Insights Daily Current Events, 06 November 2015
Paper 2 Topic: Infrastructure energy.
Cabinet clears financial ‘reform’ package for discoms
The Union Cabinet has approved a ‘reform’ package for loss-making electricity utilities. The scheme is named Ujwal Discom Assurance Yojana (UDAY).
- The scheme is aimed at providing financial turnaround and revival of Power Distribution companies (DISCOMs). It also ensures a sustainable permanent solution to the problem.
- The scheme assures the rise of vibrant and efficient DISCOMs through a permanent resolution of past as well as potential future issues of the sector.
The scheme empowers DISCOMs with the opportunity to break even in the next 2-3 years through the following four initiatives:
- Improving operational efficiencies of DISCOMs.
- Reduction of cost of power.
- Reduction in interest cost of DISCOMs.
- Enforcing financial discipline on DISCOMs through alignment with State finances.
Salient features of the scheme:
- The scheme allows DISCOMS in few selected states to convert their debt into state bonds. According to the scheme, states will take over 75% of DISCOM debt as on 30 September 2015 over two years – 50% of DISCOM debt will be taken over in 2015-16 and 25% in 2016-17.
- States will issue non-SLR including SDL bonds in the market or directly to the respective banks / Financial Institutions (FIs) holding the DISCOM debt to the appropriate extent.
- Government of India will not include the debt taken over by the States as per the scheme in the calculation of fiscal deficit of respective States in the financial years 2015-16 and 2016-17.
- DISCOM debt not taken over by the State shall be converted by the Banks / FIs into loans or bonds with interest rate not more than the bank’s base rate plus 0.1%.
- States accepting UDAY and performing as per operational milestones will be given additional / priority funding through Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY),Integrated Power Development Scheme (IPDS), Power Sector Development Fund (PSDF) or other such schemes of Ministry of Power and Ministry of New and Renewable Energy.
- States not meeting the operational milestones will be liable to forfeit their claim on IPDS and DDUGJY grants.
- UDAY is optional for all States. However, States are encouraged to take the benefit at the earliest as benefits are dependent on the performance.
Paper 2 Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
MoU between India and Belgium for Energy
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved a Memorandum of Understanding which has been signed between Indian and Belgian government authorities at the Federal and regional level for energy.
Objectives of this memorandum:
- To establish the basis for a cooperative institutional relationship.
- To encourage and promote technical bilateral cooperation on new and renewable energy issues on the basis of mutual benefit, equality and reciprocity.
- The MoU will focus on development of new and renewable energy technologies in the field of Wind energy, Biomass, Solar (thermal and photovoltaic), Smart grids, Geothermal energy, Marine energy, contribution of renewables to diversification of supply and energy security, and any other mutually agreed areas.
- The Memorandum of Understanding will help in strengthening bilateral cooperation between the two countries.
Paper 3 Topic: Cyber Security.
Asia’s foremost Information Security Conference: Ground Zero Summit, 2015
The Union Home Minister, Rajnath Singh recently inaugurated the Asia’s foremost Information Security Conference: Ground Zero Summit 2015.
Theme: The theme for the Summit is Digital India – ‘Securing Digital India’.
Aim of the summit: The summit is being organized to deliberate upon various issues related to cyber security challenges emerging due to the latest technological developments.
- The summit is being organized by the Indian Infosec Consortium (ICC), a not-for-profit organization formed by leading cyber security professionals of the country.
- With the events like Ground Zero Summit and formation of National Cyber Registry, ICC wants to consolidate the cyber security resources in the country and protect its cyberspace.
- The summit is the collaborative platform in Asia for cyber security experts and researchers to address emerging cyber security challenges and demonstrate cutting-edge technologies.
- It is a platform in the region providing opportunities to establish and strengthen relationships between the cyber security community and corporate, PSUs, Government and its defense establishments.
- The summit will showcase indigenous cyber security products and technologies and Make in India Exhibition of Indian cyber security start-ups.
- Discussions on various cyber crime case studies, trends and investigation challenges from the Law Enforcement perspective in India, will also be held.
Paper 3 Topic: Mobilization of resources.
PM unveils 3 gold schemes
Prime Minister Narendra Modi recently unveiled three gold-related schemes, namely the Gold Monetisation Scheme, Sovereign Gold Bond Scheme and Gold Coin and Bullion Scheme.
Important features of the Gold monetisation scheme:
- The scheme will replace the prevailing gold deposit scheme that started in 1999.
- Deposit limit: Under this scheme the minimum deposit at any one time shall be raw gold (bars, coins, jewellery excluding stones and other metals) equivalent to 30 grams of gold of 995 fineness. There is no maximum limit for deposit under the scheme.
- Time period: The designated banks will accept gold deposits under the short term (1-3 years) Bank Deposit (STBD) as well as medium (5-7 years) and long (12-15 years) term government deposit schemes.
- All scheduled commercial banks are allowed to implement this scheme and are also free to fix interest rates.
- Depositors can also make premature withdrawal of their deposits. It will be subject to a minimum lock-in period and penalty to be determined by individual banks.
- The existing deposits under the gold deposit scheme, 1999, will be allowed to run until maturity.
Gold sovereign bond scheme:
- The Reserve Bank of India (RBI) will issue these bonds on behalf of the central government.
- The gold bonds will be denominated in multiples of gram(s) of gold with a basic unit of one gram while the minimum investment limit is two grams.
- The maximum subscription is 500 grams per person per fiscal (April-March) and for joint holders, the limit will be applied on the first holder.
- As per the scheme, the gold bonds will be sold only to resident Indian entities including individuals, Hindu undivided families, trusts, universities, and charitable institutions.
- The bond tenure will be eight years with exit option beginning the fifth year onwards. They will also be tradable in the bourses.
- Bonds can also be used as collateral for loans.
India gold coin and bullion scheme:
- The gold coin and gold bullion schemes are part of the gold monetisation programme.
- The coin will be the first ever national gold coin and will bear Ashok Chakra.
- Initially, the coins will be available in denominations of 5 and 10 grams. A 20 gram bullion bar will also be launched.
- As many as 15,000 coins of 5 gm, 20,000 coins of 10 gm and 3,750 bullion bars will be made available through Metals and Minerals Trading Corporations (MMTC) outlets.