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Today’s important articles/news in various newspapers (13th June)

Dear aspirants, following are the links of various articles taken from various newspapers. Click the link to read further. To get notification, follow the blog. Thank you

1.Polls Are Best Kept Apart

Prime Minister Narendra Modi contends that he has mooted the idea of holding simultaneous polls in the country. The step may appear to be purely reformist but in reality, it’s an unconstitutional measure and should not be pushed down the throats of people.

  1. There is a misconception that an amendment to the Representation of Peoples’s Act 1951 is all that is needed for holding simultaneous polls to the Lok Sabha and the state assemblies.
  2. If the Law Ministry were to attempt such an endeavour, it will realise the hollowness of the concept.
  3. Discussions with the public, political parties and all other stakeholders would have to be reflected in the bill.

Basic Structure Doctrine at risk

  1. Apart from the basic structure, the federal structure of the polity — itself a part of the basic structure — will collapse if an amendment to the Representation of People’s Act is approved by Parliament.
  2. The Election Commission agrees to undertake the huge exercise but the agency cannot hold elections in even three states without dividing the process into as many as seven phases

Report of the Standing Committee of Parliament, headed by E M S Nachiappanpointed out:

  1. Holding simultaneous elections may not be feasible in 2016 or even in a decade.
  2. The committee, however, expressed confidence that a solution will be found to reduce the frequency of elections and relieve the people and government machinery from tedium of frequent polls.
  3. This is important for India if it is to compete with other nations in its developmental agenda.
  4. However, this committee did not touch issues pertaining to the basic structure of the Constitution.

The Way Forward: Presidents Call on the Issue

  1. President Kovind recently said that frequent elections not only impose a burden on human resources but also impede the development process due to the promulgation of Model Code of Conduct.
  2. He called for a sustained debate is required on the subject of simultaneous elections and all political parties need to arrive at a consensus this issue.

2. The government needs to handle public sector banks with care

Even though the government has entered its last year in office, it still has time to initiate broad banking reforms and give a fresh direction to PSU banks

  1. PSU banks are grappling with a high level of bad loans, and a number of them have been put under RBI’s prompt corrective action and are not in a position to lend.
  2. In the March quarter, PSU banks booked losses in excess of Rs 62,000 crore and the total gross non-performing assets (NPAs) stood at about Rs 9 trillion.
  3. Although the government is in the process of recapitalising state-run banks, it is likely that the current Rs 2.11 trillion PSU bank recapitalization plan will not be sufficient to put the PSU banks back on track.
  4. Since PSU banks own about 70% of banking assets, their inability to lend will have a direct impact on economic growth.

Fear of Investigation amongst CEOs

  1. Four out of 21 PSU banks have not appointed replacements for chief executive officers (CEOs) and top executives in nine more banks are expected to leave in the coming months.
  2. However, it is likely that the government will find it difficult to attract talent due to the fear of investigative agencies among bankers.
  3. A number of present and former senior executives are under investigation for past transactions ex. Chanda Kochar
  4. The government must ensure that investigations don’t become a witch-hunt, and that the issue is handled with utmost care.

Problem of Valuation of Stressed Assets and Capital Infusion Plan

  1. The government is now mulling the formation of an asset reconstruction companies for faster resolution of bad loans and has constituted a committee to make recommendations in this regard.
  2. But the basic problem will be one of valuation of stressed assets.
  3. The ARC will need a significant amount of capital, which the government is not in a position to provide.
  4. In fact, now that India has the Insolvency and Bankruptcy Code in place, there is no need for the government to form an ARC. Banks should be able to resolve bad assets under this framework.
  5. If the government can actually find resources to reduce stress in the banking system, it would do well to reassess the capital requirement of PSU banks and revisit the capital infusion plan.

Lacking Governance reforms for PSU Banks

  1. The government has refrained from micromanaging PSU banks, but this in itself will not solve the problem.
  2. A situation where banks run without a CEO should never arise.
  3. PSU banks should be in a position to attract talent by offering competitive compensation at every level to be able to improve their operation and risk management systems.
  4. Only when banks are run by professionals will they be in a position to fund India’s growth in the long run and create value for all stakeholders, including the taxpayer.

The Way Forward

  1. At a broader level, as Reddy noted in his remarks, there should be clarity on the future of PSU banks.
  2. In fact, some of the banking reforms will only work if a clear road map is defined.
  3. For instance, if the government believes that a few banks should focus on under-banked areas, some fiscal support may be warranted.
  4. Perhaps banks should be allowed to focus on specific areas of strength so that they become more efficient over time and are not dependent on budgetary support for growth.
  5. It will be difficult to sustain higher growth without a strong banking system.

3. A plastic charter

Mandatory segregation and recycling of plastic waste must be implemented before it is eventually phased out.

  • Plastic pollution is the accumulation of plastic products in the environment that adversely affects wildlife, wildlife habitat, or humans.
  • Plastic pollution can afflict land, waterways and oceans.
  • Living organisms, particularly marine animals, can be harmed either by mechanical effects, such as entanglement in plastic objects or problems related to ingestion of plastic waste, or through exposure to chemicals within plastics that interfere with their physiology. Humans are also affected by plastic pollution, such as through disruption of various hormonal mechanisms.

Why in news?

  • Mandatory segregation and recycling of plastic waste must be implemented before it is eventually phased out
  • Every piece of plastic ever disposed of (this includes the toothbrush your great-grandfather used) is damaging the earth. It’s lying somewhere in the earth, floating in the ocean, or been broken down into microparticles and in the food chain.
  • Although a fraction of the plastic disposed of is recycled, most of it eventually ends up in the ocean or in dump sites outside city limits.

Solutions to reduce plastic pollution

  • The best way to reduce plastic pollution is to reduce and phase out its consumption. Solutions range from carrying your own reusable steel glass, box, spoon and cloth bag while eating out or shopping for groceries to using alternatives to plastic for household items.

Rules and results

  • India’s Plastic Waste Management Rules (published in March 2016) called for a ban on plastic bags below 50 micron thickness and a phasing out, within two years, of the manufacture and sale of non-recyclable, multi-layered plastic (plastic that snacks come in).
  • More than 20 Indian States have announced a ban on plastic bags. Cities such as Bengaluru announced a complete ban (gazette notification), in 2016, on the manufacture, supply, sale and use of thermocol and plastic items irrespective of thickness.
  • These include carry bags, banners, buntings, flex, flags, plates, clips, spoons, cling films and plastic sheets used while dining. The exceptions are plastic for export, packaging material for use in forestry, milk packets and hospitals. There are stiff fines that cover manufacturing and disposal.

What steps has to be taken?

  • However, a Central Pollution Control Board (CPCB) report has said that this ban is barely effective Citizens need to be aware of these rules, governments need to work with citizens to collect fines and companies need to be held accountable in terms of their environmental and social responsibilities.
  • Additionally, there should be research on ways to implement these rules, waste generation quantities and trends and find innovative alternatives to plastic.
  • We also need strategies to deal with the plastic that has already been disposed of. The same report says that India generates an estimated 16 lakh tonnes of plastic waste annually. If sold at the global average rate of 50 cents a kg, it can generate a revenue of ₹5,600 crore a year.

What needs to be done?

  • In order to realise the potential for recycling, waste must first be segregated at source.
  • This segregated waste should be then transported and treated separately. If plastic waste is mixed with organic and sanitary matter, its recyclability drastically reduces and its value lost.
  • As mentioned in the Solid Waste Management Rules 2016, waste has to be segregated separately at source. This includes separation of dry (plastic, paper, metal, glass) and wet (kitchen and garden) waste at source.
  • The primary responsibility for collection of used plastic and multi-layered plastic sachets (branded chips, biscuit and snack packets) lies with their producers, importers and brand owners.
  • Companies should have already submitted plans, by September 2016, for waste collection systems based on extended producer responsibility (EPR) either through their own distribution channels or with the local body concerned.
  • Here, the onus of disposal and recycling of products and materials is with producers, rather than on taxpayers and governments. However, none of this has happened at any perceivable scale. Companies say that plastic waste is too complex or pretend to be completely unaware of these rules.

From pollution to solutions

  • Admittedly, the complexity of dealing with plastic waste is because of its ubiquity and distributed market. Several companies produce the same type of packaging so it is impossible for a given company to collect and recycle only its own packaging.
  • Instead, these companies can collectively implement EPR by geographically dividing a region into zones and handle the waste generated in their designated zones.
  • This strategy was used in Switzerland to recycle thermocol used for insulation of buildings. This also reduces collection, transportation and recycling costs. Companies and governments should interact and research on how to implement such plans.
  • In India, some companies have helped empower the informal recycling sector, giving waste pickers dignity and steady incomes. Another firm has worked with the informal sector and engineered the production of high quality recycled plastic.
  • These companies, large corporates and governments could cooperate to implement innovative means to realise the value of plastic disposed of while simultaneously investing in phasing it out. For example, a Canadian company monetises plastic waste in novel ways.
  • It has one of the largest chains of waste plastic collection centres, where waste can be exchanged for anything (from cash to medical insurance to cooking fuel). Through this, multinational corporations have invested in recycling infrastructure and in providing a steady and increased rate for waste plastic to incentivise collection in poor countries.
  • Such collection centres, like the ones operated by informal aggregators in India, can be very low-cost investments (a storage facility with a weighing scale and a smart phone).

Conclusion

  • It is time we rethink, reduce, segregate and recycle every time we encounter a piece of plastic so that it stops damaging our environment and our lives.

4. U.K. told to release Blue Star papers

The British government has a month to appeal a decision by a U.K. information tribunal requiring it to declassify a number of documents relating to British involvement in the run-up to the 1984 Operation Blue Star.

  • The Cabinet Office is obliged under Section 1 of the Freedom of Information Act 2000 to disclose certain parts of the files, the judgment said.
  • It rejected the government’s use of exemptions relating to national security, international relations and personal information.
  • The activities of Sikh separatists continue to represent a potential existential threat to the State of India as well as the continuing reverence with which the Gandhi family are seen by many.
  • However, the judgement noted how documents that were released in error in 2014 had not triggered an adverse reaction from India, rejecting the British government’s contention that the release of information would damage bilateral relations.

Bilateral relations

  • The Judge also rejected the argument by one of the U.K. government witnesses that releasing the documents would damage bilateral relations by showing that the U.K. government did not regard the activities of Sikh extremists with sufficient concern and was soft on them.
  • During hearings held earlier this year, counsel for the Cabinet Office sought to argue against the documents being made public on the ground that they related to discussions involving intelligence services and that issues around separatism continued to be viewed as a threat to the existence of the Indian state and were of the highest sensitivity.

Operation Blue Star

  • It was an Indian military operation which occurred between 1 June and 8 June 1984, ordered by Prime Minister Indira Gandhi in order to establish control over the Harmandir Sahib Complex in Amritsar, Punjab, and remove militant religious leader Jarnail Singh Bhindranwale and his militant armed followers from the complex buildings.
  • The operation had two components—Operation Metal, confined to the Harmandir Sahib complex, and Operation Shop, which raided the Punjabi countryside to capture any suspects.
  • Following it, Operation Woodrose was launched in the Punjab countryside where Sikhs, specifically those carrying a kirpan and protesting, were targeted.
  • The military action led to an uproar amongst Sikhs worldwide and the increased tension following the action led to assaults on members of the Sikh community within India.
  • The operation is criticised on four main grounds: the choice of time of attack by Government, the heavy casualties, the loss of property, and allegations of human rights violations by Army personnel.

5. Going on a hike

Rate increase by RBI highlights conflict between its role as banking regulator and government’s debt manager.

In its most recent meeting, the Monetary Policy Committee (MPC) of the RBI raised the policy interest rate for the first time since it was constituted. The MPC expects inflation to be higher than its target of 4 per cent and the statement released by the committee indicates that interest rates may be raised again during the year if necessary.

The Monetary Policy Committee (MPC) is the body of the RBI, headed by the Governor, responsible for taking the important monetary policy decision about setting the repo rate. Repo rate is ‘the policy instrument’ in monetary policy that helps to realize the set inflation target by the RBI (at present 4%).

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The MPC replaces the previous arrangement of Technical Advisory Committee.

The MPC was setup after a Memorandum of Understanding between the government and the RBI about the conduct of the new inflation targeting monetary policy framework in February 2015. First meeting of the MPC was held on October 4, 2016 after the Government made amendment of the RBI Act in June 27, 2016. Committee’s meeting also marked the beginning of full-fledged implementation of the new inflation targeting monetary policy framework.

Structure of the MPC 

The Monetary Policy Committee (MPC) is formed under the RBI with six members. Three of the members are from the RBI while the other three members are appointed by the government. Members from the RBI are the Governor who is the chairman of the MPC, a Deputy Governor and one officer of the RBI. The government members are appointed by the Centre on the recommendations of a search-cum-selection committee which is to be headed by the Cabinet Secretary.

The Committee is to meet at least four times a year and make public its decisions following each meeting. There will be no reappointment of the committee.

Under MPC, the governor has a casting vote and doesn’t enjoy veto power (there was veto power for him under TAC). Decisions will be taken on the basis of majority vote.

The main responsibility of the MPC is to administer the inflation targeting monetary policy regime through determining the policy rate or repo rate to contain inflation.

Function of the MPC 

The main responsibility of the MPC will be to keep the inflation targets set by the RBI. The MPC decides the changes to be made to the policy rate (repo rate) to contain inflation within the target (based on CPI) level set under India’s inflation targeting regime.  Members of the MPC can suggest reasons for their support or opposition for a policy rate change. This will be published in the minutes of the MPC and the minutes should be published after 14 days of MPC meeting. The minutes should contain the reasons for each member proposing or opposing the monetary policy decision taken by the NPC.

In case the inflation target is failed to achieve (2% higher or lower than the set target of 4% for continuous three quarters), the RBI has to give an explanation to the government about the reasons, the remedial actions and the estimated time for realizing the target. Another responsibility for the RBI is to publish a Monetary Policy Report every six months, elaborating inflation forecasts and inflation sources for the next six to eighteen months.

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