Daily Prelims Notes 11 September 2020

September 11, 2020
Posted by: OptimizeIAS Team
Category: DPN

Table Of Contents

Subject: Economy

Context:

A five-member expert committee headed by K V Kamath came out with recommendations on the financial parameters required for a one-time loan restructuring window for corporate borrowers under stress due to the pandemic.

Concept:

Restructuring is a practice that allows banks to modify the terms of the loan when the borrower is facing financial stress.
Banks do that to avoid the borrower being declared a defaulter and the loan having to be classified as a non-performing asset.
It could be through a change in the repayment period / repayable amount / number of installments / rate of interest/ additional loans.

Kamath committee

The RBI had formed a five member committee under the chairmanship of former ICICI Bank Chief Executive KV Kamath to make recommendations on the financial parameters to be considered in the restructuring of loans impacted by the Covid 19 pandemic.
The committee will also scrutinize restructuring of loans above Rs 1500 crore. The term of the committee has been extended till June 30 2021.
It recommended a graded approach to restructuring of stressed accounts based on severity of the impact on the borrowers.
The committee has allowed banks to classify the accounts into mild, moderate and severe.
In line with the mandate given by the RBI, Kamath committee has identified four financial parameters including total outside liabilities to adjusted tangible networth, total debt to EBITDA, debt service coverage ratio (DSCR), average debt service coverage ratio (ADSCR).
The committee has recommended sector-specific thresholds for each ratio in respect of 26 sectors to be taken into account while finalizing the resolution plans.
In its report the five member committee said power, construction, iron and steel, roads, real estate, wholesale trading, textiles, consumer durables, aviation, logistics, hotels, restaurants and tourism, mining are among the sectors that will need restructuring

2. Prior restraint and Article 19

Subject: Polity

Context:

Different courts recently gave conflicting rulings involving the broadcast of two shows. In each case, one court restricted the broadcast and another refused to interfere.
These raise questions on the fundamental right to freedom of speech and expression, and whether these can be restrained prior to broadcast or publishing.

Concept:

Section 5 of Cable Television Network (Regulation) Act, 1995 prescribes that no person shall transmit or re-transmit through a cable service any programme unless such programme is in conformity with the prescribed programme code.
Section 19 gives the power to prohibit a broadcast in the public interest if the programme is likely to promote, on grounds of religion, race, language, caste or community or any other ground whatsoever, disharmony or feelings of enmity, hatred or ill-will between different religious, racial, linguistic or regional groups or castes or communities or which is likely to disturb the public tranquility.
Prior restraint is prohibiting the exercise of free speech before it can take place.
Imposition of pre-censorship or prior restraint on speech is a violation of the fundamental right to freedom of speech and expression enshrined in Article 19 (1) (a) of the Constitution.
Any restrictions imposed on this right have to be found under Article 19(2) of the Constitution, which lists out “reasonable restrictions” that include interests of the sovereignty and integrity of India, security of the state, public order, and incitement to an offence.
Any legislation that imposes a prior restraint on speech usually has the burden to show that the reason for such restraint can be found under Article 19(2). It is generally allowed only in exceptional circumstances.
The idea is that speech can be restricted only when judged on its actual content and not pre-emptively based on perceptions of what it could be.
The court has adopted the “proximity” test to determine if public order would be affected to allow prior restraint — the state is required to demonstrate a proximate link between public order and the speech.

3. Breach of legislature’s privilege

Subject: Polity

Context:

A motion for breach of privilege was moved in the Maharashtra Assembly against Republic TV’s Editor-in-Chief Arnab Goswami. A similar motion was moved in the Maharashtra Legislative Council against actor KanganaRanaut.

Concept:

Parliamentary privilege refers to rights and immunities enjoyed by Parliament as an institution and MPs in their individual capacity, without which they cannot discharge their functions as entrusted upon them by the Constitution
According to the Constitution, the powers, privileges and immunities of Parliament and MP’s are to be defined by Parliament (Article 105). No law has so far been enacted in this respect.
Article 194 deals with the powers, privileges and immunities of the State Legislatures, their Members and their committees.
In the absence of any such law, it continues to be governed by British Parliamentary conventions.

Breach of privilege

While the Constitution has accorded special privileges and powers to parliamentarians and legislators to maintain the dignity and authority of the Houses, these powers and privileges are not codified. Thus, there are no clear, notified rules to decide what constitutes a breach of privilege, and the punishment it attracts.
Any act that obstructs or impedes either House of the state legislature in performing its functions, or which obstructs or impedes any Member or officer of such House in the discharge of his duty, or has a tendency, directly or indirectly, to produce such results is treated as breach of privilege.
It is a breach of privilege and contempt of the House to make speeches or to print or publish libel reflecting on the character or proceedings of the House, or its Committees, or on any member of the House for or relating to his character or conduct as a legislator.
A notice is moved in the form of a motion by any member of either House against those being held guilty of breach of privilege
The Speaker/Chairperson can decide on the privilege motion himself or herself or refer it to the privileges committee of Parliament.
If the Speaker/Chair gives consent under Rule 222, the member concerned is given an opportunity to make a short statement.

4. Narcotic Drugs and Psychotropic Substances (NDPS) Act

Subject: Acts

Context:

Sushant Singh Rajput death case has brought focus on Narcotic Drugs and Psychotropic Substances (NDPS) Act

Concept:

The NDPS Act enacted in 1985 is the primary legislation for dealing with drugs and their trafficking.
It was passed as India had to fulfil obligations as a signatory of various international conventions on narcotic drugs and psychotropic substances to prevent its use and illicit trafficking.
It has various provisions to punish manufacturing, sale, possession, consumption, use, transport of banned drugs.
Punishment under the Act can vary based upon the sections the accused is charged.
The central government can add or omit from the list of psychotropic substances.
India is a signatory to The UN Single Convention on Narcotics Drugs 1961, The Convention on Psychotropic Substances, 1971 and The Convention on Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988 which prescribe various forms of control aimed to achieve the dual objective of limiting the use of narcotics drugs and psychotropic substances for medical and scientific purposes as well as preventing the abuse of the same.
Narcotics Control Bureau was constituted by the Government of India in 1986 under the Narcotic Drugs and Psychotropic Substances Act, 1985.
The aspect of drug supply reduction is looked after by various enforcement agencies under the Ministry of Finance, Ministry of Home Affairs and State Governments. The aspect of drug demand reduction is handled by the Ministry of Social Justice & Empowerment and that of treatment of drug addicts and their rehabilitation falls under the domain of the Ministry of Health.

5. SAROD-Ports

Subject: Government initiative

Context:

Union Minister of State for Shipping has launched ‘SAROD-Ports’ (Society for Affordable Redressal of Disputes – Ports) through virtual ceremony in New Delhi.

Concept:

SAROD-Ports as a game changer and added that it will become the pivotal mechanism of ummeed (hope), vishwas(trust) and nyaya (justice) in the Port sector of India.
SAROD-Ports will resolve the disputes in fair and just manner while saving huge amount of legal expenditure and time.
SAROD-Ports is established under Societies Registration Act, 1860 with the following objectives:
- Affordable and timely resolution of disputes in fair manner
- Enrichment of Dispute Resolution Mechanism with the panel of technical experts as arbitrators.
SAROD-Ports consists members from Indian Ports Association (IPA) and Indian Private Ports and Terminals Association (IPTTA).
SAROD-Ports will advise and assist in settlement of disputes through arbitrations in the maritime sector, including ports and shipping sector in Major Port Trusts, Non-major Ports, including private ports, jetties, terminals and harbours.
It will also cover disputes between granting authority and Licensee/Concessionaire /Contractor and also disputes between Licensee/Concessionaire and their contractors arising out of and during the course of execution of various contracts.
All major Ports are shifting towards ‘Landlord Model’ in the days to come. Many concessioners will be working with the Major Ports. SAROD-Ports will inspire confidence in the private players and will ensure right kind of environment for our partners.
It will promote ease of doing business in the maritime sector because of the fast, timely, cost effective and robust dispute resolution mechanism.
‘SAROD-Ports’ is similar to provision available in Highway Sector in the form of SAROD-Roads constituted by NHAI.

6. AMRUT

Subject: Schemes

Context:

AMRUT projects review has been held

Concept:

Atal Mission for Rejuvenation and Urban Transformation (AMRUT) was launched on 2015 in 500 cities across the country, covering about 60% of the total urban population.
It is a centrally sponsored scheme with a total outlay of ₹ 1,00,000 crore including a Central Assistance of ₹ 50,000 crore spread over 5 years i.e. from FY 2015-2016 to FY 2019-2020.
The Mission will focus on the following Thrust Areas:
- Water Supply
- Sewerage and septage management
- Storm Water Drainage to reduce flooding
- Non-motorized Urban Transport
- Green space/parks
The purpose of Atal Mission for Rejuvenation and Urban Transformation (AMRUT) is to
- Ensure that every household has access to a tap with the assured supply of water and a sewerage connection.
- Increase the amenity value of cities by developing greenery and well maintained open spaces (e.g. parks) and
- Reduce pollution by switching to public transport or constructing facilities for non-motorized transport (e.g. walking and cycling).
All these outcomes are valued by citizens, particularly women, and indicators and standards have been prescribed by the Ministry of Housing and Urban Affairs (MoHUA ) in the form of Service Level Benchmarks (SLBs).

7. Five Star Villages Scheme

Subject: Schemes

Context:

The Department of Posts has launched a scheme called Five Star Villages

Concept:

The scheme is to ensure universal coverage of flagship postal schemes in rural areas of the country.
The scheme seeks to bridge the gaps in public awareness and reach of postal products and services, especially in interior villages.
All postal products and services will be made available and marketed and publicized at village level, under the Five Star Villages scheme. Branch offices will function as one-stop shop to cater all post office – related needs of villagers.
The schemes covered under the Five Star scheme include

If a village attains universal coverage for four schemes from the above list, then that village gets four-star status; if a village completes three schemes, then that village get three-star status and so on.
The Postal Department has been playing a major role in the implementation of Government schemes, leveraging the immense strength of its vast network. Postal schemes are known for providing highly secured deposits, they provide higher return of interest with low risk.

8. Ranking of States on Support to Startup Ecosystems

Subject: Schemes

Context:

The Results of the second edition of Ranking of States on Support to Startup Ecosystems will be released

Concept:

The Department for Promotion of Industry and Internal Trade (DPIIT) conducted the second edition of the States’ Startup Ranking Exercise with the key objective to foster competitiveness and propel States and Union Territories to work proactively towards uplifting the startup ecosystem.
It has been envisioned as a capacity development exercise to encourage mutual learning among all states and to provide support in policy formulation and implementation.
The States’ Startup Ranking Framework 2019 has 7 broad reform areas consisting of 30 action points ranging from Institutional Support, Easing Compliances, Relaxation in Public Procurement norms, Incubation support, Seed Funding Support, Venture Funding Support, and Awareness & Outreach.

9. EPFO recommending splitting payment of EPF interest rate

Context:

The Central Board of Trustees of the Employees Provident Fund Organization (EPFO) recommended splitting payment of the interest rate of 8.5% for 2019-20 into two parts.

Taking in account the exceptional circumstances arising out ofcovid19 , EPFO’s Central Board of Trustees has recommended splitting payment of the interest rate of 8.5% recommended for 2019-20 into two parts. The EPFO will credit 8.15% to its over six crore subscribers for the year immediately. The remaining 0.35%, which is linked to its equity investments, will be subject to redemption of its units invested in exchange-traded funds before December 31.

EPFO:

EPFO is one of the World’s largest Social Security Organisations in terms of clientele and the volume of financial transactions undertaken. At present it maintains 19.34 crore accounts (Annual Report 2016-17) pertaining to its members.
The Employees’ Provident Fund came into existence with the promulgation of the Employees’ Provident Funds Ordinance on the 15th November, 1951. It was replaced by the Employees’ Provident Funds Act, 1952.
The Act and Schemes framed there under are administered by a tri-partite Board known as the Central Board of Trustees, Employees’ Provident Fund, consisting of representatives of Government (Both Central and State), Employers, and Employees.
The Central Board of Trustees administers a contributory provident fund, pension scheme and an insurance scheme for the workforce engaged in the organized sector in India.
The EPFO is under the administrative control of Ministry of Labour and Employment

10. Living Planet Report of WWF

According to World Wildlife Fund’s (WWF) Living Planet Report 2020 Wildlife populations have fallen by more than two-thirds in less than 50 years

According to the report the losses have been driven primarily by habitat loss, it says, along with pollution, invasive species, overhunting and overfishing and, increasingly, climate change.

Result of this loss:

The result is dysfunctional ecosystems. It means ecosystem bereft of important pollinators, predators and scavengers which is less able to support human or animal health
According to report, the decrease of wildlife and increasing human interference is leading to rise in Zoonosis.