Home Ministry issued Standard Operating Procedures for the movement of stranded migrant

Part of: GS-I- Geography -Migration (PT-MAINS-PERSONALITY TEST)

The Home Ministry issued Standard Operating Procedures for the movement of stranded migrant labourers for their engagement in industrial, manufacturing, construction, farming and MNREGA works within States and Union Territories where they are currently located. Under it, they have been allowed to go to places of work within a state with certain conditions.

The SOP said, in the event that a group of migrants wish to return to their places of work within the state where they are presently located, they will be screened and those who are asymptomatic will be transported to their respective places of work.

During the journey by bus, it will be ensured that safe social-distancing norms are followed and the buses are sanitized as per guidelines of the health authorities. The local authorities will also provide for food and water for the journey.

In the SOP, Union Home Secretary has made it clear that there will be no inter-state movement of workers during the lockdown which has been extended till the 3rd of next month.
The local authorities will also register the labourers residing in the relief and shelter camps. Their skill mapping will be carried out for their suitability for various kinds of work.

Internal migration policy- PAST ANALYSIS

Internal migration can be driven by push and/or pull factors. In India, over the recent decades, agrarian distress (a push factor) and an increase in better-paying jobs in urban areas (a pull factor) have been drivers of internal migration. Also, distress due to unemployment or underemployment in agriculture, natural calamities, and input/output market imperfections serves as the contributing factors. Data show that employment-seeking is the principal reason for migration in regions without conflict.

What are the problems faced by internal migrants?

Informal growth - A migrant’s lack of skills presents a major hindrance in entering the labour market at the destination. Further, the modern formal urban sector has often not been able to absorb the large number of rural workers entering the urban labour market. This has led to the growth of the ‘urban informal’ economy, which is marked by high poverty and vulnerabilities. The ‘urban informal’ economy is wrongly understood in countries such as India as a transient phenomenon, even though it has expanded over the years and accounts for the bulk of urban employment.

Jobs - Most jobs in the urban informal sector pay poorly and involve self-employed workers who turn to petty production because of their inability to find wage labour. There are also various forms of discrimination which do not allow migrants to graduate to better-paying jobs. Migrant workers earn only two-thirds of what is earned by non-migrant workers.

Cost of living - Further, they have to incur a large cost of migration which includes the ‘search cost’ and the hazard of being cheated. Often these costs escalate as they are outside the state-provided health care and education system. This forces them to borrow from employers in order to meet these expenses. However, frequent borrowing forces them to sell their assets towards repayment of loans.

Source Factor - Employment opportunities, the levels of income earned, and the working conditions in destination areas are determined by the migrant’s household’s social location in his or her village. The division of the labour market by occupation, geography or industry (labour market segmentation), even within the urban informal labour market, confines migrants to the lower end. Also, such segmentation reinforces differences in social identity, and new forms of discrimination emerge in these sites.

What are the benefits associated with migration?

• Internal migration has resulted in the increased well-being of households, especially for people with higher skills, social connections and assets.
• Migrants belonging to lower castes and tribes have also brought in enough income to improve the economic condition of their households in rural areas and lift them out of poverty.
• Circular migration or repeat migration is the temporary and usually repetitive movement of a migrant worker between home and host areas, typically for the purpose of employment.
• Data show that a circular migrant’s earnings account for a higher proportion of household income among the lower castes and tribes.
• This has helped to improve the creditworthiness of the family members left behind where they can now obtain loans more easily.
• Thus, there exists a need to scale-up interventions aimed at enhancing these benefits from circular or temporary migration.
• Also, short-term migration to urban areas is a part of a long-term economic strategy of the rural households to improve their rural livelihoods.
• Hence, local interventions by NGOs and private entrepreneurs need to consider cultural dimensions reinforced by caste hierarchies and social consequences while targeting migrants.

Why there is need for a national policy?

The need for a national policy towards internal migration is underscored by the fact that less than 20% of urban migrants had prearranged jobs. Nearly two-thirds managed to find jobs within a week of their entry into the city.

The probability of moving to an urban area with a prearranged job increases with an increase in education levels. Access to information on employment availability before migrating along with social networks tend to reduce the period of unemployment significantly.

Social networks in the source region not only provide migrants with information on employment opportunities, but are also critical as social capital in that they provide a degree of trust. While migrants interact with each other based on ethnic ties, such ties dissipate when they interact with urban elites to secure employment.

The bulk of policy interventions for the migrants are aimed at providing financial services and directed towards poverty reduction. However, there is a dearth of direct interventions targeted and focussed on regions.

Hence, a national policy should aim at reducing distress-induced migration on one hand and address conditions of work, terms of employment and access to basic necessities on the other.

What should a national policy contain?

• It should facilitate the integration of migrants into the local urban fabric, and building city plans with a regular migration forecast assumed.
• Lowering the cost of migration, along with eliminating discrimination against migrants, while protecting their rights will help raise development across the board.
• Delhi is a classic example which has changed its focus from limiting urban migration to revitalising its nearby cities such as Meerut in building transport links and connectivity to accommodate migrants.
• It should distinguish between the interventions aimed at ‘migrants for survival’ and ‘migrants for employment’.
• It should also distinguish between individual and household migrants, because household migration necessitates access to infrastructure such as housing, sanitation and health care more than individual migration does.
• It should provide continued dynamic interventions over long periods of time for seasonal migrants, instead of single-point static interventions.
• It should provide more space to local bodies and NGOs which bring about structural changes in local regions.
• It should focus on measures enhancing skill development would enable easier entry into the labour market.
• Skill development can be supported by market-led interventions such as microfinance initiatives, which help in tackling seasonality of incomes.
• It should consider the push factors, which vary across regions, and understand the heterogeneity of migrants.
• Remittances from migrants are increasingly becoming the lifeline of rural households.
• Hence, the policy should improve financial infrastructure to enable the smooth flow of remittances and their effective use require more attention from India’s growing financial sector.

Govt. nod mandatory for FDI from neighbouring countries

Part of: GS-III- Economy - FDI (PT-MAINS-PERSONALITY TEST)

China’s footprint in the Indian business space has been expanding rapidly, especially since 2014.

• • The Chinese investment in India in 2014 stood at $1.6 billion. This involved mostly investment from Chinese state-owned players in the infrastructure space in India.
  • By 2017, the total investment had increased five-fold to at least $8 billion accompanied by a marked shift from a state-driven to market-driven approach.
  • The report, titled “Following the Money: China Inc’s Growing Stake in India-China Relations” estimates that the total current and planned Chinese investment in India has crossed $26 billion in March 2020.

The major Chinese investments in India span a range of sectors with a significant share in the start-up space. A 2017 survey of Chinese enterprises in India by the Industrial and Commercial Bank of China’s Mumbai branch found that 42% were in the manufacturing sector, 25% in infrastructure and others in telecom, petrochemicals, software and IT.

Threat due to the COVID-19 pandemic: Many Indian businesses have come to a halt due to the lockdown imposed to contain the COVID-19 pandemic. Subsequently their valuations have plummeted. Many such domestic firms may be vulnerable to opportunistic takeovers or acquisitions from foreign players. Recently, People’s Bank of China made a portfolio investment through the stock market into the housing finance company HDFC and now holds a 1.01% stake in the company.

Details:

• In the light of threat of opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic, the government has revised the FDI policy.
• Under the revised FDI policy, prior government approval is mandatory for FDI from countries which share a land border with India. The new policy states that when an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route.

**India shares land borders with Pakistan, Afghanistan, China, Nepal, Bhutan, Bangladesh and Myanmar.

• As per the changed FDI policy, the transfer of ownership of any existing or future FDI in an Indian entity to those in the restricted countries would also need government approval.
• Investors from countries not covered by the new policy only have to inform the RBI after a transaction rather than asking for prior permission from the relevant government department.
• This move will help restrict Chinese investments in India and also help monitor the investments.

Additional information:

• Though India’s FDI policy is directed at attracting FDI, it needs to also balance security aspects. Investments from Pakistan and Bangladesh face higher restrictions as compared to FDIs from other countries. They need government approval and there is no provision for automatic FDI from these two countries into India.
• Pakistani investors require government approval for FDI in defence, space and atomic energy sectors.

FDI new rules analysis

The revised FDI policy makes prior government approval mandatory for FDI from countries which share a land border with India. The objective is to curb opportunistic takeovers or acquisitions due to the current COVID-19 pandemic. This is indeed a risk that has also been identified by other countries.

Concerns:

Though well intended, the policy outlined in the press note released by the Department for Promotion of Industry and Internal Trade (PT SHOT) may have some unintended consequences.

Aimed at China:

• Given the fact that FDI restrictions were already applicable to Pakistan and Bangladesh and the fact that Myanmar, Bhutan, Nepal and Sri Lanka are not major investors in India, the new policy seems to be aimed at Chinese investors.
  • China has been the fastest growing source of FDI since 2014. The positive sentiment generated among industry players in China may well be punctured by the need for government approval.
  • This could lead to straining of the bilateral ties between the two economic powerhouses of the world.

Wide application:

The amended FDI policy does not restrict its application to only the takeover of vulnerable companies. The amended policy makes every type of investment by Chinese investors subject to government approval. Such a blanket application could create unintended problems.

1. The new policy does not distinguish between Greenfield and Brownfield investments.

• • The new rules may pose obstacles to Greenfield investments where Chinese investors bring fresh capital to establish new factories and generate employment in India.

2. The new policy does not distinguish between listed and unlisted companies. It also does not distinguish between the different types of investors, such as industry players, financial institutions, or venture capital funds.

3. The restrictions on Venture capital funds may impact the prospects of many start-ups in the Indian market.

Applicability with respect to certain funds:

• Most investors in companies such as Zomato, Swiggy, Bigbasket, Makemytrip, Oyo, Ola and Snapdeal are either venture capital funds registered in off-shore tax havens or listed in stock exchanges in the U.S. or Hong Kong.
• It would be extremely difficult to attribute nationality to venture capital funds or fix the ultimate beneficial ownership of listed companies down to founders of a certain nationality.
• The most visible Chinese investment in India, mostly in the Internet space, may not even come under the definitions of the new rules.

Will further drive down evaluations:

• The COVID-19 pandemic has and will definitely cause financial stress in many unlisted or private companies.
• Making government approval necessary for acquisitions in private companies by Chinese investors will only reduce the number of potential investors available and will drive down the valuation.

Consequences for the companies:

• Given the global nature of the crisis there has been a drastic outflow of foreign capital from the Indian economy and there are very little chances for foreign investment to revive in the medium term.
• There seems to be very little interest among the domestic investors too.
• The absence of an investor may cause bankruptcy in the struggling companies and lead to job losses.
  • A recent study notes that over half of the top 500 companies listed on the National Stock Exchange could find themselves strapped for cash to even make routine payments in the aftermath of the COVID-19 induced lockdown.
  • Majority of the firms could find themselves in liquidity trouble, unless if promoters step in with equity or banks lend to them.
  • There is a significant likelihood that at some companies will need to go for cost rationalisation through measures such as salary cuts, payment deferrals or even job cuts.

Future foreign investment:

• The abolishing of the Foreign Investment Promotion Board in 2017 helped boost India’s image as a FDI friendly destination economy.
• The amended policy may have unintended consequences in the minds of foreign investors and might disincentivize future investments.

Conclusion:

• The Indian government could have considered a more precise and focused intervention with respect to the new amendments in the FDI policy.
• The Committee on Foreign Investment in the United States (CFIUS) framework which allows or promotes FDI with limited national security exceptions to deal with genuine threats to national security or black swan events like the COVID-19 pandemic can act as a guiding light for India’s own policy.

ABOUT FDI

Foreign direct investment (FDI)

It is an investment from a party in one country into a business or corporation in another country with the intention of establishing a lasting interest. Lasting interest differentiates FDI from foreign portfolio investments, where investors passively hold securities from a foreign country. Foreign direct investment can be made by expanding one’s business into a foreign country or by becoming the owner of a company in another country.

Review of FDI policy on various sectors (August 2019)

Major Impact and Benefits from FDI Policy Reform

1. The changes in FDI policy will result in making India a more attractive FDI destination, leading to benefits of increased investments, employment and growth.
2. In the coal sector, for sale of coal, 100% FDI under automatic route for coal mining,activities including associated processing infrastructure will attract international players to create an efficient and competitive coal market.
3. Further, manufacturing through contract contributes equally to the objective of Make in India. FDI now being permitted under automatic route in contract manufacturing will be a big boost to Manufacturing sector in India.
4. Easing local sourcing norms for FDI in Single Brand Retail Trading (SBRT) was announced in Union Budget Speech of Finance Minister. This will lead to greater flexibility and ease of operations for SBRT entities, besides creating a level playing field for companies with higher exports in a base year. In addition, permitting online sales prior to opening of brick and mortar stores brings policy in sync with current market practices. Online sales will also lead to creation of jobs in logistics, digital payments, customer care, training and product skilling.
5. The above amendments to the FDI Policy are meant to liberalize and simplify the FDI policy to provide ease of doing business in the country, leading to larger FDI inflows and thereby contributing to growth of investment, income and employment.

Background

FDI is a major driver of economic growth and a source of non-debt finance for the economic development of the country. Government has put in place an investor friendly policy on FDI, under which FDI up to 100% is permitted on the automatic route in most sectors/ activities. FDI policy provisions have been progressively liberalized across various sectors in recent years to make India an attractive investment destination. Some of the sectors include Defence, Construction Development, Trading, Pharmaceuticals, Power Exchanges, Insurance, Pension, Other Financial Services, Asset reconstruction Companies, Broadcasting and Civil Aviation.

These reforms have contributed to India attracting record FDI inflows in the last 5 years. Total FDI into India from 2014-15 to 2018-19 has been US $ 286 billion as compared to US $ 189 billion in the 5-year period prior to that (2009-10 to 2013-14). In fact, total FDI in 2018-19 i.e. US $ 64.37 billion (provisional figure) is the highest ever FDI received for any financial year.

Global FDI inflows have been facing headwinds for the last few years. As per UNCTAD's World Investment Report 2019, global foreign direct investment (FDI) flows slid by 13% in 2018, to US $1.3 trillion from US $1.5 trillion the previous year - the third consecutive annual decline. Despite the dim global picture, India continues to remain a preferred and attractive destination for global FDI flows. However, it is felt that the country has the potential to attract far more foreign investment which can be achieved inter-alia by further liberalizing and simplifying the FDI policy regime.

In Union Budget 2019-20, Finance Minister proposed to further consolidate the gains under FDI in order to make India a more attractive FDI destination. Accordingly, the Government has decided to introduce a number of amendments in the FDI Policy. Details of these changes are given in the following paragraphs.

Coal Mining

As per the present FDI policy, 100% FDI under automatic route is allowed for coal & lignite mining for captive consumption by power projects, iron & steel and cement units and other eligible activities permitted under and subject to applicable laws and regulations. Further, 100% FDI under automatic route is also permitted for setting up coal processing plants like washeries subject to the condition that the company shall not do coal mining and shall not sell washed coal or sized coal from its coal processing plants in the open market and shall supply the washed or sized coal to those parties who are supplying raw coal to coal processing plants for washing or sizing.

It has been decided to permit 100% FDI under automatic route for sale of coal, for coal mining activities including associated processing infrastructure subject to provisions of Coal Mines (special provisions) Act, 2015 and the Mines and Minerals (development and regulation) Act, 1957 as amended from time to time, and other relevant acts on the subject. "Associated Processing Infrastructure" would include coal washery, crushing, coal handling, and separation (magnetic and non-magnetic)

Contract Manufacturing

• The extant FDI policy provides for 100% FDI under automatic route in manufacturing sector. There is no specific provision for Contract Manufacturing in the Policy. In order to provide clarity on contract manufacturing, it has been decided to allow 100% FDI under automatic route in contract manufacturing in India as well.

• Subject to the provisions of the FDI policy, foreign investment in 'manufacturing' sector is under automatic route. Manufacturing activities may be conducted either by the investee entity or through contract manufacturing in India under a legally tenable contract, whether on Principal to Principal or Principal to Agent basis.

• Contract manufacturing The business model in which a firm hires a contract manufacturer to produce components or final products based on the hiring firm’s design. Companies outsource their production to other companies. Contract manufacturing offers a number of benefits: Cost Savings: Companies save on their capital costs and labour costs because they do not have to pay for a facility and the equipment needed for production. Some companies may look to contract manufacture in low-cost countries, such as India, to benefit from the low cost of labour. Advanced Skills: Companies can take advantage of skills that they may not possess, but the contract manufacturer does. Focus: Companies can focus on their core competencies better if they can hand off base production to an outside company. Economies of Scale: Contract Manufacturers have multiple customers that they produce, it may lead to reduced costs in acquiring raw materials by benefiting from economies of scale.

Single Brand Retail Trading (SBRT)

1. The extant FDI Policy provides that 30% of value of goods has to be procured from India if SBRT entity has FDI more than 51%. Further, as regards local sourcing requirement, the same can be met as an average during the first 5 years, and thereafter annually towards its India operations. With a view to provide greater flexibility and ease of operations to SBRT entities, it has been decided that all procurements made from India by the SBRT entity for that single brand shall be counted towards local sourcing, irrespective of whether the goods procured are sold in India or exported. Further, the current cap of considering exports for 5 years only is proposed to be removed, to give an impetus to exports.
2. The extant Policy provides that as regards local sourcing requirement, incremental sourcing for global operations by the non-resident entities undertaking single brand retail trading, either directly or through their group companies, will also be counted towards local sourcing requirement for the first 5 years. However, prevalent business models involve not only sourcing from India for global operations by the entity or its group companies, but also through an unrelated third Party, done at the behest of the entity undertaking single brand retail trading or its group companies. In order to cover such business practices, it has been decided that 'sourcing of goods from India for global operations' can be done directly by the entity undertaking SBRT or its group companies (resident or non-resident}, or indirectly by them through a third party under a legally tenable agreement.
3. The extant policy provides that only that part of the global sourcing shall be counted towards local sourcing requirement which is over and above the previous year's value. Such requirement of year-on-year incremental increase in exports induces aberrations in the system as companies with lower exports in a base year or any of ' the subsequent years can meet the current requirements, while a company with consistently high exports gets unduly discriminated against. It has been now decided that entire sourcing from India for global operations shall be considered towards local sourcing requirement. (And no incremental value)
4. The present policy requires that SBRT entities have to operate through brick and mortar stores before starting retail trading of that brand through e-commerce. This creates an artificial restriction and is out of sync with current market practices. It has therefore been decided that retail trading through online trade can also be undertaken prior to opening of brick and mortar stores, subject to the condition that the entity opens brick and mortar stores within 2 years from date of start of online retail. Online sales will lead to creation of jobs in logistics, digital payments, customer care, training and product skilling.

Digital Media

The extant FDI policy provides for 49% FDI under approval route in Up-linking of 'News &Current Affairs' TV Channels. It has been decided to permit 26% FDI under government route for uploading/ streaming of News & Current Affairs through Digital Media, on the lines of print media.

Jai Hind Jai Bharat

Water Quality Report - Draft notification on RO systems

Part of: GS-III- Environment-Pollution (PT-MAINS-PERSONALITY TEST)

Recently, Ministry of Consumer Affairs, Food & Public Distribution has released Water Quality Report for State capitals & Delhi as analysed by the Bureau of India Standards (BIS).

The study focused on the quality of piped drinking water and also ranked the States, smart cities and districts accordingly. This study was in line with Jal Jeevan Mission which aims to provide tap water to all households by 2024.

Parameters

• Tests were conducted on various parameters:
  • Organoleptic and Physical Tests
  • Chemical test
  • Toxic substances
  • Bacteriological tests
  • Total Dissolve Solids (TDS)
  • Turbidity
  • Total hardness
  • Total alkalinity
  • Minerals and metals
  • Presence of Coliform and E Coli
• A vast majority of the samples have failed to comply with the requirements in one or more parameters.
• Tap water in Mumbai is the safest for drinking while Delhi’s water is one of the worst.

Challenges

• Lack of initiatives in tap water systems due to the expanding packaged drinking water.
• High dependence on groundwater in fast-growing urban clusters where piped water systems do not exist.
• Lack of accountability of the official agencies.
• Absence of robust data in the public domain on quality testing.

Conclusion

It should be legally binding on agencies to achieve standards and empowering consumers. State governments should take an integrated view of housing, water supply, sanitation and waste management.

A scientific approach for water management should be adopted. A separate agency in each state should be entrusted for regular testing rather than relying on the same agency.

Data on water should be made public on the same lines as air quality which would put pressure on governments to act.

Jal Jeevan Mission

Recently, Union Ministry for Jal Shakti, conducted a conference of State Ministers on Jal Jeevan Mission in New Delhi.

• Indian Prime Minister on independence day announced that the government will launch a Jal Jeevan Mission to bring piped water to households and resolved to spend more than ?3.5 lakh crore in the coming years.
• India has 16% of the world population, but only 4% of freshwater resources.
  • Depleting groundwater level, overexploitation and deteriorating water quality, climate change, etc. are major challenges to provide potable drinking water.
• Therefore, ensuring India’s water security and providing access to safe and adequate drinking water to all Indians is a priority of the Government.
• Under Jal Jeevan Mission, the government envisages renewed efforts to provide water supply to every household by 2024.
• The Jal Jeevan Mission is set to be based on various water conservation efforts like point recharge, desilting of minor irrigation tanks, use of greywater for agriculture and source sustainability.
• The Jal Jeevan Mission will converge with other Central and State Government Schemes to achieve its objectives of sustainable water supply management across the country.
• The Prime Minister appealed to all states to generate maximum community participation in the form of ‘Jan Andolan’ to achieve the target of functional household tap connection by 2024.

Purifying water: On draft notification on RO systems

The Environment Ministry’s draft notification to regulate the use of membrane-based water purification systems primarily concerns the manufacturers of reverse osmosis (RO) water filters but effectively bars domestic users from installing RO systems.

The Central government has drawn up plans to ban the use of membrane-based water purification systems (MWPS) – primarily reverse osmosis (RO) systems – in areas where the source of water meets the Bureau of Indian Standards’ drinking water norms.

Draft notification that effectively prohibits home users to install MPWS:

The notification is the culmination of a legal dispute before the National Green Tribunal, which had banned RO water filter use in Delhi as the purification process wastes water.

The notification mainly deals with rules for commercial suppliers and for integration of systems that inform consumers about TDS levels, a major determinant of water quality.

This is envisaged both before water enters filtration systems and after it has been filtered.

The association of water filter manufacturers challenged this order and the litigation led to this pan-India notification, where the intent is to conserve water and cut waste.

What is Reverse Osmosis?

Reverse Osmosis is a technology that is used to remove a large majority of contaminants from water by pushing the water under pressure through a semi-permeable membrane.

Reverse Osmosis works by using a high-pressure pump to increase the pressure on the salt side of the RO and force the water across the semi-permeable RO membrane, leaving almost all (around 95% to 99%) of dissolved salts behind in the reject stream.

The amount of pressure required depends on the salt concentration of the feed water. The more concentrated the feed water, the more pressure is required to overcome the osmotic pressure.

The desalinated water that is demineralized or deionized, is called permeate (or product) water. The water stream that carries the concentrated contaminants that did not pass through the RO membrane is called the reject (or concentrate) stream.

Problem with Reverse Osmosis (RO) systems:

In RO, the total dissolved solids (TDS) in water, which covers trace chemicals, certain viruses, bacteria and salts can be reduced, to meet potable water standards. Home filters waste nearly 80% of the water during treatment.

Second, some research has shown that the process can cut the levels of calcium and magnesium, which are vital nutrients.

The resort to prohibition (to restrict home filters) may cause consumer apprehension but it is unlikely that they will be taken to task for using such water filters.

For one, the notification implies, these filters are only prohibited if the home gets water supply that conforms to Bureau of Indian Standards (BIS) for Drinking Water.

Although several State and city water boards claim BIS standards, the water at homes falls short of the test parameters.

World Health Organization issues reverse osmosis water warning:

Just about everyone knows that Reverse Osmosis (RO) systems excel at removing water impurities, but few are aware that they also remove the beneficial minerals.

In fact, the reverse osmosis process removes 92-99% of beneficial calcium and magnesium.

After analysing hundreds of scientific studies concerning demineralized or reverse osmosis water, the World Health Organization released a report stating that such water “has a definite adverse influence on the animal and human organism.”

Consumers have been so concerned with removing as many things from water as possible that they have forgotten to ask if the resulting water actually improves health or causes health problems.

It’s assumed that no toxins equal better health, but there is simply more to healthful water than a lack of toxins, as the World Health Organization clearly points out.

Official water supply quality by BIS:

The BIS, last year, ranked several cities on official water supply quality. Delhi was last and only Mumbai met all the standards.

In the 28 test parameters, Delhi failed 19, Chennai 9, and Kolkata 10. The BIS norms are voluntary for public agencies which supply piped water but are mandatory for bottled water producers.

Moreover, most of the country does not have the luxury of piped water. The Composite Water Management Index (CWMI) of NITI Aayog says that 70% of water supply is contaminated.

India is ranked 120th among 122 countries in an NGO, WaterAid’s quality index. The case for restricting people’s choices on the means they employ to ensure potable water is thus weak.

Conclusion:

The aim is also to ensure that after 2022, no more than 25% of water being treated is wasted, and for residential complexes to reuse the residual waste water for other activities, including gardening.

When implemented, the notification’s primary aim should be to persuade authorities to upgrade and supply BIS-standard water at the consumer’s end.

This should be done without additional costs, particularly on millions who now lack access to protected supply.

Active pharmaceutical ingredients and Schemes Approved to Promote Drug Manufacturing

Part of: GS-III- Economy and Manufacturing (PT-MAINS-PERSONALITY TEST)

The pharmaceutical drugs which are biologically active are called active ingredients (AI). In medicine, terms such as bulk active and active pharmaceutical ingredients (API) are also interchangeably used. For natural products, the term active substance is used. There are certain medication products that could comprise of multiple active ingredients. “Pharmacon” or “Pharmakon”, is a traditional word for Active Pharmaceutical Ingredient originally denoting a magical drug or substance.

Often, “active constituent” is used while giving references to the active substance of interest in a plant (For example, arecoline in areca nuts, salicylic acid present in the bark of a willow tree) as the term “active ingredient” may in many sense imply a perception of human agency (something that is manually combined with other substances), whereas the natural products in plants occur naturally and will not be added by human agency. Therefore, the plant does not have ingredients but has active substances.

About:

• All drugs are made up of two core components: (1) Active Pharmaceutical Ingredient (API), which is the central ingredient, and (2) excipients.
• The Active Pharmaceutical Ingredient (API) is the part of any drug that produces its effects. Some drugs, such as combination therapies, have multiple active ingredients to treat different symptoms or act in different ways.
• Excipients are substances other than the drug that helps deliver the medication to your system. Excipients are chemically inactive substances, such as lactose or mineral oil.
• Example: For instance, if you have a headache, acetaminophen is the API, while the liquid in the gel-capsule or the bulk of a pill is the excipient.
• Raw material vs API: API and raw material are often confused due to the similar usage of the two terms. Raw material refers to chemical compounds that are used as a base to make an API.
• Indian scenario: India is currently dependent on China for imports of APIs to make “certain” essential medicines, with around Rs 12,255 crore worth of these ingredients imported from the country in 2016-17, as per government data.

Schemes and Drugs production

Recently, the Union Cabinet has approved two schemes, namely the scheme on Promotion of Bulk Drug Parks and Production Linked Incentive (PLI) Scheme to promote domestic manufacturing of critical Key Starting Materials/Drug Intermediates and Active Pharmaceutical Ingredients in the country.

Promotion of Bulk Drug Parks Scheme

• Number of Parks: The government aims to develop 3 mega Bulk Drug parks in India in partnership with States.
• Funding: Government of India will give Grants-in-Aid to States with a maximum limit of Rs. 1000 Crore per Bulk Drug Park.
  • A sum of Rs. 3,000 crore has been approved for this scheme for next 5 years.
• Facilities: Parks will have common facilities such as solvent recovery plant, distillation plant, power & steam units, common effluent treatment plant etc.
• Need of the Scheme: Despite being 3rd largest in the world by volume the Indian pharmaceutical industry is significantly dependent on import of basic raw materials, viz., Bulk Drugs that are used to produce medicines. In some specific bulk drugs the import dependence is 80 to 100%.
• Objectives: The scheme is expected to reduce manufacturing cost of bulk drugs in the country and dependency on other countries for bulk drugs.
  • The scheme will also help in providing continuous supply of drugs and ensure delivery of affordable healthcare to the citizens.
• Implementation: The scheme will be implemented by State Implementing Agencies (SIA) to be set up by the respective State Governments.

Production Linked Incentive (PLI) Scheme

• Aim: The PLI scheme aims to promote domestic manufacturing of critical Key Starting Materials (KSMs)/Drug Intermediates and Active Pharmaceutical Ingredients (APIs) in the country.
• Funding: Under the scheme financial incentive will be given to eligible manufacturers of identified 53 critical bulk drugs on their incremental sales over the base year (2019-20) for a period of 6 years.
• Impact: PLI scheme will reduce India's import dependence on other countries for critical KSMs/Drug Intermediates and APIs.
  • This will lead to expected incremental sales of Rs.46,400 crore and significant additional employment generation over 8 years.
• Implementation: The scheme will be implemented through a Project Management Agency (PMA) to be nominated by the Department of Pharmaceuticals.

Essential Medicines

ndia’s drug pricing regulator, National Pharmaceutical Pricing Authority (NPPA), has allowed an increase in the maximum retail prices of 21 drugs currently under price control by as much as 50%.

• The decision has been taken by invoking paragraph 19 of the Drug Prices Control Order (DPCO), 2013 which until now has been used only to reduce the prices of stents and knee implants.
• Most of these drugs are used as the first line of treatment and are crucial to the public health program of the country.
• The decision by the NPPA will apply to formulations like the BCG vaccine for tuberculosis, vitamin C, antibiotics like metronidazole and benzylpenicillin, antimalarial drug chloroquine and leprosy medication dapsone.

Drug Prices Control Order, 2013

• Under the provisions of DPCO 2013, only the prices of drugs that figure in the National List of Essential Medicines (NLEM) are monitored and controlled by the regulator, the National Pharmaceutical Pricing Authority.
  • Essential medicines are those that satisfy the priority healthcare needs of the majority of the population. The primary purpose of NLEM is to promote rational use of medicines considering the three important aspects i.e. cost, safety and efficacy.
• Paragraph 19 of the DPCO, 2013, deals with increase or decrease in drug prices under extraordinary circumstances. However, there is neither a precedent nor any formula prescribed for upward revision of ceiling prices.

Background

• Manufacturers have been citing difficulties in supplying these drugs and many companies even have applied for discontinuation of the product on account of unviability.
• NPPA has been receiving applications for upward price revision under para 19 of DPCO, 2013, since last two years citing reasons like “increase in Active Pharmaceutical Ingredient - API (key ingredient) cost, increase in cost of production, exchange rates etc. resulting in unviability in sustainable production and marketing of the drugs.
• India is dependent on China for over 60% of its API requirement, higher API costs for price-controlled medicines reduce profits and sometimes even make production of these drugs unviable in India. For instance, the cost of ingredients to make vitamin C went up as much as 250%, leading to a 25-30% shortage of this drug in India in 2019.

Key Points

• The decision has been taken to ensure that the life saving essential drugs must remain available to the general public at all times. This is to avoid a situation where these drugs become unavailable in the market and the public is forced to switch to costly alternatives.
• This is the first time the NPPA — which is known to slash prices of essential and life-saving medicines — is increasing prices in public interest.

On a longer term, India needs to build capabilities to manufacture the key ingredients for these medicines.

COVID-19 and Human Immunodeficiency Virus (HIV) strategy

Part of: GS-III- Health – S&T (PT-MAINS-PERSONALITY TEST)

Recently a person suffering from HIV has been treated in London called as ‘London Patient’. He is the second person after Timothy Ray Brown who got cured of HIV. He has been cured with CCR5-delta 32 technique, which is based on a stem cell transplant involving CCR5-delta 32 homozygous donor cells.

Human Immunodeficiency Virus (HIV)

HIV attacks CD4, a type of White Blood Cell (T cells) in the body’s immune system. T cells are those cells that move around the body detecting anomalies and infections in cells. After entering body, HIV multiplies itself and destroys CD4 cells, thus severely damaging the human immune system. Once this virus enters the body, it can never be removed.

CD4 count of a person infected with HIV reduces significantly. In a healthy body, CD4 count is between 500- 1600, but in an infected body, it can go as low as 200. Weak immune system makes a person prone to opportunistic infections and cancer. It becomes difficult for a person infected with this virus to recover from even a minor injury or sickness. By receiving treatment, severe form of HIV can be prevented.

Types of HIV – PT SHOT

Transmission

• HIV is transmitted from person to person through bodily fluids including blood, semen, vaginal secretions, anal fluids and breast milk.
• To transmit HIV, bodily fluids must contain enough of the virus. A person with ‘Undetectable HIV’ cannot transfer HIV to another person even after transfer of fluids.
• ‘Undetectable HIV’ is when the amount of HIV in the body is so low that a blood test cannot detect it. Treatment can make this possible. But regular monitoring of the same through blood tests is also required.

Symptoms

• Around 80% of people infected with HIV develop a set of symptoms known as Acute Retroviral Syndrome, around 2-6 weeks after the virus enters into body.
• The early symptoms include fever, chills, joint pains, muscle aches, sore throat, sweats particularly at night, enlarged glands, a red rash, tiredness, weakness, unintentional weight loss and thrush.
• A person can carry HIV even without experiencing any symptoms for a long time. During this time, the virus continues to develop and causes immune system and organ damage.

Global Stats

• Since the beginning of epidemic, more than 70 million people have got infected with HIV virus and about 35 million have died.
• Globally, 36.9 million People were living with HIV at the end of 2017. Of these, 1.8 million were children under 15 years of age.
• According to Global HIV & AIDS statistics, only 59% of those infected with HIV are receiving the antiretroviral drugs.
• The African Region is the most affected region with 1 in 25 adults living with HIV.

Indian Stats

• The total number of people living with HIV was estimated at 21.40 lakh in 2017.
• India witnessed over 87,000 new cases in 2017 and saw a decline of 85% compared to 1995.

Treatment

• Anti-Retroviral Therapy:
  • It is a combination of daily medications that stop the virus from reproducing.
  • The therapy helps in protecting CD4 cells thus keeping the immune system strong enough to fight off the disease.
  • It, besides reducing the risk of transmission of HIV, also helps in stopping its progression to AIDS (a spectrum of conditions caused by infection due to HIV).
• Stem Cell Transplant:
  • Under this, an infected person is treated with stem cell transplant from donors carrying a genetic mutation that prevents expression of an HIV receptor CCR5.
  • CCR5 is the most commonly used receptor by HIV-1. People who have mutated copies of CCR5 are resistant to HIV-1 virus strain.
  • It has been reported that till now, only two people have been cured of HIV by experts using this method of treatment. The first person is Timothy Ray Brown (Berlin Patient) who was cured in 2007 and the second is known as London Patient, who just got cured of HIV.
  • The difference in the treatment of both patients is that the Berlin Patient was given two transplants and he underwent total body irradiation while the London Patient received just one transplant and also less intensive chemotherapy.
  • Researchers find this method very complicated, expensive and risky.

Policies and efforts

National Aids Control Program

• The National AIDS Control Organization, Ministry of Health and Family Welfare launched the first phase of National AIDS Control Programme in 1992.
• Over time, the focus has shifted from raising awareness to behavior change, from a national response to a more decentralized response and to increasing involvement of NGOs and networks of Person Living with HIV/AIDS (PLHIV).
• Subsequently, second, third and fourth phases have been launched in 1999, 2007 and 2014 with better implementation and improved strategy.

HIV/AIDS Act, 2017 Implemented

• Recently, The Ministry of Health and Family Welfare, enforced the Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (Prevention and Control) Act, 2017 (HIV/AIDS Act, 2017) in force from 10th September 2018.

India’s HIV Burden

• With an HIV prevalence of 0.26% in the adult population, India has an estimated 2.1 million People living with HIV (2015). India has third largest number of cases in the world.
• Bio-behavioural surveys confirm that HIV prevalence is high or ‘concentrated’ among ‘key populations’ (KPs) who have unprotected sexual contacts with multiple partners or who engage in injecting drug use.
• These populations include female sex workers (FSW), men who have sex with men (MSM), hijra/transgender (TG), people who inject drugs (PWID), long-distance truck drivers and migrants.

National Strategic Plan for HIV/AIDS and Sexually Transmitted Infection (STI) 2017 – 2024

• The National AIDS Control Organization (NACO) has now revised the national approach to reach ‘the last mile’ – in order to ensure a more effective, sustained and comprehensive coverage of AIDS related services.
• This approach is being implemented by the NACO through a seven-year National Strategic Plan on HIV/AIDS and STI, 2017-24.

By 2020, the focus of the national programme will be on achieving the following fast track targets:

1. 75% reduction in new HIV infections,
2. 90-90-90: 90% of those who are HIV positive in the country know their status, 90% of those who know their status are on treatment and 90% of those who are on treatment experience effective viral load suppression
3. Elimination of mother-to-child transmission of HIV and Syphilis
4. Elimination of stigma and discrimination

By 2024, the further achievements envisaged are:

1. 80% reduction in new HIV infections
2. Ensuring that 95% of those who are HIV positive in the country know their status, 95% of those who know their status are on treatment and 95% of those who are on treatment experience effective viral load suppression

The Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM)

• The Global Fund is a 21st-century partnership organization designed to accelerate the end of AIDS, tuberculosis and malaria as epidemics.
• Founded in 2002, the Global Fund is a partnership between governments, civil society, the private sector and people affected by the diseases.
• The Global Fund raises and invests nearly US$4 billion a year to support programs run by local experts in countries and communities.
• GFATM play a significant role in India’s health sector It contribute a substantial portion of the external development assistance to the health sector.

Project Sunrise

• A new initiative called 'Project Sunrise' was launched by Ministry of Health and Family Welfare in 2016, to tackle the rising HIV prevalence in north-eastern states in India, especially among people injecting drugs

The Red Ribbon

• The red ribbon is the universal symbol of awareness and support for people living with HIV.
• Wearing a ribbon is a great way to raise awareness on and during the run up to World AIDS Day.

COVID-19 – eLearning - SWOT analysis

Part of: GS-IV- ETHICS and Problem solving (PT-MAINS-PERSONALITY TEST)

With the pandemic forcing everyone to seriously consider e-learning tools and resources, now is a good time to assess its strengths and opportunities, and adapt to the new normal

The coronavirus pandemic has shuttered educational institutions across the globe. Closure of schools, colleges and universities, the shutdown of the routine life of students and teachers, disruptions in education and the education ministry remaining incommunicado, have created an unprecedented situation and thrown many unexpected challenges to administrators, educators, teachers, parents and students. The situation has created a new normal. How to cope with the new normal is the question that everyone is now asking.

It is good to carry out a SWOT — Strengths, Weaknesses, Opportunities and Threats — analysis of the COVID-19 situation and its impact on education. This exercise can help us set new goals and objectives and move forward.

Strengths

As educational institutions across India have remained closed for weeks, parents are worried about their children’s education. Some parents have forced their children to take up some online courses, but students do not seem to show interest in learning online. Some educational institutions have asked teachers to prepare online material, but most teachers do not have the experience of preparing e-material. Some universities and colleges want to move classes/courses online in order to engage students, but do not know how to go about.

The situation described above may present a gloomy picture, but it shouldn’t. Why? Looking at it positively, for the first time many teachers, parents and students have thought about the purpose of education and asked some useful and relevant questions.

The unprecedented situation has made them look at things critically. Here are some such interesting questions:

1. Will ‘education’ be defined in a different way, in the future?
2. Is there a need to learn differently?
3. Will the transition have a positive or negative impact on students and their learning?
4. How should students’ knowledge and skills be assessed?
5. Will online education be successful in our country where millions of students do not own computers and have access to the Internet?
6. How important is home learning?
7. How important is learner autonomy?
8. Is it good to depend on teachers and cling to the traditional way of learning?

Many more questions…

The pandemic should have a positive impact on our education system. It should not be the same after the situation eases. There should be some positive changes.

Weaknesses

The weaknesses in our system include lack of innovative thinking, inadequate infrastructure, untrained teachers, unequal accessibility, exam-centric assessment, and lack of learner autonomy.

How do these weaknesses act as hurdles now at the time of the pandemic and lockdown?

Remote learning, distance learning, home learning, online learning, e-learning, and webinar are the buzz-words that we hear today.

Recently, the Delhi government announced that it would conduct online classes for class XII students, but school teachers say that it is impractical since most students do not have access to the required facilities. Yes, we are challenged by these questions:

Can everyone in the country afford e-learning?

Is online education an elite concept in India? Will the digital divide further cement inequality and create an academic divide in the country?

Teachers working in elite schools in cities and big towns proudly state that they conduct classes online using and help students make use of the lockdown period in a useful manner. What about teachers working in government-aided and government schools in cities and towns and private schools in rural areas? Neither teachers nor students have access to computers and the Internet.

They may neither have the awareness of online tools such as Google Classroom available for such purposes nor have the expertise to use them. Is it possible for such teachers to even think of conducting classes online?

Since our education system has not trained our teachers and students to think creatively and manage in a crisis situation and has underplayed the importance of e-learning, they are unprepared for the transition from the classroom to online.

Opportunities

All systems have strengths and weaknesses. Maximising strengths and minimising weaknesses in order not to miss the opportunity to move forward should be the goal. The three main opportunities that we have are:

i) our students who belong to Gen Z,

ii) numerous web resources, and

iii) enthusiastic teachers.

Gen Z learners (born between 1997 and 2010) are true digital natives.

They are born in the digital era and are familiar with computers, multimedia content and Internet-based activities from an early age. As they live in the online environment, enjoy watching YouTube videos, love connecting with people through social media and speak the language of technology, they need to be taught differently. Now is the right time to move our classes to a different platform, introduce e-learning and develop learner autonomy.

The COVID-19 lockdown has enabled teachers to become creative. They can now create e-material such as YouTube videos and PPTs and share the links with their students and engage them during the lockdown period. Some teachers are using video conferencing facilities such as Zoom and BlueJeans Meetings for online teaching.

These video conference facilities have features such as one-click scheduling, screen sharing and collaboration, Cloud streaming and recording, and so on. Some educators use Google Meet.

Look up more Google resources available for distance learning at Google for Education’s Teacher Center online.

Threats

India is far behind some developing countries where digital education is getting increased attention. In countries where e-learning is popular, students have access to various online resources such as Massive Open Online Courses (MOOCs) which help students, teachers and professionals upgrade their skills. E-learning promotes learner autonomy and enables students to acquire knowledge and skills without depending on teachers. India needs to take the threat of many developed and developing countries leading the way in online education seriously and promote it earnestly.

To summarise, education must continue. Students should keep learning. The lockdown period should be productive. Educators should think creatively and introduce innovative ways of learning. In a country where access to the Internet and high-speed connectivity is a problem, and the digital divide is an issue, it is important to address the challenges. Those who are involved in education planning and administration should give a serious thought to reducing the digital divide in the country and popularise digital learning.

Quarantine and Quality time

Part of: GS-IV- Ethics-Interpersonal relationship (PT-MAINS-PERSONALITY TEST)

Lockdown can get a little overwhelming with the family staying together indoors for long periods. How can you make the most of your time in a healthy manner?

Many parents are having a hard time navigating our “new normal” of working from home in the current times. Being a mother of two teens, I have attempted to put together some useful tips for teens and adolescents to step up and take responsibility during such trying times.

Discipline, discipline, discipline

“Early to bed and early to rise makes a man healthy, wealthy and wise.”

At the cost of not sounding regimental and old school, ensure that you are able to manage a timely schedule and follow basic activities of daily living (ADLs) in a reasonable time frame. Waking up in the morning and having a fresh start is not only important but also essential as it sets the tone for the day that follows.

While keeping awake all night, watching movies, binging on Netflix, gaming or socialising with your cliques is thrilling at this point, there can be a tendency to stay awake till the wee hours of the morning. However, not being able to have a good night’s rest and lack of adequate sleep (seven to eight relaxed hours) is enough to create sleep deprivation and cause laziness, irritability, moodiness, fatigue, forgetfulness, a lack of appetite, and a depressed mood.

Cut down the entitlement

“There ain’t no such thing like a free lunch.”

Given the fact the current support system in the form of paid help — maids, cooks, babysitters (for smaller siblings), caretakers for the elderly at home is missing — we need to help out. Everybody at home, most certainly needs to chip in.

You are an integral part of the family and it is crucial that you contribute and showcase some responsible behaviour. Mum and dad really can’t do much without your timely help and support.

Choose chores that you like (even when you really really don’t like them) and pitch in. Cooking, chopping, washing dishes, cleaning the home, drying and folding clothes, taking care of pets, — the list is rather exhaustive and endless. So, grab your pick.

Technology / Internet / Gadget (ab)use

“The difference between technology and slavery is that slaves are fully aware that they are not free!”

India has the second largest internet users after China. Teens’ continuous, incessant and relentless gadget and screen usage bordering on addiction is a huge problem today for parents and teens themselves.

Given the current quarantine and lockdown, we need to cut ourselves a little slack — given these extenuating circumstances, but beware of the time that you tend to spend on your gadgets and gizmos and the sites and activities that you are engaging in online. It is not always a safe place. It is better to be safe than sorry.

There is excessive information on social media, most of which is untrue and can be harmful to your consumption. FaceTime, Zoom, Facebook video calls, and Skype are all virtual tools for you to chat and catch up with your friends and extended family. TikTok, online games and many other interactive apps increase your vulnerabilities to share plenty of information that might not be necessary and warranted. Use caution. Be mindful of your language and aggression levels as, many times, you tend to lose grounding in a virtual world. Rationing screen time is well worth it.

Excessive usage of screen time can also result in symptoms such as a dysfunctional daily schedule, lack of a routine, anxiety, depression, dishonesty, avoidance of work, isolation, mood swings, fear, boredom with routine tasks, agitation and procrastination.

Schedule time with family

“The family that prays together, stays together.”

Ensure that you engage with the family and do something meaningful for at least 30 minutes to an hour, every day. These can be simple activities together beyond the cleaning rituals and the chores that can become mundane. Cards, board games, old family stories sharing time, television/show viewing of common shows and serials, yoga, meditation, chatting and/or evening prayers are examples of what can become a ‘Family Ritual’. Build memories with your loved ones before you fly from the nest.

Academic mindfulness

“The early summer break is not going to last forever”

For those who have not been able to complete their board exams, please set aside some time for reading up and revising the subjects that are pending. These holidays are eventually going to end and yes, the suspense around that can create a lot of anxiety. But, the only way around is to be prepared.

Those of you, preparing for CETs and various other entrance exams, schedule in some time for a good enough prep so that you are not taken by surprise should the lockdown be lifted on May 3 and dates get preponed. Many virtual content and classes have commenced keeping students afloat and so get on with your tasks on time as well.

Polyprotein – Virus and Bacteria

Difference between Coronavirus and bacterium:

Drug strategy:

• Upon infection, the entire RNA of the Virus with its 33,000 bases is translated into a long tape of amino acid sequences. Since this long chain contains several proteins within it, it is called a “polyprotein” sequence.
  • COVID19 has RNA-based genomes and subgenomes in its polyprotein sequence, that code for the spike protein (S), the membrane protein (M), the envelope protein (E), and the nucleocapsid protein (N, which covers the viral cell nuclear material) – all of which are needed for the architecture of the virus.
  • In addition to these, there are special structural and accessory proteins, called non-structural proteins (NSP), indeed 16 of them, which serve specific purposes for infection and viral multiplication.
• A detailed understanding of these proteins can help the scientific community find relevant proteins and understand their effect on Virus functioning and infection.
• These proteins in the virus can be targeted by a number of potential molecules and drugs which can interfere and stop the production of the viral proteins.

ISPRL to top up its caverns with cheap crude

• To make the best use of the low international crude prices, public sector oil companies, including Mangalore Refinery and Petrochemicals Ltd. (MRPL) and Indian Strategic Petroleum Reserve Limited (ISPRL), have been filling ISPRL’s caverns at Mangaluru and Udupi (Padur) with crude oil. ISPRL is also filling its caverns at Vishakapatnam.
  • Indian Strategic Petroleum Reserves Limited is an Indian company responsible for maintaining the country’s strategic petroleum reserves. ISPRL is a wholly owned subsidiary of the Oil Industry Development Board, which functions under the administrative control of the Ministry of Petroleum and Natural Gas.
• Strategic reserves are also being set up at Chandikhole in Odisha.

PM - CARES Fund

The government has set up the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES Fund) to deal with any kind of emergency or distress situation posed by the COVID-19 pandemic. This Fund has been set up owing to a number of requests made by the people to support the government in the wake of the COVID-19 emergency.

About the Fund

• • The Fund is a public charitable trust with the Prime Minister as its Chairman. Other Members include Defence Minister, Home Minister and Finance Minister.
  • The Fund enables micro-donations as a result of which a large number of people will be able to contribute with the smallest of denominations.
  • The Fund will strengthen disaster management capacities and encourage research on protecting citizens.

Contribution to PM - CARES Fund will Qualify as CSR Expenditure

• • The Ministry of Corporate Affairs has clarified that contributions by companies towards the PM-CARES Fund will count toward mandatory Corporate Social Responsibility (CSR) expenditure.
  • Under the Companies Act, 2013, companies with a minimum net worth of Rs 500 crore or turnover of Rs 1,000 crore, or a net profit of Rs 5 crore are required to spend at least 2% of their average profit for the previous three years on CSR activities every year.
  • The term "Corporate Social Responsibility" in general can be referred to as a corporate initiative to assess and take responsibility for the company's effects on the environment and impact on social welfare.

Prime Minister’s National Relief Fund (PMNRF)

This fund was instituted in 1948 by then Prime Minister Jawaharlal Nehru, to assist displaced persons from Pakistan. The fund is currently used primarily to tackle natural calamities like floods, cyclones and earthquakes. The fund is also used to help with medical treatment like kidney transplantation, cancer treatment and acid attack.

• • The fund consists entirely of public contributions and does not get any budgetary support. It accepts voluntary contributions from Individuals, Organizations, Trusts, Companies and Institutions etc.
  • The corpus of the fund is also invested in various forms with scheduled commercial banks and other agencies. Disbursements are made with the approval of the Prime Minister.
  • The fund is recognized as a Trust under the Income Tax Act and the same is managed by the Prime Minister or multiple delegates for national causes.
  • Contributions towards PMNRF are notified for 100% deduction from taxable income under section 80(G) of the Income Tax Act, 1961.