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Insights Daily Current Affairs, 19 October 2016

 

 


Insights Daily Current Affairs, 19 October 2016


 

Paper 2 Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

 

10th India and United States Trade Policy Forum

 

10th India-United States Trade Policy Forum (TPF) meetings are being held at New Delhi. These meetings aim to increase the bilateral interaction between the two countries and increase the momentum on resolving trade concerns.

  • Under TPF there would be technical level discussions on issues concerning with Agriculture, Services and Goods, IPR and Manufacturing.

 

Significance of TPF:

  • The TPF provides the venue for evaluating progress that has been made on trade and investment issues between the US and India at the ministerial level.
  • It is the premier bilateral forum for the discussion and resolution of trade and investment issues between the US and India.
  • It will allow the United States and India to advance on-going bilateral efforts to expand trade and investment through forward-looking policy initiatives that can benefit our manufacturers, workers, innovators, service providers, farmers, and ranchers.
  • Discussions in the TPF are generally organized around key issue areas, including intellectual property, opening investment in manufacturing, agriculture, and services.

 

Background:

The bilateral commercial ties between the United States and India are growing stronger as reflected by increased bilateral trade in Goods and Services of $109 billion and highest ever FDI inflows in 2015-16. The bilateral cooperation under TPF has resulted in resolving several market access issues and cooperation in services, manufacturing and IPR. India is looking forward to maintain the momentum further in the current TPF.

Sources: pib.


 

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

 

Small finance banks up the ante to grab deposits

 

Small finance banks are adopting an aggressive strategy to garner savings deposits by offering interest rates higher than that offered by full-service banks.

  • While most full-service banks offer 4% on savings bank deposits, small finance banks are offering or planning to offer between 5 and 7% on such deposits.

 

Background:

In 2015, Reserve Bank of India (RBI) gave in-principle approval to 10 entities for starting small finance bank operations. Most players that have received in-principle approvals are micro-finance institutions.

 

What are small banks?

The small finance bank will primarily undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

 

What they can do:

  • Take small deposits and disburse loans.
  • Distribute mutual funds, insurance products and other simple third-party financial products.
  • Lend 75% of their total adjusted net bank credit to priority sector.
  • Maximum loan size would be 10% of capital funds to single borrower, 15% to a group.
  • Minimum 50% of loans should be up to 25 lakhs.

 

What they cannot do:

  • Lend to big corporates and groups.
  • Cannot open branches with prior RBI approval for first five years.
  • Other financial activities of the promoter must not mingle with the bank.
  • It cannot set up subsidiaries to undertake non-banking financial services activities.
  • Cannot be a business correspondent of any bank.

 

The guidelines they need to follow:

  • Promoter must contribute minimum 40% equity capital and should be brought down to 30% in 10 years.
  • Minimum paid-up capital would be Rs 100 cr.
  • Capital adequacy ratio should be 15% of risk weighted assets, Tier-I should be 7.5%.
  • Foreign shareholding capped at 74% of paid capital, FPIs cannot hold more than 24%.
  • Priority sector lending requirement of 75% of total adjusted net bank credit.
  • 50% of loans must be up to Rs 25 lakh.

Sources: the hindu.


 

Paper 2 Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

 

Centre’s regional connectivity proposal may face turbulence

 

The government’s plans to boost regional air connectivity could hit a legal air pocket as leading domestic airlines have opposed the proposal to charge a levy on flights on major routes to fund subsidies for regional flights and are likely to challenge it in the courts.

  • Major airlines have termed the proposed regional connectivity levy as “illegal” and “in contravention to the Constitution of India.” According to them, the government is not empowered to levy a tax on airlines to fund the regional connectivity scheme under the Aircraft Act of 1934.

 

Background:

As a part of its proposed regional connectivity scheme, the Union Civil Aviation Ministry had mooted amendments to the Aircraft Rules of 1937 in August to set up a regional connectivity fund to subsidise the losses of airlines that wanted to fly on regional routes. The fund was proposed to be financed by a levy on domestic flights along with contribution from states and credit proceeds from other sources.

Passengers will be able to fly to unserved and underserved airports for a fare of Rs 2,500 an hour, under the scheme.

 

Arguments against this decision:

  • A levy in the nature of tax can only be levied having regard to the provisions contained in the Article 265 of the Constitution of India i.e. by authority of law. Therefore, the draft rules as published ultra vires the Constitution of India and is illegal.
  • Also, according to the airlines, imposition of a regional connectivity levy would require amendment to the Aircraft Act, 1934 and not the rule.
  • Besides, Section 5(2) (ab) of the Aircraft Act of 1934 does empower the Centre to make rules for economic regulation of air services but it doesn’t authorise it “to introduce a levy in the nature of tax on air services.”

Sources: the hindu.


 

Paper 2 Topic: Salient features of the Representation of People’s Act.

 

SC not to hear Govt view on religion misuse

 

The Supreme Court, which had recently questioned the practice of using the mass appeal of religious leaders to canvas votes for candidates in election, has now decided against hearing the government’s views on the matter.

  • The court has said that there’s no need for review at this juncture pointing out that these were primarily election petitions between rival candidates.

 

Background:

The Supreme Court had recently expressed its willingness to review its two-decade-old Hindutva judgement paving way for more stringent electoral laws to prevent misuse of religion for electoral gains and had categorised them as corrupt practice.

The issue was referred to the Constitution bench after a threejudge bench headed by former CJI JS Verma in 1995 ruled that a mere reference to Hindutva or Hinduism wasn’t a corrupt practice, as Hinduism was not a religion but a way of life in India.

Another three judge bench within months disagreed and referred the matter to a five-judge bench.

 

What was the 1995 verdict?

The election law bars an appeal in the name of religion. If found guilty a candidate can be disqualified. But the question before the bench in 1995 was whether the use of terms such as Hindutva or Hinduism per se would amount to such practice. The court then held that canvassing votes in the name of ‘Hindutva/Hinduism’ did not prejudicially affect any candidate as Hindutva is a way of life of the people in the sub-continent and ‘a state of mind’.

The verdict also held that seeking votes in the name of Hinduism is not a “corrupt practice” under Section 123 of the Representation of the People Act, which would result in setting aside the election of winning candidates.

Sources: the hindu.


 

Paper 2 Topic: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections.

 

SC/ST hub

 

The National SC/ST Hub, which provides support to entrepreneurs from the community, was recently launched by the PM.

 

Key facts:

  • It will have an initial outlay of Rs 490 crore.
  • The hub will work towards strengthening market access/linkage, monitoring, capacity building, leveraging financial support schemes and sharing industry-best practices.
  • It will also enable central public sector enterprises to fulfill the procurement target set by the government.

Sources: the hindu.


 

Paper 2 Topic: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections. 

 

ZED scheme

 

Prime Minister Narendra Modi recently launched the Zero Defect, Zero Effect (ZED) scheme for Micro, Small and Medium Enterprises (MSMEs).

 

What is it all about?

The ZED Maturity Assessment Model has been conceived and structured to offer graded benchmark levels of an organisation’s performance through a set of standard enabler and outcome parameters focusing on quality and environmental performances. It aims to rate and handhold all MSMEs to deliver top-quality products using clean technology.

  • The aim is to help MSMEs evolve and grow by providing them adequate training and funding to move up the value chain and produce quality products. The ZED model will sensitise MSMEs to emphasise delivery of high quality products with zero defects.
  • There will be sector-specific assessment parameters for each industry such as food processing, textiles, leather, auto parts, etc.

Sources: the Hindu.


 

Facts for Prelims

 

  • Three hydro-electric projects (HEPs) with a generating capacity of 1,732 MW were recently inaugurated by PM in Himachal Pradesh. These include- 800 MW Hydro Power Station of NTPC at Koldam, 520 MW Parvati Project of NHPC and 412 MW Rampur Hydro Station of SJVNL project.
Koldam Dam Himachal Pradesh
Koldam Dam Himachal Pradesh

  • Germany is expanding its renewable energy capacity through wind parks owned by the community, a model that has made the small investor a partner in its transition away from coal and nuclear plants. Under this model, individuals can put in as little as 500 euros, going up to 10,000 euros, and reap a return from the Burgerwindparks in Schleswig-Holstein, Germany’s northernmost State facing the windy North Sea.

IOC Athletes’ commission:

  • Indian shuttler Saina Nehwal has been appointed as a member of the International Olympic Committee’s (IOC) Athletes’ Commission.
  • The IOC Athletes’ Commission is a body maintained by the International Olympic Committee for the purpose of representing athletes. It was established in 1981.
  • The Commission is a consultative body whose function is to act as “the link between active athletes and the IOC”.
  • It makes recommendations to the IOC’s executive bodies, and its chair serves as a member of the IOC Executive Board.
  • It works in liaison with similar athletes’ commissions of the Continental Associations, individual National Olympic Committees and the International Sports Federations.
  • 12 members are elected to the Commission by Olympic athletes for a term of eight years. In addition, the President of the IOC may appoint up to seven further members, “to ensure a balance between regions, gender and sports”, and there are two ex-officio members: one from the World Olympians Association, and one from the International Paralympic Committee.
  • The elected members are usually also elected to the IOC itself shortly after becoming members of the Commission, and serve on the IOC for the duration of their membership of the Commission.