Economy This Week (18th June to 24th June 2022)

Economy is an important part of the UPSC prelims and mains exams; this series titled ‘Economy This Week’ has been initiated to address the need to read and analyse economic articles in various business-related newspapers. The round-up of the Economy/Business section news for 18th June to 24th June 2022 is given below. Business news is essential for IAS exam preparation.

TABLE OF CONTENTS

1. WTO – 12th Ministerial Conference

2. Virtual digital assets - norms laid out for tax deduction

3. PM launches NIRYAT information portal

4. With assam on board, ONORC covers all states

5. States have cancelled 4.5 Cr ration card

6. RBI puts a stop to credit lines on prepaid instruments

7. Scheme to resolve MSME bankruptcies finds few takers

8. Telco PLI extended

1. WTO – 12th Ministerial Conference (TH 20/6/22)

• Geneva Package
• Ensuring food security
• The negotiators could not arrive at agreement over permissible public stockholding threshold for domestic food security, domestic support to agriculture, cotton, and market access
• According subsidies to the fisheries sector
• Subsidies to those engaged in illegal, unreported, unregulated fishing will be eliminated (only exception will be when they are deemed essential to rebuild them to build to a biologically sustainable level)
• There will be no limitation on subsidies granted or maintained by developing or least developed countries for fishing within their exclusive economic zones 
• Continuing moratoriums relevant to e-commerce
• The current moratorium on not imposing customs duties on electronic transmission (ET) will be extended till MC13 (December 2023)
• Over 100 countries (105) have sought an extension and India and South Africa are in opposition 
• Agreements on relaxing patent regulations to achieve global vaccine equity

2.Virtual digital assets – norms laid out for tax deduction (IE 23/6/22)

• The CBDT has issued guidelines on the TDS applicable on the Virtual Digital Assets (VDAs) 
• If the value of transactions exceeds ₹ 10000 in a year then a TDS of 1% will be levied on transfers of VDAs. This has been introduced by introducing section 194S in the Income Tax Act 2022 
• The above provision will become effective starting 1st July 2022 
• The guidelines also have clarified regarding who would be having the responsibility of making the tax deductions    
• The CBDT has defined four primary VDAs – bitcoin, ether, USD Tether and USD Coin – for the purpose of tax deduction  

3.PM launches NIRYAT information portal (BL 27/6/22)

• The National Import – Export for Yearly Analysis of Trade (NIRYAT) portal has been launched by the govt
  • The importers and exporters can get all the necessary information related to foreign trade will be provided in real time 
  • Information regarding more than 30 commodity groups exported to more than 200 countries will be available
  • Very soon district wise information will also be available
• India’s global exports reached $448 bn against the target of $400 bn for FY22    

4.With assam on board, ONORC covers all states (BL 22/6/22)

• With Assam joining ONORC, this programme is available all across India
• Government launched the initiative in august 2019 
• Around 71 Cr portable transactions (43.6 Cr under NFSA and 27.8 Cr under PMGKAY) have been recorded under ONORC

5.States have cancelled 4.5 Cr ration card (BL 27/6/22)

• All the states and UTs have cancelled 4.5 Cr ration cards in last eight years since 2014 
• This has not reduced offtake of grains since many numbers also get added – there are 19.5 Cr ration cards in operation covering about 80 Cr population under NFSA 
• The central govt does not have any criteria for exclusion and the states have their own norms for exclusion 
  • The deletion of cards is due to detection of ineligible ration cards, migration of beneficiaries, death of beneficiaries etc 
  • Some of the exclusion criteria used (by Uttar Pradesh are)

• If any of the beneficiary has a gun license 
• If the beneficiaries are income tax payers 
• Having a four wheeler / tractor / harvester, or has more than 5 acres of irrigated land in possession of any family member or has a generator of 5 KV 

6.RBI puts a stop to credit lines on prepaid instruments (BL 22/6/22)

• RBI has published notification disallowing non-bank pre-paid instruments (PPIs) from loading their instruments through credit lines. The non-compliance of this will be lead to penal action under provisions of Payment and Settlement Systems Act 2007 
• The fintech companies offering buy now pay later schemes enter into a tie up with banks/NBFCs and allow the PPIs to be loaded with credit lines 
• PPIs can be loaded/reloaded by cash, debit to a bank account, credit and debit cards 
• As per RBI there are around 35 non-bank PPI issuers

7.Scheme to resolve MSME bankruptcies finds few takers (LM 23/6/22)

• Govt launched bankruptcy scheme – Prepack – for small businesses from April last year 
  • Under this large part of the of the bankruptcy can be conducted out of the court 
  • The shareholders and creditors can arrive at a resolution plan and then approach NCLT for approval  
  • Once the case has been admitted the existing management will not be suspended 
  • Bankruptcy could be triggered in case of non-payment of ₹ 10 lakh (in case of bigger companies it will be ₹ 1 Cr) 
• However there has been a poor response to this scheme. Only two firms have been admitted under it in FY22 
• The lower adoption is on account of 
  • Liquidity boosting measures adopted by the govt
• There is a case for extending the scheme to larger companies 
  • • Quick process 
    • Prevent asset erosion

  8.Telco PLI extended (IE 21/6/22)

• The department of telecommunications has 
  • Extended the PLI scheme for the telecom by 1 year 
  • Amended the scheme to raise the incentives by 1% 
• The design led manufacturing scheme is open for both MSEs and non-MSMEs (global and domestic)
• The applications of design led manufacturing will be given priority over other manufacturers 
• The scheme requires an investment threshold of ₹ 10 Cr for MSMEs and ₹ 100 Cr for non-MSMEs 
• The incentives will be given based on the incremental sales and range between 4 to 7% for different categories 
• The MSMEs will get an additional 1% incentives in 1st, 2nd and 3rd years

Economy This Week (18th June to 24th June 2022):- Download PDF Here

Download the PPT of the video lecture from the link below:

Economy This Week (18th June to 24th June 2022):- Download PPT Here