Economic Development For All, Indicated in The Prime Minister's

o jobs.
o Economic development for all, indicated in the Prime Minister’s

exhortation of “Sabka Saath , Sabka Vikas , Sabka Vishwas”. This would
entail reforms across swathes of the economy. Simultaneously, it would
mean yielding more space for the private sector. Together, they would
ensure higher productivity and greater efficiency.
o Caring Society: Ours shall be a Caring Society that is both
humane and compassionate. Antyodaya is an article of faith
1. stress issue in hundred water stressed districts.

2. Solar Pumps under KUSUM Scheme: It aims to 20 lakh
farmers for setting up stand-alone solar pumps and further to
help another 15 lakh farmers solarise their grid-connected
pump sets under KUSUM Scheme.
3. Sustainable use of fertilizers: The budget has sought to use all
kinds of fertilizers including the traditional organic and other
innovative fertilizers in a sustainable manner with a ‘balanced
approach’.
4. Development of forward-linkages:
o Proposal of geo-tagging of all warehouses which are
present in the country.
o Proposal of setting up of warehouses in accordance with
norms set by Warehouse Development and Regulatory
Authority (WDRA) at block/taluk level with Viability Gap
Funding by the central government.
5. Village Storage scheme to be run by Self help Groups (SHGs) in
order to store the agricultural produce and provide farmers a good
holding capacity and reduce their logistics cost.
6. National Cold Supply Chain and “Kisan Rail” to be setup to
provide better storage and transportation facilities for
perishable agricultural goods.
o Proposal of refrigerated coaches in Express and Freight
trains to transport perishable agricultural products.
7. Krishi Udaan Scheme: This will be launched by Ministry of
Civil Aviation on international and national routes to transport
agricultural products specially fish, meat and dairy products
across globe.
8. “One product one district” Scheme in horticulture sector to be
supported by central government by providing incentives to those
states which supports cluster-wise production of horticulture
products.
1
9. Promotion of ‘Integrated Farming System’ in rainfed areas to
counter the vagaries of monsoon or unseasonal rain.
o This will include Multi-tier cropping, bee-keeping, solar
pumps, solar energy production in non-cropping season.
Zero-Budget Natural Farming will be promoted in this
area to reduce the on-farm expenditure by farmers.
10.Budget proposes to strengthen Negotiable Warehousing
Receipts (e-NWR) which will be integrated with e-NAM.
11.Agricultural Credit:
o The budget proposes to strengthen agricultural credit by
expanding refinance by NABARD and has set target of Rs.
15 lakh crore for agricultural credit.
o It has further intended to cover all eligible beneficiaries of
PM-KISAN under the KCC scheme.
12.Livestock and Animal Husbandary: Budget proposes to
eliminate Foot and Mouth disease and brucellosis in cattle and
also peste des petits ruminants (PPR) in sheep and goat by
2025.
o It also proposes to increase coverage of artificial
insemination from existing 30% to 70%, development of
fodder farms to produce quality fodder and doubling milk
processing facility by 2025.
13.Blue Economy: It proposes to put in place a framework for
development, management and conservation of marine fishery
resources.
14.It aims to raise the production of fish and promotion of growing
of algae, sea-weed and cage Culture. It will further
employ ‘Sagar Mitras’ to involve youths in marine processing
industries and form 500 Fish Farmer Producer Organisations.
15.It aims to further help SHGs under Deen Dayal Antyodaya Yojana
for alleviation of poerty.
2. Wellness, Water and Sanitation
 It proposes to setup more hospitals tier-2 and tier-3 cities under PPP

model and will provide assistance in form of viability gap funding.
 They will be setup in first phase with priority in those ‘Aspirational
District’, which do not have empanelled hospitals under ‘Ayushman
Bharat’ scheme.
 It reiterates to eliminate TB from India by 2025 and setting up of Jan
Ausadhi Kendras offering 2000 medicines and 300 surgicals to all The
2
concept of Electoral bonds was introduced in the Finance Bill 2017, and
was facilitated through multiple amendments in the Finance Act 2017.
Examples from around the world
 While there have been electoral trusts in India, the concept of electoral
bonds is new for India and the world.
 United Stateshas Political Action Committees which receives money
from individual and corporate donors, and manages them. They do not
have any scheme that allows the citizen to directly purchase a bond and
donate the same to a political party.
Criticism
 The Communist Party of India (Marxist) and the NGO Association for
Democratic Reforms (ADR) had moved to the Supreme Court against the
electoral bonds.
 They argued, ordinary citizens will not know who is donating how much
to which political party, and it would add to the woes of the Indian
democracy.
 It may also tilt the balancein favour of one political party. For example,
in FY 2018, the ruling party received 95% of the total bonds
 Private corporate interests may take precedence over the needs and rights
of the people of the State in policy considerations.
Supreme Court’s stand
 According to SC, if the identity of the buyersof electoral bonds is not

known, the efforts of the government to curtail black money in elections
would be "futile".
 It has directed the Finance Ministry to reduce window of purchasing
electoral bonds.
 It has directed all political parties to furnish receipts of fundingreceived
through electoral bonds and details of identity of donors in a sealed
cover to the Election Commission.
Central Governments stand
3
 Electoral Bond Scheme is an alternative to cash donations to
ensure transparencyin political funding, and check the use of black
money for funding elections.
 Political party have to file returns before the EC as to how much money
has come through electoral bonds, which will provide
 The right of the buyer to purchase bonds without having to disclose his
preference of political party is in furtherance of his right to privacy.
 Keeping the identity of the donor anonymous is also an extension to
his right to votein secret ballot.
 Allegations that nobody would know about the donors is wrong, as
the Income Tax department will have accessto this information.
Conclusion
 It can be said that the release of electoral bonds will restrict the
generation of black money up to some extent. But the rule that identity of
the donors will be kept confidential may make futile the exercise to
eliminate black money, as it may just end up making Black money
White.
Marginal Cost of Funds-based Lending Rate (MCLR)

Context
Public sector lender, Bank of Baroda (BoB) has reduced marginal cost of funds
based lending rate (MCLR) on one-year tenor by 10 basis points (bps).
About
 The marginal cost of funds-based lending rate (MCLR) is the

minimum interest rate that a bank can lend at.
 MCLR is determined internally by the bank depending on the period
left for the repayment of a loan.
 The RBI introduced the MCLR methodology for fixing interest rates
from 1 April 2016. It replaced the base rate structure, which had been
in place since July 2010.
 It is calculated based on four components:
o The marginal cost of funds is thecost which one has to bear to
raise new (incremental) fund. Suppose I have funds of average interest
rate of 10% per annum. I raise some new fund bearing interest rate of 8%
per annum then marginal cost of my fund is 8%.
4
o The tenor premiumis not borrower-specific and is uniform for all
types of loans.
o Operational expensesinclude the cost of raising funds, barring the
costs recovered separately through service charges. It is, therefore,
connected to providing the loan product as such.
o Negative carry on the CRR (Cash Reserve Ratio)takes place
when the return on the CRR balance is zero. Negative carry arises when
the actual return is less than the cost of the funds. This will impact the
mandatory Statutory Liquidity Ratio Balance (SLR) – reserve every
commercial bank must maintain.
 Under the MCLR regime, banks are free to offer all categories of loans on
fixed or floating interest rates.
 After the implementation of MCLR, the interest rates are determined as
per the relative risk factor of individual customers. Previously, when RBI
reduced the repo rate, banks took a long time to reflect it in the lending
rates for the borrowers. Under the MCLR regime, banks must adjust their
interest rates as soon as the repo rate changes.
How is MCLR different from Base Rate?
 MCLR is an improved version of the base rate. It is a risk-based approach

to determine the final lending rate for borrowers. It considers unique
factors like the marginal cost of funds instead of the overall cost of funds.
The marginal cost takes into account the repo rate, which did not form
part of the base rate.
 When calculating the MCLR, banks are required to incorporate all kinds
of interest rates which they incur in mobilizing the funds. Earlier, the loan
tenure was not taken into account when determining the base rate. In the
case of MCLR, the banks are now required to include a tenor premium.
This will allow banks to charge a higher rate of interest for loans with
long-term horizons.

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o jobs.

o Economic development for all, indicated in the Prime Minister’s

1. stress issue in hundred water stressed districts.

2. Wellness, Water and Sanitation

 It proposes to setup more hospitals tier-2 and tier-3 cities under PPP

Examples from around the world

Supreme Court’s stand

 According to SC, if the identity of the buyersof electoral bonds is not

Central Governments stand

Marginal Cost of Funds-based Lending Rate (MCLR)

 The marginal cost of funds-based lending rate (MCLR) is the

How is MCLR different from Base Rate?

 MCLR is an improved version of the base rate. It is a risk-based approach

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