Current Affairs Analysis

14th June 2016 Current Affairs Analysis

FASTag; Sovereign Gold Bonds; ‘Sustainable Structuring of Stressed Assets’ scheme; PMKSY; Stunting Child; etc.
By IT's Current Affairs Analysis Team
June 14, 2016


Polity & Governance

  • FASTag Roll-out and Facilitation 
  • India faces diabetes explosion
  • CGA warns employees against going on strike


  • India must ensure energy efficiency in irrigation: Experts
  • Sovereign gold bonds make debut
  • RBI announces new scheme for resolution of stressed assets
  • Water resources ministry becomes nodal agency to implement PMKSY

Environment & Ecology

  • India, UK varsity get down to studying monsoon
  • Environment ministry defines forests, legally

International Relations

  • India, Ghana sign 3 pacts


Polity & Governance

FASTag Roll-out and Facilitation 

In order to promote cashless payment through FASTag at Toll Plazas on National Highways, NHAI has decided to provide FASTag to existing monthly pass holders by absorbing the one-time cost of their FASTags.

What is FASTag?

FASTag is an electronic toll collection system in India, operated by the Ministry of Road Transport and Highways.

IASToppers- 14th June 2016-FasTag_card

  • FASTag is a simple to use, reloadable tag which enables automatic deduction of toll charges and lets you pass through the toll plaza without stopping for the cash transaction.
  • The tag employs Radio-frequency Identification (RFID) technology and is affixed on the vehicle’s windscreen after the tag account is active.
  • FASTag is a perfect solution for a hassle free trip on national highways.
  • FASTag offers near non-stop movement of vehicles through toll plazas and convenience of cashless payments of toll fee with nationwide inter operable Electronic Toll Collection Services. 
  • FASTag is operational on more than 325 toll plazas on National Highways across the country.

Benefits of FASTag:

  • Use of FASTag shall increase user convenience from payments without stops at toll plazas thus saving on time, money and fuel. 
  • The online payments shall improve transparency of toll transactions and reduce revenue leakages, thus, improving overall efficiency and commercial competitiveness.
[Ref: PIB]


India faces diabetes explosion

According to the new Global Nutrition Report, 2016, India has done well in reducing its rate of stunting over the last decade but the growing number of overweight people in the country, particularly those prone to diabetes, may be a cause of concern.

Key points of the report:

  • According to the report, though still home to one-third of the world’s 159 million stunted under-5-year old children, India has made remarkable progress by reducing its rate of stunting from 48% in 2006 to 38% in 2014.
  • The report also highlights India’s growing non-communicable disease burden.
  • It shows cardiovascular disease patients in India spent 30% of their annual family income on direct cardiovascular diseases related health care.
  • In India, the risk of impoverishment due to heart disease was 37% greater than for communicable diseases ­ putting a huge strain on health systems and family budgets.
  • India almost doubled the rate of stunting reduction in the past 10 years compared with the previous decade.
  • The report called for urgent attention in India to tackle the rising percentage of those who are overweight and in particular to the high rate of diabetes among them.

What is stunting and how does it develop?

  • Stunting is a gradual and cumulative process during the 1,000 days window from conception through to the first two years of a child’s life.
  • Stunting develops as a result of sustained poor dietary intake or repeated infections or a combination of both.

IASToppers- 14th June 2016-stunting

People with diabetes in India:

  • Though the report does not provide India specific estimates and projections for diabetes, it says the prevalence of adult diabetes in the country was recorded at 9.5% in 2015, compared with a global average of 9%.
  • According to latest estimates of the World Health Organisation (WHO), people with diabetes in India doubled from 32 million in 2000 to 63 million in 2013 and is projected to increase to 101.2 million in next 15 years.

 [Ref: ToI]


CGA warns employees against going on strike

The Controller General of Accounts (CGA) has warned its employees that proceeding on strike could lead to wage cuts or even dismissal.

  • According to the CAG, there is no statutory provision empowering the employees to go on strike.
  • The Supreme Court (in a previous case) also agreed that going on strike is a grave misconduct under the Conduct Rules and that misconduct by government employees is required to be dealt with in accordance with the law.

What’s the issue?

  • The strike call, issued by the National Joint Council of Action (NJCA) representing trade unions of railway, defence, postal and other central government employees, is to protest against the computation of minimum wage as recommended by the Seventh Pay Commission, which is to be implemented this year.
[Ref: Hindu]



India must ensure energy efficiency in irrigation: Experts

According to the expert, India must consider energy efficiency in irrigation.


  • Agriculture uses about 18% of the electricity consumed in India. This means that to tackle energy security, to implement India’s climate commitments, as well as to ensure food security and deal with water challenges, India must consider energy efficiency in irrigation.

India-EU partnership:

  • To tackle energy security, the European Union [EU] has brought policy and financial experts as well as European business to India, offering concrete solutions in this regard.
  • According to experts, the cooperation between India and the European Union would facilitate policy dialogue, bring in best practices, business solutions and joint research and innovation, and would help with finding financing models for clean energy and climate change.
  • The European Investment Bank has already provided loans for more than euro 1.2 billion to support implementation of energy and climate related projects in India.
  • The EU was closely involved in developing offshore wind, solar parks and energy efficiency in India.
[Ref: Hindu]


Sovereign gold bonds make debut

Sovereign gold bonds have made a debut on the stock exchanges and closed the first day of the trade with handsome gains of over 7 %. 

About Sovereign Gold Bond (SGB) scheme:

  • Under the scheme, gold bonds are issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of 5-7 years with a rate of interest to be calculated on the value of the metal at the time of investment.
  • The maximum amount which can be subscribed is 500 grams per person per financial year and the interest rate on the bonds are set at 2.75 per cent per annum, payable on a half-yearly basis.
  • The government’s plan behind the SGB scheme is to encourage those who use gold as a store of value to instead invest in the gold bonds as opposed to the physical yellow metal itself. The idea, among others, is to reduce India’s substantial gold imports.
  • The bonds, issued by the Reserve Bank of India on behalf of the government, have a tenor of eight years with an exit option from the fifth year onwards.
  • The Bonds will be sold through banks, Stock Holding Corporation of India Ltd. (SHCIL) and designated Post Offices.

So far, three tranches of the bonds have been issued and the fourth tranche is expected soon. 

[Ref: Hindu]


RBI announces new scheme for resolution of stressed assets

RBI has come out with a scheme titled ‘Sustainable Structuring of Stressed Assets (S4A) for resolution of bad loans of large projects.

  • With this move, RBI has revised the norms for banks to undertake debt restructuring if they feel the project is viable in the long run.

Key features of the scheme:

  • S4A is an optional framework for resolution of large stressed accounts.
  • Under the scheme, at least 50% of the debt should be serviced in the same period as that of the existing loan. The balance can be converted into equity or quasi-equity instruments under supervision of IBA’s Overseeing Committee.
  • The scheme is applicable to projects that have commenced commercial operation and where the banks’ exposure is over Rs.500 crore.

About IBA’s Overseeing Committee:

  • In order to ensure transparency, an Overseeing Committee, set up by the Indian Banks Association (IBA) and comprising of eminent experts, will independently review the processes involved in preparation of the resolution plan. However, Banks have to submit the resolution plan to the OC.
  • The panel will be set up in consultation with the RBI.
  • The members of OC cannot be changed without the prior approval of RBI

About resolution plan:

  • As per the resolution plan, the debt will be divided into two parts — Part A will include debt which can be serviced from the existing operation while remaining will be classified as Part B.
  • While there will be no extension of the repayment of Part A, the Part B will be converted into equity/redeemable cumulative optionally convertible preference shares.
[Ref: Hindu, ToI]


Water resources ministry becomes nodal agency to implement PMKSY

The Union water resources ministry will once again become the nodal ministry for implementing PM Modi’s ambitious Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).

  • It was initially the nodal department for implementing the programme, but the responsibility was later shifted to agriculture department.
  • However, as most big projects and dams are executed under the ministry of water resources, PMKSY has once again gone back to the ministry.

About PMKSY:

Pradhan Mantri Krishi Sinchai Yojana (PMKSY) is a national mission to improve farm productivity and ensure better utilization of the resources in the country.

  • Under PMKSY, the government plans to spend Rs 50,000 crore over five years.
  • It seeks to amalgamate three major ongoing irrigation programmes of the Centre –
  1. The Accelerated Irrigation Benefit Programme of Ministry of Water Resources
  2. Integrated Watershed management programme of Ministry of Rural Development and Land Resources, and
  3. The farm water management component of National Mission on Sustainable Agriculture of the Department of Agriculture.
  • The scheme would be implemented in ‘mission mode’, which means the district administration draws up their own irrigation plan with the help of district forest officers, lead bank officer and other departments. The state irrigation plan will be an amalgamation of all the district plans.
  • The plan additionally calls for bringing ministries, offices, organizations, research and financial institutions occupied with creation and recycling of water under one platform. The goal is to open the doors for optimal water budgeting in all sectors.

Objectives of the PMKSY:

  • The primary objectives of PMKSY are to attract investments in irrigation system at field level, develop and expand cultivable land under assured irrigation (Har Khet ko pani), enhance ranch water use in order to minimize wastage of water, enhance crop per drop by implementing water-saving technologies and precision irrigation.

Key facts:

  • According to official data, till 2011-12, as much as 46% of India’s net sown area of 141 million hectares was under irrigation.
  • Western Uttar Pradesh is one of major sugarcane growing belts of India.
[Ref: BS, Wiki]


Environment & Ecology

India, UK varsity get down to studying monsoon

The Government of India and UK’s University of East Anglia have decided to collaborate on a £8-million (Rs 7,600-crore) monsoon project.

  • Under the project, scientists from both the countries will study the conditions in the Bay of Bengal with the help of underwater robots.
  • The robots placed deep inside the ocean will monitor how conditions influence Indian monsoon.

Significance of the project:

  • The project will help in forecasting the arrival and progress of monsoon more accurately than before.
  • An accurate monitoring of ocean conditions would also help in better understanding of El Nino and its reverse phenomenon, La Nina.
  • An understanding of how ocean conditions affect weather patterns is important as the dreaded El Nino weather phenomenon occurs due to abnormal warming of surface waters in the equatorial Pacific Ocean every three to five years. El Nino is believed to have been a major factor in all the droughts that India faced in the past decade.
  • The four-month southwest monsoon provides around 80% of the total rainfall that India gets in a year. Forecasting the precise timing and location of the rains is vital to India’s economy, which is dominated by farming, and for managing its water resources.
  • Accurate prediction of intense downpours and breaks in the monsoon is essential to help farmers plan their crop planting and to aid communities to prepare for floods and droughts.
[Ref: BS]


Environment ministry defines forests, legally

The Union environment ministry has now defined what constitutes a forest under the Forest Conservation Act 1980 (FCA).

Implications of the move:

  • The move is expected to have far-reaching consequences for protection of forests while ensuring ease of doing business for mining sector, realty sector and industry.
  • The legal definition, pending since 2006, will help in identifying areas where development and industrial activity can take place without statutory clearances under the FCA.
  • At the same time, clearances, compensatory afforestation and payment of levies would be compulsory for the areas now defined as forests.


  • So far, while the FCA laid down the provisions for protection of forests, it did not define a forest.
  • Different classifications of land in various states as well as messy revenue and forest records caused poor implementation of the FCA, often leading to litigations over thousands of hectares of land across the country.
  • Following a 2006 order of the Supreme Court, all state governments were required to identify forests as per dictionary meaning of the word, apart from lands which were demarcated in records as forest.
  • But this did not happen, forcing the apex court to reiterate the need for a clear definition of forest land from the Centre.

What does the new definition say?

The new definition classifies states in two different ways.

First category:

  • In the First category, all states are covered where cadastral surveys were completed before the FCA came in to being and land records were settled for the entire state.
  • In the first category of states the definition of forests covers not only areas recorded as forests but also those classified as forests under various state laws and land classification systems, such as chote jhad ke jungle, bani, oran, civil soyam land etc.
  • Areas that are identified in state records by geographical features such as gair mumkin pahar, ravines, nala etc. too would be considered as forests, with caveats for identifying healthy forest patches.
  • This would cover areas like Aravallis where some forests remain. Mangroves, alpine meadows and montane bamboo brakes would also get defined as forests.

Second category:

  • In this category those states are covered where above mentioned process was not completed and confusion remains over what is forest land.
  • In the second category of states, apart from the areas identified through the process meant for the first category, more areas are to be brought under the ambit of forest laws. For this purpose, such states are further classified in two categories.
  1. In states where the forest cover as well as the recorded forest area is less than one-third of geographical area, land patches having 10 per cent crown density will also be defined as forests. This will be done only if 70% of these patches have natural forests (not plantations). For areas that are not adjoining existing declared forests, this would be done only for plots bigger than five hectares.
  2. In states where either the forest cover or the already-demarcated forestland is above one-third of the geographical area, patches of lands that have more than 40% crown density would additionally be designated as forest.
  • Following the national forest policy, which recommends a higher forest cover in hill districts, the cut-off for identifying additional forests under the law has been kept at two-third of the geographical areas.
  • The final definition marks some dilutions from the previous draft, which was circulated in 2014 after a meeting between states and Centre. In that definition, even scrub forests with densities lower than 10 per cent were to be protected in states with low forest cover. This has now been done away with.
  • But to protect private plantation growers, it has been ensured that only large patches (upwards of five hectares), with more than 70 per cent natural forests, gets covered under the FCA.
  • It is made clear that where people have planted trees on their own the definition would not apply to ensure plantations are encouraged and the Green India Mission is not hobbled.
  • In cases where disputes still arise about actual demarcation of lands based on the new definition, the matter will be finally decided by the central government, the draft notification says.
[Ref: BS]


International Relations

India, Ghana sign 3 pacts

India and Ghana have signed three bilateral agreements to strengthen co-operation in varied fields.

  • The pacts came during the first ever visit of President Pranab Mukherjee to the country.
  • Ghana is the first country visited by the President during the six-day African tour. The other two include yet another maiden trip by a President to Ivory Coast and to Namibia after a gap of two decades.

Three pacts are:

  1. Visa waivers for holders of diplomatic and official passports
  2. For setting up a Joint Commission. The commission will periodically review various aspects of the multi-dimensional ties between the two countries.
  3. For collaboration in diplomatic training between the Indian Foreign Service Institute and a Ghanaian institute of the same standing.


  • After hosting the third India Africa Forum Summit (IAFS) in New Delhi in October 2015, India is working on a plan to consolidate and further strengthen its engagement with Africa.

Key facts:

  • Ghana has sought India’s civil nuclear cooperation to explore the possibilities of reducing its dependence on traditional energy sources to cut costs and focus on cleaner environment.
  • India is the largest foreign investor in Ghana today, with more than 700 projects. More than 222 of these projects are in the manufacturing sector.
[Ref: Hindu]


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