03 Jul 2018: UPSC Exam Comprehensive News Analysis

A. GS1 Related
B. GS2 Related
C. GS3 Related
ECONOMY
1. Mehta panel recommends setting up AMC for large, stressed loans
D. GS4 Related
E. Editorials
POLITY AND GOVERNANCE
1. How to list cases better?
EDUCATION
1. Reforming higher education
F. Tidbits
1. 2021 census data to be stored electronically
2. Kolkata’s eco-friendly buses a hit, say officials
3. 9 lakh saplings planted in Jharkhand green drive
4. Intellectual Property rules amended
5. Court notice on vacancies in information panels
6. Infrastructure sector growth dips to 10-month low of 3.6% in May
7. Manufacturing PMI at 53.1, highest since December
8. SC seeks steps for appointing Lokpal
G. Prelims Fact
1. Blacktip Shark
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions 

A. GS1 Related

B. GS2 Related

C. GS3 Related

• The Sunil Mehta Committee, set up to look into the faster resolution of stressed assets, has recommended the creation of an asset management company for the resolution of stressed loans worth more than Rs.500 crore.
• The committee had also laid out a plan to resolve SME loans within 90 days.

Five-pronged resolution

• The report comprises a bank-led resolution process and a five-pronged strategy to resolve stressed assets called Project Sashakt.
• The idea behind Project Sashakt is to ensure the operational turnaround of the banks and stressed companies so that the asset value is retained.
• The five-pronged resolution route — outlining an SME resolution approach, bank-led resolution approach, AMC/AIF led resolution approach, NCLT/IBC approach, and asset-trading platform — envisaged by the committee will be applicable to smaller assets with exposure up to Rs.50 crore, mid-size assets between Rs.50 crore and Rs.500 crore, and large assets with exposure of Rs.500 crore and more which have a potential for turnaround.
• The resolution route is also applicable to larger assets already before the National Company Law Tribunal (NCLT) and any other asset whose resolution is still pending.
• The process will cover both performing and non-performing assets.

Recommendations

• For the resolution of SMEs, the committee suggested the setting up of a steering committee by banks for formulating and validating the schemes, with a provision for additional funds.
• The resolution should be complete within 90 days. The committee suggested that the resolution of these assets be under a single bank’s control, with the bank having the liberty to customise it.
• For loans between Rs.50 crore and Rs.500 crore, the committee called for a bank-led resolution approach, with the resolution being achieved in 180 days.
• The resolution plan has to be approved by lenders holding at least 66 per cent of the debt.
• The independent steering committee appointed by the Indian Banks Association (IBA) has to validate the process within 30 days.
• In this category, the key challenge would be to arrive at a consensus, as the exposure is held by multiple banks/lenders.
• In light of this, the committee recommended that such lenders enter into an inter-creditor agreement to authorise the lead bank to implement a resolution plan in 180 days.
• The lead bank would then prepare a resolution plan including empanelling turnaround specialists and other industry experts for operational turnaround of the asset.
• In addition, the committee had recommended the setting up of a robust monitoring and review mechanism to track resolution with clear escalation metrics for breached timelines.
• For loans above Rs.500 crore, an independent asset management company (AMC) will be set up.
• The committee also said an alternative investment fund (AIF) would raise funds from institutional investors.
• Banks would be given an option to invest in this fund if they wish. AIFs can also bid for assets in NCLT.
• The lead bank can discover price discovery through the open auction route. Security receipts have to be redeemed within 60 days.

Significance

• The recommendations are fully compliant with RBI regulations and there is no proposal to create a bad bank.
• The resolution process suggested by the committee will help bring in credible long-term external capital to limit the burden on the domestic banking sector while ensuring robust governance and credit architecture to prevent a similar build-up of non-performing loans in the future.

D. GS4 Related

E. Editorials

Why this issue is in the news?

• Chief Justice of India Dipak Misra recently flagged rising pendency in appeals lying with High Courts based on the findings of the Supreme Court’s Arrears Committee.
• He has since directed High Courts to prepare action plans for disposal of five and 10-year-old cases. He has also asked for High Court Arrears Committees to periodically review the situation.

Analysis of the news

• While it is crucial that a disposal review mechanism is put in place, the manner in which judicial performance is measured and accountability is exercised must be carefully revisited.
• For decades, the primary measure of court efficiency has been case disposal rates. Public perception of court performance and individual judges now hinges on the number of cases pending before them.
• Though a crucial indicator, it also puts pressure on judges to dispose of as many cases as possible, a problematic situation as it does not consider the quality of adjudication itself.

Solutions

• To begin with, courts themselves must start analysing historical case data and introduce focussed interventions to counter specific case types or stages at which the case pipeline is clogged. Here, courts must assess their performance based on the actual number of cases being heard.
• Cause List preparation can be made more scientific if supported by a consistent study of the variance in the number of cases listed across courts, identifying the exact stages at which cases are clogging the pipeline for the longest duration, and the nature of cases left over. This will also ensure that only as many cases as can be reasonably heard will be listed on a daily basis.
• The cause list should have cases methodically distributed by type and stage. The court can decide on a minimum and maximum number for particular matters.
• The disposing of old and pending matters must be prioritised. Despite allotting two days in week to hearing these matters for most of the day, the High Courts had a massive docket of old pending cases. A solution would be to implement a policy where no adjournments are granted for frivolous reasons.
• It is time that the judiciary as an institution opens itself to the services of competent external agencies that can help them record, manage and analyse their data better, to build and sustain a healthy institution.

Are you curious to know more?

What are Causelists?

• The Causelists are schedule of cases to be heard by the courts on the following day(s).
• Every court must have a causelist for each working day.
• The Causelists give details such as the Court Number, the bench dealing with the cases and the case details like case number, petitioner/respondent, respective advocates, etc.

Benefits of Scientific listing

• It will introduce standardisation across courts and help disincentivise judges from using discretionary practices in the number and nature of cases listed before them.
• It will promote fairness — a reasonable number of cases would be listed every day, and distributed across the day based on stage and case type.

Why this issue is in the news?

• The draft Higher Education Commission of India (HECI) Bill is now in the public domain.
• The HECI will replace the main regulatory authority, the University Grants Commission (UGC), to provide for more autonomy and facilitate holistic growth of this sector and offer greater opportunities to Indian students at more affordable cost.

HECI

• HECI will be the new, apex regulator for university and higher education in India.
• The focus of HECI will be on improving academic standards and the quality of Higher Education.
• Its board will have senior bureaucrats from the ministries of HRD, skills and entrepreneurship, and science and technology, in a way ending the monopoly of HRD ministry in regulating higher education.
• The commission shall consist of a chairperson, vice chairperson and 12 members to be appointed by the central government.

Need for HECI

• Several committees like Yash Pal committee, National Knowledge Commission and the Hari Gautam committee have recommended a single education regulator to rid higher education of red tape and lethargy.
• UGC remained preoccupied with disbursing funds to institutes and was unable to concentrate on mentoring the institutes, focussing on research to be undertaken etc.

Analysis of the issue

• The main point of departure in the proposed Bill is a clear separation between academic functions and grant-giving ones, the former to be discharged by the HECI and the latter by the Ministry of Human Resource Development (MHRD) directly.
• The academic functions include promoting the quality of instruction and maintenance of academic standards, as also fostering the autonomy of higher education institutions for, inter alia, comprehensive and holistic growth of education and research in a competitive global environment in an inclusive manner.
• The regime of multiple regulators started in the mid-1980s and various professional bodies also started asserting themselves as regulators from around the early 1990s when the country embraced the new challenges of liberalisation, privatisation and globalisation. This was also the period that marked a galloping growth of the sector with the setting up of many private universities. The response of the government, arguably, was to meet the emerging challenges.
• It can be observed that the heavy hands of multiple regulators (like the UGC and All India Council for Technical Education), together with the empowerment of professional bodies (like the Bar Council of India and Council of Architecture) have not yielded the desired dividends.
• On the one hand, the HECI is being conceived as an overarching regulator (albeit without the teeth of funding function), and on the other it is sought to develop mechanisms so that more institutions are encouraged to move out of its regulatory ambit.

Conclusion

• Despite some apparent infirmities, the proposed Bill shows the resolve of the government to move forward in reforming the sector.
• While many questions remain unanswered, the proposal appears to be a plausible one, if the public expenditure in the sector continues to hover around the present level of over 1% of GDP, against the minimum requirement of 2%.
• Major issues like making the universities the hub of scientific and technological research, restoring the value of education in social sciences and the humanities, ensuring that poor and meritorious students can afford to be educated in subjects of their choice, improving the quality of instruction to enhance the employability of the students, addressing the concerns of faculty shortage, etc. require a quantum jump in allocation of public resources to this sector.

F. Tidbits

• The data collected during the 2021 Census will be stored electronically, the first time since the decennial exercise was conducted in 1951 in Independent India.
• The RGI issued the notification as the process for the 2021 Census kicks in.
• According to an amended rule notified by the Registrar-General of India, the schedules and other connected papers shall be disposed of totally or in part by the Director of Census Operations, after creating an electronic record of such documents.

Old practice

• Till now the schedules (a tabular form containing details of individuals), carried by enumerators to households, were being stored in a physical form at the government’s storehouse in Delhi.
• It is based on these schedules that the relevant statistical information on population, language and occupation are sorted and published.
• An individual’s household data are not published by the RGI. They are published in the form of tables on the Census website. The data are preserved for 10 years and then destroyed.

New format

• The records, running into crores of pages, were occupying space in government office and it has now been decided that they will be stored in an electronic format.
• The electronic record has been given the status of a document under the IT Act, 2000 so that if there is any infringement action can be initiated.
• From now on, it can be stored forever in an electronic format.

• Kolkata’s first eco-friendly buses, powered solely by battery, crossed 10,000 footfalls.
• As of now, only three air-conditioned, zero-emission buses are operational in Kolkata.
• The buses, launched in May, do not have diesel engines and run on battery banks which are regularly charged at special charging stations.
• Unlike diesel-powered buses, the battery-powered ones do not release harmful fumes and are pollution-free.
• The drivers are especially trained to operate battery-powered buses, while the vehicles are entirely conductor-free.
• The driver issues a printed ticket and a turnstile gets unlocked, allowing the passengers into the seating area.

• Nine lakh saplings were planted across 24 river banks in the State as part of the Jharkhand government’s initiative to protect the environment.
• The green drive would save the river banks from erosion and retain moisture in the ground.

• The Union Ministry of Finance has amended Intellectual Property rules to revoke the power vested with Customs authorities to seize imported products based on complaints of patent infringement.

The amendments

• The Ministry made two amendments to the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.
• Firstly, the Intellectual Property Rights (Imported Goods) Enforcement Amendment Rules, 2018, omits all reference to the Patents Act, 1970.
• Another amendment incorporates further conditions that oblige the right-holder to notify the Commissioner of Customs of any amendment, cancellation, suspension or reaction that concern Intellectual Property rights, and require the Customs authorities to accordingly amend, suspend or cancel the corresponding protection provided by them.

Background

• In the past, mobile phone companies have faced issues because of the earlier rules.
• For instance, in 2007, Madurai-based Ramkumar, who held a patent for a dual SIM, sought seizure of products imported by Samsung and Spice Mobile, which affected several importers.

• The Supreme Court directed the Centre and eight State governments to respond to a petition highlighting that a large number of vacancies in the Central Information Commission and the State Information Commissions have crippled the Right to Information Act and resulted in a huge backlog.
• A Bench led by Justice A.K. Sikri issued a notice to the Centre and Maharashtra, Kerala, Andhra Pradesh, West Bengal, Telangana, Karnataka, Odisha and Gujarat.

Petition

• The effective functioning of information commissioners, the final adjudicators under the RTI Act, is critical for the health of the transparency regime in the country, the petition said.
• The petition said that due to non-appointment of information commissioners, several information commissions take many months, and in some cases even years, to decide on appeals and complaints due to accumulation of pending appeals/complaints, defeating the entire object of the RTI Act, 2005.

Stats

• Currently, there are four vacancies in the Central Information Commission, though more than 23,500 appeals and complaints are pending.
• The Andhra Pradesh Commission is completely non-functional as not a single information commissioner has been appointed.
• The Maharashtra Commission which has a backlog of more than 40,000 appeals and complaints, has four vacancies.
• The Kerala Commission is functioning with only a single commissioner and has more than 14,000 pending appeals and complaints.
• Similarly, there are six vacancies in the Karnataka Commission even though nearly 33,000 appeals and complaints are pending.
• Odisha is functioning with only three commissioners and Telangana with two commissioners and their backlogs are more than 10,000 and 15,000 appeals/complaints, respectively.
• The West Bengal Commission is functioning with only two commissioners and is currently hearing appeals/complaints filed 10 years ago.

• The growth in eight infrastructure industries dropped to a 10-month low of 3.6% in May due to a decline in production of crude oil and natural gas.
• The eight sectors, which also include coal, refinery products, fertilizers, steel and cement, had expanded by 3.9% in May 2017, according to the data released by the Ministry of Commerce and Industry.
• This is the lowest growth rate since July 2017 when infrastructure industries had expanded by 2.9%.
• Crude oil and natural gas registered a contraction of 2.9% and 1.4% respectively in May compared with the same period a year earlier.
• However, the output for both coal and fertilizer grew by 12.1% and 8.4% respectively, in May over the year-earlier period.
• In April and May this year, the eight industries recorded 4.1% growth compared with 3.3% a year earlier.

7. Manufacturing PMI at 53.1, highest since December

• Manufacturing activity saw its best performance in six months in June, due to strong output levels and new order numbers, according to a private sector survey.
• The Nikkei India Purchasing Managers’ Index recorded a reading of 53.1 in June, compared to 52.2 in May.
• A reading over 50 indicates expansion, while one below 50 denotes a contraction.
• The report said that the expansion in output was bolstered by a surge in new orders, which also increased due to an increase for the eighth consecutive month of overseas orders.

• The Supreme Court asked the government to file an affidavit, detailing the steps it would take for the appointment of Lokpal, the anti-graft ombudsman.
• It has been constantly urging the government to complete the process of appointment at the earliest.

Background

• Passed in 2014, the Lokpal and Lokayukta Act, 2013, was not implemented all these years because there was no Leader of the Opposition (LoP) in the 16th Lok Sabha.
• The 2013 law includes the LoP as a member of the selection committee.
• The Act intends the LoP to be part of the selection committee, which has to first appoint an eminent jurist among their ranks.
• However, last year, the Supreme Court clarified that the appointment process need not be stalled merely because of the absence of the LoP.
• The judgment dismissed the government’s reasoning that the appointment process should wait till the Act was amended to replace the LoP with the leader of the single largest Opposition party.
• Besides the Prime Minister, the selection committee is composed of the Chief Justice of India and the Lok Sabha Speaker.

G. Prelims Fact

• It is common to coastal tropical and subtropical waters around the world, including brackish habitats.
• The blacktip shark has a stout, fusiform body with a pointed snout, long gill slits, and no ridge between the dorsal fins.
• Most individuals have black tips or edges on the pectoral, dorsal, pelvic, and caudal fins.
• Blacktip sharks can grow up to eight feet long and weigh up to 100 kg.
• Targeted by commercial fisheries, the blacktip is classified as near threatened by protection group the International Union for Conservation of Nature (IUCN).

H. Practice Questions for UPSC Prelims Exam

Question 1. Consider the following statements with respect to the National Human Rights
Commission of India:

Question 2. Consider the following statements with respect to the Right to Equality:

Question 3. Article 20 deals with protection with respect to the conviction for offences. 
Which of the following provisions are included in it?

Question 4. What are applications of cryogenics which is the study of the production and 
behaviour of materials at very low temperatures?

I. UPSC Mains Practice Questions

1. The draft Higher Education Commission of India (HECT) Bill has proposed a new commission which is to provide for more autonomy and facilitate holistic growth of the education sector. Critically analyse HECT Bill in light of the above statement.

Also, check previous Daily News Analysis