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Insights Daily Current Affairs, 14 April 2017

Insights Daily Current Affairs, 14 April 2017


Paper 2 Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.


Pradhan Mantri Mudra Yojana (PMMY)


Loans extended under the Pradhan Mantri Mudra Yojana (PMMY) during 2016-17 have crossed the target of Rs. 1,80,000 crore for 2016-17.


Key facts:

  • Sanctions currently stand at Rs. 1,80,087 crore with final data still awaited from some of the smaller non-banking lenders.
  • Of this amount, Rs. 1,23,000 crore was lent by banks while non-banking institutions lent about Rs. 57,000 crore.
  • Data compiled so far indicates that the number of borrowers this year were over 4 crore, of which over 70% were women borrowers.
  • About 20% of the borrowers were from the Scheduled Caste Category, 5% from the Scheduled Tribe Category, while Other Backward Classes accounted for almost 35% of the borrowers.


About the Pradhan Mantri MUDRA Yojana (PMMY) scheme:

The PMMY Scheme was launched in April, 2015. The scheme’s objective is to refinance collateral-free loans given by the lenders to small borrowers.

  • The scheme, which has a corpus of Rs 20,000 crore, can lend betweenRs 50,000 and Rs 10 lakh to small entrepreneurs.
  • Banks and MFIs can draw refinance under the MUDRA Scheme after becoming member-lending institutions of MUDRA.
  • Mudra Loans are available for non-agricultural activities upto Rs. 10 lakh and activities allied to agriculture such as Dairy, Poultry, Bee Keeping etc, are also covered.
  • Mudra’s unique features include a Mudra Card which permits access to Working Capital through ATMs and Card Machines.


There are three types of loans under PMMY:

  • Shishu (up to Rs.50,000).
  • Kishore (from Rs.50,001 to Rs.5 lakh).
  • Tarun (from Rs.500,001 to Rs.10,00,000).


Sources: pib.


Paper 2 Topic: Statutory, regulatory and various quasi-judicial bodies.


National Lok Adalat settles over 6 lakh cases in one day


The Second National Lok Adalat for 2017, conducted on April 8, through out the country from taluk level courts to High Courts, has settled nearly 6.6 lakh cases.

  • Out of this, 3.68 lakh cases have been reduced from court pendency and about 2.92 lakh cases were settled even before they could be filed in courts.
  • The cases ranged from matrimonial disputes, partition suits, civil matters, cheque bounce cases, motor accident claims, revenue disputes pending in courts, criminal compoundable cases and service matters pertaining to pension, retrial benefits, etc.

What is Lok Adalat?

NALSA along with other Legal Services Institutions conducts Lok Adalats. Lok Adalat is one of the alternative dispute redressal mechanisms, it is a forum where disputes/cases pending in the court of law or at pre-litigation stage are settled/ compromised amicably.


How they operate?

Lok Adalat is a non-adversarial system, whereby mock courts (called Lok Adalats) are held by the State Authority, District Authority, Supreme Court Legal Services Committee, High Court Legal Services Committee, or Taluk Legal Services Committee.

  • They are held periodically for exercising such jurisdiction as they determine.
  • These are usually presided over by retired judges, social activists, or other members of the legal profession.
  • The Lok Adalat shall not decide the matter so referred at its own instance, instead the same would be decided on the basis of the compromise or settlement between the parties.
  • The members shall assist the parties in an independent and impartial manner in their attempt to reach amicable settlement of their dispute.


Their Ambit:

The Lok Adalats can deal with all Civil Cases, Matrimonial Disputes, Land Disputes, Partition/Property Disputes, Labour Disputes etc., and compoundable criminal Cases.


Key facts:

  • Lok Adalats have been given statutory status under the Legal Services Authorities Act, 1987.
  • Under the said Act, the award (decision) made by the Lok Adalats is deemed to be a decree of a civil court and is final and binding on all parties and no appeal against such an award lies before any court of law.
  • If the parties are not satisfied with the award of the Lok Adalat though there is no provision for an appeal against such an award, but they are free to initiate litigation by approaching the court of appropriate jurisdiction by filing a case by following the required procedure, in exercise of their right to litigate.
  • There is no court fee payable when a matter is filed in a Lok Adalat. If a matter pending in the court of law is referred to the Lok Adalat and is settled subsequently, the court fee originally paid in the court on the complaints/petition is also refunded back to the parties.
  • The persons deciding the cases in the Lok Adalats are called the Members of the Lok Adalats, they have the role of statutory conciliators only and do not have any judicial role; therefore they can only persuade the parties to come to a conclusion for settling the dispute outside the court in the Lok Adalat and shall not pressurize or coerce any of the parties to compromise or settle cases or matters either directly or indirectly.
  • The disputing parties plead their case themselves in Lok Adalats. No advocate or pleader is allowed, even witnesses are not examined.


Sources: the hindu.


Paper 3 Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.


RBI tightens norms on bank performance


The Reserve Bank of India (RBI) has come out with a revised prompt corrective action (PCA) framework for banks, spelling out certain thresholds, the breach of which could invite resolutions such as a merger with another bank or even shutting down of the bank.

  • The revised norms have set out three thresholds. The thresholds are based on capital, net non-performing assets, profitability and leverage ratio.

rbi's rpa

What happens when there is breach of any threshold?

  • The breach of the first threshold will invite restriction on dividend distribution or require parents of foreign banks to bring in more capital. This will get triggered if capital adequacy ratio (including capital conservation buffer) falls below 10.25% or common equity tier-I (CET1) capital ratio falls below 6.75%. Breach of either CAR or CET1 would trigger corrective action. The trigger for net NPA is 6% and 4% for leverage ratio. Two consecutive years of negative return on assets (RoA) will also be classified in threshold one.
  • The breach of the second threshold will occur when the capital adequacy ratio falls below 7.75% or CET1 goes below 5.125%. The net NPA threshold is breach of 12% and leverage ratio below 3.5%. Three consecutive years of negative ROA will also trigger threshold two. Breach of threshold two will result in restrictions on expansion of branches and higher provisions.
  • The breach of the last threshold happens when CET1 falls below 3.625% and net NPA goes above 12%. Negative ROA for four consecutive years will also be considered as a breach of the third threshold vis-a-vis the profitability parameter. Restrictions, in addition to that of threshold one and two, will be put on management compensation and directors’ fees if the third level is breached.
  • Corrective action that can also be imposed on banks includes special audit, restructuring operations and activation of recovery plan.
  • The banks can also be asked to bring in new management, or even can supersede the bank’s board, as a part of corrective action.


Way ahead:

The provisions of the revised PCA framework will be effective from April 1, 2017 based on the financials of the banks for the year ended March 31, 2017. The framework would be reviewed after three years.


Sources: the hindu.


Paper 3 Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.


Allow anchor investors in SME IPOs


Investment bankers have asked the Securities and Exchange Board of India (SEBI) to allow anchor investors in public issues of small and medium enterprises (SMEs) while also enhancing the upper limit for paid-up capital of such companies to allow relatively larger firms to enter the capital market while ensuring institutional investor participation in the dedicated segment.

anchor investor


With SME segment growing leaps and bounds, the SME segment is being approached by many institutions who are keen to participate as ‘anchors’ in SME IPOs. However, the existing regulatory framework does not permit it.


Who are Anchor investors?

Anchor investors are institutional investors that can bid for shares ahead of the IPO and have a lock-in of 30 days. This rule ensures that investors who want to flip shares on listing, do not use the ‘anchor’ route.

  • Anchor investors or cornerstone investors are invited to subscribe for shares ahead of the IPO to boost the popularity of the issue and provide confidence to potential IPO investors.
  • The benefit for institutional investors applying in anchor quota is that they get guaranteed allotment. Allotment to investors applying in an IPO depends on the number of times the issue gets subscribed.


Sources: the hindu.


Paper 2 Topic: Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential; citizens charters, transparency & accountability and institutional and other measures.


Right to access Internet cannot be curtailed, says SC


The Supreme Court has clarified that a general prohibition on all online content about pre-natal sex determination will curtail the fundamental right to know of a genuine information-seeker. The clarification came based on a petition demanding for strict adherence by search engines to Section 22.


What section 22 says?

Section 22 is about prohibition of advertisement relating to pre-natal determination of sex.


What has the Court said?

The court held that the prohibition should kick in only if the content found online is violative of Section 22 under the Pre-conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) (PCPNDT) Act of 1994.


Important observations made by the court:

  • Citizens have the right to access the Internet to gain information, wisdom and knowledge and their right cannot be curtailed unless it encroaches into the boundary of illegality.
  • Calling the Internet a “virtual world” and a “world which is invisible in a way,” the Supreme Court observed that the fundamental right of expression includes “the right to be informed and the right to know and the feeling of protection of expansive connectivity” the Internet offers on the click of a button.


Assurance by Internet search engines:

The three Internet search engines — Microsoft, Google India and Yahoo! India — gave their assurances to the Supreme Court that they would neither advertise nor sponsor advertisements violative of the PNPCDT Act. The trio said they had already appointed ‘in-house’ experts to spot illegal content.

  • Nodal officers have already been appointed at State levels to keep tabs on the Net for offensive material contravening Section 22 of the Act.
  • In case the nodal officers detect illegal online content, they would communicate with the search engine’s experts, which would take it off within the next 36 hours of receiving the information. These experts would then follow it up by providing the nodal officers concerned with an action taken report.


Sources: the hindu.


Paper 2 Topic: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.


IMA issues advisory to tackle swine flu cases  


With over 100 deaths due to swine flu (H1N1 virus) across Maharashtra this year, including in Aurangabad, Pune and Nashik district, the Indian Medical Association (IMA) has issued an advisory to its members from the three concerned branches.



  • All cases of suspected or confirmed swine flu should be given anti-virals as per the protocol and carry out vaccination of healthcare providers among other crucial measures.
  • Doctors handling flu patients should wear N-95 mask, while patients should wear surgical masks.
  • All should stay — at least 3 meter — away from a flu patient while coughing and sneezing. One should not cough in hands and use disposable paper.
  • All hospitals and clinics should have enough surgical masks to be given at the reception to every patient of cough with fever.
  • As per the advisory, all high risk patients, heart and diabetes patients should take flu vaccination, whereas people traveling to Pune, Nasik and Aurangabad should consult their doctors regarding precautions and treatment advice.


Swine Flu:

Swine Influenza (swine flu) is a respiratory disease of pigs caused by type A influenza viruses that causes regular outbreaks in pigs. H1N1 is a flu virus. When it was first detected in 2009, it was called “swine flu” because the virus was similar to those found in pigs.

  • Transmission from Pigs to Humans: The H1N1 virus is currently a seasonal flu virus found in humans. Although it also circulates in pigs, one cannot get it by eating properly handled and cooked pork or pork products.
  • In 2009, H1N1 was spreading fast around the world, so the World Health Organization called it a pandemic.



  • Swine flu is contagious, and it spreads in the same way as the seasonal flu.
  • When people who have it cough or sneeze, they spray tiny drops of the virus into the air. If a person comes in contact with these drops or touch a surface that an infected person has recently touched, the person can catch H1N1 swine flu.
  • Pregnant women who contract the H1N1 infection are at a greater risk of developing complications because of hormonal changes, physical changes and changes to their immune system to accommodate the growing foetus.


Sources: the hindu.


Paper 2 Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.


Labour code to provide social security cover to all workers

Small entrepreneurs have raised some concerns over the government’s proposal to provide social security coverage to its entire workforce.

  • Small entrepreneurs feel that they may have to bear a little bit of financial burden due to contribution (towards social security schemes).


social security


The Centre had last month proposed a labour code on social security which will provide social security cover to the entire workforce in the country, including self-employed and agricultural workers.


Highlights of the ‘draft code on Social Security and Welfare’:

  • According to the code, even households employing domestic help will also have contribute towards schemes including provident fund and gratuity for the worker. Factories employing even a single worker will have to contribute towards social security benefits, as per the proposal.
  • Every working person in the country will be covered under the social security code whether she belongs to the organised sector or the unorganised sector. For the first time, cover to agricultural workers is being provided along with self-employed people. The target is to provide social security benefits to 45 crore workers.
  • The proposed code seeks to cover “any factory, any mine, any plantation, any shop, charitable organisations” and all establishments or households employing casual, part-time, fixed-term, informal, apprentice, domestic and home-based workers. All such establishments or factories will be liable to pay compensation if they fail to contribute towards the social security schemes of the workers.
  • The total contribution to be made by employers towards Employees’ Provident Fund and Employees’ State Insurance Scheme is proposed to be capped at 30% of the workers’ income. At present, employers contribute 31.5% of the workers’ income towards these schemes.
  • According to the proposed code, self-employed workers will contribute 20% of their monthly income towards provident fund, pension and other related schemes. Self-employed workers will also include “a person who takes land on share cropping or any other form of rent, and tills the same using his own or family members’ labour.”
  • All the entities – whether factories or households – will have to register their workers through an Aadhaar-based registration system, according to another proposal, and self-employer workers will be required to register themselves.
  • A National Social Security Council, chaired by the Prime Minister, has been proposed to streamline and make policy on social security schemes related to all the Ministries. Other members would include: Finance Minister, Labour Minister, Health and Family Welfare Minister along with employer and employees’ representatives.


Sources: the hindu.


Facts for Prelims:

Operation Meghdoot:

  • Operation Meghdoot the code-name for an Indian Armed Forces operation, was launched 33 years ago on April 13th.
  • It was launched in 1984, when Pakistan started permitting mountaineering expeditions into Siachen Glacier because of which India had to keep a close watch on Siachen.
  • The operation was launched to capture the Siachen Glacier in the Jammu and Kashmir. The military action resulted in gaining control over the world’s highest battlefield.
  • Siachen Glacier is 76.4 km long and covers about 10,000 sq km uninhabited terrain. It lies in the Karakoram Range in the North West India.


Mother of all Bombs:

  • The GBU-43/B – dubbed the ‘Mother of all bombs’ – has been dropped on an Islamic State complex in Afghanistan by the US forces.
  • The Moab or GBU-43/B is the world’s largest non-nuclear weapon.
  • It is designed to destroy heavily reinforced targets or to shatter ground forces and armour across a large area.
  • Its blast is equivalent to 11 tons of TNT. By comparison, the nuclear weapon dropped on Hiroshima had a blast yield of 15 tons of TNT.
  • While it has a blast radius that stretches a mile in each direction the bomb leaves no lasting radiation effect because it is non-nuclear.