Daily Current Affairs : 7th and 8th August 2020

Daily Current Affairs for UPSC CSE

Topics Covered

  1. Debt Restructuring
  2. Priority Sector Lending
  3. Office of Lieutenant Governor
  4. RBI Bi-Monthly Policy
  5. Table top Runways
  6. Blackbox
  7. Facts for Prelims

1 . Debt Restructuring

Context : Reserve Bank of India (RBI) has extended the one- time debt restructuring for small businesses.

About the news

  • In view of the continued need to support viable MSME entities on account of the fallout of COVID-19, the Reserve Bank of India (RBI) has extended the one-time debt restructuring for small businesses by another three months to March 2021.

What is Debt Restructuring?

  • Debt restructuring is a process used by companies facing cash flow problems or financial distress to avoid the risk of default.
  • It can be carried out by reducing the interest rates on loans or by extending the payment term.
  • It can also include a debt for equity swap which means that company’s creditors may agree to cancel some or all of the debt in exchange for equity in the company
  • It can also involve a bond haircut where the company may negotiate to write off certain portion of interest or capital.
  • Restructuring debt can be a win-win for both entities as the company avoids bankruptcy and the lenders typically receive more than what they would through a bankruptcy proceeding.

Significance of the move

  • The restructuring will enable borrowers to reschedule their loan payment, or get a limited loan repayment holiday, or lower interest rates on their existing loans depending on the agreement they reach with their bank(s).

Other relaxations provided

  • RBI has also relaxed some existing provisions for availing of this scheme by micro, small and medium enterprises (MSMEs).

2 . Priority sector lending

Context : Start-ups have been included in the scope of priority sector lending.

About the news

  • The Reserve Bank of India (RBI) has decided to broaden the scope of priority sector lending (PSL) by including start-ups and enhancing borrowing limits for renewable energy sectors.
  • RBI has also decided to increase the targets for lending to ‘small and marginal farmers’ and ‘weaker sections’ under the PSL.

Priority Sector Lending

  • Under PSL guidelines, banks have to set aside a specific portion of bank lending to sectors deemed important by the central bank.
  • The PSL status was till now reserved for sectors such as micro, small and medium enterprises (MSMEs), agriculture, education and housing.
  • All scheduled commercial banks and foreign banks with a sizeable presence in India are mandated to set aside 40% of their Adjusted Net Bank Credit (ANDC) for lending to these sectors.

Priority Sector categories

  • Agriculture
  • Micro, Small and Medium Enterprises
  • Export Credit
  • Education
  • Housing
  • Social Infrastructure
  • Renewable Energy
  • Others

Current state of startups amid COVID-19

  • According to a Ficci survey, 70% of start-ups stated that their businesses have been impacted by covid-19, while 12% of the start-ups have shut operations and 60% are operating with disruptions.

Benefits of inclusion of startups in priority sector lending

  • Startups have relied on expensive venture debt and this move will help startups free up their equity and raise low cost debt.
  • This move will enhance the liquidity options available to startups
  • This move will help the startups in their path of recovery which has been affected due to the COVID-19.
  • The inclusion of startups to PSL will go a long way and improve the segment’s operational efficiency

3 . Office of Lieutenant Governor & CAG

Context : GC Murmu has resigned as the Lieutenant Governor of Jammu and Kashmir and has been appointed as the country’s new CAG. Manoj Sinha has been appointed as the new Lieutenant Governor of Jammu and Kashmir.

Office of the LG

  • Lieutenant governor is the constitutional head of the union territories in India.
  • The lieutenant governor is appointed by the President of India for a term of five years, and holds office at the President’s pleasure.
  • The powers of the Lieutenant Governor of a union-territory are equivalent to the powers of a Governor of a state in India.
  • Since the union territories of Delhi, Jammu and Kashmir and Puducherry have a measure of self-government with an elected legislature and council of ministers, the role of the lieutenant governor there is mostly a ceremonial one, akin to that of a state’s governor.
  • In Andaman and Nicobar Islands and Ladakh however, the lieutenant governor holds more power, being both the head of state and head of government.
  • The other three union territories—Chandigarh; Dadra and Nagar Haveli and Daman and Diu; and Lakshadweep—are governed by an administrator.


  • In a democracy, those holding power and positions of responsibility must be answerable for their actions.For this purpose the Constitution has mandated several institutional    mechanisms like the Judiciary, Vigilance bodies and an independent Supreme Audit Institution (SAI).
  • The Comptroller and Auditor General of India (CAG) and the Indian Audit and Accounts Department (IAAD) functioning under him, constitute the Supreme Audit Institution of India.
  • The Constitution of India has mandated CAG as the auditors to the nation. Articles 149-151 of the Constitution prescribe the unique role of the CAG.

Independence of CAG

The Constitution enables the independent and unbiased nature of audit by the CAG by providing for:

  • Appointment by the President of India 
  • Special procedure for removal (like a Supreme Court Judge) 
  • Salary and expenses Charged (not Voted) to the Consolidated Fund of India 
  • Disallowing his holding any other Government office after his term expires


As envisaged in Article 149 of the Constitution, the Parliament enacted a detailed legislation called the CAG’s Duties, Powers and Conditions Act in 1971 which describes his mandate and puts almost every spending, revenue collecting or aid/grant receiving unit of the Government (the Centre and the States) under his audit domain. His duties are to audit and report upon:

  • All receipts into and spending from the Consolidated Fund of the Union and State Governments. 
  • All transactions relating to the Contingency Funds and relating to the monies of the public held by the Government e.g. Postal savings, Vikas Patras (called Public Accounts) at Central as well as State levels.
  • All trading, manufacturing, profit and loss accounts, balance sheets and other subsidiary accounts kept in any Government department. 
  • All stores and stock accounts of all Government offices and departments. 
  • Accounts of all Government companies and Corporations
  • Accounts of all autonomous bodies and authorities receiving Government money e.g. municipal bodies, IIM’s, IIT’s, State Health societies. 
  • Accounts of any body or authority on request of the President/Governor or on his own initiative.
  • The Act also provides for compilation of accounts of the State Governments from the subsidiary accounts maintained by the State Governments.


  • Power to inspect any office or organisation subject to his audit.
  • Power to examine all transactions and question the executive.
  • Power to call for any records, papers, documents from any audited entity.
  • Power to decide the extent and manner of audit.

Who all comes under CAG Audit

  • All the Union and State Government departments including the Indian Railways,Defence and Posts and Telecommunications. 
  • About 1500 public commercial enterprises controlled by the Union and State governments, i.e. government companies and corporations. 
  • Around 400 non-commercial autonomous bodies and authorities owned or controlled by the Union or the States. 
  • Bodies and authorities substantially financed from Union some of the local bodies and Panchayati Raj  Institutions which are critical grass root agencies for implementation of developmental programmes and delivery of services.

Audit Reports

  • The reports of the Comptroller and Auditor-General of India relating to the accounts of the Union shall be submitted to the president, who shall cause them to be laid before each House of Parliament.
  • The reports of the Comptroller and Auditor-General of India relating to the accounts of a State shall be submitted to the Governor of the State, who shall cause them to be laid before the Legislature of the State.

Types of audits

  • Performance audits
  • Financial Audits
  • Compliance Audits
  • Audit of transactions
  • CCO based audits
  • District audit
  • Thematic audit
  • IT audit

4 . RBI Bi-Monthly Policy

Context: The Reserve Bank of India kept interest rates on hold, seeking to contain a rise in retail inflation even as growth remains a concern.


  • The RBI has slashed policy rates by 115 basis points since February this year, and pumped close to Rs 10 lakh crore liquidity into the financial system.
  • In its bi-monthly monetary policy review, it has also given the green signal to a loan restructuring scheme to bail out stressed borrowers.

Why did the Monetary Policy Committee not slash interest rates?

  • Due to uncertainty surrounding the inflation outlook and the weak state of the economy amid the pandemic, the policy panel has decided to keep the policy rate on hold, while remaining watchful for a durable reduction in inflation to use the available space to support a revival of the economy.

Why is RBI worried about inflation?

  • The headline retail inflation prints of April-May 2020 require more clarity.
  • The inflation objective is further obscured by the spike in food prices because of floods in eastern India, lockdown-related disruptions and cost-push pressures in the form of high taxes on petroleum products, hikes in telecom charges, and rising raw material costs reflected in rise in steel prices and gold prices on safe haven demand
  • There are supply chain disruptions on account of Covid-19 which persists, with implications for both food and non-food prices.
  • Protein-based food items could also emerge as a pressure point, given the tight demand-supply balance in the case of pulses.

What is the RBI assessment of the economy?

  • According to RBI the economic activity had started to recover from the lows of April-May following the uneven reopening of some parts of the country in June.
  • However, fresh Covid-19 infections have forced renewed lockdowns in several cities and states, and several high-frequency indicators have levelled off.
  • The RBI has states that the recovery in the rural economy is expected to be robust, buoyed by the progress in kharif sowing.

5 . Table top Runways

Context : A Boeing 737 of Air India Express (the low cost subsidiary of national carrier Air India) on a special ‘Vande Bharat’ repatriation flight from Dubai to Kozhikode overshot the runway. There were ‘174 passengers, 10 infants, 2 pilots and 4 cabin crew on board’. In what was its second attempt, flight IX-1344 touched down on runway 10 of Calicut International Airport at 7.40 p.m., went past the runway end and safety area, and fell into a valley. The fuselage split in the impact. Both pilots lost their lives; there were casualties and injuries of varying degrees among passengers. There was no fire on board. The Digital Flight Data Recorder and Cockpit Voice Recorder have been recovered. The accident has once again turned the spotlight on operations to what are called ‘tabletop airports’ in India.

What is a ‘tabletop airport’ and how many are there in India?

  • As the name suggests, it is an airport located and built on top of a plateau or hilly surface, with one or both ends of the runway overlooking a drop.
  • The airports in the country which would count as “tabletops”, are namely Lengpui (Mizoram), Shimla and Kullu (Himachal Pradesh), Pakyong (Sikkim), Mangaluru (Karnataka), Kozhikode and Kannur (both Kerala).
  • A retired aviation official says there is no such term as a ‘tabletop airport’ in any International Civil Aviation Organisation (ICAO) technical document. But India’s statutory aviation body, the Directorate General of Civil Aviation (DGCA), refers to these airports in this manner by way of highlighting safety measures during operations to these runways. The official adds that there are not many differences between a ‘normal’ airport and a ‘tabletop’ airport.

Why are these airports drawing attention now?

  • While there have been some aviation incidents at these airports, it was the accident in Mangaluru on May 22, 2010, that highlighted operational risks. Here, an Air India Express flight again, from Dubai to Mangaluru, overran the runway while landing on runway 24. Flight IX-812 hit an antenna and then went down a steep embankment after which there was a fire. Of the 160 passengers and 6 crew, 158 lost their lives. The case focused attention on the nature of operations to such airports, especially their shorter runways.
  • Kozhikode has two runways of 2,700 metres in length. It was 2,860 metres but ‘shortened’ to accommodate a safety feature called RESA, or Runway End Safety Area (of 240 metres), which is a means “to limit the consequences when there is an aircraft overrun during landing, a rejected take-off, or even undershoots the landing area”.
  • In “tabletop” airport operations, the ICAO says a RESA of 90 metres is mandatory, while 240 metres is recommendatory. The runways are Instrument Landing System (ILS) CAT 1 enabled and the airport has a range of visual aids which include simple approach lighting. In addition, all obstacles are lit. Both runways have Required Navigation Performance approach.

What were the recommendations made after the Mangaluru crash?

  • In its report on the crash, the court of Air Marshal B.N. Gokhale, former Vice-Chief of Air Staff, Indian Air Force (and its team of aviation expert assessors) made a series of recommendations in a 191-page document of October 2010. These were addressed to the airline operator (Air India and Air India Express).
  • To the Airports Authority of India, it pointed out issues like “avoidance of the downward slope in the overshoot area particularly on ‘tabletop’ runways; the need for a ground arresting system for aircraft — such a facility is maintained at almost all airfields of the Indian Air Force’; a visual reference system to alert the pilot (while landing) of the remaining distance to be covered; location of the ATC tower, approach and area radars; the role of the Rescue and Fire Fighting service, aerodrome risk assessment and, finally, recommendations for the DGCA.

Is there any ICAO document on operations?

  • ICAO document 9981 for airports, which also serves as a guideline for compatibility study of the operation of larger aircraft in a comparatively smaller aerodrome.
  • The issue of growth versus aviation services is a worldwide issue requiring the development of small aerodromes for the use of bigger aircraft in a safe manner, especially as demand for air services grows from existing airports.
  • In this document, the elements to be assessed include aerodrome infrastructure and its ground handling capabilities, and aeroplane characteristics. Each element is assessed technically to see whether these are compatible for new types of aircraft proposed to be operated in such aerodromes.
  • Thereafter, a proper safety assessment is done to assess the risk associated with the operation of higher category of aircraft. Risk mitigation measures are suggested in order to bring those risks within “tolerable limits”.
  • Such a compatibility study and safety assessment report will be scrutinised by the regulatory aviation authorities and if found satisfactory, the no objection certificate for operation of such higher category aircraft is issued.

Could safety measures be better in terms of the ground infrastructure?

  • While RESA is in vogue, the term EMAS has been tossed up, which is mandatory at all international airports in the United States. Called Engineered Materials Arrestor/Arresting System, it is made of engineered lightweight and crushable cellular cement/concrete.
  • Used at the runway ends, it acts as a safety barrier and successfully stops an aircraft overrun. Its retarding effect increases as one moves away from the runway edge. In demonstrations in the West, it ensured good aircraft safety. It must be noted that these are laid in easily replaceable blocks in the overrun area. The material is engineered specifically for the airport it is to be used in, says the retired official. It is said to be ideal for use in ‘tabletop’ airports. About 75m of EMAS can serve the purpose of 240m of RESA without causing any damage to the aircraft.

What is the role of the air traffic control?

  • The ATC only has jurisdiction to provide the pilots with weather conditions including visibility, rain and winds. The minimum visibility is already prescribed, says the senior commander.
  • The ATC will not give clearance to commence approach if visibility is below this minima, but if the visibility meets the requirements then the ATC cannot stop the pilot.
  • The pilot commences approach when visibility is within minima and descends towards the runway to land.
  • At a point called Decision Height, or DH (normally around 200 ft) in case of ILS, and at a point called Minimum Descent Altitude, or MDA, in case of a non precision approach, the pilot must be aware of the runway environment in order to make a safe landing. If he has not, then he has to initiate a go around, circle and return for another attempt at landing.
  • Many a time, the runway cannot be seen even when reported visibility conditions meet the requirements as the conditions measurable on ground by the meteorological department are not the same as the instantaneous condition on the approach path. Only a pilot can observe this.
  • If the declared visibility meets the prescribed minima, there is nothing wrong in the pilot attempting an approach. But trying to come in below DH and MDA, if the runway is still not visible is illegal, says the senior commander. No pilot does that, he adds.

6 . Blackbox

Context : In a significant development towards ascertaining the reasons behind the Air India Express crash at Kozhikode on Friday evening, investigators have found the “black boxes” of the ill-fated Boeing 737-800 aircraft. These boxes will help investigators weave together the crucial events that led to the crash, which killed at least 18 people on board, including both pilots.

What are black boxes?

  • The black boxes, which are actually two orange metallic boxes containing the recorders, date back to the early 1950s, when, following plane crashes, investigators were unable to arrive a conclusive cause for the accidents and deemed it necessary to install the said recorders on aircraft. In the initial days of the black box, the information was recorded on to a metal strip, which was then upgraded to magnetic drives succeeded by solid state memory chips

Why are black boxes important to an air crash investigation?

  • Most aircraft are required to be equipped with two black boxes — the cockpit voice recorder (CVR) and the flight data recorder (FDR) — that record the information about a flight and help reconstruct the events leading to an aircraft accident.
  • While the CVR records radio transmissions and other sounds in the cockpit such as conversations between the pilots and engine noises, the flight data recorder records more than 80 different types of information such as altitude, airspeed, flight heading, vertical acceleration, pitch, roll, autopilot status etc.

How do the black boxes survive the crash?

  • The recording devices are stored inside a unit that is generally made out of strong substances such as steel or titanium and are also insulated from factors such as extreme heat, cold or wetness. To protect these black boxes, they are equipped towards the tail end of the aircraft – where usually the impact of a crash is the least.
  • There have been cases where planes have crashed into water bodies. To make black boxes discoverable in situations where they are under water, they are equipped with a beacon that sends out ultrasound signals for 30 days. However, in certain cases – like the Malaysian Airlines MH370 flight – the recorders aren’t found despite all the redundancies.

How soon will the analysis from the black boxes be available?

  • It usually takes at least 10-15 days to analyse the data recovered from the black boxes. Meanwhile the investigators will be looking for other clues such as taking accounts from air traffic control personnel and recordings of the conversation between ATC and the pilots moments before the crash. This will help the investigation team understand if pilots were aware that they were in a situation that was headed to such an eventuality and if so, whether they had reported any problems regarding controlling the aircraft.
  • Additionally, the investigators will also be looking at various data recorders at the airport, which would tell them about the precise point of touchdown on the runway and the speed at which the aircraft touched down

7 . Facts for Prelims

Kavkaz 2020

  • India will take part in the Russian Kavkaz 2020 strategic command-post exercise next month. The invitees for the exercise also include China and Pakistan apart from other member-states of the Shanghai Cooperation Organisation (SCO).
  • A small tri-service contingent will take part in the exercise to be held in Astrakhan in southern Russia

 Positive Pay & Online dispute resolution (ODR) systems 

  • Positive Pay : To reduce instances of fraud occurring on account of tampering of cheque leaves, the RBI has decided to introduce a mechanism of Positive Pay for all cheques of value ₹50,000 and above. Under this mehcanism, cheques will be processed for payment by the drawee bank based on information passed on by the issuer at the time of issuance of the cheque, according to the central bank.
  • Online dispute resolution (ODR) systems :RBI has decided on an Online Dispute Resolution (ODR) mechanism for digital payments as the number of digital transactions are rising significantly giving rise to more disputes. Accordingly, the Reserve Bank shall require payment system operators (PSOs) to introduce online dispute resolution (ODR) systems in a phased manner.

Permissible loan to value ratio (LTV) for loans against pledge of gold ornaments and jewellery

  • RBI has been decided to increase the permissible loan to value ratio (LTV) for loans against pledge of gold ornaments and jewellery for non-agricultural purposes to 90%.
  • Under the current guidelines, loans sanctioned by banks against pledge of gold ornaments and jewellery should not exceed 75% of the value of gold ornaments and jewellery which has now increased to 90%
  • “This enhanced LTV ratio will be applicable up to March 31, 2021 to enable the borrowers to tide over their temporary liquidity mismatches on account of COVID 19


  • Housing lines of tea garden workers

Food Vision 2050 Prize

  • Rockefeller Foundation has selected Naandi Foundation, Hyderabad-based non-profit, as one of the ‘Top 10 Visionaries’ in the world for the Food Vision 2050 Prize, announced in New York on August 6. The recognition fetches Naandi a prize money of $200,000.
  • The award recognised the application of Arakunomics model in regions of Araku, Wardha and New Delhi, leading to the Food Vision 2050 that follows an “ABCDEFGH” framework centring on: Agriculture, Biology, Compost, Decentralised decision-making, Entrepreneurs, Families, Global Markets, and ‘Headstands’, or turning current approaches on their head.
  •  Naandi’s vision titled “Arakunomics” was based on work with tribal farmers in Araku for nearly 20 years. It is a new integrated economic model that ensures profits for farmers, quality for consumers through regenerative agriculture. The economic model is a tribute to the tribal farmers of Araku region for the world class coffee produced and launched in Paris in 2017, as well as for the high carbon landscape transformation they did in over 955 villages, thereby planting 25 million trees.
  • Arakunomics success in Araku led to Naandi replicating the model to support the livelihoods of farming communities in the villages of Wardha – infamous for agrarian distress, as well as later in New Delhi, as part of an Urban Farms Co programme.

KV Kamath Committee

  • The Reserve Bank of India (RBI) constituted the proposed expert committee under the chairmanship of veteran banker K.V. Kamath to make recommendations on norms for the resolution of COVID-19 related stressed loans.
  • The committee will submit its recommendations on the financial parameters to the RBI, which in turn, will notify the same along with modifications, if any, in 30 days.
  • The Indian Banks’ Association (IBA) will function as the secretariat to the committee and the committee will be fully empowered to consult or invite any person it deems fit.

Leave a comment

error: Content is protected !! Copying and sharing on Social media / websites will invite legal action