National Current Affairs – UPSC/KAS Exams- 7th February 2019

RBI unlikely to transfer contingency fund to govt.

1

Topic: Economy

In News: The Reserve Bank of India (RBI) is unlikely to give in to the government’s demand of transferring funds that was set aside for contingency reserves in 2016-17 and 2017-18.

More on the topic:

  • The sources said there was no precedence of such a dividend being paid, that is, from funds that have already been set aside for contingencies.
  • The RBI has now decided to conduct statutory audit of its account twice a year, so that it can transfer the surplus to the government as many times. The government has been demanding more funds as dividend from the RBI which has become a bone of contention.
  • A six-member committee headed by former RBI Governor Bimal Jalan has been formed to review the economic capital framework of the central bank. The committee would submit its report within 90 days from the date of its first meeting.

 How does RBI build its reserves?

  • The reserves with the RBI accumulate due to several factors.
  • First is its income from three sources: interest on government bonds held for conducting open market operations; fees from government market borrowing programme; and income from investment in foreign currency assets.
  • Second source is earnings retained after giving dividends to government.
  • Third source is revaluation of foreign assets and gold.
  • The RBI needs adequate capital reserves for monetary policy operations, currency fluctuation, possible fall in value of bonds, sterilization costs related to open-market operations, credit risks arising from the lender of last resort function and other risks from unexpected increase in its expenditure.

Is there a right level of reserves?

  • The RBI Act does not specify the amount to be transferred to the government. There is no consensus on the right level of capital for a central bank. Unlike a private bank, a central bank can work with a negative net worth too.
  • RBI transfers the surplus to the government after keeping all provisions and contingency buffers, according to its statutory mandate under Section 47 of the RBI Act

Global Practice:

  • Every country has its own way of handling the issue of central bank capital. For example, the Bank of Korea is not only legally bound to transfer 30% of its annual profits to statutory reserves but also has a right to call for more capital from the South Korean government when it feels the need to bolster its balance sheet.
  • The Singapore constitution says that the Monetary Authority of Singapore has the responsibility to safeguard accumulated reserves which were not added during the term of the current government.
  • Like in India, central banks in both the UK and US decide after consultations with the government. But in Japan, it is the government that decides. By and large, with a few exceptions, the quantum of surplus transfer averages around 0.5% of the GDP.

Source: The Hindu

Unregulated deposit schemes to be banned

2

Topic: Economy

In News: The Union Cabinet  approved the official amendments to an Act that classifies any deposit scheme not registered with the government as an offence and bans it.

More on the Topic:

  • The Cabinet has given its approval to move official amendments to the Banning of Unregulated Deposit Schemes Bill, 2018, pursuant to the recommendations of the Standing Committee on Finance.
  • The amendments will further strengthen the Bill in its objective to effectively tackle the menace of illicit deposit-taking activities, and prevent such schemes from duping poor and gullible people of their hard-earned savings.
  • Among the provisions is one that bans deposit-takers from promoting, issuing advertisements or accepting deposits in any unregulated scheme.
  • The principle is that the Bill would ban unregulated deposit-taking activities altogether, by making them an offence ex-ante rather than the existing legislative-cum-regulatory framework that only comes into effect ex-post with considerable time lags.

What’s Unregulated Schemes:

  • According to the Bill, a deposit-taking scheme will be considered unregulated if it is not registered with regulators such as Ministry of Corporate Affairs (MCA), RBI, SEBI, among others.
  • According to the Bill, there will be three different types of offences -running of unregulated deposit schemes, fraudulent default in regulated deposit schemes, and wrongful inducement in relation to unregulated deposit schemes.
  • As per RBI data, during July, 2014 to May, 2018, 978 cases of unauthorised schemes were discussed in State Level Coordination Committee (SLCC) meetings in various states and were given to the respective law enforcement agencies in the states.

Source: The Hindu

Panel defers resort project at Andamans

3

Topic: Environment and Ecology

In News: An expert committee of the Union Environment Ministry has “deferred” clearance to a Rs. 100 crore proposal by the Andaman and Nicobar Islands Integrated Development Corporation Limited (ANIIDCL) to develop an island resort, as well as put up “premium tents” and “tree houses”, on the grounds that it doesn’t take into account the biodiversity of the islands’ coast.

More on the Topic:

  • The Centre has been working on a long-term plan to make several of the islands more conducive to tourism. Last year, the Home Ministry revived an Island Development Agency that would coordinate infrastructure projects to aid tourism in the A&N islands as well as Lakshadweep.
  • The ANIIDCL presented plans for the development of a premium Island Resort at Lalaji Bay, Long Island, A&N Islands, to an expert committee of the Environment Ministry tasked with evaluating infrastructure proposals along India’s coasts.
  • The committee observed that as the area where the premium resort is proposed seems to be in an ecologically very fragile and is biodiversity rich, a sub-committee shall undertake a site visit to assess the likely impact of tourism activities on the eco-system. The proposal in its present form is premature for its consideration for appraisal.
  • The panel also expressed “concern” over the management of solid waste collection, treatment and disposal and how these would be managed once the project was commissioned and handed over to the resort.

About Andaman Nicobar Islands:

  • The Andaman and Nicobar Islands, one of the seven union territories of India comprising 572 islands of which 37 are inhabited, are a group of islands at the juncture of the Bay of Bengal and Andaman Sea.
  • The territory is about 150 km (93 mi) north of Aceh in Indonesia and separated from Thailand and Myanmar by the Andaman Sea. It comprises two island groups, the Andaman Islands (partly) and the Nicobar Islands, separated by the 150 km wide Ten Degree Channel (on the 10°N parallel), with the Andamans to the north of this latitude, and the Nicobars to the south (or by 179 km). The Andaman Sea lies to the east and the Bay of Bengal to the west.
  • The territory’s capital is the city of Port Blair. The total land area of these islands is approximately 8,249 km2 (3,185 sq mi). The capital of Nicobar Islands is Car Nicobar. The islands host the Andaman and Nicobar Command, the only tri-service geographical command of the Indian Armed Forces.
  • The Andaman Islands are home to the Sentinelese people, an uncontacted people. The Sentinelese are the only people currently known to not have reached further than a Paleolithic level of technology

Model Mains Question:The Centre has been working on a long-term plan to make several of the Andaman and Nicobar islands more conducive to tourism. Critically analyze the consequences of this move on the Ecology.

Source: The Hindu

Zero Fatality Corridor

Topic: Government Initiatives

In News: Arvind Kejriwal-Led Delhi Government Launches Zero Fatality Corridor, To Reduce Road Accidents.It was launched by Delhi’s transport minister Kailash Gahlot and officials say that the activity was in tune with the Delhi government’s plan of reducing fatalities because of road accidents by 30 percent before 2020.

More on the Topic:

  • In an attempt to bring down injuries and deaths due to road accidents, the Arvind Kejriwal-led Delhi government has launched the ‘Zero Fatality Corridor’ to examine the cause for accidents and crashes on the stretch between Burari Chowk and Bhalswa chowk, located on the outer ring road. The initiative is to be run in partnership with SaveLIFE Foundation, a leading road safety non-profit organization.
  • Delhi witnessed 1,691 road crash fatalities last year.
  • Through the ‘Zero Fatality Corridor’ pilot project government aims is to reduce the fatalities to near zero levels on this particular stretch. After evaluating the impact of the initiative, the model will be replicated in other parts of the city.

Source:The Hindu

 Amendment to the Cinematograph Act, 1952

Topic: Intellectual Property Rights

In News: The Union Cabinet has approved the proposal of Ministry of Information and Broadcasting for introducing the Cinematograph Amendment Bill, 2019 to amend to the Cinematograph Act, 1952. The Bill aims to tackle Films piracy by including the penal provisions for unauthorized camcording and duplication of films.

More on the Topic:

  • The following section shall be inserted after Section 6A of the Cinematograph Act, 1952.
  • 6AA: “Notwithstanding any law for the time being in force, no person shall without the written authorization of the author be permitted to use any audio visual recording device to knowingly make or transmit or attempt to make or transmit or abet the making or transmission of a copy of a film or a part thereof.”
  • If any person contravenes the provisions of section 6AA, he shall be punishable with an imprisonment for a term which may extend to 3 years or with fine which may extend to 10 lakh rupees or with both.
  • The proposed amendments would increase Industry revenues, boost job creation, fulfil important objectives of India’s National IP policy and will give relief against piracy and infringing content online.

Background:

  • The medium of cinema, the tools and the technology associated with it and even its audience has undergone radical changes over a period of time.
  • There have also been many changes in the field of media and entertainment with the proliferation of TV channels and Cable network throughout the country, advent of new digital technology, apprehension of piracy, particularly release of pirated version of films on internet, causing huge losses to the film industry and Government exchequer.
  • Film industry has been demanding for a long time, that Government should consider Amendments to the law preventing camcording and piracy.

 Model Mains Question: Discuss the Importance of a stringent IPR Policy.

Source: PIB

Emergency Response Support System (ERSS)

6

Topic: Government Initiatives

In News: The Ministry of Home Affairs is implementing a project namely, Emergency Response Support System (ERSS) under Nirbhaya Fund scheme, with the objectives providing a single number 112 based emergency support services, which could be accessed through panic button in mobile phone.

More on the Topic:

  • Emergency Response Centers in States/UTs will respond to distress calls through computer aided dispatch support system.
  • The project has been devised in coordination with the Ministry of Women & Child Development under Nirbhaya Fund scheme.
  • An all-India launch was requested by Ministry of Women and Child Development vide letter dated 28 November 2018.
  • Launch of ERSS is taking place State/Union Territory wise based on readiness of the State/ Union Territory. As on date, ERSS has commenced in the States of Himachal Pradesh and Nagaland in November & December, 2018 respectively.

Source: The Hindu

Asia LPG Summit

7

Topic: Economy

In News: 2nd edition of the Asia LPG Summit is being held in New Delhi.

More on the Topic:

  • The summit is being organized by the World LPG Association (WLPGA) in association with major Indian public-sector oil companies (OMCs) Indian Oil, Hindustan Petroleum, and Bharat Petroleum.
  • The summit will offer a unique opportunity to the global LPG industry to interact with development agencies, NGOs and non-profit organizations who have facilitated last-mile access to LPG for the beneficiaries.
  • The summit will also bring together academia and private sector to exchange their views on the use of LPG and how pathbreaking initiatives such as ‘Pradhan Mantri Ujjwala Yojana’ can bring remarkable socio-economic transformation.

About World LPG Association:

  • The World LPG Association (WLPGA) is the authoritative global voice for the liquefied petroleum gas (LPG) industry and the worldwide industry association which represents the interests of the LPG industry globally.
  • The WLPGA promotes the use of LPG to foster a cleaner, healthier and more prosperous world.
  • With over 200 members and presence in more than 125 countries, the WLPGA represents the interests of private and public companies from the entire LPG value chain under one umbrella.
  • The WLPGA provides a platform for the exchange of best practices, facts and figures among its members.
  • The Association regularly organises interactive meetings between technical experts, members and key stakeholders to demonstrate the benefits of LPG.
  • The WLPGA was officially granted Consultative Status with the United Nations Economic and Social Council in 1989. Publications such as its Annual Statistical Review have become LPG industry references.

Source: The Hindu

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