• Current Affairs, 14 May 2020



    • The PM CARES Fund Trust on Wednesday decided to allocate ₹3,100 crore for fight against the COVID-19 pandemic and the amount will be used, among other things, to purchase ventilators and caring for migrant workers, the Prime Minister’s Office said.
    • Out of the ₹3,100 crore, nearly ₹2,000 crore will be earmarked for the purchase of “Made-in-India” ventilators and ₹1,000 crore for care of migrant labourers, it said.
    • Another ₹100 crore will be given to support coronavirus vaccine development efforts, a PMO statement said.
    • Prime Minister Modi had announced creation of the PM’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES) where people can contribute to help the government fight against coronavirus and similar “distressing situations”.
    • The trust was formed on March 27 and is headed by the prime minister. The other ex-officio members of the trust are the defence minister, the home minister and the finance minister.
    • For augmenting the infrastructure to tackle COVID-19 cases across the country, 50,000 ‘Made-in-India’ ventilators will be purchased from PM CARES Fund at a cost of approximately ₹2000 crore, the statement said.
    • These ventilators will be provided to government-run COVID hospitals in all states and union territories for better treatment of the critical COVID-19 cases, it added.
    • Several institutions of higher learning and defence establishments have pitched in to produce low-cost ventilators after the outbreak of the virus.
    • For strengthening the existing measures being taken for the welfare of the migrants and the poor, states and UTs will be given a lump sum assistance totalling ₹1,000 crore from the fund.
    • The amount would be provided to state governments and UTs for district collectors or municipal commissioners to strengthen efforts to provide accommodation, food, medical treatment and transportation to the migrants, the statement explained.
    • Several special trains have ferried lakhs of migrant workers back to their home states as they were unwilling to stay in cities citing uncertain future due to coronavirus lockdown.
    • Several of them have walked hundreds of kilometres to return to their native place.
    • The statement said state and UT-wise funds will be released on the weightage of population of the state as per 2011 Census – 50 per cent weightage. Number of positive COVID-19 cases as on date – 40 per cent weightage. And equal share — 10 per cent weightage for all states to ensure basic minimum sum for all.
    • The fund will be released to the district collector or district magistrate or municipal commissioner through the State Disaster Relief Commissioner.
    • Referring to a vaccine to fight the virus, the statement said it is the most pressing need. “… and Indian academia, start-ups and industry have come together in cutting-edge vaccine design and development.”
    • To support the COVID-19 vaccine designers and developers, an amount of Rs. 100 crore will be given from the fund as a “helping hand” to catalyse vaccine development, the statement said.
    • The ₹100 crore will be utilised under the supervision of the Principal Scientific Advisor.



    • Following the adage, “never waste a crisis”, the government of Uttar Pradesh, last week, introduced an ordinance that has scrapped most labour lawsfor three years — ostensibly for creating jobs and for attracting factories exiting China following the outbreak of the novel coronavirus. These laws deal with the occupational safety, health and working conditions of workers, regulation of hours of work, wages and settlement of industrial disputes. They apply mostly to the economy’s organised (formal) sector, that is, registered factories and companies, and large establishments in general. Madhya Pradesh and Gujarat have quickly followed suit. Reportedly, Punjab has already allowed 12-hour shifts per day (72 hours per week) in factories without overtime payment to overcome worker shortage after the migrants have left in the wake of the national lockdown.
    • The economic fallout of COVID-19
    • Snatching away labour rights in the midst of a global pandemic and national lockdown is distressing and shocking. Over the course of the last seven weeks, we have witnessed unheard of human distress as lakhs of migrant workers continue to desperately trudge to their villages after losing their jobs, livelihoods, and toeholds in cities. Despite overflowing food grain stocks, governments have been miserly in providing adequate food security. Income support to workers to retain them in their places of work has also been lacking. Significantly, migrant labour will be critical to restore production once the lockdown is lifted. In fact, factories and shops are already staring at worker shortages. Instead of encouraging workers to stay back or return to cities by ensuring livelihood support and safety nets, State governments have sought to strip workers of their fundamental rights.
    • Employers’ associations have urged the central government to do away with most labour rights to address temporary labour shortages. Trade union leaders from the Bharatiya Mazdoor Sangh to the Centre of Indian Trade Unions, and Opposition leaders in Uttar Pradesh have condemned the ordinance. It will face a challenge in courts, legal experts say.
    • The abrogation of labour laws raises many constitutional and political questions. But will it expand employment and output growth, as claimed by its proponents? Such a step, by popular belief, will reduce wage costs, increase profits and augment productive investment and growth. Improved supply is expected to create demand (following Say’s Law in economics). Such (simplistic) reasoning assumes that labour laws are the binding constraints on expanding output.
    • Coronavirus lockdown | Suspend labour laws for 2-3 years, employers’ associations urge government
    • Surely, the lockdown has disrupted supply, but only temporarily. There are no inherent shortages at the moment as the inflation rate remains moderate. Agricultural produce is rotting in farms for lack of transport. Industrial production is held up as migrant workers have fled for their lives.
    • Before the lockdown, annual GDP growth rate had plummeted to 4.7% during October-December quarter of 2019-20, from 8.3% in the full year of 2016-17. The slowdown is due to lack of demand, not of supply, as widely suggested. With massive job and income losses after the lockdown, aggregate demand has totally slumped, with practically no growth. Therefore, the way to restart the economy is to provide income support and restore jobs. This will not only address the humanitarian crisis but also help revive consumer demand by augmenting incomes. Scrapping labour laws to save on labour costs will do just the opposite: it will reduce wages, lower earnings (particularly of low wage workers) and reduce consumer demand. Further, it will lead to an increase of low paid work that offers no security of tenure or income stability.
    • Parliamentary panel questions dilution of labour laws
    • The rationale for scrapping labour laws to attract investment and boost manufacturing growth poses two additional questions. One, if the laws were in fact so strongly pro-worker, they would have raised wages and reduced business profitability. But the real wage growth (net of inflation) of directly employed workers in the factory sector has been flat (2000-01 to 2015-16) as firms have increasingly resorted to casualisation and informalisation of the workforce to suppress workers’ bargaining power, evidence suggests.
    • Two, is it right to blame the disappointing industrial performance mainly on labour market regulations? Industrial performance is not just a function of the labour laws but of the size of the market, fixed investment growth, credit availability, infrastructure, and government policies. In fact there is little evidence to suggest that amendment of key labour laws by Rajasthan and Madhya Pradesh in 2014 took them any closer to their goal of creating more jobs or industrial growth. The role of labour market regulations may be more modest than the strong views expressed against them in the popular debates.
    • Surely, India’s complex web of labour laws, with around 47 central laws and 200 State laws, need rationalisation. However, now more than ever before, reforms need to maintain a delicate balance between the need for firms to adapt to ever-changing market conditions and workers’ employment security. Depriving workers of fundamental rights such as freedom of association and the right to collective bargaining, and a set of primary working conditions (such as adequate living wages, limits on hours of work and safe and healthy workplaces), will create a fertile ground for the exploitation of the working class.
    • Parties protest against labour law dilution
    • Presently, over 90% of India’s workforce is in informal jobs, with no regulations for decent conditions of work, no provision for social security and no protection against any contingencies and arbitrary actions of employers. Abrogation of labour laws, as proposed by the Uttar Pradesh government, will free more employers from the obligations they currently hold for ensuring the job security, health, and social protection of their workers. It will increase informal employment in the formal sector instead of encouraging the growth of formal work.
    • 96% migrant workers did not get rations from the government, 90% did not receive wages during lockdown: survey
    • As India battles the economic and social consequence of the COVID-19 pandemic, many State governments have seized the opportunity to scrap labour laws on the pretext of encouraging employment. Such a decision makes little economic sense currently, as it will reduce share of wages in output, thereby reducing growth in domestic demand and hurting output expansion. Significantly, exports cannot be an option for now as the global economy is staring at the possibility worse than the Great Depression. Hence, the Uttar Pradesh government’s move will only result in a race to the bottom on workers’ pay and labour standards, making workers worse off, without creating additional jobs, as it is a lack of demand that is currently holding up output growth. The Uttar Pradesh ordinance needs to be revoked, lock, stock, and barrel.
    • Radhicka Kapoor and R. Nagaraj work with the Indian Council for Research on International Economic Relations (ICRIER), New Delhi and the Indira Gandhi Institute of Development Research (IGIDR), Mumbai, respectively



    • From an overall perspective, the first tranche of announcements made by Finance Minister Nirmala Sitharamanunder the Atmanirbhar Bharat Abhiyan on Wednesday is impressive indeed. There are, and will be, many issues in the details but taken as a whole, the measures announced will go a long way in lifting the spirits of the two key and troubled sectors of MSMEs and non-banking finance companies. While for the former it is an existential crisis, for the latter it is one of liquidity. The massive ₹3-lakh crore collateral-free assistance handed out to MSMEs will help them crank up their operations. Ms. Sitharaman has done well in extending a sovereign credit guarantee for the complete amount as banks may otherwise have been reluctant to support troubled borrowers. The government could have specified the interest cap on these loans without leaving it to individual lenders as each of them has its own rate structure. Again, the scheme could have been extended until the end of this financial year instead of until October 31. India is now entering the monsoon season when activity is traditionally dull, so it is not clear how many borrowers will get the benefit. The ₹20,000 crore partially guaranteed subordinated debt programme and the ₹50,000 crore fund of funds scheme will help boost the equity portion on MSME finances but again, the finer details need to be clear.
    • NBFCs, housing finance firms and micro finance entities get a much required liquidity boost in the form of a ₹30,000 crore scheme wherein their debt paper will be fully guaranteed by the government. With this, and the partial credit guarantee scheme of ₹45,000 crore, the government has broken the logjam wherein banks were unwilling to extend credit despite the RBI’s strong push. This should largely attenuate the liquidity crisis in the non-banking space for now. The Minister has also done well in addressing the liquidity issues of power distribution companies through a ₹90,000 crore infusion that will be securitised on their receivables and backed by a State government guarantee. Wednesday’s announcements are focused on the liquidity part of the crisis. While the headline numbers appear big, the reality is that the government will be called upon to bear the liability only if the economic situation becomes hopeless; it may not come to that. What the announcements do is to break the confidence logjam in the credit market and give the assurance to lenders and borrowers that the government is willing to backstop their commitments. This is the signal that MSMEs and their lenders needed as liquidity was always there but only for the most credit worthy of borrowers. Here, the government has played its role to perfection.




    • Recently, the Union Finance Minister announced liquidity measures for businesses, especially Micro, Small and Medium enterprises (MSMEs), as part of the first tranche of Atma nirbhar Bharat Abhiyan.
    • The announced measures also form a part of the Rs. 20-lakh-crore economic stimulus package to deal with the Covid-19 pandemic.
    • This economic stimulus includes both liquidity financing measures and credit guarantees.

    Important Points

    • Salaried Workers and Taxpayers:
      • The deadline for income tax returns for the financial year 2019-20 has been extended, with the due date now pushed to November 30, 2020.
      • The rates of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) have been cut by 25%for the FY 2020-21.
      • The statutory Provident Fund (PF) payments have been reduced from 12% to 10% for both employers and employees for the next three months.
    • NBFCs, Housing Finance Companies and Microfinance Institutions:
      • Many of these institutions serve the MSME sector financially and will be supported through a Rs.30,000 crore investment scheme fully guaranteed by the Centre.
      • Further, an expanded partial credit guarantee scheme worth Rs.45,000 crores also has been offered, of which the first 20% of losses will be borne by the Centre.
        • For instance, if the government provides a 100% credit guarantee up to an amount of Rs 1 crore to a firm, it means that a bank can lend Rs 1 crore to that firm; in case the firm fails to pay back, the government will repay all of Rs 1 crore. If this guarantee was for the first 20% of the loan, then the government would guarantee to pay back only Rs 20 lakh.
      • Power Distribution Companies:
        • As these companies are facing an unprecedented cash flow crisis and thus will receive Rs. 90,000 crore liquidity injection.
      • Real Estate and Contractors:
        • Contractors (those dealing with the construction/ works and goods and services contracts) will get a six month extension for completion of work from all Central agencies, and also get partial bank guarantees to ease their cash flows.
        • Registered real estate projects will get a six-month extension for registration and completion of Real Estate Projects under Real Estate (Regulation and Developme nt) Act (RERA)with Covid-19 to be treated as a “force majeure” event.
          • A Force Majeure (FM) means extraordinary events or circumstances beyond human control such as an event described as an Act of God (like a natural calamity).
        • Global Tenders to be Disallowed:
          • Indian MSMEs and other companies have often faced unfair competition from foreign companies and would be difficult to compete in the future due to Covid-19 pandemic.
          • Therefore, global tenders will be disallowed in government procurement tenders upto Rs 200 crores.

    Liquidity Measures for Medium, Small and Micro Enterprises (MSMEs)

    • New Definition of MSMEs:
      • The definition of an MSMEshas been expanded to allow for higher investment limits and the introduction of turnover-based criteria.
        • Earlier MSMEs were defined on the basis of the limit of investment in machinery or equipment.
        • The ‘turnover’ is the more efficient way to identify an MSME as it allows a lot of firms, especially in the services sector like mid-sized hospitals, hotels and diagnostic centres to be eligible for benefits as an MSME.
      • There will be no difference between a manufacturing MSME and a services MSMEs.
    • Infusion of Liquidity:
      • Instead of directly infusing money into the economy or giving it directly to MSMEs,the government will offer credit guarantees for MSMEs.
      • Emergency Credit Line:The collateral free loans of worth  3 lakh crores will be available for MSMEs. It will ensure access to working capital to resume business activity and safeguard jobs for 45 lakh MSMEs.
        • The above measure is available for MSMEs that have an already outstanding loan of Rs. 25 crore or those with a turnover less than Rs 100 crore.
        • The loans will have a tenure of 4 years and they will have a moratorium of 12 months(that is, the payback starts only after 12 months).
      • Subordinate Debt Scheme :The loans of amount Rs 20,000 crore will be provided to MSMEs that were already categorised as “stressed”, or struggling to pay back.
        • In this case, thegovernment provides partial guarantee.
      • Equity Infusion:Fund of Funds with corpus of Rs 10,000 crores will be set up which will provide equity funding for MSMEs with growth potential and viability.

    Credit Guarantees to MSMEs

    • Description:

    • A Credit Guarantee Schemes (CGS) by the government assures the bank that its loan will be repaid by the government in case the MSME falters.
    • Reasons for Introduction of CGS:

    • Though, there was an option to pump liquidity via the banks but banks suspect any new loans due to rising Non-Performing Assets (NPAs).
    • Thus, the government faced a dual problem where banks had the money but were not willing to lend to the credit-starved sections of the economy, while the government itself did not have enough money to directly help the economy.
    • The credit guarantees solve dual issues faced by the government.
    • Implications:
    • Such CGS creates moral hazards as borrowers remain assured of paying back and the lender remains assured of receiving credit amounts. Subsequently, the government is forced to pay the amount.
    • Overall Implications of Economic Stimulus
    • The measures announced during the first tranche of the economic stimulus focuses majorly on supply side measures, aimed at activating businesses in the MSME, real estate, NBFC sectors.
    • In general, stimulus measures are aimed at boosting demand either by government spending on its own account or increasing disposable incomes of households through cash transfers or tax concessions.
    • Indian economy needs both supply and demand side measures for the revival.



    Recently, the Army has proposed 3 years of voluntary Tour of Duty (ToD) for civilians on a trial basis.

    Important Points

    • Proposal:
      • The Army plans to take civilians on a three- year ‘Tour of Duty’ (ToD) or ‘Three-year Short Service’ on a trial basisto serve in the force as both officers and Other Ranks (ORs).
      • The proposal suggests several measures to incentivise this scheme like a tax-free income for three years and a token lump sum at the end of three years of about Rs.5-6 lakh for officers and Rs.2-3 lakh for ORs.
      • However, there will be no severance packages, resettlement courses, professional encashment training leave, ex-Servicemen status, ex-Servicemen Contributory Health Scheme (ECHS) for the ToD officers and other ranks.
      • The proposal is a shift from the concept of permanent service/jobin the Armed Forces, towards internship/temporary experience for three years.
      • If approved it will be a voluntary engagement and there will be no dilution in selection criteria.
      • The Army hopes that this would attract individuals from the best colleges, including the Indian Institute of Technology.
    • Rationale behind the Proposal:
      • There is a “resurgence of nationalism and patriotism” in the country and the proposal attempts to tap the feeling of the youths who do not want to join the Army as a profession but wish to experience military life for a temporary duration.
    • Expected Benefits to the Army:
      • Reduction of Financial Burden:The cost of a three-year service per officer will be a fraction of the cost incurred on Short Service Commission (SSC) officers,which includes cost of pre-commission training, pay, allowances, gratuity, leave encashment among others.
      • Modernisation of Army:The reduced financial burden will shift the focus towards modernisation of the army in terms of training,arms and equipment.
    • Expected Benefits to the Youth:
      • It will not only provide a job with higher salary but also ensures a placement in corporate sectors after retirement as the corporate sector will prefer to hire such youths rather than fresh graduates.
      • It has been seen that corporates favour individuals who have been trained by the military at 26 or 27 years of age.
    • Benefits to the Nation:
      • It will help to channelise the youth energy into positive utilisation of their potential.
      • Rigorous military training and habits inculcation will lead to healthy citizenry.
      • The entire nation will benefit from trained, disciplined, confident, diligent and committed young men or women who have done the three-year service.



    • Recently, US Secretary of State Mike Pompeo met Israeli Prime Minister Benjamin Netanyahu to discussIsrael’s plans to annex parts of the West Bank.
    • Pompeo’s visit was exempted from Israel’s mandatory two-week quarantinefor arrivals and shut borders due to the Covid-19 pandemic.
    • For Israel, this visit was an indication of the strength of its alliance with the USAand the talks focused on discussions on annexation, shared concerns about Iran, the battle against the coronavirus, Israel’s incoming government and threats from Israel’s ties with China.
    • Israel-China Ties:The US has reportedly been pressuring Israel to rethink a bid by a Hong Kong company to build a massive desalination facility.

    Important Points

    • Plans for Annexation of West Bank
    • Israeli hard-linersare eager to unilaterally redraw the Mideast map before November’s US Presidential Election.
    • Thepresumptive Democratic nominee, Joe Biden, is in the opposition of unilateral annexation plans by Israel.
    • Annexation would give Donald Trump an accomplishmentto shore up his pro-Israel base, particularly politically influential pro-Israel evangelical (of or according to the teaching of the gospel or the Christianity) Christian voters.
      • These voters believe in the notion that God promised the land to Jewsand it should be returned to them.
    • Background
      • The Israel-Palestine Conflict can be traced back to
      • Mideast War, 1967:It is also known as the six-day war or Third Arab-Israeli war. Israel captured the West Bank, east Jerusalem and Gaza Strip in the war. The Palestinians seek these territories for a future independent state. In the decades since, Israel has built settlements in the West Bank and east Jerusalem that now house nearly 700,000 Israelis. Most of the international communities consider these settlements a violation of international law and obstacles to peace.
      • Mideast Plan or Middle East Peace Plan:It was unveiled by Trump in January, 2020. Under it, the Palestinians would have a limited statehood contingent on a list of stringent requirements while Israel would annex some 30% of the West Bank.
      • The Palestinians rejected the plan and threatened to withdrawfrom key provisions of the Oslo Peace Accords, which are a series of agreements between Israel and the Palestinians signed in the
      • TheTrump administration believes that Israel’s West Bank settlements are consistent with international law and supports the annexation of West Bank territory, as long as Israel agrees to enter peace talks with the Palestinians.
    • Criticism
      • The annexation will trigger widespread international condemnationbecause it will crush already faint Palestinian hopes of establishing a viable state on the lands captured by Israel in the Mideast war.
      • The Arab Leaguehas mentioned the annexation as a war crime.
      • The European Union(EU) and other individual member states, have warned of tough consequences if Israel moves forward in the annexation process.
    • India’s Stand
      • India was one of the few countries tooppose the United Nations’ partition plan in November 1947, echoing its own experience during independence a few months earlier.
      • India recognised Israel in 1950but it is also the first non-Arab country to recognise Palestine Liberation Organisation (PLO) as the sole representative of the Palestinians. India is also one of the first countries to recognise the statehood of Palestine in 1988.
      • In 2014,India favored the United Nations Human Rights Council’s (UNHRC) resolution to probe Israel’s human rights violations in Gaza. Despite supporting the probe, India abstained from voting against Israel in UNHRC in
      • As a part of Link West Policy,India has de-hyphenated its relationship with Israel and Palestine in 2018 to treat both the countries mutually independent and exclusive.
      • In June 2019,India voted in favor of a decision introduced by Israel in the UN Economic and Social Council (ECOSOC) that objected to granting consultative status to a Palestinian non-governmental organization.



    • Recently, the World Economic Forum(WEF) has released the annual rankings of the global Energy Transition Index.
    • The index benchmarks 115 economies on the current performance of their energy systems across economic development and growth, environmental sustainability and energy security and access indicators and their readiness for transition to secure, sustainable, affordable and inclusive energy systems.

    Important Points

    • Data Analysis:
    • Swedenhas topped the Index for the third consecutive year and is followed by Switzerland and Finland in the top three.
    • France(8th) and the UK (7th) are the only G20 countries in the top ten.
    • Only 11 out of 115 countries have made steady improvementsin ETI scores since 2015. Argentina, China, India and Italy are among the major countries with consistent annual improvements.
      • InChina (78th), problems of air pollution have resulted in policies to control emissions, electrify vehicles and develop the world’s largest capacity for solar photovoltaic (SPV) and onshore wind power
    • Scores for theUS, Canada, Brazil and Australia were either stagnant or declining.
      • The US ranks outside the top 25% for the first time, primarily due to the uncertain regulatory outlook for energy transition.
    • Performance Analysis:
    • The results for 2020show that 75% of countries have improved their environmental sustainability.
      • It is a result of multifaceted, incremental approaches, including pricing carbon, retiring coal plants ahead of schedule and redesigning electricity markets to integrate renewable energy sources.
    • Its study measuring readiness for clean energy transitionin 115 economies showed that 94 have made progress since 2015.
    • The greatest overall progressis observed among emerging economies.
    • India’s Ranking and Reasons:
    • India has moved up two positions to rank 74thwith improvements in all three dimensions of the energy triangle namely:
      • Economic development and growth.
      • Energy access and security.
      • Environmental sustainability.
    • For India, gains have come from a government-mandated renewable energy expansion programmee. to add 275 GW by 2027.
    • India has also made significant strides in energy efficiencythrough bulk procurement of LED bulbs, smart meters and programs for labelling of appliances. Similar measures are being experimented to drive down the costs of electric vehicles (EVs).
    • It indicates a strong positive trajectory,driven by strong political commitment and an enabling policy environment.
    • Impact of Covid-19
    • Covid-19risks cancelling out recent progress in transitioning to clean energy, with unprecedented falls in demand, price volatility and pressure to quickly mitigate socioeconomic costs placing the near-term trajectory of the transition in doubt.
    • Suggestions
    • Policies, roadmaps and governance frameworks for energy transition at national, regional and global levels need to be more robust and resilient against external shocks.
    • The pandemic offers an opportunity to consider unorthodox intervention in the energy marketsand global collaboration to support a recovery that accelerates the energy transition once the crisis subsides.
    • The economic recovery packages(like the announcement of the Pradhan Mantri Gareeb Kalyan Yojana by India), introduced by the governments can accelerate the transition to clean energy, by helping countries scale their efforts towards sustainable and inclusive energy systems, if implemented with long-term strategies.

    World Economic Forum

    • It is a Swiss nonprofit foundation established in 1971, based in Geneva, Switzerland.
    • Recognized by the Swiss authorities as the international institution for public-private cooperation, its mission is cited as, “committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas”.
    • Major reports published by WEF:
    • Global Competitiveness Report
    • Global IT Report
    • Global Gender Gap Report
    • Global Risk Report
    • Global Travel and Tourism Report



    According to estimates from the India Ratings and Research (a credit rating agency), the Covid-19 lockdown has caused 21 major States to suffer a collective revenue loss of about Rs. 97,100 crore for the month of April.

    Important Points

    • The lockdown caused disruptionsto production, supply-chains, trade and the total washout of activities in aviation, tourism, hotels and hospitality.
    • The disruption caused has taken place with such a speed and scale that even if the lockdown is lifted, economic activity is unlikely to normalise in near future.
    • Although, during the lockdown,nearly 40% of the economy was functional as economic activities defined as essentials were allowed to operate.
    • This means that despite the lockdown some amount of revenue did accrue to the states.But despite this, the states faced significant revenue loss in April.
    • The lockdown has a more paralyzing impact on the states,which have a high share of own revenue in the total revenue mix.
    • For example, for Goa, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Tamil Nadu and Telangana65%-76% of their revenue comes from their own sources.
    • Both Union government and State governments are struggling due to the dried-up cash inflow.
    • But the problems of the States are more precarious because of the actual battle against the Covid-19 and the associated expenditure being incurred by them.
    • Under the current circumstance, there is a fair amount of uncertainty regarding the quantum and timings of the states’ receivables from the Centre. Their own sources of revenue have also fallen to abysmally low levels.
    • This is pushing states to adopt austerity measuresand combine it with exploring new/more ways of generating revenues.
    • Austerity measures include action by a government to reduce the amount of money it spends.
    • Conclusion
    • The situation may improve somewhat in May 2020 due to the easing of some restrictions–
    • Allowing the liquor sale.
    • Raising the excise duty on liquor.
    • Some states have raised VAT on petrol and diesel.


    • Sources of State government revenue:
    • States’ Own Tax Revenue (SOTR),
    • Share in central taxes,
    • States’ Own Non-Tax Revenue (SONTR)
    • Grants from the Centre.
    • States’ own revenue mainly comes from seven heads–
    • State Goods and Services Tax (SGST), State Value Added Tax (VAT)- mostly on petroleum products, State excise-mostly on liquor, stamps and registration fees, vehicle tax, tax and duty on electricity, and own non-tax revenue.



    • Due to labour shortage in two granary states of Punjab and Haryana, farmers are now being encouraged to adopt‘Direct Seeding of Rice’ (DSR) in place of conventional transplanting.
    • Covid-19 pandemic has led the labourers to reverse migrate to their villages, which has created a shortage of labourers.

    Important Points

    • Normal Transplanting of Paddy vs Direct Seeding of Rice
    • Transplanting Paddy:
    • In transplanting paddy, farmers prepare nurserieswhere the paddy seeds are first sown and raised into young plants.
    • The nursery seed bed is 5-10% of the area to be transplanted.
    • These seedlings are then uprooted and replanted25-35 days later in the puddled field.
    • Direct Seeding of Rice (DSR):
    • In DSR, the pre-germinated seeds are directly drilled into the field by a tractor-powered machine.
    • There is no nursery preparation or transplantation involved in this method.
    • Farmers have to only level their land and give one pre-sowing irrigation.
    • Protection against the weeds
    • Transplanting Method:In transplanting for the first three weeks or so, the plants have to be irrigated almost daily to maintain a water depth of 4-5 cm.
    • Water prevents growth of weeds by denying them oxygen in the submerged stage, whereas the soft ‘aerenchyma tissues’in paddy plants allow air to penetrate through their roots. Water, thus, acts as a herbicide for paddy.
    • DSR Method:In DSR as flooding of fields is not done during sowing, chemical herbicides are used to kill weeds.
    • Advantage with Direct Seeding of Rice
    • Water savings.
    • Less numbers of labourers
    • Saves labour cost.
    • Reduce methane emissionsdue to a shorter flooding period and decreased soil disturbance compared to transplanting rice seedlings.
    • Drawbacks of Direct Seeding of Rice
    • Non-availability of herbicides.
    • The seed requirement for DSR is also high,8-10 kg/acre, compared to 4-5 kg/acre in transplanting.
    • Further, laser land levelling iscompulsory in DSR. This is not so in transplanting.
    • The sowing needs to be done timelyso that the plants have come out properly before the monsoon rains arrive.


    • Rice is a staple food for the overwhelming majority of the population in India.
    • It is a kharif crop which requires high temperature, (above 25°C) and high humidity with annual rainfall above 100 cm.
    • In the areas of less rainfall, it is grown with the help of irrigation.
    • In southern states and West Bengal the climatic conditions allow the cultivation of two or three crops of rice in an agricultural year.
    • In West Bengal farmers grow three crops of rice called ‘aus’, ‘aman’ and ‘boro’.
    • About one-fourth of the total cropped area in India is under rice cultivation.
    • Leading producer states: West Bengal, Uttar Pradesh, and Punjab.
    • High Yielding States: Punjab, Tamil Nadu, Haryana, Andhra Pradesh, Telangana, West Bengal and Kerala.
    • Punjab and Haryana are not traditional rice growing areas.
    • Rice Cultivation in the irrigated areas of Punjab and Haryana was introduced in the 1970s following the Green Revolution.
    • Almost the entire land under rice cultivation in Punjab and Haryana is irrigated.
    • India contributes 21.6% of rice production in the world and ranked second after China in 2016.




    The Department of Science and Technology has helped in developing various assistive tools, devices and technological solutions to mitigate the impact of Covid-19 among Divyangjan and Elderly through a programme on Technology Interventions for Disabled and Elderly (TIDE).

    Important Points

    • Technology Interventions for Disabled and Elderly (TIDE):
    • It is the Department of Science and Technology’s (DST) focused initiative on Science and Technology (S&T) interventions for the benefit of elderly and also the differently-abled Divyangjanpersons in the country.
    • In addition to improving the quality-of-life of the target population with appropriate and/or innovative scientific technological interventions, TIDE also aims at giving them autonomy, and independence through holistic development by creating requisite enabling environments for their empowerment.
    • Proposals on Research and Development for technological solutionswith multidisciplinary approach to improve the quality of life of Elderly population and Divyangjan and in making them self sufficient are considered for financial assistance under this programme.
    • Latest Tools and Devices to tackle Covid-19:
    • e-Tool:
    • It has been developed byRajalakshmi Engineering College, Chennai. It aims to create awareness and impart health and hygiene related information along with education and entertainment through tablets and mobiles.
    • It is expected to overcome loneliness of the persons with intellectual disabilities, due to Covid-19 pandemic.
    • Wearable sensor device:
    • It is a band which has been developed by PSG College of Technology, Coimbatoreto remotely monitor the activities of Elderly and Divyangjan staying alone or those who happen to be under quarantine or isolation wards.
    • The device will help the elderly to get outcomes regarding the improvement in muscle strength, flexibility and endurance without physical interventions from doctors and physiotherapists.


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