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Insights Daily Current Affairs, 11 June 2018


Insights Daily Current Affairs, 11 June 2018


 

Paper 1:

Topic: Modern Indian history from about the middle of the eighteenth century until the present- significant events, personalities, issues.

 

Bankim Chandra

Context: The Bharatiya Janata Party (BJP) in West Bengal is planning to celebrate the achievements of Bankim Chandra Chattopadhyay.

 

Bankim Chandra- important contributions:

  • Bankim Chandra Chattopadhyay wrote the national song Vande Mataram.
  • The 19th century author’s novel Anandamath — which was set in the background of the Sanyashi Bidroho (rebellion of monks in late 18th century) — is considered to be one of key works on Bengal’s nationalism.
  • His first Bengali fiction is called ‘Durgeshnondini’ published in 1865.
  • He also wrote other famous novels like Kapalkundala in 1866, Mrinalini in 1869, Vishbriksha in 1873, Chandrasekhar in 1877, Rajani in 1877, Rajsimha in 1881 and Devi Chaudhurani in 1884. He brought out a monthly magazine called Bangadarshan in 1872.

 

What’s important?

For Prelims and Mains: Bankim Chandra- Important literary works and role in Indian National movement.

 

Sources: the hindu.


Topic: Women related issues.

 

U.K. Women Celebrate 100 Years of Voting Rights

Context: June 10, 2018 marked 100 years since the first women won the right to vote in Britain.

 

Background:

The Representation of the People Act, 1918 granted property-owning British women over age 30 the right to vote.

 

What’s important?

  • For Prelims: Right to Vote for women in Britain.
  • For Mains: Significance of voting rights for women, historical position of women across the world.

 

Sources: the hindu.


 

Paper 2:

Topic: Statutory, regulatory and various quasi-judicial bodies.

 

Vigilance commissioner

Context: Former NIA chief Sharad Kumar is the new vigilance commissioner for a term of four years or till he attains the age of 65.

 

About CVC:

  • It is the apex vigilance institution. It was created via executive resolution (based on the recommendations of Santhanam committee) in 1964 but was conferred with statutory status in 2003. It submits its report to the President of India.
  • Composition: Presently, the body consists of central vigilance commissioner along with 2 vigilance commissioners.
  • Appointment: They are appointed by the President of India on the recommendations of a committee consisting of Prime Minister, Union Home Minister and Leader of the Opposition in Lok Sabha (if there is no LoP then the leader of the single largest Opposition party in the Lok Sabha).
  • Term: Their term is 4 years or 65 years, whichever is earlier.
  • Removal: The Central Vigilance Commissioner or any Vigilance Commissioner can be removed from his office only by order of the President on the ground of proved misbehavior or incapacity after the Supreme Court, on a reference made to it by the President, has, on inquiry, reported that the Central Vigilance Commissioner or any Vigilance Commissioner, as the case may be, ought to be removed.

 

What’s important?

  • For Prelims: CVC- eligibility, appointment and removal.
  • For Mains: Corruption- issues, challenges and ways to prevent.

 

Sources: the hindu.


Topic: Role of civil services in a democracy.

 

Lateral entry into Civil Services

 

Context: In an apparent bid to bring in expertise from the private sector individuals and infuse talent into the country’s bureaucracy, the government has invited “outstanding individuals” to join the government at the joint secretary level at the Centre.

  • In this regard, the Department of Personnel and Training (DoPT) has invited applications for 10 senior level positions in the Departments of Economic Affairs, Revenue, Commerce and Highways among others.

 

Eligibility:

  • The eligibility criteria includes “Individuals working at comparable levels in Private Sector Companies, Consultancy Organisations, International/Multinational Organisations with a minimum of 15 years’ experience” besides those working in central public sector undertakings, autonomous bodies, statutory organisations, research bodies and universities.
  • The notification specifies a minimum age of 40 years and minimum qualification of graduation from a recognised university or institute while higher qualification will be an added advantage.
  • The recruitment will be on contract basis for three to five years.

 

Background:

So far, these posts were held by joint secretary level officers, who were career bureaucrats, who join the service after passing UPSC exam. The post of joint secretary (JS) is crucial for policy making and implementation of government programmes and schemes, with most crucial decisions in ministries and departments taken by bureaucrats appointed JS.

 

Significance of this move:

Though the idea of lateral entry of private individuals into the administrative framework has been under discussion for some years now, this is the first move towards implementing the idea, which is generating curious debate on the pros and cons of the move.

 

Need for alter entry in civil services:

Shortfall in numbers: There is an overall 20% shortfall of IAS cadre officers alone in 24 state cadres. The Baswan Committee (2016) has shown how large states such as Bihar, Madhya Pradesh and Rajasthan have a deficit of 75 to over 100 officers and their unwillingness to sponsor officers to go to the Centre on deputation is understandable. Lateral induction is, therefore, a small step towards essential housekeeping in central government staffing and ought to be supported.

Target oriented: Outside talent from the private sector is more likely to be target-oriented, which will improve the performance of the government. Also, more competition will encourage career civil servants to develop expertise in areas of their choice.

Improved governance: The conventional wisdom on lateral entry is that it infuses fresh energy and thinking into an insular, complacent and often archaic bureaucracy. It enables the entry of right-minded professionals and the adoption of best practices for improving governance.

 

Challenges and concerns:

Disturbed balance: The proposal for lateral entry at senior decision-making levels, besides increasing the disconnect between policymaking and implementation, will also result in inequitable sharing of the benefits and burdens of government service, with permanent civil servants left to bear the burden of “humble” implementation and lateral entrants getting access to “glamorous” policymaking positions, without having roughed it out in remote and rural India in the rough and tumble of Indian democracy.

Deters the available talent: By suggesting a contract-based system for positions of joint secretary and above, the signal would be sent out that only mid-career positions would be within reach in about 15-18 years of service and there would be considerable uncertainty about career progression thereafter. Coupled with unattractive salary scales and non-entitlement to defined pension since 2004, this would become a potent trinity to deter talented persons from aspiring to civil service careers.

Difficulty in assessing performance: Also, it is not easy to assess the performance of a secretary to the government, given the sheer complexity and amorphous nature of the job. The induction of lateral entrants would not by itself suffice for better performance orientation and enhanced accountability. It would be as difficult to measure the performance of lateral entrants as it would of career civil servants.

 

What’s important?

  • For Prelims: Nothing Much.
  • For Mains: Lateral entry, pros, cons, concerns, challenges and solutions.

 

Sources: the hindu.


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

 

Seva Bhoj Yojna

Context: The Union Ministry of Culture recently introduced a new scheme called ‘SevaBhojYojna’ to reimburse the central share of CGST and IGST on items for food/prasad/langar/bhandara offered free of cost by charitable religious institutions.

 

About Seva Bhoj Yojana:

The scheme seeks to reimburse the central government’s share of Central Goods and Services Tax (CGST) and Integrated Goods and Service Tax (IGST) on purchase of raw items such as ghee, edible oil, atta, maida, rava, flour, rice pulses, sugar and jaggery, which go into preparation of food/prasad/langar/bhandara offered free of cost by religious institutions.

The main objective of the scheme is to lessen the financial burden of such charitable religious institutions, which provide free of cost without any discrimination to the general public and devotees.

 

The charitable religious institutions including temples, gurudwara, mosque, church, dharmik ashram, dargah, monasteries, which fulfill the following criteria are eligible for the grant:

  • The institutions that have been in existence for at least five years before applying for financial assistance/grant.
  • The institutions that serve free food to at least 5000 people in a month.
  • The institutions covered under Section 10( 23BBA) of the Income Tax Act  or those registered as Society  under Societies Registration Act ( XXI of 1860) or as a Public Trust under any law for the time being in force of statuary religious bodies constituted under any Act  or institutions registered under Section 12AA of Income Tax Act.

 

What’s important?

For Prelims and Mains: Main features of the scheme.

 

Sources: the hindu.

 


Paper 3:

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

 

Bad Bank

 

Context: The concept of having a ‘bad bank’ to take over the troubled loans of public sector banks (PSBs) is being considered by the government to enable them to get back to business. Finance minister Piyush Goyal recently announced that a bankers’ panel would look at the feasibility of setting up a new asset reconstruction company (ARC) or asset management company (AMC) to take over bad loans of PSBs. The panel is headed by Punjab National Bank non-executive chairman Sunil Mehta.

 

Background:

The Bad Bank concept was pioneered at the Pittsburgh-headquartered Mellon Bank in 1988 in response to problems in the bank’s commercial real-estate portfolio. According to McKinsey & Co, the concept of a “bad bank” was applied in previous banking crises in Sweden, France, and Germany.

 

How does a bad bank work?

While the government has not charted out any guidelines on the structure of a bad bank, such an institution would be largely based on the principles of an asset restructuring company (ARC), which buys bad loans from the commercial banks at a discount and tries to recover the money from the defaulter by providing a systematic solution over a period of time. Since a bad bank specialises in loan recovery, it is expected to perform better than commercial banks, whose expertise lies in lending.

 

Why a bad bank is likely to succeed?

  • A single government entity will be more competent to take decisions rather than 28 individual PSBs.
  • Capacity building for a complex workout can be better handled by the government which has regulatory control and has management skillsets in public sector enterprises.
  • Foreign investors with both risk capital and risk appetite would be more in a government- led initiative, knowing that regulatory risks would stand considerably mitigated in various stages of resolution, including take outs.

 

What needs to be done now?

Whether or not the knots in the bad bank idea are sorted out, the government should focus on other reforms as well. One, amend the Prevention of Corruption Act to shield bankers and officers from investigative witch-hunts. Two, back bankers to take demonstrable action against wilful defaulters. And three, take a hard look at what ails the Insolvency and Bankruptcy Code.

 

What’s important?

  • For Prelims: What is a bad bank?
  • For Mains: Bad bank- concept, pros, cons, challenges and alternatives.

 

Sources: the hindu.


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

 

Insolvency Code

 

Context: Recently, President Ram Nath Kovind gave his nod to promulgate the Insolvency and Bankruptcy code (Amendment) Ordinance 2018.

 

Significant changes introduced:

  1. Homebuyers as financial creditors:

Homebuyers would now be treated as financial creditors or, in other words, on par with banks, with the power to initiate insolvency proceedings against errant builders. Homebuyers shall have the right to be represented in the committee of creditors (CoC), which takes the key decision regarding revival of the company or its liquidation.

 

  1. Definition of a related party:

The amendment now defines related party in relation to an individual running the firm and they would be barred from bidding for the firm under the resolution process. Prior to the amendment, related party was defined only with reference to a company facing insolvency.

 

  1. Changes in voting share of committee of CoC:

The amendment has changed the voting share required in CoC meetings. For extending the insolvency process beyond 180 days till 270 days and for appointment of the resolution professional (who oversees the process), now a voting share of 66% is sufficient, compared with earlier requirement of 75%. Unless a specific approval is required in the Code, all other decisions of the CoC can be taken with 51% voting share against the earlier norm of 75%.

Withdrawal from the insolvency process is permitted with the approval of 90% of voting share of the CoC.

 

  1. If a financial creditor is a related party:

If a financial creditor (banks and other financial institution) or his authorised representative is a related party to the company facing insolvency, it shall not have any participation or voting during a meeting of the CoC.

However, exemption is provided in case the financial creditor has become a related party on account of conversion or substitution of debt to equity shares or instruments convertible into equity shares prior to the date of commencement of insolvency proceedings.

 

  1. Moratorium period:

For a company under insolvency, a moratorium period is provided during which no parallel proceedings are allowed. Whether such moratorium is available to guarantors of the company was a subject of debate. Now the amendment has said that the moratorium is not available to persons who provided guarantee for the loans availed by the corporate debtor.

 

  1. Tenure of an insolvency resolution professional:

Under the insolvency process, an interim resolution professional (IRP) is appointed first and then, a resolution professional. As per the amendment, the tenure of the IRP would continue till the appointment of the resolution professional (RP), compared with the earlier 30-day fixed tenure. Also, for the appointment of the RP, a written consent from the professional is required in a specified format.

 

Sources: the hindu.


Topic: Awareness in space.

 

‘EPIC’ planet

 

Context: Scientists from ISRO have spotted for the first time a distant planet six times bigger than Earth and revolving around a Sun-like star about 600 light years away.

 

Key facts:

  • The planet has been named EPIC 211945201b (or K2-236b). The host star is named EPIC 211945201 or K2-236.
  • The planet is smaller in size than Saturn and bigger than Neptune. Its mass is about 27 times Earth’s and six times that of Earth at radius. The scientists estimate that over 60% of its mass could be made up of heavy elements like ice, silicates and iron.
  • With this discovery India has joined a handful of countries which have discovered planets around stars.
  • The discovery was made using a PRL-designed spectrograph, PARAS, to measure and confirm the mass of the new planet.

 

About PARAS:

  • PARAS is an echelle spectrograph (with resolution of 60,000) designed and developed by the members of the Astronomy and Astrophysics Division of PRL.
  • The primary aim of PARAS is to search for planets around a sample of 100s of Dwarf main-sequence G,K,M type stars within a volume of 100pc using the Simultaneous ThAr calibration technique. It has wavelength coverage of 400nm to 680nm.

 

What’s important?

For Prelims and Mains: What are EPIC and PARAS?

 

Sources: the hindu.