Updates

The United States, Japan, and South Korea announced on 26 October 2024 that they will launch a new framework to collaborate with the Indian private sector to support digital infrastructure in India. The new framework is called the Digital Infrastructure Growth Initiative for India Framework (DiGi Framework). The United States, Japan, and South Korea announced a new framework aimed at enhancing collaboration with the Indian private sector. This initiative focuses on supporting India’s digital infrastructure. The announcement was made by key financial institutions, including the U.S. International Development Finance Corporation (DFC), the Japan Bank for International Cooperation (JBIC), and Korea Eximbank. The Digital Infrastructure Growth Initiative for India Framework The newly launched framework is called the Digital Infrastructure Growth Initiative for India (DiGi Framework). It was signed by leaders from DFC, JBIC, and Korea Eximbank. This framework aims to facilitate projects in the information and communications technology sector. Key areas of focus include 5G technology, Open RAN (Radio Access Network), Submarine cables, Optical fiber networks, Telecom towers, Data centers, Smart City initiatives, E-commerce, Artificial Intelligence (AI), and Quantum technology Aim of the DiGi Framework The DiGi Framework, in partnership with the Indian private sector, will promote investments in digital infrastructure in India. It will provide support to meet the needs of strategic digital infrastructure deals in India. It will support projects in the information and communications technologies (ICT) sectors like Open RAN (radio access network),5G in the telecom sector,  submarine cables, optical fibre networks, telecom towers, data centres, smart cities, e-commerce, artificial intelligence(AI), and quantum technology. The framework will also encourage and support dialogues with the Indian government and private sector so as to promote private sector funding for digital infrastructure projects in India. Streamlined Process for Collaboration The DiGi Framework establishes a streamlined process for collaboration among the three financial institutions and the Indian private sector. This process is designed to support strategic digital infrastructure projects in India. It will also enable policy dialogues between the Indian Government and the private sector. The goal is to promote private-sector funding for these digital infrastructure projects. About the Institutions The U.S. International Development Finance Corporation (DFC) was set up by the United States government in 2019. Its headquarters is in Washington, D.C. It is an American government development financial institution that partners with the private sector to finance solutions to the most critical challenges facing the developing world, such as energy, healthcare, critical infrastructure, and technology. Japan Bank for International Cooperation (JBIC)  The Japan Bank for International Cooperation (JBIC) was established by the Japanese government in 2012. Its headquarters is in Tokyo. It is owned by the government of Japan, and it provides loans to foreign countries or foreign private companies so that they can get goods and services from Japanese companies. The Export-Import Bank of Korea (Korea Eximbank) The Export-Import Bank of Korea (Korea Eximbank) is owned by the South Korean government. It was established in 1976 and has its headquarters in Seoul. It provides loans to foreign governments/companies so that they can buy South Korean goods and services.

The Department of Legal Affairs in the law ministry has invited comments on the draft Arbitration and Conciliation (Amendment) Bill, 2024, saying “the aim and purpose is to provide further boost to institutional arbitration, reduce court intervention in arbitrations and ensuring timely conclusion of arbitration proceedings”. The draft bill comes months after an expert committee headed by former law secretary and former Lok Sabha secretary general T K Vishwanathan submitted its report on proposed reforms in the arbitration sector to the law ministry. The draft bill proposes the concept of ’emergency arbitration’. The proposed amendment says arbitral institutions may, for the purpose of grant of interim measures, provide for appointment of “emergency arbitrator” prior to the constitution of an arbitral tribunal. The emergency arbitrator appointed will conduct proceedings in the manner as may be specified by the (arbitration) council. The Government of India is seeking public input on the Draft Arbitration and Conciliation (Amendment) Bill, 2024, as part of ongoing efforts to enhance the dispute resolution framework in the country. This initiative aims to promote ease of doing business and improve contract enforcement through legislative amendments to the Arbitration and Conciliation Act of 1996. The proposed amendments focus on bolstering institutional arbitration, minimizing court involvement in arbitration processes, and ensuring timely resolutions. The Department of Legal Affairs has prepared a tabular statement outlining existing provisions and proposed changes. Stakeholders and the general public are encouraged to submit their comments and feedback via email by November 3, 2024, to foster comprehensive public consultation on the draft bill. INVITING COMMENTS ON THE DRAFT ARBITRATION AND CONCILIATION (AMENDMENT) BILL, 2024 1.The Government of India has taken several steps to strengthen the dispute resolution environment in the country and to promote Ease of Doing Business and enforcement of contracts inter-alia through legislative interventions from time to time. The Department of Legal Affairs is presently in the process of considering further amendments in the Arbitration and Conciliation Act 1996. 2. The aim and purpose is to provide further boost to institutional arbitration, reduce court intervention in arbitrations and ensuring timely conclusion of arbitration proceedings. 3. In view thereof, the Arbitration and Conciliation (Amendment) Bill, 2024 and a tabular statement depicting existing provision and proposed amendment have been prepared. 4. The Department, now invites comments/feedback from the public as part of the public consultation exercise on the draft amendments. Comments on the draft Bill may be sent by email on [email protected] and [email protected] latest by 03.11.2024.

Union Finance Minister Nirmala Sitharaman highlighted the contributions of the Global South to the foundations of multilateral development banks at the 1944 Bretton Woods conference and emphasized on embedding diverse voices in decision-making to ensure a truly inclusive and global development framework. Finance Minister noted the pivotal contributions of the Global South to the foundations of Multilateral Development Banks (MDBs) at the 1944 Bretton Woods Conference. 1944 Conference led to establishment of World Bank and International Monetary Fund.  Union Finance Minister Nirmala Sitharaman underscored the contributions of the Global South to the foundations of multilateral development banks at the 1944 Bretton Woods conference, stressing the importance of diverse voices in decision-making for a more inclusive global development framework. Sitharaman made these remarks during the Development Committee Plenary session on “A Future-Ready World Bank Group” at the 2024 World Bank Annual Meetings in Washington, DC. In her intervention at the session, Sitharaman urged the World Bank to promote a two-way exchange of innovations, drawing from the transformative experiences of the Global South in areas like digital inclusion and sustainable energy. The Finance Minister also praised the World Bank’s initiatives over the past year to optimize balance sheet measures to increase its financial capacity, considering the growing global economic challenges and the pressing need of emerging economies to finance their developmental needs. She further reiterated India’s stance that the World Bank should adopt a strictly evidence-based and data-driven approach when preparing global indices and country comparators such as the Worldwide Governance Indicators and the new B-Ready index.She affirmed hope that the World Bank would chart the future path with a renewed commitment by addressing key priorities, empowering regions, and fostering partnerships, to create a future-ready institution capable of accelerating progress toward the 2030 SDGs and beyond. In addition to her participation at the World Bank session, Sitharaman attended the IMFC Plenary session on “MD’s Global Policy Agenda” at the International Monetary Fund (IMF) Annual Meetings. She acknowledged the resilience of the global economy in 2024, highlighting that while output is nearing potential in some economies and headline inflation is stabilizing around central bank targets, challenges remain. Sitharaman noted downside risks such as geopolitical tensions and the weakening medium-term growth prospects. The Ministry of Finance posted on X, “Union Minister for Finance and Corporate Affairs Smt Nirmala Sitharaman today participated in the IMFC Plenary session on ‘MD’s Global Policy Agenda’ at the International Monetary Fund (IMF) during the Annual Meetings 2024 in Washington, DC. The Union Finance Minister said that in 2024 the global economy has shown remarkable resilience; while output is nearing its potential in some major economies, headline inflation has generally moderated and moved closer to the central banks’ targets.” Addressing the IMF’s approach, Sitharaman underscored the importance of a balanced and impartial stance in the Fund’s policy advice, especially for countries with debt vulnerabilities. She expressed optimism about the ongoing Review of the Transparency Policy and Open Archives Policy, noting that these initiatives could strengthen the IMF’s role as a trusted advisor and promote greater transparency in its multilateral surveillance. On the sidelines of the meetings, Sitharaman held a bilateral discussion with Standard Chartered CEO Bill Winters. Winters expressed appreciation for her support of the India-UK Financial Partnership, and Sitharaman encouraged the bank to explore further engagement opportunities in India’s GIFT City, an emerging international financial hub. She also welcomed input from Standard Chartered in developing India’s Climate Finance Taxonomy Framework, a component of the Union Budget’s climate-related announcements. Contribution of Global South to MDBs Establishment of New Institutions such as New Development Bank, Asian Infrastructure Investment Bank etc. With economic growth, Global South Countries like India and China have increased their financial commitments to MDBs.  Advocacy for Inclusivity and MDB reforms by emphasizing on embedding diverse voices in decision-making processes at MDBs.  India’s Recommendations for MDBs Promote a two-way exchange of innovations, drawing from experiences of Global South in areas like Digital Inclusion and Sustainable Energy while meeting the need of development financing to Global South. Adopt a more competitive pricing model to foster broader participation, incentivise middle-income countries to borrow more and deepen development impact. Adopt a strictly evidence-based and data-driven approach when preparing global indices such as the Worldwide Governance Indicators and the new B-Ready index.

The growing use of artificial intelligence and machine learning in financial services globally can lead to financial stability risks and warrants adequate risk mitigation practices by banks, the Governor of the Reserve Bank of India said on Monday (October 14, 2024). The RBI Governor said that the use of artificial intelligence and machine learning in financial services globally can lead to financial stability risks and warrants adequate risk mitigation practices by banks Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday warned that while artificial intelligence (AI) and machine learning (ML) have opened new avenues for business and profit expansion in the financial sector, over-reliance on these technologies could pose risks to financial stability. As a result, banks and financial institutions must implement adequate risk mitigation measures, he said.“The heavy reliance on AI can lead to concentration risks, especially when a small number of tech players dominate the market. This could amplify systemic risks, as failures or disruptions in these systems may cascade across the entire sector,” Das said at an event in New Delhi. The growing use of AI introduces new vulnerabilities, such as increased susceptibility to cyberattacks and data breaches, Das said. “Also, AI’s opacity makes it difficult to audit or interpret the algorithms that drive decisions, potentially leading to unpredictable market consequences,” he said.“In the ultimate analysis, banks have to ride on the advantages of AI and BigTech, and not allow the latter (these technologies) to ride on them,” Das said.The governor suggested that, given India’s 24×7 real-time gross settlement system (RTGS), the feasibility of expanding RTGS to settle transactions in major trade currencies, such as the US dollar, euro, and British pound, can be explored through bilateral or multilateral arrangements.RTGS is a continuous, real-time settlement system developed by the RBI, enabling immediate, final, and irrevocable transfers between banks and financial institutions, both for customer and inter-bank transactions.Das also highlighted efforts by India and other economies to link cross-border fast payment systems through both bilateral and multilateral modes. He noted that remittances are a key starting point for many emerging and developing economies, including India, to explore cross-border peer-to-peer payments. “There is immense scope to significantly reduce the cost and time for such remittances,” he said.The governor mentioned central bank digital currencies (CBDCs) as an area with potential to facilitate efficient cross-border payments. India is among the few countries that have launched both wholesale and retail CBDCs.In the modern world, with widespread social media usage and rapid online banking, where money transfers occur within seconds, Das stressed the importance of banks remaining vigilant in such space and strengthening their liquidity buffers to combat potential misinformation that could cause liquidity stress.On emerging financial stability risks, the governor warned that the divergence in global monetary policies could lead to volatility in capital flows and exchange rates, potentially disrupting financial stability. He referenced the sharp appreciation of the Japanese yen in early August, which triggered disruptive reversals in the yen carry trade and unsettled global financial markets.Das also raised concerns about the rapid growth of private credit markets, which have expanded with limited regulation and have not been stress-tested in a downturn, posing significant risks to financial stability. Additionally, higher interest rates aimed at controlling inflation have increased debt servicing costs, financial market volatility, and risks to asset quality.

Samarth Scheme is the flagship skill development scheme of the Ministry of Textiles, which is a continuation of the integrated Skill Development Scheme under the 12th Five Year Plan. Also known as the Scheme for Capital Building in the Textile Sector (SCBTS) was introduced in 2017. It is to train an untrained labor force of 10 lakh and place them in various industries in the textile sector, including Handloom, jute, and many more. Samarth targets the skill development of unemployed youth in the value chain of the textile sector in India. What is Samarth Scheme? The Ministry of Textiles has implemented the Samarth Scheme, an initiative to build capacity in India’s textile sector. Launched in 2017, the scheme is known as the Scheme for Capacity Building in the Textile Sector (SCBTS). The primary objective of the Samarth scheme is to ensure a continuous supply of skilled workforce in the labor-intensive textile sector of India. The scheme’s target is to develop the skills of 10 lakh youth in the organized sector of the entire textile value chain, excluding spinning and weaving. With a budget outlay of 13000 crores, the Samarth scheme incorporates advanced features such as Training of Trainers (ToT), Aadhar-enabled biometric attendance, CCTV recording of training programs, dedicated call centers with helpline numbers, online monitoring of the training process, and a management information system (MIS) based on a mobile app. Objectives of the Samarth Scheme o provide a demand-driven placement-oriented skill program in compliance with the National Skill Qualification Framework (NSQF). To assist in enhancing the job creation initiative of the textile sector. To enhance the training of youth using Training of Trainers. To induce the self-employment capability of youth and reduce the dependence and unemployment rate. In addition to the skill development of new people, skill upgradation exercises are also being promoted in traditional sectors, such as Handloom. To enable the provision of sustainable livelihood to all. To incentivize and support the efforts of the textile industry in employment generation. Government extends “Samarth” (Scheme for Capacity Building in Textiles Sector) till March 2026 Samarth is a demand-driven and placement-oriented umbrella skilling program of the Ministry of Textiles. Samarth Scheme has been extended for two years (FY 2024-25 and 2025-26) with a budget of Rs. 495 Crore to train 3 lakh persons in textile-related skills. Scheme aims to encourage and support the industry in creating jobs in the organized textile and related sectors, covering the entire value chain of textiles, excluding Spinning and Weaving. The training program and curriculum have been rationalized to meet the evolving technological and market needs. In addition to entry-level skilling, the scheme also provides upskilling/reskilling programs to improve the productivity of existing workers in Apparel & Garmenting segments. Samarth also caters to the upskilling/reskilling needs of traditional textile sectors such as handloom, handicraft, silk, and jute. The scheme is implemented through Implementing Partners (IPs) comprising Textile Industry/Industry Associations, Central/State government agencies, and Sectoral Organizations of the Ministry of Textiles like DC/Handloom, DC/Handicrafts, Central Wool Development Board, and Central Silk Board. Under Samarth Scheme, the Ministry, through implementing partners, has trained 3.27 lakh candidates, of which 2.6 lakh (79.5%) have been employed. There is a strong emphasis on women’s employment, and 2.89 lakh (88.3%) women have been trained so far. FAQs What is the main aim of the Samarth Scheme? The main aim of the Samarth Scheme is to provide skill development training to the youth in the textile sector value chain (excluding spinning and weaving). What are the implementing agencies of the Samarth Scheme? Textile industry; Institutions or organizations of the Ministry of Textiles; State governments with placement tie-ups and training infrastructure with the textile sector.

External Affairs Minister S. Jaishankar launched the e-Migrate V2.0 web portal and mobile app to enhance immigration services and expand their accessibility. Highlighting it as more than just a digital platform, Jaishankar described it as a beacon of hope and a commitment to protecting the rights and dignity of Indian workers abroad. The portal reflects global shifts in migration dynamics and addresses the increasing demand for skilled workers across various sectors. Jaishankar emphasized the need for a well-trained workforce in different geographies, which is only expected to grow. The revamped e-Migrate platform aligns with India’s evolving mobility ecosystem, enabling smoother travel and work abroad. He noted India’s proactive efforts in negotiating mobility agreements with several countries and emphasized the importance of a seamless framework for citizens working overseas. This initiative symbolizes India’s vision  India’s commitment to transparent labour mobility: Launch of e-Migrate portal In an effort towards safeguarding the welfare and interests of Indian workers abroad, External Affairs Minister S Jaishankar and Union Minister of Labour and Employment Mansukh Mandaviya launched the e-Migrate portal and mobile app in Delhi. This initiative underscores the Indian government’s commitment to creating safer, transparent, and inclusive mobility channels for its labour force. On Monday (Oct 14, 2024) at the launch event, Jaishankar described the e-Migrate portal as a “beacon of hope,” highlighting its role in protecting the rights and dignity of Indian workers in foreign lands. He stated, “The launch of the e-migrate portal, V2.0, is a testament to our continuing efforts to create a safer, more transparent, and inclusive mobility for Indian labour.” This digital platform is designed to enhance the ease of living and reflect the government’s commitment to people-centric governance. Jaishankar recalled Prime Minister Narendra Modi’s efforts to raise awareness about safe and legal migration channels, particularly referencing the commemorative postal stamp with the motto “Surakshit Jaayen, Prashikshit Jaayen,” which translates to “Go safe, go well trained.” He stated that this initiative aligns with the United Nations’ Sustainable Development Goals, particularly Goal 10, which advocates for orderly and responsible migration. The e-Migrate portal not only aims to improve transparency in the migration process but also addresses the vulnerabilities faced by migrant workers. Jaishankar acknowledged these challenges, stating, “While we recognize the invaluable contributions of our migrant workers to India’s economy and global reputation, we must also acknowledge the vulnerabilities that they face in foreign lands.” To address these concerns, the revamped portal includes 24×7 multilingual helpline numbers to assist workers facing urgent issues, as well as a feedback mechanism for continuous improvement.

Recently, an online application window for PLIWG attracted huge response with 43% of new applicants from MSME sector. The 3rd Round of on-line application window for PLI Scheme for White Goods (Air Conditioners and LED lights) has attracted 38 responses with a  net committed investment of Rs 4121 crore ended on 12th October 2024 after being open for 90 days from 15th July, 2024. 43% of the new applicants are in the MSME sector which shows the confidence among MSMEs to become part of the value chain of manufacturing of components of ACs and LED Lights. The PLI scheme was launched by the Department for  Promotion of Industry and Internal Trade(DPIIT). The applicants include 8 existing beneficiaries of the Production Linked Incentive Scheme for White Goods (PLIWG) committing net incremental investment of Rs 1,285 crore. 30 new applicants have committed investment of Rs 2,836 crore proposing to manufacture varieties of critical components of ACs and LED Lights across India. Investments have been proposed across India spanning in 13 States including Jammu & Kashmir and Odisha and 49 new locations. Altogether, investments will be spread across 54 Districts in 18 States, at 174 locations. Manufacturing clusters are coming up at Noida-Greater Noida in UP, Neemrana and Bhiwari in Rajasthan, Aurangabad-Pune in Maharashtra, Sanad, Gujarat and Sri City in Andhra Pradesh. 6 AC manufacturers and 12 component manufacturers are in Sri City, Andhra Pradesh, also  nicknamed as  the Cooling City. The Scheme has a healthy mix of multinational and domestic Companies. Five additional Foreign Companies are investing Rs 245 Crore apart form 15 existing companies investing Rs 2,287 Crore Altogether, the scheme is expected to bring in investment in the component manufacturing ecosystem of ACs and LED Lights industry to the tune of Rs 11,083 crore. and generate approx. 80,486 direct employment. The Scheme is expected to lead to total production of components of ACs and LEDs in India of about Rs 1,81,975 crore.  As regards to bifurcation between two segments of PLIWG Scheme i.e. ACs and LED Lights, 21 applicants have applied for manufacturing components of ACs with a committed investment of Rs 3,679 crore and 18 applicants for components of LED Lights with a committed investment of Rs 442 crore. In ACs segment, several investments have been proposed to manufacture High value intermediates of ACs i.e. Copper Tubes (Plain / Grooved), Aluminium Stock for Foils or Fins for heat exchangers and Compressors which account for almost 50% of Bill of material (BoM) for room Air conditioners. In addition to that applicants have proposed to manufacture control assemblies for IDU or ODU, Heat Exchangers, motors, and Sheet metal components and plastic moulded goods etc. Similarly, LED Lights, LED Chip packaging, LED Drivers, Heat Sinks, LED Engines, and LED Light Management Systems etc. will be manufactured in India.  Applications have been filed for production of components which are not manufactured in India presently with sufficient capacity. Several applicants are vendors for large manufacturers such as Daikin, Voltas, Blue Star and LG Electronics in the ACs sector. Similarly, several applicants are suppliers of LED components for large LED Lights manufacturers like Surya, Orient, Crompton Greaves, Signify and Halonix etc. The overwhelming response from the Industry to participate under the PLIWG Scheme is also attributed to several factors namely: continuous interactions with the Industry through one-to-one meetings, physical meetings with vendors at Sri City, connect with the selected Ambassadors of India in foreign countries and weekly meeting with PLI beneficiary jointly organised by DPIIT and Project management Agency of the Scheme M/s IFCI Ltd. The application window for the PLI Scheme for White Goods was reopened based on the appetite of the Industry to invest more under the Scheme, which is an outcome of the growing market and confidence generated due to manufacturing of key components of ACs and LED Lights in India under the PLIWG Scheme. The application window was opened on the same terms & conditions stipulated in PLIWG Scheme notified on 16.04.2021 and PLIWG Scheme Guidelines issued on 04.06.2021, as amended from time to time. In order to avoid any discrimination, both new applicants as well as existing beneficiaries of PLIWG who propose to invest more by way of switching over to higher target segment or their group companies applying under different target segment were eligible to apply subject to fulfilling the eligibility conditions as mentioned in the Para 5.6 of the Scheme Guidelines and adhering to investment schedule as mentioned in the Scheme Guidelines. In terms of Para 6.4 of the PLIWG Scheme and Para 9.2 of the Scheme Guidelines, applicants shall only be eligible for incentives for the remainder of the Scheme’s tenure. The applicant approved in the proposed third round would be eligible for PLI for maximum three years only in the case of new applicants and existing beneficiaries opting for investment period upto March 2023 seeking to move to higher investment category. For existing beneficiaries opting for investment period upto March 2022 seeking to move to higher investment category in the proposed third round would be eligible for PLI for maximum two years only. Existing beneficiaries opting for the above, in case they are not able to achieve the threshold investment or sales in a given year will be eligible for submitting the claims as per their original investment plan. However, this flexibility will be provided only once during the Scheme period. The Union Cabinet chaired by Prime Minister, Shri Narendra Modi had given approval to the Production-Linked Incentive (PLI) Scheme for White Goods (Air Conditioners and LED lights) to be implemented over FY 2021-22 to FY 2028-29 with an outlay of Rs 6238 Crore on 7th April 2021. The Scheme was notified by DPIIT on 16.04.2021. The Scheme Guidelines were published on 4th June 2021.  The PLI Scheme on White Goods is designed to create a complete component ecosystem for Air Conditioners and LED Lights Industry in India and make India an integral part of the global supply chains. Domestic Value Addition is expected to grow from the initial level

India’s textiles sector is set for significant expansion, with an 11% year-on-year growth in Ready-Made Garments (RMG) of all Textiles exports, as per India’s trade data of August 2024, signaling a bright future. The Textiles sector in the country is expected to grow to USD 350 billion by 2030, driven by India’s inherent strengths and a strong policy framework that encourages investment and exports. With end-to-end value chain capability, a strong raw material base, a large export footprint and a vibrant and rapidly expanding domestic market, India is a traditional leader in the textiles sector. The encouraging reports of a number of investment decisions in the pipeline are healthy portents for the industry. A number of schemes and policy initiatives as part of the government’s roadmap aim to leverage and catalyse these inherent strengths to help the textile sector achieve the USD 350 billion goal by 2030. While over Rs. 90,000 Crore of investment is expected to flow through PM Mega Integrated Textile Region and Apparel (PM MITRA) Park and Production Linked Incentive (PLI) Scheme in the next 3-5 years, schemes like the National Technical Textiles Mission are expected to help India acquire leadership position in emerging sectors such as technical textiles. Last month, Prime Minister Shri Narendra Modi laid the foundation stone of the PM MITRA Park at Amaravati in Maharashtra. This is one of the 7 Parks sanctioned across the country under the flagship PM MITRA Park scheme. With world class infrastructure including plug and play facilities, PM MITRA Parks shall be a major step in realizing the vision of making India a global hub for textile manufacturing investment and exports. Each PM MITRA Park when complete is expected to attract an investment of Rs 10,000 crores and generate nearly 1 lakh direct employment & 2 lakh indirect employment. PLI Scheme, with a total projected investment of over Rs. 28,000 crore, projected turnover of over Rs. 2,00,000 crore and proposed employment generation of nearly 2.5 lakhs is intended to promote production of MMF Apparel & Fabrics and Technical Textiles products in the country to enable textile industry to achieve size and scale. The National Technical Textiles Mission is specialized mission with a focus on developing usage of technical textiles in various flagship missions and programmes of the country including strategic sectors. The Mission promotes startups and research projects covering specialty fibres and composites, geotextiles, agro textiles, protective textiles, medical textiles, defence textiles, sports textiles, and environment friendly textiles. The supportive policy framework at the central level is supplemented by the policy initiatives of a number of states with a high growth potential in textiles. Additionally, various Indian states with strong textile industries are rolling out their own supportive policies to complement the central government’s efforts, paving the way for accelerated growth in the sector. Together, these initiatives are setting the stage for India to become a global hub for textile manufacturing and exports, while also boosting domestic employment and innovation.

NABARD has published the findings from its second All India Rural Financial Inclusion Survey (NAFIS) for 2021-22, which offers primary data based on a survey of 1 lakh rural households, covering various economic and financial indicators in the post-COVID period. Recognizing the vital role of financial inclusion for economic development, NABARD conducted the inaugural survey for the agricultural year (July-June) 2016-17, with results released in August 2018. Since then, the economy has faced numerous challenges, and policies have been implemented to support agriculture and boost rural socio-economic progress. The NAFIS 2021-22 results could help to shed light on how rural economic and financial development indicators have evolved since 2016-17. The survey included all 28 states and the Union Territories of Jammu & Kashmir and Ladakh. Strengthening Rural Population: Insights from the NAFIS 2021-22 Increase in Average Monthly Income: The average monthly income of households saw a substantial rise of 57.6% over a five-year period, increasing from Rs. 8,059 in 2016-17 to Rs. 12,698 in 2021-22. This indicates a nominal compound annual growth rate (CAGR) of 9.5%.  Annual average nominal GDP growth during the same period (on financial year basis) was 9%. When considering all households together, the average monthly income stood at Rs. 12,698, with agricultural households earning slightly more at Rs.13,661, compared to Rs. 11,438 for non-agricultural households. Salaried employment in the government or private sector was the largest income source for all households, accounting for approximately 37% of their total income. For agricultural households, cultivation was the main income source, making up about one-third of their monthly earnings, followed by government or private services contributing one-fourth share, wage labor (16%), and other enterprises (15%). Among the non-agricultural ones, it was the Government/ private service which contributed 57% of the total household income, followed by wage labour which made up for roughly 26% of the total income. Rise in Average Monthly Expenditure: The average monthly expenditure of rural households rose significantly from Rs. 6,646 in 2016-17 to Rs. 11,262 in 2021-22. The agricultural households reported a relatively higher consumption expenditure of Rs. 11,710 than Rs. 10,675 for non-agricultural households. In states like Goa and Jammu & Kashmir, the monthly household expenditure exceeded Rs. 17,000. Overall, agricultural households demonstrated both higher income and expenditure levels than non-agricultural households. Increase in Financial Savings: The annual average financial savings of households increased to Rs. 13,209 in 2021-22 from Rs. 9,104 in 2016-17. Overall, 66% of households reported saving money in 2021-22, compared to 50.6% in 2016-17. Agricultural households outperformed non-agricultural ones in terms of savings, with 71% of agricultural households reporting savings during the reference period, compared to 58% of non-agricultural households. In 11 states, 70% or more households saved money, with Uttarakhand (93%), Uttar Pradesh (84%), and Jharkhand (83%) leading. In contrast, states like Goa (29%), Kerala (35%), Mizoram (35%), Gujarat (37%), Maharashtra (40%), and Tripura (46%) saw less than half of households reporting savings. Kisan Credit Card (KCC): The Kisan Credit Card (KCC) has emerged as a key tool for promoting financial inclusion in the rural agricultural sector, showing substantial growth in coverage over the past five years. In total, 44% of agricultural households were found to possess a valid Kisan Credit Card (KCC). Among those with land holdings greater than 0.4 hectares or those who had taken any agricultural loans from banks in the past year, 77% reported having a valid KCC. Insurance Coverage: The percentage of households with at least one member covered by any form of insurance increased significantly from 25.5% in 2016-17 to 80.3% in 2021-22. This means that four out of every five households had at least one insured member. Agricultural households outperformed their non-agricultural counterparts by a margin of roughly 13 percentage points. Among different types of insurance, vehicle insurance was the most prevalent, with 55% of households covered. Life insurance coverage extended to 24% of households, with agricultural households showing slightly higher penetration (26%) compared to non-agricultural ones (20%). Pension Coverage: Pensions significantly enhance recipients’ quality of life by offering financial support and reducing dependency on others, thereby boosting their self-worth and confidence. The percentage of households with at least one member receiving any form of pension (such as old age, family, retirement, or disability) increased from 18.9% in 2016-17 to 23.5% in 2021-22. Overall, 54% of households with at least one member over 60 years old reported receiving it, highlighting the importance of pensions in supporting elderly members of society. Financial Literacy: The percentage of respondents demonstrating good financial literacy increased by 17 percentage points, rising from 33.9% in 2016-17 to 51.3% in 2021-22. The proportion of individuals exhibiting sound financial behavior- such as managing money effectively, making informed financial decisions, tracking expenses, and paying bills on time—also increased from 56.4% to 72.8% during the same period. When assessed on financial knowledge, 58% of respondents from rural areas and 66% from semi-urban areas answered all questions correctly. The NAFIS 2021-22 results highlight the remarkable strides made in rural financial inclusion since the last survey in 2016-17. Rural households have experienced notable improvements in income, savings, insurance coverage, and financial literacy. The Government welfare schemes like Pradhan Mantri Kisan Samman Nidhi, Pradhan Mantri Kisan MaanDhan Yojana, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Pradhan Mantri Awas Yojana-Gramin (PMAY-G), Pradhan Mantri Gram Sadak Yojana (PMGSY), Deendayal Antyodaya Yojana- National Rural Livelihoods Mission (DAY NRLM), Deendayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) have significantly contributed to improving the lives of the rural population. As access to financial services continues to expand, there is a bright outlook for the economic empowerment of these households. The survey underscores the importance of ongoing support and investment in rural development, paving the way for a more prosperous and financially secure future for India’s rural population.

An evergreen loan is a loan that does not require the repayment of principal during the life of the loan, or during a specified period of time. In an evergreen loan, the borrower is required to make only interest payments during the life of the loan. Evergreen loans are usually in the form of a line of credit that is continuously paid down, leaving the borrower with available funds for credit purchases. Evergreen loans may also be known as “standing” or “revolving” loans. What does evergreening of loans mean? The evergreening of loans is a term in which banks try to revive a loan that is on the verge of default by granting further loans to the same borrower. It is a form of zombie lending in which banks provide more loans to the borrowers to stop them from turning into huge non-performing assets (NPAs). The process of evergreening of loans is typically a temporary fix for a bank covering up the real status of stressed loans. How an Evergreen Loan Works Evergreen loans can take many forms and are offered through varying types of banking products. Credit cards and checking account overdraft lines of credit are two of the most common evergreen loan products offered by credit issuers. Evergreen loans are a handy type of credit because they revolve, meaning users do not need to reapply for a new loan every time they need money. They can be used by both consumers and businesses. Non-revolving credit differs in that it issues a principal amount to a borrower when a loan is approved. It then requires that a borrower pay a scheduled amount over the duration of the loan until the loan is paid off. Once the loan is repaid, the borrower’s account is closed, and the lending relationship ends. What are the evergreening methods? Bringing two lenders together to evergreen each other’s loans by sale and buyback of loans or debt instruments. Good borrowers being persuaded to enter into structured deals with a stressed borrower to conceal the stress. Use of internal or office accounts to adjust borrower’s repayment obligations. Renewal of loans or disbursement of new/additional loans to the stressed borrower or related entities closer to the repayment date of the earlier loans. Why do banks follow evergreening of loans? If an account turns into a non-performing asset (NPA), banks are required to make higher provisions which will impact their profitability. To avoid classifying a loan as an NPA, banks adopt the evergreening of loans. Banks offer fresh loans to borrowers on the verge of default to ensure they repay an old loan. Banks delay the recognition of losses through evergreening process. Banks also avoid provisioning to cover loan losses and increase their liquidity. FAQs What is the “evergreening of loans”? Evergreening of loans refers to the practice where banks or financial institutions extend new loans to borrowers to help them repay their existing debt. This gives the appearance that the borrower is meeting their obligations, while in reality, the debt is just being rolled over without any real repayment. Is evergreening of loans legal? Evergreening of loans is not illegal per se, but it is considered a risky and unhealthy banking practice. Regulatory authorities such as the Reserve Bank of India (RBI) discourage evergreening as it distorts the financial health of banks and can lead to larger financial instability over time.