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DAILY NEWS ANALYSIS

Monthly DNA

28 Dec, 2019

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Personal queries directly linked to establishing citizenship: SC

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 2005 judgement of SC; the link between NPR and NRC

News: Questions about a person’s place and date of birth, his parents’ names and their place of birth are meant to ascertain citizenship, the Supreme Court has held.

Background

  • The court, in a 2005 judgment on a writ petition filed by present Assam Chief Minister Sarbananda Sonowal, has clearly held that these personal questions are directly associated with “establishing citizenship”.
  • “In order to establish one’s citizenship, normally he may be required to give evidence of (i) his date of birth (ii) place of birth (iii) name of his parents (iv) their place of birth and citizenship,” the judgment, authored by Justice G.P. Mathur for a three­judge Bench of the court, on July 12, 2005 held.
  • Moreover, the court explained that these facts figured specially in the context of establishing citizenship because they “would necessarily be within the personal knowledge of the person concerned and not of the authorities of the State”. In case of doubts about a person’s citizenship, the burden of proving that these facts were true was on the person concerned.

NPR-NRC link

  • The government has so far denied any link between the National Population Register (NPR), which is to establish usual residency, and the National Register of Citizens (NRC), meant to establish citizenship. In fact, the NPR takes into account foreign citizens too.
  • However, if the NPR form of 2020 carries these personal questions highlighted in the judgment, apprehensions raised in the public mind that the NPR is a stepping stone for a nationwide NRC become justified.

What does the Citizenship Rules of 2003 say?

  • The 2005 judgment came just over a year after the Citizenship (Registration of Citizens and Issue of National Identity Cards) Rules of 2003 was notified in December 2003. The Rules clearly linked the NPR and the NRC.
  • Rule 4(3) of the Citizenship Rules states that personal details collected for the ‘Population Register’ would be used in the preparation of the National Register of Indian Citizens.
  • The Citizenship Rules define ‘Population Register’ as a “register containing details of persons usually residing in a village or rural area or town or ward or demarcated area [demarcated by the Registrar General of Citizen Registration] within a ward in a town or urban area”.
  • Rule 4(3) mandates that for “preparation and inclusion in the Local Register of Indian Citizens, the particulars collected of every family and individual in the Population Register shall be verified and scrutinised by the Local Registrar, who may be assisted by one or more persons as specified by the Registrar General of Citizen Registration”.

Source: The Hindu

Compulsory renewal of OCI cards goes

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 Home Ministry order; about NRI, OCI and PIO and benefits enjoyed by them

News: The Union Home Ministry has relaxed the provisions for Overseas Citizens of India (OCI) card holders that made it compulsory for those aged above 50 and below 20 to renew their cards on renewal of their passports.

What was the reason behind the move?

  • Several OCI card holders were not able to travel to India due to this and many were stopped by airlines and immigration authorities at various airports due to the mismatch.

About the relaxation order

  • According to a recent Home Ministry order, an OCI card holder is required to re-register each time a new passport is issued till 20 years of age and once after 50 years of age but re­issuance of OCI registration is not mandatory each time a new passport is issued between the ages of 21 and 50.
  • In order to facilitate OCI card holders, this requirement has been relaxed till 30th June 2020 as per MHA instructions dated December 17. The OCI cardholder should carry existing OCI card along with Old and New passport.

Benefits enjoyed by OCI cardholders

  • OCI cardholders are given benefits on a par with non-Resident Indians in financial, economic and educational fields, except in the acquisition of agricultural or plantation properties.
  • OCI cardholders are given free multiple entry and multi­purpose life­long visa to visit India and are also exempted from reporting to police authorities for any length of stay in India.

Who are NRIs, PIO and OCI?

  • Non-Resident Indians (NRI), Person of Indian Origin (PIO) and Overseas Citizen of India (OCI) are the three major categories in which the people from India go and live abroad can be categorised.
  • While NRIs is essentially a term used for Indians that live in another country, PIOs and OCIs are people who want to stay connected and involved with India more closely.

PIO-OCI merger

  • Merger of PIO cards with OCI cards was announced by PM in March 2016.

How will merging help?

  • Merging PIO and OCI will lead to simplification of the rules under a single umbrella. It would facilitate visa-free travel to India, rights of residency and participation in business and educational activities in the country. This is aimed at simplifying the visa-free entry for people of Indian origin into India.
  • The merger of the two cards could make PIO cardholders eligible for benefits already enjoyed by OCI cardholders. Merging of the two cards will also facilitate travel of Indians staying abroad and their participation in various activities in India.

Source: The Hindu

Government forms 28-member committee on statistics

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 new committee formed by MoSPI: its structure and mandate

News: Faced with increasing questions about the credibility of official economic data and the abrupt shelving of official reports, the Ministry of Statistics and Programme Implementation (MoSPI) has made a move to overhaul the system for reviewing statistics related to economic activity.

Background

  • The credibility of India’s statistical systems has been questioned over the last few years due to delay in the release of back series data for the new Gross Domestic Product (GDP) series (2011-12 base year) and more recently due to withholding of release of the employment and consumption expenditure surveys.

  • In March, citing risk to national and global reputation of India’s statistical bodies due to political interference, 108 economists and social scientists in a joint statement had appealed to all economists and statisticians to raise their voice against “the tendency to suppress uncomfortable data”

About the move by MoSPI

  • It has constituted a broad-based 28-member “Standing Committee on Economic Statistics” (SCES) headed by India’s first Chief Statistician, Pronab Sen, which includes three academicians who had, earlier in March this year, signed a joint statement of 108 economists and social scientists that flagged concerns over “political interference” in influencing statistical data in the country.

  • The new, broad-based panel, which has a sweeping mandate to review key data sets that track economic activity and labour force participation trends, will have representatives from the United Nations, Reserve Bank of India, Finance Ministry, NITI Aayog, two industry chambers, Tata Trust, and economists and statisticians from several educational institutions.

Mandate of the newly formed committee

  • The new Standing Committee on Economic Statistics, with 10 non-official members and 16 official members, has been mandated to review the framework for economic indicators pertaining to the industrial sector, the services sector and the labour force statistics.

  • This new panel, which is slated to meet for the first time on January 7 next year, will effectively subsume four existing committees — the Standing Committee on Labour Force Statistics (SCLFS), Standing Committee on Services Sector (SCSS), Standing Committee on Industrial Statistics (SCIS) and the Standing Committee on Services Sector and Unincorporated Sector Enterprises (SCSSUSE).

  • The new committee has been tasked with looking into datasets such as the Periodic Labour Force Survey, the Annual Survey of Industries, the Annual Survey of Services Sector Enterprises, the Annual Survey of Unorganised Sector Enterprises, Time Use Survey, Index of Service Production, Index of Industrial Production, Economic Census and other surveys or statistics brought before it.

  • The purpose of the committee is to ensure that there are no cross-cutting decisions across the various committees which by virtue of dealing with economic activity indicators have common linkages. The committee has been constituted to ensure there is convergence about decision making process so that quality of data is improved.

  • The new panel will also work on developing survey methodology including sampling frame, design, oversee the finalisation of the reports of the surveys, and conduct pilot surveys, if necessary, before finalising schedules for data collection.

  • The committee will also study the availability and compilation of related administrative statistics and identify data gaps, if any, and then suggest appropriate strategy.

  • Sub-committees, comprising subject experts, may also be constituted by the standing committee to look after particular subject areas.

Other panel regarding statistics

Prior to the formation of this new panel, the Advisory Committee on National Accounts Statistics (ACNAS) — which has the mandate to review the database and advice on data collection related to national accounts statistics — is the only other panel under MoSPI that has such wide representation.

Source: Indian Express

OPEC+ may consider ending oil output cuts in 2020

GS-II :

Syllabus subtopic: Bilateral, regional and global groupings and agreements involving India and/or affecting India's interests

Prelims and Mains focus: about the recent oil supply cut by OPEC countries and the reasons behind it; OPEC and OPEC+

News: The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, may consider wrapping up their oil output reduction in 2020, Russian Energy Minister Alexander Novak said on Friday.

Context

  • OPEC+ has been capping its output since 2017 in order to balance out the supply and demand on the global oil market as well as prop up oil prices.
  • OPEC+ this month decided to prolong its oil output restriction deal until the end of March and to deepen the cuts in order to balance out the oil market.

About OPEC

  • The Organization of the Petroleum Exporting Countries (OPEC) is a group of oil-producing nations that was first established in Baghdad, Iraq, in 1961.
  • OPEC is one of the most powerful international organizations in the world and was a major player in the shift towards state control over natural resources.

Membership:

  • The OPEC Statute distinguishes between the Founder Members and Full Members – those countries whose applications for membership have been accepted by the Conference.
  • The Statute stipulates that “any country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization, if accepted by a majority of three-fourths of Full Members, including the concurring votes of all Founder Members.”
  • The Statute further provides for Associate Members which are those countries that do not qualify for full membership, but are nevertheless admitted under such special conditions as may be prescribed by the Conference.
  • As of January 2019, OPEC has 14 member countries: five in the Middle East (Western Asia), seven in Africa, and two in South America. The current OPEC members are the following: Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia, United Arab Emirates, and Venezuela.
  • Qatar left OPEC on 1 January 2019, after joining the organization in 1961, to focus on natural gas production, of which it is the world's largest exporter in the form of liquified natural gas (LNG).
  • Ecuador has announced that it will leave OPEC on 1 January 2020.

About OPEC+

  • The non-OPEC countries which export crude oil are termed as OPEC plus countries.
  • OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.

Source: Indian Express

Russia deploys hypersonic nuclear missile

GS-II : International Relations Others

Russia deploys hypersonic nuclear missile

Syllabus subtopic: Effect of policies and politics of developed and developing countries on India's interests, Indian diaspora.

Prelims and Mains focus: About Avangard and its significance; tensions in US-Russia relations

News: Russia has deployed its first hypersonic nuclear-capable missiles, called

Avangard, with Vladimir Putin boasting that it puts his country in a class of its own.

Background:

  • Russian President Putin unveiled the Avangard and other prospective weapons systems in his state-of-the-nation address in March 2018, saying its ability to make sharp manoeuvres on its way to a target would render missile defense useless. “It heads to target like a meteorite, like a fireball,” he said at the time.
  • In December 2018, the Avangard was launched from the Dombarovskiy missile base in the southern Urals and hit a practice target on the Kura shooting range on the Kamchatka peninsula, 3,700 miles (6,000km) away.

About Avangard missile

  • The Avangard hypersonic glide vehicle can fly at 27 times the speed of sound, as a technological breakthrough comparable to the 1957 Soviet launch of the first satellite.

  • The Russian leader said the Avangard had been designed using new composite materials to withstand temperatures of up to 2,000C (3,632F) which can be reached while travelling at hypersonic speeds. The missile can carry a nuclear weapon of up to 2 megatons.

  • The Avangard is launched on top of an intercontinental ballistic missile, but, unlike a regular missile warhead, which follows a predictable path after separation, it can make sharp manoeuvres en route to its target, making it harder to intercept.\

  • The Avangard had been put on duty with a unit in the Orenburg region in the southern Ural mountains.

Why Russia felt the need to develop such missile systems

Putin has said Russia had to develop the Avangard and other weapons systems because of US efforts to develop a missile defence system that he claimed could erode Russia’s nuclear deterrent. Moscow has scoffed at US claims that its missile shield isn’t intended to counter Russia’s missile arsenals.

Significance

  • Putin has said Russia’s new generation of nuclear weapons can hit almost any point in the world and evade a US-built missile shield, though some western experts have questioned how advanced some of the weapons programmes are.
  • This week, Putin noted that for the first time Russia was leading the world in developing a new class of weapons, unlike in the past when it was catching up with the US.
  • The defence ministry said last month it had demonstrated the Avangard to a team of US inspectors as part of transparency measures under the New Start nuclear arms treaty between the two countries.

About China’s hypersonic missile

  • China has tested its own hypersonic glide vehicle, believed to be capable of travelling at least five times the speed of sound.
  • It displayed the weapon called Dong Feng 17, or DF-17, at a military parade marking the 70th anniversary of the founding of the Chinese state.

What about USA?

  • US officials have talked about putting a layer of sensors in space to more quickly detect enemy missiles, particularly the hypersonic weapons. The administration also plans to study the idea of basing interceptors in space, so the US can strike incoming missiles during the first minutes of flight when the booster engines are still burning.
  • The Pentagon has been working on developing hypersonic weapons in recent years, and the defence secretary, Mark Esper, said in August that he believed it would be a couple of years before the US had one.

Source: Indian Express

Worst not over yet, RBI forecasts NPAs will rise

GS-III : Economic Issues Banking

Worst not over yet, RBI forecasts NPAs will rise

Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Prelims and Mains focus: on the findings of RBI’s report and challenges mentioned by it in the economic revival process

News: The Reserve Bank of India (RBI) on Friday cautioned that the asset quality of scheduled commercial banks (SCB) may worsen next year owing to changes in the macroeconomic scenario.

Finacial Stability Report 2019: key findings

  • In its latest Financial Stability Report, the central bank also warned that there remains an inherent risk of froth”— conditions that precede a market bubble—building up in the system due to excess liquidity.
  • Citing factors such as an increase in slippages and declining credit growth, the central bank in its biannual commentary said bad loans of SCBs as a percentage of total loans is expected to increase to 9.9% by September 2020 from 9.3% in September 2019.
  • This marks a revision of its projection made six months ago, when it had said that the percentage of bad loans was expected to come down by March 2020.
  • The RBI has cut policy rates by 135 basis points so far this year. It also warned that multilateral trade and evolving geopolitical uncertainties may continue to have repercussions across financial markets globally.
  • The RBI said stress tests done on public sector banks revealed that their gross non-performing asset ratio may rise from 12.7% in September 2019 to 13.2% by September 2020.
  • Private sector banks, too, could see an increase in gross NPAs from 3.9% to 4.2% in the period under consideration. These stress tests for credit risk were done to test the resilience of Indian banks against macroeconomic shocks. It encompassed one baseline and two (medium and severe) adverse macroeconomic risk scenarios.
  • Among them, three banks may have capital adequacy below the minimum regulatory level of 9% by September 2020, without considering any further planned recapitalization. A severe shock could bring down the capital adequacy of five banks below 9%.
  • The performance of public sector banks (PSBs) should be improved and that there was a need to build buffers against “disproportionate operational risk losses”. Private sector banks, on the other hand, need to focus on aspects of corporate governance.
  • India’s financial system remains stable notwithstanding domestic growth.

Challenges mentioned in the report

  • The challenge is to ensure the transmission of monetary policy impulses to the advantage of real economies and not to aid the build-up of froth in financial markets.
  • The RBI report said reviving the twin engines of India’s economic growth — private consumption and investment — while being vigilant about developments in global financial markets remain a critical challenge for the central bank.
  • It warned against unbridled interest rate cuts, which could cause a “cobra effect”—when a well-intentioned solution ends up worsening the problem.
  • The report said aggregate demand slackened in the second quarter of the current financial year, ending March 2020, adding to slowing economic growth.
  • While the outlook for capital inflow remains positive, India’s exports could face headwinds in the event of a sustained global slowdown, but the current account deficit is likely to be under control, reflecting muted energy price outlook.

Source: mint

RBI directs large cooperative banks to report exposures above Rs. 5 crore

GS-III : Economic Issues Banking

RBI directs large cooperative banks to report exposures above Rs. 5 crore

Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Prelims and Mains focus: about CRILC, Cooperative banks and how they are different from commercial banks

News: The Reserve Bank on Friday directed large cooperative banks to report all exposures of Rs 5 crore and more to the Central Repository of Information on Large Credits (CRILC), a move aimed at early recognition of financial distress.

Background

  • Earlier in its bi-monthly monetary policy review this month, the RBI had announced to bring UCBs with assets of Rs 500 crore and above under the CRILC reporting framework.

  • “It has been decided that Primary (Urban) Co-operative Banks (UCBs) having total assets of Rs 500 crore and above...on all borrowers having aggregate exposures of Rs 5 crore and above with them to CRILC maintained by the Reserve Bank," it said in a notification.

What is CRILC?

  • The Reserve Bank has created a CRILC of commercial banks, all India financial institutions and certain non-banking financial companies with multiple objectives, which, among others, include strengthening offsite supervision and early recognition of financial distress.
  • It was set up to collect, store, and disseminate credit data to lenders.
  • CRILC is a borrower-level supervisory dataset that keeps the record of loans of Rs 5 crore and above.
  • In India, there are four privately owned credit information companies (CICs). They are CIBIL, Equifax, Experian, and High Mark Credit Information Services.
  • The RBI has also mandated all its regulated entities to submit credit information individually to all four CIC.
  • “It has been decided that Primary (Urban) Co-operative Banks (UCBs) having total assets of Rs 500 crore and above...on all borrowers having aggregate exposures of Rs 5 crore and above with them to CRILC maintained by the Reserve Bank," it said in a notification.
  • Aggregate exposure will include all fund-based and non-fund-based exposure (like partial credit enhancement) including investment exposure on the borrower.
  • To start with, UCBs will be required to submit CRILC report on quarterly basis with effect from December 31, 2019.

About Cooperative Banks

  • Initially set up to supplant indigenous sources of rural credit, particularly money lenders, today they mostly serve the needs of agriculture and allied activities, rural-based industries and to a lesser extent, trade and industry in urban centres. Anyone Co-operative Bank Limited (ACBL) is the first co-operative bank in India located in the city of Vadodara in Gujarat.
  • Registered under the Cooperative Societies Act, 1912 → Under the state government
  • Managerial aspects of these banks, — registration, management, administration, recruitment, amalgamation, liquidation, etc are controlled by the state governments
  • Regulated by the Reserve Bank of India under the Banking Regulation Act, 1949 and Banking Laws (Application to Co-operative Societies) Act, 1965
  • Matters related to banking are governed by RBI directives
  • Cooperative banks are owned by their customers and follow the cooperative principle of one person, one vote
  • Work on the principle of “No Profit, No Loss”
  • Priority Sector Lending (PSL) does not applies to cooperative banks
  • Reserve ratios viz. SLR & CRR applies to them

Difference Between Commercial Banks & Cooperative Banks

Cooperative Banks

Commercial Banks

Co-operative banks are co-operative organisations.

Commercial banks are joint-stock banks

Governed by the Co-operative Societies Act as well as Banking Regulation Act

Governed by the Banking Regulation Act

Subject to the rules laid down by the Registrar of Co-operative Societies

Subject to the control of the Reserve Bank of India directly

Borrowers are member shareholders, so they have some influence on the lending policy of the banks, on account of their voting power

Borrowers of commercial banks are only account- holders and have no voting power as such → Voting power as per shareholding

Have not much scope of flexibility on account of the rigidities of the bye-laws of the Co-operative Societies

Free from such rigidities

PSL does not applies

PSL Applies

Do not pursue the goal of profit maximization

Works for profit maximization

Source: Indian Express

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