Daily Current Affairs : 22nd & 23rd September 2020

Daily Current Affairs for UPSC CSE

Topics Covered

1. Minimum Support Price
2. Rules for Suspension of MPs
3. Insolvency and Bankruptcy Code (Second Amendment) Bill
4. Electrons in Communication
5. Privatization of select public sector banks
6. Basel Norms
7. Indian Institutes of Information Technology Laws (Amendment) Bill, 2020
8. Recent Bills Passed by Rajya Sabha
9. CRISPR Test
10. Environment Pollution (Prevention and Control) Authority
11. Multi Stakeholder Body
12. Public Health Act
13. Facts for Prelims

1 . Minimum Support Price

Context: Recently the agriculture ministry has approved the MSP hike for six crops.

Background

• The decision of MSP hike has come amid vehement protests by farmers, who fear that the new agricultural marketing reforms through 3 bills would result in the phasing out of MSP and public procurement.

Crops for which MSP has been increased

• The MSP for wheat will be increased by 2.6% or ₹50 per quintal to ₹1,975 per quintal for the upcoming rabi or winter crop season.
• The MSP rates were also hiked for five other winter crops — barley, gram, masur dal, safflower, and rapeseed and mustard.

What is Minimum Support Price (MSP)?

• Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.
• MSP is the minimum price set by the Government at which farmers can expect to sell their produce for the season.
• When market prices fall below the announced MSPs, procurement agencies step in to procure the crop and ‘support’ the prices. Hence minimum support prices are a guarantee price for their produce from the Government.
• The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.
• In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced minimum price.
• The Cabinet Committee of Economic Affairs announces MSP for various crops at the beginning of each sowing season based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).
• The FCI and Nafed help the Centre procure select food crops with the help of the States. Procured farm products are kept in government warehouses and distributed through the PDS and various food security programmes.
• Currently, there are 20-plus crops that have an MSP announced for them every year before the beginning of the kharif and rabi seasons.

Factors taken into consideration for fixing MSP include:

In formulating the recommendations in respect of the level of minimum support prices and other non-price measures, the Commission takes into account, apart from a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities, the following factors:-

• Cost of production
• Changes in input prices
• Input-output price parity
• Trends in market prices
• Demand and supply
• Inter-crop price parity
• Effect on industrial cost structure
• Effect on cost of living
• Effect on general price level
• International price situation
• Parity between prices paid and prices received by the farmers.
• Effect on issue prices and implications for subsidy

Cost of Production

• CACP considers both A2+FL and C2 costs while recommending MSPs. CACP reckons only A2+FL cost for return.
• However, C2 costs are used by CACP primarily as benchmark reference costs (opportunity costs) to see if the MSPs recommended by them at least cover these costs in some of the major producing States.
• The Union Budget for 2018-19 had announced the pre-determined principle to keep MSP at levels of one and half times of the cost of production. Accordingly, Government has increased the MSPs for all mandated Kharif, Rabi and other commercial crops with a return of atleast 50 per cent of cost of production for the agricultural year 2018-19.
• During 2019-20 also, Government has increased the MSP of all mandated kharif and rabi crops in line with the principle of fixing the MSP with a return of atleast 50 per cent of the cost of production.

Formulae to arrive at the cost of production

The CACP has three formulae to arrive at the cost of production: A2, A2+FL and C2.

• A2 costs cover all paid-out expenses, both in cash and kind, incurred by farmers on seeds, fertilisers, chemicals, hired labour, fuel and irrigation, among others.
• A2+FL covers actual paid-out costs plus an imputed value of unpaid family labour.
• C2 costs are more comprehensive, accounting for the rentals and interest forgone on owned land and fixed capital assets respectively, on top  of A2 + FL

Crops Covered

• Government announces minimum support prices (MSPs) for 22 mandated crops and fair and remunerative price (FRP) for sugarcane.
• The mandated crops are 14 crops of the kharif season, 6 rabi crops and two other commercial crops. In addition, the MSPs of toria and de-husked coconut are fixed on the basis of the MSPs of rapeseed/mustard and copra, respectively. The list of crops are as follows.
  • Cereals (7) – paddy, wheat, barley, jowar, bajra, maize and ragi
  • Pulses (5) – gram, arhar/tur, moong, urad and lentil
  • Oilseeds (8) – groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and nigerseed
  • Raw cotton
  • Raw jute
  • Copra
  • De-husked coconut
  • Sugarcane (Fair and remunerative price)
  • Virginia flu cured (VFC) tobacco

Advantages

• Price volatility makes life difficult for farmers. Though prices of agri commodities may soar while in short supply, during years of bumper production, prices of the very same commodities plummet.
• MSPs ensure that farmers get a minimum price for their produce in adverse markets. MSPs have also been used as a tool by the Government to incentivise farmers to grow crops that are in short supply.

Criticisms

• The Government of India has an MSP for 23 crops, but procurement at the MSP is effectively limited to rice and wheat, and that too concentrated in a few States only.
• Some critics argue that a rise in the MSP will lead to increase in food inflation, while others that it will augment farmers’ income
• Substantial proportion of crops are sold to local private traders and input dealers to whom the resource-poor marginal and small landholders are obligated to sell their crops due to tie-up with credit.
• A vast majority of the farming population is unaware of its existence as per the National Sample Survey’s (NSS) Situation Assessment Survey of Agricultural Households 2013, even for paddy and wheat, less than one-third of farmers were aware of the MSP; for other crops, such awareness was negligible.

2 . Rules for Suspension of MPs

Context: The Rajya Sabha has suspended eight Opposition MPs for their “unruly” behaviour.

What are the reasons for suspending an MP?

• Speaker of the Lok Sabha and Chairman of the Rajya Sabha are to maintain order so that the House can function smoothly and if that proceeding are not conducted in a proper manner then they can force a Member to withdraw from the House (for the remaining part of the day), or to place him/her under suspension.
• Unlike the Lok Sabha speaker, the Rajya Sabha Chairman does not have the power to suspend a Member.

What are the rules under which the Speaker acts?

• Rule Number 373 of the Rules of Procedure and Conduct of Business says: “The Speaker, if is of the opinion that the conduct of any Member is grossly disorderly, may direct such Member to withdraw immediately from the House, and any Member so ordered to withdraw shall do so forthwith and shall remain absent during the remainder of the day’s sitting.”
• To deal with more recalcitrant Members, the Speaker may take recourse to Rules 374 and 374A. 
• Rule 374 says:
  • The Speaker may, if deems it necessary, name a Member who disregards the authority of the Chair or abuses the rules of the House by persistently and wilfully obstructing the business thereof.
  • If a Member is so named by the Speaker, the Speaker shall, on a motion being made forthwith put the question that the Member (naming such Member) be suspended from the service of the House for a period not exceeding the remainder of the session: Provided that the House may, at any time, on a motion being made, resolve that such suspension be terminated.
  • A member suspended under this rule shall forthwith withdraw from the precincts of the House.

What does rule 374A say?

• This clause was incorporated in the Rule Book on December 5, 2001. 
• The intention was to skirt around the necessity of moving and adopting a motion for suspension.
• According to Rule 374A: 
  • Notwithstanding anything contained in rules 373 and 374, in the event of grave disorder occasioned by a Member coming into the well of the House or abusing the Rules of the House persistently and wilfully obstructing its business by shouting slogans or otherwise, such Member shall, on being named by the Speaker, stand automatically suspended from the service of the House for five consecutive sittings or the remainder of the session, whichever is less: Provided that the House may, at any time, on a motion being made, resolve that such suspension be terminated.
  • On the Speaker announcing the suspension under this rule, the Member shall forthwith withdraw from the precincts of the House.”

What is the procedure for revocation of a Member’s suspension?

• While the Speaker is empowered to place a Member under suspension, the authority for revocation of this order is not vested in her. 
• It is for the House to resolve on a motion to revoke the suspension.

What happens in Rajya Sabha?

• Like the Speaker in Lok Sabha, the Chairman of the Rajya Sabha is empowered under Rule Number 255 of its Rule Book to “direct any Member whose conduct is in his opinion grossly disorderly to withdraw immediately” from the House.
• “Any Member so ordered to withdraw shall do so forthwith and shall absent himself during the remainder of the day’s meeting.”
• The Chairman may “name a Member who disregards the authority of the Chair or abuses the rules of the Council by persistently and wilfully obstructing” business. 
• In such a situation, the House may adopt a motion suspending the Member from the service of the House for a period not exceeding the remainder of the session.
• The House may by another motion terminate the suspension.
• Unlike the Speaker, the Rajya Sabha Chairman does not have the power to suspend a Member.

3 . Insolvency and Bankruptcy Code (Second Amendment) Bill

Context: Parliament has passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, which provides that insolvency proceedings against defaulting companies will not be initiated for at least six months starting from March 25.

Background

• Insolvency is a situation where individuals or companies are unable to repay their outstanding debt.  
• About Insolvency and Bankruptcy Code, 2016 provides a time-bound process for resolving insolvency in companies and among individuals.  

About the Amendment

• Insolvency and Bankruptcy Code (Second Amendment) Bill  amends the Insolvency and Bankruptcy Code, 2016.
• Main Objective of the Bill seeks is to temporarily suspend initiation of the corporate insolvency resolution process (CIRP) under the Code.  

Amendments under the bill

• Prohibition on the initiation of CIRP for certain defaults
  • The Bill provides that for defaults arising during the six months from March 25, 2020, CIRP can never be initiated by either the company or its creditors.  The central government may extend this period to one year through notification.  The Bill clarifies that during this period, CIRP can still be initiated for any defaults arising before March 25, 2020.
• Liabilities for wrongful trading: 
  • The Bill prohibits the Resolution Professional from filing an application in relation to the defaults for which initiation of CIRP has been prohibited.

4 . Electrons in Communication

Background

• As the monsoon begins to officially retreat, many in India will be looking forward to some relief from a phenomenon that they have come to expect whenever it rains: Internet connections become unstable, and cell phone networks deteriorate.
• In the 1860s, the Scottish physicist James Maxwell predicted the existence of a new kind of ‘electromagnetic’ waves that travel at a speed of ~300 million metres/second. A couple of decades on, Heinrich Hertz experimentally verified Maxwell’s theory and, in 1895, Sir Jagadish Chandra Bose demonstrated for the first time wireless communication with electromagnetic waves over a distance of 23 metres in Calcutta, establishing the foundation of a modern system of communication.
• To understand how we communicate or send messages today via the Internet across continents – and then how this communication is disrupted – we first need to understand the fundamental nature of electrical force.

Electrons in communication

• There are three fundamental building blocks, or ‘Lego bricks’ that nature uses to make all matter – two kinds of quarks, and the electron. All matter consists of many, many electrons.
• Electrons have a property called mass, which indicates how strongly the gravitational force acts on them, and is therefore directly related to their weight.
• Another property of electrons called electric charge indicates how strongly the electrical force acts on them. The electron’s charge also decides the strength of the electrical force they apply on other objects that, too, have a charge . This force, like the force of gravity, acts at a distance.
• So, two electrons separated by a long distance apply electrical forces without ever making contact. Since an electron is charged, the space around it is filled with an electric field.
• If you imagine that an electron lives in an ocean it creates, you can, if you wiggle the electron, initiate a wave in this ocean. This is similar to throwing a stone in a still pond, which creates ripples that travel away from it. When this wave passes by another electron that happens to be in our electron’s ocean, this other electron will bounce up and down – as you might when an ocean wave washes over you.
• An electromagnetic wave is initiated at some location by wiggling electrons, which then washes over electrons at some distant location. The word ‘signal’ specifically means electromagnetic waves. The electrons in your eyes can also respond to these waves, provided the wavelength – the distance between peaks in the wave – is within a specific range. In this particular wavelength range, electromagnetic waves are visible to us; they are light! The most basic form of long-distance communication – flashing a bright light and using Morse Code – uses the transfer of electromagnetic waves from one location to another.

Optical fibres & the rain

• Internet is a vast network of computers across the world that can transfer electromagnetic waves to each other, and therefore communicate.
• There are two primary ways to transport waves — by optical fibre, and cellular towers (via satellite link).
• Optical fibres are long, thin glass rods of thickness less than human hair. Light is confined in the rod due to the phenomenon of total internal reflection. When light travelling from a denser medium to a less dense one (for instance, from glass to air) hits the surface between two transparent media at a critical angle, it is entirely reflected back into the denser medium. This way, electromagnetic waves are trapped inside the fibre, and travel down the length of it.
• Splicing or joining hundreds of thousands of kilometres of fibres together, and burying them underground or undersea, allows communication across the globe. The electromagnetic waves used for communication (infrared waves) are generated by lasers, and have a slightly longer wavelength than visible light, so they are invisible to us.
• Electrical components are also required along the entire optical fibre network to amplify and switch the light on and off for digital communications.
• Monsoon rain might interrupt this subterranean network in many ways. The combination of water seeping into the ground and landslides can damage the various electric components in the network, or cause physical damage at locations where the fibres are spliced together.
• There can also be similar damage, or power outages at intermediate locations, where your local service provider connects to the Tier 1 optical network, and then to your home. The fibre has a core, cladding, and plastic protective coating and is held in a watertight protective enclosure, so the signal transmission is least affected by rain. The coating is removed while joining two fibres.
• At locations where fibres begin or end (known as ‘splice boxes’) there is a possibility of fibres being exposed to rain water, causing a reduction in signal strength . Additionally, water molecules may find a way via micro cracks in the fibres, eventually affecting the life of the fibre.

Cell phones in the rain

• When your cell phone is connected to the Internet, electromagnetic waves travel from your device through the air to a cell tower. You could think of this as a giant antenna.
• The electrons in this antenna bounce up and down. When they do this, they produce their own electromagnetic waves, which travel to a central location managed by your service provider.
• At this location, the waves get ‘processed’ in some way, and are sent either to the optical fibre network (the Internet) or another phone (phone call, text message, etc.).
• One important difference between the electromagnetic waves emitted from your phone and those from the laser that travels in the optical fibre is the wavelength. The radio waves emitted from, and received by your phone, are approximately a metre long. In contrast, the infrared waves that travel through the fibre network are approximately a millionth of a metre in length. Note that neither of these wavelengths affects the electrons in your eye, since they are not visible wavelengths (around 500 billionths of a metre long).
• Somehow, the message from your phone needs to be ‘translated’ from radio to infrared waves. If you were using Morse Code, you might imagine that the radio waves detected by your provider flash on and off, containing your message. The laser managed by your provider needs to be made to produce the same sequence of flashes that travel through the fibre network.
• The reasons for interruption in this communication chain during the monsoon are different compared to the optical fibre network.
• The radio waves travelling between your phone and the cell tower can make electrons in water drops wiggle, interrupting communication. The size and number of rain drops reduce the signal strength due to the scattering of the radio waves, while water vapour in the atmosphere absorbs the radio waves, converting them to heat (like in your microwave oven).
• Further, heavy monsoon rain, wind, and lightning can cause damage to cell towers, resulting in interruptions in the area they cover. Note that this is also why you find yourself without any signal in some areas – there is no cell tower nearby. But perhaps the most common cause of interruption is ‘jamming’. When too many people try to communicate through signal processing locations at the same time, some messages get lost.

5 . Privatization of select public sector banks

Context: Former RBI Governor Raghuram Rajan and Viral Acharaya have suggested certain reforms to the government like privatisation of select public sector banks, setting up of a bad bank to deal with NPAs and to dilute the Department of Financial Services’ role in a paper titled ‘Indian Banks: A Time to Reform?’

Need for the reforms

• The reforms are necessary to ensure growth of banking activity without the periodic boom-bust cycles.

Significance of the move

• Re-privatisation of select PSBs will help in bringing in private investors who have both financial expertise as well as technological expertise.

Arguments in favour Privatization of Public Sector Banks

• Privatising a few loss-making PSBs will ensure that market discipline forces them to rectify their strategy, and this will have a ripple effect on other PSBs.
• Private banks have higher productivity: Higher productivity in the banking sector is desirable because it speeds up the credit growth which leads to faster expansion of priority sector lending, which is an important social goal. Along with this it will also enhance the growth of the economy.
• Better governance: One of the major reasons why privatization is favoured is the need for better governance in PSBs. The 2014 PJ Nayak Committee noted that the board of most of the PSBs is compromised and lack the sense of purpose. The committee recommended reforms to instil responsibility in the board.
• Social goals can be achieved better: The fact that PSBs are required to meet the social goals is a myth. The private banks have satisfactorily met their targets and sometimes done even better in this respect, with the help of RBI regulations and directives. Thus it is important to weigh the social benefits of PSBs against the cost they impose on the investors repeatedly.
• Losing market share: The Public Sector banks have been losing market share because of their lower efficiency levels and lack of innovation, whereas the private sector banks are gaining. Thus the government should consider lowering its ownership and encouraging privatization.
• No benefit to common man: The evil of corruption is majorly evident in the PSBs. This is due to interference by politicians in the bank policy and the lazy staff. These factors contribute to negligence and banking crisis. Overall this leads to loss of trust among people and ultimately no benefit for the common man.
• Private sector banks have rigorous marketing: The private sector banks have succeeded due to their aggressive marketing strategies and have capital to spend, whereas public sectors banks are unable to attract customers.
• Many countries have privatised their nationalised banks, including some from the erstwhile Eastern bloc countries. Argentina, Australia, Brazil, Bulgaria, Chile, Denmark, Egypt, Finland, France, Hungary, Indonesia, Italy, Korea, Mexico, Norway, Poland, Peru, Spain, Sweden, Tanzania, Turkey, Venezuela and many more have privatised their banks over the years.

Arguments against Privatization of Public Sector Banks

• PSBs are required to serve in rural areas: In the rural areas only the public sector banks provide the services. The private sector banks concentrate on making in profits thus their reach is limited to metro/urban and semi-urban areas. It is very cumbersome to make banking services available in the underprivileged areas. Thus only the Public Sector banks can fulfill this as the social policy of the government.
• There are issues in every banking model: Irrespective of the kind of banking model there are always some issues. Even if it is a private sector bank the government will have to intervene to save the bank in case of default. Thus completely trusting private sector banks on account of no defaults is not the right option.
• People still have confidence in PSBs due to government ownership: Mr Rajnish Kumar, the chairman of State Bank of India told Economic Times in an interview that irrespective of the Nirav Modi case people haven’t withdrawn money from Punjab National Bank as they still have faith in the bank due to government ownership.
• Overhauling is the solution: If a government company is malfunctioning then overhaul is a better solution than privatization to improve governance and increase the efficiency of the board by equipping them with expertise to assess the pros and cons of a particular deal.
• Public Sector banks are essential for Government’s socio-economic agenda: Public Sector banks are meant for the upliftment of the society, this doesn’t mean that they should not generate profits. It should be noted that the PSBs are the cash generators of the government and provide continuous stream of income in form of dividends. Apart from this, every government scheme has the involvement of public sector banks. Thus rather than privatization the focus should be on independence of public sector banks.
• Not all Public Sector bankers should not be criticized: The unprecedented success of Jan Dhan Yojana is the best example for the same. No private sector bank came forward, only the public sector bankers did the extra work along with their regular jobs.

What are Bad Banks?

• A bad bank is a bank that is set up to buy the bad loans and other illiquid holdings of another financial institution. 
• The entity holding significant nonperforming assets will sell these holdings to the bad bank at market price. 
• By transferring such assets to the bad bank, the original institution may clear its balance sheet—although it will still be forced to take write-downs.
• A bad bank structure may also assume the risky assets of a group of financial institutions, instead of a single bank.
• Bad banks were also considered during the financial crisis of 2008 as a way to shore up private institutions with high levels of problematic assets.
• Critics of bad banks say that the option encourages banks to take undue risks, leading to moral hazard, knowing that poor decisions could lead to a bad bank bailout.

Dilution of Department of Financial Services

• According to the paper winding down of Department of Financial Services in the Ministry of Finance is essential, both as an affirmative signal of the intent to grant bank boards and management independence and as a commitment not to engage in “mission creep” when compulsions arise to use banks for serving costly social or political objectives. 

Department of Financial Services

• DDFS is a Department under the Ministry of Finance.
• The mandate of the Department of Financial Services covers the functioning of Banks, Financial Institutions, Insurance Companies and the National Pension System.
• The Department of Financial Services (DFS) oversees several key programs/initiatives and reforms of the Government concerning the Banking Sector, the Insurance Sector and the Pension Sector in India.
• Initiatives and reforms relating to Financial Inclusion, Social Security, and Insurance as a Risk Transfer mechanism; Credit Flow to the key sectors of the economy/ farmers/ common man are some of the key focus areas being dealt by the Department.
• The key flagship schemes being currently run/managed by the Department include the Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Mudra Yojana (PMMY), Atal Pension Yojana (APY), Pradhan Mantri Vaya Vandana Yojana (PMVVY) and the Stand Up India Scheme.
• The Department provides policy support to the Public Sector banks (PSBs), Public Sector Insurance Companies (PSICs) and Development Financial Institutions (DFIs) like National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI), India Infrastructure Finance Company Ltd. (IIFCL), National Housing Bank (NHB), Export-Import Bank of India (EXIM Bank), Industrial Finance Corporation of India (IFCI).
• It also monitors the performance of these PSBs, PSICs and DFIs and undertakes policy formulation in respect of the Banking and Insurance Sector in India.
• This Department deals with legislative and policy issues pertaining to the concerned regulatory bodies i.e. the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA). DFS also deals with the legislative framework relating to debt recovery.
• Matters relating to International Banking relations are also dealt by the Department.

6 . Basel Norms

What are Basel Norms?

• The BASEL norms are a set of common standards for banks across countries. 
• They were originally set in 1974. The most recent set of norms is the BASEL III, is likely to be implemented in India from 2019. This affects a lot of banks. 
• Basel a city in Switzerland is also the headquarters of Bureau of International Settlement (BIS), which fosters co-operation among central banks with a common goal of financial stability and common standards of banking regulations.
• Every two months BIS hosts a meeting of the governor and senior officials of central banks of member countries. Currently there are 27 member nations in the committee.
• Basel guidelines refer to broad supervisory standards formulated by this group of central banks – called the Basel Committee on Banking Supervision (BCBS).
• The set of agreement by the BCBS, which mainly focuses on risks to banks and the financial system are called Basel accord.
• The purpose of the accord is to ensure that financial institutions have enough capital on account to meet obligations and absorb unexpected losses.
• India has accepted Basel accords for the banking system. In fact, on a few parameters the RBI has prescribed stringent norms as compared to the norms prescribed by BCBS.
• Since being established, the BCBS has formulated the Basel I, Basel II, and Basel III accords.

Aim of BASEL norms

• The BASEL norms have three aims: Make the banking sector strong enough to withstand economic and financial stress; reduce risk in the system, and improve transparency in banks.

Basel I Norms

• In 1988, BCBS introduced capital measurement system called Basel capital accord, also called as Basel 1.
• It focused almost entirely on credit risk. It defined capital and structure of risk weights for banks.
• The minimum capital requirement was fixed at 8% of risk weighted assets (RWA). RWA means assets with different risk profiles.

Basel II Norms

• Basel II guidelines were published by BCBS, which were considered to be the refined and reformed versions of Basel I accord.
• The guidelines were based on three parameters, which the committee calls it as pillars. – Capital Adequacy Requirements: Banks should maintain a minimum capital adequacy requirement of 8% of risk assets –
• Supervisory Review: According to this, banks were needed to develop and use better risk management techniques in monitoring and managing all the three types of risks that a bank faces, viz. credit, market and operational risks –
• Market Discipline: This need increased disclosure requirements. Banks need to mandatorily disclose their CAR, risk exposure, etc to the central bank. Basel II norms in India and overseas are yet to be fully implemented.

Basel III Norms

• In 2010, Basel III guidelines were released. These guidelines were introduced in response to the financial crisis of 2008.
• A need was felt to further strengthen the system as banks in the developed economies were under-capitalized, over-leveraged and had a greater reliance on short-term funding.
• Also the quantity and quality of capital under Basel II were deemed insufficient to contain any further risk.
• Basel III norms aim at making most banking activities such as their trading book activities more capital-intensive.
• The guidelines aim to promote a more resilient banking system by focusing on four vital banking parameters viz. capital, leverage, funding and liquidity.

Key Principles of Basel III

1. Minimum Capital Requirements

• The Basel III accord raised the minimum capital requirements for banks from 2% in Basel II to 4.5% of common equity, as a percentage of the bank’s risk-weighted assets. 
• There is also an additional 2.5% buffer capital requirement that brings the total minimum requirement to 7%. 
• Banks can use the buffer when faced with financial stress, but doing so can lead to even more financial constraints when paying dividends.
• As of 2015, the Tier 1 capital requirement increased from 4% in Basel II to 6% in Basel III. The 6% includes 4.5% of Common Equity Tier 1 and an extra 1.5% of additional Tier 1 capital. 
• The requirements were to be implemented starting in 2013, but the implementation date has been postponed several times, and banks now have until January 1, 2022, to implement the changes.

2. Leverage Ratio

• Basel III introduced a non-risk-based leverage ratio to serve as a backstop to the risk-based capital requirements. Banks are required to hold a leverage ratio in excess of 3%. 
• The non-risk-based leverage ratio is calculated by dividing Tier 1 capital by the average total consolidated assets of a bank.
• To conform to the requirement, the Federal Reserve Bank of the United States fixed the leverage ratio at 5% for insured bank holding companies, and at 6% for Systematically Important Financial Institutions (SIFI).

3. Liquidity Requirements

• Basel III introduced the usage of two liquidity ratios – the Liquidity Coverage Ratio and the Net Stable Funding Ratio. 
• The Liquidity Coverage Ratio requires banks to hold sufficient highly liquid assets that can withstand a 30-day stressed funding scenario as specified by the supervisors. 
• The Liquidity Coverage Ratio mandate was introduced in 2015 at only 60% of its stated requirements and is expected to increase by 10% each year till 2019 when it takes full effect.
• On the other hand, the Net Stable Funding Ratio (NSFR) requires banks to maintain stable funding above the required amount of stable funding for a period of one year of extended stress. The NSFR was designed to address liquidity mismatches and will start becoming operational in 2018.

7 . Indian Institutes of Information Technology Laws (Amendment) Bill, 2020

Context: Indian Institutes of Information Technology Laws (Amendment) Bill, 2020 was passed by Rajya Sabha recently.

About the bill

• The Bill amends Indian Institutes of Information Technology Act, 2014 and the Indian Institutes of Information Technology (Public-Private Partnership) Act, 2017.
• The Bill seeks to declare five Indian Institutes of Information Technology (IIITs) set up under the Public Private Partnership mode in Surat, Bhopal, Bhagalpur, Agartala, and Raichur as institutions of national importance
• On being declared institutions of national importance, the five institutes will be granted the power to grant degrees .

Major Impact

• The Act will declare the remaining 5 IIITs-PPP along with the existing 15 Indian Institutes of Information Technology in Public Private Partnership modeas ‘Institutions of National Importance’ with powers to award degrees. This will entitle them to use the nomenclature of Bachelor of Technology (B.Tech) or Master of Technology (M.Tech) or Ph.D  degree as issued by a University or Institution of National Importance.  It will also enable the Institutes to attract enough students required to develop a strong research base in the country in the field of information technology.

Institute of National Importance

• Institute of National Importance (INI) is a status that is conferred on some of the best public higher education institutions in the country. 
• These are the institutions that serve as pivotal players in developing highly skilled personnel within the region of their country or state. 
• They work autonomously and are not under any state or central university. 
• They receive backing from the government of India to develop centers of excellence in research, academics, and other schools of education

8 . Recent Bills Passed by Rajya Sabha

Companies (Amendment) Bill 2020

• It seeks to amend the Companies Act, 2013. 
• The bill has added a new chapter on producer companies with similar provisions as the Companies Act, 2013.
• The provisions are on their membership, conduct of meetings, and maintenance of accounts.  
• Producer companies include companies which are engaged in the production, marketing and sale of agricultural produce, and sale of produce from cottage industries.

National Forensic Sciences University Bill, 2020

• The Bill seeks to establish the National Forensic Sciences University.
• The Bill establishes the Gujarat Forensic Sciences University, Gandhinagar (established under the Gujarat Forensic Sciences University Act, 2008) and the Lok Nayak Jayaprakash Narayan National Institute of Criminology and Forensic Sciences, New Delhi, as a University called the National Forensic Sciences University at Gujarat.  
• The Bill declares the University to be an institution of national importance. 

Rashtriya Raksha University Bill, 2020 

• The Bill seeks to provide for the establishment of the Rashtriya Raksha University. 
• The Bill establishes the Raksha Shakti University, Gujarat (established under the Raksha Shakti University Act, 2009) as a University called the Rashtriya Raksha University in Gujarat.  
• The Bill declares the University to be an institution of national importance.  
• The key objectives of the University include: (i) providing dynamic and high standards of learning and research, (ii) providing a working environment dedicated to advancing research, education and training in the domain of policing, and (iii) promoting and providing public safety. 
• The functions of the University include: (i) providing instructions and research in police sciences, including coastal policing and cyber security, (ii) establishing and maintaining colleges, and (iii) prescribing courses, holding exams, and granting degrees and other distinctions. 

9 . CRISPR TEST

Context: The Tata Group has unveiled India’s first CRISPR test.

About CRISPR test

• The Tata CRISPR test has been developed by CSIR-IGIB ‘Feluda’ (Council of Scientific and Industrial Research-Institute of Genomics and Integrative Biology) and ICMR.
• It has received regulatory approvals from the Drug Controller General of India (DCGI) for commercial roll-out in accordance with the Indian Council of Medical Research (ICMR) guidelines.
• The test has met high benchmarks, with 96% sensitivity and 98% specificity for detecting the novel coronavirus. 
• It uses indigenously developed CRISPR technology for the detection of the genomic sequence of the SARS-CoV-2 virus.
• The Tata CRISPR test is the world’s first diagnostic test to deploy a specially adapted Cas9 protein to successfully detect the virus causing COVID-19. 
• The Tata CRISPR test achieves the accuracy levels of the traditional RT-PCR (real-time polymerase chain reaction) tests, with quicker turnaround time, less expensive equipment, and better ease of use.

Benefits 

• It is a high-quality test that will help India ramp up COVID-19 testing quickly and economically, with a ‘Made in India’ product that is safe, reliable, affordable, and accessible.
• It has high sensitivity and specificity for detecting the novel coronavirus. 
• It achieves the accuracy levels of the traditional RT-PCR (real-time polymerase chain reaction) tests, with quicker turnaround time, less expensive equipment, and better ease of use.

About CRISPR CaS 9

• Unusual but repeated DNA structures that scientists had been observing were given a name — Clustered regularly interspaced short palindromic repeats or CRISPR.
• In 2012, scientists discovered that CRISPR is a key part of the “immune system”. For instance, when a virus enters a bacterium, it fights back by cutting up the virus’s DNA. This kills the virus but the bacterium store some of the DNA.
• The next time there is an invasion, the bacterium produce an enzyme called Cas9 which matches the stored fingerprints with that of the invader’s. If it matches, Cas9 can snip the invading DNA.
• The CRISPR-Cas9 gene editing tool thus has two components — a short RNA sequence that can bind to a specific target of the DNA and the Cas9 enzyme which acts like a molecular scissor to cut the DNA.
• To edit a gene of interest, the short RNA sequence that perfectly matches with the DNA sequence that has to be edited is introduced.
• Once it binds to the DNA, the Cas9 enzyme cuts the DNA at the targeted location where the RNA sequence is bound.
• Once the DNA is cut, the natural DNA repair mechanism is utilised to add or remove genetic material or make changes to the DNA.

10 . Environment Pollution (Prevention and Control) Authority

Context: The Supreme Court appointed Environment Pollution (Prevention and Control) Authority has written to the chief secretaries of Punjab and Haryana stating that early burning of crop residue was taking place and urged them to address the issue “urgently”. 

About the News

• EPCA has stated that according to a SAFAR (System of Air Quality and Weather Forecasting and Research under the Central government) estimate, based on harmonising the INSAT-3, 3D and NASA satellite, the fire counts were around 42 on September 21, 2020. The fire counts were around 20 on September 20 and nil on September 15.
• It has been requested to set up a control room in which directions can be issued and action taken, both for ensuring that the machineries are within the reach of the farmers as well as ensuring enforcement of the non-compliance that is reported from the field.

Background

• EPCA has been monitoring progress with Punjab and Haryana on the implementation of the different measures in the past two months and has also worked out the clear benchmarks and targets that need to be achieved before the coming season. 
• The problem of stubble burning is that it directly contribute to environmental pollution, and are also responsible for the haze in Delhi and melting of Himalayan glaciers and so the EPCA has been monitoring the progress.

About Environment Pollution (Prevention and Control) Authority (EPCA)

• The EPCA a statutory body was constituted under the provisions of the Environment (Protection) Act, 1986.
• The EPCA was constituted with the objective of ‘protecting and improving’ the quality of the environment and ‘controlling environmental pollution’ in the National Capital Region. 
• The EPCA also assists the apex court in various environment-related matters in the region.

Composition

• EPCA is headed by the chairman.
• Besides the chairman, the EPCA has 14 members, some of whom are the environment secretary of the National Capital Territory of Delhi (NCT), chairperson of the New Delhi Municipal Council, transport commissioner of the NCT, the commissioners of various municipal corporations of Delhi and professors at IIT Delhi and Jawaharlal Nehru University.

Functions

• To protect and improve quality of environment and prevent and control environmental pollution in National Capital Region.
• The EPCA is empowered to take suo motu action as well as on the basis of complaints made by any individual, representative body or organisation functioning in the environmental issues sector. 
• One of the EPCA’s important powers is the redressal of grievances through complaints. 

Powers

What is Stubble Burning?

• Stubble (parali) burning is intentionally setting fire to the straw stubble that remains after grains, like paddy, wheat, etc., have been harvested.

More on Stubble Burning

11 . Multi-stakeholder body (MSB)

Context: The Telecom Regulatory Authority of India has recommended the creation of a multi-stakeholder body (MSB).

About TRAI Recommendation

• MSB is an entity that will ensure that Internet access providers adhere to the provisions of net neutrality.
• The MSB will include telecom service providers, Internet service providers, content providers, researchers, academic and technical community, civil society organisations, and the government, that could be set up as a non-profit entity.
• The role of the MSB shall be to provide advice and support to DoT in the monitoring and enforcement of net neutrality principles.
• The MSB may also be required to investigate complaints regarding the violation of net neutrality.
• The MSB will help DoT in maintenance of a repository of reasonable traffic management practices.
• It will also recommend technical standards on matters on best practices to be adopted for TMPs.

Need for creating MSB

• Globally, there have been widespread concerns on the potential for discriminatory treatment of online traffic by the entities that control access to the internet.
• These concerns regarding non-discriminatory access have become the centre of a global policy debate, often referred to as the debate on ‘net neutrality’.
• Trai had earlier barred platforms like Facebook’s Internet.Org and Airtel Zero which allowed free access to select websites, to check ‘gate-keeping’ in cyberspace.

What is Net Neutrality?

• Network neutrality, most commonly called net neutrality, is the principle that Internet service providers (ISPs) must treat all Internet communications equally, and not discriminate or charge differently based on user, content, website, platform, application, type of equipment, source address, destination address, or  method of communication

12. Public Health Act

Context: Union Health Minister Harsh Vardhan has stated that a Public Health Act is in the works for the past four years to address any “biological emergency”. The Rajya Sabha also has passed The Epidemic Diseases (Amendment) Bill, 2020.

The Epidemic Diseases (Amendment) Bill, 2020

• The Epidemic Diseases (Amendment) Bill, 2020 replaces an ordinance passed in April. The parent Act was envisaged in 1897 by the British.
• It provides for up to seven years in jail for those attacking doctors and healthcare workers fighting the COVID-19 outbreak or during any situation akin to it. 
• It has also fixed a 30-day limit for police investigations and a one-year limit for the courts to complete the proceedings, failing which the judge will have to give an explanation.

Public Health Act

• It is an act for the promotion and preservation of the health of the inhabitantas of a country and for the matters incidental thereto.
• The government is aggressively pursuing the National Public Health Act with the State.
• It will address any biological emergency.

13 . Facts for Prelims

Cyanobacteria

• According to recent investigations toxins in water produced by cyanobacteria has killed more than 300 elephants in Botswana this year.
• Cyanobacteria are microscopic organisms common in water and sometimes found in soil. 
• Not all produce toxins but scientists say toxic ones are occurring more frequently as climate change drives up global temperatures.
• Some cyanobacterial blooms can harm people and animals.
• Studies are being conducted on the potential impact of cyanobacteria as climate change leads to warmer water temperatures, which many cyanobacteria prefer.

Essential Commodities (Amendment) Bill, 2020

• Essential Commodities (Amendment) Bill, 2020, removes cereal, pulses, oilseed, edible oil, onion and potatoes from the list of essential commodities.