100 important topics for prelims Concept 57 - National War Memorial, War Museum sanctioned in New Delhi

Transcription

1 100 important topics for prelims 2017 Concept 57 - National War Memorial, War Museum sanctioned in New Delhi Government has sanctioned the construction of a National War Memorial and National War Museum in New Delhi. The National War Memorial will honour the memory of all soldiers of the Indian Armed Forces who have made the ultimate sacrifice for the nation. The selected site of the memorial is located in New Delhi. Concept 58 - Indian Army conducted surgical strike across LOC The Central government announced that Indian forces had carried out surgical strikes across the Line of Control in response to the Uri terror attack. What is surgical strike? A surgical strike is a military attack which results in only damage to the intended legitimate military target, no or minimal collateral damage to the surrounding structures, vehicles, buildings, or the general public infrastructure and utilities. Concept 59 - Google Station and YouTube Go Technology giant Google announced YouTube Go and Google Station specially designed for India the world s second-largest Internet market. Google Station The firm announced extending its initiative to provide Wi-Fi at 400 railway stations in India in partnership with RailTel to include public places such as bus stops and malls. Google Station, would give partners an easy set of tools to roll-out Wi-Fi hotspots in public places. It will provide software and guidance on hardware to turn fibre connections into fast, reliable and safe Wi-Fi zones. YouTube Go The Google also introduced a more efficient version of YouTube called YouTube Go that will enable both viewing and sharing videos offline Concept 60 - SAARC Summit to be called off India decided to pull out of the SAARC summit in Islamabad this November, with other members also deciding to boycott meet. About SAARC

2 The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of nations in South Asia. Its Member states include Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka. SAARC comprises 3% of the world's area, 21% of the world's population and 3.8% of the global economy, as of SAARC was founded in Dhaka on 8th December, Its secretariat is based in Kathmandu, Nepal. The organization promotes development of economic and regional integration. It launched the South Asian Free Trade Area in SAARC maintains permanent diplomatic relations at the United Nations as an observer and has developed links with multilateral entities, including the European Union. Concept 61 - WEF ranks India as 39th most competitive economy India s improved ranking in competitiveness index India has risen rapidly among all countries in the global competitive stakes by climbing 16 notches to the 39th position during the past year in the WEF s Global Competitiveness Index. According to the World Economic Forum s (WEF) latest Global Competitiveness Report for this marks the biggest scale of improvement in competitiveness among all countries and is the second year in a row India has gone up 16 ranks in the WEF index. What does India s Improved rank indicates? It suggests that improvements in institutions and infrastructure have increased overall competitiveness along with recent reforms such as opening the economy to foreign investors and increasing transparency in the financial system. What is Global Competitiveness Report? The Global Competitiveness Report (GCR) is a yearly report published by the World Economic Forum. Global Competitiveness Report ranks countries based on the Global Competitiveness Index. The report "assesses the ability of countries to provide high levels of prosperity to their citizens. This in turn depends on how productively a country uses available resources. There are twelve pillars of competitiveness. These are: 1. Institutions 2. appropriate infrastructure 3. a stable macroeconomic framework 4. good health and primary education 5. higher education and training 6. efficient goods markets 7. efficient labor markets 8. developed financial markets

3 9. the ability to harness the benefits of existing technologies 10. its market size, both domestic and international 11. by producing new and different goods using the most sophisticated production processes 12. innovation Concept 62 - Indus water treaty Suspension of talks under Indus Water treaty Prime Minister Narendra Modi held a meeting of senior officials from the Water Resources and External Affairs Ministries and the PMO to discuss the government s options on the India-Pakistan Indus Waters Treaty in the wake of the Uri attack. Procedure of regulating the provisions of Indus Treaty According to Article VIII of the Indus Waters Treaty, the Commission must meet once a year, alternately in India and Pakistan. The last meeting was held in July About Indus Water Treaty The IWT between India and Pakistan was sealed in The IWT, brokered by the World Bank, was signed between the then Prime Minister Jawaharlal Nehru and his Pakistani counterpart General Ayub Khan. Provisions Of Treaty 1. Indus system comprises of 3 western rivers namely Indus, Jhelum and Chenab and 3 eastern rivers Ravi, Beas, and Sutlej. The treaty under Article 5.1 envisages sharing of river waters. 2. According to this treaty Ravi, Beas and Sutlej which constitute the eastern rivers are allocated for exclusive use for India before they enter Pakistan. However a transition period of 10 years was permitted in which India was bound to supply water to Pakistan from even these 3 rivers until Pakistan was able to build the canal system for utilization of waters of Indus, Jhelum and Chenab. 3. Similarly, Pakistan has been given exclusive use of west-rivers namely Jhelum, Chenab and Indus but India has been allowed to undertake development projects with certain stipulations such as India cannot obstruct flow of rivers. Pakistan also received one-time financial compensation for loss of eastern rivers. 4. India and Pakistan also decided to exchange data and co-operate in matters related to the treaty. For this purpose permanent Indus commission was created with a commissioner appointed from each country. Disputed hydro projects with Pakistan

4 It is to be noted here that under Indus Water Treaty Pakistan has raised its objections over two of the projects by India viz Kishenganga and the Ratle hydroelectric project. About Kishenganga Project The Kishanganga Hydroelectric Plant is an $864 million dam which is part of a run-of-theriver hydroelectric scheme that is designed to divert water from the Kishanganga River to a power plant in the Jhelum River basin. It is located 5 km north of Bandipora in Jammu and Kashmir, India and will have an installed capacity of 330 MW. Construction on the project began in 2007 and is expected to be complete soon. About Ratle Project The Ratle Hydroelectric Plant is a run-of-the-river hydroelectric power station currently under construction on the Chenab River, downstream of the village of Ratle in Doda district of the Indian state of Jammu and Kashmir. The project includes a 133 m tall gravity dam and two power stations adjacent to one another. Water from the dam will be diverted through four intake tunnels about 400 m southwest to the power stations. The installed capacity of both power stations will be 850 MW. On 25 June 2013, Prime Minister Manmohan Singh laid the foundation stone for the dam. The project is expected to be complete in Pakistan opposes the project as they believe it is in violation of the Indus Water Treaty. Concept 63 - Paris climate agreement Paris Climate Change Agreement (2015) Negotiations held in the framework of the yearly UNFCCC, on the measures to be taken after the second commitment period under Kyoto Protocol which ends in 2020, resulted in the adoption of the Paris Agreement. Paris agreement is a separate instrument under the UNFCCC rather than an amendment to the Kyoto protocol.174 countries and the European Union have signed up the Paris Climate Change Agreement. Here are some of the key elements of the Paris deal: 1. Temperature Goals: The objective of the agreement is to keep the global temperature rise "well below" 2 degree Celsius compared to pre-industrial times. At this level, scientists believe the worst effects of climate change can be avoided. The agreement also includes an aspirational goal of limiting the temperature rise to 1.5 degree C. Temperatures have already risen by almost 1 degree C since the industrial revolution. 2. Individual Targets: Countries are required to set their own national targets (Intended Nationally Determined Contributions) for reducing their greenhouse gas emissions. Those targets aren't legally binding, but the countries must report on their progress and update their targets every five years. The first cycle will begin in 2020.

5 Only developed countries are expected to slash their emissions in absolute terms. Developing nations are "encouraged" to do so as their capabilities evolve over time. 3. Transparency: There is no penalty if the countries miss their emission targets. Instead, the agreement relies on the transparency rules to motivate countries to fulfil their pledges. All countries must report on their efforts to reduce their emissions. 4. Money: The agreement says that the wealthy countries should continue to offer financial support to help the poor countries reduce their emissions and adapt to climate change. Actual dollar amounts were kept out of the agreement itself, but the wealthy nations had previously pledged to provide $100 billion annually in lieu of climate change by Loss and damage: To address the concern of small island nations threatened by rising seas, the agreement includes a section recognizing "loss and damage" associated with climate-related disasters. The U.S. has objected to address the issue in the agreement, worried that it would lead to claims of compensation for damage caused by extreme weather events. Present status of Green Climate Fund (GCF) as on 1 st Jan, 2017 Industrialised countries have committed $100 billion per year by 2020 for Green Climate Fund (GCF) to help developing countries invest in green energy and mitigate effects of climate change on developing countries. However, the GCF has so far raised only $10 billion and allocated money to about eight projects since it was set up. Requirement for Paris Agreement to come into force To come into force, the Paris agreement needs ratification from 55 countries that account for at least 55 per cent of the planet s greenhouse gas emissions. The agreement has already been ratified by more than 55 countries emitting more than 55% of greenhouse gas emissions. India ratified the agreement on 2 nd October, India s emission reduction targets The Indian government said it would reduce carbon emissions relative to its GDP by 33% to 35% of 2005 levels by Thus, India is not committed for reduction in the absolute amount of emissions but only for the relative amount of emissions produced per unit of GDP. India also pledged that 40% of the country's electricity would come from non-fossil fuelbased sources, such as wind and solar power, by All of the 190 countries participating in the COP21 talks in Paris are expected to publish Intended Nationally Determined Contributions, which list each country's carbon emission reduction goals.

6 India has ratifed its U.N. climate change commitments next month to mark Mahatma Gandhi s birthday. Ahead of Marrakesh meet The U.N. Climate Change treaty agreed to at the Paris summit in November 2015, enters into force only after 55 countries, accounting in total for 55 per cent of the total global greenhouse gas emissions, ratify it. India accounts for about 6 per cent of global emissions, and has joined a group of countries that have ratified the agreement by the next U.N. Climate Conference in Marrakesh on November 7, Stand by US US under Donald trump has withdrawn from the Paris Agreement stating that agreement favour developing nations such as China and India. Concept 64 - World s largest radio telescope begins operations About World s Largest Radio Telescope (FAST) The Five-hundred-meter Aperture Spherical Telescope (FAST) nicknamed Tianyan or The Eye of Heaven started operations recently. It is the world s largest radio telescope searching for signals from stars and galaxies and, perhaps, extraterrestrial. Measuring 500-meters in diameter, the radio telescope is nestled in a natural basin within a stunning landscape of lush green karst formations in southern Guizhou Province. It took five years and $180 million to complete and surpasses that of the 300-meter Arecibo Observatory in Puerto Rico, a dish used in research on stars that led to a Nobel Prize Installation of the 4,450-panel structure, nicknamed Tianyan, or the Eye of Heaven, started in 2011 and was completed in July. The telescope requires a radio silence within a five-km radius, resulting in the relocation of more than 8,000 people from their homes in eight villages to make way for the facility, state media said. Concept 65 - Budget Reforms In Budget , three major reforms have been undertaken namely: 1. Merger of Railway Budget into General Budget (No Separate Railway Budget) Genesis of Separate Railway Budget

7 A separate rail budget has its genesis in the recommendations of the Acworth Committee of1920. This was considered necessary because the railway s revenues far outstripped the general revenue. No separate Railway Budget Government has been decided to merge the Rail Budget and the General Budget. Delay in merging Railway and General Budget In 1947, when independence was achieved, railway revenues were still 6% more than the general revenue. By the 1970s the size of rail revenues had shrunk and was about 30% the size of general revenues. By it was down to 11.5%. The decision reflects the decrease over time in the relative size of the Rail Budget compared to some of the other components in the General Budget, such as defence and roads & highways. Moreover, separate railway budget kept railway portfolio into public limelight and thus railway minster avoided raising fares, leading to losses for railways. 2. Advancement in Presentation of Budget The Finance Ministry presented budget on February 1, The idea behind bringing forward the Budget date, according to the government, is so that ministries and state governments can begin disbursing funds from the beginning of the financial year. At the moment, with the Budget being presented at the end of February, several processes, including the vote on account, result in disbursement of funds to various States only by late May. Advancing the Budget date will allow funds to be released to States by April. Earlier, the budget used to be passed till end of May and funds used to assigned to States by August- September. Thus, use of funds was rushed in later half of the year. This practice used to affect economic growth. 3. Elimination of distinction between Plan and Non Plan expenditure Plan expenditure refers to the expenditure which is incurred as part of 5 year plan for development purposes. Non-plan expenditure refers to expenditure which is not part of 5 year plans and is incurred to meet revenue expenses of consumptive nature. For instance: salaries, subsidies, interest payments, etc. Distinction between plan and non-plan has been removed by Government because 1. Plan expenditure tends to get priority especially when expenditure reduction has to be done to meet fiscal deficit target. Non plan expenditure is reduced even if it is vital for economic development. For instance, Allocation of funds for maintenance of assets such as

8 hospitals, schools, and irrigation dams which have already created is also equally important. The funds used for creation of assets (such as hospitals) is treated as plan expenditure and the funds used for maintenance of assets (such as running hospitals) is treated as non-plan expenditure. 2. Outcome budgeting and performance budgeting is applicable only on plan expenditure. This means that estimation of outcome of expenditure incurred on running schools and hospitals etc is not within the purview of budgeting as it is a non-plan expenditure. Concept 66 - Anchor Banks Anchor Banks are public sector banks that will drive the consolidation process among the state owned banks. There are 22 public sector banks in the country. SBI merger From 1st April, 2017 State Bank of India (SBI), the country s largest lender, has merged with its associate banks State Bank of Mysore, State Bank of Travancore, State Bank of Bikaner and Jaipur, State Bank of Patiala, State Bank of Hyderabad and Bhartiya Mahila Bank. What is the history of merger? The merger of SBI with its associates began when SBI merged State Bank of Saurashtra with itself in In 2010, State Bank of Indore was also merged with the larger bank. What will be the benefits of merger? 1. The merged entity will have an asset base of about Rs.37 lakh crore, with nearly 24,000 branches and about 58,700 ATMs across the country as of March 2016-end. SBI and its associates employed 2.85 lakh people in While the network of SBI would stand to increase, its reach would multiply. Rationalisation of branches would be undertaken. 3. Currently, no Indian bank features in the top 50 banks of the world. With this merger, some visibility at global level is likely to increase. 4. Any introduction of new technology by SBI would simultaneously be available uniformly. The scale of operations and common cost would get rationalised. Concept 67 - Insolvency and Bankruptcy Code, 2015 Insolvency and Bankruptcy Code, 2015 is aimed at speedy winding up of companies, lower non-performing assets and redeployment of capital for productive uses..

9 Highlights of the bankruptcy code: Unified Bankruptcy Code: The government plans to repeal an ineffectual, century-old insolvency law and amend 11 laws currently dealing with defaulters. Once fully implemented, the code would seek to speed up debt recoveries and restructurings by setting a deadline of 180 days to decide the fate of a company that defaults. Application: The code will apply to companies, partnerships, limited liability partnerships, individuals and any other body specified by the government. Insolvency Resolution: For individuals the process could be initiated either by the debtor or the creditors. For companies, the resolution process will have to be completed within 180 days, with an extension of up to 90 days if 75 percent of creditors agree. The process will involve negotiations between the debtor and creditors to draft a resolution plan. If they agree, the plan could be submitted to the authority. If no agreement is reached, the company would automatically go into liquidation. The process will be managed by a licenced insolvency. Insolvency regulator: The insolvency regulator would have representatives from government and the central bank, and oversee and regulate insolvency agencies. Tribunals: The National Company Law Tribunal would under the code address grievances relating to insolvency, bankruptcy and liquidation of companies. Debt Recovery Tribunals would deal with individual cases. Their decisions could be challenged in appellate tribunals and before the Supreme Court. Penalties: A debtor could be jailed for up to five years for concealing property or defrauding creditors. Concept 68 - Bad Banks A bank set up to buy the bad loans of a bank with significant non-performing assets at market price. By transferring the bad assets of an institution to the bad bank, the banks clear their balance sheet of toxic assests. Bad banks are proposed to be set up. Bad banks is another term used for ARCs

10 Concept 69 - Basel III (Third Basel Accord) Basel III is a global, voluntary regulatory framework on bank capital adequacy and liquidity risk. It was agreed by Basel Committee on Banking Supervision (BCBS) in They are called the Basel Accords as the BCBS maintains its secretariat at the Bank for International Settlements in Basel, Switzerland. Basel III introduced tighter capital requirements in comparison to Basel I and Basel II, which were adopted by banking sector earlier. It focuses primarily of reducing risk on the bank of running out of funds, requiring differing levels of reserves for different forms of bank deposits and other borrowings. RBI has mandated that Indian banks are required to adopt Basel III norms up to March 31, 2019, (earlier this date was March 31, 2018). Note: Basel series of norms are broad supervisory standards to ensure that financial institutions have enough capital to meet obligations and absorb unexpected losses. Concept 70 - Payments bank Payment banks can accept deposits upto Rs. 1 lakh per customer, and are allowed to pay customers interest on the money that is being deposited. They can be used for either current accounts or savings accounts. For companies that have operated as mobile wallets (which are a type of Pre-Paid Instrument ( PPI)), this is a big step forward as it raises the funds limit, and allows interest to be paid on the deposits, making it more attractive for users to store their money. How is a payment bank different from a bank? Unlike a regular bank, a payment bank can't loan money to people, or issue credit cards. Also, the payment banks are only allowed to invest the money received from customers deposit into government securities. While the payment banks can't issue credit cards, they can issue ATM and debit cards. Since many of the 11 new license holders already operate mobile wallets, the ability to issue an ATM card makes it easier to convert virtual money into cash, and vice versa. How payments bank will ensure financial inclusion? As someone could now fill cash into a m-commerce bank account from any place in India and a relative in a small town who holds the debit card could withdraw cash from any ATM frictionlessly, or even in a more rural location, through any point of sale terminal with a business correspondent and theoretically even the small convenience shop in a village that

11 sells mobile recharges could be one of them. These small convenience shops will serve the purpose of bank branches. Payment banks can be integrated with your savings bank accounts. As already mentioned, the payment banks ATM or debit cards will also work on all banks' machines. However, payment banks can't accept NRI deposits. So which companies have been given approval? The RBI guidelines say that payment bank licenses would be granted to mobile firms, supermarket chains, and others, to cater to individuals and small businesses. These mobile firms, supermarket chanins, mobile wallets would help in extending reach of the payments bank across the country. Concept 71 - Wholesale banks The Reserve Bank of India (RBI) has proposed setting up wholesale and long-term finance (WLTF) banks to finance industrial and infrastructure projects with higher capital and nonreliance on savings deposits. The RBI paper has proposed a higher level of initial minimum paid-up equity capital, say Rs 1,000 crore or more, for these banks. Initial minimum capital For universal banks, the initial minimum paid-up equity capital for a bank is fixed at Rs 500 crore. In the case of differentiated banks such as payments banks (PBs) and small finance banks (SFBs), the initial minimum paid-up capital is Rs 100 crore. About wholesale banks According to the RBI, WLTF banks are not expected to have significant retail exposure. Primary sources of funds for WLTF banks could be a combination of term deposits, debt / equity capital raised from primary market issues or private placement, and term borrowings from banks and other financial institutions. Another major source of funds for WLTF banks will be issuance of bonds. WLTF banks are not expected to accept savings deposits. Current account and term deposits may be mobilized by these banks. There could be reasonable restrictions on premature withdrawal of these deposits. According to the Nachiket Mor Committee Report, since the primary role of the wholesale banks is lending and not the provision of retail deposit services, they may be permitted to accept deposits only above a large threshold amount. Concept 72 - Small finance banks Small finance bank can provide basic banking service of acceptance of deposits and lending. The aim behind these banks is to provide financial inclusion to sections of the economy not being served by other banks, such as small business units, small and marginal farmers, micro and small industries and unorganised sector entities. The banks will not be restricted

12 to any region. 75% of its net credits should be in priority sector lending and 50% of the loans in its portfolio must in 25 lakh range. As on 1 st May, 2017, Payments Banks, Wholesale Banks and Small finance banks are not yet operational in India. Study Relevant, Study Smart! PrepMate by shubhamsias.com