DAILY CURRENT AFFAIRS (OCTOBER 21, 2022)

POLITY AND CONSTITUTION

1.COMPETITION COMMISSION OF INDIA IMPOSED A FINE ON MAKEMYTRIP, GOIBIBO AND OYO

THE CONTEXT: Recently,the Competition Commission of India (CCI) fined online hotel booking sites MakeMyTrip and Goibibo, and IPO-bound budget hotel chain OYO for a total of over Rs. 392 crore ($47 million) for anti-competitive conduct in hotel room listings.

THE EXPLANATION:

The competition watchdog had been investigating the companies since 2019, after the Federation of Hotel & Restaurant Associations of India (FHRAI) lodged a complaint that MakeMyTrip gave “special treatment” to SoftBank-backed Oyo on its platform. It had also complained that a listing agreement between the companies was creating a dominance in the online hotel booking market, and that MakeMyTrip used deep discounting methods.

What did the CCI say in its order?

  • In a redacted order made public, the CCI said that MakeMyTrip and Goibibo will have to fix their “market behaviour”. According to CCI, apart from the monetary penalty, “MMT-Go [MakeMyTrip] is directed to suitably modify its agreements with hotels/chain hotels, to remove/abandon the price and room availability parity obligations imposed by it on its hotel/chain hotel partners with respect to other OTAs”.
  • This essentially means that MakeMyTrip cannot force hotels it has partnered with to offer identical or higher prices on other platforms.
  • “The Commission is of the view that the commercial arrangement between OYO and MMT-Go which led to the delisting of FabHotels, Treebo and the independent hotels, which were availing the services of these franchisors, was anticompetitive”.

VALUE ADDITION:

About Competition Commission of India (CCI)

  • Competition Commission of India (CCI) is a statutory and quasi-judicial body and works under the Ministry of Corporate Affairs.
  • The Competition Commission of India (CCI) was established in March 2009 (established in 2003 but became fully functional in 2009) by the Government of India under the Competition Act, 2002 for the administration, implementation, and enforcement of the Act.
  • Competition Act, 2002: It repealed and replaced the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act).
  • Under the Act, the Competition Commission of India and the Competition Appellate Tribunal (COMAT) have been established.
  • The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises, and regulates combinations (acquisition, acquiring of control, and Merger and acquisition), which causes or are likely to cause an appreciable adverse effect on competition within India.
  • In 2017, functions of the COMAT were subsumed under National Company Law Appellate Tribunal (NCLAT).
  • Composition: It has a chairperson and 6 Members appointed by the Central Government.
  • These members are appointed for 5 years or 65 years of age (whichever comes first). However, these members are eligible for reappointment.

Objectives and functions of CCI:

  • To Eliminate practices having an adverse effect on competition
  • To promote and sustain competition
  • To protect the interests of consumers
  • To ensure freedom of trade in the markets of India
  • To Establish a robust competitive environment through:
  • Proactive engagement with all stakeholders, including consumers, industry, government, and international jurisdictions.
  • Being a knowledge-intensive organization with high competence level.
  • Professionalism, transparency, resolve, and wisdom in enforcement.

ENVIRONMENT, ECOLOGY AND CLIMATE CHANGE

2. ‘MISSION LIFE’ (LIFESTYLE FOR ENVIRONMENT)

THE CONTEXT: Recently, Prime Minister in the presence of U.N. Secretary-General Antonio Guterres, launched ‘Mission LiFE’ (Lifestyle For Environment), a new initiative for sustainable and healthy lifestyle at the Statue of Unity in Gujarat.

THE EXPLANATION:

  • Listing climate change and global warming as the main challenges before the world and mankind, the Prime Minister underlined that Mission LiFE makes the fight against climate change democratic with the contribution of everyone in per own capacity.
  • According to him, India and the UN have joined hands in this new initiative which will become a global success. “India had proposed the International Day of Yoga, which was supported by the UN. Today it is inspiring millions of people around the world to lead a healthy life.”

OBJECTIVE OF THE INITIATIVE:

  • LiFE envisions replacing the prevalent ‘use-and-dispose’ economy—governed by mindless and destructive consumption—with a circular economy, which would be defined by mindful and deliberate utilization.
  • The Mission intends to nudge individuals to undertake simple acts in their daily lives that can contribute significantly to climate change when embraced across the world.
  • LiFE plans to leverage the strength of social networks to influence social norms surrounding climate. The Mission plans to create and nurture a global network of individuals, namely ‘Pro-Planet People’ (P3), who will have a shared commitment to adopt and promote environmentally friendly lifestyles.
  • Through the P3 community, the Mission seeks to create an ecosystem that will reinforce and enable environmentally friendly behaviours to be self-sustainable.

3. ‘APPROVAL OF GM MUSTARD MAY THREATEN FOOD SECURITY, INCREASE PESTICIDE TOLERANCE’

THE CONTEXT: According to experts, genetically modified crops may soon get the central government nod, a move that could pose a threat to crop diversity, food security and increase tolerance for use of pesticides.

THE EXPLANATION:

  • Genetic Engineering Appraisal Committee (GEAC), which functions in the Union Ministry of Environment, Forest and Climate Change, might approve the commercial cultivation of modified mustard. A group of activists have also written to the ministry, objecting to the potential approval of “unsafe, unneeded and unwanted genetically modified organisms.”
  • Also, they move might also severely affect the agrarian sector, as the seed market will be in the hands of private companies instead of farmers.
  • This would be the first time since 2002 for such approval to grow GM mustard, a genetically modified hybrid variety of the mustard species, for consumption by the masses.
  • However, experts fear that such a move would have multiple repercussions for crop diversity and threaten food security as a whole.
  • The green signal for GM mustard was given by the central government in May 2017 after trials in Punjab Agricultural University (PAU) and Indian Agricultural Research Institute (IARI), New Delhi.
  • However, it remained pending for approval from the environment ministry. The decision to approve it took a pause after activists and farmer bodies approached the Supreme Court to oppose the move.

ABOUT GM MUSTARD:

  • Mustard is one of India’s most important winter crops sown between mid-October and late November.
  • It a self-pollinating crop difficult to hybridise naturally as it cross-pollinate.
  • It is largest edible oil yielding crop of India.
  • DMH (Dhara Mustard Hybrid)-11 is genetically modified variety of mustard developed by Centre for Genetic Manipulation of Crop Plants at Delhi University.

VALUE ADDITION:

Genetic Engineering Appraisal Committee (GEAC) :

  • The Genetic Engineering Appraisal Committee (GEAC) functions in the Ministry of Environment, Forest and Climate Change (MoEF&CC).
  • It is responsible for appraisal of activities involving large scale use of hazardous microorganisms and recombinants in research and industrial production from the environmental angle.
  • The committee is also responsible for appraisal of proposals relating to release of genetically engineered (GE) organisms and products into the environment including experimental field trials.
  • GEAC is chaired by the Special Secretary/Additional Secretary of MoEF& CC and co-chaired by a representative from the Department of Biotechnology (DBT). Presently, it has 24 members and meets every month to review the applications in the areas indicated above.

SECURITY AFFAIRS

4. ‘SCORCHED-EARTH TACTICS’

THE CONTEXT: Recently, German Chancellor Olaf Scholz said Russian President Vladimir Putin was using “energy and hunger” as weapons but his “scorched earth tactics” would not help Russia win the war over Ukraine.

THE EXPLANATION:

What are scorched earth tactics?

  • Scorched earth tactics form part of a military strategy which seeks to destroy anything that could be of use to the enemy, including energy supplies, bridges, provision stores, agricultural fields, road and railway links, etc. The destruction could be carried out by the enemy, or by the retreating army of a country which does not want invaders to use its resources. Harming civilians as part of this strategy has been banned under the 1977 Geneva Convention.
  • According to the Oxford Reference, the “term was first used in English in 1937 in a report of the Sino-Japanese conflict, and is apparently a translation of Chinese jiāotŭ.”
  • The strategy seeks to deplete the enemy’s resources to sustain warfare, and also break their morale by inflicting heavy hardships on combatants and non-combatants alike.

Over the past week, Russia has rained missiles on Ukraine’s cities, destroying civilian infrastructure, including power and water supply lines. As winter approaches, lack of electricity is likely to cause serious suffering. Experts have commented that the tactic is being used by Russia as on the actual battlefield, its military is experiencing setbacks.

Some past instances

  • Scorched earth policy has been part of warfare since ancient times, with the nomad Scythians using the tactics in their war against the Persian Achaemenid Empire led by King Darius the Great (who ruled 522 BCE to 486 BCE). The nomadic herders Scythians would hide in the steppes after destroying food supplies and poisoning wells.
  • In India, the armies of Maratha leader Chhatrapati Shivaji were known for their scorched earth tactics. Some historians have said that while the Maratha leaders looted and burnt enemy towns, they were under orders to not harm civilians or desecrate religious sites

GOVERNMENT SCHEMES AND INITIATIVES IN NEWS

5. CENTRE LAUNCHES PROGRAMME TO STRENGTHEN KASHI-T.N. BOND- KASHI-TAMIL SANGAMAM’

THE CONTEXT: Amid the continued debates over the imposition of Hindi across the country, the Union Government announced a month-long programme to “strengthen” and “rekindle” the cultural and civilisational bond between Tamil Nadu and Varanasi.

THE EXPLANATION:

  • Named the ‘Kashi-Tamil Sangamam’, the programme would be held from November 16 to December 16 this year.
  • “The period will cover the Tamil month of Karthikeya during which all Tamil households go pray to Lord Shiva. This programme, which would be a part of the Ek Bharat Shreshtha Bharat initiative, is aimed at rekindling the civilisational link between the new Kashi and Tamil Nadu — both deep centres of knowledge.
  • As part of the programme, a total of 2,500 people divided into 12 groups would be travelling to Varanasi by train during the month-long period. The journey points in Tamil Nadu would be Chennai, Rameswaram and Coimbatore. The groups would include students, teachers, artisans and people from various walks of life.
  • The knowledge partners for the Kashi-Tamil Nadu Sangamam programme would be IIT-Madras and the Banaras Hindu University, while the Uttar Pradesh government would be the host State.
  • The other stakeholders would be departments of culture, textiles, food-processing, commerce and films.

SIGNIFICANCE:

  • The Kashi Tamil Sangamam is a first of its kind initiative to showcase the entire Tamil cultural heritage.
  • Activities will be centred around a series of themes – ancient texts, literature, spirituality, philosophy, music, dance, drama, yoga, Ayurveda, handlooms, handicrafts etc.
  • Bharatanatyam dance, Carnatic music, Tamil folk music, Nadaswaram music concert, Thevaram thiruvasagam in Tamil music form, debate on Kamba Ramayana, Villu-paattu, Bommalattam, Silambattam, Kavadi Attam, Karagam, Pattimandram, Tamil folk dances Karakattam, Poikkal Kuthirai, Thappaattam, etc., have been planned across different locations in Varanasi.

VALUE ADDITION:

EK BHARAT SHRESHTHA BHARAT PROGRAMME

Ek Bharat Shreshtha Bharat programme aims to enhance interaction & promote mutual understanding between people of different states/UTs through the concept of state/UT pairing. The states carry out activities to promote a sustained and structured cultural connect in the areas of language learning, culture, traditions & music, tourism & cuisine, sports and sharing of best practices, etc.

The mission of Ek Bharat Shreshtha Bharat is as follows:

  • To CELEBRATE the Unity in Diversity of our Nation and to maintain and strengthen the fabric of traditionally existing emotional bonds between the people of our Country;
  • To PROMOTE the spirit of national integration through a deep and structured engagement between all Indian States and Union Territories through a year-long planned engagement between States;
  • To SHOWCASE the rich heritage and culture, customs and traditions of either State for enabling people to understand and appreciate the diversity that is India, thus fostering a sense of common identity
  • To ESTABLISH long-term engagements and,
  • To CREATE an environment which promotes learning between States by sharing best practices and experiences.

6. U.P. BAGS TOP HONOURS AT PMAY-U AWARDS 2021

THE CONTEXT: Recently, Union Ministry of Housing & Urban Affairs recognized the states   for PMAY-U Awards 2021.

THE EXPLANATION:

  • Uttar Pradesh bagged the first position followed by Madhya Pradesh and Tamil Nadu at second and third place, respectively.
  • Poll-bound Gujarat saw five special category awards — for performance related to Affordable Rental Housing Complexes and ‘Convergence with other Missions’ — coming its way.
  • Madhya Pradesh got three special category awards followed by Jammu and Kashmir, which was adjudged the ‘Best Performing UT’ alongside Dadra and Nagar Haveli and Daman & Diu.
  • Also, Kudumbashree has received two national awards of the Pradhan Mantri Awas Yojana (PMAY) Urban Award 2021.
  • According to the Ministry of Housing and Urban Affair, 1.23 crore houses were sanctioned under the scheme of which 64 lakh — over 52% — have already been completed and delivered while the rest were at various stages of completion.
  • Also, the Ministry highlighted that PMAY-U, had emerged as the largest housing scheme in the world since its launch seven years ago in June, 2015 with the number of houses sanctioned under it so far — 1.23 crore — “9 times the number that was achieved in the 10 years of the previous regime” between 2004 and 2014.

VALUE ADDITION:

Pradhan Mantri Awas Yojana (Housing for All – Urban):

PMAY-U scheme is aimed at confronting and tiding over the shortage of housing facilities in urban India for beneficiaries under the Economically Weaker Section (EWS), Low-Income Groups (LIGs) and Middle Income Groups (MIGs) categories.

Scope

  • The Mission covers the entire urban area consisting of Statutory Towns, Notified Planning Areas, Development Authorities, Special Area Development Authorities, Industrial Development Authorities or any such authority under State legislation which is entrusted with the functions of urban planning & regulations.
  • “Housing for All” Mission for urban area is being implemented during 2015-2022 and this Mission will provide central assistance to implementing agencies through States and UTs for providing houses to all eligible families/beneficiaries by 2022.
  • Mission will be implemented as Centrally Sponsored Scheme (CSS) except for the component of credit linked subsidy which will be implemented as a Central Sector Scheme.

THE PRELIMS PRACTICE QUESTION

QUESTION OF THE DAY

Q1. Groningen gas fields, recently seen in news, are located in-

a) Russia

b) Netherlands

c) S.A.

d) Mexico

Answer: B

Explanation:

Please refer to the given map-

 

 

 

 

 




TOPIC : THE BAD BANK- ISSUES, CHALLENGES AND WAY FORWARD

THE CONTEXT: In September 2021, Union Finance Minister announced that the Cabinet had approved Rs 30,600 crore in security receipts to be issued by the National Asset Reconstruction Company (NARC) or Bad Bank towards the resolution of bad loans.

WHAT IS THE PROPOSAL?

  • The move is another step in the direction of making the NARC operational.
  • Banks have identified bad loans worth Rs 2 lakh crore, which will be shifted to the NARC for resolution, and nearly Rs 90,000 crore of bad debt would be resolved in the first phase.
  • The NARC is now awaiting a licence of operation from the Reserve Bank of India after applying with the central bank.
  • The government indicated that the licence is under process and could be issued soon.

THE DEVELOPMENT SO FAR

  • The National Asset Reconstruction Company Limited (NARCL) has already been incorporated under the Companies Act. It will acquire stressed assets worth about Rs 2 lakh crore from various commercial banks in different phases.
  • Another entity — India Debt Resolution Company Ltd (IDRCL), which has also been set up — will then try to sell the stressed assets in the market. The NARCL-IDRCL structure is the new bad bank.
  • To make it work, the government has okayed Rs 30,600 crore to be used as a guarantee.

How will the NARCL-IDRCL work?

  • The NARCL will first purchase bad loans from banks, and it will pay 15% of the agreed price in cash, and the remaining 85% will be in the form of “Security Receipts”. When the assets are sold, with the help of IDRCL, the commercial banks will be paid back the rest.
  • Suppose the bad bank is unable to sell the bad loan or has to sell it at a loss. In that case, the government guarantee will be invoked and the difference between what the commercial bank was supposed to get and what the bad bank was able to raise will be paid from the Rs 30,600 crore that the government has provided.

ALL YOU NEED TO KNOW ABOUT BAD BANK

What is the bad bank?

  • A bad bank is a financial entity set up to buy banks’ non-performing assets (NPAs) or bad loans.
  • Setting up a bad bank aims to help ease the burden on banks by taking bad loans off their balance sheets and getting them to lend again to customers without constraints.
  • After purchasing a bad loan from a bank, the bad bank may later try to restructure and sell the NPA to investors who might be interested in buying it.
  • Generating profits is usually not the primary purpose of a bad bank – the objective is to ease the burden on banks, hold a large pile of stressed assets, and get them to lend more actively.

Why Bad Bank?

  • Indian banks’ pile of bad loans is a significant drag on the economy, and it’s a drain on banks’ profits.
  • Due to the lockdown imposed last year, the proportion of banks’ gross non-performing assets is expected to rise sharply from 7.5% of gross advances in September 2020 to at least 13.5% of gross advances in September 2021.
  • Because profits are eroded, public sector banks (PSBs), where the bulk of the bad loans reside, cannot raise enough capital to fund credit growth.
  • Lack of credit growth, in turn, comes in the way of the economy’s return to an 8% growth trajectory. Therefore, the bad loan problem requires effective resolution.

Evolution of Concept of Bad Bank:

  • The concept was pioneered at the Pittsburgh-headquartered Mellon Bank in 1988 in response to problems in the bank’s commercial real estate portfolio.
  • According to McKinsey & Co, the concept of a “bad bank” was applied in previous banking crises in Sweden, France, and Germany.

PROS AND CONS OF SETTING UP A BAD BANK

PROS 

  • In one quick move, a bank will get rid of all its toxic assets, which were eating up its profits.
  • When the recovery money is paid back, it will further improve the bank’s position. Meanwhile, it can start lending again.
  • It can help consolidate all bad loans of banks under a single exclusive entity. A single government entity will be more competent to take decisions rather than 28 individual PSBs.
  • International experience: The troubled asset relief program, also known as TARP, implemented by the U.S. Treasury in the aftermath of the 2008 financial crisis, was modelled around the idea of a bad bank. Under the program, the U.S. Treasury bought troubled assets, such as mortgage-backed securities, from U.S. banks at the peak of the crisis and later resold them when market conditions improved. According to reports, it is estimated that the Treasury, through its operations, earned nominal profits.

CONS

  • Former RBI governor Raghuram Rajan has been one of the critics, arguing that a bad bank backed by the government will merely shift bad assets from the hands of public sector banks, which the government owns, to the hands of a bad bank, which the government again owns.
  • Analysts believe that unlike a bad bank set up by the private sector, a bad bank backed by the government is likely to pay too much for stressed assets.
  • While this may be good news for public sector banks, which have been reluctant to incur losses by selling off their bad loans at low prices, it is bad news for taxpayers, who will once again have to foot the bill for bailing out troubled banks.

AN ANALYSIS OF THE MOVE?

IS IT A RIGHT MOVE?

  • Professional Management: The new bad bank can be equipped with professional management which will be capable enough to run the assets and sell them while making a profit.
  • Competition: The new bad bank can provide the required competition to the private bad banks and thus provide better pricing to the banks for their NPAs.
  • Failure of the current system of Private Bad Banks: Banks are scared of selling the bad loans to private sector bad banks at a heavy discount due to the fear of being accused of causing loss to the bank and exchequer. Thus, the current system has failed.
  • Ownership of new Bad Bank: The new bad bank should be owned by the Public sector banks and by private banks that want to join in and their respective shares of ownership can be their share in the total bad loan portfolio. Thus, the profit by resolution will accrue to the banks themselves and thus, the scare of causing loss to the bank and exchequer is eliminated.

CASE OF JHABUA POWER: IBC vs. Bad Bank

1. Jhabua power for resolution under Insolvency and Bankruptcy code on account of shortage of working capital.
2. Bids: Two bids were received for Jhabua power.
a. NTPC Bid – 1900 Crore at the rate of Rs. 3.2 per MW.
b. Adani Power – 750 crores at Rs 1.25 per MW.
Lesson: If NTPC had not entered the bid, the plant, in all probability, could have been purchased by Adani power at the cost to the exchequer. This would have given less money to the government and also brought the wrath of CVC/CBI and further litigation. A Bad bank can do this with expertise and manage the asset until it finds a suitable buyer.

WILL A ‘BAD BANK’ REALLY HELP EASE THE BAD LOAN CRISIS?

  • Some critics point out that a key reason behind the bad loan crisis in public sector banks is the nature of their ownership. Unlike private banks, which are owned by individuals with strong financial incentives to manage them well, public sector banks are managed by bureaucrats who may often not have the same commitment to ensuring these lenders’ profitability. To that extent, bailing out banks through a bad bank does not address the root problem of the bad loan crisis.
  • Further, there is a huge risk of moral hazard. Commercial banks that a bad bank bails out are likely to have little reason to mend their ways. After all, the safety net provided by a bad bank gives these banks more reason to lend recklessly, and thus, further exacerbate the bad loan crisis.

2. HOW WILL BANKS BENEFIT FROM NARC?

For banks, mainly state-owned banks, the NARC is heaven-sent. It will allow banks to transfer the bad loans from their balance sheets to NARC. The reduction of bad loans on balance sheets will enable banks to free up capital that was locked up to cover the bad loans. Eventually, a successful resolution of the bad loan will also allow banks to reverse a substantial chunk of their provisions depending on the amount recovered, which will boost their earnings.

3. HOW WILL NARC BENEFIT THE ECONOMY?

  • The majority of the bad loan pile in India is stuck with the state-owned lenders. The pandemic has worsened the crisis, although relatively less than expected, RBI is projecting Indian banking sector GNPAs to rise in 2021-22.
  • Public sector banks account for the majority of loans generated in the Indian economy. Because their capital has been stuck in providing for a large amount of bad loans, their ability to lend has been constrained.
  • For post-COVID recovery, banks must be free of their bad loans for providing fresh loans, which will play a major role in recovery.

BUT THERE ARE SOME CONCERNS ALSO

1. Current Situation: India already has 28 asset reconstruction companies in operation and banks have been unable to sell their bad loans to these entities.
2. Just Shifting Blame: Raghuram Rajan, in his book “I Do What I Do” suggests that by creating bad bank, we are just shifting blame from the bank to Bad Bank. If the bad bank is owned by Public Sector, the reluctance to act will be shifted to bad bank.
3. Insolvency and Bankruptcy Code: The enactment of IBC has reduced the need for having a bad bank as a transparent and open process is available to all lenders for resolving insolvency.
4. Government Resources: COVID-19 has already strained the government resources and setting up a bad bank will further put tremendous strain on the resources.
5. Pricing: The price at which toxic assets are transferred are not market-determined and price discovery might not happen.

THINGS TO CONSIDER WHILE CREATING A BAD BANK

  • The first is that it should be based on a criterion that any such exercise should not create a moral hazard.
  • Second, there have to be strict performance criteria for the banks selling such assets. This can be through a multi-stage approach where these assets are bought piecemeal by the bad bank based on how future incremental assets perform.
  • Third, the criteria for buying assets should be transparent and a pecking order must be drawn up where probably the restructured assets get priority.
  • Last, a competitive approach should prevail among the banks to work hard to qualify for the sale of bad assets to the bad bank. This, in fact, will ensure better governance standards too.

“BAD BANK A BAD IDEA FOR INDIA”- RAGHURAM RAJAN

Former RBI governor Raghuram Rajan was ‘fundamentally’ opposed to the idea of a bad bank. Reserve Bank of India (RBI) former governor Raghuram Rajan view the concept of a good bank and bad bank may not be relevant for India since much of the assets backing the banks’ loans are viable or can be made viable. He emphasized the need to deepen the corporate bond market.

Why he opposed the idea?

  • Rajan was of the view that banks should themselves recover their dues.
  • He also believed that in specific cases where the loans are not appropriately prices, the transfer of NPA to the “bad bank” would create further issues.
  • Additionally, he thought that the idea of a good and bad bank might not make sense for India.
  • He felt that most of the assets backing the banks’ loans are viable or could be made viable.

How other Countries solve NPA Problem?

  • There have been several successful instances of resolution of the NPA problem in different countries in the past. For example, asset management companies formed in Sweden after the banking crisis of the early 1990s have done well. One of the underlying features of the resolution of the banking crisis in Sweden was political unity. Political unity eased the passage through parliament of measures to support the financial system.
  • The Korea Asset Management Corp. has also been successful in resolving the bad debt problem in Korea after the Asian financial crisis.
  • The bank investment programmes under the Troubled Asset Relief Program, implemented after the 2008 financial crisis in the US, has earned positive returns for the government.

WAY FORWARD

1. Capitalisation of Banks: It is being said that bad banks will not be beneficial unless we simultaneously also recapitalise the banks. It can help improve their capacity to lend.
2. Two Tiered Bad Bank Structure: A two tiered bad bank structure can be created as follows
a. First Tier (NARCL): It will include an Asset Reconstruction company fully backed by the government, which will buy bad loans from banks and issue security receipts to them.
b. Second Tier (IDRCL): It will include an Asset Management Company, which would be run by private and public bodies, including banks, turnaround professionals etc.
3. Legal Backing: Parliament can pass a law to set up a bad bank and empower it to recover from borrowers, with minimum legal hassles and respect to the acquisition or disposal of bad assets.
4. Learn from International Experience: Bad banks have successfully resolved NPAs in countries such as UK, the US, Spain, Malaysia, France, Finland, Belgium, Germany, Austria and Sweden. India can learn from their experience.

CONCLUSION: A bad bank, in reality, could help improve bank lending not by shoring up bank reserves but by improving banks’ capital buffers. To the extent that a new bad bank set up by the government can improve banks’ capital buffers by freeing up capital, it could help banks feel more confident to start lending again. However, the only sustainable solution is to improve the lending operation in PSBs.




Ethics Through Current Development (21-10-2022)

  1. Seeking permanent bliss or illusory happiness? READ MORE
  2. Out and about: Long paroles for Bilkis case convicts were unjustifiable. And their remission must be scrutinised READ MORE
  3. Happiness & suffering READ MORE



Today’s Important Articles for Geography (21-10-2022)

  1. Addressing north India’s burning issue sustainably: The issue of crop stubble burning cannot be addressed in a silo and using short-term, unsustainable solutions READ MORE
  2. Oceans are warming twice as fast than the 1960s and it could get much worse READ MORE



Today’s Important Articles for Sociology (21-10-2022)

  1. The importance of understanding many tongues READ MORE
  2. Proselytization is a colonial practice: The colonial hangover is visible in many aspects of national life but often its religious aspect is overlooked which needs to be addressed READ MORE
  3. Gut health has impact on immunity and ageing READ MORE
  4. Global Hunger Index: A lesson in how not to measure hunger READ MORE
  5. Laying a strong foundation in school READ MORE



Today’s Important Articles for Pub Ad (21-10-2022)

  1. Should Dalit Muslims and Dalit Christians be given SC status? READ MORE
  2. Why the tenure of D Y Chandrachud as Chief Justice of India is reason to hope READ MORE
  3. Strong laws to protect encryption are the need of the hour READ MORE



WSDP Bulletin (21-10-2022)

(Newspapers, PIB and other important sources)

Prelim and Main

  1. Explained | Saving the vultures of Tamil Nadu READ MORE
  2. Centre launches programme to strengthen Kashi-Tamil Nadu bond READ MORE
  3. P. bags top honours at PMAY-U Awards 2021 READ MORE
  4. PM Modi launches Mission LiFE in the presence of U.N. Secretary General READ MORE
  5. Reduce, reuse and recycle for a sustainable future, says PM READ MORE
  6. NASA’s Webb Telescope Captures Sharpest ‘Pillars of Creation’ Portrait Ever READ MORE
  7. Rupee recovers on RBI intervention READ MORE
  8. Who is Shehan Karunatilaka, the winner of Booker Prize 2022 for Fiction? READ MORE
  9. The next CJI will have the longest tenure in the last decade READ MORE
  10. October storm in Bay of Bengal after 3 years: When, where it is likely to hit READ MORE

Main Exam

GS Paper- 1

  1. The importance of understanding many tongues READ MORE
  2. Proselytization is a colonial practice: The colonial hangover is visible in many aspects of national life but often its religious aspect is overlooked which needs to be addressed READ MORE
  3. Gut health has impact on immunity and ageing READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

  1. Should Dalit Muslims and Dalit Christians be given SC status? READ MORE
  2. Why the tenure of D Y Chandrachud as Chief Justice of India is reason to hope READ MORE
  3. Strong laws to protect encryption are the need of the hour READ MORE

SOCIAL ISSUES

  1. Global Hunger Index: A lesson in how not to measure hunger READ MORE
  2. Laying a strong foundation in school READ MORE

INTERNATIONAL ISSUES AND RELATIONS

  1. Checks, no balance: India must look at all its options with China to ensure listing of terrorists READ MORE
  2. What should India’s goal be during its G20 presidency? READ MORE
  3. US TARGETS CHINA IN INDO-PACIFIC READ MORE

 GS Paper- 3

ECONOMIC DEVELOPMENT

  1. Why modern banks are inherently unstable READ MORE
  2. As a slowdown looms, how long will India’s economic and geopolitical ‘sweet spot’ last? READ MORE

ENVIRONMENT AND ECOLOGY

  1. Addressing north India’s burning issue sustainably: The issue of crop stubble burning cannot be addressed in a silo and using short-term, unsustainable solutions READ MORE
  2. Oceans are warming twice as fast than the 1960s and it could get much worse READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

  1. Seeking permanent bliss or illusory happiness? READ MORE
  2. Out and about: Long paroles for Bilkis case convicts were unjustifiable. And their remission must be scrutinised READ MORE
  3. Happiness & suffering READ MORE

Questions for the MAIN exam

  1. Political parties are just representatives of the Indian people, but this is the Indian people, who are sovereign in India schemes like Electoral Bonds are making Indian democracy fragile. Discuss.
  2. ‘Overcoming poverty is not a gesture of charity but an act of justice’. Analyse how philanthropy can be the catalyst for making make India a poverty-free country?

QUOTATIONS AND CAPTIONS

  • You can’t go back and change the beginning, but you can start where you are and change the ending.
  • Political parties are vehicles of representation for the Indian people –the Indian Constitution makes the Indian people sovereign and not political parties of Government –and the Electoral Bonds Scheme takes away the right of people to know about the information related to political parties.
  • Governors seem to have an exaggerated notion of their own roles under the Constitution.
  • Governor are expected to defend the Constitution and may use their powers to caution elected regimes against violating the Constitution, but this does not mean that they can use the absence of a time-frame for decision-making and the discretionary space given to them to function as a parallel power centre.
  • An enabling policy regime, proactive government initiatives and supportive regulatory administration allowed the private and public sector entities in the financial sector to overcome longstanding challenges of exclusion of a large part of the population.
  • Philanthropy can be the catalyst for innovation and action, while markets and governments can bring the much-needed scale to on-ground efforts.
  • The US doesn’t have the people to help industry grow. That’s where India can step in, with its high-quality innovators and researchers.
  • While there may be reasons to quibble over terms such as ‘hunger’ or ‘nutrition’, the upshot of the reports is that India still has the world’s largest number of poor and the highest number of malnourished children.
  • Gene-editing has been a major scientific advancement, but the limits of such endeavours must be known as there are inherent dangers in doing so.
  • Trust deficit mars Sino-India relations, as the tense Line of Actual Control poses a big challenge for the leadership.

ESSAY TOPIC

  • Education is the kindling of a flame, not the filling of a vessel.
  • Overcoming poverty is not a gesture of charity but an act of justice.

50-WORD TALK

  • Vladimir Putin’s declaration of martial law in Russian-occupied Ukraine is a desperate bid to shore up regime authority amid military reverses. Emergency laws have also been imposed elsewhere in Russia, to contain public fury over battlefield losses. Putin might end up fighting the decisive battles of this war at home.

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 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.



Day-313 | Daily MCQs | UPSC Prelims | GEOGRAPHY

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