Development & Infrastructure

About the White Revolution or Operation Flood in India | UPSC – IAS

Features of Operation Flood or White revolution in india upsc

Features of Operation Flood or White revolution in india upsc

White Revolution in India its Objectives, Phases and Achievements | UPSC – IAS

Operation Flood is the program that led to “The White Revolution.“ White revolution is associated with the package programme adopted to increase the production of milk is known as White Revolution in India.

  • Behind Amul products lies a successful history of cooperative dairy farming in India. Verghese Kurien, nicknamed the ‘Milkman of India’ & father of “White Revolution in India”, played a crucial role in the story of Gujarat Cooperative Milk and Marketing Federation Ltd that launched Amul. Based in Anand, a town in Gujarat,
  • Amul is a dairy cooperative movement joined by about 2 and half million milk producers in Gujarat. The Amul pattern became a uniquely appropriate model for rural development and poverty alleviation ,spurring what has come to be known as the White Revolution.

Operation Flood 1970 as a rural development programme

Operation Flood organised:- Cooperatives of milk producers into a nationwide milk grid, with the purpose of increasing milk production, bringing the producer and consumer closer by eliminating middlemen, and assuring the producers a regular income throughout the year.

  • Operation Flood was, however, not just a dairy programme. It saw dairying as a path to development, for generating employment and income for rural households and alleviating poverty.
  • The number of members of the cooperative has continued to increase with the numbers of women members and Women’s Dairy Cooperative Societies also increasing significantly.

Objectives of the Operation Flood | UPSC – IAS

  • The main objectives of the co-operative society is the procurement, transportation, storage of milk at the chilling plants.
  • To provide cattle feed.
  • The production of wide varieties of milk products and their marketing management.
  • The societies also provide superior breeds of cattle (cows and buffaloes), health service, veterinary treatment, and artificial insemination facilities.
  • To provide extension service.

Note – The program was so successful that by 1998, It made India the world’s largest milk producer, doubled the milk available for each person, and increased milk output four-fold in 30 years

Phases of the Operation Flood from 1970 – 2000

Phase one from 1970-81

  • During this period, the dairy development programme was set up in ten states to provide milk to the cosmopolitan cities, i.e. Mumbai, Kolkata, Delhi, and Chennai. The important step in this phase was the setting up of 4 Mother Dairies in Mumbai, Kolkata, Delhi, and Chennai.

Phase second from 1981-85

  • During this phase, the dairy development programme was extended in the states of Karmataka, Madhya Pradesh, and Rajasthan. In this phase, within 25 contiguous milk-shed areas (in 155 districts) a cluster of milk producers’ union was established.
  • The Research Institute at Hyderabad developed a vaccine called ‘Raksha’ to control cattle diseases. The programme also involved the improvement in milk marketing in 144 more cities o f the country. The Dairy Co-operative societies were set up in 35,000 villages and the membership exceeded 36 lakhs.

Phase third from 1985-2000

  • A number of co-operative societies were set up in most of the major states of the country and the number of co-operatives went up by 1,35,439 with a membership of 14 million . The following table 9.16 shows the spurt in milk production in India

Achievements of Operation Flood or White Revolution | UPSC – IAS

  • The White Revolution made a sound impact on rural masses and encouraged them to take up dairying as a subsidiary occupation.
  • The per capita availability of milk per day at present is about 263 gm as against 125 grams before the White Revolution.
  • The import of milk and milk production has been reduced substantially.
  • India has become the leading producer of milk in the world.
  • To improve the quality of livestock, extensive cross breeding has been launched.
  • For ensuring the maintenance of disease-free status, major health schemes have been initiated.
  • The government implemented livestock insurance on pilot basis in 2005-06.
  • The number of members of the cooperative has continued to increase with the numbers of women members and Women’s Dairy Cooperative Societies also increasing significantly.

Problems and Prospects of Operation Flood or White Revolution | UPSC – IAS

Some of the important problems of the White Revolution are as under:-

  • Collection of milk from the remote areas is expensive, time consuming, and not viable economically.
  • In most of the villages the cattle are kept under unhygienic conditions.
  • There are inadequate marketing facilities. The marketing infrastructure needs much improvement.
  • The breeds of cattle is generally inferior.
  • The extension service programme is not effective.

Other Service Providers (OSP) | UPSC – IAS

Other Service Providers (OSP) | UPSC - IAS

Other Service Providers (OSP) | UPSC - IAS

Other Service Providers (OSP) | UPSC – IAS

Recently Department of Telecom eased rules for other service providers (OSP) in the business process outsourcing (BPO) and information technology-enabled services (ITes).

  • Who are OSPs or other service providers are:– OSPs refer to firms providing services like voice based and data based outsourcing and other services popularly known as BPOs. Companies or firms which provide secondary or tertiary services such as telemarketing, telebanking or telemedicine for various companies, banks or hospital chains, respectively.

General Guidelines for OSPs are as follows:- 

  • No registration certificate will be required for OSP centres in India.
  • Special dispensations for OSPs:
    • For the OSPs the collection, conversion, carriage and exchange of the PSTN/PLMN/ISDN traffic over the Virtual Private network (NPLC, MPLS VPN) interconnecting the different OSP Centres is permissible.
    • The International OSPs are allowed to carry the aggregated switched voice traffic from their POP in a foreign country to their OSP centre in India over leased line/MPLS VPN.
    • Interconnectivity of two or more Domestic OSP Centres of the same Company or group of companies is permitted. Similarly, interconnectivity among International OSP Centres is permitted.
    • Interconnection of Remote Agent to the OSP centre/resources is permitted.
    • An OSP having multiple centres may obtain internet connection at a centralised location and this internet can be accessed from other OSP centres using leased circuits/ MPLS VPN.
  • The OSPs may also operate as under:
    • Work From Home (WFH)
    • Work From Anywhere (WFA) in India
    • Infrastructure sharing
    • Centralized EPABX (i.e., Distributed Architecture of EPABX)
  • NO Bank Guarantee whatsoever will be required for any facility or dispensation under these Guidelines.
  • The concept of Work-From-Home/ Work-From-Anywhere shall be treated as Extended Agent Position/ Remote Agent of the OSP.
  • Interconnectivity between OSP centres belonging to different OSP companies shall be permitted.
  • Bypass of licensed International Long Distance Operator (ILDO) and National Long Distance Operator (NLDO) jurisdiction should not take place.
  • EPABX at foreign location in case of international OSP will be allowed. However, the OSP will take all the necessary measures to comply with the requirements of relevant provisions of Indian laws including applicable data privacy laws. In addition, the OSP shall maintain a copy of CDR and System logs in storage at any of its OSP centres in India.

Significant analysis of the eased rules are:- 

  • With the government recognising OSP employees as extended or remote agent, companies providing such services will no longer have to carry the additional compliance burden of providing the details of all such employees to the DoT.
  • It has done away with many compliance requirements that these firms were subject to. These include reporting obligations, furnishing of bank guarantees and publication of network diagrams or a diagrammatic representation of how the computers of the firms are linked to each other.
  • The doing away of registration norms will also mean that there will be no renewal of such licenses and therefore will invite foreign companies to set up or expand their other service providing units in India.
  • An important change, which takes data-based OSPs completely out of the ambit of BPOs would mean that such firms can function like any other service firm without the strict and cumbersome guidelines such as presence of agent on location.

Role of Science & Technology in development of India | UPSC – IAS

role of science and technology in development of india upsc

role of science and technology in development of india upsc

India’s development in the fields of science and technology

Science and technology are widely acknowledged to be essential components of social and economic development. Scientific knowledge and new technologies can help tackle many of the problems that affect countries. Some of the global challenges science and technology could solve are as follows:-

  • Providing Safe drinking-water and food supplies
  • Grid-scale energy storage
  • Energy-efficient desalination
  • Cleaning up of Ocean
  • Embodied Artificial Intelligence
  • Universal flu vaccine
  • Earthquake prediction
  • Carbon sequestration

The World Bank’s World Development Report states that “Today’s most technologically advanced economics are truly knowledge – based  creating millions of knowledge related jobs in an array of disciplines that have emerged overnight,” and also says that ” the need for developing countries to increase their capacity to use knowledge cannot be overstated.”

  • Scientific and technological knowledge,
  • Physical capital,
  • Human capital,
  • Technological progress,
  • Increase in labour force,
  • Foreign investment and foreign trade.

Of these – Scientific and technological knowledge is the most important factor in economic development. And also considered as a critical determinant of economic growth. It is in this perspective that improving this capacity has become a prerequisite for sustained economic growth and improved quality of life. In the present context, the most important aspect of knowledge, of course is scientific and technological knowledge.

Developed vs Developing countries in science and technology | UPSC – IAS

While it is clear that the ability of a society to produce, select, adapt, and commercialise knowledge is critical for sustained economic growth and improved quality of life, in this respect the developing countries are in a disadvantageous situation.

  • Today, a handful of the world’s richest countries produce the overwhelming majority of new scientific and technological knowledge, and they derive great benefit from its use.
  • Countries in this exclusive group enjoy the fruits or a virtuous circle, in which the concrete benefits or research help produce the wealth and public support needed to continue the investigation of science’s “endless frontiers.”
  • Their technological edge is the key to the continued dominance of the developed countries in the world economy. Whether it is Nobel Prizes in scientific areas or patents and new products, it is the developed countries that are dominant.

Meanwhile most other nations struggle with varying degrees of success, to establish scientific and technological research systems that can invigorate their economies and provide solutions to their social needs.

  • Unfortunately for developing countries the logic of S&T research system favours the scientifically strong to become stronger. Countries that want to improve their S&T capacity have lo make extra efforts to gain and maintain the “critical mass” beyond which benefits can start to accrue. Another difficulty is that this process is long term and full of uncertainty, and scarce resources arc under pressure from a variety of competing needs.

There are other problem as well. Within developed countries, there is a widespread consensus that government policies should support R&D activities, whether in the public or the private sector. In many developing countries, however, doubts remain over whether such policies are needed. Several countries feel that they can’t afford to fritter away scarce resources on exotic research.

Nature of technological knowledge base needed for development

Role of science and technology in development of a country needs two types of knowledge; These knowledge Considered critical for development of countries.

  • Firstly, knowledge about technology, which we also call technical knowledge or simply know-how. Examples are nutrition, agriculture,chemical  or software engineering, and medicine.
    • Typically developing countries have less of this know-bow than industrial countries, and within developing countries the poor have less than the non-poor. These unequal distributions across and within countries are called knowledge gaps.
  • Secondly, knowledge about attributes, such as the quality of a product, the diligence of a worker, or the credit-worthiness of a firm-all crucial to effective markets.
    • We call the difficulties posed by incomplete knowledge of attributes as information problems. Mechanisms to alleviate infonnation problems, such as product standards, training certificates, and credit reports, are fewer and weaker in developing countries. Information problems and the resulting market failures especially hurt the poor.

Despite the difficulties that we have mentioned earlier, there are some reasons to hope that aspiring countries can make progress in closing the gaps that separate them from scientifically-advanced countries.

  • First, new information and communications technologies are providing unprecedented access to existing knowledge, and are virtually erasing the disadvantages of physical distance as a factor for research collaboration.
  • Second, more is being learned about the process of innovation, and the policies and practices that make investments in S&T effective.
  • Third, the international scientific community is by nature open, and marked by a culture of freely sharing basic knowledge. Within the community, tremendous goodwill exists to help strengthen science throughout the world. Among the developing countries, India with its tremendous manpower and institutional resources is in a good position to close the technological gap and emerge as a S&T power with a developed economy.

Significance of domestic technology base | UPSC – IAS

On another level, domestic technology recognizes the use of applied science to construct homes to achieve a particular goal, such as energy efficiency or self-sufficiency.

  • Technological know-how can to some extent be bought or transferred from the developed countries. But this is not always either feasible or even desirable.
  • Countries also need to develop their own technological base especially if they are large countries like India. At the same time, it also has to be appreciated that the most important technological breakthroughs occur because scientists are investigating nature-not because they are looking for applications of their research [e.g., Faraday’s and Maxwell’s work was pure science, but it facilitated Marconi’s and others’ work on wireless communication].
  • However, because it is increasingly true that new technologies often give rise to new sciences and disciplines [e.g., chemical engineering]. it is most accurate to view science and technology as intertwined. According to many experts, this intertwining is the principal reason why technology is advanced through the work of academic researchers.
  • It is also the principal reason why, in many fields, university research is an important contributor to technological advance, and universities as well as corporate labs are essential parts of the innovation system. Thus the problems that originate in industry are not explored only by industrial scientists. They feed into, and stimulate, the entire scientific community.”
  • This provides the rationale for developing countries like india to emphasise basic science along with technology. India is too big a country to absent itself from any field of Science and Technology.
  • Recognising that basic research is the foundation on which all technologies stand, that basic research is also a cultural necessity in any civilised country and that scientists must have the freedom to work on important problems of their choice, support to basic research needs to be substantially stepped up.

Role of Science and Technology in India | UPSC – IAS

Science and technology (S&T) is widely recognised as an important tool for fostering and strengthening the economic and social development of the country. India has made significant progress in various spheres of science and technology over the years and now has a strong network of S&T institutions, trained manpower and-an innovative knowledge base. The twenty first century marks the beginning of the knowledge era.

  • Given the rapid pace of globalization, fast-depleting material resources, increasing competition among nations and the growing need to protect intellectual property, the importance of strengthening the knowledge base is an important issue that has been recognised in India.
  • Major scientific discoveries in quick succession, new technologies arising out of these discoveries, a range of products and services based on these technologies. A technology driven economy across the world, all characterise this knowledge era.
  • Scientific knowledge and expertise, high technology industrial infrastructure and skilled work force are the strengths of a country in the knowledge era. Following sustained efforts over period since independence and a more focused thrust during the recent period in higher education, scientific research, and technology development, the country has now attained a recognised potential lo emerge as a Global player in the knowledge era.
  • At the same time modem technology development is increasingly becoming dependent on research inputs from a large number of disciplines. A seamless and multi-sectoral now of technologies and inputs from scientists and engineers from various disciplines is essential for making a visible societal impact and economic prosperity.

Efforts are being made to identify those S&T area, cutting across the traditional divides of sciences, engineering and medicine, where investments can pay rich dividends.

  • One of the areas of weakness of Indian science in the past has been the lack of effective technology transfer mechanisms. Although we have a few success stories in Atomic Energy, Space, CSIR, etc. where there was successful interaction between academia (including both the university system and the national laboratory system) and industry, in general this has been lacking. Even in these cases the driving force for these interactions came from mission-oriented agencies.
  • Globalisation and liberalisation have thrown up immense opportunities as well as some new challenges for S&T. ln an increasingly competitive world, Indian industry needs the support of indigenous S&T in a big way. Technology transfer to domestic companies from abroad is becoming more difficult because foreign companies can set up industries here and are, therefore, less willing to share technologies.
  • Even in joint ventures, foreign companies are often trying to buy out the Indian partners. Secondly, Indian companies are becoming more and more globally competitive.
  • Indian industry in the future will, therefore, have no option but to invest more and more in Indian R&D for new technology development.
  • lt is against this background that it is being increasingly recognised that greater coordination and cooperation between industry on the one hand and the R&D/academic institutions on the other, is necessary for facing emerging challenges and taking advantage of the opportunities offered.
  • If industry begins to interact actively with academia, it can also play a greater role in guiding academic activities in the direction of industry interests, be it human resource development, R&D prioritisation, or the choice of areas of international cooperation.

S&T Role at the macro level 

S&T management should focus on meeting the needs of the nation (including industry) and encompass a wide spectrum of activities, namely:-

  • Basic research,
  • Applied research,
  • Technology transfer,
  • design, development, fabrication, tests and trials,
  • Manufacturing, marketing, maintenance and product support during tile life cycle.

S&T Role at the micro level 

R&D institutions and the academia must move to couple R&D and Engineering so that the indigenous technology can meet the specific requirements of the Indian industry. In order to strengthen the interface between industry, R&D and academia and to enhance the level of industry participation, appropriate steps need to be taken at various levels by all concerned – Government, industry associations, R&D institutions and universities.

  • Given the range of problems involved with the development of S&T in the nation, it is important to take stock of the situation and develop strategies and plan to address them.
  • It is important to find ways and means of strengthening the S&T system and also make efforts to provide synergy between S&T infrastructure and industry to tackle key issues affecting S&T including the education and research systems.

Society aspects of science & technology in india

Science and technology (S&T) is widely recognised as an important tool for fostering and strengthening the economic and social development of the country. There is an urgent need to make efforts to ensure that appropriate research outputs, which can be pot to use for the benefit of society, are generated and reach the people. It is, therefore, essential to evolve a mechanism and identify programmes for application of Science & Technology for .

  • Improving the quality of life of the people (particularly the weaker sections and women).
  • For the development of rural areas to reduce regional imbalances and
  • For inculcating scientific awareness among the masses.

CSIR Milestones and Key Achievements  | UPSC  – IAS

CSIR was established by the Government of India in September 1942 as an autonomous body that has emerged as the largest research and development organisation in India . The research and development activities of CSIR include:- Aerospace engineering, Structural engineering, Environmental science, Ocean sciences, Life sciences, Metallurgy, Petroleum, Chemicals, Leather, Food and Mining.

  • Developed India’s first synthetic drug, methaqualone in 1950.
  • Developed Optical Glass at CGCRI for defence purposes.
  • Developed first Indian tractor Swaraj in 1967 completely based on indigenous know-how.
  • Achieved the first breakthrough of flowering of Bamboo within weeks as against twenty years in nature.
  • First to analyse genetic diversity of the indigenous Andamanese tribes and to establish their origin out of Africa 60,000 years ago.
  • Developed the first transgenic Drosophila model for drug screening for cancer in humans.
  • Invented, once a week non-steroidal family planning pill Saheli and non-steroidal herbal pill for asthma called Asmon.
  • Designed India’s first ever parallel processing computer, Flosolver.
  • Rejuvenated India’s one-hundred-year-old refinery at Digboi using the most modern molecular distillation technology.
  • With TCS, developed a versatile portable PC-based software ‘Bio-Suite’ for bioinformatics.
  • Design of 14 seater plane ‘SARAS‘.
  • Established first ever in the world ‘Traditional Knowledge Digital Library’ accessible in five international languages, English, German, French, Japanese and Spanish.
  • Successfully challenged the grant of patent in the US for use of haldi (turmeric) for wound healing and neem as insecticide.
  • In 2007, under the NMITLI program, began the study of Sepsivac, a drug for gram-negative sepsis.
  • In 2009, completed the sequencing of the Human Genome.
  • In 2011, successfully tested India’s 1st indigenous civilian aircraft, NAL NM5 made in association with National Aerospace Laboratories and Mahindra Aerospace.
  • In 2020, initiated clinical trials to evaluate Sepsivac’s efficacy to reduce mortality rate in COVID–19 patients.

Conclusion and A Way forward | UPSC – IAS

India must try to become “Global innovation Leader” across the board in all S&T areas. India will certainly become a ”Developed Country” sooner or later, but we can achieve this much faster if we use ‘technology foresight’ to make the right technology choices and introduce ‘coherent synergy’ in our S&T efforts. Technology Foresight helps in the selection of critical technologies for development at any point of time. india is a large country and its technology requirements also correspondingly span a wide range from nuclear to rural. It has to continue to develop strategic technologies- in nuclear, space and defence related areas.

  • The sustained efforts over years since independence and a more focused thrust during the recent period in higher education, scientific research, and technology development, India has now attained a recognised potential to emerge as a Global player in the knowledge era.
  • We now need to focus on enlarging the pool of scientific manpower and strengthening the S&T infrastructure and converting our potential into reality, pushing india into the knowledge era as a global player and raising the Indian economy to the level of developed nations.

Technologies related to energy security, food and nutritional security, health and water security, environmental security, advanced manufacturing and processing, advanced materials, etc., are all important for us. So are the so-called “knowledge based” technologies (Information Technology, particularly hardware, Nanotechnology. particularly Nanoelectronics; Biotechnology; and convergence of these technologies like Nanobiotechnology for drug delivery.

  • Scientific knowledge and expertise,
  • High technology industrial infrastructure and
  • A technically skilled workforce are the currencies of the knowledge era.

NPA in India and its impact on Indian Economy | UPSC – IAS

NPA in India and its impact on Indian Economy UPSC - IAS

NPA in India and its impact on Indian Economy UPSC - IAS

NPA in India and its impact on Indian Economy | UPSC – IAS

According to Reserve Bank of India (RBI) explains the definition of NPAs, “An asset makes non-performing when it stops to generate income for the bank.” According to the Reserve Bank of India (RBI), the gross non-performing assets in Indian banks, specifically in public sector banks, are valued at around Rs 400,000 crore (~US$61.5 billion), which represents 90% of the total NPA in India, with private sector banks accounting for the remainder.

Reasons for the Rise in NPA levels | UPSC – IAS

2004-05 to 2008-09 – In that period, commercial credit (or what is called ‘non-food credit’) doubled. It was a period in which the world economy as well as the Indian economy were booming. Indian firms borrowed furiously in order to avail of the growth opportunities they saw coming.

  • Most of the investment went into infrastructure and related areas — telecom, power, roads, aviation, steel.
  • Businessmen were overcome with exuberance and they believed, as many others did, that India had entered an era of 9% growth.
  • From 2000-2008, the Indian economy was in a boom phase and banks, especially public sector banks, started lending extensively to companies.
  • However, with the financial crisis in 2008-09, corporate profits decreased and the Government banned mining projects. The situation became serious with the substantial delay in environmental permits, affecting the infrastructure sector – power, iron, and steel – and resulting in volatility in prices of raw materials and a shortage of supply.
  • Another reason is the relaxed lending norms adopted by banks, especially to the big corporate houses, foregoing analysis of their financials and their credit ratings.

Recent Developments and Ways to Tackle NPA | UPSC – IAS

  • The Debt Recovery Tribunals (DRTs) – To decrease the time required for settling cases. They are governed by the provisions of the Recovery of Debt Due to Banks and Financial Institutions Act, 1993. However, their number is not sufficient therefore they also suffer from time lag and cases are pending for more than 2-3 years in many areas.  The original aim of the Debts Recovery Tribunal was to receive claim applications from Banks and Financial Institutions against their defaulting borrowers
  • Using unclaimed deposits – Similar to provisions for unclaimed dividends, the government may also create a provision and transfer unclaimed deposits to its account. These funds in return can be transferred to banks as capital.
  • Monetization of assets held by Banks – In this case, banks with retail franchisees should create value by auctioning a bank assurance association rather than running it themselves as an insurance company. The current set-up blocks capital inflows and doesn’t generate much wealth for the owners.
  • Make Cash Reserve Ratio (CRR) attractive – At present, the RBI asks Indian banks to maintain a certain limit on CRR on which the RBI doesn’t pay interest and hence, banks lose out a lot on interest earnings. If the CRR is made more financially rewarding for banks, it can reduce capital requirements.
  • Refinancing from the Central Bank – The US Federal Reserve spent $700 billion to purchase stressed assets in 2008-09 under the “Troubled Asset Relief Program.” Indian banks can adopt a similar arrangement by involving the RBI directly or through the creation of a Special Purpose Vehicle (SPV). 
  • Structural change to involve private capital – The compensation structure and accountability of banks create a problem for the market. Banks should be governed by a board while aiming to reduce the government’s stake and making the financial institutions attractive to private investors.
  • Credit Information Bureau – A good information system is required to prevent loan falling into bad hands and therefore prevention of NPAs. It helps banks by maintaining and sharing data of individual defaulters and willful defaulters.
  • Lok Adalats – They are helpful in tackling and recovery of small loans however they are limited up to 5 lakh rupees loans only by the RBI guidelines issued in 2001. They are positive in the sense that they avoid more cases into the legal system.
  • Compromise Settlement – It provides a simple mechanism for recovery of NPA for the advances below Rs. 10 Crores. It covers lawsuits with courts and DRTs (Debt Recovery Tribunals) however willful default and fraud cases are excluded.
  • SARFAESI Act – The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 – The Act permits Banks / Financial Institutions to recover their NPAs without the involvement of the Court, through acquiring and disposing of the secured assets in NPA accounts with an outstanding amount of Rs. 1 lakh and above. The banks have to first issue a notice. Then, on the borrower’s failure to repay, they can:
    • Securitization – It refers to the process of converting loans and other financial assets into marketable securities worth selling to the investors.
    • Asset Reconstruction – It refers to conversion of non-performing assets into performing assets.
    • Enforcement of Security without the intervention of the Court.

Further, this act has been amended last year to make its enforcement faster.

  • ARC (Asset Reconstruction Companies) – The RBI gave license to 14 new ARCs recently after the amendment of the SARFAESI Act of 2002. These companies are created to unlock value from stressed loans. Before this law came, lenders could enforce their security interests only through courts, which was a time-consuming process.
  • Corporate Debt Restructuring – It is for reducing the burden of the debts on the company by decreasing the rates paid and increasing the time the company has to pay the obligation back.
  • 5:25 rule – Also known as, Flexible Structuring of Long Term Project Loans to Infrastructure and Core Industries. It was proposed to maintain the cash flow of such companies since the project timeline is long and they do not get the money back into their books for a long time, therefore, the requirement of loans at every 5-7 years and thus refinancing for long term projects.
  • Joint Lenders Forum – It was created by the inclusion of all PSBs whose loans have become stressed. It is present so as to avoid loan to the same individual or company from different banks. It is formulated to prevent the instances where one person takes a loan from one bank to give a loan of the other bank.
  • Mission Indradhanush – The Indradhanush framework for transforming the PSBs represents the most comprehensive reform effort undertaken since banking nationalization in the year 1970 to revamp the Public Sector Banks (PSBs) and improve their overall performance by ABCDEFG.
  • Insolvency and Bankruptcy Code (IBC) – With the RBI’s push for the IBC, the resolution process is expected to quicken while continuing to exercise control over the quality of the assets. There will be changes in the provision requirement, with the requirement for the higher proportion for provisions going to make the books better.
  • Credit Risk Management – This involves credit appraisal and monitoring accountability and credit by performing various analysis on profit and loss accounts. While conducting these analyses, banks should also do a sensitivity analysis and should build safeguards against external factors.
  • Tightening Credit Monitoring – A proper and effective Management Information System (MIS) needs to be implemented to monitor warnings. The MIS should ideally detect issues and set off timely alerts to management so that necessary actions can be taken.
  • Amendments to Banking Law to give RBI more power – The present scenario allows the RBI just to conduct an inspection of a lender but doesn’t give them the power to set up an oversight committee. With the amendment to the law, the RBI will be able to monitor large big accounts and create oversight committees.
  • More “Hair-cut” for Banks – For quite some time, PSU lenders have started putting aside a large portion of their profits for provisions and losses because of NPA. The situation is so serious that the RBI may ask them to create a bigger reserve and thus, report lower profits.  
  • Stricter NPA recovery – It is also discussed that the Government needs to amend the laws and give more power to banks to recover NPA rather than play the game of “wait-and-watch.”
  • Corporate Governance Issues – Banks, especially the public sector ones, need to come up with proper guidance and framework for appointments to senior level positions.
  • Accountability – Lower level executives are often made accountable today; however, major decisions are made by senior level executives. Hence, it becomes very important to make senior executives accountable if Indian banks are to tackle the problem of NPAs.

With the potential solutions above, the problem of NPA in Indian banks can be effectively monitored and controlled, thus allowing the banks to achieve a clean balance sheet

Impact of NPA on Indian Economy | UPSC – IAS

NPA plays an important role in every economic condition and also the main cause of the increase in the current account deficit. Interest rates, Loan, Housing Loans, CRR, SLR all are directly affected by the system. The Corporates also affect the impact of higher NPA.
  • Stress in banking sector causes less money available to fund other projects, therefore, negative impact on the larger national economy.
  • Higher interest rates by the banks to maintain the profit margin.
  • Redirecting funds from the good projects to the bad ones.
  • As investments got stuck, it may result in it may result in unemployment.
  • In the case of public sector banks, the bad health of banks means a bad return for a shareholder which means that the government of India gets less money as a dividend. Therefore it may impact easy deployment of money for social and infrastructure development and results in social and political cost.
  • Balance sheet syndrome of Indian characteristics that is both the banks and the corporate sector have stressed balance sheet and causes halting of the investment-led development process.
  • NPAs related cases add more pressure to already pending cases with the judiciary.
  • Increase in Current Account Deficit: It is the main cause of the increase in current account deficit and interest rates, CRR, SLR are directly affected by the system.
  • Confidence in shareholders: Higher NPA loses the confidence of shareholders.
  • Effect on Borrowers: High NPA not only affect the serious borrowers but also affect borrowers with good credit scores.

Smart Cities Mission its Features and Challenges | UPSC – IAS

Smart Cities Mission its Features and Challenges Essay UPSC - IAS

Smart Cities Mission its Features and Challenges Essay UPSC - IAS

Smart Cities Mission its Features and Challenges | UPSC – IAS

Smart Cities Mission, is an urban renewal and retrofitting program by the Government of India with the mission to develop 100 cities across the country making them citizen friendly and sustainable. The Union Ministry of Urban Development is responsible for implementing the mission in collaboration with the state governments of the respective cities.

  • It is a five-year program in which, except for West Bengal  all of the Indian states and Union territories are participating by nominating at least one city for the Smart Cities challenge. Financial aid will be given by the central and state governments between 2017-2022 to the cities, and the mission will start showing results from 2022 onwards.

The Government of India launched the Smart Cities Mission (SCM) in 2015, to improve ease of living of citizens and create cities that are ahead of the curve in decision-making and problem solving.

Features of Smart Cities | UPSC – IAS

Its focus is on sustainable and inclusive development and to set examples that can be replicated both within and outside the Smart City, thus catalysing the creation of similar Smart Cities in various regions and parts of the country. Although there is no universal definition of a Smart City, but broadly it can be described as an urban region that is highly advanced in terms of:-

  • Overall infrastructure,
  • Sustainable real estate,
  • Communications and
  • Market viability,
  • Adequate water supply,
  • Assured electricity supply,
  • Sanitation, including solid waste management,
  • Efficient urban mobility and public transport,
  • Affordable housing, especially for the poor,
  • Robust IT connectivity and digitalization,
  • Good governance, especially e-Governance and citizen participation
  • Sustainable environment,
  • Safety and security of citizens, particularly women, children and the elderly, and health and education.

Challenges in the Smart Cities Mission | UPSC – IAS

  • Inadequate private participation – At the outset, Smart City Mission had set a target of financing 21% of the total mission cost through private participation. So far, only 15% of the projects under implementation are under public-private partnership (PPP) mode.
  • Sources of funding are not clear – While the top 60 cities have reported all their projects and the costs of most projects are stated in the project proposals (94%), but only 17 cities could identify the sources of finance at the level of each project.
  • Increasing inequality – The mission has focused on the Area Based Development (ABD) model, where it indirectly incentivizes cities to focus the bulk of their funding on a small portion of the city. Thus, the ABD projects of 99 cities are found to be covering mere 7% of the total area and 80% of the total budget. Such approach creates inequality in and among cities.
  • Increasing focus on limited sectors of the Smart City- such as 5 development categories of Transportation, Energy and Ecology, Water and Sanitation, Housing and Economy constitute almost 80% of the SCM budget. Other categories of IT, Governance, Culture and Heritage, and Health and Education constitute only 15% of the funding.
  • Recentralisation of Power- There has been increasing role of the Special Purpose Vehicles (SPV) in the cities, which have encroached the functions of the Urban Local Bodies. Also there is lack of clarity about relationship and hierarchy between the SPV and the municipality.

A Way Forward | UPSC – IAS

  • The efficacy of Smart City Centres will improve with the integration of more and more services. The aim of the mission should be convergence with other city projects and breaking through the silos of various government departments.
  • An enabling environment including governance frameworks, policy protocols, capacities of urban local bodies, and the nature of citizen-government engagement needs to be developed to further improve the urban space.

One Nation One Ration Card scheme | UPSC – IAS

One Nation One Ration Card scheme UPSC - IAS

One Nation One Ration Card scheme UPSC - IAS

One Nation One Ration Card scheme | UPSC – IAS

The Government of India is working on a plan to start “One Nation One Ration Card” scheme for the beneficiaries, mainly migrant workers, to access the Public Distribution System from any PDS shop across the nation.

The Union Minister of Consumer Affairs, Food and Public Distribution, Shri Ram Vilas Paswan asserted that the Government is going to implement “One nation-one ration card” scheme in the whole country by 30th June, 2020. 

Aim of the Scheme – “One nation-one ration card” 

Scheme aims to provide freedom to the beneficiaries, as they will not be tied to single PDS shop, lessen their dependence on shop owners and curb corruption.  One Nation One Ration Card scheme will also allow portability of food security benefits. This means poor migrant workers will be able to buy subsidised rice and wheat from any ration shop in the country.

More About One Nation One Ration Card| UPSC – IAS

The target is to finish the formalities of the scheme in 1 year and linking all the ration cards all over the country with Aadhar cards and organizing food grain distribution mechanism in its entirety through Point of Sale (PoS) machine is in the final stage.

  • The availability of Point of Sale (PoS) machines need to be ensured at all the PDS shops to implement the scheme.
  • PoS machines are available at all PDS shops in different states like Haryana, Andhra Pradesh and few other others but 100% availability is essential to provide the benefit across the country.
  • Aadhaar linkage needed for it to work; – The Supreme Court has earlier ruled that an Aadhaar card is mandatory to avail oneself of government schemes and subsidies, however, confusion prevails over whether it is mandatory to link ration cards to Aadhaar cards.

What is point of sale terminal (POS terminal) machine? | UPSC - IAS

What is point of sale terminal (POS terminal) machine? | UPSC – IAS

A point of sale terminal (POS terminal) is an electronic device used to process card payments at retail locations. A POS terminal generally does the following:

  • Reads the information off a customer’s credit or debit card
  • Checks whether the funds in a customer’s bank account are sufficient
  • Transfers the funds from the customer’s account to the seller’s account (or at least, accounts for the transfer with the credit card network)
  • Records the transaction and prints a receipt

World Population Projections 2019 Report | UPSC – IAS

World Population Projections 2019 Report UPSC - IAS

World Population Projections 2019 Report UPSC - IAS

World Population Projections 2019 Report published by UN | UPSC – IAS

World population – The report projects the world population to reach some 9.7 billion by 2050. However, it says that the overall growth rate will continue to fall. The next 30 years will see the population add 2 billion people to today’s 7.7 billion. The world population will reach 11 billion by the end of the century. Half of the projected increase in the global population up to 2050 will be concentrated in just 9 countries. This is led by India and followed by Nigeria, Pakistan, Democratic Republic of the Congo, Ethiopia, Tanzania, Indonesia, Egypt and the US. Many of the fastest growing populations are in the poorest countries. Here, population growth brings additional challenges in the form of poverty, equality, hunger and malnutrition, low education, etc.

Major highlights | UPSC – IAS

  • Fertility rates–The fertility rates are falling worldwide.
  • The average number of births per woman globally, from 3.2 in 1990, fell to 2.5 by 2019.
  • This is now projected to fall further to 2.2 births by 2050.
  • To avoid decline in a national population, a fertility level of 2.1 births per woman is necessary (in the absence of immigration).
  • Age composition – In 2018, for the first time, persons aged 65 years or over worldwide outnumbered children under age five.
  • Projections indicate that by 2050, there will be more than twice as many persons above 65 as children under five.
  • By 2050, one in six people in the world will be over age 65 (16%), up from one in 11 in 2019 (9%).
  • By 2050, the number of persons aged 65 or over will also surpass the number of adolescents and youth aged 15-24.
  • The number of persons aged 80 years or over is projected to triple, from 143 million in 2019 to 426 million in 2050.

united nations population projections UPSC IAS

  • Life expectancy – The overall life expectancy will increase from 64.2 years in 1990 to 77.1 years in 2050.
  • However, life expectancy in poorer countries is projected to continue to lag behind.
  • Today, the average lifespan of a baby born in one of the least developed countries will be some 7 years shorter than one born in a developed country.
  • The main reasons cited are high child and maternal mortality rates, conflict and insecurity, and the continuing impact of the HIV epidemic.
  • Dwindling populations – The populations of 55 countries are projected to decrease by 1% or more between 2019 and 2050.
  • The largest relative reductions in population size (loss of around 20% or more) over this period are expected in Bulgaria, Latvia, Lithuania, Ukraine, and the Wallis and Futuna Islands.
  • The key reasons are sustained low levels of fertility, and, in some places, high rates of emigration.
  • Migration – Migration flows have become a major reason for population change in certain regions.
  • Bangladesh, Nepal and the Philippines are seeing the largest migratory outflows resulting from the demand for migrant workers.
  • Myanmar, Syria and Venezuela are the countries where the largest numbers are leaving because of insecurity or conflict.
  • Sex ratio – Males are projected to continue to outnumber females until the end of the century, but the gap will close eventually.

India’s population | UPSC – IAS

  • China, with 1.43 billion people in 2019, and India, with 1.37 billion, have long been the two most populous countries of the world.
  • China and India comprise 19 and 18%, respectively, of the global total population in 2019. They are followed by the USA.
  • India is projected to surpass China as the world’s most populous country in the next 8 years i.e. by around 2027.
  • India is expected to add nearly 273 million people between 2019 and 2050.
  • It will remain the most populated country through the end of the current century.
  • Together, the population of India and Nigeria (projected to grow by 200 million) could account for 23% of the global population increase to 2050.
  • Over-65 population – In India, children under age five still outnumber the over-65 population.
  • But the over-65 population is projected to overtake the under-five group between 2025 and 2030.
  • By 2050, persons over age 65 will make up about one-seventh of India’s population.
  • By then, the 15-24 years age group in India (13.8%), too, will outnumber the over-65 group (13.6%).
  • So, children under age five are projected to constitute less than 6% of India’s population in 2050, as compared to 7% globally.

Belt and Road Initiative (BRI) Project | UPSC – IAS

“Belt and Road Initiative (BRI) Project | UPSC – IAS” is locked Belt and Road Initiative (BRI) one belt one road essay for upsc ias initiative

“Belt and Road Initiative (BRI) Project | UPSC – IAS” is locked Belt and Road Initiative (BRI) one belt one road essay for upsc ias initiative

Belt and Road Initiative BRI Project | UPSC – IAS

The Belt and Road Initiative is a global development strategy adopted by the Chinese government involving infrastructure development and investments in 152 countries and international organizations in Asia, Europe, Africa, the Middle East, and the Americas.

  • “Belt” refers to the overland routes for road and rail transportation, called “the Silk Road Economic Belt“; whereas “road” refers to the sea routes, or the 21st Century Maritime Silk Road.The BRI announced in 2013, is made up of a “belt” of overland routes and a maritime “road”, which aims to connect Asia, Europe and Africa.
  • It was known as the One Belt One Road (OBOR) and the Silk Road Economic Belt and the 21st-century Maritime Silk Road until 2016 when the Chinese government considered the emphasis on the word “one” was prone to misinterpretation.
  • The 21st Century Maritime Silk Road designed to provide an impetus to trade from China to Europe through the South China Sea and the Indian Ocean, and from China through the South China Sea towards the South Pacific.

The Chinese government calls the initiative “a bid to enhance regional connectivity and embrace a brighter future”. Some observers see it as a push for Chinese dominance in global affairs with a China-centered trading network. The project has a targeted completion date of 2049, which coincides with the 100th anniversary of the People’s Republic of China.

one belt one road countries list and Participant | UPSC IAS
Belt and Road Initiative Participant Map

Significance of Belt and Road Initiative (BRI) Project | UPSC – IAS

  • In the wake of the global slowdown, BRI offers a new model of development to China to maintain its economic growth. OBOR envisions building networks of roadways, railways, maritime ports, power grids, oil and gas pipelines, associated infrastructure projects which helps Chinese economy.
  • BRI has domestic and international dimension: as it visualises a shift from developed markets in the west to developing economies in Asia, Africa And a shift in China’s development strategy concentrating on provinces in central and western China instead of the developed east coast region.
  • Strategically important as China utilizes its economic clout to build it soft power.

Criticism and Issues with Belt and Road Initiative (BRI) Project | UPSC – IAS

  • Debt-trap diplomacy of China where BRI projects are pushing recipient countries into indebtedness and do not transfer skills or technology. For instance, Hambantota port, where Sri Lanka was forced to lease the port to China for 99 years. Also, there has been rethinking of projects in Malaysia, Maldives, Ethiopia and even in Pakistan.
  • BRI represents political and economic ambitions of China making countries like the US, Japan, Germany, Russia, and Australia unhappy about the impact of Beijing’s moves on their own economic and political interests.
  • China-Pakistan Economic Corridor (CPEC), an important component of BRI, passes through Pakistan-Occupied Kashmir, is the main reason for India signaling its displeasure over BRI and not participating in both the BRFs.

Other concerns raised include:

  • operational problems
  • lack of information transparency
  • lack of evaluation on the impact of regional social culture
  • Over-expansion of the scope of the types of BRI projects,
  • Environmental concerns stemming from China’s infrastructure buildout

Why India should join Belt and Road Initiative (BRI) Project ? | UPSC – IAS

  • India as a participant of Asian era: Projected as Project of the century, BRI signals the political end of the old order where the G7 shaped the economic agenda. BRI involves 126 countries and 29 international organizations covering half of world’s population, and India may be isolated from this new economic order.
  • Shaping global economic rules: BRI is evolving standards of multilateralism, including linkages with the United Nations SDGs. The IMF described it as a “very important contribution” to the global economy and is collaborating with the Chinese authorities on sharing the best international practices, regarding fiscal sustainability and capacity building. Being part of it, India can also shape new economic global rules.
  • A platform for voicing Indian concerns: Italy, a member of the G7, also joined BRI, and Japan also sent special envoy, despite its reservations over project. India could also have raised concerns by joining the BRF.
  • India should provide alternatives and solutions– rather than merely criticizing the project. India should improve its implementation performance so as to provide a viable option to other countries.

Why India is boycotting Belt and Road Initiative (BRI) Project ? | UPSC – IAS

  • CPEC violates India’s sovereignty as it passes through the part of the Pakistan-occupied Kashmir that belongs to India and no country can accept a project that ignores its core concerns on sovereignty and territorial integrity.
  • India also raised concerns regarding unsustainable debt trap, environmental concerns, and transparency in assessment of project costs, and skill and technology transfer to help long term running and maintenance of the assets created by local communities.
  • India is too big to be isolated and India’s continued objection will make China to consider its core concerns.

A Way forward | UPSC – IAS

  • India should highlight its territorial concerns to China and seek appropriate response recognising India’s sovereignty.
  • India should give a South Asian character to the two BRI corridors on India’s western and eastern flanks, by linking them with plans for connectivity in the ASEAN and SAARC region.
  • India can cooperate with like-minded countries like Japan, US, Australia to provide alternatives to BRI, e.g. Asia-Africa Growth Corridor etc.

Types of ATM – White, Brown, Pink, Green | UPSC – IAS

Types of ATM - White, Brown, Pink, Green UPSC - IAS gk today banking

Types of ATM - White, Brown, Pink, Green UPSC - IAS gk today banking

Types of ATM – White, Brown, Pink, Green | UPSC – IAS

In the recent years, the trend of ATM has grown all over india. Now there are many economical/ financial expert analysis on the growth of ATM usage, especially in urban areas. Now in the urban areas, people usually avoids the branch unless it is necessary, hence people in a large amount who are living in a busy scheduled life, usually prefers the ATMs.

There are Different Types Of ATM available which are as follows: –

  • White Label ATM – When ATMs are owned and operated by non-bank entities but they are not doing ‘outsourcing-contract’ from a particular bank.
  • Brown Label ATM – When banks outsourced the ATM operations to a third party.
  • Green Label ATM – ATM is provided for Agricultural Transaction.
  • Orange Label ATM – Provided for Share Transactions.
  • Yellow Label ATM –  Set up for the purpose of E-commerce.
  • PINK label ATM – Such ATM are monitored by guards who ensure that only women access these ATM. The sole purpose of such ATM is to mitigate the problem of women standing in long queues of ATM.
  • Biometric ATM – ATMs which uses security features like fingerprint scanner and eye scanner of the customer to access the bank details.

About White Label ATMs | UPSC – IAS

  • ATMs set up, owned and operated by non-bank entities are called white label ATMs.
  • They are authorized under the Payment and
    Settlement Systems Act, 2007, by the RBI.
  • Cash in ATMs is provided by the sponsored bank while ATM machine does not have any branding of Bank.
  • Their role is confined to enabling the transactions of all banks customers by establishing technical connectivity with the existing authorized, shared ATM Network Operators or Card Payment Network Operators.
  • The operators are entitled to receive a fee from the banks for the use of ATM resources by the bank’s customers and are not permitted to charge bank customer directly.
  • Tata Communications Payment Solutions Limited (Indicash) is the first company authorized by RBI to open WLAs in the country.
  • RBI directly involved because these white label Companies have to separately get license/permission from RBI to run business.

Why do we need White label ATMs ? | UPSC – IAS

  • ATMs offer convenience to customer (Because he doesn’t need to visit Bank branch every time). ATMs are open 24/7, and even on holidays.
  • Convenience to bank, because they don’t have to keep large staff/office (compared to a system without ATMs). It reduces their cost of branch-operation.

About Brown Label ATMs | UPSC – IAS

  • Brown Label ATM are those Automated Teller Machines where hardware and the lease of the ATM machine is owned by a service provider–but cash management and connectivity to banking networks is provided by a sponsor bank .
  • The private company owns & operates the ATM machine, pays office rent. They negotiate with the landlord, electricity company, telecom company and so on.
  • The bank (which has outsourced this work) provides cash for that ATM.
  • ATM has logo of that bank (which has outsourced this work).
  • RBI not involved directly. These outsourcing companies have contractual obligation with their respective banks.

About NPCI | UPSC – IAS

  • It is an initiative of RBI & Indian Banks Association (IBA) under provisions of the Payment & Settlement Systems Act, 2007.
  • It is the umbrella organization for all retail payments and settlement systems in the country.
  • It also manages the UPI platform & links all the ATMs in India.
  • Other initiatives under NPCI are: BHIM, Unified Payments Interface (UPI), RuPay, BharatQR, Aadhaar Enabled Payment System (AePS), National Automated Clearing House (NACH) for financial institutions etc

Param Shivay Supercomputer and its Specification | UPSC – IAS

Param Shivay Supercomputer India and its specifications UPSC - IAS

Param Shivay Supercomputer India and its specifications UPSC - IAS

About Param Shivay Supercomputer

Param Shivay the first super computer designed & built under the National Supercomputing Mission by C-DAC (Center for Development of Advanced Computing) at IIT-BHU (Varanasi). Although India’s first supercomputer called PARAM 8000 was launched in 1991 was built by CDAC..

Param Shivay Supercomputer Specification

Param Shivay Supercomputer will Include the following specifications:-

  • 833 teraflop capacity built at the cost of Rs 32.5 crore.
  • 1 petabyte secondary storage,
  • Open source system,
  • 223 processor nodes,
  • 384 GB per node DDR4 RAM,
  • Parallel file system,
  • and have CPU and GPU.

Other Supercomputers in India

  • At present, Indian Institute of Tropical Meteorology has Pratyush,
  • National Centre for Medium-Range Weather Forecasting has Mihir and
  • Indian Institute of Science has SERC-Cray as supercomputers in India

Significance of Param Shivay Supercomputer

The National Supercomputer Mission (NSM) is an important initiative from the Government of India. This initiative supports the vision of the government’s ‘Digital India’ and ‘Make in India‘ and it will also play an important role in keeping India in the forefront of the world’s supercomputing map. The research that takes months would be completed in hours or minutes with the help of this supercomputer.”

The problems of common man related to relevant social issues such as irrigation schemes, traffic management, health, an affordable drug will also be taken care of with this supercomputer centre, claims the institute. (IIT-BHU)

About National Supercomputing Mission

  • The Mission, launched in 2015, envisages empowering our national academic and R&D institutions spread over the country by installing a vast supercomputing grid comprising of more than 70 high-performance computing facilities.
  • These supercomputers will also be networked on the National Supercomputing grid over the National Knowledge Network (NKN).
  • The Mission would be implemented jointly by the Department of Science and Technology (DST) and Department of Electronics and Information Technology (DeitY) for over a period of seven years, through the C-DAC and Indian Institute of Science (IISc), Bengaluru.
  • The Mission also includes development of highly professional High Performance Computing (HPC) aware human resource for meeting challenges of development of these applications.
    • o PARAM Shavak is one such machine that has been deployed to provide training.
  • Application areas: Climate Modelling, Computational Biology, Atomic Energy Simulations, National Security/ Defence Applications, Disaster Simulations and Management, Computational Material Science and Nanomaterials, Cyber Physical Systems, Big Data Analytics etc.

Top-500 Project in the World (List)

  • Started in 1993, it ranks the 500 most powerful non-distributed computers in the world.
  • It publishes an updated list of the supercomputers twice a year.
  • Currently, China dominates the list with 229 supercomputers, leading the second place (United States) by a record margin of 121.
  • Since June 2018, the American “Summit” is the world’s most powerful supercomputer, based on the LINPACK benchmarks.
  • LINPACK benchmark are a measure of a system’s floating point computer power. It measures how far a computer solves a nxn system of linear equations.
  • India has 4 supercomputers in the Top-500 list of the world’s top 500 supercomputers with Pratyush and Mihir being the fastest supercomputers in India.

About C-DAC

  • It is the premier R&D organization of the Ministry of Electronics and Information Technology (MeitY) for carrying out R&D in IT, Electronics and associated areas.

National Clean Air Programme (NCAP) | UPSC – IAS

National Clean Air Programme (NCAP) UPSC IAS Gk today UPPCS

National Clean Air Programme (NCAP) UPSC IAS Gk today UPPCS

What is National Clean Air Programme (NCAP) ? | UPSC – IAS

  • It is a pollution control initiative to cut the concentration of particles (PM10 & PM2.5) by 20-30% by 2024.
  • It will have 2017 as the base year for comparison and 2019 as the first year.
  • It is to be implemented in 102 non-attainment cities. These cities are chosen on the basis of Ambient Air Quality India (2011-2015) and WHO report 2014/2018.
  • National Clean Air Programme (NCAP) was recently launched by – Ministry of Environment, Forest and Climate Change (MoEFCC).

Its objectives include-

  • Stringent implementation of mitigation measures for prevention, control and abatement of air pollution;
  • Augment and strengthen air quality monitoring network across the country;
  • Augment public awareness and capacity building measures.

Significance of National Clean Air Programme (NCAP) | UPSC IAS

  • First such effort – Framing a national framework for air quality management with a time-bound reduction target. The biggest advantage of such targets is that it helps decide the level of severity of local and regional action needed for the plans to be effective enough to meet the reduction targets.
  • Multisectoral Collaboration and Participatory approach – covering all sources of pollution and coordination between relevant Central ministries, state governments, local bodies and other stakeholders.
  • All-inclusive approach – It has tried to incorporate measures for urban as well as rural areas. Further, NCAP identifies the trans-boundary nature of air pollution and thus specifically assigns transboundary strategies in managing the air pollution in the country.
  • Linking Health and Pollution: NCAP has now taken on board the National Health Environmental Profile of 20 cities that the MoEF&CC initiated along with the Indian Council of Medical Research with special focus on air pollution and health. It has asked the Ministry of Health and Family Welfare to maintain health database and integrate that with decision making.

Implementation of National Clean Air Programme (NCAP) | UPSC IAS

  • The Central Pollution Control Board (CPCB) shall execute the nation-wide programme for the prevention, control, and abatement of air pollution within the framework of the NCAP.
  • The NCAP will be institutionalized by respective ministries and will be organized through inter-sectoral groups, which include, Ministry of Road Transport and Highway, Ministry of Petroleum and Natural Gas, Ministry of New and Renewable Energy, Ministry of Heavy Industry, Ministry of Housing and Urban Affairs, Ministry of Agriculture, Ministry of Health, NITI Aayog, CPCB, experts from the industry, academia, and civil society.
  • The program will partner with multilateral and bilateral international organizations, philanthropic foundations and leading technical institutions to achieve its outcomes.
  • The Apex Committee in the MoEFCC will periodically review the progress. Annual performance will be periodically reported upon. Appropriate indicators will be evolved for assessing the emission reduction benefits of the actions.

National Clean Air Programme (NCAP) UPSC IAS

Components of National Clean Air Programme (NCAP) | UPSC IAS

(National Clean Air Programme (NCAP) has 3 components)

Mitigation Actions: NCAP details seven mitigation actions.

  • Web-based, three-tier mechanism – to review, monitor, assess and inspect to avoid any form of non-compliance. The system will work independently under the supervision of a single authority, which will ensure accreditation of three independently operating entities.
  • Extensive Plantation Drive: Plantation initiatives under NCAP at pollution hot spots in the cities/towns will be undertaken under the National Mission for Green India (GIM) with Compensatory Afforestation Fund (CAF) being managed by National Compensatory Afforestation Management and Planning Authority (CAMPA).
  • Technology Support: Clean Technologies with potential for air pollution prevention and mitigation will be supported for R&D, pilot scale demonstration and field scale implementation.
  • Regional and Transboundary Plan: These have major role for effective control of pollution more specifically with reference to the Indo-Gangetic plain. Air quality management at South-Asia regional level by activating the initiatives under ‘Male Declaration on Control and Prevention of Air Pollution and its Likely Transboundary Effects for South Asia’ and South Asia Cooperative Environment Programme (SACEP) to be explored.
  • Sectoral Interventions: This includes sectors such as e-mobility, power sector emissions, indoor air pollution, waste management, industrial and agricultural emissions and dust management.
  • City Specific Air Quality Management Plan for 102 Non-Attainment Cities: based on comprehensive science-based approach, involving meteorological conditions and source apportionment studies.
    • A separate emergency action plan in line with Graded Response Action Plan for Delhi will be formulated for each city for addressing the severe and emergency AQIs.
    • Further, the state capitals and cities with a population more than a million may be taken up on priority for implementation.
  • State Government’s participation is not limited for evolving an effective implementation strategy but also in exploring detailed funding mechanism.

Knowledge and Database Augmentation | UPSC IAS

  • Air Quality Monitoring Network which also includes setting rural monitoring network, 10 city super network (overall air quality dynamics of the nation, impact of interventions, trends, investigative measurements, etc)
  • Extending Source apportionment studies to all Non-Attainment cities: This will help in prioritising the sources of pollution and formulation and implementation of most appropriate action plans. A unified guideline for source apportionment study will be formulated and updated by the Centre.
  • Air Pollution Health and Economic Impact Studies: Under NCAP studies on health and economic impact of air pollution to be supported. Framework for monthly analysis of data w.r.t health to be created.
  • International Cooperation including Sharing of International Best Practices on Air Pollution.
  • Review of Ambient Air Quality Standards and Emission Standards: The existing standards need to be strengthened periodically and new standards need to be formulated for the sources where standards are not available.
  • National Emission Inventory: This will be formalized under the NCAP. Its significance is in tracking progress towards emission reduction targets and as inputs to air quality model.

Institutional Strengthening | UPSC IAS

  • Institutional Framework: It involves a National Apex Committee at the MoEF&CC and State-level Apex Committee under the chief secretaries in various states. There are various other institutions being envisaged such as Technical Expert Committee and National-level Project Monitoring Unit (PMU) at the MoEF&CC and National-level Project Implementation Unit (PIU) at the CPCB.
  • Public Awareness and Education: through national portals, media engagement, civil society involvement, etc.
  • Training and Capacity Building: NCAP identifies lack of capacity on air quality issues due to limited manpower and infrastructure in the CPCB and SPCBs, lack of formal training for various associated stakeholders etc. as one of the major hurdle in an effective implementation of air pollution management plans.
  • Setting up Air Information Centre: which will be responsible for creating a dashboard, data analysis, interpretation, dissemination. This may be set up with the assistance of the IITs, IIMs.
  • Operationalize the NPL-India Certification Scheme (NPL-ICS) for certification of monitoring instrument. It will help to cater to the country’s needs with respect to the online monitoring of air pollution. The proposed certification scheme will have three major components i.e. NPL-India Certification body (NICB), certification committee, and testing and calibration facility.
  • Air-Quality Forecasting System (AQFS): as a state-of-the-art modelling system, it will forecast the following day’s air quality. The satellite data available through ISRO to be integrated for monitoring and forecasting under the NCAP.
  • Network of Technical Institutions- Knowledge Partners: Dedicated air pollution units will be supported in the universities, organizations, and institutions and a network of highly qualified and experienced academicians, academic administrators, and technical institutions will be created.
  • Technology Assessment Cell (TAC): It will evaluate significant technologies with reference to prevention, control, and abatement of pollution. Technology induction/ transfer would be facilitated, where necessary, with time bound goals for indigenization and local manufacturing.o The TAC will be created involving the IITs, IIMs, the major universities, industries, and using the existing mechanisms and programme of the Department of Science & Technology, India Innovation Hub, etc.

Natural Gas Hydrates in India | UPSC – IAS

Natural Gas Hydrates in India UPSC - IAS Science and Tech Gk today

Natural Gas Hydrates in India UPSC - IAS Science and Tech Gk today

Natural Gas Hydrates in India | UPSC – IAS | Science and Tech

Researchers at Indian Institute of Technology (IIT) Madras have experimentally shown that methane and carbon dioxide (CO2) can exist as gas hydrates.

What are Gas hydrates? | UPSC – IAS | PCS

  • They are formed when a gas such as methane gets trapped in well-defined cages of water molecules forming crystalline solids. It is a solid ice-like form of water that contains gas molecules in its molecular cavities.
  • Natural gas hydrates occur on continental margins and shelves worldwide from Polar Regions to the tropics.
  • Gas hydrate reservoirs are generally associated with biologically rich cold seep ecosystems at the seafloor. Cold seeps are locations where hydrocarbon-rich fluid seeps up from below the seafloor, often as methane or hydrogen sulfide.
  • It is estimated that total amount of carbon in the form of methane hydrates, far exceeds the carbon content in all the fossil fuel reserves put together and hence these are supposed to be the future potential energy resource.
  • Combustion of methane, is more CO2 efficient than that of any other hydrocarbon. Hence, using methane from gas hydrate compared to other hydrocarbons is relatively climate friendly.
  • According to the latest estimates of the US Geological Survey, India has the second largest gas hydrate reserves after America. The Krishna-Godavari (KG), Cauvery and Kerala basins alone have 100-130 trillion cubic feet of estimated reserves.
  • The carbon dioxide hydrate produced in the lab by the IIT team raises the possibility of sequestering or storing carbon dioxide as hydrates under the sea bed.

Extraction of Gas Hydrates: The natural gas from gas hydrate can be produced via:-

  • Depressurization: Drilling of hole into the layer of hydrate and reducing the pressure beneath. This technique is implemented for hydrates only in polar regions beneath the permafrost.
  • Thermal stimulation: via steam injection, hot brine solution etc. that raises the temperature of the local reservoir outside the hydrate region to cause the dissociation of the hydrate, thus releasing free gas which can be collected.

However, no country in the world has so far developed the technology to produce gas hydrates commercially and economically.

Issues with Gas Hydrates Extraction | UPSC – IAS

Gas hydrates are also important for seafloor stability studies, because “melting” gas hydrate may cause seafloor “landslides”. Methane released from gas hydrate may therefore play a significant role in climate change.

Indian Initiative| UPSC – IAS | PCS

  • The National Gas Hydrate Programme (NGHP) is of national importance considering India’s phenomenal growing energy demand. The programme was initiated in 1997. It first conducted studies in 2006.
  • India has entered into an agreement with Canada to develop technology in this regard.
  • IIT Madras, in collaboration with GAIL, is working to recover methane from methane hydrate from the Krishna-Godavari Basin and sequester CO2 simultaneously.

Eklavya Model Residential Schools – Tribal Education | UPSC – IAS

Eklavya Model Residential Schools - Tribal Education UPSC - IAS PCS UPPCS UPPSC Gk today The hindu Pib

Eklavya Model Residential Schools - Tribal Education UPSC - IAS PCS UPPCS UPPSC Gk today The hindu Pib

Current Status of Tribal Education in India| UPSC – IAS | PCS

  • Low Literacy Level: According to census 2011 literacy rate for STs is 59% compared to national average of 73%.
  • Interstate disparity: Wide Interstate disparity exists across the states e.g. in Mizoram and Lakshadweep STs literacy is more than 91% whereas in Andhra Pradesh it is 49.2%. In fact, in most of the north eastern states like Meghalaya, Mizoram and Nagaland, STs are at par with the general population.
  • Gender disparity: Literacy level among STs men is at 68.5% but for women it is still below 50%

Constitutional provisions for Tribal education | UPSC – IAS | PCS

  • Article 46 of Indian constitution lays down that, the state shall promote, with special care, the educational and economic interests of weaker sections of the people, and in particular, of the scheduled caste and scheduled tribes.
  • Article 29(1) provides distinct languages script or culture. This article has special significance for scheduled tribes.
  • Article 154(4) empowers the state to make any special provision for the advancement of any socially and educationally backward classes of citizen or for SCs or STs.
  • Article 275(1) provides Grants in-Aids to states (having scheduled tribes) covered under fifth and six schedules of the constitution.
  • Article 350A states that state shall provide adequate facilities for instruction in mother-tongue at the primary stage of education.

About Eklavya Model Residential Schools (EMRS) | UPSC – IAS | PCS

  • Ministry of Tribal Affairs is implementing Eklavya Model Residential Schools (EMRS) in tribal areas for providing education on the pattern of Navodaya Vidyalaya, the Kasturba Gandhi Balika Vidyalayas and the Kendriya Vidyalayas.
  • The establishing of Eklavya Model Residential Schools (EMRS) is based on the demand of the concerned States/UTs with the availability of land as an essential attribute.
  • Eklavya Model Residential Schools (EMRS) are set up in States/UTs with grants under Article 275(1) of the Constitution of India.
  • Management of each Eklavya Model Residential Schools (EMRS) is under a committee which include, among others, reputed local NGOs involved with education.

Objectives of Eklavya Model Residential Schools (EMRS) | UPSC – IAS | PCS

  • Provide quality middle and high-level education to Scheduled Tribe (ST) students in remote areas.
  • Enable them to avail of reservation in high and professional educational courses and in jobs in government and public and private sectors.
  • Construction of infrastructure that provides education, physical, environmental and cultural needs of student life.

Coverage of Scheme | UPSC – IAS | PCS

  • As per existing guidelines at least one Eklavya Model Residential Schools (EMRS) is to be set up in each Integrated Tribal Development Agency (ITDA)/ Integrated Tribal Development Project (ITDP) having 50% ST population in the area.
  • As per the budget 2018-19, every block with more than 50% ST population and at least 20,000 tribal persons, will have an Eklavya Model Residential School  (EMRS) by the year 2022.

Challenges to tribal education | UPSC – IAS | PCS

  • Poor socio-economic condition
    • Most of the tribal community is economically backward and sending their children to school is like a luxury to them. They prefer their children to work to supplement the family income.
    • Illiteracy of parents and their attitude towards education is indifferent, as well as their community never encourages the education of children.
    • Parents are not willing to send their daughters to co-educational institutions due to safety concerns.

Lack of infrastructure:

  • Schools in tribal regions lacks in teaching learning materials, study materials, minimum sanitary provisions etc.

Linguistic barriers:

  • In most of the states, official/regional languages are used for classroom teaching and these are not understood by the tribal children at primary level. Lack of use of mother tongue cause hindrance in initial basic education and learning (despite article 350-A).

Teacher related challenges:

  • Inadequate number of trained teachers is a big problem in imparting education to tribal children. Also, Irregularity of the teachers in school and their different background lead to failure in establishing a communication bridge with tribal students.

Apathy of tribal leadership:

  • Tribal leadership generally remains under the outside influences and agencies such as the administration, political parties. Tribal leaders began to exploit their own people politically, socially and economically.
  • Village autonomy and local self-governance has still not properly established. Poor law and order situation and loss of respect for authority is also a hurdle.

High illiteracy rate among tribal women:

  • The disparity in educational levels is even worse as the Scheduled Tribe women have the lowest literacy rates in India.

How to Improve tribal education ? | UPSC – IAS | PCS

  • Infrastructural development: More Eklavya Model Residential Schools (EMRS) in remaining tribal regions as well as better infrastructure in other schools such as adequate class rooms, teaching aids, electricity, separate toilets etc. should be furnished.
  • Emphasis on career or job-oriented courses: E.g. Livelihood College (Dantewada, Bastar) offers nearly 20 courses, in soft and industrial skills, and has created many job opportunities for tribal youth.
  • Local recruitment of teachers: They understand and respect tribal culture and practices and most importantly are acquainted with the local language. TSR Subramanian committee suggested Bilingual System- combination of local language and mother tongue.
  • Teacher Training: New teacher training institutes should be opened in tribal sub plan areas to meet the requirement of trained teachers.
  • Student safety: There must be strong machinery to protect students from abuse, neglect, exploitation, and violence.
  • Establish separate school for girls: This would reduce hesitation of some parents to send their daughters to co-educational institution.
  • Enhance awareness: Government should take some specific initiative such as awareness camp, street drama, counseling etc. which can create awareness among the tribals about the importance of education.
  • Regular monitoring by high level officials: This is necessary for smooth functioning of school administration.

Petroleum, chemicals and Petrochemicals investment regions | UPSC

Why in news ?
Recently Minister of State for Chemicals & Fertilizers informed that Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs) in India has registered good progress in attracting Investments for Industrial Development and generating employment

petroleum chemicals and petrochemicals investment region UPSC IAS PCS UPPCS UPPSC

What is PCPIR ? (UPSC – IAS)

  • Petroleum, chemicals and Petrochemicals investment regions (PCPIR) is based on cluster-based development model for setting up manufacturing facilities for both domestic consumption and exports in Petroleum, Chemicals and Petrochemicals.
  • The cluster is combination of production units, logistics handling, environmental protection mechanism and
    social infrastructure.
  • It includes Special Economic Zones, Free Trade Zones Warehousing Zones etc.
  • Connectivity to the region is provided by state and central governments through Rail, Road, Ports, Airports and Telecom. The state government will also be responsible for providing facilities of water, road connectivity (state roads), Waste Treatments linkages etc
  • PCPIRs will ensure developing economy of scale in petrochemical sector due to the use of common infrastructure, support services and R&D facilities.
  • Chemical and Petrochemical industries generate concerns over environmental degradation. However, PCPIRs follow a robust Environmental Impact Assessment (EIA) mechanism.

Blue Economy its Significance and Challenges | UPSC – IAS

Blue Economy upsc

Blue Economy upsc

Blue Economy and its Components | UPSC – IAS

As per the World Bank, Blue Economy is the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem. It covers several sectors linked directly or indirectly to the oceans such as –

  • Fishing, minerals, shipping and port infrastructure,
  • Marine biotechnology,
  • Marine renewable energy,
  • Marine tourism,
  • Ocean governance and education.

Blue Economy its Significance and Challenges | UPSC - IAS

Significance of Blue economy | UPSC – IAS

Economic Benefits:

  • Oceans provide 30 percent of oil and gas resources.
  • 90% of goods trade takes place through Oceans Sea of Line Communication.
  • Ocean contributes $2.5 trillion to world economy with around 60 million people are employed in fisheries and aquaculture.
  • Seabed Mining of polymetallic nodules and polymetallic sulphides to extract nickel, cobalt, manganese and rare earth metals.

Environmental Benefits:

  • Mangroves and other vegetated ocean habitats sequester 25 percent of the extra CO2 from fossil fuels, i.e., Blue Carbon.
  • Protection of coastal communities from disasters like floods and storms.
  • A Sustainable Blue Economy can help to achieve commitments under UN’s Sustainable Development Goals 2030, Paris climate agreement 2015 and the UN Ocean Conference 2017.

Challenges to Blue Economy | UPSC – IAS

  • Unsustainable development near marine areas: Physical alterations and destruction of marine and coastal habitats & landscapes largely due to coastal development, deforestation, & mining.
  • FAO estimates that approximately 57 percent of fish stocks are fully exploited and another 30 percent are over-exploited, depleted, or recovering.
  • Marine pollution: It is in the form of excess nutrients from untreated sewerage, agricultural
    runoff, and marine debris such as plastics. Deep sea mining can cause long term irreversible ecological damage to marine ecosystem.
  • Impacts of climate change: Threats of both slow-onset events like sea-level rise and more intense and frequent weather events like cyclones. Long-term climate change impacts on ocean systems like changes in sea temperature, acidity, and major oceanic currents.
  • Geopolitical issues: Geopolitical tussle between in various regions like South China Sea, Indian Ocean Region etc. and undermining International Laws like UNCLOS limits the countries from achieving the full potential of Blue Economy.
  • Unfair trade practices: Many times fishing agreements allow access to an EEZ of country to foreign operators. These operators restrict transfer of specific fishing knowledge to national stakeholders leading to low appropriation of fisheries export revenues by national operators. So the potential for national exploitation of those resources is reduced in the long run.
  • Other non-conventional threats: Defense and security related threats like piracy and terrorism combined with natural disasters (Small Island Developing States are particularly vulnerable).

Blue economy and India  | UPSC – IAS

India is trying to achieve the potential of Blue Economy by promoting the spirit of ‘SAGAR-Security and Growth for All in the Region’ in Indian Ocean Region. Some initiatives by India are:  (important for UPSC)

Sagarmala Project: Sagarmala initiative focus on three pillars of development

  • Supporting and enabling Port-led Development through appropriate policy and institutional interventions.
    • Port Infrastructure Enhancement, including modernization and setting up of new ports.
    • Efficient Evacuation to and from hinterland by developing new lines/linkages for transport (including roads, rail, inland waterways and coastal routes).
  • Coastal Economic Zones: 14 CEZs are being developed under Sagarmala initiative covering all the Maritime States.
    • CEZs are spatial economic regions comprising of a group of coastal districts or districts with a strong linkage to the ports in that region.
    • CEZ will help to tap synergies of planned economic corridors.
  • Resource exploration: India in recent times has shifted its focus towards Indian Ocean resource exploration. E.g. India has explored 75000 sq km of Indian Ocean Seabed and is developing technologies (like remotely operated vehicles) for mining the resources
  • International relations and security: India is cooperating with Indian Ocean littoral countries and projecting itself as ‘net security provider’ to ensure a safe, secure and stable Indian Ocean Region (IOR). India is also cooperating with extra regional powers like US, Japan in IOR. E.g. Asia-Africa growth corridor, QUAD etc.

Sustainable Blue Economy Conference

  • It’s the first global conference on the sustainable blue economy.
  •  It was convened by Kenya and co-hosted Canada and Japan.

Credit Rating Agencies in India Problems & Solutions | UPSC IAS

Credit Rating Agencies in India Conflicts & Solutions UPSC IAS PCS UPPCS UPPSC

Credit rating agencies in India

  • The Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999 empower SEBI to regulate CRAs operating in India.
  • All the credit agencies need to be registered with SEBI in order to operate in India.
  • There are seven Credit Rating Agencies registered with SEBI, viz. CRISIL, ICRA, CARE, India Ratings and Research, SMERA, Infomerics and Brickworks.

Significance of Credit rating agencies (UPSC IAS)

  • They provide retail and institutional investors with information that assists them in determining if debtor will be able to meet their obligations.
  • They help investors, customers etc. to get an overall idea of the strength and stability of an organization and enable them to make informed decisions.
  • These agencies also help build trust between the investors and the governments by quantifying the level of risk associated with investing in a particular country. For example-Sovereign credit ratings are given to the national governments which highlight a country’s economic and political environment.
  • CRAs help strengthening of secondary market by increasing borrower pool.
  • Credit ratings ensure a discipline amongst corporate borrowers due to because of this desire to have a good image.

Issues or Problems related with Credit Rating Agencies (UPSC IAS)

  • Conflict of interest: The CRA Regulations in India currently recognise only the issuer-pays model, under which, the rating agencies charge issuers of bond and debt instruments a fee for providing a ratings opinion. Thus, this model has an inbuilt conflict of interest.
  • Another example of conflict of interest is non-rating services such as risk consulting, funds research and advisory services given to issuers for which ratings have been provided.
  • Rating shopping: It is the practice of an issuer choosing the rating agency that will either assign the highest rating or that has the most lax criteria for achieving a desired rating. Hence, the system does not permit publishing a rating without the issuer’s consent.
  • Less competition: Credit-rating market in India is oligopolistic, with high barriers to entry. Lack of competition in the market enables CRAs to have longer, well- established relationships with the issuers which can hamper their independence.
  • Poor Rating Quality: Often ratings are provided on limited information. For e.g. If the issuer decides not to answer some determinant questions, the rating may be principally based on public information. Many rating agencies don’t have enough manpower which often leads to poor quality.
  • Independence of the ratings committee: Over the years, the membership of the ratings committee has shifted from external experts to employees of the ratings agency which has raised concerns about their independence.

Suggestions or Solutions for addressing these challenges  (UPSC IAS)

  • Removal of conflict of Interest: Moving back to the earlier “subscriber pays” model in which investors pay for the ratings can be a possible approach.
  • More Players: Rules should be made easier for new players to enter the credit rating space and compete against them.
  • Improve Quality of Ratings:
    • SEBI must also assess the predictive ability of the current rating models followed by the agencies. There is a need to invest in high-tech predictive modelling techniques.
    • Increased remuneration for manpower to attract the best talent must be ensured.
  • Cursory disclosure of all ratings: CRAs can be asked to provide briefly in their press release to the ratings given by other CRAs to the same borrower. This can help in discouraging “rating shopping”.
  • Legal protection for CRAs: There are instances of Indian CRAs being sued by the company it rates, in a bid to prevent the rating downgrade. The regulator should consider framing laws that allow CARs to express their rating opinion without fear of being sued.
  • Awareness among Investors: Investors should be made aware about the rating process and be asked to conduct a review by themselves too and stop relying solely on the ratings.
  • Rotation of rating agencies: SEBI can also explore the possibility of a mandatory rotation of rating agencies by the debt issuers (like corporations are required to change their auditors periodically under the Companies Act, 2013).

keywords: Problems & Solutions with credit rating agencies in india, UPSC IAS PCS.

Basel norms & Capital Adequacy Ratio | UPSC – IAS

Basel norms & Capital Adequacy Ratio | UPSC - IAS

Basel norms & Capital Adequacy Ratio | UPSC - IAS

Basel norms & Capital Adequacy Ratio | UPSC – IAS

Capital Adequacy Ratio is also known as Capital to Risk Assets Ratio, is the ratio of a bank’s capital to its risk. National regulators track a bank’s CAR to ensure that it can absorb a reasonable amount of loss and complies with statutory Capital requirements. It is a measure of a bank’s capital

Capital Adequacy Ratio (CAR)

Capital adequacy ratio is the ratio which determines the bank’s capacity to meet the time liabilities and other risks such as credit risk, operational risk etc. In the most simple formulation, a bank’s capital is the “cushion” for potential losses, and protects the bank’s depositors and other lenders.

  • CAR = (Tier I + Tier II Capital)/Risk Weighted Assets
  • Expressed as a percentage of a bank’s risk weighted credit exposures.
  • Measure of bank’s financial strength to ensure that banks have enough cushions to absorb losses before becoming insolvent and losing depositors’ funds.
  • CAR is required to be 9% by RBI (based on BASEL III norms), where 7% has to be met by Tier 1 capital while the remaining 2% by Tier 2 capital.

Provisioning requirement

  • Setting aside a portion of profits, in proportion of risk weighted loans given, to compensate a probable loss due to incomplete loan recovery is called provisioning.
  • Like CCB & CAR requirements, provisioning is one of the contingency measures to contain risk.
  • Different types of assets have different risk profiles e.g. Government debt has 0% risk weight
  • A high-risk weight discourages lending by increasing the capital requirement for lenders.

Criticism of BASEL norms

  • Reserve bank of India, already has sufficient “backup” mechanisms to prevent banking crisis in India- such as Cash reserve ratio (CRR), Statutory liquidity ratio (SLR), all banks are required to make fortnightly reporting to RBI about their finance and operations and so on.

Capital Conservation Buffer & Basel 3 | RBI | UPSC – IAS

Capital Conservation Buffer & Basel 3 RBI UPSC - IAS

Capital Conservation Buffer & Basel 3 RBI UPSC - IAS

Capital Conservation Buffer & Basel 3 | RBI | UPSC – IAS

The capital conservation buffer (CCoB) is a capital buffer of 2.5% of a bank’s total exposures that needs to be met with an additional amount of Common Equity Tier 1 capital. The buffer sits on top of the 4.5% minimum requirement for Common Equity Tier 1 capital. Its objective is to conserve a bank’s capital. It is the mandatory capital that financial institutions are required to hold above minimum regulatory requirement.

  • According to Capital Conservation Buffer (CCB) norms, banks will be required to hold a buffer of 2.5% Risk Weighted Assets (RWAs) in the form of Common Equity, over and above Capital Adequacy Ratio of 9%.
  • Capital Conservation Buffer currently stands at 1.875% and remaining 0.625% was to be met by March 2019.

Significance of Capital Conservation Buffer | UPSC – IAS

  • It is designed to ensure that banks build up capital buffers outside periods of stress which can be drawn down, as losses are incurred.
  • Regulations targeting the creation of adequate capital buffers are designed to reduce the procyclical nature of lending by promoting the creation of countercyclical buffers as suggested Basel 3 norms. During credit expansion, banks have to set aside additional capital, while during the credit contraction, capital requirements can be loosened. Systemically important banks are subject to higher capital requirements.
  • The capital buffers increase the resilience of banks to losses, reduce excessive or underestimated exposures and restrict the distribution of capital. These macroprudential instruments limit systemic risks in the financial system.

Why banks are unable to adhere to Capital Conservation Buffer norms? | UPSC – IAS

  • Mounting pile of stressed assets has resulted into low credit growth, deterioration in asset quality, low profitability of Indian banks & over-reliance on capital infusion from the Government. In order to protect their margins & first meet the basic capital ratios i.e. CRAR of 9%, banks have slowed down the adoption of Capital Conservation Buffer (CCB) Basel 3 norms

A Way Forward | UPSC – IAS

While relaxation of the buffer norms and capital infusion by the government are welcome steps in the time of exigency, it must be ensured that good money is not thrown after bad money. Improving credit discipline and risk management systems are the need of the hour for public sector banks. The governance issues of the banks and their over-enthusiastic lending in the past needs to be addressed.
The government should initiate long-pending reforms recommended by the P.J. Nayak Committee:-

  • Cede control of nationalized banks and cut its stake below 51%.
  • Form an independent Banking Investment Company (BIC) for corporatized governance of PSBs.
  • Performance related pay structure and incentives for upper management functionaries.

Types of Bank Capital

  • Tier I capital (Core Capital): It consists of money kept as Statutory Liquidity Ratio (SLR), in physical cash form & as share capital and secured loans. At least 6% of CAR must come from Tier 1 capital. This capital can absorb losses without bank ceasing its trading operations.
  • Tier II capital (supplementary capital): It includes after tax income, retail earnings of the bank, capital in the form of bonds/hybrid instruments & unsecured loans (getting serviced).
  • Tier III capital: Includes Non-Performing Assets (NPAs), subordinated loans (not getting serviced) & undisclosed reserves from the balance sheet.

Keywords: RBI, UPSC, PCS, IAS, Capital Conservation Buffer rbi, basel 3 norms

Partial Credit Enhancement – NBFCs Bonds | UPSC – IAS

Partial Credit Enhancement – NBFCs Bonds | UPSC – IAS

The RBI recently allowed banks to provide partial credit enhancement (PCE) to bonds issued by systemically important non-deposit taking NBFCs registered with the RBI and Housing Finance Companies (HFCs) registered with the National Housing Bank.

  • Provide partial credit enhancement or Credit enhancement means improving the credit rating of a corporate bond. For example, if a bond is rated BBB, credit enhancement, which is basically an assurance of repayment by another entity, can improve the rating to AA. This is done to provide an additional source of assurance or guarantee to service the bond.

The move comes at a time when NBFCs and HFCs have requested the government and regulators to ensure that confidence returns to the market.

  • FACT: Provide partial credit enhancement (PCE), which was introduced in 2015, is expected to help NBFCs and HFCs raise money from insurance and provident or pension funds who invest only in highly-rated instruments.

Current problems with NBFCs | UPSC – IAS

  • Multiple regulatory bodies: RBI doesn’t regulate all the NBFC. Other institutions such as NHB (National Housing Bank), SEBI, Insurance Regulatory and Development Authority (IRDAI), etc. are also involved depending on the type of NBFC.

Difficulties in access to credit

  • There is a reversal of interest rate cycle as interest rates are now going up both domestically and also in the
    international market. The RBI has steadily hiked interest rates in the recent months.
  • Another fundamental issue is the asset-liability mismatch in the operations of NBFCs as these firms borrow funds from the market — say for 3 or 5 years — and lend for longer tenures — 10 to 15 years. It has led to a situation where the NBFCs are facing a severe liquidity crunch in the short term.
  • The mutual fund is among the biggest fund provider to NBFCs via commercial papers and debentures. These investors are getting reluctant to lend post the IL&FS crisis.

Significance of NBFC DIGITALLY LEARN IAS UPSC PCS UPPCS UPPSC.

(UPSC IAS)

Riskier Lending Pattern:

  • Unlike banks, NBFCs are less cautious while lending. For example NBFCs have grown their portfolio of small and micro loans in a big way where there are risks of lack of credit history, scale and historically high NPAs.
  • The unsecured loan segment is also on the rise in the NBFC segment.
  • Cascading effect of Infrastructure Leasing and Financial Services (IL&FS) default: Default followed by downgrade of IL&FS recently has created a liquidity squeeze for the entire non-banking financial company (NBFC) sector.
  • Delayed Projects: Many infrastructure projects financed by NBFCs are stalled due to various reasons like delayed statutory approvals, problems of land acquisition, environmental clearance, etc. which has impacted their financial health.

Suggestions and Solutions | UPSC – IAS

  • RBI must encourage non-banking financial companies to securitise their assets that can be purchased by banks.
  • RBI must revisit lending restrictions placed on banks under Prompt Corrective Action and consider allowing them lending to NHB.
  • RBI may also open special window for mutual funds to get refinance against collateral.
  • A coordinated and consultative approach at this point of time to address the various problems of the sector is critical to national economic health and stability.

Keywords: Provide partial credit enhancement (PCE), NBFCs, RBI, UPSC IAS

First Human Capital Index – 2018 Released by World Bank | UPSC

First Human Capital Index - 2018 Released by World Bank | UPSC IAS UPPCS UPPSC SSC CGL RAILWAY
The Human Capital Index measures the amount of human capital that a child born today can expect to attain by age 18. It conveys the productivity of the next generation of workers compared to a benchmark of complete education and full health.
  • HCI is part of the World Development Report (WDR).
  • As part of this report, the World Bank has launched a Human Capital Project (HCP).
Human Capital Project (HCP): A program of advocacy, measurement, and analytical work to raise awareness and increase demand for interventions to build human capital. The Human Capital Index has three components:
  • Cross-country metric—the Human Capital Index (HCI).
  • Program of measurement and research to inform policy action.
  • Program of support for country strategies to accelerate investment in human capital.

What are the Findings ?

  • Global Performance: Singapore topped the list while, India was placed at 115th position out of 157 countries, lower than neighboring Nepal, Sri Lanka, Myanmar and Bangladesh.
First Human Capital Index - 2018 Released by World Bank UPSC IAS UPPCS UPPSC BPSC

State Of Human Capital In India (UPSC IAS)

  • Human Capital Index: A child born in India today will be 44 % as productive when she grows up as she could be if she enjoyed complete education and full health.
  • Probability of Survival to Age 5: 96 out of 100 children born in India survive to age 5.
  • Expected Years of School: In India, a child who starts school at age 4 can expect to complete 10.2 years of school by her 18th birthday.
  • Harmonized Test Scores: Students in India score 355 on a scale where 625 represents advanced attainment and 300 represents minimum attainment.
  • Learning-adjusted Years of School: Factoring in what children actually learn, expected years of school is only 5.8 years.
  • Adult Survival Rate: Across India, 83 % of 15-year olds will survive until age 60. This statistic is a proxy for the range of fatal and non-fatal health outcomes that a child born today would experience as an adult under current conditions.
  • Healthy Growth (Not Stunted Rate): 62 out of 100 children are not stunted. 38 out of 100 children are stunted, and so at risk of cognitive and physical limitations that can last a lifetime.