Current Affairs 6 May 2021 – IAS Current Affairs

Current Affairs 6 May 2021  focuses on Prelims-Mains perspective. Major events are :

1. India and UK on Global Innovation Partnership
2. Strategic Disinvestment of IDBI Bank
3. Maratha Reservation Law Struck Down
4. SVAMITVA Scheme New Framework
5. Model Insurance Villages
6. RBI Measures To Fight Covid Pandemic

India and UK on Global Innovation Partnership

Source : PIB
GS II : Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

Why in News?

Union Cabinet gives ex-post facto approval to the signing of Memorandum of Understanding between the Ministry Republic of India and United Kingdom on Global Innovation Partnership (GIP).

Key Facts

• India and UK agree to launch the Global Innovation Partnership.
• GIP will support Indian innovators to scale up their innovations in third countries thereby helping them explore new markets and become self sustainable.
• It will also foster the innovative ecosystem in India.
• GIP innovations will focus on Sustainable Development Goals (SDG) related sectors thereby assisting recipient countries achieve their SDGs.
• Through seed funding, grants, investments and technical assistance, the Partnership will support Indian entrepreneurs and innovators to test, scale up and take their innovative development solutions to select developing countries.
• The innovations selected under GIP would accelerate the achievement of Sustainable Development Goals
• It also benefit the base of the pyramid populations thus promoting equity and inclusivity in recipient countries.
• GIP will also develop an open and inclusive e-market place (E-BAAZAR) for cross border innovation transfer
• It will focus on results based impact assessment thereby promoting transparency and accountability.

Innovations in India

• Government has an initiative in place to encourage companies to manufacture their products there called Make In India
• Also India have National Innovation Foundation to support innovation, Start-up India.
• Technology is clearly the biggest area of transformation in India..
• Advantage for India to attract foreign investments in innovations 
  • Lower wages and an open
  • Democratic government
  • Rule of law
  • Intellectual property is much better counter part like China
• Some Flaws in India
  • In terms of world-class manufacturing, India still lags behind.
  • Physical infrastructure is not up to par particularly in the cities.

Strategic Disinvestment of IDBI Bank

Source : PIB
GS III : Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment

Why in News ?

Cabinet Committee on Economic Affairs has given its in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank Ltd.

• In the Budget for 2020-21 Union Finance Minister had announced the government’s balance shareholding in IDBI Bank would be sold to private, retail, and institutional investors through the stock exchange.
• In March IDBI Bank was removed from the RBI’s Prompt Corrective Action (PCA) framework after nearly four years, on improved financial performance.

What is Strategic Disinvestment ?

• Strategic disinvestment would imply the sale of substantial portion of the Government shareholding of a central public sector enterprise (CPSE) of upto 50% or such higher percentage as the competent authority may determine, along with transfer of management control.
• It is done so by the government in order to relieve itself the burden of maintaining a non-performing public enterprise.
• It aims with the concept Disinvestment would boost the economy through more revenue to the government, which could be invested in the economy further.
  • The inefficiency and losses incurred by PSUs over the last years disinvestment is a good step.
• Differ from Privatisation : Privatization is when the entity is completely handed over to a private company.

Key Facts

• Government of India (GoI) and LIC together own more than 94% of equity of IDBI Bank (GoI 45.48%, LIC 49.24%).
• LIC is currently the promoter of IDBI Bank with Management Control and GoI is the co-promoter.
• LIC’s Board has passed a resolution to the effect that LIC may reduce its shareholding in IDBI Bank Ltd.
• It is expected that strategic buyer will infuse funds, new technology and best management practices for optimal development of business potential and growth of IDBI Bank Ltd.
• Resources through strategic disinvestment of Govt. equity from the transaction would be used to finance developmental programmes of the Government benefiting the citizens.

Maratha Reservation Law Struck Down

Source : Indian Express
GS II : Structure, organisation and functioning of the Executive and the Judiciary Ministries and Departments of the Government; pressure groups and formal/informal associations and their role in the Polity

Why in News ?

Maratha Reservation Law Struck Down. The Supreme Court struck down the provisions of a Maharashtra law providing reservation to the Maratha community.

• This quota took the total quota in the state above the 50 per cent ceiling set by the court in its 1992 Indra Sawhney (Mandal) judgment.

Background

• Judgment came on petitions challenging the June 27, 2019 order of the Bombay High Court upholding the constitutional validity of the Maharashtra State Reservation.
• Its is for seats of admission in educational institutions in the State and for appointments in the public services and posts under the State for Socially and Educationally Backward Classes (SEBC) Act, 2018.

Key Facts

• The 50% rule is to fulfill the objective of equality as en-grafted in Article 14 of which Articles 15 and 16 are facets.
• To change the 50% limit is to have a society which is not founded on equality but based on caste rule.
• If the reservation goes above 50% limit it will be slippery slope the political pressure make it hardly to reduce the same.
• The findings of the Indra Sawhney judgment that reservation should not exceed 50 per cent unless extra ordinary circumstances for which extreme caution is to be exercised.
  • Opinion that the cap on percentage of reservation as has been laid down in Sawhney is with the object of striking a balance between the rights under Article 15(1) and 15(4) as well as Articles 16(1) and 16(4) which cannot be said to be arbitrary or unreasonable.”
• It rejected demands to revisit the verdict, or to refer it to a larger Bench for reconsideration.
• Other observations made by the Court
  • Providing reservation for advancement of any socially and educationally backward class in public services is not the only means and method for improving the welfare of backward class
  • The State ought to bring other measures including providing educational facilities to the members of backward class free of cost giving concession in fee, providing opportunities for skill development to enable the candidates from the backward class to be self-reliant.
• The Constitution (Eighty-first Amendment) Act, 2000 by which sub-clause (4B) was inserted in Article 16 makes it clear that ceiling of 50% has now received constitutional recognition.
• The SC also upheld the 102nd Constitution amendment, saying it does not violate the basic structure of the Constitution.

102nd Constitution amendment Act of 2018 inserted Articles 338B : Deals with the structure, duties and powers of the National Commission for Backward Classes(NCBC).
Article 342A which deals with power of the President to notify a particular caste as Socially and Educationally Backward(SEBC) and power of Parliament to change the list.

• Admissions to medical, engineering, and other streams which were completed after the HC decision, as well as appointments given to the members of the Maratha community in public services after the HC judgment until September 9, 2020 too are saved.

SVAMITVA Scheme New Framework

Source : PIB
GS II : Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections

Why in News ?

New framework for implementation of the SVAMITVA Scheme and Coffee Table Book (CTB) to mark the nationwide roll-out of the SVAMITVA Scheme.

Key Facts

• The SVAMITVA Framework developed by the Ministry of Panchayati Raj provides a detailed roadmap and guidelines for the various States 
• It includes the Scheme objectives, coverage, various components involved, year-wise funding pattern, survey approach and methodology, stakeholders involved and their roles and responsibility, monitoring and evaluation, and deliverable.
• Coffee Table Book on SVAMITVA Scheme
  • An effort to condense the vast efforts of various stakeholders involved in the implementation of the Scheme learning and best practices that have emerged during the course of various challenges and success stories and provide a way forward.
• Updated that property cards have been distributed in more than 7400 villages and more than 7,00,000 beneficiaries have been benefited from the Scheme across the country.

SVAMITVA Scheme

• SVAMITVA is a Central Sector Scheme of the Ministry of Panchayati Raj.
• The scheme aims to provide the record of rights to village household owners in rural areas and issue Property Cards.
• Under SVAMITVA the Union government aims to distribute 1.32 lakh property cards in 763 villages in six states namely Maharashtra, Uttar Pradesh, Haryana, Madhya Pradesh, Uttarakhand and Karnataka.
• As part of the pilot project of SVAMITVA, 101 villages in Maharashtra will be measured which includes 26 villages from Pune division, 25 in Nashik, 26 in Nagpur and 24 in Aurangabad division.

Implementation

• The Scheme is being implemented across the country in a phased manner over a period of four years (2020-2024) and would eventually cover around 6.62 lakh villages of the country.
• About 1 lakh villages in the States of Uttar Pradesh, Haryana, Maharashtra, Madhya Pradesh, Uttarakhand and Karnataka, and few border villages of Punjab & Rajasthan, along with establishment of Continuous Operating System (CORS) stations’ network across Punjab & Rajasthan, are being covered in the Pilot phase (2020-21).

How the scheme benefits ?

• The technology helps in increasing the accuracy of measurement and reducing the time required.
• Generally, measuring a village requires 15-30 days.
• After this, enquiries about ownership and preparation of the property documents and supplying them to the owner takes several months.
• On average, the entire process takes about a year.
• In the new process, the property documents and maps can be provided to the owner within a month.
• The scheme will pave the way for using property as a financial asset by villagers for taking loans and other financial benefits.
• The process relies on modern technology and will bring speed as well as transparency to the process of measurement of land in rural areas.

Model Insurance Villages

Source : Indian Express
GS III : Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment

Why in News?

As the Covid pandemic is increasing across the country the Insurance Regulatory and Development Authority of India(Irdai) has come out with the concept of model insurance villages

• It aims to cover the entire population in those areas, with the financial support of various institutions like Nabard and CSR funds.
• This was discussed in paper on Increasing General Insurance Penetration in rural areas with special focus on agriculture and allied activities’.

Key Facts

• Idea is to offer comprehensive insurance protection to all the major insurable risks that villagers are exposed to and make available covers at affordable or subsidised cost.
• The concept may be implemented in a minimum of 500 villages in different districts of the country in the first year and increased to 1,000 villages in the subsequent two years.
• The choice of villages is to be made carefully considering the various relevant aspects and parameters in order to implement the concept successfully for a period of three to five years.
• Also to make farmers and rural population aware of benefits of insurance.
• Special focused efforts need to be made to cover the entire population in the village and their property, farms/crops, farm machinery, vehicles, different village level services, manufacturing enterprises and other specific insurance needs of the particular village through targeted efforts in few selected villages.
• Such model villages are expected to tackle losses due to natural calamities like floods and earthquakes.
  • There’s no catastrophe insurance in the country now.
• The efforts in selected villages need to be continued for a minimum of 3 to 5 years so as to make insurance benefits visible to the community.
• In order to make the premium affordable financial support needs to be explored through Nabard, other institutions, CSR funds, government support and support from re-insurance companies.
  • Also to keep some of the covers available with very minimum or nominal premium cost.
  • This is to ensure that families and their property, crops get cover and the entire village community participate in the initiative.

RBI Measures To Fight Covid Pandemic

Source : PIB
GS II : Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment

Why in News?

The RBI Governor announced a series of measures to support the nation’s fight against the second wave of COVID-19 infections.

Key Facts

• Alleviating any constraint from the financing side for all stakeholders government, hospitals and dispensaries, pharmacies, vaccine/medicine manufacturers/importers, medical oxygen manufacturers/suppliers, private operators engaged in the critical healthcare supply chain, and above all the common man who may be facing sudden spike in health expenditure requires a comprehensive targeted policy response.
• Small businesses and financial entities at the grassroot level are bearing the biggest brunt of the second wave of infections.
• Term Liquidity Facility of Rs. 50,000 crore to Ease Access to Emergency Health Services
  • Term Liquidity Facility of Rs. 50,000 crore with tenure of up to 3 years at repo rate to ease access to emergency health services for ramping up COVID-related health infrastructure & services.
  • Banks can give fresh lending support to variety of stakeholders under this facility.
  • This lending facility will be available up to March 31, 2022.
  • Banks will be provided incentives to provide credit under this facility.
• Special Long Term Repo Operations for Small Finance Banks
  • In order to provide further support to micro, small and other unorganized sector entities.
  • 3-year repo operations of Rs. 10,000 crore at repo rate for fresh lending up to Rs 10 lakh per borrower.
  • Facility is available up to 31 October, 2021.
• Priority sector lending
  • Lending by Small Finance Banks (SFBs) to MFIs for on-lending to priority sector.
  • SFBs are now permitted to regard fresh on-lending to MFIs with asset size up to Rs. 500 crore
  • Consider this as priority sector lending.
  • This facility will be available up to 31 March, 2022.
• Credit flow to MSME Entrepreneurs
  • To further incentivize inclusion of unbanked MSMEs into banking system, exemption provided in February, 2021 wherein scheduled banks were allowed to deduct credit given to new MSME borrowers from Net Time & Demand Liabilities for calculation of CRR, is now extended to December 31, 2021.
• Stress Resolution Framework 2.0 
  • Provide for Individuals Small Businesses and MSMEs
  • Following set of measures have been announced to relieve stress faced by most vulnerable categories
    • Individuals, borrowers and MSMEs with aggregate exposure up to Rs. 25 crore who have not availed restructuring under any previous frameworks, who were classified as standard on 31 March, 2021, will be eligible to be considered under Resolution Framework 2.0.
    • Restructuring under new framework can be invoked till September 30, 2021 and will have to be implemented within 90 days after invocation.
    • Individuals and small businesses who have availed restructuring of loans under Resolution Framework 1.0, where moratorium of less than 2 years was permitted, lending institutions can now increase the period and/or extend residual tenure up to a total period of 2 years.
    • Small businesses and MSMEs restructured earlier, lending institutions are now permitted to review working capital sanction limits, as a one-time measure.
• Rationalization of KYC norms for enhanced customer experience
  • Steps being proposed include:
    • Extending scope to video KYC for new customer categories such as proprietorship firms
    • Conversion of limited KYC accounts to fully KYC compliant accounts
    • Introduction of more customer-friendly options in KYC updating
    • Enabling the use of KYC Identifier of Centralised KYC Registry (CKYCR) for V-CIP and submission of electronic documents as identify proof
• Floating Provisions and Countercyclical Provisioning Buffer
  • Banks can now use 100% of floating provisions held by them, as on December 31, 2020, for making specific provisions for NPAs
  • Such utilization is permitted up to March 31, 2022.
• Relaxation of overdraft facility for states
  • Maximum number of days of overdraft in a quarter for state governments has been increased from 36 to 50 days.
  • The number of consecutive days of OD has been increased from 14 to 21 days; facility available up to September 30, 2021.

Current Affairs 6 May 2021 and Daily Current Affairs : Click Here

Current Affairs 6 May 2021 video lecture will upload soon.