Daily Current Affairs

Prelims Prominence - January 3, 2018

Economy

FRDI Bill
Fears over FRDI Bill misplaced: govt.
‘Bail-in won’t be applied to public sector banks, it will be used as a last resort in the case of private entities’

  • Clarification about the Financial Resolution and Deposit Insurance (FRDI) Bill by the govt. again
  • The depositors will be given preferential treatment in the event of liquidation of a bank, and the controversial bail-in clause will be used only with the prior consent of depositors.
  • The bail-in clause would not be applied to public sector banks, and it would be a tool of last resort — when a merger or acquisition is not viable — in the case of private sector banks.
  • The uninsured depositors, that is, beyond ₹1 lakh, of a banking company are treated on a par with unsecured creditors under the present law and paid after preferential dues, including government dues, in the event of its liquidation,”
  • As per the provisions of the FRDI Bill, the claims of uninsured depositors in the case of liquidation of a bank will be higher than those of the unsecured creditors and government dues.”
  • Under current laws, deposits with banks are insured up to ₹1 lakh. Under the FRDI law, the Resolution Corporation is empowered to increase this deposit insurance amount.
  • The FRDI Bill was introduced in Parliament in August 2017 and is under the consideration of a Joint Committee of Parliament.

Enlighten about Bail- In clause

  • The Bill proposes 'bail-in' as one of the methods to resolution, where the banks issue securities in lieu of the money deposited. In the past, the bail-in efforts had largely worked against depositors. In Cyprus, depositors lost almost 50 per cent of their savings when a bail-in was implemented

Electoral Reforms

Electoral Bonds

  • Union Finance Minister Arun Jaitley on Tuesday outlined the basic contours of the electoral bonds scheme announced during the 2017 Budget, including their denominations, validity, and eligibility of the purchasers.
  • “Electoral bonds would be a bearer instrument in the nature of a promissory note and an interest-free banking instrument,
  • “A citizen of India or a body incorporated in India will be eligible to purchase the bond.”

Enlighten about it -

  • Electoral bonds can be purchased for any value in multiples of 1,000, 10,000, 10 lakh, and 1 crore from any of the specified branches of the State Bank of India.
  • The purchaser will be allowed to buy electoral bonds only on due fulfilment of all the extant KYC norms and by making payment from a bank account.
  • It will not carry the name of the payee.
  • The bonds, aimed at increasing transparency in political funding, will have a life of 15 days during which they can be used to make donations to registered political parties that have secured not less than 1% of the votes polled in the last election to the Lok Sabha or Assembly.
  • The bonds shall be available for purchase for a period of 10 days each in the months of January, April, July and October, with an additional 30 days to be specified by the Central government in the year of a general election.
  • The bond shall be encashed by an eligible political party only through a designated bank account with the authorised bank.

Government Policies

FOCUS
National Register of Citizens

  • Assam government published the first draft of an updated National Register of Citizens (NRC) of the State.
  • The document is meant to establish the credentials of a bona fide citizen, there are several questions surrounding the NRC.

Why was it necessary to bring out the NRC in Assam -

  • The NRC is being updated in Assam to detect Bangladeshi nationals, who may have illegally entered the State after the midnight of March 24, 1971, the cut-off date.
  • This date was originally agreed to in the 1985 Assam Accord, signed between the then Rajiv Gandhi government and the All Assam Students’ Union (AASU).
  • However, successive State governments failed to achieve much progress in detecting and deporting foreigners as set out in the Assam Accord.
  • In 2005, another agreement was signed between the Centre, the then Tarun Gogoi government in Assam and the AASU where it was decided to update the NRC that was first published after the Census data of 1951 in post-Partition India.
  • Though the Gogoi government had started the NRC update as a pilot project in some districts, it was stopped after violence broke out in some parts of the State.
  • In July 2009, Assam Public Works (APW), an NGO, petitioned the Supreme Court for identification of Bangladeshi foreigners in the State and deletion of their names from the voters’ list.

NRC a court-mandated exercise

  • The publication of the first draft of the NRC by December 31, 2017 was ordered by the Supreme Court.
  • The top court has been hearing this case since July 2009 when Assam Public Works moved court to intervene in detecting and deporting Bangladeshis.
  • The NRC is a process by which a bona fide Indian citizen can be distinguished from a foreigner.
  • If a person from Assam is living or working in another part of the country, it is advisable to get oneself registered and establish one’s legacy as an “inhabitant” of Assam.

Infrastructure Development

Real state act status
Only 20,000 projects registered; just six States have permanent authorities

  • Only 20,000 housing projects have been registered under the Real Estate (Regulation and Development) Act, 2016, six months after the legislation seeking to protect the interests of homebuyers came into force last May.
  • This is just a fraction of the under-construction and proposed housing projects promoted by private developers.

Enlighten about RERA

  • The Act was initiated by the previous United Progressive Alliance government and passed by Parliament in 2016 and notified in May 2017.
  • The developer has to declare to buyers detailed information such as dates on which various government clearances are secured, floor plans, carpet area, progress in construction, and so on.
  • All real estate projects have to be registered with the Real Estate Regulatory Authority (RERA).
  • However, the Housing and Urban Affairs Ministry says only six States have set up permanent authorities, while 23 have set up interim ones.
  • The low registration of projects can be explained by the fact that many States have rules that favour private developers.
  • For example, Gujarat, Haryana and Uttar Pradesh have exempted ongoing projects from RERA.
  • Similarly, in Karnataka, projects that are 60% complete have been kept out of RERA.
  • In Maharashtra, the rules say that if any building in a project is completed, then it need not be registered.

Judicial Reforms

3,143 court halls coming up
Part of a ₹3,320-crore boost for developing judicial infrastructure in the country

  • The Union government has set aside ₹3,320 crore for the completion of a Centrally sponsored scheme to develop infrastructure for the judiciary by March 31, 2020.
  • “The Central government has approved the continuation of the Centrally Sponsored Scheme for Development of Infrastructure Facilities for Judiciary beyond the 12th Five Year Plan period, that is, from April 1, 2017 to March 31, 2020 with an estimated outlay of ₹3,320 crore.
  • However, the Centre said there were 5,984 judicial vacancies in the subordinate judiciary. That is, the vacancies amount to 26.38% of the sanctioned strength of 22,677.
  • This means that the number of vacancies in the subordinate judiciary has increased by over 1,000 from November 2016. Vacancies at that point of time were 4,937.
  • In January 2017, the National Court Management Systems Committee had filed an interim report in the Supreme Court saying that mere clearance of backlog was not the sole basis for determining the judge strength required in the subordinate judiciary to deal with pendency.

Finance

Central Pension Accounting Office (CPAO) celebrated its 29th Foundation Day

  • The Central Pension Accounting Office (CPAO) celebrated here today its 29th Foundation Day in the service of the Central (Civil) Pensioners.
  • CPAO was established on 1st January, 1990; primarily to cater to the needs of central civil pensioners and other stakeholders in the Ministries/ Departments and Banks.
  • The Central (Civil) pensions are authorized through Central Pension Accounting Office (CPAO) functioning under the Controller General of Accounts (CGA).
  • CPAO is administering the 'Scheme for Payment of Pensions to Central Government Civil Pensioners by Authorized Banks (both Public Sector and some Private sector Banks).
  • Its functions include, issue of Special Seal Authorisations (SSAs) for pension payments to Authorised Banks, preparation of budget for the Pension Grant and accounting thereof, reconciliation with and performance review of banks with respect to pension payments and disbursements & maintenance of the database of the Central Civil Pensioners etc.
  • CPAO was created with the primary objective of simplifying procedure and reducing the number of agencies for pension payment and to expedite the process of authorization, revision and transfer of pension through Authorized Banks.
  • The working of CPAO is fully computerized and it maintains a database of over 12 lakh Central (Civil) pensioners through Pension Authorisation, Retrieval and Accounting System (PARAS).
  • These pensioners are being provided pension related services by the CPAO through more than 70,788 paying bank branches all over the country.
  • CPAO has Pension Tracking System to check the latest status of the pension processing and SMS facility is also being provided to the pensioners at each stage.
  • CPAO has taken many steps under Digital India Mission like e-Scroll, e-SSA, e-PPO project etc. to reduce the paper movement and creation of digital record of the Special Seal Authorities (SSAs), PPO (Pension Payment Order) etc.
  • CPAO is also handling the grievances of the Central (Civil) Pensioners through its Grievance Redressal Mechanism which includes Web Responsive Pensioners Service (WRPS) facilitating information to pensioners on pension payments, facility to view and download latest orders and special seal authorities (SSAs) issued by CPAO among others.

Bilateral Relations

Exchange of list of nuclear sites between India and Pakistan

  • India and Pakistan have exchanged list of their nuclear installations and facilities with each other under the Agreement on the Prohibition of Attack against Nuclear installations.
  • This is the 27th consecutive exchange of such list between two countries after first list was exchanged on 1 January 1992.
  • This is an annual exchange of conducted in 1st January between them to prevent them from attacking each other’s nuclear facilities.
  • The exchange is part of an agreement between the two nuclear-armed neighbours meant to prevent attacks on nuclear facilities by each other.

Agreement on the Prohibition of Attack against Nuclear installations

  • It is a bilateral agreement signed between India and Pakistan that bars them from carrying out any surprise attack (or to assist foreign power to attack) on each other’s nuclear installations and facilities.
  • It was signed on 31st December 1988 and entered into force on 27 January 1991.
  • It was signed by then Indian Prime Minister Rajiv Gandhi and his Pakistani counterpart Benazir Bhutto.
  • Under it, both countries inform each other about their nuclear installations and facilities that need to be covered under the Agreement on 1 January every year.

Solar Energy

India’s second largest rooftop solar plant in UP

  • State-owned gas utility GAIL India Ltd has commissioned India’s second largest rooftop solar power plant in Uttar Pradesh.
  • It is 5.76 MWp (Mega Watt peak) solar plant installed at GAIL’s petrochemical complex at Pata in UP.
  • The plant has over roofs of warehouses covers a total area of 65,000 square meters.

Largest rooftop solar plant in India

  • India’s largest rooftop solar plant was commissioned in December 2015 by Tata Power Solar in Amritsar, Punjab.
  • It is 12 MWp solar rooftop project, which produces more than 150 lakh units of power annually. It offsets over 19,000 tonne of carbon emissions every year.

International

VAT introduced for the first time by Saudi Arabia, UAE

  • Saudi Arabia and United Arab Emirates (UAE) became first countries of Gulf Cooperation Council (GCC) to introduce Value Added Tax (VAT) for the first time to increase their revenue away from oil reserves.
  • The other members of 6 member GCC– Bahrain, Kuwait, Oman and Qatar — have also committed to introduce VAT, though some have delayed plans until at least 2019.

Enlighten about it -

  • The rate for VAT is set at 5% on the majority of goods and services including petrol and diesel, food, clothes, utility bills and hotel rooms.
  • Number of goods and services including medical treatment, financial services and public transport have been placed in either zero rated or in exempt category
  • In Saudi Arabia, more than 90% of budget revenues come from oil industry while in UAE it is roughly 80%.
  • Organisations such as the International Monetary Fund (IMF) had long called for Gulf countries to diversify their sources of income away from oil reserves.
  • Both countries have already taken steps to boost government coffers.

Science & Tech

NASA to launch Parker Solar Probe
To explore sun’s outer atmosphere

  • NASA is going to launch Parker Solar Probe in 2018 to explore the sun’s outer atmosphere.
  • It will be launched onboard of Delta IV Heavy launch vehicle. It will perform its scientific investigations in a hazardous region of intense heat and solar radiation.
  • Primary goals of mission: Trace how energy and heat move through solar corona. Explore what accelerates solar wind as well as solar energetic particles.

Enlighten about Parker Solar Probe mission

  • It is NASA’s planned robotic spacecraft to probe outer corona of Sun.
  • It has been designed and built by Johns Hopkins University Applied Physics Laboratory.
  • It is named after solar astrophysicist Eugene Parker. This is first time NASA spacecraft named after living person.
  • The spacecraft is designed to endure harsh environment near Sun, by approaching within 8.5 solar radii (5.9 million kilometers) to ‘surface’ (photosphere) of Sun where incident solar intensity is approximately 520 times intensity at Earth orbit.
  • It will be protected by solar shadow-shield made of reinforced carbon-carbon composite.
  • The spacecraft systems and scientific instruments are located in central portion of shield’s shadow, where direct radiation from Sun is fully blocked.
  • The primary power for mission is dual system of solar panels (photovoltaic array). Secondary source consists of much smaller secondary array power that uses pumped-fluid cooling to maintain operating temperature.
  • It will use Venus’ gravity during seven flybys over nearly seven years to gradually bring its orbit closer to Sun. It will achieve velocity of up to 200 km/s, making it fastest spacecraft to date.

Scientific goals

  • Determine structure and dynamics of magnetic fields at sources of solar wind.
  • Trace flow of energy that heats corona and accelerates solar wind.
  • Determine what mechanisms accelerate and transport energetic particles.
  • Explore dusty plasma near Sun and its influence on solar wind and energetic particle formation.