18 Jun 2018: UPSC Exam Comprehensive News Analysis

 TABLE OF CONTENTS

A. GS1 Related
B. GS2 Related
GOVERNANCE
1. Ceasefire ends, ops against J&K militants to resume
2. PM renews call for debate on simultaneous polls
3. Naidu raises Special Category Status issue at the meeting
4. Govt. to study impact of its ads
HEALTH
1. New health scheme flawed: IMA
C. GS3 Related
INTERNAL SECURITY
1. Battle ready: Dhanush artillery gun clears final trials
ECONOMY
1. MCLR, base rate merger proves elusive
2. New auto policy may be finalised in three months
3. Panel identifies 6,000 Mhz spectrum for 5G services
4. EV transformation to impact auto part suppliers: report
D. GS4 Related
E. Editorials
ECONOMY
1. India’s water crisis
2. Solace for homebuyers
F. Tidbits
G. UPSC Prelims Practice Questions
H. UPSC Mains Practice Questions 

A. GS1 Related

Nothing here for today!!!

B. GS2 Related

Category: GOVERNANCE

1. Ceasefire ends, ops against J&K militants to resume

 

  • Union Home Minister Rajnath Singh said that the government has decided not to extend the suspension of operations (SoO) in Jammu and Kashmir and that operations against terrorists would resume.
  • The SoO was announced on May 16, when the month of Ramzan started. The prime reason for the decision was the enhanced threat to the Amarnath yatra that commences on June 28.
  • Interestingly, the government had made up its mind not to extend the SoO last week itself when it reviewed the security preparedness for the yatra. The assassination of Rising Kashmir Editor Shujaat Bukhari only firmed up the decision.
  • There were multiple incidents reported in the month of Ramzan.
  • Last year, eight persons were killed when a bus carrying pilgrims from Gujarat was attacked by Lashkar-e-Taiba militants.
  • Both the separatists and the militant leadership in Kashmir had rejected the Centre’s gesture to stop counter-insurgency operations, saying it’s not serious to address the Kashmir problem.
  • The Congress claimed the situation in J&K has slipped back to the 1990s.
  • The heightened militant activities during the ceasefire period left 51 people dead in the Valley, including 20 militants and 13 civilians.
  • Eighteen security personnel also died as militants resorted to firing, used improvised explosive devices and set off over 20 grenade explosions.

2. PM renews call for debate on simultaneous polls

 

  • Prime Minister Narendra Modi again called for widespread consultation on simultaneous elections in the country during the fourth governing council meeting of the NITI Aayog.
  • The Prime Minister called for widespread debate and consultations on simultaneous elections to the Lok Sabha and the Vidhan Sabhas, keeping in view aspects such as the resulting financial savings and better utilisation of resources.

3. Naidu raises Special Category Status issue at the meeting

Andhra Pradesh Chief Minister N. Chandrababu Naidu raised several pending issues, including the Special Category Status (SCS), at the fourth NITI Aayog Governing Council meeting in Delhi on Sunday with Prime Minister Narendra Modi in the Chair.

List of demands

  • Clarification on the bifurcation-related SCS, construction of a capital city, Polavaram project, Revenue deficit, Pull back of Rs. 350 crore relating to the backward areas development fund,
  • Railway zone, establishment of greenfield crude oil refinery petrochemical complex, increase of seats in the Assembly, resolving anomalies in the taxation matters, construction of a steel plant at the YSR Kadapa district,
  • Establishment of the Vizag-Chennai Industrial Corridor, the Visakhapatnam and the Vijayawada metro rail, the Dugarajapatnam port, establishment of a Greyhound Training Centre.

Explaining how his State was lagging in terms of development compared to other southern States, he said the per capita income of the combined State of Andhra Pradesh was Rs. 89,214 for 2013-14 while that of the remaining 13 districts for the same period stood at Rs. 82,870 against Rs. 1,12,162 for Telangana.

4. Govt. to study impact of its ads

 

  • The Information and Broadcasting Ministry plans to conduct an independent study to gauge the impact of government advertisements on people, a move aimed at drawing up a strategy for the judicious use of money for publicity.
  • The initiative comes ahead of the Lok Sabha election in 2019 for which the government is expected to reach out to the people and highlight the works done by it in the past four years.
  • The Directorate of Advertising and Visual Publicity (DAVP) is the nodal agency of the government for advertising on behalf of various Ministries, departments, public sector firms and autonomous organisations it funds. The advertisements are carried on various platforms, including print and visual media.
  • Sources said the study would help the government understand which medium to use for publicising a particular scheme for better impact.
  • Last year, the DAVP was merged with the Directorate of Field Publicity and Song and Drama Division to form a new entity — Bureau of Outreach Communication — for bringing in synergy for efficient publicity works of the government.

Category: HEALTH

1. New health scheme flawed: IMA

 

  • The Indian Medical Association (IMA) has demanded a review of the Centre’s ambitious National Health Protection Scheme (NHPS), saying it has conceptual deficits and operational flaws.
  • The doctors’ body said the rates quoted by the government for various procedures were abysmal and impractical and most do not cover even 30% of the costs.
  • The IMA has demanded that the costing be transparent and in the public domain.
  • The association said the money allotted for the Ayushman Bharat-National Health Protection Scheme (AB-NHPS) would have better served the country if every district hospital was strengthened with an infrastructure of Rs. 2 crore each.
  • IMA members said apart from such conceptual deficits, the operational flaws of the scheme would ensure it is a non-starter.
  • The IMA said the current policy change in India would only end up strengthening the insurance business.
  • The IMA has suggested to the government that the NHPS be modelled as healthcare purchase directly from the provider hospitals, removing insurance companies and third party administrators.
  • Twenty States have so far signed MoUs with the Union Health Ministry to implement the government’s ambitious health protection mission, aiming to provide a cover of Rs. 5 lakh per family.

C. GS3 Related

Category: INTERNAL SECURITY

1. Battle ready: Dhanush artillery gun clears final trials

 

  • The indigenously upgraded artillery gun Dhanush has successfully completed final user trials and is ready for induction into the Army.
  • Dhanush is an upgraded version of the Swedish Bofors gun procured by India in the mid- 1980s.
  • During the trials, the guns travelled extensively in towed/ self-propelled mode in desert and high-altitude terrains with each gun clocking over 1,000 km, demonstrating their mobility.

Category: ECONOMY

1. MCLR, base rate merger proves elusive

 

  • Millions of customers are paying higher interest rates on home and auto loans, among others, in effect ensuring that public sector banks avoid further losses.
  • This is because the Reserve Bank of India (RBI) is yet to mandate banks to allow customers who signed up for loans in the erstwhile ‘Base Rate’ regime and who are paying higher rates, to shift to the current ‘MCLR’ structure, which is lower than the base rate.
  • An internal study by the banking regulator has found that if banks offer their customers a lower interest rate, public sector banks will incur a whopping Rs. 40,000 crore loss.
  • Public sector banks have reported huge losses in the previous financial year. Asking them to shift their customers to MCLR could impact their interest income further.
  • State-run banks are already reeling under huge losses due to a rise in non-performing loans. Nineteen of India’s 21 state-run lenders reported losses in 2017-18, wiping out almost all of the government’s capital injections during the year.
  • Base rate is the erstwhile loan pricing mechanism which was replaced by MCLR — the Marginal Cost of funding based Lending Rate — from April 1, 2016.
  • The one-year MCLR of banks, to which a bulk of the loan rates are linked, is lower than the base rate. For example, SBI’s base rate is 8.7% while its one-year MCLR is 8.25% — a difference of 45 basis points.
  • According to the RBI’s own assessment, ‘a large proportion’ of loans is still linked to the base rate. A base rate customer can shift to the MCLR only by paying a fee.
  • On February 7, in the sixth bimonthly policy review of 2017-18, RBI had said the base rate would be linked to MCLR from April 1.
  • With the introduction of MCLR, it was expected that the existing base rate-linked credit exposures shall also migrate to MCLR system.
  • It is observed, however, that a large proportion of bank loans continue to be linked to the base rate despite the Reserve Bank highlighting this concern in earlier monetary policy statements.
  • Since MCLR is more sensitive to policy rate signals, it has been decided to harmonise the methodology of determining benchmark rates by linking the base rate to the MCLR with effect from April 1, 2018.
  • Necessary instructions will be issued by the end of next week. Instructions to the effect have not yet been issued.

2. New auto policy may be finalised in three months

 

  • The new National Auto Policy, which may seek emission-linked taxation on automobiles and a technology- agnostic green mobility roadmap, is likely to be finalised in the next three months, according to official sources.
  • Discussions with various stakeholders have been on for the past six months to frame the new policy, which envisages having a single nodal regulatory body for the automobile industry, officials in the Heavy Industry Ministry said.
  • A draft cabinet note on the policy is being prepared and will be circulated shortly among departments concerned, they disclosed.
  • In terms of emission, it has been suggested to have a comprehensive long-term plan with definite time-lines under the new auto policy, the source added.
  • The draft of the policy released earlier had recommended rationalisation of the GST structure for automobiles that is currently based on length, engine displacement, engine type and ground clearance.
  • It had called for replacing the current classification criteria with a composite criterion based on vehicle length and CO2 emissions.
  • The draft policy had recommended that vehicle length-based classification will target reduction in vehicular congestion and CO2 emissions based classification will align with the overall vision of green mobility and reduction in green house gas(GHG) emissions.

The policy is expected to define thresholds for length and CO2 emissions with the objective of neutralising the impact on GST revenue.

3. Panel identifies 6,000 Mhz spectrum for 5G services

 

  • The 5G committee of the Telecom Ministry has said that about 6,000 Mhz of spectrum can be made available without delay for the next generation mobile service.
  • If accepted, the panel’s recommendation, can lead to India’s largest-ever spectrum allocation for a service.
  • Initially the service would enhance mobile data speed in India by up to 50% compared with the current levels.
  • MIMO wireless communications, a technology break through that enables improved wireless performance. MIMO, is now incorporated into all new wireless systems. The Department of Telecom (DoT) is taking a strong initiative to make spectrum available for the new service.
  • As much as 2,354.55 megahertz (MHz) of frequencies valued at about Rs. 5.63 lakh crore were put up for grabs in country’s largest-ever auction held in 2016.
  • At present, mobile phone signals in the country are transmitted in 800 Mhz to 2,600 Mhz band.

Eleven bands

  • Now, the panel has spotted spectrum for 5G service across 11 bands of which four bands — premium 700 Mhz band, 3.5 gigahertz (Ghz), 24 Ghz and 28 Ghz band — can be made immediately available for the service.
  • The panel estimates that 5,250 megahertz of spectrum can be made available for 5G services in higher frequency bands.

4. EV transformation to impact auto part suppliers: report

 

  • A transformational shift is expected with the deployment of electric vehicles (EV) in India, significantly impacting existing automobile parts suppliers who will face severe competition from new entrants like technology firms and battery makers, according to an EY report.
  • From the perspective of component suppliers, large players are likely to adapt to the dramatic changes, however, small firms could be hit the hardest by this disruption.
  • It also pointed out to the urgent need for investment in domestic R&D and manufacturing capabilities to address the issue of absence of an EV supply chain.
  • The growth of EVs will lead to profound changes in the automotive value chain, including technology, manufacturing systems, ownership models, distribution and aftermarket support.
  • Explaining why such a scenario is expected, it further said an EV is relatively simpler to build with only 20 moving parts against around 2,000 in an ICE (internal combustion engine) vehicle.
  • This would have a significant impact on the incumbent automakers while also disrupting the supplier ecosystem on the back of a major decrease in the addressable market for vehicle repairs/service and would require them to build new capabilities, it added.
  • This transformational shift is expected to have significant implications for the existing supply chain as well.
  • From the perspective of component suppliers, large automotive suppliers are likely to adapt to the dramatic changes; however, small players could be hit the hardest by this disruption.

D. GS4 Related

Nothing here for today!!!

E. Editorials

Category: ECONOMY

1. India’s water crisis

 

  • India’s water crisis is clear and present, with implications for the health of the entire population.
  • According to the Composite Water Management Index developed by Niti Aayog, 70% of the water resources are identified as polluted.
  • This is based primarily on data supplied by States for calculating the index.
  • If the water accessible to millions is contaminated, the problem is infinitely worse than that of availability.
  • The system of ratings for States is based on their performance in augmenting water resources and watersheds, investing in infrastructure, providing rural and urban drinking water, and encouraging efficient agricultural use.
  • It presumes that this ‘hall of fame’ approach will foster “competitive and cooperative federalism”.
  • What emerges from the early assessment is that States such as Gujarat, Madhya Pradesh, Andhra Pradesh, Karnataka, Maharashtra, Punjab and Telangana have initiated reforms for judicious water use, while populous ones such as Uttar Pradesh and Bihar have failed to respond to the challenge.
  • Tamil Nadu, which has a middling score, does well on augmentation of water sources, but is abysmally poor in ensuring sustainable use for farming.
  • The trends that the data reflect of high to extreme stress faced by 600 million people call for speedy reforms.
  • Two areas that need urgent measures are augmentation of watersheds that can store more good water, for use in agriculture and to serve habitations, and strict pollution control enforcement.
  • In this context, the Committee on Restructuring the Central Water Commission and the Central Ground Water Board, chaired by Mihir Shah, has called for a user-centric approach to water management, especially in agriculture.
  • It advocates decentralisation of irrigation commands, offering higher financial flows to well-performing States through a National Irrigation Management Fund.
  • Clearly, awarding an index rank should help advance such schemes, making States feel the need to be competitive.
  • Yet, such approaches may not resolve seemingly intractable inter-State river disputes.
  • As the Cauvery issue has demonstrated, State governments would rather seek judicial intervention than be accused of bartering away the rights to a precious resource under a shared, cooperative framework.
  • Groundwater extraction patterns need to be better understood through robust data collection; less than 5% of about 12 million wells are now under study.
  • Steady urbanisation calls for a new management paradigm, augmenting sources of clean drinking water supply and treatment technologies that will encourage reuse.
  • Pollution can be curbed by levying suitable costs. These forward-looking changes would need revamped national and State institutions, and updated laws.
  • A legal mandate will work better than just competition and cooperation; it would make governments accountable.

2. Solace for homebuyers

 

  • The Insolvency and Bankruptcy Amendment (Ordinance) Act, 2018, received the President’s assent on June 6.
  • The amendment to the Code was brought about with a view to balance the interests of various stakeholders, especially the interests of home buyers.
  • In the context of insolvency proceedings of a company involved in real estate development, this ordinance benefits homebuyers by treating such buyers as financial creditors under the Code.
  • Prior to the amendment, homebuyers were neither treated as financial creditors nor as operational creditors but as an ‘unsecured creditor’, because of which they were not able to initiate insolvency proceedings against a defaulting developer.
  • In case of a developer facing liquidation, as per the liquidation waterfall, homebuyers would get only the balance proceeds after paying off insolvency costs, workmen dues, financial creditors and government dues.

Post-amendment

  • By virtue of the amendment, homebuyers are now classified as an ‘allottee’ under a ‘real estate project’. The two terms have their respective meanings as defined under Real Estate (Regulation and Development) Act, 2016 (RERA).
  • Any amount raised from an allottee under a real estate project is deemed to be an amount having the commercial effect of a borrowing.
  • Therefore, under the Code, the amounts paid by homebuyers to a developer will be treated as financial debt and homebuyers will be categorised as financial creditors.
  • In the position of a financial creditor, homebuyers can jointly or individually file a petition to initiate insolvency proceedings against a defaulting developer company.

Default defined

  • Though the amendment has classified the homebuyer as a financial creditor, the definition of the term ‘default’ vis-à-vis a homebuyer has not been amended. Hence, to detect when the default has occurred, we will have to take recourse to RERA.
  • Section 18 of RERA provides a choice to homebuyers to either choose the possession of a house or to seek a refund.
  • The section, among other things, states that a developer is liable to refund the amount received by him in respect of the apartment, with interest, or he must pay interest for every month of delay till possession is handed over, on demand by the allottee.
  • The section further contemplates compensation to be paid to homebuyers in cases where the real estate project has a defective title or the developer fails to discharge his obligations under RERA.
  • Notifications to the rules by States add to the clarity. For example, Rule 19 of the Tamil Nadu Real Estate (Regulation and Development) Rules, 2017, prescribes the timelines for refund, and lays down that the refund shall be given by the developer within 90 days from the date on which it becomes due.

Therefore, a default could be said to occur on the completion of 90 days from date of demand of refund or interest becoming due.

Financial debt

  • The term ‘financial debt’ as defined under the Code has been amended to include any amount raised by a developer from an allottee under a real estate project and these amounts are deemed to have the commercial effect of a borrowing.
  • Therefore, transactions entered into by homebuyers with developers would fall under the definition of ‘financial debt’ and the default contemplated under RERA will entitle home buyers to initiate proceedings under the Code.
  • After the initiation of the insolvency proceedings against the developer, the homebuyer can submit his claim to the appointed interim resolution professional.
  • Also, homebuyers as a class of creditors can be represented through an authorised representative at the meetings of the Committee of Creditors.
  • Though the objective of the legislation is resolution and not recovery, it is possible for the real estate developer company to go under the process of liquidation.
  • In such a case, the position of the homebuyer in the liquidation waterfall has been elevated, where they would be treated on par with other financial creditors.

Nothing here for today!!!

F. Tidbits

Nothing here for today!!!

G. Practice Questions for UPSC Prelims Exam

Question 1. Which of the following is not a feature of MIMO?
  1. It is a latest technological development in communcation.
  2. It can receive and transmit multiple signals at a time.
  3. It stands for Multiple In Multiple Out.
  4. None of the above

 

See

Answer
Question 2. Which of the following can be stated as the reasons for the advocating the holding of simultaneous elections?
  1. Reduction in Expenditure.
  2. Reduction in the malfunctioning of EVMs .
  3. Increase in uniformity of election procedure.

Choose the correct option:

  1. 1 and 3 only
  2. 1 and 2 only
  3. 2 and 3 only
  4. All of the above

 

See

Answer
Question 3. Consider the following statements regarding MCLR and Base Rate:
  1. MCLR is always lesser than Base Rate.
  2. MCLR is less responsive to changes in policy rates.
  3. Base Rate is the minimum rate of interest charged by banks on lending loans.

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

  1. 1 and 2 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. All of the above

 

See

Answer


(c
)

Type: Economy
Level: Moderate
Explanation: 

H. UPSC Mains Practice Questions

  1. The Resolution of Kashmir Crisis is not guaranteed even if there is consensus among all the concerned stakeholders involved. Discuss.

  1. Holding of Simultaneous Elections is a long pending reform in the democratic process of Elections in India.
Also, check previous Daily News Analysis

 

“Proper Current Affairs preparation is the key to success in the UPSC- Civil Services Examination. We have now launched a comprehensive ‘Current Affairs Webinar’. Limited seats available. Click here to Know More.”

 

Enroll for India’s Largest All-India Test Series

 

Leave a Comment

Your email address will not be published. Required fields are marked *