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DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 24th JUNE 2020

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  • June 24, 2020
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IAS UPSC Prelims and Mains Exam – 24th June 2020

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(PRELIMS + MAINS FOCUS)


Malabar Rebellion or Moplah Riots of 1921

Part of: GS-Prelims and Mains GS-I – History, Modern India

Why in news?

  • The 1921 Malabar Rebellion or Moplah Riots turns 100 next year.
  • In other words, the year 2021 will mark the 100th year anniversary of the Malabar/Moplah uprising of 1921.

About Malabar Rebellion

  • Malabar Rebellion of 1921 was the culmination of a series of riots by Moplahs (Muslims of Malabar) in the 19th and early 20th centuries against the British and the Hindu landlords in Malabar (Northern Kerala).
  • The resistance which started against the British colonial rule and the feudal system later ended in communal violence between Hindus and Muslims.
  • The Moplah Rebellion or the Malabar Rebellion was an extended version of the Khilafat Movement in Kerala in 1921.

The main leaders of this rebellion were:

  1. Variyankunnath Kunjahammed Haji
  2. Sithi Koya Thangal
  3. Ali Musliyar

Background:

  • In 1921 the Muslim peasants of the Malabar districts of Kerala known as the Moplahs rose against their landlords, the Namboodris and Nairs. These upper classes exploited the peasants. The Moplahs had no security of their tenure.
  • The renewal of fees, high rents and other extractions by the zamindars, broke the backbone of the Moplahs. They became united and made armed attacks on the Namboodris, Nair’s and other higher castes. The British Government became active and suppressed them.

For more information, read –  https://en.wikipedia.org/wiki/Malabar_rebellion


Pak-India diplomatic relations worsen

Part of: GS-Mains II – Indian and its neighbours; International Relations

In news:

  • The Indo-Pak relations took another dip when both countries decided to slash their staff by 50 percent at their missions in Islamabad and New Delhi.
  • The move comes after incidents of staffers from Pakistan High Commission being involved in espionage and terror funding came to fore.

Pak High Commission’s direct involvement in Terror Funding

  • New Delhi said Pakistani officials in India had “engaged in acts of espionage and maintained dealings with terrorist organisations”.
  • India also said Pakistani officials’ conduct was a violation of the Vienna Convention and “an intrinsic element of a larger policy of supporting cross-border violence and terrorism”.

Do you know?

  • Pakistan had unilaterally downgraded diplomatic relations after India scrapped Jammu and Kashmir’s special status last August and expelled the Indian high commissioner from Islamabad.
  • The Vienna Convention on Diplomatic Relations of 1961 is an international treaty that defines a framework for diplomatic relations between independent countries.
  • Ties between India and Pakistan have been severely strained over the past few years and have worsened with recent incidents of firing at the border and terror strikes in Kashmir.

Russia-India-China (RIC) trilateral meet

Part of: GS Prelims and Mains II – Indian and its neighbours; International Relations

About 

  • The Russia-India-China (RIC) trilateral is a significant multilateral grouping, because it brings together the three largest Eurasian countries which are also incidentally geographically contiguous.
  • The 16th RIC meeting coincides with Defence Minister Rajnath Singh’s visit to Moscow to attend Russia’s Victory Day parade which marks the 75th anniversary of the Second World War.
  • RIC discussions to focus on the current situation of the pandemic and the challenges of global security, financial stability and RIC cooperation in that context.
  • Speedy delivery of S-400 long range air defence system and hardware spares are also on the agenda.

Background:

  • The proposal for a Moscow-Beijing-Delhi ‘strategic triangle’ had originally come from the then Russian Prime Minister in 1998. He argued that such an arrangement would represent a force for greater regional and international stability.
  • This idea of a ‘strategic triangle’ took a tangible form when former Foreign Ministers of Russia, China, and India met on the margins of the UN General Assembly in New York in September 2002.

Key facts:

  • RIC meeting is important as Russia, India and China are countries that carry important voices in international politics and have the potential to significantly influence world events.
  • Together, the RIC countries occupy over 19 percent of the global landmass and contribute to over 33 percent of global GDP.
  • All three countries are nuclear powers and two, Russia and China, are permanent members of the UN Security Council, while India aspires to be one.

PM CARES finances ventilators

In news:

  • PM CARES Fund Trust allocates Rs. 2,000 crore for the supply of  50,000 “Made-in-India” ventilators to government-run COVID-19 hospitals.
  • Further, Rs. 1,000 crore has been allocated for the welfare of migrant labourers.

Do you know?

  • PM CARES distribution of the fund is based on the formula of 50% weightage for the population as per the 2011 Census, 40% weightage for the number of positive COVID-19 cases and 10% for equal distribution among all the States/UTs.

Delhi Urban Art Commission (DUAC)

Part of: GS Prelims and Mains – I and II – History and Culture; Governance

About DUAC

  • DUAC is a statutory body formed by an Act of Parliament in 1973.
  • DUAC is meant to advise the Centre on matters of preservation, development and maintenance of the aesthetic quality of the capital’s urban and environmental design.
  • It also provides advice and guidance to any local body in respect of any project of building operations or engineering operations or any development proposal which affects or is like to affect the skyline or the aesthetic quality of the surroundings or any public amenity provided therein.

Do you know?

  • DUAC plays a three fold role – a policy advisor to the Government of India, a regulatory body and a think tank.

Why DUAC is in news?

  • The ministry of housing and urban affairs had sought clearances from Delhi Urban Art Commission (DUAC) for the first phase of its ambitious project to construct a new parliament building.
  • However, the Centre’s proposal to construct a Parliament building was not approved by the DUAC.
  • The proposal of the CPWD, which operates under the Union Housing and Urban Affairs Ministry, is to construct a triangular Parliament building in the 10.5-acre plot adjacent to the existing heritage structure built in the 1920s.

Miscellaneous: 

Regulation of COVID-19 testing kits and Advertisements of drugs  

In news:

  • COVID-19 testing kits developed by labs of the Department of Science and Technology (DST) and the Council of Scientific and Industrial Research (CSIR) are yet to make it to the market, as new rules by the ICMR requires additional data and not just results from laboratory-controlled conditions. 
  • ICMR is the apex health research body and issues guidance on rapid antibody test kits for COVID-19.
  • Advertisements of drugs, including Ayurvedic medicines, are regulated under the provisions of the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954, and Rules thereunder. Ministry of Ayush asked Patanjali Ayurved Limited to stop advertising its drugs ‘Coronil’ and ‘Swasari’ and sought details on its claimed “successful trial and cure”.

Regulation of Abortion in India

  • Abortion in India is legal in certain circumstances. It can be performed on various grounds until 20 weeks of pregnancy. In exceptional cases, a court may allow a termination after 24 weeks.
  • The Medical Termination of Pregnancy Act of 1971 bars abortion if the foetus has crossed the 20-week mark. An exception to the law is made if a registered medical practitioner certifies to a court that the continued pregnancy is life-threatening for the mother.

(MAINS FOCUS)


ECONOMY/ DEVELOPMENT/ GOVERNANCE

Topic: General Studies 2:

  • Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
  • Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment

Reforms in India’s coal sector- Part 2

Context: The kick-starting of commercial coal mine auctioning is a fundamental shift in Coal sector which will help in realizing the vision of Atmanirbhar Bharat. 

Click here for part-I – that has elaborated on the recently announced reforms and also on brief history of Coal Sector in India

Benefits of the recently announced reforms

  • Competitive Sector: It will lead to the induction of new technology and competition in the sector. 
  • Revenue maximisation: The mines are expected to attract a capital investment of around ₹33,000 crore over the next 5-7 years, adding ₹20,000 crore annually to state government revenues.
  • Increased Production: According to the coal ministry, these 41 mines are expected to hit a peak production of 225 mt, generating around 15% of India’s coal output in 2025-26
  • Attracts Foreign Firms: Global coal mining firms, which were so far forbidden from mining coal in India, can now invest and introduce their best practices. 
  • Reduced Imports: Indian industry can invest in a commodity business that provides an opportunity to substitute 135 MT coal imports
  • Knock-off Impact: With the unlocking of the sector now, companies using coal will be free to focus on their core business while procuring coal from professional miners.
  • Better Utilization of resource: Mines will no longer be allotted on the basis of a ‘match’ with the needs of the single captive user. Rather, it will be auctioned based on economic efficiency.
  • Increased job opportunities: It is expected to create employment generation for more than 2.8 lakhs people.
  • Provides a boost to Make in India programme, since coal mining operations require large machines and manpower
  • Benefits State governments: the economies of coal-bearing states like Jharkhand, Chhattisgarh, Madhya Pradesh, Maharashtra and Odisha will also grow since all the revenue from these auctions will accrue exclusively to them.

Challenges Ahead

  • Federal Challenges: In a writ petition to the SC, Jharkhand has said the Centre’s decision to commence commercial mining process flouts Schedule-V of the Indian Constitution, which refers to the ‘scheduled areas’ falling under the state government. 
  • Social Impact Assessment: Jharkhan state has further contested that there is need for fair assessment of the social and environmental impact on the huge tribal population and vast tracks of forest land in the state.
  • Weak Investment Appetite: The negative global investment climate prevailing due to Covid-19 is unlikely to fetch reasonable returns proportionate to the value of the scarce natural resource
  • Vulnerable to Foreign Control of resource: Covid pandemic and liquidity crunch with the domestic industries might make them uncompetitive in auction process where Global players with huge resources will also be participating
  • Environmental Challenges: One of the proposed auction of a mine site is near Maharashtra’s Tadoba- Andhari Tiger Reserve. The State government has raised concerns that mining at the site can lead to destruction of wildlife corridors.

Connecting the dots:

  • Merits & challenges of privatisation
  • Sustainable development goals and necessity of coal (cheap source of energy but polluting in nature) by emerging countries for development

ECONOMY/ GOVERNANCE

Topic: General Studies 2,3:

  • Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 

Suspension of IBC okay, but there’s scope for further fine-tuning

Context: On 5th June 2020, an Ordinance was promulgated dealing with Insolvency & Bankruptcy Code (IBC)

About Insolvency & Bankruptcy

  • Insolvency is the situation where the debtor is not in a position to pay back the creditor. 
  • For a corporate firm, the signs of this could be a slow-down in sales, missing of payment deadlines etc. 
  • Bankruptcy is the legal declaration of Insolvency. 

Need of Insolvency & Bankruptcy Code (IBC)

  • Earlier the issue of insolvency was handled under at least 13 different laws and hence a unified code was essential.
  • Earlier, if a company defaults, there were at least four different legal routes available to the debtors and creditors – the high courts, the Company Law Board, the Board for Industrial and Financial Reconstruction (BIFR), and the Debt Recovery Tribunals (DRTs)
  • This could lead to multiple negotiations, multiple penalties etc. for the debtor, compounding his plight.
  • This situation was compared to the Chakravyuh – where companies can easily enter but difficult to exit
  • In the background of rising NPAs, the easing of liquidation process can help the banks recover a lot of bad debts

Salient features of the Insolvency and Bankruptcy Code:

  • IBC was thus enacted in 2016 for reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of the value of assets of such persons
  • IBC Code 2016 covers all individuals, companies, Limited Liability Partnerships (LLPs) and partnership firms.
  • The adjudicating authority is 
    • National Company Law Tribunal (NCLT) for companies and LLPs 
    • Debt Recovery Tribunal (DRT) for individuals and partnership firms.
  • Insolvency Professionals: A specialised cadre of licensed professionals is created. These professionals will administer the resolution process, manage the assets of the debtor, and provide information for creditors to assist them in decision making.
  • Insolvency and Bankruptcy Board: The Board will regulate insolvency professionals, insolvency professional agencies and information utilities set up under the Code.  The Board will consist of representatives of Reserve Bank of India, and the Ministries of Finance, Corporate Affairs and Law.

Working of IBC

  • It has led to resolution of 221 cases with a 44% recovery rate
  • As compared to other options, banks are recovering much better through IBC
  • The credible threat of the IBC process, that a company may change hands, has changed the behaviour of debtors
  • Thousands of debtors are settling defaults at the early stages of the life cycle of a distressed asset.

Why do we need changes in IBC now?

  • The nearly two-month lockdown imposed to contain COVID-19 brought much of the economic activity to standstill
  • This impacted the business operation of firms which negatively affected their revenues and hence their debt repaying capacity
  • The financial stress faced by debtors may lead to defaults. This situation called for dilution/suspension of IBC so that insolvency proceedings are not initiated for such unexpected defaults

What were the provisions of June 5th Ordinance?

  • It barred initiation of the corporate insolvency resolution process for defaults committed within six months (extendable up to one year) from 25th March 2020.
  • The Ordinance also clarifies that no application can ever be filed in respect of such defaults, thereby, giving a permanent immunity to such defaulting companies under the Insolvency Code.

Critical analysis of suspension of operation of the Insolvency code

  • Blanket time-specific embargo: Instead of identifying a criterion based on which relaxations could have been granted, the government has completely suspended the system.
  • No option of restructuring: The absence of criteria and its linkage to the suspension of the insolvency resolution process may actually cause more harm to the businesses, as the Insolvency Code will no longer remain available for restructuring of stressed assets of firms
  • Misuse: If an entity was already under stress and started making defaults in ordinary course after March 25, they will be able to take shelter under the newly instituted Ordinance even when the root cause of the default may not relate to the global pandemic.
  • Against Freedom of Business: The SC, in its judgments, has categorically stated that the ability to start and end business is a constitutional right, and, therefore, it cannot be taken away. Still, the Ordinance takes away the right of a company to initiate insolvency proceedings against itself.
  • Other options still available: Creditors can still take recourse to other methods and means to recover dues or prosecute the defaulting companies, like enforcement of a SARFAESI or initiation of arbitration or other legal proceedings.

Conclusion

  • The government could have considered providing an effect- or impact-based immunity.
  • The government should also consider enacting special pandemic legislation through which an immunity akin to the moratorium granted under IBC, is afforded to businesses that can prove pandemic-related stress

Connecting the dots:

  • Bad Bank – Critical Analysis
  • Twin sheet problem

(TEST YOUR KNOWLEDGE)


Model questions: (You can now post your answers in comment section)

Note: 

  • Correct answers of today’s questions will be provided in next day’s DNA section. Kindly refer to it and update your answers. 
  • Comments Up-voted by IASbaba are also the “correct answers”.

Q.1 Variyankunnath Kunjahammed Haji is associated with which of the following revolts/rebellion?

  1. Santal Rebellion
  2. Chauri Chaura revolt 
  3. Moplah Rebellion
  4. Fakhir revolt

Q.2 Which of the following pairs is/are correctly matched?

  1. The Santhal Rebellion : : 1875.
  2. Bengal Indigo Cultivators revolt : : 1860.
  3. Moplah Uprising  : : 1921.

Which of the above is/are correct? 

  1. 3 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3

Q.3 Consider the following pairs and choose the correctly matched pair/s from below options:

(Missile deal : : Associated country)

  1. SPIKE anti-tank guided missile : : India-US
  2. S-400 Triumf long-range surface-to-air missile systems : : India-Russia
  3. SPYDER Surface-to-Air Missile System : : India-Israel 

Choose appropriate code from options below:

  1. 1 only
  2. 2 only
  3. 1 and 2 only
  4. 2 and 3 only

ANSWERS FOR 23rd June 2020 TEST YOUR KNOWLEDGE (TYK)

1 A
2 C
3 B
4 C

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