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Overview of Cabinet approvals on December 4, 2019

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The Cabinet Committee on Economic Affairs (CCEA) Chaired by the Prime Minister Shri Narendra Modi has approved the following proposals on December 4, 2019. The approval in detail are as follows,--Cabinet approvesCabinet approved launch of Bharat Bond Exchange Traded Fund:
The CCEA gave its approval to launch India’s 1st corporate bond Exchange Traded Fund (ETF) “Bharat Bond ETF” to create an additional source of funding for the Central Public Sector Undertakings (CPSUs) Central Public Sector Enterprises (CPSEs), Central Public Financial Institutions (CPFIs) and other Government organizations. This move will allow retail investors to buy government debt by providing low cost access to bond markets with smaller amounts as low as Rs. 1,000.

Bharat Bond ETF:

  • Bond issuance: The bond will be issued by central public sector enterprises/undertakings (PSUs) or any other government organization bonds. (Initially, all AAA rated bonds.)
  • Bond Maturity: The bond has a fixed maturity of 3 and 10 years and will trade on the stock exchanges. Each of these series will have separate index of the same maturity.
  • Index tracking: Bharat bond ETF will track index on risk replication basis, matching credit quality and average maturity of the index. The index will be constructed by National Stock Exchange(NSE).
  • Low cost investment: 0.0005% cost structure makes it the cheapest available investment option.
  • Long-term capital gains (holding period of over 3 years) on bond funds are taxed at 20% after indexation. Indexation is the process of adjusting the purchase price of an investment for inflation, which helps bring down the quantum of capital gains.
  • So far the Indian govt. has allowed only equity ETF in which the govt raised Rs 14,400 crore through ETFs in the 2019/20 fiscal year beginning April. Retirement fund body Employees Provident Fund (EPFO), has invested about ₹87000 crore in ETFs.
  • Features: The best features in the Bharat ETF are the small unit, low cost, being tradable on exchange, transparent portfolio and transparent Net Asset Value(NAV).
  • ETF: ETFs are mutual funds listed and traded on stock exchanges like shares. Usually, ETFs are passive funds where the fund manager doesn’t select stocks on your behalf.

Approval for land monetisation at Pragati Maidan to build a five-star hotel:
CCEA approved for land monetisation at Pragati Maidan to build a 5 star hotel. India Trade Promotion Organisation (ITPO) has been authorised to transfer 3.7 acres of land at Pragati Maidan on a 99 year fixed leasehold basis at a price of Rs. 611 crore in favour of the SPV (Special Purpose Vehicles). The SPV will be formed by India Tourism Development Corporation (ITDC) and Indian Railway Catering and Tourism Corporation (IRCTC) for development and operation of a five-star hotel.

Key Points:

i.Meanwhile implementation of the International Exhibition and Convention Centre (IECC) project, is expected to be completed in the year 2020-2021. The govt. gave the approval to revolutionise India’s infrastructure and tourism with best standard and service by making the project a world class IECC.

ii.Hotel project tracking: The hotel project at Pragati Maidan, will be tracked by SPV by selecting a suitable developer and operator third party through a transparent competitive bidding process to construct, run and manage (directly or through a professional brand) the hotel on a long-term fixed lease basis.

iii.By this project, the turnout at the trade fair is expected to increase benefiting the participating traders, entrepreneurs and visitors. The trade fair will promote Indian goods and service at a wider range.

iv.Special Purpose Vehicle: A Special Purpose Vehicle (SPV) is a separate legal entity created by an organization. The SPV is a distinct company with its own assets and liabilities, as well as its own legal status. Usually, they are created for a specific objective, mainly to isolate financial risk.

Cabinet approved Personal Data Protection Bill, 2019:
The CCEA approved Personal Data Protection Bill. The bill proposes a penalty of up to Rs 15 crore or 4% of an entity’s global revenue and up to 3-year jail term for company executives who violate privacy norms. The bill mandates storage of critical data of individuals by internet companies within the country. Sensitive data can be transferred overseas only after explicit consent of the data owner. Critical data will be defined by the govt from time to time. The bill has been approved and will be introduced during the current winter session.

Key Points:

i.Bill: The bill has provisions to grant the right to be forgotten to data owners as well as right to erase, correct and porting of data. It also exempted processing of personal data in case of national security issues, court order etc. Entities will be given up to 2 years to make changes in their operations to adhere to the provisions of the Data Protection Bill.

ii.Bill draft: The bill was drafted after Supreme Court’s (SC) judgement in August 2017 that declared ‘Right to Privacy’ a fundamental right. After the judgment, a strong personal data protection regime was further highlighted by the apex court in its judgement in September 2018. Personal Data Protection Bill, 2018, was prepared by a high-level expert group headed by former SC judge Bellur Narayanaswamy Srikrishna.

iii.Sensitive data: Data related to health, religious or political orientation, biometrics, genetic, sexual orientation, financial, transgender status and religious beliefs etc are identified as sensitive data.

iv.Minor violations penalty: A penalty of Rs 5 crore or 2% of the global turnover with provision of jail term for officers will be made incase of minor violations.

v.A company’s executive in-charge of conduct of the data business would face a jail term of up to 3 years if found guilty of knowingly matching anonymous data with publicly available information to find the identity of an individual called ‘re-identify de-identified data‘ in technical parlance (particular way of using words).

vi.At present, the Reserve Bank of India(RBI) orders stipulate that private entities should not store payments data outside the country. If taken out of the country for processing they have to be brought back within 24 hours.

Union Cabinet cleared Citizenship Amendment Bill 2019:
The union cabinet cleared the Citizenship (Amendment) Bill, 2019. This bill seeks to amend Citizenship Act, 1955 by seeking to grant citizenship to undocumented non-Muslims from Bangladesh, Pakistan and Afghanistan who came to India on or before December 31, 2014.

Bill purpose: The bill would enable acquisition of Indian citizenship by persons who were forced to seek shelter in India due to fear of on grounds of religion. The bill will provide ease in obtaining citizenship.

Key Points:

i.Bill excluded regions: The bill will not be applicable to tribal areas of Assam, Meghalaya, Mizoram and Tripura as included in the sixth schedule of the Constitution and States of Arunachal Pradesh, Mizoram and Nagaland that are protected by the Inner Line Permit (ILP). citizens of other states should possess ILP to visit the three States (Arunachal Pradesh, Mizoram and Nagaland) as per the Bengal Eastern Frontier Regulation, 1873.

  • Religional exemption: illegal migrants except from 6 communities which are Hindu, Buddhist, Christian, Parsi, Jain and Sikh from the three neighbouring countries will not be able to take up jobs, purchase land or settle down in these areas.

ii.Citizenship: The Bill will enable a person belonging to the above mentioned six religious communities who do not have proof of birth of his parents in support of his being Indian origin, to apply for citizenship by completing six years of residency period in India.

Cabinet approved SC/STs reservation in Lok Sabha & state assemblies for another 10 years:
The CCEA has approved proposal to extend reservation for Scheduled Castes (SCs) and Scheduled Tribes (STs) in the Lok Sabha and State Assemblies for another 10 years. Before the extension, the bill was about to expire on 25th January 2020.

Cabinet approved to withdraw J&K reservation Bill from Parliament:
The CCEA approved to withdraw the Jammu and Kashmir Reservation (Second Amendment) Bill 2019 that seeks to provide reservation to economically backward people of J&K, as the state reorganisation law provided for a similar quota. The bill has been withdrawn as the draft law became irrelevant as the law providing the quota are now applicable to union territories post repeal of special provisions under Article 370 (special status to J&K).

Cabinet approved Maintenance and Welfare of Parents and Senior Citizens Bill, 2019:
The CCEA approved Maintenance and Welfare of Parents and Senior Citizens (Amendment) Bill, 2019. The bill provides basic needs, safety and security to senior citizens. It seeks to amend Maintenance and Welfare of Parents and Senior Citizen Act, 2007, and also proposes registration of senior citizens home care service agencies along with maintaining minimum standards for senior citizen care homes.

Key Points:

i.Ceiling of Rs.10,000 as maintenance towards welfare of parents will be removed under the bill and it includes to dispose of applications of senior citizens above eighty years of age.

ii.The bill also proposes nodal police officers in every police station and district level special police unit for senior citizens.

Cabinet approved Central Sanskrit Universities Bill:
The CCEA has approved Central Sanskrit Universities Bill 2019.  As per the bill, three Sanskrit deemed to be universities functioning under the government will be converted into central universities. Those three universities are Rashtriya Sanskrit Sansthan, New Delhi; Shri Lal Bahadur Shastri Rashtriya Sanskrit Vidyapeeth, New Delhi, and Rashtriya Sanskrit Vidyapeeth, Tirupati, Andhra Pradesh.

Key Points:
The bill’s purpose is to make the 3 universities a place of Sanskrit learning making it nationally and internationally a reputed one.

Cabinet approved 4th labour code on social security:
The CCEA has approved fourth labour code – the Code on Social Security Bill 2019. The bill seeks to consolidate laws related to social security of workers and subsume(absorb/include in something else)  eight central laws. Under labour reforms, 44 central laws will be codified into four codes.

Key Points:
i.The 8 Central Labour Acts that will be subsumed include Employees’ Compensation Act, 1923; Employees State Insurance Act, 1948; Employees Provident Funds and Miscellaneous Provisions Act, 1952; Maternity Benefit Act, 1961; Payment of Gratuity Act, 1972; Cine Workers Welfare Fund Act, 1981; Building and Other Construction Workers Cess Act, 1996 and Unorganized Workers Social Security Act, 2008.