Annual Report 2020-21

ANNUAL REPORT 2020-2021 MINISTRY OF FINANCE ºÉiªÉàÉä´É VɪÉiÉä ºÉiªÉàÉä´É VɪÉiÉä Government of India MINISTRY OF FINANCE ANNUAL REPORT 2020-2021 PRINTED AT BUDGET PRESS, MINISTRY OF FINANCE, NEW DELHIContents Page No. INTRODUCTION v CHAPTER I Department of Economic Affairs 1. Economic Division 1 2. Budget Division 4 3. Financial Markets Division 8 4. Financial Stability and Cyber Security Division 18 5. Financial Sector Reforms and Legislation Division 20 6. Infrastructure Policy and Finance Division 23 7. Investment and Digital Economy Division 27 8. FB & ADB Division 40 9. International Economic Relations Division 47 10. Aid Accounts & Audit Division 52 11. Administration Division 53 12. Bilateral Cooperation and Sustainable Finance Division 56 13. Integrated Finance Division 64 14. Currency & Coin Division 68 Annexures 74 Organisation Chart 80 iCHAPTER II Department of Expenditure 1. Personnel Division 81 2. Public Finance-State Division 83 3. Public Finance Central Division 84 4. Procurement Policy Division 85 5. Official Language 86 6. Integrated Finance Unit (IFU) 86 7. Chief Adviser Cost 87 8. Arun Jaitley National Institute of Financial Management (AJNIFM) 88 9. Controller General of Accounts 89 10. Chief Controller of Accounts 94 11. Central Pension Accounting Office 100 Annexures 103 Organisation Chart 105 CHAPTER III Department of Revenue 1. Organization and Functions 107 2. Central Board of Direct Taxes 108 3. Central Board of Indirect Taxes and Customs 147 4. Revenue Headquarters Administration 178 5. Integrated Financial Unit (IFU) 208 6. Implementation of Official Language Policy 209 7. Implementation of Right to Information Act, 2005 210 8. e-governance activities 212 9. Swachh Bharat Campaign 217 Annexure - I - Representation of SCs/STs/OBCs 219 Annexure - II - Representation of VH/OH 232 Annexure - III - Summary of Audit Reports / Paras 245 Annexure - IV - Organization Chart 247 iiCHAPTER IV Department of Investment and Public Asset Management I. Functions 249 II. Vision 249 III. Mission 249 IV. Organisational Structure 249 V. Policy and Approach to Disinvestment of CPSEs 249 VI. Disinvestment Performance 250 VII. New Initiatives 252 VIII. Dividend Payments by CPSEs 253 IX. Initiatives Undertaken for Persons with Disabilities, Schedule Castes, Scheduled Tribes and Other Backward Classes 253 X. Initiatives Relating to Gender Budgeting and Empowerment of Women 253 XI. Official Language Policy 253 XII. E-Governance 253 XIII. Redressal of Public Grievances 254 XIV. Vigilance Machinery 254 XV. Right to Information Act, 2005 254 XVI. Initiatives for Good Governance 254 XVII.Audit Paras/Objections 254 XVIII. Integrated Finance Unit 254 ANNEXURE - I 255 APPENDIX - I 256 APPENDIX - II 257 iiiCHAPTER V Department of Financial Services 1. Work Allocation among Sections 259 2. Overiew of Banking 263 3. Financial Inclusion 271 4. Key Schemes 273 5. Agriculture Credit 279 6. Priority Sector Lending (PSL) 281 7. Financial Institutions 282 8. Significant Initiatives to support credit to lending institutions 286 9. Insurance Sector 287 10. Pension Sector 290 11. Measures Taken during the COVID-19 Pandemic 292 12. Miscellaneous 294 Annexures 298 Organisation Chart 301 ivIntroduction Introduction The Ministry comprises of the five Departments 2014-15 to 3.4 per cent in 2018-19 before rising to 4.8 per namely:— cent in 2019-20. CPI-C inflation averaged 6.3 per cent in  Department of Economic Affairs Apr-Jan., 2020-21, but the monthly price index declined  Department of Expenditure in January 2021 to 4.1 per cent, mainly due to decline in the food inflation to 1.9 percent in January 2021 from 3.4  Department of Revenue per cent in December, 2020. Food inflation based on  Department of Investment and Public Asset Consumer Food Price Index (CFPI) declined from 6.4 per Management cent in 2014-15 to 0.1 per cent in 2018-19 but rose to 6.7  Department of Financial Services per cent in 2019-20. During April-Jan, 2020-21 food inflation averaged 8.4 per cent. Inflation measured in terms of 1. Department of Economic Affairs Wholesale Price Index (WPI) declined from 4.3 per cent in 2018-19 to 1.7 per cent in 2019-20.WPI inflation Economic Growth averaged 0.2 per cent during April-January, 2020-21 and stood at 2.0 per cent in January 2021 (Table 1). The impositions of strict lockdown and social distancing measures taken to combat the spread of COVID- Table 1: Inflation in CPI and WPI (in per cent) 19 have adversely affected the economy in 2020-21. As per the Second Advance Estimates released by the National CPI-C WPI Statistical Office (NSO), the growth rate of the gross domestic product (GDP) at constant market prices has All Food All Food (CFPI) been estimated to contract by 8.0 per cent in 2020-21, as compared to the growth of 4.0 percent (1st revised Base 2012=100 2011-12=100 estimates) growth recorded in the previous year. The growth of the gross value added (GVA) at constant basic 100. Weight 100.0 39.1 24.4 prices has been estimated to contract by 6.5 per cent in 0 2020-21, with agriculture and allied sectors, industrial 2018-19 3.4 0.1 4.3 0.6 sector and services sector growing at 3.0 per cent, (-) 8.2 per cent and (-)8.1 per cent respectively. 2019-20 4.8 6.7 1.7 6.9 On the demand side, the growth in government final 2020-21 consumption expenditure at constant (2011-12) prices is (Apr-Jan) 6.3 8.4 0.2 3.8 estimated at 2.9 per cent in 2020-21 (2nd advance Apr-20 7.2 11.7 -1.6 4.4 estimates), as compared to 7.9 per cent in 2019-20 (1st revised estimates). The growth in gross fixed capital May-20 6.3 9.2 -3.4 2.7 formation at constant prices was 5.4 per cent in 2019-20 (1st revised estimates) as compared to (-) 12.4 per cent in Jun-20 6.2 8.7 -1.8 3.1 2020-21 (2nd advance estimates). Exports and imports of Jul-20 6.7 9.3 -0.2 4.7 goods and services are estimated to contract (at constant prices) by 8.1 per cent and 17.6 per cent in 2020-21. Aug-20 6.7 9.1 0.4 4.8 Information on saving and investment is available only Sep-20 7.3 10.7 1.3 7.2 till the year 2019-20. Gross saving as proportion of GDP at current market prices is estimated at 31.4 per cent in Oct-20 7.6 11.0 1.3 6.2 2019-20 as compared to 30.6 percent in 2018-19. Gross capital formation, also known as investment, was Nov-20 6.9 9.5 2.3 4.8 estimated to be 32.2 per cent of the GDP at current market prices in 2019-20, as compared to 32.7 per cent in 2018- Dec-20 4.6 3.4 1.2 0.9 19. Fixed investment (Gross Fixed Capital Formation) to Jan-21 4.1 1.9 2.0 -0.3 GDP ratio (at current prices) is estimated to be 26.7 per cent in 2020-21 (2nd advance estimates), vis-à-vis 28.8 Source: NSO and DPIIT. per cent in 2019-20 (1st revised estimates). Notes: 1. WPI inflation for last two months and CPI- C inflation for last one month is provisional. Prices 2. CPI-C inflation for April and May 2020 and CFPI Headline inflation based on Consumer Price Index- inflation for April 2020 is calculated on the basis of Combined (CPI-C) fell continuously from 5.9 per cent in the Imputed Indices released by NSO. vAnnual Report 2020-2021 Agriculture and Food Management Sector 2020 was just 1 per cent above normal (124.1 mm), as compared to 29 per cent above normal rainfall received During the South West Monsoon (SWM) Season during the same period of 2019. (June - September) of 2020, the country as a whole received 957.6 mm rainfall (9 per cent above normal), as As per the 4th Advance Estimates of production of compared to 968.3 mm (10 per cent above normal) received food-grains released by the Ministry of Agriculture & during the same period in 2019. With regard to the category Farmers' Welfare, the total production of food-grains was wise distribution of cumulative rainfall, out of 36 296.7 million tonnes in 2019-20, higher as compared to meteorological subdivisions of the country, 2 subdivisions the production of 285.2 million tonnes in 2018-19. As per received large excess, 13 subdivisions received excess, the 1st Advance Estimates of production of food-grains 16 subdivisions received normal and 5 subdivision remained deficient during the SWM season of 2020. Rainfall for 2020-21, the production of kharif food-grains was during the Post-Monsoon Season (October-December) of estimated at 144.5 million tonnes. Table 1: Production of Major Agricultural Crops (Million Tonnes) Crops 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21* (4th AE) (1st AE) Total food-grains 252.0 251.5 275.1 285.0 285.2 296.7 144.5 Rice 105.5 104.4 109.7 112.8 116.5 118.4 102.4 Wheat 86.5 92.3 98.5 99.9 103.6 107.6 -- Total Coarse Cereals 42.9 38.5 43.8 47.0 43.1 47.5 32.8 Total Pulses 17.2 16.3 23.1 25.4 22.1 23.2 9.3 Total oilseeds 27.5 25.3 31.3 31.5 31.5 33.4 25.7 Sugarcane 362.3 348.5 306.1 379.9 405.4 355.7 399.8 Cotton# 34.8 30.0 32.6 32.8 28.0 35.5 37.1 Source: Directorate of Economics & Statistics, Department of Agriculture, Cooperation and Farmers Welfare; 1st AE: First Advance Estimates; * : Kharif Crops Only; # : Million bales of 170 Kgs each.; The total area sown under Rabi crops as on 29th Industry January 2021 was at 684.6 lakh hectare, higher as The performance of the industrial sectors based on compared to the area of 665.6 lakh hectare sown as on the Index of Industrial Production (IIP) comprising mining, the corresponding date of the previous year. manufacturing and electricity showed negative growth in industrial production during 2019-20. According to the data The milk production in the country has increased on the IIP released by the National Statistical Office (NSO) from 146.3 million tonnes in 2014-15 to 198.4 million tonnes under the Ministry of Statistics and Programme (provisional) in 2019-20. Annual Growth Rate of milk Implementation (MOSPI), the Index of Industrial Production production in 2019-20 was 5.68 per cent. The per capita (IIP) based industrial growth during 2019-20, was (-) 0.8 per cent as compared to 3.8 per cent growth achieved availability of milk was 407 grams per day in 2019-20 during the corresponding period of the previous year. Out (provisional). of the three broad sectors, mining and electricity sectors The fish production in India has reached an all-time recorded growth of 1.6 per cent and 1.0 per cent in 2019- 20 as against 2.9 per cent and 5.2 per cent growth achieved high of 14.16 million metric tons during 2019-20. The respectively during corresponding period of the previous fisheries sector contributes 1.2 per cent to the GVA and year. Manufacturing sector fell by 1.4 per cent in 2019-20 6.6 per cent to the agricultural GVA. The export of marine as against a growth of 3.9 per cent in the corresponding products stood at 12.9 lakh metric tons with a value of period of the previous year. During April-November `46,662 crores during 2019-20. 2020-21, the IIP contracted by 15.5 per cent. The growth viIntroduction of different used based industrial group are given below. Growth of Index of Industrial Production (IIP) (in Per cent) (Base 2011-12=100) Industry Group Weight 2018-19 2019-20 2020-21 (April-December) Mining 14.37 2.9 1.6 -11.3 Manufacturing 77.63 3.9 -1.4 -15.1 Electricity 7.99 5.2 1.0 -3.6 Growth by use-based industrial group Primary Goods 34.04 3.5 0.7 -10.1 Capital Goods 8.22 2.7 -13.9 -27.5 Intermediate Goods 17.22 0.9 9.1 -15.0 Infrastructure/Construction Goods 12.33 7.3 -3.6 -15.2 Consumer Durables Goods 12.83 5.5 -8.7 -24.7 Consumer Non-durables Goods 15.32 4.0 -0.1 -4.5 General Index 100.00 3.8 -0.8 -13.5 Source: NSO, MoSPI As may be seen from the table, except primary cement and electricity with a combined weight of nearly goods and intermediate goods, other used based goods 40 per cent in the IIP grew by 0.4 per cent in 2019-20 as sectors have attained negative growth in 2019-20. The compared to 4.4 per cent growth in 2018-19. During 2019- primary goods and intermediate goods registered positive 20, four out of the eight core sectors namely refinery growth of 0.7 per cent and 9.1 per cent respectively during products, fertilizers, steel and electricity sectors achieved the period in 2019-20. positive growth while coal, crude oil, natural gas and Infrastructure Sector cement sectors recorded negative growth. The Eight Core The index for eight core industries comprising coal, Industries recorded (-) 8.8 per cent growth in April-January crude oil, natural gas, refinery products, fertilizers, steel, 2020-21. Production growth (per cent) in Eight Core Infrastructure- Supportive Industries Industry Weight 2018-19 2019-20 2020-21 (April-January) Coal 10.33 7.4 -0.4 -1.9 Crude oil 8.98 -4.1 -5.9 -5.6 Natural Gas 6.87 0.8 -5.6 -10.7 Refinery Products 28.03 3.1 0.2 -12.4 Fertilizers 2.62 0.3 2.7 3.0 Steel 17.91 5.1 3.4 -14.0 Cement 5.37 13.3 -0.9 -16.6 Electricity 19.85 5.2 0.9 -2.7 Overall growth 100.00 4.4 0.4 -8.8 Source: Office of the Economic Adviser, DPIIT (Ministry of Commerce & Industry) viiAnnual Report 2020-2021 As per the report on Review of Infrastructure Sector communication & broadcasting services', 'Financial, real Performance for 2019-20 released by the Ministry of estate & professional services', and 'Public administration, Statistics and Programme Implementation (MOSPI), the defence & other services' are estimated to contract by 21.41 major infrastructure sectors such as power, coal, finished per cent, 3.68 per cent and 0.82 per cent respectively. It is steel and fertilizers registered positive growth during 2019- pertinent to note that while the services sector contracted 20.Further, the widening & strengthening of highways by by over 20 per cent in the first quarter (Q1) of FY 2020-21, NHAI grew by 17.71 per cent in 2019-20 as compared to the contraction narrowed to 11.4 per cent in the second the previous year and cargo handled at major ports grew quarter (Q2) of FY 2020-21. This pace of recovery is broadly by 0.79 per cent in 2019-20 over the previous year. aligned with high frequency indicators that point to a pick Services Sector in economic momentum with the measured opening up of the economy from June 2020. The COVID-19 pandemic, the subsequent lockdown and social distancing measures have had a significant Air passenger traffic, rail freight traffic, port traffic, impact on the contact-intensive services sector. During the foreign tourist arrivals, and foreign exchange earnings all first half of the financial year 2020-21, the services sector contracted sharply following the first lockdown which was contracted by almost 16 per cent. This decline was led by announced in March, 2020. As the economy gradually a sharp contraction in all sub-sectors particularly 'Trade, entered the unlock phase, most of these indicators showed hotels, transport, communication & services related to signs of recovery. Services purchasing managers' index, broadcasting', which contracted by 31.5 per cent in H1 FY rail freight traffic, and port traffic have bottomed out and 2020-21. As per the first advance estimates, Gross Value are rising steadily now, showing a V-shaped recovery. Added (GVA) of services sector is estimated to contract by Domestic passenger air traffic is also increasing gradually 8.8 per cent in 2020-21, whereas it grew by 5.5 per cent in on a monthly basis, although travel remains muted as 2019-20 (Table 1). Sub-sectors 'Trade, hotels, transport, compared to last year. Table1: Services Sector Performance in India’s GVA Share in GVA Growth (per cent YoY) (per cent) Sector 2020-21 (AE) 2018-19 2019-20 2020-21 2020- 2020-21 (1st RE) (PE) (AE) 21 (H1) Q1 Q2 Total Services 54.3 7.7 5.5 -8.8 -15.9 -20.6 -11.4 (Excluding construction) Trade, hotels, transport, 15.4 7.7 3.6 -21.41 -31.5 -47.0 -15.6 communication & services related to broadcasting Financial, real estate & 22.2 6.8 4.6 -0.82 -6.8 -5.3 -8.1 professional services Public administration, 16.7 9.4 10.0 -3.68 -11.3 -10.3 -12.2 defence & other services Source: Ministry of Statistics and Programme Implementation. Note: Shares are in current prices and growth in constant 2011-12 prices; RE: Revised Estimates. PE: Provisional Estimates. AE: Advance Estimates In spite of the global disruptions, FDI inflows into structural reforms. The space sector was opened up, the services sector increased by 34 per cent YoY during telecom related regulations were removed from the IT-BPO April-September 2020 to reach US$ 23.61 billion. The jump sector, and consumer protection regulations were in FDI equity inflows was driven by strong inflows into the introduced for e-commerce. 'Computer Software & Hardware' sub-sector, wherein FDI inflows increased to US$ 17.55 billion which is over 336 Social Infrastructure per cent higher over the corresponding period last year. While the COVID-19 pandemic caused its ripples High growth in FDI inflows was also present in subsectors on the economy and on the social sector, Governments such as 'Retail Trading', 'Agriculture Services', and at the Centre and States intervened in a timely manner to 'Education'. respond to the pandemic. The expenditure on social The year 2020-21 witnessed many significant services, as a proportion of GDP increased from 6.2 per viiiIntroduction cent in 2014-15 to 8.8 per cent in 2020-21 (BE). This to make online education accessible to all children. The increase was witnessed across health, education and government announced the new National Education Policy other social services sector. Allocation for the health sector (NEP), 2020 replacing the 34-year-old National Policy on during the COVID-19 times flowed especially towards Education, 1986. The new policy aims to pave the way for containment and treatment of the COVID-19 virus in the transformational reforms in school and higher education form of ensuring supply of essential medicines, hand systems in the country. Besides, scaling up of the efforts sanitizers, protective equipment including masks, PPE to impart necessary skills through a wide network of ITIs Kits, ventilators, adequate testing labs, treatment facilities focusing on women and launching of Pradhan Mantri as well as in vaccinating the population. The government Kaushal Vikas Yojana 3.0 have been taken while launched the world's largest Covid-19 immunization integration of Vocational Education and Training (VET) in programmes on 16th January 2021 through the two general education has received a big fillip with the NEP, indigenously manufactured vaccines viz; COVISHIELD and 2020 envisioning giving 50 per cent of school and higher COVAXIN. To mitigate the distress caused to the vulnerable education candidates exposure to VET over the next 5 and poorer sections of society during the period of years. complete lockdown, the Government announced the As per the Periodic Labour Force Survey (PLFS) 'Pradhan Mantri Garib Kalyan Yojana (PMGKY)' relief report 2018-19, there was an increase in employment package of `1.70 lakh crores in March, 2020, which totalling 48.78 crore during 2018-19 as compared to 47.14 provided for direct cash transfers under National Social crore during 2017-18. This increase in employment was in Assistance Programme, PM Jan Dhan Accounts, PM both rural as well as urban areas (Table 1). The number of Kisan, free supply of food grains and pulses over and above unemployed persons declined by about 0.79 crore during normal PDS entitlements to all National Food Security the same period, largely in the category of females, and in Act beneficiaries etc. Supply of free foodgrains and pulses rural areas. The net payroll data of Employees' Provident was continued upto November 2020 under the Fund Organisation (EPFO) as on 20th January, 2021 shows comprehensive stimulus cum relief package- 'Atma Nirbhar a net increase of new subscribers in EPFO of 78.58 lakhs Bharat Abhiyan' (ANB 1.0) announced in May, 2020. in 2019-20 as compared to 61.1 lakhs in 2018-19. The During the lockdown, online schooling took off in a lockdown period also saw the growth of the gig economy big way and the Government introduced several measures and increasing work from home in the organized sector. Table 1: Employment Status in 2017-18 and 2018-19 (ps+ss, for all ages, crore person) Indicators 2017-18 2018-19 Labour Force 50.97 51.82 Unemployment 3.83 3.04 Employment 47.14 48.78 Self Employed 24.21 25.07 Regular wage/salaried employees 11.45 12.17 Casual Labour 11.46 11.52 Source: Economic Survey 2019-20 & 2020-21 The female labour force participation rate has Kalyan Rozgar Abhiyan for migrant workers in the increased from 17.5 per cent in 2017-18 to 18.6 per cent destinations States and has also notified path-breaking in 2018-19. The Time Use Survey, 2019 reported that labour reforms to attract big investment in the economy. females (15-59 age group) spend relatively more time in External Sector unpaid domestic and care giving activities (7.5 hours) as compared to employment related activities (5.7 hours) per Global Economic Environment day. This is reported to be one of the main reasons for the According to International Monetary Fund, World low female participation in the labour market. Economic Outlook Update, January 2021, after an In 2020-21, to mitigate the effects of COVID-19 estimated 3.5 percent contraction in 2020, the global induced restrictions on loss of livelihood, the Government economy is projected to grow 5.5 percent in 2021 and 4.2 has taken various measures such as giving incentive to percent in 2022 (Table 1). The estimate for 2020 is 0.9 boost employment under the scheme Aatmanirbhar Bharat percentage point higher than projected in the October WEO Rojgar Yojana, higher allocation under Mahatma Gandhi forecast. This reflects the stronger than-expected recovery National Rural Employment Guarantee Scheme, Garib on average across regions in the second half of the year. ixAnnual Report 2020-2021 The 2021 forecast is revised up 0.3 percentage point relative across countries, depending on access to medical to the previous forecast, reflecting expectations of a interventions, effectiveness of policy support, exposure to vaccine-powered strengthening of activity later in the year cross-country spillovers, and structural characteristics and additional policy support in a few large economies. The strength of the recovery is projected to vary significantly entering the crisis. Overview of the World Economic Outlook Projections (Percent change, noted otherwise) Projections as per Difference from June WEO Oct, 2020 2020 WEO Updates 2020 2021 2022 2021 2022 World Output -3.5 5.5 4.2 0.3 0.0 Advanced Economies -4.9 4.3 3.1 0.4 0.2 Emerging Market and -2.4 6.3 5.0 0.3 -0.1 Developing Economies India -8.0 11.5 6.8 2.7 -1.2 World Trade Volume -9.6 8.1 6.3 -0.2 0.9 (goods and services) Advanced Economies -10.1 7.5 6.1 0.4 1.0 Emerging Market and -8.9 9.2 6.7 -1.0 0.8 Developing Economies Source: IMF, WEO October 2020. Further, with respect to External Sector Outlook of India's Merchandise Trade developments during trade growth, WEO Update, January 2021, forecasted that 2019-20 and 2020-21(April-December) global trade volumes to grow about 8 percent in 2021, before moderating to 6 percent in 2022. Services trade is As per the data of Department of Commerce, the expected to recover more slowly than merchandise volumes, however, which is consistent with subdued cross- developments in India's merchandise trade during 2019- border tourism and business travel until transmission 20 and 2020-21 (April-December) may be seen as under: declines everywhere. (Values in US$ billion) 2019-20 2020-21 (P) % change in % change 2020-21 in 2019- 2018-19 2019-20 (Apr-Dec) 20 over (April-December) over 2019-20 2018-19 (Apr-Dec) Total Merchandise Trade 844.2 788.1 -6.6 602.5 459.1 -23.8 (Exports + Imports) Merchandise Exports 330.1 313.4 -5.1 238.3 200.8 -15.7 Merchandise Imports 514.1 474.7 -7.7 364.2 258.3 -29.1 POL Imports 140.9 130.6 -7.4 96.7 53.7 -44.5 Non-POL Imports 373.2 344.2 -7.8 267.5 204.6 -23.5 Trade Deficit -184.0 -161.3 -12.3 -125.9 -57.5 -54.4 S ource: Department of Commerce, Ministry of Commerce and Industry. Note: P: Provisional. It may be seen from table above that the merchandise 2020-21 (April-December), trade deficit declined by 54.4 trade deficit had declined by 12.3 per cent to US$ 161.3 percent to US$ 57.5 billion from US$ 125.9 billion in billion in 2019-20 from US$ 184.0 billion in 2018-19. During corresponding period a year ago. xIntroduction Climate Change increased from 14.7 per cent to 15.8 per cent between March 2020 and September 2020 on account of Climate Change is one of the most compelling global improvement of improvement of CRAR of both Public and challenges. India submitted its Nationally Determined Private sector banks. Contribution (NDC) under the Paris Agreement on a "best effort basis" keeping in mind the developmental imperatives Credit Growth of the country. In its NDC, India promised to reduce its Credit growth (YoY) stood at 14.8 per cent in February emission intensity of GDP by 33 to 35 per cent below 2005 2019 and had declined to 5.1 per cent as on October 23, levels by the year 2030; 40 per cent of cumulative electric 2020. Note that it subsequently accelerated slightly and power installed capacity would be from non-fossil fuel stands at 5.9 per cent as on January 29,2021. sources by 2030 and increase its forest cover and additional carbon sink equivalent to 2.5 to 3 billion tons of carbon The non-food credit growth (YoY), based on sectoral dioxide by 2030. The implementation of NDC effectively deployment of bank credit data was 6.0 per cent in November commenced on 01.01.2021. India's NDC clearly states that 2020 as compared with a growth of 7.2 per cent in November finance is a critical enabler of climate change action. 2019. The moderation in credit growth in 2020-21 was witnessed in mostly all the sectors, barring services. Credit The year 2020 was supposed to be the year by which growth to agriculture & allied activities decelerated in first developed country Parties were to fulfill the goal of mobilizing quarter of 2019-20 but then accelerated to 8.5 per cent in jointly US$ 100 billion. This was to be an important November 2020 with significant pick up since September. milestone in the discourse of international climate efforts. Credit growth to industry has been decelerating consistently This essential component in the climate negotiations need and in fact contracted by 1.7 per cent in October 2020 and to be adhered to by developed countries to bring balance to 0.7 per cent in November 2020. Services sector bucked the Paris architecture. However, this global pandemic has the downtrend with credit growth to this sector accelerating led to the postponement of the COP 26 which has to 9.5 per cent in October 2020 and 8.8 per cent in November implications on the financial negotiations. Developing 2020. Within this sector, credit to 'trade' recorded a double- country Parties requested the Madrid Climate Change digit growth of 14.7 per cent in November 2020 as compared Conference (COP 25) to mandate the Standing Committee to 4.6 per cent a year ago. However, credit growth to on Finance (SCF) to compile a synthesis report on the commercial real estate and NBFCs declined in 2020-21. attainment of the finance goal of US$ 100 billion per year Personal loans growth decelerated to 10 per cent in by 2020. This would have provided a valuable input into the November 2020 from 16.4 per cent in November 2019. Within process of setting a new long-term collective goal on finance the personal loan segment, the two main components are by 2025 and giving an important signal in building momentum vehicle loans and housing loans. While the growth of vehicle to enhance ambition beyond 2020. loans growth accelerated to 10 per cent in November 2020 COP 26 is expected to take forward the discussions from 4.7 per cent a year ago, that of housing loans growth and reach consensus on the transparency mechanism; decelerated to 8.5 per cent in November 2020 from 18.3 Article 6 (market and non- market mechanisms); common per cent a year ago. time frames for nationally determined contributions; long- Major Policy changes related to Banking term climate finance etc. Regulations Banking Sector Commercial Banks Gross Non-Performing Advances (GNPA) ratio (i.e. a.Merger of PSBs: Consolidation among another GNPAs as a percentage of Gross Advances) of Scheduled 10 PSBs, with Punjab National Bank, Canara Bank, Union Commercial Banks decreased from 8.2 per cent at the end- Bank of India and Indian Bank as anchor banks came into March 2020 to 7.5 per cent at end-September 2020. effect from April 1, 2020. Restructured Standard Advances (RSA) ratio of Scheduled Commercial Banks (SCBs) increased from 0.36 per cent to b.Restructuring of MSME loans: A one-time 0.41 per cent during the same period. Overall, the Stressed restructuring of loans to MSMEs that were in default but Advances ratio of SCBs decreased from 8.6 per cent at end 'standard' as on January 1, 2019, was permitted, without March 2020 to 7.9 per cent at end- September 2020. an asset classification downgrade, subject to certain conditions like aggregate exposure (including non-fund- GNPA ratio of Public Sector Banks (PSBs) based facilities) of banks and NBFCs to the borrower not decreased from 10.25 per cent at the end March 2020 to exceeding Rs.25 crore as on January 1, 2019. The 9.4 per cent at end-September 2020 and the Stressed borrowing entity has to be GST registered. However, this Advances ratios decreased from 10.75 per cent to 9.96 condition will not apply to MSMEs that are exempt from per cent during the same period. Net NPA ratios also GST-registration. The cut-off date of January 1, 2019 was declined and stood at 2.1 per cent for SCBs and 2.85 per extended to March 1, 2020 to support viable MSME entities cent for PSBs as at end- September 2020. on account of the fallout of COVID-19. The banks are Capital to risk-weighted asset ratio (CRAR) of SCBs required to implement the restructuring by March 31, 2021. xiAnnual Report 2020-2021 c. Large exposure framework: A bank's exposure Urban Cooperative Banks (UCBs) with assets of `500 under the Large Exposure Framework to a group of crore and above were brought under the CRILC reporting connected counterparties was increased from 25 per cent framework. Accordingly, UCBs shall report credit to 30 per cent of the eligible capital base of the bank. The information, including classification of an account as increased limit will be applicable up to June 30, 2021. Special Mention Account (SMA), on all borrowers having aggregate exposures of `5 crore and above with them to d.Export Credit: The maximum permissible period CRILC. of pre-shipment and post-shipment export credit sanctioned by banks was increased from one year to 15 d.Limits on exposure to single and group months for disbursements made up to July 31, 2020, in borrowers and large exposures: The exposure norms line with the relaxation granted in the period of realization for single borrower and a group of borrowers from 15 per and repatriation of the export proceeds to India. cent and 40 per cent of UCB's capital funds, to 15 per cent and 25 per cent, respectively, of UCB's Tier-I capital. e.Monetary policy transmission - external The revised exposure limits shall apply to all types of fresh benchmarking of loans: RBI deregulated the interest rates exposures taken by UCBs, and they shall bring down their on advances by SCBs (excluding RRBs). With a view to existing exposures which are in excess of the revised limits strengthen the transmission of monetary policy, the banks to within the aforesaid revised limits by March 31, 2023. were mandated to link all new floating rate personal or Further, UCBs shall have at least 50 per cent of their retail loans and floating rate loans extended to MSMEs to aggregate loans and advances comprising loans of not external benchmarks such as repo rate, Treasury Bill Rate more than ` 25 lakh or 0.2 per cent of their tier I capital, and any external benchmark published by Financial whichever is higher, subject to a maximum of Rs. 1 crore, Benchmarks India Pvt Ltd (FBIL). Banks can offer such per borrower. external benchmark linked loans to other types of borrowers as well. In order to ensure transparency, standardisation, e.Submission of returns under Section 31 (read and ease of understanding of loan products by borrowers, with section 56) of the Banking Regulation Act, 1949 banks were also advised to adopt a uniform external - Extension of time: In view of the difficulties faced by benchmark within a loan category. Under the external UCBs in submission of the returns due to the ongoing benchmark system, the interest reset period for loans was COVID-19 pandemic, the timeline for the furnishing of the also reduced to three months with a view to pass on the returns for the financial year ended on March 31, 2020, benefit of reduction in policy repo rate to the borrowers was first extended by three months, i.e., till September more frequently. Further, to make the benefit of external 30, 2020 and then further to December 31,2020. benchmark linked interest rate regime available to the existing borrowers (Base Rate/MCLR), banks were advised f. Amendments to the Banking Regulation Act, to provide a switchover option to such borrowers on 1949: Banking Regulation (Amendment) Act, 2020: The mutually agreed terms. Banking Regulation Act has been amended by the Banking Regulation (Amendment) Act, 2020. The key changes in Co-operative Banks the regulatory regime of UCBs pursuant to the Banking Regulation (Amendment) Act, 2020 are as under: a.Revision in the target for priority sector lending: To promote financial inclusion, the overall priority  The Reserve Bank has been given powers over sector lending target for Urban Co-operative Banks has the management of the UCBs, owing to which it been increased from the present level of 40 per cent of can issue directions relating to the management adjusted net bank credit (ANBC) or credit equivalent of UCBs including approval for appointment of amount of off-balance sheet exposure (CEOBSE), Chairman / MD / CEO, removal and remuneration whichever is higher, to 75 per cent of ANBC or CEOBSE, of MD / CEO. Further, the Board of UCBs would whichever is higher by March 31, 2024. be required to have not less than 51 per cent members having special knowledge / practical b.Inclusion of co-operative banks as eligible experience in specified areas. member lending institutions under interest subvention scheme for MSMEs - issuance of guidelines:  The statutory restriction on grant of director-related All co-operative banks have been advised of their inclusion loans/ advances has been widened and common as Eligible Lending Institutions under the "Interest directorship across banks shall be prohibited as Subvention Scheme (ISS) for MSMSEs 2018" of the per the provisions of the amended Act. Government. This scheme provides an interest relief of two per cent per annum to eligible MSMEs on their  The Reserve Bank has been vested with powers outstanding fresh/incremental term loan/working capital of approval of the appointment / removal of during the period of its validity. statutory auditors of UCBs. c. Reporting of large exposures to Central  Provisions of the revised Act will enable UCBs to Repository of Information on Large Credits (CRILC): raise capital by issue of equity/ preference/special xiiIntroduction shares and debentures/bonds/like securities consistently remained in surplus reflecting several liquidity subject to such conditions as the Reserve Bank enhancing measures undertaken by the Reserve Bank in may specify in this behalf. the wake of COVID-19 induced disruptions. The main drivers of liquidity during 2020-21 have been Currency in  The Reserve Bank has been empowered to Circulation (CIC), Government cash balances and the supersede the Board of Directors of a UCB; Reserve Bank's forex operations. While CIC withdrawals though in case of a UCB having operations confined to a single State, in consultation with and build-up of Government cash balances resulted in the concerned State Government. liquidity drainage from the banking system, the Reserve Bank's forex operations augmented systemic liquidity.  The Reserve Bank has been empowered to sanction voluntary/compulsory amalgamation and Reserve Bank undertook several conventional and to prepare scheme for reconstruction of a UCB unconventional measures to manage the liquidity in the with the approval of the Central Government. economy starting from February 2020. These measures, inter alia, included: The amended Act provides for winding up of a UCB by High Court at the instance of the Reserve Bank. i. Injection of durable liquidity of more than ` 2.7 lakh crore through Open Market Operation (OMO) Monetary Developments during 2020-21 purchases between February 6-December 4, The Monetary Policy Committee (MPC) of the 2020. Reserve Bank met six times since March 2020. In view of the COVID-19 pandemic, the MPC advanced its first two ii. OMOs in State Development Loans (SDLs) as a meetings of 2020-21 from first week of April to end March special case were also introduced during the and from first week of June to May, 20-22. The August current financial year. The OMOs were conducted and the December 2020 meetings were held as per for a basket of SDLs comprising securities issued schedule, while the October meeting was postponed by a by states. Aggregate liquidity to the tune of week as new external members were onboarded to the ` 30,000 crore was injected through three OMO MPC. Since March 27, 2020, the policy repo rate has purchase auctions (October 22, 2020, November been reduced by 115 basis points (bps) from 5.15 per 5, 2020 and December 23, 2020) under this cent to 4.0 per cent so far. The monetary policy responses facility. during the year 2020-21 were necessitated by the extraordinary situation prevailing due to COVID-19. iii. Targeted Long-Term Repo Operations (TLTROs) In its first bi-monthly monetary policy statement of of up to three years' tenor for a total amount of March 27, 2020, the MPC decided to reduce the policy Rs. 1.13 lakh crore for investment in corporate repo rate by 75 bps from 5.15 per cent to 4.40 per cent. bonds, commercial papers, and non-convertible Alongside, the reverse repo rate was reduced by 90 bps debentures, in addition to injection of `1.25 lakh to 4.0 per cent, thus creating an asymmetrical corridor to crore through Long Term Repo Operations (LTROs) make it unattractive for banks to passively deposit funds conducted in February-March 2020. with the Reserve Bank and nudge them to use these funds for on-lending to productive sectors of the economy. The iv. Reduction in the CRR requirement of banks from MPC decided to continue with the accommodative stance 4 per cent of net demand and time liabilities (NDTL) as long as it is necessary to revive growth and mitigate to 3 per cent with effect from March 28, 2020 the impact of COVID-19 on the economy. In the second augmenting primary liquidity in the banking system meeting in May 2020, MPC reduced the policy repo rate by about `1.37 lakh crore. by 40 bps to 4.0 per cent based on the assessment that the macroeconomic impact of the pandemic was turning v. Raising banks' limit for borrowing overnight under out to be more severe than initially anticipated. the MSF by dipping into their Statutory Liquidity Ratio (SLR) to 3 per cent of NDTL from 2 per cent, MPC decided to keep the policy rate unchanged in its August, October and December 2020 and February allowing the banking system to avail an additional 2021 meetings. While the inflation hovered above the `1.37 crore of liquidity. tolerance zone for a few months, the committee was of vi. Special Liquidity Facility for mutual funds for the view that the underlying factors keeping inflation ` 50,000 crore; and elevated were essentially supply shocks that should dissipate over time as the economy unlocks, supply chains vii. Refinance facility worth ` 75,000 crore for all India restore and activity normalises. financial institutions i.e., NABARD, NHB, SIDBI Liquidity Conditions and its Management and EXIM Bank. The systemic liquidity in 2020-21 so far has In the wake of sell off triggered by risk aversion and xiiiAnnual Report 2020-2021 flight to safety in the beginning of year 2020, RBI conducted lower CPI reading for March 2020 relative to that for two 6-month USD/INR sell/buy swap auctions on March February 2020. The yield on 10-year benchmark security 16 and March 23, 2020 and injected dollar liquidity of US$ opened at 6.20 per cent on April 3, 2020 and closed at 2.7 billion to meet the increased demand for US dollars in 5.89 per cent on June 30, 2020. the foreign exchange market. The measures listed above The yields continued to harden, tracking higher than coupled with forex purchases resulted in expansion of expected CPI print for July 2020 and a pause in rate cut surplus liquidity, as reflected in average daily net liquidity by MPC. Subsequently, the benchmark yield drew comfort absorptions under the liquidity adjustment facility (LAF), from a series of special OMOs and outright OMO carried from `3.43 lakh crore at end of January 2020 to ` 5.47 out by the Reserve Bank. Further, OMO on SDLs, increase lakh crore on January 15, 2021. of OMO amount to ` 20,000 crore and extension of held- The increased government spending during April-May to-maturity benefit for SLR securities by one more year to 2020 also added to the liquidity surplus. However, the March 31, 2022 provided support to the bond market. Government's cash balances turned into surplus in June Subsequently, new 10-year benchmark yield touched a 2020 and July 2020. In Q2 of 2020, although surplus liquidity three-month low of 5.79 per cent on October 26, 2020. conditions still existed, there was moderation as compared However, the yield on benchmark bond drifted up again to Q1. As a result, average daily net absorption under the slightly and stood at 5.92 per cent on January 20, 2021. LAF decreased to Rs. 3.95 lakh crore in July 2020 as average Government cash surplus increased to ` 95,942 crore. Thereafter, daily net absorption increased to ` 4.03 2. Department of Expenditure lakh crore in August 2020, which again moderated to The Department of Expenditure is the nodal ` 3.68 lakh crore in September 2020. This moderation Department for overseeing the public financial management could be attributed to the absorption of banking sector system in the Central Government and matters connected liquidity to the tune of Rs. 1.24 lakh crore under the option with state finances. It is responsible for the implementation given to banks to return the funds availed under LTRO of the recommendations of the Finance Commission and facility before maturity. The moderation in liquidity Central Pay Commission, monitoring of audit comments/ absorption, however, was reversed in following months as observations, preparation of Central Government Accounts. average daily net absorption under the LAF again increased It further assists Central Ministries/Departments in to ` 4.47 lakh crore and ` 5.64 lakh crore in the month of controlling the costs and prices of public services, October and November 2020. This is partly a reflection of reviewing system and procedure to optimize outputs and pick up in government spending. outcomes of public expenditure. The principal activities of the Department include overseeing the expenditure In order to ensure better monetary transmission management in the Central Ministries/Departments through a more even distribution of liquidity across tenors, through the interface with the Financial Advisors and the 14 simultaneous sale-purchase OMO auctions for ` 10,000 administration of the Financial Rules/Regulations/Orders, crore each were conducted in the financial year 2020-21. pre-sanction appraisal of major schemes/projects, handling bulk of the central budgetary resources transferred Developments in the G-Sec Markets to State. During the first half of 2020-21, the 10-year The business allocated to the Department of benchmark G-sec yield traded with a softening bias Expenditure is carried out through its Personnel & tracking lower policy rates, subdued crude oil prices and Establishment Division, Public Finance-State and Public surplus liquidity. The 10-year benchmark G-sec yield which Finance Central Divisions, Office of Chief Adviser Cost, was around 6.4-6.5 percent in April 2020 touched a low of Office of Controller General of Accounts and Central 5.73 per cent in mid-May 2020. Pension Accounting Office. The Department has under In the first quarter of 2020-21, the yields on 10-year its administrative control the Arun Jaitley National Institute benchmark G-sec showed a declining trend. The yields of Financial Management (AJNIFM), Faridabad, which is hardened during the first fortnight of April 2020 due to low an autonomous body. trading volumes amid the countrywide lockdown and 3. Department of Revenue reduced market hours, selling pressure by Foreign Portfolio Investors (FPIs) along with the upward movement of US The Department of Revenue exercises control in treasury yields. However, yields softened in the second respect of revenue matters relating to Direct and Indirect half of the month, reflecting the impact of a sharp decline Union taxes. The Department is also entrusted with the in crude oil prices, the announcement by the Federal Open administration and enforcement of regulatory measures Market Committee (FOMC) to keep the target range of provided in the enactments concerning Goods and the Fed Funds rate unchanged at 0-0.25 per cent and a Services Tax (GST), Central Sales tax, Stamp duties and xivIntroduction other relevant fiscal statutes. Control over production and due to COVID-19 pandemic. The Department also disposal of opium and its products is vested in this provided financial assistance to women PMJDY Department. Apart from this, Directorate of Enforcement, accountholders and insurance coverage of Rs.50 lakh to FIU-IND, GSTN, CCF, CEIB, NIPFP are under the corona health workers apart from economy boost administrative control of Department of Revenue. measures e.g. Emergency Credit Linked Guarantee 4. Department of Investment and Scheme (ECLGS), Partial Credit Guarantee Scheme (PCGC), additional working capital refinance facility through Public Asset Management NABARD, Credit Card Saturation drive under Aatma Nirbhar Package. The Department of Disinvestment was set up as a separate Department on 10th December, 1999 and was The latest information on number of Banks is as later renamed as Ministry of Disinvestment from 6th follows: September, 2001. From 27th May, 2004, the Department of Disinvestment is one of the Departments under the Scheduled Commercial Banks (as on 31.12.2020) Ministry of Finance. Public Sector Banks 12 The Department of Disinvestment has been re-named Private Sector Banks 22 as Department of Investment and Public Asset Small Finance Banks 10 Management (DIPAM) with effect from 14th April, 2016. Regional Rural Banks 43 Foreign Banks 45 5. Department of Financial Services TOTAL 132 Source : RBI As per Allocation of Business Rules (AOBR), functions of Department of Financial Services (DFS) inter- Details of the number of Insurance Companies are as alia include matters pertaining to Banking, Insurance, follows: Pension Reforms, and Financial Institutions. The Insurance Companies in India Department of Financial Services (DFS) oversees several (As on 31.12.2020) key programs / initiatives and reforms of the Government Private Public Total No. of concerning the Banking Sector, the Insurance Sector and Sector Sector Insurers the Pension Sector in India. The key flagship schemes (Public & Private) being currently run / managed by the Department include Life Insurers 23 1 24 the Pradhan Mantri Jan Dhan Yojana (PMJDY), Stand Up India, Pradhan Mantri Suraksha Bima Yojana (PMSBY), General insurers 21 4 25 Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Specialized Institutions - 2 2 Pradhan Mantri Mudra Yojana (PMMY), Atal Pension Stand-alone Health Insurers 6 - 6 Yojana (APY) and the Pradhan Mantri Vaya Vandana Yojana (PMVVY). Reinsurers (including Foreign 10 1 11 Reinsurers Branches/LIoyd’s The Department provides policy support to the India) Public Sector Banks (PSBs), Public Sector Insurance TOTAL 60 8 68 Companies (PSICs) and Financial Institutions (FIs) like Source : IRDA NABARD, SIDBI, NHB, IFCI, EXIM, IIFCL etc. through The Department is also responsible for certain policy guidelines, legislative and other administrative functional issues concerning the Regulatory Bodies [RBI, measures. It also monitors the performance of these IRDAI and PFRDA], the PSBs, PSICs and Financial PSBs, PSICs and FIs and undertakes policy formulation Institutions. Foremost among these functional issues is in respect of the Banking and Insurance Sector in India. the appointment of key functionaries of Governor / Deputy DFS also deals with legislative and other issues pertaining Governor of Reserve Bank of India, Chairman / Members to the concerned regulatory bodies such as the Insurance of IRDAI and PFRDA, Chairman / Managing Director and Regulatory and Development Authority of India (IRDAI), Chief Executive Officers (MD & CEOs), Executive the Pension Fund Regulatory and Development Authority Directors (EDs), Chairman cum Managing Directors (PFRDA) and certain legislative matters related to Reserve (CMDs) etc of public sector banks, insurance companies Bank of India (RBI). and other financial institutions. Matters relating to The Department played a vital role by providing international banking relations are also dealt with by the seamless continuous financial services during lockdown Department. xvChapter - I Department of Economic Affairs I Department of Economic Affairs 1. Economic Division Monetary Fund (IMF), the World Bank and the World Trade Organisation (WTO) etc. The Division works in 1.1 The Economic Division provides expert advice close cooperation with the Reserve Bank of India, the to the Government on important issues of economic NITI Ayog, the Central Statistical Organisation, the policy. The Division monitors economic developments Ministry of Commerce and Industry and the Economic both domestic and external and advises on policy and Statistical Wings of their Ministries. measures relating to macroeconomic policies and on The work of the Economic Division is organized under specific sectors such as agriculture, industry and the following units: infrastructure sectors of the economy. Every year Economic Division brings out the Economic Survey  Macro Unit annually, which is laid before both the Houses of  Public Finance Unit Parliament one day before the presentation of the Union  Agriculture and Food Management Unit Budget.  Industry and Infrastructure Unit The Economic Survey provides a comprehensive  Social Infrastructure, Employment and overview of important developments in the economy in Human Development Unit the past one year. It also analyses recent economic trends and provides an in-depth appraisal of policies. Over the  External Sector Unit years, the Economic Survey has acquired the status of  Services Sector Unit an authentic source and a useful compendium of the  Prices Unit annual performance of the Indian economy. Further, the  Money and Banking Policy Unit Fiscal Responsibility and Budget Management (FRBM) Act, 2003 requires the Ministry of Finance to review every  Climate Change Finance Unit quarter the trends in Receipts and Expenditure in relation  Coordination Unit to the Budget and lay it before both the Houses of  IES Cadre Unit Parliament. In addition, at the end of first quarter and Macro Unit third quarter a Macro-Economic backdrop statement is prepared and provided to the Budget Division for The Macro unit is responsible for : (a) monitoring of India’s incorporating in the review of quarterly receipts and key economic indicators across all macro-economic expenditure. sectors on fortnightly, monthly, quarterly and annual basis for a holistic assessment of Indian economy and for The Economic Division also brings out the Economic and enabling evidence-oriented policy interventions by the Functional Classification of the Central Government’s government; (b) preparation of Economic Survey that Budget, which is circulated among Hon’ble Members of provides an overview of key sectors of the economy (c) Parliament. The publication presents an estimate of the framing replies of Parliamentary debates and questions savings of the Central Government and its departmental related to important macro- economic events (c) undertakings, gross capital formation and the magnitude Preparation of Monthly Economic Report that contains of the development and consumption expenditure broken detailed and analytical record of critical economic up under broad functional heads. developments and policy measures; (d) Country The Division also brings out every month an abstract coordinator for Special Data Dissemination Standard entitled “Monthly Economic Report”, which gives the latest (SDDS) and Annual updation of metadata in SDDS; (e) available data on the key sectors of the economy. The Updating of the National Summary Data Page of the Division prepares, from time to time briefs on the economy for web-post in the Ministry of Finance’s performance of the infrastructure sector, agriculture and website; (f) Preparation of State of Economy brief/Note industrial production, trends in tax collection, balance of giving an overview of the current economic situation; (h) payments and monetary situation. It also monitors the Preparation of briefs, material/ speeches for G-20, World price situation on a weekly basis. Bank, IMF and other meetings. Budget Related Work: (a) Preparation of Macro-Economic As part of its advisory functions, the Economic Division Framework Statement for the Union Budget every year; prepares analytical notes and background papers on (b) Macroeconomic backdrop for the statement on half important policy issues and provides briefs for meetings yearly review of the trends in receipts and expenditure in of the Consultative Committees and Working Groups set relation to the budget at the end of first half and end of up by the Government. The officers of the Economic financial year; (c) Projection of GDP for giving to the Division participate in consultations with various missions Budget Division before the preparation of budget. from international institutions such as International 1Annual Report 2020-2021 Public Finance Unit Social Infrastructure, Employment & Human Development Unit Public finance unit is responsible for: (a) Economic and Functional Classification of Central Government Budget; The unit is responsible for: (a) Providing policy advice on (b) Statistical Album on Public Finance, including issues related to social infrastructure, employment and budgetary transactions of Centre, State and Union human development; (b) Analysis of labour issues, Territories; (c) Preparation of information for Government employment trends, health, education and other topics Finance Statistics (GFS) Yearbook to be sent to concerning social sector; (c) Examining/ Evaluating International Monetary Fund (IMF); (d) Monitoring of results of employment and unemployment surveys; (d) Central fiscal parameters, such as, fiscal deficit, revenue Examine/ Appraise Cabinet Notes/CoS/EFC/SFC/PIB/ deficit, aggregate expenditure; (e) Policies relating to CEE notes on labour and skill development including central plan outlays, resources and expenditures; (f) various issues related to health, education, social Review of Fiscal position and analysis of fiscal issues; empowerment, gender issues, rural development etc. (g) Analysis relating to tax measures, direct and indirect those received from the other Divisions in DEA; (e) tax proposals/ reforms; (h) Providing inputs towards Participation/membership of Standing Committee on Macro-Economic Framework Statement for the Union Labour Force Statistics; (f) Preparation of chapter on Budget every year. ‘Social Infrastructure, Employment and Human Agriculture and Food Management Unit Development’ for Annual Economic Survey (Vol.-I & II); Agriculture and Food Management unit is responsible for: (g) Pre-budget meetings with labour unions, civil society (a) Providing policy advice on issues and matters related organizations, health, welfare and women’s organizations/ to Agriculture and Food Management; (b) Examining/ experts etc.; (h) Handling VIP/Parliament/Other Appraising Cabinet/ CCEA/ CoS/ EFC and other policy references related to the themes in social sector; (i) notes on fixing Minimum Support Prices (MSPs) for major Occasional review/reports on specific issues as and when crops/crop insurance policy/ other agricultural policies required; (j) Organizing workshops/inter-departmental including those related to change duty structure; (c) Pre- meetings on specific themes Budget meetings with stakeholders in farm sector; (d) Briefs for and appearances before the Parliamentary External Sector Unit Standing Committee on Agriculture related issues; (e) The External Sector (Trade, BOP & EDMU) is responsible Participation/Membership of Committees on related for the following: subjects like Private Entrepreneurs Guarantee (PEG) schemes of Food Corporation of India (FCI); (f) Analyzing i. Monitoring and analyzing the developments in production and area sown in Rabi and Kharif crops; (g) India’s External Sector i.e. Trade, Balance of Occasional review/ reports on specific issues as and when Payments (BoP) and External debt and providing required like “Incentivizing Pulses Production Through policy inputs/ briefs/ comments, etc., relating to Minimum Support Price (MSP) and Related Policies”; (h) same. Periodical monitoring of progress of Area sown/ Monsoon/ ii. Analysis of recent trends and developments in Rainfall distribution using inputs of the Crop Weather India’s trade, BoP and external debt which Watch Group (CWWG); (i) Analytical issues related to culminates into the External Sector Chapter Public Distribution System (PDS), buffer stock norms and published in Volume II of the Economic Survey. food security and MSP analysis like proportion of sales iii. Publication of an Annual Status Report on India’ below MSP in several markets during the procurement External Debt, based on inputs from relevant season; (j) Analysis of issues related to Allied sectors stakeholders like Reserve Bank of India (RBI) like dairy sector, fisheries, forestry and food processing; Aid, Accounts & Audit Division, Ministry of (k) Preparation of the Chapter on ‘Agriculture and Food Defence, SEBI, etc. Management’ for Annual Economic Survey (Volume 1 and Volume 2); (l) Handling VIP/ Parliament/ Other references iv. Publication of Quarterly Report on India’s and Private Member Bills related to agriculture and food External Debt for the two quarters ending management; (m) Offer comments on Studies/ MoUs/ September and December, through collection International Agreements/ Income tax exemptions to and compilation of data from different International Organizations dealing with agriculture & food stakeholders. The remaining two quarters’ management. reports are published by RBI. Industry and Infrastructure Unit v. Collection, compilation and provision of inputs on India’s External Debt data on quarterly basis Industry and Infrastructure Unit advises the Government to World Bank for its centralized database called, on policy issues relating to Industry at both macro and ‘Quarterly External Debt Statistics (QEDS)’, in sectoral levels. The unit regularly monitors and reviews compliance with IMF’s Special Data industrial growth and developments in the industrial sector Dissemination Standard (SDDS) requirements. and handles issues relating to investment / financing of public sector. The Unit is also responsible for monitoring vi. Dissemination of India’s defence debt data on a trends in production of core infrastructure industries. quarterly basis to all relevant stakeholders. 2Department of Economic Affairs I vii. Matters relating to Short-term Balance of point on all financing matters related to climate change Payments (STBoP) Monitoring Group. in the Ministry of Finance. It helps shape the firming up viii. Economic Activity tracker: Data maintenance of India’s stand on financing issues related to climate and updation of India’s key trade, BoP and change and sustainable development in fora like United external debt indicators on weekly/monthly/ Nations Framework Convention on Climate Change quarterly/annual basis as per availability of data. (UNFCCC), etc. It is vested with the task of preparing submissions on behalf of India as well as assessing ix. Policy inputs for Hon’ble FM, MOS, Secretary submissions of other member countries in these fora. on: The Unit frames inputs on an on-going basis on issues  Parliamentary debates and questions related related to National Action Plan on Climate Change and to trade, BoP and external debt, in the capacity development efforts on emerging issues  Speeches related to important economic like green growth, innovative and affordable financing events, options for sustainable development by preparing  Leading economic discussions at bilateral positions papers and analysis of technical issues and and multilateral forums such as G-20, World policy options. The Unit is also responsible for preparing Bank, IMF, OECD, concerning India’s trade and finalizing chapter on climate change and sustainable & BoP position and external debt development for the Economic Survey. sustainability. Coordination Unit Services Sector Unit The unit is responsible for: (a) Internal administration and The unit is responsible for: (a) Preparing the Chapter on coordination in Economic Division; (b) Organizing Finance Services Sector for the Economic Survey; (b) Monitoring Minister’s Pre-Budget meetings with various stake the performance of services trade; (c) Parliament Matters; holders; (c) Nomination of officers of Economic Division (e) Comments on Notes related to trade in services, WTO for Foreign Deputation to OECD meetings and other negotiations in Services, etc. meetings and workshops; (d) Coordination with all Units Prices Unit of Economic Division for publishing Economic Survey and The unit is responsible for: (a) Inflation monitoring based laying them before Parliament; (e) Preparation of Annual on the following Price Indices: (i) Wholesale Price Index Report of Department of Economic Affairs (portion relating (WPI), base: 2011-12=100; (ii) Consumer Price Index to Economic Division); (f) Organizing Delhi Economic (CPI)- Rural, Urban, Combined, base: 2012=100; (iii) Conclave, the annual International Conference on Consumer Price Index for Industrial workers (CPI-IW), thematic issues; (g) Coordination of Parliament work, RTI base: 2001=100; (iv) Consumer Price Index for matters, VIP references, public grievances etc; (h) All Agricultural Labourers (CPI-AL), based on 1986-87=100; administrative matters of Economic Division, for example (v) Consumer Price Index for Rural Labourers (CPI-RL), transfer/posting of Officers of Economic Division within based on 1986-87=100. (b) Price/inflation related issues: Economic Division. (i) issues related to domestic and international price IES Cadre unit behavior; (ii) issues related to seasonal price behavior; The unit is responsible for: (a) Career Management and (iii) issues related to Price Policy and inflation Placement of Officers; (b) Direct Recruitment into IES management; (iv) Preparation of Monthly Inflation through Examination conducted by UPSC; (c) Reports; (v) Drafting chapter on prices for pre-budget Examination Rules & Syllabus for IES Examination; (d) Economic Survey. (c) Committees/ Working groups: (i) Promotion of Feeder Post Holder to Junior Time Scale Participation in the various committees on price indices (Entry level) of IES; (e) IES (service) Rules and policy (CPI, WPI and RESIDEX); (ii) Participation in Macro Matters pertaining to IES; (f) Promotions/non-functional financial monitoring group constituted under DEA; (iii) Up-gradations to various levels by conduction/ arranging Participation in the meeting of Committee of Secretaries meetings of the Departmental Promotion Committee; (g) on Review of prices of essential commodities. Cadre Clearance for Deputation, study leave and other Money and Banking Policy Unit kinds of leave; (h) Empanelment of officers at various The unit is responsible for: (a) Monitoring of money levels; (i) Seniority List/ Civil list of IES Officers; (j) market trends and developments in monetary policy; (b) Seniority of Officers in the Feeder Grade and Roster Monitoring of banking policy and aggregate trends in Management of Induction Quota; (k) Training credit flows; (c) Fortnightly analysis of the monetary Programmes for In-Services officers and Probationers parameters; (d) Monitoring yields on G-Sec/Treasury Bills; based on training needs assessment for capacity building (e) Monitoring behavior of Call Money Rates and LAF of officers; (l) Cadre Review and restructuring of IES; operations; (f) Periodical updates on monetary policy and (m) Maintenance of APARs of IES officers; (n) Budget of Quarterly Reviews of RBI. IES Cadre, Annual Accounts etc.; (o) Court Cases, Climate Change Finance Unit Vigilance Cases and Disciplinary Matters; (p) The Climate Change Finance Unit serves as the nodal Maintenance of IES website. 3Annual Report 2020-2021 2. Budget Division overall policy related to Central Government Guarantees. 2.2.2 During the Financial year 2020-2021, the First 2.1 RESPONSIBILITIES Batch of Supplementary Demands for Grants 2020-2021 2.1.1 Budget Division is responsible for the preparation and connected Appropriation Bill 2020 was presented and of and submission to the Parliament, the Annual Budget passed by the Parliament in September 2020, the Second as well as Supplementary and Excess Demands for Batch of Supplementary Demands for Grants 2020-2021 Grants of the Central Government and of States under was laid in Parliament in the month of February, 2021. President’s Rule. The Division deals with issues relating 2.3 STATES SECTION: to Public Debt, Market Loans of the Central Government and State Government’s borrowing and lending, 2.3.1 States Section is assigned the work relating to guarantees given by the Government of India and the the following: administration of Contingency Fund of India. Processing  Release of States’ share of Central Taxes and of proposals from other Ministries/ Departments for re- duties to State Governments as per approved appropriation of savings in a Grant where prior approval recommendations of the Finance Commission. of the Ministry of Finance is required is also handled by  Work relating to the Constitution of the Finance Budget Division. The Division also handles the issues Commission and processing of its reports. pertaining to National Savings Institute (NSI), Small  Matters relating to financial provisions of various Savings Schemes and National Defence Fund. The work States’ Re-organisation Acts Monitoring and relating to Treasurer, Charitable Endowment is also review of repayment of Central loans and payment assigned to the Budget Division. of interest by State Governments. 2.1.2 Budget Division is assigned the matters relating  Processing and presentation of Budget and to Duties, Powers and Conditions of Service of the Supplementary Demands for Grants to Comptroller and Auditor General of India including Parliament in respect of States and UTs with submission of the Reports of the Comptroller and Auditor Legislature under President’s Rule. General of India relating to the accounts of the Union to 2.3.2. During the period, Budget Division has examined the President for being laid before Parliament, the recommendations made by the Fifteenth Finance entrustment/re-entrustment of audit of various Commission, seeking approval of the Cabinet to autonomous bodies/organisations to the C&AG of India implement major recommendations relating to tax etc. devolution and various Grants to be released to States 2.1.3 The Budget Division is responsible for during the financial years 2021-22 to 2025-26. The Final administration of “Fiscal Responsibility and Budget Report has been laid in both Houses of the Parliament Management Act, 2003” which was brought into force on 1.2.2021 along with an Explanatory Memorandum as w.e.f. 5th July, 2004. Statements of Fiscal Policy, Half to the Action Taken Note on the recommendations made yearly Reviews including Mid-term Review and disclosure by the Fifteenth Finance Commission. statements have been presented in Parliament in 2.4 PLANNING AND ALLOCATION SECTION: accordance with the requirements of the FRBM Act. 2.4.1 The Planning & Allocation Section is responsible 2.1.4 Budget Division also oversees/facilitates the for finalization of Ministry/Department wise Gross implementation of ‘Gender Budgeting’ in various Budgetary Allocation, finalization of estimates of Extra- Ministries/Department. budgetary Resources (EBRs) and their monitoring, 2.1.5 The work relating to form of Accounts kept under reporting, etc. The details of EBRs raised are provided in Article 150 of the Constitution of India is also handled in Statement 27 of Expenditure Profile of Union Budget this Division. Advice on the classification of Government 2021-22. receipts and expenditure and on the accounting 2.4.2. This Section also handles issues concerning procedure drawn up for implementation of new schemes earmarking of funds for welfare of Scheduled Castes & of the Government is also rendered by the Division. Scheduled Tribes by obligatory Ministries/Departments 2.1.6 In an unprecedented initiative, Union Budget as prescribed in NITI Aayog’s guidelines. The details of 2021-22 was delivered in paperless form. “Union Budget fund allocation for SCs/STs by the obligatory Ministries/ Mobile App” was also developed for hassle-free access Departments is provided in Statement No. 10A & 10B of of Budget documents by Members of Parliament and the the Expenditure Profile of Union Budget. general public using the simplest form of digital 2.5 NATIONAL SAVINGS SECTION: convenience. 2.5.1. Small Savings Schemes: 2.2 SUPPLEMENTARY DEMANDS SECTION: Following Small Savings Schemes are currently 2.2.1 Supplementary Demands Section is responsible administered by Budget Division in Department of for coordination and presentation of Supplementary Economic Affairs: Demands for Grants, Demands for Excess Grants and the connected Appropriation Bills and parliamentary work  Post Office Savings Account in this regard. Other activities of the Section relate to  National Savings Time Deposits ( 1,2,3 & 5 years) administration of the Contingency Fund of India Act and  National Savings Recurring Deposits 4Department of Economic Affairs I  National Savings Monthly Income Scheme the small savings schemes were being invested in the  Senior Citizens Savings Scheme Special Securities of State Governments and UT.s (with Legislature). However, based on the recommendation of  National Savings Certificate ( VIII-Issue) the Fourteenth Finance Commission, it has been decided  Public Provident Fund to advance NSSF loans only to the willing States w.e.f.  Kisan Vikas Patra 01.04.2016. Accordingly, only four States, namely, Arunachal Pradesh, Delhi, Kerala and Madhya Pradesh  Sukanya Samriddhi Account. have opted for the NSSF loan. Besides, it has been 2.5.2. Small Savings Collections: decided to invest NSSF corpus in various Public Agencies The gross deposits under various small savings (National Highways Authority of India, Food Corporation schemes during 2020-21 are estimated (RE) at of India, Air India etc.). During the current financial year, Rs.868132.61 crore as against the deposit of an amount of Rs.99636 crore is estimated to be extended Rs.846660.74 crore during 2019-20. An amount of in these agencies. Rs.20376.39 crore (RE) is estimated to be transferred, 2.5.4. Interest Rates on Small Savings Instruments as share of net small savings collections to Arunachal Pradesh, Kerala, Madhya Pradesh and UT of Delhi during Interest rates on Small Savings Schemes are the current fiscal, as against the sum of Rs.18702.87 decided/notified by Government every quarter of the crore transferred to these states and UTs (with Financial Year. Legislature) during 2019-20. The rate of interest on Small Savings Schemes is decided 2.5.3. National Small Savings Fund: in view of the recommendations of Shyamala Gopinath Committee. The committee has recommended to align In order to account for all the monetary the rate of interest on Small Savings Schemes with the transactions under small savings schemes of the Central Government under one umbrella, the “National Small G-Sec rates of similar maturity. Savings Fund” (NSSF) was set up in the Public Account The rate of interest on various small savings schemes of India w.e.f. 1st April, 1999. The net accretions under for the FY 2020-21 is given below: Rate of Interest in FY 2020-21 (in %) Instrument Quarter I Quarter II Quarter III Quarter IV Savings Deposit 4.0 4.0 4.0 4.0 1 Year Time Deposit 5.5 5.5 5.5 5.5 2 Year Time Deposit 5.5 5.5 5.5 5.5 3 Year Time Deposit 5.5 5.5 5.5 5.5 5Year Time Deposit 6.7 6.7 6.7 6.7 5 Year Recurring 5.8 5.8 5.8 5.8 Deposit 5 Year SCSS 7.4 7.4 7.4 7.4 5 Year MIS 6.6 6.6 6.6 6.6 5 Year NSC 6.8 6.8 6.8 6.8 PPF 7.1 7.1 7.1 7.1 Sukanya Samriddhi 7.6 7.6 7.6 7.6 Account Kisan Vikas Patra 6.9 ( will mature in 6.9 ( will mature 6.9 ( will mature in 6.9 ( will 124 months) in 124 months) 124 months) mature in 124 months) 2.6 WAYS AND MEANS SECTION 2.6.1.3 During the financial year 2020-21, Government 2.6.1 Government Borrowings has planned to borrow Rs. 12,80,000 crore through dated securities, out of which till Feb.08, 2021 borrowing to the 2.6.1.1 The Central Government’s normal borrowing extent of Rs. 11,76,365 crore has been accomplished. through issue of dated securities for financing the fiscal GoI has also plan to borrow additional amount of Rs. deficit was budgeted in BE 2020-21 at Rs. 12,80,000 1,10,000 crore for extending on back to back loans to crore (Gross) and Rs. 10,52,788 crore (net). provide funds to States/UTs on a/c of GST compensation 2.6.1.2 During the year, Government continued with the cess. policy of announcement of half yearly indicative market borrowing calendar based on its core borrowing 2.6.1.4 The weighted average yield and maturity of dated requirements. securities issued during 2020-21 (April 01, 2020 to Feb. 5Annual Report 2020-2021 08, 2021) were 5.77 % and 14.98 years respectively, as framed there under is the prime function of the FRBM compared to 6.84 % and 16.15 years in the corresponding Section. The FRBM Act provide for the responsibility of period of the financial year 2019-20. the Central Government to ensure inter-generational 2.6.1.5 Detailed analysis of existing debt and liabilities equity in fiscal management and long-term macro- of the Government is brought out in the annual debt economic stability by removing fiscal impediments in the papers, published during 2011-12, 2013-14, 2014-15, effective conduct of monetary policy and prudential debt 2015-16, 2016-17, 2017-18 and 2018-19 (available on https://dea.gov.in/documents-reports). management consistent with fiscal sustainability through limits on the Central Government borrowings, debt and 2.6.2 Cash Management deficits, greater transparency in fiscal operations of the 2.6.2.1 With the objective to improve the Cash Central Government and conducting fiscal policy in a Management System in the Central Government, a modified cash management system, including exchequer medium-term framework and for matters connected control based expenditure management system was therewith or incidental thereto. introduced in respect of 15 Demands for Grants in Central 2.7.2 During the period from April 1, 2020 to December government w.e.f. April 1, 2006 vide this Ministry’s O. M. 31, 2020, in compliance with the relevant provisions of No. 21 (1)-PD/2005 dated January 10, 2006. The system was later extended to 23 & 46 Demands for Grants w.e.f. the FRBM Act and Rules framed thereunder the following April 1, 2007 and April 1, 2012. It has now been made documents were prepared and laid before both Houses applicable to all the Demands for Grants of the Union of Parliament: Government vide this Ministry’s O.M. No. 21(1)-B(PD)/ A) Statements of fiscal policy presented with Union 2014 dated July 22, 2015 and F. No. 4(10)-W&M/2016 dated August 4, 2016 and F. No. 15(39)-B(R)/2016 dated Budget 2020-21. August 22, 2017. a) Medium-Term Fiscal Policy cum Fiscal Policy 2.6.2.2 During 2020-21, due to COVID-19 pandemic, Strategy Statement revised quarterly Cash Management guidelines were b) Macro-Economic Framework Statement issued for better management of resources to contain the spread of pandemic and to provide necessary B) Disclosure statements: assistance to the masses/needy people of the country. a) Tax Revenues raised but not realised 2.6.2.3 As per the guidelines of the system, all the b) Arrears of Non-Tax Revenues Demands for Grants are required to prepare and send their Monthly Expenditure Plans (MEPs) and Quarterly c) Asset Register Expenditure Allocations (QEAs) to Cash Management C) Half yearly Statements on Review of the trends Cell for better monitoring and compliance of the guidelines of the Ministry of Finance regarding expenditure in receipts and expenditure in relation to the management. The revised guidelines also provide that budget at the end of- the expenditure in the last quarter and last month of the a) Second Half of the financial year 2019-20 financial year may be within the budgetary provision. b) First Half of the financial year 2020-21- This 2.7 FISCAL RESPONSIBILITY AND BUDGET MANAGEMENT SECTION will be presented during Budget Session. 2.7.1 Administration of the Fiscal Responsibility and 2.7.3 Fiscal indicators in FY 2019-20 and targets for Budget Management Act (FRBM), 2003 and the Rules RE 2020-21 and BE 2021-22 are as below: Fiscal Indicators/ Year 2019-20 2020-21 (RE) 2021-22(BE) Fiscal Deficit 4.6 9.5 6.8 Central Government Debt* 50.3 62.2 61.0 Note: GDP for the year 2019-20 is 203.51 lakh crore at balance available at the end of that date with external current prices as shown in First Revised Estimates issued debt valued at current exchange rate. EBR (fully serviced by M/o Statistics & Programme Implementation on Government Bonds) have also been included. External 29.01.2021. Debt is at historical cost (book value). *Central Government Debt includes all liabilities of the 2.8 PUBLIC DEPOSITS SECTION Central Government against the consolidated fund of 2.8.1 Budget Division is also responsible for fixation India and all public account liabilities, reduced by the cash of rate of interest on the following: 6Department of Economic Affairs I a) House Building Advance (HBA). the borrowing of GoI, increased interaction with market b) General Provident Fund (GPF) and other similar participants etc. It has also endeavoured to build expertise Funds. in the sphere of debt management, in order to ensure seamless and disruption free separation of debt c) Special Deposit Scheme (SDS). management functions from RBI to PDMA. d) Employees Provident Fund (EPF). 2.10.5 One of major function undertaken by PDMC is e) Seamen’s Provident Fund (SPF). dissemination of information on public debt through f) Coal Mines Provident Fund (CMPF). periodical reports. Towards ensuring the enhanced g) National Defense Fund(NDF). transparency in public debt management operations, the 2.8.2 Apart from the above, the responsibility of Government of India has been publishing a number of compilation, monitoring and review of Non Tax Revenue documents detailing overall debt position of the country, Receipts also rests with Budget Division. consolidated debt data relating to public debt, debt management strategies of central government debt, etc. 2.9 REPORT AND COORDINATION SECTION These publications include an annual Government Debt 2.9.1 During the above period, Budget Division also Status Paper (since 2010), Debt Management Strategy coordinated the Pre-Budget Meetings for finalization of document (2015) and Handbook of Statistics on Central Revised Estimates 2020-2021 and Budget Estimates Government Debt (since 2013). Government has 2021-2022. Work relating to security and other consolidated all these publications into this single report arrangements in connection with presentation of Union to bring complete Government Debt and its Management Budget in the Parliament is also a part of the related information at one place. ‘Status Paper on responsibilities handled by the Division. Government Debt’ for year 2018-2019 was released last 2.9.2 From 1st April, 2020 to 31st January, 2021, 29 on May 22, 2020. The work on “Status Paper on Reports of the C&AG of India were laid before the Government Debt” for year 2019-20 is under progress. Parliament and 25 proposals of entrustment/re- This report covers various facets of public debt including entrustment of audit of various bodies to the C&AG of overall debt position of the country, assessment on India were dealt by this Section. aspects of debt sustainability, debt management strategy 2.10 PUBLIC DEBT MANAGEMENT CELL covering various risks, etc. This publication now brings all components of public debt under the Debt 2.10.1 As a first step towards the establishment of Management Strategy, thus widening its scope and acts autonomous Debt Management Office, a Middle Office as a guide to debt managers in carrying out day to day (MO) was set up in the DEA, MoF in September 2008. debt management. The PDMC also publishes quarterly This was required to build skills and develop expertise in report on Public Debt and is also responsible for uploading debt management functions which is a time consuming the public debt related data on National Summary Data process. Page. 2.10.2 Consequent upon the announcement in Lok Sabha 2.11 BUDGET PRESS in April 2015 by FM, consultations were held with RBI and other stakeholders on way ahead and it was decided 2.11.1 Budget Press is responsible for printing of all to initially set up a Public Debt Management Cell (PDMC) Budget Documents relating to the Union Budget including as an interim arrangement before setting up of an Detailed Demand for Grants of Ministry of Finance and Supplementary Demands for Grants. During the year independent and statutory PDMA in due course. The 2020-21, the Budget Press contributed in execution of interim arrangement will allow separation of debt 1st paperless Union Budget 2021-22 presented on 1st management functions form RBI in a gradual and Feb, 2021 in the Parliament amid Covid 19 pandemic, seamless manner, without causing market disruptions. which involved timely preparation & consolidation of total It was also decided that the work for moving towards 24 documents in digital format and was uploaded in the PDMA would be taken up in a phased manner. Union Budget App in Hindi & English. Apart from this, 2.10.3 Considering the extant legal provision, only total 101 various documents were printed in all with as advisory functions were assigned to PDMC to avoid any many copies required during 1.4.2020 to 31.1.2021. conflict with the statutory functions of RBI. In view of 2.11.2 Apart from Union Budget, the Budget Press printed electronic infrastructure created by RBI, it was also First Batch and Second Batch of Supplementary agreed that the operations concerning Front Office, Demands for Grants for the year 2020-21, Detailed comprising of electronic auction system and Back Office, Demands for Grants for the year 2021-22, Action Taken comprising of depository and registry services would Report, Cabinet Note (Hindi & English) and Discussion continue to be housed with RBI even with an independent Paper. The Annual Report 2020-21 was printed during PDMA coming into being. Accordingly, a Public Debt February-March, 2021. Management Cell (PDMC) was set up in DEA on October 4, 2016. Formation of PDMC was also the first step 2.12 HINDI BRANCH towards consolidation of all components of public debt 2.12.1 All Budget documents are presented to the under one agency. Parliament in Hindi and English. Besides Budget 2.10.4 In addition to carrying out various advisory documents, Hindi translation Branch has also prepared functions assigned to it, PDMC has also been working Hindi versions of Supplementary Demands, Economic towards formation of statutory PDMA and initiated many Classification Report, Reports on Public Statistics and Status Report of External Debt, FRBM half-yearly necessary steps in this regard, namely, building an Reports which were laid before the Parliament. independent debt database, increased role in planning 7Annual Report 2020-2021 3. Financial Market Division (IFSCA) and Securities Appellate Tribunal (SAT). The division facilitates the sovereign credit rating by A. Work Allocation in Financial Markets (FM) Division various credit rating agencies and financial regulatory dialogues with USA, UK and Japan and EU. Introduction FM Division is responsible for the administration of Financial Markets Division is primarily responsible for SEBI Act 1992, Foreign Exchange Management Act policy issues related to the development of the securities markets and matters incidental thereto. The Division is (FEMA) 1999, International Financial Services Centres also responsible for policy matters relating to foreign Authority Act, 2019, Securities Contracts Regulation exchange management. Since 2013, the Division is (SCRA) Act 1956, Depositories Act, 1996 and Section entrusted with the development of commodity derivative 20 of the Indian Trust Act, 1882 and related rules markets. The division looks after the administrative regulations and notifications thereunder. Issues related matters of the Securities and Exchange Board of India to erstwhile Forward Contracts (Regulation) Act, 1952 is (SEBI), International Financial Services Centres Authority also handled in the FM Division. Organogram Joint Secretary (FM) Dir (PM) DS (SM IG & Dir (EM & DS (RE, Dir (CD JPC) ECB) IC& Co-ordn.) ) AD DD DD DD DD DD DD US(CO US US DD (PM1) (PM2) (SM1) (SM2) (EM1) (EM2) (IC) ORD) (RE) (CD) (CD) Sections in Financial Market Division 5. Financial literacy The various Sections and their work allocation are given 6. Matters related to National Institute of Securities below (each of the sections handle the parliament Market (NISM) questions, grievances, RTIs, court cases miscellaneous 7. Policy articulation on agenda items of SEBI’s references etc. belonging to their work areas): Board meetings (primary responsibility) I. Primary Markets (PM) Section 8. SEBI Act and related rules and regulations 1. Policy formulation on issues relating to initial and 9. Investment Guidelines for Non-Government further issue of capital and related intermediaries engaged Provident Funds, Superannuation Funds and Gratuity in the Primary Capital raising as Funds (a) Mutual funds, 10. Coordinating DEA-NIFM Research Programme (b) Collective investment schemes, 11. Sectoral Charge of Ministry of Corporate Affairs. (c) Alternative investment funds, II. Secondary Markets Section (d) Domestic credit rating agencies, 1. Policy issues of Secondary Market and related (e) Merchant Banks etc. Market Infrastructure Institutions (MIIs), Intermediaries 2. Matters related to Corporate Governance and and Participants (Stock Exchanges, Clearing Minimum Public Shareholding. Corporations, Depositories their participants, Trading 3. Policy issues related to Mergers, takeovers and Members, and Investment Advisors etc.), their ownership acquisitions and governance issues etc. 4. Development of Corporate bond market 2. Social Stock Exchange/SME Exchange/New 8Department of Economic Affairs I Segments/ platforms for trading in securities /crowd 8. NSEL scam related matters: holding inter- funding platforms ministerial, inter-agency periodic review meetings on NSEL scam 3. Taxes and Stamp Duties in Securities Market 9. Evaluation of relevant items in SEBI board 4. Skilling in securities market /capacity building Agenda initiatives 5. Delisting of companies and associated policy IV. External Markets (EM) Section concerns 1. Foreign Portfolio Investment 6. Creating a Single Demat Account for all financial 2. Direct Listing of equity shares of Indian assets companies in overseas exchanges 7. Database relating to Securities Markets 3. American Depository Receipts/Global Depository 8. Monitoring of Stock Market Movements Receipts/Indian Depository Receipts 9. Self-Regulatory Organizations 4. FEMA Regulations of RBI 10. Cyber security related matters in context of 5. Global Bond and Equity Indices Securities Market 6. International Settlement of Indian G-Sec through 11. Regulation of distributors /distribution of financial ICSDs products in context of Sumit Bose Committee 7. Issuance of Bonds by Multilateral Institutions recommendation 8. Approval of foreign travel of Chief Ministers/ 12. Matters related to Investor Education and Ministers/MLAs/Administrators/Officers of States and Protection Union Territories 13. Policy on Frozen Demat Accounts 10. Sectoral charge of Ministry of Law and Ministry of 14. Ratification of UNIDROIT / Geneva Securities Parliamentary Affairs Convention V. External Commercial Borrowings (ECB) 15. Securities Contracts (Regulations) Act, 1956 and Section related Rules and Regulations 1. International Financial Service Centres and GIFT 16. Depositories Act, 1996 and related Rules and IFSC Regulations 2. External Commercial Borrowings, Trade Credits III. Commodity Markets Section and Offshore Rupee denominated Bonds [Masala bonds] 1. Policy matters related to development of 3. Foreign Exchange Management Act commodity derivatives market: Design of new products / 4. Currency Derivatives contracts, entry of new players – domestic as well as 5. Trade payments mechanisms with specific foreign, harmonization of rules and procedures with countries securities market, encouraging hedging by government entities / farmers etc. 6. FEMA Rules including Non Debt Instruments Rules and Current Account Rules 2. Notifying commodities for trading: Resumption/ suspension of futures trading in various notified 7. Approval for establishment of Liaison office / commodities /Launch of Plain Vanilla Options Contract Branch office/ Project Office in India by Foreign entities 3. Integration of Commodity spot and derivatives 8. Approval for purchase of immovable property in market: India by foreigners/ non- residents 4. Commodity derivatives trading related matters: 9. Approval for opening Non Resident Ordinary cases of manipulation/speculation etc. (NRO) and Non Resident Rupee (NRE) Accounts by foreigners/ non-residents 5. Representing DEA in futures market related matters in the inter-ministerial committees on Essential VI. Regulatory Establishment (RE) Section Commodities’ price rise etc. 1. Carrying out Board level appointments of SEBI, 6. Representing DEA in Commodity Derivative appointment of Presiding Officer and Registrar of SAT Advisory Committee of SEBI – processing CDAC agenda and administration of related Rules and Regulations items 2. Constitution of the FSRASC 7. Delivery arrangements in the market: Taking up matters related to warehouses accredited by stock 3. Establishment matters of SEBI like general fund, exchanges with WDRA and Ministry of Consumer Affairs audit, and appointment of CVO etc. 9Annual Report 2020-2021 4. Establishments matters of SAT like residential 6. Residual work related to Unit Trust of India/ accommodation, grant of budget to SAT and related SUUTI/ UTIAMC. matters, Grant of vehicle to the officers in SAT etc. 7. Internal Charge of 5 states (Bihar, 5. Strengthening of SAT - Creation of additional U.P.,Uttarakhand, Himachal Pradesh & Jharkhand) benches / Creation of posts / creation of additional office IX. Coordination Section space for SAT / Implementation of e-Court in SAT etc. 1. Internal Coordination within FM Division for 6. Administration of the Securities Appellate providing periodical inputs /reports to various Tribunal (Salaries, Allowances And Other Terms And Departments /Ministries, submission of material for Conditions Of Presiding Officer And Other Members) annual reports, economic survey etc. Rules, 2003 2. Meeting on Senior Management Group (SMG) 7. Tribunal, Appellate Tribunal and other Authorities taken by Secretary (EA) to evaluate pending VIP (Qualifications, Experience and other Conditions of reference, PMO reference and Parliamentary on Monday Service of Members) Rules, 2017 of every week. Management of e-Samiksha and LIMB 8. MoU between SEBI and any foreign country Sportals in respect of FM Division related complaints, VIP/ 9. Remittances from SEBI to the consolidated fund PMO references, cabinet notes, court cases, Senior of India Management Group Meetings etc. 10. Foreign visits of the Chairman of SEBI; Hosting 3. Monthly summary in respect of activities, of meetings of foreign delegations – obtaining the major achievement and important policy decisions taken necessary clearances in DEA are sent to Cabinet Secretariat VII. International Cooperation (IC) Section 4. Work management /allocation issues within FM Division 1. Facilitating Sovereign Credit Rating of India (Fitch, Moody’s, S&P, DBRS, JCRA, R&I) 5. Website management in respect of FM Division matters 2. Coordinating DEA – NIPFP Research Programme 6. Internship Management within FM Division 3. Bilateral Trade arrangement with Iran B. Recent Developments 4. Indo-US Financial Regulatory Dialogue /Indo-US I. Primary Markets: Financial Initiative 1. Capital market, both debt and equity, has become 5. Indo Japan Financial Regulatory Dialogue increasingly important for Indias growth story. On the equity side, despite the disruption caused by COVID 6. India-UK Financial Market Dialogue shock, the total funds raised through public issue [Initial 7. Indo-UK Financial Partnership Public Offering (IPO), Rights Issue, Preferential Issue, 8. India-EU Financial Regulatory Dialogue Qualified Institutional Placement] have touched Rs. 1.43 lakh crores till October 2020. On the debt side, the funds 9. Bilateral Trade arrangement with Iran raised through corporate bonds this financial year till 10. Other International matters October 2020 are around Rs. 4.4 lakh crores. The Assets 11. Interactions with financial analysts and under Management (AUM) of mutual fund industry stood economists at Rs. 28, 22,941 crores. Detailed data is given in Annexure A. VIII. Joint Parliamentary Committee (JPC) and Investor Grievances (IG) Section 2. The Securities and Exchange Board of India (SEBI) in consultation with Government has taken several 1. Matters related to Section 20 of Indian Trust Act measures to ease the process fund raising from primary 1882 markets. 2. Preparation of Progress Report on Action taken on recommendations of Joint Parliamentary Committee i. SEBI on 22 June 2020 has relaxed the (JPC) on Stock Market Scams and matters related framework for stressed companies to raise thereto. funds from the market, through preferential 3. Matters related to Nizam Trust issue based on the last two weeks price (instead of following the extant pricing norm 4. Handling of Investors’ Grievances (Electronic & of higher of the 26 weeks or 2 weeks price), Physical) related to FM Division/ transferring of other subject to certain conditions. representations to respective authority ii. SEBI, on 16 June 2020, amended the SEBI 5. Study/ Survey on reforms required in Investors’ (Issue of Capital and Disclosure Grievance Redressal Mechanisms in context of Securities Requirements) Regulations, 2018 to relax Markets 10Department of Economic Affairs I the requirement of minimum 6 months time gap between has mandated all open-ended debt schemes to hold at two consecutive QIP issues so that a least 10% of their net assets in liquid assets. SEBI, vide subsequent QIP may be initiated after expiry circular dated 5 October 2020, has introduced guidelines of two weeks from the date of the previous for determining the place of a mutual fund on its risko QIP. meter tool, w.e.f.1st Jan 2021. Mutual Funds have to Source: SEBI *(till Oct 2020) update the risk-o-meter on a monthly basis on their iii. Measures were also taken for streamlining websites and the AMFI website. It is useful for investor of process of issue of Rights in securities awareness and protection. by listed entities while reducing the time period involved in the entire process from 5. Government of India in coordination with financial around 55 days to 31 days, relaxations in sector regulators has been taking concerted steps to eligibility conditions for Fast Track Rights develop the corporate bond market in India. Issue, Fast Track Further Public Offer i. SEBI on 08.10.2020 brought about (FPO), etc. certain amendments in SEBI (Debenture Trustee) Regulations, 1993 and other 3. DEA vide notification dated 31st July 2020 has relevant regulations to strengthen the amended the Securities Contract (Regulation) Rules, role of debenture Trustees (DT(s) in 2020 to give extension of one additional year till August, carrying out continuous monitoring and 2021 to listed Public Sector Undertakings and listed Public due diligence for protecting the interest Sector Banks to ensure compliance with Minimum Public of debenture holders. Shareholding Requirements. ii. SEBI, on 08.10.2020, amended the SECC Regulations to facilitate setting 4. The MF industry AUM which stood at Rs. 22.26 up of a Limited Purpose Repo Clearing crores on 31st March 2020 has increased to around Rs. Corporation focused on development of 28 lakh crores by October, 2020. In order to deal with repo market for corporate bonds. sudden unplanned redemptions in liquid schemes, SEBI, iii. SEBI vide circular dated October 05, in consultation with Government, has strengthened the 2020 standardized timelines for listing of prudential norms to be followed by Mutual Funds (MFs) securities issued on private placement to enhance the safeguard available for investors and basis to T+4 trading day under its maintain the orderliness and robustness of MFs. SEBI Regulations. Annexure A. Details of Funds mobilized through Primary Market (As per SEBI November, 2020 Monthly Bulletin) Capital Raised from the Primary Market (Equity) (amounts in Rs. crores) Year/Month Total Rights QIP Preferential Issues IPOs (Main IPOs on board) SME platform No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount issues issues issues issues issues issues 2018-19 551 2,37,077 10 2149 14 8678 404 210163 13 14243 110 1844 2019-20 369 3,06,192 16 55,642 14 54389 282 174875 11 20791 46 495 2020-21* 188 1,43,451 14 60,536 16 56,475 132 18,705 9 7623 17 112 Source: SEBI *(till Oct 2020) 11Annual Report 2020-2021 Table 2: Data on corporate bond issuance (2014-15 to 2020-21) Issue Type 2018-19 2019-20 2020-21 No. Amount No. Amount No. Amount (Rs Cr) (Rs Cr) (Rs Cr) Public 25 36,679 34 14,984 7 1332 Issue (Debt)$ Pvt. Placement 2,358 6,10,318 1,787 6,74,703 1157 4,42,526 of Corporate Bonds* Total Debt 2,379 6,46,997 1,820 6,89,687 1164 4,43,858 (Public & Pvt.) *Source: SEBI website (up to 31.10.2020) Table 3: Secondary Market Trading in Corporate Bonds Traded Value Year No. of (in Rs. Crores) Trades 2018-19 17,99,660.00 1,03,527 2019-20 22,27,821.00 1,38,227 2020-21 (upto 31 12,35,751 80,064 October 2020) Source: SEBI Table 3 : Asset under Management (AUM) by Mutual Funds (Rs. Crores) Asset Under Management (AUM) by Mutual Funds (Rs. Crores) Year AUM of MFs 2014-15 9,45,320.55 2015-16 12,32,823.53 2016-17 17,54,619.08 2017-18 21,36,035.75 2018-19 23,79,584.13 2019-20 22,26,202.87 2020-21* 28,22,941.00 S ource: SEBI Statistics, * up to Oct 2020. I. External Markets: Gazette Notification dated 27th April, 2020. The Chairman and ex-officio members of the Authority have been A. International Financial Services Centres appointed and all sections of IFSCA Act have been notified Authority (IFSCA): in the Official Gazette. The following key notifications Pursuant to the passage of IFSCA Act in December 2019, pertaining to IFSCA were also notified by DEA during the IFSCA was established and made operational vide year: 12Department of Economic Affairs I  Notification of Aircraft lease which IFSCA, the unified regulator for IFSC area, has shall include operating and financial also brought out key regulations such as the lease as financial product and Global IFSCA (Banking) Regulations, IFSC (Bullion) in-House Centres (GIC), as financial Regulations and IFSC (Global In-House Centres) service: Vide Gazette notification dated Regulations. As a step towards making GIFT- 16th October, 2020 aircraft leasing and IFSC a global FinTech hub IFSCA has issued global in- house centres were notified as the framework for “Regulatory Sandbox” and a financial product and financial service “Innovation Sandbox” as well. respectively. The notifications will go a long way in improving the ease of doing The vision of GIFT IFSC is to establish itself as business within the IFSC and will fast a dominant gateway for global financial flows into track the development of GIFT IFSC into and out of India, and simultaneously emerge as a global hub for aircraft financing and a major global financial hub. In pursuit of this leasing and for finance-related GICs. ambition it aims to leverage domestic economy  Notification of bullion as a financial and Indian Diaspora, match tax regime with product and related services as a offshore jurisdictions, institutionalize a modern financial service: vide Gazette unified regulatory framework, develop networks/ Notification dated August 31st, 2020 connects with major financial hubs, and have a Bullion was notified as a financial product diversified range of financial products. These and related services as financial services endeavours will enable the transition of GIFT under the IFSC Authority Act, 2019. This IFSC into a globally competitive financial hub for has paved the way for the establishment international banking, insurance and capital of International Bullion Exchange at market activities which serves both the Indian IFSC Gandhinagar. Economy and the region as a whole. Snapshot of External Market B. Participation of Foreign Portfolio Investors (FPIs) in Securities Market FPI/FII Investment in India from 2012-13 to 2020-21 INR Crores Calendar Year Equity Debt Debt - VRR Hybrid Total January 12122.6 -11648 529.2 -46.3 957.5 February 1819.8 2096.8 2637.3 2416.4 8970.2 March -61972.8 -60375.8 4164.8 -19.3 -118203.1 April -6884 -12552 4033 544 -14859 May 14569 -22935 1000 11 -7356 June 21832 -1545 3766 1957 26009 July 7563 -2476 -1786 1 3301 August 47080 -3310 2762 3347 49879 September -7783 3958 406 2222 -1196 October 19541 1641 851 -207 21826 November 60358 -1806 4399 -169 62782 December ** 44209 5384 -1089 169 48673 Source: NSDL, ** Up to 16th December 2020 13Annual Report 2020-2021  FPI flows were in the positive territory demonstrated by the trends in FPI flows for the first two months of 2020 with total that indicate and underline the faith of net investment inflows of Rs.9927 cr. global investors in the strength and Thereafter, for a short period as the resilience of Indian economy. impact of COVID-19 began to unfold  Morgan Stanley Capital International around the world, there were outflows in (MSCI), a leading provider of analytics net FPI investment during Mar-May to and indices which are tracked by global the tune of Rs. 1,40,418 cr. There soon investors, announced the addition of followed a strong rebound in FPI flows several Indian companies across its from June 2020 largely driven by equity various Indices on November 10. This investment. FPIs made a net investment was on account of rationalisation of of Rs. 1,88,071 crores up to Dec 8, 2020 foreign investment policy by DEA in the with the month of November witnessing FEM (NDI) Rules 2019 whereby the the highest ever monthly FPI inflows at statutory limit for aggregate FPI Rs. 62782 cr. investment in a company was increased  The robust FPI inflows which have from 24% to the sectoral cap w.e.f 1st happened in the latter half of 2020 has April 2020. These new additions are been aided by several proactive expected to significantly increase measures taken by the Government and India’s weight in MSCI Emerging the regulators to improve the business Markets Indices and drive passive environment for FPIs. The Indian growth inflows into Indian capital markets. story continues to expand as is C. External Commercial Borrowing in India: ECB net inflows from FY 2016-17- till date is presented as under to capture the trends and patterns: USD Million 2016-17 2017-18 2018-19 2019-20 2020-21 (Till October 2021) (-) 4,526 2,245 13,349 52,932 14663 * Data for latest month are as per the scheduled drawdown (indicated by borrowers in Form-ECB) in absence of ECB-2 Return. The following broad trends emerge out the data: COVID-19 pandemic was notified on a) The actual inflows have increased for ECBs in 22nd April, 2020. the last two financial years. ii. FEM NDI (Second Amendment) Rules, b) The net inflows for ECBs were negative for the 2020: Regarding Press Note 1 (2020) of FY 2016-17. However, the last two years have DPIIT pertaining to the review of Foreign seen the net inflows turn positive and there has Direct Investment (FDI) policy in been a substantial increase in FY 2019-20. Insurance Sector was notified on 27th April, 2020. D. Foreign Exchange Management (Non–Debt Instrument Rules) iii. FEM NDI (Third Amendment) Rules, 2020: Regarding Press Note 2 (2020) of Pursuant to the amendments to FEMA 1999 through the Finance Act, 2015, Ministry of Finance had notified the DPIIT pertaining to the review of Foreign Foreign Exchange Management (Non-debt Instruments) Direct Investment (FDI) policy in Civil Rules, 2019 vide Notification No. 3732(E) dated 17th Aviation and for transferring the October, 2019. With regard to NDI Rules, the following administration of NDI Rules to RBI was amendments have been notified during 2020-21: notified on 27th July, 2020. i. FEM NDI (Amendment) Rules, 2020: iv. FEM NDI (Fourth Amendment) Rules, Regarding Press Note 3 (2020) of DPIIT 2020: Regarding Press Note 4 (2020) of pertaining to the review of Foreign Direct DPIIT pertaining to the review of Foreign Investment (FDI) policy for curbing Direct Investment (FDI) policy in opportunistic takeovers/acquisitions of Defence Sector was notified on 8th Indian companies due to the current December, 2020. 14Department of Economic Affairs I III. Secondary Markets : benchmark index NIFTY 50 gained 7.02% and BSE benchmark Indian Market Performance index Sensex gained 6.58%. For the previous calendar year, In the current year 2020, as on 30th November 2020, the NSE Nifty 50 and Sensex gained 14.38% and 12.02% respectively. Last Day of the Last Day of As on 30th Performance in Performance in Index calendar year the calendar November, Calendar Year Calendar Year 2018 (31st year 2019 (31st 2020 2019 (% change 2020 till 30th December, December, for the calendar November, 2018) 2019) year 2019) 2020 Indian Markets SENSEX, India 36068.33 41,253.74 44149.72 14.38 7.02 NIFTY, India 10862.55 12,168.45 12968.95 12.02 6.58 Emerging Markets Indice 87887 115964 108888 31.95 -6.10 BOVESPA, Brazil KOSPI, South 2041.04 2197.67 2591.34 7.67 17.91 Korea TAIWAN TAIEX, 9727.41 11997.14 13722.89 23.33 14.38 Taiwan Developed Markets S&P 500, US 2485.74 3230.78 3621.63 29.97 12.10 DAX, Germany 10558.96 13249.01 13291.16 25.48 0.32 FTSE 100, UK 6734 7542.4 6266.2 12.00 -16.92 CAC-40, France 4678.74 5978.06 5518.55 27.77 -7.69 NIKKEI 225, Japan 20014.77 23656.62 26433.62 18.20 11.74 HANG SENG, 25504.2 28189.75 26341.49 10.53 -6.56 Hong Kong Source: Cogencis Key Developments: notifications dated 8th January, 2020. Further, in order to ensure smooth 1. Amendments in the Indian Stamp Act, 1899 functioning of Indian Stock Markets and  In order to rationalize the collection and in continuation to several relief measures allocation mechanism for stamp duty for in view of COVID-19, the Government of securities market instruments and India extended the date of harmonize the rates across States, an implementation of amendments in the announcement was made in Union Indian Stamp Act, 1899 brought out Budget 2018-19 on this reform. through Finance Act, 2019 and Rules Accordingly, the relevant provisions of made thereunder from 1st April, 2020 to the Finance Act, 2019 amending the 1st July, 2020. Indian Stamp Act, 1899 and the Indian  Through the amendments in the Indian Stamp (Collection of Stamp-Duty through Stamp Act, 1899 and associated rules, Stock Exchanges, Clearing Corporations which came into effect from 1st July, and Depositories) Rules, 2019 were 2020, the Central Government has notified simultaneously on 10th created the legal and institutional December, 2019 and these were to come mechanism to enable states to collect into force from 9th January, 2020, which stamp duty on securities market was later extended to 1st April, 2020 vide instruments at one place by one agency 15Annual Report 2020-2021 (through the Stock Exchanges or Clearing Corporations Depository Services Limited to SEBI for bringing in notice authorised by the stock exchange or by to the respective organisations. the Depositories) on one Instrument. A IV. Commodity Derivatives : mechanism for appropriately sharing the COMMODITY DERIVATIVES MARKET stamp duty with relevant State Governments based on state of domicile 1. In October 2019, Ministry of Finance (Dept. of of the buying client has also been Economic Affairs) notified “option in included. It will facilitate ease of doing commodities” as a derivative under the business, bring in uniformity of the stamp Securities Contracts (Regulation) Act, 1956. With duty on securities across States and this enablement, the plain vanilla options, thereby build a pan-India securities structured directly on commodities would become market. tradable on exchange platforms. These  So far, implementation of the stamp duty commodity derivatives are much simpler and and its collection process has been hedger-centric than the “options on commodity working smoothly. In the four months futures” which are being traded at present and (July to November, 2020) alone, State can be used to avail price risk insurance in the Governments have collected nearly Rs. commodity derivatives market. 1029.9 crores. 2. A working group has been constituted by DEA 2. Interoperability among Clearing Corporations - under the Chairmanship of Joint Secretary Amendments to Securities Contracts (Regulation) Financial markets) on 23.12.2019 to encourage (Stock Exchanges and Clearing Corporations) the participation of government procurement Regulations, 2012 wherein SEBI has enabled agencies in the commodity derivative markets. interoperability among clearing corporations (CCPs) 3. In order to develop regulated warehousing which provides for linking of multiple CCPs. ecosystem for non - agriculture commodities in 3. Protected Systems/Critical Information India under the purview of Warehousing Infrastructure (CII): This Department has declared the Development and Regulatory Authority (WDRA), Bombay Stock Exchange Online Trading System a Working Group was constituted by DEA under (BOLTPlus) and its underlying computer resources of the the chairmanship of Whole Time Member (SEBI) Bombay Stock Exchange (BSE); the Clearing and which submitted its Report in October 2019 Settlement System (CLASS) and its underlying computer suggesting roadmap and relevant standards for resources of Indian Clearing Corporation Ltd. (ICCL); the warehousing of non-agri commodities, which are Trading System and its underlying computer resources being taken up for implementation. of the National Stock Exchange Ltd (NSEIL); and the 4. In pursuance of the request from DEA, the Clearing and Settlement System and its underlying Department of Consumer Affairs has issued an computer resources of the NSE Clearing Ltd. (NCL) to order on 16th December 2019, exempting stocks be Protected System under sub-section (1) of section 70 of commodities hedged on commodity of the Information Technology Act, 2000 (21 of 2000). exchanges from stock limits prescribed under This Department also issued Order dated 24th February, Essential Commodities Act, 1955. This would 2020 in pursuance of sub-section (2) of section 70 of the encourage hedgers to participate in the Information Technology Act, 2000 (21 of 2000), commodity exchanges. authorizing the persons mentioned in the Schedule of the Order dated 24th February 2020 to access the II. International Cooperation: protected system of the BSE, ICCL, NSEIL and NCL. Indias sovereign debt is rated by 6 major Sovereign Credit This Department has also sent list of identified CII and Rating Agencies (SCRAs). These are Fitch Ratings, authorized personnel having role-based access to the Moody’s Investors Service, Standard and Poor’s (S&P), CII for BSE, ICCL, NSEIL, NCL, MSEIL (Metropolitan Japanese Credit Rating Agency (JCRA) and Rating and Stock Exchange of India Limited), MCCIL (Metropolitan Investment Information Inc., Tokyo (R&I) and DBRS Clearing Corporation of India Limited), NSDL (National Morningrator. The latest sovereign ratings issued by these Securities Depository Limited) and CDSL Central agencies are given below: Rating Date of Foreign Currency Local Currency Agency affirmation of ratings Ratings Outlook Ratings Outlook Moody’s 13.07.2020 Baa3 Negative Baa3 Negative 16Department of Economic Affairs I Rating Date of Foreign Currency Local Currency Agency affirmation of ratings A-2 A-2 Fitch 18.06.2020 BBB- (LT)* Negative BBB- Negative F3 (ST)# F3(ST) S&P 25.09.2020 BBB- (LT) Stable BBB- (LT) Stable A-3 (ST) A-3 (ST) JCRA 29.10.2020 BBB+ Stable BBB+ Stable R&I March 19, 2020 BBB (LT) Stable No ratings were given A-2 (ST) DBRS 21.05.2020 BBB Negative BBB Negative R-2 (high) R-2 (high) *LT-Long Term, #ST-Short Term I. Regulatory Establishment Securities Appellate Tribunal: designated Tribunal to hear appeal cases against the Securities Appellate Tribunal (SAT) is established under orders passed by International Financial Services Centres Section 15K of the Securities and Exchange Board of Authority (IFSCA) for matters related to securities, India Act, 1992, to exercise the jurisdiction, powers and insurance, and pension under the Acts mentioned above. authority conferred on the Tribunal by or under the SEBI Act -1992, PFRDA Act -2013, Insurance Act -1938 and As on 30.11.2020, 662 appeals are pending before SAT any other law for the time being in force. It is also the and its duration wise breakup is as follows:- Month & Appeals filed Total Pendency Pendency Pendency Pendency Total Disposal Year under Act Pendency Less than (1 yr. – 2 (2 yr. – 3 more than of cases upto one year yrs.) yrs.) three years November 2020 SEBI 646 452 165 29 00 374 Nov-20 IRDA 13 00 11 01 01 03 PFRDA 03 00 00 03 00 00 17Annual Report 2020-2021 4. Financial Stability and Cyber Security 4.2.2 During the year 2020-21, FSDC-SC held two Division meetings, i.e., the 24th meeting held on June 18, 2020 and the 25th meeting held on August 31, 2020. In these 4.1. Financial Stability and Development Council meetings, the Sub-Committee reviewed the major developments in global and domestic economy and 4.1.1 The Financial Stability and Development Council financial markets that impinge on the financial stability. (FSDC) was set up by the Government of India as the The Sub-Committee also discussed about the proposal apex level forum in December 2010 with a view to of setting up of an Inter Regulatory Technical Group on strengthening and institutionalizing the mechanism for, Fintech (IRTG-Fintech); the National Strategy on Financial inter-alia, maintaining financial stability, enhancing inter- Education (NSFE) 2020-2025; the status and regulatory coordination and promoting financial sector developments under the Insolvency and Bankruptcy Code development. The Chairperson of the Council is the (IBC), 2016; the working of credit rating agencies; the Finance Minister of India, Members include Minister of initiatives and activities of National Centre for Financial State for Finance, the heads of the financial sector regulators and Secretaries of the relevant ministries/ Education (NCFE); the activities of various technical departments of the Government of India. groups under FSDC-SC and the functioning of State Level Coordination Committees (SLCCs) in various states/UTs. 4.1.2 The Council monitors macro-prudential The regulators reaffirmed their commitment to continue supervision of the economy and deliberates on contextual co-coordinating on various initiatives and measures to issues covering financial stability, financial sector strengthen the financial sector in these extraordinarily development, inter-regulatory coordination, financial challenging times. literacy, financial inclusion, co-ordinating India’s international interfaces with financial sector bodies like 4.3. Financial Stability Board (FSB) the Financial Action Task Force (FATF) and the Financial 4.3.1 FSB is an international body established in April, Stability Board (FSB). The Financial Stability and Cyber 2009 under the aegis of G20 by bringing together the Security (FS&CS) Division in the Department of national authorities, standard setting bodies and Economic Affairs provides secretarial assistance to the international financial institutions. FSB is responsible for FSDC. The Division-Head in charge of Financial Stability undertaking vulnerabilities assessment, policy & Cyber Security (FS&CS) Division, Ministry of Finance, development and coordination, implementation Department of Economic Affairs is the Secretary of the monitoring, and to act as a compendium of standards for Council. financial sector regulation and reforms in members’ 4.1.3 Till 30th November, 2020, FSDC held 22 jurisdictions. meetings. In 2020-21, the 22nd meeting were held on 28th May 2020. In this meeting, the Council reviewed 4.3.2 India, as a member of the FSB, remains the current global and domestic macro-economic committed to adoption of the priority and other areas of situation, financial stability and vulnerabilities issues, financial sector reforms and international standards in a major issues likely to be faced by banks and other phased manner, calibrated to local conditions wherever financial institutions as also regulatory and policy necessary. Department of Economic Affairs is the nodal responses, Liquidity / Solvency of NBFCs/HFCs/MFIs point for India to coordinate with the FSB and all India- and other related issues. Besides, market volatility, specific information are regularly provided in consultation domestic resource mobilisation and capital flows issues, with the financial sector Regulators (namely, RBI, SEBI, were also discussed by the Council. The Council also IRDAI and PFRDA) while responding to various FSB reviewed activities undertaken by the FSDC Sub- questionnaires, surveys and reports. India also Committee Chaired by the Governor, RBI, and the action participates in the peer reviews, meetings and conference taken by Members on the decisions taken in earlier calls of FSB and presents its views and comments as a Meetings of the Council. member. 4.2. FSDC Sub-Committee (FSDC-SC) 4.3.3 The Plenary is the sole decision-making body of the FSB, Standing Committee on Standards 4.2.1 The FSDC is supported by a Sub-Committee Implementation (SCSI) is responsible for monitoring the (FSDC-SC), chaired by the Governor RBI. Excluding the implementation of agreed FSB policy initiatives and Chair of the FSDC and the MoS (Finance), all members international standards, and the Standing Committee on of the FSDC are also the members of the Sub- Budget and Resources (SCBR) is responsible for Committee. Additionally, all four Deputy Governors (DG) assessments of the resource needs of the FSB of RBI, and Secretary (FSDC), are also the members of Secretariat taking into account the current mandate, the the Sub-Committee. Executive Director of RBI who is in- work programme and emerging demands. The Regional charge-of Financial Stability is the Member Secretary, and the Financial Stability Unit (FSU) of RBI is the Consultative Group on Asia (RCG Asia) is one of the 6 Secretariat for the Sub-Committee. The Sub-Committee regional groups established by FSB in 2011 to expand has met 25 times till 30th November, 2020. upon and formalise the FSB’s outreach activities beyond 18Department of Economic Affairs I the membership of the G20 and to reflect the global nature Financial Sector Assessment (FSA) report2 respectively of the financial system through interaction with the non- on December 21, 2017 on their respective websites, members. Secretary of the Department of Economic followed by a few Detailed Assessment Reports (DARs) Affairs represents India in the FSB Plenary, and in the and Technical Notes on selected topics. Department of two out of the four FSB standing Committees, namely, Economic Affairs has been following up with the the Standing Committee on Standards Implementation Ministries/ Departments/ Regulators concerned for (SCSI) and the Standing Committee on Budget and examination and suitable implementation of the Resources(SCBR). DG (RBI) represents as a member recommendations. from India in the other two Standing Committees of FSB, namely, Standing Committee on Assessment of 4.5. Macro Financial Monitoring Group (MFMG) Vulnerabilities (SCAV) and Standing Committee on Supervisory and Regulatory Cooperation (SRC). Besides, 4.5.1 The Macro Financial Monitoring Group has been Secretary (Economic Affairs) also represents India in the set up in 2012 under the Chairmanship of the Chief Regional Consultative Group on Asia (RCG Asia). Economic Adviser. The Group aims at keeping track of Chairman (SEBI), and DG (RBI) are the other two the macroeconomic and financial developments, members from India in the FSB Plenary as well as in the identifying vulnerabilities, and providing early warning RCG Asia. signals. The Group has held 23 meetings till date. . 4.3.4 During the year 2020-21, considering the travel 4.6. Financial Data Management Centre (FDMC) restrictions relating to Covid-19, virtual meetings of the 4.6.1 It has been decided to set up a Financial Data FSB Plenary were held on 26th June 2020 and 5th Management Centre (FDMC) to facilitate integrated data October 2020. SCSI virtual meetings were held on 5 May aggregation and analysis in the financial sector. During 2020, 2 June 2020, 8 July 2020, 6 October and 3 the year under review, progress has been made towards November. Besides, one virtual meeting of the Regional finalization of the draft Cabinet Note and the draft FDMC Consultative Group for Asia was held on 3 November Bill to set up FDMC as a statutory body, in consultation 2020. All these meetings were attended by with financial sector Regulators, Ministry of Law & Justice, representatives of DEA at suitable levels. Apart from and Departments concerned. these, as part of its programme to examine the effects of post-crisis financial reforms that were agreed by the G20, 4.7. Computer Security Incident Response Team- FSB launched an evaluation of “too-big-to-fail” (TBTF) Finance Sector (CSIRT-Fin) reforms for banks. DEA, as a member in this working 4.7.1 To ensure cyber security in Financial Sector and group also attended these virtual meetings. Continuous to fulfil the objective behind setting up of a Computer engagement was maintained through various virtual Emergency Response Team for the financial Sector meetings/ conference calls of Plenary, SCSI, TBTF etc. (CERT-Fin), an alternate arrangement has been done in and inputs on surveys and reports circulated by FSB were the form of Computer Security Incident Response Team- provided in consultation with the regulators. Finance Sector (CSIRT-Fin) which has been made operational from 15.5.2020 under the Indian Computer 4.4. Financial Sector Assessment Programme Emergency Response Team (CERT-In) within the Ministry (FSAP) of Electronics and Information Technology (MeitY). As 4.4.1 FSAP is a quinquennial exercise jointly agreed by Department of Economic Affairs (DEA), conducted by IMF and World Bank (WB) and involves a Ministry of Finance, Ministry of Electronics and comprehensive and in-depth analysis of a country’s Information Technology (MeitY) and all the financial financial sector to assess financial stability and financial regulators, the CERT-In is to provide the requisite sector development. India underwent its first FSAP leadership for the operations of CSIRT-Fin under its exercise in 2011-12 and the second FSAP in 2017. umbrella. In case any challenges arise in the smooth Department of Economic Affairs, in close coordination operations of CSIRT-Fin in future, MeitY may consider with financial sector Regulators and Ministries/ the amendment of Information Technology Act (IT Act) to Departments concerned, facilitates and coordinates all provide for statutory status to CSIRT-Fin so as to enable matters related to FSAP undertaken for India, including it to operate as a separate statutory organisation. following up on the recommendations of FSAP. 1 http://www.imf.org/en/Publications/CR/Issues/2017/12/ Subsequent to the FSAP exercise in 2017, the IMF and 21/India-Financial-System-Stability-Assessment- the WB published their reports, including the Financial PressRelease-and-Statement-by-the-Executive-45497 System Stability Assessment Report (FSSA)1 (along with 2 http://documents.worldbank.org/curated/en/ IMF Press Release, Supplement on Bank Recapitalization 704231513810603813/India-Financial-Sector- measures and Buff statement of India’s ED in IMF) and Assessment 19Annual Report 2020-2021 5. Financial Sector Reforms and principles for stronger consumer protection and greater Legislation Division transparency in the functioning of financial sector regulators. It features following set of changes, which 5.1 Introduction renders it implementable: 5.1.1 The Financial Sector Legislative Reforms i. The RBI will continue to exist, although with Commission (FSLRC), set up on 24th March, 2011 for re- modified functions; writing the financial sector laws to bring them in harmony with the current requirements, submitted its Report to the ii. The existing SEBI, FMC, IRDA, and PFRDA Government on 22nd March, 2013. The Report is in two will be merged into a new UFA; parts: Volume I titled “Analysis and Recommendations” iii. The existing SAT will be subsumed into the and Volume II titled “Draft Law” consisting of the draft FSAT; Indian Financial Code (IFC). The Commission, inter alia, iv. The existing DICGC will be subsumed into recommended a non-sectoral, principle-based legislative the Resolution Corporation; architecture for the financial sector, by restructuring existing regulatory agencies and creating new agencies, v. A new FRA will be created; wherever needed, for better governance and vi. A new PDMA will be created; and accountability. vii. The existing FSDC will become a full-fledged 1.2 A new Division, namely, FSLRC Cell was created statutory agency, with modified functions. in the year 2013 to process the implementation of the 4. Implementation Status of the FSLRC Report with the following mandate: recommendations of the FSLRC a. To firm up the views of the Government on 4.1 The status and next steps on the implementation the recommendations of the FSLRC of the recommendations of the FSLRC are as follows:- following due consultative process with all the concerned stakeholders, Regulators/ i. As has been agreed to in the meetings of the Ministries/State Governments/ Union FSDC, the financial sector regulatory agencies Territories and public at large; are implementing the governance enhancing, non-legislative recommendations of the FSLRC b. To implement the recommendations of the on voluntary basis. A MIS Portal was developed FSLRC, duly approved by the Government; and inaugurated by FM in May, 2015 to put in and place an appropriate mechanism to measure the c. To deal with administrative and benchmark compliance for each Regulator/ establishment matters relating to FSLRC. Board. The MIS Portal has been modified in 1.3 In September, 2017, it was decided to rename the consultation with the Regulators to remove FSLRC Division as Financial Sector Reforms and several difficulties faced by the Regulators in Legislation (FSRL) Division with (i) Legislative Reforms updating the compliance status on the Portal. The and (ii) Financial Sector Reforms Sub-Divisions. Regulators have started submitting their responses on the MIS Portal. 2. Financial Sector Legislative Reforms Commission- Main recommendations ii. A Financial Sector Regulatory Appointment Search Committee (FSRASC) has been created The Report of FSLRC was placed in the public domain for recommending names of suitable persons for on 28th March, 2013. The same was examined and appointment to board level positions of financial discussed in various meetings of the Financial Stability sector regulatory bodies with the approval of the and Development Council (FSDC) chaired by the Finance ACC on 24th November, 2015. The FSRASC has Minister. The recommendations of the FSLRC can broadly been reconstituted on 9th June, 2017. This would be divided into two parts - Legislative and Non-Legislative. bring about uniformity in the selection of board The legislative aspects of the recommendations relate members of financial sector regulators, which to revamping the legislative framework of the financial was one of the recommendations of the FSLRC sector regulatory architecture by a non-sectoral, principle- on the broad structure of such regulators. based approach and by restructuring existing regulatory agencies and creating new agencies wherever needed. iii. As regards the establishment of a unified financial agency for the organised trading, by way of an 3. Recommendations on the Financial incremental reform effort, the Forward Markets Regulatory Architecture Commission (FMC) has been merged with the The Commission has recommended a seven agency Securities and Exchange Board of India (SEBI) regulatory architecture namely, Reserve Bank of India, with effect from 28th September, 2015 to achieve Unified Financial Agency, Financial Sector Appellate the convergence of regulations of the securities Tribunal, Resolution Corporation, Financial Redress market and the commodity derivatives markets. Agency, Public Debt Management Agency and Financial FMC stands abolished and the Forward Stability and Development Council in the draft law- Indian Contracts (Regulation) Act, 1952 has been Financial Code to replace a number of existing laws. The repealed. However, there is no consensus on non-legislative aspects of the FSLRC recommendations merging the existing financial sector regulators are broadly of the nature of governance enhancing into a single Unified Financial Agency. 20Department of Economic Affairs I iv. The Task Forces for transforming the existing Systemically Important Financial Institutions and Securities Appellate Tribunal (SAT) into the protecting the consumers of financial institutions and Financial Sector Appellate Tribunal (FSAT) and public funds to the extent possible. The FRDI Bill was for establishing new agencies namely, Resolution withdrawn from the Parliament on 7th August, 2018 owing Corporation (RC), Public Debt Management to concerns raised by the stakeholders’ on certain Agency (PDMA) and Financial Data Management provisions of the FRDI Bill for comprehensive re- Centre (FDMC) were set up on 30th September, consideration and re-examination. 2014. These Task Forces submitted their reports Accordingly, work on consolidating all the laws relating during June 2015. Another Task Force for to resolution of financial sector entities in one law and creating a sector-neutral Financial Redress provide a specialised resolution mechanism to deal with Agency (FRA) that was set up on 5th June, 2015 bankruptcy situations in most of the financial sector as announced in the Budget Speech 2015-16 entities, such as, banks, insurance companies, FMIs and submitted its Report on 30th June, 2016. Its select financial sector entities is under examination. Report is under examination. v. Apart from inviting comments on the FSLRC c. Establishment of an independent Financial Data Report and the Draft IFC, the Department of Management Centre: Economic Affairs in collaboration with the Institute A centralised data centre named as Financial Data of Company Secretaries of India (ICSI) organised Management Centre (FDMC) is proposed to be set up a number of workshops and seminars on specific under the aegis of the Financial Stability and Development areas of the IFC for building consensus on the Council (FSDC) that will be used for analysis of financial Draft. Work on fine tuning the Draft IFC with stability and related issues. Subsequent to the FSLRC comments of stakeholders suitably incorporated recommendation on creation of a statutory Financial Data to make it legally flawless was initiated and the Management Centre (FDMC), Government constituted Draft IFC was revised in the light of the comments a Task Force on FDMC which, inter alia, recommended received and hosted on the website of the a non-statutory FDMC. FS&CS Division, DEA has been Ministry of Finance on 23rd July, 2015, inviting assigned the task to initiate necessary steps for the setting comments of stakeholders by 8th August 2015. up of FDMC. Moving the Indian Financial Code (IFC) recommended by the FSLRC in totality, after due d. Establishment of an independent Public Debt consideration, is likely to take time. Key aspects Management Agency: of the IFC being fast-tracked are as follows:- An independent Public Debt Management Agency a. Financial Sector Appellate Tribunal: (PDMA) is proposed to be set up for managing The Securities and Exchange Board of India Act, Government‘s debt and cash balance, etc. To this effect, 1992 was amended through the Finance Act 2017, for the Government set up a Public Debt Management Cell upgrading / enhancing the capacity of the Securities (PDMC) on 4th October, 2016, as an interim arrangement Appellate Tribunal (SAT) to hear appeals relating to the before setting up of an independent and statutory debt Insurance and Pension sectors also and for providing for management Agency namely, Public Debt Management multiple benches. This would facilitate in moving towards Agency (PDMA) of India, in due course. This interim a Financial Sector Appellate Tribunal, which was arrangement will allow separation of debt management recommended to be the Appellate Tribunal for the entire functions from RBI to PDMA in a gradual and seamless financial sector. Financial Market Division, Department manner, without causing market disruptions. Budget of Economic Affairs (DEA) has been assigned the task Division, DEA has been assigned the task to initiate to initiate necessary steps for the setting up of FSAT. necessary steps for the setting up of PDMA. b. Establishment of a comprehensive resolution e. Institutionalised and Statutory Monetary Policy framework for the financial sector: Framework: An announcement was made in the Budget Speech of 2016-17 to frame a comprehensive Code on Resolution (i). FSLRC has recommended establishment of a of Financial Firms and introduce it as a Bill in the statutory and an institutionalized framework to Parliament during 2016-17. The Financial Resolution and conduct monetary policy, including the creation Deposit Insurance Bill, 2017 (the Bill) was introduced in of a Monetary Policy Committee that would the Lok Sabha on 10th August 2017 and referred to a determine the policy interest rate. The Reserve Joint Committee of Parliament for making a Report to Bank of India Act, 1934 (RBI Act) has accordingly the Parliament. The Bill provided for establishment of a been amended by the Finance Act, 2016, to specialized Resolution Regime for financial sector provide for a statutory and an institutionalized entities. The enactment of the Bill would have empowered framework for a Monetary Policy Committee, for the Resolution authority to contribute to the stability and maintaining price stability, while keeping in mind resilience of the financial system by carrying out speedy the objective of growth. The Monetary Policy and efficient resolution of financial firms in distress, Committee is entrusted with the task of fixing the providing deposit insurance to consumers of certain benchmark policy rate (repo rate) required to categories of financial services, monitoring the contain inflation within the specified target level. 21Annual Report 2020-2021 A Committee-based approach for determining the (v). The Reserve Bank of India Monetary Policy Monetary Policy will add value and transparency Committee and Monetary Policy Process to monetary policy decisions. The meetings of Regulations were framed and notified on July 14, the Monetary Policy Committee shall be held at 2017 for ensuring full operationalisation of the least 4 times a year and it shall publish its MPC. The Regulations were subsequently laid decisions after each such meeting. in the Lok Sabha on August 4, 2017 and Rajya (ii). Provisions of the RBI Act relating to the chapter Sabha on August 8, 2017. on Monetary Policy have been brought into force 5. Other Legislative Reforms through a Notification in the Gazette of India Providing a Legal Framework for Bilateral Netting of Extraordinary on June 27, 2016. The Rules Qualified Financial Contracts governing the Procedure for Selection of An unambiguous legal framework for enforceability of Members of Monetary Policy Committee and close-out netting reduces credit exposure of banks and Terms and Conditions of their Appointment and other financial institutions from gross to net exposure, factors constituting failure to meet inflation target results in substantial capital saving on such exposure under the MPC Framework have also been and reduces the overall systemic risks contributing to the notified in the Gazette of India, Extraordinary on financial stability. That is why many international standard June 27, 2016. The Government, in consultation setting bodies have recommended that a legal basis for with the RBI, has notified the inflation target in close-out netting may be provided in law. the Gazette of India Extraordinary dated August In the absence of any legally unambiguous basis for 5, 2016, for the five years ending on the March finality of bilateral netting for certain entities, bilateral 31, 2021, as under: netting of mark-to-market values arising on account of Inflation Target : Four per cent. OTC derivatives is not permitted, forcing the banks to Upper tolerance level : Six per cent. provide capital on gross exposure basis for such Lower tolerance level : Two per cent. derivatives. Further, the emerging global consensus (in G20 and Bank for International Settlement) of imposing (iii) As per the provision of section 45ZB of the RBI higher margins for non-centrally cleared OTC derivatives Act, 1934, out of the six Members of Monetary (NCCDs) might lead India to also adopt the global norms Policy Committee, three Members will be from of risk mitigation and also to strengthen the resilience of the RBI and the other three Members of Monetary the financial system. The exchange of margin for NCCDs Policy Committee (MPC) will be appointed by the on gross basis would be very inefficient and would Central Government. Accordingly, the MPC was seriously disrupt the OTC derivatives market, which constituted and notified in the Gazette of India account for about 40% of the total derivatives market. Extraordinary dated September 29, 2016. MPC Thus, with a view to address the inadequacies in the was re-constituted and notified in the Gazette of present legal framework, the Government formulated a India Extraordinary dated October 5, 2020 as Bill, namely, ‘The Bilateral Netting of Qualified Financial follows: Contracts Bill’ to lay down the mechanism for close-out a. Governor of the Bank—Chairperson, ex netting of the financial contracts. The Cabinet approved officio; the proposal to introduce the Bill in Parliament in its b. Deputy Governor of the Bank, in charge of meeting held on March 20, 2020. The Bill was passed by Monetary Policy—Member, ex officio; the Parliament in September, 2020. The Bilateral Netting of Qualified Financial Contracts Act, 2020 was published c. One officer of the Bank to be nominated by in the Gazette of India Extraordinary on 28th September, the Central Board—Member, ex officio; 2020. The Act has been brought into force w.e.f. 1st d. Dr. Shashanka Bhide, Senior Advisor, October, 2020. Research Programmes, National Council of The netting law for bilateral financial contracts would Applied Economic Research (NCAER), — result in substantial capital saving for banks, which, in Member turn, would enable banks to provide price efficiency in e. Dr. Ashima Goyal, Professor, Indira Gandhi offering hedging instruments to business in India, catalyse Institute of Development Research (IGIDR), the corporate bond market (through developing the credit and Part Time Member, Prime Minister’s default swap market), promote ease of doing business Economic Advisory Council (PMEAC) — and provide equal cost advantage to Indian financial Member sector. The market participants also expect that a bilateral f. Dr. Jayanth R. Verma, Professor, Indian netting law would further develop the financial market in Institute of Management (IIM), Ahmedabad India. It will enable India to become one of the major — Member markets for the Over-The-Counter (OTC) Derivatives products and contribute significantly to strengthening the (iv). The Members of the Monetary Policy Committee financial stability of the country and would facilitate in referred to in sub-paragraphs (d) to (f) above further developing the financial market, especially the would hold office for a period of four years or financial derivatives market and corporate bond market. until further orders, whichever is earlier. 22Department of Economic Affairs I 6. Infrastructure Policy & Finance (IPF)  Matters relating to Special Purpose Vehicle (SPV) for Credit Enhancement of Infrastructure Division Projects. Infrastructure Policy & Finance (IPF) Division is headed  International engagement on infrastructure by Shri Baldeo Purushartha, Joint Secretary. The Division financing (other than PPPs). has the following Units:  Matters relating to issues of Municipal Bonds by Urban Local Bodies (ULBs) for PPP and Non- Infrastructure Finance (Infra-Fin), PPP Projects. Energy Sector Policies & Programmes (ESPP),  Model Tripartite Agreements (MTA) for sectors Infrastructure Policy & Programme (IPP) such as Road, Ports, Airports. and  Matters relating to New Credit Rating System for Infrastructure. Public Private Partnerships (PPP).  Matters related to National Infrastructure Pipeline Each Unit is headed by Adviser/Director and assisted by (NIP) Under Secretary/Deputy Director/Assistant Directors.  Matters relating to Infrastructure Working Group (IWG) of G-20. E-Governance initiatives of the Division: All the units of  Matters relating to BRICS Taskforce on PPP and IPF Division have migrated to e-office mode (e-files, Infrastructure leave, advances, etc).  Matters relating to meetings of Board of Directors 6.1 Infrastructure Finance (Infra-Fin) Unit of IIFCL as JS (IPF) is Government nominee on 6.1.1 Major Functions: its Board of Directors;  External charge- GCC Countries (United Arab Infrastructure Finance Unit deals with financing Emirates, Bahrain, Saudi Arabia, Oman, Qatar requirements of infrastructure including conceiving new and Kuwait, and Yemen), Turkey, Cyprus, initiatives related to infrastructure financing and promotion Lebanon, Jordan; of investment in infrastructure sectors. The Unit deals 6.1.2 Major Policy Initiatives/ Achievements: with: 6.1.2.1 National Infrastructure Pipeline (NIP)  Matters related to infrastructure financing, National Infrastructure Pipeline aims to improve project including development of new mechanisms/ preparation and attract investment into infrastructure. To instruments for promotion of investment in draw up the NIP, a High-Level Task Force was constituted infrastructure. under the chairmanship of the Secretary, Department of  Matters relating to Infrastructure Debt Funds Economic Affairs (DEA). The Final Report on National (IDFs), Real Estate Investment Trusts (REITs)/ Infrastructure Pipeline for FY 20-25 of the Task Force Infrastructure Investment Trust (InvITs), Tax Free was released by the Hon’ble Minister for Finance & Bonds, Municipal Bonds and other instruments Corporate Affairs, Smt. Nirmala Sitharaman on 29th April, meant for infrastructure financing and credit 2020. enhancement. ORGANISATIONAL CHART OF IPF DIVISION Joint Secretary (Infrastructure Policy & Finance) Shri Baldeo Purushartha Tel No : 23092154 IC : 5034 Director Director (IPP) Adviser (Energy) Deputy Secretary (Infra-Finance) (PPP) Shri Mukesh Kumar Shri Anand Kumar Ms. Archana Gupta Pal Dr. Molishree Mayaram Tel No : 23094172 Tel No : 23092912 Tel No : 23093363 Tel No : 23095028 IC : 5261 IC : 5088 IC : 5100 IC : 5028 23Annual Report 2020-2021 NIP has been made on a best effort basis by aggregating India will be assuming chairmanship of the BRICS the information provided by various stakeholders including countries in 2021. India will also be assuming line ministries, departments, state governments and chairmanship of the BRICS Task Force on Public Private private sector across infrastructure sub-sectors, as Partnership (PPP) and Infrastructure in 2021. identified in the Harmonised Master List of Infrastructure. All projects (Greenfield or Brownfield, under 6.1.2.4 Real Estate Investment Trusts (REITs)/ conceptualization or under implementation or under Infrastructure Investment Trust (InvITs) Development) of project cost greater than Rs. 100 crore REITs/ InvITs are trust-based structures that maximize per project were sought to be captured. returns through efficient tax pass-through and improved governance structures. Guidelines/Regulations for InvITs DEA works in close coordination with Invest India, line and REITs were notified by SEBI on 26 September, 2014. Ministries/Departments and State Governments to SEBI regulations permit InvITs/REITs to have a single monitor the progress of projects under the NIP. The NIP tier structure comprising the Trust and Special Purpose portal is being maintained and regularly updated by Invest Vehicle (SPV) or a two-tier structure comprising the Trust, India Grid (IIG) in consultation with the stakeholders. The Holdco (Holding Company) and SPV. As on date, eight same may be accessed at: https://indiainvestmentgrid. InvITs and three REITs have been successfully launched gov.in/national-infrastructure-pipeline and have collectively raised around Rs.80,000 crore. 6.1.2.5 Infrastructure Debt Funds (IDFs) 6.1.2.2 G20 Infrastructure Working Group (G20-IWG) IDFs were created essentially to act as vehicles for Infrastructure Working Group (IWG) is a working group refinancing existing debt of infrastructure companies, under the G20 Finance Track that drives G20’s thereby creating fresh headroom for banks to lend to fresh infrastructure agenda. The IWG aims to provide analysis infrastructure projects. IDFs were expected to channelize and advice to policymakers to address the impediments around the development of infrastructure as an asset long term funds from insurance and pension funds, class in order to facilitate investment flows from private sovereign wealth funds etc to supplement lending for and official sources into infrastructure. infrastructure projects by commercial banks which are increasingly being constrained by their asset-liability In 2020, under the Saudi Arabia’s Presidency, G20 IWG mismatch and exposure limits. prepared the Riyadh Infratech Agenda which was subsequently endorsed by the G20 Finance Ministers and IDFs are set up by sponsoring entities either as NBFCs Central Bank Governors (FMCBG) and G20 Leaders’. – which are regulated by the RBI and as Mutual Funds The Infratech Agenda promotes the use of technology in which are regulated by SEBI. As on date, four IDFs under infrastructure, with the aim of improving investment NBFC route and two unde MF route are in Operation. decisions over the lifecycle, enhancing value for money of infrastructure projects, and promoting quality infrastructure investments for the delivery of better social, 6.2. Energy Sector Policies & Programmes (ESPP) economic and environmental outcomes. India, through Unit its interventions at the IWG meetings, advocated for increasing access to technology for all end-users, bridging 6.2.1 The major functions of ESPP Unit, inter alia, the digital divide between economic classes and regions. include the following: India also emphasized the need to develop new and  All policy related issues pertaining to energy innovative financing models and instruments that will help sector, viz. Petroleum and Natural Gas, Coal, governments’ tap into the large pool of private capital Power, Atomic Energy and New & Renewable available with long-term institutional investors (such as Energy; sovereign wealth funds, pension funds etc) that are  Ministries/ Department: MoPNG, MNRE, Atomic amenable to infrastructure investment. Energy, Space, Coal, Power, Mines; Further, in line with the G20 Roadmap for Infrastructure  Examination of the investment proposals in as an Asset Class (endorsed by the G20 Leaders in 2018), energy sector requiring the approval of Cabinet/ the G20 also welcomed G20/OECD Report on the CCEA/ CoS/ PIB/ EFC for their viability and Collaboration with the Institutional Investors and Asset justification; Managers on Infrastructure Investment, which reflects  Matters relating to ONGC Videsh Ltd. (OVL) and investors’ view on issues and challenges affecting private International Solar Alliance (ISA); investment in infrastructure and presents policy options  Matters related to Committee on Allocation of to address them. Natural Resources (CANR);  Matters relating to OPEC Fund for International 6.1.2.3 BRICS Task Force on Public Private Development (OFID); Partnership (PPP) and Infrastructure: 24Department of Economic Affairs I  International Territorial Charge: Iran, Iraq, Israel; 6.2.2.4 CCEA in its meeting held on 20.5.2020 approved  States: Maharashtra, Gujarat. the proposal of M/o Coal regarding adoption of  Coordination matters related to IPF Division. methodology for auction of coal and lignite mines/ blocks for sale of coal/ lignite on revenue sharing basis and 6.2.2 Major Policy Initiatives/ Achievements: tenure of cooking coal linkage. The proposal mandated 6.2.2.1 ESPP Unit is the Secretariat of the Monitoring constitution of an Empowered Committee of Secretaries Committee (MC) set up to review the implementation (ECoS) to deliberate and decide/ recommend on the status of the recommendations of the Committee on certain matters pertaining to auction methodology and Allocation of Natural Resources (CANR). Monitoring associated matters, issues in operationalisation of blocks Committee is chaired by Cabinet Secretary. Out of 81 allocated for sale of coal, etc. Accordingly, M/o Coal vide recommendations of CANR, 66 recommendations as they its OM dated 28.05.2020 constituted ECoS of which are and three recommendations with reformulations were Secretary (EA) is a member. Two meetings of ECOS have accepted for implementation by respective Ministries/ been held till now. Departments. One recommendation was not accepted. 6.2.2.5 Eighteen Cabinet/ CCEA/ ECS Note/ other proposals from the line Ministries/ Departments have 6.2.2.2 Action on Remaining 11 recommendations was been examined during the year. In addition, three PIB decided by the Department in consultation with concerned proposals and five EFC proposals have been examined Ministries/ Department. For implementation of during the year. recommendations pertaining to Land, following two committees under the Chairmanship of Secretary, 6.3. Infrastructure Policy & Programme (IPP) Unit Economic Affairs were constituted – 6.3.1 Major Functions: i. Working Committee to create a centralized Analyzing investment proposals concerning Road databank of inventory of all Govt. land Transport & Highways, Ports, Shipping, Inland Water including that belonging to Government Transport, Railways, Telecommunications, Civil Aviation controlled Statutory Authorities and & Urban Development sectors CPSUs: The Government Land Matters relating to Projects (non-PPP) of Ministry of Road Information System (GLIS) has been Transport and Highways. created by Ministry of Electronics and Servicing Steering Committee, Inter-Ministerial Information Technology (MeiTy) and Committees, High Level Committees, Group of Ministry of Housing and Urban Affairs Secretaries, Institutional Mechanism on the Harmonized (MoHUA). In the meeting chaired by Master List of Infrastructure Sub-sectors. Secretary, DEA on 22.03.2018 to review Matters related to Evaluation Committee for finalization the status of uploading of land data on web of PIM/EOI in respect of strategic disinvestment of CPSEs portal, it was decided that as uploading of to Division holding the Sectoral Charge of relevant land data on the web portal is an ongoing Ministry. exercise therefore, with this functional and Providing comments on DCNs received from MI Division populated portal the mandate of working Institutions: DMICDC/NICDIT, NHAI, IRFC, Digital group has been achieved. A brief note on Communications Commission. the work done by the Committee was sent External Territorial Charge: Nil to Cabinet Secretary on 24.04.2018. Ministries/Departments: Ministry of Road Transport and Highways, Shipping (including Ports & Inland Water ii. Committee for suggesting Broad Transport), Civil Aviation, Railways, Ministry of Housing Guidelines on the issues relating to and Urban Affairs, Telecommunications, Posts. Procedures for Exchange, Transfer, States: Madhya Pradesh, Chhattisgarh Leasing, Licensing and Sale of land held by Govt. and Govt. Controlled Statutory 6.3.2 Major Policy Initiatives/ Achievement: Authorities and CPSUs. The Report of the 6.3.2.1 “Affordable Rental Housing Complex” is included Committee has been sent to the Cabinet in the Harmonized Master List (HML) of Infrastructure Secretary for consideration. Sub-sectors. The inclusion of any sector in the HML enables it to avail infrastructure lending at easier terms 6.2.2.3 CAPEX Review Meetings to monitor performance with enhanced limits, access to larger amounts of funds of CPSEs with annual target Rs. 500 crore or more were as External Commercial Borrowings (ECB), access to held under the chairmanship of Hon’ble Finance Minister longer tenor funds from insurance companies and in order to revive the economy. The primary focus is to pension funds and be eligible to borrow from India Review the progress of CAPEX targets and take steps Infrastructure Financing Company Limited (IIFCL) etc.” required for expediting CAPEX Works. Five such CAPEX Review Meetings in respect of 35 CPSEs under 13 6.3.2.2 Five DIB Memorandum, Seven PIB Ministries/Departments have been held so far. Memorandum, Seven EFC Memorandum, seventy three 25Annual Report 2020-2021 SFC Memorandum and twenty nine CCEA/Cabinet/GoM Partnership in Infrastructure (Viability Gap Funding Notes received from line Ministries/Departments have Scheme) been examined during the year. Infrastructure projects are often not commercially viable on account of their public good nature, having substantial 6.4. PUBLIC PRIVATE PARTNERSHIPS (PPP) sunk investment and low returns. However, they continue CELL to be economically essential. Accordingly, the Scheme for Financial Support to Public Private Partnership in 6.4.1 Major Functions: Infrastructure (Viability Gap Funding Scheme) was  Appraisal & approval of Central Sector PPP formulated to provide financial support in the form of Projects as per Cabinet approved guidelines and grants, one time or deferred, to infrastructure projects orders for delegation of powers; undertaken through PPPs with a view to make them  Scheme for financial support to PPPs in commercially viable. Infrastructure-Viability Gap Funding (VGF) Scheme; Union Cabinet in its meeting held on 11.11.2020 has  Scheme for India Infrastructure Project approved Continuation and Revamping of the Scheme Development Fund (IIPDF); for Financial Support to Public Private Partnerships  PPP Policy & Programmes; (PPPs) in Infrastructure Viability Gap Funding (VGF)  PPP Capacity Building programmes; Scheme till 2024-25 with total outlay of Rs. 8,100 crore.  Innovative interventions and PPP Pilot project Revamping of the proposed VGF Scheme will attract initiative; more PPP projects and facilitate the private investment  Mainstreaming PPPs including technical in the social sectors (Health, Education, Waste Water, assistance and programmes from bilateral/ Solid Waste Management, Water Supply etc.). Creation multilateral agencies and support to State and of new hospitals, schools will create many opportunities local governments; to boost employment generation. The revamped Scheme  International interface on PPPs and other matters is mainly related to introduction of following two sub- concerning PPPs; schemes for mainstreaming private participation in social  Matters relating to management of PPP related infrastructure: information. a) Sub scheme -1 to cater to Social Sectors such 6.4.2 Government of India has systematically rolled out as Waste Water Treatment, Water Supply, Solid the Public Private Partnerships (PPP) program to bridge Waste Management, Health & Education sectors the infrastructure gap, and create an enabling etc. The projects eligible under this category environment for private sector investment in infrastructure should have at least 100% Operational Cost through PPPs for the delivery of high-priority public recovery. The Central Government will provide infrastructure and services. The PPP Cell acts as the maximum of 30% of Total Project Cost (TPC) of Secretariat for Public Private Partnership Appraisal the project as VGF and State Government/ Committee and Empowered Institution (EI)/ Empowered Sponsoring Central Ministry/Statutory Entity may Committee (EC) for the projects posed for financial provide additional support up to 30% of TPC. support through DEA’s Scheme for Financial Support to PPPs in Infrastructure (Viability Gap Funding (VGF)). b) Sub scheme -2 to support demonstration/pilot social sectors projects. The projects may be from 6.4.3 Major Policy Initiatives/Achievements: Health & Education sectors where there is at least 6.4.3.1 Public Private Partnership Appraisal 50% Operational Cost recovery. In such projects, Committee the Central Government and State Governments The Public Private Partnership Appraisal Committee together will provide up to 80% of capital (PPPAC) was setup to streamline the procedure for expenditure and up to 50% of Operation & approval of PPP projects, ensure speedy appraisal of Maintenance (O&M) costs for the first five years. projects, eliminate delays, adopt international best The Central Government will provide a maximum practices and have uniformity in appraisal mechanisms of 40% of the TPC of the Project. In addition, it and guidelines. The PPPAC is chaired by Secretary, may provide a maximum of 25% of Operational Economic Affairs with Secretaries of Department of Costs of the project in first five years of Expenditure, Department of Legal Affairs, NITI Aayog and commercial operations. the Sponsoring Ministry/Department as members to consider and approve the proposals of Central Sector 6.4.3.3 India Infrastructure Project Development PPP Projects. During the period from April 2020 till Fund (IIPDF) date, 8 projects with total project cost (TPC) of Rs. While quality advisory services are fundamental to 67,723.39 crore have been recommended by PPPAC. developing well-structured, value-for-money PPPs, the costs of procuring PPPs, and particularly the costs of 6.4.3.2 Financial Support to Public Private transaction advisors, are significant. Development of 26Department of Economic Affairs I robust projects with a sound financial structure and 6.4.3.7 Contingent Liability Management Tool optimal risk allocation is critical for evincing a market response in respect of the projects. The scheme for ‘India An Application Tool has been developed for estimation Infrastructure Project Development Fund’ (IIPDF) had and management of contingent liabilities arising from been launched to finance the cost incurred towards PPPs sponsored by Line Ministries, Departments and development of PPP projects. The IIPDF supports up to State-owned Enterprises of the Central and State 75 % of the project development expenses. Governments. The Tool is a browser-based application designed to estimate contingent liabilities of PPP projects 6.4.3.4 PPP Structuring Toolkits at different stages of their implementation using an inbuilt PPP Toolkits have been designed to assist PPP contingent liability framework that is aligned to various practitioners to strengthen decision-making at all key provisions relating to termination risks and termination stages of the PPP project cycle and also improve the payments provided in the concession agreements. This quality of the PPPs that are being developed. It is a web- Toolkit is easily accessible through DEA’s PPP Cell based on-line Toolkit that facilitates identification, website, i.e. www.pppinindia.gov.in. assessment, development, procurement and monitoring of PPP projects. The Toolkit is structured to cover the full 6.4.3.8 Guidance on use of Municipal Bond life cycle of PPP projects. While the general structure Financing for Infrastructure projects: PPP Cell, DEA has incorporated international best practices, the Toolkit has prepared a Guidance Manual which serves as a has been built on specific approaches for project handy reference to practitioners and policy makers on procurement, approval etc. currently in place in India to the use of Municipal Bond Financing for Infrastructure ensure that it forms a relevant resource for practitioners projects and is available at DEA’s PPP Cell website in India. The on-line nature of the Toolkit ensures updating (www.pppinindia.gov.in). The initiative has been taken to of resource quickly over time as the approaches in place build capacities of Urban Local Bodies (ULBs) to raise develop and change. The toolkit covers four sectors, viz. financing through the Capital Market for financing highways, ports, solid waste management and urban transport. The toolkit is available to practitioners through infrastructure projects. The Guidance Manual provides DEA PPP Cell’s website, www.pppinindia.gov.in. actionable step-wise inputs on preparatory actions, the regulatory framework and process of bond issuance. 6.4.3.5 PPP Practitioners Guide A comprehensive guidance for PPP practitioners titled 7. Investment and Digital Economy “PPP Guide for Practitioners” has been developed to Division provide step-by-step guidance on various processes in the PPP project life cycle including the pre-award phase. 7.1. INVESTMENT DIVISION : Investment Division It highlights best practices that could be adopted by comprises of four different sections. The major functions practitioners, to ensure transparency, fairness and of the Investment Division are as under: accountability in the development and implementation of PPPs. The Guide, available on DEA’s PPP Cell website, 1. To provide policy support on Foreign/Domestic i.e. pppinindia.gov.in, is divided into 17 modules which Investment policies including new policy discusses stages and concepts in the PPP project initiatives in Foreign Direct Investment (FDI)/ development process. The Guide is interspersed with Domestic Investment (DI) Policy besides FDI/DI examples, key takeaways, web links and case studies. policy clarifications & related matters 6.4.3.6 Post-Award Contract Management 2. Matter related to Gold including Gold Guidelines Monetisation Scheme, Indian Gold Coins Guidelines, Manuals and Online Toolkits have been Scheme, International bullion Exchange etc. developed to guide Project Authorities during the Post- Award implementation phase of the PPP project. The 3. To coordinate with M/o Steel, MSME, M/o Guidelines / Manual have been designed to deal with the Textiles, Department of Chemical and Petro changing contexts over the concession period, Chemicals, DIPAM, DIPP, DFS, RBI and SEBI, uncertainties and effectively handle disputes which are Department of Commerce and Department of critical for the overall success of the PPP projects. While Heavy Industry on investment issues and also the Guidelines provide key principles of Contract offering them comments / suggestions on various Management during the Post-Award phase, these have been further adapted to sector specific Manuals based matters as per need of the Indian economy. on the contractual obligations enshrined in the 4. To negotiate and conclude Bilateral Investment Concession Agreements. These are further supported Treaties (BITs) and Investment Chapter of FTAs/ by an interactive web-based toolkit, easily accessible CECA/CEPA with other countries and regional through DEA’s PPP Cell website, i.e. www.pppinindia.gov.in, and have been designed to blocks on the basis of the revised Model Bilateral provide practical application-oriented assistance to Investment Treaty (BIT) Text which was approved Project Authorities in undertaking project management. by the Cabinet on 16th December, 2015. 27Annual Report 2020-2021 5. Matter related to equity investments from both a. Amendments to curb opportunistic domestic and international sources for takeovers/acquisitions of Indian companies due to infrastructure development in commercially the current COVID-19 pandemic: viable projects, both greenfield and brownfield, including stalled projects through NIIF. GoI vide Press Note 3 (i) (2020) after Press Note 3 in para named as (a) has reviewed the extant FDI policy 6. Matters pertaining to the Evaluation Committee for curbing opportunistic takeovers/acquisitions of Indian meeting, IMG, ECGC, EXIM BANK, NEIA etc. companies due to the current COVID-19 pandemic and 7.2 Section-wise Allocation of Work notified that an entity situated in a country which shares A) FDI AND ODI (FOREIGN DIRECT land border with India, or where the beneficial owner of INVESTMENT & OVERSEAS DIRECT INVESTMENT) an investment into India is situated in or is a citizen of any such country can invest in Indian entities only under The main function of this section is to provide policy the Government approval route. Further, any transfer of support on Foreign Investment policies including new ownership of any existing or future FDI in an entity in policy initiatives in Foreign Direct Investment (FDI) Policy India, directly or indirectly, resulting in the beneficial besides FDI policy clarifications & related matters. This ownership falling within the purview of the above Section primarily co-ordinates with DPIIT, DFS, RBI and restrictions, would also require the Government approval. SEBI on foreign investment issues and also offers them comments / suggestions on any amendment in FDI policy b. FDI in Insurance Sector as per the need of the Indian economy. It also suggests measures for improving investment environment in India GoI vide Press Note 1 (2020) amended the FDI policy to with respect to FDI policy. allow 100% FDI for insurance intermediaries, which includes insurance brokers, re-insurance brokers, To promote Foreign Direct Investment (FDI), the insurance consultants, corporate agents, third party Government has put in place an investor-friendly policy administrators, surveyors and loss assessors and such which is transparent, predictable and easily comprehensible. Except for a small negative list, most other entities. However, FDI for insurance company is sectors have been made open for 100% FDI under the still capped at 49%. Automatic route. FDI under the automatic route does not c. FDI in Civil Aviation Sector require prior approval either by the Government of India or the Reserve Bank of India (RBI). Investors are only The GoI vide Press Note 2 (ii) (2020) has made changes required to notify and file documents with the concerned in FDI in Civil Aviation Sector according to which NRIs Regional Offices of RBI. Under the Government approval 100% FDI is permitted under automatic route in route, applications for FDI proposals are considered and Scheduled Air Transport Service/Domestic Scheduled approved by the respective subject matter Ministries on Passenger Airline subject to the condition that (i) Foreign the Foreign Investment Facilitation Portal (FIFP), the new Investment(s) in M/s Air India Ltd., including that of foreign online single point interface of the Government of India airline(s) shall not exceed 49% either directly or indirectly for investors to facilitate Foreign Direct Investment. except in case of those NRIs who are Indian Nationals, DEA is entrusted with the power to approve FDI where foreign investment(s) is permitted upto 100% under proposals (as per the extant FDI Policy, 2020) for: automatic route, (ii) Substantial Ownership & Effective Control shall be vested in Indian Nationals as per aircraft (a) “Financial services which are not regulated by rules, 1937. any Financial Sector Regulator or where only part of the financial services activity is regulated or Therefore, although 100% FDI is permitted under where there is doubt regarding the regulatory automatic route for NRIs in Scheduled Air Transport oversight”; and Service/Domestic Scheduled Passenger Airline, it is restricted to be only 49% in case of M/s Air India. (b) Applications for foreign investment into a Core Investment Company or an Indian company d. FDI in Defence Sector engaged only in the activity of investing in the GoI vide Press Note 4 (2020), has increased FDI limit in capital of other Indian Company/ies. defence sector through automatic route from 49% to 74%. Government of India has reviewed the extant FDI policy However, FDI in defence sector shall be subject to on various sectors and has made following amendments scrutiny on the ground of National Security and (in the year 2020) in the extant Consolidated FDI Policy Government reserves the right to review any foreign 2020 (FDI Policy), effective from October, 2020 and as investment in the Defence Sector that affects or may amended from time to time: affect national security. 28Department of Economic Affairs I Consequently, FDI inflows have increased manifold in the past five years as shown in data: S. Financial Year FOREIGN DIRECT INVESTMENT INFLOWS No. (April-March) (Amount in US$ Billion) Equity Inflows Reinvested Other Total FDI FIPB unincorporated Earnings capital bodies 1 2015-16 40.01 1.11 10.41 4.03 55.56 2 2016-17 43.48 1.23 12.34 3.17 60.22 3 2017-18 44.86 0.66 12.54 2.91 60.97 4 2018-19 (P) 44.37 0.69 13.67 3.27 62.00 5 2019-20 (P) 49.98 1.76 14.18 8.48 74.39 6 2020-21 (P) 30.00 0.79 7.42 1.73 39.93 (Upto September, 2020) Cumulative FDI 502.88 17.99 161.71 39.19 721.78 inflows in India since 2000 (upto September, 2020) B) INTERNATIONAL INVESTMENT TREATIES AND light of relevant international precedents and practices, FRAMEWORK (IITF) while maintaining a balance between investor’s rights and Government obligations. The new Indian Model BIT text The main function of IITF Section is to negotiate and is the base text for replacing the existing BIPA with and conclude Bilateral Investment Treaties (BITs) with other for having new agreements. countries on the basis of the revised Model Bilateral Achievements Investment Treaty (BIT) Text which was approved by the 2. Based on India’s Model BIT 2015, India has Cabinet on 16th December, 2015. The new BIT text aims to provide appropriate protection to foreign investors in signed the following Treaties/Agreement with other India and Indian investors in the foreign country, in the countries/Jurisdictions: S.No. Country and Name of Agreement Date of Agreement Date of Present Enforcement Status 1. Belarus: Bilateral Investment Treaty 24th September, 5th March, 2020 Active 2018 2. Brazil: Investment Cooperation & Facilitation 25th January, 2020 To be ratified Treaty 3. Kyrgyz Republic: Bilateral Investment Treaty 14th June, 2019 To be ratified 4. Taiwan: Bilateral Investment Agreement 18th December, 2018 14th February, Active between between India Taipei Association 2019 (ITA) in Taipei and Taipei Economic and Cultural Center (TECC) in India 3 . India is currently discussing and negotiating promotion of Gold as a Financial Asset Class, setting up Bilateral Investment Treaties at various stages with Iran, of International Bullion Exchange at IFSC-GIFT, Morocco, UAE, Switzerland, Oman, Israel, Cambodia, Negotiation of Investment Chapter under Comprehensive Qatar, Tajikistan, Russia, USA, Saudi Arabia, Ukraine, Economic Cooperation Agreements (CECA)/ Mexico, Hong Kong, Mauritius, San Marino, Argentina, Comprehensive Economic Partnership Agreements Armenia, Azerbaijan, Ethiopia, Bolivia, Cote d’Ivoire, (CEPA)/ Free Trade Agreements (FTAs)/ Preferential Kuwait, Uzbekistan, Philippines, Zimbabwe, Egypt, Trade Agreement (PTAs), and other multilateral Thailand Australia, Zambia and Turkmenistan agreements like APTA, BIMSTEC etc. negotiated under the aegis of Ministry of Commerce & Industry with various C) FOREIGN TRADE & SERVICES (FT) SECTION countries and regional blocs, matters relating to EXIM The main function of Foreign Trade (FT) section of Bank, ECGC and NEIA, providing advice on references investment division is dealing with the Policy matters received from Ministry of Commerce and Heavy related to Gold including Gold Monetisation Scheme Industries, Coordination within Investment Division and (GMS) & and Indian Gold Coin (IGC), drafting Policy for CABMC Cell. 29Annual Report 2020-2021 1. International Bullion Exchange (IBE) at IFSC- recommendation of the Steering Committee GIFT: would be submitted to the Government for the required regulatory changes. In pursuance of Budget Announcement made in the Budget Speech (2020), the International Bullion Exchange 2. Gold Monetization Scheme: With a view to mobilize (IBE) is being set up in GIFT IFSC as an additional the idle gold held by households and institutions in the platform to trade in bullion for the global participants. It country; and put this gold to productive use, e.g., by envisages achieving transparency in the pricing of bullion making available gold for the gems and jewellery sector; and that India should become a price setter in the area and, over time to reduce the country’s dependence on of international bullion trade. IBE is expected to be the import of gold, Government launched the Gold operationalized by end of the current Financial Year. Monetisation Scheme on 5th November, 2015.  Government of India has notified the bullion spot The Gold Monetization Scheme comprise of the delivery contract and bullion depository receipt ‘Revamped Gold Deposit Scheme’ and the ‘Revamped (with bullion as underlying) as Financial Products Gold Metal Loan’ scheme, linked together. The minimum and related services as Financial Services under deposit at any one time shall be 30 grams of raw gold the International Financial Services Centres (bars, coins, jewellery excluding stones and other metals). Authority (IFSCA) Act, 2019. There is no maximum limit for deposit under the Scheme.  International Financial Services Centres Authority Depositors may avail two options for deposit: (Bullion Exchange) Regulations, 2020 have been  Short term bank deposit (1-3 years) and approved by the Authority  Medium and Long Term deposit (5-15 year)  A Steering Committee has been constituted to study the report of working group constituted to Schemes GMS is running successfully. Till December facilitate wider discussion on the modalities; 2020, approximately 23373 kilograms of gold have been structure, framework etc. of the IBE. The mobilised under GMS. The details are as under: Details of Gold Mobilized under GMS (5th Nov, 2015 to 31 Dec., 2020) Sl.No. Types of Deposit Deposited gold as on 31.12.2020 (in grams) 1 Cumulative Quantity of Gold (in grams) 23,372,736.534 a Short Term Gold Deposit 7074302.925 b Medium Term Gold Deposit 5786807.098 c Long Term Gold Deposit 10511626.511 2 Number of participating Banks 08 3 Number of depositors 3448 3. Indian gold Coin domestically manufactured (Make in India) standard gold coins/bars in different denominations which may The Indian Gold Coin (IGC) promotes both Gold eventually replace the imported coins. Till December, Monetization Scheme & Make in India. It is manufactured 2020, 792.365 Kgs of Indian Gold Coin has been sold out of domestic gold (received under GMS) and it is out as per summary placed below: IGC SALES Details (5th Nov 2015 to 31 Dec., 2020) Turnover Weight Qty. Sold Denomination-wise details ( in number) (In crores) Sold (In (in Nos.) Kgs) 5 GM 10 GM 20 GM Grand 264.918 792.365 87601 38073 38856 10672 Total 30Department of Economic Affairs I 4. Current Account Balance Monitoring Cell projects. NIIF has been registered as a Category II Alternate Investment Funds (AIF) under SEBI To monitor the impact of imports and exports having a Regulations. direct bearing on Current Account Balance, a Cell has National Investment and Infrastructure Fund Trustee Ltd. been constituted in the Foreign Trade Section of (“NIIF Trustee Ltd.”), which is a 100% Govt. company, is Department of Economic Affairs, Ministry of Finance. The the Trustee of NIIF and National Investment and Cell interacts with Industry chambers and concerned Infrastructure Fund Ltd. (“NIIF Ltd.”) is the Investment Departments/Ministries regularly and seek inputs on Manager, company, with GOI equity of 49% at present. foreign trade, sudden surges/fall of imports/exports, NTMs, etc. and offer its views to balance trade in our As on date, three funds i.e. National Investment and favour. It identifies any sudden upsurge or reduction in Infrastructure Fund or Master Fund, NIIF Fund of Funds- imports and exports in any tariff line of significance, I and National Investment and Infrastructure Fund-II (or including services, NTMs/standards pertaining to HS Strategic Opportunities Fund) have been established codes of the products being imported/exported, their under the NIIF platform and registered with SEBI as upgradation, inspections and applicability, which are Category II Alternative Investment Funds. A trusteeship causes for such surges/slides, etc., and trigger alerts. company NIIF Trustee limited (NIIFTL) monitors the functioning of the funds. NIIF Funds are managed on a 5. Investment Chapter Negotiations under CEPA/ day-to-day basis by NIIF Limited, a company registered CECA/FTAs- For the promotion of trade and investment under the Companies Act, 2013 and regulated by SEBI relations with potential partner countries, a number of CEPA/CECA/FTAs with Investment Chapter are being as a fund manager of the three SEBI-registered AIFs in negotiated by the Government in the Department of NIIF. Government of India has made a commitment of Commerce. The following investment Chapter of such INR ~20,000 crore across three funds established under Agreements is being negotiated by DEA in the FT Sub umbrella of NIIF. Division. 2. OTHER SIGNIFICANT DEVELOPMENTS a. Indian-Peru Trade Agreement: Till date 5 2.1 The first fund registered by SEBI is National Rounds of India Peru Trade Agreement Investment and Infrastructure Fund, or Master Fund, Negotiation have been held. Thereafter VC was which aims to focus on investing in companies and held on 27th February to discuss some aspects projects in core infrastructure sectors such as of Investment Chapter and on 14th October, 2020, transportation, energy, telecom, urban infra, etc. The an inter-sessional Meeting of Chief Negotiators Master Fund investors currently include Government of was held through VC. India, Abu Dhabi Investment Authority (ADIA), Ontario b. India-Korea CEPA Upgrade Negotiations-Till Teachers, Australian Super, CPPIB, Temasek, Axis Bank now 8 rounds of upgrade negotiations between Ltd, HDFC Asset Management Company Ltd, HDFC India and Korea on Investment issues have been Standard Life Insurance Company Ltd, Housing held. The last round was held during 15-16 June, Development Finance Company Ltd, ICICI Bank Ltd, and 2019. Kotak Mahindra Life Insurance Company Limited. Target size for Master Fund is INR 14,000 crore and it has raised c. India-APTA–Till now 5 Meetings of India APTA 14,449 crore as on November 30, 2019. Working group have been held. The 3rd, 4th and 5th Meetings were held in the year 2019. 2.2 Master Fund Investments d. Apart from the negotiations mentioned above, FT Ports and logistics platform: NIIF Master Fund created Section also deals with work/ negotiations related Hindustan Infralog Private Limited (HIPL), a joint venture to India Japan CEPA, India Singapore CECA, with DP World, a global ports operator. HIPL’s current India Malaysia CECA, India Sri Lanka Economic portfolio includes: a) controlling stake in Continental and Technical Cooperation Agreement (ETCA) Warehousing Corporation (CWC), leading multi-modal and BIMSTEC. logistics company along with a supply chain business; b) D) DOMESTIC INVESTMENT (DI) 60-year concession to develop and operate an 18 hectare A. National Investment and Infrastructure Fund (NIIF) free trade warehousing zone (FTWZ) in Mumbai at an estimated cost of ~INR 1,000cr; c) controlling stake in a 1. Background: cold chain business; d)76% stake in KRIBHCO The establishment of the NIIF was announced vide para Infrastructure Limited (KRIL), a logistics company 47 of the Budget Speech, on 28th February 2015 and operating PFTs-cum-ICDs in North India along with pan- approved by the Union Cabinet on 28.7.2015. It was India container train operations. envisaged that the NIIF would attract equity investments from both domestic and international sources for Renewables platform: NIIF Master Fund alongside Green infrastructure development in commercially viable Growth Equity Fund (GGEF) has acquired 51% stake projects, both greenfield and brownfield, including stalled (25.5% stake each) in Ayana India. Ayana is focused on 31Annual Report 2020-2021 developing and operating utility-scale renewable power 1,080 crore (~GBP 120 million) each into the Fund. It is projects in India. It was created by CDC-UK in March managed by EverSource Capital, an equal joint venture 2017 and CDC-UK continues to own 49% stake in Ayana between Everstone Group and Lightsource BP. post the transaction. Ayana currently has a portfolio of GGEF will invest in scalable green and sustainable 1.1GW of solar power projects which are in different businesses across the themes of renewable energy, stages of development, has acquired a portfolio of two energy efficiency, e-mobility and resource conservation. operating solar projects with a combined capacity of 40MW and has executed binding documentation to GGEF has set up 4 platforms and overall has committed acquire 300 MW of solar capacity. ~59% of the current fund size to the various platforms. Roads platform: NIIF Master Fund has created a wholly • Ayana India, a utility scale renewables platform: owned development company, Athaang Infrastructure, GGEF has committed INR 6,290 million to this and an initial team with experienced road sector platform, along with an equivalent amount of co- professionals from technical, operations & management, investment from the NIIF Master Fund. Ayana and investment diligence backgrounds have been India currently has a portfolio of 1.1GW of solar onboarded. Athaang Infrastructure will manage the road power projects which are in different stages of assets acquired by the Fund and play an important role development. Further, Ayana has entered into in diligence of acquisition assets. The Fund has acquired binding agreement to acquire another 300MW two roads assets - a strategic arterial 22 km six lane toll of operating solar generation capacity. road in the state of Karnataka, connecting Bengaluru city • Radiance Renewables, a commercial and and its airport and a 60 km four lane toll road in the state industrial distributed energy platform: GGEF of Telangana. committed INR 2,800 million to this platform. Energy Efficiency Platform: NIIF and Energy Efficiency Currently, Radiance has an operating capacity Services Limited (EESL) have created a new platform, of 33.5 MW. Intellismart Infrastructure,which will be engaged in • EverEnviro Resource Management, an funding, implementing and maintaining the smart meter integrated waste management platform: This infrastructure for various electricity distribution companies platform will look at opportunities in the across across India. NIIF owns 51% stake in Intellismart while EESL owns remaining 49% stake. Intellismart has Municipal Solid Waste (C&D, C&T and WtE), entered a project management and consulting (PMC) Industrial / Hazardous / E-waste and Effluent agreement with EESL and has gradually taken over a treatment. GGEF has committed INR 2,050 large share of the responsibility and overseeing the million to this platform. EverEnviro won a Swiss various work streams for the roll-out of smart meters that Challenge Bid for 100% acquisition of ILFS’s are being executed by EESL. The management has waste management company, IL&FS started participating and leading the business Environmental Infrastructure & Services Limited development discussions alongside EESL with various (IEISL). The transaction is expected to close in distribution companies to demonstrate the smart meter March 2021. value proposition and assisting them to start taking decisions on smart meter implementation.  GreenCell Mobility, a e-mobility platform: This platform will provide mobility as a service by Investment pipeline: NIIF Master Fund is actively owning and operating e-buses in various states. evaluating opportunities in the renewables, road, mid/ GGEF has committed INR 2,800 million to this downstream oil and gas and digital infrastructure sector. platform. GreenCell won the bid for 48 intercity 2.3 NIIF Fund of Funds-I: In March 2019, the Fund of e-buses in Rajasthan and have acquired stake Funds (‘FoF’) admitted Asian Infrastructure Investment in two e-buses concessions totalling 350 intracity Bank (AIIB) as the anchor investor with a US$100 million e-buses in Uttar Pradesh. commitment and a potential US$100 million prior to the GGEF continues to evaluate investment opportunities final closing of the FoF. Subsequently in March 2020, within the platforms and other sectors within their FoF admitted Asian Development Bank (ADB) with a investment mandate. US$100 million commitment. With these closing, the FoF capital commitment is now US$700 million (including 2.5 Affordable Housing Fund: FoF has made a GOI’s commitment of US$500 million). commitment to HDFC Capital Affordable Real Estate Fund-2 (HCARE-2). NIIF committed INR 669 crores to 2.4 Renewable Energy Fund: HCARE2 in October 2018, with the other investor, ADIA, The Green Growth Equity Fund (GGEF) is the first having an INR 3,300 crore commitment. This fund is investment of NIIF’s Fund of Funds-I. FoF and the UK managed by HDFC Capital Advisors. The target sectors Government through DFID (Department of International of this fund are urban Mid-income and affordable housing, Development), as Anchor investors have committed INR primarily in 5 key large cities. 32Department of Economic Affairs I 2.6 Mid Market Growth Equity: FoF’s third 2.9 Infrastructure Debt Financing Platform: commitment is to Multiples Private Equity Fund III (Fund SOF set up this Platform by first acquiring a controlling III), a mid-market growth equity fund. The fund is currently stake in NIIF IFL (erstwhile IDFC IFL), a NBFC-IDF in being raised and it is managed by Multiples Alternate March 2019. The acquisition of NIIF IFL acted as an Asset Management. NIIF has committed INR 878 Crore anchor for creating NIIF’s Infrastructure Debt Financing (~USD 125 million) at first close of Fund III, which has Platform. Subsequently, SOF incubated Aseem also seen participation from some of the leading multilaterals and pension funds. Infrastructure Finance Limited (AIFL), a NBFC-IFC in January 2020. These two companies together form the Multiples is one of the leading managers in the mid- NIIF Infrastructure Debt Financing Platform. This Platform market space in the country with previous track record of will straddle across the entire infrastructure debt financing successfully raising and deploying 2 funds and USD ~ 1 spectrum through these two separate but complimentary billion in a similar strategy, over the last decade. This vehicles. fund will enable provision of equity capital into the Indian mid-market segment allowing them to scale-up over a NIIF IFL has an outstanding loan book of INR 7,200 crores period of time. A large portion of the capital is expected and zero gross NPAs as on 30th September 2020. Post to be channeled into sectors that have strong returns the acquisition, NIIF has been actively involved in a potential as well as high direct and indirect development number of key initiatives to ensure a smooth transition of impact. the business from IDFC to NIIF and to support its continued growth. These include: The Fund has not drawn any capital to date.  Debt Funding: Leading discussions for arranging 2.7: SME Healthcare: NIIF FOF has committed INR debt funding from large Indian institutions (e.g. 125 crore to Somerset Indus Healthcare India Fund LIC, SBI) to facilitate debt funding raising for (“Somerset Fund II”), managed by Somerset Healthcare continued growth of the business; LIC and SBI Investment Advisors Private Limited (“Somerset”). have recently sanctioned debt funding of INR 500 Somerset Fund II is structured as a Category II Alternative crore each to IFL. Investment Fund and along with an offshore fund, is expected to have a corpus of USD 90-100 million by final close.  Governance: (i) Undertaken a detailed review of policies to strengthen the governance framework The said commitment will enable provision of equity including enhancing the quality of credit capital into SME healthcare companies that provide committee with addition of nominees on the credit affordable healthcare solutions to the masses, allowing committee with extensive underwriting them to scale-up over a period of time, while also having experience. (ii)Transition of relevant business the potential to create a large development impact. Some and support functions out of IDFC to enable IFL of the sub-sectors within healthcare which the Portfolio to operate as a stand-alone entity Fund is expected to invest into include healthcare delivery, diagnostics, medical equipment, pharma distribution, etc. As a NBFC-IFC, AIFL would be a classic project financier and lend across infrastructure assets in different phases With a portfolio of 10 companies across two funds, of implementation. In addition, post receiving the Somerset has a credible track record of creating long- registration as a NBFC-IFC, AIFL acquired the balance term value in partnership with entrepreneurs. Recognizing 30% stake in NIIF IFL from IDFC and became sponsor that capital is but one aspect of investment, Somerset of NIIF IFL in March 2020. Post incorporation, NIIF has actively engages with promoters and management teams been very closely involved the operationalisation of AIFL to explore various value-addition possibilities across including hiring of the team as well as setting up strong strategic, operational and financial aspects. governance and processes. Further, NIIF has also supported AIFL to get its long term rating and set up debt The fund has not drawn any capital to date. lines within its first year of operations. 2.8 NIIF Strategic Opportunities Fund or NIIF -II NIIF IFL and AIFL would complement each other and The third fund i.e NIIF-II has been established to invest capitalise on their advantages as well as synergies in largely in equity and equity-linked instruments. The terms of sector expertise and investment capabilities. This Strategic Opportunities Fund is aimed at investing in Platform will thus allow NIIF to play a meaningful role in growth and development stage investments in companies infrastructure debt financing which has a growing need and sectors that are strategically important to the Indian for long-term financing given India’s infrastructure economy and are likely to benefit from India’s growth ambitions. trajectory over the medium to long term. The sectors of Additionally, highlighting the focus on accelerating initial focus are financial services, food & agriculture, infrastructure development, on 12th November 2020, the healthcare, education among others. Hon’ble Finance Minister of India announced an infusion 33Annual Report 2020-2021 of approximately INR 6,000 crores of capital into NIIF’s creation of innovative lower risk investment structures Infrastructure Debt Financing Platform (NIIF IFL and AIFL) that could fit in with the investment strategy and risk as part of the Atmanirbhar Bharat Package 3.0. appetite of the DIIs. 2.10 Fund Raising: NIIF has also been working with certain State Master Fund: Governments and their agencies to ideate and provide suggestions on viable investment structures to attract The Master Fund has completed its Fifth and Final Close. private sector capital and participation in infrastructure. Fund of Funds: NIIF has entered into a framework arrangement with The Fund of Funds is in the process of completing its Infrastructure Development Corporation Karnataka Ltd. Third Close. This is expected to be completed in (iDeCK) in Karnataka and with the Kerala Infrastructure December 2020. Fund Management Ltd. (KIFML) in Kerala to support Strategic Opportunities Fund: preparation of high potential infrastructure opportunities. NIIF has also engaged other States including The Strategic Opportunities Fund is in discussions with Maharashtra, Uttar Pradesh and Madhya Pradesh to select international and domestic investors for a potential identify opportunities for collaboration and support in their investment in the Fund. One of the investors is in the process of completing due diligence and will be seeking infrastructure / economic development initiatives. internal approval for the investment. Two other investors In parallel, NIIF has been helping across sectors to have recently initiated diligence of the Fund. strengthen the investment environment for the Other initiatives: infrastructure sector in the country. For instance, NIIF had shared inputs on several major policy documents NIIF, in collaboration with the Ministry of Finance, and model contracts, (for instance, comments on Government of India, organized the Virtual Global Investor standard bidding documents for discom privatization, draft Roundtable 2020. The event witnessed participation from Electricity Amendment Act 2020,proposed model 20 of the world’s largest institutional investors. At the concession agreements for roads, PPP framework for Roundtable, the Hon’ble Prime Minister shared his vision of India and the Government’s commitment to continue medical education, ideas for monetization of DFC etc.). creating an investor-friendly ecosystem. The Roundtable NIIF has also been working with the National Heath provided investors with an opportunity to engage with the Authority on the policy framework for promoting PPP in Hon’ble Prime Minister, the Hon’ble Minister of Finance healthcare sector in India. NIIF participated as a member and Corporate Affairs and senior officials of the of expert committees constituted by the DEA to identify Government of India to discuss potential investment innovative sources of financing for the US$ 1.5 trillion opportunities and ongoing policy reforms. One on one National Infrastructure Pipeline. Recently, NIIF also meetings with the investors and Hon’ble Prime Minister supported the DEA in organizing the Virtual Global are being set up following this Roundtable. Investor Roundtable (VGIR) where some of the world’s 3.0 Strategy and Policy: largest sovereign funds and pension funds shared constructive feedback and ideas for attracting a higher NIIF closely worked with the NHAI, MoRTH and DEA to quantum of foreign direct investment into India. Hon’ble develop an off-balance sheet funding structure to attract Prime Minister and Hon’ble Finance Minister addressed commercial capital for development of the Delhi-Mumbai the VGIR besides several other senior officials of the Expressway. During this process we organized and Government and Indian business leaders. facilitated discussions with a wide set of stakeholders – including potential institutional equity investors, large B. Special Window for Affordable and Mid- national and international lenders, multilateral institutions income Housing (SWAMIH) and credit rating agencies – to improve and test the I. Background: workability of the proposed funding structure. The The Union Cabinet approved setting up a ‘Special envisaged funding arrangement has now been approved Window’ in the form of AIF to provide priority debt by the Board of NHAI, and the Authority is progressing financing for the completion of stressed / stalled housing on various aspects of implementation. projects on November 06, 2019. NIIF has been assisting the Government in channelizing long-term capital available with domestic institutional The Special Window for Affordable and Mid-income investors (DIIs) such as pension funds and insurance Housing (SWAMIH) Investment Fund I (“Fund”) has been companies into the infrastructure sector in India. Towards formed to complete construction of stressed, brownfield, this end, NIIF conducted a series of workshops to share RERA registered residential developments that are in the practical experiences and insights (both domestic and affordable housing / mid-income category, are net worth global) on infrastructure as an important Alternative Asset positive and require last mile funding to complete class for the DIIs. In parallel, NIIF has also been exploring construction. 34Department of Economic Affairs I The Sponsor of the Fund is the Secretary, Department of progress achieved by the Fund to the Honorable Finance Economic Affairs, Ministry of Finance, Government of Minister on July 23, 2020. India on behalf of the Government of India. The 2. CURRENT STATUS OF SWAMIH Investment Government of India has committed a fund infusion of Fund I up to INR 10,000 crores in the Special Window and further investments will be brought in through institutional and The Fund has made four drawdowns as of Dec 9, 2020 private investors. The Fund has a target corpus of INR and called for a total INR 709.3 crores and all investors 12,500 crores with a greenshoe option of INR 12,500 have completed their capital contribution as required. crores. The Fund achieved a first closing with 14 investors and a capital commitment of INR 10,037.5 crores on Investor Committed December 06, 2019. Amount (INR Cr) The Fund invests in RERA-registered housing projects where 90% of Floor space index (FSI) is dedicated for Government of India 5,000 Affordable/ Mid-Income Housing, RERA carpet area of State Bank of India 1,250 the units is less than 200 sqm and houses are priced below INR 2.0 crores in MMR, below INR 1.5 crores in Life Insurance 1,250 NCR, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Corporation Ahmedabad and below INR 1.0 crore in Rest of India. The projects also have to be net-worth positive and at Union Bank of India 500 least 30% of construction and development has to be completed. Indian Bank 400 The investment strategy of the Fund is as follows: Punjab National Bank 400  The Real estate market has bottomed out in 2017 and is now on an uptrend. Affordable and Mid- Canara Bank 400 income housing has continued to clock sales and has also received considerable support from the Bank of Baroda 400 government in terms of tax incentives Central Bank of India 400  This is an opportunity to invest to complete construction of stressed projects. Our market HDFC Limited 250 study has shown that INR 55,000 cr needed to complete construction of stressed net-worth Bank of India 100 positive projects. However, NBFC funding to the Bank of Maharashtra 100 sector has dried up and thus there is a substantial deal flow of stressed projects that will need the Punjab & Sind Bank 75 capital provided by the Fund  The Fund has the opportunity to provide priority SBICap Ventures 5 last-mile capital with seniority of charge on the Total 10,530 asset and cash flows and to be repaid completely before any other projects debts are serviced. Thus the Fund will be able to generate significant The Fund investment team has been scaled up to 36 returns for the reduced risk profile of it seniority members, making it one of the largest real estate private in the capital structure. equity teams in India. All the investment and divestment The Investment Manager of the Fund is SBICAP Ventures decisions of the Fund are taken by an Investment Ltd. (SVL), an asset management company that is a Committee comprising of the CIO and CEO of SVL, and wholly owned subsidiary of SBI Capital Markets Ltd. which upto 5 external members. As of December 9, 2020, the in turn is a wholly owned subsidiary of State Bank of India. Investment Committee (IC) has held 27 meetings and The Fund provides weekly updates on its progress to the the investment team has analysed several proposals that Department of Economic Affairs. Additionally, the meet the Fund’s criteria and the overall status of the deals Investment team presented a detailed update on the presented to the Investment Committee is as follows: Particulars (as on Dec 9, 2020) No. of Deal amount Project Total units deals (INR cr) cost (INR cr) Deals with Final IC approval 36 4,421 13,220 27,952 Deals with Preliminary IC approval 99 8,770 27,264 58,825 Total 135 13,191 40,484 86,777 Deals rejected 5 896 3,422 6,240 35Annual Report 2020-2021 Further, disbursements commence after deals that have years with no lump sum investment because of the past got the final IC approval also comply with the requirements history of diversion of funds in most of the investee stated in the condition precedents and after satisfactory companies. As on Dec 09, 2020, the Fund has disbursed completion of pending documentation. Even after that, INR 583.3 crores in 17 deals where the aggregate Fund disbursements will always be gradual as they are committed amount is in excess of INR 1,990 crores. This calibrated to progress of construction, will be disbursed has activated construction at these 17 work sites and in several tranches over the period of construction of 1-3 would assist in completing ~ 9,500 homes. 2.2 Actual Status of Commitments and Investments made by Fund (as on 09.12.2020) Sanctioned Disbursed Sr. Project Cost Deal Amount Amount Total Units No. (INR cr) (INR cr) (INR cr) 1 CCI Projects Pvt. Ltd. 180 113.3 1,215 710 Shree Naman Developers 2 165 40 417 423 Pvt Ltd Urban Land Management 3 77 31 423 600 Pvt. Ltd 4 Virgo Realtors Pvt Ltd 34 12 108 249 5 Macrotech Developers Ltd 306 70 824 1,165 6 SS Group Pvt Ltd 166.3 50 448 669 7 Bini Builders Pvt Ltd. 60 15 120 123 8 TDI Infracorp (India) Ltd 242 80 880 1,318 Ramprastha Promoters and 9 70 25 309 483 Developers Pvt. Ltd. 10 Subham Commercial Developers 23 9 62 113 11 A R Amboli Developers Pvt Ltd 52 16 103 227 12 Castles Vista Pvt Ltd 360 50 1,837 1,800 13 G R Realcon Pvt Ltd 89 30 241 353 14 Taruchaya Colonizers Pvt Ltd 55 15 140 376 Shree Vardhman Infrahome 15 31.3 6 259 575 Pvt Ltd 16 KRP Industries Ltd 38.8 11.0 93.5 244 17 Newa Technocity (I) Pvt Ltd 41.0 10 105 108 Total 1,990.4 583.3 7,584.5 9,536 Other Tier II cities include cities such as Karnal, Mohali, The Fund does not have a focus on just Tier 1 cities and Chandigarh, Panipat, Lucknow, Ahmedabad, Surat, does investments anywhere in India where RERA is Dehradun, Kota, Jaipur, Bhopal, Nashik, Nagpur, applicable. The geographical spread of the 135 deals that Hyderabad, Vizag, Coimbatore, Thrissur have received investment approval is as follows: 3. OTHER SIGNIFICANT DEVELOPMENTS City No of Deals  In view of the hardships faced particularly by Northern Capital Region 44 the real estate industry due to the COVID- Mumbai Metropolitan 41 19 pandemic, resultant slowdown and Region anticipated slow pace of recovery, the Investment Manager, after consultation with Pune 10 the Sponsors, reduced the rate of return by Bengaluru 11 the Fund on all its investments from erstwhile Chennai 5 15.0% IRR to 12.0% IRR. The reduction was Other Tier II cities 24 proposed in an environment when there have 36Department of Economic Affairs I been significant reduction in interest rates between Secretaries of Department of Economic Affairs due to repo rate cuts announced by RBI and and Department of Financial Services, SBICAPS representations from real estate industry Ventures Limited (SVL) and senior management of key bodies for a rate reduction to make projects public sector banks and financial institutions on July 6, viable. 2020 in order to streamline the process of referral of funding proposals by the banks / financial institutions to  Hon’ble Supreme Court (SC) directed the fund and also identify and address issues relating to project completion: The Hon’ble Supreme consummation of such proposals. The Lenders were Court passed an order dated September 1, directed to provide quick response to the fund and refer 2020 in respect of the proposed funding by deals more actively to the fund. The Fund shall provide the Fund into the Amrapali Group. The Court the lenders with project related information shared by the has provided a broad framework for the developers to assist the lenders in their internal analysis Fund’s investment funding into the Identified C. FinTech - Site(s) and has directed the Receiver and the Fund to formulate the precise modalities. Steering Committee on Fintech: In pursuance of the A snapshot of the order is presented below: Budget Announcement of 2018-19 regarding the need to promote FinTech ecosystem in India to help growth of  The Fund will be investing only to complete MSMEs, Department of Economic Affairs constituted a the construction at 6 identified sites steering committee under the chairmanship of Secretary  The Fund’s investment will be provided based Economic Affairs, to consider various issues relating to on ‘collection milestones’ as may be agreed development of FinTech space in India with a view to upon between SBICAPs, Receiver and make FinTech related regulations more flexible and NBCC generate enhanced entrepreneurship in an area where  The Fund will have security over sold, unsold India has distinctive comparative strengths vis-à-vis other receivables including FAR of the 6 sites emerging economies. The other Members of the  SBICAPs along with the Receiver assisted Committee were MSME, MeitY, DFS, CBEC, UIDAI, RBI, by Court appointed committee are to SEBI and Invest India. The Committee deliberated on formulate legal structure for the funding and how FinTech can be leveraged to enhance financial state the finer details of the method and inclusion of MSMEs. A sub group under this committee manner of investment by the Fund for the was also formed with a view to enable flow based lending, completion of 6 sites using the Goods and Services Tax Network (GSTN) data base for creating a repository of ‘trusted invoices’, to be The Hon’ble Court has approved the funding of INR 625 made available to lenders through an Open Application crores in the 6 Identified site(s). SWAMIH-I plans to revise Programming Interface (API) system. The committee the funding amount to INR 650 crores in the revised submitted its report to the Hon’ble Finance Minister Scheme to be submitted to the Hon’ble Court. The Court on 2nd September, 2019. The report was circulated to appointed Receiver is in the process of forming a Section the concerned Ministries/Departments for taking 8 company post which the documentation shall be necessary action on the recommendations made in completed to initiate the funding. the report. Further, an Inter Ministerial Steering The investment committee members of the Fund in the Committee (IMSC) has been set up in Department of 18th IC meeting held on July 29th 2020, were of the view Economic Affairs for implementation of that given the manner of implementation of this recommendations made in the report. investment, i.e., pursuant to a scheme approved by the The IMSC has met four times since and one stakeholder Supreme Court of India and in light of the terms of the consultation with AgriTechs has been conducted. DEA draft scheme, the approval of the investors in the Fund has also participated in several Fintech conferences should be sought for this investment. Accordingly, the organised by various organisations, prominent being the Investment manager has written a detailed note to the Global Fintech Fest held in July 2020. Investors seeking their approval. A peer learning session with State governments was also Review by Finance Minister/Department of Economic organised recently in December 2020 with UN-based Affairs: The investment manager of the fund Better Than Cash Alliance to share how Fintech is being provides weekly updates on the performance of the leveraged at both Central and State Governments. fund to the Finance Minister. A Meeting with Secretaries of Department of Economic Affairs (DEA) and Joint Working Groups on Fintech Department of Financial Services, Senior Management Team of the State Bank of India, SBI Capital Markets India has two Joint Working Groups (JWG) on Fintech, Limited and SBICAPS Ventures Limited (SVL) was also with Singapore and the UK. Two meetings have been chaired by the Finance Minister on July 23, 2020 to review held of the JWG with Singapore – first meeting on October the performance of the fund. A meeting was also held 26, 2018 and second meeting on February 26, 2019. And 37Annual Report 2020-2021 two meeting has been held of the JWG with UK on convening a forum before June inviting other countries February 11, 2019, and March 3, 2020. to explain what can be provided through this initiative while understanding their needs so that similar standards can The JWGs focus on regulatory collaboration, knowledge be built for them. The idea was well received by Singapore sharing, promote cross border remittances via real time as they suggested collaborating on this concept and payment systems and encouraging Fintechs ecosystem taking it globally. in both countries. A summary of the two JWGs is below - 1.6 Subsequently, Singapore shared the concepts of 1. Singapore BsB and API Exchange (APIX) platform. BsB is a platform-of-platforms (i.e. a meta-platform), utilising AI 1.1 The first meeting of the Joint Working Group and machine learning to match demand and supply of (JWG) on Fintech with Singapore was held on October products and services arising from various SME 26, 2018 through video conferencing. The purpose of the platforms, including from government platforms. It is a first meeting was to identify areas of collaboration B2B platform linking one platform to another while between the two countries. The areas discussed were allowing each platform to retain its sovereignty and related to – (i) SME digitization and finance, (ii) India providing SMEs opportunities to access overseas market. Stack, (iii) collaboration on building capacity, (iv) concerns It is still at the PoC stage and Singapore is keen to launch related to cyber-security, (v) and regulatory sandbox, it at the SFF 2019 with India as a key founding member. RegTech and SupTech. Three Indian platforms, GeM, GST and TReDS, have 1.2 On SME digitization and finance, Singapore already expressed its interest in joining the platform. presented on the concept of ‘Global Connect’ (now termed 1.7 APIX is a global online platform that enables as ‘Business sans Borders’ [BsB]) which was Financial Institutions (FIs) and FinTech firms to discover, subsequently announced at the Singapore Fintech connect, collaborate on experiments and deploy digital Festival 2018. India also shared experience on India solutions with the objective of driving financial inclusion Stack, which has enabled greater financial inclusion, and across ASEAN and beyond. It was launched by Hon’ble the initiative taken by NPCI for transferring money from Prime Minister of India at SFF 2018. It will allow smaller one account to another without using internet. Thereafter, banks who lack the capability of developing in-house Singapore proposed to collaborate on setting up a ‘Global technology to reach out to a wider market for Fintech Stack’ to export a digital platform based on India Stack to solutions to the problems they face. Singapore shared emerging countries. Both the concepts, BsB and Global they plan to conduct an India focused workshop in mid- Stack, were discussed in detail in the second JWG 2019. India also decided to have a sub-group involving meeting. association of banks to devise a way for them to be on this platform. 1.3 Singapore also briefly shared their approach on cyber-security, regulatory sandbox, RegTech and 1.8 Lastly, Singapore discussed their proposal of a SupTech to which Indian regulators raised queries Data Connectivity Agreement (DCA) for financial services regarding certain issues they face. between the two countries. As per their proposal, DCA would enable a tech startup in India provide services to a 1.4 India hosted Singapore for the second meeting financial services firm in Singapore without having to of the JWG at North Block on February 28, 2019. The relocate resources to Singapore. As India is still agenda for second meeting identified four areas of formulating its data protection bill and such cross-border collaboration – (i) Payment linkages, (ii) Global Stack, data flow is a sensitive issue, RBI and SEBI are not in (iii) SME initiatives, and (iv) Data corridor. On payments support of this proposal. However, it was decided to look linkages, India presented on the initiatives taken by NPCI at legal alternatives for specific use cases until a final towards global acceptance of RuPay cards and the law is put in place in India to facilitate collaboration with possible integration of cross-border payment flows (IMPS Singapore. - FAST). The possibility of integration between NETS and NPCI was suggested so that Indian tourists in Singapore 1.9 The third meeting of the Group was held on 18 and similarly Singapore tourists in India will be able to February, 2020 through Video Conferencing. The agenda make seamless payments. Facilitating collaboration to of the meeting was to discuss – (i) Payment Linkages, enable two-way flow of remittances in real time was also (ii) SME Initiatives, (iii) Global Stack, (iv) Investment discussed. Facilitation, and (v) Regulatory Collaboration. On Payment Linkages, it was noted that good progress has 1.5 India then shared the concept of ‘Asia+ Stack’, been made between NETS and NPCI with key milestones based on the concept of Global Stack discussed during between February and June 2020. India further proposed the first JWG meeting. It was proposed that the to link the two countries’ retail payment system (UPI and technology developed here for the India Stack can be FAST) with a wider objective of reducing the cost of shared with other countries and it was suggested remittances. 38Department of Economic Affairs I 1.10 Under SME initiatives, Singapore pointed the NPCI for acceptance of RuPay cards and UPI payments areas where it need the JWG to support the growth of in UK. As remittance flows from UK to India is one of the BsB, especially in connecting with eNAM and GeM and highest, India mentioned that a possible remittance flow other trade bodies in India. Singapore offered to share through UPI could also be explored with UK. flow diagrams in follow up to this item with the Group. In 2.4 The second meeting of the JWG was held on respect of APIX, an update on the developments was March 3, 2020 through Video Conferencing. The agenda shared with the Group by AFIN. To increase India’s of the meeting was to discuss (i) Remittance Corridor, participation on the platform, Singapore proposed (ii) Bilateral Fintech Investment, and (iii) Common Mobility partnering with Indian institutions such as NPCI, NITI Card. India proposed to explore potential real time Aayog and Startups. It was suggested that Singapore payment linkages between NPCI from India and UK share a compiled list of India-specific examples on APIX. counterpart to enable inward remittances. Invest India 1.11 Singapore had shared the Terms of Reference then shared its initiatives to facilitate investment into on Global Stack in November 2019 for comments from Indian Fintech firms as well ease the process of doing business for UK Fintech companies entering Indian India requesting to formally announce it in the Singapore market. This was supposed to be taken by at the Invest Fintech Festival 2019 held in November 2019. Since that India Road show with DIT in June. UK presented on did not happen, Singapore discussed how the Group can Oyster Card from which India was keen to learn more take this agenda forward. It was decided to draft a concept about while developing its own National Common Mobility paper by building on the document already shared by Card. Further discussion needs to be explore before the Singapore by constituting small teams from both next meeting. countries. Invest India proposed collaborative initiatives with the MAS in the Fintech ecosystem. Further, it was Virtual Global Investor Roundtable (VGIR) added that Invest India should engage with the APIX team in exploring such opportunities. On regulatory Department of Economic Affairs along with National collaboration, SEBI and IRDAI invited Singapore Fintech Investment and Infrastructure Fund organized a Virtual companies to actively participate in their regulatory Global Investor Roundtable (VGIR) on 5th November, sandbox. Singapore shared that MAS and RBI can be 2020. It was chaired by the Prime Minister and witnessed the first two central banks to work with BIS in its Innovation an exclusive dialogue between leading global institutional Hub in Singapore on Regtech / Suptech experimentation. investors, Indian business leaders and the highest decision makers from the Government of India and 2. United Kingdom Financial Market Regulators. Union Finance Minister, Union Minister of State for Finance, Governor, RBI and 2.1 The first meeting of the JWG with U.K. on Fintech other dignitaries were also present on the occasion. was held on February 11, 2019. The agenda for the meeting was to share the areas in which both countries Twenty of the world’s largest pension and sovereign have made progress and the experience so far. UK wealth funds with a total Assets Under Management of shared details about their initiative on open banking, and about US$6 trillion participated in the VGIR, 2020. These experiences on designing and setting up a regulatory included investors representing key regions including sandbox. They explained that their sandbox is not a the US, Europe, Canada, Korea, Japan, Middle East, regulatory free zone, instead Fintech firms work with the Australia, and Singapore. regulator to test their products at a small scale before VGIR 2020 focused on discussions around India’s rolling it out to the market. And the their first open banking economic and investment outlook, structural reforms and services went live in January 2018 which include services the government’s vision for the path to a USD 5 trillion like financial advice, enhanced credit assessment and economy. It provided an opportunity to leading global payments. investors and Indian business leaders to engage and 2.2 It may be noted that UK has standardized the deliberate with senior policymakers on how to further accelerate the growth of international investments in India. top layer of API which inherently restricts societal It also provided an occasion for all stakeholders to further innovations while India has standardized the bottom layer cement the strong partnerships that have been built and of API. India has already made significant progress in to foster engagement with international institutional ‘Open Banking’ including its initiative on Public Credit investors who are looking to increase their Indian Registry and Account Aggregator which can be attractive investments. The VGIR, 2020 was followed up with one- for other countries to adopt. on-one meeting of global investors with Hon’ble Prime 2.3 Further discussions were held on a proposal by Minister. 39Annual Report 2020-2021 8. FB & ADB Division 5 years from the date of adoption of the Resolutions to subscribe their allocated shares. 8.1 Introduction 8.4 World Bank India Portfolio 8.1.1 The FB & ADB Division is concerned with the 8.4.1 The World Bank portfolio as on November 12, policy matters of Multilateral Funding Institutions like 2020 comprises 97 projects with a commitment of USD World Bank Group, International Monetary Fund (IMF), 24.96 billion. The World Bank projects are spread across Asian Development Bank (ADB) and related Institutions. sectors like Health, Transport, Education, Energy, FB & ADB Division is also the nodal point for facilitating Disaster & Risk Management, Agriculture, Water, Urban, and monitoring Externally Aided Projects (Central & State Environment, Governance, Social Protection, Financial Projects all over India) which are being implemented inclusiveness, Poverty etc. Major World Bank assisted through Multilateral Development Banks and other related projects are COVID-19 Emergency Response and Health Trust Funds / Loans / Grants. An online web portal has Systems, Accelerating India's COVID-19 Social been developed by FB&ADB Division, with technical help Protection Response Program (PMGKY- Pradhan Mantri from NIC for facilitating the entire process of availing an Garib Kalyan Yojana), support for Micro, Small & Medium externally aided loan from Multilateral Development Enterprises , PMGSY(Pradhan Mantri Gram Sadak Banks (MDBs) and Bilateral Agencies by State Govt/UT/ Yojana) Rural Roads Project, National Rural Livelihoods Central Govt. Ministries/Departments/ Central Govt Project, Swachh Bharat Mission Support Operation, PSUs, to ensure paperless interaction between DEA and National Ganga River Basin Project etc. concerned stakeholders. The portal has led to greater transparency, better monitoring of project status and 8.5 Major activities pertaining to the World Bank faster and uniform sharing of information with all the in 2020-21 stakeholders. 8.5.1 World Bank's commitment for India : World 8.2 World Bank Group Bank has committed USD 5.11 billion worth of loans to India in the Financial Year (WBFY) 2019-2020 (July 01, 8.2.1 The World Bank is among the world's leading 2019 to June 30, 2020), which is one of the highest in development institution with a mission to fight poverty recent years. Further, the projected commitment by World and improve living standards for people in the developing Bank for WBFY 2020-2021 is about USD 2.79 billion. world by promoting sustainable development through loans, guarantees, risk management products and (non- 8.5.2 COVID-19 Assistance: The Government of India lending) analytic and advisory services. The World Bank has signed three loans worth USD 2.5 billion related to is one of the United Nations' specialized agencies. The COVID-19 crisis response: - 1) COVID 19 Emergency World Bank concentrates its efforts on achieving the Response and Health Systems Preparedness Project Sustainable Development Goals aimed at sustainable was signed on April 03, 2020 for USD 1.0 billion. Amount poverty reduction. disbursed so far under the project is USD 503 million. 2) Accelerating India's COVID19 Social Protection 8.2.2 India is member of the four institutions of the Response Program which was signed on May 15, 2020 World Bank Group viz., International Bank for for USD 750 million. This loan has been fully disbursed Reconstruction and Development (IBRD); International as on date. 3) Economic Stimulus Measures to support Development Association (IDA); International Finance MSMEs under Atmanirbhar Bharat which was signed on Corporation (IFC) and Multilateral Investment Guarantee July 06, 2020 of USD 750 million. This loan has also been Agency (MIGA). India has been accessing funds from fully disbursed as on date. the World Bank (mainly through IBRD) for various developmental projects and IFC for the private sector. 8.5.3 Loans Signed & Disbursement: Nine World Fund Bank & ADB Division, DEA is the focal point for Bank assisted projects were signed during April- India being represented in the WBG meetings for November 2020, amounting to USD 3.48 billion of international level deliberations to discuss policy issues assistance. The projects signed during year 2020 included pertaining to the World Bank Group and also to undertake India COVID-19 Emergency Response and Health projects with assistance from the World Bank (IBRD). Systems Preparedness Project, Accelerating India's COVID-19 Social Protection Response Program 8.3 India and World Bank Group (PMGKY), West Bengal Major Irrigation and Flood 8.3.1 In the Resolution of Capital Increase of the Management Project, Tamil Nadu Housing Sector International Bank for Reconstruction and Development Strengthening Program, Tamil Nadu Housing and Habitat (IBRD) (adopted on October 1, 2018) India was allocated Development Project, Micro, Small & Medium Enterprises additional 15,252 shares (through General Capital Emergency Response, Second National Ganga River Increase and Selective Capital Increase). India became Basin Project, Himachal Pradesh State Roads the 7th largest shareholder in IBRD with a vote share of Transformation Project and Meghalaya Integrated 3.01%. The Resolution provides that members will have Transport Project. Total Disbursement for the period April 40Department of Economic Affairs I to November 2020 was approximately USD 3.62 billion IDA Deputies and Borrower Representatives Meeting (IBRD approximately USD 2.78 billion). was held on October 26, 2020. The meeting was attended by AS (BC & FSDC) accompanied by Director 8.5.4 Monitoring of the World Bank Portfolio: (Fund Bank). Portfolio performance has improved over the years as a result of regular review meetings such as Tri-partite 8.7 International Finance Corporation (IFC) Review Meetings for ongoing projects and Pipeline 8.7.1 International Finance Corporation (IFC), a Review Meetings for pipeline projects. The meetings are member of the World Bank Group, focuses exclusively organized jointly by the Government of India and the on investing in the private sector in developing countries. World Bank and attended by officials from Department Established in 1956, IFC has 185 members. India is of Economic Affairs (DEA), World Bank and founding member of IFC. IFC is an important Implementing Agencies of World Bank assisted projects. development partner for India with its operations of During April - November, 2020, two Pipeline Review financing and advising the private sector in the country. Meetings were held on June 10, 2020 and October 7, India has a shareholding of 4.01%, the sixth largest 2020 and two tri-partite Review Meetings were held on along with that of the Russian Federation. India holds June 16-17, 2020 and September 22-24, 2020 for 3.82% of the voting power. India's Executive Director reviewing World Bank assisted projects of various represents a constituency equal to 4.61% voting power. sectors. There are three other countries in India's constituency 8.5.5 India as donor to IDA: During the IDA 18 at the IFC, viz. Bangladesh, Bhutan and Sri Lanka. IFC Replenishment Meetings, it was announced by India that has committed over USD 15 billion in India since the it would prefer the Word Bank Group to meet its needs first investment in 1958. Currently, IFC investments are through IBRD resources and hence, part of the IDA spread over 200 clients in India. As of June 2020, IFC's resources offered to India as transition support be made own account committed portfolio in India stood at available to meet the needs of other IDA clients. Thus, approximately USD 6.5 billion, making India IFC's largest India would no longer be a borrower from IDA. As a portfolio exposure which accounts for about 11% of its commitment to India's shared objective of eliminating global portfolio. India is also one of IFC's largest advisory extreme poverty, reducing vulnerability and increasing client, as well as the IFC regional hub for South Asia. resilience across countries, India decided to become The IFC's investments in India are spread across priority donor to IDA with a contribution of USD 200 million to sectors like infrastructure, manufacturing, financial IDA 17 replenishment. In furtherance of its commitment markets and SMEs, affordable housing, renewable towards the IDA countries, India announced a pledge of energy, low-income states, gender development and INR 12.25 billion as its contribution towards IDA 18 climate change. Keeping in alignment with the Country replenishment. During the IDA 19 replenishment, India Partnership Strategy (CPS) of the World Bank Group, committed INR 15.00 billion. IFC uses its private sector expertise to support the economic growth that is inclusive, productive and 8.6 Meetings of World Bank Group sustainable. IFC continued to deliver over USD 1.5 billion 8.6.1 The Development Committee (DC) Meeting of in FY20 (July 2019-June 2020) with a commitment of World Bank Group (WBG) during Spring Meeting of WBG USD 1.5 billion (including mobilised financing) in India. and IMF, 2020 were held virtually on April 17, 2020. From During July 2019-June 2020, DEA has approved a total India, Hon'ble Finance Minister attended the DC Meeting of 22 Article III Notifications. Further, DEA has granted as Speaker. Secretary,DEA also attended the meeting approval for three advisory engagements of IFC between along with officials from FB Division. July 2019 and June 2020. 8.6.2 The Development Committee (DC) Meeting of 8.8 International Monetary Fund World Bank Group (WBG) during Annual Meeting was 8.8.1 India is a founder member of the International held on October 16, 2020. Hon'ble Finance Minister Monetary Fund, which was established to promote a attended the meeting as a Speaker. Secretary, DEA also cooperative and stable global monetary framework. At attended the meeting along with officials from the FB present, 190 nations are members of the IMF. Since the Division. Further, a bilateral meeting between Secretary, establishment of IMF was established, its purposes have DEA with Mr. Axel van Trotsenburg, Managing Director remained unchanged but its operations - which involve (Operations), World Bank was held on October 22, 2020. surveillance, financial assistance and technical 8.6.3 Remote IDA Day Meetings held during April- assistance - have developed to meet the changing needs November 2020 are as follows: - 1) IDA19 Technical of its member countries in an evolving world economy. Briefing meeting was held on April 23, 2020. The meeting The Board of Governors of the IMF consists of one was attended by Director (Fund Bank). 2) IDA19 Informal Governor and one Alternate Governor from each member Consultation meeting was held on June 24, 2020. The country. For India, the Finance Minister is the ex-officio meeting was attended by the Director (Fund Bank). 3) Governor on the Board of Governors of the IMF. There 41Annual Report 2020-2021 are three other countries in India's constituency at the c. Bilateral Borrowing Agreements (BBAs) IMF, viz. Bangladesh, Bhutan and Sri Lanka. The provide a third line of defence. Governor, Reserve Bank of India (RBI) is India's Alternate a). India’s Quota and Ranking: The 2010 IMF Governor. Quota and Governance Reforms (including the 14th 8.8.2 Meetings of Board of Governors: The Board General Reforms of Quotas) came into effect on January of Governors usually meets twice a year viz. the Spring 26, 2016. Consequently, India's quota in the IMF is SDR Meetings and the Annual Meetings of the IMF and World 13,114.40 million with a shareholding of 2.75%. India Bank to discuss the work of the respective institutions. ranks 8th in terms of quota holding in IMF. Consequent At the heart of the gathering are meetings of the IMF's to this Quota Increase in IMF, India has provided for the International Monetary and Financial Committee (India Quota increase of SDR 7292.9 million under the 14th is represented by the Hon. Finance Minister in IMFC) General Review of Quotas as SDR 1,823,225,000 and the joint World Bank-IMF Development Committee through India's SDR holdings for Reserve Asset Portion (DC), which discusses progress on the work of the IMF (25% of quota increase) and SDR 5,469,675,000 for Local and World Bank. Currency Portion (75% of quota increase) through issuance of non-interest bearing, non-negotiable 8.8.3 The last Spring Meetings of the IMF/ World Government of India Rupee Securities. Bank, meetings of G-20 were held virtually from April 15 to April 17, 2020. The Hon'ble Finance Minister, b). India’s contribution to New Arrangements Secretary, Department of Economic Affairs, Additional to Borrow (NAB): In April 2009, the G-20 agreed to Secretary (FB and ADB), Director (IMF), Director (WB) increase the resources available to the IMF by up to $500 and DD (IMF) represented India in these meetings. billion (which would triple the total pre-crisis lending Hon'ble Finance Minister during her intervention outlined resources of about $250 billion) to support growth in various measures taken by the Govt. of India to mitigate emerging market and developing countries, viz. through the impact of the health crisis and to alleviate hardships bilateral financing from IMF member countries; and by of the poor and vulnerable. The Hon'ble Finance Minister incorporating this financing into an expanded and more also informed the IMFC about India's role as a flexible New Arrangements to Borrow (NAB). As part of responsible member of the global community by efforts to overcome the global financial crisis, in April providing critical medicines required during COVID19 2009, G-20 economies agreed to increase the resources pandemic to other nations. available to the IMF by up to $500 billion to support growth in emerging market and developing countries. The 8.8.4 The Annual Meetings of the IMF/ World Bank, meetings of G-20 were held virtually from October 12 to increase was made through (i) increase in bilateral October 16, 2020. The Hon'ble Finance Minister, financing from IMF members and (ii) by incorporation of Secretary, Department of Economic Affairs, Additional this financing into an expanded and more flexible NAB. Secretary (FB and ADB), Director (IMF), Director (WB) The amended NAB, which became effective on March and DD (IMF) represented India in these meetings. 11, 2011 increased the maximum amount of resources Hon'ble Finance Minister emphasized that India supports available under NAB to SDR 370 billion from SDR 34 IMF's view that policy support assumes great significance billion. at a time when economies across the globe are The NAB was rolled back from SDR 370 billion witnessing the worst slowdown in decades and that to SDR 182 billion, pursuant to the effectiveness of the withdrawal of policy support could trigger liquidity 14th Review quota increase resulting in a decline in the shortfalls and insolvencies. Further, even though India financing ratio (NAB: quota) from 3:1 to 1:1. However, conducted a strict lockdown that did impede economic the NAB continues as a standing facility and the rolled activity but the Policy support measures announced by back NAB resources continue to be counted toward the the Government have fostered a quick recovery and the Fund's overall lending capacity. As NAB arrangement V-shaped pattern is being seen in several high-frequency expired on November 16, 2017, India had already indicators, including Manufacturing PMI, thereby concurred to the proposal to renew the NAB for a period presenting a strong recovery prospects. of five more years upto November 2022. 8.8.5 India and IMF: The membership of the Fund is committed to maintain a strong, quota-based, and c). India’s contribution to Bilateral Borrowing adequately resourced IMF. IMF's total resources presently Arrangements (BBA): BBAs are used as a third line of include the following: defense after quota and NAB resources are exhausted substantially. At the Los Cabos G20 Summit in 2012, the a. Quotas: Primary source of financing for IMFC and G20 jointly called for further enhancement of lending; IMF resources for crisis prevention and resolution through b. New Arrangements to Borrow (NAB) acts temporary bilateral loans. This included BRICS countries as the second line of defence i.e. after quota wherein USD 10 billion was contributed each by India, resources are exhausted substantially. Brazil and Russia. India's commitment of contributing 42Department of Economic Affairs I USD 10 billion is implemented through the mechanism technical assistance, grants, and equity investments to of Note Purchase Agreement (NPA) between Reserve promote social and economic development. Bank of India (RBI) and the IMF. 8.9.2 ADB has 68 members (including 49 regional and India has agreed to commit USD 10 billion to the 19 non-regional members), with its headquarters in BBA 2016 as on August 10, 2017, which was to expire in Manila, Philippines. ADB's authorized and subscribed December 2019. However, India has consented to a one- capital stock is US$163.12 billion, of which India's year extension of term through December 31, 2020 of subscription is lJS$10.3 billion. India holds 6.32% of the Note Purchase Agreement to effect the BBA 2016 shares in ADS, equivalent to 672,030 shares (@US$ between IMF and RBI.India has also agreed to enter into 12063.5 per share). India has 5.35% voting rights. Japan agreement with IMF regarding BBAs 2020. and the United States are the largest shareholders with 15.57% each of shares. China and India are the third 8.8.6 South Asia Regional Training and Technical (6.43%) and fourth (6.32%) largest shareholders, Assistance Center (SARTTAC) : A Memorandum of respectively. Understanding was signed between India and International Monetary Fund for setting up of South Asia 8.9.3 The Asian Development Fund (ADF) is a special Regional Training and Technical Assistance Center fund of ADB, which is utilized for extending financial (SARTTAC) in India by the International Monetary Fund support to Group A (and selectively Group B) member on March 11, 2016. The Centre has been officially countries, which have lesser credit worthiness and are inaugurated on February 13, 2017. SARTTAC serves prone to debt distress and other vulnerabilities. India six member countries of Bangladesh, Bhutan, India, became a donor to ADF in July 2014 and contributed Maldives, Nepal & Sri Lanka. It provides training to US$ 30 million for the 11th Replenishment of ADF (ADF­ government & public sector employees, enhance their XI) and US$41.74 million for ADF-XII. For ADF-XIII, India technical and analytical skills and improve the quality of has pledged US$51.38 million. ADB provides their inputs into policy. It also provides technical concessional financing through ADF to its developing assistance to governments and public institutes in various member countries (DMC) based on the agreed areas such as macroeconomic policy, macro & micro yardsticks. prudential regulation, financial sector supervision as well as national accounts statistics and forecasting. 8.9.4 ADB has a Board of Governors (BoG), a Board of Directors (BoD), a President, six Vice Presidents and 8.8.7 India has contributed USD 32.8 million of which specialized officers and staff in its headquarters and the first installment of USD 17.8 million to SARTTAC was country offices. The BoG is ADB's highest policy-making paid in August, 2016 and the balance USD 17.8 million body, which comprises one representative from each was paid in November, 2017. member nation including India. The Finance Minister of India is the designated Governor for India. The BoG 8.8.8 Article IV Consultations : Under Article IV of exercises its powers and functions with the assistance the IMF's Articles of Agreement, the IMF holds bilateral of the BoD, which performs its duties full time at the ADB discussions with members, usually every year, to review headquarters. The Directors supervise ADB's financial the economic status of the member countries. Article IV statements, approve its administrative budget, and review consultations are generally held in two phases. During and approve all policy documents and all loan, equity, this exercise, the IMF mission holds discussions with the and technical assistance operations. India is represented RBI , various line Ministries / Departments of Central in the BoD by an Executive Director (ED), who is Government and various other stakeholders. The Article nominated by the Government of India. ED is supported IV Consultations are concluded with a meeting of IMF by officers from India (two advisers and one executive Executive Board at Washington DC which discusses the assistant). Article IV Report. Due to current Covid-19 situation and a lack of clarity on the macro-economic situation, the 2020 8.9.5 Annual Meetings of BoG are held in a designated Article IV Mission for India could not take place. The next member country in early May. Annual meetings are Article IV Mission is expected to be held during second occasions for the BoG to provide guidance on ADB quarter of FY 2021. administrative, financial, and operational directions. The meetings provide opportunities for member governments 8.9 Asian Development Bank to interact with ADB staff, non-government organizations 8.9.1 Membership of ADB: India became a founding (NGOs), media, and representatives of observer member of the Asian Development Bank (ADB) in 1966. countries, international organizations, academia and the ADB envisions a prosperous, inclusive, resilient, and private sector. Bilateral meetings are held between sustainable Asia and the Pacific, while sustaining its countries on the side lines of the Annual Meeting. The efforts to eradicate extreme poverty in the region. ADB 46th Annual Meeting of ADB was hosted by India on 2-5 assists its members, and partners, by providing loans, May 2013 in New Delhi. The 53rd Annual Meeting was 43Annual Report 2020-2021 held virtually on 17-18 September 2020 due to the COVID- approach while balancing toward human development 19 pandemic. sector.  The ADB transport sector program aims to 8.9.6 ADB assistance to India commenced in 1986. improve connectivity and accessibility, promote The ongoing sovereign lending portfolio of ADB projects safe and environment-friendly practices, and in India consists of 67 loans worth $13.6 billion. ADB's enhance in-country and sub-regional trade annual sovereign lending in India increased to an all-time corridors and facilities. high of $3.18 billion in the calendar year 2019. The contract awards also rose to a record total of $2.97 billion  Energy sector initiatives contribute to the while disbursement was about $2.09 billion in 2019. strengthening of power transmission and During the same year, ADB committed $965.1 million for distribution networks in India. ADB supported its private sector investments in India. In 2020, sovereign initiatives aim to provide uninterrupted power annual lending increased to $3.92 billion including a $1.5 supply to all, while promoting low-carbon billion support to COVID-19 Active Response and solutions, renewable-including solar energy, and Expenditure Support (CARES) Program to support the energy efficiency. health sector in containing the infection, strengthen the  The urban sector program focuses on health system's preparedness to improve services and expanding the coverage, quality, and continuity its resilience against future outbreaks and provide social of basic services to improve the urban quality protection for more than 800 million people, particularly of life. It is aligned to support Gol's urban the economically vulnerable sections of society. The 2020 flagship initiatives. regular program of assistance included projects in  The finance sector program endeavors to support transport, energy, urban, and public sector management leveraging of finance for infrastructure through sectors. To enhance urban mobility, ADB supports rail- loans and equity finance, investment funds, credit based urban mass transit system with linkages to lines, and guarantees. multimodal transport network in combination with transit-  The agriculture and natural resources sector oriented urban development. The program also aims to interventions provide assistance in the key rebalance support from "hard infrastructure" sectors to areas of water use efficiency and climate education and health, finance, and public sector resilience. management. This shift aligns with India's expansionary track toward human development and response to the  The human development program encompasses COVID-19 pandemic. Portfolio performance has interventions in the skills/ education and health improved over the years as a result of regular review sectors. Skills/education projects aim to help meetings such as Tripartite Portfolio Review Meetings increase the supply of qualified labor to industries (TPRM) for ongoing and pipeline projects. In 2020, two and services essential to growth, and include such TPRMs were held virtually under the pandemic support to state-level efforts in skills development environment. with a focus on quality and outcomes. The health sector program aims to contribute to heath sector 8.9.7 ADB assistance to India supports the development and reforms, health care finance, government's development priorities , evolving focus and health insurance and subsidized health areas, and flagship initiatives. The India country programs. partnership strategy (CPS) of ADB provides the overarching framework for ADB's operations in India. In 8.9.9 South Asia Sub-regional Economic Cooperation line with the government's guiding principle that (SASEC) Program brings together Bangladesh, Bhutan, multilateral development partners add value beyond India, Maldives, Myanmar, Nepal, and Sri Lanka in a tangible investments, ADB leverages knowledge, project-based partnership. Under this flagship Program, supports capacity development, and incorporates ADB has been working with the SASEC countries to build innovation and best practice into its operations. The ADB's cross-border power connectivity, to facilitate regional country partnership strategy (CPS), 2018-2022 for India trade, and connect transport network for movement of was approved in September 2017. goods and people. SASEC countries share a common vision of boosting intraregional trade and cooperation in 8.9.8 The CPS for India aims to accelerate the South Asia, while also developing connectivity and trade country's inclusive economic transformation. ADB with Southeast Asia through Myanmar, to the East Asia, interventions in India are closely aligned with the and the global market. The SASEC Vision was launched government development priorities, and span six sectors in April 2017 in the SASEC Finance Ministers' Meeting in of operation: transport; energy; urban infrastructure and New Delhi. It articulates shared aspirations of SASEC services; finance; human development; and agriculture countries, and set the path to achieve these through and natural resources. ADB's program of assistance is regional collaboration. The Vision document lays out a increasingly employing integrated, multi-sectoral plan to transform the subregion by leveraging natural 44Department of Economic Affairs I resources, promoting industry linkages for the vaccines and reduce child mortalities. GAVI's mission development of regional value chains, and expanding the is to save children's lives and protect people's health by region's trade and commerce through the development increasing access to immunization in poor of subregional gateways and hubs. SASEC Operational countries.India is not only a recipient, but also a Plan presents the strategic objectives of the SASEC contributor to GAVI Alliance. As per 'Contribution partnership, and the operational priorities of the four main Agreement' signed between Government of India and SASEC sectors-transport, trade facilitation, energy, and GAVI, India committed to contribute USD 2 million per economic corridor development. It is supported by a list annum to the GAVI Alliance during the replenishment of potential projects regularly updated by SASEC cycle of four year i.e. 2017-20. countries to be implemented during 2016-2025. SASEC countries have signed and implemented 62 ADB-financed 8.10.2 A proposal of MoHFW was received in 2020 for investment projects worth around $13.63 billion in the enhancement of India's contribution to the GAVI in the above-mentioned four focus areas. The transport sector next replenishment cycle of five year i.e. 2021-25. It accounts for most projects (42 projects worth a cumulative was decided with the approval of Hon'ble Finance $11.25 billion), followed by energy (12 projects worth Minister that the Govt. of India will make a contribution $1.58 billion), economic corridor development (three of US$ three million per annum to GAVI, i.e., a projects worth $697 million), trade facilitation (three cumulative contribution of US$ 15 million for the next projects worth over $80.66 million), and ICT (two projects replenishment cycle of GAVI of five years. The Multi- worth $20.80 million). Since 2002, the Government of Year Contribution Agreement towards the replenishment India has signed 13 ADB-financed SASEC investment for the next five years (2021-25) is likely to be signed projects worth more than $5 billion. In addition to the shortly. projects, ADB-financed technical assistance has supported SASEC investment projects in India, regional 8.11 Global Fund to Fight AIDS, Tuberculosis and cooperation forums and knowledge-sharing initiatives, Malaria (GFATM) and pilot projects since 2001. A total of nine national 8.11.1 The Global Fund to Fight AIDS, Tuberculosis technical assistance projects (cumulative worth around and Malaria (The Global Fund / GFATM) is an $10.28 million) have assisted India in project preparation, international financing organization that aims to attract strategic planning, and capacity building. and disburse additional resources to prevent and treat HIV and AIDS, Tuberculosis and Malaria. The 8.9.10 Building the capacity of various executing organization is public-private partnership with Secretariat agencies has been an important element of ADB's at Geneva, Switzerland. The organization began assistance to India. The Capacity Development operations in January 2002. GFATM supported Resource Center (CDRC), which was established at programs have estimated to have saved 38 million lives ADB's India Resident Mission, collaborates with leading since 2002. experts and national training institutes to develop and deliver training courses for executing agencies on 8.11.2 As per the 'Multi-Year Contribution Agreement' operational, technical and substantive topics relating to signed between the Government of India and GFATM on ADB operations in India. In 2020, CDRC carried on its 11th June, 2020, India committed USD 22 million to work despite the COVID-19 pandemic situation, through GFATM during the Sixth Voluntary Replenishment cycle virtual training programs, (2020-22) as per following schedule (i) US$ 7 million in 8.9.11 Technical Assistance (TA) program has also 2020 and 2021 each and (ii) US$ 8 million in 2022. India's evolved in line with the loan program. TA helps DMCs first contribution to the GFATM for 2020-21 (USD 7 million) enhance capacity, improve project preparedness and was paid in July 2020. implementation, promote technology transfer, and 8.12 Global Facility for Disaster Reduction and undertake analytical studies. Recovery (GFDRR) 8.9.12 ADB's Technical Assistance Special Fund (TASF) 8.12.1 GFDRR is a global partnership program provides technical assistance improving capacity in the administered by the World Bank Group. GFDRR supports formulation, design and implementation of projects to developing countries to: (i) mainstream disaster risk facilitate effective use of external financing. India has been management and climate change adaptation in voluntarily contributing to TASF, since 1970. development strategies and investment programs, and (ii) improve the quality and timeliness of resilient recovery 8.10 Global Alliance for Vaccines and and reconstruction following a disaster. The governance Immunizations (GAVI Alliance) structure of GFDRR comprises: the Consultative Group 8.10.1 The GAVI Alliance (formerly the Global Alliance (CG), the Secretariat, and the Trustee. The Consultative for Vaccines and Immunization) was founded in 2000 Group is the primary policy making body in GFDRR whose to reduce the historical gap in access to life saving Chair is a World Bank representative while its Co-chair 45Annual Report 2020-2021 is selected from the member countries for a period of signed by India on April 13, 1992 with a view to creating one year. an environment for foreign direct investment (FDI) in India to provide guarantees to prospective investors and 8.12.2 India became a member of GFDRR in 2013 by mitigating certain perceptions like non-commercial risks paying one time member fee of USD 500,000 in three like inability to transfer profits from the host country, installments during 2014-15. DEA vide its O.M. dated Oct confiscation of assets, damages due to war or civil 30, 2018 gave its no-objection to MHA which is the nodal disturbances which were restraining FDI flows in India. ministry for GFDRR, for renewal of India's membership India became member of MIGA on January 6, 1994. At to GFDRR and as well as commitment on the financial present, India has 3.03% capital subscription with a voting support on making contribution of USD 5,00,000 as power of 2.56% on the MIGA Board. As a constituency membership fee cumulatively over three years to GFDRR India has 7402 shares, comprising 3.39% of total voting for the FY 2018-21. power. 8.13 Multilateral Investment Guarantee Agency 8.14 Global Development Network (GDN) (MIGA) GDN was created as World Bank Initiative in Multilateral Investment Guarantee Agency 1999. Its mission is to develop research capabilities in (MIGA) was founded in 1988 to promote foreign direct social sciences in developing countries. Its purpose is to investment (FDI) into developing countries. MIGA facilitate local actors in not only generating relevant local currently has 182 members. It provides investment development knowledge but also intermediate globally guarantees to private sector investors and lenders, produced knowledge and formulate locally owned policy particularly in conflict affected countries. MIGA also choices. In 2001, GDN was established outside the World provides technical assistance to developing countries as Bank as US NGO. GDN has 5 member countries namely well as helps them in their efforts to attract foreign capital, Colombia, India, Spain, Sri Lanka and Hungary. GDN technology, and know-how. With the approval of Cabinet Agreement has not been ratified by 3 countries namely Committee on Political Affairs, the MIGA Convention was Egypt, Italy and Senegal for internal reasons. Position of ATNs – IMF Section (FB & ADB Division, DEA) Sl. Year No. of Paras/ PA reports on Details of the Paras/PA reports on which ATNs are No. which ATNs have been pending submitted to PAC after vetting No. of ATNs No. of ATNs sent No. of ATNs which by Audit not sent by but returned with have been finally the Ministry observations and vetted by Audit but even for the Audit is awaiting have not been first time their resubmission submitted by the by the Ministry Ministry to PAC 1 2014 Report 1 of 2014, Demand No.32, Para 3.16 (Annexure - - Submitted 3.14, Item 23 to 25) 2 2014 Report No. 1 of 2014, Demand No. 32, Para 3.16 - - Submitted (Annexure 3.14) 3 2015 Report No. 1 of 2015, Demand No. 33, Para 3.12 - - Submitted (Annexure 3.10 & 3.15, Annexure 3.13) 4 2016 Report No. 34 of 2016, Demand No. 34, Para 3.16 (Annexure 3.13, Item 21), - - Submitted Para 3.17 (Annexure 3.14, Item 6) 5 2016 Report No. 34 of 2016, Demand No. 34, Para 3.18 - - Submitted (Table 3.9, Item 3) 6 2017 Reports No. 44 of 2017, Demand No. 29, Para 3.15 (Annexure 3.12, Item No: - - Submitted 13), Para 3.17 (Annexure 3.14, Item 4) 7 2019 Reports No. 2, Demand No. 29, Para No. 3.3, Table 3.2, - - Submitted Item No. 9 46Department of Economic Affairs I 9. International Economic Relations 12. External Charges- Division a) South Asia (Afghanistan, Bangladesh, 9.1. IER Division is one of the important Divisions of Bhutan, Maldives, Nepal, Pakistan, Sri Department of Economic Affairs which deals with Lanka), South East Asia (Brunei, Burma, International Economic Relations. The major functions Cambodia, East Timor, Indonesia, Laos, of IER Division are dealing with economic and financial Malaysia, Philippines, Singapore, Thailand, matters related to: Vietnam), North America(Mexico), East Asia (Mongolia, Hong Kong, Taiwan) 1. G-20 b) Matter relating to CIS countries (Armenia, 2. G-7 Azerbaijan, Belarus, Georgia, Kazakhstan, 3. G-24 Kyrgyzstan, Moldova, Tajikistan, 4. BRICS Turkmenistan, Ukraine, Uzbekistan). 5. BRICS India Presidency 2021-Matters 13. Sectoral Charge - related to Finance Agenda a) Ministry of Defence, 6. SAARC, SDF 7. ASEAN, Caribbean Union b) Ministry of Tribal Affairs 8. World Economic Forum (WEF) E- Governance: 9. OECD, SCO As far as e-governance is concerned, IER 10. Asia Europe Meeting (ASEM) division is processing all the files in electronic mode from December 2016. All the physical files have been 11. BIMSTEC converted into Electronic files in December 2018. OrgaOnirzgaatnioizna Stitornu cStturruec toufr IeE oRf DIEivRis Dioinvision Ms Anu Mathai, Shri Virender Adviser(IER) Singh, Adviser(IER) Ms Remya Prabha G, JD Shri Parveen Kumar, Director Ms Anoopa Nair, JD (SAARC,SDF, WEF, (Finance Track, G7, G24, SCO, (Finance Track BIMSTEC, Sherpa Track, G20 OECD. ASEAN & Caribbean Union) WG,BRICS) Secretariat & Coordination) Ms Parul Gulati, Ms Preeti, DD(Finance Track, Shri Kumar Shubham, AD(SAARC,SDF, AD(Finance Track WG, G7, G24, SCO, OE CD, ASEAN WEF, BIMSTEC, Sherpa Track, G20 BRICS) & Caribbean U nion) Secretariat & Coordination) Shri Ku ldeep Shri Lal Ms Sonia Shri Arindam Ms Saroj Bala, Ms Sonia Singh M eena, Singh, Yadav, Saha, SO Yadav, ASO ASO(Finance ASO(Finance ASO(BRICS, ASO(SAARC, (Coordination) (G20 Track, G7, Track WG) Sherpa Track) SDF, Secretariat) G24, S CO, BIMSTEC) OEC D. ASEAN & Shri Amit Kumar, Caribb ean SSA Union) (Coordination) 47Annual Report 2020-2021 I. G-20 Global Financial Safety Net (GFSN) and debt sustainability among others. The G20 was formed in 1999, as a forum of Finance Ministers and Central Bank Governors, in c. Infrastructure Working Group (IWG) recognition of the fact that there was a major shift in the deliberates on quality infrastructure investments global economic weight from the advanced economies including innovation in mobilizing financial to emerging market economies. However, G20 rose into resources for infrastructure investment. prominence in 2008 when it was elevated from a forum d. Global Partnership for Financial Inclusion of Finance Ministers and Central Bank Governors to that (GPFI) works for advancing financial inclusion of G20 Heads of Nations in order to effectively respond globally. to the global financial crisis of 2008 and insulate the world from major economic collapse. Priorities of the G-20 in 2020 under Saudi Arabian Presidency The first G20 Summit was held in November 2008 in Washington DC under the shadow of the greatest The 2020, G20 Saudi Arabian Presidency under financial crisis in the post-war era. This was followed by the theme 'Realizing Opportunities of the 21st Century thirteen summits held in London (April, 2009), Pittsburg for All' had the following key aims: (September, 2009), Toronto (June, 2010), Seoul (November, 2010), Cannes (November, 2011), Los Cabos a. Empowering People, by creating the conditions (June, 2012), St. Petersburg (September, 2013), Brisbane in which all people - especially women and youth (November, 2014), Antalya (November, 2015), Hangzhou - can live, work and thrive. (September, 2016), Hamburg (2017), Buenos Aires b. Safeguarding the Planet, by fostering collective (2018) and Osaka (2019). The 15th G20 Riyadh Summit efforts to protect our global commons. under the Saudi Arabian Presidency was held virtually on 21st-22nd November, 2020. The 16th G20 Summit c. Shaping New Frontiers, by adopting long-term under the Italian Presidency will be held in Rome on 30th- and bold strategies to share benefits of innovation 31st October, 2021. and technological advancement India will take over the G20 Presidency in 2023. The agenda of the G20 Saudi Arabian Presidency The Presidency of G20 is usually held for a year with was calibrated with the need to address the outbreak of various meetings taking place (across a range of policy the COVID-19 pandemic. An Extraordinary G20 Leaders' issues) culminating with a Leaders' Summit. Virtual Summit on COVID-19 was held in March, 2020 wherein Leaders' committed to do whatever it takes to The G20 issues are discussed through two overcome the pandemic. parallel tracks, viz., Finance Track and Sherpa Track. Under Finance Track, issues such as international The Key Finance Track priorities were as follows: financial architecture, infrastructure financing, sustainable a. Reviewing the global economic outlook as well and inclusive growth, international taxation and financial as the situation of the global financial system sector regulations are deliberated. The highest level of meeting under Finance Track is G20 Finance Ministers b. Efforts to overcome the Covid-19 Crisis and Central Bank Governors (FMCBG) Meeting which is c. Enhancing Access to Opportunities for All held twice or thrice in a year. G-20 member countries are represented by their Finance Ministers and Central Bank d. Advancing Digital Financial Inclusion for Women, Governors. Preceding every FMCBG Meeting, Finance Youth and SMEs and Central Bank Deputies Meetings are held to prepare e. Utilizing the Benefits of Technology for for FMCBG Meeting. Secretary (Economic Affairs) is Infrastructure India's Finance Deputy. Technical level discussions are held through meetings of Working Groups. f. Framing Supervisory and Regulatory Issues for the Digital Era Finance Track issues are discussed broadly in four Working Groups which are as follows: g. Addressing the Tax Challenges arising from the Digitalization of the Economy a. Framework Working Group (FWG) discusses the ongoing macroeconomic issues, growth Key Outcomes of Riyadh Summit, 2020 under strategies and structural reforms. India along with the G20 Finance Track UK co-chairs this Working Group. 1. Reflections on Global Economic Outlook - b. International Financial Architecture (IFA) Leaders agreed that while the global economy Working Group that deals with issues related experienced a sharp contraction in 2020 due to the impact to international financial architecture such as of the COVID-19 pandemic, global economic activity has 48Department of Economic Affairs I partially picked up and the positive impact of G20 7. Financial Sector - Leaders agreed that the economies' significant policy actions started to pandemic has reaffirmed the need to enhance global materialize. However, they noted that recovery is uneven, cross-border payment arrangements to facilitate cheaper, highly uncertain and subject to elevated downside risks faster, more inclusive and more transparent payment including those arising from renewed virus outbreaks in transactions, including for remittances. In this regard, they some economies. In this context, G20 Leaders endorsed the G20 Roadmap to Enhance Cross-Border underscored the urgent need to bring the spread of the Payments. They also reaffirmed the importance of orderly COVID-19 virus under control, which is key to supporting transition away from LIBOR to alternative reference rates global economic recovery. They also determined to before end-2021. continue to use all available policy tools as long as 8. Technological Innovation - Leaders agreed that required to safeguard people's lives, jobs and incomes, responsible technological innovations can deliver support the global economic recovery, and enhance the significant benefits to the financial system and the broader resilience of the financial system, while safeguarding economy, but there is a need to remain vigilant to existing against downside risks. and emerging risks. In this regard, the leaders welcomed 2. The G20 Action Plan in response to COVID- the reports on the so-called 'global stablecoins' and other 19 - The Action Plan sets out key principles and similar arrangements submitted by the FSB, the Financial commitments to drive forward international economic Action Task Force (FATF) and the IMF. cooperation as G20 economies navigate this crisis and 9. Combating money laundering and terrorist take steps to support the recovery and achieve strong, financing - G20 Leaders supported the Anti-Money sustainable, balanced and inclusive growth. G20 Leaders Laundering (AML)/Counter-Terrorist Financing (CFT) endorsed the October 2020 updates to the G20 Action policy responses detailed in Financial Action Taskforce's Plan, thereby guiding the G20 economies to continue to (FATF) paper on COVID-19 and reaffirmed their support respond promptly to the evolving health and economic for the FATF, as the global standard-setting body for situation. preventing and combating money laundering, terrorist 3. Access to Opportunities - G20 Leaders agreed financing and proliferation financing. Leaders also to continue their efforts to reduce inequalities, reaffirming reaffirmed their commitment to strengthening the FATF's their previous commitments to promote inclusive growth. Global Network of regional bodies, and called for the full, Leaders also endorsed the G20 Menu of Policy options effective and swift implementation of the FATF standards to enhance access to opportunities for all that can be worldwide. leveraged to support the immediate response to the 10. Globally fair, sustainable, and modern COVID -19 pandemic and move towards a strong, international tax system - Leaders agreed to continue sustainable, balanced and inclusive recovery. their cooperation for a globally fair, sustainable, and 4. Debt Service Suspension Initiative (DSSI) - modern international tax system and remained committed Leaders committed to implementing the Debt Service to further progress on work related to addressing the tax Suspension Initiative (DSSI) including its extension challenges arising from the digitalization of the economy through June 2021, allowing DSSI-eligible countries to and urged the G20/OECD Inclusive Framework on BEPS suspend official bilateral debt service payments. As of to address the remaining issues with a view to reaching 13 November 2020, 46 countries requested to benefit a global and consensus-based solution by mid-2021. from the DSSI, amounting to an estimated USD 5.7 billion 11. Digital Financial Inclusion - The Leaders of 2020 debt service deferral. For debt treatments beyond endorsed the G20 High-level Policy Guidelines on Digital the DSSI, the Leaders' also endorsed the "Common Financial Inclusion for Youth, Women, and SMEs Framework for Debt Treatments beyond the DSSI", which prepared by the Global Partnership for Financial Inclusion is also endorsed by the Paris Club. (GPFI) and welcomed the 2020 G20 Financial Inclusion 5. International Financial Architecture- Leaders Action Plan, which will guide the work of the GPFI for the reiterated their commitment to ensure a stronger global next three years. financial safety net with a strong, quota-based, and Contribution of India for the Summit adequately resourced IMF at its center. They remained 12. India made significant contributions to the committed to revisiting the adequacy of quotas and to discussions and deliberation of the priority issues under continue the process of IMF governance reform. the Saudi Presidency. India extended its support to the 6. Infrastructure Investment - Leaders endorsed Debt Service Suspension Initiative (DSSI) for the benefit the G20 Riyadh InfraTech Agenda, which promotes the of the low income countries and to address their short use of technology in infrastructure and also agreed to term liquidity needs in the wake of COVID crisis. India advance the work related to the G20 Principles for Quality participated actively in the discussions on Infrastructure Infrastructure Investment. and International taxation, Financial Inclusion and 49Annual Report 2020-2021 International Financial Architecture issues to ensure that BRICS Finance and Central Bank Deputies and one the outcomes are in line with the requirements and meeting of the BRICS Finance and Central Bank priorities of the developing countries. Ministry of Finance Governors were held. participated actively in the drafting of key outcome Under BRICS Financial Cooperation, the documents of the G20 Finance Track. following agenda items were discussed during the 2020 13. As a co-chair of the Framework Working Group, Russian Chairship1 : India led the discussions on G20 Action Plan in response Issues under Ministry of Finance to COVID-19 and access to opportunities for all. On Action Plan, India contributed proactively in drafting the G20 a. International Cooperation and Response to Action Plan, its October update as well as July and COVID-19 pandemic November progress reports. India also worked to ensure that the updated commitments enshrined in the Action b. Exchange of views on the G20 Saudi Presidency Plan pillars relating to economic response and recovery outcomes are simple, effective and relevant in the current policy c. Digital Platform to encourage infrastructure context. investment in BRICS countries 14. India has shared country experiences related to d. New Development Bank membership expansion 3 policies in the G20 Menu of Policy options to enhance access to opportunities for all. These include Stand Up Issues under Central Bank India reflecting policy aimed at women's economic a. Contingent Reserve Arrangement empowerment, Pradhan Mantri Mudra Yojana reflecting financial inclusion and SHREYAS (Scheme for Higher b. Information Security Cooperation Education Youth in Apprenticeship and Skills) reflecting policy focused on empowering youth through skills c. Payments Systems Cooperation training. Key outcomes of the BRICS Summit, 2020 on Ministry 15. On addressing the tax challenges of digitalization, of Finance issues India is continuously making all efforts in the G20 forum 1. Strong, sustainable, balanced and inclusive to ensure that the global and consensus-based solution economic development and growth - The BRICS is reached by mid-2021 and is one that addresses the Leaders agreed to strengthen their efforts as necessary concerns, in particular, of developing countries. to promptly navigate the BRICS countries towards strong, Priorities of the G-20 in 2021 under Italian Presidency sustainable, balanced and inclusive economic development and growth in the post-COVID-19 era. The 16. In 2021 G20, under Italian Presidency, will focus Leaders acknowledged substantial fiscal, monetary and on three broad, interconnected pillars of action: People, financial stability measures implemented in BRICS Planet, and Prosperity. countries in order to support economic growth and 17. Within these pillars, Presidency shall aim to take reaffirmed their determination to continue to use available the lead in ensuring a swift international response to the policy tools to safeguard people's lives and livelihoods. pandemic - providing equitable, worldwide access to They also committed to continue coordination and diagnostics, therapeutics and vaccines - while building collaborative efforts within the G20 on issues of mutual up resilience to future health-related shocks. interest to the BRICS countries with the aim to advance in the G20 the interests and priorities of emerging market 18. It shall also focus on reducing inequalities, on economies and developing countries. women's empowerment, on the younger generations, protecting the most vulnerable through promoting the 2. BRICS response to COVID 19- The BRICS creation of new jobs, social protection and food security, Leaders recognizing the complexity and bridging the digital divide, improving productivity among interconnectedness of the challenges posed by the others. COVID-19 pandemic on international economy, healthcare systems, financial sector and development, 19. Focus will also be on promoting better use of well-being of the most vulnerable groups in societies, renewable energies and protecting climate and reaffirmed their commitment to contribute to healthcare environment. and economic recovery and lead in reinvigorating II BRICS 1The work under BRICS Finance Agenda has areas identified for DEA co-ordiantes the work in India on BRICS Ministry of Finance as well as Central Bank. The work is carried out by BRICS Finance and Central Bank Deputies who report to Finance Agenda. The Chairship of BRICS was taken BRICS Finance Ministers and Central Bank Governors who then over by Russia from Brazil on 1st February 2020. In 2020, eventually report to BRICS Leaders. In India, the BRICS Finance Deputy is Secretary, Economic Affairs and BRICS Central Bank under the Russian Chairship, three meetings of the Deputy is Deputy Governor, RBI. 50Department of Economic Affairs I multilateral cooperation, aimed at elaborating common, Finance Ministers and Central Bank Governors meetings efficient and sustainable solutions to tackling the current as well as meetings of working group and task force crisis and ensuring economic growth. around the year. 3. Strong, quota-based and adequately During India's Chairship of BRICS in 2021, resourced IMF: The Leaders reaffirmed their Ministry of External Affairs will be the nodal Ministry, commitment to a strong, quota-based and adequately overseeing and coordinating across all areas of BRICS resourced IMF at the center of the global financial safety cooperation. Department of Economic Affairs (DEA), net. The Leaders called upon the IMF to explore additional in consultation with stakeholders from Government of tools that could serve its Members' needs as the crisis India as well as Reserve Bank of India shall be setting, resulting from the COVID-19 outbreak evolves, drawing coordinating and steering the BRICS Finance Agenda on relevant experiences from previous crises. They also throughout the year of chairmanship. look forward to expeditious actions on completing the 16th General Review of Quotas within the agreed time III. G24 frame and implementing the long overdue governance 1. The Intergovernmental Group of Twenty-Four on reforms in the IMF. International Monetary Affairs and Development, or The 4. Infrastructure Initiative - The BRICS Leaders Group of 24 (G-24) was established in 1971 as a chapter acknowledged the initiative on exploring sharing relevant of the Group of 77 in order to help coordinate the positions and already existing national data on infrastructure of developing countries on international monetary and investment projects into a common Data Room on a development finance issues, and to ensure that their voluntary basis. They also took note of the progress made interests are adequately represented in negotiations on by the BRICS Taskforce on PPP and Infrastructure and international monetary matters. In particular, the G-24 look forward to further cooperation among BRICS focuses on issues on the agendas of the International countries and to possible modalities of NDB's Monetary and Financial Committee (IMFC) and the engagement in this initiative. Development Committee (DC) as well as in other relevant International fora. Though originally named after the 5. NDB response to COVID 19 - The Leaders number of founding Member States, it now has 28 commended the NDB for providing financial resources Members2 (plus China, which acts as a Special Invitee to reduce human, social and economic losses caused since 1981). by the coronavirus outbreak and to restore economic growth in the BRICS countries. They underscored timely 2. The governing body of the G-24 meets twice a measures taken by the NDB in order to combat the year, preceding the Spring and Fall meetings of the COVID-19 pandemic and its consequences embodied in International Monetary and Financial Committee and the the Emergency Assistance Program aimed to provide up Joint Development Committee of the World Bank and to USD 10 billion for Emergency Loans to its member the International Monetary Fund (IMF). The plenary G- countries. 24 meetings are addressed by the heads of the IMF and the World Bank Group as well as by senior officials of 6. NDB regional office - The Leaders welcomed the United Nation (UN) System. Issues are first discussed the opening of the NDB Eurasian Regional Center in by the Deputies and culminate at the Ministerial level by Moscow - the third NDB regional office - and look forward the approval of a document that sets out the consensus to opening the NDB regional office in India next year. view of member countries. The Ministerial document is 7. NDB Membership Expansion - The BRICS released as a public Communiqué at a press conference Leaders supported the NDB membership expansion held at the end of the meetings. Decision making within process based on relevant decisions by the NDB Board the G-24 is by consensus. of Governors. Further, they also highlighted that the 3. The last G-24 Ministers and Governors Meeting process of expansion should be gradual and balanced in was held virtually on October 13, 2020. It was chaired by terms of geographic representation in its membership as Minister of Finance of Ghana and was followed by the well as supportive of the NDB's goals of attaining the adoption of a Communiqué. The discussions were highest possible credit rating and institutional focused on Managing the Impact of COVID-19, development. particularly for developing countries where the pandemic BRICS India Chairship 2021 has had a severe health and economic impact with potential long-lasting effects on growth and development. India will assume the rotating Chairship of BRICS grouping from January 1, 2021 for one year. 2G-24 member countries are: Algeria, Argentina, Brazil, China, During the period, India will be steering the BRICS agenda Colombia, Congo (Democratic Republic of), Cote D’Ivoire, Ecuador, and will hold the 13th BRICS Leaders' Summit, along Egypt, Ethiopia, Gabon, Ghana, Guatemala, Haiti, India, Iran, Kenya, Lebanon, Mexico, Morocco, Nigeria, Pakistan, Peru, Philippines, with other ministerial level meetings including BRICS South Africa, Sri Lanka, Syria, Trinidad and Tobago and Venezuela. 51Annual Report 2020-2021 IV. The OECD 10. Aid Accounts & Audit Division (AAAD): 10.1 AAAD under Department of Economic Affairs 1. The Organization for Economic Cooperation and implements the financial covenants of external Loans/ Development (OECD), founded in 1961, is a global think Grants received by Government of India from various tank that works on a host of economic and development Multilateral and Bilateral donors. Main functions handled issues. Today, there are 37 OECD members3 spanning by this Division are processing the claims received from from South America to Europe and Asia Pacific including Project Implementing Authorities of externally aided several advanced economies and three emerging market projects, to draw down the funds from various external economies (Mexico, Chile, Turkey). All OECD members funding agencies and timely debt servicing liability of are signatories to 1960 Convention on the OECD and are committed to democracy and market economy3. Government of India in respect of availed external loans. Besides, this Division is also responsible for maintaining 2. India engages with some of the key OECD bodies loan records, external debt statistics, publication of through participation in the meetings of committees, their external assistance brochure on annual basis, and related bodies and global fora. Additionally, India and framing of estimates of external aid receipts and debt OECD engage in bilateral activities, periodic reviews and servicing. In addition, audit of import licenses issued by sector- specific publications. A prominent publication is DGFT offices for Export Promotion is also conducted by the OECD Economic Survey of India, typically done on a this Division. two-year cycle and last released in December 2019. 10.2 Performance/Achievements During Financial V. SAARC & SDF: year 2020-21 (as on 11th Jan 2021) Framework on Currency Swap Arrangement for 10.2.1 Total of 1371 live loan/accounts are being SAARC Member Countries: handled by AAAD. Out of these, 366 loan/Grants accounts are in disbursement mode. Rest of the loans "Framework on Currency Swap Arrangement for are live from debt servicing point of view. SAARC Countries" was approved by the Government of India on March 1st, 2012. The Framework was formulated 10.2.2 External receipts on Government Account with the intention to provide a line of funding for short during financial year 2020-21 (upto 11t h Jan. 2021) is term foreign exchange requirements or to meet balance `88,701/- crore. In addition to loan receipts, a sum of of payments crises till longer term arrangements are `460/- Crore has been received as Cash Grant. made. Under the facility, RBI offers swaps of varying sizes 10.2.3 A comparative position of receipts and to each SAARC member country (Afghanistan, repayment/payment in the current year as compared to Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri previous financial year and upto 11th Jan 2020 is as under. Lanka) depending on their two months import requirement and not exceeding US$ 2 billion in total, in US$, Euro or In ` crore INR subject to a floor of USD 100 Million and a maximum of USD 400 million. Apart from the country specific limits, SI. Description 2019-20 2019-20 2020-21 there is also a provision of 'Standby Swap' of USD 400 No (as on 11th (as on 11th Jan 2020) Jan 2021) Million within the approved Framework to be operated from the unutilized balance available, within the overall 1 Receipts size of the Facility of USD 2 billion. (Loans and Grants) 61,040 47,424 89,181 Till date, the validity of the framework has been 2 Payments extended thrice. In 2015, it was extended by the Union (Principal and Cabinet and in 2017 by Hon'ble Finance Minister. The Interest) 43,044 32,549 32,667 3. Net Transfer 'Framework on Currency Swap Arrangement for SAARC (1-2) 17,996 14,875 56,514 Countries' along with some modifications was further extended in 2019 by Hon'ble Finance Minister for a period 10.3 E-Governance of three years i.e. till 13th November, 2022. During 2020- till date, the facility has been availed by Maldives and Sri 10.3.1 The Activities of AAAD have been fully Lanka. computerized since April 1999. A software known as "Integrated Computerised System" (ICS) is working. This covers all the activities in the loan cycle i.e. preparation 3The membership of OECD is constituted by 27 European countries of Estimates for External Assistance for receipt as well (Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, as repayment, preparation of Annual External Assistance Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal, Brochure, processing of claims, repayment of debt and Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey and United Kingdom), 5 from America (Canada, Chile, Colombia, Mexico, maintenance of Debt Records. All the Officers/Staff and the United States), 1 from West Asia (Israel), 2 from East Asia members of this Division are well versed with the (Japan and South Korea), 2 from Asia Pacific (New Zealand and Australia). functioning of this system. 52Department of Economic Affairs I 10.3.2 IT-application is being promoted by way of Meeting (MRMs) are being held. In MRMs performance accepting and processing/forwarding of the draw down is critically reviewed and methods/suggestions for claims from various PIAs. PIAs have been provided maintenance/improvement of the service delivery software support for processing the e-claims. Such standards are discussed by the management. software is being utilized by the PIAs to maximum extent. 10.5.3 This division is ISO 9001:2015 certified division. E-claims in the form of SOE/Interim unaudited Financial This certification provides additional assurance to all the Report (IUFR) ensure faster disbursals. In case of World stakeholders with respect to the stated standards of this Bank, claims are processed in E-disbursement mode division. The terms and conditions of the certification are through the World Bank's software client connection from ensured through annual surveillance audit. this Division to World Bank. In case of ADB also the claims from PIAs to AAAD and from AAAD to ADB are in e- 10.6 Audit of Import Licences claim form through a portal known as CPD. 10.6.1 AAAD carries out audit of Import Licenses issued 10.3.3 The customized software of this division (ICS) is by licensing offices of the Director General of Foreign being upgraded with a Technical Assistance (TA) from. Trade located at 23 stations for promotion of Export. Asian Development Bank (ADB). During the financial year 2020-21 a sum of `1420 lakh has been recovered till January, 2021 as compared to 10.4 Trainings & Facilitation previous year corresponding figures of `2315 lakh as a 10.4.1 In order to familiarise the officers/staff of the PIAs, follow up action on the audit observations made by this training on E­ submissions are organized by this Division division. from time to time. PIAs have been imparted trainings. As 11. Administration Division a result of initiatives taken by this Division more claims are being received in e-claim forms. In 2020-21 till now 11.1 Functions 15 officers/staff members of different, Training programme is being withheld due to pandemic. 11.1.1 Administration Division is responsible for personnel and office administration, implementation of 10.4.2 In order to increase the capacity of the officers Official Language policy of the Government, and staff of this division frequently officers are being implementation of the Right to Information Act, 2005, nominated to ISTM and other training centres for training. redressal of public grievances, training of officials, Record The areas covered under the trainings comprises of ethics Retention Schedule, Complaints Committee on Sexual in Governance and Administration, O&M, Cash and Harassment of Women Employees etc. Budget and financial management. This office has developed; over a period of time; an excellent centre of 11.2 Staff Strength cross learning as a result of continuous interactions of 11.2.1 The staff strength in Department of Economic the officers and staff at international, national and state Affairs and its attached/sub-ordinate offices/statutory level conference/ workshops. bodies along with the representation of Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes 10.4.3 This office facilitates other ministries, state (OBCs) and persons with Disabilities therein is given in officials; CPSUs in understanding the fund flow Annex. I & II respectively. The information regarding mechanism in case of externally aided projects. The Pending ATN on PAC in respect of Admn.III is NIL. data maintained by this division is shared with other 11.3 Complaints Committee on Sexual ministries to be used in different reports and analysis. Harassment of Women Employees 10.5 Standards & Improvements in service deliveries 11.3.1 A Complaints Committee for considering 10.5.1 All the activities of this division have been complaints of sexual harassment of women employees organised hierarchically and standards in terms of time in Department of Economic Affairs is in existence in the span at each level for their accomplishment have been Department. defined. The standards set out are being adhered to by 11.4 Training of Staff Members close monitoring. Stakeholders of this division are well 11.4.1 Department of Economic Affairs deputes its defined consisting of three broad groups i.e. PIAs, officials for training to ISTM and other institutes to external funding agencies and others. Service to be increase their efficiency and improvement in the quality rendered to these groups is also well defined i.e. smooth of their work. During the period 1.1.2020 to 31.12.2020 a and quick disbursal of the Loans/Grants, timely debt total of 201 officials were nominated for the trainings of servicing and to provide management information as and different levels, which were conducted by the Institute of when required. Secretariat Training and Management (ISTM), New Delhi, 10.5.2 To ensure continuous improvement in the C-DAC, Hyderabad (on Cyber Security) and other performance standards, quarterly Management Review Institutes. 53Annual Report 2020-2021 11.5 Redressal Of Public Grievances: the website of DEA for the information of Public. 11.5.1 A Centralized Public Grievances Redressal and To facilitate the public, the RTI Cell is functioning Monitoring System (CPGRAM) is operational within the at Gate No.8 outside the North Block to receive Government which attends to all the Public Grievances the RTI applications. The applications received related to various Ministries/Departments. During the year are further forwarded to the CPIOs/ Public 2020, a total of 2590 fresh public grievance cases were Authorities concerned. received in the Department besides 218 brought forward (vi) The RTI application can be filed through online from the previous year. Out of these 2808 cases, 2567 portal - www.rtionline.gov.in. The RTI applicants cases were disposed off during the year. Apart from these, can see the status of their application as well as 436 Covid-19 Public Grievances were also received and their replies through the website. Further, transfer the same were disposed of. of application can also be done online. These all 11.5.2 Adviser (IER & Admn.) has been nominated as processes have resulted in significant reduction the Nodal Public Grievances Officer and Additional in processing of RTI applications. Secretary (Admn.) has been nominated as Appellate (vii) During the year 2020 from January 1, 2020 to Authority for Public Grievances in Department of December 18, 2020, 3150 RTI applications Economic Affairs. (including 252 physical applications) and 262 first 11.6 Right To Information Act, 2005 appeals, were received in the Department. An 11.6.1 In order to facilitate dissemination of information amount of `6078/- (Rupees Six Thousand and under the provisions of the Right to information Act, 2005, Seventy Eight only) was received as RTI fees Department of Economic Affairs has taken the following and Documents fee under the RTI Act. actions: 11.7 Use of Hindi in Official work (i) An RTI Section is in operation in DEA to reply to 11.7.1 The progress of implementation of various the RTI applications pertaining to the Department, programs under the Official Language Policy has been transfer the applications under the RTI Act, 2005 continuously reviewed during the year under report. to the Central Public Information Officers/ Appellate Authorities/Public Authorities 11.7.2 All documents were presented bilingual in concerned and to submit the quarterly returns Parliament. Section 3(3) of the Official Language Act, regarding receipt and disposal of the RTI 1963 and Rule 5 of the Official Language Rules, 1976 applications / appeals to the Central Information made thereunder and other instructions issued by the Commission. Department of Official Language were fully followed. (ii) In March, 2020, the proactive disclosure page During the year, several steps were taken in the was uploaded on the Department's website department to increase the use of Hindi in official work. (www.dea.gov.in) which contained information as 11.7.3 Due to Covid-19 lockdown many official language required under the Section 4 of the RTI Act, 2005. activities were disrupted. However, as soon as the It also contains the details of the Department's conditions became normal, the official language related functions along with its functionaries etc. as activities initiated in the department are as follows: required under section 4(1) (b) of the RTI Act. Hindi month (iii) Under Secretaries/Deputy Directors/ Assistant Directors, Sr. Accounts Officers and Economic Like other years this year also during 1 Officers level officers of the Department have September 2020 to 30 September 2020 'HINDI MONTH' been designated as Central Public Information was organised in the department. On this occasion Officers (CPIOs) under section 5 (1) of the Act, honourable Finance Minister released a message on 14 2005 in respect of subject(s) being handled by September 2020, 'HINDI DIWAS' in the Ministry of them. Finance and its subordinate offices in which she appealed to all its officers and officials to do their work maximum (iv) Deputy Secretaries/ Directors/ Addl. Economic in official language, Hindi. During this period many Advisers have been designated as First Appellate competitions were organised to encourage Hindi in their Authorities in terms of Section 19 (1) of the Act, official work with maintaining social distancing as per 2005, to deal with the Appeals preferred by government rules. applicants who does not receive a decision within the time specified in the RTI Act or is aggrieved Bilingual Website by a decision of the Central Public Information The website of the department is bilingual. Officer, as the case may be. Besides other material, all budget document, economic (v) The list of CPIOs and First Appellate Authorities survey and other publications and important circulars is updated and uploaded from time to time on were uploaded simultaneously in Hindi and English. 54Department of Economic Affairs I Official language inspection the Official Language Policy and the instructions i. Inspection of Subordinate Offices: The related to it, as soon as the budget related work National Savings Institute, New Delhi was and economic review is done. inspected on 10.11.2020 to ensure compliance (ii) The scheme related to Original book writing in with the Official Language Act, rules made Hindi 2020-21 will be circulated in the thereunder and annual program and orders and department. instructions relating to the official language. Joint (iii) During the year, 04 RTI cases related to Hindi Director (OL), Deputy Director (OL) and Senior section were received and are under process. Translation Officer participated in this inspection; (iv) Under official language activities, there is a plan ii Inspection of departmental sections: Although to inspect all the sections/divisions of the the sections/divisions of the department have department on official language usage. been inspected every year this year the inspection of sections/divisions of the department Material for Hindi Budget Translation could not be done due to lockdown. All Budget documents are presented to Dispatch of quarterly progress report Parliament in Hindi and English. Besides Budget documents, Hindi Translation Branch has also prepared Like every year this year too quarterly progress Hindi versions of Supplementary Demands, Economic report from all sections/divisions were collected and Classification Report, Reports on Public Statistics and consolidated and sent to official language department, Status Report of External Debt, FRBM quarterly Reports MHA . which were laid before the Parliament . Official Language Implementation Committee The translation of the official documents as meetings envisaged in the official Language Act, 1963 and Rules However, due to Covid-19, Official Language made there under was also undertaken by the Hindi Implementation Committee meetings could not be held Branch during the year under report. These include regularly as before (quarterly meetings could not take agreements with Foreign governments and International place in the period from April to June). However, following Agencies, Cabinet Notes, Parliament questions/ the social distancing guidelines a virtual meeting of official assurances, notifications, Standing Committee papers, language implementation committee was held on 28 Action Taken reports, monthly summary for the Cabinet, September, 2020 under the chairmanship of JS (Admin) Official letters and External funding Report. and follow up actions were published on DEA'S e-office 11.8 Finance Library & Publication Section dashboard. Introduction Inspection of subordinate offices by the Committee of Parliament on Official Language Finance Library & Publication Section was established in 1945. Finance Library functions as the This year, three subordinate offices of the Central Research and Reference Library in the Ministry Department were inspected by the Parliamentary Official and caters to the needs of Officials of all the Departments Language Committee ,details are as follows: (i) Security of the Ministry of Finance, Ad-hoc Committees and Printing and Minting corporation of India Limited, New Commissions set from time to time and research scholars Delhi on 27.10.2020, (ii) Northern regional office of from the various Universities in India as well as abroad. Securities and Exchange board of India (SEBI), New Delhi This Library also serves as the Publications Section of on 28.10.2020 and (iii) National Savings Institute, New the Ministry, coordinating in the procurement and Delhi on 25.11.2020; distribution of official documents with the various Circulation of Annual Program institutions/individuals on demand in India and abroad. Annul Programme 2020-2021, issued by Official Collection Language Department, MHA, was circulated among all sections/divisions of the department along with Library has specialized collection of around two subordinate offices and its link has been published on lakh documents on Economic and Financial matters and the dashboard of department's e-office.11.8.5.2 A useful subscribe to more than 800 periodicals/newspapers links is also provided on intranet by the Library which annually and databases like Agriwatch, CMIE, Indiastate helps the readers in search and download full text of and access to e-journals and back-filed collection through national and international reports and data. JSTOR is also available. Services Projected Schemes (i) In the month of March, a Hindi workshop related Library provides different kinds of services viz. to the Official Language will be organized with lending, inter-library loan, consultation, reprographic, the objective of bringing the information about circulation of newspapers and magazines, reference 55Annual Report 2020-2021 service, the Finance Library also undertakes the work of  India-US Economic and Financial distribution of publications of Ministry of Finance and Partnership Reserve Bank of India to State Governments, Foreign  Indo-French Bilateral Dialogue on Governments and renowned institutions in India as well Economic and Financial Issues as abroad.  India-Korean Finance Minister's Meeting Digital record Indian Official Documents relating to Economic  India- Japan Strategic Dialogue on and Finance Subject (Center and State since Economic Issues, independence) and Ministry of Finance Gazette  India- Switzerland Financial Dialogue Notifications published in the Pt. 2 Sec. 3 Sub-section (i) (ordinary) for the year 1955 to 1990 has been digitized.  India-EU Macro-economic Dialogue So far around 02 TB Data has been digitized and available  India-China Financial Dialogue in digital format.  India- Australia Economic Policy Computerisation Dialogue The Library is fully automated. The Library uses LIBSYS Library package for database management,  India-New Zealand Economic Policy retrieval, Library automation and other in-house jobs. The Dialogue internet facility is also available in the Library through  India-German Finance Ministry Senior which information is provided to the Officers of Ministry Officers Meeting of Finance.  International Platform on Sustainable Other works Finance i. Modernization and infrastructure improvement was undertaken by the Library and 95% work has  India-Korea Working Group Meeting been completed. d. UNDP and Sustainable Finance ii. The work of reimbursement of newspapers and e. Short-term Foreign Training Courses: The magazines of DEA is also undertaken by the BC Division is the focal point for Finance Library. administering all short-term foreign training iii. This Library also serves specifically as the courses of the duration up to four weeks Publications Section of the Ministry; coordinating offered by various international agencies. in the procurement and distribution of official A. Bilateral Official Development Assistance documents with the various institutions/ Policy individuals on demand in India and abroad. 12.2 Bilateral Official Development Assistance 12. Bilateral Cooperation & Sustainable Policy: Finance Division 12.2.1 India has been accepting external assistance 12.1 Bilateral Cooperation & Sustainable Finance from bilateral partners in the form of loans, grants and Division deals with the following functions: technical assistance for development of infrastructure, a. Bilateral Official Development Assistance social sector and for enhancement of knowledge/skills Policy: Bilateral Development Assistance of Indian nationals at both Centre and States level. As from all G-8 countries, namely, USA, UK, per the guidelines issued by this Department in 2005, Japan, Germany, France, Italy, Canada and bilateral development assistance can be accepted from Russian Federation as well as the European all G-8 countries, namely USA, UK, Japan, Germany, Union and Republic of South Korea and the France, Italy, Canada and the Russian Federation as well policy relating to it. as from the European Commission. European Union b. Lines of Credit (LoCs) extended by countries outside the G-8 can also provide bilateral Government of India under Indian development assistance to India, provided they commit Development and Economic Assistance a minimum annual development assistance of USD 25 Scheme (IDEAS) and under Concessional million. Financing Scheme (CFS) 12.2.2 A revised set of guidelines on Official c. Economic Policy Dialogues and Forums: Development Assistance for Development Cooperation BC Division deals with following dialogues/ with bilateral partners were issued in December, 2015. meetings- After issuance of revised guidelines, the Republic of South  India-UK Economic and Financial Korea has been recognized as bilateral partner country Dialogue for accepting Official Development Assistance from them. 56Department of Economic Affairs I 12.3 Bilateral Development Cooperation with improve human resources and thus contribute to the Japan Socio-Economic Development of India. The Technical Cooperation covers a broad spectrum of fields ranging 12.3.1 Japan-Official Development Assistance: from basic human needs to Agriculture and Industrial 12.3.1.1 Japan has been extending Official Development Development. Assistance (ODA) to India since 1958. Japanese ODA in 12.3.3.2 The main components of Technical Cooperation the form of loan assistance, grant aid and technical assistance to India is received through Japan International are (i) Technical Cooperation Projects, (ii) Technical Cooperation Agency (JICA). Japan is the largest bilateral Cooperation by Experts, (iii) Technical Cooperation by donor to India. Training, (iv) Technical Cooperation by Development Planning. 12.3.1.2 Government of Japan has committed JPY 333.167 billion (`21,930 crore approx.) for 7 projects to 12.3.3..3 There are 13 ongoing projects under Technical India from January 1, 2020 to November 30, 2020. As on Cooperation Programme. November 30, 2020, 77 loan projects are under 12.3.4 JOCV Programme implementation with Japanese loan assistance. The loan amount committed for these projects is JPY 2,974.83 12.3.4.1 JICA's volunteer programs, such as Japan billion (`172,000 crore approx.). The cumulative Overseas Cooperation Volunteer (JOCV) and Senior commitment of ODA loan to India has reached JPY 6,239 Volunteer (SV), support a wide range of local activities billion on commitment basis till November 30, 2020. by Japanese citizens who intend to cooperate in the economic and social development as well as in the 12.3.1.3 The ODA loan disbursement to India from reconstruction of emerging countries. Through these January 1, 2020 to October 31, 2020 was JPY 133.14 cooperation activities, participating volunteers can, not billion (approx. `9,289.95 crore). only contribute to the development of partner countries 12.3.2 Grant in Aid but also gain valuable experience in terms of international 12.3.2.1 The Government of Japan provides Grant in Aid goodwill, mutual understanding and an expansion in their to India under the following sectors and criteria: international perspectives. i) Criteria: 12.3.4.2 During 1st January 2020 to 30th November 2020, 3 proposals were posed to Embassy of Japan and a) Development impacts; No-objection to 8 Volunteers was issued. b) Utilization of Japanese technology/know- 12.3.5 JICA Partnership Programme how and likelihood of its dissemination to other areas. 12.3.5.1 Recognizing the growing importance of NGOs in international cooperation, the JICA Partnership ii) Sectors: Programme (JPP) was introduced in 2002. JPP is a a) Transport sector, including projects using technical cooperation program implemented by JICA to Information and Communication contribute to the social and economic development of Technology (ICT) and road projects with developing countries at the grass-roots level, in slope protection measures (potential line collaboration with partners in Japan, such as NGOs, ministries could include Ministry of Road universities, local governments and public interest Transport and Highways, Ministry of corporations while applying for JPP Indian NGOs are Housing & Urban Affairs, etc.) advised to seek a Japanese partner to take part in the b) Power sector, including small-scale hydro scheme. This has two components: power projects and solar power projects 1. Japanese NGO / Institution / Local (potential line ministries could include Government through JICA will support Indian Ministry of Power, Ministry of New and organization with Japanese expert Renewable Energy, etc.) personnel, equipment provision and 12.3.2.2 There are three (3) ongoing Grant-in-Aid projects Financial support through FCRA route; viz. a) The Project for Implementation of Advanced 2. Japanese NGO / Institution / Local Information and Management System in Core Bengaluru Government through JICA will provide b) Construction of the International Cooperation and Convention Centre in Varanasi and c) The Economic and training of Indian personnel in Japan. Social Development Programme FY 2020 (Provision of 12.3.6 Grassroots Funding Medical Equipment) 12.3.6.1 The Government of Japan also provides small 12.3.3 Technical Cooperation Programme assistance to Indian NGOs under its Grassroots Funding 12.3.3.1 Technical Cooperation aims at transfer of Programme through FCRA route on receipt of no technology and knowledge in a bid to develop and objection from DEA. 57Annual Report 2020-2021 12.3.6.2 During 1st January 2020 to 30th November modern infrastructure services to Indian 2020, DEA has cleared 6 GGP proposals. cities and their population. 12.3.7 Green Aid Plan (d) In light of the Indian Ganga Rejuvenation Mission, the cleaning of rivers was identified 12.3.7.1 The Government of Japan (Ministry of Economy, as one of the key areas of future strategic Trade and Industry) provides technical assistance under partnership as mentioned in the Joint Green Aid Plan through agencies like New Energy and Statement of Hannover in April, 2015. Industrial Development Organization (NEDO), an organization of METI. The areas of cooperation are 12.4.4 Under bilateral development cooperation prevention of water pollution, air pollution, treatment of programme, apart from high-level visits, two annual wastes and recycling and energy conservation and meetings at the level of Joint Secretary (Bilateral alternative energy source. Model projects are carried out Cooperation) i.e. Indo-German Annual Consultations and by NEDO on the basis of the MoU signed by NEDO with Indo-German Annual Negotiations are held, generally Department of Economic Affairs, the concerned line during 2nd quarter and 4th quarter of the year respectively. ministry and the implementing agency. NEDO sends In the Annual Consultations, apart from the policy issues, Japanese experts to Indian organizations to impart the discussion on ongoing projects and new projects and training and conducts training programmes in Japan. review of ongoing projects are made. In Annual Negotiations, the Government of Germany makes 12.4 Bilateral Development Cooperation between commitments of funds for new projects as well as for India and Germany additional funding for ongoing projects. On an average 12.4.1 Germany, through their Ministry for Economic Germany makes an annual commitment of Euro 1 billion. Cooperation & Development (BMZ) , has been providing The Indo-German Annual Negotiation meeting 2020 was both financial and technical assistance to India since held through virtual mode on 27th November 2020. The 1958. In 2008, the German Ministry for the Environment, total volume of funding committed by the German side Nature Conservation and Nuclear Safety (BMUB) also for Technical and Financial Cooperation projects and initiated assistance under German Government's programmes in 2020 amounts to EUR 1257.64 million 'International Climate Protection Initiative (IKI)', which is (EUR 1219.99 million FC and EUR 37.65 million TC). an additional instrument of the German Government over The cumulative volume of commitment made by the and above and without undermining the existing sources Germany for bilateral Technical and Financial of Official Development Assistance. Priority areas of Cooperation till 2020 amounts to EUR 20.62 billion. Cooperation includes: Energy, Sustainable Urban 12.4.5 At present, there are 41 ongoing projects Development as well as Environment and Management receiving financial assistance from KFW to the tune of of Natural Resources. 5.3 billion Euros from Germany. Some of the major 12.4.2 Germany implements its financial assistance ongoing projects funded by Germany include Nagpur programmes through KfW, the German Government's Metro Rail project, Green Energy Corridor projects in Development Bank. The technical assistance various states of India, Environment friendly urban programmes are implemented through GIZ (earlier GTZ) development in Ganga States, Climate Friendly Urban - a fully-owned corporation of German Government. Mobility Integrated Water Transport Kochi etc. Financial Assistance is provided as Reduced Interest 12.5 Bilateral Development Cooperation with AFD, Loan (EURIBOR-based loan) as well as Financing grants. France The technical assistance is provided in the form of grant and services by project experts. 12.5.1 The Government of France has been extending development assistance to India since 1968. 12.4.3 Major areas of cooperation: 12.5.2 In 2006, Government of France proposed to (a) Indo-German Solar Partnership for provide untied development assistance to India through transformation of energy generation through the French Agency for Development (AFD). In this regard, stronger utilization of solar energy. an inter-governmental Agreement was signed between (b) Indo-German Energy Forum: Green Energy the two Governments on 25.01.2008 during the State visit Corridors for financing transmission of French President Mr. Nicholas Sarkozy to India. infrastructure for integrating additional 12.5.3 AFD has been entrusted with a strategic mandate renewable energy capacities into the grid tailored to the Indian Government's priorities. It is and ensuring grid stability. implemented through three main focuses for cooperation: (c) Sustainability Development to address the Promote sustainable and integrated urban development; challenges and transform cities into Encourage energy efficiency and renewable energy sustainable living environment. The Smart development; Conserve the country's biodiversity and City Mission envisages providing green, natural resources. 58Department of Economic Affairs I 12.5.4 Since 2008, total net cumulated funding by AFD 12.7.2 Since 2014, the financial component of amounts to EUR 2,102 million (equiv. to more than 16,800 development assistance from EU was discontinued, cr INR), including a 200 million EUR COVID response however technical cooperation and exchange of best loan signed in June 2020. These funding were provided practices remains active in three lines (i) in areas of through ODA- compliant loans, on a sovereign and non- mutual interest (ii) in areas relevant to the Sustainable sovereign basis. On an average AFD makes annual Development Goals with civil society organizations and commitment of Euro 250 million. Major areas of ongoing (iii) at a regional level to address global challenges. At cooperation are in the field of: present, there is one technical assistance project viz (i) Support to Renewable Energy, Clean Technologies and a) Cooperation in the field of public transport Energy Efficiency in India whose implementation period sector; and execution period has recently been extended from b) Smart City Mission and September 30, 2020 to January 2021 by the European c) Water and environment sector. Commission. 12.5.5 In addition to the loans it allocates in India, AFD 12.8 European Investment Bank (EIB) can set up technical assistance programs which aim to 12.8.1 The European Investment bank is the European build the expertise of its counterparties. AFD benefits from Union's financing institution which was established in a close partnership with the European Union for this 1958 under the treaty of Rome (1957) to provide financing purpose in the context of fund delegations. At present for capital investment. The members of the EIB are the there are 9 ongoing loans of AFD, both sovereign and member States of the European Union, who have all non-sovereign loans under the Development subscribed to the Bank's capital. Outside the European Cooperation. Union, EIB financing operations are conducted principally 12.5.6 French Government also provides technical from the Bank's own resource but also, under mandate, assistance in the form of FASEP facility Scheme. FASEP from Union or Member States' budgetary resources. facility is managed by the Treasury and Economic Policy Under these arrangements, the EIB's funds are utilized General Directorate of the French Ministry of Economy, to finance investments in countries signatory to Finance and Industry. Under this facility, grants are Cooperation Agreement with the EU. provided to finance technical cooperation in the area of 12.8.2 EIB's activities in India emanate from the Joint infrastructure projects (water, sanitation, solid waste, Action Plan (JAP) of the Strategic Partnership between environment, transport, energy). the EU and India. EIB intends to increase its lending 12.6 Bilateral Development cooperation with activities focusing mainly on environmental sustainability Republic of Korea: and large infrastructure project through FDI, transfer of technology and know-how. EIB investments in India are 12.6.1 In the Joint Statement for Special Partnership governed by the Framework Agreement for Financial signed during the Prime Minister's visit to Republic of Cooperation. This agreement was signed between India Korea (RoK) during May 18-19, 2015, it was agreed to and EIB on 25th November 1993 by the Charge d' Affairs upgrade the bilateral relationship between the two of India at Brussels. The Framework Agreement was countries to a 'Special Strategic Partnership' and to initially valid for a period of three years and later it was expand it into a wide range of areas. Accordingly, RoK extended sine die vide amendment dated 24th November was accepted as bilateral partner for development 1998. cooperation during October, 2016. In the 5th India-Korea 12.8.3 EIB loan signed during 2020-2021 by DEA, Finance Minsters' Meeting held on June 14, 2017 in Government of India Seoul, an Economic Development Cooperation Fund (EDCF) Agreement was signed between the two 12.8.3.1 DEA signed Finance Contracts for the first Governments for US$ 1 billion Official Development tranche of loan of Euro 200 million and second tranche Assistance (ODA) to India. Two projects, viz., (i) Mumbai- of Euro 150 million for Kanpur Metro Rail Project with Nagpur Super Communication Expressway ITS Project; European Investment Bank on 31st August, 2020 and and (ii) Redevelopment of Bandra (E) Government Colony 28/29 December 2020 respectively. Project are under consideration for external funding 12.9 Bilateral Development Cooperation with through EDCF. United Kingdom 12.7 Development Cooperation with European 12.9.1 The United Kingdom (UK) has been providing Union (EU) development assistance to India since 1958. The 12.7.1 The European Union (EU) provides development assistance from the UK, through its Department for assistance (financial/technical) to India in the form of International Development (DFID), flows to mutually Grants. The priority areas include environment, public agreed government projects and programmes in the form health and education. of financial and technical assistance. The Development 59Annual Report 2020-2021 assistance is received mainly for achieving the development projects in host countries. Since 1992, the Sustainable Development Goals (SDGs). Presently, U.S. Trade and Development Agency has supported over Odisha, Madhya Pradesh and Bihar are the three focus 100 priority development projects in India with public and states of DFID. private sector sponsors. During the year 2020, two project proposals of technical assistance worth total US $2 million 12.9.2 With effect from January 2016, all new from USTDA for assistance in sectors of infrastructure development cooperation programmes by the UK and energy were approved. Government have been either Technical Assistance (TA) programmes focused on sharing skills and expertise, or C. Lines of Credit extended by Government of India in investments in private sector under PSDI projects under IDEAS and CFS focused on helping the poor. 12.11 Lines of Credit (LoCs) extended to developing 12.9.3 With effect from September 2, 2020, the UK side countries under Indian Development and has informed that the Foreign and Commonwealth Office Economic Assistance Scheme (IDEAS). (FCO) and the Department for International Development 12. 11.1 Lines of Credit (LoCs) form an important (DfID) have ceased to exist. The Foreign, Commonwealth component of India's diplomatic strategy and have been and Development Office (FCDO) will take on responsibility very useful in generating goodwill and building long term for Memorandums of Understanding and other contracts partnerships. GoI extends Lines of Credit to Developing agreed by either the Foreign and Commonwealth Office African and Non-African Countries through Indian or the Department for International Development. Development and Economic Assistance Scheme 12.10 Bilateral Development Cooperation with USA (IDEAS). This Scheme was initially known as "India Development Initiative" (IDI) and flows from the 12.10.1U.S. Agency for International Development announcement made by the Finance Minister in the Union (USAID) Budget for FY 2003-04. GoI has been extending Lines 12.10.1.1 The United States of America bilateral of Credit to developing countries under IDEA Scheme development assistance to India started in 1951 and it is since 2005-06. Initially proposed to be operated for five mainly administered through the USAID. Since its years from 2005-06 to 2009-10, the scheme was granted commencement, USAID has provided economic first extension in 2010 from 2010-11 to 2014-15. Second assistance of US $17 billion (approx.) to India in various extension to the scheme has been granted in 2015 for sectors for over 555 projects. Currently, following seven another five years i.e. 2015-16 to 2019-2020, with revised projects are being implemented by USAID in partnership set of guidelines with a view to improve efficiency and with GOI for which US $ 70 million has been committed make the system robust and transparent. The rate of during this year: interest and tenor offered to developing countries has also been made more attractive. i. Partnership Agreement for Agri. & Food Security Program; 12.11. 2 Under the IDEA Scheme, MEA selects specific projects keeping in view diplomatic considerations and ii. Partnership Agreement for Sustainable requests received from various developing countries. The Forests and Climate Adaptation Program; proposals are discussed and deliberated upon by a iii. Partnership Agreement for Water, Sanitation Standing Committee comprising officers of MEA, DEA and Hygiene (WASH); and Export-Import Bank of India. After obtaining the approval of External Affairs Minister, MEA recommends iv. Partnership Agreement for Renewable Energy the proposal to DEA for approval of Finance Minister. Technology Commercialization & Innovation; DEA, thereafter, issues a formal letter conveying approval v. Partnership Agreement for Health Project; of the Line of Credit. vi. Disaster Management Support Project; and 12.11. 3 LoCs are being operated through Export-Import vii. Partnership Agreement for the Energy Bank of India, which raises resources from the market Efficiency Technology Commercialization and provides LoCs to recipient Governments at and Innovation Project. concessional rates. GoI backs the LoCs through a Deed of Guarantee in favour of the lending bank to guard against 12.10.1.2 USAID also contributed a total of 200 any default by the borrowing Government in payment of ventilators under the health agreement to support India's interest and principal to the lending bank. GoI also extends fight against COVID-19. Interest Equalization Support (IES) to the lending bank for 12.10.2United States Trade and Development Agency enabling it to lend on concessional terms. (USTDA) 12.11.4 As on November 30, 2020, 311 LOCs have been 12.10.2.1 USTDA promotes economic growth in emerging extended to 64 countries for an amount of USD 31.55 economies by facilitating the participation of U.S. billion. Out of this, value of contracts covered under the businesses in the planning and execution of priority LOC by EXIM Bank is USD 10.62 billion and 60Department of Economic Affairs I disbursements made are USD 8.23 billion. During first dialogues have been held and the 10th EFD was held in three quarters of FY 2020-21(i.e. April 01, 2020 to virtual format on 28.10.2020. The Dialogue covered December 03, 2020), 5 LoCs worth USD 311.746 million sharing of experiences on corona virus response, have been extended to African Countries and 7 LoCs discussions on issues related to international tax agenda, worth USD 1448.00 million have been extended to Non- financial services co-operation with special emphasis on African Countries, details of which are as Annexure-I. FINTECH and GIFT City, promotion of Sustainable Finance with focus on green finance, etc. 12.12 Lines of Credit (LoCs) extended under Concessional Financing Scheme (CFS) 12.13.1.2 During the recently held 10th India-UK EFD on 28.10.2020, it was decided to establish an annual 12.12.1 The Concessional Financing Scheme was India-UK Financial Market Dialogue and a bilateral India- introduced in September 2015 after obtaining the approval UK Sustainable Finance Forum. of CCEA to support Indian companies bidding for strategically important infrastructure projects abroad. The 12.13.2 India-Korea Working Group Meeting: guidelines on CFS were revised on 10-08-2018 for the 12.13.2.1 India-Korea Working Group Meeting (WGM) period from 2018-2023. serves as a platform for discussing all the issues 12.12.2 Under the Scheme, MEA selects the specific pertaining to the financial package offered by Republic projects keeping in view strategic interest of India and of Korea and progress of candidate projects etc. The 7th sends the same to Department of Economic Affairs India-Korea WGM was held virtually on September 24, (DEA). The strategic importance of a project to deserve 2020 under the co-chairmanship of Additional Secretary, financing under this Scheme, is decided, on a case-to- DEA from Indian side and Director, Ministry of Economy case basis, by a Committee chaired by Secretary (DEA) and Finance from Korean side. and with members from Department of Expenditure, 12.13.3 India-Australia Economic Policy Dialogue Ministry of External Affairs, Department for Promotion of Industry and Internal Trade (DPIIT), Department of 12.13.3.1 India-Australia Economic Policy Dialogue was Commerce, Department of Financial Services and established in the year 2008, set-up at level of Joint Ministry of Home Affairs. The Deputy National Security Secretary, is an annual feature, hosted by both countries Adviser is also a member of this Committee. Once on alternate years. So far, nine dialogues have been approved by the Committee, DEA issues a formal letter held between India- Australia. The last dialogue between to EXIM Bank conveying approval for financing of the India-Australia was held in virtual format on 04 November project under CFS. 2020. The Indian side was led by Additional Secretary, DEA and the Australian side by Division Head, 12.12.3 The Scheme is being operated through the International Economic and Security Division, Australian Export-Import Bank of India, which raises resources from Treasury. The topics namely, macroeconomics the market to provide concessional finance. GoI provides development with respect of Indian and Australian counter guarantee and interest equalization support of Economic Outlook, International Cooperation and areas 2% to the EXIM Bank. of mutual cooperation were discussed. 12.12.4 Till date, only one Project, i.e., 2X660 MW 12.13.4 Indo-German Finance Ministries Senior Maitree Super Thermal Power Project of US$ 1.6 billion Officials' Meeting in Rampal, Bangladesh has been approved under the CFS . The project is being implemented by Bangladesh 12.13.4.1 Indo-German Finance Ministries Senior India Friendship Power Company Pvt. Ltd.(BIFPCL), a Officials' Meeting is held annually between the two joint venture of NTPC Ltd. and Bangladesh Power Finance Ministries of India and Germany for discussing Development Board. the economic situation in both the countries. The meeting was resumed in 2019 after a gap of six years. The 14th C. Economic Dialogues and Forums Indo-German Finance Ministries Senior Officials' meeting 12.13 During the year 2020-21, following dialogues/ was held through virtual mode on 23rd November 2020. meetings were held in the virtual format due to COVID Topics on current economic and financial situation in India, pandemic: Germany and the EU particularly the impact of the pandemic as well as the success of counter measures, 12.13.1 India-UK Economic & Financial Dialogue G20 matters, Digital taxation, banking and insurance 12.13.1.1 An agreement was signed between India and issues, SDR allocation, were discussed in the meeting. UK on Feb 05, 2005 establishing 'Indo-British Economic 12.13.5International Platform on Sustainable Finance & Financial Dialogue' at the Ministerial level to be held on alternate basis between India and UK. India-UK 12.13.5.1 International Platform on Sustainable Finance Economic and Financial dialogue (EFD) is co-chaired by (IPSF) is an initiative taken by the European Commission Finance Minister of India and Chancellor of Exchequer, in the year 2019 and was formally launched on 18th UK. The first dialogue was held in 2007. So far 10 October 2019 at the International Monetary Fund 61Annual Report 2020-2021 Headquarters, Washington DC. India joined the IPSF as represents the South Asian Constituency, which includes a founding member along with Argentina, Chile, China, other South Asian countries, Bangladesh, Bhutan, Canada, Kenya, Morocco and the European Union. In Maldives, Nepal and Sri Lanka, in the Council of GEF. 2020, Indonesia, Japan, New Zealand, Norway, Senegal, India in GEF is represented by DEA as Political Focal Singapore and Switzerland joined the IPSF. The IPSF Point (PFP) and by Ministry of Environment, Forest and includes, as observers: the Coalition of Finance Ministers Climate Change (MoEFCC) as Operational Focal Point for Climate Action, the European Bank for Reconstruction (OFP). The PFP deals with the financing framework of and Development, the European Investment Bank, the GEF as per which the funds are contributed by the International Organisation of Securities Commissions, the member countries to the GEF kitty. The OFP coordinates Network for Greening the Financial System, the all GEF-related activities within a country. The OFP Organisation for Economic Co-operation and reviews project ideas, checks against eligibility criteria Development, European Development Finance and ensures that new project ideas will not duplicate an Institutions, the United Nations Environment Programme existing project. - Finance Initiative, and the International Monetary Fund. 12.15.3 India is a donor as well as recipient member of 12.13.5.2 IPSF would act as a place of exchange for GEF. Being the Political Focal Point for GEF, DEA decided best practices on Sustainable Finance Initiatives. IPSF voluntary contribution to GEF. India has contributed will enable India to participate in the process of global around USD 78 million to GEF since its inception in 1991. deliberations on the evolution of Sustainable Finance as This includes committed voluntary contribution of USD a major line of financing for the future in India, in the 15 million under the current replenishment cycle i.e., GEF- crucial climate change management sector. 7 that runs from 2018-2022. Under GEF-7, India has received a total allocation of USD 85.62 million. Currently, D. UNDP and Sustainable Finance 21 projects are ongoing. 11 more projects have been 12.14 United Nations Development Programme approved; and are in different stages of preparation. 12.14.1 UNDP is an agency of the United Nations 12.16 India-UK Sustainable Finance Forum working in the areas of human development, systems 12.16.1India and UK have agreed during 10th India-UK and institutional strengthening, inclusive growth and Economic and Financial Dialogue to establish a bilateral sustainable livelihoods, sustainable energy, environment Sustainable Finance Forum to drive forward deeper and resilience. UNDP is led by the Executive Board which cooperation between the UK and India on sustainable provides inter-governmental support to and supervision finance. The Forum would draw members from finance of UNDP activities. Currently, India is a member of the ministries/treasury and other important stakeholders from Board where the Permanent Representative of India to both sides. the United Nations represents India. India's annual contribution to the UNDP has been to the extent of US$ D. Short-term Foreign Trainings 4.5 million. Besides this contribution, India pays the local 12.17 Foreign Training Courses/Programmes office expense to UNDP towards Government Local Office Contributions. DEA is the point of interface between 12.17.1 Department of Economic Affairs is the nodal UNDP and any other national or sub-national authorities point for administering short term foreign training courses and agencies in India. DEA decides the amount of offered by some bilateral partner countries under bilateral voluntary contribution to UNDP and makes local office cooperation programme and some multilateral agencies. contribution. All projects implemented by UNDP in India These courses are intended for capacity building of the are cleared by DEA. officers in various spheres/fields of activities including sectors such as Education, Health, Water Resources, 12.15 Global Environment Facility Disaster Management, Governance, Natural Resources 12.15.1 It was established on the eve of the 1992 Rio and Energy, Agriculture, Nature Conservation, Earth Summit to help tackle earth's most pressing Environmental Management, etc. Nominations are invited environmental problems. GEF's Secretariat is based in from all Ministries /Departments, State Governments/ Washington D.C. GEF provides grants for projects related Union Territories. The nominations are screened by a to biodiversity, climate change, chemical waste, Selection Committee in DEA and thereafter international waters and land degradation. The GEF recommended to the sponsoring Government/Agency for unites 184 countries in partnership with international acceptance. During 2020-21 (upto November, 2020) DEA institutions, civil society organizations (CSOs), and the has processed trainings for 59 Short Term Foreign private sector to address global environmental issues Training Programmes (less than four weeks) from while supporting national sustainable development Singapore Cooperation Programme Training Award initiatives. (SCPTA), Japan International Cooperation Agency (JICA) 12.15.2 India is a founder member of GEF. The and Malaysian Government as received and suitable Executive Director of India in the World Bank Group applicants have been recommended for the purpose. 62Department of Economic Affairs I Annexure-I LoCs extended to various African & Non-African countries during the Financial Year FY 2020-21(i.e. April 01, 2020 to December 03, 2020) Sl. No. Country Amount Purpose Date of (in USD million) communication from DEA African Countries 1. Eswatini 108.28 For construction of a new Parliament Building in Eswatini. 3-Apr-20 2. Guinea 20.506 For construction & up-gradation of Regional Hospitals in Kankan & Nzerekore. 21-May-20 3. Sierra Leone 15.00 Rehabilitation of potable water facilities in four communities. 22-May-20 4. Nigeria 74.96 For two Solar projects: (i) 50 MW Solar Power Plant in Bauchi, GoN (USD 66.60 million); (ii) Solar PV Renewable Energy Micro utility (REMU) in six political zones of Nigeria (USD 8.36 million). 20-Jul-20 5. Kenya 93.00 For Power Transmission Lines, Substations and associated infrastructure in Kenya. 13-Oct-20 Sub-Total (A) 311.746 Non-African Countries 1. Maldives 400.00 For undertaking the Greater Male Connectivity Project. 17-Sep-20 2. Uzbekistan 448.00 For Social Infrastructure and other development projects. 22-Sep-20 3. Sri Lanka 100.00 Projects in Solar Energy Sector 31-Jul-20 4. Vietnam 180.00 Procurement of 4 Offshore Petrol Vessels(OPV) for Vietnam Coast Guard; 29-Oct-20 5. Vietnam 120.00 Procurement of High Speed Guard Boats for Vietnam Border Guard; 29-Oct-20 6. Vietnam 50.00 Procurement of 10 units of submarine batteries. 29-Oct-20 7. Vietnam 150.00 Upgrade of the Vietnam People’s Navy’s Anti-Submarine Warships 159A and159AE (Petya Class ships) 29-Oct-20 Sub-Total (B) 1448.00 Total (A+B) 1759.746 63Annual Report 2020-2021 13. Integrated Finance Division Services. This involves finalizing the Budget Estimates/ the Revised Estimates/estimating final 13.1 The Division is responsible for the following requirements/ surrender of savings, re- functions: appropriations and vetting of Head wise (i) Tendering financial advice & concurrence to Appropriation Accounts. proposals involving expenditure in respect of DEA (iv) Coordination, Compilation, Printing and laying of the and DFS as well as their attached and subordinate 'Detailed Demand for Grants (DDG)' and 'Output offices e.g. Security Appellate Tribunal (SAT)/ Outcome Monitoring Framework(OOMF)' for National Savings Institute/G-20 Secretariat/Fifteenth Central Sector and Centrally Sponsored Finance Commission/Office of Special Court, Schemes costing less than `500.00 crore of the Mumbai/ Office of Custodian/ Debt Recovery Ministry of Finance in Parliament. Tribunals, Pension Fund Regulatory and Development Authority and Office of Court (v) Coordination of all matters relating to the Liquidator, Kolkata. examination of the DDG by the Parliamentary Standing Committee on Finance. (ii) Exercising expenditure control and management, ensuring rationalization of expenditure and (vi) Monitoring of pending PAC/C&AG Audit Paras. compliance of economy measures in accordance with the instructions of the Department of (vii) Coordination, Compilation, Printing and Presentation Expenditure including regular monitoring of of Statements to be made by Hon'ble Finance Minister expenditure through monthly/quarterly reviews and as required in terms of Rule 73- A, in Lok Sabha / submission of reports to the concerned Secretaries. Rajya Sabha in respect of implementation of Reports of the Standing Committee. (iii) The Division also administers two Detailed Demands for Grants i.e. Grant No.29-Department of Economic (viii) Budgetary position regarding the Grants Affairs and Grant No.31-Department of Financial administered by the Division is given below: 13.2 Budgetary allocation of the Grants (on net basis) ( ` in crore) Grant BE 2020-21 RE 2020-21 BE 2021-22 29- Department of Economic Affairs Revenue 3262.57 5738.60 4520.78 Capital 26045.70 17942.79 56607.40 Total 29308.27 23681.39 61128.18 31- Department of Financial Services Revenue 1474.96 12055.57 3710.77 Capital 9650.04 13650.01 25800.02 Total 11125.00 25705.58 29510.79 The best practices followed for effective expenditure (c) Strengthening of internal control mechanism by control includes: getting internal audits undertaken. (a) Expenditure progress reviewed quarterly with Major (d) Monthly monitoring of Major Schemes/Programmes Head/Scheme wise details with concerned of Department included in the Outcome Budget. Secretaries. (e) Regular and close monitoring resulted in finalization (b) The Major Head wise and Scheme wise expenditure of substantial number of cases of Action Taken progress as compared to BE figures, posted on the Notes (ATNs) in respect of C&AG audit para during web-site of the Ministry of Finance. the year. 64Department of Economic Affairs I PARAS OF AUDIT REPORTS OF C&AG - Details of ATNs Audit paras pending with different Departments and their disposal status as on 12.01.2021 -– Name of the Ministry/Department : Ministry of Finance (Department of Economic Affairs) Sl. No & Year No. of Paras/PA Details of the Paras/PA reports on which ATNs are pending. No. of the reports on which No of ATN not No of ATNs Sent No of ATNs which Report ATNs have been sent by the but returned with have been finally submitted to PAC Ministry even observations and vetted by audit but after vetting by Audit for the first time Audit is awaiting their have not been re-submission submitted by the by the Ministry. Ministry to PAC 1. 44 of 2017 9 ... 1 ... 2. 2 of 2019 5 ... 1 ... 3. 4 of 2020 ... 18 ... ... Summary of Important Audit Observations:- of Res which indicated an unrealistic assessment of financial resources. (Para 1.2 .1) Report No. 4 of 2020 - Union Government (Civil)- Accounts of the Union Government for the year  During 2018-19, the Union Government mobilized 2018-19. `1,11,98,260 crore. Of this, 81 per cent was deployed for committed expenditure viz. repayment of debt; Tabled in the Parliament on: 23rd September 2020 discharge of Public Account liabilities; interest This Report of the Comptroller and Auditor General of payments and mandatory transfer of tax receipts to India (CAG) on the accounts of the Union Government States. After Grants-in-aid to States/ UTs and for 2018-19, analyses the Union Government Finance accounting for the closing cash balance, only 16 per Accounts (UGFA) and the Appropriation Accounts of the cent of the resources were available for all other Union Civil Ministries; Defence Services; Postal Services expenditure of the Government of India. and Railways. The report gives an overview on the Union (Para 1.2 .3) Government Finances for 2018-19 and consists of  In comparison to previous year i.e. 2017-18, total observations of the CAG on the UGFA and on Union receipts of the Union Government grew by three per Government Appropriation Accounts for the year. cent; non-debt receipts by 3.75 per cent and debt Chapter 1: Overview of Union Finances receipts by 3.12 per cent. Tax Revenue Receipts and Non-Tax Revenue Receipts increased by six and ten  Actual revenue receipts fell short of revised estimates per cent respectively, over the previous year. The by `1,86,382 crore (9.35 per cent). As a result of this largest contributor to the increase in non-tax revenues shortfall, despite compression of revenue expenditure was 'Dividend and Profits'. Capital receipts however, as compared to revised estimates (RE) by `1,42,942 fell by five per cent. (Para 1.2 .4) crore (5.94 per cent), the actual revenue deficit was higher than anticipated by `43,440 crore. This  During 2018-19 as compared to FY 2017-18, total combined with higher shortfall in recoveries of loans expenditure increased by four per cent (`3,60,765 and advances compared with the shortfall in crore). Of this; revenue expenditure increased by 5.67 disbursement, resulted in actual fiscal deficit being per cent and capital expenditure by 22.89 per cent. higher than anticipated by `15,609 crore. Audit The increase in capital expenditure was largely on analysis showed that though there were clear trends account of bank "recapitalization". (Para 1.2 .4) indicating shortfalls in revenue and expenditure as at end of December 2018, these were not factored  The Union Government's total investment in Statutory in while framing REs. As a result, Actuals with respect Corporations Government Companies, Co-operative to both non-debt receipts and expenditure fell short Banks and Societies etc., increased by `1,93,150 65Annual Report 2020-2021 crore during 2018-19. During the same year, the and debits separately, resulting in significant Union Government received `72,620 crore from understatement of suspense balances both at Major disinvestment. (Para 1.3 .1 and 1.3.2) and Minor Head levels. (Para 2.2 .3)  Total Public Debt of Union Government grew from `59,69,968 crore as on 31 March 2017 to `66,51,365 Issues relating to accuracy of accounts. crore (11.41 per cent) as on 31 March 2018 and  Through a Journal Entry after the close of the year, further to `73,44,902 crore (10.42 per cent) as on 31 Accounting Authorities transferred, `10,250 crore March 2019. In addition as on 31 March 2019, the from the Central Road Fund, and booked this, in total outstanding Guarantees given by the Union violation of accounting procedure, as non-tax Government was `4,47,626 crore. receipts. (Para 1.3 .3 and 1.3.4) (Para 2.3 .1)  Outstanding Public Account liabilities as on 31 March  There was an aggregate net balance of 2019, reflected in the UGFA stood at `8,82,119 crore `56,980.28crore (Debit) under Suspense heads as as against the actual Public Account liabilities of on 31 March 2019. In addition there was a net `318,12,015 crores as on 31 March 2019 (`15,09,505 outstanding balance of `42,104 crore (Credit) under crore as Small Savings and Provident Fund and the Major Heads relating to 'Cheques and Bills'. `3,02,510 crore as other obligations). Continued existence of unadjusted balances under (Para 1.3 .5) suspense heads distorts the depiction of Government receipts and expenditure. Chapter-2: Observations of Finance Accounts Issues (Para 2.3 .2) of transparency and disclosures  Adverse balances are those which are erroneously  There was persistent use of Minor Head 800"Other accounted as credit instead of debit and vice versa. Expenditure" / "Other Receipts" resulting in lack of There were 69 cases of adverse balances amounting transparency in the UGFA. In respect of 11 to `20,710 crore in the UGFA of 2018-19. Of these, expenditure Major Heads, expenditure of `7,428 40 cases amounting to `8,138 crore have remained crore, constituting more than 50 per cent of the total unresolved for over five years. expenditure booked under these heads, was (Para 2.3 .3) accounted for under Minor Head 800. In 24 receipt Major Heads, receipts amounting to `13,678 crore, Issues of Data Integrity and Completeness of UGFA representing over 50 per cent of the total receipts Statements booked under these heads, were booked under Minor Head 800. Wrong booking of tax revenue of  Monitoring and oversight over guarantees by Ministry `3,531 crore under Minor Head 800 despite the of Finance was inadequate and there were existence of correct Minor Heads, impacted the discrepancies in some cases between the records calculation of net proceeds and their assignment to of Ministries/Departments and data included in UGFA. States. There was short-receipt of guarantee fee of `1,627 (Para 2.2 .1) crore in two Ministries. (Para 2.4 .1)  Critical information related to total Public Account liabilities; External Debt at current exchange rates;  The information contained in the Annual Accounts of Revenue Deficit and difference with RBI's closing five entities and the information contained in the cash balance have been persistently disclosed for UGFA on the equity investment of Government in years through footnotes in the UGFA rather than in these 5 entities, did not tally. The information on 73 the body, affecting the transparency of the accounts. entities contained in the UGFA was either incomplete Information on significant transactions were given as or not updated. footnotes, which were brief and cryptic. (Para 2.4 .2) (Para 2.2 .2)  Against the total amount of loans including arrears  UGFA depicts only the net of the credit/debit balances of interest, of `2,97,077 crore outstanding against under suspense heads instead of showing the credits State/UT Governments and other entities as on 31 66Department of Economic Affairs I March 2019, repayment of `57,244 crore was in Chapter 3: Observations on Appropriation Accounts arrears.  During the year 2018-19, there was excess (Para 2.4 .3) disbursement of `5,204.56 crore over authorization involving two Grants of Defence Services, one grant  With respect to IGST, during 2018-19, a sum of of Union Civil Ministries and one Grant of the `15,001 crore was erroneously transferred and Railways. These excess disbursements require accounted as state's share of net proceeds of IGST regularisation under Article 115(1)(b) of the instead of being apportioned between Centre and Constitution. States. In addition, a balance of `13,944 crore was (Para 3.2.1) left un-apportioned under the head and retained in CFI, even though the amended IGST Act now  Savings of more than `100 crore aggregating provides for ad-hoc apportionment of IGST. As a `4,69,669.55 crore had occurred in 79 segments of 57 Grants / Appropriations. Significant savings result States, received overall less funds on account totaling to `1,31,073.18 crore were on account of of IGST. regulation of expenditure comprising inter-alia (Para 2.4 .4) withdrawal of food subsidy to FCI of `69,889.71 crore; Issues relating to accounting of Cesses and Levies short transfer of GST Compensation Cess to GST Compensation Fund of `35,725 crore and reversal  The Union Government collected `2,74,592 crore of expenditure on Defence Pension of `5,000 crore. from 35 cesses/levies in 2018-19. Under the scheme, In addition, savings of `43,104.51 crore indicate such cesses and levies are required to be first shortfalls in performance in schemes and activities transferred to designated Reserve Funds and utilised and of `1,43,999.12 crore show unrealistic budget for the specific purposes intended by Parliament. formulation. (Para 3.2.2) However, only `1,64,322 crore was transferred to Reserve Funds/Boards and the rest was retained in  Out of savings of `4,52,111.82 crore under Civil CFI. In addition "Social Welfare Surcharge" on Grants/Appropriations, 39.07 per cent (`1,76,630.70 Customs amounting to `8,871.19 crore was levied crore) were not surrendered, but was allowed to but not dedicated fund for the same was envisaged. lapse. In addition, `67,825.68 crore relating to 17 Civil Non-creation/ non-operation of Reserve Funds Grants/ Appropriations, was surrendered on the last makes it difficult to ensure that cesses and levies day of the year i.e 31 March 2019. (Para 3.5) have been utilised for the specific purposes intended by the Parliament.  In violation of basic accounting principles, the (Para 2.5) Accounting authorities did not book expenditure of approximately `14,000 crore under Grant No. 22 -  During the year, GST Compensation Cess of `40,806 'Defence Pension', and instead, continued to be held crore was short-credited to the related Reserve Fund; under 'Suspense'. In addition expenditure of `5,000 `10,157 crore of the Road and Infrastructure Cess crore booked under Defence Pension head was collected during the year was neither transferred to transferred to Suspense Head through Transfer Entry the related Reserve Fund nor utilised for the purpose in March 2019. for which the cess was collected. In addition, (Para 3.7 and 3.13) `1,24,399 crore representing the Cess on Crude Oil  Article 114(3) of the Constitution of India provides collected in the last decade had not been transferred that no money shall be withdrawn from the to the designated Reserve Fund (Oil Industry Consolidated Fund of India except under Development Board) and was retained in CFI. Other appropriation made by law. In violation of this short transfers to designated reserve funds included provision, the Central Board of Direct Taxes (CBDT) `2,123 crore in the case of Universal Service Levy incurred expenditure of `20,566.33 crore during and `79 crore in the case of National Mineral Trust 2018-19 on interest on refunds without the Levy. authorisation of Parliament. (Para 2.5) (Para 3.14) 67Annual Report 2020-2021 14. Currency & Coin Division celebrate the occasion of 100th year of Lucknow University, 125th Birth Anniversary Year of Netaji Subhas 1. The Currency and Coin Division is concerned with Chandra Bose and 125th Birth Anniversary of Srimat policy matters relating to production and designs of Swami Pranavanandaji Maharaj. banknotes and coins, introduction of new banknotes and 2.3 Draft Report and Bill on Cryptocurrencies: For coins, demonetisation of any existing banknotes and examining the issues of cryptocurrencies, the coins, currency and coin related legislations, etc. Further, Government has constituted an Inter-Ministerial the matter relating to security features of Banknotes are Committee (IMC) under the Chairmanship of Secy (EA) handled by C&C Division. Security Printing and Minting with Members of MeiTY, SEBI and RBI. The Report of Corporation of India Ltd. (SPMCIL) is under the administrative control of this Division. In recent years, the IMC on VCs has since been submitted by its Members, but is awaiting approval of the Government. certain issues with regard to legislation on virtual currencies and block chain technology are also looked The Report and Banning of Crypto currency & Regulation after by this Division. of Official Digital Currency Bill, 2019 is being examined by the Government through inter-ministerial consultation. 2. Over the years, this Division has been making signification contribution in terms of appropriate availability 14.1 Currency Section of currency notes and coins for circulation, thereby helping 14.1.1 Currency Section deals with all policy issues and in the growth and development of our economy. Some of matters relating to design, form and material of currency the major achievements of this Department during the notes/banknotes including security features, production financial year 2020-21 are given below: planning of printing of currency notes and other security 2.1 New security features of the banknotes: In order documents. Others include currency related legislation, to stay ahead of the counterfeiting, Government of India, indigenization of bank notes production items in respect in consultation with RBI, has initiated the process for of supply of material of printing of bank notes and other introduction of new security features in Indian banknotes. security products, expansion, up-gradation and The Government has approved the recommendations of modernization of Presses, Paper Mills, Ink factory, Postal RBl's Central Board on revised matrix of security features Stamp; Revenue Stamp, NJSP, Passports, fair price in bank notes in terms of the provisions of section 25 of determination of Bank Notes and Postal Stamps, etc. the RBI Act, 1934. RBI has initiated process for 14.1.2 The production of banknotes by BRBNMPL and introduction of this revised matrix of security features. SPMCIL is strictly and regularly monitored by this Section. This revised matrix of new security features is expected The Meetings of Strategic Planning Group (SPG) and to render the currency notes practically counterfeit free. Production Planning Committee (PPC) are also held 2.2 Commemorative Coins: During the last 1 year, regularly under the Chairmanship of Secretary (EA) and the Government issued Gazette Notifications for release Sr. Economic Adviser (C&C) respectively. During 2020- of 5 Commemorative Coins viz. to mark the occasion of 21, several meetings of SPG and PPC were held to review 125th departure anniversary of Shri Shyamacharan the indent and production of banknotes. The cumulative Lahiree Mahashaya, 75th Anniversary of Food and production of notes by BRBNMPL and SPMCIL during Agriculture orgainsation and Commemorative Coin to 2020-21 up to 12.12.2020 is given below: Total indent allocated Cumulative production Press for Remaining Production 01.04.2020 to 12.12.2020 2020-21 for 2020-21 Quantity in million pieces BRBNMPL 13575 10075.9 3499.1 SPMCIL 9084 4640 4444 Total 22659 14715.9 7943.1 Face value SPMCIL 251734 107767 143967 BRBNMPL 365300 274226.1 91073.9 Total 617034 381993.1 235040.9 Source: BRBNMPL&SPMCIL 68Department of Economic Affairs I 14.1.3 Notes in Circulation (NICs): The trends in NICs 14.2.4 The Guidelines being followed for issue of a are strictly monitored. The NICs at the time of commemorative coin is not static, but a dynamic one. Demonetization (4th November, 2016) were `17,74,200 Changes were made in the Guidelines to address crore. NIC as on 04.12.2020 was `27,46,809 crore. NICs emerging issues or incorporate new elements, which has risen by `4,97,885 crore as compared to NIC as on could not be foreseen in the past. The revision of 06.12.2019. Guidelines was also carried out on the basis of lessons 14.2 Coin Section learnt from our examination of proposals received. 14.2.1 The work profile of this section inter alia include 14.2.5 The Old Guidelines for issue of commemorative policy formulation regarding design, shape and size of coins/currency dated 29.03.1991 was revised on circulation coins including fixation of fair prices of coins, 06.01.2017 by making the Guidelines more specific to coins related legislations and issuance of coins but elaborate in nature. The Guidelines were further Commemorative Coins. Others include production revised on 25.02.2019 to incorporate a Proforma/Format planning of coins and determination of indent of coins. for submission of proposal for commemorative coin, as Like in the case of banknotes, the production and indent we received lots of proposals which were not as per our of coins is also regularly monitored by this section through Guidelines. The revision of the Guidelines was made on the Meetings of Strategic Planning Committee (SPC) and 27.03.2019 to incorporate "Commiserative Coins" viz. Production Planning Committee (PPC). Commemorative Coins to be issued on occasion to 14.2.2 Coins in Circulations (CICs): The trends in CICs express sympathy/grief/exhibit respect for the sacrifice. are also strictly monitored. As on 11.02.2021, the CICs The existing Guidelines have been revised on 29.09.2020 of `26,039.91 crore. CICs has risen to `492.14 crore as for issue of commemorative coins on eminent persons/ compared to CICs as on 11.02.2020. personalities/institutions/events/programmes/history, etc. 14.2.3 Guidelines and Costing Policy for that have a national or international nature and which Commemorative Coins: As per the Coinage Act, 2011, have made a lasting contribution or impact. The "commemorative coin" means any coin stamped by the contribution made by the individual/organisation/ Government or any other authority empowered by the programme/event should have transcended the barriers Government in this behalf to commemorate any specific of partisan politics, region, community, language or occasion or event and expressed in Indian currency. religion. However, on an occasion to express sympathy/ Accordingly, the Government issues commemorative grief/exhibit respect for the sacrifice, 'Commiserative coins to mark occasion of great personalities with unique, Coins' would be issued. durable and outstanding contribution towards society, etc. 14.2.6 Since 2014, the Government has issued many and to remember events which had great historical commemorative coins. The details of commemorative significance, as per Guidelines approved by the coins issued in 2020-21 are given below: Government. . COMMEMORATIVE COINS ISSUED BY GOVERNMENT OF INDIA IN 2020 SI. Name of Commemorative Coin Denomination Notification No. & No. Date 1. 125th departure anniversary of Shri `125 G.S. R. 506 (E) Shyamacharan Lahiree Mahashaya. Dated 17.08.2020 2. 75th Anniversary of Food and Agriculture `75 G.S.R.565 (E) orgainsation. Dated 17.09.2020 3. Commemorative Coin to celebrate the occasion ` 100 G.S.R. 727 (E) of 100th year of Lucknow University. Dated 18.11.2020 4. 125 th Birth Anniversary Year of Netaji Subhas `125 G.S.R. 37 (E) Chandra Bose Dated 20.1.2021 5. 125 th Birth Anniversary of Srimat Swami `100, ` 50, G.S.R. 41 (E) Pranavanandaji Maharaj `10 Dated 22.1.2021 14.2.7 Minting Capacity and Utilization: To meet the commemorative coins in the range of 5,00,000-7,00,000 indent of coins from RBI, the minting capacity of SPMCIL pcs per annum. Over last 5 years, on an average, SPMCIL was enhanced to 7750 mpcs in 2016-17 from 5954 mpcs manufactured approximately 1,50,000 commemorative in 2010-11. However, in recent years, there has been a coins and medallions (per annum) for fulfilling domestic glut of coins since 2016-17 owing to reverse flow of coins. demand. This leaves sufficient spare capacity for catering In case of commemorative coins, SPMCIL has a to global demand. combined installed capacity of manufacturing 69Annual Report 2020-2021 14.2.8 Policy for Costing of Commemorative Coins: In up the Bank Note Paper Mill India Private Limited the past, the Government through SPMCIL had been (BNPMIPL) in Mysuru, which manufactures Cylinder selling commemorative coins on the basis of 10% Profit mould VAT made Watermarked Bank Note (CWBN) Margin of the Total Cost Plus Postal Charges and paper required for banknote production, with a production Applicable GST Rate of the Total Cost. There was no capacity of 12,000 metric tonnes per annum. BRBNMPL, policy as such for costing of commemorative coins and as part of its concerted efforts for backwards integration recovery of actual costs plus profits. To bring more clarity with a view towards achieving self-sufficiency, has set on the costing of commemorative coins, the Government up an Ink Manufacturing unit (IMU) within its Mysuru Press has come out with a Policy for Costing of Commemorative premises. The captive unit has an installed capacity to Coins on 18.10.2019. This policy has been prepared in manufacture 1500MT of Offset, Intaglio, Numbering and consultation with SPMCIL. Colour Shift Intaglio Inks (CSII) per annum in two shift 14.2.9 New Series of Coins which are friendly to visually operations. The production of Offset, Intaglio and impaired people: This Department vide Gazette Numbering inks commenced from August 2018 and that notification dated 6th March 2019, has notified new series of CSII commenced from March 2019. The requirement coins of One Rupee, Two Rupees, Five Rupees, Ten of Offset, Intaglio, Numbering and CSII for the year 2019- Rupees and Twenty Rupees easily identifiable to the 20 onwards has been met by the BRBNMPL's in house visually impaired. Hon'ble Prime Minister on 7th March manufacturing unit. BRBNMPL is also supplying CSII to 2019 released the new series coins. These coins have the two currency printing presses of SPMCIL. Previously, been issued and circulated. CSII which is one of the security features, was being imported and therefore, setting up the ink manufacturing 14.2.10 The new prototypes of coins which are friendly unit at Mysuru is a significant step toward self-sufficiency to visually impaired people are minted through SPMCIL. ('AtmaNirbhar'). The difficulties being faced by visually impaired persons with the 2011 series of circulation coins include no definite Bank Note Paper Mill, Mysuru pattern of shape or size in this coin series for easy 14.4.1 As per the direction of MOF, GOI, Bank Note differentiation by visually challenged among different Paper Mill India Private Limited was incorporated as a denominations. The new features incorporated in the new 50:50 Joint Venture Company of SPMCIL and BRBNMPL series of coins include pattern of increasing size (i.e. in 2010, to manufacture of CWBN paper indigenously by diameter) from lower to higher denominations and weight establishing a paper mill at Mysuru with installed capacity in increasing order from lower to higher denomination. of 12000 MT per annum. The Paper Mill was The theme of new series coins is 'Agriculture', commissioned in the year 2016. represented with crop grains on the reverse side of the coins. RBI has commenced distribution of new design 14.4.2 Status of Implementation: The Company has coins over RBI counters and are supplying them to all successfully optimised is processes to manufacture RBI ROs and currency chests for wider distribution among banknote paper has produced 15874 MT of paper (132% public. of rated capacity) during 2019-20. The Company was 14.2.11 Other important Issues relating to coins: In able to meet the demand of CWBN paper of BRBNMPL recent years, mints and presses are diversifying their Mysore, BRBNMPL Salboni, CNP Nashik and BNP business across the globe from traditional trade of Dewas, thereby stopping import of paper until now. The circulation coins and banknotes to medals, medallions, Company has also been certified for the international numismatic coins, bullions, security papers and quality standards of ISO 9001:2015, ISO 14001:2015 and documents, security inks, etc. Accordingly, SPMCIL also ISO 45001:2018, and has been able to perform very needs to diversify its business activities to counter the efficiently producing international quality banknote paper uncertainty of the domestic demand for coins, banknotes with world-class productivity of 44MT/person/annum. The and security documents. Company has also implemented the ERP system and established its transparency in its operation. Bank Note Paper Mill India Private Limited (BNPMIPL) 14.3.1 BRBNMPL is a wholly owned subsidiary of 14.4.3 Plan of expansion: The Company has taken up Reserve Bank of India, which runs two banknote printing the upgradation/modification of machines for production presses in Mysuru and Salboni with a total capacity of of banknote paper with new security features in Indian printing 16 billion note pieces per year in two shift banknotes. As clarified and directed by the RBI, to meet operations. BRBNMPL along with a Security Printing and the future demand of CWBN paper, the Company has Minting Corporation of India Limited (SPMCIL) has set sought permission/No Objection of MEA, MOF, GOI, to 70Department of Economic Affairs I enhance domestic capacity of manufacturing banknote supplied by the four India Government Mints (IGMs) of paper by establishing a new paper mill to make India self- the Company at Mumbai, Kolkata, Hyderabad and reliant in currency paper. Noida. The Company has one Security Paper Mill (SPM) at Hoshangabad which manufactures Security Paper for 14.4.4 CSR Activity: As part of Corporate Social use by Currency / Security Presses. The Company also Responsibility, BNPM has been contributing in the areas has an Ink Factory at Dewas which manufactures Offset of rural education, women empowerment, rural health, Ink, UV Ink and Quickset Intaglio Ink for use by the skill development, supporting homeless aged people, presses of SPMCIL and BRBNMPL. eliminating malnutrition, art and culture, environment 14.5.4 As a company which is manufacturer of protection, physically challenged, Wild life conservation, instruments of faith, SPMCIL is inspired by its vision to Disaster relief, etc. The Company has earmarked `13 serve national priorities of producing state-of-the-art Crores under CSR expenditure until FY 2019-20, and has security products leveraging core competency and spent around `12 crores. building design capabilities. With the commitment to aid Security Printing and Minting Corporation of India the nation by manufacturing world class and highly Limited (SPMCIL) secured banknotes, coins and security documents, SPMCIL has almost 100 years of security printing 14.5.1 The Department of Economic Affairs is the experience and over two centuries of experience in the Administrative Department of SPMCIL and look into all field of minting. issues relating to appointment to Board Level posts in SPMCIL and Residual establishment matters of the nine 14.5.5 The Company had produced 9824 million pieces of the Bank Notes and supplied 8453 million pieces of Units of SPMCIL. Others include, SPMCIL Pension Fund Bank Notes to Reserve Bank of India (RBI) during the Trust; MoU with SPMCIL etc. year 2019-20. This is 6.28% lower than the production of 14.5.2 Security Printing and Minting Corporation of India 10482 million pieces of the Bank Notes during the year Ltd. (SPMCIL), a Miniratna Category-I, Schedule-'A' 2018-19 and this reduction in production is due to Central Public Sector Enterprise (CPSE) was lockdown declared by the Government of India to combat incorporated on 13th January 2006 to manage four India the outbreak of COVID-19 pandemic. Production of the Government Mints, two Currency Presses, two Security Bank Notes per employee has increased to 3.33 million Presses and one Security Paper Mill, which were earlier pieces in 2019-20 as against 3.29 million pieces achieved being managed by the Government of India (Ministry of during the last year 2018-19. The Company had produced Finance) directly. The Company is wholly owned by the 3282 million pieces of the Circulating Coins and supplied Central Government with Authorized Share Capital of 3169 million pieces of the Circulating Coins to RBI during `2500 crores and paid-up Share Capital of `987.50 crores the year 2019-20. This is 38.43% lower than the as on 31.03.2020. production of 5331 million pieces of Circulating Coins achieved during the last year 2018-19. Production of 14.5.3 The Reserve Bank of India (RBI) is the customer Coins per Employee has also decreased to 1.55 million for currency notes supplied by two Currency Presses of pieces in 2019-20 as against 2.24 million pieces achieved the Company, i.e. Bank Note Press (BNP), Dewas and in the last year 2018-19. The decrease in the production Currency Note Press (CNP), Nashik. The Ministry of of Circulating Coins is mainly due to huge reduction in External Affairs (MEA) and Ministry of Home Affairs the indent of Circulating Coins by RBI during the year (MHA) are customers for passports and visa stickers 2019-20. respectively and the State Governments are customers 14.5.6 The Company had produced 7010 Metric Ton for Non-Judicial Stamp Papers and allied stamps and (MT) of Security Paper and supplied 6765 MT of Security the Postal Department is the customer for postal Paper to the printing presses during the year 2019-20. stationery, stamps, etc. supplied by the two Security This is 16.77% higher than the production of 6003 MT Presses of the Company, i.e., Security Printing Press of Security Paper during the last year 2018-19. (SPP), Hyderabad and India Security Press (ISP), Production of Security Paper per Employee has Nashik. These Security Presses also produce various increased to 7.03 MT in the year 2019-20 as against security items like cheques, railway warrants, income 5.68 MT achieved during the previous year 2018-19. tax return order forms, saving instruments, The Company had produced 850.93 Metric Ton (MT) of commemorative stamps, certificates etc. for various Security Inks in the year 2019-20 at Ink Factory, Dewas customers. The Department of Economic Affairs (DEA), and supplied 861.09 Metric Ton Inks to printing presses Ministry of Finance is the customer for circulating coins during the year 2019-20. This is 13.14% higher than 71Annual Report 2020-2021 the production of 752.12 MT of Security Inks during the for the year 2018-19. For the year 2019-20, the amount last year 2018-19. Production of Security Ink per of Final Dividend proposed to be paid by the Company is Employee has increased to 13.30 MT in the year 2019- `215.48 crores. 20 as against 11.23 MT achieved during the previous 14.5.11 The Company had taken-up many year 2018-19. modernization and capacity augmentation initiatives. 14.5.7 The Company had produced 14.72 mpcs of travel BNP, Dewas has installed and commissioned documents/passport booklets in the year 2019-20 and Computerised Random Numbering (CRN) System on supplied 14.96 mpcs travel documents / passport booklets Numbering Machine no. 6 which has improved the to Ministry of External Affairs (MEA) during the year 2019- Automation and Productivity of the Bank Note. It has 20. This is 4.32% higher than the production of 14.11 also upgraded two numbers of Guillotine (cutting) mpcs of travel documents/ passport booklets during the machine. BNP, Dewas is also in the process of year 2018-19. The company had also produced 341.36 installation of modified touch free suction drum on the mpcs of Non-Judicial Stamp Papers (NJSPs) in the year Simultan machine No. 7 & 8 which shall increase the 2019-20 and supplied 288.36 mpcs NJSPs to various speed of machine and reduce the down time due to State Governments during the year 2019-20. This is paper jamming on feeder. Ink Factory, Dewas has 10.31% higher than the production of 309.46 mpcs of installed and commissioned the Base Ink Handling System. The Dust Collection System has also been NJSPs during the year 2018-19. installed and commissioned in Ink Factory, Dewas. 14.5.8 The Revenue from Operations of the Company Further, the installation of Tack Testers (2 nos.), Digital has decreased to `4966.07 crores in 2019-20 from Ink Rub Tester (1 no.), Ink Drying time recorder (1 no.), `5711.34 crores in the year 2018-19. The decrease in Lab Assessment Cabinet (1 no.) has been completed revenue is due to reduction in production/sales due to at Ink Factory, Dewas. Ink Factory, Dewas has also lockdown declared by the Government of India to installed one Laboratory Balance to meet the increased combat the outbreak of COVID-19 pandemic. Total work volume at QC lab due to increase in the production. expenditure for the year 2019-20 is `4149.58 crores as The installation and commissioning of complete printing compared to `5024.53 crores (regrouped) for the year line consisting of one Offset machine, one Intaglio 2018-19. Profit before Tax (PBT) from continuing machine, one Numbering along with varnishing machine operations for the year 2019-20 is `1026.79 crores as & one Finishing machine each at BNP, Dewas and CNP compared to `800.69 crores (regrouped) for the year Nashik is in advance stage and shall be completed in 2018-19 registering a growth of 28.24% over previous the financial year 2020-21. In addition to the above, one year. The Company had achieved a Total intaglio machine each at BNP, Dewas and CNP, Nashik Comprehensive Income (TCI) of `547.36 crores in the shall also be installed and commissioned in the financial year 2019-20 as compared to `517.12 crores year 2020-21. Intaglio machine was received in financial (regrouped) in the year 2018-19. The consolidated TCI year 2019-20. IGM, Noida has installed Surface Grinding after taking into account the 50% share of Joint Venture Machine which has improved the product quality and Company, Bank Note Paper Mill India Pvt. Ltd. production rate. IGM, Kolkata has installed Spot laser (BNPMIPL) is `677.93 crores in the year 2019-20 as Welding Machine for welding/brazing of Front and Back compared to the Consolidated TCI of `605.99 crores plate of Cupro Nickel medal claps, fittings wire of (regrouped) in the year 2018-19. Tombec Bronze. IGM, Kolkata has also installed polishing machine (Buff) with Built-in Dust Collector for 14.5.9 During the year 2019-20, in accordance with the surface finishing and polishing of different medals. ISP, guidelines on Capital Restructuring of CPSEs issued by Nashik has done up-gradation of Power House by the Department of Investment and Public Asset replacement of existing 3 nos. 500 KVA Transformers Management (DIPAM), SPMCIL had bought back in Substation No.1 with 1000 KVA Energy Efficient 7,67,40,260 Equity Shares of face value of `10/- each at Transformers along with construction of new HT room the book value of `38.24 per share from Government of and HT panel with VCB's and required latest protection India. The total amount of consideration was `293.45 system. SPP, Hyderabad has done retrofitting of add crores. The free reserves of the Company had been on equipment like Hot Stamping, Varnishing, Embossing utilized for the purpose of aforesaid buyback of shares. and auto inking system on Rotatek-II machine. SPP, 14.5.10In accordance with the guidelines on Capital Hyderabad has also installed Paper Testing Equipment Restructuring of CPSEs issued by the Department of like Tensile Strength Tester, Bending Resistance, Digital Investment and Public Asset Management (DIPAM), the Micrometre, Cobb tester, Folding Endurance Tester, Company had paid the Final Dividend of `218.48 crores Gloss meter, Electronic Weighing Balance etc. during 72Department of Economic Affairs I the year 2019-20. SPM, Hoshangabad has replaced 11 skill development, providing drinking water facility etc. KV Oil Circuit Breaker (OCB) by Vacuum Circuit Breaker in the year 2020. Under the Gram Uday Scheme, BNP, (VCB). This will avoid fire accident, improve electrical Dewas has adopted Kawaria village and SPM, safety and reduce tripping time and reduce fault at lowest Hoshangabad has adopted Chatua village for level. SPM, Hoshangabad has installed and implementing projects under CSR. As per the commissioned Air Filtration Unit at Pulp Plant. SPM, instructions of Department of Public Enterprises (DPE) Hoshangabad has done installation of Online Brightness for giving preference to aspirational districts, SPMCIL Sensor to maintain the uniform brightness of pulp and has adopted Barwani District of Madhya Pradesh as the take the required corrective action within time. All the aspirational District. In accordance with the instructions hardware and relay based Silk Dosing Panel Control of DPE vide O.M. dated 01.06.2020 that Health and System were upgraded to latest PLC and HMI based Nutrition be kept as common theme for undertaking CSR control system and also 3 nos. Guillotine Machines have activities by CPSEs for the year 2020-21, SPMCIL has been upgraded by replacing 2nd generation TTL logic taken-up various CSR projects on the specified annual based 8 nos. control cards by PLC and HMI based theme in the year 2020-21. control system at SPM, Hoshangabad. Ink marking 14.5.15 Department of Economic Affairs, SPMCIL and system has also been implemented for each thread in Ministry of Culture are discussing on renovation and Non-Judicial Stamp Gr-II Paper to prevent thread development project of Old Mint complex of Kolkata, breaking / missing of thread. Installation of Lubricating popularly known as the Silver Mint which was founded in Oil Purifier has also been completed at SPM, the year 1824 as per the announcement of Union Budget Hoshangabad. 2020-21 under Para no. 75(1) that "In the historic Old 14.5.12The state-of-the-art Corporate R&D Centre has Mint building Kolkata, a museum on Numismatics and been setup at CNP, Nashik to carry out research and Trade will also be located." development activities on currency, passport and security 14.5.16Indigenization: One new Security Paper line of documents etc. at par with international standards. The 6000 MT capacity at SPM, Hoshangabad was started in R&D centre at ISP, Nashik is equipped with Digital Tear May, 2015. The Company had also setup a 50:50 Joint Resistance Tester, Cobb Tester, Digital Tensile Strength Venture in October, 2010 with Bhartiya Reserve Bank Tester, Digital Roughness/Porosity Tester, Digital Folding Note Mudran Private Ltd. (BRBNMPL) in the name of Endurance Tester, Brightness/ Opacity & Colour Tester, Bank Note Paper Mill India Private Limited (BNPMIPL) Crumpling Instrument and Digital Bursting Strength to implement a Green-Field project of a bank note paper Tester. A full-fledged R&D Centre for Paper, Pulp etc. mill with capacity of 12000 MT per annum to bring two has been established at SPM, Hoshangabad. Latest state of the art technology paper lines of capacity of 6000 testing equipment and machinery have been installed in MT per annum each. The commercial production from the said R&D Centre. all the aforesaid paper lines had commenced and India 14.5.13The Manpower Strength in the Company had has become self-reliant in indigenous production of come down to 8218 as on 31.03.2020 which includes CWBN paper requirement leading to import substitution 341 Executives, 1045 Supervisors and 6832 Workers thereby saving valuable foreign exchange. The JV working in 9 Units and Corporate office in comparison Company, BNPMIPL has produced 15874 MT of Security to previous year's employee strength of 8918. Training Paper during the year 2019-20. The ink factory at BNP, and retraining of employees to upgrade their functional Dewas is manufacturing Offset ink, UV ink and Quickset skills and expertise along with development of their soft Intaglio ink to meet the requirement of currency/security presses of the Company. skills and group dynamics are thrust areas for the Company. The Industrial Relations remained peaceful 14.5.17During the year 2020-21, five commemorative and cordial during the year 2019-20 in all the units of coins have been released so far. SPMCIL. 14.5.18RTI Act: SPMCIL has taken various steps 14.5.14 SPMCIL has taken-up many CSR projects in towards implementation of the RTI Act, 2005. The desired the areas of education, healthcare, rural development, information is provided to the applicant on time. 73Annual Report 2020-2021 Annexure-I Representation of SCs, STs, and OBCs Groups Representatiion of SCs/Sts/ Number of Appointments made during the previous calendar year OBCs (As on 30.11.2020) By Direct Recruitment By Promotion By Other Methods (Internal Recuritment) Total SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs OBCs No.of Employees 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Group 'A' 357 57 18 65 0 0 0 0 7 6 0 0 0 0 0 Group 'B' 998 146 87 168 3 2 0 1 40 6 3 0 0 0 0 Group 'C' 6195 1197 565 884 14 2 0 8 522 108 40 0 0 0 0 Total 7550 1400 670 1117 17 4 0 9 569 120 43 0 0 0 0 Annexure-II Representation of Persons With Disabilities Number of Appointments made during the previous calendar year Representatiion DIRECT RECRUITMENT PROMOTION (As on 31.11.2020) Groups No. of No. of No. of No. of Vacancies reserved Appointments made Vacancies reserved Appointments made Total VH HH OH VH HH OH Total VH HH OH VH HH OH Total VH HH OH No. of Employees 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Group A 357 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Group B 998 9 0 14 0 0 0 0 0 0 0 0 0 0 2 0 0 0 Group C 6195 15 50 118 0 1 1 0 0 0 0 0 0 0 0 0 0 0 Total 7550 24 50 132 0 1 1 0 0 0 0 0 0 0 2 0 0 0 74Department of Economic Affairs I Annexure-I DEPARTMENT OF ECONOMIC AFFAIRS (MAIN) Representation of SCs, STs, and OBCs (As on 30/11/2020) Groups Number of Employees Number of appointments made during the previous year i.e. 2020 By Direct Recruitment By Promotion By Other Methods Total SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Group A 145 22 3 23 0 0 0 0 2 0 0 2 0 0 Group B 246 35 35 36 55 14 22 19 20 6 7 0 0 0 Group C 220 80 5 28 0 0 0 0 9 5 0 0 0 0 TOTAL 611 137 43 87 55 14 22 19 31 11 7 2 0 0 Annexure-II DEPARTMENT OF ECONOMIC AFFAIRS (MAIN) Representation of Persons With Disabilities (PWD) (As on 30/11/2020) DIRECT RECRUITMENT PROMOTION Groups Number of Employees No. of No. of No. of No. of Vacancies reserved Appointments made Vacancies reserved Appointments made Total VH HH OH VH HH OH Total VH HH OH VH HH OH Total VH HH OH 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Group A 145 0 0 1 0 0 1 1 0 0 1 0 0 0 0 0 0 0 Group B 246 0 1 4 0 0 0 1 0 0 1 0 0 0 0 0 0 0 Group C 220 0 0 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total 611 0 1 9 0 0 1 2 0 0 2 0 0 0 0 0 0 0 75Annual Report 2020-2021 Annexure-I NATIONAL SAVINGS INSTITUTE, NEW DELHI Representation of SCs, STs, and OBCs (As on 31/12/2020) Groups Number of Employees Number of appointments made during the previous year i.e. 2020 By Direct Recruitment By Promotion By Other Methods Total SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Group A 3 1 0 0 0 0 0 0 2 1 0 0 0 0 Group B 18 2 1 4 0 0 0 0 0 0 0 0 0 0 Group C 40 10 4 11 6 1 0 0 0 0 0 0 0 0 Total 61 13 5 15 6 1 0 0 2 1 0 0 0 0 Annexure-II NATIONAL SAVINGS INSTITUTE, NEW DELHI Representation of Persons With Disability (PWD) (As on 31/12/2020) DIRECT RECRUITMENT PROMOTION Groups Number of Employees No. of No. of No. of No. of Vacancies reserved Appointments made Vacancies reserved Appointments made Total VH HH OH VH HH OH Total VH HH OH VH HH OH Total VH HH OH 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Group A 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Group B 18 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Group C 40 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total 61 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 76Department of Economic Affairs I Annexure-I SECURITIES APPELLATE TRIBUNAL, MUMBAI Representation of SCs, STs, and OBCs (As on 30/11/2020) Groups Number of Employees Number of appointments made during the previous year i.e. 2020 By Direct Recruitment By Promotion By Other Methods Total SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Group A 5 0 0 1 0 0 0 0 1 0 0 0 0 0 Group B 8 1 0 0 0 0 0 0 2 0 0 0 0 0 Group C 12 2 0 3 2 0 0 0 0 0 0 0 0 0 TOTAL 25 3 0 4 2 0 0 0 3 0 0 0 0 0 Annexure-II SECURITIES APPELLATE TRIBUNAL, MUMBAI Representation of Persons With Disabilities (PWD) (As on 30/11/2020) BY DIRECT RECRUITMENT PROMOTION Groups Number of Employees No. of No. of No. of No. of Vacancies reserved Appointments made Vacancies reserved Appointments made Total VH HH OH VH HH OH Total VH HH OH VH HH OH Total VH HH OH 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Group A 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Group B 8 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Group C 12 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total 25 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 77Annual Report 2020-2021 Annexure-I SECURITIES EXCHANGE BOARD OF INDIA Representation of SCs, STs, and OBCs (As on 30/11/2020) Groups Number of Employees Number of appointments made during the previous year i.e. 2020 By Direct Recruitment By Promotion By Other Methods Total SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 OFFICERS 781 105 42 211 94 10 1 25 226 35 17 0 0 0 SECRETARIES 72 0 0 3 0 0 0 0 0 0 0 0 0 0 JUNIOR ASST. 2 0 0 1 0 0 0 0 0 0 0 0 0 0 MESSENGER/ COOK 2 1 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL 857 106 42 215 94 10 1 25 226 35 17 0 0 0 Annexure-II SECURITIES EXCHANGE BOARD OF INDIA Representation of Persons With Disability(PWD) (As on 30/11/2020) DIRECT RECRUITMENT PROMOTION Groups Number of Employees No. of No. of No. of No. of Vacancies reserved Appointments made Vacancies reserved Appointments made Total VH HH OH VH HH OH Total VH HH OH VH HH OH Total VH HH OH 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 OFFICERS*** 781 10 5 11 2 3 0 94 0 0 0 0 0 0 226 5 0 4 SECRE- TARIES 72 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 JUNIOR ASST. 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 MSNGR/ COOK 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total 857 11 5 11 2 3 0 94 0 0 0 0 0 0 226 5 0 4 78Department of Economic Affairs I Annexure-I SECURITY PRINTING & MINTING CORPORATION OF INDIA LIMITED (SPMCIL) Representation of SCs, STs, and OBCs (As on 30/11/2020) Groups Number of Employees Number of appointments made during the previous year i.e. 2020 By Direct Recruitment By Promotion By Other Methods Total SCs STs OBCs Total SCs STs OBCs Total SCs STs Total SCs STs 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Group A 357 57 18 65 0 0 0 0 7 6 0 0 0 0 Group B 998 146 87 168 3 2 0 1 40 6 3 0 0 0 Group C 6195 1197 565 884 14 2 0 8 522 108 40 0 0 0 TOTAL 7550 1400 670 1117 17 4 0 9 569 120 43 0 0 0 Annexure-II SECURITY PRINTING & MINTING CORPORATION OF INDIA LTD., (SPMCIL) Representation of Persons with Disabilities (As on 30/11/2020) DIRECT RECRUITMENT PROMOTION Groups Number of Employees No. of No. of No. of No. of Vacancies reserved Appointments made Vacancies reserved Appointments made Total VH HH OH VH HH OH Total VH HH OH VH HH OH Total VH HH OH 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Group A 357 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Group B 998 9 0 14 0 0 0 0 0 0 0 0 0 0 2 0 0 0 Group C 6195 15 50 118 0 1 1 0 0 0 0 0 0 0 0 0 0 0 Total 7550 24 50 132 0 1 1 0 0 0 0 0 0 0 2 0 0 0 79Annual Report 2020-2021 80Chapter - II Department of Expenditure II Department of Expenditure 1. Personnel Division the 183 actionable points in the EMC report found implementable, 159 have already been implemented. The 1.1 The Personnel Division works under the Additional remaining recommendations have been taken up for Secretary (Personnel) and is responsible for administration implementation by the concerned Ministries/Departments of various financial rules and regulations like General and implementation is going on. Financial Rules (GFRs), Delegation of Financial Power Rules (DFPRs) etc. including those relating to personnel 1.6.2 As recommended by EMC, a data base of matters of Central Government Employees such as Autonomous Bodies (ABs) has been set up in the website regulation of pay and allowances, policy matters on of Department of Expenditure and 68 Ministries/ pension, and staffing of Government establishments by Departments have uploaded data relating to ABs under creation and upgradation of posts, as also cadre reviews. their administrative control. The information uploaded on the portal is used by various Ministries and NITI Aayog for 1.2 The Division also deals with proposals seeking to review and decision making. NITI Aayog has set up a alter service conditions and other benefits to Government Committee for comprehensive review of all ABs under the employees with significant recurring financial implication. Central Government. In the first instance, the Committee Broad instructions on Expenditure Management, including has reviewed ABs incorporated under Societies economy measures and measures for improving quality Registration Act (SRA), 1860 in consultation with 28 of expenditure such as through Utilisation Certificates (UC) Ministries/Departments. Department of Expenditure has are issued by the Personnel Division. also taken up a review of Autonomous Bodies under 1.3 This Division administers the General Financial Ministries/Departments. Rules and the Delegation of Financial Powers Rules 1.7 Staff Inspection unit (SIU) including issue of clarifications/ amendments thereto, and coordinates with Financial Advisors of all Ministries/ 1.7.1 The Staff Inspection Unit (SIU) was set up in 1964 Departments of the Central Government. All legislative with the objective of securing economy in the staffing of proposals with general financial implications are Government Organizations consistent with administrative scrutinized in the Personnel Division. efficiency and evolving performance standards and work norms in Government offices and institutions wholly or 1.4 Service matters pertaining to the Indian Audit and substantially dependent on Government Grants. The Accounts Service(IA&AS), Indian Civil Accounts Service Scientific and Technical Organisations are not within the (ICAS) and Indian Cost Accounts Service (ICoAS) are dealt purview of the SIU but a Committee constituted by the with by this Division. Administrative assistance to the 'Head' of the Respective Department, with a representative Finance Ministers' Office is also provided by this Division. from SIU as 'Core Member', conducts study of such 1.5 The Division also handles the overall organisations. administration of the Department of Expenditure and also 1.7.2 The Financial Advisers (FAs) are main links controls the cadre for all Central Secretariat Service(CSS)/ between the SIU in the Department of Expenditure and Central Secretariat Stenographer Service (CSSS)/ Central other Ministries/ Departments/ Offices/ Organisations. All Secretariat Clerical Service (CSCS) upto the level of requests for staffing studies by the SIU are routed through Section Officers/ Private Secretaries in the Ministry of the concerned FAs in the Departments. The 'Study Reports' Finance, apart from coordinating Parliament work as well are issued after 'on the spot' work measurement studies as Right to Information Act (RTI) matters for the Ministry are conducted by the SIU Study Team which includes of Finance as a whole. discussion with the senior officials of the organisations 1.6 Expenditure Management Commission and finalization of the provision as assessment report of (EMC) the SIU. The final report of the SIU is required to be implemented by the concerned organization within the 1.6.1 Expenditure Management Commission (EMC) stipulated period of three months as per the instructions was constituted on 04.09.2014 with a mandate to in this regard. recommend ways to increase efficiency of public expenditure, review major areas of Central Government 1.7.3 The SIU conducts physical inspection/ study of expenditure and suggest ways of creating fiscal space the various Central Government Organisations, required to meet development expenditure needs, without autonomous bodies working under the Ministries/ compromising fiscal discipline. The Commission Departments of Central Government on a request from submitted its Report in four parts by March 2016. Out of the Financial Adviser of the concerned Ministry/Department. 81Annual Report 2020-2021 The studies are taken up after drawing up an Annual for COVID-19 global pandemic Extension Programme as per laid down procedures before conducting regarding, vide OM No.6/18/2019-PPD dated the studies. 1st May,2020. 1.8 Pay Research Unit (PRU) c) Special instruction relating to relief operations for COVID-19 global pandemic- Procurement 1.8.1 The Pay Research Unit was established in 1968 by Indian Missions - Extension regarding, and is mainly responsible for collection, compilation and vide vide OM No.6/18/2019-PPD dated 1st analysis of data on actual expenditure incurred on pay May,2020. and various types of allowances as well as data pertaining to the strength of the Central Government Civilian d) Payment of wages to Outsourced Persons Employees and employees of Union Territory of Ministries/Departments and other Administration. This unit brings out an Annual Publication organizations of Government of India during titled "Annual report on Pay & Allowances of Central lockdown period due to COVID-19 - Extension Government Civilian Employees". The brochure provides regarding, vide OM No.23(4)/E.Coord/2020/ statistical information regarding expenditure incurred by 1 dated 20th May,2020. the different Ministries/ Departments of the Central e) Three (03) orders related to Global Tender Government on pay and various types of allowances such Enquiry (GTE) dated 28th May,2020 in as Dearness Allowance, House Rent Allowance, Overtime pursuance of Atma Nirbhar Bharat package. Allowance, Compensatory Allowance etc. in respect of its regular civilian employees. It also provides information f) Orders on Force Majeure Clause (FMC) in on Ministry-wise/ Department-wise and Group wise number contracts Department of Expenditure vide its of sanctioned posts and numbers of incumbents in position. OM No. 42(02)/PFC-I/2014 dated 4th June,2020 regarding Appraisal and Approval 1.9 RTI Cell & Legal Cell of all Public Funded Scheme/Sub-schemes 1.9.1 The Right to Information Act, 2005 conveyed that given the prevailing circumstances in the current financial year, 1.9.1.1 The Right to Information Act, 2005 is implemented no new proposal for a scheme/sub-scheme, in its true spirit and the information required to be disclosed whether under the delegated powers of under the RTI Act has been uploaded on the website of Administrative Ministry including SFC the Department. The Central Public Information Officers proposals or through EFC should be initiated (CPIOs) ensure timely supply of information to applicants this FY 2020-21 except the proposals and prompt action is taken on appeals by Appellate announced under Pradhan Mantri Gareeb Authorities. The quarterly returns are submitted to the Kalyan package, Atma Nirbhar Abhiyan Central Information Commission by the RTI Cell. Suo-Moto package and any other special package/ disclosure has been made mandatory as per orders of announcement. the Department of Personnel & Training. g) Economy Instructions - Printing activities 1.9.1.2 During the year 2019-20 under RTI Act 2005, 1430 vide DoE OM No.7(2)/E.Coord/2020 dated RTI Applications and 60 Appeals received in physical form, 2nd September,2020 4299 RTI Applications and 254 Appeals received online were disposed off in a time bound manner. h) Expenditure Management - Further Economy Measures vide DoE OM No.7(2)/ 1.9.2 Legal Cell E.Coord/2020 dated 4th September,2020 1.9.2.1 The Legal Cell coordinated 120 ongoing Court i) Grant of Advance - Special Festival Package Cases out of which Department of Expenditure is to Government Servants vide DoE OM Respondent No.1 in 41 Court cases and other than No12(2)/2020-E.II(A) dated 12th Respondent No.1 in 79 Court Cases, pertaining to Other October,2020 Ministries/Departments. j) Standard Operating procedure (SOP) for Grant 1.10 Important Orders issued during the year of Advance - Special Festival Package to in the wake of COVID-19:- Government Servants vide DoE OM No12(2)/ a) Freezing of Dearness Allowance to Central 2020-E.II(A) (Pt.) dated 13th October,2020 Government employees and Dearness Relief k) Special cash package equivalent in lieu of to Central Government pensioners at current Leave Travel Concession Fare for Central rates till July, 2021, vide OM No.1/1/2020- Government Employees during the Block E.II(B) dated 23rd April,2020. 2018-21 vide DoE OM No12(2)/2020-EII(A) b) Special instruction relating to relief operations dated 12th October,2020 82Department of Expenditure II 2. Public Finance-State Division for the year 2020-21 by anchoring the fiscal deficit target of 3 percent of respective State's Gross State Domestic 2.1 Scheme for Special Assistance to States for Product (GSDP).The Net borrowing ceiling of the States Capital Expenditure (excluding the State of Jammu & Kashmir) was fixed at Rs. 6.06 lakh crore for the year 2019-20. The scheme 'Special Assistance to States for Capital Expenditure' was announced by the Finance Further, due to macroeconomic scenario in 2019- Minister on 12th October, 2020 as a part of Aatma Nirbhar 20 and lower tax collection in 2018-19, one-time special Bharat Abhiyan package. The scheme is aimed at boosting dispensation has been allowed to the States excluding Capital expenditure by the State Governments who are the State of Jammu & Kashmir for additional borrowings facing difficult fiscal environment due to the shortfall in tax amounting to Rs. 57,769 crore in 2019-20 beyond the revenues arising from the COVID-19 pandemic. Capital State's eligibility. Expenditure has a higher multiplier effect, enhancing the future productive capacity of the economy, and result in In view of the unprecedented COVID-l9 pandemic, higher rate of economy growth. Under the scheme 'Special additional borrowings up to 2 percent of Gross State Assistance to States for Capital Expenditure', special Domestic Product (GSDP) amounting to Rs. 4,27,302 crore assistance has been provided to the State Governments has been allowed to the 28 States for the year 2020-21. in the form of 50-year interest free loan up to an overall One percent of this is subject to implementation of following sum not exceeding Rs. 12,000 crore. four specific State level reforms, where weightage of each of the reforms is 0.25 percent of GSDP: 27 States had submitted their proposals under the schemes. Capital Expenditure proposals of a) Implementation of One Nation One Ration Rs.9879.61 crore of these 27 States were approved by Card System; the Ministry of Finance and an amount of Rs.4939.81 crore b) Ease of Doing Business Reform; was released to the States till 15.12.2020 as the first instalment under the scheme. c) Urban Local Body/ Utility Reforms; and 2.2 Additional Central Assistance for Externally d) Power Sector Reforms Aided Projects Borrowing permission for the additional borrowings Additional Central Assistance for Externally-Aided of one percent of GSDP amounting to Rs. 2,13,660 crore Projects (EAPs) is passed on to the General Category has been issued to States in two instalments of 0.50 States on back to back basis on the same terms and percent each. Further, the States that have carried out conditions on which these loans are received by the Union the stipulated reforms have been granted reform linked Government from donor agencies. However, in case of North borrowings permission. Till 15.12.2020, additional Eastern and Himalayan States, special dispensation has borrowings permission of Rs.23,523 crore was accorded been made whereby they receive the assistance for EAPs to 9 States (Andhra Pradesh, Goa, Gujarat, Haryana, in grant: loan ratio of 90:10. Based on the Karnataka, Kerala, Telangana, Tripura and Uttar Pradesh) recommendations of the office of Controller of Aid, Account for implementation of 'One Nation, One Ration Card and Audit, an amount of Rs. 17,072.60 crore has been System'. Besides this, additional borrowings permission released to the State Governments during 2020-21 (as on of Rs.14,355 crore was accorded to 4 States (Andhra 15.12.2020) as against Budget Estimates (2020-21) of Rs. Pradesh, Karnataka, Tamil Nadu and Telangana) for 29,000 crore. implementing 'Ease of Doing Business Reforms'. The State 2.3 Special Assistance to States of Madhya Pradesh has carried out reforms related to the 'Urban Local Body/Utility Reforms' and was given additional Budgetary allocation of Rs.15,000 crore has been borrowings permission to Rs.2,373 crore. provided under the head 'Special Assistance' in Demand No.38 (Transfers to States) of the Ministry of Finance in 2.5 Finance Commission Grants the Union Budget 2020-21 (BE). Out of this, Rs. 219.50 crore were released to the State of Nagaland during 2020- The financial year 2020-21 is the first year of the 21(as on 15.12.2020). Fifteenth Finance Commission (15th FC) award period. The Union Government vide 'Explanatory Memorandum 2.4 Borrowings as to the Action Taken on the Recommendations made Annual borrowing ceilings to States for the year by the 15th FC in its Report for financial year 2020-21 2020-21 has been determined in line with the methodology submitted to the President on December 5th, 2019 have followed for determining annual borrowing ceilings to States accepted the recommendations relating to the Post during the period 2019-20. The borrowing limits are worked Devolution Revenue Deficit Grant, Grants to Local Bodies out by Ministry of Finance (MoF) for each State and Net borrowing and Disaster Management Grants for the financial year ceiling of the 28 States has been fixed at Rs.6.41 lakh crore 2020-21. The 15th FC recommended Grants-in-Aid 83Annual Report 2020-2021 amounting to Rs. 1,98,914 crore for transfer to States handled in two units:- Public Finance (Central-I) and during 2020-21 as below; Public Finance (Central-II). 3.2. This division is entrusted with the appraisal and S. No. Component Amount Allocated (` in crore) approval of all public funded schemes and projects of the 1. Post Devolution Central Ministries/PSUs. In respect of development Revenue Deficit Grant 74,340 schemes and projects, the focus has been on improving the quality of public Expenditure though better scheme/ 2. Local Bodies Grants 90,000 Project formulation, emphasis on outputs, deliverables, impact assessment and convergence approach. 3. Disaster Management (Union Share of SDRMF& NDRMF) 34,574 3.3. A continuous endeavour is made to rationalize Total 1,98,914 the Centrally Sponsored Schemes (CSSs) and Central Sector Schemes (CSs) for optimal and focused use of The 15th FC recommended Post Devolution public resources. Revenue Deficit Grant and Grants-in-aid to Local Bodies 3.4. The Public Finance (Central) division deals with and Disaster Management Grants which is approximately the financial restructuring of Central PSUs on the 50% higher than recommended by the Fourteenth Finance recommendations of the Bureau for Restructuring of Public Commission (14th FC) for the award year. The 15th FC Sector Enterprises (BRPSE). It is also engaged in working have recommended a total size of the Grants for Local out modalities for financial assistance to CPSEs, Bodies amounting to Rs. 90,000 crore. Out of this corpus, quantification of their Internal and Extra Budgetary the Commission have recommended ` 29,250 crore for Resource (I&EBR) generation for preparation of budget, Urban Local Bodies and ` 60,750 crore for Rural Local finalizing modernization of plants and machinery to ensure Bodies. Unlike that of the 14th FC recommended Grants- more efficiency in production. Review of Capex and IEBR in-aid for Rural Local Bodies, the Rural Local Bodies Grants of CPSEs is also done periodically. for the year 2020-21 are also allocated to Fifth and Sixth Schedule Areas as well as Mandal/Tehsil and District/Zila 3.5. Various issues relating to Food, Fertilizers, LPG Panchayats. Similarly, Urban Local Bodies Grants are also and Kerosene subsidy, including their quantification and allocated to the Cantonment Boards. For the first time, extension of assistance to the stake holders are also dealt Finance Commission Grants are allocated for the purpose within this division. This Divison is actively involved along of improving Ambient Air Quality in Million Plus Cities/ with the concerned Department/Ministry, in shaping subsidy Urban Agglomerations. As on 15.12.2020, a total of policy of the government as to ensure effective targeting `1,24,767.96 crore has been released to the eligible State coupled with minimum burden on the Government. Governments as per component-wise details given below; 3.6. The PFC division also deals with various issues S. No. Component Amount Released (` in crore) of Direct Benefit Transfer (DBT) in coordination with the DBT Mission, Aadhaar based authentication of 1. Post Devolution beneficiaries data base and use of the Public Financial Revenue Deficit Grant 55,755.75 Management System (PFMS) in order to have end to end 2. Local Bodies Grants digitized information on all central expenditures encompassing CSSs, CSs, subsidies and other 3. Urban Local Bodies 14,625.00 expenditure. 4. Rural Local Bodies 33,386.48 3.7. This division is responsible for preparation of 5. Disaster Management Grants outcome budgets for all Central Ministries/Departments in consultation with the NITI Aayog. This Output-Outcome 6. Union Share of SDRMF 16,593.93 Framework shall be for all CSSs and CSs dealing with 7. NDRMF 4406.81 identified measurable outcome in the relevant medium term framework and physical and financial outputs are Total 1,24,767.96 targeted on a year to year basis. A consolidated Outcome Budget 2020-21 was presented in the Parliament as a 3. Public Finance Central Division part of the Budget Documents of 2020-21. 3.1 Public Finance (Central) Division is primarily 3.8. During the period from 1st January, 2020 to 30th engaged with all issues relating to the Expenditure related November, 2020, the Expenditure Finance proposals of the government of India through various public Committee(EFC) Chaired by Secretary (Expenditure) funded programmes/schemes/projects of various Central recommended 44 investment proposals/schemes of various Government Ministries/Departments. This Division is Ministries/Departments costing ` 428909.78 Crores. 84Department of Expenditure II 3.9. Also, during the period, Public Investment Board ix. Operational aspects of Government e- (PIB) chaired by Secretary (Exp.) considered and Marketplace and quarterly review of GeM. recommended 09 proposal involving an amount of `7437.18 4.3 Central Public Procurement Portal & e- crore. Procurement 3.10. In order to speed up the appraisal process, and online portal for uploading EFC/PIB/SFC/DIB proposals, i. Pursuant to the recommendations of the marking proposals to relevant Ministries, receiving Committee on Public Procurement (CoPP), comments, fixing dates for the meetings and dispatching a Central Public Procurement Portal (CPP minutes after approval has been functional since August, Portal) has been set up for providing 2017. comprehensive information and data relating to public procurement and is accessible at 3.11. In December 2020, detailed instructions regarding continuation of ongoing schemes of various Ministries/ www.eprocure.gov.in. It is being used at Departments beyond 31st March,2021 till Financial Year present by various Ministries / Departments, 2025-26 were issued, keeping in view the focus on CPSEs and autonomous / statutory bodies. rationalization and output/outcome based funding of e-Publishing of tender enquiries, corrigenda scheme expenditure. thereto and details of contracts awarded thereon, on the Portal, has been made 4. Procurement Policy Division mandatory in a phased manner w.e.f 1st 4.1 A Public Procurement Cell (PPC) was set up in January 2012. this Department in June, 2011 to take follow up action on the Report of the Committee on Public Procurement ii. Further, it has also been decided to (CoPP) and for related matters such as drafting of rules implement e-Procurement in Ministries/ and setting up of a Central Public Procurement Portal. Departments of the Central Government The Cell was gradually strengthened and a Division called and instructions have also been issued to all Procurement Policy Division (PPD) was created. Ministries/Departments to commence e- procurement in respect of all procurement 4.2 Functions of PPD with estimated value of ` 2.50 lakh or more Subsequently, the scope of work in PPD was enlarged. in a phased manner. Use of e-procurement The Division now deals with the following items of work:- has enhanced transparency and i. Public Procurement legislation and rules, accountability and made procurement more notifications, orders thereunder; efficient. This also helps in monitoring delays and reducing the procurement cycle. ii. Policies relating to Public Procurement including administration of General Financial iii. Currently, approximately more than one lakh Rules 2017 on procurement of goods and tenders with estimated value of more than services and contract management; Rs. One Lakh crore are floated per month policies relating to mandatory or preferential using facility of CPPP. Apart from it, many procurement; procurement organizations like Railways, iii. Matters relating to standardization of PSUs like ONGC, BHEL etc. have their own procurement related documents; e-procurement portals. iv. All matters related to Central Public 4.4 Government e-Marketplace (GeM): Procurement Portal set up for publishing information relating to Public Procurement; i. It is mandatory to buy goods/ services available on GeM from GeM only. v. Matters relating to electronic procurement; ii. In order to promote greater discipline and vi. Professional standards to be achieved by timeliness in payment to vendors, it has officials dealing with procurement and been decided that whenever a CRAC is auto suitable training and certification requirements for the same; generated or issued by a buyer and payment is not made 10 days thereafter, the buyer vii. Interface with International Bodies on matters organization will be required to pay penal relating to Public Procurement. interest @ 1% per month for the delayed viii. Proposals for exemption to Rule 161(iv)(b) of payment beyond the prescribed timeline till GFRs regarding Global Tender Enquiry (GTE) the date of such payment. 85Annual Report 2020-2021 4.5 Capacity Building: 5.5 The basis of the Official Language Policy of the Union is motivation and encouragement. "Hindi Week" was It is imperative that the executives/officers observed in the Department from 14-21 September, 2020 engaged in public procurement process have thorough to motivate the employees for the progressive usage of knowledge of all the relevant rules, regulations and Hindi in their day-to-day work. Several competitions viz. procedures of public procurement. For the purpose, one week training programme on Public Procurement and one Hindi Essay Writing, Noting-Drafting, Hindi-English week training programme on Advance Public Procurement Translation and Poem Writing were organized to encourage are being conducted through National Financial the employees to work in Hindi and create a conducive Management (NIFM) (now online due to COVID 19 atmosphere. In addition, a Campaign was launched for Pandemic) with a view to educate and familiarize the undertaking more and more work in Hindi (minimum 2000 concerned executives/ officers with all the relevant rules, words) during the period from 01 to 30 September, 2020. regulations and procedures of public procurement. Around Several officers and employees of the Department took 2000 officers are being trained every year. part in these competitions/campaign enthusiastically. 5. Official Language 5.6 During the period under reference, replies to all 5.1 Hindi Section of the Department of Expenditure the letters received in Hindi were compulsorily given in is responsible for implementation of the provisions made Hindi under rule 5 of the Official Language Rules 1976. under Official Language Act, 1963 and Official Language 5.7 Official language inspection of the subordinate Rules, 1976 as amended from time to time. It is also offices and divisions of Department of Expenditure could responsible for coordinating follow-up action on the not be done due to Covid-19. However, during the period suggestions/ directions given by Kendriya Hindi Samiti, Committee of Parliament on Official Language, Hindi under reference, official language inspection of Arun Jaitley Advisory Committee and Central Official Language National Institute of Financial Management was conducted. Implementation Committee. Other responsibilities of the During inspection their work was found satisfactory and section include implementation of various incentive suggestions were given to them to further improve the schemes to enhance use of Hindi in official work, facilitation progress of Official Language Hindi. in nomination of officers/ employees for Hindi language 5.8 Hindi translation of the documents falling under training, Hindi stenography/typing training and organization of Hindi day/week/fortnight. In addition to these, efforts for section 3(3) of Official Language Act, 1963, applications/ achieving annual targets set by Department of Official appeals received under the Right to Information Act, 2005 Language with regard to usage of Hindi in official work are were disposed off in time. Brochure related to salary and made in association with the sections/divisions/offices in allowances published by Pay Research Unit of the the Department. Department was also translated. The translation work of the letters/ D.O. letters received from the Finance Minister/ MoS 5.2 To increase original correspondence with other (Finance) and the material/ documents received from various Offices/individuals in Hindi, circulars are issued to sections sections of the Department were translated from English to divisions/offices from time to time. As per quarterly progress report for the quarter ended on 30th September, Hindi and vice-versa within the stipulated time frame. 2020, original correspondence in Hindi with Region "A", 6. Integrated Finance Unit (IFU) "B" and "C" is 65.38%, 51.36% and 29.6% respectively. 6.1 The Integrated Finance Unit works under 5.3 Quarterly meetings of the Departmental Official Additional Secretary & Financial Adviser (Finance) and Language Implementation Committee could not be held deals with the expenditure and Budget related proposals regularly due to Covid-19. However, a virtual meeting of the Committee was held on 04th November, 2020 in which under Grant No.28 - Department of Expenditure which reports for quarters ending 31st March, 2020 and 30th includes (i) Secretariat General Services covering the June, 2020 received from the sections/ divisions/ offices establishment budget for the Department of Expenditure of the Department were reviewed. Quarterly Progress (Main Secretariat), O/o Controller General of Accounts, Reports regarding progressive use of Hindi received from O/o Central Pension Accounting Office, O/o Cost Accounts sections/offices of the department are reviewed in detail Branch and O/o Chief Controller of Accounts; (ii) Other keeping in view the targets prescribed in the Annual Administrative Services covering the budget for Institute Program. Wherever shortcomings were found, it is advised of Government Accounts and Finance, National Institute to rectify/improve usage of Hindi in official work. for Financial Management, Contribution to International 5.4 Replies of letters received from members of Body (AGAOA) and the budget relating to payment of Parliament and other VIPs were promptly sent and follow service charges to the Central Record keeping Agency for up action ensured. the New Pension Scheme. 86Department of Expenditure II 6.2 This Unit also monitors the expenditure under Grant No.34 - Indian Audit & Accounts Department; and Grant No.37 - Pensions. The allocations under the respective Grants are as under: (` in crore) Budget Estimates 2020-21 *Revised Estimates 2020-21 Grant No. Revenue Capital Total Revenue Capital Total 28 – Department of Expenditure 535.55 0.00 535.55 - - - 34 – Indian Audit & Accounts 5365.27 18.00 5383.27 - - - Department 37 – Pensions 62169.35 0.00 62169.35 - - - *Yet to be received. payable to Northern Railway for Catering Units functioning in Parliament House and PMO; iv)Representing in Revised 6.3 The Integrated Finance Unit expeditiously Cost Committee of the various Ministries and Departments examines and disposes the financial and expenditure to identify the specific reasons behind time and cost proposals pertaining to the Department of Expenditure overrun of projects and schemes; v)Participating in EFC/ including the proposals for appointment of consultants, PIB and other Inter-Ministerial Committees; and vi) deputation of officers abroad, payments towards Course Examination of cost estimates, evaluation of the financial Fees (including grants-in-aid) to National Institute of feasibility and other financial parameters of the High value Financial Management etc. duly observing austerity Infrastructural Projects like Rail, Highways, Power, instructions issued by the Govt. from time to time. Education Sector etc. referred by DoE. 6.4 The expenditure trend of Grant Nos. 28, 34 and 7.3 The Office of Chief Adviser Cost is also cadre 37 have consistently been monitored and strict control controlling office for the Indian Cost Accounts Service has been exercised over the Govt. expenditure. A report (ICoAS) which broadly encompasses recruitment, transfer/ of the review is regularly submitted to the Secretary posting and career progressions of CoAS Officers. It also (Expenditure) on monthly basis. looks after training requirements of the officers for 7. Chief Adviser Cost continuous up-gradation of their knowledge and skills, in addition to rendering professional guidance to the ICoAS 7.1 Office of Chief Adviser Cost (CAC) is one of the officers working in different participating organizations. divisions functioning in the Department of Expenditure, Ministry of Finance. Office of Chief Adviser Cost (CAC) is 7.4 Despite the limitations posed by outbreak of advising Ministries and Government Undertakings on cost COVID-19 pandemic,the Office of Chief Adviser Cost accounts matters and undertaking cost investigation work completed 45 studies/ reports during the period from on their behalf. It is a professional body staffed by Cost December 2019 to November 2020 following last annual and Management Accountants/ Chartered Accountants. report. The cost-price studies including vetting of claim/ compensation completed during this period are detailed 7.2 O/o Chief Adviser Cost is rendering advice to the below: Central Government Ministries/Departments/ Organizations on complex Price/Cost related issues and (i) System Study financial matters which covers a wide spectrum of sectors/ areas. O/o CAC is currently engaged in the following major Fixation of Common Hourly Rates and thrust areas viz. i)Vetting of claims under Price Support Overhead Percentage in respect of Scheme, Market Intervention Scheme and Price Government of India Presses at Mayapuri, Stabilisation Fund for Perishable Agriculture produce and New Delhi Minto Road, Rashtrapati Bhawan Cereals submitted by Implementing Agencies and State and Temple Street, Kolkata for various years. Governments; ii) Determination /fixation of fair prices of (ii) Fair selling price of products/service where the products and services supplied/rendered by PSUs to Government/ Public Sector Undertaking is the Government. To name a few: Rails by SAIL, Traction the Producer/ Service provider as well as the Electrics by BHEL, Bank Notes and Coins by SPMCIL, user : i) Fixation of Fair Price of rails supplied Uranium Concentrate by UCIL, Nuclear Grade Ammonium by Steel Authority of India Ltd. (SAIL) from Diuranate by IREL, Tear Smoke Munitions, Tear Gas Gun, Multi Barrel Launcher by BSF, Storage charges payable Bhilai Steel Plant to Indian Railways for the by FCI to CWC, cost analysis of different procedures & year 2018-19; ii) Fixation of Rates of test undertaken by Hospital (Sree ChitraTirunal Institute Compensation for nuclear grade ammonium for Medical Sciences and Technology) etc.; iii) Subsidy diuranate( NGADU) supplied by Indian Rare 87Annual Report 2020-2021 Earths Limited to Bhabha Atomic Research Revision of Cost Estimates in various Ministries/ Centre for the year 2016-17; iii) Fixation of Departments. Proactive role of this Office in the Revised Fair Selling Price of the year 2018-19 in Cost Committee has facilitated rationalisation of revised respect of Tear Gas Gun and Multi Barrel cost estimates. Launcher manufactured by CENWOSTO, 7.6 Other Major Committees Represented: Officers of BSF, Tekanpur Gwalior; iv) Fixation of Fair Chief Adviser Cost's Office owing to their expertise in Price of Condoms supplied by M/s HLL costing/finance/commercial accounting have also served Lifecare Limited for the year 2017-18 & 2018- as Chairman/Members on the following major multi- 19; v)Fixation of Fair Selling Price of the year disciplinary Inter-Ministerial/ Expert Committees such as 2019-20 in respect of Tear Smoke Munitions i) National Pharmaceutical Pricing Authority (NPPA), (TSMs) manufactured by Tear Smoke Unit Department of Pharmaceuticals; ii) Board of Governors (TSU) BSF, Tekanpur Gwalior; vi) Cost of and the society of the Arun Jaitely National Institute of production & Selling Price for items of Postal Financial Management (AJNIFM), Faridabad; iii) Governing Stationery produced & supplied by Security Body of Tear Smoke Unit, BSF, Tekanpur, (Gwalior);iv) Printing Press,Nahsik and Hyderabad to Advisory Committee for consideration of techno-economic Department of Posts for the year 2016-17to viability of major/ medium, flood control and multipurpose 2018-19; vii) Fixation of Fair Price of Coins projects, coordinated by Central Water Commission; v) supplied by India Govt. Mints at Kolkata, Price Negotiation Committee for fixing unit price of Hyderabad,Noida & Mumbai to RBI for the 13,95,306 Ballot Units, 10,55,716 Control Units and various years; viii) Fixation of Currency Notes 17,45,840 Votor Verifiable Paper Audit Trail (VVPAT) Units produced by Currency Note Press (CNP) at purchased for conduct of Lok Sabha Elections - 2019 - Nashik to RBI during the year 2018-19; ix) Ministry of Law and Justice; vi) M/o Water Resources, Fixation of Fair Price of Bank Notes supplied RD&GR -Special Committee for Interlinking of Rivers; vii) by Bank Note Press (BNP) Dewas to RBI Standing Committee of Experts under Drugs (Prices during the year 2018-19 and x) Fixation of Control) Order 2013;viii) Rate Structure Committee under fair price of DDT 50% supplied by HIL to the Chairmanship of AS&FA, Ministry of Information and NVBDCP for the year 2017-18 & 2018-19 and Broadcasting for DAVP advertisement rates for (1) Print provisional price for the year 2018-19 and Media, (2) Private FM Radio Stations, (3) Private C&S TV 2019-20. Channels & (4) Social Media; ix) Committee to suggest a (iii) Fixation of service charges for the services more transparent and objective method for working out rendered by a Govt. Department/Agency on compensations for India-based officers/staff posted in behalf of the other: Fixation of prices of Indian Missions/posts abroad; x) Committee constituted to review the rates of deployment charges fixed for Central ACEMU Transformer supplied by BHEL- Armed Police Forces/RAF under the Chairmanship of Jhansi to Indian Railways during 2014-15. Special Secretary, MHA; and xi) EFC/PIB meetings in (iv) Determination of subsidy: i) Vetting of claims Ministry of Finance, Department of Expenditure for of NAFED for reimbursement of losses and Projects/Schemes of various Ministries as per the request recovery of Gains under Price Support received in this Office. Scheme (PSS) for various crops/commodities; 8. Arun Jaitley National Institute of Financial ii) Payment of Establishment Cost and Maagement (AJNIFM) Subsidy claim to Northern Railway catering units functioning in Parliament House 8.1 Introduction about AJNIFM Complex and Grant in Aid claim of PMO for the year 2018-19; and iii) Purchase/Sale of 8.1.1 AJNIFM was set up in 1993 as a Society. The Cotton procured by Cotton Corporation of India Union Finance Minister is the President of the AJNIFM Society and Secretary (Expenditure) is the Chairman of for the period 2014-15 to 2018-19. the Board of Governors. (v) Other studies : Revaluation of compensation 8.1.2 It began with the core objective of training Officer payable to the prior allottees of Coal Blocks Trainees (Probationers) of the 6 organised accounts and for 'Mine Infrastructure Other than Land' for finance services. However, over the years, the Institute various coal blocks. has expanded its activities with four long term programs 7.5. Revised Cost Estimates Committees and a dynamic repertoire of short-term programmes. A Represented: In pursuance of Ministry of Finance, brief of some of the programmes is given below. In the Department of Expenditure's Office Memorandum No. process, AJNIFM has been able to carve a unique identity 24(35)PF-II/2012 dated 05th August, 2016, Office of Chief for itself as a premier institute of Ministry of Finance in Adviser Cost has represented in the Committees for professionalizing Public Financial Management. 88Department of Expenditure II 8.2 Key achievements the Government: Whenever there are new initiatives of the Central Government, AJNIFM has been mandated to Due to COVID-19, all training programmes were launch special training drives to cover all Government cancelled. However, AJNIFM started online training entities. In fulfilment of this mandate, AJNIFM has run programmes. Total 33 Nos. programmes have been several training programmes on GeM. conducted through online. Total 1097 Nos. participants have been trained on-line programmes. Total 28 Nos. 8.7.2 Digital Governance: AJNIFM is a partner Institute programmes through on-line have been scheduled from under NeGD, and is successfully delivering capacity December 2020 to March 2021 building and training programmes in e-Governance for all cadres of Government officials. 8.3 Significant developments - Training Programmes Various training courses run at AJNIFM have a component on e-governance invariably. 8.3.1 AJNIFM conducts four long term programmes. These are - 9. Controller General of Accounts a. Professional Training Course: for Officer 9.1 The Controller General of Accounts (CGA), in the Trainees of various Accounts and Finance Department of Expenditure, Ministry of Finance, is the Services twenty six months duration. Authority to administer, manage and supervise departmentalized accounts of Government of India. It also b. Two-years AICTE approved Post-Graduate provides advice to various Ministries/Departments of Diploma in Financial Management for mid- Government of India concerning Financial/Accounting level officers of Central and State matters and is responsible for establishing and maintaining Governments and the Armed Forces. a technically sound Payment and Accounting System. c. A two-years PGDM (Finance): This is a 9.2 The Office of CGA prepares monthly and annual recent program on Financial Markets and analysis of expenditure, revenues, borrowings and various attracts participants primarily from the private sector as well as Government. fiscal indicators for the Union Government. Under Article 150 of the Constitution, the Annual Appropriation Accounts d. DGAIA (Diploma in Government Accounts (Civil) and Union Finance Accounts are submitted to and Internal Audit): A one-year programme Parliament. Along with these documents, an M.I.S Report to upgrade the technical skills of Group-B titled 'Accounts at a Glance' is prepared and circulated to officers of the Civil Accounts Department. Hon'ble Members of Parliament. 8.3.2 Apart from its regular long term programme, 9.3 Functions : i) Formulate policies relating to general AJNIFM undertakes short term training programmes on principles, form and procedure of accounting for the Central various aspects of Finance and Public Financial Management, Participants include government officials and State Governments; ii) Administer the process of from the States and the Centre, Autonomous Bodies, payments, receipts and accounting in Central Civil PSUs, Armed Forces, and from the private sector as well. Ministries / Departments; iii) Prepare, consolidate and The programmes deal with Specific themes and are submit the monthly and annual accounts of the Central specially tailored to the needs of the participants. The Government through a robust financial reporting system approach is multi-pronged. aimed at effective implementation of the Government fiscal policies; iv) Coordinate and assist in the introduction of 8.4 Initiatives taken with reference to the Management Accounting Systems in Ministries/ Northeast region. Departments with a view to optimizing the utilization of Due to lockdown, no programme was conducted Government resources through efficient cash management except on-line training. and an effective Financial Management Information System (FMIS); v)Administer banking arrangements for 8.5 Initiatives undertaken for Disabled/ Handicapped and SC/ST as well as other weaker disbursements of Government expenditures and collection sections of Society of government receipts and interact with the Central Bank for reconciliation of cash balances of the Union Government; The AJNIFM campus is disabled friendly and any and vi) Establish a sound Human Resource Management grievances received in respect of SC/ST or other weaker System for recruitment, deployment and improve the career sections are duly attended to. profile management of officers and staff, both at the 8.6 Gender Budgeting and Empowerment of supervisory level and at the operational level within the Women Indian Civil Accounts Service. Due to lockdown, no programme was conducted. 9.4 Financial Reporting - Monthly and Annual:- i) The office of the Controller General of Accounts is 8.7 Inputs on E-governance responsible for Monthly Consolidation of the Union 8.7.1 Dissemination of knowledge on new initiatives of Government Accounts, a detailed analysis of the monthly 89Annual Report 2020-2021 trends of receipts, payments, deficit and its sources of ii. Some Ministries such as M/o Rural financing are presented to the Union Finance Minister every Development have developed their own month. The documents has over a period of time evolved system for implementation of their major into an extremely useful tool for monitoring budgetary schemes. Ministry of Rural Development compliance and a handy MIS reference for decision decided to implement their four major making. In consonance with the Government's policy schemes MGNREGA, PMGSY, PMAY-G and towards transparency in public functioning, an abstract of NSAP in four States namely Assam, Uttar the Union Government accounts is also released every Pradesh, Odisha and Tamil Nadu through month on the Internet. The data can be accessed at the Scheme specific applications to be developed website http://www.cga.nic.in; ii) With the advancement by the Ministry by way of integration with of technology this office has started providing weekly flash REAT of PFMS. This will cater to the figures of receipts, payments and deficit to Ministry of requirements of the Ministry and proper Finance as a tool for quick management decision making. monitoring. In this regard one application i.e. Daily flash figures are provided in the month of March, in OMMAS for PMGSY has successfully order to monitor various financial parameters and targets; integrated for Chhattisgarh State as a pilot iii) In tune with the development in best practices, O/o and made functional. It iimplemented in North CGA also submit the Provisional Accounts of the Eastern States also successfully. The same Government of India within two months of completion of is being replicated to other States. Ministry the financial year; iv)The Finance Accounts of the Union has to take up other systems for other Government is submitted to Parliament under the provision schemes also for integration with PFMS. of Article 151 of the Constitution of India; v) The Finance iii. States and FCI are procuring food grains under Accounts of the Central Government comprises of the the scheme of Ministry of Consumer Affairs, accounts of the Central Government as a whole and Food and Public Distribution. Some States includes transactions of Civil Ministries/Departments, have their own systems applications for Ministries of Defence and Railways and the Departments procuring and monitoring purposes. Some of Posts & Telecommunication. It presents the accounts of the systems have been integrated with of receipts and outflows of the Central Government for the PFMS e.g. E-Kharid of UP, Chhattisgarh, year together with the financial results disclosed by different Madhya Pradesh and some others are in the accounts and other data coming under examination. These accounts include the Revenue and Capital Account, Public process of integration. Debt account and other liabilities and assets worked out iv. Except West Bengal all the State/UT from the balances in the accounts. It is supplemented by Treasuries are integrated with PFMS and the accounts separately presented in the form of sharing data regularly. Owing to constant Appropriation Accounts for Grants and charged follow up with the States there are very Appropriations. negligible numbers of schemes remaining 9.5 Public Financial Management System (PFMS): unmapped. The Public Financial Management System (PFMS) is a 9.5.2 Some major Highlights of current FY (2020- web-based online software application designed, 21) (up to 30th November, 2020) are as under: developed, owned and implemented by the O/o CGA. PFMS aims to provide a sound Public Financial i) Significant developments/policy decisions Management System for Government of India by taken during the year for the development of establishing a comprehensive payment, receipt and a particular sector ,including initiatives for accounting network. It is aimed to achieve (i) "Just in time" improving delivery of public services and for transfer of funds and (ii) complete tracking of realization ensuring "inclusive growth"; i.e. (i)DR & BC of funds from its release to its credit into the bank account Plan has been prepared for PFMS to ensure of intended beneficiaries. PFMS makes a direct and disaster recovery and business continuity in significant contribution to the Digital India Initiative of possible exigency situations. (ii) Data Government of India by enabling electronic payment and Retention and Archival Policy for PFMS has receipt for Ministries/Departments in Government of India. been prepared, incorporating relevant GFR 9.5.1 Performance & Achievements and CAM provisions. (iii) Centralized Beneficiary Master Database has been set i. Receipt Expenditure Advance Transfer up, and is being developed to provide a unified (REAT) Module: REAT Module of PFMS source of information and validation for the provides information on unspent balance with beneficiaries of Govt. schemes. implementing agencies ensuring just in time releases by the ministries and eliminating ii) Inputs on E-Governances activities. (i) Banks unnecessary parking of funds. Integrated during period - 107 (ii) Total No. of 90Department of Expenditure II Transactions 90 Crore + (iii) Total Amount 9.6 Government Integrated Financial Transacted Rs. 18,000 Crore + and (iv) 50+ Management Information System ( GIFMIS) External systems integrated (NREGASOFT, 9.6.1 It is envisaged to develop GIFMIS to be a part of AWASSOFT, PMKISAN, MCTS, NSP etc. PFMS and to include enhancements in PFMS in terms of Payment made during Covid times in current coverage of processes and functions of Government. The F.Y 2020-21(up to 30th November, 2020): components of GIFMIS would include; Integration with Non-Civil Ministries for real time flow of accounting data, No. of Schemes Transactions Amount (in crores) Budget Control, Account Automation, Just in Time 466 81,96,85,740 1,62,676.08 Cr. Releases, Management Information System, Debt a) Payment of around 65 Lakh beneficiaries Accounting and Information System, Complete coverage from Food and Civil Supplies department of of Tax Accounting, Employee Payroll System, Financial Gujarat through PFMS under the COVID-19 Asset Module and Investment Module. welfare program and many other Centre as 9.6.2 Progress towards GIFMIS well State Government DBT schemes in COVID period. O/o CGA has begun working on the expansion plan of the current IT Platform i.e Public Finance b) Integration with various State Government Management System (PFMS), which could cover the portal during the urgent COVID times essential attributes of GIFMIS. including- RAHAT Portal (Social Justice UP), Bihar PDS portal etc. The integration with Non-Civil Ministries has been completed and flow of monthly accounts data has been c) Payments under Housing Damage Assistance scheme of Bihar under "Corona established. A comprehensive budget control module at Sahayata","Mukhyamantri Vishesh various levels is being envisaged and is being developed. Sahyata", various States pension schemes PFMS has been configured to handle Treasury Single were done through PFMS. Accounts System for Autonomous Bodies. This system has ensured Just in Time releases with the help of Reserve d) Cash transfer under the Mid-Day Meal Bank of India. After completion of pilots in two Autonomous Program of States. Bodies, the system is rolled out further in phases. The e) Cash transfer (Rs.1000 per beneficiary) under system is expected to reduce the float in the system and the Food security Program of Bihar State would help in efficient Public Financial Management. The during COVID lockdown period. PFMS is being configured to bring out various MISs related to Scheme implementation in the Government. Year wise DBT Payment: This would cover both Central Sector and Centrally Financial Number of Transaction Amount Sponsored Schemes. Debt Accounting Module will be Year Schemes (` in crore) developed in the PFMS system to include all the loans 2014-15 56 21,943,733 6,967.17 and liabilities of the Union Government. 2015-16 90 67,450,640 22,138.47 The coverage of Direct and Indirect Tax accounting 2016-17 162 101,148,847 31,393.53 would be enhanced to include the complete Tax Accounting through PFMS and GIFMIS. The existing EIS system 2017-18 297 165,473,305 90,754.95 would be upgraded to Employee Payroll System to have a wider coverage of personnel management which would 2018-19 416 509,725,682 154,748.87 include paramilitary forces and other large establishments 2019-20 510 1,023,764,443 267,092.98 which cannot be catered in the present system. The 2020-21 Financial Asset module for the Government is being (till Oct.) 466 81,96,85,740 1,62,676.08 developed to include the loans, advances and other financial assets of the Union Government. The investment of Government in Public Sector Units would be covered iii) (Payment made under major DBT under this module. Schemes in F.Y 2020-21 (till 31st October,2020) 9.7 I.T. Initiatives Scheme Name Transaction Amount (` in crore) The Office of the Controller General of Accounts MGNREGA 38,31,77,636 65,649.53 leverages Information Technology for developing robust, reliable, speedy financial payment, accounting, reporting PMKISAN 17,94,01,538 35,880.31 and reconciliation processes for seamless flow of information NHM 1,11,91,754 1,814.70 from the executing level to the policy making level. 91Annual Report 2020-2021 (i) Treasury Single Account (TSA) monitor Expenditure under the laid down policy of Ten percent (10%) GBS for North In order to minimize the cost of Government East Region by 55 Non-exempt Ministries. borrowings and to enhance the efficiency in Ministry of North Eastern Region had fund flows to Autonomous Bodies (ABs), indicated its requirement for obtaining the Department of Expenditure decided to bring expenditure incurred under various Schemes Autonomous Bodies under the Treasury for the North Eastern Region. The budget Single Account (TSA) system in a phased provision for various schemes of North manner as per the recommendation of the Eastern Region is made under the heads Expenditure Management Commission 2552/4552 and then it is taken to functional (EMC), in their report (September 2015). head and expenditure is then incurred from Guidelines for implementation of TSA System these functional heads of accounts. A report were issued by the Department of was developed on PFMS by providing all the Expenditure, Ministry of Finance. Indian re-appropriations made by various Ministries Council of Medical Research (ICMR) under from 2552/4552 to functional head. The report Ministry of Health and Family Welfare and indicates the funds re-appropriated from North IIT Delhi under Ministry of Human Resources East specific heads to functional heads with Development and Education were selected a presumption that the expenditure would be for Pilot run of the TSA System. close to the re-appropriations carried out and Consequent to the successful would be able to give an indication of the funds implementation of TSA in ICMR and IIT Delhi spent in North East under various schemes on pilot, implementation of TSA System has by the Ministries/ Departments. been further extended and at present, 15 In pursuance of the approval given by Budget ABs have been on-boareded in the TSA Division, Ministry of Finance for developing a system. Just in Time (JiT) releases to the separate flag for NE related expenditure. The specific ABs is being ensured through the underlying principle for identification of TSA system wherein funds are being released expenditure to be incurred against North to the ABs when the payments are actually Eastern Region is that the sanction made by them to the beneficiaries (vendors/ generating authority shall flag the sanctions suppliers/ third parties). The system in respect of releases to NE States and eliminates the float with the ABs to a large Agencies located in NE. Through introducing extent. This will be extended to other ABs check box functionality in Sanction Module once the system stabilizes. in PFMS, identification and monitoring of (ii) PRAKALP (Pratyaksh Kar Lekhankan expenditure to be incurred on North Eastern Pranali) Region have been made easy. PRAKALP system is being developed on the (iv) Integration with Service Plus Public Financial Management System (PFMS) platform to integrate with RBI, Agency Service Plus is an application portal which Banks and TIN 2.0 for reconciliation and helps Ministries/Departments in end to end accounting functions of Direct Taxes for Office digitization of DBT schemes. It is developed of Pr. Chief Controller of Accounts, Central by Ministry of Panchayati Raj. PFMS has Board of Direct Taxes. The different integrated with Service-Plus for payment in stakeholders will share the information DBT schemes and with UMANG Application: through various formats while being integrated UMANG (Unified Mobile Application for New- with PRAKALP Accounting and reporting age Governance) is developed by Ministry of system. Further, the refund of Direct Taxes Electronics and Information Technology which is integrated under the Refund banker (MeitY) and National e-Governance Division with SBI will now be routed through PFMS (NeGD) to drive Mobile Governance in India. instead of direct refund from TIN to SBI. The (v) Development of DBT Dashboard process will be based on standard PFMS REAT integration protocol where SBI will be To enable multiple stakeholders to provide registered as agency in PFMS. insights and process monitoring analysis for effective solution and decision making for (iii) Identification of expenditure to be multiple DBT schemes, a DBT dashboard is incurred on North Eastern Region developed and access have been given to The Ministry of DoNER is mandated to Ministries. 92Department of Expenditure II 9.8 Internal Audit laying down the principles and guidance have been issued. 9.8.1 As per the provisions of the Chapter VII of the 9.8.3 During the period from 01.04.2019 to 31.03.2020, Inspection Code, Internal Audit Division (IAD) set up in the Internal Audit Division has conducted audit of 37 units the office of Controller General of Accounts provides based on risk based control points, against the target of guidance and support to Internal Audit Wings of Civil 35 units. During the 2020-21, this division has introduced Ministries to maintain the requisite technical standards of a new concept of e-Audit for IAWs of civil Ministries/ accounting in the Departmentalized Accounting Offices. Departments on the basis of data available on various This Division is structured in three sections i.e. i) Centre modules of PFMS i.e. GPF, NTRP, EIS, PAO, CDDO, of Excellence ii) Planning & Coordination and iii) Inspection Pension, DBT, E-bills etc. Further, this division also issued Wing meant to upgrade the knowledge, adequate planning guidelines for bill passed during COVID-19 and system and execution of the programs respectively. The O/o CGA protocol for Work From Home (WFH) and also monitoring promotes and encourages application of best audit its report from all Civil Ministries/Departments. practices which are in line with the International Standards 9.8.4 The Internal Audit Division at CGA's office provides such as Risk based Audit, Gender based Audit, guidance to enhance the quality of internal audit in the Programme specific/Scheme specific audits. Civil Ministries/Departments. Ministries/Departments 9.8.2 Risk Based Auditing approach is being prepare Annual Review Reports on the performance of their encouraged by the office of the Controller General of Internal Audit Wings, which are analyzed and summarized Accounts so as to focus on the organizational response by the Internal Audit Division of CGA for the purpose of to the risks it faces in achieving its goals and objectives. consistency and ease of presentation. A consolidated The context for audits is thus provided by the Department's "Annual Review" on the performance of Internal Audit objectives, the associated risks and the risk management Wings and an "Annual Review At a Glance" are prepared process rather than on "controls" and deviations there- and submitted to Secretary (Expenditure) and Addl. from. The role of the internal auditor too shifts from an Secretary (Pers) respectively. The annual review also examination of compliance with controls to a review of the provides the details of units audited and indicates the risk management process. A pragmatic approach requires status of outstanding internal audit paras at the end of that internal audit in conjunction with management financial year. The summarized information regarding undertakes the risk assessment exercise and accordingly outstanding audit paras and units audited by the Internal draws up its audit plan. Several circulars and publications Audit Wings of line Ministries/Departments is as under: Outstanding Internal Audit Paras: Financial Year Opening Balance Paras raised Paras dropped Closing (As on 01.04.2019) during the year during the year Balance(As on 31.3.2020) 2019-20 1,02,862 27,689 25,298 1,05,253 Units audited during 2019-20: Units due Target for 2018-19 Units audited Achievement Remarks 5190 2277 1724 76% Staffing constraints was the main challenge in achieving 100% target. 9.9 Monitoring Cell during 2020-2021 are as under:- 9.9.1 Monitoring Cell, O/o CGA, D/o Expenditure, S.No. Subject Paras submitted to Lok Ministry of Finance is entrusted with the work of co- Sabha Secretariat ordination of timely submission of Action Taken Notes During 01.04.2020 to 18.11.2020. (ATNs) on C&AG paras, Action Taken Replies (ATRs) on PAC paras and Explanatory Notes (ENs) on excess (1) (2) (3) expenditure and savings of Rs. 100 crore and above as 1. C&AG Audit Paras 50 per direction of Public Accounts Committee. Submission 2. PAC Paras 73 of Action Taken Notes/Action Taken Replies and 3. Explanatory Notes 25 Explanatory Notes is being done through the upgraded version of Audit Paras Monitoring System portal, which 9.10 Institute of Government Accounts and facilitates online submission and helps avoid scanning or Finance (INGAF) physical submission of ATNs/ATRs/ENs. 9.10.1 The Institute of Government Accounts & Finance 9.9.2 The number of CAG Audit paras/PAC paras/ (INGAF) is the training arm of the Controller General of Explanatory Notes that have been submitted/settled Accounts, Government of India. Initially known as the Staff through the APMS portal to the Lok Sabha (PAC Branch) Training Institute, it was set up in February, 1992 to train 93Annual Report 2020-2021 personnel in specific areas of accounting, administrative charge of the payment and accounting set up of the matters and financial management. In the years following Ministry, supported by three Controller of Accounts, one its inception, the Institute has evolved to become a premier Deputy Controller of Accounts, two Assistant Controller training center in the spheres of Government Accounting of Accounts, 37 Senior Accounts Officers and and Public Financial Management. In addition, the Institute approximately 300 other staff members at various levels. has Regional Training Centres (RTCs) at Chennai, Kolkata, 10.2 Function of the CCA organisation Aizawl and Mumbai. • Budget related works for five Grants of Department of Economic Affairs, Department 9.10.2 Customized Or Sponsored Training of Financial Services, Department of INGAF is being regularly approached by various Expenditure, Department of Revenue and organizations to provide in-depth training for their staff and Department of Investment and Public Asset Officers from Group A, B & C such as Drawing and Management are integrated with O/o CCA. Disbursing Officers (DDOs)/Heads of Office etc. on a • CCA oversees the payments and accounting variety of subjects. The Institute has formulated and functions of five Departments in Ministry of arranged training courses for such organization and while Finance viz., Department of Economic some of these training courses are undertaken on cost Affairs,Department of Expenditure, sharing basic, in cases of other courses, the entire cost Department of Revenue, Department of is charged to the concerned departments. Over the last Investment and Public Asset Management four years (2016-17 to 2019-20), this Institute has and Department of Financial Services. conducted training programs for the different organization whose duration spanned from one week to five weeks. • Another important function of the CCA is Prominent of these include National Investigation Agency financial reporting to Chief Accounting (NIA), National Sample Survey Organization (NSSO), Authority (i.e. the Secretary of the respective Enforcement Directorate (ED), O/o Registrar General of Department) and to the Controller General of India (ORGI) and so on. Accounts. The monthly accounts and annual 9.10.3 International Cooperation accounts of five Departments which comprise 8 Demands/ Appropriation of the Ministry of INGAF is a premier institute in the field of imparting Finance are sent to the office of the Controller training to participants from countries under ITEC General of Accounts for consolidation into programme in collaboration with Ministry of External the accounts of Government of India. Affairs. Besides this, the DPFM participants of Sri Lanka Institute of Development Administration (SLIDA), Sri Lanka • The Scheme of Departmentalization of have visited INGAF on several occasion for training on Accounts envisaged a system of Public Financial management. In addition, several management accounts. CCA prepares programmes on Public Expenditure Management/Public monthly and quarterly reviews of receipt and Financial Management as well as Internal Audit/Risk Audit expenditure for the information of the have regularly been conducted for the participants from Secretaries of the Departments. The Royal Government of Bhutan, the Government of Bhutan, summary statements are also uploaded on the Government of Afghanistan and Nepal. the Ministry's official website. INGAF has been functioning as the Secretariat • Internal Audit is the responsibility of the CCA. for the Association of Government Accounts Organization In the Ministry of Finance, the Internal Audit of Asia (AGAOA) since November 2007. The purpose of Wing also undertakes the audit of all DDOs, AGAOA is to promote 'professional understanding and attached and subordinate offices including technical cooperation among member institutions through Banks handling Government Schemes such exchange of ideas and experiences in the fields covered as Public Provident Fund, Special Deposit by Government Accounts Organization to ensure Schemes and Senior Citizen Savings transparency, accountability and good governance'. Scheme. There are about 132 DDOs within The Public Financial Management System has the jurisdiction of internal audit. been rolled out by the Controller General of Accounts at • Providing support staff to Controller of Aid the behest of Finance Ministry, Department of Expenditure Accounts and Audit (CAAA). as a cherished Public Finance Management (PFM) Reform in the country. • Pension authorization under the Pension Rules to the officials retiring on INGAF has been nominated as the nodal institute superannuation, seeking voluntary retirement for providing training to officers and officials of Central and to the families of deceased employees/ Government, State Governments, implementing agencies pensioners. and banks on various aspects, modules and operational management of PFMS. Over the last five years (2015-16 • Pension payment to foreign pensioners to 2019- 20), this Institute has been training participants residing in India on behalf of Sri Lanka, in various modules of PFMS. To accelerate the rollout of Singapore, UK and Burma. PFMS, more than 10,000 participants have been trained • Accounting and monitoring of Loans in use of various PFMS modules. advanced to foreign countries. 10. Chief Controller of Accounts • Accounting of total receipts and payments 10.1 The Chief Controller of Accounts (CCA) is in overall in the entire central Government under the 94Department of Expenditure II CGEGIS (Central Government Employees Banks Special Government of India Bonds Group Insurance Scheme) and calculation & issued to Oil companies, FCI, Fertilizer accounting of interest liability of GOI under Companies and Special Securities issue both the savings fund and Insurance fund against Securitization of balances under components of this scheme. Postal life Insurance which are kept under • Oversee the settlement of C&AG audit Para. Public Account. • Responsible for transfer of funds to and from i) Accounting of different Saving Schemes of Government of India CFI to Public Account. There are 14 such Funds in the Department of Economic Affairs, j) Preparation of the Quarterly and Annual 2 in Department of Revenue, and one in Statement of Internal Debt balances for Department of Expenditure. submission to the Finance Accounts Section • Formulation of detailed Accounting of the Controller General of Accounts. procedures in respect of the Funds k) Watching the timely payment of Principal and maintained under Public Account of India. payment of interest in respect of all • Settlement of the cases relating to combined Securities, Loans, Special Securities, Compensation & Other Bonds etc. and pension, pro-rata pension, leave further reconciliation with Quarterly encashment, leave salary and pension Statement received from DGBA. Central contributions, revision of pre-2016 pension office, Mumbai. cases etc. of the absorbed employees of SPMCIL, after the corporatization of Mints l) Reconciliation of all Treasury Bills & Cash and Presses, in coordination with the Management Bills with Monthly and Quarterly Corporate office of SPMCIL, field units and Statement received from Public Debt Office, the administrative division in the Ministry. Mumbai and DGBA, Central Office, Mumbai. 10.3 Highlights of important functions m) Calculation of Average Rate of Interest chargeable on the Capital Outlay of the 10.3.1 Internal debt accounting and reporting: Central Government. a) In respect of New Loans this office accounts 10.3.2 Monitoring system for transfer of funds from for all transactions connected with the issue the Ministry of Finance to State Governments of New Loans on the basis of detailed a) Under the system of Public Financial information supplied by the Reserve Bank of Management System (PFMS), under the India. aegis of CGA, scheme wise plan funds b) Accounting of the discharged loans which released to the states are visible on the PFMS inter-alia involves the reconciliation of loan portal. Under this system, the sanctions are balances as in the books of this office with received from PF I Division on the "OCEAN" those of the Reserve Bank of India and to portal. Those sanctions are accepted and prepare a Statement (14A) & further settled on the OCEAN portal from where the submitted to Finance Account Section, CGA data get transmitted to Public Financial Office. Accounting of Buyback of Government Management system (PFMS) Portal. Securities raised by Government of India. b) The sanctions (in hard copies) are received c) Compilation of Consolidated Abstract of from various departments including Public Rupee Loans (Transaction connected with Finance State I (PFS-I) Division. The the loans dealt with in Internal Debt & sanctions are processed in the PFMS portal. Account Section are also brought to account The Inter Government Advices (IGA) are through this abstract. generated and faxed to RBI, Nagpur in respect of 29 States. IGA advice in respect d) Accounting of Securities, shares etc., of State Government of Sikkim and Delhi are purchased or otherwise acquired held in the sent to RBI, Delhi by special messenger. Cash Balances; Interest or dividend thereon. c) Grants-in-aid amounting to ` 201125.06 crore e) Watching the timely payment of principal and towards Externally Aided Projects, Finance payment of interest in respect of all loans Commission Grants including G-i-A for State mentioned here. Disaster Response Fund & Compensation f) Accounting of all securities issued to to State/UT Government for Revenue Loss International Financial Institution like and ` 1624.63 crore towards assistance to International Monetary Fund, International states from NDRF for calamities of severe Bank for Reconstruction and Development nature were released to state government etc. through PFMS portal. g) Accounting of Special Government of India d) During the Financial Year 2020-21 (up to Securities issued against investment made 18.11.2020) ` 32258.98 crore worth loans (Block by National Small Saving Fund (NSSF). loans, Back to Back Loans and B2B Loans to h) Accounting of Special Govt. of India states in lieu of GST Compensation shortfall) Securities/ Bonds issued to Nationalized were released to state govt. Apart from the 95Annual Report 2020-2021 above, ` 1914.47 crore were released to UTs portal has been reduced to one day and thus (Delhi, J&K and Puducherry) till 18.11.2020 it has brought the process closer to the real through Letter of Authorisations (LOAs) out of time basis. Rs.1,10,208 crore approved as loan to States/ UTs in the Financial Year 2020-21. g) In the case of any default made by State Government in making repayment of Principal e) State share of Taxes to the tune of and Interest, the Consolidated Fund of State Rs.297174.40 Crore was transferred to state/ maintained by RBI is debited on the advice UT Governments through PFMS portal. of this office. f) The time gap between the processing of 10.3.3 Details of loans Advanced to States during sanctions to the job of e-Lekha for PFMS 2020-21 (upto 17th November,2020) (` in Crore) S. Name of States Opening Closing Total Loan Principal Interest Closing No. Balance Balance given w.e.f. repaid repaid Balance as on as on 01.04.2020 to upto 18th upto 18th upto 18th 01.01.2020 31.03.2020 18.11.2020 Nov. 2020 Nov. 2020 Nov. 2020 1 2 3 4 5 6 (3+4-5) 1 Andhra Pradesh 10800.62 10908.27 1232.11 706.03 238.55 11434.34 2 Arunachal Pradesh 119.69 112.44 63.62 14.48 5.24 161.58 3 Assam 1086.11 1077.79 292.05 89.66 54.41 1280.17 4 Bihar 12043.04 12090.38 2306.90 526.58 240.16 13870.69 5 Chhattisgarh 2774.62 2775.74 245.22 123.38 71.86 2897.58 6 Goa 1022.81 992.25 223.45 52.63 18.24 1163.07 7 Gujarat 7096.20 7431.72 3261.72 447.90 192.74 10245.54 8 Haryana 1985.63 1872.21 985.44 178.81 47.84 2678.85 9 Himachal Pradesh 1055.43 1040.94 640.72 56.22 50.08 1625.44 10 Jammu & Kashmir 836.34 800.99 10.70 71.00 38.45 740.68 11 Jharkhand 2577.96 2587.45 312.78 100.40 61.01 2799.82 12 Karnataka 14143.76 13883.45 3534.11 836.92 321.47 16580.64 13 Kerala 8812.54 8666.33 105.90 386.90 165.73 8385.33 14 Madhya Pradesh 20300.23 21009.36 4121.95 803.98 444.47 24327.33 15 Maharashtra 6532.29 6370.93 3925.78 530.59 184.27 9766.11 16 Manipur 256.25 244.90 114.82 25.57 9.81 334.16 17 Meghalaya 162.31 157.57 138.27 12.03 7.75 283.81 18 Mizoram 190.96 184.77 11.38 13.42 9.28 182.74 19 Nagaland 90.99 87.23 104.46 11.72 4.18 179.97 20 Orissa 7928.61 7826.15 1459.77 601.34 142.30 8684.59 21 Punjab 4676.42 4652.37 115.34 250.84 89.87 4516.87 22 Rajasthan 17220.02 17266.21 1278.81 607.22 312.97 17937.79 23 Sikkim 88.09 85.72 1.30 5.35 4.16 81.68 24 Telangana 9091.28 7984.57 4407.26 281.57 92.20 12110.26 25 Tamil Nadu 16330.42 17852.62 -1.19 822.41 305.87 17029.02 26 Tripura 148.62 139.74 151.48 17.28 6.77 273.93 27 Uttarakhand 1549.91 802.76 2024.72 30.11 40.85 2797.37 28 Uttar Pradesh 10763.70 11446.42 753.65 946.28 348.29 11253.78 29 West Bengal 15178.81 15034.15 436.50 646.15 395.62 14824.51 TOTAL 174863.67 175385.42 32258.98 9196.76 3904.43 198447.64 96Department of Expenditure II 10.3.4: Details of Grants in Aid to States released by Department of Expenditure during 2020-21 (w.e.f 01.04.2020 to 17.11.2020) (` in Crore) S. No. Name of States Total 1 Andhra Pradesh 7603.61 2 Arunachal Pradesh 599.30 3 Assam 7267.26 4 Bihar 4425.00 5 Chhattisgarh 1301.71 6 Goa 61.50 7 Gujarat 3690.50 8 Haryana 1182.00 9 Himachal Pradesh 8454.46 10 Jammu & Kashmir 96.26 11 Jharkhand 1535.00 12 Karnataka 3174.51 13 Kerala 11578.33 14 Maddhya Pradesh 4782.92 15 Maharashtra 7541.94 16 Manipur 2168.05 17 Meghalaya 616.79 18 Mizoram 1142.96 19 Nagaland 3004.09 20 Orissa 2476.25 21 Punjab 7999.83 22 Rajasthan 3603.17 23 Sikkim 391.33 24 Tamilnadu 5866.05 25 Telangana 1817.00 26 Tripura 2342.27 27 Uttar Pradesh 8190.00 28 Uttarakhand 4589.29 29 West Bengal 7621.38 Total 115122.78 Grants in Aid to States/UTs by Department of Revenue(Compensation to State/UT Government for Revenue Loss ` 86002.28 crore due to phasing out the Goods & Services Tax (GST). Total Grant in aid released to state ` 201125.06/- crore 97Annual Report 2020-2021 10.3.5: Balance under important component of Internal Debt (including Major Small Saving Schemes & Special Deposits) (` Rs. In Crores) S.N. NAME OF SCHEME BALANCE NET ADDITION BALANCE NET ADDITION BALANCE AS ON JAN 19 TO Oct. AS ON 01- Nov. 19 TO AS ON 01.01.2019 19 11.2019 Oct. 2020 3 1 . 1 0 . 2 020 2 3 4 5 6 7 A Internal Debt 1 Market Loan 5391972 503744 5895716 813174 6708890 2 Special Securities issued to 99637 2099 101736 399 102135 International Institutions 3 Compensation and Other Bonds 46447 2583 49030 17481 66511 4 14 day Treasury Bills 141376 -31121 110255 -2964 107291 5 91 day Treasury Bills 178711 8711 187422 34329 221751 6 182 day Treasury Bills 138264 8769 147033 165705 312738 7 364 day Treasury Bills 217096 -14306 202790 199790 402580 8 Special Securities issued against 528535 159676 688211 236176 924387 National Small Saving Fund 9 Marketable Securities issued in 47688 -7000 40688 -5000 35688 conversion of Special Securities 10 Special Security issued against PLI 20894 0 20894 0 20894 Fund 11 Sovereign Gold Bond Scheme, 2015 7124 1585 8709 12014 20723 12 Gold Monetisation Scheme,2015 2450 446 2896 1505 4401 13 Special Securities issued to Banks & 131533 119281 250814 15534 266348 Financial Institutions A Total Internal Debt 6951727 754467 7706194 1488143 9194337 B Major Small Savings Schemes 1 Balances under Senior Citizen Saving 73132 29345 102477 42503 144980 Scheme 2004 (collection through bank only) 2 SukanyaSamriddhi Account 10485 5652 16137 7888 24025 3 Collection of fund under PPF – 1968 444140 64132 508272 72232 580504 Scheme (collection through bank only) Total Major Small Savings Scheme 527757 99129 626886 122623 749509 C Special Deposits and Accounts 1 Balances under Special Deposit 102161 -374 101787 -964 100823 Superannuation and Gratuity Fund - 1975 2 Special Securities issued to 9996 9996 0 9996 Nationalised Banks 3 Petroleum Bonds 10.5% Oil Company 130923 130923 0 130923 G.O.I.S.B. 2006 4 Special Securities issued to Stressed 4226 -110 4116 -210 3906 Assets Stabilisation Fund 5 Special Securities issued to FCI 16200 16200 0 16200 6 Special Securities issued to Fertilizers 15705 15705 0 15705 Companies as Compensation towards Fertilizer Subsidy 7 Special Securities issued to 1831 163 1994 50 2044 REC/UTI/IDBI & others C Total Special Deposits and Accounts 281042 -321 280721 -1124 279597 TOTAL (A+B+C) 7760526 853275 8613801 1609642 10223443 98Department of Expenditure II 10.3.6 Internal Audit Nagpur within the prescribed time limits i.e. T+1 day (excluding holiday) for public sector a. The Revised Charter of Financial Advisors banks and T+1 day (including holidays for released by the Ministry of Finance envisages private banks). Banks are liable to pay penal the Roles and Responsibilities of the Chief interest for the entire period commencing from Controller of Accounts. Accordingly, Internal the date of receipt at receiving Branch of the Audit functions under the control and Bank to the date of settlement with RBI supervision of the CCA focuses on the Audit (CAS) Nagpur. of all DDOs attached and subordinate offices including Banks handling Government 10.3.7 Achievements Schemes such as Public Provident Fund, 1) Recovery of outstanding Penal Interest from Special Deposit Scheme and Senior Citizen Banks: Audit of banks handling PPF-1968, Deposit Scheme. This involves appraisal, SCSS- 2004 & Sukanya Samridhi Account- monitoring and evaluation of individual 2016 scheme is conducted by Office of CCA scheme assessment of adequacy and (Finance) to check timely deposit of effectiveness of internal controls in general, collections pertaining to PPF & SCSS and soundness of financial systems and Schemes in CAS, Nagpur within prescribed reliability of financial and accounting reports time limit. Penalty is levied on banks not in particular. Identification and monitoring of adhering to the prescribed time limit. "In case risk factors (including those contained in the of delays beyond the permissible period (i.e. Outcome Budget). During the year 2020-21, within T+1 days including holidays for private Audits of 12 units were conducted up-to sector banks and excluding holidays for 19.11.2020 and 6 more units will likely to be public sector banks), the penalty payable by audited upto 31.03.2021. accredited banks on such delayed remittances shall be the applicable rate of b. The penal interest is levied on all remittances, interest payable to the depositor plus 0.5% which are not credited to Government in case of delays upto 30 days and plus 1% Account at Central Accounts Section RBI, in case of delays beyond 30 days." Details of Delayed Penal Interest of all the Banks regarding PPF, SCSS and SSA (as on 19/11/2020) (Amount in `) PPF SCSS SSA Total Outstanding as on 31/03/2019 52708992.81 17805865.09 - 70514857.90 Levied during 2019-20 4266258 53032767 - 57299025 Recovered during 2019-20 43031577 2883042 - 45914619 Contested and dropped during 2019-20 0 0 - 0 Total outstanding as on 31/03/2020 13943673.81 67955590.09 - 81899263.90 Levied during 2020-21 (upto 19/11/2020) 91609170 82719885 4414679 178743734 outstanding as on 19/11/2020 105552843.8 150675475.1 4414679 260642997.90 Recovered during 2020-21 (upto 19/11/2020) 102259 25259435 0 25361694 Contested and dropped during 2020-21(upto 19/11/2020) 0 0 0 0 Net outstanding as on 19/11/2020 105450584.8 125416040.1 4414679 235281303.90 2) Authorization of bank branches for participation E-payments are made to concerned parties and maximum in Small Saving Schemes. payments are being made electronically. The implementation of PFMS coupled with extensive training All branches of Nationalized Public Sector Bank and ICICI, to the concerned officials and peer to peer knowledge HDFC and Axis Banks have been authorized for handling sharing has resulted in less adaptation time, more Small Saving Schemes of Ministry of Finance. organisational efficiency, less response time in payments, improved record keeping/tracking through digital logs and 3) All the Pay and Accounts offices of the Ministry more transparency. have implemented Public Financial Management System. All payments are being made through PFMS. Use of 4) This Department has moved to Government e- cheques as the mode of payment has been eliminated. Market Place for nearly all procurements. Officials were 99Annual Report 2020-2021 provided training on GeM and the procurements are being and 26,497 authorities were issued in fresh and revision made through GeM. Procurements are now more of pension cases respectively. streamlined, efficient and transparent and have Projection or estimate for the remaining period:- considerably reduced the hurdles in the procurement process, providing the purchasing department with more (i) Fresh Pension Case- 11,000 (Approx.) choices and better recordkeeping as the bills are in digital format. (ii) Revision of pension case- 13,249 (Approx.) 5) The entire pension cases of this department are 11.3 Significant developments/ policy decisions taken being processed through the "Bhavishya Portal" resulting during the year for the development of a particular sector, in speedy processing of the pension related work. The including initiatives for improving delivery of public services check points in the "Bhavishya Portal" ensure the and for ensuring "inclusive growth" procedural accuracy of the pension cases. Pension cases 1. Electronic- Pension Payment Order (e-PPO) of Pre-2016 are being revised electronically on the E- portal Project- Paperless movement of digitally signed e-Special eppo.nic.in/revision. Seal Authority (e-SSA) from Central Pension Accounting 6) All work related to feeding of budget, Office (CPAO) to 39 Central Pension Processing Centres supplementary, re-appropriation and surrender orders for (CPPCs) of 24 Authorized Banks for pension is in operation each grant along with mapping of heads to each scheme and all the CPPCs are getting digitally signed Special Seal had been successfully done in 2019-20. Authority (SSA) in fresh as well as the revision pension cases directly into their SFTP servers. 11. Central Pension Accounting Office 2. Online Allotment of 12 digits Pension 11.1 The Central Pension Accounting Office (CPAO) Payment Orders (PPOs) number: With effect from 1st was established w.e.f. 1st Jan, 1990 for Payment and Jan, 2016, Central Pension Accounting Office (CPAO) has Accounting of Central (Civil) Pensioners and Pension to started facility of online allotment of PPO numbers on Freedom Fighters etc. CPAO is a subordinate office under CPAO website to Pay & Accounts Offices to avoid paper the Office of the Controller General of Accounts, Ministry based allotment of PPO numbers. This has resulted in of Finance, Department of Expenditure. It has been less paperwork & the process has been faster than earlier. entrusted with the responsibility of administering the It has also resulted in saving time & postage cost. scheme of payment of pension to Central Government 3. Grievance Mechanism- A fully functional (Civil) Pensioners through authorized Banks. Its core Grievance Redressal Mechanism (GRM) is in place where functions are: a pensioner can lodge grievance through telephone on Toll • Issue of Special Seal Authorities(SSAs) Free No, website, e-mail, letters or personal visit. The authorizing payment of pension in fresh as queries and grievances of pensioners are attended on well as revision of pension cases to the highest priority by qualified personnel. CPPCs(Central Pension Processing 4. Facility to download Special Seal Authority (PPO) Centers) of pension disbursing Banks; from CPAO's website by using login and password provided • Preparation of Budget for the Pension Grant by CPAO has been given to pensioners. Consequently, and accounting thereof; they need not separately approach CPAO to provide copies of their SSAs issued to the banks. This facility ensures • Audit of CPPCs of pension disbursing digital presence and availability of records for pensioners. Banks; 5. All Banks have confirmed payment of revision of • Maintenance of Data Bank of Central Civil pension & arrears of Pension for 7th CPC for about 9.10 Pensioners containing all details indicated Lakhs pensioners. CPAO is also compiling the information in the PPOs and Revision Authorities; separately based upon the e-scrolls received from banks. • Handle the grievances of Central Civil 11.4 e-Governance Initiatives of CPAO Pensioners 11.4.1 CPAO is a fully computerized office. A wide range • As an interim arrangement, payment of of software's/packages have been developed/implemented provisional pension to the pensioners/family in this office for streamlining pension authorization, pensioners covered under New Pension accounting, Grievance Redressal etc. which include:- Scheme as per orders of Ministry of Finance (i) Pension Authorization Retrieval & 11.2 Achievements: CPAO issues SSAs to the Accounting System (PARAS):- All the CPPCs of Banks in fresh and revision of pension cases. pension processing activities from receipt to In the financial year 2020-21 (as on 23rd Nov,2020), 23,758 dispatch are managed through PARAS. The 100Department of Expenditure II web interface of PARAS provides the related their basic details and also bank and PAO information to pensioners; PAOs/Ministries details. They can update/provide their contact & Banks. About 14 lakhs Central Civil pension details like mobile number, email, and cases have been processed by CPAO through Aadhaar number. this software thereby creating digital database b) Digital Record of Pension & Revision of these pensioners. Various MIS reports Orders: Pensioners can view list of all are also generated by this software for the Pension Payments & Revision Orders sent purpose of monitoring. to banks from CPAO, authorization of (ii) Web Responsive Pensioners' Service payment of pension with details like PPO& (WRPS):- Digital India campaign of SSA No. and date sent from CPAO to bank. Government of India emphasizes that c) Download Facility of Pension/Revision Government services should be made Orders Sent to Banks: Pensioners can available to the citizens electronically by download the Pension/Revision Orders sent improving online infrastructure and by increasing internet connectivity or by making to Banks from CPAO. the country digitally empowered in the field d) Pension Processing Status Tracking: Both of technology. Under Digital India campaign, retired and retiring pensioners can track Central Pension Accounting Office (CPAO), status of their pension cases both in fresh M/o Finance took two important steps as well as revision cases like date of receipt towards empowerment of Central Civil of their cases in CPAO and date sent from Pensioners and other stakeholders. The then CPAO to bank. Hon'ble Union Minister for Finance & Corporate Affairs, Shri Arun Jaitley launched e) Monthly Details of Pension Payment: "Web Responsive Pensioners' Service of Pensioners can view the details of monthly CPAO on 14th Sep, 2016 and electronic- payments of pension, which are credited to Pension Payment Order (e-PPO) on 1st their accounts by the bank, i.e. their basic March, 2018. This is a milestone for CPAO pension, dearness relief, medical allowance, towards its commitment to efficiently & arrear payments, etc. This information is effectively serve the central civil pensioners. being made available from the monthly scrolls received from the banks. Previous six months WRPS provides various services including transactions payment details are made Pension & Payment information, online available. Pension Process Tracking & online Grievance Redressal and Tracking for the f) Grievance Redressal: Apart from pensioners. Under Web Responsive computers, Pensioners can now lodge their Pensioners' Service (WRPS), facilities for grievances from their mobile devices and view/ pensioners' grievance redressal and track the status of their grievances. Besides uploading of list of retiring employees by lodging their grievances online on CPAO Ministries/Departments have been provided. website, facility to lodge grievance by letter, It is an important Digital India initiative for fax, email, Toll free Number and personal improving transparency, accountability and visits and tracking the status is already responsiveness in pension processing and provided. After receiving the grievances from disbursements. This facility ensures digital pensioners; CPAO forwards the same online presence and availability of records for to the banks and field offices for redressal pensioner. An instruction video on Web and status is updated in its website for the Responsive Pensioners Service (WRPS) has information of pensioners. been prepared and uploaded on CPAO Website to assist the pensioners. SMS on g) SMS Facility: Pensioners are now provided revision of the pension is being sent to the SMS facility for pension process status at pensioners along with a link to download the CPAO and at the stage of grievance revision authority. registration & disposal.  web link https://youtu.be/2yXIPZT8OqY h) Links to Jeevan Pramaan, Bhavishya and CPENGRAMS Portals: To facilitate the Pensioners can now avail the following services pensioners for submission of Digital Life by registering on CPAO website using their PPO number Certificate (DLC) in the month of November, and date of birth & date of retirement/date of death: a link to Jeevan Pramaan Portal has been a) Pensioner Profile: Pensioners can view provided on CPAO website.For those 101Annual Report 2020-2021 Government servants who are going to retire pensioners/family pensioners and to lodge soon, a link has been established with their grievances. This is over and above the Bhavishya Portal of DP&PW to enable them latest modes available to the pensioners to to track the status of their pension cases contact and communicate with CPAO. even before it reaches CPAO. A link to Various instructive videos have been made CPENGRAMS (Central Pension Grievance for the better use of the WRPS facility, e- Redress and Monitoring System) has also Revision Utility for pensioners and other been provided so that if pensioners desire, stakeholders. they can lodge and track their grievances in Twitter @ CPAO_Social CPENGRAM. Facebook @ cpaosocial i) Dashboards: For the purpose of monitoring, a dashboard facility with MIS reports has YouTube @ CPAO ONLINE Delhi been provided to following: 11.4.2 All these initiatives aim at establishing seamless • Pensioners: In the pensioners' dashboard, processing and accounting of pension disbursement to facilities to view personal and pension details, enhance efficiency and effectiveness of the pension delivery last six payments transactions, view and mechanism. download of SSA, registration and tracking of grievances have been provided. (i) e-PPO/e-revision:- This system has been • Banks: In the banks dashboard, detailed developed for sending online digitally signed authorities from CPAO to CPPCs of banks information on pensioners grievances forwarded to the banks and their settlement for arranging payment to the pensioners. At status has been provided to the heads of present, under this project, digitally signed CPPCs and Government Accounting revision authorities are being sent to CPPCs Divisions/Government Business Units. from CPAO. • Ministries/Departments: Dashboards have (ii) Grievances Redressal Management been created for PAOs, Chief Controller of Software:- NIC, CPAO has developed a Accounts & Joint Secretaries (Administration) software for Grievance handling where to track the status of Grievances pertaining grievances received from pensioners are to their Ministries/Departments and take registered and processed. timely action to dispose of the Grievances. Further, Dashboards are also provided on (iii) e-scroll software:- This software has been details of uploading of quarterly lists of retiring developed and introduced recently for government employees so that they may processing of payment and receipt scrolls keep tracking of progress on providing these from CPPCs and 'put through statement' from lists and pendency in processing of such Reserve Bank of India for speedy accounting cases. The status of list of retiring employees and reconciliation at CPAO. is also provided in the Dashboards for Financial Advisors. (iv) Database Management Software:- Software for comparison of bank's database with j. Social Media Presence of CPAO- Official Social Media Accounts of Central Pension CPAO's database of pensioners has been Accounting Office (CPAO) on platforms developed and exception reports are Facebook, Twitter and YouTube have been generated by it to clean up the database and created to provide better services to the establish a completely matching database. 102Department of Expenditure II 103Annual Report 2020-2021 104Department of Expenditure II 105Department of Revenue III Chapter - III Department of Revenue 1. Organisation and Functions xiv. Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976; 1.1 The Department of Revenue functions under the overall direction and control of the Secretary (Revenue). xv. Indian Stamp Act, 1899 (to the extent falling within jurisdiction of the Union); It exercises control in respect of matters relating to all the Direct and Indirect Union Taxes through two Statutory xvi. Conservation of Foreign Exchange and Boards, namely, the Central Board of Direct Taxes Prevention of Smuggling Activities Act, 1974; (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC). Each Board is headed by a Chairman xvii. Prevention of Money Laundering Act, 2002; who is also ex-officio Special Secretary to the Government xviii. Foreign Exchange Management Act, 1999. of India. Matters relating to the levy and collection of all the Direct taxes are looked after by the CBDT whereas xix. Union Territory Goods & Services Tax Act, 2017 those relating to levy and collection of Goods and Service Taxes (GST), Customs and Central Excise duties, Service xx. Goods & Services Tax (compensation to States) Tax and other Indirect taxes fall within the purview of the Act, 2017 CBIC. The two Boards were constituted under the Central xxi. Central Goods & Services Tax Act, 2017 Board of Revenue Act, 1963. Each Board has a sanctioned strength of 6 (six) members. xxii. State Goods & Services Tax Act, 2017; and 1.2 The Department of Revenue administers the xxiii. Integrated Goods & Services Tax Act, 2017 following Acts: 1.3 The Department looks after the matters relating i. Income Tax Act, 1961; to the above-mentioned Acts through the following attached/subordinate offices: ii. Black Money (Undisclosed Foreign Income & Assets) Imposition of Tax Act, 2015 i. Commissionerates/Directorates under Central Board of Indirect Taxes and Customs; iii. Benami Transactions (Prohibition) Act, 1988; ii. Commissionerates/Directorates under Central iv. Chapter-VII of Finance (No.2) Act, 2004 (Relating Board of Direct Taxes; to Levy of Securities Transactions Tax) iii. Central Economic Intelligence Bureau; v. Chapter VII of Finance Act 2005 (Relating to Banking Cash Transaction Tax) iv. Directorate of Enforcement; v. Central Bureau of Narcotics; vi. Chapter V of Finance Act, 1994 (relating to Service Tax) vi. Chief Controller of Factories; vii. Central Excise Act, 1944 and related matters; vii. Appellate Tribunal under SAFEMA; viii. Customs Act, 1962 and related matters; viii. Income Tax Settlement Commission; ix. Central Sales Tax Act, 1956; ix. Customs and Central Excise Settlement Commission; x. Custom Tariff Act, 1975 x. Customs, Excise and Service Tax Appellate xi. Central Excise Tariff Act 1985 Tribunal; xii. Narcotic Drugs and Psychotropic Substances xi. Authority for Advance Rulings (for Income Tax Act, 1985; and Central Excise, Customs & Service Tax); xiii. Prevention of Illicit Traffic in Narcotic Drugs and xii. National Committee for Promotion of Social and Psychotropic Substances Act, 1988; Economic Welfare; 107Annual Report 2020-2021 xiii. Competent Authorities appointed under xv. Adjudicating Authority under Prevention of Money Smugglers and Foreign Exchange Manipulators Laundering Act. (Forfeiture of Property) Act, 1976 & Narcotic xvi. Revision Application Unit. Drugs and Psychotropic Substances Act, 1985; 1.4 A comparison of the collection of Direct and xiv. Financial Intelligence Unit, India (FIU-IND); Indirect taxes for the period of F.Y. 2019-20 and F.Y. 2020-21 (provisional) is as follows: (`. in crore) Amount collected S. No. Nature of Taxes 2020-21 2019-20 (Provisional) 1. Corporate Income Tax 5,56,876 3,11,377* 2. Personal Income Tax (excluding STT & WT) 4,80,343 2,93,497* 3. Other Direct Taxes (WT, STT, etc.) 13,462 12,785* 4. Total Direct Taxes (1+2+3) 10,50,681 6,17,659* 5. GST (CGST, IGST & Comp. Cess) 5,98,749 3,31,104** 6. Non-GST (Customs, Central Excise & Service [Tax Arrears]) 3,54,764 2,98,616** 7. Total Indirect Taxes (5+6) 9,53,513 6,29,720** * Figures of F.Y. 2020-21 are provisional and upto 31st December, 2020 ** Figures of F.Y. 2020-21 are provisional and upto November, 2020 1.5 The details of representation of SCs, STs and direct tax laws in India. The CBDT consists of a Chairman OBCs are at Annexure-I. and six Members and is assisted by the following Directorates: 1.6 The details of representation of persons with disabilities are at Annexure-II. (i) Principal Directorate General of Income Tax 1.7 The details of ATNs in respect of audit (Administration & Tax Payer Services) observations are at Annexure-III. a) Directorate of Income Tax (Public Relations, 1.8 An Organisation Chart of Department of Revenue Printing and Publications) is given at Annexure-IV. b) Directorate of Income Tax (Organization & 2. Central Board of Direct Taxes (CBDT) Management Services) 1.5 The details of representation of SCs, STs and c) Directorate of Income Tax (Tax Payer OBCs are at Annexure-I. Services-I) 1.6 The details of representation of persons with d) Directorate of Income Tax (Tax Payer disabilities are at Annexure-II. Services -II) 1.7 The details of ATNs in respect of audit observations are at Annexure-III. e) Statistics (Research & Statistics) Wing 1.8 An Organisation Chart of Department of Revenue f) Directorate of Income Tax (Infrastructure) is given at Annexure-IV. g) Directorate of Income Tax (Expenditure 2.1 Organization and functions Budget) The Central Board of Direct Taxes (CBDT), created by the Central Boards of Revenue Act 1963, is the apex (ii) Principal Directorate General of Income Tax body entrusted with the responsibility of administering (Systems) 108Department of Revenue III (iii) Principal Directorate General of Income Tax Nagpur and Regional Training Institutes at different (Training) locations function under the overall supervision of a Director General of Income Tax (Training) to cater to the (iv) Principal Directorate General of Income Tax training needs of officers and officials. (Human Resource Development) The Principal Chief Controller of Accounts, CBDT with a) Directorate of Income Tax (Human Resource the assistance of Zonal Accounts Officers is responsible Development) for accounting of revenue collections as well as expenditure of the Income Tax Department. b) Directorate of income Tax (Exam & Official Language) 2.2 Direct Taxes Collection and Cost of Collection (v) Principal Directorate General of Income Tax (Vigilance) The performance of the Income Tax Department during the FY 2020-21 in various key areas is as under: (vi) Principal Directorate General of Income Tax (Legal & Research) (i) The collection of direct taxes has decreased from ` 6,93,519 crores in Financial Year 2019-20 (up a) Directorate of Income Tax (Legal & to 31.12.2019) to ` 6,17,659 crores (provisional)* Research) in Financial Year 2020-21 (up to 31.12.2020), i.e. a growth of (-)10.9% over the last Financial Year. b) Directorate of Income Tax (Audit & The growth rate under corporate Income Tax is Inspection) (-)15.73% and growth rate under Personal Income Tax** is (-)5.6%. In Financial Year 2020- c) Directorate of Income Tax (Recovery) 21, about 46.83% of the Budget Estimate of Income Tax Department is the subordinate `13,19,000 crores has been collected till 31.12.2020. organization of the CBDT having jurisdiction across the country. It is divided into 18 regions headed by Principal (ii) TDS collection for Financial Year 2020-21 (up to Chief Commissioners of Income Tax, who are entrusted 31.12.2020) is at `3,58,246 crores showing with the supervision and collection of direct taxes and growth of (-)1.2% over the last financial year for taxpayer services. The Directors General of Income Tax the corresponding period (up to 31.12.2019) and (Investigation) supervise the investigation functions and constitutes 46.05% of the gross direct tax deal with tax evasion and unearthing unaccounted collection. income. The Director General of Income Tax (Intelligence and Criminal Investigation) supervises the intelligence (iii) During the Financial Year 2020-21 (up to gathering and investigation in tax related crimes. The 31.12.2020), collection under Advance Tax is `3,08,806 crores showing a growth of (-)5.6% Chief Commissioner of Income Tax (Exemptions) over the last financial year for the corresponding supervises the work of exemption and non-profit period (up to 31.12.2019) and constitutes 39.70% organizations/ trusts across the country and the Principal of the gross direct tax collection. Chief Commissioner of Income Tax (International Taxation) supervises the work in the field of International (iv) Cost of collection remained low at 0.66% Tax and Transfer Pricing. (provisional) during 2019-20 meaning thereby that the Income Tax Department spends only 66 The Principal Chief Commissioners of Income paisa for each `100 collected. Tax are assisted by Chief Commissioners, Principal Commissioners and Commissioners of Income Tax and * Provisional (Source Pr.CCA, CBDT) Principal Directors General/ Directors General of Income ** Personal Income Tax includes STT Tax are assisted by Principal Directors / Additional Directors General of Income Tax within their jurisdictions. 2.3 Tax Policy and Legislation (TPL) Division Commissioners of Income Tax posted as Commissioners of Income Tax (Appeals) perform appellate functions and Tax policies are formulated to mobilize financial adjudication of disputes. The Income Tax department has resources for the nation, achieve sustained growth of the its presence in 530 cities and towns across the country, economy, ensure macroeconomic stability and promote having more than 8.45 crore Taxpayers (AY 2018-19). social welfare by providing fiscal incentives for investments in the social sector. The underlying theme The National Academy of Direct Taxes (NADT), of the tax proposals for the Budget 2020-21 is to focus 109Annual Report 2020-2021 on governance and financial sector to enhance the ease income is taxable at the rate lower than the rate of living. Continuing this aspiration, it focuses on providing of DDT, the Finance Act, 2020 removed the momentum to the buoyancy in direct taxes through Dividend Distribution Tax and reverted to classical deepening and widening of the tax base, reducing system of taxing dividends in the hands of corporate tax rate, promoting horizontal equity in personal shareholders. income tax, reducing litigations, simplifying tax procedure, (B) Widening and deepening of tax base: reducing the tax rates, and enhancing the effectiveness, transparency and accountability of the tax administration. In this endeavour, few of the legislative measures taken (i) TDS on E-commerce transactions: In order to recently are mentioned below: widen and deepen the tax net, section 194-O has been inserted to the Income-tax Act, 1961 (the (A) Reduction in tax rates & Simplification of direct Act) vide Finance Act, 2020 to provide that an e- tax laws commerce operator shall deduct TDS on all payments or credits to e-commerce participants (i) Corporate Tax -The Finance (No.2) Act, 2019 at the rate of 1% in PAN/Aadhaar cases and 5% reduced the base corporate tax rate for small and in non-PAN/Aadhaar cases. In order to provide medium sized domestic companies whose relief to small businessman, exemption is turnover does not exceed ` 400 crore to 25 %. provided on payment made to an individual and Further, in order to attract fresh investment, HUF e-commerce participants who receives up create jobs and stimulate overall economic to ` 5 lakh and furnishes PAN/Aadhaar. growth, The Taxation Laws (Amendment) Ordinance, 2019 was promulgated on (ii) Enlarging the scope of TDS on interest: Section 20.09.2019. Subsequently, the Ordinance has 194A of the Act has been amended vide Finance been enacted as the Taxation Laws Act 2020 in order to extend the TDS on interest (Amendment) Act, 2019. The said Act has, inter- paid by certain large co-operative societies alia, further reduced the corporate tax rates. It whose gross receipts exceeds fifty crore rupees provides that existing domestic companies may during the last financial year. opt for a concessional tax regime at an effective tax rate of 25.17% (22% tax, plus surcharge at (iii) Widening the scope of Tax Collection at Source 10% and cess at 4%) if they do not avail the (TCS): Through the Finance Act, 2020, section specified deductions and incentives. Further, 206C has been amended to: new manufacturing domestic companies set up on or after 01.10.2019 may opt to be taxed at an a) provide for collection of tax at the rate of 5% –– effective tax rate of 17.16% (15% tax, plus (1) by an authorised dealer for remittance out of surcharge at 10% and cess at 4%), provided that India under the Liberalised Remittance Scheme they do not avail of any specified incentives or of the Reserve Bank of India for a purpose other deductions and fulfil certain pre-conditions. The than purchase of overseas tour package on the domestic companies opting to be taxed under amount of remittance exceeding ` 7 lakhs during any concessional tax regime will also not be the financial year; (2) by a seller of overseas tour required to pay Minimum Alternate Tax (MAT). programme package from the buyer of such However, for companies which continue to avail package on the total amount of such package incentives or deduction, the existing rate of MAT during the financial year. has been reduced from 18.5% to 15%. In case if the remittance made abroad is in (ii) Personal Income Tax- Further, in order to reform relation to a loan taken from a financial institution personal income tax, Finance Act, 2020 has for the purpose of pursuing any education, then provided an option to individual taxpayers for TCS is to be deducted at the rate of 0.5% on the paying income-tax at lower slab rates if they do amount of remittance exceeding ` 7 lakhs during not avail specified exemption and incentive. Apart the financial year. Moreover, exception has been from the above, Finance Act, 2020 has also drawn in case of a person, who is a buyer and is provided an option to the co-operatives to pay required to deduct tax under any other provision taxes at concessional rates without claiming any of the Act and has deducted the same on the specified deduction or incentive. said amount. (iii) Abolition of Dividend Distribution Tax (DDT) -In order to increase the attractiveness of the b) provide for collection of tax at the rate of 0.1% Indian Equity Market and to provide relief to a by a seller on sale of goods (other than those large class of investors in whose case dividend mentioned in sub-section (1) or sub-section (1F) 110Department of Revenue III or sub-section (1G) of the said section) of the family, not required to deduct tax at source under value or aggregate of such value exceeding `50 section 194C, 194H and 194J of the Act, if such lakh in a previous year. The above provision will sum, or aggregate of such sums, exceeds ` 50 not be applicable on any goods exported out of lakh in a year. However, in order to reduce the India. Further, if a person being the buyer of compliance burden, it is provided that such goods is liable to deduct TDS under any other individuals or HUFs shall be able to deposit the provision of the Act on the goods so purchased tax deducted using their PAN and shall not be by him from the seller and has deducted TDS on required to obtain TAN. the same, then the above provision will not be applicable. (vii) Deemed resident in India- Section 6 of the Act has been amended vide Finance Act, 2020 to (iv) Broadening of scope of Equalization Levy : The provide that an Indian citizen or a person of Indian scope of Equalization Levy (EL) has been Origin who comes on a visit to India in any enlarged vide the Finance Act, 2020, to provide previous year and whose total Indian income that EL shall be paid by an e-commerce operator exceeds ` 15 lakh, shall be considered a resident, at 2%, from 1st April 2020, on consideration if his stay in India is 120 days or more. Also, a received or receivable for e-commerce supply citizen of India who is not liable to tax in any other or services, if the consideration is two crore country shall be deemed to be a resident in India, rupees or more during the previous year, made if his Indian income exceeds ` 15 lakhs during or provided or facilitated by it to a person resident the previous year. in India or a non-resident in specified circumstances or a person buying such goods (viii) Mandatory furnishing of ITR- Through Finance or services or both using internet protocol (No.2) Act, 2019, it has been provided that address located in India. persons entering into high value transactions (v) TDS on certain cash withdrawals- Section 194N such as having a deposit of an amount/aggregate was inserted through the Finance (No.2) Act, of the amounts exceeding one crore rupees in 2019 to provide for deduction of tax at the rate of one or more current account, incurred 2% on payment made by banking company or expenditure of an amount/aggregate of the co-operative society engaged in the business of amounts exceeding two lakh rupees for himself banking or post office in cash exceeding ` 1 crore or any other person on foreign travel, has paid during the financial year in aggregate from one an electricity bill of an amount/aggregate of the or more account maintained by the recipient with amounts exceeding one lakh rupees or fulfils any such payer. other prescribed condition shall be mandatorily required to file ITR. In order to make the provisions of the said section more stringent in case of non-filers, Finance Act, 2020 amended section 194N of the Act to provide (ix) Pre-filling of return by enlarging scope of SFT: that in case of a person who has not filed income Pre-filled Income Tax Returns (ITR) have been tax return for all of the three assessment years provided to individual taxpayers with income from relevant to the previous year preceding the salary, house property, capital gains from previous year in which such amount is withdrawn, securities, bank interest, dividends and various then TDS is to be deducted at the rate of 2% on tax deductions. Information regarding these amount of cash withdrawn exceeding ` 20 lakh incomes and deductions are being collected from but less than `1 crore; and 5% on the amount of concerned sources such as banks, mutual funds, cash withdrawn exceeding ` 1 crore in aggregate EPFO etc. to enable pre-filling. The scope of from one or more account maintained by such furnishing of Statement of Financial Transactions recipient during the financial year. (SFT) has been widened by requiring more organisations/institutions to submit information in respect of financial transactions facilitated or (vi) TDS to be deducted by individual/HUF on undertaken by them. contractual work/professional fees-Section 194M was also introduced vide Finance (No.2) Act, (C) Measures undertaken to promote 2019 to provide for levy of TDS at the rate of five digitalization of Economy per cent on the sum, or the aggregate of sums, paid or credited in a year on account of (i) Finance Act, 2020 has amended section 44AB contractual work or professional fees or of the Act to increase the monetary threshold to commission by an individual or a Hindu undivided get the books of accounts audited from ` 1 crore 111Annual Report 2020-2021 to ` 5 crore if the total turnover or gross receipts Income-tax (Appeals) will be finalized in a made in cash does not exceed 5% of the total faceless and jurisdiction-less manner. Further turnover and total payments including purchases details are mentioned in {Para 2.4 (B)} in cash does not exceed 5% of the total payments. (iii) Taxpayer Charter - With the commitment to (ii) Finance (No.2) Act, 2019 introduced Section provide a transparent and taxpayer friendly 269SU in the Act to provide that every person, regime, taxpayer charter has been adopted on carrying on business, shall, provide facility for 13.08.2020 underlining the rights and accepting payment through the prescribed responsibilities of the taxpayer. It also draws the electronic modes, in addition to the facility for expectations which the tax administration has other electronic modes of payment, if any, being from the taxpayers. The set of rights to the provided by such person, if his total sales, taxpayer is aimed towards taxpayer centric turnover or gross receipts in business exceeds administration holding itself accountable. fifty crore rupees during the immediately preceding previous year. (E) Direct Tax Vivaad se Vishwas Act, 2020 – In the current times, a large number of disputes (iii) Section 269ST has been inserted in the Act to related to direct taxes are pending at various prohibit cash receipt of rupees two lakh or more. levels of adjudication from Commissioner Further, in order to enforce restriction on cash (Appeals) level to Supreme Court. These tax transactions, a new section 271DA has been disputes consume a large part of resources both inserted in the Act so as to provide that if a person on the part of Government as well as taxpayers contravenes the provisions of section 269ST, he and also deprive the Government of the timely shall be liable to pay penalty of a sum equal to collection of revenue. With these facts in mind, the amount of such receipt. an urgent need was felt to provide for resolution of pending tax disputes which will not only benefit (iv) The existing rate of deemed profit under section the Government by generating timely revenue but 44AD of the Act has been reduced from 8% to also the taxpayers as it will bring to close 6% in respect of the amount of total turnover or mounting litigation costs and efforts can be better gross receipts received through banking channel/ utilized for expanding business activities. Direct digital means. Tax Vivad se Vishwas Act, 2020 was enacted on (v) In order to expand the scope of section 269SS 17th March, 2020 under which the declarations and section 269T of the Act an amendment has for settling disputes are currently being filed. been made so as to cover payment/advance in 2.4 Income Tax Administration (ITA) Division relation to transfer of immovable property under said sections. Important initiatives taken by the ITA Division (vi) To bring transparency in the source of funding to during the year 2020-21 are as follows: political parties the provisions of section 13A of It has been a constant endeavour of the Central Board of the Act has been amended to inter alia provide Direct Taxes (CBDT) to reduce human interface in scrutiny that no donations of `2000/- or more shall be assessment proceedings through use of Information received otherwise than by an account payee Technology. The steps taken by the CBDT towards cheque drawn on a bank or an account payee making assessment proceedings electronically with bank draft or use of electronic clearing system minimum human-interface are summarized as below: through a bank account or through electoral bonds (A) Faceless Assessment Scheme, 2019 (D) Ease of Compliance for Taxpayers (i) To eliminate interface between Assessing Officer and the assessee during the course of (i) Faceless E-assessment Scheme - In order to assessment proceedings and for optimum remove the existing human interface and to utilization of the resources through economics improve the quality of orders, Faceless of scale and functional specialization, on pilot Assessment procedure has been introduced. basis e- Assessment Scheme 2019 was notified Further details are mentioned in {Para 2.4 (A)}. by the CBDT on 12th September, 2019 in 8 Metro Cities in India. The Scheme was extended to Pan (ii) Faceless appeals – Most of the Income-tax India level with the notification of Faceless appeals pending at the level of Commissioner of Assessment Scheme, 2019. 112Department of Revenue III (ii) The Scheme ensures that all communication (C) Inputs on the improving the ease of doing with the assessee or any other person for the business for Start-ups: purpose of making assessment under the Scheme, as also internal communication among In order to provide a cohesive ecosystem to the functional units shall be through the National the Start-ups, various taxation related issues e- Assessment Centre (NeAC) and shall be of the Start-ups are addressed on priority. In made exclusively in electoral mode. Under the this regard, Circular no. 16 of 17th August, 2019, Scheme, a person shall not be required to and a consolidated circular dated 30th August, appear before the Centre or any unit either 2019 has been issued stating that all cases personally or through authorized representative. recognized by DPIIT and submitting form-2 will There will not be any fixed territorial jurisdiction be exempt from provisions u/s 56(2)(vib) of the and the cases will be assigned by the system in Income-tax Act, 1961. A dedicated Start-up cell a randomized manner. has been constituted under a Member of CBDT with 4 other officers from CBDT for sorting out (iii) After the notification of the Scheme, requisite the grievance and taxation related issues of jurisdiction orders under section 120 of the start-ups. Income-tax Act, 1961 (the Act) and the orders for the diversion of the man power for the newly (D) Issue of IT orders, notices, summons, letters created NeAC and 30 Regional e –Assessment etc. through a centralized system: Centers (ReACs) have been issued by ITA Division. The division issued several orders and CBDT vide its circular No. 19/2019 dated instructions to streamline the implementation of 14.08.2019, has directed that all the scheme. The filed formations were provided communications to the taxpayers by income- with templates and assistance at every level to tax authority relating to assessment, appeals, help them in smooth transition from the old order, statutory or otherwise, exemptions, system into the new regime. Several clarification investigation, penalty, prosecution, rectification, and guidelines were issued to the filed approval shall be issued from 1st day of October, formations. 2019 onwards with a computer-generated Document Identification Number (DIN) duly (B) Faceless Appeal Scheme, 2020: quoted in such communication. As per the said Circular, only in certain exceptional (i) In order to further the objective of minimal circumstances, the communications can be interface and maximum governance and to issued manually after taking written approval ensure that the reforms initiated by the of CCIT/DGIT concerned and such Department to eliminate human interface from communications have to be regularized within the system reach the next level, Faceless Appeal 15 working days of its issuance by generating Scheme, 2020 was launched on 25th September, a DIN number and uploading on the systems. 2020. Filing of appeals before Commissioner This reform will help the Department to maintain (Appeal) has already been enabled in an proper audit trails of all communication between electronic mode. the taxpayers Income-tax Department. (ii) Hence, the CBDT notified the Scheme, applicable to all the pending appeals as well as 2.5 Investigation Division new appeals filed forthwith before the CIT(A). During the Financial Year 2019-20, the Government The scheme aims at conducting appeal has taken several steps, by way of policy-level initiatives proceedings in a Faceless manner in electronic and more effective enforcement actions on the ground mode, with no human interface, having notices to be issued electronically by a Central cell, with to tackle the issue of black money. These steps include cases to be allocated to Appeal Units in a random legislative and administrative measures, creation of manner and the central Cell i.e. National more advanced systems and processes with due focus Faceless Appeal Centre (NFAC) to be single point on capacity building and greater use of information of contact between appellant, the assessing technology. officer or any other person and the Department. (i) Search and seizure and survey actions: (iii) In order to give effect to the scheme, the NFAC at Delhi and 4 Regional Faceless Appeal Centres During FY 2019-20, search and seizure actions (RFACs) with 293 Appeal Units have been were carried out against more than 984 groups created across the country. leading to seizure of assets worth over `1280 113Annual Report 2020-2021 crore and admission of undisclosed income of Property Transactions Act, 1988 (“the Benami over ` 10370 crore. Whereas, during F.Y. 2020- Act”): 21* (up to October, 2020), search and seizure actions were carried out in over 138 groups. The With a view to bridge the gaps and put in place actions in these cases led to seizure of assets appropriate effective legislation, the existing Act worth over ` 195 crore and an admission of was amended through Benami Transactions undisclosed income of over ` 670 crore. (Prohibition) Amendment Act, 2016, and came into force w.e.f. 1st November 2016. The Further, during F.Y. 2019-20, over 12720 surveys amended Act defines benami transactions and were conducted leading to detection of benami property.It provides for consequences of undisclosed income of over ` 22240 crore. entering into a prohibited benami transactions, Whereas, during F.Y. 2020-21*(up to October, which includes attachment of the benami 2020), over 80 surveys were conducted leading property, confiscation and prosecution of both the to detection of undisclosed income of over ` 2060 benamidar and the beneficial owner. The ITD has crore. *Figures are provisional set up 24 Benami Prohibition Units across India for taking effective action under the Benami Act. (ii) Prosecutions & compounding: As an outcome of unabated actions taken by ITD, Various measures have been taken by the during F.Y. 2019-20, show cause notices for Income-tax Department (ITD) in the recent past provisional attachment of benami properties were to strengthen the prosecution mechanism with a issued in over 430 new cases and provisional view to identify the deserving prosecutable cases attachment was made in over 380 cases. The at the earliest and pursue the same with due value of properties under attachment was over ` seriousness. 4480 crore. In more than 460 cases, references were made to the Adjudicating Authority under During the F.Y. 2019-20, over 1225 prosecution the Act. Further, in 910 cases, the Adjudicating complaints were filed and 49 persons were Authority confirmed the orders of provisional convicted. Whereas, during F.Y. 2020-21* (up to attachment passed by the ITD. Moreover, during August, 2020), 8 prosecution complaints have the F. Y. 2020-21 (up to October, 2020), show been filed and 3 persons have been convicted. * cause notices for provisional attachment of Figures are provisional. benami properties were issued in 38 new cases and provisional attachment has been made in (iii) Actions under the Black Money (Undisclosed 34 cases. The value of properties under Foreign income and Assets) and Imposition attachment is over `180 crore. In 30 cases, of Tax Act, 2015 (“the BM Act”): references have been made to the Adjudicating Authority under the Act. Further, in over 95 cases, Recognizing the limitations of the Income-tax Act, the Adjudicating Authority has confirmed the 1961, etc. in dealing with black money stashed orders of provisional attachment passed by the abroad, the Government enacted a ITD. comprehensive and a more stringent new law that has come into force w.e.f. 01.07.2015. As (v) Investigation in foreign assets cases: an outcome of the actions taken by the Income- tax Department under the BM Act, as on 31/03/ In HSBC bank accounts cases, as an outcome 2020, undisclosed foreign assets and income of investigation, undisclosed income of about valued at over `13500 crore (subject to `8400 crore has been brought to tax on account fluctuations in currency conversion) have been of deposits made in unreported foreign bank detected. Further, as on 31/03/2020, more than accounts. Further, concealment penalty of about 96 prosecution complaints have been filed under ` 1200 crore has been levied in 171 cases. So the BM Act. far, 204 prosecution complaints in HSBC cases have been filed in 89 cases. Whereas, as on 31/10/2020, undisclosed foreign assets and income valued at over `14,200 crore In International Consortium of Investigative (subject to fluctuations in currency conversion) Journalists (ICIJ) cases, sustained investigations have been detected. Further, as on 31/10/2020, conducted have led to detection of more than more than 99 prosecution complaints have been `11,010 crore of credits in the undisclosed foreign filed under the BM Act. accounts so far and 99 prosecution complaints in 58 such cases have already been filed before (iv) Actions under the Prohibition of Benami criminal courts. 114Department of Revenue III In Panama paper cases, as on 31/10/2020, (vi) Attending to all RTI appeals, Parliamentary Search & Seizure action conducted in 81 cases; questions and other parliamentary matters assessment proceedings u/s 10 of the Black (Standing Committee) relating to the aforesaid Money Act have been initiated in 66 cases; matters. criminal prosecution complaints have been filed II. Measures initiated to reduce litigation and in 46 cases and undisclosed foreign investments improve transparency & efficiency of the detected of approx. `1710 crores. appellate fora: In Paradise paper cases, as on 31/10/2020, The following steps have been taken to reduce Search & Seizure and/or survey conducted in 32 litigation at various appellate fora & improve cases, notices under section 10 of the Black transparency and efficiency thereof: Money Act issued in 59 cases; criminal Prosecution complaints have been filed/initiated (i) The Faceless Appeal Scheme, 2020 made under in 13 cases and undisclosed foreign investments sub-section (6B) of section 250 of the Act, has detected of approx. ` 207 crore. been notified vide notification no. 76 of 2020 of the Government of India in the Ministry of Further, for efficient and effective handling of Finance, Department of Revenue, number S.O. information being received in relation to foreign 3296(E), dated the 25th September, 2020, to assets/income, a dedicated set up in the form of improve the transparency and efficiency of the Foreign Assets Investigation Units (FAIUs) are appellate process at the first appeal level and as being set up by diverting the existing posts in the a measure to provide uniform and unbiased Income Tax Department. Accordingly, with the faceless disposal of appeals by the various approval of the Hon’ble Finance Minister, 29 Appeal Units across the country. FAIUs have been created in the Investigation (ii) To reduce pendency and enable faster disposal Directorates across India. of pending cases in Supreme Court, after a (vi) Updating of Technique of Investigation thorough exercise for bunching of cases, a total Manual of 40 group of cases, having similar substantial questions of law (SQLs) have been identified, In view of the economic transactions getting which comprised of 653 Departmental SLPs and integrated across the borders and to keep the 137 assessee SLPs. Accordingly, 40 applications/ tax authorities abreast with the cutting-edge affidavits for tagging of 790 (653+137) cases developments in the field of tax investigations, have been finalized and 30 applications have the ‘Manual on Techniques of Investigation’, been filed so far. A request has also been made released in the year 2002 has been revised and to the Hon’ble Supreme Court for fixation of these updated Volumes I to VII of the “Techniques of cases on priority. The disposal of these cases by Investigation Manual” have been published. the Hon’ble Supreme Court shall not only lead to disposal of 653 SLPs of Revenue with disputed 2.6 Audit and Judicial Division tax of ` 1.01 Lakh Crore (80% of Disputed Tax in I. The Judicial Division of CBDT is tasked with SC & 20% of Total Revenue SLPs as on 31/08/ handling the following works: 2020) and 136 Taxpayers’ SLPs but also shall have cascading effect in settling very large (i) Litigation Management, matters relating to numbers of tax disputes and disputed taxes pendency of appeals before various appellate pending on these 40 SQLs, before various High forums and policy matters thereto. Courts, Income Tax Appellate Tribunals, Commissioner (Appeals) etc (ii) Examination of matters relating to settled view Circulars and other matters relating to appeals (iii) Vide CBDT Circular No. 17 of 2019 dated 08.08.2019, Monetary limit of filing department and revisions. appeals to ITAT/High Court/Supreme Court were (iii) Monitoring the performance of CIT(A) vis-à-vis significantly enhanced to tax effect of ` 50 lakh, targets allocated. 1 Crore and 2 Crore respectively from earlier limits of ` 20 lakh, 50 lakh and 1 Crore (iv) Empanelment of Standing Counsels, Special respectively. As a result, 6127 and 6156 Counsels and Special Public Prosecutors. Departmental appeals have been identified and withdrawn from ITAT and HC, respectively. (v) Matters relating to suits/ writ petitions with respect Similarly, 1104 cases have been withdrawn from to Income Tax Act. Supreme Court. 115Annual Report 2020-2021 (iv) Central Technical Committee (CTC) has been an active participant in OECD/G20 initiatives created at the level of CBDT to resolve relating to taxation of digital economy and has contentious legal issues and to formulate consistently supported the need to address the Departmental View/Settled View. The CTC has tax challenges arising out of new business issued 30 circulars on Settled Issues/ models in digital technology which have Departmental View, with directions to withdraw/ transformed the way the business operates. The not press such Departmental appeals before HC/ present framework of discussion is centred SC. around the agreed Programme of Work (PoW) finalised in Inclusive Framework (IF) meeting in (v) The Department has issued Standard Operating May 2019 and updated in IF January 2020. The Procedure for handling matters relating to such work explores technical issues to be resolved frequently litigated sections, i.e. section 14A, 68 through the two main pillars. and 147 of the Income-tax Act, 1961. It is expected that these standard procedures will go a. Pillar One focuses on the allocation of taxing a long way in minimizing litigation. rights and seeks to undertake a coherent and concurrent review of the profit allocation and 2.7 Foreign Tax and Tax Research Division nexus rules; 2.7.1 Policy Issues on International Taxation b. Pillar two focuses on the remaining BEPS India’s Active participation in work related to challenges and is designed to ensure that large addressing tax challenges of Digital Economy internationally operating businesses pay a minimum level of tax regardless of where they (i) The current international tax rules were made in are headquartered or the jurisdictions, they early 20th century and technological development operate in. coupled with globalization and new business models have rendered these rules obsolete. The (iv) The work on the design elements of the two sustained participation of the businesses in the Pillars was carried out by way of Virtual Meetings economic life of a country without physical in light of the Covid-19 pandemic. Initially, the presence can give rise to profits, which are not G20 deadline was the end of 2020 to find a taxed given the present international tax rules. consensus-based solution but the deadline has This creates a mismatch between the source of now shifted to next year. In its meeting on 8-9th generation of profits and the jurisdiction where October 2020, the G20/ OECD Inclusive they are taxed. This mismatch is a result of a Framework (IF) on BEPS, which consists of 137 combination of factors like scale without mass, countries, has approved the Reports on reliance on intangibles, user data and contribution blueprints of Pillar One and Pillar Two for public and the fact that digital business models can consultations. The Chapeau (cover note) of the supply goods and services in a jurisdiction without blueprints communicates to the wider world, physical presence. capturing the essence of the two highly technical (ii) The discussions on addressing tax challenges reports and emphasizes that while the work has arising from digitalization have been ongoing not yet been completed, good progress have since past seven years. Now there is a general been made to prepare a solid foundation for an agreement among jurisdictions that the present agreement in the future. The Blueprints are the international tax rules are not sufficient to address result of the technical work that has been carried the tax challenges arising from digitalization. The out by the working parties and Steering group present nexus rules based on physical presence from February 2020 onwards and extensive are no longer fit and the profit allocation rules discussions and comments from all the based on Arm’s Length Principle fail in case of jurisdictions. India was deeply engaged in these digital economy. All the jurisdictions realize that discussions through written comments and oral there is a need to have a multilateral solution interventions from time to time. The G20/OECD and presently are engaged constructively in the IF conducted a public consultation on these discussion in the G20/ OECD Inclusive blueprints which closed on 14 December, 2020 Framework on BEPS. and more than 240 public comments comprising of more than 3000 pages were received by the (iii) As a part of follow up work on outcomes of Action OECD on the blueprints. In this connection, public 1 report of BEPS project on addressing the consultation meetings (virtual) are scheduled to challenges of digital economy, India has been be held on 14th and 15th January 2021. The 116Department of Revenue III blueprints have been endorsed by the G20 in their Agreement (CTA). In cases where the minimum October 2020 Finance Ministers and Central standard has not been implemented through the Bank Governors (FMCBG) meeting. MLI, either because the other jurisdiction has not signed or ratified the MLI, or because it has not 2.7.2 Negotiation of Tax Treaties - Multilateral included its DTAA with India among its CTAs, the Instrument (MLI), Double Taxation Avoidance same is being pursued through bilateral Agreements (DTAAs) and Amending negotiations. Protocols: (v) Besides, steps have been taken for bilateral (i) India has actively participated in the Base Erosion revision of existing treaties to make it more & Profit Shifting (BEPS) project of OECD/G-20 relevant & updated by incorporating the and endorsed the outcomes of the BEPS project, provisions which will align the existing DTAAs which were in the form of 15 action points for with the present international standards and the addressing tax avoidance by Multinational positions taken by India under MLI. Enterprises. Under BEPS Action 15, the BEPS (vi) Following developments with respect to bilateral outcomes and minimum standards that all treaties took place during the year: countries have agreed to, are being implemented by the signing of the Multilateral Convention for  The Protocol amending the Agreement between Implementation of Tax Treaty Related Measures India and Kyrgyz Republic DTAA was signed on to Prevent Base Erosion and Profit Shifting, also 14th June, 2019 and ratified by the Hon’ble called as Multilateral Instrument (MLI). President of India and coordination with MEA (and Kyrgyz Republic) is under way for entry into (ii) India is a signatory to the MLI along with the 94 force of the Protocol (Reminder has given last other signatories (as on date) and it has notified month). 93 DTAAs under Covered Tax Agreements proposed to be modified by the MLI depending  The DTAA between India and Iran was signed upon the treaty partners notifying the same under on 17th February, 2018 and ratified by the Hon’ble MLI. India has already ratified the MLI and President of India. Both India and Iran have deposited the instrument of ratification along with completed their internal procedures for entry into India’s final MLI position with the depository i.e. force of the agreement. Steps are being taken to the OECD on 28th June, 2019, as a result of notify the agreement in the official gazette. which, MLI has entered into force for India w.e.f. 1st October, 2019 and its provisions will have  The Cabinet has approved the signing and effect on India’s DTAAs from F.Y. 2020-21 ratification of protocol amending India-Sri Lanka onwards. DTAA on 12th February, 2020 and coordination with MEA (and Sri Lanka) is under way for signing (iii) As on 18.12.2020, 41 countries (amongst those of the Protocol (Reminder has been given). which have included India in their list of Covered Tax Agreements) have ratified the MLI.  The India-Chile DTAA has been signed. This Synthesized texts have been prepared and needs to be ratified by the respective countries published on the CBDT website in respect of and the countries have to notify each other about many such Agreements, and are at advanced such ratification after which, the DTAA may be stages of preparation in respect of other notified in the Official Gazette. India has ratified agreements. the DTAA and notified the same to Chile. India is (iv) India, as a member of Inclusive Framework on awaiting ratification by Chile and has requested BEPS is committed to implement the minimum it to provide the status of the same.” standard under BEPS Action 6 and BEPS Action  Cabinet has approved the signing of the protocol 14. The minimum standards are to be met in amending the DTAA between India and Brazil. respect of DTAAs with Inclusive Framework The Protocol could not be signed as the internal countries. Implementation of minimum standards under these BEPS action will be subject to a peer procedures in Brazil could not be completed. review process by OECD as well. Minimum Brazilian side has stated that they are not in a standards under both Action 6 and 14 can be position to indicate tentative timelines due to the met through MLI if the treaty partner has also COVID-19 crisis. In October 2020, Brazilian side signed and ratified the MLI and the respective has proposed a final reading of the Amending DTAA is notified by both partners as Covered Tax Protocol before signing. 117Annual Report 2020-2021  The signing of the India-Brunei Darussalam Tax of financial account information amongst various Information Exchange Agreement (TIEA) took jurisdictions. Apart from this, India, also place on 28.02.2019 in New Delhi which entered periodically receives information from some into force on 30.01.2020. The Agreement has countries related to interest, dividend, salary, been notified in the Gazette of India pension etc. Further, under tax treaties, the (Extraordinary) on 09.03.2020. Contracting States may also provide information to their treaty partners with a view to prevent fiscal  The signing of the India-Samoa TIEA took place evasion even if no specific reference is received on 12.03.2020 in Apia, Samoa. The Instrument in this regard under “spontaneous exchange of of Ratification was signed by the Hon’ble information”. President on 22 May 2020. In June 2020, MEA was requested to inform Samoa about (v) In many Indian DTAAs, there is provision for completion of internal procedures and seek assistance in collection of taxes under which the confirmation from them on completion of their Contracting States are obliged to assist in internal procedures. In September 2020, an collection of tax dues from assets located in their update was sought in this regard from the MEA. country. The provision for assistance in collection of taxes is also present in certain TIEAs. 2.7.3 Role of Tax Treaties in Prevention of Fiscal Assistance in Collection of taxes is also possible Evasion and Tackling of the Menace of Black under the Multilateral Convention if the signatory Money country has not given a reservation and also under the SAARC Multilateral Agreement. The (i) Effective investigation in respect of cases other form of administrative assistance possible involving undisclosed foreign assets is possible under tax treaties are tax examinations abroad, only if there is access to actionable information simultaneous examination, joint audit, service of from foreign countries through various legal notices, etc. instruments. (vi) The following additional steps have been taken (ii) The “legal instruments” through which in the recent past for effectively utilizing the above information can be efficiently obtained for the mechanism of Exchange of Information: purposes of investigation under Indian tax laws are the Double Taxation Avoidance Agreements a) The Central Action Plan issued by the CBDT, read (DTAAs), Tax Information Exchange Agreements with Manual on Exchange of Information, (TIEAs), Multilateral Convention on Mutual explains the process and emphasizes the need Administrative Assistance in Tax Matters to make exchange of information references (Multilateral Convention) and SAARC Multilateral seeking information under the tax treaties. The Agreement, which create a legal obligation on a Central Action Plan also mandates that every Pr. bilateral basis to provide information. CIT charge will organize training and sensitization programme for making proper references under (iii) India can obtain information which is “foreseeably tax treaties. relevant” for administration or enforcement of domestic laws concerning taxes from 162 b) Regular trainings programs have also been held countries/jurisdiction under DTAAs/TIEAs/ virtually for DTRTIs in Mumbai, Delhi, Bengaluru Multilateral Convention/SAARC Multilateral etc. to equip the officers with requisite knowledge Agreement. With some countries/jurisdictions, and skills to make appropriate requests/enquiries there can be more than one agreement e.g. DTAA under the prevailing legal instruments as well as Multilateral Convention, under which information can be received. c) Steps are also being taken to ensure that the information received from our treaty partners is (iv) Under most of the DTAAs and Multilateral effectively utilized to combat tax evasion and Convention, Automatic Exchange of Information avoidance. (AEOI), which is systematic and periodic transmission of “bulk” taxpayer information by the d) Efforts are also being made to complete source country to the residence country, is also investigations quickly and file complaints/ possible. Common Reporting Standard (CRS), prosecutions in appropriate cases expeditiously. a global standard on AEOI has, been developed under guidance and leadership of G20 countries 2.7.4 Tax Issues in G20 which has made a sea change in our ability to address offshore tax evasion by way of exchange (i) India is a leading contributor to the discourse on 118Department of Revenue III international tax related issues at G-20 in all its (iii) The worldwide implementation of AEOI under meetings at the level of Leaders (represented CRS in 2017 has ushered in a new era of tax by Hon’ble PM), Finance Ministers, Central Bank transparency. India believes that there is a need Governors and Deputies. In recent times, for adopting a whole of Government approach in International Tax issues have featured dealing with cross-border exchange of financial prominently in the G20 Agenda. The relevant information automatically under the CRS and paragraph on tax issues in the recent hence, towards this goal, it is necessary for the communiqué of the G-20 Finance Ministers and recipient jurisdiction to share the financial Central Bank Governors meeting held virtually information received under CRS with other under the Presidency of Saudi Arabia on 14th domestic Law Enforcement Agencies. India also October 2020 states as follows: believes that the goal on promoting exchange of information may be broadened in scope to “We will continue our cooperation for a globally ‘Enhancing mutual administrative assistance in fair, sustainable, and modern international tax tax matters’. India is of the view that any system. We acknowledge that the COVID-19 exchange of financial account information will be pandemic has impacted the work of addressing more effective and useful when there is a legal the tax challenges arising from the digitalization instrument between jurisdictions to provide of the economy. We welcome the Reports on the assistance in collection of taxes so that the Blueprints for Pillar 1 and Pillar 2 approved for offshore assets of the taxpayer are not only taxed public release by the G20/OECD Inclusive but ultimately brought back to the country of Framework on Base Erosion and Profit Shifting residence through recovery of taxes raised (BEPS). Building on this solid basis, we remain against those assets. In this context, there is a committed to further progress on both pillars and need to initiate work towards broader cooperation urge the G20/OECD Inclusive Framework on and standards-setting in the area of BEPS to address the remaining issues with a Administrative Assistance in Collection of Taxes. view to reaching a global and consensus-based solution by mid-2021. We welcome the report 2.7.5 BEPS Inclusive Framework approved by the G20/OECD Inclusive Framework on BEPS on the tax policy (i) In Ankara in September 2015, the OECD was implications of virtual currencies. We welcome mandated by the G20 Finance Ministers to build the progress made on implementing the an inclusive framework for implementation and internationally agreed tax transparency to report to them by early 2016. The architecture standards. We will continue our support to for the inclusive framework was agreed by G20 developing countries in strengthening their tax Finance Ministers in 2016. The G20 Finance capacity to build sustainable tax revenue bases.” Ministers also encouraged all relevant and interested jurisdictions to join the new inclusive The G-20 leaders in the Riyadh Summit from 21- framework on an equal footing. The work of 22 November, 2020 endorsed the above. Inclusive Framework includes consideration of the manner in which non-OECD countries will (ii) Certain jurisdictions are yet to exchange consider themselves committed to the agreed information with all interested appropriate rules and their implementation. India continues partners on an automatic basis. In this context, to contribute to this important phase of the BEPS India has urged that the Global Forum on Project. Transparency and Exchange of Information for Tax Purposes (Global Forum) should continue (ii) As on December 2020, a total of 137 members to update the progress made by all committed have joined the Inclusive Framework, whose jurisdictions with respect to actual exchanges mandate is, inter alia, to: carried out between all interested appropriate a) Review the implementation of the four BEPS partners within the committed timelines. India has minimum standards; consistently stated that a level playing field should be maintained in the implementation of the global b) Gather data for the monitoring of the other standards on tax transparency. This is particularly aspects of implementation, including under BEPS significant as the financial assets would be shifted Action 1 (on the tax challenges of the digital to such jurisdictions which are outside the ambit economy) and Action 11 (on measuring and of AEOI and would go unreported thereby monitoring BEPS); rendering the entire process ineffective and also pose a serious threat to the maintenance of a c) Finalize the remaining technical work to address level playing field. BEPS challenges; and 119Annual Report 2020-2021 d) Support jurisdictions in their implementation of (v) The major work being undertaken by the the BEPS package, including by providing Inclusive Framework this year is with respect to further guidance on the standards and by taxation of the Digital Economy. As indicated developing toolkits for low income countries. already, on 12 October 2020, the Inclusive Framework released a package consisting of (iii) The Steering Group of the Inclusive Framework the Report on the Pillar One Blueprint and the comprises of members from 24 countries. India Report on the Pillar Two Blueprint. These has a representation in the Steering Group of Blueprints reflect the convergent views on many the Inclusive Framework. India strongly of the key policy features, principles and supports the inclusive approach of the parameters of both Pillars, and identify framework to monitor and review the success remaining technical and administrative issues of implementation of the BEPS as well as policy issues where divergent views recommendations and collaborates with all the among Inclusive Framework members remain G-20, developing countries and international to be bridged. organizations to ensure that there is a level playing field amongst various economies. 2.7.6 Automatic Exchange of Information (AEOI) (iv) In the last 2-3 years, significant progress has (i) On the request of the G20, the OECD, working been made in implementation of the BEPS with all non-OECD G20 countries, including package, including the four minimum standards, India, developed a single uniform standard for and these measures are already having major automatic exchange of information, the impact on BEPS activities. The work of the Common Reporting Standard (CRS) on AEOI. Inclusive Framework in this period has been This new global standard was endorsed by the related to the establishment of the peer review G20 Finance Ministers in their meeting in Cairns processes, the ongoing standard-setting work on 21.09.2014 and by the G20 Leaders in their and delivery of guidance on implementation, as summit at Brisbane on 16.11.2014. In keeping well as the assistance being delivered, often in with its leadership role in this area, India also partnership with other international joined a group of 49 countries as “early organizations and regional bodies, to ensure adopters” of the new standard and commenced all countries and jurisdictions are supported in exchange of information in 2017. As on date, the BEPS implementation process. In all these 47 developing countries are yet to set the date processes, India has played active role and for first the automatic exchange of financial account information. The current status of supported positive initiatives keeping in mind commitment for AEOI is tabulated below: concerns of developing nations. 120Department of Revenue III (ii) For implementation of AEOI under CRS, as on Institutions (RFIs) for maintaining and reporting 15.12.2020, 110 countries/jurisdictions have information about the Reportable Accounts. joined the Multilateral Competent Authority Agreement (“MCAA”), which provides a (iii) A Guidance Note was released on 31st August framework for exchange of information on 2015(further updated on 31.12.2015, 31.05.2016 automatic basis. After joining the framework of and 30.11.2016) to provide guidance to the the MCAA, as above, countries/jurisdictions need Financial Institutions, Regulators and officers of to enter into bilateral/multilateral arrangements the Income Tax Department for ensuring for exchanging information subject to compliance with the reporting requirements confidentiality and data safeguards requirements provided in Rules 114F to 114H and Form 61B in the recipient country/jurisdiction. India signed of the Income-tax Rules, 1962. To address the MCAA on 3rd June 2015. evolving issues in the implementation, certain clarifications were issued with respect to the (iii) As committed by India, the first exchanges have Guidance Note on 30.07.2020. taken place in September 2017 and the same is reflected in the AEOI Report of the Global Forum. 2.7.8 India’s Association with OECD India has automatically exchanged information (i) OECD is an organization of 34-member for the calendar years 2016, 2017, 2018 and 2019 countries, who are signatories to the Convention on reciprocal basis with jurisdictions with whom on the Organization for Economic Co-operation AEOI has been activated. During this year, despite the COVID-19 pandemic, India fulfilled and Development. Tax issues have always been its international obligations by transmitting AEOI an important part of OECD’s overall activities and information for the Calendar Year 2019 to its are undertaken by the Committee on Fiscal various exchange partners within the stipulated Affairs (CFA) and its subsidiary bodies. These timelines. subsidiary bodies carry out the work on a number of different topics, including development of the 2.7.7 Inter-Governmental Agreement (IGA) with Model Tax Convention (Working Party 1), Tax USA for purposes of FATCA Policy and Statistics (Working Party 2), Transfer Pricing (Working Party 6), Consumption Taxes (i) India entered into Inter-Governmental Agreement (Working Party 9), Exchange of Information (IGA) with USA under the Foreign Account Tax (Working Party 10) and Aggressive Tax Planning Compliance Act (FATCA) on 9th July 2015. This (Working Party 11). obligates the Indian financial institutions to provide financial account information pertaining (ii) In addition, the CFA has established a number to US residents to Indian tax authorities, which of other subsidiary bodies such as the Forum on is then transmitted to USA automatically. Tax Administration, the Forum on Harmful Tax Similarly, under the IGA, the financial institutions practices, the Task Force on Tax Crime and Other of USA provide financial account information Crimes, the Task Force on the Digital Economy about Indian residents to USA tax authorities, and the Task Force on Tax and Development. which are transmitted to India automatically. The Centre for Tax Policy and Administration Reporting of information under the IGA with USA (CTPA) acts as the Secretariat to the CFA and began from 30th September, 2015 and its subsidiary bodies and provides technical information pertaining to the calendar year 2014, expertise and support to the CFA. 2015, 2016, 2017, 2018 and 2019 has already been exchanged between the two countries. (iii) The Indian delegates have been participating in During this year, despite the COVID-19 the meetings of Working Parties and Task Force pandemic, India fulfilled its obligations by considering the prominent role of OECD in transmitting information for the Calendar Year development of international standards in the 2019 to the USA within the stipulated timelines. areas of international taxation, transfer pricing and exchange of information. The policy adopted (ii) For implementation of FATCA and CRS, by India has been continuously engaging and necessary legislative changes were made participating in the development of international through Finance (No. 2) Act, 2014, by amending standards to protect our revenue interests while section 285BA of the Income-tax Act, 1961. ensuring at the same time that the reservations Income-tax Rules, 1962 were amended vide and positions of India are taken into account Notification No. 62 of 2015 dated 7th August, 2015 during the updating of various standards and by inserting Rules 114F to 114H and Form 61B to provide a legal basis for the Reporting Financial guidelines being developed by the OECD. 121Annual Report 2020-2021 (iv) In the last few years, the work of OECD has been jurisdictions have to opt-in to the exchange primarily concentrated on BEPS and AEOI process in respect of each no or only nominal discussed above. Some of the other areas of tax jurisdiction. In procedural terms, the opt-in OECD’s work related to taxation in which India process is by way of notification required to be was actively associated this year are summarized submitted to the Coordinating Body Secretariat below: of the Convention. India has submitted the final opt-in template to the Coordinating Body (a) OECD Global Relations Training Programme Secretariat. (GRTP) (c) OECD’s Working Party 1 India has been nominating officers to the OECD GRTP every year, which has been an important The Working Party 1 (WP-1) on Tax Conventions tool for capacity building of our officers. During and Related Questions was created on 1st May the year, due to the Covid-19 pandemic, the face- 1971 with the mandate to act as a forum for the to-face training programmes were cancelled. discussion of issues related to the negotiation, Various courses were, however, held through the application and interpretation of tax conventions, Knowledge Sharing Platform (KSP) of OECD and to examine proposals for the modification of the were conducted virtually. Many participants from OECD Model Tax Convention and to draft India enrolled directly on the courses conducted appropriate recommendations for dealing with on various topics such as tax treaties, transfer the issues it has examined and for periodic pricing, BEPS action points, exchange of updates to the Model Tax Convention. Since then information, etc. WP-1 has brought out multiple updates to the Model Tax Convention latest being 2017 update (b) Forum on Harmful Tax Practices (FHTP) which was released on 18th December, 2017. Forum on Harmful Tax Practices (FHTP) was Being an active participant to this forum, India established following the publication of OECD’s has protected its source based taxation rights by 1998 report on “Harmful Tax Competition: An successfully incorporating its consistent Emerging Global Issue” to identify those positions, wherever required, under various preferential tax regimes that have harmful effects. articles in the recently released 2017 update to Main work of FHTP is to review preferential tax the OECD Model Tax Convention. India’s regimes of member countries and to make reservation to the Articles and commentary are recommendations to remove features that create recorded under the Chapter “Non-OECD harmful effect or to abolish the regime. Economies’ positions on the OECD Model Tax Forum on Harmful Tax Practices (FHTP) of CFA, Convention”. OECD is presently undertaking work under Action 5 of Base Erosion and Profit Shifting (BEPS) India has been regularly participating in the Action Plan. Under Action Item 5 of BEPS Action deliberations of WP-1 and contributing to working Plan, FHTP is required to deliver three outputs on issues related to tax treaties, model tax (i) Finalization of review of member/associate conventions and their commentaries, including county regimes; (ii) A strategy to expand all emerging issues requiring amendment to the participation to non-OECD member countries; (iii) model tax conventions and their commentaries. Revision of existing criteria. The work area of WP-1 also includes follow-up During 2020, India’s transparency framework work undertaken in respect of Action 6 under Action 5 of the Base Erosion and Profit (Preventing Treaty Abuse), Action 7 (Preventing Shifting was reviewed positively. Artificial Avoidance of PE status) and Action 14 The Inclusive Framework approved the (Making dispute Resolution More Efficient) of the resumption of the application of the substantial BEPS project, as identified in the final reports of activity factor to no or only nominal tax these actions, which have already been endorsed jurisdictions (hereafter the “Standard”) in by OECD and G-20 Countries including India. November, 2018. Pursuant to the Standard no or nominal tax jurisdictions (hereinafter, NNTJs) In view of the ongoing work on taxation of digital are required to spontaneously exchange economy, WP1 has also been tasked with information on the activities of certain resident carrying forward the work on building the entities with the jurisdiction(s) in which the consensus solution for addressing the tax immediate parent, the ultimate parent and/or the challenges arising from digitalization of the beneficial owners are resident. In order to receive economy especially with regard to formulation relevant information, potential recipient of new nexus rule under Pillar 1 and treaty related 122Department of Revenue III issues under Pillar 2. Considering India’s active i) pursue its work on issues pertinent to transfer involvement and valuable contribution to the pricing and modify the OECD Transfer Pricing ongoing work on taxation of digital economy, India Guidelines for Tax Administrations and has also been opted as member of Extended Multinational Enterprises as necessary; ii) Bureau of the WP1, which proposes to undertake monitor the implementation of the Guidelines, in the technical work on formulating new nexus rule co-operation with the tax authorities of Adherents under Pillar 1 and the tax treaty-related issues and with the participation of the business arising out of Pillar 2 (GloBE) encompassing the community and other stakeholders, and report design of a switch-over rule for tax treaties; a to Council in light of this monitoring every five subject to tax rule for inclusion in tax treaties; years; and iii) develop its dialogue with and the compatibility of the Pillar 2 proposals with jurisdictions that have not adhered to the tax treaty obligations. During the year, numerous Guidelines, with the aim of assisting them to meetings of the WP1 took place to discuss the become familiar with and adhere to the technical issues concerning the various design Guidelines. elements and building blocks of both Pillar 1 and Pillar 2. India has been regularly participating in the deliberations of WP-6 and contributing to working (d) OECD’s Working Party 2 on issues related to emerging areas of transfer pricing, development of transfer pricing guidance The Working Party No. 2 (WP2) on Tax Policy on Financial Transactions, and most recently, on Analysis and Tax Statistics provides an developing a Guidance to deal with transfer opportunity to convey India’s views on important pricing issues arising due to the COVID-19 subjects of tax policy. It has been mandated with pandemic. taking forward the work on the BEPS Action 11 report “Measuring and Monitoring BEPS”. It inter In view of the ongoing work on taxation of digital alia involves: economy, WP6 has also been tasked with carrying forward the work on building the a. Establishing methodologies to collect and consensus solution for addressing the tax analyses data on BEPS and the actions to challenges arising from digitalization of the address it: economy especially with regard to the following work streams under Pillar 1: segmentation b. Develop recommendations regarding indicators framework, losses under Amount A, elimination of the scale and economic impact of BEPS and of double taxation, and Amount B. During the ensure that tools are available to monitor and year, numerous meetings of the WP6 took place evaluate the effectiveness and economic impact to discuss the technical issues concerning the of the actions taken to address BEPS on an various design elements and building blocks of ongoing basis. Pillar 1, wherein India made active contributions to the ongoing deliberations. WP2 has also been charged with conducting an Economic Impact Assessment of the proposals (f) OECD’s Working Party 10 being considered to address the tax challenges of digitalization of the economy. India has been The mandate of OECD Working Party 10 (WP regularly coordinating with the WP2 in this 10) on Exchange of information and Tax project, giving inputs wherever necessary. The Compliance is to provide support for final report of the Economic Impact Assessment improvements in the legal, practical and was presented before the Inclusive Framework administrative framework to facilitate exchange in October, 2020 and has now been placed in of information and mutual administrative public domain. assistance between the countries with the view to improving tax compliance and ensuring As part of their work on Tax Policy Analysis, the protection of taxpayers’ rights. WP2 has also compiled a list of tax related measures taken by various jurisdictions to The meetings of the WP 10 were held virtually combat the COVID-19 pandemic. this year and were attended by the Indian delegates. The major work undertaken in WP 10 (e) OECD’s Working Party 6 this year was as follows: The Working Party No. 6 on the Taxation of  Model Rules for Reporting by Platform Operators Multinational Enterprises’ current mandate is to: with respect to Sellers in the Sharing and Gig 123Annual Report 2020-2021 Economy were finalized during the year considerable progress in implementing the international tax transparency and exchange of  Discussion on development of exchange information standards. Currently, the Global framework for Virtual assets and E-money Forum has 161 member jurisdictions which include all G20 countries. Together they work on  Initiation of review process of the Common an equal footing to put an end to offshore tax Reporting Standard evasion. India is an active member of the Global Forum (g) OECD’s Working Party 11 and holds leadership positions in its key bodies/ governance structure. Presently, India is a Working Party 11 (WP11) is entrusted with the member of the Steering Group (18 countries) and responsibility of addressing the following BEPS Vice Chair of the Peer Review Group (30 Action Points related to ‘Aggressive Tax Planning’ countries). India is also a member of the AEOI (ATP): Peer Review Group (34 countries). India sends more than 1000 exchange of information  Action Item No. 2 – Neutralize the effects of hybrid requests under tax treaties to various jurisdictions mismatch arrangements; annually, inter alia, requesting information  Action Item No. 3 – Strengthening Controlled regarding undisclosed foreign assets/income of Foreign Corporation (CFC) Rules; Indian taxpayers. India is also exchanging financial account information with various  Action Item No. 4 – Limit Base Erosion via jurisdictions under automatic exchange of Interest Deductions and other Financial information mechanism. The Global Forum has payments; and been a partner in this fight against black money stashed abroad by its work on the implementation  Action Item No. 12 – Require taxpayers to of international standards on transparency and disclose their aggressive tax planning exchange of information for tax purposes. India’s arrangements [Mandatory Disclosure Regime active engagement with the Global Forum helps (MDR)]. in maintaining a mutually beneficial relationship. As part of the work being done for the consensus The 13th Plenary Meeting of the Global Forum solution to address tax challenges posed by was held on 9-11 December 2020. The Hon’ble digitalisation, Working Party 11 has been called Finance Minister was the keynote speaker at the upon to advance the work on Pillar Two liaising opening of the Plenary Meeting where she, inter with other working parties as necessary. WP-11 alia, emphasized on the need of robust has to work on technical aspects of Pillar 2, which international cooperation and tax transparency will concentrate on areas such as income framework. She also called upon the global inclusion rule, switch over rule, under taxed community to further strengthen and push payments rule, subject to tax rule etc. These forward the tax transparency framework with a issues are of significance and relevance to both, view to address the remaining challenges and the Indian tax authorities as well as the Indian emerging/new challenges. The theme of the taxpayers that are part of an MNE groups. India Plenary Meeting was “Transparency for Tax has been keenly looking at the scope that is being Purposes in the time of COVID-19 – Working chalked out by WP-11 and actively participating together to promote the fairness of tax systems so that India is able to take an appropriate and generate revenue”. During the year, position on addressing remaining BEPS risk of numerous meetings of the Steering Group were profit shifting to entities subject to no or very low held to deliberate upon the future work of the taxation. During the year, various meetings of the Global Forum and assess the impact of the WP11 were held in order to develop the Pillar 2 COVID-19 pandemic on the work of the Global blueprint. Forum and its member jurisdictions and take policy decisions on the way forward. Meetings of (h) Global Forum the Peer Review Group and the AEOI Peer The Global Forum is the leading international Review Group were also held to discuss and body working on the implementation of global tax adopt peer review reports on the implementation transparency and exchange of information of the international standards on Exchange of standards around the world. Over the past 11 Information on Request (EOIR) and Automatic years, the Global Forum has achieved Exchange of Information (AEOI) of various 124Department of Revenue III jurisdictions. India also provided Expert Academy of Direct Taxes, Nagpur in October, Assessors for peer reviews conducted by the 2020. A total of 100 participants, including around Global Forum. 80 international participants, who were nominated by their respective countries, attended this (i) Tax Inspectors Without Borders (TIWB) webinar from 18 Commonwealth Countries. In this webinar various topics were covered India is an active participant as a Partner including International Taxation, Money Administration in TIWB programme which is a Laundering, Taxation issues in Virtual Currencies, joint initiative of UNDP and OECD. Currently, etc. Due to Covid 19 Pandemic, the program was India is providing its Tax Experts for the TIWB conducted online. The program has received a programmes with eSwatini, Sierra Leone, very good response especially from the Seychelles and Bhutan as a Partner international members of CATA. India also Administration in the field of transfer pricing and received an appreciation letter from the Executive international taxation. India is also providing its Director of CATA for its efforts of conducting the Tax Experts for TIWB-CI (Criminal Investigation) program. programmes with Uganda and Kenya in the field of tax crime investigations. 2.7.10 Income Tax Overseas Units 2.7.9 Coordination with other Multilateral Agencies (i) During the year 2020, Income Tax Overseas Units (ITOUs) remained functional in eight Indian (i) India is an Associate member of the Inter- Missions viz. Mauritius, Singapore, France, American Centre of Tax Administrations (CIAT), Japan, Netherlands, UK, Germany and USA. a multilateral organization. The efforts of CIAT IRS officers have been posted as First Secretary are focused on cooperation between the tax (Economic), in these Income Tax Overseas Units administrations of different jurisdictions with a (ITOUs). view to work jointly against international tax evasion. To fulfil this objective, CIAT organizes (ii) Selection process of IRS officer to the post of different activities, studies, workshops, seminars First Secretary in the Income Tax Overseas Unit etc. wherein tax administrations can share their (ITOU) at Germany was completed during the suggestions, practices, experiences etc. During year and the officer has joined the Indian Mission 2020, India participated in the General Assembly at Germany. meeting held by CIAT virtually. India also participated in the meeting of the CIAT regarding (iii) The tenure of officers posted in most of these ‘Tax Administration and COVID-19 crisis’. ITOUs would be getting over soon and the process of selection of successors is going on. (ii) India has been an important member of Commonwealth Association of Tax 2.7.11 Cooperation with BRICS Countries on Tax Administrators (CATA) since 1979. CATA’s Matters activities include organizing annual technical workshops, high quality training programmes for (i) BRICS is an important multilateral block that tax officials, in country training programmes seeks to represent the interests of the developing tailored to meet specific needs of members, countries. The BRICS countries together account publication of a quarterly newsletter, provision for 30% of the global land, 43% of the global of consultancy services and research facilities population and 21% of the world’s GDP. This for members upon request, supply of information platform aims to promote peace, security, to members, etc. During 2020, India participated prosperity and development in multi polar, in the Taxation of International Transactions interconnected and globalized world. The BRICS (TOIT) program held virtually by the Malaysian countries represent Asia, Africa, Europe and Tax Academy in association with CATA. India also Latina America, which gives their cooperation a participated in the virtual workshop for CATA transcontinental dimension making it especially Country correspondents and Regional Directors. valuable and significant. (iii) Capacity Building in Developing Countries: In (ii) The Heads of Revenue of all the BRICS countries continuation of its efforts of developing the tax had agreed in 2018 on a High-Level Capacity capacity of developing countries, India organized Building Action Plan in which all the BRICS an International Workshop on Modern countries shall be identifying their areas of Techniques of Investigation and Intelligence strength and invite delegation from other BRICS Gathering in collaboration with CATA National countries with an aim towards building capacity 125Annual Report 2020-2021 of the other countries in that area. Under this administrations of 14 of the member countries. Action Plan, workshops/symposiums have been India is member of the FTA Bureau and the held at Brazil, Russia, India and South Africa. Revenue Secretary, being head of revenue administration in India, is FTA Commissioner (iii) Russia is the host country of BRICS in the year from India and represents India in the FTA 2020. Due to COVID-19 global pandemic, the Bureau. Heads of Tax Authorities and tax experts Meetings were conducted virtually this year. India (ii) Being a member of the FTA and its Bureau, India brought up multiple points to the Heads of Tax is an active participant in the work programme Authorities Meeting and which were supported of the FTA. The Forum is also supported by sub- by the other BRICS countries in these meetings. groups and specialist networks formed of subject-matter experts from participating revenue These points are summarized below: bodies for undertaking work in specific areas. The  Commitment to take measures to ensure work programme of FTA comprises activities that business continuity, in the current global Covid- are of importance for checking cross border tax 19 pandemic, while acknowledging the avoidance, improving tax administration and responsibility to secure tax revenue; ushering in an era of automatic exchange of financial information, thus putting an effective  Continuing support for international initiatives check on black money. FTA’s present towards reaching a globally fair and universally collaborative work is organized under three transparent tax system; pillars, representing the challenges and opportunities created by a changing business  Reiteration of BRICS’ support to the G20/OECD environment, rapid technological change and an project on addressing tax challenges posed by increasing global economy: digitalisation; a) Tax Certainty and BEPS:  Continuing support towards implementation of the global standards on transparency and  Dispute prevention and resolution. exchange of information, and the minimum  BEPS implementation and impacts. standards of BEPS Action Plan;  International Compliance Assurance  Endorsement for the global Common Reporting Programme (ICAP). Standards (CRS) for the automatic exchange of information; b) Tax Co-operation  Reaffirming their commitment to need-based  Effective use of information received under the capacity building and recognising great Common Reporting Standard (CRS). advantages of mutual understanding, inclusiveness and mutually beneficial  Common Transmission System (CTS): cooperation. expansion and enhancements. 2.7.12 India’s Collaboration with Forum on Tax c) Digital Transformation Administration (FTA)  Tax administration 2030. (i) Forum on Tax Administration is a forum for co- operation between revenue bodies and was  Small and medium sized enterprises (SMEs): created in July, 2002 at the initiative of Committee improving compliance and reducing burdens. on Fiscal Affairs (CFA) of the OECD, with the  Sharing and Gig Economy: Effective Taxation of aim of promoting dialogue between tax Platform Sellers. administrations and of identifying innovative tax administration practices to increase efficiency, (iii) The work programme of the FTA is delivered by effectiveness and fairness of tax administration a range of collaborative networks, knowledge and reduce compliance burdens. Presently, the sharing Communities of Interest (CoI) and a FTA consists of 53 OECD and non-OECD number of time-limited projects and reports countries including members of the G20. The undertaken by smaller groups of tax work of the FTA is overseen by the FTA Bureau, administrations together with the FTA Secretariat. which comprises heads of revenue All of these work streams operate under the 126Department of Revenue III sponsorship of lead Commissioners. India has consult each other and reach an understanding been actively participating in the FTA projects to avoid double taxation. such as: (ii) India has a wide network of DTAAs and has been  Effective taxation of platform sellers in sharing & able to successfully resolve double taxation gig economy. issues with various treaty partners by effectively using the Mutual Agreement Procedure (MAP)  Effective use of information received under Article. The largest number of tax disputes is with Common Reporting Standard (CRS). the United States of America, which is not surprising because both countries have a very  Online Cash registers. high volume of trade and American MNEs have significant business presence in India. This calls  Expansion of Common Transmission System for a constant and deep engagement by the (CTS). Indian competent authority with the American competent authority. India also has a number of  Tax Debt Management. tax disputes with United Kingdom, Japan, China,  Joint International Task force on Shared Netherlands, Canada, Switzerland, Australia, Intelligence and Collaboration (JITSIC) etc. Denmark, Sweden, Finland, Germany, etc. Both the Joint Secretaries in the Foreign Tax and Tax Under current work programme of the FTA, India Research (FT & TR) Division of CBDT (JS, FT & is a member of project group for following TR-I and JS, FT & TR-II) are the two Indian projects: competent authorities. While JS, FT & TR-I is the competent authority for North American and  Small and Medium sized Enterprises (SMEs): European countries, JS, FT & TR-II is the improving tax compliance and reducing burdens. competent authority for the rest of the world.  BEPS Impacts and inputs. (iii) New procedures and new systems were put in place for continuing APA and MAP work, in view  Tax administration 2030. of the challenges faced due to CoVID-19 pandemic. During the year, multiple discussions (iv) India has been regularly participating in these through emails and letters were held with projects through emails and virtual meetings and competent authorities of many countries mainly, wherever required comments/inputs are being USA, UK, Sweden, Switzerland, the Netherlands, sent by the FT&TR Division to the FTA Secretariat Germany and Denmark etc. to resolve the tax from time to time. Recently, India participated in dispute cases pending under the Mutual the 13thForum on Tax Administration (FTA) Virtual Agreement Procedure (MAP) provided in the Plenary Meeting held on 7th – 8th December, 2020. Double Taxation Avoidance Agreements. 2.7.13 Mutual Agreement Procedure (iv) Three Competent Authority meetings have been held between India and USA virtually to discuss (i) Multinational Enterprises (MNEs) operating and resolve Mutual Agreement Procedure (MAP) across the world are subjected to transfer pricing and Bilateral Advance Pricing Agreement (BAPA) audit in various countries to ensure that their cases as per provisions of Double Taxation related party international transactions are priced Avoidance Convention (DTAC) between India at arm’s length. Sometimes, the income of the and USA. Further, Competent Authority Meetings group is taxed in various jurisdictions and have also been held virtually with UK and the disputes arise due to economic double taxation Netherlands during the year. of the same income in the hands of different taxpayers of the same MNE group. Similarly, (v) The Competent Authorities of India and Japan MNEs also face juridical double taxation where have been discussing virtually to resolve Mutual the same income is taxed in the hands of the Agreement Procedure (MAP) and Bilateral same taxpayer in different jurisdictions. To Advance Pricing Agreement (BAPA) cases as per resolve such disputes, the Double Taxation provisions of Double Taxation Avoidance Avoidance Agreements (DTAAs) provide a Convention (DTAC) between India and Japan. mechanism through the “Mutual Agreement Procedure” Article of such DTAAs. Under this (vi) During the year, in aggregate approximately 130 mechanism, the competent authorities of MAP cases were resolved pertaining to JS countries having a DTAA between them may (FT&TR-I) Charge with treaty partners in North 127Annual Report 2020-2021 America and Europe. During the period from Unilateral APAs were signed by using the remote April, 2014 till December, 2020, about 790 cases signing protocol due to challenges in physical (assessment years) have been resolved under signing during the CoVID-19 pandemic. MAP, which resulted in significant reduction of litigation in India. 2.8 Directorate of Systems (vii) During this year, India and Japan have been 2.8.1 Project Name: PAN conferred an award jointly for the best MAP (a) Permanent Account Number (PAN) caseload management in transfer pricing MAP cases in the year 2019. As per section 139A of Income-tax Act, 1961 PAN (Permanent Account Number) is a 10-digit alpha- 2.7.14 Advance Pricing Agreements numeric number allotted by the Income-tax (i) The Advance Pricing Agreement (APA) department to taxpayers and to the persons who programme of CBDT, which was introduced more apply for it under the Income-tax Act, 1961. than eight years ago, is one of its foremost Permanent Account Number (PAN) enables the initiatives for promoting a non-adversarial and department to link all transactions and investor-friendly tax regime in India. The correspondences of a person with the programme has been accepted well by taxpayers department. and tax consultants, which is evinced by the fact PAN database has shown steady growth in tune that 345 APAs have been entered into till date by with economic progress. The progressive CBDT. number of PANs allotted up to 9th November, (ii) The APA programme has contributed significantly 2020 (cumulative) is 53,04,23,511. During the to the Government’s mission of promoting ease current year (up to, October 31, 2020) of doing business, especially for MNEs which 2,57,53,856 PANs have been allotted. have a large number of cross-border transactions (b) Common Business Identification Number within their group entities. By virtue of being (CBIN or BIN) founded on principles of mutual trust and cooperation between taxpayers and revenue As per section 139A of the Income-tax Act 1961, authorities, the programme has helped in shaking role of Permanent Account Number (PAN) was off the image of India being a jurisdiction where envisaged as that of a tax-payer identity limited the tax administration ran an aggressive transfer to Income-tax department. However, PAN is now pricing regime. Further, by providing tax certainty required for various activities like opening of a to taxpayers, it has contributed immensely in bank account, opening of a demat account, for prevention/resolution of costly and protracted tax other financial transactions prescribed in Rule disputes which would have otherwise clogged the 114(B) of the Income-tax Rules, 1962, judicial system, and has helped in sending across registration for Goods and Services Tax (GST) the signal that the Government wants taxpayers etc. Thus, PAN is leveraged to become Common to invest and grow. Business Identification Number (CBIN) or simply Business Identification Number (BIN) for (iii) Besides successfully running the unilateral leg providing registration to a number of government of the APA programme, CBDT has also vigorously departments and services. engaged with its various tax treaty partners to negotiate and enter into Bilateral APAs, which (c) One Person- One PAN provide the taxpayers an added benefit of relief from any double taxation. The Income-tax Act, 1961 permits one person to have only one PAN. To avoid issuance of (iv) Data related to signing of APA is published from duplicate PAN, the data is checked for duplication time to time and a total of 345 APAs (298 by using the software having phonetic matching Unilateral APA and 47 bilateral APA) have been algorithm. In order to further strengthen the de- signed during the period from March, 2014 to duplication process the PAN database is being November, 2020. The CBDT has also started the seeded with Aadhaar number for individuals. process of digital signing of APAs due to the constraints caused by Covid-19. A total of 16 (d) PAN Verification Facility APAs (8 Unilateral APA and 8 bilateral APA) have been signed digitally during the period from April PAN verification facility is provided through the 2020 to November, 2020. All Bilateral and website of the Income-tax department through 128Department of Revenue III link “Know Your PAN” facility on official website c. Integration with SEBI of Income-tax department www.incometaxindiaefiling.gov.in, if name, Integration with SEBI, for grant of registration to father’s name and date of birth (DoB) /Date of the Foreign Portfolio Investor (FPI) by the SEBI Incorporation (DoI) are known. and allotment & Issuance of PAN by the Income Tax Department has been launched. Under this Service for PAN verification is also provided by process PAN/e-PAN shall be allotted and issued Income-tax PAN Service Providers (UTITSL and to the FPIs on the basis of common application NSDL e-Gov) to agencies falling under any of form submitted to the SEBI for grant of the approved categories as per procedure laid registration by SEBI to the entity. Number of PAN down by the Directorate of Income-tax allotted to FPIs by the Income-tax department (Systems). till October 31, 2020 is 161. (e) Grievances Redressal Machinery: d. Aadhaar address update facility Grievance redressal machinery related to PAN Facility to update address in PAN data base, is well defined. The Income-tax department has with the address given in Aadhaar data base has a special electronic grievance redressal system been launched. This facility is free of cost and called e-Nivaran on e-filing portal of the works through integration with UIDAI. Department i.e. on incometaxindiaefiling.gov.in. Grievances are also received through Centralized Public e. Facility for downloading e-PAN: Grievance Redressal and Monitoring System (CPGRAMS) of Government of India and through A facility to enable the existing PAN holder to the designated PAN service providers. download e-PAN through MSP’s websites after OTP authentication has been created. This (f) New Initiatives enables a secure e-PAN which is printable many a times. e-PAN can be downloaded in pdf format. a. Instant PAN allotment through Aadhaar based Further, facility to download in .xml format e-KYC (machine readable) has also been launched. For the purpose of simplification of Permanent f. Enhanced QR code on e-PAN & Physical PAN Account Number (PAN) allotment the PAN Card: module of DIT (System) developed the facility for instant allotment of PAN (on near to real time The e-PAN is embedded with an enhanced QR basis), which was launched by the Hon’ble code which captures demographic data as well Finance Minister on 28.05.2020. This facility is as photograph and signature of applicant. now available for those PAN applicants who This QR code can be read through an app which possess a valid Aadhaar number and have a is freely available on Google Play Store. The mobile number registered with Aadhaar. The enhanced QR code enables offline verification allotment process is paperless and an electronic of PAN data, thus eliminating possibility of PAN (e-PAN) is issued to the applicants free of photo shopping etc. resulting in enhanced cost. Number of PAN allotted through this security of PAN card and e-PAN. functionality till October, 2020 since the inception of the project is 35,17,884. g. Integration of PAN with AADHAAR UIDAI (Aadhaar PAN linking) b. Integration with Ministry of Corporate Affairs (MCA) for issue of PAN and TAN/Instant Integration of database with UIDAI has already e-PAN for corporate entities: taken place for seeding of Aadhaar with PAN for dual purpose. It prevents any of the duplicate PAN and TAN allotment has been integrated with PAN from being issued to any applicant as the process of registration of new companies well as to identify the applicant having an using a Common Application Form SPICe at already issued PAN. Till 09.11.2020 a total of MCA portal. Under this facility PAN and TAN are 34,96,56,533 PANs of individuals have been being allotted on near to real time basis. Number seeded with Aadhaar data base, which is of PAN allotted through this facility till October approximately 67.38% of total PAN allotted to 31, 2020 is 4,58,126 and the number of TAN allotted through this facility till October 31, 2020 individuals. Seeding of Aadhaar in remaining is 4,59,162. PANs is presently going on. 129Annual Report 2020-2021 2.8.2 Project Name: Project Insight executed. As a result, 6.36 Lakh identified non- filers filed their return and self assessment tax of 3,467 crore was paid by target segment after 2.8.2.1 An integrated data warehousing and business campaign. intelligence platform has been operationalised to enable ITD in meeting the three goals namely (i) b. E-campaign for significant transactions (during to promote voluntary compliance and deter FY 2019-20) was implemented for 5,35,115 noncompliance; (ii) to impart confidence that all taxpayers who had conducted high value eligible persons pay appropriate tax; and (iii) to transactions in the current year and the quantum promote fair and judicious tax administration. The of advance tax paid was lower than the expected key components of Insight System are: amount. The significant transactions were shown to the taxpayer and a facility was provided to i. A State-of-the-Art Data warehouse has been provide confirmation and feedback (if the operationalized and regular reports/MIS are information was incorrect). After the campaign, provided to CBDT and Government for pre- 1,08,404 taxpayers paid advance tax of ` 9,081 budget analysis, impact assessment and policy Crore. formulation. c. E-campaign for high value transactions (including ii. A dedicated reporting portal (https:// SFT, TDS/TCS, GST, Exports, Imports, foreign report.insight.gov.in) provides a comprehensive remittance, securities transactions etc.) vis-a-vis interface between Reporting Entities and the the information filed in the ITR was executed for Income-Tax Department. The Reporting Portal 71,952 taxpayers for A.Y. 2019-20. Underlying enables seamless data processing, data quality high value transactions were shown to the monitoring and report rectification. taxpayer on the Compliance portal and online facility was provided to validate the information iii. Income Tax Transaction Analysis Centre and provide feedback if the information was (INTRAC) handles data integration, data incorrect. During the campaign, more than processing, data quality monitoring, data 33,000 taxpayers submitted online response. Out warehousing, master data management and data of the target segment, 3903 taxpayers revised analytics. Data has been enriched by their returns out of which 1692 taxpayers standardization of bank account number/contact/ increased the income in revised return by 1438 address, address clustering, geocoding, Cr. relationship identification/clustering. Data Analytics is being used for identification of high- v. Business Intelligence Dashboard consisting of risk non-filers, selection of cases for scrutiny 200+ interactive Business Intelligence (BI) under CASS, identification of high-risk refund reports has been implemented to provide claims, identification of high-risk remittances, risk actionable information to ITD users with drill assessment of information received under down. The BI reports have been classified under Automatic Exchange of Information (AEOI), various themes such as Tax Collection, Tax Base, Country-by-Country Reporting (CbCR) and ITR Information, Business Information, Suspicious Transaction Reports (STRs). Exemption, Taxpayer Compliance, TDS iv. Compliance Management Central Information, TDS Compliance, International Processing Centre (CMCPC) leverages Transactions, Third Party Information etc. campaign management approach (consisting of emails, SMS, reminders, outbound calls, vi. GIS (Geographical Information System) letters) to support voluntary compliance and Dashboard consisting of more than 100 resolution of compliance issues. A dedicated interactive GIS reports have been implemented compliance portal (https:// to provide high-level geographical view to senior management for effective monitoring. compliance.insight.gov.in) displays information to the taxpayer and capture response on vii. Profile View under Insight Portal provides compliance issues in a structured manner for comprehensive multi-year profile of taxpayer and effective compliance monitoring and other entities with secure role based information evaluation. access control. The Profile views display key insights, financial ratios and related information a. E-campaign for non-filers for AY 2019-20 was for effective analysis. 130Department of Revenue III viii. Insight Knowledge Hub, an integrated platform 2.8.2.4 Computer Assisted Scrutiny Selection (CASS) consisting of i-Wiki, i-Library, i-Forum and i- Income Tax Department has been implementing Query, has been rolled out to assist ITD in Computer Assisted Scrutiny Selection (CASS) for “Organizing creating, sharing, using selecting cases for scrutiny (audit). The suggestions and managing organisation knowledge for received from field formations and the outcome in cases getting the right knowledge to the right person at selected in prior years are reviewed by a cross functional the right time”. committee (including representatives from assessment, investigation, intelligence, international taxation, transfer ix. Insight Learning Hub, an integrated platform pricing, risk assessment, systems) to refine the scenarios consisting of learning management system, and parameters. New scenarios are also introduced on online courses, competency tests and training the basis of analysis of information sources and material repository has been rolled out to environmental scanning. supports capacity building of ITD employees by “delivery and tracking of customized learning 2.8.2.5 Non- Filers Monitoring System (NMS) content to employees using competency-based training approach”. 15 online courses have also The Income Tax Department has implemented the Non- been rolled out for customised training and Filers Monitoring System (NMS) which assimilates and analysis in-house information as well as transactional data capacity building of assessing officer. received from third- parties, including Statements of Financial Transaction (SFT), Tax Deduction at Source 2.8.2.2 In implementation of faceless schemes Insight (TDS) and Tax Collection at Source (TCS) statements, System is being leveraged for automated allocation of Intelligence and Criminal Investigation (I&CI) data etc. to cases, verification, risk assessment of draft orders, bulk identify such persons/entities who have undertaken high signing etc. value financial transactions but have not filed their returns. During the year 19 lakh non-filers with potential tax 2.8.2.3 Proposal for Insight Enhancement (insight+) was liabilities were identified. The information about approved after considering the new requirements transactions is made available on the online portal and emerging from changes in legal framework and operating email and SMS is sent to the non-filer to provide online environment. The scope of Insight enhancement consists response and submit return. Many non-filers file their of following components: return and pay appropriate taxes. The details of high- risk non-filers are pushed to the field formation for further i. Comprehensive API based integration with action. internal (CPC 2.0, ITBA) and external (Reporting entities, Exchange Partners) systems. 2.8.2.6 Payment of Taxes ii. Implementation of Intelligent Decision Support The Online Tax Accounting System (OLTAS) facilitates System to meet the requirements of Centralised near real time reporting, monitoring and reconciliation of e-Verification Scheme. tax payments made by taxpayers through banks. E- payment of taxes has been enabled through Net Banking iii. Implementation of Annual Information Statement and ATMs and nearly 89% of tax is collected through this (AIS). mode facilitating payment of taxes anytime from home/ office without having to go to a bank branch. Companies iv. Aadhaar based login on Compliance, Reporting and auditable cases (taxpayers where provisions of and Data Exchange Portal. section 44AB of the Income-tax Act, 1961 are applicable) are mandatorily required to electronically pay taxes. v. Mobile app for basic Insight functionalities. Financial year wise percentage of e-payments is as below: Financial Year % in terms of total number of % in terms of total amount associated e-challans with e-challans 2018-19 82.26 91.14 2019-20 84.36 90.95 2020-21 85.67 91.76 (up to Nov 20) New Payment solution (TIN 2.0) is being rolled out under CPC 2.0 during FY 2020-21. 131Annual Report 2020-2021 The expected benefits are as under: have been processed for electronic payment.  Enable tax payment through RTGS /other A web-based status tracking facility in channels collaboration with India Post and National Securities Depository Ltd. (NSDL) is available under the Scheme.  Real time credit of tax payment and MIS Call centre facility with toll free number 1800-42-59-760  100% reconciliation of challan data and funds is also available for tracking status of refunds issued through the scheme.  Online mechanism for challan correction The Assessing Officer’s role in issuing refunds is limited to processing the return of income on computer. 2.8.2.7 Refund Banker The status of refunds is updated on the departmental application with reasons for non- payment in case of The Refund Banker project has enabled system unpaid or returned refunds, to enable the assessing driven process for determination, generation, issue, officers to re-send the refund for payment after removing dispatch and credit of refunds. This project has made the deficiency. Audit trail and MIS on unpaid/unpicked the process of delivery of refund completely automated, refunds (with ageing) are available on departmental speedy and transparent. Under the Refund Banker system for monitoring status of issue of refunds. There Scheme, paper and electronic refunds determined by the has been a steady increase in number and percentage Income Tax Assessing Officers are sent in electronic files of refunds issued through the scheme. During current by Income Tax Department to the State Bank of India Financial Year, 2019-20 (up to December 2019), the (SBI), which has been designated as the Refund Banker percentage of refunds issued through the scheme is 99.99 agent of the Department. The Refund Banker sends ECS % of the total number of refunds issued all over India as or Direct Credits to the bank accounts, where the refunds under: Financial Year No. of Refunds No. of Other Total no of Percentage of (Paid) through Refunds refunds paid Refunds Refund Banker (Paid) Paid through Refund Banker 2018-19 2,81,90,436 2,493 2,81,92,929 99.99 2019-20 2,88,47,480 456 2,88,47,936 99.99 2020-21(up to 44,51,503 117 44,51,620 99.99 Nov 2020) During FY 2020-21, real time integration (API based) between CPC 2.0 and refund banker is being implemented to ensure direct credit of refund on the same day. 2.8.3 Project Name: Integrated E-filing & drastically, facilitation to taxpayers in resolving outstanding Centralized Processing Centre (CPC) 2.0 tax demands, integrated contact centres for taxpayer assistance and tax payer outreach program through digital With a view to provide a major fillip to e-governance in media and employer/partner accreditation program to the Income Tax Department, Integrated e-Filing & CPC bring significant enhancement in services to taxpayers. 2.0 Project is under development which will build upon the success and learnings from e-filing 1.0 & CPC 1.0 Status till December 2020 projects. The project which was approved by the Union Cabinet on 16/01/2019, will employ new processes, state Phase I i.e. CPC component of the project has gone live of the art solutions and practices to radically transform from 25th November 2020. The broad objectives of Phase and scale up the e-governance capability and I of project are listed as under: performance of the Income Tax Department in delivering taxpayer services. The project envisions to redefine a. Faster and accurate outcomes for taxpayer. income tax filing and processing in India to provide a best- in-class experience to all taxpayers. The four components b. First time right approach. of this would be speed, usability, convenience and c. Enhancing user experience at all stages with accuracy in terms of website efficiency and availability as well as processing outcomes. The project envisages revamped communications. various functionalities such as pre-filling of ITR and d. Improving taxpayer awareness and education acceptance by taxpayer as a means to improve accuracy through continuous engagement. and to reduce refund/processing turnaround time 132Department of Revenue III The Phase I of the CPC2.0 project envisages The TAXNET project acts as the architectural streamlining of the process and up scaling of the backbone of the entire digital edifice of the Direct tax processing capacity to reduce refund/processing administration in India. It provides seamless, secure, turnaround time drastically. This will, inter-alia, bring efficient & dedicated connectivity to more than 780 significant enhancement in services to taxpayers. Three locations spread over more than 500 cities in India. It is weeks since the go-live of Phase I of CPC component, like golden thread which permeates through all modules, 93.71% of the total processable ITRs (2.09 crore) were applications & platforms of the Income Tax Department. processed till 10th December 2020 and intimations were In effect, it serves as a force multiplier for the entire digital sent to 66.83% taxpayers (1.34 crore). Further, refunds machinery of the department. The ultimate success and in 77.57% cases (58.37 lakhs) were initiated till 13th the execution of the all the modules like a Operation Clean December 2020 in a record time. Money, ITBA, CPC-TDS and CPC-ITR-Bangalore, Project Insight etc., in this critical way, entirely rest on its Enhanced version of grievances management shoulders. It works silently in the background, being will be launched as part of integrated communication successfully executed since the year 2008. management to facilitate taxpayers via. social media, Change Order Management is the integral part chatbot, grievance portal, mobile application, integrated of the TAXNET Contract. In the instant dynamic helpdesk. By faster processing of returns and issue of environment it provides much needed operational refunds to the taxpayer’s bank account directly and by flexibility. The major activities in change orders are as adhering to international best practices and standards follows: (ISO certification) along with providing processing status updates and speedy communication, email, SMS and on  Relocation of nodes/ Additional nodes the Department website, CPC 2.0 project will ensure  Establishing new site transparency and accountability.  Shifting of site 2.8.4 Project Name: TAXNET Project  Bandwidth Augmentation 2.8.4.1 Aims and object of the ongoing TAXNET project These are executed as per the departmental is to provide seamless connectivity (IP- VPN services) to requirement and requisitions from the field formations. the departmental users in the income Tax department all The table below gives the brief description of Change over India. Order Management, received during the F.Y. 2020-21 (till 18/12/2020). Sl. Shifting of Sites New Site Relocation Addl. Nodes No. Nodes No of Sites Total No of No of Total No of Nodes Sites Nodes 16 305 07 371 592 425 Grand Total No. of Nodes 1693 2.8.4.2 NEW TAXNET 2.0 PROJECT FOR and reliable connectivity. SELECTION OF MSP FOR WAN, LAN, FMS AND VC SERVICES FOR ITD ii. Implementation and management of Network Operating Centre: A Network Operating Centre The RFP for Taxnet 2.0 was approved by the IFU, the with Network Monitoring System is envisaged Ministry of Law and the Revenue Secretary. After due in the premises of the Department that would approvals, the RFP was released on 02.12.2019 but due facilitate visibility and management of the entire to covid pandemic not started. The Taxnet 2.0 project network centrally. is for selection of MSP for WAN, LAN, FMS and VC Services. The major scope of work of Taxnet 2.0 is iii. Supply, operating and maintaining the VC facility proposed as under: equipment at about 120 locations, provision for software-based Video Conferencing i. Taking over of the existing LAN and creation/ solutions including allowing third party augmentation of LAN to provide assured End- conferences over internet. to-End Secured Network connectivity: The Department now seeks to have about 97% of its iv. Provide comprehensive Facility Management sites on OFC as the medium for last mile and Maintenance Services across all Income connectivity as this would ensure a dependable Tax offices. 133Annual Report 2020-2021 v. Further, the technical and security Tax Deductee in one place along with proper specifications of all the hardware and bifurcation of services between Tax Deductor/ equipment required have been upgraded. Deductee etc. vi. Latest Updates on website through email / 2.8.4.3 NETWORK IMPLEMENTATION MANAGEMENT SMS – It will help the taxpayers in finding out the & MONITORING SERVICES (NIMMS) information required as per upcoming compliance dates on the main window of the Tax NIMMS is envisaged as a Project Monitoring Unit Payer Services. (PMU) of Taxnet 2.0. Through NIMMS, the Department seeks to engage qualified manpower to, inter alia, vii. Tax Gyaan –Tax Gyaan is a multiple-choice oversee implementation of Taxnet 2.0, question web-based game to provide knowledge perform acceptance testing, monitor the network as to the youths accessible from mobile as well as well as perform network and security audit, SLA desktop. verification etc. Other Features of Website: The NIMMS RFP is under finalization and the i. Comprehensive content for Faceless Scheme NIMMS Service Provider is expected to be on-boarded at the same time as the MSP for Taxnet 2.0. ii. Complete information related to Direct Taxes due dates. 2.8.4.4 Web Master Project iii. Promoting Tax Payers to take Integrity Pledge The National Website (https:// – Integrity pledge is being promoted through www.incometaxindia.gov.in) hosts a number of services publishing of relevant web link at Home Page of with user friendly functionalities and features. Amongst the Website. the various services that the website hosts are a number iv. Website is now one of the most educative sites, of facilities put online relating to content on direct tax laws, built on state-of-the-art technology, having a rich PAN, TAN etc., providing returns & statements of e-filed repository of more than 100 Tax and Allied Laws, cases, international tax related content, FAQs, tutorials, Rules, approximately 10,000 Circulars and tax information, press release, latest news etc. The Notifications which are cross-referenced and number of visitors to the website has been continuously hyperlinked for users’ convenience. increasing that shows its efficacy and popularity. v. International Taxation related contents The website contains ‘Tax Payer Services Module’ and ‘Aaykar Setu (Mobile Application on Android)’. An “Exchange of Information” functionality has been created on the Income-tax Department website for dissemination of information to The main highlights of the Aaykar Setu are- financial institutions, Departmental officers as i. ASK IT – It functions as a CHATBOT (A virtual well as public at large. The Chairman, CBDT on machine chatting with the user) which provides 22-11-2019 inaugurated the functionality which solution to queries of taxpayers relating to PAN, consolidates all the relevant AEOI (Automatic TAN, TDS, Return Filing, Refund Status, Tax Exchange of Information) related information at Payment etc. on real time basis one place for convenient access by all ii. Live Chat with Tax Experts – In case users have stakeholders. The portal would be a repository any query they can use the chat option at TPS of policy and technical circulars / guidance / section. This facility will be available on all notifications issued by the CBDT, and provide working days (i.e. Monday to Friday) between links to relevant circulars / guidance issued by 10:00 AM to 06:00 PM the regulatory authorities in India and other international bodies. The portal is not only be iii. Tax Return Preparer’s at your doorstep – It useful for the domestic financial institutions but helps to locate the TRP on Google map. A Tax will also help the foreign tax authorities and Payer can locate / search the TRP at the desktop financial institutions to get information about the as well as on his mobile App. Indian laws, rules and procedures related to AEOI iv. Tax Tools – To facilitate tax calculations for filing under CRS. ITR, various tax tools are available, which give Other features in the same regard include: output required for ITR on the basis of inputs / information available with user. a. More than 130 Tax Treaties, which India had v. TDS / TRACES – It provides links to all the entered into with Foreign Countries, have been services useful for a Tax Deductor / Collector, uploaded (with unique facility of Treaty 134Department of Revenue III comparison) with effect from April 2017. The bandwidth for the purpose is being provided under Taxnet project, the maintenance b. Tax rates as per Income Tax Act vis-à-vis Tax of Video Conferencing devices and facilitation during such Treaties. conferences are ensured by the O/o ADG-4 team. The c. Relevant provisions under Income-Tax Act, importance of VC has grown tremendously since its Companies Act, Service Tax and FEMA for Non- inception in the year 2006 given that senior authorities of residents the Department now frequently resort to such conferences to save precious time and resources. The VC is also used d. There is a section for Synthesized Text for the by the System Directorate for imparting training and “Double Taxation Avoidance Agreements”. So far, resolving queries. ‘Synthesized Text’ for the application of the Agreements entered into with 12 countries has 2.8.4.6 Facility Management Services (FMS) – been uploaded. The O/o ADG-4 team, through its MSP, provides vi. Providing information to the Tax Payer in the the Facility Management Services (FMS) to all the offices form of FAQs / Tutorials / Tax Information across the country. Till 1st June 2014 the FMS was series booklets. supporting 13,000 network users. The network user count vii. Cross linking: - Cross linking across all the increased to 14500 in 2015, 15500 in 2016 and as on sections of Income-Tax Act 1961, has been December 2017 and this has further increased to 19684 provided. Further, all related Income-Tax Rules currently. The RSA tokens are supplied and supported 1962, FAQs, Tax Services, Income-Tax forms are by TCS and distributed by the FMS team through available on that page itself. respective CIT (Admin & TPS) concerned. The FMS team also facilitates the video conferences organized for viii. Services centric information Page for various various field offices across the country. services such as PAN / TAN, Return Filing, Tax Payment, Tax calendar, Tax Chart & Tables, Tax 2.8.5 Project Name: ITBA utilities, Tax Help lines and more have been provided. It has been a constant endeavor of the CBDT to reduce human interface in assessment and appellate ix. The website is friendly for differently abled proceedings through use of Information Technology. The persons and can be accessed easily by visually steps taken by the CBDT towards making assessment challenged users, users with partial or poor sight and appellate proceedings electronically with minimum including color-blind users and deaf users. It is human-interface are summarized as below: bilingual and Rajbhasha compliant. x. Separate corner for Senior Citizens. i. Faceless Assessment Scheme, 2019 xi. Latest News & Press Release are updated on real time basis. The Scheme ensures that all communication with the taxpayer or any other person for the purpose of making xii. Other facilities assessment under the Scheme, as well as internal a. Income Tax Office Locator (covers details of all communication among the functional units, shall be Income-tax Offices across India) through the National e-Assessment Centre (NeAC) and b. Separate pages of Pr. CCIT / DGIT- Includes shall be made exclusively in electronic mode. The field information about field offices, Grievance formations were provided with templates and assistance Redressal Mechanism, respective CPIOs, at every level to help them in smooth transition from the Appellate Authorities under RTI Act. old system into the new regime. The detailed scheme is outlined in the ITA section. c. Tenders from Department. During the FY 2019-20, the portal experienced ii. Faceless Appeal Scheme, 2020: total number of 231,21,95,134 hits and had 85,46,952 total number of visitors. This shows The scheme aims at conducting appeal proceedings in a that the website is being very widely used by the Faceless manner in electronic mode, with no human taxpayers and members of public and the website interface. Notices would be issued electronically by a has gained sufficient visibility. Central cell. A central Cell i.e. the National Faceless Appeal Centre (NFAC) would be single point of contact 2.8.4.5 Video Conferencing – between the appellant, the assessing officer or any other Video Conference (VC) facility is available across person and the Department. The NFAC is based at Delhi 48 stations (57 sites), which is assigned to the and 4 Regional Faceless Appeal Centers (RFACs) with Telecommunications Consultants India Limited (TCIL) 293 Appeal Units have been created across the country. 135Annual Report 2020-2021 2.8.6 Project Name: CPC, Bengaluru  CPC has processed 38.24 crore E-Returns till 31st Oct 2020, as against the target of 2.7 crore Performance and achievements of the Centralised e-filled returns, that CPC was to process in 5 Processing Centre: years. Centralized Processing Centre for Income Tax Returns Increased adoption of EVC: Electronic Verification Code is the processing unit of the Income Tax Department for (EVC) process has been implemented in April 2015 processing and accounting of all Income Tax Returns filed through E-filing. 69% of taxpayers now use EVC for electronically. verification of the return of income electronically filed on the e-filing portal. CPC has already processed 3.84 crore  CPC has processed 7.08 crore returns of income returns validated through EVC for AY 2019-20 as on 31st during Financial Year 2019-20. Further till 31st October 2020. Oct 2020, CPC has processed 89 lakh returns Faster Processing of ITRs: Average processing time is in Financial Year 2020-21. reduced to 87 days for AY 2019-20, which is less than the period specified in citizen’s charter (6 months) and  CPC has achieved a peak processing capacity much less than performance in manual processing. of 12.30 lakhs returns per day. Achievements Achievements Achievements during 01-04-2018 during 01-04-2019 during 01-04-2020 Activity to 31-03-2019 to 31-03-2020 to 31/10/2020 (In Lakhs) (In Lakhs) (In Lakhs) Processing of returns 711 708 89 Rectifications 6.03 11.61 3.61 Calls handling 9.46 9.28 1.88 Email-Communications 2336 2064 424 SMS Communications 2153 1766 563 Savings by use of email: Till 27.11.2020, CPC has sent around 124.92 Crore digitally signed PDF based intimations by email, around 116.03 Crore SMS alerts and around 5.58 Crore intimations sent by Speed Post all over the country. Savings due to e-delivery as compared to postage is ` 1,873 crore. Communications via email sent to Postage cost saved (` Financial Year taxpayers Crores)# FY 2010-11 59,27,080 8.89 FY 2011-12 3,67,69,270 55.15 FY 2012-13 4,29,43,613 64.42 FY 2013-14 6,56,30,267 98.45 FY 2014-15 9,39,41,486 140.91 FY 2015-16 23,23,66,069 348.55 FY 2016-17 11,82,45,615 177.37 FY 2017-18 17,09,14,052 256.37 FY 2018-19 23,36,33,529 350.45 FY 2019-20 20,64,71,561 309.7 FY 2020-21 4,24,19,900 63.62 Total savings in 11 FY's 1,873.88 # Average cost of speed-post/ordinary post taken as `15/-  To enable handling of large volume and managing size of the e-mails and improving aesthetics of intimations and campaigns, email through HTML template has been enabled and used. 136Department of Revenue III Customer Service: 90 call center agents attend to over to rs.13,62,473.59 Crores have been received from 5,000 calls daily in 3 languages. Around 9.28 lakh calls Taxpayers through efiling website. attended till 31st March 2020. For FY 2020-21, 1,88,555 Services to AO via ITBA: CPC has enabled completion calls have been attended till Oct 2020. IVRS services of Scrutiny Assessments through the ITBA system. were enabled for providing updates to taxpayers as to 2,60,170 lakh orders were processed during FY 2019- the status of processing and refunds from April 2020 till 20. For FY 2020-21, 15,865 orders were processed as June 2020 as the lockdown was in force. on 31st October 2020. Outbound calls: CPC call center made 8,70,528 Physical Returns Processing: CPC has enabled outbound calls to Assessing Officers in connection with processing of Physical ITR (paper) that are digitized in Demand Management till 31st October 2020. The Officers the field formation across the country. In FY 2019-20, at CPC conducted additional drive by making outbound 4.93 lakh digitized physical returns received through ITBA calls to Assessing Officers to impress upon the filed have been processed at CPC. formations to complete the activities pending with the field formations. Auto Dialer and outbound calls as reminder Storage of Documents: CPC has stored over 28,21 for outstanding demands discontinued from April 2020 Crore ITR V physical documents through a Record due to COVID. Management Service and has been awarded ISO 15489 certification, the first entity in Asia to achieve this. Grievance Redressal: CPC has enabled Web based Webinars for tax consultants and tax payers: Taxpayer Grievance Mechanism in the FY 2016-17. Under this system, the taxpayers can login to the e-filing CPC conducted six webinars for tax payers and tax web portal of the department and submit their grievances consultants across the country to create awareness on online. The resolution of the grievances and other the ITR filing and processing of returns and to clarify the assistance is provided through registered e-mails of the queries during August / September 2020. A handbook taxpayers. Status of redressed of the grievance is also containing answers to frequently asked questions has updated on the e-filing web portal. Up to 31st March 2020, been prepared and circulated widely. 28.65 lakh grievances have been received out of which 25.54 (90%) lakh grievances have been addressed. E- Nivaran Centralized Grievance System has been 2.9 Vigilance integrated with Online Grievance Portal from 19th August 2016. For FY 2020-21, out of 2.79 lakh grievances 2.9.1 FUNCTIONS/WORKING OF ORGANIZATION received, 2.32 lakh have been redressed till 31st October 2020. The Vigilance set-up of the Income Tax Department is headed by the Director General of Income Rectification: Rectification requests received from Tax (Vigilance), who is also the Chief Vigilance Officer taxpayers processed within statutory time limits. Overall, (CVO) of the Organization. CVO is responsible for taking till FY 2019-20 CPC has processed 58.12 Lakh requests the initial decision on complaints against Group-A officers. processed out of 61.19 Lakh requests filed. For FY 2020- CVO is also required to maintain an up to date record of 21, 3.49 lakh rectifications are disposed till 31st October such complaints and their latest status, through the 2020. Due to the higher accuracy level of processing at prescribed registers, for submission of reports to the CVC, CPC, there has been a sharp drop in overall rectification DOP&T etc. All the complaints against Group-A officers requests. are, therefore, required to be forwarded to the CVO for Refund Reissue: Refund reissue requests due to refund registration in the CVO’s register as well as for further failures at bank, incorrect bank account number, etc. necessary action. involving amount of ` 23,320.01cr. for FY 2019-20 were processed. All such requests are processed within 7 days CVO is required to examine and comment on all of request accepted by CPC. proposals where a reference to the CVC is required to be made. Apart from the officers posted in the CVO’s Demand Management: To deal with the issue of updating headquarters, who assist in initial processing of of arrear demands, the outstanding demand position in complaints and post disciplinary proceeding cases of CPC FAS (Financial Accounting System) was made Group-A officers, four regional Directorates of Income available to field AOs through the AO Portal and to Tax (Vigilance) assist the CVO in conduct of preliminary taxpayers through ‘My Account’ on e-filing website. As verifications or investigations. CVO makes all vigilance on 31st October 2020, AO has acted on 39,91,793 entries related references to CBDT, CVC, DOPT, UPSC etc. All involving arrear demand of ` 7,90,966.28 Crore. CPC has such references are sent to the CVO through the also facilitated Taxpayers to revert on the demand position concerned Zonal ADG(Vig.). by agreeing/disagreeing to the demand through E filing website. Responses received in 74,59,771 entries totalling Head office attends to all matters concerning 137Annual Report 2020-2021 disciplinary proceedings against all serving Group ‘A’ (Vigilance) assist the CVO in the handling of vigilance officers and all retired Group ‘A’ to Group ‘C’ officers/ matters pertaining to their respective regional officials. Thus, Pr. DGIT(V)/CVO, CBDT, Delhi assists jurisdictions. These Directorates process complaints the Disciplinary Authority (DA) i.e. the Finance Minister against Group ‘B’ officers and also conduct preliminary on all vigilance matters in consultation with CVC, UPSC verifications and investigations in respect of both Group and DoP&T. - A and Group - B officers. Four Zonal Directorates of Income Tax 2.9.2 Work allocation: Zonal offices are headed by officers of the rank investigation etc. assigned to them by Pr.DGIT(V)/CVO, of Commissioners who work under the control and CBDT from time to time. supervision of Pr.DGIT(V)/CVO, CBDT. Besides this, they assist Pr.DGIT(V)/CVO, CBDT in respect of all enquiries/ 2.9.3 PERFORMANCE AND ACHIEVEMENTS DURING CURRENT YEAR APRIL – NOVEMBER, 2020 Performance and achievements during current year April – November, 2020 S. No. ITEMS OF WORK (DISPOSAL) Achievements CORE AREAS OF ACTION 1 Disciplinary proceedings concluded 40 1 a). Penalties Imposed 22 1 b). Out of above J.S. and above Rank 03 2 Dept. Inquiry disposed 149 3 Sanction for prosecution approved/granted 06 4 Vigilance clearance issued 7785 138Department of Revenue III 2.9.4 SIGNIFICANT DEVELOPMENTS /  Setting up of Centralized Processing Center at POLICYDECISIONS Bengaluru To expedite the disposal of disciplinary  Setting up of Centralized Processing Cell (TDS) proceedings cases, CVC and the DoPT have issued at Vaishali instructions from time to time, laying down guidelines for  E-filing of returns, expeditious disposal of the disciplinary proceeding cases and emphasized that long delays in finalizing disciplinary  Refund Banker Scheme to improve channel matters are not only unjust to officials who may be finally delivery of refunds; exonerated, but help the guilty to evade punitive action.  Sevottam Scheme for monitoring of dak and Further, it has been instructed that the Inquiry Officers grievances; should scrupulously abide by the CVC and DoPT instructions on the subject and conduct hearings in  Dedicated Call Centre Departmental Inquires on a day-to-day basis, and conclude the inquiry within the stipulated timeline of six  Comprehensive Website that consolidated all e- months without fail. services etc. Further, post-restructuring, all the officers are 2.9.5.2 Sensitive posts and rotation transfers able to contribute more constructively in the disposals of pending DP matters. All efforts to bring down the The Transfer Policy of the CBDT lays down the pendency have been made. guidelines for transfer & posting of IRS officers. As per the policy, the officers posted in sensitive posts are Systems Improvement transferred out on a regular basis. Systems studies are carried out regularly by the Vigilance Directorate. Based upon the findings of the 2.9.5.3 Scrutiny of APARs study, feedback and suggestions are given to the concerned wing of the Department. During the last year, The CBDT is the custodian of the APArs. Any a systems study was carried out by the Vigilance adverse remarks in APAR about integrity of any officer Directorate with regard to verification of the seized are communicated to the DGIT (Vigilance) for valuable items during raids by the I.T. Department. investigation and further necessary action. Verification of seized valuables in the lockers and strong rooms maintained by the various investigation 2.9.5.4 Training and awareness campaigns directorates of all zones was carried out. During the conducted and proposed inspections carried out by the investigation directorates, no major discrepancies have been found. In respect of Training courses are organized regularly for the some deficiencies noted, the rectifying measures are field officers for updating their skills and knowledge about suggested. the Vigilance matters. The officers of the Vigilance Directorate visit NADT, Nagpur and field offices for 2.9.5 Significant developments/policy decisions imparting training. Training courses are organized taken during the year for the development of a regularly for the field officers for updating their skills and particular sector, including initiatives for improving knowledge about the Vigilance matters. The officers of delivery of public services and for ensuring inclusive the Vigilance Directorate visit NADT, Nagpur and field growth: offices for imparting training. 2.9.5.1 Extent of IT usage Presently, this office has started a new campaign/ initiative to boost the momentum of the officers by Income Tax Department has undertaken following reform choosing employee of the month and awarding him a initiatives in last few years by harnessing latest technology token/ memento. to enable a System driven working environment in the Department. These measures are aimed to introduce objectivity and reduce human interface between the 2.9.6 Mechanism put in place to measure taxpayer and the officials. The following initiatives have development outcomes of major schemes/ been taken: programmers implemented through the department/Division. Setting up of Tax Information Network; 2.9.6.1 Probity  Taxnet project for networking of all its offices across the country; Steps to ensure probity in Government Servants: 139Annual Report 2020-2021 In order to ensure probity in income Tax Department iv) Offices of Pr. CCIT (CCA) have been asked to following steps have been taken. conduct review under FR 56(j) for grade B&C employees with due seriousness. i) (Review of Officers under FR 56(j) is now being done for all Officers in the age group of 50 to 60 v) This exercise of review under Rule 56-(j) is being years of age. done regularly on quarterly basis for all employees (Group- ‘A’, ‘B’& ’C’). ii) In review meetings of FR56(j) not only IPR, APAR but also Secret note in integrity column, 2.10 PDGIT (Administration & Tax Payers doubtful reputation etc. are made the basis of Services) examination. The Organization chart of the Principal Directorate iii) Separate efforts are being made to bring General (Administration & Taxpayer Services) is as comprehensive data updating on absconding/ under: resigned/ expired Officers. Highlights of the performance and achievements which provides extensive information about tax under key programmes being implemented by Pr. related queries/services. DGIT (Admn & TPS) during the year: d) Implementation and Monitoring of the Tax Return Preparer Scheme, in accordance with the A. Directorate of Income-tax (TPS-I, TDS & provision of section 139B of the Income Tax Act, BIFR): 1961 which codifies the function, code of conduct & duties and obligations of the TRP’s. i. Functions/Working of the Directorate of (TPS-I, TDS & BIFR): e) Review of Citizen’s Charter Monitoring of taxpayer services in all Aayakar f) Work related to TDS and BIFR Administration Sewa Kendras (ASKs) located across different Income ii. Performance and Achievements of Tax Offices across India. Directorate of (TPS-I; TDS & BIFR): a) In order to maintain sustained standards of The achievements of the Directorate of (TPS-I; TDS & Taxpayer Service Delivery and skilled personnel BIFR) with respect to the key/flagship programmes are engaged in imparting Taxpayer services in ASKs, as under: this Directorate regularly undertakes training of (a) Monitoring and Certification of ASK Centres: ASK Personnel and coordinates with Bureau of Indian Standards for accreditation (Certification The Directorate monitors the working of ASK centers and of ASKs in terms of Standards of Public Service coordinates their accreditation from Bureau of Indian Delivery). Standards. Presently, there are more than 400 ASK centres in the country out of which 190 have already been b) Monitoring of online grievance redressal system certified by BIS. It may be worthwhile to mention that the (e-Nivaran) and registering the feedbacks from certification is not a onetime process and needs to be re- the taxpayers/citizens whose grievances have evaluated and re-certified after every three years. The been resolved. process of re-certification is also under final stages. In c) Maintenance of TPS module/Mobile App addition to this, process has already been initiated to get “Aaykarsetu” on the lines of Digital India initiative, 25 more ASKs certified during this financial year. It may 140Department of Revenue III therefore be seen, that the performance of ASKs has ITR. Various tax tools are available, which will been monitored and maintained through the years, and give the output required for ITR on the basis of through sustained efforts, every second ASK is now inputs/information available with user. certified to have achieved the laid down standards of (v) PAN/TAN – All the services related to PAN/TAN public service delivery. i.e. PAN/TAN application, De-duplication, PAN The Directorate also envisages training programme for surrender, PAN-Aadhar Linking are available capacity building of the personnel posted in ASKs. The through the portal training programmes are being conducted in co-ordination (vi)TDS/TRACES – It provides links to all the with NADT, regional DTRTIs and all Pr. CCsIT Regions. services useful for a tax deductor/collector, tax The Directorate has achieved this RFD target for the deductee in one place along with proper Financial Year 2020-21 by the end of the 3rd quarter itself. bifurcation of services between Tax Deductor/ Deductee etc. (b) Online grievance redressal system e-Nivaran: (vii) Payment of Taxes – It provides ease of use of ‘e-Nivaran’ is an electronic grievance redressal system all the services related to tax payment including integrated with the ITBA application which is, the tax calculation, View tax credit statement etc. Department’s internal online working platform. The paper grievances received through ASK centers are also (viii) Latest Updates on website and email/SMS – digitized and integrated with e-Nivaran module. It will help the taxpayers in finding out the information required as per upcoming In addition to the above, grievances received manually compliance dates on the main window of the Tax or through e-mail in the offices of the Hon’ble Prime Payer Services. Minister/ Finance Minister/Minister of State (Finance)/ (ix)Tax Gyaan –Tax Gyaan is a multiple-choice Chairman/Members are also forwarded by CBDT to this question web-based game to provide knowledge Directorate. These grievances are also uploaded on e- to the youths accessible from mobile as well as Nivaran according to PAN jurisdiction. This Directorate desktop. is engaged in regular monitoring of the pendency and redressal of e-Nivaran grievances all over the country. (d) Functions pertaining to TDS: In order to record satisfaction data, this Directorate has The Directorate is monitoring TDS collection, also implemented a system of registering the feedback TDS Arrear and current demand collection, TDS related from the taxpayers/citizens whose grievances have been grievances/complaints, consolidation of data regarding resolved. prosecution and compounding, TDS surveys/spot verifications and outreach programmes and other TDS (c) Launch of TPS module/Mobile App related functions. The Directorate also organizes All India “AaykarSetu” on the lines Digital India initiative: TDS Conference every year to determine and evolve strategies to make TDS system more effective, and This Directorate has launched an e-platform for accessing explore new areas which may be brought under the ambit the key tax payer services provided by the Department of TDS/TCS. to the general public/taxpayers. The Tax Payer Services Module/Mobile App provides extensive information about iii. Significant initiatives taken during the year tax related queries & services. Its main highlights are: so far: (i) ASK IT – It functions as a CHATBOT (A virtual Achievement of RFD Targets: The Directorate is under machine chatting with the user) which provides process to achieve the stipulated RFD targets of audit of solution to queries of taxpayers relating to PAN, the ASK Centers and training of the officers/officials of TAN, TDS, Return Filing, Refund Status, Tax the ASK Centers. Out of the RFD target of getting 25 Payment etc. on real time basis. ASK Centers audited, BIS audit of 22 ASK Centers has already been started. Further, out of the RFD target of (ii) Live Chat with Tax Experts – In case users have getting 100 officers/officials of ASK Centers trained, any query they can use the chat option at TPS training by different DTRTI’s have already started and section. This facility is available on all working target is expected to be achieved by the end of the 3rd days. quarter of FY 2020-21. (iii)Tax Return Preparers at your doorstep – It B. DIRECTORATE OF INCOME-TAX (TPS-II): helps to locate the TRP on Google map. A Tax Payer can locate/search the TRP at the desktop i. Functions/Working of the office of the as well as on his mobile App. Directorate of (TPS-II) (iv)Tax Tools – It facilitates tax calculations for filing The Directorate of Tax Payer Service – II has 141Annual Report 2020-2021 been assigned with the duties of monitoring of disposal ii. Performance and Achievements of of public grievances of CPGRAMS. All grievances are Directorate of (TPS-II) downloaded from the website pgportal.gov.in and after In this financial year, the Directorate continues examination, action taken by the offices subordinate to do exemplary work by speedy disposal of public to CBDT are monitored by the Directorate to ensure grievances. Despite the Covid - 19 pandemic, the timely resolution of the grievances. Information about Directorate has managed to keep the disposal percentage redressal action taken in such cases, is uploaded on the at 85% when compared to 90% last year. Due to constant website by the subordinate offices. The Directorate follow up on CPGRAMS, this Directorate is able to get constantly monitors the resolution of the grievances the grievances disposed expeditiously. throughout the country. The actual data with respect to Grievance Disposal from 01.04.2020 to 31.12.2020 in respect of this directorate is as under: Grievances As on 01.04.2020 Disposal upto Percentage of Average time taken for including 4778 Brought Forward 31.12.2020 Disposal disposal of each Grievances grievance 28953 24662 85.17% 70 days C. DIRECTORATE OF INCOME-TAX (PR, P&P): Relations, Printing and Publications and Implementation The Directorate of Income-tax (Public Relations, Printing of Policy in the Income-tax Department all over India. & Publications) is responsible for the Publicity and Public The organization chart of the various wings of this Directorate is as under: ADG (PR, P&P), CBDT Administration Publicity Wing Public Relation Printing & Wing Wing Publication Wing i. Functions/Working of the office of the Officers. Directorate of (PR, P&P) f) Design, publishing and distribution of New Year a) To carry out the advertisement campaign for the Calendar and table Calendar of Income Tax Income Tax Department in print, electronic Department. media, internet, social media and outdoor publicity for bringing awareness amongst g) Publishing of Tax Payer Information Series in the taxpayers about income tax provisions and form of booklets, brochures/pamphlets pertaining statutory timelines. to various income & other direct taxes related issues. b) Set up and operate Tax Payer Lounge at the Indian International Trade Fair, Pragati Maidan, ii. Performance and Achievements of New Delhi and also in other fair/exhibitions in Directorate of (PR, P&P) India. a. The Publicity Wing of this Directorate is c) Running the Mobile App ‘Aaykar Kutumb‘ (the engaged in the following functions: digital version of AHB).  To carry out advertisement campaigns for the d) Bring out publications for internal use of Income Income Tax Department in print, electronic Tax Department. media, internet, social media (Facebook, Instagram, YouTube) for bringing awareness e) Updation, publishing and distribution of amongst taxpayers about Income Tax provisions Administrative Hand Book containing information and statutory timelines. in respect of the CBDT and the Income Tax Department, and contact details of Senior  To strategize, propose and carry out outreach 142Department of Revenue III campaigns in order to disseminate information b. The budget expenses involved in organising about the new initiatives of the Department. various campaigns of this wing are tabulated below. This is based on the Actual Data till 30thNovember, 2020: Campaign Actual Cost (` In crore) (Approx.) Outstanding Carried out till 31.03.2020- On commitment basis for various 6.25 cr. Income Tax provisions and statutory timelines as per I.T. Act, 1961 which involves campaign through Prasar Bharati, BOC (earlier DAVP), and agencies. Campaign for Print ad- Print Campaign has been carried out for various IT Nil provisions and statutory timelines as per Income Tax Act, 1961 through BOC (earlier DAVP) only. Campaign for AV ad-AV Campaign has been carried out for various IT ` 5.48 Cr. provisions and statutory timelines as per Income Tax Act, 1961 through BOC (earlier DAVP) and Prasar Bharti. Awareness Campaign through other medium-Bills expenditure for various IT ` 0.66 Cr. provisions and statutory timelines as per I.T. Act, 1961 which includes Setting up of Taxpayer Pavilion by the Department, Film on Income Tax Day and creative for TV and Radio, SMS campaign and social media. c. The budgetary Projections and Estimates till 31st March, 2021 with respect to various campaigns carried out by this wing is as under: As per proposed Annual Action Plan for F.Y. 19-20, following campaigns are scheduled to be executed: Campaign Actual Cost (` In crore) (Approximately) Forthcoming Print ad- 2.00 cr. Print Campaign scheduled to be carried out for various IT provisions and statutory timelines as per Income Tax Act, 1961. Forthcoming AV Campaign- 48.50 cr. AV Campaign is scheduled to be carried out for various IT provisions and statutory timelines as per Income Tax Act, 1961 through BOC (earlier) DAVP, NFDC and PrasarBharati etc. Forthcoming Awareness Campaign through other medium. 3.45 cr. The awareness campaign includes campaign on Taxpayer education/awareness, Advance Tax Due Date-15th March, 2020 through SMS, Advance Tax and Return Filing without levy of penalty Due Date-31st March, 2019 through SMS, setting up of Taxpayers Zones in small cities, participation in Trade Fair/Events, campaign through social media iii. PR Wing of this Directorate is engaged in the following functions: Public Relation Wing of this Directorate is primarily engaged in publishing of TPI brochures/Booklets/Administrative Handbook/Wall Calendar and Table Calendar. The calendars for 2020-21 would not be printed as per the guidelines of the Secretary (Co-ordination) Cabinet Secretary dated 14.02.2020. The Administrative handbook for 2020-21 will be published in e-pub 3.25 (digital) format. This year till 30.11.2020, this office has made the following expenses: S.No Description No Expenses till Expected expenses upto Nov. 2020 31.03.2021 1 Maintenance of Virtual Reality 1 ` 92,165/- - Game 2 Translation of voice-overs of 11 - Approx. cost 9.5 Lakhs Virtual Reality Game 3 Printing of TPI Series brochures 35 - 10 Lakhs Approx. approx. 4 Publishing of Administrative 1 - Approx. cost 9 Lakhs Handbook 2021 5 Brochures distributed in July 2020 13 Approx. cost 2 Lakhs 143Annual Report 2020-2021 D. Directorate of Income-tax (Organization & (d) Carrying out Management and Process studies. Management Services): (e) Nodal office for preparation of Results i. Functions of Directorate of Income Tax Framework Document (RFD) (O&MS): ii. Performance and Achievements of (a) To act as an internal management consultant to Directorate of (O&MS) CBDT. Setting up of Aayakar Sewa Kendra: (b) Setting up of Aayakar Sewa Kendras across Income Tax Offices in the country. Aayakar Sewa Kendra (ASK) is the single window system for implementation of Citizen’s Charter of the (c) Compilation of CAP-I & CAP-II Reports on Pan Income Tax Department and a mechanism for achieving India basis. excellence in public service delivery. Details of setting up are as under: From 01.04.2020 to 31.03.2021 Projection/Estimate from 01.04.2020 to 31.03.2021 44 ASKs were proposed to be set up during FY 2019-20. 44 ASKs are to be setup by 31-03-2021 Owing to the pandemic, the execution is being taken up in this F.Y. 2020-21 In All 430 AayakarSewaKendras have been set up across all buildings of the Income Tax Department upto 31-03-2019. iii. Significant initiatives taken during the year the concerned section of the Department for redressal. for development of public service delivery and for ensuring “inclusive growth”. E. Directorate of Income Tax (Infrastructure):  Creation of a Centralized e-mail ID: i. Functions performed by Directorate of Infrastructure This Directorate took an important step in the This Directorate is responsible for processing direction for improvement in the operational functioning and examination of Infrastructure Proposals received of the Income Tax Department. In order to have constant from the field formations. Proposals pertaining to a wide inflow of suggestions and feedback in respect of day-to- variety of subjects such as purchase of land, ready day problems that are being faced by various stake build office & residential accommodation, construction holders with regard to the functioning of the Department, of office(s) & residential buildings, Hiring/Rent revision a dedicated official e-mail ID i.e. of Office space, repairs & renovation works etc. are vision.doms@incometax.gov.in has been allotted to this dealt with in this Directorate. Directorate. This e-mail ID is now functioning and is The field formations are also appraised / providing a smooth & easy platform to officers & staff at guided of various Circulars, OMs, Government of India work place to put forward their grievances as well as guidelines, Rules & Regulations etc. in order to make solutions to problems faced by them. With the feedback, appropriate proposals which can be forwarded for the suggestions and problems of stakeholders which are consideration of Competent Authorities. coming through this e-mail, Department is getting better Many policy related matters viz. Operational composite picture of its functioning. It is also providing Vehicles, Installations of LEDs, Solar power, an opportunity for smooth and efficient networking for ‘Swachhata Action Plan’ and infrastructure proposals solutions to the issues raised through it. Main aim of this under 1% incentive scheme with RFD related target e-mail ID i.e vision.doms@incometax.gov.in, is to areas are also handled by the Directorate. achieve, greater employee satisfaction and consequently ii. Achievements of Directorate of better delivery of services. Information in this regard has Infrastructure already been uploaded on IRS Officers online portal to During the year 2020-21(upto November, make the field officers and staff aware of this facility. This 2020), this directorate has effectively processed the mail is receiving letters from several Group-‘A’ & ‘B’ sanction for the following important projects of the officers as well as Group-‘C’ officials. Issues raised Income Tax Department: through this e-mail are being promptly communicated to  Purchase of ready built building at Raipur for 144Department of Revenue III total consideration of ` 30.26 crores. utilization of funds under the Revenue heads upto 31.03.2020 to the tune of rs.6955.38 Crores which is  Acquiring lease hold rights of LIC Building at 98.72% of the allocated funds. The total utilization of Vasundhara, Ghaziabad meant for e-assessment funds under the Capital heads was rs.227.34 Crores and CPC 2.0 Project for an amount of ` 34.75 which was 96.75% of the allocated funds. Total crores. utilization of funds – both Revenue and Capital funds during the Financial Year 2019-20 upto 31.03.2020 (as  Acquisition of land measuring 5.02 acre for per figures available from the Pr. Chief Controller of construction of Income Tax Office and Staff Accounts) was rs.7182.72 Crores out of allocated funds Quarters at Guntur, Andhra Pradesh for an of rs.7275.64 Crores which works out to 96.75%. amount of ` 20.89 crores. (i) During F.Y. 2020-21 the total provision for the  Renewal/revision of lease agreement for some Income Tax Department under the Revenue head has floors of AIR India Building Nariman Point, been made at rs.7733.39 Crores whereas under the Mumbai for the period upto May’2021 involving Capital Head is rs.332 Crore. Most of the funds have sum of ` 134.15 crs. been allocated to various Budgetary Controlling Authorities [BCAs] as per their requirement.  Renewal of lease deed/agreement of hired office space and service block with free 284 parking G. Directorate of Income-tax (Research & slots in C-Block, Civic Centre Minto Road, New Statistical Wing): Delhi for further period of three years for an amount of ` 319.76 crores. i. Functions performed by the Directorate  Making payment to BSNL and MTNL for telecom The Directorate of R & S is responsible for collection, services taken by the Income tax department compilation and dissemination of statistics on various under the project “Tarang”. aspects of Direct Taxes. Statistics are being collected from the field establishments i.e. from the offices of Chief  Procurement of 10342 laptops for the officers of Commissioners of Income Tax. Based on the statistics the Department, through GeM involving total collected from the field establishments, this directorate consideration of 67.00 Crores. prepares various periodical reports, which are used by the Central Board of Direct Taxes for monitoring and F. Directorate of Income Tax (Expenditure evaluation of existing policies and for formulation of new Budget): policies. The Directorate of Expenditure Budget is mandated to ii. Achievements of the Directorate of Income act as Nodal Authority in respect of all Budget and Tax (Research & Statistical Wing). Expenditure Matters for Grant No. 32- Direct Taxes for the Central Board of Direct Taxes. The Directorate of During the year, so far, this Directorate has prepared the Expenditure Budget monitored and ensured total following Statistical Reports. The details of the same are tabulated as under: S. Name of Report Source of Data Periodicity Due Date of receipt No. 1. Monthly Report/MTR on ITBA (Presently 349 Monthly Workload, Disposal, Disposal of Appeals CIT(A)) Progressive Commissioners of Income Disposal, Pendency Tax (Appeals) and Disputed Amount of Appeals with CIT(A) 2. Quarterly Progress Report Field Formations Quarterly End of Following (QPR) on Tax Recovery (91 CCITs/DGITs) Quarter Officer’s Work 3. Quarterly Progress Report Field Formations Quarterly End of Following (QPR) on Aggregation of (92 CCITs/DGITs) Quarter Agricultural Income with Non Agricultural Income 145Annual Report 2020-2021 S. Name of Report Source of Data Periodicity Due Date of receipt No. 4. Quarterly Progress Report @Field Formation (97 Quarterly End of Following (QPR) on Appeals/writs & CCITs /DGITs) Quarter Other Matters before @collect also from ITAT ITAT/High Courts/Supreme Registry, Mumbai and Court O/o DG (L&R) 5. Quarterly Progress Report Field Formations Quarterly End of Following (QPR) on Write-off of (92 CCITs/DGITs) Quarter Arrear Demand of ` 10,000/- and below 6. Progress Report (QPR) on • DG Systems Quarterly October of following Income Tax, Corporation • DOMS year Tax & Other Taxes • Field (Annually) Formations (92 CCITs/DGITs) 7. Report on Direct Taxes for ITBA/Field Annually October of following C&AG’s report (Annual) Formation/ITAT, year Mumbai Registry/O/o DG(L&R) iii. Mechanism put in place to measure twitter handle @IncomeTaxIndia is being managed by development outcomes of majors schemes/ the Media Centre. A Social Media policy was put in place programmes. and publicity campaigns through social media platforms are being undertaken since 2015. In the first phase, the In order to equip the department with a tool to presence on Twitter was restricted to dissemination of measure the progress regarding various development information of public value relating to Direct Taxes. From schemes, the Results Framework Document (RFD) is FY 2019-20, however, in addition to the activity of drafted every year. The RFD is an agreement between dissemination of information and awareness campaigns, Chairman, CBDT and the Responsibility Centres (which the twitter handle started engaging directly with the tax- are attached Directorates of CBDT) vide which a set of payers resulting in expeditious resolution of grievances. targets are resolved to be achieved within a matrix of The CBDT has instituted an Online Response and measurable success indicators. The RFD for the year Reputation Management System. As part of such 2020-21 was submitted in March, 2020. response management, the Department has been iv. Initiatives taken with reference to responding to the actionable tweets from taxpayers/ Development of North Eastern Region and Sikkim professionals since July, 2019. Thus, currently, the Twitter including projects/schemes in operation and actual handle is being used not only for dissemination & expenditure thereon. promotion of the content of the ITD to twitter users but 2 ASKs are being setup in the current financial year at also for response management and Online Reputation Kalimpong and Gangtok. A budget of ` 14.96 lacs has Management. The Twitter account of the Department has been sanctioned for setting up these 2 ASKs. more than 7,69,000 followers at present. 2.11 MEDIA CENTRE (M&TP) For amplifying the Department’s presence & The Media Centre disseminates information of messaging on Twitter, twitter handles have also been public value relating to Direct Taxes through the Print and created by the regional offices of the Department at the Electronic Media. The Commissioner of Income Tax level of the respective Principal Chief Commissioners of (Media and Technical Policy) [CIT(M&TP)], CBDT is in- Income Tax. The 18 regional twitter handles operate in charge of the Media Centre, set up in the CBDT in August accordance with a detailed SOP to ensure adherence to 2006. During the year, various press releases were issued the Government’s Social Media Policy and are used for to bring important decisions, developments and issues outreach programmes at the local levels, thereby ensuring related to Direct Tax to the public notice and to highlight the dissemination of information and awareness different achievements of the CBDT and Income Tax campaigns to the last mile in the communication chain. Department. Apart from the above, the CIT(M&TP) and its Apart from the conventional means of office act as a coordinator between the field offices of communication, the Department also utilizes social media CBDT and the CBDT, as also other Divisions of CBDT platforms to disseminate information to the public and and other Ministries in so far as issues pertaining to media also engage with it, especially through Twitter. The CBDT are concerned. 146Department of Revenue III 3. Central Board of Indirect Taxes & Customs 3.2.4 In order to continue this improvement, many (CBIC) more reforms have been taken by the Government in the past one year. These reforms 3.1 The Central Board of Indirect Taxes and Customs are detailed below: or CBIC (erstwhile Central Board of Excise & Customs) is a part of the Department of Revenue under the Ministry i. Registration process under GST has been of Finance, Government of India. It deals with the tasks simplified by linking Aadhaar with registration. of formulation of policy concerning levy and collection of Aadhaar authentication for certain category of Customs, Central Excise duties, Central Goods & new applicants have been made mandatory from 21.08.2020. Services Tax (CGST) and Inter-State Goods & Services Tax (IGST), prevention of smuggling and administration ii. Due date for FORM GSTR-3B from the month of matters relating to Customs, Central Excise, CGST, of January, 2020 onwards has been staggered IGST and Narcotics to the extent under CBIC's purview. for different taxpayers. For taxpayers with annual The Board is the administrative authority for its turnover of Rs. 5 crores, the due date would be subordinate organizations, including Custom Houses, 20th of the next month whereas for others it would CGST Commissionerates and the Central Revenues be 22nd or 24th of next month depending upon Control Laboratory. The motto of CBIC is "DeshSevarth the State of registration of taxpayers. Kar Sanchay". iii. In order to alleviate the burden of late fees on 3.2 GOODS & SERVICES TAX (GST) the taxpayers and to help them in filing their pending returns due over a long period of time, 3.2.1 The Constitution was amended vide the 101st waiver in late fees has been granted for furnishing Amendment Act, 2016, to provide concurrent powers to of FORM GSTR-1 for the months from July, 2017 both Centre & States to levy GST on goods and services to November, 2019 to the taxpayers, if the same both. Subsequent upon the amendment, the GST Council was furnished between 18.12.2019 to comprising of the Union Finance Minister, MoS, Finance 17.01.2020. Further, late fee for FORM GSTR- and Finance Ministers of all States, is empowered with 3B for the tax period from July, 2017 to January, making all policy decisions on GST. More than 17 taxes 2020 has been capped at Rs. 500 for taxable and 13 cesses. have been subsumed in GST making returns and waived for NIL returns, if the same India - "One Nation One Tax". The taxes subsumed in is filed between 01.07.2020 to 30.09.2020. GST include erstwhile Central Excise duty (except on 5 petroleum products & tobacco/ tobacco products) and iv. In a significant move towards taxpayer facilitation, Service Tax. filing of NIL GST monthly return in FORM GSTR- 3B through SMS has been enabled w.e.f. 3.2.2 GST has now completed three years replacing 08.06.2020 which would substantially improve the complex indirect tax structure with a simple, ease of GST compliance for over 22 lakh transparent and technology-driven tax regime and thus registered taxpayers and also result in integrated India into a single common market. The decongestion of the return filing portal. Similar continuous simplification of procedures and rationalization SMS facility for filing NIL FORM GSTR-1 has of rate structures to make GST compliance easy for been enabled from 01.07.2020 and for FORM common man as well as the trade has helped in achieving GST CMP-08 w.e.f. 15.10.2020. economic integration of the country with a humane touch. v. GSTN is taking measures to increase the 3.2.3 GST has completed more than 3 years, since its capacity of the portal to concurrently handle 3 lakh taxpayers from the present level of 1.5 lakh implementation. GST has revolutionized the indirect taxpayers. taxation regime in India and has allowed India to achieve the Goal of "One Nation, One Tax". However, like every vi. Interest for delay in payment of GST to be other law, GST is also an evolving law and Government charged on the net cash tax liability w.e.f. has been sensitive towards the requirements of the trade 01.07.2017. and industry and is making necessary changes required in law and procedures under GST to accommodate their vii. For registrations cancelled till 12.06.2020, requests so as to make India a favorable destination for application for revocation of cancellation of investment and to enable India in achieving the Goal of registration allowed to be filed up to 30.09.2020. "AtmaNirbhar Bharat". The outcome of these reforms can viii. Instead of big bang approach of introducing new be seen from the significant jump of 14 ranks in India's return system, it has been decided to continue ranking from 77th to 63rd place in World Bank Ease of with the existing return filing system of furnishing Doing Business (EODB) report in 2019. FORM GSTR-1 and FORM GSTR-3B by making 147Annual Report 2020-2021 improvements in the existing system by linking to furnish return on quarterly basis with monthly the FORM GSTR-1and FORMGSTR-3B by tax payment. 01.04.2021. Further, a new auto-generated inward supply statement in FORM GSTR-2B has xv. Requirement of filing FORM GST ITC-04 for the been made available to the taxpayers from period July, 2017 to March, 2019 has been August 2020 onwards which would capture the waived subject to certain conditions. details of imports/SEZ supplies, ISD invoices as well. Further, it has been proposed that Input Tax xvi. A new facility called 'Know Your Supplier' has Credit available in FORM GSTR-2B would be been introduced on the portal so as to enable auto-populated in FORM GSTR-3B by every registered person to have some basic 01.01.2021. information about the suppliers with whom they conduct or propose to conduct business. ix. Simplification of Forms for Annual Return and reconciliation statement has been done. Due date xvii.A special procedure has been made for for furnishing of annual return for FY 2018-19 registered persons who are corporate debtors has been extended till 31.12.2020. Further, under the provisions of the Insolvency and relaxation from furnishing of Reconciliation Bankruptcy Code, 2016 and are undergoing the Statement in FORM GSTR-9C for the FY 2018- corporate insolvency resolution process, so as 19 has been given to taxpayers having annual to enable them to comply with the provisions of aggregate turnover below Rs. 5 crores. GST Laws during the CIRP period. x. A facility has been provided to the registered person to transfer an amount from one (major or xviii.Procedure for transition of registered person in minor) head to another (major or minor) head in light of bifurcation of State of Jammu & Kashmir the electronic cash ledger from 21.04.2020. into two Union territories has been notified. A special procedure has been made for registered xi. In order to reduce the fraudulent availment of persons in Dadra and Nagar Haveli & Daman refund in the name of dummy taxpayers by and Diu consequent to merger of the UTs w.e.f. fraudsters, refund would be paid/disbursed only 26.01.2020. in a validated bank account linked with the PAN & Aadhaar of the registrant w.e.f. 01.01.2021. xix. Due dates for furnishing FORM GSTR-3B for the xii. E-invoice has been introduced for taxpayers with month of July, 2019 to January, 2020 was turnover of Rs. 500 crores or more from extended till 24.03.2020 for registered persons 01.10.2020 for B2B transactions. The same will having principal place of business in the Union be extended for taxpayers with turnover of Rs. territory of Ladakh. Similar extension was also 100 crores or more from 01.01.2021. It would given for furnishing FORM GSTR-1&FORM help tax authorities in combating the menace of GSTR-7. tax evasion. This would also help in seamless flow of credit and invoice matching as envisaged xx. Bunching of refund claims has been allowed in the GST regime. Further, it would help in real- across financial years to facilitate exporters. time updation of data on the GSTN system and thereby, drastically reducing the time taken for xxi. In order to ensure that the benefits for exports filing of outward supply statement in FORM are made available to only those exporters who GSTR-1. earn foreign exchange, it has been provided for recovery of refund on export of goods where xiii. Provisions have been made in GST rules to export proceeds are not realized within the time specify QR code on tax invoices. It is proposed prescribed under FEMA. to implement the system of invoice with dynamic QR code for all B2C invoices for the taxpayers xxii.4 digits of HSN code to be mandatorily specified having annual aggregate turnover of more than on invoice for suppliers with turnover up to Rs. 5 Rs. 500 crores, except SEZ unit, w.e.f. crores and 6 digits of HSN code to be mandatorily 01.12.2020. specified for suppliers with turnover more than xiv. From 01.01.2021, a new scheme called Rs. 5 crores w.e.f. 01.04.2021. 'Quarterly Return Monthly Payment Scheme'(QRMP) is being introduced for 3.2.5 Further, Government has also undertaken taxpayers with turnover up to Rs. 5 crores. various relief measures for the trade to cope up with the Taxpayers, opting for the said Scheme, will have difficulties faced during the COVID-19 pandemic. Various 148Department of Revenue III COVID-19 relief measures announced for GST are as viii. The amount of late fee payable has been capped follows: at Rs. 500/- for non- furnishing of final return in FORM GSTR-10 if the above returns are i. For Composition taxpayers, the due date for furnished between 22.09.2020 to 31.12.2020 furnishing FORM GSTR-4 for FY 2019-20 was extended till 31.10.2020 and due date for ix. Time limit for completion or compliance of any payment of tax in FORM CMP-08 for last quarter action in respect of goods being sent or taken of FY 2019-20 was extended till 07.07.2020. out of India on approval for sale or return for Further, the time limit for opting of composition which such compliance falls during the period scheme for the FY 2020-21 was extended till from the 20.03.2020 to the 30.10.2020 was 30.06.2020. extended till 31.10.2020. ii. No late fees for delayed furnishing of FORM x. Time limit for completion or compliance of any GSTR-3B returns for the taxpayers if return action in respect of Section 171 (NAPA furnished till the specified dates. Further, the provisions) for which such compliance falls during amount of late fee payable has been capped at the period from the 20.03.2020 to the 29.11.2020 Rs. 500/- for each return for the tax period from was extended till 30.11.2020. February, 2020 to July, 2020, if the above returns xi. Furnishing of job work details in FORM GST ITC- are furnished by 30th September, 2020. The said 04 for the period from July, 2020 to September, cap is NIL if the tax liability is zero. 2020 has been extended till 30.11.2020. iii. Reduction of interest rate/Waiver of interest to 3.3 Tax Research Unit (GST on Goods): be paid on delayed payment of tax in FORM GSTR-3B returns, if returns are filed by specified 3.3.1 General policy direction as regards Customs duty dates. rates to give impetus to economic growth: iv. 10% cap on availment of ITC in excess of ITC 3.3.1.1 In recent years, the Customs duty rate structure reflected in FORM GSTR-2A in FORM GSTR- has been guided by a conscious policy of the government 3B specified in Rule 36(4)made applicable on to- cumulative basis for period of February to August, 2020 in the September 2020 return instead of  Incentivize domestic value addition under make on monthly basis in India initiative, which interalia envisages imposition of lower duty on raw materials and v. An enabling section168A has been inserted in providing reasonable tariff barrier on goods being the CGST Act to empower the government to manufactured in India; extend the due date in case of force-majeure event. A notification has been issued using the  Put in place phased manufacturing plan in said power, to extend the due date for compliance respect of significant products like mobile phone, for almost all the provisions of Act. For almost all other electronic goods like TVs, electric vehicles, the provisions of Act, any time limit for completion batteries, solar panel etc. The BCD rates are or compliance of any action, by any authority or calibrated in such a manner that encourages by any person, under the CGST Act, which falls deepening of value addition gradually. For during the period from the 20th day of March, example, in respect of mobile phones, initially 2020 to the 30th day of August, 2020 has been the parts were placed under nil BCD while duty extended upto the 31st day of August, 2020 was imposed on mobiles. Gradually, duty has been raised on parts in phased manner as their vi. Validity of e-way bills was extended till production also began in India. 30.04.2020 for those expiring between period 20.03.2020 to 15.04.2020. Further, validity of e-  Provide level playing field to farmers with way bills was extended till 30.06.2020 for those adequate import tariffs on agricultural produce. expiring on or after 20.03.2020 and generated on or before 24.03.2020. Blocking of e-way bill  Have a graded duty structure so as to avoid duty inversion on value added products. was suspended from 20.03.2020 to 15.10.2020. vii. Returns could be verified during COVID-19  Calibrate customs duty structure in such way that incentivizes investment in key areas like period by taxpayers registered under Companies petroleum exploration, electronic manufacturing Act through electronic verification code (EVC) etc. instead of Digital Signature. 149Annual Report 2020-2021  Modulate customs duty rates so that strategic rate structure, in majority of cases, Tariff imports like defence goods not produced Commission did not find any inversion. domestically are allowed imports at concessional Appropriate corrections have been made in the duty. few cases recommended by them. The inversion now being highlighted essentially emanates from  Ensure that the import of non-essential items is FTA and ITA, the review of which lies in the discouraged. domain of Department of Commerce.  Impose trade remedial duties, like anti-dumping  Health Cess was imposed on the import of duty, CVD, safeguard duty on dumped and Medical Devices at the rate of 5% of assessable subsidized imports causing injury to the domestic value. This Health Cess shall be a duty of industry, while balancing the overall interests of Customs. Health Cess shall not be imposed on the economy, including the downstream user medical devices which are exempt from BCD. industry in case of raw materials/inputs. Further, inputs/parts used in the manufacture of medical devices will also be exempt from Health  Encourage exports, by making available the raw Cess. material without the imposition of customs duty and allowing refunds of duty/taxes on inputs,  A new Chapter VAA (a new section 28DA) has besides fiscal incentives. Prominently, gems and been incorporated in the Customs Act to provide jewelry sector, textiles, pharma, leather goods, enabling provision for administering the electronics, fisheries, agriculture have been preferential tax treatment regime under Trade benefitted by such initiatives relating to exports. Agreements. The proposed new section seeks to specifically provide for certain obligation on 3.3.1.2 Basic Customs Duty structure consequent to importer and prescribe for time bound verification adoption of the above guiding principles for inducing from exporting country in case of doubt. Pending economic growth in India: verification preferential benefit shall be  The basic customs duty rates in general are Nil/ suspended and goods shall be cleared only on 2.5%/5%/7.5% on the inputs/ intermediate furnishing security equal to differential duty. In products [industrial chemicals, ores and certain cases, the preferential rate of tax may be concentrates,fuels, textile fibers and yarns, etc. denied without further verification. used in industries for manufacturing.  Suggestions on review of existing customs duty  Finished items of consumption attract higher duty, exemption notifications, as well as customs laws e.g., items like mobile, television, air-conditioner, and procedures were crowd-sourced using the refrigerators, washing machine, furniture, jewelry, MyGov e-governance portal. The suggestions including imitation jewelry, watches, toysattract received are being examined for suitable action. higher BCD. Footwear, certain textile articles etc. 3.3.2 The Goods and Services Tax: attract BCD at the rate of 25%. 3.3.2.1 GST on Goods  Customs exemption have been reviewed to weed out such entries that are redundant, outdated or i. The GST rate on Mobile Phones and specified outlived their utility. On such review, around 80 parts presently attracting 12% has been raised exemptions are being withdrawn by making to 18% to address inverted duty rate structure. suitable amendment/rescission of relevant notifications. ii. A uniform GST rate of 12% GST rate on all types of matches (Handmade and other than  The BCD has been increased in past few budgets Handmade) has been notified (replacing the on items like oils, pulses, wheat, sugar, fruit earlier rates of 5% on Handmade matches and juices, edible oils and miscellaneous edible 18% on other matches) to address divergent preparation to safeguard the interest of farmers. classification practice.  Concerted efforts have been made to remove iii. A uniform GST rate of 12% on Polypropylene/ inversions in duty structure. Tariff Commission Polyethylene Woven and Non- Woven Bags and and DPIIT examines the issues of inversion/ sacks, whether or not laminated, of a kind used negative effective protection to the domestic for packing of goods (from present rates of 5%/ industry. Due to continuous streamlining of the 12%/18%). 150Department of Revenue III 3.3.3 Central excise duty on Diesel and petrol 3.3.3.1 Excise duty rates: Diesel and petrol duty increases are depicted below  The central excise duty on petrol and diesel was increased by Rs 10 per litre and Rs 13 per litre respectively with effect from 6th May, 2020 and is presently is as under: Duty rates applicable upto 05.05.2020 Duty rates applicable with effect from (Rs. per litre) 06.05.2020 (Rs. per litre) Commodity BED SAED RIC Total BED SAED RIC Total Petrol 2.98 10 10 22.98 2.98 12 18 32.98 (unbranded) Petrol 4.16 10 10 24.16 4.16 12 18 34.16 (branded) Diesel 4.83 4 10 18.83 4.83 9 18 31.83 (unbranded) Diesel 7.19 4 10 21.19 7.19 9 18 34.19 (branded) BED: Basic Excise Duty SAED: Special Additional Excise Duty RIC: Road and Infrastructure Cess  The central excise duty was revised upwards as 3.3.4 Other measures taken related to Covid-19 the revenue augmentation is made necessary for  Vide notification No. 20/2020-Customs dated 9th provisioning of fiscal resources for fighting the April, 2020, exemption from Basic Customs Duty COVID-19 pandemic as well as needs of and applicable Health cess was provided up to infrastructure development. 30th September, 2020 for the following goods:  Also, it is a conscious policy of the Government a. Artificial respiration or other therapeutic to reduce dependence on fossil fuels (which in respiration systems (Ventilators), any case are largely imported), incentivize new renewables like solar, wind and also to incentivize b. Face masks, surgical Masks, use of EVs. Therefore, there is considerable c. Personal protection equipment (PPE), justification for imposing higher taxes on fossil fuels. d. Covid-19 test kits, and e. inputs for manufacture of the above items on actual user basis. 151Annual Report 2020-2021 3.3.4.1 AMENDMENTS IN THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975 AMENDMENTS A. Tariff rate changes for Basic Customs Duty [to be Rate of Duty effective from 02.02.2020] * [Clause 115(a) of the Finance Bill, 2020] S. No Heading, Commodity From To sub- heading tariff item Food processing 1. 0802 32 00 Walnuts, shelled 30% 100% Chemicals 2. 3824 99 00 Other Chemical products and preparations of 10% 17.5% the chemical or allied industries, not elsewhere specified Footwear 3. 6401, 6402, Footwear 25% 35% 6403, 6404, 6405 4. 6406 Parts of footwear 15% 20% Household Items 5. 6911 10 Tableware, kitchenware, water filters (of a 10% 20% 6911 90 20 capacity not exceeding 40 litres) and other 6911 90 90 household articles, of porcelain or china. 6. 6912 00 10 Ceramic table- ware, kitchen-ware, clay 10% 20% 6912 00 20 articles and other household articles 6912 00 40 6912 00 90 7. 7013 Glassware of a kind used for table, kitchen, 10% 20% toilet, office, indoor decoration or similar purposes (other than that of heading 7010 or 7018) 8. 7323 Table kitchen or other household articles and 10% 20% parts thereof, of iron or steel, iron or steel wool; pot scourers and scouring or polishing pads, gloves and the like, of iron or steel, including pressure cookers pans utensils, misc articles such as iron & steel wool, polishing pads, gloves etc. 152Department of Revenue III 9. 7418 10 Table, kitchen or other household articles and 10% 20% parts thereof, of copper; pot scourers and scouring or polishing pads, gloves and the like, of copper. 10. 7615 10 Table, kitchen or other household articles and 10% 20% parts thereof, of aluminum; pot scourer and scouring or polishing pads, gloves and the like, of aluminum. 11. 8301 Padlocks and locks (key, combination or 10% 20% electrically operated) of base metal; clasps and frames with clasps, incorporating locks of base metals; keys for any of the foregoing articles, of base metals (other than lock of a kind used for automobiles.) 12. 9603 Brooms, brushes, hand operated mechanical 10% 20% floor sweepers, not motorized, mops and feather dusters; prepared knots and tufts for broom or brush making; paint pads and rollers; Squeegees (other than roller squeegees). 13. 9604 00 00 Hand sieves and hand riddles. 10% 20% 14. 9615 Combs, hair-slides and the like, hairpins 10% 20% curling pins, curling grips, hair curlers and the like, other than those of heading 8516 and parts thereof. 15. 9617 Vacuum flasks and other vacuum vessels, 10% 20% complete with cases; parts thereof other than glass inners Household appliances 16. 8414 51 10 Table Fans 10% 20% 17. 8414 51 20 Ceiling Fans 10% 20% 18. 8414 51 30 Pedestal Fans 10% 20% 19. 8414 59 20 Blowers, Portable 10% 20% 20. 8509 40 10 Food Grinders 10% 20% 21. 8509 40 90 Other grinders and Mixer 10% 20% 22. 8509 80 00 Other Appliances 10% 20% 23. 8510 10 00 Shavers 10% 20% 24. 8510 20 00 Hair Clippers 10% 20% 153Annual Report 2020-2021 25. 8510 30 00 Hair-removing appliances 10% 20% 26. 8516 10 00 Water heaters and immersion heaters 10% 20% 27. 8516 21 00 Storage heating radiators 10% 20% 28. 8516 29 00 Other electrical space heating apparatus 10% 20% 29. 8516 31 00 Hair Dryers 10% 20% 30. 8516 32 00 Other hair dressing apparatus 10% 20% 31. 8516 33 00 Hand Drying apparatus 10% 20% 32. 8516 40 00 Electric smoothing irons 10% 20% 33. 8516 60 00 Other ovens, cookers, cooking plates, boiling 10% 20% rings, grillers and roasters 34. 8516 71 00 Coffee and Tea Makers 10% 20% 35. 8516 72 00 Toasters 10% 20% 36. 8516 79 10 Electro-thermic fluid heaters 10% 20% 37. 8516 79 20 Electrical or electronic devices for repelling 10% 20% insects 38. 8516 79 90 Other electro-thermic appliances used for 10% 20% domestic purposes 39. 8516 80 00 Electric heating resistors 10% 20% Precious Metals 40. 7118 Coin (of precious metal) 10% 12.5% Machinery 41. 8414 51 40 Railway Carriage fans 7.5% 10% 42. 8414 51 90 Other fans with a self-contained electric motor 7.5% 20% not exceeding 125W 43. 8414 59 10 Air Circulator 7.5% 10% 44. 8414 59 30 Industrial fans blowers and similar blowers 7.5% 10% 45. 8414 59 90 Other industrial fans 7.5% 10% 46. 8414 30 00, Compressor of Refrigerator and Air 10% 12.5% 8414 80 11 conditioner 47. 8419 89 10 Pressure vessels 7.5% 10% 48. 8418 10 10 Commercial type combined refrigerator 7.5% 15% freezers, fitted with separate external doors 49. 8418 30 10 Commercial freezer of chest type, not 7.5% 15% exceeding 800lt capacity 154Department of Revenue III 50. 8418 30 90 Other chest type freezers 10% 15% 51. 8418 40 10 Electrical freezers of upright type, not 7.5% 15% exceeding 800 litre capacity 52. 8418 40 90 Other freezers of upright type, not exceeding 7.5% 15% 800 litre capacity 53. 8418 50 00 Refrigerating or freezing display counters, 7.5% 15% cabinets, show-cases and the like 54. 8418 61 00 Heat pumps other than ac machines 7.5% 15% 55. 8418 69 10 Ice making machinery 7.5% 15% 56. 8418 69 20 Water cooler 10% 15% 57. 8418 69 30 Vending machine, other than automatic 10% 15% 58. 8418 69 40 Refrigerating equipment/devices used in 7.5% 15% leather industry 59. 8418 69 50 Refrigerated farm tanks, industrial ice cream 7.5% 15% freezer 60. 8418 69 90 Others [like freezers of capacity 800 litres and 7.5% 15% more etc.] 61. 8515 Welding and Plasma cutting machines 7.5% 10% (except 8515 90 00) Other Electronic goods 62. 8504 40 Static Converters 15% 20% (except 8504 40 21) 63. 8504 40 21 Dip bridge rectifier 10% 20% 64. 8517 70 10 Populated, loaded or stuffed printed circuit 10% 20% boards Automobile and automobile parts 65. 8421 39 20, Catalytic Convertor 10% 15% 8421 39 90 Furniture Goods 66. 9401 Seats and parts of seats (other than aircraft 20% 25% seats and their parts) 67. 9403 Other Furniture and parts 20% 25% 68. 9404 Mattress supports; Articles of bedding and 20% 25% similar furnishing 69. 9405 Lamps and lighting fittings including 20% 25% searchlights and spotlights and parts thereof; Illuminated signs, illuminated name plates and the like, having a permanently fixed light source, and parts thereof except solar lantern and solar lamps. 155Annual Report 2020-2021 Toys 70. 9503 Tricycles, scooters, pedal-cars and similar 20% 60% wheeled-toys; dolls’ carriages; dolls; other toys; reduced-size (“scale”) models and similar recreational models, working or not; puzzles of all kinds Stationary items 71. 8304 00 00 Filing, cabinets, card-index cabinets, paper- 10% 20% trays, paper rests, pen trays, office-stamp stands and similar office or desk equipment, of base metal, other than office furniture of heading 9403 72. 8305 Fittings for loose-leaf binders or files, 10% 20% letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base metal 73. 8310 Sign-plates, name-plates, address-plates and 10% 20% similar plates, numbers, letters and other symbols, of base metal, excluding those of heading 9405 Miscellaneous 74. 6702 Artificial Flowers 10% 20% 75. 7018 10 20 Glass Beads 10% 20% 76. 8306 Bells, gongs, statuettes, trophies and like, 10% 20% non-electric of base metal; statuettes and other ornaments of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal. B. New entries added to the First Schedule [Clause 115(b) of the Finance Bill, 2020] S. Tariff Item Description Tariff Effecti No. Rate ve rate 1. 8414 51 50 Wall fans 20% 20% 2. 8529 90 30 Open cell for television set 15% 0% 3. 8541 40 11 Solar cells not assembled 20% 0% 4. 8541 40 12 Solar cells assembled in modules or made up 20% 0% in panels 156Department of Revenue III 3.3.4.1 OTHER PROPOSALS INVOLVING CHANGES IN BASIC CUSTOMS DUTY RATES IN RESPECTIVE S. Heading, Commodity From To No sub- heading tariff item Animals 1. 0101 21 00 Pure-bred breeding horses 30% Nil Fuels, Chemicals and Plastics 2. 27 Very low Sulphur fuel oil meeting ISO 8217:2017 10% Nil RMG380 Viscosity in 220-400 CST standards/marine Fuel Oil 0.5% (FO), under the same conditions as available to IFO 180 CST and IFO 380 CST under entry at S. No. 139 of notification No. 50/2017–Customs dated 30.6.2017. 3. 2713 12 10, Calcined Petroleum Coke 10% 7.5% 2713 12 90 4. 2843 Colloidal precious metals; compounds of precious 7.5% 10% metals; amalgams of precious metals 5. 2916 12 10 Butyl Acrylate 5% 7.5% 6. 3907 99 90 Polyester Liquid Crystal Polymers (LCP) for use in 7.5% Nil manufacture of connectors 7. 3920 10 99 Calendared plastic sheets for use in manufacturing 10% 5% of smart cards Paper Industry 8. 48 a) Newsprint, if the importer, at the time of import 10% 5% is an establishment registered with the Registrar of Newspapers, India (RNI) b) Uncoated paper used for printing newspaper, if the importer, at the time of import is an establishment registered with the Registrar of Newspapers, India (RNI) c) Lightweight coated used for printing magazines, subject to end-use conditions Sports Goods 9. 44 List of items allowed duty free import up to 3% of Applica Nil FOB value of sports goods exported in the ble rate preceding financial year is amended to include Willow 157Annual Report 2020-2021 Precious Stones and Metals 10. 7108 Gold used in the manufacture of semiconductor Nil 12.5% devices or light emitting diodes 11. 7103 Rubies, emeralds, sapphires – unset and imported Nil 0.5% uncut 12. 7103 Rough coloured gemstones Nil 0.5% 13. 7103 Rough semi-precious stones Nil 0.5% 14. 7103 Pre-forms of precious and semi-precious stones Nil 0.5% 15. 7104 Rough synthetic gemstones Nil 0.5% 16. 7104 Rough cubic zirconia Nil 0.5% 17. 7104 Polished Cubic Zirconia 5% 7.5% 18. 7110 Platinum or Palladium used in manufacture of-, 12.5% 7.5% a) All goods, including Noble Metal Compounds and Noble Metal Solutions [ 2843] b) Catalyst with precious metal or precious metal compounds as the active substance [ 3815 12] 19. 7112 Spent Catalyst/Ash containing precious metal like 12.5% 11.85 gold from which such precious metal is retrieved % subject to specified conditions. Machinery 20. 84 Goods specified in List 10 of Notification No. 5% 7.5% 50/2017 – Customs dated 30.6.2017, required for use in high voltage power transmission project 21. 8432 80 20 Rotary tillers/weeder 2.5% 7.5% 22. 84 or any Goods specified in List 14 of Notification No. Nil Applica other 50/2017 – Customs dated 30.6.2017, required for ble Chapter construction of road like paver finisher, machines BCD for filling up cracks in roads, mobile bridge inspection units etc. 23. 8501 Motors like Single Phase AC motors, Stepper 7.5% 10% motors, Wiper Motors etc. Electronic goods, parts thereof 24. 74 Copper and articles thereofused in manufacturing Nil Applica of specified electronic items ble BCD 158Department of Revenue III 25. 8504 40 Specified Chargers and power adapters Applica 20% ble BCD 26. 8517 70 10 PCBA of Cellular mobile phones (with effect from 10% 20% 01.04.2020) 27. 8517 70 90 Fingerprint readers for use in Cellular mobile Nil 15% phones 28. 8517 70 90 Vibrator/Ringer of Cellular mobile phones (with Nil 10% effect from 01.04.2020) 29. 8517 70 90 Display Panel and Touch Assembly of Cellular Nil 10% mobile phones (with effect from 01.10.2020) 30. 8518 30 00 Headphones and Earphones Applica 15% ble BCD 31. 8518 90 00 Following parts of Microphone for use in 10% Nil manufacture of Microphone namely, a) microphone cartridge b) microphone holder c) microphone grill d) microphone body etc. 32. 8538 Micro-fuse base, sub-miniature fuse base, Micro- 7.5% Nil fuse Cover and sub-miniature fuse cover for use in manufacture of micro fuse and sub-miniature fuse. Automobile and automobile parts 33. 2843 Noble metal solutions and noble metal compounds 5% Applica used in manufacture of catalytic converter and ble their parts BCD 34. 7110 Platinum or Palladium used in manufacturing of 5% Applica catalytic converter and their parts ble BCD 35. 84 or any (A) Parts of catalytic converter for manufacture 5% 7.5% other of catalytic converters. Chapter (B) The following goods for use in the manufacture of catalytic converters and its parts, namely: - (i) Raw substrates (ceramics) (ii) Wash coated substrates (ceramics) (iii) Raw substrates (metal) (iv) Wash coated substrates (metal) (v) Stainless steel wire cloth stripe (vi) Wash coat 159Annual Report 2020-2021 36. 8702, 8704 Completely Built Units (CBUs) of commercial 30% 40% vehicles (other than electric vehicles) (w.e.f. 01.04.2020) 37. 8702, 8704 Completely Built Units (CBUs) of commercial 25% 40% electric vehicles (w.e.f. 01.04.2020) 38. 8703 Semi Knocked Down (SKD) forms of electric 15% 30% passenger vehicles (w.e.f. 01.04.2020) 39. 8702, 8704, Semi Knocked Down (SKD) forms of electric 15% 25% 8711 vehicles- Bus, Trucks and Two wheelers (w.e.f. 01.04.2020) 40. 8702, 8703, Completely Knocked Down (CKD) forms of electric 10% 15% 8704, 8711 vehicles - Passenger vehicles, Three wheelers, Two wheelers, Bus and Trucks (w.e.f. 01.04.2020) Defence sector 41. 73,84,85,87, Exemption from import duty for specified military As Nil 88,89,90,93 equipment, when imported by Defense PSUs applica andother PSUs for defence forces. ble 3.3.4.3 Pruning and review of customs duty concessions/ exemptions: 3.3.4.3.1 Review of concessional rates of BCD prescribed in notification no. 50/2017 - customs dated 30.6.2017: The BCD exemption hitherto available on certain goods are being withdrawn by omitting following entries of notification No. 50/2017-Customs dated 30.6.2017. S. No. S. No. of Description Notification No 50/2017- Customs 1. 5 Tuna bait [0303] 2. 7 Goods upto an aggregate of ten thousand metric tonnes of total imports of Milk and cream, in powder, granules or other solid form in a financial year. [040210, 04022100] 3. 7A Whey, concentrated, evaporated or condensed, liquid or semi-solid [0404 10 10] 4. 7B Other Whey [0404 90 00] 160Department of Revenue III 5. 8 Butter Ghee, Butter Oil [0405] 6. 9. Other cheese [0406 90 00] 7. 10 Pancreas (Products of animal origin, not elsewhere specified) [Chapter 5] 8. 11 Conch shell [0508 00] 9. 18 Bulbs or tubers, other live plants [0601 or 0602 10. 36 All goods other than meslin or wheat [1001] 11. 38 Meslin [1001] 12. 40 Maize upto an aggregate of five lakh metric tonnes of total imports of such goods in a financial year [1005 90] 13. 47 Sugar beet seeds [1209 10 00] 14. 56 Edible oils [1508, 1512, 1513, 1514,1515 or 1511 10] 15. 58 Refined vegetable oils of edible grade, in loose or bulk form (other than palm oil) [ chapter 15] 16. 59 Vegetable oils of edible grade, in loose or bulk form (other than those specified against S. No. 58 and palm oil), imported for the manufacture of oil commonly known as “Vanaspati” or for refining. Explanation. -The expression “Vegetable oil” means- (a) in the case of cottonseed oil, oil having a free fatty acid content of at least 0.2%; and (b) in the case of any other vegetable oil, oil with free fatty acid content of at least 0.5%. [15] 17. 68 Crude sunflower seed or safflower oil upto an aggregate of one lakh and fifty thousand metric tonnes of total imports of such goods in a financial year [1512 11] 18. 69 Crude sunflower seed or safflower oil other than those specified against S. No. 68 [1512 11] 19. 72 Refined rape, colza or mustard oil upto an aggregate of one lakh and fifty thousand metric tonnes of total imports of such goods in a financial year [1514 19 or 1514 99] 20. 78 Margarine, animal or vegetable oils of edible grade [1517 or 1518] 161Annual Report 2020-2021 21. 83 Glycerol, crude; glycerol waters and glycerol lyes, (other than crude glycerin) [1520 00 00] 22. 88A Raw Sugar upto an aggregate of three lakh metric tonnes of total imports of such goods. Provided that the import of raw sugar in physical form is completed within sixty (60) days from the date of issue of the Tariff Rate Quota Allocation Certificate or license by Directorate General of Foreign Trade (DGFT) to the importer. Provided further that the importer shall convert the raw sugar into white/ refined sugar within a period, not exceeding thirty (30) days, from the date of filing of bill of entry or the date of entry inwards, whichever is later [1701] 23. 89 Dextrose Monohydrate [1702] 24. 92 Molasses resulting from extraction or refining of sugar [1703] 25. 93 Chewing gum whether or not sugar coated [1704 10 00] 26. 94 Food preparations, for infant use and put up for retail sale, of- (i) goods of headings 0401 to 0404, containing cocoa calculated on a totally defatted basis, in a proportion by weight of 5% or more but less than 10%; or (ii) flour, meal, starch or malt extract containing cocoa calculated on a totally defatted basis, in a proportion by weight of 40% or more but less than 50%. [1806 90] 27. 95 Preparations for infant use put up for retail sale [1901 10] 28. 98 preserved potatoes [2004 10 00] 29. 99 Peanut Butter [2008 11 00] 30. 105 Wine, for use as sacramental wine [22] 31. 108 Angostura bitters [2208] 32. 113 Fin fish feed [2301 20, 2309 90 32, 2309 90 39] 33. 115 Dietary soya fibre [2304] 34. 148 Naphtha, when imported by Ratnagiri Gas and Power Private Limited (RGPPL), for use in generation of electricity in the power plants of Ratnagiri Gas and Power Private Limited (RGPPL) at Dabhol, District Ratnagiri, Maharashtra [2710] 162Department of Revenue III 35. 149 Naphtha, when imported for generation of electrical energy by a generating company as defined in section 2(28) of the Electricity Act, 2003 (36 of 2003) to supply electrical energy or to engage in the business of supplying electrical energy [ 2701] 36. 152 Propane, Butane [27111200, 27111300] 37. 160 Electrical energy [ 2716 00 00] 38. 170 Phosphoric acid, for the manufacture of fertilizers[28] 39. 212 Japanese Encephalitis (JE) vaccine, imported by the Andhra Pradesh Government through UNICEF [30] 40. 220 Kyanite salts, in a form indicative of their use for manurial purpose [31] 41. 243 Isolated soya protein [3504] 42. 244 Colour positive unexposed cinematographic film in jumbo rolls and colour negative unexposed cinematographic film in rolls of 400 feet and 1000 feet [37] 43. 245 Instant print film [3701 20 00 or 3702] 44. 246 Cinematographic films, exposed but not developed [3704] 45. 247 Promotional material (like Trailers, making of film etc.) imported in the form of electronic promotion kits (EPK)/ beta cams (Any Chapter) 46. 263 The following polymers of ethylene, namely: - (i) Low density polyethylene (LDPE), (ii) Linear low-density polyethylene (LLDPE), (iii) High density polyethylene (HDPE), (iv) Linear medium density polyethylene (LMDPE), (v) Linear high-density polyethylene (LHDPE) [3901] 47. 264 All goods other than poly iso-butylene [3902] 48. 266 All goods [3903] 49. 274 Compostable polymer or bio-plastic used in the manufacture of bio degradable agro mulching films, nursery plantation pots and flower pots [39139090] 50. 275 Water blocking tape for use in the manufacture of insulated wires and cables falling under heading 8544 (except sub-heading 8544 11) [3919 90 90] 51. 278 Subbed polyester base, imported by M/s Hindustan Photo Films Manufacturing Company Limited, Udhagamandalam for the manufacture of medical or industrial X-ray films and graphic art films [3920] 163Annual Report 2020-2021 52. 286 Patent leather [4114 2010] 53. 287 Raw furskins [ 4301], tanned and dried furskins [ 4302] 54. 386 Lead bars, rods, profiles and wire [7806] 55. 388 Zinc tubes, pipes and tube or pipe fittings [7907] 56. 389 Tin plates, sheets and strip, of a thickness exceeding 0.2 mm; tin foil (whether or not printed or backed with paper, paperboard, plastics or similar backing materials), of a thickness (excluding any backing) not exceeding 0.2 mm; tin powders and flakes [8007] 57. 398 Parts and components of the goods specified in List 10 required for use in high voltage power transmission project [Any chapter] 58. 401 All items of equipment including machinery and rolling stock, procured by or on behalf of Delhi Metro Rail Corporation Ltd. for use in- (i) Delhi MRTS Project Phase-I; and (ii) Specified corridors of Delhi MRTS Project Phase-II, comprising of the following, namely: - a) Vishwavidyalaya- Jahangirpuri; b) Central Secretariat-QutabMinar (via All India Institute of Medical Sciences); c) Shahdara- Dilshad Garden; d) Indraprastha-New Ashok Nagar; e) Yamuna Bank-AnandVihar-Inter State Bus Terminus; and f) Kirti Nagar-Mundka (along with operational Link to Shahdara- Rithala corridor) (Any Chapter) 59. 412 Goods specified in List 15 required for construction of roads [84 or any other chapter] 60. 447 The following goods required for manufacture of Optical disk drives (ODD), namely: - (i) Pick up assembly (ii) Digital signature procession integrated circuit (iii) DC motor (iv) LDO voltage regulator [84 or Any other Chapter] 61. 456 The following goods, namely: - (A) Sprinklers and drip irrigation systems for agricultural and horticultural purposes; (B) Micro Irrigation equipment [8424] 62. 457 Poultry incubators and brooders [8436 21 00] 164Department of Revenue III 63. 459 Parts for manufacture of printers fallingunder sub heading 8443 32 (except 8443 99 51, 8443 99 52, 8443 99 53) [8443] 64. 465 CD –Writers [8471] 65. 474 MP3 or MP4 or MPEG 4 player with or without radio or video reception facility [85] 66. 483 One set of pre-recorded cassettes accompanying books for learning languages and essential complement to such books/. [85] 67. 484 Audio cassettes, if recorded with material from books, newspaper or magazines, for the blind [85] 68. 515 Colour television picture tubes for use in the manufacture of cathode ray televisions [8540 11] 3.3.4.3.2 Customs duty exemptions which have been granted through certain other stand-alone notifications have also been reviewed. The following notifications, which have ceased to be relevant, are being withdrawn: S. Notification No. Notification Subject No. 1. 13/2010-Customs Exemption to import of goods in relation to Commonwealth Games, dated 19.2.2010 2010 2. 73/1999-Customs Exemption to import by Power Grid Corporation of India for the setting dated 8.6.1999 up of Rihand-Sasaram-Biharshariff HV DC Link Back-to-Back Station Project. 3. 205/1992-Customs Exemption to imports under Advance Customs Clearance Permit dated 19.5.1992 4. 105/1999-Customs Exemption under SAARC Preferential Trade Agreement dated 10.8.1999 5. 56/2006-Customs Exemption from Special additional duty to specified goods produced in dated 7.6.2006 Nepal 6. 22/2003-Customs This notification provides exemption to wool or woolen fabrics by Red dated 4.2.2003 Cross and Paper Money. [The entry related to Red Cross has been merged in notification No. 148/1994 – Customs dated 13.7.1994 and exemption to paper money will now be granted through notification No. 50/2017-Customs dated 30.6.2017. Accordingly, the notification No. 22/2003-Customs is being rescinded.] 7. 22/2007-Customs Preferential rates on certain CTH dated 1.3.2007 8. 14/2004-Customs Water supply projects for industrial use exempted under Project dated 8.1.2004 Imports. This exemption will now be available through notification No. 50/2017 – Customs dated 30.6.2017 165Annual Report 2020-2021 3.4 Tax Research Unit (GST on services) iii. Upfront amount payable in respect of service by way of granting of long term lease of (thirty years, GST on services - Measures taken for "Make or more) of industrial plots or plots for In India" and "AatmNirbhar Bharat" during 2020-21 development of infrastructure for financial business, provided by the State Government i. Extension of CGST exemption on services by Industrial Development Corporations or way of transportation of goods by air or by sea Undertakings or by any other entity having 20 from customs station of clearance in India to a per cent. or more ownership of Government to place outside India, was provided for one year the industrial units or the developers in any i.e.upto 30.09.2021. industrial or financial business area was made ii. GST exemption is provided on satellite launch exempted from GST. services provided by ISRO, Antrix and NSIL iv. Reduction of CGST rate on Maintenance, Repair which will help protect the native satellite industry and Overhaul (MRO) services in respect of utilize homegrown launch capabilities without the aircraft from 18% to 5% with full ITC is provided. upfront GST burden and give it a level-playing field. * Central Indirect Taxes [GST/ Non-GST] Revenue: FY 2020-21 (April- November) [Provisional]: (In ` Crore) S. Indirect Tax (GST/Non- Actuals 2019-20 Revenue: April-November 2020 No. GST) [P] (Net) [P] 1 2 3 1 Customs duty 1,09,283 62,095 2 Central Excise duty 2,39,452 2,35,433 3 ST (arrears) 6,029 1,088 Total (Non-GST) 3,54,764 2,98,616 4 CGST 4,94,071 2,45,183 5 IGST# 9,125 35,106 6 GST-Comp. Cess 95,553 50,815 Total (GST) 5,98,749 3,31,104 Total Net [GST+Non-GST] 9,53,513 6,29,720 Source: PrCCA, DG-System, CBIC (daily revenue report) [P]=Provisional Note: The CX (POL) revenue for November, 2020, was paid in December, 2020 has been taken into account. Totals may vary on account of rounding off. 3.5 CUSTOMS playing field and rational protection to MSMEs who are contributing immensely in employment generation. 3.5.1 Indian Customs has always been at the forefront when it comes to adopting cutting edge technology for 3.5.2 The Turant Customs initiative has been taken providing better services in respect of both cargo and up aggressively by CBIC, DoR in 2020. The initiative passengers. The policy adopted by Customs is directed boasts of Faceless, Paperless and Contactless Customs towards the twin goals of "Make in India" and measures. The most noticeable among these are the "AtmaNirbhar Bharat". The tariff structure has been automated clearances on imports implemented pan India calibrated so as to achieve furtherance of economic from March, 2020 (which has de-linked goods registration activity and employment generation in the domestic from payment of duty); bringing more Participating market. There is a special emphasis on providing a level Government Agencies (PGAs) [51 PGAs till May, 2020] 166Department of Revenue III on e-sanchit; enabling PDF copies of Bills of Entry and 3.5.6 Moreover, Various steps were taken to streamline Shipping Bills from April, 2020 and June,2020 the functioning of the department through issuing respectively; Contactless Customs measures for reducing guidelines regarding: physical interface with trade via measures such as setting (i) Destruction of Narcotics & drugs substances of up Turant Suvidha Kendras (TSKs), enabling simplified 12270 kg, 30296 bottles, 3549 tablets, valued at online registration, auto debit of bonds etc; and a Faceless Rs.79 crores in International market, at all India Assessment on import pan India was launched on level. 31.10.2020 (ii) Disposal of 40039 Antique Coins, 1 Antiquity 3.5.3 The streamlined scheme launched for promoting article Kamarband, 18 Antiquity Seals /stamps/ 'Make in India' by allowing manufacturing in Customs- religious emblem valued at Rs.63.90 Crore, by bonded warehouse with single point approval, digital handing over of same to the Minister of Tourism account keeping and simplified compliance requirements, & Culture by the Hon'ble Finance Minister. has been further strengthened by allowing manufacture as well as other operations in a Customs- bonded 3.5.7 Brief on Single Window Project for last one Warehouse and Special Warehouse. For this, year and those which are under process for Manufacture and Other Operations in Special implementation in near future. Warehouse Regulations, 2020 issued vide Notification No.75/2020-Customs (N.T.) dated 17.08.2020 by CBIC i. PGA eSANCHIT: Single Window provide clarity on eligibility, process, operations and implemented PGA eSANCHIT on 16.11.2018 documentation requirements for units operating under whereunder all the PGAs would upload the Section 65 and licensed under Section 58A of the Act. license/permit/certificate/other authorization The scheme is streamlined with clear and transparent (LPCOs) on eSANCHIT. An IRN generated for procedures, documentation and compliance the LPCOs would be communicated to the requirements. beneficiaries (IEC holder) who can use the said IRN for making the LPCO available to the 3.5.4 CBIC is already working in collaboration with Customs for clearance of goods. This would 'Invest India' to promote the scheme and facilitate the eliminate physical interface between PGA, investors. This will play a critical role in promoting Customs and the beneficiaries. It will reduce the investments into India and enhancing ease of doing dwell time and cost of shipment. As of now, 52 business. PGAs are registered on ICEGATE for using eSANCHIT. Matter is under constant persecution 3.5.5 It is also pertinent to mention that CBIC has with remaining 2 PGAs for them to register on undertaken various steps to open up new trade routes ICEGATE. and Land Customs Stations, especially for the facilitation of trade of our neighboring countries during the ii. Application Programme Interface (API): For challenging times of COVID-19 pandemic by way of the PGAs which have their own system for issuing notifications such as: issuing LPCOs, API has been implemented, wherein, the PDF document can be automatically (i) Notification No. 101/2020-Customs (N.T.) dated uploaded on eSANCHIT from their system by 16.10.2020 in relation to the road connecting connecting to CBIC's API Interface. Jaigaon Bazar in India and Phuentsholing in Bhutan and Asian Highway 48 connecting Torsha a. Further the work is in progress for integrating tea garden in India and Ahllay in Bhutan. This the PGAs to transmit data elements of their has greatly mitigated disruptions in the movement LPCOs to CBIC. In this regard, the fields of of goods between the two countries, particularly LPCOs relating to more than a half century given the congestion of traffic on the Jaigaon- PGAs have been mapped and a common Phuentsholing route and the evolving COVID-19 document is being standardized. situation in the region. iii. Compliance Information Portal: Under Single (ii) Notification No. 111/2020-Customs (N.T.) dated Window Project, a single web-based source is 11.12.2020 in relation to new Land Customs being developed which will project all import/ Stations and/or routes with respect to Bholaganj, export clearance related procedural steps, duties, Nalikata, Ryngku, Jogighopa, Badarpur, fees and charges of any commodity related to Kolaghat, Dhulian,Jayanagar and Nagarkata Customs and other Regulatory Agencies/ opening up border haats and new routes through Ministries on a single platform for both Trade and waterways for augmenting trade with our land Officers. The portal is in final stage and is neighbours. expected to be launched soon. 167Annual Report 2020-2021 3.5.8 ICD/CFS related work: 3.6.2 Till date, a total number of 1,33,466 taxpayers have availed the benefits of the Scheme and deposited  This office vide Circular No. 50/2020 dated a total amount of Rs.27,926.48 Cr (Pre-deposit / deposit 05.11.2020 has framed new Policy and of Rs.18,370.50 Cr. + Cash Deposit of Rs.9,555.98 Cr. Guidelines for setting up of Inland Container Depots (ICDs), Container Freight Stations (CFSs) 3.7 DRAWBACK: and Air Freight Stations (AFSs). Important items of work accomplished by the Drawback  Further, this office vide Circular No. 44/2020- Division of CBIC during the period 01.01.2020 Customs dated 08.10.2020 has laid down to 30.11.2020 are as follows: procedures for inspection of ICDs/CFSs and a. Clarification regarding levy and collection of AFSs. Social Welfare Surcharge (SWS) on imports 3.5.9 Central Revenue Control Laboratory (CRCL) under various reward/incentive schemes such as MEIS, SEIS etc. has been issued vide Circular  During 2020, out of 12 Revenue Laboratories, No. 02/2020-Customs dated 10.01.2020. It has Eight (8) Laboratories namely New Delhi, Kandla, been clarified therein that SWS is not exempted Vadodara, Mumbai, Kochi, Chennai and Vizag, and the same cannot be debited through duty Nhava Sheva have been granted NABL credit scrips but has to be paid in cash. accreditation for chemical testing in accordance with ISO/IEC 17-25:2017 for defined scopes. A b. All Industry Rates of Duty Drawback were Circular No.46/2020 dated 05.11.2020 has been examined and reviewed. The revised rates were issued on expanding the scope of Revenue made effective from 04.02.2020 vide Notification Laboratories. No. 07/2020-Customs (NT) dated 28.01.2020. Circular No. 06/2020- Customs dated 30.01.2020  A proposal for recognizing CRCL, New Delhi as was also issued explaining the said amendments. the Regional Customs Laboratory has been c. In order to give effect to the recommendation of approved by the WCO secretariat. the GST Council in its 39th meeting, Notification 3.5.10 Non - Intrusive Inspection System: No. 18/2020-Customs dated 30.03.2020 has been issued which extends the exemption from i. Procurement of Container Scanners: Indian Port Integrated Tax and Compensation Cess upto Association has procured eight (08) Scanners and the 31.03.2021 on goods imported against AA/EPCG Customs is under process of taking over the ownership authorizations. of these scanners. The Proposals of procurement of one (01) Drive Through Rail Scanner and five (05) Mobile X- d. Clarification regarding incidence of National ray based Container Scanners for major airports is under Calamity Contingent Duty (NCCD) for calculation process and likely to be completed by 2021. of Brand Rate of duty drawback has been issued vide Instruction No. 05/2020-Customs dated ii. Procurement of 10 X-ray Baggage Inspection 12.05.2020. It has been clarified that incidence Systems: Admininstrative approval in respect of ten (10) of NCCD, where applicable, is required to be XBISs has been conveyed to Directorate of Logistics, factored in calculation of Brand Rate of Duty CBIC. Drawback. Moreover, efforts are being made for coordination e. During outbreak of COVID-19 pandemic, many with various Ministries/Stake Holders for early disposal representations were received from various of explosives/war like material lying in various Customs Export Promotion Councils to extend the validity formations and Draft controlled delivery Regulation is of Export Performance Certificates for import. under process of finalization. Accordingly, Notification No. 23/2020-Customs dated 14.05.2020 has been issued to further 3.6 CENTRAL EXCISE: amend Customs Notification No. 50/2017- Customs dated 30.06.2017 so as to extend the 3.6.1 The Sabka Vishwas (Legacy Dispute Resolution) period of validity of existing Export Performance Scheme, 2019 (SVLDRS), was introduced w.e.f. Certificates for FY 2019-20 up to 30.09.2020. 01.09.2019, vide the Finance Act (No.2), 2019 and remained operational till 30.06.2020. Further, to help the f. To enhance ease of doing business, Gopalpur trade and industry in the newly formed UT of Jammu & Port [INGPR1] was notified vide Notification No. Kashmir and UT of Ladakh, the Central Government has 25/2020-Customs dated 21.05.2020 for the decided to extend the period for availing the scheme upto purpose of allowing export and import under AA, 31.12.2020 for eligible taxpayers from these UTs. EPCG, MEIS, SEIS and other such schemes. 168Department of Revenue III g. To mitigate the hardship caused by the Covid-19 making an assessment of how the formation is performing pandemic to trade and industry, a special and issuing inspection note, highlighting the specific drawback disposal drive from 09.04.2020 to shortcomings with observed trends, if any. A copy of the 30.04.2020 was taken up vide Instruction 03/ inspection report is also sent to the zonal Chief 2020-Customs dated 09.04.2020. Further, Commissioner. The field Commissionerate is required to Instruction No. 07/2020-Customs dated send its compliance to ensure that the shortcomings are 28.05.2020 was issued launching a special drive removed in a time bound manner. for quick disposal of applications for fixation of CBIC has revised the norms of frequency for Brand Rate of Duty Drawback. inspection of field formation Central Excise, Customs and h. Issues raised in representations and feedback Service Tax vide BMB No. 32/2010 dated 12.05.2010. received from trade relating to All Industry Rates As per the new norms, DGPM is to inspect the of Duty Drawback that were made effective from Commissionerate headquarter once in three years. 04.02.2020 were examined and resolved by Additional inspections would be based on careful profiling amendments made effective vide Notification No. of the risk parameters. Each Commissionerate shall be 56/2020-Customs (N.T.) from 15.07.2020. This inspected each year by either DGPM or jurisdictional Chief Commissioners. For this DGPM shall form annual included revision of All Industry Rates of Duty inspection plan allocating Commissionerates for Drawback for gold jewellery, silver jewellery & inspection to DGPM or Chief Commissioner. Accordingly, articles. Circular No. 33/2020- Customs dated an annual plan has been prepared for the year 2020-21 15.07.2020 was also issued explaining the said during which 107 GST Commissionerate and 57 Customs amendments. Commissionerate are scheduled to be inspected both by 3.8 PERFORMANCE AND ACHIEVEMENT OF DGPM and the Zonal Chief Commissioners. DIRECTORATE GENERAL OF PERFORMANCE 3.9 IMPLEMENTATION OF e-OFFICE IN CBIC MANAGEMENT (DGPM): OFFICES BY DGPM (A) Analysis of Part V of Monthly Performance Report The Office Memorandum issued by CBIC vide (MPR): F.No.:296/03/2019-Cx.9, dated 14/10/2019 has designated and appointed the office of DGPM as "Nodal As per the CBIC's instructions issued under F. No. Office" for coordination with NIC, training facilitations, 296/236/2014-CX.9 (Pt.II) dated 17.09.2015 and obtaining requisite approvals and working on the Member's DOF No. 296/236/2014-CX.9 dated feedbacks as a part of preparation for e-Office 24.12.2014, the Directorate General of Performance implementation in the offices of CBIC. Management (DGPM) is the Functional Owner of the reports prescribed under Part V of the MIS Monthly e-OFFICE is a" Mission Mode Project" under "Digital Performance Report (MPR) of Customs, Central Excise India Programme" and implemented across Pan & Service Tax. The monthly reports in Part V in the three INDIA. streams of Central Excise, Customs & Service Tax are downloaded from MIS web-based utility, compiled and In this regard, the basic data about existing and analyzed. potential user strength was collected from Authoritative sources viz. HRD site. This data was further provided to The Monthly Performance Report for Central Excise, NIC to assess and plan the user's strength in NDC-BBSR. Customs and Service Tax covers Key Areas viz. On the basis of this data TWO INSTANCES with a Adjudication, Call Book, Provisional Assessments, capacity of 25,000 users's each were formed. Instance Refund-Rebate & miscellaneous. The reports are (1) consists of All Directorates (except DGGI) and All compiled on the basis of the data of all the Zones and Customs Zones and Eight CGST Zones. Instance (2) DG-GI/DRI and every month a note containing our consists of DGGI and Twelve CGST Zones. analysis and comments on the performance of various Zones on the above-mentioned Key Areas is sent to all With Board's Administrative and Financial the Members. A copy is also marked to the Chairman. approval by IFU for the Proforma Invoices procured from The analysis indicates top Zones comprising of 80% of NICSI, an autonomous body of NIC, AGCR was the pendency in each of the Key Area. requested for making e-payment to NIC. (B) INSPECTION OF FIELD FORMATION: As a part of training facilitation, interviews with technical experts from NIC were conducted and Project The DGPM is tasked with inspection of field Engineers, Project Lead and Project Manager were Commissionerates to ensure that the field offices are selected for "Roll- Out Team" and Technical Manager, working as per CBIC's policy guidelines. This is ensured Deployment Leads and Deployment Engineers were through a periodic review of Commissionerate records, selected for "Deployment Team" 169Annual Report 2020-2021 While working on Feedback from Zonal Offices, the e- 3.10 PERFORMANCE AND ACHIEVEMENT OF office team remained telephonically in touch with zonal DIRECTORATE GENERAL OF HUMAN RESOURCE offices and attended office seven days a week even when DEVELOPMENT (DGHRD) Pandemic Induced Lockdown was in place. 3.10.1 Performance and achievements of HRM-I Different Committees were constituted to handle and Wing during the year 2020-21 (up to November 2020): solve any operational / technical snag in e-office During the year 2020, following major initiatives have been implementation. The Committees were: taken by DG (HRM):  Project Implementation Committee. (i) Implementation of SPARROW CBIC (Smart Performance Appraisal Report Recording Online)  Project Steering Committee. for Group 'B' and 'C' Officers & staff: Central Board Of Indirect Taxes & Customs (CBIC)  Project Validation Committee. became one of the first Central Government Departments to implement SPARROW on a large  System Administration Committee. scale for Group 'B and 'C' cadres for recording In addition to above, WhatsApp groups were of Annual Performance Appraisal Report (APAR) created to address the issues of EMD Managers, Master of around 50,000 Group 'B'& 'Ç' personnel. In Trainers, Instance I, II and other users besides above to addition to promoting digitisation and reduction address any issues faced by users in e-Office in paper work it is going to help immensely in implementation. Worked constantly on the feedback from timely filing of APAR and improved cadre Commissionerates and immediately initiated remedial management across the country. For its smooth measures as and when required through the aforesaid implementation, dedicated e-mails, help-lines are teams. also provided for officers. Further, trainings were also given to Master Trainers in the Zones for CBIC was regularly updated about every smooth implementation within the Zones. Over development in the process of preparedness for e-office 80000 APARs have been generated for the APAR roll out finally culminating in its PAN INDIA Launch on cycle 2009-10. 15th June, 2020 by Chairman, CBIC. Thereafter, the process to bring all offices of CBIC Live on e-Office was (ii) Cadre Restructuring Proposal: As per DoP&T initiated. vide OM F. No. I.11019/9/2018-CRD dated 25.05.2018, the proposal of Cadre Restructuring As on date all the offices under CBIC, a total of of CBIC was formulated based on wide 433 distinct organizations viz. CGST-225, Customs stakeholder consultation including recognized formations -81 and Directorates - 127 have been made Staff Associations. Following an in-principle live. It is evident that almost all Zones/Organizations have approval by the Board and feedback on the report completely adopted to working electronically on the received from all stakeholders Supplementary application which is encouraging. Instructions have been Report to the Cadre Restructuring was prepared, given to all the CBIC officers to mandatorily open new which was approved by the Board. Based on files on e-Office and gradually migrate old and current Board's approval, proposal for DoPT was physically files on e-Office which DGPM regularly prepared and submitted to the Board. monitors. The feature of inter-instance movement has also been activated to allow sending the files between (iii) Recruitment Rules: Recruitment Rules for the users of different instances and MOF (i.e. Users of the posts of Senior Private Secretary and Board). The option of mail alerts already exists and can Administrative Officer have been notified. be activated by the users. The feature of SMS Alert is at (iv) DPC: the final stage.  Following Regular DPCs have been effectuated/ DGPM would be regularly attending to the following: accomplished during the year 2020 (up to i. Monitoring progress of e-files & migration of files. November, 2020): ii. Resolving doubts & queries related to e-Office  Apex grade (Vacancy Year 2021) functioning.  HAG [Vacancy Year 2019 (Supplementary) iii. Training of field formations. and 2020] iv. Coordination with DG Systems and NIC.  Proposals of DPC for the grade of HAG and HAG+ for the Vacancy Year 2021 have been v. Up gradation of e-Office version. submitted to Board. 170Department of Revenue III (v) e-Pratiniyukti (Online Deputation Module): A 3.11 PERFORMANCE AND ACHIEVEMENT OF single window, online Deputation Module for DIRECTORATE GENERAL OF TAXPAYER SERVICES receipt and processing of deputation applications/ (DGTS): cadre clearance of Group 'A' IRS (C & CE) Publicity Activities till 30.11.2020 in F.Y. 2020-21 officers has been launched on 28.08.2020 and implemented w.e.f. 01.09.2020. The module a) Hon'ble Finance Minister in her budget speech brings together all stakeholders i.e. Ad. II CBIC/ for FY 2019-20 announced legacy dispute Ad. V CBIC/ DGoV/ DGHRD and CCO/DG as resolution scheme. The Scheme was initially well as all IRS (C & CE) officers on one platform available from 1st September, 2019 till 31st for faster processing and streamlining the January, 2020 with due date of payment under deputation cadre clearance procedure. The the Scheme at 30th June, 2020. In this regard endeavor is to complete the deputation cadre 02 newspaper advertisements were published in clearance processing in around 8 working days' English, Hindi & Vernacular, across the country. time, under an automated environment. The main objective of the module is to bring complete b) In order to commemorate the successful transparency and ensure time-bound processing/ completion of the 25 years & Indian Customs accountability in deputation cadre clearance online initiatives and facilitation towards smooth process of IRS (C & CE) officers. SOP has been clearance of goods, two Short-films on 25 years issued with prescribed timelines for all of Indian Customs EDI System (ICES), along with stakeholders. its logo were produced and distributed to all CC Customs Zone. (vi) SPARROW SEVA: Earlier, there was no proper mechanism to accept requests regarding c) To ensure greater public awareness about the updation of information in SPARROW-IRS and various roles and initiatives of Indian Customs, SPARROW-CBIC. Requests were received this Directorate has prepared 2 TV Commercial through various modes viz. post, some through on Indian Customs, showcasing its role & emails (mostly, from emails other than gov.in), functions. These 2 TV Commercial will place and telephone and sometimes over WhatsApp. In enhance the conception of broader role of Indian many cases, the request had to be returned for Customs in the public domain. For wider public lacking proper details/ not in proper format. In outreach, these TVCs were prepared in English, order to make the procedure/ system of handling Hindi and 10 vernacular languages and circulated such requests/ problems/ glitches related to across the zonal offices. SPARROW, an online utility, viz. CBIC SPARROW SEVA has been launched w.e.f. d) GST regime completed 03 successful years on 01.05.2020 for taking various requests regarding 01.07.2020, to publicize this occasion and make Officers' details/ particulars updation, change/ public aware about the latest achievements under assignment of roles of Custodian/ Alternate GST regime, this Directorate produced 06 short- Custodian and for reporting/ flagging any issues/ videos on the occasion of completion of 3 years glitches/ problems to DGHRD SPARROW Team of GST along with a logo and 06 creatives, pertaining to SPARROW-IRS and SPARROW- circulated to field formations and social media CBIC. platforms. Projections till March 2021 e) DoPT has initiated iGOT2.0 (Integrated Government Online Training), an e-Learning a) Regularization in the grade of JTS & STS for Management System, to undertake capacity 2002-2006 Batch IRS Officers building initiatives for Government officials. NACIN along with 06 Central Training Institutes b) Monitoring of movement of Cadre Restructuring (CTIs), has been on-boarded by DoPT in the first proposal to DoP&T phase of iGOT2.0 Project, as a Champion CTI. For this purpose, the Board has mandated DGTS c) Notification of Revised/Amended Recruitment to head a task force to oversee the Content Rules for all grades, as required, with due Design and Production with the help of Instruction approval of DoPT & UPSC. Design Agency (IDA). DGTS has completed the d) Undertake review of performance parameters as production of 04 e-learning modules in already indicated in the APAR formats and to collaboration with NACIN. make necessary changes as required so as to f) The officers of CBIC during resting times of keep them relevant and updated. COVID-19 left no stone unturned to ensure 171Annual Report 2020-2021 seamless supply of essential commodities and CBIC Website facilitation of passengers coming from Vande Recognizing the speed and reach of internet and Bharat Flights at various airports and through also popularity of CBIC website, extensive use of CBIC Operation Samudra Setu at ports. At the same website was made for publicity, awareness and time, they also maintained a hawk-eyed vigil to information dissemination. Information available on this thwart act of economic offenders as well as site includes GST Acts & Rules, notifications, circulars, narcotics smugglers, to ensure the economic orders, Public Notices, Press Releases, GST Fliers, General FAQs, Sectoral FAQs, Overview of GST, Anti- sovereignty and security of the country. Beside profiteering etc. above, officers of CBIC also rose to the occasion and carries out relief activities to people in need. Social Media (As on 30.11.2020) In order to catalogue the efforts of CBIC officers, Considering the importance of social media as a this Directorate came out with a booklet to this powerful means of instant communication with citizens, effect. the Department has effectively used this platform namely Facebook page (CBICINDIA), twitter g) For educating and increasing taxpayers handle(@CBIC_India) and Youtube channel (GST_India). awareness in an effective manner, DGTS Zonal Over 235 Creatives were released through social media units conducts regular webinars along with field sites Twitter and Facebook covering varied topics related formations and trade organization (FICCI, to COVID 19; Trade Friendly Initiatives by CBIC; ASSOCHAM, CII, etc.),. Some of the topics contribute to PM Cares Fund; Earth Day; Special Refund covered are: and Drawback Drive to Benefit MSMEs; ensuring liquidity during lockdown; Turant Customs; CBIC Is Providing  Customs initiatives on Atmanirbhar Bharat Essential Supplies to Over 130 Countries during COVID 19; Internal Trade Facilitation Measures under GST To project, related to inbond manufacturing Fight COVID-19; Indian Customs Facilitating Operation  CAROTAR Rules, 2020 Samudra Setu; eOffice Goes Digital Across CBIC Formations; Trade Facilitation Ensuring Ease of Doing  Inbond Manufacturing u/s 65 of Customs Act, Business; SABKA VISHWAS (legacy dispute resolution) 1962 SCHEME, 2019; Growth in e way bill data shows revival in economy; 40th GST Council Meeting; Benefits of In-  Authorized Economic Operators Bond Manufacturing Scheme; Revised Procedure for Import of Pets; Trade Friendly Initiatives by CBIC; Social  Overview of GST Registration, Returns & media Analytics of CBIC Twitter Handle; DRI Seizures; Refunds CAROTAR 2020 Brochure; Celebrating 3 years of GST- Web banner and Collage; 25 years of ICES System;  Overview of CBIC SQM IS 15700:2018 International Passengers- Baggage Rules, Swachhata Certification procedures Book 2020; 60th WCO Newsletter; Newsletter on Customs Clearance amidst COVID-19 infection, etc.  Guidelines and procedures for Sevottam (Projection till 31.03.2021) Certification DGTS has organized more than 60 Webinars in a span of last 7 months time. Social Media Campaign on QRMP (Quarterly Return Monthly Payment) Scheme, decisions of 42nd Publicity Activities to be undertaken in the latter part GST Council Meeting and upcoming GST Council of the F.Y.2020-21 Meeting, to aware the general public of the Frauds in the name of Customs ; Videos on CBIC Initiatives such as, 1. Publicity of Quarterly Return and Monthly SCMTR (Sea Cargo Manifest and Transshipment Payment (QRMP) Scheme along with other Regulations), QRMP Scheme under GST,etc.; Webinars decisions taken by the 42nd GST Council. to support CBIC Schemes and initiatives; Editing and Creative Design support for digital publications of the 2. Publicity of Mera Bill MeraAadhikar (MBMA) department; Periodical Social MediaReports; Capacity Scheme. building activities for internal stakeholders. TAXPAYER SERVICE CENTRES 3. Production of further modules in the iGOT project. One of the mandates of DGTS has been to set up Taxpayer Service Centres in all Commissionerates. 4. Publicity of any major decisions taken by the GST Vigorous follow-up has ensured setting up of Taxpayer Council or initiatives undertaken by CBIC in the Services Centers in the Commissionerates of Central Tax, later course of the Financial Year. Customs & Central Excise. 172Department of Revenue III PUBLIC GRIEVANCE OFFICERS amended bills of entry through email and web has been made available for the EXIM trade, Public Grievance Officers have been designated which was earlier done through visiting service in all the Commissionerates across the country and details centre. are available on CBIC website. The Citizens' Charter provides for appeal to superior officer in the event of iv. Development of Multiple Enquiries on unsatisfactory response from Public Grievance Officer. ICEGATE Portal: To promote transparency Accordingly, contact details of the superior officer have multiple enquires were developed to provide user also been posted on the website for the benefit of business related information. Few of them were: taxpayers. " PAN based entity type registration PUBLICATIONS " Query Raised by Customs Officer The Directorate brought out following " Query Replied by User publications at the behest of CBIC and other formations: " Details of Bond and Bank Guarantee Taxpayer Information Publications: available Till 30.11.2020 v. Online Bank Account Management Module: Users can now update their bank account details Civil List, 2020 (As on 01.01.2020); CRCL Brochure; and custom location online through ICEGATE for Service Quality Manual-2019; Citizens' Charter; Duty Government Incentive disbursal & Authorized Drawback Schedule,2019; Dealer Code registration. The facility is available Projection from 01.12.2020 to 31.03.2021 for any registered user. DGHRD posters; SS and WS Booklet; Sampark , 2021; vi. Help Desk 2.0: ICEGATE has improved features Civil List 2021; Pocket Sampark 2021 for end users with an automated IVR set up where user selects his category and gets his Significant developments/policy decisions taken tickets locked. Also, a new Client Relationship during the year for the development of a particular Management Tool (CRM) has been set up which sector, including initiatives for improving delivery of provides call history of users for a better public services and for ensuring "inclusive growth"; resolution. The Directorate has carried out media campaigns vii. Redevelopment of SEZ Services: Description: highlighting enhanced ease of doing business as part of Ministry of Commerce & Industry (MOCI) and e-governance/online initiatives like ICEGATE & ACES. Ministry of Finance, have taken joint initiative to exchange important information between SEZ 3.12 PERFORMANCE AND ACHIEVEMENT OF Online System and Electronic Data Interchange DIRECTORATE GENERAL OF SYSTEMS & DATA (EDI) System of Central Board of Excise and MANAGEMENT: Customs (CBIC) to supplement and facilitate SEZ Import & Export transactions. i. SEZ Duties development (e Payment): ICEGATE has enabled SEZ users to make CRM integration with HPSM: ensuring one platform is payments using ICEGATE payment gateway to provided to agents to take calls and log tickets and not pay IGST and Customs duties through this portal toggle. developed by DG Systems. This portal is an API CRM Dashboard - WIP to ensure all the stakeholders enabled portal leading to settlement and have real time view of Voice calls and related parameters accounting on real time basis. (category, user type, type of tickets). These fields were ii. CBIC-DGFT API Integration: CBIC has already part of the daily reports circulated during peak integrated with DGFT for sharing details of IEC, and non-peak hours. SB and BE through API on a real time basis. This Integrated customized IVR with CRM is a feeder to agents has removed the lag faced by the importers/ taking calls. They have the first-hand information available exporters for transmission of data across the of the end user calling ensuring call AHT is reduced. systems promoting paperless and seam less interaction. Single Window Functionality: SW PGA Query reply functionality is developed for the IEC & CHA Holder. iii. Development work BE (Bill OF Entry) These users can reply to the queries raised by the Amendment Messages: Utility for filing Customs Officers for Bills of Entry. This feature is 173Annual Report 2020-2021 available to the IEC &CHA Holder post login into E-Payment Initiatives: CBIC e-payment platform has ICEGATE. been designed as a single payment gateway for to provide e-Payment as-a-Service for multiple CBIC applications, Custom Transit Declaration: it allows the movement of by enabling a new duty collection simply by making goods under transit from their point of entry into the Union configuration changes. The platform currently offers to their point of clearance, where both the customs and NEFT/ RTGS payment mode by integrating with duty national fiscal obligations will then be taken care of. To collecting organizations, RBI and Pr. CCA via event driven make ease of doing business Custom transit Declaration generic APIs. It is integrated with Principal Controller of (CACHA51) message integration has been done. Accounts (Pr. CCA) for real time reconciliation and Redevelopment of SCMTR Services: As per the new accounting of the revenues. In FY 20-21, SEZ application regulations under Sea Cargo Manifest and Transhipment was on boarded onto the Platform for SEZ duty collections Regulations 2018, the Authorized Sea Carrier (ASC)/ through NEFT/ RTGS mode. Integration with ECCS for Authorized Sea Agent (ASA) shall submit an Arrival facilitating courier duties is under progress. Manifest electronically, prior to departure from the last CDF module in e-BR (Electronic Baggage Receipt): port of call to the Indian Port of call and submit a Departure Manifest electronically before departure from the Indian  Launch of Currency Module at all international Port of call. airports. Redevelopment of PCS Services: ICEGATE and PCS  Launch of Offline Module for CDF (Currency (Port Community System) is already integrated for the Declaration Form) to capture historical CDF data at exchange of port activity related messages through SFTP. all international airports. New development id to bring existing messages and new information exchange required under new SCMTR  Enablement of Monitoring of e-BR Website through provisions via API mechanism. Following are the SI Tool. expected benefits:  Addition of newly commissioned Airports like Indore  Bilateral message exchange using APIs between International Airport in the e-BR Application. ICEGATE and PCS on near real time basis.  Providing access to Project EDW to a copy of e-BR  To reduce time-lags, bring in significant process Database to develop Analytical Reports. efficiencies, a robust system to automate and report on the operational processes.  Following modules are under development and are  API Integration with PCS to ease out the Direct likely to be completed in the current financial year: Port Delivery (DPD) & Direct Port Entry (DPE)  CDF@LCS Module (Land Customs Station). process by using real-time information.  Offline Module for BR and CSD (Currency Seized/ Deferred Duty PSUs: Facility to allow deferred duty for Detained). PSU user. For Child User the solution development is under progress.  Reporting Module for BR, CDF, CSD. CSM Go Live-Container Scanner module: Description:  Export Certificate Module in e-BR Application. The module has been created to standardize the integration of Container scanners at different locations  integration of CBIC e-Payment Platform with e-BR. (standalone systems) with CBIC via APIs. Also, to CENTRAL HOSTING OF APIS (Advanced Passenger actualize the use of this data in most efficient manner for Information System): effective risk assessment. An API based integration approach has been taken to receive Container Scanner  Finalization of requirements and infrastructure for Input files from RMS, send them to various Container Central Hosting. Scanners at different locations, receive their output and subsequently update the details in ICES and e-SANCHIT  Firewall installation at Delhi Airport and its connectivity through REST APIs. So far the integration has been to CBIC Network. successfully done and made live on the following locations:  Cable Laying at Delhi Airport to establish connectivity from BoI to CBIC DC. 1. Kamarajar (Ennore), 2. Hazira, 3. JNPT, 4. JNPT NSCIT, 5. Vishakhapatnam, 6. Kolkata, 7. Paradeep, 8.  Enabling of server access to NIC Team and resolving Pipavav issues related to it. 174Department of Revenue III  Establishing connectivity from BoI to APIS Servers in  China situation extensive analysis done for Ministry CBIC DC. for eg. Alternative sources, Top companies and products analysis, etc.  Conducting PoC to finalise of mechanism for Historical Data Transfer.  Post-Covid Exim tracker is being shared on weekly basis.  Ensuring availability of infrastructure at Airports to run APIS application from AIOs.  Customs revenue scenario analysis was undertaken.  Enabling Pilot Testing of APIS Application for a pre  Trend analysis of top 100 imports into India was done. decided list of Airports. Third-party Data Analysis Registration MODULE IN GST: Registration being the  CBDT data analysis was carried out to identify primary requirement for GST administration, always mismatch between the Gross Value of Services remains an area of focus by Systems Directorate. With a declared in ST returns and gross value of services view to achieve the twin objectives of GST administrating declared in ITR/TDS returns. and taxpayer facilitation, following functionalities were implemented during the year 2020-21:  New MoU with expanded data exchange protocol signed with CBDT and proposal for MoU with MCA &  UIN core and Non-core amendment deployed to MoRTH forwarded. production on 20.05.2020. This facilitates the UIN holders to file amendment application w.r.t. their  MoU signed with NATGRID. 9 use cases were registrations. finalized for CBIC-NATGRID data exchange; 2 use- cases were implemented and successfully tested for  GSTP Non-Core amendment deployed in production PoT (Proof of Technology) with dummy data. Now, on 25.06.2020: This facilitates GST practitioners to requisite data is being shared with NATGRID. file their non-core amendment, which is auto approved Analysis support to Commissionerates/Directorates by system.  Implementation of Aadhaar Authentication for  On basis of network analytics on the over invoicing by exporters/ chain of exporters forwarded by EDW registration: As per the amended provisions of CGST to DGGI, a case was successfully booked. Rules, applicants for registration have to undergo Aadhaar authentication, failing which registration is  A data analysis was undertaken to compare IGST granted only after physical verification of the principal taken during import vs GSTR3B credit claimed, and place of business declared by the applicant. It was the same was shared with Chennai GST team for deployed in production on 21.08.2020. further dissemination to our GST field officers.  Restoration of rejected revocation of a cancelled  Safeguard/anti-dumping duty impact assessment was registration: This facility was developed to implement done using Community Detection technique A/B the Order in Appeal passed in favor of the taxpayer testing and NLP. The results were shared with DRI. after his application for revocation of cancellation of  Extensive GSTR1 vs 3B and GSTR8 vs 3B cumulative his registration was rejected by the proper officer. It comparison analysis done for all taxpayers and was deployed in production w.e.f. 18.9.2020. significant results shared with field formations with granular details. Critical Policy Support  As desired by Hon'ble FM, monthly Surge Report for  Entire ACES-GST backend data was analyzed for wrong pin code mapping, wrong jurisdictions, missing imports is being shared every month. returns and shared with ACES-GST for corrections.  An extensive analysis on all FTAs signed by India was Advanced Analytics done for Board for aiding the RCEP negotiation.  ML based taxpayer clustering was done based on  Post-Covid analysis was done for Board and other email, contact information and address for effective Ministries specifically for MoC and MoH (analysis on KYC. critical drugs, APIs, Covid material- Essential Drugs  Risk-profiling of exporters claiming IGST refund was import data was sent on daily basis to MoH and Board carried out leading to issue of Board Circulars and post-Covid outbreak) SoP. 175Annual Report 2020-2021  ML based GST Filing Behavior Analysis was done on supervision of Pr. DG, Systems. The ECCS website has GSTR 3B filing. been made live on 29.06.2020 and the URL of ECCS website i.e. https://courier.cbic.gov.in has also been  CHA Profiling analysis/network analysis and Vanishing placed over CBIC website. Importer analysis for Hong Kong, Thailand, Sri Lanka and Brazil. The Enterprise Data Warehouse (EDW)  NLP based text analytics as done for ticket analysis. The Enterprise Data Warehouse (EDW) is transforming to a new generation data platform to Tickets of Smartview: leverage the capabilities of data science and advance analytics and a new contract was awarded by CBIC to From 1st Jan 2020 to 29th Dec 2020, total around 1500 M/s. IBM for maintenance of existing Enterprise Data tickets has been raised from all over CBIC and Non - Warehouse (EDW) as well as setting up and maintenance CBIC organizations and average time for completing the of Project 'Project 360(now project ADVAIT) for a total request is around 5-6 Hrs. period of 8.5 years. Significant developments / policy decisions taken Development of GST Backend Modules during the year for the development of a particular sector, including initiatives for improving delivery of A. Dispute Settlement & Resolution: public services and for ensuring "inclusive growth": The Dispute Settlement and Resolution Module Migration of ECCS covers the entire spectrum of work flow activities involving investigation, issue of Show Cause Notices / statement The ECCS application was migrated from ECI of demands, adjudication, appeals, review, revision till Data Center to CBIC Data Center on 29th June, 2020. recovery in the life cycle of a dispute. Following issues were successfully addressed after B. Audit ECCS migration: Audit under GST is the process of examination i. Common bucket size for all ICTs has been of records, returns and other documents maintained by reviewed and changed as per workload. a taxable person. The purpose is to verify the correctness of the turnover declared, taxes paid, refund claimed and ii. Additional work flow option has been provided to input tax credit availed, etc. and to assess the compliance AC/DC (under Dashboard menu) with the provisions of GST. iii. Archival storage setup for Document data The Audit Module is in the process of completed. development by M/s Wipro and is expected to be available iv. Access to achieved document data through for User Acceptance Testing (UAT) by March'2021 and application UI has been deployed. expected to be rolled out during FY 2021-22. Rollout of ECCS application at 11 ICTs C. E-Way Bill related functionalities ECCS has been planned to roll out at the other Unblocking of E-Way Bill facility is the main functionality 11 notified ICTs in phased manner after the provisioning under the E-Way Bill Module. Phase-1 of unblocking has of required infrastructure and preparedness by the been completed in the financial year 2019-20. Phase-2 respective Custodians. of unblocking of E-Way Bill was launched on 27.11.2020, which includes online filing of application in ECCS Trade helpdesk EWB-05 by the taxpayer, issue of personal hearing notice by the Tax Officer, filing of reply by the taxpayers and The ICEGATE Helpdesk has been leveraged to issuing of Order in EWB-06 by the Tax Officer. address the queries/grievances raised by importers/ exporters/individuals. For the trade helpdesk, a separate Other functionalities such as, Search, View of E- email id viz eccs.tradehelpdesk@icegate.gov.in and Way and making available the State Wise Block/Unblock a dedicated toll free telephone number 1800-3010-1000 list to the Tax Officers are under process and will be rolled have been made operational. The email Id and number out shortly for CBIC officers. have been displayed over ECCS website. D. Mobile Application for Departmental officers Development of ECCS website Phase-1: SRS of Phase-1 of the Mobile New ECCS website was developed by TCS team Application for Departmental Officers was signed off on under the guidance of WZU, Systems team under the 16.01.2020. The User Interface (UI) screens in respect 176Department of Revenue III of functionalities other than the 14 MIS reports was December,2020. approved on 15.05.2020 and the UI screens in respect Mechanism put in place to measure of the 7 graphical reports has been approved on development outcomes of major schemes / programs 22.09.2020. implemented through the Department/Division: Phase-2: Pan India working group has finalized Regular meetings are being conducted to review the requirements for Phase-2 in the month of July, 2020 the progress made under the projects of DG Systems. and the same has been communicated to the vendor i.e. Parallelly, monthly reports are sought from the projects M/s. Wipro. Discussion on SRS for Phase-2 is under & also various field formations. process and is expected to be completed by Monitoring Framework: S Hierarchy of levels for Frequency Medium of monitoring . monitoring of (dashboard/meeting) N Monitoring o . 1 Board Members Monthly Dashboard/Meeting 2 Director General of Systems Weekly Dashboard/Meeting 3 Additional Director General Weekly Meeting 4 Additional Director, Joint Director Daily Meeting & Deputy Director Initiatives taken with reference to the development Phase II of the Faceless Assessment. of North-Eastern Region and Sikkim including v) Advisory issued for the implementation on IT platform projects/schemes in operation and actual of enabling of Implementation of Unclaimed Cargo expenditure thereon: Module in ICES with respect to procedure for Total of 5 Customs sites situated in the North- expeditious disposal of Un-Claimed/ Un-cleared/ East region have been converted from Non-EDI to EDI Seized/ Confiscated goods. Platform and handholding is being done. vi) Advisory issued for the implementation on IT platform A separate report outlining the policy decisions and of enabling of Implementation of Turant Customs - activities undertaken along with total budget All India roll-out of Faceless Assessment, the roll- provisions earmarked under various schemes and out of Faceless Assessment at an all-India level in amount released: all ports of import and for all imported goods. Migration of ECCS: The budget provisions earmarked vii) Advisory issued for the implementation on IT platform for the Migration of ECCS to CBIC Data Center and of enabling of Manufacturing and other operations in application support is Rs. 7.45 Crores (Plus taxes). a Warehouse Regulations (MOOWR) and waiver of interest. EDW project-Total budget of Rs. 40 Cr. (including taxes) was allotted to 'EDW project' for the F.Y. 2020-21. This viii)Advisory issued for the implementation on IT platform section has already spent Rs. 32.92 cr. (including tax) till of enabling of Capturing additional details for 08.12.2020. Certificate of Origin (COO) as per Customs (Administration of Rules of Origin under Trade ICES Advisories issued on the policy decisions for Agreements) Rules, 2020 in Bill of Entry. These activities are: Regulations apply to import of goods into India where i) Advisory issued for the implementation on IT platform the importer makes claim of preferential rate of duty of PDF copies of e-OOC and e-Gatepass consistent in terms of a trade agreement. with Board's Circular 19/2020 dated 13.04.2020 on the electronic communication of PDF copies of Bill ix) Advisory issued for the implementation on IT of Entry as well as the Gatepass. platform for enabling Bank Approval online request pendency monitoring where the online request from ii) Advisory issued for the implementation on IT platform exporters for registration/modification of their Bank of enabling of Officer Interface for processing IGST account details for purpose of remittance or for availing Refunds in certain cases. export benefits can be approved without their physical iii) Advisory issued for the implementation on IT platform presence. of enabling of Turant Customs - rollout of Phase I of x) Advisory issued for the implementation on IT Faceless Assessment. platform of Operationalization of MEIS rewards issued iv) Advisory issued for the implementation on IT platform by DGFT in ICES against e-Commerce exports made of enabling of Implementation of Turant Customs - through Courier or foreign post offices. 177Annual Report 2020-2021 4. Revenue Headquarters Administration " Chairman, Vice Chairman and Members of CCESC and ITSC 4.1 Administration " Chairman, Vice-Chairman and Members of AARs The Department of Revenue looks after matters for Customs / Central Excise and Income Tax relating to all administration work pertaining to the Department, coordination between the two Boards (CBIC " Director General of CEIB and CBDT), the administration of the Indian Stamp Act " Director of Enforcement 1899 (to the extent falling within the jurisdiction of the Union), the Central Sales Tax Act 1956, Goods and " Competent Authorities (SAFEMA and NDPS) Services Tax (GST) Act, 2017, the Narcotic Drugs and " Director (FIU-IND) Psychotropic Substances Act 1985 (NDPS), the Smugglers and Foreign Exchange Manipulators " Chairperson and Member of Adjudicating (Forfeiture of Property) Act 1976 (SAFEMA), the Foreign Authority set up under PMLA Exchange Management Act 1999 (FEMA), the " Chairman and Members of "Appellate Tribunal" Conservation of Foreign Exchange and Prevention of established under SAFEMA, 1976. Smuggling Activities Act, 1974 (COFEPOSA), the Prevention of Money Laundering Act, 2002 (PMLA) and " CVO, CBDT/ CBIC/ ED matters relating to the following attached/ subordinate 4.2 Directorate of Enforcement offices of the Department: 4.2.1 Introduction a. Enforcement Directorate 4.2.1.1 The primary function of the Directorate of b. Central Economic Intelligence Bureau (CEIB) Enforcement is administration and enforcement of the Prevention of Money Laundering Act, 2002 (PMLA) c. Competent Authorities appointed under SAFEMA including investigation into the offence of money and NDPS laundering, filing of prosecution complaint before the d. Chief Controller of Factories special court against the accused, attachment and confiscation of property involved in money laundering and e. Central Bureau of Narcotics carrying out international cooperation with competent f. Customs, Excise and Service Tax Appellate authorities in foreign jurisdictions. Unlike in many other Tribunal (CESTAT) countries, in India, the Directorate of Enforcement has the sole jurisdiction to investigate the money laundering g. Appellate Tribunal under SAFEMA cases and the Law Enforcement Agencies (LEAs) having the responsibility to investigate a "predicate offence", h. Customs and Central Excise Settlement including the State Police Authorities, are required to Commission (CCESC) make a reference to the Directorate of Enforcement to i. Income Tax Settlement Commission (ITSC) examine the money laundering aspect of the criminal activity. In certain cases, the fact that a predicate offence j. Authority for Advance Ruling for Income Tax and has taken place is also obtained from publicly available Central Excise, Customs & Service Tax sources or on receipt of information from the Financial k. National Committee for Promotion of Social and Intelligence Unit (FIU). On receipt of the reference or Economic Welfare information and after making certain preliminary verification, the Directorate of Enforcement records a l. Financial Intelligence Unit, India (FIU-IND) case and initiates investigation (Enforcement Case Information Report or the ECIR) following a risk based m. Adjudicating Authority under Prevention of Money approach taking into consideration factors such as Laundering Act materiality of the offence, transnational nature of the n. National Institute of Public Finance and Policy crime, complexity of the case, the larger public interest (NIPFP) and the availability of resources. The following items of works are also undertaken 4.2.1.2 The Directorate of Enforcement is also entrusted by the Headquarters: with the implementation and enforcement of the Foreign Exchange Management Act (FEMA) which relates to Appointment of - violation of foreign exchange laws. The Directorate of Enforcement initiates investigations and issues Show " Chairman and Members of CBIC and CBDT Cause Notices (SCN) in cases where the allegations of " Chairman, Vice Presidents and Members of contravention of provisions under FEMA are noticed. CESTAT These SCNs upon adjudication results in imposition of 178Department of Revenue III penalty as well as confiscation of currency/property Region), Kolkata (Eastern Region) and Mumbai (Western involved. Region) each headed by a Special Director. In addition, there is a Headquarters Investigation Unit (HIU) headed 4.2.1.3 The Directorate of Enforcement has also recently by a Special Director. Currently, there are six Additional been entrusted with the implementation of the Fugitive Directors posted at Headquarters Office, Chandigarh, Economic Offenders Act, 2018 (FEOA). The FEOA Chennai, Kolkata and Mumbai. provides for the measures to deter the fugitive economic offenders from evading the process of law in India by 4.2.2.2 There are twenty-two zonal offices, headed by staying outside the jurisdiction of Indian Courts and to Joint Directors, located at Ahmedabad, Bangalore, preserve the sanctity of the rule of law in India. Action Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, under the said Act can be initiated against economic Jaipur, Jalandhar, Kolkata, Kochi, Lucknow, Mumbai, offenders who have left India so as to avoid criminal Panaji, Patna and Srinagar and thirteen sub zonal offices prosecution or who, being abroad, refuse to return to India located at Allahabad, Bhubaneswar, Dehradun, Indore, to face criminal prosecution where the total amount Jammu, Kozhikode, Madurai, Nagpur, Ranchi, Raipur, involved in the economic offence is more than 100 crore. Shimla, Surat, Vishakhapatnam. 4.2.2 Organizational Structure 4.2.2.3 The Legal Wing of the Directorate of Enforcement comprises of Deputy Legal Advisors and 4.2.2.1 The Directorate of Enforcement is headed by the Assistant Legal Advisors. In addition, other Law Officers/ Director, who is not below the rank of Additional Secretary Legal Consultants/Counsels are also appointed/ to the Government of India. He is assisted in his work at empaneled from time to time. the Headquarters by two Special Directors. There are five Regional Offices located at Chandigarh (Northern 4.2.2.4 The organizational structure of the Directorate Region), Chennai (Southern Region), Delhi (Central of Enforcement is presented in the following Table: Northern Regional Office at Chandigarh S. Zonal Office Sub-Zonal Office Territorial Jurisdiction No. 1&2 Chandigarh-I&II - Haryana, Himachal Pradesh, (CDZO) Uttarakhand, UT of Chandigarh 3 - Shimla (SHSZO) Himachal Pradesh 4 - Dehradun (DNSZO) Uttarakhand 5 Jalandhar (JLZO) - Punjab 6 Srinagar (SRZO) - Jammu & Kashmir 7 - Jammu (JMSZO) Jammu & Kashmir (6 Districts) 8 Jaipur (JPZO) - Rajasthan Central Regional Office at New Delhi S. Zonal Office Sub-Zonal Office Territorial Jurisdiction No. 1 Delhi-I, II (DLZO)& - Delhi CR 2 Lucknow (LKZO) - Uttar Pradesh 3 - Allahabad (Varanasi) Uttar Pradesh (34 Districts). (ALSZO) 4 Patna (PTZO) - Bihar & Jharkhand 5 - Ranchi (RNSZO) Jharkhand 179Annual Report 2020-2021 Eastern Regional Office at Kolkata S. Zonal Office Sub-Zonal Office Territorial Jurisdiction No. 1&2 Kolkata-I&II - West Bengal, Odisha, Sikkim, (KLZO) UT of Andaman & Nicobar Islands 3 - Bhubaneswar Odisha (BBSZO) 4 - - Sikkim 5 Guwahati (GWZO) - Assam, Meghalaya, Arunachala Pradesh, Nagaland, Manipur, Mizoram and Tripura 6 - Agartala (AGSZO) Tripura 7 - Aizwal (AZSZO) Mizoram 8 - Imphal (IMSZO) Manipur 9 - Itanagar (ITSZO) Arunachal Pradesh 10 - Kohima (KHSZO) Nagaland 11 - Shillong (SGSZO) Meghalaya Western Regional Office at Mumbai S. Zonal Office Sub-Zonal Office Territorial Jurisdiction No. 1&2 Mumbai-I&II \ - Maharashtra (MBZO) 3 - Nagpur (NGSZO) Maharashtra (24 Districts) 4 Ahmedabad - Gujarat, Madhya Pradesh, UTs (AMZO) of Daman & Diu, Dadra & Nagar Haveli 5 - Surat (STSZO) Gujarat (07 Districts) 6 - Indore & Bhopal Madhya Pradesh (INSZO) 7 Panaji (PJZO) - Goa and Chhattisgarh 8 - Raipur (RPSZO) Chhattisgarh Southern Regional Office at Chennai S. No. Zonal Office Sub-Zonal Office Territorial Jurisdiction 1&2 Chennai-I&II - Tamil Nadu & UT of Puducherry (CEZO) 3 - Madurai (MDSZO) Tamil Nadu (14 Districts) 4 Bangalore (BGZO) - Karnataka 5 - Mangalore (MGSZO) Karnataka (15 Districts) 6 Kochi (KCZO) - Kerala & UT of Lakshadweep 7 - Kozhikode (KZSZO) Kerala (7 Districts) 8 Hyderabad (HYZO) - Andhra Pradesh & Telangana 9 - Vishakhapatnam Andhra Pradesh (9 Districts) (VKSZO) 180Department of Revenue III 4.2.2.5 The location of offices of the Directorate of 57 of the PMLA although under the MLAT or the Enforcement all over India ensures that the money multilateral treaties, the requests need not be routed laundering offences are investigated in an effective through the Courts. manner and it also acts as deterrence for the potential 4.2.3.3 If an order of attachment/freezing/confiscation offenders of money launderers. has been issued by the officers of the Directorate of 4.2.3 International Cooperation Enforcement and the said property is suspected to be in a foreign jurisdiction, the Special Court may issues a letter 4.2.3.1 When proceeds of crime related to offence of request to a court or an authority in the foreign committed in India, is transferred in foreign jurisdictions, jurisdiction for execution of such order. or when accused person(s) has escaped from India, after committing the offence of money laundering or part of it 4.2.3.4 The Directorate of Enforcement also provides or the offence itself has been committed outside the assistance to foreign jurisdictions and investigates the country or the witnesses and other material evidence are offence of money laundering by carrying out necessary available in another country, it may be necessary to gather inquiries if a request is received from a Court or authority information or conduct formal investigation abroad. in the said foreign jurisdiction. It may also attach, seize, freeze, or confiscate the property in India derived or 4.2.3.2 Generally, the basis for seeking Mutual Legal obtained, directly or indirectly, by any person from the Assistance from a Contracting State is the Mutual Legal commission of an offence under the corresponding law Assistance Treaty in Criminal Matters (MLAT). As of now, India has signed MLAT with 40 countries. Mutual Legal committed in the foreign jurisdiction if a request is Assistance can also be sought on the basis Multilateral received from a Court or authority in the said foreign Treaties, such as, United Nation Convention against jurisdiction. Corruption (UNCAC) or United Nation Convention on 4.2.4 Performance of Directorate of Enforcement in the Transnational Organized Crime (UNCTOC). Where there area of PMLA is no such treaty the request can be made on the basis of mutual assurance of reciprocity. These requests are The work done by Directorate of Enforcement in the area normally made through the Special Courts under section of PMLA is summarized in the following Tables: Table 1: ECIRs Recorded, Attachments Made and Prosecution Complaints filed 2020- 1.7.05 2012 2013 2014- 2015 2016- 2017- 2018- 2019- 21 (up Topic to -13 -14 15 -16 17 18 19 20 to Total 31.03.12 30.11. 20) No. of cases 1437 221 209 178 111 200 148 195 562 244 3505 recorded (ECIR) No. of PMLA Prosecution 38 11 55 69 74 101 103 216 51 58 776* Complaints (PC) filed No. of Provisional Attachment Orders 131 65 130 166 105 180 196 181 160 82 1396 (PAOs) issued No. of PAOs 108 52 57 138 117 118 179 187 144 28 1128 confirmed Value of Assets under attachment 1215 2358 1773 3657 2000 11032 7432 15490 28815 5776 79550 (Rs. in crore) Value of assets under PAO confirmed by 9601 326 1395 2151 2952 9189 5086 13175 7449 4301 46985 Adjudicating Authority (Rs. in crore) After the Provisional Attachment is confirmed by the Adjudicating Authority wherein it is held that the property is involved in money laundering, the Directorate of Enforcement takes possession of the property and the offenders do not enjoy the property and thus it no longer remains a “provisional measure” *Further, 146 Supplementary PCs have been filed in 107 cases 181Annual Report 2020-2021 Table 2: Number of summons issued, searches conducted and persons arrested under PMLA Financial Year Number of summons Number of searches Number of issued conducted under PMLA persons arrested 2017-18 5837 368 38 2018-19 9175 519 24 2019-20 10668 335 41 2020-21 (till 30.11.2020) 7048 314 36 Table 3: Money Laundering Investigation (ECIR) under different categories of offences (as on 30.11.2020) Category of Offence Corresponding Number of Number of Amount of provisions cases cases proceeds under the investigated prosecuted seized or predicate Act frozen/ attached (Amount in Crores ) Offences related to Illicit NDPS Act 496 21 146.27 Trafficking in Narcotics Drugs & Psychotropic Substances Offences against the State IPC 121-121B 24 03 1.47 Offences relating to IPC 255-260 09 00 4.78 Counterfeiting Offences relating to Murder, IPC 302-414 63 20 199.02 Grievous Bodily Injury, Kidnapping, Extortion, Stealing, Robbery etc. Offences related to Cheating, Bank fraud 474 130 40389.70 Fraudulent Deeds and Disposition of Property, Siphoning of 145 60 806.26 Forgery etc. (IPC 417-488) Government Funds Ponzi Scheme/ 175 68 13954.30 Duping of Investors Others 785 161 7722.15 Offences relating to Currency IPC 489A-489B 142 07 5.62 Notes and Bank Notes 182Department of Revenue III Offences related to Illicit Arms Arms Act, 1959 35 13 836.76 Trafficking Offences relating to unlawful Unlawful Activities 97 27 175.67 activities of individuals and Prevention Act, 1967, associations and dealing with Explosive Substances terrorist activities Act,1908 Offences relating to wildlife Wildlife Protection 19 04 120.20 including poaching, smuggling Act,1972 and illegal trade in wildlife and its derivatives Offences relating to Trafficking Immortal Traffic 12 03 4.79 in person Prevention Act, 1956, Juvenile Justice (Care & Protection of Children) Act, 2000 Offences related to corruption in Prevention of 733 216 13714.40 government agencies and public Corruption Act, 1972 sector businesses in India. Offences relating to smuggling Antiquities & Art 02 00 00 and fraudulent commercial Treasure Act, 1972 activities in the antiques & sculptures Offences relating to use of Securities & Exchange 12 03 258.27 manipulative and deceptive Board of India Act, devices in trading, insider 1992 trading and substantial acquisition of securities or control Offences relating to evasion of Customs Act, 1962 24 05 88.27 duty or prohibitions imposed under the Customs Act. Offences relating to bonded Bonded Labour System 03 01 0.11 labour and child labour (Abolition Act), 1976 and Child Labour (Prohibition and Regulation) Act, 1986 Offences relating to Copyright Copy Right Act, 1857 07 03 94.04 and Trademark and Trade Marks Act, 1999 183Annual Report 2020-2021 Offences relating to breach of Information 01 00 00 confidentiality Technology Act, and privacy 2000 Offences relating to Biological 02 00 00 Environmental Crime Diversity Act, 2002, Protection of Plant Varieties and Farmer’s Rights Act, 2001 Offences relating to Environment 11 04 15.89 discharging environmental Protection Act, pollutants, etc., in excess of 1986 and Water prescribed standards Prevention & Pollution Offences relating to emigration Emigration 14 02 52.78 and passport violations Act,1983, Foreigners Act, 1946 and Passport Act,1967 Offences where the categorization of the 220 25 959.25 predicate offence is not evident/other offences Total 3505 776 79550 4.2.5 Performance of Directorate of Enforcement in the area of FEMA The work done by Directorate of Enforcement in the area of FEMA is summarized in the following Tables: Table 4: Investigations under FEMA Financial Year Investigation SCN SCN Penalty imposed initiated issued adjudicated (Rs. in crores) 2017-18 3627 791 868 178.80 2018-19 2661 844 769 1905.18 2019-20 3360 718 574 704.60 2020-21 (up to 1989 273 204 665.03 30.11.2020) 184Department of Revenue III Table 5: Number of summons issued and searches conducted under FEMA Financial Year Number of summons Number of searches conducted under issued FEMA 2017-18 4156 126 2018-19 6102 151 2019-20 6838 142 2020-21 (till 30.11.2020) 2241 29 4.2.6 Performance of Directorate of Enforcement FEOs is under progress in the Competent Courts. in the area of FEOA 4.2.7 Performance of Directorate of Enforcement As on 30th November, 2020, the Directorate of in the area of Extradition and RCN Enforcement has filed application under FEOA against The Directorate of Enforcement has made requests for eleven persons. Out of which 06 persons have already publishing of Red Corner Notice (RCN) in respect of 33 been declared as Fugitive Economic Offenders (FEOs) persons, out of which RCN has been published in respect by the Competent Courts. Hon'ble Special Court has of 19 persons. A total of 29 Extradition requests have ordered for confiscation of properties to the tune of Rs. been sent to various countries in respect of 21 individuals. 329.66 Crore in respect of one of the accused. Hearing The year wise details are presented in the following Table: for confiscation of properties in respect of other declared Table 6: Red Corner Notice (RCN) and Extradition Financial Year No. of RCN requests made No. of Extradition requests made 2015-16 02 - 2016-17 - - 2017-18 07 05 2018-19 17 18 2019-20 03 04 2020-21 (till 30.11.2020) 04 02 4.2.8.1 The Directorate of Enforcement gives special is made to it by the police authorities, carries out the focus on investigation of terror financing cases. The financial investigation, including from where the funds terrorism cases under UAPA are investigated and have been received, how the funds were layered into the prosecuted by the National Investigation Agency (NIA) banking channels, and if not through banking channels, under the NIA Act, 2008. However, the State Police whether it was from Hawala or Barter Trade or Trade Authorities also investigate the terrorism cases under Based Money Laundering. It also investigates, how and UAPA and also under various provisions of the IPC. to whom the funds were distributed and if the funds have 4.2.8.2 The focus of investigation by the Police been invested in some property, whether the property Authorities are normally on criminal investigation such still exits or is liquidated. Once the property is identified, as from where the arms have been received, how the the Directorate of Enforcement provisionally attaches the conspiracy has been hatched, who was the mastermind, property and then takes possession after confirmation what was the plot, what was the motive, who were by the Adjudicating Authority. If the property is liquidated, involved etc. equivalent amount of property, whether in India or abroad, 4.2.8.3 The Directorate of Enforcement, after a reference is attached. 185Annual Report 2020-2021 4.2.8.4 During investigation of cases related to terror 4.3 Financial Intelligence Unit - India (FIU-IND) financing by the Directorate of Enforcement, it has been 4.3.1 Background and function of FIU-IND found that the terrorists uses a number of methods of funding including the following : Financial Intelligence Unit-India (FIU-IND) was set up by the Govt. of India to coordinate and strengthen  Banking channels by receipt of foreign collection, analysis and sharing of financial intelligence remittances through an effective national, regional and global network to combat money laundering and related crimes.  Authorized money transfer services such as Western Union 4.3.2 The main functions of FIU-IND include all matters pertaining to  Hawala Payments a) Analysis of information/reports received from  Donations to NPOs/Social Welfare Organizations Reporting Entities as per the provisions of PMLA 2002 and Rules made there under and their  Barter Trade dissemination to authorized domestic agencies  Fake Indian Currency Notes for further action. 4.2.8.5 It may be noted that Barter Trade was allowed b) Enforcement of the provision of PMLA in so far between India and Pak Occupied Kashmir, across the as it relates to FIU-IND. Line of Control. This mode of trade was being misused c) Egmont Group and exchange of information with by the Pakistan based elements for illegal inflow of foreign FIUs. narcotics, weapons and Fake Indian Currency Notes. Huge seizures of narcotics have been effected from d) Interface with reporting entities and their concealments in the trucks being used in the name of regulators and domestic agencies authorized to receive information from FIU-IND including trade across LOC. Besides, invoice manipulation was promoting awareness about AML/CFT, capacity being used for generating cash for terror funding. building and training. Therefore, the Barter Trade has been suspended by the Government of India, pending strict regulatory 4.3.3 Highlights of the Performance/ achievements mechanism in April, 2019. during 2020-21 (from 01 April 2020 to 30 November 2020) 4.2.8.6 In terror financing cases, the Directorate of Enforcement has a very important role both in tracing i. Collection of information (01 April 2020 to 30 the proceeds of crime and its laundering by the terrorists. November 2020): The Directorate of Enforcement not only attaches the a. 85,59,974 Cash Transaction Report (CTRs) Proceeds of Crime and takes possession of the same received. but also files Prosecution Complaints against the terror b. 9,47,152 Suspicious Transaction Reports (STRs) accused under the PMLA. received. 4.2.9 Other Initiatives c. 1,14,866 Counterfeit Currency Reports (CCRs) Other initiatives taken by the Directorate of Enforcement received. includes the following: d. 5,30,460 NPO Transaction Report (NTRs) (a) A Vigilance Awareness Week was also organized received. by the Directorate during 27th October, 2020 to ii. Analysis and dissemination of information (01 2nd November, 2020 to create awareness among April 2020 to 30 November 2020): staff to check corruption at every level so that a a. 38,288 STRs processed. corruption free society could be attained. b. 37,741 STRs disseminated. (b) International Day of Yoga was celebrated on 21st June, 2020 by all the offices of this Directorate. iii. Collaboration with domestic Law All the officers / officials of the Directorate Enforcement and Intelligence Agencies (01 participated with enthusiasm and zeal. April 2020 to 30 November 2020): (c) To mark the 70th anniversary of Constitution Day, a. Regular interaction and exchange of information. year long activities were undertaken by the b. Received 210 requests for information from Directorate like displaying of Fundamental Duties intelligence and Law Enforcement Agencies. at the entrance of all offices including Headquarters Office. Essay and quiz competition c. Provided information in 284 cases requested by on various topics were organized. the agencies. 186Department of Revenue III iv. Regional and global AML/CFT efforts (01 April matters connected therewith or incidental thereto. Two 2020 to 30 November 2020): main objectives of the Act are: a. 87 requests received from foreign FIUs.  Criminalize money laundering and provide for attachment, seizure and confiscation of property b. 268 requests sent to foreign FIUs. involved in money laundering [Implemented by v. Increasing awareness about money Enforcement Directorate]; and laundering and terrorists financing (01 April  Prescribe obligations on banks, financial 2020 to 30 November 2020): Institutions and intermediaries relating to KYC, record keeping and furnishing reports a. 1 Programme for training REs was conducted [Implemented by Financial Intelligence Unit (FIU- in which 800 participants participated. IND)]. b. 6 Review meetings at FIU-IND were held in 4.4.3 PMLA has been amended from time to time to which 52 participants participated. overcome the deficiencies and to meet the international c. 4 Training Programmes for training LEAs standards on Anti-Money Laundering as prescribed by were conducted in which 240 participants Financial Action Task Force (FATF). participated. 4.4.4 Adjudicating Authority under Prevention of d. 1 meeting with LEAs was conducted in which Money Laundering Act, 2002 15 participants participated. 4.4.4.1 The Prevention of Money Laundering Act (PMLA), 2002 was enacted by the Parliament to prevent vi. Strengthening legislative and regulatory money laundering and connected activities, confiscation framework: of proceeds of crime and setting up of agencies and a. Regular interaction with the Department of mechanism for coordinating measures for combating Revenue and Regulators. money laundering. b. Suggestions received from stake holders or 4.4.4.2 The Director, Directorate of Enforcement has through Department of Revenue for been designated as the Director for exercising powers amendments to the Prevention of Money under the PMLA, 2002 and is authorized to provisionally Laundering Act, 2002 and the PML attach the property allegedly involved in money (Maintenance of Records) Rules, 2005 were laundering. The Adjudicating Authority is empowered to dealt with. confirm/ retain the provisional Attachment after hearing the aggrieved parties to ensure that property is not c. Participated in proceedings of the AML disposed of during the pendency of trial for scheduled Steering Committee for evolving Risk based offences of money laundering or proceeds of crime approach and framing of the National ML/TF money laundered. Risk Assessment. 4.4.4.3 The Adjudicating Authority consists of a vii. Strengthening IT information: chairperson and two Members. The posts of Chairperson & Member are tenure post after retirement from erstwhile a. Initiation of Project FINnet 2.0 job. 4.4 Economic Security (ES) 4.5 Financial Action Task Force 4.4.1 Economic Security Cell is dealing with the 4.5.1 History/ Background: administration and implementation of the Prevention of Money Laundering Act, 2002. Based on PMLA, Economic Financial Action Task Force (FATF) is an independent Security Cell is also looking after framing / amendment inter-governmental body having 39 members (37 of PMLA Rules on matters relating to Know Your jurisdictions and 2 organizations) established by its Member jurisdictions for effective implementation of legal, Customer (KYC norms), setting up of special Courts regulatory and operational measures for combating under PMLA, Section 66 of PMLA - authorities to whom money laundering, terrorist financing, combating financing information to be disseminated etc. from time to time. or proliferation of weapons of mass destruction in 4.4.2 Prevention of Money Laundering Act (PMLA) was countries across the world. enacted on 17th January, 2003 and brought into force on 4.5.2 FATF and India: 1st July 2005. The object of this Act is to prevent money laundering and to provide for confiscation of property India became a member of FATF in 2010. India is also a derived from, or involved in, money - laundering and for member of two FATF Style Regional Bodies (FSRBs) - 187Annual Report 2020-2021 Asia Pacific Group (APG) and Eurasian Group the viii. An Inter- Ministerial Coordination Committee has combating Money laundering and Financing of Terrorism been constituted under the Chairpersonship of (EAG). Revenue Secretary under s.72A of PMLA with the mandate of macro-level policy decision making The core work of FATF is to conduct Mutual Evaluation on AML/CFT matters, operational co-operation of its Members and to guide and assist FSRBs to conduct Mutual evaluation of their respective member between the Government, law enforcement jurisdictions. agencies, the Financial Intelligence Unit-India and the regulators or supervisors, and supervision of India's last Mutual Evaluation was conducted in the National Risk Assessment (NRA). year 2010 and the next Mutual Evaluation is scheduled to begin in the year 2020-21 based on the revised ix. An AML/ CFT Joint Working Group has been standards of FATF (40 recommendations and 11 created under the chairpersonship of Additional Immediate outcomes). The Mutual Evaluation is very Secretary (Revenue) for enhancing operational comprehensive and intense exercise and evaluates the co-ordination among all stakeholders. anti-money laundering and combating terror financing (AML/CFT) abilities of a country's financial sector. 4.6 Narcotics Control (NC) 4.5.3 Functions of FATF Cell, DoR: The Narcotics Control Division administers the Narcotic Drugs and Psychotropic Substances Act,1985 i. Consequent to the decision taken by the Cabinet (61 of 1985), which prohibits, except for medical and Secretariat, work relating to FATF and the related scientific purposes, the manufacture, production, Inter-Ministerial Coordination had been possession, sale, purchase, transport, warehouse, use, transferred form Department of Economic Affairs (DEA) to Department of Revenue (DoR) (vide GOI consumption, import inter-State, export inter-State, import Gazette Notification dated 9th Nov, 2017). into India, export from India or transshipment of narcotic drugs and psychotropic substances. The policy of the ii. FATF Cell was constituted in DoR in 2017. Governments has thus been to promote use of narcotic iii. Coordination or work related to FATF Secretariat Drugs and psychotropic substances for medical and is the main function of FATF Cell. As part of this, scientific purposes while preventing their diversion from FATF coordinates with agencies of India's ML/TF licit sources, and prohibiting illicit traffic and abuse. The infrastructure namely ED, FIU-IND, RBI, SEBI, Narcotic Drugs and Psychotropic Substances Act divide IRDAI, MHA, NIA, MEA etc. the powers and responsibility of regulation of licit activities. Section 9 of the Act has listed various activities which iv. The Cell receives, circulates and discusses various papers/ proposals related to FATF, APG, the Central Government can, by rules, regulate while EAG with all the concerned stakeholders within Section 10 lists various activities which the State the country and comments of India are sent on Governments can, by rules, regulate. Accordingly, these issues, keeping national interests in view. Narcotic Drugs and Psychotropic Substances Rules, 1985 have been framed by the Central Government, which v. The FATF cell also nominates Indian delegates regulates cultivation of opium, manufacture, import/export for foreign deputation concerning plenary/ of narcotic drugs and psychotropic substances. Further meetings namely plenaries and other important to prevent diversion of precursor chemicals, of wide meetings of FATF, APG and EAG. Officers of the industrial use, for illicit manufacturing of, narcotic Drugs FATF Cell also participate in these meetings and and psychotropic Substances, the Narcotic Drugs and the delegation takes part in the multilateral discussions on various issues. Psychotropic Substances (Regulations of Controlled Substances) Order, 2013 has been framed under Section vi. Currently, the FATF Cell is coordinating the work 9A of the NDPS Act. related to India's upcoming mutual evaluation. JS (Revenue) is the National Coordinator and 4.6.1 FUNCTIONS/ WORKING OF THE CENTRAL Director (FATF) is the Deputy National BUREAU OF NARCOTICS Coordinator for the Mutual evaluation exercise. 4.6.1.1 Organizational set up vii. An important part of FATF mutual evaluation is to The Narcotics Commissioner heads the Central Bureau conduct National Risk Assessment where risk of various sectors of the economy like Banking, of Narcotics (CBN) with headquarters at Gwalior. The Insurance, Capital Markets, Designated Non- Narcotics Commissioner exercises control and Financial Business and Profession sectors etc. supervision over opium poppy cultivation, which is are assessed periodically. FATF Cell, DoR presently undertaken in select notified areas of the three functions as the coordinator for conducting India's states of Madhya Pradesh, Uttar Pradesh & Rajasthan. ML/TF NRA. In addition to the work relating to licensing of opium poppy 188Department of Revenue III cultivation, measurement and test measurement of fields and Import Certificate for Export/ Import of and procurement of opium, the CBN also undertakes Narcotic Drugs & Psychotropic Substances and preventive checks and exercises vigil to prevent diversion issue of 'No Objection Certificate' for import/export of opium into illicit channels as well as enforcement of of precursor chemicals under the 1961, 1971 and Narcotic Drugs & Psychotropic Substances Act, 1985. 1988 UN Conventions dealing with narcotic drugs, CBN has combined sanction strength of 1104 post. psychotropic substances and chemicals/ substances used for manufacture of these drugs. 4.6.1.2 Responsibilities and Duties vi. 1988 Convention requires CNA of the countries The broad outline of the functions and to take all possible measures to prevent diversion responsibilities of CBN are as under: from international trade of precursor chemicals used in illicit manufacture of narcotic drugs and i. Performing the function of the National Opium psychotropic substances in close cooperation with Agency for India under Single Convention on INCB and competent authorities of concerned Narcotic Drugs 1961 to exercise supervision over countries. licit cultivation of opium poppy in the country in terms of Section 5(2) of the NDPS Act. vii. Liaison with the International Narcotics Control Board, United Nations Drug Control Programme ii. Survey, detection and eradication of illicit as well as with the Competent Authorities of other cultivation of opium poppy throughout the country. foreign countries on issues related to international trade in narcotic drugs, psychotropic substances iii. Enforcement of provisions of the NDPS Act 1985 and precursor chemicals. to suppress illicit traffic in Narcotic Drugs, Psychotropic Substances and notified Precursor viii. Co-ordination with other Enforcement Agencies Chemicals including search, seizure, arrest, such as Narcotics Control Bureau, Directorate of investigation and prosecution of drug offenders Revenue Intelligence, Central Excise, Customs, tracing and freezing of illegally acquired properties State Police, State Excise and various other of drug traffickers derived from illicit drug enforcement agencies. trafficking for forfeiture and confiscation. 4.6.1.3 Performance and Achievements: iv. Issue of licenses for manufacture of synthetic Narcotic Drugs. The performance/achievement with respect to issuance of NOCs issued by Central Bureau of Narcotics during v. Performing the functions of Competent National the year 2020-21 for the export/import of Precursor Authority (CNA) for issue of Export Authorizations Chemicals is as under: Number of NOC issued From 01.04.2020 to From 01.12.2020 to 31.03.2021 30.11.2020 (Projected) For export of Controlled Substance 1036 600 For import of Controlled Substance 654 320 No. of Pre-export Notifications issued 769 600 No. of Pre-export Notification received 690 300 Number of Stop Shipments 44 NA /suspended (Import) Number of Stop Shipments 13 NA /suspended (Export) International Narcotics Control Board (INCB) CBN has identified and stopped suspicious transactions has developed online Pre-export Notification (PEN) of precursors chemicals suspected to be diverted from system to make exchange of information between the the licit channels during the year under report. competent National Authorities. CBN had issued 769 The performance/achievement with respect to issuance PENs (during the period from 01.04.2020 to 30.11.2020 of Export authorization and Import Certificate issued by to the competent authority of various importing countries, Central Bureau of Narcotics during the current financial for verifying the legitimacy of the transactions. On the year for the export/import of narcotic drugs /psychotropic initiative, taken by the CBN, through online PEN system, substances is as under - 189Annual Report 2020-2021 Particular Psychotropic Substances Narcotic Drugs From 01.04.2020 to From 01.12.2020 From 01.04.2020 From 01.12.2020 30.11.2020 to 31.03.2021 to 30.11.2020 to 31.03.2021 (Projected) (Projected) No. of Export 3727 2000 282 80 Authorization Issued No. of Import 357 200 103 40 Certificate issued Number of Manufacturing license, issued/ renewed, for manufacture of synthetic narcotic drugs and number of Registrations for import of poppy seeds issued, are as under: Quota Allocation issued during No of Manufacturing license issued No. of Registration certificates 01.04.2020 to 30.11.2020 during 01.04.2020 to 30.11.2020 issued for import of poppy seeds during 01.04.2020 to 30.11.2020 220 9 Nil Projected figures for the period from 01/12/2020 to 31/03/2021 is as under Quota Allocation No. of Manufacturing license No. of Registration certificates for import of Poppy seeds 250 20 250 As per Rule 67 E (2) of NDPS Rule 1985, CBN manufacturers and dealers of narcotic drugs with the issues allocation of narcotic drugs, during this year, mainly Central Bureau of Narcotics (CBN) and submission of allocation was issued for Codeine Phosphate to 81 data on manufacture, utilization, stock trade and companies for quantity of 86960 kgs, whereas 51 consumption of Narcotic Drugs in the country. The companies have been issued allocation for 7514 kgs of objective of the online application is to collect required medicinal opium. data on manufacture and consumption of narcotic drugs for generation of Form "C" in respect of India for The Government of India has developed web- submission to the International Narcotics Control Board based software for online registration of manufacturers (INCB), Vienna. This office has taken up the matter with and wholesalers of psychotropic substances, for both bulk National Informatics Centre (NIC), New Delhi. However, drugs and preparations, with the Central Bureau of development of web based online application for Narcotics (CBN), under the guidance of the National registration of manufacturers and dealers of narcotic Informatics Centre, New Delhi. The system has been drugs with the Central Bureau of Narcotics (CBN) are made functional to facilitate submission of data on still under process. manufacture, utilization, stock, import, export, sale purchase and consumption of psychotropic substances 4.6.1.4 Enforcement of NDPS Act, 1985- in the country. The Central Bureau of Narcotics undertakes action to The data collected through the system, will prevent the illicit trafficking of Narcotic Drugs and facilitate generation of periodical, statistical report on Psychotropic Substances. It also undertakes psychotropic substances like form 'P' form 'A/P, form 'B/ investigations and prosecution of drug related offences, P' besides other MIS report for monitoring the tracing and freezing of illegally acquired property of drug manufacture and consumption of psychotropic traffickers, derived from illicit drug trafficking, for forfeiture substances in the country. and confiscation. The Government of India has decided to develop a Details of disposal of drugs during the year 2019 and web based online application for registration of 2020 is as follows: 190Department of Revenue III S. No. Narcotics Drugs/Psychotropic 2019 2020 No. of Cases Quantity No. of Cases Quantity 1 Opium 42 1186.360 kgs 21 199.00kgs 2 Opium Mix water - 42.040 kgs - - 3 Heroin 22 64.260 kgs 3 9.422kgs 4 Morphine 01 1.000kg - - 5 Charas 04 13.220 kgs - - 6 Poppy straw/Poppy Husk 11 8041.730kgs 2 21.150kgs 7 Ganja 1 3.450kgs - - 8 Alprazolam 1 110000tabs - - 9 Acetic Anhydride 2 42.000kgs & 5.500lts 1 141.000kgs 10 Nitrazepam 1 2.475 kgs - - 11 Tramadol Inj. 1 245nos. or 490 ml - - During the calendar year 2020, several seizures and destruction of illicit opium poppy cultivation, under NDPS Act, were affected by Central Bureau of Narcotics and details thereof are as follows: Seizure effected by CBN during the year 2019 & 2020 Type of Drug/ Substance 2019 2020 (upto November 2020) Opium Quantity (In kgs.) 152.74 361.180 Cases 6 10 42.040 Op. Sol. Morphine Quantity (In kgs.) 0.65 - Cases 1 - Heroin Quantity ( In Kgs) 1.760 1.515 Cases 4 3 Ganja Quantity ( In kgs) 176.1 18.000 Cases 1 1 Charas Quantity (In kgs.) .63 - Cases 1 - Poppy Straw/Husk Quantity (In kgs.) 3087.650 1732.360 Cases 18 17 Diazepam Quantity (No of inj.) 20475 15 Cases - - Buprenorphine Quantity (In kgs.) - - No. of Inj 81528 inj 1192470 tab Cases - 1 Pentazocine Quantity (In kgs.) 73904 inj 3 inj Cases - - Codeine Phosphate Cough Syrup Quantity (No. of 9746 bottles 21876bottles bottles Cases - - 191Annual Report 2020-2021 Alrazolam Tab Quantity (No. of 1098307 tablets 316670 tabs + 02.000kgs tablets) Cases - 4 Zolpidem Tartrate Quantity (No. of 30600 tabs - tablets) Cases - - Zolpidem Quantity (No. of - 4755 tablets tablets) Cases - - Clonazepam Quantity (No. of 5000 tablets 129180 tablets tablets) Cases - 1 Clobazam Quantity (No. of - 6850 tablets tablets) Cases - - Nitrazepam Quantity (No. of 12350 tab - tablets) Case - - Tramadol Quantity 840006 tabs & 2064229 tablets & 1240 352496 Caps capsules Case - 1 Tramadol Inj Quantity (No. of 5903 390 ampules Injection Cases 2 - Lorazepam Quantity (No. of - 5005 tablets tablets) Methyl Phenidate Quantity (No. of - 600 tablets tablets) Chlordiazepoxide Quantity (No. of - 3933 tablets tablets) Oxazepam Quantity (No. of - 43110 tablets tablets) Phinobarbitone Quantity (No. of - 2000 tablets tablets) Unlabelled injections said to be Quantity (No of Inj.) - 704 ampules Buprenophine inj. Illicit Poppy Cultn Quantity 750 Sqm 0.2839 hect. cases 1 2 192Department of Revenue III Details of Destruction of illicit opium poppy cultivation and cannabis in 2019 & 2020: Year State Area Destroyed (in hect.) Total Area destroyed (in Hect.) 2019 Arunachal Pradesh (Feb) Lohit -495 848 Namsai-195 Uttarakhand (May) Uttarkashi-158 2019 Kullu (13th Aug to 5th Sept) 135 (cannabis) 135 2020 Arunachal Pradesh Lohit- 2580 3180 (26.02.2020 to 06.03.2020) Namsai-600 Number of persons convicted/ acquitted in CBN cases, decided by various Courts, during the financial year 2020-21 (upto November, 2020) are as under- Financial year Total no. of Total no. of Total No. of Total no. of Total no of Conviction rate persons who persons persons persons persons (%) were facing convicted convicted acquitted facing prosecution at against whom prosecution the beginning of prosecution was at the end the year launched during of year the year 2020-21 664+2* 48 3 3 667+2* 50% *foreigners Number of cases, decided by various Courts, during the financial year 2020-21 are as under (upto November,2020): Financial Total No. of cases in Total no. of Total no. of Total no. Conviction year number of which fresh cases in cases in of cases rate (%) cases prosecution which which pending at pending at launched conviction accused the end of the during the year was obtained were year beginning of acquitted year 2020-21 531 25 3 1 533 75% 4.6.1.5 During the crop year 2019-20, a quantity of 289 Mainstreaming, Overview of Sexual Harassment of Metric Tons of opium at 70° consistency (225 Mt at 90° Women at Workplace. consistency) was procured. The average yield per hectare 4.6.1.7 Payment to cultivators through e-Payment: (in kgs) at 70° consistency on the basis of results received from Madhya Pradesh, Rajasthan and Uttar Pradesh units Since crop year 2012-13, a new procedure for payment for the crop year 2019-20 was 65.385, 65.973 & 38.693 has been adopted. There was high risk in drawing big respectively. The All-India average yield during 2019-20 amount from Banks carrying it to weighment centers, was 65.619 kg/hectare at 70° consistency. The figures disbursing it to concerned cultivators/Lambardars and are for crop year 2019-20 as the crop cycle for the carrying it to villages by cultivators from weighment enters cultivation of opium is 1st October to 30th September. in late evening. Banking infrastructure has been improved in opium growing areas and it is developing day by day. 4.6.1.6 Gender Issues/ Empowerment of Women: Considering all these factors cost of opium/commission NACIN Bhopal has conducted online one day is being paid through e-payment directly in Bank Accounts training on 02.12.2020 on Gender Sensitization, Gender of cultivators during weighment operation. After receipt 193Annual Report 2020-2021 of computed challans from govt. Opium Factories, final pharmaceutical industry of India for Preparation of cough payment to cultivators is being done without waiting for syrup, pain relievers, de-addiction drugs and tablets for Settlement Operation. terminally ill cancer and HIV patients. The GOAW are administered by a High-Powered Body called the 4.6.1.8 Other highlights of performance and "Committee of Management" constituted and notified by achievements during the year 2020-21. the Government of India in 1970. The Additional i. GEM Purchase Secretary (Revenue), Department of Revenue, Ministry of Finance is the Chairman of the Committee of Purchase of items for the official purpose is Management. An officer of the rank of Commissioner/ made through GEM portal. The dead stock items, Joint Secretary is the Chief Controller of Factories who perishable items are purchased through GEM portal. The heads the Organization and each of the two factories at upcoming purchase/ services of the articles will also be Neemuch and Ghazipur are managed by a General made through the GEM portal mostly. Manager of the rank of Additional Commissioner/Director. The office of the Chief Controller of Factories is located ii. World Drug Day, 2020 by Central Bureau of at New Delhi. Each of the factories at Ghazipur and Narcotics: Neemuch comprises two units - the Opium Factory and Every year, 26th June is observed as Alkaloid Works. The Opium Factories undertake the work "International day against drug abuse and trafficking", in of receipt of opium from the fields, their storage and order to raise awareness for the drug menace in the processing for exports and domestic consumption. The society and seeking people's participation to deal with Alkaloid Works are engaged in processing raw opium this problem. Central Bureau of Narcotics organized into alkaloids of pharmacopeial grades to meet the several activities like placing Banners on prominent public domestic demand of the pharmaceutical industry. The places and Tree plantation in the official campus. GOAWs have employed a total work force of about 650 people at the two opium and alkaloid plants. The work 4.6.2 GOVERNMENT OPIUM AND ALKALOIDS force comprises of officials and staff drawn from the WORKS (GOAW) Central Board of Indirect Taxes and Customs, Central 4.6.2.1 Chief Controller of Factories (CCF) Bureau of Narcotics, Central Revenues Control Laboratory, apart from personnel selected by the Union The Government Opium & Alkaloid Works Public Services Commission directly. The security (GOAW) is engaged in the processing of raw opium for aspects of these factories are looked after by Central export and manufacturing of opiate alkaloids through its Industrial Security Force (CISF), a paramilitary force of two Factories viz Govt. Opium & Alkaloid Works (GOAW) the Ministry of Home Affairs. The overall performance / at Ghazipur (U.P.) and Neemuch (M.P.). The Products achievements of GOAF for the Financial Year 2020-21 manufactured at GOAWs are mainly used by are as follows: GOVERNMENT OPIUM AND ALKALOID FACTORIES (GOAF) I. PERFORMANCE OF GOAF FOR THE FINANCIAL YEAR 2020-21 (Provisional) Sl. Particulars Unit Actual Production Estimated Production from No. April to November, 2020 December,2020 to March,2021 A PRODUCTION 1 Drying of opium for KG. -- -- Export at 90°C 2 a) Morphine Sulphate KG. 287.450 0.000 b) Codeine Phosphate (C.P.) KG. 8212.483 5369.800 c) Pure Thebaine KG. 470.200 294.100 d) Noscapine BP KG. 2276.375 1382.600 e) Pholcodine KG. 89.700 90.000 f) Papavarine S.R. KG. 1491.300 584.700 g) IMO Powder KG. 5700.000 6300.000 h) IMO Cake KG. 0.000 5000.000 Total (2) (a to h) KG. 18527.508 19021.12 3. Codeine Phosphate Imported for KG. 0.000 11000.000 Domestic Market 194Department of Revenue III Sl. Particulars Actual Sales Estimated Sales from No. April to November, 2020 December,2020 to March,2021 Quantity (in Amount Quantity Amount Kg.) (Rs. in Crore) (in Kg.) (Rs. in Crore) B SALES 1 Export of opium for at 90°C 100.000 0.05 2400.000 1.35 2 a) Codeine Sulphate 0 0 0 0 b) Morphine Sulphate 429.000 1.78 0 0 c) Codeine Phosphate 16653.800 76.10 17629.200 80.50 (Indigenous Production & Imported) d) Dionine I.P. 8.000 0.10 15.000 0.15 e) Pure Thebaine 538.000 4.62 209.000 0.95 f) Noscapine BP 222.000 0.80 1600.000 5.70 g) Pholcodine 24.500 0.18 175.500 1.29 h) Papavarine S.R. 2000.000 0.53 280.000 0.09 i) IMO Powder (Dom. 7791.000 10.17 5462.000 5.22 Sales+Export) j) IMO Cake (Domestic 3303.750 3.37 2000.250 2.04 Sales+Export) Total 2 (a to j) 30970.050 97.65 27370.950 95.94 Grand Total (1+2) 31070.050 97.70 29770.950 97.29 C. (a) COUNTRY WISE EXPORT OF OPIUM AT 90°C (excluding IMO Powder & Cake) FOR THE FINANCIAL YEAR 2020-21 (UPTO NOVEMBER, 2020) (Quantity in Kgs) Unit USA France Switzerland Sri Lanka Total 1 Ghazipur -- -- -- -- -- 2 Neemuch -- -- 100.000 -- 100.000 Total -- -- 100.000 -- 100.000 (b) COUNTRY WISE EXPORT OF OPIUM AT 90°C (excluding IMO Powder & Cake) FOR THE FINANCIAL YEAR 2020-21 (FROM DECEMBER, 2020 TO MARCH, 2021) (Quantity in Kgs) Unit USA France Switzerland Sri Lanka Total 1 Ghazipur -- -- -- -- -- 2 Neemuch 1400.000 900.000 -- 100.000 2400.000 Total 1400.000 900.000 -- 100.000 2400.000 D. (a) REVENUE RECEIPTS (ON REALISATION BASIS) FOR THE FINANCIAL YEAR 2020-21 (UPTO NOVEMBER, 2020) (Rs. in crore) Opium Factory Alkaloid Works Total 1 Ghazipur 0.05 23.87 23.92 2 Neemuch 0.05 77.48 77.53 Total 0.10 101.35 101.45 (b) REVENUE RECEIPTS (ON REALISATION BASIS) FOR THE FINANCIAL YEAR 2020-21 (FROM DECEMBER, 2020 TO MARCH, 2021) (Rs. in crore) Opium Factory Alkaloid Works Total 1 Ghazipur 0.05 31.63 31.68 2 Neemuch 1.25 65.62 66.87 Total 1.30 97.25 98.55 195Annual Report 2020-2021 II. ACHIEVEMENT OF CCF ORGANISATION UP TO THE MONTH OF NOVEMBER, 2020 WITH COMPARATIVE DATA OF PREVIOUS YEAR i.e. 2019 FOR THE SIMILAR PERIOD Provisional Sl. Actual Production % age increase over No. Particulars Unit April to November previous year 2019-20 2020-21 (1) (2) (3) (4) (5) (6) A. PRODUCTION 1 Drying of opium for KG. -- -- -- Export at 90°C 2 Manufacture of Drugs: a) Morphine Sulphate KG. 211.550 287.450 35.88% b) Codeine Phosphate KG. 13946.800 8212.483 -41.12% c) Pure Thebaine KG. 735.100 470.200 -36.04% d) Noscapine BP KG. 2136.600 2276.375 6.54% e) Pholcodeine KG. 0 89.700 100.00% f) Papavarine S.R. KG. 2082.450 1491.300 -28.39% g) IMO Powder KG. 7400.000 5700.000 -22.97% h) IMO Cake KG. 0.200 0.000 -100.00% Total (2) KG. 26502.700 18527.508 -30.09% 3. Import of Codeine Phosphate i) For Domestic Market KG. 0 0 --- B. SALES Provisional Sl. 2019-20 2020-21 No. Particulars April to November April to November Quantity Amount (Rs. Quantity Amount (Rs. in (Kgs.) in Crore) (Kgs) Crore) (1) (2) (3) (4) (5) (6) 1 Export of opium on accrual basis 1295.399 0.68 100.00 0.05 2 Domestic Sale of Drugs : (on actual basis) a) Codeine 0 0 0 0 Sulphate b) Morphine Sulphate 194.475 0.80 429.000 1.78 c) Codeine Phosphate 18341.402 83.82 16653.800 76.10 (Indigenous & Imported) d) Dionine I.P. 0 0 8.000 0.10 e) Pure Thebaine 857.000 3.89 538.000 4.62 f) Noscapine BP 275.001 0.99 222.000 0.80 g) Papavarine S.R. 0 0 24.500 0.18 h) Pholcodine 63.000 0.46 2000.000 0.53 i) IMO Powder (Domestic sale + 4938.060 5.24 7791.000 10.17 Export) j) IMO Cake (Domestic sale + Export) 2845.340 2.90 3303.750 3.37 Total (2) 27514.278 98.10 30970.050 97.65 Grand Total (1+2) 28809.677 98.78 31070.050 97.70 196Department of Revenue III C: COMPARATIVE COUNTRY WISE EXPORT OF OPIUM AT 90°C UP TO (NOVEMBER OF EACH FINANCIAL YEAR) (Qty. in Kgs. at 90ºC) Unit USA FRANCE SWITZERLAND JAPAN SRI LANKA TOTAL 2019-20 Ghazipur -- -- -- -- -- -- Neemuch 403.609 891.790 -- -- -- 1295.399 Total 403.609 891.790 -- -- -- 1295.399 2019-20 Ghazipur -- -- -- -- -- -- Neemuch -- -- 100.000 -- -- 100.000 Total -- -- 100.000 -- -- 100.000 D: COMPARATIVE REVENUE RECEIPTS ON REALISATION BASIS (upto November of each Financial Year) (Rs. in Crores) (Provisional) Unit Opium Alkaloid Total Factories Works 2019-20 Ghazipur 0.08 35.43 35.51 Neemuch 0.07 70.97 71.04 Total 0.15 106.40 106.55 2020-21 Ghazipur 0.05 19.63 19.68 Neemuch 0.05 77.48 77.53 Total 0.10 97.11 97.21 4.6.2.2 Grievances Redressal Machinery: Public 4.7Central Economic Intelligence Bureau (CEIB) Grievances in the CCF's Organization are dealt with 4.7.1 Organization and Functions promptly. The labour grievances are also dealt with expeditiously and the relations between the Management 4.7.1.1 The Central Economic Intelligence Bureau is the & workers during this period was harmonious and cordial. nodal agency on economic intelligence. It was set up in 4.6.2.3 Gender Budgeting/Empowerment of Women: 1985 for coordinating and strengthening the economic Equal opportunity / status is enjoyed by women in CCF intelligence and enforcement activities under the Ministry organization. In case of gender bias / harassment of Finance. reported if any, it is ensured that appropriate action is 4.7.1.2 The Director General, CEIB is assisted by two taken against the erring official. Internal Complaint Additional Directors General (JS Equivalent), Joint Committee has already been formed at CCF office, New Secretary (COFEPOSA), Additional/ Joint Directors (DS/ Delhi, GOAW, Neemuch & Ghazipur for the purpose of Director equivalent), Under Secretaries, Deputy Directors dealing the complaints received regarding sexual (US equivalent) and other staff. harassment at workplace. 4.7.1.3 In terms of its existing revised charter dated 4.6.2.4 Activities Undertaken for Disability Sector & SCs/ 12.12.2003 issued by Department of Revenue (HQ), the STs & Other Weaker Sections of Society: The CCF CEIB carries out the following functions: organization is strictly adhering to the prescribed rules and regulations for the welfare and development of a) The Secretariat for the Economic Intelligence disabled, SCs, STs and other weaker sections. With an Council (EIC); objective to initiate prompt action on grievances of such sections, a committee has been formed with members b) Coordination between various agencies for drawn from such sections. Roster registers for this coordinating action and repository of economic purpose are also being maintained. intelligence (ECOINT); 197Annual Report 2020-2021 c) Administer the COFEPOSA Act 1974 at Central A. Trainings on Intelligence and other relevant Government Level; areas: d) Ensure prompt dissemination of intelligence i. The Bureau organizes training programmes in having security implications among the NSCS, IB premier training institutions for officers of the & R&AW; Department of Revenue/ Member agencies of REICs. The Bureau coordinates training e) Coordinate the functioning of Regional Economic programmes with various specialized agencies Intelligence Councils (REICs); on different subjects for upgradation of the capacity and skills of the Officers. f) Coordination with Multi Agency Centre (MAC); ii. It was through earnest efforts of CEIB that a new g) Organize meetings of Working Group under the course on 'Techniques of Handling Digital Chairmanship of Revenue Secretary at prescribed Evidence using Digital Forensics', conducted by intervals and submit a report to the Chairman of the National Academy of Direct Taxes, Nagpur the EIC after every meeting; and materialized during the year 2019-20. This year CEIB has been successful in persuading h) Act as a 'think tank' for the Department of NALSAR Hyderabad into conducting virtual 3 Revenue, Ministry of Finance on all issues relating days training on legal aspects. to economic offences, and undertake analysis of economic activities at the macro level. iii. The training calendar for the FY2020-21 is published on the website of CEIB for faster 4.7.1.4 The details of the activities of CEIB are as dissemination of information. In this year, details under: of the training programmes conducted by the Bureau so far are as under: Sl. No. Name of the Institute Conducted Date/Duration of the No. of Course/Training Course/Training Course/Training Participants Attended Training 1. Trade Based Money State Bank Institute of 20th to 21st 32 Laundering Consumer Banking, July,2020 Hyderabad (Online) 2. Banking Operations & State Bank Institute of 17th to 19th August, 15 Fiscal Laws Consumer Banking, 2020 Hyderabad (Online) 3. Investigating National Institute of 12th to 15th October, 51 Economic Crime in Securities Markets, 2020 Securities Market Navi Mumbai (Online) 4. Legal Aspects and NALSAR University of 09th to 11th 17 Legal Matters Law, Hyderabad November, 2020 (Online) B. Implementation of COFEPOSA Act, 1974 4.8 STATE TAXES Smuggling, foreign exchange racketeering and There are two State Taxes Sections in the related activities have a deleterious effect on the national Department of Revenue: economy and thereby causing a serious adverse effect a) State Taxes-I on the security of the state. To deal with this menace, the Conservation of Foreign Exchange and Prevention of b) State Taxes-II Smuggling Activities Act, 1974 (COFEPOSA Act, 1974) State Taxes - I Section has been enacted to provide for preventive detention law to detain smugglers and foreign exchange manipulators State Taxes -I Section of the Department of from indulging detained under the COFEPOSA Act. Revenue deals with legislative work relating to Central Several court cases filed against the detention orders Acts having significant interface with the States like the have been decided in favour of the Government. Indian Stamp Act, 1899 and the Constitution (One 198Department of Revenue III Hundred and First Amendment) Act, 2016 for present duty is levied on all these documents implementation of Goods and Services Tax (GST) as well except cheques. as administrative and budgetary matters in respect to ii. Stamp duties on documents other than those Goods and Services Tax Network (GSTN) incorporated mentioned above are levied and collected by the for providing IT platform for the GST. Apart from the States by virtue of Entry 63 in the State List in above, Union Territories Goods and Services Tax the 7th Schedule of the Constitution. (UTGST) Act, 2017 and GST Settlement of Funds Rules, 2017 are other subject matters of the Section. Brief iii. Provisions other than those relating to rates of description of the same is as under: duty fall within the legislative power of both the Union and the States under Entry 44 of the 4.8.1 Goods and Services Tax Settlement of Funds Concurrent List in the Schedule-VII of the Rules, 2017: Constitution. The Goods and Services Tax Settlement of The Indian Stamp Act, 1899 has recently been Funds Rules, 2017 have also been notified on 27th July, amended in respect of security market 2017, which, layout the procedure to be followed for the instruments. The said amendments propose to settlement of funds between the Centre and the States create the legal and institutional mechanism to on account of cross-utilisation of input tax credit between enable states to collect stamp duty on securities IGST and SGST / UTGST, and apportionment of IGST. A market instruments at one place by one agency total amount of Rs. 2,84,542 crore have been settled from (through the Stock Exchanges or Clearing IGST between April, 2020 and December, 2020 and Corporations authorized by the stock exchange distributed among Centre and States/ UTs. This included or by the Depositories) on one Instrument. A Rs. 1,25,750 crore IGST amount released to States/ UTs mechanism for appropriately sharing the stamp (SGST/UTGST) and Rs. 1,58,793 crore to Centre duty with relevant State Governors based on (CGST). state of domicile of the buying client is also 4.8.2 Special Purpose Vehicle for Goods & proposed. Services Tax Network (GSTN): State Taxes -II Section Goods and Services Tax Network (GSTN) was State Taxes-II Section of the Department of set up as a non-government, not-for-profit private limited Revenue handles legislative work relating to Central Acts company on 28th March, 2013, in order to provide IT having significant interface with the States like the Central infrastructure and services to the Centre and State Sales Tax Act, 1956, the Goods and Services Tax governments, tax payers and other stakeholders. With (Compensation to States) Act, 2017. Facilitation in respect the approval of Union Cabinet and the recommendations of State level Value Added Tax (VAT) in regulation and of GST Council, GSTN is in the process of being payment of GST compensation to States/ UTs on account converted into a fully owned Government company. of revenue loss due to implementation of GST w.e.f. 4.8.3 Indian Stamp Act, 1899: 01.07.2017 have been dealt by this division as per details given below: The Indian Stamp Act, 1899 (2 of 1899) is a fiscal statute laying down the law relating to tax levied in the 4.8.4 GST Compensation to States/ UTs for form of stamps on instruments recording transactions. revenue loss due to implementation of GST Briefly, the scheme relating to stamp duties, provided for i. The Goods and Service Tax (Compensation to in the Constitution is as follows: - States) Bill, 2017 was passed by Lok Sabha on i. Under Article 246, stamp duties on documents 29th March 2017 to provide for compensation specified in Entry 91 of the Union List in to the States for the loss of revenue arising on Schedule VII of the Constitution (viz. bills of account of implementation of the Goods and exchange, cheques, promissory notes, bills of Services Tax in pursuance of the provision of lading, letters of credit, policies of insurance, the Constitution (One Hundred and First transfer of shares, debentures, proxies and Amendment) Act, 2016. Accordingly, GST receipts) are levied by the Union but under Article compensation Act, 2017 has been enacted 268, each State, in which they are levied, collects which provides detailed mechanism for and retains the proceeds (except in the case of compensation to the States for loss on account Union Territories in which case the proceeds of implementation of GST. For the purpose of form part of the Consolidated Fund of India). At GST compensation to States, a cess known as 199Annual Report 2020-2021 Compensation cess is being levied on luxury & and Prohibition of Benami Property Transactions Act demerit goods and proceeds of such cess is 1998. being credited to a separate Public Account fund 4.9.1.2 The Appellate Tribunal is located at New Delhi. known as Compensation Fund. GST It consists of a Chairman and four Members. compensation amounting to Rs. 49513.48 crore for the period July, 2017 to March, 2018, Rs. 4.9.1.3 During the period 01.01.2020 to 30.11.2020 in 82343.28 crore for the period April, 2018 to total 939 Appeals (474 in PMLA, 99 in NDPSA, 09 in March, 2019 and Rs. 165302 crore for period SAFEMA, 151 in FEMA and 206 in PBPT) were filed and April, 2019 to March, 2020 has been released in addition 1892 Miscellaneous petitions (1281 in PMLA, to the States/ UTs towards provisional GST 104 in NDPSA, 11 in SAFEMA, 273 in FEMA and 223 in compensation on bimonthly basis as per GST PBPT) were filed during the said period. Total 30 appeals (Compensation to States Act), 2017, subject to (22 in PMLA and 03 in NDPSA, Nil in SAFEMA, 05 in calculation of GST compensation based on AG FEMA and Nil in PBPT) were disposed of during the said certified figures. period. ii. During the current FY, only Rs. 40,000 crore has 4.9.2 Competent Authority under SAFEMA/ NDPS been released to all States/ UTs so far to meet 4.9.2.1 The Smugglers and Foreign Exchange partly the bi-monthly compensation due for April & May, 2020 as GST Compensation Fund was Manipulators (Forfeiture of Property Act, 1976 (SAFEMA), provides for forfeiture of illegally acquired property of the not adequate to meet the full compensation for period April-May, 2020. Further, the balance GST persons convicted under the Sea Customs Act, 1878, compensation for the period April-May, 2020 and the Customs Act, 1962 and the Foreign Exchange GST compensation for the period June- Regulation Act, 1947 and Foreign Exchange Regulation November, 2020 is pending to all States/UTs. Act, 1974 and the persons detained under the Conservation of Foreign Exchange and Prevention of iii. The issue of shortfall in GST compensation cess Smuggling Activities Act, 1974. The Narcotics Drugs and collection and pending GST compensation to Psychotropic Substances Act, 1985 (NDPSA) provides States has been discussed and deliberated in for tracing, freezing, seizure and forfeiture of illegally GST Council meeting held in October, 2020 and acquired property of the persons convicted under that accordingly, in order to meet the shortfall in GST Act or any corresponding law of any foreign country, and compensation to be paid to States, Central those who are detained under the Prevention or Illicit Government has decided to borrow Rs. 1.1 lakh Traffic in Narcotic Drugs and Psychotropic Substances crore under the Special Window in appropriate Act, 1988. tranches. The amount so borrowed will be passed on to the States as a back-to-back loan 4.9.2.2 SAFEM Act and NDPS Act provide for to help the States to meet the resource gap due appointment of Competent Authorities for carrying out to non-release of compensation due to forfeiture of illegally acquired properties. At present, the inadequate balance in the compensation fund. Offices of Competent Authorities are located at Kolkata, All States have decided to take benefit of this Chennai, Delhi, Mumbai and one unit is at Ahmedabad. assistance to tide over the temporary resource SAFEM(FOP)A envisages establishment of an appellate gap. forum, namely the Appellate Tribunal to hear the appeals filed against the orders of Competent Authority under 4.9 Competent Authority SAFEMA/NDPSA Act. 4.9.1 The Appellate Tribunal under SAFEMA 4.9.2.3 The details regarding the number of reports 4.9.1.1 The Appellate Tribunal constituted under the received by the Competent Authorities from enforcement Smugglers and Foreign Exchange Manipulators agencies, the number of show cause notices issued and (Forfeiture of Property) Act, 1976 (SAFEMA). It started the value of the property involved therein, the number of functioning w.e.f. 03.01.1977. It hears the appeals filed orders of forfeiture passed and the value of the property against the orders of Competent Authority under SAFEM/ involved therein, and the value of sale proceeds of the NDPS Acts, Adjudicating Authority under PMLA, FEMA property disposed of are given in Appendix 'A'. 200Department of Revenue III Appendix ‘A’ FORFEITURE OF ILLEGALLY ACQUIRED PROPERTY UNDER NDPS AND SAFEMA BY COMPETENT AUTHORITIES Financial Number of Number of Notices Number of Forfeiture Value of sale Year reports for Forfeiture issued Orders issued and proceeds of received from and value of Property value of Property Property Enforcement involved. involved. disposed of Agencies (in Rs. lakhs) Number Value (in Number Value (in Rs. Rs. Lakhs) Lakhs) 1 2 3 4 5 6 7 2000-2001 491 159 2755 103 1662 201 2001-2002 228 89 7223.12 50 3202.39 107 2002-2003 995 72 1269.22 53 2498.60 18 2003-2004 1180 97 1547.75 25 977.01 51.6 2004-2005 1357 162 3251.64 25 650.93 73.67 2005-2006 607 214 10074.59 91 744.60 153.27 2006-2007 514 243 3017.27 112 868.57 2.63 2007-2008 507 210 12784.31 24 551.10 366.97 2008-2009 99 39 2065.88 28 1115.33 121.30 2009-2010 48 21 178.5 20 2153.20 Nil 2010-2011 128 19 1394.06 22 45.57 1123.49 2011-2012 112 17 690.85 22 391.58 191.27 2012-2013 40 13 3091.48 10 101.10 Rs.1294.28 lakhs + US $3400 2013-2014 61 5 73.55 3 118.73 608.37 2014-2015 54 24 643.908 18 3253.55 166 2015-2016 92 22 1553.81 12 308.93 11.52 2016-2017 45 22 1232.95 19 2.35 778.44 and $443783.19 2017-2018 40 7 77.92 3 39.47 1641.45 2018-2019 104 28 1243.69 4 94.26 918.93 2019-2020 105 36 7417.96 52 15,606.82 371.89 2020-2021 33 26 1418.66 40 1,30,148.41 150.08 (Jan 20 to Nov-20) 4.10 Customs, Excise & Service Tax Appellate the special bench presided by the President of the Tribunal (CESTAT) Tribunal hear the appeals against the orders passed by the designated authority of the Ministry of Commerce. 4.10.1 Functions/ Working of the Organization Whenever two different decisions on a single issue are 4.10.1.1 The Customs, Excise and Service Tax passed by co-ordinate Benches of the Tribunal, the issue Appellate Tribunal formerly known as Customs Excise & is resolved by constituting 3 Members Larger Bench and Gold (Control) Appellate Tribunal is a quasi-judicial a decision then rendered by the larger bench is applicable authority established in the year 1982 with an objective to all Division Benches and subordinate adjudicating of hearing appeals against the orders passed by the authorities. Commissioners of Customs and Central Excise under the Customs Act, 1962 and Central Excise Act, 1944. 4.10.1.2 The Principal Bench of the Tribunal is Service Tax appeals are also heard by the Tribunal ever situated at Delhi and eight regional benches are situated since the promulgation of the Finance Act, 1994. The at Mumbai, Kolkata, Chennai, Bangalore, Ahmadabad, Tribunal is also having appellate jurisdiction over Anti Allahabad, Chandigarh and Hyderabad. The Tribunal is Dumping Duty matters under the Customs Tariff Act and headed by the President who is a retired judge of High 201Annual Report 2020-2021 Court. The composition of a Bench consists of a Judicial achievements during the year Member and a Technical Member and it is called a 4.10.2.1 After the situation caused by the pandemic, Division Bench. Mumbai has three Benches, Delhi has the Tribunal resorted to hearing of appeals through video three Benches, Chennai and Bangalore have two conferencing on Jitsimeet which is an open source video Benches each and rest of the places have one Bench platform. This facility has been implemented in all the each totaling to 16 Judicial Members and 16 Technical nine benches and substantial number of cases have been Members. The Bench is constituted by separate order of disposed. The listing is done on a request made by the the President periodically. To expedite the disposal of parties. It has been noticed that pre-deposit has not been small cases with financial stake up to Rs. 50,00,000/- made by many appellants while filing of appeals during (Fifty Lakh Rupees), wherein no question of rate of duty the pandemic time. Hence it has been decided to list such or valuation is involved, Single Member Bench is constituted. The Tribunal is also the final appellate matters and require the parties to produce proof of pre- authority hearing appeals from the orders of the deposit. This has prevented unfair advantage of parties. Commissioner (Appeals). Appeals from the orders 4.10.2.2 Despite various constraints including several passed by the Tribunal are filed before the Hon'ble vacancies of Members and subordinate staff, the appeals Supreme Court on Classification and Valuation issues are disposed in a consistent manner. A sample statement as they have all India ramification. showing institution and disposal of appeals of the current 4.10.2 Highlights of the performance and financial year is given below: Total Pendency as on Year Institutions Disposal 1.11.2020 April 2020 to October 2020 3077 2538 74575 4.10.2.3 The process of online filing of appeals and CESTAT, has been constituted. So far, no complaint has online payment of appeal fee is undertaken by NIC. been received by the committee. Information is uploaded on the website of the Tribunal 4.10.2.7 The Tribunal is trying to strictly adhere to the for the sake of transparency in administration. All orders provisions of FRBM Act. All expenditures are limited to including daily orders of the Tribunal are also uploaded the budget allocated for the Tribunal. The Members of besides real time display of item number taken by the the Tribunal are being sent on official tour to other Bench which is available both in the website and display benches where there are vacancies. Though the boards installed in the premises. Members are entitled for travel by Business class, they 4.10.2.4 The whole north eastern region is are requested to travel by economy class to which they conveniently placed under the jurisdiction of Kolkata oblige as part of austerity measures. In spite of escalation Bench. However, the indirect tax litigation from N.E. region in prices of various items/ services and the function of is relatively less. additional benches, the expenditure is restricted to the granted ceiling. Sincere efforts have been done to control 4.10.2.5 All facilities as required by the Government the expenditure with financial propriety and in respect of weaker sections including differently abled reasonableness. and SC/ST are strictly followed and extended to the eligible candidates/Staff. 4.11 Authority for Advance Ruling Division 4.11.1 Customs, Central Excise & Service Tax 4.10.2.6 All facilities are being extended to female Settlement Commission employees of this Tribunal as per O.M. No.13018/4/2009- Estt.(L) dated 08/07/2009 of DOPT. To redress the 4.11.1.1 Highlights of the Performance and grievances of women, a complaint committee under the achievements of the Commission during the Year is Chairperson of Hon'ble Rachna Gupta, Member (J), given below: No. of applications received No. of applications disposed of Duty Settled (Rs. in crores) (upto November,2020) (upto November, 2020) (upto November, 2020) 163 198 121.80 202Department of Revenue III 4.11.1.2 Function & Working of the Organization. in the Ministry of Finance. The Central Government have constituted the The Settlement Commission has been set up Customs & Central Excise Settlement Commission under to expedite recovery of Customs, Central Excise & section 32 of the Central Excise Act, 1944 vide Notification Service Tax revenue locked up in adjudication No. 40/99-CX(NT) dated 09.06.99 and 41/99-CX(NT). proceedings. It offers a one-time opportunity to tax payers The Commission consists of a Principal Bench presided to make a true and full disclosure of their liabilities. over by the Chairman at New Delhi and 3 Additional Settlement Commission has also been empowered to Benches at Chennai, Mumbai and Kolkata presided over grant immunities from penalty and from prosecution, thus by Vice Chairman with 2 Members in each Bench. The offering an opportunity to tax payers to settle the disputes Commission functions under the Department of Revenue expeditiously. 4.11.1.3 Year-Wise Performance/achievements of the Settlement Commission: Disposal No. of Year Applications No. of No. of Application Duty settled (Rs. Received Applications Settled in Crore) Rejected 1999-2000 3 1 - - 2000-01 327 28 146 21.28 2001-02 559 63 153 26.64 2002-03 656 105 365 187.51 2003-04 753 141 431 114.04 2004-05 1273 205 1143 181.25 2005-06 1587 283 1207 129.09 2006-07 1960 219 1434 239.02 2007-08 1596 369 2274 507.92 2008-09 857 124 569 125.43 2009-10 723 68 599 67.36 2010-11 885 103 770 114.33 2011-12 959 247 702 462.48 2012-13 1610 74 934 198.06 2013-14 1623 156 1680 482.99 2014-15 1525 353 1469 743.32 2015-16 1262 208 1154 654.31 2016-17 844 174 814 1037.13 2017-18 563 116 488 428.95 2018-19 535 73 417 291.06 2019-20 257 39 249 243.49 2020-21 163 18 198 121.80 (Up to Nov.20) Total 20520 3167 17196 6377.46 203Annual Report 2020-2021 4.11.2 Income Tax Settlement Commission 4.11.2.5 Each bench has three Members. The Principal is presided over by the Chairman and each Additional 4.11.2.1 The Income Tax Settlement Commission (ITSC) Bench is presided over by Vice Chairman. The Chairman was set up in pursuance of the recommendations of the is of the rank of a Secretary to Government of India. The Wanchoo Committee (1971) w.e.f. 01.04.1976. It is an Vice-Chairman and the Members are of the rank of an Alternate Disputes Resolution (ADR) body within the Additional Secretary to the Government of India. Members realm of Direct Taxes for settlement of Income Tax and of the Commission are appointed from the serving Chief Wealth Tax cases. The main objective for setting up of Commissioners of Income Tax or of equivalent rank. The this commission was to give a statutory basis for senior most Member of every Bench, other than the settlement of cases in the interest of revenue. The Principal Bench is called Vice-Chairman of the respective Settlement Commission was established as a forum of Bench. The Chairman in the Principal Bench is appointed mediation in place of litigation. The aim was to move the from amongst the serving Members of the Commission conflicting parties to a consensus than subjecting them having a minimum remaining service of six months on to adversarial procedure inherent in regular administration the date of notifying the vacancy for the post of Chairman of justice. This was envisaged as an institution for of the Commission. statutory arbitration. 4.11.2.6 An assessee is required to make an application 4.11.2.2 The objective behind this institution is aptly to the Settlement Commission in the prescribed form to summarized in the oft-quoted passage from the report of get his case settled. He has to disclose Additional Income the Wanchoo Committee as under: not disclosed before the assessing officer and the Additional Tax Payable on the Additional Income should "This, however, does not mean that the door for be more than Rs. 50 lakhs in search cases and Rs. 10 compromise with an errant tax payer should forever lakhs in other cases. The applicants are required to pay remain closed. In the administration of fiscal laws, whose the Additional Tax together with the interest before filing primary objective is to raise revenue, there has to be room the application in the Settlement Commission. The for compromise and settlement. A rigid attitude would not Commission then decides upon the admissibility of the only inhibit a one-time tax evader or an un-intending defaulter from making a clean breast of his affairs, but application and in case of admitted applications, the also unnecessarily strain the investigational resources Commission carries out the process of Settlement in a of the Department in cases of doubtful benefit to revenue, time bound manner by giving opportunity to both the while needlessly proliferating litigation and holding up parties. An Application filed before the Commission, if collections". admitted, is required to be disposed of by the Settlement Commission within 18 months from the date of filing of 4.11.2.3 The Settlement Commission has seven benches as under: - the application. The Commission has wide power of (i) One Principal Bench and Two Additional granting immunity from penalty and prosecution under Benches at New Delhi. the Income Tax Act, 1961 and Wealth Tax Act, 1957, (ii) Two Additional Bench at Mumbai. which in usual course, would involve prolonged litigation (iii) One Additional Bench at Kolkata. between the department and the taxpayer. An order (iv) One Additional Bench at Chennai. passed by the Commission is final and conclusive. At present the benefit of the Settlement mechanism can be 4.11.2.4 The Commission comprises Members who are availed by a tax payer only once in life-time, who has appointed by the Central Government from amongst the made the first application as on or after 1st June, 2007. persons of integrity and outstanding ability, having special Further details about the Commission are available on knowledge of and experience in problems relating to the its Website. direct taxes and business accounts. 4.11.2.7 A statement showing the number of Application files and disposal of is as under: Disposal and Pendency of cases u/s 245 D (4) FY Pendency of the cases at the Addition during Disposal during Pendency of the Beginning of the year the year the year cases at March end F.Y.2016-17 598 519 541 576 F.Y.2017-18 576 478 384 670 F.Y.2018-19 670 403 461 612 F.Y. 2019-20 612 512 384 840 2020-21 840 35 115 760 (till October, 2020) 204Department of Revenue III 4.11.3 Authority for Advance Rulings Body. Government is represented by the Secretary (Revenue), Secretary (Economic Affairs) and Chief 4.11.3.1 With a view to avoiding dispute in respect of Economic Adviser of the Ministry of Finance. There are assessment of Income-tax liability in the case of non- three eminent Economists and representatives of FICCI residents (and also specified categories of residents), a and ASSOCHAM on the Governing Body. There is an Scheme of Advance Rulings has been incorporated in Academic Committee advising the Director. Chapter XIX-B of the Income-tax Act. The Authority for Advance Rulings (AAR) pronounces rulings on the 4.12 Revision Application Unit applications of the non-resident/residents and such 4.12.1 Formation, function and working of the rulings are binding both on the applicant and the Income- Revision Application Unit tax department. Thus, the applicant can avoid expensive and time consuming litigation on any question of law or 4.12.1.1 The mandate of the Revision Application Unit fact which might arise from normal Income-tax is to dispense justice. Under the scheme operative till assessment proceedings. Similar provisions for obtaining 10.10.1982, the appeal against the orders of the an advance ruling are contained in Chapter V-B in the Commissioners (then called Collectors), of Customs & Customs Act, 1962. The scheme of Advance Rulings Central Excise lay with the Central Board of Excise & allows eligible persons to seek clarity on tax liability before Customs. As far as the appeals against the orders passed venturing into a particular taxable activity. Pursuant to by the authorities below the rank of the Collectors (now the Finance Act, 2017, the AAR constituted under Income called Commissioners), were concerned, the same were Tax Act 1961 is acting as AAR for Customs legislations. to be filed before the appellate Collectors of Customs & However, this Authority has been converted into an Central Excise. Erstwhile Section 131 of the Customs Appellate Authority for ruling under the Customs Act Act, 1962 and Section 36 of the Central Excise & Salt passed by the new Authority named Customs Authority Act, 1944, empowered the Central Government to revise for Advanced Rulings created under Finance Act, 2018. the orders passed by the CBEC and appellate Collectors in exercise of their appellate jurisdiction. At the 4.11.3.2 There are three benches of the Authority - Government level, while Secretary (Revenue) or Special Principal Bench at Delhi having jurisdiction over applicants Secretary disposed of the Revision Applications against residing in the Union territory of Delhi and non-residents orders passed by the CBEC, and the Addl. Secretary or who do not have offices in India, NCR Bench at Delhi Joint Secretary disposed of the applications against the having jurisdiction over northern and eastern States and orders passed by the appellate Collectors of Customs & Mumbai Bench having territorial jurisdiction covering Central Excise and executive Collectors of Customs and central and southern States. Central Excise. The Finance (No. 2) Act, 1980 sought to 4.11.3.3 The Authority for Advance Rulings has also introduce a new system by establishing appellate Tribunal. been notified vide Notification dated 17.03.2005 (as The appellate jurisdiction of CBEC and Revisionary amended by Notification dated 07.06.2005) as Central jurisdiction of the Central Government were abolished Sales Tax Appellate Authority to settle Inter-State disputes with effect from 11.10.1982, except a few residual falling under Section 6A read with Section 9 of the Central transitional provisions and the Customs, Excise and Gold Sales Tax Act, 1956. It started functioning as CSTAA w.e.f. Appellate Tribunal (now CESTAT) was set up with effect 01.03.2006 vide Notification dated 03.02.2006. from 11.10.1982. The Finance Act, 1984, revived the Revisionary powers of the Central Government in 4.11.4 National Institute of Public Finance and specified type of cases. On the Customs side, Section Policy (NIPFP) 129 DD read with proviso to Section 129(A) of the Act, 4.11.4.1 The NIPFP is a premier research empowered Central Government to revise the appellate organization for conducting research, policy advocacy, orders passed by the Commissioner of Customs and capacity building activities in the field of public finance (Appeals). On Central Excise side, Section 35EE read and policy. Established in 1976 as an autonomous with first proviso to sub-section (ii) of Section 35B of the institution under the Societies Registration Act, 1860 the Central Excise Act, 1944 gave review and revisionary Institute has made significant contribution to policy powers to Central Government to revise the orders reforms at all levels of Government of India. The NIPFP passed by the Commissioner of Central Excise (Appeals). provides research, engages in policy advocacy and 4.12.1.2 On the Service Tax side the two provisos capacity building on public finance and policy. inserted in sub-section (1) of Section 86 of the Finance 4.11.4.2 The Governing Body is chaired by an Act 1994 vide Section 117 of the Finance Act 2015 (with Economist of Eminence and at present Dr. Urjit Patel, effect from 14.5.2015) stipulate that where an order, former Governor of RBI, is the Chairman of the Governing relating to a service which is exported, has been passed 205Annual Report 2020-2021 under section 85 and the matter relating to grant of rebate (b) A rebate of duty of excise on goods exported to of service tax as input service, or rebate of duty paid on any country or territory outside India or on inputs, used in providing such service, such order shall excisable materials used in the manufacture of be dealt with in accordance with the provisions of section goods which are exported to any country or 35EE of the Central Excise Act 1944. All appeals in such territory outside India; matters pending before the Appellate Tribunal shall also (c) Goods exported outside India (except to Nepal be transferred and dealt with in accordance with the or Bhutan) without payment of duty. provisions of Section 35 EE of the Central Excise Act 1944. 4.12.2.3 Service Tax jurisdiction - The provisions of Section 35EE of the Central Excise Act 1944, which dealt 4.12.1.3 The Revision Applications filed either by with revision by the Central Government, have been made parties or department against the orders of Commissioner applicable to Chapter-V of the Finance Act, 1944 dealing (Appeals) are considered and decided by Additional with Service Tax. In the Finance Act 2015, the Section Secretary (RA). The Central Government is the highest 86 has been amended to prescribe that the remedy authority in such revision and review matters and orders against the order passed by Commissioner (Appeals) in thus passed by the Additional Secretary (RA) are final. a matter involving rebate of Service Tax, shall lie in terms Petitioners, aggrieved with the revision order passed by of Section 35EE of the Central Excise Act 1944. In such Additional Secretary (RA) may take re-course to writ cases against the order passed by the Commissioner petitions under Article 226 of Constitution of India. (Appeals), revision application is required to be filed 4.12.1.4 The Revision Application Unit is directly before AS (RA). responsible to Secretary (Revenue). 4.12.2.4 IATT jurisdiction - Rule 13 of Inland Air 4.12.2 Jurisdiction Travel Tax (IATT) Rules, 1989 empowered the Central Government to revise or review the appellate orders 4.12.2.1 Customs jurisdiction - Section 129 DD read passed by Commissioner of Customs & Central Excise with proviso to Section 129 A (1) of Customs Act, 1962 (Appeals) if such order related to payment of IATT. empowers the Central Government to revise or review the appellate orders passed by Commissioner of Customs 4.12.2.5 FTT jurisdiction - Rule 15 of Foreign Travel (Appeals) if such order related to:- Tax (FTT) Rules, 1979 empowered the Central Government to revise or review the appellate orders (a) Any goods imported or exported as baggage; passed by Commissioner of Customs & Central Excise (b) Any goods loaded in a conveyance for (Appeals) if such order related to Payment of Foreign importation into India, but which are not unloaded Travel Tax. at their place of destination in India, or so much 4.12.3 Process of the quantity of such goods as has not been unloaded at any such destination if goods The Revision Application Unit receives the revision unloaded at such destination are short of the application in prescribed form EA-8/CA-8 filed by quantity required to be unloaded at the department as well as parties. The stipulated time for destination; filing such applications is 90 days from the date of communication of order-in-appeal. Delay up to 90 days (c) Payment of drawback as provided in Chapter X can be condoned by Central Government in deserving and the rules made there under. cases. The Revision Application Unit on receipt of revision applications issues the acknowledgement to the applicant 4.12.2.2 Central Excise jurisdiction - Section 35 EE along with deficiency memo if any deficiency is found. read with proviso to Section 35 B (1) of Central Excise Simultaneously, a check-list in prescribed format is also Act, 1944 empowered the Central Government to revise prepared. Notice is issued to respondent party for filing or review the appellate orders passed by Commissioner counter reply. Thereafter, personal hearing is fixed / held of Central Excise (Appeals) if such order related to: in cases, in the order of seniority. Out of turn hearings (a) A case of loss of goods, where the loss occurs are allowed only in deserving cases involving substantial in transit from a factory to a warehouse or to revenue, recurring issues resulting into multiplicity of another factory, or from one warehouse to cases, interest liability, the issue is no longer res integra, another or during the course of processing of passenger is going abroad and in cases of financial the goods in a warehouse or in storage, whether hardship. After completion of hearing, final revision order in a factory or in a warehouse; is issued by Additional Secretary (RA). 206Department of Revenue III 4.12.4 Latest Developments Tax Law. The Revision Application unit was earlier headed by 4.13.2 The National Committee for Promotion of Social a Commissioner and ex-officio Joint Secretary. The and Economic Welfare is constituted by the Central working of this set-up was stayed by an order of Punjab Government for a term of (03) three years and consists & Haryana High Court, upheld by the Apex Court also, of 14 Members including its Chairman. The Government whereby it was directed that an officer of a higher rank appoints former Chief Justice of India as Chairman of than the Joint Secretary be posted as the orders of the Committee and other 13 persons of public eminence, Commissioner (Appeals) are being revised and an officer hailing from various walks of life, as Members of the of the same rank cannot revise these orders. Committee. So far 9 such Committees have been Subsequently, an officer of the rank of Principal constituted, all headed by a retired Chief Justice of India. Commissioner and ex-officio Additional Secretary was posted in Aug, 2017 and an additional office of Additional 4.13.3 In this context, it may be stated that Section Secretary (R.A.) was created at Mumbai to reduce the 35AC of IT Act, as amended by the Finance Act, 2016, pending cases which got piled up during the period of provides that no deduction under this section shall be stay. The office at Delhi caters to Northern and Eastern allowed in respect of any assessment year on or after regions while the Mumbai Unit takes up the cases 1st April, 2018. Accordingly, the benefit of deduction under pertaining to Southern and Western regions. Section 35AC of Income tax Act was available only up to previous year ending 31.3.2017 (Assessment year 2017- 4.13 NATIONAL COMMITTEE FOR PROMOTION 18) in respect of payment made to association or OF SOCIAL AND ECONOMIC WELFARE institution already approved by the National Committee 4.13.1 The Government of India constituted the for carrying out any eligible project or scheme and as National Committee for Promotion of Social & Economic such no deduction u/s 35AC is available after 31.3.2017 Welfare in 1992 for recommending the projects for (F.Y.). promotion of sports, social and economic welfare, 4.13.4 In view of above, the 9th National Committee pollution control, etc. received from Trusts/ Institutions, for Promotion of Social and Economic Welfare was to the Central Government for Notification under Section reconstituted and subsequently notified on 31st March, 35 AC of Income Tax Act, 1961. The funding of the approved projects is through donations on which the 2017 and the extended tenure is till 31st March, 2020. donors are entitled to 100% deduction under the Income The composition of the Committee is as follows: S. No. Name of the Committee Members Designation Place 1. Justice Mr. R.C. Lahoti, Chairman Noida, Uttar Pradesh former Chief Justice of India 2. Shri Amardeep Singh Cheema Member Batala, Punjab 3. Shri Amiya Kumar Sharma Member Guwahati, Assam 4. Shri Baldev Chowdhary Member Lucknow, Uttar Pradesh 5. Smt. Chetna Sinha Member Satara Maharashtra 6. Shri D.R. Mehta Member Jaipur, Rajasthan 7. Shri Enrico Piperno Member Kolkata, West Bengal 8. Shri Habib A. Fakih Member Mumbai, Maharashtra 9. Prof. Naladi Samuyelu Member Guntur, Andhra Pradesh 10. Dr. Naresh Gupta Member New Delhi 11. Shri Sanjiv Kumar Arora Member New Delhi. 12. Smt. Shameema Raina Member Srinagar, J&K. 13. Smt. Shashikala Vamanan Member Chegalpattu, Tamil Nadu. 14. Shri Vinayak Lohani Member Kolkata, West Bengal 4.13.5 The functions and procedures of the National organizations recommended by the National Committee Committee are governed by Rules 11-F to 11-O of the and accepted by the Central Government are notified in Income Tax Rules, 1962. The procedure of filing the the Official Gazette. In cases where the National application and the manner in which the applications are Committee does not recommend the scheme or project to be considered and decided by the National Committee for approval, the decision of the Committee is are enumerated in Rules 11-L and 11-M of the Income communicated to the applicants by the Secretariat of the Tax Rules, 1962. The projects/schemes of the institutions/ National Committee. 207Annual Report 2020-2021 5. Integrated Financial Unit (IFU) (b) Procurement of goods and services including procurement of anti-smuggling equipment i.e. Integrated Finance Division of the Department scanners and marine vessels. of Revenue is under the direct supervision of Addl. Secretary & Financial Advisor (Finance). There are three (c) Proposals for deputation abroad of officers of the units dealing with budget, finance and expenditure Department, CBDT, CBIC and their field offices. management in respect of the grants pertaining to (d) Restructuring proposals, redeployment of Department of Revenue, Direct Taxes and Indirect Taxes. personnel in field formations and constituent Director (Finance), D/o Revenue/GST & Customs and units. Director (Finance), Direct Taxes/Expenditure assist the Addl. Secretary & Financial Advisor (Finance). (e) Comprehensive Computerization of Department of Revenue, its field formation including Customs 5.1 Activities undertaken by the Integrated and GST formations and Income Tax field Financial Unit: formations. All offices under the Department of Revenue, (f) Proposals from Committee of Management which inter-alia include Revenue headquarters, Central (COM), D/o Revenue which oversees the Board of Direct Taxes (CBDT), Central Board of Indirect functioning of Government Opium & Alkaloid Taxes & Customs (CBIC), Narcotics Control Division, Works (GOAWs). Central Bureau of Narcotics, Chief Controller of Factories, Central Economic Intelligence Bureau, Financial (g) Grants-in-aid to National Institute of Public Intelligence Unit (FIU-IND), Goods & Service Tax Council Finance & Policy and Central Revenue Sports & Secretariat, Enforcement Directorate, Customs, Excise Cultural Board. & Service Tax Appellate Tribunal (CESTAT), Settlement Commission (IT/WT), Authority for Advance Rulings, (h) Proposals for Delegated Investment Board (DIB), Appellate Tribunal for Forfeited Property, Adjudicating Public Investment Board and Cabinet Committee Authority under PMLA, National Committee for Promotion on Economic Affairs (CCEA) relating to of Social & Economic Welfare, all field offices of Income comprehensive computerization plan of CBDT/ Tax Department which include Directorate General of CBIC, capital expenditure involving construction Income Tax (Systems), Directorate General of Income of office/residential complexes and readymade Tax (Legal & Research), Directorate of Income Tax (O&M office/residential buildings of all the three Services), Directorate of Income Tax (Infrastructure), Departments. National Academy of Direct Taxes and other field offices (i) Proposals received for sanction of financial under the Central Board of Direct Taxes, all field offices assistance from the Customs & Central Excise under Central Board of Indirect Taxes & Customs which Welfare Fund and Special Equipment Fund. include Directorate General of Systems & Data Revision of norms were finalized in respect of Management, Directorate General of Human Resource setting up of/refurbishing of recreation/ sports Development, Directorate of Revenue Intelligence, clubs, gymnasiums, Departmental Canteens, Directorate General of Goods and Service Tax crèches for children of Departmental officials, Intelligence, Directorate General of Goods and Service guest houses and cash award scheme for Tax, National Academy of Customs, Indirect Taxes & meritorious children with special emphasis on girl Narcotics, etc., are serviced by the three units of children and children of group ‘D’ staff. Integrated Finance Division in terms of Budget formulation, fund allocation, expenditure monitoring & (j) Schemes proposed by CBDT/CBIC for utilizing control, enforcing economy, scrutiny and sanction of the budget provision under 1% Incremental expenditure proposals beyond the delegated powers of Revenue Incentive Scheme for obtaining field offices. approvals of the competent authority. 5.2 Details of expenditure and financial proposals (k) Proposals involving relaxation/interpretation of scrutinized and approved: financial rules and all proposals requiring reference to the Department of Expenditure. (a) Creation and continuation of posts, construction/ purchase/hiring of offices, as well as residential 5.3 The expenditure budget/non-tax revenue receipts accommodation for the field formations of Central of Department of Revenue, Direct Taxes and Indirect Board of Indirect Taxes & Customs and Central Taxes for BE 2020-21 was prepared. RE 2020-21 and Board of Direct Taxes, Department of Revenue BE 2021-22 ceiling has been finalized and communicated and its attached offices. by the Budget Division, Department of Economic Affairs. 208Department of Revenue III The Details of RE 2020-21 and BE 2021-22 in respect of 6. Implementation of Official Language all the three grants are as below: Policy (Rs. in crore) 6.1 The Department of Revenue has a full-fledged Grant Gr. No. 2020-21 2021-22 Official Language Division which is entrusted with the task BE RE BE of implementing the Official Language Policy of the D/o Revenue 31 272250.83 272454.75 201512.64 Government of India. The Division is headed by a Director Direct Taxes 32 8065.39 7694.00 8532.34 (OL) and operates through four Official Language Indirect 33 8258.50 7582.47 21359.27 Sections; each headed by an Assistant Director (OL) and Taxes supervised by two Deputy Directors (OL). The Division deals with matters relating to implementation of Official 5.4 Integrated Finance Division has taken the Language Policy of the Union and takes follow up action following steps/initiatives in 2020-21: on the orders and instructions issued by the Department of Official Language from time to time. Entire translation (i) Implementation of Cash Management Plan as work of the Department from English to Hindi and vice- per Monthly Expenditure Plan (MEP) and versa is ensured by the Official Language Division. Quarterly Expenditure Allocations (QEA) as The Department of Revenue is notified under envisaged by Budget Division of Department of Rule 10(4) of the Official Language Rules, 1976. 30 Economic Affairs, Ministry of Finance. sections of the Department have been specified for doing their entire work in Hindi. (ii) Review of Monthly and Quarterly Expenditure vis- à-vis budgetary allocations and MEP/QEA and 6.2 Performance of the OL Division during the report to Revenue Secretary and Expenditure year under report: Secretary in compliance to the guidelines of the a. All the documents pertaining to CBIC, CBDT & Department of Expenditure, Ministry of Finance Revenue HQs were invariably issued bilingually for strict financial discipline. as per the requirement under Section 3(3) of the Official Languages Act, 1963; (iii) Review of specific activities/developments of b. All gazette notifications, replies to Parliament Department of Revenue and report to Secretary Questions and Assurances pertaining to CBIC, (Expenditure) on monthly basis. CBDT and Revenue HQs were furnished bilingually; (iv) Enforcement of instructions on economy in c. Notes and monthly summaries for the Cabinet, expenditure by periodic review of expenditure and Action Taken Reports (ATRs) on the Report of advisories to spending authorities for expenditure the Comptroller & Auditor General of India, Annual Report and Outcome Budget of the control in line with the economy instructions Ministry of Finance were translated and made issued by the Department of Expenditure. available bilingually; (v) Preparation and budgetary allocation for d. A number of Double Tax Avoidance Agreements Compensation to States/UTs for revenue loss on entered into with various countries were roll out of GST; Government Opium & Alkaloid translated into Hindi; and Works; Acquisition of residential and office e. Website material received from all the sections accommodation; Strengthening of IT capability of the Department of Revenue (HQs), CBDT and for e-governance of CBIC, CBDT and CBIC was translated into Hindi and uploaded on Department of Revenue; Acquisition of ships and the Ministry’s website. fleets to strengthen Marine capability & 6.3 Hindi Salahakar Samiti and OLIC meetings: Acquisition of Anti-Smuggling equipment. Action has been taken for formation of Sanyukt 5.5 In addition, the allocation and monitoring of the Hindi Salahakar Samiti of the Departments of Revenue, Expenditure and Investment & Public Asset Management budget relating to advances, viz. House Building Advance, and Office of the Comptroller and Auditor General of India. Computer Advance etc. were also done. 6.4 Inspection by Parliamentary Committee on 5.6 The Integrated Finance Division has also been Official Language: entrusted with the formulation of schemes of important Parliamentary Committee on Official Language expenditure proposals from their initial stage. It also inspected two subordinate offices of Department of Revenue follows up with the Department/Boards for the settlement located in New Delhi. The officers of official language Division of audit objections, inspection reports, draft audit paras facilitated successful inspections of these offices despite and reports of PAC/Standing Committee. the prevailing Corona-19 epidemic scenario. 209Annual Report 2020-2021 6.5 Official Language Inspections: 7. Implementation of the Right to Information Act, 2005 The officers of the Hindi Division of the Department also carried out inspections of 07 sections 7.1 Revenue Headquarters of Headquarters and 07 Subordinate Offices under the control of the Department of Revenue during the year In order to facilitate dissemination of information under report with the view to assess the progress in use under the provisions of the Right to Information Act, 2005, of Hindi in the office and suggested ways to accelerate Department of Revenue has initiated the following action: the use of Hindi in the official work. (i) During the year, the Department continued efforts 6.6 Hindi Day/ Hindi Pakhwara: towards full implementation of the Right to Information Act, 2005. As per instructions of On the occasion of Hindi Day, a message was Department of Personnel & Training (DOP&T) issued by the Hon’ble Finance Minister and Honourable on suo-motu disclosure, details of the Home Minister exhorting all the officers/employees of the Department to do their maximum official work in Hindi. Department’s functions along with its functionaries etc. have been placed on the RTI Hindi Pakhwara was celebrated from 14 portal of the Department’s website (https:// September, 2020 to 30 September, 2020. Various dor.gov.in/rti/revenue-headquters) as required competitions like Hindi noting & drafting, Essay writing, under section 4(1) of the RTI Act. Extempore Speech competition, Quiz competition, Hindi typing and Hindi Shorthand competition were organized (ii) Meeting to discuss the strategy for conducting during the Hindi Pakhwara. Also, there was an award the Sample Audit held on 04.02.2020 at Central scheme for doing maximum work in Hindi during the Hindi Information Commission (CIC) was attended by fortnight for the gazetted officers, Hindi speaking non- Director (NC). gazetted officers as well as the non-Hindi Speaking non- gazetted officers separately. Those who secured first, (iii) In regards to the Third-Party Audit, the self- second and third positions in these competitions have appraisal form submitted has been audited by been given cash prizes of Rs. 5000/- (First prize), Rs. the National Institute of Public Finance & Policy. 3000/- (Second prize) and Rs. 2000/- (Third prize) and The CIC after perusal of the audit report has also 3 consolation prizes of Rs. 1000/- each were given. issued an advisory to the Revenue Headquarters which is under consideration. 6.7 Training: (iv) To facilitate contactless and paperless filing of During the year 2020-21, 01 JSA/ 01 JTO/ 5 MTS RTI Application/Appeals, the RTI online portal and 5 Stenographers were nominated for training in Hindi typing and Hindi stenography respectively in the courses (www.rtionline.gov.in) has been very convenient run by the Central Hindi Training Institute, Ministry of in this regard. The replies to the RTI Application Home Affairs. and Appeals are uploaded on the portal which may be viewed exclusively by the Applicant/ Department of Official Language conducted 5 Appellant. days online training programme on ‘Kanthasth- a memory based translation software’ in October, 2020. 5 Senior (v) The following table indicates the number of RTI Translation Officers and 2 Junior Translation Officers of Applications and Appeals received in the financial this department participated in the training programme. year 2020-21 up to 30.09.2020: Type No. of Applications received No. of Cases Request Request/ during the year 2020-21 transferred to other rejected Appeals including cases transferred PAs u/s 6(3) + returned accepted to other Public Authorities to the Applicant Offline RTI Applications 69 37 0 35 Online RTI Applications 2824 2410 1 306 Offline Appeals 7 0 0 9 Online Appeals 97 47 0 35 Total fee received offline u/s 7(1) is Rs. 380/- Additional fee received offline u/s 7(3) is Rs. 434/- 210Department of Revenue III 7.2 Central Board of Indirect Taxes & Customs manner and an appellate authority who adjudicates the (CBIC): applications filed before him. RTI applications to CPC can be filed through online mode also. 7.2.1 Directorate General of Taxpayer Services (DGTS): 7.3.2 Vigilance 7.2.1.1 This Directorate is the nodal agency under CBIC i. Mandatory information as stipulated in Section 4 to monitor the progress of filing of quarterly returns by of the RTI Act has been displayed on the weblink public authorities under CBIC on the website of Central of DGIT (Vig) at www.incometaxindia.gov.in. Information Commission (CIC) as required under Section Monthly disposal is also being displayed on the 25(2) of the RTI Act, 2005. It was ensured that all the weblink as desired by the DoP&T. Quarterly field formations under CBIC uploaded their RTI Quarterly Returns on the CIC website. During the period, Report is uploaded timely on the website of the applications received under the RTI Act, 2005 were CIC. efficiently handled. Public Grievances received by this ii. Details of RTI applications for the period April Directorate were processed/forwarded to the appropriate 2020 to Nov. 2020. formations for further action. 7.2.1.2 TAXPAYER SERVICE CENTRES Item Disposal One of the mandates of DGTS has been to set RTI Applications 170 up Taxpayer Service Centres in all Commissionerates. Vigorous follow-up has ensured setting up of Taxpayer RTI First Appeals 33 Services Centers in the Commissionerates of Central Tax, Customs & Central Excise. 7.2.1.3 PUBLIC GRIEVANCE OFFICERS 7.4 Narcotics Control (NC): Public Grievance Officers have been designated 7.4.1 Central Bureau of Narcotics (CBN): in all the Commissionerates across the country and details are available on CBIC website. The Citizens’ Charter Various provisions of Right of Information Act, provides for appeal to superior officer in the event of 2005 have been implemented in the Central Bureau of unsatisfactory response from Public Grievance Officer. Narcotics in the year 2005. Unit-wise information of Accordingly, contact details of the superior officer have CPIO’s and First Appellate Authorities appointed at also been posted on the website for the benefit of present is as follow: taxpayers. S. Headquarters MP Raj. UP 7.2.1.4 PUBLICATIONS No. Gwalior Unit Unit Unit The Directorate brought out following publications 1 CPIO 1 17 8 2 at the behest of CBIC and other formations: 2 FAA 1 1 1 1 7.2.1.5 Taxpayer Information Publications: Further, it is to apprise that the application i. Till 30.11.2020 received under RTI section are dealt with the RTI Act Civil List, 2020 (As on 01.01.2020); CRCL and are disposed off in the time limit. Detailed functions Brochure; Service Quality Manual-2019; Citizens’ and various aspects of the work done by the Department Charter; Duty Drawback Schedule,2019; are also available on CBN website http://www.cbn.nic.in. ii. Projection from 01.12.2020 to 31.03.2021 7.4.2 Chief Controller of Factories (CCF): DGHRD posters; SS and WS Booklet; Sampark, A cell in each unit of this organization, such as 2021; Civil List 2021; Pocket Sampark 2021 the factories at Ghazipur and Neemuch, as also at the Delhi office of the CCF have been set up. These cells 7.3 Central Board of Direct Taxes (CBDT): function directly under the officials designated as CPIO/ APIO. The applications received are regularly disposed 7.3.1 Directorate of Systems off within the prescribed time-frame. 7.3.1.1 Project Name: Project Name: CPC, Bengaluru 7.5 Customs, Excise & Service Tax Appellate The CPC has put in place proper administrative Tribunal (CESTAT): mechanism to deal with the applications filed under Right The Central Public Information Officer and the to Information Act 2005 with a CPIO who handles the Appellate Authority have been nominated by the Public applications and dispose of the same in a time bound 211Annual Report 2020-2021 Authority in all Benches of the Tribunal, and they are technology and to promote trade facilitation. Various acting in accordance to the provisions of the Right to initiatives/projects undertaken during the year 2020-21 Information Act, 2005, in dispensing the information. All are: RTI applications and orders including orders of the 8.1.3.1 Sea Cargo Manifest & Transhipment Appellate Authority are uploaded on the website. Regulations (SCMTR, 2018) 7.6 Income Tax Settlement Commission (ITSC): Advance intimation of the cargo destined for India or leaving India allowing pre arrival processing of The Settlement Commission is very sensitive to documents and Customs procedures is intended under the implementation of the RTI Act, 2005. In the all seven SCMTR. This involves electronic exchange of information Benches including Principal at New Delhi. The JDI/ADI in real time from various stakeholders involved in and Administrative Officer has been designated as CPIO Customs logistics chain. under the said Act. The Secretary and Director of Income Tax (Investigation) who is equivalent to the Joint Secretary 8.1.3.2 EDI enablement of remote Customs stations to the Government of India in each Bench has been at land borders and bringing them on board designated as Appellate Authority under the said Act. the Customs EDI Systems 7.7 Authority for Advance Rulings (AAR): EDI enablement of remote Customs stations at land borders and bringing them on-board the Customs Replies to the RTIs received in this office are EDI Systems is under process. During the year, five(05) given promptly by the CPIO and the Appellate Authority Customs locations have brought on EDI platform. As on has been appointed in this office under the RTI Act. date, there are total 251 Customs sites which are working on EDI platform. 8. E-governance activities 8.1.3.3 ICETAB 8.1 Central Board of Indirect Taxes & Customs ICETAB provides the shed officers mobile access (CBIC): to the ICES application. The aim is to facilitate the Shed officers in the examination of cargo and help them submit 8.1.1 Drawback: their examination report in ICES immediately on To promote paperless transaction and improve completion of the examination. With the use of ICETAB, delivery of public services, section 51B has been the entire examination process is expected to become inserted in Customs Act, 1962, so as to provide for paperless and significantly faster. creation of an electronic duty credit ledger in the customs 8.1.3.4 IGST Refunds Process enable for Courier SBs automated system and for the manner of its utilisation. in ICES The duty credit maintained in the electronic duty credit ledger may be used towards making payment of duties Module for automated processing of IGST refunds for exports through courier shipments has been payable under this Act or under the Customs Tariff Act, enabled in Customs EDI Systems. 1975 (51 of 1975) in such manner and subject to such conditions and restrictions and within such time as may 8.1.3.5 Streamlining of UQCs in Bills of Entry and be prescribed. Shipping Bills 8.1.2 Directorate General of Taxpayer Services Many importers and exporters use Unit Quantity (DGTS): Codes(UQCs) like BGS, BTL, BOX, CTN, GGR, HPT, KPC, ODD and DRM etc. which are neither stipulated in The Directorate has carried out media campaigns the Customs Tariff Act nor prevalent in the normal highlighting enhanced ease of doing business as part of business transactions. These non-convertible/ e-governance/online initiatives like ICEGATE & ACES. inappropriate UQCs lead to a poor quality of data capture and related implications. To overcome this issue, Board 8.1.3 Directorate General of Systems & Data had undertaken an exercise towards standardization of Management: Unit Quantity Codes (UQCs) for purposes of export/import E-Office has been initiated in DG Systems for declarations filed on EDI and the same has been facilitation of e-governance activities at DG Systems, New implemented in the declarations filed with the Customs Delhi. Meetings are being held virtually through Web-ex Systems. VPN accounts have been provided to all officers to 8.1.3.6 Container Scanning Module facilitate ‘work from home’ as required. RMS has been selecting containers for scanning The initiatives/projects of DG Systems are aimed at some major ports based on the IGMs filed by the at propagation of E-Governance initiatives by leveraging Shipping Lines. The scan images of these containers and 212Department of Revenue III the remarks/verdict of the scanning officer will be 8.1.3.12 Capturing additional details for Certificate recorded in the scanning machine and will be transmitted of Origin (COO) back to RMS and ICEGATE. The images will get stored As per Customs (Administration of Rules of in the eSanchit application. The remarks will also specify Origin under Trade Agreements) Rules, facility has been whether the container is suspicious or not and the specific enabled in Customs System. quadrants that the shed officer may like to check during examination and conduct a more targeted examination 8.1.3.13 Temporary import of Durable containers accordingly. A facility has been given to Importer to avail the 8.1.3.7 Tariff Related Quota (TRQ) benefit of duty exemption while importing the non- standard durable container with a condition to execute a A provision has been enabled in the Customs re-export bond. Automated System for certain category of goods as A facility has been enabled for Remote Filing of mentioned in CBIC’s notifications 28/2020 dated Cargo Transit Document (CTD) for Nepal bound cargo 23.06.2020 and 40/2020 dated 28.10.2020 where under ICES concessional rate for BCD has been notified for certain items provided that the quantity of total imports of such 8.2 Central Board of Direct Taxes (CBDT): goods in a financial year do not exceed the tariff rate 8.2.1 Computerisation initiatives: quota (TRQ) quantity. DGFT would issue TRQ licenses to eligible importers for these commodities. The IEC and Through comprehensive computerization quantity based TRQ licenses will be transmitted by DGFT initiatives, the department has enabled end-to-end e- electronically to ICEGATE. delivery services that inter alia include: 8.1.3.8 Operationalization of MEIS rewards in ICES • Faceless Assessment issued for e-Commerce exports • E-Payment of taxes DGFT had started issuing MEIS scrips for e- • E-filing of TDS statements Commerce exports made through Courier or foreign post • E-Processing of TDS statements offices. The same have been operationalized in ICES. • E-view of tax credits 8.1.3.9 Operationalization of RoSCTL scheme in ICES • E-filing of Income Tax Returns • E-Processing of Income Tax Returns RoSCTL scheme has been operationalized in the System. All the Shipping Bills where RoSL is opted • E-Matching of tax Credits by the exporter are being transmitted to DGFT for • E-tracking of processing of the Income Tax issuance of RoSCTL scrips. The scrips are issued by Returns DGFT and transmitted electronically to ICEGATE exactly like MEIS. Like MEIS, the RoSCTL scrips also have to • E-Delivery of Refunds be registered only when transmitted electronically from • E-tracking of Refunds DGFT. No manual registration is required. Further, since Therefore, the present initiatives of the RoSCTL scrip is also paperless and transferable like department have made it possible to comply with the tax MEIS, the ownership of the scrip must be verified from obligations without visiting the Income Tax Office on the DGFT’s portal when the same is used in imports for anywhere, anytime basis. This is reflected in the latest duty payment. initiatives of the Department regarding e-Assessment, 8.1.3.10 Manufacturing and other operations in a e-Nivaran and e-Appeal. Thus, the tax payers can Warehouse Regulations (MOOWR) and participate in scrutiny assessment proceedings using e- waiver of interest Assessment facility, get their grievances redressed through e-Nivaran and file appeals online through e- Section 61 of the Customs Act, 1962 prescribing Appeal. no interest on Ex-Bond Bills of Entry filed for clearing the goods for home consumption from a Section 65 8.2.2 Directorate of Income-tax (Research & warehouse has been enabled in Customs System. Statistical Wing): The 12threport of 2nd ARC is aimed at Citizen 8.1.3.11Unclaimed Cargo Module in ICES Centric Governance. The advent of modern technology A new module has been developed in ICES for has brought in the concept of E-Governance. The setting monitoring expeditious disposal of Un-Claimed/ Un- up of ASKs is a step towards these directions. Besides cleared/ Seized/ Confiscated goods. providing a Citizen Centric Governance, all 213Annual Report 2020-2021 communications, as well as returns received in ASK • Request for Intimation u/s 143(1) and 154 Centres mandate a timely disposal, which can be • Tax Credit Mismatch Summary monitored and reviewed at the highest level. This ensures that a robust architecture of e-Governance is installed • View Form 26AS and sustained in the Income Tax Department. So receipt • Add/Register as Representative and distribution and disposal of Dak is being done • e-Vault Additional Security Option electronically and is being monitored by superiors at regular intervals. • Login through Net Banking Online compilation and collation of various • Verification and Validation of Contact details of statistics of the Income Tax Department in the form of Taxpayers monthly CAP-I and CAP-II reports is also being done. • Submitting Response to Outstanding Tax 8.2.3 Project Name: e-Filing of Income Tax Returns Demand • e-Nivaran – Grievance Submission for multiple The e-Filing project is an eminent e-governance entities and e-delivery measure taken by the Income Tax Department for providing web- enabled services to the • Schematron Implementation – ITR Validation taxpayers. The project aims at enabling e-filing of Income Rule engine tax returns, audit reports and other Forms prescribed • Electronic Verification Code for filing of ITRs under the Income Tax over Internet directly by taxpayers (EVC) and through e-return intermediaries (ERIs). The project also provides other web-enabled services to facilitate • e-PAN public private participation in the filing of returns. • e-Proceedings The e-Filing portal https://incometaxindia The dedicated help desk deals with query or efiling.gov.in provides following personalized services to grievance related to e-Filing. The portal also provides help the taxpayer: and static content ‘in Hindi’ for users. • Filing of Income Tax Return/Forms e-Filing of ITRs: Electronic filing of IT returns • TDS Statement submission over the internet picked up from AY 2006-07 and the • PAN Aadhaar Linking number of returns filed electronically has risen from around 4 Lakh in FY 2006-07 to 677.90 Lakh in FY 2019- • Rectification uploads and status after processing 20. For FY 2020-21, 285.13 lakhs are filed as on 31st • Refund Re-issue Request October 2020. The progressive achievement of e-filing scheme is as under: Financial Year Number of e-returns Growth Other forms Growth (in lakhs) 2006-07 4 - - - 2007-08 22 450% - - 2008-09 48.5 120% - - 2009-10 52.5 8% - - 2010-11 91.56 74% - - 2011-12 164.12 79% - - 2012-13 214.87 31% - - 2013-14 296.81 38.67% 22.81 - 2014-15 341.73 15.13% 33.96 48.84% 2015-16 433.43 26.83% 46.61 37.25% 2016-17 528.68 21.97% 59.95 28.62% 2017-18 674.74 27.63% 75.64 26.17% 2018-19 668.09 0.99% 87.48 15.65% 2019-20 677.9 1.45% 93.1 7.04% 2020-21 (up to 31/10/2020) 285.13 NA 58.41 NA 214Department of Revenue III Filing Growth (AY Split) ITR Forms AY 2019-20 AY 2018-19 Increase % ITR – 1 3,16,88,039 3,11,66,957 1.67% ITR – 2 46,24,455 46,12,120 0.27% ITR – 3 1,00,43,804 1,21,49,205 -17.33% ITR – 4 1,34,79,576 1,43,75,902 -6.23% ITR – 5 13,21,871 15,03,185 -12.06% ITR – 6 7,59,774 8,92,103 -14.83% ITR – 7 2,00,391 2,40,114 -16.54% Total 6,21,17,910 6,49,39,586 -4.35% The total number of returns filed in FY 2019-20 e-verification of ITR-V using EVC: is 6.77 Crore, as against 6.68 Crore returns filed in FY Electronic Verification Code has enabled the 2018-19. The apparent decrease in the number of ITRs tax payers and auditors to verify the Income Tax Returns filed during FY 2019-20 pertaining to earlier years was and Audit Certificates without digital signature, saving due to the Covid situation towards the end of the FY 2019- them the cost and time for sending paper verification to 20, which has presented difficulties to the assessees in the Department. As on 31st March 2020, 4,11,23,151 ITRs filing the returns of income with-in the given deadline. and other Forms were e-Verified using Internet Banking, Thus, in order to facilitate the assessees, due date for ATM OTP, Aadhaar OTP, D Mat Account and Bank filing the returns of income for the AY 2019-20 has been Account. As on 31st October 2020, 1,86,71,498 ITRs are extended by the Department to 30-11-2020. Further, an e-verified for FY 2020-21. amendment in Section 139(5) of the Income-tax Act, 1961 E-Nivaran: E-Nivaran is the online grievance was brought in Finance Act, 2017, w.e.f. 01.04.2018, redressal system of the Income Tax Department. All types which mandated that a revised return could be furnished of Grievances such as PAN application, processing, only up to the end of the relevant Assessment Year. For assessment, appeals, TDS etc., can be filed by tax FY 2020-21, the number of returns filed till 31st October payers. It is a cent percent paperless system, where 2020 is 2.85 Crore, the reduction is due to shifting of due communication is enabled through, e- mail, SMS also. date for filing ITR. Apart from Income Tax Department network, other related agencies such as NSDL, UTIITSL, SBI Refund Banker New Registered Users: There has been etc are also roped in the scheme. CPC-ITR, CPC-TDS significant growth in the New PANs getting registered on and E- Filing Portals also address grievances filed by the the e-filing site, showing increased use of the e-Filing tax payers. Grievances filed with CPGRAMS will also be and other facilities through the e-Filing website. The integrated soon. number of registered users of the e-Filing portal as on IEC 2.0: The e-filing project and Centralized 31st October 2020 is 9.63 Crores. Processing Center are integrated and the new portal and e-Filing of Audit reports and other forms: platform processing of ITRs and Forms is ready for implementation in the FY2020-21. The technology refresh Other Forms FY FY FY and improved features as to business processes will be very 2019-20 2018-19 2017-18 beneficial for the taxpayers. More self-service options and faster processing of ITR will be achieved by the new project. Total Forms Filed 96,12,346 87,48,259 75,64,025 8.3 Narcotics Control (NC): For FY2020-21, number of other forms filed as 8.3.1 Central Bureau of Narcotics (CBN): on 31st October 2020 is 49,28,858. As regards E-Governance activities, it is stated Total Forms available for e-Filing that various instructions of the Government, on issue of e-governance, are noted for compliance and necessary FY FY FY FY action. Use of CCTV’s Camera’s at Settlement and Weighment centres was also successfully carried out. 2019-20 2018-19 2017-18 2016-17 Payment to cultivators made through e-payment from the 97 87 82 81 crop year 2012-2013 continuously. 215Annual Report 2020-2021 Computers have been provided, almost, in each are made through GeM Portal. The salaries of the staff section and have been inter-connected through Network. disbursed through PFMS-EIS. All urgent reports or replies to the references received 8.7 Directorate of Enforcement: from the Ministry are being forwarded to the Ministry of Finance, new Delhi and other offices through e-mail, as The initiatives taken by the Directorate of far as possible. Enforcement for e-Governance in the recent past are summarized below The Central Bureau of Narcotics web site has been updated and all the application forms for issue of · Directorate of Enforcement, Headquarters office export/import authorization for export/import of and Zonal offices have their own LAN which is Psychotropic substances, Narcotics Drugs and Precursor connected to NICNET, WAN, Directorate of chemicals can be downloaded from the CBN website: Enforcement HQ and Zonal offices are using the office automation tolls like Microsoft Office to www.cbn.nic.in. The opium cultivation data from 1998- accomplish the day-to-day activities like 99 has also been uploaded on the CBN website: preparing letter, excel sheet and graphs. www.cbn.nic.in · All the payments like salaries, reimbursements, 8.3.2 Chief Controller of Factories (CCF): payment to vendors etc. are being paid through The Organization of Chief Controller of Factories Public Finance Management System (PFMS). has launched its own website which contains complete · An Employee Information System (EIS) has been information about the organization, its activities, contact initiated which is a web-based application to details, etc. All tenders for procurement of material and store, process and generate the various reports services are timely loaded in the website for information of an employee. It provides the information of an and participation of the manufacturers/suppliers. The employee such as present post, place of posting, organization has also arranged to display various date of joining in Directorate of Enforcement, date information pertaining to production of drugs, sale of of birth and retirement, next date of promotion drugs, etc. through internet. Placing of various other and post, information of sanctioned post, working information for information of the concerned authorities post and vacant post at the Directorate and its have also been taken up and likely to be provided soon subordinate offices. through internet. Placing of various other information of · An Expenditure Monitoring System (EMS) has been the concerned authorities have also been taken up. The developed to capture the details of budget organization purchase goods & services through GeM estimates, budget allocation and monthly ad tendering through e-procurement portal. expenditure by the various offices of the directorate. 8.4 Customs, Excise & Service Tax Appellate · All the ‘issue of items’ to officers and staff of Tribunal CESTAT: Directorate of Enforcement in Headquarters office The dynamic website of the Tribunal started in is via Epurti. Procurement via Gem (Government January 2017 is fully operational with the help of NIC and E Marketplace) is also incorporated. is now extended to all eight Regional Benches. Cause · FTS (File Tracking System) has been reconfigured lists are uploaded on weekly basis and Daily orders are to meet the requirement of the Directorate. A new uploaded on daily basis. Final orders are uploaded as instance of data base and application has been soon as they are signed by the Members. All information created on the existing server. concerning the Tribunal are available as required by DOPT OM No.1/6/2011 dated 15/04/2013. The NIC has 8.8 Financial Intelligence Unit – India (FIU-IND): undertaken the job of online filing of appeal which is first FIU-IND initiated project FINnet 2.0 to advance of its kind in a Tribunal. Online payment of appeal fee is capabilities of the FINnet system through a technological also done along with it. transformation. This will encompass the redevelopment and revamp of the existing FINnet application, redesign 8.5 Income Tax Settlement Commission (ITSC): of processes to improve compliance, and strengthening This Commission has its own official website i.e. of the strategic and tactical analysis capabilities of FIU- itscindia.gov.in. All the officers and staff members have IND. The core objectives of this project will include: been provided the personal computers. Salary and other · Building a more efficient system for collection of dues are being paid to the officers of the Commission data from reporting entities, reducing case through electronic transfer system. backlogs and improving the user experience. 8.6 Authority for Advance Rulings (AAR): · Advancing analytical capabilities to generate Cause list, Rulings, Orders and Tender Notices more accurate linkages, enabling deeper insights are regularly uploaded in the official website. All purchases through an enriched profile of suspicious entities, 216Department of Revenue III with integration of additional government and Home Affairs and Ministry of Health & FW from time to commercial databases and deployment of AI/ ML, time. Sufficient steps were taken to sanitize the rooms/ to enable better decision making by analysts. open areas, etc on routine basis. Staff cars allocated to senior officers were also sanitized regularly to prevent · Building efficient and intelligent mechanisms for spread of COVID-19. Collection of all obsolete equipment dissemination and exchange of information with and removal thereof, viz. newspapers/ magazines, old other agencies. computers & peripherals through e-waste auction and · Equipping law enforcement agencies with general waste through normal auction, disposal of old analytical tools for enhanced analysis of the cars/ vehicles after following due procedure under cases disseminated to them. provisions of GFR, 2017. Renovation work to create better working ambience has been done in several rooms with · Setting up of a training cell and Learning a view to optimization of office space. Weeding/ recording Management System to conduct online and diver was also undertaken and simultaneously digitization/ classroom trainings and enable continuous scanning or old records/ files were carried out through a learning for all users in the FIU ecosystem. hired private company targeting optimization of office · Setting up of a dedicated Strategic Analysis Lab space. As a step towards maintaining of cleanliness, this to stay abreast of the developments and building has already been declared a ‘Tobacco Free Zone’ applications of emerging technologies for AML, wherein a penalty of Rs. 200/- is imposed to defaulting recommend best practices and generate insights staff/ visitors. Due to the Covid-19 pandemic, it was not to strengthen the functioning of FIU-IND. possible to gather the staff/ officers for pledge/oath taking ceremony and other activities. However, the activities · Strengthening security by adopting an array of relating to Swacchata were undertaken during Swachhata best-in-class measures, standards, tools and Action Plan 2020-21 covering Revenue Headquarters as internal controls for information security. well as the field offices of CBDT & CBIC. Development of FINnet 2.0 system commenced 9.2 Central Board of Indirect Taxes & Customs in August 2020 with onboarding of the Managed Service (CBIC): Provider (MSP) selected through a competitive bidding process. The system design and development are 9.2.1 HRM-II wing of Directorate General of Human underway, and the system is envisioned to go-live in 2022. Resource Development (DGHRD) Launched by the Government on 02.10.2014, a 9. Swachh Bharat Campaign nationwide drive was initiated by CBIC. Swachhta fund was utilized in spreading awareness among employees 9.1 Revenue Headquarters: and citizens. The HRM-II wing of DGHRD has been Department of Revenue has taken several steps mandated to monitor Swachhta related activities as a part of Swachh Bharat Campaign initiated by undertaken by the field formation. Government of India under Swachhta Action Plan 2020- (a) As per the directions of Government of India, 21, various activities were undertaken by the Department, every Ministry/Department had undertaken some viz. Swachhata Pakhwada campaign from 01st Sept. 2020 suggested activities to commemorate 150th Birth to 15th Sept. 2020; many activity documents and images Anniversary of Mahatma Gandhi for a period of have been uploaded on the web portal of the Ministry of two years from 2nd October, 2018 to 2nd October, Drinking Water and Sanitation. The Department has been 2020. Swachhta cell, through regular monitoring the implementation of Swatchhta Action Plan communications, had continuously encouraged of all field formations of Central Board of Direct Taxes all the formations of CBIC to undertake the (CBDT) and Central Board of Indirect Taxes and Customs suggested activities. (CBIC). During 2020-21, to encourage cleanliness in the office complexes, awareness drives for maintaining (b) Swachhta Hi Sewa and SwachhtaPakhwada, a cleanliness with the participation of the officers and fortnightly programme comprising of various employees were done in this Department in addition to swachhta related activities to be undertaken by routine cleaning, sweeping, mopping of floors/ corridors the formations of CBIC has been successfully including staircases and all the rooms/ halls and placing organized and monitored by the SAP cell from appropriate warning signs to avoid accidents during time to time. Reports from various field cleaning activities including cleaning of toilets and formations has been taken and a compiled report adjoining areas using disinfectors with necessary has been sent to the DOR. Apart from this, provisioning of soap, toilet paper, hand dryer, dustbins Swachhta cell organized numerous activities like and necessary items. In addition to the normal swacchata swachhta cycle rally, slow cycling competition, special emphasis was given to proper sanitization of swachhta quiz, shramdaan, plantation of sapling, offices to prevent spread of COVID-19 in the office nukkadnatak etc. at public places to spread premises, as per the protocol issued by the Ministry of awareness about cleanliness. 217Annual Report 2020-2021 (c) Swachhta Awards, given for every financial year, achievements of CBIC under Swachhta is an initiative by CBIC to motivate its formations Action Plan wherein nearly 20 formations to undertake swachhta related activities. The field have successfully installed the sanitary pads formations under CBIC undertook numerous vending machines and Incinerators in offices Swachhta related activities and successfully as well as in various Govt. Schools/NGOs/ implemented various Swachhta projects like : different institutions. Sanitary pads were also distributed in different schools, anganbadis, • Installation of 05 Rain Water Harvesting slum areas and to the poor women of structures in office premises/school to deal society. with “Water Supply” issue, • Apart from above mentioned outreach • Installation of 09 Organic Waste Composter activities for general masses and office staff, Machines & Sewage Treatment Plants for the task of sensitizing the people in and effective solid waste management. outside office regarding Swachhta and • Under the “Swachhta Action Plan”, nearly harmful uses of plastics has been done by 200 schools across the country were the DGHRD and all other CBIC formations adopted by the formations under CBIC for through various speeches, seminars, cycle undertaking cleanliness works. More than rallies, nukkadnataks and distribution of jute/ 50 Government Schools were chosen for cotton bags/t-shirts, steel water bottles improvising the sanitation facilities by way among office staff and among the general of renovation/construction of toilets. Apart public. from this, various other works were 9.3 Narcotics Control (NC): undertaken in schools/institutions like installation of solar panel, renovation/ i. Office celebrated “Swachhata Pakhwada” from beautification of school premises so as to 01st September to 15th September 2020 and create hygienic study environment, report was sent to The Deputy Director (HRM- plantation, cleaning works, development of II), Directorate General of Human Development, small parks/playgrounds, provision of clean New Delhi. drinking water by way of installation of RO plants, water purifiers; supply of items like ii. Temple situated in office premises was mosquito repellants, benches/desks, beautified, cleaned, painted and tree plantation sanitation kits, jute bags, stationery items was done under Swacch Bharat Abhiyan, Circles etc. were drawn to maintain social distancing inside temple. • An effective methodology has been developed by CBIC formations for Liquid iii. Colorful wall mounted Swachhta Slogans on Waste Management by channelizing the Cleanliness, Hygiene, Antipolythene were fixed waste water, of ACs in the office premises, in difference location of office premises. into a common duct line/through piping iv. “Voluntary Labour Contribution towards system and utilizing this waste water for cleanliness campaign” was done by office staff gardening/plantation purposes. on time-to-time basis. • The CBIC formations have undertaken v. During COVID-19 situation, temple and other special cleanliness drives in the office portions in the office premises were cleaned & premises/departmental quarters through sanitized regularly and cleanliness drive was disposal of general waste/e-waste in an started and is still continue to clean each section effective manner and renovation/ of CBN Hqrs., Gwalior. beautification of various office premises across the India. The formations have 9.4 Directorate of Enforcement: successfully implemented more than 100 Swachch Bharat Abhiyan launched by the projects of Clean and Green Office out of Hon’ble Prime Minister on 2nd October, 2014 is being which few worth mentioning are installation vigorously followed by Directorate of Enforcement. On of hanging/vertical gardens in and outside 2nd October, 2020, a pledge ceremony was organized office premises, development of useful across all offices of the Directorate of Enforcement where resources from waste for office all the officers and staff members took pledge to keep beautification, redesigning of gardens, our nation ‘Swachch’. Further, various drives have been development and utilization of unused organized including installation of banners for creating dumped space in office etc. awareness among citizens and government officials • “Creation of Sanitation Infrastructure for towards the cause of this “Abhiyan”. Regular inspection personal hygiene” is one of the major of the office premises is also being done. 218Department of Revenue III 219 I - eruxennA sCBO/sTS/sCS fo noitatneserpeR )CIBC( smotsuC dma sexaT tceridnI fo draoB lartneC :noitazinagrOAnnual Report 2020-2021 220 I - eruxennA )TDBC( sexaT tceriD fo draoB lartneC :noitazinagrO yb deussi eb ot tey era tnemtnioppA fo reffO .9102 noitanimaxE secivreS liviC hguorht detceles setadidnac eht fo T&PoD morf deviecer noitadnemmoceR * .evoba 5 ot 2 nmuloc ni dedulcni ton era srebmun 47 esehT .TDBC eht gnirongi noitca ekat ot tnemtrapeD eht deniartser nahuahC .C.P yb delif 9102/90261 .oN ACS ni 9102.21.30 detad redro ediv truoC hgiH elb’noH )i ** dluoc tnemtnioppa cohda on ,ecneH .8102.20.50 detad LS eht nwardhtiw dah 9102.50.72 detad rettel ediv tnemtrapeD eht sa 8102.20.50 tsil ytiroineS .edarg TICA ni edam eb raluger ,ecneH .tirem nwo & noitomorp ni noitavreser fo rettam eht ni ouq-sutats niatniam ot detcerid 9102.40.51 detad redro ediv truoC emerpuS elb’noH )ii .tnemtraped eht yb enod eb ton dluoc TICA ni noitomorpDepartment of Revenue III 221 I - eruxennA retrauQ daeH euneveR :noitazinagrOAnnual Report 2020-2021 222 I - eruxennA )DNI-UIF( tinU ecnegilletnI laicnaniF :noitazinagrO hcihw tsniaga ,CIN htiw deredacne era stsop ’A‘ puorG 01 ,stsop ’A‘ puorG 24 eseht fo tuo sreciffO ’A‘ puorG 24 fo htgnerts denoitcnas a gnivah si DNI-UIF * .0202.11.03 no sa dellif era stsop 12 ,stsop ’A‘ puorG 23 gniniamer eht fo tuO .erdac CIN yb edam era stnebmucni eht fo gnitsop )’C‘ puorG( STM 60 fo stsop rof tpecxe ylno noitatuped si tnemtnioppa fo edom ehT :etoNDepartment of Revenue III 223 I - eruxennA AMEFAS rednu lanubirT etalleppA ehT :noitazinagrOAnnual Report 2020-2021 224 I - eruxennA ytreporP deriuqcA yllagelli fo erutiefroF rof ytirohtuA tnetepmoC :noitazinagrODepartment of Revenue III 225 I - eruxennA )TATSEC( lanubirT etalleppA xaT ecivreS & esicxE ,smotsuC :noitazinagrOAnnual Report 2020-2021 226 I - eruxennA noissimmoC tnemeltteS esicxE lartneC & smotsuC :noitazinagrODepartment of Revenue III 227 I - eruxennA scitocraN fo uaeruB lartneC :noitazinagrOAnnual Report 2020-2021 228 I - eruxennA tnemecrofnE fo etarotceriD :noitazinagrODepartment of Revenue III 229 I - eruxennA yciloP dna ecnaniF cilbuP fo etutitsnI lanoitaN :noitazinagrOAnnual Report 2020-2021 230 I - eruxennA sgniluR ecnavdA rof ytirohtuA :noitazinagrODepartment of Revenue III 231 I - eruxennA noissimmoC tnemeltteS xaT emocnI :noitazinagrOAnnual Report 2020-2021 232 II - eruxennA SEITILIBASID HTIW SNOSREP EHT FO NOITATNESERPER )CIBC( smotsuC dna sexaT tceridnI fo draoB lartneC :noitazinagrO )9102 raey eht roF( raey eht gnirud detnioppa seitilibasid htiw snosrep fo rebmun eht gniwohs tnemetatS :etoN )noisiv wol ro ssendnilb morf gnireffus snosrep( deppacidnaH yllausiV rof sdnats HV )i( )tnemriapmi gniraeh morf gnireffus snosrep( deppacidnaH gniraeH rof sdnats HH )ii( )yslap larberec ro ytilibasid srotomocol morf gnireffus snosrep( deppacidnaH yllacidepohtrO rof sdnats HO iii( ot detomorp eb nac seitilibasid htiw snosrep ,revewoH .stsop B dna A puorG ot noitomorp fo esac ni seitilibasid htiw snosrep rof noitavreser on si erehT )vi( .seitilibasid htiw snosrep rof elbatius deifitnedi ni tsop denrecnoc eht dedivorp ,stsop hcusDepartment of Revenue III 233 II- eruxennA )TDBC( sexaT tceriD fo draoB lartneC :noitazinagrO yb deussi eb ot tey era tnemtnioppA fo reffO .9102 noitanimaxE secivreS liviC hguorht detceles setadidnac eht fo T&PoD morf deviecer noitadnemmoceR * .evoba 5 ot 2 nmuloc ni dedulcni ton era srebmun 4 esehT .TDBCAnnual Report 2020-2021 234 II- eruxennA retrauQ daeH euneveR :noitazinagrODepartment of Revenue III 235 II - eruxennA )DNI-UIF( tinU ecnegilletnI laicnaniF :noitazinagrO hcihw tsniaga ,CIN htiw deredacne era stsop ’A‘ puorG 01 ,stsop ’A‘ puorG 24 eseht fo tuo sreciffO ’A‘ puorG 24 fo htgnerts denoitcnas a gnivah si DNI-UIF * .0202.11.03 no sa dellif era stsop 12 ,stsop ’A‘ puorG 23 gniniamer eht fo tuO .erdac CIN yb edam era stnebmucni eht fo gnitsopAnnual Report 2020-2021 236 II - eruxennA AMEFAS rednu lanubirT etalleppA ehT :noitazinagrODepartment of Revenue III 237 II- eruxennA ytreporP deriuqcA yllagellI fo erutiefroF rof ytirohtuA tnetepmoC :noitazinagrOAnnual Report 2020-2021 238 II- eruxennA )TATSEC( lanubirT etalleppA xaT ecivreS & esicxE ,smotsuC :noitazinagrODepartment of Revenue III 239 II - eruxennA noissimmoC tnemeltteS esicxE lartneC & smotsuC :noitazinagrOAnnual Report 2020-2021 240 II - eruxennA scitocraN fo uaeruB lartneC :noitazinagrODepartment of Revenue III 241 II- eruxennA tnemecrofnE fo etarotceriD :noitazinagrOAnnual Report 2020-2021 242 II- eruxennA yciloP dna ecnaniF cilbuP fo etutitsnI lanoitaN :noitazinagrODepartment of Revenue III 243 II- eruxennA sgniluR ecnavdA rof ytirohtuA :noitazinagrOAnnual Report 2020-2021 244 II- eruxennA noissimmoC tnemeltteS xaT emocnI :noitazinagrODepartment of Revenue III Annexure - III Summary of important observations included in Audit Reports presented to Parliament during 2020 1. Central Board of Indirect Taxes and Customs (CBIC) Details of the Paras/PA reports submitted and on which ATNs are pending: Details of the Paras/PA reports on which ATNs are No. of pending Paras/PA No. of ATNs reports on No. of ATNs which not sent by No. of ATNs sent but which ATNs have been finally the Ministry returned with S.No. Year have been vetted by the even for the observations and submitted to Audit but have not first time Audit is awaiting PAC after been submitted by their resubmission vetting by the Ministry to by the Ministry Audit PAC 1 2020-21 116 NIL 18 21 2. Central Board of Direct Taxes (CBDT) Performance: General Functioning: (iii) During the year, compliance Report No. 11 of 2020 [Tabled before Parliament on 30/07/2020] having 393 (i) Acknowledging the importance of Comptroller and draft paras were dealt. Besides draft paras, there Auditor General (C&AG) and Public Accounts were six (VI) chapters / long draft paras involving Committee of Parliament in providing checks and multiple illustrated cases. Initial replies in 159 draft balances, each observation of the C&AG by way of paras as well as chapters were sent. It may be Draft Paragraphs (DPs) and System Appraisals is mentioned here that all 393 draft para cases are in thoroughly examined by the Audit & Public Accounts process of settlement to the satisfaction of the C&AG during the year. In addition to above performance Committee (A&PAC) Section of CBDT in the Ministry. Audit Report no. 14 of 2020 was also tabled before The replies/ comments of the Ministry are compiled parliament on 23/09/2020 which deals with various in consultation with the field authorities and then issues on subject search & seizure assessment in furnished to the C&AG and the PAC, as the case Income tax department. may be. (iv) Report No 136 containing 8 Paras submitted to PAC. (ii) The Performance Audit Reports and draft paras One PAC case [Report No.11] has been partly sent reported by the C&AG and the report of PAC on the to PAC, remaining 2 paras are in process. subjects selected by the PAC are also examined by Internal Audit: (A&PAC) Section of CBDT in the Ministry and Action Taken Notes (ATNs) are prepared and furnished to (v) A statement of Internal Audit Objections with revenue the C&AG till they are finally settled. effect is given below: Objection Raised/Settled & Balance pending for the period 01.04.2020 to 31.10.2020: Number of objections Amount (Rs in Lakh) up to 31/10/2020 Opening Balance as on 01/04/20 35,575 1,408,712 Raised 3,755 281,742 Total 39,330 1,690,454 Settled 2,388 92,920 Outstanding 36,942 1,597,534 245Annual Report 2020-2021 (vi)Meetings with CAG Office and Zonal Matters: including complaints / grievances have been regularly Meetings have been held regularly under the attended with active use of CPGRAMS portal. chairmanship of the CIT (A&J) for monitoring the Grievances received manually/ on emails are also settlement of audit paras. All the Zonal matters regularly attended to for prompt redressal. 3. Integrated Finance Unit (IFU) 3.1 Integrated Finance Unit Headquarters (IFU-HQ) Sl. Year Details of the Paras/PA reports on which ATNs are No. pending No. of paras/PA No. of ATNs No. of ATNs sent but No. of ATNs which reports on which not sent by returned with have been finally ATNs have been the Ministry observations and Audit vetted by Audit but submitted to PAC even for the is awaiting their have not been after vetting by first time resubmission by the submitted by the Audit Ministry Ministry to the PAC Nil Nil Nil Nil 3.2 Integrated Finance Unit - Direct Taxes (IFU-DT) S. Year No. of Para/ PA Details of the Para/PA reports on which ATNs are pending No. reports on which No. of ATNs No. of ATNs sent but No. of ATNs which ATNs have been not sent by returned with have been finally submitted to the Ministry observations and vetted by Audit PAC after vetting even for the Audit is awaiting their but have not been by Audit first time resubmission by the submitted by the Ministry Ministry to the PAC 1. 2013 0 0 0 0 2. 2014 0 0 0 0 3. 2015 0 0 0 0 4. 2016 0 0 0 0 5. 2017 418 0 0 0 6. 2018 33 0 0 0 7. 2019 8 17 0 0 Total 459 17 0 0 3.3 Integrated Finance Unit - Indirect Taxes (IFU-EC) Sl. Year Details of the Paras/PA reports on which ATNs are No. pending No. of paras/PA No. of ATNs No. of ATNs sent No. of ATNs reports on not sent by but returned with which have been which ATNs the Ministry observations and finally vetted by have been even for the Audit is awaiting Audit but have submitted to first time their resubmission not been PAC after by the Ministry submitted by the vetting by Audit Ministry to the PAC Nil Nil Nil Nil 246Department of Revenue III 247 VI - eruxennADepartment of Investment and Public Asset Management IV Chapter - IV Department of Investment and Public Asset Management I. FUNCTIONS efficiencies of CPSEs through accountability to its shareholders. As per the present Allocation of Business rules, the mandate of the Department is as follows: (ii) To bring in operational efficiencies in CPSEs through strategic disinvestment, ensuring their greater contribution 1.(a) All matters relating to management of Central to the economy. Government investments in equity including disinvestment (iii) Adopt a professional approach for financial of equity in Central Public Sector Undertakings. management of CPSEs in the national interest and (b) All matters relating to sale of Central Government disinvestment aimed at expanding public participation in equity through offer for sale or private placement or any ownership of CPSEs. other mode in the erstwhile Central Public Sector Undertakings. IV. ORGANISATIONAL STRUCTURE Note: All other post disinvestment matters, including those The Department of Investment and Public Asset relating to and arising out of the exercise of Call option by Management (DIPAM) is currently headed by Shri Tuhin the Strategic Partner in the erstwhile Central Public Sector Kanta Pandey, Secretary. He is assisted by one Additional Undertakings, shall continue to be handled by the Secretary, four Joint Secretaries and one Economic administrative Ministry or Department concerned, where Adviser. The Department functions on the Desk Officer necessary, in consultation with the Department of pattern and the assigned work is handled at the levels of Investment and Public Asset Management (DIPAM). Joint Secretary, Director/Deputy Secretary and Under Secretary. 2. Decisions on the recommendations of Administrative Ministries, NITI Aayog, etc. for disinvestment including 2. The Organizational Structure of the Department is placed at Appendix –I. strategic disinvestment. 3. All matters related to Independent External Monitor (s) for disinvestment and public asset management. V. POLICY AND APPROACH TO DISINVESTMENT OF CPSEs 4. (a) Decisions in matters relating to Central Public Sector Undertakings for purposes of Government Government has changed the mandate of Department of Disinvestment from ‘Disinvestment to Investment investment in equity like capital restructuring, bonus, Management’ of CPSEs w.e.f 14.4.2016. Consequently, dividends, disinvestment of government equity and other the name of the Department has been changed to related issues. Department of Investment and Public Asset Management (b) Advise the Government in matters of financial (DIPAM). The current disinvestment policy of the restructuring of the Central Public Sector Enterprises and Government comprises the following aspects:- for attracting investment in the said Enterprises through (i) Disinvestment through minority stake sale in listed capital market. CPSEs through SEBI approved methods to achieve wider 5. The Unit Trust of India Act, 1963 (52 of 1963) along public ownership of CPSE shares, improve the efficiency of companies through accountability to its stake holders with subjects relating to Specified Undertaking of the Unit and to meet minimum public shareholding norms of 25 % Trust of India (SUUTI). as per SEBI regulations. II. VISION (ii) Strategic Disinvestment by way of sale of substantial (i) Promote people’s ownership of Central Public Sector portion of Government shareholding in identified CPSEs Enterprises (CPSEs) to share in their prosperity through up to 50 per cent or more, along with transfer of disinvestment. management control. (ii) Efficient management of public investment in CPSEs (iii) Efficient management of Government’s investment in for accelerating economic development and augmenting CPSEs by adopting a comprehensive approach for Government’s resources for higher expenditure. addressing inter-linked issues such as leveraging of assets to attract fresh investment, capital restructuring, financial restructuring, etc. III. MISSION (iv) Asset Monetization: Idle assets lying with CPSEs (i) List CPSEs on stock exchanges to promote people’s (and other organizations) points to economic inefficiency ownership through public participation and improving and misallocation of scarce resources that drag down the 249Annual Report 2020-2021 growth momentum. In order to release such idle assets from the existing shareholders that reduces the number and make them available for productive use, the Government of its shares in the open market. is actively pursuing Public Asset Management Policy Objectives: Companies buy back their shares for a number which includes monetization of surplus land and non-core of reasons: assets through;  To increase the value of shares held by promoters.  Monetization of assets of companies under strategic  To eliminate any threats by minority shareholders disinvestment who may be looking for a controlling stake.  Monetization of assets of entities other than those  For CPSEs, buyback is a tool for Govt. of India to under disinvestment disinvest the equity held by GoI in CPSEs and to  Monetization of enemy shares/ lands make proper utilization of idle cash left with CPSEs. VI. DISINVESTMENT PERFORMANCE  As per DIPAM guidelines dated 27.05.2016 the criteria for identifying potential buyback cases are The various modes of disinvestment are: as under: 1. Initial/Further Public Offer (IPO/FPO)  CPSE with net worth of Rs. 2,000 crore and cash 2. Exchange Traded Fund and bank balance of Rs. 1,000 crore should 3. Offer for sale (OFS) mandatorily go for buyback. 4. Buyback of shares  Other CPSEs may also go for buyback, based on the merits of each case. 5. Strategic sale of CPSEs including mergers and acquisition of CPSE(s) within public sector space Achievements : In order to make the use of idle cash lying with CPSEs and for improving the Earning per share, 1. Initial Public/Further Offer IPO/FPO Govt. used buyback method effectively. During the last Public Offer: When an issue / offer of shares or convertible six years, disinvestment proceeds of Rs 40,276 crore were securities is made to new investors for becoming part of realized from buyback of shares by 35 CPSEs. shareholders’ family of the issuer, it is called a ‘public During FY 2020-21 buyback of shares of RITES, issue’. Public issue can be further classified into Initial Kudremukh Iron Ore Company Ltd., (KIOCL), National public offer (IPO) and Further public offer (FPO). The Thermal Power Corporation Limited (NTPC) and National significant features of each type of public issue are Minrral Development Corporation (NMDC) have been illustrated below: carried out through which GoI realized Rs. 2770 crore. The buyback of shares of CPSEs namely GAIL, EIL and (i) Initial public offer (IPO): When an unlisted company NALCO etc. are in process during current FY 2020-21 makes either a fresh issue of shares or convertible (As on 15.02.2021). securities or offers its existing shares or convertible securities for sale or both for the first time to the public, it 3. Offer for Sale (OFS) is called an IPO. This paves way for listing and trading of Offer for sale (OFS) is a simpler method of share sale the issuer’s shares or convertible securities on the Stock through the exchange platform for listed companies. The Exchanges. mechanism was first introduced by SEBI in 2012, to make (ii) Further public offer (FPO): When an already listed it easier for promoters of publicly-traded companies to company makes either a fresh issue of shares or cut their holdings and comply with the minimum public convertible securities to the public or an offer for sale to shareholding norms by June 2013. The method was largely the public, it is called a FPO. adopted by listed companies, both state-run and private, to adhere to the SEBI norms of minimum public Achievements: During the last six years 13 CPSEs have shareholding. Government often used this route to divest been listed which yielded Rs 27,067 crore its shareholding in CPSEs. During the current financial year, IPO of Mazagaon Dock Salient features of OFS: Limited (MDL) and IRFC have been listed successfully (i) simple to execute yielding Rs 443 crore and 1541 crore, respectively. While (ii) market-driven other PSEs namely KIOCL (FPO), Rail Tel, WAPCOS are in the process of listing (As on 15.02.2021). (iii) Govt. continues to retain management control (iv) Cost-effective 2. Buyback of shares (v) Time efficient (completed in 2 trading days) Buyback is the repurchase by a company of its shares (vi) Transparent allocation based on price-parity basis. 250Department of Investment and Public Asset Management IV Achievements : After listing, further disinvestment by number of smaller size loss making CPSEs were taken OFS mechanism yielded Rs 71,943 crore through 37 up for strategic disinvestment. However, following a transactions in last six years. This included the largest calibrated approach, the Government has recently taken OFS of over Rs. 22,000 crores in case of Coal India Limited up strategic sale/privatisation of large CPSEs such as in January, 2015. Air India, Bharat Petroleum Corporation Limited (BPCL), Container Corporation of India (CONCOR) and Shipping During the current financial year (till 15.02.2021), OFS of Corporation of India (SCI). The procedure for Strategic HAL, BDL and IRCTC and SAIL have been concluded disinvestment was also completely revamped in October yielding Rs 4924 crore, Rs 771 crore and Rs 4474 and 2019 for making it result oriented and expeditious. The Rs. 2738 crore respectively, making these companies process now follows a multilayered decision-making compliant/near compliant to SEBI’s Minimum Public mechanism at the level of Inter Ministerial Group (IMG), Shareholding norm of 25%. Core Group of Secretaries on Disinvestment (CGD) and Alternate Mechanism (AM) comprising Ministers. 4. Exchange Traded Fund Further, Independent External Monitor (IEM) mechanism ETFs have proved to be an important investment comprising Ex Chief Justice of India, Ex CAG of India and opportunity for retail investors and have turned out to be a Ex CVC has been constituted to provide oversight of the good instrument for Government of India’s disinvestment strategic disinvestment issues and grievances. programme. Since 2016-17, ETFs comprising a basket of CPSE stocks was used as a major instrument for Status: disinvestment. Two ETF products, namely CPSE-ETF (10 CPSE stocks) and Bharat-22 (22 scrips including CPSEs, Based on the recommendations made by NITI Aayog since PSBs and SUUTI stocks) were launched by DIPAM. 2016, the Government has ‘in principle’ approved strategic Through various offers of CPSE-ETF and Bharat-22 ETF, disinvestment in 34 cases (some cases include Govt. could realize disinvestment proceeds of Rs.98,949 subsidiaries and some cases include only units/plants) including 31 cases being handled by DIPAM. Out of these crore since 2016-17. However, there is now limited scope cases, strategic disinvestment transactions have been of disinvestment through existing ETF window as many completed in 8 cases; 4 CPSEs are identified for closure; underlying Stocks in CPSE-ETF and Bharat-22 ETF have 2 cases are held up due to litigation; and remaining 20 reached close to 51% level of GOI equity or some stocks transactions are at various stages. Details are given at in the ETF basket are no longer available for disinvestment Annexure 1. due to strategic disinvestment or other reasons. Also, there has been concern that large and repeated tranches of Achievements. Equity ETF were acting as a disincentive for investors in During the last three years the Government strategically PSU stocks due to price overhang. Therefore, Government sold its stake in 8 CPSEs (HPCL, REC, DCIL, HSCC, has now decided to pause in employing Equity ETFs as a NPCC. NEEPCO, THDC and Kamrajar Port) which resulted tool for minority stake sale. in a yield of Rs. 66,721 crore. 5. Strategic Disinvestment  Hindustan Petroleum Corporation Ltd. (HPCL) – Strategic Disinvestment implies substantial sale of acquired by ONGC - Rs 36,915 Crs. Government shareholding of a CPSE along with transfer  Hospital Services Consultancy Corporation of management control. The policy of strategic (HSCC) - acquired by NBCC- Rs 285 Crs. disinvestment is followed in respect of the CPSEs which  National Projects Construction Corpn. (NPCC)- are not in ‘priority sector’. For this purpose, NITI Aayog acquired by WAPCOS- Rs79.80 Crs. has been mandated to identify CPSEs for Strategic  Dredging Corporation (DCIL)- acquired by 4 ports- Disinvestment. NITI Aayog identifies such CPSEs based Rs 1049 Crs. on the criteria of (i) National Security; (ii) Sovereign functions at arm’s length, and (iii) Market Imperfections  Rural Electrification Corporation (REC)- acquired and Public Purpose. Strategic disinvestment of CPSEs is by PFC- Rs 14,500 Crs. being guided by the basic economic rationale that  THDC India Limited (THDCIL) – acquired by NTPC- Government should discontinue in sectors, where Rs.7500 crs. competitive markets have come of age and economic  North Eastern Electric Power Corporation Limited potential of such entities may be better discovered in the (NEEPCO)- acquired by NTPC-Rs.4,000 crs. hands of strategic investor due to various factors such as infusion of capital, technological upgradation and efficient  Kamrajar Port (KPL)- acquired by Chennai Port management practices; and would thus add to the GDP Trust- Rs 2383 crs. of the country. Status of Strategic sale in major ongoing cases In 2016-17, the Government gave a new impetus to the In some cases namely CEL and Units of SAIL (Salem policy for strategic disinvestment/privatization. Initially, a Steel Plant and Bhadrawati Steel Plant) transactions are 251Annual Report 2020-2021 in advanced stage. Strategic disinvestment of BPCL and years category i.e., BBETF – 2025 and BBETF - Air India have entered the second stage of the process 2031.The NFO collections for BBETF - 2025 was with receipt of multiple expressions of interest from deployed among eight CPSE issuers during July 27- interested parties. Revised PIM/EoI in respect of Pawan 31, 2020 and the NFO collection for BBETF - 2031 Hans Limited has been issued, after previous attempts was deployed among eight CPSE issuers during July were not successful. PIM/EoIs for SCI has also been 27, 2020 to Aug 7, 2020. issued EoIs in respect to NINL, CONCOR are at advance  The first two tranches received huge response from stages and shall be floated after approval of competent all sections of investors especially retail investors. authority. Retail investors in India aren’t normally able to 6. Trends in Disinvestment participate in bond markets due to liquidity and accessibility constraints. But Bharat Bond ETF has Disinvestment receipts (2014-15 to 2020-21) given opportunity to retail investors to access bonds Year RE Receipts No. of with smaller amount (as low as Rs. 1,000) while (Rs. Crores) (Rs. Crores) Transactions providing long term resources for public sector. Regular 2014-15 26,353 24,349 8 issues of Bharat Bond ETF would result in reduced borrowing costs for CPSEs. It will also deepen the 2015-16 25,313 23,997 9 bond market in the long run. 2016-17 40,000 46,247 21 Benefits of Bond ETF to investors 2017-18 1,00,000 1,00,057 36  Bond ETF will provide safety (underlying bonds are 2018-19 80,000 84,972 28 issued by CPSEs and other Government owned 2019- 20 65,000 50, 299 15 entities), liquidity (tradability on exchange) and Total 3,29,921 105 predictable tax efficient returns (target maturity structure). Disinvestment transactions (2020-21) (as on 15.02.2021)  It will also provide access to retail investors to invest Sl. Name of CPSEs Type of Receipts in bonds with smaller amount (as low as Rs. 1,000) No. Disinvestment (Rs. in Crore) thereby providing easy and low-cost access to bond 1 Mazagaon Dock markets. Limited IPO 443  This will increase participation of retail investors who 2 Indian Railway Finance are currently not participating in bond markets due to Corporation Ltd. IPO 1541 liquidity and accessibility constraints. 3 Hindustan Aeronautics Ltd. OFS 4924 4 Bharat Dynamics Ltd. OFS 771  Tax efficiency compared to Bonds as coupons from 5 Indian Railway Catering and the Bonds are taxed at marginal rates. Bond ETFs Tourism Corpon. Ltd. OFS 4474 (including are taxed with the benefit of indexation which employees OFS) significantly reduces the tax on capital gains for 6 Steel Authority of India Ltd. OFS 2738 investor. 7 RITES Limited BB 173 Bond ETF Benefits for CPSEs 8 KIOCL BB 156  Bond ETF would offer CPSEs, CPSUs, CPFIs and 9 NTPC Ltd. BB 1065 other Government organizations an additional source 10 NMDC Ltd. BB 1376 of funds for meeting their borrowing requirements apart 11 Others - 1838 from bank financing and bunched up bond market access through private placement. Total 19499  It will expand their investor base through retail and VII. NEW INITIATIVES HNI participation which can increase demand for their bonds. With increase in demand for their bonds, these 1. Bharat Bond ETF issuers may be able to borrow at reduced cost,  A well-developed bond market is essential to raise bringing down their cost of borrowing over a period of resources for capital expenditure and infrastructure time. development. Bharat Bond ETF, the first instrument  Further, Bond ETF trading on the exchange will help of its kind based on high quality public sector bonds, in better price discovery of the underlying bonds. filled a major vacuum that existed in this area.  First issue (Two series of Bonds -3 Year & 10 Year)  Since a broad debt calendar to assess the borrowing was launched in December 2019. The issue was needs of the CPSEs would be prepared and approved oversubscribed and raised Rs 12,400 Cr for CPSEs each year, it would inculcate borrowing discipline in for capital expenditure. BHARAT Bond ETF Tranche the CPSEs at least to the extent of this investment. II NFO was launched on 14th -17th July, 2020 and Developmental impact on Bond Markets received a resounding success with 39,272 applications amounting to Rs.10,992 crore,  Target Maturity Bond ETF is expected to create a oversubscribed by more than 3.7 times against the yield curve and a ladder of Bond ETFs with different base issue size of Rs. 3,000 crore in both 5 and 11 maturities across calendar years. 252Department of Investment and Public Asset Management IV  This will provide an option to CPSEs to borrow and Financial Year onwards. Accordingly, the Department is investors to invest in different maturity buckets over a holding consultations with the CPSEs and Administrative period of time. Ministry/ Departments for finalizing the dividend payouts to the Government for 2020-21. An Inter-Ministerial  Secondary market trading of ETF units on the Committee namely Committee for monitoring of Capital exchange will also create demand for underlying bonds Management and Dividend in CPSEs (CMCDC) for  ETF will increase the transparency in bond markets discussing/approving proposals relating to capital through ETF trading market enabling investors to see management/restructuring and dividend payouts, including live prices. exemption proposals of CPSEs has been set up. An  ETF is expected to create new eco-system – Market advisory regarding Consistent Dividend Policy for ensuring Makers, Index providers and awareness amongst predictability in dividend payments by CPSEs has also investors - for the launching new Bond ETFs in India. been circulated to all CPSEs.  New regulatory environment will be created allowing IX. INITIATIVES UNDERTAKEN FOR PERSONS WITH many other AMCs to start Bond ETFs. DISABILITIES, SCHEDULED CASTES, SCHEDULED  This is expected to eventually increase the size of TRIBES AND OTHER BACKWARD CLASSES: bond ETFs in India leading to achieving key objectives The staff strength in the Department along with at a larger scale – deepening bond markets, enhancing representation of Scheduled Castes, Scheduled Tribes, retail participation and reducing borrowing costs. Persons with disabilities and Other Backward Classes is given in Appendix II. 2. Asset Monetization X. INITIATIVES RELATING TO GENDER BUDGETING AND EMPOWERMENT OF WOMEN Many CPSEs/ PSUs/ other government organizations have huge unutilized or under-utilized assets including land and The nature of allocated work of the Department does not buildings. A significant amount of government/public have any scope for gender budgeting and empowerment money is locked in these assets. Unlocking the capital of women. value tied up in these assets through sale or lease will XI. OFFICIAL LANGUAGE POLICY generate revenue for the government. The proceeds can The Department has a full-fledged Official Language Unit be reinvested to create additional assets or improve to implement the Official Language Policy. The website existing infrastructure or any other purpose. Asset of the Department is bilingual. monetization can thus kick-start the investment cycle which has been identified as the major constraint for XII. E-GOVERNANCE achieving a higher economic growth in India. DIPAM’s New Website In order to release such idle assets and make them DIPAM has launched its new website on 19th Nov 2020 available for productive use, the Government is actively having new looks and features that would be more pursuing the policy of monetization of Public Assets. The informative, interactive and user friendly. The new website Asset Monetization Framework under DIPAM has been has included all the mandate of the DIPAM and the relevant laid down in February 2019. This has enabled monetization details of transactions viz Strategic Disinvestment, of non-core assets in (i) CPSEs under strategic Minority Sale, Asset Monetization and Capital Management. All the documents which are connected to disinvestment (ii) CPSEs under closure (iii) Other CPSEs the various transactions ranging from guidelines, circulars, and (iv) Immovable enemy property. CPSEs are being also RFP, EoI, and receipts are highlighted into the new website. encouraged to use new instruments like ReIT, InVIT and The website has a new feature of displaying Market TOT for raising resources through their assets. updates and Market Cap of the listed CPSEs. Now anyone 3. Sale of Enemy Property by a click of the button can find out the market cap value of any CPSE, the number of shares GoI is holding and Enemy Property Act, 1968 provides for vesting of enemy the closing day share price. This provision has been property in Custodian of Enemy Property of India (CEPI). included by a means of shared API by the BSE. The CEPI Act was amended in 2017, making way for the sale of enemy property (including enemy equity shares). The new website has a counter on the home page to demonstrate the receipts DIPAM and GoI has obtained Government approved sale of moveable enemy shares and out of various transactions. This would give the user a institutional framework for sale of immoveable enemy clear view of the disinvestment efforts done by the properties in 2018-19. Accordingly, some of the movable department. The new website also has the social media assets (shares) were sold which yielded an amount of Rs updates from twitter and all the updates are displayed live 2660 crore so far. on the home page. The new look of the website gives VIII. Dividend Payments by CPSEs smooth maneuvering feasibility to the user to move across various sections of the website. The website also has a The work related to dividends has been transferred from link to the department intranet based dashboard which Department of Economic Affairs to DIPAM from this would be functional very soon. The new website platform 253Annual Report 2020-2021 is Java based and it has been hosted on NIC cloud by website (www.dipam.gov.in) in compliance with incorporating all security features. Section 4(1)(b) of the RTI Act and is updated from time to time. Use of e-Office (iii) One Under Secretary has been designated as the Following web-based monitoring systems are in place: Nodal Central Public Information Officer and 1 Deputy 1. Rajya Sabha Question, Answer Monitoring System. Director and 8 other Under Secretaries have been 2. Public Grievance information system designated as Central Public Information Officers under 3. Centralized Tender/Procurement Monitoring System. Section 5(1) of the Act, in respect of subjects handled Tenders are regularly put on the website and e- by them. Publishing in e-procurement portal is being done (iv) Directors/ Deputy Secretaries have been designated regularly. as First Appellate Authorities in terms of Section 19(1) 4. Representations of Reserved Categories in Posts and of the Act for all matters relating to their Divisions. Services in Government of India (RRCPS) Monitoring XVI. INITIATIVES FOR GOOD GOVERNANCE System (SC/ST Commission Portal). 5. APAR Monitoring system for IAS Officers (JS level & As per the mandate provided by the Government of India above), CSS/ CSSS Officers (Allocation of Business) Rules, 1961, the Department is not involved in the delivery of any public services and thus, 6. Cadre Management System (for CSS Officers). does not have any direct interface with the citizens or 7. Pension Portal public at large. However, the Department has prescribed 8. RTI Annual Return Information Systems. timelines for disposal of transaction related bills to avoid 9. Quarterly Rolling Plan delay and any scope of corruption as also to promote good governance. 10. Data Portal (Data.gov.in) XVII. AUDIT PARAS/OBJECTIONS XIII. REDRESSAL OF PUBLIC GRIEVANCES The Department is using the Centralized Public Grievance No CAG or PAC paras/Objections are pending in the Monitoring System (CPGRAMS). The website of the Department. Department also has an in-built mechanism for receiving XVIII. INTEGRATED FINANCE UNIT grievances from public. A Joint Secretary has been The Integrated Finance Unit works under Additional designated as Director of Public Grievances for the purpose. Secretary & Financial Adviser (Finance) and deals with expenditure and Budget related proposals of Grant No. Internal Complaints Committee on Sexual harassment of 32 – Department of Investment & Public Asset women employees Management - which includes Secretariat General In compliance with Supreme Court’s Judgement dated 13th Services covering the establishment budget for the August, 1997 in Visakha case relating to prevention of Department of Investment & Public Asset Management. sexual harassment of women at work place, an internal complaints committee has been put in place for considering complaints of sexual harassment of women The budget allocation under Grant No. 32 is as under: - employees in Department of Investment and Public Asset Management (DIPAM). (Rs. in crores) XIV. VIGILANCE MACHINERY Grant No. Budget Estimates Revised Estimates 2020-21 2020-21 A Joint Secretary has been designated as part-time Chief Vigilance Officer in the Department. Plan Non-Plan Total Plan Non-Plan Total XV. RIGHT TO INFORMATION ACT, 2005. 32 - Department of In order to facilitate dissemination of information under Investment & the provisions of the Right to Information Act, 2005, the Public Asset following initiatives have been taken by the Department: Management ... 132.11132.11 ... 92.49 92.49 (i) An RTI Cell has been set up to collect, transfer the applications under RTI Act, 2005 to the Central Public The Integrated Finance Unit monitors all financial and Information Officers/ Public Authorities concerned and expenditure related proposals of the Department like to submit the quarterly returns regarding receipt and appointment of consultants, foreign deputation/visits of disposal of the RTI applications/ appeals, to the Central officers etc. The expenditure trend of the Department is Information Commission. consistently monitored by the IF Unit. All budget related (ii) Details of functions of the Department along with its matters including issues concerning Standing Committee functionaries etc. have been placed on Department’s on Finance come within the purview of this unit. 254Department of Investment and Public Asset Management IV Annexure-I List of CPSEs, including Subsidiaries, units and Joint ventures, for which Government has given ‘in- principle’ approval for strategic disinvestment. a) Transactions Completed d) Transactions in process S.No. Name of CPSE S.No Name of CPSE 1. Hindustan Petroleum Corporation Limited (HPCL) 15. Project & Development India Limited 2. Rural Electrification Corporation Limited (REC) 16. Engineering Project (India) Limited 17. Bridge and Roof Co. India Limited 3. Hospital Services Consultancy Corporation (HSCC) 18. Plants/Units of Cement Corporation of India Limited 4. National Projects construction corporation (NPCC) (CCI) 5. Dredging Corporation of India Limited (DCIL) 19. Central Electronics Limited 6. THDC India Limited (THDCIL) 20. Bharat Earth Movers Ltd. (BEML) 7. North Eastern Electric Power Corporation Limited 21. Ferro Scrap Nigam Limited (sub.) 22. Nagarnar Steel Plant of NMDC (NEEPCO) 23. Alloy Steel Plant, Durgapur; Salem Steel Plant; 8. Kamrajar Port Limited (KPL) Bhadrawati Steel Plant, Durgapur: - Salem Steel Plant; Bhadrawati units of SAIL b) CPSEs under consideration for closure 24. Pawan Hans Limited 25. Air India and its five subsidiaries and one JV. 26. HLL Lifecare Limited 9. Hindustan Fluorocarbons Limited (HFL)* 27. Indian Medicines Pharmaceuticals Corporation 10. Scooters India Limited # Limited (IMPCL) 11. Bharat Pumps & Compressors Limited@ 28. Various Units of India Tourism Development 12. Hindustan Prefab Limited (HPL) Corporation Limited (ITDC) 29. Hindustan Antibiotics Limited (HAL) * CCEA approved closure of the CPSE on 22.01.2020 30. Bengal Chemicals & Pharmaceuticals Limited # CCEA approved closure of the CPSE on 20.01.2021 (BCPL) @ CCEA approved closure of the CPSE on 09.12.2020 31. (a) Bharat Petroleum Corporation Ltd(except Numaligarh Refinery Limited) (b) BPCL stake in Numaligarh Refinery Limited to a CPSE strategic c) Transactions held up as cases under litigation buyer. 32. Shipping Corporation of India Limited (SCI) 13. Hindustan Newsprint Limited 33. Container Corporation of India Limited (CONCOR) 14. Karnataka Antibiotics & Pharmaceuticals Limited 34. Nilachal Ispat Nigam Limited(NINL) 255Annual Report 2020-2021 256 I -xidneppADepartment of Investment and Public Asset Management IV 257 II -xidneppA tnemeganaM tessA cilbuP & tnemtsevnI fo tnemtrapeD fo tcepser ni sCBO ,sTS ,sCS fo noitatneserpeR MAPID ni seitilibasid htiw snosrep eht fo noitatneserpeRChapter - V Department of Financial Services V Department of Financial Services 1. Work Allocation among Sections the customers, non-payment of term deposits before maturity, delay in payment to pensioners, including those 1.1 Banking Operation-I (BO-I) related to credit cards, ATMs, etc. All kind of complaints received from DARPG/DPG relating to Public/ Private Appointment of Governor/Deputy Governor of Sector/Foreign Banks/FI/Ins. All kinds of complaints RBI, Chairman and Managing Director of SBI, Chairman received from MPs/VIPs /PMO against Private Sector & and the Managing Director and Chief Executive Officers Foreign Banks. Banking Customer Service. Banking and Executive Officers of Nationalised Banks, salary Ombudsman. Coordination of PRAGATI meetings. allowances and other terms and conditions of Whole Time Directors of Public Sector Banks (PSBs). Constitution of 1.4 Banking Operation & Accounts-I (BOA-I) Boards of Directors of RBI and PSBs. Nomination of Directors on the Board of PSBs. Preparation of annual consolidated review on the working of Public Sector Banks (PSBs) and laying it on 1.2 Banking Operation-II (BO-II) the Tables of both Houses of Parliament. Pattern of accounting and final accounts in Public Sector Banks. Administration of all Acts/Regulations/Rules Study and analysis of the working results of PSU Banks. related to Financial Systems like the Negotiable Taxation matters of PSBs/FIs. Dividend payable to Instruments Act, 1881, the Chit Funds Act, 1982 and the Central Government by PSBs. Scrutiny of the annual Price Chits and Money Circulation Schemes (Banning) financial reviews of PSBs conducted by RBI under Section Act, 1978, etc., Banning of Unregulated Deposit Schemes 35 of the Banking Regulation Act, 1949 and follow up Act, 2019, Deposit Insurance and Credit Guarantee action. Capital restructuring of PSBs (including Corporation (DICGC), Act, 1961, Payment and Settlement restructuring of weak PSBs) and Government’s System Act, 2007 and Factoring Regulation Act, 2011. contribution to share capital, public issue of banks. State Legislations – Protection of Interest of Release of externally aided grants to ICICI Bank under Depositors Acts of State Governments. Matters relating USAID. Disputes and arbitration between PSBs and to Multi-level Marketing and Ponzi Schemes. Setting up between PSBs and other Govt. Departments/PSEs. of IFSC – GIFT. International Relations (Banking) / Appointment of advocates in PSBs. Residuary matters Bilateral issues. International Cooperation in. WTO, of Portuguese Banks in Goa. Opening and shifting of RCEP, JCCII and CEPAs/CECAs/FTAs of India with administrative offices of banks. All Policy matters related bilateral and multilateral partners. Matters relating to to Banking Operation such as Licensing, amalgamation, Financial Sector Development Council and its Sub- reconstruction, moratorium funds, and acquisition of committees. Matters relating to Central Economic private sector banks. Functioning of PSBs. Notification Intelligence Bureau (CEIB). Matters relating to office of regarding exemption from various sections of the Banking Court Liquidator, Kolkata. Work relating to Government Regulation Act, 1949 and appointment of appellate Agency Business. Financial Action Task Force (FATF). authority to hear appeals under BR Act and Banking Setting up of Currency Chest by banks in border districts Companies (Acquisition and Transfer of Undertakings) (within 80 KMs of International Border). Rationalization Act of 1970 and 1980. Administration of all Acts/ of Bank Holidays / declaration of bank holidays under Regulations/ Rules related to Public Sector Banks, RBI section 25 of the Negotiable Instruments Act, 1881. Know and State Level Banks. Laying of annual reports and Your Customer (KYC) matters – AML and CFT matters. audit reports etc., of PSBs in Parliament. 1.3 Banking Operation-III (BO-III) 1.5 Banking Operation & Accounts-II (BOA-II) Customer Service in Banks/FI/Ins. All kinds of Credit Information Companies (CICs). Works complaints/representations received from individual/ relating to monitoring of NPAs and Recovery including associations for redressal of their grievances in these compromises and OTS of all PSBs. Parliament matters, institutions such as delay in clearance of cheques, non- VIP/PMO references, complaints and other matters payment/non-issue of drafts, non-issue/delay in issue of relating to above works. All matters related to NPA/ duplicate drafts, misbehaviour/rude behaviour/ Stressed Assets (other than Sectoral Stress), including harassment on the part of staff of the Institution, non- relief measures by banks in area affected by natural settlement/delay in settlement of deceased accounts, calamities. Stressed Assets Stabilization Fund (SASF). non-transfer/delay in transfer of accounts from one office Audit of banks, appointment and fixation of remuneration to another, non-opening/delay in opening of new of auditors of PSBs/FIs. Bank guarantees, Letters of accounts, non-compliance with standing instructions of Credit and Letters of Undertaking / Comfort by PSBs and 259Annual Report 2020-2021 related complaints. Citizen’s Charter of PSBs/RBI. Correspondents/Business Facilitators, Mobile Banking Acquisition/Leasing/Renting/Vacation of premises, Estate etc., matters relating to e-Governance in all FIs and Officers under Public Premises Act, 1971. Operation of e-Payments in banking system and computerisation of foreign banks in India (including IDC and FDI Policy PSBs. Matters relating to Payment Regulatory Board matters). Banking Sector Reforms (including EASE Index (PRB) constitution and matters related to PRB. and PSB Reforms Agenda). NBFCs and Appellate Matters relating to Minimum deposit balance, Authority on NBFCs. Operational risk management (other cash handling & digital payment charges; On-boarding than cyber-security and digital payments security), of merchants on digital payment platforms other than including frauds and fugitive offenders. Administration cards; Banking matters relating to digital payment of all Acts/Regulations/Rules related to NBFCs and CICs. platforms; Pradhan Mantri Jan Dhan Yojana (PMJDY), Statement of Intent / Key Performance Indicators / Mission Office. All matters related to Stand Up India (SUI). Performance evaluation of whole-time Directors. Insolvency Bankruptcy Code (IBC). Overseas branches 1.9 Industrial Relations (IR) of Indian banks. Service matters of PSBs including IDBI/ RBI, 1.6 Agriculture Credit (AC) Pension matters of NABARD. Industrial Disputes Act matters, HR matters relating to PSBs and RBI Unions Credit flow to Agriculture and allied sectors. and Associations in the Banking Industry, Bipartite Agricultural Debt Waiver and Debt Relief Scheme, 2008. settlements of policy of transfer, promotion, and HRD in Matters relating to NABARD (except pension matters), banks. IB reports about political activities of bank Agriculture Finance Corporation (except Service matters), employees. Pay and Allowances of bank employees in State Legislations on the subject, Co-operative Banks overseas branches. HR Reforms. (including Urban Co-operative Banks), external aided projects relating to rural/agriculture credit, appeals made 1.10 Coordination (Coord.) by co-operative banks, financial assistance to persons affected by natural calamities, riots disturbances, etc. Organisation of FM’s meetings with CEOs of Bank credit to KVIC, handloom and handicraft sector. PSBs and regional consultative committee meetings. Citizen Charter of NABARD. Appointment of CMDs & Staff Meeting of Secretary (FS)/ Senior Officers Meeting Directors of NABARD. Kisan Credit Card (KCC) Scheme. (SOM). Monitoring & Review of disposal of VIP Secretarial assistance to the designated appellate references, PMO references, coordination of RBI pending authority in regard to appeal by Urban Cooperative banks matters. Parliament Questions regarding VIP references. against cancellation of license by RBI. Monthly DO letter to Cabinet Secretary from Secretary (FS). Appointment of CPIOs, ACPIOs, AA and Nodal 1.7 Regional Rural Banks (RRB) Section for RTI matters of DFS and to deal with CIC for Legislative matters with regard to RRB Act, 1976 Annual Report etc. Updation of Induction Material for DFS; and framing of rules there under. Nomination of non- Co-ordination of VIP, PMO, President’s Secretariat., etc.; official directors on the Board of RRB, appointment of references involving more than two Divisions of DFS. Chairman, Recommendation of RRBs, review of 1.11 Establishment (Estt.) performance of RRBs, wage revision, manpower planning. Laying of Annual Reports of all RRBs along Matters pertaining to the Officers and Staff of DFS with review thereof. Formation of Staff Service Regulation including RRs, appointment, ACRs, deputation (including and Promotion Rules for employees and officers of RRBs, abroad), training, IWSU, SIU, welfare, review of officers IR matters of RRBs. Citizen’s Charter of RRBs. under FR 56(J), internal vigilance, staff grievances, pension, etc. Grant of various advances to officers and Priority Sector Lending, Micro Finance and other staff, payment of fees to advocates, settlement of medical related matters which includes lending to weaker sections claims and CGHS matters, family welfare programme. including SC/ST, PM’s New 15 Point Programme for the Welfare of Minorities, Credit to minorities, Follow-up 1.12 General Administration (GA) action of Select Parameters recommended by Sachar Committee, DRI Scheme. Housekeeping/Security matters, cleanliness, stores, canteen, R&I, library. Staff Car Drivers, vehicles 1.8 Financial Inclusion (FI) to the officers of DFS. Purchase of Computer Hardware Work relating to financial inclusion, coordination and maintenance of Computers, Printers and other with other sections, offices, institutions etc. on Financial equipments. Maintenance of furniture and electricity inclusion. Branch expansion of banks. Lead Bank items. Logistic support for arranging farewell of staff of Scheme and Service Area Approach. District and State DFS. Providing of Identity Cards to the Staff of DFS and Level Bankers’ Committee (SLBC). Regional imbalances CMDs/EDs/PROs of Public Sector Banks/Financial of banking network, matters related to Business Institutions/Insurance companies, etc. 260Department of Financial Services V 1.13 Parliament Government Nominee Directors; Appointment of Statutory Auditor in EXIM Bank; Laying of annual reports of IIFCL, Collection, identification and marking of EXIM Bank, IFCI Ltd. and IIBI Ltd.; Policy issues related Parliament Questions, Notices, admitted Questions, and to All India Financial Institutions/ Financial Institutions etc.; getting the files approved from the Minister. Preparation Scheme for financing viable infrastructure Projects of facts and replies for pads of Ministers. Keeping track (SIFTI) of IIFCL; Administration of the Partial Credit and record of pending Assurances, Special Mentions and guarantee Scheme; Administration of the Special Liquidity References under 377 and other matters as mentioned Scheme; Sectoral issues related to credit and stress for in the Induction Material. Presidential address to the Joint all sectors except Textile, MSMEs and Housing; Winding Session of Parliament. Compilation and submission of up of IIBI Ltd. and other related matters; Project material for Parliament Questions to other Ministries/ Monitoring Group (PMG) meeting; Media and Publicity Departments. Parliamentary Committee Matters. work of the Department; All matters related to IDFC Ltd. 1.14 Hindi and IDFC First Bank. Matters related to Ratnagiri Gas and Power Pvt. Ltd (RGPPL). Citizen’s Charter of EXIM Implementation of Official Language Policy of the Bank and IIFCL. All matters related to resolution and Government. Translation work relating to Parliament registration issues of Asset Reconstruction Company Questions, Standing Committees, Minutes of the (ARC) and to track the activities of the ARCs. All matters Meetings. Hindi Teaching Scheme and other related National Investment and Infrastructure Fund. miscellaneous work as mentioned in induction material Project Monitoring Group (PMG) Meeting. of DFS. 1.18 Industrial Finance-II (IF-II) 1.15 Welfare Section (SCT) Administration of National Housing Bank Act, Matters relating to recruitment, promotion and 1987, Small Industries Development Bank of India Act, welfare measures of SC/ST/OBC/PH and Ex-servicemen 1989, State Financial Corporation Act, 1951. Operational, in Public Sector Banks/Financial Institutions and Public Policy and Budgetary Matter relating to Small Industries Sector Insurance Companies (PSBs/FIs/PSICs). Matter Development Bank of India (SIDBI) and National Housing of policy regarding reservation for these categories in Bank (NHB). Matters related to NHB and Housing PSBs/FIs/PSICs, reservation matters in RRBs etc. Finance. Matters related to winding up of Board for Inspection/examination of Reservation Roster for SCs/ Industrial and Financial Reconstruction (BIFR) and STs/OBCs in PSBs/FIs/PSICs. Appellate Authority for Industrial and Financial 1.16 Data Analysis (DA) Reconstruction (AAIFR). Matters related to credit to Micro, Small and Medium Enterprises (MSMEs), Trade Reserve Bank of India Credit Policy - Busy Receivables Discounting System (TReDS), National Season - Slack Season and selective credit control. Credit Guarantee Trustee Company Limited (NCGTC), Financial sector assessment and sectoral credit analysis. Emergency Credit Line Guarantee Scheme (ECLGS), Banking Statistics regarding bank deposits and advances. Credit Guarantee Fund for Factoring (CGFF), CGFMU, Deposits and advances of banks. Rates of interest on CGFSI, CGTMSE, CGFF. MLIs, Credit Guarantee bank deposits and advances. Dissemination of results Scheme and other related matters on the subject. Citizens and important information relating to RBI, IBA, studies Charter of NHB and SIDBI. Credit Aspects of Government on banking reforms. Analysis of other international reports Sponsored Schemes – Prime Minister Employment relevant to banking sector in India. Analysis of Reports Generation Programme (PMEGP), Employment of committees on Financial Sector Reforms etc. Generation Scheme of Swarna Jayanti Shahari Rozgar Management Information System - collection, collation Yojana (SJSRY), Swarna Jayanti Gram Swarozgar Yojana of data relating to Banking Industry. Result Framework (SGSY) and other poverty alleviation programmes and Document (RFD), Speeches of FM/MOS on different other related matters. Appointment and all personnel occasions. Audit Paras. UN e-Government Index & matters of Whole Time Director in SIDBI and NHB. Digital Services. Work related to committee of Financial Appointment of Non Official / Independent Directors and Sector Statistics. Coordination of budget proposals of Government Nominee Directors in SIDBI and NHB. DFS. Matters related to Budget Announcements, Output- Laying of annual reports of SIDBI and NHB before the outcome Monitoring Framework. Sustainable parliament. All matters related to Educational Loans Development Goals – Indicators pertaining to DFS. including Vidyalakshmi Portal. All matters related to 1.17 Industrial Finance-I(IF-I) Pradhan Mantri Mudra Yojana (PMMY). Matter related to psbloansin59minutes portal. Administration of the “Export-Import Bank (EXIM Bank) Act, 1981”; All issues relating to EXIM Bank, IIFCL Micro Finance (IF-II) - Matters related to Micro and IFCI Ltd. including appointment of Whole Time Finance Institutions and Legislation thereon, Self Help Directors (WTDs), Non-official Directors (NoDs) and Groups as well as NABARD’s Micro Finance, etc. 261Annual Report 2020-2021 1.19 Vigilance in LIC. Foreign operations/ subsidiaries of LIC. References on Social Security Schemes and other life Consultation with CVC/CTE. Nomination of insurance schemes. Review of performance and making CVOs for PSBs/FIs/PSICs. Correspondence with CBI. budgetary provisions for various GOI funded schemes Annual Action Plan on Anti-Corruption measures. such as Janashree Bima Yojana, Shiksha Sahayog Investigation of cases of frauds by CBI & RBI. Matters Yojana, Varishatha Bima Yojana and Framing rules and under Prevention of Corruption Act. Preventive vigilance. Implementation of social security schemes viz. PMJJBY Vigilance systems and procedures in RBI/PSBs/FIs and & PMSBY. Convergence of life and personal accident Insurance Companies PFRDA and IRADI/RBI. Inquiry into insurance schemes to PMJJBY & PMSBY. Managing complaints against GMs/EDs and CMDs of PSBs/FIs/ Mission Office for monitoring & implementation of PSICs/PFRDA and IRADI/RBI and Vigilance Surveillance PMJJBY & PMSBY. All Government sponsored/ over them. Major frauds in PSBs (in India and abroad). supported schemes in insurance except crop insurance PMO references on anti-corruption measures. Bank schemes. Senior Citizens’ Welfare Fund. Other Social security, robberies & loss prevention in banks. Sanction Security Group Insurance Schemes under LIC. Central of prosecution in case of ED/CMDs. War Book Matters. Government Employees Group Insurance Scheme. Annual Reports of CVC. Conduct Regulation in PSBs/ Postal Life Insurance Scheme. All Government FIs, employment after retirement regulations in PSBs. sponsored/ supported schemes in life insurance. Any CVC/CBI references relating to DRTs/DRATs. Vigilance other life insurance or social security products/ scheme clearance, sanction of prosecution and any other matter proposals. Others: Appellate Authority constituted under of Board level appointees of PSBs, FIs, PSICs, PFRDA, Section 110H of the Insurance Act, 1938. IRDA and RBI. Vigilance matters of Officials in DFS, Officers of Office of Custodian and Government Officials Coordination work relating to the following in DRTs/DRATs. Joint Parliamentary Committee (JPC) Committees: Committee for the Welfare of Women; (which enquired into irregularities in securities Committee for the Welfare of SC/ST; Estimates transactions). Disciplinary action against bank Committee, Committee on Subordinate Legislation. employees/executives involved in irregularities in Appointments- LIC - Selection & appointment of securities transactions. Establishment matters relating Chairman/ MDs, LIC, appointment of Directors on the to Special Courts/Office of the Custodian. All issues Board of LIC, appointment of ex-officio members on the pertaining to continuation of posts, budget matters of the subsidiaries of LIC; Permission for foreign deputation/ O/o Custodian and Special Court including extension of tour of Chairman and MDs of LIC; Permission for the O/o Custodian and appointment of Custodian. commercial Employment after Retirement for Chairman/ 1.20 Debts Recovery Tribunals (DRT) MDs, LIC and other executives of LIC; IRDA - Appointments of Chairperson and Members of IRDA; Administration of the Recovery of Debts and Service condition of Chairman, Members and employees Bankruptcy Act, 1993 (RDB Act), Establishment of Debts of IRDA; Budget and Funds of IRDA; Other matters Recovery Tribunals/Debts Recovery Appellate Tribunals relating to Brokerage agencies, entry of new companies (DRATs) under RDB Act, filling up of the posts of and regulations of IRDA. Chairpersons, Presiding Officer, Registrars and Recovery Officers, and monitoring filling up of other posts in DRTs/ Service Matters (LIC) - Service matters, rules and DRATs; Budget provisions, monitoring etc. relating to regulations, representations on service matters by DRTs/DRATs. employees in LIC, Service matters of Development Officers/ Agents/Intermediaries; Wage Revision/ Bonus/ Administration of the Securitisation and VRS in LIC / Public Sector General Insurance Cos; Reconstruction of Financial Assets and Enforcement of Implementation of Pension Scheme/ policy matters on Security Interest Act, 2002 (SARFAESI Act), including commercial employment. Citizen’s Charter of Life legal cases thereof and ease of doing business, Insurance Corporation Ltd. appointment of Registrar/MD & CEO of the Central Registry of Securitisation Asset Reconstruction and Institute of Actuaries of India - Administration of Security Interest (CERSAI) and Central Know Your Client the Actuaries Act, 2006, Framing of Rules / regulations Records (CKYCR) Registry matters. under the Actuaries Act 2006. Constitution of Quality Review Board, Appellate Authority, nominations on the 1.21 Insurance-I (Ins.-I) council of IAI. Administration of LIC Act, 1956. Administration 1.22 Insurance-II (Ins.-II) of IRDA Act, 1999. LIC Business -Review of the performance of LIC. Laying of Reports of LIC in Insurance Sector Reforms - All matters relating Parliament. Opening/ winding up of branches of LIC in to reforms in insurance sector; Reforms related India. Appointment of Auditors for LIC. Administration amendments to Insurance Act, 1938, GIBNA, 1972, of PP Act in LIC and references relating to Estate matters Implementation of Law Commission Reports. 262Department of Financial Services V Appointments - Policy issues concerning selection Framing of rules, appointment and service matter of Chief Executives in the PSU insurance companies related to Insurance Ombudsman. WTO multi-lateral/ including AICL and GIC; Appointment on the Boards of bilateral agreements; Inter-Government agreement public sector non-life companies including AICL; Foreign between India and any other country. Matters related to IIISLA & NIA Pune. deputation of Insurance executives; permission for Chief Executives of non-life companies including AICL. Committees:- Standing Committee on Finance; Committee on Subordinate Legislation; Petitions General Insurance: Review of the performance Committee; Committee on Public Undertaking (COPU). of General Insurance Companies including AICL; Matters relating to Insurance Schemes of Public Sector General 1.23 Pension Reforms (PR) Insurance Companies including AICL and audit paras Coordinating and introducing pension reforms; thereon; Computerization of public sector general policy matters with regard to the National Pension System insurance companies; References relating to Surveyors (NPS) and the Atal Pension Yojana (APY). The and Agents of non-life PSICs; Foreign operations of public administration of the Pension Fund Regulatory and sector general insurance companies; Reference relating Development Authority (PFRDA) Act, 2013, and the to Re-insurance, Third Party Administrators, Tariff administrative matters relating thereto viz. framing Rules Advisory Committee; Opening/ winding up of branches ; under PFRDA Act, 2013 processing appointments of Administration of War Risk (Marine Hull) Reinsurance Chairperson and Board member of PFRDA, Budget and Schemes, 1976; Reference from RBI on permission for Funds of PFRDA and providing legislative and policy release of foreign exchange for insurance policy abroad; prescriptions to PFRDA. Laying down of Annual reports of General Insurance Implementation and monitoring of the National Companies/ GIC/ AICL; Administration of PP Act in non- Pension System (NPS), Swavalmban Scheme and the life insurance companies and references relating to Estate Atal Pension Yojana, including extension of its coverage matters in those companies. Opening and winding of to State Governments, private sector, and unorganised branches of PSGICs. I-card for staff and executives of sector. Insurance Companies. Service matter, rules and regulations of PSGICs, including GIC & AICIL. Matters 1.24 IT Cell related to crop insurance. FDI in Insurance Sector. Work related to development and maintenance Coordination- Work relating to Budgeting, Tax of DFS website, information technology, Fintech, Digital proposals, Budget Announcements relating to insurance, India Initiatives, e-office, adoption and promotion of digitization in various activities pertaining to financial Annual Report, Economic Survey, India Reference services and putting in place cyber security measures Annual, Economic Editors Conference, PMO/ Cabinet for safety of digital assets of the sector. The division References, CII & FICCI, within Insurance Division, matter functions in close association with NIC in performance related to e-payments in Insurance Companies, of these activities. computerization of Insurance Companies. Party Administrators, Tariff Advisory Committee; Opening/ 1.25 GST Cell winding up of branches; Administration of War Risk Overseas preparedness of all institutions under (Marine Hull) Reinsurance Schemes, 1976; Reference DFS to implement GST, to provide inputs to the “ Banking, from RBI on permission for release of foreign exchange Financial and Insurance” Sectoral Group with reference for insurance policy abroad; Laying down of Annual to GST. Other matters related to coordination, rollout and reports of General Insurance Companies/ GIC/ AICL; implementation of GST w.r.t institutions under Administration of PP Act in non-life insurance companies administrative control of DFS etc. and references relating to Estate matters in those companies. 1.26 Surplus Cell All service matters and day to day administrative Grievances - Public grievances against services matters related to surplus staff of AAIFR & BIFR including provided by Public Sector Insurance Companies including their redeployment. consultation with DoPT, handling of GIC, AICL and other than on service matters; Periodical court cases of surplus staff. RTI and personal matters meetings of Public Grievances Officers of public sector of surplus staff such as leave, retrial benefits, perks & insurance companies; Functioning of internal public allowances etc. grievances redressal machinery in public sector insurance companies; Functioning of external redressal machinery Performance and Significant Developments like Consumer Courts, Ombudsmen, Lok Adalats, MACT 2. Overview of banking and Courts etc; Appellate Authority constituted under Section 110H of the Insurance Act 1938.Citizen’s Charter Public Sector Banks (PSBs), the mainstay of the of Non-Life Insurance Companies. Indian banking industry, and PSB-sponsored Regional 263Annual Report 2020-2021 Rural Banks (RRBs) have dominant market presence and (ii) 60 percent of outstanding credit, and constitute the major proportion of the bank network of (iii) 71% of total branches and 65% of ATMs. Scheduled Commercial Banks (SCBs). PSBs play an important role in fuelling investment needed for the In absolute terms, PSBs have a total deposit of Rs.94.34 country’s economic development, with a share vis‘-a-vis‘, lakh crore and total advances amounting to Rs.64.86 lakh that of SCBs, being — crore, as on 30.9.2020. (i) over 65 percent of deposits; PSBs in India have played a pivotal role in reasons for spurt in stressed assets have been observed transforming the Indian economy from one characterised to be, inter alia, aggressive lending practices, wilful by low savings and credit-to-GDP rates of 11.2% and default/loan frauds/and economic slowdown. Further, 12.2% respectively at the time of bank nationalisation to extant guidelines which permitted restructuring ended current levels of 30.1% and 56% respectively, powering on 31.3.2015. India’s growth story. However, over the first half of the Thereafter, transparent recognition was done last decade, they witnessed excessive build-up of stress through Asset Quality Review (AQR) initiated in 2015 in their loan portfolios, although this remained hidden till transparent recognition of stressed loans as NPA began for clean and fully provisioned bank balance-sheets in 2015. As per Reserve Bank of India (RBI) data, revealing high incidence of non-performing assets aggregate gross advances of PSBs increased from (NPAs). As a result of AQR and subsequent transparent Rs.18,19,074 crore as on 31.3.2008 to Rs.52,15,920 recognition by banks, stressed accounts were crore as on 31.3.2014. As per RBI inputs, the primary reclassified as NPAs and expected losses on stressed 264Department of Financial Services V loans, not provided for earlier under flexibility given to recapitalisation and reforms, their gross NPAs have since restructured loans, were provided for. Further, all such declined from Rs. 8,95,601 crore as on 31.3.2018 to Rs. schemes for restructuring stressed loans were 6,09,129 crore as on 30.9.2020. The status of Standard withdrawn in the financial year (FY) 2017-18. As a result Restructured Assets (SRA) is as under. of Government’s strategy of recognition, resolution, 2.1 Comprehensive banking reforms provide asset details, and for the lender to get possession of mortgaged property within 30 days. Comprehensive steps have been taken under the Government strategy to reduce NPAs of PSBs, (c) suits for recovery of dues being filed by banks affecting change in credit culture, including, inter-alia, before Debts Recovery Tribunals (DRTs) and six the following: new DRTs being established to expedite recovery. (a) the Insolvency and Bankruptcy Code (IBC) Further, the Government announced an fundamentally changing the creditor-borrower unprecedented Rs.2.11 lakh crore recapitalisation in relationship, taking away control of the October, 2017, through infusion of capital by the defaulting company from promoters/owners Government and raising of capital by banks from the and debarring wilful defaulters from the markets. In the budget for FY 2020-21, Rs.20,000 crore resolution process and debarring them from was provided for capital infusion in banks, of which raising funds from the market. Rs.5,500 crore has been infused. Till date, Government has infused Rs.2.7 lakh crore in PSBs since October, 2017 (b) the Securitisation and Reconstruction of and an additional amount of Rs.1.63 lakh crore has been Financial Assets and Enforcement of Security mobilised by banks from FY2017-18 till December, 2020. Interest Act, 2002 being amended to make it more effective, with provision for three months’ A PSB Reforms Agenda in January, 2018 for imprisonment in case the borrower does not publically reported, independently measured and 265Annual Report 2020-2021 benchmarked reforms was pursued through a unique Advantages of the platform are as below: Enhanced Access & Service Excellence (EASE) Reforms (1) An online platform such as TReDS allows Index that enabled objective and benchmarked progress the seller multiple factors (financiers) to on all key areas in PSBs — viz., governance, prudential choose from. lending, risk management, technology- and data-driven banking, and outcome-centric HR. (2) The process of uploading an invoice is paperless and the seller does not require Root causes of weaknesses in PSBs have been uploading the documents multiple times. systematically addressed through the annual EASE Reforms Index for FY19 and FY20 (EASE 1.0 and EASE (3) The process allows the seller to choose from 2.0). These have equipped Boards and leadership for a variety of interest rates and that too without effective governance, instituted risk appetite frameworks, any collateral. created technology and data-driven risk assessment and (4) The lowest interest rate allows the seller to prudential underwriting and pricing systems, set up loan get the best deal in the most transparent management systems for faster processing and tracking, manner. introduced Early Warning Signals (EWS) systems and specialised monitoring for time-bound action in respect (5) It saves MSMEs from visiting multiple banks of stress, put in place focussed recovery arrangements, to avail credit at the best rate. and established outcome-centric HR systems. The following initiatives have been taken for Specific steps taken over the last two years operationalisation of TReDS Platform. include, inter alia, the following: (1) All three entities approved by RBI, i.e. (1) Tech-enabled, smart banking Receivables Exchange of India Ltd. (RXIL), Axis Bank Ltd. and Mynd Solutions Pvt. Ltd. (i) Setting up of Loan Management Systems and have been operationalized in the year 2017 Centralised Processing Centres, resulting in retail and started operations in their exchanges. loan disbursement turnaround time reducing from 31 days in the fourth quarter (Q4) of FY2017-18 (2) As on 01.01.2021,12,05,024 invoices to the to 10 days in Q4 FY 2020-21. tune of Rs.28,181.97 crore have been discounted since inception. (ii) Systematic improvement effected to mobile and Internet banking (3) Further Ministry of MSME has issued a notification on 02.11.2018, making it a. Number of services offered, customer- mandatory for all CPSEs and Corporates friendliness, and local language customer- with a turnover of more than Rs.500 crore interface of PSBs, having business greater to be on-boarded on TReDS. than Rs.5 lakh crore, has improved significantly, compared to their private sector (4) All MSMEs exempted from paying counterparts, having comparable business. onboarding fee till Mar, 2021. b. Enabled by improved functionality, increase (5) DFS is monitoring the operations made by in the share of the six largest PSBs in the three exchanges on weekly basis. mobile banking transactions of the largest (b) PSB 59 minutes platform 10 Indian banks by business size from 49% in Q4 FY2018-19 to 57% in Q4 FY2019-20. Features (iii) Launch of PSBloansin59minutes.com and Thepsbloansin59minutes portal was adoption of the Trade Receivables Discounting launched on November 02, 2018 with a view to System (TReDS) for digital lending for MSMEs facilitate in-principle approval of loans of upto and retail. Rs.1 crore to small and medium businesses (a) TReDS platform without human intervention, using independent data such as GST returns, IT returns and bank To resolve the problem of delayed payment statements to judge the credit withdrawal of the of receivables of MSMEs, RBI had granted business. The portal has provision for Bank URL ‘in-principle’ approval to three entities [viz., for each Bank which can be used by it for its Receivables Exchange of India Ltd. (RXIL), own customer digital on boarding as well as Axis Bank Ltd. and Mynd Solutions Pvt. Ltd.] renewal. The portal has been instrumental in on November 24, 2015 for setting up/ operationalization of Trade Receivable getting more MSMEs into the formal banking Discounting Systems (TReDS) Platforms. sector. 266Department of Financial Services V Initiatives manager for seamlessly meeting their requirements across business verticals The scope of this portal has now been enlarged within the bank. by enhancing to maximum loan amount from Rs.1 crore to Rs.5 crore of funding. In addition to Public Sector (2) Monitoring of loans Banks, seven Private Sector Banks and one Co-operative Institution of comprehensive, automated bank have been unboarded on the portal for MSME Early Warning Systems (EWS) in banks, with ~80 customers. The portal has now also been extended to EWS triggers, use of third-party data and cover retail loan products of Banks i.e., Home Loan, Auto workflow for time-bound remedial actions, to Loan and Personal Loans. Loans under Pradhan Mantri proactively detect stress and reducing slippage Mudra Yojana (PMMY), Bank of Baroda’s ‘’One District- into NPAs. One Product’ and State Bank of India’s (SBI) ‘’Dealer Financing Scheme (e-DFS)’’ are also live on the platform. (3) Risk management Status as on 31.12.2020 (i) Institution of technology- and data-driven Risk Scoring and Scrutiny systems in banks Number of Amount No. of Loans Amount that comprehensively factor in third-party Loans Sanctioned Disbursed Disbursed data and non-financial risk factors and sanctioned (Rs.in Crore) (Rs. in Crore) 2,21,683 71,131 2,07,726 58,665 provide for higher scrutiny of high-risk cases. (ii) Institution of risk appetite frameworks in (iv) Adoption of a comprehensive agenda for smart, banks and improved adherence to risk- tech-enabled banking for FY2020-21, under based pricing. which, inter alia— (iii) Adoption of improved credit policies that a. State Bank of India has initiated straight- provide for improved consortium lending, through processing of loans to micro- ring-fencing of cash flows, and enterprises through eShishu Mudra disbursement arrangements. platform, and other larger PSBs have initiated steps in this regard. (iv) Empowerment of bank Boards to recruit the bank’s Chief Risk Officer from the market, b. Most PSBs have put in place advanced on market-linked compensation. queue management systems in transaction- intensive branches, with single-window (4) Resolution and recovery operations, to reduce customer waiting and transaction time. (i) Significant extension of the erstwhile stressed asset resolution framework and c. A few PSBs have introduced centralised building in incentives for early adoption of a processing hubs for faster time-bound resolution plan through RBI’s revised processing and app-based loan application prudential framework on stressed assets, and offers for agricultural loans. issued on 07.06.2019. d. Larger PSBs are providing customer-need (ii) Setting up of stressed assets management driven credit offers through analytics. verticals for focussed slippage prevention, e. Larger PSBs are instituting an integrated recovery arrangements and time-bound account management framework for large action in respect of large-value stress corporates, with single-point relationship accounts. 267Annual Report 2020-2021 (iii) Putting into place one-time settlement property search features and navigational platforms and portals, e-B#ÉEªÉ platform for links to all the PSB e-auction sites in online auction of stressed assets, and eDRT February, 2019. for online recovery case management. b. The property details on e-B#ÉEªÉ website The following key initiatives have been taken in https://ibapi.in are structured and this regard in DRTs: segregated for an enhanced user experience through seamless single-window a. In pursuance of Section 19A of the RDB Act, access to information by search across 1993 the e- filing rules have been framed banks or limited to a selected bank, based and notified vide Notification dated on the type of location of the property. 23.01.2020. The said rules provide for the procedure to be followed for filing of pleading c. In the second phase, a common e-auction in electronic form before the DRTs and portal, for all the PSBs was developed, with DRATs. It also prescribes for the uploading access through eB#ÉEªÉ site and e-auctions of information by the DRTs and DRATs. Total hosted by MSTC Ltd. The project was 1830 cases were e- filed during the period launched by Hon’ble Finance Minister on 24.1.2020 to 06.07.2020 28.12.2019. b. e-DRT Project- The e-DRT project to digitize (5) Governance the functioning of all 39 Debts Recovery (i) Board empowerment including through— Tribunal (DRTs) and 5 Debts Recovery Appellate Tribunals (DRATs) has been a. entrustment of final appraisal of MD and implemented through the National other senior executives. Informatics Centre (NIC). The e-DRT project b. power to decide on institution of CGM level, has automated the full cycle of workflow of recruitment of CRO from the market, setting DRATs and DRTs, which has brought sitting fees, etc. transparency and increased their efficiency. The project has ensured online availability c. peer reviewing non-official directors. of case and access to e-filing and e- (ii) Introduction of non-executive chairmen. payment. (iii) Strengthening of the Board committees c. Online Hearings: Video Conferencing (VC) system. links were got provided to DRATs/DRTs through NIC, w.e.f. 29.4.2020, to enable (iv) Effective use of non-official directors, by online hearing of urgent cases during the giving them mandate to play role akin to present COVID -19 outbreak, since physical independent director, and institution of their hearings are not being held at present. Till peer evaluation and training. 31.10.2020, 39383 cases were heard (v) Increased management strength on the through VC. Board (additional Executive Director). d. As per data made available by DRTs, a total 2.2 Turnaround in performance of PSBs number of 29863 cases (Original Since the institution of comprehensive reform in Applications) involving Rs.38,74,302 crore the second half of FY2017-18 following the completion approximately were disposed of by 39 DRTs of recognition of legacy stress as NPA, PSBs have during period 1.04.2019 to 31.03.2020. returned to profitability with sound financial health and Details of e-B#ÉEªÉ are as below: durable technology-enabled systems to prevent recurrence of past weaknesses. This is reflected in– a. In coordination with the Indian Banks’ Association (IBA) and Allahabad Bank, the (1) Gross NPAs have reduced from Rs.8.96 lakh Department of Financial Services got a crore in March, 2018 to Rs.6.09 lakh crore in common landing platform developed with September, 2020; 268Department of Financial Services V (2) Record recovery of Rs.2.54 lakh crore has been efficient banks by leveraging economies of scale and effected since March, 2018 till September, 2020; synergies for, inter alia, operational efficiencies, thrust on adoption of technology for efficient banking and greater (3) Occurrence of frauds has declined sharply, from financial capacity to support economic growth through an average of 0.72% of advances during FY lending, Vijaya Bank and Dena Bank were amalgamated into Bank of Baroda in 2019 and Oriental Bank of 2009-10 to FY2013-14 and peak of 1.01% in Commerce and United Bank of India into PNB, Andhra FY2013-14 to 0.23% in FY2019-20; Bank and Corporation Bank into Union Bank of India, Syndicate Bank into Canara Bank, and Allahabad Bank into Indian Bank, in 2020. 2.4 Regional Rural Banks 2.4.1. Revitalizing Regional Rural Banks (RRBs) The RRBs were established with the objective of creating an alternative channel to rural credit structure to facilitate credit support to farmers for meeting their cultivation and other related needs. As on 31st March, 2020, 45 RRBs are operating through a network of 21,847 branches (21,871 branches as on 31st March, 2019) covering 696 districts. All branches of RRBs are on CBS Platform. Keeping in view the increased requirement of Agri. Sector and to meet the challenges ahead, the Government decided in 2015 to increase the authorised capital of RRBs to Rs.2000 crore from Rs.5 crore. 2.4.2 Amalgamation of RRBs With a view to enable RRBs to minimize their overhead expenses, optimize the use of technology, enhance the capital base and area of operation and increase their exposure, Government of India initiated the amalgamation process of RRBs in 2017-18 on the basis of their location within a State. As a part of this process, during 2019-20 16 RRBs were amalgamated (4) Reduction in the number of PSBs placed under into 8 RRBs in seven States of Assam, Gujarat, RBI’s Prompt Corrective Action framework from Jharkhand, Karnataka, Madhya Pradesh, Tamil Nadu & 11 to 3; Uttar Pradesh, thereby bringing down the number of RRBs to 45 as on 31st March, 2020 from 53. Furthermore, (5) As many as 11 PSBs out of 12 reporting profits amalgamation of Baroda Uttar Pradesh Gramin Bank, in the first 6 months of FY2020-21, amounting to Kashi Gomti Samyut Gramin Bank and Purvanchal Rs.14,688 crore; Gramin Bank in the state of Uttar Pradesh has been (6) The Capital to Risk-weighted Assets Ratio effected to form Baroda UP Bank with effect from 1st April, (CRAR) being 264 basis points above the 2020 thereby bringing the total no. of RRBs to 43. It is regulatory minimum of 10.875%, at 13.51% in expected that amalgamation of RRBs will bring about better efficiency of scale, higher productivity, robust September, 2020; and financial health of RRBs, improved financial inclusion and (7) The highest provision coverage ratio in over 81/2 greater credit flow to rural areas. years at 85.06% in September, 2020. 2.4.3 Capital Infusion for Improving CRAR 2.3 Amalgamation of Public Sector Banks On the recommendation of EFC, the Cabinet Over the last five years, PSBs have not only Committee on Economic Affairs (CCEA) in its meeting cleaned up legacy stress and addressed underlying held on 25.03.2020, gave its approval for continuation of systemic weaknesses, but have emerged stronger as a the process of recapitalisation of Regional Rural Banks result of comprehensive and institutionalised EASE (RRBs) by providing minimum regulatory capital to RRBs reforms. To further leverage the positive impacts brought for another year beyond 2019-20 i.e. up to 2020-21 for about though reforms and with the aim of enhancing the the RRBs which are unable to maintain minimum CRAR efficacy of the banking sector by creating strong and of 9%. The CCEA also approved utilisation of Rs.670 269Annual Report 2020-2021 crore (which includes Rs.470 crore allocated in RE 2019- With the Government and RBI working in tandem, as part 20 and Rs.200 crore allocated in BE 2020-21) as Central of these COVID-19 packages, the comprehensive Government Share for the scheme of Recapitalisation of measures undertaken to support and boost the economy, RRBs. include, inter alia, the following: During 2019-20, Government of India has released their (1) Liquidity support— share amounting to Rs.700.50 crore (out of allocation of i. reduction in cash reserve ratio by 100 basis Rs.235 crore in BE 2019-20 + Rs.470 crore in RE 2019-20) as recapitalisation assistance to 12 RRBs. points (bps) releasing primary liquidity of around Rs.1.37 lakh crore, uniformly across 2.4.4 Pension Scheme for Employees of RRBs the banking sector. Consequent upon adoption of RRB Pension ii. reduction in liquidity coverage ratio from Scheme & Regulations, 2018 by the Board of Directors 100% to 80% easing the liquidity position. of all RRBs and publication /notification of the Regulations in the Gazette of India, all RRBs have started the payment iii. reduction of 115 bps in policy repo rate of pension to eligible pensioners/family pensioners. reducing interest burden on borrowings and a 155 bps reduction in reverse-repo rate to 2.4.5 Financial Performance of RRBs induce banks to on-lend surplus funds to productive sectors of the economy. (Amount in Rs. crore) As on iv. conducting of targeted long-term repo 31st March 30 September operations (TLTRO) repo auctions of up to 3- 2020 2020 year tenor for a total amount of Rs.1 lakh crore Owned Funds 34,663 36,284 for investing in corporate bonds, CPs and NCDs with concession in MTM guidelines. Deposits 4,78,737 5,01,873 Loans & Advances 2,98,214 3,10,244 (2) Lending has been promoted by enabling ease of Non-Performing credit through— 31,106 29,569 Assets (NPAs) i. Providing concessionary credit to PM-KISAN beneficiaries, including fishermen and animal husbandry farmers, through Kisan 2.4.6 Profitability and Accumulated Losses Credit Cards. During 2019-20, 26 RRBs earned profit of Rs.2,203 crore. However, 19 RRBs incurred losses during ii. Providing additional emergency working the year aggregating to Rs.4,411 crore. Therefore, RRBs capital funding for farmers, including small as an entity incurred a net loss of Rs. 2,208 crore during and marginal farmers, through additional 2019-20. refinance support through NABARD. 2.5 Role of Banks during the COVID-19 pandemic iii. Providing a Rs.5000 crore special credit facility to PM SVANidhi beneficiaries During the COVID-19 pandemic period, banks enabling easy access to working capital by ensured uninterrupted and seamless banking facilities street vendors whose livelihoods have been including electronic payments even during the lockdown. adversely impacted due to COVID-19. Large scale cash transfers were effected as part of implementation of PMGKY and Atmanirbhar Bharat iv. Providing additional emergency credit line Package. of up to 20% of outstanding credit to To mitigate the burden of debt servicing brought business entities banking with PSBs and about by disruptions on account of the COVID-19 having outstanding credit of up to Rs.50 pandemic and to ensure continuity of businesses, crore and turnover of up to Rs.250 crore, Government, on 24.03.2020, announced certain relief and the scheme has been extended to measures in view of COVID-19 outbreak and followed it individuals who already had loans for up on 12.05.2020 with the Aatmanirbhar Bharat Abhiyan business purposes. stimulus package, a post pandemic economy plan aimed at helping the economy recover from the impact of Covid- v. Providing of additional loan facility by PSBs 19, the details of which followed the announcement in as emergency relief to their existing five daily tranches. RBI too announced relief regulatory borrowers, without additional margin, packages for COVID-19 on 27.03.20 and 23.05.2020. security or processing fee. 270Department of Financial Services V vi. Providing interest subvention for MUDRA- (vi) increasing the maximum permissible period Shishu loans. of pre- and post-shipment export credit sanctioned to 15 months, for disbursements vii. Scheme for restructuring of loans to made till 31.07.2020. MSMEs. (vii) grant of ex-gratia payment of difference viii. Facilitating revival of real sector activities between compound interest and simple and mitigating the impact on ultimate interest for six months of moratorium borrowers by providing a window under the (01.03.2020 to 31.08.2020) to borrowers in Prudential Framework to enable the lenders specified loan accounts for providing relief to implement a resolution plan in respect of to distressed/vulnerable small borrowers eligible corporate exposures without change in ownership, and personal loans, while having certain specified categories of loan classifying such exposures as standard. accounts, such as loan accounts pertaining to MSME loans, education loans, housing ix. Extending the credit linked subsidy scheme loans, consumer durable loans, credit card for housing for middle income group till dues, auto loans, personal loans to March 2021. professions and consumption loans, in the (3) Support to existing debtors across the economy context of the ongoing global pandemic. and regulatory relief to the banks has been 3. Financial Inclusion enhanced through¯ The Government initiated the National Mission (i) grant of a moratorium of six months on for Financial Inclusion (NMFI) namely, Pradhan Mantri payment of all term loan instalments falling Jan Dhan Yojana (PMJDY) in August, 2014 to provide due between 01.03.2020 and 31.08.2020, universal banking services for every unbanked without asset classification downgrade. household, based on the guiding principles of banking (ii) deferment of recovery of interest on working the unbanked, securing the unsecured, funding the capital during the moratorium period and unfunded and serving unserved and underserved areas. allowing repayment of accumulated interest as funded interest term loan till March 2021. 3.1 Access to banking (iii) exclusion of the moratorium period for 3.1.1 Banking Service Points: PMJDY aimed at purposes of classifying an overdue loan providing banking service points throughout rural India account as a non-performing asset (NPA). by mapping over 6 lakh villages into 1.6 lakh Sub Service Areas (SSAs). Each SSA typically comprised of 1,000- (iv) concessions in timelines for resolution to be 1,500 households. Out of 1.6 lakh SSAs, 1.3 lakh SSAs adhered to by lenders under RBI’s Prudential are covered through interoperable, online BCs and Framework on Resolution of Stressed Assets, remaining 30,000 are covered through bank branches. with extension of resolution timelines to exclude BCs deployed in rural areas also provide interoperable the period from 01.03.2020 till 31.08.2020. Aadhaar Enabled Payment System (AePS) banking (v) increasing the threshold of default under services. section 4 of Insolvency and Bankruptcy Code from Rs.1 lakh to Rs.1 crore with the The strength of bank branches and ATMs has intention to prevent triggering of insolvency been augmented over the years. Following tables show proceeding against MSMEs. the number of bank branches, ATMs. Table showing the number of bank branches of Scheduled Commercial Banks As on Rural Semi-Urban Urban Metropolitan Total 31.03.2016 48,263 37,575 24,010 25,459 135,307 31.03.2017 49,857 38,996 25,054 26,478 140,385 31.03.2018 50,807 39,617 25,377 26,434 142,235 31.03.2019 51,545 41,028 26,318 27,056 145,947 31.03.2020 52,313 42,244 27,233 28,028 149,818 30.09.2020 52,412 42,382 27,382 28,072 150,248 Source: RBI 271Annual Report 2020-2021 Table showing number of ATMs of Scheduled Commercial Banks (SCBs), Small Finance Banks (SFBs), Payment Banks (PBs) and White Label ATM Operators As on Off-site ATMs On-site ATMs Total ATMs 31.03.2016 97149 101950 199099 31.03.2017# 112666 # 109809 222475# 31.03.2018# 115471 # 106776 222247# 31.03.2019# 115323# 106380 221703# 31.03.2020# 121086# 113271 234357# 30.09.2020# 120263# 113981 234244# Source: RBI # Includes ATMs deployed by White Label ATM Operators. The number of card acceptance devices of Point 2014 to 53.94 lakh in September, 2020. of Sale (POS) has increased from 10.7 lakh in March, 3.1.2 Performance of PMJDY Major achiev e m e n t s o f P M J D Y a r e a s u n d e r : (Numbers in Crore) Breakup by Gender Breakup by Geography Deposits in PMJDY No of No of No of No of PMJDY As on Accounts (in PMJDY PMJDY PMJDY PMJDY Accounts (in Crores) Accounts Accounts Accounts Accounts Rs. Crore) (Male) (Female) (Rural/ (Urban/ Semi Urban) Metro) March'15 14.72 7.15 7.39 8.68 5.86 14,641 March'16 21.43 10.37 11.05 13.17 8.26 35,672 March'17 28.17 13.67 14.49 16.87 11.3 62,972 March'18 31.44 14.85 16.60 18.52 12.92 78,494 March'19 35.27 16.53 18.74 20.90 14.37 96,107 March'20 38.33 17.85 20.48 22.63 15.70 1,18,434 As on 41.60 18.56 23.04 30.60 14.24 1,35,740 06.01.2021 (i) A total of 41.60 crore Jan-Dhan accounts have annum for PMSBY and PMJJBY respectively, been opened till 06.01.2021 under PMJDY, with eligible beneficiaries under these 2 schemes can a deposit balance of Rs.1,35,740 crore. The get accidental and life insurance cover of Rs.4 average deposit balance is approx. Rs.3263 per lakh at an average premium of less than Rs.1 PMJDY account. per day. (ii) There are 23.04 crore (55.38%) women Jan- (v) Out of total operative accounts opened under Dhan account holders, with about 27.36 crore PMJDY, 84.10% have been seeded with Aadhaar (65.77%) accounts opened in rural and semi- number of the account holder on user consent urban areas. basis, which has enabled interoperable and immediate Aadhaar based transactions, including (iii) Approximately 30.60 crore RuPay cards with an for Direct Benefit transfer (DBT) through Aadhaar inbuilt accidental insurance of Rs.1 lakh (Rs.2 Payment Bridge. lakh for accounts opened after 28.8.2018) coverage have also been provided to PMJDY (vi) A digital pipeline of Jan-Dhan Aadhaar Mobile account holders. (JAM) has been laid by linking of Jan-Dhan account with mobile number and Aadhaar. This (iv) Presently, as on 06.01.2021, 31.71 crore infrastructure pipeline is providing the necessary beneficiaries have also been enrolled under backbone for and easing DBT flows, adoption of PMSBY and PMJJBY. Taking into account the social security/pension schemes, facilitating premium of Rs.12 per annum & Rs.330 per credit flows, promoting digital payments, etc. 272Department of Financial Services V Major trends under PMJDY in terms of opening of accounts, deposit balance, average deposit balance, etc. over the time are as under: 3.1.3 With a view to further deepening the financial per data uploaded by the banks on JDD app, out of the inclusion interventions in the country, PMJDY has been 5.54 (5,53,804) lakh mapped villages on the app, 5.53 extended beyond 14.08.2018 with the focus on opening lakh (5,53,119) (99.89%) villages are having branch or of accounts shifting from “every household” to “every BC within a distance of 5 kilometers. unbanked adult” with added emphasis on usage of 4. Key Schemes accounts by enhancing Direct benefit (DBT) flows through these accounts, adoption of social security schemes, 4.1 Pradhan Mantri Mudra Yojana promoting digital payments, etc. Some other modifications were also made to the existing schemes as under: An important aspect of financial inclusion is enabling the flow of credit to small businesses. In (i) Existing Over Draft (OD) limit of Rs.5,000 revised pursuance of the announcement in the Union Budget to Rs.10,000; 2015-16, the Pradhan Mantri Mudra Yojana (PMMY) (ii) No conditions attached for OD upto Rs.2,000; launched on 8th April, 2015 and the Micro Units Development Finance Agency (MUDRA) Ltd. was (iii) Age limit for availing OD facility revised from 18- established as a wholly owned subsidiary of SIDBI. For 60 years to 18-65 years; and achieving sustained expansion in the flow of credit to the (iv) The accidental insurance cover for new RuPay non-corporate small business sector, loans up to Rs.10 card holders raised from existing Rs.1 lakh to lakh without collateral are extended to borrowers under Rs.2 lakhs to new PMJDY accounts opened after PMMY. These loans are extended through partner 28.08.2018. Member Lending Institutions (MLIs) – such as Scheduled Commercial Banks, Non-Banking Financial Companies 3.1.4. Also, Jan Dhan Darshak, a mobile application, (NBFCs) and Micro-Finance Institutions (MFIs). In turn, has also been launched to provide a citizen centric MUDRA Ltd. offers refinance to MLIs for PMMY loans platform for locating banking touch points such as bank extended by them. branches, ATMs, Bank Mitras, Post Offices, etc. in the country. The web version of this application could be The loans under PMMY are categorized as accessed at the link http://findmybank.gov.in . Banks have Shishu (up to Rs.50,000), Kishore (Rs.50,000 to Rs.5 been provided login credentials to upload the GIS location lakh) and Tarun (Rs.5 lakh to Rs.10 lakh). Activities allied of their branches, Business Correspondents and ATMs to agriculture and services supporting these (excluding on the app. As per JDD app, as on 06.01.2021, there are crop loans, land improvement such as canals, irrigation, 1.67 lakh branches, 4.43 lakh BCs (including IPPB-BCs) wells) have also been included under PMMY from April, and 2.08 lakhs ATMs mapped by the banks. Further, as 2016. PMMY credit rose from Rs.1,37,449 crore in 273Annual Report 2020-2021 2015-16 to Rs.3,37,465 crore in 2019-20. More than 27 2.80 crore loans were sanctioned amounting to crore loans were extended of which 88% loans were Rs.1,71,594 crore. Since the inception of the scheme, under SHISHU Category, 68% loans to Women & 51% 27.28 crore loans have been sanctioned amounting to loans to SC/ST/OBC. During 2020-21, till 15.01.2021, Rs.14,02,436 crore. Table3 : Pradhan Mantri Mudra Yojana (Year-wise data) 2020-21 Total 2019-20 PMMY 2015-16 2016-17 2017-18 2018-19 (as on (as on 15.01.21) 15.01.2021) No. of Accounts 3.49 3.97 4.81 5.99 6.22 2.80 27.28 (in crore) Loan Target 1,22,188 1,80,000 2,44,000 3,00,000 3,25,000 3,50,000 1521188 Loan Amount Sanctioned 1,37,449 1,80,528 2,53,677 3,21,722 3,37,465 1,71595 1402436 (Rs. in crore) 4.2 Stand Up India Scheme Scheme intends to leverage the institutional credit structure to reach out to these underserved sectors of Government of India launched the Stand Up India the population in starting Greenfield enterprise. The scheme on 5th April, 2016. Stand Up India scheme aims Scheme facilitates bank loans between Rs.10 lakh to Rs.1 to promote entrepreneurship amongst women, SC & ST crore to at least one Scheduled Caste/ Scheduled Tribe category i.e those sections of the population understood borrower and at least one Woman borrower per bank to be facing significant hurdles due to lack of advice/ branch of Scheduled Commercial Banks for setting up mentorship as well as inadequate and delayed credit. The Greenfield enterprises in trading, manufacturing and 274Department of Financial Services V services sector. To extend collateral free coverage, Up India Scheme also envisages extending handholding Government of India has set up the Credit Guarantee support to potential borrowers. It also provides for Fund for Stand Up India (CGFSI). The scheme is built on convergence with Central/State Government schemes. the concept of providing handholding support to those Applications under the scheme can also be made online, borrowers who might have a project in mind but lack the on the Stand Up India portal (www.standupmitra.in). confidence and capability to start a new enterprises. Stand Performance under Stand Up India Scheme (Amount. in Rs. Crore) SC ST Women Total Date No Of Sanctioned No Of Sanctioned No Of Sanctioned No Of Sanctioned A/Cs Amt. A/Cs Amt. A/Cs Amt. A/Cs Amt. 08.01.2021 14880 3049.70 4397 934.87 85955 19594.27 105232 23578.84 The total number of SC/ST and Woman and the total sanctioned amount as on 08.01.2021 and borrowers extended loans under Stand Up India scheme since inception are tabulated below. Stand Up India as on 08.01.2021 (cumulative) 4.3 Social Security Schemes who give their consent to join / enable auto-debit on or before 31st May for the coverage period 1st June to 31st In order to move towards creating a universal May on an annual renewal basis. Aadhar would be the social security system for all Indians, especially the poor primary KYC for the bank account. The risk coverage and the under-privileged, three ambitious Jan Suraksha under the scheme is Rs.2 lakh for accidental death and Schemes or Social Security Schemes pertaining to full disability and Rs.1 lakh for partial disability. The Insurance and Pension Sector were announced by the premium of Rs.12 per annum is to be deducted from the Government in the Budget for 2015-16. The schemes account holder’s bank / Post office account through ‘auto- were launched on 9th May, 2015, for providing life & debit’ facility in one installment. The scheme is being accident risk insurance and social security at a very offered by Public Sector General Insurance Companies affordable cost namely (a) Pradhan Mantri Suraksha Bima Yojana and (b) Pradhan Mantri Jeevan Jyoti Bima Yojana or any other General Insurance Company who are offering and (c) Atal Pension Yojana. the product on similar terms with necessary approvals and tie up with Banks and Post Offices for this purpose. 4.3.1 Pradhan Mantri Suraksha Bima Yojana As on 6th January, 2021, the cumulative enrolment by (PMSBY) banks, subject to verification of eligibility criteria, is about The Scheme is available to people in the age 21.96 crore under PMSBY and 43,728 claims of group 18 to 70 years with a bank / Post office account Rs.874.56 crore have been disbursed. 275Annual Report 2020-2021 4.3.2 Pradhan Mantri Jeevan Jyoti Bima Yojana enrolled under PMJJBY for the first time during the middle (PMJJBY) of the policy period, payment of pro-rata premium has been allowed at a considerable low premium, as below, The scheme is available to people in the age based on enrolment month: group of 18 to 50 years having a bank / Post office account who give their consent to join / enable auto-debit. Aadhar (i) June/July/August –Annual premium of Rs.330 would be the primary KYC for the bank account. The life payable. covers of Rs.2 lakhs is available for a one year period (ii) September/October/November–3 quarters of stretching from 1st June to 31st May and is renewable. premium@Rs.86.00,i.e. Rs.258 payable. Risk coverage under this scheme is for Rs.2 Lakh in case of death of the insured, due to any reason. The premium (iii) December/January/February– 2 quarters of is Rs.330 per annum which is to be auto-debited in one premium @Rs.86.00 i.e. Rs.172 payable. instalment from the subscriber’s bank / Post office (iv) March, April & May – 1 quarterly premium @ account as per the option given by him on or before 31st Rs.86.00 payable. May of each annual coverage period under the scheme. The scheme is being offered by LIC and all other life As on 6th January, 2021 the gross enrolment by insurers who are offering the product on similar terms banks, subject to verification of eligibility criteria, is about with necessary approvals and tie up with Banks and Post 9.74 crore people under PMJJBY and 2,06,262 claims of Offices for this purpose. To facilitate all those getting Rs.4125.24 crore have been disbursed. 276Department of Financial Services V 4.3.3 Atal Pension Yojana who join APY before 31st March, 2016. The Central Government co-contribution shall be Atal Pension Yojana (APY) was launched by the available for a period of 5 years, i.e., from Hon’ble Prime Minister on 9th May, 2015, and is being Financial Year 2015-16 to 2019-20. implemented with effect from 1st June, 2015. The Scheme aims to provide monthly pension to eligible (6) If the actual returns during the accumulation subscribers not covered under any organized pension phase are higher than the assumed returns for scheme. APY is open to all bank and post office account minimum guaranteed pension, such excess will holders in the age group of 18 to 40 years. Under this be passed on to the subscriber. Scheme any subscriber can opt for a guaranteed (7) The contributions can be made at monthly / pension of Rs.1000 to Rs.5000 (in multiples of Rs.1,000) quarterly / half yearly intervals through auto debit receivable at the age of 60 years. The contributions to facility from savings bank account/ post office be made vary based on pension amount chosen and savings bank account of the subscriber. The the age at time of enrolment. monthly / quarterly / half yearly contribution The key features of APY are as under: depends upon the intended/ desired monthly pension and the age of subscriber at entry. (1) APY is primarily focused on workers in the unorganised sector, however, all citizens of the (8) Major measures/steps undertaken under the APY country in the eligible category may join the Schemes include outreach, financial literacy, scheme. improved digital features, including the APY app on the Unified Mobile Application for New-age (2) Any Indian citizen between 18-40 years of age Governance (UMANG) platform. The exercise of can join through their savings bank account or mapping of APY subscriber’s enrolment data as post office savings bank account. per Local Government Directory (LGD) data has (3) Minimum pension of Rs.1000 or Rs.2000 or been completed and reporting of the same on Rs.3000 or Rs.4000 or Rs.5000 is guaranteed PRAYAS platform started. by the Government of India to the subscriber at the age of 60 years, with a minimum monthly Category wise number of enrolments under contribution (for those joining at age 18) of Rs.42 APY As on 28th November, 2020) or Rs. 84 or Rs.126 or Rs.168 and Rs.210, Category of Banks Number of Subscribers respectively. Public Sector Banks 1,88,93,269 (4) After the subscriber’s demise, the spouse of the Private Banks 17,49,875 subscriber shall be entitled to receive the same Small Finance Bank 20,333 pension amount as that of the subscriber until Payment Bank 5,58,308 Regional Rural Banks 50,17,360 the death of the spouse. After the demise of both District Co-op Banks 52,552 the subscriber and the spouse, the nominee of State Co-op Banks 4,955 the subscriber shall be entitled to receive the Urban Co-op Banks 19,159 pension wealth, as accumulated till age 60 of the Department of Posts 3,13,450 subscriber. Total 2,66,29,261 (5) The subscribers in the eligible age, who are not income-tax payers and who are not covered under any statutory social security scheme, are As on 8th January, 2021, the number of entitled to receive the co-contribution by Central subscribers under APY is more than 2.74 crore. It is Government of 50% of the total prescribed expected that more than 70 lacs subscribers shall register contribution, up to Rs.1000 per annum, and this under APY during the FY 2020-21; reaching an overall will be available for those eligible subscribers, subscriber base of 3.00 crores by March, 2021. 277Annual Report 2020-2021 4.3.4 Pradhan Mantri Vaya Vandana Yojana return with effect from April 1st of the financial year in line with applicable rate of return of Senior Citizens Saving Government had launched the Pradhan Mantri Scheme (SCSS) up to a ceiling of 7.75% with fresh Vaya Vandana Yojana (PMVVY) in 2017 to provide social appraisal of the scheme on breach of this threshold at security during old age and to protect elderly persons any point. The differential return, i.e. the difference aged 60 and above against a future fall in their interest between return generated by LIC and the assured return income due to uncertain market conditions. The scheme would be borne by Government of India as subsidy on is being implemented through Life Insurance Corporation an annual basis. Pension is payable at the end of each of India (LIC). This scheme was first extended up to 2020 period during the policy tenure of 10 years as per the and has further been extended for another three years frequency of monthly/quarterly/ half-yearly/yearly as i.e. up to 31st March 2023. chosen by the subscriber at the time of purchase. The scheme enables old age income security Minimum purchase price under the scheme is for senior citizens through provision of assured pension/ Rs.1,62,162/- for a minimum pension of Rs.1,000/- per return linked to the subscription amount based on month and the maximum purchase price is Rs.15 lakh government guarantee to Life Insurance Corporation of per senior citizen for getting a pension amount of India (LIC). PMVVY offers an assured rate of return of Rs.9,250/- per month. The scheme is being implemented 7.40% per annum for the year 2020-21 for policy duration through Life Insurance Corporation of India (LIC). A total of 10 years. In subsequent years, while the scheme is in number of 5,83,208 subscribers are benefited under the operation, there will be annual reset of assured rate of scheme as on 31st December, 2020. 278Department of Financial Services V 5. Agriculture Credit year given below indicates the sustained trend of actual disbursement, surpassing the incremental annual targets In order to boost the agriculture sector with the year after year. As against the annual target of help of effective and hassle-free agriculture credit, the Rs.13,50,000 crore for 2019-20, agriculture credit to the Government has been fixing annual targets for ground level tune of Rs.13,92,729 crore was disbursed, registering agriculture credit by Scheduled Commercial Banks, 103.17 % achievement. As on 30.09.2020, Rs.7,39,177.94 Regional Rural Banks (RRBs) and Cooperative Banks. crore was disbursed (Provisional) against target of Year wise position of target and achievement under Rs.15,00,000 crore registering 49.28 % achievement. The agricultural credit flow for the last seven years and current year-wise Agriculture Credit against target is as under: (Rs. In crore) * Data is provisional Source: ENSURE Portal of NABARD 5.1 Kisan Credit Card the objective of providing low cost fund support to the States to facilitate quick completion of ongoing rural The Kisan Credit Card (KCC) scheme was introduced in infrastructure projects, which were languishing for want 1998-99, as an innovative credit delivery system aiming of resources. RIDF, with 37 activities under its scope, at adequate and timely credit support from the banking has emerged as a dependable source of public funding system to the farmers for their cultivation needs including of impactful rural infrastructure projects. purchase of inputs in a flexible, convenient and cost effective manner. The Scheme is being implemented by The annual allocation of funds under RIDF has all Cooperative Banks, Regional Rural Banks (RRBs) and gradually increased from Rs.2,000 crore in 1995-96 Public Sector Commercial Banks throughout the country. (RIDF I) to Rs.29,848 crore in 2020-21 (RIDF XXVI). As NABARD monitors the scheme in respect of Cooperative against the allocation of Rs.29,848 crore made during Banks and RRBs, whereas RBI monitors the scheme in 2020-21 for RIDF under Tranche XXVI, sanctions to the respect of Commercial Banks. A revised scheme for KCC tune of Rs.23,634 crore were accorded to various State was circulated by RBI and NABARD in 2012 prescribing Governments (Projected/estimated to be Rs.29,848 crore the provision for ATM enabled debit card which can be by 31st March, 2021). used at ATM/Point of sale (POS) terminal, inter alia, with facilities of one-time documentation and built-in cost The aggregate allocation till 30.11.2020 has escalation in the credit limit, etc. reached Rs.3,78,348 crore, including Rs.18,500 crore for the Bharat Nirman component sanctioned to National The facility of KCC along with interest subvention Rural Roads Development Agency (NRRDA) under RIDF has been extended to Animal Husbandry farmers and XII-XV. Fisheries to help them meet their working capital requirements. Impact evaluation studies on projects funded under RIDF have revealed diverse positive socio- 5.2 Rural Infrastructure Development Fund economic developmental outcomes in rural areas. These (RIDF) projects have brought about an improvement in quality The Government of India had set up Rural of rural life and income levels, besides strengthening the Infrastructure Development Fund (RIDF) in NABARD with rural banking system and credit absorption capacity. 279Annual Report 2020-2021 5.3 Short Term Cooperative Rural Credit 5.7 Role of NABARD in Government of India (Refinance) Fund Initiatives The Short Term Cooperative Rural Credit- STCRC 5.7.1 Long Term Irrigation Fund (LTIF) (Refinance) Fund was set up in NABARD in 2008-09 with The Government of India, in the Dept. of Water an initial corpus of Rs.5,000 crore to provide Short Term Resources, River Development and Ganga Rejuvenation, refinance to Cooperative Banks so as to ensure increased Ministry of Jal Shakti (earlier Ministry of Water Resources) and uninterrupted credit flow to farmers at concessional has taken a major initiative to complete various stalled rate of interest. NABARD provides refinance to Cooperative major/medium irrigation projects in the country, for which bank at an interest rate of 4.5 % per annum for crop loans a Long Term Irrigation Fund (LTIF) was set up in upto Rs.3.00 lakh disbursed by cooperative banks at an NABARD. As on 30th November, 2020, against the total interest rate of 7% per annum to ultimate borrowers. An estimated amount of Rs.77,908 crore for the 99 identified allocation of Rs.44,984.48 crore has been made for the STCRC (Refinance) Fund during 2020-21. As on projects, sanctions have been accorded by NABARD 20.11.2020, Rs.17,772.31 crore has been utilised out of under LTIF to the tune of Rs.71,067.83 crore for 99 STCRC (Refinance) Fund during 2020-21. identified projects, Rs.10,465.52 crore for the Polavaram Irrigation project, Rs.1,378.61 crore for North Koel 5.4 Short Term Regional Rural Bank (Refinance) Reservoir Project, Rs.485.35 crore for Shahpurkandi Dam Fund and Rs.826.17 crore for Relining of Sirhind and Rajasthan Feeder. The cumulative amount released against sanction The Short Term Regional Rural Bank (Refinance) of 99 identified projects stood at Rs.38,726.52 crore. (STRRB) Fund was set up with an allocation of Rs.10,000 Similarly, for Polavaram Irrigation project, North Koel crore in 2012-13, so as to enable NABARD to provide Reservoir Project and Shahpurkandi Dam Project, Short Term refinance to RRBs to meet their crop loan cumulative releases stood at Rs.7664.15 crore, lending obligations. NABARD provides refinance to RRBs Rs.721.22 crore and Rs.119.52 crore, respectively. at an interest rate of 4.5% per annum for crop loans upto Rs.3.00 lakh disbursed by RRBs at an interest rate of 5.7.2 Pradhan Mantri Awaas Yojana- Gramin 7% per annum to ultimate borrowers. Allocation under (PMAY-G) STRRB Fund was at Rs.9,996.55 crore during 2020-21. As on 20.11.2020, Rs.4,206.62 crore has been utilised The Government of India in the Ministry of Rural out of STRRB(Refinance) Fund during 2020-21. Development launched ‘Pradhan Mantri Awaas Yojana- Gramin’ (PMAY-G) on 1st April, 2016, with an objective to 5.5 Long Term Rural Credit Fund (LTRCF): ensure “Housing for All” by 2022. A total of 2.95 crore This fund has been set up for the purpose of houses are to be constructed under PMAY-G {1 crore providing long term refinance support to Cooperative under Phase-I (2016-17 to 2018-19) and 1.95 crore Banks and Regional Rural Banks for their lending towards houses under Phase –II (2019-20 to 2021-22)}. NABARD investment activities in agriculture. Government has extends loans to National Rural Infrastructure allocated Rs.14,923.80 crore to this fund during 2020- Development Agency (NRIDA), a SPV of GoI, towards 21. As on 20.11.2020, Rs.6,969.59 crore has been utilised part funding of Central share under the Scheme. The out of LTRCF during 2020-21. cumulative sanction and release under PMAY - G as on 30th November, 2020 stands at Rs.51,975 crore and 5.6 Strengthening the Capital Base of NABARD Rs.34,940.53 crore respectively. NABARD Amendment Act 2018 has been notified 5.7.3 Swachh Bharat Mission – Gramin (SBM-G) on 19.01.2018 which empowers the Government to increase the authorised capital of NABARD from Rs.5,000 The Government of India in the Ministry of Jal crore to Rs.30,000 crore and to increase it beyond Shakti (earlier Ministry of Drinking Water & Sanitation), Rs.30,000 crore in consultation with RBI as deemed launched SBM-G on 2nd October, 2014 with the goal to necessary from time to time. This will enable NABARD achieve universal sanitation coverage in rural areas by to potentially increase its borrowing in future for funding 2nd October, 2019. For the construction of around 3 crore the large investments being made in rural infrastructure Individual Household Toilets, 1500 Community Sanitary in sectors like irrigation, housing, universal sanitation, Complexes and Solid & Liquid Resources Management dairy, fisheries etc. works during 2018-19, the total fund requirement towards Central Share was estimated at Rs.30,343 crore, out of During 2020-21, equity support of Rs.1,000 crore which Rs.15,000 crore was to be raised through borrowing has been provided to NABARD to enable it to fulfil its from NABARD. As on 30th November, 2020, the lending commitment under various Government initiatives including the flagship programmes i.e PMAY-G, LTIF, MIF cumulative sanction and release by NABARD under SBM and Swatch Bharat Mission. Total paid up capital as on -G stands at Rs.15,000 crore and Rs.12,298.20 crore 30.11.2020 in respect of NABARD is Rs.15,080 crore. respectively. 280Department of Financial Services V 5.7.4 Micro Irrigation Fund increased from 8% to 10% & 10% to 12% respectively in a phased manner from 2021-22 Micro Irrigation Fund with a corpus of Rs.5,000 to 2023-24. crore has been operationalized from 2019-20 in NABARD with an objective to facilitate State Govts. Efforts in (3) Credit to new sector like Compressed Bio Gas mobilizing additional resources for expanding coverage (CBG), Solar projects, credit for start-ups (up to under micro irrigation and incentivizing its adoption Rs.50 crore) engaged in Agriculture & allied beyond provisions of PMKSY-PDMC. The cumulative activities and MSME have been made eligible sanction and release under MIF as on 30th November, under PSL. 2020 stands at Rs.3,805.68 crore and Rs.1,754.60 crore respectively. This will facilitate in expanding micro (4) Higher credit limit has been specified for Farmers irrigation to an area of 12.565 lakh ha. involving 10.06 Producers Organisations (FPOs)/Farmers lakh farmers. Producers Companies (FPCs) undertaking farming with assured marketing of their produce 6. Priority Sector Lending (PSL) at a pre-determined price. The objective of priority sector lending (PSL) has (5) Credit limit has also been enhanced in case of been to, inter-alia, ensure access to credit for vulnerable sector like renewable energy sector, Health sections of society have adequate flow of resources to Infrastructure (including Ayushman Bharat) and those segments of the economy which have higher education loan. employment potential and help in making an impact on poverty alleviation. Thus, the sectors that impact large 6.2 The outstanding priority sector advances of sections of the population, the weaker sections and the Public Sector Banks was Rs.23,62,471 crore as on 31st sectors which are employment-intensive such as March, 2019 and Rs.23,63,854 crore as on 31st March, agriculture and micro and small enterprises are part of 2020. Advances to agriculture by PSBs amounted to the priority sector. Rs.9,81,107 crore as on 31st March, 2020 constituting 16.49 percent of ANBC. For the quarter ended With the objective of making the Priority Sector September, 2020* total outstanding priority sector Lending norms more broad-based the guidelines are advances of public sector banks is Rs.23,93,696 crore reviewed from time to time to align them with the emerging and outstanding towards agriculture under priority sector national priorities. As a part of this process the PSL is Rs.10,46,807 crore. guidelines have been revised in 2020. The revised guidelines issued in the month of September, also aim to (* Provisional figures as reported by banks to RBI.) encourage and support environment friendly lending 6.3 Education Loan policies/schemes announced under Aatma Nirbhar Bharat package to help achieve Sustainable Development Goals Every meritorious student should have access (SDGs). to bank credit to pursue higher education, if they so desire. Indian Banks’ Association (IBA) had prepared The new features of the revised PSL guidelines, inter-alia, include higher weightage for lending to identified the Model Educational Loan Scheme and circulated to 184 credit deficit districts, enhancement in the share of banks in the year 2001. The Scheme is for all students Small & Marginal Farmers and Weaker Section. New including students belonging to the economically weaker sector like making Compressed Bio Gas (CBG), Solar sections and those below the poverty line. Indian projects, credit for startups engaged in Agriculture & allied Nationals who have secured admission to a higher activities and MSME have eligible under PSL. education course in a recognised Institution in India or abroad through an entrance test/merit based selection Credit limit has also been enhanced in case of process are eligible for educational loans under the sector like renewable energy sector, Health Infrastructure Scheme. The Scheme has been modified from time to (including Ayushman Bharat) and education loan. time keeping in view the changing needs of the students. 6.1 Salient features of the revised PSL guidelines The last revision of the Model Educational Loan Scheme was carried out on 17.08.2015 and circulated to Banks. (1) To address regional disparities in the flow of The main features of the revised Model Educational priority sector credit, higher weightage has been Loan Scheme are as under. assigned to incremental priority sector credit in ‘identified 184 credit deficit districts’ where priority (1) Provision for charging of differential interest rates sector credit flow is comparatively low, and vice based on status of collateral, employability and versa. reputation of institutions. (2) The targets prescribed for “small and marginal (2) Relaxation in margin and security for loans farmers” and “weaker sections” are being guaranteed by NCGTC. 281Annual Report 2020-2021 (3) Extension of repayment period (after moratorium) to this Portal so that students wanting education loans up to 15 years for all loans. can apply for it and indicate their bank of choice. (4) Uniform one year moratorium for repayment after 6.3.4 Interest Subsidy Scheme for Education Loans completion of studies in all cases. Ministry of Human Resource Development had (5) Provision for moratorium taking into account formulated, in May, 2010, a Central Scheme to provide spells of unemployment/under-employment, say ‘Interest Subsidy’ for the period of moratorium on two or three times during the life cycle of the loan. educational loans taken by students of economically Moratorium may also be provided for the weaker sections from scheduled banks under the incubation period if the student wants to take up Educational Loan Scheme of the Indian Banks’ a start-up venture after graduation. Association. The scheme is applicable to the following categories of loans. 6.3.1 Service Area Norms for Education Loans- RBI guidelines (1) Educational loan disbursed/availed after 1st April, 2009 from Scheduled Banks which follow IBA RBI has advised the Banks on November 09, 2012 Model Educational Loan Scheme; that Service Area Norms are to be followed only in the case of Government Sponsored Schemes, circulated vide (2) Students belonging to economically weaker their circular dated December 8, 2004 and are not sections, i.e, whose parental income from all applicable to sanction of educational loans. Hence, banks sources do not exceed Rs.4.5 lakhs per annum; have been advised not to reject any educational loan (3) The scheme is applicable starting from academic application for reasons that the residence of the borrower year 2009-10, disbursement starting on or after does not fall under the bank’s service area. 01.04.2009, irrespective of date of sanction. 6.3.2 Performance of Education Loans 7. Financial Institutions The total outstanding education loans of Public Sector Banks (PSBs) as on 31st December, 2020 stood 7.1 Export –Import Bank of India (EXIM Bank) at Rs.75,381.27 crore in 19,83,251 accounts. Exim Bank has been established as a statutory, 6.3.3. Vidya Lakshmi Portal apex financial institution in 1982 under an Act of the Parliament of India, for financing, facilitating and Vidya Lakshmi Portal is a first of its kind portal promoting India’s international trade, for functioning as providing single window for Students to access the principal financial institution for coordinating the information and make application for Educational Loans working of institutions engaged in financing export and provided by Banks. The Portal has the following features: import of goods and services with a view to promoting the country’s international trade, and to function as a key (1) Information about Educational Loan Schemes of policy-input provider to the Government of India. Banks; Exim Bank offers a comprehensive range of (2) Common Educational Loan Application Form for lending and service / advisory programmes, aimed at Students; aiding the globalisation efforts of Indian companies. This (3) Facility to apply to multiple Banks for Education enables the Bank to promote inclusion of a large cross- Loans; section of Indian exporters, in the opportunities being thrown up by globalization. Exim Bank especially (4) Facility for Banks to download Students’ Loan distinguishes itself in the areas of project exports, export Applications; lines of credit (LOCs) and overseas investment finance, (5) Facility for Banks to upload loan processing which benefit a gamut of externally-oriented Indian status; companies, including SMEs. (6) Facility for Students to email grievances/queries As on 30th November, 2020, Exim Bank, with the relating to Educational Loans to Banks; support of Government of India, has extended 311 Lines of Credit aggregating USD 31.55 billion to various (7) Dashboard facility for Students to view status of countries across Asia, Africa, LAC, CIS and Oceania their loan application; region. As on 30th November, 2020, the Bank has sanctioned an aggregate amount of USD 2.88 billion for (8) Linkage to National Scholarship Portal for 30 projects. The bank has also given in principle information and application for Government commitments for an aggregate amount of USD 2.38 billion Scholarships. supporting 19 projects out of which approx. USD 32 Banks have been requested to give wide publicity million is likely to get sanctioned till end of March, 2020. 282Department of Financial Services V As on 30th November, 2020, under BC-NEIA, Bank has 7.3 IFCI Ltd. already disbursed USD 145 million during current FY. As IFCI Ltd (IFCI) was set up as a Statutory on November 30, 2020, the Bank’s net loans and Corporation (“The Industrial Finance Corporation of advances stood at Rs.96,492 crore, while the non-fund India”) in 1948 for providing medium and long term portfolio of the Bank was at Rs.15,058 crore. The total finance to industry. In 1993, after repeal of the IFC Act, business portfolio of the Bank, which stood at Rs.215,923 IFCI became a Public Limited Company, registered crore as on November 30, 2020, is estimated at under the Companies Act, 1956. Currently, IFCI is a Rs.230,000 crore as on March 31, 2021. Government Company with Government of India holding 7.2 India Infrastructure Finance Company Ltd 61.02% of paid-up capital of IFCI. IFCI is also registered (IIFCL) with the Reserve Bank of India (RBI) as a Systemically Important Non-Deposit taking Non-Banking Finance IIFCL is a wholly-owned Government of India Company (NBFC-ND-SI) and is also a notified Public company set up in 2006 to provide long-term financial Financial Institution under Section 2(72) of the assistance to viable infrastructure projects through the Companies Act, 2013. Scheme for Financing Viable Infrastructure Projects through a Special Purpose Vehicle called India 7.4 National Housing Bank Infrastructure Finance Company Ltd (IIFCL), broadly 7.4.1 Operational Highlights during FY 2019-20 referred to as SIFTI. The organization gives overriding (01.07.2019 to 30.06.2020) priority to Public-Private-Partnership (PPP) projects. IIFCL has been registered with the Reserve Bank of India (1) Subscribed Equity share capital of NHB stood at as Non-Banking Finance Company – Infrastructure Rs.1,450 crore as on 30.06.2020. Finance Company (NBFC-IFC) since September 2013. The authorized and paid up capital of the company as on (2) Outstanding Loans & Advances (net) of NHB 31stMarch, 2020 stood at Rs.10,000 Crore and stood at Rs.81,750 crore as on 30.06.2020, Rs.9,999.92 Crore, respectively. registering a growth of 17% Y-o-Y (Rs.69,805 outstanding as on 30.06.2019). Activities of IIFCL are governed by Board of (3) The total assets of the Bank increased by 19% Directors, which has various sub-committees as per the during the same period from Rs.75,590 crore at Companies Act 2013, such as Management Investment June, 2019 to Rs. 90,160 crore at June, 2020. Committee, Risk Management Committee, Audit Committee, Corporate Social Responsibility (CSR) (4) Disbursements of Rs.31,258 crore were made Committee etc. IIFCL, being a Government-entity, is during the period as compared to Rs.25,177 crore covered under the provisions of the RTI Act 2005. during FY 2018-19; an increase of 24%.Thirty- one new and small HFCs and five Small Finance IIFCL has set up three wholly-owned subsidiaries Banks (SFBs) were brought under the refinance as follows: umbrella during the year (a) IIFC(UK) (5) With refinance focus on HFCs, NHB’s (b) IIFCL Asset Management Company Limited disbursement to HFCs during FY 2019-20 (IAMCL) witnessed 27% rise Y-o-Y from Rs. 21,736 crore in FY 19 to Rs.27,551 crore in FY 20. This (c) IIFCL Projects Limited (IPL) includes refinance support to 30 HFCs with a loan IIFCL provides long term financing to viable base of less than Rs.1,000 crore. infrastructure projects through a product mix of Direct (6) Overall exposure of the Bank to HFCs went Lending (SIFTI), Takeout Finance, Refinance and up by 29% during the period from Rs.50,145 Credit Enhancement.IIFCL has played an instrumental crore at June, 2019 to Rs.64,653 crore at June, role in the promotion, development and financing of 2020. infrastructure sector. On a standalone basis, till 30thNovember, 2020, IIFCL has made Cumulative (7) The total disbursement during the year includes Gross Sanctions of Rs.1,44,872 Crore under Direct Rs.4,888 crore under Affordable Housing lending, Takeout Finance and Refinance schemes. Fund(AHF) benefiting 36,565 households. The This includes Cumulative Gross Sanctions of cumulative disbursement under AHF till Rs.91,757 Crore to 503 projects under Direct Lending. 30.06.2020 was Rs.12,582.79 crore benefiting The Company has made Cumulative Disbursements 1,73,741 households. Further an amount of of Rs.74,274Crore, including disbursements of Rs.302 crore was disbursed to promote efficient Rs.15,765 Crore under Refinance and Rs.15,413 Crore green residential housing in India, under a line under Takeout Finance till November, 2020. of credit from AFD. 283Annual Report 2020-2021 (8) To obviate the liquidity issues faced by HFCs 7.4.3 Promotion & Development (as on 31.12.2020) during H2 of FY19, NHB introduced a special (1) As part of research initiatives, National Housing Liquidity Infusion Facility (LIFt) Scheme for HFCs. Bank (NHB) initiated a Study on the impact of Under this scheme, refinance assistance of changes in Stamp Duty and Registration Charges Rs.9,244 crore has been extended to thirty-six on Residential Property, and suggest a revenue HFCs during the year 2019-20. neutral model for enabling “Affordable Housing (9) Further, as a COVID relief measure, a Special for All” which was undertaken by Indian Institute Refinance Facility (SRF) was launched in April, of Management, Bangalore (IIMB). The report is 2020 as announced by the Hon’ble Finance available at the websites of Ministry of Housing Minister under Atmanirbhar Bharat package. (MoHUA) and NHB. Under the scheme, refinance assistance of (2) Under PMAY-CLSS (Urban), subsidy amounting Rs.9,537 crore was extended to the PLIs during to Rs.3,508.44 crore was released benefitting 1.58 the period April to June, 2020. lakh households (Rs.1,950.78 crore to 0.84 lakh (10) Both the above schemes were special households under EWS/LIG and Rs.1,557.66 dispensations, over and above the regular crore to 0.74 lakh households under MIG). refinance extended by NHB to HFCs and other (3) Till 31.12.2020, NHB as a CNA released subsidy PLIs. of Rs.25,141.11 crore to PLIs benefitting 11.13 (11) Cumulatively, NHB has made disbursement of lakh households (Rs.17,209.13 crore to 7.36 lakh Rs.2,67,962 crore(till 30.06.2020). households under EWS/LIG and Rs.7,931.98 crore to 3.77 lakh households under MIG). (12) Subsidy of Rs.7,571.74 crore was disbursed during July, 2019 to June, 2020 under PMAY- 7.5 Small Industries Development Bank of India CLSS (Urban) benefitting 3,31,924 households (SIDBI) with a cumulative disbursement of Rs.21,632.67 Small Industries Development Bank of India has crore benefitting 9.55 Lakh households under the been established under an Act of the Parliament in April scheme. 02, 1990. SIDBI is mandated to serve as the Principal (13) Till 30.06.2020, subsidy of Rs.8.36 crore was Financial Institution for executing the triple agenda of disbursed under Rural Housing Interest Subsidy promotion, financing and development of the Micro, Small Scheme (RHISS) benefitting 2,733 households. and Medium Enterprises and co-ordination of the functions of the various Institutions engaged in similar 7.4.2 Financing (during the half-year ended activities. 31.12.2020 (01.07.2020 to 31.12.2020) 7.5.1 Operational Highlights during FY 2019-20 and (1) During the half year ended 31.12.2020 refinance 2020-21 of Rs.20,898 crore was sanctioned to 48 PLIsincluding 42 HFCs. Of this, Rs.9,213 crore During FY 2021, the operations of the Bank have was disbursed to 45 PLIs including 41 HFCs. been towards supporting MSMEs to sail through the challenging times of COVID 19 pandemic. To help (2) This includes disbursement of Rs.2,367 crore MSMEs during this crisis, the Bank has undertaken under AHF during the half-year towards 28,942 several initiatives through Direct Finance, Institutional dwelling units. Finance, Fund of Funds and Promotion and Development operations. Further, the Bank has continued to be a (3) The Bank added 9 HFCs and 3 Banks under its trusted agency for implementing several Government of refinance umbrella during this period. India initiatives towards quick response to COVID 19. (4) Bank launched Additional Special Refinance The Asset Base of the Bank continued its growth Facility (ASRF) scheme with an aim to meet the momentum by clocking a healthy Y-o-Y growth of 20.3%, supplementary liquidity requirements of the and stood at Rs.1,87,539 crore as at end of FY 2020. HFCs/PLIs due to COVID-19 disruptions and The Asset Base stood at Rs.1,61,288 crore as at end of extended moratorium period. H1 FY 2021 as compared to Rs.1,67,883 crore as at end (5) As at December, 2020, apart from full utilisation of H1 FY 2020. of Rs.10,000 crore under SRF, additional SRF Net profit recorded a growth of 18.6% to of Rs.3,927 crores was disbursed. Rs.2,314.5 crore in FY 2020 from Rs.1,952.2 crore in (6) Total refinance support by HFC during the FY19. Net profit for H1 FY 2021 registered 55.6% growth pandemic period i.e., since March, 2020, is as compared to H1 FY 2020 and stood at Rs.1,534.5 Rs.38,064 crore. crore. 284Department of Financial Services V 7.5.2 Financing during FY 2019-20 and 2020-21 7.5.3 Promotion & Development The MSME financing agenda of the Bank is The Promotional and Developmental initiatives discharged through the twin interventions of (i) Direct of the Bank are undertaken under the four guiding themes of Sampark, Samwad, Suraksha, Sampreshan (4S), to Lending, disseminated through demonstrative lending address various non-financial challenges of the MSME products to fill existing credit gaps and (ii) Indirect Lending sector. Under mission Swavalamban, the Bank has is done through Banks, NBFCs, New Age Fintechs, SFBs undertaken a slew of initiatives to handhold and support and MFIs, which creates a multiplier effect and provides aspiring entrepreneurs in their journey to become job a larger reach. The Loans and Advances of the Bank creators. The Bank focused on information dissemination crossed the milestone of Rs.1.5 lakh crore in FY 2020, on entrepreneurship and encouraged youth through registering Y-o-Y growth of 21.4%, and stood at Swavalamban info series, Swavalamban walls and clubs Rs.1,65,422 crore as at end of FY 2020. As at end of H1 and a thematic metro station at Hauz Khas in the national FY 2021 Loans and Advances stood at Rs.1,42,937 crore, capital. Under its unique initiative of state outreach which is at 99% level of Rs.1,44,348 crore as at end of programme, the Bank organized 10 programmes to H1 FY 2020, despite COVID pandemic. deeply engage with state governments on issues facing MSMEs and to promote onboarding of MSMEs on digital Under Indirect Finance, the Bank has 193 live platforms and mapping of good practices of one state to customers as on November 30, 2020, which includes 47 others. Swavalamban Silai school initiatives of the Bank Banks, 68 NBFCs and 78 MFIs. Outstanding under has created 1000 silai schools in 10 districts benefiting Indirect Finance was Rs.1,32,215 crore as on September 1,000 women. These women beneficiaries started their 30, 2020. During FY 2021, in order to provide liquidity own schools and further enrolled more women, taking support to MSME sector during COVID pandemic, the the total enrolled to 3,273 women. Phase 2 of the RBI has provided a Special Liquidity Facility (SLF) of initiatives has also commenced during FY 2021, under Rs.15,000 crore. Under the aforesaid fund, the Bank has which 700 schools are to be set-up in 14 districts. Among sanctioned Rs.5,700 crore to 16 Banks, Rs.5,016 crore other initiatives, the Bank organized a Swavalamban to 62 NBFCs, Rs.2,717 crore to 40 MFIs and Rs.213 crore Bazar for micro-entrepreneurs, launched Swavalamban Crisis Responsive Fund (SCRF) for free onboarding of directly to 448 MSMEs, aggregating sanctions of 10,000 MSMEs on the TReDS platforms by March Rs.13,646 crore as on December 22, 2020. 2021,Swavalamban Utsav for women who benefited The direct finance portfolio of the Bank registered under SIDBI’s MahilaUdyamiSashaktikaran Project Y-o-Y growth of 10.9% and stood at Rs.9,867 crore as (MUSP), Swavalamban Idea Lab for supporting business on March 31, 2020. The relentless efforts to support ideas and Swavalamban Sankalp programme in MSMEs during pandemic has resulted in 8% growth over collaboration with DICCI, SIDBI ET India MSE Awards, apart from establishing 100 Swavalamban Connect March 31, 2020 in direct finance portfolio as on Kendras for handholding aspiring entrepreneurs. September 30, 2020 reaching Rs.10,666 crore. The Bank introduced scheme viz. SIDBI Assistance to Facilitate The Bank has undertaken several initiatives to Emergency response against corona virus (SAFE) and address information asymmetry through a bouquet of SAFE PLUS with concessional interest rate of 5% p.a. to Knowledge Products viz MSME Pulse, CriSidEx, provide financial support to MSMEs during pandemic. Microfinance Pulse, Fintech Pulse and Industry spotlight. Under these schemes, 390 number of loans amounting MSME Pulse is available in 8 vernacular languages apart to Rs.170 crore have been sanctioned, out of which from Hindi & English. Rs.156 crore has been disbursed with turnaround time 7.5.4 Digital Interventions of 1.73 days. The Bank has undertaken slew on initiatives to In order to deliver “affordable credit” to the small make credit access to MSMEs a digital delight. entrepreneurs, especially women, at the bottom of the Udyamimitra portal, a comprehensive digital platform for pyramid, the Bank under Prayaas scheme, sanctioned MSME aspirants to access credit has 380+ lenders and 10,925 cases with a total disbursement of Rs.126.55 crore 8.75 lakh+ registrations as on December 15, 2020. On as on October 31, 2020. digital online portal, PSBLoansin59minutes, as on November 30, 2020, 2.62 lakh MSMEs have obtained The Bank is implementing agency for Fund of in-principle approval from the lenders out of which 2.17 Funds for Start-ups (DPIIT) and ASPIRE Fund lakh MSMEs have obtained final sanction. Other key (MoMSME). Under Fund of Funds, the Bank has notable digital initiatives include Asset Restructuring cumulatively assisted 140 AIFs with a cumulative sanction Module- ARM-MSME, automated/ online Do-it-Yourself of Rs.6,154.71 crore and disbursements of Rs.2,848.13 web-portal for MSMEs to self create their restructuring crore as on March 31, 2020. proposal/ financial viability projections and MSME 285Annual Report 2020-2021 Saksham, Joint credit awareness initiative of SIDBI & to bring in operational and cost efficiency and achieve TransUnion CIBIL to enable the MSMEs to be loan-ready. economies of scale through sharing of resources. It has also enabled in developing expertise on risk 7.5.5 SIDBI as Nodal/ Implementing agency for management, fund management and compliances. Government scheme Currently, Credit Guarantee Fund for Skill The Bank is Implementation partner of the Development (CGFSD), Credit Guarantee Fund for PMSVANidhi scheme, and the scheme portal/IT Platform Education Loans (CGFEL), Credit Guarantee Fund for and a Mobile App has been integrated with the Factoring (CGFF), Credit Guarantee Fund for Micro Unit Udyamimitra portal managed by the Bank. Under scheme, (CGFMU), Credit Guarantee Fund for Stand-up India 30 lakh applications received, 16.05 lakh sanctioned, and (CGFSI) and Emergency Credit Line Guarantee Scheme 11.05 lakh disbursed, as on December 15, 2020. Under, (ECLGS) Fund are being handled by NCGTC. Interest Subvention Scheme for MSMEs 2018, the Bank has settled claims of Rs.604.69 crore to 59 institutions 8. Significant Initiatives to support credit benefitting 9.58 lakh MSMEs as on March 31, 2020. In to lending institutions FY 2021, Rs.220.31 crore released to 41 institutions as on October 30, 2020. 8.1 Partial Credit Guarantee Scheme (PCGS) for NBFCs/ HFCs/ MFIs: Under Interest Subvention Scheme for MUDRA- Shishu Loans, the Bank has settled an aggregate claims PCGS was issued on 11th December 2019, with of Rs.140.94 crore to 56 MLIs benefitting over two crore the approval of the Union Cabinet, for providing guarantee beneficiaries as on October 30, 2020. Further, in respect to Public Sector Banks (PSBs) limited to first loss of upto of Partial Credit Guarantee offered by GOI to PSBs, the 10% of fair value of assets being purchased by the banks Bank has been delegated the work for evaluation of or Rs.10,000 crore, whichever is lower, for purchasing proposals emanating from eligible banks for execution high-rated pooled assets from financially sound Non- of guarantees, keeping record of transactions and Banking Financial Companies (NBFCs)/Housing Finance determination of guarantee headroom, examination of Companies (HFCs) fulfilling the eligibility criteria claims and monitoring of recoveries in account for which prescribed under the Scheme. guarantee has been invoked. As part of the Aatmanirbhar Bharat Abhiyan, the The Bank has been assigned the nodal agency existing Partial Credit Guarantee Scheme was extended role by the Government of India for implementing various on 20th May 2020, with the approval of the Cabinet, to Government subsidy schemes, such as CLCSS, TUFS, cover portfolio guarantee of up to 20% of first loss for IDLSS, FPTUFS, TEQUP and MSME-CDP Scheme. purchase by PSBs of Bonds or Commercial Papers (CPs) Cumulatively, the Bank has facilitated the release of with a rating of AA and below (including unrated paper subsidy to the tune of Rs.3,427.08 crore, to 40,692 with original/ initial maturity of up to one year) issued by MSMEs, as on March 31, 2020. NBFCs/ HFCs/Micro Finance Institutions (MFIs). 7.6 Credit Guarantee Trustee Company The amount of overall guarantee provided under Ltd.(NCGTC) the extended Scheme shall be limited to 10% of fair value of assets or 20% of the face value at crystalized Portfolio NCGTC was incorporated on March 28, 2014, Level of the Bonds/CPs being purchased by the as a wholly owned Government of India company, under Purchasing Banks under this Scheme, or an overall Companies Act, 1956, with the approval of the Union amount of Rs.10,000 crore taking into account all the Cabinet. It has a paid-up capital of Rs.10 crore NCGTC guarantees provided under the Scheme to all Purchasing was established to operate the Credit Guarantee Funds Banks, whichever is lower. for Educational loans, Skill Development and any other fund that may be set up in future. The existing Scheme was launched following the Budget announcement of 2019-20 with the objective that NCGTC is responsible for the day to day the purchase of pooled assets enabled by Government operations and implementation of all credit guarantee guarantee support under the Scheme, will help address schemes. NCGTC generates resources through charging temporary liquidity/cash flow mismatch issues of of management fee from the funds/schemes it operates. otherwise solvent NBFCs/HFCs without them having to Currently, NCGTC operates various credit Guarantee resort to distress sale of their assets for meeting their schemes under implementation by Central Ministries such commitments. as Ministry of Skill Development & Entrepreneurship, Ministry of Human Resource Development (Department The extension of the existing Scheme to cover of Higher Education) and Ministry of Finance (Department purchase by PSBs of Bonds or Commercial Papers (CPs) of Financial Services). A single trustee set up for operating with a rating of AA and below (including unrated paper Govt. supported Credit Guarantee funds was envisaged with original/ initial maturity of up to one year) issued by 286Department of Financial Services V NBFCs/ HFCs/ MFIs (in case of MFIs, Bonds/ CPs with risks and providing a safety net for individuals and MFR rating equivalent) will address their liability side and enterprises in urban and rural areas, the insurance sector also enable availability of additional liquidity for on lending. encourages savings and provides long-term funds for Since NBFCs, HFCs and MFIs play an extremely significant infrastructure development and other long gestation role in sustaining consumption demand as well as capital projects of the Nation. The development of the insurance formation in small and medium segment, it is required that sector in India is necessary to support its continued they continue to get funding without disruption. As of economic transformation. 8thJanuary, 2021, proposals for purchase of asset pools 9.2 Role of the Department of Financial Services worth Rs.11,798.78 crore have been in principle approved in Insurance for issuance of Guarantee. Out of this, Guarantee has been executed for asset pool amounting to Rs.9000.53 crore The Department of Financial Services deals with policy (i.e. for Guarantee amount of Rs. 900.53 crore). Further, and legislative matters as well as monitoring of the Banks have purchased portfolio of bonds/CPs of Rs.23,242 performance of both life and general insurance segments crore (Provisional). The timeline for purchase of portfolio of the public sector insurance industry. It is also the of bonds/CPs expired on 31.12.2020. administrative division for the Insurance Regulatory and Development Authority of India (IRDAI). The name 8.2 Special Liquidity Scheme (SLS) for NBFCs/ ‘Insurance Regulatory and Development Authority’ was HFCs changed to ‘Insurance Regulatory and Development As part of the Aatmanirbhar Bharat Abhiyan, the Authority of India’ through the Insurance Laws Union Cabinet on 20thMay, 2020 approved the Special (Amendment) Act, 2015. Liquidity Scheme for Non-Banking Financial Companies 9.3 The Public Sector Insurance Companies (NBFCs) and Housing Finance Companies (HFCs) to operating in the sector. improve their liquidity position. Under the Scheme, a Special Purpose Vehicle (SPV) viz. SLS Trust has been (1) Life Insurance Corporation of India set up under SBICAP which would issue interest bearing special securities guaranteed by the Government of India, (2) National Insurance Company Limited to be purchased by Reserve Bank of India (RBI) only. (3) The Oriental insurance Company Limited The proceeds thereof would be used by the SPV to acquire the debt of at least investment grade of short (4) United India Insurance Company Limited duration (residual maturity of upto 3 months, and can be extended for the same or for a reduced period upto the (5) The New India Assurance Company Limited date of maturity) of eligible NBFCs / HFCs. The SPV (6) General Insurance Corporation of India – GIC would issue securities as per requirement subject to the Re (Re-Insurer) total amount of securities outstanding not exceeding Rs.30,000 crore to be extended by the amount required (7) Agriculture Insurance Company of India Limited as per the need. – Specialised Insurer (Company floated by Public Sector general insurance companies along with The Scheme was designed by Department of NABARD) Economic Affairs, which also obtained approval of the Cabinet. The Scheme is being implemented by (8) ECGC Limited – Specialised Insurer Department of Financial Services. The Scheme’s (Government of India enterprise for export credit operational guidelines, as framed by DEA, were issued guarantee) by DFS on 29th May, 2020. SPV in form of SLS Trust was formed. DFS issued Guarantee in favor of RBI on 9.4 Legislative Framework governing the 30th June, 2020. The validity of the Scheme expired on Insurance Sector 30.09.2020 and a total of Rs.7,125.51 crore was disbursed by SLS Trust by way of 28 instruments to 23 The Department is responsible for policy NBFC/HFC. SLS Trust has received the repayment of formulation and administration of the following Acts in principal and interest amounting to Rs.7,249.60 crore by the insurance sector: 31.12.2020 for all instruments and there has been no (1) The Insurance Act, 1938 default. The Scheme ended on 31.12.2020. (2) The Life Insurance Corporation Act, 1956 9. Insurance Sector (3) The General Insurance Business 9.1 Overview (Nationalisation) Act, 1972 Insurance, being an integral part of the financial (4) The IRDA Act, 1999 sector, plays a significant role in India’s economy. Apart from protecting against mortality, property and casualty (5) The Actuaries Act, 2006 287Annual Report 2020-2021 (6) The Securities and Insurance Laws (Amendment 27 are general insurers, 6 are standalone health insurers and Validation) Act, 2010. exclusively doing health insurance business and 11 are reinsurers including foreign reinsurance branches and The Government promulgated an Ordinance Lloyd’s India. Of the 68 insurers eight are in the public namely - the Insurance Laws (Amendment) Ordinance, sector and the remaining 60 are in the private sector. 2014 on December 26, 2014 to make amendments to Two specialized insurers, namely ECGC Limited and the Insurance Act, 1938, the General Insurance Business Agricultural Insurance Company of India Limited, one life (Nationalization) Act, 1972 and the Insurance Regulatory insurer namely LIC of India, four general insurers and and Development Authority Act, 1999 in accordance with one reinsurer namely GIC are in public sector. 23 life the Insurance Laws (Amendment) Bill 2008 as reported insurers, 21 general insurers, 6 standalone health insurers by the Select Committee of the Rajya Sabha. The and 10 reinsurers including foreign reinsurance branches Ordinance was replaced by the Insurance Laws and Lloyd’s India are in private sector. (Amendment) Act, 2015. With the coming into force of the Insurance Laws (Amendment) Act, 2015, the foreign Registered Insurers and Reinsurers (As on 31.03.2020) investment cap in an Indian Insurance Company has gone up from 26 per cent to 49 per cent with the safeguard of Indian ownership and control. Type of Insurer Public Private Total Sector Sector 9.5 Reforms in the Insurance Sector Life 1 23 24 The insurance sector was opened up for private General 6 21 27 participation with the enactment of the Insurance Standalone Health - 6 6 Regulatory and Development Authority Act, 1999. The Re-insurers 1 10 11 Authority consist of a Chairperson, not more than five Total 8 60 68 whole-time members and not more than four part-time members. As on March 31, 2020, Authority has Chairman, 9.7 Industry Statistics three full-time members and three part-time members. Insurance Penetration and Insurance Density The Authority is functioning from its Head Office at Hyderabad, Telangana. The core functions of the The potential and performance of the insurance Authority as mentioned in Section 14 of Insurance Act sector are generally assessed on the basis of two include (i) licensing/registration of insurers and insurance parameters, viz., Insurance Penetration and Insurance intermediaries; (ii) financial and regulatory supervision; Density. The measure of insurance penetration and (iii) regulation of premium rates; and (iv) protection of density reflects the level of development of insurance the interests of the policyholders. sector in a country. While insurance penetration is With a view to facilitate development of the measured as the percentage of insurance premium to insurance sector, the Authority has issued regulations GDP, insurance density is calculated as the ratio of on protection of the interests of policyholders; obligations premium to population (measured in US$ for convenience towards the rural and social sectors; micro insurance of international comparison). and registration of agents, licensing/registration of Insurance penetration which was 2.71 per cent corporate agents, brokers and third party administrators. in 2001, increased to 3.76 per cent in 2019 (Life: 2.82 IRDAI has also laid down the regulatory framework for per cent and Non-Life: 0.94 per cent). Insurance registration of insurance companies, maintenance of Penetration in some of the emerging economies in Asia, solvency margin, investments and financial reporting i.e., Malaysia, Thailand and China during 2019 was 4.72, requirements. 4.99 and 4.30 per cent respectively. The Insurance density 9.6 New entrants in the insurance industry in India which was USD 11.5 in 2001 increased to USD 78 in 2019 (Life: USD 58 and Non-Life: USD 19). The Since its opening up in 2000, the number of insurance density in Malaysia, Thailand and China during participants in the Insurance industry has gone up from the same period i.e. 2019 were USD 536, USD 389 and 7 insurers (including the Life Insurance Corporation of USD 430 respectively. Globally insurance penetration and India [LIC], four public-sector general insurers, one density in 2019 were 3.35 per cent and USD 379 for the specialized insurer, and the General Insurance life segment and 3.88 per cent and USD 439 for the non- Corporation as the Indian re-insurer) in 2000 to 68 life segment respectively. insurers by March 31, 2020. During the financial year (2019-20), two insurers, One Health insurer i.e. Reliance Life insurance industry Health and one Re-insurer i.e. ITI Re have surrendered their Certificate of Registration. Hence, as on March 31, Post liberalization period has witnessed sharp 2020, 68 insurers are operating in the life, general, health growth in the insurance industry, more particularly in the and re-insurance segments; of which 24 are life insurers, life segment. Life insurance industry recorded a premium 288Department of Financial Services V income of Rs.5.73 lakh crore during 2019-20 as against continue to contribute a major share of 76.79 per cent in Rs.5.08 lakh crore in the previous financial year, total investments as on March 31, 2020 though registering a growth of 12.75 per cent (10.75 per cent investments by private sector insurers also are growing growth in previous year). at a fast pace in recent years. The new business premium underwritten by the 9.9 Rural and Social Sector Business life insurers (total of first year premium and single All the life insurers including LIC have fulfilled premium) during 2019-20 was Rs.2.59 lakh crore as their rural sector obligations for the year 2019-20. The compared to Rs.2.15 lakh crore in 2018-19 registering a life insurers underwrote 64.96 lakh policies in the rural growth of 20.59 per cent as against 10.74 per cent during sector, viz., 22.49 per cent of the new individual policies the previous year. In terms of linked and non-linked underwritten (288.85 lakh policies) by them in 2019-20. business, 14.50 percent of the new-business premium LIC underwrote 21.37 per cent of the new individual was underwritten in the linked segment during 2019-20 policies and private insurers underwrote 26.02 per cent while 85.50 percent of the business was in non-linked of the new individual policies in the rural sector. All life segment as against 14.99 per cent and 85.01 per cent in insurers except Sahara* life insurer, were compliant with the previous year. Of the new business premium their social sector obligations in terms of number of lives underwritten, LIC accounted for Rs.1.78 lakh crore (68.76 covered. All the public and private sector general per cent market share) and the private insurers accounted insurance companies including standalone health for Rs.0.81 lakh crore (31.24 per cent market share). The insurance companies have fulfilled their obligations in the market share of LIC and private insurers was 66.20 per rural and social sector for the year 2019-20. cent and 33.80 per cent respectively (new business premium) during the year 2018-19. (*Sahara India Life Insurance Co. Ltd. was directed not to underwrite any kind of new business from June 24, General insurance industry 2017 vide the IRDAI Order reference IRDAI/F&A/OR/FA/ The general insurance industry (including 148/06/2017 under section 52 B (2) of the Insurance Act, standalone health insurers) underwrote total direct 1938. Hence, Sahara India Life is not considered for Rural premium of Rs.1.89 lakh crore in India for the year 2019- and Social Sector Obligations.) 20 as against Rs.1.69 lakh crore in 2018-19, registering 9.10 Micro insurance a growth rate of 11.49 per cent as against 12.47 per cent growth rate recorded in the previous year. The In order to facilitate penetration of insurance to private sector (including standalone health insurers) had the lower income segments of population, IRDAI had underwritten Rs.1.05 lakh crore as against Rs.0.93 lakh notified the micro insurance regulations, 2005 which was crore in the previous year achieving a growth rate of further amended in 2015. They provide a platform to 13.57 per cent whereas the public sector (including distribute insurance products, which are affordable to the specialized insurers) had underwritten premium of rural and urban poor and hence promoting financial Rs.0.84 lakh crore as against Rs.0.77 lakh crore in the inclusion. previous year with a growth rate of 8.97 per cent. The market share of the public and private insurers stood at Micro insurance being a low price-high volume 44.30 and 55.70 per cent during the year 2019-20 as business, its success and sustainability depends mainly against 45.33 and 54.67 per cent respectively in 2018- on keeping the transaction costs down. IRDAI (Obligations 19. One of the benefits of opening up of the insurance of insurers to Rural and Social sectors) 2015 promulgated sector has been the extension of health cover to a wider under Section 32B and 32C of the Insurance Act, 1938 cross-section of the society. Health premium accounted stipulate obligations of insurers in respect of rural and for 30.10 per cent (Rs.56,865.13 crore) of the gross social sector, which has also contributed substantially to direct premium of the general insurance industry within the development and promotion of micro insurance India (including standalone health insurance companies) products in India. in 2019-20 (Rs.50,833.55 crore constituting 30.00 per In micro-insurance-life, the individual new cent in 2018-19). business premium for the year 2019-20 was Rs.226.66 9.8 Investments of the Insurance sector crore through 10.28 lakh new policies and the group business amounted to Rs.4426.45 crore premium for As on March 31, 2020 the accumulated total 1407.29 lakh lives. There were 90,574 micro insurance investments held by the insurance sector was Rs.42.53 agents attached to life insurers at the end of FY 2019-20. lakh crore as against Rs.38.47 lakh crore as on March 31, 2019, registering an increase of 10.54 per cent. Life Total number of general insurance policies insurers continue to contribute a major share with around issued by Micro Insurance Agents (excluding of 91.47 per cent of the total investments held by the Standalone health insurers) were 1.33 lakhs in the year insurance industry. Similarly, public sector insurers 2019-20. Gross direct premium under micro insurance 289Annual Report 2020-2021 business in general insurance sector for the year 2019- NPS has to mandatorily contribute 10% of pay and 20 was Rs.21.27 crore through 4.26 lakh micro Dearness Allowance (DA) and 14% of pay and DA is insurance policies. Health Insurance (excluding contributed by the Government to the employee’s Tier-I Personal Accident and Travel Insurance) premium account. There are a number of benefits available to the procured by Micro Insurance agents was Rs.40.08 crore employees under NPS. Some of the benefits are listed in the year 2019-20. below: IRDAI has permitted PMFBY covering non- (1) NPS is a well designed pension system loanee farmers, to be solicited and marketed by Micro managed through an unbundled architecture involving Insurance Agents under IRDAI (Micro Insurance) intermediaries appointed by the Pension Fund Regulatory Regulations, 2015. Further, general insurance policies and Development Authority (PFRDA) viz. pension funds, issued to Micro, Small and Medium Enterprises as custodian, Central Recordkeeping and Accounting classified in MSMED Act, 2006 under various lines of agency (CRA), National Pension System Trust, trustee general insurance business will also qualify as general bank, points of presence and Annuity service providers. Micro Insurance business upto Rs.10,000 premium per It is regulated by PFRDA which is a statutory regulatory annum per MSM enterprise. body established to promote old age income security and protect the interests of NPS subscribers. 9.11 Grievance Redressal (2) Dual benefit of Low Cost and Power of The IRDAI facilitates resolution of policyholder Compounding - The pension wealth which accumulates grievances by monitoring the insurers’ policy of Grievance over a period of time till retirement grows with a Redressal and takes several initiatives towards protecting compounding effect. The all-in-costs of the institutional the interests of the Insurance consumers. IRDAI has put architecture of NPS are among the lowest in the world. in place the Integrated Grievance Management System (IGMS) as an online system for grievance management (3) Tax Benefits presently available under NPS that is not only a gateway for registering and tracking (A) Tier I: grievances online but also act as an industry-wide grievance repository for IRDAI to monitor disposal of i. To ensure parity of tax treatment between NPS grievances by insurance companies. During 2019-20, the and various retirement products such as General life insurance companies resolved 98.26 per cent of the Provident Fund (GPF), Contributory Provident complaints handled. The private life insurers resolved Fund (CPF), Employees Provident Fund (EPF) 99.95 per cent of the complaints reported, while LIC and Public Provident Fund (PPF), the limit of tax resolved 97.45 per cent of the complaints. The General exemption under section 10(12A) of the Income insurance companies resolved 98.67 per cent of the Tax Act in respect of the amount withdrawn as complaints handled during the year 2019-20. The private lump sum to the extent of 40% of the total General insurance companies resolved 99.89 per cent accumulated balance has been enhanced to up and public General insurance companies resolved 97.24 to 60% of the total accumulated balance at the per cent of the complaints handled by them. closure of account. With this, the entire withdrawal is now exempt from income tax. 10. Pension Sector ii. Interim/ Partial Withdrawal from NPS Tier I up 10.1 National Pension System (NPS) to 25% of the contributions made by NPS The National Pension System (NPS) was subscriber is tax free. introduced by the Government of India with a view to iii. Minimum 40% of the amount is to be mandatorily provide adequate retirement income on cost effective utilized for purchasing an annuity from the basis. It was made mandatory for all new recruits to the Annuity Service Provider registered and Government service (except armed forces) with effect regulated by the Insurance Regulatory and from 1st January, 2004, and has also been rolled out for Development Authority and empanelled by all citizens with effect from 1st May, 2009, on voluntary PFRDA. Amount utilized for purchase of annuity basis. As of now 29 State Governments have notified NPS is not taxable and is exempted from GST. for their employees. NPS has been designed giving utmost importance to the welfare of the subscribers with (B) Tier II: Contribution by the Government employees aim of maximising outreach. The Scheme offers two types under Tier-II of NPS is now covered under of accounts, namely Tier-I and Tier-II. The Tier-I account Section 80 C of the Income Tax Act, 1961, for is the Pension account, while the Tier-II account is a deduction up to Rs. 1.50 lakh for the purpose of voluntary withdrawable account which is allowed only income tax at par with the other schemes such when there is an active Tier-I account in the name of the as GPF, CPF, EPF, and PPF provided that there subscriber. Presently, a Government employee under is a lock-in period of years. 290Department of Financial Services V (4) Freedom of choice for selection of Pension Funds The existing scheme in which funds are allocated and pattern of investment to government employees by the PFRDA among the three Public Sector Undertaking as under fund managers based on their past performance in accordance with the guidelines of PFRDA for Government (a) Choice of Pension Fund: As in the case of employees will continue as the default scheme for both subscribers in the private sector, the Government existing and new subscribers. subscribers are also allowed to choose any one of the pension funds including Private sector (5) Partial withdrawal- Subscribers can withdraw up pension funds. They could change their option to 25% of their own contributions at any time before exit once in a year. However, the current provision of from NPS Tier I for a maximum of three times during combination of the Public-Sector Pension Funds the entire tenure of subscription under NPS for certain will be available as the default option for both specified purposes such as marriage of children, existing as well as new Government subscribers. purchase of house, medical treatment etc. The (b) Choice of Investment pattern: The following requirement of minimum period under NPS for availing options for investment choices are offered to the facility of partial withdrawal from the mandatory Government employees: - Tier-I account of the subscriber has been reduced from 10 years to 3 years from the date of joining w.e.f. 10th i. Government employees who prefer a fixed return with minimum amount of risk have August, 2017. The minimum gap of 5 years between an option to invest 100% of funds in two partial withdrawals has also been removed w.e.f. Government securities (Scheme G). 10th August, 2017. ii. Government employees who prefer higher (6) eNPS - PFRDA introduced eNPS online portal on returns have the options of two Life Cycle 07.12.2015 whereby the Permanent Account Number based schemes - Conservative Life Cycle (PAN) and savings bank account of new subscribers to Fund with maximum exposure to equity NPS who are already customers of the banks are capped at 25% at the age of 35 years and accepted as KYC with active participation of the banks tapering off thereafter (LC-25) or Moderate acting as POPs for opening of accounts under NPS. Life Cycle Fund with maximum exposure to equity capped at 50% at the age of 35 years The status of NPS as on 28th November, 2020, and tapering off thereafter (LC-50). is as under Sector No. of subscribers Assets Under Management (in lakh) (in Rs crore) Central Government 21.43 1,71,230.474 State Government 49.60 2,69,358.76 Corporate 10.66 55,461.91 All Citizen Model 14.11 17,854.07 NPS Lite * 43.12 4,251.05 Total 138.92 5,18,156.53 *(No fresh registration permitted w.e.f 01.04.2015) Major measures/steps undertaken under National which is unique, after premature exit i.e. exit before the Pension System (NPS) age 60 years. Eligible subscribers can open a new NPS UPI has been added as a mode of payment on account after closing their existing NPS account up to eNPS platform, besides credit card, debit card and net the age of 65 years. banking A number of Annuity Literacy Programs across (7) Initiatives undertaken during FY 2020-21 on the country have been conducted for the prospective account of Covid-19 pandemic. retiring subscribers and nodal offices for spreading awareness on seamless exits from National Pension (i) Partial Withdrawal Facility at the time of System. NPS Lite subscribers have been enabled to Covid-19- The Authority has declared “COVID- make contribution online. Operational guidelines have 19” as a critical illness and hence the partial been issued in respect of National Pension Scheme Tier-II Tax Saver Scheme, 2020 (NPS-TTS) on 7th July withdrawals have been permitted to fulfil financial 2020. NPS subscribers have been allowed to continue needs of the subscribers as per the applicable with the Permanent Retirement Account number (PRAN), exit regulations. 291Annual Report 2020-2021 (ii) Aadhaar based offline paperless KYC and requests received from various stakeholders, verification process for NPS On-boarding- It as a special case and one-time measure, a has been decided to allow e-NPS/PoPs to utilize relaxation was given to Nodal Offices/POPs for the Aadhar based offline paperless KYC accepting the scanned and self-certified images verification process which eliminates the need of exit documents through digital means to for the prospective NPS subscribers (applicants) process the withdrawal requests of NPS to provide the physical copy of Aadhar. A total of subscribers. Extension of timelines till September 51,603 PRAN were opened as on 23.11.2020 30, 2020 for Nodal Offices/POPs to accept the through ease on on-boarding process. scanned and self-certified images of exit documents through digital means for processing (iii) Processing of death claims requests under the withdrawal request of NPS Subscribers. Atal Pension Yojana (APY) in view of Covid- 19 pandemic- Considering the difficulties faced (viii) OTP- based on-boarding- As part of mandate by Point of Presence under Atal Pension Yojana, given to PFRDA to develop the pension sector in processing of death claim requests due to and to increase the outreach of NPS, PFRDA Covid-19 pandemic, the processing of death has taken this step to ensure ease of NPS on- claim requests has been made easy. It has been boarding in the interest of subscribers. Around advised that PoP-APY shall duly verify and attest 12,044 subscribers used paperless OTP based the documents of death claim requests and on- boarding process. submit the scanned copies of all requisite (ix) Relief to APY subscribers: Considering the documents through their registered e-mail ID to outbreak of Covid-19, in order to reduce the NSDL-CRA. financial obligations, the Auto Debit of the (iv) To ensure proper service to subscribers, subscriber’s contribution was stopped from April during lock-down announced by Government of to June, 2020. Further, the penal interest to be India, Point of Presence (POPs) were advised charged to the APY subscribers on the deferred to undertake their various activities as per the contribution received between July and best available means, resources and in the September, 2020, was also waived off. transparent manner. (8) Initiatives with reference to the development (v) D-remit- Vide Circular dated 12th May,2020, of North-Eastern Region & Sikkim including PFRDA had informed about the proposed launch projects/ schemes in operation and actual of an additional option/mode of contribution expenditure thereon namely Direct Remittance (D-Remit) wherein the Annuity Literacy Program (ALP) was held in existing NPS Subscribers under Government/ Guwahati on September 20 & 21, 2019 with the Non-Government/All Citizens Model would be participation of 550 subscribers and nodal officers of Govt able to deposit their voluntary contributions by of Assam. The same was also attended by representative creating a Virtual ID linked to their Permanent of DFS, MoF. PFRDA shall resume ALP in more NE Retirement Account Number (PRAN). This locations post resumption of normalcy affected due to facility enables the subscribers to get the same Covid-19. day NAV. As on November 25, 2020, total 55,608 virtual accounts have been created and a total 11. Measures Taken During the COVID-19 24.85 crore contributions have been collected Pandemic. since rollout of this facility on October 1, 2020. 11.1 Pradhan Mantri Garib Kalyan Yojana (vi) Extension of timelines for activities under National Pension System (NPS) & NPS Lite- (1) Financial assistance to women PMJDY Account Swavalamban- Owing to disruption of various holders - 20.6 crore women PMJDY account activities due to Covid-19, the Authority had holders were financially assisted for Rs.500 per allowed waiver of compensation to be paid to month for three months from April – June, 2020. subscribers by POPs under NPS and NPS-Lite/ (2) Insurance scheme for health workers fighting Swavalamban guidelines on account of non- COVID-19 - This scheme includes doctors, adherence to TATs, up to 30.04.2020. These nurses, paramedics, and sanitation staff etc. who timelines were further extended till 30.09.2020. attend to COVID-19 patients while not (vii) NPS withdrawal process at the time COVID- considering their health risks. Rs.50 lakh 19 pandemic- Vide Circular dated June 05, 2020 insurance cover per person for the health workers on the captioned subject, whereby considering involved in COVID-19 outbreak. As on challenges being faced by COVID-19 pandemic 30.11.2020, 156 claims have been paid. 292Department of Financial Services V 11.2 Atma Nirbhar Bharat Abhiyaan ECLGS 1.0 and 2.0), whichever is earlier. The Scheme seeks to help the eligible entities tide over the crisis Hon’ble Prime Minister announced a Special caused by the Covid-19 pandemic and meet their economic and comprehensive package of Rs.20 lakh operational liabilities. As reported by 12 Public Sector crore - equivalent to 10% of India’s GDP on 12th May, Banks, top 23 Private Sector Banks and 31 NBFCs, as 2020. Following significant Agriculture-related measures on 1st January 2021, additional credit amounting to were announced as part of the ANB package. Rs.2.11 lakh crore has been sanctioned to over 87.16 11.2.1 Emergency Credit Line Guarantee Scheme lakh borrowers under ECLGS. (ECLGS) 11.2.2 Partial Credit Guarantee Scheme As part of the Aatma Nirbhar Bharat Abhiyaan Rs.45,000 crore Partial Credit Guarantee and as a specific response to the COVID pandemic, the Scheme (PCGS) 2.0 for NBFCs/HFCs/MFIs- Under Union Cabinet in its meeting on 20.05.2020 had approved Partial Credit Guarantee Scheme (PCGS) 1.0, approval Emergency Credit Line Guarantee Scheme (hereinafter was granted, in principle, on the recommendation of referred to as ECLGS 1.0) to support eligible Micro, Small SIDBI for purchase of pool of assets of Rs.520.64 crore. and Medium Enterprises (MSMEs) and business Operational guidelines for PCGS 2.0 were issued on enterprises in meeting their operational liabilities and 20.05.2020, extending the benefit to cover purchase of restarting their business in the context of the disruption Bonds/Commercial Papers by PSBs from the NBFCs/ caused by the COVID-19 pandemic. The Scheme was HFCs/MFIs. The revised guidelines issued on 17.08.2020 launched on 23.05.2020. allowed additional 3 months till 19.11.2020 for building ECLGS 1.0 - The ECLGS 1.0, provided a fully portfolios and increase ceilings for AA/AA- rated bonds guaranteed and collateral free Guaranteed Emergency from 25% to 50% of the total portfolio, to ensure availability Credit Line (GECL) for eligible MSME units, business of additional liquidity in the economy. The timeline for enterprises, individual loans for business purposes and purchase of bonds or CPs was further extended up to interested MUDRA borrowers, which were less than or 31.12.2020. A budgetary provision of Rs.500 crore made equal to 60 days past due as on 29.02.2020, up to 20 per in the first supplementary demands for grants for 2020- cent of their entire outstanding credit as on 29.02.2020 21. As reported by Public Sector Banks, banks have through the Member Lending Institutions (MLIs), approved purchase of portfolio of bonds/CPs under consisting of Scheduled Commercial Banks (SCBs), extended PCGS of Rs.23,242 crore (Provisional). Financial Institutions (FIs) and NBFCs. All entities with 11.2.3 Rs.1500 crore Interest Subvention for MUDRA- outstanding credit of up to Rs.50 crore as on 29.02.2020 Shishu Loans – were eligible under the Scheme and the 100 per cent credit guarantee for credit extended under the Scheme As approved earlier, 2% Interest Subvention for is being provided by NCGTC. The loans provided under prompt payees of Mudra-Shishu Loans for a period of 12 ECLGS 1.0 will have a 4-year tenor, with a 12-month months will be provided by the Government to eligible moratorium on repayment of principal. Interest rates under borrowers. An amount of Rs.775 crore has been released the Scheme are capped at 9.25% for banks & FIs and at additionally to SIDBI as part of first tranche for immediate 14% for NBFCs. release of interest subvention benefit to the Member Lending Institutions (MLIs). An amount of Rs.1,232 crore ECLGS 2.0 - The Scheme has been extended has been allocated in the first Supplementary Demands through ECLGS 2.0 for the 26 sectors identified by the Kamath Committee and the health care sector. Entities for Grants. As on 01.01.2021, more than Rs.250 crore with outstanding credit above Rs.50 crore and not has been disbursed by SIDBI to MLIs for onward credit exceeding Rs.500 crore as on 29.02.2020, which were of subvention amount into the accounts of the borrowers. less than or equal to 30 days past due as on 29.02.2020 11.2.4 Rs.30,000 crore Additional Emergency are eligible under ECLGS 2.0. The eligible entities/ Working Capital Funding for farmers through borrower accounts shall be eligible for additional funding NABARD up to 20 per cent (which could be fund based or non- fund based or both) of their entire outstanding credit (fund  New front loaded special refinance facility of based only) as a collateral free Guaranteed Emergency Rs.30,000 crore sanctioned by NABARD during Credit Line (GECL), which would be fully guaranteed by COVID-19 to RRBs and Cooperative Banks. NCGTC. The loans provided under ECLGS 2.0 will have a 5-year tenor, with a 12-month moratorium on repayment  This is over and above Rs.90,000 crore to be of principal. provided by NABARD through the normal refinance route during this year. The scheme is valid till 31.03.2021 or till guarantees for an amount of Rs.3,00,000 crore is  As on 11.12.2020, Rs.25,000 crore has been sanctioned under the GECL (taking into account both disbursed out of this special facility. 293Annual Report 2020-2021  Balance amount of Rs.5000 crore under SLF 11.2.9 PM Formalisation of Micro Food Processing allocated to NABARD by RBI for smaller NBCFCs Enterprises Scheme (PM FME) and NBFC-MFI out of which Rs.650 crore has A Centrally Sponsored Scheme namely has been been disbursed by NABARD till 01.01.2021. launched by M/o Food Processing Industries (MoFPI) to 11.2.5 Rs.2 lakh crore credit boost to the farm sector address the challenges faced by the micro enterprises by covering 2.5 crore PM- KISAN and to tap the potential of groups and cooperatives in beneficiaries under Kisan Credit Card supporting the upgradation and formalization of these Scheme enterprises. The scheme envisages an outlay of Rs.10,000 crore over a period of five years from 2020- As on 01.01.2021, a total number of 179.06 lakh 21 to 2024-25 under which 2,00,000 micro food KCC with KCC limit of Rs.1.65 lakh crore has been processing units will be directly assisted with credit-linked sanctioned under a special drive to saturate the farmers subsidy. It aims to provide capital subsidy @35% of the including KCC beneficiaries, dairy & fisheries farmers eligible project cost, with a maximum ceiling of Rs.10.0 under the KCC scheme. lakh per unit for Individual micro food processing units, 11.2.6 The PM Street Vendor’s Atmanirbhar Nidhi SHGs, etc. Operational guidelines for the scheme issued Scheme (PM SVANIDHI), a Central Sector Scheme fully by MoFPI have been shared with all banks and NABARD funded by MoHUA, provides a Special Micro-Credit facility and they are in readiness to provide credit to all eligible as a working capital loan of up to Rs.10,000 to eligible entities. urban street vendors. As on 31.12.2020, a total of 12. Miscellaneous 25,33,874 applications have been received by Banks, out of which 16,83,911 have been sanctioned. Further, credit 12.1 Representations from SCs, STs, OBCs and against 12,28,497 applications has been disbursed. PWDs. 11.2.7 Agricultural Infra Fund (AIF) Details of representations from SCs/STs/OBCs and Persons with Disabilities (PWDs) in Public Sector A new Agriculture Infrastructure Fund (AIF), with Banks/Financial Institutions and Insurance Companies targeted lending of Rs.1 lakh crore by banks and Financial is at Annexure I&II respectively. Institutions from 2020-21 to 2023-24 has been launched by D/o Agriculture Cooperation and Farmers Welfare 12.2 Disposal of Public Grievances (DAC&FW) to mobilize medium to long term debt Timely redressal of public grievances relating to financing facility for investment in viable projects relating banking and insurance Sectors is an important tool to post-harvest management infrastructure and towards upgrading the quality of customer service in this community farming assets. The scheme is available for very crucial segment of financial sector. Department of FPOs, JLGs, SHGs, PACS, Agri-entrepreneurs, Start-up, Administrative Reforms and Public Grievances (DARPG) etc. with the facility of 3% interest subvention for loan has established CPGRAMS (Centralised Public upto Rs.2 crore. Operational guidelines have been issued Grievance Redressal and Monitoring System), (an online and MoUs with Banks have been signed by DAC&FW web-based system), to resolve public grievances. To and they are in readiness to provide credit to all eligible ensure that individual grievances are resolved within a entities. maximum time limit of 60 days and the petitioners are 11.2.8 Animal Husbandry Infrastructure informed of the action taken, necessary instructions have Development Fund (AHIDF) been issued to PSBs and Insurance Companies. A special fund namely the Animal Husbandry In the Department of Financial Services, a large Infrastructure Development Fund (AHIDF), with targeted number of grievances/complaints concerning Banking lending of Rs.15,000 crore from 2020-21 to 2022-23 by and Insurance Sectors are received directly from banks has been launched by D/o Animal Husbandry and citizens, both online and by post. The postal grievances Dairying (DAHD). The scheme with the facility of 3% are also digitized and processed through CPGRAMS interest subvention for all eligible entities aims at for its onward transmission to the designated Nodal incentivising investments by individual entrepreneurs, Officers i.e. Deputy General Manager/General Manager private companies and FPOs to establish (i) the dairy (DGM/GM) of concerned Public Sector Banks/Public processing and product diversification infrastructure, (ii) Sector Insurance Companies (PSBs/PSICs) for its meat processing and product diversification infrastructure redressal within a maximum time limit of 60 days. All and (iii) Animal Feed Plant. Operational guidelines for organisations under DFS have made efforts to maximise the scheme issued by DAHD have been shared with all the use of technology for reducing the grievance banks and NABARD. redressal time to one month from the existing two months. These directions are followed by all 294Department of Financial Services V organisations under the Department of Financial Authority (IRDA) respectively. RBI has set up 21 Banking Services. Action taken reports are uploaded on the Ombudsmen across the country under Banking system and a scanned copy of the reply is provided to Ombudsmen Scheme 2006 and also set up 22 the complainant as pdf file that can be viewed by the Ombudsman for Digital Transactions. Similarly, there are complainant online. Replies through post are also sent 17 Insurance Ombudsmen set up by IRDA. The PSBs to those complainants who have lodged their grievances have also established Ombudsman for settlement of physically. grievances. Banks and Insurance Companies have grievance Grievances received from PMO are attended redressal mechanism in place and are also hosted on promptly and present status is being uploaded on portal their respective websites for information and usage by by concerned Banks/ Insurance companies. Most of the the customers. The first level of grievance redressal is grievances are related to issues related to ATM, Pension, Branch Manager in Banks and Insurance Companies Loan Applications, Bank transactions and fraud cases. followed by Zonal Managers and then General Manager As per CPGRAMS database the details of receipt, (Customer Care) in Head Office. The grievances disposal and pending grievances during the period concerning private banks and private insurance 01.04.2020 to 30.11.2020 in the banking and insurance companies are resolved through Reserve Bank of India sectors are as follows: (RBI) and Insurance Regulatory and Development Sector Brought Received Disposed Pending % of Less More Forward as on Disposal as than 60 than 60 30.11.2020 on days days old 30.11.2020 old Banking 6353 120248 114550 12051 90.48% 11388 663 Insurance 271 12972 12394 849 93.59% 816 33 Total 6624 133220 126944 12900 90.76% 12204 996 Status of public grievances on PG Portal for the period 01.04.2020 to 30.11.2020: Total Grievances Grievances Balance % of disposal as on Average time of disposal received Disposed Of 139844 126944 12900 90.76 16 days Status of public grievances for the period 01/04/2020 to 30/11/2020 relating to social security schemes launched by the Government: Name of the scheme Total Grievance Grievance % of Grievance disposed pending disposal Atal Pension Yojana 56 48 8 85.71 Pradhanmantri Jan Dhan Yojana 1078 1013 65 93.71 Pradhan Mantri Mudra Yojna 1865 1644 221 88.15 Pradhan Mantri Suraksha Bima Yojana 193 155 38 80.31 Pradhan Mantri Jeevan Jyoti Bima 252 208 44 82.54 Yojna 295Annual Report 2020-2021 Status of public grievances received from PMO for the period 01.04.2020 to 30.11.2020: Name of the Total Grievances Grievances % of disposal Sector Grievances disposed pending Banking 50220 45970 4250 91.54 Insurance 4809 4448 361 92.49 As per CPGRAMS database, the details of receipt, disposal and pending grievances during the period 01.04.2020 to 30.11.2020 in respect of banking and insurance sectors for Covid-19 grievances are as follows: Pending % of Disposal Less than More Brought Sector Received Disposed as on as on 60 days than 60 Forward 30.11.2020 30.11.2020 old days old Banking 54 12622 12460 216 98.30% 213 3 Insurance 8 936 927 17 98.20% 17 0 Total 62 13558 13387 233 98.29% 230 3 12.3 Vigilance office at Mumbai mainly attending to the Court matters on day to day basis and third one at Bangalore mainly to 12.3.1 Organisations under Vigilance Section deal with matter relating to Fairgrowth Financial Services Ltd (FFSL) and Fair Growth Investment Ltd (FGIL), (a) Special Court Bangalore based notified firms. Office of the Custodian The Special Court (Trial of offences relating to has been sanctioned 29 posts including Custodian and Transactions in Securities) Act, 1992 came into force on two posts of Directors. These are renewed on a year-to- 06.06.1992. The Act was necessitated by reasons of the year basis by Ministry of Finance, DFS with the approval unprecedented situation wherein very large amount of of Integrated Finance Unit (IFU). public monies had been siphoned off into private pockets. Since inception, a total of 13375 cases were filed The legislature sought to set up a Special Court through in the Special Court, which were defended/contested by this Act for (a) speedy trial of offences (b) immediate the Custodian and 13262 cases have been disposed of attachment and freezing of all assets of parties suspected by the Special Court, leaving a balance of 113 cases for to be involved in the scam and (c) a reasonable and their disposal as on 31st October, 2020. Similarly, a total equitable distribution of the property. of 509 appeals were filed in the Supreme Court, of which The Special Court has been sanctioned four posts 471 cases have been disposed of, leaving 38 cases of judges. To support their day to day functioning, the pending (31st October, 2020). As on 30th October, 2020, office of the Special Court functions with a staff of 49 while the total outstanding liabilities of notified parties were officials at various levels. These are renewed on a year- for Rs.37,367 crore, the assets were only to the tune of to-year basis by DFS, Ministry of Finance with the Rs.4532 crore, out of which Rs.1118 crores are non- approval of IFU. recoverable assets. Till 30th October, 2020, Rs.9,837 crore (approx.) has been recovered by the Custodian and out As on 15th January, 2021, a total number of of these assets, Rs.6,423 crore in cash has been pending matters in the Special Court is 128 which distributed to Income Tax Department, Banks etc. includes, Suits and Special Cases (Criminal). Out of a total of 23.60 crore attached shares, (b) Office of the Custodian 16.51 crore shares have been sold and a sum of To assist the Custodian in discharging the duties Rs.3,351.32 crore realized. Out of the remaining 7.09 under the Special Court (TORTS) Act, 1992, at present crore shares with current value of Rs.2009 crore, 5.56 there are three offices — with headquarters at New Delhi, crore are traded shares and 1.53 crore are untraded 296Department of Financial Services V shares. A total of 177 immovable properties of notified to strengthen the preventive vigilance in these parties had been attached by the Custodian, out of which, organisations. 148 have been sold/disposed to realize a value of Rs.173 (4) Vigilance Awareness Week was observed from crore. A sum of Rs.6.49 crore has been realized by sale 27.10.2020 to 02.11.2020. of jewellery items through Customs department / SBI. Cash balance in the attached current accounts and fixed 12.4 Information Technology deposits of notified parties as on 30th October, 2020 is Rs.1335.25 crore. The initiatives under 2020-21 for the Department of Financial Services are as below: 12.3.2. Performance (1) Preparation and Implementation of Cyber Crisis (1) The Vigilance Division of the Department Management Plan. monitors the progress on disposal of complaints received from various sources and pendency of (2) Training programs for creating awareness about disciplinary/vigilance cases regularly and Cyber Security amongst officers and staff of DFS. meeting with CVOs is undertaken in this (3) Notification was issued for declaring information Department at appropriate intervals. / structure of RTGS, NEFT and e-Kuber of RBI (2) During the period of 01.01.2020 to 31.12.2020 a as Critical Information Infrastructure. total number of six (6) Additional Chief Vigilance Officers (CVOs) have been appointed in State 12.5 Audit Paras Bank of India. A Summary of Audit observations made available (3) Instructions have been issued from time to time by the Office of C&AG pertaining to DFS is at as and when any gap in the system is observed Annexure III. 297Annual Report 2020-2021 298 I eruxennA secivreS laicnaniF fo tnemtrapeDDepartment of Financial Services V 299 II eruxennA secivreS laicnaniF fo tnemtrapeD IADRI/ADRFP/IBR/seinapmoC ecnarusnI rotceS cilbuP/snoitutitsnI ecnaniF cilbuP/sknaB rotceS cilbuP - ecruos ataDAnnual Report 2020-2021 300 III eruxennA secivreS laicnaniF fo tnemtrapeDDepartment of Financial Services V 301 secivreS laicnaniF fo tnemtrapeD fo trahC lanoitasinagrO 1202.10.02 no sAFor Public Contact Purposes: Ministry of Finance Department of Economic Affairs North Block, New Delhi – 110001 Phone : 23095120, 23092453 Website: http://www.finmin.nic.in/the _ministry/dept_eco_affairs/index.asp Department of Expenditure North Block, New Delhi – 110001 Phone : 23095661, 23095613 Website: http://www.finmin.nic.in/the _ministry/dept_expenditure/index.asp Department of Revenue North Block, New Delhi – 110001 Phone : 23095384, 23095385 Website: http://www.finmin.nic.in/the_ministry/dept_revenue/index.html Department of Investment and Public Asset Management Block 11 & 14, CGO Complex, Lodhi Road, New Delhi – 110003 Phone : 011-24360163 Website: http://www.dipam.gov.in/dipam/home Department of Financial Services Jeevan Deep Building, Parliament Street, New Delhi – 110001 Phone : 23748721, 23748734 Website: http://www.finmin.nic.in/the-_ministry/dept_fin_services/fin_services.asp iANNUAL REPORT 2020-2021 MINISTRY OF FINANCE ºÉiªÉàÉä´É VɪÉiÉä ºÉiªÉàÉä´É VɪÉiÉä Government of India MINISTRY OF FINANCE ANNUAL REPORT 2020-2021 PRINTED AT BUDGET PRESS, MINISTRY OF FINANCE, NEW DELHI