Daily Prelims Notes 27 November 2020

November 27, 2020
Posted by: OptimizeIAS Team
Category: DPN

Table Of Contents

Subject: Polity

Context: Prime Minister Narendra Modi on Thursday again pitched for ‘One Nation, One Election’, at the concluding session of the 80th All India Presiding Officers Conference via videoconference.

Concept:

‘Simultaneous Elections’ is defined as structuring the Indian election cycle in a manner such that elections to Lok Sabha and State Assemblies are synchronized together.
Elections to Local bodies, which is a state subject, are not included in it.

Advantages

Frequent elections impose a burden on human resources.
They also impede the development process due to the promulgation of Model Code of Conduct.
The idea of ‘one nation, one election’ will drastically cut the election expenditure.
The government will be able to focus on legislation and governance.
Now, they are deviated in the campaign mode periodically.

Concerns and Challenges:

Tenure – Synchronisation would involve curtailment or extension of the tenure of a House.
It is proposed that the Assemblies would be bunched into two categories.
This will be based on whether their terms end close to the 2019 or the 2024 Lok Sabha elections.
The legal validity of this process is however questionable.
Constitutional – The move requires amendment to the Representation of Peoples’s Act 1951.
But attempting to draft a constitutional amendment would highlight the hollowness of the whole idea.
Discussions with the public, political parties and all other stakeholders would have to be reflected in the bill.
Significantly, it requires changes to the Constitution’s basic structure, posing a challenge.
Difficulties – The Election Commission sometimes holds elections to even one state in many phases.
Given this, holding simultaneous elections for the whole country has many practical difficulties.
Dissolution – It is possible for Lok Sabha to be prematurely dissolved on account of a vote of no-confidence.
It is still uncertain if all Assemblies would also be dissolved in that case.
And in case of a mid-term election, the term of such a House would only be for the remainder of its tenure.
Defection – Allowing a one-time waiver of the anti-defection law in the event of a hung House is another proposal.
This is to enable the House to elect a leader.
However, these reforms can be adopted even without simultaneous elections.

2. DRAFT MERCHANT SHIPPING BILL, 2020

Subject: Polity

Context: Ministry of Ports, Shipping and Waterways has issued a draft of the Merchant Shipping Bill, 2020 for public consultation. It aims to repeal and replace the Merchant Shipping Act, 1958 and the Coasting Vessels Act, 1838.

Concept:

To improve welfare of Indian seafarers on abandoned vessels and safety of such vessels, the Bill has provisions for repatriation of abandoned seafarers have been enhanced, in line with the Maritime Labour Convention regulations.
To promote ease of doing business, the Bill does away with requirement of general trading licence for Indian vessels.
It also enables electronic means of registration, and grants statutory recognition to electronic agreements, records, and log-books, in addition to electronic licenses, certificates and payments, stated the release.
The Bill has clauses to increase India’s tonnage and to make the vessel a tradeable asset.
To promote India as a bankable shipping jurisdiction and avoid situations leading to wreck, the proposed Bill seeks to introduce for the first-time statutory framework for regulating maritime emergency response against maritime incidents
To make India an active enforcement jurisdiction, the Bill incorporates powers of the Director-General to take action against vessels that are unsafe, and pose a threat to safety of life at sea and environment.
The Bill also encourages active enforcement of pollution prevention standards.

3. PROBLMES IN INDUSTRIES OWNED BANKS

Subject: Economy

Context: An internal working group of the RBI has recently made a recommendation to permit industrial houses to own and control banks.

Concept:

The problem with banks owned by corporate houses is that they tend to engage in connected lending.

Over-financing of risky activities

Lending to firms that are part of the corporate group allows them to undertake risky activities that are not easily financeable through regular channels.
Precisely because these activities are risky, they often do not work out.
And when that happens, it is typically taxpayers who end up footing the bill.
In principle, connected lending can be contained by the regulatory authority.
However, experiences in other nations show that regulating connected lending is impossible convincing most advanced countries that regulating connected lending is impossible.
Indonesia tried to regulate the practice: It banned the practice.
Regulation and supervision need to be strengthened considerably to deal with the current problems in the banking system before they are burdened with new regulatory tasks.

Lack of exit

The economic landscape is littered with failed firms, kept alive on life support, making it impossible for more efficient firms to grow and replace them.
While some progress was initially made under the Insolvency and Bankruptcy Code (IBC), this had stalled even before the pandemic, largely because existing promoters and owners mounted a stiff resistance.
If industrial houses get direct access to financial resources, their capacity to delay or prevent exit altogether will only increase.

Increasing dominance

The Indian economy already suffers from over-concentration.
We not only have concentration within industries, but in some cases the dominance of a few industrial houses spans multiple sectors.
If large industrial houses get banking licences, they will become even more powerful, not just relative to other firms in one industry, but firms in another industry.

Impact on quality of credit

Indian financial sector reforms have aimed at improving not just the quantity, but also the quality of credit.
The goal has been to ensure that credit flows to the most economically efficient users, since this is the key to securing rapid growth.
If India now starts granting banking licences to powerful, politically connected industrial houses we will effectively be abandoning that long-held objective.

4. BRAHMOS MISSILE

Subject: Defence

Context: India successfully test fired the surface-to-surface supersonic cruise missile BrahMos as part of a series of planned trials of the weapon, known for its precision strike capabilities, official sources said.

Concept:

BRAHMOS supersonic cruise missile featuring Indian propulsion system, airframe, power supply, and other major indigenous components has been successfully test-fired.
BRAHMOS is a joint venture between the Defence Research and Development Organisation of India (DRDO) and the NPOM of Russia.
Brahmos is named on the rivers Brahmaputra and Moskva.
It is a two-stage (solid propellant engine in the first stage and liquid ramjet in second) air to surface missile with a flight range of around 300 km.
Brahmos is the heaviest weapon to be deployed on Su-30 MKI fighter aircraft, with a weight of 2.5 tonnes.
Brahmos is a multiplatform e it can be launched from land, air, and sea and multi capability missile with pinpoint accuracy that works in both day and night irrespective of the weather conditions.
It operates on the “Fire and Forgets” principle e it does not require further guidance after launch.
Brahmos is one of the fastest cruise missile currently operationally deployed with speed of Mach 2.8, which is 3 times more than the speed of sound. Advanced versions of range above 1000kms and speed upto Mach 5 are under development.

5. BLUE TIDES

Subject: Environment

Context : The tide that produces a fluorescent blue hue—bioluminescence, made an appearance on Tuesday night on Juhu beach in Mumbai and Devgad beach in Sindhudurg along Maharashtra’s coastline.

Concept:

The natural phenomenon is characterised by the emission of light produced by phytoplanktons (microscopic marine plants), commonly known as dinoflagellates.
The light is produced through a series of chemical reactions due to luciferase (oxidative enzymes) protein.
Marine scientists said one of the main factors for its occurrence could be eutrophication – the reduction of oxygen in the water – which makes the phytoplanktons very dominant.
This is a recurring phenomenon which is caused by a bioluminescent plankton called Noctiluca scintillans, commonly known as sea sparkle.
While smaller blooms may be harmless, slow moving larger blooms may cause severe hypoxic conditions that result in fish die-offs in an area.
Similar to the blue tide, there exists another such phenomenon called red tide or harmful algal blooms that emits red light.
It is rare occurrence caused when colonies of algae—simple plants that live in the sea and freshwater—grow out of control while producing toxic or harmful effects on people, fish, shellfish, marine mammals, and birds.

6. SDGs INVESTOR MAP FOR INDIA

Subject: Economy

Context: United Nations Development Programme (UNDP) and Invest India have launched the Sustainable Development Goals (SDGs) Investor Map for India.

Concept:

It laid out 18 Investment Opportunities Areas (IOAs) in six critical SDG enabling sectors, that can help the country push forward on the trajectory of Sustainable Development.
The six focus sectors identified in the map include education, healthcare, agriculture and allied activities, financial services, renewable energy and alternatives and sustainable environment.
Of the 18 IOAs identified, 10 are already mature investable areas that have seen robust Private Equity and Venture Capital activity. The remaining eight IOAs are emerging opportunities, which have seen traction from early-stage investors.
The map has also identified eight ‘white spaces’, which have seen investor interest and have the potential to grow into IOAs in five to six years with policy support and private sector participation.
Invest India is the national investment promotion agency under the Commerce & Industry Ministry.

7. PRIVATE PLACEMENT

Subject: Economics

Context : The National Payments Corporation of India (NPCI) has completed private placement of 4.63% of its equity shares worth ₹81.64 crore.

Concept :

When a company issues financial securities such as shares and convertible securities to a particular group of investors (not more than 49 in number) it is known as private placement.
There are mainly two kinds – preferential allotment and qualified institutional placement.

Preferential allotment:

Under the preferential allotment, a listed company issues securities to a select group of entities, which may be institutions or promoters, at a particular price.
Usually for a preferential allotment, companies are required to take permission of shareholders.

QIP:

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.
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.
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.

8. IMAC

Subject: Defence

Context: The Navy’s Information Management and Analysis Centre (IMAC), the nodal agency for maritime data fusion set up after the 26/11 Mumbai terror attacks, will soon become a National Maritime Domain Awareness (NDMA) centre.

Concept:

Information Management and Analysis Centre (IMAC)

The Information Management and Analysis Centre (IMAC) is located in Gurugram.
It is the main center of the Indian Navy for coastal surveillance and monitoring.
IMAC is the nodal center of the National Command Control Communications and Intelligence Network (NC3I Network).
IMAC is a joint initiative of Indian Navy, Coast Guard and Bharat Electronics Ltd. and functions under the National Security Adviser (NSA).

National Command Control Communication and Intelligence Network (NC3IN)

The Indian Navy has established the NC3IN linking 51 stations, including 20 of the Navy and 31 of the Coast Guard, with a nodal Information Management and Analysis Centre (IMAC).
The NC3I links 20 naval and 31 Coast Guard monitoring stations to generate a seamless real-time picture of the nearly 7,500-km long coastline.