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GS Paper: GS3

  • Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

  • Roads, Highways, Cargo, Air-Cargo and Logistics infrastructure – Bharatmala, LEEP, SetuBharatam, etc.

    Challenges, opportunities & criticism of the Real Estate Regulatory Bill 2016

    The Real Estate Regulatory Bill, 2016 is being hailed as a much-needed step to reform the real estate sector. It will help regulate the sector and bring in clarity for both buyers and developers.

    What was the need for regulation in the real estate?

    • The real estate sector has some issues such as a lengthy process for project approvals, lack of clear land titles, and prevalence of black money
    • There wasn’t complete transparency as far as govt approvals were concerned
    • There were also instances when projects were sold without adequate clearances
    • The delayed projects, sometimes by up to 6 years and arbitrary changes in layout plans are rampant in the sector

    How does the Bill seeks to regulate the sector?

    The basic thrust of this Bill is to regulate the delivery of projects to home buyers. It provides them a legal safeguard for their investment, and seeks to address timely delivery of houses. It seeks to enforce the contract between the developer and buyer and act as a fast track mechanism to settle disputes

    • It establishes state level regulatory authorities called Real Estate Regulatory Authorities (RERA)
    • The Bill establishes state level tribunals called Real Estate Appellate Tribunals.  Decisions of RERAs can be appealed in these tribunals
    • It makes mandatory the disclosure of all information for registered projects like details of promoters, layout plan, land status, schedule of execution and status of various approvals
    • The Bill prohibits a developer from changing the plan in a project unless two-thirds of the allottees have agreed for such a change
    • It says that builders must specify the time-frame for completion of projects and stick to it, or be ready to pay penalties
    • The Bill mandates that 70% of the amount collected from buyers of a project be used only for construction of that project < This provision will effectively allow developers to continue their practice of diverting funds collected for a project towards land acquisition or other projects, and will work in their favour by also allowing them to grow their land and/or project portfolio>

    How will the Real Estate Regulatory Authorities help improve the sector?

    • Residential real estate projects need to be registered with RERAs, except few
    • Promoters cannot book or offer these projects for sale without registering them
    • Real estate agents dealing in these projects also need to register with RERAs
    • On registration, the promoter need to provide details of the project to the RERA

    Challenges ahead

    • The Bill will make life difficult for builders, as they would face more red-tapeism now, especially in procuring relevant approvals.
    • This Bill does not address the developers demand of a single-window clearance from the govt
    • The implementation of the Bill is up to the states, it leaves builders with greater chances of being harassed

    Impact

    • Timely completion of projects would lead to a steady increase in supply of homes
    • It is expected that these measures will eventually bring down home prices and increase demand
    • It will be good for the overall economy too, as the housing sector has strong backward (cement, steel and other building material industries) and forward (furniture and furnishings, interior decoration, electrical and electronics) linkages with other industries
    • More number of job creation in the economy

    Criticism

    • The builder lobbies argued that the bill should have a time-frame for municipal and other authorities to give timely approvals, because the delay in approvals lead to delays in handing over possession of apartments
    • In terms of pricing, which is governed by circle rates, it will be difficult to monitor

    Future

    • The states’ support for faster clearances to projects will be required to make this Bill successful
    • Govt is also trying to bring in a National Urban Rental Housing Policy, which would take into account the requirements of tenancy hassles in modern days

    Published with inputs from Pushpendra

     

    Sagarmala Project: Smart ports for Blue Revolution in India

    The Union Cabinet chaired by the Prime Minister Modi, on March,2015 gave its ‘in-principle’ approval for the concept and institutional framework of Sagarmala Project. Let’s take a glance on it.

    What’s the prime objective of Sagarmala?

    The prime objective of the Sagarmala project is to promote port-led direct and indirect development and to provide infrastructure to transport goods to and from ports quickly, efficiently and cost-effectively.

    What’s the current issue and background of ports in India?

    • At present there are around 200 ports (small and big) in the country, of these, only 12 are major ports which are government owned ports, which handle about 58% of sea-borne traffic.
    • These major ports operate as Trusts under the Major Ports Trust Act, 1963, except for the Port of Ennore, which is a company under the Companies Act.
    • There are legacy issues with these govt owned major ports, they do not keep pace with emerging technology, requirements of international trade, emerging trends in containerisation, flexible rules, size of ships etc.

    Which are the 12 Major Ports ?

    These are Kolkata (including Dock Complex at Haldia), Visakhapatnam, Chennai, V.O. Chidambaranar (Tuticorin), Cochin, New Mangalore, Mormugao, Jawaharlal Nehru Port Trust (JNPT), Mumbai, Kandla and Ennore.

    Just, Look back into the history?

    In 2003, then PM Vajpayee proposed Project Sagarmala with following features:

    • Setup Sagarmala Development Authority (Similar to National highway authority of India).
    • It will get money via Maritime development cess. (5 paise per kg on cargo).
    • It will improve ports, shipping industry, inland water transport, coastal shipping.
    • PPP and FDI to gather more investment.

    Then, which are the Key pillars to achieve Smart-development ?

    • Supporting and enabling Port-led Development through appropriate policy and institutional interventions.
    • Providing for an institutional framework for ensuring inter-agency and states’ collaboration for integrated development.
    • Port Infrastructure Enhancement, including modernization and setting up of new ports.
    • Efficient Evacuation to and from hinterland.

    What are some of the measures to make Smart Ports?

    • Ports should be registered as Companies under Companies Act.
    • The port administration should only look after the provisions of infrastructure and safety and not day-to-day running of the port
    • There is still no regulation to control the trade practices.
    • Hence, there is a dire need to introduce a regulatory architecture that takes care of ex-ante declaration of rates of services.

    Then, what’s the plan to implement such a vast initiative?

    • For a comprehensive and integrated planning for “Sagarmala”, a National Perspective Plan (NPP) for the entire coastline shall be prepared within six months.
    • It will identify potential geographical regions to be called Coastal Economic Zones (CEZ).
    • While preparing the NPP, synergy and integration with planned Industrial Corridors, Dedicated Freight Corridors, National Highway Development Programme, Industrial Clusters and SEZs would be ensured.

    What are the suggestions for effective mechanism at state level?

    • Set up State Sagarmala Committee to be headed by CM / Minister in Charge of Ports.
    • Sagarmala Coordination and Steering Committee (SCSC) shall be constituted under the chairmanship of the Cabinet Secretary and others.
    • This Committee will provide coordination between ministries, state governments and agencies connected with implementation and review the progress of implementation of the National Perspective Plan.

    How does it ensure the sustainable development in CEZ?

    • This would be done by synergising and coordinating with State Governments and line Ministries of Central Government through their existing programmes.
    • Such as those related to community and rural development, tribal development and employment generation, fisheries, skill development, tourism promotion etc.
    • In order to provide funding for such projects and activities that may be covered by departmental schemes a separate fund by the name ‘Community Development Fund’ would be created.

    What’s the role of Institutional Framework ?

    • It has to provide for a coordinating role for the Central Government.
    • It should provide a platform for central, state governments and local authorities to work in tandem and coordination under the established principles of cooperative federalism.

    What’s the role of NSAC?

    A National Sagarmala Apex Committee (NSAC) is envisaged for overall policy guidance and high level coordination, and to review various aspects of planning and implementation of the plan and projects.

    So, Is it Good to have smart ports on the line of Smart Cities?

    Can you answer some questions?

    #1. Can you examine the bottlenecks in Indian port infrastructure and list the initiative taken in recent times to address this issue?

    #Q.2 Indian port infrastructure can be revamped by Sagarmala project by effective management? critically comment.

    Published with inputs from Arun

  • Financial Inclusion in India and Its Challenges

    From Jan Dhan to Jan Suraksha: A Journey towards Financial Inclusion and Security

    The budget 2015-16 had announced 3 Social Security Schemes:

    #1. Pradhan Mantri Suraksha BimaYojna (PMSBY)
    #2. Pradhan MantriJeevan Jyoti Bima Yojana (PMJJBY)
    #3. Atal Pension Yojana (APY)

    Why the schemes?

    • India faces the biggest challenge of providing banking facilities and insurance coverage to all
    • Having access to institutional finance has so far remained a far cry to a vast chunk of rural population
    • As of May 2015, only 20% of India’s population has any kind of insurance and only 11% has any kind of pension scheme
    • Insurance is a way of managing risks & give necessary protections in case of financial loss
    • When one has an insurance policy, certain rights and protections are derived out of it to the person and his family
    • There is a dire need for providing social security at a very nominal cost to the millions and economic empowerment of the poor Answer in comments.>
    • PMJDY is a major step to bring people across the country closer to institutionalized finance, and save them from the clutches of informal financiers
    • However, most of the PMJDY accounts had zero balance initially. The government aims to reduce the number of such zero balance accounts by using these schemes Answer in comments.>

    PMSBY & PMJJBY:

     

     

    • Implementation: The scheme will be offered by all Public Sector General Insurance Companies and all other insurers who are willing to join the scheme and tie-up with banks for this purpose
    • Govt Contribution: Various Ministries can co-contribute premium for various categories of their beneficiaries from their budget or from Public Welfare Fund created in this budget from unclaimed money
    • Auto-debit: The premium amount will be auto debited from subscriber’s bank account
    • The schemes will be linked to the bank accounts opened under the Pradhan Mantri Jan Dhan Yojana scheme

    Criticisms of PMSBY:

    • Private banks have complained that the Govt should focus on upper middle class instead of the poorer section
    • Western scholars have argued that financial inclusion is a myth and serving such large number of people would only increase the burden and work-load of public sector

    Criticisms of PMJJBY:

    • The banks have complained that revenue received will be very low
    • Some bankers have claimed that amount they are receiving is not sufficient to cover the service costs
    • Insurers have also pointed out that no health certificate or information of pre-existing disease is required for joining

    Atal Pension Yojana

    • It focuses on the unorganized sector where nearly 400 million employees representing more than 80% of all employees are engaged Answer in comments.>
    • The aim is to make sure that needy people could get fixed amount when they get old
    • It is the improved version of Swavalamban scheme, launched in 2010-11, which has been found lacking in clarity with regard to pension benefits at the age after 60

    Features:

    • All citizen of India aged between 18-40 years are eligible
    • A guaranteed minimum monthly pension will be provided to the subscribers varying from Rs. 1000 to Rs. 5000 per month
    • The pension amount depends on contribution by subscriber
    • Government of India will guarantee the minimum benefit of pension
    • Most interesting part of the scheme is that the government will contribute 50% of the contribution made by the subscriber or Rs. 1000 whichever is lower
    • However, contribution by the govt is available for only those who are not income tax payers and are not covered by any Statutory Social Security Schemes
    • Bank account holder of Any Bank account is eligible

    Suraksha Bandhan drive- Spreading the social security message

    • Aim: To take forward the Govt’s objective of creating a universal social security system in the country, targeted especially at the poor and the under-privileged
    • Participating Banks supported by the participating Insurance Companies are carrying out local outreach, awareness building and enrolment facilitation under the drive
    • Public service organizations supported by peoples representatives are participating in these efforts through various outreach activities such as enrolment drives, camps etc. in large numbers during this period

  • Skilling India – Skill India Mission,PMKVY, NSDC, etc.

  • Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

  • RBI Notifications

  • Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

  • GI(Geographical Indicator) Tags

    GI status is an indication that identifies goods as produced from a particular area, which has special quality or reputation attributable to its geographical origin.

    India, as a member of the World Trade Organization (WTO), enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 has come into force with effect from 15 September 2003

    The GI tag ensures that none other than those registered as authorised users (or at least those residing inside the geographic territory) are allowed to use the popular product name.

    In India, a GI’s registry operates in Chennai in accordance with the provisions of the Geographical Indications of Goods (Registration and Protection) Act 1999, which came into effect in September 2003.

    India has 236 GI products registered so far and over 270 more products have applied for the label. Let’s take a look at 10 such geographical indicators in India.

    To follow up with latest developments on GI tags –

  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

  • Banking Sector Reforms