topic: rbi revises stressed asset resolution small finance...

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Topic: RBI revises stressed asset resolution norms

GS Paper 3 Source: – the Hindu, June 8

Mobilisation of resource

Context - Introduces ‘review period’ of 30 days to recognise default Background - After the Supreme Court struck down the controversial February 12, 2018 circular of Reserve Bank of India (RBI) on stressed asset resolution, the banking regulator on Friday released revised set of norms which are substantially less stringent from the previous one. • In controversial February 12, 2018 circular of

Reserve Bank of India, it has sought to nudge banks towards the insolvency courts by introducing a disincentive in the form of additional provisions for delayed resolution.

• The new circular asked lenders to undertake a prima facie review of the borrower account within 30 days from a default, which is termed as “review period.” During this review period, lenders may decide on the resolution strategy, including the nature of the resolution plan (RP), the approach for implementation of the RP etc.

• Legal proceedings- The lenders may also choose to initiate legal proceedings for insolvency or recovery

• If the RP is to be implemented, lenders have been asked to enter into an inter-creditor agreement (ICA), within the review period, to provide for ground rules for finalisation and implementation of the RP.

• The RP will have to implemented within 180 days from the end of review period, RBI said.

• The review period shall commence not later than the date of this circular for loans above ₹2000 crore; January 1 ,2020 for loans above ₹1,500 crore to ₹2,000 crore.

• There is a disincentive for banks if they delay implementing a viable resolution plan. In case the plan is not implemented within 180 days from the end of review period, banks have to make additional provision of 20% and another 15% if the plan is not implemented within 365 days from the start of the review period.

• The additional provisions would be reversed if resolution is pursued under Insolvency and Bankruptcy Code (IBC).

• Apart from banks, these new norms are also applicable for non-banking financial companies,

small finance banks and other financial institutions.

SEBI, MCA sign pact for more data scrutiny

The Hindu • The Securities and Exchange Board of India (SEBI)

and the Ministry of Corporate Affairs (MCA) signed a memorandum of understanding (MoU) to facilitate seamless sharing of data and information for carrying out scrutiny, inspection, investigation and prosecution.

• This assumes significance as the MCA has the database of all registered firms while SEBI only regulates listed entities that may have unlisted subsidiaries, with the MCA having access to all the data of such unlisted entities.

• Why such need -The MoU comes in the wake of increasing need for surveillance in the context of corporate frauds affecting important sectors of the economy. As the private sector plays an increasingly vital role in economic growth, the need for a robust corporate governance mechanism becomes the need of the hour.

• The MoU will ensure that both the MCA and the SEBI have seamless linkage for regulatory purposes and in addition to regular exchange of data, the two will also exchange with each other, on request, any available information for scrutiny, inspection, investigation and prosecution.

• A Data Exchange Steering Group will meet periodically to review the data exchange status.

Topic - Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

GS Paper 3 Source: – THE INDIAN EXPRESS, June 8

Slippery slope


CONTEXT - NBFC crisis could accentuate contagion risk in financial sector. Cabinet committee on investment and growth must address it. background -The woes of non-banking finance companies and housing finance companies continue to reverberate(bounce) through the financial system. A few days ago, Dewan Housing Finance Corporation defaulted on its interest obligations. Its short-term rating has been cut to default.

Reasons

Financial conditions have worsened with spreads of NBFC bonds rising significantly in the recent past. At one level, the argument can be made that lenders are re-evaluating their risk. That the market is discriminating between the better-rated NBFCs and those whose balance sheets appear problematic. And, that an intervention at this stage will create problems of moral hazard.

Solution

1. A possible solution is for the RBI to open a special borrowing window to provide liquidity to NBFCs/HFCs. As was done during the financial crisis of 2008, the central bank, can provide short term liquidity to NBFCs, till financial conditions normalise. But the RBI doesn’t seem inclined towards this route, presumably because it will be difficult to differentiate between NBFCs.

2. It could also nudge banks to increase their lending to NBFCs. To this effect, it has already eased norms for maintaining risk weights on bank lending to NBFCs.

3. Further easing of systemic liquidity could boost flows to NBFCs.

4. an asset quality review to reveal the true state of NBFCs’ books. While this will address issues of information asymmetry, such a move may end up prolonging the crisis.

5. the RBI could identify systemically important NBFCs and backstop them through banks.

Conclusion- But the larger issue of resolution of financial firms remains. Situations such as the current one warrant swift resolution so that problems remain contained. Perhaps, the newly formed cabinet committee on investment and growth could contemplate bringing back the FRDI( financial Resolution and Deposit Insurance) bill, with modifications to address contentious issues like the bail-in clause and deposit insurance.

Paper 3 - Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

GS Paper 3 Source: Policy must pray to one god — formal jobs. June 8, 2019

The only mantra Policy must pray to one god — formal jobs. June 8, 2019

Context – steps need to be taken for formalisation of jobs

Background -India’s problem is not unemployment — this has bounced in the low and narrow range of 4-7 per cent for 50 years — but employed poverty. Steps need to be taken

1. We need massive ease-of-doing business that rationalises (cuts down ministries, compliances, and filings), simplifies (adopts a universal enterprise number and one labour code) and digitises (adopts a paperless, presenceless and cashless process for all employer compliance by shifting from uploads to websites to an API (application program interface) architecture with straight-through-processing).

2. India’s labour laws have an insane reverse payroll wedge — employers are forced to deduct 40 per cent-plus of gross wages for employees with monthly wages up to Rs 25,000. Yet, net wages are only 9 per cent lower for employees with monthly wages above Rs 25,000. This wedge murders formalisation and confiscates property from the poor; all wages belong to employees in a cost-to-company world.

3. The reform agenda is clear — employee contribution must be made optional, employees must choose who handles their employer contributions, and social security programme fees must be capped to their costs. One driver of 20 million new social security payers has been the Pradhan Mantri Rojgar Protsahan Yojna — this partial reimbursement to employers for incremental low-wage employees has incentivised social security enrolment, is easy to verify, and hard to fudge and should be extended for a fixed period of three years.

4. Apprenticeships are the future of learning, yet India only has 5 lakh apprentices instead of 1.5 crore (if we use Germany’s number of 2.7 per cent of the labour force). Changes could include merging the two central government initiatives, Regional Directorates of Apprenticeship Training (RDAT) and Board of Apprentice Training (BOAT), operate effective online


matching platforms. Most importantly, we must enable degree-linked apprentices (skill universities await clearance for linking apprentices to degrees via distance and online delivery).

5. Fairly-priced capital catalyses formalisation, yet India’s credit to GDP ratio is 50 per cent (rich countries are at 100 per cent). Lowering our cost of money has begun but sustainably targeting a higher credit to GDP ratio needs more bank licences, fixing the governance at nationalised banks, blunting the asset liability mismatch at NBFCs (some irrationally funded 30 per cent of their balance sheet with commercial paper) and restoring the sanctity of the 270-day IBC bankruptcy deadline.

6. More Indian enterprises need formal financial credit — capital investment and working capital availability drive productivity — without replicating the rash lending between 2008 and 2014 that gave us Rs 14 lakh crore worth of bad loans. Sustainably expanding credit at reasonable prices without stealing from our grandchildren needs thoughtfully-crafted competition.

7. We should consider making labour a state subject and must continue the decentralisation of funds, functions and functionaries to states while simultaneously creating accountability, capabilities and resources in city governance. We can’t take jobs to people and need to take people to jobs but the governance deficit of cities is blunting migration.

Conclusion Jawaharlal Nehru wrote in Discovery of India that “India is a geographical and economic entity, a cultural entity amidst diversity, a bundle of contradictions held together by invisible threads. She is a myth and an idea, a dream and a vision, and yet very real and present and pervasive”. The 67 per cent-plus turnout in our recent election not only reflect the invisible threads that hold India together but capture an aspiration that breaks with India’s economic past. This needs policy to pray to the one god of formal jobs.

Topic: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

GS Paper - 2 Source: the Hindu

A clear arc from India to Nigeria

Context - The leadership in both countries must take the initiative to energise bilateral ties

Introduction - The challenges faced by Prime Minister Narendra Modi and Nigerian President Muhammadu Buhari during their first terms were similar: security against terror, monetary and fiscal conundrums, a communal and sectarian divide, chronic unemployment, rampant corruption, rural distress and a fragile neighbourhood being the recurrent themes.

1. Diverse trade - First, Nigeria being Africa’s most populous country and economy as well as the world’s sixth largest oil is evidently important to us. According to the latest Indian Department of Commerce statistics, Nigeria is India’s largest trading partner in Africa. As official Nigerian data show, thanks to our booming oil imports, India is Nigeria’s largest trading partner. For the same reason, Nigeria enjoys 4:1 surplus in bilateral trade. Nevertheless, it is still a sizeable market for India’s manufactured exports, miscellaneous machinery, vehicles, pharmaceutical products, textile items, iron and steel articles and plastics.

2. official encouragement or support- For instance, some simple tweaking in our visa procedure can help thousands of Nigerians avail of our medical and educational facilities, benefiting all sides and creating huge people-to-people goodwill. Despite the encouraging numbers, the two governments have not yet been able to facilitate direct connectivity of air travel, banking and shipping — steps which could have promoted the ease of doing bilateral business.

3. enormous potential still waits to be leveraged in such sectors such as upstream hydrocarbons (despite India being the largest buyer of Nigerian crude), agriculture, health care and skilling. Despite their growth, Indian exports to Nigeria are still around a quarter of China’s.

4. Though some ministerial-level visits took place in the past five years, these were mostly for multilateral events in India. Bilateral ties have not drawn commensurate proportion of the resources offered by India to its African partners largely due to some systemic issues.

5. Defence cooperation has been mostly episodic and training oriented.

6. With oil and other commodities becoming a seller’s market, an early summit between the two leaders is an obvious imperative. It could evolve a multi-


pronged strategy to leverage evident economic complementarities in sectors such as hydrocarbons, infrastructure, institution-building, defence and agriculture.

Conclusion

If handled deftly and with political will, it could usher in an India-Nigeria economic synergy that has been untapped for some decades.

Topic, Structure, organization and functioning of the Executive

GS Paper 2 Source: the Hindu

Is NITI Aayog old wine in a new bottle?

Background - Now, when the country’s economy has not performed to the high expectations Mr. Modi had created, and citizens’ aspirations have not been realised, the performance of the NITI Aayog is under scrutiny, as it should be. Many people are even nostalgically recalling the Planning Commission, including some who were very critical of it and wanted it overhauled.

Justification for formation of NITI ayog- 1. Mr. Modi’s predecessors, Manmohan Singh and

Atal Bihari Vajpayee, had faced similar, large, economic, social, political and global challenges. When Vajpayee was presented a nine-point plan by a global think-tank to increase the economy’s growth to 9%, he famously retorted, “We know all that. The question is, how will it all be done?” He highlighted that many stakeholders must be involved in the implementation of a plan in a large, diversified and democratic country — the States, the private sector, civil society and even the political Opposition. Therefore, it is not good enough to have a plan, there must also be a strategy for its cooperative implementation too.

2. A commission chaired by C. Rangarajan, then Chairman of the Prime Minister’s (Manmohan Singh) Economic Advisory Council, examined budgetary processes, divisions of responsibilities between the Finance Ministry and the Planning Commission, and distinctions between ‘plan’ and ‘non-plan’ expenditures. It concluded that budgetary responsibility must be concentrated in the Finance Ministry, and it was no longer desirable for the Planning Commission to have powers for financial provisions.

3. Therefore, that the bold charter of NITI Aayog that Mr. Modi announced in 2015 was consistent with

Dr. Singh’s and Vajpayee’s insights. He was implementing an idea whose time had come.

Scrutiny

1. The NITI Aayog and the government would do well to conduct an open-minded review of what NITI Aayog has achieved so far to adopt the new role described in its charter — that of a catalyst of change in a complex, federal, socioeconomic system. And assess whether it has transformed its capabilities sufficiently to become an effective systems reformer and persuader of stakeholders, rather than merely be an announcer of lofty multi-year goals and manager of projects, which many suspect it is.

2. The transformational approach to planning and implementation that 21st century India needs, which is alluded to in NITI’s charter, requires evaluations and course corrections in the midst of action. It requires new methods to speed up ‘organisational learning’ among stakeholders in the system who must make plans together and implement them together.

3. The NITI Aayog’s charter has provided a new bottle. It points to the need for new methods of cooperative learning and cooperative implementation by stakeholders who are not controlled by any central body of technical experts with political and/or budgetary authority over them. Merely filling this new bottle with old ideas of budgets, controls and expert solutions from above will not transform India.

Conclusion -The debate about NITI Aayog’s efficacy must focus on whether or not it is performing the new role it must, and what progress it has made in acquiring capabilities to perform this role, rather than slipping back into the ruts of yesterday’s debates about the need for a Planning Commission.

Topic: All States can constitute Foreigners Tribunals


The 1964 order on Constitution of Tribunals said: “The Central Government may by order, refer the question as to whether a person is not a foreigner within meaning of the Foreigners Act, 1946 to a Tribunal to be constituted for the purpose, for its opinion.” The amended order issued last week says — “for words Central Government may,’ the words ‘the Central Government or the State Government


or the Union Territory administration or the District Collector or the District Magistrate may’ shall be substituted.”

Implications

1. This essentially means that the MHA has now bestowed its powers to refer a case of a suspected foreigner to a tribunal constituted for the purpose on a state administration too. Until now, only the Centre had the power to deal with that question under the Foreigners Act. However, any state, by dint of the 1964 order which had countrywide reach, could get the Central go-ahead to set up such tribunals. State governments have, however, traditionally continued to refer such cases to local courts as additional funds were needed to set up such tribunals. In Assam, the MHA itself provided funds to set up the tribunals.

2. The amended Foreigners (Tribunal) Order, 2019 also empowers individuals to approach the Tribunals.

3. The insertions have also empowered district magistrates (DMs) to refer a suspected foreigner case to a tribunal, based on her own judgement or in the case of those whose citizenship is under question and who have still not appealed to a tribunal within two months of a case registered against them.

4. Earlier only the State administration could move the Tribunal against a suspect, but with the final NRC about to be published and to give adequate opportunity to those not included, this has been done. If a person doesn’t find his or her name in the final list, they could move the Tribunal

Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

GS Paper 2 Foreign policy challenges five years later Source-: the Hindu

Background - As Prime Minister Narendra Modi begins his second term, the world looks more disorderly in 2019 than was the case five years ago. U.S. President Donald Trump’s election and the new dose of unpredictability in U.S. policy pronouncements; the trade war between the U.S. and China which is becoming a technology war; Brexit and the European Union’s internal preoccupations; erosion of U.S.-Russia arms control agreements and the likelihood of a new arms race

covering nuclear, space and cyber domains; the U.S.’s withdrawal from the Iran nuclear deal and growing tensions between Saudi Arabia and Iran are some of the developments that add to the complexity of India’s principal foreign policy challenge of dealing with the rise of China.

Redefining neighbourhood –

1. After the Uri attack in 2016, India’s stance affected the convening of the SAARC summit in Islamabad. Since an invitation to Pakistan was out of the question, leaders from the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) countries (Bangladesh, Bhutan, Nepal, Sri Lanka, Myanmar and Thailand) with Kyrgyzstan, added as current Shanghai Cooperation Organisation chair, highlighted a new neighbourhood emphasis. Yet it is difficult to ignore Pakistan. A terrorist attacks cannot be ruled out and it would attract kinetic retaliation. A policy in-between diplo-hugs and no-communication provides both nuance and leverage.

2. Relations with countries on our periphery, irrespective of how we define our neighbourhood, will always be complex and need deft political management. it is preferable to work on the basis of generating broad-based consent rather than dominance.

3. This necessitates using multi-pronged diplomatic efforts and being generous as the larger economy. It also needs a more confident and coordinated approach in handling neighbourhood organisations — SAARC, BIMSTEC, the Bangladesh, the Bhutan, India, Nepal Initiative, the Bangladesh-China-India-Myanmar Forum for Regional Cooperation, the Indian Ocean Rim Association. This should be preferably in tandem with bilateralism because our bilateral relations provide us with significant advantages.

4. With all our neighbours, ties of kinship, culture and language among the people straddle boundaries, making the role of governments in States bordering neighbours vital in fostering closer linkages. This means investing attention in State governments, both at the political and bureaucratic levels.

Managing China and the U.S.

1. China will remain the most important issue, as in 2014. Then, Mr. Modi went along with the old policy since the Rajiv Gandhi period that focussed on growing economic, commercial and cultural relations while managing the differences on the


boundary dispute through dialogue and confidence-building measures, in the expectation that this would create a more conducive environment for eventual negotiations.

2. Underlying this was a tacit assumption that with time, India would be better placed to secure a satisfactory outcome. It has been apparent for over a decade that the trajectories were moving in the opposite direction and the gap between the two was widening. For Mr. Modi, the Doklam stand-off was a rude reminder of the reality that the tacit assumption behind the policy followed for three decades could no longer be sustained.

3. The informal summit in Wuhan restored a semblance of calm but does not address the long-term implications of the growing gap between the two countries. Meanwhile, there is the growing strategic rivalry between the U.S. and China unfolding on our doorstep. We no longer have the luxury of distance to be non-aligned. At the same time, the U.S. is a fickle partner and never has it been more unpredictable than at present.

4. Despite this, a number of issues have emerged that need urgent attention. As part of its policy on tightening sanctions pressure on Iran, the U.S. has terminated the sanctions waiver that had enabled India to import limited quantities of Iranian crude till last month.

5. The Generalised System of Preferences scheme has been withdrawn, adversely impacting about 12% of India’s exports to the U.S., as a sign of growing impatience with India’s inability to address the U.S.’s concerns regarding market access, tariff lines and recent changes in the e-commerce policy.

6. A third looming issue, perhaps the most critical, is the threat of sanctions under the Countering American Adversaries Through Sanctions Act (CAATSA), were India to proceed with the purchase of the S-400 air and missile defence system from Russia. Till the end of last year, then U.S. Defence Secretary James Mattis had been confident of India securing a waiver — but times have changed.

7. Other potential tricky issues could relate to whether Huawei, which is currently the prime target in the U.S.-China technology war, is allowed to participate in the 5G trials (telecom) in India.

8. The reconciliation talks between the U.S. and the Taliban as the U.S. negotiates its exit from Afghanistan raise New Delhi’s apprehensions about the Taliban’s return, constituting another potential irritant.

9. External balancing -How New Delhi manages its relations with Washington will be closely watched in Beijing and Moscow, which have been moving closer. It is reminiscent of 1971 when China began moving closer to the U.S. to balance the then USSR, with which its relationship was strained. Today, both see merit in a common front against the U.S., though for China the rivalry with the U.S. is all-encompassing because of its geography and Taiwan. Russia has interests beyond, in Afghanistan, West and Central Asia and Europe, and it is here that Mr. Modi will need to exploit new opportunities to reshape the relationship.

Conclusion- We need to ensure far more coordination among the different ministries and agencies than has been the case so far. Our record in implementation projects is patchy at best and needs urgent attention. Employing external balancing to create a conducive regional environment is a new game that will also require building a new consensus at home.

Topic: Science and Technology - developments and their applications and effects in everyday life Artificial Intelligence, the law and the future

GS Paper 3 Source: The Hindu

Background - In February, the Kerala police inducted a robot for police work. The same month, Chennai got its second robot-themed restaurant, where robots not only serve as waiters but also interact with customers in English and Tamil. All these examples symbolise the arrival of Artificial Intelligence (AI) in our everyday lives. AI has several positive applications, as seen in these examples. But the capability of AI systems to learn from experience and to perform autonomously for humans makes AI the most disruptive and self-transformative technology of the 21st century.

Challenges of AI

1. If AI is not regulated properly, it is bound to have unmanageable implications. Imagine, for instance, that electricity supply suddenly stops while a robot is performing a surgery, and access to a doctor is lost? And what if a drone hits a human being? All countries, including India, need to be legally prepared to face such kind of disruptive technology.

2. Predicting and analysing legal issues and their solutions, however, is not that simple. For instance,


criminal law is going to face drastic challenges. What if an AI-based driverless car gets into an accident that causes harm to humans or damages property? Who should the courts hold liable for the same? Can AI be thought to have knowingly or carelessly caused bodily injury to another? Can robots act as a witness or as a tool for committing various crimes?

3. Global effort -In the U.S., there is a lot of discussion about regulation of AI. Germany has come up with ethical rules for autonomous vehicles stipulating that human life should always have priority over property or animal life. China, Japan and Korea are following Germany in developing a law on self-driven cars.

4. India ‘s effort - In India, NITI Aayog released a policy paper, ‘National Strategy for Artificial Intelligence’, which considered the importance of AI in different sectors. The Budget 2019 also proposed to launch a national programme on AI. While all these developments are taking place on the technological front, no comprehensive legislation to regulate this growing industry has been formulated in the country till date.

5. Legal personality of AI - First we need a legal definition of AI. Also, given the importance of intention in India’s criminal law jurisprudence, it is essential to establish the legal personality of AI (which means AI will have a bundle of rights and obligations), and whether any sort of intention can be attributed to it.

6. To answer the question on liability, since AI is considered to be inanimate, a strict liability scheme that holds the producer or manufacturer of the product liable for harm, regardless of the fault, might be an approach to consider. Since privacy is a fundamental right, certain rules to regulate the usage of data possessed by an AI entity should be framed as part of the Personal Data Protection Bill, 2018.

Conclusion- AI-driven tech will become counterproductive if a legal framework is not devised to regulate it on

Topic: Welfare schemes for vulnerable sections of the population


The merits of a free ride The Delhi government’s proposal encourages the use of public transport and is gender-inclusive

Background - The Delhi government’s proposal to make metro and bus travel free for women not only encourages women to use public transport more, but also allows them to occupy public spaces more and exercise their right to work and commute much more freely.

1. According to various studies, women’s choices (and often those of their spouses and families) about work are determined by their commuting experience, including the availability of modes of transport, distance of the workplace from their residence, presence of other women during commute, and safety of the overall route. For many families, it is the cost of commute that determines their choice of work.

2. A recent report by Deloitte revealed that female labour force participation fell to 26% in 2018 from 36.7% in 2005 amidst the larger unemployment crisis. A move like this could therefore increase productivity and women’s participation in the economy.

3. More importantly, this move could make the Delhi metro (a state-of-the-art, air-conditioned public mode of transport) accessible to working-class women for whom the metro has always been an aspirational vehicle.

4. Given that the principal logic of any public service is that it should be inclusive, free (or at least inexpensive) access to metro trains and buses must also necessarily extend to the urban working poor, students, the differently abled, and senior citizens — albeit with an option of self-exclusion for those who can afford it.

5. Post metro fare hikes in 2017, ridership dropped by over three lakh passengers per day, owing to increased unaffordability.

6. Ecologically too, in a polluted city like Delhi, universalising cheap access to public transport and disincentivising private vehicles as much as possible is the need of the hour.

7. Finally, those arguing that this move would reinforce the idea that women are the ‘weaker sex’ often turn a blind eye to the notion of equality when it comes to acknowledging large gender pay gaps, how women rampantly indulge in unpaid labour, or how public spaces are visibly gendered (there is a near absence of women on the streets of Delhi after a particular time).

Conclusion - This is not to say that the government’s proposal will automatically lead to safer environments for women. It must be supplemented with efforts towards greater


capacity building, increased frequency of metros and buses, provision of all-women’s coaches and buses, street lighting, stepping up last-mile connectivity, deployment of women guards, and so on. And most important is the need for radical attitudinal shifts.

Topic : - Welfare schemes for vulnerable sections of the population Saving childhoods


Context - Steps India could take to eliminate child labour Background - On World Day Against Child Labour (June 12) in 2017, India ratified two core conventions of the International Labour Organization on child labour. It now has to double its efforts to ensure that the benefit of those conventions reach the most vulnerable children.

Although comprehensive data on child labour are not available for India, as per the 2011 Census, in the age group 5-14 years, 10.1 million constituted working children. Even though there was a decline in the number of working children to 3.9% in 2011 from 5% in 2001, the decline rate is grossly insufficient to meet target 8.7 of the UN Sustainable Development Goals (SDGs), which is to end child labour in all forms by 2025. India therefore needs to embark on new and innovative approaches in its fight against child labour. The ratification of the core conventions on child labour gives rise to a range of priorities such as strengthening policy and legislative enforcement, and building the capacities of government, workers’ and employers’ organisations as well as other partners at national, State and community levels.

It is worthy of mention that India had taken important steps to eliminate child labour even before ratifying these conventions. In addition, there are a few more important steps that the country can take in this direction. These are

1. India should invest in enhancing its body of knowledge on child labour, emphasising quantitative information. While there are many common factors across the spectrum, each sector and each demographical segment will have its own set of factors and drivers that push children into the labour market. These have to be addressed. Such factors and drivers can only be identified and

analysed through proper research, surveys and assessments.

2. Eliminating child labour is firmly placed within Goal 8 of the SDGs. A stronger nexus between the discourse on SDGs and the discourse on eliminating child labour can take the advantage of complementarities and synergies of a wide range of actors engaged in both areas of work.

3. The growing interest of the private sector is a great opportunity that has to be further utilised, particularly to leverage key influencers in domestic and multinational supply chains. It is also a matter of competitive advantage for multi-nationals to ensure that child labour is effectively eliminated in their supply chains. A sector-wide culture of child labour-free businesses has to be nurtured.

Conclusion As the world of work is transforming and new actors are emerging, one cannot underestimate the importance of creating a sound and vibrant platform to bring together these actors. The fight against child labour is not just the responsibility of one, it is the responsibility of all.

Prelims • India ratified ILO Conventions, 138 and 182, which

says that the minimum age for employment should not be less than the age of completion of compulsory schooling (14 years of age in India's case) and calls for elimination of the worst forms of child labour, respectively.

• With ratification of these two core ILO conventions, India has ratified 6 out of 8 core ILO conventions, with the other 4 core ILO conventions relating to abolition of forced labour, equal remuneration and no discrimination between men and women in employment and occupation, thus reaffirming its commitment for promoting and realising fundamental principles and right at work.

Other steps taken to eliminate child labour

• A landmark step in the endeavour to have a child labour free society was the enactment of the Child labour (Prohibition and Prevention) amendment Act, 2016 in August 2016 that provides for complete prohibition on employment of children below 14 years in all occupations and processes and prohibits employment of adolescents (14-18 years) in hazardous occupations and processes. The age of admission to employment has been


linked to the age of compulsory education under Right to Education Act (RTE), 2009.

• providing a digital platform ‘PENCIL’ which has components ensuring enforcement of the Act, mechanism for redressal of complaints, child tracking system and a monitoring mechanism.

Topic: Role of women and women’s organization Squandering the gender dividend

GS Paper 1 Source: - the Hindu

Context -It is a national tragedy that women unable to find work are dropping out of the labour force Background - rural India is in the midst of a gender revolution in which nearly half the women who were in the workforce in 2004-5 had dropped out in 2017-18. The 61st round of the National Sample Survey Office (NSSO) recorded 48.5% rural women above the age of 15 as being employed either as their major activity or as their subsidiary activity — but this number dropped to 23.7% in the recently released report of the Periodic Labour Force Survey (PLFS).

Incremental decline

Men were able to pick up work in other industries whereas women reduced their participation in other industries as well as agriculture — resulting in a lower WPR. Therein lies the conundrum for rural women.

Reasons

1. Mechanisation and land fragmentation have reduced agricultural work opportunities for both men and women. Other work opportunities, except for work in public works programmes, are not easily open to women.

2. This challenge is particularly severe for rural women with moderate levels of education. A man with class 10 education can be a postal carrier, a truck driver or a mechanic; these opportunities are not open to women. Hence, it is not surprising that education is associated with a lower WPR for women.

3. Another clue to the decline in women’s work opportunities rather than women’s desire to work is reflected in the fact that women who are counted as being out of labour force are not simply content to be homemakers but often engage in whatever economic activities they find.

4. Women’s work and family responsibilities rarely fit in neat compartments but household

responsibilities do not prevent women from working. Many rural women raise chickens as well as children; husk paddy for sale while daal simmers; and sell vegetables in a market while caring for babies.

Flaw in survey

The NSSO and PLFS survey design relies on two questions. First, interviewers assess the primary activity in which respondents spent a majority of their prior year. Then they note down the subsidiary activity in which individuals spent at least 30 days. If individuals are defined as working by either primary or subsidiary criteria, they are counted among workers. A woman who spends 15 days on her own field during the sowing period, 10 days as a construction labourer and 15 days in MGNREGA work should be counted as a worker using the subsidiary status criteria, but since none of the activities exceed the 30 days threshold, it is quite possible that interviewers do not mark her as being employed. On-going experimental research at the National Council of Applied Economic Research’s National Data Innovation Centre (NCAER-NDIC) suggests a tremendous undercount of women’s work using standard labour force questions, particularly in rural areas.

Possible solutions

• Establishment of the Cabinet Committee on Employment and Skill Development is a welcome move by the new government. It is to be hoped that this committee will take the issue of declining female employment as seriously as it does the issue of rising unemployment among the youth.

• Not all policies need to be gender focussed. One of the most powerful ways in which public policies affect rural women’s participation in non-agricultural work is via development of transportation infrastructure that allows rural women to seek work as sales clerks, nurses and factory workers in nearby towns.

Conclusion

If the cabinet committee were to focus on multi-sectoral reforms that have a positive impact on women’s work opportunities, the potential gender dividend could be far greater than the much-celebrated demographic dividend.


Topic: India and its neighbourhood- relations The importance of being neighbourly

Source-the Hindu

GS Paper 2 Source: The Hindu Context -India is subtly adding four new elements in the policy matrix Background -The Modi government has acted swiftly to pursue its foreign policy priorities. Focused on strengthening India’s place in the world, it has begun by shoring up the country’s position in the immediate neighbourhood.

Ties with South Asian neighbours were a priority even earlier, as seen in the invitation extended to SAARC leaders to attend Mr. Modi’s swearing-in ceremony in 2014. After that there were some difficulties. India’s relations with Pakistan soured, while China continued to expand its footprint in Nepal, the Maldives, Sri Lanka and Pakistan. However, India’s cooperation with Bangladesh, Bhutan, Afghanistan and Myanmar showed tangible progress. As a result, attention was consciously shifted from SAARC to BIMSTEC, thereby giving an eastward shift to India’s neighbourhood policy

Policy essence

New Delhi has clearly indicated that the neighbourhood will continue to be a priority, but four subtle elements are being introduced in the policy matrix. 1. First, without always insisting on reciprocity,

India may get into a proactive mode and adopt measures “to incentivise cooperation in the neighbourhood”, as Mr. Jaishankar put it.

2. Second, India will prefer to work on quick impact projects that bring socio-economic benefits to the people.

3. Third, recognising its limited capabilities, New Delhi would have no objection in forging a trilateral development partnership, involving India and Japan in a neighbouring country.

4. Fourth, SAARC’s drawbacks have caused India’s conscious shift to BIMSTEC. India sees a mix of energy, mindset and possibility in the latter grouping.

Conclusion - The government is moving in the right direction. It could also consider bringing the Maldives into BIMSTEC, at least as an observer.

Defence Space Research Agency (DSRO)

Background - In March, India had carried out the Anti Satellite Test (ASAT) which demonstrated its

capability to shoot down satellites and joined an elite club of four nations with similar capability. The test also helped the country develop deterrence capability against adversaries who may want to attack Indian satellites to cripple systems in times of war.

• To enhance the capabilities of the armed forces to fight wars in space, the government has approved the setting up of a new agency which will develop sophisticated weapon systems and technologies.

• The agency would be provided with a team of scientists which would be working in close coordination with the tri-services integrated Defence staff officers.

• It would be providing the research and development support to the Defence Space Agency (DSA) which comprises members of the three services. The DSA has been created “to help the country fight wars in the space”.

• The Defence Space Agency is being set up in Bengaluru under an Air Vice Marshal-rank officer and will gradually take over the space-related capabilities of the three forces.

Topic: Issues relating to development and management of Social Sector or Services relating to Health, Education, Human Resources.

GS Paper 2 Starting at three Source: - the Hindu

Context - Extending the right to education to younger children would be a welcome step Introduction - India’s far-sighted Right to Education Act is making slow progress in mainstreaming equity, in the absence of a strong political commitment in several States. The proposal to extend its scope to younger children through early childhood education is, however, wholly positive. The move suggested in the draft National Education Policy to put children three years and older in a stimulating nursery environment is a welcome logical measure.

Why this step is important

The pedagogical view is that the pre-school phase is crucial to stimulate a child’s curiosity and help her prepare for schooling at age six. The NEP proposal to infuse the existing child development schemes, which are primarily nutrition-oriented, with a learning component is in line with this thinking on holistic development.


Challenges 1. An extension of the RTE would be a big step

forward, but in the absence of measures that will deepen equity, the law cannot be transformative.

2. The Centre has to guarantee that in its totality, the Right to Education will encompass all schools bar those catering to minorities. This is necessary to achieve its moral goal of bringing quality schooling to all in the 6-14 age group; adding the early childhood section, now under the Ministry of Women and Child Development, will then be meaningful.

3. Giving all children aged three and above the right to an education can become a reality only if the state is willing to live up to its promise of devoting more financial resources. An expenditure of 6% of GDP on education could have transformed the sector, given the large wealth generated since economic liberalisation.

4. But far less is spent — for instance, 2.7% in 2017-18. The lost years have cost millions a brighter future, but the draft NEP provides an opportunity to make amends. Bringing more children into the formal stream needs a well-thought-out road map.

5. The Centre has to play a leadership role to ensure that States, some of which have done a poor job of implementing the RTE Act, are persuaded to implement urgent reform.

6. The NEP’s proposal to have well-designed school complexes, where pre-primary to secondary classes will be available, is in itself an ambitious goal that will require mission-mode implementation.

7. Shortcomings in anganwadi centres must be addressed in the expansion plan.

8. State governments will have to fill teacher vacancies and ensure that the training of recruits is aligned to scientific, child-oriented teaching methods.

Conclusion

Education reform is vital to prepare for a future in which cutting-edge skills will be necessary for continued economic progress. Changes to the RTE Act that will prepare all children for a more productive schooling phase can help make India’s educational system morally fair and more egalitarian.

Topic: Bureaucracy reboot GS Paper 2

Source: the Indian express

Background - After selection of nine lateral entrants as joint secretaries in various ministries/departments on contract basis, the Narendra Modi government plans to extend such induction of private sector domain experts to the lower-level deputy secretary and director posts as well. Context - A liberalised economy requires not generalists, but people who understand industrial processes and new technologies, taxation, finance, trade and investment in a dynamic, globalised setting.

Arguments in favour of lateral entry-

1. The current administrative system, wherein top positions are manned by career bureaucrats having little specialised knowledge and recruited through a common civil services examination, has clearly outlived its utility.

2. A liberalised economy requires not generalists, but people who understand industrial processes and new technologies, taxation, finance, trade and investment in a dynamic, globalised setting.

3. Even the old “steel frame” model of governance needs revisiting in favour of more nimble, entrepreneurial public service organisations focusing on performance and delivery by incorporating private sector management practices.

4. The right approach today would be to fill top/senior government positions by selecting subject matter specialists and posting them in departments for which they are best-suited.

5. Alternatively, the “generalists” can be forced to turn “specialists” through mid-career professional development programmes or extended tenures in particular departments/fields.

6. It also fits into the “minimum government, maximum governance” promise on which Prime Minister Modi first rode to power in 2014. There can be no better means to achieving that goal than by deepening expertise and expanding the scope of lateral appointments in government.

Arguments against lateral entry

1. Joint secretaries in the government are not merely performing jobs which can be filled by seeking applications. Officers at this level are expected to present well-researched and sourced information in a manner that the political executive can


understand, weigh and consider options before making equitable and effective policy choices.

2. Once an in-house bureaucratic process is set in motion, it will become a precedent for all time and may be well be cited and manipulated by future governments at the Centre and the states to plant people regardless of their worth. In the past few years different state governments have inducted and promoted “committed” (malleable) officers as a reward for favours done.

3. Others have entrusted policy-making to people with no knowledge of fiscal prudence or administrative propriety- leave aside the finer nuances of the Constitution or the law, to steer the ship of State.

4. Once the Centre opens the doors to lateral induction through its own machinery, it can lead to a deluge of inductions in the states and at the Centre too in times to come.

5. Entrusting the job of selection to a body supervised by the Union Public Service Commission would be the only alternative to ensure that merit is the sole criteria and no scope exists for preferential induction on grounds of region, community or ideological allegiance.

6. Comparisons with other countries may be relevant in theory but is not so in practice. One has to bear in mind the difference between a career-based system -- India, France, Italy, Japan, Korea and Spain are examples thereof -and position- based systems which function in countries like Australia, New Zealand, Britain and in the US. In the career-based system the advantage is a commonality of a working culture and effective networks which facilitate speed of communication and understanding.

7. A position-based system is firstly political in nature and often transitory. It cannot be merged into a career based system without taking care to imbue the induction system itself with the highest degree of transparency and independence.

Conclusion

First inductions through the competitive examinations must expand incrementally in keeping with the country’s needs. Second, only UPSC has the mandate to make recruitment to civil service jobs under the Constitution and the civil service statutes. Looking outside the UPSC will destroy the tenets of parliamentary democracy, which is inescapably linked to placing reliance on a merit based, politically neutral civil service.

Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

GS Paper 2 Explained: What SCO summit means for India’s global and regional interests Source: -the Indian express Background

Since its formation, the SCO has focused on regional non-traditional security, with counter-terrorism as a priority: The fight against the “three evils” of terrorism, separatism and extremism has become its mantra.

What kind of a grouping is the SCO? After the collapse of the Soviet Union in 1991, the then security and economic architecture in the Eurasian region dissolved and new structures had to come up. The original Shanghai Five were China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. The SCO was formed in 2001, with Uzbekistan included. It expanded in 2017 to include India and Pakistan. Since its formation, the SCO has focused on regional non-traditional security, with counter-terrorism as a priority: The fight against the “three evils” of terrorism, separatism and extremism has become its mantra. Today, areas of cooperation include themes such as economics and culture. Under what circumstances did India enter the SCO? While Central Asian countries and China were not in favour of expansion initially, the main supporter — of India’s entry in particular — was Russia. A widely held view is that Russia’s growing unease about an increasingly powerful China prompted it to push for its expansion.

How does membership of the SCO help India?

1. For India, two important objectives are counter-terrorism and connectivity. These sit well with the SCO’s main objective of working cooperatively against the “three evils”. India wants access to intelligence and information from SCO’s counter-terrorism body, the Tashkent-based Regional Anti Terror Structure (RATS). A stable Afghanistan too is in India’s interest, and RATS provides access to non-Pakistan-centred counter-terrorism information there.

2. Connectivity is important for India’s Connect Central Asia policy. Energy cooperation dominates its interest – and it’s in China’s neighbourhood.

3. SCO membership also bolsters India’s status as a major pan-Asian player, which is boxed in the South Asian paradigm.


4. The US’ power struggle with China, exit from the Iran nuclear deal JCPOA (affects India’s oil imports from Iran), and adversarial attitude towards Russia (affects India’s defence purchase like S-400) have forced India to choose sides.

5. In the SCO, India’s sitting down with less-than-free regimes, Russia and China has always had the West worried. India, however, has always been tactful in not aligning with these countries on governance issues. What draws India to SCO is the “Shanghai spirit”, which emphasises harmony, non-interference in others’ internal affairs, and non-alignment. The bottomline is that it helps India keep all options open in terms of international partnerships.

How does it play out in the India-Pakistan or India-China relationship?

In the absence of the SAARC summit, the SCO summit gives an opportunity for Indian and Pakistani leaders to meet informally, on the sidelines. Both sides have the obligation not to bring in bilateral disputes, but can cooperate on issues of mutual interest and importance.

DRDO tests tech demonstrator

The Defence Research and Development Organisation (DRDO) on Wednesday conducted the test of an indigenously developed Hypersonic Technology Demonstrator Vehicle (HSTDV) along with several critical technologies. Under this project, DRDO is developing a hypersonic vehicle that will be powered by a scram-jet engine. This is dual-use technology, which when developed, will have multiple civilian applications. It can be used for launching satellites at low cost. It will also be available for long-range cruise missiles of the future. In scram-jet technology, fuel combustion takes place in a chamber in the missile at supersonic speeds.

Topic: Concepts Awareness in the field of Space


Nearly 70% of the propellant (fuel-oxidiser combination) carried by today’s launch vehicles consists of oxidiser. Therefore, the next generation launch vehicles must use a propulsion system which can utilise the atmospheric oxygen during their flight through the atmosphere which will considerably reduce the total propellant required to place a satellite in orbit.

Also, if those vehicles are made re-usable, the cost of launching satellites will further come down significantly. Thus, the future re-usable launch vehicle concept along with air-breathing propulsion is an exciting candidate offering routine access to space at far lower cost. Considering the strategic nature of air-breathing technology which has the potential to bring a significant shift in the launch vehicle design, worldwide efforts are on to develop the technology for air breathing engines. Ramjet, Scramjet and Dual Mode Ramjet (DMRJ) are the three concepts of air-breathing engines which are being developed by various space agencies.

A ramjet is a form of air-breathing jet engine that uses the vehicle’s forward motion to compress incoming air for combustion without a rotating compressor. Fuel is injected in the combustion chamber where it mixes with the hot compressed air and ignites. A ramjet-powered vehicle requires an assisted take-off like a rocket assist to accelerate it to a speed where it begins to produce thrust.

Ramjets work most efficiently at supersonic speeds around Mach 3 (three times the speed of sound) and can operate up to speeds of Mach 6. However, the ramjet efficiency starts to drop when the vehicle reaches hypersonic speeds A scramjet engine is an improvement over the ramjet engine as it efficiently operates at hypersonic speeds and allows supersonic combustion. Thus, it is known as Supersonic Combustion Ramjet, or Scramjet.

A dual mode ramjet (DMRJ) is a type of jet engine where a ramjet transforms into scramjet over Mach 4-8 range, which means it can efficiently operate both in subsonic and supersonic combustor modes.


Topic: Awareness in space technology Dark side of the Moon: Chandrayaan-2 mission will enter uncharted territory, offer great scientific insight.

GS Paper 3 Source - Indian express The Chandrayaan-2 mission has taken a long way coming, considering that its predecessor, Chandrayaan-1, an Orbiter mission, had been sent way back in 2008. Chandrayaan-2 will make a landing at a site where no earlier mission has gone, near the South pole of the moon. The Chandrayaan-2 mission has taken a long way coming, considering that its predecessor, Chandrayaan-1, an Orbiter mission, had been sent way back in 2008.

Why so late?

According to the original schedule, Chandrayaan-2 was to be launched in 2012 itself, but at that time it was supposed to be a collaborative mission with the Russian space agency, Roskosmos, which was to provide the lander module. The Russians, however, withdrew from the missions after their similarly-designed lander for another mission developed problems in 2011. That left ISRO to design, develop and build the lander on its own, something it has not done earlier, which has led to considerable delay from the original schedule.

A sequel to Chandrayaan-1

The Chandrayaan-1 mission, which was launched in October 2008, was ISRO’s first exploratory mission to the moon, in fact to any heavenly body in the space. That mission was designed to just orbit around the moon and make observations with the help of the instruments on board. The closest that Chandrayaan-1

spacecraft came to the moon was in an orbit 100 km from its surface. ISRO claims that while on its way, MIP had sent data that showed evidence for the presence of water on the moon. Unfortunately, those findings could not be published because of anomalies in calibration of the data. The confirmation for water had come through another onboard instrument, the M3 or Moon Mineralogy Mapper, that had been put by NASA.

Chandrayaan-2

India’s first lander mission • Chandrayaan-2 consists of an Orbiter, Lander and

Rover, all equipped with scientific instruments to study the moon. The Orbiter would once again watch the moon from a 100-km orbit, while the Lander and Rover modules will separate and make a soft-landing on moon’s surface. ISRO has named the Lander module as Vikram, after Vikram Sarabhai, the pioneer of India’s space programme, and the Rover module as Pragyaan, meaning wisdom.

• Once on the moon, the rover, a six-wheeled solar-powered vehicle, will detach itself from the lander, and would slowly crawl on the surface, making observations and collecting data. It will be equipped with two instruments, and its primary objective would be to study the composition of the moon’s surface near the landing site, and determine its abundance of different elements.

• The 1471-kg lander, which will remain stationary after touching down, will carry three instruments that will mainly study the moon’s atmosphere. One of the instruments will also look out for seismic activity on lunar surface.

• While the lander and rover are designed to work for only 14 days (1 lunar day), the Orbiter, a 2379-kg spacecraft with seven instruments on board, would remain in orbit for a year. It is equipped with different kinds of cameras to take high-resolution three-dimensional maps of the surface. It also has instruments to study the mineral composition on the moon and the lunar atmosphere, and also to assess the abundance of water.

• Chandrayaan-2 to enter uncharted territory - With Chandrayaan-2, India will become only the fourth country in the world to land a spacecraft on the moon. So far, all landings, human as well as non-human, on the moon have been in areas close to its equator. That was mainly because this area receives more sunlight that is required by the solar-powered instruments to function.


• Earlier this year, in January, China landed a lander and rover on the far side of the moon, the side that is not facing the earth. This was the first time that any landing had taken place on that side. The Chinese mission, Chang’e 4, was designed to function for three lunar days (three periods of two-weeks on Earth, interspersed with similar two-week periods which is lunar night), but has outlived its mission life and entered its fifth lunar night.

• Chandrayaan-2 will make a landing at a site where no earlier mission has gone, near the South pole of the moon. It is a completely unexplored territory and therefore offers great scientific opportunity for the mission to see and discover something new.

• The south pole of the moon holds the possibility of the presence of water, and this is one aspect that would be probed meticulously by Chandrayaan-2.

• In addition, this area is also supposed to have ancient rocks and craters that can offer indications of history of moon, and also contain clues to the fossil records of early solar system.

Conclusion India has announced that it will launch its first human space mission, Gaganyaan, before the year 2022. A human mission to the moon could be the next logical step forward, though no one is talking about it as yet. A successful Chandrayaan-2 and Gaganyaan would, however, no doubt set the stage for the human mission to the moon.

Topic: Conservation, environmental pollution and degradation

GS Paper 3 BS – VI norms Source: PIB

Why in news? International Centre for Automotive Technology (ICAT) has released India’s first Type Approval Certificate (TAC) for Bharat Stage – VI (BS – VI) norms for the two wheeler segment.

• Last year, ICAT issued the approval for BS –VI norms to M/s Volvo Eicher Commercial Vehicles for the Heavy Commercial Vehicle segment which was also the first in its segment in India.

Background:

Bharat Stage norms are the automotive emission norms which the automotive manufacturers have to comply to sell their vehicles in India. These norms are

applicable to all two wheelers, three wheelers, four wheelers and construction equipment vehicles. To curb growing menace of air pollution through the vehicles emission, the Government of India has decided to leapfrog from the exiting BS – IV norms to the BS- VI, thereby skipping the BS – V norms, and to implement the BS – VI norms with effect from 1st April 2020. Only those vehicles will be sold and registered in India from 1st April 2020 onwards, which comply to these norms. The norms are stringent and at par with global standards.

Difference between BS-IV and the new BS-VI:

The major difference in standards between the existing BS-IV and the new BS-VI auto fuel norms is the presence of sulphur. BS-VI fuel is estimated to reduce the amount of sulphur released by 80%, from 50 parts per million to 10 ppm. The emission of NOx (nitrogen oxides) from diesel cars is also expected to reduce by nearly 70% and 25% from cars with petrol engines.

About ICAT:

International Centre for Automotive Technology (ICAT) is the premier testing and certification agency authorized by Ministry of Road Transport and Highways for providing testing and certification services to the vehicle and component manufacturers in India and abroad. It has the latest equipment, facilities and capabilities to develop, validate, test and certify the engines and vehicles for the latest norms in the field of emission and many other facilities like crash lab, NVH lab, EMC lab and test tracks.

Topic: Conservation ‘Paddy Frog’

GS Paper 3 Source: Indian Express

Why in news?

A team of scientists from Delhi University (DU) and Wildlife Institute of India (an autonomous institution under Union Ministry of Environment Forest and Climate change), in collaboration with researchers from the United States and Indonesia, have discovered a new species of ‘Paddy Frog’ from Northeast India, primarily in Assam.

Key points:

• The newly discovered species has been named Aishani, which is derived from Sanskrit word ‘aishani’ or aisani meaning Northeast.

• The frog belongs to genus Micryletta, (a small genus of microhylid frogs). The microhylid genus is a group of narrow-mouthed frogs that are more


commonly known as paddy frogs and are primarily and widely distributed in Southeast Asia (SEA). As of now, there are only 4 recognised species in this group and newly discovered Micryletta aishani becomes the 5th.

• This new species strikingly differs from other narrow-mouthed paddy frogs. Its characteristics includes- its back is reddish-brown in colour, on lateral sides it has prominent dark streaks and ash-grey mottling, shape of snout (nose and mouth) is unique, and web on its feet is absent.

• It is likely to be more widely distributed in Northeast India, particularly Indo-Burma biodiversity hotspot region.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

GS Paper 3 RBI issues revised norms to deal with stressed assets

Sources: The Hindu, Livemint

Why in news?

The Reserve Bank of India (RBI) has issued a new prudential framework for resolution of stressed assets, effectively replacing its controversial 12 February 2018 circular with a mixed bag of norms applying to a wider class of lenders.

• Earlier norms, struck down by the Supreme Court as too general in nature, stipulated that even a one-day default must be reported and acted upon.

Highlights of the latest norms:

It gives lenders (scheduled commercial banks, all-India financial institutions and small finance

banks) 30 days to review the borrower account on default.

During this review period of 30 days, lenders may decide on the resolution strategy, including the nature of the RP and the approach for its implementation. Lenders may also choose to initiate legal proceedings for insolvency or recovery. While the defunct circular was applicable only to Scheduled Commercial Banks (excluding Regional Rural Banks) and all-India financial institutions, the new circular is also applicable to small finance banks and systemically important non-deposit taking non-banking financial companies (NBFCs) and deposit-taking NBFCs. In cases where the RP is to be implemented, all lenders have to enter into an inter-creditor agreement (ICA). Under the ICA, any decision agreed to by the lenders representing 75 per cent of total outstanding credit facilities by value and 60 per cent by number will be binding upon all the lenders. In particular, the RPs will provide for payment which will not be less than the liquidation value due to the dissenting lenders. In cases where the aggregate exposure of a borrower to lenders (scheduled commercial banks, all-India financial institutions and small finance banks) is ₹2,000 crore and above, the RP has to be implemented within 180 days from the end of the review period, and the reference date has been set as June 7, 2019.

• In the case of borrowers in the ₹1,500 crore and above but less than ₹2,000 crore category, January 1, 2020 has been set as the reference date for implementing the RP. In the less than ₹1,500 crore category, the RBI will announce the reference date in due course.

What if Resolution Plan is delayed?

• There is a disincentive for banks if they delay implementing a viable resolution plan.

• In case the plan is not implemented within 180 days from the end of review period, banks have to make additional provision of 20% and another 15% if the plan is not implemented within 365 days from the start of the review period.

• The additional provisions would be reversed if resolution is pursued under Insolvency and Bankruptcy Code (IBC).


Inter-Creditor Agreement (ICA): • The inter-creditor agreement is aimed at the

resolution of loan accounts with a size of ₹50 crore and above that are under the control of a group of lenders.

• It is part of the “Sashakt” plan approved by the government to address the problem of resolving bad loans.

• The agreement is based on a recommendation by the Sunil Mehta committee that looked into resolution of stressed assets.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

GS Paper 3: RBI Panel on Economic Capital Framework

Source: Business Standard

Why in news? The Reserve Bank of India (RBI)-appointed committee to review the economic capital framework of the central bank has failed to arrive at a consensus during a recently held meeting leading to a delay in finalising its report.

• The main difference of opinion has arisen between the panel members and the government’s representative on the panel over the transfer of the RBI’s ‘excess’ capital reserves.

• While most panel members were in favour of a phased transfer of the RBI’s capital reserves to the government over the years, the government’s view is for a one-time transfer.

Background:

RBI had constituted a panel on economic capital framework. It was headed by Ex-RBI governor Bimal Jalan. The committee, formed in December 2018, was supposed to submit its report by April 8, 2019, but it was later given a three-month extension. One of the key mandates of the committee was to determine the level of surplus that the RBI should hol

About economic capital framework:

Economic capital framework refers to the risk capital required by the central bank while taking into account different risks. The economic capital framework reflects the capital that an institution requires or needs to hold as a counter against unforeseen risks or events or losses in the future.

Arrangement between the government and RBI on the transfer of surplus or profits:

• Although RBI was promoted as a private shareholders’ bank in 1935 with a paid up capital of Rs 5 crore, the government nationalised RBI in January 1949, making the sovereign its “owner”. What the central bank does, therefore, is transfer the “surplus” — that is, the excess of income over expenditure — to the government, in accordance with Section 47 (Allocation of Surplus Profits) of the Reserve Bank of India Act, 1934.

• Usually, the RBI, which follows a July-June calendar, transfers dividend to the central government after closing its accounts in August. While transferring the dividend, the central bank keeps a share of surplus towards various risks and

• reserves every year, according to its economic capital framework.

Government's view:

• The government believes that RBI is sitting on much higher reserves than it actually needs to tide over financial emergencies that India may face. The government has been insisting that the central bank hand over its surplus reserves amid a shortfall in revenue collections. Access to the funds will allow the government to meet deficit targets, infuse capital into weak banks to boost lending and fund welfare programmes.

• Some central banks around the world (like US and UK) keep 13% to 14% of their assets as a reserve compared to RBI’s 27% and some (like Russia) more than that.

• Economists in the past have argued for RBI releasing ‘excess’ capital that can be put to productive use by the government. The Malegam Committee estimated the excess (in 2013) at Rs 1.49 lakh crore.

RBI's view:

• The RBI has maintained the view that it needs to have a stronger balance sheet to deal with a possible crisis and external shocks.

• The RBI needs adequate capital reserves for monetary policy operations, currency


fluctuations, possible fall in value of bonds, sterilisation costs related to open-market operations, credit risks arising from the lender of last resort function and other risks from unexpected increase in its expenditure

Defence Space Research Agency (DSRA)

The Cabinet Committee on Security (CCS) headed by Prime Minister has cleared the setting up of the Defence Space Research Agency (DSRA).

About DSRA:

• DSRA has been entrusted with the task of creating space warfare weapon systems and technologies.

• The agency would be provided with a team of scientists which would be working in close coordination with tri-services (Indian Army, Navy and Air Force) Integrated Defence Staff (IDS) officers. The IDS was set up in October 2001 under Ministry of Defence in aftermath of ‘Operation Vijay’ (Kargil Operations) as an organisation that will be responsible for fostering coordination and enabling prioritisation across all branches of Indian Armed Forces.

• It would be providing the research and development support to the Defence Space Agency (DSA) which comprises members of the three services. The DSA has been created “to help the country fight wars in the space”. The Defence Space Agency is being set up in Bengaluru under an Air Vice Marshal-rank officer and will gradually take over the space-related capabilities of the three forces.

El Salvador recognises forests as living entities:

• El Salvador has, in a historic move, recognised forests as living entities. Its citizens, will now be required to preserve forests.

• El Salvador has lost about 85 per cent of its native forests since the 1960s, while Earth has lost about 80 per cent of its native forests.

Mount Sinabung

• Mount Sinabung volcano recently erupted. • It is located in Sumatra Island, western

Indonesia. • It had erupted in 2010 for the first time in past

400 years. • Indonesia sit along the Ring of Fire region, an

area where most of the world’s volcanic eruptions occur. The Ring of Fire has seen a large amount of activity in recent days, but

Indonesia has been hit hard due to its position on a large grid of tectonic plates.

SPICE 2000 guided bombs

Indian Air Force (IAF) has signed a deal with Israel’s Rafael Advanced Defense Systems, an Israeli defence firm to procure a batch of SPICE 2000 guided bombs.

• The SPICE stands for Smart, Precise Impact and Cost-Effective. It is guidance and maneuvering kit manufactured by Israel’s Rafael Advanced Defense Systems.

• SPICE can overcome errors in locating target, GPS jamming and also reduces collateral damage.

Topic: Awareness in space India to have its own space station: ISRO


What's the news?

India plans to have its own space station, and modalities for it will be worked out after the first manned mission, Gaganyaan, scheduled for August 2022.

About the Indian Space Station:

• The proposed space station is envisaged to weigh 20 tonnes and serve as a facility where astronauts can stay for 15-20 days.

• It would be placed in an orbit 400 km above earth.

• The time frame for launch is 5-7 years after Gaganyaan.

• The proposed Indian space station would be similar to the International Space Station (ISS) but smaller in size. While ISS weighs 420 tonnes, Indian station is expected to have a payload of 20 tonnes.

Need:

• Space station is needed for conducting microgravity experiments. Since 2000, astronauts have periodically visited the ISS to carry out close to 300 different microgravity science experiments in diverse fields such as astrobiology, astronomy, materials science, space medicine and space weather.

• ISRO would be undertaking many prolonged space exploration projects and sending many astronauts into space. Therefore, it would require a permanent station for itself.

• ISRO needs this facility in the context of its various space missions.


• NASA’s International Space Station, the only one functional right now, is slated to retire by 2025.

Some facts:

• ISS is the ninth space station to be inhabited by crews, following the Soviet and later Russian Salyut, Almaz, and Mir stations as well as Skylab from the US.

• The ISS programme is a joint project among five participating space agencies: NASA (US),

Roscosmos (Russia), JAXA (Japan), ESA (EU), and CSA (Canada).

• The ownership and use of the space station is established by intergovernmental treaties and agreements. The station is divided into two sections, the Russian Orbital Segment (ROS) and the United States Orbital Segment (USOS), which is shared by many nations.

Topic: Science & technology developments

GS Paper 3 Hypersonic Technology Demonstrator Vehicle (HSTDV)

Source: The Hindu

Why in news?

DRDO recently conducted a successful first test flight of the indigenously developed Hypersonic Technology Demonstrator Vehicle (HSTDV) from a base off the Odisha coast.

• The only other countries that possess this • technology are the US, Russia and China.

About HSTDV:

• The HSTDV is an unmanned scramjet (allowing supersonic combustion) demonstration vehicle that can cruise up to a speed of mach 6 (or six times the speed of sound) and rise up to an altitude of 32. km in 20 seconds.

• Uses: This is dual-use technology, which when developed, will have multiple civilian applications. It can be used for launching satellites at low cost. It will also be available for long-range cruise missiles of the future.

Difference between Scramjet and Ramjet technologies: In scramjet ('supersonic combustion’ ramjet) technology, combustion of fuel takes place in a chamber in the missile at supersonic speeds. This is different from a ram jet system where the system collects the air it needs from the atmosphere during the flight at subsonic speeds and the propellants burn in the combustion chamber.

Topic: Awareness in space. NASA’s OSIRIS-Rex

GS Paper 3 Source: NASA

Why in news? The US space agency NASA has announced that its asteroid probe OSIRIS-REx set a new record for the


closest-ever orbit of a planetary body made by a man-made spacecraft. • The maneuver began the mission’s new phase,

known as Orbital B, and placed the spacecraft in an orbit 680 meters (2,231 feet) above the surface of asteroid Bennu. The previous record—also set by the OSIRIS-REx spacecraft—was approximately 1.3 kilometers (0.8 miles) above the surface.

About the OSIRIS-REx mission:

• OSIRIS-Rex stands for Origins, Spectral Interpretation, Resource Identification, Security-Regolith Explorer.

• The OSIRIS-REx spacecraft is on a seven-year journey to study the asteroid Bennu and return a sample from its surface to Earth. This sample of a primitive asteroid will help scientists understand the formation of the Solar System over 4.5 billion years ago. Sample collection is scheduled for summer of 2020, and the spacecraft will deliver the sample to Earth in September 2023.

• OSIRIS-REx is the third mission in NASA’s New Frontiers program, which previously sent the New Horizons spacecraft zooming by Pluto and the Juno spacecraft into orbit around Jupiter.

Why was Bennu chosen for the OSIRIS-REx mission?

• Proximity to Earth: In order for OSIRIS-REx to reach its destination in a reasonable timeframe, NASA needed to find an asteroid which had a similar orbit to Earth.

• Size: Small asteroids, those less than 200m in diameter, typically spin much faster than larger asteroids, meaning the regolith material can be ejected into space. Bennu is around 500m in diameter, so rotates slowly enough to ensure that the regolith stays on its surface.

• Composition: Bennu is a primitive asteroid, meaning it hasn’t significantly changed since the beginning of the Solar System (over 4 billion years ago). It is also very carbon-rich, meaning it may contain organic molecules, which could have been precursors to life on Earth.

• Additionally, Bennu is of interest as it is a Potentially Hazardous Asteroid (PHA). Every 6 years, Bennu’s orbit brings it within 200,000 miles of the Earth, which means it has a high probability of impacting Earth in the late 22nd Century.

Topic: Issues related to health. Acute Encephalitis Syndrome (AES)


Why in news?

Several children have died in the Muzaffarpur district of north Bihar, due to Acute Encephalitis Syndrome (AES). • AES is locally known as Chamki Bukhar in the

state.

About acute encephalitis syndrome (AES): • The World Health Organization (WHO) in 2006,

coined the term AES to signify a group of diseases which seem similar to one another but are difficult to differentiate in the chaotic environment of an outbreak.

• It is characterized as acute-onset of fever and a change in mental status (mental confusion, disorientation, delirium, or coma) and/or new-onset of seizures in a person of any age at any time of the year.

• Viruses are the main causative agents in AES cases, although other sources such as bacteria, fungus, parasites, spirochetes, chemicals, toxins and non-infectious agents have also been reported over the past few decades.

• The disease most commonly affects children and young adults and can lead to considerable morbidity and mortality.

• Japanese encephalitis virus (JEV) is the major cause of AES in India (ranging from 5%-35%).

• Nipah virus, Zika virus are also found as causative agents for AES.

The Litchi Link:

• In India, AES outbreaks in north and eastern India have been linked to children eating unripe litchi fruit on empty stomachs. Unripe fruit contain the toxins hypoglycin A and methylenecyclopropylglycine (MCPG), which cause vomiting if ingested in large quantities. Hypoglycin A is a naturally occurring amino acid found in the unripened litchi that causes severe vomiting (Jamaican vomiting sickness), while MCPG is a poisonous compound found in litchi seeds.

• While the most common causes of acute encephalitis syndrome are traced to a bacteria or a virus and it takes at least a few days before presenting serious symptoms and deaths, the toxin in litchi causes serious problems overnight.

• While well-nourished children who eat the fruit remain unaffected even if they go to bed on an


empty stomach, the under-nourished ones are at grave risk. Blood glucose falls sharply causing severe brain malfunction (encephalopathy), leading to seizures and coma, and death in many cases. This is because under-nourished children lack sufficient glucose reserve in the form of glycogen and the production of glucose from non-carbohydrate source is blocked midway leading to low blood sugar level. This causes serious brain function derangement and seizures.

• Treatment: Recovery is rapid and complete if 10% dextrose is infused within the golden hours. Infusing a higher concentration of dextrose is necessary to completely stop the attempt by the body to produce glucose from non-carbohydrate source. If encephalopathy was indeed the cause of death, this simple medical intervention could have saved many lives. Dextrose infusion could have been done even as children were being transported to hospitals in ambulances. The failures were at the stages of both prevention and care.

About Japanese encephalitis (JE) : JE is a mosquito-borne disease caused by the Japanese encephalitis virus and spread primarily by the Culex mosquito. JE is an infection of the brain. Its symptoms may include headache, vomiting, fever, confusion, and seizures. National Programme for Prevention and Control of Japanese Encephalitis/Acute Encephalitis Syndrome: Govt. of India, as part of the National Programme for Prevention & Control of JE/AES, follows a multi pronged strategy encompassing preventive (sanitation, safe drinking water, improvement in nutrition etc.), case management (capacity building of medical and para-medical staff, referral etc.) and rehabilitation (physical and social rehabilitation of disabled children), measures to address the problems relating to JE/AES.

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