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The Reserve Bank of India (RBI) decided to withdraw ₹2,000 denomination banknotes from circulation in pursuance of its “Clean Note Policy”.
However the ₹2,000 notes will continue to be legal tender. A similar withdrawal of notes from circulation was undertaken in 2013-2014.
In a reminder of the demonetisation days when the banking channel was overwhelmed by the massive crowd thronging into the branches to exchange banknotes, the decision to withdraw ₹2,000 notes is also likely to strain the system besides creating anxiety and inconvenience to the public.
The central bank has advised the public to deposit ₹2,000 notes into their bank accounts and/or exchange them into banknotes of other denominations at any branch.
Deposit into bank accounts can be made in the usual manner, that is, without restrictions and subject to extant instructions and other applicable statutory provisions.
For operational convenience and to avoid disruption of regular activities of banks, exchange of ₹2,000 notes into banknotes of other denominations can be made up to a limit of ₹20,000 at a time at any bank starting from May 23, 2023.
To complete the exercise in a time-bound manner and to provide adequate time to the members of public, all banks have been directed to provide deposit and/or exchange facility for ₹2,000 notes till September 30, 2023.
The facility for exchange of ₹2,000 notes up to the limit of ₹20,000 at a time will also be available at the 19 Regional Offices of the RBI having “Issue Departments” from May 23, 2023. Banks have been asked to stop issuing ₹2,000 notes with immediate effect.
Members of the public are encouraged to utilise the time up to September 30, 2023 to deposit and/or exchange the ₹2,000 notes.
The ₹2,000 banknote was introduced in November 2016 “primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all ₹500 and ₹1,000 banknotes in circulation at that time.
The objective of introducing ₹2,000 notes was met once banknotes in other denominations became available in adequate quantities.
The printing of ₹2,000 notes was stopped in 2018-19. The RBI said about 89% of the ₹2,000 notes were issued prior to March 2017 and are at the end of their estimated life span of 4-5 years.
Centre reverses Supreme Court order, gives Delhi Lieutenant Governor final say on bureaucrats (Page no. 1)
(GS Paper 2, Polity and Governance)
The Union government brought an ordinance designating the Lieutenant Governor (L-G) as the administrator of Delhi who will have the final say on the postings and transfer of all bureaucrats serving the Delhi government.
The ordinance, promulgated by President Droupadi Murmu, seeks to amend the Government of National Capital Territory (NCT) of Delhi Act, 1991 and effectively negates the May 11 Supreme Court judgment that gave the Arvind Kejriwal-led Aam Aadmi Party (AAP) government the power to make laws and wield control over bureaucrats deputed to the Delhi government.
The ordinance seeks to establish for the first time the National Capital Civil Service Authority (NCCSA) which will be headed by the Chief Minister of Delhi, with the Chief Secretary and Principal Home Secretary of Delhi being the other two members.
All matters required to be decided by the Authority shall be decided by majority of votes of the members present and voting.
The authority will decide the transfer, posting and vigilance matters of all Group A officers and DANICS officers posted in Delhi through majority votes.
The ordinance stated that the L-G will pass orders to give effect to the recommendations passed by the NCCSA but can ask for the relevant material with regard to officers belonging to All India Services and DANICS serving the Delhi government.
However, the final decision will lie with the Lieutenant Governor of Delhi, the ordinance said. “Provided also that in case of difference of opinion, the decision of the Lieutenant Governor shall be final.
Last week, in a unanimous verdict, the Supreme Court had held that the Delhi government had legislative and executive powers over services except for land, public order and police.
The ordinance stated that the Supreme Court passed the verdict “in the absence of any specific parliamentary legislation dealing with the subject of services.”
It added that “any decision taken or an event in the capital of the nation not only affects the residents of the national capital but also the rest of the country and at the same time has the potential of putting the national reputation, image, credibility and prestige at stake in the international global spectrum.
It said the national capital belongs to the entire nation and it is in the larger national interest that the people of entire country have some role in the administration of the national capital through the democratically elected Central government.
States
How Gujarat is working to become India’s green hydrogen hub (Page no. 6)
(GS Paper 3, Environment)
Gujarat has set the ball rolling to become the country’s green hydrogen manufacturing hub and retain its dominance over the industrial sector.
The State has signed memorandums of understanding (MoUs) with several big corporates, including Reliance, Adani, ArcelorMittal and Torrent, which have pledged huge investments in green energy projects and have been allotted land for the same.
We aim to become a hub for green hydrogen by creating a production capacity of 8 metric tonnes per annum (MTPA) by 2035.
The State is framing a new policy for green hydrogen manufacturing, which will be given the status of a “priority sector”, say officials.
The State Cabinet approved the allotment of 1.99 lakh hectares of land in the Kutch-Banaskantha border areas against the proposals, by the corporates that signed the MoUs, of setting up projects across 3.26 lakh hectares. The land parcels will be allotted on a 40-year lease initially.
The government will provide a range of incentives to the industries investing in the State’s green hydrogen projects, officials say.
As per the land allotment policy, the companies must meet 50% of their green hydrogen production capacity within five years of commissioning their plants and 100% within eight years.
Under the Nationally Determined Contributions (NDC), India has set a target of becoming a net-zero emissions country by 2070. The country also aims to reduce its carbon emissions by 45% by 2030 by sourcing 50% of its energy from renewable sources.
As a State with a favourable policy regime and solid infrastructure base, Gujarat will be a hub for green energy and its ecosystem, “the State is expecting around ₹10 lakh crore worth of investments in this new sector over the next 15 years.”
Any company intending to set up a green hydrogen plant in Gujarat should have prior experience in producing at least 500 megawatts (MW) of renewable energy or should be a user of “green”, “blue”, or “brown” hydrogen.
Among the companies that have signed MoUs with the State, the Reliance group has committed investments worth ₹5.6 lakh crore to set up a renewable energy park and a green hydrogen park in Gujarat.
The Adani group has also made significant commitments, announcing plans to invest more than ₹4.13 lakh crore over the next 10 years in green hydrogen and associated ecosystems to create a capacity to produce up to 3 million tonnes of green hydrogen annually.
Editorial
Tracking SDG progress the Bhopal way (Page no. 10)
(GS Paper 3, Economy)
Bhopal has become the first city in India to join the growing global movement on localisation of Sustainable Development Goals (SDGs) following the release of its Voluntary Local Review (VLR).
In 2015, the 193 member-states of the United Nations adopted the 2030 Agenda for Sustainable Development, which consists of 17 Sustainable Development Goals and 169 targets as a plan of action for ‘people’, ‘the planet’, and ‘prosperity’.
The resolution specifies mechanisms for the monitoring, review, and reporting of progress as a measure of accountability towards the people.
To this end, member-states submit a Voluntary National Review (VNR) to the UN’s High Level Political Forum (HLPF), and, more recently, VLRs as a means for driving and reporting local implementation of SDGs at the sub-national and city levels.
India has made commendable efforts towards the adoption, localisation, and achievement of the SDGs. NITI Aayog presented India’s second VNR at the HLPF convened in 2020.
India’s Ministry of Statistics and Program Implementation (MoSPI) has published a National Indicator Framework (NIF) for the review and monitoring of the SDGs, which contextualises the UN’s Global Indicator Framework to represent India’s unique development journey.
As noted in a NITI Aayog report, at least 23 States and Union Territories have prepared a vision document based on SDGs. Almost all of them have initiated steps to localise the SDGs.
However, it has taken a while to get to India’s first Voluntary Local Review at the city level since the efforts to localise the SDGs began.
Cities are the most important stakeholders in Agenda 2030 as at least 65% of the 169 targets could not possibly be achieved without the engagement of local urban stakeholders.
A VLR is a tool to demonstrate how local actions are leading the way in equitable and sustainable transformations for people and building a coalition of partners towards this endeavour.
While it is desirable to align a city’s VLR to the State-level action plan (where available) and the country’s VNR, the process allows a great deal of flexibility to the cities to tell their story within a framework of their choice.
Business
Govt. plays angel over tax on startup funding (Page no. 16)
(GS Paper 3, Economy)
The government proposed changes to the angel tax introduced in the Budget on start-up investments from non-resident investors at a premium over their fair market value (FMV), and said investors like banks, insurers, sovereign wealth funds and SEBI-registered FPIs may be exempt from the tax.
In a bid to assuage industry concerns, the Central Board of Direct Taxes (CBDT) also said that Rule 11UA under the Income Tax Act, that currently prescribes only two valuation methods for valuing shares for resident investors, would be amended to include five more valuation methods for non-resident investors.
Any valuation report from merchant bankers submitted not over 90 days prior to the investments in question would be accepted by the revenue department, with a 10% “safe harbour” variation permissible “on account of forex fluctuations, bidding processes and variations in other economic indicators”, the CBDT said. Draft rules to this effect would be shared for public comments for 10 days.
For investments from non-resident entities notified by the government, the price of the equity shares corresponding to such consideration may be taken as their fair market value (FMV) for resident and non-resident investors, provided that the FMV does not exceed the aggregate consideration received from the notified entity, and the funds are remitted within 90 days of the issuance of shares.
On similar lines, price matching for resident and non-resident investors would be available with reference to investment by Venture Capital Funds or Specified Funds.