Daily Current Affairs

Prelims Prominence - October 24, 2017

Bilateral Relations

India – Bangladesh resolves to fight terror together

  • Sushma Swaraj is in Bangladesh on a two-day visit

India’s projects in Bangladesh

  • India has been extending grant assistance for small socio-economic projects in Bangladesh
  • In the past three years alone, 24 such grant projects have been completed which include construction of students’ hostels, tube-wells, cultural centres, and orphanages among others
  • Presently 58 projects, including city development projects in Rajshahi, Khulna and Sylhet, are under implementation
  • The two nations have already agreed on the construction of a petroleum products pipeline
  • It will link Siliguri with Parbatipur, for the benefit of the people of northwestern Bangladesh, as a grant in aid project
  • The development is also seen as India’s attempt to counter rising Chinese influence in Bangladesh, where Beijing is trying to make inroads in infrastructure ventures

Scheme for Bangladeshi freedom fighters

  • India will also offer five-year multiple entry visas for Bangladeshi freedom fighters and is planning a scheme for their medical treatment in India

India’s new chancery complex opened in Dhaka

  • India’s new chancery complex opened at Baridhara diplomatic enclave in Dhaka, capital city of Bangladesh.
  • It was inaugurated by External Affairs Minister Sushma Swaraj on the last day of her Bangladesh visit.
  • She also inaugurated 15 development projects

Contemporary Issues

RTI issue

  • A plea has been filed in the Supreme Court for an early hearing of a petition challenging a 2011 government notification, which includes the Central Bureau of Investigation (CBI) on the list of “intelligence and security organisations” exempted from disclosing information to the public under the Right to Information Act; when the organisation was only an investigating agency and not a security or intelligence organisation.

RTI

  • Right To Information Act 2005, provides for special power to seek and get information from government authorities.
  • It was a promise to the citizens by Parliament for transparency and accountability .
  • It is incumbent on the government to provide the reasons for constricting the citizen’s fundamental right to information.
  • Section 24 of the RTI Act 2005 says that this law is not applicable to the intelligence and security organisations specified in the Second Schedule.
  • However, the only exception these organisations have is for information on allegations of corruption and human rights violations
  • Second Schedule: It includes 26 intelligence and security agencies under its ambit
  • Some of them are Intelligence Bureau (IB), Research and Analysis Wing (RAW) of the Cabinet Secretariat, Directorate of Revenue Intelligence (DRI), Special Frontier Force (SFF), Border Security Force (BSF), National Security Guards (NSG) and Assam Rifles
  • Section 8 of the RTI: It deals with exemption from disclosure of information under this legislation.
  • It says that there shall be no obligation on Government to provide any citizen information, disclosure which will affect :
  • India’s sovereignty and integrity, security, strategic, scientific or economic interests of the state and relations with foreign States or will lead to incitement of an offence.

Economy

SEBI on Shell Firms

  • The Sebi is looking to tighten listing norms to prevent fly-by-night operators from getting listed on stock exchanges.

SEBI Norms

  • Sebi norms now specify that a company wishing to get listed needs to have a track record of generating profits and distributing dividends for at least three of the five years preceding the time it goes public, have a minimum net worth of Rs1 crore in each of the preceding three years and have net tangible assets of at least Rs3 crore in each of the three preceding years.
  • A company cannot make a share allotment in a public issue if the number of prospective allottees is less than 1,000.
  • A grading/rating system for initial public offerings have also been proposed so that investors have a basic idea of the quality of the company they are investing in.
  • This rating can be given either by a credit rating agency or any external expert or by Sebi itself.

Why this move by SEBI ?

  • Sebi wants to ensure that companies with stronger businesses and a potential to maintain profitability during the initial years of listing are allowed to go public.
  • The plan is to increase the minimum net worth requirement, the proportion of assets held in tangible form, the number of years of profitability and the minimum number of public investors to whom shares are allotted.

Impact of this move

  • It may prevent many small genuine businesses from getting listed and raising capital from the public to grow.
  • However, it will definitely help to a large extent to ensure that only strong, mid-sized or larger companies are able to get listed.

Way forward

  • Firstly, action must be taken against companies that have defaulted and do not have enough liquidity.
  • Sebi should not abruptly put unnecessary regulatory burdens on genuine businesses.

Infrastructure Development

Rashtriya Rail Sanraksha Kosh ( RRSK)

  • The Ministry of Railways may ask the Finance Ministry to fund its share of the railway safety fund that is, Rashtriya Rail Sanraksha Kosh (RRSK) this year as the public utility is has an earnings shortfall of at least 10,000 crore in 2017-18.
  • The actual income of the Indian Railways was 8.45% lower than the targeted earnings.
  • Although the Railways’ passenger and goods earnings had increased this year compared with the last year, its sundry earnings had declined sharply by during this period.
  • Income from non-fare revenues, including land lease, advertising, PSU dividends and catering department, form part of the sundry earnings.

Rashtriya Rail Sanraksha Kosh- The Safety Fund

  • Finance Minister had announced the setting up a special safety fund with a corpus of more than 1 lakh crore over a period of five years in Budget 2017-18.
  • In the first six months of the current financial year, the Indian Railways had utilised a quarter of the safety fund.

Rashtriya Rail Sanraksha Kosh

  • It has been set up on the recommendations of a high-level safety review committee under Dr. Anil Kakodkar.
  • The fund is utilised for track improvement, bridge rehabilitation, rolling stock replacement, human resource development, improved inspection system, and safety work at level crossing, among other things.
  • It is a non lapsable safety fund over a period of five years.
  • The Finance Ministry would contribute 15,000 crore annually towards the fund, the Ministry of Railways would fund the balance 5,000 crore every year.

Economy

Legal Entity Identifier compulsory for companies with over Rs 5 crore exposure

  • The RBI is set to make LEI compulsory for companies having aggregate fund-based and non-fund based exposure over Rs 5 crore
  • Banks will be required to capture this number in the Central Repository of Information on Large Credits (CRILC) database that captures details of loan above Rs 5 crore
  • Past decisions of the RBI on LEI: RBI has made LEI mandatory for transactions in interest rate, forex and credit derivative market

Benefits of the LEI number

  • It will enable banks to effectively monitor debt exposure of companies having businesses in multiple sectors and dealing with large number of banks and NBFCs
  • It will make it easier for banks to detect frauds and willful defaulters and prevent ever-greening of loans
  • The need for such a system was felt after the 200b8 global financial crisis and global body, the Financial Stability Board, worked on the global structure of the LEI system
  • It would also enable banks in preventing multiple loans to companies against the same collateral

Who can issue the LEI number?

  • Firms can obtain their LEI code from Legal Entity Identifier India Ltd.(LEIL)
  • The LEIL is a wholly owned subsidiary of Clearing Corporation India Ltd.
  • LEIL is accredited by the Global Legal Entity Identifier Foundation (GLEIF) and recognised by RBI as issuer of LEI under the Payment and Settlement Systems Act, 2007
  • Apart from the LEIL, any local operating unit accredited by GLEIF can issue LEI numbers.

Enlighten about LEI –

  • The Legal Entity Identifier (LEI) is a global reference number that uniquely identifies every legal entity or structure that is party to a financial transaction, in any jurisdiction
  • It is a unique 20 digit alphanumeric code that is assigned to a legal entity

What is the purpose of an LEI?

  • The global LEI system has been set up by regulatory authorities, including G20 and the Financial Stability Board, to address the global financial crisis

Skill India

India’s first Pradhan Mantri Kaushal Kendra for Skilling in Smart Cities inaugurated in New Delhi

  • India’s first Pradhan Mantri Kaushal Kendra (PMKK) for Skilling in Smart Cities was inaugurated at Mandir Marg, New Delhi.
  • It has been set up Pradhan Mantri Kaushal Vikas Yojana by National Skill Development Corporation (NSDC) in collaboration with New Delhi Municipal Council (NDMC).

Enlighten about it

  • Pradhan Mantri Kaushal Vikas Yojana is flagship scheme of MSDE to enable large number of youth to take up industry relevant skill training to make them employable.
  • Under it, the newly inaugurated NDMC-PMKK Centre for Skilling in Smart leverages NDMC infrastructure for skilling initiatives.
  • The PMKK Centre for Smart Cities will provide skill training for unemployed youth through its short-term training (STT) module and contribute to capacity building of municipal employees through Recognition of Prior Learning (RPL) program.
  • It has exemplary heritage building of approximately 30,000 sq ft with a capacity of skilling 4,000 youth annually.
  • It will be catering needs of healthcare and solar energy sectors and will be managed by one of NSDC’s affiliated training partners – Orion Edutech.

Infrastructure Development

PM launches South Asia’s first Ro-Ro ferry service in Gujarat

  • Prime Minister Narendra Modi inaugurated first phase of Ro-Ro (roll-on, roll-off) ferry service between Ghogha in Bhavnagar district and Dahej in Bharuch district in the Gulf of Cambay, Gujarat.
  • It is South Asia’s first world class Ro-Ro ferry service.
  • The Ro-Ro ferry services are vessels made to carry wheeled cargo (such as cars, trucks, semi-trailer trucks, trailers, and railroad cars) that are driven on and off ferry on their own wheels or using a platform vehicle.
  • It is opposite of lift-on and lift-off (lo-lo) vessels which uses crane to load and unload cargo

Defence/Bilateral Relations

Sri Lankan Coast Guard commissions OPV SURAKSHA gifted by India

  • Sri Lankan Coast Guard has commissioned Offshore Patrol Vessel (OPV) SURAKSHA gifted by India at Colombo port. It is first OPV of Sri Lankan Coast Guard.
  • Sri Lankan Coast Guard Ship (SLCGS) Suraksha earlier belonged to Indian Coast Guard (ICG) and was known as Varuna.
  • It was officially handed over to Sri Lanka Navy at ceremony held at Kochi Port in India in September 2017.

INCG Varuna

  • It was inducted into Indian Coast Guard in February 1988 and provided three decades of service in India.
  • ‎It was fourth of in its class of OFV built by the Mumbai-based Mazagon Dock.
  • It has numerous operational achievements and had recorded a number of arrests of smugglers with gold worth several crore in the late 1980s. I

International Organisations

4th ASEAN Defence Ministers’ Meeting-Plus to be held in Philippines

  • India will be represented by Union Defence Minister Nirmala Sitharaman.
  • It is her first foreign visit as Defence Minister.

Enlighten about ADMM plus meeting

  • The ADMM Plus meeting is expected to discuss ways to enhance defence and security co-operation among the member nations to effectively counter various transnational security challenges facing the region.
  • It is also likely to discuss enhancing maritime security cooperation among the member countries.
  • It will also deliberate extensively on the situation in Afghanistan and Syria besides China’s growing military presence in the disputed South China Sea.

ADMM-Plus

  • The ADMM-Plus is platform for ASEAN and its eight dialogue partners to strengthen security and defence co-operation for peace, stability, and development in the region.
  • Its objective is to promote mutual trust and confidence between defence establishments through greater dialogue and transparency.
  • The inaugural ADMM-Plus was convened in Hanoi, Vietnam in 2010.
  • The defence ministers then had agreed on five areas of practical cooperation, including maritime security, counter-terrorism, peacekeeping operations and humanitarian assistance.

Banking Sector

Government makes mandatory for Banks to match original IDs with photocopies

  • The Department of Revenue (DoR), Finance Ministry has made it mandatory for banks and financial institutions to check original identification documents of individuals dealing in cash above prescribed threshold to weed out use of forged or fake copies.
  • PMLA and its rules impose obligation on reporting entities like banks, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information to Financial Intelligence Unit of India (FIU-IND).
  • Intermediaries like chit fund company, stock broker, cooperative bank, housing finance institution and non-banking finance companies (NBFCs) are also classified as reporting entities.
  • The new rule also has made mandatory for biometric identification number Aadhaar and other official documents requirement to be obtained by reporting entities from anyone opening bank account as well as for any financial transaction of Rs 50,000 and above.
  • The same is also required for all cash dealing of more than Rs 10 lakh or its equivalent in foreign currency.