Daily Current Affairs : 5th September 2020

Daily Current Affairs for UPSC CSE

Topics Covered

  1. RBI Revised Guidelines on Priority Sector Lending
  2. Project Dolphin
  3. Force Majeure
  4. ‘State of the Young Child
  5. Fixed tenure for House Committee

1 . RBI Revised Guidelines on Priority Sector Lending


Context: The Reserve Bank of India (RBI) has released revised priority sector lending guidelines to augment funding to segments including start-ups and agriculture.

Background

  • The PSL guidelines were last reviewed for commercial banks in April 2015 and for urban cooperative banks in May 2018.
  • The revised PSL guidelines will enable better credit penetration to credit deficient areas, increase the lending to small and marginal farmers and weaker sections, boost credit to renewable energy, and health infrastructure

Details of Revised Guidelines

  • Fresh Categories: Bank finance of up to ₹50 crore to start-ups, loans to farmers both for installation of solar power plants for solarisation of grid-connected agriculture pumps, and for setting up compressed biogas (CBG) plants have been included as fresh categories eligible for finance under the priority sector.
  • Addressing Regional Disparities : The revised PSL guidelines have been framed to address regional disparities in the flow of priority sector credit. Higher weightage has been assigned to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is comparatively low.
    • At the district level, it has been decided to rank districts on the basis of per capita credit flow to priority sector and build an incentive framework for districts with comparatively lower flow of credit and a dis-incentive framework for districts with comparatively higher flow of priority sector credit.
    • A higher weight (125%) would be assigned to the incremental priority sector credit in the identified districts where the credit flow is comparatively lower (per capita PSL less than ₹6,000), and a lower weight (90%) would be assigned for incremental priority sector credit in the identified districts where the credit flow is comparatively higher (per capita PSL greater than ₹25,000)
  • Farm sector: The targets prescribed for ‘small and marginal farmers’ and ‘weaker sections’ are being increased in a phased manner. Higher credit limit has been specified for farmer producer organisations (FPOs)/farmers producers companies (FPCs) undertaking farming with assured marketing of their produce at a pre-determined price.
    • Farmers with landholding of up to one hectare will be classified as marginal farmers and those with more than one hectare and up to two hectares will be called small farmers.
  • Renewable energy: Loan limits for renewable energy has been doubled.
    • Bank loans up to ₹30 crore to borrowers for purposes like solar-based power generators, biomass-based power generators, wind mills, micro-hydel plants and for non-conventional energy based public utilities, will be eligible for priority sector classification.
    • For individual households, the loan limit will be ₹10 lakh per borrower
  • Ayushmaan Bharat: The credit limit for health infrastructure, including those under Ayushman Bharat, has been doubled,
  • Higher weightage has been assigned to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is comparatively low.

Benefits

  • It will incentivise credit flow to specific segments like clean energy, weaker sections, health infrastructure and credit deficient geographies
  • “These measures are also aligned to focus areas of development as per extant policy environment and will support funding requirements in these specific sectors

2 . Project Dolphin


Context : In his Independence Day Speech this year, Prime Minister Narendra Modi announced the government’s plan to launch a Project Dolphin. The proposed project is aimed at saving both river and marine dolphins.

What will Project Dolphin do?

  • Project Dolphin will be on the lines of Project Tiger, which has helped increase the tiger population.
  • Such an initiative got in-principle approval in December last year itself, at the first meeting of the National Ganga Council (NGC), headed by the Prime Minister. “Special Conservation program needs to be taken up for Gangetic Dolphin which is national aquatic animal and also indicator species for the river Ganga spread over several states,” state the minutes of meeting.
  • So far, the National Mission for Clean Ganga (NMCG), which implements the government’s flagship scheme Namami Gange, has been taking some initiatives for saving dolphins.
  • Now, Project Dolphin is expected to be implemented by the Ministry of Environment, Forest and Climate

What is the Gangetic dolphin?

  • The Gangetic river system is home to a vast variety of aquatic life, including the Gangetic dolphin (Platanista gangetica).
  • The Gangetic dolphin is one of five species of river dolphin found around the world.
  • It is found mainly in the Indian subcontinent, particularly in Ganga-Brahmaputra-Meghna and Karnaphuli-Sangu river systems.
  • The Conservation Action Plan for the Ganges River Dolphin, 2010-2020, describes male dolphins as being about 2-2.2 metres long and females as a little longer at 2.4-2.6 m. An adult dolphin could weigh between 70 kg and 90 kg. The breeding season of the Gangetic dolphin extends from January to June.
  • They feed on several species of fishes, invertebrates etc.

Why is it important to save dolphins?

  • There was a time when Gangetic dolphins could be spotted in the Ganga at several places, from its delta in the Bay of Bengal to upstream in the Himalayan foothills. It was also found in the Ganga’s tributaries.
  • Some experts have reported that during the 19th century, dolphins were seen in the Yamuna up to as far as Delhi.
  • However, the construction of dams and barrages, and increasing pollution have led to a decline in the population of aquatic animals in the rivers in general and of dolphins in particular.
  • Aquatic life is an indicator of the health of river ecosystems. As the Gangetic dolphin is at the top of the food chain, protecting the species and its habitat will ensure conservation of aquatic lives of the river.

Have other governments used aquatic life as an indicator of the health of a river system?

  • Globally, there have been such examples. For instance, the Rhine Action Plan (1987) of the International Commission for the Protection of the Rhine (ICPR) — representing Switzerland, France, Germany, Luxemburg and the Netherlands — brought back the salmon. The return of the migratory fish is taken as an indicator of the river’s improved health.
  • Salmon used to migrate from the North Sea to the Rhine every year and reproduce, but this stopped when pollution increased in the river. After a chemical accident in 1986 that caused the death of fish and microorganisms, the Action Plan was launched. This led to improvement in the quality of the river water, and the salmons began to return.
  • “While the salmon was considered lost in the Rhine in 1958, today several hundred salmon from the North Sea return to the accessible tributaries of the Rhine every year and reproduce naturally there,” says Assessment Rhine 2020, and ICPR report.

How many Gangetic dolphins remain?

  • While no exact count is available, various estimates suggest that the Gangetic dolphin population in India could be about 2,500-3,000.
  • However, Minister of State for Environment, Forest and Climate Change Babul Supriyo had told Lok Sabha last year that there were about 1,272 dolphins in Uttar Pradesh and 962 in Assam.
  • Increasing pollution in the Ganga has brought down the number over the years.

What has been done to save Gangetic dolphins so far?

Although efforts to save them were started in the mid-1980s, but the estimates suggest the numbers have not risen as a result. The Gangetic dolphin remains listed as endangered by the International Union for the Conservation of Nature.

  • WILDLIFE ACT PROTECTION: After the launch of Ganga Action Plan in 1985, the government on November 24, 1986 included Gangetic dolphins in the First Schedule of the Indian Wildlife (Protection), Act 1972. This was aimed at checking hunting and providing conservation facilities such as wildlife sanctuaries. For instance, Vikramshila Ganges Dolphin Sanctuary was established in Bihar under this Act.
  • CONSERVATION PLAN: The government also prepared The Conservation Action Plan for the Ganges River Dolphin 2010-2020, which “identified threats to Gangetic Dolphins and impact of river traffic, irrigation canals and depletion of prey-base on Dolphins populations”.
  • NATIONAL AQUATIC ANIMAL: On October 5, 2009, the then Prime Minister Manmohan Singh, while chairing the maiden meeting of the National Ganga River Basin Authority, declared the Gangetic river dolphin as the national aquatic animal. Now, the National Mission for Clean Ganga celebrates October 5 as National Ganga River Dolphin Day.

3 . Force Majeure


Context : The Covid-19 pandemic and the lockdown imposed across the globe to contain the spread of the virus has resulted in major disruptions in economic activity. Businesses are looking towards a legal provision — the force majeure or “Act of God” clause that has its origins in the Napoleonic Code — to cut losses.

Background

  • Attributing the shortfall in GST collections to disruptions due to Covid-19, Finance Minister Nirmala Sitharaman said the economy is facing an Act-of-God-like situation.
  • On February 19, The Finance Ministry had issued an office memorandum inviting attention to the force majeure clause (FMC) in the 2017 Manual for Procurement of Goods issued by the Department of Expenditure clarifying that the pandemic “should be considered a case of natural calamity and FMC may be invoked, wherever considered appropriate”.

What is a force majeure clause?

  • The law of contracts is built around a fundamental norm that the parties must perform the contract. When a party fails to perform its part of the contract, the loss to the other party is made good. However, the law carves out exceptions when performance of the contract becomes impossible to the parties.
  • A force majeure clause is one such exception that releases the party of its obligations to an extent when events beyond their control take place and leave them unable to perform their part of the contract.
  • FMC is a clause that is present in most commercial contracts and is a carefully drafted legal arrangement in the event of a crisis. When the clause is triggered, parties can decide to break from their obligations temporarily or permanently without necessarily breaching the contract. Companies in such situations use the clause as a safe exit route, sometimes in opportunistic ways, without having to incur the penalty of breaching the contract.
  • Generally, an “Act of God” is understood to include only natural unforeseen circumstances, whereas force majeure is wider in its ambit and includes both naturally occurring events and events that occur due to human intervention. However, both concepts elicit the same consequences in law.

What situations legally qualify for use of force majeure?

  • While some contracts have clauses with standard circumstances, some contracts would have specific circumstances that are more focused. For example, a shipping contract would have a force majeure clause that could cover natural disaster like tsunami.
  • War, riots, natural disasters or acts of God, strikes, introduction of new government policy imposing an embargo, boycotts, outbreak of epidemics and such situations are generally listed. If an event is not described, then it is interpreted in a way that it falls in the same category of events that are described.
  • A force majeure clause is negotiated by parties, and events that could potentially hamper the performance of the contract are catalogued. It is not invoked just by expressing that an unforeseen event has occurred.
  • In case a contract does not have a force majeure clause, there are some protections in common law that can be invoked by parties. For example, the Indian Contract Act, 1872 provides that a contract becomes void if it becomes impossible due to an event after the contract was signed that the party could not prevent.

What happens when a force majeure clause is triggered?

  • If a party to a contract believes that the other party has invoked the force majeure clause in an unjustified situation, it can move court seeking performance of the contract.
  • Courts read the wording of the clause closely to allocate risks between the parties. Court rulings have established that force majeure cannot be invoked when performance of the contract has become difficult, but only when it has become impossible. It looks into whether the party arguing impossibility of performance has tried all other avenues to fulfil its liabilities before invoking force majeure.
  • For example, in a 2017 case, the Supreme Court cited a 1961 House of Lords decision that ruled that the closure of Suez Canal, although unforeseen, had not rendered a contract to ship goods from Africa impossible since a longer route around the Cape of Good Hope existed.
  • Vaguely indicating that the pandemic failed the contract would face a legal challenge. The court would look into specifics like whether a lockdown imposed to contain the pandemic locally prevented performance of the contract.
  • The court would also look into how unforeseen the cited circumstance really is when catalogued in the contract specifically. Global contracts signed after the initial outbreak in Wuhan could fail scrutiny if the contracts do not take into account viral pandemics.
  • In April this year, the Bombay High Court did not accept the force majeure argument in a case where the petitioner argued that Covid-19-related lockdowns had frustrated a contract for supply of steel. Although the decision factored in other arguments, the vague construction of the pandemic reason did not cut ice with the court

Model Code

  • The International Chamber of Commerce has developed a Model Code on the force majeure clause reflecting current international practice.
  • The Code states that the impediment triggering the operation of the force majeure clause must be beyond the party’s reasonable control; and that it could not reasonably have been foreseen at the time of the conclusion of the contract; and that the effects of the impediment could not reasonably have been avoided or overcome by the affected party.

4 . State of the Young Child


Context: Recently Vice-President Venkaiah Naidu launched ‘State of the Young Child’ in India report by non-governmental organisation Mobile Creches.

About the report

  • ‘State of the Young Child’ in India report is released by the 50-year-old NGO, Mobile Creches.
  • Mobile creches work in the field of early childhood care and development by ensuring creche services at construction sites and slum settlements across several cities.
  • The report includes 2 indexes- Young child outcomes index and Young child environment index.
    • The young child outcomes index measures health, nutrition and cognitive growth with the help of indicators such as infant mortality rate, stunting and net attendance at the primary school level. The index has been constructed for two time periods (2005–2006 and 2015–2016) to enable inter-State comparisons as well as provide an idea of change over time.
    • The Young child environment index understands the policy and environment enablers that influence a child’s well-being. It uses five policy enablers that influence child well-being outcomes, including poverty alleviation, strengthening primary healthcare, improving education levels, safe water supply and promotion of gender equity.The environment index was constructed for 2015–2016 only due to limitations of data availability.

Findings of the report

  • Increase in public spending on children: According to its analysis on expenses towards child nutrition, healthcare, education and other necessary protection services, India spent ₹1,723 per child in 2018–2019, an amount that is insufficient and fails to reach the entire eligible population.
  • Huge gap: The report points out that though the budgetary allocation for the Ministry of Women and Child Development has seen a year-on-year increase, all the additional funds have been allocated towards nutrition delivery under the Integrated Child Development Scheme (ICDS). The population of children under six years of age is 158.8 million whereas the ICDS covers only 71.9 million children as calculated from the total number of beneficiaries across States.

Young child outcomes index

  • According to the report, Kerala, Goa, Tripura, Tamil Nadu and Mizoram are among the top five States for well-being of children.
  • It identifies eight States that have scores below the country’s average: they are Assam, Meghalaya, Rajasthan, Chhattisgarh, Madhya Pradesh, Jharkhand, Uttar Pradesh and Bihar.

Young child environment index

  • According to the environment index, Kerala, Goa, Sikkim, Punjab and Himachal Pradesh secured the top five positions.
  • The eight States that have a below average score on the outcomes index also fared poorly on this one.

5 . Tenure for House committees


Context: The Rajya Sabha Secretariat is mulling over changing the rules governing the standing committees’ tenure to make it two years.

Current Tenure

  • Currently Standing Committees have a tenure of 1 year

Why an extension of tenure is needed?

  • The tenure of all standing committees end on September 11, and they can’t hold deliberations till new panels are formed.
  • Many chairpersons of the current panels have felt that a significant amount of the tenure of their committees was lost due to the pandemic.
  • Many panels have not been able to complete reports on the subjects they were working on.

Wha are the options being considered?

  • First is to extend the term of the panels for a year
  • Second is to form new committees with a fixed tenure of two years.

Standing Committee

  • Standing Committees are permanent and regular committees which are constituted from time to time in pursuance of the provisions of an Act of Parliament or Rules of Procedure and Conduct of Business in Lok Sabha.
  • The work of these Committees is of continuous nature.
  • The Financial Committees, DRSCs and some other Committees come under the category of Standing Committees.
  • Origin: Rules Committee of the Lok Sabha had recommended setting-up of 17 Department Related Standing Committees (DRSCs). Accordingly, 17 Department Related Standing Committees were set up on 8 April 1993. In July 2004, rules were amended to provide for the constitution of seven more such committees, thus raising the number of DRSCs from 17 to 24.
  • Members: Each of these committees have 31 members – 21 from Lok Sabha and 10 from Rajya Sabha. These members are to be nominated by the Speaker of Lok Sabha or the Chairman of Rajya Sabha respectively.

The functions of these Committees are:

  • To consider the Demands for Grants of various Ministries/Departments of Government of India and make reports to the Houses;
  • To examine such Bills as are referred to the Committee by the Chairman, Rajya Sabha or the Speaker, Lok Sabha, as the case may be, and make reports thereon;
  • To consider Annual Reports of ministries/departments and make reports thereon; and
  • To consider policy documents presented to the Houses, if referred to the Committee by the Chairman, Rajya Sabha or the Speaker, Lok Sabha, as the case may be, and make reports thereon.

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