9 PM Current Affairs Brief – July 6, 2019

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Budget Briefs: Stand-Up India Scheme extended till 2025

  1. Union Minister has said that the Stand Up India Scheme has been extended up to the year 2025.
  2. Stand-Up India Scheme Facilitates bank loans between  10 lakh and 1 Crore to at least one Scheduled Caste (SC) or Scheduled Tribe(ST) borrower and at least one woman borrower per bank branch for setting up a greenfield enterprise.
  3. This enterprise may be in manufacturing, services or the trading sector. In case of non-individual enterprises at least 51% of the shareholding and controlling stake should be held by either an SC/ST or woman entrepreneur.
  4. The Finance Minister also said that the Government proposes to streamline multiple labour laws into a set of four labour codes which will ensure the standardisation and streamlining of the process of registration and filing of returns.
  5. Finance Minister also said that through the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), the Government has enabled about 10 million youth to take up industry-relevant skills training.
  6. She also added that focus shall be given to new-age skills like Artificial Intelligence (AI), Internet of Things, Big Data, 3D Printing, Virtual Reality and Robotics which are valued highly both within and outside the country and offer much higher remuneration.
  7. The Finance Minister also said that under Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), the Government contribution to the Pension Scheme has been increased from 8% in 2016-17 to 12% for both Employees Provident Fund and Employees Pension Scheme for all sectors.

Budget Briefs: Education

  1. Finance minister has announced that an amount of Rs. 400 crore has been provided for FY 2019-20 to create “World Class Institutions” in the field of education.
  2. She said that five years ago there were no Indian institutes featuring in the Top 200 of the QS World University Rankings. However, now three institutes feature in the list.
  3. To achieve the objectives of research and innovation, the Finance Minister has announced setting up of a National Research Foundation (NRF) to fund, coordinate and promote research in the country.
  4. NRF will ensure that the overall research ecosystem in the country is strengthened with focus on identified thrust areas relevant to our national priorities and towards basic science without duplication of effort and expenditure.
  5. She also announced the programme ‘Study in India’, that will focus on bringing foreign students to study in our higher educational institutions.
  6. The Finance Minister also disclosed that a draft legislation for setting up Higher Education Commission of India (HECI) would be presented in the year ahead. This will help to comprehensively reform the regulatory system of higher education to promote greater autonomy and focus on better academic outcomes.
  7. The minister also said the Khelo India Scheme will be expanded to provide all necessary financial support and a National Sports Education Board for Development of Sportspersons would be set up under Khelo India Scheme to popularize sports at all levels.
  8. The minister also said that Massive online open courses through the SWAYAM initiative have helped bridge the digital divide for disadvantaged section of the student community.
  9. The minister said that Global Initiative of Academic Networks (GIAN) programme in higher education was started to up-grade the quality of teaching. It was aimed at tapping the global pool of scientists and researchers.

Budget Briefs: RBI can supersede NBFC board

  1. The government has decided to strengthen regulatory authority of Reserve Bank of India (RBI) over non-banking financial companies (NBFCs).
  2. Finance Minister has said that the RBI will now be the regulator of Housing finance companies (HFC) replacing the National Housing Bank (NHB).
  3. According to the Finance Bill, 2019, RBI can now remove the director of an NBFC and even supersede its board in the public interest or to prevent the affairs of NBFC being conducted in a manner detrimental to the interests of depositors or creditors.
  4. Another proposed amendment to the RBI Act will allow RBI to frame schemes for amalgamating, splitting and reconstructing an NBFC if it feels it is required after looking into the NBFCs books of account.
  5. This decision was taken after RBI had called for greater surveillance on large entities in India’s NBFC as their failure could lead to losses that are similar to those of big banks.
  6. Further, NBFCs have seen their source of funds suddenly dry up after a series of defaults by Infrastructure Leasing & Financial Services(ILFS) that has triggered a liquidity crisis.
  7. The minister has also proposed to set up an Expert Committee to study the current situation relating to long-term finance and our past experience with development finance institutions.

Budget Briefs:Taxation

  1. Corporate Tax: The lower rate of 25 % Corporate Tax will be extended to all companies with annual turnover up to Rs. 400 crore. Currently, this rate is only applicable to companies having annual turnover up to Rs. 250 crore. This will cover 99.3 percent of the companies.
  2. Pre-filing of Income-tax Returns: Pre-filled tax returns will be made available to taxpayers which will contain details of salary income, capital gains from securities, bank interests, dividends and tax deductions.
  3. Encourage Digital Payments: To promote digital payments, the Budget proposes to levy TDS of 2 percent on cash withdrawal exceeding Rs. 1 crore in a year from a bank account.
  4. The low-cost digital modes of payment such as BHIM UPI, UPI-QR Code etc. will promote less cash economy. The business establishments with annual turnover more than Rs. 50 crore shall offer such low cost digital modes of payment to their customers and no charges or Merchant Discount Rate (MDR) shall be imposed on customers as well as merchants.
  5. Faceless e-assessment to eliminate undesirable practices: The existing system of scrutiny assessments in the IT Department involves a high level of personal interaction between the taxpayer and the Department, which leads to certain undesirable practices on the part of tax officials.
  6. To eliminate such instances a scheme of faceless assessment in electronic mode involving no human interface is being launched this year in a phased manner.
  7. PAN – Aadhaar Interchangeability: The Budget also proposes to make PAN and Aadhaar interchangeable and allow those who do not have PAN to file Income Tax Returns by simply quoting their Aadhaar number and also use it wherever they are required to quote PAN.
  8. GST processes are being further simplified: The threshold exemption limit for a supplier of goods is proposed to be enhanced from Rs. 20 lakhs to an amount exceeding Rs. 40 lakhs.
  9. Sabka Vishwas Legacy Dispute Resolution Scheme: The budget proposes this as a dispute resolution-cum-amnesty scheme to allow quick closure of huge pending litigations from pre-GST regime.
  10. The relief under the scheme varies from 40 percent to 70 percent of the tax due for cases other than voluntary disclosure cases depending on the amount of tax dues involved.
  11. The effective tax rates for the higher income group individuals having taxable income from Rs. 2 crore to Rs.5 crore and 5 crore and above is proposed to be increased by around 3 percent and 7 percent  respectively.
  12. The budget proposes to give relief in levy of Securities Transaction Tax (STT) by restricting it only to the difference between settlement and strike price in case of exercise of options. STTis a tax levied at the time of purchase and sale of securities listed on stock exchanges in India.

Budget Briefs: Growth capital for public sector banks

  1. Finance Minister in the Budget 2019 speech has announced that the public sector banks (PSBs) will be provided with a capital infusion of Rs 70,000 crore.
  2. This bank recapitalisation is aimed at bolstering the capital base of the state-owned banks. It will also give a much-needed boost to the stressed banks who are under pressure owing to the rising Non-Performing assets (NPAs).
  3. This 70,000 crore recapitalisation amount is a small part of Rs 2.11 lakh crore that the government plans to give to the banking sector in the next few years.
  4. Further, the finance minister has also said that Indian banking sector saw Rs 1 lakh crore of NPA resolution and recovery of Rs 4 lakh crore through the Insolvency and Bankruptcy Code(IBC) mechanism in the last four years.
  5. The Finance Minister also noted that six PSU banks have already been brought out of the Prompt Corrective Action (PCA) framework.
  6. PCA is a process or mechanism to ensure that banks don’t go bust. Under it, RBI will put in place certain risk thresholds to assess, monitor, control and take corrective actions on banks which are weak and troubled.
  7. The minister has also said that the government had earlier initiated governance reforms in the banks like splitting the Chairman and Managing Director’s post and forming a Banks Board Bureau (BBB) for board level appointments.
  8. BBB is an autonomous body of the Government of India. It is tasked to (a)improve the governance of Public Sector Banks (b) recommend selection of chiefs of government owned banks and financial institutions and (c) to help banks in developing strategies and capital raising plans.

Budget Briefs: A shot in the arm for struggling MSMEs

  1. Presenting the Budget 2019-20, the finance minister has unveiled a slew of initiatives and new provisions to tackle issues related to the Micro, Small and Medium Enterprises(MSME) sector in the country.
  2. The Finance Minister has announced that Rs 350 Crore will be allocated for 2% interest subvention for all GST registered MSMEs on fresh and incremental loans.
  3. The government has introduced a scheme for providing loans up to ₹1 crore within 59 minutes through a dedicated online portal.
  4. The Government has also announced to create a payment platform for MSMEs to enable filing of bills and payment on the platform itself to eliminate delays in government payments.
  5. Under the scheme named Pradhan Mantri Karam Yogi Maandhan Scheme,the government will extend pension benefits to about three crore retail traders and small shopkeepers whose annual turnover is less than ₹1.5 crore. Enrolment will be kept simple requiring only Aadhaar and a bank account.
  6. Under the Scheme of Fund for Upgradation and Regeneration of Traditional Industries (SFURTI),100 new clusters will be set up during 2019-20,enabling 50,000 artisans to join the economic value chain.
  7. SFURTI aims to set up Common Facility Centres (CFCs) to facilitate cluster-based development to make traditional industries more productive, profitable and capable for generating sustained employment opportunities. Focused sectors are Bamboo, Honey and Khadi clusters.
  8. Further,10,000 new Farmer Producer Organizations are proposed to be formed to ensure economies of scale for farmers, under the Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’ (ASPIRE).

Budget Briefs: Fiscal deficit target revised downwards to 3.3%

  1. Finance Minister has announced the fiscal deficit target for 2019-20 at 3.3% of GDP from 3.4% set in the Interim Budget presented on February 1, 2019.
  2. Fiscal deficit is the amount of money that the government needs to borrow in a given year because their expenses were more than their revenues.
  3. The main reason for decrease in fiscal deficit target is that there was an increase on the revenue side while expenditure is being controlled.
  4. To achieve the fiscal deficit target, the government is relying on (a) disinvestment income (b) higher taxes on the rich and (c) increased excise duties on petrol, diesel, precious metals and tobacco products.
  5. The government has budgeted a higher disinvestment target for 2019-20 of ₹1.05 lakh crore compared to the ₹80,000 crore budgeted in the previous year. Disinvestment is defined as the action of an organisation or government selling or liquidating an asset or subsidiary.
  6. Apart from this, the government has budgeted a dividend from the Reserve Bank of India amounting to about ₹90,000 crore.

Budget Briefs: Policy Measures to promote Growth and Employment Generation in Indian Economy

The Tax Policy Measures in the direction of Growth and Employment generation are:

  1. Profit-linked deduction was introduced for start-ups.
  2. The scope of investment-linked deduction was broadened by including certain new sectors including infrastructure which are critical to growth.
  3. Investment allowance and higher additional depreciation was provided for undertakings set up in backward regions of states of Andhra Pradesh, Bihar, Telangana and West Bengal.
  4. Incentive for employment generation was broadened and the conditions for eligibility to claim the incentive were relaxed.
  5. Benefit was provided for computation of MAT liability and carry forward of loss for companies under Insolvency and Bankruptcy code (IBC).
  6. Safe Harbour provisions were further liberalised to align with industry standards.
  7. Scope of domestic transfer pricing provisions was restricted only for transactions between enterprises having profit-linked deductions.
  8. Pass through status was provided to Category I & II Alternative Investment Funds (AIFs).
  9. The time period for carry forward of MAT credit was increased from 10 to 15 years.

Budget Briefs: Tax break to rev up electric vehicle sales

  1. The Government has proposed a slew of measures to boost electric vehicles(EVs).
  2. The government has already moved to the Goods and Services tax (GST) council to lower the GST rate on electric vehicles from 12% to 5%.
  3. Besides, the government will also give an additional tax benefit of Rs 1.5 lakh on the interest paid on loans taken for the purchase of EVs. This  amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicles.
  4. Finance Minister has also allocated Rs 10,000 crore to the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme for faster adoption of electric vehicles. The scheme will be implemented over a period of three years with effect from 1st April 2019.
  5. The main objectives of the scheme are a) encourage faster adoption of Electric and hybrid vehicle by way of offering upfront Incentive on purchase of Electric vehicles and b) establish necessary charging Infrastructure for electric vehicles.
  6. The FAME II is an expanded version of FAME I, launched in 2015 which aimed to support hybrid/electric vehicles market development and Manufacturing ecosystem.
  7. The FAME scheme is part of the National Electric Mobility Mission Plan (NEMMP).It aims to achieve national fuel security by promoting hybrid and electric vehicles in the country.

Budget Briefs:India to move towards harnessing its space capability commercially,New Space India Limited (NSIL) incorporated towards this end

  1. Finance minister has said that New Space India Limited (NSIL) has been incorporated as a new commercial arm of the Department of Space.
  2. The Company will spearhead commercialization of various space products including production of launch vehicles, transfer of technologies and marketing of space products.
  3. The new company will be licensed by the DoS/ Isro, which will in turn sub-license the technology and products to industries. The role of this new company will be different from Antrix, Isro’s commercial arm as the latter is only involved in commercial launches of foreign satellites.

Budget Briefs: Government to encourage and facilitate role of women in India’s growth story

  1. The government has proposed to expand the women self help groups (SHGs) interest subvention programme to all districts.
  2. The minister has proposed that for every verified women Self Help Group (SHG) member,having a Jan Dhan Bank Account an overdraft of Rs.5,000 will be allowed.
  3. One woman in every SHG will also be made eligible for a loan up to Rs. 1 lakh under the MUDRA Scheme.
  4. The minister has said that Government has supported and encouraged women entrepreneurship through various schemes such as MUDRA, Stand UP India and the Self Help Group (SHG) movement.
  5. Self-Help Groups (SHGs) are informal associations of people who choose to come together to find ways to improve their living conditions.
  6. It can be defined as self governed, peer controlled information group of people with similar socio-economic background and having a desire to collectively perform common purpose.

Budget Briefs:Government to bring greater ease of living through technology

  1. Finance minister has said that the government aims to bring greater ease of living in the lives of its citizens.
  2. This can be achieved through the use of technology as digital payments are gaining acceptance everywhere including by the Government.
  3. The Finance Minister also said that about 30 lakh workers have joined the Pradhan Mantri Shram Yogi Mandhan. The Scheme aims at providing Rs 3,000 per month as pension on attaining the age of 60 to crores of workers in unorganized and informal sectors.  
  4. The Finance Minister also said that around 35 crore LED bulbs have been distributed under UJALA Yojana leading to cost saving of Rs. 18,341 crore annually.
  5. The main objective of the Ujala scheme is to promote efficient lighting, enhance awareness on using efficient equipment which reduces electricity bills and helps in preserving the environment.
  6. The Electricity Distribution Company and Energy Efficiency Services Limited (EESL) is a public body which is implementing the programme.
  7. Further, the minister also said that Government will launch a massive programme of railway station modernization this year to make railway travel a pleasant and satisfying experience for the common citizen.

Budget Briefs: Government proposes measures to deepen Corporate Debt markets.

  1. Finance minister has said that the government will work with the Reserve Bank of India(RBI) and Securities and Exchange Board of India(SEBI) to deepen the corporate debt market with a special focus on infrastructure.
  2. The minister also announced that a Credit Guarantee Enhancement Corporation will be set up in the current fiscal year as part of the measures to deepen the bond market.
  3. Currently, the government runs a Credit Guarantee Fund Scheme for Micro and Small Enterprises to make available collateral free credit to these small firms.
  4. A trust under the scheme was set up in association with the Small Industries Development Bank of India (Sidbi) and guarantees loans up to ₹1 crore. Guarantees offered by the trust allow small and medium enterprises to borrow at cheaper rates.

Budget Briefs: Government proposes creation of a social stock exchange

  1. Finance Minister has announced the setting up of a Social Stock Exchange (SSE) under the Securities and Exchange Board of India (SEBI) for listing of organisations which work for social welfare.
  2. The minister said that the exchange would help social and voluntary organisations which work for social causes to raise capital as equity or debt or a unit of mutual fund.
  3. The minister said this will be to take the capital markets closer to masses and meet the various social welfare objectives related to inclusive growth and financial inclusion.
  4. Social Stock Exchanges(SSE) already exist in countries such as Singapore, UK among others. These countries allow firms operating in sectors such as health, environment and transportation to raise risk capital.

Budget Briefs: Providing access to safe and adequate drinking water to all Indians is a priority of the Government

  1. The Finance Minister has announced the Jal Jeevan Mission to provide potable water to every rural household by 2024.The newly constituted Jal Shakti ministry will helm the programme.
  2. This mission will focus on integrated demand and supply-side management of water at the local level including the creation of local infrastructure for source sustainability like (a)rainwater harvesting (b)groundwater recharge and (c)management of household wastewater for reuse in agriculture.
  3. The  Mission will converge with other Central and State Government Schemes to achieve its objectives of sustainable water supply management across the country.
  4. Besides using funds available under various Schemes, the government will also explore the possibility of using additional funds available under the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) for this purpose.
  5. Recently, the Centre has formed a new ‘Jal Shakti’ Ministry. It has been formed by merging the erstwhile Ministry of Water Resources, River Development and Ganga Rejuvenation and the Ministry of Drinking Water and Sanitation.

Budget Briefs:Government to consider issuing Aadhaar Card for NRIs with Indian Passports

  1. The Union Finance Minister has proposed to consider issuing Aadhaar Card for Non-Resident Indians (NRI) with Indian Passport.
  2. The minister has also proposed that the government will launch a Mission that will integrate India’s traditional artisans and their creative products with global markets. Wherever necessary patents and geographical indicators, will be obtained for them.
  3. She has also proposed that the IDEAS scheme will be revamped during the current financial year. Indian Development Assistance Scheme (IDEAS) provides concessional financing for projects and contributes to infrastructure development and capacity building in the recipient developing countries.
  4. The minister also said that Government is developing 17 iconic tourism sites into world class tourist destinations which will serve as a model for other tourism sites. These sites would enhance visitor experience which will lead to increase visits of both domestic and international tourists at these destination.
  5. The minister has also announced that with the objective of preserving rich tribal cultural heritage, a digital repository is being developed where documents, folk songs, photos and videos regarding their evolution, place of origin, lifestyle, architecture, education level, traditional art, folk dances and other anthropological details of the tribes in India will be stored. The repository will be further enriched and strengthened.

Budget Briefs: Foreign Direct Investment (FDI)

  1. The Finance Minister has said that Foreign Direct Investment (FDI) inflows into India have remained robust despite global headwinds.
  2. She stated that according to UNCTAD’s World Investment Report 2019.  India’s FDI inflows in 2018-19 remained strong at US$ 64.375 billion marking a 6% growth over the previous year.
  3. She has also proposed a 100% foreign direct investment (FDI) in the insurance intermediaries in the Union Budget 2019.The FDI limit is set at 49% currently.
  4. Insurance intermediaries are the backbone of the industry. They help in distribution of insurance policies and also help customers get attractive rates for the products.
  5. Further, the Government will also examine suggestions of further opening up of FDI in aviation, media (animation, AVGC) and insurance sectors in consultation with all stakeholders.
  6. The minister has said local sourcing norms will be eased for FDI in Single Brand Retail sector.
  7. Single brand retail are expected to sell all its products under only one label across its stores such as Think Levi’s, Starbucks or Ikea. While a multi-brand retail store is like your typical Big Bazaar which sweeps many brands under one roof.
  8. The government is also contemplating organizing an Annual Global Investors Meet in India using National Infrastructure Investment Fund (NIIF) as an anchor to get all three sets of global players-industrialists, sovereign wealth funds and top digital technology/venture funds.

Budget Briefs: Agriculture

  1. Finance Minister has said that the government will invest widely in agriculture infrastructure and support private entrepreneurship for value addition in farm sector.
  2. The government has also proposed a Pradhan Mantri Matsya Sampada Yojana (PMMSY) to establish a robust fisheries management framework and check gaps in the value chain.
  3. The government has proposed to increase budget allocation for the Ministry of Agriculture and Farmers Welfare by over 78 % to 39 lakh crore rupees for the current fiscal. Out of the total amount,75,000 crore rupees will be for the Pradhan Mantri Kisan Samman Nidhi.
  4. The government has also proposed setting up of 10,000 new Farmer Producer Organisations(FPOs) to ensure economies of scale for farmers over the next five years.
  5. The government will also work with state governments to see that farmers get a fair price through electronic National Agriculture Market (e-NAM) that was launched in 2016.
  6. The finance minister also announced a proposal of zero budget farming .Zero budget farming is a set of farming methods that involve zero credit for growing agricultural produce and no use of chemical fertilizers.
  7. The minister has also said that farmers should be encouraged to adopt dairying by creating infrastructure for cattle feed manufacturing, milk procurement, processing and marketing. She said this would turn “annadata” (a reference to farmers) into “urjadata” (energy provider).

Budget Briefs: Government to push ‘One Nation One Card’ to enable seamless mobility

  1. In the Budget speech, the finance minister has hailed the benefits that were provided by National Common Mobility Card(NCMC).
  2. National Common Mobility Card (NCMC) also known as One Nation One Card is an inter-operable transport card conceived by the Ministry of Housing and Urban Affairs of the Government of India.
  3. The transport card enables the user to pay for travel, toll duties ( toll tax) , retail shopping and withdraw money.
  4. The card is enabled through the RuPay card mechanism. The NCMC card is issuable as a prepaid, debit, or credit RuPay card from partnered banks such as the State Bank of India, Bank of india, Punjab National Bank, and others.
  5. The card will be supported by Swagat which is an indigenously developed Automatic Fare Collection Gate and Sweekar that is an Open Loop Automatic Fare Collection System that were both launched by Prime Minister on 4th March,2019.

Budget Briefs-10-point Vision for the decade

Finance Minister has flagged ten points of the Government’s ‘Vision for the Decade’:

  1. Building physical and social infrastructure;
  2. Digital India reaching every sector of the economy;
  3. Pollution free India with green Mother Earth and Blue Skies;
  4. Make in India with particular emphasis on MSMEs, Start-ups, Defence manufacturing, automobiles, electronics, fabs and batteries, and medical devices;
  5. Water, water management, clean Rivers;
  6. Blue Economy;
  7. Space programmes. Gaganyan, Chandrayan and Satellite programmes;
  8. Self-sufficiency and export of food-grains, pulses, oilseeds, fruits and vegetables;
  9. Healthy society – Ayushman Bharat, well-nourished women & children. Safety of citizens;
  10. Team India with Jan Bhagidari. Minimum Government Maximum Governance.
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