Current Affairs Analysis

16th November 2019 Current Affairs Analysis -IASToppers

Essar Steel insolvency case; Contempt of court; Contempt of Courts Act, 1971; Difference between civil and criminal contempt; Insolvency and Bankruptcy Rules, 2019; PMC bank scam; Deposit Insurance and Credit Guarantee Corporation (DICGC); Co-operative banks; Rural cooperative; Urban Co-operative Banks (UBBs); National Health Mission (NHM); Mukhyamantri Nishulk Dava Yojana (MNDY); NHM- Free Drugs & Diagnostics Service Initiative; National Initiative for School Heads’ and Teachers’ Holistic Advancement (NISHTHA); 330-day window; Insolvency & Bankruptcy Code Bill; Chile referendum on new constitution; Online child sexual abuse and exploitation (OCSAE) prevention/investigation unit; European Investment Bank (EIB); Ultima Thule; Arrokoth; Kuiper belt; Sisseri River Bridge; ‘Project Brahmank’ of Border Roads Organisation (BRO); Border Area Development Programme; International Energy Agency (IEA); Organization of the Petroleum Exporting Countries (OPEC); OPEC+; etc.
By IT's Current Affairs Analysis Team
November 16, 2019

Contents

Polity & Governance

  • SC holds former Ranbaxy promoters guilty of contempt of court

Government Schemes & Policies

  • Rules notified to bring financial firms under IBC

Issues related to Health & Education

  • Rajasthan ranks first in India for free medicine scheme
  • National Mission ‘NISHTHA’ launched in J&K
  • CBI sets up online child sexual abuse prevention unit

Economy

  • Regulation on cooperative banks soon
  • PMC scam fallout: Bank deposit insurance cover to be hiked
  • Easing of IBC deadline to serve interests of public, debtor: MCA secretary
  • European Investment Bank drops fossil fuel funding

Bilateral & International Relations

  • Chile to hold referendum on new constitution
  • Opec+ faces ‘major challenge’ in 2020 from competitors’ surging output: IEA

Science & Technology

  • ‘Ultima Thule,’ Farthest Spacecraft-Visited Rock, Renamed ‘Arrokoth’ After Nazi Controversy

Key Facts for Prelims

  • Sisseri River Bridge in Arunachal Pradesh inaugurated

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Polity & Governance

SC holds former Ranbaxy promoters guilty of contempt of court

The Supreme Court held former Ranbaxy promoters Malvinder and Shivinder Singh guilty of contempt for violating its earlier order directing them not to divest shares in Fortis Healthcare Ltd.

contempt-of-court

What is the issue?  

Ranbaxy promoters

  • Daiichi Sankyo, a Japanese pharmaceutical company, had alleged that the execution of an arbitral award by a Singapore tribunal, had been in jeopardy as the brothers had disposed of their controlling stakes in Fortis Group to a Malaysian firm. Daiichi had said it was promised some shares of Fortis by the Singh brothers.
  • The Singapore tribunal ordered the brothers to pay Daiichi $500 million towards alleged non-disclosure of crucial information during the sale of Ranbaxy Laboratories to Daiichi in 2008.

The Contempt of Courts Act, 1971

Contempt-of-Courts-Act-1971

  • Contempt refers to the offence of showing disrespect to the dignity or authority of a court. Civil contempt refers to the wilful disobedience of an order of any court.
  • The Act confers upon certain courts power to punish individuals for contempt of themselves as also of subordinate courts.
  • The Act talks about the meaning of contempt, definitions of civil and criminal contempt, what constitutes a contempt, extraterritorial jurisdiction of the High Court, their power to punish contempts of subordinate courts, and procedure after cognizance.

Difference between civil and criminal contempt

The Calcutta High Court in Legal Remembrancer v. Motilal Ghose and the Allahabad High Court in Vijay Pratap Singh v. Ajit Prasad have both outlined the difference between the two civil and criminal contempt.

‘Civil contempt’:

  • ‘Civil contempt’ is a ‘wilful disobedience to any judgment, decree, direction, order, writ or other processes of a Court or wilful breach of an undertaking given to the court’.

 ‘Criminal contempt’:

‘Criminal contempt’ is ‘the publication (whether by words, spoken or written, or by signs, or by visible representation, or otherwise) of any matter or the doing of any other act whatsoever which:

  1. Scandalises or tends to scandalise, or lowers or tends to lower the authority of, any court.
  2. Prejudices, or interferes or tends to interfere with the due course of any judicial proceeding.
  3. Interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner.’

The purpose of civil contempt is to make the contemner right the wrong done to a party by imposing sanctions, while the idea behind criminal contempt is to punish the contemner who has, by virtue of his insolent behaviour, dishonoured the court.

Background:

  • The Contempt of Courts Act, 1926 was the first statutory legislation that granted powers to High Courts of Judicature to punish contempt of subordinate courts. The Act, however, failed to provide for contempt of courts subordinate to Chief Courts and Judicial Commissioner’s Court, and was therefore repealed by The Contempt of Courts Act, 1952.
  • The Contempt of Courts Act, 1952 did not confer any new powers on the courts but redefined ‘High Court’ to include the Courts of Judicial Commissioner and provided for the aforesaid to try for contempts subordinate to them as well.
  • After the recommendations of a committee under the chairmanship of N. Sanyal (1961), Contempt of Courts Act, 1971 was devised.
  • The Law Commission of India (Chair by Justice B.S. Chauhan) submitted its report on the Contempt of Courts Act, 1971. The report examined whether the definition of contempt in the Act should be restricted to civil contempt. The Commission concluded that there was no requirement to amend the Act.
  • The Contempt of Courts Act, 1971 very clearly states that fair criticism of any case which has been heard and decided is not contempt.
  • The statute of 1971 has been amended by the Contempt of Courts (Amendment) Act, 2006 to include the defence of truth under Section 13 of the original legislation.
  • Section 13 that already served to restrict the powers of the court in that they were not to hold anyone in contempt unless it would substantially interfere with the due process of justice, the amendment further states that the court must permit ‘justification by truth as a valid defence if it is satisfied that it is in public interest and the request for invoking the said defence is bona fide.’

Key facts:

Article 129:

  • It grants Supreme Court the power to punish for contempt of itself.

Article 142(2):

  • It enables the Supreme Court to investigate and punish any person for its contempt.

Article 215:

  • It grants every High Court the power to punish for contempt of itself.
[Ref: Economic Times]

 

Government Schemes & Policies

Rules notified to bring financial firms under IBC

The Ministry of Corporate Affairs has notified the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 to provide a generic framework for insolvency and liquidation proceedings of systemically important FSPs other than banks.

Rules-notified-to-bring-financial-firms-under-IBC

About the Insolvency and Bankruptcy Rules, 2019

  • It provides detailed rules for the resolution of systemically important financial service providers (FSPs) under the bankruptcy law.
  • Through this, resolution of stressed Non-banking finance companies (NBFCs) can be done.
  • These rules will not apply to banks.

Highlights of the new framework

  • Only a regulator will be allowed to refer a non-bank lender or housing financier to a bankruptcy tribunal.
  • The bankruptcy tribunal will appoint an administrator who will try to stitch together a turnaround plan.
  • The regulator shall issue ‘no objection’ on the basis of the fit and proper criteria applicable to the financial service provider.
  • The administrator will be nominated by the regulator, such as the Reserve Bank of India (RBI) in the case of non-bank lenders and housing financiers.
  • The registration or the licence of the financial services provider will not be suspended or cancelled during the bankruptcy resolution process.
  • In case a turnaround of the financial institution is not possible, before deciding to liquidate it, the tribunal will listen to the views of the regulator.

Need

  • Till now, there was no system similar to the IBC (Insolvency and Bankruptcy Code) that was designed exclusively for financial institutions.

Significance

  • Likely to help out distressed shadow banks and housing financiers, which have been battling a liquidity crisis for a year.
  • The new rules address an important regulatory gap by bringing in certain classes of financial institutions under the scope of IBC.
  • New rules under IBC was a timely step for resolution of financial services providers, permitting an interplay between regulators, creditors and the National Company Law Tribunal (NCLT) for appropriate actions.

Background

  • The rules were issued under Section 227 of the IBC, which allows the Central government to notify FSPs or categories of FSPs for the purpose of insolvency and liquidation proceedings.
[Ref: The Hindu, Livemint]

 

Issues related to Health & Education

Rajasthan ranks first in India for free medicine scheme

Health Minister of Rajasthan has congratulated all the personnel associated with the CM free medicine scheme for once again getting the first rank for the month of September among the free medicine schemes in 16 major states by the NHM.

Rajasthan-ranks-first-in-India-for-free-medicine-scheme

About the assessment done by National Health Mission (NHM)

The NHM assessed the performance of the 16 states in implementation of free medicine scheme in on the basis of 10 parameters such as

National Health Mission

  • Effective implementation of Drugs and Vaccine Distribution Management System (DVDMS)
  • Stock of essential drugs
  • Value of drugs about to expire etc.

About Mukhyamantri Nishulk Dava Yojana (MNDY)

  • The MNDY was launched in Rajasthan on October 2, 2011.

Mukhyamantri-Nishulk-Dava-Yojana

The scheme consists of two components:

Free medicine: Providing commonly-used essential medicines free of cost to patients visiting government healthcare institutions. (Introduced on October 2, 2011).

Free medical tests: Providing free medical test (Introduced in April 2013)

Implementation

  • It is implemented by Rajasthan Medical Services Corporation Limited (RMSCL) as a centralised procurement agency for procuring generic medicines, surgical equipment etc. Technical Advisory Committee (TAC) is also established as an advisory body to RMSCL.

Eligibility

  • All patients visiting all government healthcare institutions, irrespective of their financial status.

Programme Outcomes

  • Increase in access and equity of the underserved; and Reaching out to the unreached, Before – 44lakh patients/month, Later – 62 lakh patient per month.
  • Source of Youth Employment.
  • Increase in the numbers of Girl Child treated
  • Decrease in out-of-pocket expenditure.
  • Reduction in retail sale of costly medicines-particularly anti-cancer, immunoglobulins, albumin etc.
  • Savings to Government

About NHM- Free Drugs & Diagnostics Service Initiative

free-medicine-scheme

  • In the union budget 2014-15, the Government announced that two key initiatives i.e. Free Drug Serviceand Free Diagnosis Service. Both initiatives are part of National Health Mission.
  • Under this initiative, support is provided for provision of essential drugs free of costin public health facilities.
  • The initiative was taken aiming to reduce out of pocket expenditure (OOPE) and improve footfalls in public facilities.

Three components under the umbrella of the Free Diagnostics Service Initiative are:

  • Essential Pathology Initiative: To assure every patient get a range of diagnostic packages free of cost.
  • Tele-radiology initiative: Lack of specialist clinicians especially radiologists have been a major challenge. Hence, a model has been devised under which digitized X-Ray films are transmitted to service provider and reports are received within a stipulated time frame.
  • CT scan Services at District Hospital: Since CT is an expensive test and many districts in India do not have a single CT facility, this initiative is of great value.
[Ref: Times of India]

 

National Mission ‘NISHTHA’ launched in J&K

National Initiative for School Heads’ and Teachers’ Holistic Advancement (NISHTHA) was launched in Jammu and Kashmir.

National-Mission-'NISHTHA'-launched-in-J&K

About the NISHTHA:

About the NISHTHA

  • It is an initiative of Ministry of Human Resource Development.
  • It is the largest teachers’ training programme of its kind in the world.
  • The features of this programme are activity based modules including educational games, Social-emotional learning, motivational interactions, team building, preparation for school based assessment, in-built continuous feedback mechanism etc.
  • Under this programme, standardized training modules will be developed at national level for all States and UTs.

About the NISHTHA 1

  • The training will be conducted directly by key resource persons (KRPs) and state resource persons (SRPs) , who will in turn be trained by persons from the National Council of Educational Research and Training (NCERT), National Institute of Educational Planning and Administration (NIEPA), Kendriya Vidyalaya Sangathan (KVS), Navodaya Vidyalaya Samiti (NVS), Central Board of Secondary Education (CBSE) and NGOs.

About the NISHTHA2

  • A Mobile App and Learning Management System (LMS) based on MOODLE (Modular Object-Oriented Dynamic Learning Environment) have been developed by NCERT for registration of Teachers, dissemination of resources, training gap and impact analysis etc.

About the NISHTHA 3

Objective

  • To build the capacities of around 42 lakh participantscovering all teachers and Heads of Schools at the elementary level in all Government schools, faculty members of State Councils of Educational Research and Training (SCERTs), District Institutes of Education and Training (DIETs) as well as Block Resource Coordinators and Cluster Resource Coordinators.
  • To develop teacher’s skillson various aspects related to Learning Outcomes, Competency Based Learning, School Leadership qualities Pre-vocational Education, eco club, youth club, kitchen garden etc.

Need

  • It was observed that the expectation from teachers in the present day is different and includes many new attributes.
  • Teachers today are also expected to be aware of the provisions regarding gender, the Rights of Persons with Disabilities Act and the Protection of Children from Sexual Offences (POCSO) Act.
[Ref: PIB, The Hindu]

 

CBI sets up online child sexual abuse prevention unit

The Central Bureau of Investigation (CBI) has set up an online child sexual abuse and exploitation (OCSAE) prevention/investigation unit under its special crime zone.

CBI-sets-up-online-child-sexual-abuse-prevention-unit

About the online child sexual abuse and exploitation (OCSAE) prevention/investigation unit

  • Headquartered at New Delhi, the unit’s territorial jurisdiction would be throughout India.

online child sexual abuse and exploitation (OCSAE) prevention

  • It will investigate the offences covered under provisions of the Indian Penal Code (IPC) 1860, the Protection of Children from Sexual Offences (POCSO) Act 2012 and the Information Technology act 2000 and under various laws of the land, as applicable.
  • It will collect and disseminate information regarding publication, creation, browsing, downloading, advertising, exchanging, distribution of information relating to online child sexual abuse and exploitation.

Need

  • The rapid growth of the internet and information and communication tools over the past two decades has created unparalleled opportunities for children and adults alike to explore world around them.
  • These technologies create a new dimension, wherein the sexual exploitation of children can multiply, if unchecked.
  • Children, every day, all around the world are prone to suffer online sexual abuse and exploitation.
  • Numerous references related to dissemination of CSAM (Child Sexual Abuse Material) are received from INTERPOL and other National / International Organizations.
  • The incidence of online child sexual abuse and exploitation generally transcends international borders.
[Ref: Times of India]

 

Economy

Regulation on cooperative banks soon

In the upcoming Winter Session of Parliament, the government will seek to make amendments in certain laws so as to bring the banking activities carried out by cooperative societies under the purview of the Banking Regulation Act.

cooperative banks iastoppers

  • The government is also planning to increase the amount of deposits in banks that are insured, from the current ₹1 lakh.

What are co-operative banks?

Co-operative banks are financial entities established on a co-operative basis and belonging to their members. This means that the customers of a co-operative bank are also its owners.

co-operative-banks

These banks provide a wide range of regular banking and financial services. However, there are some points where they differ from other banks.

Structure of co-operative banks in India:

Broadly, co-operative banks in India are divided into two categories – urban and rural.

structure-of-cooperative-banks-in-india

Rural cooperative

Rural cooperative credit institutions could either be short-term or long-term in nature.

  1. Short-term cooperative credit institutions are further sub-divided into State Co-operative Banks, District Central Co-operative Banks, Primary Agricultural Credit Societies.
  2. Long-term institutions are either State Cooperative Agriculture and Rural Development Banks (SCARDBs) or Primary Cooperative Agriculture and Rural Development Banks (PCARDBs).

Urban Co-operative Banks (UBBs)

Urban-Co-operative-banks

  • Urban Co-operative Banks (UBBs) are either scheduled or non-scheduled. Scheduled and non-scheduled UCBs are again of two kinds- multi-state and those operating in single state.

How these banks are regulated?

  • In India, co-operative banks are registered under the States Cooperative Societies Act. They also come under the regulatory ambit of the Reserve Bank of India (RBI) under two laws, namely, the Banking Regulations Act, 1949, and the Banking Laws (Co-operative Societies) Act, 1955.
  • They were brought under the RBI’s watch in 1966, a move which brought the problem of dual regulation along with it.

Dual Regulation of UBBs:

Urban Co-operative Banks are regulated and supervised by State Registrars of Co-operative Societies (RCS) in case of single-State co-operative banks and Central Registrar of Co-operative Societies (CRCS) in case of multi-State co-operative banks and by the RBI.

  • The RCS exercises powers under the respective Co-operative Societies Act of the States with regard to incorporation, registration, management, amalgamation, reconstruction or liquidation and in case of UCBs that have multi-State presence, are exercised by the CRCS.
  • The banking related functions such as issue of license to start new banks/branches, matters relating to interest rates, loan policies, investments and prudential exposure norms are regulated and supervised by the Reserve Bank under the provisions of the Banking Regulation Act, 1949.
[Ref: The Hindu]

 

PMC scam fallout: Bank deposit insurance cover to be hiked

Finance Minister said the government will bring legislations on raising insurance cover on bank deposits from the current Rs 1 lakh and regulating multi-state cooperative banks amidst a crisis in PMC Bank affecting lakhs of depositors.

PMC-scam-fallout-1

  • These legislations came in the wake of scam in the PMC Bank affecting lakhs of customers who are facing difficulties in withdrawing their money due to restrictions imposed by RBI.

What is PMC bank scam?

PMC bank

  • Punjab & Maharashtra Cooperative (PMC) Bank is a Scheduled Urban Co-operative Bank.
  • The higher management of the PMC Bank has given huge loan to the Housing Development and Infrastructure Ltd (HDIL) and its group entities.
  • HDIL promoters allegedly secretly partnered with the bank management to draw loans from the bank. The bank also allegedly created fictitious accounts of companies which borrowed small sums of money, and created fake reports to hide from regulatory supervision.

 

What is Deposit insurance?

deposit-insurance--3

  • Deposit insurance is providing insurance protection to the depositor’s money by receiving a premium.
  • The government has set up Deposit Insurance and Credit Guarantee Corporation (DICGC) under RBI to protect depositors if a bank fails.
  • Every insured bank pays premium amounting to 0.001% of its deposits to DICGC every year.

What happens to depositors’ money when a bank fails?

When a bank is liquidated, depositors are entitled to receive an insurance amount of ₹1 lakh per individual from the Deposit Insurance and Credit Guarantee Corporation of India (DICGC).

The ₹1 lakh insurance limit includes both principal and interest dues across your savings bank accounts, current accounts, fixed deposits and recurring deposits held with the bank. 

What is the procedure for depositors to claim the money from a failed bank? 

The DICGC does not deal directly with depositors.

  1. The RBI (or the Registrar), on directing that a bank be liquidated, appoints an official liquidator to oversee the winding up process. 
  2. Under the DICGC Act, the liquidator is supposed to hand over a list of all the insured depositors (with their dues) to the DICGC within three months of taking charge.
  3. The DICGC is supposed to pay these dues within two months of receiving this list. 

In FY19, it took an average 1,425 days for the DICGC to receive and settle the first claims on a de-registered bank.

Who are insured by the DICGC?

The corporation covers all commercial and co-operative banks, except in Meghalaya, Chandigarh, Lakshadweep and Dadra and Nagar Haveli. Besides, Only primary cooperative societies are not insured by the DICGC.

The DICGC does not include the following types of deposits:

  1. Deposits of foreign governments.
  2. Deposits of central/state governments.
  3. Inter-bank deposits.
  4. Deposits of the state land development banks with the state co-operative bank.
  5. Any amount due on account of any deposit received outside India.
  6. Any amount specifically exempted by the DICGC with previous approval of RBI.

Reforms needed:

  1. Enhance the insurance cover and the insured amount.
  2. Allow private players to provide insurance cover.
  3. Reduce the time delay in settling claims.

About Deposit Insurance and Credit Guarantee Corporation (DICGC)

Deposit Insurance and Credit Guarantee Corporation

  • DICGC is a wholly owned subsidiary of Reserve Bank of India.
  • It was established in 1978 under the Deposit Insurance and Credit Guarantee Corporation Act, 1961 for the purpose of providing insurance of deposits and guaranteeing of credit facilities.
  • The deposit insurance scheme is mandatory for all banks and no bank can voluntarily withdraw from it. However, the DICGC has the power to cancel the registration of an insured bank if it fails to pay the premium for three consecutive half-year periods.

Institutions covered under deposit insurance

  • The corporation covers all commercial and co-operative banks, except in Meghalaya, Chandigarh, Lakshadweep and Dadra and Nagar Haveli.
  • Primary cooperative societies are not insured by the DICGC.

What are insured by DICGC?

  • DICGC insures all bank deposits, such as saving, fixed, current, recurring deposit for up to the limit of 100,000 of each deposits in a bank.

What types of deposits are not insured by the DICGC?

  • Deposits of foreign governments
  • Deposits of central/state governments
  • Inter-bank deposits
  • Deposits of the state land development banks with the state co-operative bank
  • Any amount due on account of any deposit received outside India
  • Any amount specifically exempted by the DICGC with previous approval of RBI
[Ref: India Today]

 

Easing of IBC deadline to serve interests of public, debtor: MCA secretary

The Ministry of Corporate Affairs has found comfort in the fact that the Supreme Court has not struck down the 330-day timeframe for completing the insolvency resolution process, but has simply done away with the “mandatory” clause for following the deadline.

bankruptcy cases

  • The order will finally pave the way for resolution of Essar Steel, one of the oldest cases in the IBC process.

Essar Steel verdict changes the rules of the game 3

Verdicts of court

330-day window

  • As per the Insolvency and Bankruptcy Code (Amendment) act, 2019, the insolvency resolution process must be completed within 330 days.

 Verdict of court

  • The supreme court said that the 330-day mandatory timeline is ‘excessive and unreasonable restriction on the litigant’s right to carry on business under Article 19(1)(g) of the Constitution. The amendment also goes against Article 14 of the Constitution, which says that the state cannot deny to any person equality before the law or equal protection of the laws within the territory of India.

Waterfall mechanism

  • IBC follows a waterfall mechanism which delineates the order in which the liquidation proceeds will be distributed among the different categories of creditors. According to this formula, secured financial creditors hold the first right over the distribution of funds followed by unsecured financial creditors and operational creditors, in that order.

Verdict of court

  • The two set of creditors (financial and operational creditors) will be treated differently during the insolvency proceedings and during taking over of a debt-ridden firm by another company.
  • There is no principal of equality between secured and unsecured creditors

Background

  • In in July 2019, the NCLAT placed financial (secured and unsecured) and operational creditors on the same footing, setting aside the categorisation by the resolution plan.
  • Peeved with the NCLAT ruling, the financial creditors had approached the apex court saying that the NCLAT order exceeds the scope of the IBC.

Significance of the order

  • The order will finally pave the way for resolution of Essar Steel, one of the oldest cases in the IBC process.
  • It was one of the original Dirty Dozen referred by the RBI to NCLT for Corporate Insolvency Resolution Process under the IBC Code.

To know more about Insolvency & Bankruptcy Code Bill, refer to IASToppers’ Video summary: https://www.iastoppers.com/insolvency-bankruptcy-code-bill/

Some important Definitions

Insolvency: It is an entity (a person, family, or company) becomes insolvent when it cannot pay its lenders back on time.

Bankruptcy: Bankruptcy is a legal declaration of one’s inability to pay off debts. There are two main forms of bankruptcy – reorganization and liquidation bankruptcy. Under reorganization bankruptcy debtors restructure their repayment plans to make them more easily met. Under liquidation bankruptcy, debtors sell certain assets in order to make money they can use to pay off their creditors.

Insolvency Resolution: The IBC Code outlines separate insolvency resolution processes for individuals, companies and partnership firms. The process may be initiated by either the debtor or the creditors. A maximum time limit, for completion of the insolvency resolution process has been set in IBC code.

[Source: The Hindu, Economic Times]

 

European Investment Bank drops fossil fuel funding

The European Investment Bank (EIB), the EU’s financing department, will bar funding for most fossil fuel projects.

European-Investment-Bank-drops-fossil-fuel-funding-2

About the new policy of EIB

  • Under the new policy, energy projects applying for EIB funding will need to show they can produce one kilowatt hour of energy while emitting less than 250 grams of carbon dioxide, excluding traditional gas-burning power plants.

Gas projects, common in EU member countries as they are seen as a cleaner alternative to coal and oil, can still be finance by EIB provided they are based on the new technologies such as

  • Carbon capture and storage,
  • Combining heat and power generation
  • Mixing in renewable gases with the fossil natural gas.

About European Investment Bank

European-Investment-Bank

  • The European Investment Bank is the European Union’s nonprofit long-term lending institution established in 1958 under the Treaty of Rome.
  • It is the biggest multilateral financial institution in the world and one of the largest providers of climate finance.
  • The EIB is financially autonomous and raise money by issuing bonds on international capital markets.
  • It lends to the projects outside EU region as well.

The EIB Group has two parts:

  1. European Investment Bank
  2. European Investment Fund (specialises in finance for small businesses and mid-caps)

Key Fact

  • Big metro rail projects in India such as in Pune, Bangalore and Lucknow are/will be financed by the EIB.
[Ref: BBC]

 

Bilateral & International Relations

Chile to hold referendum on new constitution

Chile has said it will stage a referendum to replace the country’s dictatorship-era constitution in April 2020, conceding to a key demand of protesters after nearly a month of violent civil unrest.

Chile-to-hold-referendum-on-new-constitution

  • The announcement came as thousands took to the streets to mark a year since Camilo Catrillanca, a young indigenous man, was shot dead by police in a town of Chile.

Current legislation in Chile

  • Currently, Chile is using 1980 charter enacted by the military government of Augusto Pinochet.
  • However, the current charter does not establish the state’s responsibility to provide education and healthcare, two demands made by the Chileans.

About the proposed referendum

Chile-to-hold-referendum-on-new-constitution-1

  • The referendum will ask voters whether the constitution should be replaced and if so, how a new charter should be drafted.
  • It will propose three different models for a body to devise a new constitution, made up of either fully elected representatives, political appointees or an equal mix of both.
[Ref: Indian Express]

 

Opec+ faces ‘major challenge’ in 2020 from competitors’ surging output: IEA

The Opec+ countries face a major challenge in 2020 as demand for their crude is expected to fall sharply, the International Energy Agency said, adding urgency to the oil producer group’s policy meeting next month.

Opec+-faces-'major-challenge'-in-2020-1

About International Energy Agency (IEA)

International-Energy-Agency-(IEA)

  • The International Energy Agency (IEA) is a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis.
  • The Governing Board is the main decision-making body of the IEA, composed of energy ministers or their senior representatives from each member country.
  • Unlike the World Bank or the International Monetary Fund (IMF), the IEA does not dispense grants or make loans.
  • The IEA has 30 member countries and 8 Association countries.
  • An IEA collective action would be initiated in response to a significant global oil supply disruption and would involve IEA Member Countries making additional volumes of crude and/or product available to the global market (either through increasing supply or reducing demand), with each country’s share based on national consumption as part of the IEA total oil consumption.
  • To focus on the “3Es” of effectual energy policy: (i) Energy security, (ii) Economic development and (iii) Environmental protection

IEA Membership

Before becoming a member country of the IEA, a candidate country must demonstrate that it has:

  • crude oil and/or product reserves equivalent to 90 days of the previous year’s net imports, to which the government has immediate access (even if it does not own them directly) and could be used to address disruptions to global oil supply;
  • a demand restraint programme to reduce national oil consumption by up to 10%;
  • legislation and organisation to operate the Co-ordinated Emergency Response Measures (CERM) on a national basis;
  • legislation and measures to ensure that all oil companies under its jurisdiction report information upon request;
  • measures in place to ensure the capability of contributing its share of an IEA collective action.

About OPEC

OPEC-2

  • The Organization of the Petroleum Exporting Countries (OPEC) is a group of oil-producing nations that was first established in Baghdad, Iraq, in 1961.
  • It is headquartered at Vienna,
  • OPEC was a major player in the shift towards state control over natural resources. It has a massive impact on oil production and price around the world.
  • Before OPEC was formed, the oil market was dominated by a group of multinational companies. The formation of OPEC helped ensure that private companies could not unilaterally cut prices throughout the world.
  • OPEC Fund for International Development (OFID), established as a multilateral development finance institution is aimed at promoting cooperation between Member States of OPEC and other developing countries.

Objective:

  • Coordinate and unify the petroleum policies of its Member Countries and
  • Ensure the stabilization of oil markets in order to secure an efficient and regular supply of petroleum to consumers and a steady income to producers

Members:

  • Iran, Iraq, Kuwait, Saudi Arabia and Venezuela are the founding Members of the Organization.

Today, OPEC is comprised of 14 members. They are:

opec

  1. Iran, Iraq, Kuwait, Qatar, Saudi Arabia, United Arab Emirates (six in the Middle East)
  2. Algeria, Angola, Gabon, Libya, Nigeria, Congo (six in Africa)
  3. Ecuador and Venezuela (two in South America)

What is OPEC+?

  • A new term, OPEC+, was recently emerged in the crude oil price analysis.
  • The OPEC and its new crude-producing allies make up OPEC+, with the “+” consisting of ten additional oil-producing nations, the largest three being Russia, Mexico and Kazakhstan.
[Ref: Economic Times]

 

Science & Technology

‘Ultima Thule,’ Farthest Spacecraft-Visited Rock, Renamed ‘Arrokoth’ After Nazi Controversy

Ultima Thule has been renamed Arrokoth, or “sky” in the Native American Powhatan language, following a backlash over the previous name’s Nazi connotations.

NASA-RENAMES-SOLAR-SYSTEM-OBJECT-PREVIOUSLY-KNOWN-AS-‘ULTIMA-THULE’

About Ultima Thule

  • It is the farthest cosmic body ever visited by a spacecraft. Its technical designation is 2014 MU69.

Ultima-Thule

  • It is an icy rock which orbits in the Kuiper Belt about a billion miles beyond Pluto.
  • It was first seen by the Hubble Space Telescope in 2014 and was then surveyed by the NASA spaceship New Horizons, with images showing it consisted of two spheres stuck together in the shape of a snowman.

What is controversy around Ultima Thule?

  • Ultima Thule is a Latin expression that means beyond Thule (borders of the known world) and is used to denote a mythical, distant and unknown land.
  • This name was used to refer to the mythological homeland of the Aryan race, before being adopted by Nazi people in the early 20th century.
  • This term is also used by the Members of (German) Thule Society. They founded a political party that evolved into Adolf Hitler’s Nazi party. Since then, the word Thule was being used by modern so called alt-right groups.

Meaning of new name – Arrokoth

  • Arrokoth is the term for “sky” in the Native American languages Powhatan and Algonquian.
  • The name was chosen based on the local Native American culture in Maryland, where the New Horizons mission control center is based.

Key facts about Arrokoth:

  • It is located in the Kuiper belt in the outermost regions of the Solar system.
  • It measures approximately 30 km in diameter and is irregularly shaped.
  • It has a reddish color, probably caused by exposure of hydrocarbons to sunlight over billions of years.
  • It belongs to a class of Kuiper belt objects called the “cold classicals”, which have nearly circular orbits with low inclinations to the solar plane.

 

About Kuiper belt:

Kuiper belt

  • Kuiper belt is a region of the solar system beyond the planets, extending from the orbit of Neptune.
  • It consists mainly small bodies or remnants from the solar system’s formation.
  • It is similar to the asteroid belt, although it is far larger — 20 times as wide and 200 times as massive.
  • The Kuiper belt objects (KBO) are composed largely of frozen volatiles (termed ‘ices’), such as methane, ammonia and water.
  • Kuiper belt is home to at least three dwarf planets — Pluto, Haumea and Makemake. Pluto, discovered in 1930, is considered its largest member.
  • International Astronomical Union and Minor Planets Centre names the objects that lie in the Kuiper Belt.
[Ref: Independent, News18]

 

Key Facts for Prelims

Sisseri River Bridge in Arunachal Pradesh inaugurated

Defence Minister of India inaugurated the Sisseri River Bridge at Lower Dibang Valley in Arunachal Pradesh.

Sisseri-River-Bridge-in-Arunachal-Pradesh-inaugurated-by-Defence-Minister-Rajnath-Singh

  • It is a 200-metre long bridge between Jonai-Pasighat-Ranaghat-Roing road.

Significance of the bridge

Sisseri-River-Bridge-in-Arunachal-Pradesh

  • It will ease connectivity between Dibang Valley and Siang.
  • It will cut down the travel time by about five hours from Pasighat to Roing.
  • It will play an important role in the overall development of the region and would provide more opportunities in the fields of employment, trade & tourism.
  • The bridge was constructed by ‘Project Brahmank’ of Border Roads Organisation (BRO).
  • This bridge is strategically important from the military viewpoint and will be a part of Trans Arunachal Highway.

Border Area Development Programme

  • The Department of Border Management, Ministry of Home Affairs has been implementing the Border Area Development Programme (BADP) through the State Governments as part of a comprehensive approach to Border Management.
  • The programme aims to meet the special development needs of the people living in remote and inaccessible areas situated near the international border and to saturate the border areas with the essential infrastructure.
  • Under this programme priority is given to the areas closer to the border.
  • BADP was initiated in the border areas of the western region during that Seventh Five Year Plan The programme now covers 17 States: Arunachal Pradesh, Assam, Bihar, Gujarat, Himachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Rajasthan, Sikkim, Tripura, Uttar Pradesh, Uttarakhand and West Bengal.

 [Ref: Indian Express]

 

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