current affairs handout (economics- lecture no. 3) by

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CURRENT AFFAIRS HANDOUT (ECONOMICS- Lecture No. 3) by Jayant Parikshit

Question-1: Consider the following statements regarding Make in India 2.0 Initiative by GoI:

1. Department for Promotion of Industry and Internal Trade is coordinating action plans for manufacturing & service sectors under MII 2.0

2. MII mainly aims to promote foreign investment in domestic industries.

Choose the correct option:

a. Only1

b. Only2

c. Both1&2

d. None of these

Answer: d

v Department for Promotion of Industry and Internal Trade is coordinating action plans for manufacturing sectors, while

v Department of Commerce is coordinating service sectors.

v MII aims to promote domestic investment as well as foreign investment in domestic industries.

Question-2: Consider the following statements regarding Start-Up India Scheme:

1. Startup means an entity registered in India not prior to 10 years, with annual turnover not exceeding Rs 100cr in last 10 years in total.

2. Such entity is not formed by splitting up or reconstruction of a business already in existence.

Choose the correct option:

a. Only1

b. Only2

c. Both1&2

d. None of these

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Answer: b

§ Startup means an entity registered in India not prior to 10 years, with annual turnover not exceeding Rs 100cr in any preceding financial year.

§ Such entity is not formed by splitting up or reconstruction of a business already in existence.

DISCUSS THE GOVERNMENT’S EFFORTS TO BOOST MANUFACTURING INDIA.

Answer:

Government’s efforts to boost manufacturing can be divided into three parts:

A. PRE-COVID

1. New Industrial & Manufacturing Policy-2011 2. National Investment & Manufacturing Zone (NIMZ) 3. National Industrial Corridor Programme (Industrial Corridors) 4. Make in India 5. Make in India 2.0 6. Start-Up/Stand-Up 7. EPZ/SEZ

B. POST-COVID

1. MSMEs 2. Production Linked Incentive (PLI) Scheme

C. EASE OF DOING BUSINESS (EoDB)

Let us understand the basics related to each policy mentioned above.

New Industrial & Manufacturing Policy-2011

The major objectives of the National Manufacturing Policy are to:

1. increase the sectoral share of manufacturing in GDP to at least 25% by 2022

2. increase the rate of job creation so as to create 100 million additional jobs by 2022

3. enhance global competitiveness, domestic value addition, technological depth

4. environmental sustainability of growth

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National Investment & Manufacturing Zones (NIMZs)

§ The National Investment & Manufacturing Zones (NIMZs) are an important instrumentality of the manufacturing policy.

§ The NIMZs are envisaged as integrated industrial townships with state of the art infrastructure; land use on the basis of zoning; clean and energy efficient technology; necessary social infrastructure; skill development facilities etc. to provide a productive environment for persons transitioning from the primary to the secondary and tertiary sectors.

§ The policy is based on the principle of industrial growth in partnership with the States.

INDUSTRIAL CORRIDORS (ICs)

1. Delhi Mumbai Industrial Corridor (DMIC)

2. Chennai Bengaluru Industrial Corridor (CBIC)

3. Amritsar Kolkata Industrial Corridor (AKIC)

4. East Coast Industrial Corridor (ECIC) with Vizag Chennai Industrial Corridor (VCIC) as Phase 1

5. Bengaluru Mumbai Industrial Corridor (BMIC)

6. Extension of CBIC to Kochi via Coimbatore

7. Hyderabad Nagpur Industrial Corridor (HNIC)

8. Hyderabad Warangal Industrial Corridor (HWIC)

9. Hyderabad Bengaluru Industrial Corridor (HBIC)

10. Odisha Economic Corridor (OEC)

11. Delhi Nagpur Industrial Corridor (DNIC)

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MAKE IN INDIA:

The “Make in India” initiative is based on four pillars, which have been identified to give boost to entrepreneurship in India, not only in manufacturing but also other sectors. The four pillars are: 1. New Processes 2. New Infrastructure 3. New Sectors 4. New Investment

25 MAKE IN INDIA SECTORS

1. Automobiles;

2. Auto components;

3. Aviation;

4. Biotechnology;

5. Chemicals;

6. Construction;

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7. Defense manufacturing;

8. Electrical machinery;

9. Electronic system design

10. Manufacturing;

11. Food processing;

12. IT and BPM;

13. Leather;

14. Media and entertainment;

15. Mining;

16. Oil and gas;

17. Pharmaceuticals;

18. Ports;

19. Railways;

20. Renewable energy;

21. Roads and highways;

22. Space;

23. Textiles;

24. Thermal power;

25. Tourism & Hospitality and Wellness.

27 SECTORS UNDER MAKE IN INDIA 2.0

Manufacturing Sectors

1. Aerospace and Defence

2. Automotive and Auto Components

3. Pharmaceuticals and Medical Devices

4. Bio-Technology

5. Capital Goods

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6. Textile and Apparels

7. Chemicals and Petro chemicals

8. Electronics System Design and Manufacturing (ESDM)

9. Leather & Footwear

10. Food Processing

11. Gems and Jewellery

12. Shipping

13. Railways

14. Construction

15. New and Renewable Energy

Service Sectors

16. Information Technology & Information Technology enabled Services (IT &ITeS)

17. Tourism and Hospitality Services

18. Medical Value Travel

19. Transport and Logistics Services

20. Accounting and Finance Services

21. Audio Visual Services

22. Legal Services

23. Communication Services

24. Construction and Related Engineering Services

25. Environmental Services

26. Financial Services

27. Education Services

START-UP INDIA SCHEME § Startup means an entity registered in India not prior to 10 years, with annual turnover

not exceeding Rs 100cr in any preceding financial year.

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§ Provided that such entity is not formed by splitting up or reconstruction of a business already in existence.

§ It satisfies the following conditions: a. It is working towards Innovation of new products/processes/services b. It is a scalable business model with a high potential of: Employment generation or

Wealth creation.

STAND-UP INDIA SCHEME § Government of India launched the ‘Stand up India’ scheme on 5 April 2016. It seeks to

leverage the institutional credit structure to reach out to the underserved sector of

people such as Scheduled Caste, Scheduled Tribe and Women entrepreneurs so as to

enable them to participate in the economic growth of the nation.

§ The Stand-Up India portal provides a digital platform based on 3 pillars to support

enterprises promotion among entrepreneurs from SC, ST and Women category

through:

1. Handholding support

2. Providing Information on financing

3. Credit Guarantee

Loan Under Stand-Up India Scheme:

§ The loan under the Stand-Up India scheme would be appropriately secured and backed

by a credit guarantee through a credit guarantee scheme by government of India.

§ Stand Up India Scheme facilitate bank loans between 10 lakh and 1 crore to atleast one

scheduled caste (SC) or Scehduled Tribe, borrower and atleast one women per bank

branch for setting up a greenfield enterprise. This enterprise may be in manufacturing,

services or the trading sector.

MAINS ANSWER WRITING Question: Discuss the role of MSMEs in Indian economy.

Question: Enumerate the steps taken by GoI to boost up MSME sector.

Question: Discuss the measures undertaken by RBI for MSMEs, Services, small businesses and individual borrowers in light of Covid Pandemic Wave-2.

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MICRO, SMALL & MEDIUM ENTERPRISES (MSMEs)

MSMEs- Relevance for India

§ > 40% of industrial production

§ > 48 % share in total exports

§ Around 30% to GDP

§ Around 20% MSMEs = Rural Areas

§ > 6000 products

§ Employment > 110 million è 2nd largest employment generator after agriculture

§ Unregistered MSMEs > 94%

ISSUES FACED BY MSMEs

1. Lack of availability of adequate and timely credit

2. High cost of credit

3. Collateral requirements

4. Limited access to equity capital

5. Problems in supply to government departments and agencies

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6. Procurement of raw materials at a competitive cost

7. Problems of storage, designing, packaging and product display

8. Lack of access to global markets

9. Inadequate infrastructure facilities, including power, water, roads, etc.

10. Low technology levels and lack of access to modern technology

ONE MAN COMMITTEE FOR MSMEs

§ The One Member Committee under the chairmanship of Dr. Prabhat Kumar (Ex-Cabinet Secretary and Ex-Governor Jharkhand), was constituted by the Ministry of MSME in 2015 to help in formulating National MSME Policy.

§ Dr. Prabhat Kumar, presented his report for MSMEs in 2017.

POPULAR SCHEMES FOR MSMEs Pradhan Mantri Mudra Yojana:

§ The purpose of Micro Units Development and Refinance Agency (MUDRA) is to provide collateral free funding to the small business sector.

§ 2017: 70% women borrowers

Eligibility:

§ Mudra loans extend credit to enterprises in manufacturing, trading and services whose credit needs are < Rs. 10 lakhs

THREE TYPES OF LOANS:

§ Based on the stage of growth and funding needs of the micro unit / entrepreneur, the beneficiary can avail of the following types of loans: Shishu, Kishor & Tarun.

Categorization of MUDRA Loans:

1. SHISHU : Loans up to Rs.50000

2. KISHORE : Loans from Rs.50001 to Rs.5.00 lakhs

3. TARUN : Loans from Rs.5,00,001 to Rs.10.00 lakhs

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Revamped Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

Objectives:

1. To organize the traditional industries and artisans into clusters in order to make them competitive

2. To provide sustained employment for traditional industry artisans

3. To enhance marketability of products of such clusters by providing support

4. To introduce Public Private Partnership Model in traditional industries

5. The financial support granted for any project shall be a maximum of Rs. 8 Crore.

A Scheme for promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)

Objectives:

1. Create new jobs and reduce unemployment

2. Promote entrepreneurship culture in India

3. Facilitate innovative business solution for un-met social needs

4. Promote innovation to further strengthen the competitiveness of the MSME sector

Nature of assistance:

§ Government would set up Livelihood Business Incubators (LBI).

§ A one-time grant of 100% of cost of Plant & Machinery, or an amount up to Rs 100 lakhs, whichever is less is to be provided.

§ In case of PPP mode, one- time grant of 50% of cost of Plant & Machinery, or Rs 50.00 lakhs, whichever is less is to be provided.

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MSME REFORMS DURING COVID:

1. Covid Wave -1

a. ANB 1.0 (Definition, Collateral Free Loan, Subordinate Debt, FoF, GoI Procurement, IBC)

b. ANB 3.0 (Champion Sector and portal)

c. Resolution Framework (RF) 1.0

2. Covid Wave-2

a. RF 2.0

b. Service Sector

c. SIDBI

d. Medical Services

current affairs handout (economics- lecture no. 3) by

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