RBI gives Rs. 99,122 crore surplus to the Government

• The Reserve Bank of India’s board approved a significantly higher-than-expected surplus transfer to the government on Friday but it may not be enough to cushion the damage from a crippling second wave of the novel coronavirus.
• The surplus distribution policy of the RBI is determined in accordance with Section 47 of the RBI Act, 1934.
• The RBI announced a surplus transfer of ?99,122 crore for the 9-month period from July 2020 to March 2021, the central bank said in a statement. The bank will move to an April to March accounting year from 2021/22, from a July to June year.
• The higher-than-expected dividend or surplus transfer to the government comes as the government is expecting a sharp sequential fall in tax collections due to the severe second wave of COVID-19 which has forced lockdowns in several States.
• “This surplus likely reflects the central bank’s higher income from their open market operations as well as receipts from FX sales, with its transfer to the government’s coffers providing some cushion to the pandemic-driven shortfall in revenues,” said Radhika Rao, an economist with DBS.
• The government had budgeted to receive a surplus of about ?50,000 crore from the RBI to be accounted for in the budget estimates for 2021/22, while in the previous full accounting year, the RBI had transferred ?57,128 crore as surplus.
• Barring 2018/19, this is the highest ever transfer by the RBI in an accounting period. In FY19, ?1.76 lakh crore was transferred to the government which included a one-time transfer of extra reserves.
• The government is likely to find it challenging to meet its privatisation and disinvestment target of $24 billion while goods and services tax (GST) revenues are also likely to fall, a government official said.
• The RBI also decided to maintain a Contingency Risk Buffer at 5.50% in line with recommendations of the Bimal Jalan Committee report.

Bimal Jalan Committee to review the RBI’s Economic capital framework.

1. It allows higher capital expenditure on infrastructure and social programs. These are surplus funds and part of excess provisions identified as per revised Economic Capital Framework (ECF) adopted by RBI's board.
2. It recommended to align the RBI’s accounting year with the financial year. The accounting years of RBI is April to March and RBI’s accounting year is July to June.
3. RBI’s provisioning for monetary, financial and external stability risks is India’s savings for a ‘rainy day’, (a monetary or financial stability crisis) which is maintained with RBI for its role as a Lender of the Last Resort and Monetary Authority. This risk provisioning is known as Contingent Risk Buffer (CRB).
4. Panel recommended a clear distinction between 2 components of Economic Capital
   1. Realized Equity: Built up from retained earnings. To be used to meet all risks/ losses.
   2. Revaluation Balances: They represented unrealized valuation gains and hence not distributable. They can be reckoned only as risk buffers against market risks.
5. RBI holds its money under 4 heads
   1. Contingency Fund
   2. Currency and Gold re-evaluation account
   3. Asset Development Fund and
   4. Investment re-evaluation account
6. RBI earns its money via several channels
   1. Income which it generates on the interest of Govt bonds which are held for conducting OMOs.
   2. Fees from Govt's market borrowing endeavours.
   3. It retains some earnings after transfer of dividends to Indian Govt.
   4. It earns from interest which it generates after the investment in foreign currency assets.

Khelo India Programme

• It is a Central Sector Scheme with 12 components and achieves twin objectives of National Youth Policy, 2001: broad basing sports and achieving excellence in sports.
• It was introduced to revive the sports culture in India at the grass root level.
• Talented players will be given annual financial assistance of Rs. 5 lakh/ year for 8 years.
• It was launched after merging Rajiv Gandhi Khel Abhiyan, Urban Sports Infra Scheme (USIS) and National Sports Talent Search System Programme.
• 12 components include Community coaching, annual sports competition, State level centers, sports infra, physical fitness, women, PwD, peace and development and indigenous/ tribal games.
• Rajiv Gandhi Khel Abhiyan
  1. It replaced Panchayat Yuva Krida/ Khel Abhiyan (focused on sports infrastructure at village and block level.
  2. RGKA is a Centrally Sponsored Scheme. For block-level sports complex.
  3. Promote sports, increase access, competitions,
  4. Construct sports complexes in every rural block or Panchayat.
  5. 11 outdoor and 5 indoor games, 3 sports trainers with 1 female.
  6. Assistance for sports equipment and self-defence training for women.

Mouda River Rejuvenation Case Study: Water crisis

• NTPC, Central Public Sector Undertaking under the Ministry of Power in Mouda, Maharashtra has helped over 150 villages in and around its operational area to overcome water crisis through a groundwater rejuvenation project.
• As part of its CSR initiative, NTPC Mouda is supporting the Jalyukta Shivar Yojana project which has successfully managed to turn Mouda into a water-surplus tehsil.
• This project was carried out by the Maharashtra wing of Art of Living along with aid from a few other organizations and the State government.
• Earlier Mouda, was one of the most water-deficient tehsils in Nagpur.
• The project which started in 2017 has covered more than 200 km in Mouda, Hingna and Kamptee tehsils.
• In the last four years, over 150 villages have benefited from it.
• NTPC Mouda had contributed 78 lakhs for the fuel charges of machinery and equipment involved. For a similar rejuvenation project of 5 ponds over an area of 1000 acres, an amount of 1 Crore is also being provided by NTPC Mouda.
• The ‘Trap the rain where it falls’ technique involves the creation of ponds and nullahs throughout the stretch of the river so that rainwater can be held for a long period.
• Earlier, the rainwater would run off the ground, but now the water gets sufficient time to percolate deep into the ground. This has led to a massive increase in groundwater levels.
• Until a couple of years ago, the farmers in this area were struggling to get water for crops such as paddy, and wheat and it was chilly during the pre-harvesting seasons. Now, the stored rainwater has come to their rescue and provided a new lease of life to their crops and income levels.

One Stop Centre Scheme

• One Stop Centre Scheme (OSCs) is a centrally sponsored scheme for addressing the problem of violence against women.
• One Stop Centre Scheme (OSCs) is being implemented by the Ministry of Women and Child Development.
• It is a sub-scheme of the umbrella scheme for the National Mission for Empowerment of Women including the Indira Gandhi Mattritav Sahyaog Yojana.
• The scheme is being implemented across the country since 1st April 2015 through State Governments/ Union Territory (UT) Administrations to provide integrated support and assistance to women affected by violence and in distress, both in private and public spaces, under one roof and to facilitate immediate, emergency and non-emergency access to a range of services including police, medical, legal aid and counselling, psychological support to fight against any forms of violence against women.
• To date, 701 OSCs in 35 States/UTs have been operationalised.
• In the prevalent situation created due to the Covid pandemic, women who are in a distress situation or affected by violence may contact the nearest OSCs for speedy assistance and services.
• The WCD Ministry has directed the Chief Secretaries/Administrators of all States/UTs and DC/DM of all Districts to keep One Stop Centres operational during the lockdown period with the availability of all the basic materials required for fighting COVID-19 like Sanitizers. Soaps, Masks etc.
• As per scheme guidelines, for smooth functioning of the centres, the responsibility of appointment/ recruitment/ selection of empanelled agencies/ individuals to provide legal counselling/ Medical aid/ psycho-social counselling etc. lies with the district administration of the respective States/ UTs.
• Funding: The scheme is funded through Nirbhaya Fund and the central government provides 100% financial assistance to the state governments /Union Territories administrations.

• Auditing: Audit will be done as per Comptroller & Auditor General of India norms and social audit will also be undertaken by civil society groups.

One-stop centres will be integrated with women's helplines to provide the following services:

1. Emergency response and rescue services.
2. Medical assistance.
3. Assistance to women in lodging the FIR.
4. Psycho-social support and counselling.
5. Legal aid and counselling.
6. Shelter
7. Video conferencing facility.

Personal guarantors liable for corporate debt

Insolvency and Bankruptcy Code, 2016

• It deals with debt default of companies and limited liability entities, partnership firms and individuals.
• It was based on T K Vishwanathan Committee on Bankruptcy Law Reforms Committee (BLRC) in 2014.
• It proposes a framework to ensure early detection of stress in a business, initation of the insolvency resolution process by the debtor, financial creditor or operational creditor; the liquidation of unviable business and avoiding the destruction of the value of the failed business.
• The Code separates commercial aspects of the insolvency proceedings from judicial aspects.
  • IPs will deal with commercial aspects such as affairs of the corporate debtor, and committee of creditors.
  • Judicial issues will be handled by proposed Adjudicating Authorities (NCLT/DRT).
  • ‘Information Utility’ is created which would store financial information in electronic databases.
• Insolvency and Bankruptcy Board of India (IBBI) is set up.
  • IBBI is a unique regulator i.e. It regulates both professions and transactions.
  • It has regulatory oversight over Insolvency Professionals (IPs), IP Agencies (IPA) and Information Utilities (IU).
  • It writes and enforces rules of corporate insolvency, corporate liquidation, individual insolvency and individual bankruptcy under IBC.
  • IBBI is responsible to implement the IBC and amend laws for insolvency resolution of Corporate persons, partnership firms and individuals in a time-bound manner for maximization of valuation of assets of such person.
  • To promote entrepreneurship, credit availability and balancing the interest of all stakeholders.
  • So far, IBBI has produced 3 sets of regulations: IPs; IPA and bye-laws and Governing board for IPAs.
• The Code also provides a fast track insolvency resolution process for corporates and LLPs. This will be an enabler for start-ups and SMEs to complete the resolution process in 90 days (extendable to 45 days in deserving cases).
• The Code also addresses cross-border insolvency with a detailed framework soon.
• When a corporate entity defaults on its debt, control shifts from shareholders/ promoters to Committee of Creditors (CoC). CoC have 180 days to evaluate the case (90 days extendable).
• IBC has amended India's Corporate insolvency resolution process. Prior to the approval of the resolution plan, the antecedants, credit worthiness and credibility of resolution applicants including Promoter are considered by the Committee of Creditors.
• IBC empowers operational creditors (workmen, suppliers etc.) also to initiate the insolvency proceedings upon non-payment of dues.
• During waterfall (liquidation) Financial debts owed to unsecured creditors have been kept above the Government’s dues..
• Recently India amended IBC and prohibited near relatives, their CA, and Promoters in the Bidding process during Insolvency.
• Even RBI allowed ECB for re-bidding under IBC.
• RBI allowed faulty organizations to bid for their subsidiary organization if they pay interest on the loan in which default is taken place.
• IBC was spearheaded by MoF but now from 2016, the administration is transferred to Mo Corporate Affairs.
• IBC Amendment, 2019 =
  • Time-bound resolution, voting rules for financial creditors
  • Homebuyers as creditors. Can initiate proceedings.
  • 330 days deadline, Creditors who voted against majority can receive minimum liquidation value, Resolution plan to be binding on all.

Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021

• Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021 promulgated on 4th April 2021 provides for a pre-packaged insolvency resolution process (PPIRP) for corporate debtors classified as micro, small and medium enterprises.
• The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Pre-packaged Insolvency Resolution Process) Regulations, 2021 (PPIRP Regulations) today to enable the operationalisation of PPIRP.
• The PPIRP Regulations detail the Forms that stakeholders are required to use, and the manner of carrying out various tasks by them as part of the PPIRP.

These provide details and manner relating to:

1. Eligibility to act as resolution professional, and his terms of appointment;
2. Eligibility of registered valuers and other professionals;
3. Identification and selection of authorised representative;
4. Public announcement and claims of stakeholders;
5. Information memorandum;
6. Meetings of the creditors and committee of creditors;
7. Invitation for resolution plans;
8. Competition between the base resolution plan and the best resolution plan;
9. Evaluation and consideration of resolution plans;
10. Vesting management of corporate debtor with resolution professional;
11. Termination of PPIRP.

What is the news? Lenders can initiate insolvency proceedings against personal guarantors for Corporate debt

• The Supreme Court upheld a government move to allow lenders to initiate insolvency proceedings against personal guarantors, who are usually promoters of big business houses, along with the stressed corporate entities for whom they gave guarantees.
• In a judgment which will ring loud and clear across the business community, a Bench of Justices L. Nageswara Rao and S. Ravindra Bhat held that on November 15, 2019, government notification allowed creditors, usually financial institutions and banks, to move against personal guarantors under the Indian Bankruptcy and Insolvency Code (IBC) was “legal and valid”.
• The court said there was an “intrinsic connection” between personal guarantors and their corporate debtors.
• Justice Bhat, who authored the 82-page verdict, said it was this “intimate” connection that made the government recognise personal guarantors as a “separate species” under the IBC.
• It was again this intimacy that made the government decide that corporate debtors and their personal guarantors should be dealt with by a common forum — National Company Law Tribunal (NCLT) — through the same adjudicatory process.
• In this context, Justice Bhat referred to how the November 2019 notification had not strayed from the original intent of the IBC. In fact, Section 60(2) of the Code had required the bankruptcy proceedings of corporate debtors and their personal guarantors to be held before a common forum — the NCLT.
• “The adjudicating authority for personal guarantors will be the NCLT if a parallel resolution process is pending in respect of a corporate debtor for whom the guarantee is given,” Justice Bhat noted.

Sunderlal Bahuguna and Chipko Movement

The 94-year-old environmentalist succumbed to Covid-19 on May 21, 2021, at the All India Institute of Medical Sciences (AIIMS) in Rishikesh, Uttarakhand. With his demise, India has lost one of the finest environmentalists and social workers who had also been part of India’s freedom movement.

About Sundarlal Bahuguna

• Born in village Maroda near Tehri, Uttarakhand on January 9, 1927, he was an active revolutionary during the Indian Freedom Struggle.
• Early in his life, Sunderlal Bahuguna met Gandhian Sridev Suman, who later died while on a long fast of 84 days against the atrocities of Tehri’s king, and that made a deep impression on Bahuguna. It moulded his political and social understanding. He vowed to work for the weak and powerless in a non-violent manner and practised what he preached.
• He adopted Gandhian principles in his life. Inspired by Gandhi, he walked through Himalayan forests and hills, covering more than 4,700 kilometres on foot and observed the damage done by mega developmental projects to the fragile ecosystem of the Himalayas and the subsequent degradation of social life in villages.
• Inspired by Mahatma Gandhi, he fought against untouchability and to do so in true spirit he lived with Dalits (formerly untouchables) in the same house and ate with them.
• He was also part of the anti-liquor movement in the 1960s and of course, you can’t forget the Sarvodaya movement he actively participated in,” Sarvodaya movement is rooted in Gandhian philosophy of upliftment of all.
• He fought for the preservation of forests in the Himalayas, first as a member of the Chipko movement in the 1970s which started in Chamoli district and later spearheaded the anti-Tehri Dam movement from the 1980s to early 2004.
• He was the District President of Congress. Resigned from there, he and his wife Vimla Bahuguna founded Parvtiya Navjivan Mandal and worked for the education of Dalits and the poor.
• He was a charismatic ascetic, a spartan man of Gandhian principles. He lived in a small ashram, denounced violence and was essentially non-political. He believed in self-reliance and not in "so much foreign trade". He despised materialism.
• To become energy secure in a "non-violent and permanent society", he said, India needed to produce biogas from human waste, harvest solar and wind energy and hydropower from the run of the river. Improve machines so they consume less energy,
• Mr. Bahuguna also led the charge against the construction of big dams in the Himalayas in the 1980s. He was fervently opposed to the construction of the Tehri dam and sat on two long hunger strikes against the dam, which proved to be of no avail.
• Mr Bahuguna, who lived for decades in his Silyara ashram in Tehri Garhwal, inspired many young people with his passion for the environment. His ashram was open to young people, with whom he communicated with ease.
• He wrote about the problems of deforestation for years — drawing a link between the lack of tree cover and the drying up of springs in the Himalayas. He also led a movement of women’s groups, or Mahila manuals, to enforce prohibition in Tehri Garhwal, which was then part of Uttar Pradesh.
• Dressed in khadi, sporting a flowing white beard and a jhola on his shoulder, Mr. Bahuguna toured the length and breadth of India carrying his message of “save the Himalayas” to whoever would listen to him.
• Bahuguna believed in a cohesive and coordinated conservation policy for the entire Himalayan belt. It was this belief of his that he did a 5,000-kilometre-long foot-march between 1981-83 from Srinagar in Jammu and Kashmir in northern India to Kohima in Nagaland in eastern India.

Chipko Movement

• He was one of the founders of the Chipko, or hug the tree movement, in the 1970s to save Himalayan forests.
• It was a non-violent agitation which originated in Uttar Pradesh’s Chamoli district (now Uttarakhand) in 1973.
• He wrote that deforestation led to erosion of fertile land and pushed the men out of the villages to look for jobs in cities. This left women to "bear all the responsibilities of collecting fodder, firewood and water, apart from farming".
• Not surprisingly, the Chipko movement became an important milestone in the fight to secure women's rights.
• Heeding calls by Bahuguna and fellow activist Chandi Prasad Bhatt, men and women in the Indian Himalayas embraced and chained themselves to trees to stop loggers from cutting them down. It was a powerful symbol that conveyed, 'Our bodies before our trees'.
• The name of the movement ‘chipko’ comes from the word ’embrace’, as the villagers hugged the trees and encircled them to prevent being hacked.
• It is best remembered for the collective mobilisation of women for the cause of preserving forests, which also brought about a change in attitude regarding their own status in society.
• Very soon, women in the Himalayas became an integral part of the movement too, embracing trees and tying rakhis - a symbolic red thread tied around a brother's wrist during the Hindu festival of Raksha Bandhan - onto the bark of trees. They walked in the snow and took away tools from loggers to stop felling.
• It’s biggest victory was making people aware of their rights to forests, and how grassroots activism can influence policy-making regarding ecology and shared natural resources.
• It yielded results: a fast in 1981 led to a 15-year ban on commercial felling of trees in Uttarakahand. Two years later, he marched 4,000km (2,500 miles) in the Himalayas to draw attention to environmental degradation.
• It led to a ban on commercial felling of trees above 30 degrees slope and above 1,000 msl (mean sea level) in 1981.
• In 1987, he was conferred with Padma Shri but he refused to accept it over Government’s refusal to cancel the Tehri dam project despite his protests.
• Chipko movement threw many stalwarts like Govind Singh Rawat, Chandi Prasad Bhatt, Vipin Tripathi, Vidya Sagar Nautiyal and Govind Singh Negi.
• The Chipko Movement received the 1987 Right Livelihood Award, also referred to as the Alternative Nobel Prize, “...for its dedication to the conservation, restoration and ecologically-sound use of India's natural resources.”

Appiko movement

• On September 8, 1983, Pandurang Hegde, an environmental activist from Karnataka, started the Appiko (Kannada for Chipko, "to hug") movement to protest against the felling of trees, monoculture, and deforestation in the Western Ghats, deriving inspiration from Sunderlal Bahugana and the Chipko movement.
• After the Appiko movement started, Bahuguna and Pandurang Hegde walked across many parts of south India promoting the conservation of ecology, especially the protection of the Western Ghats, a biodiversity hotspot.
• This and the broader Save the Western Ghats Movement led to a moratorium on green felling across the region in 1989.

What did Israel achieve in Gaza?

After 11 days of airstrikes on and rocket attacks from Gaza, Israel and Hamas agreed to an Egypt-mediated ceasefire.

What were the goals?

• During the course of the attack, Israeli Prime Minister Benjamin Netanyahu said there were two ways to deal with Hamas — one, to conquer Hamas and the other to establish deterrence.
• The Prime Minister said his aim was “forceful deterrence”, but conquering was “an open possibility”.
• Israeli military leaders have claimed that they have killed 225 members of Hamas and Islamic Jihad — a contested claim as the Gaza Health Ministry says 243 Gazans were killed, including 66 children.
• Israel has also claimed that it has destroyed Hamas’s elaborate tunnel network and military and intelligence infrastructure. ‘We have set Hamas back by years,” said Mr. Netanyahu.
• It’s true that Hamas has suffered far greater damage than what its rockets inflicted on Israel, where 12 people were killed, including one child and three foreign nationals.
• But it will be clearer only in the coming weeks, months or years whether the Israeli campaign has established deterrence.
• The facts on the ground tell us that despite the heavy losses Hamas suffered, it continued to fire rockets into Israel till the last moment. On the 11th day, Hamas fired some 300 rockets into Israel.

Pressure from all sides

• Unlike in 2014, when the last major fighting between Israel and Hamas occurred, the Israeli troops were wary of launching a ground invasion this time. In a ground attack, Israel could inflict more damage on Hamas, but the risk of losing Israeli soldiers would also be high.
• This time, the focus of Israel’s military campaign, which started on May 10, was on causing maximum damage to Hamas’s militant infrastructure through airstrikes.
• In the first 10 days of the fighting, Israel carried out more than 1,800 airstrikes on Gaza, according to the UN.
• But one issue with offensives that are heavily dependent on air power is that they need a quick exit strategy. Airstrikes will leave disproportionate civilian casualties.
• And disproportionate airstrikes, which was Israel’s strategy, will have even greater damage. While Israel tried to sell the narrative that it’s a victim of terror (which has buyers), the fact remains that Israel is the only sovereign power in this conflict, which continues the occupation of Palestinian territories in violation of UN Security Council resolutions, international laws and norms.
• So, when civilian casualties mounted in Gaza, even those countries that initially supported Israel’s “right to defend itself” started calling for a ceasefire. In the UNSC, most countries, including India, backed an immediate ceasefire.
• The Biden administration, which was facing intense pressure from the liberal wing of the Democratic Party, issued a strong statement on Wednesday asking for “a significant de-escalation”
• Israel was also facing internal pressure as its streets were gripped by riots between Jewish vigilantes and Arab mobs. Protests were spreading in the West Bank and rockets were coming from the Lebanon border. Amid intensifying pressure from all sides, the Israeli Security Cabinet unanimously accepted a “unilateral and mutual” ceasefire with Hamas on Thursday night. The militants immediately confirmed the truce.

Hamas’s strategy

• As soon as the ceasefire was announced, Palestinians took to the streets “celebrating the resistance”. Senior Hamas officials called it “the euphoria of victory”.
• By launching the rocket attacks on May 10, hours after Israeli forces stormed Al-Aqsa Mosque in East Jerusalem, Hamas was seen to be making a political point — it is the real defender of Jerusalem. In effect, Hamas was trying to tap the growing Palestinian resentment towards Israel’s high-handedness.
• The political messaging appeared to have gone down well with the Palestinians as Israel faced unprecedented protests and riots both in the occupied West Bank and Israeli cities when the Gaza attack was underway.
• Militarily, Hamas, despite the heavy losses it suffered, demonstrated its growing rocket fire capabilities. Hamas launched at least 4,000 rockets in 11 days, more than the 3,383 rockets it fired during the 50 days of conflict in 2014.
• By launching barrages of rockets within minutes, it also managed to overwhelm Israel’s Iron Dome defence system. For example, in one day last week, Hamas launched more than 1,000 rockets. In 2014, its daily total never crossed 200.
• And Hamas rockets killed more civilians in Israel in 11 days this time than the total number of civilian deaths during the seven weeks of 2014, which is a matter of grave concern for Israel.

Way Forward?

• Ceasefires can be fragile. In 2014, after the ceasefire was announced, Israel attempted to assassinate Hamas’s shadowy military commander Mohammed Deif but failed.
• This time, too, the truce is tenuous. Hamas says it accepted the truce after Israel promised “to lift their hands off Sheikh Jarrah (where Palestinians face eviction from their houses) and Al-Aqsa Mosque.
• The Israeli side has denied any such promise and emphasised that the ceasefire was unconditional. Egypt says concerns in Jerusalem will be “addressed”. Israel has already removed some restrictions it had imposed on Al-Aqsa, which it says was a temporary security measure. Hamas could take credit for the same.
• But Sheikh Jarrah is a more complicated matter. The Supreme Court of Israel is supposed to give a final ruling on the eviction of Palestinians in the neighbourhood.
• If Israel goes ahead with the eviction process, there could be more protests and violence. Israeli leaders say there won’t be lasting peace as long as Hamas has rockets. Hamas says there will be rockets as long as the occupation continues.

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