23, March 2017

1.Cabinet approves of proposal to establish a Fund of Fund for Start-ups (FFS)

Source: PIB

The Union Cabinet has approved the following proposals with regard to the Fund of Funds of Start-ups (FFS) which was established in June, last year with a corpus of Rs. 1,000 crores.fund for start up fund

  • Alternate Investment Funds (AIFs) supported by FFS shall invest at least twice the amount of contribution received from FFS in Start-ups. Further, if the amount committed for a Start-up in whole has not been released before a Start-up ceases to be so, the balance funding can continue thereafter.
  • It was also decided that operating expenses for carrying out due diligence, legal and technical appraisal, convening meeting of Venture Capital Investment Committee, etc. would be met out of the FFS to the extent of 0.50% of the commitments made to AIFs and outstanding. This will be debited to the fund at the beginning of each half year; i.e. April 1 and October 1.

FFS:

  • The FFS is being managed and operated by Small Industries Development Bank of India (SIDBI). FFS contributes to SEBI registered Alternative Investment Funds (AIFs) that may go up to a maximum of 35% of the corpus of the AIF concerned.
  • The Union Cabinet in 2016 had approved the proposal to establish a Fund of Funds for Start-ups (FFS) with a total corpus of Rs.10000 crore, with contribution spread over the 14th & 15th Finance Commission cycles based on progress of implementation and availability of funds.
  • It was decided that the FFS shall contribute to the corpus of Alternative Investment Funds (AIFs) for investing in equity and equity linked instruments of various start-ups at early stage, seed stage and growth stages.
  • The Cabinet has decided that the corpus of Fund of Funds along with counterpart funds raised by the AIFs in which FFS takes equity would be invested entirely in Start-ups.

2.Cabinet approves proposal for Amendments to the NABARD Act, 1981

Source: PIB

Amendments to National Bank for Agriculture and Rural Development Act, 1981 as proposed in the draft Bill with such changes of drafting and of consequential nature, as may be considered necessary by Legislative Department.

  • The Amendments, include provisions that enable Central Government to increase the authorized capital of NABARD from Rs. 5,000 crore to   30,000 crore and to increase it beyond Rs. 30,000 crore in consultation with RBI, as deemed necessary from time to time.
  • Transfer of 0.4 per cent. equity of RBI in NABARD amounting to Rs. 20 crores to the Government of India.

Key facts

  • The proposed amendments in NABARD Act, include, certain other amendments including changes in long title and certain Sections to bring Medium Enterprises and Handlooms in NABARD’s mandate.
  • The proposed increase in the authorized capital would enable NABARD to respond to the commitments it has undertaken, particularly in respect of the Long Term Irrigation Fund and the recent Cabinet decision regarding on-lending to cooperative banks.
  • Further, it will enable NABARD to augment its business and enhance its activities which would facilitate promotion of integrated rural development and securing prosperity of rural areas including generation of more employment.
  • The transfer of entire shareholding in NABARD held by RBI to the Central Government will remove the conflict in RBI’s role as banking regulator and shareholder in NABARD.

3.Financial incentives for Startup companies

Source: PIB

  • The Start-Up India initiative aims to build a strong eco-system for nurturing innovation and startups in the country which will drive economic growth and generate large scale employment opportunities.
  • The Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce and Industry is the nodal agency for implementing this initiative.
  • The various financial incentives provided for Startup Companies under the Startup India initiative include providing funding support through a Fund of Funds, Credit Guarantee Fund for Startups, tax exemption on Capital Gains, tax exemption for initial 3 years, and allowing External Commercial Borrowing up to US $ 3 million or equivalent per financial year.

Presently, the Startup India portal has been made operational by Department of Industrial Policy & Promotion, which  provides access to the following services:

  • Startup recognition
  • Incubator recognition
  • Advertising space for Startups
  • Learning & development module

4.Cabinet approves amendment to ‘The Right of Children to Free and Compulsory Education Act, 2009’

Source: PIB

The Union Cabinet chaired by the Prime Minister has approved the amendment to Right of Children to Free and Compulsory Education (RTE) Act, 2009.

  • This will ensure that all teachers, in position as on 31st March, 2015, acquire the minimum qualifications prescribed by the academic authority to extend the period for such training for four years up to 31st March, 2019.
  • This will enable the in-service untrained elementary teachers to complete their training and ensure that all teachers at the elementary level in the country have a certain minimum standard of qualifications.
  • This would also ensure that all Teachers would attain minimum qualifications as considered necessary to maintain the standard of teaching quality.
  • This would ultimately result in improvement in overall quality of teachers, teaching processes and consequently learning outcomes of children. This will reinforce the Government’s emphasis on improvement of quality of elementary education.

Background:

  • The Right of Children to Free and Compulsory Education (RTE) Act, 2009, is effective from 1st April, 2010. It envisages free and compulsory elementary education to every child in the age group of 6-14 years.
  • The Proviso to Section 23(2) of the Act specifies that all teachers at elementary level who, at the commencement of this Act, did not possess the minimum qualifications as laid down under the RTE Act, need to acquire these within a period of five years i.e., 31st March, 2015.
  • However, several State governments have reported that out of a total number of 66.41 lakh teachers at the elementary level, 11.00 lakh are still untrained (of this, 5.12 lakh are in Government and Aided Schools and 5.98 lakh are in private schools).
  • In order to ensure that all teachers, in position as on 31st March, 2015, acquire the minimum qualifications prescribed by the academic authority, it is necessary to carry out appropriate amendment in the RTE Act, 2009 to extend the period for such training for four years up to 31st March, 2019.

5.Third largest hypersonic wind tunnel at VSSC

Source: The Hindu

Indigenously developed hypersonic wind tunnel and shock tunnel, the third largest in terms of size and simulation capability in the world, were commissioned at the Vikram Sarabhai Space Centre.

What for it?

  • A wind tunnel is used to study the effects of air flowing past a solid object—in ISRO’s case, space vehicles.
  • With the space agency lining up big missions like the ‘Reusable Launch Vehicle’ (RLV), ‘Two Stage to Orbit’ (TSTO) rockets, air breathing propulsion systems, and the human space flight programme for the future, the aero-thermodynamic modelling of such vehicles in a hypersonic environment is vital for optimal designs.

Significance:

  • Commissioning of such facilities would provide adequate data for design and development of current and future Space transportation systems in the country. The commissioning of the facility also symbolises the country’s capability in establishing such world class facilities wherein technology from outside is restricted or not available.
  • The facility will also help aerodynamic characterisation of advanced space transportation systems.

The development of these facilities posed design challenges in aero and thermo-mechanical areas, involved intricate engineering, demanded massive fabrication, utilised super- precision machining, and satisfied safety protocols.

The facility has 500 valves, 2 km of pipelines, 41 electric motors, 35 pumps, 320 instruments and 10 km of cables, according to ISRO.

6.8 tribunals face axe amid downsizing

Source: The Hindu

  • The Centre has decided to wind up eight tribunals that currently deal exclusively with disputes pertaining to employees’ provident fund or EPF, Competition law, Airports economic regulation, Information Technology law, National highways, railways, copyrights and foreign exchange.
  • The Lok Sabha has approved amendments to this effect in the Finance Bill of 2017 proposed by the Centre, along with changes in the norms for tribunals, appellate tribunals and other boards associated with the administration of 17 central laws.

Key facts:

  • The major tribunals to be relegated to history include the Competition Appellate Tribunal, whose work will now be transferred to the National Company Law Appellate Tribunal; the Airports Economic Regulatory Authority Appellate Tribunal (AERAAT) and the Cyber Appellate Tribunal — whose functions will now be discharged by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).
  • The EPF Appellate Tribunal’s remit would be transferred to the Industrial Tribunal that examines matters under the Industrial Disputes Act of 1947.
  • Cases under the Foreign Exchange Management Act of 1999 would be transferred from the dedicated tribunal for foreign exchange matters to the Appellate Tribunal constituted under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act of 1976.
  • National Highways Tribunal that deals with disputes under the Control of National Highways (Land and Traffic) Act of 2002 will be wound up.
  • Highway disputes will now be adjudicated by the Airport Appellate Tribunal set up under the Airport Authority of India Act of 1994, which is distinct from AERAAT.
  • The Railways Rates Tribunal for hearing matters under the Railways Act of 1989 will also cease to exist, with its workload transferred to the Railway Claims Tribunal set up under a 1987 law.
  • The Copyright Act of 1957, decisions under which are currently reviewed by the Copyright Board, will now be transferred to the Intellectual Property Appellate Board set up under the Trademarks Act of 1999.

Conclusion:

  • Typically, the terms of service of such tribunal heads and members are enshrined in the laws.
  • The chairpersons and members of tribunals that are being wound up, will receive three months pay and allowances for the premature termination of their tenure, even as the Finance Bill makes significant changes in the terms of service and rules for appointments of such members and chairpersons in the tribunals that will continue to operate.

7.NABARD launches Water Conservation Campaign in 1 lakh villages

Source: The Hindu

The National Bank for Agriculture and Rural Development (NABARD) has decided to launch a major Water Campaign during the current year, covering around one lakh villages in vulnerable/ water stressed areas and more specifically, where the ground water is over-exploited.

Key facts:

  • The campaign would essentially focus on creating awareness among the rural community about the methods of water conservation, preservation and its efficient utilization at various levels using the modern technologies like micro irrigation (more crop per drop), traditional water management practices, adopting improved package of agronomic practices and others.
  • In an innovative move, NABARD proposes to identify Village Volunteers (Jal Doots) for a localized and more effective approach.
  • These volunteers will increase awareness about various methods of rain water harvesting, efficient water use, recharging groundwater and integrated farming systems besides facilitating creation of water conservation structures and adoption of water efficient practices/ technologies through convergence with the ongoing schemes of the Govt./ banks.
  • Adequate number of Master Trainers in each State will be identified and professionally trained who will be deployed to run the campaign at district/ village level during the campaign period of April to July 2017.

 Nabard:

  • It is an apex development and specialized bank established on 12 July 1982 by an act by the parliament of India.
  • Its main focus is to uplift rural India by increasing the credit flow for elevation of agriculture & rural nonfarm sector.
  • It was established based on the recommendations of the Committee set up by the Reserve Bank of India (RBI) under the chairmanship of Shri B. sivaraman.
  • It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC).
  • It has been accredited with “matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India”.
  • NABARD is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.



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