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GS Paper: GS3-12.Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth

  • The occasion to revisit the state’s role

    The role of the state has come in the focus in the corona crisis. This article describes how the dominant role once played by the state declined over time and what implications it has for society. In the next part of the article, need to revisit the political system of the country is emphasised.

    Paradigm shift due to Covid-19

    • We are unlikely to return to pre-coronavirus homeostasis after the war against it is won.
    • No section or sector is going to remain untouched and unaltered by the devastation the novel coronavirus is now unleashing.
    • Its annihilation in the near future is not on the cards.
    • Vaccines are going to be slow in coming; therefore, its taming is not immediate.
    • The second wave of an outbreak is a realistic probability.
    • Unlike the other threats: Unlike other threats to humanity such as global warming and nuclear armageddon, this threat is now, not in the future.
    • It is here simultaneously for everyone, not for someone else and somewhere else; its casualties are around us, not in faraway battlefields or polar regions and coastal areas.
    • No country can rescue another; it is each one fending for itself.

    Possibility of a deep recession in the world

    • If the lockdown continues, the world economy will contract by as much as 6% according to the International Monetary Fund.
    • If it is not extended, the loss of human lives could be of unacceptable proportions.
    • The global community will be fortunate if it does not spiral into depression.
    • Both demand and supply contractions are likely to be severe.
    • They are not going to be short-lived. Political systems, economic architectures and cultural mores are on trial.

    Time to build a new paradigm

    • Work patterns, production and distribution practices are up for
    • Denial and wishing away unpleasant, yet probable, realities by governments, global organisations and public intellectuals will only compound economic, social, political and human costs.
    • Build a new paradigm: We must now be quick in seizing lessons from the present crisis and get ready to embark on measures to build a new paradigm of life, work and governance.

    Role of state in focus once again

    • The enlarged economic role of the state in the aftermath of the Second World War came under major assault since the 1980s.
    • Leaders who asked ‘where is society?’ rode to power on the promise of cutting down the government’s role.
    • Systems that were alternatives to capitalism fell out of favour.
    • Entrepreneurs heading unicorns and ‘soonicorns’ have become the new demigods.
    • Minimum governance became the mantra.
    • India too without much consideration joined this creed.
    • Role of state in focus: But COVID-19 is beginning to challenge the political economy of this creed.
    • Very soon the full scores of the performance of state and non-state actors in the COVID-19 stress test will be available across the globe.
    • The Indian state will also have to give answers as far as its report card is concerned.

    How the state’s role declined in India?

    • India embarked on the path of reducing the role of the state, initially, with such caveats as ‘safety net’ and ‘reform with a human face’.
    • Gradually, those caveats fell by the wayside.
    • The Indian state’s role in health care, education, creation and maintenance of infrastructure and delivery of welfare has shrunk or become nominal, half-hearted, inefficient, and dysfunctional.
    • Of course, it is true that it did not give a great account of itself in these sectors even before the 1991 departure.
    • Disappointment with the dismal performance in its economic and administrative functions in the backdrop of a changing global ideological ecosystem encouraged a sharp de facto downsizing of the Indian state’s role.
    • Acceptance among the upper section of society: Its retreat from vital functions and abdication of its social responsibility have gained acceptance and legitimacy among the articulate upwardly mobile.
    • While retreat and abdication found influential and forceful evangelists, the selective retreat had few advocates.
    • This departure, however, was not vigorously interrogated.
    • Supporters of the departure, on the other hand, had little engagement in giving shape to the new policy.
    • Nor did they worry about calibrating the architecture of the emerging role for the state.
    • As a result, ‘private sector’ became the new holy cow in place of the ‘state sector’.
    • What made matters worse is the culture of a simplistic and shallow discourse of public policy that took hold in civil society.
    • It mindlessly privileges the agenda of corporates. It transacts in the idiom of stock exchanges and international rating agencies.

    Who is affected due to declined role of the state?

    • Today, those who bear the brunt of the consequences of shrunken and unresponsive state are the farmer and farm labour, the migrant worker, the unemployed, those in the unorganised sector, the rural poor, and the small entrepreneur.
    • They are paying the highest price for the necessary but unbearable lockdown.
    • They are either stranded far away from home or confined to their homes with no work and incomes, unsupported by the state.
    • Underfunded public health systems are unable to serve them.
    • But the dominant strand of public discourse is out of its depth. It has no time for these concerns.
    • Worse, this discourse can be gamed from time to time.
    • And the alternative discourse is too feeble to draw the attention of the government to the grave implications of COVID-19 for the weak in our society.

    State’s responsibility towards the marginalised

    • The state’s first responsibility is marginalised.
    • The marginalised are also the crucial part of our economy. They lubricate its wheels and generate demand.
    • Demand-side needs to be revived: Announcing stimulus packages that address the supply side alone without beefing up the demand side will be self-defeating to corporates.
    • Prioritising the needs of corporate entities will lead to convulsions in our body politic in the wake of COVID-19.
    • The state is in danger of forfeiting legitimacy if it does not ensure the survival and revival of the marginalised sections.

    From the Mains perspective,  following points are important to highlight the importance of the state’s role in ensuring the welfare of society and why there is a need to revisit the current system owing to certain problems in it.

    Time to revisit the political economy of the Indian state and its role

    • The country should begin a vigorous discourse on redefining every aspect of its involvement in our collective political, economic and social life.
    • The relation between the state and economy, its role in allocating resources and addressing questions of inequality, its duty to provide basic human needs, the extent of the market’s role in providing services such as health, education, civic amenities needs to be revisited.
    • The responsibility of the state and private enterprise towards deprived sections need urgent attention.
    • Re-examining the political structure: We should re-examine the efficacy of our political structures too.
    • The equation between citizens and government and what its implications are for individual freedom, privacy and national security.
    • Also, the equation between the legislature and executive needs to be re-visited.
    • Financial powers: The balance of administrative and financial power between provinces and the union on the one hand and provinces and local bodies on the other should be reconsidered.
    • Election of the representatives: The way we elect our representatives to legislatures must also come under the lens.
    • The issue of weakened local authorities and enfeebled legislatures need attention.
    • For, they are at the coalface, delivering the state to the citizen.
    • The way legislatures are elected and governments are made and unmade must be scrutinised.
    • Our outrage at the power of big money in our electoral system has not arrested its growth.
    • The role of serving and retired members of higher judiciary ought to be a part of the debate.
    • We had an opportunity for intensive debate when the Justice Venkatachaliah Commission submitted its report in 2002 to review the working of the Constitution.

    Conclusion

    The opportunity that COVID-19 provides should not be squandered and must be utilised to have a fresh look at the various issues regarding our social, economic and political life. And states responsibility towards marginalised.

  • Amendment in the FDI Policy for curbing opportunistic takeovers/acquisitions of Indian companies

    The Government of India has reviewed the extant Foreign Direct Investment (FDI) policy for curbing opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19.

    Context

    • The Indian policy revision is meant for sectors and enterprises other than defence, space, atomic energy and sectors and activities “prohibited for foreign investment”.
    • It was understood that the Indian decision was a response to the news of an incremental purchase of shares in HDFC by the People’s Bank of China.

    FDI is an all-season hot topic for both prelims as well as mains. Reading the newscard will make you aware of its scope. We can expect a mains question like –  Recent amendment in the FDI Policy aims for curbing opportunistic takeovers/acquisitions of Indian companies. Elucidate.

    Background

    FDI in India

    • Foreign investment was introduced in 1991 under Foreign Exchange Management Act (FEMA), driven by then FM Manmohan Singh.
    • There are two routes by which India gets FDI.
    1. Automatic route: By this route, FDI is allowed without prior approval by Government or RBI.
    2. Government route: Prior approval by the government is needed via this route. The application needs to be made through Foreign Investment Facilitation Portal, which will facilitate single-window clearance of FDI application under Approval Route.
    • India imposes a cap on equity holding by foreign investors in various sectors, current FDI in aviation and insurance sectors is limited to a maximum of 49%.
    • In 2015 India overtook China and the US as the top destination for the Foreign Direct Investment.

    What is the amendment about?

    • The govt. has amended para 3.1.1 of extant FDI policy as contained in Consolidated FDI Policy, 2017.
    • In the event of the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership, such subsequent change in beneficial ownership will also require Government approval.

    The present position and revised position in the matters will be as under:

    Present Position

    • A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited.
    • However, a citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route.
    • Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment.

    Revised Position

    • A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited.

    [spot the difference]

    • However, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.
    • Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment.

    In response to China

    • China accused that India’s recently adopted policy goes against the principles of the World Trade Organisation (WTO).
    • It tends to violate WTO’s principle of non-discrimination, and go against the general trend of liberalisation and facilitation of trade and investment.

    Impact

    • The amended policy brings every kind of Chinese investors to India within the ambit of government approval reducing the space for private business negotiations.
    • The decision would face difficulties, especially if the government tried to attribute nationality to venture capital funds.

    Back2Basics: Foreign Direct Investment (FDI)

    • An FDI is an investment in the form of a controlling ownership in a business in one country by an entity based in another country.
    • It is thus distinguished from a foreign portfolio investment by a notion of direct control.
    • FDI may be made either “inorganically” by buying a company in the target country or “organically” by expanding the operations of an existing business in that country.
    • Broadly, FDI includes “mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans”.
    • In a narrow sense, it refers just to building a new facility, and lasting management interest.

  • [pib] Software Technology Parks of India (STPI)

    Government of India has given 4 months’ Rental Waiver to the IT Companies Operating from Software Technology Parks of India (STPI) Centers.

    STPI which witness multi-million transactions every day are the most promising workplaces for startups in India. They have gained popularity not among Indians, but also on an international platform for its state of the art infrastructure, world-class working conditions and amenities. We can expect a mains question like “Discuss the role of STPIs in making India a hub of ITeS exports”.

    Why this waiver?

    • The rental waiver will provide relief to the industry in this crisis situation emerged due to COVID19 pandemic.
    • Most of these units are either Tech MSMEs or startups.
    • This effort is also in the larger interest of around 3,000 IT/ ITeS employees who are directly supported by these units.

    What are STPI?

    • An STPI is a society established in 1991 by the Ministry of Electronics and Information Technology.
    • The objective of an STPI is to encourage, promote and boost the export of software from India.
    • STPI maintains internal engineering resources to provide consulting, training and implementation of IT-enabled services.

    STPI Scheme

    • The STP Scheme is a 100 per cent Export Oriented Scheme for the development and export of computer software, including export of professional services using communication links or physical media.
    • This scheme is unique in its nature as it focuses on one product/sector, i.e. computer software.
    • The scheme integrates the government concept of 100 per cent Export Oriented Units (EOU) and Export Processing Zones (EPZ) and the concept of Science Parks / Technology Parks, as operating elsewhere in the world.

    Who can get a floor on STPI?

    • An Indian company
    • A subsidiary of a foreign company
    • A branch office of a foreign company

    Features of the STPI

    • The STP Scheme provides various benefits to the registered units, including 100% foreign equity, tax incentives, duty-free import, duty-free indigenous procurement, CST reimbursement, DTA entitlement, and deemed exports.
    • STPI centres also provide a variety of services including high-speed data communication, incubation facilities, consultancy, network monitoring, data centres and data hosting.

  • Economic liberalisation and its faults

    The article describes the problems economic liberalisation has created. Covid-19 has exposed these problems even as developed countries faced shortages of masks and ventilators. The focus is on China’s dominance as a manufacturing hub and its implication for the world and India.

    Background of the end of the ‘Licence Raj’ in India

    • Manmohan Singh’s 1991-92 Budget speech marked the beginning of the end of the ‘Licence Raj’ in India.
    • The Budget also announced the reduction of import duties and paved the way for foreign-manufactured goods to flow into India.
    • Following this, most of the manufacturing sector was opened up to foreign direct investment.
    • India’s industrial policy was virtually junked, and policymakers and the political leadership became contemptuous of the idea of self-reliance.

    Shifting of the base in developing countries

    • In the late 1980s, transnational corporations started shifting the production base to smaller companies in developing countries, especially Asia.
    • The reason for this shift was cheap labour and raw materials.
    • Developed countries supported the move because shifting the polluting and labour-intensive industries suited them as long as ownership remained with their companies.
    • Development of global supply chains: The world witnessed the development of global supply chains in many products starting with garments.

    The dominance of China in the global supply chain is at the root of trade war between the US and China. The outbreak of Covid-19 has added it a new dimension and has forced many countries to reframe their trade policies. And India is no different. This makes it an important topic for UPSC. A question can be framed from an impact angle or the US-China trade war angle.

    The emergence of China as a global manufacturing hub

    • Though many developing countries participated in the global production/value/supply
    • The substantial value addition in developing countries happened in a few production hubs, of which China emerged to be a major one.
    • Decentralised to localised production: Manufacturing shifted from a decentralised production system spread across different counties to just a few locations.
    • The countries like China defied the logic of supply/value chains ensuring substantial value addition for themselves.
    • They even carried out backward integration and thus emerged as global manufacturing hubs for certain products.
    • In the case of health products, China became the global supplier of active pharmaceutical ingredients (API), personal protective equipment (PPE), and medical devices diagnostics.

    What were the implications of China’s dominance in a fight against Covid-19?

    • China’s dominance has major implications for the  COVID-19 outbreak.
    • The resultant loss of manufacturing base has affected the ability of many governments, including of developed countries, to put up an effective response to the crisis.
    • The U.K. Prime Minister asked the country’s manufacturers to produce ventilators in order to provide care for critical COVID-19 patients.
    • Similarly, the U.S. President invoked the Defense Production Act of 1950 to ramp up N95 mask production.
    • Under this legislation, the U.S. President can direct U.S. manufacturers to produce goods according to the directions of the government.
    • Similarly, the French Health Minister stated that the country may nationalise vaccine companies if necessary.
    • Spain nationalised all its private hospitals.
    • Israel and Chile issued compulsory licences to ensure that medicines are affordable.
    • Lack of preparedness and dependence: This exposes the poor state of preparedness and dependence on imports for essential goods required to meet the challenge of any major disease outbreak.
    • This shows that what is good for the company may not be good the country in all circumstances.
    • So, the overwhelming objective of private sector-led economic growth has proved to be disastrous.

    Pay attention to the impact on India. The following two points are very important.

    How economic liberalisation affected India’s ability?

    • In India, economic liberalisation has damaged the government’s capacity in two ways.
    • 1. It incapacitated the government to respond to emergencies based on credible information.
    • The dismantling of the ‘Licence Raj’ resulted in the elimination of channels of information for the government, which is crucial to make informed policy choices.
    • For example, it took the government several meetings to determine the production capacity of various pharmaceutical companies.
    • Similarly, there were difficulties in finding out India’s production capacity of PPE, medical devices and diagnostics.
    • 2. The logic and policies of economic liberalisation seriously undermined the manufacturing capabilities of health products in India.
    • The short-sighted policy measures, with the objective of enhancing profitability of the private sector, allowed the import of raw materials from the cheapest sources and resulted in the debasing of the API industry, especially in essential medicine.
    • According to a report of the Confederation of Indian Industry (CII), nearly 70% of India’s API import is from China.
    • The CII report lists nearly 58 API where the dependence is 90% to 100%.
    • The disruption in the supply of API due to the COVID-19 outbreak has impacted the production of not only medicines required for COVID-19 patients, but also of other essential medicines in India.
    • As a cost-effective producer of medicines, the world is looking to India for supply, but it cannot deliver due to its dependence on China.
    • This dependence has also forced India to impose export restrictions on select medicines.
    • Similar dependence exists with regard to PPE, medical devices and diagnostic kits.
    • The 100% dependence on Reagents, an important chemical component for testing, is limiting the capacity of the government from expanding testing because the cost of each test is ₹4,500.
    • Dangers of dependence: In the name of economic efficiency, India allowed unconditional imports of these products and never took note of the dangers of dependency.

    Loss of jobs and poor working conditions

    • Destruction of manufacturing base: Global supply/production chains destroyed the manufacturing base in developed and developing countries.
    • That also resulted in the loss of jobs and poor working conditions in these sectors.
    • Developing countries were asked to ease their labour protection laws to facilitate global production and supply chains popularly known as global value chains.
    • As a result, people were forced to work in precarious working conditions without any social security net.
    • This created an unorganised army of labourers and is preventing many developing country governments from effectively offering relief.

    Conclusion

    A virus has made us rethink our obsession with the economic efficiency theory. It implores us to put in place an industrial policy to maintain core capacity in health products so that we can face the next crisis more decisively.

  • Euro Zone ‘Coronabonds’

    The coronavirus pandemic has revived the acrimonious debate between euro zone countries about jointly issuing debt through instruments called Coronabonds.

    Coronabonds

    • Coronabonds are proposed debt instruments amongst EU member states, with the aim of providing financial relief to Eurozone countries battered by the coronavirus.
    • They aim to meet healthcare needs and address the deep economic downturn that is set to follow.
    • The funds would be mutualised and supplied by the European Investment Bank, with the debt taken collectively by all member states of the European Union.
    • The euro zone jointly issues debt through its bailout fund, the European Stability Mechanism, which borrows on the market against the security of its paid-in and callable capital provided by euro zone governments.

    Back2Basics

    What is Eurozone?

    • The Eurozone officially called the euro area is a monetary union of 19 of the 27 European Union (EU) member states which have adopted the euro as their common currency and sole legal tender.
    • The monetary authority of the Eurozone is the Eurosystem.
    • It consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.

  • [pib] CCI Green Channel Route

    The Competition Commission of India (CCI) has received a request for merger of a company following green channel combination route.

    What is a Green Channel Route?

    • In a bid to facilitate mergers and acquisitions (combination) in the country, the Competition Commission of India (CCI) has taken inspiration from the customs department and established a ‘green channel’.
    • Every Combination above a certain threshold, seeking to be sanctioned has to necessarily pass the CCI scanner in order to be approved.
    • The CCI characterizes the ‘green channel’ as an automatic system of approval for Combinations wherein the Combination is deemed to be approved upon filing the notice in the format prescribed.
    • The ‘green channel automatic approval upon notification route’ is a right step by CCI towards the propaganda of ease of doing business in India.

  • Fully Accessible Route (FAR)

    The Reserve Bank of India (RBI) has introduced a separate channel, namely ‘Fully Accessible Route’ (FAR), to enable non-residents to invest in specified government bonds with effect from April 1.

    Fully Accessible Route (FAR)

    • The move follows the Union Budget announcement that certain specified categories of government bonds would be opened fully for non-resident investors without any restrictions.
    • Under FAR, eligible investors can invest in specified government securities without being subject to any investment ceilings.
    • This scheme shall operate along with the two existing routes, viz., the Medium Term Framework (MTF) and the Voluntary Retention Route (VRR).

    Benefits

    • This will substantially ease access of non-residents to Indian government securities markets and facilitate inclusion in global bond indices.
    • This would facilitate inflow of stable foreign investment in government bonds.

    Back2Basics

    Voluntary Retention Route (VRR)

    1. RBI had announced a separate scheme called VRR to encourage Foreign Portfolio Investors (FPIs) to undertake long-term investments in Indian debt markets.
    2. Under this scheme, FPIs have been given greater operational flexibility in terms of instrument choices besides exemptions from certain regulatory requirements.
    3. The details are as under:
    • The aggregate investment limit shall be ₹ 40,000 crores for VRR-Govt and ₹ 35,000 crores for VRR-Corp.
    • The minimum retention period shall be three years. During this period, FPIs shall maintain a minimum of 75% of the allocated amount in India.
    • Investment limits shall be available on tap for investments and shall be allotted by Clearing Corporation of India Ltd. (CCIL) on ‘first come first served’ basis.

  • Foreign Trade Policy 2015-2020 extended for one year

    The Union Commerce and Industry Ministry has announced changes in India’s Foreign Trade Policy (FTP). The Govt. has decided to continue relief under various export promotion schemes by granting an extension of the existing Policy.

    Foreign Trade Policy 2015-20

    • It provided a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in keeping with the “Make in India” vision of Prime Minister.
    • The focus of the new policy is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’.
    • It described the market and product strategy and measures required for trade promotion, infrastructure development and overall enhancement of the trade ecosystem.

    Features of the FTP 

    • Goods – Earlier there were 5 different schemes (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) for rewarding merchandise exports with different kinds of duty scrips with varying conditions attached to their use.
    • Duty-free scrips are paper authorisations that allow the holder to import inputs which are used to manufacture products that are exported, or to manufacture machinery used for producing such goods, without paying duty equivalent to the printed value of the scrip.
    • For instance, a duty-free scrip valued at Rupees 1 lakh allows the holder to import goods without paying duty of up to Rupees 1 lakh on the goods.
    • Under the new Foreign Trade Policy, all these schemes have been merged into a single scheme, namely the Merchandise Export from India Scheme (“MEIS“) and there is no conditionality attached to scrips issued under the MEIS.
    • Services – The Served From India Scheme has been replaced with the Service Exports from India Scheme (“SEIS“).
    • SEIS is stated to apply to ‘Service Providers located in India’ instead of ‘Indian Service Providers’.
    • Therefore, SEIS rewards to all service providers of notified services, who are providing services from India, regardless of the constitution or profile of the service provider.
    • Special Economic Zones – The policy outlines extended incentives for Special Economic Zones in India
    • Export Houses – The nomenclature of Export House, Star Export House, Trading House, Star Trading House, Premier Trading House certificate has been simplified and changed to One, Two, Three, Four and Five Star Export House.
    • Status Holders – Business leaders who have excelled in international trade and have successfully contributed to India’s foreign trade are proposed to be recognized as Status Holders and given special privileges to facilitate their trade transactions, in order to reduce their transaction costs and time.
    • Resolving Complaints – In an effort to resolve quality complaints and trade disputes between exporters and importers, a new chapter on Quality Complaints and Trade Disputes has been incorporated into the Foreign Trade Policy.
    • There would be no conditionality attached to any scrips issued under these schemes.
    • For grant of rewards under MEIS, the countries have been categorized into 3 Groups, whereas the rates of rewards under MEIS range from 2% to 5%.
    • Under SEIS the selected Services would be rewarded at the rates of 3% and 5%.

  • Regulation of Payment Aggregators (PAs)

    The Reserve Bank of India released guidelines for regulating payment aggregators (PAs) and payment gateways (PGs), nearly six months after it first proposed regulating these entities in a discussion paper.

    Payment Aggregators (PAs)

    • PAs are entities that facilitate e-commerce sites and merchants to accept various payment instruments from the customers for the completion of their payment obligations.
    • PGs are entities that provide technology infrastructure to route and facilitate the processing of an online payment transaction without any involvement in the handling of funds.
    • With the new set of guidelines PAs and PGs such as Paytm, Pay Pal, Mobikwik, Razorpay, PayU, CCAvenue etc. will be regulated by RBI to ensure the safety of all our online transactions.

    What are the new guidelines?

    The new guidelines say that-

    • A payment aggregator (entities that facilitate e-commerce sites and merchants to accept various payment instruments) should be a company incorporated in India under the Companies Act, 1956 / 2013.
    • Non-bank entities offering payment aggregator services will have to apply for authorisation on or before June 30, 2021.
    • E-commerce marketplaces providing payment aggregator services will have to be separated from the marketplace business and they will have to apply for authorisation on or before June 30, 2021.
    • Pas existing today will have to achieve a net worth of ₹15 crore by March 31, 2021 and a net worth of ₹25 crore by the end of third financial year, which means or before March 31, 2023.
    • The net-worth of ₹25 crore shall be maintained at all times thereafter.

  • What is Keqiang Index’?

    China’s GDP numbers which are preferably represented by Keqiang Index has been recently seen in news amid coronavirus outbreak.

    Keqiang Index

    • Li Keqiang index or Keqiang index is an economic measurement index created by The Economist to measure China’s economy using three indicators, as reportedly preferred by Li Keqiang.
    • It uses three other indicators:
    1. the railway cargo volume,
    2. electricity consumption and
    3. loans disbursed by banks
    • Li Keqiang currently the Premier of the People’s Republic of China, suggest the index as better economic indicator than official numbers of GDP.