Weekly Current Affairs (1st to 7th August 2023) Part - 1 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Self-Reliant India Fund for MSMEs

Context: Recently, the Minister of State for Micro Small and Medium Enterprises provided valuable insights into the Self Reliant India Fund during a written reply in the Lok Sabha.

What is Self-Reliant India (SRI) Fund?

About:

• As part of the Atmanirbhar Bharat package, the Indian government announced the allocation of Rs. 50,000 crores for equity infusion in MSMEs through the Self-Reliant India (SRI) Fund.
• SRI fund operates through a mother-fund and daughter-fund structure for equity or quasi-equity investments.
• The National Small Industries Corporation (NSIC) Venture Capital Fund Limited (NVCFL) was designated as the Mother Fund for the implementation of the SRI Fund.
  • It was registered as a Category-II Alternative Investment Fund (AIF) with SEBI.

Objectives of the SRI Fund:

• To provide equity funding to viable and high-potential MSMEs, fostering their growth and transformation into larger enterprises.
• To bolster the MSME sector's contribution to the Indian economy by promoting innovation, entrepreneurship, and competitiveness.
• To create an environment conducive to technological upgradation, research and development, and increased market access for MSMEs.

Composition of the SRI Fund:

• The Rs. 50,000 crore SRI Fund comprises:
• Rs. 10,000 Crore from the Government of India to initiate equity infusion in select MSMEs.
• Rs. 40,000 Crore sourced through Private Equity (PE) and Venture Capital (VC) funds, leveraging private sector expertise and investment.

Note:

• Equity Infusion: It refers to the process of injecting fresh capital or funds into a company by issuing additional shares to existing shareholders or new investors.
• Venture Capital Fund: It is a type of investment fund that provides capital to early-stage and startup companies with high growth potential.
• The primary objective of a venture capital fund is to identify promising startups and invest in them in exchange for equity (ownership) in the company.
• SEBI: It is a Statutory Body established on 12th April, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
• The basic functions of SEBI is to protect the interests of investors in securities and to promote and regulate the securities market.

What is the Status of MSME Sector in India?

About:

• MSME stands for Micro, Small, and Medium Enterprises. The MSME sector of India contributes around 33% of the country's total GDP and is predicted to contribute worth USD 1 trillion to India's total exports by 2028.

Significance:

• Employment Generation: MSMEs provide about 110 million jobs which is 22-23% of the total employment in India.
  • It contributes to reducing unemployment and underemployment, supporting inclusive growth and poverty reduction.
• Promotion of Entrepreneurship and Innovation: The MSME sector fosters a culture of entrepreneurship and innovation.
  • It encourages individuals to start their own businesses, promotes indigenous technologies, and contributes to the development of new products and services.
• Boon for Rural Development: Compared with large-scale companies, MSMEs aided in the industrialisation of rural areas at minimal capital cost.

Challenges:

• Infrastructure and Technology: Outdated infrastructure and limited access to modern technology due to limited finance and expertise can hinder the growth and efficiency of MSMEs.
  • The lack of proper transportation, power supply, and communication networks affects their ability to compete on a global scale.
• Complex Regulatory Environment: Cumbersome and complex regulations can be challenging for small businesses to navigate.
  • Compliance with various laws related to taxation, labor, environmental norms, etc., requires time, effort, and expertise.
• Inadequate Working Capital Management: Many MSMEs struggle with managing their working capital effectively.
  • Late payments from customers and long payment cycles with suppliers can create cash flow issues.
• Vulnerability to Economic Fluctuations: The MSME sector is particularly vulnerable to economic downturns, as they may not have the financial buffers or scale to withstand challenging economic conditions.

Government Initiatives for the MSME Sector:

• MSME Champions Scheme: Comprising MSME-Sustainable (ZED), MSME-Competitive (Lean), and MSME-Innovative (for incubation, IPR, Design, and Digital MSME), this scheme provides financial assistance to MSMEs to enhance their competitiveness and innovation capabilities.
• Infusion in Credit Guarantee Fund: As part of the Budget 2023-24, the government announced an infusion of Rs. 9,000 crore in the corpus of Credit Guarantee Fund Trust for Micro & Small Enterprises.
• Raising and Accelerating MSME Performance (RAMP): This initiative focuses on strengthening institutions and governance of MSME programs at both the central and state levels.
• Amendment in Income Tax Act: The Finance Act 2023 brought about an amendment in Section 43B of the Income Tax Act, 1961, to offer more favorable tax provisions for MSMEs.

Way Forward

• Ease of Doing Business: There is a need to continuously work towards improving the ease of doing business for MSMEs, reducing bureaucratic red tape, and simplifying regulatory compliance
• Mobile Innovation Labs: There is a need to set up mobile innovation labs that travel to different regions, especially in rural areas, to provide MSMEs with access to cutting-edge technologies, training, and mentorship.
  • This initiative would help bridge the technology gap and promote innovation in remote areas.
• Government-Private Sector Co-Innovation Funds: It's a time to create co-investment funds where the government partners with private sector companies to invest in promising MSME innovations.
  • This collaboration would not only support the growth of innovative businesses but also enhance public-private partnerships.
• Innovation Impact Assessment: There is a need to develop a standardized impact assessment framework that measures the societal and environmental benefits of MSME innovations.
  • Businesses that can demonstrate a positive impact through their innovations can receive additional recognition and support.

Mangroves in India

Context: On the International Day for the Conservation of the Mangrove Ecosystem, West Bengal, which is home to approximately 40% of India's mangrove forests, unveiled plans to establish a dedicated 'Mangrove Cell' to streamline mangrove management efforts.

International Day for the Conservation of the Mangrove Ecosystem

• The International Day for the Conservation of the Mangrove Ecosystem is celebrated every year on 26 July and aims to raise awareness of the importance of mangrove ecosystems as “a unique, special and vulnerable ecosystem” and to promote solutions for their sustainable management, conservation and uses.
• This International Day was adopted by the General Conference of the UN Educational, Scientific and Cultural Organization (UNESCO) in 2015.

What is the Status of Mangroves in India?

About:

• Mangroves are a unique type of coastal ecosystem found in tropical and subtropical regions. They are dense forests of salt-tolerant trees and shrubs that thrive in intertidal zones, where land meets the sea.
• These ecosystems are characterized by their ability to withstand harsh conditions, such as saline water, tidal fluctuations, and muddy, oxygen-poor soils.

Characteristics:

• Mangroves exhibit Viviparity mode of reproduction, where seeds germinate within the tree before falling to the ground. This is an adaptive mechanism to overcome the challenge of germination in saline water.
• Some mangrove species secrete excess salt through their leaves, while others block the absorption of salt at their roots.
• Mangrove plants have special roots like prop roots and pneumatophores, which help impede water flow and provide support in the challenging tidal environment.

Mangrove Cover in India:

• According to the Indian State Forest Report 2021, Mangrove cover in India is 4992 sq. Km which is 0.15% of the country's total geographical area.
• Sundarbans in West Bengal are the largest mangrove forest regions in the world. It is listed as a UNESCO World Heritage Site.
• Besides the Sundarbans, the Andamans region, the Kachchh and Jamnagar areas in Gujarat too have substantial mangrove cover.

Significance:

• Biodiversity Conservation: Mangroves provide a unique habitat for a wide variety of plant and animal species, serving as breeding, nursery, and feeding grounds for numerous marine and terrestrial organisms.
  • For example, sundarban hosts the Royal Bengal tiger, Irrawady Dolphin, Rhesus macaque, Leopard cats, Small Indian civet.
• Coastal Protection: Mangroves act as natural buffers against coastal erosion, storm surges, and tsunamis.
  • Their dense root systems and tangled network of prop roots stabilize shorelines and reduce the impact of waves and currents.
  • During hurricanes and cyclones, mangroves can absorb and dissipate a significant amount of energy, protecting inland areas and human settlements from devastating damage.
• Carbon Sequestration: Mangroves are highly efficient carbon sinks, sequestering large amounts of carbon dioxide from the atmosphere and storing it in their biomass and sediments.
• Fisheries and Livelihoods: Mangroves support fisheries by providing nursery areas for fish and shellfish, enhancing fishery productivity and contributing to livelihood and local food security.
• Water Quality Improvement: Mangroves act as natural filters, trapping and removing pollutants and excess nutrients from coastal waters before they reach the open ocean.
  • Their role in purifying water contributes to the health of marine ecosystems and helps maintain the balance of fragile coastal ecosystems.
• Tourism and Recreation: Mangroves offer recreational opportunities such as eco-tourism, birdwatching, kayaking, and nature-based activities, which can promote sustainable economic growth for local communities.

Challenges:

• Habitat Destruction and Fragmentation: Mangroves are often cleared for various purposes, including agriculture, urbanization, aquaculture, and infrastructure development.
  • Such activities lead to the fragmentation and loss of mangrove habitats, disrupting their ecosystem functioning and biodiversity.
  • The conversion of mangroves into shrimp farms and other commercial uses is a significant concern.
• Climate Change and Sea Level Rise: Rising sea levels due to climate change pose a significant threat to mangroves.
  • Climate change also brings about extreme weather events, such as cyclones and storms, which can cause severe damage to mangrove forests.
• Pollution and Contamination: Pollution from agricultural runoff, industrial discharges, and improper waste disposal contaminate mangrove habitats.
  • Heavy metals, plastics, and other pollutants adversely affect the flora and fauna of these ecosystems.
• Lack of Integrated Management: Often, mangroves are managed in isolation, without considering their interconnectedness with adjacent ecosystems like coral reefs and seagrass beds.
  • Integrated management approaches that consider the broader coastal ecosystem are necessary for effective conservation.

Government Initiatives Related to Mangrove Conservation:

• MISHTI (Mangrove Initiative for Shoreline Habitats & Tangible Incomes)
• Sustainable Aquaculture In Mangrove Ecosystem (SAIME) initiative

Way Forward

• Drone Monitoring and AI: Employ drone technology equipped with high-resolution cameras and AI algorithms to monitor mangrove health and detect illegal activities such as encroachment or illegal logging.
  • This approach can help in efficient and timely surveillance over vast areas.
• Mangrove Adoption Program: Launch a public-driven initiative where individuals, corporates, and institutions can "adopt" a patch of mangroves.
  • Participants would be responsible for the maintenance, protection, and restoration of their adopted area, fostering a sense of ownership and collective responsibility.
• Mangrove Research and Development: Invest in research to explore novel applications of mangroves, such as phytoremediation to clean polluted water or developing new medicines from mangrove plant extracts.
  • This could lead to innovative ways to leverage mangroves' unique properties for sustainable development.

China's Stapled Visas

Context: Recently, India withdrew its eight-athlete ‘Wushu’ martial arts athletes contingent from the Summer World University Games in Chengdu, China. The move came in response to China's issuance of stapled visas to three athletes from the Indian team, all of whom were from Arunachal Pradesh.

• The practice of issuing stapled visas started around 2005, and China has consistently issued such visas to residents of Arunachal Pradesh and Jammu and Kashmir.

What are Stapled Visas?

• A stapled visa is an unstamped piece of paper attached to a passport with staples or a pin.
• Unlike regular visas that are affixed and stamped directly on the passport, stapled visas are detachable.
• The issuance of stapled visas is part of China's ongoing territorial disputes with India over Arunachal Pradesh.
• The stapled visas are considered valid by China, but India refuses to accept them as legitimate travel documents.

Note:

• Passports and visas enable authorized, secure international travel, reflecting nation-state sovereignty and control over borders.
• Passports signify identity and citizenship, while visas grant entry permissions to specific destinations.
• A passport is issued by the birth country or current country of residence. A visa is issued by an Embassy/Consulate representing a foreign country.

Why China Issued Stapled Visas?

Dispute Over Sovereignty:

• China disputes India's sovereignty over Arunachal Pradesh and challenges the legitimacy of the McMahon Line, the boundary between Tibet and British India, agreed upon in the Simla Convention of 1914.
• The disagreement over the Line of Actual Control (LAC) lies at the heart of Chinese claims on the disputed territory and leads to repeated transgressions into Indian territory.

Unilateral Claim to Indian Territory:

• China claims approximately 90,000 sq km of Arunachal Pradesh as part of its territory, referring to it as "Zangnan" or "South Tibet" in Chinese maps.
• It issues lists of Chinese names for places in Arunachal Pradesh and periodically underlines its unilateral claim to Indian territory.

Undermining India's Sovereignty:

• Issuing stapled visas to Indian nationals from Arunachal Pradesh and Jammu and Kashmir is part of China's efforts to undermine India's sovereignty over these regions.
• China's actions are seen as attempts to challenge India's control and authority over parts of its own territory.

What are the Impacts and Concerns Regarding Stapled Visas?

• Stapled visas create confusion and uncertainty for travellers, as their validity and acceptance vary.
• India consistently rejects the validity of stapled visas and protests against their issuance.
• These actions by China contribute to diplomatic tensions between the two nations and complicate bilateral relations.

Plastic Overshoot Day

Context: Recently, the Earth witnessed Plastic Overshoot Day on July 28, 2023. This marks the point in the year when the amount of plastic waste generated exceeds the global waste management capacity.

• The Plastic Overshoot Day Report by Swiss-based research consultancy Earth Action (EA) sheds light on the alarming issue of plastic pollution and its implications on the environment.

What are the Major Findings of the Report?

About:

• Plastic Overshoot Day is determined based on a country’s Mismanaged Waste Index (MWI). The gap in waste management capacity and plastic consumption is called MWI.
• Plastic Pollution Crisis: The report highlights that an additional 68,642,999 tonnes of plastic waste will enter nature in 2023, indicating a severe plastic pollution crisis.
  • The report identifies 12 countries responsible for 52% of the world's mismanaged plastic waste. India is among them, alongside China, Brazil, Indonesia, Thailand, Russia, Mexico, the United States, Saudi Arabia, the Democratic Republic of Congo, Iran, and Kazakhstan.
• The three countries with the highest mismanaged waste percentages—Mozambique (99.8%), Nigeria (99.44%), and Kenya (98.9%) belong to Africa.
• India ranks fourth in the MWI, with 98.55% of generated waste.
• Short-life Plastics: Short-life plastics, including plastic packaging and single-use plastics, make up approximately 37% of the total plastic used annually. These categories pose a higher risk of leakage into the environment.
• India's Plastic Overshoot: Plastic Overshoot Day for India occurred on January 6, 2023, when the country's plastic waste generation outweighed its waste management capacity.
  • India's per-person consumption is 5.3 kg, significantly lower than the global average of 20.9 kg.

What is the Major Significance of Plastic?

• Food Preservation: Plastics are widely used in food packaging, which helps extend the shelf life of perishable goods, reducing food waste and enabling efficient transportation of goods.
• Medical Applications: Plastics play a crucial role in modern medicine. They are used in medical devices, such as syringes, catheters, and artificial joints, which improve patient care and quality of life.
• Safety in Transportation: Plastics are used in automotive applications to make vehicles lighter, which can lead to improved fuel efficiency and reduced emissions, contributing to a greener environment.
• Insulation: Plastic materials are excellent insulators for electrical and thermal purposes. They help improve energy efficiency in buildings and electronic devices.
• Water Conservation: Certain types of plastics, like those used in pipes and irrigation systems, help conserve water by reducing leakages and improving water distribution efficiency.

What are the Issues Associated with Plastic-Waste in India?

• Poor Waste Management Infrastructure: One of the major problems is the inadequate waste management infrastructure in India.
  • The majority of municipal authorities lack proper facilities for segregation, collection, transportation and recycling of plastic waste.
  • As a result, a significant portion of plastic waste ends up in landfills, open dumpsites, or even littered in the environment, leading to severe pollution.
  • According to the Centre for Science and Environment's report, India recycles 12.3% of its plastic waste and incinerates 20%.
• Single-Use Plastic Products: The widespread use of single-use plastic products, such as bags, bottles, straws, and packaging, exacerbates the plastic waste problem.
  • These items are convenient but are discarded after one use, contributing significantly to the accumulation of plastic waste.
• Marine Pollution: India's coastal areas are particularly affected by plastic waste. Rivers and other water bodies act as conduits for plastic waste to reach the oceans, resulting in marine pollution.
  • This pollution harms marine life, ecosystem health, and can even have economic impacts on coastal communities reliant on fishing and tourism.
• Health Impacts: Improper plastic waste disposal and the burning of plastic can release harmful chemicals and toxins, leading to adverse health effects for communities living near waste disposal sites or engaged in informal recycling activities.

What are Government Initiatives Related to Plastic Waste Management?

• National Dashboard on Elimination of Single Use Plastic and Plastic Waste Management
• Plastic Waste Management Amendment Rules, 2022
• Project REPLAN

Way Forward

• Extended Producer Responsibility (EPR): India should invest in waste management policies like EPR, which holds producers responsible for the end-of-life disposal of their plastic products and promotes circular economy.
• Waste-to-Energy Plants: There is a need to invest in waste-to-energy plants that use advanced technologies like plasma gasification or anaerobic digestion to convert non-recyclable plastic waste into energy.
  • These plants can help reduce the dependence on fossil fuels and generate electricity while managing plastic waste effectively.
  • The Ministry of Environment, Forests, and Climate Change has indicated that India has the capacity to process 14.2 million tonnes of plastic waste annually, which accounts for 71% of all primary plastic produced.
• Designing Alternatives: Identifying plastic items that can be replaced with non-plastic, recyclable, or biodegradable materials is the first step. Find alternatives to single-use plastics and reusable design goods by working with product designers.
  • Promoting the use of Oxo-biodegradable plastics, that are manufactured to be broken down by ultra-violet radiation and heat, more quickly than regular plastics.
  • Supporting the UN Treaty to End Plastic Pollution: India's role in addressing plastic pollution is crucial.
  • The country was among the first to propose a global ban on single-use plastics in 2019.
  • The UN Treaty to End Plastic Pollution represents an opportunity for global action against plastic pollution and should be promoted.