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  • All about India’s Indigenous Fifth-Gen Fighter Jet AMCA

    In the news

    • The Cabinet Committee on Security (CCS) has approved a Rs 15,000 crore project for the development of India’s fifth-generation Advanced Medium Combat Aircraft (AMCA), marking a significant stride in indigenous defense capabilities.

    About Advanced Medium Combat Aircraft (AMCA)

    • The AMCA project aims to design and manufacture a stealthy multirole fighter jet to bolster the Indian Air Force’s (IAF) combat fleet.
    • It was first initiated in 2007.
    • It is led by the Aeronautical Development Agency (ADA) under the DRDO.

    Features of AMCA

    • Stealth Technology: Equipped with advanced stealth features, the 25-tonne twin-engine aircraft will evade enemy radar detection, placing it on par with or even surpassing other fifth-generation stealth fighters globally.
    • Fuel and Weapons Capacity: The aircraft will feature a concealed internal fuel tank with a capacity of 6.5 tonnes and an internal weapons bay for carrying a diverse range of weapons, including indigenous armaments.
    • Engine Specifications: Initially powered by the US-built GE414 engine, the AMCA Mk2 variant will utilize a more powerful 110kN engine developed indigenously by DRDO’s Gas Turbine Research Establishment (GTRE) in collaboration with foreign defense partners.
    • Specialized Design Features: The AMCA will incorporate innovative design elements such as a diverterless supersonic inlet and a serpentine air intake duct to optimize engine performance and minimize radar emissions.

    Significance of the development

    • Indigenous boost: AMCA project underscores India’s quest for self-reliance in defense technology, following its withdrawal from the Fifth Generation Fighter Aircraft (FGFA) collaboration with Russia in 2018.
    • Stealth Advantages: As a fifth-generation fighter, the AMCA will possess low electromagnetic signature, enhancing survivability and lethality in modern combat scenarios.
    • Enhanced Capabilities: With advanced sensors and weaponry, the AMCA will be capable of detecting and engaging enemy aircraft while remaining undetected, offering a significant advantage over fourth-generation counterparts.

    Development Timeline and Prospects

    • Flight Schedule: Following CCS approval, the ADA aims to conduct the first flight of the AMCA within four and a half to five years, with full development expected to span around a decade.
    • Manufacturing Partnerships: HAL will undertake aircraft production, with private industry collaboration anticipated to expedite the manufacturing process.
    • Operational Imperatives: The IAF’s requirement for seven squadrons of AMCA underscores its pivotal role in augmenting India’s air combat capabilities amid dwindling fighter squadron numbers.

    Global Context and Future Prospects

    • Limited Fifth-Generation Fleet: While countries like the US, China, and Russia possess fifth-generation stealth fighters, the AMCA will add India to this exclusive list, enhancing its strategic posture in the region.
    • IAF’s Modernization Needs: Amidst retiring legacy aircraft, the induction of AMCA squadrons will address critical operational gaps, ensuring a potent air combat fleet for the future.

    Conclusion

    • The development of AMCA heralds a new era of indigenous defence manufacturing in India, underlining the nation’s commitment to technological advancement and military modernization.
    • With its advanced capabilities and stealth features, the AMCA promises to be a game-changer in the realm of aerial warfare, reinforcing India’s position as a formidable force in the global defence arena.
  • Places in news: Second Thomas Shoal

    In the news

    • Recently Philippines and China Coast Guard collided with each other near the Second Thomas Shoal of the Spratly Islands in South China Sea.

    About Second Thomas Shoal

    • It is located approximately 105 nautical miles (195 km) west of Palawan, Philippines.
    • It lies within the Philippines’ EEZ (exclusive economic zone).
    • The shoal is part of the Spratly Islands, which are subject to overlapping territorial claims by multiple countries, including China, the Philippines, Vietnam, Malaysia, and Taiwan.
    • It is strategically significant due to its location in the South China Sea, a major maritime trade route rich in natural resources.
    Note: An Exclusive Economic Zone (EEZ) is an area of the ocean, generally extending 200 nautical miles (230 miles/370.15 km) beyond a nation’s territorial sea, within which a coastal nation has jurisdiction over both living and non-living resources.

     What is the South China Sea Dispute?

    • It is a dispute over territory and sovereignty over ocean areas, and the Paracels and the Spratlys – two island chains claimed in whole or in part by a number of countries.
    • China, Vietnam, the Philippines, Taiwan, Malaysia, and Brunei all have competing claims.
    • Alongside the fully-fledged islands, there are dozens of rocky outcrops, atolls, sandbanks, and reefs, such as the Scarborough Shoal.
    • China claims by far the largest portion of territory – an area defined by the “nine-dash line” which stretches hundreds of miles south and east from its most southerly province of Hainan.
    • Beijing says its right to the area goes hundreds of centuries to when the Paracel and Spratly island chains were regarded as integral parts of the Chinese nation.
    • It showed the two island groups falling entirely within its territory. Those claims are mirrored by Taiwan.

    Spat over Chinese claims

    • China has backed its expansive claims with island-building and naval patrols.
    • The US says it does not take sides in territorial disputes but has sent military ships and planes near disputed islands, calling them “freedom of navigation” operations to ensure access to key shipping and air routes.
    • Both sides have accused each other of “militarizing” the South China Sea.
    • There are fears that the area is becoming a flashpoint, with potentially serious global consequences.

    Try this PYQ from CSE Prelims 2011:

    Q.Southeast Asia has captivated the attention of global community’ over space and time as a geostrategically significant region. Which among the following is the most convincing explanation for this global perspective?

    (a) It was the hot theatre during the Second World War

    (b) Its location between the Asian powers of China and India

    (c) It was the arena of superpower confrontation during the Cold War period

    (d) Its location between the Pacific and Indian oceans and its pre-eminent maritime character

     

    Post your answers here.

  • GPS-based Highway Toll Collection: The New Proposed System

    In the news

    • The government’s plan to implement a new highway toll collection system based on the Global Navigation Satellite System (GNSS) before the 2024 election model code of conduct kicks in.
    • In this article, we delve into the details of the proposed system, its challenges, privacy safeguards, and its relationship with the existing FASTag system.

    New Proposed Highway Tolling System

    • Utilization of GNSS: The system will employ an On-Board Unit (OBU) or tracking device fitted inside vehicles, leveraging the Indian satellite navigation system, GAGAN, for accurate location mapping.
    • ANPR Technology: It will use an automatic number plate recognition (ANPR) system through cameras installed on highways and deduct tolls based on the distance travelled by a vehicle.
    • Digital Image Processing: Co-ordinates of national highways will be logged digitally, and toll rates will be assigned based on the distance travelled by a vehicle, with toll amounts deducted from a wallet linked to the OBU.
    • Enforcement Mechanisms: Gantries mounted with CCTV cameras will monitor highways, capturing high-security registration plate images to prevent evasion, ensuring compliance with the tolling system.

    Challenges in Implementation

    • Recovery of Unpaid Tolls: Recovering toll amounts from non-compliant users poses a challenge, especially when digital wallets linked to OBUs are empty.
    • Evasion and Non-Compliance: Vehicles traveling without OBUs or deliberately switching them off, or misuse of OBUs to pay lower tolls, present enforcement challenges.
    • Infrastructure and Legal Amendments: Setting up ANPR-based systems and amending toll collection rules are essential for the effective implementation of the new system.

    Privacy Safeguards

    • Usage of GAGAN: Utilizing the indigenous GAGAN system instead of GPS ensures data security within the country, addressing privacy concerns.
    • Legal Framework: The Digital Personal Data Protection Act, 2023, aims to safeguard privacy, although concerns regarding increased state surveillance exist.

    Co-Existence with FASTags

    • Complementary Systems: The new tolling system will co-exist with FASTags, with no decision yet on mandating OBUs for all vehicles.
    • Operational Efficiency: While FASTags have achieved robust compliance, the GNSS-based system offers lower operational costs and streamlines toll collection processes.

    Key Statistics

    • FASTag Compliance: By December 2023, 98.9% of vehicles passing through toll fee plazas at national highways were FASTag compliant, reflecting widespread adoption.
    • Toll Collection Growth: Toll collection increased 1.5 times from ₹17,942 crore in 2016-2017 to ₹27,744 crore in 2020-2021 at National Highway fee plazas, showcasing the effectiveness of existing mechanisms.

    Conclusion

    • The proposed GNSS-based toll collection system represents a paradigm shift in highway tolling mechanisms, promising greater accuracy, efficiency, and compliance.
    • However, challenges such as recovery of unpaid tolls and infrastructure requirements need to be addressed for successful implementation.
    • With adequate safeguards for privacy and co-existence with FASTags, the new system holds the potential to revolutionize highway toll collection in India.
  • Sela Tunnel: Enhancing Border Connectivity

    In the news

    • The inauguration of the Sela Tunnel by Prime Minister Narendra Modi marks a significant milestone in India’s border infrastructure development, particularly in the strategic Tawang sector.

    About Sela Tunnel Project

    Details
    Location West Kameng district of Arunachal Pradesh

    On the Balipara-Chariduar-Tawang (BCT) Road

    Feat World’s longest bi-lane tunnel at an altitude above 13,000 feet.
    Connectivity  Ensures all-weather connectivity between Guwahati in Assam and Tawang in Arunachal Pradesh.
    Highway Excavated below the Sela Pass on the NH-13 component of the Trans-Arunachal Highway system.
    Construction Built by the Border Roads Organisation (BRO) under Project Vartak.

    Construction commenced on April 1, 2019.

    Project Details Tunnel 1: Single-tube tunnel, 980m in length. –

    Tunnel 2: Bi-lane tunnel, 1555m in length, including one escape tube for emergencies.

    Roads: Approach to Tunnel 1 (7100m), road between the two tunnels (1340m), approach to Tunnel 2 (340m).

     

    Infrastructure Details

    • Strategic Location: Situated on the, the Sela Tunnel provides a crucial link between Guwahati and the strategically important Tawang sector in Arunachal Pradesh.
    • Military Significance: The tunnel facilitates faster military movement to Tawang, home to the Indian Army’s IV Corps, ensuring swift deployment and operational readiness along the border.
    • Operational Benefits: By bypassing foggy stretches at Nechiphu and snow-covered terrain at Sela Pass, the tunnel reduces travel distance by nearly 10 km and travel time by almost an hour for convoys, enhancing logistical efficiency.
    • Technology and Safety: Constructed using the new Austrian tunnelling method, the Sela Tunnel incorporates state-of-the-art safety features, meeting the highest standards set by the Defence Ministry.

    Geopolitical Context

    • Strategic Considerations: Tawang’s geographical significance extends to its proximity to the Brahmaputra plains and its role as a vital axis to Tezpur in Assam, strengthening India’s military posture.
    • Historical Significance: Tawang holds historical and cultural importance as the birthplace of the sixth Dalai Lama and a prominent centre of Tibetan Buddhism, adding to its strategic value.
    • Security Imperatives: Given China’s territorial claims over Tawang and Arunachal Pradesh, India remains vigilant, fortifying its military presence and infrastructure to safeguard its sovereignty.
  • Tamil Nadu Fishermen’s Plight over Katchatheevu Island

    In the news

    • Frustrated by the continuous actions against them by Sri Lankan authorities, Tamil Nadu fishermen announced an indefinite strike starting February 17, disrupting their daily activities.
    • The fishermen’s protest led to an unprecedented decision to abstain from the annual St. Antony’s Church festival at Katchatheevu, a significant event symbolizing their fishing rights.

    Katchatheevu Island: Historical Background

    • Colonial Influence: Katchatheevu, a 285-acre island, has its origins in a 14-century volcanic eruption. It was historically under the control of the Jaffna kingdom in Sri Lanka and later the Ramnad Zamindari in India.
    • British-Era Claims: Both India and Sri Lanka claimed Katchatheevu in the early 20th century to establish fishing boundaries. The ownership dispute continued even during the British Raj.

    1974 Indo-Sri Lankan Maritime Agreement

    • Landmark Decision: Indira Gandhi’s government decided to cede Katchatheevu to Sri Lanka as part of the 1974 agreement, aiming to establish maritime borders.
    • Political Implications: The decision raised concerns in Tamil Nadu, where voices protested the lack of state assembly consultation and the impact on traditional fishing rights.
    • Fishing Ambiguity: The agreement allowed Indian fishermen access to Katchatheevu “hitherto,” but fishing rights remained ambiguous, leading to disputes.

    Sri Lankan Civil War and Beyond

    • Civil War Dynamics: The Sri Lankan civil war (1983-2009) shifted focus from the Katchatheevu issue as Sri Lanka’s naval forces grappled with internal strife.
    • Post-War Reality: Post the civil war, Sri Lanka reinforced maritime defense, leading to the arrest of Indian fishermen venturing into their waters, reigniting demands for Katchatheevu’s retrieval.

    Tamil Nadu’s Persistent Concerns

    • Political Backlash: Tamil Nadu politicians across parties raised objections against ceding Katchatheevu without state assembly consent, citing historical ties and livelihood impacts.
    • Legal Battles: Late J Jayalalitha’s AIADMK filed petitions challenging the 1974 agreement, arguing it affected traditional fishing rights. However, the Union government’s stance remained unaltered.
    • Government’s Position: Despite vocal demands from Tamil politicians, the Modi government maintained that the island’s status was finalized in 1974 and reclaiming it would require drastic measures.

    Contemporary Implications

    • Symbol of Sovereignty: Katchatheevu symbolizes regional and sovereignty concerns, reflecting tensions between Tamil Nadu’s interests and central government decisions.
    • Geopolitical Dilemma: The case highlights the delicate balance between historical claims, political sentiments, and international agreements in the context of bilateral relations.

    Conclusion

    • The island of Katchatheevu continues to serve as a reminder of India’s historical intricacies, reflecting the delicate balancing act between state interests, national decisions, and regional aspirations.
    • While Tamil Nadu’s calls for retrieval echo in the political corridors, the longstanding 1974 agreement and subsequent geopolitical realities create a complex landscape.
    • As the island’s fate intertwines with broader diplomatic relations, Katchatheevu remains a testament to the complexities of national sovereignty and regional sentiment.
  • 7,396 Golden Langur in India, reveals survey

    Golden Langur

    In the news

    • The latest survey conducted by the Primate Research Centre NE India (PRCNE), Assam Forest Department has estimated a population of approximately 7,396 Golden Langur (Trachypithecus geei) in India.

    About Golden Langur

    Details
    Identification
    • Recognizable by the color of their fur, which gives them their name.
    • Fur color changes with the seasons.
    • Young langurs are almost pure white.
    Geographic Range
    • Found in Assam, India, and neighboring Bhutan year-round.
    • Inhabits an area bordered by the foothills of Bhutan (north), Manas river (east), Sankosh river (west), and Brahmaputra river (south).
    Habitat
    • Occupies moist evergreen and tropical deciduous forests, along with some riverine areas and savannahs in Assam and Bhutan.
    • Prefers living in the upper canopy of sub-tropical forests in the south and temperate forests in the north.
    Conservation Status
    • IUCN: Endangered
    • CITES: Appendix I
    • Wildlife Protection Act, 1972: Schedule I
    Key Habitats
    • Ripu Reserve Forest and Chakrashila Wildlife Sanctuary serve as vital habitats.
    • Fragmented habitats face instability and threats.

     


    Try this PYQ from CSE Prelims 2012:

    Which one of the following groups of animals belongs to the category of endangered species?

    (a) Great Indian Bustard, Musk Deer, Red Panda and Asiatic Wild Ass

    (b) Kashmir Stag, Cheetal, Blue Bull and Great Indian Bustard

    (c) Snow Leopard, Swamp Deer, Rhesus Monkey and Saras (Crane)

    (d) Lion-tailed Macaque, Blue Bull, Hanuman Langur and Cheetal

     

    Post your answers.

  • Connectome: the Map of the Brain

    connectome


    In the news

    • The human brain, composed of billions of neurons, orchestrates intricate processes that sustain life and enable complex cognitive functions.
    • Understanding these neural interactions is paramount, and scientists have achieved this through the concept of the connectome.

    What is Connectome?

    • Definition: The Connectome serves as a comprehensive map of neuronal connections, akin to a cartogram illustrating the intricate network of synapses transmitting electrical and chemical signals within the brain.
    • Neural Communication: Neurons communicate through synapses, where dendrites receive chemical signals converted into electrical impulses transmitted along the axon. Subsequently, the cell releases chemicals into synapses based on electrical inputs, facilitating communication with neighbouring neurons.

    Applications in Neuroscience

    • Functional Insights: Mapping the connectome provides invaluable insights into brain function, shedding light on processes underlying cognitive functions and elucidating the impact of neurological disorders such as attention deficit hyperactivity disorder (ADHD) and Alzheimer’s disease.
    • Drug Development: By unravelling cellular connections, researchers gain crucial knowledge about cognitive processes and associated disorders, informing the development of novel therapeutic interventions for conditions affecting neurological health.

    Challenges and Progress

    • Complexity of the Brain: The intricate nature of the brain and the vast amount of data it processes present significant challenges in mapping the connectome.
    • Simplified Understanding: Despite these challenges, the connectome has revolutionized scientists’ comprehension of the brain, offering a clearer understanding of neurological health and paving the way for advancements in neuroscience research.
  • [9 March 2024] The Hindu Op-ed: India’s suboptimal use of its labor power

    [9 March 2024] The Hindu Op-ed: India’s suboptimal use of its labor power

    PYQ Relevance:

    Prelims:
    Disguised unemployment generally means (UPSC CSE 2013)
    a) A large number of people remain unemployed
    b) Alternative employment is not available
    c) Marginal productivity of labor is zero
    d) Productivity of workers is low

    Mains:
    1. Account for the failure of the manufacturing sector in achieving the goal of labor-intensive exports. Suggest measures for more labor-intensive rather than capital-intensive exports. [UPSC CSE 2017]

    2. How globalization has led to the reduction of employment in the formal sector of the Indian economy? Is increased informalization detrimental to the development of the country? [UPSC CSE 2016]

    3. The nature of economic growth in India in recent times is often described as jobless growth. Do you agree with this view? Give arguments in favor of your answer. [UPSC CSE 2015]

    Note4Students: 

    Mains: Sectors of Indian Economy; Employment;

    Prelims: Types of Employment;

    Mentor comments: India’s labor market is grappling with issues such as underemployment, low-quality jobs, and high unemployment rates. In such a scenario, we need to focus on creating high-wage jobs and improving the quality of employment opportunities to tackle rising unemployment rates and disparities across regions, gender, and generations. Addressing these challenges requires a comprehensive approach that focuses on creating better job opportunities across various sectors while preparing the workforce for the future.

    Let’s learn. 

    Why in the News?

    According to the recent Labour Force Participation Rate, India’s labor market faces challenges with a vast majority of the population earning income through informal employment, lacking job security and benefits. 

    What is the current state of the Indian Labor market?

    • According to the Periodic Labour Force Survey (PLFS), the labor force participation rate is 50%, with a lower female participation rate of 23% compared to 67% for males.
    • In 2017–18, 90.7% of employment was in the informal sector, marked by low productivity and underemployment. Self-employment accounts for 52% of workers, while only 23% are regular salaried workers.

    Context:

    • Although the recent data shows an increase in labor force participation and a decrease in unemployment rates in the Indian Market, the growth is primarily driven by self-employment and unpaid family workers.
    • There has been stagnation in real earnings for wage/salaried workers and the self-employed. The dominance of low-quality work in India’s labor market poses macroeconomic growth concerns and highlights the need for creating better job opportunities.

    What are the current major shifts in the Indian Labor Market?

    • Dynamics of job creation and loss: India’s job market is characterized by a scarcity of good jobs, with a large portion of the workforce employed in informal, low-wage, and insecure sectors like agriculture.
      • Services sector: It contributes significantly to both job creation and loss, with wholesale and retail trade playing a substantial role.
      • Construction sector: It is known for insecure working conditions and low pay, generates a significant number of new jobs, raising concerns about job quality. Unemployment rates have been high even before the pandemic, with challenges exacerbated by the COVID-19 crisis.
    • Improvements in Labour Market:
      • Labour Force Participation and Unemployment Rates: LFPR increased steadily from 52.35% in 2017-18 to 58.35% in 2021-22, driven notably by rural women. Overall unemployment rate decreased from 6.2% in 2017-18 to 4.2% in 2021-22, with a similar downward trend for youth unemployment.
      • Self-Employment Dynamics: LFPR and unemployment rate improvements largely attributed to self-employment. Rise in unpaid family workers and own-account workers reflect a decline in job quality within the workforce.
    • Earnings:
      • Earning Trends:
        • Aggregate Earnings: All-India average real daily earnings increased by around ₹10 between 2017-18 and 2021-22, a 4% increase.
        • Rural and Urban Earnings: Both rural and urban daily earnings increased by an average of ₹10 to ₹14.
        • Earnings Disparities: Wage and salaried workers had the highest earnings, followed by self-employed and casual workers. Salaried and self-employed earnings stagnated, while casual workers saw a 20% increase.
      • Employment Trends:
        • Self-Employment Growth: Self-employed workers saw the highest growth in employment between 2017-18 and 2021-22. The subcategory of unpaid family workers experienced significant growth in numbers.
        • Earnings Disparities: Top 20% of salaried workers experienced a drop in real daily average earnings.
      • Structural Transformation:
        • Labour Force Participation Rate (LFPR) rose, but closer examination reveals disparities in employment types.
        • Notable rise Female Workforce Participation driven by self-employment in agriculture.
        • Sectoral Shifts: Movement from agriculture to construction observed among male workers

    How can the challenges faced by the Indian Labor Market can be addressed?

    • Building Quality over Quantity: Government needs to explore innovative solutions to generate demand and create employment opportunities. Secondly, it also needs to support skill development initiatives, by bridging the skill gap by enhancing the industry-academia linkages, fostering internships, and encouraging entrepreneurship for better absorption of skilled labor.
    • Need for Labor Reforms: Advocate for rational and progressive labor reforms that consider the interests of both workers and employers.
    • Building good Work Culture: Promoting transparency, responsible business practices, and fair labor market operations through effective leadership and employee engagement initiatives is the need of the hour.
    • Need for constructive work: Strive for constructive dialogue, collaborative decision-making, and a cooperative environment to address disguised unemployment, seasonal unemployment, and educated unemployment through policies promoting job creation.

    Conclusion: According to NITI Aayog, India has potential to grow at 8% as the country is labor-rich with enough institutional maturity of a functioning democracy. In simpler terms, the Investment to GDP ratio is the area where we need to focus as it plays a crucial role in the demand-side of the economy.

    References

    https://www.thehindu.com/opinion/lead/indias-suboptimal-use-of-its-labour-power/article67929725.ece

    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4609381

    https://www.adb.org/publications/demographic-dividends-india-evidence-and-implications-based-national-transfer-accounts

    https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9848021/

    https://www.theindiaforum.in/economy/quantity-vs-quality-long-term-trends-job-creation-indian-labour-market

    https://www.thehindu.com/business/Economy/india-is-a-labour-rich-country-with-enough-institutional-maturity-can-get-to-8-growth-niti-aayog-vice-chairman/article67613743.ece

  • EoUs, SEZs to get RoDTEP sops

    In the news

    • In a significant move aimed at bolstering India’s export sector, the Centre recently announced the extension of tax refunds under the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to outbound shipments from Special Economic Zones (SEZs) and Export Oriented Units (EOUs).

    About RoDTEP Scheme

    • Introduced by the Government as a duty remission scheme on exports, implemented from 1st January 2021.
    • Aimed at repealing and reducing taxes for exported products to boost exports in the country.
    • Administered by the Department of Revenue, Ministry of Finance.
    • Provides reimbursement of taxes, duties, and levies not refunded under any other mechanism, incurred by export entities in the manufacturing and distribution of exported products.
    • Includes direct costs incurred by exporters and prior stage cumulative indirect taxes on goods.

    Compliance with the WTO

    • Follows the global principle that taxes/duties should not be exported.
    • Replaced the Merchandise Export Incentive Schemes (MEIS) after a WTO dispute ruling against India.

    Eligibility Criteria

    • Applicable to all export sectors regardless of turnover, with the country of manufacturing of exported goods in India.
    • Applies to merchant or manufacturer exporters directly exporting goods.
    • Goods exported through e-commerce platforms are eligible.

    Refund process

    • Rebate provided to eligible exporters as a percentage of the Freight on Board (FOB) value of exports.
    • Remission issued as transferrable e-scrips maintained in an electronic credit ledger by CBIC.
    • E-scrips can be used for paying basic customs duty on imports or transferred electronically to another party.

    Back2Basics:

    (1) Export Oriented Units (EOUs)

    Details
    Establishment EOUs are established under the provisions of the Foreign Trade (Development and Regulation) Act, 1992, and the Export Import Policy.
    Regulation Regulated by the Directorate General of Foreign Trade (DGFT)
    Benefits
    • Duty-free procurement of raw materials.
    • Reimbursement of GST and duty on fuels.
    • Fast track clearance facilities.
    • Exemption from industrial licensing for certain sectors.
    Qualification Project must have a minimum investment of Rs. 1 crore in plant and machinery, except for specific sectors like software technology parts and biotechnology parks.
    Geographical Scope EOUs can be set up anywhere in India based on scheme criteria.
    Comparison with SEZs
    • SEZs are demarcated enclaves outside Customs jurisdiction.
    • SEZs enjoy tax exemptions, while EOUs pay taxes that can be claimed as refunds later.

     

    (2) Special Economic Zones (SEZs)

    Details
    Inception Date SEZ policy in India was first implemented on April 1, 2000.
    Objective
    • Enhance foreign investment and provide an internationally competitive and hassle-free environment for exports.
    • Promote exports and ensure a level playing field for domestic enterprises.
    SEZ Act 2005 Enacted to provide the legal framework covering all important aspects of SEZ development and operations.
    Setting up SEZs
    • Any private/public/joint sector, state government, or its agencies can establish an SEZ.
    • Foreign agencies can also set up SEZs in India.
    Role of State Governments
    • State government representatives are consulted during the proposal consideration phase.
    • States must ensure the availability of basic infrastructure like water and electricity before recommending proposals.
    Government Control
    • Statutory functions are controlled by the government in all SEZs.
    • The central government controls operation and maintenance in central government-controlled SEZs; the rest are privatized.
    Exemption from Labor Laws
    • SEZs are subject to normal labor laws enforced by state governments.
    • A single-window clearance mechanism and simplified procedures/returns have been requested from state governments.
    Monitoring Units in SEZs Annually by a unit approval committee consisting of a development commissioner, customs, and state government representatives.
    Special Features for Business Units
    • Business units in SEZs are entitled to incentives and a simplified operating environment.
    • No license is required for imports, including second-hand machinery.

     


    Try this PYQ from CSE Prelims 2016:

    Recently, India’s first ‘National Investment and Manufacturing Zone’ was proposed to be set up in

    (a) Andhra Pradesh

    (b) Gujarat

    (c) Maharashtra

    (d) Uttar Pradesh

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