DECEMBER 2016 of FPS (fair price shops), Godown data and Ration Card data furnished to them in respect of many of the States. The committee found that progress of

CURRENT

AFFAIRS PDF

NETAJI IAS

03

DECEMBER

2016

NETAJI IAS

OCTOBER 08 1

w w w . n e t a j i i a s . c o m

Page 1

Digitization of Food

Why in News?

Food Ministry has expressed skepticism over digitization data furnished on

ration cards, supply chain and Aadhaar seeding.

A Parliamentary Standing Committee has urged the department concerned to

cross-check with States to establish their authenticity.

What did Committee found?

The committee, headed by JC Divakar Reddy (Telugu Desam Party), noted the

importance of expeditious digitization of database for better targeting of food

subsidies, said it was “sceptical of the 100 per cent achievements shown in

respect of FPS (fair price shops), Godown data and Ration Card data furnished

to them in respect of many of the States.

The committee found that progress of work relating to Aadhaar Card Seeding

is almost zero in Arunachal Pradesh, Bihar, Chhattisgarh, Gujarat, J&K,

Karnataka, Manipur, Meghalaya, Odisha, Sikkim, Uttarakhand, UP, West Bengal

and in Lakshadweep.

In big States like Madhya Pradesh, it is as low as 18 per cent whereas in

Maharashtra and Rajasthan, it is just only one per cent.

What is the reports recommendation to centre on data?

The report urged the Centre that the authenticity of the data furnished by States

be cross-checked with the ground situation available in the States, especially in

respect of States like Uttar Pradesh, West Bengal, Assam, Gujarat etc.

The Food Ministry, had said that the beneficiary data base had been digitised in

all the 36 States/Union Territories, wherein, information was available right up

to beneficiary level and was in the public domain, adding that online allocation

of foodgrains is being done in 28 States/UTs, and the entire foodgrain supply

chain has been computerised in 18 States/UTs.

OCTOBER 08 2


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It also said that 100 per cent linkage of Ration Cards with Aadhaar, which is 71

per cent at the moment, will be achieved.

On computerisation of supply chain management, the Parliamentary

committee noted that it had been implemented in only three-four States while

some others were progressing slowly, and recommend that the department

take up the job in consultation with all State governments/UTs “on top priority

with a fixed timeline.”

Though funds were released to 27 States/UTs, 14 States have not

shown/reported any expenditure for the above period, said the committee,

adding that “this speaks volumes of the performance of this vital scheme aimed

to prevent leakages, diversions in supply of foodgrains”.

Category: Mains| GS – II | Governance

Source: Buisness Line

Port-led Development

OCTOBER 08 3


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Why in news?

The Ministry of Shipping held a consultation meeting with various stake

holders on ‘Policy for Award of Waterfront and Associated Land to Port

Dependent Industries in Major Ports’ in New Delhi.

Aim of the policy

The policy aimed at bringing uniformity and transparency in the procedure

for awarding captive facilities at ports.

The ambit of the Policy includes creation of new assets as well as utilization of

currently unutilised existing assets such as vacant berths. The Policy will be

applicable to all the Major Ports.

The policy will enable optimal utilization of capacities in Major Ports and

increase revenue to the Major Port Authority.

What are the existing guidelines?

Under the existing guidelines for private sector participation in Major Ports

issued by the Ministry of Shipping (MoS) in 1996 and 1998, provisions were

made for allotment of waterfront and land on a captive basis to Port Based

Industries including Central/State Public Sector Undertakings (PSUs) which

fulfilled the prescribed eligibility criteria.

A captiveunit is a business unit of a company functioning offshore as an entity

of its own while retaining the work and close operational tie ups within the

parent company.

Though some berths and facilities were set up in some Major Ports following

these guidelines, the potential for development of such facilities is not yet fully

realized.

Hence the need for the new Policy for Award of Waterfront and Associated

Land to Port Dependent Industries in Major Ports’.

What the new policy says?

OCTOBER 08 4


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Under the new policy, concession will be granted to Port Dependent

Industries (PDI) for setting up dedicated facilities in Major Ports for import

and/or export of cargo and their storage before transportation to their

destination, for a period not exceeding 30 years.

Extension of concession period on conditions including under-utilization of

asset as per the concession agreement may be allowed.

After a maximum of 30 years of operation, the waterfront and associated land

in a Major Port will be allotted for construction of berths, offshore anchorages,

transhipment jetties, single point moorings etc.

It will be as per the terms and conditions of the Concession Agreement (CA) to

be entered into between the Port Authority and the PDI concerned.

Way ahead

The policy will help generate committed business for the Major Ports on a

long term basis by facilitating the development and operation of dedicated

port facilities by industries which are substantially dependent on a particular

Major Port for import and/or export of their cargo and thus play a catalytic

role in the eventual realization of the objectives of Port led development.

Allocation of waterfront and associated land to port based industries on

PPP/captive basis is one of the major areas which have been identified by the

Ministry of Shipping for participation/investment by the private sector in

Major Ports.

Government of India has focused on Port led development through

the Sagarmala program as a key enabler for economic growth.

Optimal utilization of land and waterfront at the disposal of the Major Ports is

of critical importance in this context.

Category: Mains| G.S-II|Policy

Source: PIB

Combating Pollution

OCTOBER 08 5


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Why in news?

The Supreme Court recently approved a comprehensive action plan aimed at

putting an end to a blame game between central and state authorities and

institutionalizing measures to tackle air pollution emergencies in the capital.

What is the recent direction of Supreme Court?

A bench comprising chief justice T.S. Thakur and justices A.K. Sikri and S.A.

Bobde directed the centre to adopt reports submitted by the Environment

Pollution Control Authority (EPCA).

The EPCA list steps to be taken whenever air quality deteriorates beyond a

certain level.

Highlights of EPCA report

EPCA’s reports categorize four levels of air pollution in the National Capital

Region (NCR) centred around Delhi, based on atmospheric particulate matter

(PM) levels.

Particulate matter can be fine—measuring 2.5 micrometres or less and

coarse—those that are 10 micrometres or less.

Air pollution will be classified into four categories of air quality—moderate to

poor, very poor, severe, very severe or emergency.

The plan sets in motion a series of steps that every authority—central

government, Delhi government, municipal corporations and Delhi’s

neighbouring states—need to take as pollution levels spike.

For the first time a system is being created for pollution emergency response.

This is also not just an advice but will have legal backing as the Union

environment ministry will notify it.

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What Green Peace says?

A study released by non-profit Greenpeace said that air pollution due to

continued use of fossil fuels in India and China has caused an additional 1.6

million more deaths than the projected figure based on the GDP growth rate for

the year 2015.

Usually, air pollution has an inverse relationship with the country’s GDP; we

find that as countries become richer they generally develop less polluting

industries.

But in the case of India and China, the trend has been quite the opposite: despite

their economic growth, both countries have particularly poor air quality.

Category: Prelims and Mains| G.S-III| Environment

Source: Livemint

OCTOBER 08 7


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Market Stabilization Scheme (MSS)

Why in news?

The government, increased the ceiling of MSS bonds to Rs.6 lakh crore, from the

earlier Rs.30000 crore.

What is MSS?

MSS bonds are issued by the central bank to manage liquidity operations when

intervening in the foreign exchange market.

When the RBI buys dollars, it releases rupee liquidity in the system, which can

then be mopped up by sale of MSS bonds.

The bills/bonds issued under the MSS would have all the attributes of the

existing treasury bills and dated securities.

However, unlike regular bonds, these are not issued to meet the government’s

expenditure and the funds raised are kept in a separate cash account.

As a result, their issuance will have a negligible impact on the fiscal deficit of

the government.

Rationale behind current enhancement in MSS ceiling:

The government’s demonetisation drive has resulted in banks being flush with

funds to the tune of Rs.8.45 lakh crore till November 27.

After banks had parked Rs.5 lakh crore in the reverse repo window with RBI,

the central bank imposed 100 per CRR requirement on deposits collected

between September 16 and November 11.

The hike in CRR sucked out Rs.3.24 lakh crore from banks, an amount that will

not earn any interest.

Using the CRR to suck excess liquidity would jam the transmission of liquidity

adjustment facility rates to lending rates.

OCTOBER 08 8


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Hence CRR is not an advisable option to absorb excess liquidity. In order to roll

bank 100% CRR norms on incremental deposits, the Central Bank has raised

the ceiling for MSS bonds.

How will banks get benefitted by enhanced MSS bonds’ ceiling:

The issuance of MSS bonds comes as good news for banks, in the absence of

adequate immediate investment opportunity.

While CRR doesn’t earn any interest, MSS bonds bear a coupon that can boost

banks’ income.

Besides, the MSS bonds can also be used to calculate banks’ mandatory bond

holding. The statutory liquidity ratio (SLR), presently at 20.75%, is the share of

deposits banks have to invest in government bonds. MSS bonds can be counted

as SLR bonds.

The proceeds of MSS bonds don’t go to the government, but sit in RBI’s books

under the head “MSS Account”. However, in 2009, a part of the MSS bonds

was used by the government to bridge its deficit and therefore, analysts say, it

won’t be surprising if this previous practice is followed this time too.

Issues in MSS bonds:

MSS bonds would be “costly from RBI’s perspective, increasing its limits would

need some work, and it may not have been as flexible a tool as an ‘incremental

and temporary’ rise in the CRR.

Category: Mains | GS – III | Economics

Source: Live Mint and Business Standard

OCTOBER 08 9


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Better internal watchdogs in Banks

Current need of Indian banks:

Currently banks face risks have led to capital erosion and further requirement

of own funds to maintain international standards of capital and leverage, in

accord with what are known as the latest Basel norms.

While finding capital in a savings-oriented nation may not be much of an issue

if the right kind of policy changes are made, the challenge for Indian banks

would be to tighten internal controls and risk management measures.

Importance of effective internal audit:

The Bank for International Settlements has been consistent in its emphasis on

the need for strong internal audit functions, as part of risk mitigation measures.

As early as in 2011, in a comprehensive charter, the BIS stated that an

independent, effective internal audit function is part of sound corporate

governance.

Banking supervisors must be satisfied as to the effectiveness of a bank’s

internal audit function and that management takes appropriate corrective

action in response to internal control weaknesses identified by internal

auditors.

An effective internal audit function helps reduce the risk of loss and

reputational damage to the bank.

A dynamic and vibrant internal audit department would now be the sine qua

non for the functioning of any commercial bank worth its name.

Internal audit mechanism in Indian banks:

A major part of the ills currently plaguing the public sector banks could be

traced to weak internal controls and the relatively lower importance given to

audit and inspection as a “function”.

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It is common knowledge among senior bankers that, as a rule, the inspection

department is seen mostly as a “dump yard” for personnel who would not

otherwise fit into other fashionable areas like treasury, credit or operations.

In promotion exercises, a tenure in Inspection is often seen as a disadvantage

because the tag would be that of somebody who had been a misfit in

“mainstream” banking.

Importance of autonomy in auditing:

Absolute independence of internal audit with accountability only to the board

of directors is essential to put in place an effective audit mechanism.

To be truly detached and objective, even physically, the audit department needs

to be away from the corporate/head office, because the Chairman or CEO,

breathing down the neck of the inspection chief, may lead to compromising of

roles.

In almost all public sector banks, the Inspection department head still functions

under the direction and supervision of the CEO or the executive heads, leading

to conflict of interest.

And in many review discussions, business performance predominates, pushing

compliance and risk management to the background.

Category: Mains | GS – III | Economics

Source: BusinessLine

OCTOBER 08 11


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CURRENT AFFAIRS BITS

Gambia’s President election stuns nation

o Opposition candidate Adama Barrow hailed a “new Gambia” on

Friday after he pulled off a stunning presidential election victory.

o His win put an end to the 22-year rule of Yahya Jammeh.

o Gambians took to the streets to celebrate the biggest upset in the

west African nation since Jammeh seized power in a 1994 coup.

Stephen Hawking Hospitalised For Checks

o British physicist and cosmologist Stephen Hawking has been

hospitalised in Rome for checks after not feeling well.

o Hawking, 74, who was in Rome to attend a conference at the

Pontifical Academy of Sciences and met Pope Francis on Monday,

was taken to Rome’s Gemelli hospital

o Hawking, author of “A Brief History of Time,” speaks through a

computer and travels with a staff that includes 2 nurses.

27 senior PSU bank officials suspended

o Action has been taken against 27 officials of PSU banks in the

aftermath of demonetisation of high-value banknotes.

o These officials were found violating norms laid down by the

Reserve Bank of India.

o The suspensions come amid reports of income tax raids

conducting search and seizure places at many places including Rs

5.7 crore cash in new currency notes recovered in Bengaluru.

Chitra Ramkrishna quits as NSE chief

o Chitra Ramkrishna, managing director (MD) and chief executive of

the National Stock Exchange of India (NSE) has stepped down

from her post.

o The move comes in the wake of the fact that country’s largest

bourse is set to go public.

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o The board has set up a selection committee to find a replacement

for Ramkrishna and has appointed group president J

Ravichandran as interim CEO.

UK backs India’s bid for UNSC

o British Foreign Secretary Boris Johnson on Friday supported

India’s quest for permanent membership of the UN Security

Council.

o He called for its expansion to include India for a more “realistic”

re-alignment of the world order.

o Johnson also said as Britain leaves the European Union (EU), it

would look to engage deeply with Asia.

Trump speaks with Taiwan’s president

o President-elect Donald Trump spoke Friday with the president of

Taiwan, a move that will be sure to anger China.

o It is highly unusual, perhaps unprecedented, for a US president or

president-elect to speak directly with a leader of Taiwan

o Taiwan is a self-governing island with which the US broke

diplomatic ties with in 1979.

SC asks Govt. To Notify Plan For Air

o The SC has asked the central government to notify the “graded

response action plan” for different level of air pollution in the

Delhi and NCR.

o Central Pollution Control Board (CPCB) will install real time and

manual pollution monitoring stations in Delhi, Haryana, Uttar

Pradesh and Rajasthan.

o The court order came after a report submitted by the CPCB giving

four categories of air pollution.

Govt. Wants Aadhaar to Replace Cards

o The Unique Identification Authority of India has planned to

increase biometric authentication capacity through Aadhaar to 40

crore a day from 10 crore.

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o This is to encourage more use of the platform for realising a

cashless society.

o Through a mobile application, the handset will be used for

authenticating biometrics of customers making Aadhaar enabled

payment.

Nico Rosberg announces his retirement

o Nico Rosberg announced his retirement after he received his

Formula One world championship trophy.

o The 31-year-old paid tribute to longtime friend and Mercedes

teammate Lewis Hamilton, the outgoing world champion.

o Rosberg admitted that had he come up short in the championship

this year, he would have carried on in 2017.

AIDS Vaccine Trial Begins in S.Africa

o South Africa has just launched a multi-year trial of a vaccine that

might save millions of lives and help put an end to AIDS.

o It’s the first AIDS vaccine trial in seven years, and hopes are high,

not just in South Africa, but around the world.

o To develop a vaccine, scientists find a way to mimic the virus so

the body makes an immune response to protect itself.

First private moon mission next year

o TeamIndus, a Bengaluru-based private aerospace company, has

said it will send a spacecraft to the moon on December 28, 2017

o The mission’s aim is to land this spacecraft on the moon, have it

travel at least 500 metres and beam high- definition video, images

and data back to the earth.

o In 2008, Chandrayaan 1 became the first Indian space mission to

send a spacecraft that circled the moon.

Govt brings bonds for demonetised funds

o Govt. has created provisions to issue special bonds to absorb the

temporary surplus with banks created by nationwide deposits of

demonetised currency.

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o The bonds created worth up to Rs 6 lakh crore to soak currency

worth Rs 8 lakh crore of demonetised funds.

o The RBI will sell the bonds, called Market Stabilisation Scheme

(MSS), to banks on behalf of the government.

Govt. for rolling out GST by Sep 2017

o Finance minister Arun Jaitley said on Friday that there is a

Constitutional compulsion to roll out the Goods and Services Tax.

o He asserted that the government’s intention is to kick off the

ambitious reform by April 1.

o He added that GST has to be in place before September 16 (2017),

otherwise the country doesn’t run.

HC rejects Mallya’s application

o The high court has rejected the interlocutory application filed by

Vijay Mallya, seeking for recall of the October 20, 2016.

o The order was order for framing charges against him in relation to

the contempt petition filed by consortium of banks which lent

money to his now-defunct Kingfisher Airlines.

o The court has asked Mallya’s counsel to communicate to him,

while asking for his presence

Reliance could be fined Rs 500 for ads

o Reliance Jio’s controversial decision to use PM Modi’s photograph

in front-page newspaper ads could receive a paltry fine of Rs. 500.

o The Emblems and Names (Prevention of Improper Use) Act 1950

prohibits the improper usage of emblems and names for

professional and commercial purposes.

o Any person who contravenes the provisions shall be punishable

with fine which may extend to 500 Rs.

Andhra CM gets Rs 2,420 cr for state

o Andhra CM yesterday had to make an SOS call to RBI governor

Urjit Patel to ask for urgent cash.

o This happened because AP was “cashless” even to pay salaries to

its employees and pensioners.

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o RBI chief sent 2,420 crore by special chartered flights to

Visakhapatnam and Tirupati on Friday.

o 240 crore each was sent to severely hit districts and 160 crore

each to other districts.

Iran appeals against violation of N-Deal

o U.S. Senate gave Congress’ final approval to an extension of the

American sanctions against Iran.

o Iran is threatening to retaliate after the U.S. Senate gave Congress’

final approval.

o Iranian Supreme Leader Ayatollah Ali Khamenei has said that he

considered the sanctions bill a breach of the nuclear deal and

threatened retaliation.

Retd. General to lead Pentagon

o Breaking once more from presidential custom, Donald Trump is

turning to a military man to to lead the Pentagon .

o U.S. military retired Gen. James Mattis will be the first career

officer to do so since just after World War II.

o Mattis, 66, is a Marine Corps general who retired in 2013 after

serving as commander of the U.S. Central Command.

Agriculture down as Rabi sowing falls

o This year’s rabi production, wheat sowing was down 8.25% from

normal until Friday.

o The area sown of all rabi crops was only two-thirds of the normal

rabi area.

o There are only two weeks to go before the sowing season ends.

o Analysts have said the latest data released by the ministry of

agriculture confirmed that demonetisation had impacted sowing

adversely

Usain Bolt Wins Athlete Of Year Award

o Sprint king Usain Bolt won an unprecedented sixth IAAF male

Athlete of the Year award on Friday.

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o Ethiopian Almaz Ayana picking up the female award after her

record-setting 10,000m gold in Rio.

o Bolt, previously winner in 2008, 2009, 2011, 2012 and 2013, was

rewarded for another blistering season that saw him claim three

gold medals

Documents

DECEMBER 2016 of FPS (fair price shops), Godown data and Ration Card data furnished to them in respect of many of the States. The committee found that progress of