UPSC Exam Comprehensive News Analysis Sep23

E. Editorials

Note to the Students:

From a UPSC point of view, this article looks into the Pradhan Mantri MUDRA Yojana (PMMY), which is an important scheme launched by the Government of India

Background:

The Origins of the Mudra Scheme:

• The Union Budget presented by the Hon’ble Finance Minister, for FY 2015-16, announced the formation of MUDRA Bank.
  Pursuant to this, MUDRA was registered as a Company in March 2015 under the Companies Act 2013 and as a Non Banking Finance Institution with the RBI on 07 April 2015.
• Finally, MUDRA was launched by the Prime Minister Shri Narendra Modi on 08 April 2015 at a function held at Vigyan Bhawan, New Delhi.

A look at Micro Enterprises:

• Micro enterprises constitute a major economic segment in India and provides large employment after the agricultural sector.
• This segment includes micro units engaged in a) manufacturing, b) processing, c) trading and services sector.
• It provides employment to nearly 10 crore people.
• Many of these units are proprietary/single ownership or Own Account enterprises and many a time referred as Non Corporate Small Business sector.

A Note on the Non-Corporate Small Business Sector:

• The Non-Corporate Small Business Sector (NCSBS) is the economic foundation of India.
• The NCSBS is perhaps one of the largest disaggregated business ecosystems in the world. However, the NCSBS sustains around 50 crore lives.
• The sector comprises of a myriad of:
  a) small manufacturing units, b) shopkeepers, c) fruits/vegetable vendors, d) truck & taxi operators, e) food-service units, f) repair shops, g) machine operators, h) small industries, i) artisans, l)food processors, m) street vendors and many others.
• It is important to note that the formal or institutional architecture has not been able to reach out to them to meet the financial requirements of this sector.
• The NCSBS is largely self financed or relies on personal networks or moneylenders.
• It is believed by experts that addressing this need will give a big boost to the economy, failing which, this segment would remain unfunded and a portion of the productive labour force would remain unemployed.

Constraints Faced by the Micro Enterprises:

The various constraints faced by this sector are as listed below:

• Access to Finance
• Infrastructure Gaps
• Lack of growth orientation
• Skill Development Gaps
• Policy Advocacy Needs
• Lack of Market Development/Market Making
• Knowledge Gaps
• Information Asymmetry
• Entry Level Technologies

The Big Challenge:

• The biggest bottleneck to the growth of entrepreneurship in the Non-Corporate Small Business Sector (NCSBS) is lack of financial support to this sector.
• The support from the Banks to this sector is meagre, with less than 15% of bank credit going to Micro, Small and Medium Enterprises (MSMEs).
• A vast majority of the non-corporate sector operates as unregistered enterprises.
• As a consequence of this, they do not maintain proper Books of Accounts and are not formally covered under taxation areas.
• Thus, banks find it difficult to lend to them. A majority of this sector does not access outside sources of finance.

What is Micro Finance?

• Micro Finance is an economic development tool whose objective is to provide income generating opportunities to the people at the bottom of the pyramid.
• Micro Finance covers a range of services which include, in addition to the provision of credit, many other credit plus services, financial literacy and other social support services.

Micro Units Development & Refinance Agency Ltd (MUDRA):

• It is taking cognisance of the above issues that the MUDRA  was set up by the Government of India (GoI).
• This Agency would be responsible for developing and refinancing all Micro-enterprises sector by supporting the finance Institutions which are in the business of lending to micro / small business entities engaged in manufacturing, trading and service activities.
• MUDRA would partner with Banks, MFIs and other lending institutions at state level /regional level to provide micro finance support to the micro enterprise sector in the country.

The News  

• Raghuram Rajan, former RBI Governor, in a recent report to Parliament, said that  while non-performing assets arising from corporate loans are a current problem, the government should now focus on the sources of the next crisis.
• In particular, he warned, the government should refrain from setting ambitious credit targets or waiving loans.
• Specifically, he called out Mudra loans as those having potential credit risks.
• He mentioned that both Mudra loans as well as the Kisan Credit Card, while being popular, have to be examined more closely for potential risk. The Credit Guarantee Scheme for the MSME run by the SIDBI is a growing contingent liability and needs to be examined with urgency.

Analysis

Is repayment a challenge?

• It is important to know what the critics of the scheme say.
• They believe that too many best practices in loan origination have been neglected in the process of authorising and disbursing loans.
• There was an instance where the CBI registered a case against a former official of Punjab National Bank for alleged abuse of official position in sanctioning and disbursing 26 Mudra loans amounting to ₹65 lakh.
• Ensuring repayment still remains to be a challenge. This is observed even though loans are sought by business owners genuinely seeking growth and bankers disburse them with an eye on economic development.
• A detailed look into this issue reveals much. Firstly, these loans are unsecured, meaning that a collateral which could protect the interests of the bank is not required, unless an asset that is purchased can itself serve as collateral.
• Secondly, the scheme itself is meant for those who need small amounts, but do not have access to such funds. However, the very nature of the business of such borrowers is susceptible to volatility. Some of these businesses may choose one location for their place of business on a day, and another elsewhere in their city the next day.
• Thirdly, the public banking system may not be staffed for the work this may involve. When it comes to collection, bank staff may choose to go after one loan with outstanding of Rs. 10 lakh, for example, rather than 10 loans of Rs. 1,00,000 each.

Note to the Students: This issue is important from the perspective of the judiciary in India which is an important topic under the Indian Polity syllabus. However, the larger issue which needs to be discussed here is relating to the issue of pendency of cases in the judiciary. The issue of pendency of cases has been dealt with extensively in the following section covered on our website: Judicial Delays – RSTV: In Depth

In this article, over and above the points highlighted in the Hindu newspaper, we also touch upon the reasons for the pendency of cases before the judiciary in general.  

The News:

• Over 54,000 cases are pending in the Supreme Court. However, out of these cases, only a few grab public attention.
• It is these cases that become the litmus test for the court. Justice Ranjan Gogoi, who assumes office as the Chief Justice of India on October 3, has many cases before him which would be keenly watched.

A look at the sensitive cases:

• Out of these cases, the most anticipated, is the monitoring of the preparation of the National Register of Citizens (NRC) of Assam.  A series of orders from the Special Bench of Justices Gogoi and Nariman has seen the government publish its second and final draft of the NRC in Assam. Currently, the court is examining a draft standard procedure to receive the objections and claims of over 40 lakh people left out of the draft NRC.
• The Supreme Court is also hearing petitions on the fate of Rohingya refugees.
• Further, the fate of the Ramjanmabhoomi-Babri Masjid appeals lies in the balance in the court.
• Over and above this, the case of the release of seven convicts in the Rajiv Gandhi assassination case may bounce back to the court. The State government has requested the Tamil Nadu Governor to release the convicts.
• It is important to note that even if a challenge comes to the court against the Governor’s decision, whatever it may be, the court has limited power of judicial review of the Governor’s constitutional discretion under Article 161 of the Indian Constitution.
• Apart from this, one of the biggest challenges for Justice Gogoi would be the pending petitions against Article 35A.
• Article 35A provides special status, rights and privileges to Jammu and Kashmir. The hearing is scheduled for the second week of January 2019, after the panchayat elections in the state of Jammu and Kashmir.

Larger Background:

• The judiciary is meant to guarantee the protection of citizens’ rights at every instance.
• But in practice, the Indian justice system is not only erratic, but also extremely slow, resulting in justice being denied to a lot of people. According to the National Judicial Data Grid, over 4.2 million cases were pending in the 24 High Courts of India till this February.

Reasons for Judicial Delays:

• Large number of unfilled judicial vacancies.
• A long drawn judicial process: This is compounded by the fact that often witnesses are not willing to come forward. The process concerning criminal cases also takes time; this is exacerbated by the fact that it takes time for reports such as medical reports, forensic reports, etc. to be given. There are at times even strikes in Courts that delay the process.   
• Fast growing population
• Lack of Infrastructure: Chief Justice, Dipak Misra has described that the lack of infrastructure, as one of the causes.
• Lack of good quality judges
• Salaries and Perks of judges: If better salaries and better perks are provided, then better lawyers would be interested in becoming judges. Today, the quality of lawyers interested in becoming judges is poor, because of which the quality of judges is down and because of which the justice delivery system is also suffering.
• An increasing number of states and central laws
• Mounting number of appeals
• Shortage of judges in courts
• Delay in hearing of cases of common civil rights in High Courts
• Increase in Appeals in High Courts against the orders of the quasi-judicial bodies
• The Petition for revision and appeal in a case
• Continuous adjournment
• Indiscriminate utilisation of writ rights
• Inadequate system of monitoring cases
• Difficulties in tracking trials
• Efforts to prevent a case during hearing  
• Lack of will and capability to decide cases
• Apart from these, there are delays during pre-trial and trial of cases
• In the courts, we have a certain number of backlog cases that are listed along with regular matters that are being heard. Thus, the judge doesn’t have enough time to finish hearing regular matters, and thereafter go onto backlog matters. Thus, hearings keep getting adjourned, or they keep getting pushed back into the system.  

Concluding Remarks:

Need of the hour:

• There is a need to appoint 50 judges per 10 lakh population. At the moment, this figure is just 10 judges.
• The same ratio is 107 in the US, and 50 in England. In the Indian High Courts, there are vacancies for 434 judges.
• The lack of judges and the increasing number of cases, has burdened the courts and has delayed the settlement of cases.

• In the courts, we have a certain number of backlog cases that are listed along with regular matters that are being heard. Thus, the judge doesn’t have enough time to finish hearing regular matters, and thereafter go onto backlog matters. Thus, hearings keep getting adjourned, or they keep getting pushed back into the system. This also ties into the fact that lawyers know that the system works this way, so they don’t necessarily prepare for these backlog cases and come and therefore, they ask for adjournments and adjournments are given quite liberally in many courts as well. Thus, this creates a system where backlog cases continue to exist.
• Apart from corruption, there is a long and costly judicial process and delays in delivering decisions. As far as pending cases are concerned, the Supreme Court has 60,000 pending cases, waiting to be disposed of 38 lakh cases are in the High Courts, and 2 crore, 30 lakh are in the district and subordinate courts, which are waiting to be considered.
• In Delhi, there are so many cases that are pending that even if 5 minutes is given to each lawsuit, it would take 466 years to settle all the cases.
• There is a need to rectify the judicial system in the lower courts to speed up trials. Experts say that the maintenance of Courts, their resources, proper facilities in Court premises, and continuous hearing of cases are necessary. Apart from these, there is a need to accelerate civil and criminal hearing. The hearing and disposal of these cases, takes a lot of time. In many criminal cases, the decisions come when the person has almost completed his sentence. Similarly, in the civil cases, the second or sometimes the third generation, receives a final decision.
• These rising cases of delay in judgements indicate that our judicial system is in a state of collapse. This is the reason that the President of India, Prime Minister, and Chief Justice have also started expressing their concern over this.

One has also witnessed that in the recent years, the Supreme Court has heard challenges against customs and personal law practices.

Currently, we see that the Supreme Court has adjudicated a series of religious issues. These issues include:

1. triple talaq
2. temple ban on women of a certain age,
3. the right to pray of Parsi women, who marry outside their faith, in the Tower of Silence.

A clutch of petitions challenging nikah halala also awaits Justice Gogoi’s attention.

Finally, it is also to be seen whether Justice Gogoi would decide positively on issues such as live-streaming of court proceedings and continue with the publication of Collegium resolutions on the court website.

Nothing here for today!!!

1. Tuberculosis

Question 1. Consider the following statements:

1. Only 1
2. Both 1 and 2
3. Both 2 and 3
4. 1, 2, and 3

See

Question 2. Consider the following statements:

1. Swine influenza, also called pig influenza, swine flu, hog flu and pig flu, is an infection caused by any one of several types of swine influenza bacteria.
2. Influenza A (H1N1) is the subtype of influenza A that is the very rare cause of human influenza.

Choose the correct statements:

1. Only 1
2. Both 1 and 2
3. Only 2
4. None of the above

See

Question 3. Choose the incorrect statement with respect to MUDRA Bank:

1. It is the vehicle to implement PM Mudra Yojana
2. It works under the Ministry of Finance
3. MUDRA Bank will be set up as a non – statutory body
4. It will partner all state/regional level coordinators to provide easy finance to even the remote investors.

See

1. Arresting a man for triple talaq in one instance can actually destroy families. Critically analyse the statement in the context of triple talaq bill.

2. The Donald Trump administration is moving ahead with a proposal to end work permits for spouses of H-1B workers in the United States. Examine the impact of this decision on India.

3. We have not inherited the Earth from our forefathers but have borrowed it from our children – What do you understand by this statement?

Also, check previous Daily News Analysis

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