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Current Affairs

Digitally-Enabled mass sevices is the future

  • In the last 250 years the world has seen 3 INDUSTRIAL REVOLUTIONS-
  • Steam engine in the 19th century in England.
    • Mass manufacturing in the mid 20th in USA.
    • Internet in the late 20th century in China.
    • Mass services will rule in future.
    • Ford Motor Company launched Model-T in 1908, before Model-T cars were items of luxury.
    • Model-T was being sold for $260 less than half the average annual wages in the US.
    • In 1914 Ford’s 13,000 employees produced 3,00,000 cars as compare to other 299 companies with 66,000 employees produced only 2,80,000 vehicles.
    • The industry volume tripled in just 6 years as price came down.
    • The cost of manufactured goods fell between 3-10 times, increasing mass consumption of products, raising competition and driving new investments.
    • This economic cycle was supported by a facilitative regulatory regime to make the markets more efficient and as result it created hundred of millions of new jobs.

Advantages of Digital Technologies-

  • It drives productivity
  • Breaking down the service into small consumption offers.
  • Integration of physical and digital assets.
  • Spur innovation.

To make this happen we have to solve three pieces of the Jigsaw puzzle-

The huge unmet demand for services and a decent starting position in service sectors.

  • We need world -class public digital infrastructure as the backbone of mass manufacturing industry
  • Facilitating regulatory regime that liberalises the services sector, encourages competition and allow more efficient markets to develop.
  • In addition, we need policy interventions in several key areas.
  • First is setting standards for data flows which are the backbone of any service offering in terms of both interoperability and privacy.
  • Secondly, a regulator is required which has the technical skills and understanding to develop and regulate the revenue sharing arrangements between partners in the digital ecosystem to create an efficient market.
  • Lastly, a public policy case can be made for creating societal digital platforms like education and health which are offered for free for the development of business solutions by entrepreneurs.

India’s February manufacturing activity hits 14-month high

  • According to the monthly survey, the country’s manufacturing sector performance strengthened in February and touched a 14-month high driven by acceleration in sales, output and employment.
  • The Nikkei India manufacturing purchasing manager’s index rose to 54.3 in February from 53.9 in January. This is the 19th consecutive month that the manufacturing PMI remained above the 50 point mark, a print above 50 means expansion and below denotes contraction.

Potential of 5G

  • “By 2023 there will be a staggering 9.1 billion mobile subscription” World Economic Forum.
  • “By 2020, connected mobile devices will produce 30.6 exabytes per month and annual global mobile data traffic will reach 366.8 exabytes” CISCO.
  • 5G is designed to meet this demand. It not only represents a generational leap in connectivity speeds, also introduce lower latency and the ability to connect more devices at once.
  • Despite the many recognized advantages of 5G, mobile network operators are still looking for concrete evidence of return on investment (ROI). Infact, it will likely amount to a collective investment of billions of dollar in new network equipment, licences and deployment.
  • With Industry 4.0, manufacturers are becoming more efficient through the application of automation and data exchange to their existing factory processes to enable better integrated workflows and smarter manufacturing.
  • For instance, production robots now have sensors or software that send information to remote teams; some apps can send alerts on defects or damaged goods; and other apps can help track working schedules of factory workers.
  • 5G plays a vital role in this transformative process, especially as the use of AR and VR applications continues to grow in manufacturing to support the realization of manufacturers’ industry 4.0 goals.
  • The opportunity lies in more than just providing connectivity.
  • Mobile network operators can create partnerships with broadcasters and sports organizations to deliver entertainment services directly to customers through their self-service applications. They are able to compete with wireline, satellite and cable companies, offering new revenue streams and faster rol.
  • Last arguably the most 5G-centric use case is autonomous driving (level four and above)
  • 5G will offer the connectivity and speed needed to deliver vast amounts of data to one another as well as other objects simultaneously.
  • If various parties, including the government and network equipment companies,work together to identify commercially viable and desirable customer solutions,5G can fulfil the vast potential ascribed to it these past years.

Wistron to make Apple products in India

  • Wistron currently makes cheaper apple phones in India. The information technology ministry has approved contract manufacturer Wistron’s Rs 5,000-crore plan to make high-end Apple devices, it will give a big push to the government’s Make in India initiative.
  • “Openness of India’s democratic polity, where creativity is recognised and respected, add its own incentive, we gave little incentive and you saw how many people came”, Ravi Shankar Prasad.
  • Ravi Shankar Prasad said India offers three advantages- a burgeoning workforce, English Fluency, Skilled workers in plenty and the fastest growing smartphone market in the world. India is known for its software services- we want it to become a big hub for products.

Cabinet: Rs 15,500-cr loan for sugar mills

  • The Cabinet Committee on Economic Affairs (CCEA) on Thursday cleared an extra soft loan of Rs 15,500 crore to boost ethanol capacity in sugar mills. The government will bear an expenditure of Rs 3,355 crore as interest subvention, includes a soft loan of Rs2,600 crore which will be provided to molasses-based standalone distilleries to augment capacity and set up new units.
  • In June 2018, the government announced a soft loan of Rs 4,400 crore and provided an interest subvention of Rs 1,332 crore to mills over five years. So far, the food ministry has approved 144 applications for a loan amount of Rs 6,000 crore, applications received were for over Rs 13,400 crore worth of soft loans.
  • “To augment ethanol capacity, the government has approved additional funds. The additional funds are part of the government’s measure to address the stress in the sugar sector. These additional funds will be in two categories- Rs 2,790 crore and Rs 565 crore,” Finance Minister Arun Jaitley told reporters after the Cabinet meeting. He said, adding that “they (mills) have some stress and outstanding dues. The government is trying to augment the income of mills”. Sugarcane dues have crossed Rs 20,000 crore till February of this marketing year (October-September).
  • The country is expected to cross 10 per cent blending with petrol. Ethanol doping in petrol would also help the country cut its oil imports.

Chinese factory-output growth slows to weakest

  • Chinese January-February industrial output slipped to a 17-year low and their investment picked up pace. Government boosted road and rail projects in a bid to avert a slowdown. Premier Li Keqiang last week announced hundreds of billions of dollars in additional tax cuts and infrastructure spending. China’s manufacturers are facing weaker sales at home and abroad, with exports hit by US tariffs on Chinese goods and cooling global demand. China is trying to engineer a construction boom to rekindle demand and kickstart the economy.

NCLAT on ArcelorMittal

  • Arcelor Mittal’s Rs.42,000 crore takeover bid for Essar Steel. According to Arcelor Mittal’s resolution proposal financial creditors should get Rs 41,987 and operational creditors Rs 214 crore.
  • Essar Steel directors had challenged Ahmedabad- bench of National Company Law Tribunal’s (NCLT) nod to global steel giant Arcelor Mittal and offer Rs 54,389 crore as it clears 100 percent outstanding. NCLAT said all operational creditors below Rs 1 crore should get 100 percent of the dues also the employees of Essar Steel, and also said Committee of Creditors (COC) cannot reserve 92 percent of the bid amount for financial for financial lenders and leave just 4 percent for operational creditors. Only 90% of 42,000 crore should be allowed for financial creditors. If COC doesn’t act to clarify in favour of operational creditors, NCLAT will exercise powers available to it, the judges said.

Essar Steel CoC meet

  • The lenders of Essar Steel ltd informed National Company Law Appellate Tribunal (NCLAT) that a meeting of the committee of creditors (CoC) of the debt-ridden firm is going on over distribution of Rs 42,000 crore offered by global steel major ArcelorMittal SA. A decision by the CoC on whether Standard Chartered Plc, an operational creditor, should get higher payout for its dues to Essar Steel would come by Friday, following which it adjourned the matter to 9 April for the next hearing.
  • “We have to see the outcome of the Committee of Creditors (CoC) meeting” said a two-member NCLAT bench headed by chairman justice S.J Mukhopadhaya.
  • NCLAT Ahmedabad had suggested a 85:15 distribution between the financial and operational creditors against the 90:10 distribution between them as proposed in the resolution plan. On 20th March in the last hearing. The NCLAT also had directed IBBI to share data over distribution of Funds among the financial and operational creditors in the resolution plans. The NCLAT was hearing a plea by Standard Chartered Bank, an operational creditor of the company, challenging the distribution of fund.

Essar Steel

  • Lenders to Essar Steel have decided to move the Supreme Court because National Company Law Appellate Tribunal (NCLAT) pressures them to pay unsecured financial creditors more than they are inclined to.

Land Leasing framework

  • PM-KISAN, a support to the agriculture sector is always a welcome move, however the initiative does not cover landless agricultural labourers and the sharecroppers/ tenants.
  • According to the agriculture census 2010-11 there are 138.35 million farm-holdings in India of which 92.8 million are marginal (<1 ha) and 24.8million are small (1-2 ha). Agricultural productivity and farm size are inversely related even though small and marginal farmers account for more than 85% of total farm holdings, their share in operational area is only 41.2% and about 1.5-2 million new marginal and small farmers are added every year due to law of inheritance.
  • Agricultural landless labourers, pastoralists, fisherman and sharecroppers / tenants / lessee cultivators equally contribute to agricultural growth and deserve special attention.
  • The land reform legislations in post- independence India consisted of redistribution of surplus land from the rich to the poor, abolition of intermediaries, security of tenure to tenants and consolidation of landholdings. Policies must raise land productivity through appropriate technologies and studies says there is direct linkages between tenure security and income security.
  • “Land lease should be viewed as an economic necessity, not more feudal agrarian structure NITI Aayog “. Land leading laws should be the highest priority of state governments. The committee on Doubling Farmers Income (DFI) of the Government of India has also recommended legislating the model Agricultural Land Leasing the model Agricultural Land Leasing Act (by NITI Aayog) to ensure private sector investments in agriculture. Another important aspect is ensuring effective modernisation and digitisation of land records also high resolution satellite imagery coupled with ground truthing has also been suggested for the survey operations.

Green transmission cables

  • The Power Ministry is likely to bring greener options of electricity transmission cables like aluminium to protect from ill-effects of lead- based equipment. A single kilometre of cable weighs about 20 tonne/km has lead content of almost 8 tonne/km with average life span of 25-30 years and once they are laid they are never dismantled. Aluminium-based cable sheaths are greener and cheaper alternative.
  • “240 million people globally are overexposed to lead poisoning” WHO.

In India’s growth story E-commerce to play vital role

  • “E-commerce has revolutionised the retail sector in India and play a major role in the country’s growth and results in more job opportunities, nobody can stop e-commerce now” said by Niti Aayog CEO Amitabh Kant. He noted that even if the consumer behaviour is changing the traditional retail and modern retail market will co-exist in India.
  • “India’s e-commerce market will expand $84 billion in 2021 from $24 billion in 2017” Deloitt India and Retail Association of India.

Govt takes stock of recoveries

  • Senior officials at the finance ministry and public sector banks held a meeting target to take stock of recoveries from stressed assets, mainly through the Insolvency and Bankruptcy Code (IBC). The focus of the meeting is in the progress made on recoveries so far, against the government’s FY19 target of Rs 1.8 lakh crore for public sector banks (PSBs), so far Rs 1.1 lakh crore is recovered. Once recovery from Essar Steel is made banks will be close to its target. The gross non-performing asset ratio in banking system is expected to ease for the first time in almost a decade to 10.3% by the end of 2018-19.

IOC & ONGC on interim dividend

  • Indian Oil Corp (IOC) declared a second interim dividend of Rs 1,412 crore for the current financial year to help the government meet its tax revenue target and the dividend will be credited to the account of the shareholders dispatched on or before April 10,2019. The government owns 53.88% stake in IOC and is grappling with a possible Rs 80,000 crore shortfall in tax revenues.

Sale of fibre assets built for BharatNet

  • With hardly any takers for the 2.5 Lakh kilometre fibre laid by the government under the BharatNet project because there could be duplication in areas where the fibre is laid, meaning telcos may be having their own fibre network in those areas. The department of telecommunications is now considering either selling the assets or leasing it out on long-term basis to private telcos. Telcos may be interested in only revenue generating areas to start with, which are urban centres.
  • The Universal Service Obligation Fund (USOF) has been asked to work out all the leasing options and outright sale of fibre assets and come back to TC within 10 days. Meanwhile, the telecom commission on Thursday also deliberated on the revival of BSNL and MTNL but no decision was taken.

Success story of Khadi

  • Khadi Gram Udyog Bhawan is in Connaught Place, New Delhi. The business of khadi is Rs 1 crore or more a day at least three times between October and November. In 2017-18 the sales worth a record of Rs 103 crore. In 2013-14 it was Rs 1,081 crore and in 2018-19 it is Rs 3,200 crore all-time high.
  • MSME ministry data shows sales stood at Rs 2,510 crore in 2017-18. As per First 4 years of Modi Govt. sales grew at an annual average of over 30%, against 6.7% in the previous 10 years. In future some 83,000 postmen across states will be clothed in khadi uniform.