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Prelims 2018: Controversies, Solution, Cutoff & Strategy for 2019 [Video]

When previous years’ toppers admit that they would have been weeded out had they attempted the prelims in 2018, you are privy to the apocalyptic nature of UPSC’s wrath. Prelims 2018 has been a watershed on more than one count. It has opened the pandora’s box with respect to ‘controversial questions’, ‘trend analysis’ and more. CD’s research team has burnt midnightoil to bring to you the most comprehensive scrutiny of prelims 2018 and the best strategy for the next attempt.

STORY - Electoral Reforms In India

[op-ed snap] Polls Are Best Kept Apart

Note4students

Mains Paper 2: Polity | Salient features of the Representation of People’s Act

From UPSC perspective, the following things are important:

Prelims level: Basic Structure Doctrine, EMS Nachiappan Committee on Simultaneous Elections, Standing Committee,  Representation of Peoples’ Act 1951

Mains level: The editorial highlights the unconstitutionality of the demand of Simultaneous Elections


Context

  1. PM has mooted the idea of holding simultaneous polls in the country.
  2. The step may appear to be purely reformist but in reality, it’s an unconstitutional measure and should not be pushed down the throats of people.

Misconceptions about the ease of Amendment for Simultaneous Elections

  1. There is a misconception that an amendment to the Representation of Peoples’s Act 1951 is all that is needed for holding simultaneous polls to the Lok Sabha and the state assemblies.
  2. If the Law Ministry were to attempt such an endeavour, it will realise the hollowness of the concept.

Basic Structure Doctrine at risk

  1. Apart from the basic structure, the federal structure of the polity — itself a part of the basic structure — will collapse if an amendment to the Representation of People’s Act is approved by Parliament.
  2. The Election Commission agrees to undertake the huge exercise but the agency cannot hold elections in even three states without dividing the process into as many as seven phases

Report of the Standing Committee of Parliament, headed by E M S Nachiappan

  1. Holding simultaneous elections may not be feasible in 2016 or even in a decade.
  2. The committee, however, expressed confidence that a solution will be found to reduce the frequency of elections and relieve the people and government machinery from tedium of frequent polls.
  3. This is important for India if it is to compete with other nations in its developmental agenda.
  4. However, this committee did not touch issues pertaining to the basic structure of the Constitution.

The Way Forward: Presidents Call on the Issue

  1. President Kovind recently said that frequent elections not only impose a burden on human resources but also impede the development process due to the promulgation of Model Code of Conduct.
  2. He called for a sustained debate is required on the subject of simultaneous elections and all political parties need to arrive at a consensus on this issue.
STORY - NPA Crisis

[op-ed snap] The government needs to handle public sector banks with care

Note4students

Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: PCA by RBI, Recapitalization Plan, Insolvency and Bankruptcy Code

Mains level: The editorial discusses the difficulties in the operations of PSU Banks thereby creating NPAs


News

Low Confidence in the working of PSU banks

  1. PSU banks are grappling with a high level of bad loans, and a number of them have been put under RBI’s prompt corrective action and are not in a position to lend.
  2. In the March quarter, PSU banks booked losses in excess of Rs 62,000 crore and the total gross non-performing assets (NPAs) stood at about Rs 9 trillion.
  3. Although the government is in the process of recapitalizing state-run banks, it is likely that the current Rs 2.11 trillion PSU bank recapitalization plan will not be sufficient to put the PSU banks back on track.
  4. Since PSU banks own about 70% of banking assets, their inability to lend will have a direct impact on economic growth.

Fear of Investigation amongst CEOs

  1. Four out of 21 PSU banks have not appointed replacements for chief executive officers (CEOs) and top executives in nine more banks are expected to leave in the coming months.
  2. However, it is likely that the government will find it difficult to attract talent due to the fear of investigative agencies among bankers.
  3. A number of present and former senior executives are under investigation for past transactions ex. Chanda Kochar
  4. The government must ensure that investigations don’t become a witch-hunt, and that the issue is handled with utmost care.

Problem of Valuation of Stressed Assets and Capital Infusion Plan

  1. The government is now mulling the formation of asset reconstruction companies for faster resolution of bad loans and has constituted a committee to make recommendations in this regard.
  2. But the basic problem will be valuation of stressed assets.
  3. The ARC will need a significant amount of capital, which the government is not in a position to provide.
  4. In fact, now that India has the Insolvency and Bankruptcy Code in place, there is no need for the government to form an ARC. Banks should be able to resolve bad assets under this framework.

Lacking Governance reforms for PSU Banks

  1. The government has refrained from micromanaging PSU banks, but this in itself will not solve the problem.
  2. A situation where banks run without a CEO should never arise.
  3. PSU banks should be in a position to attract talent by offering competitive compensation at every level to be able to improve their operation and risk management systems.
  4. Only when banks are run by professionals will they be in a position to fund India’s growth in the long run and create value for all stakeholders, including the taxpayer.

The Way Forward

  1. At a broader level there should be clarity on the future of PSU banks.
  2. In fact, some of the banking reforms will only work if a clear roadmap is defined.
  3. For instance, if the government believes that a few banks should focus on under-banked areas, some financial support may be warranted.
  4. Perhaps banks should be allowed to focus on specific areas of strength so that they become more efficient over time and are not dependent on budgetary support for growth.
  5. It will be difficult to sustain higher growth without a strong banking system
STORY - Innovation Ecosystem in India

[pib] 3,000 Additional Atal Tinkering Labs Announced

Note4Students

From UPSC perspective, the following things are important:

Prelims level: Atal Innovation Mission, Atal Tinkering Labs

Mains level: Measures being undertaken to promote innovation in India


News

Expanding the reach of ATLs 

  1. NITI Aayog’s Atal Innovation Mission (AIM) has selected 3,000 additional schools for the establishment of Atal Tinkering Labs (ATLs), bringing the total number of ATL schools to 5,441.
  2. The selected schools shall receive a grant of Rs 20 lakh spread over the next five years to establish Atal Tinkering Labs for nurturing innovation and entrepreneurial spirit among secondary school children across India.
  3. ATLs will soon be established in every district of India, seeking to enable an innovation ecosystem, which will facilitate transformational change in technological innovation and pedagogy.
  4. These additional 3,000 schools will greatly expand the reach of the ATL program, increasing the number of children exposed to tinkering and innovation and providing access to the young innovators of India to technologies like 3D Printing, Robotics, IoT and microprocessors.

 What’s special in new addition?

  1. These additional schools will facilitate the creation of over One Million Neoteric Child Innovators by 2020.
  2. ATLs will function as innovation hubs for these student innovators to explore solutions to unique local problems which they come across in their everyday lives

Back2Basics 

Atal Innovation Mission (AIM)

  1. Atal Innovation Mission (AIM) including Self-Employment and Talent Utilization (SETU) is Government of India’s endeavour to promote a culture of innovation and entrepreneurship
  2. Its objective is to serve as a platform for promotion of world-class Innovation Hubs, Grand Challenges, Start-up businesses and other self-employment activities, particularly in technology driven areas
  3. The Atal Innovation Mission shall have two core functions:
  • Entrepreneurship promotion through Self-Employment and Talent Utilization, wherein innovators would be supported and mentored to become successful entrepreneurs
  • Innovation promotion: to provide a platform where innovative ideas are generated

With a vision to ‘Cultivate one Million children in India as Neoteric Innovators’, Atal Innovation Mission is establishing Atal Tinkering Laboratories (ATLs) in schools across India

The objective of this scheme is to foster curiosity, creativity and imagination in young minds; and inculcate skills such as design mindset, computational thinking, adaptive learning, physical computing etc.

ATL is a workspace where young minds can give shape to their ideas through hands-on do-it-yourself mode, and learn innovation skills

STORY - Swachh Bharat Mission

[pib] Ten new Swachh Iconic Places launched under Swachh Bharat Mission

Note4Students

From UPSC perspective, the following things are important:

Prelims level: Try to recall iconic sites and their location in respective states

Mains level: Initiatives under SIP to improve urban infrastructure


News

Launching of Phase III of Swachh Iconic Places

  1. The third phase of SIP was today launched at Mana village which is situated close to the Badrinath temple in Uttarakhand.
  2. The village, which now becomes a Swachh Iconic Place, is visited by tourists and pilgrims as it houses places of mythological interest.

Ten new iconic sites have been taken up under Phase III

  • RaghavendraSwamy Temple (Kurnool, Andhra Pradesh);
  • Hazardwari Palace (Murshidabad, West Bengal);
  • Brahma Sarovar Temple (Kurukshetra, Haryana);
  • VidurKuti (Bijnor, Uttar Pradesh);
  • Mana village (Chamoli, Uttarakhand);
  • Pangong Lake (Leh-Ladakh, J&K);
  • Nagvasuki Temple (Allahabad, Uttar Pradesh);
  • ImaKeithal/market (Imphal, Manipur);
  • Sabarimala Temple (Kerala); and
  • Kanvashram (Uttarakhand)

These new sites have joined the 20 iconic places under Phase I & II where special Sanitation work is already underway

Phase I and II iconic sites have seen notable initiatives taken up like:

  • improved sewage infrastructure, installation of Sewage Treatment Plant (STP),
  • drainage facilities,
  • improved sanitation facilities,
  • water vending machines (Water ATMs),
  • Solid and Liquid Waste Management (SLWM) set-up,
  • structure restoration, roads maintenance, lighting arrangements, beautification of parks, better transport facilities in approach etc.

Back2Basics

Swachh Iconic Places (SIP)

  1. The project envisioned by the Prime Minister is being coordinated by Ministry of Drinking Water and Sanitation with the support of State governments and local administration
  2. SIP is a collaborative project with three other central Ministries: Ministry of Housing and Urban Affairs, M/o Culture, and M/o Tourism.
  3. It also involves local administrations in the concerned States and Public Sector and Private Companies as sponsoring partners.
  4. Launched in 2016, the Phase I iconic places are Ajmer Sharif Dargah, CST Mumbai, Golden Temple, Kamakhya Temple, Manikarnika Ghat, Meenakshi Temple, Shri Mata Vaishno Devi, Shree Jagannath Temple, The Taj Mahal and Tirupati Temple.
  5. Phase II of Swachh Iconic Places was launched in Nov 2017 and included Gangotri, Yamunotri, Mahakaleshwar Temple, Charminar, Convent and Church of St. Francis of Assisi, Kalady, Gommateswara, BaidyanathDham, Gaya Tirth and Somnath temple.
STORY - ISRO Missions and Discoveries

ISRO offers battery technology to firms

Note4students

Mains Paper 3: Science & Technology | Science and Technology- developments and their applications and effects in everyday life Achievements of Indians in science & technology; indigenization of technology and developing new technology

From UPSC perspective, the following things are important:

Prelims level: Lithium-ion battery

Mains level: Transfer of Lithium-ion know-how will help electric vehicle start ups under FAME India Scheme


News

Transfer of Lithium-ion know-how to help electric vehicle start ups

  1. An RFQ (request for quotation) issued by ISRO invites multiple qualified companies or start-ups to use its power storage technology to produce a range of Li-ion cells for many purposes, mainly EVs or electric vehicles.
  2. ISRO’s rocket sciences node Vikram Sarabhai Space Centre will transfer its in-house technology non-exclusively to each qualified production agency for a one-time fee of ₹1 crore.
  3. Currently, the batteries are imported mostly from China, South Korea and Taiwan.
  4. To drive the Indian EV dream of the coming decades, national think tank NITI Aayog has also earlier called for setting up local production

Back2Basics

FAME India Scheme

  1. Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India [FAME] scheme was started with effect from 1st April 2015
  2. It has the objective to support hybrid/electric vehicles market development and Manufacturing eco-system
  3. The scheme has 4 focus areas i.e. Technology development, Demand Creation, Pilot Projects and Charging Infrastructure
  4. The FAME India Scheme is aimed at incentivizing all vehicle segments i.e. 2 Wheeler, 3 Wheeler Auto, Passenger 4 Wheeler Vehicle, Light Commercial Vehicles and Buses
  5. The scheme covers Hybrid & Electric technologies like Mild Hybrid, Strong Hybrid, Plug-in Hybrid & Battery Electric Vehicles
STORY - Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

Pre-authorization must for nearly half of all treatments under NHPM

Note4students

Mains Paper 2: Governance | Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

From UPSC perspective, the following things are important:

Prelims level: Particulars of the Ayushman Bharat Programme

Mains level: Universal health coverage and associated Moral hazard


News

Ayushman Bharat operational details

  1. Pre-authorisation will be mandatory for 636 of the 1,350 packages – or 47 per cent of all treatments covered under the National Health Protection Mission (NHPM), including all packages for cardiology, ophthalmology and oncology.
  2. The NHPM will not cover conditions that do not require hospitalization, dental procedures, congenital physical problems, vaccinations and fertility-related procedures, and will also not cover treatment of a person who has attempted suicide.
  3. The document also lays down that for a claim ratio of up to 120 percent, states will not pay any additional premium.

Pre-authorisation is essential to keep a check on “moral hazard” procedures

  1. “Moral hazard” in health insurance parlance is the tendency of people who are insured to buy/be sold additional healthcare interventions, irrespective of their actual needs
  2. This leads to expenses that do not necessarily add to their own health or well being but bleeds the insurer
  3. For this procedures such as emergency consultation for acute colic, high fever, cuts, stitches, soft tissue injury, single-bone fracture plaster, nebulization for asthmatic attack, moderate dehydration, hypoglycaemia in a diabetic, dengue without complication, and food poisoning will be covered in the scheme only if the treatment is availed in a government hospital
  4. For some specified conditions, pre-authorisation will be required for hospitalization beyond 10 days

A penalty for Delay in Premium

  1. The penalty provisions are stiff for any delays on the part of the insurer or the state health agency (SHA) either in paying the premium or in processing claims or refunds to the state.
  2. If claim payment to the hospital is delayed beyond 15 days, insurers will have to pay an interest of 1 percent for every seven days of delay.
  3. If the premium refund is not made by the insurer to SHA within 30 days of the communication for the refund, there will be 1 percent interest for every week of delay.
  4. If the premium is not paid to the insurer by the SHA within six months of the commencement of the AB-NHPM, insurers will get an interest of 1 percent of the premium amount for every seven days’ delay.

Administration of the Scheme

  1. For the purpose of administration of the scheme, states have been divided into two categories.
  2. Category A states include Arunachal Pradesh, Goa, Himachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, NCT Delhi, Sikkim, Tripura, Uttarakhand, and six Union Territories: Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep and Puducherry.
  3. States in Category B are Andhra Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal.

Admin Cost Sharing

  1. In category A states, the administrative cost allowed is 10 percent if claim ratio less than 60 percent, 15 percent if claim ratio is between 60 percent and 70 percent and 20 percent if claim ratio is between 70 percent and 80 percent.
  2. In Category B states, administrative cost allowed will be 10 percent if claim ratio is less than 60 percent, 12 percent if claim ratio is between 60 percent and 70 percent, and 15 percent if claim ratio is between 70 percent and 85 percent
STORY - Capital Markets: Challenges and Developments

SEBI panel to study option of direct overseas listings

Note4students

Mains Paper 2: Polity | Statutory, regulatory & various quasi-judicial bodies

From UPSC perspective, the following things are important:

Prelims level: SEBI, GDR, ADR

Mains level: Market regulators and their powers


News

Companies can list abroad now only via depository receipts

  1. The Securities and Exchange Board of India (SEBI) has constituted an expert committee to examine the possibility of allowing unlisted Indian companies to directly list equity overseas while also allowing foreign companies to list directly on the Indian stock markets.
  2. Considering the evolution and internationalisation of the capital markets, it would be worthwhile to consider facilitating companies incorporated in India to directly list their equity share capital abroad and vice versa, SEBI said in a statement.
  3. Currently, Indian firms can only use the depository receipts route — American Depository Receipt (ADR) or Global Depository Receipt (GDR) — to list on overseas exchanges.
  4. For foreign companies wanting to list on Indian exchanges, the Indian Depository Receipt (IDR) is the only option currently.

Masala bonds, IDRs

  1. Companies incorporated in India can today list their debt securities on international exchanges (Masala bonds) but their equity share capital can be listed abroad only through the ADR/GDR route.
  2. Similarly, companies incorporated outside India can access the Indian capital markets only through the IDR route.

Back2Basics

Global Depository Receipts

  • Indian companies are allowed to raise equity capital in the international markets through the issue of GDR.
  • GDR are designated in USD / Euros or any other foreign currency.
  • The proceeds of GDR can be utilized for various purposes.

American Depository Receipts

  • These are like shares issued to US retail and institutional investors and are listed in NASDAQ/NYSE
  • They are entitled like share to bonus, stock split and dividend.
  • ADR route is taken as non-USA companies are NOT allowed to list on US stock exchanges by issuing shares