PIB Summary- 29th September, 2021 | PIB (Press Information Bureau) Summary - UPSC PDF Download

Insolvency and Bankruptcy Board of India (IBBI)

Context: 5th annual day of IBBI on 1 October.

Insolvency and Bankruptcy Board of India

The IBBI is the regulating authority for insolvency and bankruptcy proceedings in the country.

• It also oversees the activities of bodies such as the Insolvency Professional Agencies (IPA), Insolvency Professionals (IP) and Information Utilities (IU), Registered Valuers, and Registered Valuer Organisations.
• It was established as a statutory body in 2016 under the Insolvency and Bankruptcy Code, 2016.
• The IBBI makes and implements rules governing the corporate insolvency resolution process, individual insolvency, corporate liquidation and individual bankruptcy under the IBC.
• The IBBI is a major pillar in the implementation of the IBC that implements the insolvency and reorganisation resolution process of corporates, individuals and partnerships in a time-bound manner for all the stakeholders.
• The IBBI is a unique regulator in that it regulates both a profession and the processes.
  

IBBI Latest News

In April 2021, the IBBI notified the regulations for a pre-packaged insolvency resolution process.

• The regulations will aid in the operationalisation of the pre-packaged insolvency resolution process (PPIRP) for corporate debtors classified as micro, small and medium enterprises (MSMEs).
• The rules specify that the resolution professional and all partners and directors of the insolvency professional entity have to be independent of the debtor. 

IBBI Board

The IBBI Governing Board is headed by the Chairperson. The other members of the IBBI Board include

• Three whole time members
• A member from the Reserve Bank of India (RBI)
• Five members nominated by the Union Government of which three members function as full-time members

Terms of Reference for the Conduct of Navy-to-Navy Talks between the Indian Navy and the Royal Australian Navy

Context: The ‘Terms of Reference for the Conduct of Navy-to-Navy Talks between the Indian Navy and the Royal Australian Navy’ was signed between both navies.

Details

• This is consequent to the signing of ‘Joint Guidance for the India – Australia Navy to Navy Relationship’ document by the Chiefs of both navies in August 2021.
  • The ‘Joint Guidance’ document sets forth the Navy to Navy (N2N) Talks as the ‘Principal’ medium for the guiding the bilateral relationship.
• The bilateral defence relations between India and Australia have strengthened over the years.
• ‘Comprehensive Strategic Partnership’, Mutual Logistics Support Agreement, conduct of trilateral Maritime Security Workshop and RAN participation in Exercise MALABAR are significant milestones which underline the role played by both Navies in bolstering this relationship in recent times.
• The document would be pivotal in consolidating the shared commitment to promote peace, security, stability and prosperity in the Indo-Pacific region.
• The inaugural Navy-to-Navy Talk with Australia was held in 2005.

Emergency Credit Line Guarantee Scheme (ECLGS)

Context: ECLGS’ scope expanded and scheme extended till the end of March 2022.

Background

• The scheme has extended relief to over 1.15 crore Micro, Small and Medium Enterprises (MSMEs) and businesses.
• It has provided support to eligible borrowers in meeting their operational liabilities and restarting their businesses in the wake of disruptions caused by the COVID-19 pandemic.

What’s in News?

• With a view to support various businesses impacted by the second wave of COVID 19 pandemic, it has been has decided to extend the timeline of Emergency Credit Line Guarantee Scheme (ECLGS) till 31.03.2022 or till guarantees for an amount of Rs 4.5 lakh crore are issued under the scheme, whichever is earlier.
• Further, the last date of disbursement under the scheme has also been extended to 30.06.2022.

Other modifications made to support businesses affected by the second COVID wave

• Existing borrowers under ECLGS 1.0 & 2.0 would be eligible for additional credit support of up to 10% of total credit outstanding as on 29.02.2020 or 31.03.2021, whichever is higher.
• Businesses that have not availed assistance under ECLGS (ECLGS 1.0 or 2.0), can avail credit support of up to 30% of their credit outstanding as on 31.03.2021.
• Businesses in sectors specified under ECLGS 3.0, that had previously not availed ECLGS, can avail credit support up to 40% of their credit outstanding as on 31.03.2021, to the maximum of Rs.200 crore per borrower.
• Incremental credit can be availed within these limits by existing ECLGS borrowers whose eligibility increased because of change in cut-off date to 31.03.2021 from 29.02.2020.
• Borrowers that have availed assistance under ECLGS and whose credit outstanding as on 31.03.2021 (excluding support under ECLGS) is higher than that on 29.02.2020 shall be eligible for incremental support within the cap stipulated under ECLGS 1.0,2.0 or 3.0.

Emergency Credit Line Guarantee Scheme – Key Points

• The Union Cabinet approved the Emergency Credit Line Guarantee Scheme in May 2020 and allowed additional funding of up to Rs.3 lakh crores to different sectors, especially Micro, Small, and Medium Enterprises (MSME) and MUDRA borrowers.
• The scheme is a part of the AtmaNirbhar Bharat Abhiyan which was launched by Prime Minister Narendra Modi to make India a self-dependent country. 

Under the ECLGS, all loans sanctioned under the Guaranteed Emergency Credit Line (GECL) facility will be provided with additional credit. However, there are two specifications

• The scheme would be applicable for loans sanctioned from the date of announcement of the scheme to October 31, 2020, [Now September 3, 2021] OR
• Guarantees for an amount of Rs.3 lakh crore are issued (whichever happens first)
• Disbursement is permitted up to December 31, 2021.

Objectives of Emergency Credit Line Guarantee Scheme (ECLGS)

While the country was fighting the COVID-19 pandemic, major losses were faced by the MSMEs in the manufacturing and other sectors. To overcome this loss, the Government introduced the Emergency Credit Line Guarantee Scheme. 

Discussed below are the major objectives of ECLGS

• As per this scheme, 100% guarantee coverage is to be provided by National Credit Guarantee Trustee Company Limited (NCGTC) to the Member Lending Institutions (MLI), Banks, Financial Institutions, and Non-Banking Financial Companies (NBFC)
• It would increase access to, and enable the availability of additional funding facilities to MSME and MUDRA borrowers
• The Scheme aims at mitigating the economic distress faced by MSMEs by providing them additional funding in the form of a fully guaranteed emergency credit line
• It shall also provide credit to the sector at a low cost, thereby enabling the small sector businesses to meet their operational liabilities and restart their manufacturing and work

Once the proper functioning of the MSMEs in India starts off normally, it will benefit India economically and socially. This is one of the major reasons why the Government introduced this scheme during the unprecedented situation of a pandemic.

Who is eligible under the ECLG Scheme?

As per the latest eligibility criteria with the launch of the expanded Emergency Credit Line Guarantee Scheme, the following criteria had to be met to be applicable for a loan under the scheme:

1. Enterprises with a turnover of up to Rs. 250 crores (FY 2019-20) with outstanding loans up to Rs. 50 crores, as of February 29, 2020
2. GECL credit provided will be up to 20% of the borrower’s total outstanding credit as of February 29, 2020. 
3. The maximum amount of loan that can be availed under the scheme is Rs. 5 crore

Tenure & Interest Rates under ECLGS

• The loan tenure is for 4 years and the moratorium period of 1 year on the principal amount is also applicable [Now the loan tenure is 5 years]
• Interest rates under ECLGS have also been capped:
  • 9.25% for Banks and Financial Institutions
  • 14% for Non-Banking Financial Companies
• The National Credit Guarantee Trustee Company Ltd (NCGTC) is not allowed to charge any Guarantee Fee from the Member Lending Institutions that are included under this scheme

ECLGS 4.0 – Expansion of the Scheme

On 31st May 2021, the Indian government notified the expansion of the ECLGS. Under the version of ECLGS 4.0:

• 100 percent guarantee cover is being provided to hospitals/nursing homes/clinics/medical colleges for loans of up to Rs 2 crores at an interest rate of 7.5 percent. It is given for setting up on-site oxygen generation plants.
• The eligible borrowers who earlier had a loan tenure of four years can now avail of a loan tenure of five years.
• Additional ECLGS assistance of up to 10% of the outstanding as of February 29, 2020, to borrowers covered under ECLGS 1.0
• The Rs. 500 crore loan ceiling under ECLGS 3.0 is being discontinued.
• The maximum additional ECLGS assistance to each borrower is being limited to 40% or Rs.200 crore, whichever is lower.
• Civil aviation sector is an eligible borrower under ECLGS 3.0.

About ECLGS 2.0
The scheme was announced in November 2020 as a part of the Atma Nirbhar Bharat 3.0 package. This is the revised scheme where the credit limits have been increased and the sectors involved have also been expanded.

Some key points that need to be noted with respect to ECLGS 2.0 have been discussed below:

• The Emergency Credit Line Guarantee Scheme has been expanded to 27 new sectors, including the health sector
• These 27 sectors have been identified by the Kamath Committee for one time debt restructuring. Power, construction, textiles, real estate, tourism are few among the many sectors identified
• Individual beneficiaries for both, professional and self-employed people have also been included in the scheme
• The credit limit has been revised to Rs.250 crores with outstanding loans up to Rs. 50 crore, as of February 29, 2020
• There also has been an expansion in the limit of loan which can be sanctioned. The maximum amount which can be availed under ECLGS 2.0 is Rs. 10 crore
• The tenor has been upgraded to 5 years with a 1-year moratorium on repayment of principal

About National Credit Guarantee Trustee Company Limited

• NCGTC or the National Credit Guarantee Trustee Company Limited was registered under the Companies Act, 1956 in 2014
• It is a wholly-owned company of the Government of India
• It was established by the Department of Financial Services, Ministry of Finance
• The main role of the Organisation is to design credit guarantee programs, to share the risk of lending among the lenders, and facilitate financial access to a prospective borrower

Conclusively, to revise the economy of the country which faced major disturbances due to the COVID lockdown, the Government of India decided to take charge of making the country self-dependent. And, the Emergency Credit Line Guarantee Scheme is one of those initiatives. 

IndiaXports 2021 Portal

Context: The India Export Initiative and IndiaXports 2021 Portal of India SME Forum inaugurated.

Details

• IndiaXports aims to orient MSMEs free of cost, with the objective of focussing on the untapped export potential in existing tariff lines and supporting MSMEs in order to grow the number of exporting MSMEs.
• It also aims to increase MSME exports by 50% in 2022.
• The Info Portal would serve as a knowledge base for exports by Indian MSMEs.
• It contains the required information related to export potential for all the 456 tariff lines along with the potential markets as well as trends in exports, export procedures and lots more.
• Apart from an export help desk, instructor led orientation will also be provided to MSMEs through a series of sessions for specific sectors highlighting the opportunities in specific products in international markets.

Team from the Institute of Nano Science and Technology (INST), Mohali develops large-scale reactor for cost-effective production of hydrogen using sunlight and water

Context: Scientists have, for the first time, developed a large-scale reactor which produces a substantial amount of hydrogen using sustainable sources like sunlight and water, which is a cost-effective and sustainable process.

Background

• India has set a target of 450 GW of renewable energy by 2030.
• For this to be achieved, it is imperative to develop renewable energy solutions that are sustainable with a limited carbon footprint.
• One of the most economical ways to achieve this is to produce hydrogen at a large scale through photocatalytic water splitting.

What’s in the news?

• A team of scientists from INST Mohali has developed a prototype reactor which operates under natural sunlight to produce hydrogen at a larger scale (around 6.1 L in 8 hours). They have used an earth-abundant chemical called carbon nitrides as a catalyst for the purpose.
• This work is supported by the DST Nano Mission NATDP project.

How the reactor works?

• The INST team employed a low-cost organic semiconductor in carbon nitrides which can be prepared using cheaper precursors like urea and melamine at ease in a kilogram scale.
• When the sunlight falls on this semiconductor, electrons and holes are generated.
• The electrons reduced the protons to produce hydrogen, and holes are consumed by some chemical agents called sacrificial agents.
• If the holes are not consumed, then they will recombine with the electrons.
• The reactor is about 1 metre square, and the photocatalyst was coated in the form of panels where water flow is maintained. Upon natural sunlight irradiation, hydrogen production occurs and is quantified through gas chromatography.

Significance of the Development

• Hydrogen generated in this manner can be used in many forms like electricity generation through fuel cells in remote tribal areas, hydrogen stoves, and powering small gadgets, to mention a few.
• Eventually, they can power the transformers and e-vehicles, which are long-term research goals under progress.

National Export Insurance Account Scheme (NEIA)

Context: Government approves continuation of the National Export Insurance Account (NEIA) scheme and infusion of Rs. 1,650 crore Grant-in-Aid over 5 years.

Details

• NEIA Trust was established in 2006 to promote project exports from India that are of strategic and national importance.
  • Note:- Export of engineering goods on deferred payment terms and execution of turnkey projects and civil construction contracts abroad are collectively referred to as ‘Project Exports’.
• The NEIA Trust promotes Medium and Long Term (MLT) /project exports by extending (partial/full) support to covers issued by ECGC (ECGC Ltd, formerly known as Export Credit Guarantee Corporation of India Ltd.) to MLT/project export and to Exim Bank for Buyer’s Credit (BC-NEIA) tied to project exports from India.
• National Export Insurance Account (NEIA) has been set up by the Government of India to facilitate medium and long-term exports, which are commercially viable, considering the limitations of the ECGC Limited in providing adequate cover on its own and non-availability of reinsurance cover to such exporters.
• NEIA aims to ensure the availability of credit risk cover for projects and other high-value exports, which are desirable from the point of view of national interest, but which ECGC is unable to underwrite at terms which will not affect the competitiveness of the exports.
• Since inception, NEIA has extended 213 covers, with a consolidated project value of Rs. 53,000 crores, to 52 countries as of August 2021.
• Its impact in enabling project exports has been most significant in Africa and South Asia.

Significance of the capital infusion

• The capital infusion in NEIA Trust will help the Indian Project Exporters (IPE) to tap the huge potential of project exports in focus market.
• Support to project exports with Indian content sourced from across the country will enhance the manufacturing in India.