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  • Divesting States of the power to determine backwardness hits federalism

    The article highlights the issues with the Supreme Court judgement in the Maratha reservation case.

    Three findings from Maratha reservation judgement

    • Recently, the Supreme Court of India declared as unconstitutional a Maharashtra law which provided for reservation to the Maratha community.
    • Three primary findings emanated from the judgement-
    • 1) Maratha not backward class: The Court held that the Maratha community did not constitute a socially and educationally backward class.
    • 2) Breach of 50% limit: The bench said that the law was in breach of a rule previously set by the Court disallowing reservations made in excess of 50% of the total available positions.
    • 3) Power of the States: The Court held that State governments had no independent power to declare a group as a backward class.

    Issues with the judgement

    The latter two findings run against the values of equality and federalism, which the Court has long regarded as integral to India’s democracy.

    1)  50% limit does not stem from the Constitution

    • Articles 16(4) and 15(4) which confer power on the government to make reservations do not contains 50% limitation.
    • Reservation as an exception: Originally, however, these clauses were seen by the Supreme Court as exceptions to a broad rule of formal equality envisioned by the Constitution.
    • To that end, the Court held that to allow reservation in excess of 50% would lead to an exception overriding a rule. 
    • Reservation as basic guarantee: Countering the reservations as an exception position, a seven-judge Bench, in State of Kerala vs N.M. Thomas (1975), held that a programme of reservation was inherent in the Constitution’s basic guarantee of equal treatment.
    • This judgment held that affirmative action by the state was compelled by an objective of attaining substantive equality.
    • With this judgement the rule requiring that reservations stay under 50% ought to have been deemed incongruous.
    • But when the Court sat as a nine-judge Bench in Indra Sawhney vs Union of India (1992) it sustained the 50% limit.
    • The majority on the Bench ruled, on the one hand, that N.M. Thomas was correct in seeing reservations as embedded in a constitutional vision of substantive equality.
    • On the other hand, the bench accepted that reservation made in excess of 50%, barring exceptional circumstances, was harmful to that very vision. 

    2) Interpretation of 102nd Amendment curtails the powers of the State governments to declare groups as backward

    • After Indra Sawhney judgement, the determination of backward classes was made by the National Commission for the Backward Classes, at the level of the Centre, and by regional commissions at the level of the State governments.
    • This division in power, gave States autonomy to classify groups as backward.
    • In contrast, the power to prepare lists of Scheduled Castes and Scheduled Tribes, vested solely with the Union government.
    • The 102nd Amendment (2018), introduced Article 342A.
    • Article 342A stipulated that the President of India may, after consultation with the State government, notify groups of persons within such a State who are deemed to be socially and educationally backward.
    • Any such “Central List”, the clause clarified, could only be altered by Parliament.
    • Article 366(26C) was also added, and “socially and educationally backward classes” was defined as “such backward classes as are so deemed under Article 342A for the purposes of this Constitution”.
    • In interpreting these changes, a majority in the Maratha reservation judgement concluded that the power for determination of other backward classes rests solely with the Centre.

    How this interpretation goes against the federalism

    • This interpretation of 102nd Amendment altogether dispossess States from exercising a time-honoured authority.
    • But yet the amendment, in the Court’s belief, did not violate the Constitution’s basic structure.
    • This was because, according to the majority, the alterations neither took away “the very essence of federalism” nor denuded the States of their effective power to legislate.
    • But divesting states of power this critical, to classify groups as backward, entitling many communities to protection under Articles 15(4) and 16(4) is offensive to the “essence” of federalism.
    • The changes, as interpreted by the Court, directly impede the ability of States to secure just social order.

    Consider the question “What are the implications for the States of the interpretation of the 102nd Amendment by the Supreme Court in the Maratha reservation case?” 

    Conclusion

    It is imperative that Parliament amend the Constitution and grants to States an express power to determine backwardness. Any other result will offend the delicate balance at the heart of Indian federalism.

  • THE BRUCE LEE MANTRA

    THE BRUCE LEE MANTRA

    “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”

    You must have read this famous quote by Bruce Lee. There is a reason why Bruce lee became one of the most renowned martial arts fighter in the world. This quote by him emphasizes the importance of focused practice and a high level of proficiency. 

    Just like Bruce Lee, Practice and Proficiency can be ingredients for your success story as well.

    NO! WE ARE NOT ASKING YOU TO BECOME SOME WORLD CHAMPION, LET US LEAVE IT FOR ANOTHER DAY. But using the Bruce Lee mantra can help you with your UPSC CSE examination for sure.

    Remember PRACTICE doesn’t mean repeating the same mistakes every time but it means ASSESSING your flaws and improving every time!

    In our previous blogs, we have talked about Inconsistency and Incomplete syllabus attempts. In this blog, let us tackle the third major problem that students face – LACK OF ASSESSMENT.

    Despite finishing the syllabus and revising basic books, many students score average in prelims and mains. So, WHAT IS MISSING HERE? If you are not assessing your performance on a regular basis and practicing in an aimless way then I am sorry to say YOUR CHANCES OF CLEARING THIS PAPER ARE LESS.

    In our interaction with 8000+ students, Lack of assessment as an issue that manifests in many ways:

    AIMLESS MOCKS: You have heard toppers say that practice as many mocks and write as many papers as possible. But APPLY LOGIC here if you are not analyzing your mistakes and attempting the tests in the same manner then you are just practicing the same mistakes over and over again. You need a mentor not only to push you to practice more but at the same time provide you with the right assessment after each test.

    DISCIPLINE: Rome was not built in one day. Similarly, your assessment is not a one-time activity. Aspirants make the mistake of thinking that assessment is limited to getting feedback on your mains copy. Nope! not that simple. Your mentor has to work with you on a regular basis to analyze your performance. This will ensure that if you are getting unproductive, we can bring you back in the right direction as soon as possible.

    ACCOUNTABILITY: Self-accountability is necessary for this examination. But if you are also accountable to a mentor then your efficiency levels can improve faster. Don’t believe us, try it yourself.

    Already an aspirant is burdened with so much syllabus and mock tests, because of which assessment suffers. Give our Mentorship program a chance. Neutral assessment of your preparation in terms of finishing the syllabus, revision and test results can be a game-changer in your preparation.

    Let our mentors focus on your assessment, you just focus on your studies. Fill the SAMANVAYA form given below and we will contact you.

    Civilsdaily Samanvaya 1-On-1 Mentorship Form

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  • MAINS ESSENTIAL PROGRAM SUPER 50 BATCH || ENROL TODAY || LIMITED SEATS

    DON’T DELAY YOUR ANSWER WRITING ANY FURTHER.

    PROGRAM STARTS 30th MAY 2021.

    ENROLL TODAY TO START EARLY.

    LIMITED TO 50 SEATS

    20 TOTAL TESTS (8 SECTIONAL + 12 FULL LENGTH TEST)

    The postponement of UPSC prelims 2021 examination,

    Gives you an opportunity

    to get back in the game if you lost your days because of covid

    to cover up the gaps in your prelims

    to strengthen your MAINS SKILLS.

    You have been provided with a 5-MONTH window before prelims. And the fact about prelims is that it is the key to write mains but will not help you get a rank. So, take the next 2 months to polish yourself for the real deal.

    To keep your Answer writing game one step ahead, Civilsdaily is introducing Mains essential super 50 batch.

    Fill up the SAMANVAYA form to interact with us on this program and other strategies with respect to UPSC preparation.

    Civilsdaily Samanvaya 1-On-1 Mentorship Form

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    What is MEP SUPER 50?

    Mains Essential Program Super 50 2021 is a personalised and Mentor guided comprehensive and intensive program for GS Mains papers. The focus is on making students understand the requirement of Mains Question, its elements, using information, and imparting answer writing skills for that.

    MEP Super 50 is inspired by our successful initiative of Smash Mains.

    Our previous year’s SMASH Mains tests have had an exceptional hit ratio in 2020 UPSC Mains.

    In 2020, 80% of students in our smash mains program were able to clear the mains examination. But to enroll in smash mains, you have to be a veteran who has written mains plus there is a review process. 

    Mep super 50 is open to all, even freshers. After having worked with so many students, we can say with utmost surety that personalized guidance can help improve your score in mains by 50-100 MARKS.

    The idea behind keeping 50 limited seats is to provide dedicated attention to all the enrolled candidates. Quality over quantity is our motto.

    PROGRAM INCLUSION:

    1. 8 Sectional tests: The whole syllabus will be divided into portions like history, economics and geography. This will ensure that even your basic static preparation and current affairs for prelims are revised alongside your mains answer writing program. Killing two birds with one stone!

    2. 12 Full-length tests: After the prelims, it is time to go full gear.

    3. Personalized discussion: You doubt why you are scoring less or how you can improve your score for the next paper. No worries! After each test there will be one on one discussion about your performance with your mentor in 48 hours.

    4. Habitat handholding: A special group created on habitat where you can put up your doubts and queries. Also can be used to interact with peers on strategies to improve your mains writing. You can also contact mentors like Sajal sir, Sukanya ma’am, Sudhanshu sir and Ajay sir. They all have interview-level experience, so utilize their experience to your benefit.

    5. Civilsdaily magazine: Your current affairs will be covered with access to our 1-year subscription.

    LIMITED TO 50 SEATS

    20 TOTAL TESTS (8 SECTIONAL + 12 FULL LENGTH TEST)

    This is what our students have to say..

    Our Philosophy behind MEP Super 50

    1. Question Formulation

    It happens under a team of experienced Civilsdaily’s faculty. Questions framed are from the most important UPSC relevant themes and papers are based on the latest pattern of UPSC.

    Our questions specifically state:

    • Whether they are straightforward or thought-provoking/analytical.
    • Whether they have subparts.
    • Why this question – similar previous year questions, the importance of the theme, etc.

    CD Innovation – Star marked questions We go the extra mile and craft unique, intellectually-stimulating questions. Marked with a star, these questions reward analytical ability and critical thinking.

    2. One-to-One Discussion on every checked copy

    We believe in personalized individual attention. This is the biggest reason why you should join our MEP SUPER 50. Students can schedule a call within 48 hours of receiving their checked copies.

    A one-to-one discussion with Mentor will not only highlight your weaknesses but will also help in tracking your improvements over the subsequent tests.

    3. Answer Checking

    Our evaluation focusses on multiple dimensions and parameters like structure, flow, presentation, contextuality, relevance to question, analytical excellence and cross-domain inter-linkages than simply on superficial, memory-based lapses.

    UPSC IAS Mains test series 2020 2021

    Evaluated answer copy – 1 (Click to download)

    Evaluated answer copy – 2 (Click to download)

    Read more about our methodology here.

    4. Model Answers

    More than just simply providing information, our model answers cover all the aspects of a question and provide enriching points to the student. They also include:

    • For ‘thought-provoking/analytical‘ type of questions, we’ll provide the best way to approach them.
    • Alternate introductions
    • Sub-headings and categorization to enhance readability and answer structure.
    • Colour coding for main arguments, reports, data, scholars, etc.
    • OTB – Out of the box points for additional marks

    5. Civilsdaily’s Handholding 

    Habitat is where everything comes together learning, doubt clearing, notes, references, mentor’s support, and a focussed community. You’re going to learn and discuss like never before. g. You can contact mentors like Sajal sir, Sukanya ma’am, Sudhanshu sir and Ajay sir. They all have interview-level experience, so utilize their experience to your benefit.

    How will your queries be resolved?

    • The moment you have a query, you post it in the group. At 11 PM, 3 AM, doesn’t matter. No need to schedule a call, or drop an email. Just drop a chat. Once our team is up, it will be resolved.
    • More often than not, your peers will take part in your doubt discussions adding a lot of value.

    Besides doubts, what else is there on Habitat?

    • #DDS sessions – We have dedicated sessions every day to resolve doubts in real-time. Never keep a doubt to yourself.
    • An ecosystem for co-learning and active learning.
    • A highly motivated community to bring flexibility and consistency to your preparation.

    UPSC IAS Mains test series 2020 2021
    Civilsdaily’s Habitat – Desktop and Mobile view

    6. Value-added material

    Current affairs magazines – Civilsdaily’s Magazines are the best in terms of comprehensive coverage, superb design, and high readability. Get them here.

    Listicles and other relevant study material – Supplementary content provided will be helpful in covering multiple related questions.

    DON’T DELAY YOUR ANSWER WRITING ANY FURTHER.

    PROGRAM STARTS 30th MAY 2021.

    ENROLL TODAY TO START EARLY.

    LIMITED TO 50 SEATS

    20 TOTAL TESTS (8 SECTIONAL + 12 FULL LENGTH TEST)

    Fill up the SAMANVAYA form to interact with us on this program and other strategies with respect to UPSC preparation.

    Civilsdaily Samanvaya 1-On-1 Mentorship Form

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  • Cryptocurrency

    Context

    Vitalik Buterin, co-creator of the crypto network Ethereum, has made a 1 billion dollar cryptocurrency donation for India’s relief funds as the country battles the latest deadly COVID-19 wave.

    Definition

    The 2019 Bill defined cryptocurrency as any information, code, number or token, generated through cryptographic means or otherwise, which has a digital representation of value and has utility in business activity, or acts as a store of value or a unit of account. According to professionals a system must need these six points to be called a cryptocurrency system:

    • The system does not require a central authority; its state is maintained through distributed consensus.
    • The system keeps an overview of cryptocurrency units and their ownership.
    • The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
    • Ownership of cryptocurrency units can be proved exclusively cryptographically.
    • The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.
    • If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.

    History/Background

    • In 1983, the American cryptographer David Chaum conceived an anonymous cryptographic electronic money called ecash. Later, in 1995, he implemented it through Digicash, an early form of cryptographic electronic payments which required user software in order to withdraw notes from a bank and designate specific encrypted keys before it can be sent to a recipient.
    • In 1998, Wei Dai published a description of “b-money”, characterized as an anonymous, distributed electronic cash system.
    • Shortly thereafter, Nick Szabo described bit gold. Like bitcoin and other cryptocurrencies that would follow it, bit gold (not to be confused with the later gold-based exchange, BitGold) was described as an electronic currency system which required users to complete a proof of work function with solutions being cryptographically put together and published.
    • In 2009, the first decentralized cryptocurrency, bitcoin, was created by presumably pseudonymous developer Satoshi Nakamoto. It used SHA-256, a cryptographic hash function, in its proof-of-work
    • In April 2011, Namecoin was created as an attempt at forming a decentralized DNS, which would make internet censorship very difficult.
    • In October 2011, Litecoinwas released. It used scrypt as its hash function instead of SHA-256. Another notable cryptocurrency, Peercoin used a proof-of-work/proof-of-stake
    • On 6 August 2014, the UK announced its Treasuryhad been commissioned a study of cryptocurrencies, and what role, if any, they could play in the UK economy. The study was also to report on whether regulation should be considered.

    Types of cryptocurrency

    • The most common and valued cryptocurrency is Bitcoin.
    • All the other cryptocurrencies other than Bitcoin are together as a set are known as alternate coins or commonly called “Altcoins”. Most famous alt coins are:-
    • Litecoin
    • Cardano
    • Polkadot
    • Stellar(XLM)
    • Binance Coin
    • By the end of March 2021 the total share of altcoins in the cryptocurrency market was estimated to be at 40% of the total market value.

    How it works?

    • Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions. Part of the appeal of this technology is its security.

    What is Blockchain Technology?

    • Simply, blockchain is decentralized, distributed and public digital ledger.  Blockchains is a new type of network infrastructure (a way to organize how information and value move around on the internet) that create ‘trust’ in networks by introducing distributed verifiability, auditability, and consensus.
    • Blockchains create trust by acting as a shared database, distributed across vast peer-to-peer networks that have no single point of failure and no single source of truth, implying that no individual entity can own a blockchain network, and no single entity can modify the data stored on it unilaterally without the consensus of its peers.
    • New data can be added to a blockchain only through agreement between the various nodes of the network, a mechanism known as distributed consensus. Each node of the network keeps its own copy of blockchain’s data and keeps the other nodes honest – if one node changes its local copy, the other nodes can reject it.
    • Imagine a blockchain as a ledger—because that’s essentially how most blockchains function. Each block of data represents some new transaction on the ledger, whether that means a contract or a sale or whatever else you’d use a ledger for.
    • Interestingly, blockchains leverage techniques from a field of mathematics and computer science, known as cryptography, to sign every transaction (e.g. the transfer of assets from one person to another) with a unique digital signature belonging to the user who initiated the transaction.

    Advantages

    • Low transaction Fee: Because miners are simply rewarded cryptocurrency from network itself, there are typically little or no fees for core transactions.
    • Ownership: With your digital key, access to your currency is yours alone. Unlike money you store at a bank, your use of cryptocurrency cannot be frozen or limited by any entity.
    • Identity Protection: Paying with credit/debit cards requires submitting sensitive banking information that could be stolen or compromised. Cryptocurrency can be sent directly to a recipient without any information other than total amount you want to send.
    • Risk-free for sellers: Payments using Cryptocurrency can’t be reversed, which means merchants don’t have to worry about stopped payments. The blockchain makes it difficult for you to be defrauded.

    Disadvantages

    • Privacy Concerns: The privacy of users’ data is at stake. There is concern regarding privacy of users data in using cryptocurrencies as all the transaction information is stored in distributed ledger (called blockchain), which is publicly visible. Thus Hacker can easily observe how the money flows.
    • High Volatility: The price of Bitcoin suddenly rose to almost $20,000 and then dropped to $6,000. Due to such incidents, it is complicated for the investors to trust the ecosystem.
    • Destination for black money: The fear among regulators and policymakers is that cryptocurrencies, being an alternative source of value to fiat currency, could be misused to launder black money or finance terrorist activities.
    • Cybersecurity Concerns: Cryptocurrencies are prone to cybersecurity breaches and hacks. Various attacks are common, even companies and governments are not full proof to them. For example, the Swiss blockchain company, Trade.io, has reported that crypto tokens worth almost $8 million have been stolen from their cold wallet.
    • Dark activities: The possibility that the new money will nurture illicit activities and markets like drug selling, weapons etc. through Darknet is always high using cryptocurrency anonymously. It also increases the risk of its use in various terrorist activities across the border.
    • Monetary control and economic behavior: It could dramatically change global monetary policymaking. People will exchange their national currencies for the new digital coin in order to buy and sell the many products that will be priced in it. This will further impact the profit of banks and will put stress on their balance sheet.
    • Inflation: Governments and policymakers will have reduced ability to control inflation. Usually, when inflation picks up, central banks take steps to control it through various monetary rates. Cryptocurrency will be out of control of the central bank so liquidity control will be an issue.

    Cryptocurrency and India

    • The country, at present, has around 75 lakh cryptocurrency investors who have together pooled over Rs 10,000 crore into Bitcoins and other such digital currencies.
    • The prices have surged by over 900%, courtesy of the worldwide boom – a single bitcoin that used to cost around Rs 4 lakh in 2020 now costs somewhere around Rs 41 lakh now.
    • FM Nirmala Sitharaman has said that the Centre will take a “calibrated approach” and leave a window open for experiments with blockchain technology.

    Legitimacy of Cryptocurrency in India

    • Finance minister Arun Jaitley, in his budget speech on 1 February 2018, stated that the government will do everything to discontinue the use of bitcoin and other virtual currencies in India for criminal uses.
    • He reiterated that India does not recognise them as legal tender and will instead encourage blockchain technology in payment systems. “The government does not recognise cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system,” Jaitley said
    • In early 2018 India’s central bank, the Reserve Bank of India(RBI) announced a ban on the sale or purchase of cryptocurrency for entities regulated by RBI
    • In March 2020, the Supreme Court of India passed the verdict, revoking the RBI ban on cryptocurrency trade.
    • In 2021, the government is exploring the creation of a state-backed digital currency issued by the Reserve Bank of India, while banning private ones like bitcoin.

    Cryptocurrency Bill India 2019

    • Cryptocurrency cannot be used as a legal tender or currency at any place in India.
    • The bill prohibits everyone to mine, generate, hold, sell, deal in, issue, transfer, dispose of or use cryptocurrency in the territory of India.
    • The central government is allowed to declare Digital Rupee to be the legal tender with the consent of Reserve Bank of India.
    • The use of Distributed Ledger Technology (DLT) for creating a network for delivery of any financial or other services or for creating value , without involving any use of cryptocurrency is not prohibited.
    • Direct or indirect use of cryptocurrency shall be punishable with fine or imprisonment of 1 year which may be extended o 10 years or both.
    • The court is empowered to transfer any fees recovered to the consolidated fund of India.
    • The central government on the recommendation of the investigating agency without being bound to it is empowered to grant immunity for any offense under this act.
    • The bill also provides that no such immunity can be granted by the central government in cases where the proceedings for any such offence have been instituted before the date of receipt of application for grant of such immunity.
    • The Bill promises to “allow for certain exceptions to promote the underlying technology of cryptocurrency (blockchain) and its uses.”
    • The way the technology is built, an ownerless, consensus-driven, distributed ledger like a blockchain needs cryptocurrency to grease its wheels.

    International Scenario

    United states of America

    • The U.S. has the highest number of cryptocurrency users, the highest number of Bitcoin ATMs and also the highest Bitcoin trading volumes globally.
    • The US government, in 2013, accepted bitcoin as a decentralized virtual currency that can be used for performing transactions. It was classified as a commodity by CFTC in September 2015.
    • Bitcoin is also taxable as a property. To sum up, bitcoin is legal in the USA, however, there is no clarification about the legalization of other cryptocurrencies.

    Japan

    • Japan has eliminated the consumption tax on Bitcoin trading on April 1, 2017, when it officially declared Bitcoin as a legal tender. Japan also eliminated the possibility of double taxation on trading of Bitcoins.
    • Japan is now widely considered a hub for cryptocurrency trading/exchange in Asia.

    Canada

    • Bitcoin is viewed as a commodity by the Canada Revenue Agency (CRA).  This means that Bitcoin transactions are viewed as barter transactions, and the income generated is considered as business income. The taxation also depends on whether the individual has a buying-selling business or is only concerned with investing.
    • Canada considers Bitcoin exchanges to be money service businesses. This brings them under the purview of the anti-money laundering (AML) Bitcoin exchanges need to register with Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
    • In addition, some major Canadian banks have banned the use of their credit or debit cards for Bitcoin transactions.

    European Union

    • On Oct. 22, 2015, the European Court of Justice (ECJ) ruled that buying and selling digital currencies is considered a supply of services, and that this is exempt from value-added tax (VAT)in all European Union (EU) member states.
    • Some individual EU countries have also developed their own Bitcoin stances.
    • In Finland, the Central Board of Taxes (CBT) has given Bitcoin a VAT exempt status by classifying it as a financial service. Bitcoin is treated as a commodity in Finland and not as a currency.
    • The National Revenue Agency (NRA) of Bulgaria has also brought Bitcoin under its existing tax laws.
    • Germany is open to Bitcoin; it is considered legal but taxed differently depending upon whether the authorities are dealing with exchanges, miners, enterprises, or users.

    China

    • Bitcoin is essentially banned in China. All banks and other financial institutions like payment processors are prohibited from transacting or dealing in Bitcoin. Cryptocurrency exchanges are banned.
    • The government has cracked down on miners.

    Way Forward

    • A worldwide regulatory authority must be established to control the volatility, security and inflation of the cryptocurrency market.
    • While the number of merchants who accept cryptocurrencies has steadily increased, they are still very much in the minority. For cryptocurrencies to become more widely used, they have to first gain widespread acceptance among consumers.
    • The more popular they become, the more regulation and government scrutiny they will likely to attract, which erodes the fundamental premise for their existence. And therefore the central authority must be made so in keeping mind that the fundamental of the cryptocurrency existence must not be mended.
    • For cryptocurrencies to become part of the mainstream financial system must :
      • Be made mathematically complex (for frauds and hackers) but graphically easy for the users to make them understand better.
      • Be Decentralized but with adequate consumer safeguards and protection.
      • Preserve user anonymity without being a conduit for tax evasion, money laundering and other nefarious activities.
  • Important Schemes Regarding MSME Sectors

     
    19th May 2021

    About MSMEs

    Revised Classification applicable w.e.f 1 July 2020
    Composite Criteria: Investment in Plant & Machinery/equipment and Annual Turnover
    Classify Micro Small Medium
    Manufacturing Enterprises and Enterprises rendering Services Investment in Plant and Machinery or Equipment:
    Not more than INR 1 cr and Annual Turnover; not more than INR 5 cr
    Investment in Plant and Machinery or Equipment:
    Not more than INR 10 cr and Annual Turnover; not more than INR 50 cr
    Investment in Plant and Machinery or Equipment:
    Not more than INR 50 cr and Annual Turnover; not more than INR 250 cr

    Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE)

    What is CGTMSE?

    • CGTMSE is a fund which provides a guarantee for loans given to MSEs i.e. in case borrowers fails to give back loans, the bank will get their money from this fund.
    • It is a Central Government program to promote MSMEs.
    • Government has increased corpus of fund from Rs 2500 crore to Rs 7500 crore
    • Now loans given by NBFCs can also be covered under this fund

    Udyami Mitra’ portal

    • Small Industries Development Bank of India (SIDBI) has revamped its Udyami Mitra with enhanced features.
    • The portal was launched to improve the accessibility of credit for the MSMEs.
    • It helps MSMEs for submission of loan applications which can be picked up by multiple lenders.
    • It aims at bringing in transparency in the processing of loans by the banks.
    • Now non-banking finance companies and small finance banks are being on-boarded on the platform for enhancing the flow of credit to MSMEs.
    • Under the new capitalisation plan, banks will have to compete for loans through the revamped udyamimitra portal.

    A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE)

    • ASPIRE has been launched on 16.03.2015 with an objective to set up a network of technology centres, incubation centres to accelerate entrepreneurship and also to promote start-ups for innovation and entrepreneurship in the rural and agriculture-based industry with a fund of Rs.210 crores.
    • The planned outcomes of ASPIRE are setting up Technology Business Incubators (TBI), Livelihood Business Incubators (LBI) and creation of a Fund of Funds for such initiatives with SIDBI.

    Prime Ministers Employment Generation Programme, PMEGP

    • Khadi and Village Industries Commission (KVIC) is a nodal implementation agency at the national level.
      At State and district level, State offices of KVIC, Khadi and Village Industries Boards (KVIBs) and District Industry Centres (DIC) are the implementing agencies.

    Objectives

    • To generate continuous and sustainable employment opportunities in Rural and Urban areas of the country
    • To provide continuous and sustainable employment to a large segment of traditional and prospective artisans, rural and urban unemployed youth in the country through setting up of micro-enterprises.
    • To facilitate the participation of financial institutions for higher credit flow to the micro sector.

    Eligibility

    • Individuals above 18 years of age
    • VIII Std. pass required for the project above Rs.10.00 lakhs in manufacturing and above Rs. 5.00 lakhs for Service Sector
    • Self Help Groups and Charitable Trusts
    • Institutions registered under Societies Registration Act- 1860
    • Production-based Co-operative Societies

    Salient features of the scheme

    • The Scheme is implemented through KVIC and State/UT Khadi & V.I. Boards in Rural areas and through District Industries Centres in Urban and Rural areas in ratio of 30:30:40 between KVIC / KVIB / DIC respectively.
    • No income ceiling for setting up projects.
    • Assistance under the Scheme is available only to new units to be established.
    • Existing units or units already availed any Govt. Subsidy either under State/Central Govt. Schemes are not eligible.
    • Any industry including Coir Based projects excluding those mentioned in the negative list.
    • Per capita investment should not exceed Rs. 1.00 lakhs in plain areas and Rs. 1.50 lakhs in Hilly areas.
    • The maximum project cost of Rs. 25.00 lakhs in the manufacturing sector and Rs. 10.00 lakhs in Service Sector.
    Credit Linked Capital Subsidy Scheme (CLCSS) -CLCSS aims at facilitating technology up-gradation of Micro and Small Enterprises (MSEs) by providing 15% capital subsidy (limited to maximum Rs.15 lakhs) for purchase of Plant & Machinery.

     

    -Maximum limit of eligible loan for calculation of subsidy under the scheme is Rs.100 lakhs. Presently, more than 1500 well established/improved technologies under 51 sub-sectors have been approved under the Scheme.

    UDYAM SAKHI

    It is a network for nurturing social entrepreneurship creating business models revolving around low-cost products and services to resolve social inequities.

    Mission

    • Udyam Sakhi seeks to encourage women entrepreneurs and to aid, counsel, assist and protect their interests. It also preserves free competitive enterprise and to maintain and strengthen the overall economy of our nation.
    • The Udyam Sakhi helps Indian women to start, build and grow businesses. It recognises that women entrepreneur in the industry is critical to economic recovery and strength, in building the nation’s future, and to helping India compete in today’s global marketplace.
    Samadhan Portal The portal aims at empowering micro and small entrepreneurs across country to directly register their cases relating to delayed payments by Central Ministries, Departments, CPSEs, State Governments. The Samadhaan portal will give information about pending payment of MSEs with individual CPSEs/Central Ministries, State Governments, etc.

     

    The CEO of PSEs and Secretary of Ministries concerned will also be able to monitor cases of delayed payment under their jurisdiction and issue necessary instructions to resolve the issues.

    The portal will facilitate monitoring of delayed payment in more effective manner. The information on portal will be available in public domain, thus exerting moral pressure on defaulting organisations. The MSEs will also be empowered to access portal and monitor their cases.

    Zero Defect, Zero Effect

    • ZED Scheme aims to rate and handhold all MSMEs to deliver top quality products using clean technology.
    • It will have sector-specific parameters for each industry.
    • ZED Scheme is meant to raise quality levels in unregulated MSME sector which is an engine of growth for the Indian economy.
    • The scheme will be the cornerstone of the Central Government’s flagship Make in India programme, which is aimed at turning India into a global manufacturing hub, generating jobs, boosting growth and increase incomes.

    National Schedule Caste and Schedule Tribes (SC/ST) Hub

    • Ministry of  Micro, Small and Medium Enterprises (MSME) is implementing a scheme of  National Schedule Caste and Schedule Tribes (SC/ST) Hub.
    • The Hub is set up to provide professional support to SC/ST entrepreneurs to fulfil the obligations under the Central Government Public Procurement Policy for Micro and Small Enterprises Order 2012, adopt applicable business practices and leverage the Stand-Up India initiatives.
    • The functions of Hub include collection, collation and dissemination of information regarding SC/ST enterprises and entrepreneurs, capacity building among existing and prospective SC/ST entrepreneurs through skill training and EDPs, vendor development etc.
    • Four special subsidy schemes/programmes have been approved under National SC/ST Hub namely
      • Single Point Registration Scheme
      • Special Marketing Assistance Scheme (SMAS)
      • Performance & Credit Rating Scheme and
      • Special Credit Linked Capital Subsidy Scheme.

    SFURTI

    • As per the revised guidelines, the following schemes are being merged into SFURTI:
    1. The Scheme for Enhancing Productivity and Competitiveness of Khadi Industry and Artisans
    2. The Scheme for Product Development, Design Intervention and Packaging (PRODIP)
    3. The Scheme for Rural Industries Service Center (RISC) and
    4. Other small interventions like Ready Warp Units, Ready to Wear Mission, etc.

    Objectives of Scheme

    • To organize the traditional industries and artisans into clusters to make them competitive and provide support for their long term sustainability and economy of scale;
    • To provide sustained employment for traditional industry artisans and rural entrepreneurs;
    • To enhance the marketability of products of such clusters by providing support for new products, design intervention and improved packaging and also the improvement of marketing infrastructure;
    • To equip traditional artisans of the associated clusters with the improved skills and capabilities through training and exposure visits;
    • To make provision for common facilities and improved tools and equipment for artisans to promote optimum utilization of infrastructure facilities;
    • To strengthen the cluster governance systems with the active participation of the stakeholders, so that they are able to gauge the emerging challenges and opportunities and respond to them in a coherent manner;
    • To build up innovated and traditional skills, improved technologies, advanced processes, market intelligence and new models of public-private partnership s, so as to gradually replicate similar models of cluster-based regenerated traditional industries
    • To look for setting up of multi-product cluster with an integrated value chain and a strong market-driven approach for viability and long term sustainability of the cluster;
    • To ensure convergence from the design stage with each activity of the cluster formation and operations thereof.
    • To develop specific product lines out of the currently offered diversified basket of heterogeneous products based on the understanding of the target consumer segment. A brand unification exercise also needs to be done to maximize the value.

    Trade-Related Entrepreneurship Development Assistance Scheme (TREAD) Women entrepreneurship programme

    • There is a provision of Govt of India Grant up to 30% of Loan/credit sanctioned subject to a maximum ceiling of 30 Lakhs to NGOs as appraised by Lending Institutes/Banks for undertaking capacity building activities such as Training, counselling, participation in exhibitions, the establishment of new SHGs etc and other components as approved by Bank/Steering Committee.
    • The non-farming activities taken up by women are Tailoring, Handicrafts, Embroidery, Toy making, Readymade garments, Candle making, Agarbatti making, paper cup and plate making, Masala powder making, Saree weaving, Coir mat making, Pickles making, Readymade garments, basketry and brooms making, Jute bag making etc.
    • The focus of the scheme is to promote self-employment and income generation activities for women mostly from SHG groups in the non-farm sector.

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  • India needs to engage with U.S. progressives

    The artcle highlights the role played by the progressive section in the US politics in influencing U.S. governments decision on TRIPS waiver and providing aid to India. Incidentally, these progressives include names such as Pramila Jayapal whose comment on human rights violations in Jammu and Kashmir had annoyed India.

    What led to change in U.S.’s approach on aid

    • There was a shift in the U.S.’s approach on providing COVID-19-related aid to India as well as on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver on COVID-19 vaccines.
    • It is tempting to surmise the shift as being driven by the Comprehensive Global Strategic Partnership with New Delhi.
    • But it is more than just that.
    • The development was a result of the determined push by some sections of the political and business class, civil society, and Indian Americans.
    • Besides them, the progressives in the Democratic Party made a big difference.

    Role of the progressives

    • Days ahead of the May 5 decision of the Biden administration on the TRIPS waiver, 110 members of the U.S. Congress wrote to President Biden urging him to support the waiver.
    • Thus, the Biden administration’s decision on the waiver and the vaccines, characterised as courageous by many, was a result of the push by the progressives.
    • Joining in this effort, the co-chair of the Congressional India Caucus, and over 50 colleagues wrote last week to President Biden seeking supply of specific items.
    • The overall approach is to work with India in its battle against the second wave and prepare for subsequent ones.

    Conclusion

    It is evident that the progressives have a grip on policymaking. India will have to remain engaged with this section instead of offering a cold shoulder as it did in the recent past. As the adage goes, all politics is local.

  • Explained: India, Israel and Palestine Ties

    Recently India’s permanent representative to the UN made a carefully crafted statement at the UN Security Council “open debate” on the escalating Israel-Palestine violence.

    Must read:

    [Burning Issue] West Asia Peace Plan

    The story so far

    • The violence started on 6 May, when Palestinian protests began in Jerusalem over an anticipated decision of the Supreme Court of Israel on the eviction of six Palestinian families a neighbourhood of occupied East Jerusalem.
    • Israel’s operation “Guardian of the Walls” began with attacks on Hamas (a fundamentalist Palestinian group) tunnels close to the border fence with Israel.
    • India has adopted a balanced approach to the current Israeli-Palestine conflict that has pushed the volatile region into yet another cycle of violence.

    India’s long-standing position

    • India has since long been maintaining that the Israel-Palestine conflict should be resolved through negotiation resulting in sovereign, independent, viable and united State of Palestine, with East Jerusalem as its capital.
    • India has urged both countries to “engage with each other, including on the recent proposals put forward by the United States, and find an acceptable two-state solution for peaceful coexistence”.

    The dilemma

    • India seems to strive to maintain a balance between India’s historic ties with Palestine and its blossoming relations with Israel.
    • The request that both sides refrain from “attempts to unilaterally change the existing status quo including in East Jerusalem and its neighbourhoods” seems to be a message to Israel about its settler policy.
    • The statement was also emphatic that “the historic status quo at the holy places of Jerusalem including the Haraml al-Sharif/Temple Mount must be respected”.

    Ties with spikes

    • India’s policy on the longest-running conflict in the world has gone from being unequivocally pro-Palestine for the first four decades, to a tense balancing act with its three-decade-old friendly ties with Israel.
    • In recent years, India’s position has also been perceived as pro-Israel.

    From Nehru to Rao

    • The balancing began with India’s decision to normalize ties with Israel in 1992, which came against the backdrop of the break-up of the Soviet Union.
    • There were massive shifts in the geopolitics of West Asia on account of the first Gulf War in 1990.
    • That year, the Palestinian Liberation Organisation (PLO) lost much of its clout in the Arab world by siding with Iraq and Saddam Hussein in the occupation of Kuwait.
    • The opening of an Indian embassy in Tel Aviv in January 1992 marked an end to four decades of giving Israel the cold shoulder, as India’s recognition of Israel in 1950 had been minus full diplomatic ties.
    • PM Nehru’s reasoning for the decision to recognise Israel was that it was “an established fact”, and that not doing so would create bitterness between two UN members.

    Why did India then support Palestine?

    • In 1948, India was the only non-Arab-state among 13 countries that voted against the UN partition plan of Palestine in the General Assembly that led to the creation of Israel.
    • Scholars ascribe various reasons for this India’s own Partition along religious lines; as a new nation that had just thrown off its colonial yoke; solidarity with the Palestinian people who would be dispossessed; and to ward off Pakistan’s plan to isolate India over Kashmir.
    • Later, India’s energy dependence on the Arab countries also became a factor, as did the sentiments of India’s own Muslim citizens.

    India and Palestine

    • The relationship with Palestine was almost an article of faith in Indian foreign policy for over four decades.
    • At the 53rd UN session, India co-sponsored the draft resolution on the right of the Palestinians to self-determination.
    • In the 1967 and 1973 wars, India lashed out at Israel as the aggressor.
    • In the 1970s, India rallied behind the PLO and its leader as the sole and legitimate representative of the Palestinian people.
    • In 1975, India became the first non-Arab country to recognise the PLO as the sole representative of the Palestinian people and invited it to open an office in Delhi.
    • In 1988, when the PLO declared an independent state of Palestine with its capital in East Jerusalem, India granted recognition immediately.

    Continuity for the cause

    • India voted in favour of the UN General Assembly resolution in October 2003 against Israel’s construction of a separation wall.
    • It voted for Palestine to become a full member of UNESCO in 2011, and a year later, co-sponsored the UNGA resolution that enabled Palestine to become a “non-member” observer state at the UN without voting rights.
    • India also supported the installation of the Palestinian flag on the UN premises in September 2015.

    Changes after 2014

    • For two-and-a-half decades from 1992, the India-Israel relationship continued to grow, mostly through defence deals, and in sectors such as science and technology and agriculture.
    • But India never acknowledged the relationship fully.
    • There were few high-profile visits, and they all took place when the PM Vajpayee was in office.
    • Israel was perceived as an ideal of a “strong state” that deals “firmly” with “terrorists”.
    • It was during NDA-2 that the government under PM Modi decided to take full ownership of the relationship with Israel.

    Balancing act

    • Meanwhile, India continues to improve ties with Arab countries, especially Saudi Arabia and the UAE and feels vindicated by the decision of some Arab states to improve ties with Israel.
    • For instance, even as it abstained at UNESCO in December 2017, India voted in favour of a resolution in the UNGA opposing Trump’s recognition of Jerusalem as the Israeli capital.

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