RBI has released a Consultative Document on Regulation of Microfinance.
It is released for harmonising the regulatory frameworks for various regulated lenders in the microfinance space.
It also said that all micro loans should be regulated by a common set of guidelines irrespective of who gives them.
The key proposals of the Consultative Document are
A common definition of microfinance loans for all regulated entities.
RBI has mooted capping the payment of interest and repayment of principal for all outstanding loan obligations of the household as a percentage of the household income, subject to a limit of maximum 50%.
A Board approved policy for household income assessment.
There would be no ceiling prescribed for the interest rate. There would be no collateral allowed for micro loans.
There can be no prepayment penalty, while all entities have to permit the borrowers to repay weekly, fortnightly or monthly instalments as per their choice.
Alignment of pricing guidelines for NBFC-MFIs with guidelines for NBFCs.
Introduction of a standard simplified fact sheet on pricing of microfinance loans for better transparency.
Display of minimum, maximum and average interest rates charged on microfinance loans on the websites of regulated entities.
Microfinance is a form of financial service which provides small loans and other financial services to poor and low-income households.
MFIs are financial companies that provide small loans to people who do not have any access to banking facilities.
In India, all loans that are below Rs. 1 lakh can be considered as microloans.
The difference between an NBFC-MFI and other NBFC is that while other NBFCs can operate at a very high level, MFIs cater to only the smaller level of social strata, with need of smaller amounts as loans.
Part of: GS Prelims and GS-III – Defence and Security
In news
The Indian Army has issued a Request For Information (RFI), for the procurement of 1,750 Futuristic Infantry Combat Vehicles (FICVs) to replace the Russian-origin infantry vehicles in service.
This is the Army’s third attempt for the procurement of a new infantry vehicle.
Early this month, an RFI was also issued for the procurement of 1770 Future Ready Combat Vehicles (FRCV) for the procurement of the next generation Main Battle Tank with planned induction from 2030.
About the RFI
A three-stage induction model has been proposed by the Army and Indian vendors can collaborate with Foreign Original Equipment Manufacturers (OEMs) to supply FICVs within two years of the contract at the rate of 75-100 vehicles per year,
According to the RFI, the FICVs would be employed for: cross-country operations in:
Plain and desert terrain along the Western borders and high altitudes, up to 5,000 m
Mountain terrain along the northern borders in eastern Ladakh,
Central India
North Sikkim.
They would replace the 1980s vintage Russian-origin BMP-2.
The main operational tasks that would be performed by the FICV include destroying:
enemy tanks
armoured personnel carriers
combat vehicles
low-flying helicopters
other ground-based weapon platforms and positions.
Part of: GS Prelims and GS -II – International relations
In news
Recently, the 60th anniversary of the Antarctic Treaty was celebrated.
The Antarctic treaty remains the only example of a single treaty that governs a whole continent.
It is also the foundation of a rules-based international order for a continent without a permanent population.
Antarctica is defined as all of the land and ice shelves south of 60°S latitude.
About the Antarctic Treaty
The Antarctic Treaty was signed between 12 countries in Washington on 1st December 1959 for making the Antarctic Continent a demilitarized zone to be preserved for scientific research only.
The twelve original signatories: Argentina, Australia, Belgium, Chile, France, Japan, New Zealand, Norway, South Africa, the Union of Soviet Socialist Republics, the UK and the US.
India became a member of this treaty in 1983.
Headquarters: Buenos Aires, Argentina.
Major Provisions:
Promoting the freedom of scientific research.
Countries can use the continent only for peaceful purposes.
Prohibition of military activities, nuclear tests and the disposal of radioactive waste.
Neutralising territorial sovereignty, this means a limit was placed on making any new claim or enlargement of an existing claim.
It put a freeze on any disputes between claimants over their territories on the continent.
It is a scientific research and exploration program under the National Centre for Antarctic and Ocean Research (NCPOR).
It started in 1981 when the first Indian expedition to Antarctica was made.
Dakshin Gangotri: First Indian scientific research base station established in Antarctica
Maitri: India’s second permanent research station in Antarctica. It is situated on the rocky mountainous region called Schirmacher Oasis. India also built a freshwater lake around Maitri known as Lake Priyadarshini.
Bharti: India’s latest research station operation since 2012. It is India’s first committed research facility.
Sagar Nidhi: In 2008, India commissioned the Sagar Nidhi, for research. An ice-class vessel, it can cut through the thin ice of 40 cm depth and is the first Indian vessel to navigate Antarctic waters.
Part of: GS Prelims and GS III – International Relations
In news
Recently, the Union Minister for Labour and Employment has said that India is making collective efforts to reduce gender gaps in labour force participation.
He was delivering the Ministerial Address on Declaration and Employment Working Group Priorities at G20 Labour and Employment Ministers’ Meeting.
The Employment Working Group deliberated upon key issues, including women employment, social security and remote working.
Initiatives Highlighted by India
Educational and Skilling Efforts:
India is strengthening its educational and skilling efforts to ensure quality education from preschool to senior secondary stage through national Educational Policy, 2020.
National Skill Development Mission: Aims to create convergence across sectors and States in terms of skill training activities.
Pradhan Mantri Kaushal Vikas Yojana: Enables the youth to take up industry related skill training to assist them in securing better opportunities.
Digital educational content has been made available on various e-learning platforms like DIKSHA, SWAYAM.
Aatmanirbhar Bharat Rozgar Yojana: The government is paying up to 24% of wages towards EPF contributions for new employees as well as those who lost their jobs in the pandemic and are being re-employed.
New Code on Wages, 2019: India will reduce gender-based discrimination in wages, recruitment and conditions of employment.
Pradhan Mantri Mudra Yojana: It provides financial support to women entrepreneurs to start small enterprises. There are around 70% of women in this scheme.
The G20 Roadmap Towards and Beyond the Brisbane Target has been set as
Increasing the quantity and quality of women’s employment.
Ensuring equal opportunities and achieving better outcomes in the labour market.
Promoting a more even distribution of women and men across sectors and occupations.
Tackling the gender pay gap.
Promoting a more balanced distribution of paid and unpaid work between women and men.
Addressing discrimination and gender stereotypes in the labour market.
About G20
It is an informal group of 19 countries and the European Union, with representatives of the International Monetary Fund and the World Bank.
Members: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, United States, and the European Union.
Miscellaneous
Delta plus variant
Union Health ministry has categorised the Delta plus variant (B.1.617.2.1) as a variant of concern.
Like Delta it has mutation in the spike protein region of the RNA virus making it more Transmissible.
WHO classifies a variant as one of concern when it is associated with:
an increase in transmissibility
increase in virulence or change in clinical disease presentation
decrease in the effectiveness of Public Health and social measures or there is decrease in availability of Diagnostics, vaccines and therapeutics.
(Mains Focus)
POLITY
Topic:
GS-2: Elections
GS-2: Effect of policies and politics of developed and developing countries on India’s interests.
Context: Ranked choice voting made its debut in New York City’s mayoral polls.
What is Ranked Choice Voting?
The system is based on a simple premise: Democracy works better if people aren’t forced to make an all-or-nothing choice with their vote.
Rather than pick just one candidate, voters in this system get to rank several in order of preference.
Popular overseas: It has also been used by Australia, Ireland and Malta since the early 20th century. Northern Ireland, New Zealand and Scotland have all adopted it as well.
The Oscars have also been using it since 2009 for its Best Picture category
How does ranked choice voting work?
In New York City’s version, voters get to rank up to five candidates, from first to last, on their ballot.
If someone gets 50% plus one after all the first-choice votes are counted, then the election is over and that candidate wins.
But if no one gets 50% plus one, it’s on to Round 2.
The person with the lowest number of first-place votes is eliminated, and that candidate’s voters’ second choices get redistributed as votes for other candidates.
This reallocation of votes goes on until someone reaches 50% plus one.
Merits of this system
People’s Voice Counted: Even if a voter’s top choice doesn’t have enough support to win, their rankings of other candidates still play a role in determining the victor.
More moderate candidates: It’s tough for someone to get elected through this system without broad support. In a traditional election, it’s possible for someone with fringe political views to win even if they are deeply disliked by a majority of voters.
Less negative campaigning. The argument goes that candidates need a majority of voters to like them (at least more than the next person) and to cater to wider group, candidates mellow down their polarising nature of campaigning.
Possibility of increased voter turnout: People can feel good about casting their vote. Instead of holding their nose for that one choice they get, voters can express at least a first choice for the person they really like.
Demerits of ranked-choice voting:
It is Complicated: It requires voters to do a lot more research. It also makes races less predictable.
Some argue it’s less democratic because it goes against the idea of one person, one vote.
Transparency and trust are also potential problems. Under the modern ranked choice system, the process of redistributing votes is done by computer. Outside groups will have a harder time evaluating whether the software sorted the ranked votes accurately.
Lots of people don’t fill out all the choices: It is difficult to know the true will of a majority of the people if everyone isn’t filling out all the choices
It could encourage horse-trading. Ranked-choice voting could open the door for candidates to make deals with one another about who their voters should go for as a second choice.
It might not necessarily reduce negative campaigning: Much of the negative campaigning is done by outside groups, and nothing in ranked-choice voting stops those entities from continuing to do so.
Connecting the dots:
Proportional Representation System in Rajya Sabha elections
Context: Chief of Defence Staff General Bipin Rawat held a meeting with the Vice Chiefs of the armed forces and government representatives from multiple ministries and proposed the model of the integrated theatre commands — both within the Services and outside, as it involves paramilitary forces as well.
Present Structure of our armed forces
As of now, the three forces have 17 commands between Army, Navy & Airforce
Even if these commands operate in the same region, they are not co-located, and their areas of operational responsibility are not necessarily the same.
Army
Seven commands
Northern, Eastern, Southern, Western, Central, Southwestern and Army Training Command (ARTRAC).
Navy
Seven commands
Western, Eastern, Southern, Southwestern, Central, Training, and Maintenance commands.
Air Force
Three commands
Western, Eastern and Southern, of which Southern is largely about training.
Andaman and Nicobar Command
It is tri-Service command
It is headed by rotation by officers from the three Services
Strategic Force Command,
It is tri-Service command
It is responsible for India’s nuclear assets.
What are integrated theatre commands?
In the simplest words, it is a unified command under which all the resources of the Army, the Navy and the Air Force are pooled, depending on the threat perception.
The commands could be geographical — like looking at a border with a particular country — or thematic, like a command for all maritime threats.
Theatre commands enhances jointness among the forces, and also reduces duplication of resources.
Several nations in the world have theatre commands, including the United States and China. The Andaman & Nicobar Command in India is an example of theatre command.
Is theatre commands a new idea?
The idea of creating an integrated tri-Services command in India is not new — it had been recommended at various levels after the Kargil conflict.
After Gen Rawat was appointed Chief of Defence Staff in January 2020, he held discussions with Vice Chiefs of the forces to come up with ideas of what these commands could look like.
In early 2020, Gen Rawat had suggested that the first of these commands, the Air Defence Command, could come up by the end of 2020. However, the process has been delayed due to multiple factors, including the Covid-19 pandemic.
What is the proposal under discussion?
A model with four to five integrated tri-Services theatre commands is under discussion, with each command headed by a three-star officer.
This officer, the theatre commander, will report to the Chiefs of Staff Committee (COSC), which, includes the three Service chiefs, and is headed by the CDS as its permanent chairman.
This brings in a major change — the Service chiefs currently have all the operational control over their forces; operational powers will now move to the COSC.
Each of these commands will have the needed assets from all the three forces. Operational control over all of those assets, regardless of the force, will lie with the commander of that theatre.
The proposed commands are:
Maritime Theatre Command, which will take care of all the maritime security needs of the country on both the eastern and the western seaboards, and will include air strike assets and amphibian forces of the Army.
Air Defence Command, which will be mandated with air defence across the country and beyond. The fighter jets will have reconnaissance and surveillance assets as well.
Two or three land-based commands are proposed. If there are two commands, there will be one each for India’s borders with China and Pakistan.
There is also a proposal to have another command looking at India’s borders with Pakistan and China in Jammu and Kashmir, and Ladakh, given the unique territory and security needs of the country in that region.
Functional tri-Services commands: Apart from these theatre commands, the following functional commands are also mooted
Logistics Command, which will have the logistics of all the Services under one person.
Training and Doctrine Command, so that all Services work under a common doctrine and have some basic common training.
What will be the role of the Services, if not operational?
As of now, the Services have to speak to each other in times of need and urgency to request their assets to conduct a particular operation.
The presence of Theatre commander would leave the Service chiefs with no direct control over their assets operationally.
This does not mean the roles of Chiefs will be made redundant. Now they will have the core tasks to Raise, Train and Sustain their respective forces.
Also, as each chief will be a member of the COSC, and an expert of his/her domain, his or her inputs will be necessary for all operational decisions.
Is everybody happy with the proposed idea?
While the Army and the Navy are on board with the proposal, the Air Force has certain reservations.
One, the Air Force does not want the Air Force chief to lose operational control of Air assets.
Two, the Air Force is concerned that all of its assets might be divided within these integrated theatres.
All such concerns need to be addressed before such a significant transformation of the defence set-up takes place.
