INDEX :

  1. Development Financial Institution 
  2. CNG vehicle cost, under GST
  3. Mullaperiyar dam
  4. Immune Thrombocytopenia 
  5. MTP Bill was passed by Rajya Sabha 

PIB SUMMARY:

  1. INDIA-FINLAND VIRTUAL SUMMIT

 


Development Financial Institution 

#GS-3 #ECONOMY #BUDGET

News reference:

The approval of bill to set up a Development Finance Institution.is mooted by the Union cabinet.

Aspects mentioned in the budget.

  • The government had mentioned in the Budget that it would be setting up a national bank for funding infrastructure and development activity. 
  • As of December 2019, she said, there were over 6,000 brownfield and greenfield projects requiring funding. 
  • Even as the Budget session is still on, the Cabinet has already cleared the setting up of a Development Finance Institution. 
  • The Budget provided for an initial amount of 20,000 crore for the institution. 

What are Development Financial Institution?

  • The budget 2021 has signaled that the Centre Government is banking on long-term infrastructure creation to lift India‟s economic growth rate sustainably. 
  • In this pursuit, the government has proposed to go back to the Development Finance Institution (DFI) idea. 
  • Further, DFI makes sense as the Centre government envisages mobilizing nearly ₹100 lakh crore for the ambitious National Infrastructure Pipeline. 
  • The idea of DFI looks good in the context of the looming NPA crisis of Banks. 

However, many economists have pointed out that India should keep the failed experiment with DFI, such as ICICI and IDBI, which leads to the conversion into universal banks. 

Background 

  • Development financial institutions provide long-term credit for capital-intensive investments spread over a long period and low yielding rates of return, such as urban infrastructure, mining and heavy industry, and irrigation systems. 
  • Development banks are different from commercial banks, which mobilize short- to medium-term deposits and lend for similar maturities to avoid a maturity mismatch (a potential cause for a bank‟s liquidity and solvency). 
  • In India, the first DFI was operationalized in 1948 with the setting up of the Industrial Finance Corporation (IFCI). 
  • Subsequently, India‟s Industrial Credit and Investment Corporation (ICICI) was set up with the World Bank‟s backing in 1955. 
  • The Industrial Development Bank of India (IDBI) came into existence in 1964 to promote long-term financing for infrastructure projects and industry. 
  • However, during the 1970-80s, DFI got discredited for mounting non-performing assets, allegedly caused by politically motivated lending and inadequate professionalism in assessing investment projects for economic, technical, and financial viability.
  • Due to these factors, Narsimhan Committee (1991) recommended disbanding of the DFI, and the existing DFI were converted into commercial banks. 

Purpose of setting up DFI 

  • NPA Crisis: The surge in NPAs in the banking sector, and the need to augment financing of infrastructure for kick-starting the growth cycle have led to a renewed policy attention on setting up DFIs. 
    • The gap between banks' assets and liabilities, already increased by bad debts will become unsustainable in infrastructure investment, given the long funding periods of such projects. 
  • Economic Crisis Triggered By Covid-19 Pandemic: Alexander Gerschenkron, a Ukrainian economic historian, famously theorized that the greater the backwardness of a country, the greater the role of the state in economic development, particularly in providing long-term finance to catch up with the advanced economies in the shortest possible time. 
    •  The Covid-19 pandemic has exacerbated inequality, the poverty gap, unemployment, and the economy‟s slowing down. 
    • Thus, infrastructure building through DFIs can help in quick economic recovery. 
  • Achieving the Target of $5 Trillion Economy: The government has envisaged attaining the target of becoming a USD 5 trillion economy by 2025. 
    •  However, this goal will depend on world-class infrastructure across the country. 
    •  NITI Aayog has estimated that US$4.5 trillion will be needed by 2030 to fund infrastructure. DFI is a step in the right direction towards this goal. 
  • International Examples: DFIs in China, Brazil, and Singapore has been successful in both domestic and international markets. 

Way Forward 

  • Mobilizing Capital For DFI: To lend for the long term, DFI requires correspondingly long-term sources of finance. 
    •  DFIs of the earlier era were over-reliant on cheap government funds and today‟s commercial banks ran into asset-liability mismatches due to their reliance on retail deposits to fund long-term projects. 
    •  Therefore, it may be best for new-age DFIs to focus on diversified sources of funding. 
    • Presently, DFI can be adequately capitalized by the sovereign-backed funds, alternative routes such as capital gains/tax-free bond issues, external borrowings, and loans from multilateral agencies. 
  • Specialized DFIs: Specialised project lenders focussed on specific verticals tend to do better at building project appraisal skills and managing risks than „supermarket‟ lenders who fund any project that comes their way. 
    • The Centre must therefore be open to the idea of multiple specialized DFIs modeled on the success of refinancing institutions such as NHB and NABARD. 
  • Ensuring Good Governance: While freeing a DFI from political interference or crony lending is necessary, merely having private shareholders or professional managers on board isn‟t sufficient to ensure good governance. 
  •  This has to be backed by a robust system of external checks and balances such as supervision by RBI and proper due diligence by auditors and rating agencies. 
  • Ensuring Ease of Doing Business: In the past, ambitious highway and pipeline projects have been continually held up by local protests and land acquisition woes, retrospective taxes, and poor contract enforcement.
    •  The success of DFIs is contingent on ironing out such issues and removing on-ground impediments to the ease of doing business. 

FOR FURTHER EXPLANATION REFER TO :


CNG vehicle cost, under GST

#GS-3 #ECONOMY #TAXATION #GST REFORMS 

Context 

Challenges of high vehicle cost and limited boot space should be tackled by bringing CNG under the GST regime suggestion postulated in the report by Nomura Research Institute Consulting & Solutions India. 

Natural gas vehicles and its promotion.

  • India has explored about 5 trillion cubic metres of recoverable reserves, of which less than 0.5% is used as fuel in the current CNG fleet. 
  • High vehicle volume and favourable conditions in the Indian automotive market presented an opportunity to promote NGVs. 
  • The demand for such vehicles, however, is concentrated in Maharashtra (30%), Gujarat (29%), Delhi (23%), Uttar Pradesh (9%), and Haryana (5%). 
  • The report on „natural gas vehicle (NGV) market‟ stated that the CNG vehicle market has seen compounded annual growth rate of 7% to 33.76 lakh units in March 2020 from March 2016, mainly driven by passenger vehicles (cars and taxis). 
  • India has large domestic reserves of natural gas as compared to crude oil. 

Natural gas vehicle 

  • A natural gas vehicle (NGV) is also an alternative fuel vehicle that uses compressed natural gas (CNG) or liquefied natural gas (LNG). 
  • Natural gas vehicles should not be confused with autogas vehicles powered by liquefied petroleum gas (LPG), mainly propane, which is a fuel with a fundamentally different composition. 
  • In 1993, CNG had become available in Delhi, India's capital, though LPG is what really took off due to its inherently far lower capital costs. Compressed Natural Gas is a domestic energy produced in Western parts of India. 
  • In India, most CNG vehicles are dual fuelled, which means they can run both on CNG and petrol.
  • This makes it very convenient and users can drive long distances without worrying about availability of natural gas (as long as petrol is available). 
  • As of December 2010 India had 1,080,000 NGVs and 560 fueling stations, many of the older ones being LPG rather than CNG. 
  • In addition, it is thought that more illegally converted LPG autos than legal ones ply the streets in India, some estimates are as high as 15 million "autos" (running the gamut of everything from LPG motored pedal bicycles to CNG buses).

Natural gas to come under GST 

  • Recently, officials have indicated that the government is considering bringing natural gas under the ambit of the GST regime. 
  • Global energy MNCs have called on the government to bring natural gas under the GST regime. 
  • Currently petrol, diesel, aviation turbine fuel, natural gas and crude oil fall outside India‟s Goods and Services Tax (GST) regime. 
  • Bringing natural gas under the GST would lead to a reduction in the cascading impact of taxes on industries such as power and steel, which used natural gas as an input. 
  • This would do away with the central excise duty and different value-added taxes imposed by states. 
  • This would lead to an increase in the adoption of natural gas in line with the government‟s stated goal to increase the share of natural gas in the country‟s energy basket from 6.3% to 15%. 

GST rate on service of transportation of natural gas 

  • Presently, GST on service of 'transportation of natural gas through pipeline' is applicable at the rate of 12 per cent (with ITC benefit) and at the rate of 5 per cent (without ITC benefit). 
  • Further, as per GST laws, two different registered units of an entity are considered distinct persons and inter-unit billing for supply of goods/services between such units is required to be carried out with applicable GST. 
  • Considering such provisions under GST laws, the lower GST rate of 5 per cent (without ITC benefit) could not practically be implemented so far, FIPI said. 
  • Input Tax Credit (ITC) of GST payable on the inter-unit billing, for services of transportation of natural gas, will not be available to the recipient unit of GAIL. 
  • The high rate of GST on the services of transportation of goods by pipeline will make natural gas costlier for power and CNG sector where ITC of GST paid on transportation of natural gas is not available as the output product is not covered/exempted under GST. 
  • It suggested GST of 5 per cent on services of transportation of goods by pipeline be provided with ITC benefit. 
  • This will lead to lower cost of transportation of natural gas and will help in promotion of cleaner sources of energy for power and CNG sector. 
  • This will also enable natural gas to compete with other alternative polluting fuels like furnace oil, naphtha, etc.

GST on the service of regasification 

  • Industries also sought rationalization of GST on the service of regasification of LNG. 
  • Since domestic production of natural gas is not enough to cater to the increasing demand, import of liquefied natural gas (LNG) at large scale is required to augment the supply for use in priority sectors such as fertilizer and CNG. 
  • The imported LNG has to be re-gasified and converted into natural gas (known as R-LNG - Regasified Liquefied Natural Gas) for transportation and consumption in India. 
  • The activity of regasification of LNG presently attracts a GST of 18 per cent. 
  • The levy of GST at a higher rate of 18 per cent on the regasification of LNG increases the landed cost of imported LNG for domestic industrial consumers. 
  • Regasification of LNG is under GST ambit, resulting in stranding of taxes and a higher rate of tax. 
  • It suggested that regasification may be considered as manufacturing and GST of 12 per cent levied on a job work basis. 

 


Mullaperiyar dam 

#GS-2 #POLITY #GOVERNANCE #INTER-STATE RELATIONS

The information on “Rule curve” for Mullaperiyar dam to the Supreme Court-appointed Supervisory Committee would make the tamil nadu chief Secretary to be “personally responsible” and “appropriate action” will be taken on failure

 Major priority is Safety of the dam 

  • After a nearly day-long hearing, a Bench directed the Supervisory Committee to issue directions or take steps to address the three core safety issues and submit a compliance report in four weeks - 
    •  The monitoring and performance of the instrumentation of the dam, 
    •  Finalising the „rule curve‟.
  •  Fixing the gate operating schedule. 
  • The three core issues are directly concerned with the safety of the dam and will have a cascading effect on persons residing in the nearby areas. 
  • The „rule curve‟ in a dam decides the fluctuating storage levels in a reservoir. 
  • The gate opening schedule of a dam is based on the „rule curve‟. It is part of the “core safety” mechanism in a dam. 

Criticism on kerala.

  • During the high-voltage hearing, the Tamil Nadu government blamed Kerala for delaying the finalisation of the „rule curve‟ for the 123-year-old dam. 
  • Right from the beginning, Kerala has adopted an obscurantist and obstructive stand. 
  • Kerala government is somehow not comfortable with Tamil Nadu operating the dam. 
  • Kerala has made consistent efforts to obstruct Tamil Nadu from operating the dam. 
  • Kerala is preventing the finalisation of the „rule curve‟. TN is not able to access data which is in their terrain. 
  • There is no road built, the power supply has not been restored, though TN had paid for it 

Mullaperiyar Dam issue 

  • Although the dam is located in Kerala, it is operated by Tamil Nadu following an 1886 lease indenture for 999 years (the Periyar Lake Lease Agreement) that was signed between the Maharaja of Travancore and the Secretary of State for India for the Periyar Irrigation works. 
  • Constructed between 1887 and 1895, the dam redirected the river to flow towards the Bay of Bengal, instead of the Arabian Sea and provide water to the arid rain region of Madurai in Madras Presidency. 
  • The dam is located on the confluence of the Mullayar and Periyar rivers in Kerala‟s Idukki district. 

Mullaperiyar Dam 

  • The Mullaperiyar dam is located on the confluence of the Mullayar and Periyar rivers in Kerala‟s Idukki district. 
  • It is operated and maintained by the Tamil Nadu for meeting the drinking water and irrigation requirements of five of its southern districts. 
  • According to a 999-year lease agreement made during the British rule the operational rights were handed over to Tamil Nadu. 
  • The dam intends to divert the waters of the west-flowing river Periyar eastward to the arid rain shadow regions of the Tamil Nadu. 

Issues and concerns 

  • The lease agreement was renewed in the 1970s by both Tamil Nadu and Kerala giving the former rights to the land and water from the dam, besides the authority to develop hydropower projects at the site. In return, Kerala would receive rent from Tamil Nadu. 
  • The first cracks in this agreement surfaced in 1979 when a minor earthquake had resulted in cracks in the dam. 
  • The Central Water Commission, under the Government of India, conducted a study and recommended lowering the water stored in the dam‟s reservoir to 136 feet from 142 feet. 
  • If definitive measures were implemented, only then could the Tamil Nadu administration raise water levels to the dam‟s full capacity of 152 feet. 

Supreme Court verdict 

  • In 2006, the Supreme court gave Tamil Nadu legal sanction to raise the water level to 142 feet. 
  • In response, Kerala amended the 2003 Kerala Irrigation and Water Conservation Act, restricting the water level to 136 feet. 
  • In 2012, however, an Apex court-appointed committee stated that the dam was “structurally and hydrologically safe” and that the Tamil Nadu government could raise water levels up to 142 feet. 
  • In 2014, the court event struck down the amendment to the 2003 Kerala Irrigation and Water Conservation Act, calling it unconstitutional. 
  • The Supreme Court had also directed the Centre and the governments of Kerala and Tamil Nadu to set up three panels to prepare a contingency plan in case of a disaster. 
  • In 2019, the Ministry of Jal Shakti has constituted a three-member Supervisory Committee to settle the issue of Mullaperiyar dam between Kerala and Tamil Nadu. 

Rule curve level for Mullaperiyar dam 

  • Recently, the Central Water Commission (CWC), in consultation with Tamil Nadu, has finalised the rule curve level for the Mullaperiyar dam. 
  • The rule curve level is fixed to avoid emergency opening of dam shutters in case of a flood-like situation. 
  • It helps in controlling the water level in the dam during peak monsoon. 
  • At a meeting of the supervisory committee appointed by the Supreme Court, it was informed that the rule curve level had been finalised by the CWC. 
  • It also discussed the inflow forecasting system at the Mullaperiyar dam. 
  • It is in accordance with an apex court order raising the water level to 142 ft in 2015. 
  • With the rule curve level coming into effect, the dam cannot be allowed to hold water above the level that is fixed in accordance with the rainfall pattern in the area. 
  • The CWC has already set the new rule curve level for the Idukki reservoir downstream of the Mullaperiyar dam. 
  • Though the water level crossed the blue alert level as per the rule curve level last monsoon, it was below the red alert level. 
  • The sudden opening of the Idukki dam in August 2018 had caused large-scale damage downstream. 
  • The opening of the shutters of the Mullaperiyar dam caused a flood situation on the Periyar, leading to increased inflow into the Idukki reservoir. 
  • As per the rule curve level, Tamil Nadu has to draw more water in case of an increased inflow into the dam. 
  • It was a long-pending demand of Kerala to keep the Mullaperiyar water level at a manageable level after it was raised to 142ft. 

 


Immune Thrombocytopenia 

#GS-3 #SCIENCE #TYPES IMMUNITY 

About:

  • Immune thrombocytopenia (ITP) is an autoimmune bleeding disorder characterized by abnormally low levels of platelets. 
  • Platelets are specialized blood cells that maintain the integrity of our blood vessel walls and help prevent and stop bleeding by accelerating clotting. 
  • As the platelet count falls, the risk of developing bleeding symptoms increases. 
  • In ITP, an abnormal immune reaction leads to destruction of the individual‟s own platelets. 
  • It is estimated that around 42,000 patients are diagnosed with ITP in India every year. 
  • Less than 10% of patients have access to the treatment, which is required to maintain adequate platelet counts for a longer duration.

Symptoms 

  • A child or adult with immune thrombocytopenia may display no symptoms (asymptomatic) or the symptoms may not appear until the platelet count is extremely low. 
  • Skin that bruises very easily and even spontaneously. 
  • A rash consisting of small red dots (petechiae) that represent small hemorrhages caused by broken blood vessels or leaks in a capillary wall. 
  • Bleeding from the gums, nose or any area of the body, e.g. in urine or feces 
  • Blood blisters on the inside of cheeks. 
  • Excessive and prolonged menstrual bleeding. 

Causes 

  • The genetic cause of immune thrombocytopenia is unclear but this condition occurs when the body's own immune system malfunctions and attacks the body's tissues and organs (autoimmunity). 
  • Normally, the immune system produces proteins called antibodies, which attach to specific foreign particles and germs, marking them for destruction. 

 


MTP Bill was passed by Rajya Sabha 

#GS-2 #POLITY #GOVERNANCE 

Context 

  • The Rajya Sabha passed the Medical Termination of Pregnancy (Amendment) Bill, 2020 that increases the time period within which an abortion may be carried out. 
  • The Bill still did not give women the freedom to decide, since they would need a nod from a medical board in the case of pregnancies beyond 24 weeks. 
  • The Opposition‟s demand to send the Bill to a parliamentary Select Committee for detailed scrutiny was defeated by a voice vote. 

New provisions 

  • Currently, abortion requires the opinion of one doctor if it is done within 12 weeks of conception, and two doctors if it is done between 12 and 20 weeks. 
  • The Bill allows abortion to be done on the advice of one doctor up to 20 weeks, and two doctors in the case of certain categories of women, between 20 and 24 weeks. 
  • For a pregnancy to be terminated after 24 weeks in case of substantial foetal abnormalities, the opinion of the State-level medical board is essential. 
  • The Bill was passed in March last year in the Lok Sabha. The amendments had been made pursuant to the rising number of pleas in the court. 
  • There are 23 petitions in front of the Supreme Court and many hundreds in the High Courts. 
  • This is to preserve and protect the dignity of women. The original Bill was framed in 1971.

Concerns 

  • During the debate, however, many of the Opposition members, while welcoming the Bill, pointed out the severe lacunae and problems with its approach. 
  • The medical board had to have specialists but government data itself showed a grave shortage in availability of doctors. 
  • Should the State intervene when the pregnant woman is worried about her own life, about the well-being of the foetus, and also about the stigma involved

BIASA BASICS 

Termination of Pregnancy (MTP) Amendment Bill, 2020 

  • A panel of doctors to decide on the termination of pregnancy beyond 24 weeks as proposed in the Medical Termination of Pregnancy (MTP) Amendment Bill, 2020, is “unfeasible” as 82% of these posts are lying vacant in the country, finds a new study. 

Salient features of the Bill

  • Proposing requirement for the opinion of one provider for termination of pregnancy, up to 20 weeks of gestation and introducing the requirement of the opinion of two providers for termination of pregnancy of 20-24 weeks of gestation. 
  • Enhancing the upper gestation limit from 20 to 24 weeks for special categories of women which will be defined in the amendments to the MTP Rules and would include „vulnerable women including survivors of rape, victims of incest and other vulnerable women (like differently-abled women, Minors) etc. 
  • Upper gestation limit not to apply in cases of substantial foetal abnormalities diagnosed by Medical Board. 
  • The composition, functions and other details of Medical Board to be prescribed subsequently in Rules under the Act. 
  • Anonymity of the person: Name and other particulars of a woman whose pregnancy has been terminated shall not be revealed except to a person authorised in any law for the time being in force. 

Benefits sought with the bill 

  • It is seen as a step towards the safety and well-being of the women and many women will be benefitted by this. 
  • Recently several petitions were received by the Courts seeking permission for aborting pregnancies at a gestational age beyond the present permissible limit on grounds of foetal abnormalities or pregnancies due to sexual violence faced by women. 
  • The proposed increase in gestational age will ensure dignity, autonomy, confidentiality and justice for women who need to terminate the pregnancy. 

PIB SUMMARY 

INDIA-FINLAND VIRTUAL SUMMIT

#PRELIMS FACT 

As per the Ministry of External Affairs (MEA), PM Narendra Modi will hold a virtual summit with his Finland counterpart Sanna Marin. This India-Finland summit will provide a “blueprint” for the future expansion and diversification of the bilateral partnership.

Key Points

  • During the summit, the two leaders will cover the entire spectrum of the bilateral relationship and exchange views on regional and global issues of mutual interest.
  • A PMO release said that India and Finland enjoy friendly relations based on shared values of democracy, freedom, and rules-based international order.
  • Both nations have very close cooperation in the areas of education, trade and investment, science and technology, innovation, as well as Research and Development.
  • Both sides also have ongoing collaboration in the joint development of a Quantum Computer using Artificial Intelligence to address societal challenges.
  • The release stated that 100 Finnish companies are actively operating in India in various sectors like elevators, machinery, telecom, and energy including renewable energy. Around 30 Indian companies are active in Finland mainly in auto-components, IT, and the hospitality sector.

India-Finland MoU in the field of Environment protection and biodiversity conservation

India and Finland have signed an agreement in November 2020 for developing cooperation between two countries in the field of Environment protection and biodiversity conservation.

The MoU is a platform to give a push to Indian and Finnish partnership and support, exchange best practices in areas like prevention of air and water pollution, waste management, and promotion of circular economy.

 

 

 

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