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  • Insolvency and Bankruptcy Code

    How is ease of doing business linked with the Insolvency and Bankruptcy Code?

    In India, lack of resolution of insolvency is one of the significant factors for the failure of credit market in the country. The present legislations governing insolvency are fragmented, multi-layered and the adjudication of insolvency matters take place in multiple forum, resulting in an unpredictable regime.

    The Insolvency and Bankruptcy Code has been hailed as an excellent reform for India that will pay a critical role in improving the ease of doing business.

    Why does India need a Bankruptcy law?

    Currently it takes, on an average, more than 4 years to resolve insolvency in India. The proposed Bankruptcy Code will replace over a century-old archaic insolvency act – The Presidency Towns Insolvency Act, 1909.

    • Delays in making decisions on the viability of business.
    • Sometimes, company promoters try to delay reorganisation or attempts to sell-off assets or change of management.
    • Delays in disposing off cases by Debt Recovery Tribunal.
    • Continued litigation at various levels and delays in appellate level.
    • Currently, there are 4 different agencies viz. the HC, the Company Law Board, the BIFR and the DRTs that handle insolvency-related cases.

    How can a modern law help?

    • Speedy closure will help firms on the verge of brink in two ways, i.e. either restructure the firm or sell-off the assets to recover the money.
    • It will promote efficient allocation and greater availability of credits for businesses, as it frees up capital.
    • Development of financial markets such as bond market, due to clarity on repayment for debtors.

    What is the international experience in this regard?

    • US Bankruptcy Code provides for fairly quick liquidation or reorganisation of the company.
    • In UK, once the cases are filed, then after 12 months, either the part of assets are discharged to pay-off debt or court-appointed administrators handle the case, if company can be turned around.

    Was any committee formed to suggest Insolvency reforms?

    • The Bankruptcy Law Reform Committee (BLRC) was set up in August, 2014 under the chairmanship of Mr. T.K. Vishwanathan.
    • It was the first committee with the mandate of suggesting comprehensive and not incremental reforms.
    • The BLRC extensively studied the insolvency regime within India as well as various international jurisdictions.

    What was the recommendation of the Committee?

    • The committee proposed an all-encompassing law for corporate and individual insolvency, reflecting the best practices from across the globe.
    • The corporates should assess the viability of an enterprise in the early stages of insolvency, such that the creditor and the debtors can negotiate a financial arrangement while preserving the economic value of the enterprise.
    • However, if the negotiations fail, then the enterprise is liquidated. The insolvency resolution is required to be done within a period of 180 days.
    • It also suggested fast track insolvency resolution for certain entities which is required to be completed within 90 days.

    What are the provisions of draft Insolvency and Bankruptcy Code?

    The code aims to bring modern framework to deal with bankruptcy and insolvency of variety of economic players, including individuals, but excluding financial firms.

    • It will restore some power to creditors, both financial and operational.
    • It will fast-track mechanism of insolvency resolution process may be applicable to certain categories of entities.
    • The corporate insolvency would have to be resolved within a period 180 days, extendable by 90 days.
    • It also provides for fast-track resolution of corporate insolvency within 90 days.
    • Debt Recovery Tribunals will be adjudicating authority over both individual & unlimited liability partnership firms.
    • National Company Law Tribunal will be adjudicating authority with jurisdiction over companies with limited liability.
    • It has a clause to provide for insolvency professionals who will specialize in helping sick companies. <These professionals will help revive control the management of distressed firm to revive it>
    • It also provides for information utilities that will collate all information about debtors to prevent serial defaulters from misusing the system
    • To setup Insolvency and Bankruptcy Board of India to act as a regulator for these utilities and professionals.
    • The bill also seeks to establish Insolvency and Bankruptcy Fund of India.

    What about Financial Sector Insolvencies?

    • FSLRC recommended creation of a resolution corporation to monitor financial firms and intervene before they go bust.
    • The aim is to close-down the firms which can’t be revived or change their management to protect investors or depositors.

    The reform is dubbed as 2nd most important reform after GST, as it will also improve the ease of doing business in India.

     

    Published with inputs from Pushpendra

  • Monsoon Updates

    How does El Nino affect Indian Monsoon? A Comprehensive Explainer

    As many reports speculated that El Nino is the main cause of the worsening Indian Monsoon and has played badly with Indian agriculture, we thought that we should take a big picture of El Nino and it’s scope in India.

     

    • The Monsoon is basically a result of the flow of moisture laden winds because of the variation of temperature across the Indian Ocean.
    • There are a number of climatic phenomena which affect it namely the El nino, La nina etc.
    • We will look at their origin, impact and way forward.

    Now, let’s take a overview and develop our understanding. 

    What happens in a Normal Year?

    • Peru Current = Humboldt Current = Cold Current.
    • During normal year 2 things are very strong – Cold Peru Current and Trade Winds.
    • As a result, cold water is dragged from Peru towards Australia.

    What would be the result of this exchange?

    • Warm water region around Australia is called Western Pacific Pool (WPP).
    • WPP = low pressure = warm air ascends = cloud formation = rain over North Australia
    • This air also joins walker cell and begins descending near Peru.
    • Descending air = anti-cyclonic condition = high pressure = stability = no cloud/rain = Drought in Atacama Desert.

    (Simply, Walker cell is the result of a difference in surface pressure and temperature over the western and eastern tropical Pacific Ocean)

    What happens below the water from Peru to Australia ?

    At Peru coast, cold water upwelling brings nutrient to surface + more lunch for Plankton + more fishes = Peru fishermen gets happy.

    What happens above the water from Australia towards Peru?

    Warm water + low atmospheric pressure = good rainfall over Australia & Indonesia.

    What happens in La Nina Year?

    Same things as in a “normal” year, but 2 things become even “stronger” –

    • Cold Peru Current
    • Trade Winds

    What’s the Result?

    • Too many fishes at Peru coast = oversupply of fishes = prices become dirt cheap.
    • Too much rain / flood over Australia and Indonesia.

    This is what happens in normal and La Nino year, Let’s back to El Nino!

     

     

    What happens in an El Nino year?

    Two things become weak.

    • Cold Peru Current
    • Trade Winds
    • As result, cold water is not dragged from Peru to Australia.
    • But reverse happens, warm water is dragged from Australia towards Peru.
    • Consequently, warm water + low pressure condition develops in the Eastern Pacific (Peru) and Cold condition + high pressure in Western Pacific (Australia).

    What will happen if pressure is inversely related with amount of rainfall ?

    • Rain & Floods at Peru, Atacama and even Southern USA
    • Drought at Northern Australia, Indonesia- even bushfires.
    • Storms and Hurricanes in East Pacific.
    • Coral bleaching (high temperature coral dies)

    But, what is the El Nino?

    • El Nino is an Oceanic and Atmospheric phenomenon that leads to unusual warming of water in the Peru coast, occurs every 3-5 years.
    • Consequently, warm water + low pressure condition develops in the Eastern Pacific (Peru) and Cold condition + high pressure in Western Pacific (Australia).
    • Since Pressure is inversely related with amount of rainfall, El Nino causes drought situation in Australia and South East Asia.
    • It weakens the trade winds and changes in Southern Oscillation, thereby affects the rainfall pattern across the world.

    el-nino-phenomenon

    What is Southern Oscillation?

    • Alternating of (tropical) sea level pressure between the eastern and western hemispheres.
    • We can measure Southern Oscillation by observing the pressure difference between Tahiti (French Polynesia) and Darwin (Australia).

    How does El Nino affect Indian Monsoon?

    • El Nino-Southern Oscillation (ENSO) water circulation happens between Australia and Peru.
    • But, the wind movement is part of larger atmospheric circulation hence affects the rainfall over India. But, how?
    • We have learned that During normal year, the warm water moves towards Australia, this pool of warm water is called Western Pacific Pool (WPP).

    So, from WPP air rises above and moves towards two walker cells –

    • Towards Peru coast = this affects rainfall in South America.
    • Towards Mascarene High Pressure zone near East Africa. So, this affect Indian monsoon.

    Why should India worry about?

    • Drought condition decreases the agriculture output, leads to food inflation.
    • Declined supply of cotton, oilseeds and sugarcane negatively affects the textile, edible oil and food processing industries respectively.

    What is the way forward?

    Let’s discuss first Near-term Solutions?

    • Government must expand farm insurance cover and advice financial institutions to settle crop insurance claims in the drought-hit areas without delay. Otherwise, it results in farmer suicides (e.g. Maharashtra farmers’ suicide ).
    • High quality seeds of alternative crops must be distributed among farmers in drought-affected areas.
    • Need of realistic assessment of ground level situation in order to estimate the shortfall of oilseeds and pulses and help traders with market intelligence.
    • Scrapping the APMC Act and allowing free flow of agricultural goods among the states.
    • This would help bridge the mismatch of demand and supply of goods, which is the underlying factor contributing inflation.

    What should be the Long-term Solutions?

    • Developing drought free crop varieties and distributing its subsidized seeds to the farmers. It is a part of National Action plan on climate change in Agriculture.
    • Using low water use technologies like drip and sprinkler irrigation.
    • The MSP regime in India has to provide more remuneration for less water consuming crops.
    • Strengthening community watershed management and development by protecting and conserving local water sources like ponds, lakes etc.
    • Developing early warning systems and alerting the farmers much in advance like recently launched Kisan SMS scheme.

    Do you find more solutions or any way out? then, Let us know!

     

    Published with inputs from Arun

  • Soil Health Management – NMSA, Soil Health Card, etc.

    Soil Health Card – A Tool For Agri Revolution

    Launched by the central government in February 2015, the scheme is tailor-made to issue ‘Soil card’ to farmers which will carry crop-wise recommendations of nutrients and fertilizers required for the individual farms.

    Agriculture as primary activity in India

    • Agriculture since ages is the mainstay of the Indian population.
    • The story of Indian agriculture has been a spectacular one, with a global impact for its multi-functional success in generating employment, livelihood, food, nutritional and ecological security.
    • Agriculture and allied activities contribute about 18% to the GDP of India (as of 2014-15). The green revolution had heralded the first round of changes.
    • India is the second largest producer of wheat, rice, sugar, groundnut as also in production of cash crops like coffee, coconut and tea.

    What is the scope and focus of government in agriculture?

    • India is now eyeing second Green Revolution in eastern India.
    • The need for enhanced investment in agriculture with twin focus on higher quality productivity and welfare of farmers.
    • In the entire scenario, importantly the government has laid emphasis on the awareness campaign and enhanced agri knowledge for the farming community.

    Why is there a need of awareness in assessing soil health position?

    • Awareness of soil health position and the role of manures would help in higher production of foodgrains in eastern India too and this would help tackle the decline in production in central and peninsular India.
    • The growth in foodgrains, rice and wheat, from eastern India would provide an opportunity to procure and create foodgrain reserves locally.
    • This would reduce the agricultural pressure on Punjab and Haryana as well.

     

    Is it Gujarat’s model programme?

    • From 2003-04, Gujarat has been the first state to introduce Soil Health cards, to initiate the scientific measures for Soil Health care.
    • In Gujarat, over 100 soil laboratories were set up and the result of scheme was found quite satisfactory.
    • To start with, the agriculture income of Gujarat from Rs 14000 crore in 2000-01 had gone up to staggeringly high Rs 80,000 crore in 2010-11.

    Why did government start taking effective action on soil health card initiative?

    • According to renowned expert and the ‘father of Green Revolution’, M S Swaminathan, there is need to opt for wide range of crops cultivation.
    • The awareness of soil health conditions would only make these operations easier and more result oriented. The government can help farmers adopt crop diversification.
    • The Soil Health Card mechanism definitely aims to help herald some essential revolutionary changes and salutary effect in country’s agricultural scene.
    • Farmers would understand the fertility factor of the land better and can be attracted towards value added newer crops.
    • This would help reduction in risk in farming and also the cost of overall cultivation process would get reduced.

    Why has Soil Health Card portal been launched?

    • Some states are already issuing Soil Health Cards but, it was found that, there was no uniform norm for sampling, testing and distribution of Soil Health Cards across the states.
    • Taking a holistic view on these, the central government has thus rightly taken measures like launching of a Soil Health Card portal.
    • This would be useful for registration of soil samples, recording test results of soil samples and generation of Soil Health Card (SHC) along with Fertilizer Recommendations.
    • Soil Health Card portal aims to generate and issue Soil Health Cards based on either Soil Test-Crop Response (STCR) formulae developed by ICAR or General Fertilizer Recommendations provided by state Governments.

    How will it be implemented by Union and State governments?

    • The scheme has been approved for implementation during 12th Plan with an outlay of Rs.568.54 crore.
    • For the current year (2015-16) an allocation of Rs.96.46 crore – only for the central government share-has been made.
    • The scheme is to be otherwise implemented on 50:50 sharing pattern between Government of India and state Governments.
    • In order to improve quality of soil and ultimately for better nutrient values and higher yields.
    • Experts say while at present, general fertilizer recommendations are followed by farmers for primary nutrients, the secondary and micronutrients are often overlooked.

    Can proactive steps and such programs lead to efficient and effective agriculture? Really?

    • The government is effectively marching in quite ambitiously for a grand success of the Soil Health Card scheme and proposes to ensure that all farmers in the country have their respective Soil Health Cards by 2017.
    • In the first year of NDA regime 2014-15, a sum of Rs 27 crore was sanctioned and in 2015-16, there is an allocation of Rs 100 crore to all the states to prepare soil health cards.
    

    
			
    
		
    
		
	
  • 
		
		
    
			
			
    BCCI Reforms – Lodha Committee, etc.
    
			
    Lodha Committee Report: Restoring the glory of the game
    

    To put an end to excesses and imbalances, corruption and red tape, all of which have harmed the game, the Lodha committee has examined reforms in the working of the Board of Control for Cricket in India (BCCI) to make its functioning transparent.
    



    

     
    

    What is the Lodha committee?
    

    The Lodha committee was formed in January, 2015 by the Supreme Court after the Mudgal committee report on IPL.
    

    In its earlier report in July 2015, the Lodha committee delivered its judgement by banning Meiyappan and Kundra for life and suspending the owners of Chennai Super Kings and Rajasthan Royals for 2 years.
    

    Let’s analyse the report under various dimensions
    

    The Lodha Committee has suggested sweeping reforms in the structuring and governance of cricket in the country.
    



    

     
    

    Structural Reforms: A major overhaul
    

      

    • The committee recommended that a 9-member apex council replace the 14-member BCCI working committee.
      • 

    • Each of these office-bearers has a three-year term and can contest for a maximum three terms.
      • 

    • The Lodha Committee also calls for dividing the governance into two parts: cricketing and non-cricketing.
      • 

    

    The non-cricketing management will be handled by 6 professional managers headed by a CEO, and the cricket matters like selection, coaching and performance evaluation should be left to the players
    

    Organisation & Office-bearers: Restrictions imposed
    

      

    • Each of these office-bearers has a 3-year term and can contest for a maximum three terms.
      • 

    • There will be a mandatory cooling off period after each term. Therefore, no office-bearer can hold office consecutively in a row.
      • 

    • No BCCI office-bearer can be Minister or government servant.
      • 

    

    State Cricket Associations: One Vote/State
    

    The Committee recommended that one association should represent an entire state and only one vote per state.
    

    Indian Premier League: Maintain distance
    

      

    • It recommends separate governing bodies for the IPL and BCCI.
      • 

    • There should be a 15-day gap between IPL season and national calender.
      • 

    

    Betting: Legalize it
    

      

    • It made a strong recommendation to lawmakers to legalise betting in cricket for all except cricket players, officials and administrators.
      • 

    • The players and others banned officials should disclose their assets to BCCI in a measure to ensure that they do not bet.
      • 

    

    Betting is a $ 400 billion phenomenon practised across the globe and lawmakers in India should enact laws to legalise it.
    

    Fixing: Criminalize it
    

    The committee said that match-and spot-fixing should be made a criminal offence.
    

    Conflict of Interest & Corruption
    

      

    • One individual hold only one post in cricket administration. The office-bearers would have to choose between positions in respective state associations and the parent body.
      • 

    • A former High Court judge should be appointed as ethics officer by the BCCI to administer issues relating to conflict of interest, misdemeanour and corruption.
      • 

    • A former Supreme Court judge should be appointed ombudsman to resolve internal disputes.
      • 

    

    Transparency: Bringing RTI to BCCI
    

    It recommended that the Legislature must seriously consider bringing BCCI within the purview of the RTI Act
    

    Securing player’s interest
    

      

    • It recommended the setting up of a Players’ Association to safeguard the interests of the cricketers.
      • 

    • The report said players that are the driving force of the game, but they had been reduced to the status of employees and subordinates of those governing the game.
      • 

    • The idea is to give players voice, use their expertise and skills for the development and betterment of the game
      • 

    

    Women Cricket: Often ignored by BCCI
    

    The Women’s Cricket Committee to be formed to exclusively pay attention to this much ignored department, along with Women’s Selection Committee.
    

    The proposed measures could radically alter the way the BCCI functions as well as vastly improve its public image and impart much-needed credibility.
    

    

     
    

    Published with inputs from Pushpendra 
    

    
			
    
		
    
		
	
  • 
		
		
    
			
			
    PPP Investment Models: HAM, Swiss Challenge, Kelkar Committee
    
			
    Kelkar Committee Report: Reforming the PPP
    

    In the Union Budget 2015-16, Finance Minister announced that the PPP mode of infrastructure development has to be revisited, and revitalized. In pursuance of this announcement, a Committee was constituted to look into the issues.
    

    The proposals include a provision for monetisation of projects, revamp of the model concession agreement and creation of a new institutional mechanism.
    

    What was committee asked to look into?
    

      

    • Review of the experience of PPP Policy.
      • 

    • Analyse risks involved in PPP projects in different sectors and suggest optimal risk sharing mechanism.
      • 

    • Propose design modifications in PPP based on international best practices and our institutional context.
      • 

    • Measure to improve capacity building in govt for effective implementation of the PPP projects.
      • 

    

    Why is there need to reform PPP framework?
    

    Background: PPP contracts are typically of very high-value, often with huge capital and operating costs.
    

      

    • The emergence of risks not foreseen at the time of signing the agreement exposes such projects to potential distress, making them unviable for the developers and prompting demands for a renegotiation of the original terms.
      • 

    

    



    

    How to manage risks in PPP projects?
    

      

    • Optimal allocation of risks across PPP stakeholders to boost investment.
      • 

    • Sector specific model concession pacts to capture interest of all stakeholders.
      • 

    

    What are the design modifications proposed by the committee?
    

    The Kelkar panel has come out with clear-cut norms on resolving issues and clarifying norms on re-negotiation of contracts.
    

      

    • Formulate a national PPP policy and seeking Parliament’s backing for it to be effective.
      • 

    • It emphasised upon the need to establish independent sector regulators for faster implementation of infrastructure projects and swifter dispute resolution mechanisms.
      • 

    • The report stated that the PPP structure should not be adopted for small projects.
      • 

    • It added that the govt should encourage development of airports, ports and railways through PPP, by ensuring easier funding for projects with long gestation periods.
      • 

    

    Let’s take a look at much deeper level about various specific dimensions of PPP framework and panel’s recommendation.
    

    How to streamline the stalled projects?
    

    Background: The Ministry of Statistics and Programme Implementation (MOSPI) says that 40% of all central govt infrastructure projects are behind schedule or have overshot their original cost estimates.
    

    Panel’s view: Follow the example of the Ministry of Road Transport and Highways, and NHAI, which has taken several successful steps in reducing the number of stalled projects in the sector.
    

    What are the institutions proposed in the report?
    

      

    • An Infrastructure PPP Project Review Committee be constituted.
      • 

    • It recommends creation of an Infrastructure PPP Adjudication Tribunal. 
      • 

    

    How to renegotiate the PPP contracts?
    

    Background: More than 50% of PPP projects come up for renegotiation.
    

    The panel has suggested extensive guidelines stipulating the reasons that form the basis for re-negotiation & those that should not be entertained as valid reasons.
    

    The panel wants full disclosure of few items prior to the renegotiation:
    

      

    • Long-term costs
      • 

    • Risks and potential benefits
      • 

    • Financial implications for the govt
      • 

    

    Panel has suggested formation of an independent body, like a renegotiation commission, which can oversee the renegotiation of model concession agreements across sectors.
    

    What is panel’s view on Swiss Challenge method?
    

    Swiss Challenge Method: It is a process of awarding contracts as any person with credentials can submit a development proposal to the govt, which will be made online and a second person can give suggestions to improve and beat that proposal.
    

    The Panel wants Swiss Challenge method to be actively discouraged.
    

    Reason: It brings information asymmetries in the procurement process and result in lack of transparency and in the fair and equal treatment of potential bidders in the procurement process.
    

    Criticism: India’s ambitious plan to build new expressways across the country by adopting the ‘Swiss Challenge’ method has become uncertain.
    

    Why report calls for changes in anti-corruption law?
    

    The report calls for promptly amending the Prevention of Corruption Act, 1988
    

    Reason: To differentiate between genuine errors in decision-making and plain corrupt practices.
    

    What is panel’s view on 3P India?
    

    Background: Finance Minister had announced the setting up of 3P India in 2014-15 budget with a corpus of Rs 500 crore.
    

    The panel wants the revival of a defunct proposal to establish 3P India to support PPP projects. It can function as a centre of excellence, enable research, and review and roll out activities to build capacity
    

    How to deal with private sector?
    

    The private sector must be protected against the loss of bargaining power over long time spans. It has asked for comprehensive guidelines to be framed in this regard.
    

    How to build capacity in PPP projects?
    

      

    • Strengthen 3 key pillars of PPP framework – governance, institutions and capacity.
      • 

    • Structured capacity building programmes for different stakeholders.
      • 

    • A national level institution to back institutional capacity building activities.
      • 

    

    The report pitches for pragmatism, transparency and a business-like attitude for all stakeholders.
    

    

    

    Published with inputs from Pushpendra 
    

    
			
    
		
    
		
	
  • 
		
		
    
			
			
    Foreign Policy Watch: India-Myanmar
    
			
    India and Myanmar relations: Change in dynamics by democratic triumph
    

    After decades of struggle, finally democracy triumphed over military junta and Myanmar parliament enters democratic era after 54 years of military rule. It’s time to glance over India-Myanmar relations and how India will be benefited from such stable democratic government.
    

    India and Myanmar have traditionally had much in common, with cultural, historical, ethnic and religious ties, in addition to sharing a long geographical land border and maritime boundary in the Bay of Bengal. Let’s see it in brief!
    

    How did India and Myanmar engagement begin ?
    

      

    • Myanmar is India’s bridge to east, and an important ally for growing its regional power.
      • 

    • India and Myanmar’s relationship officially got underway after the Treaty of Friendship was signed in 1951.
      • 

    • For many years, India did not open up to the authoritarian regime, and it was only over a period of time that India started engaging with the military junta of Myanmar.
      • 

    • The region’s focus has revolved around the SAARC countries and China, Myanmar is becoming increasingly important for India in both a strategic and economic context.
      • 

    

    What about bilateral trade ties?
    

      

    • Bilateral trade has grown from $12.4 million in 1980-81 to $2.18 billion in 2013-14.
      • 

    • Agricultural items like beans and pulses and forest based products make up nearly 90 percent of India’s imports.
      • 

    • Myanmar is also the beneficiary of a duty-free tariff preference scheme for least developed countries (LDCs).
      • 

    • Both countries also signed a border trade agreement in 1994 and have 2 trade points along their 1,643 km border.
      • 

    • India has also promoted some trade events such as the India Product Show 2012, which represented 19 Indian companies.
      • 

    

    But, How shared cultural links promote unique relations between both countries?
    

      

    • The two countries have shared cultural exchanges through various cultural troupes.
      • 

    • One such exchange was in 2009 when Myanmar sent a 13 member student group that attended a SAARC cultural festival in India.
      • 

    • This was followed by another major event at which the Indian embassy in Yangon organized the annual Indian Film Festival, which is a major event on the Yangon cultural calendar.
      • 

    

    Does India have historical bond with Myanmar?
    

      

    • Yes! Yangon was once a center for India’s independence struggle.
      • 

    • The Indian National Army (INA), formed by Indian nationalists during World War II in 1942 with the motto of Ittehad, Itmad aur Qurbani (Unity, Faith and Sacrifice).
      • 

    • Comprised over 40,000 soldiers, who fought valiantly against the British imperialist forces.
      • 

    • Netaji Subhas Chandra Bose became leader of the INA in 1943 and undertook a groundbreaking march towards Indian territories from Burmese soil with the aim of achieving Indian independence.<This time we can expect question on Netaji and his work, as we know current happenings about Netaji’s files declassified>
      • 

    • General Aung San, Burma’s independence hero, was a close friend of Netaji, the supreme commander of the INA.
      • 

    • That friendship was reflected in cordial relationship between the soldiers of the INA and their counterparts in the Burmese National Army (BNA).
      • 

    • So, it’s good to use this historical bond for building more coherent and strong relations with Myanmar.
      • 

    

    How Myanmar is Strategically significant to India?
    

      

    • Myanmar is strategically important to India as it is the only ASEAN country that shares a land border with India.
      • 

    • It is also the only country that can act as a link between India and ASEAN.
      • 

    • Myanmar is India’s gateway to Southeast Asia and could be the required impetus to realize India’s Look East Policy.
      • 

    • India has also decided to upgrade the Kalewa-Yargyi road segment to highway standard.
      • 

    • Myanmar would develop the Yargyi-Monywa portion, and this would help to connect Moreh in India to Mae Sot in Thailand via Myanmar.
      • 

    • This in turn would improve India’s connectivity and relationship with both Myanmar and Thailand.
      • 

    

    How can India become regional pivot in Asia?
    

      

    • If India is to become an assertive regional player in Asia, it has to work toward developing policies that would improve and strengthen it domestically.
      • 

    • This will encourage more confidence in its ability to lead the region and be an important global player.
      • 

    • Competition with China should also be considered and taken seriously. As China’s growing influence in the region would lead to a more one-sided dynamic in the region.
      • 

    • China has asserted itself through its soft power as well as through its trade and economic relations with Myanmar by taking up large infrastructure projects in the country.
      • 

    • India on the other hand needs to use its soft power more effectively, and at the same time strengthen itself domestically and regionally.
      • 

    

    What are advantages that India has over China with regard to Myanmar?
    

      

    • One is the democratic process, which results in different governments at the center and states through free and fair elections.
      • 

    • There is also the respect for institutions that are strong enough to hold the country together.
      • 

    • Finally, cooperation in different multilateral forums such as ASEAN and BIMSTEC strengthen the relationship between the 2 countries.
      • 

    • Apart from these reasons, India has sent a clear signal that while economic ties are important, it is keen to build a holistic relationship and is prepared to assist in institution building in Myanmar.
      • 

    

    What is the significance of Connectivity in India-Myanmar Relations? 
    

    <How North-Eastern region can play vital role in this?>
    

      

    • Myanmar’s vast oil and natural gas reserves and other resources make it a natural partner for many countries in the world.
      • 

    • India, being its next door neighbour, cannot be indifferent to this reality.
      • 

    • Besides, geo-political considerations, historical and civilizational links, and the ethnic overlap across their borders, have all come together to make India’s North-East the land bridge between the South and South-East Asia through Myanmar.
      • 

    • The 1,640 km-long border between Myanmar and the Indian states of Arunachal Pradesh, Nagaland, Manipur and Mizoram signifies the importance of this eastern neighbour for India.
      • 

    • India expects to reap various economic benefits by bolstering bilateral trade and investment, which critically depends upon better connectivity in the region.
      • 

    

    How bilateral cooperation agreement gives impetus to India’s Look-East Policy?
    

      

    • The strategic location of Myanmar is pivotal to India in reaching out to the economically vibrant South-East Asian countries.
      • 

    • India’s Look-East Policy envisages building infrastructure and expanding the transportation network including railroads, aimed at furthering surface connectivity in the region.
      • 

    • It is recognized that in addition to more economic contacts, such connectivity will promote social stability in the region by facilitating people-to-people contact amongst trans-border ethnic groups.
      • 

    • It is expected that insurgent outfits would lose their recruitment base once the local resources begin to be exploited and employment is generated leading to overall development. 
      • 

    • Concrete economic benefits are expected to come up in the region with establishment of border haats.
      • 

    • In addition, internal trade routes have the potential to enhance accessibility to sub-regional markets that connect Bangladesh, Myanmar and Bhutan.
      • 

    

    Way forward
    

      

    • The basic foundation for the relationship between India and Myanmar has been laid by previous governments, the onus is on the present Indian administration to demonstrate that it can take the relationship to a higher level.
      • 

    • India can become a strong regional player through a more proactive approach, cement India’s place in the region and grow into a powerful, global country.
      • 

    

     
    

     
    

    Published with inputs from Arun
    

    
			
    
		
    
		
	
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    Gravitational Wave Observations
    
			
    Eureka moment: Gravitational waves found
    

     
    

    

    Recently, Gravitational waves, the cosmic ripples that distort space-time itself, have been directly detected for the first time. Let’s know about this unprecedented discovery!
    

    

    What is so special about this eureka moment?
    

      

    • For the first time, scientists have observed ripples in the fabric of space-time called gravitational waves, arriving at the earth from a cataclysmic event in the distant universe
      • 

    • This confirms a major prediction of Albert Einstein’s 1915 general theory of relativity and opens an unprecedented new window onto the cosmos
      • 

    • Physicists have concluded that the detected gravitational waves were produced during the final fraction of a second of the merger of two black holes to produce a single, more massive spinning black hole
      • 

    • This collision of two black holes had been predicted but never observed
      • 

    

     Let’s first know about Albert Einstein’s general theory of relativity?
    

      

    • In 1905, Albert Einstein determined that the laws of physics are the same for all non-accelerating observers, and that the speed of light in a vacuum was independent of the motion of all observers. This was the theory of special relativity
      • 

    • It introduced a new framework for all of physics and proposed new concepts of space and time
      • 

    • Einstein then spent 10 years trying to include acceleration in the theory and published his theory of general relativity in 1915
      • 

    • In it, he determined that massive objects cause a distortion in space-time, which is felt as gravity
      • 

    

    [ Einstein’s mathematics showed that massive accelerating objects (such as neutron stars or black holes orbiting each other) would disrupt space-time in such a way that ‘waves’ of distorted space would radiate from the source ]
    

    What are Gravitational waves?
    

    Cataclysmic events, such as this artist's rendition of a binary-star merger, are believed to create gravitational waves that cause ripples in space-time
    Cataclysmic events, such as this artist’s rendition of a binary-star merger, are believed to create gravitational waves that cause ripples in space-time. Credits: NASA
    

    

      

    • Gravitational waves are distortions or ‘ripples’ in the fabric of space-time caused by some of the most violent and energetic processes in the Universe
      • 

    • These ripples would travel at the speed of light through the Universe, carrying with them information about their cataclysmic origins, as well as invaluable clues to the nature of gravity itself
      • 

    

    What are the Sources of Gravitational Waves?
    

      

    • Any object with mass that accelerates (which in science means changes position at a variable rate, and includes spinning and orbiting objects) produces gravitational waves, including humans and cars and airplanes etc.
      • 

    • But the gravitational waves made by us here on Earth are much too small to detect
      • 

    • The strongest gravitational waves are produced by catastrophic events such as colliding black holes, the collapse of stellar cores (supernovae), coalescing neutron stars or white dwarf stars, the slightly wobbly rotation of neutron stars that are not perfect spheres, and the remnants of gravitational radiation created by the birth of the Universe itself
      • 

    

    InfographLigo-gravitational-waves
    

    

    Not one but four types of Gravitational Waves!
    

      

    • In order to understand the types of gravitational waves, Laser Interferometer Gravitational Wave Observatory (LIGO) scientists have defined 4 categories of gravitational waves
      • 

    • These categories are: Continuous Gravitational Waves, Compact Binary Inspiral Gravitational Waves, Stochastic Gravitational Waves, and Burst Gravitational Waves
      • 

    

     But, Why Detect Them?
    

      

    • This will open up a new window of study on the Universe, giving us a deeper understanding of these cataclysmic events, and usher in brand new cutting-edge studies in physics, astronomy, and astrophysics
      • 

    • More importantly, since gravitational waves don’t interact with matter (unlike electromagnetic radiation), they travel through the Universe completely unimpeded giving us a crystal clear view of the gravitational wave 
      • 

    • This will provide astronomers and other scientists, first glimpses of previously unseen and unseeable wonders, and greatly adding to our understanding of the nature of space and time itself
      • 

    

     So, How does LIGO come into the Picture?
    

      

    • LIGO( Laser Interferometer Gravitational Wave Observatory) is the world’s largest gravitational wave observatory and a cutting edge physics experiment
      • 

    • LIGO exploits the physical properties of light and of space itself to detect and understand the origins of gravitational waves
      • 

    • LIGO has 2 widely separated identical detector sites working in unison as a single “observatory”: one in Hanford, southeastern Washington State and the other in rural Livingston, Louisiana
      • 

    • LIGO has a very close collaboration with the VIRGO collaboration that analyzes data from VIRGO, a 3 km gravitational wave interferometer located near Pisa, Italy
      • 

    • Data from LIGO and Virgo are combined and analyzed together by the LIGO and Virgo collaborations
      • 

    • Thus significantly increasing the capability of combined data for detecting and using gravitational waves to learn about nature
      • 

    

     Is there any Way ahead for India?
    

    Image - Locations of existing gravitational-wave detectors, and how far out a LIGO in India would be Source: LIGO
    Image – Locations of existing gravitational-wave detectors, and how far out a LIGO in India would be. Source: LIGO
    

    

      

    • Yes, because Union cabinet has approved a proposal to establish a state-of-the-art gravitational wave observatory in India in collaboration with LIGO in the US
      • 

    • The project will bring unprecedented opportunities for scientists and engineers to dig deeper into the realm of gravitational wave and take global leadership in this new astronomical frontier
      • 

    • This will also bring considerable opportunities in cutting-edge technology for the Indian industry which will be engaged in the construction of the 8-km long beam tube at ultra-high vacuum on a leveled terrain
      • 

    • With its establishment, India will join the global network of gravitational wave detectors
      • 

    • The establishment of an observatory in India assumes importance because the further the distance between the observatories, the greater will be the accuracy in locating gravity waves
      • 

    • Maharashtra and Madhya Pradesh are among the states shortlisted for the experiment
      • 

    

    Can we expect some answers from you guys?
    

    

    #Q. Recently, Union cabinet has approved a proposal to establish a gravitational wave observatory, one of the mega science projects in India. Discuss, how will this project help India if it becomes a reality.
    

    

     
    

    Published with inputs from Arun | Image: space.com
    

    
			
    
		
    
		
	
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    Real Estate Industry
    
			
    Challenges, opportunities & criticism of the Real Estate Regulatory Bill 2016
    

    The Real Estate Regulatory Bill, 2016 is being hailed as a much-needed step to reform the real estate sector. It will help regulate the sector and bring in clarity for both buyers and developers.
    

    What was the need for regulation in the real estate?
    

      

    • The real estate sector has some issues such as a lengthy process for project approvals, lack of clear land titles, and prevalence of black money
      • 

    • There wasn’t complete transparency as far as govt approvals were concerned
      • 

    • There were also instances when projects were sold without adequate clearances
      • 

    • The delayed projects, sometimes by up to 6 years and arbitrary changes in layout plans are rampant in the sector
      • 

    

    How does the Bill seeks to regulate the sector?
    

    The basic thrust of this Bill is to regulate the delivery of projects to home buyers. It provides them a legal safeguard for their investment, and seeks to address timely delivery of houses. It seeks to enforce the contract between the developer and buyer and act as a fast track mechanism to settle disputes
    

      

    • It establishes state level regulatory authorities called Real Estate Regulatory Authorities (RERA)
      • 

    • The Bill establishes state level tribunals called Real Estate Appellate Tribunals.  Decisions of RERAs can be appealed in these tribunals
      • 

    • It makes mandatory the disclosure of all information for registered projects like details of promoters, layout plan, land status, schedule of execution and status of various approvals
      • 

    • The Bill prohibits a developer from changing the plan in a project unless two-thirds of the allottees have agreed for such a change
      • 

    • It says that builders must specify the time-frame for completion of projects and stick to it, or be ready to pay penalties
      • 

    • The Bill mandates that 70% of the amount collected from buyers of a project be used only for construction of that project < This provision will effectively allow developers to continue their practice of diverting funds collected for a project towards land acquisition or other projects, and will work in their favour by also allowing them to grow their land and/or project portfolio>
      • 

    

    How will the Real Estate Regulatory Authorities help improve the sector?
    

      

    • Residential real estate projects need to be registered with RERAs, except few
      • 

    • Promoters cannot book or offer these projects for sale without registering them
      • 

    • Real estate agents dealing in these projects also need to register with RERAs
      • 

    • On registration, the promoter need to provide details of the project to the RERA
      • 

    

    Challenges ahead
    

      

    • The Bill will make life difficult for builders, as they would face more red-tapeism now, especially in procuring relevant approvals.
      • 

    • This Bill does not address the developers demand of a single-window clearance from the govt
      • 

    • The implementation of the Bill is up to the states, it leaves builders with greater chances of being harassed
      • 

    

    Impact
    

      

    • Timely completion of projects would lead to a steady increase in supply of homes
      • 

    • It is expected that these measures will eventually bring down home prices and increase demand
      • 

    • It will be good for the overall economy too, as the housing sector has strong backward (cement, steel and other building material industries) and forward (furniture and furnishings, interior decoration, electrical and electronics) linkages with other industries
      • 

    • More number of job creation in the economy
      • 

    

    Criticism
    

      

    • The builder lobbies argued that the bill should have a time-frame for municipal and other authorities to give timely approvals, because the delay in approvals lead to delays in handing over possession of apartments
      • 

    • In terms of pricing, which is governed by circle rates, it will be difficult to monitor
      • 

    

    Future
    

      

    • The states’ support for faster clearances to projects will be required to make this Bill successful
      • 

    • Govt is also trying to bring in a National Urban Rental Housing Policy, which would take into account the requirements of tenancy hassles in modern days
      • 

    

    

    Published with inputs from Pushpendra

    

    

    

    Sagarmala Project: Smart ports for Blue Revolution in India
    

    The Union Cabinet chaired by the Prime Minister Modi, on March,2015 gave its ‘in-principle’ approval for the concept and institutional framework of Sagarmala Project. Let’s take a glance on it.
    



    

    What’s the prime objective of Sagarmala?
    

    The prime objective of the Sagarmala project is to promote port-led direct and indirect development and to provide infrastructure to transport goods to and from ports quickly, efficiently and cost-effectively.
    

    What’s the current issue and background of ports in India?
    

      

    • At present there are around 200 ports (small and big) in the country, of these, only 12 are major ports which are government owned ports, which handle about 58% of sea-borne traffic.
      • 

    • These major ports operate as Trusts under the Major Ports Trust Act, 1963, except for the Port of Ennore, which is a company under the Companies Act.
      • 

    • There are legacy issues with these govt owned major ports, they do not keep pace with emerging technology, requirements of international trade, emerging trends in containerisation, flexible rules, size of ships etc.
      • 

    

    Which are the 12 Major Ports ?
    

    These are Kolkata (including Dock Complex at Haldia), Visakhapatnam, Chennai, V.O. Chidambaranar (Tuticorin), Cochin, New Mangalore, Mormugao, Jawaharlal Nehru Port Trust (JNPT), Mumbai, Kandla and Ennore.
    



    

    Just, Look back into the history?
    

    In 2003, then PM Vajpayee proposed Project Sagarmala with following features:
    

      

    • Setup Sagarmala Development Authority (Similar to National highway authority of India).
      • 

    • It will get money via Maritime development cess. (5 paise per kg on cargo).
      • 

    • It will improve ports, shipping industry, inland water transport, coastal shipping.
      • 

    • PPP and FDI to gather more investment.
      • 

    

    Then, which are the Key pillars to achieve Smart-development ?
    

      

    • Supporting and enabling Port-led Development through appropriate policy and institutional interventions.
      • 

    • Providing for an institutional framework for ensuring inter-agency and states’ collaboration for integrated development.
      • 

    • Port Infrastructure Enhancement, including modernization and setting up of new ports.
      • 

    • Efficient Evacuation to and from hinterland.
      • 

    

    What are some of the measures to make Smart Ports?
    

      

    • Ports should be registered as Companies under Companies Act.
      • 

    • The port administration should only look after the provisions of infrastructure and safety and not day-to-day running of the port
      • 

    • There is still no regulation to control the trade practices.
      • 

    • Hence, there is a dire need to introduce a regulatory architecture that takes care of ex-ante declaration of rates of services.
      • 

    

    Then, what’s the plan to implement such a vast initiative?
    

      

    • For a comprehensive and integrated planning for “Sagarmala”, a National Perspective Plan (NPP) for the entire coastline shall be prepared within six months.
      • 

    • It will identify potential geographical regions to be called Coastal Economic Zones (CEZ).
      • 

    • While preparing the NPP, synergy and integration with planned Industrial Corridors, Dedicated Freight Corridors, National Highway Development Programme, Industrial Clusters and SEZs would be ensured.
      • 

    

    What are the suggestions for effective mechanism at state level?
    

      

    • Set up State Sagarmala Committee to be headed by CM / Minister in Charge of Ports.
      • 

    • Sagarmala Coordination and Steering Committee (SCSC) shall be constituted under the chairmanship of the Cabinet Secretary and others.
      • 

    • This Committee will provide coordination between ministries, state governments and agencies connected with implementation and review the progress of implementation of the National Perspective Plan.
      • 

    

    How does it ensure the sustainable development in CEZ?
    

      

    • This would be done by synergising and coordinating with State Governments and line Ministries of Central Government through their existing programmes.
      • 

    • Such as those related to community and rural development, tribal development and employment generation, fisheries, skill development, tourism promotion etc.
      • 

    • In order to provide funding for such projects and activities that may be covered by departmental schemes a separate fund by the name ‘Community Development Fund’ would be created.
      • 

    

    What’s the role of Institutional Framework ?
    

      

    • It has to provide for a coordinating role for the Central Government.
      • 

    • It should provide a platform for central, state governments and local authorities to work in tandem and coordination under the established principles of cooperative federalism.
      • 

    

    What’s the role of NSAC?
    

    A National Sagarmala Apex Committee (NSAC) is envisaged for overall policy guidance and high level coordination, and to review various aspects of planning and implementation of the plan and projects.
    

    So, Is it Good to have smart ports on the line of Smart Cities?
    

    Can you answer some questions?
    

    #1. Can you examine the bottlenecks in Indian port infrastructure and list the initiative taken in recent times to address this issue?
    

    #Q.2 Indian port infrastructure can be revamped by Sagarmala project by effective management? critically comment.
    

    

    

    Published with inputs from Arun
    

    
			
    
		
    
		
	
  • 
		
		
    
			
			
    iOS app
    
			
    Your website has been really helpful… But please develop an iOS application for this great site.. Thank u
    

    
			
    
		
    
		
	
  • 
		
		
    
			
			
    Judicial Pendency
    
			
    Overcoming the backlog of cases: Judicial reform
    

    A British citizen, Will Pike was paralysed during the 2008 Taj Hotel blasts in 2008. Suing the hotel group for compensation, he wanted the trial to take place in London rather than in India. Accepting his contention, the London court allowed the matter, specifically stating that the trial in India could take some ‘twenty years’. This is a befitting example of the pendency in Indian judicial system and how it needs to be urgently addressed.
    

    THE MAGNITUDE OF THE PROBLEM
    

    The graphic below states the number of cases pending before the Courts in India. Currently, about 3.25 crore cases are pending in the Indian courts and Judges fear that this number might escalate to about 4 crore cases by the end of 2016. This problem gets escalated due to the crunch of Judges at all levels of Judiciary as seen in the graphic below.
    



    

     
    

    Timely justice is an integral part of access of justice and this huge backlog of cases amounts to denial and derailment of justice. This article will look into the proposed reforms for addressing this systemic problem.
    

    10 REFORMS FOR ADDRESSING JUDICIAL PENDENCY
    

    The 245th Law Commission Report on “Arrears and Backlogs: Creating Additional Judicial (W)omanpower has recommended the following measures
    

    1. Calculating Adequate Judge Strength through a more scientific analysis of data – In this context, the Commission has negated a simplistic method like Judge-Population ratio (Number of judges required per million people) in favour of a Rate of Disposal Method.
    

    In the Rate of Disposal Method, one looks at the current rate at which judges dispose of cases. Then, given that the institutions and disposal rate remain the same, the Courts would need how many more additional judges to keep pace with the new filings in Court so that the newly instituted cases do not add to the existing backlog.
    

    2. Judges to be appointed on a Priority basis: India currently has 1/5th of the number of judges it needs and thus, the Judges need to be appointed on a priority basis.
    

    3. Increasing the age of retirement for Subordinate Court Judges to 62 years.
    

    4. Creation of Special Courts for traffic/police challan cases: They constitute about 37.4% of the existing pendency before the subordinate courts.
    

    5. Provision for staff and infrastructure
    

    6. Periodic Needs Assessment by High Courts: Monitoring the rate of institution and disposal of cases and revising the adequate strength of Judges since a High Court is equipped with all the information relating to the subordinate courts in the State. The Malimath Committee had recommended setting up of Vigilance Cells in each district by the High Court to monitor the performance of subordinate judicial officers.
    

    7. Uniform data collection and data management methods : to bring in greater transparency.
    

    8. Need for a system-wide reform: The Commission has recommended the following:
    
● Greater encouragement to Alternative Dispute Resolution (ADR) and Lok Adalats <Can you tell us the difference among various types of ADRs, mediation, arbitration and conciliation? Answer in comments>
    
● Setting up non-mandatory time frames and performance benchmarks for resolution of different types of cases based on rational criteria.
    

    OTHER RECOMMENDATIONS
    

    9. Use of Technology : Has been recommended by the 230th Law Commission Report and the Malimath Committee Report to
    
(a) Club cases filed on similar points of law, which can be decided on the basis of a single judgment.
    
(b) Track old cases, which have become infructuous and dispose them off quickly
    
(c) Setting up E-Courts and ushering in E-filing. Has received a major boost under the e-Courts Integrated Mission Mode Project.
    

    10. Creation of All-India Judicial Service: Provided for under Article 312 of the Indian Constitution. The idea has been mooted by various bodies including the First Judicial Pay Commission and accepted by the Supreme Court. Art 2012 proposal regarding creation of this service has not received responses from all States and this proposal continues to be hanging in the air <can you tell us the procedure of creation of new all India service? Answer in comments>.
    

    CONCLUSION:
    

    Many steps are currently being taken by the Government and the Courts to address this problem.
    

      

    • Monthly National Lok Adalats are carried out for expeditious disposal of claims.
      • 

    • In March 2016, the Monthly Lok Adalat disposed of about 1.5 lakh cases and settled claims worth Rs. 100 crores <Where can one appeal against the decision of Lok Adalats. Also tell us about the jurisdiction of Lok Adalats. Answer in comments>
      • 

    • In criminal cases, the setting-up of fast-track Courts and “plea bargaining” have further expedited matters <Can you tell us what’s plea bargaining? Answer in comments>
      • 

    • The e-courts project, aimed at providing better Court management and a database of all pending cases with easier filing of important documents is underway.
      • 

    • Moreover, the National Litigation Policy 2015 is awaiting ministerial approval and seeks to reverse the trend of Government being the biggest litigant <did you know one of the argument for rejecting NJAC was that govt was the biggest litigant, therefore can have no role in appointment of judges>.
      • 

    

    However, in view of the burgeoning backlog and urgency of reducing backlog, the efforts need to be severely expedited.
    

    

    P.S. This article is published with inputs from a CD user  Joyousjojo (name changed on request).
    

    P.P.S. If you want to write explainers for CD, mail us your explainer at hello@civilsadily.com
    

    
			
    
		
    
		
	

	
	

		
	

	
	
	

		
	

	




	


	
	
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