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From Decisively Tackling Corona Virus to Restoring Faith in Formal Banking System: Governance in India This week

governance and economic development

Here is the weekly round-up of governance and economic development related news in India for the past week.

Precaution Not Panic: Indian Government Takes Decisive Steps to Tackle Coronavirus

Government of India continued to act with alacrity in dealing with the coronavirus pandemic, with Prime Minister Narendra Modi setting up a High-Level Group of Ministers to review, monitor and evaluate the preparations to tackle its spread.

The government also suspended all existing visas, except diplomatic, official, UN/International Organizations, employment, project visas till 15th April 2020 as a precautionary measure. Visa free entry of OCI card holders have also been suspended, and Indian citizens were also strongly advised to avoid all non-essential travel abroad.

The Union Government has also declared hand sanitizers and N-95 masks as “essential goods” under the Essential Commodities Act to ensuring their availability at reasonable prices. This will deter hoarders/black marketeers from hoarding them and ensure availability of masks and hand sanitizers for all.

Read more about how Indian Government is tackling corona virus here and here.

PM Modi Proposes Regional Partnership to counter Coronavirus

PM Modi proposed a unique regional partnership to jointly tackle Coronavirus and asked the leaders of SAARC nations to join in together to chalk out a strategy to fight coronavirus via videoconferencing.

He added that SAARC can set an example to the world in countering the virus by working together. Leaders of SAARC responded with enthusiasm to PM Modi’s proposal and thanked him for taking this initiative.

Hike in Dearness Allowance Approved by CCEA

The Cabinet Committee on Economic Affairs (CCEA) approved a 4% hike in dearness allowance (DA) for central government employees. This will benefit 48 lakh employees, 65 lakh pensioners and 1.13 crore families.

Along with increasing DA from 17% to 21%, the government has also increased the Dearness relief. Dearness allowance is intended to mitigate the impact of inflation and calculated as part of basic salary.

YES Bank Reconstruction Scheme Approved by Cabinet

Union Cabinet has approved the reconstruction scheme for YES Bank as proposed by the Reserve Bank of India (RBI). These measures further affirm and protect the rights of common man who put his trust in formal banking system. The moratorium on YES Bank will be lifted within three days after the notification is issued.

RBI has stated in its revival plan that State Bank of India (SBI) led consortium would hold 49 per cent stake in the troubled bank after it infuses capital. The bank would not become a part of SBI, but would operate as a separate board-run entity.

Read more about RBI’s scheme for supercession and reconstitution of Yes Bank here

Amendments to Insolvency and Bankruptcy Code Act Passed

Rajya Sabha passed amendments to the insolvency law that will help ring-fence successful bidders of insolvent companies from risk of criminal proceedings for offences committed by previous promoters.

Finance Minister Nirmala Sitharaman added that new amendments adhere to Supreme court Judgments in letter and spirit. Lok Sabha had passed the IBC amendment act earlier this month.

Read more about the impact of the IBC act in reducing NPA’s here, here and here.

Mineral Laws Amendment Bill Passed by Rajya Sabha

Rajya Sabha also passed the Mineral Laws Amendment bill which opens a new era in the coal and mining sector specially, to promote ease of doing business.

The Act now allows companies which do not possess any prior coal mining experience in India or in other countries to participate in the auction of coal/lignite blocks. This will not only increase participation in coal/lignite block auctions, but also facilitate the implementation of FDI policy in the coal sector.

Read more about Modi’s government’s big push for mining sector here.

India Sees a Manufacturing Activity Upsurge

Index of Industrial Production (IIP) expanded 2% during January, the fastest expansion of manufacturing IIP in past six months. This shows an uptick in the manufacturing sector as a result of cheaper capital and Ease of Doing Business.

Eleven out of the twenty-three industry groups in the manufacturing sector showed positive growth in January 2020 as compared to January 2019. Within this, the eight core industries grew by 2.2%, showing a strong resurgence of the manufacturing sector.

Indian Exports Touch a High in February

India’s merchandise exports increased 2.9% to touch $27.65 billion in February 2020 as compared to last February. This pushed the trade deficit to a 12-month low of $9.85 billion in February 2020.

Engineering goods recorded highest increase in exports by 8.7%, followed by electronic goods. India’s focus on port-led development and Make in India is yielding results in the form of rising exports.

Not Just Highway, But a Green Highway

India will get its first 780 km Green National Highway Corridor project with an investment of ₹7,660 crore in partnership with the World Bank. This green highway will connect Himachal Pradesh, Rajasthan, Uttar Pradesh and Andhra Pradesh and involves upgradation of the existing 2-Lane highways to 4-Lane with service lanes and other facilities.

The “green” component involves improving the green cover along the highways, using reusable material for laying roads etc., and shows PM Modi led government’s resolve to achieve multiple goals in a single decision.