Press Information Bureau (PIB) IAS UPSC – 1st to 7th February, 2021
The Report of the Fifteenth Finance Commission
The Fifteenth Finance Commission (XVFC)’s ToR was unique and wide ranging in many ways. The Commission was asked to recommend performance incentives for States in many areas like power sector, adoption of DBT, solid waste management etc.
- Another unique ToR was to recommend funding mechanism for defence and internal security.
- The XVFC’s Report is organised in four volumes.
- In total, main report has 117 core recommendations.
In order to maintain predictability and stability of resources, especially during the pandemic, XVFC has recommended maintaining the vertical devolution at 41 per cent – the same as in our report for 2020-21. It is at the same level of 42 per cent of the divisible pool as recommended by FC-XIV. However, it has made the required adjustment of about 1 per cent due to the changed status of the erstwhile State of Jammu and Kashmir into the new Union Territories of Ladakh and Jammu and Kashmir.
- In XVFC’s assessment, gross tax revenues for 5-year period is expected to be 135.2 lakh crore. Out of that, Divisible pool (after deducting cesses and surcharges & cost of collection) is estimated to be 103 lakh crore.
- States’ share at 41 per cent of divisible pool comes to 42.2 lakh crore for 2021-26 period.
- Including total grants of Rs. 10.33 lakh crore (details later) and tax devolution of Rs. 42.2 lakh crore, aggregate transfers to States is estimated to remain at around 50.9 per cent of the divisible pool during 2021-26 period.
- Total XVFC transfers (devolution + grants) constitutes about 34 per cent of estimated Gross Revenue Receipts of the Union leaving adequate fiscal space for the Union to meet its resource requirements and spending obligations on national development priorities.
Based on principles of need, equity and performance, overall devolution formula is as follows.
|Forest & ecology||10.0|
|Tax & fiscal efforts||2.5|
- On horizontal devolution, while XVFC agreed that the Census 2011 population data better represents the present need of States, to be fair to, as well as reward, the States which have done better on the demographic front, XVFC has assigned a 12.5 per cent weight to the demographic performance criterion.
- XVFC has re-introduced tax effort criterion to reward fiscal performance.
Revenue deficit grants: Based on uniform norms of assessing revenues and expenditure of the States and the Union, XVFC has recommended total revenue deficit grants (RDG) of Rs 2,94,514 crore over the award period for seventeen States.
- The total size of the grant to local governments should be Rs. 4,36,361 crore for the period 2021-26.
- Of these total grants, Rs. 8,000 crore is performance-based grants for incubation of new cities and Rs. 450 crore is for shared municipal services. A sum of Rs. 2,36,805 crore is earmarked for rural local bodies, Rs.1,21,055 crore for urban local bodies and Rs. 70,051 crore for health grants through local governments.
- Urban local bodies have been categorised into two groups, based on population, and different norms have been used for flow of grants to each, based on their specific needs and aspirations. Basic grants are proposed only for cities/towns having a population of less than a million. For Million-Plus cities, 100 per cent of the grants are performance-linked through the Million-Plus Cities Challenge Fund (MCF).
- XVFC has recommend that health spending by States should be increased to more than 8 per cent of their budget by 2022.
- Given the inter-State disparity in the availability of medical doctors, it is essential to constitute an All India Medical and Health Service as is envisaged under Section 2A of the All-India Services Act, 1951.
- The total grants-in-aid support to the health sector over the award period works out to Rs. 1,06,606 crore, which is 10.3 per cent of the total grants-in-aid recommended by XVFC. The grants for the health sector will be unconditional.
- XVFC has recommend health grants aggregating to Rs. 70,051 crore for urban health and wellness centres (HWCs), building-less sub centre, PHCs, CHCs, block level public health units, support for diagnostic infrastructure for the primary healthcare activities and conversion of rural sub centres and PHCs to HWCs. These grants will be released to the local governments.
- Out of the remaining grant of Rs. 31,755 crore for the health sector (total of Rs. 1,06,606 crore minus Rs. 70, 051 crore through local bodies and Rs.4800 crore state-specific grants), XVFC has recommended Rs. 15,265 crore for critical care hospitals. This includes Rs. 13,367 crore for general States and Rs 1,898 crore for NEH States.
- XVFC has recommended Rs. 13,296 crore for training of the allied healthcare workforce. Out of this, Rs. 1,986 crore will be for NEH States and Rs. 11,310 crore for general States.
Performance incentives and grants:
- XVFC has recommended grants of Rs. 4,800 crore (Rs. 1,200 crore each year) from 2022-23 to 2025-26 for incentivising the States to enhance educational outcomes.
- XVFC has recommended Rs. 6,143 crore for online learning and development of professional courses (medical and engineering) in regional languages (matribhasha) for higher education in India.
- XVFC has recommended that Rs. 45,000 crore be kept as performance-based incentive for all the States for carrying out agricultural reforms
- for amending their land-related laws on the lines of NITI Aayog’s model law
- Incentive-based grants to States that maintain and augment groundwater stock.
- growth in agricultural exports
- production of oilseeds, pulses and wood and wood-based products
Defence and Internal Security
- Keeping in view the extant strategic requirements for national defence in the global context, XVFC has, in its approach, re-calibrated the relative shares of Union and States in gross revenue receipts. This will enable the Union to set aside resources for the special funding mechanism that XVFC has proposed.
- The Union Government may constitute in the Public Account of India, a dedicated non-lapsable fund, Modernisation Fund for Defence and Internal Security (MFDIS). The total indicative size of the proposed MFDIS over the period 2021-26 is Rs. 2,38,354 crore.
Disaster Risk Management:
- Mitigation Funds should be set up at both the national and State levels, in line with the provisions of the Disaster Management Act. The Mitigation Fund should be used for those local level and community-based interventions which reduce risks and promote environment-friendly settlements and livelihood practices.
- For SDRMF, XVFC has recommended the total corpus of Rs.1,60,153 crore for States for disaster management for the duration of 2021-26, of which the Union’s share is Rs. 1,22,601 crore and States’ share is Rs. 37,552 crore.
- XVFC has recommended six earmarked allocations for a total amount of Rs. 11,950 crore for certain priority areas, namely, two under the NDRF (Expansion and Modernisation of Fire Services and Resettlement of Displaced People affected by Erosion) and four under the NDMF (Catalytic Assistance to Twelve Most Drought-prone States, Managing Seismic and Landslide Risks in Ten Hill States, Reducing the Risk of Urban Flooding in Seven Most Populous Cities and Mitigation Measures to Prevent Erosion).
- Provided range for fiscal deficit and debt path of both the Union and States.
- Additional borrowing room to States based on performance in power sector reforms.
- A threshold amount of annual appropriation should be fixed below which the funding for a CSS may be stopped. Below the stipulated threshold, the administrating department should justify the need for the continuation of the scheme. As the life cycle of ongoing schemes has been made co-terminus with the cycle of Finance Commissions, the third-party evaluation of all CSSs should be completed within a stipulated timeframe. The flow of monitoring information should be regular and should include credible information on output and outcome indicators.
- In view of the uncertainty that prevails at the stage that XVFC have done its analysis, as well as the contemporary realities and challenges, we recognise that the FRBM Act needs a major restructuring and recommend that the time-table for defining and achieving debt sustainability may be examined by a High-powered Inter-governmental Group. This High-powered Group can craft the new FRBM framework and oversee its implementation. It is important that the Union and State Governments amend their FRBM Acts, based on the recommendations of the Group, so as to ensure that their legislations are consistent with the fiscal sustainability framework put in place. This High-powered Inter-Governmental Group could also be tasked to oversee the implementation of the 15th Finance Commission’s diverse recommendations.
- State Governments may explore formation of independent public debt management cells which will chart their borrowing programme efficiently.
Presenting the first ever digital Union Budget, Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman stated that India’s fight against COVID-19 continues into 2021 and that this moment in history, when the political, economic, and strategic relations in the post-COVID world are changing, is the dawn of a new era – one in which India is well-poised to truly be the land of promise and hope.
6 pillars of the Union Budget 2021-22:
- Health and Wellbeing
- Physical & Financial Capital, and Infrastructure
- Inclusive Development for Aspirational India
- Reinvigorating Human Capital
- Innovation and R&D
- Minimum Government and Maximum Governance
1. Health and Wellbeing
- Rs. 2,23,846 crore outlay for Health and Wellbeing in BE 2021-22 as against Rs. 94,452 crore in BE 2020-21 – an increase of 137%
- Focus on strengthening three areas: Preventive, Curative, and Wellbeing
- Steps being taken for improving health and wellbeing:
- Rs. 35,000 crore for COVID-19 vaccine in BE 2021-22
- The Made-in-India Pneumococcal Vaccine to be rolled out across the country, from present 5 states – to avert 50,000 child deaths annually
- Rs. 64,180 crore outlay over 6 years for PM AatmaNirbhar Swasth Bharat Yojana – a new centrally sponsored scheme to be launched, in addition to NHM
- Main interventions under PM AatmaNirbhar Swasth Bharat Yojana:
- National Institution for One Health
- 17,788 rural and 11,024 urban Health and Wellness Centers
- 4 regional National Institutes for Virology
- 15 Health Emergency Operation Centers and 2 mobile hospitals
- Integrated public health labs in all districts and 3382 block public health units in 11 states
- Critical care hospital blocks in 602 districts and 12 central institutions
- Strengthening of the National Centre for Disease Control (NCDC), its 5 regional branches and 20 metropolitan health surveillance units
- Expansion of the Integrated Health Information Portal to all States/UTs to connect all public health labs
- 17 new Public Health Units and strengthening of 33 existing Public Health Units
- Regional Research Platform for WHO South-East Asia Region
- 9 Bio-Safety Level III laboratories
Nutrition: Mission Poshan 2.0 to be launched:
- To strengthen nutritional content, delivery, outreach, and outcome
- Merging the Supplementary Nutrition Programme and the Poshan Abhiyan
- Intensified strategy to be adopted to improve nutritional outcomes across 112 Aspirational Districts
Universal Coverage of Water Supply
- Rs. 2,87,000 crore over 5 years for Jal Jeevan Mission (Urban) – to be launched with an aim to provide:
- 2.86 crore household tap connections
- Universal water supply in all 4,378 Urban Local Bodies
- Liquid waste management in 500 AMRUT cities
Swachch Bharat, Swasth Bharat
- Rs. 1,41,678 crore over 5 years for Urban Swachh Bharat Mission 2.0
- Main interventions under Swachh Bharat Mission (Urban) 2.0:
- Complete faecal sludge management and waste water treatment
- Source segregation of garbage
- Reduction in single-use plastic
- Reduction in air pollution by effectively managing waste from construction-and-demolition activities
- Bio-remediation of all legacy dump sites
Clean Air: Rs. 2,217 crore to tackle air pollution, for 42 urban centers with a million-plus population
- Voluntary vehicle scrapping policy to phase out old and unfit vehicles
- Fitness tests in automated fitness centres:
- After 20 years in case of personal vehicles
- After 15 years in case of commercial vehicles
2. Physical and Financial Capital and Infrastructure
Production Linked Incentive scheme (PLI)
- Rs. 1.97 lakh crore in next 5 years for PLI schemes in 13 Sectors
- To create and nurture manufacturing global champions for an AatmaNirbhar Bharat
- To help manufacturing companies become an integral part of global supply chains, possess core competence and cutting-edge technology
- To bring scale and size in key sectors
- To provide jobs to the youth
- Mega Investment Textiles Parks (MITRA) scheme, in addition to PLI:
- 7 Textile Parks to be established over 3 years
- Textile industry to become globally competitive, attract large investments and boost employment generation & exports
- National Infrastructure Pipeline (NIP) expanded to 7,400 projects:
- Around 217 projects worth Rs. 1.10 lakh crore completed
- Measures in three thrust areas to increase funding for NIP:
- Creation of institutional structures:
- Rs. 20,000 crore to set up and capitalise a Development Financial Institution(DFI) – to act as a provider, enabler and catalyst for infrastructure financing
- Rs. 5 lakh crore lending portfolio to be created under the proposed DFI in 3 years
- Debt Financing by Foreign Portfolio Investors to be enabled by amending InvITs’ and REITs’ legislations
- Big thrust on monetizing assets
- National Monetization Pipeline to be launched
- Important asset monetization measures:
- 5 operational toll roads worth Rs. 5,000 crore being transferred to the NHAIInvIT
- Transmission assets worth Rs. 7,000 crore to be transferred to the PGCILInvIT
- Dedicated Freight Corridor assets to be monetized by Railways, for operations and maintenance, after commissioning
- Next lot of Airports to be monetized for operations and management concession
- Other core infrastructure assets to be rolled out under the Asset Monetization Programme:
- Oil and Gas Pipelines of GAIL, IOCL and HPCL
- AAI Airports in Tier II and III cities
- Other Railway Infrastructure Assets
- Warehousing Assets of CPSEs such as Central Warehousing Corporation and NAFED
- Sports Stadiums
- Enhancing the share of capital expenditure
- Creation of institutional structures: Infrastructure Financing
- Big thrust on monetizing assets
- Sharp Increase in Capital Budget
- Rs. 5.54 lakh crore capital expenditure in BE 2021-22 – sharp increase of 34.5% over Rs. 4.12 lakh crore allocated in BE 2020-21 :
- Over Rs. 2 lakh crore to States and Autonomous Bodies for their Capital Expenditure.
- Over Rs. 44,000 crore for the Department of Economic Affairs to provide for projects/programmes/departments exhibiting good progress on Capital Expenditure
- Roads and Highways Infrastructure
- Rs. 1,18,101 lakh crore, highest ever outlay, for Ministry of Road Transport and Highways – of which Rs. 1,08,230 crore is for capital
- Under the Rs. 5.35 lakh crore Bharatmala Pariyojana, more than 13,000 km length of roads worth Rs. 3.3 lakh crore awarded for construction:
- 3,800 km have already been constructed
- Another 8,500 km to be awarded for construction by March 2022
- Additional 11,000 km of national highway corridors to be completed by March 2022
- Economic corridors being planned:
- Rs. 1.03 lakh crore outlay for 3,500 km of NHs in Tamil Nadu
- Rs. 65,000 crore investment for 1,100 km of NHs in Kerala
- Rs. 25,000 crore for 675 km of NHs in West Bengal
- Over Rs. 34,000 crore to be allocated for 1300 km of NHs to be undertaken in next 3 years in Assam, in addition to Rs. 19,000 crore works of NHs currently in progress in the State
- Flagship Corridors/Expressways:
- Delhi-Mumbai Expressway – Remaining 260 km to be awarded before 31.3.2021
- Bengaluru-Chennai Expressway – 278 km to be initiated in the current FY; construction to begin in 2021-22
- Kanpur-Lucknow Expressway – 63 km expressway providing an alternate route to NH 27 to be initiated in 2021-22
- Delhi-Dehradun economic corridor – 210 km to be initiated in the current FY; construction to begin in 2021-22
- Raipur-Vishakhapatnam – 464 km passing through Chhattisgarh, Odisha and North Andhra Pradesh, to be awarded in the current year; construction to start in 2021-22
- Chennai-Salem corridor – 277 km expressway to be awarded and construction to start in 2021-22
- Amritsar-Jamnagar – Construction to commence in 2021-22
- Delhi-Katra – Construction will commence in 2021-22
- Advanced Traffic management system in all new 4 and 6-lane highways:
- Speed radars
- Variable message signboards
- GPS enabled recovery vans will be installed
- Railway Infrastructure
- Rs. 1,10,055 crore for Railways of which Rs. 1,07,100 crore is for capital expenditure
- National Rail Plan for India (2030): to create a ‘future ready’ Railway system by 2030
- 100% electrification of Broad-Gauge routes to be completed by December, 2023
- Broad Gauge Route Kilometers (RKM) electrification to reach 46,000 RKM, i.e. 72% by end of 2021
- Western Dedicated Freight Corridor (DFC) and Eastern DFC to be commissioned by June 2022, to bring down the logistic costs – enabling Make in India strategy
- Additional initiatives proposed:
- The Sonnagar-Gomoh Section (263.7 km) of Eastern DFC to be taken up in PPP mode in 2021-22
- Future dedicated freight corridor projects –
- East Coast corridor from Kharagpur to Vijayawada
- East-West Corridor from Bhusaval to Kharagpur to Dankuni
- North-South corridor from Itarsi to Vijayawada
- Measures for passenger convenience and safety:
- Aesthetically designed Vista Dome LHB coach on tourist routes for better travel
- High density network and highly utilized network routes to have an indigenously developed automatic train protection system, eliminating train collision due to human error
- Raising the share of public transport in urban areas by expansion of metro rail network and augmentation of city bus service
- Rs. 18,000 crore for a new scheme, to augment public bus transport:
- Innovative PPP models to run more than 20,000 buses
- To boost automobile sector, provide fillip to economic growth, create employment opportunities for our youth
- A total of 702 km of conventional metro is operational and another 1,016 km of metro and RRTS is under construction in 27 cities
- ‘MetroLite’ and ‘MetroNeo’ technologies to provide metro rail systems at much lesser cost with similar experience in Tier-2 cities and peripheral areas of Tier-1 cities.
- Central counterpart funding to:
- Kochi Metro Railway Phase-II of 11.5 km at a cost of Rs. 1957.05 crore
- Chennai Metro Railway Phase –II of 118.9 km at a cost of Rs. 63,246 crore
- Bengaluru Metro Railway Project Phase 2A and 2B of 58.19 km at a cost of Rs. 14,788 crore
- Nagpur Metro Rail Project Phase-II and Nashik Metro at a cost of Rs. 5,976 crore and Rs. 2,092 crore respectively.
- 139 Giga Watts of installed capacity and 1.41 lakh circuit km of transmission lines added, and additional 2.8 crore households connected in past 6 years
- Consumers to have alternatives to choose the Distribution Company for enhancing competitiveness
- Rs. 3,05,984 crore over 5 years for a revamped, reforms-based and result-linked new power distribution sector scheme
- A comprehensive National Hydrogen Energy Mission 2021-22 to be launche
Ports, Shipping, Waterways
- Rs. 2,000 crore worth 7 projects to be offered in PPP-mode in FY21-22 for operation of major ports
- Indian shipping companies to get Rs. 1624 crore worth subsidy support over 5 years in global tenders of Ministries and CPSEs
- To double the recycling capacity of around 4.5 Million Light Displacement Tonne (LDT) by 2024; to generate an additional 1.5 lakh jobs
Petroleum & Natural Gas
- Extention of Ujjwala Scheme to cover 1 crore more beneficiaries
- To add 100 more districts to the City Gas Distribution network in next 3 years
- A new gas pipeline project in J&K
- An independent Gas Transport System Operator to be set up for facilitation and coordination of booking of common carrier capacity in all-natural gas pipelines on a non-discriminatory open access basis
- A single Securities Markets Code to be evolved
- Support for development of a world class Fin-Tech hub at the GIFT-IFSC
- A new permanent institutional framework to help in development of Bond market by purchasing investment grade debt securities both in stressed and normal times
- Setting up a system of Regulated Gold Exchanges: SEBI to be notified as a regulator and Warehousing Development and Regulatory Authority to be strengthened
- To develop an investor charter as a right of all financial investors
- Capital infusion of Rs. 1,000 crore to Solar Energy Corporation of India and Rs. 1,500 crore to Indian Renewable Energy Development Agency
Increasing FDI in Insurance Sector: To increase the permissible FDI limit from 49% to 74% and allow foreign ownership and control with safeguards
Stressed Asset Resolution: Asset Reconstruction Company Limited and Asset Management Company to be set up
Recapitalization of PSBs: Rs. 20,000 crore in 2021-22 to further consolidate the financial capacity of PSBs
- Amendments to the DICGC Act, 1961, to help depositors get an easy and time-bound access to their deposits to the extent of the deposit insurance cover
- Minimum loan size eligible for debt recovery under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 proposed to be reduced from Rs. 50 lakh to Rs. 20 lakh for NBFCs with minimum asset size of Rs. 100 crore
- To decriminalize the Limited Liability Partnership (LLP) Act, 2008
- Easing Compliance requirement of Small companies by revising their definition under Companies Act, 2013 by increasing their thresholds for Paid up capital from “not exceeding Rs. 50 Lakh” to “not exceeding Rs. 2 Crore” and turnover from “not exceeding Rs. 2 Crore” to “not exceeding Rs. 20 Cr”.
- Promoting start-ups and innovators by incentivizing the incorporation of One Person Companies (OPCs):
- Allowing their growth without any restrictions on paid up capital and turnover
- Allowing their conversion into any other type of company at any time,
- Reducing the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days and
- Allowing Non Resident Indians (NRIs) to incorporate OPCs in India.
- To ensure faster resolution of cases by:
- Strengthening NCLT framework
- Implementation of e-Courts system
- Introduction of alternate methods of debt resolution and special framework for MSMEs
- Launch of data analytics, artificial intelligence, machine learning driven MCA21 Version 3.0 in 2021-22
Disinvestment and Strategic Sale
- Rs. 1,75,000 crore estimated receipts from disinvestment in BE 2020-21
- Strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited etc. to be completed in 2021-22.
- Other than IDBI Bank, two Public Sector Banks and one General Insurance company to be privatized
- IPO of LIC in 2021-22
- New policy for Strategic Disinvestment approved; CPSEs except in four strategic areas to be privatized
- NITI Aayog to work out on the next list of CPSEs to be taken up for strategic disinvestment
- Incentivizing States for disinvestment of their Public Sector Companies, using central funds
- Special Purpose Vehicle in the form of a company to monetize idle land
- Introducing a revised mechanism for ensuring timely closure of sick or loss making CPSEs
Government Financial Reforms
- Treasury Single Account (TSA) System for Autonomous Bodies to be extended for universal application
- Separate Administrative Structure to streamline the ‘Ease of Doing Business’ for Cooperatives
Inclusive Development for Aspirational India
- Ensured MSP at minimum 1.5 times the cost of production across all commodities.
- SWAMITVA Scheme to be extended to all States/UTs, 1.80 lakh property-owners in 1,241 villages have already been provided cards
- Agricultural credit target enhanced to Rs. 16.5 lakh crore in FY22 – animal husbandry, dairy, and fisheries to be the focus areas
- Rural Infrastructure Development Fund to be enhanced to Rs. 40,000 crore from Rs. 30,000 crore
- To double the Micro Irrigation Fund to Rs. 10,000 crore
- ‘Operation Green Scheme’ to be extended to 22 perishable products, to boost value addition in agriculture and allied products
- Around 1.68 crore farmers registered and Rs. 1.14 lakh crore of trade value carried out through e-NAMs; 1,000 more mandis to be integrated with e-NAM to bring transparency and competitiveness.
- APMCs to get access to the Agriculture Infrastructure Funds for augmenting infrastructure facilities
- Investments to develop modern fishing harbours and fish landing centres – both marine and inland
- 5 major fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat to be developed as hubs of economic activity
- Multipurpose Seaweed Park in Tamil Nadu to promote seaweed cultivation
Migrant Workers and Labourers
- One Nation One Ration Card scheme for beneficiaries to claim rations anywhere in the country – migrant workers to benefit the most
- Scheme implementation so far covered 86% of beneficiaries across 32 States and UTs
- Remaining 4 states to be integrated in next few months
- Portal to collect information on unorganized labour force, migrant workers especially, to help formulate schemes for them
- Implementation of 4 labour codes underway
- Social security benefits for gig and platform workers too
- minimum wages and coverage under the Employees State Insurance Corporation applicable for all categories of workers
- Women workers allowed in all categories, including night-shifts with adequate protection
- Compliance burden on employers reduced with single registration and licensing, and online returns
- Under Stand Up India Scheme for SCs, STs and women,
- Margin money requirement reduced to 15%
- To also include loans for allied agricultural activities
- Rs. 15,700 crore budget allocation to MSME Sector, more than double of this year’s BE
- Reinvigorating Human Capital
- 15,000 schools to be strengthened by implementing all NEP components. Shall act as exemplar schools in their regions for mentoring others
- 100 new Sainik Schools to be set up in partnership with NGOs/private schools/states
- Legislation to be introduced to setup Higher Education Commission of India as an umbrella body with 4 separate vehicles for standard-setting, accreditation, regulation, and funding
- Creation of formal umbrella structure to cover all Govt. colleges, universities, research institutions in a city for greater synergy.
- Glue grant to implement the same across 9 cities
- Central University to come up in Leh for accessibility of higher education in Ladakh
Scheduled Castes and Scheduled Tribes Welfare
- 750 Eklavya model residential schools in tribal areas:
- Unit cost of each school to be increased to Rs. 38 crore
- For hilly and difficult areas, to Rs. 48 crore
- Focus on creation of robust infrastructure facilities for tribal students
- Revamped Post Matric Scholarship Scheme for welfare of SCs
- Rs. 35,219 crore enhanced Central Assistance for 6 years till 2025-2026
- 4 crore SC students to benefit
- Proposed amendment to Apprenticeship Act to enhance opportunities for youth
- Rs. 3000 crore for realignment of existing National Apprenticeship Training Scheme (NATS) towards post-education apprenticeship, training of graduates and diploma holders in Engineering
- Initiatives for partnership with other countries in skilling to be taken forward, similar to partnership:
- With UAE to benchmark skill qualifications, assessment, certification, and deployment of certified workforce
- With Japan for a collaborative Training Inter Training Programme (TITP) to transfer of skills, technique and knowledge
- Innovation and R&D
- Modalities of National Research Foundation announced in July 2019 –
- Rs. 50,000 crore outlay over 5 years
- To strengthen overall research ecosystem with focus on national-priority thrust areas
- Rs. 1,500 crore for proposed scheme to promote digital modes of payment
- National Language Translation Mission (NTLM) to make governance-and-policy related knowledge available in major Indian languages
PSLV-CS51 to be launched by New Space India Limited (NSIL) carrying Brazil’s Amazonia Satellite and some Indian satellites
- As part of the Gaganyaan mission activities:
- 4 Indian astronauts being trained on Generic Space Flight aspects, in Russia
- First unmanned launch is slated for December 2021
- Rs. 4,000 crore over five years for Deep Ocean Mission survey exploration and conservation of deep sea biodiversity
- Minimum Government, Maximum Governance
- Measures being undertaken to bring reforms in Tribunals to ensure speedy justice
- National Commission for Allied Healthcare Professionals already introduced to ensure transparent and efficient regulation of the 56 allied healthcare professions
- The National Nursing and Midwifery Commission Bill introduced for the same in nursing profession
Proposed Conciliation Mechanism with mandate for quick resolution of contractual disputes with CPSEs
- Rs. 3,768 crore allocated for first digital census in the history of India
- Rs. 300 crore grant to the Government of Goa for the diamond jubilee celebrations of the state’s liberation from Portuguese
- Rs. 1,000 crore for the welfare of Tea workers especially women and their children in Assam and West Bengal through a special scheme
- Amendment to FRBM Act proposed to achieve targeted Fiscal Deficit levels
- The Contingency Fund of India is to be augmented from Rs. 500 crore to Rs. 30,000 crore through Finance Bill
Net borrowing of the States:
- Net borrowing for the states allowed at 4% of GSDP for the year 2021-2022 as per recommendation of 15th FC
- Part of this earmarked for incremental capital expenditure
- Additional borrowing ceiling of 0.5% of GSDP will be provided subject to conditions
- States expected to reach a fiscal deficit of 3% of GSDP by 2023-24, as recommended by the 15th Finance Commission
Fifteenth Finance Commission:
- The final report covering 2021-26 was submitted to the President, retaining vertical shares of states at 41%
- Funds to UTs of Jammu and Kashmir and Ladakh would be provided by Centre
- On the Commission’s recommendation, Rs. 1,18,452 crore have been provided as Revenue Deficit Grant to 17 states in 2021-22, as against Rs. 74,340 crore to 14 states in 2020-21
Vision of a transparent, efficient tax system to promote investments and employment in the country with minimum burden on tax payers
- Direct Taxes
- Corporate tax rate slashed to make it among the lowest in the world
- Burden of taxation on small taxpayers eased by increasing rebates
- Return filers almost doubled to 6.48 crore in 2020 from 3.31 crore in 2014
- Faceless Assessment and Faceless Appeal introduced
Relief to Senior Citizens: Exemption from filing tax returns for senior citizens over 75 years of age and having only pension and interest income; tax to be deducted by paying bank
Reducing Disputes, Simplifying Settlement:
- Time limit for re-opening cases reduced to 3 years from 6 years
- Serious tax evasion cases, with evidence of concealment of income of Rs. 50 lakh or more in a year, to be re-opened only up to 10 years, with approval of the Principal Chief Commissioner
- Dispute Resolution Committee to be set up for taxpayers with taxable income up to Rs. 50 lakh and disputed income up to Rs. 10 lakh
- National Faceless Income Tax Appellate Tribunal Centre to be established
- Over 1 lakh taxpayers opted to settle tax disputes of over Rs. 85,000 crore through Vivad Se Vishwas Scheme until 30th January 2021
Relaxation to NRIs: Rules to be notified for removing hardships faced by NRIs regarding their foreign retirement accounts
Incentivising Digital Economy: Limit of turnover for tax audit increased to Rs. 10 crore from Rs. 5 crore for entities carrying out 95% transactions digitally
Relief for Dividend:
- Dividend payment to REIT/ InvIT exempt from TDS
- Advance tax liability on dividend income only after declaration/ payment of dividend
- Deduction of tax on dividend income at lower treaty rate for Foreign Portfolio Investors
Attracting Foreign Investment for Infrastructure:
- Infrastructure Debt Funds made eligible to raise funds by issuing Zero Coupon Bonds
- Relaxation of some conditions relating to prohibition on private funding, restriction on commercial activities, and direct investment
Supporting ‘Housing for All’:
- Additional deduction of interest, up to Rs. 1.5 lakh, for loan taken to buy an affordable house extended for loans taken till March 2022
- Tax holiday for Affordable Housing projects extended till March 2022
- Tax exemption allowed for notified Affordable Rental Housing Projects
Tax incentives to IFSC in GIFT City:
- Tax holiday for capital gains from incomes of aircraft leasing companies
- Tax exemptions for aircraft lease rentals paid to foreign lessors
- Tax incentive for relocating foreign funds in the IFSC
- Tax exemption to investment division of foreign banks located in IFSC
Ease of Filing Taxes: Details of capital gains from listed securities, dividend income, interest from banks, etc. to be pre-filled in returns
Relief to Small Trusts: Exemption limit of annual receipt revised from ₹1 crore to ₹5 crore for small charitable trusts running schools and hospitals
- Late deposit of employee’s contribution by the employer not to be allowed as deduction to the employer
- Eligibility for tax holiday claim for start-ups extended by one more year
- Capital gains exemption for investment in start-ups extended till 31st March, 2022
- Indirect Taxes
GST: Measures taken till date:
- Nil return through SMS
- Quarterly return and monthly payment for small taxpayers
- Electronic invoice system
- Validated input tax statement
- Pre-filled editable GST return
- Staggering of returns filing
- Enhancement of capacity of GSTN system
- Use of deep analytics and AI to identify tax evaders
Custom Duty Rationalization:
- Twin objectives: Promoting domestic manufacturing and helping India get onto global value chain and export better
- 80 outdated exemptions already eliminated
- Revised, distortion-free customs duty structure to be put in place from 1st October 2021 by reviewing more than 400 old exemptions
- New customs duty exemptions to have validity up to the 31st March following two years from its issue date
Electronic and Mobile Phone Industry:
- Some exemptions on parts of chargers and sub-parts of mobiles withdrawn
- Duty on some parts of mobiles revised to 2.5% from ‘nil’ rate
Iron and Steel:
- Customs duty reduced uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and stainless steels
- Duty on steel scrap exempted up to 31st March, 2022
- Anti-Dumping Duty (ADD) and Counter-Veiling Duty (CVD) revoked on certain steel products
- Duty on copper scrap reduced from 5% to 2.5%
Textiles: Basic Customs Duty (BCD) on caprolactam, nylon chips and nylon fiber & yarn reduced to 5%
- Calibrated customs duty rates on chemicals to encourage domestic value addition and to remove inversions
- Duty on Naptha reduced to 2.5%
Gold and Silver: Custom duty on gold and silver to be rationalized
- Phased manufacturing plan for solar cells and solar panels to be notified
- Duty on solar invertors raised from 5% to 20%, and on solar lanterns from 5% to 15% to encourage domestic production
- Tunnel boring machine to now attract a customs duty of 7.5%; and its parts a duty of 2.5%
- Duty on certain auto parts increased to general rate of 15%
- Duty on steel screws and plastic builder wares increased to 15%
- Prawn feed to attract customs duty of 15% from earlier rate of 5%
- Exemption on import of duty-free items rationalized to incentivize exporters of garments, leather, and handicraft items
- Exemption on imports of certain kind of leathers withdrawn
- Customs duty on finished synthetic gem stones raised to encourage domestic processing
- Customs duty on cotton increased from nil to 10% and on raw silk and silk yarn from 10% to 15%.
- Withdrawal of end-use based concession on denatured ethyl alcohol
- Agriculture Infrastructure and Development Cess (AIDC) on a small number of items
Rationalization of Procedures and Easing of Compliance:
- Turant Customs initiative, a Faceless, Paperless, and Contactless Customs measures
- New procedure for administration of Rules of Origin
Achievements and Milestones during the COVID-19 pandemic
- Pradhan Mantri Garib Kalyan Yojana (PMGKY):
- Valued at Rs. 2.76 lakh crore
- Free food grain to 80 crore people
- Free cooking gas for 8 crore families
- Direct cash to over 40 crore farmers, women, elderly, the poor and the needy
- AatmaNirbhar Bharat package (ANB 1.0):
- Estimated at Rs. 23 lakh crore – more than 10% of GDP
- PMGKY, three ANB packages (ANB 1.0, 2.0, and 3.0), and announcements made later were like 5 mini-budgets in themselves
- Rs. 27.1 lakh crore worth of financial impact of all three ANB packages including RBI’s measures – amounting to more than 13% of GDP
- Structural reforms:
- One Nation One Ration Card
- Agriculture and Labour Reforms
- Redefinition of MSMEs
- Commercialisation of the Mineral Sector
- Privatisation of Public Sector Undertakings
- Production Linked Incentive Schemes
- Status of India’s fight against COVID-19:
- 2 Made-in-India vaccines – medically safeguarding citizens of India and those of 100-plus countries against COVID-19
- 2 or more new vaccines expected soon
- Lowest death rate per million and the lowest active cases
2021 – Year of milestones for Indian history
- 75th year of India’s independence
- 60 years of Goa’s accession to India
- 50 years of the 1971 India-Pakistan War
- Year of the 8th Census of Independent India
- India’s turn at the BRICS Presidency
- Year for Chandrayaan-3 Mission
- Haridwar MahaKumbh
Vision for AatmaNirbhar Bharat
- AatmaNirbharta – not a new idea – ancient India was self-reliant and a business epicentre of the world
- AtmaNirbhar Bharat – an expression of 130 crore Indians who have full confidence in their capabilities and skills
- Strengthening the Sankalp of:
- Nation First
- Doubling Farmer’s Income
- Strong Infrastructure
- Healthy India
- Good Governance
- Opportunities for Youth
- Education for All
- Women Empowerment
- Inclusive Development
- 13 promises made in the Union Budget 2015-16, and resonating with the vision of AatmaNirbharta, to materialise during the AmrutMahotsav of 2022 – on the 75th year of our independence
World Wetlands Day: 2nd Feb
- India gets its first Centre for Wetland Conservation and Management (CWCM), as a part of the National Centre for Sustainable Coastal Management (NCSCM). It would address specific research needs and knowledge gaps and will aid in the application of integrated approaches for conservation, management and wise use of the wetlands.
- India has nearly 4.6% of its land as wetlands, covering an area of 15.26 million hectares and has 42 sites designated as Wetlands of International Importance (Ramsar Sites), with a surface area of 1.08 million hectares. The year 2021 also commemorates the 50th anniversary of the signing of the Ramsar Convention on Wetlands on 2 February 1971 in Ramsar, Iran, celebrated annually as World Wetlands Day.
Launch of Mega Investment Textiles Parks (MITRA) scheme
- To make Indian textile industry globally competitive
- Attract large investments
- Boost employment generation and exports
This will create world class infrastructure with plug and play facilities to enable create global champions in exports. MITRA will be launched in addition to the Production Linked Incentive Scheme (PLI).
MoU signed with 21 States/UTs for better functioning of Eklavya Model Residential Schools
The signing of the MoU is the first step towards positioning of EMRSs as harbinger of tribal education in the remote tribal hinterlands and it would bring all States on a uniform and mutually agreed platform.
- EMRSs are a flagship intervention of the Ministry of Tribal Affairs to provide quality education to tribal students in remote tribal areas. The programme being implemented since 1998 have created a niche in the tribal education landscape of the country.
- However, the scheme was revamped in 2018 to improve the geographical outreach of the programme and introduce several qualitative changes to improve learning outcomes in the schools.
- Currently there are 588 schools sanctioned across the country in 28 States/UT with around 73391 students enrolled in the Schools. Another 152 schools shall be sanctioned by the year 2022.
National Education Society for Tribal Students (NESTS)
- NESTS was established in April, 2019 as an autonomous organization under the Ministry of Tribal Affairs to run and manage the schools.
- Ever since then, In order to ensure adequate availability of financial resources in the schools, the recurring cost per annum per student was enhanced to Rs. 1,09,000.00 in 2018-19 from the existing unit cost of Rs. 61,500.00 in 2017-18.
- With the increase in recurring cost and the construction grant it was imperative that the qualitative improvements in the running and management of the schools are initiated simultaneously.
- With the execution of MoU, the schools shall be eligible for higher recurring costs so as to ensure qualitative improvements in the schools.
6 New Circles of Archaeological Survey of India created
- Rajkot Circle, Gujarat – by bifurcation of Vadodara Circle.
- Jabalpur Circle, Madhya Pradesh – by bifurcation of Bhopal Circle.
- Tiruchirappalli (Trichy) Circle, Tamil Nadu – by bifurcation of Chennai & Thrissur Circle.
- Meerut Circle, Uttar Pradesh – by bifurcation of Agra circle
- Jhansi Circle, Uttar Pradesh – by bifurcation of Lucknow Circle.
- Raiganj Circle, West Bengal – by bifurcation of Kolkata Circle.
One District One Product Scheme: It is an initiative which is seen as a transformational step forward towards realizing the true potential of a district, fuel economic growth and generate employment and rural entrepreneurship, taking us to the goal of AtmaNirbhar Bharat.
- One District One Product (ODOP) initiative is operationally merged with ‘Districts as Export Hub’ initiative being implemented by DGFT, Department of Commerce, with Department for Promotion of Industry and Internal Trade (DPIIT) as a major stakeholder.
- The objective is to convert each District of the country into an Export Hub by identifying products with export potential in the District, addressing bottlenecks for exporting these products, supporting local exporters/manufacturers to scale up manufacturing, and find potential buyers outside India with the aim of promoting exports, promoting manufacturing & services industry in the District and generate employment in the District.
India to host Indian Ocean Region Defence Ministers’ Conclave on the sidelines of Aero India 2021
- On February 04, 2021 on the margins of Aero India 2021 – Asia’s largest Aero show
- The broad theme of the conclave will be ‘Enhanced Peace, Security and Cooperation in the Indian Ocean’.
- The conclave is an initiative to promote dialogue in an institutional, economic and cooperative environment that can foster the development of peace, stability and prosperity in the Indian Ocean region. The conclave would address aspects related to Defence Industry co-operation amongst participating countries, sharing of resources available in Indian defence shipyards for design & shipbuilding, Indian Ports with friendly countries, Information-sharing towards increased maritime domain awareness, maritime surveillance and co-operation, Humanitarian Assistance & Disaster Relief (HADR), Marine Pollution Response activities, Development of technologies and capabilities for harnessing marine resources, etc.
Preliminary survey shows deposits of Lithium in Mandya district of Karnataka: Presence of Lithium resources of 1,600 tonnes (inferred category) in the pegmatites of Marlagalla – Allapatna area, Mandya district, Karnataka
- Lithium is a key element for new technologies and finds its use in ceramics, glass, telecommunication and aerospace industries.
- The well-known uses of Lithium are in Lithium ion batteries, lubricating grease, high energy additive to rocket propellants, optical modulators for mobile phones and as convertor to tritium used as a raw material for thermonuclear reactions i.e. fusion.
- The thermonuclear application makes Lithium as “Prescribed substance” under the Atomic Energy Act, 1962 which permits AMD for exploration of Lithium in various geological domains of the country. Due to the continuously increasing demand of Lithium ion batteries, the requirement of Lithium has increased over last few years.
Key steps taken by Government to increase exports:
- Foreign Trade Policy (2015-20) extended by one year i.e. upto 31-3-2021 due to the COVID-19 pandemic situation.
- Interest Equalization Scheme on pre and post shipment rupee export credit has also been extended by one year i.e. upto 31-3-2021.
- A new Scheme, Remission of Duties and Taxes on Exported Products (RoDTEP), has been launched with effect from 01.01.2021.
- Common Digital Platform for Certificate of Origin has been launched to facilitate trade and increase FTA utilization by exporters.
- A comprehensive “Agriculture Export Policy” to provide an impetus to agricultural exports related to agriculture, horticulture, animal husbandry, fisheries and food processing sectors is under implementation.
- Promoting and diversifying services exports by pursuing specific action plans for the 12 Champion Services Sectors.
- Promoting districts as export hubs by identifying products with export potential in each district, addressing bottlenecks for exporting these products and supporting local exporters/manufacturers to generate employment in the district.
- Active role of Indian missions abroad towards promoting India’s trade, tourism, technology and investment goals has been enhanced.
- Package announced in light of the covid pandemic to support domestic industry through various banking and financial sector relief measures, especially for MSMEs, which constitute a major share in exports.
Ethanol as an alternate fuel
- Government has been promoting use of ethanol as a blend stock with main automotive fuel like petrol in line with the National Policy on Biofuels (NBP) -2018 under the Ethanol Blended Petrol (EBP) Programme. This policy envisages an indicative target of blending 20% ethanol in petrol by 2030.
- Government has since allowed production of ethanol from sugarcane and food grain based raw-materials.
- The cost of production of ethanol varies from distillery to distillery and depends upon various factors viz. cost of raw material, conversion cost, efficiency of distillery plants etc.
- Further, keeping in view the above factors, the Government has fixed the ex-mill price of ethanol from sugarcane based raw-materials, and Oil Marketing Companies (OMCs) have fixed the price of ethanol from damaged and surplus rice with FCI for Ethanol Supply Year (ESY) (period from Dec. to Nov.) 2020-21
Launch of Unified Portal of Gobardhan
Aim: To promote Gobardhan scheme and track real time progress
- Under the new unified approach, all these programmes/schemes will be coordinated by the Department of Drinking Water and Sanitation under the Swachh Bharat Mission – Grameen (SBMG).
- Unified Gobardhan portal will ensure close coordination with stakeholder Departments/Ministries for smooth implementation of Biogas schemes/initiatives and its real time tracking.
Launch of Kalam Program for Intellectual Property Literacy and Awareness Campaign (KAPILA): The objectives of the scheme include creating awareness regarding Intellectual Property Rights (IPR) in Higher Education Institutions(HEIs), enabling of IP protection of inventions originating from faculty and students of HEIs, development of Credit Course on IPR, training program on IPR for faculty and students of HEIs and sensitization and development of vibrant IP filing system. So far, total 46,556 users have been registered for KAPILA.
‘Chauri Chaura’ Centenary Celebrations: The day marks 100 years of the ‘Chauri Chaura’ incident, a landmark event in India’s fight for independence.
- The Chauri Chaura incident took place on 4 February 1922 at Chauri Chaura in the Gorakhpur district of the United Province (modern Uttar Pradesh) in British India.
- In this, a large group of protesters participating in the Non-cooperation movement, clashed with police who opened fire.
- In retaliation the demonstrators attacked and set fire to a police station, killing all of its occupants.
- The incident led to the death of three civilians and 22 policemen.
- Mahatma Gandhi, who was strictly against violence, halted the non-co-operation movement on the national level on 12 February 1922, as a direct result of this incident.
Maternal Mortality Ratio
A Task Force had been constituted by the Government to examine the correlation of age of marriage and motherhood with
(i) Health, medical well-being and nutritional status of mother and neonate/ infant/ child, during pregnancy, birth and thereafter,
(ii) Key parameters like Infant Mortality Rate (IMR), Maternal Mortality Rate (MMR), Total Fertility Rate (TFR), Sex Ratio at Birth (SRB), Child Sex Ratio (CSR) etc. and
(iii) Any other relevant points pertaining to health and nutrition in this context.
1st India-EU High Level Dialogue on Trade and Investment: Commitment to the establishment of this Dialogue was a major outcome of the 15th India-EU Leader’s Summit held in July 2020, with an objective for a Ministerial level guidance towards the bilateral trade and investment relations.
- The Ministers emphasized the importance of global cooperation and solidarity in a post COVID-19 era and agreed for further deepening of bilateral trade and investment relationship through a series of regular engagements, aiming at quick deliverable for the businesses in these tough times.
- Agreed to meet within the next three months, with an objective for reaching consensus on a host of bilateral trade & investment cooperation issues viz. a bilateral Regulatory Dialogue; an India-EU Multilateral Dialogue to explore further possibilities of cooperation; etc.
- In a significant step forward, regular interactions for re-initiation of bilateral trade and investment agreements, with an interim agreement, to start with, were also discussed
Avalanche in Chamoli, Uttarakhand: Uttarakhand’s Chamoli district experienced avalanche and massive flooding on February 7 after a portion of the Nanda Devi glacier broke off causing overflow of the Alaknanda river system — consisting of the Alaknanda river, the Dhauli Ganga and the Rishi Ganga — all tributaries of the Ganga.
- The sudden floods washed away hydroelectric stations — the Rishi Ganga Hydel Project (Raini) and NTPC’s Tapovan-Vishnugad Hydel project (Tapovan) — on the river system
- 10 locals, including shepherds with their 180 sheep and goats were swept away in the flash flood.
- Around 143 people were missing, but the number could be higher. The Indo-Tibetan Border Police (ITBP), State Disaster Response Force (SDRF) and other agencies are carrying out rescue operations on a war footing in the affected areas.
- A ‘glacial burst’ is widely considered the cause (also the cause of the 2013 Uttarakhand floods), with a close second reason being a possible cloudburst. However, the incident was ‘quite peculiar’ due to no reported snow or rain on the day of the incident.
- Another explanation is climate change, with increasing “thermal profile of ice” which has gone from -6 to -20C to -2C, thus making it more susceptible to melt.