The Food Safety and Standard Authority of India (FSSAI) released the National Milk Sample Safety Quality Survey.
Milk samples from Telangana, followed by Madhya Pradesh and Kerala, showed the highest number of cases of adulteration.
In terms of safety parameters, 10.4% of the total processed milk samples (nearly 2,600) failed to comply with the FSSAI norm as contaminants like aflatoxin-M1 were found.In case of raw milk, non-compliance was at an even higher rate of 47% of the total samples of 3,825.
In terms of quality, 7% of the total sample of processed milk did not comply with quality parameters because the presence of contaminants such as fats, Maltodextrin and sugar were above permissible limits.
Problem of Aflatoxin-M1 is more dominant in processed milk than raw milk.
Aflatoxin M1 is a chemical compound which contaminate plant and plant products. IT comes in the milk through feed and fodder that are currently not regulated in the country.
In large doses, aflatoxins can be life threatening, usually through damage to liver.
Do You Know?
India is the world’s largest producer of milk.
The total estimated milk production in the country was 176.35 million tonnes during 2017-18.
Venezuela wins seat on UN Rights Council
Part of: GS Prelims and GS Mains II–International Affairs
In News
Venezuela won a contested election for a seat on the UN Human Rights Council despite a campaign by over 50 organisations and many countries opposed to Nicolas Maduro’s government and its rights record.
For the two Latin American seats – Brazil topped the ballot with 153 votes, followed by Venezuela with 105 votes
About UNHRC
It was founded in 2006. It replaced the former United Nations Commission on Human Rights (UNCHR) that had been strongly criticised for allowing countries with poor human rights records to be members.
The Council is made of 47 Member States, which are elected by the UN General Assembly. The Council’s Membership is based on equitable geographical distribution.
Members of the Council serve for a period of three years and are not eligible for immediate re-election after serving two consecutive terms.
In June 2018, the United States announced its withdrawal from the United Nations Human Rights Council (UNHRC) terming it “hypocritical and self-serving.”
India had previously been elected to the UNHRC for the 2011-2014 and 2014-2017 terms.
Vehicle registrations fell 12.9% in September
Part of: GS Prelims and Mains GS-III – Economy
In News
Reflecting continued weakness in consumer sentiment, overall vehicle registrations in September 2019 fell 12.9% compared to the same period last year
This is as per data obtained from the Federation of Automobile Dealers Associations of India (FADA) with the help ofVahan
About VAHAN
It is a digital national vehicle registry portal
Vahan intends to collate all the information available with road transport authorities for easy access by both citizens and regulators.
Vahan allows access to all details related to vehicles such as registration number, chassis/engine number, body/fuel type, colour, manufacturer and model and provides various online services to citizens.
Driving Licence and related data are automated through a separate application called ‘Sarathi’.
Significance of VAHAN
Vahan has been designed to capture all the information mandated by the Central Motor Vehicle Act 1988 as well as State Motor Vehicle Rules.
Banks, which may have given out loans for vehicle purchases, will also have access to the National/State Registry to track the status of vehicles under lien.
Merchant discount rate (MDR)
Part of: GS Prelims and GS Mains III – Economy
In News
The Union government said banks or system providers will not impose charges or merchant discount rate (MDR) on customers as well as merchants on digital payments made to establishments having turnover in excess of ₹50 crore from November 1.
MDR is a fee charged from a merchant by a bank for accepting payments from customers through credit and debit cards in their establishments
Amendments to this effect have been made in the Income Tax Act as well as in the Payment and Settlement Systems Act 2007.
Waste to Wealth: Cooking oil-to-biodiesel
Part of: GS Prelims and GS Mains III –Environment Conservation
In News
Zomato and biodiesel manufacturer BioD Energy have inked a partnership to collect used cooking oil from restaurants around the country so that it could be converted into biodiesel, which would then be sold to oil marketing companies to be blended with regular diesel
According to FSSAI regulations, the maximum permissible limits for Total Polar Compounds (TPC) have been set at 25%, beyond which the cooking oil is unsafe for consumption.
Reducing the re-use of cooking oil in the food industry will have positive public health outcomes and also reduces import demand of crude oil
The deal assumes significance in the light of government’s Repurpose Cooking Oil (RUCO)initiative
About RUCO
It was launched by The Food Safety and Standards Authority of India (FSSAI) in Feb 2019 to collect and convert used cooking oil into bio-fuel.
As many as 64 companies in 101 locations across the country have been identified for the purpose by FSSAI. By 2020, it should be possible to recover about 220 crore litres of used cooking oil for conversion into bio-fuel.
(MAINS FOCUS)
FOREIGN POLICY
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, Indian Diaspora.
Pakistan continues to be on the Grey List of FATF
Context:
Pakistan continues to be on the Grey List of the international terror financing watchdog Financial Action Task Force. The decision of FATF was taken after the completion of its five-day plenary session in Paris.
Pakistan has been warned of action for its failure to combat money laundering and terror financing.
If Pakistan continues with the ‘Grey List’ or is put in the ‘Dark Grey’ list, it would be very difficult for the country to get financial aid from the IMF, the World Bank and the European Union
This will benefit India in many ways, such as:
Pakistan will be put under closer scrutiny immediately to curb terror financing.
Reduced Pakistan funded terrorist attacks and infiltrations such as Pulwama and Mumbai attacks.
Economic benefits to India as FATF has increased the cost of doing business with Pakistan which will attract less FDI now.
Enhanced image of India in international forums as Pakistan will face an international boycott.
Pakistan’s already fragile economy will have a powerful blow which will be in India’s favour in international trade.
What next?
In an assessment Pakistan has failed to meet 22 of the 27 targets set by it.
If it does not comply with the FATF’s demands fully by February 2020, however, it risks ending up in the company of Iran and North Korea on its black list, which could result in its financial isolation.
The Financial Action Task Force :
FATF stands for The Financial Action Task Force. It was established in July 1989 by a Group of Seven (G-7) Summit in Paris, initially to examine and develop measures to combat money laundering.
The FATF Secretariat is housed at the OECD headquarters in Paris.
India and the Financial Action Task Force (FATF):
India became a member of the Financial Action Task Force (FATF) in 2010.
It will help India to build the capacity to fight terrorism and trace terrorist money and help to successfully investigate and prosecute money laundering and terrorist financing offences.
India will benefit from securing a more transparent and stable financial system by ensuring that financial institutions are not vulnerable to infiltration or abuse by organized crime groups.
In recent past, Pakistan had asked for India’s removal from the group, citing bias and motivated action, but that demand was rejected.
China and other allies:
It is no coincidence that Pakistan’s all-weather ally China is the current chair of the FATF. While support from Turkey and Malaysia helped block the move — the charter states that three votes are mandatory for a country to avoid being blacklisted— it was not enough to avoid a stern warning.
Conclusion:
There is greater awareness now of how Pakistan has diverted aid for the war on terror towards funding terror.
Pakistan must abandon terror as an instrument of State policy.
Connecting the dots:
There is greater awareness now of how Pakistan has diverted aid for the war on terror towards funding terror. Analyse
ECONOMY
TOPIC:General Studies 3:
Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Non-Performing Asset
Context:
The financial stability report released by the Reserve Bank of India has warned that the gross non-performing assets (GNPAs) of scheduled commercial banks in the country could rise from 11.6% in March 2018 to 12.2% in March 2019, which would be the highest level of bad debt in almost two decades.
What is NPA?
NPA in terms of RBI regulations result out of non-payment of interest for a period of 90 days or non-payment of principle amount for 90 days or more. So beyond that point, it is called Non-Performing Asset.
The loan is taken by the company on its assets from the bank. When the asset is not performing because they become doubtful and NPAs from doubtful become bad loans.
Background:
The problem name NPA is not of recent origin. Few years back, India suffered from a huge infrastructure gap and the banking sector was encouraged to get themselves into a lending spree for companies willing to undertake various projects.
Public Sector Banks were actually pushed to provide loans for projects that were floated largely by the private sector.
The following have caused distress in the banks’ assets and have played part in the mounting NPAs –
Prolonged downturn in the world economy,
Falling commodity prices,
Lack of due diligence and adherence to rules
Complex workings of the bureaucracy,
Typical bureaucratic red tape,
Long delays and gestation periods of several infrastructure projects,
Delays in land acquisition and
Politically inspired agitations
Can’t collateral be used to write off loans?
When the banks give loans, they take something from the entity taking it as collateral for that loan. Lot of people give collaterals but in case of large projects, it is not possible to give collaterals. In such cases, the land purchase, the building purchase, the plant machines, the debtors and inventory are mortgaged to the bank.
These assets are available but if they are able to produce enough to really repay to the bank remains doubtful.
How NPAs arose?
After 2008, there was international financial crisis. The prices have fallen significantly in the international market. In last two years the commodity market is very bad for example, the Sugar industry and steel industry. Power sector was not operating properly. Halfway through the plants being operational, the banks stopped giving them money due to policy paralysis.
People had extended their business beyond their means and higher interest was creating more problems
Had the financial planning and financial management not compromised while giving the loans, the issue wouldn’t have been this grave. In certain cases, the money has been diverted by entrepreneurs, they did not bring in promoters, did over invoicing of expenditure and took out money from that. So all kinds of speculations are there which led to increase in NPAs.
Five-pronged plan of the Sunil Mehta-panel:Project Sashakt
An independent asset management company (AMC) and alternative investment fund-led resolution approach to deal with NPA cases of more than Rs 500 crore
An asset trading platform for both performing and non-performing assets
A plan for also dealing with bad loans up to Rs 50 crore – for very small loans, banks will set up verticals and departments to deal specifically on a template basis like the deadlines, the timeframe for it to be resolved in 60 days, and the resolution will be carried out on a basis which will be defined. Banks will have to follow a predefined manner of putting forth resolution plans and work with people with specialisations to deal with it.
For loans between rs 50 crore and rs 500 crore, the committee called for a bank-led resolution approach, with the resolution being achieved in 180 days. The resolution plan has to be approved by lenders holding at least 66 per cent of the debt
For the resolution of SMEs, the committee suggested the setting up of a steering committee by banks for formulating and validating the schemes, with a provision for additional funds. Stating that the resolution should be complete within 90 days, the committee suggested that the resolution of these assets be under a single bank’s control, with the bank having the liberty to customise it.
Criticisms of Project sashakth:
Disfavours the idea of setting up a “bad bank”
The resolution route is also applicable to larger assets already before the National Company Law Tribunal (NCLT) and any other asset whose resolution is still pending.
Way forward:
Government will have to do mix and match of various things. No single solution for all the problems. The solution has to be derived on case to case basis.
The government is thinking of setting up committees for this purpose. There can be learned people appointed in each and every case who know their industry very well.
Whether government should run the business is also a big issue. It makes sense for the government to convert part of the loan into equity and take majority ownership possible.
The banks will be able to take over the management and revive the company. It is important to do the financial restructuring.
There are many who get repeated in the defaulters list. So some long term solution is required. They can’t be allowed to benefit on their own fault. There should be certain benchmark on the performance. If they are not able to perform, then entire debt can be converted into equity or part of the debt can be waived and bring in other promoters.
Connecting the dots:
Serious corporate governance issues faced by public sector banks, which to a large extent also contributed to the lax lending practices that are at the core of the NPA crisis. Examine.
(TEST YOUR KNOWLEDGE)
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Q.1)Consider the following statements about UN Human Rights Council (UNHRC)
It was established in 2006 whose members are elected by the UN General Assembly for a three-year period
United States of America withdrew its membership from the organisation in 2018 and Iceland was elected to replace the vacancy left by the United States
India is currently serving as the chair of the Council
Which of the statement(s) given above is/are correct?
1 and 2 only
2 only
2 and 3 only
1,2 and 3
Q.2)Consider the following statements
NITI Aayog releases the National Milk Sample Safety Quality Survey.
Milk samples from Telangana, followed by Madhya Pradesh and Kerala, showed the highest number of cases of adulteration.
Which of the statement(s) given above is/are correct?
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Q.3)Consider the following statements about VAHAN portal
Vahan intends to collate all the information available with road transport authorities for easy access by both citizens and regulators.
Banks, which may have given out loans for vehicle purchases, will also have access to the National/State Registry to track the status of vehicles under lien.
Which of the statement(s) given above is/are correct?
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Q.4)Repurpose Cooking Oil (RUCO) initiativeis being implemented by which body /ministry?
Ministry of Oil & Petroleum
NITI Aayog
Food Safety and Standards Authority of India
None of the above
Q.5) Which one of the following best describes the term “Merchant Discount Rate” sometimes seen in news?
The incentive given by a bank to a merchant for accepting payments through debit cards pertaining to that bank.
The amount paid back by banks to their customers when they use debit cards for financial transactions for purchasing goods or services.
The charge to a merchant by a bank for accepting payments from his customers through the bank’s debit cards.
The incentive given by the Government to merchants for promoting digital payments by their customers through Point of Sale (PoS) machines and debit cards.
