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Prelims Booster

20th April – Prelims Booster

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Minor forest produce

Ministry of Home Affairs has added the collection, harvest, and process of minor forest produce to the list of activities that will be permitted during the lockdown period.

What is ‘minor forest produce’ (MFP)?

Section 2(i) of the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 defines a Minor Forest Produce (MFP) as all non-timber forest produce of plant origin and includes bamboo, brushwood, stumps, canes, Tusser, cocoon, honey, waxes, Lac, tendu/kendu leaves, medicinal plants and herbs, roots, tuber and the like.

About MSP for MFP Scheme –

  • It is a central sector scheme (started in 2013) for marketing of Minor Forest Produce through Minimum Support Price (MSP) and development of value chain to ensure fair monetary returns to MFP gatherers for their efforts in collection, primary processing, storage, packaging, transportation etc.
  • The scheme envisages fixation and declaration of MSP for the selected MFP based on the suggestions/inputs received from the Tribal Cooperative Marketing Development Federation of India (TRIFED), which came into existence in 1987, and the States concerned.
  • Procurement and marketing operation at pre-fixed MSP is undertaken by the designated state agencies.
  • Initially, the scheme was being implemented by states having areas under the 5th Schedule of the Constitution of India (Chhattisgarh, Madhya Pradesh, Odisha, Jharkhand, Gujarat, Maharashtra, Rajasthan, Andhra Pradesh and Telangana).

KISAN Rath

Union Minister of Agriculture and Farmers’ Welfare has launched a farmer friendly mobile application developed by the National Informatics Centre (NIC) to facilitate farmers and traders in searching transport vehicles for Primary and Secondary transportation for movement of Agriculture and Horticulture produce.

Details – 

  • Primary transportation would include movement from Farm to Mandis, FPO Collection Centre and Warehouses etc.
  • Secondary Transportation would include movement from Mandis to Intra-state & Inter-state mandis, Processing units, Railway station, Warehouses and Wholesalers etc.
  • The Mobile Application named “Kisan Rath” facilitates Farmers and Traders in identifying right mode of transportation for movement of farm produce ranging from foodgrain (cereal, coarse cereal, pulses etc), Fruits & Vegetables, oil seeds, spices, fiber crops, flowers, bamboo, log & minor forest produce, coconuts etc.
  • This App also facilitates traders in transportation of perishable commodities by Reefer (Refrigerated) vehicle.

Organic Pseudocapacitor

Scientists at the Institute of Nano Science and Technology (INST), Mohali, an autonomous institute under the Department of Science & Technology have developed a stable material for pseudocapacitors or supercapacitors which store electrical energy by electron charge transfer. 

Details –

  • The team has developed the pseudocapacitive material, a hybrid xerogel structure (a solid formed from a gel by drying with unhindered shrinkage), for the very first time.
  • The hybrid material was fabricated by the integration of a well-known organic molecule, dopamine onto a conductive matrix, like graphene.
  • This class of xerogel architectures, although reported in the literature as alternatives to conventional pseudocapacitors, lack sufficient cycling stability to replace batteries in the consumer market.
  • The material can offer a low-cost scalable energy storage solution as an alternative to batteries.

Draft Electricity Amendment Bill, 2020

For further development of the power sector, Ministry of Power has issued draft proposal for amendment of Electricity Act, 2003 in the form of draft Electricity Act (Amendment) Bill, 2020 for comments / suggestions from Stakeholders.

Features –

Major amendments proposed in the Electricity Act are as follows.

1. Viability of  Electricity Distribution companies (Discoms) –

  • Cost reflective Tariff – To eliminate the tendency of some Commissions to provide for regulatory assets,  it is being provided that the Commissions shall determine tariffs that are reflective of  cost so as to enable Discoms to recover their costs.
  • Direct Benefit Transfer –  It is proposed that tariff be determined by Commissions without taking into account the subsidy, which will be given directly by the government to the consumers.

2. Sanctity of Contracts –

  • Establishment of Electricity Contract Enforcement Authority – A Central Enforcement Authority headed by a retired Judge of the High Court is proposed to be set-up with powers of the Civil Court to enforce performance of contracts related to purchase or sale or transmission of power between a generating, distribution or transmission companies.
  • Establishment of adequate Payment Security Mechanism for scheduling of electricity – It is proposed to empower Load Dispatch Centres to oversee the establishment of adequate payment security mechanism before scheduling dispatch of electricity, as per contracts.

3. Strengthening the regulatory regime –

  • Strengthening of the Appellate Tribunal (APTEL) – It is proposed to increase the strength of APTEL to seven apart from the Chairperson so that multiple benches can be set-up to facilitate quick disposal of cases. It is also proposed to further empower the APTEL to enforce its decisions.
  • Doing away with multiple Selection Committees – It is proposed to have one Selection Committee for selection of Chairpersons and Members of the Central and State Commissions and uniform qualifications for appointments of Chairperson and Members of Central and State Electricity Regulatory Commissions.
  • Penalties – In order to ensure compliance of the provisions of the Electricity Act and orders of the Commission, section 142 and section 146 of the Electricity Act are proposed to be amended to provide for higher penalties.

4. Renewable and Hydro Energy –

  • National Renewable Energy Policy – It is proposed to provide for a policy document for the development and promotion of generation of electricity from renewable sources of energy.
  • It is also proposed that a minimum percentage of purchase of electricity from hydro sources of energy is to be specified by the Commissions.
  • Penalties: It is being further proposed to levy penalties for non-fulfilment of obligation to buy electricity from renewable and/or hydro sources of energy.

5. Miscellaneous –

  • Cross border trade in Electricity – Provisions have been added to facilitate and develop trade in electricity with other countries. 
  • Franchisees and Distribution sub licensees – Many States Distribution Companies have been assigning the task of distribution of electricity in a particular area or city to Franchisees / Sub-Distribution Licensees. However, there was a lack of clarity regarding the legal provisions related to this.  It is proposed to provide that the Distribution Companies, if they so desire, may engage Franchisees or Sub-Distribution Licensees to distribute electricity on its behalf in a particular area within its area of supply, however, it will be the DISCOM which shall be the licensee, and therefore, ultimately responsible for ensuring quality distribution of electricity in its area of supply.

Revised FDI norms

In a move that will restrict Chinese investments, the Centre has made prior government approval mandatory for foreign direct investments from countries which share a land border with India. Previously, only investments from Pakistan and Bangladesh faced such restrictions.

What is FDI?

  • Foreign direct investment (FDI) It is an investment from a party in one country into a business or corporation in another country with the intention of establishing a lasting interest.
  • Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets, including establishing ownership or controlling interest in a foreign company.
  • FDI are distinguished from portfolio investments in which an investor merely purchases equities of foreign-based companies.

Recent changes –

  • A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited. However, an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route.
  • The official statement added that a transfer of ownership of any existing or future FDI in an Indian entity to those in the restricted countries would also need government approval.

Need for revision –

With many Indian businesses coming to a halt due to the lockdown imposed to contain the COVID-19 pandemic and valuations plummeting, a number of domestic firms may be vulnerable to “opportunistic takeovers or acquisitions” from foreign players.

Chinese investments in India –

  • China’s footprint in the Indian business space has been expanding rapidly, especially since 2014. A recent report from Brookings India showed that net Chinese investment in India until 2014 stood at $1.6 billion, mostly coming from state-owned players in the infrastructure space.
  • Three years later (in 2017), total investment had increased five-fold to at least $8 billion according to Chinese government data, with a shift from a state-driven to market-driven approach.
  • The total current and planned Chinese investment in India has now crossed $26 billion, according to estimates in the March 2020 report, titled “Following the Money: China Inc’s Growing Stake in India-China Relations”.
  • The single biggest Chinese acquisition has been in the pharmaceutical space, with Shanghai-based Fosun paying $1.09 billion for a 74% stake in Hyderabadbased Gland Pharma.
  • A 2017 survey of Chinese enterprises in India by the Industrial and Commercial Bank of China’s Mumbai branch found that 42% were in the manufacturing sector, 25% in infrastructure and others in telecom, petrochemicals, software and IT.

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