PERIYAR IAS CURRENT AFFAIRS 18-NOVEMBER-2017
Topic: Functions and responsibilities
of the Union and the States, issues and challenges pertaining to the federal
structure, devolution of powers and finances up to local levels and challenges
therein.
EK BHARAT-SHRESHTHA BHARAT
Context:
Under ‘Ek Bharat-Shreshtha
Bharat’ Yojana, Madhya Pradesh has been made partner of Manipur and Nagaland.
The Higher Education Department of Madhya Pradesh has been made nodal
department to implement the scheme.
§ As part of this, Madhya Pradesh
will participate in Sangai Mahotsav being organized in Manipur from November 21
to 30. Similarly, teams of Manipur and Nagaland will take part in Lok Rang and
Bal Rang programmes to present their cultural programmes and to apprise people
with their culture.
§ Besides, translation work of
Nagaland’s books has also been started in Madhya Pradesh to introduce people of
the state with their activities and cultural heritage. Other activities are
also being conducted in this regard.
About Ek Bharat Shreshtha
Bharat:
What is it?
“Ek Bharat Shreshtha Bharat”
was announced by Hon’ble Prime Minister on 31st October, 2015 on the occasion
of the 140th birth anniversary of Sardar Vallabhbhai Patel. Subsequently, the
Finance Minister announced the initiative in his Budget Speech for 2016-17.
What is it for?
Through this innovative
measure, the knowledge of the culture, traditions and practices of different
States & UTs will lead to an enhanced understanding and bonding between the
States, thereby strengthening the unity and integrity of India.
Implementation:
All States and UTs will be
covered under the programme. There will be pairing of States/UTs at national
level and these pairings will be in effect for one year, or till the next round
of pairings. The State/UT level pairings would be utilized for state level
activities. District level pairings would be independent of the State level
pairings.
Significance:
The activity will be very
useful to link various States and Districts in annual programmes that will
connect people through exchanges in areas of culture, tourism, language,
education trade etc. and citizens will be able to experience the cultural
diversity of a much larger number of States/UTs while realising that India is
one.
Sources: the hindu.
Topic: Important International
institutions, agencies and fora, their structure, mandate.
South Asia Regional Training
and Technical Assistance Center (SARTTAC)
Context:
An Interim Meeting of the
Steering Committee of the International Monetary Fund (IMF)’s South Asia
Regional Training and Technical Assistance Center (SARTTAC) was held recently
in national capital to assess the Center’s activities since its inauguration in
February 2017 and to review the Fiscal Year 2018 Work Plan.
Officials from all Six (6)
Member countries attended the meeting, together with the Development Partner
representatives (the European Union, the United Kingdom, Australia, and USAID),
and IMF staff.
About SARTTAC:
What is it?
SARTTAC, the newest addition to
the IMF’s global network of fourteen regional centers, is a new kind of
capacity development institution, fully integrating customized hands-on
training with targeted technical advice in a range of macroeconomic and
financial areas, and generating synergies between the two. It was inaugurated
at Delhi in February 2017.
Finance:
SARTTAC is financed mainly by
its six member countries — Bangladesh, Bhutan, India, Maldives, Nepal, and Sri
Lanka — with additional support from Australia, the Republic of Korea, the
European Union and the United Kingdom.
Goal:
SARTTAC’s strategic goal is to
help its member countries strengthen their institutional and human capacity to
design and implement macroeconomic and financial policies that promote growth
and reduce poverty.
What it does?
SARTTAC will allow the IMF to
meet more of the high demand for technical assistance and training from the
region. Through its team of international resident experts, SARTTAC is expected
to become the focal point for the delivery of IMF capacity development services
to South Asia.
Sources: pib.
Topic: Important International institutions, agencies and fora,
their structure, mandate.
Shanghai Cooperation
Organization
Context:
The Shanghai Cooperation
Organization Meeting of the Ministers of Member States responsible for Foreign
Economic and Foreign Trade was recently held in Russia. This is the first
Ministerial Conference on Trade organized by the Shanghai Cooperation Organization
after India became a full member of the Organization in June 2017.
About SCO:
What is it?
The Shanghai Cooperation
Organisation, also known as the Shanghai Pact, is a Eurasian political,
economic, and military organisation which was founded in 2001 in Shanghai by
the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and
Uzbekistan. Apart from Uzbekistan, the other five countries have been a part of
the Shanghai 5 since 1996. The cooperation was renamed to Shanghai Cooperation
Organisation after Uzbekistan joined the organisation in 2001.
New members: India and Pakistan joined
SCO as full members in June 2017 in Astana, Kazakhstan.
The SCO counts four observer
states, namely the Islamic Republic of Afghanistan, the Republic of
Belarus, the Islamic Republic of Iran and the Republic of Mongolia.
The SCO’s main goals are as
follows: strengthening mutual trust and neighbourliness among the
member states; promoting their effective cooperation in politics, trade, the
economy, research, technology and culture, as well as in education, energy,
transport, tourism, environmental protection, and other areas; making joint
efforts to maintain and ensure peace, security and stability in the region; and
moving towards the establishment of a democratic, fair and rational new
international political and economic order.
Sources: the hindu.
Topic: Important International
institutions, agencies and fora, their structure, mandate.
International Civil Aviation
Organization’s (ICAO)
Context:
Under the International Civil
Aviation Organization’s (ICAO) Universal Safety
Oversight Audit Programme, a five member audit team recently carried out the
audit of India in areas of Personal Licensing, Airworthiness, Operations,
Legislation and Organization from 6th to 16th November. The audit involved
verification of response provided by DGCA against protocol questions made
available by ICAO.
§ As per preliminary feedback,
the audit team was satisfied with the safety system put in place by the safety
regulator. As per procedure laid down by ICAO, the audit team presents its
report to the headquarter team and draft report is made available to the state
in about 90 days.
§ The state is required to
provide its comment and draw its action plan on various aspects of the report
and make it available to ICAO within 45 days. Thereafter the report will be
finalised and made available to member states.
About ICAO:
What is it?
The International Civil
Aviation Organization (ICAO) is a UN specialized agency, established by States
in 1944 to manage the administration and governance of the Convention on
International Civil Aviation (Chicago Convention).
What it does?
§ ICAO works with the
Convention’s 191 Member States and industry groups to reach consensus on
international civil aviation Standards and Recommended Practices (SARPs) and
policies in support of a safe, efficient, secure, economically sustainable and
environmentally responsible civil aviation sector.
§ These SARPs and policies are
used by ICAO Member States to ensure that their local civil aviation operations
and regulations conform to global norms, which in turn permits more than
100,000 daily flights in aviation’s global network to operate safely and
reliably in every region of the world.
§ ICAO also coordinates
assistance and capacity building for States in support of numerous aviation
development objectives; produces global plans to coordinate multilateral
strategic progress for safety and air navigation; monitors and reports on
numerous air transport sector performance metrics; and audits States’ civil
aviation oversight capabilities in the areas of safety and security.
Sources: pib.
GS Paper 3:
Topic: Indian Economy and issues relating to planning, mobilization
of resources, growth, development and employment.
Credit ratings and how are they
given
Context:
US-based rating agency Moody’s
has upgraded India’s sovereign credit rating by a notch to ‘Baa2’ from Baa3 and
changed the outlook to stable from positive. Moody’s has also raised India’s
long-term foreign-currency bond ceiling to Baa1 from Baa2, and the long-term
foreign-currency bank deposit ceiling to Baa2 from Baa3.
The rating upgrade comes after
a gap of 13 years – Moody’s had last upgraded India’s rating to ‘Baa3’ in 2004.
In 2015, the rating outlook was changed to ‘positive’ from ‘stable’.
Reasons for upgrade:
The decision to upgrade the
ratings is underpinned by Moody’s expectation that continued progress on
economic and institutional reforms will, over time, enhance India’s high growth
potential and its large and stable financing base for government debt, and will
likely contribute to a gradual decline in the general government debt burden
over the medium term, the rating agency said in a statement.
Also, while India’s high debt
burden remains a constraint on the country’s credit profile, Moody’s believes
that the reforms put in place have reduced the risk of a sharp increase in
debt, even in potential downside scenarios. Reforms such as Goods and Services
Tax (GST), demonetisation, measures to fight bad loans, Aadhaar and labor
market reforms etc pushed Moody’s to upgrade India rating.
What is a credit rating?
A credit rating is an
assessment of the creditworthiness of a borrower. Individuals, corporations and
governments are assigned credit ratings — whoever wants to borrow money. Individuals
are given ‘credit scores,’ while corporations and governments receive ‘credit
ratings.’
Why do countries get credit
ratings?
National governments, not
countries, are assigned credit ratings by agencies like Standard & Poor,
Moody’s and Fitch. Governments require ratings to borrow money. They are also
given ratings on their worth as investment destinations. A country requests a
credit rating agency to evaluate its economic and political environment and
arrive at a rating. This is done to position itself as a destination for
foreign direct investment.
What factors decide these
ratings?
There are several reasons
behind rating a government’s creditworthiness. One of these is political risk,
like taxation, currency value and labour laws. Another is sovereign risk where
a country’s central bank can change its foreign exchange regulations. These
risks are taken into account and ratings assigned accordingly.
Sources: the hindu.
Topic: Indian Economy and issues relating to planning, mobilization
of resources, growth, development and employment.
Bad bank to deal with stressed
assets
Context:
Asian Bankers Association
Chairman Daniel Wu recently said that India’s Insolvency and Bankruptcy Code is
not the only way to deal with stressed borrowers and the government should look
at other options, including the formation of a bad bank.
How does a bad bank work?
While the government has not
charted out any guidelines on the structure of a bad bank, such an institution
would be largely based on the principles of an asset restructuring company
(ARC), which buys bad loans from the commercial banks at a discount and tries
to recover the money from the defaulter by providing a systematic solution over
a period of time. Since a bad bank specialises in loan recovery, it is expected
to perform better than commercial banks, whose expertise lies in lending.
Why a bad bank is likely to
succeed in India?
§ A single government entity will
be more competent to take decisions rather than 28 individual PSBs.
§ Capacity building for a complex
workout can be better handled by the government which has regulatory control
and has management skillsets in public sector enterprises.
§ Foreign investors with both
risk capital and risk appetite would be more in a government- led initiative,
knowing that regulatory risks would stand considerably mitigated in various
stages of resolution, including take outs.
Things to consider while
creating a bad bank:
§ The first is that it should be
based on a criterion as any such exercise creates a moral hazard which should
be eschewed.
§ 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 so that they work hard to qualify for the sale
of bad assets to the bad bank. This, in fact, will ensure better governance
standards too.
Sources: ET.
Topic: pollution.
Furnace oil and pet coke
Context:
The Supreme Court has requested
all States and Union Territories to move forward towards a nationwide ban on
the use of pet coke and furnace oil to power up industries, in a bid to fight
pollution.
Background:
The Environment Bench of the
Supreme Court had already ordered a ban on the industrial use of pet coke and
furnace oil in the States of Uttar Pradesh, Haryana and Rajasthan on October
24. This ban specifically came after an Environment Pollution Control Authority
Report recommended the ban on sale, distribution and use of furnace oil and pet
coke in the National Capital Region (NCR).
Need for ban:
Automobile fuel — petrol and
diesel — has 50 parts per million (PPM) of the highly dangerous sulphur.
Comparatively, furnace oil has 15,000- 23,000 ppm sulphur and petcoke
69,000-74,000 ppm sulphur. They emit sulphur oxide and nitrogen oxide, which
form particulate matter, tiny particles that can penetrate deep into the lungs.
§ Although the DPCC had declared
them as “unacceptable fuel” way back in 1996, but they are not banned outside
Delhi borders and are being increasingly used by industries in the NCR,
aggravating the pollution problem.
§ Furnace oil being the last
grade produced by refineries is extremely polluting and pet coke is even more
polluting.
Sources: the hindu.
Facts for Prelims:
Aadi Mahotsav:
What is it?
It is a fortnight long tribal
festival on the theme of ‘A Celebration of the Spirit of Tribal Culture,
Cuisine and Commerce’. It is being held at Delhi.
Features:
More than 750 tribal artisans
and artisans from over 25 states are taking part in the festival. The Mahotsav
will feature exhibition-cum-sale of tribal handicrafts, art, paintings, fabric,
jewellery and much more. A special feature of the festival is tribal India
cuisine, recreated and presented in delectable forms to suit urban tastes by
special tribal chefs.
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