Daily Prelims Notes 30 August 2021

August 30, 2021
Posted by: OptimizeIAS Team
Category: DPN

Daily Prelims Notes

30 August 2021

Table Of Contents

Subject – Economy

Context – To make the National Monetisation Pipeline (NMP) a success, the government should give Income Tax breaks to attract retail investors into instruments such as Infrastructure Investment Trusts (InvITs), the NITI Aayog has recommended.

Concept –

A tax break is a reduction of a taxpayer’s total liability.
If the government gives a tax break to a particular group of people or type of organization, then it reduces the amount of tax that they otherwise would have to pay or changes the tax system in a way that benefits them.
There are three types of tax breaks: a tax deduction, a tax credit, and a tax exemption.

2. National Mission for Clean Ganga

Subject – Governance

Context – The need for infrastructure development in the Himalayan region rubs up against the environmental and ecological challenges that they pose.

Concept –

The National Mission for Clean Ganga (NMCG) was implemented by the National Council for Rejuvenation, Protection and Management of River Ganga also known as the National Ganga Council (set in 2016; which replaced the National Ganga River Basin Authority – NGRBA).
This mission was established in 12th August 2011 under the Societies Registration Act,1860 as a registered society.
It has a two-tier management structure and comprises of Governing Council and Executive Committee.
The National Mission for Clean Ganga (NMCG) under National Ganga Council is supported by the State level Programme Management Groups (SPMGs) in the state of Uttar Pradesh, Uttarakhand, Bihar, Jharkhand, and West Bengal.
It is an initiative taken by the Government of India to address the pollution of the river Ganga by providing financial and technical assistance.

Some of the major objectives of the Nation Mission for Clean Ganga are:

The mission incorporates rehabilitating and boosting the existing STPs and instant short-term steps to curb pollution at exit points on the riverfront in order to check the inflow of sewage.
To maintain the continuity of the water flow without changing the natural season variations.
To restore and maintain the surface flow and groundwater.
To regenerate and maintain the natural vegetation of the area.
To conserve and regenerate the aquatic biodiversity as well as the riparian biodiversity of the river Ganga basin.
To allow participation of the public in the process of protection, rejuvenation and management of the river.

Initiatives to Prevent Ganga Pollution

Ganga Action Plan: It was the first River Action Plan that was taken up by the Ministry of Environment & Forests in 1985, to improve the water quality by the treatment of domestic sewage. It also aimed to prevent toxic and industrial chemical wastes (from identified polluting units) from entering the river.
National River Conservation Plan was an extension to the Ganga Action Plan, so as to cover all the major rivers of the country.
‘National River Ganga Basin Authority (NRGBA)’ was formed by the Central Government of India in the year 2009 under Section-3 of the Environment Protection Act, 1986. It is chaired by the Prime Minister of India.
- It declared the Ganga as the ‘National River’ of India.
In 2010, ‘Government clean-up campaign’ was started to ensure that by 2020 no untreated municipal sewage or industrial runoff enters river.
In 2014, ‘Namami Gange Programme’ was launched as an Integrated Conservation Mission, to accomplish the twin objectives of effective abatement of pollution, conservation, and rejuvenation of National River Ganga.
- The program is being implemented by the National Mission for Clean Ganga (NMCG), and its state counterpart organization viz., State Program Management Groups (SPMGs).
Ganga Manthan– It was a national conference that was held in 2014 to discuss issues and possible solutions for cleaning the river. The event was organized by the National Mission for Clean Ganga.
In 2014, Clean Ganga Fund was also formed for cleaning up of the Ganga, setting up of waste treatment plants. This fund will also be used to finance National Mission for Clean Ganga (NMCG).
In 2017, the National Green Tribunal banned the disposal of any waste in the Ganga.

Namami Gange Programme:

Namami Gange Programme is an Integrated Conservation Mission, approved as a ‘Flagship Programme’ by the Union Government in June 2014 to accomplish the twin objectives of effective abatement of pollution and conservation and rejuvenation of National River Ganga.
It is being operated under the Department of Water Resources, River Development and Ganga Rejuvenation, Ministry of Jal Shakti.
The program is being implemented by the National Mission for Clean Ganga (NMCG),and its state counterpart organizations i.e State Program Management Groups (SPMGs).
- NMCG is the implementation wing of National Ganga Council (set in 2016; which replaced the National Ganga River Basin Authority – NGRBA).
It has a Rs. 20,000-crore, centrally-funded, non-lapsable corpus and consists of nearly 288 projects.
The main pillars of the programme are:
- Sewage Treatment Infrastructure
- River-Front Development
- River-Surface Cleaning
- Biodiversity
- Afforestation
- Public Awareness
- Industrial Effluent Monitoring
- Ganga Gram

The Ganga River System:

The Ganga is formed from the 6 headstreams and their five confluences.
The headwaters of the Ganga called the ‘Bhagirathi’ are fed by the Gangotri Glacier and joined by the Alaknanda at Devprayag in Uttarakhand.
At Haridwar, Ganga emerges from the mountains to the plains.
The Ganga is joined by many tributaries from the Himalayas, a few of them being major rivers such as the Yamuna, the Ghaghara, the Gandak and the Kosi.
Before entering the Bay of Bengal, the Ganga, along with the Brahmaputra, forms the largest delta of the world between the Bhagirathi/Hugli and the Padma/Meghna covering an area of 58,752 sq km.

3. Central Board of Direct Taxes (CBDT)

Subject – Economy

Context – Govt. extends deadline amid IT portal glitches.

Concept –

The Central Board of Direct Taxes is a statutory authority functioning under the Central Board of Revenue Act, 1963.
The officials of the Board in their ex-officio capacity also function as a Division of the Ministry of Finance dealing with matters relating to levy and collection of direct taxes.
The Central Board of Direct Taxes (CBDT) is a part of the Department of Revenue in the Ministry of Finance, Government of India.
It provides essential inputs for policy and planning of direct taxes in India and is also responsible for administration of the direct tax laws through Income Tax Department.
It is India’s official Financial Action Task Force unit.
The Central Board of Revenue as the Department apex body charged with the administration of taxes came into existence as a result of the Central Board of Revenue Act, 1924.
Initially the Board was in charge of both direct and indirect taxes. However, when the administration of taxes became too unwieldy for one Board to handle, the Board was split up into two, namely the Central Board of Direct Taxes and Central Board of Excise and Customs in 1964.
The CBDT Chairman and Members of CBDT are selected from Indian Revenue Service (IRS), a premier civil service of India, whose members constitute the top management of Income Tax Department.

Central Board of Indirect Taxes and Customs (CBIC):

The Central Board of Excise and Customs (CBEC) was renamed as the Central Board of Indirect Taxes and Customs (CBIC) in 2018 after the roll out of Goods and Services Tax (GST).
It deals with the tasks of formulation of policy concerning levy and collection of customs, central excise duties, Central Goods & Services Tax (CGST) and Integrated GST (IGST).

4. Insolvency and Bankruptcy Code

Subject – Economy

Context – Extend IBC provisions to InvITs: experts.

Concept –

It is a reform enacted in 2016. It amalgamates various laws relating to the insolvency resolution of business firms.
It lays down clear-cut and faster insolvency proceedings to help creditors, such as banks, recover dues and prevent bad loans, a key drag on the economy.

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.

The Insolvency and Bankruptcy Code (Amendment) Bill, 2019

The Bill amends the Insolvency and Bankruptcy Code, 2016. The Code provides a time-bound process for resolving insolvency in companies and among individuals.

Under the Code, a financial creditor may file an application before the National Company Law Tribunal (NCLT) for initiating the insolvency resolution process. The NCLT must find the existence of default within 14 days. Thereafter, a Committee of Creditors (CoC) consisting of financial creditors will be constituted for taking decisions regarding insolvency resolution. The CoC may either decide to restructure the debtor’s debt by preparing a resolution plan or liquidate the debtor’s assets.
The CoC will appoint a resolution professional who will present a resolution plan to the CoC. The CoC must approve a resolution plan, and the resolution process must be completed within 180 days. This may be extended by a period of up to 90 days if the extension is approved by NCLT.
If the resolution plan is rejected by the CoC, the debtor will go into liquidation. The Code provides an order of priority for the distribution of assets in case of liquidation of the debtor. This order places financial creditors ahead of operational creditors (e.g., suppliers). In a 2018 Amendment, home-buyers who paid advances to a developer were to be considered as financial creditors. They would be represented by an insolvency professional appointed by NCLT.
The Bill addresses three issues. First, it strengthens provisions related to time-limits. Second, it specifies the minimum payouts to operational creditors in any resolution plan. Third, it specifies the manner in which the representative of a group of financial creditors (such as home-buyers) should vote.
Resolution plan: The Code provides that the resolution plan must ensure that the operational creditors receive an amount which should not be lesser than the amount they would receive in case of liquidation. The Bill amends this to provide that the amounts to be paid to the operational creditor should be the higher of: (i) amounts receivable under liquidation, and (ii) the amount receivable under a resolution plan, if such amounts were distributed under the same order of priority (as for liquidation). For example, if the default were for Rs 1,000 crore and the resolution professional recovered Rs 800 crore, the operational creditor must at least get an amount which they would have received if Rs 800 crore have been obtained through liquidation proceeds.
Further, the Bill states that this provision would also apply to insolvency processes: (i) that have not been approved or rejected by the National Company Law Tribunal (NCLT), (ii) that have been appealed to the National Company Appellate Tribunal or Supreme Court, and (iii) where legal proceedings have been initiated in any court against the decision of the NCLT.
Initiation of resolution process: As per the Code, the NCLT must determine the existence of default within 14 days of receiving a resolution application. Based on its finding, NCLT may accept or reject the application. The Bill states that in case the NCLT does not find the existence of default and has not passed an order within 14 days, it must record its reasons in writing.
Time-limit for resolution process: The Code states that the insolvency resolution process must be completed within 180 days, extendable by a period of up to 90 days. The Bill adds that the resolution process must be completed within 330 days. This includes time for any extension granted and the time taken in legal proceedings in relation to the process. On the enactment of the Bill, if any case is pending for over 330 days, the Bill states it must be resolved within 90 days.
Representative of financial creditors: The Code specifies that, in certain cases, such as when the debt is owed to a class of creditors beyond a specified number, the financial creditors will be represented on the committee of creditors by an authorized representative. These representatives will vote on behalf of the financial creditors as per instructions received from them. The Bill states that such representative will vote on the basis of the decision taken by a majority of the voting share of the creditors that they represent.

5. Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act of 2002

Subject – Economy

Context – Extend IBC provisions to InvITs: experts

Concept –

Banks utilize Sarfaesi Act as an effective tool for bad loans (Non Performing Asset) recovery.
The Sarfaesi Act is effective only against secured loans where banks can enforce the underlying security.
Basically, the SARFAESI Act empowers financial institutions to ‘seize and desist’.
They should give a notice to the defaulting borrower asking to repay the amount within 60 days. If the debtor doesn’t comply, the bank can resort to one of the three following measures:

Take the possession of the loan security.
Sell or lease or assign the right over the security.
Manage the asset or appoint someone to manage the same.

Major feature of Sarfaesi is that it promotes the setting up of asset reconstruction companies (ARCs) and asset securitization companies (SCs) to deal with NPAs accumulated with the banks and financial institutions.
The Act provides three alternative methods for recovery of non-performing assets, namely:
- Securitisation – Securitization is the practice of pooling together various types of debt instruments (assets) such as mortgages and other consumer loans and selling them as bonds to investors.
- Asset Reconstruction – Asset reconstruction is the activity of converting a bad or non-performing asset into performing asset with the help of Asset reconstruction companies.
- Enforcement of Security without the intervention of the Court – If the borrower defaults, the bank may enforce security interests by:
  - Take possession of the security;
  - Sale or lease or assign the right over the security;
  - Appoint Manager to manage the security;
  - Ask any debtors of the borrower to pay any sum due to the borrower.

6. United Nations Convention on the Law of the Sea (UNCLOS)

Subject – IR

Context – China to require foreign vessels to report in ‘territorial waters’.

Concept –

The United Nations Convention on the Law of the Sea (UNCLOS) is an international treaty which was adopted and signed in 1982.
UNCLOS is the only international convention which stipulates a framework for state jurisdiction in maritime spaces. It provides a different legal status to different maritime zones.
It replaced the four Geneva Conventions of April, 1958, which respectively concerned the territorial sea and the contiguous zone, the continental shelf, the high seas, fishing and conservation of living resources on the high seas.
The Convention has created three new institutions on the international scene:
- the International Tribunal for the Law of the Sea
- the International Seabed Authority
- the Commission on the Limits of the Continental Shelf
UNCLOS as the currently prevailing law of the sea is binding completely.
There are 17 parts, 320 articles and nine annexes to UNCLOS
The law of the sea provides for full rights to nations for a 200-mile zone from their shoreline. The sea and oceanic bed extending this area is regarded to be Exclusive Economic Zone (EEZ) and any country can use these waters for their economic utilization.

7. Maritime Zones

Subject – IR

Context – China to require foreign vessels to report in ‘territorial waters’.

Concept –

Baseline – It is the low-water line along the coast as officially recognized by the coastal state.
Internal Waters:
- Internal waters are waters on the landward side of the baseline from which the breadth of the territorial sea is measured.
- Each coastal state has full sovereignty over its internal waters as like its land territory. Examples of internal waters include bays, ports, inlets, rivers and even lakes that are connected to the sea.
- There is no right of innocent passage through internal waters. The innocent passage refers to the passing through the waters which are not prejudicial to peace and security. However, the nations have the right to suspend the same.
Territorial Sea:
- The territorial sea extends seaward up to 12 nautical miles (nm) from its baselines.
- A nautical mile is based on the circumference of the earth and is equal to one minute of latitude. It is slightly more than a land measured mile (1 nautical mile = 1.1508 land miles or 1.85 km).
- The coastal states have sovereignty and jurisdiction over the territorial sea. These rights extend not only on the surface but also to the seabed, subsoil, and even
- But the coastal states’ rights are limited by the innocent passage through the territorial sea.
Contiguous Zone:
- The contiguous zone extends seaward up to 24 nm from its baselines.
- It is an intermediary zone between the territorial sea and the high seas.
- The coastal state has the right to both prevent and punish infringement of fiscal, immigration, sanitary, and customs laws within its territory and territorial sea.
- Unlike the territorial sea, the contiguous zone only gives jurisdiction to a state on the ocean’s surface and floor. It does not provide air and space rights.
Exclusive Economic Zone (EEZ):
- Each coastal State may claim an EEZ beyond and adjacent to its territorial sea that extends seaward up to 200 nm from its baselines.
- Within its EEZ, a coastal state has:
  - Sovereign rights for the purpose of exploring, exploiting, conserving and managing natural resources, whether living or nonliving, of the seabed and subsoil.
  - Rights to carry out activities like the production of energy from the water, currents and wind.
- Unlike the territorial sea and the contiguous zone, the EEZ only allows for the above-mentioned resource rights. It does not give a coastal state the right to prohibit or limit freedom of navigation or overflight, subject to very limited exceptions.
High Seas:
- The ocean surface and the water column beyond the EEZ are referred to as the high seas.
- It is considered as “the common heritage of all mankind” and is beyond any national jurisdiction.
- States can conduct activities in these areas as long as they are for peaceful purposes, such as transit, marine science, and undersea exploration.

8. South China Sea

Subject – IR

Context – China to require foreign vessels to report in ‘territorial waters’.

Concept –

South China Sea is an arm of western Pacific Ocean in Southeast Asia.
It is connected by Taiwan Strait with the East China Sea and by Luzon Strait with the Philippine Sea.
This sea holds tremendous strategic importance for its location as it is the connecting link between the Indian Ocean and the Pacific Ocean. (Strait of Malacca)
According to the United Nations Conference on Trade and Development (UNCTAD) one-third of the global shipping passes through it, carrying trillions of trade which makes it a significant geopolitical water body.

9. Strait of Malacca

Subject – IR

Concept –

Straits of Malacca is a narrow stretch of water, 580 mi (930 km) in length, between the Malay Peninsula (Peninsular Malaysia) and the Indonesian island of Sumatra.
As the main shipping channel between the Indian Ocean and the Pacific Ocean, it is one of the most important shipping lanes in the world.
It is named after the Malacca Sultanate that ruled over the archipelago between 1400 and 1511, the center of administration of which was located in the modern-day state of Malacca, Malaysia.
From an economic and strategic perspective, the Strait of Malacca is one of the most important shipping lanes in the world.

10. Israel

Subject – IR

Context – Israel strikes Gaza after balloon attack, clashes

Concept –

11. Powers of Reserve Bank of India

Subject – Economy

Context – RBI turns up the heat on errant banks, others.

Concept –

The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated.
Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India.
Reserve Bank derives extensive powers under RBI Act as well as Banking Regulation Act, to regulate and supervise various banks in India.

Powers –

Under Banking Regulation Act the RBI enjoys the following powers:

Section 10 BB – Power of Reserve Bank to appoint Chairman of the Board of Directors appointed on a whole-time basis or a Managing Director of a banking company.
Section 21 –Power of Reserve Bank to control advances by banking companies: Reserve Bank has the powers to determine policies and direct banking companies to follow the same.
Section 22 –Licensing of banking companies: All Banking companies need to get a licence from RBI and it issues licence only after ‘tests of entry’ are fulfilled.
Section 24A-Power to exempt a Co-operative bank: Without prejudice to the provisions of section 53, the RBI by notification in the Official Gazette, declare that, the whole or any part of the provisions of section 18 or section 24, as may be specified therein, shall not apply to any co-operative bank.
Section 27 –Monthly returns and power to call for other returns and information: At any time, the RBI may direct a banking company to furnish it with such statements and information relating to the business or affairs of the banking company (including any business or affairs with which such banking company is concerned) as RBI may consider necessary or expedient to obtain for the purposes of this Act, apart from calling for information every half-year regarding the investments of a banking company and the classification of its advances in respect of industry, commerce and agriculture.
Section 29A – Power in respect of associate enterprises: The RBI may direct a banking company to annex to its financial statements or furnish to it separately, within such time or intervals, necessary statements and information relating to the business or affairs of any associate enterprise of the banking company. It can also conduct an inspection of any associate enterprise of a banking company and its books of account jointly by one or more of its officers or employees or other persons along with the Board or authority regulating such associate enterprise.
Section 30 – Power to order Special audit: In the public interest or in the interest of the banking company or its depositors, the RBI may at any time by order direct that a special audit of the banking company’s accounts.
Section 35 – Inspection of Banking Companies: Reserve Bank on its own or being directed so to do by the Central Government, inspect any banking company and its books and accounts and supply to the banking company a copy of its report on such inspection.
Section 35A – Power of the Reserve Bank to give directions: In the public interest or in the interest of Banking policy RBI has powers to issue, modify or cancel as it deems fit, and the banking companies or the banking company, are bound to comply with such directions.
Section 36 – Further powers and functions of Reserve Bank: RBI may caution or prohibit banking companies or any banking company in particular against entering into any particular transaction or class of transactions.

In addition to the above, RBI also enjoys certain powers vis-a-vis banks under RBI Act as per the following table –

12. India’s Turning Point: How Climate Action Can Drive Our Economic Future

Subject – Environment

Context – ‘Climate action, a $11-tn opportunity for India’.

Concept –

India must act now to prevent the country losing $35 trillion in economic potential over the next 50 years due to unmitigated climate change, says a new report from the Deloitte Economics Institute.
The report, ‘India’s Turning Point: How Climate Action Can Drive Our Economic Future’, also reveals how the country could gain $11 trillion in economic value instead over the same period, by limiting rising global temperatures and realising its potential to ‘export decarbonisation’ to the world.
With no action taken on climate change, average global temperatures could rise by 3 degrees Celsius or more by the end of this century. This will make it harder for people to live and work, as sea levels rise, crop yields fall, infrastructure is damaged, and other challenges emerge, threatening the progress and prosperity that the nation has enjoyed in recent decades, said the report.

13. Nano-Technology

Subject – Science and Tech

Context – Nanotech opens up job options in a variety of industries.

Concept –

Nanotechnology primarily refers to the use and creation of particles that are smaller than 100 nanometre.
The Government of India launched the Nano Mission in 2007 as an umbrella capacity-building programme.
As a result of the efforts led by the Nano Mission, today, India is amongst the top five nations in the world in terms of scientific publications in nanoscience and technology.

Scope of application of nanotechnology in the development process of the country:

Agriculture: Nanotechnology can be used in agriculture and food production in the form of Nano sensors for monitoring crop growth and pest control by early identification of plant diseases.
Medical applications: Development of newer drug delivery systems based on nanotechnology methods is being tried for conditions like cancer, diabetes, fungal infections, and viral infections and in gene therapy. Nanotechnology has also found its use in diagnostic medicine as contrast agents, fluorescent dyes and magnetic nanoparticles.
Electronics: The semiconductor industry has been able to improve the performance of electronic systems for more than four decades by downscaling silicon-based devices.
Textiles and Clothing: Nanotechnology has shown a huge potential in the textile and clothing industry which is normally very traditional. Coating is a common technique used to apply Nano-particles onto textiles. The success of nanotechnology in textile applications lies in areas of durability, flexibility, wash ability and softness.
Energy equipment: Nanoscales and nanoporous membranes are being used to facilitate production of biomass fuel. Energy transmission could potentially be made much more efficient by using engineered nanomaterials.

14. Malaria

Subject – Science and Tech

Context – Genetically changed mosquitoes could transform Africa’s long fight against malaria.

Concept –

Malaria is a life threatening mosquito borne blood disease caused by plasmodium parasites.
It is predominantly found in the tropical and subtropical areas of Africa, South America as well as Asia.
The parasites spread through the bites of infected female Anopheles mosquitoes.
After entering the human body, parasites initially multiply within the liver cells and then attack the Red Blood Cells (RBCs) resulting in their rupture.
There are5 parasite species that cause malaria in humans, and 2 of these species – Plasmodium falciparum and Plasmodium vivax – pose the greatest threat.
Symptoms of malaria include fever and flu-like illness, including shaking chills, headache, muscle aches, and tiredness.
It is preventable as well as curable.

Efforts by India –

At the East Asia Summit in 2015,India pledged to eliminate the disease by 2030. Following this public declaration, India launched the five-year National Strategic Plan for Malaria Elimination.
This marked a shift in focus from malaria “control” to “elimination”. The plan provides a roadmap to achieve the target of ending malaria in 571 districts out of India’s 678 districts by 2022.