Post on 19-Aug-2020
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ARTH Vol 21 (11th JUNE -20th JUNE)
1. RBI sets up 5-member Internal working group headed by P K Mohanty
The Reserve Bank of India (RBI) has set up a 5-member internal working group
(IWG) headed by Prasanna Kumar (PK) Mohanty to review ownership guidelines
and corporate structure for private banks in light of recent developments in the
banking sector.
Keypoints-
• The RBI has asked the panel to review the guidelines and licensing
regulations regarding ownership, promoters’ holding, requirement of
dilution, control and voting rights in private banks.
• The group will examine and review the eligibility criteria for individuals or
entities which/who apply for a banking license.
• Similarly, after issuance of the license at the initial/licensing stage, the Panel
will look into the existing provisions relating to the promoter’s shares and
make appropriate recommendations.
• The committee will also examine the present regulations on holding of
financial subsidiaries through a non-operative financial holding company
(NOFHC) and suggest solutions of migrating all banks to a uniform
regulation.
• This recent development of reviewing the promoter’s stake in private sector
banks is significant as the promoters of Kotak Mahindra Bank had a stake in
the out-of-court settlement between the RBI and the bank. The RBI limited
the voting rights to 15 %, allowing promoters to hold a 26 % stake in Kotak
Bank.
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• According to the current rules the promoter’s share will be reduced to 40% for
the three years after the bank commences operations, to 10% for 10 years
and 15% for 15 years.
2. India ranked 43rd on IMD's World Competitiveness Index
India continues to remain ranked 43rd on an annual World Competitiveness Index
with some traditional weaknesses like poor infrastructure and insufficient education
investment keeping its ranking low.
Keypoints-
The index is compiled by Institute for Management Development (IMD).
• Singapore has retained its top position on the 63-nation list.
• Denmark has moved up to the second position (from 8th last year),
Switzerland has gained one place to rank 3rd, the Netherlands has retained its
4th place and Hong Kong has slipped to the fifth place (from 2nd in 2019).
• The US has moved down to 10th place (from 3rd last year), while China has
also slipped from 14th to 20th place. Among the BRICS nations, India is
ranked second after China, followed by Russia (50th), Brazil (56th) and
South Africa (59th).
• India was ranked 41st on the IMD World Competitiveness Ranking, being
produced by the business school based in Switzerland and Singapore every
year since 1989, but had slipped to 45th in 2017 before improving to 44th in
2018 and then to 43rd in 2019.
• While its overall position has remained unchanged in the 2020 list, it has
recorded improvements in areas like long-term employment growth, current
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account balance, high-tech exports, foreign currency reserves, public
expenditure on education, political stability and overall productivity.
• However, it has moved down in areas like exchange rate stability, real GDP
growth, competition legislation and taxes.
• India continues to struggle on the list and the recent country rating
downgrade by Moody's reflects the uncertainties regarding the economy's
future.
• In ranking, the emphasize the traditional weaknesses of India -- poor
infrastructure, an important deficit in education investment, and a health
system that does not reach everybody.
• According to the report, for India to follow the path of China, it must stress its
intangible infrastructure.
• With the exception of Singapore, the Philippines, Taiwan and the Korean
Republic, most Asian economies dropped in rankings this year.
• The reason for the Asian economies' less stellar performance as a region, this
year is partly the result of the trade frictions between China and the US,
particularly because these economies are highly dependent on trade with
China.
• About Singapore, its position is largely driven by the relative ease of setting
up business, availability of skilled labour and its cutting-edge technological
infrastructure.
• In the ASEAN countries included in the survey, only Singapore and Thailand
have a positive performance in the effectiveness of the health
infrastructure.
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3. Around 45 mln pushed into global food insecurity- FAO report
According to a recent report, titled Policy Brief: The Impact of COVID-19 on Food
Security and Nutrition by the Food and Agriculture Organization (FAO),almost 45
million people were pushed into acute food insecurity since February 2020
because of the novel coronavirus disease (COVID-19) pandemic.
Keypoints-
• Almost 33 million of those who will be pushed into food insecurity reside in
South and Southeast Asia, with the remainder in Sub-Saharan Africa.
• The pandemic and measures to curb it may result in $8.5 trillion being shaved
off the global economy in the next two years.
• Over 49 million may fall into extreme poverty as well, with the most-affected
region being, again, Sub-Saharan Africa. Measures to curb the disease,
including lockdowns in several parts of the world, have disrupted entire food
supply chains.
• Deteriorating employment conditions due to COVID-19 have led to this
situation.
• Slowing harvests in some parts of the world left millions of seasonal
workers without livelihoods, while constraining transport of food to markets.
• Even before the pandemic, more than 820 million were already identified as
chronically food insecure in 2019.
4. RBI relaxes norms for the deployment of ATMs by white-label players
The Reserve Bank of India (RBI) has relaxed the deployment norms of automated
teller machines (ATMs) by white-label players, who will now not need to put up
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thousands of units every year. The central bank is for manageable annual targets, a
major departure from the stiff run-rates set under the licence terms in 2012.
Keypoint-
• The central bank has not announced a policy change, but industry sources said it
had been conveyed to deployers that they would now be evaluated on an
annual basis with more realistic targets and the kind of cities (from tier-I to
tier-VI) in which ATMs were put up. These targets are confidential and player-
specific.
• Of the eight WLATM players, Tata Communications Payment Solutions is
the largest deployer with 8,290 ATMs,.
White-label ATMs (WLATMs).
ATMs set up, owned, and operated by non-banks are called white-
label ATMs (WLATMs). Non-bank ATM operators are authorised under the Payment
and Settlement Systems Act, 2007, by the RBI. Deployments by white-label ATM
(WLATM) firms have been poor at 23,597 units, seven years after they began
operations. This is way off the 1,000-25,000 ATMs that would have been added
annually by each operator based on the schemes they had opted for.
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5. RBI releases discussion paper on 'Governance in Commercial Banks
With an objective to improve the quality of financial intermediaries, the Reserve
Bank of India (RBI) released a discussion paper on ‘Governance in Commercial
Banks in India' for public comments. The objective of the discussion paper is to align
the current regulatory framework with global best practices. The lender also said
that improving the quality of governance in financial intermediaries is an
important determinant of efficiency in the allocation of resources, protection of
depositors’ interest and maintaining financial stability.
Keypoints-
• The discussion paper aims to empower the board of directors to set the
culture and values of the organisation, recognise and manage conflicts of
interest, set the appetite for risk and manage risks within the appetite and
improve the supervisory oversight of senior management.
• Empower the assurance functions through various interventions.
• To achieve clear division of responsibilities between the board and the
management. RBI said that a management functionary who is not a
promoter or major shareholder can be a whole-time director (WTD) or chief
executive officer (CEO) of a bank for 15 consecutive years. Thereafter, the
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individual shall be eligible for re-appointment as WTD or CEO only after the
expiration of three years.
• During this three-year period the individual shall not be appointed or
associated with the bank in any capacity, either directly or indirectly,
advisory or otherwise.
• To build a robust culture of sound governance practice, professional
management of banks and to adopt the principle of separating ownership
from management, it is desirable to limit the tenure of the whole-time
directors (WTD) or chief executive officers (CEO).
• 10 years is time limit for a promoter or major shareholder of a bank as WTD
or CEO of the bank to stabilise its operations and to transition the
managerial leadership to a professional management.
• On the date of issuance of the guideline or directions on the matter by the
Reserve Bank, banks with WTDs or CEO who have completed 10 or 15 years
shall have two years or upto the expiry of the current tenure, whichever is
later, to identify and appoint a successor.
6. NSDC prepares a platform to ensure speedy skilling of migrant returnees
The National Skill Development Corporation (NSDC) has prepared a platform to
ensure speedy skilling of migrant returnees in 116 most-affected districts, where
states are struggling to rehabilitate livelihoods. The list of districts correspond to the
‘Atmanirbhar districts’ planned by the Centre across Uttar Pradesh, Bihar, Madhya
Pradesh, Jharkhand, Odisha, and Rajasthan. The government has directed that work
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under the Mahatma Gandhi National Rural Employment Guarantee Act be fast-
tracked in these states, along with more loans for small businesses.
7. FDI inflows into India may dip sharply in 2020: UNCTAD
According to the United Nations Conference on Trade and Development (UNCTAD),
Foreign direct investment (FDI) into India may decline sharply in 2020 because of
the impact of the coronavirus pandemic and the consequent lockdown measures,
supply chain disruptions and economic slowdown even as FDI inflows to Asia’s third
largest economy jumped over 20% to $51 billion in 2019.
Keypoints-
• According to the latest World Investment Report 2020 by UNCTAD, India
jumped from 12th position in 2018 to 9th position in 2019 among the world’s
largest FDI recipient.
• In South Asia, FDI is also expected to contract sharply. In India, the biggest
FDI host in the sub-region, with more than 70% of inward stock, the number
of greenfield investment announcements declined by 4% in the first quarter,
and M&As contracted by 58%.
• However, UNCTAD said India’s economy could prove the most resilient in
the region. FDI to India has been on a long-term growth trend. Positive, albeit
lower, economic growth in the post-pandemic period and India’s large market will
continue to attract market-seeking investments to the country.
• The report said India’s most sought-after industries, which include
professional services and the digital economy, could see a faster rebound as
global venture capital firms and technology companies continue to show
interest in India’s market through acquisitions.
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• Investors concluded deals worth over $650 million in the first quarter of 2020,
mostly in the digital sector.
• According to the report, global FDI flows are forecast to decrease by up to
40% in 2020, from their 2019 value of $1.54 trillion. This would bring FDI
below $1 trillion for the first time since 2005.
• In addition, FDI is projected to decrease by a further 5% to 10% in 2021 and to
initiate a recovery in 2022.
• Investment flows are expected to slowly recover starting 2022, led by global
value chains (GVCs) restructuring for resilience, replenishment of capital
stock and recovery of the global economy.
8. Urjit Patel, former RBI governor, appointed chairman of NIPFP
• Former governor of Reserve Bank of India (RBI) Urjit Patel has been
appointed as the chairman of the New Delhi Based economic think tank
National Institute of Public Finance and Policy (NIPFP) for a period of four
years for a four year term commencing June 22, 2020.
• The governing body of NIPFP met under the outgoing chairman Vijay Kelkar
where Patel’s name was cleared.
• The chairman’s role is advisory in nature and he does not interfere in day
today functioning of the institution. He chairs the board meetings which are
held at least three to four times in a year.
• The governing body of NIPFP comprises of three representatives of the
Ministry of Finance, one representative of the Niti Aayog, one
representative of the Reserve Bank of India, three representatives of
sponsoring state governments, three distinguished economists, three
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heads of sister research institutions, and members of other sponsoring
agencies and invitees.
9. India joins GPAI as founding member
India joined the Global Partnership on Artificial Intelligence (GPAI) as a founding
member to support the responsible and human-centric development and use of AI.
GPAI is an international and multi-stakeholder initiative to guide the responsible
development and use of AI, grounded in human rights, inclusion, diversity,
innovation, and economic growth.
Keypoints-
• With this, India has joined the league of leading economies including the US, the
UK, EU, Australia, Canada, France, Germany, Italy, Japan, Mexico, New
Zealand, Republic of Korea, Singapore to launch the global partnership.
• This is a first initiative of its kind to evolve better understanding of the
challenges and opportunities around AI using the experience and diversity of
participating countries.
• To achieve this goal, the initiative will look to bridge the gap between theory
and practice on AI by supporting cutting-edge research and applied
activities.
• In collaboration with partners and international organisations, GPAI will bring
together leading experts from industry, civil society, governments, and
academia to collaborate to promote responsible evolution of AI and will also
evolve methodologies to show how AI can be leveraged to better respond to the
present global crisis around Covid-19.
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10. Modi government to expand coverage of this start-up scheme- over 10 lakhs
to benefit
• The government will expand the coverage of its PM Van Dhan Yojana from the
current 18,000 SHGs to 50,000 Van Dhan SHGs.
• Van Dhan Start-ups, established under the scheme initiated by TRIFED under
the Ministry of Tribal Affairs has emerged as a source of employment
generation for tribal gatherers and forest dwellers and also the home-bound
labour and artisans.
• The aim of the Start-ups scheme is to treble the coverage to 10 lakh tribal
gatherers through the Covid-19 relief plan of the Ministry of Tribal Affairs.
• 1205 Tribal Enterprises have been established to provide employment
opportunities to 3.6 lakh tribal gatherers and 18000 Self-help groups in 22
States.
• The tribal enterprises have been able to create market linkages, transforming
tribal gatherers into entrepreneurs.
• States like Nagaland and Rajasthan have been the beneficiaries of this
scheme. It has ensured that the proceeds from the sales of these value-added
products go to the tribals directly.
• A TRIFED website was also commissioned for a trial run till 30 June (before
the formal launch by the Union Minister for Tribal Affairs) and a procurement
platform will be launched by 30 July 2020.
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PM Van Dhan Yojana
The Van Dhan Scheme is an initiative of the Ministry of Tribal Affairs and TRIFED. It
was launched on 14th April, 2018 and seeks to improve tribal incomes through
value addition of tribal products.
The scheme will be implemented through Ministry of Tribal Affairs as Nodal
Department at the Central Level and TRIFED as Nodal Agency at the National
Level. At State level, the State Nodal Agency for MFPs and the District collectors
are envisaged to play a pivot role in scheme implementation at grassroot level.
Locally the Kendras are proposed to be managed by a Managing Committee (an
SHG) consisting of representatives of Van Dhan SHGs in the cluster.
11.FIEO for fastening process of engagement with EU to seal free-trade pact
expeditiously
Exporters' body FIEO has urged Commerce and Indstry to fast-track the process of
engagement with the European Union on the long-pending free-trade agreement
(FTA) with India and conclude it in an expeditious manner. India and the EU are
negotiating a comprehensive FTA, officially dubbed as the Bilateral Trade and
Investment Agreement (BTIA), but the talks are stalled since May 2013 due to
differences on several matters.The EU is the largest market of our exports accounting
for 18 per cent of our exports. Vietnam is a close competitor of India in the market as
our exports to the EU.
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12. Sebi panel suggests tweaks to enhance regulator's enforcement function
The enforcement function of the Securities and Exchange Board of India (Sebi),
which is one its most critical, is set for an overhaul as a high-level committee led
by A R Dave, a retired Supreme Court judge, submitted a 424-page report aimed at
the enforcement mechanism.
Keypoints-
• The committee has considered various issues pertaining to the enforcement
mechanism of the board (Sebi) and made recommendations thereon to make
it more robust and efficient.
• The recommendations seek to introduce tactical, strategic, and systemic
changes to the enforcement process to improve capabilities of Sebi in
protecting investors and indicting defaulters.
• The panel has identified four areas for enhancing the enforcement function-
these are intermediary regulations, recovery of dues, quantification of ill-
gotten gains, and synergies between the securities and insolvency laws.
• The implementation of the panel recommendation would be akin to
upgrading the operating system for Sebi.
• The panel added that the processes followed by Sebi, under the
Intermediaries Regulation, 2008, are “unjustifiably drawn-out”.
• They have underscored the need to conclude a proceeding against an
intermediary in a timely manner. The intermediary could be a stock
exchange, depository, clearing corporation, mutual fund, or broker.
• Sebi is required to adhere to principles of natural justice in the course of its
proceedings against an intermediary. However, such adherence cannot be
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meant to extend the application to such an extent that permits holding the
system hostage at the cost of compromising the very interests of investors.
• It has called for the process leading to the issuance of a final order against
an intermediary to be faster.
• On the issue of recovering dues such as fees, penalties, or disgorgement
amounts, the mechanism followed by Sebi’s recovery officer needs several
modifications, given existing provisions don’t recognise concepts like clubbing
of income or e-auctions.
• On the area of disproportionate gains made by a violator, the panel has said
Sebi could make use of financial economics.
• The panel has cited examples of techniques used in jurisdictions such as
the US, acknowledging how difficult it is to quantify potential losses caused
to a shareholder due to securities fraud.
• The committee has examined the insolvency, recovery, and securities laws
jurisprudence of India and abroad, and suggested suitable changes in the
code to ensure the insolvency law is not used as a refuge by defaulters,
thereby protecting the interest of investors.
13. Union Minister launches R&D Portal “SATYABHAMA”
Union Minister for Coal, Mines and Parliamentary Affairs, Pralhad Joshi has
launched R&D Portal “Science and Technology Yojana for Aatmanirbhar Bharat in
Mining Advancement (SATYABHAMA)”. The portal has been launched for the prpose
of Science and Technology Programme Scheme of Ministry of Mines.
Keypoints-
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• The newly launched portal will increase efficiency as well as effectiveness in
the implementation of the Scheme as it allows online submission of project
proposals along with monitoring of the projects and utilization of
funds/grants.
• This R&D Portal SATYABHAMA has been designed,
developed and implemented by National Informatics Centre (NIC), Mines
Informatics Division.
• It has been integrated with NGO Darpan Portal of NITI Aayog. It also accepts
the researchers’ progress reports and Final Technical Reports of the
projects in the electronic format.
14.FATF: Indian officials attend virtual EAG plenary meet
Indian officials, including representatives from enforcement agencies attended the
virtual 32nd special Eurasian Group on Combating Money Laundering and
Financing of Terrorism (EAG) plenary meeting, under the aegis of the Financial Action
Task Force. The EAG is a regional body comprising nine countries: India, Russia,
China, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and
Belarus. It is an associate member of the FATF.
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15. SIDBI signs pact with urban affairs ministry to implement PM SVANidhi for 50 lakh street
vendors
PM SVANidhi is a central scheme fully funded by the ministry with the objective to
facilitate working capital loans to street vendors, thus enabling them to emerge
self-reliant after the impact of the Covid-19 pandemic and revive their livelihood
activity through formal access to credit.
KEYPOINTS-
• MoHUA has engaged SIDBI as the implementation agency for PM Street
Vendors’ AtmaNirbhar Nidhi.
• The Ministry of Housing and Urban Affairs (MoHUA) has signed a pact with
Small Industries Development Bank of India (Sidbi) to implement PM Street
Vendor's AtmaNirbhar Nidhi (PM SVANidhi) - a Special Micro-Credit Facility
for Street Vendors.
• The Ministry of Housing & Urban Affairs (of MoHUA) signed a Memorandum
of Understanding (MoU) with SIDBI to this effect.
• According to the MoU terms, SIDBI will implement the PM SVANidhi scheme
under the guidance of MoHUA.
• It will also manage the credit guarantee to the lending institutions through
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
• A customised and integrated IT platform will be developed and maintained
to provide end-to-end solutions, including documentation of all the
processes.
• A portal and a mobile app would also be made available to ensure
engagement and information flow between Urban Local Bodies (ULBs),
lending institutions, digital payment aggregators, and other stakeholders.
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• SIDBI will leverage the network of lending Institutions like Scheduled
Commercials Banks (SCBs), Non-Bank Finance Companies (NBFCs), Micro
Finance Institutions (MFIs), Co-operative Banks, Small Finance Banks
(SFBs) and Regional Rural Banks (RRBs) for the implementation of the credit
scheme.
• SIDBI will also provide a Project Management Unit (PMU), comprising of
domain experts in training/ capacity building, project and platform
management, Information Education and Communication (IEC), banking,
NBFC and MFI sectors for the period of PM SVANidhi, which is up till March
2022.
• Earlier, the MoHUA had launched the PM SVANidhi on June 1 for providing
affordable working capital loan to street vendors to help them resume their
livelihoods that have been adversely affected due to coronavirus lockdown.
• This scheme targets to benefit over 50 lakh street vendors. Under the
Scheme, the vendors can avail a working capital loan of up to Rs 10,000
which is repayable in monthly installments in tenure of one year.
• An interest subsidy @ 7 per cent per annum will be credited to the bank
accounts of beneficiaries through direct benefit transfer on a quarterly basis
on timely or early repayment of the loans. There will be no penalty on the
early repayment of loans.
• The scheme promotes digital transactions through cashback incentives up to
an amount of Rs 100 per month. Moreover, the vendors can achieve their
ambition of going up on the economic ladder by availing the facility of escalation
of the credit limit on timely or early repayment of the loan.
16.NIRF India Rankings 2020
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In the National Institutional Ranking Framework list of 2020, released by the
Human Resource Development Minister Maulana Azad Institute of Dental
Sciences, Delhi has topped the list of dental institutes in the county. This is the first
time that dental colleges have been ranked under NIRF. The Indian Institute of
Technology (IIT) Madras has topped the list of higher education institutes. IISc
Bengaluru has clinched second and IIT-Delhi has been ranked third in the HRD
ministry’s national ranking of higher instittes.
Miranda House of Delhi University has secured the top rank among colleges in
India for the fourth consecutive year in the NIRF Rankings 2020. The AIIMS New
Delhi has been named the foremost medical sciences institute in the country.
National Law School of India University, Bengaluru has topped the list for ‘Law’
Discipline.
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NIRF RANKING
The National Institutional Ranking Framework (NIRF) was launched by the Minister
of Human Resource Development on 29th September 2015.
This framework outlines a methodology to rank institutions across the country.
The parameters broadly cover
o Teaching, Learning and Resources,
o Research and Professional Practices,
o Graduation Outcomes,
o Outreach and Inclusivity and
o Perception.
NIRF rankings 2020 has been given under 9 categories: Overall, Universities,
Engineering, Medical, Management, Law, Architecture, Pharmacy and Colleges,
Dentist.
17.Nature Index 2020
India has ranked twelfth, globally in science research output as per the recently-
released Nature Index table 2020. This nature index is not linked with nature
conservation. It has only mentioned the rankings of research institutes in natural
and physical science. The top five positions have gone to the United States of
America, China, Germany, United Kingdom and Japan.
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Keypoints-
• The Nature Index is a database of author affiliation information collated from
research articles published in an independently selected group of 82 high-
quality science journals.
• It serves as an indicator of high-quality research in the Natural and Physical
Sciences.
• The database is compiled by Nature Research, a division of the international
scientific publishing company Springer Nature that publishes academic
journals.
• The index provides a close to the real-time proxy of high-quality research
output and collaboration at the institutional, national and regional level.
18. Union Finance Ministry proposes to decriminalise host of minor offences under 19
legislations
The Finance Ministry has proposed to decriminalise a host of minor offences,
including those relating to cheque bounce and repayment of loans, in as many as
19 legislations to help businesses tide over the crisis caused by the coronavirus
outbreak. The 19 legislations include Negotiable Instruments Act (cheque bounce),
SARFAESI Act (repayment of bank loans), LIC Act, PFRDA Act, RBI Act, NHB Act,
Banking Regulation Act and Chit Funds Act.
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Keypoints-
• Actions taken for decriminalisation of minor offences are expected to go a,”
long way in improving ease of doing business and helping unclog the court
system and prisons.
• It would also be a significant step in the Government of India’s objective of
achieving ‘Sabka Saath, Sabka Vikas and Sabka Vishwas’.
• Based on the feedback, the Department of Financial Services will take a call
as to a particular section should remain a criminal offence or that should be
suitably modified to decriminalise to improve ease of doing business.
• The other legislations listed in the document for consultation for suitable
amendments to decriminalise minor offences are Insurance Act, Payment
and Settlements Systems Act, NABARD Act, State Financial Corporations
Act, Credit Information Companies (Regulation) Act, and Factoring
Regulation Act.
• The Actuaries Act, the General Insurance Business (Nationalisation) Act,
the Banning of Unregulated Deposit Schemes Act, the DICGC Act and the
Prize Chits and Money Circulation Schemes (Banning) Act are also among
the legislations.
19. India's forex reserves cross $500 billion-mark
According to the data released by the Reserve Bank of India (RBI), India’s forex
reserves have now crossed the $ 500 billion mark. The reserves rose to $ 501.7
billion, marking an increase of $ 8.22 billion in a week. Reserves had surged $3.43
billion to a fresh all-time high of $493.48 billion in the week-ended May 29. Forex
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reserves consist of foreign currency assets, gold reserves, special drawing rights
and reserves in IMF. Of these, foreign currency assets are the biggest component
followed by gold.
20.Sahakar Mitra Scheme
The Union Ministry for Agriculture has launched Sahakar Mitra Scheme on Internship
Programme (SIP). The scheme is an initiative by the National Cooperative
Development Corporation (NCDC), the cooperative sector development finance
organization.
Keypoints-
• It aims to help cooperative institutions access innovative ideas of young
professionals while the interns will gain experience of working in the field to
be self-reliant.
• The scheme is expected to assist cooperative institutions to access new and
innovative ideas of young professionals while the interns gain experience
of working in the field giving the confidence to be self-reliant.
• Professional graduates in disciplines such as Agriculture and allied areas,
IT etc. will be eligible for an internship. Professionals who are pursuing or have
completed their MBA degrees in Agri-business, Cooperation, Finance,
International Trade, Forestry, Rural Development, Project Management etc.
will also be eligible.
• Each intern will get financial support over a 4 months internship period.
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21.Aizawl’s Rajiv Gandhi Stadium to be upgraded as KISCE under Khelo
India Scheme
The Union Sports Minister Kiren Rijiju announced that Aizawl’s Rajiv Gandhi
Stadium will be upgraded as Khelo India State Centre of Excellence under
the Khelo India Scheme. The Ministry plans to establish one KISCE in each
state and union territory, with an effort to create a robust sporting ecosystem in
the entire country. This will be a platform for multiplying existing talents in the
region towards India’s dream of excellence in the Olympics.
22.AIIB approves USD 750 million loan to India for Covid-19 response
Beijing-based Asian Infrastructure Investment Bank (AIIB) said it has approved a
USD 750 million (around Rs 5,714 crore) loan to India to help the government
strengthen its battle against the adverse impact of Covid-19 on poor and
vulnerable households. The budgetary support will go toward bolstering economic
aid for businesses, including for the informal sector, expanding social safety nets
for the needy, and strengthening the country’s health care systems. The current
loan will be the second for India under AIIB’s Covid-19 Crisis Recovery Facility
(CRF).While AIIB does not have a regular instrument for policy-based financing, the
Bank is extending such financing on an exceptional basis under the CRF to
support its members through projects cofinanced with the World Bank or the
Asian Development Bank.
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23.Odisha gets only 1.2 per cent of Centre’s irrigation aid
While the State has the potential to bring more area under micro-irrigation scheme
of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY- PDMC) to enhance water
use efficiency, its coverage in last five years has been only around 29,000
hectares (ha) of land. The Ministry of Agriculture and Farmers’ Empowerment has
made an allocation of `45 crore for Odisha under Centrally sponsored ‘Per Drop
More Crop’ component of PMKSY- PDMC for 2020-21 financial year, which is only
1.2 per cent of the Central budget of `3,445 crore under the scheme. States like
Andhra Pradesh, Karnataka, Maharashtra and Tamil Nadu have cornered `400
crore each.
Odisha has got `45 cr by Ministry of Agriculture under PMKSY- PDMC
Better performing states AP, Karnataka, Maharashtra and TN have cornered `400
crore each. So far, micro irrigation funds have been released to Andhra Pradesh and
Tamil Nadu for Rs 616.14 crore and for Rs 478.79 crore, respectively, through
NABARD. The area covered under these projects is 1.021 lakh hectare in Andhra
Pradesh and 1.76 lakh hectare in Tamil Nadu. During the last five years (2015-16 to
2019-20), an area of 46.96 lakh hectare has been covered under micro irrigation
through PMKSY-PDMC.
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24. Asian Development Outlook- The recent report
According to a new set of forecasts from the Asian Development Bank (ADB),
developing Asia will barely grow in 2020 as containment measures to address the
coronavirus disease (COVID-19) pandemic hamper economic activity and weaken
external demand. In a regular supplement to its annual flagship economic
publication, the Asian Development Outlook (ADO) 2020).
Keypoints-
• ADB forecasts growth of 0.1% for the region in 2020. This is down from the
2.2% forecast in April and would be the slowest growth for the region since
1961.
• Growth in 2021 is expected to rise to 6.2%, as forecast in April. Gross
domestic product (GDP) levels in 2021 will remain below what had been
envisioned and below pre-crisis trends.
• Excluding the newly industrialized economies of Hong Kong, China; the
Republic of Korea; Singapore; and Taipei,China, developing Asia is forecast
to grow 0.4% this year and 6.6% in 2021.
• Risks to the outlook remain on the downside.
• East Asia is forecast to grow 1.3% in 2020—the only subregion to experience
growth this year—while growth in 2021 will recover to 6.8%. Growth in the PRC
is forecast at 1.8% this year and 7.4% in 2021, compared to the April estimates
of 2.3% and 7.3%, respectively.
• Hit hard by COVID-19, South Asia is forecast to contract by 3.0% in 2020,
compared to 4.1% growth predicted in April. Growth prospects for 2021 are
revised down to 4.9% from 6.0%.
• India’s economy is forecast to contract by 4.0% in fiscal year (FY) 2020,
ending on 31 March 2021, before growing 5.0% in FY2021.
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• Central Asia’s economic activity is expected to contract by 0.5% compared to
the 2.8% growth forecast in April due to trade disruptions and low oil prices.
Growth is forecast to recover to 4.2% in 2021.
• Inflation for developing Asia is forecast at 2.9% in 2020, down from a forecast of
3.2% in April, reflecting depressed demand and lower oil prices. In 2021,
inflation is expected to ease to 2.4%.
25. Jal Shakti bats for control of 50% finance panel grants for rural local bodies
The Ministry of Jal Shakti has called for the Finance Commission grants for rural
and urban local bodies, currently under the administrative control of the Finance
Ministry, to be placed with three different ministries. The FC-XV had recommended a
Rs 90,000-crore grant for local bodies in 2020-21. Of this, Rs 29,250 crore is for
urban local bodies and Rs 60,750 crore is for rural local bodies. The grant for rural
local bodies is further bifurcated as 50 per cent basic or untied grant, and 50 per
cent tied grant (for sanitation and maintenance of ODF status; and supply of
drinking water, rain water harvesting and water recycling). Ministry of Jal Shakti
has proposed to get control of the 50 per cent tied grant.
Keypoints-
• Currently, Finance Commission grants for urban and rural local bodies come
under the Finance Ministry which, on the recommendations of the Ministry
of Panchayati Raj, releases grants for Panchayati Raj Institutions (PRIs) to
state governments in two instalments. The same is credited by the state
governments to their respective rural local bodies. However, the Ministry of Jal
Shakti now has proposed a new mechanism.
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• The ministry further suggested that other half of the Finance Commission
Grants to PRIs should be placed with the Ministry of Panchayati Raj.
• GPDP stands for Gram Panchayat Development Plan, which are supposed to
be prepared by the Gram Panchayats to achieve the goal of economic
development and social justice.
• FC Grants to ULBs (urban local bodies) may be placed with M/o Housing &
Urban Development. ULBs to prepare their five-year plan with reform targets
and funding should be linked to specific outputs/performance.”
• The ministry pegged the requirement of an amount of about Rs 82,000 crore as
a part of “sectoral allocations for infrastructural development” to achieve
drinking water security.
JAL JEEVAN MISSION
Jal Jeevan Mission, a central government initiative under the Ministry of Jal Shakti,
aims to ensure access of piped water for every household in India. Earmarking Rs
3.5 trillion for Jal Jeevan Mission, the Centre and states would work towards it in
coming years. The mission’s goal is to provide to all households in rural India safe
and adequate water through individual household tap connections by 2024.The
Har Ghar Nal Se Jal programme was announced by Finance Minister Nirmala
Sitharaman in her Budget 2019-20 speech. This programme forms a crucial part of the
Jal Jeevan Mission. The programme aims to implement source sustainability
measures as mandatory elements, such as recharge and reuse through grey
water management, water conservation, and rain water harvesting. The Jal Jeevan
Mission will be based on a community approach to water. According to the
government, the mission will include information, education and communication
as key components. The mission is meant to create a people's movement for water,
making it everyone’s priority.
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26. Narendra Modi launches ‘Garib Kalyan Rojgar Abhiyan’ for migrant workers
The government has launched an employment scheme for migrant workers ‘Garib
Kalyan Rozgar Abhiyaan’, to give a boost to development in rural areas. Talent has
returned from cities during the lockdown, those whose labour and skills were behind
the rapid growth of cities will now boost development of villages with the help of
this scheme. It is an endeavour of his government that workers get jobs near their
home and help in development of villages.
Keypoints-
• The Garib Kalyan Rozgar Abhiyaan was launched by Mr. Modi via video
conference in Katihar village in Bihar in the presence of Chief Ministers of
five states Bihar, Madhya Pradesh, Uttar Pradesh, Rajasthan, Jharkhand
and a minister of Odisha.
• The scheme will work in a mission mode in 116 districts across these six
States where the maximum number of the migrant workers have returned.
• It will give impetus to infrastrcture and internet connectivity of the villages.
27. India 2nd biggest driver of global energy consumption in 2019: BP Statistical
Review
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According to BP Statistical Review released India was second biggest growth driver
of primary energy consumption in the world, behind China, in 2019 even though it
witnessed fall in demand in oil and coal. Global primary energy consumption
growth slowed to 1.3 per cent last year, less than half the rate of growth in 2018 (2.8
per cent).
Keypoints-
• The increase in energy consumption was driven by renewables and natural
gas, which together contributed three quarters of the expansion. All fuels grew
at a slower rate than their 10-year averages, apart from nuclear.
• By country, China was by far the biggest driver of energy, accounting for
more than three quarters of net global growth. India and Indonesia were the
next largest contributors to growth, while the US and Germany posted the
largest declines.
• But the growth in 2019 was slower than 2018.
• In absolute terms, India's energy consumption was only behind that of China
(141.70 EJ) and US (94.65 EJ).
• Growth in energy markets slowed in 2019 in line with weaker economic growth
and a partial unwinding of some of the one-off factors that boosted energy
demand in 2018. This slowdown was particularly evident in the US, Russia
and India, each of which exhibited unusually strong growth in 2018.
• The energy consumption is made up of oil, natural gas, coal, electricity and
renewables.
28. Covid-19 impact: It is WPI deflation for the first time in 4.5 years
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Wholesale prices, whose increase or decline is measured in terms of
the wholesale price index (WPI), entered the deflationary zone for the first time in
over four and a half years as the marker fell 3.2 per cent in May due to slackening
demand in the economy, hit hard by the pandemic.
Keypoints-
• As this will translate into low retail inflation at some time, economists expect the
Reserve Bank of India (RBI) to go for another rate cut of 25 basis points.
• Before this, there was a decline in the WPI — at 3.68 per cent — in November
2015. During that time there had been deflation for over a year, with the
sharpest being in August 2015 at 6.14 per cent. The overall WPI was not
available for April this year due to lockdown.
WPI
Wholesale Price Index, or WPI, measures the changes in the prices of goods sold
and traded in bulk by wholesale businesses to other businesses. The numbers are
released by the Economic Advisor in the Ministry of Commerce and Industry. An
upward surge in the WPI print indicates inflationary pressure in the economy and
vice versa. The quantum of rise in the WPI month-after-month is used to measure
the level of wholesale inflation in the economy.
With an aim to align the index with the base year of other important economic indicators
such as GDP and IIP, the base year was updated to 2011-12 from 2004-05 for the
new series of Wholesale Price Index (WPI).
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29. Assistance to Disabled persons for purchasing/fitting of aids/appliances
(ADIP) scheme- First ever distribtion
Through virtual platform under ADIP Scheme of M/O Social Justice &
Empowerment in Firozpur, Punjab, first ever distribution of assistive aids &
devices to divyangjan. This is the first camp being organized by
the ALIMCO under DEPwD after opening of lockdown with the Standard
Operating Procedure (SOP) approved by the Government of India.
Keypoints-
• This scheme is being implemented by the Ministry of Social Justice &
Empowerment.
• This scheme assist the needy disabled persons in procuring durable,
sophisticated and scientifically manufactured, modern, standard aids
and appliances that can promote their physical, social and
psychological rehabilitation, by reducing the effects of disabilities and
enhance their economic potential.
• The scheme is implemented through implementing agencies such as
NGOs, National Institutes under the Ministry of Social Justice &
Empowerment and ALIMCO (a PSU that manufactures artificial limbs).
• The eligibility of the scheme is- A person satisfying all the following
conditions are eligible:
▪ Indian citizen of any age.
▪ Has 40% disability or more (must have the requisite certificate)
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▪ Monthly income, not more than Rs.20000.
▪ In the case of dependents, income of parents/guardians should
not exceed Rs.20000 per month.
▪ Must not have received assistance during the last 3 years for the
same purpose from any source. However, for children below
12years of age, this limit would be one year.
30. India’s first gas exchange
India’s first gas exchange — the Indian Gas Exchange (IGX) — was launched. The
IGX is a digital trading platform that will allow buyers and sellers of natural gas to
trade both in the spot market and in the forward market for imported natural gas
across three hubs- Dahej and Hazira in Gujarat, and Kakinada in Andhra Pradesh.
IGX said that a highly liquid gas exchange, which prices gas fairly may lead to the
government stepping away from pricing domestically produced gas. The exchange is
expected to facilitate transparent price discovery in natural gas, and facilitate the
growth of the share of natural gas in India’s energy basket.
Keypoints-
• Imported Liquified Natural Gas (LNG) will be regassified and sold to buyers
through the exchange, removing the requirement for buyers and sellers to
find each other.
• The exchange also allows much shorter contracts – for delivery on the next
day, and up to a month – while ordinarily contracts for natural gas supply
are as long as six months to a year. This, experts say, will allow buyers and
sellers greater flexibility.
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• The price of domestically produced natural gas is decided by the
government. It will not be sold on the gas exchange.
31.Labour ministry to fast-track National Employment Policy
The government has fast-tracked the proposed National Employment Policy (NEP),
which aims at formalisation of the country’s 500 million workforce including
migrants to ensure job and social security. The policy will lay out a sectoral roadmap
with incentives for employment generation, based on the recommendations of the
Thawar Chand Gehlot-led group of ministers in the wake of the Covid-19-induced
economic crisis. The NEP will have twin objectives of creating an enabling
environment for attracting new enterprises and industries to generate employment
opportunities while improving the skill sets of the existing workforce to make it
employable as India gears up to attract companies seeking to shift manufacturing
bases from China. The proposal to bring in NEP was first mooted in 2008. The idea
took some shape at first meeting of BRICS employment working group in 2016.
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32.India’s first climate change report offers a stern warning
The Ministry of Earth Sciences’ (MoES) ‘Assessment of Climate Change over the
Indian Region’ is the first-ever attempt to document and assess climate change in
different parts of India. The report describes the observed changes and future
projections of precipitation, temperature, monsoon, drought, sea level, tropical
cyclones, and extreme weather events. The report reveals that local climate change
is influenced not only by the increase in greenhouse gases but also by the
increase in air pollution and the local changes in the land-use pattern. The report
goes on to warn that the rapid changes in India’s climate will place increasing
stress on the country’s natural ecosystems, agricultural output, and fresh water
resources, while also causing escalating damage to infrastructure and economy.
Keypoints
• The report is edited by scientists of the Indian Institute of Tropical
Meteorology, Pune, and unlike the UN Intergovernmental Panel on Climate
Change (IPCC) assessment reports that are global, this report looks at
regional climate change projections based on the IITM Earth System Model
and Coordinated Regional Climate Downscaling Experiment datasets.
• According to the report, India’s average temperature has risen by around 0.7°C
during 1901–2018 and projects that the frequency of summer (April–June)
heat waves over India will be 3 to 4 times higher (approximately 4.4°C) by
the end of the 21st century as compared to the 1976–2005 baseline period.
• This in turn will lead to a high likelihood of an increase in the frequency and
intensity of droughts (>2 events per decade), compounded by the increased
variability of monsoon precipitation and increased water vapour demand in
a warmer atmosphere.
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• The seasonal monsoon rains during the June-September months, which
contribute to more than 75 percent of the annual rainfall, and are vital for
India’s agriculture and economy, has declined by around 6 percent from
1951 to 2015, with notable decreases over the Indo-Gangetic Plains and the
Western Ghats.
• There also has been a shift in the recent period toward more frequent dry spells
(27 percent higher during 1981–2011, relative to 1951–1980) and more
intense wet spells during the summer monsoon season.
• The report further cautions that the growing propensity for droughts and
floods because of changing rainfall patterns caused by climate change
would be detrimental to surface and groundwater recharge, posing threats to the
country’s water security.
• The report observes that the Himalayas and the Tibetan Plateau have
experienced a temperature rise of about 1.3°C during 1951–2014.
• Finally, the report concludes that rising temperatures are also likely to increase
energy demand for space cooling, which if met by thermal power would
constitute to global warming by increasing greenhouse gas emissions.
Moreover, a rise in water withdrawal by power plants would directly compete
with water withdrawal for agriculture and domestic consumption,
particularly in water-stressed areas.
33. 40th GST Council Meeting is likely to happen on 14 June 2020
The 40th Goods and Services Tax (GST) Council meeting is likely to happen on 14
June 2020. This meeting will be the most important one as it will be the first meeting
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since the outbreak of the COVID-19 in India. The conference will take place amid
pressure on tax collection. The GST collections have already taken a hit because of
the lockdown imposed on 25 March 2020 to control the spread of COVID-19.
Generally, the GST Council is headed by the Union Minister of Finance and
comprises members of all states and Union Territories (UTs). Due to the prevailing
conditions of COVID-19, the Council meeting scheduled might be held via video
conference.
GST COUNCIL
The GST Council is a federal body that aims to bring together states and the Centre on
a common platform for the nationwide rollout of the indirect tax reform. As per The
Constitution (One Hundred and First Amendment) Act, 2016, in case of a voting,
every decision of the GST Council has to be taken by a majority of not less than
three-fourths of the weighted votes of the members present. The vote of the central
government has a weightage of one-third of the total votes cast, and the votes of all
the state governments taken together have a weightage of two-thirds of the total
votes cast in that meeting.
34.ICICI Home Finance (ICICI HFC) has launched SARAL – an Affordable Housing
Loan
ICICI Home Finance (ICICI HFC) has launched SARAL – an Affordable Housing
Loan. This housing loan will be aimed to fund homes in urban and rural areas.
Keypoints-
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• It has been developed for women, lower-middle-income customers, and
economically weaker sections who have a maximum household income up
to Rs 6 lakhs annually.
• This housing loan is offered at an interest rate starting from 7.98 per cent
onwards. Under the SARAL affordable housing loan, one can opt for a loan
up to Rs 35 lakhs, and for a maximum tenure of 20 years.
• Additionally, people with pre-existing loans can also transfer their loans to ICICI
Home Finance’s SARAL affordable housing loan.
35. Karnataka Bank launches COVID-19 health insurance in partnership with
Universal Sompo
• Karnataka Bank said it has launched a health insurance policy for COVID-19
in a tie-up with Universal Sompo General Insurance Company.
• To protect the health of common man, Karnataka Bank has launched a
special health insurance policy to cover the uncertainties posed by COVID-19
pandemic.
• The private sector bank said the health cover can be availed at a nominal
premium of Rs 399, inclusive of all taxes.
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36. Bank of Baroda to completely digitise lending operations
India’s third largest lender Bank of Baroda is set to completely digitise it’s lending
operations including home, agriculture, MSME, personal and auto loans. The bank
which is looking to completely do away with paper-based lending has reached out to
the big four and some white shoe consultants like McKinsey and Boston Consulting
Group to help set up a “digital lending department”. The validation and disbursal
of fresh loans will happen via this digital platform while past loans will also be
digitised to cut costs and improve profitability. The bank is planning to digitise a
large proportion of its retail and MSME processes in the next six months.
37. RBI steps up monitoring of retail payment modes, modifies framework
The Reserve Bank of India (RBI) revised the supervisory framework for financial
market infrastructure (FMI) and retail payment systems (RPS). This is owing to the
bigger role the payment entities have been playing in the last few years. The RBI
has classified the National Payments Corporation of India (NPCI) as FMI, thereby
increasing the regulatory oversight on the entity.It also included the National Electronic
Funds Transfer (NEFT) in the FMI framework.
Keypoints-
• NPCI will now, as per disclosure framework prescribed in the principles of
FMI, have to disclose its self-assessment on compliance on an annual basis
and also submit a copy to the RBI.
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• Also, there will be on site inspection and assessment conducted bi-annually
by the department of payment and settlement systems (DPSS) or an
external agency.
• For NEFT, on site inspection and assessment will be conducted periodically.
NPCI has also been designated as a “system wide important payment
system (SWIPS).”
• Earlier, Real Time Gross Settlement System (RTGS), Securities Settlement
System (SSS), Clearing Corporation of India (CCIL) and Negotiated Dealing
System — Order Matching (NDS-OM) were part of the FMI.
• The applicability of principles for FMIs may also be extended to some important
retail payment systems.
• In case of retail payment systems, such as card payments network, system
audit reports and segmented financial statements for India-specific
operations have to be submitted to the RBI on an annual basis.
• Also, financial statements for India-specific operations have to be provided to
the RBI for each quarter and the entire year.
• The RBI has outlined a host of measures that retail payment systems such
as ATM networks, pre-paid payment instruments, Bharat Bill payment
system, trade receivable discounting systems and white lable ATM
operators have to undertake.
• The principles for FMIs are there to enhance safety and efficiency in payment,
clearing, settlement and recording arrangements. More broadly, to limit
systemic risk and foster transparency as well as financial stability.
• The RBI’s view is that, to promote safety, security and efficiency of FMIs and
retail payment systems, they should aim to have better governance
arrangements.
• In order to manage the risk from a participant default, they should consider
their impact by collateralising current and future credit exposures.
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• The RBI also said that they should preferably conduct their money
settlements in central bank money, where practical and available, to avoid
credit and liquidity risks.
38. Infosys joins Amazon's The Climate Pledge to be net zero carbon
Bengaluru-based IT major Infosys Ltd has joined The Climate Pledge, an initiative
co-founded by e-commerce firm Amazon and environment firm Global Optimism, to
make a commitment to meet the Paris Agreement 10 years early. The Climate Pledge
calls on new signatories to be net zero carbon across their businesses by 2040, a
decade ahead of the Paris Accord’s goal of 2050. Amazon plans to announce many
more signatories throughout 2020.
Keypoints-
• Infosys and other companies that sign The Climate Pledge agree to
regularly measure and report greenhouse gas emissions, implement
innovation-led de-carbonization strategies in line with the Paris Agreement,
and neutralize any remaining emissions to achieve net zero annual carbon
emissions by 2040.
• Infosys made a voluntary commitment in 2011, long before the Paris
Agreement, to become carbon neutral and is on track to achieve it well
ahead of 2040. Infosys is the first signatory to RE100 (the global corporate
renewable energy initiative) from India and is committed to completely
transitioning to renewable power for its electricity requirements.
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39. Fit India and MHRD launch special films to promote indigenous sports of India
The Human Resource Development (MHRD) and Sports Ministry have collaborated
to produce a series of special films promoting 10 indigenous sports of India. The
'Department of School Education and Literacy' under MHRD has joined hands with
sports ministry's flagship programme 'Fit India' under the 'Ek Bharat, Shrestha
Bharat' initiative.
40. Migrants to receive covid care via Ayushman Bharat scheme
The government is preparing a list of migrant workers from across states to offer
health insurance benefits under the flagship Ayushman Bharat Pradhan Mantri
Jan Arogya Yojana (AB-PMJAY) amid the coronavirus crisis. The National Health
Authority (NHA), the implementing agency that it was coordinating with state
governments to identify eligible beneficiaries, and is setting up a process to issue AB-
PMJAY e-cards to migrants at the earliest. The move is aimed at ensuring health
cover to the under-privileged during the pandemic. At present the cashless scheme
provides health cover of as much as ₹5 lakh per family a year for secondary and
tertiary care hospitalization to over 107.4 million poor and vulnerable families, or
about 530 million individuals. The NHA has also tied up with DigiLocker, the
flagship initiative of the ministry of electronics and IT (MeitY)’s Digital India
Programme, to provide access to authentic digital documents to the citizenry. The NHA
said all beneficiaries, including migrants, can easily access their cards online
anytime, anywhere.