THE POLITY AND GOVERNANCE

THE CONTROVERSY OVER THE PROPOSED MEKEDATU WATER PROJECT

THE CONTEXT: Karnataka and Tamil Nadu are at loggerheads over the Mekedatu drinking water project across river Cauvery. Tamil Nadu’s Assembly has passed a resolution against the project, while Karnataka’s legislative assembly is set to counter it with a resolution seeking the project’s early implementation and clearance.

THE EXPLANATION:

• Mekedatu is a drinking water cum power generation project proposed by Karnataka across the river Cauvery. The ₹9,000 crore balancing reservoir at Mekedatu on the Karnataka-Tamil Nadu border envisages impounding of 67.15 tmc (thousand million cubic feet) ft. of water.
• Karnataka has argued that since the project falls inside its own jurisdictional limit, Tamil Nadu’s permission is not needed.

What is the project?

• Originally mooted in 1948, Mekedatu (which translates as Goat’s crossing) is a drinking water cum power generation project across river Cauvery.
• Karnataka gave the project shape after the final award of the Cauvery Water Disputes Tribunal was notified in February 2013 allocating the riparian states their shares.
• After a pre-feasibility study report was submitted in 2018, the State submitted a detailed project report to the Central Water Commission in 2019.
• The project, which will involve submergence of nearly 5,100 hectares of forest in Cauvery wild life sanctuary hosting rich flora and fauna, will help the state in utilising the additional 4.75 tmc ft. of water allocated by Supreme Court in 2018 for consumptive use for drinking purpose for Bengaluru and neighbouring areas.
• Karnataka’s share in the award has been decided at 284.75 tmc ft. In July 2019, the Expert Appraisal Committee on River Valley and Hydroelectric Projects constituted by the Union Ministry of Environment, Forest and Climate Change (MoEFCC) has said the proposal could be reconsidered only after Tamil Nadu and Karnataka reach an “amicable solution.”

How will it benefit Karnataka?

• The water from Mekedatu is to be pumped to quench the thirst of the burgeoning population of Bengaluru which is estimated to be around 1.3 crore. Currently, more than 30% of Bengaluru is dependent on borewell water. Along with the 5th stage of the Cauvery Water Supply Scheme, which will be completed shortly, the water from Mekedatu is projected to meet the water requirement of the State capital for the next 30 years.
• Besides, there are also plans to generate 400 MW of power. The revenue earned from power generation is expected to compensate the Government its investment on the project within a few years.
• Karnataka argues that the reservoir will also help to ensure monthly flow stipulated in the award for Tamil Nadu rather than harm the neighbouring State’s interest in any way.

What is Karnataka’s stand?

• Karnataka says that there is no case for Tamil Nadu after its share of 177.75 tmc ft. of water is ensured at the inter-State border gauging centre at Biligundlu. Also, the project falls inside the jurisdictional limit of Karnataka and Tamil Nadu’s permission is not needed.
• The State also argues that since there is no stay in any court for the project, Karnataka can go ahead. On utilising the surplus water, Karnataka says that any allocation in this sphere should be done after hydrology studies to ascertain the quantum of excess water available in the basin.

Why is Tamil Nadu opposed to it?

• According to the TN Govt, through the project, Karnataka will impound and divert flows from “uncontrolled catchments” to it, a component which was taken into account by the Tribunal in the 2007 order while arriving at the water allocation plan for the State.
• As per an estimate, around 80 tmc ft of water flows annually to Tamil Nadu, thanks to the catchments including the area between Kabini dam in Karnataka and Billigundulu gauging site on the inter-State border, and the area between Krishnaraja Sagar dam in Karnataka and the gauging site.
• As the upper riparian State has adequate infrastructure even now to address the water needs of Bengaluru, there is no need for the Mekedatu project, according to Tamil Nadu.
• Mekedatu also does not find mention in the Tribunal’s final order or the Supreme Court judgement. Besides, given the unpleasant experiences that it has had with Karnataka in securing its share of the Cauvery water, as per the monthly schedule of water release, Tamil Nadu is wary of assurances from the other side.

THE SCIENCE AND TECHNOLOGY

2. THE ARTEMIS PROGRAMME, NASA’S NEW MOON MISSION

THE CONTEXT: In early March 2022, the NASA rolled out its Artemis I moon mission to the launchpad for testing at the Kennedy Space Centre in Florida, United States. The Space Launch System (SLS) rocket and Orion capsule of the mission were hurled out to the launchpad by NASA’s Crawler-Transporter 2 vehicle.

THE EXPLANATION:

What is the Artemis mission?

• NASA’s Artemis mission is touted as the next generation of lunar exploration and is named after the twin sister of Apollo from Greek mythology. Artemis is also the goddess of the moon.

• Artemis I is the first of NASA’s deep space exploration systems. It is an uncrewed space mission where the spacecraft will launch on SLS — the most powerful rocket in the world — and travel 2,80,000 miles from the earth for over four to six weeks during the course of the mission. The Orion spacecraft is going to remain in space without docking to a space station, longer than any ship for astronauts has ever done before.
• The SLS rocket has been designed for space missions beyond the low-earth orbit and can carry crew or cargo to the moon and beyond. With the Artemis programme, NASA aims to land humans on the moon by 2024, and it also plans to land the first woman and first person of color on the moon.
• With this mission, NASA aims to contribute to scientific discovery and economic benefits and inspire a new generation of explorers.
• NASA will establish an Artemis Base Camp on the surface and a gateway in the lunar orbit to aid exploration by robots and astronauts. The gateway is a critical component of NASA’s sustainable lunar operations and will serve as a multi-purpose outpost orbiting the moon.
• The Canadian Space Agency has committed to providing advanced robotics for the gateway, and the European Space Agency will provide the International Habitat and the ESPRIT module, which will deliver additional communications capabilities among other things. The Japan Aerospace Exploration Agency plans to contribute habitation components and logistics resupply.

What is the mission trajectory?

• SLS and Orion under Artemis I will be launched from the Kennedy Space Centre in Florida, U.S. in the summer of 2022. The spacecraft will deploy the interim cryogenic propulsion stage (ICPS), a liquid oxygen/liquid hydrogen-based propulsion system that will give Orion the thrust needed to leave the earth’s orbit and travel towards the moon.
• The spacecraft will communicate with the control centre back on Earth through the deep-space network. The aim of the exercise is to collect data and to allow mission controllers to assess the performance of the spacecraft.
• To re-enter the earth’s atmosphere, Orion will do a close flyby within less than 100 km of the moon’s surface and use both the service module and the moon’s gravity to accelerate back towards the earth. The mission will end with the spacecraft’s ability to return safely to the earth.

THE GOVERNMENT SCHEMES/ INITIATIVES IN NEWS

3. JAL SHAKTI MINISTRY LAUNCHES SUJLAM 2.0 CAMPAIGN TO BOOST GREYWATER MANAGEMENT

THE CONTEXT: On the occasion of World Water Day, the central government launched a nationwide campaign for greywater management. Called Sujlam 2.0, the campaign will focus on creation of community and institutional greywater management assets.

THE EXPLANATION:

The objective of this campaign

The Sujlam 2.0 campaign was launched with the objective of managing greywater through the participation of the people. Under this campaign, there are plans to mobilize communities such as schools, panchayats, and anganwadis to help in greywater management.

Funding of this campaign

Funds for greywater management will be provided from the Swachh Bharat Mission-Gramin Phase II or through grants under the 15th Finance Commission as well as the MGNREGS or through the convergence between all of them.

What is Greywater?

Greywater refers to the domestic wastewater that is generated in households, office buildings, etc. and is without faecal contamination. Sources of greywater include showers, sinks, washing machines, baths, etc.’

Since greywater contains less pathogens compared to domestic wastewater, it is safer to treat, handle, and reuse for the purpose of landscape, toilet flushing, crop irrigation, etc.

How can Greywater be managed?

It can be best managed where greywater is generated.  It can turn into a major infrastructure and management challenge if greywater is allowed to be accumulated and thus, can stagnate.

THE PRELIMS PERSPECTIVE

4. THE AHIR REGIMENT DEMAND

THE CONTEXT: An ongoing agitation by members of the Ahir community disrupted traffic on a 6-kilometre stretch of the Delhi-Gurgaon highway. The protesters demanding an Ahir Regiment in the Indian Army.

THE EXPLANATION:

WHAT IS THE REASON BEHIND THE DEMAND?

Members of the community have long argued that the Ahirs deserve a full-fledged Infantry Regiment named after them, not just two battalions in the Kumaon Regiment and a fixed percentage in other regiments.

The demand got a boost during the 50th anniversary of the 1962 War in 2012 when the saga of the Ahirs’ heroism was recounted repeatedly and has received renewed traction in the 60th anniversary year.

• The protesters contend that the Indian Army had several caste-based regiments (for Sikhs, Gorkhas, Jaats, Garhwals, Rajputs).
• In the battle of Rezang La in 1962, out of 120 casualties, 114 were Ahirs.
• It is unfortunate that Ahirs have not got the recognition like other communities.
• The recruitment to President’s Bodyguard (PBG) is open only for Rajputs, Jats and Sikh regiments.
• The Ahirs are variously described as a caste, a clan, a community, a race and a tribe.
• The traditional occupations of Ahirs are cattle-herding and agriculture.

What has been the Army’s response to the demand?

The Army has rejected the demand for any new class or caste-based regiment. It has said that while the older regiments based on castes and regions like the Dogra Regiment, Sikh Regiment, Rajput Regiment, and Punjab Regiment will continue, no new demands on the lines of an Ahir Regiment, Himachal Regiment, Kalinga Regiment, Gujarat Regiment, or any tribal regiment would be entertained.

 5. EXPLAINED: WHAT ARE BLACK BOXES, AND WHY ARE THEY IMPORTANT IN A CRASH INVESTIGATION?

THE CONTEXT: The Eastern Airlines of Boeing 737-800 with 132 people on board crashed in Guangxi province of southern China after a sudden plunge from cruising altitude at about the time when it would normally start to descend ahead of its landing.

THE EXPLANATION:

Black boxes

• These are two large metallic boxes containing recorders that are required to be kept on most aircraft, one in the front and the other in the rear. The recorders record the information about a flight, and help reconstruct the events leading to an aircraft accident.
• The cockpit voice recorder (CVR) records radio transmissions and other sounds in the cockpit, such as conversations between the pilots, and engine noises. The flight data recorder (FDR) records more than 80 different types of information such as altitude, airspeed, flight heading, vertical acceleration, pitch, roll, autopilot status, etc.
• Black boxes are mandatory on commercial flights. Their purpose on aircraft is not to establish legal liability, but to identify the causes of a mishap and, therefore, help to prevent adverse incidents in the future.

Orange, not black

Black boxes are a blazing, high-visibility orange in colour, so that crews looking for them at a crash site have the best chance of finding them. The use of black boxes dates back to the early 1950s, when, following plane crashes, investigators were unable to arrive at a conclusive cause for the accidents.

Surviving the crash

• In the initial days of the black box, a limited amount of data were recorded on wire or foil. Thereafter magnetic tape was used, and modern models contain solid state memory chips.
• The recording devices, each weighing about 4.5 kg, are stored inside a unit that is generally made out of strong substances such as steel or titanium, and are insulated from extreme heat, cold or wetness. The FDR is located towards the tail end of the aircraft because that is usually where the impact of a crash is the least.
• To make black boxes discoverable under water, they are equipped with a beacon that sends out ultrasound signals for 30 days.

Retrieving the data

• It usually takes 10-15 days to analyse the data recovered from the black boxes. Meanwhile investigators look for other clues such as taking accounts from air traffic control personnel and recordings of the conversation between ATC and the pilots’ moments before the crash.
• This helps investigators understand if pilots were aware that they were in a situation that was headed to such an eventuality and if so, whether they had reported any problems regarding controlling the aircraft.

6. ABEL PRIZE FOR 2022

THE CONTEXT: Dennis Parnell Sullivan, an American mathematician, has been announced as the winner of the Abel Prize 2022.

THE EXPLANATION:

• The math genius received the award for his work in topology and its branches, specifically “for his groundbreaking contributions to topology in its broadest sense, and in particular its algebraic, geometric and dynamical aspects.”
• Topology is a branch of mathematics that considers two objects of different shapes equivalent if they can be deformed into one another through shrinking, stretching and similar forces, but gluing foreign parts or tearing them apart is not allowed in the study of topology. This stream of mathematics is comparatively new as it was born in the late 19th century. The study of topology has been remarkably important in maths and other fields such as economics, data science and physics.

Abel Prize

• Abel Prize is an annual prize given annually to a person by the King of Norway, who has done a remarkable job in the field of mathematics.
• The annual award for mathematics is named after the great Norwegian mathematician Niels Henrik Abel. The award is inspired by the famous Nobel Prize. It is pertinent to note that there is no Nobel Prize for mathematics, though some mathematicians have won the prestigious Nobel Prize in different fields other than Mathematics.
• The Fields Medal is another annual award that is sometimes considered the ‘Mathematics Nobel’ but is only awarded to those below 40 years of age.

THE PRELIMS PRACTICE QUESTIONS

QUESTIONS OF THE DAY 24^th MARCH 2022

Q1. Consider the following statements about Abel Prize:

1. It recognizes contributions to the field of mathematics that are of extraordinary depth and influence.
2. It is established by the Sweden government in 2002.
3. The award has been awarded biennially since 2003.

Which of the statements given above is/are correct?

a) 1 only

b) 1 and 2 only

c) 1 and 3 only

d) 1, 2 and 3

ANSWER FOR 23^RD MARCH 2022

Answer: B

Explanation:

• Statement 1 is incorrect: It was launched during 12th Five Year Plan. It was approved and notified on 29.09.2014.
• Statement 2 is correct: It is centrally sponsored scheme.
• Statement 3 is correct: Government of India has recently announced its continuation of its implementation up to 2026.

1. Conservative Framing of the Hijab Issue and the Muslim Women’s Movement READ MORE
2. Teachable moments: CUET has merit but pitfalls too READ MORE

1. Mind, body & growth: How to ensure India’s government schools, healthcare deliver quality service for the majority READ MORE
2. THE PITIFUL CAUSES OF WAR AND THE DUTY OF EVERYONE TO STRIVE FOR PEACE READ MORE

CASE STUDY

1. MP to serve show-cause notice to IAS officer for tweet on Kashmir Files READ MORE

1. Tackling Delhi’s air pollution READ MORE
2. Where Does India’s New Arctic Policy Stand Amid Russian Invasion, Climate Change? READ MORE
3. The controversy over the proposed Mekedatu water project READ MORE

1. Delink the Rajya Sabha seat from privilege READ MORE
2. India’s law enforcement framework needs to strike a balance between legal and illegal READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. FDI INFLOW READ MORE
2. India crosses $ 400 bn milestone in exports READ MORE
3. The Artemis programme, NASA’s new moon mission READ MORE
4. Explained: What are black boxes, and why are they important in a crash investigation? READ MORE
5. Modi govt reorganises AGMUT civil service cadre, keeps IPS strength same in J&K after merger READ MORE
6. Kamrup vulture deaths: It is time to fight for the birds, if we want to secure our own future READ MORE
7. Jal Shakti Minister Gajendra Singh Shekhawat launches Sujalam 2.0 campaign for greywater management in New Delhi READ MORE

Main Exam    

GS Paper- 1

1. The controversy over the proposed Mekedatu water project READ MORE
2. Conservative Framing of the Hijab Issue and the Muslim Women’s Movement READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Delink the Rajya Sabha seat from privilege READ MORE
2. India’s law enforcement framework needs to strike a balance between legal and illegal READ MORE

SOCIAL ISSUES

1. Teachable moments: CUET has merit but pitfalls too READ MORE

INTERNATIONAL ISSUES

1. Explained: What is OIC, and what are its relations with India? READ MORE
2. India holds its own: Justified in resisting US pressure over Russia READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. Global uncertainties, India’s growth prospects: Normalisation of the economy has been disturbed and the growth objective would be served by apt fiscal policy moves READ MORE
2. India sets $400 billion export record: Its significance and key drivers of growth READ MORE
3. Priority sector lending needs a tweak READ MORE
4. Turning the spotlight on unemployment crisis READ MORE

ENVIRONMENT AND ECOLOGY  

1. Tackling Delhi’s air pollution READ MORE
2. Where Does India’s New Arctic Policy Stand Amid Russian Invasion, Climate Change? READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

1. Mind, body & growth: How to ensure India’s government schools, healthcare deliver quality service for the majority READ MORE
2. THE PITIFUL CAUSES OF WAR AND THE DUTY OF EVERYONE TO STRIVE FOR PEACE READ MORE

CASE STUDY

1. MP to serve show-cause notice to IAS officer for tweet on Kashmir Files READ MORE

Question for the MAIN exam

1. How far do you agree with this view that the culture of privilege and political commitment for Rajya Sabha seats affecting the quality of debate in Parliament? Analyse your view.

QUOTATIONS AND CAPTIONS

• I believe healthcare is a civil right. — Dennis Kucinich
• Normalisation of the economy has been disturbed and the growth objective would be served by apt fiscal policy moves.
• Lending institutions must demonstrate a moral duty towards the society and environment protection. The rationale of priority sector lending deserves a review.
• It is lack of demand rather than past baggage of bad loans that is holding back investment and demand for credit.
• On the medical oxygen front, the nation is unlikely to witness shortage; on the district hospital front, there is a long way to go; and in terms of science- and evidence-based decision making, some progress has been made.
• The Upper House of the Indian Parliament has become a parking lot for discredited politicians.
• The US understands the importance of India for Quad in the Indo-Pacific and that even if they do differ on Russia, their relationship is deep and resilient.
• The CUET should focus on not perpetuating the limitations of the Indian education system, which continues to focus on rote learning and exam-cracking techniques.
• India needs a mechanism that enables the law enforcement and security agencies to intervene legally, without having to adopt grey tactics.
• It is an irony that the language of rights leads to depoliticisation of these groups from the larger universal concern such as non-violence, secularism, and individual and collective freedom.
• Such a conception of reified autonomy then raises the question as to where do these parties stand in terms of the larger issues of humanism and social harmony.

50-WORD TALK

• In November 2021, at a meeting with Rajya Sabha Chairman Venkaiah Naidu, floor leaders of various parties expressed concern about the comments made on Parliament by Chief Justice NV Ramana. The CJI had described the lack of debate in the two Houses as a ‘sorry state of affairs’. The comment is bang on. There have been some notable speeches delivered in the House of Elders, but to largely empty benches. Our ‘learned’ parliamentarians not only do not know, they do not even care to know.
• As developed countries are being forced to raise their interest rates and inflationary pressures continue to mount in India and abroad, the RBI may find it advisable to raise the policy rate with a view to stemming inflationary pressures and outward flow of the U.S. dollar even as the growth objective would be served by fiscal policy initiatives.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and also exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

[WpProQuiz 185]

THE CONTEXT: Since the beginning of the COVID-19 pandemic, the monetary policy and liquidity operations have been geared towards mitigating its adverse impact on the economy. Accommodative monetary policy and other regulatory dispensations, asset classification standstill, temporary moratorium, and provision of adequate liquidity were put in place to provide a safety net to the system. In 2021-22, RBI’s measures like CRR reduction reached pre-set sunset dates, liquidity has been wound down partly but remains in surplus mode and regulatory measures have been realigned.

MONETARY DEVELOPMENTS

The Monetary Policy Committee (MPC) maintained the status quo on the policy repo rate from April to December 2021 after a substantial cut of 115 basis points (bps) during February May 2020 and a cumulative 250 basis points cut since February 2019. The repo rate which currently stands at 4 percent is the lowest in the last decade (Figure 1). Since May 2020, the policy rates have been on hold along with an accommodative monetary policy stance with forwarding guidance that this stance will continue as long as necessary to revive growth on a durable basis while ensuring that inflation remains within the target.

 Repo and reverse repo rate (percent)

LIQUIDITY CONDITIONS AND THEIR MANAGEMENT

• Liquidity has remained in surplus in the system since mid-2019 in sync with the easing of monetary conditions (Figure 6). The liquidity conditions were further eased during the year 2020-21 after the covid pandemic, and RBI has since then maintained ample surplus liquidity in the banking system to support growth.
• In 2021-22 so far, the RBI resumed normal liquidity operations in a phased manner and engaged in rebalancing liquidity from passive absorption under fixed-rate reverse repo under its Liquidity Adjustment Facility (LAF) to market-based reverse repo auctions (like Variable Rate Reverse Repo (VRRR)).
• At the same time it also ensured adequate liquidity in the system in consonance with the accommodative monetary policy stance to support growth. The liquidity conditions remained in surplus in 2021-22.

DEVELOPMENTS IN G-SEC MARKET

• The yields on 10-year G sec which had reached 8.2 percent on 26th September 2018 reduced substantially to reach 5.75 percent in June 2020. It has since then increased to stand at 6.45 percent as of 31st December 2021.

BANKING SECTOR

 The economic shock of the pandemic has been weathered well by the commercial banking system so far, even if some lagged impact is still in pipeline. The Survey also notes that the bank credit growth stands at 9.2 percent as of 31st December 2021.

GROWTH IN PERSONAL LOANS IMPROVED TO DOUBLE DIGITS:

• The Survey highlights that the growth in personal loans improved to 11.6% as compared with 9.2% in the previous year. Housing loans, the largest constituent of personal loans, registered a growth of 8 percent in November 2021. The growth of vehicle loans, the second-largest constituent, improved to 7.7 percent in November 2021 from 6.9 percent in November 2020.

CREDIT GROWTH

• The Survey states that the credit to Agriculture continued to register robust growth, and was at 10.4 percent (YoY) in 2021 as compared with 7 percent in 2020. Credit growth to micro & small industries accelerated to 12.7 percent in 2021 from 0.6 percent a year ago, reflecting the effectiveness of various measures taken by the Government and the RBI to boost credit flow to the micro, small and medium enterprises (MSME) sector.

MONETARY TRANSMISSION

• According to the Survey, Large surplus systemic liquidity, forward guidance of continuing with the accommodative stance, and the external benchmark system for pricing of loans in select sectors aided monetary transmission.

FACTORING IN INDIA

• The Survey states that Factoring is an important source of liquidity worldwide, especially for MSMEs. Hence, the Factoring Regulation (Amendment) Act, 2021 was enacted with the amendments in line with the recommendations of the UK Sinha Committee. The significant regulations about the amendment act have been notified by the RBI in January 2022. The amendments have liberalized the restrictive provisions in the Act and at the same time ensured that a strong regulatory / oversight mechanism is in place under RBI. Overall, this change would lead to the widening of the factoring ecosystem in the country and help MSMEs significantly, by providing added avenues for availing credit facilities.

DEPOSIT INSURANCE IN INDIA

• The Survey asserts that The Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, passed by the Parliament in 2021, made significant changes in the landscape of deposit insurance in India. The Survey also notes that Bank-group wise, the percentage of insured deposits vis-à-vis total deposits is 84 percent for RRBs, 70 percent for cooperative banks, 59 percent for SBI, 55 percent for PSBs, 40 percent for private sector banks, and 9 percent for foreign banks. Up to 31st March 2021, a cumulative amount of Rs 5,763 crores has been paid towards claims since the inception of deposit insurance (Rs 296 crore in respect of 27 commercial banks and Rs 5,467 crores in respect of 365 co-operative banks).

DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION (AMENDMENT) ACT(DICGC)

• Bill seeks to ensure that account holders will get up to Rs 5 lakh within 90 days of the RBI imposing a moratorium on their banks from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
• It provides immediate relief to lakhs of depositors, whose money is parked in stressed lenders such as the PMC Bank and other small cooperative banks.
• According to the previous provisions, the deposit insurance of up to Rs 5 lakh comes into play when the license of a bank is canceled, and the liquidation process starts and they needed 8-10 years for the depositors of a stressed bank to get their insured money and other claims.
• DICGC, a wholly-owned subsidiary of the RBI, provides an insurance cover on bank deposits.

DIGITAL PAYMENTS

• According to the Survey, Unified Payments Interface (UPI) is currently the single largest retail payment system in the country in terms of volume of transactions, indicating its wide acceptance In December 2021, 4.6 billion transactions worth Rs 8.26 lakh crore were carried out by UPI. RBI and the Monetary Authority of Singapore announced a project to link UPI and PayNow, which is targeted for operationalization by July 2022, Bhutan recently became the first country to adopt UPI standards for its QR code. It is also the second country after Singapore to have BHIM-UPI acceptance at merchant locations.

NBFCs

• The Survey states that the total credit of the NBFC sector increased marginally from Rs 27.53 lakh crore in March 2021 to Rs 28.03 lakh crore in September 2021. The credit intensity of NBFCs, measured by NBFC credit as a ratio of GDP has been rising consistently and stood at 13.7% at the end-March 2021. Industry remained the largest recipient of credit extended by the NBFC sector, followed by retail loans and services.

EQUITY

• The Survey observes that In April-November 2021, IPOs of 75 companies have been listed, garnering Rs 89,066 crore, as compared to 29 companies raising Rs 14,733 crore during April-November 2020, indicating a stupendous rise of 504.5 percent in fund mobilization. The money raised by IPOs has been greater than what has been raised in any year in the last decade by a large margin. Amount raised by way of preferential allotment increased by 67.3 percent during April-November 2021, as compared to the previous year. Overall, during April-November 2021, Rs 1.81 lakh crore has been raised through equity issues through diverse modes viz., public offerings, rights, QIP, and preferential issues.

MUTUAL FUND ACTIVITIES

• The Survey highlights that the net Assets under Management (AUM) of the mutual fund industry rose by 24.4 percent to Rs 37.3 lakh crore at the end of November 2021 from Rs 30.0 lakh crore end of November 2020. Net resource mobilization by mutual funds was Rs 2.54 lakh crore during April-November 2021, as compared to Rs 2.73 lakh crore during April-November 2020.

PENSION SECTOR

• The total number of subscribers under the Nthe ew Pension Scheme (NPS) and Atal Pension Yojana (APY) increased from 374.32 lakh as of September 2020 to 463 lakh as of September 2021, recording a growth of 23.7 percent over the year. The overall contribution under NPS grew by more than 29 percent during the period September 2020 – September 2021.
• Maximum growth in contribution was registered under the All Citizen model (51.29 percent) followed by Corporate Sector (42.13 percent), APY (38.78 percent), State Government Sector (28.9 percent), and Central Government Sector (22.04 percent).
• The Assets under Management (AUM) of NPS and APY stand at Rs 6.67 lakh crore at the end of September 2021 and thereby recorded an overall growth (YoY) of 34.8 percent.
• The gender gap in enrolments under APY has narrowed down with increased participation of female subscribers, which has increased from 37 percent as of March 2016; to 44 percent as of September 2021.

SCHEDULED COMMERCIAL BANKs (SCBs)

• The Survey observes that the Gross Non-performing Advances (GNPA) of the SCBs reduced to 6.9% in the year 2021, the Net Non-performing advances (NNPA) stands @2.2% Restructured Standard Advances (RSA) ratio of SCBs increased from 0.4 percent to 1.5 percent.
• Overall, the Stressed Advances ratio of SCBs increased to 8.5% at the end of September 2021. The Survey claims that COVID-19 related dispensations/moratoriums provided concerning asset quality contributed towards an increase in restructured assets and as a result, stressed advances ratio.

PUBLIC SECTOR BANKs (PSBs)

• The Survey highlights that the GNPA decreased to 8.6 percent at the end-September 2021, The Stressed Advances ratio of PSBs increased to 10.1 percent during the same period on account of rising in restructured advances. Based on the capital position as of September 30, 2021, all Public Sector and Private Sector banks maintained the Capital Conservation Buffer (CCB) well over 2.5 percent.

INSOLVENCY AND BANKRUPTCY CODE

• The Insolvency and Bankruptcy Code (IBC) has created a cohesive and comprehensive insolvency ecosystem. With the enactment of IBC, India has witnessed the birth of two professions, namely, the insolvency profession and the valuation profession that have professionalized insolvency services.
• The Code has opened possibilities of the resolution, including merger, amalgamation, and restructuring of any kind, which often requires professional help. This has created markets for services of Insolvency Professionals, Registered Valuers, Insolvency Professional Entities and expanded the scope of services of Advocates, Accountants, and other professionals.

Cross Border Insolvency

• Cross border insolvency signifies circumstances in which an insolvent debtor has assets and/or creditors in more than one country.
• Typically, domestic laws prescribe procedures, for identifying and locating the debtors’ assets; calling in the assets and converting them into a monetary form; making distributions to creditors by the appropriate priority, etc. for domestic creditors/debtors.
• However, there are various insolvency cases in which corporations owe assets and liabilities in more than one country.
• At present, the Insolvency and Bankruptcy Code, 2016 (IBC) provides for the domestic laws for the handling of an insolvent enterprise. IBC at present has no standard instrument to restructure the firms involving cross-border jurisdictions.
• The problem of not having a cross-border framework problem was also expressed by the National Company Law Tribunal (NCLT) in Mumbai in a cross-border insolvency case involving an Indian entity.
• India needs to adopt the United Nations Commission on International Trade Law (UNCITRAL) with certain modifications to make it suitable to the Indian context.
• It has been adopted by 49 countries until now, such as Singapore, the UK, the US, South Africa, Korea, etc. This law addresses the core issues of cross border insolvency cases with the help of four main principles:
• Access: It allows foreign professionals and creditors direct access to domestic courts and enables them to participate in and commence domestic insolvency proceedings against a debtor.
• Recognition: It allows recognition of foreign proceedings and enables courts to determine relief accordingly.
• Cooperation: It provides a framework for cooperation between insolvency professionals and courts of countries.
• Coordination: It allows for coordination in the conduct of concurrent proceedings in different jurisdictions.

HIGHLIGHTS

• The liquidity in the system remained in surplus.
• Repo rate was maintained at 4 per cent in 2021-22.
• RBI undertook various measures such as G-Sec Acquisition Programme and Special Long-Term Repo Operations to provide further liquidity.

The economic shock of the pandemic has been weathered well by the commercial banking system:

• YoY Bank credit growth accelerated gradually in 2021-22 from 5.3 per cent in April 2021 to 9.2 per cent as on 31^stDecember 2021.
• The Gross Non-Performing Advances ratio of Scheduled Commercial Banks (SCBs) declined from 11.2 per cent at the end of 2017-18 to 6.9 per cent at the end of September 2021.
• Net Non-Performing Advances ratio declined from 6 percent to 2.2 per cent during the same period.
• Capital to risk-weighted asset ratio of SCBs continued to increase from 13 per cent in 2013-14 to 16.54 per cent at the end of September 2021.
• The Return on Assets and Return on Equity for Public Sector Banks continued to be positive for the period ending September 2021.

Exceptional year for the capital markets:

• 89,066 crore was raised via 75 Initial Public Offering (IPO) issues in April-November 2021, which is much higher than in any year in the last decade.
• Sensex and Nifty scaled up to touch peak at 61,766 and 18,477 on October 18, 2021.
• Among major emerging market economies, Indian markets outperformed peers in April-December 2021.