Stagnation of MSMEs
GS Paper- II and III
Context- The Consortium of Indian Associations (CIA) has performed a survey on micro, small, and medium firms (MSMEs).
Additional information about the survey
The industry group Consortium of Indian Associations (CIA) led the poll, which included 1,08,500 enterprises.
- The objective of the survey was to know
- The predicament of MSMEs in India,
- Their opinion on Budget 2023 -24 and
- Their unfulfilled requirements.
- According to the poll, more than three-fourths of micro, small, and medium-sized firms (MSMEs) believe their business has stayed static, declined, or closed during the previous five years.
- It also revealed that 76% of respondents are not profitable, and access to bank funding remains a major concern.
- Just 28% of respondents acknowledged that they are expanding.
- 45 percent of respondents believed that there was no “ease of doing” in starting, running, ending, or living their lifestyle.
- About 21% of respondents said the government appropriately assisted MSMEs during the Covid-19 epidemic.
- 87% of respondents thought the Union Budget was disappointing or a significant let-down, while the remaining 7% had no opinion.
- According to the report, despite the government’s discourse of ‘ease of doing business,’ micro-entrepreneurs continue to be regulated by cumbersome and antiquated rules, as well as unnecessary compliance obligations.
- Considering this, the Association believes that the government should reconsider, repeal, or rewrite these laws.
- It has also suggested that the government revise the MSME Development Act of 2006 in order to enhance state facilitation councils and make adjustments to the GST Act in order to make it more favourable to small companies.
- The CIA has also advocated for a distinct Micro Businesses Ministry to address particular difficulties confronting this sector.
Government initiatives for MSMEs in India:
- Under the Pradhan Mantri MUDRA Yojana – PMMY, loans of up to Rs. 10 lakh are made available through Member Lending Institutions (MLIs), which include banks, non-banking financial companies (NBFCs), micro financial institutions (MFIs), and other financial intermediaries, in three categories: ‘Shishu,’ ‘Kishore,’ and ‘Tarun,’ indicating the stage of growth or development and funding needs of the borrowers.
- Shishu: covering loans up to 50,000/-
- Kishore: covering loans above 50,000/- and up to Rs. 5 lakh
- Tarun: covering loans above 5 lakh and up to Rs. 10 lakh
- To represent the beneficiary micro unit/level entrepreneur’s of growth/development and finance needs, as well as to serve as a reference point for the next step of graduation/growth.
- CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises):
- Via a credit guarantee system, this plan provides collateral-free loans to micro and small businesses.
India, Stand Up:
- The initiative offers financial help to scheduled caste (SC), scheduled tribe (ST), and women entrepreneurs who want to start new businesses.
Harmonization of the value chain:
- To make it simpler for multinational corporations to incorporate India in its value chains, the government must work on linking India’s value chains with the rest of the world and developing logistics that are easier and faster.
- The government will focus on making quality the most essential aspect in India’s success story by taking initiatives such as defining global benchmarks, aligning Indian standards with global standards, and increasing consumer demand for quality.
CEPA (Comprehensive Economic Partnership Agreement):
- It will assist MSMEs in both India and the UAE in capitalising on the benefits of the government’s District as an export hub strategy.
- Under this effort, each district is recognised for its distinct goods, and districts’ specialties are identified by understanding which districts export certain items.
- This project is designed to aid in the promotion of local products, hence boosting the local economy.
- Financial stability, availability of skilled labour in MSME clusters, and market competitiveness of their goods to accomplish import substitution and exports are three critical characteristics for MSMEs’ success.
- The MSME (micro, small, and medium enterprise) sector in India has the potential to play a vital part in realising the goal of a self-sufficient India.
- MSMEs must be adaptive to shifting markets and varying demand circumstances in order to remain competitive.
Source – The Hindu
India’s Mental Healthcare Act
GS Paper- II
Context- The National Human Rights Commission (NHRC) has raised concerns about the inhumane circumstances at government-run mental health care facilities.
- The research highlighted the inhumane and dreadful conditions of healthcare centres that hold people illegally long beyond their recovery, a violation of mentally ill individuals’ human rights.
- A dearth of physicians, a lack of facilities, and inhumane treatment of mental patients were all mentioned.
- Long-term institutionalisation thus not only violates Article 21 of the Constitution which protects personal liberty, but also indicates a “failure of the State Government(s) to discharge the obligation under various international Covenants [such as the United Nations Convention]relating to rights of persons with disabilities which have been ratified by India.
- Mental health care refers to the spectrum of services and treatments available to those who are dealing with mental health issues or diseases.
- Therapy, medication, support groups, hospitalisation, and other interventions are all examples of mental health care.
Current Mental Healthcare Status
- In India, it is believed that 6-7% of the population suffers from mental problems.
- According to the World Health Organization, the burden of mental health disorders in India is 2443 disability-adjusted life years (DALYs) per 100,000 people.
- Suicide rates per 100,000 people are 21.1 years old. The economic loss owing to mental health disorders is predicted to reach USD 1.03 trillion between 2012 and 2030.
- According to the World Bank, almost 1 billion individuals have a mental condition, and more than 75% of those with the disorder do not obtain treatment in low-income nations. Every 40 seconds, someone commits suicide. Almost half of all mental health illnesses begin before the age of 14.
- According to WHO Suicide is the fourth greatest cause of mortality among 15-29-year-olds, and depression is one of the top causes of disability.
- Individuals suffering from mental illnesses may be covered by the UN Convention on the Rights of Persons with Disabilities (CRPD).
- WHO will release the Global Mental Health Report: Transforming Mental Health for Everyone in 2022.
- The Sustainable Development Goals include mental health.
What Mental Healthcare Act (NHA), 2017 Says?
- The act protects the rights of those suffering from mental illnesses, including the right to mental healthcare and treatment, the freedom to make treatment decisions, the right to secrecy, and the right to legal help.
- It provides mental health services at the district level to give access to mental healthcare and Mental Health Review Boards (MHRBs) to supervise and safeguard the rights of people with mental illnesses.
- It decriminalises attempted suicide, acknowledging that suicide is frequently a sign of mental illness, and offers care and therapy to those who try suicide.
- It creates a National Mental Health Authority and State Mental Health Authorities to regulate and promote mental healthcare and services.
- Except in extraordinary circumstances, the legislation outlaws the use of Electro-Convulsive Treatment (ECT) without anaesthesia, as well as the use of isolation and constraint in mental health facilities.
- The legislation includes advance directives, which allow people to express their treatment and care choices in the event they are unable to make decisions for themselves.
2017 Implementation Difficulties of the NHA
- Many individuals, even mental health experts, are ignorant of people with mental illnesses’ legal rights and safeguards.
- In rural India, there is a serious scarcity of mental health experts such as psychiatrists, psychologists, and social workers.
- Several states have yet to establish or have defunct State Mental Health Authorities and MHRBs. People are unable to exercise their rights or seek remedies in cases of rights violations due to the defunct MHRBs.
- The act’s execution necessitates finances to construct district-level mental health services, train mental health practitioners, and regulate mental healthcare and services.
- According to the Hans Foundation’s 2018 study, around 36.25% of residential users spent one year or more in state psychiatric hospitals.
- Reluctance of families to return patients to their homes owing to the stigma associated with incarceration and persons’ non-functionality.
- There is a dearth of infrastructure, including facilities and equipment, to provide district-level mental health services.
- There is a lack of community-based rehabilitation options for persons who do not want to return to their families, have no recollection of their relatives, have mental disorders, and are unable to work.
Government of India Initiatives
- In 1982, the National Mental Health Programme (NMHP) was established. To ensure the availability and accessibility of basic mental health services for everybody in the near future.
- In India, the Mental Healthcare Act of 2017 provides mental healthcare and assistance to people suffering from mental illnesses.
Suicide Prevention Strategy at the National Level
- The Rights of People with Disabilities Act of 2017 recognises mental illness as a handicap and attempts to improve the Disabled’s Rights and Entitlements.
- The National Tele-Mental Health Programme increases access to high-quality mental health counselling and care across the country.
- Kiran Helpline offers suicide prevention as well as assistance and crisis management.
- World Mental Health Day is celebrated to raise awareness of mental health concerns worldwide and to organise activities in support of mental health.
- This involves giving a higher share of the healthcare budget to mental health services and sponsoring community-based mental health projects.
- Telemedicine and digital health platforms can be utilised to make mental health care services more accessible.
- Online mental health services can make it easier for people to get medical care from the comfort of their own homes at a lower cost.
- Raising Awareness Governments can undertake public awareness initiatives to promote knowledge of mental illness and to minimise stigma associated with it.
- Governments can compel insurance companies to fund mental health services and treatments.
- Governments can control the cost of mental health drugs or give subsidies for them.
- Governments can spend money on mental health education and training to increase the number of mental health practitioners.
- They can also give incentives for mental health experts to work in places where mental health services are scarce.
- Primary care practitioners can be taught to give basic mental health treatment and to spot mental disease signs.
- Integrated mental health care facilities can improve access to mental health treatments.
Source – The Hindu
Delimitation in Jammu & Kashmir
Context– The Supreme Court recently dismissed petitions contesting the recommendations of the Jammu and Kashmir delimitation committee.
- The Supreme Court of India recently dismissed a suit challenging the Delimitation Commission’s redrawing of Jammu and Kashmir seats.
- Haji Abdul Gani Khan and Muhammad AyubMatto, both Kashmir residents, submitted the petition.
- With the division and downgrading of Jammu and Kashmir into two Union Territories in 2019, the government established the Delimitation Commission.
- The petitioners contended that the constituencies across the nation should be kept the same until the first census after 2026, which would be based on the 1971 Census.
- Nevertheless, the administration maintained that the Delimitation Commission was included in the Jammu and Kashmir Reorganisation Act, which was passed in 2019 following the repeal of Article 370.
- Formerly, the President appointed a three-member Delimitation Commission, which was led by Justice (retired) Ranjana Prakash Desai and included ex-officio members such as Chief Election Commissioner Sushil Chandra and J&K State Election Commissioner K.K. Sharma.
- In carrying out the delimitation process, the Commission encountered unusual problems, including a broad range of population density, topographical impediments, and inadequate amenities along the International Boundary.
What is the Delimitation Commission?
- Delimitation is the process of redrawing electoral boundaries in order to guarantee that each constituency has about equal numbers of voters, preventing any one community from having an undue edge in elections.
- The provision for a Delimitation Commission is incorporated in Article 82 of the Indian Constitution.
- Following India’s first general elections in 1952, the first Delimitation Commission was established.
- Earlier, all states and Union Territories were delineated between 2002 and 2008, with the exception of Jammu & Kashmir, which was handled by a separate Delimitation Commission in 1995.
- The most recent reconstitution of the Delimitation Commission occurred in 2020, when a three-member Delimitation Commission for the Union Territory of Jammu and Kashmir was formed.
Composition of Delimitation Commission
- The Delimitation Commission is a high-level committee appointed by India’s President.
- The Commission is led by a chairperson and four additional members, all of whom are retired or sitting Supreme Court or High Court justices.
- The President appoints the members after consultation with the Speaker of the Lok Sabha and the Chairman of the Rajya Sabha.
- The Delimitation Commission is assisted by a secretariat led by a Director.
- The Delimitation Commission is in charge of redrawing Lok Sabha and Vidhan Sabha constituency borders.
- The Commission considers elements such as geography, terrain, and administrative unit borders such as districts and tehsils.
- The number of Scheduled Castes and Scheduled Tribes in each seat is also considered by the Commission, and their interests are protected.
- It has the authority to change the number of seats in a state or Union Territory.
- Following each census, the electoral boundaries are delineated to ensure that they represent the country’s evolving demographic makeup.
- The Delimitation Commission is an essential entity that ensures that election borders in India are fair and equal.
- The notification of recommendations has prepared the way for the first-ever Assembly elections in the Union Territory of Jammu & Kashmir.
- While regional parties have criticised several of the Commission’s choices, the delimitation process strives to provide equitable representation of the population in elections, which is an important feature of democracy.
Source – The Hindu
Antimicrobial Resistance (AMR)
GS Paper- III
Context- As the globe is recovering from the acute phase of the COVID-19 pandemic, the extremely dangerous but imperceptible pandemic of Antimicrobial Resistance (AMR) is regrettably here to stay. Most nations recognised COVID-19 as a clear and present risk in 2020, pushing governments, including India’s, to respond quickly and accurately. Rapidly escalating AMR rates necessitate a multi-sectoral, global and national response.
What exactly is antimicrobial resistance?
- Antimicrobial resistance (AMR) is a natural phenomena that happens when microorganisms such as bacteria, viruses, fungi, and parasites develop to become resistant to antimicrobial medications that were previously helpful in treating illnesses caused by those microbes.
The Threat of Antimicrobial Resistance
- AMR killed about 4.95 million people globally in 2019, emphasising the need of solving this issue.
- According to a 2018 assessment from the Organization for Economic Cooperation and Development, the globe might see a considerable increase in resistance to second and third-line antibiotics by 2030.
- According to a 2022 research conducted by the Indian Council of Medical Research (ICMR), resistance to broad-spectrum antimicrobials grows by 5% to 10% per year.
- The Indian Network for Surveillance of Antimicrobial Resistance (INSAR) discovered a significant prevalence of resistance to routinely used medications such ciprofloxacin, gentamicin, co-trimoxazole, erythromycin, and clindamycin, emphasising the necessity of combating AMR.
- WHO has raised growing alarm about the dangerously high levels of antibiotic resistance among patients worldwide.
- Ciprofloxacin, for example, is an antibiotic routinely used to treat urinary tract infections. According to the WHO, resistance to ciprofloxacin ranged from 8.4% to 92.9% in E. coli and from 4.1% to 79.4% in Klebsiella pneumoniae (a bacteria that can cause life-threatening infections such as pneumonia and intensive care unit- related infections). Patients with multidrug resistance have less than a 60% probability of recovery in the worldwide TB epidemic.
- AMR increases the burden of communicable illnesses and strains a country’s health services, making it even more difficult to resolve health emergencies.
What is Muscat conference is about?
- The Muscat Ministerial Manifesto on Antimicrobial Resistance was approved by over 30 nations during the third Global High-Level Ministerial Conference on Antimicrobial Resistance (November 24-25, 2022).
- Reduce the total amount of antimicrobials used in the agri-food system by at least 30-50% by 2030; Eliminate the use of antimicrobials that are medically important for human health in animals and food production; Ensure that by 2030, at least 60% of total antibiotic consumption in humans is from the WHO Access group of antibiotics.
- The manifesto acknowledged the need to speed government commitments to One Health measures to stop the spread of AMR.
- The need to address AMR’s overall impact was also recognised, as was the need to address AMR’s impact not just on people but also on animals, as well as in areas such as environmental health, food security, and economic growth and development.
Thus far, the government’s efforts
- The National Action Plan on AMR emphasised the success of government efforts like as Swachh Bharat Abhiyan, Kayakalp, and Swachh SwasthSarvatra for hand hygiene and sanitation.
- The government has also worked to raise public knowledge of healthier and more sustainable food production techniques, particularly in the animal food business.
- The National Health Policy 2017 also included specific instructions for the use of antibiotics, such as limiting the use of antibiotics as over-the-counter drugs and prohibiting or regulating the use of antibiotics for livestock growth promotion.
- Antibiotic prescriptions have also been brought into question in order to analyse antibiotic consumption in hospitals and among doctors.
Examples of Limiting AMR worldwide
- Scientific research shows that the use of fewer antimicrobials reduces the likelihood of drug resistance developing.
- Countries like the Netherlands and Thailand have reduced their consumption by over 50%.
- Antibiotic usage in China’s agriculture sector has decreased significantly.
- India has pledged to enhancing surveillance and boosting research on novel medications in the future.
- GLASS also intends to boost private-sector participation and data reporting to the WHO Global Antimicrobial Resistance and Usage Surveillance System (GLASS) and other standardised systems.
The many G-20 health summits occurring between now and 2023 provide a chance for India to ensure that all aspects of AMR are addressed and nations commit to progress. India’s involvement in ensuring that AMR remains high on the global public health agenda is crucial as the current G-20 president and as a country vulnerable to this hidden pandemic.
Source – Indian Express
Latest spike in Inflation and RBI’s efforts
GS Paper- III
Context- The rise of inflation has hampered India’s post-pandemic economic recovery, despite three straight months of easing. Inflation has recently risen significantly, prompting the Reserve Bank of India to take an inflation-targeting policy by boosting interest rates. But, the struggle to control inflation continues, and recent data casts question on whether the RBI’s efforts are sufficient.
What exactly is inflation?
- Inflation is defined as an increase in the price of goods and services purchased by households. The rate of change in those prices is used to calculate it.
- Prices often grow with time, but they can also decline (a situation called deflation).
Consumer Price Index (CPI)
- The Consumer Price Index (CPI) is used to track variations in the cost of living over time.
- When the CPI rises, the ordinary Indian household must spend more money on products and services in order to maintain their level of life.
- Inflation is the economic word used to describe rising costs for goods and services.
- The RBI is required under the inflation targeting framework to attain a CPI consumer price index inflation goal of 4%.
- CPI inflation averaged 5.9 percent from March 2020 to September 2021, during the epidemic period. This was higher than the point objective of 4% but still within the inflation target range of 2-6%.
- In 2022, CPI inflation exceeded the upper limit of the RBI’s goal range for ten consecutive months, indicating that the objective was not met for three quarters in a run.
- CPI inflation has fallen to 5.7% by December 2022. Many people assumed that the inflation peak was passed and that inflation was on its way to the stated objective.
- Underlying inflationary pressures remain. Inflation fell sharply in November and December 2022, owing primarily to a drop in vegetable costs. CPI inflation was really more than 7% when veggies were excluded.
- The January 2023 CPI inflation rate was 6.5 percent, breaking the top limit of the RBI’s inflation goal range for the second time.
What contributed to the latest spike in inflation?
- With food accounting for 46% of the entire CPI basket, a jump in food inflation from over 4% in December 2022 to almost 6% in January 2023 has played a significant part in overall inflation rising.
- Cereal inflation has been a particularly tenacious component of food inflation. Year on year food inflation roughly increased from 5% to 14% between May and December 2022. This will rise to 16% in January 2023. Wheat inflation has been continuously rising among cereals. Wheat inflation surged from 9% to 22% between May and December 2022. It will rise even higher to 25% in January 2023.
- According to Food Corporation of India data, inventories at government warehouses have decreased. The government just approved the open market release of three million tonnes. This, however, is insufficient to replenish market supplies.
- Second, core inflation (non-food, non-fuel) was 6.2 percent in January. This is consistent with the persistent core inflation of 6% that has been in place for over three years. A sustained high level of core inflation indicates that pricing pressures have become entrenched in the system.
- In developed countries, inflation remains high (6.4 per cent in the US; 8.5 per cent in the EU; 10.5 per cent in the UK). Through international commerce in products and services, India is importing part of the increased inflation. Furthermore, as China increasingly liberalises its economy after almost three years of zero-Covid restrictions, commodities prices are expected to rise, putting increased pressure on India’s inflation.
What steps have policymakers taken to alleviate inflationary concerns?
- It has prioritised much-needed budget reduction and avoided unveiling populist policies that may have fueled demand and therefore inflation.
- In just ten months, it raised the policy repo rate from a pandemic low of 4% to 6.50%. Unlike last year, when the monetary policy announcements contained no forward guidance despite increasing inflation, the RBI in its February 2023 statement emphasised the significance of remaining vigilant on inflation, implying that the monetary tightening cycle is not yet done.
Despite the RBI’s efforts to manage inflation by hiking interest rates, inflation has been an issue for India’s economy since the epidemic. Now, a plausible glide path to lower inflation is critical.
Source – Indian Express
Startup20 Engagement Group On India’s Proposal
GS Paper – III
Context– By accepting India’s proposal to form the Startup20 Engagement Group, the G20 has transformed itself into an ambidextrous organisation in which both giant firms and startups have an equal role in moving economies ahead. While the existing B20 Engagement Group continues to focus on companies, the Startup20 addresses policy concerns affecting the global startup ecosystem, with required links between the two organisations.
What is the mean by ambidexterity?
- The capacity to utilise both hands with equal proficiency and ease is referred to as ambidexterity.
- In the context of organisations, it is the capacity to pursue both experimental and exploitative methods at the same time. This entails being able to strike a balance between the demand for innovation and new prospects and the requirement for efficiency and optimization of present operations.
- TCS and Infosys, for example, are investing in areas such as artificial intelligence, blockchain, and the Internet of Things while continuing to provide traditional IT services to their clients.
What is B20 Engagement Group?
- The B20 (Business 20) Engagement Group is a platform for G20 worldwide business executives.
- It is one of the most notable G20 Engagement Groups, with firms and business groups participating.
- The B20 leads the process of rallying global business leaders behind problems of global economic and trade governance, speaking with a single voice on behalf of the whole G20 business community.
- The goal of the group is to make recommendations to the G20 on topics such as economic development, trade, investment, digitization, sustainability, and job creation.
- The B20 is one of numerous engagement groups, including those representing civil society, labour, think tanks, and youth, that provide a forum for various stakeholders to share their perspectives and experiences with the G20.
- The Business 20 (B20) Secretariat for India’s G20 Presidency has been named as the Confederation of Indian Industry (CII).
What is Startup20?
- The Startup20 Engagement Group was formed under India’s G20 presidency in 2023.
- The group’s goal is to develop a worldwide narrative for supporting startups and facilitating synergies among startups, corporations, investors, innovation agencies, and other important ecosystem members.
- The engagement group is divided into three taskforces: Foundation & Alliance, Finance, and Inclusion & Sustainability, where delegates will meet to develop efficient policy frameworks to boost startup scaling in G20 countries.
How these taskforces will work?
- The Foundation and Alliances Taskforce will seek to unify the global Startup ecosystem through consensus-based definitions, as well as to encourage a worldwide community of knowledge exchange across Startup ecosystems in order to explore potential.
- Through collaborations, it will also bridge the knowledge gap between the Startup ecosystems of G20 member countries and emerging economies, allowing more industry participants across G20 nations to collaborate with Startups and tangible solutions.
- It will attempt to develop policies that encourage industry players and government institutions to collaborate with startups, as well as to establish points of contact for the participating G20 nations to maintain their engagement.
- The finance taskforce will strive to expand Startups’ access to capital by offering financing and investment platforms tailored to early-stage Startups in order to widen the range of financial instruments available to Startups.
- It will also provide Startups with pitching and networking opportunities with the global investment community.
- It will seek to offer a framework based on best practises for global investors to support Startups across G20 member countries, as well as to assist in the development of indicative frameworks that may be adopted in developing ecosystems for the development of investment capacities.
Taskforce for Inclusion and Sustainability
- The strategy for inclusion and sustainability includes boosting support for female-led startups and organisations, promoting startups aiming to make communities more inclusive, and promoting startups working on SDGs in areas of global relevance.
- This Task Force intends to increase mentorship assistance for the Startup ecosystems of G20 member nations and emerging economies, as well as to enable more investors to participate ethically in Startups founded on sustainable practises.
Some of the most critical issues confronting the world today need large-scale inventive solutions. The need for answers to global concerns such as climate change, food security, and energy security is critical. We may, however, be positive about our potential to systematically overcome these difficulties by utilising global ambidexterity and taking use of the G20’s new architecture of B20 and Startup20. We can create a more sustainable and prosperous future for everybody by making intentional efforts and taking focused action.
Source – Indian Express
Facts for Prelims
Context: In India, a new beetle species called ‘OmorgusKhandesh’ was found lately.
- The beetle is useful in forensic research because it can determine the time of death of an animal or human.
- OmorgusKhandesh is a keratin beetle since it feeds on dead things.
- The new species is a member of the Trogidae family. With the acquisition of this new species, India currently has 14 extant species in this family.
- Blowflies are among the first insects to appear during the decomposition of a cadaver. Meanwhile, the appearance of the keratin feeders marks the end of the successional stage, emphasising their relevance in forensic research.
Context: According to new study, some of the well-known volatiles that make up the core structure of Earth may have originated beyond the inner solar system.
- At relatively low temperatures, volatile materials or compounds transition from a solid or liquid state to vapour.
- Carbon dioxide, nitrogen, ammonia, hydrogen, methane, sulphur dioxide, and water are the most frequent volatiles and are plentiful in nature.
About the research:
- The researchers looked at 18 meteorites, eleven from the inner Solar System (non-carbonaceous meteorites) and seven from the outer Solar System (carbonaceous meteorites).
- They calculated the relative abundances of the five distinct zinc forms, or isotopes, for each meteorite.
- Scientists then matched each isotopic fingerprint to Earth samples to determine how much zinc each of these minerals added to the planet’s inventory. According to the findings, whereas carbonaceous bodies only made up around 10% of the Earth’s mass, they contributed almost half of the zinc.
Context: India reduces the windfall tax on crude oil from Rs 2,100 per tonne to Rs 1,900 per tonne.
- In July 2022, India implemented a windfall profit tax, joining the ranks of nations that tax supernormal gains from energy corporations.
- The levy was enacted in response to the windfall profits gained by domestic petroleum producers and refiners as a result of high global crude and product prices (on account of the Russian-Ukraine war)
What is windfall tax?
- A windfall tax is a higher tax rate assessed on unexpected large gains placed on a certain firm or industry.
Context: India has requested China to reduce its loans to underdeveloped nations in order to aid their economic recovery.
- The International Monetary Fund [IMF] taking a haircut to settle Chinese debt is unsustainable, according to India.
What is an Economic Haircut?
- When a bank or creditor country takes a ‘haircut,’ it indicates it accepts less than the whole amount owed on a certain loan account. For example, if a bank (e.g., IMF) is loaned Rs 10,000 crore by a borrower (e.g., Pakistan) and agrees to accept just Rs 8,000 crore, it suffers a 20% loss (or loss).