Important points from The Hindu::

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RBI tightens takeover norms for shadow banking

RBI said any purchase of a stake of 26 per cent or more in a company, or a change in more than 30 per cent of its directors, would need the central bank’s permission.

The RBI has been continuously trying to strengthen this sector so that this should not be a back yard for people we don’t know

NBFCs play a critical role in extending credit to areas where traditional finance cannot reach in a country where only just over half of the population has access to the mainstream banking system. However, controlling these NBFCs has been made a key priority for the RBI, given their size and reach.

Rbi also said the source of funds behind new investors in any NBFC will have to be disclosed.

1.     DEFINITION of 'Shadow Banking System' The financial intermediaries involved in facilitating the creation of credit across the global financial system, but whose members are not subject to regulatory oversight. Theshadow banking system also refers to unregulated activities by regulated institutions.[Investopaedia]

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The central bank now mandates that banks set aside funds for emergency use in a so-called counter cyclical capital buffer to guard themselves against an economic downturn.

 

Up to half that buffer, held as of December 31, can now be used for provision against bad loans, up from 33 per cent allowed formerly, the RBI said.

The RBI has been keen to spur the sector to lend more and fuel economic growth, but only a handful of banks have cut lending rates despite two cuts in interest rates, due to weak demand for credit and the high cost of funds

Banks also continue to struggle with non-performing loans.

The gross bad loans ratio at banks has doubled in the past two years amid an economic downturn.

State-owned banks have amassed bad loans faster than private sector lenders.

Banks’ gross bad loans ratio could rise to as much as 5.7 per cent by March, 2016, from 4.5 per cent last December, rating agency ICRA estimates.

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SEBI proposes new fund-raising platform for start-ups

To help start-ups and young entrepreneurs [by the new-age companies having innovative business model and belonging to knowledge-based technology sector]  raise funds, the Securities and Exchange Board (SEBI) of India today proposed an ‘ALTERNATE CAPITAL RAISING PLATFORM’, wherein such firms can raise money from institutions and HNIs[HIHG NET WORTH INDIVIDUALS] from the capital markets under a relaxed regulatory regime.

However, retail investors would be restricted from investing in such companies, given the risks involved therein.

It is proposed that the new platform for raising money within the country will be initially made applicable to companies which are in the area of software product development, ecommerce, new-age companies having innovative business model.

Besides, SEBI has proposed that capital raising would be allowed on the Institutional Trading platform (ITP). The proposed platform will have two categories of investors — Qualified Institutional Buyers (QIB) and Non-Institutional Investors (NII). 

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Roof Top Solar Project: Cut in subsidy

The government has set an ambitious target of adding 40,000 MW by 2022[in rooftop solar project] through distributed and rooftop solar projects. It aims to add 10,000 MW in the next three years. These targets are part of the Indian government’s ambitious goal of achieving 100 GW by 2022 in solar.

Centre has planned to cut the subsidy on rooftop solar plants to 15 per cent from 30 per cent due to

1.       decline in price of solar panels,

2.      large target set for rooftop solar power plant and

3.      limited availability of funds for subsidy.

On the other hand, though, the economic viability of this solar segment has been rapidly increasing. Over 40 per cent of the Indian states have achieved grid parity in commercial rooftop. With Accelerated Depreciation (AD) benefits, a same percentage of states see viability in industrial segment.

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China releases details of Silk Road plans

The “belt and road” have two components —

the Silk Road Economic Belt (SREB) that would be established along the Eurasian land corridor from the Pacific coast to the Baltic Sea, and

the 21st century Maritime Silk Road (MSR).

Analysts say that the “belt and road” initiative, backed by an extensive China-led funding infrastructure, could shift the centre of geo-economic power towards Eurasia, and undermine the “Asia Pivot” of the United States and its allies.

The “belt and road” run through the continents of Asia, Europe and Africa, connecting the vibrant East Asia economic circle at one end and developed European economic circle at the other.

Specifically, the SREB focuses on bringing together China, Central Asia, Russia and Europe (the Baltic); linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and West Asia; and connecting China with Southeast Asia, South Asia and the Indian Ocean.

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SUCCESS SECRETS OF SINGAPORE-- ESSAY FODDER-- the hindu

ESSAY FODDER—the hindu

SUCCESS SECRETS OF SINGAPORE—GOOD GOVERNANCE::

The present day prosperity, freedom and efficiency in the modern city state find their roots in Lee Kuan Yew’s vision and legacy

Lee Kuan Yew is no more. But the city state will be there to tell the story of his work — the transformation of Singapore from a Third world country to a First world nation. There are several pillars that have promoted the transformation.

PILLARS TO TRANSFORMATION::

#PILLAR 1:  CORRUPTION ERADICATED:

Eradicating corruption, which was the key ingredient in effective governance. Singapore stands at rank 7 on the Corruption Perceptions Index 2014; there are 167 countries below it on the index. India is ranked 85.

HOW WAS CORRUPTION REMOVED??

It was done not via endless litigation, but by demonstrating that corruption will not tolerated, come what may.[ A STRONG RESOLUTION TO ATTACK CORRUPTION.]

#PILLAR 2: DISCIPLINED WORKFORCE:: WELFARE OF THE WORKERS

The second pillar holding the prosperity fort has been a workforce that has the discipline of adhering to productivity-linked wages and bonuses. Non-performers seldom get away in Singapore under the guise of workers’ solidarity.

 Singapore’s National Trades Union Congress is a shining example of a centre that is truly working for the welfare of workers. The provident fund system that assures decent retirement benefits also helps in times of an economic crisis. The contribution rates are toned down to assure that overall wage costs ensure competitiveness.

#PILAAR 3: ECONOMIC POLICIES::

The third pillar has been economic policies favouring a strong Singapore Dollar. It helped in keeping the domestic inflation rate as low as it was feasible, while orderly wage rises combined with skill development and productivity growth have helped in maintaining competitiveness.

#PILLAR 4: SECURITY::

The fourth pillar is internal security. No young woman feels insecure while standing at a bus stop at night in Singapore.

#PILLAR 5: EQUALITY:: EDUCATIONAL OPPORTUNITIES+ GOOD INFRASTRUCTURE:

The fifth — which is, for many reasons, the most crucial pillar — is equality of educational opportunity: excellent government schools catering to the first 12 years of education, and Cambridge A-level exams that effectively eradicated the need for sundry entrance tests. The high calibre of students entering the undergraduate programmes, and the implicit demand for excellent professors is what has helped the country climb world rankings for higher education. The National University of Singapore ranks 25 while the relatively younger Nanyang Technological University ranks 61 in the World University Rankings, 2014-2015.

#PILLAR 6: RELIGIOUS FREEDOM::

Singapore’s respect for individual freedom to pursue one’s religion on the understating that politics is kept far away from religious discourse.

The list of pillars supporting the nation can go on — the development of excellent infrastructure, a work culture that discourages more talk and less work, a no free lunch philosophy. It’s because of believing in pragmatism as the ideology in policymaking that Singapore capitalised on foreign direct investment and trade, when practically the entire developing world was inimical to both.

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ESSAY FODDER-- EDITORIALS-- the hindu

ESSAY FODDER—the hindu

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LAPSES IN THE SHREYA SINGHAL’S LANDMARK JUDGEMENT:

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The judgment — striking down as unconstitutional Section 66A of the IT Act of 2000 — by the Supreme Court Bench of Justices J. Chelameswar and R.F. Nariman in the Shreya Singhal case, is seen as a landmark judgment.

It is regarded as heralding the birth of new free speech jurisprudence and restoring the public space for dissent in India.

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ANAMOLIES

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###1.   DISTINCTION HAS BEEN MADE, BUT NOT A FINER ONE:

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3 TYPES OF FREE SPEECH AND EXPRESSION[discussion, advocacy and incitement ] mentioned in the judgement. But, not made a fine distinction between them.

For example,  the “discussion” entered into by one can be used by another to “incite” simply by quoting the discussion and saying “this is what he has said”. 

Writer Perumal Muruganhad to face such ire in January 2015 in Tamil Nadu because of a novel he wrote as did T.J. Joseph, a lecturer in Kerala, who had his hand cut off in 2010 for a question he had set in an examination.

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###2.  NO ABSOLUTE DISTINCTION B/W “SPEECH” AND “EXPRESSION”

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while it elaborates on the need to protect speech and the written word, it has little to say on expression especially in its many forms of photographs, paintings, films, cartoons, etc.

So, while a Facebook post gets protection, a painting does not.

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###3. DISTINCTION MADE B/W PRINT AND DIGITAL MEDIA: ON QUANTITATIVE GROUNDS RATHER QUALITATIVE::

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 It appears to accept this distinction on quantitative grounds, i.e., how many people can be reached and how fast, rather than on qualitative grounds, i.e., what is being said.

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KEY TAKEAWAYS OF THE JUDGEMENT::

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1.       Dismissal of the assurances given by government on the ground that the law cannot be based on the assurances of any regime in power.[THE GVT HAD SAID THAT-- even if certain portions of the law — 66A — were vague, the government, being committed to free speech, would not use the section to curb free speech.] The law cannot be based on even the bona fide intentions of a government and has to exist independent of these intentions.

2.      The role of the judgement in educating the public about the government’s mind by placing the key aspects of the government’s submission in the public domain.

3.      And the third relates to their observation that “vagueness” in the formulation of laws produces a tyranny of power.

4.       The few areas of weakness in the judgement should not, however, detract from the judgment’s significant contribution to free speech especially in these dark times of censorship.

It is without doubt a great judgment and will soon become the touchstone for new free speech jurisprudence in India. The hecklers will be in retreat.

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IMPORTANT ECONOMY NEWS: the hindu

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Prime Minister Narendra Modi’s Government has made renewable energy its top priority. It has more than doubled the capacity target to 175 gigawatt by 2022. Of this, wind will account for 60 gigawatt and solar 100 gigawatts.

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Gilead Sciences USA 1^st company to offer a ‘Volunatary Licence’ for its blockbuster, drug, Sofosbuvir used in treatment of Hepatitis C Virus[HCV].

HCV- affects the liver and if left untreated can cause LIVER CIRRHOSIS OR LIVER CANCER – HIGH MORTALITY RATE.

Indian companies can sell the drug in 91 countries on a payment of a 7% royalty on the billing to the Gilead Company. This is possible because of the Voluntary Licensing offered by Gilead Sciences.

This drug in combination with others have a above 90% cure rate for HCV patients.

VOLUNTARY LICENSCING:

Voluntary licensing arrangements between a patent holder and another party in a country, or serving the country's market, may afford opportunities for significant cost-containment. 

Patent holders may at their discretion, license to other parties, on an exclusive or nonexclusive basis, the right to manufacture, import, and/or distribute a pharmaceutical product. 

In this case Gilead has signed non-exclusive licensing agreements with many Indian generic drug manufacturers to MANUFACTURE AND MARKET GENERIC SOFOSBUVIR IN 91 markets.

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FINANCIAL SEZ'S.

ESSAY FODDER—the hindu

FINANCIAL SEZ’S: IN VOGUE:

The proposal is based on the Percy Mistry Committee report in 2007, which had recommended a slew of reforms to enable India to set up financial districts on the lines of those in London and New York.

The financial SEZs are also aimed at attracting to India the huge volumes of global trading in rupee and the National Stock Exchange’s index Nifty that right now take place offshore in locations such as Singapore, London and Dubai.

India will allow greater capital account convertibility in financial special economic zones (SEZs).

The first such notified SEZ to benefit from the reform will be the Gujarat International Finance Tec-City (GIFT City), coming up near Ahmedabad.

“The Securities and Exchange Board of India (SEBI) and the Reserve Bank of India are looking at drafting the regulations that will make greater capital account convertibility possible in notified financial SEZs...GIFT will be the first to BENEFIT.

It will be possible for the corporate sector to raise foreign currency loans in such SEZs the way they do overseas right now.

SEBI had set up some of the norms under its purview required for giving shape to International Financial Service Centre (IFSC) such as GIFT. The norms aim to ease the setting up of stock exchanges and capital market infrastructure in such centres.

1.    Capital account convertibility is a feature of a nation's financial regime that centers on the ability to conduct transactions of local financial assets into foreign financial assets freely and at country determined exchange rates. It is sometimes referred to as capital asset liberation or CAC.

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PAK ROLE IN AFGHAN: IMPACT ON INDIA:

ESSAY FODDER—the hindu

PAK ROLE IN AFGHAN: IMPACT ON INDIA:

From an Indian perspective, Pakistan’s increasing role in Afghanistan is likely to impact India’s economic commitments in Afghanistan.

Pakistan is likely to block progress on the Chabahar Port linking project in order to remain the sole gateway to Afghanistan.

India’s plans of developing four iron-ore blocks and building a steel plant in Hajigak will also be threatened by Pakistan’s presence.

India’s limited influence in Afghanistan’s political realm means that it needs to join hands with another major player in the region. With the Chinese backing Pakistan, India’s hopes lie with Iran.

The ongoing P5+1/Iran talks and Iran’s integration with the world economy hold the key to an India-Iran joint effort in Afghanistan. If that does not happen, India’s options will be curtailed.

India will be keeping a close eye on the fate of the dialogue between the Taliban and Mr. Ghani’s team, and Pakistan’s role therein.

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REFORM PUSH-- COAL ALLOCATION.

ESSAY FODDER—the hindu

THE SIGNIFICANCE OF MINES AND MINERALS AMDT. BILL AND COAL MINES BILL: 2015.

It marks a significant step forward in the Central government’s reforms push. 

 It effectively ends government monopoly over the extraction of coal, which has existed after coal mining was nationalised in 1973.

Allows for auction of coal blocks.

The auctions have lead to the windfall of revenues to the coal- bearing states.

It has opened up the path for foreign investments in the sector, since Indian arms of foreign companies are entitled to bid for blocks, as well as for commercial mining of coal, which can have a salutary effect on prices going forward. 

Despite having reserves of 301 billion tonnes of coal — the fifth largest in the world — India has been plagued by chronic coal shortages, leading to costly imports by power and metal producers. This has led to severe power shortages, with downstream impact on both industry and individual consumers. 

With 90 million tonnes of coal expected to be produced from just the 42 operational mines in the blocks auctioned so far, such shortages may well be a thing of the past.

The move is also beneficial to the state-owned Coal India Limited, which may now get the elbow room to bring in some much needed technology and best practices, while opening up prospects of a better future for millions of mine workers.

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THE CURIOUS CASE OF HASHIMPURA MASSACRE.

ESSAY FODDER—the hindu

JUSTICE DELAYED IS JUSTICE DENIED—THE CURIOUS CASE OF HASHIMPURA MASSACRE.

The maxim “justice delayed is justice denied” must seem like a tired cliché to the relatives of the 42 Muslim men who fell prey to bullets, allegedly fired by members of the Provincial Armed Constabulary (PAC), and other survivors in Hashimpura in Meerut sometime in May 1987.

The fact that it required 28 years to arrive at a court decision in the Hashimpura massacre is itself enough to suggest that justice has been thoroughly denied to the victims of the gruesome crime.

on March 21^st 2015, the 19 accused were let free due to lack of sufficient evidence and the inability of the witnesses to identify the accused.

Clearly, there need to be more substantive changes in policing and the nature of the judicial process if India’s citizens from the minority community are to be reassured of the secular nature of the Indian state and the justness of its judicial system.

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POLITICAL PARTY TRENDS: CENTRALIZED STYLE.

ESSAY FODDER—the hindu

TRENDS OF POLITICAL PARTIES IN INDIA: CENTRALIZED STYLE.

The first — why do political parties in India have a tendency to centralise? And the second — why do leaders of these parties project themselves as “supremo,” or the ultimate authority?

Both dynastic and non-dynastic parties follow centralisation of authority.

In our opinion, India’s political parties and their leaders have the propensity to centralise authority because most political parties do not have independent organisational bases, a large section of citizens depend upon India’s mai-baap state [nanny state] for their general well-being, and the nature of financing election campaigns in the country.

If a party has a strong organisation and allows other contenders an equal opportunity to reach to the top, then factional politics within the party would create independent bases of power and incentivise lobbying. This is true in the case of the BJP and the Left parties as they are rooted in strong civil society organisations. For example, in case of the BJP, the RSS and its affiliates act as a strong check on party leadership.

The AAP has severed its ties from the Anna Hazare-led anti-corruption movement in the wake of its party formation. It now lacks an independent organisational base that could check the leader becoming the party — a phenomenon common to most political parties in India.

Political parties in India have an incentive to centralise party organisation because the Indian state is the mai-baap. In a mai-baap state, the state is involved in everyday economic activity of most citizens — from running railways and building big industrial complexes to social sector programmes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), mid-day meals, etc. The state is the primary investor, creator and provider of most goods that citizens consume. The control over the state and its institutions help in crystallising the support base of a politician.

This centralisation is also helped by the opaque campaign finance regime of parties in India, which is closely tied to the mai-baap state and its institutions. Campaign finance in India is often undisclosed, collected centrally, and distributed by the central party office. While the central leadership handles the bulk of the campaign spending, political parties also allocate tickets to candidates with a substantial amount of wealth and a criminal background so they could finance their own elections. 

The tendency of party centralisation also explains why India has such a high rate of party fragmentation — more and more parties competing in the next election — and electoral volatility — the net change in the vote share of a party from one election to the next. When one leader frequently makes the decisions regarding appointments to positions of power within a party, then others within the party become unsure of their career paths. Ambitious politicians in such a scenario are likely to desert their parent party and join another party to enhance career prospects.

In this way, party centralisation leads to more and more parties entering the electoral market place and greater vote swings between two elections.

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NATIONAL CURRENT AFFAIRS[ JULY AND AUGUST 2014]-- gktoday

NATIONAL CURRENT AFFAIRS: gktoday

WETLAND CONSERVATION IN INDIA:

“National Wetland Conservation Programme (NWCP)” was implemented till 2012-13. However, for better synchronization and to avoid overlap the NWCP has been merged with another scheme “National Plan for Conservation of Aquatic Ecosystems (NPCA)” for holistic conservation of lakes and wetlands. 

Under NWCP, 115 wetlands in 24 states and two UTs have been identified for conservation and management. 

At the behest of Environment Ministry, the Space Applications Centre (SAC) Ahmedabad has prepared a National Wetland Inventory Atlas on 1:50,000 scale using Indian Remote Sensing Satellite III data of pre- and post-monsoon seasons during 2006-11.

As per the atlas, there are a total of 7, 57,060 wetlands covering an estimated area of 15.26 million hectare, that is around 4.63% of the geographic area of India.

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As per the law commission panel, the trial must be expedited and concluded against MP’s or MLA’s within a one-year period for charges framed against sitting MPs or MLAs. If trial is not concluded within a year then (either) the MP/MLA may be disqualified at the expiry of the one-year period or the MP/MLAs’ right to vote in the House as a member, remuneration shall be suspended at the expiry of the one-year period.

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TELECOM FINANCE CORPORATION:

The central Government has proposed to establish a Telecom Finance Corporation (TFC) in the 12^th Five Year Plan period (2012-17).

TFC would be registered as Non-Banking Finance Company and Non-Deposit Infrastructure Finance Company.

It would be a Public Sector Unit (PSU) under the administrative control of Department of Telecom (DoT).

The time frame to establish the main sources of funds for TFC shall be through issue of taxable and tax-free bonds.

The other sources of funds include term loans from banks/financial institutions and off-shore borrowings and borrowings from multilateral institutions such as Asian Development Bank, International Monetary Fund, World Bank and other sovereign funds.

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HIKE IN FDI IN DEFENCE MANUFACTURING SECTOR:

The Union Cabinet cleared a proposal to enhance the Foreign Direct Investment (FDI) limit in defence sector to 49% from the current 26%.

The step is aimed at boosting domestic defence industry of the country that imports up to 70% of its military requirements.

In the Budget 2014-15, it was proposed to hike the composite limit of foreign investment to 49% to be approved through the Foreign Investment Promotion Board (FIPB) route and with control of the enterprise to be in Indian hands.

At present, the government allows 26% FDI in defence manufacturing.

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SEBI empowering ‘Securities Laws (Amendment) Bill 2014’ passed in Lok Sabha

(SEBI) will be empowered and strengthened to clamp down on fraudulent investment schemes and to seek information from any entity related to an investigation.

Key points in Securities Laws (Amendment) Bill 2014

·         SEBI will have the authority to seek relevant information and records from any person

·         Any pooling of funds in any unregistered scheme or arrangement, having corpus of Rs 100 crore or more, shall be deemed to be a collective investment scheme

·         It provides for express powers for the settlement (compounding)

·         Authorizes SEBI to set up Special Courts – to expedite trial with powers such as the authority to seek call-data records

·         It provides SEBI powers of recovery of amounts

·         It empowers the institution to increase the penalty imposed by an adjudicating officer

·         SEBI will have the authority to conduct search-and-seizure operations related to probes under a designated court in Mumbai.

·         Section 15A-HB of the SEBI Act has been amended and prescribed a minimum penalty to be slapped for each violation.

The law in its current form authorizes SEBI to carry out the search operations only after being permitted by the magistrate of the area, which compromises with the secrecy of the move. Previously, the Section 15A-HB prescribed one level of penalties to be imposed for various offences but without any minimum level of penalty or range and without giving any discretion to the Adjudicating Officers.

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NGRBA brought under Ministry of Water Resources

 

 

The National Ganga River Basin Authority (NGRBA) has been shifted from the Ministry of Environment to the Ministry of Water Resources . Hereafter, all issues pertaining to conservation, development management and abatement of pollution in river Ganga and its tributaries will also be directed by the Ministry of Water Resources.

 

 

National Ganga River Basin Authority (NGRBA)

The government of India gave River Ganga the status of a national river and constituted the NGRBA in February 2009, under Section 3(3) of the Environment (Protection) Act, 1986. 

 

 

The NDA-led central government has given priority for cleaning river Ganga for which Rs 2,037 crores was sanctioned in the Union Budget 2014-15 under the Ganga Conservation Mission named “Namami Gange”.

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