Insights Daily Current Affairs, 05 November 2018
Topic: Statutory, regulatory and various quasi-judicial bodies.
Competition Commission of India
What to study?
For Prelims and Mains: CCI- features, composition, functions and significance, Key features of the Competition Act.
Context: A ‘National Conference on Public Procurement & Competition Law’ is being organised by the Competition Commission of India (CCI) with a view to scale up Competition Advocacy and reach out to important stakeholders in public procurement ecosystem.
- The National Conference is being organised in association with Indian Institute of Corporate Affairs (IICA), a think tank under the aegis of Ministry of Corporate Affairs.
About Competition Commission Of India:
The Competition Commission of India (CCI) was established under the Competition Act, 2002 for the administration, implementation and enforcement of the Act, and was duly constituted in March 2009. Chairman and members are appointed by the central government.
The following are the objectives of the Commission:
- To prevent practices having adverse effect on competition.
- To promote and sustain competition in markets.
- To protect the interests of consumers.
- To ensure freedom of trade.
Functions of the commission:
- It is the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.
- The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.
The Competition Act:
- The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.
Committee to review the Act:
In pursuance of its objective of ensuring that Legislation is in sync with the needs of strong economic fundamentals, the Government recently constituted a Competition Law Review Committee to review the Competition Act headed by Secretary, Ministry of Corporate Affairs.
Topic: Important International institutions, agencies and fora, their structure, mandate.
South Asian Association for Regional Cooperation (SAARC)
What to study?
- For Prelims: Features, objectives and composition of SAARC.
- For Mains: Significance of SAARC, role of China in SAARC, should it be given a permanent seat? Implications.
Context: Giving a boost to China’s long standing demand, Pakistan recently said that it supported active participation of China at the platform of the South Asian Association for Regional Cooperation (SAARC).
Why China is demanding a greater role?
China has a status of an observer state in South Asia, however an observer state can get involve with SAARC members on specific initiatives, but they do not have voting rights. China entered SAARC as an observer in 2005, supported by most member states.
India’s concerns and fears:
- If China is given a greater role, India fears that its neighbours will come together to oppose the country’s interests, particularly under the influence of Pakistan and China. India’s neighbours are attracted to China, because of its greater economic resources, as also it has the potential to counter India. China’s influence can be witnessed even in Nepal. To enhance strategic ties with Nepal, China has been investing heavily in that country; it has opened land-port between Nepal and Tibet named as Kyirong which will affect the regional strategic balance.
- The growing friendship with China and Pakistan is viewed by many as a joint tactic to offset India’s dominance in the South Asian region. One of the most famous project, is China-Pakistan Economic Corridor (CPEC) which strategically aims at providing links between the overland Silk Road and maritime Silk Road. Due to this project China becomes one of the major investors in Pakistan.
- It has been agreed that China’s entry in SAARC as a full-member can give a push to SAARC to grow as a regional bloc as China’s global economic influence can help SAARC in international forum. But, growing alliances between China and Pakistan may work against India and which will hamper the regional progress. It has also been feared that China may block the projects which are both strategically and economically important for India.
China is becoming member of different regional blocs due to its growing economic and military might. China’s active and aggressive diplomacy, trade and investments, many cooperative agreements with SAARC nations is thus enabling it to have a greater influence in south Asia. India needs to re-think its regional strategies as rise of China will impact India. Often it is viewed that the rise of China will decrease India’s influence in South Asia.
- The South Asian Association for Regional Cooperation (SAARC) was established with the signing of the SAARC Charter in Dhaka on 8 December 1985. The Secretariat of the Association was set up in Kathmandu on 17 January 1987.
- SAARC comprises of eight Member States: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
- Important objectives of the Association as outlined in the SAARC Charter are: to promote the welfare of the peoples of South Asia and to improve their quality of life; to accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realize their full potentials; to promote and strengthen collective self-reliance among the countries of South Asia.
Sources: the hindu.
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Public Credit Registry (PCR)
What to study?
For Prelims and Mains: PCR- features, need, significance and the recommendations made by Deosthalee committee.
Context: The Reserve Bank has initiated steps to set up a wide-based digital Public Credit Registry (PCR) to capture details of all borrowers, including wilful defaulters and also the pending legal suits in order to check financial delinquencies.
- The PCR will also include data from entities like market regulator SEBI, the Corporate Affairs Ministry and the Insolvency and Bankruptcy Board of India to enable banks and financial institutions to get a 360-degree profile of existing and prospective borrowers on a real-time basis.
About Public Credit Registry:
What is it?
The PCR will be an extensive database of credit information for India that is accessible to all stakeholders. The idea is to capture all relevant information in one large database on the borrower and, in particular, the borrower’s entire set of borrowing contracts and outcomes.
Management of PCR:
Generally, a PCR is managed by a public authority like the central bank or the banking supervisor, and reporting of loan details to the PCR by lenders and/or borrowers is mandated by law. The contractual terms and outcomes covered and the threshold above which the contracts are to be reported vary in different jurisdictions, but the idea is to capture all relevant information in one large database on the borrower, in particular, the borrower’s entire set of borrowing contracts and outcomes.
Need for a PCR:
- A central repository, which, for instance, captures and certifies the details of collaterals, can enable the writing of contracts that prevent over-pledging of collateral by a borrower. In absence of the repository, the lender may not trust its first right on the collateral and either charge a high cost on the loan or ask for more collateral than necessary to prevent being diluted by other lenders. This leads to, what in economics is termed as, pecuniary externality – in this case, a spillover of one loan contract onto outcomes and terms of other loan contracts.
- Furthermore, absent a public credit registry, the ‘good’ borrowers are disadvantaged in not being able to distinguish themselves from the rest in opaque credit markets; they could potentially be subjected to a rent being extracted from their existing lenders who enjoy an information monopoly over them. The lenders may also end up picking up fresh clients who have a history of delinquency that is unknown to all lenders and this way face greater overall credit risk.
Benefits of having a PCR:
- A PCR can potentially help banks in credit assessment and pricing of credit as well as in making risk-based, dynamic and counter-cyclical provisioning.
- The PCR can also help the RBI in understanding if transmission of monetary policy is working, and if not, where are the bottlenecks.
- Further, it can help supervisors, regulators and banks in early intervention and effective restructuring of stressed bank credits.
- A PCR will also help banks and regulators as credit information is a ‘public good’ and its utility is to the credit market at large and to society in general.
Task force on PCR:
- The Reserve Bank of India (RBI) had formed a high-level task force on public credit registry (PCR) for India. The task force was chaired by Y M Deosthalee.
- The task force has suggested the registry should capture all loan information and borrowers be able to access their own history. Data is to be made available to stakeholders such as banks, on a need-to-know basis. Data privacy will be protected.
Sources: the hindu.
Topic: Infrastructure- energy.
Saura Jalnidhi scheme
What to study?
- For Prelims: Key features of Saura Jalnidhi scheme.
- For Mains: Significance of the scheme, potential of the solar energy and ways to utilize it.
Context: Odisha Government has launched Saura Jalnidhi scheme to encourage use of solar energy in irrigation by farmers.
Key features of the scheme:
- The beneficiary of this scheme will be farmers who have valid farmer identity cards and have minimum 0.5 acres of agricultural land.
- Under this scheme, farmers will be given 90% subsidy and 5,000 solar pumps. This will provide irrigation benefits in 2,500 acres of the state.
- In the first phase, this scheme will be available in those areas where electricity is not available for running the pump set.
Significance of the scheme:
- The scheme will generate 1.52 lakh human day employments annually and provided livelihood to around 5,000 families and also reduce carbon footprints.
- Under this scheme, farmers will be provided with a well-equipped solar pump irrigation system in convergence mode. It will help to reduce burden of input cost on farmers and also increase agricultural income. It will promote the use of green energy and reduce pollution.
Sources: the hindu.
Topic: Awareness in space.
What to study?
For Prelims and Mains: OSIRIS-Rex mission and facts on asteroid bennu.
Context: After two years travelling through space, the NASA OSIRIS-REx spacecraft has started to obtain images of the mission target, primitive asteroid Bennu.
The launch of the NASA OSIRIS-REx mission took place on September 8, 2016. Since then, the spacecraft has been two years travelling through space to reach its target, primitive asteroid Bennu, in October, 2018.
About the mission:
- OSIRIS-Rex stands for Origins, Spectral Interpretation, Resource Identification, Security-Regolith Explorer.
- OSIRIS-REx is the third mission in NASA’s New Frontiers program, which previously sent the New Horizons spacecraft zooming by Pluto and the Juno spacecraft into orbit around Jupiter.
What will the OSIRIS-Rex do?
OSIRIS-REx will spend two years travelling towards Bennu, arriving at the asteroid in August 2018. The probe will orbit the asteroid for 3 years, conducting several scientific experiments, before returning to Earth, with the sample capsule expected to land in Utah, USA in September 2023.
Scientific Mission Goals:
- During its three year orbit of Bennu, OSIRIS-REx will be conducting a range of scientific experiments in order to better understand the asteroid.
- As part of this, the asteroid will be mapped using instruments on the probe, in order to select a suitable site for samples to be collected from.
- The aim of the mission is to collect a sample of regolith- the loose, soil-like material which covers the surface of the asteroid.
- In July 2020, the probe will move to within a few metres of Bennu, extending its robotic arm to touch the asteroid’s surface. The arm will make contact with the surface for just 5 seconds, during which a blast of nitrogen gas will be used to stir up the regolith, allowing it to be sucked into the sample collector.
- OSIRIS-REx has enough nitrogen on board for 3 sample collection attempts, and NASA are hoping to collect between 60 and 2000g of regolith material to bring back to Earth.
Why was Bennu chosen?
Bennu was selected for a the OSIRIS-REx mission from over 500,000 known asteroids, due to it fitting a number of key criteria. These include:
- Proximity to Earth: In order for OSIRIS-REx to reach its destination in a reasonable timeframe, NASA needed to find an asteroid which had a similar orbit to Earth. Around 7000 asteroids are ‘Near-Earth Objects’ (NEOs), meaning they travel within around ~30million miles of the Earth. Out of these, just under 200 have orbits similar to Earth, with Bennu being one of these.
- Size: Small asteroids, those less than 200m in diameter, typically spin much faster than larger asteroids, meaning the regolith material can be ejected into space. Bennu is around 500m in diameter, so rotates slowly enough to ensure that the regolith stays on its surface.
- Composition: Bennu is a primitive asteroid, meaning it hasn’t significantly changed since the beginning of the Solar System (over 4 billion years ago). It is also very carbon-rich, meaning it may contain organic molecules, which could have been precursors to life on Earth.
- Additionally, Bennu is of interest as it is a Potentially Hazardous Asteroid (PHA). Every 6 years, Bennu’s orbit brings it within 200,000 miles of the Earth, which means it has a high probability of impacting Earth in the late 22nd Century.
Sources: the hindu.
Facts for Prelims:
Palau becomes first country to ban sunscreen to save coral reefs:
- The Western Pacific nation of Palau has become the first country to ban many kinds of sunscreen, in a move to protect its coral reefs from chemicals that scientists say cause significant damage.
- Under the ban, which will take effect in 2020, “reef-toxic” sunscreen — defined as containing one of 10 prohibited chemicals, a list that could grow later — can be confiscated from tourists when they enter the country, and retailers who sell it can be fined up to $1,000.