Context: The Indian government is considering the establishment of a global trade promotion body aimed at boosting exports from Micro, Small, and Medium Enterprises (MSMEs).

Need

• The move comes on the backdrop of India's rising trade deficit and the urgent need to boost exports.

• There has been a demand and also a consideration for a trade promotion body that would have offices abroad and work hands-on in terms of promoting exports for MSMEs who do not the economic muscle to promote their goods and establish a market abroad on their own.

• Although there are sector-specific trade promotion bodies in the country along with the India Trade Promotion Organisation (ITPO), they do not have a robust presence globally and mostly work out of India.

Key-Highlights of the Proposal

• Proposal Title: Global Trade Promotion Organization (GTPO)

• Objective: To enhance MSME exports and address India’s rising trade deficit.

• Inspiration: Modeled after the Japan External Trade Organization and the Australian Trade and Investment Commission.

• Structure: The GTPO will have branch offices in major global economies.

• Functionality: It will assist MSMEs with registration, licensing, and certification for exports, and facilitate business opportunities in collaboration with Indian consulates abroad.

Reasons Behind the Initiative

• Trade Deficit: India's increasing trade deficit necessitates a strategic approach to boost exports, particularly from the MSME sector.

• Lack of Global Presence: Existing trade promotion bodies lack a robust international presence, which limits their effectiveness in promoting MSME exports.

• Economic Muscle: MSMEs often lack the resources to market their products internationally, and a dedicated trade promotion body can bridge this gap.

Expected Benefits for MSMEs

• One-Stop Solution: The GTPO will provide comprehensive support to MSMEs, from export documentation to market access.

• Increased Exports: By facilitating participation in global exhibitions, trade shows, and buyer-seller meets, the GTPO aims to increase MSME exports significantly.

• Economic Impact: Enhanced exports will contribute to reducing the trade deficit and boosting India's GDP, given that MSMEs contribute about 45% to the country’s total exports.

Challenges and Considerations

• Coordination: Effective coordination between the GTPO and various government ministries is crucial for the success of the initiative.

• Global Competition: Indian MSMEs will need to compete with well-established global players, necessitating high-quality products and competitive pricing.

• Sustainability: The GTPO must ensure sustainable growth for MSMEs without compromising on quality and ethical standards.

Broader Implications

• Employment: Enhanced MSME exports can lead to increased employment opportunities, supporting over 110 million people currently employed by the sector.

• Sectoral Growth: Specific sectors like handicrafts, textiles, ayurveda, leather goods, and imitation jewelry, which have significant global markets, can see substantial growth.

• Economic Diversification: Diversifying export markets will reduce reliance on a few countries and spread economic risk.

Required Measures for Effective Implementation

• Policy Support: The government must provide continuous policy support, including financial incentives and simplified regulatory processes.

• Capacity Building: Training and capacity-building programs for MSMEs will be essential to enhance their competitiveness in global markets.

• Monitoring and Evaluation: Regular monitoring and evaluation of the GTPO’s performance will ensure that it meets its objectives and adapts to changing market conditions.

Why MSMEs are important

• MSMEs are a key constituent of the Indian exports ecosystem, contributing about 45% to the country's total exports, according to a Global Trade Research Initiative (GTRI) report. They also account for around 38% of India's manufacturing output.

• MSMEs also contribute about 27% to India's GDP and employ more than 110 million people, making it the largest employer after agriculture (about 148 million employed, according to GTRI).

• As per NITI Aayog report on MSME exports they said "Exports represent an enormous and under-utilized opportunity for the MSME sector. Sectors where Indian MSMEs can participate and compete in export markets include handicrafts, handloom textiles, ayurveda and herbal supplements, leather goods, imitation jewellery and wooden products. Globally, these sectors constitute substantial markets exceeding $340 billion, whereas their domestic market is considerably smaller."

Schemes for MSMEs

• The Ministry of Micro, Small and Medium Enterprises implements various schemes for the growth and development of MSME sector and training and market assistance to MSMEs. The schemes/programmes inter alia include

1. Prime Minister’s Employment Generation Programme (PMEGP)

2. Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE)

3. Micro and Small Enterprises-Cluster Development Programme (MSE-CDP)

4. Entrepreneurship Skill Development Programme (ESDP)

5. Procurement and Marketing Support Scheme (PMS)

6. National SC/ST Hub (NSSH)

Road Ahead

• Noting that over time, small firms have encountered difficulties in tapping into export markets due to the inherent obstacles posed by economies of scale, the report said that it's more challenging for small enterprises to enter foreign markets, adhere to compliance requirements, achieve cost-effective production, and efficiently manage logistics for clients.

• Exporting is crucial for Indian MSMEs to break away from dwarfism and unlock their true growth potential. Exporting can allow 54 lakh (5.4 million) manufacturing MSMEs to tap into new markets and expand their customer base, leading to increased revenue and profit.

Context: The 53rd GST Council meet was held on June 22nd , 2024, chaired by the Union Finance Minister and attended by state finance ministers, focused on tax amendments, Aadhaar biometric integration, and exemptions in railway services.

Key Recommendations

• Railway services: The services offered by the Indian Railways such as platform ticket sale, retiring room facility, waiting rooms, cloakroom facilities, and battery-operated car services are exempted from GST.

• Hostel services: The GST Council exempted services by way of hostel accommodation outside educational institutions to tune Rs. 20,000 per person per month and an exemption can be availed only if the stay is up to 90 days.

• Interest on penalties on tax notice: The GST Council has recommended waiver of interest on penalties on tax demand notice issued under Section 73 of the GST Act for fiscal years 2017-18, 2018-19, and 2019-20.

• Input tax credit: The GST Council gave its nod for an extension for availing input tax credit (ITC) on any invoice or debit note.

• GST on carton boxes: The GST Council has recommended the reduction of GST on all kinds of carton boxes from 18 per cent to 12 per cent.

• GST return: The GST Council extended the deadline for furnishing returns from April 30 to June 30 for the fiscal year 2024-25 and subsequent years.

• Solar cookers: A uniform GST rate of 12 per cent recommended for solar cookers -- both single or dual energy source.

• Milk cans: The GST Council recommended a uniform GST rate of 12 per cent on all milk cans, regardless of their material (steel, iron, aluminum).

• Sprinklers: All types of sprinklers, including fire and water sprinklers, will attract a uniform GST rate of 12 per cent.

About GST Council

• Goods & Services Tax Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.

• As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.

• The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2016, for the introduction of Goods and Services Tax in the country was introduced in the Parliament and passed by Rajya Sabha on 3rd August 2016 and by Lok Sabha on 8th August 2016.

• GST Council is an apex member committee to modify, reconcile or procure any law or regulation based on the context of goods and services tax in India.

• The GST council is responsible for any revision or enactment of rule or any rate changes of the goods and services in India.

The council contains the following members:

• Union Finance Minister (as chairperson)

• Union Minister of States in charge of revenue or finance (as members)

• The ministers of states in charge of finance or taxation or other ministers as nominated by each state’s government (as members).

Matters on which GST Council makes recommendations

• Taxes, cesses, and surcharges levied by the Centre, States and local bodies which may be subsumed in the GST;

• Goods and services which may be subjected to or exempted from GST;

• Model GST laws, principles of levy, apportionment of IGST and principles that govern the place of supply;

• Threshold limit of turnover below which goods and services may be exempted from GST;

• Rates including floor rates with bands of GST;

• Special rates to raise additional resources during any natural calamity;

• Special provision with respect to Arunachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand;

• Any other matter relating to the goods and services tax, as the Council may decide.

Article 279A of the Indian Constitution gives power to the President of India to constitute a joint forum of the Centre and States called the GST Council, consisting of:

• Union Finance Minister as Chairperson

• Union Minister of State, in-charge of Revenue of finance

• Minister in-charge of finance or taxation, or any other Minister nominated by each State Government

• It is an apex committee to modify, reconcile, or make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected to or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.

Decisions in the GST Council are taken during its meetings.

• One half of the total number of members of the GST Council shall constitute the quorum at its meeting.

• Each decision of the council must be supported by a majority of not less than three-fourth of weighted votes of the members present and voting.

• The vote of the Central Government shall have a weightage of 1/3rd of the votes cast, and the votes of all the State Governments taken together shall have a weightage of 2/3rd of the total votes cast in that meeting.

Secretariat:

• The Secretariat manages the GST Council.

• It is manned by officers taken on deputation from both the Central and State Governments.

• The entire cost of managing the Secretariat is borne by the Central Government.

• The Ex-officio Secretary to the GST Council is the Revenue Secretary of India.

• The office of the council is located in New Delhi.

S&P Global Ratings has retained its growth forecast for India at 6.8% for the FY25.

The rating agency cited high interest rates and lower fiscal boost as factors that will temper demand in the non-agricultural sectors, moderating growth from the previous fiscal year's strong performance.

S&P revised its GDP growth forecast for India in FY24 to 8.2%, acknowledging the country's economic growth, which continues to surprise on the upside.

The agency projects India's economy to grow at 6.9% and 7% in FY26 and FY27, respectively.

WikiLeaks founder Julian Assange has landed back home in Australia, a free man for the first time in 12 years, after a US judge signed off on his unexpected plea deal on Wednesday morning(26 June 2024).

Cheers erupted from supporters gathered at Canberra Airport in the Australian capital as Assange disembarked the aircraft. He waved to the crowds as he walked across the tarmac.

As he approached the terminal, his wife Stella emerged with a broad smile on her face. Assange pulled her into hug, lifting her off the floor before the pair kissed.

Kozhikode in north Kerala, known for its rich cultural heritage, was on Sunday(23 June 2024) officially declared as India's first UNESCO 'City of Literature'.

In October 2023, Kozhikode had earned a place in the 'Literature' category of the UNESCO Creative Cities Network (UCCN). 

State Local Self Government Department (LSGD) Minister, M B Rajesh, in an official event here announced the achievement of Kozhikode which earned the place in the 'Literature' category of the UCCN.

Rajesh described Kozhikode as a city with a soul, characterised by humanity, harmony, a strong sense of justice and freedom of expression.

The state government also announced that from coming year, June 23 will be celebrated as the 'City of Literature' Day of Kozhikode, a place known for literary greats like late S K Pottakkad and Vaikom Muhammed Basheer.

India is hosting a global event in sugar sector ‘ISO Council Meeting’ in New Delhi from 25th till 27th June, 2024.

• Delegates from over 30 countries and representatives of various international organizations are gathering to discuss crucial issues in the sugar and biofuel sectors.
• Recognizing India's status as the world's largest consumer and second-largest producer of sugar, the ISO Council has nominated India as the Chair of the organization for 2024.
• India is kicking off the series of events with an industrial tour for international delegates to a grain-based distillery in Muzaffarnagar,
• Uttar Pradesh, on June 24, 2024, showcasing the country's adoption of the latest technology in biofuel production and other by-products.
• On June 25, 2024, a workshop titled ‘Sugar and Biofuels – Emerging Vistas’ will be held at Bharat Mandapam. The workshop will be inaugurated by Shri Pralhad Joshi, Union Minister of Consumer Affairs, Food and Public Distribution, and New & Renewable Energy.

Millions of pink flamingos transform the alkaline waters of Lake Natron in northern Tanzania into a dazzling display daily.

• This spectacle is under threat due to human activities and changing weather patterns, endangering the world's largest migratory bird colony.
• Lake Natron, a Ramsar site on the Tanzania-Kenya border, is uniquely suited for flamingos with its warm, hypersaline waters. However, agriculture, pollution, and climate change are disrupting this delicate ecosystem.
• Senior ecologist John Sule notes that changing water levels and salinity, due to extreme weather, make nesting difficult for flamingos and affect their food supply, causing a population decline.
• Prolonged dry seasons further concentrate salinity, worsening food shortages for the birds. Despite a halted soda ash extraction project in 2008, threats to this habitat persist.

Unincorporated enterprises in the manufacturing sector lost nearly 1.8 million establishments and shed 5.4 million jobs between July 2015-June 2016 and October 2022-September 2023, an analysis of the fact sheet on ‘Annual Survey of Unincorporated Sector Enterprises (ASUSE)’ and the comparable 73rd round survey in 2015-16 by the National Statistical Office(NSO) showed.

• An estimated 17.82 million unincorporated enterprises operated in the manufacturing sector in October 2022-September 2023, nearly 9.3 per cent down from 19.7 million unincorporated enterprises in July 2015- June 2016.
• The number of workers engaged by these establishments declined by nearly 15 per cent to 30.6 million (2022-23) from 36.04 million (2015-16).
• Business Standard reported on June 15 that even after adding 11.7 million workers in the October 2022-September 2023 period from the pandemic lows in April 2021-March 2022, total workers employed in the vast informal sector in India -at 109.6 million — still remained below the pre-pandemic period.

The Kerala Assembly unanimously passed a resolution proposing a constitutional amendment to change the state’s name to “Keralam”. 

Chief Minister Pinarayi Vijayan moved the resolution calling for invoking Article 3 of the Constitution to make amendments in the First Schedule, which lists the names of the states.

In August 2023, the Kerala Assembly passed a similar resolution, but the Centre had sent it back due to procedural gaps.

Srinagar City in Jammu and Kashmir has been recognised as the 'World Craft City' for its arts and cultural heritage by World Crafts Council.

Global foreign direct investment (FDI) fell by 2% to $1.3 trillion in 2023 amid an economic slowdown and rising geopolitical tensions, according to the the UNCTAD's  World Investment Report 2024.
But the report highlights that the decline exceeds 10% when excluding the large swings in investment flows in a few European conduit economies.

• The downturn in project finance affected sustainable development, with new funding for Sustainable Development Goals (SDGs) sectors dropping over 10%, particularly in agrifood and water.
• This hampers efforts to achieve the 2030 Agenda and calls for urgent policy action to revamp sustainable development finance.
• The report emphasizes that business facilitation and digital government solutions can address low investment by creating a transparent and streamlined environment.
• It highlights significant growth in online services and information portals, saying such tools also support broader digital government development, benefiting developing nations in particular.

Union Minister of Health and Family Welfare Jagat Prakash Nadda launched the National STOP Diarrhoea Campaign 2024 at a function in New Delhi.

• He launched the campaign by distributing oral rehydration salts (ORS) and zinc tablets to children in presence of Minister of States for Health Anupriya Patel and Patraprao Jadhav.
• The two-month campaign will begin from the 1st of July and continue till the 31st of August.
• The goal behind the STOP Diarrhoea Campaign is to attain zero child deaths due to childhood diarrhoea.
• While the existing diarrhoea strategy entailed a two-week campaign, the new strategy involved a two-month long campaign with the pre-positioning of two ORS packets and zinc as a co-packaging for under-5 children.

Lt Gen NS Raja Subramani is set to be the next Vice Chief of Army Staff with the government clearing his appointment to the post, official said.

• The officer, who is presently helming the Army's Central Command, will succeed Lt Gen Upendra Dwivedi.
• Lt Gen Dwivedi, currently serving as the Vice Chief, will be the next Chief of the Army Staff when incumbent Gen Manoj Pande retires on June 30.
• Lt Gen Subramani has been appointed as the next Vice Chief, military sources

Eastern Coalfields Limited, under direction of the Ministry of Coal, has embarked on an innovative pilot project for underground coal gasification at the Kasta coal block in Jamtara, Jharkhand.

This first ever  initiative aims to revolutionise the coal industry by using in-situ coal gasification to convert it into valuable gases such as methane, hydrogen, carbon monoxide, and carbon dioxide.

These gases can be utilised to produce synthetic natural gas, chemical feedstocks for fuels, fertilisers, explosives, and other industrial applications.

The Bureau of Indian Standards (BIS) has issued two new standards: IS 18590: 2024 and IS 18606: 2024 for EVs, focusing specifically on their powertrains. These new standards aim to improve the overall safety of EVs in India.

• These guidelines apply to a range of vehicles, including two-wheelers, four-wheelers, goods trucks, e-rickshaws, and e-karts.

New Regulations:

• IS 18590: 2024: Focuses on the essential components of electric cars, buses, and trucks, emphasizing the powertrain, including motor and transmission systems.
• IS 18606: 2024: Targets critical components of EVs, highlighting battery safety and performance to ensure robustness and security.

About BIS

The Bureau of Indian Standards (BIS), formerly known as the Indian Standards Institution (ISI), is a government organisation in charge of standardising and certifying products, processes, systems, and services. It falls within the purview of the Ministry of Consumer Affairs, Food and Public Distribution.