IASToppers-Current-Affairs-Analysis-18th-Dec-2015
Current Affairs Analysis

18th December 2015 Current Affairs Analysis

December 18, 2015

Contents

 

Polity & Governance

  • Lok Sabha Passes Arbitration and Reconciliation Amendment Bill, 2015

Economy

  • MoU between India and Spain on cooperation in Port matters
  • Model Text for the Indian Bilateral Investment Treaty
  • Policy framework for development of Underground Coal Gasification (UCG) in India
  • NSE’s three new group indices

Polity & Governance

Lok Sabha Passes Arbitration and Reconciliation Amendment Bill, 2015

The Lok Sabha has today passed the Arbitration and Reconciliation (Amendment Bill), 2015 by voice vote.

  • The Bill seeks to make the arbitration process more investor-friendly, cost effective and suitable for expeditious disposal of cases.
  • It will also facilitate in making India a hub of international commercial arbitration.
  • It may be noted that the President had promulgated an ordinance for amending the earlier prevalent act, the Arbitration and Conciliation Act 1996 related and for matters connected there with or incidental thereto.
  • The union cabinet had approved promulgation of this ordinance in October this year and had recommended the same to the President.

Features of the Bill:

  • The Bill amends the Arbitration and Conciliation Act, 1996.
  • Under the Act, the relevant court for all arbitration matters would be a principal civil court or high court with original jurisdiction.
  • The Bill modifies this to state that in the case of international arbitration, the relevant court would only be the relevant high court.
  • The Act permits the court to set aside an arbitral award if it is in conflict with the public policy of India. This includes awards affected by
  1. Fraud or corruption, and
  2. Those in violation of confidentiality and admissibility of evidence provisions in the Act.
  • The Bill introduces a provision that requires an arbitral tribunal to make its award within 12 months. This may be extended by a six month period.

[Courtesy: PIB, PRSIndia]

Economy

MoU between India and Spain on cooperation in Port matters

The Union Cabinet has given its approval for signing of a Memorandum of Understanding (MoU) between India and Spain on cooperation in Port matters.

Signing of the MoU will help both countries in:

  • Encouraging and facilitating the development of Ports and provide a cooperation platform for enhancing and stimulating steady growth of maritime traffic,
  • Exchange and training of staff and students from various maritime establishments,
  • Exchange of information necessary for accelerating and facilitating the flow of commercial goods at sea and at ports,
  • Establishment of joint ventures in the fields of port led development,
  • Port efficiency,
  • Modernization of existing ports,
  • Dredging, particularly maintenance dredging in riverine ports,
  • Environment and green port initiative,
  • Port engineering,
  • Maritime training,
  • Information technology including development of simulators,
  • Port facilities and related maritime activities, etc.

[Courtesy: PIB]

Model Text for the Indian Bilateral Investment Treaty

The Union Cabinet has given its approval for the revised Model Text for the Indian Bilateral Investment Treaty.

  • The revised Indian model text for Bilateral Investment Treaty (BIT) will replace the existing Indian Model BIT.
  • The revised model BIT will be used for re-negotiation of existing BITs and negotiation of future BITs and investment chapters in Comprehensive Economic Cooperation Agreements (CECAs)/ Comprehensive Economic Partnership Agreements (CEPAs) / Free Trade Agreements (FTAs).

Advantages:

  • The new Indian Model BIT text will provide appropriate protection to foreign investors in India and Indian investors in the foreign country, in the light of relevant international precedents and practices, while maintaining a balance between the investor’s rights and the Government obligations.

Importance of BIT:

  • A BIT increases the comfort level and boosts the confidence of investors by assuring a level playing field and non-discrimination in all matters while providing for an independent forum for dispute settlement by arbitration.
  • BITs help project India as a preferred foreign direct investment (FDI) destination as well as protect outbound Indian FDI.

Features of BIT:

The essential features of the model BIT include:

  • An “enterprise” based definition of investment,
  • Non-discriminatory treatment through due process,
  • National treatment,
  • Protections against expropriation,
  • A refined Investor State Dispute Settlement (ISDS) provision requiring investors to exhaust local remedies before commencing international arbitration, and
  • Limiting the power of the tribunal to awarding monetary compensation alone.

The model BIT excludes:

  • Government procurement,
  • Taxation,
  • Subsidies,
  • Compulsory licenses and
  • National security to preserve the regulatory authority for the Government.

Background:

  • The first BIT was signed by India on March 14, 1994. Since then, till date, the Government of India has signed BITs with 83 countries. These BITs were largely negotiated on the basis of the Indian Model BIT of 1993.
  • Considerable socio-economic changes have taken place since 1993 when the Model text of BIT was first approved.
  • The nature of government regulation concerning foreign investment has evolved. A wide variety of laws now regulate investments both at the central and the state levels.
  • During the last few years, significant changes have occurred globally regarding BITs, in general, and investor-state dispute resolution mechanism in particular.

Policy framework for development of Underground Coal Gasification (UCG) in India

The Union Cabinet has approved a policy framework for development of Underground Coal Gasification (UCG) in coal and lignite bearing areas in the country.

  • UCG is a method of extraction of energy from coal/lignite resources which are otherwise regarded as uneconomical to work through conventional mining methods.
  • A policy on the lines broadly similar to the existing policy for Coal Bed Methane (CBM) development on revenue sharing basis will be adopted for offering the blocks through competitive bidding.
  • An Inter-Ministerial Committee under the Ministry of Coal with members from concerned Ministries will be responsible for identification of the areas, deciding about blocks to be put to bidding or awarding them to PSUs on nomination basis.
  • Ministry of Coal may engage a consultant for development of the contract document.
  • For development of bid documents, work programme, conducting the bidding process, evaluation of bids, monitoring and process protocols etc., Central Mine Planning and Design Institute Limited (CMPDIL) will be the nodal agency.

About Underground coal gasification (UCG):

  • Underground coal gasification (UCG) is an industrial process which converts coal into product gas.
  • UCG is an in-situ gasification process carried out in non-mined coal seams using injection of oxidants, and bringing the product gas to surface through production wells drilled from the surface.
  • The predominant product gases are methane, hydrogen, carbon monoxide and carbon dioxide.

The government had earlier said that India should explore using coal gasification as feedstock to produce chemicals and petrochemicals in order to increase domestic output of these energy products.

[Courtesy: PIB, Economic Times, Wiki]

NSE’s three new group indices

In a first of its kind in India, the National Stock Exchange (NSE) has launched separate indices on three corporate houses of India – Tata, Aditya Birla and Mahindra Group.

  • The indices – Nifty Tata Group Index, Nifty Aditya Birla Group Index and Nifty Mahindra Group Index – have been designed to reflect the performance of companies belonging to the respective corporate group, as per a statement issued by the NSE.
  • The indices have been created by the NSE’s group company India Index Services & Products Ltd. (IISL), which also plans to launch indices on other corporate groups and third-party products based on such indices.

[Courtesy: The Hindu]

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