In News

The Ministry of Home Affairs has recently amended certain provisions of the Foreign Contribution (Regulation) Act (FCRA).

Amended Provisions

• The Act now allows Indians to receive up to Rs 10 lakh annually from their relatives abroad under FCRA.

• • The limit was earlier Rs 1 lakh.
  • If the amount exceeds this limit, theindividuals will now have 90 days to inform the government (which was 30 days earlier).
• The Amendment has given individuals and organisations or NGOs 45 days (which was earlier 30 days) for theapplication of obtaining 'registration' or 'prior permission' under the FCRA to receive funds.
• Organisations receiving foreign funds will not be able to use more than 20 % of such funds for administrative purposes.
  • This limit was 50 % before 2020.
• The provision has increased the number of compoundable offences under the Act from 7 to 12.

Significance of the Amendments

• Enhances Remittances: It will curb the outflow of fundson one hand while enhancing inward Remittances on the other.
• Stabilise forex Reserves: Itwill lead to an increase in inflow of funds into India, stabilising the forex reserves and also the Indian currency.
• Reduces Trade Deficit: An increase in inflow of funds and reduction in outflow of funds will also helpreduce the trade deficit.

Source:

• Home ministry amends FCRA rules; gives more time to declare funds
• Govt amends foreign donation Act; Check latest rules

In News

The Reserve Bank of India has announced a series of steps to boost foreign exchange inflows to arrest the rupee’s slide against the dollar.

What are the Steps taken by the RBI?

• The measures include doubling the annual overseas borrowing limits for companies to $1.5 billion and temporarily abolishing interest-rate caps for banks to attract deposits from non-resident Indians.
• RBI has exempted banks from maintaining cash reserve ratio and statutory liquidity ratio on incremental foreign currency and rupee-denominated term deposits raised from non-resident Indians between 1 July and 4 November.

• Easing foreign portfolio investment (FPI) norms, RBI allowed new issuances of 7-year and 14-year government securities under the fully accessible route (FAR).
  • Currently, only 5-year, 10-year and 30-year G-secs are designated under FAR. FPI investment in bonds under FAR has no limits, unlike other securities.
• FPIs will be provided with a limited window till October 31, 2022, during which they can invest in corporate money market instruments like commercial paper and non-convertible debentures with an original maturity of up to one year.
• FPIs can continue to stay invested in these instruments till their maturity or sale. These investments will not be included for reckoning the short-term limit for investments in corporate securities.
• The measures are expected to further diversify and expand the sources of forex funding, mitigate volatility, and dampen global spillovers.

 Reason for Easing of Norms

• The rupee has depreciated by 4.1 per cent to 79.30 against the US dollar in the current financial year till July 5, FPIs (foreign portfolio investors) have pulled out Rs 2.32 lakh crore in six months, and $50 billion have been shaved off forex reserves over the last nine months
• India’s trade gap progressively widened to a record in June because of rising import costs of crude, gold and other commodities.
• Economists have estimated India’s current account deficit to widen to more than 3% of GDP this fiscal, nearly double that of the previous year.
• The global outlook is clouded by recession risks. Consequently, high risk aversion has gripped financial markets, producing surges of volatility, sell-offs of risk assets and large spill overs, including flights to safety and safe-haven demand for the US dollar.
  • As a result, emerging market economies (EMEs) are facing retrenchment of portfolio flows and persistent downward pressures on their currencies, it said.

Sources:

• RBI eases forex rules to defend currency:
• To stem Rupee slide, boost forex inflows, RBI eases FPI, NRI deposit norms:

In News

The Central government has planned to table the Development of Enterprise and Service Hubs (DESH) Bill in the monsoon session of the Parliament.

About the News

• The World Trade Organization’s dispute settlement panel has recently ruled that India’s export-related schemes, including the SEZ Scheme, were inconsistent with WTO rules, since it directly linked tax benefits to exports.
  • Countries are not allowed to directly subsidize exports as it can distort market prices.
  • SEZs also started losing their allure after the introduction of minimum alternate tax and a sunset clause to remove tax sops.
    • SEZ units used to enjoy 100% income tax exemption on export income for the first five years, 50% for the next five years, and 50% of the ploughed back export profit for another five years.
• To address all this, the DESH Bill will be introduced which will overhaul the special economic zones (SEZ) legislation. 

What is the DESH Bill?

• It will mend the existing Special Economic Zone law of 2005 and aims to revive interest in SEZs and develop more inclusive economic hubs.

• The SEZs will be revamped and renamed as Development hubsand will be free from a number of the laws that currently restrict them.
  • These hubs will facilitate both export-oriented and domestic investment,playing the dual role of domestic tariff area and SEZ.
• The governmentmay impose an equalization levy on goods or services supplied to the domestic market to bring taxes at par with those provided by units outside.

Significance of the Legislation:

• Development Hubs:
  • Beyond promoting exports, the DESH legislation hasa much wider objective of boosting domestic manufacturing and job creation through ‘development hubs’.
  • These hubs will no longer be required to be net foreign exchange positive cumulativelyin five years (i.e, export more than they import) as mandated in the SEZ regime, and will be allowed to sell in the domestic area more easily.
  • The hubs will, therefore, beWTO-compliant.
• Tax benefits at these hubs: The draft Bill states that states and the Centre will be allowed to give further incentives in the form of tax rebates, incentives, exemptions, and duty drawbacks. 
  • Subsidy schemes may be offered for goods and services at these hubs. States and the Centre may take fresh measures to speed up clearances and simplify compliance.
• Online Portal for Approvals:
  • DESH legislation provides foran online single-window portal for the grant of time-bound approvals for establishing and operating the hubs.
• Boost Domestic Market:
  • Companies can sell in thedomestic market with duties only to be paid on the imported inputs and raw materials instead of the final product.
    • In the current SEZ regime, duty is paid on the final product when a product is sold in the domestic market. Besides, there is no mandatory payment requirement in forex, unlike in the case of SEZs.
• Larger role for States:
  • State boardswould be set up to oversee the functioning of the hubs. 
  • They would have the powers to approve imports or procurement of goods and monitor the utilization of goods or services, warehousing, and trading in the development hub.
    • In the SEZ regime, most decisions were made by the commerce department at the Centre. Now, states will be able to participate and even directly send recommendations for development hubs to a central board for approval.

Source:

• What a new SEZ law will mean for manufacturing
• Proposed DESH law aims to grant SEZs greater flexibility, but will it work?

Image source:

• Special Economic Zone

On July 7, 1799, Maharaja Ranjit Singh captured Lahore. The Afghan king, Zamān Shah, confirmed  Ranjit Singh as governor of the city, but in 1801 Ranjit Singh proclaimed himself maharaja of the Punjab. He had coins struck in the name of the Sikh Gurus, the revered line of Sikh leaders, and proceeded to administer the state in the name of the Sikh commonwealth. A year later he captured Amritsar (now in Punjab state, India), the most-important commercial entrepôt in northern India and sacred city of the Sikhs. Thereafter, he proceeded to subdue the smaller Sikh and Pashtun principalities that were scattered throughout the Punjab.

All Ranjit Singh’s conquests were achieved by Punjabi armies composed of Sikhs, Muslims, and Hindus. His commanders were also drawn from different religious communities, as were his cabinet ministers. In 1820 Ranjit Singh began to modernize his army, using European officers—many of whom had served in the army of Napoleon I—to train the infantry and the artillery.

Source:

• Ranjit Singh:

• Context: Ukrainian mathematician Maryna Viazovska, along with 3 others have been recently awarded the 2022 Fields Medal.
• Fields Medal, often described the Nobel Prize in mathematics, is awarded by the International Mathematical Union (IMU), an international non-governmental and non-profit scientific organisation that aims to promote international cooperation in mathematics.
• It is awarded every four years to one or more mathematicians under the age of 40 in recognition of “outstanding mathematical achievement for existing work and for the promise of future achievement”.

• The honour carries a physical medal of 14K gold, 63.5 mm in diameter and weighing 169 g, and with a unit price of approximately 5,500 Canadian dollars.
• There is also a cash award of CAD 15,000.
• The obverse of the medal is embossed with the head of Archimedes facing right, and the Latin words “Transire suum pectus mundoque potiri”, translated as “To pass beyond your understanding and make yourself master of the universe”.
• The reverse has the inscription stating “The mathematicians having congregated from the whole world awarded (this medal) because of outstanding writings”.
• Since 1936, two people of Indian origin- Akshay Venkatesh (2018), and Manjul Bhargava (2014) have received the award.

Source:

• Explained: What is the Fields Medal, so-called ‘Mathematics Nobel’ awarded to Ukrainian professor and three others?
• Spheres in 8 dimensions & prime numbers — the 4 winners of 2022 Fields Medal or ‘maths Nobel’

Image source:

• Joint MSI and Student Colloquium: 2018 Fields Medals I

• Context: Farmers have recently rejected the direct-seeded rice (DSR) technique for transplanting paddy in Punjab.
• DSR refers to the process of establishing a rice crop from seeds sown in the field rather than by transplanting seedlings from the nursery.
• A tractor powered machine is used to drill the seeds in to the soil and hence no nursery preparation is essential in this technique.

• It is a water-saving method of sowing paddy and is also known as broadcasting seed technique.
• The significance of this technique include:
  • Lesser Labour Requirement
  • Easier and Faster planting
  • Early crop maturity by 7-10 days
  • Efficient water usage and higher water stress tolerance
  • Less methane emission
• However, it has the following disadvantages:
  • Uses more seed than transplanting (8-10 kg/acre, compared to 4-5 kg in transplanting)
  • High Laser land levelling costs (Rs 1,000/acre)
  • Non- availability of the herbicides.

Source:

• Punjab's plan for water-saving paddy technique goes awry.
• Direct seeded rice for promoting water use efficiency

Image source:

• Punjab Government promotes direct seeding of rice

• Context: As per the recent Purchasing Managers' Index (PMI) survey, India's services sector has logged its fastest growth in over 11 years.
• PMI is a survey-based measure that asks the respondents about changes in their perception of key business variablesas compared with the previous month.
• It is an index of the prevailing direction of economic trends in the manufacturing and service sectors.

• The purpose of the PMI is to provide information about current and future business conditionsto company decision makers, analysts, and investors.
• It is calculated separately for the manufacturing and services sectorsand then a composite index is also constructed.
• The PMI is a number from 0 to 100.
  • A print above 50 indicates expansion, while a score below 50 denotes contraction.
  • A reading at 50 indicates no change.
• If the PMI of the previous month is higher than the PMI of the current month, it represents that the economy is contracting.
• It is usually released in the beginning of every month and therefore, considered a good indicator of economic activity.
• PMI is compiled by IHS Markit (part of S&P Global) for more than 40 economies worldwide.

Source:

• India services growth in June fastest in more than 11 years: PMI survey
• India's Service sector activity in June records highest growth in 11 years: PMI survey

Image source:

• Services sector PMI climbs to an 11-yr high in June

• Context: Researchers at the Indian Institute of Science (IISc) have developed a design framework to build next-generation analog computing chipsets.
• Using their novel design framework, the team has built a prototype of an analog chipset called ARYABHAT-1 (Analog Reconfigurable Technology And Bias-scalable Hardware for AI Tasks).

• This type of chipset can be especially helpful for Artificial Intelligence (AI)-based applications like object or speech recognition – think Alexa or Siri – or those that require massive parallel computing operations at high speeds.
• Most electronic devices, particularly those that involve computing, use digital chips because the design process is simple and scalable.
• In applications that do not require precise calculations, analog computing has the potential to outperform digital computing as the former is more energy-efficient.
• However, there are several technology hurdles to overcome while designing analog chips. Unlike digital chips, testing and co-design of analog processors is difficult. Large-scale digital processors can be easily synthesised by compiling a high-level code, and the same design can be ported across different generations of technology development -- say, from a 7 nm chipset to a 3 nm chipset -- with minimal modifications.
• Because analog chips don’t scale easily, they need to be individually customised when transitioning to the next generation technology or to a new application -- their design is expensive.
• To overcome these challenges, the team has designed a novel framework that allows the development of analog processors which scale just like digital processors. Its chipset can be reconfigured and programmed so that the same analog modules can be ported across different generations of process design and across different applications.

Source:

• IISc researchers develop design framework to build next-gen analog computing chipsets:

Essence: World has polarized over tussle between Western powers on one side and China and Russia on another. The Ukraine crisis and Chinese aggression in the Indo-Pacific has contributed to this polarization.

Recently concluded international summits like the BRICS summit and G-7 summit have given a glimpse of which country lies in which camp. India has also made its middle path clear by attending both the summits and refusing to let those summits get converted into blame-game politics.

Author is of the view that India should be guided by Nehru's view that growing the unaligned area in global politics is necessary to avoid a path to catastrophic war on which a polarized world is destined to travel. India can do so by leading a group of minded countries whose number is more than significant.

Why should you read this article?

• To understand increasing polarization in global politics and India’s position
• To understand opportunity India has to address this global problem.

Source:

• Words from Bandung to relive in Bali and Delhi:

Essence: The article is based on the recent case filed by Twitter on Indian government. Twitter has challenged the directions by government to block tweets and even handles issued by MEITY under Section 69A of the Information Technology Act, 2000. Article raises a question like, is mere connectivity enough to fulfil the democratic promises of the Constitution? At the core of the legal issue is the freedom of speech and the future of Digital India.

Why should you read this article?

• To comprehend the most current Twitter controversy on India's Digital Program.
• To be aware of potential future solutions to the problem.

Source:

• Twitter’s legal challenge to Centre’s takedown orders flags issues of free speech:

Background

• Over the years, the reports of doctors cheating patients or charging exorbitant fees for medical care have increased.
• However, a Bihar-based doctor gives us hope to revive the image of the fraternity that is deteriorating in recent times.

About the Doctor

• For the past 35 years, Dr Ramanand Singh from Barbigha village in Bihar has been treating his patients for just Rs 50. He even waives off his fees in cases where the patients cannot afford medical treatment. At times, he even pays for their medicines.
• The doctor graduated in 1986 and set up a small clinic offering treatment as a general physician for Rs 5. During his visits, Dr Ramanand often came across patients who could not afford medical treatment.
• Slowly, the locals learned about his philanthropic ways, and the patient flow increased.
• Today, Dr Ramanand treats about 300 patients a day, including people from neighbouring districts like Alava, Navada, Patna, Nalanda, Jamui, Lakhsaria and others.
• He does not earn profits from the fees and survives on the income sourced from my 5-acre ancestral farm.

Source:

• For 35 Years, Doctor Treats Patients for Free & Pays for Their Meds, Groceries: