Insights Daily Current Events, 11 March 2016
Paper 3 Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
Real Estate Bill
Rajya Sabha recently passed the Real Estate (Regulation and Development) Bill, 2016.
Aim of the Bill:
It is aimed at protecting home buyers from real estate developers who fail to deliver on time, and regulating India’s murky real estate sector.
Background:
The first draft was rejected last year by the Rajya Sabha, with Opposition leaders saying it favoured developers and did not serve the interests of consumers. The new bill includes as many as 20 amendments or changes, based on the feedback of a parliamentary committee.
Salient features of the bill:
- The Bill ensures the timely completion and delivery of flats to the consumer by ensuring that strict regulations will be imposed on developers to ensure timely construction and delivery. It further provides that consumers are entitled to a full refund with interest, if there has been a long delay in the delivery of a flat.
- The Bill has put in place a robust mechanism for the publication of accurate project details and disclosures. The Bill mandates that developers need to share final project plans as part of their disclosure terms, with no room for iterations. The Bill also imposes a 10% project cost penalty and upto 3 years in jail. These add a much needed degree of accountability and also protect consumers from this highly prevalent malpractice.
- The developers need to deposit 70% of the collections from buyers in separate accounts towards the cost of construction including that of land as against a minimum of 50% suggested by the Select Committee.
- Norms for registration of projects has been brought down to plot area of 500 sq.mts or 8 apartments as against 4,000 sq.mts proposed in the draft Bill in 2013 and 1,000 sq.mts or 12 apartments suggested by the Standing Committee.
- Bill ensures that all clearances are completed before the launch of a project. Sections of the Bill mandate that developers have to receive all clearances before issuing their properties for sale. Most builders offer flats at huge discounts at the pre-launch stage to attract buyers – but without informing consumers about the status of clearances and potential delays in delivery.
- Bill mandates that developers are bound to provide after sales service for properties found to have structural defects, at no extra cost to the consumer. Under the Bill, buyers are simply required to inform the developers of the deficiency within one year of purchase.
- Liability of developers for structural defects has been increased from 2 to 5 years and they can’t change plans without the consent of two thirds of allottees.
- Commercial real estate also brought under the ambit of the Bill and projects under construction are also required to be registered with the Regulatory Authority.
- Carpet area has been clearly defined which forms the basis for purchase of houses, eliminating any scope for any malpractices in transactions.
- Ending the earlier asymmetry which was in favour of developers, both consumers and developers will now have to pay same interest rate for any delays on their part.
- The Bill provides for arranging Insurance of Land title, currently not available in the market which benefits both the consumers and developers if land titles are later found to be defective.
- Specific and reduced time frames have been prescribed for disposal of complaints by the Appellate Tribunals and Regulatory Authorities.
It should be noted here that real estate contributes 9% to the national GDP and the Bill’s passage was seen as crucial to ensuring better regulatory oversight and orderly growth in the industry.
Sources: the hindu.
Paper 3 Topic: Major crops cropping patterns in various parts of the country, different types of irrigation and irrigation systems storage, transport and marketing of agricultural produce and issues and related constraints; e-technology in the aid of farmers.
Government mulls fresh study on post-harvest loss of farm produce
The Centre is mulling a fresh study on the percentage of post-harvest losses of farm products following contradictory findings.
Why fresh study is necessary?
A re-look is needed because while some data available with the government shows the percentage of post-harvest losses of perishables such as fruits and vegetables being as high as 30%, studies commissioned by government have put it at as low as 5%.
- The fresh study is also aimed at countering the allegation of critics that ‘inflated’ farm products wastage data was being shown to justify the move to permit FDI in marketing of food products. The government in the latest budget proposed 100% FDI in marketing of food products.
Background:
A March 2015 report of the Indian Council of Agricultural Research (ICAR)—Central Institute of Post-Harvest Engineering and Technology (CIPHET)— showed that the cumulative percentage of post-harvest losses of cereals was low in the range of 4.65–5.99% while that of pulses was between 6.36–8.41% and oil seeds 3.08–9.96%.
- As per the report, the maximum losses were in fruits and vegetables (4.58–15.88%) and fisheries—marine (10.52%). Percentage of post-harvest losses was low in milk (0.92%), fisheries-inland (5.23%), meat (2.71%) and poultry (6.74%).
- The ICAR-CIPHET study was commissioned by the government.
- However, an earlier paper put out by the Department of Industrial Policy and Promotion (or DIPP which formulates the FDI policy) had quoted data from agriculture ministry to say that 25-30% of fruits and vegetables and 5-7% of food grains in India are wasted.
- It said post-harvest losses of farm produce, especially of fruits, vegetables and other perishables, have been estimated to be over Rs. one trillion per annum, 57% of which is avoidable wastage and the balance due to avoidable costs of storage and commission.
- Besides, the DIPP has objected to studies showing very low wastage saying these findings were far removed from the ground reality.
- According to the DIPP, inadequate cold storage facilities results in huge losses to farmers in terms of wastage of produce, particularly that of fruits and vegetables.
Sources: the hindu.
Paper 3 Topic: Indian Economy and issues relating to mobilization of resources.
Govt clears proposal to amend MMDR Act
The Union Cabinet has given its approval for the amendment to the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act, 1957).
Implications:
- The amendment will allow transfer of captive mining leases not granted through auction. Transfer of captive mining leases, granted otherwise than through auction, would allow mergers and acquisitions of companies.
- This will facilitate ease of doing business for companies to improve profitability and decrease costs of the companies’ dependent on supply of mineral ore from captive leases.
- The transfer provisions will also facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged.
- The amendment will benefit lessees desirous of transferring the captive leases not granted through auction.
- It will also benefit banks and financial institutions. It does not entail any recurring or non-recurring expenditure on the Government.
Background:
The MMDR Act, 1957, as amended through the MMDR Amendment Act, 2015, restricted the scope of transferability of concessions granted through auction. It was restricting the mergers and acquisitions of companies and was impeding the ease of doing business for companies dependent on supply of mineral ore from captive leases. The provision was coming in the way of banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged.
Sources: pib.
Paper 2 Topic: Welfare schemes for vulnerable sections of the population by the Centre and States.
Pradhan Mantri Ujjwala Yojana
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved Pradhan Mantri Ujjwala Yojana.
Aim of the scheme:
It aims at Providing Free LPG connections to Women from BPL Households.
Who is implementing it?
The scheme is being implemented by the Ministry of Petroleum and Natural Gas. This is the first time in the history of the country that the Ministry of Petroleum and Natural Gas would implement a welfare scheme benefitting crores of women belonging to the poorest households.
Details:
- Under the scheme, Rs 8000 crore has been earmarked for providing five crore LPG connections to BPL households. This Scheme would be implemented over three years, namely, the FY 2016-17, 2017-18 and 2018-19.
- The Scheme provides a financial support of Rs 1600 for each LPG connection to the BPL households.
- The identification of eligible BPL families will be made in consultation with the State Governments and the Union Territories.
Significance of this scheme:
Various surveys have indicated that the poor in the country have limited access to cooking gas (LPG). The spread of LPG cylinders has been predominantly in the urban and semi-urban areas with the coverage mostly in middle class and affluent households. But there are serious health hazards associated with cooking based on fossil fuels.
- According to WHO estimates, about 5 lakh deaths in India alone due to unclean cooking fuels. Most of these premature deaths were due to non-communicable diseases such as heart disease, stroke, chronic obstructive pulmonary disease and lung cancer. Indoor air pollution is also responsible for a significant number of acute respiratory illnesses in young children. According to experts, having an open fire in the kitchen is like burning 400 cigarettes an hour.
- Hence, providing LPG connections to BPL households will ensure universal coverage of cooking gas in the country. This measure will empower women and protect their health. It will reduce drudgery and the time spent on cooking. It will also provide employment for rural youth in the supply chain of cooking gas.
Sources: the hindu.
Paper 3 Topic: infrastructure-energy.
Hydrocarbon Exploration and Licensing Policy (HELP)
Having recognized the need for concerted policy measures to stimulate domestic production of oil and gas, the Government has enunciated a new policy regime for exploration licensing, the Hydrocarbon Exploration and Licensing Policy (HELP).
- The decision will enhance domestic oil and gas production, bring substantial investment in the sector and generate sizable employment. The policy also targets the enhancement of transparency and reduction of administrative discretion.
Four main facets of this policy are:
- Uniform license for exploration and production of all forms of hydrocarbon.
- An open acreage policy.
- Easy to administer revenue sharing model.
- Marketing and pricing freedom for the crude oil and natural gas produced.
Key features of the Policy:
- There will be a uniform licensing system which will cover all hydrocarbons, i.e. oil, gas, coal bed methane etc. under a single license and policy framework.
- Contracts will be based on “biddable revenue sharing”. Bidders will be required to quote revenue share in their bids and this will be a key parameter for selecting the winning bid. They will quote a different share at two levels of revenue called “lower revenue point” and “higher revenue point”. Revenue share for intermediate points will be calculated by linear interpolation. The bidder giving the highest net present value of revenue share to the Government, as per transparent methodology, will get the maximum marks under this parameter.
- An Open Acreage Licensing Policy will be implemented whereby a bidder may apply to the Government seeking exploration of any block not already covered by exploration. The Government will examine the Expression of Interest and justification. If it is suitable for award, Govt. will call for competitive bids after obtaining necessary environmental and other clearances. This will enable a faster coverage of the available geographical area.
- A concessional royalty regime will be implemented for deep water and ultra-deep water areas. These areas shall not have any royalty for the first seven years, and thereafter shall have a concessional royalty of 5% (in deep water areas) and 2% (in ultra-deep water areas). In shallow water areas, the royalty rates shall be reduced from 10% to 7.5%.
- The contractor will have freedom for pricing and marketing of gas produced in the domestic market on arms length basis. To safeguard the Government revenue, the Government’s share of profit will be calculated based on the higher of prevailing international crude price or actual price.
Significance of the new policy:
The new policy regime marks a generational shift and modernization of the oil and gas exploration policy. It is expected to stimulate new exploration activity for oil, gas and other hydrocarbons and eventually reduce import dependence.
- It is also expected to create substantial new job opportunities in the petroleum sector. The introduction of the concept of revenue sharing is a major step in the direction of “minimum government maximum governance”, as it will not be necessary for the Government to verify the costs incurred by the contractor.
- Marketing and pricing freedom will further simplify the process. These will remove the discretion in the hands of the Government, reduce disputes, avoid opportunities for corruption, reduce administrative delays and thus stimulate growth.
Sources: the hindu.
Paper 3 Topic: Science and Technology- developments and their applications and effects in everyday.
Finally, a bacterium that degrades polluting plastics identified
A bacterium species capable of breaking down plastic — polyethylene terephthalate (PET) — has been identified by a team of Japanese researchers.
How it works?
The bacterium uses two enzymes in sequence to break down the highly biodegradation-resistant polymer PET.
- First, the bacterium adheres to PET and produces an intermediate substance through hydrolysis.
- The second enzyme then works with water and acts on this intermediate substance to produce the two monomers — ethylene glycol and terephthalic acid — used for making PET through polymerisation.
However, the researchers are still not sure about the evolution of this bacterium. Also, is not clear what natural processes were at play for the two unique enzymes capable of breaking down PET in sequential steps to evolve.
Significance of these findings:
Plastic — polyethylene terephthalate (PET)- has been littering the environment for the last 70 years and, in 2013, 56 million tonnes of PET were produced worldwide. This development would help protect the environment.
Sources: the hindu.
Paper 1 Topic: empowerment.
NITI Aayog launches ‘Women Transforming India’ campaign
Celebrating women doers, leaders and change makers from across the country, NITI Aayog-Government of India’s premier think-tank – has launched the ‘Women Transforming India‘ initiative on International Women’s Day, in partnership with the UN in India and MyGov.
- With this, NITI Aayog seeks to engage directly with women leaders from across urban and rural areas of India.
- Through the initiative, NITI Aayog is seeking for entries in the form of written essays/stories. These stories should reflect new ground broken by women in empowering themselves/others, or of challenging stereotypes.
- Winning entries will receive a certificate of appreciation from NITI Aayog and the UN in India. Winners may also have a chance to interact directly with policy makers in the Government of India, to enable affect positive policy action.
- This initiative is also a step forward in furthering the Sustainable Development Goals (SDGs), which have Gender as a stand-alone goal. NITI Aayog has been entrusted with the responsibility to plan, monitor and coordinate SDG efforts across Central Ministries and State governments.
Sources: pib.
Paper 2 Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Memorandum of Understanding (MoU) between India and United Arab Emirates (UAE)
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its ex-post approval for the Memorandum of Understanding (MoU) between India and United Arab Emirates (UAE) on Technical Cooperation in Cyber Space and Combating Cyber-Crime signed last month.
Details:
- This agreement would provide help in handling of the issues related to the cyber-crime between the two countries.
- As per the MoU, both the countries shall cooperate in cyber space and combating cyber-crime in all forms, particularly through coordination and exchange of information in relation with cyber crime, cooperation and training in cyber-crime investigation, etc. between India and UAE.
- The Ministry of Home affairs will be the nodal agency on the Indian side responsible for the implementation of this agreement.
The enhancement of technical cooperation between India and UAE in cyber space and combating cyber-crime comes in the wake of the serious threat of cyber-crime on the security, interest and safety of the people.
Sources: pib.
Paper 2 Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Memorandum of Understanding between India and IMF
The Union Cabinet has given its approval for entering into the Memorandum of Understanding (MoU) between India and International Monetary Fund (IMF) for setting up of South Asia Regional Training and Technical Assistance Center (SARTTAC) in India by the IMF.
- The cabinet has also authorised the Finance Minister to approve related decisions in respect of India’s contribution for setting up of the centre, including Letter of Understanding for financial contribution by India, site of the SARTTAC, representative of India on the Steering Committee on SARTTAC, etc.
About SARTTAC:
The SARTTAC will be a collaborative venture between the IMF, the member countries that is Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka and development partners for supporting the capacity development needs of the members.
- Additional member countries could join SARTTAC at a later stage.
- SARTTAC will also selectively cater to the capacity building needs at the State level, especially in India.
- Also, capacity development will ensure innovative solutions to financial, fiscal and monetary issues with the use of information technology (IT) and innovative techniques.
IMF has said that it will undertake the best practices from the South Asian region and across the globe to establish the centre.
Sources: pib.
Pape 2 Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Signing and Ratification of the BIMSTEC Convention on Mutual Legal Assistance in Criminal Matters
The Union Cabinet has given its approval for signing and ratification of the Bay of Bengal Initiative on Multi Sectoral Technical and Economic Cooperation (BIMSTEC) Convention on Mutual Legal Assistance in Criminal Matters.
- The Ministry of Home Affairs has been designated as the Central Authority under Article 15 of the Convention.
Details:
- The Convention aims to extend widest measures of assistance to each other through mutual cooperation for enhancing capability and effectiveness of the Member States in investigation and prosecution of crimes, including crimes related to terrorism, transnational organized crime, drug trafficking, money laundering and cyber-crimes.
- This will also promote the establishment of regional arrangements for mutual assistance in criminal matters which will greatly contribute to more effective cooperation in the control of criminal activities.
About BIMSTEC:
The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is an international organization involving a group of countries in South Asia and South East Asia.
- The BIMSTEC comprises of seven countries, Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand.
- The main objective of BIMSTEC is technological and economical cooperation among South Asian and South East Asian countries along the coast of the Bay of Bengal.
- The headquarters of BIMSTEC is in Dhaka.
Sources: pib.
Facts for Prelims from “The Hindu”:
- Kerala has raised concerns over Tamil Nadu’s move to construct a check-dam across the Palar river located in the Parambikulam-Aliyar Project (PAP) basin. According to Kerala, the proposed check-dam would violate the inter-State water sharing accord between the two States over the PAP basin. As per the PAP accord, consent of both the States is mandatory for any construction activity in the basin.
- The Union Cabinet has given its approval for a Memorandum of Understanding (MoU) between India and Bahrain on cooperation for prevention of human trafficking especially trafficking in women and children; rescue, recovery, repatriation and re-integration of victims of trafficking.
