Theme:

• According to the ‘National Education Policy’ 2020, which was launched in July 2020, the mother tongue or local/regional is to be the medium of instruction for students till class 5. Compulsory education in mother tongue sparked debates throughout the country.

In Favor:

• Language represents the culture and lifestyle of society. Education is to prepare for life in society. Learning about our culture and other subjects in a foreign language can lead to confusion and lack of clarity.
• The biggest loophole in our education system the rote learning,  i.e. byhearting the subjects. Having English as the medium of instruction will worsen the situation.
• There are many English medium schools in India. But most of their teachers have no skills to teach in English, risking the children’s studies.
• A survey by Oxford University revealed that children, who have their mother tongue as medium of instruction outperform the children, who have a foreign language as the medium of instruction.
• Having good command over one language helps a lot in learning other languages. But the children that are having another language as the medium of instruction aren’t getting command either on their mother tongue or on their medium of instruction.

Against:

• Switching the medium of instruction in the middle of the school or later may put stress on students.
• As the world is increasingly globalized, children should be taught in the international language, i.e. English. So that they can grab more opportunities.
• English is an official language of India. And most Indians can speak English. So, it’s not a totally new language to us.

Facts:

• The trend of English medium as the medium of instruction is increasing continuously not just in India but in many other countries.
• This phenomenon is mostly in private schools than in public schools.
• In India, parents are enrolling their children in English medium schools to provide them with a better future and also because of the prestige associated with English.

The situation in other countries:

• China, Japan, Germany and many other countries are doing very well without English education.
• ‘Philippines’ revised its education system and started to implement the mother tongue as the medium of instruction. And the result is the drastic increase in enrollments in rural areas.
• ‘Guatemala’ witnessed decreased dropouts and increased literacy rates, when it implemented the mother tongue as the medium of instruction. This step reduced their education expenditure.
• ‘Mali’ did the same and witnessed increased creativity and innovative skills in children.

Conclusion:

To learn English, it’s not required to learn all the subjects through English. To get a good grip on the subjects and their mother tongue, children should be taught in their mother tongue at least in the primary school level. But the option should be voluntary.

Theme:-

• At the 14th G20 summit, which was held in June 2019, India backed data localisation laws.
• In April 2018, Reserve Bank of India (RBI) had issued a circular which mandated payment system operators to store entire data related to financial data only in India. The deadline for making these changes was 15th October 2018. Approximately 80% of the payment system operators including Google, Paytm, Amazon complied with the rule. But several companies including Visa, Mastercard missed the deadline due to confusion over data localisation rules.
• In June 2019, RBI gave clarifications regarding the rules stating that in case the processing is done abroad, the data should be brought back to India in not later than 24 hours, and also the data should be deleted elsewhere. And in the case of cross-border transactions, a copy of data can be stored abroad.

What is Data Localisation:-

• Data Localisation means storing the data within the territorial boundaries of the country.

Positive side:-

• Data is considered as a ‘new form of wealth’. Generally, companies use data to understand the requirements of consumers and also to influence their behaviour. New products can be developed by analysing the data to meet the needs of consumers. So the data has an economic value. In general, developed countries are utilising this opportunity with their well-developed infrastructure. There is also a probability that the data will be misused in favour of the countries that store data. Moreover, India is a big consumer market for many foreign companies. So, India and other developing countries are realizing the economic value of the data and the importance of data localisation. With data localisation, domestic companies and the country’s economy will be benefited. And we can also ensure the security of the data.
• While investigating crimes, there will be a need to access the payments data. If the data is stored abroad, it is very difficult to take the permission of that country for access to the data. This causes delays in solving crimes. If the data is stored here within our country, this problem will be avoided.
• Data localisation laws result in setting up of multiple data centres locally. This will create many jobs and will help the country’s economy immensely. It will also drive innovation in the field resulting in low-cost solutions.
• Data localisation is also important for data sovereignty, which means the data of the citizens should be owned by the respective governments and not by other countries.
• We can also ensure data privacy by localising the data.

Challenges:-

• At present, India does not have the well-developed infrastructure to ensure the security of data. On the other hand, developed countries already have an efficient infrastructure. So, rushing towards data localisation may not be a wise step. Because without efficient infrastructure, the data is prone to cyber attacks. And the risk is severe here because it is financial data. But as the laws are made, it is a big challenge to develop efficient infrastructure at a faster pace.
• Storing data in India means higher operational costs for payment system operators. Because in other countries they have cheaper alternatives. And also for cross-border transactions, they have to store the data in two places, which increases costs. There is a probability that these extra costs may pass on to the consumers.
• And there is no guarantee that they will delete the data elsewhere. They may continue to store and analyse the data for their own advantage.
• We are in a globalised world. At present, the world is running on the free flow of people, goods, services and data. Data localisation laws seem to be a part of protectionist policies, which is a threat to the free flow of data.
• The base of the internet is the free flow of data. Data localisation is also a threat to the main essence of the internet.
• US is against to the data localisation laws. Recently at G20 summit, Donald Trump, the president of US spoke against data localisation. Its stance is natural because it increases the operational costs of US companies. India-US bilateral relations are important for both countries because we are intertwined in export and import of IT services, professionals and goods etc. So, imposing data localisation laws without threatening the Indo-US relations is another challenge.
• Innovation thrives when there is no much financial burden. And hence data localisation laws may threaten the innovation attempts in the digital payments industry.
• If the processing of the payment transactions is done in another country, that country may ask these companies to submit the data. So, asking them to delete the data in 24 hours may interfere with the laws of the country where the processing is done.
• Data localisation may result in government surveillance of its citizens.
• It is also against intellectual property rights because they use their intelligence to form systems that can benefit from the data it generates, but in the end, they are deprived of these benefits and someone else may use this data in their favour.

Theme :-

• After Pulwama terror attacks, India requested United Nations to list Masood Azhar as a global terrorist. Even though 14 countries of UNSC are in favor of the proposal, China blocked the request using its veto power. That is the reason, Indo-China relations is in news again. 

Main disputes between India & China :-

• India & China have border issues mainly at Aksai Chin & Arunachal Pradesh. Border dispute is the main reason for Indo-China war 1962, and the recent Doklam standoff in 2017.
• China is maintaining good relations with Pakistan. It is building most advanced naval warships for Pakistan, and it is also selling weapons to Pakistan. As a result of this, India has national security concerns. And as a part of Belt & Road initiative, China is building infrastructure projects in Pakistan, which is called as China-Pakistan Economic Corridor, CPEC – This CPEC is passing through Pakistan Occupied Kashmir. India is not ok with it because of security concers. So this became another dispute between India & China. 
• There are water issues between the both countries. China started projects to divert Brahmaputra water from flowing into India. This is one of the major threats to India from China. 
• China is objecting to list masood Azhar as a global terrorist. This is because China fears that if it agrees for this, the next step of India can be to seek labelling of Pakistan as state sponsor of terrorism. As China has economic interests in Pakistan, it will not accept that proposal. And that is the reason even though China is against to terrorism, it is not accepting to list Masood Azhar as a global terrorist. But China should understand that its stance on Masood Azhar issue is not just a threat to international counter-terrorism efforts, but also damages its international image, because the whole world is accepting India’s concerns on the threat of terrorism. 
• China is blocking India from entering into Nuclear Suppliers Group. This is another issue between India & China. 
• There is a huge trade deficit between India & China. In the fiscal year 2017-18, there is 46.2 billion dollar trade deficit in China’s favor. 
• China is trying to encircle India by establishing its military and commercial activities in Indian ocean, which is famously called as String of pearls theory. This string of pearls is a threat to India’s national security. 
• India is trying to restrict China’s monopoly over South China sea, because it is one of the main trade routes. Thereby South China sea became one of the main issues between India & China. 

 On the positive side :-

Despite having differences, India & China has been maintaining good relations. Even in ancient times, there was a good relationship between India & China. This can be evident in the presence of Buddhism in China. Buddhism spread from India to China. If we analyse the relationship between both countries in the modern times.

• India is the first non- communist country to recognize communist China in 1950. 
• For peaceful co-existence, both countries signed Panchsheel agreement in 1954. Panchsheel means Five principles of peaceful co-existence.
• India & China share common interests like eliminating terrorism, developing Asia etc. That is the reason both countries are part of regional co-operation organizations such as BRICS, Shangai Co-operation organization, G20 etc. 
• Both countries have good trade relations. And to improve bilateral relations, India & China took part in an informal meeting at Wuhan in April 2018, which is called as Wuhan summit. This was an informal meeting between 2 leaders of the countries to reach a better consensus on the present disputes between both countries. 

Causes of Air pollution in India :-

• Increasing usage of Automobiles.
• Dust kicked up by vehicles moving on roads.
• Increasing constructions and demolitions of buildings.
• Increasing demand for houses is leading to deforestation, which is worsening the quality of air further.
• Industrialization.
• Burning of crop residue. This is highly prevalent in Punjab and Haryana.
• Burning of garbage.
• Still many Indians are using firewood and cow dung for cooking.
• Greenhouse gas emissions due to burning of biomass residue.
• Usage of diesel vehicles.
• Adulterated fuel blends by many Indian taxis and auto rickshaws. These adulterants increase emissions of harmful pollutants from vehicles, worsening urban air pollution.

Effects of Air pollution :-

• Negative impact on health of humans as well as other living beings. Mainly, children and old people are vulnerable to adverse health effects caused by air pollution.
• Air pollution is the leading environment cause of death. In 2015, India reported 11 lakh deaths due to air pollution.
• Increase in spread of non-communicable diseases due air pollution has accounted for 62% of the total diseases in India.

Steps Taken by Indian Government :-

• Government of India enacted the “Environment (Protection) Act, 1986 (EPA)” under article 253 of the constitution after the dreadful incident of Bhopal gas tragedy.
• Indian government removed subsidies for polluting cooking gases to improve access to clean fuel for household cooking.
• The Delhi government has tried odd-even rule to reduce air pollution.
• Supreme Court banned registrations of diesel cars above 2000cc in Delhi, which is one of the highest air polluted cities of India.
• Indian government banned firecrackers on weddings.
• Burning of solid waste is banned.

What more needs to be done :-

• Allocation of more funds for afforestation projects.
• Betterment of public transportation.
• Enhancing the quality of roads.
• Encouraging community forests.
• Incentives for Eco-friendly buildings.
• Encouraging the usage of clean fuels.
• Investing more in energy generation from renewable resources.
• Encouraging work from home culture to reduce vehicular pollution.

Best Practices in Other Countries:-

• ‘Paris’ has set few good practices such as implementing odd-even bans on vehicles, making public transport free during high pollution days and encouraging car & bike-pooling.
• ‘Netherlands’ is working on plans to to ban the sale of all petrol and diesel cars from 2025 and allowing only electric or hydrogen vehicles.
• ‘Copenhagen’ now has more bicycles than people.

The Bombay HC has issued notice to the I&B Ministry, Union Ministry of Electronics and Information Technology, Ministry of Law and Justice, Ministry of Home Affairs and the Nagpur police commissioner and asked for their response, in regard to the PIL filed by Divya Ganeshprasad Gontia. The court has advised setting up of a pre-screening committee to regulate the movies and shows which are released directly on online platforms like Netflix & Hotstar. Thus it is clear that censorship for web series and content on digital medium is very much on the cards.

But online platforms like Netflix, Hotstar, AltBalaji, SonyLiv and others have signed self-censorship code, which prohibits signatories from showing any content that has been banned by Indian Courts. Amazon Prime Video, the streaming service of e-commerce giant has kept out of the code stating that the existing laws are adequate.

While the decision of probable censorship has aroused a mixed reaction on social media by Indian film industry and the general public, it is important to understand the pros and cons that would come along.

Pros :-

• Due to the advantage of wide reach, the web series and content on digital media is easily accessible to all. Children are at major disadvantage when they view content that is related to violence, strong language and sex.
• In the past years people have filed legal complaints regarding the harsh content on digital platform and arguing for censorship on series and movies released on internet that have the potential to create bad influence.
• The Central Board of Film Certification (CBFC) has reported that the casual usage of sex and crass language in such web series is a bait to attract the audience. This raises a question if the online entertainment industry should be kept law free and what affects this would have on children.
• Some people feel worried about the increasing foreign culture influence that web series and movies promote censorship will control this to some extent.

Cons :-

• Producer Ritesh Sidhwani, who has produced series like “Inside Edge” and “Mirzapur”, believes that censorship will hamper the originality of the story. He said it the responsibility of the makers to take care of the content and depict only the reality.
• People feel that by making the web series industry regulated the lawmakers will only be covering up for a reality that is widely evident in certain states.
• The censorship norm is being criticized as people feel that it is curbing the freedom and creativity of Indian filmmakers, who are anyways at a disadvantaged position due to constraints on movie content.
• People also feel that rather than censoring the content, it is more important to pay attention to the ratings that are provided. Moreover it is the responsibility of the audience to perceive the content in a respected manner.

Causes :-

• Machines are replacing humans. Automation is causing loss of jobs.
• In India, still many people are not able to afford education, and are forced to live unemployed.
• Our education system is not uniform throughout the country. Quality education is still a dream to many. Because of this, many do not have enough skills to compete in the job market.
• Even in this 21st century, some families in India do not allow women to work, and hence there is so much unemployment in Indian women.
• India ranking second in terms of population with 6 million and still counting people, this problem becomes increasingly serious and hopeless. Providing jobs to this much population is not that easy. Where the government is trying its best to shorten the gap, it becomes worse with the rate of growth of population.

Effects:-

• Increase in unemployment is directly proportional to the rate of growth in the economy of any country. With such enormous number of unemployed people,
• With less money in their pockets, people are restricted to change and upgrade their lifestyle and get in sync with the outside world today. This is causing low standards of living.
• Now that people either don’t have jobs or are poorly paid, in order to meet the demands of daily routine, weak people tend to fall into the trap of illegal jobs and commit criminal offences for money. This is causing robberies, kidnaps, murders, drug trade etc.
• Along with the middle-class family standard gradually moving towards the high-class society, the poor society in moving in the opposite direction which is eventually pulling them below the poverty line. Gap between the rich and poor is widening.

STEPS TAKEN BY GOVERNMENT

• Skill India initiative was launched to train youth for the jobs in demand, and hence bridging the gap of lack of skilled professionals and unemployment.
• Integrated Rural Development Program: IRDP was launched in 1979 to supply more jobs for the rural people. This program brought employment in the areas of agriculture, fisheries, road constructions etc benefitting 182 lakh families and thus became very known.
• Drone Prone Area Program: DPAP was launched in those areas struck with drought for quite some time. This was introduced for the prime reason to delete seasonal employment from the society. Approximately 474 crores were spent on this plan.
• Jawahar Rozgar Yojana: This became very popular in the year of 1989 with the sole objective of providing employment to minimum one member in the family which led to an immediate shoot up in the employment rate.
• Nehru Rozgar Yojana: This also emerged in the year of 1989 with a new idea of introducing three schemes. These schemes included small jobs for poor urban people, employment to cities having the lowest score in terms of daily wage.
• Employment Assurance Scheme: This scheme aimed at providing jobs in 1752 backward class blocks in various cities like West Bengal, Kerala, and Rajasthan.
• Swaran Jayanti Rojgar Yojana: In addition to the Nehru Yojana, this aims at eradicating unemployment in urban areas by offering wage employment by spending 125 crores on this plan.
• Make In India: This was an initiative planned by our Prime Minister Narendra Modi generating employment especially in manufacturing industries and boycotting foreign made goods.

THINGS TO BE DONE

• he steps taken by the government till now have been successful in providing jobs but most of them are temporary. People now demand permanent employment giving them job security.
• Still 22% of Indian population lives below the poverty limit. This strongly discourages India to move forward in the struggle of becoming one of the developed countries.
• In order to make people have a good living, they must acquire a proper education, this being their basic rights. (Right to Education).  Literacy levels should be improved.
• More jobs should be created in corporate sector. For those who have the required skills yet find it hard to get employed and have a decent job, overpopulation of India is making it even more hard with such limited job opportunities.

In January 2017, the Economic Survey of India suggested setting up a ‘Public Sector Asset Rehabilitation Agency‘ (PARA). On May 8th 2018, the then interim finance minister Piyush Goyal hinted towards the possibility of setting up a “Bad Bank” for which a panel was working to assess its possibility in India. A “Bad Bank” is basically an Asset Restructuring Company in its functioning. These steps were taken in light of the increased number of NPAs in the Indian banking sector. The NPAs amount to ₹10 lakh crore as of 2019.

The concept :-

The term Bad Bank first came into existence in 1988 in the USA. A Bad Bank is basically an asset restructuring company which takes on the bad loans/non-performing assets of banks at a discount and sells it off. This provides a clean balance sheet to the banks which in turn are able to perform better in the markets. Banks are usually specialized in lending and not in recovery. Bad Banks, in turn, are specialists in recovery. This division of roles helps in faster lending and recovery for both the entities and, in turn, helps the economy to be free from bad loans.

CHALLENGES TO BE FACED BY BAD BANK IN INDIA

• The first and foremost problem that arises is that of capital required to buy the NPAs from the PSB even at discount rates. The Bad Banks would have to infuse a huge amount of capital for buying off the loans. The government proposed that the required capital would be arranged from the cash reserves of the RBI. This again is a cumbersome and risky proposal.
• The bad loans are mainly due to 25-30 business houses/promoters in the economy. They account for about 50% of the total NPAs. So, just to tackle these 25-30 entities, forming a separate entity would be too costly a proposition.
• Though Bad Banks have been successful in a lot of countries, India differs from them in a significant manner. In other countries, the NPAs are from bankrupt companies mostly, but in India, NPAs are mostly due to loss-making companies. If given the right financial help and restructuring, these companies could easily be revived.
• Bad Banks will only be helpful in case of willful defaulters and not for non-willful defaulters. The Bankers themselves would have to deal with the non-willful defaulters.
• India has diverse companies and NPAs, depending on a single entity and its efficiency to get rid of such behemoth of a task would be illogically optimistic.
• The Insolvency & Bankruptcy Code (IBC) already exists in India to tackle NPAs. A better implementation of the IBC could easily help with the NPAs. All the steps taken by the government so far have all been good, but successful implementation of them could really go a long way.

When Premchand Degra’s father passed away, he was still in the fifth standard and it changed his priorities completely. He decided he needed to look for work and only go to school after work.

But even while growing up, Degra’s strength was impressive. He never took part in any formal sport in his early years but there was always some wrestling to be done in his village and that was a talent that served him well.

He took to wrestling and won medals for his school and at the district level too. After joining the Punjab police in 1975, he continued to wrestle until one day, a former teacher suggested that he should start bodybuilding.

It was a strange suggestion because Degra didn’t know much about bodybuilding and neither did his teacher. Still, it wasn’t until August 14, 1980 that the bug truly bit Degra.

It is a day Degra remembers well. He had decided to go watch Mr Punjab and Mr North India competition but once he got there, he decided to take part in the competition as well.

“At that point, I was very fit because of my wrestling. I used to do around 2000 pushups and sit-ups and lots of running. And I saw that the bodybuilders were repeating the same poses. I thought to myself, ‘I can do this’,” said Degra in an interview.

Degra did his best and when the results came later in the evening, he was surprised to learn that he had managed to claim first place in both competitions.

“I told myself, this is very easy. I didn’t even do much,” Degra recalled.

Getting serious

But now, Degra took to bodybuilding seriously. He finished third in the national championship that very year and by 1983, he was ready to take things up a notch.

He clinched Mr. Asia 1983 (Lahore – Pakistan), Mr. Asia 1984 (Seoul – Korea), Mr. Asia 1985 (Singapore), Mr. Asia 1986 (Taipei – Taiwan), Mr. Asia 1987 (Kuala Lumpur – Malaysia), Gold in Pro-Am Classic in 1990 and 1991 (Singapore), Mr. Asia 1996 (New Delhi – India). In addition to these titles, he also won the Mr India title nine times in a row.

But it was his fourth-place finish at Mr Universe competition in 1985 that truly marked him out as a man on the rise. He had finished 14th in 1984 and the huge improvement won him the award for the most improved bodybuilder.

Degra followed up the fourth-place finish with a silver in the Mr. Universe contest at Tokyo in 1986 and another 4th place at Madrid (Spain) in 1987.

Then, came the year 1988. By this point, Degra was working out for eight hours every day (four hours in the morning and four in the evening). He was also consuming eight vegetarian meals throughout the day.

And the result of all that saw him finally being crowned the 1988 Mr. Universe in Australia after winning a Gold in Middle-Weight class. The title also earned him the opportunity to compete in Mr Olympia, which he did after turning pro in 1989.

He was only the third Indian bodybuilder after Montosh Roy (1951) and Manohar Aich (1952) to claim the prestigious Mr Universe title.

His international wins first earned him the Arjun Award in 1986 – for outstanding achievement in National sports – and then a Padma Shri, India’s fourth highest civilian award, in 1990.

Inflation is an economic phenomenon that describes the general increase in the prices of goods and services in the economy. So inflation is the rate at which the average prices of certain selected goods increase in a given time period.

So inflation also indicates the loss of purchasing power of the consumer. The same unit of currency will buy fewer goods and services as their prices increase. This is the loss of purchasing power of the currency of a country.

EFFECTS OF INFLATION

Persistent inflation in an economy can have some very adverse effects. Many problems currently plaguing our economy are results of inflation in our economy. Rapid inflation can disrupt our entire economy can cause a financial crisis in the country. Let us take a look at some of the adverse effects that are results of inflation in the Indian Economy.

Balance of Payments

India’s current account deficit is around 17 billion dollars for the last quarter of 2018. This is roughly 2.5% of our GDP. This is because for years now India’s imports are mismatched with their exports. With increasing prices of goods in India, exports have seen a further decline. And the imports have actually become cheaper. So the current account deficit will continue to be a problem for our economy.

Industrial Sector

India has seen a stagnation in the industrial growth in the last few years. The industrial growth for the month of February 2019 year-on-year was merely 0.1%. This is because inflation has adversely affected the industrial sector as well.

The rising prices mean that the factors of production like labor and raw materials have also become expensive. The profit margins of the companies are decreasing. And after an extent, the companies pass on the burden of these additional expenses to the final consumer. And the entire economy suffers.

Banks will increase interest rates as inflation increases otherwise real interest rate will be negative. (Real interest =
Nominal interest rate – inflation). This makes borrowing costly for both consumers and corporate. Thus people will
buy fewer automobiles, houses and other goods. Industries will not borrow money from banks to invest in capacity
expansion because borrowing rates are high.

Higher interest rates lead to slowdown in the economy. This leads to increase in unemployment because companies
start focusing on cost cutting and reduces hiring. Remember Jet Airways lay off over 1000 employees to save cost.

Rising inflation can prompt trade unions to demand higher wages, to keep up with consumer prices. Rising wages
in turn can help fuel inflation.

Inflation affects the productivity of companies. They add inefficiencies in the market, and make it difficult for
companies to budget or plan long-term. Inflation can act as a drag on productivity as companies are forced to shift
resources away from products and services in order to focus on profit and losses from currency inflation.

Final Consumer

The person most affected by rising inflation is the final consumer of goods. The prices of goods and services are constantly rising. But the salaries and income of consumer do not rise proportionately, there is a lag. So the goods and services become less affordable to these final consumers. And the population in the lowest income group are the most affected. They cannot even afford basic necessities.

Investments

One of the major results of inflation in an economy is the general slowdown of the economy. When this happens unemployment rates rise, the purchasing power of the consumer decreases, credit becomes expensive. All these cause a strain on the entire financial system of the country. It discourages heavy investment in the economy by both domestic and international players.

After the introduction of the Insolvency and Bankruptcy Code, 2015 in the Lok Sabha on 21st December 2015, it was referred to the Joint Committee. On such a referral the Committee had presented its recommendations and a modified Bill based on its suggestions. In May 2016 both the Houses of Parliament passed the Insolvency and Bankruptcy Code, 2016. The major objective of this economic reforms is to focus on creditor drove insolvency resolution.

nsolvency resolution in India took 4.3 years on an average.  This is higher when compared to other countries such as United Kingdom (1 year) and United States of America (1.5 years).  These delays are caused due to time taken to resolve cases in courts, and confusion due to a lack of clarity about the current bankruptcy framework.

APPLICABILITY OF THE CODE

The provisions of the Code shall apply for insolvency, liquidation, voluntary liquidation or bankruptcy of the following entities:-

1. Any company incorporated under the Companies Act, 2013 or under any previous law.
2. Any other company governed by any special act for the time being in force, except in so far as the said provision is inconsistent with the provisions of such Special Act.
3. Any Limited Liability Partnership under the LLP Act 2008.
4. Any other body being incorporated under any other law for the time being in force, as specified by the Central Government in this regard
5. Partnership firms and individuals

Exceptions: There is an exception to the applicability of the Code that it shall not apply to corporate persons who are regulated financial service providers like-

• Banks;
• Financial Institutions; and
• Insurance companies.

OBJECTIVES OF THE CODE

The 2016 Code applies to companies and individuals.  It provides for a time-bound process to resolve insolvency.  When a default in repayment occurs, creditors gain control over debtor’s assets and must take decisions to resolve insolvency within a 180-day period.  To ensure an uninterrupted resolution process, the Code also provides immunity to debtors from resolution claims of creditors during this period. The Code also consolidates provisions of the current legislative framework to form a common forum for debtors and creditors of all classes to resolve insolvency.

WHO FACILITATES THE INSOLVENCY RESOLUTION UNDER THE CODE ?

The Code creates various institutions to facilitate resolution of insolvency.  These are as follows:

• Insolvency Professionals: A specialised cadre of licensed professionals is proposed to be created. These professionals will administer the resolution process, manage the assets of the debtor, and provide information for creditors to assist them in decision making.
• Insolvency Professional Agencies: The insolvency professionals will be registered with insolvency professional agencies. The agencies conduct examinations to certify the insolvency professionals and enforce a code of conduct for their performance.
• Information Utilities: Creditors will report financial information of the debt owed to them by the debtor. Such information will include records of debt, liabilities and defaults.
• Adjudicating authorities: The proceedings of the resolution process will be adjudicated by the National Companies Law Tribunal (NCLT), for companies; and the Debt Recovery Tribunal (DRT), for individuals. The duties of the authorities will include approval to initiate the resolution process, appoint the insolvency professional, and approve the final decision of creditors.
• Insolvency and Bankruptcy Board: The Board will regulate insolvency professionals, insolvency professional agencies and information utilities set up under the Code.  The Board will consist of representatives of Reserve Bank of India, and the Ministries of Finance, Corporate Affairs and Law.

PROCEDURE FOR RESOLVING INSOLVENCY UNDER THE CODE

• Initiation: When a default occurs, the resolution process may be initiated by the debtor or creditor. The insolvency professional administers the process.  The professional provides financial information of the debtor from the information utilities to the creditor and manage the debtor’s assets.  This process lasts for 180 days and any legal action against the debtor is prohibited during this period.
• Decision to resolve insolvency: A committee consisting of the financial creditors who lent money to the debtor will be formed by the insolvency professional. The creditors committee will take a decision regarding the future of the outstanding debt owed to them.  They may choose to revive the debt owed to them by changing the repayment schedule, or sell (liquidate) the assets of the debtor to repay the debts owed to them.  If a decision is not taken in 180 days, the debtor’s assets go into liquidation.
• Liquidation: If the debtor goes into liquidation, an insolvency professional administers the liquidation process. Proceeds from the sale of the debtor’s assets are distributed in the following order of precedence: i) insolvency resolution costs, including the remuneration to the insolvency professional, ii) secured creditors, whose loans are backed by collateral, dues to workers, other employees, iii) unsecured creditors, iv) dues to government, v) priority shareholders and vi) equity shareholders.

FLAWS IN THE CODE

• The Bankruptcy Board (regulator) will regulate insolvency professional agencies (IPAs), which will further regulate insolvency professionals (IPs).  The rationale behind multiple IPAs overseeing the functioning of their member IPs, instead of a single regulator is unclear. The presence of multiple IPAs  operating simultaneously could enable competition in the sector. However, this may also lead to a conflict of interest between the regulatory and competitive goals of the IPAs.  This structure of regulation varies from the current practice where the regulator directly regulates its registered professionals.  For example, the Institute of Chartered Accountants of India (which regulates chartered accountants) is directly responsible for regulating its registered members.
• The Code provides an order of priority to distribute assets during liquidation. It is unclear why: (i) secured creditors will receive their entire outstanding amount, rather than up to their collateral value, (ii) unsecured creditors have priority over trade creditors, and (iii) government dues will be repaid after unsecured creditors.
• The smooth functioning of the Code depends on the functioning of new entities such as insolvency professionals, insolvency professional agencies and information utilities.  These entities will have to evolve over time for the proper functioning of the system.  In addition, the NCLT, which will adjudicate corporate insolvency has not been constituted as yet, and the DRTs are overloaded with pending cases.

Recently, the Union Cabinet has approved the new National Education Policy (NEP), 2020 with an aim to introduce several changes in the Indian education system – from the school to college level.

• The NEP 2020 aims at making “India a global knowledge superpower”.
• The Cabinet has also approved the renaming of the Ministry of Human Resource Development to the Ministry of Education.
• The NEP cleared by the Cabinet is only the third major revamp of the framework of education in India since independence.
  • The two earlier education policies were brought in 1968 and 1986.

• School Education:
  • Universalization of education from preschool to secondary level with 100% Gross Enrolment Ratio (GER) in school education by 2030.
  • To bring 2 crore out of school children back into the mainstream through an open schooling system.
  • The current 10+2 system to be replaced by a new 5+3+3+4 curricular structure corresponding to ages 3-8, 8-11, 11-14, and 14-18 years respectively.
    • It will bring the uncovered age group of 3-6 years under school curriculum, which has been recognized globally as the crucial stage for development of mental faculties of a child.
    • It will also have 12 years of schooling with three years of Anganwadi/ pre schooling.
  • Class 10 and 12 board examinations to be made easier, to test core competencies rather than memorised facts, with all students allowed to take the exam twice.
  • School governance is set to change, with a new accreditation framework and an independent authority to regulate both public and private schools.
  • Emphasis on Foundational Literacy and Numeracy, no rigid separation between academic streams, extracurricular, vocational streams in schools.
  • Vocational Education to start from Class 6 with Internships.
  • Teaching up to at least Grade 5 to be in mother tongue/regional language. No language will be imposed on any student.
  • Assessment reforms with 360 degree Holistic Progress Card, tracking Student Progress for achieving Learning Outcomes
  • A new and comprehensive National Curriculum Framework for Teacher Education (NCFTE) 2021, will be formulated by the National Council for Teacher Education (NCTE) in consultation with National Council of Educational Research and Training (NCERT).
    • By 2030, the minimum degree qualification for teaching will be a 4-year integrated B.Ed. degree.

• Higher Education:
  • Gross Enrolment Ratio in higher education to be raised to 50% by 2035. Also, 3.5 crore seats to be added in higher education.
    • The current Gross Enrolment Ratio (GER) in higher education is 26.3%.
  • Holistic Undergraduate education with a flexible curriculum can be of 3 or 4 years with multiple exit options and appropriate certification within this period.
  • M.Phil courses will be discontinued and all the courses at undergraduate, postgraduate and PhD level will now be interdisciplinary.
  • Academic Bank of Credits to be established to facilitate Transfer of Credits.
  • Multidisciplinary Education and Research Universities (MERUs), at par with IITs, IIMs, to be set up as models of best multidisciplinary education of global standards in the country.
  • The National Research Foundation will be created as an apex body for fostering a strong research culture and building research capacity across higher education.
  • Higher Education Commission of India (HECI) will be set up as a single umbrella body for the entire higher education, excluding medical and legal education. Public and private higher education institutions will be governed by the same set of norms for regulation, accreditation and academic standards. Also, HECI will be having four independent verticals namely,
    • National Higher Education Regulatory Council (NHERC) for regulation,
    • General Education Council (GEC) for standard setting,
    • Higher Education Grants Council (HEGC) for funding,
    • National Accreditation Council (NAC) for accreditation.
  • Affiliation of colleges is to be phased out in 15 years and a stage-wise mechanism to be established for granting graded autonomy to colleges.
    • Over a period of time, every college is expected to develop into either an autonomous degree-granting College, or a constituent college of a university.

• e country.
• The National Research Foundation will be created as an apex body for fostering a strong research culture and building research capacity across higher education.
• Higher Education Commission of India (HECI) will be set up as a single umbrella body for the entire higher education, excluding medical and legal education. Public and private higher education institutions will be governed by the same set of norms for regulation, accreditation and academic standards. Also, HECI will be having four independent verticals namely,
  • National Higher Education Regulatory Council (NHERC) for regulation,
  • General Education Council (GEC) for standard setting,
  • Higher Education Grants Council (HEGC) for funding,
  • National Accreditation Council (NAC) for accreditation.
• Affiliation of colleges is to be phased out in 15 years and a stage-wise mechanism to be established for granting graded autonomy to colleges.
  • Over a period of time, every college is expected to develop into either an autonomous degree-granting College, or a constituent college of a university.

Non-Banking Financial Companies (NBFC) are establishments that provide financial services and banking facilities without meeting the legal definition of a Bank. They are covered under the Banking regulations laid down by the Reserve Bank of India and provide banking services like loans, credit facilities, TFCs, retirement planning, investing and stocking in the money market. However, they are restricted from taking any form of deposits from the general public. These organizations play a crucial role in the economy, offering their services in urban as well as rural areas, mostly granting loans allowing for the growth of new ventures.

NBFCs are facing a liquidity crunch. In other words, they don’t have money to lend or are facing enormous difficulties in raising funds. NBFCs typically borrow money from banks or sell commercial papers to mutual funds to raise money. They on-lend these money to small and medium enterprises, retail customers and so on. When NBFCs don’t have money to lend, that reduces the credit flow to the economy, hits economic growth and causes many borrowers to default on loans.

REASONS FOR LIQUIDITY CRUNCH

One, the NBFC business model itself is flawed, to begin with. It relied on raising short-term funds which were then lent out as long-term loans. This leads to a situation called an asset-liability mismatch. For example, an NBFC raises money by selling 6-month debt papers and on-lends this as a car loan with a  tenure of 5 years. This leads to a situation where the NBFC has to roll over (or renew) the 6-month debt paper or raise fresh loans to repay the debt paper. In good times, this happens as a matter of course. But when times are tough, this cycle is broken.

That leads us to the second factor. The cycle was broken by a default of some firms of the IL&FS group. There were fears that this would turn out to be a contagion. Simply put, banks, mutual funds and their investors were afraid that more such entities wouldn’t default. As this fear took hold, many institutions refused to give money to NBFCs. The cost of funds rose by as much as 150 basis points for NBFCs.

IMPORTANCE OF NBFC FOR ECONOMY

 NBFCs are playing an increasingly important part in the economy. Their share of credit has increased because they were lending in sectors where banks refused to go or did not want to go. The used commercial market is a good example here.

Now that NBFCs are finding it difficult to raise money or having to pay a huge cost for doing so, this will choke the flow of credit to the economy. It will hit the MSME sector which is already suffering from the twin blows of demonetisation and the goods and services tax.

More importantly, it will hit consumption demand in the economy. With investment demand yet to pick up and exports flagging, consumption was the primary engine driving the economy. A reduction in credit further adds to economic slowdown pressures, which are already visible.

Besides, a slowdown in credit could lead to another pile of non-performing assets in sectors such as commercial real estate and infrastructure, which could have economy-wide knockdown effects.

Consider this example, an infra project needs working capital funds for completion so that it can start earning. When funds aren’t available or come at a higher cost, this undermines the feasibility of the project and puts the money already sunk in at risk. This adds to the stressed assets; mutual funds lending to such projects will have to mark down their net asset values; this leads to investors taking money out of mutual funds and in turn mutual funds won’t be able to give money to NBFCs/ other projects, setting off a vicious cycle.

WHAT NOW ?

In the last financial year, the Reserve Bank of India bought government debt paper worth Rs 3 lakh crore from the market. Basically, this meant that so much money was given to the banking system to on-lend. This is the only way for RBI to help NBFCs since the central bank can’t lend directly to the latter as they don’t hold government paper for use as collateral.

But the cost of borrowing for NBFCs is still high as banks are risk averse or have reached exposure limits. This will prompt NBFCs to tap alternative sources such as external commercial borrowings, public bond issuances, or sales of assets. But even then, analysts point out that most of their borrowings  will be used to repair balance sheets and refinance liabilities. Even if a full-blown crisis won’t happen, it will take at least 12 months for NBFCs to be back on the lending track.

The Paris Agreement is a legally binding international treaty on climate change. It was adopted by 196 Parties at COP 21 in Paris, on 12 December 2015 and entered into force on 4 November 2016.

Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.

To achieve this long-term temperature goal, countries aim to reach global peaking of greenhouse gas emissions as soon as possible to achieve a climate neutral world by mid-century.

How does it work ?

The Paris Agreement works on a 5- year cycle of increasingly ambitious climate action carried out by countries. By 2020, countries submit their plans for climate action known as nationally determined contributions.

In their NDCs, countries communicate actions they will take to reduce their Greenhouse Gas emissions in order to reach the goals of the Paris Agreement. Countries also communicate in the NDCs actions they will take to build resilience to adapt to the impacts of rising temperatures. 

To better frame the efforts towards the long-term goal, the Paris Agreement invites countries to formulate and submit by 2020 long-term low greenhouse gas emission development strategies (LT-LEDS).

LT-LEDS provide the long-term horizon to the NDCs. Unlike NDCs, they are not mandatory. Nevertheless, they place the NDCs into the context of countries’ long-term planning and development priorities, providing a vision and direction for future development.

How are countries supporting one another ?

The Paris Agreement reaffirms that developed countries should take the lead in providing financial assistance to countries that are less endowed and more vulnerable, while for the first time also encouraging voluntary contributions by other Parties. Climate finance is needed for mitigation, because large-scale investments are required to significantly reduce emissions. Climate finance is equally important for adaptation, as significant financial resources are needed to adapt to the adverse effects and reduce the impacts of a changing climate.

The Paris Agreement speaks of the vision of fully realizing technology development and transfer for both improving resilience to climate change and reducing GHG emissions. It establishes a technology framework to provide overarching guidance to the well-functioning Technology Mechanism. The mechanism is accelerating technology development and transfer through it’s policy and implementation arms.

Not all developing countries have sufficient capacities to deal with many of the challenges brought by climate change. As a result, the Paris Agreement places great emphasis on climate-related capacity-building for developing countries and requests all developed countries to enhance support for capacity-building actions in developing countries.

How it tracks progress made by countries ?

With the Paris Agreement, countries established an enhanced transparency framework (ETF). Under ETF, starting in 2024, countries will report transparently on actions taken and progress in climate change mitigation, adaptation measures and support provided or received. It also provides for international procedures for the review of the submitted reports. 

The information gathered through the ETF will feed into the Global stocktake which will assess the collective progress towards the long-term climate goals.

The planet is warming, from North Pole to South Pole. Since 1906, the global average surface temperature has increased by more than 1.6 degrees Fahrenheit (0.9 degrees Celsius)—even more in sensitive polar regions. And the impacts of rising temperatures aren’t waiting for some far-flung future–the effects of global warming are appearing right now. The heat is melting glaciers and sea ice, shifting precipitation patterns, and setting animals on the move.

While many people think of global warming and climate change as synonyms, scientists use “climate change” when describing the complex shifts now affecting our planet’s weather and climate systems—in part because some areas actually get cooler in the short term.

Climate change encompasses not only rising average temperatures but also extreme weather events, shifting wildlife populations and habitats, rising seas, and a range of other impacts. All of those changes are emerging as humans continue to add heat-trapping greenhouse gases to the atmosphere, changing the rhythms of climate that all living things have come to rely on.

The “greenhouse effect” is the warming that happens when certain gases in Earth’s atmosphere trap heat. These gases let in light but keep heat from escaping, like the glass walls of a greenhouse, hence the name. humans have increased the amount of carbon dioxide in the atmosphere by more than a third since the Industrial Revolution. Changes that have historically taken thousands of years are now happening over the course of decades.

EFFECTS OF CLIMATE CHANGE ON OUR FUTURE

The direct consequences of man-​made climate change include:

• rising maximum temperatures
• rising minimum temperatures 
• rising sea levels 
• higher ocean temperatures 
• an increase in heavy precipitation (heavy rain and hail)
• shrinking glaciers
• thawing permafrost

The indirect consequences of climate change, which directly affect us humans and our environment, include: 

• an increase in hunger and water crises, especially in developing countries
• health risks through rising air temperatures and heatwaves 
• economic implications of dealing with secondary damage related to climate change 
• increasing spread of pests and pathogens
• loss of biodiversity due to limited adaptability and adaptability speed of flora and fauna  
• ocean acidification due to increased HCO3 concentrations in the water as a consequence of increased CO₂ concentrations
• the need for adaptation in all areas (e.g. agriculture, forestry, energy, infrastructure, tourism, etc.)

As per the Reserve Bank of India (RBI), a loan is considered a “bad loan”, or an NPA when the interest due for any quarter is not fully paid within 90 days from the end of the quarter. However, this time period may vary based on the terms and conditions agreed upon by the bank and the borrower.

When a bank offers a loan, it charges interest on the amount, which is why it is regarded as an asset to the bank. When the borrower stops paying the interest, or the principal, or both, the lender loses money. Such a loan then becomes a non-performing asset (NPA) for the bank. The banking industry in India is seriously affected by the NPA crisis with the rising number of defaulters.

he economic fallout of the pandemic is expected to push up non-performing assets (NPAs) of the banking sector, Reserve Bank of India (RBI) said on Friday, estimating the ratio of gross NPAs may rise to 12.5% by March next year, in a baseline scenario.  The central bank’s Financial Stability report (FSR), noted the NPA ratio could jump to as high a level as 14.7% in the event of severe stress.

the report reveals that nearly half of the outstanding credit till April 30, was under moratorium, somewhat higher than estimates provided by bankers.  A total of 48.6% customers by number and 50.1% by value had made use of the moratorium till April 30. While 66.6% of borrowers at state-owned banks opted for the deferral, the share for customers at private sector banks was 49.2%.  Non-banking financial companies (NBFCs) had granted a moratorium to 49% of their customers.

The level of deferrals, availed of by borrowers, is being closely monitored as it reflects the potential stress in the system. Analysts at Macquarie had estimated the extent of loans under moratorium at 25-30% at the end of May. “The regulatory dispensations that the pandemic has necessitated in terms of the moratorium on loan instalments and deferment of interest payments may have implications for the financial health of banks going forward,” RBI cautioned.

Banks have observed there is a declining trend in the number of borrowers who want to delay repayments. HDFC said the share of its retail loan book, under moratorium, was down to 7% as of June 15 from 21% in May. Axis Bank reported that 9.7% of its outstanding loan book was under moratorium as of June 30; in April this number was 25%.