11 15th FC Report for 2020-21: conclusion ............................................ 14
2.5 ( ) Tax Evasion → Full-Budget-2019 Announcements ....................... 15
2.5.1 Sabka Vishwas L.D.S Scheme 2019 .................................. 15
2.5.2 Vivad se Vishwas Scheme for Direct Taxes (Budget-2020) ........... 15
2.5.3 Tax Avoidance through Non-Resident Status ........................... 16
2.5.4 (Full) Budget-2019: Ease of paying taxes & reducing tax-terrorism ....... 16
2.5.5 : Document Identification Number (DIN: दस्त्तार्वेज़ पहचान सांख्याक) ..... 17
2.5.6 Taxpayers’ Charter in Budget-2020 (करदाताओ का अर्धकारपर) ....... 17
2.5.7 ES19: “Use Behavioural Economics to improve Tax Compliance” ....... 17

2.6 ( ) Budget → Revenue Expenditure → Subsidies ........................ 19
2.6.1 Subsidies in budget 2020 ............................................................. 19
2.6.2 ES19: Use ‘Behavioural economics (व्यर्वहार अथिशास्त्र)’ to ↓ subsidy bill.. 19
2.6.3 National Recruitment Agency (NRA: राष्रीय भती एजेंसी) ................. 19
2.7 Budget → Capital Reciepts → Borrowing ..................................... 20

2.7.1 Full Budget-2019: Foreign Borrowing in Foreign Currency ........... 20
2.8 Budget → Capital Receipts → Disinvestment: वर्वननर्वेश................ 21
2.8.1 ES20 Vol1 Ch9 Privatization and Wealth Creation .......................... 21

2.9 Budget → Fiscal Deficit (राजकोषीय घाटा) ........................................ 23
2.9.1 Extra-Budgetary Resources (बजटे तर सांसाधन) ........................ 23
2.9.2 Modi’s Fiscal Stimulus (2019-) .......................................... 24

2.9.3 FRBM: Trigger Mechanism (to) Escape (Deficit control) Clause ............ 24
2.9.4 FRBM Act: 3 Documents (दस्त्तार्वेज़) .................................. 25
2.9.5 ⏬ Fiscal Consolidation (राजकोषीय एकरीकरण)............................... 26
2 💼BUDGET: THEME
Sometimes, FM will announce theme of budget to create media-hype:
Budget Year Did FM Speech mention a specific theme (विषयिस्त)ु ?

2018 No specific theme mentioned in speech
 2019-Feb: FM Piyush G. presented Interim budget in 16th LS
 2019-May: Modi won General Election
 2019-July: FM Nirmala S. presented General Budget in 17th Lok
2019
Sabha. Note: In this handout I’ve used the word ‘full budget-
2019’ for easier understanding.
Neither of these two budgets mentioned specific theme
Three themes:
1. Aspirational India: महत्र्वाकाांशी भारत
2020
2. Economic Development for all: सबके शलए आर्थिक वर्वकास
3. Caring India: दयभार्वना / दे खरे ख-करने र्वाला समाज
2.1 📘📘 ECONOMIC SURVEY (आर्थिक सर्वेक्षण)

- A (two volume) document prepared by the Chief Economic Adviser (CEA) in the finance
ministry. Vol2 shows annual data of past year. Vol1 shows prospects & suggestions for
the future years.
- There is no constitutional obligation to prepare or present it but usually it’s tabled in
the parliament a day before the Union Budget.
- 2019-Feb: No economic survey was presented before the interim budget.
- 2019-July: Economic Survey presented before the (Full) General Budget.
- While Budget is labelled after next financial year (e.g. 2019-20), the Economic survey
is labelled after previous Financial Year. e.g. The survey tabled on Feb-2018 is
labelled as “Economic Survey 2017-18”, the Survey tabled in July-2019 is labelled
“Economic Survey 2018-19”.
Table 1: Theme / Format of Economic Survey?
till‘13-14  Single Volume survey.

 Adopted Two Volume Systems like “IMF’s World Economic Outlook”.
 Vol1= future suggestions | Vol2= Past data.
2014-15
 Explicitly mentioned Theme in preface (प्रातकथन): “Creating opportunity
and reducing vulnerability” (through JanDhan-Aadhar-Mobile = JAM trinity)
 No theme in preface. PINK Cover for -Ending Gender Violence. (गुलाबी/
2017-18
लैंर्गक हहांसा को समातत करना)
No theme. But Sky Blue Cover for -Blueprint for making India a $5 trillion
2018-19
economy” (नीले गगन का रां ग/भारतीय अथिव्यर्वस्त्था को $5 हरशलयन तक ले जाना )
No theme but Lavender/purple color cover to show the synthesis of old and
2019-20 new ideas for wealth creation & economic freedom (to do business). जामन
ु ी/
धन सज
ृ न और आर्थिक स्त्र्वतांरता के शलए नये तथा परु ाने वर्वचारो का सक्ममलन
(Just like ₹100 currency note which comes in both “old” series as well as
“new” Mahatma Gandhi series with lavender/purple color)
2.2 🍋🤷‍♀‍ TAXATION → DIRECT TAXES UPDATES AFTER PRELIMS-2019

2.2.1 🍋🤷‍♀‍: 🏦 Corporation Tax Cut in 2019-Sep
Since Indian corporate sector was facing a slowdown, Nirmala.S announced tax-cuts:
Corporation Tax Before After
Existing Indian companies 25-30% depending on 22% tax
turnover +10% surcharge
+ 0-12% surcharge on (tax)
depending on profit +4% cess (on tax
+ 4% health edu cess + surcharge)
= 25.17%
New INDIAN MFG company registered -- 15 %
from 1/10/2019. (but they must start +surcharge &
manufacturing by 31/3/2023 cess as given
 Budget-2020: new INDIAN above
electricity cos also eligible in this = 17.01%
Foreign Company’s profit from India 40%+surcharge+cess no change
Zero profit companies 18.5% MAT 15% MAT
 Full Budget-2019:
o Additional tax benefits to companies producing solar power, electric batteries,
computer server, laptop etc. in any part of India.
o Companies operating from GIFT-city-IFSC given 100% exemption from
Corporation Tax for 10 years. (previously this ‘tax holiday’ was for 5 years;)
 Budget-2020:
o Tax holiday for developers of affordable housing extended till 31/3/2021.
(meaning 0% corporation tax / capital gains tax on their profit)
o If a Sovereign Wealth Fund (Ref-pillar#1C) invests in Indian infrastructure
projects → Tax holiday for them. E.g. Abu Dhabi Investment Authority
2.2.2 🍋🤷‍♀‍: 🏦🌱 Corporation Tax on Startups

Startup is a company not older than 10 years and not having turnover more than 100 cr.
Govt helps them through Startup India Scheme (Ref: Pillar4B). Budget-2020 →
✓ Startup can claim 100% deduction on its profits, for 3 years out of the first 10 years of
incorporation. (as such they get tax benefits under Startup India scheme, but new
budget fine tuned those technical definitions further.)
✓ Start-ups generally use Employee Stock Option Plan (ESOP) to attract talented
employees. But ESOP was subjected to various direct taxes → New budget gave some
technical reliefs to them.
2.2.3 🍋🤷‍♀‍: 🗃 Dividend Distribution Tax (DDT: लाभाांश वितरण कर)

- 1997: FM Chidambaram started to levy DDT on a shareholder’s dividend income. In
reality, company (=source) will cut that much ₹ ₹ portion from shareholders’ dividend,
& directly deposit that ₹ ₹ to the govt, as DDT.
- Shareholder did not have to pay Income tax on it.
- DDT Rate: 15% + cess + surcharge = 20.56% on dividend paid.
- Full-Budget-2019: Companies in GIFT-city-IFSC given some exemptions from DDT.
- Budget-2020: abolished DDT.But, dividend will be taxable in the hands of
shareholder (i.e. he’ll pay income tax on it). Benefits?
- Previously even lower middle-class shareholder’s ~ 20% dividend was cut in the
name of DDT. But now he may have to pay barely 0-5% income tax on income
from dividend. Thus, Shareholders get to keep more ₹₹ for spending→ shopping
spree → ⏫demand, production, economic growth.
- Foreign investors will be attracted to invest in Indian companies’ shares.
2.2.4 🍋🤷‍♀‍: 🗃🛒 Buyback Tax (शेयर की िापसी-खरीद पर कर)

Profit making companies sometimes repurchase their own shares back from shareholders
 Impact? These many shares are extinguished from company’s liability side.
 Benefit to company? No need to pay dividend on these shares in future.
 Budget-2013: Government ordered UNLISTED companies to pay “20% Buyback tax”
they buy back their own shares from the market.
 (Full) Budget-2019: made this applicable on LISTED companies as well. (Ref: 1C)
2.2.5 🍋🤷‍♀‍ : 🏠🎨💍Capital Gains Tax (CGT: पज

ां ीगत लाभ कर)
- When an owner makes profit by selling his capital assets such as non-agro-land,
property, jewellery, paintings, vehicles, machinery, patents, trademarks, shares,
bonds & other securities- then he has to pay CGT.
- Full-Budget-2019
- If Startup entrepreneurs unable to secure capital from investors → they
sometimes have to sell their house arrange money for starting business. So,
Government had exempted their house-selling-profit from CGT. This scheme
extended it till 31/3/2021.
- Companies operating from GIFT-city-IFSC given some exemptions from CGT.
- Budget-2020: some minor technical updates. notIMP.
2.2.6 🍋🤷‍♀‍: 👪 Income Tax on Individuals (व्यक्ततक आयकर)

James Wilson (financial member of the Council of India, founder of the Economist
magazine and Standard Chartered Bank) introduced income tax in India on 24 July 1860 to
compensate the British losses during 1857’s Sepoy mutiny. So, 24th July is celebrated as
Income Tax Day (Aaykar Diwas).
2.2.7 (Optional) New slabs for Income Tax in 💼Budget-2020

IF you give up exemptions and deductions (छट और कटौती) such as
- Salaried employees’ standard deduction, HRA, Leave Travel Concession (LTA)
- Section 80C-walle deduction (e.g. investments made in LIC/NPS etc upto ₹1.5 lakh per
year) Etc.
- Then you can opt to pay with new (reduced) income tax slabs viz.
TAXABLE Income (per annum) (new slab, if you give up (old slabs, if u
deduction & exemptions) don’t give up)
Upto ₹2.5 lakh Nil / 0% Nil / 0%
TAXABLE Income (per annum) (new slab, if you give up (old slabs, if u
deduction & exemptions) don’t give up)
>₹2.5 lakh-₹5 lakh 5% (But 12500 rebate so in 5% (But 12500
(meaning from 2,50,001 to 5,00,000) reality ₹0) rebate so in
reality ₹0)
>₹5 lakh to ₹7.5 lakh 10% 20%
>₹7.5 lakh to ₹10 lakh 15%
>₹10 lakh to ₹12.5 lakh 20% 30%
>₹12.5 lakh to ₹15 lakh 25%
>₹15 lakh 30%
Surcharge & cess applicable? Yes Yes
E.g. An employee with annual salary ₹1.95 lakh** ₹2.73 lakh
₹15lakhs will pay total INCOME TAX
**It is left to individual’s discretion whether he wants to stay in old / new system. But if
all people opted for the new slabs then Govt will hypothetically get ₹40,000 crore less
(compared to old system). Technically, it’s called “Revenue forgone” (पररत्यतत राजस्त्र्व).
 But, ⬇Income tax paid = ⬆disposable income with people (खचि करने के शलए उपलब्ध
आय)→ shopping spree → ⬆demand → production, economic growth etc.

 And shopping spree = ⬆Indirect tax collection e.g Mobiles = 18% GST.
 Currently the Income Tax Act is riddled with various exemptions and deductions.
Ordinary people can’t understand and have to consult Chartered Accountants (CA) &
investment advisors before filing taxes. Now process is easier. (सी.ए. की सहायता नहीां
लेनी होगी. कराधान का सरलीकरण होगा)
 In the old slabs, IT Act provided 100+ types of exemption /deduction. Budget-2020
removed 70 of them, & promised to ⬇the no of exemptions /deductions in future.
2.2.8 🍋🕵🏻🌱Direct Tax Code (DTC) Task Force (2017-2019)

2017: Finance Ministry setup this taskforce under CBDT member Arbind Modi. Later, he
retired so another CBDT member Akhilesh Ranjan was made Chairman.
 Taskforce had noted IRS officer, Chartered Accountant, Tax Lawyer, Corporate
Consultant etc. Chief Economic Advisor Krishnamurthy Subramanian was also a member
of this taskforce →2019-Aug report submitted to the Finance Ministry.
Major suggestions:
1. Replace the Income Tax Act 1961 with a simpler Direct Tax Code (प्रत्यक्ष कर सांहहता).
2. ⏬ the corporation tax further.
3. Tax rates for domestic and foreign companies should be same. This will encourage
ease of doing business in India.
4. Give additional tax relief for the startup companies. (More in Pillar4B)
5. ⏫ the number of tax slabs from present three (5%,20%,30%) to four (10%, 20%, 30%
and lastly 35% for super-rich earning ₹ 2 crore />).
6. Abolish Dividend Distribution Tax (DDT). [which is actually done in Budget-2020]
7. Setup Litigation Management Unit (मुकदमों की प्रबांधन इकाई) to look after the tax
related court cases in an efficient manner.
8. ++ many other reforms, but poor cost:benefit chasing them.
2.2.9 🍋👨‍🏫✂️Tax Deducted at Source (TDS): (स्रोत पर कर कटौती)
- Full-Budget-2019: TDS: Other measures (list not exhaustive)
- (while companies are required to cut TDS on almost every payment made to
anyone, but from now onwards) Even if an individual person is paying larger
than ₹ 50 lakhs to contractors or professional, he’ll have to cut 5% TDS. (So tax
evasion by real estate brokers, high-profile wedding-organizers etc. can be
checked.)
- Budget-2020: Following changes made:
Table 2: (What/HOW/NOTIMP). This is just for illustration
TDS% ⏬ to 1) attract foreign investment 2) TDS applied / %⏫ to stop tax evasion

reduce hardship opportunities
1. When Indian company repays loan interest 4. TDS when an e-commerce company
to foreign lenders. pays to sellers.
2. Bond market @Gift-City-IFSC 5. Loan interest paid by cooperative
3. Payment for Technical services societies.
2.2.10 🍋🏎✂️Tax Collected at Source (TCS): (स्त्रोत पर सांगह ृ ीत कर)

- Govt found many Indians not paying single ₹ of income tax and YET:
- converting crores of rupees into dollar$, sending it abroad in pretext of child
education / family remittance.
- Going for luxury foreign vacations
- so it could be some black money/tax evasion game behind curtains.
- Therefore, Budget-2020: Authorized Forex dealers will have to cut 5% TCS while
converting Indian ₹₹ into foreign currency. Similar norms on foreign tour operators.
2.2.11 🍋🤧🔨Taxation Ordinance 2020 (कराधान अध्यादे श)

Issued on 31/MAR/2020 to give relief during Corona outbreak.
 Income Tax Act: 100% exemption if donations made to Prime Minister’s Citizen
Assistance and Relief in Emergency Situations Fund (PM CARES Fund)
 Upto 2020-June-30
o Taxpayers can make investments or payments in LIC, Public Provident Fund and
National Savings Certificates etc. & for claim its deductions for FY 2019-20
o Vivad se Vishwas Scheme extended
o Sabka Vishwas Legal Dispute Resolution extended
 Certain technical reliefs in depositing the TDS, TCS, GST etc to Government
+ many other things but we are NOT HERE for CA Exam.
2.3 🍋🛒 TAXATION → INDIRECT TAXES UPDATES AFTER PRELIMS-2019
2.3.1 🍋🛒: 🧔👩‍🦲🕉 GST Council: Composition? जीएसटी पररषद

Union representatives (2 प्रनतननर्ध) States’ representatives (31)
1. Finance Minister as the Chairman -
Each state government (including UT with
2. Union Minister of State for finance or legislature: J&K, Delhi & Puducherry)
can nominate 1minister to GST council- it
revenue. (वर्वत्त या राजस्त्र्व के केंद्रीय
may be their minister of finance or Dy.CM
राज्य मांरी) or any other minister as per their wish.
- One of them will be selected as the Vice-
Chairman of GST council.
Voting power: 1/3rd Voting power: 2/3rd
✓ Council Meetings to proceed only with quorum of 50% of total membership.
✓ If all members don’t no unanimously agree over a proposal (यहद ककसी प्रस्त्तार्व पर
सर्विसममनत नहीां, तो र्वोहटांग होगा) → it’ll be put for voting → then minimum 3/4th votes
required to pass the proposal.
✓ ** Originally, state Government run lottery = 12% GST & other (private) lotteries= 28%
GST. But from 2020 all types of lotteries = 28%. While Kerala Govt opposed to this move
fearing less sales of State lottery so GST council had to go for voting → majority voted in
favour of 28%. This is the first matter since inception of GST council, wherein voting had
to be done. All previous decisions were taken unanimously without voting.
✓ To boost electric vehicle, Modi Government requested GST council to reduce GST on e-
vehicles from 12% to 5% but decision yet awaited. So, keep an eye on newspapers, and
update as and where required.
✓ For more, you may refer to: https://cbec-gst.gov.in/gst-goods-services-rates.html
2.3.2 🍋🛒 GST on J&K

✓ Jammu & Kashmir passed SGST Act on 8th July, 2017→ then GST system
became effective there as well. JAMMU AND KASHMIR REORGANISATION ACT, 2019
has not abolished this SGST act. Present status is:
○ SGST applicable on J&K (UT with Legislature:वर्वधानयका युतत केंद्रशाशसत प्रदे श)
○ UTGST on Ladakh (UT without Legi: वर्वधानयका-हीन केंद्रशाशसत प्रदे श)
2.3.3 🍋🛒:⚖️🕵️‍♂‍Goods and Services Tax Appellate Tribunal (GSTAT)

 2019: This quasi-judicial body was setup in Delhi, as per the provisions of CGST Act.
 Consists of 1) A chief labelled as ‘president’ 2) One Technical Member (Centre) 3) one
Technical Member (State).
 र्वस्त्तु एर्वां सेर्वाकर अपीलीय न्यायार्धकरण has two functions:
o dispute resolution between the Centre and States.
o Hearing appeals against the orders passed by Union and State level GST bodies.
2.3.4 📈 GST Revenue Collection Figures: जीएसटी राजस्त्ि प्राप्तत के आांकडे

GST registered suppliers have to deposit the GST at the GSTN portal on monthly basis
(except those who opted for the GST composition scheme).
In monthly collection of GST, there are ups and downs based on seasonality.
Year/Month 2017 monthly avg. 2017 monthly avg. 2019 monthly avg (Financial year yet to finish)
GST collection 89700 cr 98114 cr In some months crossed 1 lakh crore but zigzag
Table 3: Data from 💼बजेट-2020 (Approx. Amount)
Year → 2018-19 2019-20 2020-21

(actual) (revised) (Est)
- Excise Duty (petrol, diesel etc.) & their road 2,30 2.48 Lcr 2.67 Lcr
infra cess Lcr
- National Calamity Contingent Duty on
Tobacco products
Customs Duty, Social Welfare Surcharge, 1.17 1.25 Lcr 1.38 Lcr
Health Cess Lcr
A) CGST 4.5 Lcr 5.14 Lcr 5.80 Lcr
B) IGST 29k cr Not mentioned
C) GST compensation Cess 95k cr 98k cr 1.10 Lcr
GST collected by Union=A+B+C 5.80 6.12 Lcr 6.90 Lcr
Lcr
Table 4: combined ranking of direct and indirect taxes?
Upto Budget Corporation> GST> IT > Excise> Customs > STT

Estimate-2019
Revised Est 2019 GST> Corporation > IT > Excise> Customs > STT
Budget-2020 Same as above cell
Figure 1: Tax collection as a % of GDP, source 💼Budget-2020
2.3.5 🚛🧾 E-Invoice System

- GST council announced the E-invoice (=bill generation) from January-2020 on pilot
basis, then E-way bill will not have to be generated separately.
- This will provide relief to businessman, will improve the tax-surveillance and fight against
false ITC-credit claims through fake invoices.
- E-invoice shall be compulsory from 1/April/2020. (Although deferred because
computer system not yet fully ready)
2.3.6 🧔 → 🤑(👩‍🦲👳‍♀‍) Compensation to States → Controversy

Year → 2018-19(actual) 2019-20 (revised) 2020-21 (Est)
GST Compensation Cess 95k cr 98k cr 1.10 LCr

 Union is supposed to release compensation cess (प्रनतपनति उपकर) to states on monthly
basis, but since 2019-August onwards payment pending.
 2019-Dec: only partial compensation released.
 FM Nirmala. S says, “Sales ⬇, so we have not collected enough cess₹₹.”
 Non-BJP states first complained to GST council, but it did not help much. So now those
State Govts even thinking of moving to Supreme Court, which hints that cooperative
federalism is in danger.
2.4 🍋 [🧔⚖️(👨‍🦲👳🏻‍♀‍👳🏻)] 15TH FINANCE COMMISSION’S FIRST REPORT
15th Finance Commission recommended the vertical devolution (ऊध्र्वािधर कर अांतरण) from
the ‘divisible pool’ of union taxes in following manner. (IGST, Cess, Surcharge not counted.)
FC → 12th (2005-10) 13th (2010-15) 14th (2015-20) 15th (2020-21)

Chairman? C.Rangarajan Vijay Kelkar VY Reddy NK Singh
States Share 30.5% 32% 42% 41%*
*15th FC’s justification: Compared to 14th FC, 1% extra Union should keep for UTs of J&K &
Ladakh’s security & other needs.
15th FC horizontal distribution formula components (घटक) → (भाराांक%) Weight%
Income Distance (आय में अांतर):

 State GSDP divided by its Population = per capita GSDP. 45%
 For most states, Haryana’s per capita GSDP is taken as benchmark. How
poorer is your state compared to Haryana= more ₹₹ you’ll get.**
Area (क्षेरफल) More area = more ₹₹ 15%
Population (as per Census-2011: आबादी): More population = more ₹₹ 15%
Demographic Performance (जनसाांक्ययकीय ननष्पादन): States that have ⬇

12.5%
Total Fertility Rate (TFR: कुल प्रजनन दर), will get ⬆₹₹. More in Pill#6
Forest and Ecology (िन एिां पाररक्स्िकी): More forest= more ₹₹ 10%
Tax Effort (कर प्रयास): States who’ve improved their per capita (State)
2.5%
tax collection in the last 3 years = get more ₹₹
Total (कुल) 100%
** Note: computing income distance: the Highest per capita GSDP: 1) Goa 2) Sikkim 3) Haryana 4) Himachal.
But since Goa, Sikkim are very small states with a unique economic situation, so it’ll distort statistical
formula. So, there are some internal fine tunings done in formula. Long story cut short: Haryana taken as
benchmark for most states. If you’ve more intellectual curiosity about how above indicators are calculated in
real life, you may spend waste time reading the original report@ https://fincomindia.nic.in/
2.4.1 🍋 [👨‍🦲⚖️👳🏻‍♀‍ 👳🏻]15th FC: Horizontal devolution: States’ share in ⬇ order

Table 5: Try to remember 3-5 names in top & bottom each, & your home state.
1) Uttar Pradesh (17.931%) 11) Chhattisgarh (3.418%) 21) Himachal (0.799%)

2) Bihar (10.061%) 12) Gujarat (3.398%) 22) Meghalaya (0.765%)
3) MP (7.886%) 13) Jharkhand (3.313%) 23) Manipur (0.718%)
4) W. Bengal (7.519%) 14) Assam (3.131%) 24) Tripura (0.709%)
5) Maharashtra (6.135%) 15) Telangana (2.133%) 25) Nagaland (0.573%)
6) Rajasthan (5.979%) 16) Kerala (1.943%) 26) Mizoram (0.506%)
7) Odisha (4.629%) 17) Punjab (1.788%) 27) Sikkim (0.388%)
8) Tamil Nadu (4.189%) 18) Arunachal (1.76%) 28) Goa (0.386%)
9) Andhra (4.111%) 19) Uttarakhand (1.104%) ANY type of UT = 0% here
10) Karnataka (3.646%) 20) Haryana (1.082%)
2.4.2 🧕Finance Commissions & the fate of UTs of J&K & Ladakh
Until 10th Finance Commission, the FC would also prescribe the revenue sharing formula
between the Union Government and Union Territories.
➢ But this practice stopped since 11th finance commission i.e. Finance ministry itself
decides how much revenue will be shared with Union Territories based on its own
discretion (अपने वर्वर्वेक से तय करता है ). Finance Commission no longer prescribed
formula in this regard. But,
➢ 31st October 2019: The state of Jammu Kashmir was officially split into the union
territories of Jammu Kashmir and union territory of Ladakh.
➢ Jammu and Kashmir Reorganization Act, 2019 mandates that:
o Whatever amount the former state of J&K was supposed to receive between
31/10/2019 to 31/3/2020 (as per 14th FC formula) …It will be distributed
between these two new union territories on the basis of population ratio and
other parameters.
o President of India shall require 15th FC to make award for UT of J&K. However,
looking the 15th FC report, no separate share is given in verticle / horizontal tax
devolutions. Simply 1% extra kept with Union to look after J&K & Ladakh.
2.4.3 🧔 → 💸🤲🏼 (👨‍🦲👳🏻‍♀‍) Grants from Union to States (सांघ से राज्यों को अनुदान)
Apart from the tax devolution, FC would also suggest Union to give grant to the states
(grant= NOT loan, so need not return with interest).
14th FC suggested following types of grants→
1. For All States: Grants for Panchayati Raj Institutions (PRI) and Urban Local Bodies
(ULB). These grants will be subdivided into two parts: basic grant and (10-20%)
performance based grants.
2. For All States: Disaster Management Grants.
3. For 11 (कांगाल) States: Post-Devolution Revenue Deficit Grants (अांतरण-पश्च राजस्त्र्व
घाटा अनद
ु ान) for ~11 States.
15th FC suggested following types of grants (in ⬇decreasing order, 2020-21)→
1) Local Bodies Grants (स्त्थानीय ननकाय अनद
ु ान, 90k cr)
2) Post-Devolution Revenue Deficit Grants (74kcr)
3) Disaster Management Grants (आपदा प्रबांधन अनुदान: 41kcr)
4) Sector Specific Grants: Nutrition (क्षेर-वर्वशशष्ट अनुदान, ~7700cr)
5) Special Grants: (वर्वशेष अनद
ु ान , ~6700kcr)
6) Performance-based incentives (ननष्पादन-आधाररत प्रोत्साहन)
2.4.4 💸🤲🏼🏕15th FC: Local Bodies Grants (स्िानीय ननकाय अनद ु ान, 90k cr)
2020-21 Approx. Amount in ₹cr.
Rural Local Bodies ~60k. Out of this,
- given to all three  50% is Tied Grants (ननहदि ष्ट) = meant only for specific objectives
tiers in the
1) sanitation 2) water
panchayats, i.e.
village, block and  50% is Untied/basic (प्राथशमक) = can be used for any objective
district. And also, depending on location. Except salary & establishment (building
th
for 5 and 6 th renovation, electricity bill etc)
Sch. areas From 1/4/2021 they’ll be required to submit audited accounts
online through Panchayati Raj Institutions Accounting Software
(PRIAsoft) to Comptroller and Auditor General (CAG)
Urban Local ~30k. Out of this,
Bodies (ULB) &  ~9k cr for million plus population-walli cities. (Excluding Delhi
Cantonment boards & Srinagar for being in UT). These grants are mainly to be used
for air quality improvement, water & solid waste management.
 ~21k for cities with <1million pop: 50% untied (basic) grants +
50% tied for specific objectives 1) drinking water 2) solid waste
management.
From 1/4/2021, ULBs required to 1) reform property tax rates 2)
submit audited accounts to CAG online.
Total grants ~60k Rural + ~30k Urban = 90k.
2.4.5 💸🤲🏼🤦🏼‍♂‍Post-Devolution Revenue Deficit Grants (74kcr)

Suppose (amt in ₹cr) 2020-21
Andhra’s own State Budget: Revenue Expenditure - Income = Revenue Deficit (राजस्त्र्व घाटा) 41 kcr
Andhra’s share from Union’s taxes based on horizontal devolution 35 kcr
Andhra’s Post-Devolution Revenue Deficit = 41-35=6 kcr.
So 15th FC will give Andhra extra 6 kcr as Post-Devolution Revenue Deficit Grant (अांतरण-
पश्च राजस्ि घाटा अनद
ु ान). Only 14 states eligible: Assam, Himachal Pradesh, Manipur,
Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, Andhra,Kerala, Punjab,
Tamil Nadu, West Bengal.
2.4.6 💸🤲🏼🌬🌪15th FC: Disaster Management Grants (आपदा प्रबांधन अनुदान: 41kcr)
Disaster Management Act, 2005 → Ministry of Home Affairs (गहृ मांरालय) looks after the
subject.
15th FC: 2020-21 National Disaster Risk Management Fund (NDRMF: State Disaster Risk
recommendations एनडीआरएमएफ/राष्रीय आपदा जोखखम प्रबांधन कोष) Management Fund (SDRMF)
ससफ़ाररशे
allotted ₹ cr ~12k ~29k**
Internal distribution  80% amt for National Disaster Response Fund Same pattern, change word
आांतररक वर्वतरण (NDRF:एनडीआरएफ/राष्रीय आपदा सहायता कोष) from National to ‘State’
 20% amt for National Disaster Mitigation Funds
(NDMF:एनडीएमएफ/राष्रीय आपदा प्रशमन कोष)
**Notes on SDRMF:
1) How much will an individual state get? Ans depends on its past disasters, risk exposure
(area & population wise) etc.
2) Respective State Govt is also required to contribute some money in SDRMF
2.4.7 💸🤲🏼🍽15th FC: Sector Specific Grants (क्षेत्र-विसशष्ट अनुदान, ~7700cr)

 Seven sectors: health, pre primary education, judiciary, rural connectivity, railways,
statistics, housing. (स्त्र्वास्त््य, पर्वि प्राथशमक शशक्षा, न्यायपाशलका, ग्रामीण सांपकि, रे लर्वे,
साांक्ख्यकी, आर्वास)
 15th FC asked the Union & State Government to build a preparatory framework
(प्रारां शभक रूपरे खा), then later it’ll recommend the actual ₹₹ figure.
 At present, 15th FC only recommended health → Nutrition grant (₹7700+ cr पोषण
अनद
ु ान) to combat malnutrition (कुपोषण). Ministry of Women and Child Development
(MoWCD: महहला बाल वर्वकास मांरालय) will oversee its utilization.
2.4.8 💸🤲🏼🙋🏿15th FC: Special Grants: (विशेष अनुदान , ~6700kcr)
 If a state receives less ₹₹ in (15th FC’s devolution + post revenue deficit grants) in 2020
compared to 2019 (when 14th FC Rangarajan’s formula was in effect),
 Then such State will get Special Grants just to prevent any ‘feeling of injustice / bias’
(अन्याय / पक्षपात कक हमको पहले से कम पैसा शमल रहा है )
 Only 3 states eligible: Karnataka, Telangana and Mizoram. Total ₹6,764 cr for 2020-21
2.4.9 💸🤲🏼💪🏿 15th FC: Performance-based incentives (ननष्पादन-आधाररत प्रोत्साहन)

15th FC didnot decide the amount yet but asked Union’s Ministries/Departments to
prepare State-wise baseline indices/score/data (आधारभत सचकाांक) by 2020-May/June for
following performance indicators:
1) Implementation of Agriculture. Reforms कृवष सुधारों का कायािन्र्वयन
2) Development of Aspirational Districts (=backward districts identified by NITI Aayog)
आकाांशी क्जलो का वर्वकास
3) Power (Electricity) Sector Reforms. बबजली क्षेरमे सुधार
4) Enhancing Trade including Exports. व्यापार र्व ननयाित को बढार्वा दे ना
5) Promotion of Domestic and International Tourism. घरे ल और अांतरािष्रीय पयिटन को बढार्वा
6) Education, esp. of girls. शशक्षा, खासकर कन्या शशक्षा
If States perform well in above areas, they’ll get more ₹₹ grants than other States in
subsequent years.
2.4.10 15th FC: Other recommendations to Govt

 Some States have requested special category status(वर्वशेष श्रेणी का दजाि). But it’s not
part of our mandate/Terms of Reference. So we’ve nothing to say on this matter.
 Reform the direct taxation system → increase tax collection.
 Reform GST’s operational challenges, slabs and rates.
 Review the outcomes of all Government schemes. Merge/abolish non-essential
schemes → reduce Expenditure.
 We need a law on “Public Financial Management System (लोक वर्वत्तीय प्रबांधन प्रणाली)”
it’ll prescribe the budgeting, accounting, internal control and audit standards to be
followed at all levels of government.
 Govt should follow FRBM Act in letter and spirit. Avoid off-budget borrowings through
para-statal entities. (More in Pillar2: FRBM Section)
2.4.11 15th FC Report for 2020-21: conclusion

✓ Sustainable Development Goal#10 (SDG, सतत वर्वकास लक्ष्य): reduce inequality within the country. असमानता को कम करो
✓ SDG-Goal#16 requires nations to build effective, accountable and inclusive institutions at all levels. लोक प्रशासनके सभी
स्त्तरो मे सांस्त्थानो को प्रभार्वी, जर्वाबदे ह और समार्वेशी बनाओ
✓ In this regard, 15th FC has tried to provide a framework for 1) equitable distribution of revenue 2) incentives tied
with performance. ऐसा ढाांचा जांहा 1) करवर्वतरण समानता के साथ और 2) प्रोत्साहन प्रदशिन के हहसाब से शमलेगा
It’ll greatly help to improve India’s human development and economic growth. मानर्व वर्वकास और आर्थिक वर्वकास मे मदद
शमलेगी
2.5 (🍋👺)💼 TAX EVASION → FULL-BUDGET-2019 ANNOUNCEMENTS
✓ Stick: Government provides (indirect tax) credits to exporters for the inputs used in
the manufacturing of export products. However, some villains generate fake invoices
to claim such credits. If the amount is ₹ 50 lakh/> it'll be made a non-bailable and
cognizable offence (सांज्ञय
े अपराध i.e. police can arrest without warrant).
✓ Cash-based economy = more opportunities for tax evasion and avoidance. So, need to
encourage less-cash economy:
o Carrot: If a businessman has annual turnover more than ₹ 50 crore → No MDR
on him or his customer. RBI and Banks will absorb these MDR costs. We’ll
amend Payments and Settlement Systems Act, 2007 to implement this.
o Stick: 2% TDS on cash withdrawal exceeding ₹ 1 crore in a year from a bank
account from a single user account in post office / bank.
✓ Stick: (Often, businessman deposits black money in his wife’s account and when/IF
raided, wife feigns ignorance about who deposited money in her account.) So, Nirmala
S. promised to initiate technical reforms so that no one can deposit money in others’
account without the account holder’s permission.
✓ Carrot: Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (‘LDS’). →
2.5.1 🍋🛒👺🙌 Sabka Vishwas L.D.S Scheme 2019

- > ₹ 3.75 lakh crore tax revenue is locked in the service tax and excise duty related
cases.
- (Full) Budget-2019: Launched Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019
(वर्वर्वाद समाधान योजना).
- Businessman accepts his fault, Tax officials gives a ‘discount/relief/waiver’ in the
penalty/late-fees, and the matter is settled instead of litigating in courts for years &
years.
2.5.2 🍋👺🙌 Vivad se Vishwas Scheme for Direct Taxes (💼Budget-2020)

Presently, >₹9 lakh cr worth direct tax cases are pending before Appellate Forums (अपीलीय
मांचों के समक्ष लांबबत मामले) viz. IT Commissioner (Appeals) → Income Tax Appellate
Tribunals (ITAT: आयकर अपीलीय न्यायार्धकरण ) → HC → SC. So, in Budget-2020
announced “Direct Tax Vivad se Vishwas Bill/Act, 2020”.
 Scope: Appeal related to Income tax or Corporation Tax, pending before a forum as of
31/Jan/2020. Then,
 Taxpayers can settle with IT dept in following manner
o A) If IT dept filled appeal → he has to pay 50% of disputed tax amt
o B) If Taxpayer filled appeal → he has to pay 100% of the disputed tax amt
 In both situations, he'll get a complete waiver/relief from interest and penalty (ब्याज
और जुमािना मे से माफी). Scheme has certain variations if tax amount is settled but
interest/penalty/arrear is disputed. But chasing that info: poor cost:benefit for MCQs.
 Above scheme is valid upto 31/March/2020. Afterwards, there is modified formula upto
30/Jun/2020 wherein he may have to pay some small extra amount.
 This scheme is not applicable if:
o person is under prosecution for criminal activities
o If black money is hidden in foreign countries.
Controversies? 1) Southern India’s Members of Parliament angry that Hindi scheme name
is used. 2) both honest and dishonest tax payers are treated equally. Even dishonest tax
payer can now settle without paying interest/penalty. 3) Income Tax officials’ job-transfer
etc will be linked to how many cases they solve in this scheme. They’re also asked to work
on weekends to fulfill these targets. = resentment /demotivation among staff.
2.5.3 🍋👋🤵 Tax Avoidance through Non-Resident Status

If a person is 🦁Has to pay his IT on 🐼Has to pay IT on global income
income coming from e.g. income coming from the
India? USA/China?
Ordinarily Yes Yes
resident of India
Non-residents Yes No
If India has a double taxation avoidance agreement (DTAA) with other nation, then above
things may differ (e.g. recall erstwhile Mauritius CGT-roundtripping-walla example)
Table 6: 💼Budget-2020 changed these definitions
Definition in Indian Tax laws Before Budget- Budget-

2020 → 2020
Ordinarily Indian Resident (साधारणतया भारतीय 182 days/> in a 120 days/>
year
ननर्वासी) = person who stays in India for →
Non resident (गैर ननर्वासी)= person who stays outside 182 days/> in a 246 days/>
year
India for →
Implications? Person will have to stay out of India for a longer period if he want to be
treated as “Non-Resident” to avoid taxes on his global income.
Budget-2020: A citizen of India (even if he is staying abroad), but if he is not liable to

tax in any other country → he’ll have to pay tax in India. E.g. United Arab Emirates and
Bahrain where no income tax is payable.
2.5.4 💼 (Full) Budget-2019: Ease of paying taxes & reducing tax-terrorism

Pre-filled online forms for Tax Payers
We’ll extract your financial data from Banks, Stock exchanges, Mutual Funds, EPFO,
Employers’ TDS submissions etc. and provide you with a Pre-filled tax returns containing
your salary income, capital gains from share/bond, bank interests, etc. This will help in
two ways:
1) personal income tax payers’ time and energy saved
2) accuracy of reporting income and paying taxes
Faceless interaction between Tax payers and Tax official
Personal interaction between the assessee and Income Tax official = more chances of
harassment / bribery. So, we’ll launch two reforms:
1) Cases will be allotted in random computerized lottery basis to IT officials without
disclosing the name, designation or location of the Officer.
2) Faceless assessment (फेसलेस ननधाारण) in electronic mode. E.g. assessee received a
notice about discrepancy in his reported income vs TDS submitted by his banker, then
at initial stage assessee need not visit IT-office, simply give clarification in web-portal.
3) Budget-2020: Faceless appeal (फेसलेस अपील) process introduced. So, even in
appeal stage, assessee need not physically visit IT commissioner / tribunal.
2.5.5 🍋🕵🏻:🧾 Document Identification Number (DIN: दस्तािेज़ पहचान सांययाक)

Whenever Tax official sends letters to taxpayers regarding search authorisation, summons,
arrest memo, inspection notices etc. All such documents will have computer generated
‘Document Identification Number’ (DIN).
✓ 2019-Oct: Central Board of Direct Taxes (CBDT) implemented this.
✓ 2019-Nov: Central Board of Indirect Taxes and Custom (CBIC) implemented this.
DIN system benefits?
✓ It’ll create a digital directory of communication between tax authorities and
taxpayers. Transparency, accountability, efficient and faster clearance of cases,
because all the information available at the click of a mouse.
✓ If a document doesn’t have DIN number, it’ll be treated invalid. Thus, DIN system will
prevent the corrupt tax officials from sending fake notices to harass/blackmail
taxpayers for bribes.
Sidenote: Director Identification Number (DIN): Director of every company is required to
obtain this number from the Ministry of Corporate Affairs under the provisions of
Companies Act. It helps monitoring the company act provisions related to “1 person can’t
be director in more than ‘x’ number of companies” etc.
2.5.6 📯📜 Taxpayers’ Charter in 💼 Budget-2020 (करदाताओ का अधधकारपत्र)

A citizens’ charter (नागररक अर्धकारपर) is a document of commitments made by a
government agency to the citizens in respect of the services being provided to them.
 e.g Dept of Post's citizen charter reads, "we'll deliver speed post anywhere in India by
4-5 days →ELSE complain online to this website & we'll solve it → if not solved in 90
days then complain to Postmaster General → then to Chief Postmaster General.”
 1991: citizen charter system first started in UK by PM John Major
 1997: introduced in Indian union ministries/departments.
 Budget-2020: CBDT will declare a Taxpayers’ Charter. So, Tax payer will easily
know what services / complaint redressal mechanisms (शशकायत ननर्वारणतांर) are
available to him= ⬇taxpayer’s harassment (करदाता का उत्पीडन)
2.5.7 📘📘 ES19: “Use Behavioural Economics to improve Tax Compliance”

❖ Plato said, “What is honored in a country, is cultivated there.” Indians join military
because 1) salary 2) because serving in the armed forces is considered ‘honorable’.
❖ So, we should use the principles of Behavioral Economics (व्यार्वहाररक अथिशास्त्र) enhance
tax compliance (कर अनप ु ालन). We’ve to modify the social norm from “evading taxes is
acceptable” to “paying taxes honestly is honorable.”
❖ Tax Morale (कर सांबध
ां ी नैनतक मनोबल): it is the intrinsic motivation (आांतररक प्रेरणा) of
taxpayers to pay taxes. When tax morale is down → motivation for tax evasion
increases.
Table 7: Tax Morale is affected by two types of fairness
Fairness Vertical Fairness Horizontal Fairness

ननष्पक्षता (उध्िााधार ननष्पक्षता क्षैनतज) (क्षैनतज ननष्पक्षता)
Tax Payer’s What I pay in taxes is There should not be a great
thought commensurate to the benefits I difference in the taxes paid by the
process → receive as services from the ‘similar’ sections of society.
Government.
His Tax He sees taxpayers' money wasted If a salaried employee and a
morale is in public expenditure (like shopkeeper are earning ₹8 lakhs
lowered Mayawati’s elephant statutes) per annum, still the salaried
when → instead of better quality of water, employee is forced to pay more
road, education or electricity. taxes than this shopkeeper,
because
- TDS on salary whereas
shopkeeper underreports his
sales in cash payment.
- Shopkeeper shows less profit
through fictitious business
expenditures.
Solution(s) ✓ under-constructions projects ✓ SMS, billboards highlighting
should show signboards “Your self-employed individuals who
tax money at work” pay good amount of tax.
✓ Reminding tax payers that ✓ Public shaming of individuals
public goods can only be who don’t pay taxes. It’ll scare
provided in return for tax other tax-evaders that the
compliance. Most people in probability of their detection
your local community pay has increased.
their taxes on time. ✓ Avoid Tax Amnesties. Give
stringent punishment to tax
evaders.
Further, CEA Subramanian K. suggested:
✓ Top 10 highest taxpayers within a district → They should be given VIP-treatment such
as faster boarding privileges at airports, special “diplomatic” type lanes at
immigration counters, fast-lane on roads and toll booths, etc.
✓ Highest taxpayers over a decade → Important places should be named after them e.g.
roads, trains, schools, universities, hospitals and airports.
✓ In Hinduism, Islam and Christianity - unpaid debt is considered a sin. So,
advertisements should highlight how tax evasion is a violation of such
“spiritual/religious norms”.
✓ Ease in Paying Taxes: Pre-populated Income Tax forms with easy to understand terms.
Even if a person’s tax liability is ZERO, he should be required to fill Income Tax form.
✓ Automated TDS as and where possible and timely release of Tax refunds.
Hindi-Medium-Mains candidates should refer ES2018-19 Vol1 Ch.2

page52’s bullet 2.33 upto page 55’s box 5 to get the clean & formal
vocabulary for Answer Writing
2.6 📤⏰(🌽⛽️) BUDGET → REVENUE EXPENDITURE → SUBSIDIES
2.6.1 Subsidies in budget 2020
Subsidies: Within them descending order (Approx. Figures) 2.6 lakh cr
⬇ means it’s reduced than last budget
1. Food subsidies: ₹ 1.2 lakh cr. ⬇ Last budget
allotted
2. Fertilizer (Urea > Others): ₹ 71,000 cr⬇ ₹3.4 lakh cr so
3. Fuel (LPG > Kerosene): ₹ 41,000 cr⬆ ⬇
4. Interest Subsidies on loans: Farmers (highest), MSME, Affordable
Housing, LIC Vay Vandana Yojana etc.: 28,000 cr.⬆
5. Other (Price stabilization fund, Cotton & Jute etc.): 6000 cr. ⬇
2.6.2 📘📘 ES19: Use ‘Behavioural economics (व्यिहार अिाशास्त्र)’ to ↓ subsidy bill

To reduce Government’s subsidy burden, Above the Poverty Line (APL: गरीबी रे खा से ऊपर)
households should be encouraged to voluntarily surrender their LPG subsidies. North
eastern states have shown higher rate of subsidy surrender as compared to other states.
Following reforms required:
✓ People have a strong tendency to go with the status quo. So, ‘Default ticked option’ in
LPG registration forms should be ‘I wish to give up the subsidy’, so a person will be
‘forced’ to untick the option to avail the subsidy benefit.
✓ Similarly, income tax forms should contain extra-fields with pre-ticked options like ‘I
want to give up LPG subsidy’.
✓ The online /SMS-based ‘subsidy giving up process’ should be quick and hassle-free. It
should not take more than a few minutes. Because every additional minute required to
complete the formalities= increases the chances that person will drop out in the
middle of the process.
✓ People act positively when they see others act positively, and particularly when they
can relate to such individuals. So, online “scroll of honour” should show
name/photos/social media-profiles of others in their area who gave up subsidies.
✓ Advertisements to highlight that “Rich people are helping in poverty removal by giving
up subsidies.“
✓ When people are watching a movie with social message (such as Padman, Toilet Ek
Premkatha etc), it should contain ad asking people to give up full / partial subsidy.
✓ Once a person gives up subsidy, he should be shown the photos of poor people
benefitting from his act / or a video with a beneficiary saying ‘thank you’.
Hindi-Medium-Mains candidates should refer ES2018-19 Vol1 Ch.2 bullet 2.26 to 2.31 to
get the clean & formal vocabulary for answer writing.
2.6.3 🏃🏻‍♀‍✍🏻🕵️‍♂‍National Recruitment Agency (NRA: राष्रीय भती एजेंसी)

 Present: multiple recruitment exams conducted by multiple agencies at different
points of time throughout the year..
 Future: NRA will conduct Common Eligibility Test for recruitment to Non-Gazetted
personnel in Government and PSBs. → SSC and IBPS will conduct Mains exams for
respective posts → time and cost saved for both candidate and recruiting agencies.
Budget-2020: we’ll set up NRA & open a (computerized) test centre in every district.
2.7 💼🤲 BUDGET → CAPITAL RECIEPTS → BORROWING
2.7.1 💼🤲🎅Full Budget-2019: Foreign Borrowing in Foreign Currency
केंद्र सरकार के वर्वदे शी ऋण को वर्वदे शी मुद्रा में जुटाने का मसला
Introduction (Origin): In the (Full) Budget-2019, FM Nirmala S. announced, "India’s

sovereign external debt to GDP is among the lowest (~5%). The Government would start
raising a part of its borrowing programme in external markets in external currencies."
Arguments in favor Against

1. In domestic market, the 1. Exchange Rate Risk (वर्वननमय दर का जोखखम): If
'crowding out of private rupee weakens against the dollar during the
corporate borrowers' will bond’s tenure ($1: ₹ 60 → ₹ 70), the
decline. Corporates will be government would have to return more rupees
able to mobilize more funds to pay back the same amount of dollars. Then
from local market → factory the loan may turn out to be 'more expensive'
expansion, jobs, GDP growth. than originally anticipated.
2. In the advanced economies 2. It's true that presently Indian Government's
such as USA, EU: the loan rates external borrowing is very low, but once this
are very low, so our 'door' is opened, subsequent governments may
government may be able to get get tempted to borrow more and more from
cheaper loans. the foreign sources to finance their (populist)
3. Total (cumulative) internal welfare schemes, ultimately it can result into
debt of Union is ~₹ 96 lakh crisis when exchange rates turn volatile.
crores, whereas external debt 3. Better to increase the foreigners' investment
is ₹ 2.68 lakh crores so if we limit in G-Sec (in ₹ currency) and attract them
borrow a little more from to come to India, rather than we going
external sources it won't harm. 'abroad' to get their money in $ currency.
Conclusion: whether we should borrow in foreign currency or not?
 (Against) From the aforementioned analysis, it's evident that challenges outweigh
the potential benefits. Noted economists such as Dr. Raghuram Rajan are
apprehensive about sovereign borrowing from external markets in foreign currency.
Therefore, this idea, though well-intended, requires more deliberation.
 = (In favor) Considering above points, sovereign borrowing from
external markets in foreign currency may not be a bad idea, provided that it's done in
a judicious and prudential manner.
2.8 🧔🗃 ♐️ 🤵 BUDGET → CAPITAL RECEIPTS → DISINVESTMENT: वर्वनिर्वेश
✓ Disinvestment targets last 4 budgets:
Budget 2017 2018 2019 2020
Target (Lakh cr) 1 0.80 1.05 lakh crore 2.10 lcr
Target Achieved? ✅ ✅ ❌* Wait & watch
* Budget-2019: Govt planned to earn ₹1.05 lakh cr from disinvestment but hardy 65,000
cr earned, because investors’ response lukewarm (उदासीन), due to slowdown in economy.
- 2019-July: (Full) Budget-2019, Nirmala S. announced:
- We will again try for strategic disinvestment of Air India & other selected
CPSEs.
- We’ll monetize the unused land assets of CPSEs (e.g. selling / renting). →
Government Land Information System (GLIS) portal launched to keep track of
all such land assets.
- We’ll relax foreign investment limits in the CPSEs.
- 2019-Nov: Government announced plans for strategic disinvestment of five public
sector units (PSUs) namely,
- 1) Bharat Petroleum Corp Ltd (BPCL). Big international oil companies including
Saudi Aramco are keen to buy BPCL, given its strong presence in fuel retail
outlets.
- 2) Shipping Corporation of India.
- 3) Container Corporation of India (Concor)
- Separately, 4) Tehri Hydro Development Corp of India and 5) North Eastern
Electric Power Corporation (Neepco) will be sold to National Thermal Power
Corporation (NTPC, a public sector company).
2.8.1 📔📔ES20 Vol1 Ch9 Privatization and Wealth Creation

CEA Subramanian K. highlighted two things about strategic disinvestment viz.
2.8.1.1 📔📔 Strategic Disinvestment (=privatisation) → ⬆profitability

 In 1980s, UK PM Mrs. Margaret Thatcher started privatization of the Govt companies
(सरकारी कांपननयो का ननजीकरण) such as British Telecom, British Airways, water and
electricity companies etc. → It resulted in⬆ profitability for those companies.
 ES20 analysed 11 Indian Govt companies that were privatized during BJP/NDA PM
Atal Bihari Vajpayee tenure (1998-2004) such as
o Hindustan Zinc, Bharat Aluminum Company Ltd. (BALCO), Maruti Suzuki, Indian
Petrochemicals Corporation Ltd. (IPCL), Modern Food India Ltd. (MFIL) etc.
 After strategic disinvestment (=privatization) these Indian companies’ sales,
profitability etc. greatly ⬆ because of: (बिकी र्व मुनाफे मे अप्रनतम बढोतरी)
o Technology Up-gradation (प्रौद्योर्गकी उन्नयन)
o Efficient management practices by Private professionals. (कुशल प्रबांधन)
✅Thus, privatized PSUs help in economic growth & employment generation.
2.8.1.2 📔📔Strategic Disinvestment (=Privatisation) → Adopt Singapore Model
1974: Singapore Govt set up a holding company “Temasek Holdings Company” (THC). Then
the Government transferred its shares of PSUs to THC → THC sold them in market →
privatization complete.
 Government of India has 264 CPSEs under 38 different Ministries/Departments.

 ES20 suggested, we should also create a Holding Company (ननयांरक कांपनी) just like
Singapore, for our / strategic disinvestment (=privatization) drive.
Benefits? Professionalism and autonomy (पेशेर्वर कुशलता और स्त्र्वायत्ता) to the disinvestment

programme. If an individual ministry tried individual company’s privatization then
1) Ministry's officers may not have experience for it. (अनुभर्व न होना)
2) Internal resistance by employee unions to sell it off. (आांतररक प्रनतरोध)
So, better let a separate holding company look after this process.
2.9 💼🤲🏻 BUDGET → FISCAL DEFICIT (राजकोषीय घाटा)
2.9.1 💼🤲🏻👜🤲🏻 Extra-Budgetary Resources (बजटे तर सांसाधन)

Extra Budgetary Resources (EBR) are loans taken by public sector undertakings and
Government organizations. For example,
- Govt not releasing food subsidy to Food Corporation of India (FCI) & (thereby forcing)
FCI to borrow money from National Small Savings Fund (NSSF) for its food schemes.
- Ministry of Housing and Urban Affairs → (Autonomous body) Building Materials and
Technology Promotion Council → they borrowed ₹ 60,000 crores in next 4 years to
finance the PM Awas Yojana (Urban, more in Pill#5 Infra).
- Here repayment of the entire principal and interest is done from the Central
Government Budget eventually, behind the curtains.
- EBR measures are announced after passing of budget so, they may escape the same
general level of media-reporting, parliament debate or audit = bad for financial
transparency & accountability.
- 15th FC has termed “EBR” as ‘off-budget borrowings through para-statal entities’ and
asked Government to avoid it.
- ES20 noted:
- From Budget 2016 to 2019, govt raised >₹1.45 lakh cr through EBR
- These EBRs are not taken into account while calculating the Fiscal Deficit but
they’re counted while calculating Government debt or public debt:
Table 8: Definition & DATA as per 📔📔ES20 Vol2Ch2
Amt in lakh Crore 2018-19

i) Internal Debt 71
ii) External Debt 5
✓ Borrowed from other nations and multilateral institutions such as IMF,
World Bank, ADB etc.
✓ At present Govt of India doesn’t borrow directly from the
International Capital Market.
A) Public Debt (सार्विजननक ऋण)= (i) + (ii) 71+5=76
Amt in lakh Crore 2018-19
B) (Public Accounts) Other Liabilities such as Post Office Savings, Postal 9
Insurance, Provident Fund etc. small savings schemes (लघु बचत योजना) etc
Total Liability (कुल दे यता) = A+B 76+9=85
2.9.2 💼💉 🧔 Modi’s Fiscal Stimulus (2019-)

2019-Aug: Car sales and GDP growth sharply ⬇, Foreign investors exiting on large scale
from India. So, Finance Minister Nirmala.S announced in 2019-September:
1) Reduced tax burden on companies.
 Indian companies corporation tax slabs ⬇ from 25-30% to 15-22%. Ref:
Corporation Tax section of Handout for more details.
2) Reduced tax harassment
 No startups will be subjected to 'angel tax'.
 All tax notices to be issued from centralised system to 'end harassment of
taxpayers' by individual officials.
 GST refunds would be given to entrepreneurs within 30 days.
 Violation of Corporate Social Responsibility (CSR) will be treated as a civil
offense and not a criminal offense.
 (Full) Budget-2019 had hiked surcharge on the income tax paid by Super-rich.
As a result, Foreign investors were exiting from India, fearing extra tax burden.
So, we’ll ‘undo’ that budget announcement.
3) We’ll fix the PSBs
 Government will infuse ₹ 70,000 crore to public sector banks, order them to
link loan interest rates with repo rate or other external benchmarks so, loans
may become cheaper especially for home, auto sector. This will boost sales,
revive economy
4) We’ll encourage car sales & other consumption
 Vehicle depreciation increased from 15% to 30% (meaning Businessman will get
more tax benefits in Income Tax and Corporation Tax). → businessman
encouraged to buy new vehicles.
 Government departments will buy new petrol/ diesel vehicles.
 GST council ⬇ GST rates on 5 star hotels, outdoor catering, GST compensation
cess on passenger vehicles etc.
Plus many other fragmented reforms to ⬇ taxes, or to ⬆ Government spending on
highway projects etc. are done every now and then. BallbyballNOTIMP.
2.9.3 🙌 FRBM: Trigger Mechanism (to) Escape (Deficit control) Clause

FRBM Act Section 4(2): provides for a trigger mechanism to escape the deficit control
related clauses in the act i.e. Government can overcross the targets in following situations
(चुननन्दा 'हरगर' पररक्स्त्थनतयों मे, घाटे -ननयांरण सांबांधी धाराओां से बच सकते हैं)
1. National Security / Act of War (राष्रीय सुरक्षा / युद्ध)

2. National Calamity (राष्रीय आपदा)
3. If agriculture output and farm incomes collapse (कृवष उत्पादन, आय मे पतन)
4. Fall in real output, GDP growth rate beyond x% (वर्वकास दर में अत्यार्धक र्गरार्वट)
5. Structural reforms in the economy with unanticipated fiscal implications
(अथिव्यर्वस्त्था में सांरचनात्मक सुधारों की राजकोष पे अप्रत्याशशत असर हो.)
During above ‘trigger conditions’ (उतत 'ट्ररगर' पररक्स्िनतयों मे)
 FRBM Act Section 4(2): Govt may overcross/deviate the fiscal deficit target by upto
0.5% of GDP, as recommended by NK Singh’s FRBM review Committee. (घाटे की
मयािदा/लक्षयाांक को लाांघ दे ना).
 Individual State Governments may also do similar (e.g. overcross by 0.5% of GSDP), but
they’ve to amend their state FRBM Act accordingly with this provision.
 Budget-2020: FM cited trigger#5 (structural reforms…..) to escape the FRBM targets
for 2019-20 and 2020-21.
Table 9: यानन की घाटा मे कटौती हमसे ना हो पाएगी'
Fiscal deficit → Original target (मल ू त:) Overcrossed After Trigger Mechanism
2019-20 3.3% 3.8%
2020-21 3% 3.5%
- Primary deficit target 0% (2020-21): shifted to 2022-23.
- Revenue Deficit and ERD also over crossed but anyways FRBM Act has abandoned
targeting them since 2018’s amendment.
- ES19 had suggested Government to reduce deficit through fiscal prudence. BUT
- ES20 (Vol2Ch2) identified following challenges in 2020-21 in reducing deficit:
- India and global growth⬇, trade protectionism⬆, geopolitical situations in
West Asia, Oil price = tax collection will be affected.
- To revive growth in the Indian economy, the Government should relax fiscal
deficit targets → in other words, give fiscal stimulus → economic growth.
(घाटा ननयांरण लक्षयाांक मे ढील दे दो, राजस्त्र्व प्रोत्साहन पेकेज दे दो)
2.9.4 💼🤲🏻🔨 🗂 FRBM Act: 3 Documents (दस्तािेज़)

FRBM Act requires the Union Government to present 3 documents along with the budget:
1. Macroeconomic Framework Statement (व्यापक आर्थिक ढााँचा वर्वर्वरण): to show economic
data - GDP, growth rate, import-exports, and government’s receipts,expenditure etc.
2. Medium Term Fiscal Policy Cum Fiscal Policy Strategy Statement (राजकोषीय िीनि
कायििीनि वर्वर्वरण): To explain how Govt. is controlling the deficits, and whether there is
going to be any deviation from the target.
3. Medium-term Expenditure Framework (मध्यम अर्वर्ि व्यय ढााँचा वर्वर्वरण): self-
explanatory
2.9.5 💼🤲🏻⏬ Fiscal Consolidation (राजकोषीय एकत्रीकरण)
Set of Government actions to reduce deficit.
✓ 2019: PM’s Cabinet Committee on Investment and Growth (CCIG: ननर्वेश और वर्वकास की
कैबबनेट सशमनत) ordered all Union ministries to reduce wasteful expenditure on travel,
food and conferences by 20% (यारा, भोजन और सममेलन की कफजल खची मे कटौती करो).
✓ 2019-March: 15th Finance Commission has created a panel to prescribe fresh fiscal
consolidation road map for centre & states fopr the next 5 years. Chairman? NK Singh
✓ Stay Tuned for the Remaining [Win20CSP] Pillar#2/3/4/5/6’s update packs at

Mrunal.Org/Download
Mrunal’s Win20CSP Economy Update Pillar#2B: Atma Nirbhar Bharat
1 Pillar1: Banking, Finance, Insurance में ATMANI ...................................... 29
1.1 RBI’s Monetary Policies: Corona March-April’20 ............................ 29

1.2 Loans to NBFCs under ATMANI .................................................... 31
1.3 Loans to individuals, MSME and companies in ATMANI ......................... 32
1.4 RBI & States Loans in ATMANI ........................................... 34
1.5 Currency Exchange Rate → Attracting Dollars: VRR and FAR ................. 34
1.6 : BASEL Norms deferred in Corona ................................................ 35
1.7 Pillar1C: SEBI/Corporate Governance in ATMANI .............................. 35
1.8 1D → Insurance & Pension reforms in ATMANI .................................. 36
1.9 1D: Insurance → for health workers fighting Corona ......................... 36
2 Pillar2: Taxation, Disinvestment, Deficit & ATMANI ................................ 38
2.1 Taxation → Atma Nirbhar Bharat Reforms ..................................... 38
2.2 → Strategic Disinvestment of CPSE in ATMANI .......................... 38
2.3 Fiscal Federalism: Helping the States in ATMANI ........................ 38
3 Fiscal Deficit: new developments ..................................................... 39
4 Pill#4: Sectors of economy: ATMANI reforms ......................................... 41
4.1 AGRO Input → Farmers (कृषि)...................................................... 41
4.2 AGRO Output → SALES reform in ATMANI .................................... 41

4.3 Agro Output → Food processing (खाद्य प्रसंस्करण)............................ 43
4.4 AGRO → Dairy and fisheries........................................................ 44

4.5 4B: sectors of Economy → MSME (सूक्ष्म, लघु और मध्यम उध्योग) ....................... 45
5 Pillar5: Infrastructure reforms in ATMANI ......................................... 49

5.1 Mining (खनन) ........................................................................ 49
5.2 Infra → Housing/Real Estate (आवास) ................................................. 51
5.3 PPP/Investment reforms in ATMANI .......................................... 51

6 Pillar6: Human Development in ATMANI .............................................. 53
6.1 HRD → Health (स्वास््य) in ATMANI ................................................ 53
6.2 HRD → Education (शिक्षा) in Atmani ............................................... 54
6.3 Poverty removal (गरीबी उन्मूलन): Food & Shelter ............................. 54
6.4 Poverty Removal → Loans/Skill ................................................... 55
Mrunal’s Economy Win20CSP Updates Pillar#2B: ATMA NIRBHAR → Page 27

6.5 Poverty Removal → Unskilled Jobs ............................................... 56
7 ATMANI: Criticism (आलोचना/ theHindu Job Application Essay) ......................... 57
7.2 20lcr = Statistical Window Dressing (अंको की फर्जी दिखावट) .................... 57
7.3 States Fiscal problems not given sufficient help ........................... 57

7.4 Regional Imbalance (क्षेत्रीय रूप से संतुशलत षवकास नहीं होगा) .................. 58
7.5 Modi merely copying Nehru’s ideas .................................................. 58

7.6 Alternate Suggestions to revive Economy: अन्य सुझाव ............................. 59
7.7 Conclusion: ATMANI (Appreciative Tone) ....................................... 60

7.8 DAY1 Mock question for Mains from ATMANI .................................. 60
Mrunal’s Next ONLINE Economy Batch Starting in 2020-June ................................ 61
🤚 🖨 DON’T PRINTOUT YET, WAIT for final update of this PDF
 Mitron, Do not take print out YET, because this topic is still developing, its dust is
yet to settle and prelim is 4 months away. So, I may have to release an updated
handout of this at later stage.
 Consider this only a temporary revision handout- that deals only with Atma Nirbhar
Bharat, & a few associated topics like economic survey chapters, PM CARES funds etc.
 25 other topics also happening parallel by Indian Government, Foreign Governments
and Supreme Court PIL judgements. But we will look at them later, when the dust
settles. If I add all of them here → clarity over the Atma nirbhar topic will be lost.
 It’s presumed that you’ve finished my entire economy course, and know the terms
already explained there (e.g. PM JanDhan, EPFO, Helicopter Money, Hot Money etc.) IF
NOT, welcome to join my next online batch starting from mid-June 2020
o Coupon Code: Mrunal.org for 10% discount
o Registration Link: https://unacademy.com/course/mrunals-economy-full-
course-for-upsc-prelims-mains-2021-507/QTOO36CS
✍️ 👻Introduction to ATMANI
 (Origin) 2020-March: Government of India initiated nationwide lockdown to prevent

the spread of Corona/COVID-19 pandemic. (कोरोना महामारी के चलते िे िव्यापी तालाबंिी)
 This lockdown affected the income and livelihood of everyone from corporate
companies to common citizens of India. (सबकी आर्जीषवका को हानी हुई)
 Therefore, to revive the economy, Prime Minister of India launched Atma Nirbhar
Bharat stimulus package in 2020-May. (अर्थव्यवस्र्ा को पुनर्जीवन / प्रोस्ताहन का आर्र्थक पेकेर्ज)
 It’s centred on five pillars of – Economy, Infrastructure, System, Demand and Vibrant
Demography (स्फूर्तथली र्जनसांख्ययकी).

Table 1: (DATA) 👻Atma Nirbhar Bharat consists of
DATE Components of Atma Nirbhar Bharat Amt in lakh cr

2020-Mar to May 1) RBI’s monetary policies → ₹8 lakh cr
2020-Mar 2) PM GARIB KALYAN (PMGKY): Covid Relief Package → ₹1.70-1.90
3) FM Nirmala.S made new announcements made like
2020-May Credit guarantee for MSME, ⏬TDS rates, PM Matsya ₹11
Samda Yojana, Agri infra fund etc.
ATMANI = 1+2+3=Total मार पीट के जोड़ी गयी रकम → 10% of GDP = ₹20 lcr approx
1 👻🐯PILLAR1: BANKING, FINANCE, INSURANCE में ATMANI
While we’ve studied/covered some of the following reforms in earlier

handouts/lectures but for the sake of comprehensive revision note on
👻ATMANI, it’s necessary to repeat/re-paste it here.
Area ATMANI’s main thrust areas/ reform focus

Banking, - Increasing loanable funds / making loans cheaper by ⏬CRR,
Finance, loans, repo, Suspending loan repayment and IBC proceedings
NPA - Special windows to help NBFCs, HFCs, Mutual Funds
- More loans to MSME through credit guarantee
- More loans to Govt through Ways and means advances
- Refinancing AIFI (SIDBI,NABARD,EXIM,NHB)
- deferring BASEL norms
SEBI/ corporate - Companies Act relaxed to promote ease of doing Biz
governance
Insurance - ₹50 lakh health insurance for health workers
Pension - EPFO: Government to contribute some ₹₹ into workers’ account
Fin.Inclusion - ESIC coverage expanded
- Social security for gig-workers (like Zomato delivery boys)
- Women PM-Jan Dhan holder be given ₹500
- Poor elderly, widows and disabled to be given ₹1,000
^many other small /technical reforms as well, but if asked Mains to

write in 150-250 words, you need to highlight only the main features.
Now, let’s look at them one by one for prelims:
1.1 🐯🤧📢RBI’S MONETARY POLICIES: CORONA MARCH-APRIL’20

2020-  RBI Monetary Policy Committee (MPC) meetings are held at the interval
March, of 2 months. So after the previous release in February 2020 → next
last week release was scheduled in 2020-April
 But, due to Corona outbreak, RBI held the meeting sooner in the last
week of March-2020, instead of April.
2020-  As we learned, MPC Committee only has one task- decide repo rate. All
April, 17th other measures like CRR cut, EMI moratorium, BASEL-III implementation
etc depend solely on RBI Governor’s discretion. These measures don’t
require MPC Voting or approval.

 So, in 2020-April, RBI governor (को सपना आ र्जाता है और वो) holds press
conference announcing some additional measures to revive economy
against Corona.
2020-May  As per bi-monthly (2-2- months) pattern, this meeting was planned in
2020-June but was advanced to May due to Corona
The gist of above March-April-May announcements are as following (and they’re
considered to be part of ATMANI):
1.1.1 🐯🤧: Cash Reserve Ratio ⏬ to ⏫ loanable funds

 100 bps cut (meaning 1%) cut in CRR so 4%-1%=3% CRR for a period of 1 year (upto
2021-March).
 This will ⏫ the loanable funds available with the banks by about ₹1.37 lakh crores.
 Further, Banks are required to calculate CRR on a fortnightly (15 days) basis. They
have to maintain at least 90% of that amount in CRR on daily basis. RBI also ⏬
minimum daily CRR balance maintenance from 90% to 80% upto 2020-June. But this
part of information is not really important for the scope of civil service exam. So,
don’t lose sleep if some idiotic private Mocktest quiz master framing MCQs like this.
1.1.2 🐯🤧:Repo Rate ⏬ to cheapen the loans & revive economy

 REPO Rate ⏬ from 5.15 to 4%
 Stance: Accommodative. Means in the next meeting they will either ⏬ repo or keep it
unchanged. But no chance of ⏫the repo rate in next meeting.
 Benefit? RBI expects that inflation will be under control because
o monsoon will be normal so food prices (& resultant inflation) will be under
control.
o Corona-led Economic slowdown → demand⏬ → inflation should⏬.
o Crude oil prices also under control due to Corona slowdown.
o Therefore, large reduction in repo rate is justified to boost economic growth,
because inflation is going to be remain under control.
1.1.3 🐯🤧Reverse Repo Rate cut & Policy corridor Changed asymmetrically
MSF REPO Reverse Repo Total width
What? Banks borrow short All clients borrow short Clients park
term funds from RBI term funds by pledging surplus funds
by pledging G-Sec G-Sec. But, banks can’t in RBI to earn
from SLR-quota pledge SLR quota G-Sec interest
Before R+25 bps R% R-25 bps 25+25=50bps
After R+25 bps R% R-65bps* 25+65=90bps
2020- 4.25% 4.00% (40bps cut) 3.35% 25+65=90bps
May
 *Corona led economic slowdown → Loan demand ⏬ → banks parking their excess
funds in RBI to earn interest in the form of reverse repo rate.
 2020-March: banks parked ~3 lakh crores in RBI in Reverse Repo.
 So, RBI has drastically ⏬the reverse repo rate to discourage such laziness of banks.
 Benefit of reverse repo reduction?
✓ IF SBI offers 5.9% Fixed deposit interest rate to depositors, and parks it in the
RBI reverse repo rate (3.35%) then SBI will actually make losses.

✓ So, RBI hopes SBI will now be ‘forced’ to give loans in a proactive manner
(through SMS-spam, email-spam and unwanted telemarketing calls)
1.2 👻🔪 LOANS TO NBFCS UNDER ATMANI

 During March2May monetary policies: RBI created new windows / increased loaning
facilities towards Bank/NBFC.
 Atmanirbharat: Government agreed to provide credit guarantee cover to some of these
facilities. Overall picture is following:
1.2.1 🐯🔪🏦🙊:Targeted Long Term Repo Operations (TLTRO: लक्षित दीर्घकाललक रे पो)
 Tenure? upto 3 years
 Interest Rate? FLOATING RATE linked with REPO Rate. Its exact formula? NOTIMP
 Total quantity? round 1.0= ₹1 lakh crore, round 2.0=₹50,000 crore but figures NOTIMP.
 If a bank borrows ₹₹ from this window → then
o within “X” number of days,
o bank must invest Y% of this borrowed money
o in Debt market instruments/ debt securities (such as corporate bonds/non-
convertible debentures, commercial papers etc.) issued by “Z” borrower.
o “Z” could be a Corporates, Mutual Funds, Non-Banking Financial Companies
(NBFCs) and housing finance companies (HFCs).
 Benefit?
o Debt securities are primary source of funding for NBFCs and HFCs. This measure
will help them obtain funds to revive business.
o Similarly, Mutual Funds and Corporates who need funds, will benefit.
 Other motives behind the TLTRO involve “flight of foreign investors & its impact on
bond yield” etc. but that long-winded-cause-effect-PHD has poor-cost benefit for
MCQs. So, we’ll not waste time.
1.2.2 🐯🔪🏦🙊 RBI’s special or flexible liquidity window to help MF

Franklin Templeton Mutual Fund (MF) decided to stop / windup some MF schemes in India,
because they can’t generate good returns during the Corona crisis. (esp. in the schemes
where clients ₹₹ were invested in low-grade bonds.)
 So, Fund manager will liquidate (=sell off) the securities → return money to investors.
 Investors panicked because
o Fund manager did not give clear timelines about money refund.
o even if Fund manager tries to sell off its held bonds, it is difficult to find buyers
at the right price so MF-investors may lose money.
o Alleged financial scam angle.
 RBI reform? Special or flexible liquidity window to help Mutual Funds
o From this window, banks borrow from RBI → Bank uses it to either
▪ give loans to Mutual Fund or
▪ Use the ₹₹ to buy debt-securities from Mutual Fund
What is the total amount of funds in this special window? Do banks need to pledge G-Sec to
borrow? How much interest is charged? What’s the tenure? Ans. Low profile technical reform to a
crisis affecting a small segment of financial market. So such PHD = poor cost benefit for exam.
1.2.3 🐯🔪🏦🙊 Special Liquidity Scheme for NBFC/HFC (खास तरलता योजना)
 FinMin → Dept of FinServices will form a Special purpose Vehicle (SPV) company.

 This company will provide Credit Guarantee (ऋण अिायगी गारं टी) to debt securities
issued by Housing Finance Companies (HFC) and Non-Banking Financial Companies
(NBFCs: गैर बैंककं ग षवत्तीय कंपर्नयां).
 Thus, debt securities’ credit rating will ⏫ = investors will find it safe to park money
without demanding high interest.
 If HFC/NBFC is unable to repay the Principal or interest on its debt securities → SPV
will pay it to the investor. [Total cover is ₹30,000 crores.]
 Benefits?
o Mutual Fund companies will feel safe parking clients money in NBFC/HFC =
economic revival.
o HFC/NBFC may lend such borrowed funds to Microfinance institutions (MFI)=
help poor borrowers.
1.2.4 🧔🔪🏦🙊 Partial Credit Guarantee Scheme (PCGS) 2.0

 Budget 2019: If NBFCs/ MFCs/Micro Finance Institutions (MFIs) borrowed money by
issuing debt securities (Bonds or Commercial Papers) → Public sector banks (PSB)
invested in it → but borrower default then the government paid 10% of loss to PSB.
 Corona= total 20% loss cover guaranteed to PSB. (सावथर्जर्नक बैंकों को आंशिक क्रेडिट गारं टी)
1.2.5 🐯🔪🏦🙊 Special Refinance Facility for AIFI (All India Financial Institutions)
RBI gave additional refinancing to AIFI (अर्िक पुनषवथत्त िें गे)
1. National Bank for Agriculture and Rural Development (NABARD) → more loans
towards Cooperative Banks, RRBs
2. Small Industries Development Bank of India (SIDBI) → towards small industries
3. National Housing Bank (NHB) → housing finance companies
4. Export-Import Bank of India (EXIM) → towards exporters, importers
1.3 👻🔪LOANS TO INDIVIDUALS, MSME AND COMPANIES IN ATMANI
1.3.1 🐯🤧🔪✋ Loan/EMI/NPA relief / Moratorium (ऋण अदायगी पर रोक)

 IF a loan is outstanding as of 1/MAR/2020. THEN
 2020-March: RBI allowed moratorium/suspension for March, April, May
 2020-May: extended for another 3 months: June,July,Aug.
 This applies to: All commercial banks (including regional rural banks, small finance
banks and local area banks), co-operative banks, All-India Financial Institutions, and
loan giving NBFCs (such as housing finance companies and micro-finance institutions)
2020 How loan moratorium/suspension works

March Suppose there is due date for monthly loan instalment but borrower opts for
moratorium so he need not pay principal/interest.
April Same as above
May Same as above
June Same as above
July Same as above
Aug Same as above
Sept Due date for monthly loan instalment AND borrower needs to Pay.
Oct Due date for monthly loan instalment AND borrower needs to Pay.

Nov Due date for monthly loan instalment AND borrower needs to Pay.
Dec  IF borrower stopped paying loan instalments since Sept’s due date, then by
this time it’ll have crossed 90 days from due date.
 And we know that Non-Performing Asset (NPA: अनर्जथक परीसंपर्त)= if principal
or interest unpaid for more than 90 days from due date.
 So, this account will be classified as Non-Performing Asset (NPA).
 However, if we look from March to Nov= total 9 months or 270 days no loan
is classified as NPA.
1.3.2 🐯🤧🔪✋Loan Moratorium: how it benefits borrower

 If his income ⏬ due to Corona, he gets relief from Equated Monthly Instalments (EMIs)
for 3 months. (It’s not compulsory to skip EMI. Borrower can repay loan regularly, if his
financial situation is sound.)
 If a borrower opts for moratorium, it’ll not be considered into his credit score / rating
prepared by the credit information companies (CICs)
 Challenge / controversy?
✓ If he doesn’t pay for 3 months, then Banks will continue to charge interest (on
those 3 months) and add it to the total outstanding loan → compound interest
rate system → his total burden may⏫
✓ SC PIL: interest should be waived. But RBI opposed, because if borrowers don’t
pay interest, then how can banks give interest to depositors for their deposits.
Banking system will become unsustainable!
1.3.3 🐯🤧🔪✋ Loan Moratorium: how it benefits lender?

 Unpaid loan doesn’t accumulate under the ‘NPA’ category for a bank. Otherwise, their
responsibilities may increase unnecessarily in
✓ RBI Prompt Corrective Action (PCA) Framework
✓ BASEL-III Capital norms
1.3.4 🐯🤧🤑✋🏼 RBI orders bank to pause/halt the Dividend Distribution

 scheduled commercial banks and cooperative banks shall not make any further
dividend payouts from profits made during FY 2019-20 until further instructions.
 This will help the banks to conserve funds and absorb losses in an environment of
heightened uncertainty in CORONA.
1.3.5 🔪🤝Loans → Insolvency & Bankruptcy code proceedings suspended

 ATMANI: Government orders no fresh case will be registered in IBC code for upto
next one year. (=suspended, नए केसों की कारथवाई को स्र्र्गत ककया गया.)
 Before: Insolvency bankruptcy code proceeding could be initiated for business loans
default of minimum ₹1 lakh/>.
 After: Minimum ₹1 crore/>. So even after suspension is lifted, most of the MSME will
be spared from IBC proceedings.
1.3.6 🔪🙆‍♀‍Loans → MSME: new definition, ECLGS, subordinate debt, Equity infusion
 Refer to ATMANI → Pillar4B part of this handout.

1.4 🐯🔪👨‍🦲👨RBI & STATES LOANS IN 👻ATMANI
RBI relaxed the WMA and Consolidated Sinking Fund norms to help in govt’s borrowing
1.4.1 🐯🔪👨‍🦲👨 Ways and Means advances (WMA)

 When Govt faces short term mismatch in receipt (income) and payment (Expenditure)
 RBI Lends money on short term (3 months). Not counted in fiscal deficit figure.
 Corona-crisis: ⬆mismatch in cashflow because
o ⬇Govt Income: Sales ⬇ GST, Govt gave extension in tax payment deadlines
o ⏫Expenses: free LPG, food, mask etc.
 So, RBI ⏫WMA limits by 60% than before to help the Union (1.20lcr) and State
Governments (₹51,560cr collectively).
 If upto above amount of ₹₹ borrowed = its WMA: loan interest = repo%
 If beyond above amount borrowed then ‘Overdraft’: loan interest repo+2%
^ above % or quantity not imp for scope of exam
1.4.2 🐯🔪👨‍🦲👨 Consolidated Sinking Fund (CSF)

 Started in 1999. It has >₹1.25 lakh crore by 2019. (समेककत घाटा र्नपटान र्नर्ि)
 Annually, State Government has to contribute money equal to 1-3% of its outstanding
market loans to this fund, kept with RBI.
 CSF is a fund outside consolidated fund of the State and public account of the State.
 CSF meant to be used for only 1 purpose= repayment/redemption of loans taken by the
State Government. (बकाया ऋण चुकाने के शलए ही इस र्नर्ि का उपयोग होगा)
 2020-May: RBI relaxed technical norms related to withdrawal of ₹₹ from CSF till
31/3/2021 to help the State Governments. (तकनीकी र्नयमो मे कुछ छूट िी गयी)
1.5 💸💰CURRENCY EXCHANGE RATE → ATTRACTING DOLLARS: VRR AND FAR

To prevent weakening of ₹, we’ve to attract more $ (and other foreign currencies) in
India. So, RBI taken following notable measures:
Voluntary  Launched in 2019: If an FPI buys Indian Union/State

Retention Route Governments’ G-Sec and Indian Corporates’ Bonds through this
(VRR: स्वैच्छिक route → FPI will be given more freedom in certain technical
regulations of RBI & SEBI.
अवधारण मागघ)
 But, with condition= FPI must remain invested in India for
minimum 3 years. (HotMoney वाला गेम खेल के भाग नही सकते)
 RBI decides quantitative limits to how much money can FPI
invest through this route.
Fully Accessible  Budget-2020 had announced allowing non-resident investors
Route (FAR: to invest in G-Sec, without any restrictions.
सम्पूणत
घ : सुगम्य  2020-March: RBI announced this window, non-resident individual
investors (who’re not FPI) can buy G-Sec.
मागघ)
 No limits on amount of investment.
Benefit? Investors will convert $ & other foreign currency into ₹ currency to buy G-Sec=
more $$ coming towards India = helps keeping BoP and currency exchange rate stable
during crisis.

Side note: RBI frequently ⏫ / ⏬ in FPI investment quota/limits in G-sec, depending on
how RBI wants to shape bond-yield, flow of dollars & available quota of G-sec for local
investors to play its repo & OMO games. But that ball by ball chase is NOTIMP.
1.6 🐯🤧: BASEL NORMS DEFERRED IN CORONA

1.6.1 🐯🤧🗓 BASEL Norms: RBI deferred some norms
 Liquidity Coverage Ratio, Capital Conservation Buffer (CCB), Net Stable Funding Ratio
(NSFR) etc norms deferred/postponed.
 We need not loose sleep over new deadlines, as they may again get extended. So,
dynamic information = dangers of answerkey becoming invalid, so, smart examiners
usually avoid it.
1.6.2 🌐🤧🗓 BASEL Norms: Switzerland’s body deferred some norms
 Some of the BASEL norms were to be effective from 1/1/2022 such as IRB approach for
credit risk, operational risk framework, CVA framework, market risk framework, Pillar
3 disclosure requirements. (what these words mean= NOTIMP)
 Basel Committee's oversight body (group of Central Bank Governors in BIS) have
deferred them to 1/1/2023.
1.7 🗃 PILLAR1C: SEBI/CORPORATE GOVERNANCE IN 👻ATMANI

Even before Atma Nirbhar, SEBI deferred many of its technical guidelines on listed
companies. But, poor cost benefits chasing it for MCQ.
1.7.1 👻ATMANI reforms in Share market

 Before: direct listing by the Indian companies on foreign stock exchanges was not
permitted. Likewise, foreign companies are also not allowed to directly list their
equity shares on the Indian stock exchanges.
o So companies had to use ADR/GDR/BharatDR type mechanisms,
o But, relatively difficult to attract investors in through ADR/GDR routes,
nowadays.
 After ATMANI: Indian public companies allowed to directly list their shares in
foreign nations stock exchanges. → Foreign capital/dollars can be attracted towards
India → capital formation ⏫ → economic revival.
1.7.2 👻👨‍💼🗃⚖️ Corporate Governance → Companies Act relaxed

 Companies Act requires the companies to hold Meeting of the board of directors, and
meeting of the shareholders every “x” number of days etc. This norm is relaxed due to
corona lockdown. Guidelines also provided for e-voting and video conferencing.
 Companies (Amendment) Bill, 2020 → Many offences under Companies Act have been
decriminalised
o i.e. villains can settle by paying fines, & he’ll not face arrest/jail.
o E.g. if Corporate social responsibility reports not submitted to Government on
time, delay in holding Annual General Meeting of the shareholders etc.
 We’ll reduce Fines/penalties for Small Companies, One person Companies, Start Ups
and Producer Companies*.
 *A Producer Company (PC) is a registered company by a group of farmers/
agriculturists. We had learned about them in pillar4: Farmer Producer Company (FPC)

1.8 ⚰️1D → INSURANCE & PENSION REFORMS IN 👻ATMANI
ATMANI’s main focus here: ₹50 lakh health insurance for Corona health-warriors, ESIC coverage
expanded, EPFO= Government to contribute money, social security for gig-workers (like Zomato Delivery
boys), Women PM Jan Dhan Account=₹500 deposit, poor elderly, widows, PH=₹1000.
1.9 🤧⚰️ 1D: INSURANCE → FOR HEALTH WORKERS FIGHTING CORONA

 ATMANI → PM Garib Kalyan → this scheme
 ₹50 lakh accident insurance scheme cover for health workers involved in managing the
Coronavirus such as doctors, nurses, paramedical staff, ASHA workers etc.
o If corona illness death / corona duty related accidental death (like mob
lynching & stone pelting) = family gets ₹50 lakhs.
o If corona led illness but recovered AND NOT DIED = no ₹₹ given to anyone. (bcoz
presumed that health worker will get free treatment in Government hospital)
 Age limit? None.
 Company? New India Assurance, a public sector general insurance company.
 Who pays premium? Ministry of Health and Family welfare
 Duration? Period of 90 days, starting from March 30, 2020.
1.9.1 🤧⚰️Insurance → ESIC Health Insurance

 ESIC act = basically workers’ medical insurance and unemployment allowance.
 BEFORE: ESIC Act compulsory enrolment of (lower middleclass) workers in any
establishment with 10/> employees.
 AFTER ATMANI: Even if an establishment has <10 employees, they’ll be covered in
ESIC. This will become
o compulsory for hazardous industries
o voluntary for Non hazardous industries
1.9.2 👨‍🦱 →👴💸 Pension/Insurance → EPFO

 EPFO applies to any establishment with 20/> workers. Among them, workers earning
less than ₹15k per month salary = x% of their salary + y% from boss’s pocket goes into
EPFO = this we’ve learned in Pillar4D. ATMANI makes following reforms in it
EPFO → worker Boss ATMANI Reform

Small firm 12% 12%  Total 24% goes to EPFO
(up to 100  PM Garib Kalyan: Government to deposit this 24%
workers) deposit from its own pocket, for 3 months viz. March,
April, May 2020.
 ATMANI = we’ll extend it for another 3 months =
June July August 2020.

EPFO → worker Boss ATMANI Reform
Large firm 12% 12%  Govt will not deposit ₹₹ from its own pocket for
(more than 10% 10% large firm (e.g. Reliance or Tata who’ve more than
100 100 workers.)
workers)  So for them, workers and boss have to deposit ₹₹ from
their own pocket into EPFO.
 But, government has ⏬ their percentage from
12+12=24% to 10+10=20% (so that worker and boss will
be left with more money to spend in their hands=
demand⏫= economic revival)
1.9.3 EPF Withdrawal norms relaxed (खाते से रुपए ननकालने के ननयमो मे िूट)
 Further, EPFO’s Employee provident fund (EPF) = worker (and his employer*)
contributes money for his retirement.
 Worker may withdraw part of the money before retirement age, subject to certain
conditions like medical emergency, home buying, marriage of children etc.
 So, 2020-March: PM Garib Kalyan Package→ labour ministry allowed EPFO subscribers’
to withdraw upto “X%” of EPF fund to help the workers during lockdown.
1.9.4 👷‍♂‍Workers Minimum Wages & Social security in 👻ATMANI

 The right to minimum wages will be applied to both organised and unorganised sector
workers. (Earlier unorganised sector workers were not covered. असंगदित क्षेत्र मे भी
न्यूनतम वेतन का हक दिया र्जाएगा)
 Appointment letter & annual health check-up for all employees. (र्नयुख्तत पत्र, स्वास््य
र्जांच) → formalization economy
 Social security schemes will be extended to Gig workers and platform workers (गीग
प्रणाली के श्रशमक e.g. Zomato delivery boys, Urbanclap beautician, uber taxi drivers etc.)
 Women workers can be employed for all night work, IF safety arrangements made.
 👻ATMANI→ PM GaribKalyan → Central Government’s Building and Other Construction
Workers Act, 1996: → workers contribute ₹₹ to a fund held by the State Government.
State Governments ordered to use this money for helping them during COVID-19
 Portability (सुवाह्यता) of social security benefits to migrant workers. E.g. If a
construction worker deposits a premium in Gujarat building workers welfare fund →
Afterwards he returns back to home state Odisha, he will get pension from there.
Sidenote: Lot of controversy because government has relaxed/suspended the labour laws during
Corona, but we will study it separately under pillar 4. This Handout’s objectives only 👻ATMANI
1.9.5 🧓👴 Social Security for Poor women, elderly, PH
 👻ATMANI→ PM GaribKalyan → ₹500 per month to 20 crore women Jan Dhan accounts
for three months.
 ₹1,000 to poor senior citizen, poor widows & poor disabled (total 3cr person covered)

2 🍋 PILLAR2: TAXATION, DISINVESTMENT, DEFICIT & 👻ATMANI
2.1 🍋 TAXATION → 👻ATMA NIRBHAR BHARAT REFORMS

 Tax Ordinance 2020: Income tax, TDS, TCS and GST filing date extended to June
3030, Vivad se Vishwas Scheme & Sabka Vishwas LDS extended
 Income tax refunds will be released in a faster manner.
 Tax Deducted @Source (TDS) relaxation →
o Whenever salary, contract, professional fees, interest, rent, dividend,
commission, brokerage, etc. are paid, the payment giver is required to cut a
certain % of the amount as TDS and deposit to the Income Tax Department. It
helps in tracking tax evasion & tax avoidance. We had learned in original
lecture series on budget.
o These TDS rate% vary as per nature of payment. (It could be 0.5% on some
payment, it could be 10% on some payment etc.)
o FinMin has ⏬ TDS% by 25% compared to their original rates so as to unlock
₹50,000 cr in the hands of people. = ⏫shopping → economic revival.
2.2 🧔🗃 → 👨‍💼 STRATEGIC DISINVESTMENT OF CPSE IN 👻ATMANI

 Govt will notify a list of strategic sectors (महत्वपूणथ / रणनीर्तक क्षेत्र).
In Strategic sectors In Non-Strategic sectors

 We’ll allow private players + We’ll keep  All CPSE will be privatized (=Strategic
running at least one CPSE (Central Public disinvestment) गैर-महत्वपूणथ क्षेत्रो की
Sector Enterprise: केंद्रीय सावथर्जर्नक क्षेत्र के सरकारी कंपर्नयो का र्नर्जीकरन कर िें गे।
उपक्रम).
 If >1 CPSE already running for a given
strategic sector then we will privatize /
merge them into a single CPSE.
2.3 🧔🕉👨‍🦲FISCAL FEDERALISM: HELPING THE STATES IN 👻ATMANI

2.3.1 🧔🕉👨‍🦲Helping States → Tax devolution and grants
 Corona = Union’s tax income ⏬⏬ but still Union has given the Tax Devolution and
grants (कर अंतरण व अनुिान) to the states, as per the figures announced in the Budget
and Finance Commission report.
2.3.2 🧔🕉👨‍🦲Helping States → States’ Fiscal deficit limits ⏫

 Constitution Article 239: States require union govt permission before borrowing money.
 Before: Union had kept states net borrowing ceiling @3% of Gross State Domestic
Product (GSDP)
 After ATMANI: 3% limit → raised to 5% for 2020-21. राज्य सरकार की रार्जकोिीय घाटे की
मयाथिा को बढ़ाया गया।
 But this relaxation will be linked to State Govt doing reforms in the areas of:
o One Nation One Ration card scheme

o Ease of Doing Business (व्यापार मे सुगमता)
o Power distribution (बबर्जली षवतरणमे सुिार)
o Urban Local Bodies (िहरी स्र्ानीय इकाइयोमे सुिार)
3 💼🤲🏻 FISCAL DEFICIT: NEW DEVELOPMENTS

Mitron, Following section is not part of 👻ATMANI. In last handout, we
saw FRBM trigger mechanism etc. This is just to update some data:
 World Bank and BRICS New Development Bank (NDB) has given 1-1 billion dollar loan to
India to fight Corona.
3.1.1 💼🤲🏻 Fiscal Deficit for 2019-20

FinMin → Controller General of Accounts (CGA) has updated the data:
Fiscal deficit 2019-20

Originally planned in Budget 2019 3.3%
data Updated in 2020-Feb 3.8% of GDP
Ultimate reality 4.6% of GDP.
3.1.2 💼🤲🏻 Fiscal Deficit for 2020-21

Fiscal Deficit 2020-21
Originally planned in Budget 2020 7.8 lakh cr
Data Updated in 2020-May 12 lakh cr.*
 *In other words, Union to borrow more amount of money.
 SBI research paper says that fiscal deficit is likely to be 7.9% for 2020-21 (But that
depends on how much our GDP falls for current financial year 2020-21)
3.1.3 💼🤲🏻 Fiscal Deficit ⏫= India sovereign rating ⭐️⭐️⏬

Table 2: classification not important, sufficient to know AAA=best.
Rating → Moody's sovereign rating ()

Prime Aaa (e.g. US Treasury Bonds)
High grade Aa1 to 3
investment grade: A1
Upper medium
investment grade: Baa1 to Baa3. 2020-June: India rating reduced to Baa3.
Lower medium because of weak fiscal position, rising fiscal deficit
Non investment grade BA1 to lower ranks like “C”.
(junk / रद्दी)
So, now if India’s sovereign rating⏬ any step further= junk status= Implications?
 Government will have to offer more interest to investors to lure them into buying g-sec
 Flight of Foreign Capital from India (भारत से षविे िी पूंर्जी का उड्ियन/र्नगथम):
o Foreign investors may fear Indian govt will default in payment of previous G-Sec
o So they’ll dump it to other investors and run away from India.
o =Flight of capital from India = $ strengthen, rupee weakens. (Why? Ref: pillar3)

3.1.4 🤧🤲Donation Funds: PMNRF vs PM CARES (दान)
PMNRF by Nehru 1948 PM CARES Fund by Modi 2020
 PM National Relief Fund (PMNRF)  Prime Minister’s Citizen Assistance
and Relief in Emergency Situations
Fund
 Originally for helping Pak-refugees.  For dealing with any kind of
Nowadays for floods, cyclones, emergency or distress situation,
earthquakes, accidents, heart/kidney e.g. COVID-19 pandemic
transplant, cancer, acid attack, riots etc.
 Not setup by Parliament.  same
 No support given from the budget.
 Only runs from donations of ordinary people
and institutions & foreigners donations.
 Donors get Income tax exemption.  same
 If company donates money = counted under
Corporate Social Responsibility (CSR).
 PMO operates  same.
 PM is the ex-officio chairman. He’s assisted  Prime Minister is the ex-officio
by officers. Chairman.
 Ex-officio Trustees: Ministers of
Defence, Home Affairs, Finance
 3 Nominated Trustees: health,
science, social work, law etc. PM
will select them.
Sidenotes:
 1962: a separate ‘National Defence Fund (राष्ट्रीय रक्षा कोि/ र्नर्ि)’ under PM to help
military & paramilitary forces’ families. Other features mostly similar to above funds.
 Usually, such Government donation funds are registered under Indian Trust Act, 1882.
But, some legal experts / critics suggest these donations should be brought under
Public Account / Consolidated Fund to bring accountability & transparency.
 Controversy? PM CARES Fund officials refused to give information to a person under
Right to information Act (RTI), so now courtcase about applicability of RTI on this.
3.1.5 🔪🗃♾ (Suggestion) Consol Bonds to mobilize funds for Corona revival
 US Government (1870s) and British Government (1917) had issued Consol bond.
 Consol is short form for ‘consolidated annuities’.
 Consol bonds have no maturity date. They are perpetual bonds that paid 4-5% interest
rate (interest rate also known as ‘coupon rate), for an infinite time period.
 However, in reality, the Government may redeem(/buyback) the bonds after certain
years, by paying principal to the investor. (Recall AT1 Bonds in YesBank scam)

4 👻👨‍🌾PILL#4: SECTORS OF ECONOMY: ATMANI REFORMS
Sectors of Economy ATMANI’s main thrust areas/ reform focus
Primary - Agro: loans, legal reforms for APMC, food processing sector
- Dairies: interest subvention
- Fisheries: PM Matysa Sampada scheme
- Mining sector reforms: ref pillar5 segment of this handout
Secondary - Electricity DISCOMs given funding
Tertiary - MSME definition changed, given protectionism in govt tenders
- Ease of getting Loans and credit guarantee
- Ease of doing biz for Corporates which we learned in 1C
4.1 👨‍🌾🔪 AGRO INPUT → FARMERS (कृषि)

 ATMANI→ PM GaribKalyan → ₹2000 PM-KISAN instalment to be paid ahead of time
(also known as ‘frontloading’, अग्रभार/तय समय से पहे ले िे िे ना)
 Suspension/Moratorium on the farm loans for 3 months. I.e. no compulsion to repay till
June, July, August 2020. (कृषि ऋण-अिायगी स्र्र्गत की गई)
 Cheap loans via Kisan Credit Card will be given to PM KISAN beneficiaries, Fishermen
and Animal Husbandry farmers. (ररयायती ब्यार्ज िर पे कृषि-ऋण िें गे)
 NABARD to give additional refinance to Regional Rural Banks and Cooperative banks
and. (क्षेत्रीय ग्रामीण बैंक और सहकारी बैंकों को पहले से अर्िक पुनरषवत्त दिया र्जाएगा)
 ₹₹ for NABARD’s Rural infrastructure development fund → ⏫loans to states →
⏫rural infrastructure projects = job opportunities for poor people (ग्रामीण अवसंरचना
र्नर्ि के द्वारा रोर्जगार सूर्जन)
4.2 👨‍🌾🛒AGRO OUTPUT → SALES REFORM IN 👻ATMANI
 Minimum Support Prices (MSP: न्यूनतम समर्थन मूल्य) to be ⏫.

 Separately, ATMANI announced reforms APMC, contract farming and essential
commodities act. To implement these reforms, three ordinances (अध्यािे ि) signed by
the President of India in 2020-June viz:
4.2.1 👨‍🌾⚖️Ordinance#1: on Farmers’ Produce: Trade and Commerce

 कृषि उत्पािन व्यापार और वाणणज्य अध्यािे ि
 Aims to fix shortcomings of State APMC Acts, (which we learned in Pillar4A handout)

 Farmers can sell produce through competitive alternative trading channels (प्रर्तस्पिी
वैकख्ल्पक बबक्री माध्यम)-
 (i) Within the state
 (ii) Outside the state
 (iii) via electronic markets
4.2.2 👨‍🌾⚖️ Ordinance#2: on Farmers Agreement on Price Assurance & Farm Services
 मूल्य आश्वासन और कृषि सेवा अध्यािे ि
 Nationwide uniform Framework for corporate farming (कॉपोरे ट खेती के र्नयमो का ढांचा पूरे
भारत मे एक-समान होगा)
 Will help farmers to engage with food processing firms, wholesalers, large retailers and
exporters. (ककसान को खाद्य प्रसंस्करण कंपर्नयां, र्ोक व्यापारी, र्नयाथतक से र्जुड्ने मे मिि)
 Farmer can sign such Corporate farming agreements for minimum one crop season and
maximum to five years.
4.2.3 👨‍🌾⚖️Ordinance#3: on Essential Commodities Act (आवश्यक वस्तु अधधननयम)

 Agricultural commodities like Cereals, Pulses, Oilseeds, Oils, Onions And Potatoes kept
out of the essential commodities list. (सूची से हटाया र्जाएगा)
 Stocklimits can be imposed only under “very exceptional circumstances” like natural
calamities and famines. (भंिारण सीमा को शसफथ प्राकृर्तक आपिा/अकाल र्जेसी ख्स्र्र्तयों मे ही)
 Stock limit can be imposed if, retail prices ⏫ by:
o 100% for horticulture food such as tomatoes
o 50% by non-perishable food such as sugar
 No stock limit on food processing companies and exporters.
 Benefit? More investment in the agriculture infrastructure.
Above 3 are ‘ordinances’. UPSC prefers asking from ‘passed Acts’. So,
we’ll come back to this in more detail, when Acts are passed happens.
अभी से salient feature मे ज्यािा leftright करने की र्जरूरत नही।
4.2.4 📔📔ES20: Essential commodities Act was harming India

 Essential Commodities Act 1955 (ECA: आवश्यक वस्तु अर्िर्नयम) aims to control the
production, supply and distribution of certain goods considered as essential
commodities e.g. foodgrain, pulses, edible oil, sugar, jute, fertilizers & seed, cattle-
fodder, medicines, petrol, diesel, kerosene, etc.
 Ministry of Consumer Affairs itself does not lay out Rules and Regulations but allows
the State Govts to issue Control Orders related to dealer licensing, stock limits,
restrict movement of goods and compulsory purchases during emergency.
 Economic Survey 2020, vol1ch4 conducted case study of Onion inflation & found
o 76,000+ raids conducted, yet less than 3000 traders penalized. It hints that
raids are misused for bribery, harassment.(छापेमारी का िर दिखाके ररश्वत मांगना)
o Assuming every raid needs a minimum of 5 govt officials, this is a waste of
manpower as well. (सरकारी महकमे के समय और ऊर्जाथ की बबाथिी)

o But, these raids and stock limits had no impact on⏬ onion inflation (2019) or
pulses (2006) or Sugar (2009). (अप्रत्याशित रूप से स्टॉक शलशमट को लागू ककया गया ककं तु
खाद्य महं गाई को कम नहीं कर पाए)
 Under ECA, State Governments randomly impose stock limits on all wholesalers,
distributors, and retailers.
 But, fear of ECA (raids & stocklimit) discourages traders/ private sector companies
from investing into agricultural warehousing and marketing, because they never know
when govt will arbitrarily change the stocklimit norms. (कंपनीया गोिाउन, भंिार अवसंरचना
मे र्नवेि करने मे र्नरुत्साह होती है , तयोकक र्प्पड़ से िर नही लगता, लेककन, मनमाने ढं ग से सरकार
भंिारण सीमा के र्नयम बिल िे गी ऐसा िर लगता है )
 The ECA Act does not distinguish between genuine large firms that need to hold large
amount of stock vs a greedy trader hoarding speculative profits. (कानून लालची व्यापारी की
र्जमाखोरी और ईमानिार कंपनी के बड़े स्टॉक मे कोई फकथ नही करता)
 ECA Act was passed in 1955 when India was worried about famines, shortages,
speculative hoarding and black marketing; it is irrelevant in today's India and must be
discarded. ( पुराने र्जमाने के इस कानून को फेंक िे ने का वतत आ गया है )
 So, ultimately, Government has implemented ES20’s suggestion on ECA reforms
via ATMANI → Ordinance ECA 2020.
4.3 👨‍🌾🍭🏭AGRO OUTPUT → FOOD PROCESSING (खाद्य प्रसंस्करण)
4.3.1 🍅🧅🏭Operation Green expanded to all fruits and veggies

 Food Processing Ministry → Budget-2018 launched a new sub-scheme under PM Kisan
Sampada Yojana called Operation Greens for T-O-P: Tomato, Onion and Potato to
improve infra for their storage & transport → round the year availability of T-O-P
@affordable prices.
 ATMANI= now we’ll expand from T-O-P to ALL fruits and vegetables (TOTAL)
 50% subsidy on transportation from surplus to deficient markets.
 50% subsidy on storage infrastructure.
 Benefit? reduced food wastage (अपव्यय/बबाथिी), Better prices for farmers, affordable
food for consumers (ककफायती िाम)
4.3.2 🍭🍬Food Enterprises promotion (खाद्य उद्यमों को बढावा)

 Existing (unorganized sector) micro food enterprises, Farmer Producer Organisations,
Self Help Groups and Cooperatives will be given funding, training, support. (असंगदित
क्षेत्र के लघु खाध्य उद्यमों को षवत्त पोिण, प्रशिक्षण, समर्थन)
 So, they can comply with FSSAI food safety standards, brand building, marketing

 Cluster based approach of development e.g. Mango in UP, Kesar in J&K, Bamboo shoots
in North-East, Chilli in Andhra Pradesh, Tapioca in Tamil Nadu etc. → ⏫Export
(समूहबध्ि करके षवकास, र्नयाथत मे बढ़ोतरी)
 Separately, herbal cultivation of medicinal plant, beekeeping will be encouraged
(औििीय पौिे और मिम ु तखी पालन को प्रोत्साहन)
4.3.3 💸🏭Agriculture infrastructure fund

 Worth ₹1 lakh cr to develop cold chain & Post Harvest Management infrastructure near
farm gate. (िीतागार और फसल कटाई बाि की कृषि अवसंरचना के शलए र्नर्ि)
 Benefit? ⏬spoilage of food = ⏫income for farmers, affordable prices for consumers.
4.4 🐮🐬AGRO → DAIRY AND FISHERIES
4.4.1 🐮🍼🍨🍦Dairy cooperatives (दग्ु धालय सहकारी सलमनतयां)

 Corona lockdown = milk sales ⏬.
 Government to give 2% loan interest subvention to dairy cooperatives + If they
regularly repay loans then additional 2% = total 4% interest subvention (ब्यार्ज मे राहत).
 National Animal disease control → 100% vaccination of domestic animals against Foot
and Mouth Disease (FMD) and for brucellosis.
 Animal Husbandry Infrastructure Development Fund will be setup with ₹15,000 cr
(पिप
ु ालन की बर्ु नयािी अवसंरचना षवकास र्नर्ि)
4.4.2 🐬Pradhan Mantri Matsya Sampada Yojana (PMMSY)

 It was already announced in Budget-2019. But not actually launched
 ATMANI = Yes we’ll launch PMMSY →
 Marine, Inland fisheries, Aquaculture, Cage Culture, Seaweed farming, Ornamental
Fisheries will be developed. (सामुदद्रक, अंतिे िीय, िैवाल,सर्जावटी मत्स्य पालन)
 Fishing Harbours (बंिरगाह), Cold chain, Markets will be created.
 Fishermen will be given personal insurance and boat insurance (बीमा कवच).
 Quality testing (गुणवत्ता परीक्षण),Laboratory Network → So, our exported fish/shrimp can
comply with Food safety standards in USA/EU. (खाद्य सुरक्षा मानक का पालन करना)
 Result? Jobs to 55 lakh people, Exports worth 1 lakh cr.

4.5 4B: SECTORS OF ECONOMY → MSME (सूक्ष्म, लर्ु और मध्यम उध्योग)
ATMANI: MSME→ main focus is Credit guarantee for MSME loans (ऋण अिायगी गारं टी),
protecting them from foreign competition in govt procurement tenders. But first of all,
we’ve to understand why Govt changed definition of MSMEs?
4.5.1 📔📔 👨🏻↘️👶🏻🏭 ES19: MSME dwarfism shd be discouraged (बौनापन)

CEA Subramanian K. observed: Following benefits available to Small firms:
Acts / Policy Only Applicable on Implications

Industrial Disputes 100/> workers Factory owner must get
Act,1947 Government approval before
retrenching workers/shutting units
Factories Act, 1948 Min 10-20 workers Factory owner must provide
depending on whether restroom, creches and other
power is used in mfg/ facilities
or not?
Employees’ State 10/> workers Factory owner required to co-
Insurance Act, 1948 contribute ₹ ₹ in insurance /
pension accounts of low-salaried
workers
Employees’ Provident 20/> workers Factory owner required to co-
Fund & Miscellaneous contribute ₹ ₹ in insurance /
Provisions Act, 1952 pension accounts of low-salaried
workers
Similarly, small firms get benefit of
− Priority Sector Lending, Credit Guarantee Fund Scheme, Public Procurement Quota.
− Benefits in Government tendering such as no need to pay fees / security deposits.
Some tender/contracts are exclusively reserved for MSME.
− GST Composition scheme: where they have to submit the collected GST to
Government on a quarterly basis instead of monthly basis, if turnover less than “X”
crores.
4.5.2 👨🏻↘️👶🏻🏭: 🧔 MSME ‘Dwarfism’ (बौनापन) caused by Govt schemes

ES19 observed above policies create a “perverse” incentive for firms to remain small.
− If the firms grow beyond these worker / turnover thresholds they will be unable to
obtain the said benefits.
− So, entrepreneurs find it optimal to start a new firm to continue availing these
benefits.
− But then firm doesn’t benefit from economies of scale, as a result they can’t create
large number of jobs.
− Thus infant firms → giant companies...nope; but infant firms → ‘dwarfs’. Such drawf
firm contribute neither to productivity or jobs.
− As a result, a 40-year old firm in Mexico generates 40 per cent more employment than
the average 40-year old Indian firm.
− Productivity level for 40-year old enterprises in the U.S. was more than 4x of a newly
setup firm. Whereas in India, productivity level for 40-year old firms in India was only
60% greater than a newly setup firm.

4.5.3 👨🏻↗️🤴🏭 MSME ‘Dwarfism’: Suggested Reforms by ES19
− Under Priority Sector Lending (PSL), banks are required to lend 7.5% of their annual
loans to Micro enterprises. These norms should be tweaked to give first preference to
loan applications by ‘start ups’ and ‘infants’ firms.
− Sunset Clause for Incentives (प्रोत्साहन के शलए सूयाथस्त उपर्नयम): MSME benefits should
have a ‘sunset’ clause, say, after 5-7 years, the firm will no longer be able to claim it.
If owner starts a new firm, then based on his Aadhar card number, the system should
alert authorities, so he can’t claim the MSME benefits in the new firm.
− Focus on High Employment Sectors such as rubber and plastic products, electronic and
optical products, transport equipment, machinery, textiles and leather & leather
products,
− Focus on Service Sectors with high spillover effects (प्लवन प्रभाव) such as Tourism.
Because it can open up new jobs in tour and safari guides, hotels, catering and
housekeeping staff, shops at tourist spots etc. It would also reduce the migration of
the rural labour force to other States.
So, 📔📔ES19 asked govt to discourage MSME dwarfism. ATMANI aims to

do that by changing definition of MSME
4.5.4 👻 👶🏻🏭 ATMANI: MSME Definition Changed by Government

 MSME units get certain relaxations in the factory and labour laws compliance.
 MSME are also eligible for priority sector lending loans and quotas in Government
procurement.
 If MSME firm grows bigger, it’ll not get the above benefits.
 So, if MSME firm#1 is growing bigger in size, its entrepreneur will create MSME Firm#2
to divert business.
 Thus infant firms → giant companies...nope; but infant firms → ‘dwarfism (बौनापन)’.
Such firms contribute neither to productivity or jobs, said the ES19.
 So, Government will amend the MSME definition in following manner
Table 3: सूक्ष्म, लघु और मध्यम उध्योग की व्याखया मे बिलाव

4.5.5 🔪 👶🏻🏭 Mudra Loans → Shishu Loans pe 2% Interest subvention (ब्याज मे मदद)
 Micro Units Development & Refinance Agency (MUDRA, non-deposit taking NBFC, 100%
owned by SIDBI) gives indirect lending to Micro units through “Pradhan Mantri Mudra
Yojana”. We’ve covered this in original lecture series Pillar1.
 3 types of MUDRA loans: 1) Shishu (upto 50k) 2) Kishor (>50k-5l) 3) Tarun (>5l upto 10l)
 ATMANI: 2% Interest subvention to Shishu loan borrowers, IF they’re prompt payees
(=repaying the loans regularly). This offer is valid for 12 months.
4.5.6 🔪 👶🏻🏭 MSME Non-NPA borrower → ECLGS

 Corona Lockdown → MSME business hurt → need loans to restart business →
Emergency Credit Line Guarantee Scheme (ECLGS: आपातकालीन क्रेडिट लाइन गारं टी योर्जना)
 This scheme will expire when
o A) 31/10/2020 is over or
o B) Total ₹3 lakh crore worth loans have been distributed, whichever is earlier.
 Beneficiary?
o MSME with a turnover upto ₹100 crore. Mudra borrowers are also covered.
o Previous outstanding loan account can’t be more than ₹25 crores, and can’t be
not an NPA. (It may be a regular, SMA0 or SMA1 account, as on 29/2/2020].
 Loan Amount? 20% of the outstanding loan.
 Loan Tenure? 4 Years (शमयािी/समयकाल)
 Loan Interest? 9.25% (Bank), 14% (NBFC).
 Collateral? Not required. (र्गरवी कुछ भी नही रखना होगा)
 If the borrower doesn’t repay loan principal or interest→ Credit guarantee covered by
NCGTC (National Credit Guarantee Trustee Company Limited), a company under the
Department of financial services in FinMin. ऋण अिायगी गारं टी उन उिोगों के शलए ख्र्जनके
लोन-खाते अभी एनपीए/अनर्जथक पररसंपर्त की श्रेणी मे नही है
4.5.7 🔪 👶🏻🏭 MSME NPA borrower → Subordinate Debt (गौण ऋण)

 Beneficiary? MSME whose loan account is in NPA/ stressed category. लघु/
 Such stressed MSME to be given subordinate loan Upto ₹75 lakhs to revive business.
 Tenure/Interest? Not clearly mentioned.
 If the borrower doesn’t repay loan principal or interest→ Credit guarantee by CGTMSE
(Credit Guarantee Trust for Micro and Small enterprises, an org funded by SIDBI +
Govt). ऋण अिायगी गारं टी, उन आर्र्थक तनावग्रस्त उिोगों के शलए ख्र्जनके लोन-खाते पहे ले से एनपीए
श्रेणी मे आ चुके है ।
4.5.8 🔪 👶🏻🏭 MSME Loans: FM tells Bankers not to fear 3C

 Public Sector Banks’ officers are worried that if loans given to MSME turn NPA then
3Cs will harass them unnecessarily: (बेवर्जह परे िान ककया/सताया र्जाता हैं)
o Central Bureau of Investigation (CBI),
o Central Vigilance Commission (CVC)
o Comptroller and Audit General (CAG)
 So, FM Nirmala.S has assured PSBs- don’t worry and give loans to eligible borrowers.
4.5.9 🗃 👶🏻🏭 MSME → Equity infusion via Fund of Funds (ननधधयो की ननधध)
 Govt will set up a Fund of Funds with ₹10,000 crore.

 This FoF will invest in daughter funds (who’ll supply ₹40k cr from their funds). So,
total 10k+40k=50k equity funding/infusion to MSME. (इख्तवटी के रूप में कंपनी में र्जान फूंकना)
4.5.10 👶🏻🏭 MSME → Protectionism (संरिणवाद)

 PM asked the nation to be "local ke liye vocal" (to promote local goods) with an aim to
make India self-sufficient in every way.
 So, in Government procurement tenders up to ₹200 crore. → Foreign (global)
companies will not be allowed to apply. (सरकारी खरीि के 200 करोड़ तक के टें िर मे षविे िी
कंपर्नयों को अर्जी िालने पर प्रर्तबंि)
 This will help Indian MSME and other companies to revive business through ⏫purchase
from the Government.
 Sidenote: In an excessive and unplanned enthusiasm, Home Minister Amit Shah ordered
CAPF canteens not to sell any “imported” items. But, many Indian companies were
also kept on the banned list because of miscommunication or haste in preparing the
list. So, the order has been withdrawn.
4.5.11 👶🏻🏭 MSME → Misc reforms under 👻ATMANI

 If an MSME sold goods or services to the government or CPSE → their bill will be
cleared within 45 days.
 Corona → Trade Fair and exhibition will not receive a large crowd → So, Government
will encourage e-market, e-exhibition etc. (ई-बार्जार, ई-प्रििथनी).

5 👻🧱PILLAR5: INFRASTRUCTURE REFORMS IN 👻ATMANI
(बनु नयादी अवसंरचना) ATMANI’s main thrust areas/ reform focus

Mining and power - Commercial mining in coal sector.
- Joint auction for Bauxite and Aluminium
- DISCOMs ko funding
Housing - RERA → force majeure
- PM-Awas Yojana middle class families loan subsidy
deadline extended
- Rental housing promoted
High tech - FDI in defense, import ban on certain weapons.
- Private sector collaboration in Atomic energy, space-tech
Investment - PPP for new airports
- VGF for Social infra
- No penalty on road contractors
5.1 🪔💎MINING (खनन)

 ATMANI→ PM GaribKalyan → District Mineral Foundation Fund (DMF) ₹₹ → can
be used for COVID-19 testing & related infra (ख्र्जला खर्नर्ज प्रर्तष्ट्िान र्नर्ि)
 Mineral Index (खनन सूचकांक) for different minerals will be prepared. But, details yet to
be worked out.
 Joint Auction of Bauxite and Coal mineral blocks so that: Coal → electricity → use
it for smelting Bauxite into Aluminium = ⏬ electricity costs for mining company.
(साझा नीलामी ताकक बोतसाइट षपघलाने के शलए बबर्जली लागत/खचथ कम हो)
 We’ll encourage Coal Gasification / Coal Liquefaction, coal bed methane extraction
→ creation of a gas based Indian economy.
 Commercial Mining allowed in the Coal Sector, through revenue sharing model.
(वाणणख्ज्यक खनन: आय मे से दहस्सेिारी का मोिेल).
o Although, this reform was being done via Mineral Laws (Amendment) Ordinance
2020 before Atmani.
o But in Atmani-tamasha, even previous reforms are counted.
5.1.1 ⚡️Energy → DISCOMs Liquidity injection (पैसा की तरलता दे के जान फंू कना)
 Corona lockdown → Industry and railways shutdown → ⏬ demand for electricity →
losses for Electricity/Power Distribution Company (DISCOM).
 Government will give ₹₹ to (i) Power Finance Corporation (ii) Rural Electrification
Corporation (PFC-REC) → they’ll invest ₹₹ in DISCOMS.
5.1.2 ⚡️Energy infra→ Electricity reforms (बबजली िेत्र में सुधार)

 We’ll reform the electricity tariff policy (िल्
ु क नीर्त),

 encourage DBT for electricity subsidy to farmers (सबशसिी का प्रत्यक्ष हस्तांतरण);
 install smart prepaid meters
 Will privatise the Union Territories’ DISCOM/Power departments → More efficient
operations in UT (केंद्र िाशसत प्रिे िों में बबर्जली की सरकारी कंपर्नयों का र्नर्जीकरण करें गे)
5.1.3 ⚡️☢️Energy infra→ Atomic energy (परमाणु ऊजाघ)

 PPP mode: Research reactor → produces medical isotopes → use in cancer
treatment. (अनस
ु ंिान ररएतटर से केन्सर र्चककत्सा के शलए समस्र्ार्नक तत्व/आइसोटोप का र्नमाथण)
 PPP mode: Irradiation facilities for Food preservation. (खाद्य संरक्षण के शलए षवककरण)
5.1.4 ✈️Transport infra→ Civil Aviation (नागररक उड्डयन)

 We’ll develop more number of World-class Airports through PPP. (सावथर्जर्नक-र्नर्जी
भागीिारी से नए षवश्व-स्तरीय हवाईअड्िो का र्नमाथण)
 Aircraft Maintenance, Repair and Overhaul (MRO: षवमान रखरखाव, मरम्मत, र्जीणोध्िार)
industry’s tax regime will be finetuned → India becomes a global hub for it, just like
we are the global-hub the Shipbreaking industry.
5.1.5 🚝👷‍♂‍Transport infra→ Migrants ki GHAR Wapsi
 (Not part of the part of Atma Nirbhar Bharat Package)

 Shramik Special Trains: to bring migrants within Indian states back to their home
states in India. (भारत मे ही ख्स्र्त प्रवासी मर्जिरू )
 Vande Bharat Mission: to bring home Indians who’re stuck overseas during
Corona. It’s considered to be India’s largest repatriation operation since the 1990’s
Gulf/Kuwait war. [But UPSC doesn’t usually engage in superlatives-KBC-GK:
biggest/largest/longest...so not really important whether it was bigger than Gulf
rescue.#र्ोड़ा-पढ़ो-आगे-बढ़ो ]
5.1.6 👨‍🚀🛸Communication infra → Space Tech involving private sector

 At global level, private sector space companies are rising such as Elon Musk’s SpaceX
and Richard Bransons’s Virgin Galactic.
 We will allow private sector players to use ISRO facilities for their projects.
 Will allow private sector players for outer space travel & planet exploration (बाहरी
अंतररक्ष ग्रहअन्वेिण, अवकाि यात्रा मैं र्नर्जी क्षेत्र के कंपर्नयों को अनुमर्त)
 We will share/sell Remote Sensing data to tech-entrepreneurs. This was even
recommended in ES19 (तकनीक उद्यशमयों को िेटा साझा करना)
5.1.7 🔫💣Defence infrastructure → FDI (रिा िेत्र में षवदे शी प्रत्यि ननवेश)
 We will ban the import of certain weapons and equipment= to courage Make in India.
(हर्र्यारों के आयात पर प्रर्तबंि)

 FDI limit in the defence manufacturing (automatic route): ⏫from 49% to 74%
5.2 🏠INFRA → HOUSING/REAL ESTATE (आवास)
5.2.1 🏠🤧⏳Housing Infra → Builders, RERA and Force Majeure

 In the RERA act, COVID-19 will be treated as ‘Force Majeure’ (अप्रत्याशित घटना).
 So if builder couldn’t finish the project in time, customers can’t complain to the RERA
authority.
 Validity? for 6 months from March-2020. If RERA authority wishes, they can extend for
another 3 months.
5.2.2 🏠📯🧔 Housing Infra → PMAY (U) → CLSS extended

 PM Awas Yojana (U) provided Credit Linked Subsidy Scheme (ऋण आिाररत सख्ब्सिी) for
o Economically Weaker Section (आर्र्थक रूप से कमर्जोर वगथ)
o Low Income Groups (र्नम्न आय वगथ)
o Middle Income Group (MIG: Annual Income: ₹6-18 lakhs)
 MIG component was to expire on 31/3/2020. But ATMANI extended it for one more
year → middle class families can purchase homes →
o ⏫ demand for steel, cement, transport → economic revival
o ⏫Jobs for the Construction Workers, Masons Electrician Plumber Etc.
5.2.3 🏠👐Housing Infra → Rental Houses (सस्ते/ककफायती ककराए के मकान)

 While Govt is running Pradhanmantri Aawas Yojana (Urban), but all migrants and urban
poor cannot avail it because
o 1) Family doesn’t have enough money to buy the homes permanently
o 2) Family doesn’t have plans to live forever in the City.
 So, Govt will build Affordable Rental Housing Complexes with the help of
o 1) State Governments and
o 2) public private partnership with real estate developers
5.2.4 🏛📯🧔Infrastructure → MPLADS

 2020-April: Member of Parliament Local Area Development Scheme (MPLADS) has been
suspended for two years, till 2022. So, the Government can spare money for corona
relief. But (this action) not part of ATMANI
5.3 🧱💰 PPP/INVESTMENT REFORMS IN 👻ATMANI

5.3.1 💰🧔🏥Social infrastructure ke liye VGF
 Govt to provide 30% Viability gap funding (व्यवहायथता अंतर िन) for social infra projects
such as schools, universities, hospitals, community housing, sports & public parks.

5.3.2 ⏳😥Contractors’ will not facing penalty for delayed projects
 Railways, Ministry of Road Transport & Highways, Central Public Works Dept hire
Contractors to develop infrastructure/goods/services.
 If contractor has not finished the project, he will be given 6 months extension to finish
it without any penalty in payment. (की तुमने काम िे री से खतम ककया तो सरकार तुम्हारा बकाया
पैसा काट लेगी.)
5.3.3 🧱💰Investment: Misc. announcements

 Fastrack investment (तेर्जी से र्नवेि) will be encouraged in 12 champion sectors: IT &
ITeS, Tourism and Hospitality, Medical Value Travel, Transport and Logistics,
Accounting and Finance, Audio Visual, Legal, Communication, Construction and
Related Engineering, Environmental, Financial and Education.
 All industrial parks will be ranked in 2020-21. But, details yet to be worked out.
 Lot of Bol Bachchan that is not important for the scope of exam e.g.
o Project Management Unit (PMU) to support contract management in defense
sector
o Project Development Cell in each Ministry to prepare investable projects,
o Technology Development cum Incubation Centres will be set up for fostering
synergy between research facilities and tech-entrepreneurs.

6 👻💊PILLAR6: HUMAN DEVELOPMENT IN ATMANI
मानव षवकास ATMANI’s main thrust areas/ reform focus

Health - E-Sanjeevani telemedicine
- iGOT e-training platform for Corona-warriors
- 50 lakh health insurance for Corona-warriors (Ref:1D)
Education - E-learning/distance learning via PM eVIDYA initiative, SWAYAM
PRABHA DTH channels
Food & shelter - One Nation One Ration Card
- Free 5kg grains and 1kg pulses via PM Garib Kalyan Ann
- Free LPG cylinder to PM-Ujjwala beneficiaries
- Shelter for urban poor/migrants
Poverty removal - ₹500 in PM Jan Dhan accounts of women, ₹1000 for poor
widows, elderly, PH
- SHG: loans, procure masks and sanitizers produced by them
- Street vendors ko ₹10k loans (SVANiDHI scheme)
- MGNREGA wages and funding⏫
- CAMPA funds for forest plantation related jobs
6.1 👻💊HRD → HEALTH (स्वास््य) IN ATMANI
 Will ⏫ public expenditure on health care and health research
6.1.1 👻💊📡Health → E-Sanjeevani telemedicine

 Ministry of Electronics and Information Technology (MeitY) → Centre for Development
of Advanced Computing (C-DAC, Mohali centre) → e-Sanjeevani Tele-Consultation
Services (टे ली/िरू संचार से र्चककत्सा परामिथ सेवाएँ).
 It provides Patient registration, Audio-Video Consultation with a Doctor, ePrescription.
6.1.2 👻💊📡Health → iGOT

 HRD Ministry’s ‘Digital Infrastructure Knowledge Sharing’ (DIKSHA) platform For
education and training → inside DISHA, they developed a new portal ‘Integrated
Government Online training’ (iGOT) portal.
 iGOT provides Training modules for Doctors, Nurses, Paramedics, Hygiene Workers,
Policemen, civil servants@Union & State, National Cadet Corps (NCC), and other
volunteers for Corona crisis= ⏫capacity building.

6.1.3 💉📲HEALTH → AAROGYA SETU APP (2020-APRIL)
 (NOT Part of ATMANI)
 Aarogya Setu app uses Bluetooth technology and GPS location data to track people
infected with Corona / those who came in close contact with infected patients.
 It’s developed by National Informatics Centre (NIC, under MEITY) with help of NITI
Aayog & private sector IT experts.
 Controversy? Privacy / hacking / misuse of data. (नागररकों की र्नर्जता पर खतरा)
6.2 👻👨‍🏫HRD → EDUCATION (लशिा) IN ATMANI
6.2.1 👻👨‍🏫📡Edu → PM eVIDYA initiative

 if student has internet: HRD Ministry → DIKSHA portal for e-learning,
 If student has NO internet: HRD Ministry → SWAYAM PRABHA DTH channels for
delivering lectures on TV, via GSAT-15 satellite. There will be One TV channel for each
for class 1 to 12.
 HRD Ministry → e-Paathshaala portal → more digital textbooks will be added.
 (Physical) Textbooks to have QR codes. Scan them → watch digital lecture/Multimedia
animation online.
6.2.2 👻👨‍🏫📡Edu → Misc. announcements in 👻ATMANI

 Manodarpan initiative → for psychosocial support of students, teachers and families
for mental health and emotional wellbeing. (मानशसक और भावनात्मक स्वास््य के शलए
मनोसामाख्र्जक परामिथ सेवाएं)
 National Foundational Literacy and Numeracy Mission → so that every child attains
Learning levels and outcomes in grade 5 by 2025. [ताकक NGO-Pratam’s ASER report मैं
सरकार की फर्जीहत र्ोड़ी कम हो]
6.3 👻🤑👷‍♂‍POVERTY REMOVAL (गरीबी उन्मल

ू न): FOOD & SHELTER
6.3.1 👻👷‍♂‍🌽🍽Food security (खाद्य सुरिा)
 ATMANI→ PM GaribKalyan → Free monthly LPG cylinder to PM-Ujjwala beneficiaries

for next 3 months.
 ATMANI→ PM GaribKalyan → PM Garib Kalyan Ann (अन्न) Yojana: 5 kg [wheat or
rice] per person + 1 kg of pulses per family for free every month for the three months.

 ATMANI→ If a migrant is not covered under the National Food Security Act
(NFSA) or unable to get food because he does not have a ration card….then, State
Government will distribute (5kg grain per person + 1 kg chana per family) per month x
for 2 months. Union will bear its full cost.
 One Nation One Ration Card to be implemented across India by 2021-March. (At
present only 20 States have done it) → Then migrants will be able to get NFSA’s
subsidized food at any place, irrespective of whether his name entered in given State’s
ratio card database or not.
6.3.2 👻👴🏪Shelter for Urban Poor

 State governments are allowed to use the State Disaster Response Fund for creating
Shelters / Quarantine facilities. (राज्य आपिा प्रर्तकक्रया कोि की िन से िरणस्र्ान बनाएंगे)
 Urban homeless will be given 3 meals per day in shelters. (िहरी बेघर)
6.4 👻🤑POVERTY REMOVAL → LOANS/SKILL

6.4.1 🤑👭 Self Help Groups (SHG) ko Loans/Skill
 ATMANI→ PM GaribKalyan → Women Self Help Groups (SHGs) to be given ₹20 lakh
collateral free loans.
 We’ll form new/more Self Help Groups for urban poor. (िहरी गरीबों के स्व सहाय समहू )
 Government will procure masks and sanitizers prepared by SHG = ₹₹ income for poor
families.
 National Rural Livelihood Mission (NRLM) → skill training and loans to SHG (This
scheme already exists).
 These SHG are given additional 10-15k rupees as Revolving funds (RF: पररक्रमण र्नर्ि), if
they’re holding – regular meetings, regular savings, and maintenance of proper books
of accounts etc.
 ATMANI= RF fund disbursal will be done through PAISA webportal.
6.4.2 🤑👨‍🏭Street vendors’s AtmaNirbhar Nidhi Scheme (SVANidhi)
 Boss? Ministry of Housing and Urban Affairs

 Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi Scheme (PM SVANidhi)
 Street Vendors (सड़क षवक्रेता/फेरीवाला) will be given ₹10,000 loan via banks, NBFCs, Micro
Finance institutions
 Loan Tenure: 1 year. Repayment to be done on a monthly basis.

 Loan Interest? Not explicitly mentioned but if the vendor repays loan on a timely
fashion → government will give 7% interest subsidy in his bank account. (फेरीवाला ने
रुण अिायगी र्नयशमत रूप से की तो ब्यार्ज में सरकार राहत िे गी)
 Scheme Valid till: 2022-March.
6.5 🤑⛏POVERTY REMOVAL → UNSKILLED JOBS
6.5.1 ⛏MGNREGA se job creation

 Budget-2020 allotted ₹61500 cr → Atma Nirbhar added another 40,000 crores.
 MGNREGA workers daily wage ⏫ from ₹182 per day to ₹202.
 Returning migrants will be enrolled in this scheme, and given job cards
6.5.2 ⛏🌱Forest Plantation projects se job creation

 Compensatory Afforestation Fund Act, 2016 → Compensatory Afforestation
Management & Planning Authority (CAMPA: क्षर्तपूरक वनीकरण प्रबंिन और योर्जना प्रार्िकरण).
 CAMPA to give ₹₹ to State Government → forest plantation projects etc → job
creation for poor families. (वनीकरण/वक्ष
ृ ारोपण कायथक्रमों द्वारा रोर्जगार सर्ज
ृ न)

7 👿ATMANI: CRITICISM (आलोचना/ THEHINDU JOB APPLICATION ESSAY)
As such criticism is not important, because Pro-Modi Bhakti toned questions are asked in
UPSC exam nowadays. But some idea may be required for interviews.
7.1.1 👿📉Criticism: 20lcr = insufficient to revive Indian economy

Country Japan Malaysia Singapore India
Stimulus package as a % of GDP 20% 16.2% 12.2% Just 10%
So, 20lcr is quite insufficient. अर्थव्यवस्र्ा को पुनर्जीषवत करने के शलए रकम पयाथप्त नहीं है
Counter argument: If Modi tried to give bigger fiscal stimulus THEN →
❖ Fiscal Deficit⏫= Credit Rating ⏬= Flight of Foreign Investors = Currency exchange

rate volatility.
❖ If the deficit is monetized by RBI printing more currency → demand side inflation like
Post-WW1-ka Germany.
7.2 👿📊 20LCR = STATISTICAL WINDOW DRESSING (अंको की फजी ददखावट)

 20lcr’s Fiscal policy component (Tax cuts, subsidies, interest subvention, MSP hike,
EPFO social security contribution, disinvestment, capital Expenditure for agri
infrastructure etc.) = very small in size. राजकोिीय दहस्सा बहुत कम है
 Most of the amount is by (+)(+) summing up bank loans to NBFC, MSME, farmers,
builders, Public Private Partnership etc. So, funding generated from….
o From RBI monetary policy decisions (⏬CRR, Repo, Refinance etc)
o From depositors’ deposits → bank → loans to borrowers
o PPP’s private sector share is generated through shares/bonds issued in market.
 So 20lcr is not entirely borne by the government from its own pocket.
 IF more money available for loan → it does not mean MSME firms will automatically
take loans, until there is an ⏫ in the demand of goods/services. E.g. Hair Salon
allowed it to be opened up but very few customers came. So, MSME produces hair
combs, razor blades, shaving cream, talcum powders etc. will not see any ⏫demand.
So, “xx cr available for loans” is an imaginary figure, not real revival figure.
 Even budget 2019’s announcements like Pradhan Mantri Matsya Sampada Yojana
(PMMSY: 20kcr) are added here. पुराने बर्जट की घोिणाओं को यहां वापस र्जोड़ा गया है
 ATMANI Press release even says “PM Fasal Bima Yojana: ₹6400 crore claim payment
given” & counted in the ₹20 lakh package. But, if there is a natural disaster or pest
attack= insurance company is duty bound to pay insurance money to farmers. How
is that a ‘stimulus package’?
 National Animal disease control → vaccination of animals is also counted in the
package. But, it’s an essential requirement of the Dairy Sector, even if coronavirus
didn't happen! So, it’s not ‘revival/stimulus package.’
7.3 👿👨👨‍🦲 STATES FISCAL PROBLEMS NOT GIVEN SUFFICIENT HELP

 Corona lockdown= State governments’ revenue collection drastically ⏬
 Delhi Govt unable to pay salaries to its employees. Wants ₹5000 cr from union.

 Bihar govt unable to pay its share for centrally sponsored schemes (CSS: केंद्र सरकार द्वारा
प्रायोख्र्जत योर्जनाएं) such as MGNREGA, Pradhan Mantri Awas Yojna, PM Jan Arogya Yojana
(PM-JAY: 5 lakh ka health insurance), mid-day meal etc. → So, Bihar wants the Union
to pay the entire cost of CSS, else threatens to stop the implementation altogether.
 Some states imposed additional cess on liquor sales, but that too is insufficient to
cover their revenue losses. (मदिरा पर िाला गया उपकर)
 Telangana CM even urged the Union to ⏫ FRBM limit and explore issuing ‘Helicopter
money’ (Ref: Pillar3)
 But, ATMANI has not adequately addressed fiscal problems of States. (राज्य सरकारों की
षवत्तीय समस्याओं को पूणथ रूप से सुलझाया नहीं गया)
7.4 👿👨👨‍🦲 REGIONAL IMBALANCE (क्षेत्रीय रूप से संतशु लत षवकास नहीं होगा)
 ATMANI focuses on loans to MSME/industries.
 But, this will benefit more to southern and western Indian States, since they’ve more
number of registered firms / organized sector. वहां पंर्जीकृत व्यापार उद्योग ज्यािा है
 But low levels of entrepreneurship / prevalence of unorganized sector in eastern India
and Hindi belt States = they’ll will not benefit much. वह शसफथ नरे गा के गड्ढे खोि कर िो पैसे
कमाएंगे उतना ही.
 The Government reformed the mining sector → ⏫mining activities in the
Chhattisgarh, Jharkhand, Odisha etc ASPIRATIONAL (=backward) states. But its
benefits may be confined to the industrialist, and not percolate down to the mine-
workers, until the minimum wages are increased and enforced. (न्यूनतम वेतन को लागू
नहीं ककया तब तक खनन क्षेत्र के मर्जिरू ों को कोई लाभ नहीं)
7.5 👿 MODI MERELY COPYING NEHRU’S IDEAS

Q. Compare and Contrast the ideas of PM Nehru and PM Modi on the India’s economic self-
reliance. भारत की आर्र्थक र्नभथरता के बारे में नेहरू और मोिी के षवचारों मैं समानता और भेि पर
चचाथ करें .
Ideas of PM → Nehru Modi

Self-reliance Yes. No. His plan is to privatize most of the
through Central CPSEs.
Public Sector
Enterprises (CPSEs).
Self-Reliance No. Capitalism was Yes, Capitalism, PPP is embraced with
through helping the seen with suspicion open arms. Focus on Ease of doing
private sector: and controlled through business. (पूंर्जीवाि को िक/घण
ृ ा से नही
ननजी िेत्र को मदद License Quota
Inspector raj. िे खते बख्ल्क गले लगाते हैं)
करके आत्मननभघरता
Self-reliance Yes, ban/high taxes on Limited extend. (केवल मयाथदित रूप से)
through imported goods
Import ban on selected defense items
protectionism

Ideas of PM → Nehru Modi
आयात पर संरिणवाद Global companies can’t apply for
tenders below “X” amount
Self-reliance Yes. Focus on SHGs. Limited extend.
through village- More ‘collective’ in More Focus on giving credit guarantee/
cottage industries nature. सामूदहकता पर loans given to MSME / individual
ग्रामीण कुटीर उद्योग entrepreneurs /street-vendors/
ज़ोर दिया गया Startups/homebuyers.
+ Jobs for MGNREGA workers
Here, hardly 1-2 points for SHG in
ATMANI
= more individualistic in nature.
व्यख्ततपरकता
7.5.1 ✍️👴🧔 Conclusion: Self Reliance: Nehru vs Modi

 Both PMs ideas on self-reliance were shaped by the needs and aspirations of their
respective era.
 Unlike Nehru, Modi can’t be expected to be more ‘protectionist’ due to WTO & global
pressure.
 Unlike Modi, Nehru could be expected to be more Pro-business/Pro-Capitalist, due to
immediate negative experience of British Imperialism & East India Company.
 Nonetheless, both PMs played instrumental roles in shaping the economic vision of
India during their tenure.
 मोिी ज्यािा संरक्षणवािी बन नहीं सकते, ना ही नेहरु ज्यािा मुड़ीवािी बन सकते र्े. िोनों ही अपने
समयकाल के कारकों से बंिे हुए र्े, लेककन िोनों ही ने अपने समय के भारत की आर्र्थक संकल्पना को
आकार िे ने में महत्वपूणथ योगिान दिया है ।
7.6 🙋‍♀‍ALTERNATE SUGGESTIONS TO REVIVE ECONOMY: अन्य सुझाव

Q. Suggest reforms in addition to ATMANI for revival of Indian Economy. (आत्म ननभघर
भारत के अलावा और क्या-क्या सध
ु ार करने चादहए अर्घव्यवस्र्ा को पन
ु जीषवत करने के ललए?)
 Mobilize funds through Consol Bonds.

 Bottom 80% of the households should be given Universal Basic Income of ₹15,000
→ ⏫demand of goods/services → economic revival. (सावथर्जर्नक बुर्नयािी आय)
 Public distribution system needs to be universalized. Free/subsidized cereals,
pulses and cooking oil should be provided to all people irrespective of whether their
name is in BPL list/ ration card or not. (सावथर्जर्नक षवतरण प्रणाली)
 MGNREGA scheme needs to be expanded to urban areas as well. MGNREGA’s
guaranteed number employment days need to be increased to 200 days from present
100 days. (मनरे गा योर्जना को िहरों में भी लागू करे , रोर्जगार दिनो की संयया बढ़ाए)
 PM Garib Kalyan component of ATMANI gave ₹500 DBT in Jan Dhan Bank account
of women. But, many villagers don’t have a bank in 5 km radius. And due to lockdown,
staff shortage in banks. So we have to increase the digital payment ecosystem in rural
areas. (डिख्र्जटल भुगतान को प्रोत्साहन िे ना)

 We need to raise Minimum support prices for farmers and Minimum Wages for
workers. (न्यूनतम समर्थन मूल्य और न्यूनतम वेतन को बढ़ाना)
 From Jan to May 2020: Aviation Turbine Fuel (ATF) prices reduced from ₹64 per litre
to ₹23 per litter but hardly any change in petrol diesel because govt kept raising the
excise and VAT taxes. While this is justifiable for ⏫ government's revenue, BUT
cheaper fuel is also necessary for revival of the economy, and for reducing stress on
middle class’s pockets. (ईंिन के िामों को कम ककया र्जाए)
 (+) Plus all the suggestions already given in the Mrunal’s economy pillar4 handout →
how to become a $5 trillion economy: reforms in FDI, GST etc.
 Conclusion: IF above suggestions are implemented, they’ll greatly help in
catalysing / augmenting the ATMANI in further revival of Indian economy.
ERROR: don’t digress into ‘governance/HRD’ part like we should

encourage virtual courts, virtual parliament, virtual classrooms. These
are birbal-ki-khichdi in ‘economic revival’ of India Q. आपको प्रश्न में र्जो
पूछा गया है उसका र्जवाब िीख्र्जए, इिर-उिर का हारमोर्नयम मत बर्जाइए
This is more than sufficient to prepare 250 words answer. Additional

effort in designing a PHD research paper= poor cost-benefit. Ex-CEA
Arvind Subramanian also writing many columns suggesting technical
reforms but no use UNLESS they appear in new Economic survey.
7.7 ✍🏻👻 CONCLUSION: ATMANI (APPRECIATIVE TONE)

 Thus, ATMANI focuses on the well-being of the poors, credit to MSME, ease of doing
biz for the corporate sector, reforms in agriculture and catalysing the development of
infrastructure. [No need to mention all the salient features in conclusion.]
 OR Thus, ATMANI focuses on boosting the Supply and Demand side of the economy, it
also aims for improving the ease of doing business and ease of availing loans/credit.
मांग और आपूर्तथ, व्यापार करने में आसानी, ऋण लेने में आसानी।
 These reforms will certainly help in a long way to revive Indian economy in the
aftermath of the Corona pandemic crisis. कोरोनावायरस के बाि अर्थव्यवस्र्ा को पुनर्जीषवत
करने में बहुत योगिान िे गा.
7.8 ✍🏻🎷DAY1✋MOCK QUESTION FOR MAINS FROM ATMANI

1. “Atma Nirbhar Bharat is not just a mere fiscal stimulus package but also a set of
reforms for ease of doing business and ease of availing credit. Elaborate” (शसफथ रार्जस्व
प्रोत्साहन नही, बख्ल्क व्यापार और ऋण मे सुगमता भी है ।)
2. “ ATMANI Economic package is a mix of supply-side and demand-side measures.”
Justify. (मांग और आपर्ू तथ िोनों को बढ़ावा िे ने का शमश्रण है )
3. Discuss in the brief, the significance of the agriculture reforms ushered by ATMANI
package. (आत्मर्न* द्वारा कृषि क्षेत्र मे शलए गए सुिारो के महत्व की चचाथ करे ।) Similar question
for MSME/infrastructure/Banking etc.

4. “Atma Nirbhar Bharat aims to revive Indian economy by targeting land, labour,
liquidity and laws”. Illustrate. (र्जमीन, श्रम, तरलता और कानून मैं सुिार द्वारा अर्थव्यवस्र्ा को
पुनर्जीषवत करना चाहता है )
5. Suggest reforms in addition to ATMANI for revival of Indian Economy. (आत्म र्नभथर
भारत के अलावा और तया-तया सुिार करने चादहए अर्थव्यवस्र्ा को पुनर्जीषवत करने के शलए?)
6. Compare and Contrast the ideas of PM Nehru and PM Modi on the India’s economic self-
reliance. (भारत की आर्र्थक र्नभथरता के संिभथ में नेहरू और मोिी के षवचारों मैं समानता और भेि पर
चचाथ करें . )
7. Suggest reforms in addition to ATMANI for revival of Indian Economy. (आत्म र्नभथर
भारत के अलावा और तया-तया सुिार करने चादहए अर्थव्यवस्र्ा को पुनर्जीषवत करने के शलए?)
MRUNAL’S NEXT ONLINE ECONOMY BATCH STARTING IN 2020-JUNE

 I’m also pleased to inform, my next ONLINE batch for Economy for UPSC CSE-2021 is
starting from June 2020 onwards, covering both Prelims and Mains topics of Economy.
 Night batch, Rapid revision handout, easy to understand powerpoints, weekly quiz
 Coupon Code: Mrunal.org for 10% discount
 Registration Link: https://unacademy.com/course/mrunals-economy-full-course-for-
upsc-prelims-mains-2021-507/QTOO36CS

Mrunal.Org/Download

30: WIN20CSP: PILLAR#3: BOP, INTL TRADE UPDATES
30 : Win20CSP: Pillar#3: BoP, Intl Trade Updates ............................................ 62
30.2 BoP-Classification: RBI’s (Actual) method ........................................... 64
30.2.1 Budget-2020: Medieval Dictionary terms for trade/commerce ................. 65
30.3 Terms of Trade (आयात-नियाात स्थिनत) ................................................ 65
30.3.1 Net Terms of Trade (NTT) or Commodity terms of trade ........................ 65
30.3.2 Gross (Barter) Terms of Trade (GTT, सिर्ा प्रिसिम के सिए, अत: ह दिं ी अिावश्यक) . 66
30.3.3 Income terms of trade (ITT) .......................................................... 66
30.3.4 ES20 DATA: Top Import and Exports ................................................. 66
30.3.5 (IYB20 Ch7): Largest importer and exporter in world ........................ 67
30.3.6 Remittance: Global migration report 2020 (अिंतरराष्ट्रीय िवाि) ............... 67
30.3.7 Remittance: Sidetopic → Pravasi Bharatiya Diwas (PBD) ................... 67

30.4 Balance of payment → Current Account → Import of Oil .......................... 68
30.5 BoP: Current → Fall of Crude oil prices in negative figure ..................... 68
30.5.1 BoP: Current → Petrol & Diesel Prices in India.............................. 69
30.6 Balance of payment → Current Account → Import of Gold ........................ 69
30.6.1 : Gold price in Corona ........................................................... 69
30.7 BoP → Current → Export → Geographical Indication (GI) ........................ 70
30.8 BoP → Current: Exports → Foreign Trade Policy (2015-2020) ............. 71

30.8.1 Tax Credit for Exporters: MEIS/SEIS .......................................... 71
30.8.2 Tax Credit for Exporters: RoDTEP? .................................................. 71
30.8.3 Port Logistics: Authorised Economic Operator (AEO) ......................... 71
30.8.4 ES20: “Assemble in India” ............................................................ 71
30.9 : BoP → Capital Account→ Investment→ FDI / FPI ...................... 72
30.9.1 India’s new rules for E-Commerce (2020-Jul) .............................. 72
30.9.2 BoP: Capital → Chinese FDI need Govt approval ...................... 73
30.9.3 Related Topic: Cabinet Committees ............................................ 73
30.9.4 International Financial Services Centre (IFSC) ....................... 73
30.9.5 : IFSC Authority Act, 2019 ............................................. 73
30.9.6 BoP → Capital Account → Misc. Concept: NIIP........................... 74
30.9.7 BoP → Capital Account → Composition of India’s external debt ....... 74
30.9.8 RBI’s Forex Reserve: प्रवदे शी मुद्रा ररजवा .......................................... 74
Mrunal’s Economy Updates Win20CSP for Past Batches’ Students- Pillar#3A&B → Page 62
30.9.9 ( > ) Disequilibrium in BoP: Factors responsible ................... 74
31 Currency Exchange Rate: मुद्रा प्रवनिमय दर ................................................ 75
31.2.1 Currency Exchange Rate → Attracting Dollars: VRR and FAR ............ 75
31.2.2 Currency Exchange Rate in Corona-Crisis .............................. 76
31.2.3 Exchange Rate → Misc. → Purchasing Power Parity (PPP) .................. 76
32 Pillar #3B: International Org ....................................................... 77

32.2 Bretton Woods → IMF, Washington, 1945, Dec.............................. 77
32.2.1 IMF gives loan to Pakistan (2019) ..................................... 77
32.3 (Non-Bretton Woods) → Multilateral Development Banks ................ 78
32.4 Theories of International Trade ................................................... 78
32.4.1 Mercantilist Theory: व्यापारी सिद्ािंत .................................................. 78
32.4.2 Adam Smith’s Theory of Absolute Cost Advantage (1776) ....................... 78
32.4.3 David Ricardo’s Theory of Comparative/Relative Cost Advantage (1817) ..... 79
32.4.4 Heckscher and Ohlin’s Factor - Proporations Theory (1919).................... 79
33 World Trade Organization: विश्व व्यापार संगठन ..................................... 79
33.2.1 Kazakhstan Summit #cancelled (2020-June) .............................. 79
33.2.2 : Tariff Barriers against international trade: Dumping ................ 80
33.3 WTO Disputes : India’s export incentive schemes ...................... 80
33.4 Free Trade agreements → TPP11, RCEP ...................................... 81
33.4.1 TPP-11 or CPTPP ............................................................ 81
33.4.2 Trade agreements → USMCA & AFCFTA ................................ 81
33.5 Regional Comprehensive Economic Partnership (RCEP) ................... 81
33.5.1 Introduction to RCEP: ............................................................. 81
33.5.2 RCEP: Why didn't India join in 2019-Nov? ............................... 81
33.5.3 RCEP: Counterview: India made a mistake by not joining .................. 82
33.5.4 RCEP: Conclusion? ................................................................. 83
33.5.5 Budget-2020: FTA ‘rules of origin’ (उत्पप्रि के नियम) ............................... 83
33.5.6 India’s trade agreements .................................................. 83

33.6 Burning issues in International trade ......................................... 83
33.6.1 Protectionism, Trade war: ििंरक्षणवाद, व्यापार युद् ....................... 83
33.6.2 : Protectionism → Medicine and Defence ................... 84

33.6.3 : Protectionism → Indian Govt procurement (िरकारी खरीद)
84
33.6.4 USA’s Generalized System of Preferences (GSP) list ............... 84
33.6.5 USA Reciprocal Trade Bill/Act (पारथपररक व्यापार प्रव्ेयक / अध्नियम) ..... 84
33.6.6 India-USA limited trade deal (िीसमत व्यापार िौदा) ...................... 85
33.7 Groupings: Indian subcontinent → SAARC ............................... 85

33.8 Groupings led by Gora → G20 (Group of 20) ................................. 85
33.9 G20: Osaka Declaration ......................................................... 85
33.9.1 Osaka declaration: why India refused to sign ................... 86
33.10 Groupings led by Gora → G7 and D10 ...................................... 86
33.10.1 G7 - Group of Seven (1975) ................................................. 86
33.10.2 D10: 5G club proposed by UK (2020) .................................. 87
33.10.3 BREXIT = BRITAIN EXIT ....................................................... 87
33.11 Groupings / Issues: Middle East .............................................. 87
33.12 Vande Bharat Mission 2020- Indians ki watan-waapsi .................. 87
33.12.1 : Kuwait Expat Bill (प्रवदे शी मजदरू ों की ििंख्या का प्रव्ेयक) ...... 88
33.13 Export control / Non-Proliferation regimes ............................... 88

33.13.1 USA Exit from Arms Treaties (शथर ििंध्) ............................... 88
33.13.2 Mock Questions for Mains GSM2 & GSM3 ................................. 88

Mrunal’s Economy Batch Prelims and Mains 2021 ............................................... 89
30.2 🐯 BOP-CLASSIFICATION: RBI’S (ACTUAL) METHOD

Current Account Capital & Financial Account
चालू खाता पूंजी और वित्त खाता
Goods and services (िस्तुएं और सेिाएं) 1. Foreign Direct Investment (FDI:
Primary Income: wages, dividend, interest प्रत्यक्ष विदेशी वनिेश)
(प्राथविक आय: िेतन लाभांश ब्याज) 2. Portfolio Investment (FPI)
Secondary income (गौण/सहायक): 3. Loans / ECB (बाह्य ऋण)
remittance, gift, donation 4. Non-resident’s investment in Bank,
Insurance, Pension schemes.
5. RBI’s Foreign Exchange Reserve
However, for the purpose of learning, we’ll continue with the traditional classification
given in the textbooks (and in below image)
30.2.1 💼Budget-2020: Medieval Dictionary terms for trade/commerce
Budget-2020 mentioned how India was awesome in global trade even during Ancient-
Medieval time. We find mention of following terms in the Indus script
Takara Kolimi tin smithery

Sreni guild
Sethi wholesale merchant
Poddar Assayer of metal into treasury.
30.3 ⛽️🎖 TERMS OF TRADE (आयात-नियाात स्थिनत)
30.3.1 Net Terms of Trade (NTT) or Commodity terms of trade

𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑒𝑥𝑝𝑜𝑟𝑡
𝑁𝑇𝑇 = ∗ 100 = 𝑓𝑜𝑟 𝐼𝑛𝑑𝑖𝑎 𝑖𝑡 ′ 𝑠 < 100.
𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑚𝑝𝑜𝑟𝑡
Meaning ($ or value) wise we are importing more and exporting less.
30.3.2 Gross (Barter) Terms of Trade (GTT, सिर्ा प्रिसिम के सिए, अत: ह द
िं ी अिावश्यक)
𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 (𝑜𝑟 𝑣𝑜𝑙𝑢𝑚𝑒) 𝑜𝑓 𝑖𝑚𝑝𝑜𝑟𝑡
𝐺𝑇𝑇 = ∗ 100 = 𝑓𝑜𝑟 𝐼𝑛𝑑𝑖𝑎 𝑖𝑡 ′ 𝑠 < 100.
𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 (𝑜𝑟 𝑣𝑜𝑙𝑢𝑚𝑒) 𝑜𝑓 𝑒𝑥𝑝𝑜𝑟𝑡
So, in physical quantity (kg, litres) we are exporting more than importing. This is possible
because exported Indian rice’s quantity (kg) could be large even though its value ($) will
not be very large.
30.3.3 Income terms of trade (ITT)

𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑒𝑥𝑝𝑜𝑟𝑡
𝐼𝑇𝑇 = ( ) ∗ (𝑄𝑢𝑎𝑛𝑡𝑢𝑚 𝑖𝑛𝑑𝑒𝑥 𝑜𝑓 𝑒𝑥𝑝𝑜𝑟𝑡𝑠 𝑄𝐼𝐸 )
𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑚𝑝𝑜𝑟𝑡
= (𝑁𝑒𝑡 𝑡𝑒𝑟𝑚𝑠 𝑜𝑓 𝑡𝑟𝑎𝑑𝑒) ∗ (𝑄𝐼𝐸 )
Formula not important. What is quantum index of export = not important.
For India and other developing countries, ITT is much relevant indicator for analysing their
foreign trade compared to previous 2 indicators. Why? not important.
30.3.4 📔📔ES20 DATA: Top Import and Exports

 Trade deficit as a % of GDP has continuously ⏫ in the last 3 years (2016-19).
 For 2018-19, our top-import and exports were as following:
Goods: Top Imports (in ⏬ share) Top Exports (in ⏬ share)

1. Petroleum: Crude (22%) 1. Petroleum Products (14%)
2. Gold (6%) 2. Pearl, Precious & Semi-Precious
3. Pearl, Precious, Semi-Precious Stones Stones
4. Petroleum Products 3. Drug Formulations, Biologicals
5. Coal, Coke and Briquettes etc. 4. Gold and other Precious Metal
Other notable: Jewellery
Telecom Instruments, Electronics 5. Iron And Steel
Components, Organic Chemicals, Iron And Other notable:
Steel, Industrial Machinery Organic Chemicals, Cotton, Motor
Vehicle/Cars, Electric Machinery
Services: Top Imports (in ⏬ share) Top Exports (in ⏬ share)
1. Business service 1. Software service
2. Travel (=Indian going on foreign trip) 2. Business service
3. Transport (=of cargo/goods) 3. Travel
4. Software service 4. Transport
For 2018-19, our top trading partners were as following:

Top Import sources (⏬ share) Top Exports destinations (⏬)
1. China (14%) 1. USA (16%)
2. USA 2. United Arab Emirates
3. United Arab Emirates 3. China
4. Saudi Arab 4. Hong Kong
5. Iraq 5. Singapore
Other notable: Switzerland, Hong Kong, S. Other notable: UK, Bangladesh, Germany,
Korea, Singapore, Indonesia Netherland, Nepal
- We’ve large Trade Deficit: व्यापार घाटा with China (cheap electronics, toys etc.)
Switzerland (Gold, Luxury items), Middle Eastern nations (Oil).
- We’ve Trade Surplus: व्यापार अधिशेष with USA (Chemicals, textile, services etc.), UAE
(Tea, Spices, textile etc.).
- India’s top five trading partners are USA, China, UAE, Saudi Arabia and Hong Kong
(with whom we’ve largest amount of import & export relations)
30.3.5 📗 (IYB20 Ch7): Largest importer and exporter in world

2018: In The World → Largest Importer Largest Exporter
Goods (Merchandise) #1:USA…..#10: India #1: China…. #19: India
Services #1:USA…..#10: India #1: USA…...#8: India
❓MCQ (Pre19-SetA Q37). Among the following, which one of the following is the
largest exporter of rice in the world in the last five years?
(a) China (b) India (c) Myanmar (d) Vietnam
❓MCQ (Pre19-SetA Q84). Among the agricultural commodities imported by India,

which one of the following accounts for the highest imports in terms of value in the
last five years?
(a) Spices (b) Fresh fruits (c) Pulses (d) Vegetable oils
30.3.6 💌 Remittance: Global migration report 2020 (अिंतरराष्ट्रीय िवाि)

 The International Organization for Migration (IOM, HQ: Geneva, Switzerland) is a
related organization of UN. As per its latest Global migration report 2020….
 Top amount of remittance received to 1) India 2) China 3) Mexico.
 Top number of international migrants are from 1) India 2) Mexico 3) China
 Top destination country of migrants is USA.
30.3.7 💌 Remittance: Sidetopic → Pravasi Bharatiya Diwas (PBD)

1915 9th January: Gandhi-ji returned from S.Africa to Bombay (India).
2003 NDA-I (PM Vajpayee) decides to celebrate Pravasi Bharatiya divas (PBD) annually
every 9th January. First summit @New Delhi.
2015  NDA-II (PM Modi) converts PBD into “biennial” event i.e. grand festival every
second year (भव्य उत्िव/रिं गारिं ग कायाक्र्म
र दि
ू रे िाि)
 every other year, only a small event in India, and regional PBD event in a
foreign country
2017 @Bengaluru, Karnataka. (because its second year from 2015)
2018 Regional Pravasi Bharatiya Divas at Singapore
2019  @Varanasi, Uttar Pradesh (because its second year from 2017)
 THEME: "Role of Indian Diaspora in building a New India.”
 15th Pravasi Bharatiya Divas Convention was organized from 21 to 23 January
2019 instead of 9th January, so that NRIs could visit Prayagraj for Kumbh
Mela and witness the Republic Day Parade at New Delhi on 26th January
2019.
2020 @New Delhi. But just a small scale video conference type of event.
भव्य रिं गारिं ग कायाक्रम ि ी ककया, क्योकक वो तो र दि
ू रे िाि करते ै।
2021 <add update when announced>
Self Study? Laxmikanth’s Indian Polity ch.6 on citizenship → difference OCI vs PIO
30.4 ⛽️BALANCE OF PAYMENT → CURRENT ACCOUNT → IMPORT OF OIL
In full-course (Before 2019-Pre), we saw NELP & HELP, how OPEC cartel
was controlling prices. उसके बाद नया क्या चल रहा है?
 2019-Sept: Houthi = Shia rebel group of Yemen with Iran’s backing. They attacked
Abquaiq-Khurais oil field of Saudi Arabia’s Aramco company using drone. Oil
production suspended, global oil prices ⏫ further.
 2020-March: oil prices ⏬fell to $20 per barrel, because
- OPEC and Russia couldn’t agree for production cuts.
- Corona air travel ban = fuel consumption ⏬= Demand⏬=prices ⏬
 Afterwards again started to recover. But entire trend analysis will come in ES21.
So, better wait till then.
Figure 1: Oil Barrel Prices in U$D
Side Topics?
1) Sweet crude oil = Low Sulphur content. Sour crude = High Sulphur content.
2) BRENT Index is an index to measures crude oil price, mainly in North West Europe.
30.5 ⛽️💰BOP: CURRENT → FALL OF CRUDE OIL PRICES IN NEGATIVE FIGURE

 USA’s crude oil prices are monitored through West Texas Intermediate (WTI) contracts.
 Long story cut short: Oil demand ⏬ due to Corona lockdown on vehicle/aviation
traffic. But, American oil drilling companies can’t stop production because it’s more
expensive to ‘restart’ the production after shutting it.
 And merchants/intermediaries can’t hold stock because their storage capacity is
limited.
 2020-April: sellers are (temporarily) paying $$ to buyer to take the stock of oil barrels.
Hence negative minus $40 per barrel price. (अिरीकी विक्रेताओ के पास तेल रखने की जगह
उपलब्ध नही, इसवलए ग्राहक को सािने से पैसा देकर िाल उठिा रहे है।)
 India may not benefit, since we mostly import from the middle-east and not the USA.
 Further, our Government will ⏫taxes on petrol diesel, so even if crude oil gets cheap
for oil refineries, the resultant petrol-diesel may remain costly for Indian families.
30.5.1 ⛽️💰BoP: Current → Petrol & Diesel Prices in India
 1970s to 2002: Administered Price Mechanism (APM: प्रशावसत/वनयंवित िूल्य तंि): Wherein
the government fixed the prices of petroleum fuels and paid subsidy to the oil
marketing companies (OMC: तेल विपणन कं पवनयां) for their losses.
 2002-2014: Government gradually began decontrolling the fuel prices, to reduce its
own subsidy burden.
 Present system Dynamic Fuel pricing system (ईंधन की गवतशील रूप से बदलने िाली िूल्य
प्रणाली): wherein OMCs decide the prices of petrol and diesel on DAILY basis, based on
the movement in international prices. Associated keyword/formula/methodology is
"Trade parity price (TPP)". What is means, how it works? = Poor cost benefit chasing
that.
 Benefit of dynamic pricing? In theory, If the oil prices lowered in the international
market, petrol diesel should become cheaper in India. विश्व बाजार िें दाि वगरने पर इं जन के
दाि भारत िें भी कि होने चावहए. But, Reality? → → →
2020- Base Union's Excise Duty State VAT final: price +

May price per litre per litre (varies from taxes
State to State)
petrol ₹22 ₹33 ₹16 71
diesel ₹21 ₹32 ₹16 69
 Corona crisis = ⏬ transport → ⏬ demand of crude oil → prices have fallen or
remained moderate. (विश्व बाजार िें कच्चे तेल की कीितें या तो कि हुई है या िध्यि स्तर पर रही है)
 But, Corona crisis → direct tax and GST collection ⏬. Government required more ₹₹
to run the schemes. So, continuously ⏫ excise & VAT. (उत्पाद शुल्क और िैट की दरों िें
बढोतरी)
 Consequently, by 2020-Jul: Petrol and diesel costing around ₹80/litre in Delhi
30.6 🎖BALANCE OF PAYMENT → CURRENT ACCOUNT → IMPORT OF GOLD
In full-course handout (Before 2019-Pre), we had learnt about the gold

monetisation scheme, gold Bond scheme. Then …
30.6.1 🎖😷: Gold price in Corona

As such, Govt's economic surveys don't talk much about daily ups/downs of gold price
movement. UPSC also never asked anything like that. So, we need not PHD.
 Indian banks ⏬ fixed deposit interest rates. People shifting towards gold investment
for a better "positive real" interest rate. (Recall Pillar#1)
 Mutual funds not giving good returns post-ILFS crisis and Franklin Templeton MF crisis
(Recall Pillar1) → some investors prefer gold
 Geopolitical tensions (भू-राजनीवतक तनाि) like Iran-US, China-US, India-China have
negative impact on sharemarket → some investors prefer gold
 2020 Corona-Crisis: Shares and bonds have become risky due to heavy losses faced by
companies. Investors prefer a 'safe assets' = ⏫demand of gold → ⏫prices.
 Corona→ workers @gold mines / refineries ⏬ → gold production ⏬ → price⏫
+ other 500 angles on Dollar currency exchange rate, Bond yields etc=poor cost-benefit.
30.7 ☕️BOP → CURRENT → EXPORT → GEOGRAPHICAL INDICATION (GI)
 भौगोवलक संकेतक GI are covered under

- WTO’s Trade Related Intellectual Property Rights Agreement (TRIPS: more
Pill#3B) and
- India’s Geographical Indication of Goods Act, 1999.
 Once a product gets GI tag, it’s valid for 10 years (and can be renewed further.)
 GI name cannot be used for products that are manufactured outside of the designated
region, else party can be punished under the law
New Indian GI tag during From April 2018 till Now June 2020
GI Product Type Origin?
Araku Valley Arabica Coffee Agricultural Andhra & Odisha
ldu Mishmi Textiles Handicraft Arunachal
Boka Chaul, Kaji Nemu Agricultural Assam
Shahi Litchi Agricultural Bihar
Silao Khaja Food stuff Bihar
Jeeraphool Agri cultural Chhattisgarh
Khola Chilli Agricultural Goa
Rajkot Patola, Pethapur Printing Blocks Handicraft Gujarat
Himachali Kala Zeera Agri cultural Himachal
Himachali Chulli Oil Manufactured Himachal
Coffee from Coorg| Chikmagalur |Bababudangiris, Agricultural Karnataka
Sirsi Supari; Gulbarga Tur Dai
Kolhapuri Chappal Handicraft Karnataka & MH
Wayanaad Coffee, Marayoor Jaggery-Sharkara, Agricultural Kerala
Tirur Betel Leaf (Tirur Vettila)
Kashmir Saffron Agricultural J&K
Sohrai – Khovar Painting Handicraft Jharkhand
Jhabua Kadaknath Black Chicken Meat Food Stuff Madhya Pradesh
Alphonso, Sangli Turmeric Agricultural Maharashtra
Chak-Hao Agri Manipur
Pawndum, Ngotekherh, Hmaram, Tawlhlohpuan, Handicraft Mizoram
Mizo Puanchei
Kandhamal Haldi(turmeric); Odisha Rasagola Agri;food Odisha
Erode Manjal / Turmeric, Kodaikanal Malai Poondu Agricultural Tamil Nadu
Thirubuvanam Silk Sarees, Kandangi Saree, Handicraft Tamil Nadu
Thanjavur Pith Works, Arumbavur Wood Carvings
Palani Panchamirtham, Srivilliputtur Palkova, Food Stuff Tamil Nadu
Kovilpatti Kadalai Mittai
Dindigul Locks Manufactured Tamil Nadu
Telia Rumal Handicraft Telangana
Chunar Balua Patthar, Gorakhpur Terracotta Natural Uttar Pradesh
Self Study? For UPSC interview, your state’s GIs from ipindia.nic.in/registered-gls.htm
❓MCQ. ‘Kandhamal Haldi’, which received GI tag recently, is a variety of turmeric
indigenous to _ _ _ _. (CAPF-2019)
(a) North Bengal(b) Southern Odisha(c) Sangli, Maharashtra(d) Alleppey, Kerala
30.8 💎📞📯BOP → CURRENT: EXPORTS → FOREIGN TRADE POLICY (2015-

2020)
 2019-Oct: Government planning to launch new foreign trade policy (विदेश व्यापार नीवत)
as existing policy will expire on 31/3/2020. Although 2020-March: theHindu columnists
believe due to the new policy may be postponed due to Coronavirus slowdown.
 2018: Commerce Ministry launched a separate policy for Agriculture Exports (Ref#4A:
स्िचावलत िागग से सरकार की अनुिवत से).
30.8.1 🍋🤑Tax Credit for Exporters: MEIS/SEIS

Boss? Commerce Ministry WAS running two tax-incentive schemes to boost exports
 Services Exports from India Scheme (SEIS: भारत से सेिाएं वनयागत योजना).
 Merchandise Exports from India Scheme (MEIS: भारत से व्यापाररक िाल वनयागत योजना)
These schemes provide tax credit to exporters, which they can use for paying Union’s
Customs Duty. AFTER RODTEP is notified fully, the MEIS scheme will be STOPPED.
30.8.2 Tax Credit for Exporters: RoDTEP?

2020-March: govt announced Remission of Duties and Taxes on Exported Products (RoDTEP:
वनयागत उत्पादों पर शुल्क और कर की छू ट). Boss? Commerce Ministry
MEIS RoDTEP
GOODS Exporter Customs Duty Following taxes he paid in previous stage:
gets Input tax 1. Customs Duty
credit for 2. Transport fuel pe Excise and VAT
3. Agriculture raw material pe State Mandi
tax (it’s not a ‘tax’ but rather a FEES
charged by APMC Mandi.)
4. Electricity pe electricity duty
WTO-compliant? No, so WTO ordered Yes (or atleast Modi claims so.) RoDTEP will
to stop it replace MEIS scheme.
30.8.3 ⚓️Port Logistics: Authorised Economic Operator (AEO)

 अवधकृ त आर्थगक संचालक: An importer/exporter/cargo company can apply to the Central
Board of Indirect Taxes and Customs (CBIC) to get this ‘status’.
 Subject to conditions like 1) minimum 3 years experience 2) never filed bankruptcy 3)
never caught in fraud / smuggling etc.
 Benefits? Faster clearance times, fewer physical examinations on cargo etc.
 At International level, World Customs Organization (WCO, HQ: Brussels, Belgium)’s
“SAFE Framework” guides this program.
30.8.4 📔📔ES20: “Assemble in India”

ES20 Vol1ch5 Talks about doing “assemble in India for network products” to
encourage our exports. Ref: Pillar-4B: updates
30.9 ⛽️🎖: 🗃🤲 BOP → CAPITAL ACCOUNT→ INVESTMENT→ FDI / FPI
 FDI is the (more than 10% equity / share) investment made by a foreign entity into an
Indian company, with the objective to get involved in the management / production of
that Indian company. भारतीय कं पनी के संचालन/ उत्पादन िें शाविल होने के उद्देश्य से 10% या उससे
ज्यादा शेयर खरीदना (e.g. 2018: Walmart-USA bought 77% stakes in Flipkart @$16 billion.)
Full-course handout contains list of all sectors were FDI

allowed/prohibited. Here are the new updates in 2019-20
sector → Foreign Investment limits Automatic With Govt

स्िचावलत िागग से | सरकार की अनुिवत से route upto? approval?
2019-Full budget: Insurance Intermediaries: (मध्यथि) 100% N/A (क्योंकक 100%
- Agents/brokers. हो तो गया! उसे
- Banks selling insurance (Bancassurance) ऊपर ककतना
- Surveyor/Loss Assessor (िवेक्षक). जाएगा?)
- Third Party Administrators (e.g. Hospital where
treatment is given for health insurance)
2020-May/June: Defense (रक्षा क्षेि) 74% Above 74%
30.9.1 🖱🛒 India’s new rules for E-Commerce (2020-Jul)
Who? Consumer Affairs ministry. उपभोक्ता िािलों का िंिालय

How? using the powers under Consumer Protection Act 2019. उपभोक्ता संरक्षण अवधवनयि
These rules applicable to all types of electronic retailers (e-tailers) registered in India or
abroad - whenever they're offering goods and services to Indian consumers.
✓ E-tailers must mention the 'expiry date', 'country of origin' of goods, its policies on
return, refund, exchange, warranty and guarantee, delivery, shipment, cancellation
policy. (ई विक्रेता ने सिावि वतवथ, उत्पादन का िूल देश इत्याकद की जानकारी देनी होगी )
✓ E-tailer must display sellers' geographic address, customer care number, rating etc.
✓ Plus many other technical norms. Poor cost:benefit in chasing all them. In MCQs,
just apply logical reasoning that news rules are more consumer friendly, and imposes
more responsibilities on e-tailer/seller. Accordingly do logical reasoning, if any
technical norm asked. For example, "E-tailer must not post fake reviews by creating
fake accounts".= Yes this statement is correct.
✓ Penalties? Consumer Protection Act, 2019.
30.9.2 🗃🈶💰 BoP: Capital → Chinese FDI need Govt approval
Before From 2020-April
If any FDI proposal coming from Pakistan  If any FDI proposal from any country
and Bangladesh, it required approval from that shares border with India → Indian
Government of India. Govt approval required
 Means, Pakistan, Afghanistan, China,
Nepal, Bhutan, Bangladesh and
Myanmar
✓ Govt decided this because: Corona-led slowdown = Indian companies suffering from
losses. China may mis-use this opportunity to takeover such Indian companies @very
low share price → will harm our strategic & economic interests. (चीन, हिारी भारतीय
कं पवनयो का अवधग्रहण कर लेगा तो हिारे रणनीवतक और आर्थगक वहतों को नुकसान हो सकता है)
✓ Criticism? China says this is violation of WTO norms related to foreign investment.
Although Australia and Germany also announced similar restrictions with similar
reasons (More on WTO in Pillar#3B)
30.9.3 🕵🏻 Related Topic: Cabinet Committees

Cabinet Committee on Boss* Notes
1) Appointments वनयुवक्त विषयक PM finalizes the name for top level appointments
के वबनेट सविवत like Cabinet Secretary, Indian ambassadors
for each nation etc.
2) Accommodation आिास HM Giving house allocation to politicians, top
officials
3) Economic Affairs PM FDI approval, Agri-MSP approval (Pillar#4A),
आर्थगक िािले Bank merger,disinvestment etc grand things
4) Parliamentary Affairs Defense Defense Minister Rajnath Singh made boss for
संसदीय कायग Minister his acumen in parliamentary matters
5) Political Affairs, 6) Security PM Self-explanatory. If PM is in a cabinet
5) राजनीवतक िािले, 6) सुरक्षा Committee, he automatically becomes its
chairman
7) Investment and Growth PM These two are new committee formed after
8) Employment and Skill 2019's General Election. 7) वनिेश और विकास
Development 8) रोजगार और कौशल विकास
30.9.4 🐯🎅🏽🦁 International Financial Services Centre (IFSC)
Full-Budget-2019: Companies operating in operating IFSC were given additional

benefits / tax holidays in the direct taxes (with the hopes that it’ll attract more
companies here).
30.9.5 🐯🎅🏽🦁: 🕵🏽 IFSC Authority Act, 2019

✓ IFSC (such as GIFT city) are setup under the SEZ Act.
✓ IFSC get relief / exemption in the Indian tax laws. Further, RBI, SEBI, IRDAI and other
regulators’ norms also apply in relaxed manner. E.g. Bank branches in GIFT-city-IFSC
are exempted from RBI’s CRR-SLR-PSL etc. norms.
✓ 2019’s Act aim to setup a statutory International Financial Services Centres Authority
(अंतरागष्ट्रीय वित्तीय सेिा कें द्र प्रावधकरण), with
- One Chairperson
- One member each nominated from RBI,SEBI, IRDAI, PFRDA
- + few other members from Finance ministry etc
- Tenure? 3 years. Re-appointment? Yes, possible.
✓ The IFSC Authority will regulate all financial services, products, institutions in
International Financial Services Centres of India.
 2020-April: Government announced its headquarter will be at Gandhinagar, Gujarat.
(Since Gandhinagar is the only place with an IFSC at present, i.e. GIFT City)
 Controversy? Maharashtra political outfits demanding HQ should be in Mumbai.
30.9.6 🤲🏻 🔪 BoP → Capital Account → Misc. Concept: NIIP

✓ Net International Investment Position (NIIP)= value of overseas assets owned by a
nation minus the value of domestic assets owned by foreigners.
 Positive NIIP value = creditor nation (लेनदार राष्ट्र)
 Negative value = debtor nation (कजगदार देश). USA highest, India at 8th place (in
2018)
 (Full) Budget-2019: Indian Development Assistance Scheme (IDEAS) provides
concessional loans to developing countries. We’ll revamp this scheme. भारतीय विकास
सहायता योजना → विकासशील देशों को भारत ररयायती ब्याज दरों पर कर्ाग देता है
30.9.7 🤲🏻 🔪 BoP → Capital Account → Composition of India’s external debt

 External borrowing by Pvt. Sector>Government
 Further, majority of India’s external debt is denominated in U$D currency > Indian
Rupee > IMF’s SDR > (Yen, Euro, Pound Sterling, etc)
❓MCQ. Find correct statement(s): (Pre19-SetA Q63)

1. Most of India’s external debt is owed by government entities.
2. All of India’s external debt is denominated in US dollars.
Codes: (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
30.9.8 🐯🗄 RBI’s Forex Reserve: विदे शी मुद्रा रिजिव

The Forex Reserve component(s) in decreasing⏬ order of size =
1) Foreign Currency Assets (includes foreign currencies & G-Sec/bonds of foreign Govts
2) Gold
3) Reserve Tranche Position (RTP) in the IMF. (What is RTP = NOT IMP)
4) Special Drawing Rights (SDRs)
Total Forex reserves of India =~480 million USD (2020-April).
What is the scene after Corona? Ans. Wait for ES2021.
30.9.9 (⛽️🎖>🗃🤲)⚠️ Disequilibrium in BoP: Factors responsible
#JUST2BSAFE if some theory MCQ.
When Credit (Receipt, income money) = Debit (Payment, outgoing money) then BoP will be
ZERO. If, not then BoP is in disequilibrium. This can happen because of:
 Development disequilibrium (विकास का असंतुलन): poor nations have to import more
grains, medicines etc. = adverse BoP.
 Secular or Long-term Disequilibrium (दीर्ग अिवध तक रहने िाला): newborn nation is usually
poor & backward so imports >> Export. E.g. Nehru’s India until it matured in the 90s.
 Consumerism and Demonstration Effect: Rich Indians try to copy westernized
lifestyles. So, ⬆import of Switzerland wristwatches+Sports Cars = adverse BoP.
(उपभोक्तािाद, कदखािा करने की चाह → ज्यादा आयात के चलते भुगतान संतुलन खराब होता है)
 Structural Disequilibrium =if transport, electricity infrastructure is poor or
Technological Backwardness = exports can’t improve. (संरचनात्िक और तकनीकी)
 Cyclical Disequilibrium (चक्रीय असंतुलन): When two countries may be passing through
different phases of business cycle (Boom, slowdown...तेजी और िंदी का चक्र) , so there will
be mismatch in imports, exports, FDI etc.
31 💱 CURRENCY EXCHANGE RATE: मुद्रा विनिमय दर
In the full course, we had studied exchange rate regimes-

fixed|floating| managed float, currency manipulation, convertibility
etc. उसके बाद, आजकल नया क्या चल रहा है?
31.2.1 💸💰Currency Exchange Rate → Attracting Dollars: VRR and FAR

To prevent weakening of ₹, we’ve to attract more $ (and other foreign currencies) in
India. So, RBI taken following notable measures:
Voluntary  Launched in 2019: If an FPI buys Indian Union/State

Retention Route Governments’ G-Sec and Indian Corporates’ Bonds through this
(VRR: : स्िैवछछक route → FPI will be given more freedom in certain technical
अिधारण िागग) regulations of RBI & SEBI.
 But, with condition= FPI must remain invested in India for
minimum 3 years. (HotMoney िाला गेि खेल के भाग नही सकते)
 RBI decides quantitative limits to how much money can FPI
invest through this route.
Fully Accessible  Budget-2020 had announced allowing non-resident investors
Route (FAR: to invest in G-Sec, without any restrictions.
सम्पूणत
ग : सुगम्य िागग)  2020-March: RBI announced this window, non-resident individual
investors (who’re not FPI) can buy G-Sec.
 No limits on amount of investment.
Benefit? Investors will convert $ & other foreign currency into ₹ currency to buy G-Sec=
more $$ coming towards India = helps keeping BoP and currency exchange rate stable
during crisis.
Side note: RBI frequently ⏫ / ⏬ in FPI investment quota/limits in G-sec, depending on
how RBI wants to shape bond-yield, flow of dollars & available quota of G-sec for local
investors to play its repo & OMO games. But that ball by ball chase is NOTIMP.
31.2.2 🤧😷 💱 Currency Exchange Rate in Corona-Crisis

1. 2020-Feb: CoronaVirus Force Majeure = SENSEX⬇ so FPIs Selling shares from Indian
companies= they got ₹₹ → converting them into $ → running back to USA to invest in
(AAA rated) US treasury bonds which is safest investment. So there is a great shortage
of dollars in the Indian market. If RBI does not supply dollars → further weakening of
rupee ($1=₹75 → ₹80). Therefore...
2. 2020-March: RBI starts Dollars Swap with Indian banks. i.e. A bank shall buy US Dollars
from the Reserve Bank and simultaneously agree to sell the same amount of US Dollars
at the end of the swap period (6 months). It is done through auctioning, so, RBI to earn
some % of profit. How it works NOT IMP.
3. Corona: Dollar updown movements, RBI signing more swap agreements, Indian
Government borrowing more $$ from ADB, BRICS Bank etc. overall trend/picture =
better to wait for ES21
❓MCQ. (Pre19-SetA) Q65. In the context of India, which of the following factors
is/are contributor/contributors to reducing the risk of a currency crisis?
1. The foreign currency earnings of India’s IT sector.
2. Increasing the government expenditure.
3. Remittances from Indians abroad.
Answer Codes: (a) 1 only (b) 1 and 3 only (c) 2 only (d) 1,2 and 3 only
❓MCQ. (Pre19-SetA) Q86. Which one of the following is not the most likely measure
the Government/RBI takes to stop the slide of Indian rupee?
(a) Curbing imports of non-essential goods and promoting exports
(b) Encouraging Indian borrowers to issue rupee denominated Masala bonds
(c) Easing conditions relating to external commercial borrowing
(d) Following an expansionary monetary policy
31.2.3 💱 Exchange Rate → Misc. → Purchasing Power Parity (PPP)
 क्रय/ खरीद शवक्त सिता: Hypothetical concept that tries to compare two currencies’
exchange rate through their purchasing power in respective countries.
 So, If 1 cup of coffee in India = ₹ 20 whereas 1 cup of coffee costs $2 in USA then
Dollar to Rupee exchange rate (PPP) should be $1 = ₹ 10. (According to OECD, exact
figure is $1=₹ 17@PPP).
 This (hypothetical) exchange rate can happen in real life, if both the countries have
Floating Exchange Rate without any intervention of the respective Central banks; and
if the bilateral trade is free of protectionism (= without tariff or non-tariff barriers).
 Gross Domestic Product (GDP: सकल र्रे लू उत्पाद) is the total market value of all goods
and services produced in a country within a year.
 When we convert these GDP values from local currencies into PPP $ exchange rates,
the largest economies of the world (GDP, PPP wise) are 1) USA 2) China 3) India 4)
Japan 5) Germany.
❓MCQ. Find correct statement(s) (Pre19-SetA Q82)
1. Purchasing Power Parity (PPP) exchange rates are calculated by the prices of the same
basket of goods and services in different countries.
2. In terms of PPP dollars, India is the sixth largest economy in the world.
Codes: (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
32🌐🛒👨‍⚖‍PILLAR #3B: INTERNATIONAL ORG

32.2 🌐🗡👨‍⚖‍BRETTON WOODS → IMF, WASHINGTON, 1945, DEC
 International Monetary Fund (IMF: अंतरागष्ट्रीय िुद्रा कोष) helps in global currency exchange
stability, helps against balance of payment crisis.
 IMF important decisions need to be passed with 85% majority. USA has 16.52% voting
power so it can effectively block/veto it.
 🔪😷 2020-May: IMF wanted to issue $500 billion FRESH Special Drawing Rights (SDR:
विशेष आहरण अवधकार) to help member countries combat the corona crisis. But USA
blocked it. India also supported the USA. India has 2.6% voting rights.
 IMF Managing Director?
o 2019: Christine Lagarde (France) resigned to become Managing Director (MD) of
European Central Bank (ECB, HQ Frankfurt, Germany). Then,
o Kristalina Georgieva (Bulgarian economist, previously CEO of the World Bank)
becomes the second woman IMF MD after Christine Lagarde. Her five-year term
starts on October 1, 2019.
o IMF’ Chief Economist (CE)? Gita Gopinath, an Indian-American economist, she
became the first woman to be the Chief Economist of IMF (2019-Jan).
Previously Raghuram Rajan has also served in this position.
32.2.1 🌐🗡👨‍⚖‍🛐IMF gives loan to Pakistan (2019)

2019-July: IMF approved $6 billion loan to Pakistan. It’ll be released in tranches
(=instalments/ककश्तों िें) over the next three-years depending on the conditional reforms
taken by Pakistan’s Government, which includes:
 Pakistan will have to comply with Financial Action Task Force (FATF) norms against
anti-money laundering and terror financing → so, if Pak gets added in FATF-blacklist,
then Pak’s IMF loan release may get stopped. (धन शोधन, आतंकी वित्तपोषण)
 Fiscal Deficit and Primary deficit must be controlled to x% of GDP → indirectly, Pak
will be forced to cut down on its Defence Expenditure (& ISI funding to terrorists).
 Pak Govt will have to ⏬subsidy on gas & electricity → hardship for Pakistani people/
 Loss making PSUs like Pakistan Steel Mills, Pakistan International Airlines and Pakistan
Railways etc. have to A) become profit making OR B) be Privatized OR C) be Shutdown.
(र्ाटे िें चल रहे सािगजवनक क्षेि के वनगिों िें सुधार) And so on…
32.3 🌐🗡👨‍⚖‍ (NON-BRETTON WOODS) → MULTILATERAL DEVELOPMENT BANKS

Multilateral BRICS Bank AIIB: Asian Infrastructure Investment
Development New Development Bank (NDB) Bank
Banks नई विकास बेंक एशशयाई अिसंिचना ननिेश बैंक
Started in 6th BRICS Summit in Fortaleza 2015-16
(2014) members signed treaty
Members Brazil, Russia, India, China China, India, UK, Switzerland, >100
South Africa nations as of 2020.
Voting power Each member is given equal 20%  Based on share capital provided.
voting power. As per the  Asian countries control about 75%
original agreement: All member voting.
countries of the United Nations  China largest ~27%, India second
can become members of the largest shareholding~7%.
bank, but BRICS nations' voting  India is the largest borrower.
power can never be less than
55%.
HQ Shanghai, China Beijing, China
🔪😷 Corona $1 billion. (2020-Apr) $750 million (2020-June)
loan2India
🔠❓MCQ. (Pre19-SetA Q71). Find correct statement(s) about AIIB:
1. AIIB has more than 80 member nations.
2. India is the largest shareholder in AIIB.
3. AIIB does not have any members from outside Asia.
Codes: (a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3 only
32.4 🌐🛒 THEORIES OF INTERNATIONAL TRADE
After looking at the new trend of microeconomics MCQs in UPSC’s

recent IES/CDS exams. Let’s prepare a few concepts #JUST2BSAFE
32.4.1 Mercantilist Theory: व्यापारी सिद्ािंत

- From the 16th to 18th century, economists believed in mercantilism i.e. The amount
of wealth in the world is static.
- A nation's wealth and power were best served by increasing exports and receiving
payments in gold, silver and precious metals.
- Therefore, any import was seen as loss of nation’s wealth in gold payment.
- So, colonial powers tried to flood their colonies with readymade goods but always
prevented entry of goods in their home country.
32.4.2 Adam Smith’s Theory of Absolute Cost Advantage (1776)

Output per one laborer 👨‍🔧→ India 🦁 China 🐼
Wheat 🌽 30kg 🌽 🌽 10kg 🌽
Output per one laborer 👨‍🔧→ India 🦁 China 🐼
Rice 🍚 10kg 🍚 15kg 🍚 🍚
 India has an absolute cost advantage over China in wheat production. (संपूणग लागत लाभ)
 So, India should focus on producing more wheat, and import rice from China. India
should not try to be a ‘rice production specialist’.
 Adam Smith’s theory assumes 1) there are no production costs except labourers 2) no
transport cost 3) there is free trade (no taxes on import exports)
32.4.3 David Ricardo’s Theory of Comparative/Relative Cost Advantage (1817)

तुलनात्िक लाभ वसद्ांत
How many workers required to produce → 1-meter textile 🧣 1 bottle of wine 🥂

France 10 workers 👨‍🔧 👨‍🔧 12 workers 👨‍🔧 👨‍🔧
England 9 workers 👨‍🔧 8 workers 👨‍🔧
 Here, we can see England requires less workers than France to produce wine and
textiles. So, as per Adam Smith’s absolute cost advantage, England should not import
anything from France!
 But, if plotted on graphs, it’ll appear that for England per unit labour cost to produce
1 meter textile is (relatively) cheaper than 1 bottle of wine.
 इं गलेंड के वलए कपड़ा बनाना, शराब बनाने से तुलनात्िक रूपसे सस्ता है।
 So, England should shift domestic English wine workers towards textiles. England
should export textile to France and import wine from France. England should not try to
become a ‘Wine production specialist’.
32.4.4 Heckscher and Ohlin’s Factor - Proporations Theory (1919)

 Capital-abundant country will export the capital –intensive goods. E.g. USA’s Boeing
company exporting Jet planes. क्योंकक वििान बनाने िें िजदूर कि और पूंजी ज्यादा चावहए. अिेररका
के पास िजदूर कि और पूंजी विपुल िािा िें है
 Labour-Abundant Country will export labour-intensive goods. E.g. India exporting
cotton (and imports jet planes from USA). क्योंकक कपास के उत्पादन िें पूंजी कि और िजदूर ज्यादा
चावहए, भारत के पास िजदूर विपुल िािा िें है.
33 🌐🛒👨‍⚖‍ WORLD TRADE ORGANIZATION: विश्व व्यापार संगठन
33.2.1 🤝 👨🏻‍⚖‍ Kazakhstan Summit #cancelled (2020-June)

✓ Ministerial Conference (िंिी सम्िेलन) Usually meets once every two years, deliberates
on trade agreements.
✓ 🤧😷 2020-June: WTO ministerial conference was to held at Kazakhstan’s Astana
(new name of this city: Nur-Sultan) But, cancelled by Corona.
33.2.2 🌐🛒🚫: Tariff Barriers against international trade: Dumping
 If China exports goods to India at a price below their normal price in domestic Chinese
market or at a price below their cost of production- then it is termed as “Dumping”
 Commerce Ministry → DG foreign trade (DGFT) launched ‘ARTIS’ portal (Application
for Remedies in Trade for Indian industry and other Stakeholders). Applicants can file
complaints against dumping.
 Budget-2020: Purified Terephthalic Acid (PTA) is used in manufacturing (synthetic)
textile fibres and yarns. Cheap PTA = boost to Indian textile sector, so we’ll no longer
charge Anti-dumping duty on it.
33.3 🌐🛒⚔️🧔 WTO DISPUTES : INDIA’S EXPORT INCENTIVE SCHEMES

 2018: USA complained to the WTO's Dispute Settlement Body (DSB: वििाद वनपटान वनकाय)
that India is running various export incentive schemes such as:
o Merchandise Export from India Scheme (MEIS: भारत से व्यापाररक वनयागत के वलए
योजना),
o Export Oriented Units (EOU: वनयागतोन्िुख इकाइयााँ),
o Electronics Hardware Technology Parks (EHTP),
o Special Economic Zone (SEZ: विशेष आर्थगक क्षेि)
o Export Promotion Capital Goods (EPCG: वनयागत संिधगन के वलए पूंजीगत िाल).
 Under above schemes India gives tax reliefs / subsidies to its exporters. So, it is
creating tariffs and non-tariff barriers against American companies, & thus India is
violating the WTO Agreement on Subsidies and Countervailing Measures (SCM: सवब्सडी
और प्रवतकार उपायों पर सिझौता).
 India’s position is “We’ll phase out these schemes after 8 years from 2017 (=2025).
Since we are a developing country, we should be given such relaxed deadline under
SCM agreement.”
 2019-Oct: WTO’s Dispute Settlement Body (DSB) ordered in favour of USA and ordered
India to stop such schemes within the next 90-180 days.
 2019-Nov: India goes to WTO Appellate Body (अपीलीय वनकाय) to undo DSB’s order.
 WTO Appellate Body members are appointed by the WTO members by consensus, (i.e.
no member-nation should formally object to candidate’s name). USA is presently
opposing appointment of new members in Appellate Body. So, body is under-staffed/
dysfunctional.
 2020-Mar: Indian Commerce Minister says, “we will not implement WTO's dispute
panel orders, because the appellate body is not functioning so our appeal is pending.”
🔠❓MCQ. Which of the following are the main functions of WTO? (UPSC-IES-2020)
1. To organize meetings of member countries to arrive at trade agreements covering
international trade.
2. To ensure that member countries conduct trade practices as per agreements agreed
upon and signed by the member countries.
3. To provide a platform to negotiate and settle disputes related to international trade
between and among member countries.
codes: (a) 1 and 2 only (b) 1 and 3 only (c) 2 and 3 only (d) 1, 2 and 3
33.4 🛒⛷📝FREE TRADE AGREEMENTS → TPP11, RCEP
33.4.1 🛒⛷📝 TPP-11 or CPTPP
 While USA-led TPP could not materialize, but some of the nations in Pacific region
separately worked out a ‘Comprehensive and Progressive Agreement for Trans-
Pacific Partnership’ (CPTPP or commonly called TPP-11) in 2018-Dec.
 Presently, it has 11 signatories: Australia, Brunei, Canada, Chile, Japan, Malaysia,
Mexico, New Zealand, Peru, Singapore, and Vietnam.
33.4.2 🛒⛷📝 Trade agreements → USMCA & AFCFTA

NAFTA  North American Free Trade Agreement; उत्तरी अिेररका वनशुल्क व्यापार सिझौता
1994 (1994) involves Canada, USA and Mexico.
USMCA  However, Trump felt NAFTA harms the American interests → 2018: He made
2018 a deal with Mexico and Canada to replace NAFTA with a new agreement
called United States-Mexico-Canada-Agreement (USMCA).
AFCFTA  2019: African Union (AU) members have signed the African Continental Free
Trade Agreement (AfCFTA). It’s world’s largest FTA covering 54 nations.
33.5 🛒⛷📝 REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP (RCEP)
33.5.1 ✍🏻 Introduction to RCEP:

 RCEP (व्यापक आर्थगक भागीदारी का क्षेिीय सिझौता) is a proposed free-trade agreement (िुक्त
व्यापार सिझौता) between the 10 ASEAN countries and their six Free-Trade Agreements
partners viz. Australia, China, India, Japan, New Zealand and S. Korea.
 Collectively, these countries command 25% of global GDP, 30% of global trade.
 RCEP requires them to reduce the tariff and non-tariff barriers against each other,
encourage investments, economic and technical cooperation, protect Intellectual
Property Rights (IPR: बौवद्क संपदा अवधकार) etc.
 This will boost trade, economic growth and employment in each of these countries,
33.5.2 🧔🤚✍️ RCEP: Why didn't India join in 2019-Nov?

India already has over $100 billion trade deficit (व्यापार घाटा) with RCEP countries. Out of
this, China alone accounts for $54 billion trade deficit. So India had following
apprehensions about this agreement.
1) China: RCEP will result in increased flow of (Cheap) Chinese manufactured &
electronic goods → Indian MSME, automobile, steel industries harmed → So, India
wanted separate levels of customs duty against Chinese imports.
2) Dairy: India is among the largest producers of milk but our specialty is mostly in
the liquid products whereas New Zealand is renowned for its solid products (milk
powder, butter, cheese etc.) These solid dairy products have a longer shelf-life &
easier to transport over long-distance. So if trade-barriers removed, India will be
flooded with cheap dairy products → Indian farmers & dairy entrepreneurs will suffer.
3) Agriculture: Southern India’s plantation farmers afraid of cheaper tea, coffee,
rubber, cardamom and pepper from Malaysia, Indonesia & other RCEP nations.
4) So, India wanted an Automatic Trigger Safeguard Mechanism (ATSM: स्िचावलत
रिगर का सुरक्षा तंि) to protect itself from surge in imports. (e.g. raise customs duty by
“X%” on imported products from “y” country if “z” situation occurs).
5) Ratchet Obligation (रै चेट दावयत्ि): It means a nation can not go back/undo its
commitments under the RCEP agreement. India wants certain exemptions here.
6) Base Year for tax cuts (करो िें कटौती के वलए आधार िषग): India wants base year
for tax-cuts fixed at 2019 instead of 2014. Because since 2014, India has raised
customs duties on over 3,500 products.
7) Data localisation (डेटा स्थानीयकरण): India wants all RCEP countries to have the rights
to protect data & prohibit cross-border data flow (सीिापार डेटा प्रिाह पर रोक) in the
national interest. For this reason, India even refused to sign G20 Osaka declaration on
cross-border data flow.
2019-Nov: RCEP summit at Bangkok, Thailand. Here, Indian demands were not agreeable
to the majority of other members. So, India announced not to join the RCEP Agreement.
India also had 500 जात के other objections but the maximum utility of RCEP topic is 250 words in
the mains exam. For that, we have gathered sufficient points. Further PHD useless.
33.5.3 🤷‍♂‍ RCEP: Counterview: India made a mistake by not joining

1) Competition brings excellence. Unless the Indian industrialists are subjected to the
competition from Asian giants, they will not invest further in the R&D, product
upgradation, customer service & customer satisfaction. श्रेष्ठता के वलए स्पधाग जरूरी
2) If India doesn’t join RCEP, our products will not be able to compete in those nations
because of the higher taxes on Indian exports viz a viz other RCEP exports.
3) Indian manufacturers could import intermediate goods from RCEP countries at cheaper
price → process them further → re-export towards Middle East, Africa and
European. Thus, RCEP could have provided the perfect opportunity for India to become
integrated with the global value chain (िैवश्वक िूल्यिधगन श्रृंखला).
4) World Bank’s “A Glass Half Full: The Promise of Regional Trade in South Asia” report
(2019) estimates India’s potential trade in goods with South Asia at more than 60
billion, but at present the actual trade is less than $20 billion- due to tariff barriers
and connectivity issues. Hence, RCEP is necessary for boosting India’s exports.
5) RCEP was still ‘less strict’ in comparison of India’s ongoing FTA negotiations with the
USA or EU. It was a low-hanging fruit, we should have signed it.
6) India will have to eventually shed-off its ‘big but poor’ mentality ('बड़े लेककन गरीब'
िानवसकता). International agreements always require some bargaining / give and take.
33.5.4 ✍🏻 RCEP: Conclusion?
 While it is true that India could have gained in certain export-sectors by signing RCEP
Agreement, but its present format did not fully address India's issues and concerns
regarding the protection of the domestic industry. हालांकक भारत को कु छ वनयागत क्षेिों िें फायदा
हो सकता था, लेककन ितगिान प्रारूप ने र्रे लू उद्योग की सुरक्षा के संबंध िें भारत के िुद्दों और चचंताओं को पूरी
तरह से संबोवधत नहीं ककया
 So we’ve opted not to sign it. The remaining member-nations have planned to sign the
RCEP agreement in 2020 and they are trying to convince India to get onboard.
 India has not permanently shut the doors for negotiation. In future we may sign it, if
our concerns are addressed. स्थायी रूप से दरिाजे बंद नहीं ककए हैं। यकद हिारी चचंताओं पर ध्यान
कदया जाए तो भविष्य िें हि इस पर हस्ताक्षर कर सकते हैं।
33.5.5 💼Budget-2020: FTA ‘rules of origin’ (उत्पप्रि के नियम)

- 1998: India - Sri Lanka FTA. So ink manufactured in SriLanka = 0% Indian customs duty
when imported in India.
- But sometimes Chinese company manufacture ink bottles in China, transports to its Sri
Lankan company → Sri Lanka’s (phoney/namesake) company pastes a label “this
bottle manufactured in Sri-Lanka” → sell them in India @0% customs duty?
- So, FTA agreements contain 'rules of origin'. Which requires that minimum x%
manufacturing/processing/value addition must be done in originating country (SriLanka
in our example) before it’s eligible for 0% customs duty.
- Originating country (Srilanka) cannot dump goods from some third country (China) in
the Indian market by just putting a label on it. (ताकक, उदगि/ वनयागत करता देश ककसी तीसरे
देश की िस्तुओ पर अपना लेबल वचपका के भारत िें कर-िुवक्त के साथ न बेच सके .)
❓How many member states are there in CARICOM, a grouping of Caribbean nations?
(UPSC-Geologist-2020) a. 10 b. 12 c. 15 d. 18
<While the answer is 15 but poor cost:benefit chasing such KBC GK. Better to skip>
33.5.6 🛒⛷📝India’s trade agreements

Homework: Refer Economic Survey 2019-20 Vol2 ch.3: Annexure-II= table is given, focus on
participants, & whether trade agreement ‘concluded’ or at ‘negotiation stage’.
33.6 🌐🛒🤼‍♀‍ BURNING ISSUES IN INTERNATIONAL TRADE
33.6.1 🌐🛒🤼‍♀‍Protectionism, Trade war: संिक्षणिाद, व्यापाि युद्ध

- Protectionism means the use of tariff and non tariff barriers to protect the local
industry against foreign competition.
- Trade war happens when two / more nations attack each other's exports through tariff
and non tariff barriers.
33.6.2 👻🌐🛒🤼‍♀‍: 🔫💊Protectionism → Medicine and Defence
- Hydroxychloroquine: anti-malarial drug, could be used in the COVID-19 treatment.
Earlier India had imposed a ban on its export to ensure supply for the Indian patients.
But 2020-june: India lifted the ban for 1) export earning 2) 1) soft-diplomacy: winning
support of its friendly nations. (नरि कू टनीवत)
- 2020-Aug: Defense ministry has put 101 defense items in negative import list (आयात
प्रवतबंध सूची) i.e. they will be purchased from local manufacturers. They'll not be
imported e.g. Multi barrel rocket launchers, assault rifles, radars. Benefit? Local
industry will get contracts worth ₹4 Lcr. → Make in India, Atma-Nirbhar, ⏬CAD.
33.6.3 👻🌐🛒🤼‍♀‍: 🛒🧔 Protectionism → Indian Govt procurement (िरकारी खरीद)

 Atma-Nirbhar: PM asked the nation to be "local ke liye vocal" (to promote local goods)
with an aim to make India self-sufficient in every way.
 So, in Government procurement tenders up to ₹200 crore. → Foreign (global)
companies will not be allowed to apply. (सरकारी खरीद के 200 करोड़ तक के टेंडर िे विदेशी
कं पवनयों को अजी डालने पर प्रवतबंध, ताकक स्थावनक सूक्ष्ि, लर्ु और िध्यि उद्यि को वबक्री का अिसर विले)
 This will help Indian Micro, Small & Medium Enterprises (MSME) and large Indian
companies to revive business through ⏫purchase from the Government.
 Sidenote: In an excessive and unplanned enthusiasm, Home Minister Amit Shah
ordered Central Armed Police Force (CAPF) canteens not to sell any “imported” items.
But, many Indian companies were also kept on the banned list because of
miscommunication or haste in preparing the list. So, the order has been withdrawn.
33.6.4 🌐🛒🤼‍♀‍🎃USA’s Generalized System of Preferences (GSP) list

यूएसए की प्राथविकताओं की सािान्यीकृ त प्रणाली सूवच
- If a developing country’s name is in this list, its exports will be subjected to

zero/lower import duties in USA (for selected products only).
- 2019: Trump removed India from GSP list, citing India has imposed heavy import duties
on Harley Davidson bikes and other American exports.
- As such most of the Indian exported goods to USA are not in the GSP list in the first
place, so this blacklisting will not harm India much, albeit, Indian textile companies
are worried that GSP-removal will make Indian garments more expensive in USA.
Related term: Global System of Trade Preferences among Developing Countries (GSTP:
विकासशील देशों के बीच व्यापार व्यिस्था की िैवश्वक प्रणाली) is a trade agreement among developing
countries and LDC signed under the aegis of United Nations Conference on Trade and
Development (UNCTAD: व्यापार और विकास पर संयुक्त राष्ट्र सम्िेलन) in 1988. It aims to reduces the
trade barrier among themselves. India is a member.
33.6.5 ⚖️🎃USA Reciprocal Trade Bill/Act (पारथपररक व्यापार प्रव्ेयक / अध्नियम)

 2019: United States Reciprocal Trade Bill was introduced in the American parliament
(=US congress)
 IF the partner nation has imposed a high level of tariff/non-tariff barriers on American
products, then
o US President can unilaterally ⏫ the taxes on imported products of that trading
country. आयात होने िाली चीजों पर राष्ट्रपवत कराधान बढा सकते हैं
o US President can even 'undo' his commitment from the free trade agreements
with that country. पुराने िचनों से िुकर सकते हैं
 If the Intellectual Property Rights (IPR: बौवद्क संपदा अवधकार) of American products are
not respected/enforced in a country → US President can ⏫ taxes on imported
products from that country. +500 other things but poor cost benefit in chasing it.
33.6.6 🧔🤝🎃 India-USA limited trade deal (िीसमत व्यापार िौदा)
 2020-Jul: India USA are negotiating for a 'limited trade deal' i.e. only for selected
commodities taxes may be ⏬. Basically, they're looking for following
 India should ⏬ taxes on American farm & dairy products, pharmaceuticals,
electronics etc
 USA should ⏬ taxes on Indian steel & Aluminium etc, and USA should restore India's
name in the Generalized System of Preferences (GSP).
33.7 🌐🤝🦁🐘GROUPINGS: INDIAN SUBCONTINENT → SAARC

- South Asian Association for Regional Cooperation दवक्षण एवशयाई क्षेिीय सहयोग संर्
- 🤧😷 2020-March: SAARC leaders organized video conference to fight Corona.
- India proposed creation of a COVID-19 emergency (आपातकालीन वनवध) fund &
contributed $10 million in it.
33.8 🌐🤝🤵GROUPINGS LED BY GORA → G20 (GROUP OF 20)

- International forum for the governments and central bank governors from 19 countries
and the 1 European Union namely,Argentina, Australia, Brazil, Canada, China, France,
Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi
Arabia, South Africa, Turkey, UK, USA, EU
- Annual summits: 2018@Buenos Aires-Argentina, 2019@Osaka-Japan, 2020-Nov@Saudi
Arabia’sRiyadh, 2021@Italy’s Rome,2022@Delhi.
33.9 📝📡⛷ G20: OSAKA DECLARATION
2019-June: G20 summit @Osaka, Japan. Its declaration announced following points:
− We endorse the G20 Fukuoka Policy Priorities on Aging society’s Financial Inclusion.
(बुजुगों का वित्तीय सिािेशन)
− We affirm our support to G20/OECD Base Erosion and Profit Shifting (BEPS: कर बचाने के
वलए िुनाफे का स्थानांतरण) Agreement;
− Financial Action Task Force (FATF, HQ: Paris, France) regulations against money
laundering, terrorist financing. No safe haven be given to any economic offenders. (धन
शोधन और आतंकी वित्तपोषण)
− We will work together to foster global economic growth using technological innovation,
esp. Digitalization. (तकनीकी निाचार,करके िैवश्वक आर्थगक विकास को बढािा देना।)
− Cross-border flow of data, information, ideas and knowledge generates higher
productivity, greater innovation, and improved sustainable development. So, we’ll
encourage free flow of data to harness the opportunities of the digital economy.
− There should not be any restriction on companies from storing personal information, in
foreign servers. Japanese PM Shinzo Abe called this initiative ‘Data Free Flow with
Trust’ (DFFT: विश्वास के साथ डाटा का सीिापार िुक्त प्रिाह).
− ++ lot of lip service on corruption, Labour and Employment, Women’s Empowerment
− Tourism, Agriculture, Global Health & Environmental Issues
Next summits: Saudi Arabia in 2020, in Italy in 2021 and in India in 2022 (it is also India’s
75th anniversary of independence.
33.9.1 📝📡⛷🚫🖋Osaka declaration: why India refused to sign

India, South Africa and Indonesia remained absent when G20 members formally signed
Osaka declaration BECAUSE:
1. India believes that all of the countries must individually manage data. Otherwise MNCs
will use data for their commercial benefits, harming privacy of citizens and sovereign
interests of the States. (e.g. Huawei mobiles’ send their data to China, they may be
hacked by Government-sponsored hackers to spy on India.) व्यापाररक फायदे के वलए जनता के
डाटा की चोरी, धांधली, वनजता का हनन होगा.
2. Such free flow of data may be misused for influencing public opinion through
targeted advertisements and articles on social media. (e.g. The alleged Russian hand
in Trump's election.) जनित को प्रभावित करने के वलए दुरुपयोग
3. Data is a new form of wealth. So, this entire matter should be discussed within WTO
and not outside of it. विश्व व्यापार संगठन के िंच पर इसकी चचाग करो
✍️Conclusion:
 While India understands and appreciates the role of ICT in economic development and
good governance. सूचना प्रौद्योवगकी का आर्थगक विकास और सुशासन िें िहत्ि भारत सिझता है
 The issue of data flow requires a wider global cooperation without undermining an
individual’s privacy or a State’s sovereign interests. व्यवक्तगत वनजता, राष्ट्रों के संप्रभु वहत
 Considering these facets, India has refused to sign the Osaka declaration on cross
border data flow (उक्त पहलुओं को देखते हुए सीिापार डाटा प्रिाह संवध पर हस्ताक्षर नहीं ककया).
33.10 🌐🤝🤵GROUPINGS LED BY GORA → G7 AND D10
33.10.1 🌐🤝G7 - Group of Seven (1975)

 seven major developed countries: Canada, France, Germany, Italy, Japan, USA, UK.
 1997: Russia was added so it became G8 but then Russia annexed Crimea region of
Ukraine to Russia was Expelled from this group so again it became G7 in 2014.
 2019: Summit @Biarritz, France. India was also invited to attend.
 2020: Summit was to be held @USA. But postponed due to Corona.
o Trump proposed Australia, India, South Korea, Russia etc should also be invited
at G7. Although the UK hates the idea of inviting Russia back. But, ball-by-ball
notIMP.
o Newspaper Columnists have gone crazier than usual, suggesting expansion of
membership to G10 / G11 by adding above countries as new members.
33.10.2 🌐🤝📲 D10: 5G club proposed by UK (2020)

 UK proposed “D10” club of democratic partners including
o G7 countries — UK, US, Italy, Germany, France, Japan and Canada
o + 3 more plus Australia, South Korea and India
 Objective: create supply chain for 5G equipment and technologies. To avoid relying on
China/ Huawei- for data security and data privacy. (5G उपकरण और प्रौद्योवगककयों के वलए
आपूर्तग श्रृंखला= चीनी कं पवनयों द्वारा डाटा चोरी का खतरा कि हो)
33.10.3 💂🏼👋🏼BREXIT = BRITAIN EXIT
- 2016: Britain held a referendum (जनितसंग्रह) & asked its citizens “whether the Britain
should EXIT or remain in the European Union?” 52% voted yes, 48% voted no.
- 2020-Jan-31st: United Kingdom has officially left the European Union. However in
reality, till 31st December 2020, UK is under "Transition Period / Implementation
Period (कायागन्ियन अिवध)" During this transition time, most of the things will remain the
same as before e.g. visa-travel/driving license etc.
- But, gradually 'divorce' will be implemented in phasewise manner. (धीरे -धीरे
चरणबद्/क्रविक रूप से ररश्ता खत्ि ककया जाएगा)
- 🤧😷2020-May: EU announced 750 billion euro (=826 billion$) economic stimulus
package. Basically, the EU will borrow money from the market → give it to Member
states in the form of loans and grants for reviving their economy. How?NOTIMP.
33.11 🌐🤝☪️GROUPINGS / ISSUES: MIDDLE EAST
In full course, we had studied GCC and OIC. और क्या चल रहा है आजकल?
33.12 🤧 ⛴✈️ VANDE BHARAT MISSION 2020- INDIANS KI WATAN-WAAPSI

 Boss? Ministry of Civil Aviation is coordinating with Ministry of External Affairs and
state Govts ( नागररक उड्डयन विदेश िंिालय )
 for bringing Indians back Indians who’re stuck overseas during Corona.
 It’s considered to be India’s largest repatriation (प्रत्याितगन/ ितन िापसी) operation since
the 1990’s Gulf/Kuwait war. [But UPSC doesn’t usually engage in superlatives-KBC-GK:
biggest/largest/longest...so not really important whether it was bigger than Gulf
rescue.#थोड़ा-पढो-आगे-बढो ]
 Separately, to provide skill/employment for these returned-Indians, Government also
launched SWADES (Skilled Workers Arrival Database for Employment Support) but all
skill schemes under Pillar6: HRD.
Figure 2: Akshay may need ‘Airlift’, but ‘Bhai’ doesn’t need Vande Bharat Mission. since he’s capable of 1)
becoming Captain of a ship 2) Rescuing kidnapped Indian nurses 3) surviving oil-mine blast- all in Middle East
33.12.1 ⚖️☪️✋:👷‍♂‍👷‍♂‍Kuwait Expat Bill (प्रवदे शी मजदरू ों की ििंख्या ⏬ का प्रव्ेयक)

 Kuwait parliament working on an expatriates/ expat law' to ⏬the number of
foreigners in the country.
 India is worried because 1) this will reduce work-visa quotas for Indians. 2) Kuwait
contributes $4-5 billion dollar remittance to India, which may ⏬ If less number of
Indians are allowed to work in Kuwait. (प्रेवषत धन/पररजनों को भेजी गई रकि)
 But, experts believe this draft law will not be passed/implemented because 1) Local
population is not large to supply all laborers 2) locals are unwilling to do certain types
of labour. (उनको छोटे काि करना पसंद नहीं)
33.13 🌐🛒🔫 EXPORT CONTROL / NON-PROLIFERATION REGIMES
In full course, We had studied about NSG, Australia Group, MTCR,

Wassenaar Arrangement. और क्या चल रहा है आजकल?
33.13.1 🔫👋🎃USA Exit from Arms Treaties (शथर ििंध्)

1. 1987:Intermediate-Range Nuclear Forces (INF) treaty between USA-Russia during to
prohibit development of missiles with ranges between 500 and 5,500 km. 2019: USA
withdraws from it.
2. 1991: New Strategic Arms Reduction Treaty (New START) treaty between U.S. and
Russia for reducing nuclear weapons. 2021: Treaty will expire.
3. 1992: Open Skies Treaty (OST) signed between NATO and Warsaw Pact countries to
monitor/spy each other's territory through unarmed aeroplanes. 2020-May: USA wants
to withdraw from it.
4. Self-study: CTBT, NPT: NCERT Class12 Political Science ch4: India's external relations
other topics of IR annual summits, treaties etc. for prelims self-study from PDF/Mags.
33.13.2 🎺✍️ Mock Questions for Mains GSM2 & GSM3

Syllabus Topic: Important International institutions, agencies, for a (structure, mandate); Bilateral,
Regional, Global groupings & Agreements (involving and/or affecting India)
1. Why has India refused to sign the Osaka declaration-2019 on cross-border data flow?
(भारत ने सीिा पार डेटा प्रिाह पर ओसाका र्ोषणा-2019 पर हस्ताक्षर करने से इनकार क्यों कर कदया है?)
2. “Concerns for the domestic industry has prevented India from joining RCEP
agreement.” Comment. "र्रे लू उद्योगो की चचंता ने भारत को आरसीईपी सिझौते िें शाविल होने से रोक
कदया है।" रटप्पणी करे .
3. Is India’s decision to stay out of the RCEP agreement appropriate? Examine critically.
क्या आरसीईपी सिझौते से बाहर रहने का भारत का वनणगय उवचत है? गंभीररूप से सिीक्षा कीवजए.
MRUNAL’S ECONOMY BATCH PRELIMS AND MAINS 2021

 I’m also pleased to announce, my next ONLINE batch for Economy for UPSC CSE-2021
covering both Prelims and Mains topics of Economy.
 Registration Link: https://unacademy.com/@mrunal.org

Mrunal.Org/Download
40🌽 PILLAR4A: SECTORS OF ECONOMY → AGRICULTURE
Table of Contents
40 Pillar4A: Sectors of Economy → Agriculture ......................................... 90
40.2.1 [Yearbook-Info] Agro Ministry ............................................... 91
40.2.2 [Yearbook-Info] Ministry for Fisheries, Animal and Dairying ........ 92
40.2.3 Agri-Input → Seeds → Pepsi vs Potato Farmers ...................... 92
40.3 Agri-Input → Water (Irrigation: ).............................................. 92
40.3.1 [Yearbook] Water related Ministries and Departments .............. 92

40.3.2 Water Schemes → Jal Shakti Abhiyan (2019-July) ................... 93
40.3.3 Water Schemes → Jal Jeevan Mission (2019-Aug).................... 93
40.3.4 Water Schemes → ATAL Bhujal Yojana (=ATAL JAL) (2019-Dec)... 94
40.3.5 Agri-Input → Water → Composite Water Management Index ........... 94
40.4 Agri Inputs → Don’t use chemicals → PKVY (2015) ........................ 94
40.4.1 Zero Budget Natural Farming (ZBNF: ............. 94
40.4.2 Organic farming & ZBNF → Limitations? ( ) ................ 95
40.4.3 Conclusion: Organic farming / ZBNF.................................... 95

40.5 Agri-Selling → APMC (कृषिगत उत्पाद षिपणन समितत) ............................... 95
40.5.1 APMC Problems? ................................................................... 95

40.5.2 Model APMC Act? ................................................................... 96
40.6 Agro Ordinance#1 → APMC Ordinance 2020 ............................. 97
40.6.1 : Criticism for Agro-Ordinance#1: ..................... 98
40.6.2 : Conclusion /Pros: Agro-Ordinance#1: Appreciate ............. 98

40.7 Agro Ordinance#2 → Contract farming 2020-June ........... 99
40.7.1 : : Criticism & Conclusion for Agro-Ordinance#2:
100
40.8 : FCI’s Buffer Stock Problem ( ) ............................ 100
40.8.1 : FCI → Problems ............................................ 100

40.8.2 FCI → Solutions by ES20 ........................................ 100
Mrunal’s Economy Updates Win20CSP for Past Batches’ Students- Pillar#4A-Sectors: AGRO → Page 90
40.9 : Agri-Selling: Storage and Transport ............................... 101
40.10 Food Inflation due to Cobweb cycle ....................... 101
40.11 : Food Inflation → Essential Commodities Act ..................... 101
40.12 Agro Ordinance#3 → ECA Ordinance 2020 .................... 102
40.12.1 ECA Ordinance → Conclusion / ...................................... 102
40.12.2 ECA → N95 Masks and Sanitizers put under ECA .................... 103
40.13 Agriculture Production & Processing → Other Schemes .................. 103
40.13.1 Agriculture Infrastructure Fund (2020-Jul) ............ 103
40.13.2 Atma-Nirbhar: ”Op Green” expanded to all fruits & veggies 103
40.13.3 Atma-Nirbhar: Food Enterprises promotion ( .. 104
40.14 Sectors → Agro Allied: → Animal husbandry (पशुपालन) ..................... 104
40.14.1 Livestock Census ( ) ..................................... 104
40.14.2 Agro Allied: Animal husbandry → SCHEMES ............................ 105

40.14.3 : ES2019: Focus on Small Ruminants................................... 105
40.14.4 Atma-Nirbhar: Dairy cooperatives ( ......... 106
40.14.5 Agro Allied: Fisheries → Blue revolution (ित््य → नीली क्ाांतत) .......... 106
40.14.6 Pradhan Mantri Matsya Sampada Yojana (2020) ............... 106

40.14.7 Global Cooperation: Food and Agriculture Organisation (FAO)........ 107
40.14.8 Global Cooperation: Misc. → SAARC Food Bank (2007) ................ 107
40.14.9 Global Cooperation: Misc. → International Grains Council (London) 107
40.14.10 Mock Question for Mains ......................................................... 107
40.2.1 🕵🏼🌽 [Yearbook-Info] Agro Ministry

Ministry of Agriculture and Farmers Welfare is made up 2 departments and implements
National Policy for Farmers (2007)
Dept#1 Department of Agriculture, Cooperation and Farmers Welfare
Agro-itself - Statutory: Coconut Development Board, National Cooperative
Development Corporation, Protection of Plant Varieties and Farmers’
Rights Authority, Registrar of Multi State Cooperative Societies.
- Attached Office: National Rainfed Area Authority.
- CPSE: National Seeds Corporation Ltd. (NSC)
- Autonomous / Cooperative bodies: NAFED, Small Farmers
Agribusiness Consortium (SFAC). Various boards / institutes for
horticulture, plant health management, Agro marketing etc.
Dept#2: Department of Agricultural Research & Education
Agro - Autonomous body: Indian Council of Agricultural Research (ICAR:
Research भारतीय कृषि अनुसंधान पररिद)
Extension - Central Agro universities @Imphal (Manipur), Pusa (Bihar), Jhansi (UP)
* Hindi terms not given for most org. because above information is meant for MCQ only.
In the mains exam you may attribute all things to ‘
<insert English term/abbreviation>’.
40.2.2 🕵🏼🐮🦈 [Yearbook-Info] Ministry for Fisheries, Animal Husbandry and Dairying
This ministry was newly setup in 2019, with two departments
1. Dept of Fisheries (Matsyapalan Vibhag)

2. Dept of Animal Husbandry And Dairying (Pashupalan Aur Dairy Vibhag): →
Statutory: National Dairy Development Board (NDDB)
Previously above subjects were under the aegis of Agri ministry.
40.2.3 🌱🧬Agri-Input → Seeds → 🥔 Pepsi vs Potato Farmers
 1970’s Indian Patents Act (भारतीय पेटेंट अधिधियम) doesn’t give Patent to seeds / plant
varieties. But,
 2001’s Protection of Plant Varieties and Farmers' Rights Act (पौिों की ककस्मों और ककसािों के
अधिकारों का संरक्षण) grants Intellectual Property Rights (IPR: बौधिक संपदा अधिकार) to plant
breeders, researchers and farmers who have developed any new plant varieties
 Pepsi supplied FC5 potato hybrid variety to Indian farmers. It has a lower moisture
content (कम िमी) so suitable for making Pepsi-Lay’s potato chips. Later, contract
expired yet farmers continue to grow this variety (& selling to other chips makers).
 2019: Pepsi filed a complaint against Gujarat Farmers. Later, Pepsi withdrew the
complaint. (धिकायत वापस ले ली).
40.3 🌧☔️AGRI-INPUT → WATER (IRRIGATION: )
40.3.1 🕵️‍♂‍ 🌧☔️ [Yearbook] Water related Ministries and Departments
[Yearbook1] Min. of Water Resources, River Development & Ganga Rejuvenation

, consists of <list not exhaustive>
Dept N/A
Attached / - Central Water Commission (केंद्रीय जल आयोग)
subordinate
offices - Ganga Flood Control Commission
- Bansagar Control Board (Son River)
- Central Water and Power Research Station
- Central Soil and Materials Research Station
Statutory Bodies  Betwa River Board, Brahmaputra Board under respective Acts.
 Various water dispute tribunals (जल धववाद न्यायाधिकरण) under
Inter-State Water Disputes Act, 1956
 Under Environment Protection Act, 1986 →
 National Ganga River Basin Authority (NGRBA) → 2006
replaced by National Ganga Council chaired by PM
 Central Ground Water Authority (कें द्रीय भूजल प्राधिकरण)
PSU - Water and Power Consultancy Services Ltd (WAPCOS)
- National Projects construction Corporation Ltd.
Autonomous - National Institute of Hydrology
Bodies - Krishna River Management Board
- Godavari River Management Board
[Yearbook2] Ministry of Drinking Water And Sanitation: पेयजल और स्‍वच्‍छता मंत्रालय →
doesn’t have any MCQ worth Organizations.
[Yearbook3] Jal Shakti Ministry
2019-May: Government formed Jal Shakti Mantralaya by merging following ministries

1. Ministry of Water Resources, River Development and Ganga Rejuvenation (जल
संसािि, िदी धवकास और गंगा संरक्षण)
2. Ministry of Drinking Water and Sanitation (पेयजल और स्वच्छता)
Now Ministry#1 and Ministry#2 have been made ‘Departments ( under the Jal Shakti
Ministry.
40.3.2 🌧🧔📯 Water Schemes → Jal Shakti Abhiyan (2019-July)

- Boss? Jal Shakti Ministry’s 2 phase to conserve water.
- Phase1: from 1st July, 2019 to 15th September, 2019.
- Phase2: from 1st October, 2019 to 30th November, 2019 for States receiving the North
East retreating monsoons.
- They’ll focus on following areas to conserve water:
o Rainwater harvesting, Renovation of traditional water bodies/tanks, bore well
recharge structures, watershed development
o Water reuse, intensive afforestation.
40.3.3 🌧🧔📯 Water Schemes → Jal Jeevan Mission (2019-Aug)

- Boss? Jal Shakti Ministry
- Objective? Har Ghar Jal (piped water supply)
o To all rural households by 2024.
o To Cities with million+ population will be encouraged to achieve it in current
year (2020) itself.
- Focus on rainwater harvesting, groundwater recharge and using household wastewater
for reuse in agriculture. वर्ाा जल संचयि, भूजल पुिभारण और कृ धर् में पुि: उपयोग के धलए घरेलू
अपधिष्ट जल का उपयोग करिा।
- Previous scheme NRDWP scheme subsumed into this new scheme.
- Funding? Government aims to spend ₹ 3.60 lakh crores in this by converging with other
Central and State Government Schemes and using their funds. Further, if required, the
Government will also use additional funds available under the Compensatory
Afforestation Fund Management and Planning Authority (CAMPA) for this purpose.
40.3.4 🌧🧔📯 Water Schemes → ATAL Bhujal Yojana (=ATAL JAL) (2019-Dec)
− Boss? Jal Shakti Ministry. Funding: 50:50 by Union + World Bank.

− This scheme is not meant for entire India but only in the selected areas of selected 7
states facing extreme water shortages viz. Gujarat, Haryana, Karnataka, Madhya
Pradesh, Maharashtra, Rajasthan and Uttar Pradesh.
− Panchayat led ground water management and behavioral change (व्यवहार / वताि में
पररवताि). Better performing gram panchayats, will be given more funding allocation.
− Villagers formed into ‘Water User Associations’ → try to minimize water wastage,
build water assets, IEC etc.
− 2019-25th Dec: Modi formally launched this scheme on the 95th birth anniversary of
former prime minister Atal Bihari Vajpayee. Further, Rohtang Tunnel connecting
Manali, Himachal Pradesh with Leh, Ladakh and Jammu Kashmir, will now be known as
Atal Tunnel
SideNote: In 2014-15, PM Modi also announced Bharat Ratna for Atal B. Vajpayee, and
declared his b’day (25th Dec) to be celebrated as ‘Good Governance Day’
40.3.5 ☔️📈 Agri-Input → Water → Composite Water Management Index

 NITI Aayog’s समग्र जल प्रबंिि सूचकांक: Guidelines Version 1.0 in 2018, Version 2.0 in 2019.
 NITI divides India in: 1) non-Himalayan states 2) North-Eastern and Himalayan states,
3) Union Territories (UTs).
 NITI ranks them into nine themes and 28 indicators against the base year 2017-18.
40.4 🌽🚫☣️ AGRI INPUTS → DON’T USE CHEMICALS → PKVY (2015)
Here we had studied about Paramparagat Krishi Vikas Yojana (PKVY) to

promote organic farming. What new happened afterwards?
 Agro Ministry’s Jaivik Kheti webportal to help organic buyers and sellers connect with
each other.
 Agro Ministry’s Participatory Guarantee Scheme (PGS: ) for certification
of organic products. It assures the buyers the given fruit/vegetable/produce has
organic origin. ( )
40.4.1 🚫💼🚫☣️Zero Budget Natural Farming (ZBNF:

- 'Zero Budget' means without using any loan, and without spending any money on
purchase of inputs (seeds, fertilizers).
- 'Natural farming' means farming without chemicals. By using biofertilizers,
earthworms, cow dung etc. Associated keywords:
○ Jiwamrita’ (microbial culture) and ‘Bijamrita’ (seed treatment solution)
○ Biopesticides: ‘Agniastra’, ‘Brahmastra’ and ‘Neemastra’
○ Most of the above are made from Cow-urine.
○ ‘waaphasa’ (giving water outside the plant’s canopy),
- ZBNF saves farmers from debt-traps; and protects the environment, soil and
biodiversity. कजा के जाल; पयाावरण, धमट्टी और जैव धवधविता की रक्षा
- Practice first started in Karnataka by Subhash Palekar. Himachal Pradesh and Andhra
Pradesh are also frontrunners.
- (Full) Budget-2019 promised to expand ZBNF in other parts of India. Govt thinking of
launching it as a sub-scheme (उप-योजिा) under Paramparagat Krishi Vikas Yojana.
40.4.2 🚫☣️😢 Organic farming & ZBNF → Limitations? ( )

1. Organic farming yield (quantity produced per acre) is lower than conventional
chemical-based farming.
2. Difficult to produce off-season crops using organic farming. so if entire India became
“100% organic farming” → food shortage → inflation.
3. Shelf life, colour and texture of organically grown fruits/vegetables are less attractive
than chemically grown hybrid / GM varieties. So, unless ordinary consumers are made
aware of their health benefits they may not buy. ,
40.4.3 🚫☣️✍️ Conclusion: Organic farming / ZBNF

✓ (SDG-ki-evergreen-Pipudi) New India Vision 2022 requires doubling farmers’ income,
while Sustainable Development Goal No.2 requires nations to adopt agriculture
practices that improve land and soil quality & protect the genetic diversity of flora-
fauna. (सतत धवकास लक्ष्य और ककसािो की आय को दुगिा करिे के धलए उपयोगी)
✓ Given the aforementioned ecological and economic economical benefits of organic
farming /ZBNF, it can help us achieve both the targets.
40.5 🌽🛒AGRI-SELLING → APMC (कृषिगत उत्पाद षवपणन सममतत)
(Intro: Origin) In the Post-independent India, despite the abolition of zamindari, the
farmers were not ‘liberated’ from exploitation. Because, the goons of local Baniyaa or
money lender would forcibly take away the farmers’ harvest without paying sufficient
money. So, state governments enacted APMC laws that “first sale of agriculture produce
can occur only at the market yards / Mandis of Agricultural Produce Market Committees
(APMC).”
40.5.1 ⚠️APMC Problems?

1. APMC trustees (office bearers) are politically influential persons. They enjoy a cozy
relationship with the licensed commission agents. These agents then form cartel,
manipulate prices and deprive farmers of remunerative prices; they also engage in
hoarding & artificial shortage of food supply in the retail market, thereby driving up
the food inflation for profiteering. ( )
2. APMC trustees lack the managerial skill / vision for vertical integration with food
processing industries. [because their only skill is ‘Politics’]
3. While these Mandis charge multiple entry, exit and other fees. But money is siphoned
off → poor infrastructure, lack of cold-storage and transport facilities → substantial
waste of fruits & vegetables despite bumper harvests in good monsoon years.
40.5.2 🔨Model APMC Act?

Since agriculture is a state subject, ultimately state governments have to reform their
archaic laws. Union Government already circulated a model APMC Act, 2003
- It allows the private entrepreneurs and cooperatives to set up their parallel markets, &
sell directly to consumers
- It allows the corporate companies to engage farmers in ‘contract farming (
and directly purchase the produce from farmgate.
Further, Union Government released
1) Model Agricultural Produce and Livestock Marketing Act 2017 (APLM:
) → it has better features than above model act, covering both Agro commodities
as well as livestock, fisheries and poultry.
2) Model Contract Farming Act, 2018 → (concurrent list) → aims to protect farmers
engaged in contract farming with better features than model APMC act 2003.
2016: NITI Aayog launched Agricultural Marketing and Farmer Friendly Reforms Index
(AMFFRI) to rank States and UTs. No state has achieved 100/100 score yet.
40.5.3 ⚖️ Constitution of India: 7th Schedule (7 व ीं अनुसूच )

Union List State List Concurrent List ( )
 Fishing and fisheries  Agriculture, agricultural  Transfer of property
beyond territorial waters education and research, other than agricultural
 Salt  Pests, plant diseases, land;
 Taxes on income other animal diseases;  Contracts, but not
than agricultural veterinary training and including contracts
 Estate duty on property practice. relating to agricultural
other than agricultural  Cattle trespass (अधतचार) land
land.  Water, water supplies,  Animals cruelty
irrigation, water power  Adulteration of
 Land, land tenures foodstuffs (धमलावट
relation of landlord and खोरी)
tenant etc  Trade and commerce
 Agricultural loans; in, production, supply
 Land revenue, survey and distribution,
and maintenance of land foodstuffs, including
records edible oilseeds and
 Taxes on agricultural oils; cattle fodder,
income oilcakes, raw cotton
 Estate duty on cotton seed; raw jute
agricultural land.
 Taxes on animals, boats.
 Fisheries.
 Markets and fairs.
40.6 👻⚖️👩‍🌾🛒 AGRO ORDINANCE#1 → APMC ORDINANCE 2020
 Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020.
ककसाि उत्पादि व्यापार और वाधणज्य (संविाि और सुधविा) अध्यादेि, 2020-June
 Ordinance will prevail / override over state APMC Acts. राज्यों के कािूिों के प्राविािों
ऊपर यह अध्यादेि अधिभावी / सवोपरर रहेगा.
State APMC Acts. Union Ordinance 2020-June
They had provisions for trade both intra-state and inter-state trade.
within "State" = Intra-State.
first agri-trade can be @any place like farm gates, factory, warehouses, cold
conducted only at APMC mandi, storages, APMC Mandi, cooperative society
& not at farm gate. etc. ( , , ,
But the buyer must be a
1) Person/organization with Permanent Account
Number (PAN) card number issued by The Income
Tax Department OR
2) Farmer Producer Organisation (FPO: ककसाि उत्पादक
संगठि) i.e. an entity registered under Cooperative
Societies Act, or Companies Act etc. OR
3) agricultural cooperative society
some states' Acts did not cover  covers food produce- cereals, oilseeds,
all these agriculture / food vegetables, fruits, spice, sugarcane. (खाद्य उत्पाद-
commodities → अिाज, धतलहि, सधजजयााँ, फल, मसाले, गन्ना)
 poultry, piggery, goatery, fishery, dairy.
(मुगी/सुअर/बकरी/मत्स्य पालि, डेयरी)
 cotton and jute (कपास, जूट)
 cattle fodder. (पिुओं का चारा)
narrow definition. Farmer means any person / organization involved in
producing above raw commodities. (
Did not have clear provisions Electronic trading permitted. Private players allowed
for this to setup such e-platforms.
Union will decide norms for it (
Did not have clear provisions  Buyer must pay farmer within 1-3 working days.
for this  If any dispute, complaint to Sub-Divisional
Magistrate (SDM) who will settle the complaint
within a specified time limit.
 Higher appeal → DM/Collector/Additional
Collector
State Govt and APMC Mandis  No Union or state tax will be levied on such
used to charge market fee, cess sale/purchase of raw commodity. (कच्चे कृ धर् माल की
or levy on the farmers for the खरीद धबक्री पर कें द्र राज्य करािाि िहीं लगेंग)े
sale.  meaning
 When Britannia buys wheat from farmer = no taxes
by Union or State (as per this new ordinance,
because raw commodity bought)
 After that stage, taxes are as usual-e.g.
State APMC Acts. Union Ordinance 2020-June
 When Britannia biscuits made from that wheat →
GST yes.
 When Britannia makes profit → Corporation
tax yes.
 When Britannia shareholders receive dividend from
profit → Income tax yes.
Penalties? from ₹25,000 to higher, depending on violation. (
✋Some of the (inexperienced) private quizmasters randomly lift

statement(s) from the original text of ordinance to frame MCQ. But
microscopic LLB things not asking in UPSC.
40.6.1 ⚖️👩‍🌾🛒:👎👿 Criticism for Agro-Ordinance#1:

1) Constitution of India → Seventh schedule → State list → Entry#14: Agriculture.
Therefore only the state legislature is empowered to laws on agriculture. Union is
encroaching upon the state's domain and harming the spirit of cooperative
federalism. (संधविाि की सातवीं सूची अिुसार कृ धर् कािूि बिािे का हक राज्यों को कदया गया है. कें द्र
सरकार अपिी मजी थोप के , सहकारी संघवाद को िुकसाि पहंचा रही है)
2) State govt prohibited from collecting taxes/fees → ⏬ Fiscal independence.
⏫States' dependence on Finance Commission. (राजकोर्ीय स्वतंत्रता कम हो जाएगी हमेिा धवत्त
आयोग के सामिे कटोरा लेकर खडा रहिा पडेगा)
3) Punjab Govt Agri Acts much better. Union should have copied it.
4) Scope of mis-interpretation and exploitation of small farmers by big traders and
Multinational Corporations (MNCs: बहराष्ट्रीय कं पधियों द्वारा छोटे ककसािों का िोर्ण).
5) Liberalisation / Deregulation of a sector has not always helped consumers e.g. in case
of education, health (looting by private colleges/hospitals). (उदारीकरण / धियंत्रण हटािे से
ग्राहकों का िुकसाि हो सकता है)
6) If farmers are getting remunerative prices via these ordinances → they'll go less to the
Govt's MSP → MSP subsidy bill ⏬ → India will be able to comply with WTO subsidy
norms in future. So, PM Modi doing it under WTO pressure, and not for farmers'
welfare. (सच्चे कदल से िहीं लेककि धवश्व व्यापार संगठि के दबाव में ककया गया)
7) Ordinance prepared in haste. Ordinance ignores X/Y/Z recommendation of past
committees on agriculture. Ordinance does not have X/Y/Z good provisions seen in
other countries' agriculture Acts. (धवधभन्न सधमधतओ के सुझाव /धवधभन्न देिों के कृ धर् कािूिो के अच्छे
मुद्दों को ि अपिाकर करके जल्द बाजी में बिाया गया. )
✋But criticism is not greatly imp for exam. #
40.6.2 ⚖️👩‍🌾🛒:👍🤩Conclusion /Pros: Agro-Ordinance#1: Appreciate

👳‍♂‍🙏🧔🙏Successive union govts tried to convince the state govts to implement the
model laws for reforming APMC mandis & Contract farming sector viz.
 2017: Model Agricultural Produce and Livestock Marketing Act 2017 (APLM: मॉडल कृ धर्
उपज और पिुिि धवपणि) covering both Agro commodities as well as livestock, fisheries
and poultry.
 2018: Model Contract Farming Act, 2018 → (concurrent list) → aims to protect
farmers engaged in contract farming
 But such model laws were not adopted uniformly across all the states of India.
 Coronavirus led an economic slowdown then forced the hand of the union
government to implement farm reforms at a faster pace. (उत्तरोत्तर समय में बिी कें द्र सरकारों
िे राज्यों को आदिा कृ धर् कािूि लागू करिे के धलए मिािे की कोधिि की, लेककि असफल. कोरोिा-आर्थाक
मंदी िे कें द्र सरकार को जल्दी से कृ धर् सुिार लागू करिे के धलए मजबूर ककया)
This latest ordinance will help in a long way to in
✓ creating one nation one market for barrier-free trade in agriculture (बािाओं से मुक्त
राष्ट्रीय कृ धर् बाजार का धिमााण )
✓ attracting private investment, boosting competition in the agriculture sector (धिवेि
और स्पिाा को प्रोत्साहि)
✓ doubling farmers’ income. (ककसािों की आय दुगिी करिे में मदद )
40.7 👻⚖️🥭👩‍🌾🤝🤵🧃 AGRO ORDINANCE#2 → CONTRACT FARMING

ORDINANCE 2020-JUNE
 Farmers (Empowerment and Protection) Agreement on Price Assurance & Farm

Services Ordinance, 2020. ककसाि मूल्य आश्वासि और कृ धर् सेवा (सिधक्तकरण और संरक्षण) अध्यादेि
 Ordinance's provisions will prevail / override over state APMC Acts and Essential
Commodities Act.
 Contract farming agreement means an advance agreement between the farmer and
the buyer agent, before the production of farm commodities. (अिुबंि खेती: ग्राहक और
ककसाि के बीच, कृ धर् उत्पादि से पहले, ककया गया एक अधग्रम समझौता है)
Contract farming agreement: ideal elements/ it should contain:
 Estimate Date of supply & Minimum quality standards (आपूर्ता धतधथ न्यूितम गुणवत्ता)
 Selling Price. (धबक्री कीमत/भाव)
 further, if market prices ⏫, buyer to give latest higher price to farmer.
 (e.g. If a contract was signed in January, requiring farmer to supply wheat @₹10/- to
Britannia on Dec, but @dec, market price of wheat gets ₹12/kg.)
 What inputs or services will be provided by the buyer (e.g. Pepsico giving
seeds/fertilizers/pesticides) कं पिी कौि सी चीजें मुहय
ै ा करे गी
 Copies of associated Insurance / loan document. (फसल बीमा और ऋण के कागजात)
 Duration of Contract: From minimum one crop season to maximum five years. It
may be renewed further afterwards, if both parties agree. (अिुबंि की अवधि: 1 फसल मौसम
से लेकर 5 साल तक)
 Contract farming agreement doesn't mean buyer has got ownership of the farmer's
land, (ताकक कोई बदमाि ग्राहक/कम्पिी ऐसे समझौता के कागजात के बल पर ककसाि की जमीि हडपिा
िुरू ि कर दें)
 Dispute settlement? Conciliation Board → Sub-divisional Magistrate (SDM) →
Appellate Authority (DM/collector/additional collector). (धववाद धिपटाि के धलए सुलह मंडल
और अपील का प्राविाि)
 Penalty? Yes possible. But farmer's land can't be confiscated/attached for recovery
of any penalties/damages. (ककसाि की गलती/बदमािी के चलते ग्राहक/कं पिी का िुकसाि हो गया तो
जुमाािा/भरपाई मांग तो सकते हैं, ककं तु ककसाि से उसकी जमीि जप्त िहीं कर सकते।)
40.7.1 👻 ⚖️🥭👩‍🌾🤝🤵🧃:👎 :👿 Criticism & Conclusion for Agro-Ordinance#2:
Similar to Agro-Ordinance#1. #
40.8 🌽👨‍🌾📦📦🕵🏽🤷🏽‍♂‍: FCI’S BUFFER STOCK PROBLEM ( )

Food Corporation of India (FCI, HQ-Delhi), a statutory corporation, setup under
Consumer Affairs Ministry ( ,
1) Procurement of foodgrains from farmers at Minimum Support Prices (प्रापण करिा)

2) Distribution of foodgrains to consumers through Public Distribution System (PDS,
सावाजधिक धवतरण प्रणाली द्वारा गरीबों में खाद्यान्नों का धवतरण)
3) Maintenance of buffer stock for food related schemes and to meet emergency
situations like unexpected crop failure, natural disasters, festivals, etc. (खाद्य सुरक्षा और
कीमत धस्थरता के धलए खाद्यान्नों के बफर स्टॉक का भंडारण करिा)
40.8.1 🌽👨‍🌾📦📦🕵🏽: 😥 FCI → Problems

❖ Due to electoral populism, successive Governments kept ⏫ MSPs → MSP is no longer
‘minimum support price’ but rather maximum offered prices as rarely any private
trader is matching that amount. Consequently, 80-90% of rice and wheat in Punjab-
Haryana is procured by FCI only. (लोकलुभावि मे सरकार िे एमएसपी इतिा बढ़ा कदया है की धिजी
व्यापारी उतिी कीमत देिे के धलए अक्षम है)
❖ This discourages the private sector to undertake long-term investments in
procurement, storage and processing of these commodities. (धिजी व्यापारी खाद्यान्न भंडारण
और प्रसंस्करण में धिवेि करिे के धलए हतोत्साधहत हो जाते हैं)
❖ 2019: Food Corporation of India’s (FCI) godowns are overflowing with three times the
buffer stock requirement. So 1) started Open market sale. 2) exploring to donate it to
the poorest nations of the world. (क्षमता से अधिक भंडारण)
❖ FCI forced to spend a large amount of ₹₹ for acquiring, storing and distributing
foodgrains. But the Government is not releasing subsidy / funds to FCI in a timely
fashion. FCI is forced to borrow money. (Ref: Pillar2: fiscal deficit → EBR)
❖ Thus, Government Intervention has hurt more than it has helped. (सरकारी दखल से यहााँ पर
मदद कम, और तकलीफ ज्यादा हई है!), so ES20Vol1ch4 recommended following →
40.8.2 🌽👨‍🌾📦📦🕵🏽 FCI → Solutions by 📔📔ES20

✓ National Food Security Act (NFSA:राष्ट्रीय खाद्य सुरक्षा अधिधियम): It aims to provide
rice(₹3/kg), wheat(₹2/kg) and coarse grains (₹1/kg) at heavily subsidized price to 67%
of Indian population.
o We should reduce the number of beneficiaries to bottom-20% poorest Indians.
o For ‘relatively less poor’ people, Govt should charge slightly higher prices.
(More about NFSAin Pillar6 → Malnutrition).
✓ Conditional Cash Transfer Schemes (सिता िकदी हस्तांतरण योजिाएं)
o Brazil (Bolsa Familia), Mexico (Oportuni dades), Philippines (Pantawid
Pamilyang Pilipino).
o Here poor families are given money to buy (non-subsidized) foodgrains from the
market.
o We should explore similar ways of giving cash/food coupon/smart cards to ⏬
FCI’s procurement and stock keeping burden.
40.9 🌽👨‍🌾📦🚝: 🧔 AGRI-SELLING: STORAGE AND TRANSPORT

💼Budget-2020 announced:
🚝 Indian Railways with refrigerated coaches in trains. .

Kisan 🤩= improve national cold supply chain for perishables, milk, meat and fish.
Rail ( , , )
✈️ Ministry of Civil Aviation ( ) will permit new flights on
Krishi international and national routes to transport agricultural cargo.
Udaan 🤩= farmers of North-East and tribal districts to sell their exotic
fruits/flowers at premium prices. ( )
➢ We’ll encourage the Warehousing Development and Regulatory Authority (WDRA), Food
Corporation of India (FCI) and Central Warehousing Corporation (CWC) to build more
warehouses. [All these are bodies under Consumer Affairs Ministry]
➢ We’ll launch a Village (grain) Storage scheme using Self-Help Groups (SHG). (Details
yet to be finalized)
40.10 🍅📈🤯FOOD INFLATION DUE TO COBWEB CYCLE 📈🕷🕸📉

📈🕷🕸📉 Cobweb Cycle (
 if a farmer observes a high price for a specific crop for a year, he would opt to
produce more of it the next year.
 But if all farmers think with this mindset → excessive production & supply → prices
⬇ → then they stop cultivating it in the next cycle → shortage in supply→ price ⬆.
 Faulty producer expectations → cyclical fluctuation in supply & prices.
 ककसाि की दोर्पूणा अपेक्षाएाँ → उत्पादि और कीमतों मे चक्रीय उतार-चढ़ाव
 This is called ‘Cobweb’ Cycle. Term given by economist Nicholas Kaldor (1934)
 ES20 blamed this phenomenon for price fluctuations in pulses.
40.11 🍅📈🤯: 🧔 FOOD INFLATION → ESSENTIAL COMMODITIES ACT

 Essential Commodities Act 1955 (ECA: आवश्यक वस्तु अधिधियम) aims to control the
production, supply and distribution of certain goods considered as essential
commodities e.g. foodgrain, pulses, edible oil, sugar, jute, fertilizers & seed, cattle-
fodder, medicines, petrol, diesel, kerosene, etc.
 During inflation/shortage: govt can impose stock limits, restrict movement of goods.
📔📔ES20vol1ch4 conducted case study of Onion inflation of 2019 & found
 76,000+ raids were conducted, yet, less than 3000 traders penalized. It hints that raids
are misused for bribery and harassment. (छापेमारी का डर कदखाके ररश्वत मांगिा)
 Assuming every raid needs a minimum of 5 govt officials, this is a waste of manpower
as well. (सरकारी महकमे के समय और ऊजाा की बबाादी)
 Under ECA, State Governments randomly impose stock limits on all wholesalers,
distributors, and retailers. But, these raids and stock limits had no impact on⏬ onion
inflation (2019) or pulses (2006) or Sugar (2009). (अप्रत्याधित रूप से स्टॉक धलधमट को लागू ककया
गया ककं तु खाद्य महंगाई को कम िहीं कर पाए)
 Infact, ECA discourages traders from investing in warehousing and storage facilities. It
discourages entry of large private sector players into agricultural warehousing and
marketing, because they never know when govt will arbitrarily change the stocklimit
norm. (बडी कं पिीया गोडाउि, भंडार अवसंरचिा मे धिवेि करिे मे धिरुत्साह होती है)
 The ECA Act does not distinguish between genuine large firms that need to hold large
amount of stock vs a greedy trader hoarding speculative profits.
 ECA Act was passed in 1955 when India was worried about famines, shortages,
speculative hoarding and black marketing; it is irrelevant in today's India and must be
discarded. ( पुरािे जमािे के इस कािूि को फें क देिे का वक्त आ गया है) Because here, Government
Intervention has hurt more than it has helped.
40.12 👻⚖️🍅📈🏭✋AGRO ORDINANCE#3 → ECA ORDINANCE 2020

Essential Commodities (Amendment) Ordinance, 2020-June.
Essential Commodities Act’55 Ordinance 2020-June

 Essential commodities In case of food items -cereals, pulses, potato,
examples: food items, onions, edible oilseeds, and oils → Union Govt can
fertilizers, medicine and impose stock limit only in the 4 extraordinary
petroleum. circumstances ( viz.
 However during what exact
conditions, can the  War (युि)
government impose a stock  Famine (अकाल/सूखा)
limit? Ans. Vague law. Govt  Grave Natural Calamity (गंभीर प्राकृ धतक आपदा)
would do it randomly based  Extraordinary Price Rise (असािारण मूल्य
on election / media hype. वृधि/अत्याधिक महंगाई). Which means compared to
 सरकार व्यापारी पर स्टॉक सीमा average prices IF →
कब/ककतिी लगा सकती है? इस बारे o 100% price rise in horticultural
में कािूि अस्पष्ट था। चुिावी समय / /perishable items (बागवािी/िािपाती)
मीधडया दबाव के आिार पर , o 50% price rise in non-perishable (गैर
अचािक/अिपेधक्षत धिणाय होते है िािपाती)
🧃😿 Food processing companies ✋Above stock limits may not apply to
were also harassed unnecessary  Existing Food processing companies / food
in stocklimits ( value chain participants involved in agri
processing, packaging, storage, transport, and
distribution. (प्रसंस्करण, पैकेजजंग, भंडारण, पररवहि और
धवतरण)
 Public Distribution System (सावाजधिक धवतरण प्रणाली/
सरकारी रािि की दुकाि वाले)
Ministry of Consumer Affairs In case of the extraordinary situations mentioned in
itself did not lay specific rules, above-table-cell#1: Ministry of Consumer Affairs will
but allowed the State Govts to issue orders/stock limits. So, theHindu columnists &
issue rules on stock limits, State Government resent this ‘encroachment’ on
restrict movement of goods etc cooperative federalism.
40.12.1 ✍️ ECA Ordinance → Conclusion /

 ES20 observed that the Essential Commodities Act was creating bottlenecks
against our food processing industry.
 This latest ordinance will encourage private/foreign investment in cold storages and
food supply chain. It will help in a long way to rectify this lacuna.
 (आवश्यक वस्तु अधिधियम हमारे खाद्य प्रसंस्करण उद्योग के धवकास में अडचिें पैदा कर रहा था। यह िवीितम
अध्यादेि इस खामी को हटािे में, धिजी/धवदेिी धिवेि को बढ़ोतरी देिे में मदद करे गा)
40.12.2 😷🚿 ECA → N95 Masks and Sanitizers put under ECA

 2020-March: Govt put them under ECA act to ⏫supply local market at reasonable
prices. If seller found black marketing and overpricing → 7 years jail / fine / both
 2020-June: Govt removed them from list, after State Governments reported there is
sufficient supply in market, and prices have become reasonable. (वाधजब दाम)
40.13 👨🏽‍🌾👨🏽‍🍳 AGRICULTURE PRODUCTION & PROCESSING → OTHER SCHEMES

40.13.1 👻📯🌽🏭 💸🔪 Agriculture Infrastructure Fund (2020-Jul)
 Boss? Ministry of Agriculture. ( )
 Type? Central Sector Scheme (=States not req. to give money.)
 Beneficiary? Farmers, Agriculture Cooperative Societies, Farmer Producers
Organizations (FPOs), Self Help Group (SHG), Agri-startups, Public Private Partnership
(PPP) projects etc.
 Banks and NBFCs will loan them total ₹1 lakh cr. (10k cr this + 30k cr each in next 3
years) = total 1 lakh cr. NABARD may provide them with refinance. (Ref#1D)
 🔪 Loan will be given for?
o Post-harvest Management Infrastructure (Warehouse, cold storage, etc.
o Community Farming Assets (

 🔪 Loan duration? Medium to long term loans.(How many years exactly? Ans. not
clearly mentioned. (
 🔪 Loan Interest? To be decided by individual bank/NBFC.
 🔪 Loan Interest Subvention? 3% by Government (
 🔪 Loan Default? = upto ₹2 cr credit guarantee by Credit Guarantee Fund Trust for
Micro and Small Enterprises (CGTMSE: Ref1D)
 Scheme Valid for next ten years, starting from 2020
40.13.2 👻🍅🧅🏭 Atma-Nirbhar: ”Op Green” expanded to all fruits & veggies
 Food Processing Ministry → PM Kisan Sampada Yojana → sub scheme called

Operation Greens for T-O-P: Tomato, Onion and Potato
 2020: Corona → ATMANIRBHAR= now we’ll expand from T-O-P to ALL fruits and
vegetables. It’ll provide
o subsidy on transportation from surplus area to deficient markets. (धजि धवस्तारोमें
धवपुल उत्पादि/आपूर्ता है वहां से कमी/तंगी वाले बाजारों में माल पहंचाया जाए)
o subsidy on storage infrastructure. (भंडारण के धलए बुधियादी ढांचा)
 Benefit? reduced food wastage, Better prices for farmers, affordable food for
consumers (अपव्यय/बबाादी, ककसाि को बेहतर कीमत, ग्राहक को ककफायती दाम)
40.13.3 👻🧃🍭🍬 Atma-Nirbhar: Food Enterprises promotion (

 Existing (unorganized sector) micro food enterprises, Farmer Producer Organisations,
Self Help Groups and Cooperatives
 will be given funding, training, support for brand Building,marketing . (असंगरठत क्षेत्र के
लघु खाध्य उद्यमों को धवत्त पोर्ण, प्रधिक्षण, समथाि)
 Help them comply with Food Safety Standards, (खाद्य सुरक्षा मािक)
 Cluster based approach of development e.g. Mango in UP, Kesar in J&K, Bamboo
shoots in North-East, Chilli in Andhra Pradesh, Tapioca in Tamil Nadu etc. → ⏫Export
(समूहबध्ि करके धवकास, धियाात मे बढ़ोतरी)
Separately, herbal cultivation of medicinal plant, beekeeping will be encouraged (
40.14 🐮 SECTORS → AGRO ALLIED: → ANIMAL HUSBANDRY (पशुपालन)
40.14.1 🐮🐮📊 Livestock Census ( )

- Department of Animal Husbandry conducts livestock Census every 5 year since 1919-20.
- The 20th Livestock Census: data collection started in 2018-Oct. Provisional data
released in 2019-Oct.
- India has the world's largest livestock population
Category Census- % growth Internal Distribution:
(Largest to 2018-19 / fall to More imp for StatePCS Exam than IAS exam
Smallest) (in previous
million) census
Cattle 192.49 0.8%  WB>UP>MP>BH>MH
 Female Pop>Males.
 Indigenous Population is more than
Crossbred/Exotic Pop.
 In-Milk giving population greater than Dry
Population
Goat 148.88 10.1% RJ>WB>UP>BH>MP
Buffalo 109.85 1.1% UP>RJ>Guj>MP>Bihar
Sheep 74.26 14.1% Telangana>Andhra>Kar>RJ>TN
Pig 9.06 -12.0% Assam>JH>Megha>WB>Chhattisgarh
Mithun 0.38 26.7% It’s a Buffalo like animal found in Northeast
Only 4 States: Arunanchal>Naga>Mani>Mizo
Horses & 0.34 -46.0% UP>JK>RJ>BH>Guj
Ponies
Camel 0.25 -37.5% Only 4 States: RJ>Guj>Haryana>UP
Donkey 0.12 -62.5% RJ>MH>UP>Guj>BH
Category Census- % growth Internal Distribution:
(Largest to 2018-19 / fall to More imp for StatePCS Exam than IAS exam
Smallest) (in previous
million) census
Mule 0.08 -60.0% info not available in Census document
Yak 0.06 -25.0% Only 5 States: J&K>Arunanchal>Sikkim>HP>WB
Total 535.78 4.6% Top 5-States: UP>Raj>MP>W.Bengal>Bihar
(Mammal)
Livestock
Separately
Poultry 851.81 16.8% Top 5-States: TN>Andhra>Telengana>WB>MH
40.14.2 🐮🍼 Agro Allied: Animal husbandry → SCHEMES

Rashtriya Int-Budget-2019 setup this executive body in Department of Animal
Kamdhenu Husbandry & Dairying. Goals?
Aayog - Genetic up-gradation of cow resources
2019 - Enhance cow productivity through research in organic manure,
biogas etc; Cow welfare, cow protection laws.
Structure:
- Chairman with tenure of 2 years.
- Members from govt, research institutions, social workers etc their
tenure depends on govt’s discretion.
- HQ: New Delhi.
- Minimum 1 meeting every quarter (3-3 months)
💼Budget-2020 ✓ We’ll eliminate following disease by 2025:
o Cattle: Foot and Mouth disease, Brucellosis
o sheep and goat: Peste Des Petits Ruminants (PPR)
✓ We’ll use MNREGA workers to develop fodder farms.
40.14.3 🐑🐐: 📔📔ES2019: Focus on Small Ruminants
Figure 1: Day#1 Mains Answer Writing
Sheep and goat are collectively known as small ruminants (
− These small ruminants have higher survival rates under drought conditions compared to
bovines (गौ-जातीय पिु: Cattle, Buffalo, Mithun and Yak).
− They can even live on shrubs and trees. Their reproduction rates are higher than large
ruminants. Farmers/producers can sell them more frequently & no fear of ‘cow-
vigilantism’. (गौ-रक्षा के धलए िागररकों द्वारा कािूि को हाथ में लेिा)
− Thus, small ruminants can help ⏫ income of the small-marginal & women farmers.
(छोटे सीमांत और मधहला ककसािों की आय में बढ़ोतरी)
40.14.4 👻🐮🍼🍨🍦Atma-Nirbhar: Dairy cooperatives (
 Corona lockdown = milk sales ⏬.
 Government to give 2% loan interest subvention to dairy cooperatives + If they
regularly repay loans then additional 2% = total 4% interest subvention (जयाज मे राहत).
This is applicable on new loans taken between 1st April 2020 and 31st March 2021.
 National Animal disease control → 100% vaccination of domestic animals against Foot
and Mouth Disease (FMD) and for brucellosis.
 Animal Husbandry Infrastructure Development Fund will be setup with ₹15,000 cr
(पिुपालि की बुधियादी अवसंरचिा धवकास धिधि)
40.14.5 🐟Agro Allied: Fisheries → Blue revolution (मत्स्य → नीली क्ांतत)

- 💼 (Full) Budget-2019:
- Dept of Fisheries to launch Pradhan Mantri Matsya Sampada Yojana (PMMSY)
for infrastructure, post-harvest management, quality control etc.
- 💼Budget-2020:
- “Sagar mitras”: these extension workers to advise fishermen with processing
and marketing.
- Target to raise fishery export to ₹1 lakh crore by 2024-25.
- We’ll promote growing algae, sea-weed and Cage Culture (growing of fishes in
existing water resources in a net cage which allows free flow of water.)
40.14.6 👻📯🐡🦐Pradhan Mantri Matsya Sampada Yojana (2020)
 Originally announced in Budget 2019. but was not launched in that financial year. Then
Corona → Atma-Nirbhar 2020-May/Jun → yes we'll launch it.
 Boss? Ministry of Fisheries, Animal Husbandry & Dairying
 Type? It's an umbrella scheme worth >20kcr. Made up of two sub-schemes/parts:
o 1) Sub-scheme #1: Central Sector Scheme (=state not req to give money)
o 2) Sub-scheme #2: Centrally Sponsored Scheme (=States required to give
money.)
This scheme provides Support / Funding / Subsidies for
✓ 👨‍🏫Sagar Mitra youth extension workers: They'll give training to fishermen.

✓ 🛶🔪☠️Fishing Boat/Vessels → Loans interest subsidy and Insurance premium
subsidies (
✓ Inland Aquaculture, Coldwater Fisheries in Himalayan areas, ( ,
✓ 🌾Seaweed cultivation, 🐠Ornamental Fisheries ( ,
✓ Mariculture: cultivation of marine organisms in their natural environment in sea upto
12 nautical miles from coast.
✓ ⚓️Development of fishing harbours, Post harvest infrastructure, transport, marketing
support ( , , ,
✓ ⚗️🩺Quality control labs so we can comply with US/EU's health/hygiene, sanitary and
phyto-sanitary (SPS) standards. ( ,
✓ 🗓Scheme Valid for next five years, starting from 2020

✓ 🤩Outcome? 55 lakhs direct and indirect jobs, ₹1 lakh cr fisheries export by 2025.
✍️Conclusion? Fisheries and aquaculture are an important source of food, nutrition,
employment and exports in India. Govt has taken an appreciable step to boost this sector
further. ( , , , ,
40.14.7 🤝 Global Cooperation: Food and Agriculture Organisation (FAO)

is a specialized agency of UN, setup in 1945 with HQ @Rome, Italy.
Table 1: International Years by UN
2024 Camelids (group of Camel species)

2023 Millets
2022 Artisanal Fisheries and Aquaculture
2020 Plant Health
2019 1) Indigenous Languages; 2) Moderation; 3) Periodic Table of Chemical Elements
2017 Sustainable Tourism for Development
2016 Pulses
Table 2: International Decades by UN
2018–2028 International Decade "Water for Sustainable Development"

2019–2028 1) Nelson Mandela Decade of Peace 2) United Nations Decade of Family Farming
2021–2030 United Nations Decade on Ecosystem Restoration
2021–2030 International Decade of Ocean Science for Sustainable Development
40.14.8 🤝 Global Cooperation: Misc. → SAARC Food Bank (2007)

✓ 2007: South Asian Association for Regional Cooperation (SAARC) countries signed the
agreement to establish the SAARC Food Bank.
✓ The Food Bank will help member nations’ people in case of emergencies.
✓ Each member country is required to contribute either wheat/rice.
✓ Stock is kept with respective Govt agencies like FCI. So, Bank doesn’t hv a HQ as such.
40.14.9 🤝 Global Cooperation: Misc. → International Grains Council (London)

✓ HQ: London, for cooperation in wheat and coarse grain matters.
✓ IGC has two types of members— importing and exporting members. India has been
included in the category of exporting member since 2003
40.14.10 ✍️🎺Mock Question for Mains

 Enumerate the salient features of the ordinances issued by the union government in
2020 for reforming the APMC market and contract farming. Discuss their significance in
improving our agriculture growth rate. (2020 में कें द्र सरकार द्वारा एपीएमसी बाजार और अिुबंि
खेती धवर्ेयक अध्यादेिों के मुख्य प्राविािों की सूची दीधजए. हमारी कृ धर् कृ धर् वृधि दर में इिके महत्व की
चचाा कीधजए।)
 “Zero Budget Natural Farming can help saving the farmer from debt trap and the save
the environment from the harmful effects of conventional agriculture.” Elaborate.
("िून्य बजट प्राकृ धतक खेती ककसाि को कजा के जाल से बचािे में मदद कर सकती है और पारंपररक कृ धर् के
हाधिकारक प्रभावों से पयाावरण को बचा सकती है।" धवस्तृत कीधजए।)
 Discuss the impact of Corona crisis on the animal husbandry and fisheries sector of
India. What initiatives have been undertaken in the Atma-Nirbhar Bharat initiative to
revive these sectors? हमारे पिुपालि और मत्स्य पालि क्षेत्र पर कोरोिा महामारी की असर पे चचाा। इि
क्षेत्रों को पुिजीधवत करिे के धलए आत्म धिभार भारत अधभयाि में क्या क्या कदम उठाए गए है?
MRUNAL’S ECONOMY BATCH PRELIMS AND MAINS 2021

 I’m also pleased to announce, my next ONLINE batch for Economy for UPSC CSE-2021
covering both Prelims and Mains topics of Economy.
 Registration Link: https://unacademy.com/@mrunal.org
Stay Tuned for the Remaining [Win20CSP] Pillar#1/2/3/4/5/6’s update packs at

Mrunal.Org/Download
�Pillar4B: sectors of Economy: MFG, Startup-IPR, Make in India, EoD, MSME-Textile
Table of Contents
60 Pillar4B: Sectors of Economy: Manufacturing ......................................................................................... 111
60.1 � �: � � � Mfg: Assemble in India (अस�बल इन इं िडया).............................................................. 111
60.2 � � Mfg & Services → Startup India (2016) .................................................................................. 113
60.2.1 � �: � (Full) Budget-2019 on Start-ups............................................................................... 113
60.2.2 � �: � Budget-2020 on Start-ups ......................................................................................... 113
60.2.3 � � Startup: Misc Terms and trends....................................................................................... 113
60.2.4 � � Startup: Factors affecting new firms creation ( � �ES20)......................................... 114
60.2.5 � � → Quantum Technology (�ांटम प्रौद्यो�गक�) 2020.............................................................. 114
61 �Mfg & Services → Intellectual Property Rights .................................................................................. 114
61.1 �IPR → Patents → What can’t be Patented?................................................................................... 115
61.1.1 � �Patent pools (पेटंटो का समूहीकरण) .......................................................................................... 115
61.1.2 � �Atma-Nirbhar IPR → YUKTI 2.0 .................................................................................. 115
61.1.3 � IPR Index → NITI’s India Innovation Index (भारत नवाचार सूचकांक) ..................................... 115
61.1.4 � � IPR Index → International .............................................................................................. 116

61.2 Sectors: Ease of Doing Business Report ................................................................................................ 116
61.2.1 � �ES20 Vol1ch6 on Ease of Doing Biz in India: observed .................................................. 118
61.3 � �Pro-Business vs Pro-Crony, � �ES20Vol1Ch3 .................................................................... 118
61.3.1 � � �Cronyism: Related Party Transaction (RPT: सं बं�धत प�ों से लेनदेन) ............................. 118
61.3.2 � �: � �Cronyism: Economist David Ricardo & Rent Seeking .................................... 119
61.3.3 � � �Crony Capitalism and SENSEX’s 30 companies ...................................................... 119
61.3.4 � � Pro-business vs Pro-Crony Policies................................................................................. 120
61.4 � � Ease of doing Biz → Judicial Reforms: �ा�यक सुधार ................................................................. 120
61.4.1 � �: � � Suggested reforms#1: recruit more judges (�ायाधीशों क� भत�)........................... 121
61.4.2 � �: � � Suggested reforms#2: Create a new Judicial Administrative Service............. 121
61.4.3 � �: � � Suggested reforms#3: Increase courts’ working days ...................................... 121
(Batch: Win20CSP) Mrunal’s Economy Pillar#4B- Sectors of Economy: Mfg, EoD, Startups & MSME → Page 109
61.4.4 � �: � � Suggested reforms#4: E-governance, ICT-Technology .................................. 121
61.4.5 � �: �Conclusion on Judicial reforms? ............................................................................ 122
61.4.6 � � Homework: Read ES19 Vol1 Ch5- Judicial Reforms ..................................................... 122
61.4.7 � � �Transparency International → Corruption Perceptions Index 2019 ..................... 122
62 � � Minimum Wages (�ूनतम वेतन) ......................................................................................................... 123
62.1 � � � Minimum Wages Act (�ूनतम मजदू री अ�ध�नयम 1948)............................................................ 123
62.1.1 � Gender injustice...................................................................................................................... 123
62.1.2 � New-age workers not covered ............................................................................................... 123
62.1.3 � Unorganized workers not represented ................................................................................. 123
62.1.4 � � Minimum Wage Reform: Anoop Satpathy Committee (2019) ..................................... 124
62.1.5 � � � Anoop: why proposal #2 is better?............................................................................. 124
62.1.6 � � � Anoop: Frequently revise Minimum Wages ............................................................. 124
62.1.7 � � � Minimum Wages → Code on Wages 2019 (वेतन कोड/ सं िहता) ................................... 125
62.2 � � � Code on Wages 2019 →Salient Features (figures not IMP) ............................................. 125
62.3 � � ES19 on Minimum Wages reforms (2019) ............................................................................... 126

62.3.1 Simplification and Rationalisation............................................................................................... 126
62.3.2 Use ICT to enforce Minimum Wage ........................................................................................... 126
62.3.3 Adopt Best Practices from abroad................................................................................................ 126
62.3.4 � Conclusion: Indeed minimum wage enforcement is important ........................................ 126
62.3.5 � � Homework: Read ES19 Vol1 Ch11- Minimum Wages ................................................. 127
62.4 � � � � �EoD → Corona: Suspension of Labour Laws? .................................................... 127

62.4.1 Implications: Trade unions And Labour rights activists fear that (नकारा�क प्रभाव) .................. 127
62.4.2 � � �Corona Suspension Labour laws: Union says NO!! ................................................ 127
62.4.3 � � � DON'T punish employers if they can't pay full salaries- SC ................................... 128
62.4.4 � � � Banking = Public Utility Service (सावर्ज�नक उपयो�गता सेवा) .......................................... 128
63 � � Mfg & Services → MSME → Ministry ...................................................................................... 129
63.1.1 � � � ATMANI: MSME Definition Changed by Government ....................................... 129
63.1.2 � � � � � MSME → Atma-Nirbhar Funding/Schemes (2020, Corona) ................... 129
63.1.3 � � � � � Atma-Nirbhar-MSME: CHAMPIONS WebPortal (2020-May) ............... 130
63.2 � � � � � � ES19: MSME dwarfism shd be discouraged (बौनापन) ...................................... 130
63.2.1 � � � �: � MSME ‘Dwarfism’ is caused by Govt schemes ......................................... 131
63.2.2 � � � � MSME ‘Dwarfism’: Suggested Reforms by ES19 .............................................. 131
63.2.3 � Conclusion-Template for MSME (�न�षर्) ............................................................................. 131
63.2.4 � � Homework: Read ES19 Vol1 Ch3- MSME ..................................................................... 132
64 � Mfg → Bodies for quality standards ................................................................................................... 132
64.1 �: � BIS & Gold Hallmarking ......................................................................................................... 132
64.2 � Commerce Ministry → Not-Statutory → NPC (1958) .............................................................. 132
64.3 � Health ministry→ Statutory → FSSAI (2006) .............................................................................. 132
64.4 � Power Ministry → Statutory → BEE (2001-02) ........................................................................... 133
64.5 � � Consumer Protection Act, 2019 (उपभो�ा सं र�ण) ..................................................................... 133
64.6 T � � Mock Questions for Mains ............................................................................................................ 134
64.6.1 T � � Mock Questions for Mains → Previous Years Papers ....................................................... 134
64.6.2 T � � Mock Questions for Mains → Minimum wages, MSME Dwarfism ................................ 135
64.6.3 T � � Mock Questions for Mains → 100th birth anniversary of PM Rao (2020) ..................... 135
60 PILLAR4B: SECTORS OF ECONOMY: MANUFACTURING
60.1 �🦁🦁:📟📟 📺📺📺📺 MFG: ASSEMBLE IN INDIA (अस�बल इन इं�डया)
� �ES20 Vol1Ch5 suggested we move one step ahead from ‘Make in India’ towards Assemble in India
� � � Make in India � � � � � Assemble in India
What? textiles, clothing, footwear, toys (कपड़े व� जूते Products of Apple, Samsung, Sony, Nike,
�खलौने) Adidas etc.
How? Traditional Unskilled Labour Semi-skilled labour
पारंप�रक अकु शल श्र�मक आं�शक �प से कु शल श्र�मकों के द्वारा
- � �: � � �: Assemble in In India → “Network products”
- (Definition) Network Products: Their production occurs across Global Value Chains (GVCs) operated by
Multinational Companies (MNCs) such as Apple, Samsung, Sony, Nike, Adidas etc. (ब�रा��ीय �नगमों द्वारा
वै��क मू� श्रृंखला के द्वारा “नेटवकर् उ�ादों” को बनाया जाता)
Product is designed by their Headquarter (HQ) located in a rich country @US/EU/Japan. But Product
assembly/manufacturing in done low wage countries.
Further, these products are not produced from start to finish within a single country. (अलग-अलग देशों म� �वशेष�ता
के अनुसार उ�ादन िकया जाता है)
Instead, countries specialize in particular stages of production sequence. E.g. Iphone:
LCD screen @South Korea
+ Processor @Taiwan
+WiFi chip @Malaysia
→ above parts are finally assembled in Foxconn Factory in China.
2020-July: Apple's contract manufacturer Foxconn started iPhone 11 mfg in its Chennai factory. (Due to the
USA-China trade war, companies are shifting the factories away from China. Ref �
Pillar#3B for trade war /
protectionism)
- � �: � � �: Assemble in In India → how will it benefit India?
IF India joins the assembly chain of Network Products (नेटवकर् उ�ाद) esp. computers, TV, mobile, electronics
(�वद्युत उप�र), road-vehicles (सड़क वाहन), then…
Assemble in India 2025 2030
New Jobs in India रोजगार सृजन → 4 cr 8 cr ⏫
India’s share in World Export वै��क �नयार्त म� भागीदारी → 3.5% 6% ⏫
- � �: � � �: Assemble in In India → Wild Geese Flying Model (1960s)
Formulated by Japanese economist Kaname Akamatsu. जं गली हंसों का उदयन मॉडल
Japanese companies (Sony) first started assembling Camera, mobiles, TV etc. then later outsourced
manufacturing to South Korea, Malaysia.
Then South Korean companies (Samsung, LG etc) grew and they started outsourced mfg to other Asian
nations like Taiwan, Thailand etc.
Thus, Networked Goods assembly will continuously move from the more advanced countries to the less
advanced ones. उ�ादन क� प्रिक्रया �ादा-�वक�सत देशो से कम-�वक�सत देशो मे �ानांत�रत होती है।
�ES20 observed: India is presently at a stage where it can become part of this flying model.
�
India has experience of Network products in the Automobile sector: Suzuki, Honda, Ford, Fiat, and Renault
etc. import some of the components and finally ‘assemble’ Car in India. But such cars are made for domestic
consumers (and not ‘exported’ to rich countries, unlike the China-assembled Iphone & SonyTV).
- � �: � � �: Assemble in In India → Policy recommendations?
 Previously, China was seen as a low-cost location for final assembly of industrial products. But ageing
population = labour shortages + increases in wages. (चीन मे श्र�मकों क� कमी और वेतन म� बढ़ोतरी)
 US/EU Protectionism (सं र�णवाद)=higher duties on China-made products → companies are shifting
production away from China.
 So, India should attract these MNCs by reforming its taxation, FDI and labour laws (कराधान, �वदेशी प्र��
�नवेश, श्रम कानूनम� सुधार करना).
 Skill training of Indian youth as workers and middle-level supervisors. (कौशल प्र�श�ण)
 Improve infrastructure for transportation, broadband communication etc. (प�रवहन व सं चार क� बु�नयादी सु�वधाओं
को बेहतर करना)
 Shipping Delays, Electricity Failure, Political Disturbances, Labour Disputes etc could disrupt the entire
production chain & thereby discourage the MNCs. So, Govt should try to monitor them closely. (नौवहन म�
देरी, �बजली क� कटौती, राजनी�तक अ��रता, मजदू रों के �ववाद से पुरी उ�ादन-�ं खला बा�धत हो जाती है. इन पर सरकार क� �नगरानी ज�री)
 2018: top 3 mobile handset manufacturers 1) China 2) India 3) Vietnam. With the right policies, we can
even overtake China! (को�शश करे, हम चीन से भी आगे �नकल सकते है)
60.2 🌱🌱🌱🌱 MFG & SERVICES → STARTUP INDIA (2016)
Nodal? Commerce Ministry.

- Startup company was defined originally as a company which is:
- Not older than 7 years. (10 years if Biotech Company).
- Doesn’t have annual turnover above ₹ 25 crore.
- Works towards innovation & development of goods / services.
- These norms were changed to 10 years for any company & upto 100 cr. Turnover in 2019-Feb.
60.2.1 🌱🌱🌱🌱:💼💼 (Full) Budget-2019 on Start-ups

 We’ll stop harassing startups in the Angel Tax cases.
 We’ll launch special Doordarshan TV channel for helping startup entrepreneurs- how to register and
manage business, how to mobilize capital, tax planning, marketing strategies etc.
 We’ll extend the Stand-Up India Scheme till 31/3/25. (Ref: Pillar1D)
60.2.2 🌱🌱🌱🌱:💼💼 Budget-2020 on Start-ups

 Startup can claim 100% deduction on its profits, for 3 years out of the first 10 years of incorporation. (as
such they get tax benefits under Startup India scheme, but new budget fine tuned those technical
definitions further.)
 Start-ups generally use Employee Stock Option Plan (ESOP) to attract talented employees. But ESOP was
subjected to various direct taxes → New budget gave some technical reliefs to them. What is ESPO? Ans
Ref: pillar1B2
60.2.3 🌱🌱🌱🌱 Startup: Misc Terms and trends

- Unicorn club → A startup company whose valuation is $1 billion />. Swiggy, Paytm, Byjus etc. Indian
startups are in this list.
- As of Jan-2020 Total 27,084 startups registered in India. 43% of them have at least 1 woman director.
Rank → 1 2 3 4 5
Largest number Maharashtra Karnataka Delhi UP Haryana
found in State →
Largest number IT services Healthcare & Life Education Professional Food
found in Sector → Science services Beverages
� �ES20Vol1Ch2 observed:
 World Bank’s Data on Entrepreneurship (उद्य�मता): Top 3 nations with largest number of new firms
registered 1) USA 2) BRAZIL 3) India.
 As per Ministry of Corporate Affairs (MCA)-21 database the # of new firms created in India ⬆ from
70,000 (2014) to 1,24,000 (2018).
 Largest number of new firms are created in the Services sector than in (manufacturing, infrastructure or
agriculture). सेवा �ेत्र, �व�नमार्ण, बु�नयादी अवसं रचना,कृ �ष
 10% ⬆ in registration of new firms in a district = 1.8% ⬆ in that district’s Gross Domestic District
Product (GDDP: सकल घरेलू �जला उ�ाद )
 Thus, entrepreneurship at district – has a significant impact on wealth creation at the grassroot level.
उद्य�मता से जमीनी �र पर धन सृजन म� मदद �मलती है
60.2.4 🌱🌱🌱🌱 Startup: Factors affecting new firms creation (📔📔📔📔ES20)

नई �ाटर्-अप/ इकाइयो के �नमार्ण को प्रभा�वत करने वाले कारक
 Eastern India: lowest literacy rate (सा�रता दर: 59.6%, census of 2011). This region has the lowest
registration of news firms. In the past, the privatization of engineering colleges helped improve India’s
software exports. So, governments could also explore the privatization of education further (allow more
private colleges: �श�ा का �नजीकरण) → �education → ⬆ No. of new firms @district level.
 W.Bengal, Assam, Jharkhand, Kerala and Bihar have inflexible labour laws so entrepreneurial activity is
lowest. (जहां श्रम कानून लचीले नहीं होते वहां उद्य�मता कम होती है)
 physical infrastructure such as road, electricity, water/ sanitation facilities, and telecom services. (भौ�तक
अवसं रचना: प�� सड़क, �बजली, पानी ��ता, दू रसं चार सेवा)
60.2.5 🦁🦁💻💻 → Quantum Technology (�ांटम प्रौद्यो�गक�) 2020

 Conventional computers process information in ‘bits’ or 1s and 0s.
 Quantum computers compute in ‘qubits’ (or quantum bits). They work on quantum mechanics
principles related to how matter behaves on the atomic scale.
 Google’s quantum computer ‘Sycamore’ claimed ‘quantum supremacy’ because it finished a task in 200
seconds that would have taken a conventional supercomputer 10,000 years to complete.
 Applications? computing, communications, cyber security etc.
 �Budget-2020: National Mission on Quantum Technologies for a period of 5 years.
 Related Topics: 5g, public data etc in Pillar#5: communication infrastructure.
61 🔬🔬MFG & SERVICES → INTELLECTUAL PROPERTY RIGHTS
61.1 🔬🔬IPR → PATENTS → WHAT CAN’T BE PATENTED?
⇒ Frivolous inventions. E.g. schoolbag, laptop bag
⇒ Anything seriously harmful to public order, morality, humans, animals, plants or environment. E.g.
Stone-pelting machine
⇒ Atomic energy related inventions.
⇒ Mere discovery of a scientific principle or the formulation of an abstract theory or discovery of any living
thing or non-living substance occurring in nature;
⇒ Plants-seeds varieties, biological process to create them; (Ref �Pil#4A Pepsi-Potato)
⇒ animals breeding; Medical treatment of humans and animals
⇒ Mere discovery of a new form of a known substance which does not result in the increased efficiency.
⇒ Mere re-arrangement or duplication of known devices.
⇒ Mere aggregation of properties of the components e.g. lemon + sugar + water = juice
⇒ Traditional knowledge. E.g. Ayurvedic information.
⇒ Mathematical formula, business method, method of playing game e.g. Dhoni’s helicopter shot.
⇒ computer program, presentation of information, integrated circuit
⇒ literary, dramatic, musical or artistic work; cinema-TV shows
�❓MCQ (Pre19-SetA) Q57. Find correct statement(s):

1. According to the Indian Patents Act, a biological process to create a seed can be patented in India.
2. In India, there is no Intellectual Property Appellate Board.
3. Plant Varieties are not eligible to the patented in India.
Answer Codes: (a) 1 and 3 only (b) 2 and 3 only (c) 3 only (d) 1,2, and 3
61.1.1 🔬🔬🔬🔬Patent pools (पेटंटो का समूहीकरण)

⇒ Patent pools are voluntary agreements between two or more patent holders. (�ै��क समझौते) to create a
"pool" → Appoint a manager → Manager gives the production/licence rights to multiple third parties
for a cheap cost → manager distributes the royalty/license fees among the patent holders.
⇒ Why in the news? Costa Rica and other poor nations are proposing patent pools for Corona related
drugs/vaccines.
⇒ Pharma MNCs of USA & UK etc are opposed to this idea since it'll harm their monopoly & profiteering.
(एका�धकार और मुनाफाखोरी)
61.1.2 👻👻🔬🔬Atma-Nirbhar IPR → YUKTI 2.0

YUKTI − YUKTI 2.0 Young India Combating COVID with Knowledge, Technology and
2.0 Innovation (YUKTI) is HRD/Edu Ministry's portal for sharing info about: Research,
Innovation, Technologies, Startup (सं शोधन, नवप�रवतर्न,तकनीक,�ाटर्अप) esp. those related to
Corona
61.1.3 📊📊 IPR Index → NITI’s India Innovation Index (भारत नवाचार सूचकांक)
2019-Oct: NITI Aayog released it. Institute for Competitiveness (a private organization) acted as knowledge
partner. It monitors the States and UT on two dimensions viz
1) Enablers Includes five pillars: (1) Human Capital, (2) Investment, (3) Knowledge Workers, (4)
(प्रोत्साहनदाता) Business Environment, and (5) Safety and Legal Environment.
2) Performance Includes two pillars: (6) Knowledge Output and (7) Knowledge Diffusion.
The Innovation ranking has three categories:
Category Major States North East and Hill States UT & Small States
Best → #1 Karnataka > TN > #1: Sikkim > HP > #1: Delhi > Chandigarh >
Maharashtra Uttarakhand Goa
Worst → Jharkhand Meghalaya Lakshadweep
Similarly separate rankings are given for enablers, performers, human capital, investment etc. in three separate
categories of State/UT but preparing that much data = very poor cost: benefit.
61.1.4 🔬🔬🔬🔬 IPR Index → International

✋Following are low profile bodies, so their index components / India' ranking = notImp / gives very poor
cost benefit for exam
Index Prepared by
Global Competitiveness Index (GCI) by ✓ 2018-Dec ranking: 1) USA, 2) Singapore, 3) Germany….
World Economic Forum 28) China, 58) India…. 140) Chad the last. India’s rank
had improved than earlier years.
✓ 2019-Oct Ranking: 1) Singapore 2) USA 3) Hong
Kong….68) India. Meaning India has fallen by 10 places.
Global Talent Competitiveness Index INSEAD business school (Paris) in partnership with Tata
(GTCI: वै��क प्र�तभा प्र�त�धार् सूचकांक) Communications and Adecco Group.
World Digital Competitiveness Ranking By Switzerland-based International Institute for Management
World Competitiveness Index and Development (IMD).
Index of Economic Freedom Heritage Foundation (USA) with support of Wall Street
Journal.
Global Economic Freedom Index Fraser Institute (Canada)
🔠🔠❓ Global Competitiveness Report is published by the _ _ . (Prelims-2019)
(a) International Monetary Fund (b) UNCTAD (c) World Economic Forum (d) World Bank
🔠🔠❓ Which one of the following countries was ranked 1st in the IMD World Competitiveness ranking
2019? (UPSC-Geologist-2020)
a) Singapore b) USA c) India d) Switzerland
61.2 SECTORS: EASE OF DOING BUSINESS REPORT
Figure 1: अपना �बजनेस शु� करने के �लए सरकारी द�रों के च�र काटते काटते थक चुका �ं
- �ापार करने म� सुगमता का �रपोटर् is an index by the World Bank to measure how easy or difficult it is to run a
business organisation in a given country, based on simple average (equally weighted) of 10 parameters-
such as no. of documents, time & cost involved in registering a property, getting an electricity connection,
paying taxes etc.
- As such no specific themes are given in these reports.
Report 2018 → #1: NZ>Singapore>Denmark> India (100) >... Somalia (190)
Rank2019 #1: NZ>Singapore>Denmark> India (77) >... Somalia (190)
(released in 2018-Oct) →
Rank2020 #1: NZ>Singapore>Hongkong> India (63) >... Somalia (190)
(released in 2019-Oct) → Report acknowledges India as one of the top 10 improvers, third time in a row.
India’s rank in 2017 (#130) to 2020 (#63) = shows a jump of 67 steps- this is
highest by any large country since 2011.
Table 1: India’s ranking on 10 parameters

Ease of Doing Biz Rank- Rank- Rank- Improved Rank- Improved 2020 over
Parameters 2017 2018 2019 2019 over 2020 2019
2018
Overall 130 100 77 100 -77=23 63 77 Minus 63 =14
Starting a Business 155 156 137 19 136 137 Minus 136= 1
� Construction Permits 185 181 52 129 (highest 27 25
jump)
�Getting Electricity 26 29 24 5 22 2
Registering Property 138 154 166 -12 154 12
�Getting Credit (loan) 44 29 22 7 25 -3 (getting tougher to
get loans, thanks to
NPA, ILFS-NBFC
crisis)
�Protecting Minority 13 4 7 -3 13 -6 (corporate scams in
Investors ILFS etc)
�Paying Taxes 172 119 121 -2 (despite 115 6

apps &
portals!)
Trading across Borders 143 146 80 66 68 12
Enforcing Contracts 172 164 163 1 163 0
�Resolving Insolvency 136 103 108 -5 (despite 52 56
I&B Code)
�❓MCQ. According to the World Bank’s Doing Business Report, 2019, India’s ranking has improved in
in which of the following areas compared to previous year? (UPSC’s-CDS-ii-2018):
1) Paying taxes 2) Resolving insolvency 3) Starting a business 4) Construction Permits
Answer Codes: A) 1 only B) 1 and 2 only C) only 3 and 4 D) All four areas.
�❓MCQ (Pre19-SetA) Q77. Which one of the following is not a sub-index of the World Bank's ‘Ease of
Doing Business Index?
(a) Maintenance of law and order (b) Paying taxes
(c) Registering property (d) Dealing with construction permits
61.2.1 📔📔📔📔ES20 Vol1ch6 on Ease of Doing Biz in India: observed

⇒ � To open a restaurant, China and Singapore require only 4 four licenses, but India requires >20.
⇒ � 45 documents required to get Delhi Police’s permission for opening a restaurant. Far less number of
documents required for a gun license!
⇒ � Hong Kong construction permits available within 2 months, India takes 4 months.
Similarly, CEA Subramanian K. has done a lot of bol bachchan comparison done with New Zealand,
Hongkong, Bangladesh etc. just to fill up pages in this chapter.
We’ve already learned some of the measures for Ease of Doing Biz in the handouts of tax related portals, Foreign
Trade policy, WTO: TFA agreement etc. Apart from that…
61.3 🤵🤵🤵🤵PRO-BUSINESS VS PRO-CRONY, 📔📔📔📔ES20VOL1CH3

Crony capitalism is an economic system in which businessmen thrive not by their hard work or risk taking
capacity, but through a nexus between a business class and the political class. (प�पाती पूंजीवाद: ऊधयोगप�त अपनी
मेहनत या जो�खम लेने क� �मता से नहीं िक�ु, राजनी�तक वगर् से सांठगांठ के चलते तर�� करते है) � �ES20vol1ch3 found that:
⇒ India: After election results, road contractors associated with the ruling party were given large numbers of
contracts to build Pradhan Mantri Gram Sadak Yojana (PMGSY, More in Pillar5). But 1/4th of such
roads exist only on paper.
⇒ Brazil’s public sector banks are more likely to approve loan applications of a company if the company
owner gave election donation to the ruling party.
⇒ Eastern Europe: When politically connected firms fail in business → Government will usually bail them
out using taxpayers' money.
⇒ Politically Connected Underwriters increase the likelihood of clients’ IPO applications being approved by
the Chinese share market regulator. (Ref: pillar1C)
⇒ Across the world, crony capitalist firms pay lower taxes than their actual profits.
61.3.1 � 🤝🤝🤝🤝Cronyism: Related Party Transaction (RPT: सं बं�धत प�ों से लेनदेन)

RPT transactions involve company’s directors, their relatives and their related companies. RPTs may harm
the interests of the company’s shareholders. Example,
⇒ Pawnfisher Airlines Ltd gives sponsorship to a IPL cricket team owned by Ajay Dallaya’s Son.
⇒ Jes Bank buys crore ₹₹ worth painting from Kana Kapoor’s daughter for ‘office decoration’ purpose.
⇒ Minister gives 2G spectrum / coal auction / highway construction rights to a company. THEN company
appoints that minister's wife/son as a consultant/director & pays a hefty salary.
Companies Act has norms to regulate RPT. But, often Crony capitalists, wilful defaulters and tax-avoiders
misuse RPT using loopholes.
61.3.2 � 🤲🤲: 🛒🛒🛒🛒Cronyism: Economist David Ricardo & Rent Seeking

⇒ A Mobile company pays political bribes to get spectrum/license from the Government. (More in Pillar5:
Communication infrastructure)
⇒ Then the Company will charge very high prices on the prepaid plans and data packs to recover (1)
Operational Costs (2) Profit (3) Bribes.
⇒ Similar examples could be cited in the coal-power based thermal electricity prices, Toll fees charged by
highways developers, heavy fees in private hospitals/ schools/colleges.
⇒ Ricardo labelled it “rent seeking behaviour. (िकरायावसूली/लुंटने क� मान�सकता)” It doesn’t help in (new) wealth
creation because abnormal profits extracted at common citizens’ expense.
⇒ Such crony capitalists do not invest their high profit for research and innovation, they just use it for
debauchery & building more crony-relationship with politicians. (मुनाफे को नई खोज/सं सोधन मे नही ब�� ऐयाशी,
और नेताओ से साँठगांठ बढ़ाने मे इ�ेमाल करते है)
� �ES20 observed
 This type of rent-seeking behaviour was more prevalent till 2011. (यानी िक परो� �प से कांग्रस
े सरकार �नक�ी और
भ्र� थी)
 After CAG / Media reported the scam, the profits, share prices, SENSEX performance of such crony firms
greatly declined, since they couldn't compete with the innovative firms.
 CEA Subramanian K. used ‘Herfindahl Index’ to prove this. Economist Herfindahl’s Index (1950) is used
for monitoring the level of competition among the companies.
61.3.3 � 🗃🗃🗃🗃Crony Capitalism and SENSEX’s 30 companies

Recall Pillar1C: BSE-30 SENSEX monitors the share prices of 30 listed companies.
�Before liberalization �After liberalization
If a company entered this list, it could stay there ⇒ Decreased to only 12 years. Within that time,
for 60 years. So, CEA Subramanian K. is hinting some new firm will replace old firm in the BSE-30
that list. E.g. Bombay dyeing replaced by Arvind Mills
⇒ Pre-LPG firms paid political bribes to prevent etc.
any new entrepreneurs from getting a license ⇒ It shows a continuous influx of new firms,
to even start the business or getting a quota to products and technologies into the economy.
expand business production. ⇒ Thus, crony capitalism is finding less domination
⇒ So, rival’s company will never grow large in post-LPG India.
enough to get noticed by BSE-officials so ⇒ Austrian economist Joseph Schumpeter coined
they’ll not add its name in BSE-SENSEX-30 the term “Creative destruction (सजर्ना�क �वनाश)”
i.e. Older firms/products are destroyed by newer
firms/products, which is necessary.
BSE-SENSEX-30 list Majority had manufacturing Service sector firms
firms
61.3.4 🤵🤵🤵🤵Pro-business vs Pro-Crony Policies
�Pro-business policies (�ापार समथर्क) �Pro-crony Policy (प�पाती नी�तया)
Make it easy to start a business, Register property, When existing companies pay political bribes to
enforce contracts, ⬆competition restrict entry of new companies / import
restrictions of rival brands.
→⏬competition → ⏫heavy profits, but at the
expense of the customer.
⇒ Make it easy to obtain loans, resolve insolvency. ⇒ When political masters pressurize public sector
This helps in biz expansion and wealth creation banks to lend money to unviable biz projects
⇒ कजर् लेना, िदवालापन हल करना, �ापार �व�ार और धन सृजन मे (अ�म कं पनी को कजर् देने के �लए मजबूर करना)
मदद ⇒ When wilful defaulters are not given strict
treatment. (जानबुज के कजर् न चुकाने वालो पर ढील रखना)
⇒ They’ve destroyed a total ₹1.4 lakh cr of loan
assets. Majority of wilful defaulters belong to
mfg. sector
⇒ Transparency in bidding for natural resources ⇒ Government gives preferential treatment to
(प्राकृ �तक सं साधनों क� नीलामीमे लगाने म� पारद�शता) crony companies. (कं प�नयो के प�पाती �प से आवं टन)
Result? Competition, innovation, lower prices and ⇒ Reverse will happen → Wealth is destroyed.
better service quality for citizens → demand ⬆ → (धन का नाश/�य होता है।)
production ⬆ → GDP → (new) wealth created.
�Conclusion: Cronyism doesn’t foster competitive markets. It fosters inefficiencies & results in erosion of
wealth. As Dr. Raghuram Rajan said, ‘There is a need for saving capitalism from the crony capitalists”. अ�मता म�
बढ़ोतरी पूंजी का � �य बबार्दी
61.4 🏄🏄🏄 EASE OF DOING BIZ → JUDICIAL REFORMS: �ा�यक सुधार
� � Economic Survey 2018-19 (Released in July 2019) vol1 Ch5 observed:

⇒ Theory of Matsyanyaya: If no ruler / Government → big fish will eat little fish.
⇒ 3.5 crore cases pending in the judicial system.
⇒ More than 80% of them are concentrated in the district and subordinate courts. Out of these pending
cases, ~70% are criminal cases, ~30% are civil cases. Some economists say poor performance of the
criminal justice system is of no direct consequence to the economy. But, a behavioural economics: general
lawlessness → Mafias thrive → investors are discouraged (e.g. UP and Bihar).
⇒ World Bank’s Ease of Doing Biz → Indicator “Enforcing Contracts” → India’s ranking is in the range of
160+. And it is not improving at a faster rate.
⇒ Compared to many European countries we are 4-6 times slower.
⇒ Punjab and Delhi are performing much better than the national average.
⇒ But, Odisha, Bihar, West Bengal, Uttar Pradesh very slow rate. And these states are also lagging behind in
SDG India Index, Health Index.
Homework for Interview: Go through the data for your own state from Economic Survey 2018-19 Vol1-Ch5
61.4.1 🏄🏄🏄 : 🕵🕵🕵🕵🕵🕵Suggested reforms#1: recruit more judges (�ायाधीशों क� भत�)

 At the district and subordinate level courts: sanctioned strength is ~23,000 judges but at present we have
~18,000 judges. So we have to fill up the vacant posts through faster recruitment. [~ means approximate]
 High Court: Each HC Judges disposes ~2300 cases per year. So to clear all the backlog cases In the next
five years, ~360 additional HC judges required.
 Similarly a few more judges also required at the supreme court.
61.4.2 🏄🏄🏄 : 🕵🕵🕵🕵🕵🕵Suggested reforms#2: Create a new Judicial Administrative Service

 For faster clearance of cases, judicial staff’s efficiency also matters - Whether it is the Court Manager,
Bailiff, Judicial clerks, Legal assistants, Translators, Typists/Stenographers. But there recruitment,
syllabus, eligibility conditions and training mechanism is not uniform across India. Many tribunals
recruit staff on adhoc-contractual basis, and do not impart adequate training.
 Canada, USA and UK have separate cadre of Government employees for this.
 Therefore, ES19 proposed to create a specialized service called Indian Courts & Tribunal Services (ICTS:
भारतीय �ायालय और अ�धकरण सेवाएँ ) with following functions:
o provide administrative support to judges
o Improving administrative aspects of the legal system- Document storage, data processing etc.
backoffice functions through Information and Communications Technology (ICT) and re-
engineering.
o Identify process inefficiencies and advise the judiciary on legal reforms. E.g. “x type of evidence
must be submitted in y format within z days for faster processing of the case.”
 �Budget-2020: 1) We’ll reform the recruitment system for tribunal to attract best talents and
professional experts. 2) Reform the Contracts Act.
61.4.3 🏄🏄🏄 : 🗓🗓🗓🗓 Suggested reforms#3: Increase courts’ working days

 Presently Central Government offices are open for 244 days per year.
 Whereas High Courts are open for only 232 days and Supreme Court open for only 190 days in a year-
Because they take longer vacations in summer, winter, Holi, Diwali and Dussehra. (कायर् के िदनों म� बढ़ोतरी, तािक
के स ज�ी से �नपटा सके )
61.4.4 🏄🏄🏄 : 📡📡📡📡 Suggested reforms#4: E-governance, ICT-Technology

कोटर् क� कायर्वाही म� सूचना प्रौद्यो�गक� का उपयोग
 Lower courts consume a lot of time in sending Notice / summons, recording witness statements. (अदालत
का बुलावा भेजना, गवाह का बयान दजर् करना)
 Higher court cannot proceed until it receives case’s records from the lower court.
 Computers are used as mere ‘modern typewriters’. Their scanning, email, computation facilities are not
fully used.
 So we have to focus on E-governance, ICT-Technology to increase the efficiency of the court
administration. Even Artificial Intelligence may be deployed for ordinary disputes e.g. Traffic challan, or
Cheque dishonour.
 Ministry of Law and Justice started eCourts Mission Mode Project - creation of the National Judicial Data
Grid (NJDG: रा��ीय �ा�यक डेटा �ग्रड), digitalization of cases. It allows stake-holders to keep track of individual
cases and their evolving status. We must ensure its speedy implementation and connectivity with all the
courts.
61.4.5 🏄🏄🏄 : ✍Conclusion on Judicial reforms?

 Thus, case pendency can be reduced through recruitment of additional judges, creating separate cadre of
Judicial Administrative Services, increase in working days of court, and deploying ICT technology.
 Preamble to the Constitution of India defines that the first role of the State is to secure social, economic,
and political justice for all citizens.
 Therefore, need of the hour is to pursue judicial reforms on a war footing. OR
 Judicial delays discourage the victims from approaching the court. Victims silently continue to suffer
injustice or approach Mafia elements. It also fuels the atmosphere of insecurity (असुर�ा), vigilantism (लोगो
द्वारा कानून को अपने हाथ म� लेना) and mob lynching (भीड़ द्वारा वध करना).
 Therefore SDG Goal 16: provide access to justice for all….hence need of the hour….
61.4.6 📘📘 📘📘 Homework: Read ES19 Vol1 Ch5- Judicial Reforms

⇒ Bullet 5.1 to 5.4. And then read figure11 (Your home-State data for interviews)
⇒ Bullet 5.32 till the end of the chapter. To build the vocabulary.
61.4.7 🕵🕵🕵🤲🤲🤲🤲Transparency International → Corruption Perceptions Index 2019

⇒ Transparency International is a global civil society organisation fighting against corruption. Setup in
1993, HQ- Berlin, Germany. (भ्र�ाचार-अनुभू�त सूचकांक).
⇒ 2020-Jan: it released the ranking for 2019 →
⇒ #1 (tie) Denmark and New Zealand, then directly given #3: Finland, #4 (Tie) Switzerland, Singapore,
Sweden.
⇒ #81: India in 2019 (in 2018 it was #78, meaning rank fallen = corruption increased)
⇒ #180: Somalia bottom.
To control corruption, above report recommends:
⇒ Focus on conflicts of interest, preferential treatment given to wealthy. िहतो के टकराव पर �ान द�, धनवानों को
�मलनेवाली सरकारी �रयायतो पर �ान द�
⇒ Regulate electoral financing, election integrity. चुनावी फं िडंग, स��न�ा
⇒ Regulate lobbying activities. लॉबीइं ग ग�त�व�धयों को �नयं त्रण म� रखे
62 👷👷👷💰💰 MINIMUM WAGES (�ूनतम वेतन)
⇒ (Definition) According International Labour Organization (ILO) अंतरार्ष्ट�ीय श्रम सं गठन (आईएलओ),minimum
wage is the minimum amount of remuneration that an employer is legally required to pay to the worker.
It’s usually expressed in amount per day or per hour.
⇒ (Origin) The concept of minimum wages is not a modern day innovation. Even Arthashastra written in
the 2nd Century BCE ordained the lowest wages for workers based on their skills and occupation.
⇒ While the Britishers in enacted Payment of Wages Act, 1936 in India to ensure workers are paid salaries
in a timely fashion it did not provide for minimum wages computation or enforcement or equal
remuneration for males and females.
⇒ After independence, the Directive Principles of State Policy (रा� के नी�त-�नद�शक त�) mandated the State
o to secure a living wage, a decent standard of life for all workers (Article 43),
o to provide adequate means of livelihood for all citizens & equal pay for equal work for men and
women (Article 39)
62.1 👷👷👷💰💰⚖ MINIMUM WAGES ACT (�ूनतम मजदू री अ�ध�नयम 1948)

The act protects both regular and casual workers (�नय�मत एवं अ�नयत श्र�मक).
Minimum Wages are fixed for different categories of workers according to skill levels, location and
occupations. But suffers from 3 serious problems.
62.1.1 😕😕 Gender injustice

Minimum wages are the same for both male and female. But, minimum wages of security guards are higher
than domestic workers (This work is mostly done by women). So, minimum wages need to be accommodative
of the gender justice angle as well.
62.1.2 😕😕 New-age workers not covered

Minimum wage rates are set both by the Central and the State governments for employees working in selected
‘scheduled’ employment (अनुसू�चत रोजगार / �नयोजन). But, with the advent of ICT and startups, there has been a
massive expansion in job categories but he schedules are not updated. Every 1 in 3 workers is not in the ambit
of minimum wages.
62.1.3 😕😕 Unorganized workers not represented

- Act did not prescribe norms / formula for fixing minimum wage. However, it provided for tripartite
advisory boards consisting of employers, employees of scheduled employments, and independent experts.
- As a result, the unionized workers are able to get better wages compared to unorganized workers, because
unorganized workers have no representation in such advisory boards.
62.1.4 👷👷👷💰💰 Minimum Wage Reform: Anoop Satpathy Committee (2019)
This committee was setup by the labour ministry for Determining the Methodology for Fixation of the
National Minimum Wage. It recommended:
Minimum wages should be decided based on the following factors:
1. � Cost of food basket: consisting of x units of calories, fats and proteins.
2. � Essential non-food items (गैर-खाद्य पदाथर्): such as clothing, fuel and light, house rent, education,
medical expenses, footwear and transport.
Accordingly, Anoop suggested two proposals:
Proposal#1 (all India) Proposal#2 (Zonal) �

⇒ National-level minimum wage (NMW): ₹ 375 Indian states and union territories should be
per day x 26 working days in the month = ₹ divided into 5 regions, and have separate
9,750 a month. Additional ₹ 1430 house rent minimum wages suitable to the local realities and
allowance / city compensatory allowance for as per socio-economic and labour market
urban workers. contexts.
⇒ These will be applicable to all, irrespective of ⇒ Zone1 (Assam, Bihar etc): ₹ 8892/month
sectors, skills, occupations and rural-urban ⇒ To…
locations. ⇒ Zone5 (Delhi, Punjab type small & developed
regions with higher cost of living): ₹
11,622/month
62.1.5 👷👷👷💰💰💰💰 Anoop: why proposal #2 is better?

⇒ At present, Minimum wages vary from state to state. Industrialists prefer to setup factories in states with
low level of minimum wages. But this results into forced migration (मजबूर प्रवास / �व�ापन) of labourers to
States with higher wages.
⇒ In Nagaland the lowest minimum wage is ₹ 115/day whereas in Delhi it is ₹ 538/day. Such divergence is
justified because the cost of living & economic development of each state is different. Therefore 1st labour
commission argued that uniform level of national minimum wage is an impractical idea (अ�वहा�रक �वचार).
⇒ But both ES19 and Anoop Satpathy Committee (2019) recommended Union Government should fix a
National Floor Level Minimum Wage (रा��ीय वेतन सीमा के अधीन �नतम मजदू री) across the five geographical
regions.
⇒ Thereafter, states should not be allowed to fix the minimum wages less than the “floor wage” (वेतन क� �न�
सीमा) of their region.
⇒ If we’ve uniformity in minimum wages in given region, it would encourage industries to move towards
interior areas and ensure workers too will remain in their home states thereby ensuring balanced regional
growth (सं तु�लत �ेत्रीय �वकास).
62.1.6 👷👷👷💰💰⏰ Anoop: Frequently revise Minimum Wages

⇒ Minimum wages be updated every 6 months with changes in consumer price index (CPI)
⇒ Consumption basket (food items, clothing etc.) should be reviewed every five years,
62.1.7 👷👷👷💰💰💰💰 Minimum Wages → Code on Wages 2019 (वेतन कोड/ सं िहता)
This new act aims to merge the existing Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the
Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976 into a single Code on Wages, with
following features:
Domain Sectors covered
� Union  Sectors: Air transport service, Railways, Major Ports, mines, oil field,
Government telecommunication, banking and insurance company, Central Government Jobs,
CPSEs, autonomous bodies, their subsidiary bodies
 To fix minimum wages here, Government will setup a Central Advisory Body of
Employers, Employees, Independent Experts and 5 State representatives
 Based on Central Advisory Body’s recommendations, the Union will fix Floor
Wages, for different geographical areas Taking into account minimum living stds.
(Meaning Anoop’s idea is accepted)
� State  Sectors: They’ll look after all the other sectors of employment which are not in
Governments Union’s domain.
 They’ll have individual State Advisory Board.
 They must keep Minimum wages > or = Floor Wages.
− �Update Frequency? minimum wages norms will be revised every 5 yrs or less.
− Here Minimum Wages = salary, allowance and other monetary components. But doesn’t include: bonus,
travelling allowance
62.2 👷👷👷💰💰💰💰 CODE ON WAGES 2019 →SALIENT FEATURES (FIGURES NOT IMP)
Overtime Pay ⇒ Depending on sector: Union / State will fix max. hours in a normal working
day.
⇒ If worker doing more: “Overtime Wage” =Min. 2x normal wages
Payment Frequency ⇒ Boss (Employer) may pay wages (i) daily, (ii) weekly, (iii) fortnightly, or (iv)
monthly.
⇒ In coin, currency, cheque, bank money, e-transfer
Deduction (कटौती) ⇒ Boss (Employer) may deduct worker’s wages for 1) penalty 2) absence 3) rental
home 4) advance / loan etc.
⇒ But, deductions should not > 50% of the workers’ total wage.
Right to Bonus ⇒ If worker’s salary less than “X” ₹ , then he is given Right to bonus
⇒ 8.33% of wages or ₹ 100 Whichever higher
⇒ But not more than 20% of his annual wages. + other caveats notIMP
Gender ⇒ It is forbidden. Employer must give equal pay for equal work
discrimination
Penalty for violation ⇒ Upto 3 months jail, ₹ 1 lakh fine
- Above Code on Wages is already passed by Parliament and signed by the President. But to implement it
in reality, the Government of India need to notify the rules & announce the minimum wages.
- But, as of 2020-July: Government announced draft rules for public feedback. There are speculations that it
may be implemented by 2020-Sept. But,
- If minimum wages are ⏫ then industrialists (who’re already suffering from economic slowdown) will
suffer even more
62.3 📔📔📔📔 ES19 ON MINIMUM WAGES REFORMS (2019)

CEA Subramanian K. appreciated Code on Wages and suggested further reforms →
62.3.1 Simplification and Rationalisation

− Present system is extremely complex with nearly 2000 minimum wages defined for various scheduled job
categories. They should be clubbed together into four minimum wages based on skill category i.e
UNSKILLED, SEMI-SKILLED, SKILLED and HIGHLY SKILLED.
− Such Wage Code should be applicable on all jobs, all workers, and all sectors of economy- Whether it is
organised or unorganised.
62.3.2 Use ICT to enforce Minimum Wage

Bounded Rationality (ता�ककता क� सीमाए) Humans can’t make the most rational and optimal decision because
they do not have all the necessary information
− So, spread MW related information through computer, mobile phones, rural haats, TV-Radio-
Massmedia. Then both worker and boss can do effective bargaining.
− Setup Digital dashboard to show updated minimum wages.
− Easy to remember helpline / complaint number for the workers.
− Labour ministry should announced we punished “X” number of violators, so it puts fear into other
employers, and discourages them from violating minimum wages.
62.3.3 Adopt Best Practices from abroad

We should also implement the following best practices from other Nations:
 UAE: All companies are legally mandated to pay all types of salary through banks only.
 South Africa: ‘Impimpi Alive’ system wherein workers can send anonymous SMS messages to Labour
Department, and within 48 hrs, an inspector will come to the factory.
 U.S.: They’ve apps to notify the minimum wages related updates to all the workers & companies.
62.3.4 � Conclusion: Indeed minimum wage enforcement is important

Minimum wages is a subset of labour welfare policies. So we can always connect it with keyword such as
inclusive growth, sustainable development, poverty removal, Social justice and accordingly we can make a
conclusion linking them all:
⇒ India is witnessing a period of demographic dividend (जनसां��क�य लाभांश). But, even if the youth is
equipped with vocational skills (�ावसा�यक कौशल ) but unable to find well paying jobs, then such
circumstances will breed social unrest and perpetuate social injustice.
⇒ SDG Goal #8 requires India to promote full and productive employment and decent work for all.
Minimum wages protect the vulnerable workers, reduce inequality and poverty.
⇒ Therefore, establishing an effective minimum wage system is important for sustainable development and
inclusive growth (सतत एवं समावेशी �वकास) .
Alternatively you can make a conclusion on the line that “although for complying with the DPSP we have
enacted multiple laws but successive Committees and economic surveys observed these laws have failed to
bring about the change in letter and spirit so aforementioned reforms are necessary.”
62.3.5 📘📘 📘📘 Homework: Read ES19 Vol1 Ch11- Minimum Wages

Introduction from 11.1 upto bullet 11.4. Then ‘Way forward’ from bullet 11.27 onwards.
62.4 🏄🏄🏄🤳🤳 😷😷😷😷 EOD → CORONA: SUSPENSION OF LABOUR LAWS?

State(s) majority of the labour laws suspended for (श्रम कानूनों का �गन)
UP next 3 years
Guj, MP first 1000 days for newly established factories
Some other ⇒ Small factories will not be subjected to inspection by labour inspectors. (�नरी�ण से मु��)
states ⇒ Factory owners can increase the number of working hours per day, but without any
clarification on how much extra overtime wages need to be paid to workers. (प्र�त िदन काम
के घं टों मे बढ़ोतरी)
62.4.1 Implications: Trade unions And Labour rights activists fear that (नकारा�क प्रभाव)
⇒ Companies will not invest in workers' safety and amenities- washroom, spittoon, creches etc
⇒ Companies may force workers to work for extra hours, without paying overtime/bonus.
⇒ Companies may randomly hire and fire workers. Yet workers will not be able to complain to Government
officials / courts since the laws are suspended. (मन मुता�बक िकसी को नौकरी पर रखना या �नकाल देना)
⇒ This will undermine workers' right to EPFO, ESIC, payment of bonus, job security and social
security. (श्र�मक क� सामा�जक सुर�ा का हनन)
62.4.2 😷😷😷😷 Corona Suspension Labour laws: Union says NO!!

Constitution → 7th Schedule → Concurrent list → Labour (7 वीं अनुसूची → समवत� सूची → श्रम)
⇒ Article 254 (1): In the concurrent list topics: Parliament's law will prevail over State's law. क� द्र/सं सद के कानून
को रा� के कानून के ऊपर वरीयता �मलेगी
⇒ Article 254 (2): In the concurrent list topics: States need to obtain the President's assent to modify their
own State law. (In practice, President of India will act as per the advice of PM) रा� ने कानून म� सुधार के �लए
रा��प�त क� अनुम�त लेना ज�री
⇒ So, Union Govt has clarified to Parliament, "we'll not entertain that above reforms by State governments."
(रा� सरकारों द्वारा श्रम कानून के �गन के प्र�ावों पर �वचार नहीं कर�गे/ अनुम�त नहीं द�गे)
⇒ In other words, UP will not be allowed to suspend labour laws for 3 years, Madhya Pradesh will not be
allowed to suspend it for 1000 days etc.
⇒ Further, the Union Government had enacted Inter-State Migrant Workmen Act, 1979 to protect migrant
workers. Union may take actions under this law, if / when the situation requires. (अंतर-रा� प्रवासी श्र�मक
अ�ध�नयम)
62.4.3 😷😷😷😷 DON'T punish employers if they can't pay full salaries- SC
2020-March: Ministry of Home Affairs (MHA) ordered all employers to pay full salaries to workers, even
during Corona lockdown. (Using powers of the Disaster Management Act, 2005: आपदा प्रबं धन कानून के अंतगर्त गृह
मं त्रालय ने सभी नौकरीदाताओं को अपने कमर्चा�रओ को लोकड़ाऊन मे भी पूरा वेतन देने के आदेश)
⇒ MSME owners went to SC with petition, "our business is down. We can't pay full salaries, please save us!"
⇒ SC: Ordered the government not to take any punitive detections against the employees, if they can't pay
full salaries to workers. (कोई सजा मत दी�जए)
⇒ 2020-May: Home ministry has withdrawn the order. (आदेश को वापस �लया)
62.4.4 😷😷😷😷 Banking = Public Utility Service (सावर्ज�नक उपयो�गता सेवा)
Under the Industrial Disputes Act: workers enjoy a 'statutory right to strike' (औद्यो�गक �ववाद अ�ध�नयम म� मजदू रों को
हड़ताल पर जाने का कानूनन हक)
⇒ but there are certain restrictions e.g. (1) Government employees (2) Public Utility Services employees are
not allowed this right. (e.g. Electricity company, Telecom company etc.)
⇒ If 'public utility' workers go on strike → it will be deemed "illegal strike" (गेर-कानूनी)
o = 1) the owner can dismiss such workers from job (नोकरी से �नकाल देना)
o = 2) workers may be required to pay compensation to the owner for business losses. (नुकसान क�
भरपाई)
⇒ 2020-April: Union labour ministry notified that the banking industry will also be treated as Public Utility
Service for 6 months.
⇒ Afterall, if bankers go on strike (for salary rise) → Atma-Nirbhar Bharat initiatives related to MSME
loans etc. will get delayed → Difficult to revive the economy.
63 👶👶👶👶 MFG & SERVICES → MSME → MINISTRY
63.1.1 👻👻 �🏭🏭 ATMANI: MSME Definition Changed by Government

सू�, लघु और म�म उ�ोग क� �ाखया मे बदलाव
⇒ MSME units get certain relaxations in the factory and labour laws compliance.
⇒ MSME are also eligible for priority sector lending loans and quotas in Government procurement. If
MSME firm grows bigger, it’ll not get the above benefits.
⇒ So, if MSME firm#1 is growing bigger in size, its entrepreneur will create MSME Firm#2 to divert
business.
⇒ Thus infant firms → giant companies...nope; but infant firms → ‘dwarfism (बौनापन)’. Such firms
contribute neither to productivity or jobs, said the � �ES19. Therefore:
⇒ 1/Jul/2020 Government changed MSME definition:
�in above image, read "<" sign as "NOT MORE THAN (से अ�धक नहीं)
Investment: �नवेश annual turnover: वा�षक कारोबार
63.1.2 👻👻👻👻👻👻👻🏭🏭 MSME → Atma-Nirbhar Funding/Schemes (2020, Corona)

Ref Pillar#2 Win20CSP: Atma-Nirbhar handout for more details
Scheme What has been done in Atma-Nirbhar?
Loans: MUDRA 2% interest subvention on Shishu Loans
Scheme What has been done in Atma-Nirbhar?
Loans: MSME Non-NPA ⇒ Emergency Credit Line Guarantee Scheme (ECLGS: आपातकालीन क्रेिडट
borrower लाइन गारंटी योजना).
⇒ Guaranteed Emergency Credit Line (GECL) facility.
Both are synonyms of the same scheme.
Loans: MSME NPA borrower ⇒ Subordinate Debt (गौण ऋण)
Equity ⇒ infusion via Fund of Funds
Protection from foreign players ⇒ So, in Government procurement tenders up to ₹200 crore. →
in public procurement Foreign (global) companies will not be allowed to apply. (सरकारी खरीद
के 200 करोड़ तक के ट�डर मे �वदेशी कं प�नयों को अज� डालने पर प्र�तबं ध)
63.1.3 👻👻👻👻👻👻👻🏭🏭 Atma-Nirbhar-MSME: CHAMPIONS WebPortal (2020-May)

- MSME's Complaint & Grievances Redressal (�शकायत �नवारण)
- Support for various schemes (योजनाओं द्वारा मदद)
- It's based on Hub & Spoke Model. Hub = New Delhi main office of MSME Ministry. Spokes = its field
offices, state governments etc. (पिहए का क� द्र और छड़)
63.2 📔📔📔📔 �↘�🏭🏭 ES19: MSME DWARFISM SHD BE DISCOURAGED (बौनापन)
CEA Subramanian K. observed: Following benefits are available to Small firms:

Acts / Policy Only Applicable on Implications
Industrial Disputes Act,1947 100/> workers Factory owner must get Government
approval before retrenching
workers/shutting units
Factories Act, 1948 Min 10-20 workers Factory owner must provide restroom,
depending on whether creches and other facilities
power is used in mfg/ or
not?
Employees’ State Insurance 10/> workers Factory owner required to co-contribute ₹
Act, 1948 ₹ in insurance / pension accounts of low-
salaried workers
Employees’ Provident Fund & 20/> workers Factory owner required to co-contribute ₹
Miscellaneous Provisions Act, ₹ in insurance / pension accounts of low-
1952 salaried workers
Similarly, small firms get benefit of
− Priority Sector Lending (Ref:Pillar#1A2: Monetary policy), Public Procurement Quota.
− Benefits in Government tendering such as no need to pay fees / security deposits. Some tender/contracts
are exclusively reserved for MSME.
− GST Composition scheme: where they have to submit the collected GST to Government on a quarterly
basis instead of monthly basis, if turnover less than “X” crores. (Ref: Pillar#2-GST)
63.2.1 �↘�🏭🏭: 🧔🧔 MSME ‘Dwarfism’ is caused by Govt schemes

� �ES19 observed above schemes/laws create a “perverse” incentive for firms to remain small. अलग-अलग
सरकारी योजनाएं और कानूनों म� छू ट घाट के चलते लघु उद्योगों को छोटा रहने का �वकृ त प्रो�ाहन �मल रहा है।
− If the firms grow beyond these worker / turnover thresholds they will be unable to obtain the said
benefits.
− So, entrepreneurs find it optimal to start a new firm to continue availing these benefits. But then firm
doesn’t benefit from economies of scale → they can’t create large number of jobs. (बड़े पैमाने पर धं धा करने से
होने वाले फायदे रोजगार सृजन)
− Thus infant firms → giant companies...nope; but infant firms → ‘dwarfs’. Such drawf firm contribute
neither to productivity or jobs. (बौनेपन से ग्र�सत उधोग न तो पैदावार बढ़ाते है, न तो रोजगार)
− a 40-year old firm in Mexico generates 40% more jobs than an 40-year old Indian firm.
− Productivity level for 40-year old enterprises in the U.S. was more than 4x of a newly setup firm. Whereas
in India, productivity level for 40-year old firms in India was only 60% greater than a newly setup firm.
63.2.2 �↗🤴🤴🤴🤴 MSME ‘Dwarfism’: Suggested Reforms by ES19

− Under Priority Sector Lending (PSL), banks are required to lend 7.5% of their annual loans to Micro
enterprises. These norms should be tweaked to give first preference to loan applications by ‘start ups’ and
‘infants’ firms.
− Sunset Clause for Incentives (प्रो�ाहन के �लए सूयार्� उप�नयम): MSME benefits should have a ‘sunset’ clause,
say, after 5-7 years, the firm will no longer be able to claim it. If owner starts a new firm, then based on his
Aadhar card number, the system should alert authorities, so he can’t claim the MSME benefits in the new
firm.
− Focus on High Employment Sectors such as rubber and plastic products, electronic and optical products,
transport equipment, machinery, textiles and leather & leather products,
− Focus on Service Sectors with high spillover effects (�वन प्रभाव) such as Tourism. Because it can open up
new jobs in tour and safari guides, hotels, catering and housekeeping staff, shops at tourist spots etc. It
would also reduce the migration of the rural labour force to other States.
63.2.3 � Conclusion-Template for MSME (�न�षर्)

MSMEs contribute 45% to the manufacturing sector’s output and 40%nation’s exports.
They provide employment & entrepreneurship opportunities to weaker sections of the society. Thus they play
a pivotal role for both industrial development and human development of India. <+ the SDG goals in Textile
Template> Aforementioned Policy / Scheme / Act / Bill / Reform is important to catalyse that role played by
MSMEs.
उ�ादन तथा देश के �नयार्त म� प्रमुख योगदान है. कमजोर वगर् को रोजगार के अवसर देता है. मानव �वकास के �लए और औद्यो�गक �वकास के �लए
इनको मदद देना ज�री. इस�लए उ� सुधार मह�पूणर् है या उ� सम�ाओं को अग्रता क्रम से सुलझाना ज�री
63.2.4 📘📘 📘📘 Homework: Read ES19 Vol1 Ch3- MSME

Introduction bullet 3.1. Then ‘Way forward’ from bullet 3.35 onwards.
Beyond this, pursuing individual industry specific policies / schemes in mfg / service sector = poor cost : benefit.
(e.g. Hotel & Tourism, Filmmaking, Advertizement etc)
64 🕵🕵🕵MFG → BODIES FOR QUALITY STANDARDS
64.1 🕵🕵🕵: 🥇🥇 BIS & GOLD HALLMARKING

⇒ Bureau of Indian Standards (BIS भारतीय मानकों का कायार्लय /�ूरो) is the statutory body and apex regulator of
standardization and quality certification of goods, under Consumer Affairs Ministry
⇒ Gold hallmarking is a purity certification given to gold products.
⇒ Year 2000: BIS started it, in 3 grades viz. 14 carat, 18 carat and 22 carat.
⇒ So far it was voluntary (=Non compulsory) so barely 40% of the jewellery sold in India contains
hallmarking.
⇒ From 15th January 2021, compulsory for all the jewellers to register with the Bureau of Indian Standards
(BIS) and sell only hallmarked gold jewellery and artefacts. ELSE Penalty + Jail as per BIS Act.
⇒ Direct benefit: customer assured of gold quality.
⇒ Hidden benefit: All Jewellers must register & get their products certified so tax authorities get data
mining opportunities about how much gold items traded, whether jeweller depositing proportionate
amount of taxes or evading it? Etc.
64.2 🕵🕵🕵COMMERCE MINISTRY → NOT-STATUTORY → NPC (1958)

⇒ National Productivity Council of India (NPC)- autonomous body setup under DPIIT, provides research
and consultancy service for Industrial Engineering, Agri-Business, Quality Management, Human
Resources Management etc to companies.
⇒ Commerce minister is the president of this body.
⇒ NPC represents India at Asian Productivity Organisation (APO, HQ: Tokyo, Japan).
64.3 🕵🕵🕵HEALTH MINISTRY→ STATUTORY → FSSAI (2006)
- 2019: Ministry of Health and Family Welfare will provide training & certificates to youth → they become
‘Food Safety Mitra’ → they help food processing companies / restaurants etc to comply with FSSAI
norms & earn consultancy fees from them.
BHOG Voluntary certification for the Prasad / Food at religious places.
State Food 2020-Jun: FSSAI released ranking
Safety Index ⇒ Top-3 among larger states: Gujarat, Tamil Nadu and Maharashtra
⇒ Top-3 among the smaller states: Goa, Manipur, Meghalaya
World Food June 7th.
Safety Day
FoSCoS online platform of FSSAI
✋But, such misc PIB/Yearbook type GK / ranking= poor cost benefit don’t waste time.
64.4 🕵🕵🕵POWER MINISTRY → STATUTORY → BEE (2001-02)

We had already learned about its Star labelling program and PAT mechanism. Following new developments
took place:
⇒ BEE’s Chiller Star Labelling: The traditional star labelling program is for consumer appliances for
households use. While chiller star labelling related to the big heating, ventilation, and air conditioning
devices in the commercial / factory buildings.
⇒ Separately, EESL’s Retrofit of Air-conditioning to improve Indoor Air Quality for Safety and Efficiency
(RAISE) it aims to increase quality and efficiency of AC. RAISE Joint initiative of Energy Efficiency
Services Limited (EESL, a company under Power Ministry) and United States Agency for International
Development (USAID)
64.5 🕵🕵🕵🛒🛒 CONSUMER PROTECTION ACT, 2019 (उपभो�ा सं र�ण)
Boss? Ministry of Consumer Affairs, Food and Public Distribution

Aims to replace the original act of 1986.
- � � Consumer Protection Act 2019 → bodies → Consumer court
Consumer Disputes Redressal Commissions (CDRCs: उपभो�ा �ववाद �नवारण आयोग).
CDRC at hears complaints upto ₹
District �जला �र पर 1 cr
State रा� �र पर >1 cr upto 10 cr
National रा��ीय �र पर >10 cr
Appeal structure: District → State → National → Supreme Court
- � � Consumer Protection Act 2019 → bodies → others
1. Central Consumer Protection Authority (क� द्रीय उपभो�ा सं र�ण प्रा�धकरण): It'll be an advisory body on
consumer issues, headed by the Union Minister of Consumer Affairs. Its investigation wing to be headed
by a Director-General (DG). It can intervene to protect consumers from unfair trade practices. It can also
launch class action against a company, order recall or refund of products. The agency is designed on the
lines of highly effective US Federal Trade Commission.
2. Consumer Protection Councils (उपभो�ा सं र�ण प�रषद) These advisory bodies will work for awareness
generation.
- � � Consumer Protection Act 2019 → Features
1. Product Liability (दोषपूणर् सामान / सेवा क� �ज�ेदारी): If a consumer suffers an injury, property damage or death
due to defective goods / services → company will be liable to pay for damages.
2. Unfair Contract (अनु�चत अनुबंध) e.g. asking excessive security deposits for broadband / DTH connection,
company unilaterally terminating the service without cause → Company liable to compensate the
consumer.
3. Complaints can be filed electronically; cases can be heard through video conferencing.
Punishment - Fines upto ₹ 50 lakhs + upto 5 years jail.
दंड - ₹50k fine on Consumer if filing frivolous complaints.
Celebrity Ads? If an endorser (समथर्नकार) is found giving a misleading advertisement, then he can be
banned from advertising any product upto 3 years & fine.
⇒ Provisions for mediation / Alternative Dispute Resolution (ADR) mechanism. However, No Appeal
Against Settlement Through Mediation. (कोटर् के बाहर �ववाद �नपटाना /सुलह करना)
⇒ Stricter rules for eCommerce website (Ref Pill#3A)
⇒ stricter penalties for adulteration/spurious goods. (�मलावट खोरी /नकली माल बेचना)
Conclusion? Thus, new act addresses the lacunas of the original act of '86- by providing for new methods of
filing complaints, new bodies for seeking justice and stricter penalties on violators. This will help in long way
to protect the rights of consumers in India. यह नया कानून पुराने कानून क� खा�मयों को दू र करता है. �शकायत �नवारण के �लए नई
प्रिक्रया, नए सं गठन, और �ादा स� सजा के प्रावधान- क� मदद से यह कानून- ग्राहक सुर�ा म� ब�त मदद करेगा.
64.6 ✍🎺🎺 MOCK QUESTIONS FOR MAINS
64.6.1 ✍🎺🎺 Mock Questions for Mains → Previous Years Papers

Account for the failure of manufacturing sector in achieving the goal of labour-intensive exports 2017
rather than capital-intensive exports. Suggest measures for more labour-intensive rather than
capital-intensive exports. पूंजी-सा� �नयार्त के क� अपे�ा और अ�धक श्रम सा� �नयार्त को बढ़ाने हेतु उपाय सुझाएँ ?
"Success of 'Make in India' programme depends on the success of 'Skill India' programme and 2015
radical labour reforms." Discuss with logical arguments. कौशल भारत क� सफलता और श्रम कानून म� सुधार के �बना
'मेक इन इं िडया' सफल नहीं हो सकता - ता�कक �प से समझाइए
While we found India's demographic dividend, we ignore the dropping rates of employability. What 2014
are we missing while doing so? Where will the jobs that India desperately needs come from?
Explain. भारत के पास जनसं �ा क� लाभांश तो है िकंतु रोजगार के दर कम हो रही है. हमने नई नौक�रयां कहां पर खड़ी करनी होगी?
Normally countries shift from agriculture to industry and then later to services, but India shifted 2014
directly from agriculture to services. What are the reasons for the huge growth of services vis-a-vis
industry in the country? Can India become a developed country without a strong industrial base?
�ा भारत एक मजबूत औद्यो�गक �ेत्र के �बना एक �वक�सत देश बन सकता है?
Examine the impact of liberalization on companies owned by Indian. Are the competing with the 2013
MNCs satisfactorily? �ा उदारीकरण के बाद भारतीय कं प�नयां ब�रा��ीय �नगमों से �धार् कर पा रहे ह�?
Has the Indian governmental system responded adequately to the demands of Liberalization, 2016
Privatization and Globalization started in 1991? What can the government do to be responsive to
this important change? एलपीजी सुधार के अनुसंधान म� सरकार ने और �ा-�ा करना चािहए?
64.6.2 ✍🎺🎺 Mock Questions for Mains → Minimum wages, MSME Dwarfism
1. Discuss the significance of minimum wages in reaping India’s demographic dividend. जनसां��क� लाभांश के
�लए �ूनतम वेतन का मह�
2. Examine critically the problems in the present system of minimum wages in India & suggest remedies. का
वतर्मान �ूनतम वेतन �व�ा म� �ा सम�ाएं ह�?
3. Despite India’s outstanding growth in the last two decades, low pay and wage inequality remain serious
obstacles towards achieving inclusive growth. Suggest remedies to address this problem / OR How does
the Code on Wages 2019 address this? वेतन सं िहता भारत म� समावेशी �वकास म� कै से मदद कर सकती ह�?
4. “Job creation in India suffers from policies that discourage small firms from growing large.” Suggest
remedial steps through which MSMEs’ efficacy in job creation and GDP growth rate can be augmented
further. भारत म� छोटे उद्योग को बड़ा होने म� हतो�ािहत करने वाली नी�तयों के चलते रोजगार सृजन नहीं हो पा रहा. इसके �लए सुझाव दी�जए
5. “Pro-crony policies result in destruction of wealth whereas pro-business policies help in creation of
wealth.” Comment प�पाती पूंजीवाद वाली नी�तयों से रा�ी� य धन क� तबाही जबिक �ापार वादी नी�तयों से धन �नमार्ण म� मदद हो सकती है
िट�णी क��जए
6. Examine critically the factors responsible for the uneven growth of Startup firms across various regions of
India. भारत के �व�भ� प्रादे�शक �ेत्रों म� �ाटर्अप क� असमान वृ�द्ध के कारकों क� समी�ा क��जए
7. Enumerate the steps taken under Atma-Nirbhar to revive the MSME sector in India, in the aftermath of
corona crisis. एमएसएमई उद्योगों को पुनज��वत करने के �लए आ� �नभर्र भारत अ�भयान म� उठाए गए क़दमों क� सूची दी�जए
64.6.3 ✍🎺🎺 Mock Questions for Mains → 100th birth anniversary of PM Rao (2020)
1. (GS1) Evaluate PM Rao as one of the makers/architects of modern India. (आधु�नक भारत के �नमार्ता/रच�यता के �प
म� प्रधानमं त्री नर�स�ा राव का मू�ांकन)
2. (GS3) “Legacy Rao’s reforms is an Indian economy where GROWTH has priority over Redistribution.”
Examine critically. नर�स�ा राव क� आ�थक सुधारों क� �वरासत - ऐसी अथर्�व�ा है जहां पर (अमीरों क�) आ�थक वृ�द्ध को (गरीबों म�
उसके ) पुन�वतरण से �ादा वरीयता �मली है" समी�ा क��जए
3. (GS4) “Though written in ancient times, Kautilya’s treaties are effective for modern day crisis
management.” Elucidate with an example of a modern leader/reformer. (हालांिक कौिट� के �सद्धांत प्राचीन समय म�
�लखे गए थे िकंतु आधु�नक समय म� भी सं कट प्रबं धन म� भी उतने ही प्रभावी ह�. िकसी आधु�नक नेता/सुधारक के उदाहरण के साथ �व�ृत �प से
समझाइए)
Model Answers to above Qs:= youtube.com/c/TheMrunalPatel → in search box type "RAO".
64.7 MRUNAL’S ECONOMY BATCH PRELIMS AND MAINS 2021

⇒ I’m also pleased to announce, my next ONLINE batch for Economy for UPSC CSE-2021 covering both
Prelims and Mains topics of Economy.
⇒ Night batch, Rapid revision handout, easy to understand powerpoints, weekly quiz
⇒ Coupon Code: Mrunal.org for 10% discount
⇒ Registration Link: https://unacademy.com/@mrunal.org
Stay Tuned for the Remaining [Win20CSP] Pillar#1/2/3/4/5/6’s update packs at Mrunal.Org/Download
PILLAR#4C: GDP, INFLATION, UNEMPLOYMENT
⇒ The advantage of buying Iphone, Oneplus, Nokia or AndroidOne series of phones is they provide (free) operating system updates/security
patches for 2-3 years. I believe coaching industry too needs to adopt similar business practice.
⇒ So, this ‘Win20CSP update patch/handout’ is for my old batch students who had joined my economy classes anywhere between Jan-2019 to Jan
2020. It contains updates since the end of last year’s UPSC Prelim-2019, including Full Budget 2019 (that came in July after election), (SkyBlue
cover) Economic Survey 2018-19, (Purple cover) Economic Survey 2019-20, Budget-2020 and other Current Affairs Updates from newspapers
⇒ I’ve deliberately omitted ball by ball commentary surrounding GDP/inflation/unemployment data during Corona because Economic Survey
2021 will provide a very clear picture and analysis of it. And UPSC examiners are smart to avoid ‘dynamically changing’ information.
TABLE OF CONTENTS
60 � � Economic Planning & Economic Systems ................................................................................... 138
60.1.1 � Types of Economic Planning ................................................................................................. 139
60.2 ➗ � � � [Yearbook] MOSPI, NSSO, CSO, NSO...................................................................... 139
60.2.1 ➗ � � Mahalanobis National Award for Statistics ............................................................. 140

60.2.2 MoSPI Reports’ Controversies ..................................................................................................... 140
60.2.3 ➗ � � � Standing Committee on Economic Statistics (SCES) ....................................... 140
61 � Pillar#4C: Indicators → Unemployment........................................................................................... 141
61.1 � � Unemployment → Workers Classification by NSO................................................................ 141
61.1.1 � �Census-2011 classification of workers .............................................................................. 141
61.2 � Unemployment → NSO Survey Types .......................................................................................... 142
61.3 � Indicators → unemployment rate (UR)........................................................................................ 142
61.4 �/( � �) Indicators → Worker Population Ratio (WPR) ......................................................... 142
61.5 �/( � � �) Indicators → Labour Force Participation Rate (LFPR) ....................................... 143
62 � � �Pillar#4: Indicators → GDP ..................................................................................................... 144
62.1 � � �Post-Corona: V-shaped recovery for India? ....................................................................... 144
62.2 � � GDP Growth rate of India & World is ⏬, says ES20 ........................................................... 144
62.3 �ES20 Vol1ch10: India GDP is not overstated ................................................................................. 145

62.3.1 Growth rate: why fall / decline? ................................................................................................... 145
62.3.2 � � Declining Growth rate: future risks / challenges ........................................................... 146
62.3.3 � � Global Risk Report (वै��क जो�खम �रपोटर्) ............................................................................. 146
62.3.4 � � � �Declining Growth rate: glass is still half-full! ....................................................... 146

62.3.5 World Bank-ICP's GDP series based on PPP.............................................................................. 147
62.3.6 � (Full) Budget-2019: $5 Trillion economy ............................................................................ 147
(Batch: Win20CSP) Mrunal’s Economy Pillar#4C: GDP, Inflation, Unemployment → Page 137
62.4 � �ES20 Vol1Ch1 on Wealth Creation (धन सृजन)............................................................................ 147
62.5 �
� ES19: GDP growth harmed during Economic Policy Uncertainty ...................................... 149
62.6 � � ES19: How to reduce Economic Policy Uncertainty ............................................................... 150

62.6.1 Make Policies predictable (पूवार्नुमान करने यो�) ............................................................................... 150
62.6.2 Keep consistency in promises (वादों म� सामं ज� / �नरंतरता र�खये) ....................................................... 150
62.6.3 Policy implementations must be monitored ............................................................................... 150
62.6.4 Respect boundaries ........................................................................................................................ 151
62.6.5 � Conclusion: Policy Uncertainty ............................................................................................ 151
62.6.6 � Conclusion: 5 Trillion economy? ......................................................................................... 151
62.7 � � � � � GDP → $5 Trillion → Atma-Nirbhar Bharat ..................................................... 151
62.7.1 � � � � � Atma-Nirbhar Bharat Salient features ......................................................... 151
62.7.2 � � � � Atmani-Criticism: 20lcr = insufficient to revive Indian economy ................... 153
62.7.3 � � � � Atmani-Criticism: ................................................................................................. 153
62.7.4 � � � Atmani-Criticism: Nehru’s Ideas vs Modi’s Ideas .................................................. 153
62.7.5 � � � Atmani-Alternate Suggestions to revive Economy: अ� सुझाव ................................. 153
62.9 T � � Mains Questions: GDP, Economic Growth ................................................................................. 154
62.9.1 T � � Mains Questions → Mock Questions → Atma-Nirbhar ................................................ 154
62.9.2 T � � Mains Questions → Mock Questions → GDP Growth................................................... 154
62.9.3 T � � Mains Questions → Previous Years’ official Questions .................................................... 154
63 �Pillar#4C: Indicators → Inflation ........................................................................................................ 155
63.1 � � �: Inflation observations by ES20 Vol2Ch5.......................................................................... 155
63.2 � � � Thalinomics by ES20: Vol1Ch11 ........................................................................................ 156

63.3 Mock Questions for Mains → Inflation .............................................................................................. 156
63.4 Mrunal’s Economy Batch Prelims and Mains 2021 ............................................................................ 156
60 �🧔🧔 ECONOMIC PLANNING & ECONOMIC SYSTEMS
While we had studied socialism, capitalism and mixed economy in the full length economy course. Here are
some minor theory tit-bits because UPSC IES exam contained some MCQs from it:
60.1.1 📚📚 Types of Economic Planning

⇒ Totalitarian planning (in USSR, N.Korea) vs Democratic planning (India). सवर्स�ा�क vs लोकतां�त्रक
⇒ Centralized (in USSR, N.Korea) Vs Decentralized (India- after 73rd and 74th Amendments) के �ीकृ त vs
�वक� द्रीकृ त
Planning by Inducement (प्रलोभन द्वारा) by Direction (�दशा�नद�शन)
People are induced to act in a certain way through monetary policy Central authority will give
and fiscal policy predetermined targets and
priorities.
Indicative Planning (सूचक) Imperative (आदेशा�क)
⇒ Started in France by Monnet plan ⇒ State & Public sector
⇒ Found in mixed economies companies have complete
⇒ Government prepares an outline of plan after consulting with control over resources.
public and private sector. They are given funds, incentives, ⇒ No private sector involved.
subsidies, tax breaks to maximize production, income & ⇒ No consumer sovereignty.
employment ⇒ Imperative planning
⇒ Government does not force the private sector but just indicates procedure is strict and
the areas of cooperation and targets to be fulfilled. rigid. E.g. USSR, N Korea
⇒ Indicative planning procedure is soft and flexible. E.g. India,
France
Financial planning Physical planning
technique of planning in which resources are allocated in terms of allocation of resources in terms of
money men, materials and machinery
Table 1: Types of Planning based on timeframe

Planning → Operational Tactical Strategic/Perspective
Timeframe → Short upto 1 year Medium: 3 to 7 years Long: 10 years or more
�❓Which one of the following is the correct sequence of formation of the Commissions starting from the
earliest? (UPSC-CDS-i-2020)
A. Finance Commission (FC), Planning Commission, Investment Commission, Election Commission
B. Election Commission, Planning Commission, FC, Investment Commission
C. Planning Commission, Election Commission, FC, Investment Commission
D. Investment Commission, FC, Planning Commission, Election Commission
Statistical data is required to prepare an economic plan or fiscal policy & to monitor its success or failure. And
that leads to the next topic →
60.2 ➗📊📊 🕵🕵🕵📈📈 [YEARBOOK] MOSPI, NSSO, CSO, NSO

Ministry of Statistics and Programme Implementation (MOSPI: सां��क� और कायर्क्रम कायार्�यन मं त्रालय)’s
administrative head is called ‘Secretary & Chief Statistician of India’ (भारत के मु� सां��क��वद)् .- usually, Indian
Statistical Service officer recruited by UPSC. MoSPI has →
1. � National Statistical Office (NSO: रा�ी� य सां��क� कायार्लय) →
a. Central Statistics Office (CSO: क� द्रीय सां��क� कायार्लय) → computation of GDP, GSDP, IIP, ASI,
CPI (Rural, Urban, All India) and Economic Census (6th was done in 2013);
b. National Sample Survey Office (NSSO: राष्ट�ीय प्र�तदशर् सव��ण कायार्लय) → data collection for various
socio-economic indicators, Annual Survey of Industries (ASI), Rural-urban prices and other data
required for CSO’s calculations.
c. 2019-June, MoSPI merged A+B, henceforth it’ll be called National Statistical Office (NSO) only.
it will be headed by Chief statistician of India-cum-Secretary of MoSPI. (Earlier, C Rangarajan’s
National Statistical Commission in 2005 had recommended this CSO+NSSO Merger). Further,
MoSPI also planning to setup a National-Level Data Warehouse: It’ll act as a central repository
of all the statistical data collected various ministries, and provide big data analytics.
2. � Programme Implementation wing (कायर्क्रम कायार्�यन �ं ध) →
a. Member of Parliament Local Area Development Scheme (MPLADS-1993: सांसद �ानीय �ेत्र �वकास
योजना) → each MP can suggest development works worth ₹ 5 crore per year in his constituency.
(More in Pillar#5: Rural infra)
b. Twenty Point Programme (2006: बीस सूत्री कायर्क्रम) to measure performance of various schemes
related to poverty alleviation, employment generation, housing, education, health, etc.
c. Infrastructure Monitoring and Project Monitoring.
60.2.1 ➗📊📊📊📊 Mahalanobis National Award for Statistics
⇒ P. C. Mahalanobis= Father of Indian Statistics. Architect of 2nd Five Year Plan (FYP)
⇒ MoSPI gives P. C. Mahalanobis National Award for outstanding work in statistics.
⇒ 2020: Given to C. Rangarajan (ex-RBI governor). He's the 1st person to win it.
60.2.2 MoSPI Reports’ Controversies
- 2019-Jan: Two members resigned citing “Over the months, we have been feeling that we were not been
taken seriously and being sidelined by the government. NSC had approved the Employment Survey 2017-18
but it’s not yet released.” Critics allege this Employment survey shows jobs fell after demonetization / GST
so Modi did not want data released.
- Former RBI Governor Dr. Raghuram Rajan and Former CEA Arvind Subramanian expressed doubts
about the data collection methodologies of Indian Government.
- international organisations will lose confidence in India's data collection methodologies. They will not
believe fully, even if the Indian economy is growing really.
- Large sized economy has to contribute more money to IMF & in return gets more voting rights in IMF
board (e.g. USA). But, if IMF loses confidence in our data collection methodologies, they may not ⏫ our
quota, even if we become an economic superpower.
- International credit rating agencies such as Standard & Poor's (S&P), Moody's, and Fitch Group will give
poor ratings to Indian G-Sec and corporate bonds → Foreign investors will feel shy about investing in
India or they will demand higher interest rates.
60.2.3 ➗📊📊 🕵🕵🕵📈📈 Standing Committee on Economic Statistics (SCES)
(2019-Dec) To improve the quality of data, MoSPI setup a Standing Committee on Economic Statistics (SCES:
सां��क� पर �ायी स�म�त) with 27 members + 1 Chairman (Ex-Chief Statistician Pranab Sen) = 28 persons.
⇒ This new SCES Committee subsumes previous 4 Standing Committees on 1) labour force statistics, 2)
industrial statistics, 3) services sector and 4) unincorporated sector enterprises.
⇒ SCES will review the existing framework/methodology/data collection for IIP, periodic labour force
survey, economic census etc.
⇒ Chairman Pronab Sen suggested that
o Government should announce a specific calendar that on ‘x’ date of each month or quarter, ‘y’
Macroeconomic indicator data will be released.
o This way critiques will have more confidence in the data released by the Government.
�❓ National Statistical Commission was established on the basis of the recommendations of which one of
the following commissions/committees? (UPSC-Geologist-2020)
A) Rangarajan B)Lodha C) Santhanam D) M.G.K. Menon Committee
61 � PILLAR#4C: INDICATORS → UNEMPLOYMENT
61.1 👷👷👷� UNEMPLOYMENT → WORKERS CLASSIFICATION BY NSO

self-employed ⇒ those who work for themselves & charge 'fees'. They do not sell their labour
�-रोजगारी power to anyone else for a "wage", so they are their own 'boss'. सेवा के बदले फ�स लेते
है.तन�ाह/वेतन नही
⇒ subcategories: 1) Own Account 2) Partners / Owners / Employers Of Business
Firm 3) Unpaid Family Labourers
regular ⇒ �नयत वेतनभोगी कमर्चारी
wage/salaried ⇒ They sell their labour to 'boss (employer)', for predetermined wages/salary.
employees Their job continuous round the year.
casual workers ⇒ They sell labour for 'wage' but 'boss (employer) hires them for very short time
अ�नयत कमर्चारी period on daily or monthly basis.
Table 2: Number of workers in each category in PLFS: 2017-18
High to low 1 2 3 4 5
� (Male, Own account Casual salaried Unpaid family 2% Employer (those
Female workers workers employees labourers. who give jobs to
Combined) others)
�Male only Same descending order as above.
�Female only Unpaid family Casual salaried Own account 0.5% Employer
labourers worker employees workers within female
labourers
61.1.1 👷👷👷�Census-2011 classification of workers
Worker type Employed for this much duration in a year
Main worker 6 months or more. (183 days to be precise)
Worker type Employed for this much duration in a year
Marginal worker less than 6 months.
�❓According to Census of India, ‘Main Worker’ is a person who works for at least _ _ days in a year
(UPSC-Geologist-2020)
A) 100 days in a year. B) 153 days in a year. C) 183 days in a year. D) 200 days in a year.
61.2 � UNEMPLOYMENT → NSO SURVEY TYPES
NSO surveys → Quinquennial Employment and Periodic Labour Force Survey (PLFS
Unemployment Surveys आव�धक श्रम बल सव��ण)
Survey frequency? Every 5 years. Starting from 1972 Last ⇒ Annual. Started since 2017
survey done in 2011-12. Then ⇒ 2017’s result announced in 2019.
discontinued
Which households Non-agriculture workers in rural and ⇒ 75% of the surveyed house should
are surveyed? urban areas have a minimum one class10 pass
person.
⇒ Both urban & rural, agro & non-
agro covered.
61.3 � INDICATORS → UNEMPLOYMENT RATE (UR)

� �Labour force (श्र�मक वगर्)= Those who are 'working' (or employed) + Those 'seeking or available for
work' (=involuntarily unemployed).
Unemployment rate finds involuntarily unemployed persons via following formula:
� �𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 (𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖) 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑖𝑖𝑖𝑖 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓
Unemployment Rate (UR) = � � × 100
𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 � � � �
Table 3: NSO measures unemployment in 3 different approaches viz.

Current Weekly Status If not employed even 1 hr work in a week
Current Daily Status If not employed even 1 hr work in a day in a given week.
Usual Status - It’s further subdivided into Principal activity status (ps) and Subsidiary
(US) economic activity status (ss) but internal difference poor cost benefit.
- If person’s usual status (pp+ss) was “Unemployed” for majority of the
year → he’s deemed unemployed.
- In official reports, this figure is given more prominence.
- 2019-Jun: NSO’s periodic labour force survey (PLFS: आव�धक श्रमबल
सव��ण) says unemployment rate is 6.1% as per (US PP+SS: 2017)
which is highest in last 45 years. **
** Although � �ES20 chose to highlight only the positive data. That from 2011 to 2017: unpaid family
labour has ⏬ etc.
61.4 👷👷👷/( 👷👷👷�) INDICATORS → WORKER POPULATION RATIO (WPR)
It is the percentage of employed persons in the population.
𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 ��
� � × 100
𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑜𝑜𝑜𝑜 𝑡𝑡ℎ𝑒𝑒 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 � � � � � �
61.5 👷👷👷/( 👼👼👼👼👼👴👴) INDICATORS → LABOUR FORCE PARTICIPATION RATE (LFPR)
श्रम बल भागीदार� दर (LFPR) is the % of persons in labour force (i.e. working or seeking or available for
work) in the population.
𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 � � + �� 𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
� � × 100
𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑜𝑜𝑜𝑜 𝑡𝑡ℎ𝑒𝑒 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 � � � � � � � �
- 2017: 37% (male+female in rural+urban combined). It can’t be 100% because there will be children,
elderly outside the ‘15-59’ age group meant for workers.
- �LFPR for female: Replace the word ‘person’ with ‘female’ in above formula. It’s lower than male LFPR.
𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 �+ �𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑖𝑖𝑖𝑖𝑖𝑖𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓
⇒ 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿(𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓) = � �× 100
𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑜𝑜𝑜𝑜 𝑡𝑡ℎ𝑒𝑒 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 � � � �
Table 4: source 📔📔📔📔ES20 Vol2ch8
Female LFPR Trend Female occupation trend (2017-18)
Employer
0.5%… Own account
Unpaid 20%
Family
workers
32%
salaried
employees
21%
casual
workers
27%
� �ES20 observed: 2004 to 2017, LFPR (Female: rural+urban) steadily ⏬ because

 ⏫ women pursuing higher studies → their entry in the job market is delayed.
 ⏫ in income of (some) rural men → their wives have stopped working as labourer and just playing
domestic housewives role.
 ⏫mechanization of agriculture & animal husbandry → ⏬ demand for female agri workers.
 ⏬ textile/leather exports due to US/EU protectionism → ⏬demand for female workers
 ⏬real estate sales → ⏬ construction of new buildings → ⏬female laborers
 Cultural factors, social constraints and patriarchal norms restricting mobility and freedom of women.
 Many rural / small-town girls don’t have require knowledge of computer and English to get jobs in
emergent startup sectors.
Solution? Government schemes for skill development and entrepreneurship among women → Ref: Pillar6-
HRD → Women empowerment.
62 🌽🌽⌚🎧🎧PILLAR#4: INDICATORS → GDP
⇒ Gross Domestic Product (सकल घरेलू उ�ाद) is the market value of all the goods and services produced
within the domestic territory of a country during a specified time period, usually one year.
⇒ Here, domestic territory = political frontiers of the country including its territorial waters, ships, aircrafts,
fishing vessels operated by the normal residents of the country; AND its embassies, consulates located
abroad. (as per NIOS textbook)
62.1 🤧🤧🤧🤧🤧🤧POST-CORONA: V-SHAPED RECOVERY FOR INDIA?

⇒ IF GDP growth suffers a sharp economic decline → then quickly recovers. So graph will appear "V-
shaped".
⇒ 1918-1920: Spanish Flu: USA growth falls to (3.5%) → afterwards quickly recovers to (7.5%) = V-shaped
recovery.
⇒ 2020: CEA Subramanian K. predicts, "History will repeat itself for India- IF Corona vaccine is found
sooner."
62.2 📐📐📐📐 GDP GROWTH RATE OF INDIA & WORLD IS ⏬, SAYS 📔📔📔📔ES20
Figure 1: source 📔📔📔📔ES20 vol2ch1

Real Growth 2017-18 2018-19 2019-20 2020-21 (Estimated)
⇒ 5.8% (IMF’s world economic
outlook)
India 7.2% 6.8% 5.0%
⇒ 5.8% World Bank’s Global
Economic Prospects
Real Growth 2017-18 2018-19 2019-20 2020-21 (Estimated)
⇒ 6.0-6.5% as per Economic
Survey 2019-20*
3.3% (IMF’s world economic
World 3.8% 3.6% 2.9%
outlook)*
*these estimates given before Corona. � �
62.3 📐📐📔📔📔📔ES20 VOL1CH10: INDIA GDP IS NOT OVERSTATED
⇒ 2015: India changed its GDP Base year from 2004 to 2011. It was done to comply with the System of
National Accounts (SNA-2008) of the United Nations.
⇒ Using 2011 as base year prices, India’s
o Average annual GDP growth rate was approximately 7% (2011 to 2016).
o Average annual GDP growth rate was approximately 7.5% (for the last five years that is 2015-
2019).
⇒ 2019-March: Former RBI Governor Raghuram Rajan expressed doubt over India’s 7% growth rate. He
felt it was overstated (वा�तीक अंक से �ादा बढ़ा चढ़ाकर िदखाया है)
⇒ 2019-June: Former CEA Arvind Subramanian published a research paper
o He compared the growth rate figures against India’s exports, imports, loans to industry,
petroleum consumption, railway freight traffic, electricity consumption, etc.
o He did not find strong evidence of 7% GDP growth. He estimated it’s only 4.5%.
o That means, India’s growth rate has been overestimated by 7.0-4.5 = 2.5%. (भारत के जीडीपी वृ�द्धदर को
बढ़ा चढ़ाकर दशार्या जाता है )
⇒ So, if Raghuram Rajan & Arvind Subramanian are right then either
o The Government's data collection methodology is wrong (डाटा को इकट्ठा करने का तरीका/कायर्प्रणाली गलत
है) and/or
o Collected data is manipulated / doctored. (डाटा के साथ छे ड़खानी क� जाती है.)
� �ES20: CEA Subramanian K. has dedicated a entire chapter to prove how above criticism (By
Raghuram Rajan and Arvind Subramanian) is invalid.
⇒ He did a lot of ‘bol-bachchan’ using heavy academic words like Difference-in-difference (DID) Method,
variable bias in regression models, etc.
⇒ He basically tried to prove that all those national and international analysts are wrong. India’s GDP is not
overstated or mis-calculated.
⇒ �But in terms of MCQ worthy content, there is hardly anything noteworthy.
62.3.1 Growth rate: why fall / decline?
⇒ Protectionism in China and the USA (सं र�णवाद), US-Iran geopolitical tensions (भू-राजनी�तक तनाव) → global
trade is affected.
⇒ Consequently the investment and manufacturing production has ⏬ even in the G7 and OECD group of
countries. India’s not the only country suffering from exports
⇒ Sharp ⏬in the automobile purchase. This problem will further worsen with Bharat-6 emission norms.
Such vehicles are more expensive compared to the previous models.
⇒ Virtuous Cycle of Growth (सं व�ृ द्ध का सु-चक्र):
o ⏫ investment → ⏫ economic growth → ⏫ consumption → ⏫ investment.
o In India, investment slowed down in the aftermath of Nonperforming assets - Twin balance
sheet syndrome (TBS) & IL&FS-NBFC Crisis. (Ref: Pillar#1B)
o Although now things are improving, but, it takes two to four years for the cycle to restart again.
⇒ IMF research found that if there is a sudden ⏫in loans, → increased production, employment and
demand. But this positive effect remains only for a short term.
o In the long term, it’ll cause a ⏬in growth rate.
o Same has happened in India: during the mid-2000s (before the subprime crisis), the lending
quantity was very high → later growth ⏬
According to critiques, the demonetization and GST too have harmed the growth rate but �
�ES20 chose to
remain silent on that part.
62.3.2 📐📐📐📐 Declining Growth rate: future risks / challenges
ES20 vol2ch1 identified following challenges:
⇒ US-Iran geo-political → crude oil price ⏫ → weaker rupee → higher inflation → reduced
consumption → GDP declines.
⇒ Even after the Insolvency Bankruptcy Code, the bad loan resolution process has been very slow. Banks
reluctant to give loans to the corporate sector → GDP can’t expand.
⇒ Government's National Infrastructure Pipeline (NIP) aims to spend 102 lakh crore on infrastructure in
the next five years. But then government will have to borrow more money → ⏫ fiscal deficit →
crowding out of the private investors → GDP cannot expand. (More in Pillar#5:infra)
⇒ Unless real estate developers reduce home prices, It is difficult to sell the unsold homes → Builders will
not build new homes → ⏬ demand of Steel and cement → GDP cannot expand.
⇒ 2019: India is among the top 5 economies of the world in terms of GDP at current US$ trillion i.e. USA
(21 Tn$), China ($14), Japan ($5), Germany ($3.9), India ($2.9)
⇒ 2024-25: We plan to increase the size of our economy to 5 trillion. But to achieve this, we need 9% GDP
Growth rate annually, which is rather difficult because presently we are struggling around 5%
⇒ � �Corona lockdown.
62.3.3 📐📐📐📐 Global Risk Report (वै��क जो�खम �रपोटर्)
⇒ World Economic Forum’s (WEF’s) Global Risks Report 2020 shows that the global risks over the coming
decade. Notable risks are
⇒ 2020: weather, climate, natural disasters, biodiversity loss, water crisis, weapons of mass destruction.
(मौसम, जलवायु, प्राकृ �तक आपदा, जैव �व�वधता क� हा�न, जल सं कट, सामूिहक �वनाश के ह�थयार)
⇒ 2019: similar to above and cybersecurity, data theft, data fraud. (साइबर सुर�ा, डेटा चोरी/धोखा धड़ी)
62.3.4 📐📐🕵🕵🕵🥛🥛🥛🥛Declining Growth rate: glass is still half-full!
⇒ Among the BRICS Nations, India's growth rate is still relatively better and stable than Brazil, China,
Russia.
⇒ Even though the GDP growth rate is falling, Bombay Stock Exchange (BSE) SENXSEX is improving.
Which means both domestic and foreign investors are still investing enthusiastically in the shares of
companies → Which means they are confident that the Indian economy will improve in the upcoming
days.
⇒ By doing the quarterly growth analysis since 1996, CEA Subramanian K. found India’s business cycle is
about 13 quarters.
⇒ Meaning, after every 13 quarters, we will achieve the highest level and then it will start to fall.
⇒ Presently we are at the “Fall phase”, But definitely improve after that as per the historic trend of our
business cycles.
62.3.5 World Bank-ICP's GDP series based on PPP
⇒ UN Economic and Social Council → United Nations Statistical Commission →
International Comparison Program (ICP)
⇒ ICP's goal is to convert data on Purchasing Power Parities (PPPs) so GDP and price levels can
compared. More on PPP = Ref Pillar#3A:
⇒ 2020-June: World Bank released new datasets for 2017, using ICP.
GDP for 2017 Entire world #1 China #2 USA #3: India
$1=₹21 (PPP)
(PPP $, Trillion) 120 Trillion abt 20 trillion abt 20 trillion 8 trillion
% of total 100% 16.4% 16.3% 6.7%
62.3.6 💼💼 (Full) Budget-2019: $5 Trillion economy
Year India’s GDP in trillion $ (Current Prices)
2014-15 1.85 trillion
2018-19 2.70 trillion
2019-20 2.90 trillion
2024-25 5 trillion targeted (i.e.by 31/3/2025)
- ES19 has given blueprint for this and said, “We kept the cover of this survey in skyblue color, because
we’ve given blueprint for $5 trillion economy.”
- Counterview: Former RBI Governor C.Rangarajan said India cannot achieve 5 trillion dollar economy by
2025, because to achieve it, we’ll have to grow at 9-10% annually but at present we are struggling with 5-
6% growth rate. या�न क� हमसे ना हो पाएगा
62.4 📔📔📔📔ES20 VOL1CH1 ON WEALTH CREATION (धन सृजन)

⇒ Until the entry of Europeans, India has been the dominant global economic power.
⇒ Then our GDP growth started to ⏬ during British Raj and Nehruvian Socialism.
⇒ But since 1991’s LPG reforms, again we are back on track.
� �ES20 identified following benefits of wealth creation by private entrepreneurs:
Employees, suppliers, retailers ⏫ income, jobs
Government ⏫ tax collection
Common citizen ⏫ quality of roads, schools, hospitals created through the tax
revenue
Then, CEA Subramanian K. talks about “wealth creation” in context of GDP and Per Capita GDP. He uses
ancient and modern thinkers/economists to suggest how to ⏫ our wealth
Thinker How CEA Subramanian K. links their ideas with wealth creation
Kautilya ⇒ Kautilya’s Arthshastra book is centred around Varta (economic policy),
Dandaneeti (law and enforcement), Anvikshiki (philosophical and ethical
framework) and Trayi (cultural context)
⇒ Kautilya asked the King to remove all obstructions to economic activity and
provide economic freedom to the citizens. (आ�थक ग�त�व�ध म� सभी �कावट� हटाकर आ�थक
�तं त्रता प्रदान करना)
So, Modi should also focus on Ease of Doing Biz (�ापार म� सुगमता)
Thiruvalluvar ⇒ Thiruvalluvar’s Thirukural book advocates wealth creation through ethical means.
Tamil poet and (धन सृजन करना चािहए, िकंतु नै�तक तरीके से)
philosopher. ⇒ Govt should provide equal opportunity for new entrepreneurs, Modi should avoid
Pro-Crony policies of ManMohan. (Recall Pillar4B: mfg → EoD, प�पाती पूंजीवाद से
बचो)
⇒ There should be no shame in privatization (Strategic disinvestment) of the
government companies, Because after privatization their profitability has ⏫.
(Recall Pillar#2:Disinvestment)
Adam Smith Adam Smith's book ‘An Inquiry into the Nature and Causes of Wealth of Nations’
Father of described “Invisible hand of the free market is instrumental in economic growth” (मु�
Economics बाजार का अ�� हाथ ही आ�थक वृध्धी िदलाता है).
⇒ But Government intervention in free market often harms more than it helps.
(Recall Pillar4A: FCI procurement, Essential Commodities Act. मु� बाजार म� सरकारी
दखल से लाभ कम नुकसान �ादा)
David Hume, “We should assume every man is a knave (=dishonest person), his actions are always
Scottish driven by private interest. So, effective supervision required”. (सब लोग बेईमान और �ाथ� ही
Philosopher होते ऐसा सोचकर सरकार ने स� �नगरानी रखना ज�री.)
⇒ So, we’ve to regulate the Shadow banking sector (प्र�तछाया ब�क) more vigorously.
(Ref#1B)
⇒ We must deal with the wilful defaulters responsible for the high level of NPA. →
use Artificial intelligence, Machine Learning etc., create PSBN network. (Ref#1B)
⇒ American Sharemarket regulators has 15x times the number of employees than
SEBI. So, we also need to increase manpower in regulatory bodies. (Ref#1C)
Motivation Abraham Maslow’s Motivational Pyramid: “Individuals are not driven just by physical
प्रेरणा / material, but they also have needs of self-esteem and self-actualization” (�� क� प्रेरणा
का �ोत �सफर् भौ�तक सुख नहीं, ब�� आ�-स�ान और आ�-प्रा�� भी होते ह�)
Thinker How CEA Subramanian K. links their ideas with wealth creation
Confucius: “if Government guides the people with penalties → they’ll shamelessly
evade the law. But if the Government guides them with virtue → people will become
upright.” (सरकार सद्गुण के साथ मागर्दशर्न करती है → लोग ईमानदार हो जाएं गे।)
⇒ Therefore we should use the ideas of behavioral economics to increase their morale
to (�वहार अथर्शा�, नै�तक �र बढ़ाएं )
⇒ 1) Give up subsidies and
⇒ 2) honestly pay taxes (Ref: Pillar#2)
Trust Adam Smith’s book ‘The Theory of Moral Sentiments’ described, “while people are
�व�ास sometimes selfish, they also derive pleasure from seeing the happiness of others.
⇒ Absence of such mutual sympathy / trust (पर�र सहानुभ�ू त / �व�ास) can result in
financial disasters, as seen in Subprime Crisis, Global Financial Crisis, India’s NPA
& Wilful defaulters.
⇒ So, trust is a ‘public good (सावर्ज�नक व�ु)’ similar to ‘streetlight’- everyone benefits
from it. Government & entrepreneurs should try to build trust with citizens and
with each other.
Further, “Assemble in India”, “Agri Exports” → ⏫Export → ⏫GDP etc= Ref: previous handout
(Pillar#4A & 4B).
62.5 👳👳👳🤕🤕 ES19: GDP GROWTH HARMED DURING ECONOMIC POLICY UNCERTAINTY
Economic Policy Uncertainty Index (EPU: आ�थक नी�त अ�न��तता सूचकांक) index Started in 2016, by three US-
based economists—Scott Ross Baker, Nick Bloom and Steven J. Davis.
− They capture countries’ newspapers’ headlines related to economic policy uncertainty, and then rank the
nation accordingly.
− 2011-12: economic policy uncertainty was the highest in India.
− 2G Scam, Coal allocation scam, Subprime Crisis, Global Financial Crisis.
− During this time, the government did not take the corporate friendly reform decisions or reverted its
original decisions fearing the media scrutiny, judicial scrutiny, protest by the labour unions.
− 2016-17: increased due to Demonetisation, GST. But during this stage it was not as bad as the uncertainty
during 2011-12.
− From 2014 onwards India’s EPU has declined although in a zigzag manner with occasional spikes during
Demonetization - GST etc. Whereas Global EPU has increased in zigzag manner- due to the Policies
pursued by Donald Trump, BREXIT, Iran, N.Korea, OPEC, Trade war between USA and China etc.
− During high EPU: domestic investors hold up their decision to invest into financial market. They prefer
to invest in gold (=large BOP), land / real estate (=Black money). FPI inflows decline during are volatility
of exchange rate.
− However, the relationship between FDI growth and volatility of exchange rate is weak. Because Foreign
Direct Investors are entering a market for long term. They look at multiple factors beyond just the
exchange rate. They look at taxation, monetary policy, consumer sentiment etc. all which are reflected by
EPU.
− Low growth of FPI, FDI = Corporates are deprived of the new capital from the domestic and foreign
investors → it affect the factory expansion, job creation and GDP growth.
62.6 📔📔📔📔 ES19: HOW TO REDUCE ECONOMIC POLICY UNCERTAINTY

Reducing economic policy uncertainty is critical for both domestic investment and foreign investment.
Therefore, ES19 suggested following reforms:
62.6.1 Make Policies predictable (पूवार्नुमान करने यो�)

Top-level policymakers must ensure that their policy actions are predictable. E.g.
− From which date Bharat Stage emission norms will become effective?
− From which date GAAR or E-Way Bill will become effective?
− 2016-Budget proposed to impose income tax on the money withdrawn by subscriber from his EPFO
fund. Later, due to labour unions backlash it was reverted.
− 2019-Budget proposed to hike surcharge on the income tax of super-rich, then due to a backlash by
foreign investors, it was reverted.
62.6.2 Keep consistency in promises (वादों म� सामं ज� / �नरंतरता र�खये)

Government / Regulators should maintain broad consistency in actual policy with the forward guidance. They
should reduce ambiguity/arbitrariness in policy implementation. E.g.
− 2018-Dec: Monetary policy Committee keeping “Calibrated Tightening”. Means in the next meeting they
would either ‘hold', or 'increase' repo rate. No chance of cutting the repo rate. Yet in 2019-Feb, they cut
the repo rate.
− Similarly, Government should avoid changing the goalposts and deadlines of Fiscal Responsibility and
Budget Management Act. Then consistency becomes hard to find and harder to follow.
62.6.3 Policy implementations must be monitored

− “What gets measured gets acted upon”. Therefore, Government must monitor its performance in the
Economic Policy Uncertainty Index on a quarterly basis. We should construct India-specific sub indices
of economic uncertainty To monitor our performance.
− The actual implementation of policy occurs at the lower levels, where ambiguity gets created and it
compounds the economic policy uncertainty. Therefore, staff should be trained and implementation
processes should be certified (by NITI etc) before implementing policy.
− Poorly drafted laws full of ambiguities, amendments, clarifications and exemptions = endless litigation.
E.g. Provisions related to Capital Gains Tax in the Income Tax Act 1961: Vodafone-Hutch case.
62.6.4 Respect boundaries
 Judiciary, legislature and executive should respect each other's boundaries. Executive and legislature
should not create a vacuum which could encourage Judicial Overreach (�ा�यक अ�त�व�ार) such as
firecracker ban, or no selling of liquor on highway hotels, which may create new challenges in economy.
62.6.5 � Conclusion: Policy Uncertainty

 Indian faces economic uncertainty from many fronts which are beyond our control e.g. Poor monsoon,
BREXIT, OPEC Oil cuts, Geopolitical disturbance in the Korean Peninsula and Western Asia (Iran),
protectionism and tariff wars.
 While policymakers can not control above ‘economic and diplomatic uncertainties’, they can definitely
control economic policy uncertainty.
 Successive economic surveys have found that greater private investment is necessary for economic
growth in India. EPU can spook investors and spoil the investment climate in the economy, therefore
Government must strive for 100% policy certainty on the economic fronts.
� � Homework: Economic Survey 2018-19 Vol1 Ch6 Read Introduction upto Bullet 6.2. Then, read
Conclusion from Bullet 6.22.
62.6.6 � Conclusion: 5 Trillion economy?

 Higher economic growth can help increasing employment avenues for citizens & tax revenues for the
Governments.
 Collectively, this results in improved living standards through higher expenditure on health & education
by both the citizens and the State.
 Therefore, we must leave no stone unturned to accomplish above targets / address above challenges on
priority basis.
62.7 👻👻🌽🌽⌚🎧🎧🎧🎧 GDP → $5 TRILLION → ATMA-NIRBHAR BHARAT
⇒ (Origin) 2020-March: Government of India initiated nationwide lockdown to prevent the spread of
Corona/COVID-19 pandemic. (कोरोना महामारी के चलते देश�ापी तालाबं दी)
⇒ This lockdown affected the income and livelihood of everyone from corporate companies to common
citizens of India. (सबक� आजी�वका को हानी �ई)
⇒ Therefore, to revive the economy, Prime Minister of India launched Atma Nirbhar Bharat stimulus
package in 2020-May to revive the Indian economy. (अथर्�व�ा को पुनजीवन / प्रो�ाहन का आ�थक पेकेज)
⇒ It’s centred on five pillars of – Economy, Infrastructure, System, Demand and Vibrant Demography
(�ू �तली जनसां��क�).
62.7.1 👻👻🌽🌽⌚🎧🎧🎧🎧 Atma-Nirbhar Bharat Salient features
<REFER To respective pillar’s handouts>
Mrunal's Pillars Atma-Nirbhar Salient Features (List not exhaustive)
⇒ RBI's easy monetary policy, loan moratorium, Additional loan towards States
(WMA, CSF), NBFCs & Mutual Funds, Postponed Basel norms
1A, B,C:
⇒ Government schemes for loans towards NBFCs, MSME
Money Banking
⇒ IBC code suspended
Finance
⇒ Allowed Indian companies to directly list their shares in foreign exchange
⇒ Relaxed penalties in the Companies Act
⇒ ₹50 lakh insurance if Corona health worker died
⇒ Expanded the coverage of workers in ESIC
⇒ EPFO: small firms → Government to pay the money
1D: insurance ⇒ EPFO: large firms → Govt ⏬%
& Fin Inclusion ⇒ Promised social security, health check up etc for unorganised sector workers
⇒ Direct money transfer of 500-1000 rupees in PM-JDY women accounts, Senior
citizen accounts, PH etc.
⇒ Loans for SHG, MSME, Street Vendors (SVANIDHI)
⇒ Extended the deadline for filing taxes
⇒ Reduced TDS rates
2: Public Finance
⇒ Changed the policy of disinvestment
taxation
⇒ Promise to help the states finances
⇒ PM CARES fund for accepting donation
⇒ RBI's VRR and FAR windows for attracting $$
⇒ Borrowed billions of $$ from BRICS-NDB, AIIB, ADB, World bank etc To revive
3: International Indian economy
trade ⇒ Banned the import of 101 defense items. FDI in defense ⏫
⇒ Global companies can’t apply for Indian Government tenders below “X”
amount. (to reduce import bill & help local biz)
⇒ Paid the PM-KISAN installments ahead of its due date (Frontloading)
⇒ 3 Ordinance to Reform the agriculture and food processing sector (APMC,
Contract Farming, Essential commodities)
⇒ ⏫MSP
4A: Agriculture,
⇒ Operation Green expanded to all fruits and veggies
⇒ funding / loans for Food processing industry in Dairy cooperatives
⇒ Agriculture Infrastructure Fund, Animal Husbandry Infrastructure Fund,
Pradhan Mantri Kisan Sampada Yojana
⇒ new portals: (MSME) CHAMPIONS portal, YUKTI 2.0 (Corona innovation)
⇒ Change the definition of MSME,
4B: mfg, Ease of ⇒ MSME Loan schemes, equity infusion
Doing Biz ⇒ Interest subvention in Mudra loans
⇒ Global companies can’t apply for Indian Government tenders below “X”
amount. (to reduce import bill & help local biz)
Mrunal's Pillars Atma-Nirbhar Salient Features (List not exhaustive)
⇒ Reforms to encourage more commercial Mining
⇒ Funding for DISCOMs to increase electricity production
⇒ PM-Awas yojana sub-components deadline extended
⇒ Rental housing will be promoted
5: Infrastructure ⇒ PPP for airports, atomic energy, space tech
⇒ Transport → Vande Bharat mission and Shramik special trains to help the
migrants reach their home
⇒ Force Majeure in RERA act, No penalty on road contractors If projects not
finished in time
⇒ New portals & TV channels for online education
⇒ One Nation one ration card, free grains, pulses and LPG cylinders for poor
6: Poverty, ⇒ MGNREGA wages and funding ⏫
hunger, education ⇒ DBT of money in PM-JDY women, poor senior citizens, poor PH
⇒ SHG: loans, procure masks and sanitizers produced by them
⇒ Street vendors ko ₹10k loans (SVANiDHI scheme)
�As such Atma-Nirbhar criticism is not important for UPSC exam nowadays. But some idea may be required
for interviews.
62.7.2 👻👻✋👿👿👿👿 Atmani-Criticism: 20lcr = insufficient to revive Indian economy
Country Japan Malaysia Singapore India
Stimulus package as a % of GDP 20% 16.2% 12.2% Just 10%
So, 20lcr is quite insufficient. अथर्�व�ा को पुनज��वत करने के �लए रकम पयार्� नहीं है
Counter argument: (REF Pillar2D) If Modi tried to give bigger fiscal stimulus THEN →
 Fiscal Deficit⏫= Credit Rating ⏬= Flight of Foreign Investors = Currency exchange rate volatility.
 If the deficit is monetized by RBI printing more currency → demand side inflation like Post-WW1-ka
Germany.
62.7.3 👻👻✋👿👿👿👿 Atmani-Criticism:
Ref: Handout Win20CSP_Pillar2B_ATMA_NIRBHAR
62.7.4 👻👻✋👿👿 Atmani-Criticism: Nehru’s Ideas vs Modi’s Ideas

62.7.5 👻👻✋🙋🙋🙋Atmani-Alternate Suggestions to revive Economy: अ� सुझाव

62.8 � � Conclusion: ATMANI (Appreciative Tone)

⇒ Thus, ATMANI focuses on the well-being of the poors, credit to MSME, ease of doing biz for the
corporate sector, reforms in agriculture and catalysing the development of infrastructure. [No need to
mention all the salient features in conclusion.]
⇒ OR Thus, ATMANI focuses on boosting the Supply and Demand side of the economy, it also aims for
improving the ease of doing business and ease of availing loans/credit. मांग और आपू�त, �ापार करने म� आसानी,
ऋण लेने म� आसानी।
These reforms will certainly help in a long way to revive Indian economy in the aftermath of the Corona
pandemic crisis. कोरोनावायरस के बाद अथर्�व�ा को पुनज��वत करने म� ब�त योगदान देगा.
62.9 ✍🎺🎺 MAINS QUESTIONS: GDP, ECONOMIC GROWTH

62.9.1 ✍🎺🎺 Mains Questions → Mock Questions → Atma-Nirbhar
1) “Atma Nirbhar Bharat � is not just a mere fiscal stimulus package but also a set of reforms for ease of
doing business and ease of availing credit. Elaborate” (�सफर् राज� प्रो�ाहन नही, ब�� ापार और ऋण मे सुगमता भी
है।)
2) “ �ATMANI Economic package is a mix of supply-side and demand-side measures.” Justify. (मांग और
आपू�त दोनों को बढ़ावा देने का �मश्रण है)
3) Discuss in the brief, the significance of the agriculture reforms ushered by �ATMANI package. (आ��न*
द्वारा कृ �ष �ेत्र मे �लए गए सुधारो के मह� क� चचार् करे।) Similar question for MSME/infrastructure/Banking etc.
4) “Atma Nirbhar Bharat � aims to revive Indian economy by targeting land, labour, liquidity and laws”.
Illustrate. (जमीन, श्रम, तरलता और कानून म� सुधार द्वारा अथर्�व�ा को पुनज��वत करना चाहता है)
5) Suggest reforms in addition to � ATMANI for revival of Indian Economy. (आ� �नभर्र भारत के अलावा और
�ा-�ा सुधार करने चािहए अथर्�व�ा को पुनज��वत करने के �लए?)
6) Compare and Contrast the ideas of PM Nehru and PM Modi on the India’s economic self-reliance. (भारत
क� आ�थक �नभर्रता के सं दभर् म� नेह� और मोदी के �वचारों म� समानता और भेद पर चचार् कर�. )
62.9.2 ✍🎺🎺 Mains Questions → Mock Questions → GDP Growth
1) “Creation of national wealth through ethical means will help us in a long way to achieve SDG.” Illustrate.
नै�तक तरीकों से रा��ीय धन का �नमार्ण करने से हम� सतत �वकास ल� हा�सल करने म� मदद होगी. समझाइए
2) Discuss briefly the challenges associated with achieving the five trillion dollar economy for India by 2025?
5 िट��लयन डॉलर अथर्�व�ा का ल� हा�सल करने म� चुनौ�तयां
3) “Reducing economic policy uncertainty is critical for both domestic investment and foreign
investment.” Suggest ways for accomplishing this. घरेलू एवं �वदेशी �नवेश को बढ़ावा देने के �लए आ�थक नी�त म� अ�न��तता
को कम करना ज�री है
62.9.3 ✍🎺🎺 Mains Questions → Previous Years’ official Questions
(GSM3) Do you agree with the view that steady GDP growth and low inflation have left the Indian 2019
economy in good shape? Give reasons in support of your arguments. �ा ��र वृ�द्ध दर तथा कम मुद्रा��त ने
भारत क� अथर्�व�ा को अ�� आकार म� रखा है? अपनी दलीलों को कारणों के साथ �� क��जए
(GSM2) ‘In the context of neo-liberal paradigm of development planning, multi-level planning is 2019
expected to make operations cost effective and remove many implementation blockages.’-Discuss.
�वकास के �लए आयोजन के नव-उदारवादी प्र�तमान के सं दभर् म�, ब�-�रीय योजना द्वारा प�रचालन लागत को प्रभावी बनाने और कई
�कावटों को दू र करने क� उ�ीद है। — चचार् क��जए
How are the principles followed by the NITI Aayog different from those followed by the erstwhile 2018
Planning Commission in India?
नी�त आयोग द्वारा अपनाए गए �सद्धांत योजना आयोग से अलग कै से ह�?
Among several factors for India’s potential growth, savings rate is the most effective one. Do you 2017
agree? What are the other factors available for growth potential? भारत के �वकास दर म� बचत दर एक अ�त
मह�पूणर् कारक है �ा आप इससे सहमत है?
The nature of economic growth in India in described as jobless growth. Do you agree with this 2015
view? Give arguments in favour of your answer.
भारत क� आ�थक वृ�द्ध, "रोजगार-रिहत/बेरोजगार यु�" आ�थक वृ�द्ध है.�ा आप इससे सहमत ह�?
Capitalism has guided the world economy to unprecedented prosperity. However, it often 2014
encourages shortsightedness and contributes to wide disparities between the rich and the poor. In
this light, would it be correct to believe and adopt capitalism driving inclusive growth in India?
Discuss.
पूंजीवाद ने �व� अथर्�व�ा को अभूतपूवर् समृ�द्ध के �लए �नद��शत िकया है। हालांिक, यह अ�र अदू रद�शता को प्रो�ािहत करता है और
अमीर और गरीब के बीच �ापक असमानताओं म� योगदान देता है। इस प्रकाश म�, �ा भारत म� समावेशी �वकास को िकया��त करने के
�लए, पूंजीवाद को अपनाना सही होगा? चचार् कर�?
63 🍅🍅PILLAR#4C: INDICATORS → INFLATION
⇒ Inflation (मुद्रा��त) is the rise in the general level of prices of goods and services in an economy over a
period of time.
⇒ Deflation (मुद्रा अव��त) is inverse of above definition. Deflation occurs when the inflation rate falls below
0%
63.1 🍅🍅🍅🍅🍅🍅: INFLATION OBSERVATIONS BY 📔📔📔📔ES20 VOL2CH5

⇒ The World bank observed that Inflation has ⏬ across developing nations between (119%) 1993 to
4.8%(2018) because of 1) monetary and fiscal policy 2) structural reforms to raise production.
⇒ However, inflation is ⏫in 2019 for India.
⇒ Before 2018: CPI (Urban) << CPI (Rural). But since 2018: CPI (Urban) >> Rural due to higher level of
food inflation
⇒ 2018-19: Some areas have witness higher level of inflation than all India average. E.g. Lakshadweep
Andaman (geographical isolation), Manipur (frequent highway Bandh/blockades), Kerala (floods) etc.
⇒ Rest of the Chapter is mostly bol Bacchan about reason for the price in onion and tomato, and some
contrived mathematical models and graphs to downplay the problem of inflation िक कांग्रसे सरकार �नक�ी
थी,मोदी सरकार म� महंगाई काबू म� ही है.
63.2 🍽🍽🍽🍽🍽🍽 THALINOMICS BY 📔📔📔📔ES20: VOL1CH11
Thalinomics is a concept to estimate how much ₹₹ a common person pays for a Thali (platter of food) across
India? भोजन एक थाली पर �� िकतना भुगतान करता है?
⇒ Between 2015 to 2018, the Thali price has reduced: 1) Across all regions of India 2) for both veg and non-
veg thalis. पूरे भारत म� शाकाहारी और मांसाहारी थाली के मू� म� �गरावट
⇒ While Thali prices reduced between 2015-18, they have increased in 2019.
⇒ But allover, thali’s affordability has increased for poor families. गरीबों के �लए स�ी / िकफायती / वहनीय �ई है
⇒ Consequently, a family of five people is able to save >₹10,000/per year because of reduced prices. पैसों क�
बचत �ई है
� �ES20 appreciated various Modi schemes for 1) increasing food production and 2) making food more
affordable. (we’ve learned those schemes in Pillar#4A)
63.3 MOCK QUESTIONS FOR MAINS → INFLATION

(GSM3) Do you agree with the view that steady GDP growth and low inflation have left the Indian 2019
economy in good shape? Give reasons in support of your arguments. �ा ��र वृ�द्ध दर तथा कम मुद्रा��त ने
भारत क� अथर्�व�ा को अ�� आकार म� रखा है? अपनी दलीलों को कारणों के साथ �� क��जए

PILLAR#5: INFRASTRUCTURE
TABLE OF CONTENTS
50 Pillar#5A: INFRASTRUCTURE ..................................................................................................................... 160
50.1 Ministries and Departments related to mining, heavy industries ...................................................... 160
50.1.1 � � [Yearbook] Ministry of Heavy Industries & Public Enterprises .................................. 160
50.1.2 � � [Yearbook] Ministry of Steel (इ�ात मं त्रालय) ..................................................................... 161
50.1.3 � Steel → Purvodaya Initiative (2020)...................................................................................... 161
50.1.4 � � [Yearbook] Ministry of Chemicals & Fertilizers ........................................................... 161
50.1.5 � � [Yearbook] Yearbook: Ministry of Petroleum & Natural Gas ....................................... 162
50.1.6 �[Yearbook] Ministry of Mines (खान मं त्रालय) <list not exhaustive> ....................................... 163
50.1.7 � � Mineral Laws (Amendment) Ordinance 2020 ............................................................... 163
50.1.8 � � �Mining → Atma-Nirbhar (खनन) .............................................................................. 163
51 �Infra → Energy → Electricity (ऊजार् → �वद्युत) ........................................................................................... 164
51.1.1 � IEX = Current-PDF-walla gone crazier than usual ............................................................. 164
51.1.2 � �Energy → DISCOMs Liquidity injection (पैसा क� तरलता देके जान फूं कना) ........................... 164
51.1.3 � �Energy infra→ Electricity reforms (�बजली �ेत्र म� सुधार) ..................................................... 164
51.1.4 �DRAFT Electricity Bill 2020 (�बजली कानूण म� सुधार �वधेयक का प्रा�प/मसौदा )................................. 164
51.2 � � � � Electricity → INDICES ................................................................................................ 165
51.2.1 � � � � Electricity → Index → Energy Transition Index............................................. 165
51.2.2 � � � � Electricity → Index → State Energy Efficiency Index 2019 ........................... 165
51.2.3 � � � � Renewable → Ranking → SARAL INDEX for Solar rooftop ........................ 165
51.3 � � � � Cooking → Pradhan Mantri Ujjwala Yojana (PMUY) ............................................. 165
51.4 � � �ENERGY INFRA→ ATOMIC ENERGY → ATMA-NIRBHAR (परमाणु ऊजार्) .............. 166
52 � Infra → Water & Sanitation (जल व् ��ता) ............................................................................................. 166
52.1 � SWACHH BHARAT MISSION (Gramin) Phase 2 ...................................................................... 166
(Batch: Win20CSP) Mrunal’s Economy Pillar#5: Infrastructure → Page 157

52.1.1 �SBM Protocols (कायर्पद्ध�त) ......................................................................................................... 166
52.1.2 � � Swatchh Bharat: What more can we do? ......................................................................... 166

52.1.3 SBM: Budget observations / announcements ............................................................................. 167
53 �Infra → Transport → H 2 0 → Shipping ................................................................................................. 167
53.1.1 T � � �ES20 Vol1ch6: logistics Challenge in India (मालसामान प�रवहन)....................................... 167
53.1.2 T � � � Logistics Ranking ............................................................................................................ 168
54 � Infra → Transport → Road (सड़क) .......................................................................................................... 168
54.1 � � TRANSPORT→ NOUSE Fossil Fuel → Electric Vehicle .................................................... 168
54.1.1 � � � � EVs in India: steps taken to promote them........................................................ 169
54.1.2 � � � 100% EV Adoption? NITI vs Highway Ministry differ .......................................... 169
54.1.3 � � � � ES19: EVs in India: Charging is the biggest challenge....................................... 169
54.1.4 � � TRANSPORT→ � � ⏬ Fossil Fuel Emission → Bharat Stage Norms ............. 170
54.1.5 � � ⏬Decarbonizing Transport in India (2020-June) ...................................................... 170
54.2 � � � � Motor Vehicle Amendment Act 2019 ........................................................................ 171
54.3 � �Transport → Transborder Connectivity (सीमापार स�द्धन) ....................................................... 171
55 � Transport → Railway ............................................................................................................................... 173
55.1 � � Railways → Modernization → Personnel & Organizational Reforms (का�मक और सं गठना�क

सुधार) 173
55.1.1 � � Railways Personnel Reforms → Unification of Services (सेवाओं का एक�करण) ................ 173
55.1.2 � � Railways Organizational Reforms → Restructuring of Railway Board ....................... 174
55.2 � �: � Railways Modernization → Private Train Operators ................................................... 174
55.2.1 ( � �: �) � � Challenges in allowing private trains (चुनौ�तयां) ...................................... 175
55.2.2 ( � �: �) �Private Trains → Conclusion- welcome this reform .................................. 176
55.2.3 � Transport → Hyperloop........................................................................................................ 176
55.3 � Transport → Aviation (उड्डयन / हवाई यात्रा)........................................................................................ 176

55.3.1 Airfare price ceiling (हवाई यात्रा दरों म� �नयं त्रण) .................................................................................. 176
55.3.2 � Transport → Drone Regulation (ड�ोन �व�नयमन) & GARUD Portal ....................................... 176
55.4 � � � Vande Bharat Mission 2020- Indians ki watan-waapsi.................................................. 177
55.5 �Tourism & Museum Infrastructure (प्रवासन व सं ग्रहालय) .................................................................... 177
55.5.1 � � [Yearbook] Ministry of Tourism ...................................................................................... 177

55.5.2 � Tourism→ PRASAD & HRIDAY Mission .......................................................................... 178
55.5.3 � � � [Yearbook] Ministry of Culture (सं �ृ�त मं त्रालय) ........................................................ 178
55.5.4 �Tourism → Museum Infra in Budget-2020 (सं ग्रहालय) .......................................................... 178
56 Infrastructure → � URBAN (शहरी बु�नयादी अवसं रचना) .................................................................................. 179

56.1.1 2020 marks 5th Anniversary of Urban Mission ........................................................................... 179
56.1.2 � � Cities → TULIP Internship (2020-June) ....................................................................... 179
56.1.3 � � � � URBAN → Misc → Nagar VAN (2020-Jun) .................................................... 179
56.1.4 � URBAN → Misc → Parliament area, Central Vista ........................................................... 179
56.1.5 � � Cities → Misc → TWO Indices for Quality of Life ..................................................... 180
56.1.6 � � Cities → Misc →IUDX (सं शोधन कतार्ओ ं को डाटा प्रदान करने के �लए) ...................................... 180
56.1.7 �( �) → Affordable rental housing Complexes (AHRC) .................................................... 180
56.1.8 ( �) Sustainable Housing → Global Housing Technology Challenge (GHTC) 2019 ........... 180
56.1.9 ( �) Sustainable Housing → World Habitat Award 2019 to Odisha’s JAGA Mission ......... 181
56.1.10 ( �) → Model Tenancy Act, 2019 (आदशर् िकरायेदारी अ�ध�नयम) ..................................................... 181
56.1.11 ( �) → Corona: Landlords, tenants, rent & eviction................................................................ 181
57 Infra → Rural ( �) ......................................................................................................................................... 182
57.1.1 � � Panchayati Raj Day & Portals.......................................................................................... 182
57.1.2 � � Swamitva scheme for land survey & title disputes ....................................................... 182
57.2 � � � RURAL → MPLADS (1993) .............................................................................................. 182
57.2.1 � � MPLADS Suspended (योजना को ��गत करना) ................................................................... 183
57.3 � Border infra and Shekatkar Committee (सीमा �ेत्रों म� बु�नयादी अवसं रचना) ......................................... 183
57.4 � �Infrastructure: Disaster, Security & Strategic Affairs.............................................................. 184
57.4.1 � � [Yearbook] Ministry of Home (गृह मं त्रालय) ....................................................................... 184
57.4.2 � � Disaster Infrastructure → Home Ministry → CDRI 2019 ......................................... 185
57.4.3 � � Ministry of Defence (र�ा मं त्रालय)........................................................................................ 185
57.4.4 �Ministry of External Affairs (�वदेश मामलों का मं त्रालय) ................................................................ 186
58 �Infrastructure → Communication (सं चार) ............................................................................................... 186
58.1 � Communication → Telecom → Controversies / Negative News............................................. 186
58.2 � � � � Communication → IT → 5G revolution in India .................................................... 187
58.2.1 � � � � Challenges and Opportunities in of 5g (इसे अपनाने म� चुनौ�तयां+अवसर )................. 187

58.2.2 � 5G Hackathon by DoT (2020)............................................................................................... 187
58.2.3 � NEST Division in MEA .......................................................................................................... 187
58.3 � � � ES19: Public Data: For the people, by the people ............................................................. 188
58.3.1 �Types of Government Data..................................................................................................... 188
58.3.2 � �Public Data: Opportunities through Data integration ................................................. 188
58.3.3 � Telangana Government’s Samagra Vedika initiative: ......................................................... 189
58.3.4 � Govt efforts to release statistical data .................................................................................... 189
58.3.5 � � Challenges in public data ................................................................................................. 189
58.3.6 � �Conclusion: Public Data (सावर्ज�नक डेटा) ........................................................................... 190
58.4 � �SPACE TECH Infrastructure (अवकाश �ेत्र) ............................................................................... 190
58.4.1 � � �Space Tech: Atma-Nirbhar ......................................................................................... 190
59 � � Infra → GSM3: Investment Models (�नवेश के तरीके ) ........................................................................... 191
59.1 � � � � Infra.Dev. → Non-PPP → GOCO for Indian Army .................................................. 191
59.1.1 �GoCo Mechanism? ................................................................................................................... 191
59.1.2 �GoCo: Pros and Cons ............................................................................................................... 191
59.2 � � Infra Finance → National infrastructure pipeline (NIP) ....................................................... 192
59.2.1 � � NIP → Infra Finance Reforms → Financial Market Reforms ..................................... 192
59.2.2 � � NIP → Infra Finance Reforms → Credit Enhancement Fund (CEF) ......................... 192
59.2.3 � � NIP → Others reforms ..................................................................................................... 193

59.3 T � Mock Questions for Mains.................................................................................................................... 193
50 PILLAR#5A: INFRASTRUCTURE
50.1 MINISTRIES AND DEPARTMENTS RELATED TO MINING, HEAVY INDUSTRIES
50.1.1 🕵🕵🕵🚟🚟 [Yearbook] Ministry of Heavy Industries & Public Enterprises

भारी उद्योग एवं सावर्ज�नक-�ेत्र के उपक्रमो का मं त्रालय
Dept ⇒ Department of Heavy Industry

⇒ Department of Public Enterprises: is responsible for i) Allotting Ratna Status (Ref:
Pillar2) and ii) conduct Public Enterprises Survey

Attached, Subordinate, ⇒ N/A or not MCQ worthy
Statutory
Autonomous ⇒ National Automotive Testing and Research and Development Infrastructure
Project (NATRiP) → implements FAME-India project for faster adoption of
electric vehicles.
PSU ⇒ List not exhaustive:
⇒ Bharat Heavy Electricals Ltd. (BHEL) etc.
⇒ (*) Cement Corporation of India Ltd.
⇒ (*) Hindustan Newsprint Ltd
⇒ (*) Scooters India Ltd.
⇒ (*) Bridge & Roof Co, Engineering Projects (India), Bharat Pumps and
Compressors Ltd.
(*) means approved for strategic disinvestment (=privatization) in 2019
50.1.2 🕵🕵🕵🔩🔩 [Yearbook] Ministry of Steel (इ�ात मं त्रालय)

Dept N/A
Attached, Subordinate, N/A or not MCQ worthy
Statutory
PSU List not exhaustive but notable are:
⇒ Steel Authority of India Ltd (SAIL)
⇒ Rashtriya Ispat Nigam Ltd (RINL)
⇒ National Mineral Development Corporation (NMDC) iron ore.
⇒ (*) Salem Steel Plant (Tamilnadu), Bhadrwati Steel Plant (Karnataka),
Ferro Scrap Nigam Ltd, & a few misc.
Largest Steel 1 2 3
Producer China (54%) India (6%) Japan
Consumer China (49%) USA India (6%)
50.1.3 🔩🔩 Steel → Purvodaya Initiative (2020)

⇒ The eastern states of India (Odisha, Jharkhand, West Bengal, Chhattisgarh, and Northern Andhra
Pradesh) are home to 80% of Indian iron reserves.
⇒ Purvodaya Initiative: Setup new steel plants, transport infrastructure → to create an integrated steel hub
in the Eastern India.
⇒ Boss? Steel Ministry will coordinate with other Central Ministries, State Governments and Private
Players.
50.1.4 🕵🕵🕵🧪🧪 [Yearbook] Ministry of Chemicals & Fertilizers

Dept ⇒ Department of Chemicals and Petrochemicals
⇒ Department of Fertilizers
⇒ Department of Pharmaceuticals

Attached, ⇒ Fertilizers Industry Coordination Committee (FICC).
⇒ National Pharmaceutical Pricing Authority (NPPA) More in Pillar#6: Healthcare
Subordinate, ⇒ Either non-existent or not MCQ worthy
Statutory
Autonomous These bodies are set up under either Societies Registration Act or Multistate
Cooperative Societies Act= Different?NOTIMP.
⇒ Multi State Cooperative Societies: IFFCO, KRIBHCO
⇒ Bureau of Pharma PSUs of India(BPPI) for supplying medicines to PM Jan
Aushadhi Kendras (More in Pillar6)
⇒ National Institute of Pharmaceutical Education Research (NIPER)
⇒ Central Institute of Plastics Engineering & Technology (CIPET), Ranchi
PSU List not exhaustive but notable are:
⇒ Hindustan Insecticide Limited (HIL) → responsible for mfg of Di-chloro-di-
phenyl-tri-chloro-ethane (DDT) for mosquito control in Nation vector borne
disease control program
⇒ (*) Hindustan Antibiotics
⇒ (*) Karnataka Antibiotics & Pharmaceuticals Limited (KAPL)
⇒ (*) Bengal Chemicals and Pharmaceuticals Ltd. (BCPL)
⇒ (*) Hindustan Fluorocarbon Ltd
50.1.5 🕵🕵🕵 [Yearbook] Yearbook: Ministry of Petroleum & Natural Gas

पेट�ो�लयम एवं प्राकृ �तक गैस मं त्रालय
Dept ⇒ N/A
Attached / ⇒ Directorate General of Hydrocarbons: regulator for the upstream activities i.e. oil
Subordinate and gas exploration and production activities. 2018: proposal to give it statutory
offices: status was REJECTED.
Statutory ⇒ 2006’s Act: Petroleum and Natural Gas Regulatory Board: regulator for the
downstream activities i.e. laying of pipelines and fuel marketing
PSU ⇒ (*) Bharat Petroleum Corporation Limited
⇒ (*) Hindustan Petroleum Corporation Limited
⇒ Engineers India Limited → consultancy services for petroleum refineries and
other industrial projects
⇒ Gas Authority of India, Indian Oil Corporation, Oil India,
⇒ Oil & Natural Gas Corporation (ONGC),
⇒ ONGC-Videsh Ltd (OVL)- associated with foreign exploration projects like
Sakhalin (Russia), Al-Furat (Syria), Greater Nile (Sudan), San Cristobal
( Venezuela).

50.1.6 🕵🕵🕵[Yearbook] Ministry of Mines (खान मं त्रालय) <list not exhaustive>
Dept / Statutory N/A
- National Mineral Exploration Trust रा��ीय ख�नज अ�ेषण �ास
Attached / Subordinate
- Geological Survey of India भारतीय भूवै�ा�नक सव��ण
offices
- Indian Bureau of Mines भारतीय खान �ूरो
- National Aluminum Company Limited (NALCO), Bhubaneswar;
PSU - Hindustan Copper Limited (HCL), Kolkata;
- Mineral Exploration Corporation Limited (MECL), Nagpur.
- National Institute of Rock Mechanics
- Kolar Gold Fields (KGF, Karnataka),
Autonomous bodies / - Districts Mineral Foundations (DMF) in mining districts.
Trusts - National Institute of Miners’ Health (NIMH in Karnataka). Although in
2020, Government announced to merge it with Health Ministry’s ICMR-
National Institute of Occupational Health (NIOH, Ahmedabad, Guj)
50.1.7 🔥🔥⚖ Mineral Laws (Amendment) Ordinance 2020

ख�नज कानून (सं शोधन) अ�ादेश amends the
⇒ Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) AND
⇒ Coal Mines (Special Provisions) Act, 2015 (CMSP Act).
Before ordinance After
Who can do bidding Only companies related to iron Any India-registered company. So it’ll also
in the coal mining and steel, power and coal sectors. encourage competition and attract FDI in
auction? such Indian companies
Prior experience Yes Nope.
required before
bidding
What type of license Separate licenses for Single/Composite license called ‘prospecting
is /are given? i. prospecting (survey) license-cum-mining lease’
ii. actual mining (पूव��ण-सह-खनन का अ�धकारपत्र')
50.1.8 👻👻👻👻👻👻Mining → Atma-Nirbhar (खनन)

⇒ 👻👻ATMANI→ PM GaribKalyan → 🌋🌋District Mineral Foundation Fund (DMF) ₹₹ → can be used for
COVID-19 testing & related infra (�जला ख�नज प्र�त�ान �न�ध)
⇒ Mineral Index (खनन सूचकांक) for different minerals will be prepared. But, details yet to be worked out.
⇒ Satyabhama Portal was launched. Boss? Mining Ministry's portal for mining related research, science &
technology. Satyabhama = wife of Lord Krishna.
⇒ Joint Auction of Bauxite and Coal mineral blocks so that: Coal → electricity → use it for smelting
Bauxite into Aluminium = ⏬ electricity costs for mining company. (साझा नीलामी तािक बो�ाइट �पघलाने के �लए
�बजली लागत/खचर् कम हो)
⇒ We’ll encourage Coal Gasification / Coal Liquefaction, coal bed methane extraction → creation of a gas
based Indian economy.

⇒ Commercial Mining allowed in the Coal Sector, through revenue sharing model. (वा�ण��क खनन: आय मे से
िह�ेदारी का मोडेल).
o Although, this reform was being done via Mineral Laws (Amendment) Ordinance 2020 before
Atmani.
o But in Atmani-tamasha, even previous reforms are counted.
51 🔌🔌INFRA → ENERGY → ELECTRICITY (ऊजार् → �वद्यतु )

(DATA as of 2020-Aug) In India’s present electricity mix consists of:
Thermal Electricity (ऊ�ीय �वद्युत: Coal > Gas > Diesel Oil) ~62%
Renewable: Hydroelectricity (जल-�वद्युत) ~12%
Renewable Energy (नवीकरणीय ऊजार्) (Solar, Wind, Biomass etc. except hydro) ~24%
Nuclear (ना�भक�य / परमाणुवीय) ~2%
Total 100%
Source: https://powermin.nic.in/en/content/power-sector-glance-all-india
51.1.1 🔌🔌 IEX = Current-PDF-walla gone crazier than usual

A company: Indian Energy Exchange Limited (IEX) →
⇒ IEX launched a green term-ahead market (G-TAM). basically future/forward contracts for renewable
energy. (Ref 1C)
⇒ IEX’s subsidiary company → Indian Gas Exchange (IGX) → online trading of natural gas.
⇒ IEX + Power Exchange India Limited (PXIL) → It allows players (thermal powerplants, DISCOMS etc) to
buy/sell electricity from anywhere across the country with just one hour’s prior notice. = "REAL TIME
MARKET" (RTM)
✋Even this much GK not very imp for scope of exam, although current-affairs-PDF walla gone crazy about
it.
51.1.2 👻👻⚡Energy → DISCOMs Liquidity injection (पैसा क� तरलता देके जान फूं कना)
⇒ Corona lockdown → Industry and railways shutdown → ⏬ demand for electricity → losses for
Electricity/Power Distribution Company (DISCOM).
⇒ Atma-Nirbhar: Government will give ₹₹ to (i) Power Finance Corporation (ii) Rural Electrification
Corporation (PFC-REC) → they’ll invest ₹₹ in DISCOMS.
51.1.3 👻👻⚡Energy infra→ Electricity reforms (�बजली �ेत्र म� सुधार)

⇒ Atma-Nirbhar: We’ll reform the electricity tariff policy (शु� नी�त),
⇒ encourage DBT for electricity subsidy to farmers (सब�सडी का प्र�� ह�ांतरण);
⇒ install smart prepaid meters
⇒ Will privatise the Union Territories’ DISCOM/Power departments → More efficient operations in UT
(क� द्र शा�सत प्रदेशों म� �बजली क� सरकारी कं प�नयों का �नजीकरण कर�गे)
51.1.4 🔌🔌DRAFT Electricity Bill 2020 (�बजली कानूण म� सुधार �वधेयक का प्रा�प/मसौदा )
BEFORE AFTER (�बजली स��डी का प्र�� लाभ ह�ांतरण)

 Farmer / poor people paid bills at All consumers may have to pay the regular / normal /
low/subsidized rates to DISCOM. market-based electricity rates to DISCOM
 State govt will pay subsidy to DISCOM State Government will pay a subsidy to FARMER as
"Direct benefit transfer (DBT)" to his bank account.
Controversy?
100% financial inclusion yet to be achieved in reality. So
farmer may not get the subsidy on time.
State governments financial health/ tax collection ⏬ so,
They may not release the subsidy on time.
++ many other issues but It is still in the draft stage, NOT even tabled in the parliament. Many state
governments are opposed to it. So we need not spend too much energy on it.
51.2 🔌🔌 💡💡↘ 📊📊 ELECTRICITY → INDICES
51.2.1 🔌🔌 💡💡↘ 📊📊 Electricity → Index → Energy Transition Index

- World Economic Forum’s index to measure countries on how much CO 2 / pollution is generated while
producing energy, And whether the country is serious abt reducing it.
- Ranking 2020-May: Top3- Sweden, Switzerland, Finland. Then India: 74 (previous years 76 so
improved.) Haiti #115 (bottomest).
51.2.2 🔌🔌 💡💡↘ 📊📊 Electricity → Index → State Energy Efficiency Index 2019

Developed by Power Ministry's Bureau of Energy Efficiency (BEE) in association with a non-profit body
called Alliance for an Energy Efficient Economy (AEEE).
Category 2019’s ranking? (Announced in 2020-Jan)

Achiever Nobody yet
Front Runner Haryana, Kerala and Karnataka
Contender Long list
Aspirant (=Most Pathetic) Manipur, Jammu & Kashmir, Jharkhand and Rajasthan
51.2.3 🔌🔌🔌🔌🔌🔌🔌🔌 Renewable → Ranking → SARAL INDEX for Solar rooftop

Jointly developed by Ministry of New and Renewable Energy (MNRE), Shakti Sustainable Energy Foundation
(SSEF), Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Ernst & Young (EY).
⇒ State Rooftop Solar Attractiveness Index (SARAL) ranks the States for their attractiveness for rooftop
development.
⇒ 2019 Ranking? Karnataka > Telangana > Gujarat > Andhra Pradesh
51.3 🧔🧔🧔🧔 🧯🧯🧯🧯 COOKING → PRADHAN MANTRI UJJWALA YOJANA (PMUY)

Ordinarily, a customer has to pay ~₹ 1000+ as refundable security deposit to get the LPG connection from Oil Marketing
Company (OMC: Bharat Gas HP Gas etc.).
 Scheme gives Deposit-free LPG connections + rubber tube + pressure regulator to the women of Below Poverty Line
(BPL: गरीबी रेखा के नीचे) families. (Although they have to pay money for the stove and cylinders to actually start
cooking.)

 The BPL families are identified using SECC-2011 data. Later, the beneficiary list was expanded to cover the forest
dwellers, people residing in Islands etc. whose name may not be in SECC-2011 data.
 Boss? Petroleum Ministry pays ₹ ₹ OMC. Central Sector scheme = 100% funded by Union.
 Benefit? firewood/kerosene consumption ↓= indoor pollution ↓= health + environment :-)
 2019: Himachal Pradesh had become the first state in the country to have “100% LPG gas coverage”.
 2020: Corona Lockdown = poor families’ income⏬, so can’t afford to pay for cylinders so, PMUY
beneficiaries eligible for 3 FREE LPG cylinders upto 30/June/2020.
51.4 👻👻 ⚡☢ENERGY INFRA→ ATOMIC ENERGY → ATMA-NIRBHAR (परमाणु

ऊजार्)
⇒ 🩺🩺 PPP mode: Research reactor → produces medical isotopes → use in cancer treatment. (अनुसंधान
�रए�र से के �र �चिक�ा के �लए समस्था�नक त�/आइसोटोप का �नमार्ण)
⇒ 🧅🧅 PPP mode: Irradiation facilities for Food preservation. (खाद्य सं र�ण के �लए �विकरण)
52 🌧🌧 INFRA → WATER & SANITATION (जल व् ��ता)

Ref: pillar4A: Agri for irrigation and drinking water related ministries and schemes
52.1 🚽🚽 SWACHH BHARAT MISSION (GRAMIN) PHASE 2

⇒ It’ll be implemented from 2020-2021 to 2024-2025
⇒ To ensure villagers continue to use toilets
⇒ + focus on plastic waste management, Animal waste and other bio-degradable solid waste management
(जैव अपघिटत ठोस अप�श� प्रबं धन,)
⇒ Greywater management (It is the used water from domestic sources excluding toilet wastewater) Fecal-
sludge management (मल-क�च प्रबं धन।)
52.1.1 🚽🚽SBM Protocols (कायर्पद्ध�त)
ODF+ protocol ⇒ Open Defection Free status (+) [खुले म� शौच मु� ��त तथा]
⇒ Operations and maintenance of community toilets and public toilets। (सावर्ज�नक
शौचालयों का यो� तरीके से सं चालन और रखरखाव)
ODF++ protocol ⇒ Above things from ODF+ and additionally, focuses on safe management of
faecal sludge from toilets
⇒ Untreated sludge should NOT be discharged into water bodies etc (अनुपचा�रत
कु डा-क�चड़ को पानी मे नही छोड़ना)
Water + protocol untreated wastewater should NOT be discharged in water bodies etc.
52.1.2 📔📔📔📔 Swatchh Bharat: What more can we do?

In ES19, CEA Subramanian K. suggested that:
1) Goa, Odisha, Telangana, Bihar, W.Bengal, Sikkim have not yet achieved 100% Open Defecation Free (खुले
म� शौच से मु�) status as of 2019-June.

2) Some rural males still don’t use toilets. Even in urban areas, people keep their homes clean but litter in
public places. So, we have to inculcate a behavioral change for maintaining cleanliness at public places as
well.
3) water crisis so we’ve to adopt eco-friendly water conservation in toilets. e.g. Bio toilets, dual flush toilets.
जैव शौचालय, दोहरी �श शौचालय
4) Clean India should also be pollution free India, so we should focus
a. industrial effluent, plastic menace, controlling air pollution etc. (औद्यो�गक अप�श�, �ा��क क� चुनौती,
वायु प्रदू षण)
b. bioremediation, river surface cleaning, river front development. (जैव-उपचार, निदयों के तल क� सफाई,
�रवर फ्रंट का �वकास)
c. afforestation and biodiversity conservation. (वृ�ारोपण तथा जैव �व�वधता का सं र�ण)
5) To do the above things, we have to mobilise more funds through: Micro-financing (सू� �व�पोषण),
Concessional Loans (�रयायती दरों पर लोन/ ऋण ), Corporate Social Responsibility (कॉरपोरेट का सामा�जक उ�रदा�य�),
Crowdfunding (जनसमूह के द्वारा �व�पोषण), Public Private Partnership (सावर्ज�नक-�नजी भागीदारी)
52.1.3 SBM: Budget observations / announcements

⇒ 💼💼 (Full) Budget-2019:
o We’ll open Rashtriya Swachhta Kendra at Gandhi Darshan, Rajghat (New Delhi) on 2nd
October, 2019.
o Culture Ministry’s autonomous body ‘National Council for Science Museums’ is preparing a
Gandhipedia to sensitize people about Gandhian values.
o 150th birth anniversary of Mahatma Gandhi is being celebrated for a period of 2 years from
02.10.2018 to 02.10.2020. National Committee (NC) under the Chairmanship of President of
India and Executive Committee (EC) under the Chairmanship of the Prime Minister have been
constituted.
⇒ 💼💼Budget-2020: All 5.99 lakh villages, 699 districts and 36 States/UTs have declared themselves Open
Defecation Free (ODF). Further, ₹12000 Cr allotted.
53 🛶🛶INFRA → TRANSPORT → H20 → SHIPPING
53.1.1 ⚓🚛🚛🚛🚛📔📔📔📔ES20 Vol1ch6: logistics Challenge in India (मालसामान प�रवहन)

CEA Subramanian K. provided a case study:
If an apparel factory in Delhi has to export clothes to USA through India’s largest port @Maharashtra i.e.
Jawaharlal Nehru Port Trust (JNPT) also known as ‘Nhava Sheva Port’

Days taken for cargo to reach Delhi to 5 days
Maharashtra
Customs clearance and loading cargo in 14 days, because port infrastructure is poor. narrow roads, very
the ship little use of automatic cranes etc.
Shipping from Mumbai to USA 19 days
Unloading cargo in USA dock including 1 day
customs clearance
Transporting to customer 2 days
Total 41 days
Similarly, 📔📔📔📔ES20vol1ch6 gave case studies of Electronics export, carpet import etc. and found
⇒ Loading/unloading/customs inspection processes at Indian airports is vastly superior to its seaports.

⇒ Ironically, customs clearance processes for imports are better/faster than those for exports. (whereas the
Government should focus on making it ‘easier’ to export for improving our CAD & BoP!)
53.1.2 ⚓🚛🚛🚛🚛 Logistics Ranking

LPI Index ⇒ World Bank’s Logistics Performance Index, released every 2Years
⇒ 2018’s Ranking: #1: Germany > Sweden > Belgium > Austria > #5: Japan
>......>#44: India
LEADS Index ⇒ Commerce Ministry’s Logistics Ease Across Different States (LEADS) index
⇒ 2019 Ranking: Gujarat> Punjab > Andhra > ….. > Bottom=Himachal
54 🚕🚕 INFRA → TRANSPORT → ROAD (सड़क)
54.1 🚕🚕🚕🚕 TRANSPORT→ NOUSE FOSSIL FUEL → ELECTRIC VEHICLE
Figure 1: Elon Musk is renowned for his Tesla brand of Electric cars
- (Definition) Electric vehicle (इले��क वाहन) is an automobile that is propelled by the energy stored in
rechargeable batteries. Such vehicles are further classified into
○ 1) Battery Electric Vehicles (BEVs) and

○ 2) Hybrid Electric Vehicles (HEVs) which can run on both battery (using electric motor) and
petrol/diesel (using internal combustion engine).
- (Origin of the problem) In India, transport sector is the second largest contributor to CO 2 emissions after
the industrial sector. Electric vehicle can help reducing it.
- (Data) Currently, the market share of electric cars is less than 1% in India, compared to compared to 2%
in China and nearly 40% in Norway.
- Why encourage? 1) less import of crude oil import = less CAD 2) India can emerge as a hub for
manufacturing for EVs. This can provide employment opportunities and earning of foreign exchange
through exports. रोजगार व �वदेशी मुद्रा कमाने का साधन बन सकता है
54.1.1 🚕🚕🚕🚕🚕🚕🚕🚕 EVs in India: steps taken to promote them
- 100 % FDI through automatic route is permitted in the automobile sector.

- 2013: National Electric Mobility Mission Plan 2020 (NEMMP) for promoting electric and hybrid
vehicles.
- 2015: Ministry of Heavy Industries & Public Enterprises launched Faster Adoption and Manufacturing
of Electric vehicles (FAME) scheme to fast-track the goals of NEMMP.
- 2019: FAME India Phase II has been launched from 1/4/2019 for a period of three years with funding of ₹
10,000 crores.
o It’ll setup 2700 charging stations in major cities in such manner that
 at least one charging station is available in a grid of 3 km x 3 km in cities,
 At least one charging station is available every 25km on highways.
o It’ll also focus on electrification of public transportation. (सावर्ज�नक प�रवहन का �वद्युतीकरण)
- GST on EVs is reduced to 5% from the current rate of 12%.
- Budget-2019: Additional income tax deduction on loans taken to buy EV.
- Ministry of Road Transport Highways (MoRTH) notified Green Number plate for the use of Electric
Vehicles.
54.1.2 🚕🚕🚕🚕🚕🚕 100% EV Adoption? NITI vs Highway Ministry differ

- 2017: NITI proposes at least 40% private transportation should be electric by 2030.
- 2019-Jun: NITI proposed only electric vehicles should be sold after 2030. However, automobile makers
have heavily criticized this move. So, ultimately
- 2019-Aug: Union Minister of Road Transport and Highway, Nitin Gadkari cleared the air that 1) There
will be no ban on petrol and diesel vehicles in the country. 2) Government has not set any deadline for
automakers to switch to electric vehicles. 3) I am the minister, NITI Aayog does not have the authority to
set Electric Vehicle deadline.
54.1.3 🚕🚕🚕🚕🚕🚕 📔📔 ES19: EVs in India: Charging is the biggest challenge

Norway has the highest share of electric cars in its private transport. Because they provide tax incentives to
EV buyers, waiver of toll fees, free parking, etc. However, the Latest Economic Survey observed that more
than such tax incentives, need of the hour is to develop charging station infrastructure in India because:

 EV batteries’ primary components is Lithium. China has secured a supply of this metals from Congo,
Bolivia, Chile and Australia. China controls half the cobalt mines in Congo. India also has to expand to
such upstream areas to secure Lithium supply.
 EV batteries have limited driving range. So, charging stations must be available throughout the road
networks. Else, people will prefer Internal Combustion Engines (ICE) vehicles like petrol-diesel cars.
 Depending on the technology of charging stations, it can take from 30 minutes to 8 hours to recharge the
battery. Therefore, universal charging standards (सावर्�त्रक चा�जग मानक) are required in India.
 Government should also inform users about the availability of charging stations in their vicinity with the
help of physical science, GPS maps / Apps.
 India's climate is much hotter than Norway. High temperature degrades battery life cycle. We’ve to
encourage R&D accordingly. Otherwise, frequent battery replacement costs will discourage potential
buyers. बार-बार बैटरी बदलवाने का खचार् ग्राहक को हतो�ािहत कर सकता है .
68
🚕🚕🚕🚕✍ EV-Conclusion: Electric vehicles represent the next generation in sustainable mobility. India
must emphasize on them to reduce its GHG emissions, and to provide new avenues for employment and
export earnings. Aforementioned initiatives / reforms are important in this regard/need to be addressed on
priority basis.
54.1.4 🚕🚕🚕🚕 TRANSPORT→ 🚕🚕🚕🚕 ⏬ Fossil Fuel Emission → Bharat Stage Norms
⇒ Environment Ministry → Statutory Body: Central Pollution Control Board (CPCB) has instituted Bharat
Stage emission norms (BS) norms . जीवा� �धन उ�जर्न मानक
⇒ Higher the standard number = stricter the norms = more expensive for automakers to design such types
of engines.
- 1/4/2017: BS-IV compliant vehicles made compulsory.
BS-IV(4)
- 1/4/2020: SC banned their sale from this date
BS-V(5) Modi decided we’ll directly jump to Stage 6.
Only this type of vehicles can be sold from 1/4/2020 onwards
BS-VI(6)
Stage-VI vehicles will emit less Sulphur and Nitrogen Oxides than their predecessors.
⇒ 1) Many buyers awaiting new BS6 cars’ prices to fall instead of buying BS4 models.
⇒ 2) Even though the BS4 car may be cheaper, it’ll not have good re-sale value in the 2nd-hand used market
after 5-6 years. So buyers are hesitant.
⇒ 1+2 = among reasons for ⏬ in automobile sales in 2019
⇒ Separately, Department of Heavy Industry notified Corporate Average Fuel Efficiency (CAFE) norms for
passenger cars, requiring them to cut down CO2 emission from 2017 onwards.
54.1.5 🚕🚕🚕🚕 ⏬Decarbonizing Transport in India (2020-June)

⇒ 5 year Project by NITI + OECD's International Transport Forum (ITF)
⇒ 13% of India's Co2 emissions come from the transport sector. This project aims to reduce it. प�रवहन म� काबर्न
क� उ�जर्न को कम करना
⇒ More details prepare from Environment lecture/Current PDFs.

54.2 🛵🛵⚔🚕🚕⚖ MOTOR VEHICLE AMENDMENT ACT 2019
- Road accidents claim ~1.5 lakh lives every year. So, Union’s Motor Vehicles Act, 1988 was amended in
2019 with steep penalties (बड़ा जुमार्ना)- such as Drunk-driving fine increased from ₹ 2,000 to ₹ 10,000 etc.
Even road contractors and officials can be punished with fine if faulty infrastructure results in accidents.
- Concurrent List Entry 35: Mechanically propelled vehicles. So, both union and states can enact laws but
Union’s law will prevail.
- But, some State Governments have notified reduced penalties. Union Highway Minister said, “States can
revise fines if they want. However, peoples’ lives should be saved."
Further, this Motor Vehicle (Amendment) Act 2019 mandates:

1. Aadhar card compulsory for getting a driving licence and vehicle registration.
2. Good Samaritan (नेक आदमी: who helps the injured victim in good faith) will not be harassed in civil
/criminal cases. It’ll not be mandatory for them to disclose identity to police / doctors.
3. Road builder can be penalized if poor quality of road leads to accident.
4. Vehicle company can be penalized for sub-standard components. Government can order recall of such
faulty vehicles.
5. Easier registration process of vehicles modified for Divyang(PH)
6. A Motor Vehicle Accident Fund (मोटर वाहन दुघर्टना �न�ध) will provide compulsory insurance cover to all
road users in India for certain types of accidents.
7. Technical reforms in third party motor-vehicle insurance & claims.
54.3 🚕🚕🚕🚕TRANSPORT → TRANSBORDER CONNECTIVITY (सीमापार स�द्धन)

Kartarpur - Kartarpur Sahib is located on the Ravi river bank, Pakistan, about 4.5 km from the
Sahib Corridor international border.
(2019) - Here Guru Nanak Sahib spent his 18 years until his death in 1539.
- 2019: 550th birth anniversary of Guru Nanak Sahib.
- Govt launched Visa-free corridor - Indian citizens and OCI (Overseas Citizens of
India) can travel from India to Pak.
Sonamura- - Sonamura (Tripura) to Daudkandi (Bangladesh)
Daudkandi - This is a riverine route connecting Tripura’s Gomati river with India’s national
(2020-Sept) waterways through Bangladesh’s Meghna river.
Blue Dot ⇒ Proposed by the USA, Japan and Australia. India is yet to join.
Network ⇒ If an infrastructure project gets ‘Blue Dot’ Certification = Project has high standards
(2019) of quality, transparency, sustainability, and developmental impact.
⇒ This will encourage private investors from 1st world nations to invest in such
projects.
Gwadar - Gwadar Port@Pakistan. So obviously China helped building it.

Chabahar & - Chabahar Port@Iran. India helped building it.
- 2016: PM Modi signed agreement with Iran to construct a railway line from
Chabahar port to Zahedan (a region bordering Afghanistan)
- 2020-Jul: Iran dropped India from project citing India’s funding delays. Separately,
Iran is also seeking a 25 years economic and security partnership pact with China to
get billions of funding. So, critics term it as failure of Indian diplomacy.

55 🚝🚝 TRANSPORT → RAILWAY
55.1 🚝🚝� RAILWAYS → MODERNIZATION → PERSONNEL & ORGANIZATIONAL REFORMS (का�मक और

सं गठना�क सुधार)
⇒ Earlier, Sam Pitroda Committee (2012) and Bibek Debroy Committee (2015) and many others had
suggested various organizational reforms for the Railways.
⇒ Modi Cabinet had constituted Alternate Mechanism (AM / वैक��क िक्रया�व�ध: a group of cabinet ministers
to decide on a particular subject).
⇒ 2019-Dec: following was approved (1) Unification of Services (2) Restructuring of Railway Board
55.1.1 🚝🚝� Railways Personnel Reforms → Unification of Services (सेवाओं का एक�करण)

BEFORE AFTER
Technical services ⇒ These eight services will be
recruited through Indian Engineering Service (IES) exam of UPSC viz. merged into Indian
⇒ 1) Indian Railway Service of Engineers 2) Signal Engineers 3) Railways Management
Mechanical Engineers 4) Electrical Engineers 5) Stores Services Service (IRMS): भारतीय रेलवे
Non-Technical services प्रबं धन सेवा).
recruited through Civil Services Exam (CSE) of UPSC viz. ⇒ Benefit? Improved
6. Indian Railway Traffic Service (IRTS) coordination and
efficiency. (बेहतर सम�य और
7. Indian Railway Accounts Service (IRAS)
द�ता)
8. Indian Railway Personnel Service (IRPS)
This resulted in fragmented manpower planning, lack of coordination
with each other, departmental rivalries
Indian Railway Medical Service (IRMS), recruited through It’ll be renamed as Indian
Combined Medical Services Examination of UPSC Railway Health Service (IRHS:
भारतीय रेलवे �ा� सेवा ).
👿👿✋ Unification of Services → Controversy?
⇒ Officers fear their seniority / promotion may be affected with merger.
⇒ Electrical / mechanical engineering works can’t be manned by non-Engineers because they don’t have
subject knowledge.
⇒ Therefore merger into a single service is irrational (तकर् हीन).
⇒ Bibek Debroy Committee (2015) suggested merger of these services into two services 1) technical and 2)
non-technical. That’d have been more rational decision.

55.1.2 🚝🚝🚝🚝Railways Organizational Reforms → Restructuring of Railway Board
BEFORE AFTER (रेलवे बोडर् का पुनगर्ठन)
Railway Board, the apex decision making Similar to a Company board.
body of Railways had ⇒ Chairman of the Railway board will be the Chief
⇒ One Chairman Executive Officer (CEO: मु� कायर्कारी अ�धकारी)
⇒ Members selected from various ⇒ 4 functional Members (कायर्परक सद�) i.e. officers from
Railway departments. Railways selected on merit cum seniority basis.
⇒ Some independent members with knowledge &
experience in industry, finance, economics and
management fields
Railway board members were allocated Railway board members were allocated subjects on functional
subjects on departmental lines such as lines, similar to a company board
1. Traffic 1. Operation (ऑपरेशन)
2. Rolling Stock 2. Business Development (�ापार �वकास)
3. Traction 3. Human Resources (मानव सं साधन)
4. Engineering 4. Infrastructure (बु�नयादी अवसं रचना)
5. Finance (�व�)
55.2 🚝🚝 🧔🧔:👲👲 RAILWAYS MODERNIZATION → PRIVATE TRAIN OPERATORS
Table 1: benefits of allowing private trains in India?
🚝🚝 🧔🧔 BEFORE 👲👲 AFTER: allowing private train operators
⇒ Indian Railways itself responsible for On selected routes (NOT all routes):
running the trains, collecting ticket-fees, ⇒ Private train operators (�नजी ट�ेन सं चालक) will buy
delivering passengers and goods. their design/buy their own private trains from
⇒ Affluent passengers (धनी / पैसो से सं प� यात्री) anywhere in the world. They’ll run it on Indian
prefer Airlines over Railways because tracks with their own driver, staff, & charge
they’re faster, cleaner & safer. market-linked fares. (बाजार आधा�रत िकराए.)
⇒ Government (Indian Railways) provide timetable,
track and signaling infrastructure to them.
⇒ Private train operator will share % of its revenue
with Government.
⇒ Lately, Government itself started ‘premium ⇒ Passengers will benefit from world-class train
trains’ such as Duronto, Tejas, Vande services e.g.
Bharat, Uday, Hum-Safar etc.

🚝🚝 🧔🧔 BEFORE 👲👲 AFTER: allowing private train operators
⇒ But there is a long waitlist for tickets. Which ⇒ No nuisance of hawkers, beggars, unhygienic
proves people are willing to pay for good toilets.
service, but Govt alone doesn’t have enough ⇒ Lady train hostesses to deliver food & amenities.
funds to launch many such ‘premium ⇒ Such trains will stop at very few stations, will have
trains’. minimum 160 kmph speed → faster and more
pleasant journey. (तेज व् सुखद यात्रा का अनुभव)
⇒ 2006: Ministry of Railways allowed private operators to run container trains on the Indian Railways (IR)
network.
⇒ Railways constituted Amitabh Kant Panel for entry of private operators in passenger trains.
⇒ 2019-Oct: FIRST ‘Private’ train: Lucknow-Delhi Tejas Express launched. It’s operated by IRCTC.
Although, IRCTC is a subsidiary company of the Ministry of Railways. So, technically, it’s not ‘fully
private train’ but if this experiment is successful, then actual private operators may be allowed.
⇒ 2020-Jan: Indian Railways has invited private companies to apply for running 150 passenger trains on 100
routes. Draft proposal is as following:
Table 2: Draft Public Private Partnership (PPP) model for private railways
Private player will Design, Build, Finance and Operate (DBFO: िडजाइन, �नमार्ण, �व�
Model और सं चालन) his private trains on the routes given to him. Train must have
minimum 16 coaches.
35 Years. After that, the government may renew/ Government itself may start
Concession Period
operating it / select another party...depending on the mutually agreed conditions
(�रयायत क� अव�ध):
in the contract.
private train operator will share a % of his revenue with the Government. (�नजी
Fees
सं चालक ने अपनी आमद म� से कु छ प्र�तशत सरकार को देना होगा)
55.2.1 (🚝🚝 🧔🧔:👲👲) 👿👿✋ Challenges in allowing private trains (चुनौ�तयां)

1. Apprehension among railway employees about job-loss, if Government reduces number of Government
trains.
2. Coordination / ego-tussle (सम�य / अहं-तु��) between private crew running the train and railways
Government officials operating the track & signal system.
3. Fixing responsibility / insurance claims during train accidents.
4. To keep their operational costs low, Private airlines not doing regular service-maintenance of aircrafts-
which endangers passenger security (यात्री सुऱ�ा). Similar danger in private railways.
5. In the aviation sector, Jet Airways et al engaged in Predatory Pricing (= selling tickets at deep discount) to
kill rival companies. Eventually all suffering from losses. Similar crisis in mobile service providers (Jio vs
others). So, fair competition & price regulatory mechanism required. (सरकार ने �� प्र�तयो�गता एवं क�मत �नयं त्रण
सु�न��त करना होगा)
6. If private player imports railway from foreign country, its repair parts / mechanic may not be easily
available in India…. <We can find 500 such faults but UPSC doesn’t conduct recruitment of theHindu
columnists.>

55.2.2 (🚝🚝 🧔🧔:👲👲) ✍Private Trains → Conclusion- welcome this reform
⇒ Entry of private train operators will bring greater investment, innovation, employment and pleasant
travelling experience for the passengers.
So, the Government has taken an appreciative step, provided the aforementioned challenges are kept in check
(ये एक सराहनीय कदम है यिद, उपरो� चुनौ�तयों को काबू/�नयं त्रण म� रखा जाए).
55.2.3 🚝🚝 Transport → Hyperloop

⇒ Space-X & Tesla founder Elon Musk proposed this fifth mode of transport after boat, rail, plane and
automobile.
⇒ Basically a vacuum / pneumatic tube system to transport passengers using aluminium pod cars.
⇒ Maharashtra Govt was talking with international developers to build a Hyperloop between Mumbai and
Pune to cover 150 kms in 25 minutes.
⇒ Avishkar Hyperloop = IIT-Madras research team on Hyperloop
55.3 ✈ TRANSPORT → AVIATION (उड्डयन / हवाई यात्रा)
55.3.1 Airfare price ceiling (हवाई यात्रा दरों म� �नयं त्रण)

⇒ 2020-May: Civil Aviation ministry announced technical reforms e.g. The minimum airfare for Delhi to
Mumbai is ₹3,500 and the maximum is ₹10,000. etc.
⇒ But poor cost benefit for the exam.
⇒ This may help in
o Consumer protection during Corona travel. ग्राहक सुर�ा.
o solving the 'predatory pricing' problem among aviation companies. "जानबूझकर �यं क� नुकसानी म� स�े
िटकट बेचना तािक दु�न कं पनी का धं धा बं द हो जाए".- उस पर रोक.
55.3.2 ✈ Transport → Drone Regulation (ड�ोन �व�नयमन) & GARUD Portal

- Boss? Civil Aviation ministry designed the rules effective from 31/12/2018.
- India’s airspace classified into
- Red Zone (flying not permitted),
- Yellow Zone (controlled airspace),
- Green Zone (automatic permission).
- Drone-User will have to do one-time-registration with Digital Sky Platform app
- Then for every flight, Drone user must ask permission from mobile app. Based on the zone & GPS
location its system will automatically permit / deny.
- Any drone without a digital permit will not be able to takeoff. Thus, it has “no permission, no takeoff”
(NPNT) mechanism.

- 2019-Sept: Iran-backed Yemenis Houthi rebels used drone to destroy oil refineries in Abqaiq, Saudi
Arabia.
- 2019-Dec: USA used drone to kill Iran’s military commander Gen. Qassem Soleimani. So, now
Government of India planning to tighten the drone regulations further.
- 🤧🤧 😷😷 2020: Garud Portal: DGCA to give fastrack permission to government agencies for COVID-19
related drone operations.
Figure 2: Akshay may need ‘Airlift’, but ‘Bhai’ doesn’t need Vande Bharat Mission. Capable of 1) becoming Captain of a ship 2)
Rescuing kidnapped nurses 3) surviving oil-mine blast- all in Middle East
55.4 🤧🤧 ⛴✈ VANDE BHARAT MISSION 2020- INDIANS KI WATAN-WAAPSI

⇒ Boss? Ministry of Civil Aviation is coordinating with Ministry of External Affairs and state Govts ( नाग�रक
उड्डयन �वदेश मं त्रालय )
⇒ for bringing Indians back Indians who’re stuck overseas during Corona.
⇒ It’s considered to be India’s largest repatriation (प्र�ावतर्न/ वतन वापसी) operation since the 1990’s
Gulf/Kuwait war. [But UPSC doesn’t usually engage in superlatives-KBC-GK: biggest/largest/longest...so
not really important whether it was bigger than Gulf rescue.#थोड़ा-पढ़ो-आगे-बढ़ो ]
⇒ Separately, to provide skill/employment for these returned-Indians, Government also launched
SWADES (Skilled Workers Arrival Database for Employment Support) but all skill schemes under
Pillar6: HRD.
55.5 🗽🗽TOURISM & MUSEUM INFRASTRUCTURE (प्रवासन व सं ग्रहालय)

- World Economic Forum’s Travel & Tourism Competitive Index: india’s rank improved from #64(2014)
→ #34(2019)
- Tourism contributes to over 1.60 lakh crore₹ in Foreign exchange earnings & provides employments to
thousands of people.
55.5.1 �🗽🗽 [Yearbook] Ministry of Tourism

Dept ⇒ N/A
Attached, ⇒ N/A or not MCQ worthy
Subordinate,
Statutory
Autonomous ⇒ Indian Institute of Tourism and Travel Management
⇒ National Institute of Watersports
⇒ National Council for Hotel Management & Catering Technology
⇒ Institutes of Hotel Management
PSU ⇒ (*) India Tourism Development Corporation

(*) means approved for strategic disinvestment (=privatization) in 2019.
55.5.2 🏬🏬 Tourism→ PRASAD & HRIDAY Mission

Both are Central Sector Schemes: 100% funded by Union. Both aim to improve the city infrastructure &
amenities with special focus on improving the tourism.
PRASAD (2014-15) HRIDAY (2014-15)
Pilgrimage Rejuvenation & National Heritage City Development and Augmentation Yojana
Spiritual Augmentation Drive.
Ministry of Tourism, initially 12 Ministry of Urban Development, 12 cities: Ajmer (Rajasthan),
cities but then list keeps getting Amaravati (Andhra Pradesh), Amritsar (Punjab), Badami (Karnataka),
expanded to 20+. Dwaraka (Gujarat), Gaya (Bihar), Kanchipuram (Tamil Nadu), Mathura
(UP), Puri (Odisha), Varanasi (Uttar Pradesh), Velankanni (Tamil
Nadu), Warangal (Telangana),
⇒ 2015: Ministry of Tourism launched the Swadesh Darshan Scheme to develop circuits having tourism
potential e.g. Tourist reception Centers, Solid Waste Management, Streetlight, Landscaping, parking etc.
where the Private Sector is not willing to invest.
⇒ 😷😷"Stranded in India"- Tourism ministry portal for the foreigners who are stuck in India during Corona
⇒ 😷😷"Dekho Apna Desh"- Tourism ministry virtual campaign / webinar to promote tourism
55.5.3 �🎷🎷🎷🎷 [Yearbook] Ministry of Culture (सं �ृ �त मं त्रालय)

Dept ⇒ N/A
Attached ⇒ Archaeological Survey of India, New Delhi
⇒ National Archives of India, New Delhi
Subordinate ⇒ Kolkata: Anthropological Survey of India, Central Reference Library, National Library
⇒ National Museum, New Delhi
Autonomous ⇒ Lalit Kala Akademi, New Delhi
⇒ National School of Drama, New Delhi
⇒ Sahitya Akademi, New Delhi
⇒ Sangeet Natak Akademi, New Delhi
⇒ Central Institute of Buddhist Studies, Leh
⇒ Central Universities of Tibetan Studies, Sarnath, Varanasi
⇒ The Asiatic Society , Kolkata
⇒ Jallianwala Bagh National Memorial Trust
⇒ Zonal Cultural centers
💼💼Budget-2020: an Indian Institute of Heritage and Conservation under Ministry of Culture with the status
of a deemed University. (Although location / whether autonomous/ statutory = yet to be announced)
55.5.4 🗽🗽💼💼Tourism → Museum Infra in 💼💼Budget-2020 (सं ग्रहालय)

5 onsite archaeological Rakhigarhi (Haryana), Hastinapur (Uttar Pradesh) Shivsagar (Assam),
museums at Dholavira (Gujarat) and Adichanallur (Tamil Nadu).
maritime museum Lothal - the Harrapan age maritime site near Ahmedabad, by Shipping
Ministry

Oldest Museum Indian Museum in Kolkata is the oldest. We’ll renovate it.
Museum on Numismatics To be setup at Old Mint building Kolkata (Ref: Pillar#1A)
and Trade
Tribal Museum Ranchi (Jharkhand)
56 INFRASTRUCTURE → 🏬🏬 URBAN (शहरी बु�नयादी अवसं रचना)
56.1.1 2020 marks 5th Anniversary of Urban Mission

Schemes Collectively called
1) 500 AMRUT cities Urban Rejuvenation Mission (शहरी कायाक� �मशन)
2) 100 Smart cities → 💼💼Budget-2020: we’ll
develop five new smart cities. But, names yet to be
announced.
Above two + PM Awas Yojana (Urban) → Urban missions
56.1.2 🏬🏬 � Cities → TULIP Internship (2020-June)

⇒ TULIP (The Urban Learning Internship Programme.)
⇒ Boss? Joint initiative by Minister for Housing and Urban Development (MoHUA) and the All India
Council for Technical Education (AICTE, Statutory body under the HRD/Edu Ministry) for giving 1
crore internships by 2025.
⇒ Urban local bodies (ULB) can announce Internship opportunities on TULIP website.
⇒ Internship subjects? Urban Planning, Water Supply, Waste Management, Slum rehabilitation, Digital
Governance, Transport Engineering, Municipal Finance. (शहरी �नयोजन, जल आपू�त, अप�श� प्रबं धन, झु�ी-
पुनवार्स, िड�जटल प्रशासन, प�रवहन इं जी�नय�रंग, नगर �नगम �व� प्रबं धन )
⇒ Eligibility? Indian citizen who finished the final year of college within the last 18 months. (यो�ता)
⇒ Duration of Internship? eight weeks to one year. (इं टनर्�शप क� अव�ध)
⇒ Budget allocation? No separate budget provided but stipend may be given from the funds available under
may be used from smart cities, AMRUT etc schemes, if ULBs wish
⇒ ✋Further administrative procedures / Salient features of the scheme = poor cost benefit.
56.1.3 🏬🏬 🌲🌲🌲🌲🌴🌴 URBAN → Misc → Nagar VAN (2020-Jun)

⇒ Boss? Ministry of Environment, Forest and Climate Change (पयार्वरण, वन और जलवायु प�रवतर्न)
⇒ To develop 200 Urban Forests across the cities of India in the next five years
56.1.4 🏬🏬 URBAN → Misc → Parliament area, Central Vista

⇒ Boss? Ministry of Housing & Urban Affairs → CPWD

⇒ New Delhi's Central Vista region has Rashtrapati Bhawan, Parliament House, North and South Block,
India Gate, National Archives etc. All these iconic buildings were constructed before 1931. So these old
buildings pose structural dangers. (जजर्र इमारत �गरने का डर)
⇒ Central Government ministries/dept/offices are scattered over different locations → → unnecessary
travel & pollution.
⇒ Central Vista project aims to redevelop these buildings @₹20,000 crores.(पुन�नमार्ण)
⇒ 👴👴 2022= India's 75th Independence Day. So, govt hoped to finish building parliament by 2022. Other
buildings to be finished in 2021-24.
⇒ 🤧🤧🤧🤧 Then Corona: funding issues, SC petitions → ball by ball commentary, not important.
56.1.5 🏬🏬 📊📊 Cities → Misc → TWO Indices for Quality of Life

2020: Urban ministry launched two indexes/indices to assess quality of life of citizens in 100 Smart Cities and
14 other Million Plus Cities viz.
i. Ease of Living Index (EoLI)
ii. Municipal Performance Index (MPI)
✋But chasing their methodology and ranking = poor cost:benefit
56.1.6 🏬🏬 📊📊 Cities → Misc →IUDX (सं शोधन कतार्ओ ं को डाटा प्रदान करने के �लए)
India Urban Data Exchange (IUDX) by MoHUA + Indian Institute of Science (IISc), Bangalore. This portal
provides open source data for researchers / app developers / startups.
56.1.7 👻👻(🏠🏠) → Affordable rental housing Complexes (AHRC)

िकराए के मकान िकफायती दरों पर गरीबों और प्रवासी श्र�मकों के �लए. → �ब�र सरकारी जमीन पर / जजर्र सरकारी मकानों तो तोड़कर
नए मकान बनाएगा- गरीब िकरायेदारों के �लए. इस योजना म� �ब�र को �रयायती दरों पर कजार् और टै� म� लाभ िदया जाएगा
⇒ Boss? Ministry of Housing & Urban Affairs (MoHUA)

⇒ Pradhan Mantri Awas Yojana – Urban (PMAY–U) → new subcomponent AHRC launched in 2020-May
(under Atma-Nirbhar initiative).
⇒ Government will sign an agreement with builders (technically called as "Concessionaire"). Basically..
⇒ Builders will be given vacant govt land & dilapidated govt buildings, concessional loans, and tax relief.
(How exactly? NOT IMP)
⇒ Builders will construct housing complexes → rent it for 25 years at affordable prices to urban migrants /
poor.
⇒ Benefit? Migrants live in slums, illegal colonies or peri-urban areas to save rent. They spend lot of time
travelling to workplaces. AHRC will ⏬ unnecessary travel from peripheral areas, congestion and
pollution.
56.1.8 (🏠🏠) Sustainable Housing → Global Housing Technology Challenge (GHTC) 2019
- Boss? Ministry of Housing and Urban Affairs
- asked experts / private sector companies to propose disaster-resilient, environment friendly, cost-effective
and speedy construction technologies.

- They’ll be implemented on a pilot basis in some cities to see the results.
56.1.9 (🏠🏠) Sustainable Housing → World Habitat Award 2019 to Odisha’s JAGA Mission
⇒ By a UK-based organization in partnership with United Nation (UN)-Habitat
⇒ 2019-Bronze award given Odisha government's Odisha Liveable Habitat Mission also known as ‘Jaga
Mission’ in partnership with Tata Trust.
⇒ In this scheme, urban slum dwellers are given land ownership titles, create road, streetlight, water-
sanitation infrastructure → Then Govt will not evict them / not destroy their slums. Permanent home
address proof also helps poor families to enroll children in school, open bank accounts etc.
⇒ Beneficiaries are given 30 square metre of land free of cost and for the remaining land they have to pay as
per the benchmark price.
56.1.10 (🏠🏠) → Model Tenancy Act, 2019 (आदशर् िकरायेदारी अ�ध�नयम)

2019-Jul: RBI’s quarterly residential asset price monitoring survey (RAPMS) found that housing affordability
has worsened over the past four years. People’s income failed to keep pace with rising property prices. In
Mumbai, difficult to find home even with a budget of ₹ 45 lakhs!
Since it is not possible to construct houses for each and everyone, we also need to promote rental housing
especially for migrant workers. But, current Rental Laws are archaic. So, 2019-July Ministry of Housing &
Urban Affairs drafted a Model Tenancy Law with following features, and asked States to adopt it:
 It covers properties rented for residential, commercial, educational use.
 Specific provisions about security deposit, mechanism to increase rental amount- in a way that it protects
both the tenant and landlord. (िकरायेदार और मकान मा�लक)
 If tenant doesn’t vacate the premises after rent-period is over or damages the property, then heavy
penalties on him.
 Dy.Collector rank officials will be designated as ‘Rent Authority (िकराया प्रा�धकरण)’. Higher appeal to Rent
Court → Rent Tribunal. Disputes will be settled within 60 days deadline.
56.1.11 (🏠🏠) → Corona: Landlords, tenants, rent & eviction

🤧🤧 😷😷 Corona lockdown → Jobs lost → tenant families unable to pay rent → eviction. (मकान मा�लक द्वारा
िकरायेदारों को घर से �नकाल देना )
⇒ Some landlord windows / elderly solely relying on rent income for their survival. They also need
protection. (कु छ मकान मा�लक �वधवा बुजुग� के �लए िकराया ही उनक� आमदनी का सहारा था)
⇒ Some state governments announced relief/rules to address this. But, if all States adopt Central
government’s Model Tenancy Act, 2019- It will be useful. (आदशर् िकराएदार अ�ध�नयम)
⇒ Thehindu columnists write dozens of columns. But this is a very microscopic topic in the grander picture
of " economic revival after corona." = Poor cost-benefit for exam
🏠🏠 ✍ Conclusion Housing? A homeless family is more vulnerable to crime, disease & disasters. SDG Goal
#11 requires India to provide safe and affordable housing to all by 2030. Aforementioned scheme / policy /

challenges….. अपराध, बीमारी और आपदाओं म� एक बेघर प�रवार क� भेद्यता अ�ो से अ�धक होती है. सतत �वकास ल� : सभी को
सुर��त और िकफायती आवास उपल� कराना ज�री
57 INFRA → RURAL (🏞🏞)
57.1.1 🏞🏞 📲📲 Panchayati Raj Day & Portals

- 73rd Constitutional Amendment Act,1992 came into force from 24 April 1993. (सं वैधा�नक सं शोधन
अ�ध�नयम)
- So, from 2010 Government started commemorating 24th April as National Panchayati Raj Day.
- Panchayati Raj Ministry runs following Portals:
- e-GramSwaraj: Gram Panchayat Development Plans:- to prepare and monitor them.
- PRIASoft: monitor Receipts Expenditure of the Panchayati Raj bodies viz. Zilla, Block and Village
Panchayat.
57.1.2 🏞🏞 📐📐 Swamitva scheme for land survey & title disputes

⇒ 2020-Apr: Ministry of Panchayati Raj → Scheme launched on pilot basis in 6 states. (प्रायो�गक तौर पर चु�नंदा
रा�ों म� ही)
⇒ Rural inhabited lands will be survey with drones and technology. (जमीन का सव��ण)
⇒ It will help getting clarity over property rights → Land revenue collection, Bank loans application
approval, Settlement of Title Disputes (जमीन मा�लक क� के कोटर् �ववादों का �नपटान)
57.2 🏞🏞👴👴👴👴 RURAL → MPLADS (1993)

Members of Parliament Local Area Development Scheme (सांसद �ानीय �ेत्र �वकास योजना). Central Sector
Scheme =100% funded by Union.
- Boss? Ministry of Statistics and Programme Implementation (MoSPI).
- Each MP can suggest development works worth ₹ 5 crore per year in his constituency. Rajya Sabha MP:
any district in his State. Nominated MP can select any district in anywhere in India.
- Role of the Members of Parliament is limited to recommend works. Thereafter, it is the responsibility of
the district authority (DM/Collector,IAS) to sanction, execute and complete the works recommended
within the stipulated time period.
🤧🤧 😷😷Corona-2020-April: Govt suspend this scheme for 2 years = savings of about ₹8000 crores. total
amount will be transferred into the Consolidated Fund. Govt justified it, “every rupee was needed to bolster
the resources available to our nation as we address the impact of Covid-19”

57.2.1 🏞🏞 🤧🤧 MPLADS Suspended (योजना को ��गत करना)
2020-April: To save the money for fighting Corona, Government announced two measure
⇒ MP salaries will be cut by 30% वेतन म� कटौती

⇒ MPLADS scheme will suspended for two financial years i.e. 2020-21 and 2021-22
✅Arguments favouring suspension ✋Opposing scheme suspension

योजना ��गत करना= सही कदम योजना ��गत नहीं करनी चािहए थी
⇒ Nepotism: Politicians' relatives will be ⇒ 2010 Court judgement has held that the MPLADS
given the contracts. scheme is not unconstitutional. कोटर् ने भी इसे
⇒ Corruption: District administration will get असं वैधा�नक नहीं माना है
the bribes, Substandard quality of assets ⇒ All members of parliament cannot become
developed- as per CAG reports. ministers. But if they have some funds at their
⇒ Appeasement: Assets generally be disposal they can do some important work for their
developed in area with high concentration constituency and voters, depending on local needs.
of a particular caste/religion who gave large सांसद को अपने इलाके म� अ�े काम करने के �लए अवसर �मलता
number of votes to the said MP. है.
⇒ 16th Lok Sabha: 55% of the members have ⇒ Every government scheme has instances of
not even used the funds allotted from their corruption, nepotism and sub standard quality
quota. Usually MP spend ₹₹ only in the last work. It doesn’t justify that we should stop the
year Before election for media-limelight. scheme, rather we should fix those loopholes. धांधली
But such "election rush"= Work done in a
तो हर योजना म� होती है िकंतु इसका उपाय यह नहीं योजना बं द कर
haphazard manner.
दी जाए ब�� योजना क� खा�मयों को दू र करना चािहए
⇒ भाई भतीजावाद, भ्र�ाचार, तु�ीकरण, चुनाव से पहले
ज�बाजी म� ढेर सारी रकम और प्रोजे� जारी करना-
लेिकन गुणव�ा पूणर् सं प��यों का �नमार्ण नहीं
🔠🔠❓ Which of the following statements is not correct regarding the Members of Parliament Local Area
Development Scheme (MPLADS)? (UPSC-CDS-i-2020)
(a) Members of the Parliament (MPs) sanction, execute and complete works under the scheme.
(b) Nominated Parliament can recommend works for implementation anywhere in the country.
(c) The scheme is fully funded by the Government of India.
(d) The annual entitlement per MP is Rs.5 crore.
57.3 🏞🏞 BORDER INFRA AND SHEKATKAR COMMITTEE (सीमा �ेत्रों म� बु�नयादी अवसं रचना)
⇒ 2015: Defense ministry setup Lt General D B Shekatkar Committee to enhance combat capability and
rebalance defence expenditure of the armed forces.
⇒ 2020-May: Defence ministry announced we'll implement it suggestions related to border infrastructure
namely,
⇒ Border Roads Organisation (BRO)'s road construction work → Outsource to private players via
Engineering Procurement Contract (EPC), if costing more than ₹100 cr= faster and more professional
building of roads.

⇒ BRO to be given high-tech machines for snow clearance on Himalayan roads. Use Geo-Textiles for soil
stabilisation, to prevent landslide damage to roads. सड़क से बफर् हटाने और भू�लन से नुकसान रोकने के �लए अद्यतन
मशीन और तकनीक�
⇒ Field officers to be given more financial and administrative powers. �ानीय अ�धका�रयों को �ादा �व�ीय और
प्रशास�नक स�ाई दी जाएं गी तािक ज�ी कम हो सके
⇒ Reforms for land acquisition and environmental clearance. भू�म अ�धग्रहण और पयार्वरणीय मं जूरी।
⇒ result? Socio economic development & enhanced security in border areas. सामा�जक आ�थक �वकास और सुर�ा
57.4 🌬🌬⚔INFRASTRUCTURE: DISASTER, SECURITY & STRATEGIC AFFAIRS
57.4.1 🕵🕵🕵👮👮👮[Yearbook] Ministry of Home (गृह मं त्रालय)
Dept ⇒ Department of Border Management (सीमा प्रबं धन)

⇒ Department of Internal Security (आंत�रक सुर�ा)
⇒ Department of Jammu, Kashmir & Ladakh Affairs
⇒ Department of Home: Notifies the appointment of the Prime Minister and other
Ministers etc.
⇒ Department of Official Language
⇒ Department of States
Attached / ⇒ Registrar General & Census Commissioner: National Register of Indian
Subordinate Citizens, Census; helps rural and urban ministries for conducting Socio- Economic
Offices and Caste Census (SECC) in respective areas.
⇒ Assam Rifles, Border Security Force (BSF), Central Reserve Police Force (CRPF),
Sashastra Seema Bal (SSB)
⇒ Central Industrial Security Force (CISF)
⇒ Indo Tibetan Border Police (ITBP)
⇒ National Security Guard (NSG)
Statutory ⇒ National Investigation Agency (NIA)
⇒ National Disaster Management Authority (NDMA) →Subhash Chandra Bose
Aapda Prabandhan Puraskar (Awards for disaster management)
⇒ National Human Rights Commission (NHRC)
PSU ⇒ Repatriates Co-op. Finance & Development Bank
Autonomous ⇒ Sardar Vallabhbhai Patel National Police Academy, SVNPA, Hyderabad for
training of IPS officers
⇒ National Crime Records Bureau (NCRB)

⇒ National Foundation for Communal Harmony (NFCH)
⇒ International Coalition for Disaster Resilient Infrastructure (CDRI)
⚖ Home ministry also looks after the administrative matters related to Padma Awards, and legislative
matters related to Passport Act & Citizenship.
57.4.2 🕵🕵🕵🌬🌬 Disaster Infrastructure → Home Ministry → CDRI 2019

⇒ International Coalition for Disaster Resilient Infrastructure (CDRI)
⇒ Announced in 2019’s UN Climate Action Summit in New York, USA
⇒ HQ: Delhi. Registered under Societies Registration Act,1860
⇒ Function: international knowledge exchange for disaster and climate resilience of infrastructure → help
achieving the Sendai Framework targets for disaster risk reduction
57.4.3 🕵🕵🕵🛡🛡 Ministry of Defence (र�ा मं त्रालय)
Dept ⇒ Department of Defence → Armed Forces, Coast Guard, Border Road Organisation,
National Cadet Corps (NCC-1948, Motto: एकता और अनुशासन, Unity and discipline)
⇒ Department of Defence Production
⇒ Department of Defence Research and Development
⇒ Department of Ex-Servicemen Welfare
⇒ Department of Military Affairs → Chief of Defence Staff (Bipin Rawat has rank of
four star general and also ‘Secretary’ to Govt)
Attached ⇒ DG Defence Estate, DG Defence Accounts and others
Subordinate ⇒ Indian Ordnance Factories
Autonomous ⇒ Indian Military Academy (IMA), Dehradun; Sainik School Ghorakhal, Nainital,
Uttarakhand and other similar organizations.
⇒ Institute for Defence Studies and Analyses (IDSA)
Committee ⇒ 2001: Defence Acquisition Council (DAC) was set up under Defence Minister to
fasttrack the procurement of armaments for army, navy, airforce, coastguards. (र�ा
साधनों क� खरीद के �लए प�रषद)
Portal Srijan portal (2020-Aug)
⇒ displays defence items that are being imported currently. So that the Indian industry
can design, develop and manufacture them domestically.
⇒ Help interaction between defence public sector undertakings (DPSUs), Ordnance
Factory to interact with the Indian industry.
⇒ Benefit: Promotes indigenization of defence production.
PSU ⇒ Hindustan Aeronautics Limited, HAL.
⇒ Bharat Electronics, Bharat Dynamics

⇒ Garden Reach Shipbuilders, Goa Shipyard, Hindustan Shipyard, Mazagon Dock
Shipbuilders
⇒ Mishra Dhatu Nigam Limited, MIDHANI.
⇒ (*) Bharat Earth Movers
57.4.4 🕵🕵🕵Ministry of External Affairs (�वदेश मामलों का मं त्रालय)
Responsible for organizing the Pravasi Bharatiya Diwas: (More in 📑📑Pillar#3A).
Dept ⇒ N/A
Attached ⇒ Foreign Service Institute, Delhi
Autonomous ⇒ India Centre for Migration (ICM)
⇒ India Development Foundation of Overseas Indians
⇒ Indian Council for Cultural Relations
Portals ⇒ Madad Portal for consular grievances.
⇒ Passport India Portal
⇒ Kailash Mansarovar Yatra Portal
⇒ e-Sanad for online verification and attestation of documents of Indian citizens abroad.
58 📡📡INFRASTRUCTURE → COMMUNICATION (सं चार)
58.1 📞📞 COMMUNICATION → TELECOM → CONTROVERSIES / NEGATIVE NEWS
58.1.1.1 ☎⚔🤬🤬 Controversy: Adjusted Gross Revenue (AGR)

⇒ Early 90s: Under the LPG reforms, private sector telecom companies were allowed to begin operate in
India.
⇒ They had to obtain telecom licenses & pay certain fees to the Government every year.
⇒ This fees is calculated as a % of their Adjusted Gross Revenue (AGR: समायो�जत सकल राज� / आमद).
⇒ Later, Department of Telecommunications (DoT) and Private Telecom Companies differed over the
definition / formula of AGR. → Matter went to Supreme Court.

⇒ SC ordered companies to pay ₹₹ but they’re making excuses ke “we’ll pay it in instalments in the next 20
years”, SC says “no, you must pay it by next 10 years”…=ballbyballNOTIMP
58.1.1.2 ☎⚔🤬🤬 Controversy: Interconnect Usage Charges (IUC)

⇒ IUC is a fee that one telecom company (e.g. Jio) pays to another company (e.g. Airtel) when its (Jio
customers’) makes a call to a user of that other company (to airtel)
⇒ The charge is decided by TRAI on a per minute basis.
⇒ 2019: Jio started levying IUC from its Jio-customers when they make calls to non-jio customers.
⇒ 2020: TRAI is likely to reduce IUC to ZERO paise.
58.2 💻💻📡📡📡📡📡📡 COMMUNICATION → IT → 5G REVOLUTION IN INDIA

Fifth generation (5G) of wireless technology = 2 to 20 Gbps speed, which is much higher than present 4G
which gives 6-7 Mbps speed. (एक अद्यतन बे-तार तकनीक जो 4g के मुकाबले ब�त ही �ादा तेजी से डाटा प�ंचा सकती है)
 Latency is the amount of time taken by data to travel between its source and destination. 5G has very low
latency. (स्रोत और ल� के बीच डाटा प�ंचाने म� ब�त ही कम �वलं ब होता है)
 Network slicing (नेटवकर् के टुकड़े करना): mobile operators to create multiple virtual networks within a single
physical 5G network. Provide faster data to tele-surgery in rural areas, driverless car, etc.
 Thus, 5g is useful in Internet of Things (IoT) and machine to machine (M2M) communications, CCTV
surveillance, drones, real time data analytics, industrial revolution 4.0.
58.2.1 💻💻💻💻💻💻💻💻 Challenges and Opportunities in of 5g (इसे अपनाने म� चुनौ�तयां+अवसर )

 5g signals tend to deteriorate faster over long distances than lower-frequency signals. So, more number of
towers may be required than 4g, to cover same geographical area
 People will have to upgrade their devices to use 5g → Make in India, employment opportunities.
 Considering these benefits, USA, China, S. Korea are working on war-footing to implement 5g. Our
Department of Telecom too had setup A.J.Paul Raj Committee, it prepared a roadmap for rollout of 5G
telephony in India by 2020.
 5g technology can work in the millimetre bands of 24.75 to 27.25 GHz spectrum. So, Government
planning to auction these “millimetre bands spectrum auction” in 2020.
58.2.2 🤼🤼🤼5G Hackathon by DoT (2020)

⇒ 2020: Department of Telecommunications (DoT) has launched ‘5G Hackathon’ in association with Niti
Aayog, MEITY, MSME Ministry, IITS & other academic and industry stakeholders.
⇒ Individuals and teams to give innovative ideas/solutions related to 5G → win prizes worth total ₹2.5
crores!
58.2.3 � NEST Division in MEA

- New, Emerging and Strategic Technologies (NEST) division created by the Ministry of external affairs
(MEA) for collaboration with foreign nations for 5g, artificial intelligence etc.
- Sidenote: D10 group? (More in 📑📑Pillar#3B)

58.3 📔📔 📔📔 💾💾 ES19: PUBLIC DATA: FOR THE PEOPLE, BY THE PEOPLE
- (Define) Data is a set of factual information stored in digital form. (िड�जटल �प म� सं ग्रहीत त�ा�क जानकारी)
- (Origin) When people conduct their day-to-day activities online, they leave digital footprints- in chatting,
searching google, buying on amazon, file taxes, posting on social media etc. While doing these activities
online, people produce data about themselves which is stored on public and private servers.
58.3.1 💾💾Types of Government Data

1) Administrative data (प्रशास�नक डाटा): Birth-death records, pensions, tax records, marriage records, crime
reports, land-property registrations, vehicle registrations etc.
2) Survey data (सव��ण): Census data, National Sample Survey data about employment, education, nutrition,
literacy etc.
3) Transactions data (लेनदेन सं बं धी): e-National Agri Market data, Taxes, User-fees such as railways etc.
4) Institutional data (सं �ागत): Public school data on pupils, public hospital data on patients, etc. Most such
data are held locally, predominantly in paper based form.
58.3.2 💾💾 🥰🥰Public Data: Opportunities through Data integration

Since the Administrative, Survey, Transaction and Institutional datasets are unconnected, each ministry only
has a partial picture. If all these public datasets are integrated then (सावर्ज�नक डेटासेट एक�कृ त िकए जाए तो ):
73
- While filling every new form, Person will not have to provide same details e.g. his education, address
proof, farm-land ownership proof etc.
- Weeding out bogus beneficiaries (फज� लाभाथ�ओ को रद करना): If vehicle ownership records are compared
with BPL beneficiaries list → remove car owners claiming to be BPL for Government schemes.
- National health register (रा��ीय �ा� र�ज�र): Similar to Digilocker it’ll contain medical records of patient
tied with his Aadhar. Benefits? 1) During emergency doctor can access the medical history, even if patient
is unconscious 2) surveillance of syndromes 3) immunization information.
- Digital Dashboard for Transparency & Accountability(पारद�शता और जवाबदेही)
- A district education officer can make better decisions if he knows, for each school in his district,
attendance rates of students and teachers, average test scores and status of school toilets.
- Parents can make better decisions about which school to send their children to if they know the
average absenteeism rate of teachers in their village and can compare the rate to that in the
neighboring village.
- Researchers can use such data to validate the efficacy of Govt schemes and suggest remedies for
future. (Union government’s already launched Open Government Data platform for this.)
- Private sector should be given selected databases for commercial use, after paying fees to Govt. for
example,

- If school test scores’ data of a given district / city is sold to a coaching company, it can use it for
more targeted advertising / setting new classrooms in the areas accordingly. So, the company will
benefit, parents will benefit.
- Similarly, Uber can use public bus transport / passengers data to identify congested areas, deploy
more taxis / rickshaws in the peak hours accordingly.
- Since govt is selling data-> it’ll earn a new stream of revenue to control fiscal deficit.
- 2019-Sept: Considering these benefits, MEITY setup Kris Gopal Krishnan committee for the regulation
of non-personal data such as community data, anonymous data. (गैर-�नजी डेटा)
58.3.3 💾💾 Telangana Government’s Samagra Vedika initiative:

Using the name and address of an individual as common identifier, Telangana Government linked 25
Government datasets such as
− crimes, assets, electricity connection, subsidies, education, taxes etc

− Each individual was then further linked to relatives such as spouse, siblings, parents and other known
associates.
− This helps in detection of crime. Identifying ineligible/fictitious beneficiaries.
Union Government is also “linking” of Bank account datasets – primarily through Aadhaar number, PAN
database, mobile numbers. It helps combing through transaction records, find out tax evaders and Benaami
accounts.
58.3.4 💾💾 Govt efforts to release statistical data

Following initiatives to help the policymakers, researchers, innovators, data scientists, journalists and citizens
to find statistical information related to governance:
⇒ National Informatics Centre (NIC) → Open Government Data (https:// data.gov.in)

⇒ NITI announced to launch National Data and Analytics Platform (NDAP) in 2021
58.3.5 💾💾😰😰 Challenges in public data

− If Data Privacy (डेटा क� �नजता / गु�ता) is breached or data is leaked accidentally, it may bring forth legal
consequences, financial implications and disruption in family / social life. E.g. if death certificate leaked
online that Mr.”X” died of HIV/AIDS. His entire family may be ostracized by the neighbors.
− If data is hacked: financial loss, national security. (आ�थक नुकसान रा��ीय सुर�ा खतरे म�)
− A majority of the poor still have no digital footprint. Existing paper-based data need to be converted into
digital form. Govt can ask citizens to become volunteers, even launch App.
− District government official should be trained in “How to use data for analytical decision making?”
Otherwise mere collection of data will be of limited use. (डाटा क� मदद से �नणर्य �मता को कै से बढ़ाएं ? इसक�
अफसरों को तालीम देनी होगी)
− Many State govt create ‘online dashboards’ for monitoring schemes BUT These dashboards are not easily
accessible to citizens, require password; sometimes portals are not functional or contain outdated data.

58.3.6 💾💾 �Conclusion: Public Data (सावर्ज�नक डेटा)
 If scattered public data is integrated, it’ll bring greater transparency, accountability in public services and
improve targeting in welfare schemes. (�बखरे �ए सावर्ज�नक डेटा को एक�कृ त िकया जाए- पारद�शता जवाबदेही योजनाओं
क� असरकारकता बढ़ेगी)
 Therefore, just like highways, government needs to view data as a public good and important
infrastructure. Govt should make necessary investments & regulations for it, while protecting data
privacy. (सरकार ने �नवेश करना ज�री �नयं त्रण करना ज�री िकंतु नाग�रक क� �नजता का स�ान करना चािहए)
 In the spirit of the Constitution of India, data “of the people, by the people, for the people” must therefore
become the mantra for the government.
58.4 🔭🔭🔭🔭SPACE TECH INFRASTRUCTURE (अवकाश �ेत्र)
⇒ Prime Minister → Department of Space (DOS: HQ Bengaluru ) → Indian Space Research Organisation:
(ISRO: HQ Bengaluru)
⇒ DOS/ISRO has two Government companies
o Antrix: It helps foreign nations/ companies to launch satellites with ISRO's help.
o NewSpace India Limited (NSIL, 2019) for production of launch vehicles & collaboration with
private sector players.
58.4.1 👻👻🔭🔭🔭🔭Space Tech: Atma-Nirbhar

⇒ 2020-Jun: Govt setup Indian National Space Promotion and Authorization Centre (IN-SPACe), an
independent agency under ISRO.
⇒ IN-SPACe will help private companies to use Indian space infrastructure for developing / launching
satellites / space tourism etc. (�नजी �ेत्र क� कं प�नयों को अवकाश �ेत्र क� सरकारी बु�नयादी सु�वधा उपयोग के �लए अवसर)

59 🧱🧱🧱🧱 INFRA → GSM3: INVESTMENT MODELS (�नवेश के तरीके )
59.1 🧔🧔🧔🤵🤵 🛡🛡 INFRA.DEV. → NON-PPP → GOCO FOR INDIAN ARMY
Army’s Central Ordnance Depot (COD) and Army Base Workshops (ABWs) are responsible for
manufacturing & warehousing, maintenance, repair and overhaul (MRO: �व�नमार्ण और भं डारण, रखरखाव, मर�त)
of
⇒ Weapons, Ammunition, Tanks, Trucks, Radars, Air defense system etc.

⇒ Clothing, footwear, headgear, tent & camping gears, kitchen equipment etc.
But,
⇒ 2015: CAG audit found them to be overstaffed, inefficient and slow.

⇒ 2016: Defence Ministry’s Lt. Gen. DB Shekatkar (Retd.) committee to “enhance combat capability and re-
balancing defence expenditure.” → recommended GOCO Model.
59.1.1 🛡🛡GoCo Mechanism?

⇒ Government-Owned Contractor-Operated (GOCO) model: private contractors operate the army’s base
workshops that repair equipment from guns and vehicles to tanks and helicopters.
⇒ Government remains the owner of the ABW workshop / COD depot
⇒ But a private player is given a contract to take over the operation / running of such a workshop / depot.
He’ll be responsible for warehousing operations, transportation of material, repair, maintenance etc.
⇒ He will have to absorb the existing civilian employees working there.
⇒ Private player must be an Indian registered company with at least 10 years of working experience & “y”
crore of turnover
59.1.2 🛡🛡GoCo: Pros and Cons

😍😍Benefits? फायदे 😪😪Challenges? चुनौ�तयां
⇒ ⏬salary bill for Govt वेतन खचर् कम होगा ⇒ Private operators may not have the expertise to
⇒ Private operators can easily go into partnership deal with military equipment;
with Original Equipment Manufacturer (OEM) ⇒ Private companies interested in bidding mostly
for service, repair and spare parts. आसानी से पुज� for workshops/Depots that handle Combat
का इं तजाम कर सकता है Tanks because they can easily charge Rs 8-9
crore for tanks’ repair/services/spareparts every
⇒ Private firms will not have to invest in land,
time. Whereas not much profit in
infrastructure, machinery. Because
clothing/kitchen utensils/cooking stove related
Government already built that. �नजी �ेत्र के

😍😍Benefits? फायदे 😪😪Challenges? चुनौ�तयां
�खलाड़ी का जमीन मशीनरी इ�ािद म� �नवेश का पैसा बच work. �नजी �खलािड़ओ को �सफर् ट�क क� फै ��ी म�
जाएगा िदलच�ी है �ोंिक वहां पर मुनाफे के अवसर �ादा है
⇒ Strategic / Security challenges: what if private
player sells the tank/radar blueprints to
Pakistan/China? साम�रक चुनो�तया: दु�न देश को सेना
क� गु� जानकारी बेच दी तो ?
59.2 💰💰💰💰 INFRA FINANCE → NATIONAL INFRASTRUCTURE PIPELINE (NIP)
⇒ 15th Aug, 2019: PM Modi announced Rs.100 lakh crore would be invested on infrastructure over the next
five years.
⇒ 2019-Sept: Finance Ministry set up a task force under the Secretary of Dept of Economic Affairs (DEA).
Based on its report,
⇒ 2019-Dec: FM Nirmala S. announced NIP (रा��ीय अवसं रचना पाइपलाइन). It aims to mobilize 102 lakh crore
worth infrastructure investment in the next five year (2019-20 to 2024-25).
⇒ This funding will be spread across Energy (24%), Roads (19%), Urban (16%), Railways (13%), Irrigation
(7%) etc.
⇒ 2020-Apr: Investment target has been ⏫ from ₹ 102 lakh cr to 111 lakh cr
Further, the Government will also initiate following reforms:
59.2.1 💰💰💰💰 NIP → Infra Finance Reforms → Financial Market Reforms

1) Government and SEBI will undertake technical reforms to strengthen municipal bond market, and
NBFCs such as
a) infrastructure investment trusts (InvITs),
b) Infrastructure Development Funds (IDFs),
2) Stringent monitoring to prevent ILFS-NBFC type crisis in future.
3) FDI, FPI investment norms will be relaxed.
59.2.2 💰💰💰💰 NIP → Infra Finance Reforms → Credit Enhancement Fund (CEF)
⇒ Pension and insurance companies usually avoid investing in bonds lower than ‘AA’ rating, due to strict
regulatory norms by PFRDA and IRDAI respectively.
⇒ So Government will ask them to relax the investment norms for infrastructure projects.
⇒ Many of indian infrastructure companies / projects have poor bond-rating. So, Government will setup a
Credit Enhancement Fund (CEF: ऋण सं वधर्न �न�ध), which will basically provide guarantee to such projects’
lenders → bond rating upgraded → more investors attracted.

59.2.3 💰💰💰💰 NIP → Others reforms
1. Monetization of land assets owned by Govt. (सरकारी भू�म को बेचना/िकराये पर देना)
2. Market based pricing mechanisms (बाजार आधा�रत मू� �नधार्रण तं त्र) to increase user fees on infrastructure.
(e.g. if electricity price increased by x% then raise metro-train-fares by y%)
3. Technical guidelines for uniform quality, disaster resilient roads, buildings, etc. (e.g. x% cement with y%
sand etc.)
4. Training and capacity building for legal and financial experts so they can frame better type of PPP
contracts → less chances of project delays or disputes or NPA.
5. Legal reforms so PPP contract disputes can be settled through arbitration outside courts. (कोटर् के बाहर ही
म��ता से समाधान/सुलह)
59.3 ✍MOCK QUESTIONS FOR MAINS

1) " India stands to gain a lot from the global 5G revolution." Elaborate (“भारत, वै��क 5 जी क्रां�त से ब�त
कु छ हा�सल करने के �लए प�रप� है।” �व�ृत �ा�ा कर� | )
2) “Construction of toilets is only “one part” of the solution for a clean India.” Elaborate. ("शौचालय
�नमार्ण, �� भारत के �लए समाधान का के वल एक ही िह�ा है।" �व�ृत �ा�ा कर� |)
3) “Aggregation of public data holds a variety of applications for good governance.” Substantiate
with examples.("सावर्ज�नक डाटा का सम�यन- सुशासन के �लए कई प्रकार क� उपयो�गता रखता है।" सउदाहरण अपने कथन
क� पु�� कर� | )
4) “Public data is as important for good governance as national highways are for economic
growth.” Discuss. ("सावर्ज�नक डाटा सुशासन के �लए उतना ही मह�पूणर् है �जतना िक रा��ीय राजमागर् आ�थक �वकास के
�लए है ।" चचार् कर�।)
5) Identify the prospects and constraints in adoption of electric vehicles in India and provide suggestions in
this regard. भारत म� �बजली द्वारा चलने वाले वाहनों को अपनाने म� आकषर्ण और चुनौ�तयां. तथा इस अनुसंधान म� सुझाव दी�जए
6) What are the challenges in infrastructure projects’ finance and execution in India? How will National
Infrastructure Pipeline help in this regard? भारत म� बु�नयादी ढांचा प�रयोजनाओं के �व� और �न�ादन म� �ा चुनौ�तयाँ ह�? इस
सं बं ध म� नेशनल इ�फ्रा��र पाइपलाइन कै से मदद करेगी?



PILLAR#6- HRD: HEALTH, HUNGER, EDUCATION, SKILL, POVERTY, WEAKER SECTION, SDG
Table of Contents
60 �HRD → Population Census (जनगणना)...................................................................................................... 199
60.1.1 � �Census -2021 ...................................................................................................................... 199
60.1.2 � �Demographic Indicators → Sample Registration System (SRS).................................. 200
60.1.3 � � �: � World Population Prospects 2019 (Released in 2019-Jul) .............................. 200
60.1.4 � � �: � State of World Population Report ..................................................................... 200
60.1.5 � Census-2011: migration (�ाना�रण)....................................................................................... 201
60.2 � � ES19: Indian Demography @2040- Policy suggestions ........................................................... 201
60.2.1 �< � �Demographic Changes (जनसां��क� प�रवतर्न) and Education .................................... 201
60.2.2 �< � �Demographic Changes and Working-Age Population (कायर्शील आयु क� जनसं �ा) .. 201
60.2.3 �< � �Demographic Changes and Health Care Facilities (�ा� सु�वधा) .......................... 202
60.2.4 �< � � Demographic Changes and: Retirement Age (�नवृ�� आयु) ..................................... 202
61 � HRD → Health (�ा�) ............................................................................................................................ 203
61.1.1 � � � [YEARBOOK] Ministry of Science and Technology............................................. 203
61.1.2 � � � [YEARBOOK] Ministry of Health And Family Welfare ........................................ 203
61.1.3 � � � World Health Organization (WHO: �व� �ा� सं गठन) ............................................. 204
61.1.4 � � �[YEARBOOK] Ayush Ministry ................................................................................. 205
61.1.5 � �: � → National Policy for Rare Diseases-2020............................................................ 206
61.2 � � � → Cheap Medicine → NPPA Price control ..................................................................... 206
� � � → Ayushman Bharat & PMJAY ₹ 5 lakh insurance ...................................................................... 207
61.2.1 �Health Cess to build hospitals ................................................................................................ 207
61.3 � �: � � � Atma-Nirbhar Bharat → Medicine / Health..................................................... 207
61.3.1 � �: � � �→ National Digital Health Mission (15th Aug, 2020)................................. 207
(Batch: Win20CSP) Mrunal’s Economy Pillar#6 HRD: Census, Health, Hunger, Education, Skill Updates → Page 195
61.3.2 � � �Health → E-Sanjeevani telemedicine ........................................................................ 208
61.3.3 � � �Health → iGOT ........................................................................................................... 208
61.3.4 � �: � � �: Corona → Health Apps / Portal overdoze ................................................. 208
61.3.5 � � � NITI’s “Healthy States, Progressive India” Report 2019 (released 2019-Jul) ..... 208
61.3.6 � � �National Health Profile 2019 (Released in 2019-Oct) ............................................. 208
61.4 � HRD → Health → Hunger, Malnutrition, Food Security ............................................................. 209
61.4.1 � � �: � → Hunger → NFSA → One Nation One Ration Card .................................... 209
61.4.2 � � � Hunger → Food distribution reforms taken by Govt............................................... 209
61.4.3 � � � Hunger → NFSA → ES20 says ⏬number of beneficiaries ................................... 210
61.4.4 � � � � Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY)- free grains in
�
Corona 210
61.4.5 � � � � � Corona: other initiatives for cooking / hunger?............................................ 210
61.4.6 � � → Global Hunger Index (GHI: वै��क भूख/�ुधा सूचकांक) ..................................................... 210
62 � � � Education: Updates after 2019’s Prelim course ................................................................... 212

62.1 New education policy 2020 (नई �श�ा नी�त)............................................................................................. 212
62.1.1 T � NEP-2020: Introduction .............................................................................................................. 212
62.1.2 �Education: Schooling → Curriculum changed (�ू ली पाठ्यक्रम म� बदलाव) ............................... 213
62.1.3 �Education: Primary- other reforms........................................................................................ 213
62.1.4 �Education: Primary- ECCE upto age 8 .................................................................................. 214
62.1.5 �Education: Language / Medium (भाषा /मा�म) ....................................................................... 214
62.1.6 �Education: Higher (उ� �श�ा) .................................................................................................. 215
62.1.7 �Education: Higher → Credit (गुण आधा�रत �श�ा) ..................................................................... 215
62.1.8 �Education: Higher → Entry & Exit (प्रवेश और प्र�ान) ............................................................. 215
62.1.9 � �Education: Higher → New Orgs → HECI ..................................................................... 215
62.1.10 � �Education: Higher → New Orgs → Others ............................................................... 216
62.1.11 � � �Education: Adult/PH (प्रौढ़ �श�ा और �वकलांग �श�ा) .................................................. 216
62.1.12 �Education: Open/Distance/E-Learning (दू र - �श�ण/ई �श�ा)............................................. 217
62.1.13 � �Assessment of students (छात्रों का मू�ांकन) ..................................................................... 217
62.1.14 � �Assessment of students: bodies (मू�ांकन/परी�ा के �लए सं �ाएं ) ........................................ 217
62.1.15 � �Assessment of schools (�ू लों का आकलन) ....................................................................... 218
62.1.16 �Teachers recruitment and training (�श�कों क� भत� और तालीम)........................................... 218
62.1.17 �NEP-2020: Funding (�व�पोषण) ........................................................................................... 218
62.1.18 �NEP-2020: Criticism (आलोचना/�नंदा) .................................................................................. 218

62.1.19 T � NEP-2020: Conclusion ............................................................................................................ 219
62.2 � �PRAGYATA Guidelines on Digital Education (2020-Jul) ..................................................... 219
62.2.1 � � � �CBSE: Syllabus reduction (पाठ्यक्रम म� कटौती)......................................................... 220
62.3 Edu ( � �) → Rankings for School Education ................................................................................ 220

62.3.1 Annual Status of Education Report ASER Report by NGO Pratham ....................................... 220
62.4 � � � � Edu → Portals/Apps/Orgs → Post-Corona ............................................................. 220
62.5 � � Edu → Misc. portals / initiatives (Before Corona)................................................................ 221
62.5.1 � � Edu → Misc: School infra/result monitoring ............................................................... 221
62.5.2 � � Edu → Misc: E-learning ................................................................................................. 221
62.5.3 � � Edu → Misc: Anti-ragging / life values ......................................................................... 222
62.5.4 � � Edu → Misc: Startup ke liye ........................................................................................... 222
62.5.5 � � Edu → Misc: Teachers’ training .................................................................................... 222
62.5.6 � � Edu → Misc: NRI/foreign teachers/students ko bring to India?................................ 222
62.5.7 � � Edu → Misc: Girl students / girl scientists.................................................................... 223
62.5.8 � � Edu → Misc: Making science/research useful/popular ............................................... 223
62.5.9 � � Edu → Misc: National Unity.......................................................................................... 223
62.5.10 � � Edu → Misc: Civic duties, Adult Edu ....................................................................... 224
62.6 � � Conclusion-Template-Education: .......................................................................................... 224
63 � � HRD → Skilling, Vocational Training, Recruitment...................................................................... 225
63.1 � Yearbook Recruitment & Training Related Ministries ................................................................ 225
63.1.1 � Ministry of Personnel, Public Grievances & Pensions ........................................................ 225
63.1.2 � � � Mission Karmayogi: Training of Civil servants (2020-Sept)............................... 226
63.1.3 � [YEARBOOK] Ministry of Labour and Employment ......................................................... 226
63.1.4 �[YEARBOOK] Ministry of Skill Development & Entrepreneurship .................................. 226
63.1.5 � � �( � �)Skilling → Post Corona / Atma-Nirbhar ................................................. 226
63.2 ( � �) � Conclusion-Template-Skill ............................................................................................. 227
64 � � HRD → Poverty (गरीबी) ...................................................................................................................... 228
64.1.1 � � �Vicious Circle of Poverty (गरीबी का दुष्चक्र/�वषचक्र) ....................................................... 228
64.1.2 � �Economics Nobel 2019 for Global Poverty Alleviation ................................................. 228
64.2 � � � Poverty → Measurement / Estimation (गरीबी का �नधार्रण)................................................... 229
64.2.1 � � � Videshi methods → Inequality (असमानता ) .............................................................. 229
64.3 � �: � � Poverty Removal → MGNREGA (2005) .................................................................. 229
64.3.1 �MGNREGA: Use of JAM-DBT .............................................................................................. 230
64.3.2 �MGNREGA: Use of Space technology (अंत�र� प्रौद्यो�गक� का उपयोग) ........................................ 230
64.3.3 �MGNREGA: Use of Apps ....................................................................................................... 231
64.3.4 � � MGNREGA: Future suggestion by ES19? (अ� सुझाव दी�जए) ........................................... 231
64.3.5 ( � �: � � �)Atma-Nirbhar → Prime Minister Garib Kalyan Rojgar Abhiyaan

�
(GKRA) 231
65 �✝HRD → Weaker Section → Minorities, SC/ST........................................................................... 232
65.1 �✝ Minorities (अ�सं �क समुदाय) ..................................................................................................... 232
65.1.1 �✝: � Minorities → DATA/Index/Report: Religious freedom (धा�मक �तं त्रता) .............. 232
65.1.2 �✝: � � → Pilgrim → Hajj → Subsidy ......................................................................... 232
65.1.3 �✝: � � → Pilgrim → Hajj → Mehram ........................................................................ 232

65.2 HRD → Weaker Section → Scheduled Tribes (ST) ........................................................................... 232
65.2.1 � � ST → Central Tribal University...................................................................................... 233

65.3 Weaker Section → SC, OBC, EWS, PH................................................................................................ 233
65.3.1 �[YEARBOOK] Ministry of Social Justice And Empowerment ........................................... 233
65.3.2 � [Yearbook] Ministry of Law and Justice (�व�ध और �ाय मं त्रालय) ............................................. 233
65.4 Weaker Section → OBC & EWS ........................................................................................................... 234
65.4.1 Weaker Section → OBC Sub-categorization (ओबीसी उप-वग�करण) commission ........................ 234
65.4.2 Weaker Section → EWS Reservation.......................................................................................... 235
66 � HRD → Weaker Section → Women & Children ................................................................................. 236

66.1 women empowerment constitution and legal angles .......................................................................... 236
66.2 � � Report → WEF → Global Gender Gap Report ...................................................................... 236
66.2.1 � � Report → OECD’s SIGI Report, 2019 ............................................................................ 236
66.2.2 � � Gender Indices → Gender Social Norms Index (GSNI).............................................. 236
66.2.3 �: � � � � Atama-Nirbhar: PM GARIB KALYAN → Women will benefit, how? 237
66.3 � � �Weaker Section: LGBT (समल��गक और िक�र) ................................................................................ 237
66.3.1 � National Council for Transgender Persons (NCTP: ट�ासं ज�डर ��यों के �लए रा�ी� य प�रषद) ...... 237
67 Human Development & Sustainable Development...................................................................................... 239
67.1 � � UNDP’s Human Development Report (मानव �वकास �रपोटर्) ....................................................... 239
67.2 � Human development → Misc. Indicators.................................................................................... 240
68 � Sustainable Development Goals (SDG) .................................................................................................. 241
68.1.1 � � � � [Yearbook] Ministry of Environment, Forest and Climate Change ................ 241
68.1.2 � � � [Yearbook] Ministry of Earth Sciences (पृ�ी �व�ान मं त्रालय)........................................ 241
68.2 � � �ES20 on SDG & Environment ............................................................................................. 242
68.3 � � � SDG → India’s Implementation / Monitoring .............................................................. 242
68.3.1 � � � NITI’s SDG India Index (2018): overall scoring ................................................... 243
68.3.2 � � NITI’s VNR Review to UN .............................................................................................. 243
68.4 � SDG Goals vs India’s Notable Schemes......................................................................................... 243
68.5 T � � Mains Answer Writing: Mock Questions..................................................................................... 244

60 👫👫HRD → POPULATION CENSUS (जनगणना)

- 1872: Mayo conducted Census for the first time in India, but not first time in World
- 1881: Ripon started census every decade.
- Constitution → Union List Entry 69 → Census Act 1948: Home Ministry → Registrar General and
Census Commissioner → At district level under respective DM (IAS).
- Post Independence, Census conducted every 10 years. 2011= 7th Census of Free India.
60.1.1 🕵🕵🕵🔢🔢Census -2021

⇒ 2019-Dec: Union Cabinet allotted Rs. ~8700+crores for conducting Census of India 2021
⇒ Following details will be captured: Housing Condition; Amenities & Assets, Demography, Religion, SC &
ST, Language, Literacy, Economic Activity, Migration & Fertility.
⇒ For the first time, Mobile app will be used for data collection.
⇒ Census-2021 will be conducted in two phases:
o 1) Population Enumeration: 9th February to 28th February 2021.
o 2) House listing and Housing Census: April to September 2020.
 In this phase, parallely, National Population Register (NPR: रा��ीय जनसं �ा र�ज�र) will also
be updated for entire India except Assam. NPR exercise done under Citizenship Act,
1955)
Homework- NPR/Citizenship Amendment Act (CAA) from POLITY courses/material
60.1.2 👫👫👫👫Demographic Indicators → Sample Registration System (SRS)

⇒ Home Ministry → Registrar General of India → नमूना पं जीकरण प्रणाली
⇒ Annual demographic survey for birth/death etc indicators started in the last 1960s.
⇒ 2020-May = data for 2018 released.
⇒ birth rate - 20 per 1000 population. Death rate - 6.2 per 1000 population. Infant Mortality Rates - 32 per
1000 births
⇒ �As such poor cost benefit chasing 'best / worst States & UT'. In all such surveys,
o Usually Bihar / Madhya Pradesh / Chhattisgarh / Andaman will be worst part
o Usually Kerala (State), Delhi (UT) etc will be in the better part.
60.1.3 👫👫↗�:📊📊 World Population Prospects 2019 (Released in 2019-Jul)

Published by United Nations department of economic and social affairs.
2019 Population in billions % of world population

India 1.37 18%
China 1.43 19%
In the next eight years (2027), India's population will pass China's. Then India will remain the most populous
country in the world for the entire century. 2027 के बाद भारत पूरी शता�ी के �लए दु�नया म� सबसे अ�धक आबादी वाला देश
60.1.4 👫👫↗�:📊📊 State of World Population Report
- By United Nations Population Fund (UNFPA)- United Nations sexual and reproductive health agency
HQ: New York.
- Theme of 2019’s: Unfinished business- pursuit of rights and choices (अधूरा काम: अ�धकारों और �वक�ों क� खोज)
- Theme of 2020’s report: ‘Against my will: defying the practices that harm women and girls and
undermine equality’. (मेरी इ�ा के �व�द्ध: मिहलाओं और लड़िकयों को नुकसान/ कमजोर करने वाली प्रथाओं को चुनौती देना)
- Highlighted the problems of sex-selective abortion, neglect of girl child = 46 million Indian girls are either
not allowed to be born or died before age of 5 due to neglect. (2013-17). भ्रूणह�ा तथा नवजात ब�ीओ क� उपे�ा के
चलते 46 million लड़िकया भारत क� आबादी से गायब है
- Early marriage = obstacle to education, income and safety of women in India.
- 2010-19: India’s population grew at 1.2% per year= more than double speed of China
�❓ What was the theme of the annual report published by the United Nations Population Fund
(UNFPA) on State of World Population – 2019. (UPSC-CAPF-2019)?
a) Worlds apart : Reproductive health and rights in an age of inequality

b) The power of choice : Reproductive rights and the demographic transition.
c) Unfinished business – the pursuit of rights and choices for all
d) How our future depends on a girl at this decisive age
60.1.5 📊📊 Census-2011: migration (�ाना�रण)

- Migrant = person settled in a place different from his previous residence.
- 37% of Indian are internal migrants. Among them, majority are female (70%)
- Main reason for migration:
- Female: marriage (70%)
- Male: work & employment (28%)> moved with household > moved after birth.
�❓According to the Census 2011, in India, what is the % of people (approximately) considered to be
migrants (internal),i.e. now settled in a place different from their previous residence? (UPSC-CDS-i-2020)
(a) 25% (b) 35% (c) 45% (d) 55%
�❓ Which one of the following is the biggest cause of migration of females in India? (UPSC-CDS-i-2020)
(a) Employment (b) Education (c) Marriage (d) Business
60.2 📔📔📔📔 ES19: INDIAN DEMOGRAPHY @2040- POLICY SUGGESTIONS

ES19 projected that by 2031: National TFR will fall below the replacement level (i.e. TFA < 2.1), because of:
1. continued urbanization.
2. improvements in health care → decline in infant mortality → mothers will not produce second / third
child to offset the loss of the first child.
3. increase in female education → family planning, birth control, postponement of marriage
4. other socio-economic drivers.
शहरीकरण, अ�� चिक�ा, मिहला �श�ा और दू सरे सामा�जक-आ�थक कारकों के चलते कु ल प्रजनन दर प्र�त-�ापन दर पर प�ँ च जाएगा।
This demographic transition will have the following implications for the policymakers:
60.2.1 �<��Demographic Changes (जनसां��क� प�रवतर्न) and Education

⇒ Proportion of elementary school-going children, i.e. 5-14 age group, will witness significant �.
⇒ Himachal Pradesh, Uttarakhand, Andhra Pradesh and Madhya Pradesh have more than 40% of
elementary schools with fewer than 50 students enrolled. It’ll be better to consolidate/merge such schools
located within 1-3 kms radius of each other. ब�ों क� सं �ा म� कमी �जसके चलते �ू लों को बं ध/�वलीन करना होगा।
⇒ Japan, China, South Korea, Singapore and Canada, already doing the same. We should focus on quality
and efficiency of education rather than quantity of schools. �ू लों क� सं �ा नहीं गुणव�ा को बढ़ाओ
60.2.2 �<��Demographic Changes and Working-Age Population (कायर्शील आयु क� जनसं �ा)
⇒ India’s demographic dividend will peak around 2041, when the share of working-age population (20-59
years) will be 59%. Then it will begin to �.2041 के बाद बुजगु � क� सं �ा बढ़ेगी
⇒ So before that time, we will have to create additional jobs to reap the demographic dividend, prevent
social unrest from unemployment. उससे पहेले रोजगार सृजन नहीं िकया तो सामा�जक आक्रोश
⇒ The population of coastal States will begin to age sooner than the interior states. So, migration of workers
will have to encouraged, and we will have to provide them with affordable rental homes. आंत�रक रा�ों से
तटवत� रा�ों म� मजदू रों को लाना होगा, िकराये के मकानों को प्रो�ािहत करे
60.2.3 �<��Demographic Changes and Health Care Facilities (�ा� सु�वधा)

⇒ India already has low per capita availability of hospital beds compared to other emerging and developed
economies.
⇒ Although India's population growth rate is going to slow down, but in absolute terms our population is
going to increase in the next 20 years. So we will have to increase the per capita availability of the hospital
beds. अ�तालों म� खिटया बढ़ाने क� ज�रत
⇒ We also need to increase investments in geriatric health-care, old age homes. वृद्धाश्रमों को बढ़ाना होगा
60.2.4 �<�� Demographic Changes and: Retirement Age (�नवृ�� आयु)
⇒ While the life expectancy will improve but the total fertility rate will decline so, some states will start
transitioning to an ageing society by the 2030s.
⇒ Due to ageing population and increasing pressure on pension funding, Germany, France, Japan & others
have begun raising the pensionable retirement.
� �If India’s � the age of retirement: (सेवा�नवृ�� क� आयु म� बढ़ोतरी करना)
 It’ll help keeping the Government funded pension programs viable. सरकारी प�शन योजनाओ का बोज कम रहे
 Income tax revenues will remain viable (Because salaried person is likely to pay more Income Tax
compared to a retired person who is receiving lower amount of pension.)
 We can benefit from the experience of older people who continue in the job-service.
However, Government should notify this change well at least 10 years in advance, so people can make their
pension/retirement plans accordingly.
61 💊💊 HRD → HEALTH (�ा�)
SDG Goal#3: Ensure Healthy Lives & Promote Well-being For All
61.1.1 � 🧬🧬 🔬🔬 [YEARBOOK] Ministry of Science and Technology

(�व�ान और प्रौद्यो�गक� मं त्रालय)
Dept ⇒ Department of Science and Technology (DST)

⇒ Department of Scientific and Industrial Research
⇒ Department of Biotechnology
Subordinate ⇒ Survey of India, The National Survey and Mapping Organisation
⇒ National Atlas and Thematic Mapping Organisation (NATMO)
Statutory ⇒ Under DST: Science & Engineering Research Board, Technology Development Board
Autonomous ⇒ National Innovation Foundation in DST
⇒ Indian Science Cong. Association, KOLKATA, in DST
⇒ National Institute of Immunology, in Biotech Department
⇒ ++Truckload of Science and Research bodies.
PSU ⇒ Bharat Immunological & Biological Corporation
⇒ Indian Vaccine Corporation Ltd (IVCOL)
⇒ Biotechnology Industry Research Assistance Council (BIRAC)
⇒ (*) Central Electronics Ltd.
NOTE: Dept of Pharmaceutical = Chemical & Fertilizer ministry (Pillar#5)
61.1.2 �💊💊💉💉 [YEARBOOK] Ministry of Health And Family Welfare

�ा� एवं प�रवार क�ाण मं त्रालय consists of <list not exhaustive>
Dept − Dept. of Health and Family Welfare

− Dept. of Health Research
Attached − Directorate General of Health Services
offices o Central Bureau of Health Intelligence (CBHI) → release annual report
‘National Health Profile of India’.
o National Organ and Tissue Transplant Organization
(NOTTO)@Safdarjung Hospital, Delhi
− Central Drugs Standard Control Organization (CDSCO) → Drug Controller
General of India (DCGI) for drug clinical trials & approvals.
− National Health Authority (NHA) to implement PM-JAY ₹5L.
Statutory − Indian Nursing Council → Florence Nightingale award. She was a British reformer
& founder of modern nursing.
− Pharmacy Council, Dental Council: New Delhi
− Medical Council Of India: Accused of corruption & mismanagement in granting
permission to new medical colleges → National Medical Commission (NMC: रा��ीय
�चिक�ा आयोग) Act 2019 replaces this archaic body with a new commission with
powers to control fees in private medical colleges, system of ‘common entrance
exam’, and ‘exit (Licentiate) exam’ to ensure doctor quality etc.
− Indian Red Cross Society
− All India Institute of Medical Sciences (AIIMS), New Delhi
Autonomous − National Population Stabilisation Fund

− All India Institute of Speech and Hearing, Mysore
− International Institute for Population Sciences, Mumbai, a ‘Deemed University’,
nodal for National Family Health Survey (NFHS). 1st NFHS (1992-93), 4th NFHS in
2015-16. 5th NFHS in 2018-19.
− Indian Pharmacopoeia Commission (IPC)
− Indian Council of Medical Research (ICMR, origin in 1911)
− National Institute of Mental Health and Neurosciences (NIMHANS), Bengaluru
Budget − Budget-2020 allotted <₹70,000 cr on health which is barely 0.3% of GDP. if we

�
add union+state budgets = 1.6% of GDP.
− Government aims to ⏫ it to 2.5% of GDP by 2025.
− WHO recommends minimum 5% of GDP be spent on public healthcare
PSU − (*)Hospital Services Consultancy Ltd. (HSCC)
− (*)HLL Lifecare
Intl Bodies − UN Specialized Agency: World Health Organization (WHO) HQ: Geneva,
Switzerland (1948) specialized agency of the United Nations सं यु� रा�� क� �वशेष एज�सी
61.1.3 💊💊🌱🌱� World Health Organization (WHO: �व� �ा� सं गठन)

⇒ At Geneva, Switzerland, 1948.
⇒ Supreme decision-making body: Health Assembly (�ा� सभा)
⇒ It consists of all member states. It elects the Director-General of WHO for a period of five year.
⇒ WHO's Health Assembly's decisions are implemented by the Executive Board (कायर्कारी बोडर्).
⇒ The Executive Board has 34 individual health experts elected for three-year terms.
⇒ 2020-May: India's health minister Dr. Harsh Vardhan elected as the chairman of the Executive Board.
⇒ WHO-Controversy#1? Mishandling of the coron crisis. US President Trump wants to withdraw
membership from WHO. Brazil also threatened similar.
⇒ WHO-Controversy#2? Taiwan wants to be added as an observer in WHO. China hates this because they
want Taiwan to admit, 'Taiwan is a part of China.'
61.1.4 💊💊🌱🌱�[YEARBOOK] Ayush Ministry
- Ministry of Ayurveda, Yoga (Maharshi Patanjali) and Naturopathy, Unani (Arabs. Noted person in India:
Hakim Ajmal Khan freedom fighter), Siddha (by Tamil Siddhar Saints) and Homoeopathy (by a German
Physician), abbreviated as AYUSH
- 2017: Sowa-Rigpa (Tibetan) medicine system is latest to be added in the Ayush list. Govt also planning to
setup a national institute for it in Leh.
Dept N/A
Autonomous − Morarji Desai National Institute of Yoga, Delhi
− National Institutes for individual subjects of AYUSH:
o Ayurveda @Jaipur, Naturopathy @Pune, Unani Medicine @Bangluru,
Siddha @Chennai, Homoeopathy @Kolkata, Sowa Rigpa@ Leh
− Central Councils for research in individual subjects of AYUSH
o Siddha@Chennai, other subjects’ @New Delhi
Statutory Bodies Following bodies regulate the syllabus/practionners:
− Central Council of Homoeopathy(CCH)
− Central Council for Indian Medicine (CCIM). 2018: Govt wants to replace this
body with National Commission for Indian System of Medicine. Common
entrance and exit exam for practitioners etc.
Drugs & Cosmetics Act, 1940- two statutory bodies related to Ayush
1. Ayurveda, Siddha, Unani Drugs Technical Advisory Board (ASUDTAB)
2. Ayurveda, Siddha, Unani Drugs Consultative Committee (ASUDCC),
Attached / − National Medicinal Plant Board (NMPB)
Subordinate − (#)Pharmacopoeia Laboratory of Indian Medicine (PLIM)
− (#)Homoeopathic Pharmacopoeia Laboratory (HPL)
− Pharmacopoeia Commission for Indian Medicine & Homoeopathy (PCIM&H)
PSU − (*) Indian Medicine Pharmaceutical Corporation Ltd.
(#)Ayush Ministry Before 2020 Ayush Ministry from 2020-Jun

1) Autonomous Body- Pharmacopoeia ⇒ These 3 are merged together and made a "Subordinate
Commission for Indian Medicine & Office" named Pharmacopoeia Commission for Indian
Homoeopathy (PCIM&H) Medicine & Homoeopathy (PCIM&H)
2) Subordinate offices#1: Pharmacopoeia ⇒ benefit? operational efficiency.
Laboratory for Indian Medicine (PLIM)
3) Subordinate offices#2: Homoeopathic प�रचालन-सं बं धी �मता म� बढ़ोतरी होगी
Pharmacopoeia Laboratory (HPL)
61.1.5 💊💊 📜📜:🧔🧔 → National Policy for Rare Diseases-2020

⇒ �वरल/असाधारण रोगों के �लए रा��ीय नी�त-2020 replaced 2017’s policy.
⇒ Upto ₹15 lakh financial support through Rashtriya Arogya Nidhi.
⇒ Govt will also encourage donation / crowdfunding.
⇒ Indian Council of Medical Research (ICMR) to create a database of rare diseases like Haemophilia,
Thalassemia, Sickle cell anaemia, Lysosomal storage disorders etc.
61.2 💊💊🤑🤑🕵🕵🕵→ CHEAP MEDICINE → NPPA PRICE CONTROL
- 1997: National Pharmaceutical Pricing Authority (NPPA: रा��ीय औष�ध मू� �नधार्रण प्रा�धकरण) setup as an
attached office under Department of Pharmaceuticals under Ministry of Chemicals & Fertilizers.
- NPPA derives power from Essential Commodities Act, 1955 → Drugs Prices Control Order (DPCO),
1995 & 2013. → NPPA monitors availability & prices of drugs. It enforces price ceilings on 800+
essential medicines.
- � Pharma Sahi Daam: NPPA’s app & portal. Customer can check drug prices before buying.
- � Pharma Jan Samadhan: NPPA’s webportal where consumers can file complaint about drug pricing
and availability.
- A coronary stent is a tube-shaped device placed in the arteries that supplies blood to heart. Stent keeps
the arteries open for coronary heart patients. 2017: NPPA enforced price ceilings on Stent to stop
profiteering by the companies and hospitals. In later years, NPPA slightly increased the Stent price
considering the increased cost of production.
- 2019-Dec: NPPA allowed companies to raise prices of some medicines like BCG vaccine, Choloroquine,
Dapsone, Metronidazole, Ascorbic Acid (=Vitamin C tablets). etc. because pharma-companies were
reporting losses due to low pricing.
- � �ES20 vol1ch4: NPPA drug price control has harmed more than it has helped. Its logical argument
is similar to what we learned in Pillar#4A: food inflation → Essential Commodities Act. Here, NPPA
price control → companies discouraged to produce more / innovate more → shortage of medicine
supply → chemist (illegally) demand more prices from patients.
💊💊📯📯📯📯 → AYUSHMAN BHARAT & PMJAY ₹ 5 LAKH INSURANCE
Budget 2018: Ayushman Bharat National Health Protection Mission (AB-NHPM). Core Scheme: NOT 100%
funded by Union. It has two components:
1. Primary Health Care Centers (PHC) to be transformed into Health & Wellness Centres (�ा� और क�ाण
क� द्र). Free drugs, checkup, mother-child care etc.
2. National Health Protection Scheme (AB-NHPS) → Later renamed ‘Pradhan Mantri Jan Arogya Yojana
(PMJAY)’ to give free Health Insurance of ₹ 5 lakh per poor family, per year. (More in �Pillar#1D)
61.2.1 🍋🍋Health Cess to build hospitals

⇒ �Budget-2020: Introduced 5% Health Cess (�ा� उपकर) on the customs duty on imported medical
devices (आया�तत �चिक�ा उपकरण).
⇒ This Cess ₹₹ will be used for building (Ayushman Bharat ) hospitals in PPP mode,
⇒ In Aspirational Districts (आकांशी-�जले=backward districts identified by NITI Aayog.)
⇒ So the PM-JAY patients in those backward district, can actually get medical treatment.
61.3 👻👻👻👻: 💊💊📯📯📯📯 ATMA-NIRBHAR BHARAT → MEDICINE / HEALTH
Homework: Corona science tech / vaccination angles
61.3.1 👻👻👻👻: 💊💊📯📯📯📯→ National Digital Health Mission (15th Aug, 2020)
⇒ 2020-15th August speech. PM announced रा��ीय िड�जटल �ा� �मशन
⇒ Who? Health Ministry → National Health Authority (NHA) (Recall PM-JAY walli organization from
Pillar1D. This is same NHA)
⇒ Citizens to be given Unique Health ID (UHID) with personal records about diseases, diagnosis, report,
medication etc. (रोग, �नदान, �रपोटर्, दवा आिद)
⇒ UHID will be free of cost, voluntary, consent-based with opt-out feature. (�न: शु�, �ै��क और सहम�त-
आधा�रत. मरीज अपना डेटा हटवा/िडलीट भी करवा सकते ह� ).
⇒ Patients can share it with verified doctors = saves time/trouble of keeping multiple files/xerox/X-rays etc.
⇒ NDHM also has digi-doctor, tele-medicine, e-pharmacy. (िडजी-�चिक�क , दू रभाष-दवाइया, ई-औषधालय)
Conclusion? NDHM will help providing access to inclusive, affordable, and safe healthcare to the people
�
of India. This will greatly help in SDG goals.... रा�ी� य िड�जटल �ा� �मशन भारत के लोगों के �लए समावेशी, स�ी और सुर��त
�ा� सेवा प�ँ चाने म� मदद करेगा. सतत �वकास ल�ों क� प्रा�� के �लए उपयोगी
61.3.2 👻👻👻👻👻👻Health → E-Sanjeevani telemedicine
⇒ Ministry of Electronics and Information Technology (MeitY) → Centre for Development of Advanced
Computing (C-DAC, Mohali centre) → e-Sanjeevani Tele-Consultation Services (टेली/दू रसं चार से �चिक�ा
परामशर् सेवाएँ ).
⇒ It provides Patient registration, Audio-Video Consultation with a Doctor, ePrescription.
61.3.3 👻👻👻👻👻👻Health → iGOT

⇒ HRD Ministry’s ‘Digital Infrastructure Knowledge Sharing’ (DIKSHA) platform For education and
training → inside DISHA, they developed a new portal ‘Integrated Government Online training’ (iGOT)
portal.
⇒ iGOT provides Training modules for Doctors, Nurses, Paramedics, Hygiene Workers, Policemen, civil
servants@Union & State, National Cadet Corps (NCC), and other volunteers for Corona crisis=
⏫capacity building. �मता �नमार्ण
61.3.4 👻👻👻👻: 💊💊💊💊💊💊: Corona → Health Apps / Portal overdoze

�
� Department of Consumer Affairs monitors health-safety guidelines @retail stores,
Suraksha Store with help of tech-startups Safejob and Seekify. These tech-startups provide online
initiative training to kirana shop owners about Corona safety guidelines.
�
� ⇒ uses Bluetooth technology and GPS location data to track people infected with
Aarogya Setu Corona / came in close contact with infected patients.
2020-April ⇒ Developed by National Informatics Centre (NIC, under MEITY) with help of
NITI Aayog & private sector IT experts.
⇒ �Controversy? Privacy / hacking / misuse of data. (नाग�रकों क� �नजता पर खतरा)
� � Ministry of Science & Technology → CSIR → AarogyaPath Supply Chain Portal
AarogyaPath gives info about real-time availability of masks, PPE (Personal Protective Equipment),
2020 medicines and other critical healthcare supplies for Corona
Niti Aayog and the Department of Biotechnology's Consortium for Affordable &
�Project Card
Rapid Diagnostics (CARD) to ⏫ Indian production of coronavirus testing kits.
Oxford University to how strict a country's Corona lockdown measures were. Marks:
�
�
0 to 100 (100 = strictest). Scoring changes with time. E.g India <20 in January, but 100
Stringency Index
during March-April. िकस देश ने िकतने कठोर तालबं धी के कदम उठाए।
61.3.5 💊💊💉💉📊📊 NITI’s “Healthy States, Progressive India” Report 2019 (released 2019-Jul)
− The ranking is categorized into Larger States, Smaller States and Union Territories (UTs), to ensure
comparison among similar entities. Total 23 indicators are measured.
− In the overall performance, Top-3 are Kerala, Andhra Pradesh, Maharashtra. Bottom-3 are Uttar
Pradesh, Bihar, and Odisha.
Although Tamilnadu State Govt has criticised ranking methodology. Why/HOW? Negative-News-notimp.
61.3.6 💊💊💉💉💉💉National Health Profile 2019 (Released in 2019-Oct)

⇒ Who? Heath Ministry → DG Health Services → Central Bureau of Health Intelligence doing annually.
⇒ Only One Govt Doctor For 10,926 People. (WHO’s recommended doctor-population ratio of 1:1000)
⇒ India’s public expenditure on healthcare barely 1.28% of GDP. (WHO recommends 5%). �ा� सेवाओं पर
सरकारी खचर् ब�त कम हो रहा है
⇒ + other filler stuff: IMR & MMR decreased, life expectancy increased, but anaemia is a huge health
concern as more than 50% of Indian women and children suffer from it.
It’s a 340 pages document, chasing the ascending descending ranks=poor cost:benefit.
61.4 🍴🍴 HRD → HEALTH → HUNGER, MALNUTRITION, FOOD SECURITY
- Hunger is the distress arising from insufficient calorie / food intake. (भूख: भोजन न �मलने पर होने वाली पीड़ा )
- Malnutrition is the deficiency arising from insufficient calories and / or insufficient nutrients in a
person’s diet. (कु पोषण: अपयार्� भोजन / पोषक त�ों के चलते होंने वाला शारी�रक अभाव /सम�ा)
- खाद्य सुर�ा Food security means the availability of nutritious food at stable & affordable prices round the
year for all the people. (��र / िकफायती दामों पर पूरे साल पोषण�म आहार/भोजन �मलना )
- SDG Goal#2 requires India to end hunger & achieve food security.
61.4.1 🍴🍴📯📯📯📯:💳💳 → Hunger → NFSA → One Nation One Ration Card

By 2021-March, Ministry of Consumer Affairs, Food & Public Distribution will…
− Connect all ration cards to a central server
− Give e-Point of Sale (e-PoS) machine to all PDS shops.
− Then a beneficiary of National Food Security Act (NFSA) can buy grain from any shop in the country.
− It will especially help the seasonal migrant workers to avail the benefits both in their home state and
employment state. (प्रवासी मजदू र अपने वतन-रा� और रोजगार के �लए �जस रा� म� अ�ायी �प से गए है उन दोनों रा�ों म� स�ा
अनाज खरीद पाएं ग)े
�IMPDS portal Integrated Management of Public Distribution System (IMPDS) ) to implement

national level portability.
�Annavitran to display the sales data of subsidized foodgrains bought through e-Point of Sale (e-
Portal PoS) devices. राशन क� दुकानों पर स�े अनाज क� �बक्र� के आँकड़े
61.4.2 🍴🍴📯📯📯📯 Hunger → Food distribution reforms taken by Govt

 Global Positioning System (GPS) and Radio-frequency identification (RFID) based real time vehicle
tracking system for trucks used to transport subsidised food grains. It curbs the menace of diversion of
subsidized food grains in black market. (राशन अनाज �वतरण प्रणाली म� जीपीएस का प्रयोग से कालाबाजारी के अवसरमे कमी)
 electronic Point of Sale (ePoS) devices are being installed at Fair Price Shops (FPSs). This helps tracking
the distribution of food in a more systematic manner.
 Aadhaar Number helps removing duplicate / ghost / dead beneficiaries.
 Toll-free helpline.
61.4.3 🍴🍴📯📯📯📯 Hunger → NFSA → 📔📔📔📔ES20 says ⏬number of beneficiaries
⇒ NFSA provides grains at heavily subsidized price to 67% of Indian population. We should reduce the
number of beneficiaries to bottom-20% poorest Indians. (�सफर् एकदम गरीब लोगों को लाभ दो।)
⇒ For ‘relatively less poor’ people, Govt should charge slightly higher prices. (जो कम गरीब है उनहे थोड़ा मं हगा दो)
⇒ We should also explore Conditional Cash Transfer Schemes, wherein poor families are given money to
buy (non-subsidized) foodgrains from the market. This will ⏬ FCI’s procurement and stock keeping
burden. (सशतर् नकदी ह�ांतरण योजनाएं : प�रवार बाजार भावों पर अ� खरीद ले)
61.4.4 👻👻👻👻🍴🍴📯📯📯📯 Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY)- free grains in Corona
⇒ Corona → Atma-Nirbhar → PMGKAY: 80 crore poor people will to get 5 kg [wheat or rice] + 1 kg of
pulses for free every month for the next three months.
⇒ Boss? Ministry of Consumer Affairs, Food & Public Distribution → FCI → releases the foodgrains to
State government. Funding: ₹1.5 lakh crores
⇒ Duration? Phase-1: from April to June 2020. Phase-2: July to November 2020.
61.4.5 👻👻👻👻🍴🍴📯📯📯📯 Corona: other initiatives for cooking / hunger?

 �ATMANI→ PM GaribKalyan → Free monthly LPG cylinder to PM-Ujjwala beneficiaries for next 3
months. (Ref: Pillar#5A: energy)
 �ATMANI→ �If a migrant is not covered under the National Food Security Act (NFSA) or unable
to get food because he does not have a ration card….then, State Government will distribute (5kg grain per
person + 1 kg chana per family) per month x for 2 months. Union will bear its full cost.
 � One Nation One Ration Card to be implemented across India by 2021-March. (At present only 20
States have done it) → Then migrants will be able to get NFSA’s subsidized food at any place, irrespective
of whether his name entered in given State’s ratio card database or not.
61.4.6 🍴🍴🍴🍴 → Global Hunger Index (GHI: वै��क भूख/�ुधा सूचकांक)
Annual reported by Concern Worldwide (Ireland) and Welthungerhilfe (Germany). Previously this report
was prepared by IFPRI (International Food Policy Research Institute).
To compute the GHI, they measure four indicators:
1. Undernourishment: Population whose caloric intake is insufficient

2. Child wasting: low weight for height.
3. Child stunting: low height for age. caused by (chronic) long-term insufficient nutrients
4. Child mortality (0-5 age)
GHI 2018 Index 2019 (Released 2019-Oct)

First rank? 15 nations 17 nations: Bulgaria, Chile, Cube etc.
India’s rank 103/119 102 /117
GHI 2018 Index 2019 (Released 2019-Oct)
India’s GHI 30.3 (lower the score = hunger is declining). However, wasting
32.0
score among children<5age is rising.
Bottommost Central African Republic (CAR) in both years
Report’s Forced Migration &
Challenge Of Hunger & Climate Change
THEME? Hunger
Separately, UNICEF’s State of the World’s Children report for 2019, highlighted that in India, every second
child is affected by some form of malnutrition.
Although NITI Aayog Vice Chairman Rajiv Kumar defends, “International surveys’ methodologies are faulty,
otherwise as per Indian Government’s own surveys like Comprehensive National Nutrition Survey (2016-18)
there has been improvement in India.” (वै��क / आंतररा��ीय सं �ाओ के �गनती करने के तरीकों म� ही गलती है, हम गलत नहीं है)
62 �📯📯📯📯 EDUCATION: UPDATES AFTER 2019’S PRELIM COURSE
(Definition) Education is the process of imparting knowledge in a systematic manner, usually at a school or
university.
Gross Enrolment Ratio (GER: सकल नामांकन दर) = (No. of students enrolled in an age group or std) / (total
population in that group).
1. Presently GER in 6 to 14 age group is ~97.2% means 2.8% children (6-14 age) out of school.
2. �Budget-2020: GER (girls) >> GER (boys) in all 3 levels i.e. elementary, secondary, higher secondary.
Thanks to Beti-Bachao-Beti-Padhao scheme.
62.1 NEW EDUCATION POLICY 2020 (नई �श�ा नी�त)
⇒ 1948-49: University Education Commission

⇒ 1952-53: Secondary Education Commission
⇒ 1964-66: Education Commission under Dr. D.S. Kothari
⇒ 1968: National Policy on Education
⇒ 1976: 42nd Constitutional Amendment: Education put in Concurrent List (समवत� सूची)
⇒ 1986: National Policy on Education (NPE) → modified in 1992.
⇒ 2015-16: T.S.R. Subramaniam Committee for education policy
⇒ 2017-19: Dr. K. Kasturirangan Committee for education policy
62.1.1 ✍NEP-2020: Introduction

(Origin) 2017: HRD ministry had set up Dr. K. Kasturirangan Committee, to replace the education policy of
1986. Based its report, Government announced a new National Education Policy in 2020 with following
salient features: �न��ल�खत मु� �वशेषताओं के साथ)
62.1.2 🏫🏫Education: Schooling → Curriculum changed (�ू ली पाठ्यक्रम म� बदलाव)
International studies have found 3-6 years = crucial for mental development. So, the Government will target it
through three years of Anganwadi/ pre schooling. (मान�सक �वकास के �लए प्री-�ू �लंग मह�पूणर् है ऐसा अंतररा�ी� य सं शोधन म�
पाया गया)
62.1.3 👱👱👱Education: Primary- other reforms

⇒ � Target: 100 % Gross Enrolment Ratio (GER) from pre-school to secondary school education by
2030. (सकल प्रवेश अनुपात)
⇒ National Mission on Foundational Literacy and Numeracy - to ensure by 2025, all children in class 3 are
able to do basic level of reading and maths. (बु�नयादी सा�रता और ग�णत �मता)
⇒ �No rigid separation between academic streams (science vs commerce etc.) शै��णक धाराओं म� भेद नहीं िकया
जाएगा
⇒ No rigid separation curricular and extracurricular activities (अ�ास प्रवृ��यां बनाम पाठ्येतर प्रवृ��यां)
⇒ No rigid separation between vocational and academic streams. (�ावसा�यक और शै��णक धाराएँ )
⇒ �Vocational Education to start from Class 6 with Internships.
⇒ We'll use counselors & social workers with schools e.g. Psychological counselling, sexual harassment,
bullying, depression (मनोवै�ा�नक परामशर्दाता)
⇒ Open / Distance learning for classes 3, 5 and 8 through NIOS. (दू र - �श�ण)
⇒ Collectively, this will help bring 2 crore "out of school" children back into the schooling. (दो करोड़ ब�ों क�
�ू ल-वापसी)
Setup “Bal Bhavans” These will be special daytime boarding schools with art-related,
career-related, and play-related activities.
Setup Samajik Chetna Kendras These will be setup in the Free (Spare) school infrastructure.
(Social Consciousness Centres)
�Artists Colleges and school complex to have Artist(s)-in-Residence. Such
artists will promote traditional arts / Lok Vidya. कलाकारों के �नवास क�
�व�ा
62.1.4 👱👱👱Education: Primary- ECCE upto age 8
⇒ For upto class12 NCERT will develop National Curricular Framework for School Education (NCFSE:
पाठ्यक्रम क� रा�ी� य �परेखा)
⇒ For upto class8 NCERT will develop a National Curricular and Pedagogical Framework for Early
Childhood Care and Education (NCPFECCE or ECCE: बचपन क� परव�रश और �श�ा के �लए रा�ी� य पाठ्यक्रम और �श�ा
शा�)
⇒ Ministries of HRD, Ministry of Women and Child Development (WCD), Ministry of Health and Tribal
Affairs will jointly implement ECCE.
⇒ ECCE will focus on improving the syllabus (Curriculum: पाठ्यक्रम) and teaching methodology (=pedagogy:
�श�ा शा�)
⇒ How exactly? We are NOT here for UGC-NET exam. But basically it involves reducing the pressure of
rote-learning/coaching classes to pass the exams, it improves critical thinking ability and emotional
intelligence, 21st century skills, scientific temper etc. समालोचना�क सोच�मता, भावना�क बु�द्धम�ा, 21 वीं सदी का
कौशल, वै�ा�नक �भाव आिद
⇒ ⏬in Curriculum to Core Concepts. पाठ्यक्रम म� कटौती
62.1.5 🈶🈶Education: Language / Medium (भाषा /मा�म)

⇒ Teaching in mother tongue/ regional language? Yes upto class5 definately And we'll try to continue it
even upto class8 and beyond. (पांचवी क�ा तक मातृभाषा या प्रादे�शक भाषा म� �श�ा)
⇒ Sanskrit medium to be offered at all levels of school and higher education
⇒ @secondary level, we'll also offer foreign languages. (मा��मक �ू लों म� �वदेशी भाषा म� भी)
⇒ Three-language formula i.e. All students will learn 3 languages in their school. At Least two of the
languages must be native Indian. e.g. You may opt for (1) mother tongue: Gujarati/Punjabi/Marathi (2)
Hindi/Sanskrit (3) English / French / Russian etc. (3 भाषाओं का सूत्र है या �सद्धांत)
⇒ No language will be imposed on any student. [This is to calm the apprehension of Southern states that
students will be compulsory required to learn Hindi. कोई भी भाषा �वद्या�थयों पर थोपी नहीं जाएगी]
⇒ New organizations will be setup 1) National Institute for Pali, Persian and Prakrit , 2) Indian Institute of
Translation and Interpretation (IITI: अनुवाद और �नवर्चन).
62.1.6 �Education: Higher (उ� �श�ा)
⇒ � Target: Gross Enrolment Ratio (GER: higher education): 26% (2018) → ⏫ 50% (2035);
⇒ Add 3.5 crore admission seats in higher education. (उ� �श�ा म� प्रवेश सीटों को बढ़ाया जाए)
⇒ Creative combinations of subjects & multi-disciplinary courses to be allowed. e.g. philosophy and
architecture, Earth Science and architecture. (अलग-अलग �वषयों का रचना�क सं योजन)
⇒ At present, most Private colleges are usually affiliated to some universities. Colleges have to follow the
admission process and syllabus defined by the university. In the next 15 years gradually more autonomy
will be given to colleges in this area. (महा�वद्यालयों को अपनी प्रवेश प्रिक्रया और पाठ्यक्रम बनाने म� �ादा �तं त्रता दी जाएगी)
⇒ �Vocational education to be integrated. (�वसा�यक �श�ण को शा�मल िकया जाएगा)
62.1.7 �Education: Higher → Credit (गुण आधा�रत �श�ा)

⇒ In the USA, a student completes a particular course =gets credit. When he accumulates sufficient number
of credits he can get a degree.
⇒ Students can enroll in more courses to earn more credits and finish the college graduation faster. Some
Indian universities too adopted the Credit Based Semester System (CBSS).
⇒ �NEP-2020 policy aims to improve it further by creating an "Academic Bank of Credits" with Transfer
of Credits. If you enroll in multiple courses / Institutions = your credits will be stored digitally so you can
combine them to earn a degree. अकाद�मक ब�क ऑफ क्रेिडट क� �ापना. अलग-अलग कोसर् क� पढ़ाई ख� करने पर गुण िदए
जाएं गे, �जसका िड�जटल सं चय इस ब�क म� होगा. इन गुणों को जोड़कर �वद्याथ� िडग्री हा�सल कर सकता है.
62.1.8 �Education: Higher → Entry & Exit (प्रवेश और प्र�ान)

⇒ IIT: 4 years course = BTech degree. If a student is weak/wants to EXIT after 3 year, IIT will give a
Bachelor of Science (BSc) degree. Such proposal was approved in 2019
⇒ so with similar pattern, in NEP-2020 proposed: multiple entry and exit points with appropriate
certification. उ� �श�ा सं �ान म� प्रवेश के बाद अलग-अलग चरणों पर आप पढ़ाई छोड़ सकते ह� उस िहसाब से आपको प्रमाणपत्र/उपा�ध
�मले
If you Exit @ What you get?
1 year Certificate प्रमाणपत्र
2 years Advanced Diploma उ� िड�ोमा
3 years Bachelor’s Degree �ातक क� उपा�ध
4 years Bachelor’s with Research अनुसंधान के साथ �ातक
62.1.9 �🕵🕵Education: Higher → New Orgs → HECI

�BEFORE �AFTER
⇒ Multiple Regulators in the higher education Higher Education Commission of India(HECI: भारत
sector for example UGC, AICTE, Medical का उ� �श�ा आयोग) will be set up
Council of India (later replaced with National ⇒ as a single umbrella body the for entire higher
education, excluding medical and legal
Medical Commission (NMC), Bar Council of education (Bar council). भारत का उ� �श�ा आयोग-
India etc. जोिक �चिक�ा और वकालत के अलावा सभी उ� �श�ा
⇒ UGC / AICTE officers would demand bribes कायर्क्रमों का �नयं त्रण करेगा
during inspections/ for approving the funds. ⇒ It will do faceless inspection with technology
⇒ Government colleges may not be subjected to =less scope for bribery, similar to Faceless
as strict rules as private sector colleges. assessment in IT dept. (फे सलेस �नरी�ण)
उ� �श�ा पर �नयं त्रण के �लए �व�भ� सं �ाएं थी �जन के अफसर ⇒ It will penalise Higher education Institutions
प्र�� नरी�ण के बहाने �र�तखोरी करते थे. सरकारी कॉलेजों पर (HEIs) For violating the rules. (�नयमों का उ�ं घन
गुणव�ा के �नयं त्रण �नजी कॉलेजों �जतने स� नहीं थे करने वाले उ� �श�ा सं �ानों पर जुमार्ना /दंड)
⇒ Both Public and private higher education
institutions will be governed by the same set of
rules.
HECI to have four independent verticals -
1. National Higher Education Regulatory Council (NHERC) for regulation. �नयं त्रण के �लए एक सं �ा
2. General Education Council (GEC ) for standard setting, मानक बनाने के �लए एक सं �ा
3. Higher Education Grants Council (HEGC) for funding, अनुदान के �लए एक सं �ा
4. National Accreditation Council( NAC) for accreditation. मा�ता के �लए एक सं �ा
✋above fullforms may be IMP4UGC-NET, but not so much for IAS.
62.1.10 ��Education: Higher → New Orgs → Others

�MERU Similar to IITs & IIMs, the Government will set up Multidisciplinary Education and
Research Universities (MERUs: ब�-�वषयक �श�ा एवं सं शोधन के �लए �व��वद्यालय)
�NRF National Research Foundation will be created as the apex body for research in India.
सं शोधन के �लए उ�तम सं �ा
�University we'll expand the definition of university to include more institutions that offer
Definition Research-intensive and Teaching-intensive courses.
�Ministry Ministry of HRD to be renamed as M/o Education
renamed मानव सं साधन �वकास मं त्रालय का नाम बदलकर �श�ा मं त्रालय कर�गे
62.1.11 👨👨👨👴👴👴👴Education: Adult/PH (प्रौढ़ �श�ा और �वकलांग �श�ा)

⇒ � Target: 100% Adult Literacy.
⇒ We'll focus on life-enrichment programs.
⇒ We'll prepare a National Book Promotion Policy to encourage writing, publishing and reading of good
books. (रा��ीय पु�क सं वधर्न नी�त- अ�� िकताब� �लखी जाए प्रका�शत क� जाए पढ़ी जाए )
⇒ We'll prepare a uniform/standard Indian Sign Language (ISL) across the country for students with
hearing impairment. ब�धर छात्रों के �लए भारतीय सांके�तक भाषा.
62.1.12 �Education: Open/Distance/E-Learning (दू र - �श�ण/ई �श�ा)
⇒ We'll provide open learning for classes 3,5 and 8 through NIOS.
⇒ We will encourage more online / distance learning courses using Massive Open Online Courses
(MOOCs) technology.
⇒ E-learning content in Regional Languages. प्रादे�शक भाषाओं म� ई-�श�ण सामग्री
⇒ Divyang (PH) Friendly Education Software. �वकलांगों के �लए शै��णक सॉ�वेयर
�New ⇒ National Educational Technology Forum (NETF)

Org: ⇒ for idea exchange on how to use Technology for improving the learning, exams,
NETF administration of school/colleges.
⇒ रा��ीय शै��क प्रौद्यो�गक� फोरम- �श�ा, परी�ा, �ू ल प्रबं धन म� प्रौद्यो�गक� का बेहतर इ�ेमाल
62.1.13 📊📊📊📊Assessment of students (छात्रों का मू�ांकन)
360 degree Holistic Progress Card to track Student Progress (समग्र �वकास काडर् के साथ मू�ांकन प्रिक्रया)
�BEFORE
� �AFTER
�
Summative Assessment Exams = only at We'll encourage Formative Assessment = During the class-
the end of semester / year checking ask oral questions, give homework assignment etc to check
factual / memory based knowledge. student's analytical/critical thinking, and conceptual clarity.
सत्रांत परी�ाएं �जसम� �सफर् याददा� / रटने का रचना�क आकलन तािक �वद्याथ� क� �व�ेषण और वैचा�रक ��ता को जांच सके
मू�ांकन होता है
BOARD EXAM = test of memory & Board exams will test core concept and 'application of
factual knowledge. High stake exam: life knowledge'. It'll be made 'low-stake' (e.g. school assignments
and death situation if 99% not scored. marks may be counted, more admission opportunities even
with low score etc)
बोडर् क� परी�ा: जुए का ऊंचा और जो�खम भरा दांव �वद्याथ� क� रटने क� �मता नहीं िकंतु वैचा�रक ��ता, �ान के अनुप्रयोग को परखा
�जसम� बाजी �जंदगी और मौत क� लगी हो. जाएगा. बोडर् परी�ा म� अ�े गुण ना �मले तो भी �जदं गी-बबार्द- उस जो�खम को कम
िकया जाएगा।
62.1.14 📊📊�Assessment of students: bodies (मू�ांकन/परी�ा के �लए सं �ाएं )

�new body National Assessment Centre called 'PARAKH' (Performance Assessment, Review, and
Analysis of Knowledge for Holistic Development) for setting assessment standards. परी�ा
म� मू�ांकन कै से करना है उसक� मानक तैयार करने क� सं �ा
�existing National testing agency will continue to function and will offer common entrance exams
body NTA for admission in various college। अलग-अलग कॉलेजों म� दा�खले के �लए सामा� प्रवेश परी�ा
62.1.15 📊📊📊📊Assessment of schools (�ू लों का आकलन)

⇒ States/UTs will set up an independent State School Standards Authority (SSSA: �ू ल मानक के �लए रा� का
प्रा�धकरण).
⇒ These bodies will require schools to disclose information e.g. how many seats/facilities/fees in your
school, how is your school's board exam result etc.
⇒ This will ⏫ public oversight and accountability. �ू लों ने अ�नवायर् �प से अपने �वद्या�थयों क� सं �ा, बोडर् परी�ाओं म�
प�रणाम, फ�स इ�ािद अलग-अलग जानकारी देनी होगी �जससे सावर्ज�नक �नगरानी तथा जवाबदेही बढ़ेगी
⇒ School Quality Assessment & Accreditation Framework (SQAAF)= NOTIMP �ू लों के आकलन के मानक
62.1.16 �Teachers recruitment and training (�श�कों क� भत� और तालीम)
⇒ by 2030: Minimum degree qualification for teachers = 4-year integrated B.Ed. .

⇒ National Council for Teacher Education (NCTE) + NCERT to design as new framework for Teacher
Education (NCFTE: �श�कों क� तालीम/�श�ा के �लए रा�ी� य �परेखा)
⇒ National Council for Teacher Education (NCTE) will design National Professional Standards for
Teachers (NPST: रा��ीय �ावसा�यक मानक)
⇒ Teachers' Recruitment will be made more transparent, merit based promotions, they will be given more
operational freedom in teaching etc. (भत� प्रिक्रया �ादा पारदश�, यो�ता आधा�रत पदो��त, पढ़ाने म� �ादा �तं त्रता)
⇒ A National Mission for mentoring the (College) teachers. With help of senior/retired faculty. (व�र�/�नवृ�
प्रोफे सरों द्वारा वतर्मान �श�कों को गु��श�ा/तालीम दी जाएगी)
✋ Above fullforms / features not greatly imp for UPSC but for UGC-NET/TAT
62.1.17 🤑🤑NEP-2020: Funding (�व�पोषण)

⇒ Union+State's total public investment in education currently about 4.4%= will be raised to 6% of GDP at
earliest. (�श�ा म� सावर्ज�नक �नवेश को बढ़ाकर सकल घरेलू उ�ाद के 6% तक िकया जाएगा)
⇒ We'll expand & reform the National Scholarship Portal to cover more SC, ST, OBC, and other Socially
and Economically Disadvantaged Groups(SEDGs) such as women, transgender, etc. (कमजोर वगर् को छात्रवृ��
देने के �लए �व�भ� सुधार)
⇒ Gender Inclusion Fund to improve education of girl child. (ल��गक समावेशन �न�ध)
⇒ Special Education Zones for disadvantaged regions and groups (�वशेष �श�ा �ेत्र)
⇒ We will encourage private colleges to give scholarship to students
62.1.18 👿👿NEP-2020: Criticism (आलोचना/�नदं ा)

⇒ Not enough clarity about funding mechanism and fees regulation, so, it'll only encourage privatization /
commercialisation of higher education.�श�ा का �नजीकरण
⇒ Not enough focus on girl education, weaker section. क�ा और कमजोर वगर् का �श�ण
⇒ Teachers demand related to permanent jobs, good salaries and suitable work conditions not mentioned.
�ाई नौक�रयां अ�� तन�ाह के बारे म� कोई बात नहीं
⇒ Only lip service about emotional needs of the students, depression and suicide due to excessive
competition. छात्रों क� भावना�क ज�रतों के बारे म� �सफर् िदखावे क� बाते
⇒ Doing Sanskrit promotion for RSS-BJP-Hindutva agenda.
⇒ X/Y/Z Good Recommendation of the previous committee/ best practices from the foreign country are
not adopted. अ� देश और अ� स�म�त क� अ�� बातों को शा�मल नहीं िकया
✋ Mitron such negative things NOT important for scope of exam.
62.1.19 ✍NEP-2020: Conclusion

 SDG goal#4 aims for inclusive, equitable quality education and promote lifelong learning opportunities
for all. समावेशी, समान गुणव�ा वाली �श�ा और सभी के �लए आजीवन सीखने के अवसरों को बढ़ावा देना।
 With aforementioned reforms, NEP-2020 will surely help in a long way to universalize the education,
reap demographic dividend and achieve SDG Goal#4. उ� सुधारों द्वारा नई �श�ा नी�त वाकई म� �श�ा के सावर्�त्रककरण,
जनसां��क�य लाभांश को हा�सल करने और सतत �वकास ल� को हा�सल करने म� मदद करेगी
62.2 �🤳🤳PRAGYATA GUIDELINES ON DIGITAL EDUCATION (2020-JUL)
⇒ By HRD/Edu-Ministry ई �श�ा के बारे म� िदशा�नद�श

⇒ Corona lockdown= 240 million Indian children unable to go to school.
o Synchronous digital education: This is real-time (live) teaching. (जीवं त प्रसारण)
o Asynchronous digital education: non-real time e.g. article, recorded TV program.
⇒ PRAGYATA guidelines = eight steps of e-learning: Plan- Review- Arrange- Guide- Yak(talk)- Assign-
Track- Appreciate.
Class Screentime Recommendation (Synchronous/ Live classes)

Pre Primary not more than 30 minutes.
Classes 1 to 8 Not more than two lectures of 30-45 minutes each
Classes 9 to 12 Not more than four lectures of 30-45 minutes each on the days
⇒ Further individual school-teachers should not be required to teach more than 2 to 3 hrs of online/day
⇒ Do's and Don'ts to ensure physical wellbeing (Back pain, eye strain), Mental health and wellbeing, Cyber
safety, Digital privacy. शारी�रक पीठ ददर्, आंखों का तनाव, मान�सक �ा�, साइबर सुर�ा, िड�जटल गोपनीयता/�नजता।
For more on E-learning, E-Court, E-Diplomacy charms and challenges: https://unacademy.com/class/economy-

pillar1a-money-3-cryptocurrency-intro-to-mains-answer-writing/W0Y024BN
62.2.1 🤧🤧🤧🤧🤧🤧🤧🤧CBSE: Syllabus reduction (पाठ्यक्रम म� कटौती)
⇒ CBSE ⏬ class 9 to 12 syllabus by 30% for 2020-21 Academic year to ⏬ the burden of students
during Corona lockdown
⇒ � Controversy? Federalism, Nationalism, Secularism and other important topics were also
dropped from syllabus. (सं घवाद, रा��वाद, धमर्�नरपे�ता जैसे अ�त मह�पूणर् मुद्दों को अ�ासक्रम से हटाया गया)
⇒ CBSE clarified this is only one time step for 2020-21 only. So in future these topics may be re-
added. (�सफर् एक बार के �लए �लया गया कदम है)
62.3 EDU (📐📐📐📐) → RANKINGS FOR SCHOOL EDUCATION
Figure 1: Fake-spiderman to help students cheat in board exam by climbing walls to deliver ‘chits’.
62.3.1 Annual Status of Education Report ASER Report by NGO Pratham

ASER Report-2018
⇒ ~70% class3 kids cannot read class2 books or do subtraction.
⇒ ~50% class 5 kids can’t read class2 books. ~70% class 5 kids can’t do division..
⇒ ++ data about How many girls are out of school? how many enroll in private schools? etc.
ASER Report-2019 (Released in 2020-Jan)
⇒ 2019’s report focused on the students in the ‘early years (aged 4 to 8) in rural areas’.
⇒ In Class1: only 16% of students can read text. Only 60% can recognize two digit numbers. However, these
figures are slightly better among private school children compared to Government school children.
⇒ Even cognitive skills (सं �ाना�क कौशल) such as sorting images by colour and size, recognising patterns,
identifying human emotion in poster faces etc are less than satisfactory.
⇒ % of girls studying in Government schools >> in private school.
⇒ Parents send even underage students (4-5 years) to sit in class1 (perhaps to get them free meal). But such
underage students can’t be expected to learn class1 subject matter, as their brain is yet to develop.
62.4 👻👻👻👻📐📐🤳🤳 EDU → PORTALS/APPS/ORGS → POST-CORONA

� Abhyas app National Testing Agency (NTA)'s mobile app for IIT-JEE mock tests.
� VidyaDaan 2.0 HRD/Edu Ministry portal To help the educators contribute e-learning content via
(2020-April) DIKSHA portal
� YUKTI 2.0 Young India Combating COVID with Knowledge, Technology and Innovation
(YUKTI) is HRD/Edu Ministry's portal for sharing info about: Research,
Innovation, Technologies, Startup (सं शोधन, नवप�रवतर्न,तकनीक,�ाटर्अप) esp. those
related to Corona
Bharat Padhe
� HRD/Edu Ministry campaign for Crowd sourcing of Ideas for Improving Online
Online (2020-April) Education ecosystem of India
�SAMARTH ⇒ It is an open source Enterprises Resource Planning (ERP) software. उद्यम सं साधन
आयोजन के �लए बना सॉ�वेयर
⇒ Helps keeping track of student attendance, teacher salary, fees collection,
exam score etc. It is developed by the HRD/Edu Ministry
⇒ under the National Mission of Education in Information and
Communication Technology Scheme (NMEICT). =Such microscopic
technical preparation = NOTIMP
�STARS program World Bank project of $500 million to ⏫ school education in six States viz
by World Bank Himachal Pradesh, Kerala, Madhya Pradesh, Maharashtra, Odisha, and Rajasthan.
� GOAL Project Facebook + Tribal Affairs Ministry to skilling and mentorship of ST youth
through online mode
�Global Education by UNESCO. 2020-June
Monitoring (GEM) Corona affected the access to education od 1.5 billion students across the world.
Report Poor suffered the most because of no access to internet.
Plus lots of data but poor cost-benefit in chasing it
�Global Education launched by UNESCO. 2020-May
Coalition To coordinate educational activities during Post-Corona
62.5 📐📐🤳🤳 EDU → MISC. PORTALS / INITIATIVES (BEFORE CORONA)

�As such Following things more imp4 UGCNET/TAT exams. less so for IAS/UPSC. Rarely 1-2 MCQs asked
in past. Just go for basic word-association �
62.5.1 📐📐🤳🤳 Edu → Misc: School infra/result monitoring

Shaala Saarthi ⇒ To collaborate with NGO, Corporates for sharing innovative practices running
portal schools.
Shaala Siddhi ⇒ Help the Schools in their self-evaluation.
portal
UDISE+ ⇒ HRD Ministry’s portal for Unified District Information on School Education
62.5.2 📐📐🤳🤳 Edu → Misc: E-learning

e-Pathshala ⇒ By NCERT to provide textbooks in e-books, audiobooks format.
⇒ HRD Ministry’s free Massive Open Online Courses (MOOCs) portal for school,
college courses. Anyone can join and learn online for free.
⇒ SWAYAM = Study Webs of Active–Learning for Young Aspiring Minds.
SWAYAM Portal
⇒ National Programme on Technology Enhanced Learning (NPTEL) is an initiative
Launched in
by 7 IITs + Indian institute of science (IISC). They’ve launched many free courses
2017
on SWAYAM portal.
⇒ 2019: Version 2.0 launched which offers 1) courses translated in Indian languages
2) online degrees 3) better features etc.
SWAYAM ⇒ HRD Ministry’s project to run 32 DTH channels for education e.g. ‘IITPAL’ TV
PRABHA Channel to assist the class11-12 students prepare for IIT entrance exam.
⇒ Operation Digital Board (ODB): HRD Ministry to create minimum 2 smart
ODB
classes for every Secondary/Senior Secondary schools by 2023.
E-Gyankosh ⇒ massive open online course (MOOC) portal by IGNOU.
62.5.3 📐📐🤳🤳 Edu → Misc: Anti-ragging / life values

⇒ HRD ministry’s (higher education) Student Induction Programme. UGC
Deeksharambh prepared guidelines for it e.g. setting up mentor groups, physical fitness & hobby
2019 groups, interaction with teacher before start of semester etc. so freshers become
comfortable in college.
Jeevan ⇒ UGC designed this Curriculum for Life Skills (Jeevan Kaushal) for Under
Kaushal Graduate to give them Life Skills like communication skill, interpersonal skill,
time management, problem solving ability, decision making capacity, leadership
ability
62.5.4 📐📐🤳🤳 Edu → Misc: Startup ke liye

⇒ National Educational Alliance for Technology (NEAT). HRD Ministry ties up
NEAT
with Edutech companies for personalized learning via Artificial Intelligence (AI)
Smart ⇒ HRD ministry’s annual competition inviting youth to develop hardware /
Hackathon software solutions to address problems faced by Government organizations, PSUs
2017 and even NGOs.
62.5.5 📐📐🤳🤳 Edu → Misc: Teachers’ training

ARPIT initiative ⇒ Annual Refresher Programme in Teaching for online training of college faculty.
EQUIP five year ⇒ HRD Ministry’s five year plan to improve higher education in 2019-2024.
plan
62.5.6 📐📐🤳🤳 Edu → Misc: NRI/foreign teachers/students ko bring to India?

VAJRA Ministry of Science & Technology pays ₹ ₹ to get NRI/Overseas scientist faculties to
� � come & teach in India under VAJRA (Visiting Advanced Joint Research) scheme.
⇒ HRD Ministry’s Global Initiative for Academics Network (GIAN) portal helps
GIAN Network students connect with national & foreign faculty, industrialists for knowledge
sharing.
Study in India − HRD Ministry’s campaign to attract foreign students to study in our higher
(2019) educational institutions.
− Through centralised admission web-portal (studyinindia.gov.in)
− Student awareness seminars, social media campaigns in South-East Asia, Middle
East and Africa.
− 25-100% fee waivers to meritorious foreign students.
− �Budget-2020: If foreign student from Asia / Africa wants scholarship, he’ll
have to pass Indian Scholastic Assessment (IND-SAT) online test.
⇒ Related: e-VidyaBharati and e-AarogyaBharati (e-VBAB) Network: It’s setup by
External Affairs Ministry for health-education info exchange with AFRICAN
Countries.
62.5.7 📐📐🤳🤳 Edu → Misc: Girl students / girl scientists

KIRAN � Ministry of Science & Technology for helping women scientists
⇒ HRD ministry’s ‘UDAAN- Giving Wings to Girls’ scheme gives free coaching to
UDAAN
1000 selected girls so they can pass IIT/technical institutes’ entrance exam.
62.5.8 📐📐🤳🤳 Edu → Misc: Making science/research useful/popular

Unnat Bharat ⇒ HRD ministry gives ₹ ₹ to IIT, NIT etc to carry out research / consultancy for
Abhiyan 2014 rural / local problems.
⇒ ISRO to train 60 talented students from Class 9 to Class 12. ₹₹ by HRD Ministry
DHRUV
(So later some of them could become scientist)
STRIDE Faculty given ₹₹ for research in this Scheme for Trans-disciplinary Research for
India’s Developing Economy (STRIDE)
ECHO Prime Minister’s Principal Scientific Advisor (PSA) → setup EChO Network for
providing leadership training to scientists and researchers.
PMRF Prime Minister Research Fellows by HRD Ministry
Talented B.Tech / M.Tech / M.Sc students from selected institutes given direct Ph.D
admission in the IITs / IISc + monthly stipend.
IMPRINT India IIT and IISc joint initiative to solve major engineering and technology challenges of
India, started in 2015.
IMPRESS Impactful Policy Research in Social Science (IMPRESS). It gives ₹₹ to social science
research.
SPARC Scheme for Promotion of Academic and Research Collaboration (SPARC)
HRD Ministry gives ₹₹ for to Joint Research Projects between top ranked Indian
Institutions and globally ranked Foreign Institutions.
NRF Foundation − While China and USA spend over 2% of their GDP on research, India spends less
(proposed) than 0.7%.
− Presently individual ministries give research grants, which results into lack of
coordination, some sectors receive too much attention, some get neglected. So,
(Full) Budget-2019 announced to setup a National Research Foundation (NRF) to
coordination research funding in India.
Further, Ref: Pillar#4 handout → Smart India Hackathon, and truckload of other schemes for
IPR but beyond a point, poor cost benefit.
62.5.9 📐📐🤳🤳 Edu → Misc: National Unity

⇒ HRD ministry pairs 1 state/UT with another state on yearly basis e.g. Rajasthan :
Ek Bharat
West Bengal. They organize Youth Exchange, sports, singing-dancing, cultural
Shrestha Bharat
programs etc. → More unity in India & less stone pelting.
⇒ Appointment of Language Teachers (ALT) Scheme: HRD Ministry to give ₹₹ for
ALT appointment and training of Hindi teachers in North Eastern States and the Urdu
Teachers in States/UTs.
62.5.10 📐📐🤳🤳 Edu → Misc: Civic duties, Adult Edu

⇒ HRD Ministry Launched on the 70th Constitution day on (26/11/19).
⇒ The portal will be used primarily for holding monthly essay / quiz / poster making
Kartavya Portal
competitions for students for Nagrik Kartavya Paalan Abhiyan- to create mass
awareness about fundamental duties. नाग�रक कतर्� के प्र�त चेतना जागृत करना
Saakshar Bharat ⇒ HRD ministry scheme for achieving min. 80% Adult literacy, & reduce the gap
2009 between male-female adult literacy rates.
62.6 📐📐 ✍ CONCLUSION-TEMPLATE-EDUCATION:
⇒ SDG Goal #4: ensure inclusive and equitable quality education and promote lifelong learning
opportunities for all. OR
⇒ India can’t achieve SDG Goal 1 (Poverty removal) or SDG Goal 5 (Gender Equality) without achieving
SDG Goal 4 (education). OR
⇒ Without education, a person can’t lead productive life in a globalising world OR
⇒ Education improves a society’s health and nutritional status, economic growth, population control,
empowerment of the weaker sections.
Aforementioned schemes / initiatives / challenges are important in that regard / need to be addressed on
priority basis. �श�ा प्रा� िकए �बना भारत ल� 1 (गरीबी हटाने) या ल� 5 (ल��गक समानता) प्रा� कर नहीं सकता है। �श�ा के �बना, कोई
�� वै�ीकरण क� दु�नया म� उ�ादक जीवन वहन नहीं कर सकता । �श�ा, समाज के �ा� और पोषण क� ��त, आ�थक �वकास, जनसं �ा
�नयं त्रण, कमजोर वग� के सश�ीकरण म� सुधार करती है। इस�लए ऊकत कदम प्रशं सनीय / ऊकत चुनौ�तयों से लड़ना ज�री।
63 💇💇💇 HRD → SKILLING, VOCATIONAL TRAINING, RECRUITMENT
Meaning & Significance:

- (Definition) Skill (कौशल) is the special ability to perform a task in a proficient manner. Vocational
training is the method to improve a person’s skill for a given trade e.g. Auto repair, Plumbing, carpentry
or welding
- (Definition) Demographic dividend (जनसां��क�य लाभांश) is economic growth potential when the share of
working-age population (कायर्शील आयु क� जन सं �ा ) becomes larger than the dependent population (आ�श्रत
जनसं �ा: below 15 years & above 65). India >65% population is below 35 age.
- (DATA) Periodic Labour Force Survey (PLFS) 2017-18: less than 14% workforce in 15-59 years has
received formal training. Majority of them learned the work through self-experience, family or on-the-job
training.
- By 2020, average age of Indian population will be 29 years against USA (40 years), EU (46), Jap (47).
During next 20 years, 1st world’s labour force to decline by 4%, while in India it will increase by 32%. So
we’ve to reap our demographic dividend but that requires skill development.
63.1 � YEARBOOK RECRUITMENT & TRAINING RELATED MINISTRIES

63.1.1 � Ministry of Personnel, Public Grievances & Pensions
का�मक, लोक �शकायत और प�शन मं त्रालय
Dept 1. Department of Personnel and Training (DoP&T)
2. Department of Pensions and Pensioners’ Welfare (DPPW). Associated with Jeevan
Pramaan digital life certificate with help of MEITY Ministry. (Ref:Pillar-1D)
3. Department of Administrative Reforms and Public Grievances (DARPG: प्रशास�नक
सुधार और लोक �शकायत):
o celebrates Civil Services Day on 21st April since 2006,
o runs CPGRAMS portal for receiving citizen complaints,
o Good Governance index for States 2019: Tamilnadu>Maharashtra
>Karnataka.
Attached/ ⇒ Lal Bahadur Shastri National Academy of Administration (LBSNAA) for training IAS
Subordinate Probationers.
⇒ Staff Selection Commission (SSC)
⇒ Institute of Secretariat Training and Management (ISTM)
⇒ Public Enterprises Selection Board (PESB)
⇒ Central Bureau of Investigation (CBI) which obtains powers from the Delhi Special
Police Establishment Act (1946)
Constitutional ⇒ UPSC
Statutory ⇒ Read about following in Detail from Laxmikanth:
⇒ Central Administrative Tribunal (CAT) from 1985
⇒ Central Vigilance Commission (CVC) setup in the 60s based on the Santhanam
Committee on Prevention of Corruption, given statutory status in 2003.
⇒ Central Information Commission (CIC) under the Right to Information Act, 2005
⇒ Lokpal act in 2013 → 1st Lokpal Justice Pinaki Chandra Ghose in 2019.
Autonomous National Recruitment Agency (NRA)
⇒ to conduct the Common Eligibility Test (CET) to screen/shortlist candidates for Staff
Selection Commission (SSC), Railway Recruitment Boards (RRBs) and Institute of
Banking Personnel Selection(IBPS).
⇒ Based on the score obtained in the CET, candidates may appear in the domain-
specific tests by SSC, RRBs & IBPS respectively for the actual recruitment.
63.1.2 👮👮 � 🤳🤳 Mission Karmayogi: Training of Civil servants (2020-Sept)
Mission Karmayogi:- National Programme for Civil Services Capacity Building (NPCSCB) To implement this,
Government employees will be trained for new India. Govt will setup….
- 1) Public Human Resources (HR) Council headed by Prime minister

- 2) setup a not-for-profit company Special Purpose Vehicle company for e-training
- 3) � Integrated Government Online Training-iGOT Karmayogi Platform.
✋more details not important, unless Public Administration is your optional subject
63.1.3 � [YEARBOOK] Ministry of Labour and Employment

Given in the full-course handout
63.1.4 �[YEARBOOK] Ministry of Skill Development & Entrepreneurship

63.1.5 👻👻👻👻👻👻(💇💇�)Skilling → Post Corona / Atma-Nirbhar

NMIS ⇒ Home Ministry → National Disaster Management Authority (NDMA) : online
Dashboard - National Migrant Information System (NMIS).
⇒ It can help coordinating the transport/train arrangements for migrants to return back
home. And also for monitoring the spread of COVID-19 virus / contact tracing.
SWADESH ⇒ SWADES (Skilled Workers Arrival Database for Employment Support) is a joint
2020-June initiative by Skill Ministry, Aviation Ministry and External Affairs Ministry
⇒ It's a skill mapping exercise of the returning citizens under the Vande Bharat Mission
(from foreign countries during Corona).
⇒ Returning Workers will fillup online SWADESH Skills card. → Data shared with
companies → Job placement
⇒ �वदेशों से वतन वापस आए भारतीय श्र�मकों का कौशल मान�चत्रण
ASEEM ⇒ Aatamanirbhar Skilled Employee Employer Mapping (ASEEM) portal
2020-Jul
⇒ by Skill Ministry → by National Skill Development Corporation (NSDC) with help of a
Bengaluru startup company "Betterplace".
⇒ To map regional details of workers vs local industry demands.
⇒ This will help the government to analyse the migration patterns and implement the skill
development courses
⇒ श्र�मकों का �ववरण बनाम �ानीय उद्योग म� श्र�मकों क� मांग।
YuWAAH ⇒ UNICEF project for skill development of adolescent and young Indians, labelled
2019-Nov "Generation Unlimited India"
63.2 (💇💇💇)✍ CONCLUSION-TEMPLATE-SKILL
- According to India Skill report 2019 more than 50% of youth with college degrees are unemployable. To
reap the demographic dividend of India, it is therefore necessary to focus on the vocational training and
skill development. OR
- SDG Goal 8 requires India to provide full, productive & decent work/employment for all. A person
without skill remains either unemployed, disguisedly unemployed or underemployed. Aforementioned
schemes / initiatives / challenges are important in that regard / need to be addressed on priority basis.
- भारत के जनसां��क�य लाभांश को प्रा� करने के �लए, �ावसा�यक प्र�श�ण और कौशल �वकास पर �ान देना आव�क है। सतत �वकास ल�
प्रा�� हेतु सभी के �लए पूणर्, उ�ादक और स� रोजगार उपल� कराने क� आव�कता है। �बना कौशल वाला �� या तो बेरोजगार रहता है,
प्र�� प से बेरोजगार रहता है। उ� योजनाएँ / पहल / चुनौ�तयाँ उस सं बंध म� मह�पूणर् ह� / प्राथ�मकता के आधार पर सं बो�धत करने क�
आव�कता है।
64 🤲🤲💸💸 HRD → POVERTY (गरीबी)
Definition: Poverty is the lack of sufficient money to meet the minimum standard of living- including food,
clothing, shelter, health and education. भोजन, कपड़े, आश्रय, �ा� और �श�ा सिहत जीवन के �ूनतम �र को पूरा करने के �लए
पयार्� धन/पैसों क� कमी को गरीबी कहेते है।
64.1.1 🤲🤲🤲🤲🤲🤲Vicious Circle of Poverty (गरीबी का दुष्चक्र/�वषचक्र)
⇒ Poor person doesn’t have enough money to buy good food / education → his productivity remains low
→ he doesn’t have enough money.
⇒ low level of development in Less Developed Countries (LDCs: अ� �वक�सत देश) is also explained through
the vicious circle on supply and demand side:
Supply Side ( आपू�त) Demand Side (माँग)
Poor person has low income → low savings → Low income → low demand by poor families (of
low investment / capital → he can’t start or mobiles, TV, fridge) → low capital investment by
expand business to increase his income → more companies / factories due to lack of customers → less
poverty new jobs → more poverty
64.1.2 🤲🤲🤲🤲Economics Nobel 2019 for Global Poverty Alleviation
⇒ Originally, Nobel Prizes were given for 1) Physics, 2) Chemistry, 3) Physiology or Medicine, 4) Literature,
and 5) Peace. From the fund created by Swedish inventor Alfred Nobel.
⇒ 1968-69: Bank of Sweden started giving “Sveriges Riksbank Prize in Economic Sciences”. So, technically
not a Nobel Prize, but it’s nicknamed as “Nobel for Economics”
⇒ 2018: US Economists Nordhause & Romer for ‘integrating climate change & technological
innovations into long-run macroeconomic analysis’
⇒ 2019: Abhijit Banerjee (born in Mumbai, presently Professor at Massachusetts Institute of Technology,
USA) & his wife Esther Duflo (France) and Michael Kremer (USA) received it for their “experimental
approach to alleviating global poverty." ("वै��क गरीबी को कम करने के �लए प्रयोगा�क ��कोण।")
⇒ They’ll receive 9 million Swedish krona, to be shared equally between the Laureates.
2019’s winner had suggested we should divide poverty issue into smaller & manageable questions such as:
⇒ “How can we improve educational outcomes? → extra classes for the weak students
⇒ ”How can we improve child health?” → increase vaccination→ give foodgrains to parents if they bring
child for vaccination.
64.2 🤲🤲💸💸📏📏 POVERTY → MEASUREMENT / ESTIMATION (गरीबी का �नधार्रण)
64.2.1 🤲🤲💸💸📏📏 Videshi methods → Inequality (असमानता )

Global Wealth − By Credit Suisse, an Investment banking company of Switzerland.
Report 2019 − 2018 report: ‘inequality rising in India. richest 10% of Indians own 77% of the
Released in country’s wealth.’ (In 2017, they owned ~53%)
Oct’19
− 2019 report: India ranks fifth globally in terms of the ultra-rich population, but
more than 75% of Indians have personal wealth below $10,000.
Oxfam Inequality − UK’s NGO Oxfam International’s ‘Commitment to Reducing Inequality (CRI)
Index Index’
− It measures Govt’s ‘seriousness’ in reducing inequality by 3 dimensions 1) Govt’s
spending on social sector 2) progressive taxation 3) labour rights.
− 2018 Ranking: #1: Denmark, #147: India, #157: Nigeria (lowest)
− 2019 Ranking <update when announced>
− 2020-Jan: Oxfam presented a report in WEF-Davos summit that 1% Indian hold
four times more wealth than 70% of poor and it would take a female domestic
worker in India 22,277 years to earn what a top CEO of a technology company
makes in one year.
Global Social ⇒ By World Economic Forum (WEF).
Mobility Report ⇒ IF children can experience a better life than their parents, then the country has
+ve social mobility.
⇒ It measures– access to health, education, technology access, work opportunities,
social protection etc.
⇒ 2019: report launched for the first time. Ranking #1 Denmark> #2 Finland > #3
Norway>...#76 India>....#82: Côte d'Ivoire
�Period ⇒ It's a concept about how social taboo/hygiene issues surrounding menstruation
Poverty period prevent women from rising to their true potential in education and
employment. मा�सक-धमर् के साथ जुड़े �ए सामा�जक-�नषेध और ��ता क� सम�ाओ के चलते मिहला
�श�ा-रोजगार म� उनक� वा��वक �मता को हाँसील नहीं कर पाती अत: पु�षों क� तुलना मे 'गरीब' रह जाती है।
⇒ Menstruating girls miss school because they don’t have access to sanitary
products / separate toilets to change pads at school.
⇒ Chhaupadi = an ancient practice in rural Nepal. Menstruating women forced to
live in separate mud huts → death due to infection / illness.
⇒ 2020: Scotland- first country to issue a bill/law for providing free sanitary
products to women, to end period poverty.
64.3 🤲🤲🤲🤲:📯📯📯📯 POVERTY REMOVAL → MGNREGA (2005)

⇒ 2005: Parliament enacted MGNREGA Act.
⇒ 2006: launched in 200 districts → 2008: launched in the whole country as Mahatma Gandhi National
Rural Employment Guarantee Scheme (MGNREGS महा�ा गांधी रा��ीय ग्रामीण रोजगार गारंटी कायर्क्रम)
⇒ Boss? Ministry of Rural Development → Centrally sponsored scheme → core of the core scheme→ not
100% funded by the Union. क� द्र द्वारा प्रायो�जत योजना → अ�त मह�पूणर् योजना
⇒ It promises to give minimum 100 days of unskilled manual labour to rural household whose adult
members volunteer for it. Households are eligible for unemployment allowances if employment not been
provided within 15 days of demand.
⇒ MNREGA labourers are used for creating durable assets as per local needs e.g. ponds, wells, cattle sheds,
granary, vermicompost plants, crematorium; renovation of Anganwadi centres, school buildings,
playground (तालाब, कु एं , अ� भं डार, वम� कं पो� �ांट, �शान। �ू ली इमारतों का पुन�द्धार, खेलकू द के मैदान)
⇒ No contractors / machinery allowed.
⇒ In any project, 60% of amount should go towards wages and 40% towards material. (�ादा िह�ा वेतन म�)
⇒ Union bears 100% wage cost and 75% of material cost.
⇒ Wages are linked to Consumer Price Index (Agriculture labour:AL). [Although Modi thinking of linking
it with CPI-Rural] महंगाई के िहसाब से वेतन को बढ़ाया जाता है
⇒ Social audit by the gram sabha at least once in every 6 months. ग्रामसभा सामा�जक ऑिडट/ िहसाब क� जांच करेगी
⇒ �Atma-Nirbhar: � �MNREGA wage ⏫ from ₹182/day to ₹202
64.3.1 🤳🤳MGNREGA: Use of JAM-DBT

� �ES19 noted that: During UPA/ManMohan-raj, MGNREGA suffered from widespread corruption,
political interference, leakage, and significant delay in wage payments.
⇒ So, distressed villages/ farmers would migrate to cities / other states in search of work because even if
private parties gave them wages lower than MGNREGA (due to delays in MGNREGA).
⇒ However, during Modi-raj, the use of technology helped fixing these problems
⇒ 2015: Jan Dhan, Aadhaar and Mobile (JAM) Technology revolution started
⇒ Aadhar linked Payments (ALP): Biometric data, ghost accounts removed.
⇒ 2016: MoRD’s National Electronic Fund Management System (NeFMS) and NREGASoft → Money
transferred to State Govt’s bank account → NPCi’s Aadhar Enabled Payment System (AEPS) → Direct
Benefit Transfer (प्र�� ह�ांत�रत लाभ) to Beneficiary’s bank account.
⇒ Since Wages directly into MGNREGA workers’ bank accounts → reducing scope for delays / leakage /
corruption in payment
64.3.2 🤳🤳MGNREGA: Use of Space technology (अंत�र� प्रौद्यो�गक� का उपयोग)

− Geo-tagging (भौ�ग�लक �च�ी लगाना) is a process of adding latitude and longitude to a photo/video. In
MNREGA, PM Awas Yojana, Gram Sadak Yojana etc.
− PM Modi introduced the concept of Geo-tagging for preventing ₹ ₹ siphoning in fraudulent / non-
existent assets / claiming ₹ ₹ multiple times on same asset.
− GeoMGNREGA portal for keeping track of assets through mobile based photo geo-tagging
64.3.3 🤳🤳MGNREGA: Use of Apps
− JanMnREGA: an asset tracking + feedback app for MGNREGA assets.
− Gram Samvaad Mobile App: Here citizens can find information about the money allotted to their village
under various rural development schemes, It has initiated debate at the gram panchayat level why
development is not happening despite the release of funds.
�Thus, use of technology has reduced delays and scope for corruption in MGNREGA, thereby increasing its
efficacy in helping the rural people during the times of distress. Similar models need to be adopted in all the
other centrally sponsored schemes for ensuring India’s rapid economic growth and human development.
64.3.4 📔📔📔📔 MGNREGA: Future suggestion by ES19? (अ� सुझाव दी�जए)

 Big Data Analytics: We should do real time monitoring of demand for work under MGNREGA @district
level. If more work demand by villagers = proof of farm / rural distress. Then correlate with weather data
etc. then display flash alert on policymaker’s dashboard. So he can take corrective actions. e.g. Timely
release of crop insurance claims, distribution of more loans, additional allocation of foodgrains in PDS
Shops etc. िकतने मजदू र काम मांग रहे ह� उस डाटा पर अ�वरत �नगरानी रखकर, अ�ग्रम कदम उठाने चािहए
 Deepening MGNREGA workers’ financial inclusion through microinsurance, micropensions,
microcredit schemes. �व�ीय समावेशन करना चािहए, सू�ा बीमा सू� ऋण क� �व�ा
 Upskilling the MGNREGA Workers: Convergence of MGNREGA with Deen Dayal Upadhyaya Grameen
Kaushalya Yojana (DDUGKY). So, they can eventually find gainful employment, and don’t have to
demand ‘unskilled’ MGNREGA work all the time. कौश� बढ़ाना चािहए. तािक भ�व� म� उस मजदू र को वापस इस योजना
का लाभ मांगने के �लए ना आना पड़े
64.3.5 👻👻(🧱🧱⛏:💸💸🤲🤲�)Atma-Nirbhar → Prime Minister Garib Kalyan Rojgar Abhiyaan (GKRA)
⇒ PM started this from Bihar's Telihar village in 2020-June.

⇒ �Boss? Ministry of Rural Development coordinates with other ministries e.g. roads, mines, jal Shakti
etc.
⇒ �Where? 6 states of Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan, Jharkhand and Odisha to help
the returnee migrants. चु�नंदा रा�ों म� लागू िकया जाएगा जहां पर प्रवासी मजदू र बड़ी मात्रा म� वतन वापस आए ह�
⇒ �Duration? 125 days. To build Panchayat Bhavans, Community Toilets, Rural Mandis, Rural Roads,
Cattle Sheds, Anganwadi Bhavans Etc. with help of returnee migrants. कोरोना महामारी म� वतन वापस �ए श्र�मकों को
रोजगार देने के �लए ग्रामीण बु�नयादी अवसं रचनाओं का �नमार्ण कर�गे
�❓MCQ. Which one of the following is the earliest launched scheme of the Government of India?
(UPSC-CDS-i-2020)
(a) Deendayal Antyodaya Yojana (b) Pradhan Mantri Gram Sadak Yojana
(c) Saansad Adarsh Gram Yojana (d) Deendayal Upadhyaya Grameen Kaushalya Yojana
65 ☪✝HRD → WEAKER SECTION → MINORITIES, SC/ST
65.1 ☪✝ MINORITIES (अ�सं �क समुदाय)
65.1.1 ☪✝:📊📊 Minorities → DATA/Index/Report: Religious freedom (धा�मक �तं त्रता)

⇒ United States Commission on International Religious Freedom (USCIRF)
⇒ Their Religious Freedom Report 2020: India is labelled as a Country of Special Concern (CSC) because of
the communal violence. (ऐसा देश �जसपर अमरीक� धा�मक �ातं � आयोग को �वशेष �चंता है, सांप्रदा�यक िहसं ा के कारण)
⇒ But India’s External Affairs ministry has rejected this report so we need not apply much brain here. (भारत
के �वदेश मामलों के मं त्रालय ने इसे खा�रज िकया है।)
65.1.2 ☪✝:📯📯📯📯 → Pilgrim → Hajj → Subsidy
- 1932: British Indian Government started subsidized sea-transport Muslims going for Hajj to Mecca, Saudi
Arabia.
- In Modern times, Civil Aviation Ministry gave ‘Hajj Subsidy’ to Air India to provide cheap transport,
free meal etc. to them. (The beneficiaries selected by Haj Committees under Minority Ministry).
- 2012: Supreme Court ordered Govt to gradually phase out Hajj subsidy & use ₹ ₹ for educational and
social development of Muslims instead.
- 2018: Govt finally cancelled Hajj Subsidy based on Afzal Amanullah committee (2017) report.
- 2019: Minority Affairs ministry’s “E-MASIHA” health app for Haji pilgrims.
65.1.3 ☪✝:📯📯📯📯 → Pilgrim → Hajj → Mehram
- Earlier, Muslim women were not allowed to go for Hajj without ‘Mehram’ i.e. husband, son or a
male first blood relation as guardian.
- But PM Modi allowed Muslim women aged 45/> to go without Mehram, in a group of at least four
women, based on Afzal Amanullah committee (2017) report.
65.2 HRD → WEAKER SECTION → SCHEDULED TRIBES (ST)
65.2.1 📯📯📯📯 ST → Central Tribal University
- As per the 13th schedule of the Andhra Pradesh Reorganisation Act, 2014, Union Government has to
setup a tribal university each in Andhra and Telangana
- 2019-June: Central Tribal University will be setup in Araku of Visakhapatnam district, Andhra Pradesh.
65.3 WEAKER SECTION → SC, OBC, EWS, PH

65.3.1 �[YEARBOOK] Ministry of Social Justice And Empowerment
सामा�जक �ाय एवं सश��करण मं त्रालय Consists of... <list not exhaustive>
Dept − Dept of social Justice and empowerment.
− Dept of empowerment of persons with disabilities. (िद�ांगजन सश��करण �वभाग,
previously called �न:श� कायर् �वभाग but Modi felt it derogatory so changed name.)
Constitutional − Art 338 : National Commission for Scheduled Castes (NCSC: रा��ीय अनुसू�चत जा�त
Bodies आयोग)
− Art 338B: National Commission for Backward Classes (NCBC: रा��ीय �पछड़ा वगर् आयोग)
via 102nd amendment Act. 2018. Originally, it was setup as a statutory body in
1993.
Statutory − 1992: Rehabilitation Council of India Act (for PH)
− 2019: National Council for Transgender Persons (ट�ांसज�डर ��यों के �लए रा�ी� य प�रषद)
Non-statutory − National Commission for Safai Karamcharis (NCSK). Its Act expired in 2004, since
then functioning as a ‘non-statutory body’ through Gazette notification.
− National Commission for Denotified, Nomadic and Semi-Nomadic Tribes 2003,
reconstituted in 2005….. 2015 formed under Chairmanship of Bhiku Ramji Idate to
prepare state-wise list of DNTs. British Government had notified some tribes as
‘Criminal Tribes’ under Criminal Tribes Act (CTA), 1871. Post-Independence this
act was removed and such tribes were ‘denotified’. Most DNTs are categorized as
SC/ST/OBC though a few of the DNTs are not covered in any of these categories.
Autonomous − 2019-Feb: Development and Welfare Board for De-notified, Nomadic and Semi-
Bodies / Nomadic Communities (�वमुक्त, घुमंतू और अद्धर्घमु ं तू समुदायों के �लए �वकास एवं क�ाण बोडर्)
Foundations under Society Registration Act
− Dr. Ambedkar Foundation, Babu Jagjivan Ram National Foundation
− National Institute of Social Defence (सामा�जक र�ा), Delhi
PSU − National Scheduled Castes Finance and Development Corporation (NSFDC): A
‘non-for-profit’ company under Companies Act.
− Similar Corporations for Backward Classes, Safai Karamcharis.
− Artificial Limbs Manufacturing Corporation (ALIMCO)
Imp Days − From 2015 onwards: 26th November is observed every year as Constitution Day,
because on 26/11/1949 Constituent Assembly adopted the Constitution.
− 14th April: Dr. Ambedkar’s B’day.
65.3.2 � [Yearbook] Ministry of Law and Justice (�व�ध और �ाय मं त्रालय)

Dept ⇒ Department of Legal Affairs
⇒ Legislative Department
⇒ Department of Justice
Executive ⇒ Law Commission of India is a non-statutory non-constitutional body set up through
body gazette notification. 2020: 22nd commission formed for 3 years.
Statutory ⇒ National Legal Services Authority (NALSA) and SALSA @State to provide free legal
aid to poor people.
⇒ Bar Council of India to regulate lawyers
⇒ Delimitation Commission
Constitutional ⇒ Election Commission
App ⇒ Nyay bandhu app by Department of Justice to connect poor people with volunteer
advocates willing to provide Pro Bono (=free) legal service.
⇒ Tele-Law App and helpline number to help rural and poor people in understanding
the legal issues.
Index � Rule of Law Index (कानून का शासन सूचकांक)
⇒ By World Justice Project (WJP) a non-profit organization with offices in USA,
Singapore, and Mexico.
⇒ 2020 Report: #1 to 3: Denmark, Norway, Finland.. … #69: India, #128: Venezuela
most pathetic.
⇒ Index focuses on nations' performance on factors such as government openness,
fundamental rights, civil and criminal justice and containing corruption. (सरकारी
पारद�शता, मौ�लक अ�धकार, नाग�रक और आपरा�धक �ाय और भ्र�ाचार)
�Separately, we’ve a Ministry of Parliamentary Affairs (सं सदीय कायर् मं त्रालय) but no MCQ worthy stuff.
65.4 WEAKER SECTION → OBC & EWS

Polity angles are plenty but. Economy / Schemes points of view not much. Some contemporary issues are:
65.4.1 Weaker Section → OBC Sub-categorization (ओबीसी उप-वग�करण) commission

⇒ (Origin of OBC Reservation) While the term ‘OBC’ is not mentioned in the Constitution, Article 15
allows the State to make special provisions for the advancement of any socially and educationally
backward classes (SEBC) of citizens.
⇒ 1979: Mandal Commission gave report on SEBC.
⇒ 1990: PM VP Singh granted 27% reservation to OBC in central government jobs and admissions, which
was permitted by the Indra Swahny Judgement with certain caveats (50% breach, creamy layer etc).
⇒ (Origin: why Sub-categorization) over the years, certain communities within OBC list have benefitted
more than other OBC communities.
⇒ So, OBC Sub-categorisation (ओबीसी उप-वग�करण) is an attempt to divide the OBCs into two groups: 1) more
affluent ones and 2) less affluent ones,
⇒ so that the less-affluent ones may be given separate quota within 27%, and some additional schemes /
funds earmarked only for them. (ओबीसी म� कम समृद्ध समुदायों को अलग से आंत�रक कोटा/लाभ दीए जाने पर �वचार हो रहा है)
⇒ Article 340 allows the President of India to appoint a commission to investigate into the issues related to
SEBC → . 2017: A commission under Justice G. Rohini to look into the issue of OBC-subcategorization.
→ it is given extension till 31/01/2021 (आयोग क� अव�ध को बढ़ाया गया है)
65.4.2 Weaker Section → EWS Reservation

- 2019: 103rd Constitutional Amendment Act to provide 10% reservation to Economically Weaker
Sections (EWS: अनार��त श्रेणीम� आ�थक �प से कमजोर वगर्) among the unreserved category i.e. those not in
SC/ST/OBC list.
- Gujarat became the first state to implement the 10% EWS quota after this amendment.
- Union Social Justice ministry looks after the matters related to EWS.
66 👩👩 HRD → WEAKER SECTION → WOMEN & CHILDREN
(Introduction Template- Origin/DATA) While nearly half of the Indian population consists of women, but
despite more than 70 years of independence they are lagging behind in the men. For example, हालांिक भारत क�
आधी आबादी मिहलाओं क� है िकंतु आजादी के 70 साल बाद भी वे पु�षों के अनुपात म� �पछड़ी �ई है. वै��क सं गठनों द्वारा बनाए गए अलग-अलग
�रपोटर् म� भी यही बात प्र�ुत �ई है.
⇒ UNDP GENDER INEQUALITY INDEX, (यूएनडीपी का ल��गक असमानता सूचकांक)

o female Labour Force Participation Rate in India is less than 30%, (मिहला श्रम बल भागीदारी दर)
o share in Parliament seats is less than 15%. (सं सद म� मिहलाओं क� सं �ा)
⇒ World Economic Forum's GLOBAL GENDER GAP REPORT too points towards as a similar gloomy
picture. (�व� आ�थक मं च का वै��क �लंग अंतर �रपोटर् म� भी कु छ ऐसा ही हतो�ािहत करने वाला �चत्र उभर कर आता है)
66.1 WOMEN EMPOWERMENT CONSTITUTION AND LEGAL ANGLES

given in the full course handout
66.2 👩👩👩📊📊 REPORT → WEF → GLOBAL GENDER GAP REPORT

Annual report by the World Economic Forum since 2006, to measure
Gender Gap Across Four Pillars & India’s Rank → 2018 2020*
1) Economic Opportunity: Female labour force participation rate, wage 142 😥😥149
equality, number of women in managerial / senior executive position.
2) Educational Attainment: female literacy, enrollment rate at primary 114 112
secondary tertiary level
3) Health & Survival: Life Expectancy at Birth, Sex Ratio. 147 �150
4) Political Empowerment: How many females in Parliament, how many 19 18
ministers, how many became Prime Minister or President?
Overall Rank of India → 108 112
Bottom Ranker Yemen Yemen
(149) (153)
Top Ranker Iceland (#1)
* After 2018 they directly released report for “2020” in 2019-Dec.
66.2.1 👩👩👩📊📊 Report → OECD’s SIGI Report, 2019
Social Institutions and Gender Index prepared by OECD since 2007. Although not annually updated. It
measures various types of discrimination faced by women at home and in the society. Nations are classified
into Very low level of discrimination to very high level. 2019 Ranking: India medium category.
66.2.2 👩👩👩📊📊 Gender Indices → Gender Social Norms Index (GSNI)

⇒ United Nations Development Programme (UNDP) started for the first time in 2020
⇒ It measures how the public's own social beliefs obstruct gender equality in politics, work, and education.
⇒ 90% of world people and 98% of Indians hold one bias against females e.g. men are better political
/business leaders than women etc.
⇒ Consequently, women will suffer in 4 indices: 1) political empowerment, 2) educational empowerment, 3)
economic empowerment 4) physical integrity
⇒ NUMBER OF female heads of country have ⏬ (e.g. British PM Theresa May replaced by a male, South
Korea & Brazil’s female presidents impeached/removed on the charges of corruption)
66.2.3 👩👩: 👻👻👻👻👻👻👻👻 Atama-Nirbhar: PM GARIB KALYAN → Women will benefit, how?
Table 1: plus, many other initiatives refer to respective pillars for more!
⇒ ₹500 per month to 20 crore women PM Jan Dhan Bank accounts for next three
months. (April, May, June 2020)
Social ⇒ (Single time) ₹1,000 to 3 crore poor senior citizen, poor widows and poor disabled
Security � �Further, male and female workers will benefit from following
(More in ⇒ If worker earning <₹15,000 per month in a firm with <100 workers → Govt will pay
� 24% of his monthly wages into his EPFO account for next 3 months.
Pillar#1D) ⇒ EPFO workers can withdraw xx% from their account for next 3 months.
⇒ ₹50 lakh insurance cover for health workers involved in managing the Coronavirus
such as doctors, nurses, paramedical staff, ASHA workers etc. for the next 90 days.
(1D) Loans Women Self Help Groups (SHGs) to be given ₹20 lakh collateral free loans.
MGNREGA � �MNREGA wage ⏫ from ₹182/day to ₹202
⇒ PM GARIB KALYAN → PM Garib Kalyan Ann (अ�) Yojana: 80 cr poor people will to
Food/
get 5 kg [wheat or rice] + 1 kg of pulses for free every month for the next three months
Cooking
⇒ (Pill: 5A) Free monthly LPG cylinder to PM-Ujjwala beneficiaries for next 3 months.
66.3 👭👭👭👭WEAKER SECTION: LGBT (समल��गक और िक�र)
- Lesbian, gay, bisexual, transgender, queer and intersex (LGBTQI)

- 2018: Supreme Court declares Indian Penal Code (IPC) Section 377 unconstitutional. Consensual
homosexual acts between consenting adults are decriminalized.
- 2019: Akhil Bhartiya Kinnar Siksha Seva Trust (a non-government body) announced setting up India’s
first university for transgender community in Fazilnagar in Kushinagar district in UP (Uttar Pradesh).
- � 2020: Manipur NGO’s initiative “Khudol (gift)” for giving food, medicine, and quarantine facility
material to LGBTQI+ & HIV community during Corona Crisis. It’s listed among top-10 global initiatives
for an inclusive fight against Corona, by UN.
66.3.1 � National Council for Transgender Persons (NCTP: ट�ास

ं ज�डर ��यों के �लए रा��ीय प�रषद)
- 2016: Transgender Persons (Protection of Rights) Bill → became Act in 2019. to prohibit discrimination
against them in education / employment / residence; National Council for Transgender (NCT) for their
welfare. While SC earlier directed Govt to give reservation to TG but bill did not have it.
⇒ NCPT is a statutory body under Transgender Persons Protection of Rights Act, 2019
⇒ Chairman = Union Minister for Social Justice & Empowerment
⇒ Vice Chairman= Union Minister of state for Social Justice & Empowerment (उपा��)
⇒ representatives of various Ministries/Departments, NHRC and NCW, State Govt/UT, NGOs.
⇒ Five representatives of transgender community.
⇒ Non ex-officio members will have 3 years tenure.
⇒ More details about the functions and responsibilities prepared from CA-PDF/Polity courses.
67 HUMAN DEVELOPMENT & SUSTAINABLE DEVELOPMENT
Introduction: Human development measures the ‘richness’ of human life, rather than measuring ‘richness’ of
the economy. It stands on three foundations 1) To live a healthy and creative life 2) to be knowledgeable 3) A
decent standard of living. मानव �वकास अथर्�व�ा क� ’समृ�द्ध’ को मापने के बजाय मानव जीवन क� ‘समृ�द्ध ’को मापता है। यह तीन नींवों
पर खड़ा है 1) एक �� और रचना�क जीवन जीना 2) �श�ा हाँसील करना 3) एक अ�ा जीवन �र हाँसील करना ।
As per NCERT:
- Four pillars of human development are Equity, Sustainability, Productivity and Empowerment.
- Four approches (��कोण) to human development are:
Approch Description
1. Income - Oldest approch. Higher income = higher human development. (आय ��कोण)
Approach
2. Welfare - People are not participants in development but only passive recipients.
Approach - higher government expenditure on education, health, social services etc welfare
क�ाण scheme required to help them.
3. Basic needs - by International Labour Organisation (ILO).
बु�नयादी ज�रत� - Six basic needs: health, education, food, water supply, sanitation, and housing
need to be focused
4. Capability - By Prof. Amartya Sen: Government should focus on building human capabilities
Approach in health, education and access to resources (such as jobs, loans etc) = ⏫
�मता human development.
❓Which of the following are considered to be the four pillars of human development? (UPSC-CDS-i-
�
2020)
a) Equity, inclusion, productivity and empowerment
b) Equity, productivity, empowerment and sustainability
c) Productivity, gender, inclusion and equity
d) Labour, productivity, inclusion and equity
67.1 📊📊📊📊 UNDP’S HUMAN DEVELOPMENT REPORT (मानव �वकास �रपोटर्)
- New York: United Nations → Economic and Social Council (ECOSOC) → United Nations
Development Programme (UNDP:सं यु� रा�� वकास कायर्क्रम) prepares this annual report since 1990, based
formula devised by Economists Mahbub ul Haq (Pak) & Amartya Sen (India). Mahbub ul Haq was the
first to give human dev concept
- 2018’s Report published in 2018-Sept. It didn't have any ‘theme’, just a statistical update.
- 2019’s Theme: Beyond income, beyond averages, beyond today: Inequalities in human development in
the 21st century.
-
UNDP’s report provides FIVE indices of Human Development viz.
FIVE INDICES 2018 Report 2019 Report (Released in Dec’19)
(started from) #1 India #bottom #1-5 India #bottom
1990: Human Norway 130: 189: Niger Norway, Swiz, 129 189: Niger
Development (improved Ireland,
Index (HDI) from 131) Germany,
HongKong
2010: Doesn’t 27.5% 91.9% South Doesn’t measure 27.9% 91.9% South
Multidimensional measure Indians are Sudanese rich nations Indians Sudanese are
Poverty Index rich Poor are poor are poor poor
(MPI). It doesn’t nations
give ‘rank’ but %
of poor people.
(Ref: Poverty
section)
2010: Gender 1: India: 127 160: Yemen 1: Swiz,5: 122 162: Yemen
Inequality Index Switzerla Norway
(GII) (Ref: nd
Women section) 5:
Norway
2014: Gender - Group#1: Norway, Swiz, US, UK Same as last year
Development etc
Index (GDI). - Group#5: India, Niger, Chad &
Doesn’t give their friend-circle
‘rank’, it clubs
nations into
group 1 to 5
2010: Inequality Not important / poor cost benefit in chasing it for exam
Adjusted HDI
67.2 📊📊 HUMAN DEVELOPMENT → MISC. INDICATORS
Gross National - 1972: term coined by the fourth king of Bhutan, Jigme Singye Wangchuck,
Happiness Index - It is an indicator to measure sustainable development, environmental
(GNHI) conservation, culture and good governance.
Physical Quality of - Developed in mid-1970s by Morris D Morris
Life Index (PQLI) - Focuses on 1) life expectancy, 2) infant mortality rate 3) literacy rate
- Scores a nation on a scale of 1 to 100. Score 1 = represents the worst
performance.
�❓MCQ. In the context of any country which one of the following would be considered as part of its
social capital? (Asked in UPSC-Pre-2019)
a) The proportion of literates in the population.
b) The stock of its buildings, other infrastructure and machines.
c) The size of the population in the working age group.
d) The level of mutual trust and harmony in the society.
68 🌱🌱 SUSTAINABLE DEVELOPMENT GOALS (SDG)

68.1.1 �🌴🌴🌴🌴🌴🌴 [Yearbook] Ministry of Environment, Forest and Climate Change
(पयार्वरण वन एवं जलवायु प�रवतर्न मं त्रालय)
Dept ⇒ N/A
Subordinate/ ⇒ Forest Survey, Dehradun
Attached ⇒ Botanical Survey, Kolkata
⇒ Zoological Survey of India, Kolkata
⇒ Indira Gandhi National Forest Academy, Dehradun
⇒ Directorate of Forest Education, Dehradun
⇒ National Institute of Animal Welfare, Haryana
⇒ National Zoological Park, New Delhi
⇒ National Museum of Natural History, New Delhi
⇒ National River Conservation Directorate, New Delhi
⇒ National Centre For Sustainable Coastal Management, Chennai
Statutory ⇒ 1960: Animal Welfare Board of India under Prevention of Cruelty to Animals,
Bodies Haryana
⇒ 1972: Central Zoo Authority, under Wildlife (Protection) Act, Delhi
⇒ 1972: National Tiger Conservation Authority under Wildlife (Protection) Act, Delhi
⇒ 1972: Wildlife Crime Control Bureau under Wild Life (Protection) Act, Delhi
⇒ 2002: National Biodiversity Authority, under Biological Diversity Act, Chennai
⇒ 2010: National Green Tribunal, under National Green Tribunal Act, Delhi
⇒ Central Pollution Control Board (CPCB Delhi) to implement
o Water (Prevention and Control of Pollution) Act 1974
o Air (Prevention and Control of Pollution) Act, 1981
o Environment (Protection) Act 1986
Autonomous ⇒ Govind Ballabh Pant Institute of Himalayan Environment & Development,
Uttarakhand
⇒ Indian Council of Forestry Research and Education, Dehradun
⇒ Indian Institute of Forest Management, Madhya Pradesh
⇒ Indian Plywood Industries Research and Training Institute, Punjab
⇒ Wildlife Institute of India, Dehradun
⇒ Salim Ali Center for Ornithology and Natural History(SACON), Anaikatti,
Coimbatore, Tamil Nadu
PSU ⇒ Andaman & Nicobar Islands Forest and Plantation Development Corporation
Limited, Port Blair
68.1.2 �☔🌪🌪 [Yearbook] Ministry of Earth Sciences (पृ�ी �व�ान मं त्रालय)

Dept ⇒ N/A
Attached ⇒ National Center for Seismology, Noida
⇒ Centre for Marine Living Resources and Ecology, Kochi
Subordinate ⇒ India Meteorological Department (IMD), New Delhi
⇒ National Centre for Medium Range Weather Forecasting, Noida
Autonomous ⇒ National Institute of Ocean Technology, Chennai
⇒ National Centre for Polar & Ocean Research, Goa
⇒ Indian Institute of Tropical Meteorology, Pune
⇒ Indian National Centre for Ocean Information Service, Hyderabad
⇒ National Centre for Earth Science Studies, Kerala
PSU ⇒ N/A or not Not MCQ worthy
68.2 🌱🌱 📔📔📔📔ES20 ON SDG & ENVIRONMENT

- Vol2Ch10: Government’s expenditure in last five years (2014-2019)
- On health as % of GDP = steadily ⏫
- On education as % of GDP = steadily ⏫
- On other social services (water, sanitation, urban dev, SC-ST-OBC welfare, labour welfare,
nutrition, natural disasters etc) = NOT steadily ⏫
- Vol2ch6: CEA Subramanian K. talks about how absence of a certain input creates challenges to SDG such
as:
Education and ⇒ non-electrified schools have
Electricity ⇒ Poor staff-retention (लोग नोकरी छोड़ के चले जाते है)
Nexus ⇒ Higher Drop-outs, Poor results in exams
⇒ States with lower literacy rates have low electricity rates at the schools and vice-
versa
Health and ⇒ Hospitals and states with electricity consumption have lower Infant Mortality Rate
Energy Nexus (IMR)
� Homework: Economic Survey 2020 contains certain info about environment/forests. So, prepare
following information
� �ES20 vol2ch6 bullet number Topic to focus
6.21 → ISA’s new awards in collaboration with Indian state
Governments
6.25 & 6.26 → Forest report: types & sizes of forests etc.
6.27 upto 6.29 Shannon-Weiner Index for Biodiversity, forest distribution
across world, carbon stock.
Don’t waste time in other sections of this chapter, as I’ve either covered them (e.g. crop residue in 4A etc.)
and/or they’re not worth MCQ utility.
68.3 🌱🌱 📐📐 📊📊 SDG → INDIA’S IMPLEMENTATION / MONITORING

India has tasked NITI Aayog to monitor the SDG implementation in India, tie up with Union ministries, State
governments, academia, civil society and other stakeholders.
 2018-Dec: NITI prepared ‘Baseline (आधार रेखा) Report of the SDG India Index’, which contains baseline vs
targets to be achieved for each goal & how much progress has been made by the States.
 Accordingly, NITI assigns “SDG Goal Score (0-100)” to each State & UT and classifies them into
following categories:
68.3.1 🌱🌱 📐📐 📊📊 NITI’s SDG India Index (2018): overall scoring

Score → 2018’s Report 2019’s (Released in Dec’19)
Monitoring 62 indicators across 13 goals 100 indicators spread across 16 goals.
Aspirant: 0-49 आकां�ी: Assam, Bihar, UP Not any
Performer: 50- अ�ा प्रदशर्न: Remaining Among these most pathetic is Bihar(50), whereas Uttar
64 State/UT Pradesh shown highest improvement than last year.
Front Runner: अग्रणी: Himachal, Kerala, TN, Best: Kerala(70) & Chandigarh (70).
65-99 Chandigarh and Puducherry Then Himachal, Tamil Nadu, Andhra, Telangana,
Karnataka, Goa, Sikkim, and Puducherry = total 8
States & 2 UT
Achiever: 100 सफल: all SDG goals achieved but no one here YET.
For example, SDG Goal#3 Ensure Healthy Lives & Promote Well-being For All
Associated Targets under Goal#3 SDG Goal#3 States/UT categorization
 Reduce MMR (Baseline:130) → Target 70 (by  Achiever: None achieved all targets
2030), Kerala already achieved.  Frontrunners: Kerala, TN, Puducherry etc
 Eliminate TB by 2030 (No State Yet Achieved)  Performer: MH, Gujarat etc.
 Reduce Under-5 Child Mortality Rate  Aspirants: Bihar, UP etc.
(Baseline:50) → Target 11 (by 2030),Kerala,
Maharashtra, Tamilnadu achieved.
 Increase no. of Govt doctors , nurses and
midwives per 1,00,000 population:
(Baseline:221) → Target 550 (by 2030). Kerala
already achieved.
68.3.2 🌱🌱📒📒 NITI’s VNR Review to UN

⇒ 2020-Jul: NITI presented India's second time Voluntary National Review (VNR: �ै��क रा�ी� य समी�ा) to
UN's SDG monitoring forum.
⇒ Theme of the report: "Taking SDGs from Global to Local". िक सतत �वकास ल� हा�सल करने म� हमारी अब तक क� प्रग�त
�ा रही है? �ादातर बोल ब�न और �चकनी चुपड़ी बात� है, परी�ा उपयोगी माल ब�त कम है.
68.4 🌱🌱 SDG GOALS VS INDIA’S NOTABLE SCHEMES

Covered in the full handout
68.5 ✍🎺🎺 MAINS ANSWER WRITING: MOCK QUESTIONS
1) "National Education Policy 2020 (NEP-2020) aims to bring transformational reforms in school and
higher education." Discuss. "(नई) रा��ीय �श�ा नी�त का उद्दे� �ू ल और उ� �श�ा म� प�रवतर्नकारी सुधार लाना है।" चचार् कर�।
2) "NEP-2020 is built on the foundational pillars of Equity, Quality, Affordability and Accountability".
Substantiate. (नई) रा��ीय �श�ा नी�त को समानता, गुणव�ा, िकफायत/कमखच� और जवाबदेही के �ं भों पर बनाया गया है
3) Enumerate the measures in the NEP for (INSERT SUB-Sector: school education / higher education /
assessment etc.) (नई) रा��ीय �श�ा नी�त के x/y/z/ �ेत्र के अनुसंधान म� प्रमुख प्रावधानों क� सूची दी�जए
4) Enumerate the Atma-Nirbhar reforms undertaken by the government of India to help the <INSERT
Beneficiary type: Women, Migrants, Poors> आ� �नभर्र पहल म� भारत सरकार द्वारा <मिहला /प्रवासी मजदू र /गरीब वगर्> के
�लए उठाए गए कदमों क� सूची दी�जए.
5) With a suitable example of a Government scheme, explain how e-governance and use of technology can
result in greater transparency and accountability? एक सरकारी योजना के उपयु� उदाहरण के साथ, समझाएँ िक कै से ई-
गवन�स और प्रौद्यो�गक� के उपयोग से अ�धक पारद�शता और जवाबदेही हो सकती है?
6) “Use of ICT-technology has enhanced MGNREGA’s efficacy in combating rural distress.” Elaborate. -
"आईसीटी-प्रौद्यो�गक� के उपयोग ने ग्रामीण क�/सं कट से �नपटने म� मनरेगा क� प्रभावका�रता को बढ़ाया है।" �व�ार से बताएं ।


Extra 2020 PDF

Uploaded by

Copyright:

Available Formats

Extra 2020 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Extra 2020 PDF

Uploaded by

Copyright:

Available Formats

MRUNAL’S ECONOMY WIN20CSP UPDATE PACK FOR 19’S BATCHES PILLAR#1

10: PILLAR#1A1: MONEY-BARTER TO BITCOIN KE UPDATES

10.1 💸COINS AND NOTES

10.1.2 💼Budget-2020: A museum for coins

10.2 💳DIGITAL PAYMENTS / LESS CASH ECONOMY

10.2.4 🚕💳 National Common Mobility Card (NCMC, 2019)

 1) NCMC Card: To be issued by banks. Nature can be Debit/Credit/Prepaid. Can be

10.2.6 🕵🏻📒💳 RBI’s Nandan Nilekani Panel (2019: Jan to May)

Nilekani’s Suggested Reforms @RBI

Nilekani’s Suggested Reforms @NPCi

Nilekani also suggested many technical reforms but notimp4exam

10.3 💮🔗 MONEY’S EVOLUTION → CRYPTOCURRENCY

10.3.2 💮🔗 Cryptocurrency & India → ⚖️ Banning of Cryptocurrency Bill, 2019

10.3.3 💮🔗🥇 Cryptocurrency & world → Stable-coins

10.3.4 🌐👶🔗💮 Cryptocurrency & world → UNICEF’s Crypto Donation Fund

11.1 📔📔ES20 DATA ON MONEY SUPPLY

Figure 1: zigzag pattern means 'not increasing steadily'.

ES20: Between mid-1990’s to 2016-17: Money multiplier (measured as a ratio of

🔠❓ Money Multiplier in an economy increases with _ _ _? (Asked in Pre-2019)

A. Increase in the cash reserve ratio

11.2 📔📔ES20: DATA ON MEASURES OF MONEY SUPPLY [M1, M3]

11.3.1.1 🐯🗄✂️🗓 CRR Exemption for 5 years (सीआरआर में छूट)

11.3.2 🐯🔪🗓 Long Term Repo Operations (LTROs)

11.4 🐯📢🗃🧬MONPOLICY: QUANTITATIVE TOOLS → OPERATION TWIST

11.4.1 🔪🗃:Security → Debt → G-Sec & Bonds

Borrower Government Corporate

Factor How it determines corporate bond interest rate

11.4.3 🔪🗃: 🤑 Bond Yield

11.4.4 🔪🗃: 🤑 Bond Yield ∝ 1/Price

11.4.5 🔪🗃: 🤑 Bond yield: other factors affecting it

11.4.6 🐯📢🗃🧬Operation Twist: why?

11.4.7 🐯📢🗃🧬RBI’s Operation Twist: methodology (2019-Dec)

समज में आ गया हो तो बढ़िया है , नह ं तो रट्टा मारो जजंदाबाद:

11.4.8 🔪🗃: 🤑 Bond Yield: Related Concepts

11.4.9 🔪🗃: 📉😟 Inverted Yield Curve = recession is coming

11.4.10 🔪🗃: 📉 🍕🤯 Negative Bond Yield

RBI side (3 members) Govt. Side (3 members)

Upto Feb-2019 updates should be in your existing handout. Afterwards:

12.1 🤩 GOLDEN ANNIVERSARY OF NATIONALIZATION- 📔📔ES20

12.1.1 🦄> 🦁: Private sector banks are better than PSBs

Indicators : PSBs =losers : PvBs= winners

12.1.2 🦁 = 🐌 PSBs: reasons for inefficiency & remedies?

12.1.3 Merger of 10 PSBs into 4 (Announced in 2019-August)

ES20 Vol1Ch7 on 50 years of bank nationalization also noted:

12.1.4 🏦 👨‍⚖‍ 🌎🚫🚗📜 On-Tap Licenses for SFB

- Minimum 200 crore capital.

12.2 📮 (YEARBOOK) DEPT OF POST: POSB VS IPPB

✓ Setup by Clive (1766), expanded by Warren Hastings (1774)

12.3 🏦 👨‍🌾COOPERATIVE BANKS: KERALA BANK (2019)

12.4 🏦 👨‍⚖‍AIFI: NHB’S REGULATORY POWER SHIFTED TO RBI

12.4.1 🏦👨‍⚖‍NBFC → Investment and Credit Companies (new category in 2019)

12.4.2 🏦👨‍⚖‍ Microfinance → Lending norms changed in 2019-Oct

13.1 🏦 👨‍🌾😥 COOPERATIVE BANKS: NEGATIVE NEWS (2019): PMC BANK

13.2 🏦🙊😥YES BANK AND AT1 BONDS (2020)

Equity Capital + Liabilities + NET Profit = Assets

+Equity Capital +Liabilities +NET =Assets

2020-March: RBI is attempting following for Yes Bank’s revival (पन

 Deposits Liability: (temporary) withdrawal limits of ₹50,000 on depositors

13.2.1 🌐🏦 🕵️‍♂‍ BASEL-III norms: Capital Tiers