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Insights Daily Current Events, 29 April 2016
Paper 3 Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Peer-to-peer lending to come under RBI purview
The Reserve Bank of India (RBI) has released a consultation paper on peer-to-peer (P2P) lending and proposed to bring such platforms under its purview by defining them as non-banking finance companies (NBFCs).
What is P2P lending?
P2P lending is a form of crowdfunding; an online platform that matches lenders with borrowers in order to provide unsecured loans. The borrower can either be an individual or a business requiring a loan. A fee is paid to the platform by both the lender and the borrower.
- The central bank has proposed a minimum capital requirement of Rs 2 crore, and wants players not to offer any extraordinary returns.
- The borrower can either be an individual or a business requiring a loan. A fee is paid to the platform by both the lender and the borrower.
- The RBI has also stated that P2P lenders could act only as an intermediary, wherein none of the lending/borrowing gets reflected in their balance sheets.
- It has also been proposed to make it mandatory for transfer of funds to take place directly from the lender’s bank account to that of the borrower.
- The central bank also said confidentiality of customer data and data security would be the responsibility of the platform.
Why P2P regulation is necessary?
Although nascent in India and not significant in value yet, the potential benefits that P2P lending promises to various stakeholders and its associated risks to the financial system are too important to be ignored. Coming under the purview of the RBI will not only be a confidence booster for the sector, but also for individual lenders.
According to the data released by Peer to Peer Finance Association, the cumulative lending through P2P platforms globally, at the end of Q4 of 2015, had reached 4.4 billion pounds. In India, P2P lending platforms are largely technology companies registered under the Companies Act.
Sources: the hindu.
Paper 3 Topic: Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology and issues relating to intellectual property rights.
IRNSS Is Now Navic: India’s Navigation System Gets a Simpler Name
The seventh satellite to make up the Indian Regional Navigation Satellite System (IRNSS), called the IRNSS-1G, has been launched into space via the Polar Satellite Launch Vehicle (PSLV) C33 rocket from Sriharikota spaceport in southwestern India.
- This was the final step towards completing India’s own satellite navigation system. This has made the nation self-reliant in the field of space-based positioning.
PM Narendra Modi has christened the navigation system ‘Navic‘, which in Hindi means ‘sailor’ or ‘navigator’. The name is also supposed to be a contraction of the phrase ‘navigation with Indian constellation’.
Significance of this launch:
While GPS and Glonass are fully functional global systems, the Chinese and the Japanese systems offer regional coverage and Europe’s Galileo is yet to be operational. India will formally join the select group of nations owing such system once IRNSS is declared operational after checking the systems – space (satellites), ground (ground stations) and the user-end signal receivers.
What is it?
IRNSS is an independent regional navigation satellite system designed to provide position information in the Indian region and 1500 km around the Indian mainland. Simply put, the Indian Regional Navigation Satellite System (IRNSS) is similar to the GPS (global positioning system) of the US, Glonass of Russia and Galileo of Europe as well as China’s Beidou. It consists of a constellation of seven satellites.
What all services are provided?
IRNSS would provide two types of services, namely Standard Positioning Services available to all users and Restricted Services provided to authorised users.
Applications of IRNSS:
- Terrestrial, Aerial and Marine Navigation.
- Disaster Management.
- Vehicle tracking and fleet management.
- Integration with mobile phones.
- Precise Timing.
- Mapping and Geodetic data capture.
- Terrestrial navigation aid for hikers and travelers.
- Visual and voice navigation for drivers.
Sources: the hindu.
Paper 3 Topic: infrastructure- airways.
5/20 rule ‘anarchic’: Raju
Civil Aviation Minister Ashok Gajapathi Raju has termed the 5/20 rule, which regulates Indian carriers flying abroad as “anarchic”. He also said that he was trying to change it so that new airlines can connect with foreign destinations.
What is 5/20 rule?
According to the ‘5/20 rule,’ all airlines in India need five years of domestic flying experience and at least 20 aircrafts in its fleet in order to fly abroad. The rule has been a subject of heated debate between domestic airline operators. This was proposed in the new draft civil aviation policy.
- While the private airlines which are allowed to fly abroad — IndiGo, Jet Airways, SpiceJet — have all opposed the proposal to abolish the rule, new airlines Vistara and AirAsia India are in strong favour of relaxing the norm.
- However, the Civil Aviation Ministry is still undecided on whether to keep the 5/20 rule, abolish it or replace it with some other regulation in the civil aviation policy which is yet to go to the Union Cabinet.
Sources: the hindu.
Paper 2 Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Parliament Passes Bill For States’ Control Over Potable Alcohol Production
Parliament has passed the Industries (Development and Regulation) Amendment Bill, 2015. This bill seeks to transfer the control over industries producing potable alcohol from the central government to the state governments.
- The Industries (Development and Regulation) Amendment Bill, 2015 amends the 1951 act. It was already passed by the Lok Sabha in December last year.
- The amendment would bring potable alcohol under the jurisdiction of states, and clearly demarcates what is within the powers of the centre and what is within the powers of states.
- The 1951 act provides for development and regulation of certain industries including fermentation (which includes production of alcohol), and its first schedule includes all industries that are regulated under the act. The bill amends the schedule to exclude production of alcohol for potable purposes from the ambit of the act.
The Supreme Court in its judgement on January 20, 1997, had demarcated the regulation of production of alcohol between the central and state governments in the case of Bihar Distillery and another vs. Union of India and others.
The court ruled that central government should regulate the production of alcohol for industrial use and states should regulate the production of alcohol for potable purpose (domestic consumption). The bill conforms to the Supreme Court’s decision.
Paper 2 Topic: Important International institutions, agencies and fora, their structure, mandate.
UN Chief Appoints Indian Academician To University Council
Indian academician, Radha Kumar, is among 12 people appointed by UN Secretary-General Ban Ki-moon to the global body’s University Council to formulate its principles and policies, consider and approve biennial budget and work programme.
- The 12 appointees, who will take office next month, will serve for terms of either three or six years.
About the UN University Council:
The main functions of the UN University Council are to formulate the principles and policies of the University, govern its operations, and consider and approve its biennial budget and work programme.
- Appointed members of the Council serve in their individual capacity and not as representatives of their country’s government.
- They are selected with the aim of achieving a geographic and gender balance, with due regard for major academic, scientific, educational and cultural trends, as well as each member’s fields of expertise.
Facts for Prelims:
- Rahuri Municipal Council of Ahmednagar district in Maharashtra has become the first Municipal Council to attain the status of integrated with digital locker for the issuance of all essential Documents. This service was recently launched as part of Digital India Programme.
- Based on a proposal from the National Monuments Authority (NMA), the Indian Space Research Organisation (ISRO) has developed an app named “Smarac Citizen”. The app is aimed at granting construction permits within few minutes to architects and real estate developers who plan to construct buildings close to national monuments. The app contains the maps of 3,686 Centrally-protected monuments across the country. Apart from easing the process of obtaining construction permits, the app will help the NMA keep a tab on encroachments around monuments. The app will also give the elevation details— the height of the site with respect to mean sea level. It will help architects not only for the NMA approval, but also for the approval of the Airports Authority of India.
- Japan has decided to abandon a quarter-of-a-billion-dollar satellite it sent to study black holes. The ultra-high-tech “Hitomi” – or eye – was launched in February to find X-rays emanating from black holes and galaxy clusters. But shortly after it reached orbit, researchers admitted they had lost control of it and said it was no longer communicating. The satellite, developed in collaboration with NASA and other groups, was intended to help unlock the mystery of black holes, phenomena that have never been directly observed.