Insights Daily Current Events, 14 March 2016
Paper 3 Topic: resource mobilization, economic growth.
SEBI bans wilful defaulters from tapping capital market
In an attempt to tighten the regulatory framework, the Securities and Exchange Board of India (SEBI) has barred ‘wilful defaulters’ from accessing the capital market or acquiring another listed entity.
- SEBI has decided that if a listed entity or its promoter has been declared a wilful defaulter, it will not be allowed to make a public issue of equity shares, debt or any other convertible securities.
- This decision is based on Reserve Bank of India (RBI) regulations which lay down safeguards to be exercised by banks to contain the financial activities of a wilful defaulter.
Who is a willful defaulter?
The RBI defines a wilful defaulter as “an entity that defaults on its payment obligations even if it has the capacity to pay back debts.”
The SEBI’s move has come at a time when banks have moved the Supreme Court against industrialist Vijay Mallya, who has been declared a wilful defaulter.
Sources: the hindu.
Paper 3 Topic: infrastructure airways.
Air passengers to get higher compensation for delays, baggage loss
The ‘Carriage by Air (Amendment) Bill, 2015‘, has been passed by the parliament. It was cleared by the Lok Sabha in December 2015 and Rajya Sabha recently.
- Once this bill gets the nod of the president and becomes an act, the law would require Indian carriers to pay compensation amount that is equivalent to the rates paid by their global counterparts.
- This bill would enhance compensation for air travellers in case of death, injury, lost baggage or even inordinate delay in flights.
- The legislation would allow the government to revise the liability limits of airlines in line with the Montreal Convention, which was acceded to by India in May 2009.
The Bill amends the Carriage by Air Act, 1972. The Act regulates carriage by air and gives effect to the Warsaw Convention, 1929, the Warsaw Convention as amended by the Hague Protocol, 1955, and the Montreal Convention, 1999.
- The Act also provides for application of the international rules to domestic travel, subject to exceptions and adaptations.
- The compensation in case of death in an air accident or injury will go up to around Rs. 1.05 crore, up from the present Rs. 93 lakh. This amount will be computed on the basis of SDR (Special Drawing Rights). The currency value of the SDR is based on market exchange rates of a basket of major currencies – U.S. dollar, euro, Japanese yen and pound sterling. One SDR is equivalent to Rs. 93.
- The liability for flight delays will increase to Rs. 4.36 lakh from Rs. 3.86 lakh. In case of destruction, loss or inordinate delays in case of cargo carriage, the liability amount has been raised from Rs. 1,581 to Rs. 1,767.
- For destruction, loss, damage or delay of baggage, the domestic airlines will have to pay Rs. 1.05 lakh from the present Rs. 93,000.
The Montreal Convention establishes airline liability in the case of death, injury or delay to passengers or in cases of delay, damage or loss of baggage and cargo. The Convention also provides for reviewing the limits of liability of the air carriers every five years. India acceded to the Montreal Convention in May 2009.
Sources: the hindu.
Paper 3 Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
India’s trade likely to be muted for some time, says RBI Governor Rajan
In a bid to allay fears about India’s weak exchange rate, Reserve Bank of India Governor Raghuram Rajan recently said that India’s exchange rate is broadly in the right place and the country’s trade is likely to be muted for some time.
- He said this while delivering the First Ramnath Goenka Memorial Lecture organised by the Indian Express recently.
What else the governor said?
He indicated that Indian trade is likely to be muted for some time. But India is not alone in this. Even, the global trade is weak.
He also noted several other reasons, apart from the exchange rate and the weak global economy, that could be leading to the decline in global trade-
- First, as countries get more developed, they begin to consume services more, which are not generally traded.
- The second reason was that the trade in capital goods has seen a decline.
- Third reason was that countries are increasingly pulling inwards. That is, their supply chains are increasingly being geared towards their own needs rather than the needs of other countries.
Sources: the hindu.
Paper 2 Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
India collaborates with Japan on Andamans project
The governments of India and Japan are in talks to collaborate in future about upgrading civilian infrastructure in the strategically located Andaman and Nicobar Islands.
- The first project being discussed is a modest one — a 15-megawatt diesel power plant on South Andaman Island. However, the development signals a policy shift on the part of the Indian government, which has so far not allowed any foreign investments in the Andaman and Nicobar Islands.
- The project is also testimony to the unfolding relationship between India and Japan, which is also funding a $744 million road building project in the northeastern Indian border regions of Mizoram, Assam and Meghalaya.
Importance of these islands:
- The Indian archipelago is seen as a critical asset to check the Chinese from expanding into the Indian Ocean.
- The islands in the Andaman islands have regularly been visited by submarines belonging to the People’s Republic of China, which caused India to step up its surveillance in the region.
- The Andaman and Nicobar Islands are northwest of the Strait of Malacca, offering control of a so-called choke point that is one of China’s greatest marine vulnerabilities.
Partnership between India and Japan has matured over the years. Japan has become a considerable source of foreign investment for major infrastructure initiatives in India. Notably, Tokyo is partly underwriting the Delhi-Mumbai Industrial Corridor, which is among the largest infrastructure projects in the world. Moreover, India continues to be a major recipient of Japanese official development assistance (ODA) loans. Since 2010, Japanese ODA loan aid to India has been increasing every year.
Sources: the hindu.
Paper 2 Topic: India and neighbors.
India-Bangladesh drill in Sundarbans
A three day long joint exercise, the first of its kind, between Border Guard Bangladesh (BGB) and Border Security Force (BSF) of India is underway in the Sundarbans border area.
- The exercise is titled ‘Sundarban Moitry’ (Sundarbans Alliance). This is the first time such an exercise is taking place between the two border forces.
The exercise aimed at four aspects – to asses the problems at the risky areas of the Sunderbans, increasing patrolling in the area by both parties, raiding suspicious cargo and trawlers on the Bangladesh-India sea transportation route jointly and be aware of the forest camps of the partner country.
Significance of these exercises:
- The exercise is held with the aim of finding better border managerial mechanisms for the two countries.
- Such exercises would help the forces understand each other properly and maintain a healthy relation at the border. These joint activities, especially in the Sundarbans area would contribute to the prevention of cross-border crimes and expand border security activities more effectively.
- The decision to hold the exercise in Sunderbans is also crucial as the riverine terrain poses a challenge for patrolling the borders. There are three floating border outposts deployed by the BSF in the Sunderbans, to maintain a vigil in the channel of rivers Kalindi, Ichhamati, Raimangal and Hariabhanga.
Sources: the hindu.
Facts for Prelims from “The Hindu”:
- An ancient Lord Shiva temple has been discovered in Gaur village on the banks of Bori stream, a tributary of the Bhima in Kalaburagi district in Karnataka.
- Two stolen Indian statues that are more than 1,000 years old dating back to as early as the 8th Century were recently seized in the U.S. The artefacts made from sandstone were recovered from the auction house following an international investigation with assistance from the Indian government and the Interpol. The artefacts are a buff sandstone statue of Rishabhanata, believed to be from Rajasthan or Madhya Pradesh belonging to the 10th Century A.D. It depicts the first Jain Tirthankara. The second artefact is a buff sandstone panel depicting Revanta, a rare representation of an equestrian deity and dates back to the 8th Century A.D.
- The President of India, Shri Pranab Mukherjee recently inaugurated the Sesquicentennial Celebrations of the High Court of Judicature at Allahabad. Established on March 17, 1866, the High Court will turn 150 years on March 17, 2016.