Insights Daily Current Affairs, 29 Aug 2017
Topic: Important International institutions, agencies and fora, their structure, mandate.
Atomic fuel reserve in Kazakhstan to ensure supply
Kazakhstan is all set to open the world’s first Low Enriched Uranium Bank in Oskemen. The International Atomic Energy Agency launched the project in 2010.
- The bank will hold 90 tons of uranium—enough to power a large reactor for three years—and member states that withdraw from the bank will cover the cost of restocking.
- To ensure transport, the IAEA signed an agreement with Russia in 2015 to allow the material to travel through the country.
What is it for?
- The bank will serve as a source of last resort for low-enriched uranium when IAEA members are unable to either produce it or if it becomes unavailable on the international market for whatever reason.
- This function will help non-proliferation efforts. By providing uranium, it will disincentivise countries from developing their own uranium enrichment capacities—as even supposedly peaceful programs could see uranium enriched to a weapons-grade level.
- The bank seeks to ensure that in the event of an international crisis or similar circumstances, countries dependent on nuclear power would still have access to uranium.
The IAEA, which manages the reserve, has established a series of strict criteria for a member state to request and purchase uranium from the bank. These criteria include:
- First, there must be a disruption in supply “due to extraordinary circumstances” that would render the country in question unable to obtain fuel by the usual means.
- In addition, the IAEA must have certified that nuclear material has not been diverted by the country in the past and that the country complies with all safety measures.
- The buying country must commit to using uranium only to produce fuel, never for weapons, and not to enrich it or transfer it to third parties without the express consent of the IAEA.
- If these conditions are met and the uranium is purchased at the prevailing market price, the material will be introduced into special cylinders and transferred from northern Kazakhstan, where the bank is located, to a facility where LEU can be converted into fuel.
International Atomic Energy Agency (IAEA):
The IAEA is the world’s centre of cooperation in the nuclear field. It was set up as the world´s “Atoms for Peace” organization in 1957 within the United Nations family. It also seeks to promote the peaceful use of nuclear energy, and to inhibit its use for any military purpose, including nuclear weapons.
- It is not under direct control of the UN. Though established independently of the United Nations through its own international treaty, the IAEA Statute, the IAEA reports to both the United Nations General Assembly and Security Council.
- The Agency works with its Member States and multiple partners worldwide to promote safe, secure and peaceful nuclear technologies.
- The IAEA Secretariat is headquartered at the Vienna International Centre in Vienna, Austria.
- The IAEA serves as an intergovernmental forum for scientific and technical cooperation in the peaceful use of nuclear technology and nuclear power worldwide.
Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
NITI Aayog launches Ease of Doing Business Report
NITI Aayog has launched the Ease of Doing Business report based on an Enterprise Survey of 3,500 manufacturing firms across Indian states and union territories. The Enterprise Survey was conducted in recognition of the importance of monitoring the business environment in India.
- The survey has been conducted, along with the IDFC Institute, to assess the business regulations and enabling environment across India from firms’ perspective.
- The World Bank’s ‘Ease of Doing Business’ survey, which ranked India at 130, is confined to just two cities of Delhi and Mumbai whereas the NITI-IDFC Survey covers 3,276 manufacturing enterprises spread across India, including 141 earlystage firms and covering 23 manufacturing sectors.
- The report comes in the backdrop of the fact that India needs to create an environment that fosters globally competitive firms, capable of driving and sustaining economic growth.
The major findings of this report are as follows:
- Economic Performance and Reforms:
A higher level of economic activity and better performance on a range of doing business indicators are strongly correlated.
- Enterprises in high-growth states are significantly less likely to report major or very severe obstacles in land/ construction related approvals, environmental approvals and water and sanitation availability relative to enterprises in low-growth states.
- Quite remarkably, firms located in high-growth states also report 25% less power shortages in a typical month, compared to firms in low-growth states.
- Improvements over time:
Newer and younger firms report a more favorable business environment in that they take less time in obtaining approvals than older firms, suggesting an improvement in the business environment. Newer firms include startups established after 2014. In addition, young firms report that most regulatory processes do not constitute a major obstacle to their doing business.
- Informational gaps:
States need to enhance awareness of the steps being undertaken by them to the improve ease of doing business. The survey data show low awareness among enterprises about single window systems, instituted by states.
On average, only about 20% of start-ups, which are of recent origin, report using single window facilities introduced by state governments for setting up a business. Even among experts, only 41% have any knowledge of the existence of these facilities.
- Labour regulations are a bigger constraint for labour intensive firms:
Labour intensive sectors, that create proportionately more jobs per unit of capital investment, feel more constrained by labour related regulations. For example, compared to other enterprises, the enterprises in labour intensive sectors:
- 19% more likely to report that finding skilled workers is a major or very severe obstacle.
- 33% more likely to report that hiring contract labour is a major or very severe obstacle.
- Lose a greater number of days due to strikes and lockouts.
- Report higher average time for environmental approvals and longer power shortages.
- Barriers to firm growth:
The experience of firms with fewer employees is different from that of larger firms. In some cases, large firms face more regulatory barriers than smaller firms.
Firms with more than 100 employees took significantly longer to get necessary approvals than smaller firms with less than 10 employees. Large firms were also more likely to report that regulatory obstacles were a major impediment to doing business and that they incurred higher costs for getting approvals.
Flexible labour laws will allow firms to grow larger and reap economies of scale, raise productivity, create jobs and spur higher growth. Reforming labour laws and achieving greater flexibility in their implementation can greatly help enhance the ease of doing business. Reforms are also required in the power sectors, facilitatation of entry and exit of firms, levelplaying field for small and large firms, improvement in access to finance and informing firms about the improvements in ease of doing business norms.
Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
Consolidated FDI policy charter released
The government has brought out the latest edition of its consolidated FDI policy document, which is a compilation of the changes made in the past one year in a single document.
- It is an initiative aimed at ensuring greater ease of doing business in India and an investor-friendly climate to foreign investors so that the country attracts more FDI.
The past one year has seen FDI policy being liberalised in sectors including defence, civil aviation, construction and development, news broadcasting and private security agencies. These reforms have been incorporated in the document.
The document has spelt out “competent authority” for FDI approvals, delegating powers to mainly administrative departments in the absence of the Foreign Investment Promotion Board.
- While proposals relating to banking, mining, defence, broadcasting, civil aviation, telecoms, pharmaceuticals etc will have to be approved by administrative ministries, the DIPP will be the authority to clear proposals relating to areas including retail (single and multi-brand, and food).
- For proposals relating to financial services activities that are not regulated by any financial sector regulator or where only part of the financial services activity is regulated or where there is doubt regarding the regulatory oversight, the department of economic affairs will clear the proposals.
The document has formally clarified that restriction of 25% on sales of one vendor through an e-commerce marketplace will be computed on a financial year basis. The period to be considered for compliance wasn’t mentioned earlier.
Inclusion of start-ups:
For the first time, the document has included start-ups. As per the norms, start-ups can raise up to 100% of funds from Foreign Venture Capital Investors. Start-ups can issue equity or equity-linked instruments or debt instruments to FVCIs against receipt of foreign remittance.
Besides, a person resident outside India (other than citizens or entities of Pakistan and Bangladesh) will be permitted to purchase convertible notes issued by an Indian start-up company for an amount of ₹25 lakh or more in a single tranche. NRIs can also acquire convertible notes on non-repatriation basis.
Definition of venture capital fund:
The policy simplifies the definition of ‘venture capital fund’ defined FDI-linked performance conditions without diluting substance. So instead of complex definitions under the earlier FDI regime, ‘venture capital fund’ is now defined as a fund so registered under the Sebi (Venture Capital Funds) Regulations, 1996, while FDI-linked performance conditions are basically the sector-specific conditions for companies receiving foreign investment.
Sources: the hindu.
Topic: Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology and issues relating to intellectual property rights.
Gobindobhog rice gets geographical indication status
Gobindobhog rice, a speciality from Burdwan district of West Bengal, has got the geographical indication (GI) status.
Significance of this move:
As a result of getting the GI tag, as the certification is also called, rice from other regions or rice of other varieties cannot be branded as ‘Gobindobhog’. Hence, the marketability of the rice would be strengthened, for the local, national and international markets.
About Gobindobhog rice:
Gobindobhog is a rice cultivar from West Bengal. It is a short grain, white, aromatic, sticky rice having a sweet buttery flavor.
- It derives its name from its usage as the principal ingredient in the preparation of the offerings to Govindajiu, the family deity of the Setts of Kolkata.
- The rice has several advantages. It is cultivated late and therefore not much affected by rains. It is less prone to pests as well. The productivity per area is high and farmers get better prices for Gobindobhog rice.
About GI tag:
- GI is covered under the Intellectual Property Rights and the Trade Related Aspects of Intellectual Property Rights.
- A GI tag certifies the origin of a product or produce from a particular region as the quality or other features of the product is attributable only to the place of its origin.
- The tag helps farmers or manufacturers, as the case may be, to get a better price in the market.