Daily Prelims Notes 14 November 2020

November 14, 2020
Posted by: OptimizeIAS Team
Category: DPN

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Table Of Contents

1. QRSAM

Subject: Defence

Context: India Successfully test fired the Quick Reaction Surface to Air Missile System.

Concept:

Quick Reaction Surface to Air Missile System (QRSAM) is a Short Range Surface to Air Missile system.
QRSAM is designed to protect moving armoured columns from aerial attacks.
The entire weapon system is configured on highly mobile platforms and is capable of providing air defence on the move.
QRSAM Weapon Systems is being inducted into the Indian Army.
The missile is propelled by a single stage solid propellant rocket motor and uses all indigenous subsystems

2. QUALIFIED INSTITUTIONAL PLACEMENT

Subject: Economics

Concept:

A QIP is a capital raising tool
In a QIP a listed company can issue equity shares, fully and partly convertible debentures, or any security (other than warrants) that is convertible to equity shares.
Apart from preferential allotment, this is the only other speedy method of private placement whereby a listed company can issue shares or convertible securities to a select group of investors.
But unlike in an IPO or an FPO (further public offer), only institutions or qualified institutional buyers (QIBs) can participate in a QIP issuance.
QIBs include mutual funds, domestic financial institutions such as banks and insurance companies, venture capital funds, foreign institutional investors, and others.

Rules to follow:

The market regulator has stated that there should be at least two QIBs if the issue size is less than Rs.250 crore, and at least five investors if the size is more than Rs.250 crore.
A single investor cannot be allotted more than 50% of the issue.

Why QIP?

For the issuing company, QIPs are less cumbersome than IPOs and FPOs. It doesn’t have to file a pre-issue document with the capital markets regulator, and only a placement document with the stock exchanges, which only has details of the issue.
QIP is also a less expensive mode of raising capital than IPO, FPO or rights issue.
For the QIBs, unlike in an IPO where an anchor investor has to stay invested for a month, there are no such restrictions with QIPs.

3. MINING REFORMS

Subject: Economy

Context: Mines secretary has said that centre is looking at mining reforms including amendments to the Mines and Minerals Act, 1957.

Concept:

Key Reforms Proposed are:

Removal of restriction on end-use of coal:
- Currently, companies acquiring Schedule II and Schedule III coal mines through auctions can use the coal produced only for specified end-uses such as power generation and steel production.
- The Bill removes this restriction on the use of coal mined by such companies. And thus companies will be allowed to carry on coal mining operation for own consumption, sale or for any other purposes, as may be specified by the central government.
Eligibility for auction of coal and lignite blocks:
- The Bill clarifies that the companies need not possess any prior coal mining experience in India in order to participate in the auction of coal and lignite blocks.
Composite license for prospecting and mining:
- The Bill adds a new type of license, called prospecting license-cum-mining lease. It will be a composite license providing for both prospecting and mining activities.
- Currently, separate licenses are provided for prospecting and mining of coal and lignite, called prospecting license, and mining lease, respectively. Prospecting includes exploring, locating, or finding mineral deposit.
Advance action for auction:
- The Bill provides that state governments can take advance action for auction of a mining lease before its expiry.
- Under the MMDR Act, mining leases for specified minerals (minerals other than coal, lignite, and atomic minerals) are auctioned on the expiry of the lease period.
Transfer of statutory clearances to new bidders:
- The Bill provides that the various approvals, licenses, and clearances given to the previous lessee will be extended to the successful bidder for a period of two years.
- During this period, the new lessee will be allowed to continue mining operations. However, the new lessee must obtain all the required clearances within this two-year period.
- Currently, upon expiry, mining leases for specified minerals (minerals other than coal, lignite, and atomic minerals) can be transferred to new persons through auction. This new lessee is required to obtain statutory clearances before starting mining operations.
Prior approval from the central government:
- The Bill provides that prior approval of the central government will not be required by the state government in granting licenses for coal and lignite, in certain cases.
- These include cases where the allocation has been done by the central government, and the mining block has been reserved to conserve a mineral.
- Under the MMDR Act, state governments require prior approval of the central government for granting reconnaissance permit, prospecting license, or mining lease for coal and lignite.

4. TRACK OF DIPLOMACY

Subject: International Relations

Context: Indian Council on Global Relations will welcome Canada and India’s top diplomats on Tuesday to discuss the growing strategic partnership between Canada and India in the era of COVID-19.

This is the third Canada-India Track 1.5 Dialogue on Innovation, Growth and Prosperity meeting.

Concept:

Track 1.5 Diplomacy: This term is used when both officials and non-officials are involved in diplomatic negotiations. Often foreign leaders travel with businessmen is an example.
Track 1 Diplomacy:
- Official discussions typically involving high-level political and military leaders and focusing on cease-fires, peace talks, and treaties and other agreements. Heads of states meet, have hi-tea, discuss issues and release joint statements etc.
Track 2 Diplomacy:
- Unofficial dialogue and problem-solving activities aimed at building relationships and encouraging new thinking that can inform the official process.
- Since it is unofficial , you can expect to see influential academic, religious, and NGO leaders and other civil society actors who can interact more freely than high-ranking officials.
Track 3 Diplomacy:
- People-to-people diplomacy undertaken by individuals and private groups. Normally focused at the grassroots level, this type of diplomacy often involves organizing meetings and conferences, generating media exposure, and political and legal advocacy for marginalized people and communities.
Multi-track Diplomacy:
- A term for operating on several tracks simultaneously, including official and unofficial conflict resolution efforts, citizen and scientific exchanges, international business negotiations, international cultural and athletic activities, and other cooperative efforts

5. KALVARI-CLASS SUBMARINES

Subject: Defence

Context: Indian Navy’s fifth Kalvari-class Diesel Electric attack submarine INS Vagir was launched at Mazgaon Dock in Mumbai.

Concept:

Indian Naval Ship (INS) Vagir is the fifth among the six Kalvari-class submarines being constructed by the public sector shipbuilder Mazagon Dock Ltd (MDL) in Mumbai.
The other vessels in the class are INS Kalvari, INS Khanderi, INS Karanj, INS Vela and INS Vagsheer.
Status: Of these Kalvari and Khanderi have been commissioned in 2017 and 2019, Vela and Karanj and undergoing sea trials, Vagir has now been launched and Vagsheer is under construction.

Technical details

The design of Kalvari class of submarines is based on Scorpenesubmarines designed and developed by French defence major Naval Group formerly DCNS and Spanish state owned entity Navantia.
This class of submarines have Diesel Electric transmission systems and these are primarily attack submarines or ‘hunter-killer’ type which means they are designed to target and sink adversary naval vessels.
These submarines are around 220 feet long and have a height of 40 feet. It can reach the highest speeds of 11 knots when surfaced and 20 knots when submerged.
The modern variants of the Scorpene class of submarines have what is called the Air Independent Propulsion (AIP) which enables non-nuclear submarines to operate for a long time without access to surface oxygen.

6. NDRF & SDRF

Subject: Disaster Management

Context: Union Home Ministry releases 4382 Crore Rupees to six states under National Disaster Response Fund.

Concept:

National Disaster Response Fund:

Defined under sec 46 of Disaster Management Act, 2005 (DM Act).
It is a fund managed by the Central Government for meeting the expenses for emergency response, relief and rehabilitation due to any threatening disaster situation or disaster.
Constituted to supplement the funds of the State Disaster Response Funds (SDRF) of the states to facilitate immediate relief in case of calamities of a severe nature.
National Calamity Contingency Fund (NCCF) was renamed as National Disaster Response Fund (NDRF) with the enactment of the Disaster Management Act in 2005.

What is it to be used for?

NDRF amount can be spent only towards meeting the expenses for emergency response, relief and rehabilitation.
For projects exclusively for the purpose of mitigation, i.e, measures aimed at reducing the risk, impact or effect of a disaster or threatening disaster situation a separate fund called National Disaster Mitigation Fund has to be constituted.

Sources of Financing NDRF:

Financed through the levy of a cess on certain items, chargeable to excise and customs duty, and approved annually through the Finance Bill.
The requirement for funds beyond what is available under the NDRF is met through general budgetary resources.
Currently, a National Calamity Contingency Duty (NCCD)is levied to finance the NDRF and additional budgetary support is provided as and when necessary.
A provision also exists in the DM Act,2005 to encourage any person or institution to make a contribution to the NDRF.

Key features of NDRF:

Located in the “Public Accounts” of Government of India under “Reserve Funds not bearing interest“.
Department of Agriculture and Cooperation under Ministry of Agriculture (MoA) monitors relief activities for calamities associated with drought, hailstorms, pest attacks and cold wave /frost while rest of the natural calamities are monitored by Ministry of Home Affairs (MHA).
Comptroller and Auditor General of India (CAG)audits the accounts of NDRF.

State Disaster Response Fund (SDRF):

SDRF has been constituted by each state under the provisions of Disaster Management act 2005.It was constituted based on the recommendations of the 13th Finance Commission.
The government of India contributes 75% and 90% of the total yearly allocation of SDRF to general states and special category states respectively.
The state executive committee headed by the Chief Secretary is authorized to decide on all matters relating to the financing of the relief expenditure from the SDRF.
Disaster (s) covered under SDRF: Cyclone, drought, earthquake, fire, flood, tsunami, hailstorm, landslide, avalanche, cloudburst, pest attack, frost and cold waves.
Local Disaster: A State Government may use up to 10 percent of the funds available under the SDRF for providing immediate relief to the victims of natural disasters that they consider to be ‘disasters’ within the local context in the State and which are not included in the notified list of disasters of the Ministry of Home Affairs
State Government has to list the State specific natural disasters and notify clear and transparent guidelines for such disasters with the approval of the State Authority, i.e., the State Executive Authority (SEC).

Features of SDRF:

SDRF is located in the ‘Public Account’ under ‘Reserve Fund’. (But direct expenditures are not made from Public Account.)
State Government has to pay interest on a half yearly basis to the funds in SDRF, at the rate applicable to overdrafts.
The aggregate size of the SDRF for each state, for each year, is as per the recommendations of the Finance Commission.
The share of GoI to the SDRF is treated as a ‘grant in aid’.
The financing of relief measures out of SDRF are decided by the State Executive Committee (SEC) constituted under Section 20 of the DM Act. SEC is responsible for the overall administration of the SDRF.
However, the administrative expenses of SEC are borne by the State Government from its normal budgetary provisions and not from the SDRF or NDRF.
Ministry of Home Affairs is the nodal ministry for overseeing the operation of the SDRF and monitors compliance with prescribed processes.
Comptroller and Auditor General of India (CAG) audit the SDRF every year.

Right to work:

Context: The lockdown enforced to control COVID-19 led to huge job losses. In this context, MNREGA and Right to Work has become very important.

Concept:

Status of Right to Work:

The Universal Declaration of Human Rights and the International Covenant on Economic, Social and Cultural Rights, both of which were acceded by India, in Article 23 and Article 6 respectively, recognise the right to work in an employment of one’s choice and the State’s responsibility to safeguard this right.

Right to Work in Indian Constitution:

The Indian Constitution does not explicitly recognise the ‘right to work’ as a fundamental right.
It is placed in Part IV (Directive Principles of State Policy) of the Constitution under Article 41, which hence makes it unenforceable in the court of law.
Hon’ble Supreme Court in Olga Tellis & Ors. v Bombay Municipal Corporation & Ors recognised ‘right to work’ as a fundamental right inherent in the ‘right to life’.

MNREGA

The Act guarantees the right to work to by providing 100 days of guaranteed wage employment in a financial year to every rural household whose adult members are willing to do unskilled manual work.