Cabinet Approvals on March 16, 2021

On March 16, 2021, the Union Cabinet headed by Prime Minister (PM) Narendra Modi gave approval to several important proposals. They are

• Approval for the closure of Handicrafts and Handlooms Export Corporation of India Limited (HHEC).
• Approval for Revised Cost Estimates for the strengthening of Transmission & Distribution in Arunachal Pradesh & Sikkim.
• Clearance for Development Finance Institution (DFI) with Capital Infusion of INR 20, 000 Crore.
• MoU between India & Maldives on Cooperation in Sports and Youth Affairs.

Closure of Handicrafts & Handlooms Export Corporation of India Limited (HHEC)

The cabinet approved the closure of HHEC, New Delhi. HHEC is a Government of India undertaking under the administrative control of the Ministry of Textiles.

• All the permanent employees and Management Trainees will be given an opportunity to avail the benefit of a Voluntary Retirement Scheme (VRS) as per rules laid down by the Department of Public Enterprises.
• The closure approval will benefit the Government’s Exchequer by reducing recurring expenditure on salary/wages.
• HHEC has been facing losses since FY 2015-16 and is being closed due to insufficiency to meet its running expenses.

Approval of RCE for Arunachal Pradesh, Sikkim

Cabinet Committee on Economic Affairs headed by PM Narendra Modi approved the Revised Cost Estimate (RCE) of ‘Comprehensive Scheme for Strengthening of Transmission & Distribution in Arunachal Pradesh & Sikkim’. The estimated cost of RCE is INR 9129.32 Crore.

• Objective – To Strengthen the Intra-State Transmission & Distribution Infrastructure in the 2 states by providing grid connectivity to remote areas.
• It will be implemented through POWERGRID, a Public Sector Undertaking (PSU) of the Ministry of Power in partnership with Sikkim & Arunachal Pradesh.  It is targeted to be commissioned in a phased manner by December 2021.

Benefits

• Creation of a reliable power grid that will extend the benefits of connected power to remote & border areas of Arunachal Pradesh & Sikkim.
• It will increase the per capita power consumption of these states & contribute to overall economic development.
• Post Completion, the assets created under the scheme will generate considerable local employment opportunities.

Comprehensive Scheme for Strengthening of Transmission & Distribution in Arunachal Pradesh & Sikkim

• The scheme was approved in December 2014 as a Central Sector Plan Scheme of the Ministry of Power.
• The entire cost of the scheme will be borne by the Government of India through the Plan Scheme of the Ministry of Power.

Establishment of DFI

Approval for Development Finance Institution (DFI) with Capital Infusion of INR 20, 000 Crore. The setting up of DFI was announced in the Union Budget 2021-22.

• Objective –  To raise funds from Pension, Sovereign wealth funds for Long-term funding of Infrastructure & Developmental Activities.
• Target –  To have a lending Portfolio of at least INR 5 Lakh Crore within 3 years’ time.
• DFI will be fully government-owned initially and the promoter’s stake will be brought down to 26 per cent in the next few years.
• The government will provide a 10-year tax exemption to funds invested in the DFI to attract long-term players such as insurance and pension funds.
• The government is planning to issue some securities to the proposed DFI, through which the cost of funds will come down.

Funding

• Capital Infusion for 2021 – INR 20, 000 Crore
• Initial Grant – INR 5, 000 Crore
• Additional Increments of the grant will be made within the limit of INR 5, 000 Crore.

Key Points

• According to the Organisation for Economic Co-operation and Development (OECD), DFI is a government-backed specialised banking institution for enabling the development of the private sector in developing countries.
• Along with the announcement of setting up DFI, Union Finance Minister Nirmala Sitharaman also included capital expenditure of INR 5.54 Lakh Crore for the FY 2021-22.

MoU between India & Maldives on Cooperation in Sports and Youth Affairs

The Union Cabinet approved the Memorandum of Understanding (MoU) between the Ministry of Youth Affairs & Sports of India & the Ministry of Youth, Sports and Community Empowerment of the Maldives for cooperation in Sports & Youth Affairs.

The agreement was signed in November 2020.

Objective

• Bilateral Exchange Programme in the field of sports & youth affairs between the two sides.
• Sharing Knowledge & Expertise in the area of sports science, sports medicine, coaching techniques, participation in youth festivals & Camps.
• The main aim of the collaboration is to improve the performance of our sportspersons in International Tournaments.

Recent Related News:

i.On November 26, 2020, The Union Cabinet chaired by Prime Minister (PM) Narendra Modi has approved the Amalgamation of Lakshmi Vilas Bank with DBS Bank India Limited

ii.On December 30, 2020, the Union Cabinet chaired by Prime Minister Narendra Modi gave the approval for INR 3,004.63 Crore project to turn Paradip Port in Odisha into a world-class port.

About Maldives:
Capital – Male
President – Ibrahim Mohamed Solih
Currency – Maldivian Rufiyaa (MVR)