Daily Prelims Notes 20 January 2021
- January 20, 2021
- Posted by: OptimizeIAS Team
- Category: DPN
Daily Prelims Notes 20 January 2021
All 6 Prelims qualified
4 CSE Mains qualified
If I can do it, you can too
Table Of Contents
- CHIEF INFORMATION COMMISSIONER
- QUESTION HOUR & ZERO HOUR
- INSIDER TRADING
- P – NOTES
- K SHAPED RECOVERY
- GLOBAL RISK REPORT
- HABEAS CORPUS
- S 400
- PARAKRAM DIWAS
- INVESTMENT MODELS IN E-COMMERCE
- AMENDMENTS IN IBC
Context: Delhi High Court on Tuesday issued a notice to the government on a petition challenging a 2020 Central Information Commission (CIC) order in which the statutory body had observed that sufficient information regarding the app was already in public domain.
- The Chief Information Commissioner(CIC) and Information Commissioners(CI) shall be appointed by the President on the recommendation of a committee consisting of
The Prime Minister, who shall be the Chairperson of the committee.
The Leader of Opposition in the Lok Sabha.
A Union Cabinet Minister to be nominated by the Prime Minister.
- Section 12(5) of the RTI Act 2005 provides that the CIC and IC shall be persons of eminence in public life with wide knowledge and experience in law, science and technology, social service, management, journalism, mass media or administration and governance.
- Also, CIC/IC shall not be a MP or MLA, or hold any other office of profit or connected with any political party or carrying on any business or pursuing any profession.
- CIC shall hold office for a term of five years from the date on which he enters upon his office and shall not be eligible for reappointment
- Information Commissioner(IC) shall also hold office for a term of five years from the date on which he enters upon his office and shall not be eligible for reappointment of IC. However, IC is eligible for appointment as CIC
- Where the Information Commissioner is appointed as the Chief Information Commissioner, his term of office shall not be more than five years in aggregate as the Information Commissioner and the Chief Information Commissioner.
Context: Lok Sabha Speaker Om Birla said both Houses will have five-hour sessions each with Question Hour and Zero Hour. Rajya Sabha will sit from 9 am to 2 pm, and Lok Sabha from 4 pm to 9 pm.
- The first hour of every parliamentary sitting is slotted for this.
- It is regulated according to parliamentary rules and presiding officers of both the houses are the final authority for conducting the question hour.
- During this time, the members ask questions and the ministers usually give answers.
- Questions can also be asked to private members of the house.
- The questions are of three kinds, namely, starred, unstarred and short notice.
- Starred question (distinguished by an asterisk)- this requires an oral answer and hence supplementary questions can follow.
- Unstarred question- this requires a written answer and hence, supplementary questions cannot follow.
- Short notice question is one that is asked by giving a notice of less than ten days. It is answered orally.
- Question Hour in both Houses is held on all days of the session. But there are two days when an exception is made.
When the President addresses MPs from both Houses.
The President’s speech takes place at the beginning of a new Lok Sabha and on the first day of a new Parliament year.
On the day the Finance Minister presents the Budget.
- Unlike the question hour, the zero hour is not mentioned in the Rules of Procedure.
- Thus it is an informal device available to the members of the Parliament to raise matters without any prior notice.
- The zero hour starts immediately after the question hour and lasts until the agenda for the day (ie, regular business of the House) is taken up.
- In other words, the time gap between the question hour and the agenda is known as zero hour.
- It is an Indian innovation in the field of parliamentary procedures and has been in existence since 1962.
Context : The Andhra Pradesh High Court on Wednesday quashed cases filed by the CID alleging insider trading in land transactions — during the tenure of the Telugu Desam Party.
- Insider trading is the buying or selling of a publicly-traded company’s shares/debt papers by someone who has confidential information about that shares/debt papers.
- Insider trading is defined as a malpractice wherein trade of a company’s securities is undertaken by people who by virtue of their work have access to the otherwise non-public information/confidential information which can be crucial for making investment decisions.
- When insiders, e.g. key employees or executives who have access to the strategic information about the company, use the same for trading in the company’s stocks or securities, it is called insider trading.
- An insider is a person who possesses either access to valuable non-public information about a corporation or ownership of stock equaling more than 10% of a firm’s equity. This makes a company’s directors and high-level executives insiders.
Mechanism to prevent insider trading
- According to SEBI Promoters will be held responsible for violation of insider trading norms, if they possess unpublished price-sensitive information (UPSI) regarding the company without any “legitimate purpose”.
- Legitimate purpose – Sharing of the UPSI by an insider with partners, collaborators, lenders, customers, suppliers, merchant bankers, legal advisors, auditors, insolvency professionals or other advisors or consultants, provided that such sharing has not been carried out to evade or circumvent the prohibitions of these regulations.
Recommendation of Kotak committee
- The committee has recommended flow of unpublished price sensitive information (UPSI) shall be considered for ‘legitimate purpose’, and not an offence under the SEBI (Insider Trading) for those who:
- Is part of the promoter group
- Has a nominee director on the board.
- The information should be pursuant to a formal agreement in accordance with the regulations.
- Communication of information must comply with the Insider Trading Regulations.
Context: Data show that ₹87,132 crore ($11.6 billion approx) worth of P-note positions were outstanding as of December 2020.
- A promissory note is an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument.
- In a promissory note there are two parties the maker of the note and the payee.
- The PN can be Demand Promissory Note or Usance Promissory Note.
- Demand Promissory Note has to be paid immediately on demand and Usance Promissory Note has to be paid after certain time period.
- In a promissory note there is a promise to make the payment whereas in a bill of exchange there is an order for making the payment.
- Also, a promissory note requires no acceptance as it is signed by the person who is liable to pay. The drawer of a bill of exchange is generally the creditor of the drawee and therefore it must be accepted by the drawee before it can be presented for payment.
Context : The Reserve Bank of India (RBI) has retained State Bank of India, ICICI Bank and HDFC Bank as domestic systemically important banks (D-SIBs) or banks that are considered as “too big to fail”.
- D-SIB means that the bank is too big to fail.
- According to the RBI, some banks become systemically important due to their size, cross-jurisdictional activities, complexity and lack of substitute and interconnection. Banks whose assets exceed 2% of GDP are considered part of this group.
- RBI has to disclose names of banks designated as D-SIB. It classifies the banks under five buckets depending on order of importance.
- Based on the bucket in which a D-SIB is, an additional common equity requirement applies. Banks in bucket one need to maintain a 0.15% incremental tier-I capital from April 2018. Banks in bucket three have to maintain an additional 0.45%.
- All the banks under D-SIB are required to maintain higher share of risk-weighted assets as tier-I equity.
- Should such a bank fail, there would be significant disruption to the essential services they provide to the banking system and the overall economy.
- The too-big-to-fail tag also indicates that in case of distress, the government is expected to support these banks. Due to this perception, these banks enjoy certain advantages in funding. It also means that these banks have a different set of policy measures regarding systemic risks and moral hazard issues.
- A K-shaped recovery occurs when an economy recuperates unevenly, and there’s a separate trajectory for two segments of the society.
- While the financial markets recover and grow, the real economy, or the flow of goods and services, gets worse.
- That’s worrying, because 84% of the stock market is owned by 10% of households. While the market continued to rise even amid a global pandemic, GDP and employment rates fell.
- These different paths follow the direction of the two spokes that poke out from the
- The two prongs can also represent: people with high and low wage levels, those that have the ability to work from home and those who don’t, and those who have liquid wealth assets to survive during the recession and those who don’t. It’s very much a split of the ‘haves’ and the ‘have-nots’.
Subject: International Report
Context: The report, released ahead of the virtual ‘Davos Agenda’ summit of the WEF from January 25-29 that would be attended by Prime Minister Modi among other global leaders.
- The (16th edition) report was released by World economic forum and it is a part of it’s global risk initiative.
- It has said that the world needs to wake up to long-term risks, after witnessing in 2020 the catastrophic effects of ignoring long-term risks such as pandemics, which is now an immediate risk.
- The 16th edition of Global Risks Report analyses the risks from societal fractures—manifested through persistent and emerging risks to human health, rising unemployment, widening digital divides, youth disillusionment, and geopolitical fragmentation.
- Businesses risk a disorderly shakeout which can exclude large cohorts of workers and companies from the markets of the future. Environmental degradation—still an existential threat to humanity—risks intersecting with societal fractures to bring about severe consequences.
Context: The court said this while disposing a Habeas Corpus plea filed by an MBA student seeking that a 23-year-old woman, whom he wished to marry, be produced before the court, as she had been illegally detained.
- According to Article 32, both the High Courts and the Supreme Court can be approached for violation or enactment of fundamental rights through five kinds of writs.
- Habeas corpus – related to personal liberty in cases of illegal detentions and wrongful arrests
- The writ of habeas corpus primarily acts as a writ of enquiry; it is issued by the courts to ascertain the grounds of detention of an individual.
- Therefore, it acts as a procedural safeguard against the law enforcement authorities, specifically their power to take into custody.
- Moreover, if sufficient legal grounds of arrest are missing, the court will order the immediate release of the individual.
- The writ of habeas corpus serves as a procedural device, by which executive, judicial, or other governmental restraints on personal liberty are subjected to judicial scrutiny.
- The Writ of Habeas Corpus is a remedy available to the person who has lost his personal liberty and as such, it cannot be invoked to challenge past illegal detentions.
- However, the Supreme Court has expanded the dimension of this writ and now the Court awards compensation not only for past illegal detentions.
- Other writs available are:
- Mandamus — directing public officials, governments, courts to perform a statutory duty;
- Quo warranto — to show by what warrant is a person holding public office;
- Prohibition — directing judicial or quasi-judicial authorities to stop proceedings which it has no jurisdiction for; and
- Certiorari — re-examination of an order given by judicial, quasi-judicial or administrative authorities.
Context : As India prepares to receive the first batch of S-400 long-range air defence system by year-end, the first group of Indian military specialists are scheduled to depart for Moscow soon to undergo training courses on the S-400, the Russian Embassy here said in a statement.
- The S-400 Triumf, (NATO calls it SA-21 Growler), is a mobile, surface-to-air missile system (SAM) designed by Russia.
- It is the most dangerous operationally deployed modern long-range SAM (MLR SAM) in the world, considered much ahead of the US-developed Terminal High Altitude Area Defense system (THAAD).
- The system can engage all types of aerial targets including aircraft, unmanned aerial vehicles (UAV) and ballistic and cruise missiles within the range of 400km, at an altitude of up to 30km. The system can track 100 airborne targets and engage six of them simultaneously.
- The S-400 Triumf air defence system integrates a multifunction radar, autonomous detection and targeting systems, anti-aircraft missile systems, launchers, and command and control centre. It is capable of firing three types of missiles to create a layered defence.
Subject: Current Events/History
Context: The Union Culture Ministry on Tuesday announced that January 23, birth anniversary of Subhas Chandra Bose, would be celebrated as “ParakramDiwas” — day of courage — every year.
- Prime Minister Narendra Modi would preside over the inauguration of the celebrations in Kolkata, where a permanent exhibition on Netaji at the Victoria Memorial would be opened. A programme would be held in Cuttack, birth place of Bose.
- Patel said a commemorative coin and postage stamp would be released. An artists’ camp at the National Library, Kolkata and an international conference on Bose’s legacy would be organised as well.
Subhash Chandra Bose’s Role in Indian Independence Struggle
- Bose was sent to prison in Mandalay for nationalist activities in 1925. He was released in 1927 and became the INC’s general secretary.
- He worked with Jawaharlal Nehru (Born on November 14 – 1889) and the two became the Congress Party’s young leaders gaining popularity among the people.
- He advocated complete Swarajand was in favour of the use of force to gain it.
- Bose stood for and was elected the party’s president in 1939 but was forced to resign due to differences with Gandhi’s supporters.
- Bose’s ideology tilted towards socialism and leftist authoritarianism. He formed the All India Forward Bloc in 1939 as a faction within the Congress.
- At the start of the Second World War, Bose protested against the government for not consulting Indians before dragging them into the war. He was arrested when he organised protests in Calcutta for the removal of the monument memorialising the Black Hole of Calcutta.
- In Germany, he met with the Nazi leaders and hoped to stage an armed struggle against the British to gain independence. He hoped to befriend the Axis powers since they were against his ‘enemy’, the British.
- He founded the Indian Legion out of about 4500 Indian soldiers who were in the British army and had been taken prisoners by the Germans from North Africa.
- In 1943, he left Germany for Japan disillusioned with the lukewarm German support for Azad Hind.
- Bose’s arrival in Japan revived the Indian National Army (Azad Hind Fauj) which had been formed earlier with Japanese help.
- Azad Hind or the Provisional Government of Free India was established as a government-in-exile with Bose as the head. Its headquarters was in Singapore. The INA was its military.
- Bose motivated the troops with his fiery speeches. His famous quote is, “Give me blood, and I shall give you freedom!”
- The INA supported the Japanese army in its invasion of northeast India and also took control of the Andaman and Nicobar Islands. However, they were forced to retreat by the British forces following the Battles of Kohima and Imphal in 1944.
Context: India is considering revising its foreign investment rules for e-commerce, three sources and a government spokesman told Reuters, a move that could compel players, including Amazon.com Inc., to restructure ties with some major sellers.
- It is a type of business model, or segment of a larger business model, that enables a firm or individual to conduct business over an electronic network, typically the internet.
- In India, there are three types of e-commerce business model:
Inventory base model of e-commerce
Marketplace base model of e-commerce
The hybrid model of inventory based and marketplace model.
Marketplace and Inventory-Based Model
- Marketplace based model of e-commerce means providing an information technology platform by an e-commerce entity on a digital & electronic network to act as a facilitator between the buyer and seller.
- In a marketplace model, the e-commerce firm is not allowed to directly or indirectly influence the sale price of goods or services and is required to offer a level playing field to all vendors.
- Inventory based model of e-commerce means an e-commerce activity where the inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly.
FDI guidelines for e-Commerce
- In India 100% FDI is permitted in B2B e-commerce, however, No FDI is permitted in B2C(Inventory based ) e-commerce.
- 100% FDI under automatic route is permitted in the marketplace model of e-commerce, while FDI is not permitted in inventory based model of e-commerce.
Context: The Supreme Court on Tuesday upheld amendments in the Insolvency and Bankruptcy Code which prescribe that at least 100 allottees from the same real estate project should support the initiation of corporate insolvency resolution process in NCLT against their property developer.
- The Insolvency and Bankruptcy Code (Amendment) Act of 2020 had introduced a threshold that required a minimum of 100 allottees, or 10% of the total allottees of a project, whichever was less, to jointly apply for corporate insolvency resolution in the NCLT.
- The allottees should be from the same real estate project. Aggrieved allottees drawn from different projects of the same developer cannot form the 100.
- Insolvency and bankruptcy code 2016 was introduced to resolve the bankruptcy crisis in corporate sector.
- Under IBC, either the creditor (banks) or the loaner (defaulter) can initiate insolvency proceedings.
- It is done by submitting a plea to the adjudicating authority, the National Companies Law Tribunal (NCLT).
- According to IBC, a financial creditor holds an important role in the corporate insolvency process.
- The Committee of Creditors (CoC) under IBC includes all financial creditors of a corporate debtor.
- The CoC will appoint and supervise the Insolvency Professional.
- It has the power to either approve or reject the resolution plan to revive the debtor, or to proceed to liquidate the debtor.