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  • Infrastructure Investment Trusts (InvITs)

    The National Highway Authority of India’s first infrastructure investment trust has raised more than Rs 5,000 crore, informed the Ministry of Road Transport and Highways of India.

    What are InvITs?

    • InvITs are like a mutual fund, which enables direct investment of small amounts of money from possible individual/institutional investors in infrastructure to earn a small portion of the income as return.
    • They work like mutual funds or real estate investment trusts (REITs) in features.
    • They can be treated as the modified version of REITs designed to suit the specific circumstances of the infrastructure sector.

    How are they notified in India?

    • SEBI notified the Sebi (Infrastructure Investment Trusts) Regulations, 2014 on September 26, 2014, providing for registration and regulation of InvITs in India.
    • The objective of InvITs is to facilitate investment in the infrastructure sector.

    Their structure

    • InvITS are like mutual funds in structure. InvITs can be established as a trust and registered with Sebi.
    • An InvIT consists of four elements:
    1. Trustee: He inspects the performance of an InvIT is certified by Sebi and he cannot be an associate of the sponsor or manager.
    2. Sponsor(s): They are people who promote and refer to any organisation or a corporate entity with a capital of Rs 100 crore, which establishes the InvIT and is designated as such at the time of the application made to SEBI, and in case of PPP projects, base developer.
    3. Investment Manager: It is an entity or limited liability partnership (LLP) or organisation that supervises assets and investments of the InvIT and guarantees activities of the InvIT.
    4. Project Manager: It is the person who acts as the project manager and whose duty is to attain the execution of the project and in case of PPP projects.

     

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  • Iran has enriched over 210 kg of Uranium to 20%

    Iran’s atomic agency has said that its stockpile of 20% enriched uranium has reached over 210 kilograms, the latest defiant move ahead of upcoming nuclear talks with the West.

    What is Uranium Enrichment?

    • It is a process that is necessary to create an effective nuclear fuel out of mined uranium.
    • It involves increasing the percentage of uranium-235 which undergoes fission with thermal neutrons.
    • Nuclear fuel is mined from naturally occurring uranium ore deposits and then isolated through chemical reactions and separation processes.
    • These chemical processes used to separate the uranium from the ore are not to be confused with the physical and chemical processes used to enrich the uranium.

    Why is enrichment carried out?

    • Uranium found in nature consists largely of two isotopes, U-235 and U-238.
    • Natural uranium contains 0.7% of the U-235 isotope.
    • The remaining 99.3% is mostly the U-238 isotope which does not contribute directly to the fission process (though it does so indirectly by the formation of fissile isotopes of plutonium).
    • The production of energy in nuclear reactors is from the ‘fission’ or splitting of the U-235 atoms since it is the main fissile isotope of uranium.
    • Naturally occurring uranium does not have a high enough concentration of Uranium-235 at only about 0.72% with the remainder being Uranium-238.

     

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  • Centre cuts Excise Duty on Petrol and Diesel

    The Government has finally reduced fuel prices by slashing excise duties on petrol and diesel by ₹5 and ₹10 per litre respectively.

    What is Excise Duty?

    • Excise duty is a form of tax imposed on goods for their production, licensing and sale.
    • It is the opposite of Customs duty in sense that it applies to goods manufactured domestically in the country, while Customs is levied on those coming from outside of the country.
    • At the central level, excise duty earlier used to be levied as Central Excise Duty, Additional Excise Duty, etc.
    • Excise duty was levied on manufactured goods and levied at the time of removal of goods, while GST is levied on the supply of goods and services.

    Purview of excise duty

    • The GST introduction in July 2017 subsumed many types of excise duty.
    • Today, excise duty applies only on petroleum and liquor.
    • Alcohol does not come under the purview of GST as exclusion mandated by constitutional provision.
    • States levy taxes on alcohol according to the same practice as was prevalent before the rollout of GST.
    • After GST was introduced, excise duty was replaced by central GST because excise was levied by the central government.
    • The revenue generated from CGST goes to the central government.

    Types of excise duty in India

    Before GST, there were three kinds of excise duties in India.

    (1) Basic Excise Duty

    • Basic excise duty is also known as the Central Value Added Tax (CENVAT).
    • This category of excise duty was levied on goods that were classified under the first schedule of the Central Excise Tariff Act, 1985.
    • This duty applied on all goods except salt.

    (2) Additional Excise Duty

    • Additional excise duty was levied on goods of high importance, under the Additional Excise under Additional Duties of Excise (Goods of Special Importance) Act, 1957.
    • This duty was levied on some special category of goods.

    (3) Special Excise Duty

    • This type of excise duty was levied on special goods classified under the Second Schedule to the Central Excise Tariff Act, 1985.
    • Presently the central excise duty comprises of a Basic Excise Duty, Special Additional Excise Duty and Additional Excise Duty (Road and Infrastructure Cess) on auto fuels.

    Present taxation of Fuels

    • Currently, taxes on petroleum products are levied by both the Centre and the states.
    • While the Centre levies excise duty, states levy value-added tax (VAT).
    • For instance, VAT on petroleum products is as high as 40% in Maharashtra, contributing over ₹25,000 crores annually.
    • By being able to levy VAT on these products, the state governments have control over their revenues.
    • When a national GST subsumed central taxes such as excise duty and state levies like VAT on July 1, 2017, five petroleum goods – petrol, diesel, ATF, natural gas and crude oil – were kept out of its purview.

     

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  • Gujarat grants Parole to Prisoners as Diwali gift

    The Gujarat government has decided to grant 15-day parole to prisoners above 60 years of age and women prisoners, except those booked in serious offences, as a ‘Diwali gift’.

    What is Parole?

    • Furlough and parole envisage a short-term release from custody, both aimed as reformative steps towards prisoners.
    • Parole is granted to meet a “specific exigency” and cannot be claimed as a matter of right.
    • Both provisions are subject to the circumstances of the prisoner, such as jail behaviour, the gravity of offences, sentence period and public interest.

    How is it different from Furlough?

    • Furlough may be granted without any specific reason after a convict spends a stipulated number of years.
    • It is a matter of right although cannot be claimed as an ‘absolute legal right’.

    Is ‘parole as Diwali gift’ an extraordinary move?

    • The state governments often take a compassionate view on applications for parole during festivals of Diwali, Rakshabandhan, etc.
    • The legislature/politicians do not have direct powers to grant parole on suo-motu cognizance.
    • The announcement only indicates that prisoners will have to make applications to the authorities concerned, which in turn will be considered with leniency and expeditiously.
    • The applications will, however, be subject to scrutiny and the prisoners’ conduct and gravity of their offence.

    Who can opt for parole and how?

    • The provision of parole is available to convicts found guilty by a court and such a prisoner.
    • The prisoner’s relative/legal aid may submit an application to the prison superintendent.
    • He/she in turn forwards the application to the ‘competent authority’, often under the jurisdiction of district magistrate concerned and comprising prison and police authorities, to sanction release.
    • After due verification of reasons and prisoner’s conduct by the competent authority, an order for grant of release on parole will be issued.
    • In case of rejection of the said application, a convict may approach the High Court.

    Duration of Parole

    • The Prison rules state that parole period may be granted for not more than 30 days.
    • The competent authority may exercise its discretion in case of serious illnesses or death of “nearest relative such as mother, father, sister, brother, children, spouse of the prisoner, or in case of natural calamity.”
    • Parole or extension of parole cannot be granted without a report of the police
    • Apart from the remedy to approach a high court for parole in case of a rejected application, a prison can also approach the high court directly in case of an extraordinary emergency.

     

    Try this PYQ from CSP 2021:

    Q. With reference to India, consider the following statements:

    1. When a prisoner makes a sufficient case, parole cannot be out denied to such prisoner because it becomes a matter of his/her right.
    2. State Governments have their own Prisoners Release on Parole Rules.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

    [wpdiscuz-feedback id=”jzwsmaz3ng” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

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  • RBI issues revised Prompt Corrective Action (PCA) framework

    The RBI has issued a revised Prompt Corrective Action (PCA) framework for banks to enable supervisory intervention at “appropriate time” and also act as a tool for effective market discipline.

    What is the PCA framework?

    • Prompt Corrective Action Framework refers to the central bank’s watchlist of weak banks.
    • The regulator imposes restrictions like curbs on lending on such banks.
    • The PCA Framework applies only to commercial banks and does not cover cooperative banks and non-banking financial companies.

    When was PCA introduced?

    • The RBI’s PCA Framework was introduced in December 2002 as a structured early intervention mechanism along the lines of the US Federal Deposit Insurance Corporation’s PCA framework.
    • The last PCA Framework was issued by the RBI on April 13, 2017, and implemented with respect to banks’ financials as of March 31, 2017.

    Latest PCA norms

    • The revised PCA framework will be effective from January 1, 2022.
    • Capital, asset quality and leverage will be the key areas for monitoring in the revised framework.
    • That apart, RBI has also revised the level of shortfall in total capital adequacy ratio that would push the lender to “risk threshold three” category.

    When exactly does a bank fall into this list?

    • The RBI has specified certain regulatory trigger points with respect to three parameters for the initiation of the process:
    • Capital-to-risk weighted assets ratio (CRAR): It is a measure of a bank’s capital to ensure that it can absorb a reasonable amount of loss and complies with statutory Capital requirements.
    • Net Non-Performing Assets (NPA)
    • Return on assets (RoA): It is an indicator of how well a company utilizes its assets in terms of profitability.

    What are the trigger points on capital and how does a breach invite action?

    1. CRAR

    • If CRAR falls to less than 9 percent, the RBI asks banks to submit a capital restoration plan, restricts new businesses and dividend payments.
    • The RBI also orders recapitalisation, restrictions on borrowings from the inter-bank market, reduction of stake in subsidiaries and reduction of exposure to sensitive sectors.
    • Such sectors include the capital markets, real estate or investments in non-statutory liquidity ratio securities.
    • If CRAR is less than 6 percent but equal to or more than 3 percent, the RBI could take additional steps if the bank fails to submit a recapitalisation plan.

    2. NPA levels

    • If net NPAs rise beyond 10 percent but are less than 15 percent, a special drive to reduce bad loans and contain the generation of fresh NPAs begins.
    • The RBI reviews the bank’s loan policy and takes steps to strengthen credit-appraisal skills.

    3.Return on assets

    • If RoA is less than 0.25 percent, restrictions on accessing/renewing costly deposits and CDs kick in and the RBI bars the bank from entering new lines of business.
    • The bank’s borrowings from the inter-bank market, making dividend payments and increasing staff will be restricted.

    Significance of PCA

    • The financial health of a bank: Essentially PCA helps RBI monitor key performance indicators of banks, and taking corrective measures, to restore the financial health of a bank.
    • Averting a crisis: PCA is intended to help alert the regulator as well as investors and depositors if a bank is heading for trouble. The idea is to head off problems before they attain crisis proportions.

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  • India launches Infrastructure for the Resilient Island States (IRIS)

    The PM has launched the Initiative for the Resilient Island States (IRIS) for developing infrastructure of small island nations.

    What is IRIS?

    • The Small Island Developing States or SIDS face the biggest threat from climate change.
    • To mitigate this, India’s space agency ISRO will build a special data window for them to provide them timely information about cyclones, coral-reef monitoring, coast-line monitoring etc. through satellite.
    • IRIS will be a part of the India-UK Coalition for Disaster Resilient infrastructure (CDRI).

    About CDRI

    • The CDRI is an international coalition of countries, UN agencies, multilateral development banks, the private sector etc. that aim to promote disaster-resilient infrastructure.
    • Its objective is to promote research and knowledge sharing in the fields of infrastructure risk management, standards, financing, and recovery mechanisms.
    • It was launched by the Indian PM Modi at the 2019 UN Climate Action Summit in September 2019.

    Focus areas

    • CDRI’s initial focus is on developing disaster-resilience in ecological, social, and economic infrastructure.
    • It aims to achieve substantial changes in member countries’ policy frameworks and future infrastructure investments, along with a major decrease in the economic losses suffered due to disasters.

    Try this PYQ:
    Q.Consider the following statements:
    Climate and Clean Air Coalition (CCAC) to Reduce Short Lived Climate Pollutants is a unique initiative of G20 group of countries
    The CCAC focuses on methane, black carbon and hydrofluorocarbons.
    Which of the above statements is/are correct?
    (a) 1 only
    (b) 2 only
    (c) Both 1 and 2
    (d) Neither 1 nor 2

    Post your answers here.

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  • In news: National Commission for Scheduled Castes (NCSC)

    The National Commission for Scheduled Castes (NCSC) will examine the complaint of a decorated Narcotics Control Bureau (NCB) officer against caste-based allegations by a Maharashtra minister.

    About National Commission for Scheduled Castes

    • NCSC is a constitutional body under Article 338 of the Indian Constitution.
    • It functions under the jurisdiction of Ministry of Social Justice and Empowerment.
    • It was established with a view to provide safeguards against the exploitation of Scheduled Castes.
    • It aims to promote and protect their social, educational, economic and cultural interests, special provisions were made in the Constitution.

    How were they established?

    • The original constitution provided for the appointment of a Special Officer under Article 338.
    • The special officer was designated as the Commissioner for Scheduled Castes and Scheduled Tribes.
    • The 65th Constitutional Amendment Act 1990, amended Article 338 of the Constitution to introduce a joint NC for SCs and STs.
    • Later by 89th Amendment, NC for Scheduled Castes (NCSC) and NC for Scheduled Tribes (NCST) were separated by creating a new Article 338-A.

    Functions

    • To investigate and monitor all matters relating to the safeguards provided for the SCs
    • To inquire into specific complaints with respect to the deprivation of rights and safeguards of the Scheduled Castes
    • To participate and advise on the planning process of socio-economic development of the SCs
    • To evaluate the progress of their development under the Union and any State
    • To present to the President, annually and at such other times as the Commission may deem fit, reports upon the working of those safeguards
    • To make in such reports recommendations as to the measures that should be taken by the Union or any State
    • To discharge such other functions as the President may, subject to the provisions of any law made by Parliament, by rule specify

    Note: National Commission for Backward Castes is also a constitutional body too. According to article 340, President shall establish a commission to examine the condition of social and backward class.

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  • [pib] Manipuri Basanta Raasa

    As part of the celebrations of Azadi Ka Amrit Mahotsav, a celebration of Destination North East India, dance and music of Manipur was organised.

    Manipuri Raas Leela

    • The Raas Leela, also referred to as Manipuri Dance, is one of the major Indian classical dance forms, originating from the state of Manipur.
    • The dance form is based on Hindu Vaishnavism themes, and exquisite performances of love-inspired dance drama of Radha-Krishna called Raas Leela.

    Notable features

    • It is marked by a performance that is graceful, fluid, sinuous with greater emphasis on hand and upper body gestures.
    • It is accompanied with devotional music created with many instruments, with the beat set by cymbals (kartal or manjira) and double-headed drum (pung or Manipuri mrdanga) of sankirtan.
    • The dance drama choreography shares the plays and stories of Vaishnavite Padavalis, that also inspired the major Gaudiya Vaishnava-related performance arts found in Assam and West Bengal.

    Try this PYQ from CSP 2017:
    With reference to Manipuri Sankirtana, consider the following statements:
    It is a song and dance performance.
    Cymbals are the only musical instruments used in the performance.
    It is performed to narrate the life and deeds of Lord Krishna.
    Which of the statements given above is/are correct?
    (a) 1, 2 and 3.
    (b) 1 and 3 only
    (c) 2 and 3 only
    (d) 1 only

    Post your answers here.

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  • Mixed signals on growth-inflation dynamics

    Context

    We are now at that point in the cycle where all central banks — the RBI, the US Fed, the European Central Bank, Bank of England and others — have begun to signal, a process of normalisation from the unprecedented loose monetary policy stimulus post the onset of the pandemic in early 2020.

    Recovery momentum

    • Surveys and data prints are now signalling that the recovery momentum in the first half of 2021 is decelerating in many countries, although the direction and momentum may vary.
    • The RBI Governor notes that “the external environment, which had been supportive of aggregate demand over the past few months, may lose momentum for a variety of reasons”.
    • China — its policy and economy — is the most salient risk for a sustained global recovery.
    • The Chinese authorities’ seeming determination to push ahead with structural reforms, de-carbonising initiatives, and curbs on real estate appear designed to sacrifice some short-term growth for medium-term efficiencies, and reduce financial risks and inequality.
    • Inflation in almost all major economies continues to remain high.
    • The US Personal Consumption Expenditure (PCE) survey measure of core inflation is running over 4 per cent.
    • The story is similar in Europe.

    Assessing India’s growth recovery

    • India’s growth–inflation dynamics are also becoming favourable, but are still subject to multiple risks.
    • In assessing India’s growth recovery, a risk of the global economy going into “stagflation”, going by US signals seems to be that if at all, it is likely to be mild.
    • The recovery of economic activity continues, although the high-frequency indicators we track suggest that the momentum observed in July and August has moderated.
    • Electricity consumption growth is also down from August levels, but part of this can be explained by both cooler, rainy weather, as well as coal shortage related cutbacks in many electricity-intensive manufacturing.
    • The residential real estate is reportedly doing exceptionally well, with low-interest rates on home loans, cuts in stamp duty and registration charges, and indeed behavioural shifts towards own home ownerships with hybrid and work from home shifts.
    • Even the commercial real estate sector is reviving.
    • The Union government also has large unspent cash balances, which can be judiciously deployed to boost both capex and consumption.
    • The overall inflation trajectory suggests a gradual glide path towards the 4 per cent target by March 2023 or a bit beyond.
    • There are risks of overshooting this forecast trajectory, despite a benign outlook on food prices.
    • This emanates from global metals, minerals, crude oil prices, and from supply bottlenecks persisting till well into 2022.

    Conclusion

    In summary, the growth–inflation signals remain mixed. Multiple episodes of global spillovers in the past couple of decades have taught us that imminent normalisation will have implications for all emerging markets.

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  • India offers ‘Panchamrita’ Strategy for Climate Conundrum at Glasgow

    PM Modi has proposed a five-fold strategy called the ‘Panchamrita’ for India to play its part in helping the world get closer to 1.5 degrees Celsius on the first day of the global climate meeting in Glasgow.

    What is Panchamrita?

    • ‘Panchamrita’ is a traditional method of mixing five natural foods — milk, ghee, curd, honey and jaggery. These are used in Hindu and Jain worship rituals. It is also used as a technique in Ayurveda.
    • The PM euphemistically termed his scheme as ‘Panchamrita’ meaning the ‘five ambrosia’.
    • Under Panchamrita’, India will:
    1. Get its non-fossil energy capacity to 500 gigawatts by 2030
    2. Meet 50 per cent of its energy requirements till 2030 with renewable energy
    3. Reduce its projected carbon emission by one billion tonnes by 2030
    4. Reduce the carbon intensity of its economy by 45 per cent by 2030
    5. Achieve net zero by 2070

    Key takeaways of PM’s speech

    (a) Commitment for climate action

    • India consists of 17 per cent of the world’s population but contribute only five per cent of emissions.
    • Yet, it has left no stone unturned in doing our bit to fight climate change.
    • At Paris, India was making promises not to the world but to itself and 1.3 billion Indians, PM said.

    (b) Climate finance

    • The 2015 Paris CoP where the Paris Agreement was signed was not a summit but a sentiment.
    • The promises made till now on climate finance were useless.
    • When we all are increasing our ambitions on climate action, the world’s ambition could not stay the same on climate finance as was agreed at the time of Paris.

    (c) India’s track record

    • India was fourth as far as installed renewable energy capacity was concerned.
    • The Indian Railways has pledged to make itself net-zero by 2030. This will result in an annual 60 million tonnes reduction in emissions.
    • India initiated the International Solar Alliance for solar energy.
    • It has also set up the coalition for disaster resilient infrastructure for climate adaptation.

     

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