IASCLUB PIB News Summary : 08 July 2019

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Maintenance of CAR by Banks

As per RBI guidelines, banks are required to maintain a minimum Capital to Risk-weighted Assets (CRAR) of 9% on an ongoing basis.

  • As per RBI’s Financial Stability Report (FSR) the CRAR, for Scheduled Commercial Banks (which include both PSBs and Private Sector Banks) and PSBs was 14.3% and 12.2% respectively.
  • As per FSR of June 2019, growth of gross non-performing assets (NPAs) has decelerated across all bank groups, including PSBs, and further, due to the increased pace of recognition of NPAs, NPAs in the banking system peaked in March 2018 and have since declined to 9.3% in March 2019, signalling a turnaround in the NPA cycle.
  • In addition, under the baseline scenario of macro-stress tests for credit, FSR has projected further decrease in the gross NPA ratio of all Scheduled Commercial Banks to 9.0% by March 2020, driven by a decline in the gross NPA ratios of PSBs” from 12.6% to 12.0% over the same period.
  • As per the Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999, credit rating agencies rate securities offered by way of public or rights issue. Accordingly, credit rating agencies rate securities and not industry.

Schemes for Development of MSMEs

The Ministry of Micro, Small and Medium Enterprises (MSME) implements various schemes and programmes for promotion and development of Micro, Small and Medium Enterprises (MSMEs) across the country.

  • These include the schemes/programmes such as Prime Minister’s Employment Generation Programme (PMEGP), Scheme of Fund for Regeneration of Traditional Industries (SFURTI), A Scheme for Promoting Innovation, Rural Industry and Entrepreneurship (ASPIRE), Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme (CLCSS), Micro and Small Enterprises – Cluster Development Programme (MSE-CDP), etc.
  • The Government has taken several measures to promote access to finance. These include:-
  • Launch of 59 minute loan portal to enable easy and prompt access to credit for MSMEs.
  • 2% interest subvention for GST registered MSMEs.
  • Increase in interest rebate from 3% to 5% for exporters who receive loans in the pre-shipment and post-shipment period.
  • Companies with turnover of more than Rs.500 crore to be compulsorily brought on the Trade Receivables e-Discounting System (TReDS) to enable entrepreneurs to access credit based on receivables.
  • The Corpus of Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE) Scheme has been enhanced from Rs.2500 crore to Rs.7500 crore. The eligible loan limit under the CGTMSE has also been enhanced from Rs. 1 crore to Rs. 2 crore.
  • A provision of second loan of upto Rs. 1 crore has been introduced under Prime Minister’s Employment Generation Programme (PMEGP) for well performing units.
  • The Ministry of MSME implements Micro and Small Enterprises- Cluster Development Programme (MSE-CDP) for creation and upgradation of infrastructural facilities in the new/existing industrial areas/clusters of MSEs.
  • The schemes implemented by Ministry of MSME are Central Sector Schemes. Therefore, funds are not allocated State-wise. The budget allocation (Budget Estimate) of the Ministry of MSME during the financial year 2019-20 for implementing all the schemes throughout the country including the State of Andhra Pradesh is Rs 7011.29 crore.

Ethanol in Petrol

  • Government is implementing Ethanol Blended Petrol (EBP) Programme through Oil Marketing Companies (OMCs).
  • At present, Public Sector OMCs are selling upto 10% ethanol blended petrol. Government has notified the National Policy on Biofuels-2018 which indicates a target of 20% blending of ethanol in petrol by 2030. Government has fixed prices for ethanol procurement under EBP Programme.
  • Subsequent to amendment in Industries (Development & Regulation) Act, 1951, Central Government has been regularly interacting with the State/ UT Governments for implementing the amended provisions.
  • Till date, twelve States, viz., Karnataka, Goa, Maharashtra, Gujarat, Bihar, Chhattisgarh, Tamil Nadu, Andhra Pradesh, Punjab, Madhya Pradesh, Himachal Pradesh and Haryana have implemented the amended provisions.

Kaushal Yuva Samwaad

  • Commemorating World Youth Skills Day on July 15, 2019 and celebrating 4th Anniversary of the Skill India Mission, the Ministry of Skill Development & Entrepreneurship has announced launch of “Kaushal Yuva Samwaad” (A Youth Dialogue).
  • To be organized between 8th and 10th July 2019, Kaushal Yuva Samwaad is aimed at creating an open dialogue with the youth across all skill training centres to hear their views, ideas, opportunities and recommendations which could help the Ministry in scaling the existing programs and improve overall efficiency of its projects.
  • Kaushal Yuva Samwaad is being organized across all Skill India training centres, namely, Pradhan Mantri Kaushal Kendras (PMKK), Industrial Training Institutes (ITIs), Polytechnics, Institutes under Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Jan Shikshan Sansthans, DDU-GKY Centres and other fee-based training centres across the country.
  • Kaushal Yuva Samvaad will be the platform to discuss potential issues and solutions from the candidates’ perspective and will give us the perspective to match aspirations of the youth with the offerings of Skill India.”
  • Selected candidates will be invited to participate in an open dialogue with the Hon’ble Ministers of Skill Development & Entrepreneurship on July 15, 2019 at Vigyan Bhawan in New Delhi.
  • Kaushal Yuva Samwaad aims to create a dialogue between the youth and the Ministry.  It is intended to identify and rectify the gaps so that all skill development programs are aligned to the current demands and help in creating a skilled workforce for the future.
  • To raise awareness about the importance of investing in youth skills development, the United Nations General Assembly commemorates July 15th every year, as World Youth Skills Day (WYSD). This UN designated day seeks to generate greater awareness of and discussion on the importance of technical, vocational education, and training and development of marketable skills relevant to both local and global economies.
  • The National Skill Development Mission (Skill India Mission), launched on July 15, 2015 under the esteemed guidance of Hon’ble Prime Minister Shri Narendra Modi, has been steadily making progress.
  • Nearly One Crore youth are being presently imparted skills training annually under various programs of the Government through Skill India Mission. The mission also envisages convergence, coordination and harmonization of the fragmented skilling efforts of various Ministries in Government of India and other key stakeholders like State Government, Industry, Training ecosystem etc. through the instruments of Common norms, implementation of National Skills Qualification Framework (NSQF), data integrations through the Skill India Portal and quality assurance through the SMART (Skill Management and Accreditation of Training Centre) portal. India is a young nation and a skilled workforce will be able to cater to not only the market demand within the country but also the global market.

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