Prelims 2021

9th October 2020 Daily Current Flash Cards

logistics in India; Krishna-Godavari river Dispute; Asset Reconstruction Company; Social Stock Exchange; Securities and Exchange Board of India (SEBI); Committees of Parliament;
By IASToppers
October 09, 2020

 

 

 

The maximum share of cargo transportation in India happens through a) Roadways or b) Railways?

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Solution: Roadways

Enrich your learning:

Key Facts related to logistics in India:

  • India spends 13% of GDP on logistics, which is more than the US (9.5%) and Germany (8%), still we hear about the lack of connectivity and increase in logistics costs.
  • The reasons may be attributable to the many challenges and geographic issues.
  • The modal mix for cargo transportation towards roads account for 60-65% of the total freight transported—the railways carry 30-35% and the remaining 5% is being fulfilled by air and water.
  • In developed countries, the share of railways is close to 50%, with China at 47% and the US at 48%.
  • In terms of CO2 emission per tonne km, the contributions are 64% by road, 28% by railway and 15% by water.
  • India has a plan to reach 300 million tonnes of steel capacity by 2030: This will require approximately 430 million tonnes of iron ore, 160 million tonnes of coking coal, 105 million tonnes of non-coking coal for DRI along with nickel, magnetite, limestone, ferro alloys cumulating to about 100 million tonnes.

 

 

 

Which committees of parliament are constituted for a specific purpose?

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Solution: Joint Parliamentary Committees and Select Committees.

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Committees of Parliament:

  • India’s Parliament has multiple types of committees.
  • They can be differentiated on the basis of their work, their membership and the length of their tenure.

Standing Committees:

  • First are committees that examine bills, budgets and policies of ministries.
  • These are called departmentally related Standing Committees.
  • There are 24 such committees and between them, they focus on the working of different ministries.
  • Each committee has 31 MPs, 21 from Lok Sabha and 10 from Rajya Sabha.
  • The main purpose is to ensure the accountability of Government to Parliament through more detailed consideration of measures in these committees.
  • The purpose is not to weaken or criticise the administration but to strengthen by investing in with more meaningful parliamentary support.
  • Departmentally related Standing Committees have a tenure of one year, then they are reconstituted and their work continues throughout the term of a Lok Sabha.
  • Ministers are not members; key committees like those related to Finance, Defence, Home etc are usually chaired by Opposition MPs.

Joint Parliamentary Committees:

  • These are committees constituted for a specific purpose, with MPs from both Houses.
  • The specific purpose could be detailed scrutiny of a subject matter or a Bill.
  • These are Joint Parliamentary Committees (JPC).

Select Committee:

  • Select Committee is formed for examining a particular Bill and its membership is limited to MPs from one House.
  • Both the JPCs and Select Committees are constituted for a specific purpose, they are disbanded after their report.
  • Both these types of committees are chaired by MPs from the ruling party.

When does a committee examine a Bill?

  • There are three broad paths by which a Bill can reach a committee.
  • The first is when the minister piloting the Bill recommends to the House that his Bill be examined by a Select Committee of the House or a joint committee of both Houses.
  • If the minister makes no such motion, it is up to the presiding officer of the House to decide whether to send a Bill to a departmentally related Standing Committee.
  • And finally, a Bill passed by one House can be sent by the other House to its Select Committee.

What happens after the report?

  • The report of the committee is of a recommendatory nature. The government can choose to accept or reject its recommendations.
  • Very often the government incorporates suggestions made by committees.
  • Select Committees and JPCs have an added advantage.
  • In their report, they can also include their version of the Bill.
  • If they do so, the minister in charge of that particular Bill can move for the committee’s version of the Bill to be discussed and passed in the House.

 

 

 

What is the Social Stock Exchange of SEBI?

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Solution: SSE is an electronic fund-raising platform, where both for-profit social enterprises (FPEs) and non-profit social enterprises (NPOs) would be allowed to list and raise various kinds of risk capital (including debt and equity) from a variety of domestic and international funders.

Enrich your learning:

Proposed Social Stock Exchange of SEBI:

  • The proposed SSE in India would be an electronic fund-raising platform, where both for-profit social enterprises (FPEs) and non-profit social enterprises (NPOs) would be allowed to list and raise various kinds of risk capital (including debt and equity) from a variety of domestic and international funders.
  • The concept is similar to a regular stock exchange but only for a social cause.
  • SSEs are not new internationally, with Brazil (2003), South Africa (2006), the UK, Canada, Singapore (all in 2013) and other countries having established them.

Why would funders be attracted to an SSE?

  • The Working Group has proposed bold tax incentives for funders — 100% tax deduction under 80G instead of 50% currently; making CSR grants to SSE listed organisations as tax deductible; exemption from Long-Term Capital Gain and Securities Transaction Tax on securities listed on SSE and removal of 10% cap on income eligible for deduction under 80G.
  • Funders would also derive comfort from:
  • Proposed ecosystem of intermediaries viz. information repositories (would collect data and perform due diligence) and social auditors (would assess social impact in a standardised manner).
  • Robust financial & social impact reporting.
  • Protective regulatory & governance mechanisms all of which will ensure proper checks and balances.
  • For social enterprises, listing on the SSE would provide increased credibility and market standing besides providing access to capital from a diverse pool of funders, both through the SSE and outside the SSE.
  • Social enterprises are also expected to benefit from the proposed tax breaks — increase in the limits for commercial activities to 50% of income from the current 20%, the fast tracking of statutory registrations, 5-year tax holiday for listed FPEs and removal of the need for periodic renewal of 80G registration.

 

 

 

What is an Asset Reconstruction Company?

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Solution: ARC is a special type of financial institution that buys the debtors of the bank at a mutually agreed value and attempts to recover the debts or associated securities by itself.

Enrich your learning:

Asset Reconstruction Company:

  • ARC is a special type of financial institution that buys the debtors of the bank at a mutually agreed value and attempts to recover the debts or associated securities by itself.
  • ARCs are registered under the RBI and regulated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act, 2002).
  • They take over a portion of the debts of the bank that qualify to be recognised as Non-Performing Assets.
  • They are engaged in the business of asset reconstruction or securitisation or both.
  • All the rights that were held by the lender (the bank) in respect of the debt would be transferred to the ARC.
  • The required funds to purchase such debts can be raised from Qualified Buyers.

What is asset reconstruction?

  • It is the acquisition of any right or interest of any bank or financial institution in loans, advances granted, debentures, bonds, guarantees or any other credit facility extended by banks for the purpose of its realisation.
  • Such loans, advances, bonds, guarantees and other credit facilities are together known by a term – ‘financial assistance’.

Who are Qualified Buyers?

  • They include Financial Institutions, Insurance companies, Banks, State Financial Corporations, State Industrial Development Corporations, trustee or ARCs registered under SARFAESI and Asset Management Companies registered under SEBI that invest on behalf of mutual funds, pension funds, FIIs, etc.
  • The Qualified Buyers (QBs) are the only persons from whom the ARC can raise funds.

What type of debts can the ARC take over?

  • The ARC can take over only secured debts which have been classified as a non-performing asset (NPA).
  • In case debentures / bonds remain unpaid, the beneficiary of the securities is required to give a notice of 90 days before it qualifies to be taken over.

 

 

 

Where are the headquarters of Krishna River Management board planned to be shifted?

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Solution: Andhra Pradesh

Enrich your learning:

Recent development in Krishna-Godavari river Dispute:

  • Telangana has agreed to withdraw the case it filed in the Supreme Court about sharing of waters of river Krishna and Godavari.
  • The Centre will go ahead with notifying the jurisdiction of the Godavari and Krishna river management boards.
  • The decision was aimed to resolve the conflict between Telangana and Andhra Pradesh over executing irrigation projects and sharing water from the Krishna and Godavari

2nd Apex Council:

  • The 2nd Apex Council was set up by the Andhra Pradesh Reorganisation Act, 2014.
  • It is headed by the Union Jal Shakti Minister and the Chief Ministers of Telangana and Andhra Pradesh are members.
  • It is mandated to approve any new projects planned by both the states on the two rivers—Godavari and Krishna.
  • The Council has power to supervise the functioning of Godavari and Krishna river management boards as well as to resolve any dispute arising out of sharing of river waters between both the states.

Andhra Pradesh Reorganisation Act, 2014:

  • As per the AP Reorganisation Act, the centre is empowered to notify the jurisdiction of these two boards.
  • Under the Act, both the boards are assigned the powers to regulate the supply of water from the projects to both the states.
  • However, their jurisdiction was not notified even after six years because of the differences between the two states.
  • The council also decided to shift the Krishna River Management headquarters to the state of Andhra Pradesh.

The recent move:

  • Telangana has agreed to withdraw the case filed in Supreme Court to enable the Centre to move forward on referring the water sharing issues to the tribunal under provisions of Inter State River Water Disputes Act (ISRWD Act), 1956.

Krishna river dispute:

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