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DAILY NEWS ANALYSIS

Monthly DNA

28 Jan, 2020

17 Min Read

75th Anniversary of liberation of the Auschwitz camp

GS-I : Modern History

Syllabus subtopic: History of the World will include events from 18th century such as Industrial Revolution, world wars, Redrawal of National Boundaries, Colonization, Decolonization, political philosophies like Communism, Capitalism, Socialism etc.— their forms and effect on the society.

Prelims and Mains focus: about Auschwitz concentration camp and its significance in WWII

News: Survivors of the Auschwitz-Birkenau death camp gathered Monday for commemorations marking the 75th anniversary of the liberation of the camp.

About

  • During the Second World War, the government of Nazi Germany killed approximately 17 million people across Europe in half a dozen camps specifically designated for killings.

  • Of these seven killing centers, the camp at Auschwitz (in German-occupied Poland), perhaps the most well known, was the largest in size. In many ways, Auschwitz has become the centre of Holocaust history and research and serves as a reminder of the horrors of the Holocaust.

  • Most of the 1.1 million people murdered by the Nazi German forces at the camp were Jewish, but among those imprisoned there were also Poles and Russians.

  • Allied forces liberated Auschwitz on January 27, 1945, finding hundreds of sick, starving and exhausted prisoners, who had somehow survived.

  • In 2005, the UN-designated January 27 as the International Holocaust Remembrance Day.

Source: Indian Express

Tribal protest in Odisha

GS-II : Odisha

Syllabus subtopic: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Prelims and Mains focus: about the tribal protest and its reasons; about FRA, 2006

News: Alleging arbitrary cancellation of applications for land rights under the Forest Rights Act by the administration, over 2,000 tribals began an indefinite dharna in front of the Collector’s office at Chhatrapur in Odisha’s Ganjam district.

About the issue

  • The tribals alleged that of the total rejected applications, the highest number was from Ganjam, around 50% of total rejections in the State. The administration has not given any reason for cancellation.

  • The protesters were united by four organisations — All India Kisan Mazdoor Sabha, Adivasi Bharat Mahasabha, Ganjam Zilla Adivasi Manch and Ganjam Zilla Gramsabha Samukhya.

  • The protesters have a list of nine demands which are mostly related to land rights of forest dwellers.

  • Tribals demand: All cancelled applications be returned for scrutiny and verification by the gram sabhas. Administration should accept the applications which will be approved by the gram sabhas.

Source: The Hindu

EMI option for states to repay their dues to discoms

GS-II :

Syllabus subtopic: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Prelims and Mains focus: about the move and its significance, the debt troubke faced by discoms and govt.’s efforts in this direction; about UDAY scheme

News: The Union government is considering a unique initiative to let defaulting state government departments clear their outstanding dues to power distribution companies (discoms) through a dozen monthly instalments.

Background

  • The move comes in the backdrop of worsening financial health of discoms, who in turn have delayed payments to generation utilities. State government departments have the lion’s share of the total dues totalling Rs.82,073 crore.

  • The issue of repaying dues through 12 equated monthly instalments (EMI) was discussed at a review planning and monitoring (RPM) meeting of the power ministry with states earlier this month.

  • It comes in the backdrop of the Rs. 2.86 trillion plan for India’s most ambitious power distribution reform scheme, tentatively named Atal Distribution System Improvement Yojana after former prime minister late Atal Bihari Vajpayee.

What led to the move?

  • Government department dues getting delayed lead to cash losses of discoms, even though these get accrued as booked income. However, this causes problem in cash flow management in discoms, increases the requirements of working capital and leads to delay in payment of gencos (power generation companies).

  • Therefore, such delays on part of one state have repercussions on the complete power sector value chain and in entities beyond the boundaries of their own states.

Discoms debt trouble and efforts made towards alleviation

  • Discoms are the weakest link in the electricity value chain, plagued by
  1. low collection,
  2. higher power purchase cost,
  3. inadequate tariff hikes and subsidy disbursement, and
  4. mounting dues from government departments.
  • In an attempt to ensure timely payments by states to generation utilities, the government has already made it mandatory for state discoms to offer letters of credit (LC) as part of the payment security mechanisms in power purchase agreements. However, while the states have offered LCs, their old arrears are still pending.

  • In poor financial health, discoms have delayed payments to gencos even as the Centre steps up efforts to supply round-the-clock power to all. The inability of discoms to make payments has also added to the pain in the banking sector as power developers are facing difficulties to service their debt. The backlog of dues owed by discoms to gencos are as high as 913 days.

  • The push for state government departments to clear their dues comes in tandem with the finance ministry’ proposed plans to withhold permission to defaulting states to borrow to the extent of electricity losses not funded by their respective governments.

  • Plans to trim debt of discoms and pare their losses may feature in the forthcoming Union budget slated for 1 February.

Source: Livemint

Committee on Related Party Transactions norms

GS-II :

Syllabus subtopic:

  • Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.
  • Corporate Governance

Prelims and Mains focus: About the committee and its recommendations; about RPTs and the need for reforms in the corporate governance.

News: The committee set up by the Securities and Exchange Board of India (SEBI) on related party transactions (RPTs) has proposed sweeping changes to strengthen the monitoring and enforcement of norms and bring in more transparency and improve governance.

Background

  • The capital markets regulator (SEBI), in November 2019, constituted a Working Group to review the policy space pertaining to RPTs.

  • Many firms which defaulted on bank loans were found to have indulged in related party deals to siphon off funds.

What is Related Party Transactions (RPT)?

  • Generally, RPT means a transaction involving a transfer of resources, services between the listed entity or its subsidiaries on the one hand and a related party of the listed entity or its subsidiaries on the other hand.

  • Transaction between listed entity or its subsidiaries and any other entity which is aimed to benefit a related party should be considered as a RPT.

Need for the reform

  • The Working Group noted that the current RPT regulatory framework may be insufficient to cover transactions where the listed entity could transfer its assets/value to a subsidiary, whether in India or overseas, and such entity could then transact with the related parties of the listed entity to move the assets out of the consolidated entity.

  • The need to regulate the consolidated entity as a whole was also recognised specifically in the report of the Kotak committee on corporate governance.

  • Several listed entities in India operate through a network of entities – where some companies have over 200 subsidiaries, step-down subsidiaries, associates, and joint ventures.

  • While investors hold direct equity only in the listed holding company, they have valued the entire business structure at the time of investment. Therefore, it is important for boards to ensure that good governance trickles down to the entire structure.

Recommendations of the committee

  1. Who should be considered as a related party?
  • The panel has said that a related party should be any person or entity belonging to the promoter or promoter group of the listed entity.
  • Besides, any person or any entity, directly or indirectly (including with their relatives), holding 20 per cent or more of the holding in the listed entity should also be considered as related party.

  1. The Sebi committee has also proposed changes to the process followed by a company’s audit committee for approval of RPTs that are material. Further, a format for reporting of RPTs to the stock exchanges has been mooted.

  1. Prior approval of the audit committee of the listed entity should be mandatory for transactions carried out between the listed entity or any of its subsidiaries with a related party.

  1. The materiality threshold should be amended to 5 per cent of the annual total revenues, total assets or net worth of the listed entity on a consolidated basis or Rs 1,000 crore, whichever is lower.

  1. The net worth criterion should not apply to companies with negative net worth. Further, companies can specify a lower materiality threshold as per their RPT policies.

Source: Indian Express

Air India's privatization

GS-III : Economic Issues Terminology

Air India's privatization

Syllabus subtopic:

  • Effects of Liberalization on the Economy, Changes in Industrial Policy and their Effects on Industrial Growth.
  • Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Prelims and Mains focus: about the details of the deal and its significance; about types of disinvestment

News: The Union government invited bids for a 100% stake sale of Air India (AI) and transfer of management control along with its complete share in two subsidiaries — low­cost international carrier Air India Express and ground­handling arm AISATS.

Background

  • This is the second attempt in two years by the Modi­-led government at privatising the national carrier.

  • On May 31, 2018, when the deadline for bids closed, not even a single private player had shown interest. On the table is a 100% stake in AI, 100% stake in AI Express Limited (AIXL) and all of the government’s 50% stake in AISATS, which is a joint venture with the Singapore­based ground handling company SATS Limited.

What’s new this time?

  • The government has offered to hive off liabilities worth nearly Rs. 40,000 crore to sweeten the deal.

  • The buyer will get a total of 146 aircraft, 56% of which are owned by the airline group, while the remaining are on lease. It will also benefit from as much as 50% of the international market share held by Indian airlines as well as the airline’s 4,400 slots at airports in the country and 3,300 slots in 42 countries, which will be available at least for six months after the sale is complete.

  • As many as 9,617 permanent employees, including pilots and cabin crew with deep technical and operational expertise, will be up for grabs along with the airline’s brand as well as the famous “Maharaja” and “Flying swan” logos.

  • The bid document also states that the existing FDI policy, which allows a foreign airline to buy up to 49% of Air India, will continue to apply.

Who will be eligible to bid for the sale?

  • Any private or public limited company, a corporate body and a fund with a net value of Rs. 3,500 crores will be eligible to bid.

  • The last date for submitting interest to the transaction adviser is March 17 and the outcome of this round will be known by March 31, following which qualified bidders will be given two months to submit financial bids.

How will the deal go about?

  • The private player keen to buy Air India will also have to take on liabilities of Rs. 32,474 crore, which includes the airline’s debt of Rs. 23,286 crores.

  • The government will absorb Rs. 56,334 crores in liabilities, including Rs. 36,670 crore of debt. These have been transferred to a special vehicle known as Air India Assets Holding Limited (AIAHL), which will also comprise real estate and other assets worth Rs. 17,000 crores. Therefore, the net liability to be borne by the government will be Rs. 39,259 crores.

  • All employees will go to the new buyer. There are no excess employees in Air India. The buyer should retain these employees for a certain lock­in period, which would be divulged in the share purchasing agreement. The government was exploring different modalities to ensure that the retired staff have medical cover.

Conclusion

A clean exit by the government and exclusion of the entire non­aircraft related debt signal a bold reform and a very determined effort to exit the airline to allow the taxpayers’ funds to be utilised for the government’s social agenda. This may be the single biggest write­off by the government.

Source: The Hindu

Centre, Assam govt. sign accord with Bodo groups

GS-III : Miscellaneous

Centre, Assam govt. sign accord with Bodo groups

Syllabus subtopic: Linkages between Development and Spread of Extremism.

Prelims and Mains focus: on the Bodo Accord and its significance; on Bodo tribe

News: The Ministry of Home Affairs (MHA), the Assam government and Bodo groups signed an agreement to redraw and rename the Bodoland Territorial Area District (BTAD) in Assam, currently spread over the four districts of Kokrajhar, Chirang, Baksa and Udalguri.

Background

Several Bodo groups, led by the All Bodo Students Union (ABSU), have been demanding separate land for the ethnic community since 1972, a movement that has claimed nearly 4,000 lives.

About the agreement

  • As per the agreement, villages dominated by Bodos that were present outside the BTAD would be included and those with a non­Bodo population would be excluded.

  • Bodos living in the hills would be granted Scheduled Hill Tribe status.

  • As of now, the agreement had not addressed the issue of “citizenship or work permit” for non-domiciles in the BTAD, to be renamed as the Bodoland Territorial Region.

How will the settlement go through?

  • The memorandum of settlement says that the criminal cases registered against members of the NDFB factions for “non­heinous” crimes shall be withdrawn by the Assam government and in cases of heinous crimes it will be reviewed.

  • Around 1,500 cadres of NDFB (P), NDFB (RD) and NDFB (S) will be rehabilitated by the Centre and Assam Government. They will be assimilated in the mainstream and will surrender on January 30 on Mahatma Gandhi’s death anniversary.

  • The families of those killed during the Bodo movement would get Rs.5 lakh each.

  • After the agreement, the NDFB factions will leave the path of violence, surrender their weapons and disband their armed organisations within a month of signing the deal.

  • A Special Development Package of Rs. 1500 crore would be given by the Centre to undertake specific projects for the development of Bodo areas.

Source: The Hindu

Thermal scanners for detecting Coronavirus

GS-III :

Syllabus subtopic: Science and Technology- Developments and their Applications and Effects in Everyday Life.

Prelims and Mains focus: about the utility of thermal imaging systems in virus detection; about coronavirus outbreak

News: The aviation ministry has asked airport authorities to screen travellers flying in from China to stop the coronavirus outbreak from spreading to India.

  • So far, seven Indian airports have set up thermal scanners at immigration counters.

Growth rates of thermal imaging systems

The growth potential of thermal imaging systems is the highest in the US and Canada, while India is seen offering moderate opportunities.

How do thermal scanners work?

  • All live objects emit infrared energy or heat. Unlike regular cameras that record light reflected by objects, thermal cameras use heat sensors that can record heat generated by the body of a person or an object to create a 2D image with differing temperature levels.

  • When a person stands before the cameras, on the computer screens the hotter objects are highlighted with a different colour palette than the rest. These cameras can be calibrated to detect abnormal body temperatures such as over 101 degrees. Every pixel of the image has a temperature associated with it, so a higher resolution camera scan offers more detailed images.

When did airports start using them?

  • This isn’t the first time thermal scanning is being used to screen higher body temperature related to infections that can cause an epidemic. During the 2002-03 outbreak of SARS virus, airports in Singapore and China deployed them and have been using them since. Mumbai was one of the first Indian airports to use them during the swine flu outbreak in 2009.

  • During the 2014 Ebola outbreak in West Africa, many countries including India used the cameras. India is said to have these cameras at its major international airports. Heat scanners at Nigerian airports was one of the reasons the African country remained Ebola-free.

Why are thermal scanners used to screen coronavirus?

  • International airports have very high footfalls. Checking every passenger’s body temperature using thermometers can be a logistics nightmare and lead to delays at immigration counters.

  • Thermal cameras can scan large crowds and spot people with higher temperature than the rest. Once authorities identify possible vectors, they can segregate them for further screening.

How effective are thermal scanners?

  • Thermal cameras are effective only to the point of telling who has a higher body temperature or is running a high fever. It may not mean the person is infected with coronavirus. Additional screening systems are needed for that.

  • Studying thermal images is not as simple as observing a camera image. It requires training and understanding of thermal colours and their patterns. As far as their effect on the human body is concerned, these cameras are safe and discreet. There is no proven risk of any form of radiation.

Where else are these scanners used?

  • Thermal imaging tech is widely used by law enforcement agencies and militaries across the world. It was first used during the Korean War in 1950-53 to detect enemy soldiers in the dark. Firefighters in the US are known to use them to find people through dense smoke.

  • In 2019, police in Minneapolis used them to detect and nab a gang of car thieves in the dark.

  • Companies in the manufacturing and automotive sectors also use thermal cameras to check machines and equipment that might be at risk of catching fire.

Source: Livemint

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