Economic Development: July 2022 Current Affairs - UPSC PDF Download

Street Vendors 

Why in News?

Recently, the Minister for Housing and Urban Affairs addressed the 6th meeting of National Association of Street Vendors of India (NASVI) with the theme as “From Encroachers to Self-Employed”.

Who do we need to know about Street Vendors?

About:

• Street Vendor is a person who offers goods for sale to the public at large without having a permanent built-up structure from which to sell.
• Street vendors may be stationary in the sense that they occupy space on the pavements or other public/private spaces or, they may be mobile in the sense that move from place to place by carrying their wares on push carts or in baskets on their heads.

Population:

• There is a substantial increase in the number of street vendors in the major cities around the world, especially in the developing countries of Asia, Latin America and Africa.
• Around 49.48 lakh street vendors have been identified in India.

Constitutional Provisions:

• Right to Trade:
  • Article 19 (1) (g) gives the Indian citizen a fundamental right to practice any profession, or to carry on any occupation, trade or business.
• Equality Before Law:
  • Article 14 of the Constitution states that the state shall not deny to any person equality before the law or equal protection of the laws within the territory of India.
• Social Justice:
  • The preamble of the Indian Constitution states that India is a sovereign, socialist, secular democratic republic and shall secure to its citizens justice, social, economic and political and equality of status and of opportunity.
• Directive Principles:
  • Article 38(1) directs the state to promote the welfare of the people by securing a social order in which justice – social, economic and political, shall inform all institutions of national life.
  • Article 38(2) directs to ‘minimize the inequalities in income status, facilities and opportunities.’
  • Article 39(a) directs the state to formulate policy to ensure that citizens, men and women equally, have the right to an adequate means of livelihood.
  • Article 41 specifically provides for ‘right to work’ within the limits of the economic capacity of the state.

What are the Challenges faced by Street Vendors?

• Lack of Space:
  • Master plans prepared for our cities do not allocate space to vendors/hawkers, as planners blindly imitate the western concept of marketing, ignoring Indian traditions.
  • Instead of regulating vendors, municipal corporations treat them as a nuisance and an irritant, their policies and actions are aimed more at removing and harassing them rather than at regulation.
• Frequent Eviction:
  • The regular eviction carried out by the district or municipal administration.
  • They fear the very sight of the eviction team which is known locally by different names.
• Extortion Racket:
  • Cases of ‘rangdari tax’ and ‘hafta’ are common.
    (i) In many cities vendors have to part with substantial money in order to ply their trade.

What are Government’s Initiatives for Street Vendors?

• SVANidhi Scheme:
  • SVANidhi Scheme was launched to benefit over 50 lakh street vendors who had been vending in urban areas including those from surrounding peri-urban/rural areas.
  • It also aims to promote digital transactions through cash-back incentives up to an amount of Rs. 1,200 per annum.
• National Association of Street Vendors of India:
  • NASVI is an organization working for the protection of the livelihood rights of thousands of street vendors across the country.
  • The main objective was to bring together the street vendor organizations in India so as to collectively struggle for macro-level changes.

Way Forward

• Despite multiple schemes running for the street vendors, there are various gaps in implementation, identification, awareness and accessibility of various schemes which should be plugged in a timely manner.
• Benefits like maternity allowances, accident relief, natural death compensation, education support for children for higher studies, pension during any crisis should be provided to them.
• States should be asked to ensure that street vendors are not harassed by the authorities, as all they are asking is a right to livelihood.

Report on Digital Banks

Context:

•  Niti Aayog has called for setting up Digital Banks (DBs) Other observations: It has highlighted the challenges presented by the ‘partnership model’ of neo-banking—which has emerged in India due to a regulatory vacuum and the absence of a digital bank licence. 

Digital Banks: 

• The Digital Banking definition is banking done through the digital platform, doing away with all the paperwork like cheques, pay-in slips, Demand Drafts, and so on. 

Other measures are taken for financial inclusion in India:

• Pradhan Mantri Jan Dhan Yojana, India Stack, Aadhaar, UPI, extending microcredit facilities to street vendors through PM-SVANIDHI, ‘open banking’ through the Account Aggregator (AA) regulatory framework.

Benefits of Digital Banking

Digital banking aims to make life easier for the customers of a bank. Some of its benefits are

• The convenience of banking from the comforts of home
• 24*7 availability of access to banking functions
• Paperless banking
• Enables set up of automatic payments for regular utility bills
• Facilitates online payments for online shopping etc
• Extends banking services to remote areas
• Reduces the risk of counterfeit currency with digital fund transfers
• Strengthens privacy and security for customers
• Allows misplaced credit cards to reported and blocked instantly
• Restricts the circulation of black money
• Lowers the minting demands of currency

Digital Banking in India

• In India, to move on from physical verification for KYC, video-based verification may be introduced by the market regulator for a better process. Digital savings accounts are also being offered by several banks. These accounts are similar to the basic savings account, offering full banking facilities to users without having to maintain a minimum balance, with a virtual debit card convertible to a physical debit card.

Some of the best zero balance digital savings bank account in India

• Axis Bank ASAP
• Digisavings – DBS
• Kotak 811
• Pockets and Insta Save FC Account – ICICI Bank
• Indus Online Savings Account – IndusInd

Future of Digital Banking

Research says, to be a fully digital bank, a bank must have

• The option to order currency
• Customizable standing options
• Card blocking feature
• Innovation toward safety vaults
• Accounts linked to tax exemptions status
• Integration with stock market investment channels
• Financial management analytics
• Grouping of accounts of different banks
• Easily accessible assistance

GIFT City and Bullion Exchange 

Why in News?

Recently, the Prime Minister has laid the foundation stone of the headquarters building of the International Financial Services Centers Authority (IFSCA) in GIFT City, Gandhinagar.

• The building has been conceptualized as an iconic structure, reflective of the growing prominence and stature of GIFT-IFSC as a leading International Financial Centre.
• He also launched the India International Bullion Exchange (IIBX), India’s first International Bullion Exchange in GIFT-IFSC the NSE IFSC-SGX Connect.

What is IIBX?

About:

• India International Bullion Exchange (IIBX) was first announced in the Union Budget 2020 for easing the Gold Import by Jewellers in India.
• It is a platform that not only enrols jewellers to trade on the exchange, but has also set up necessary infrastructure to store physical gold and silver.
• IIBX will facilitate efficient price discovery with the assurance of responsible sourcing and quality, apart from giving impetus to the financialisation of gold in India.

Significance

• It will empower India to gain its rightful place in the global bullion market and serve the global value chain with integrity and quality.
• IIBX also re-enforces the commitment of the Government of India towards enabling India to be able to influence global bullion prices as a principal consumer.

What is GIFT City?

• GIFT (Gujarat International Finance Tec-City) City is located in Gandhinagar, Gujarat.
• It consists of a multi-service Special Economic Zone (SEZ), which houses India’s first International Financial Services Centre (IFSC) and an exclusive Domestic Tariff Area (DTA).
• GIFT city (Gujarat International Finance Tec-City) is envisaged as an integrated hub for financial and technology services not just for India but for the world.

What is NSE IFSC-SGX Connect?

• It is a framework between NSE's subsidiary in the GIFT International Financial Services Centre (IFSC) and Singapore Exchange Limited (SGX).
• Under Connect, all orders on NIFTY derivatives placed by members of Singapore Exchange will be routed to and matched on the NSE-IFSC order matching and trading platform.
• Broker-Dealers from India and across international jurisdictions are expected to participate in large numbers for trading derivatives through Connect.
• It will deepen liquidity in derivative markets at GIFT-IFSC, bringing in more international participants and creating a positive impact on the financial ecosystem in the GIFT-IFSC.

NITI Aayog’s India Innovation Index, 2022

Why in News?

Recently, India Innovation Index Report 2021 was released by NITI (National Institution for Transforming India) Aayog in which Karnataka retained its top position in the major States category.

• This is the third edition of the Report, which highlights the scope of innovation analysis in the country by drawing on the framework of the Global Innovation Index.
• The number of indicators has increased from 36 (in the India Innovation Index 2020) to 66 (in the India Innovation Index 2021).

What are the Highlights of the Report?

• Categories:
  • The Innovation Index is divided into three categories—major states, Union Territories, and hill and North East states.
• Major States:
  • Top States: Karnataka topped with a score of 18.05 followed by Telangana and Haryana.
    (i) Karnataka’s success is attributed to its peak performance in attracting FDI (Foreign Direct Investment) and a large number of venture capital deals.
• Bottom States: Bihar, Odisha and Chhattisgarh scored the lowest on the index, which put them at the bottom in the “major States” category.
  • Chhattisgarh ranked last with 10.97 points.
• Hill and North-East States:
  • Manipur is leading the category followed by Uttarakhand and Meghalaya.
  • Nagaland ranked last (10th).
• Union territories/Small States:
  • Chandigarh is the top performer with a Score 27.88 followed by Delhi and Andaman and Nicobar.
  • Ladakh Ranked last (9th).

Challenges:

• On an average, the country has not performed well in the knowledge worker pillar, as much as it has in the human capital pillar.
• The expenditure on human capital has been unable to create that knowledge base in the country.
• Innovation is skewed against the manufacturing sector due to the problems pertaining to and the missing middle.
  • Missing middle, i.e., there are too many tiny, informal enterprises, and too few large, formal ones to employ thousands of people.

What are the Recommendations?

• GDERD (Gross Domestic Expenditure on R&D) needs considerable improvement and should touch at least 2%, which would play an instrumental role in India achieving the goal of a 5 trillion economy and further influence its innovative footprint across the globe.
• Increasing GDERD promotes private sector participation in R&D and closing the gap between industry demand and what the country produces through its education systems.
• Countries that spend less on GDERD fail to retain their human capital in the long run and the ability to innovate is dependent on the quality of human capital; India’s GDERD as a percentage of GDP (Gross Domestic Product) stood at about 0.7%.
• The private sector needs to pick up pace in R&D, public expenditure is productive up to some extent; once the growth follows a trajectory, it is desirable to shift to R&D mostly driven by the private sector.

To read more information on NITI aayog:

• NITI Aayog: Objectives & Function
• Administration & Support Units

Agreement on Fisheries Subsidies

Why in News?

Recently, Agreement on Fisheries Subsidies (AFS) was concluded at the World Trade Organization (WTO) Ministerial meeting.

What do we know about the Agreement?

About:

• It will prohibit subsidies from being provided for Illegal, Unreported and Unregulated (IUU) fishing and overfished stocks.
• The agreement also prohibits providing subsidies for fishing on high seas, which are outside the jurisdiction of coastal countries and Regional Fisheries Management Organizations/ Arrangements.

Transition Period Allowance:

• Under the Special and Differential Treatment (S&DT), Developing Countries and Least Developed Countries (LDCs) have been allowed a transition period of two years from the date of entry into force of this Agreement.

Exempted Areas:

• No prohibition has been imposed on a WTO Member regarding granting or maintaining subsidy to its vessel or operator as long as it is not carrying out IUU.
• No prohibition on providing subsidies has been imposed for fishing regarding overfished stocks as long as such subsidies are implemented to rebuild the stock to a biologically sustainable level.

Benefits:

• It will eliminate the subsidies granted to fishing vessels or fishing operators engaged in IUU fishing.
• It will check large-scale IUU fishing which deprives coastal countries like India of fisheries resources, thereby significantly impacting the livelihoods of our fishing communities.

What is India’s Stand?

• India is one of the lowest fisheries subsidisers despite such a large population and one of the disciplined nations in sustainably harnessing the fisheries resources.
• India does not exploit the resources indiscriminately like other advanced fishing nations and India's fisheries sector primarily depends on several millions of small-scale and traditional fishers.
  • Therefore, those WTO Members who have provided huge subsidies in the past, and engaged in large-scale industrial fishing, which is responsible for the depletion of fish stocks, should take more obligations to prohibit subsidies based on the ‘polluter pay principle’ and ‘common but differentiated responsibilities’.

What do we know about India’s Fisheries Sector?

About:

• Fishing is the capture of aquatic organisms in marine, coastal and inland areas.
• Marine and inland fisheries, together with aquaculture, provide food, nutrition and a source of income to millions of people around the world, from harvesting, processing, marketing and distribution.
• For many it also forms part of their traditional cultural identity.
• One of the greatest threats to the sustainability of global fishery resources is illegal, unreported and unregulated fishing.

Indian Scenario:

• India is the second largest fish producing country in the world accounting for 7.56% of global production and contributing about 1.24% to the country’s Gross Value Added (GVA) and over 7.28% to the agricultural GVA.
• Fisheries and aquaculture continue to be an important source of food, nutrition, income and livelihood to millions of people
• India aims to achieve a target of producing 22 million metric tonnes of fish by 2024-25.
• The fisheries sector has witnessed three major transformations in the last few years:
  • The growth of inland aquaculture, specifically freshwater aquaculture.
  • The mechanization of capture fisheries.
  • The successful commencement of brackish water shrimp aquaculture.

Related Government Initiatives:

• Fishing Harbours:
  • The development of five major Fishing Harbours (Kochi, Chennai, Visakhapatnam, Paradip, Petuaghat) as hubs of economic activity.
• Seaweed Park:
  • Multipurpose seaweed park in Tamil Nadu would be the center of production for quality seaweed-based products, developed on a hub and spoke model.
• Pradhan Mantri Matsya Sampada Yojana:
  • It strives to create direct employment to 15 lakh fishers, fish farmers, etc. and about thrice this number as indirect employment opportunities.
  • It also aims to double the incomes of fishers, fish farmers and fish workers by 2024.
• Palk Bay Scheme:
  • The Scheme, “Diversification of Trawl Fishing Boats from Palk Straits into Deep Sea Fishing Boats” was launched in 2017 as a Centrally Sponsored Scheme.
    (i) It was launched as part of the umbrella Blue Revolution Scheme.
• Marine Fisheries Bill, 2021:
  • The Bill proposes to only grant licenses to vessels registered under the Merchant Shipping Act, 1958, to fish in the Exclusive Economic Zone (EEZ).

Strengthening Pharmaceuticals Industry’ (SPI)

Ministry of Chemicals and Fertilisers unveiled three schemes in order to strengthen Micro, Small and Medium Enterprises (MSMEs) in the pharmaceutical sector. 

Three schemes are:

• Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS)– PTUAS would provide pharmaceutical MSMEs with a proven track record, in a bid to upgrade their technology. It will provide a capital subsidy of 10% on loans up to Rs 10 crore.
  The minimum repayment period has been fixed at three months. 
• Assistance to Pharma Industries for Common Facilities Scheme (API-CF)- API-CF will help in strengthening existing pharmaceutical clusters’ capacity to attain sustained growth. Under it, the assistance of up to 70 per cent of the project cost of Rs 20 crore (Whichever is less) will be provided. 
• Pharmaceutical and Medical Devices Promotion and Development Scheme (PMPDS)-. It aims to create a database of pharma and medical device sectors. 

These schemes anticipate technology up-gradation, liquid waste treatment plants in clusters and the setting up of common research centres for pharma MSMEs. 

• Schemes would help the small companies in upgrading their facilities to international manufacturing standards.