PERIYAR IAS CURRENT AFFAIRS 12-JUNE-2018
Paper 1:
Topic: Women related issues.
Pradhan Mantri Matru Vandana Yojana (PMMVY)
Context: After initial hiccups in implementing
the maternity benefit programme Pradhan Mantri Matru Vandana Yojana (PMMVY),
the government has finally made some headway and provided cash incentives to
nearly 23.6 lakh beneficiaries out of an estimated 51.6 lakh a year.
About PMMVY:
Pradhan Mantri Matritva Vandana Yojana
(PMMVY), previously Indira Gandhi Matritva Sahyog Yojana (IGMSY), is a
maternity benefit program run by the government of India.
§ PMMVY is implemented by the Ministry of Women &
Child Development in
collaboration with State Governments.
§ It is Centrally Sponsored Scheme under which the cost sharing ratio
between the Centre and the States & UTs with Legislature is 60:40, for
North-Eastern States & three Himalayan States, it is 90:10 and 100% Central
assistance for Union Territories without Legislature.
§ It is a conditional cash transfer scheme for pregnant and lactating women of 19
years of age or above for first two live births.
§ It provides a partial wage compensation to women for wage-loss during childbirth
and childcare and to provide conditions for safe delivery and good nutrition
and feeding practices.
§ In 2013, the scheme was brought under the National
Food Security Act, 2013 to implement the provision of cash maternity
benefit of ₹6,000 stated in the Act.
What’s important?
For Prelims and Mains: Key features of PMMVY.
Sources: the hindu.
Paper 2:
Topic: Government policies and interventions for
development in various sectors and issues arising out of their design and
implementation.
Working capital loan norms to be tightened
Context: The Reserve Bank of India (RBI) has
proposed a minimum 40% loan component for working capital funding of ₹150 crore
and above to bring in greater credit discipline and improve monetary
transmission. This will come into effect from October 1 and will be increased
to 60% from April 1, 2019.
Background:
Currently, working capital is mostly in the
form of cash credit for which interest rate is reset once a year. Also, cash
credit does not have a tight repayment schedule.
The proposed new norm will address the
following issues:
§ If there is a loan component then there will
be a repayment schedule which will put pressure on borrowers to manage their
liquidity.
§ Since the loan component will have a fixed
tenure, the reset clause can be invoked at the end of each tenure period.
Significance of the move:
By making it mandatory to have a loan
component associated with all working-capital facilities, it will be easier to
control the possible volatility which arises on account of cash credit limits.
Need for reforms:
The working capital requirements of borrowing
entities are met by banks through a cash credit limit, which is a revolving
facility. The cash credit facility places undue burden on the banks in managing
their liquidity requirements, with corresponding repercussions for RBI’s
liquidity operations. Currently, banks do not charge any commitment fee and do
not maintain any capital on the unknown portion of the cash credit and, thus,
it is classified as an unconditionally cancellable facility, which does not have
any risk weight under the marking rules.
Concerns:
While cash credit has its benefits, it also
poses several regulatory challenges such as perpetual roll-overs, transmission
of liquidity management from the borrowers to banks/RBI, hampering of smooth
transmission of monetary policy, etc.
What’s important?
§ For Prelims: nothing much.
§ For Mains: ease of doing business and
government efforts in this regard.
Sources: the hindu.
Topic: Government policies and interventions for
development in various sectors and issues arising out of their design and
implementation.
Credit enhancement fund
Context: The government is likely to launch a Rs
500-crore credit enhancement fund next month to facilitate infrastructure
investments by insurance and pension funds.
About the proposed fund:
§ The fund was first announced in the financial
budget for fiscal year 2016-17.
§ It will help in upgrading credit ratings of
bonds issued by infrastructure companies and facilitate investment from
investors like pension and insurance funds.
§ The initial corpus of the fund, to be sponsored by IIFCL (India Infrastructure Finance Company),
will be Rs 500 crore, and it will operate as a non-banking finance company.
§ IIFCL will hold a 22.5% stake in the NBFC,
while the Asian Infrastructure Investment Bank (AIIB) has offered to pick up a
10% stake. State-run SBI, Bank of Baroda and LIC will also have stakes in the
firm.
Need for a dedicated fund:
§ At present, only $110 billion is being
invested in infrastructure, against a requirement of $200 billion, leading many
analysts to classify India as an infrastructure deficit country.
§ At present, the banking system does a bulk of
infrastructure project financing and exposes itself to asset liability
management (ALM) mismatches and hence, alternatives like raising of money
through corporate bonds is necessary.
§ Also, bank lending to the infra segment has
slowed down in the past few years and the annual growth rates plummeted to 3%
between FY14 and FY17, against 43% from FY2000 to FY13. The NPAs from the
segment have also ballooned to 9% in FY17, from 3% in FY13.
What’s important?
§ For Prelims: About the proposed credit
enhancement fund and the promoters.
§ For Mains: Need for the fund and its
significance.
Sources: the hindu.
Paper 3:
Topic: Inclusive growth and issues arising from
it.
Business Correspondents
Context: The government is planning to make all
CSCs across the country Business Correspondents of Banks. 2.90 lakh CSCs will
be able to work as Business Correspondents (BCs).
Who are Business Correspondents?
Business Correspondents are retail agents
engaged by banks for providing banking services at locations other than a bank
branch/ATM. Banks are required to take full responsibility for the acts of
omission and commission of the BCs that they engage and have, therefore, to
ensure thorough due diligence and additional safeguards for minimizing the
agency risk. Basically, BCs enable a bank to expand its outreach and offer
limited range of banking services at low cost, as setting up a brick and mortar
branch may not be viable in all cases. BCs, thus, are an integral part of a
business strategy for achieving greater financial inclusion.
What they can do?
BCs are permitted to perform a variety of
activities which include identification of borrowers, collection and
preliminary processing of loan applications including verification of primary
information/data, creating awareness about savings and other products,
education and advice on managing money and debt counseling, processing and
submission of applications to banks, promoting, nurturing and monitoring of
Self Help Groups/ Joint Liability Groups, post-sanction monitoring, follow-up
of recovery.
They can also attend to collection of small
value deposit, disbursal of small value credit, recovery of principal /
collection of interest, sale of micro insurance/ mutual fund products/ pension
products/ other third party products and receipt and delivery of small value
remittances/ other payment instruments.
Who can be engaged as BCs?- The banks may
engage the following individuals/entities as BC:
§ Individuals like retired bank employees,
retired teachers, retired government employees and ex-servicemen, individual
owners of kirana / medical /Fair Price shops, individual Public Call Office
(PCO) operators, agents of Small Savings schemes of Government of
India/Insurance Companies, individuals who own Petrol Pumps, authorized
functionaries of well run Self Help Groups (SHGs) which are linked to banks,
any other individual including those operating Common Service Centres (CSCs).
§ NGOs/ MFIs set up under Societies/ Trust Acts
and Section 25 Companies.
§ Cooperative Societies registered under
Mutually Aided Cooperative Societies Acts/ Cooperative Societies Acts of
States/Multi State Cooperative Societies Act.
§ Post Offices.
§ Companies registered under the Indian
Companies Act, 1956 with large and widespread retail outlets, excluding Non
Banking Financial Companies (NBFCs).
Benefits:
§ Corporates with large and widespread retail
network bring in larger resources, higher organizational strength and financial
backing needed for a large network of BCs besides providing financial security
to the bank.
§ Corporates as BC would be more suitable to
render banking services in accordance with the bank’s internal policies and
standards than individuals and other small entities.
§ Over years, these companies have developed
efficient systems of monitoring and control over the retail outlets/franchises,
including cash management, which could be used to advantage. These outlets are
already dealing with the local population and are familiar with them.
§ The shopkeepers and other retail agents of
the large corporates may be more comfortable dealing with the company that they
are already used to and familiar with, rather than with the bank.
§ Failure of large companies as BCs would mean
a reputation risk to the company and endanger its substantive business. As
such, the companies could be relied upon to ensure that their agents do not
jeopardize their reputation.
§ A corporate is likely to continue as BC for a
longer period than individuals, thus ensuring continuity of services.
What’s important?
§ For Prelims: What are CSCs and who are BCs,
BCs- objectives, eligibility and functions.
§ For Mains: Significance and measures for
financial inclusion.
Sources: pib.
Topic: Awareness in space.
KATRIN experiment
Context: Researchers in Germany with the
Karlsruhe Tritium Neutrino experiment have started collecting data to determine
the mass of the universe’s lightest particle- neutrino. Those are sometimes
called “ghost particles” because they’re so difficult to detect.
Background:
Determining the mass of neutrinos is one of
the most important open questions in particle physics and will help scientists
better understand the history of the universe.
About KATRIN experiment:
§ The KATRIN experiment is currently set up and
commissioned on the Campus North of the Karlsruhe Institute for Technology.
§ The experiment is a collaboration between
national and international partners with currently more than 150 scientists,
engineers, technicians and students.
§ KATRIN measures the neutrino mass in a
model-independent way via ultrahigh precision measurements of the kinematics of
electrons from beta-decay.
About Neutrinos:
§ Neutrinos are the most abundant massive
elementary particles in nature. Due to their minimalistic properties they are
key particles for understanding physics on the smallest scale (elementary
particle physics) up to the largest scale – the universe (cosmology).
§ Neutrinos are the only elementary particles
of matter, which do not carry electrical or strong charge and thus are blind to
the electromagnetic and the strong interaction and cannot be bound.
§ In the context of particle physics they
participate only in the weak interaction. This made neutrinos the most
prominent candidate to explore with them the properties of the weak
interaction.
What’s important?
For Prelims and Mains: KATRIN experiment- objectives,
about neutrinos.
Sources: the hindu.
Topic: Awareness in space.
Interstellar Mapping and Acceleration Probe
What is it? It a science mission of NASA planned
for launch in 2024 that will sample, analyze, and map particles streaming to
Earth from the edges of interstellar space.
About IMAP mission:
§ The Interstellar Mapping and Acceleration
Probe (IMAP) mission will help researchers better understand the boundary of
the heliosphere, a sort of magnetic bubble surrounding and protecting our solar
system. This is the fifth mission in NASA’s Solar Terrestrial Probes (STP)
Program portfolio.
§ Another objective of the mission is to learn
more about the generation of cosmic rays in the heliosphere. Cosmic rays
created locally and from the galaxy and beyond affect human explorers in space
and can harm technological systems, and likely play a role in the presence of
life itself in the universe.
§ The spacecraft will be positioned about one
million miles (1.5 million kilometers) away from Earth towards the Sun at what
is called the first Lagrange point or L1. This will allow the probe to maximize
use of its instruments to monitor the interactions between solar wind and the
interstellar medium in the outer solar system.
Why study Heliosphere?
This region is where the constant flow of
particles from our Sun, called the solar wind, collides with material from the
rest of the galaxy. This collision limits the amount of harmful cosmic
radiation entering the heliosphere.
What’s important?
For Prelims and Mains: Heliosphere, IMAP
mission- key objectives, Lagrange points.
Sources: nasa.
Facts for Prelims:
Rail Madad:
What is it? It is a recently launched App by
Indian Railways which aims to expedite & streamline passenger grievance
redressal. It is a part of RPGRAMS (Railway Passenger Grievance Redressal and
Management System), which has been developed by Northern Railway (Delhi
Division).
Salient features of Rail Madad application
are:
§ Rail MADAD (Mobile Application for Desired
Assistance During travel) registers a complaint with minimum inputs from
passenger (option of photo also available), issues unique ID instantly and
relays the complaint online to relevant field officials for immediate action.
The action taken on complaint is also relayed to passenger through SMS, thus
fast tracking the entire process of redressal of complaints through
digitisation.
§ Rail MADAD also displays various helpline
numbers (e.g., Security, Child helpline etc) and provides direct calling
facility for immediate assistance in one easy step.
River Bhavani:
Why in News? Flood alert has been sounded to
people living along River Bhavani banks in Mettupalayam taluk, Tamil Nadu.
About Bhavani river:
§ Bhavani River, is a tributary of the River
Cauvery originating from the South West Corner of the Nilgiri hills of the
Western Ghats in Tamil Nadu. It drains Tamil Nadu, Kerala and Karnataka.
§ It is the second longest river in Tamil Nadu.
It enters kerala through Palakkad district. It passes through the Silent Valley
National Park in Kerala.
§ Twelve major rivulets including West and East
Varagar rivers join Bhavani draining the southern Nilgiri slopes.
Hurricane Bud:
Context: Hurricane Bud is expected to hit the
Pacific coast of Mexico.
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