IASbaba’s Daily Current Affairs (Prelims + Mains Focus)- 18th May 2018
Prompt Corrective Action (PCA) plan
Part of: GS Prelims and Mains III – Indian Economy; Monetary Policy; RBI reforms; NPA issue
What is Prompt Corrective Action?
To ensure that banks don’t go bust, RBI has put in place some trigger points to assess, monitor, control and take corrective actions on banks which are weak and troubled. The process or mechanism under which such ac tions are taken is known as Prompt Corrective Action, or PCA.
- Eleven of India’s 21 listed government-owned banks were placed under the Reserve Bank of India’s watch due to large bad loans, weak capital levels and low return on assets. (during Jan 2018)
- The Centre has expressed that it will ensure every possible support to strengthen the resolve of these banks to come out of the PCA framework as quickly as possible.
- Indiscriminate lending of the past has caused this distress the banking sector is facing.
Do you know?
- RBI had come out with ‘Prompt Corrective Action (PCA) Framework’ for banks (in Apr 2017). Earlier, the PCA framework was applicable only to commercial banks and not extended to co-operative banks, non-banking financial companies (NBFCs) and FMIs.
- However, in May 2017, RBI issued revised PCA framework , which could be applicable to all banks operating in India including small and foreign banks. PCA is aimed at improving banks’ health. It also helps to contain NPAs.
- Recently, National Bank of Agriculture and Rural Development (Nabard) has come out with a ‘Prompt Corrective Action (PCA) Framework’ for regional rural banks (RRBs).
Part of: GS Prelims and Mains III – Indian Economy; Urbanization issues
UN Department of Economic and Social Affairs (UN-DESA) has released its 2018 Revision of the World Urbanization Prospects
- Forecasting for the year 2050, the UN agency estimates that the percentage of urban residents in India would be 52.8, compared to 34 today.
- Delhi would be world’s most populous city by 2028.
- India, China and Nigeria are expected to lead other countries and account for 35% of the projected growth in urban population by mid-century.
Concerns with Urbanization
Report says – ‘Even with only a third of the population living in cities, civic anarchy is rampant in the country’.
- Rapid increase in the number of slums;
- lack of enforcement of building norms;
- heavily congested metros;
- poor investment in public transport;
- unsustainable levels of private vehicle use
– are some of the issues.
Recent data released by the World Health Organisation show – 14 Indian cities among the top 20 worldwide with the worst air quality profiles (especially with regard to PM 2.5)
Most cities are also unable to collect and dispose municipal waste scientifically, and simply dump them in the suburbs.
Integrating green spaces, open commons and wetlands will make cities cleaner and aesthetically richer.
TOPIC:General Studies 2:
- Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
- India and its neighbourhood- relations.
- Effect of policies and politics of developed and developing countries on India’s interests.
Refugee Issue: Unanswered Aadhar Services
Supreme Court is currently hearing a petition against the government’s order which sought to deport/expel Rohingya refugees.
Why this case is important?
At current, India lacks a refugee specific legislation or a clear domestic asylum law.
India currently hosts 32,000 refugees fleeing war, violence and severe persecution in countries such as Afghanistan, Myanmar, Somalia, Iraq, etc. This is in addition to the 175,000 long-staying refugees from Tibet and Sri Lanka who have been given asylum over decades.
With conflicts around the world having intensified, fresh arrivals of refugees are only expected to increase.
However, India is yet to enact a coherent and uniform law addressing the issue of asylum. In fact, the term “refugee” finds no mention under domestic law.
Therefore, this case offers a great opportunity for the Court to lay down basic principles on refugee recognition and protection that reflect India’s constitutional values and its international commitments.
Key issues to be solved:
- There is a need for a coherent asylum and refugee policy.
- There is a need for providing access to essential services to the refugees during their stay in India.
- Most of the facilities and services to refugees are now ineffective owing to the linking of these services to Aadhaar. The question of Aadhaar for refugees still remains unanswered.
Aadhar’s true intention
Aadhaar was primarily conceived as a tool for socio-economic inclusion. Unique Identification Authority of India (UIDAI) has designed a simple enrolment system that accepts a wide range of documents as proof of identity and residence so as to make it easy to procure an Aadhaar.
For example, for those without any documents, UIDAI accepts a “Letter of Introduction” from a wide set of people who are pre-designated as introducers.
In the interest of inclusiveness — UIDAI did not link Aadhaar to citizenship. The Aadhaar Act states that any individual who has resided in India for at least 182 days in the year immediately preceding the date of application is eligible for Aadhaar.
UIDAI has clarified that foreigners fulfilling the above requirement can obtain an Aadhaar, subject to the submission of the prescribed documents.
No access to Aadhaar nor essential services:
Thus, based on the above, it would follow that refugees, who are registered with the government and/or the UN Refugee Agency (and are thus not “illegal immigrants”), should be issued Aadhaar if they meet both the residence and the documentation requirements.
However, most Aadhaar centres are not clear about whether refugees are eligible to apply for Aadhaar.
Refugees from the Afghan, the Burmese and the Congolese communities living in New Delhi report that they are being turned away by local centres due to the lack of clarity on the issue.
Further, the documents held by them are not being recognised as valid proof of identity or residence. Many eligible refugees have also been scared to apply for Aadhaar due to the fear of being wrongly prosecuted as local authorities often incorrectly equate them with illegal immigrants.
In recent months, with Aadhaar increasingly being enforced as a precondition to access any service, refugees are not even being able to avail of services that they once had.
Many refugees report facing day-to-day difficulties like getting a SIM card, opening a bank account, renting accommodation, seeking livelihood opportunities or even accessing private hospitals.
This is resulting in refugees being steadily excluded from mainstream systems and leaving them extremely vulnerable to exploitation. Such problems of exclusion of Aadhaar are being faced by many Indians as well.
Government should consider issuing uniform documentation to refugees so as to confirm their status as legal residents and UIDAI must adhere to its commitment to inclusion by allowing more flexibility to refugees so as to establish their identity.
Further, officials must be sensitised about refugees, and the existing systems to establish identity (like establishing identity through introducer systems etc.) must be extended to this group.
Connecting the dots:
- Why there is a need for India to have a robust refugee policy? What actions can India take to provide hassle-free basic services to refugees?
TOPIC:General Studies 2:
- India and its neighbourhood- relations.
- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
- Effect of policies and politics of developed and developing countries on India’s interests
India-Nepal relations: A new beginning
During the just-concluded visit to Nepal, termed “historic” by Prime Minister Narendra Modi himself, he and his host, Nepalese Premier KP Sharma Oli, reiterated their resolve to effectively implement the bilateral initiatives proposed during Prime Minister Oli’s recent visit to India, including in “agriculture, railway linkages and inland waterways development”.
The visit reflected the realisation that the relationship had deteriorated in recent years and there was an urgent need to arrest the slide.
- Mr. Modi described it as a visit by the ‘Prime Pilgrim’. With prayers offered in Janaki Mandir, Muktinath and Pashupatinath, the focus was on religious and cultural commonalities.
A bus service between Janakpur and Ayodhya was inaugurated.
- Only one of the earlier commitments, the 900 MW Arun III hydel project, has progressed and both Prime Ministers jointly laid its foundation stone.
- The joint statement is short. It prioritises cooperation in agriculture, inland water-ways, a survey for a railway line from Raxaul to Kathmandu and increasing air connectivity.
The “catalytic role of connectivity”:
The two sides specially emphasised the “catalytic role of connectivity”. With cross-border connectivity being a crucial factor to “enhance people-to-people linkages and promote economic growth and development”, the two leaders lent a renewed dynamism to several infrastructural schemes and projects.
- The two Prime Ministers jointly inaugurated an integrated check post at Birgunj in Nepal to facilitate cross-border movement of people and cargo.
- The ground-breaking of the Motihari-Amlekhgunj pipeline done for petroleum supplies from India to Nepal.
- Decided to develop “cost-efficient”, economical movement of cargo through inland waterways, besides providing sea-connectivity to landlocked Nepal.
India commands the centre-stage in South Asia, with 51 per cent of the region’s surface area, 71 per cent of population, and 40 per cent of GDP. Most of its neighbours share borders not only with India, but also in most cases with one more country in the region. They perforce depend on India for region-wide connectivity.
Bilateral rail connectivity (Raxaul-Katmandu): A game-changer
The most momentous project ever contemplated by India for its close neighbour was the joint pronouncement “to construct a new electrified rail line, with India’s financial support”, to connect Raxaul to Kathmandu, for which a preparatory survey will be conducted within one year.
While assuring that Phase I cross-border rail lines (Jayanagar-Janakpur/Kurtha and Jogbani-Biratnagar) will be completed in 2018, the ongoing final location survey for the three additional rail links (New Jalpaiguri-Kakarbitta, Nautanwa-Bhairahwa, and Nepalgunj Road-Nepalgunj) will also be expedited.
Challenge: India’s bureaucratic sloth
What particularly irks India’s neighbours is lack of progress in implementing even minor projects. India doesn’t deliver on promises made even at the highest levels.
For example, the 15-km missing rail link between Agartala on the Indian side and Akhaura rail-head in Bangladesh, that has been languishing since Bangladesh Prime Minister Sheikh Hasina graciously responded to India’s long-pending request for its construction during her visit in January 2010.
Likewise, Myanmar is the only ASEAN country sharing a land border with India. For long, India has talked of improving road and rail connections and a new port on Myanmar’s Arakan coast, but the progress is minimal.
In sharp contrast, China:
China shares land borders with five SAARC countries and has a long border with Myanmar. China has for long wanted to fill the South Asian space that nature gifted to India.
China views Nepal and Pakistan to be critically important for its security and territorial integrity in Xinjiang and Tibet. It is busy building a web of road and rail links, also ‘String of Pearls’ in Sri Lanka, Myanmar, Pakistan, and Bangladesh.
Now that India has shown rare vision and courage to proceed towards building the Raxaul-Kathmandu rail link, it should seize the occasion to build its self-confidence and among its neighbours by completing the project in record time.
The Raxaul-Kathmandu rail link has the potential of having a ‘transformational impact’ on the region.
A new beginning based on the principles of “equality, mutual trust, respect and mutual benefit”, phrases that Mr. Oli now insists on including in every joint statement, has started and will require time. Sustained effort by India in ensuring implementation of long-pending economic cooperation projects is required and must be given priority.
Connecting the dots:
- A new beginning has been initiated in India-Nepal relations. Sustained effort by India in ensuring implementation of long-pending economic cooperation projects is required and must be given priority. Comment.
(TEST YOUR KNOWLEDGE)
Model questions: (You can now post your answers in comment section)
Q.1) Consider the following statements with regard to ‘Prompt Corrective Action (PCA) Framework’, which was in news recently. Identify the correct statement –
- RBI has come out with this framework in order to contain NPAs of Public Sector Banks only.
- NABARD has come out with this framework for regional rural banks (RRBs).
- Ministry of Home Affairs has come out with this framework for directing all NGOs and entities receiving foreign fundings.
- Lodha Panel has come out with this framework that will sort out the mess in sports once and for all.
Q.2) World Urbanization Prospects is released by –
Should we do away with IB ministry
The east Asian reset
Identity in exile
This moment in the valley
Electric vehicles don’t need a government
Existential crisis for public sector banks