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  • India-Nepal relations in a new transition

    India-Nepal Joint Commission meeting took place at a time when Nepal in going through a political turmoil. The article examines the issues discussed in the meeting and how its implications for the bilateral relations between the two countries.

    India-Nepal joint commission meeting amid political chaos in Nepal

    • Recently, the Minister for Foreign Affairs of Nepal visited New Delhi for the sixth meeting of the India-Nepal Joint Commission.
    • Nepal’s Prime Minister dissolved the House of Representatives in late December 2020, the move was termed ‘unconstitutional’ by the experts and the country’s Supreme Court is hearing writ petitions against the move.
    • As a unique characteristic, Nepal’s internal political fundamentals continue to shape its foreign policy choices. 
    • In such a scenario, any inbound or outbound delegation is seen from a different prism.

    Issues discussed in the meeting

    1) Progress on the development partnership front

    • On the development partnership front, the expansion of the Motihari-Amlekhganj petroleum products pipelines to Chitwan and the establishment of a new pipeline on the eastern side connecting Siliguri to Jhapa in Nepal formed a part of the discussions.
    • The operating procedures for commencement of train services of the first passenger railway line between India and Nepal from Jaynagar to Kurtha via Janakpurhave have been discussed.
    • Other cross-border rail connectivity projects, including a possible Raxaul-Kathmandu broad gauge railway line, were also discussed.
    • The joint hydropower projects, including the proposed Pancheshwar Multipurpose Project, should get positive momentum following this round of meetings.

    2) Facilitating the cross-border movement of people

    • The recently inaugurated Integrated Check Posts (ICPs) at Birgunj and Biratnagar have helped in the seamless movement of people and trade between the two countries.
    • The construction of a third integrated check post at Nepalgunj has already commenced, while the new integrated check post at Bhairahwa would begin shortly.
    • Since Nepal relies on India’s seaports in a big way for trading, and goods are transported by road, the integrated check posts are expected to ease trade and transit.

    3) Border issue

    • Nepali side’s demand to include the boundary in the Joint Commission Meeting.
    • However, India made it clear to find a fresh mechanism to resolve any such crucial long-pending issue.

    4) New direction to bilateral ties

    • India’s support for two more cultural heritage projects in Nepal, namely, the Pashupatinath Riverfront Development and the Bhandarkhal Garden Restoration in Patan Durbar is significant.
    • Nepal expressed support for India’s permanent membership of an expanded UN Security Council (UNSC) to reflect the changed balance of power.
    • The next meeting of the Joint Commission in Nepal should be crucial in giving a new direction to the bilateral ties, keeping a balance between change and continuity.

    India’s deepening engagement with all sections

    • There is growing disenchantment among the Nepali masses over the increased centralization of power, failure of the Provincial System in addressing the developmental issues, misuse of Presidential authority, and unprecedented corruption.
    • While the unusual developments are taking place in Nepal, there are many who still think that India is comfortable with some changes as its Nepal policy is heading very clearly towards a deeper engagement with all sections.

    Consider the question “How India-Nepal ties are affected by the internal political fundamentals in Nepal? What approach should be adopted by India in dealing with Nepal?” 

    Conclusion

    Nepal cannot afford to enter into another round of political instability, and those who have commanding authority to spearhead India-Nepal bilateral relations must give a humane consideration to it. At the crossroads, Nepal needs action and to come to terms with realities.

  • Question Hour to resume during Budget Session

    Question Hour, which had been suspended by the government during the monsoon session, will resume when Parliament meets for the budget session.

    Q.Discuss the various instruments of Parliamentary Control in India.

    Must read edition: [Burning Issue] Quashing of the Question Hour

    What is Question Hour?

    • Question Hour is the liveliest hour in Parliament. It is during this one hour that MPs ask questions of ministers and hold them accountable for the functioning of their ministries.
    • Prior to Independence, the first question asked of government was in 1893. It was on the burden cast on village shopkeepers who had to provide supplies to touring government officers.
    • The questions that MPs ask are designed to elicit information and trigger suitable action by ministries.
    • Over the last 70 years, MPs have successfully used this parliamentary device to shine a light on government functioning.
    • Their questions have exposed financial irregularities and brought data and information regarding government functioning to the public domain.
    • With the broadcasting since 1991, Question Hour has become one of the most visible aspects of parliamentary functioning.

    Its evolution

    • The right to question the executive has been exercised by members of the House from the colonial period.
    • The first Legislative Council in British India under the Charter Act, 1853, showed some degree of independence by giving members the power to ask questions to the executive.
    • Later, the Indian Council Act of 1861 allowed members to elicit information by means of questions.
    • However, it was the Indian Council Act, 1892, which formulated the rules for asking questions including short notice questions.
    • The next stage of the development of procedures related to questions came up with the framing of rules under the Indian Council Act, 1909, which incorporated provisions for asking supplementary questions by members.
    • The Montague-Chelmsford reforms brought forth a significant change in 1919 by incorporating a rule that the first hour of every meeting was earmarked for questions. Parliament has continued this tradition.
    • In 1921, there was another change. The question, on which a member desired to have an oral answer, was distinguished by him with an asterisk, a star. This marked the beginning of starred questions.

    Its significance

    • Question Hour is not only an opportunity for the members to raise questions, but it is a parliamentary device primarily meant for exercising legislative control over executive actions.
    • The government’s actions erode the constitutional mandate of parliamentary oversight over executive actions as envisaged under Article 75 (3) of the Indian Constitution.

  • WhatsApp’s contentious Privacy Policy

    The Government of India has asked WhatsApp to withdraw the proposed changes in its privacy policy.

    Q.What are the factors responsible for the spread of misinformation on social media? Suggest the measures to tackle it.

    Core of the news

    • WhatsApp has been embroiled in a controversy over its updated privacy policy.
    • The posts are pointers on the new policy.

    What was the news Privacy Policy?

    • When one goes to the status tab on the app, one can see the WhatsApp icon and its four posts, along with the statuses of one’s contacts.
    • While one reads ‘We are committed to your privacy’, another reads, ‘WhatsApp can’t read or listen to your personal conversations as they’re end-to-end encrypted’.
    • Another post reads ‘WhatsApp can’t see your shared location’ and yet another reads ‘WhatsApp doesn’t share your contacts with Facebook’.
    • The messaging app reviewed its privacy policy and asked users to accept the terms and conditions by February 8. Following this, the app faced severe backlash from its users and privacy advocates.

    Issues pointed by Govt.

    • said that the proposed changes raised “grave concerns” over the implications of the choice and the autonomy of Indian citizens.
    • It pointed out that the Indian users, who have not been given the option to opt-out of data-sharing with Facebook companies, were being subjected to differential treatment.
    • The issue is the impact it has on informational privacy, data security and user choice.

    Data at stake

    • The government asked WhatsApp to reconsider its approach to respect the informational privacy, freedom of choice and data security of Indian citizens.
    • It said that India’s distinct identity and its people must be properly respected and any unilateral changes to WhatsApp Terms of Service and Privacy would not be fair and acceptable.

    A discriminatory move

    • India formed the largest segment of WhatsApp’s user base globally and any change in policies would have a disproportionate impact on its citizens.
    • The privacy policy offered by WhatsApp to its European users specifically prohibits the use of any information shared with a Facebook company for those companies’ own purposes.
    • This Clause is not present in the privacy policy offered to Indian users.
    • This differential and discriminatory treatment of Indian and European users is attracting serious criticism and betrays a lack of respect for the rights and interest of Indian citizens.

    What lies ahead?

    • India has a huge user base of WhatsApp and Facebook in India.
    • The consolidation of sensitive information exposes a very large segment of Indian citizens to greater information security risks.
    • By not providing Indian users with the ability to opt-out of this data sharing with other Facebook companies, WhatsApp is treating users with an ‘all-or-nothing’ approach.

  • Issues over Parliament Canteen Subsidy

    Food served in Parliament canteen is set to cost more as it will no longer be subsidised, Lok Sabha Speaker has informed.

    I say there is no darkness, but ignorance.

    -William Shakespeare

    Why in news?

    • The low rate of food in the Parliament canteen has often attracted controversy, with critics objecting to lawmakers enjoying a cheap meal at the taxpayers’ expense.
    • Others have pointed out that the subsidy doesn’t benefit just MPs, as a host of other Parliament staff and security personnel also take their meals at the canteen.
    • However, in 2019, all MPs had unanimously decided to do away with the subsidy.
    • The annual revenue from Parliament catering was to the tune of Rs 15 to Rs 18 crore. It could annually save more than Rs 8 crore with the subsidy coming to an end.

    Parliament Canteen Subsidy

    • A major furore over the subsidy had erupted in 2015 when a reply to an RTI query which revealed that the canteen got a subsidy of Rs 14 crore every year.
    • The item list received under the RTI Act revealed that items like ‘fish fried with chips’ were available at Rs 25, mutton cutlet at Rs 18, boiled vegetables at Rs 5, mutton curry with bone at Rs 20 and masala dosa at Rs 6.
    • These were the rates subsidised by 63 per cent, 65 per cent, 83 per cent, 67 per cent and 75 per cent respectively.
    • The caterers were being paid by the Ministry of Finance through Parliament.

    Was the entire amount being spent on MPs’ food?

    • Apart from food, the subsidy is used for other expenses, like salaries of canteen staff. Also, many other people apart from the MPs use the canteen.
    • In fact, when the RTI query had been filed in 2015, the sales in the canteen for when Parliament was in session and when it wasn’t were almost the same.
    • Of the total subsidy of Rs 14 crore revealed by the RTI query, about Rs 11-12 crore would go towards the salary of the staff manning the canteen.

  • Celebration of Parakram Diwas

    The Union Culture Ministry has announced that January 23, birth anniversary of Subhash Chandra Bose, would be celebrated as “Parakram Diwas” — the day of courage — every year.

    Try this PYQ

    Q.Highlight the difference in the approach of Subhash Chandra Bose and Mahatma Gandhi in the struggle for freedom. (150 W)

    Subhash Chandra Bose (1897-1945)

    • Bose was an Indian revolutionary prominent in the independence movement against British rule of India.
    • He also led an Indian national force from abroad against the Western powers during World War II.
    • He was a contemporary of Mohandas K. Gandhi, at times an ally and at other times an adversary.
    • He was highly influenced by a socialist ideology that acquired popularity as consequences of the Russian Revolution.

    Forget not that the grossest crime is to compromise with injustice and wrong. Remember the eternal law: You must give if you want to get.

    – Netaji

    Association with INC

    • In 1927, after being released from prison, Bose became general secretary of the Congress and worked with Jawaharlal Nehru for independence.
    • In late December 1928, Bose organised the Annual Meeting of the Indian National Congress (INC) in Calcutta.
    • Subsequently, Bose wanted to get elected as Congress President in a subsequent session of 1939 convened at Tripuri.
    • However, his candidature was challenged by Mahatma Gandhi who wanted to prevent socialist orientation to the Indian National Movement.
    • Gandhi proposed Pattabhi Sitaramaya for this candidature.
    • In this election, Bose emerged victorious by a huge margin which was not acceptable to Mahatma Gandhi.
    • Congress leader supported Mahatma Gandhi and forced Subhash Chandra Bose to step down from Presidentship.
    • Under such collective pressure, Bose not only resigned from the Congress members. Thereafter he established a separate political party known as “Forward Bloc”.

    Escape to Germany

    • On the outbreak of WW-II, Bose advocated a campaign of mass civil disobedience to protest against Linlithgow’s decision to declare war on India’s behalf without consulting the Congress leadership.
    • Having failed to persuade Gandhi of the necessity of this, he was house arrested from where he escaped to Germany.
    • He then went to several countries of Europe and finally landed in a region of Singapore in “South East Asia”.

    Azad Hind Fauj

    • The SE Asia region was under the control of Japan where a large number of “Indian Prisoners of War” was confined.
    • When Subhash Chandra Bose reached Singapore in1943 this army was led by a prominent revolutionary Ras Behari Bose whose cadre was known as “Indian National Army”.
    • Subhash Chandra Bose reorganized and expanded this force in order to liberate India. This force was renamed as “Azad Hind Fauj” by him.

    The Azad Hind Government

    • The Provisional Government of Free India, or, more simply, Free India (Azad Hind), was an Indian provisional government established in occupied Singapore in 1943.
    • C. Bose was the leader of Azad Hind Government (AHG) and also the Head of State of this Provisional Indian Government-in-exile.
    • It was a part of the freedom movement, originating in the 1940s outside India with a purpose of allying with Axis powers to free India from British rule.

    Its collapse and INA Trials

    • INA under the leadership of Bose got defeated severely at Rangoon due to lack of support of Japanese.
    • Bose was suggested to leave Burma to continue his struggle for Indian independence and returned to Singapore before the fall of Rangoon.
    • The AHG govt in the islands collapsed when the island garrisons of Japanese and Indian troops were defeated by British troops and the islands themselves retaken.
    • The Provisional Government of Free India ceased to exist with the deaths of the Axis, the INA, and Bose in 1945.
    • It was followed by the Famous Trials at Red Fort.

    Also read:

    In news: 1946 Royal Indian Navy Mutiny

  • 1776 Commission report of the White House

    The White House has released the 1776 Commission report, just days before president-elect Joe Biden would take his oath in office.

    Read about anti-apartheid movement from your World History sources.

    What is the news?

    • Earlier, Trump has signed an executive order to set up a “national commission to promote patriotic education” in the country.
    • The initiative dubbed the ‘1776 Commission’, is an apparent counter to The 1619 Project, a Pulitzer Prize-winning collection of essays on African American history of the past four centuries.
    • It explores the Black community’s contribution to nation-building since the era of slavery to modern times.
    • The name marks the independence of 13 US colonies from the British Empire in 1776.

    What is Trump’s 1776 Commission?

    • With this move, Trump sought to activate his right-wing supporters by doubling down on what he described as “cancel culture”, “critical race theory” and “revisionist history”.
    • Looking at the racial attacks, trump had said that Americans are inundated with critical race theory.
    • This was a Marxist doctrine holding that America is a wicked and racist nation, that even young children are complicit in oppression.
    • Trump wanted to reform this idea and wanted to portray himself as a defender of traditional American heritage against “radical” liberals.”

    What was the 1619 Project?

    • The Project is a special initiative of The New York Times Magazine, launched in 2019 to mark the completion of 400 years since the first enslaved Africans arrived in colonial Virginia’s Jamestown in August 1619.
    • The project aimed to reframe US history by considering what it would mean to regard 1619 as America’s birth year.

  • [pib] Exercise Desert Knight-21

    Indian Air Force and French Air and Space Force will conduct a bilateral Air exercise, Ex Desert Knight-21 at Air Force Station Jodhpur.

    All-time generic question seeking ‘match the pairs’ can be asked from the news as such.  Click here for more exercises.

    Ex. Desert Knight-21

    • The French side will participate with Rafale, Airbus A-330 Multi-Role Tanker Transport (MRTT), A-400M Tactical Transport aircraft and approximately 175 personnel.
    • The IAF aircraft participating in the exercise will include Mirage 2000, Su-30 MKI, Rafale, IL-78 Flight Refuelling Aircraft, AWACS and AEW&C aircraft.
    • The exercise marks an important milestone in the series of engagements between the two Air forces.
    • As part of Indo-French defence cooperation, Indian Air Force and French Air and Space Force have held six editions of Air Exercises named ‘Garuda’, the latest being in 2019.
    • Presently, the French detachment for Ex Desert Knight-21 is deployed in Asia as part of their ‘Skyros Deployment’ and will ferry in forces to Air Force Station Jodhpur.

    Why it is special?

    • The exercise is unique as it includes fielding of Rafale aircraft by both sides and is indicative of the growing interaction between the two premiers Air Forces.
    • It will put into practice operational experience gained across terrains and spectrums and endeavour to exchange ideas and best practices to enhance interoperability.

  • 20th January 2021| Daily Answer Writing Enhancement

    Important Announcement:  Topics to be covered on 21st January

    GS-1  Distribution of key natural resources across the world (including South Asia and the Indian subcontinent).

    GS-4 Work culture, Quality of service delivery, Utilization of public funds, challenges of corruption.

    Question 1)

    Discuss the starring role and influences of Basavanna as a social reformer. 10 marks

    Question 2)

    India-Nepal ties are in a new transition after a brief interregnum in ties owing to some issues. In light of this, examine the issues that affect the relationship between the two countries and progress made on the various new initiatives. 10 marks

    Question 3)

    What is Bad Bank? What are the challenges it could face in the Indian context? 10 marks

    Question 4)  

    “Good governance and anti-corruption measures as central to its poverty alleviation mission.” Discuss. 10 marks

    Reviews will be provided in a week. (In the order of submission- First come first serve basis). In case the answer is submitted late the review period may get extended to two weeks.

    *In case your answer is not reviewed in a week, reply to your answer saying *NOT CHECKED*. If Parth Sir’s tag is available then tag him.

    For the philosophy of AWE and payment, check  here: Click2Join

  • Decimate Prelims 2021 Open Bootcamp | Constitutional Developments by Sudhanshu sir at 10am today| Free Habitat Club

    Click here to join the Free Decimate Prelims 2021 Open Bootcamp

    Dear student

    To prepare you all for the rigors and grind that is to follow in Decimate Prelims 2021 program that is starting from 1st Feb 2021, we have launched an open and free Decimate Prelims 2021 Open Bootcamp.

    At least four daily sessions are planned, starting with Sudhanshu sir’s Polity and important constitutional developments.

    Click here to join the Free Decimate Prelims 2021 Open Bootcamp

    A detailed timetable will be shared with you all in the Club.

    Click here to enroll for Decimate Prelims 2021

    What is Decimate Prelims 2021?

    It is a holistically designed crash course for the UPSC IAS prelims exam. To make it more efficient and outcome-oriented we’ve integrated it with Habitat.

    Decimate Prelims 2021 @ Habitat is a three-phased program that ensures full coverage of current affairs syllabus, related static parts, tests, intensive discussions, and revision.

    We’re going more intensive and comprehensive to make sure that you comfortably go beyond 130+ marks and literally decimate prelims.

    UPSC is evolving, are you? Bury the old ways of IAS Prelims preparation

    Decimate Prelims 2021 progression – 3 Phases

    Phase 1: Course coverage- 7 weeks

    In the first 50 days, we are going to cover 2+ yrs current affairs, associated static topics, and prelims worthy issues. These will be covered in 4+ hours daily classes on Habitat.

    1. Daily Habitat classes

    Habitat classes will be conducted by the subject-specific mentors twice a day. Here in the first session, you’ll be having an in-depth discussion and analysis of the scheduled topics. Why a particular topic is important and how it could be asked in prelims will be discussed. In the second session of Habitat class, you’ll be attempting MCQs, resolving doubts, and revising.

    2. Notes and Habitat summary podcast/videos

    Crisp but comprehensive notes are going to cover these current affairs on a preliminary level. These will be followed by Habitat discussions.

    By the end of the discussion, you will be provided with video summary lectures, MCQs, mindmaps, and reference material, etc.

    Phase 2: Tests and Assessment, Discussion, Tikdams- Till May

    In the second phase of Decimate Prelims 2021, we’re going to focus on the application of information; testing and evaluation; doubts resolution and course correction; and learning smart ways of attempting the paper through Tikdams sessions.

    1. Test series and discussions

    Since learning must be accompanied by regular assessment, Decimate Prelims includes 8 Full-Length tests, 10 Current affairs tests, and 4 CSAT tests. These are high-quality tests covering the most relevant issues for IAS prelims 2021.

    Tests will be followed by discussion and analysis on Habitat will help in finding out the mistakes you are committing to and how to address them in a most effective manner.

    2. Tikdams and Score boosting sessions

    We’ve perfected Tikdams or the art of intelligent elimination. It has the potential of raising your score by 30 marks or more. Score boosting sessions, in this phase, will prepare you and enhance your ability to perform under pressure (& lack of information). 

    3. Revision and discussion

    We’re going to have scheduled revision and doubt resolution sessions on Habitat. These 4+hrs sessions will ensure thorough coverage of the IAS Prelims syllabus.

    Phase 3: Probable questions discussion, intensive revision – till prelims

    We’ll be providing 300+ most probable topics to you and will be having a discussion session on Habitat around these topics.

    Moreover, intensive revision based on listicles, reports, and important topics will continue till your prelims.

    How daily Habitat classes will be held?

    Decimate Prelims 2021 IAS PRelims 2021

    Since we’re going to be comprehensive and effective, we’ve planned Habitat classes twice a day (4+hrs/day) as per a schedule.

    Forenoon session: 10am – 12:30pm

    You’ll be provided with the base notes and reading material a day before. In the Habitat class the focus will be on:

    1. Explanation and conceptual clarity.
    2. Making linkages with static part.
    3. Relevance of the topic or its components for the prelims exam.
    4. The kind of questions that could be asked from a particular topic.
    5. Things you need to focus on and the things you can avoid.

    You’ll get a video summary lecture of this discussion covering the most important and relevant aspects of the topic.

    A discussion session on Habitat

    Evening session: 7pm – 9pm

    In the second session, we’ll be focussing on the application and utilization of the information part:

    1. Doubts resolution
    2. Daily mini-tests (MCQs) based on day’s discussions
    3. Explanation, discussion, and Tikdams
    4. Revision of the day’s topics

    After this session, you’ll be provided with the PDFs of mini-tests, notes for the next session, and reference material (if required).

    Similar sessions will continue till Prelims 2021 in the next two phases as well.

    MCQ discussion on Habitat

    Habitat Mentorship

    Mentorship is an important component of Decimate Prelims 2021. It is essential for guiding your preparation towards the most effective path so that you can make the most out of this program.

    On Habitat, you will get mentorship by subject-specific mentors and teachers. You can reach out to them whenever you want and get your doubts resolved as soon as you get them.

    Notes and study material

    As mentioned above high-quality PDF notes of current affairs, daily MCQs, discussion summaries, etc. are going to be provided. You’ll also be getting an annual subscription to Civils Digest, our monthly magazine.

    Other reference material, listicles, etc. will be provided as and when required.

    Program inclusion:

    1. Daily Habitat classes: 4+ hrs
    2. Comprehensive Current Affairs coverage
      • 2+ years Prelims worth issues and topics
      • CA associated static topics
      • Video lectures/summaries.
    3. Exclusive membership to Habitat group
    4. Test series with doubt resolution discussions
      • 8 Full-Length Tests
      • 10 Current Affairs Tests
      • 4 CSAT 
    5. Mentorship 
      • Connect with subject-specific mentors on Habitat
    6. Score Booster sessions (Tikdams)
      • Habitat sessions in the second phase
      • Video summary lectures
    7. Notes and study material
      • High-quality current affairs notes (PDF)
      • Daily discussion summaries, mindmaps, and MCQs
      • Civils Digest: Monthly magazine

    Click here to enroll for Decimate Prelims 2021

  • It’s better to stop the creation of bad debt than set up a bad bank

    The article argues that instead of creating the Bad Bank, several steps taken by the government and the bank regulator could deal with the problem of NPAs and also improve the performance of the banks.

    Challenge of NPA: Is Bad Bank and answer to it?

    • Recently, RBI governor said that the RBI was open to considering setting up of a “bad bank”.
    • India’s economic growth, unless pandemic risks resurface, should be good enough to largely take care of its non-performing assets (NPAs) in the coming years.
    • It was the high economic and credit growth of the 2003-08 period that whittled down the NPA ratio.
    • The provision coverage ratio at banks had gone up from 42% in 2016 to 72.4% in September 2020, and that net NPAs were down to 2.8% in March 2020.
    • The bad loan legacy is almost done with.
    • Consequently, the bad bank is a right idea at the wrong time.

    Steps the government and RBI should take

    1) Resume the operation of IBC

    • The government should reinstate the operation of the Insolvency and Bankruptcy Code (IBC).
    • The code had improved the recovery rate from NPAs in the banking system.
    •  There is a need to create disincentives for deliberate delaying tactics, so that the original timeline of 270 days is honoured more in its observance than in breach.

    2) Recapitalisation of banks

    • The government should provide more than adequate capital to the strong banks it owns, and adequate capital to the not-so-strong ones, with well-defined performance criteria for them to receive more.
    • If they don’t deliver, then the government should consolidate them or begin diluting its stake below 51% in such banks.

    3) Level playing field improvement in compliance culture

    • The government should level the regulatory playing field between private-sector and government-owned banks.
    • The risk management and compliance culture in public-sector banks must improve.
    • However,  public sector banks should not be subject to excessive oversight by government investigative and audit agencies.

    4) Plug the sources of NPAs through policy changes

    • More than these, there are two other important things that constitute the fountainheads of NPAs.
    • The government should evolve a framework for passing on explicit development goals of the state for banks to achieve through the credit mechanism.
    • The government should provide for them in the budget and compensate banks rather than direct credit by diktat.
    • The cost of directed lending is not just the creation of NPAs, but morale and market-value erosion as well.
    • In any case, recapitalization needs mean that the fiscal costs are not avoided. It is self-defeating.
    • Then, governments (Union and states) should plug the other underlying sources of NPAs.
    • Among things, they should ensure economic pricing of utilities, honour power purchase contracts and raw material purchase agreements, pay arrears to private counterparties, and stop being reflexive litigants.

    Consider the question ” What is the Bad Bank? Do you agree with the view that India needs Bad Bank?”

    Conclusion

    The above measures would greatly help the country achieve high growth and sustain it. Setting up a bad bank may be unnecessary.

    Back2Basics: Provisioning Coverage Ratio (PCR)

    • Banks usually set aside a portion of their profits as a provision against bad loans.
    • Provisioning Coverage Ratio (PCR) is essentially the ratio of provisioning to gross non-performing assets (NPA) and indicates the extent of funds a bank has kept aside to cover loan losses.
    • A high PCR ratio (ideally above 70%) means most asset quality issues have been taken care of and the bank is not vulnerable.

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