Daily Current Affairs : 8th June

Daily Current Affairs for UPSC CSE

Topics Covered

1. International Space Station
2. Revised Guidelines Regarding Stressed Assets
3. Leader of Opposition
4. Collegium System
5. Foreign Contribution Regulation Act

1 . International Space Station

Context : U.S. space agency NASA said on Friday that it would open up the International Space Station to business ventures including space tourism — with stays priced at $35,000 a night — as it seeks to financially disengage from the orbiting research lab.

About the News

• There will be up to two short private astronaut missions per year
• The missions will be for stays of up to 30 days. As many as a dozen private astronauts could visit the ISS per year, NASA
• These travellers would be ferried to the orbiter exclusively by the two companies currently developing transport vehicles for NASA: SpaceX, with its Crew Dragon capsule, and Boeing, which is building one called Starliner. These companies would choose the clients and bill for the trip to the ISS, which will be the most expensive part of the adventure: around $58 million for a round trip ticket.
• The tourists will have to pay NASA for their stay in space, for food, water and use of the life support system on the orbiter. That will run about $35,000 per night per astronaut

What is International Space Station

• The International Space Station is a large spacecraft. It orbits around Earth. It is a home where astronauts live.
• The space station is also a science lab. Many countries worked together to build it. They also work together to use it.
• The space station is made of many pieces. The pieces were put together in space by astronauts. The space station’s orbit is approximately 250 miles above Earth. NASA uses the station to learn about living and working in space. These lessons will help NASA explore space.

How Old Is the Space Station?

• The first piece of the International Space Station was launched in 1998. A Russian rocket launched that piece. After that, more pieces were added. Two years later, the station was ready for people.
• The first crew arrived on November 2, 2000. People have lived on the space station ever since. Over time more pieces have been added. NASA and its partners around the world finished the space station in 2011.

How Big Is the Space Station?

• The space station is as big inside as a house with five bedrooms. It has two bathrooms, a gymnasium and a big bay window. Six people are able to live there. It weighs almost a million pounds. It is big enough to cover a football field including the end zones. It has science labs from the United States, Russia, Japan and Europe.

What Are the Parts of the Space Station?

• The space station has many parts. The parts are called modules. The first modules had parts needed to make the space station work. Astronauts also lived in those modules. Modules called “nodes” connect parts of the station to each other. Labs on the space station let astronauts do research.
• On the sides of the space station are solar arrays. These arrays collect energy from the sun. They turn sunlight into electricity. Robot arms are attached outside. The robot arms helped to build the space station. They also can move astronauts around outside and control science experiments.Airlocks on the space station are like doors. Astronauts use them to go outside on spacewalks.
• Docking ports are like doors, too. The ports allow visiting spacecraft to connect to the space station. New crews and visitors enter the station through the docking ports. Astronauts fly to the space station on the Russian Soyuz. The crew members use the ports to move supplies onto the station.

Why Is the Space Station Important?

• The space station is a home in orbit. People have lived in space every day since the year 2000. The space station’s labs are where crew members do research. This research could not be done on Earth.
• Scientists study what happens to people when they live in space. NASA has learned how to keep a spacecraft working for a long time. These lessons will be important in the future.
• NASA has a plan to send humans deeper into space than ever before. The space station is one of the first steps. NASA will use lessons from the space station to get astronauts ready for the journey ahead

2 . Revised Guidelines Regarding Stressed Assets

Context : The Reserve Bank of India (RBI) on Friday issued a new framework for resolution of bad loans, replacing the previous norms quashed by the Supreme Court in April, offering a 30-day gap for stress recognition instead of the one-day default earlier.

Background

• The apex court on April 2 struck down the stringent RBI circular, issued on February 12, 2018, for resolving bad loans under which a company could be labelled an Non-performing asset (NPA) if it missed repayment for a day banks were asked to find a resolution within 180 days or else it should be sent to bankruptcy courts.
• The February circular had mandated lenders to start resolution even if there was a one-day default. The new circular has also relaxed several other provisions, including norms related to consent of lenders and offers more freedom to lenders in implementing the asset resolution plan.
• Detailed Background of the issue is provided under Daily Current Affairs of April 3

About the Revised Guidelines

• The RBI’s revised circular states that lenders should initiate the process of implementing a resolution plan (RP) even before a default. In any case, once a borrower is reported to be in default by any of the lenders, they should undertake a prima facie review of the borrower account within 30 days from such default.
• During this review period of 30 days, lenders may decide on the resolution strategy, including the nature of the RP and the approach for implementation of the RP. The lenders may also choose to initiate legal proceedings for insolvency or recovery
• All lenders must put in place board-approved policies for resolution of stressed assets, including the timelines for resolution. Lenders should recognise incipient stress in loan accounts, immediately on default, by classifying such assets as special mention accounts (SMA). Accordingly, the SMA-0 list will have companies, which are in default for 1-30 days, SMA-1 for 31-60 days and SMA-2 for 61-90 days.
• The inter-creditor agreement (ICA) signed by lending banks should provide that any decision agreed by lenders representing 75 per cent by value of total outstanding credit facilities and 60 per cent of lenders by number should be binding upon all lenders. Resolutions plans should provide for payment not less than the liquidation value due to the dissenting lenders
• The new circular has proposed a system of disincentives in the form of additional provisioning for delay in implementation of resolution plan or initiation of insolvency proceedings.
• Additional provisions will have to be made by the banks as percentage of total outstanding if RP not implemented within the timeline. There will be 20% provisions if the resolution is not implemented in 180 days from the end of the review period. Banks will have to make another 15 per cent provision 15 per cent (total additional provisioning of 35 per cent) if the resolution is not done in 365 days.
• Banks are required to implement resolution plans for defaulted loans within 180 days from the end of the review period. 

3 . Leader of Opposition

Context : The denial of Leader of Opposition status to the Congress in the Lok Sabha on the ground that it does not have 10 per cent of the total strength of the House will be “illegal” and “contrary to law” and the party, if it wants, can challenge the decision in a court of law

About the status of LoP

• GV Mavlankar First Loksabha Speaker had said that the main opposition party’s strength must be equal to the quorum which is 10% of the total strength. As per Mavlankar’s rle any party needs to have atleast 10% of the total seats for its leader to claim the status of LoP
• Hence to claim the status of “official opposition” in either house a party has to secure 55 seats (10%) of the seats in the Lok Sabha and likewise 25 (10%) of the seats in the Rajya Sabha.
• It received statutory recognition through the Salary and Allowances of Leaders of Opposition in Parliament Act, 1977 which defines the term “Leader of the Opposition” as that member of the Lok Sabha or the Rajya Sabha who, for the time being, is the Leader of that House of the Party in Opposition to the Government having the greatest numerical strength and recognised, as such, by the Chairman of the Rajya Sabha or the Speaker of the Lok Sabha
• First time LoP in Loksabha was recognized in 1969 (Fourth Loksabha) – Ram Subhag Singh
• Committees which require LoP for appointment : CVC, CIC, NHRC, Lokpal

4 . Collegium System

Context : The government on Friday appointed Justice Ravi Shanker Jha as the Acting Chief Justice of the Madhya Pradesh High Court even as there is no word from the Centre on a May 10 Supreme Court Collegium recommendation to appoint Justice A.A. Kureshi as the Chief Justice of the High Court.

Appointment of Acting Chief Justice

• Appointment of acting Chief Justice is to be made by the President under Article 126 of the Constitution.
• Vacancy in the office of the Chief Justice must be filled whatever the period of vacancy. In such an eventuality, the seniormost available Judge of the Supreme Court will be appointed to perform the duties of the office of the Chief Justice of India.
• As soon as the President has approved the appointment, the Secretary to the Government of India in the Department of Justice will inform the Chief Justice of India or in his absence the Judge concerned of the Supreme Court, and will announce the appointment and issue the necessary notification in the Gazette of India.

What is the collegium system

• It is the system of appointment and transfer of judges that has evolved through judgments of the Supreme Court, and not by an Act of Parliament or by a provision of the Constitution.
• The Supreme Court collegium is headed by the Chief Justice of India and comprises four other seniormost judges of the court.
• A High Court collegium is led by its Chief Justice and four other seniormost judges of that court.
• Names recommended for appointment by a High Court collegium reaches the government only after approval by the CJI and the Supreme Court collegium.
• Judges of the higher judiciary are appointed only through the collegium system — and the government has a role only after names have been decided by the collegium.
• The government’s role is limited to getting an inquiry conducted by the Intelligence Bureau (IB) if a lawyer is to be elevated as a judge in a High Court or the Supreme Court.
• It can also raise objections and seek clarifications regarding the collegium’s choices, but if the collegium reiterates the same names, the government is bound, under Constitution Bench judgments, to appoint them as judges.

Constitutional Provisions regarding Appointment of Judges

• Judges of the Supreme Court and High Courts are appointed by the President under Articles 124(2) and 217 of the Constitution. The President is required to hold consultations with such of the judges of the Supreme Court and of the High Courts as he may deem necessary.
• Article 124(2) says: “Every Judge of the Supreme Court shall be appointed by the President by warrant under his hand and seal after consultation with such of the Judges of the Supreme Court and of the High Courts in the States as the President may deem necessary for the purpose and shall hold office until he attains the age of sixty-five years. Provided that in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of India shall always be consulted.”
• And Article 217: “Every Judge of a High Court shall be appointed by the President by warrant under his hand and seal after consultation with the Chief Justice of India, the Governor of the State, and, in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of the High Court.”

Evolution of Collegium System

• The collegium system has its genesis in a series of judgments called “Judges Cases”. The collegium came into being through interpretations of pertinent constitutional provisions by the Supreme Court in the Judges Cases.
  • First Judges Case: In S P Gupta Vs Union of India, 1981, held that the proposal for appointment to a High Court can emanate from any of the constitutional functionaries mentioned in Article 217 and not necessarily from the Chief Justice of the High Court. The Constitution Bench also held that the term “consultation” used in Articles 124 and 217 was not “concurrence” — meaning that although the President will consult these functionaries, his decision was not bound to be in concurrence with all of them. The judgment tilted the balance of power in appointments of judges of High Courts in favour of the executive.
  • Second Judges Case: In The Supreme Court Advocates-on-Record Association Vs Union of India, 1993, a nine-judge Constitution Bench overruled the decision in S P Gupta and devised a specific procedure called ‘Collegium System’ for the appointment and transfer of judges in the higher judiciary. The majority verdict accorded primacy to the CJI in matters of appointment and transfers while also ruling that the the term “consultation” would not diminish the primary role of the CJI in judicial appointments. Ushering in the collegium system, the court said that the recommendation should be made by the CJI in consultation with his two seniormost colleagues, and that such recommendation should normally be given effect to by the executive. It added that although it was open to the executive to ask the collegium to reconsider the matter if it had an objection to the name recommended, if, on reconsideration, the collegium reiterated the recommendation, the executive was bound to make the appointment.
  • Third Judges Case: In 1998, President K R Narayanan issued a Presidential Reference to the Supreme Court over the meaning of the term “consultation” under Article 143 of the Constitution (advisory jurisdiction). In response, the Supreme Court laid down 9 guidelines for the functioning of the coram for appointments and transfers. This opinion laid down that the recommendation should be made by the CJI and his four seniormost colleagues, instead of two. It also held that Supreme Court judges who hailed from the High Court for which the proposed name came, should also be consulted. It was also held that even if two judges gave an adverse opinion, the CJI should not send the recommendation to the government.

Criticism regarding Collegium System

• Critics argue that the system is non-transparent, since it does not involve any official mechanism or secretariat. It is seen as a closed-door affair with no prescribed norms regarding eligibility criteria or even the selection procedure. There is no public knowledge of how and when a collegium meets, and how it takes its decisions. Lawyers too are usually in the dark on whether their names have been considered for elevation as a judge.

5 . Foreign Contribution Regulation Act

Context : The Home Ministry has warned NGOs, who have changed their office-bearers and key functionaries without informing the Ministry, with penal action, if they fail to do so within a month.

What is Foreign Contribution

• As defined in Section 2(1)(h) of FCRA, 2010, “foreign contribution” means the donation, delivery or transfer made by any foreign source, ─:
  • of any article, not being an article given to a person as a gift for his personal use, if the market value, in India, of such article, on the date of such gift is not more than such sum as may be specified from time to time by the Central Government by rules made by it in this behalf
  • of any currency, whether Indian or foreign;
  • of any security as defined in clause (h) of section 2 of the securities Contracts (Regulation) Act, 1956 and includes any foreign security as defined in clause (o) of Section 2 of the Foreign Exchange Management Act, 1999.
• Explanation 1 – A donation, delivery or transfer or any article, currency or foreign security referred to in this clause by any person who has received it form any foreign source, either directly or through one or more persons, shall also be deemed to be foreign contribution with the meaning of this clause.
• Explanation 2 ‒ The interest accrued on the foreign contribution deposited in any bank referred to in sub-section (1) of Section 17 or any other income derived from the foreign contribution or interest thereon shall also be deemed to be foreign contribution within the meaning of this clause.
• Explanation 3 ‒ Any amount received, by an person from any foreign source in India, by way of fee (including fees charged by an educational institution in India from foreign student) or towards cost in lieu of goods or services rendered by such person in the ordinary course of his business, trade or commerce whether within India or outside India or any contribution received from an agent or a foreign source towards such fee or cost shall be excluded from the definition of foreign contribution within the meaning of this clause
• When articles gifted for personal use do not amount to foreign contribution. – Any article gifted to a person for his personal use whose market value in India on the date of such gift does not exceed rupees twenty-five thousand shall not be a foreign contribution within the meaning of sub-clause (i) of clause (h) of sub-section (1) of section (2).”

Who cannot receive foreign contribution?

• a candidate for election;
• correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper;
• Judge, government servant or employee of any Corporation or any other body controlled or owned by the Government;
• member of any legislature;
• political party or office bearer thereof;
• organization of a political nature as may be specified under sub- section (1) of Section 5 by the Central Government.
• association or company engaged in the production or broadcast of audio news or audio visual news or current affairs programmes through any electronic mode, or any other electronic form as defined in clause (r) of sub-section (i) of Section 2 of the Information Technology Act, 2000 or any other mode of mass communication;

Acceptance of foreign funds for NGO’s

• The Act permits only NGOs having a definite cultural, economic, educational, religious or social programme to accept foreign contribution, that too after such NGOs either obtain a certificate of registration or prior permission under the Act. 

Registration Requirement for NGO’s

• In order to be registered under the FCRA, an NGO must be in existence for at least three years and must have undertaken reasonable activity in its field for which the foreign contribution is proposed to be utilised. Further, it must have spent at least INR 1,000,000 over three years preceding the date of its application on its activities. The registration certificate is valid for a period of five years and must be thereafter renewed in the prescribed manner.
• NGOs not eligible for registration can seek prior approval from FCRA for receiving foreign funding. This permission is granted only for a specific amount of foreign funding from a specified foreign source for a specific purpose. It remains valid till receipt and full utilisation of such amount. 
• Further, it must have a separate bank account exclusively for the deposit of foreign contribution. No other fund can be credited to this account.

Use of Foreign Funding

• All funds received by a NGO must be used only for the purpose for which they were received. 
• Such funds must not used in speculative activities identified under the Act.
• Except with the prior approval of the Authority, such funds must not be given or transferred to any entity not registered under the Act or having prior approval under the Act.
• Every asset purchased with such fund must be in the name of the NGO and not its office bearers or members.                                                      

Reporting requirement 

• Every NGO registered or having prior approval under the Act must file an annual report with the Authority in the prescribed form. This report must be accompanied by an income and expenditure statement, receipt and payment account, and balance sheet for the relevant financial year. For financial years where no foreign contribution is received, a ‘NIL’ report must be furnished with the Authority.