Paving the way for Co-Operative Development

The financial co-operative institutions, which trace back their origins to the 19th century, were established across jurisdictions with the objective of extending loans at affordable prices to the unbanked population. Amongst such institutions, the services of credit unions are exclusive for their members, who share a common profession, entrepreneurship interests or location. In contrast, co-operative banks offer services to non-members as well. There is immense potential for development and empowerment of farmers, agriculture and rural areas of the country in the cooperative sector, spurring the government agencies to take many unprecedented decisions to empower the sector with the mantra of ‘Sahakar Se Samriddhi’. In just around a year of its existence, many old demands and problems of the cooperative sector have been resolved by the new Ministry of Cooperation.

The rural co-operative credit system in India is primarily mandated to ensure flow of credit to the agriculture sector. It comprises short-term and long-term co-operative credit structures. The short-term co-operative credit structure operates with a three-tier system – Primary Agricultural Credit Societies (PACS) at the village level, Central Cooperative Banks (CCBs) at the district level and State Cooperative Banks (StCBs) at the State level. PACS are outside the purview of the Banking Regulation Act, 1949 and hence not regulated by the Reserve Bank of India. During last one year, RBI has taken important steps to increase credit flow through cooperative banks, announcing three very important policy decisions for the sector.

Firstly, the limit of individual housing loan has been doubled for Urban Co-operative Banks and more than doubled for Rural Co-operative Banks. With this decision, the individual housing loan limit for tier-1 Urban Cooperative Banks (UCBs) has now been increased from ₹30 lakh to ₹60 lakh, for tier-2 UCB from ₹70 lakh to ₹1.40 crore, and for Rural Cooperative Banks (RCBs) these have been increased from ₹20 lakhs and ₹30 lakhs to ₹50 lakhs and ₹75 lakhs respectively. In another major decision, RCBs have been allowed to lend to Commercial Real Estate Residential Housing sector, which will increase the scope of our Rural Co-operative Banks and also give impetus to the resolution of providing affordable houses to the people, facilitating better flow of credit to the housing sector, which caters to the needs of lakhs of people especially from the middle class. In the third major decision, now UCBs will be allowed to provide door step banking facility to their customers like commercial banks.

These decisions have given new impetus to the development of the cooperative sector. The increase in credit flow to the housing sector through co-operative banks will lead to an increase in economic activity, increase in capital formation and employment generation, which will have a multiplier effect on the economy. Now, with these changes made by the RBI, cooperative banks will also get a level playing field in the competitive banking sector. Now one can say that co-operative model can be emulated in various other sectors with a continuous push from the government for boosting the economy of the country.

Future-proofing Pharmacy of the World

The world witnessed India’s quest to combat COVID-19 not just strategically, economically, socially and with regard to health provisions and hospitality, but also bio-technologically as it came up with many successful vaccines. This is no mean feat for a country which had been considered very poor in the domain of research, especially bio-technology and medicine. Now, it seems it is a different world out here. Today, PM Narendra Modi inaugurated the two-day Bio-Tech Startup Expo 2022 being held in New Delhi. Further, India recently saw inauguration of the National Facility for Gene Function in Health and Disease (NFGFHD) in Pune. In Parallel, North India’s first biotech park was inaugurated in J&K’s Kathua along with the launch of a Single National Portal For Biotech Startups by Union Minister of State For Science and Technology Dr. Jitendra Singh. In a recent development, IISC scientists have also designed a new class of artificial peptides or miniproteins that they say can render viruses like SARS-CoV-2 inactive. With such a motivated and encouraging developments, India is beaming with bio-technological breakthroughs, slowly forming a favorable ecosystem for both research and innovation in the country.

Prospects are galore for the sector as it is one of the most demand driven sectors. The campaigns for ease of living in India over the years, have opened up new possibilities for the biotech sector. The developments in health, agriculture, energy, natural farming, bio-fortified seeds are creating new avenues for it. However, we still need to work on the efficiency and productivity and cost-effectiveness of agriculture, nutritional security, molecular medicine, environmentally sustainable technologies, scientific and technological empowerment of human resource, a strong infrastructure for research and commercialization, the relevant knowledge base, nurturing the leads of potential utility and bringing the bio-products to the market place to take the sector to new heights.

Five big reasons why India is being considered a land of opportunities in the field of biotech are- its diverse population and diverse climatic zones, talented human capital pool, increasing efforts for ease of doing business, the demand for bio-products and the track record of its success. Furthermore, to transcend government-centric approach, the Centre is encouraging a culture of providing new enabling interfaces. Platforms like BIRAC are being strengthened. The government, through new institutions, is bringing together the best minds of the industry on a single platform. Trust in the skill and innovation of India’s IT professionals in the world is at new heights. The country gets new breakthroughs from research and academia, with the industry helping in what is a real world view and the government providing the necessary policy environment and necessary infrastructure.

The encouraging initiatives being continuously taken by India for the sector, has manifested in creating robust startup ecosystem in biotech sector also. In the last 8 years, the number of biotech start-ups in the country has increased to more than five thousand. While, the total number of startups of all kinds, has risen to 70 thousand from a few hundreds in last 8 years (operating in about 60 different industries). This way every 14th startup operates in the bio technology sector with more than 1100 such biotech startups emerging last year itself. The shift of talent towards the sector induces a great deal of investment, resulting in the number of investors being risen by 9 times and biotech incubators and funding for them being increased by 7 times. The number of biotech incubators has increased from 6 in 2014 to 75 now. Biotech products have also increased from 10 to more than 700 today.

A frontline area of science with immense potential for the benefit of the human kind, biotechnology sector is helping to heal the world by harnessing nature’s unfathomable potential and people’s very complex genetic makeup. By reducing rates of infectious disease, it is saving millions of lives and changing the odds of life-threatening conditions by tailoring treatments to minimize the health risks and side effects by creating more precise tools. These are the reasons why India’s bio-economy has grown 8 times in the last 8 years and from 10 billion dollar to 80 billion dollar. More importantly, India is not too far from reaching the league of top-10 countries in Biotech’s global ecosystem.

Managing Inflation – Handling Global Troubles Locally

NRIs report price of gas in Bay Area spiking from around $1.3/gallon in March this year to current rate of around $6/gallon. The lingering conflict between Russia and Ukraine has thrown nagging challenges which accentuate the existing supply chain disruptions, causing food, energy and commodity prices being elevated, inflation to hit decadal highs and persistence of demand-supply imbalances. This globalisation of inflation makes it mandatory for the central banks across the globe to reorient and recaliberate their monetary policies. Emerging market economies are facing even bigger challenges from increased market turbulence, monetary policy shifts in advanced economies and their spillover effects, which slow the process of economic recovery in emerging economies like India as is seen by the GDP growth forecasts of World Bank, Moody’s Investors Service, S&P Global Ratings, Fitch, IMF, ADB and RBI.

The protracted conflict in Europe and the accompanying sanctions being increasingly imposed by the western world have kept global commodity prices elevated across the board, exerting sustained upward pressure on consumer price inflation, well beyond the targets in many economies. The ongoing conflict is also turning out to be a dampener for global trade and growth. The steps taken by the advanced economies are also leading to heightened volatility in global financial markets, causing corrections in major equity markets, sizeable swings in sovereign bond yields, US dollar appreciation, capital outflows from emerging markets like India. Globally, stagflation concerns are also growing, which also spurs volatility in global financial markets.

Navigating through difficult times makes it necessary to be sensitive to the new realities and incorporate them into thinking and actions. After much debate and discussions over all possible dimensions of macroeconomic situations and newer challenges being thrown upon by different geo-political and economic happenings globally, today the RBI took a unanimous decision to increase the policy repo rate by 50 basis points to 4.90% with immediate effect. Inflationary pressures going much beyond the upper tolerance level- a gradual, orderly and calibrated rise in repo rates, is something that the RBI is required to take account of, without losing sight of the growth requirements and disturbing macroeconomic stability. However, despite these challenging times, the Indian economy has remained resilient, ably supported by strong macroeconomic fundamentals and buffers. The recovery has gained momentum despite the pandemic and the conflict in Europe.

As the RBI is of the opinion that inflation is likely to remain above the upper tolerance band of 6% through the first three quarters of 2022-23. The reduction in excise duties on petrol and diesel will certainly help in mitigating the inflationary pressures to some extent, however further monetary policy measures appeared necessary to anchor the inflation expectations. According to the provisional estimates released by the NSO on May 31, 2022, India’s real GDP growth in 2021-22 is estimated at 8.7%. The level of real GDP in 2021-22 has exceeded the pre-pandemic (2019-20) level. The recovery in domestic economic activity also remains firm, with growth impulses getting increasingly broad-based. Manufacturing and services PMIs for May point towards further expansion of activity, corroborated by encouraging movements in railway freight and port traffic, domestic air traffic, GST collections, steel consumption, cement production and bank credit. While urban demand is recovering, rural demand is also gradually improving. The contact-intensive services related to trade, hotels and transport have also recovered substantially. Capacity utilisation in the manufacturing sector increased further to 74.5% in the fourth quarter of 2021-22, which is likely to increase further in 2022-23, which is sure to spur the investment activities. Government’s capex push, pick-up in bank credit, persisting growth in imports of capital goods, buoyancy in merchandise exports with double digit growth for the fifteenth successive month in May and high growth of non-oil and non-gold imports are the indications of a sustained recovery in the Indian economy. Hence, there appears no trouble even when RBI raises repo rates in a calibrated fashion.

Tribal Research for Conservation and Meaningful Development

India has established ‘National Tribal Research Institute (NTRI) in Delhi to focus on the development of tribes and conservation of their art, culture and heritage. The newly built institute is positioned as to become the nerve centre of tribal research issues and matters in academic, executive and legislative fields as around 10.4 crores tribals living in different parts of the country love their art, craft and cultural threads to be preserved and promoted. Scheduled Tribes (ST) constituting approximately 8.6% of the population of India, also have very close relations with nature and forest geography of the country and may provide great insights.

Realising the importance, the Government of India has recently, focused much on the development of tribes and conservation of their heritage and culture as a priority. The Ministry of Tribal Affairs in line with this vision and its enduring commitment for welfare of tribals, geared itself to ensure sectoral development through enhanced allocation of financial resources, convergence of efforts, re-engineering of planning and implementation mechanism of the Ministry. With an enhanced availability of resources the Ministry is now charting out a new progress path with greater commitment to ensure holistic development of tribal communities. Presently, Tribal Research Institute (TRI) is the research body of the Ministry of Tribal Affairs at the state level, however it focuses more on gathering knowledge and research and less as a think tank for tribal development and preservation of tribal cultural heritage.

NTRI and similar institutions of national eminence have a great role in nation-building as collaboration and networking with reputed research institutes, universities, organizations, academic bodies and resource Centres is essential to further the cause effectively. Monitoring projects of tribal research institutes, centres of excellence and research scholars of NFS and setting up the norms for improvement in the quality of research and training, will pave the way for better understanding of socio-cultural dynamics of the society, history, nature and geography, as tribals are widely considered to be the original inhabitants of the land.

The new institute would also provide policy inputs to the Ministry of Tribal Affairs as well as state welfare departments, design studies and programs that improve or support socio-economic aspects of tribal lifestyles and help in creating and maintaining the database of PMAAGY. It will also provide guidelines in setting and running of tribal museums and showcasing rich tribal cultural heritage of India under one umbrella.

In recent years, tribal artisans, tribal produce and tribal dance troupes have attracted attention as they are invited to showcase their indigenous products and performances across the country. The scheme of Mechanism for Marketing of Minor Forest Produce (MFP) through Minimum Support Price (MSP) and Development of Value Chain for MFP covers various activities. Hence, expanding knowledge base about tribals, their art, culture, heritage and produce is the need of the hour.

Harnessing Digital Strength for Credit Delivery

Launch of recent digital platforms by the government like DigiLocker, eNAM (e-trading platform for the National Agriculture Market), AI-driven research portal SUPACE (Supreme Court Portal for Assistance in Courts Efficiency), CoWIN platform, National Single Window Platform, etc. which have worked wonders as far as information delivery, public use, notice circulations, availing services, bookings and record-keeping, etc, is concerned. These have also become a means of transparency and accessibility and even grievance addressal in some cases. The National Data & Analytics Platform (NDAP) that was launched by NITI Aayog for free public use recently, ensures the same. It makes data accessible, interoperable, interactive, and available on a user-friendly platform, which intends to democratise access to public government data. ‘Jan Samarth’ portal is yet another skyrocketing idea of the Government to cut the clutter and establish a direct connect with public.

Launching of the national portal for credit linked government schemes – ‘Jan Samarth’, may prove to be a game changer for the economy, as it gives a big boost to the inclusive growth and development of various sectors by guiding and providing the beneficiaries with the right type of government benefits through simple and easy digital processes. It promises to improve the ease of living for those who presently have to face much hassle in the lending process. In absence of human interventions in the approval – red tap, human eccentricities and corruption would cease to exist in the process, paving way for a transparent setup, greater growth of the economy and judicious and rational utilization of the human resources.

Being first of its kind platform, ‘Jan Samarth’ is a one stop digital portal linking government credit schemes, which directly connects beneficiaries to lenders. The portal ensures end to end coverage of all the linked schemes by bringing all kinds of government schemes on a single platform, making them easily accessible for the people and without much puzzle. The portal is a universal platform for delivery of various schemes being run by the various ministries and departments of the government. Working on the ideals of minimum government maximum governance, this nationwide portal plans to initially onboard 13 credit linked government schemes and the offerings will gradually be expanded, which will depend on compatibility, since a few Centre sponsored welfare and credit linked schemes involve multiple government departments/agencies/ministries.

The portal uses smart analytics and technologies that provide guidance to beneficiaries for checking subsidy, eligibility and the auto recommendation system that recommends the suitable schemes as per the requirements and credentials of the beneficiaries. The entire lending process is automated and based on digital verifications to make it simple, speedy, and hassle-free. Being integrated with the governments’ Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), the new portal helps in receiving in-principal approval of loans for MSMEs and after receiving in-approval, the loan is expected to be disbursed in a few days as the loan application process doesn’t have any human interventions, rather it depends on advanced algorithms to analyse data points from sources like income tax return, GST data, banks accounts among others.

Jan Samarth Portal has multiple integrations with UIDAI, CBDT, NSDL, LGD and other such organisations to make the processes smooth for both beneficiaries and lenders. It does enable beneficiaries to choose from multiple options being offered by various lending financial institutions on the portal. Presently, the platform has more than 10 nodal agencies and over 125 lenders with four broad loan categories – education, business, livelihood and agriculture related infrastructure loan. To avail the loan, beneficiaries first need to check their eligibility by providing answers to few simple questions under the selected loan category. When found eligible, they can proceed to provide the required details and documents. Upon submitting the details, people are recommended to select the schemes based on their needs and then they need to proceed to apply online for the selected scheme to receive digital approval.