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INSIGHTS CURRENT EVENTS: 27 OCTOBER 2014

Commemorative Postage Stamp on Anagarika Dharmapala

Department of Posts, Ministry of Communications & IT has brought out a Commemorating Postage Stamp on Srimath Anagarika Dharmapala, the great Buddhist thinker and visionary from Sri Lanka.

The release of the commemorative postage stamp on Anagarika Dharmapala is expected to contribute towards further strengthening the bilateral ties between India and Sri Lanka and bring the two nations closer.


Anagarika Dharmapala

He was one of the founding contributors of Sinhalese Buddhist nationalism and was also a pioneer in the revival of Buddhism in India. He not only embraced Buddhism but also lent it Sinhalese nationalist character. He waged a protracted struggle to protect and conserve the foundations of Buddhism in its place of birth, India.

He joined the Theosophical Society and spearheaded the reform and revival of Ceylonese Buddhism and it’s propagation. He later entered the order of Buddhist monks as Venerable Sri Devamitta Dharmapala and is considered a Bodhisattva in Sri Lanka. He was ordained a bhikkhu at Sarnath in 1933 and he died there in December of the same year.

In 1891, Anagarika Dharmapala went on a pilgrimage to the Mahabodhi Temple at Bodh Gaya, where the Buddha had attained enlightenment. He decided to work towards restoring it’s glory. Accordingly, the Maha Bodhi Society at Colombo was founded in 1891 and one of its primary aims was the restoration to Buddhist control of the Mahabodhi temple at Bodh Gaya.

Many people remember Anagarika Dharmapala for his religious zeal. But there was another aspect to this towering figure – his practical vision regarding the alleviation of poverty. The voice of Anagarika Dharmapala was also a significant factor in Ceylon’s historical struggle for freedom from the British Raj. He spoke of the importance of a firm educational and economic foundation if the struggle for freedom was to succeed. He also concentrated on establishing schools and hospitals in his country. He had a vision of a newly emerging Ceylon, which could effectively link up with other countries and forge ahead.

In 1893 Dharmapala was invited to attend the World Parliament of Religions in Chicago as a representative of “Southern Buddhism” – which was the term applied at that time to the Theravada. There he met Swami Vivekananda and like him, he was also a great success at the Parliament.

Sources: PIB.

India off Fragile Five list

Among emerging markets and BRICS countries, India stands out for accomplishing the sharpest turnaround in its macro economy since the U.S. Federal Reserve started reversing its zero-interest rates monetary policy. As a result, of all these economies, India is best prepared to deal with the Fed’s monetary policy actions.

The IMF had raised its 2014 India growth forecast to 5.6 per cent as against its 5.4 per cent in April projection while cutting its world Gross Domestic Product (GDP) growth projection to 3.3 per cent.

The Fed’s initiation of the tapering of its monetary policy triggered sharp volatility in the rupee and a spike in the current account deficit. The CAD is down from the level of 4.7 per cent of the GDP to 1.7 per cent of GDP. Substantial dollar inflows have led to India’s foreign exchange reserves rising from $270 billion in August to $315 billion.

Fragile five:

Fragile Five is a term coined in August of 2013 by a research analyst at Morgan Stanley to represent emerging market economies that have become too dependent on unreliable foreign investment to finance their growth ambitions.

Members of the Fragile Five are:

  • Turkey
  • Brazil
  • India
  • South Africa
  • Indonesia

The Fragile Five came into focus in 2013 and 2014 as emerging market economies that relied on foreign investments to cover current account deficits and finance growth began to see capital outflows as a result of improvements in developed economies.

Sources: The Hindu.

New law proposed for small factories

The Labour Ministry has proposed the Small Factories (Regulation of Employment and Conditions of Services) Bill to govern wages and conditions of work in small and medium enterprises (SMEs). The Bill envisages rules for wages, overtime hours, social security and appointment of factory inspectors in units employing fewer than 40 workers.

The new Bill has been proposed to align the work conditions in the SMEs with the Factories Act amendments and allow enterprises to file compliance forms online as the government announced earlier this month.

There was a demand from the SME sector for a separate Act to govern them. In line with that, this Act will reduce the number of forms required for compliance with rules. It will allow the SMEs to employ women in night shifts based on the fulfilment of certain conditions. It will change the inspection system to one based on self-certification and inspections based on computer lots as announced by the government earlier this month.

The Bill builds on the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Amendment Bill, 2011, which increases the number of laws under which units will be exempt from maintaining registers and filings returns.

The Factories Act (Amendment) Bill is for allowing the States to raise the minimum number of workers employed to 20 where power was used and 40 for others, from 10 and 20, respectively. Based on the suggestions in a June 2011 report by an expert committee under former Planning Commission member Narendra Jadhav, the Bill removes prohibitions on women working on certain machines in motion and near cotton openers and allows the State governments to make rules allowing women to work night shifts in factories upon fulfilling certain conditions. It doubled the permissible overtime hours from 50 hours in one quarter to 100 hours and from 75 hours to 125 hours in certain cases.

The Small Factories Bill will bring the SMEs, which account for over 30 per cent of industrial production, in line with the amendments to the Factories Act.


 

Sources: The Hindu.

The Insurance Laws (Amendment) Bill

The Insurance Laws (Amendment) Bill, 2008, with a view to amend the Insurance Act 1938, the General Insurance Business (Nationalisation) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999 was introduced in the Rajya Sabha on the 22nd December, 2008.

In India, insurance companies are not permitted to have foreign holding of more than 26%. This Bill raises the limit to 49% and allows entry of foreign re-insurers (companies that insure insurance companies). It also provides for permanent registration of insurance companies. It permits the holder of a life insurance policy to name the beneficiary.

These amendments in the bill are aimed at removing archaic and redundant provisions in the legislations and incorporating certain provisions to provide Insurance Regulatory Development Authority (IRDA) with flexibility to discharge its functions effectively and efficiently. The overall objective is to further deepen the reform process which is already underway in the insurance sector.

With foreign participants playing a bigger role, there will be more variety in products and more professionalism in selling these. With more competition, mis-selling will reduce. Simplifying the norms for expansion of re-insurance companies will also help penetration.

The Bill seeks to amend clause 45 to the effect that no claim can be repudiated (rejected) after three years of the policy issuance under any circumstances. With the aim to reduce the dependence on agents the Bill seeks to have more channels for distribution, in addition to the existing ones such as agents and bancassurance.

The Bill proposes to give insurance companies the freedom to collect premiums in instalments for more products. Currently, general insurance companies can collect premiums in the form of instalments only in health insurance. But if they are given the freedom to collect premiums for products like motor and fire, this will help them in product diversification and also give flexibility to customers.

To strengthen redressal of policyholders’ complaints, the Bill proposes an independent grievance redressal authority, with powers similar to a civil court. The authority should be composed of judicial and technical members. The current ombudsman scheme is held to be insufficient to tackle the large number of complaints against companies.

The Bill also stresses on technology to increase electronic issuance of policies. This will help improve claims payout. Since electronic issuance and dematerialising of policies can facilitate data sharing between companies, any cases of fraud can be detected faster.

As an added precaution to prevent mis-selling, the Bill proposes that insurance companies not pay any agent commission in excess of what is prescribed in the regulation. Currently there are cases where companies reward agents through gifts such as cars or foreign trips. In the absence of such incentives, there are less of chances that agents would try and push policies that are not suited for customers.

Other provisions in the Bill:

  • The Bill allows foreign investors to hold up to 49% of the capital in an Indian insurance company. It allows for nationalised general insurance companies to raise funds from the capital markets.
  • Companies or co-operative societies in the life or general insurance business must have a minimum equity capital of Rs 100 crore, while those in health insurance must have a minimum equity capital of Rs 50 crore.
  • An insurer cannot challenge a life insurance policy for any reason, after a period of five years.
  • Insurers who fail to meet their obligations with respect to underwriting third party motor insurance, or underwriting policies in rural and social sectors or with vulnerable sections, face a fine of Rs 25 crore.
  • The Bill provides for appeals against decisions by Insurance Regulatory and Development Authority to lie with the Securities Appellate Tribunal set up under the SEBI Act, 1992.

 

Sources: www.business-standard.com/, prsindia.org.