1 feb
Labour migration rose to 90 lakh over last 5 years: Economic Survey
According to Economic Survey 2016-17, the inter-state migration of workers in India has increased substantially to 90 lakh annually between 2011-16 period compared to the previous years. The estimate of labour migration in India was based analysis of census data of 2011 and railway passenger traffic in the unreserved category and new methodologies including the Cohort-based Migration Metric (CMM). Key Facts It is first-ever estimate of internal work-related migration using railways. The inter-state labour mobility average was between 50–65 lakh people in the 2001-2011 period. Migration for work and education is accelerating. The acceleration of migration was particularly high for women and increased at nearly twice the rate of male migration in the 2000s The patterns of migration observed conform that less affluent states and districts evince higher out-migration and rich metropolises attract large inward flows of labour. The largest recipient of migrant workers was the Delhi region, which accounted for more than half of migration in 2015-16, while Uttar Pradesh and Bihar together accounted for half of total out-migrants. Over time, there has been a shift towards the southern states, reflecting the opening up of new migration corridors in recent years. Policy actions to sustain and maximize the benefits of migration include ensuring portability of food security benefits, healthcare and basic social security framework through an inter-state self-registration process.
Economic Survey backs Universal Basic Income
The Economic Survey 2016-17 tabled in Parliament has advocated for the concept of Universal Basic Income (UBI) as an alternative to the various social welfare schemes in an effort to reduce poverty. It suggests that a more efficient way to help the poor will be to provide them resources directly, through a UBI. It will be an efficient substitute for a plethora of existing welfare schemes and subsidies. What is Universal Basic Income (UBI)? A basic income is a form of social security in which all citizens of a country regularly receive an unconditional sum of money, either from a government in addition to any income received from elsewhere. It is based on the principles of universality and unconditionality. However, it forfeits other government aided benefits. Recently, government of Finland announced the introduction of a trial for UBI involving 2,000 unemployed people. In June 2016, Swiss voters in referendum had overwhelmingly rejected proposal to introduce basic income for all. Survey’s justification for introduction of UBI Promoting social justice, reducing poverty, unconditional cash transfer that lets the beneficiary decide how she uses the money, employment generation by promoting labour flexibility. It will bring in administrative efficiency as a direct cash transfer through JAM (Jan Dhan-Aadhar-Mobile) platform. It will be more efficient as compared to the “existing welfare schemes which are riddled with misallocation, leakages and exclusion of the poor. It can help to achieve considerable gains in terms of bureaucratic costs and time by replacing many of these with a UBI.
Highlights Budget 2017-18
Union Finance Minister Arun Jaitley presented the Union Budget 2017. It was fourth annual budget presented by Arun Jaitley as Finance Minister. This was also first time no separate Railway Budget was presented. The 2017 Union Budget,was broadly focused on 10 themes. They are farming sector, rural population, youth, poor and underprivileged health care, financial sector for stronger institutions, infrastructure, speedy accountability, prudent fiscal management, public services and tax administration for the honest. Highlights Budget speech Demonetisation Demonetisation is expected to have a transient impact on the economy. It will have a great impact on the economy and lives of people . Demonetisation is a bold and decisive measure that will lead to higher GDP growth. The effects of demonetisation will not spillover to the next fiscal. Agriculture sector Farmer credit fixed at record level of Rs10 trillion. It will ensure adequate flow to underserved areas. Government will set up mini labs in Krishi Vigyan Kendras for soil testing. Long-term irrigation fund in NABARD increased from Rs 20,000 crore to Rs40,000 crore. Dairy processing infrastructure fund with a corpus of Rs. 2000 crore will be created. Model law on contract farming will be prepared and shared with the States. Rural population Over Rs 3 lakh crore will be spent for rural India. Government’s Mission Antyodaya targets to bring 1 crore households out of poverty by 2019. MGNREGA: 48,000 crore has been allocated. Participation of women now at 55%. Space technology to be used in a big way to ensure MGNREGA works. 5 lakh farm ponds will be taken up under MGNREGA. Pradhan Mantri Awas Yojana: 23,000 crore allocated. Government to complete 1 crore houses for those without homes. Prime Minister Gram Sadak Yojana: 19,000 crore allocated. Along with states, Rs. 27,000 crore will be spent in FY18. Panchayat Raj: Human resource reform programme to be launched. Mason training to be provided for 5 lakh people 100% rural electrification will be archived by May 2018 Swachh Bharat mission: made tremendous progress, sanitation coverage has gone up from 42% to 60%. For youth Education: System of measuring annual learning outcomes will be introduced with emphasis on science. Innovation fund for secondary education. Focus will be on 3,479 educationally-backward blocks. Colleges will be identified based on accreditation. Reforms in UGC: Based on ranking colleges to be identified and given more autonomy. SWAYAM platform: Leveraging information technology platform for virtual learning National testing agency will be established for all entrance exams, freeing up CBSE, AICTE and other bodies. 100 Indian international skill centres will established with courses in foreign languages. Rs. 4,000 crore allocated to launch skill acquisition and knowledge awareness. Special scheme for creating employment in leather/footwear sector. Five special zones to be set up for tourism sector. Poor and underprivileged Sum of Rs. 1,84,632 crore allocated for women and children. 500 crore allocated for Mahila Shakthi Kendras. Affordable housing will be given infrastructure status. Under a nationwide scheme for pregnant women, Rs. 6000 will be transferred to each person. Action plan to eliminate leprosy by 2018, TB by 2025, reduce IMR to 29 in 2019 Owing to surplus liquidity, banks have started reducing lending rates for housing. 5 lakh Health sub centres will be transformed into health wellness centres. Two AIIMS will be set up in Gujarat and Jharkhand and. Structural transformation of the regulator framework for medical education will be undertaken. 52,393 crore allocated for Scheduled Castes. Aadhaar-based smartcards will be issued to monitor health of senior citizens. Infrastructure and railways Railways total capex and development expenditure pegged at Rs. 1.31 trillion Railways: Passenger Safety fund corpus will be set up. Unmanned level crossings to be eliminated by 2020. Railway lines of 3,500km to be commissioned. Dedicated tourism/pilgrimage trains will be launched. 500 stations to be made differently-abled friendly Rail cleanliness: Introduction of Coach Mitra facility; By 2019, biotoilets for all coaches. Competitive ticket-booking facility will be introduced; service charge withdrawn for tickets booked on IRCTC. New metro rail policy will be announced. Roads sector: 64,000 crore allocated for national highways. Airports Authority of India Act will amended to enable monetization of land resources. Total Rs. 2 trillion will be allocated to transport sector. Telecom sector: 10,000 crore will be allocated to Bharat Net programme. Digi-gau initiative will be launched. Export infrastructure: New restructured central scheme will be launched. Total Rs. 3.96 trillion will be allocated for infrastructure. Energy sector: Strategic policy for crude reserves will be set up. Rs. 1.26,000 crore received as energy production based investments. Financial Sector Foreign Investment Promotion Board (FIPB) to be abolished Commodities market: Panel will be constituted to study legal framework for spot and derivative markets Resolution mechanism for financial firms will be set up. Cyber-security: Computer emergency response team (CERT) to be set up Listing of PSEs to foster public accountability, mechanism for time-bound listing will be revised. New exchange-traded fund (ETF) will be launched Pradhan Mantri Mudra Yojana: It will have lending target at Rs. 2.44 trillion. Stand-up India scheme: over 16,000 new enterprises will be set up. Digital Economy Government to launch two new schemes to promote BHIM app, including cashback scheme for merchants Aadhaar Pay will be launched for people who don’t have mobile phones. Focus on rural and semi-urban areas. Financial inclusion fund will be strengthened. Panel on digital payments has recommended structural reforms. Payment regulatory board will be created at RBI. Negotiable Instruments Act might be amended. Public Services Head post-office to be used for passport services. Defence: Centralized defence travel system will be developed. Centralized pension distribution system to be established Government recruitment: Two-tier exam system will be introduced. Government to introduce laws to confiscate assets of economic defaulters. High-level panel chaired by PM will be formed to commemorate Mahatma Gandhi’s 150th birth anniversary Fiscal Management Total budget expenditure: 21 trillion. Defence expenditure: 2.74 trillion (excluding pensions). Fiscal deficit for FY18: Pegged at 3.2% of GDP. Revenue deficit for FY18: Pegged at 1.9% Fiscal situation. Total expenditure: 21, 47,000 crore. Plan, non-plan expenditure is abolished; focus will be on capital expenditure which will be 25.4 %. 3,000 crore under the Department of Economic Affairs for implementing the Budget announcements. Expenditure for science and technology is Rs. 37,435 crore. Total resources transferred to States/UTs is Rs 4.11 lakh crore. Amendment proposed to the RBI Act to enable issuance of electoral bonds. Tax Administration Direct tax collection not commensurate with income/expenditure pattern of India Black money: Cash transactions above Rs. 3 lakh banned. Transparency in political funding: Parties continue to receive anonymous donations; propose system of cleaning up. Political funding: Maximum amount of cash donation that can be received is Rs. 2,000. Political parties can receive donations by cheques or digitally. Every party has to file returns within specified time. Amendment proposed to RBI Act to issue electoral bonds. Personal income tax: Rate reduced to 5% for income bracket of Rs. 2.5-5 lakh; All other categories to get uniform benefit of Rs. 12,500 per person; Surcharge on income bracket Rs. 50 lakh-Rs. 1 crore will be levied Personal income tax: Simple one-page form for taxable income up to Rs. 5 lakh will be implemented. GST: Preparedness of IT system on schedule. Not many changes to excise duties in GST regime. FPI category 1 and 2 investors exempted from indirect transfer provisions. Time period of revising tax returns reduced to 12 months Real estate: Changes will be made in capital gains tax. Concessional withholding rate will be extended to 30 June 2020, rupee-denominated masala bonds to be included. MAT will be not abolished at present and will be carry-forwarded for 15 years. Corporate tax rate: MSMEs’ (annual turnover less than Rs.50crore) rate reduced to 25%. LNG: customs duty reduced to 2.5% Limit of cash donation for charitable trusts reduced to Rs. 2,000.
Government of create five special tourism zones to boost tourism: Budget 2017-18
The Union Budget 2017-18 has announced that Government will set up five Special Tourism Zones in partnership with States. These five special zones will be anchored as Special Purpose Vehicles (SPVs) that will be set up in partnership with the States. In this budget, government has allocated Rs. 1,840.77 crore to the Tourism Ministry, Rs. 250 crore more in the 2017-18 fiscal. Other tourism related announcements in Budget To boost the image of India in the international travel market Incredible India 2.0 Campaign will be unveiled across the world the financial year 2017-18. 959.91 crore has been allocated for the Integrated Development of Tourist Circuits around specific themes under Swadesh Darshan scheme. 100 crore has been allocated for Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD). Rs. 412 crore provided for promotion and publicity of various programmes and schemes. Besides, Government has asked the Railways to start dedicated trains for tourism and pilgrimage purposes. Swadesh Darshan Scheme: Under it, 13 thematic circuits have been identified for development, namely North-East India Circuit, Buddhist Circuit, Himalayan Circuit, Coastal Circuit, Krishna Circuit, Desert Circuit, Tribal Circuit, Eco Circuit, Wildlife Circuit, Rural Circuit, Spiritual Circuit, Ramayana Circuit and Heritage Circuit. PRASAD Scheme: Under it, 13 cities Ajmer, Amritsar, Amravati, Dwarka, Gaya, Kamakhaya, Kancheepuram, Kedarnath, Mathura, Patna, Puri, Varanasi and Velankanni have been identified for development.
3 feb
NITI Aayog launches India Innovation Index
The National Institution for Transforming India (NITI) Aayog and Confederation of Indian Industry (CII) jointly launched India Innovation Index. Besides country’s first innovation index portal was also launched. The index has been jointly developed by NITI Aayog, DIPP and CII in consultation with World Economic Forum (WEF), World Intellectual Property Organization (WIPO), Cornell University, UNIDO, ILO, OECD, UNESCO, ITU etc. Key Facts The index’s objective is to rank Indian states on innovations through the portal that will capture data on innovation from all states on innovation and regularly update it in real time. It will provide impetus to state to build their respective innovation ecosystems and spur the innovation spirit among institutions and people to make India an innovation-driven economy It will be structured based on the best practices followed in Global Innovation Index (GII) indicators and additionally by adding India-centric parameters those truly reflect the Indian innovation ecosystem. The pillars of index include the capacity of human capital and research, strength of institutions, supporting infrastructure and the level of business sophistication, among others. The portal will coalesce, disseminate and update periodically GII indicators and India–centric data from various states. It will be hosted on the NITI Aayog website. It will be a one-stop data warehouse and will track progress on each indicator at the National level and the State level on real-time basis. Background The Global Innovation Index (GII) co-published by WIPO, Cornell University and INSEAD ranks world economies including India since 2007 according to their innovation capabilities and outcomes. It uses 82 indicators among a host of other important parameters. It has become a leading reference on innovation and a ‘tool for action’ for policy makers. Currently, India ranks 66th out of 128 countries on the 2016 Global innovation Index (GII).
7 feb
CBDT signs four unilateral Advance Pricing Agreements
The Central Board of Direct Taxes (CBDT) under the Department of Revenue, Union Ministry of Finance has entered into four more unilateral Advance Pricing Agreements (APAs). These four APAs are related to Manufacturing, Financial and Information Technology sectors. They cover international transactions such as Contract Manufacturing, Software Development Services and IT Enabled Services. With this, the total number of APAs entered into by the CBDT has reached 130. It includes 122 Unilateral APAs and 8 bilateral APAs. In the current financial year (2016-17), total 66 APAs (5 bilateral APAs and 61 unilateral APAs) were signed. About Advance Pricing Agreements (APAs) The APA Scheme was introduced in the Income-tax (IT) Act in to provide certainty to taxpayers in domain of transfer pricing by specifying methods of pricing and determining prices of international transactions in advance. The Rollback provisions under this scheme were introduced in 2014. The scheme seeks to foster government’s aim of non-adversarial tax regime. Benefits: (i) Boost to economy and ease of doing business. (ii) Strengthen Government’s mission of fostering a non-adversarial tax regime. (iii) Introduces certainty in tax law by reducing compliance costs and make tax regime investment friendly. (iv) Provides certainty to taxpayers regarding transfer pricing to avoid disputes between taxpayer and tax regulator.
9 feb
India to pitch Trade Facilitation in Services at WTO
India will make a presentation on the proposed Trade Facilitation in Services (TFS) Agreement to World Trade Organisation (WTO) Director General Roberto Azevedo and India Inc. The global pact proposed by India to boost services trade at the WTO-level aims to ease norms including those relating to movement of foreign skilled workers and professionals across borders for short-term work. The proposed services pact is similar to the Trade Facilitation Agreement (TFA) in Goods adopted by the WTO Members in 2014 at Bali Summit to ease customs norms for boosting global goods trade. Some proposed features TFS Agreement Covers measures across all modes of supply for services delivery in cross-border trade, related to entry into the market as well as those applied post-entry. Seeks to ensure portability of social security contributions, as well as make sure charges or fees for immigration or visas transparent, reasonable and non-restrictive in nature. Pave the way for a single window mechanism for foreign investment approvals. Ensure cross-border insurance coverage to boost medical tourism. Ensure publication of measures impacting services trade and timely availability of relevant information in all the WTO official languages as well as free flow of data and information for cross-border supply of services.
11 feb
India ranks 43rd out of 45 nations in 2017 International Intellectual Property Index
India ranked low 43rd among the surveyed 45 nations in 2017 International Intellectual Property Index (IIPI). In this edition, India is just above Pakistan (44th) and Venezuela (45th). The fifth annual index was released by US Chamber of Commerce’s Global Intellectual Property Centre (GIPC) in its report titled ‘The Roots of Innovation’. Key Facts This year the index includes 90% of global gross domestic product (GDP) and seven new economies Egypt, Hungary, Kenya, Pakistan, Philippines, Saudi Arabia, and Spain were included. India scored a meagre 8.75 out of a total of 35 points, falling significantly behind the median score of 15.39. Besides, the average score of India’s regional neighbours was 17.64. This is for fifth consecutive year India has been ranked at the near bottom in the index. Last year, India was placed 37 out of 38 countries. India was ranked last or next-to-last in the previous four years. Top 5 Countries in 2017 IIPI: United States (1st), United Kingdom (2nd), Germany (3rd), Japan (4th), Sweden (5th), France (6th), Switzerland (7th), Singapore (8th), South Korea (9th) and Italy (10th). BRICS countries: China (27th), South Africa (33rd), Brazil (32nd) and Russia (23rd). This year India has made some increment, but still has to do a lot more to build up a positive impression of its IPR policy with adequate legislative reforms required by innovators. There was slight improvement in India’s overall scores in this edition mainly because of the inclusion of five new indicators in the index on which India performed very strong. About International Intellectual Property Index (IIPI) The index started in 2012 by USGIPC ranks countries based upon 35 parameters each having one point weightage. Some of the parameters are patents, copyrights, trademarks, trade secrets and market access, enforcement, and ratification of international treaties.
13 feb
Union Government plans to invest Rs.2,200 crore in electronic technology start-ups
The Union Government is targeting an investment of about Rs. 2,200 crore in start-ups working on new technologies in the electronic sector under the Electronics Development Fund (EDF) by 2019. This investment aims at creating an eco-system to make India a global hub for electronics manufacturing. Earlier, Government had approved Rs.681 crore as seed capital for building a total corpus of over Rs 6,800 crore under the EDF meant to support entrepreneurship and innovation in electronics and IT. About Electronics Development Fund (EDF) EDF is the mother fund or fund of funds that will contribute to various funds for those who invest the money in companies for creation of intellectual property rights (IPR) in the field of electronics and IT. It works with venture capitalists to create funds, known as ‘daughter funds,’ which provide risk capital to companies developing new technologies in the area of nano-electronics, electronics and IT. It will help attract angel funds, venture funds and seed funds towards research & development (R&D) and innovation in the specified areas. It will also help to create a battery of Fund Managers and Daughter funds who will be seeking good start-ups (potential winners) and selecting them based on professional considerations.
14 feb
Reliance Defence signs warship repair pact with US Navy
Anil Ambani group led Reliance Defence and Engineering Limited (RDEL) has signed a Master Ship Repair Agreement (MSRA) with the US Navy to provide repair and alteration services for ships of the Seventh Fleet. With this, RDEL became first Indian company (either public or private) to provide logistical support to the US military within Indian territory. Key Facts Under this agreement, RDEL will maintain the vessels of US Seventh Fleet involving 100 vessels operating in the Indian Ocean. The signing of a MSRA agreement is a follow-up to the Logistics Exchange Memorandum of Agreement (LEMOA) signed between India and US in August 2016. These vessels will be serviced and repaired from the RDEL owned private shipyard in Pipavav in Gujarat. This deal is likely to generate Rs. 10,000 crore in revenues for RDEL in the next five years. The Pipavav shipyard was qualified and approved by US government to perform complex repair and alteration services for the US Navy after a detailed site survey conducted in October 2016. The US Seventh Fleet looks after the Western Pacific and Indian Ocean. Currently, these vessels visit Singapore or Japan for such works. Note: RDIL is the first private sector company in India to obtain the licence and contract to build Naval Offshore Patrol Vessels (OPVs) for Indian Navy. Its Pipavav shipyard is only modular shipbuilding facility in India having capacity to build fully fabricated and outfitted blocks. About LEMOA It is a tweaked India-specific version of the logistics support agreement (LSA), which US has close military to military co-operation with several countries. LEMOA gives access, to both countries, to designated military facilities on either side for the purpose of refuelling and replenishment. It should be noted that it does not create any obligations on either Party to carry out any joint activity. It does not provide for the establishment of any bases or basing arrangements.
17 feb
India ranks 143rd in 2017 Economic Freedom Index
India was ranked 143rd out of 186 economies in the annual Index of Economic Freedom 2017 that measures the degree of economic freedom in the countries of the world. The index was released by top US based Think Tank, The Heritage Foundation. In this edition, India’s overall score was 52.6 points, 3.6 points less than scored in 2016 when it was ranked 123rd. How countries are ranked? The Index of Economic Freedom ranks countries based on score ranging 0 to 100, with 0 being the least free and 100 the most free. The score is based on ten factors of economic freedom, separated into four categories, using statistics from international organizations like World Bank, IMF, Economist Intelligence Unit and Transparency International. Based on the score, countries are grouped in 5 different categories, Free (80–100), Mostly Free (70.0–79.9), Moderately Free (60.0–69.9), Mostly Unfree (50.0–59.9) and Repressed (0–49.9). Key Highlights of 2017 Economic Freedom Index Top 5 countries in this edition of index are Hong Kong (1st), Singapore (2nd) and New Zealand (3rd), Switzerland (4th) and Austria (5th). India with 52.6 points score was ranked 143rd. It was placed in the category of “Mostly Unfree” Economies (points ranging from 50.0-59.9). India’s neighbours, Nepal (125th), Sri Lanka (112th), Pakistan (141st), Bhutan (107th), and Bangladesh (128th) have surpassed India. Only Afghanistan (163rd) and Maldives (157th) were ranked below India. China with a score of 57.4 points ranked 111th which is 5.4 points above 2016 score. United States was ranked 17th with a score of 75.1 points. The world average score was 60.9, highest recorded in the 23-year history of the index. 49 countries majority of developing countries and also Norway and Sweden have achieved their highest-ever index scores. India related facts: India’s progress on market-oriented reforms has been uneven. India has combination of advance technology and manufacturing sectors of developed world as well as traditional sectors, characteristic of a lesser developed economy. Extreme wealth and poverty coexist in India as it both modernises rapidly and struggles to find paths to inclusive development for its large population. India is a significant force in world trade, but underdeveloped infrastructure, corruption and poor management of public finance undermines its overall development. Praised efforts of Prime Minister Narendra Modi for giving a new energy and strength to Indian Foreign Policy. PM has strengthened India’s bilateral ties with US particularly in defence cooperation.
27 feb
FDI inflow increases by 18% to $46 billion in 2016: DIPP
According to data released by the Department of Industrial Policy and Promotion (DIPP), India attracted $46 billion foreign direct investment (FDI) in 2016. It shows that, India’s FDI grew by 18% in 2016 as compared to $39.32 billion FDI inflows in 2015. Key Facts The main sectors which attracted the highest FDI inflows included services, telecom, trading, computer hardware and software and automobile. Bulk of the FDI came in from Singapore followed by Mauritius, Netherlands and Japan. Background Foreign investments are considered crucial for India as it needs around 1 trillion dollars for overhauling its infrastructure sector such as ports, airports and highways to boost growth. Strong inflow of foreign investments mainly helps to improve the country’s balance of payments (BoP) situation and also strengthen the rupee value against other global currencies, especially dominant US dollar. To attract inflow of foreign investments, the central government has announced several measures including liberalisation of FDI policy and improvement in business climate. In the Budget 2017-18, Finance Minister further announced relaxation of foreign investment norms and also abolished Foreign Investment Promotion Board (FIPB).