The North Eastern Handicrafts and Handlooms Development Corporation (NEHHDC), under the Ministry of Development of North Eastern Region (DoNER), has achieved the prestigious Oeko-Tex certification for its Eri Silk.
What isOeko-Tex Certification?
Details
Establishment
Founded in 1992 by the Oeko-Tex Association.
Comprises 18 independent textile research and testing institutes.
Certification System
Independent testing and certification for textile safety and environmental standards.
Key Standards
– STANDARD 100: Tests textiles for harmful substances. – MADE IN GREEN: Ensures environmentally friendly and socially responsible production. – LEATHER STANDARD: For leather products, free from harmful chemicals. – STeP: Certification for sustainable textile production facilities. – ECO PASSPORT: Certifies safe chemicals used in textiles. – DETOX TO ZERO: Supports elimination of hazardous chemicals in production.
Testing Process
Products tested for harmful substances like heavy metals, formaldehyde, azo dyes, etc.
Global Recognition
Trusted worldwide for ensuring product safety, environmental friendliness, and social responsibility.
Benefits
– Consumers: Assurance of safe, chemical-free products. – Manufacturers: Access to global markets, improved brand reputation. – Environment: Promotes sustainable and eco-friendly production.
Usage
Found on clothing, home textiles, bedding, footwear, and more.
About Eri Silk
Eri Silk is the world’s only vegan silk, where the moth naturally exits the cocoon, making it cruelty-free.
Unlike conventional silk production, where cocoons are boiled to extract the silk filament.
It is also known as Ahimsa Silk.
It is primarily produced in the North-Eastern states of India, especially Assam; also found in Meghalaya, Nagaland, Manipur, and other states.
Its production is deeply rooted in the traditions of tribal communities in Assam and adjacent hill areas.
Significant Features of Eri Silk:
Production Process: Known as Ericulture; involves rearing silkworms on castor plants; the silk is spun rather than reeled due to the naturally pierced cocoons.
Eco-Friendly: Requires minimal chemicals and water; only 20 litters of water needed toconvert 1 kg of raw Eri fiber into yarn.
Unique Properties: Isothermal (temperature-regulating), anti-fungal, washable, durable, and less shiny than other silks.
PYQ:
[2013] What is an FRP composite material? How are they manufactured? Discuss their application in aviation and automobile industries. (100 words)
US Federal court ruled Google’s $26 billion payments to default on smartphone browsers violated US antitrust law, blocking competitors and benefiting the Justice Department.
About Google’s Antitrust Case
The U.S. Department of Justice (DOJ) brought an antitrust case against Google, accusing it of maintaining a monopoly in the online search and advertising sectors.
The DOJ argued that Google’s dominance was achieved through exclusive distribution agreements, which prevented competitors from succeeding in the market.
What Did the Ruling State?
Google Monopolistic Practices: Google broke antitrust laws to keep its monopoly on “general search services” and “general search text ads.”
Note: The Sherman Antitrust Act is a landmark U.S. federal law enacted in 1890 to promote competition and prevent monopolistic practices.
Advantageous position due to the “default” search engine: The Google company has an unseen advantage over its competitors where it’s search engine processes an estimated 8.5 billion queries per day worldwide.
The present judgment by US District of Colombia limits itself to the relevant geographic market of the US.
Paying billions to smartphone makers: Google was accused of paying billions to smartphone makers like Apple and Samsung to ensure Google was the default search engine on their devices and browsers.
How Do Monopolistic Practices Harm Consumer Experience?
Impact on Competition: Monopolistic practices, like those exhibited by Google, stifle competition by preventing rivals from entering the market and can lead to higher prices and reduced innovation.
Unfair Platform for Start-ups: The new start-ups would have to surmount the entry barriers to create a GSE of comparable quality to Google. These barriers would cost high capital, access to distribution channels, and brand recognition.
Quality Degradation: A monopolist may lose the incentive to improve the quality of its products, as there is little risk of losing customers to competitors.
The ruling highlighted that Google conducted a study in 2020 that showed it would not lose search revenue even if it significantly reduced the quality of its search product.
Limites the choices of consumer: When a company holds a monopoly, consumers are often left with few alternatives, allowing the monopolist to exploit its position.
Government Initiatives taken in India for similar line:
The Draft Competition Bill 2024: The Ministry of Corporate Affairs’ Bill prevents giant tech companies/ Systemically Significant Digital Enterprises (SSDEs) from participating in anti-competitive practices.
The Bill imposes restrictions on SSDEs, barring them from favouring their own products and services, and from using or sharing users’ personal data without their consent.
Big tech companies have objected to the Bill because the compliance burdens would shift focus from innovation and research.
Way forward:
Encouraging Innovation: Governments and regulatory bodies should support the development of alternative search engines and platforms through incentives, grants, and support for startups.
Banning Exclusive Agreements: Prohibit exclusive distribution agreements that make one product or service the default, ensuring that consumers have a choice and that competitors can fairly compete.
Mains question for practice:
Q Discuss the significance of India’s Competition Act, 2002 in regulating anti-competitive practices and promoting a fair market environment. 10M
Union Minister for Commerce and Industry has introduced Diamond Imprest Licence at the 40th edition of the India International Jewellery Show (IIJS) 2024.
The event was organized by the Gem & Jewellery Export Promotion Council (GJEPC).
What is the Diamond Imprest Licence?
The Diamond Imprest Licence is a regulatory framework introduced by the Indian government to facilitate the import of diamonds for exporters, particularly benefiting Micro, Small, and Medium Enterprises (MSMEs) in the diamond industry.
It will allow Indian diamond exporters who meet a certain export turnover threshold to import up to 5% of their average export turnover over the preceding three years.
This policy aims to create a level-playing field for MSME diamond exporters, enabling them to compete more effectively with larger industry peers.
About the Gem & Jewellery Export Promotion Council (GJEPC )
Details
Establishment
Established in 1966 by the Ministry of Commerce and Industry, Government of India.
Granted an autonomous status in 1998.
Headquarters
Mumbai, India
Regional offices in New Delhi, Kolkata, Chennai, Surat, Jaipur
Membership
Represents almost 7,000 exporters from across India.
Role and Functions
Promotes exports of gems and jewellery
Presents industry issues to the government and recommends policy interventions.
Common Facility Centers (CFCs)
Established in Amreli, Visnagar, Palanpur, and Junagadh in Gujarat.
Services include planning, laser sawing, and cutting facilities to process diamonds.
Awards
Organizes premier jewellery design competitions and awards, celebrating creativity and innovation in jewellery design.
Key Events
Hosts the Design Inspirations seminar annually in Mumbai, educating jewellers, designers, and students about upcoming trends in India, Europe, and the US.
Educational Institutes
Operates 7 educational institutes across five cities, including the Indian Institute of Gems & Jewellery (IIGJ) in Mumbai, Jaipur, Delhi, Varanasi, and Udupi.
Gemmological Laboratories
Gemmological Institute of India (GII), Mumbai: Established in 1971, focusing on gemological training, research, and certification.
Gem Testing Laboratory, Jaipur: Specializes in grading and certifying colored gemstones.
Indian Gemological Institute, New Delhi: Provides gem testing and certification services, particularly for the North Indian market.
PYQ:
[2018] Which one of the following foreign travelers elaborately discussed about diamonds and diamond mines of India?
The global stock and bond markets, especially Japan’s, are experiencing turmoil due to the unwinding of the immensely popular yen carry trade.
What is Yen carry trade?
The yen carry trade is a popular currency trading strategy that involves borrowing Japanese yen at low interest rates and using the funds to invest in higher-yielding assets denominated in other currencies, with the goal of profiting from the interest rate differential.
Why is it unwinding right now?
Strengthening Yen: The Japanese yen has appreciated significantly, rising over 3% against the dollar after the Bank of Japan (BoJ) raised interest rates to 0.25% and announced a reduction in bond purchases. This strengthening of the yen diminishes the profitability of the carry trade, which relies on a weaker yen to remain viable.
Interest Rate Changes: Expectations of imminent interest rate cuts by the U.S. Federal Reserve have contributed to the dollar’s weakness, further impacting the carry trade. As the interest rate differential narrows, the incentive to maintain yen carry positions decreases.
How does it work?
Mechanism: The yen carry trade involves borrowing yen at low interest rates and converting it into higher-yielding currencies. Investors use the borrowed yen to purchase assets in currencies that offer better returns, such as U.S. dollars or Australian dollars.
Investors typically aim for annualized returns of around 5% to 6% on dollar-yen carry trades, which is the difference between U.S. and Japanese interest rates. The strategy can be lucrative as long as the yen does not appreciate significantly against the currencies in which the investments are made.
How did it begin?
The yen carry trade can be traced back to 1999 when Japan lowered its policy rates to zero following an asset price bubble burst. This led Japanese investors to seek better returns in international markets, effectively turning Japan into the world’s largest creditor nation.
The contemporary form of the carry trade gained prominence in 2013 under Prime Minister Shinzo Abe’s quantitative easing policies, coinciding with rising U.S. rates and a depreciating yen. This trend intensified in 2022 and 2023 as the Federal Reserve raised rates rapidly while the Bank of Japan maintained negative short-term rates.
How large Is It?
The estimated size is about $350 billion in short-term external loans by Japanese banks attributed to yen-funded carry trades. However, this figure may not fully capture the extent of the trades, as it could include commercial transactions or loans to foreign businesses.
The actual size of yen carry trades could be larger due to the leverage used by hedge funds and computer-driven funds.
Is it coming to an end?
The Bank of Japan has recently started raising rates, which has led to a stronger yen. As a result, the yield gap between Japanese and other currencies has narrowed, diminishing the profitability of carry trades.
The appreciation of the yen (by about 13% in a month) has prompted leveraged investors to unwind their positions, leading to a sell-off in global stock and bond markets. This unwinding is driven by the need to repay yen loans as the currency strengthens, causing further declines in asset prices internationally.
Conclusion: The yen carry trade is unwinding due to the strengthening yen and narrowing interest rate differentials. As the yen appreciates, profitability decreases, prompting investors to exit positions, leading to global market sell-offs. This trend signifies a shift in monetary policies and changing economic conditions affecting currency trading strategies.
The Ministry of Cooperation, since its inception on 6th July 2021, has taken many initiatives to strengthen and deepen the cooperative movement at the grassroots level.
What is a Co-operative?
A cooperative is “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned enterprise”.
Cooperatives are democratically owned by their members, with each member having one vote in electing the board of directors.
Evolution of Cooperatives in India:
Pre-Independence Era:
First Cooperative Act (1904): Enacted after the Indian Famine Commission (1901) suggested cooperative credit societies to tackle rural debt.
Cooperative Societies Act (1912): Amended the 1904 Act to include non-credit societies and support the cooperative movement.
Maclagan Committee (1915): Evaluated the cooperative movement’s economic and financial stability.
Montague-Chelmsford Reforms (1919): Made cooperation a provincial subject, boosting regional cooperative initiatives.
Post Economic Depression (1929): Various committees in regions like Madras, Bombay, Travancore, Mysore, Gwalior, and Punjab restructured cooperatives.
Gandhian Influence: Gandhi promoted cooperatives for a socialistic society and decentralization. Established the Phoenix Settlement and Tolstoy Farm as cooperative settlements in South Africa.
Post-Independence Era:
First Five-Year Plan (1951-56): Emphasized cooperatives for comprehensive community development.
Multi-State Co-operative Societies Act (2002): Regulated the formation and functioning of multi-state cooperatives.
Amendment (2022): Introduced the Co-operative Election Authority to oversee board elections in multi-state cooperatives.
97th Constitutional Amendment (2011): Made the right to form cooperatives a fundamental right under Article 19.
Added Part IX-B to the Constitution, establishing “The Co-operative Societies” (Articles 243-ZH to 243-ZT).
Empowered Parliament to legislate for multi-state cooperative societies and state legislatures for other cooperatives.
Union Ministry of Cooperation (2021): Created to oversee cooperative affairs, previously under the Ministry of Agriculture.
Initiatives Making Primary Cooperatives Economically Vibrant and Transparent
Details
Model Bye-Laws for Primary Agricultural Credit Societies (PACS)
Prepared and circulated to all States/UTs.
Enables PACS to undertake over 25 business activities.
Adopted by 32 States/UTs.
Establishing New Multipurpose PACS/Dairy/Fishery Cooperatives
Plan to cover all Panchayats/villages in 5 years.
6,844 new PACS, Dairy, and Fishery cooperative societies registered.
World’s Largest Decentralized Grain Storage Plan
Create warehouses and agri-infrastructure at PACS level.
Pilot project extended to 500 additional PACS.
Formation of New Farmer Producer Organizations (FPOs) by PACS
1,100 additional FPOs to be formed by PACS.
992 FPOs formed by NCDC.
PACS Given Priority for Retail Petrol/Diesel Outlets
Included in Combined Category 2 (CC2) for allotment.
270 PACS from 25 States/UTs applied online.
PACS Eligible for LPG Distributorship
Allowed to apply for LPG distributorships.
31 PACS from four States/UTs submitted applications.
PACS as Pradhan Mantri Bharatiya Jan Aushadhi Kendra
Promote PACS to operate Janaushadhi Kendras.
2,594 PACS given initial approval, 674 received drug licenses.
PACS as Pradhan Mantri Kisan Samriddhi Kendras (PMKSK)
Ensure easy accessibility of fertilizer and related services.
38,141 PACS functioning as PMKSK.
Convergence of PM-KUSUM at PACS Level
Farmers can adopt solar agricultural water pumps and install photovoltaic modules.
Micro-ATMs to Bank Mitra Cooperative Societies
Provide doorstep financial services.
2,700 micro-ATMs distributed in Gujarat.
Rupay Kisan Credit Card to Members of Milk Cooperatives
Provide credit at lower interest rates.
48,000 Rupay KCC distributed in Gujarat.
Formation of Fish Farmer Producer Organization (FFPO)
69 FFPOs registered by NCDC.
Department of Fisheries allocated work to convert 1000 fisheries cooperative societies into FFPOs.
Initiatives Strengthening Urban and Rural Cooperative Banks
Details
Urban Cooperative Banks (UCBs) Allowed to Open New Branches
Open up to 10% (max 5 branches) without prior RBI approval.
Doorstep Services by UCBs
Provide banking facilities at home.
Extended Time Limit for Priority Sector Lending (PSL) Targets
Timeline extended to March 31, 2026.
Nodal Officer in RBI for UCBs
Designated for regular interaction.
Increased Housing Loan Limit by RBI
Doubled for UCBs to Rs. 60 lakhs.
Increased to Rs. 75 lakhs for Rural Cooperative Banks.
Rural Cooperative Banks Lending to Real Estate/Residential Housing
Diversify business to benefit Housing cooperative societies.
Non-scheduled UCBs, StCBs, and DCCBs Notified as MLIs in CGTMSE Scheme
Risk coverage up to 85% on loans.
Doubled Monetary Ceiling for Gold Loan by RBI
Increased from Rs. 2 lakhs to Rs. 4 lakh.
Umbrella Organization for UCBs
Approval given to NAFCUB for formation, providing IT infrastructure and operational support.
PYQ:
[2011] In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activities?
The Finance Ministry has reversed the proposed post-Budget customs duty hike on imported laboratory chemicals following an outcry from scientists.
What are the different kinds of chemicals which are imported into the country?
Inorganic Chemicals: This category includes substances like ammonia, phosphoric acid, and sulfuric acid, which are essential for various industrial applications.
Organic Chemicals: Key imports in this category are methanol, acetic acid, and phenol, which are used in the production of plastics, solvents, and pharmaceuticals.
Petrochemicals: Significant imports include polyethene, polypropylene, and styrene, which are crucial for manufacturing plastics and synthetic materials.
Speciality Chemicals: Chemicals such as ethyl vinyl acetate and maleic anhydride are imported for specific applications in industries like adhesives and coatings.
Agrochemicals: This includes various pesticides and herbicides, which are vital for agricultural productivity and crop protection.
How important are these chemicals for scientific research?
Foundation for Experimental Work: Laboratory chemicals are essential for conducting experiments in various scientific fields, enabling researchers to test hypotheses and validate results.
Facilitate Innovation: These chemicals allow for the development of new products and technologies, driving advancements in industries such as pharmaceuticals, biotechnology, and materials science.
Support Medical Diagnostics: Laboratory chemicals play a crucial role in medical testing and diagnostics, aiding in disease detection and treatment monitoring, which is vital for public health.
What was the issue?
Steep Duty Increase: The hike in customs duty on laboratory chemicals alarmed the scientific community, with prices of essential chemicals projected to rise dramatically, such as a batch that typically costs ₹1,00,000 now estimated at ₹2,50,000.
Impact on Research: Researchers expressed concerns that the increased costs would hinder scientific research and experimentation, as many essential chemicals are imported and the hike could disrupt ongoing projects.
Is Ethanol also imported into the country?
Import Volume: India imported approximately 635 million liters of ethanol in 2022, primarily for use as fuel and in industrial applications.
Types of Ethanol: There are two main types of ethanol relevant to India:
Denatured Ethanol: This type is mixed with additives to make it unfit for consumption and is primarily used in laboratories and industrial applications. India has reduced the import tariff on denatured ethanol to encourage its use in manufacturing.
Undenatured Ethanol: This type incurs a higher import tariff of 150% and is generally used for beverage production.
Domestic Production Challenges: Although India has a significant capacity for ethanol production, it often faces challenges such as insufficient molasses supply. The government has set ambitious goals for ethanol blending in gasoline, aiming for a 20% blend by 2025.
How was the issue resolved?
The Finance Ministry clarified that all imported laboratory chemicals, except undenatured ethyl alcohol, will be taxed at the original 10% customs duty rate instead of the proposed 150% hike.
The customs department had initially hiked the duty to 150% to curb the import of undenatured ethyl alcohol that was being mis-declared as laboratory chemicals to avoid the higher 150% duty on undenatured ethanol.
Way forward:
Strengthen Local Production of Niche Chemicals: Need to invest in domestic manufacturing capabilities for niche and specialty chemicals to reduce dependency on imports, enhance self-sufficiency, and lower costs for research institutions.
Facilitate Smooth Import Processes: Govt. should streamline import regulations for essential laboratory chemicals, ensuring clear guidelines and minimal delays, while maintaining necessary checks to prevent misclassification and misuse.
In 2023, the Securities and Exchange Board of India (SEBI) introduced an updated framework for corporate sustainability reporting.
The revised Business Responsibility and Sustainability Report (BRSR) framework mandates that companies assess and disclose the environmental impact of their entire value chain.
Business Responsibility and Sustainability Report (BRSR)
In 2021, the Securities and Exchange Board of India (SEBI) introduced the Business Responsibility and Sustainability Report (BRSR) framework, mandating that the top 1,000 listed companies in India disclose their performance on environmental, social, and governance (ESG) parameters.
This initiative aimed to enhance transparency and encourage responsible business practices, building on the earlier Business Responsibility Report (BRR) introduced in 2012.
Key Features of the BRSR Framework
Expanded Reporting Requirements: The BRSR Core builds upon the initial Business Responsibility and Sustainability Report (BRSR) introduced in 2021, which mandated the top 1,000 listed companies in India to disclose their ESG performance.
Mandatory Assurance: Starting from FY 2023-24, the BRSR Core mandates that the top 150 companies obtain reasonable assurance on their ESG disclosures. This requirement aims to improve the credibility of the reported data and combat greenwashing, ensuring that companies provide reliable information about their sustainability practices.
Nine ESG Attributes: The framework is structured around nine critical ESG attributes, which include greenhouse gas emissions, water usage, energy consumption, and employee well-being.
Comply or Explain Principle: SEBI has adopted a “comply or explain” approach, allowing companies to either adhere to the specified reporting requirements or provide valid reasons for non-compliance.
Alignment with International Standards: The BRSR Core is aligned with several internationally recognized frameworks, such as the EU Taxonomy and the Global Reporting Initiative (GRI) standards.
Focus on Value Chain: A significant aspect of the BRSR Core is its emphasis on assessing the ESG impacts of a company’s supply chain.
For India, every economic sector must contribute to greener means of production
For India to achieve its sustainability goals and contribute effectively to greener means of production, every economic sector must play a vital role.
Importance of Sectoral Contribution to Sustainability
Diverse Economic Sectors: The key sectors such as agriculture, construction, power, manufacturing, transport, and tourism are crucial for transitioning to a green economy. For example, electric transport and eco-tourism.
Government Initiatives: The Indian government is actively promoting green growth through investments in priority sectors, which include manufacturing, renewable energy, and electric mobility. For example, An allocation of ₹19,700 crore for the production of green hydrogen.
Green Manufacturing: The manufacturing sector is a significant focus for greening efforts, with studies indicating that sustainable manufacturing practices can lead to substantial reductions in greenhouse gas emissions. For example, the (Zero Defect Zero Effect) ZED initiative aims to create a competitive, qualitative, and clean manufacturing ecosystem.
Renewable Energy Commitment: India has set ambitious targets for increasing its non-fossil energy capacity to 500 gigawatts by 2030.
Collaboration and Policy Frameworks: Initiatives like the Partnership for Action on Green Economy (PAGE) and various policy dialogues aim to facilitate collaboration among sectors to promote inclusive and sustainable economic growth.
Way forward:
Enhanced Accountability: Ensure stricter enforcement of the BRSR and BRSR Core frameworks, expanding the scope to cover more companies and sectors beyond the top 1,000 listed companies.
Capacity Building: Provide training and resources to companies, especially small and medium enterprises (SMEs), to improve their ESG reporting capabilities and integrate sustainability into their core operations.
Mains question for practice:
Q Discuss the significance of the Business Responsibility and Sustainability Report (BRSR) framework introduced by the Securities and Exchange Board of India (SEBI) in promoting sustainable business practices among Indian corporations. 15M
Q1 China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia’, In the light of this statement, discuss its impact on India as her neighbour. (UPSC IAS/2021)
Q2 With respect to the South China sea, maritime territorial disputes and rising tension affaire the need for safeguarding maritime security to ensure freedom of navigation and ever flight throughout the region. In this context, discuss the bilateral issues between India and China. (UPSC IAS/2014)
Prelims:
Q ‘Belt and Road Initiative’ is sometimes mentioned in the news in the context of the affairs of (2016) (a) African Union (b) Brazil (c) European (d) Union China
Note4Students:
Prelims: Bordering countries with China;
Mains: Dependency on Chinese technician;
Mentor comments: Chinese technicians are vital for the Indian economy as they help bridge significant skill gaps in various industries, including manufacturing and technology. Their expertise is crucial for effectively operating Chinese machinery, which many Indian businesses have acquired but cannot utilize efficiently without skilled personnel. This dependency is highlighted by the urgent need for faster visa approvals for Chinese experts, as delays have led to substantial production losses, estimated at $15 billion over recent years. Integrating their knowledge is essential for enhancing productivity and achieving India’s manufacturing ambitions.
Let’s learn!
__
Why in the News?
Indian authorities plan to increase visas for Chinese technicians, acknowledging a significant skill gap between them and Indian workers, which is crucial for enhancing productivity in various industries.
Dependency on Chinese Technicians
Skill Gaps: Indian businesses are facing a substantial skill deficit compared to their Chinese counterparts, which hampers productivity and the effective use of advanced machinery.
Declining Visa Issuance: The number of visas issued to Chinese nationals has drastically decreased from approximately 200,000 in 2019 to just 2,000 in 2024, largely due to geopolitical tensions following border clashes in 2020.
This reduction has created a bottleneck in the manufacturing sector, leading to estimated production losses of around $15 billion over the past four years.
Government Response: In light of these challenges, Indian authorities are working to expedite the visa process for Chinese technicians, aiming to reduce processing times from several months to about 30 days.
Importance of Foreign Knowledge Integration:
Role of Foreign Knowledge in Development: Foreign knowledge is crucial for economic development but is most effective when combined with a well-educated domestic workforce. This integration enhances the ability to utilize foreign expertise effectively.
Korea’s Successful Model: In the 1980s, South Korea leveraged foreign technology by purchasing machines to dismantle and reverse engineer them.
This was possible due to a strong educational foundation that had been established over three decades, allowing minimal reliance on foreign assistance.
China’s Strategic Approach: China began its rapid economic growth in the early 1980s, despite having a weaker educational base than Korea. However, the quality of primary education during the Communist era prepared China for development.
Deng Xiaoping’s initiatives, including sending policymakers on international study tours and attracting foreign investors, facilitated the absorption of global knowledge.
India’s Educational Challenges: India has focused on building school infrastructure and increasing enrollment, but the quality of education remains low.
Only about 15% of Indian students possess the basic skills necessary for participation in the global economy, compared to 85% of Chinese students.
Global Competitiveness: China’s performance in international assessments, such as the Programme for International Student Assessment (PISA), has consistently improved, with Chinese students outperforming their peers globally.
In contrast, India’s participation in PISA ended after a poor showing in 2009, highlighting a significant gap in educational outcomes.
Red Queen Race:
Fundamental lesson from the Red Queen: The phrase “You must run twice as fast as you can to stay in the same place” illustrates the necessity for continuous improvement and adaptation in the face of competition, especially in the context of global technological advancements.
China’s educational advancements: Chinese universities are now among the world’s best, particularly in fields like computer science and mathematics, reflecting a strong emphasis on integrating foreign knowledge with domestic education.
Scientific progress: Chinese scientists are making significant strides in applied sciences relevant to industrial progress, positioning China as a leader in electric vehicles, solar technology, and artificial intelligence.
Western response to competition: Instead of addressing deficiencies in their education systems, Western leaders are resorting to protectionist measures against Chinese imports, which may not effectively resolve underlying issues in their own educational frameworks.
India’s educational challenges: Indian elites appear to overlook the lessons from China, with economists suggesting a shift towards technology-enhanced service exports while ignoring the need for a robust base of high-quality education to support such initiatives.
Way forward:
Streamline Visa Approval Processes: India should expedite the visa application process for Chinese technicians by implementing a fast-track system that reduces approval times to less than a month.
Enhance Domestic Education and Training: To complement foreign expertise, India must invest in improving its educational system, focusing on vocational training and technical skills.
The markets regulator, SEBI, has proposed a new asset class designed to offer investment products positioned between mutual funds (MFs) and portfolio management services (PMS).
This new category aims to fill an opportunity gap for investors and offer greater flexibility in portfolio construction.
Note:
PMS provides customized investment solutions to high net-worth individuals (HNIs) with a minimum investment limit of Rs 50 lakh.
MFs, on the other hand, have a much lower minimum investment limit of just Rs 100, managed by a professional fund manager.
About the New Asset Class
The new asset class aims to provide an intermediate option with more flexibility in portfolio construction, helping investors avoid unregistered and unauthorized schemes.
It will have a risk-return profile between MFs and PMS, targeting investors with higher risk tolerance and larger investment amounts than those typical of MFs but lower than PMS.
The current range of investment products includes:
MF schemes: Focused on retail investors,
PMS: For HNIs, and
Alternative investment funds (AIF): For sophisticated investors.
How will investments in the new asset class work?
The new asset class will be introduced under the MF structure with necessary relaxations in prudential norms.
The minimum investment amount is proposed to be Rs 10 lakh per investor within the asset management company (AMC)/MF.
This high threshold is intended to deter retail investors while attracting those with investible funds between Rs 10 lakh and Rs 50 lakh.
Significance of the New Asset Class:
SEBI noted that the gap between investment opportunities in MFs and PMS has led some investors towards unauthorized investment avenues.
The new asset class will help curb the proliferation of unregistered investment products and provide a structured and regulated option for investors.
SEBI emphasized that the new asset class would offer a regulated and structured investment suited to investors looking for opportunities between MFs and PMS.
Investment Strategies:
Like MF schemes, the new asset class will provide options for Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP), and Systematic Transfer Plan (STP).
AMCs can offer ‘investment strategies’ under a pooled fund structure with tailored redemption frequencies (daily, weekly, monthly, etc.).
PYQ:
[2021] Indian Government Bond Yields are influenced by which of the following?
Actions of the United States Federal Reserve
Actions of the Reserve Bank of India
Inflation and short-term interest rates
Select the correct answer using the code given below.
(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1, 2 and 3
The Reserve Bank of India (RBI) has broadened the regulations governing remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS). The RBI’s circular authorizes “authorised persons” to facilitate remittances for all permissible purposes under LRS to IFSCs.
About Liberalised Remittance Scheme (LRS)
LRS is governed by the Foreign Exchange Management Act (FEMA) 1999, regulated by the Reserve Bank of India (RBI).
The scheme was introduced by the RBI in 2004 to facilitate outward remittances from India.
LRS allows resident individuals, including minors, to remit a specified amount of money abroad each financial year (April – March).
Currently, individuals are allowed to remit up to USD 250,000 per financial year under LRS.
Funds remitted under LRS can be used for permissible current or capital account transactions, or a combination of both.
Permissible Uses:
Expenses related to travel (private or for business).
Medical treatment abroad.
Payment of fees for education abroad.
Gifts and donations.
Maintenance of close relatives.
Investment in shares, debt instruments, and immovable properties overseas.
Accounts: Individuals can open and maintain foreign currency accounts with banks outside India for transactions permitted under LRS.
Exclusions: LRS is NOT available to corporations, partnership firms, Hindu Undivided Families (HUFs), trusts, etc.
Prohibited Transactions:
Remittances for activities prohibited under Schedule-I of FEMA, such as purchase of lottery tickets, sweepstakes, proscribed magazines, etc.
Trading in foreign exchange abroad.
Remittances to countries identified as non-cooperative by the FATF.
Remittances to individuals/entities identified as posing a terrorism risk by the RBI.
Significance of the move
The RBI’s decision reinforces GIFT IFSC’s position as a prominent international financial services hub.
By broadening the scope of LRS, GIFT IFSC aims to attract more diverse investments and transactions, contributing to the growth of India’s financial sector.
![[30th July 2024] The Hindu Op-ed: The problem with India’s blocking of the Chinese](https://www.civilsdaily.com/wp-content/uploads/2024/07/30-july1-1568x882.jpg)