18 Jun 2020: UPSC Exam Comprehensive News Analysis

18 June 2020 CNA:- Download PDF Here

TABLE OF CONTENTS

A. GS 1 Related
B. GS 2 Related
INTERNATIONAL RELATIONS
1. Is China’s ‘peaceful development’ over?
2. North Korea vows to redeploy troops in Demilitarized Zone
C. GS 3 Related
ENVIRONMENT AND ECOLOGY
1. Assessment of OIL well blowout impact begins
ECONOMY
1. SEBI eases fund-raising norms for firms
2. RBI to tighten rules for home finance firms
D. GS 4 Related
E. Editorials
INTERNATIONAL RELATIONS
1. History, the stand-off, and policy worth rereading
2. Disorder at the border
HEALTH
1. A prescription of equitable and effective care
2. Maternal health matters
F. Prelims Facts
G. Tidbits
1. More drone pilot training schools in offing
2. AIIB clears $750-mn loan to India for COVID-19
3. Trump signs order on police reform
4. ‘Extraditions to China a possibility with HK law’
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions

2. North Korea vows to redeploy troops in Demilitarized Zone

Context:

  • North Korea has said that it has rejected a South Korean offer to send special envoys to ease escalating tension over defiance by North Korean defectors.
  • It said that it has stalled reconciliation efforts, and has vowed to redeploy troops to border areas.

Background:

  • North Korea recently blew up a joint liaison office set up on its side of the border as part of a 2018 peace agreement between the two countries’ leaders.

This topic has been covered in 17th June 2020 Comprehensive News Analysis. Click here to read.

Details:

  • A spokesman for the General Staff of the (North) Korean People’s Army said it would deploy troops to Mount Kumgang and Kaesong near the border, where the two Koreas had carried out joint economic projects in the past.
  • The spokesman also said police posts that had been withdrawn from the heavily fortified Demilitarized Zone (DMZ) would be reinstalled, while artillery units near the western sea border, where defectors frequently send propaganda leaflets drifting in balloons over North Korea, will be reinforced.
  • The North will also resume sending anti-Seoul leaflets across the border, he said.

Concerns:

  • Tensions have been rising with North Korea threatening to cut ties with South Korea and retaliate over North Korean defectors in the South sending propaganda leaflets into North Korea.
  • Any moves to invalidate cross-border peace deals pose a major setback to South Korea’s President Moon Jae-in’s efforts to foster more lasting reconciliation with the North.
  • They could also complicate efforts by U.S. President, to persuade North Korea to abandon its nuclear and missile programmes.

Demilitarised Zone:

  • The Korean Demilitarized Zone (DMZ) is a region dividing the Korean Peninsula into North Korea and South Korea.
  • The DMZ was created after the 1953 Korean War Armistice Agreement, which ended the Korean War.
  • Unlike its name, the DMZ is the world’s most heavily fortified border, guarded by mines, barbed-wire fences and combat troops on both sides.
  • The two sides remain technically at war, since fighting in the Korean War ended with an armistice in 1953 that was never replaced with a peace treaty.

Category: ECONOMY

1. SEBI eases fund-raising norms for firms

Context:

As per a gazette notification, SEBI has allowed companies to make two qualified institutional placements (QIPs) with a gap of just two weeks between them.

Details:

  • It is a part of SEBI’s attempts to make it easier for listed companies to raise funds in the current volatile scenario.
  • This allows listed companies to raise funds at shorter intervals while also giving promoters the go-ahead to increase their stakes by a higher quantum without triggering an open offer.
  • This is a significant move as the earlier regulations mandated a minimum gap of six months between two such issuances.
  • In another important amendment, the regulator has said that promoters can increase their stakes in their companies through preferential allotments by up to 10% without triggering an open offer.
    • The cap was earlier set at 5%.
    • The relaxation is only for the current financial year.
  • In April 2020, SEBI had relaxed certain regulatory requirements related to rights issues and initial public offerings (IPOs) to make it easier for companies to raise funds at a time when the COVID-19 pandemic had made the secondary markets increasingly volatile.
    • It had said that any listed entity with a market capitalisation of at least ₹100 crore could use the fast- track route for a rights issue. (Earlier, the norm was ₹250 crore for such offerings.)
    • Further, any company that had been listed for 18 months was permitted to raise funds through a fast- track rights issue. (The eligibility had earlier been set at three years.)
    • Also, the minimum subscription requirement to make an issue successful was lowered from the earlier 90% of the offer size to 75%.

Significance:

  • The recently announced measures along with the relaxation on rights issues, permitted earlier, are aimed at increasing liquidity for Indian companies.
  • Analysts opine that the twin moves would help in enhancing liquidity in the market.
  • The companies would be able to time fund-raising in a better manner.
  • Promoters can also acquire shares at a time when valuations were quite low compared with the historic highs.

2. RBI to tighten rules for home finance firms

Context:

The Reserve Bank of India (RBI) has proposed stringent norms for housing finance companies by mandating 75% of their home loans to individual borrowers by 2024.

Details:

  • A housing finance company is considered a non-banking financial company (NBFC) under the RBI’s regulations.
  • A company is treated as an NBFC if its financial assets are more than 50% of its total assets and income from financial assets is more than 50% of the gross income.
  • In the draft norms issued, the RBI proposed the definition of qualifying assets for housing finance companies (HFCs).
    • It said at least 50% of net assets should be in the nature of ‘qualifying assets’ for HFCs, of which at least 75% should be towards individual housing loans.
  • The RBI defined ‘qualifying assets’ as loans to individuals or a group of individuals, including co-operative societies, for construction/purchase of new dwelling units, loans to individuals for renovation of existing dwelling units, lending to builders for construction of residential dwelling units.
  • All other loans, including those given for furnishing dwelling units, loans given against mortgage of property for any purpose other than buying/construction of a new dwelling unit/s or renovation of the existing dwelling unit/s, will be treated as non-housing loans.
  • RBI said that an HFC could either undertake an exposure on a group company in real estate business or lend to retail individual homebuyers in the projects of group entities, but could not do both.
  • The central bank also proposed a minimum net-owned fund (NOF) of ₹20 crore as compared to ₹10 crore now.
    • Existing HFCs would have to reach ₹15 crore within a year and ₹20 crore within two years.

2. AIIB clears $750-mn loan to India for COVID-19

What’s in News?

Beijing-based Asian Infrastructure Investment Bank (AIIB) has approved a loan of $750 million for India to assist the government in its fight against COVID-19.

  • With this loan, AIIB’s total sovereign funding for India to mitigate the damage caused by the pandemic and related curbs has reached $1.25 billion.
  • The latest advance will be the second for India under AIIB’s COVID-19 Crisis Recovery Facility (CRF), which was created as part of the coordinated international response to counter the pandemic, to support AIIB members’ urgent economic, financial, and public health needs and quick recovery from the crisis.
  • Co-financed by the Asian Development Bank, the budgetary support will go towards bolstering economic aid for businesses, including for the informal sector, expanding social safety nets for the needy, and strengthening the country’s healthcare systems.

Note:

While AIIB does not have a regular instrument for policy-based financing, the bank is extending such loans on an exceptional basis under the CRF to support its members through projects co-financed with the World Bank or the ADB.

3. Trump signs order on police reform

What’s in News?

Following weeks of national protests since the death of George Floyd, President Donald Trump has signed an executive order he said would encourage better police practices. However, he made no mention of the roiling national debate over racism spawned by police killings of black people.

  • The executive order would establish a database that tracks police officers with excessive use-of-force complaints in their records. Many officers who wind up involved in fatal interactions have long complaint histories.
  • The order would give police departments a financial incentive to adopt best practices and encourage co-responder programmes, in which social workers join police when they respond to nonviolent calls involving mental health, addiction and homelessness issues.
  • As part of the order, the use of chokeholds, which have become a symbol of police brutality, would be banned except if an officer’s life is at risk.

4. ‘Extraditions to China a possibility with HK law’

What’s in News?

According to Hong Kong’s sole representative to Beijing’s top lawmaking body, China’s planned national security law for Hong Kong could allow for extraditions to the mainland.

  • The comments by the veteran pro-Beijing politician are significant because it was the threat of extradition to China’s party-controlled courts that ignited last year’s pro-democracy protests.
  • The city has been convulsed by a year of huge and often violent rallies that began with an eventually aborted criminal extradition bill but morphed into a popular call for democracy and police accountability.
  • Beijing says the new national security law is needed to end the political unrest and restore stability.
  • But critics see it as potential knock-out blow for Hong Kong’s cherished freedoms and autonomy.

This topic has been covered in 13th April 2019 and 23rd May 2020 Comprehensive News Analysis.

H. UPSC Prelims Practice Questions

Q1. Consider the following statements about Dibru-Saikhowa National Park:
  1. It is also a Biosphere Reserve situated on the south bank of the river Brahmaputra.
  2. The park is bounded by the Brahmaputra and Lohit Rivers in the north.
  3. It is an Important Bird Area (IBA) notified by the Bombay Natural History Society.

Which of the given statement/s is/are incorrect?

  1. 2 only
  2. 1 and 3 only
  3. 3 only
  4. None of the above
See
Answer
Q2. Consider the following statements with respect to Qualified Institutional 
Placements (QIPs):
  1. The QIP allows an Indian-listed company to raise capital from foreign markets without the need to submit any pre-issue filings to market regulators.
  2. QIPs are a way to issue shares to the public without the submission of pre-issue filings to SEBI.

Which of the given statement/s is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2
See
Answer
Q3. Consider the following statements with respect to Asian Infrastructure 
Investment Bank (AIIB):
  1. India is the second-largest shareholder in the bank, followed by Russia.
  2. All the G-20 nations are members of the AIIB.
  3. It is headquartered in Manila, Philippines.

Which of the given statement/s is/are correct?

  1. 1 only
  2. 2 and 3 only
  3. 1, 2 and 3
  4. 1 and 3 only
See
Answer
Q4. Consider the following statements:
  1. A housing finance company is considered a non-banking financial company (NBFC) under the RBI’s regulations.
  2. A company is treated as an NBFC if its financial assets are more than 50% of its total assets and income from financial assets is more than 50% of the gross income.

Which of the given statement/s is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2
See
Answer

I. UPSC Mains Practice Questions

  1. Assuring pregnant women access to safe birth and continuum of antenatal and postnatal care during the pandemic assumes great importance. Discuss the challenges involved and measures to be taken for the provision of health services to pregnant women and mothers. (15 Marks, 250 Words).
  2. Incidents in the recent past point to a newfound aggressiveness in China’s approach towards its already troubled neighbourhood and is an indication that China seems to have come out of its “peaceful rise” policy. Elucidate. (15 Marks, 250 Words).

Read the previous CNA here.

18 June 2020 CNA:- Download PDF Here

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