Part of: GS Prelims and GS- II – International relations
In news
The 1st meeting of the Joint Working Group in the field of Renewable Energy between India and the Kingdom of Bahrain was held recently.
Key takeaways
A Memorandum of Understanding between India and Bahrain was signed in July 2018 for promoting bilateral cooperation in the field of Renewable Energy.
Now, both sides have underscored the importance of renewable energy to meet climate change goals.
They presented the initiatives taken, progress made and future targets set by their respective governments and opportunities available in this sector.
They agreed on sharing experience, expertise, and best practices.
Both sides agreed to forge deeper engagement in capacity building and focused cooperation between concerned agencies and the private sector of the two countries in this sector, particularly in the field of solar, wind, and clean hydrogen.
India Post, Mumbai Region, in collaboration with the Tata Memorial Centre, Mumbai released a Special Cover on World Cancer Day (February 4).
Important value additions
World Cancer Day
Objective: To save millions of preventable deaths each year through raising awareness and by pressing governments to take action against Cancer.
Organized by: Union for International Cancer Control (UICC), an International NGO that exists to help the global health community accelerate the fight against cancer.
NGO was founded in 1933 and is based in Geneva, Switzerland.
Originof World Cancer Day: Paris Charter adopted at the World Summit Against Cancer for the New Millenium in Paris in 2000.
Theme: In 2019, Union for International Cancer Control, launched a new 3-year campaign with the theme: “I Am and I Will.”
The campaign is an empowering call-to-action urging for personal commitment and represents the power of individual action taken now to impact the future.
Part of: GS Prelims and GS- II – Policies and Interventions
In news
The Ministry of Labour & Employment has appointed Shri S.N. Subrahmanyan, CEO and Managing Director, L&T Ltd, as the Chairman of the National Safety Council for three years.
Important value additions
National Safety Council
National Safety Council is a non-profit, self-financing apex body at the national level in India.
Objective: To generate, develop and sustain a voluntary movement on Safety, Health, and Environment (SHE) at the national level.
It is an autonomous body.
Set up by: Ministry of Labour and Employment in 1965.
It was registered as a Society under the Societies Registration Act, 1860 and subsequently, as a Public Trust under the Bombay Public Trust Act, 1950.
Part of: GS Prelims and GS- III – Defence and Security
In news
Hindustan Aeronautics Limited (HAL) and Mishra Dhatu Nigam Limited (MIDHANI) have signed a Memorandum of Understanding (MoU) for the development and production of composite raw materials during Aero India 2021 in Bengaluru
Key takeaways
This is the first time that such an MoU has been signed for composite raw materials.
Composites raw materials, mainly in the form of prepregs (carbon, aramid, glass types, etc) are used in platforms like Light Combat Aircraft (LCA), Advanced Light Helicopter (ALH), Light Combat Helicopter (LCH), and Light Utility Helicopter (LUH).
These are currently imported.
This is the major step forward in the area of composite materials.
The HAL is not only taking care of frontline aircraft production but also raw materials.
There is no equivalent proven Indian approved/qualified supplier for various types of prepregs for the aircraft applications.
This creates a dependency on foreign Original Equipment Manufacturers (OEMs).
Aligned with the “Atmanirbhar Bharat” initiative, these efforts shall help in developing and manufacturing such prepregs in India through collaboration.
The usage of composites in aerospace is going to continue and increase, particularly for fighter aircraft/helicopters because of its inherent advantages over metallic raw materials.
Part of: GS Prelims and GS- III – Intellectual Property
In news
KAPILA campaign was in news recently.
Important value additions
KAPILA
The Government launched a campaign namely Kalam Program for Intellectual Property Literacy and Awareness Campaign (KAPILA) for Intellectual Property Literacy and creating patent awareness on 15th October 2020.
Objectives:
creating awareness regarding Intellectual Property Rights (IPR) in Higher Education Institutions(HEIs),
enabling of IP protection of inventions originating from faculty and students of HEIs,
development of Credit Course on IPR,
training program on IPR for faculty and students of HEIs and
sensitization and development of a vibrant IP filing system.
So far, total of 46,556 users have been registered for KAPILA.
Context: On January 21, the Centre has extended the tenure of The Commission to Examine Sub-categorisation of Other Backward Classes (OBCs) headed by Justice G Rohini, former Chief Justice of Delhi High Court. The commission now has until July 31 to submit its report.
The sub-categorisation debate arises out of the perception that only a few affluent communities among the over 2,600 included in the Central List of OBCs have secured a major part of this 27% reservation.
The argument for sub-categorisation — or creating categories within OBCs for reservation — is that it would ensure “equitable distribution” of representation among all OBC communities.
Formation of Commission
To examine this inequitable enjoyment of benefits of reservation, the Rohini Commission was constituted on October 2, 2017.
At that time, it was given 12 weeks to submit its report, but has been given several extensions since, the latest one being the 10th.
The other member in the Commission is former journalist Jitendra Bajaj, director of the Centre for Policy Studies.
Before the Rohini Commission was set up, the Centre had granted constitutional status to the National Commission for Backward Classes (NCBC).
The Rohini Commission operates out of an office at Vigyan Bhawan Annexue and its expenses are borne by the NCBC. Until December 2020, over Rs 1.92 crore have been spent on the Commission including salary, consultant fee and other expenses.
What are the Commission’s terms of reference?
It was originally set up with three terms of reference:
To examine the extent of inequitable distribution of benefits of reservation among the castes or communities included in the broad category of OBCs with reference to such classes included in the Central List;
To work out the mechanism, criteria, norms and parameters in a scientific approach for sub-categorisation within such OBCs;
To take up the exercise of identifying the respective castes or communities or sub-castes or synonyms in the Central List of OBCs and classifying them into their respective sub-categories.
A fourth term of reference was added on January 22, 2020, when the Cabinet granted it an extension:
To study the various entries in the Central List of OBCs and recommend correction of any repetitions, ambiguities, inconsistencies and errors of spelling or transcription.
This was added following a letter to the government from the Commission on July 30, 2019 that said the Commission has noted several ambiguities in the list and these needs to be clarified before sub-categorising the central list.
What progress has it made so far?
In its letter to the government on July 30, 2019, the Commission wrote that it is ready with the draft report (on sub-categorisation).
It is widely understood that the report could have huge political consequences and face a judicial review.
Following the latest term of reference given (on January 22, 2020) to the Commission, it is studying the list of communities in the central list.
A hurdle for the Commission has been the absence of data for the population of various communities to compare with their representation in jobs and admissions.
The commission initially proposed all-India survey for an estimate of the caste-wise population of OBCs but later said that it has dropped the idea of undertaking such survey.
On August 31, 2018, then Home Minister had announced that in Census 2021, data of OBCs will also be collected, but since then the government has been silent on this, whereas groups of OBCs have been demanding enumeration of OBCs in the Census.
What is the extent of OBC recruitment in central jobs?
As per the report submitted to the NCBC by the Department of Personnel and Training on July 24, 2020, OBC representation is
16.51 % in group-A central government services
13.38 % in group-B
21.25 % in group-C (excluding safai karmacharis)
17.72 % in group-C (safai karmacharis).
This data was for only 42 ministries/departments of the central government.
It is reported that a number of posts reserved for OBCs were being filled by people of general category as OBC candidates were declared “NFS” (None Found Suitable). Home Minister has asked the NCBC to collect countrywide data on this and NCBC is yet to collect and process the data of the “NFS”.
The government is also contemplating revision of the income limit for the creamy layer for the OBCs.
What have its findings been so far?
In 2018, the Commission analysed the data of 1.3 lakh central jobs given under OBC quota over the preceding five years and OBC admissions to central higher education institutions, including universities, IITs, NITs, IIMs and AIIMS, over the preceding three years. The findings were:
97% of all jobs and educational seats have gone to just 25% of all sub-castes classified as OBCs;
24.95% of these jobs and seats have gone to just 10 OBC communities;
983 OBC communities — 37% of the total — have zero representation in jobs and educational institutions;
994 OBC sub-castes have a total representation of only 2.68% in recruitment and admissions.
ECONOMY/ GOVERNANCE
Topic:
GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment
GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Context: Micro-lending is in the news again for the wrong reasons – first is related to Assam and the second is related to Digital Micro Lending.
What is microfinance?
Microfinance is a basis of financial services for entrepreneurs and small businesses deficient in contact with banking and associated services.
The two key systems for the release of financial services to such customers include ‘relationship-based banking’ for individual entrepreneurs and small businesses along with ‘group-based models’ where several entrepreneurs come together to apply for loans and other services as a group.
The interest rates charged by microfinance institutes (MFIs) are lower than those charged by normal banks.
Usually, their area of operations of extending small loans are rural areas and among low-income people in urban areas.
The model had its genesis as a poverty alleviation tool, focused on economic and social upliftment of the marginalised sections through lending of small amounts of money without any collateral to women for income-generating activities
Lack of security and high operating costs are some of the major limitations faced by the banks while providing loans to poor people. These limitations led to the development of microfinance in India as an alternative to provide loans to the poor with an aim to create financial inclusion and equality.
MFIs act as supplements to Banks as they not only offer micro credit but they also provide other financial services like savings, insurance, remittance and non-financial services like individual counseling, training and support to start own business etc.
Salient Features of Microfinance
Borrowers are from the low income group
Loans are of small amount – micro loans
Short duration loans
Loans are offered without collaterals
High frequency of repayment
Loans are generally taken for income generation purpose
Microfinance in India
SEWA Cooperative Bank was initiated in 1974 in Ahmedabad, Gujarat, by Ela Bhatt which is now one of the first modern-day microfinance institutions of the country.
MFIs in India exist as NGOs (registered as societies or trusts), Section 25 companies and Non-Banking Financial Companies (NBFCs).
The National Bank for Agriculture and Rural Development (NABARD) offered financial services to the unbanked people, especially women and later decided to experiment with a very different model, which is now popularly known as Self-help Groups (SHGs).
Commercial Banks, Regional Rural Banks (RRBs), cooperative societies and other large lenders have played an important role in providing refinance facility to MFIs.
Banks have also leveraged the Self-Help Group (SHGs) channel to provide direct credit to group borrowers.
Do You Know?
MFI loan portfolio has reached Rs 2.31 lakh crore at the end of FY2020, touching the lives of 5.89 crore customers.
Some of the MFIs, that qualify certain criteria and are non-deposit taking entities, come under RBI wings for Non-Banking Financial Company (NBFC) Regulation and supervision. These “Last Mile Financiers” are known as NBFC MFI.
The objective of covering them under RBI was to make these NBFC MFIs healthy and accountable.
What is the issue of MFI in Assam?
Assam government passed a bill which barred micro-finance institutions (MFIs) from lending to vulnerable sections of society. It was a response to a backlash against MFIs.
A large number of borrowers working in tea plantations had taken loans from MFIs. RBI noted that the economic slowdown in tea plantations and anti-Citizenship (Amendment) Act disruptions led to rise in the delinquencies.
MFIs started sending collectors for recoveries to the borrowers, leading first to the backlash and then the political response in terms of the bill.
In 2010, the Andhra Pradesh government also passed similar legislation like the one in Assam against MFIs leading to a crisis in the industry.
Though the scale of lending is lesser in Assam and is unlikely to drive MFIs to a crisis, finance is not about scale alone but interconnectedness of the players.
What is the issue with Digital Micro-lending?
Digital lending platforms have mushroomed and there are criticisms of high interest rates, hidden charges, unacceptable recovery methods and misuse of data of borrowers.
RBI expressed caution against digital lending platforms and constituted a working group to study both regulated and unregulated digital lending so that an appropriate regulatory approach can be put in place.
Fintechs will soon be criticised for being Shylocks and loan sharks.Pre-2008 crisis, financiers were the cynosure of all eyes and post-crisis they were branded as devils of the game.
Way Ahead
In 1870s, a similar backlash emerged in Poona and Ahmednagar districts of the Bombay presidency. The agriculture boom in the early 1860s led farmers to take loans from moneylenders. As the boom went bust, farmers were unable to pay these loans. The moneylenders took away land placed as collateral, fuelling protests and riots.
Government responded by passing the Deccan Agricultural Relief Act in 1879 that barred the arrest of the agriculturist-debtor and saved his immovable property from attachment and sale, unless specifically pledged. However, this and other related legislations enacted did not have the desired impact.
Therefore, government of the day must learn from the previous incidents before passing laws that restrict the working of MFIs. One should go for an honest review of the entire issue by engaging with all the stakeholders involved in this sector.
Connecting the dots:
Challenges with MFI and need for Social Impact Monitoring: Click here
(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 KAPILA campaign is launched for which of the following?
Education
Agriculture
IPR
Outer Space
Q.2 The World Summit Against Cancer for the New Millenium where a charter was adopted and which marks Origin of World Cancer Day was held at which of the following?
Paris
Amsterdam
South Korea
India
Q.3Consider the following statements regarding National Safety Council
It is an autonomous body.
It is set up by the Ministry of Environment
Which of the above is or are correct?
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Q.4Which of the following are the sub-schemes under scheme under Rashtriya Yuva Sashaktikaran Karyakram (RYSK)?
Nehru Yuva Kendra Sangathan
National Youth Corps
National Programme for Youth and Adolescent Development
International Cooperation
Youth Hostels
Select the correct code:
1, 4 and 5 only
1, 2 and 4 only
1, 2, 3, 4 and 5
4 and 5 only
ANSWERS FOR 4th February 2021 TEST YOUR KNOWLEDGE (TYK)
1
D
2
D
3
D
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