PIB 1st April 2021

PRODUCTION LINKED INCENTIVE SCHEME FOR FOOD PROCESSING INDUSTRY

Focus: GS III- Agriculture

Why in news?

The Union Cabinet chaired by the Prime Minister has approved the Central Sector Scheme – “Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)” to support creation of global food manufacturing champions commensurate with India’s natural resource endowment and support Indian brands of food products in the international markets.

About Production Linked Incentive Scheme for Food Processing Industry (PLISFPI):

Nodal: Ministry of Food Processing Industry

It is a central sector scheme.

Objectives of the Scheme:

• The objectives of the Scheme are to support food manufacturing entities with stipulated minimum Sales and willing to make minimum stipulated investment for expansion of processing capacity and Branding abroad to incentivise emergence of strong Indian brands.
• Support creation of global food manufacturing champions;
• Strengthen select Indian brand of food products for global visibility and wider acceptance in the international markets;
• Increase employment opportunities of off-farm jobs,
• Ensuring remunerative prices of farm produce and higher income to farmers.

Salient features:

• The first component relates to incentivising manufacturing of four major food product segments viz. Ready to Cook/ Ready to Eat (RTC/ RTE) foods, Processed Fruits & Vegetables, Marine Products, Mozzarella Cheese.
• Innovative/ Organic products of SMEs including Free Range -Eggs, Poultry Meat, Egg Products in these segments are also covered under above component.
• The selected applicant will be required to undertake investment, as   quoted   in   their  Application   (Subject   to   the   prescribed minimum) in Plant & Machinery in the first two years i.e.  in 2021-22 & 2022-23.
• Investment made in 2020-21 also to be counted for meeting the mandated investment.
• The conditions of stipulated Minimum Sales and mandated investment will not be applicable for entities selected for making innovative/ organic products.
• The second component relates to support for branding and marketing abroad to incentivise emergence of strong Indian brands.
• For promotion of Indian Brand abroad, the scheme envisages grant to the applicant entities for – in store  Branding,  shelf space renting and marketing.
• Scheme will be implemented over a six year period from 2021-22 to 2026-27.

Impact including employment generation potential:

• The implementation of the scheme would facilitate expansion of processing capacity to generate processed food output of Rs 33,494 crore and;
• Create employment for nearly 2.5 lakh persons by the year 2026-27.

INDIA AND MAURITIUS SIGN CECP AGREEMENT

Focus: GS II- International Relations

Why in news?

India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement will enter into force on 1st April 2021

India–Mauritius relations

• India–Mauritius relations date back to 1730, diplomatic relations were established in 1948, before Mauritius became independent state.
• The cultural affinities and long historical ties between the two nations have contributed to strong and cordial relations between the two nations.
• More than 68% of the Mauritian population are of Indian origin, most commonly known as Indo-Mauritians.
• India and Mauritius co-operate in combating piracy, which has emerged as a major threat in the Indian Ocean region and Mauritius supports India’s stance against terrorism.
• From the 1820s, Indian workers started coming into Mauritius to work on sugar plantations.
• In the 1830s, when slavery was abolished by the British Parliament, large numbers of Indian workers began to be brought into Mauritius as indentured labourers.
• Novermber 2nd is observed as ‘Aapravasi Day’ to mark the ship named ‘Atlas’ docking in Mauritius in1834 carrying the first batch of Indian indentured labourers.

About the CECPA Between India and Mauritius

• CECPA provides for an institutional mechanism to encourage and improve trade between the two countries.
• The CECPA between India and Mauritius covers various export items for India, including food stuff and beverages, agricultural products, textiles etc., and Mauritius will benefit from preferential market access into India for its products, including frozen fish, speciality sugar, alcoholic drinks, etc.
• As regards trade in services, Indian service providers will have access to service sectors, such as professional services, computer related services, research & development etc.
• Both sides have also agreed to negotiate an Automatic Trigger Safeguard Mechanism (ATSM) for a limited number of highly sensitive products within two years of the Signing of the Agreement.
• This CECPA with Mauritius is the first trade Agreement signed by India with a country in Africa
• The Agreement is a limited agreement, which will cover Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Telecom, Financial services, Customs Procedures and Cooperation in other Areas.

FOREIGN TRADE POLICY 2015-20

Focus: GS III- Indian Economy

Why in news?

Foreign Trade Policy 2015-2020 extended for 6 months till September 2021

About Foreign Trade Policy 2015-20

• It provided a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in keeping with the “Make in India” vision of Prime Minister.
• The focus of the new policy is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’.
• It described the market and product strategy and measures required for trade promotion, infrastructure development and overall enhancement of the trade ecosystem.

Features of the FTP 

• Goods – Earlier there were 5 different schemes (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) for rewarding merchandise exports with different kinds of duty scrips with varying conditions attached to their use.
• Duty-free scrips are paper authorisations that allow the holder to import inputs which are used to manufacture products that are exported, or to manufacture machinery used for producing such goods, without paying duty equivalent to the printed value of the scrip.
• For instance, a duty-free scrip valued at Rupees 1 lakh allows the holder to import goods without paying duty of up to Rupees 1 lakh on the goods.
•  Merchandise Export from India Scheme (ME IS) and Service Exports from India Scheme (SEIS) launched. The ‘Services Exports from India Scheme’ (SEIS) is for increasing exports of notified services. These schemes (MEIS and SEIS) replace multiple schemes earlier in place, each with different conditions for eligibility and usage. Incentives (MEIS & SEIS) to be available for SEZs also. E-Commerce of handicrafts, handlooms, books etc., eligible for benefits of MEIS.
•  Export obligation would be reduced by 25 per cent and incentives available under the MEIS and SEIS would be extend to the units in the SEZs to make them more attractive for investors. SEZs have lost their sheen after imposition of the minimum alternate tax (MAT) and dividend distribution tax (DDT) in 2012.
•  Further business services, hotel and restaurants would get rewards scrips under SEIS at the rate of 3 per cent and other specified services at the rate of 5 per cent.
•  Higher level of rewards under MEIS for export items with high domestic content and value addition.
•  Export obligation under EPCG scheme reduced to 75% to promote domestic capital goods manufacturing.
•  Export promotion mission to take on board state governments.
•  Agriculture and village industry products to be supported across the globe at rates of 3% and 5% under MEIS.
•  Industrial products to be supported in major markets at rates ranging from 2% to 3%.
•  Under the new five year trade policy, the government will provide incentives to e- commerce companies exporting products from sectors that create jobs.
•  Firms that export goods through courier or foreign post office using e-commerce of FOB (Freight on Board) value up to Rs. 25,000 per consignment will be entitled for rewards under MEIS.
•  Specific measures will be taken to facilitate the entry of new entrepreneurs and manufacturers in global trade through extensive training programmes.
•  Two institutional mechanisms are being put in place for regular communication with stake holders- the board of trade and council for trade development (CTD) and promotion. While the board of trade will have an advisory role, the CTD would have representation from states and UT governments

EMERGENCY CREDIT LINE GUARANTEE SCHEME

Focus: GS III-Indian Economy

Why in news?

Emergency Credit Line Guarantee Scheme (ECLGS) 1.0 & 2.0 extended upto 30.6.2021

• In recognition of the continuing adverse impact of COVID-19 pandemic on certain service sectors, the Government has now extended the scope of Emergency Credit Line Guarantee Scheme (ECLGS) through introduction of ECLGS 3.0 to cover business enterprises in Hospitality, Travel & Tourism, Leisure & Sporting sectors 

About Emergency Credit Line Guarantee Scheme (ECLGS)

• Under the Emergency Credit Line Guarantee Scheme (ECLGS) 100% guarantee coverage to be provided by National Credit Guarantee Trustee Company Limited (NCGTC) for additional funding of up to Rs. 3 lakh crore to eligible MSMEs and interested MUDRA borrowers.
• The credit will be provided in the form of a Guaranteed Emergency Credit Line (GECL) facility.
• Tenor of the loan under Scheme shall be four years with a moratorium period of one year on the principal amount.
• No Guarantee Fee shall be charged by NCGTC from the Member Lending Institutions (MLIs) under the Scheme.
• Interest rates under the Scheme shall be capped at 9.25% for banks and FIs, and at 14% for NBFCs.

Aims and objectives of ECLGS

• The Scheme aims at mitigating the economic distress faced by MSMEs by providing them additional funding in the form of a fully guaranteed emergency credit line.
• The main objective is to provide an incentive to Member Lending Institutions (MLIs), i.e., Banks, Financial Institutions (FIs) and NBFCs to increase access to, and enable the availability of additional funding facility to MSME borrowers.
• It aims to provide a 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers.

Benefits of the ECLGS

• The scheme aims to mitigate the distress caused by COVID-19 and the consequent lockdown, which has severely impacted manufacturing and other activities in the MSME sector.
• The scheme is expected to provide credit to the sector at a low cost, thereby enabling MSMEs to meet their operational liabilities and restart their businesses.
• By supporting MSMEs to continue functioning during the current unprecedented situation, the Scheme is also expected to have a positive impact on the economy and support its revival.