News 1: Govt.’s SRI Fund commits ₹5,000 cr. to aid MSMEs

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Background

Government-backed Self Reliant India Fund (SRIF) said it has committed more than ₹5,000 crore to help small businesses with growth capital in its first year of operations.

The fund, started as part of the government’s ‘Atmanirbhar Bharat’ programme, has provided approvals to 38 ‘daughter funds’ with a commitment amount of more than ₹5,000 crore.

Self-Reliant India Fund

Why was it needed?

MSME Sector is very important for the Indian economy in terms of contribution to GDP and employment generation.

India has over 6 Crores MSMEs across manufacturing and services sectors which employ over 11 Crores people.

However, one of the biggest challenges faced by MSMEs in India is the inadequate availability of capital.

MSMEs have limited access to external equity primarily because only a handful of players provide early-stage equity capital.

Even if the equity is made available, the uptake would remain low due to:

• Legal Structure of MSMEs prevents infusion of external equity;
• Smaller investment size per enterprise tends to increase transaction cost and management costs for equity investors making this segment relatively less attractive;
• Information asymmetry between promoters, investors and other stakeholders;
• Entrepreneur’s concern regarding control and management;
• Low probability of non-linear return discouraging the Venture Capital ( VC) funding.

Objective

SRI Fund, in the form of Category II Alternative Investment Fund (AIF), will be oriented towards providing funding support to the Daughter Funds for onward provision to MSMEs as growth capital, in the form of equity or quasi-equity.

Alternate Investment Fund

It refers to any privately pooled investment fund, (whether from Indian or foreign sources), in the form of a trust or a company or a body corporate or a Limited Liability Partnership (LLP). Hence, in India, AIFs are private funds which are otherwise not coming under the jurisdiction of any regulatory agency in India.

Alternative investment funds refer to funds that include hedge funds, venture capital, private equity, angel funds, real estate, commodities, collectibles, structured products, etc. Alternative investment funds are an alternative to traditional investment options (stocks, bonds, and cash).

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News 2: Make – II Project

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Background

The Army has approved five Project Sanction Orders (PSOs) for the development of niche technology by the Indian industry under the Make-II route of defence procurement.

It includes high-frequency man-packed software defined radios, drone kill systems, infantry training weapon simulator, medium-range precision kill systems and 155mm terminally guided munitions.

Make – II Project

The Make-II projects are essentially industry funded, involving design, development and innovative solutions by Indian vendors for development of prototypes. An assurance of order is given after successful prototype development

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News 3: The Harvest of Polluted Air

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Background

The haze and smoke over Delhi, which has become an annual event for about three weeks in October-November, has triggered a temporary ban on construction activities and the movement of trucks and diesel four-wheelers that do not comply with BS-VI norms.

Delhi pollution: Is agricultural burning the main culprit?

At this time of the year, the burning of agricultural waste in Punjab and Haryana is indeed the dominant reason for the smoke and haze over Delhi.

The particulate matter from the burning contributes 30-40% of the PM2.5 concentrations in Delhi’s air during this time. It is the single largest source of PM2.5 levels on most days during this period.

However, the weather plays a critical role as well — a 30-40% rise in pollutants at any other time of the year would not cause the same impact. Agricultural waste burning in Punjab and Haryana happens in the months of May and June as well, although at a smaller scale.

At that time, it accounts for about 15-20% of PM2.5 concentrations in Delhi’s air. But the air quality over the capital hardly ever becomes this bad.

The reason is the weather, or rather, heat. Hotter air rises higher above the surface, and takes the pollutants along with it. The polluting particles are lifted 2-3 km above the surface or even higher, before getting dispersed.

During October-November, however, the air is not that hot. The pollutants are trapped and tend to get concentrated at lower levels of the atmosphere, resulting in the smoke and haze situation that is being witnessed now.

But why is agricultural waste burned?

This waste is the remains of the paddy crop after it has been harvested. This kind of burning is not specific only to Punjab or Haryana. However, the scale of burning in these states is much bigger than elsewhere.

Even in these states, this practice is relatively new. Even 10 years ago, the crop-burning problem was not this acute.

The burning is necessitated by the need to prepare the fields for the next crop in a very short window of time. Due to a slight shift in the cropping pattern in these states, there is now very little time between the harvesting of one crop and the planting of the next crop.

The traditional method of manually uprooting, or cutting, the stumps of the previous crop is time-consuming, and can delay the sowing of the next crop. So farmers resort to the easier option of burning these remains.

So is there no remedy for this situation?

Several solutions have been suggested, and are being tried. These include suggestions to change the crop cycle, deployment of mechanised equipment for harvesting that would render burning unnecessary, and conversion of this waste into something more useful, like a source of energy, which can become an incentive for not burning.

Hundreds of crores have been allocated in the last few years to buy the necessary equipment or to try out the alternative methods of dealing with this problem. But clearly, these equipment and methods have not been deployed effectively.

Delhi: Would the ban on construction and diesel vehicles work?

Construction has a small contribution to PM2.5 concentration. The particles released from these activities are usually larger, and add to PM10 concentrations. Banning of construction, therefore, is unlikely to have any significant impact on the prevailing situation.

Diesel vehicles, particularly older trucks, are indeed important contributors to high PM2.5 levels. And a ban on their movement can help in improving the situation somewhat.

However trucks, which are the biggest generators of pollutants in the diesel vehicle segment, are not allowed to move inside Delhi during the day in any case. In fact, the movement of trucks only at night results in a significant variation in the PM2.5 levels between day and night times.

UPSC Mains 2015 Question GS Paper – I

Mumbai, Delhi and Kolkata are the three mega cities of the country but the air pollution is much more serious problem in Delhi as compared to the other two. Why is this so?

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News 4: Governors and their removal

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Background

The DMK’s call for removal comes when Governors in several non-BJP-ruled states, including Kerala and Punjab, have expressed disagreements with the government on various issues.

Governor’s appointment, removal

Under Article 155 and 156 of the Constitution, a Governor is appointed by the President and holds office “during the pleasure of the President”. If this pleasure is withdrawn before completion of the five-year term, the Governor has to step down.

As the President works on the aid and advice of the Prime Minister and the council of ministers, in effect, the Governor can be appointed and removed by the central government.

Thus, a Governor is a representative of the Union government in states. Article 163 of the Constitution says the Governor will normally be aided and advised by the Council of Ministers except in those functions which require his discretion.

While the Governor’s duties and responsibilities lie in a particular state, there is no provision for impeaching the Governor.

Governor-state relations

Although envisaged as an apolitical head who must act on the advice of the council of ministers, the Governor enjoys certain powers granted under the Constitution, such as giving or withholding assent to a Bill passed by the state legislature, assenting to the convening of the state legislative assembly, determining the time needed for a party to prove its majority, and which party must be called first do so, generally after a hung verdict in an election.

All these powers have been flashpoints recently — to cite two instances, when the Maharashtra Governor had Devendra Fadnavis sworn in as the chief minister in 2019 amid a hung verdict, only for his government to fall in 80 hours; and when the Punjab Governor in September refused to allow a special session of the Assembly for a vote of confidence in the AAP government.

What happens in case of disagreements

There are no provisions laid down in the Constitution for the manner in which the Governor and the state must engage publicly when there is a difference of opinion. The management of differences has traditionally been guided by respect for each other’s boundaries.

What courts have said

Since the Governor holds office “on the pleasure of the President”, questions have been raised time and again on whether the Governor has any security of tenure, and if the President is obligated to show reasons for recalling a Governor.

In Surya Narain Choudhary vs Union of India (1981), the Rajasthan High Court held that the pleasure of the President was not justiciable, the Governor had no security of tenure and can be removed at any time by the President withdrawing pleasure.

In BP Singhal vs Union of India (2010), the Supreme Court elaborated on the pleasure doctrine. It upheld that “no limitations or restrictions are placed on the ‘at pleasure’ doctrine”, but that “does not dispense with the need for a cause for withdrawal of the pleasure”.

This ruling had come in response to a PIL filed by BJP leader BP Singhal, who had challenged the removal of the Governors of Uttar Pradesh, Gujarat, Haryana and Goa on May 2, 2004 by the President on the advice of the newly formed UPA government.

In its judgment, the Bench, while noting that the President can remove the Governor from office “at any time without assigning any reason and without giving any opportunity to show cause”, the power to remove can’t be exercised in an “arbitrary, capricious or unreasonable manner”.

The Bench held that the court will presume that the President had “compelling and valid” reasons for the removal but if a sacked Governor comes to the court, the Centre will have to justify its decision.

What various commissions have said

Over the years, several panels and commissions have recommended reforms in how Governors are appointed and how they function, such as the Administrative Reforms Commission of 1968, the Sarkaria Commission of 1988, and the National Commission to Review the Working of the Constitution, headed by retired CJI M N Venkachaliah, in 2001.

The Sarkaria Commission had recommended that Governors are not sacked before completing their five-year tenure, except in “rare and compelling” circumstances. Recommendations have also been made for a provision to impeach the Governor by the Assembly. However, none of these have been implemented.

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Other important news

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China’s home-grown Beidou satellite system eyes global footprint

China on Friday outlined plans to further expand the global reach of its home-grown Beidou satellite navigation system, billed as its alternative to the U.S.’s Global Positioning System (GPS).

Beijing has, since 2020, also made an outreach to South Asia and is already working, or in discussion with, a number of countries in the region, including Pakistan, Nepal, Bangladesh and Sri Lanka, over adopting the Beidou satellite (BDS) navigation system.

Its application in China, now included use in guiding drones, autonomous cars, in agriculture and forestry, as well as launching with Chinese mobile phone companies, using Chinese chips, satellite-powered messaging for smartphones that provides for connectivity in remote areas even in the absence of ground reception.

SEWA

Elaben Bhatt, a legendary figure in post-Independent India pioneered SEWA (Self Employed Women’s Association) was one of the most innovative and successful experiments in India in the field of social development.

SEWA empowered women in India in the comprehensive sense of the term on a scale never witnessed before.

It simultaneously provided employment to women and promoted cooperative production, consumption and marketing of textiles which constituted the core of India’s industrialisation. It also decisively influenced the course of trade unionism and labour movement in India.

Foreign Exchange Reserve

Foreign Exchange reserves or Forex reserves are assets such as foreign currencies, gold reserves, treasury bills, etc retained by a central bank or other monetary authority that checks the balance payments and influences the foreign exchange rate of its currency and maintains stability in financial markets.

RBI is the custodian of the Foreign exchange reserves in India. In 2020, India’s forex reserves crossed the $500-billion mark for the first time in history due to higher foreign direct investment, foreign institutional investment. Low oil prices also helped reduce outflows. This gave India an adequate cushion to combat external shocks.

 The biggest contributor to this reserve is foreign currency assets followed by the gold, SDR, and reserve with the International Monetary Fund.

Purpose of the Foreign Exchange Reserve:

1. The most significant objective behind this is to ensure that RBI has backup funds if their national currency rapidly devalues or becomes altogether insolvent.
2. If the value of the Rupee decreases due to an increase in demand of the foreign currency then RBI sells the dollar in the Indian money market so that depreciation of the Indian currency can be checked.
3. A country with a good stock of forex has a good image at the international level because the trading countries can be sure about their payments.
4. A good forex reserve helps in attracting foreign trade and earns a good reputation in trading partners.

Mathura-Vrindavan aims to become a carbon neutral tourist destination by 2041

Mathura-Vrindavan, one of India’s largest pilgrimage centres, aims to become a “net zero carbon emission” tourist destination by 2041, Uttar Pradesh government officials have told The Hindu.

This means that tourist vehicles will be banned from the entire Braj region, which includes famous pilgrim centres such as Vrindavan and Krishna Janmabhoomi. Instead, only electric vehicles used as public transport will be allowed into the area.

All 252 waterbodies and 24 forests in the area will also be revived, officials privy to the U.P. government’s draft redevelopment plan said.

According to the plan, the Braj region’s annual pilgrim-tourist footfall is expected to multiply from the current level of 2.3 crore to six crore by 2041.

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