Factly :-News Articles For UPSC Prelims | 20 Apr, 2021

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“Asset Reconstruction Companies” – Sudarshan Sen Committee Set-up

What is the News?

Reserve Bank of India(RBI) has set up the Sudarshan Sen committee to review the working of Asset Reconstruction Companies (ARCs) Comprehensively. It will recommend suitable measures for enabling them to meet the growing requirements.

Headed by: The committee will be headed by Sudarshan Sen, former executive director, Reserve Bank of India (RBI).

About Asset Reconstruction Company (ARC):

• Asset Reconstruction Company (ARC) is a specialized financial institution that buys the Non-Performing Assets (NPAs) from banks and financial institutions. It helps banks in cleaning up their balance sheets.
• Thus, it helps banks to concentrate on normal banking activities. Banks, Instead of going after the defaulters, can focus on selling their bad assets to the ARCs at a mutually agreed value.

Regulated by:

• Legal Basis: SARFAESI (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest) Act, 2002 provides the legal basis for the setting up of ARCs in India.
• Functions under: ARCs function under the supervision and control of the Reserve Bank of India (RBI).

Capital Requirements for an ARC:

• As per the SARFAESI Act, ARCs should have a minimum net owned funds of Rs. 100Cr.
• The ARCs also have to maintain a capital adequacy ratio of 15% of its risk-weighted assets.
  • The amount of Risk-weighted assets helps to determine the minimum capital that a bank must hold to reduce the risk of insolvency.

What are the resolution strategies of an ARC? As per the SARFAESI Act, an ARC can:

• Restructure or reschedule the loan
• Enter into settlements,
• sell or lease the borrower’s business,
• take over or change the management, and
• Also, engage in security interest enforcement (sell, take possession, or lease the owned asset).
  • But enforcement or security interest can only be conducted when at least 75% of secured creditors and the ARC are in agreement.

What are sources of funds for ARCs?

An ARC can issue bonds, debentures, and security receipts to meet its funding requirements.

Security Receipt:

It is a receipt that an ARC issues to a Qualified Institutional Buyer (QIB). Whereas, QIB receives the title, right, or interest in the financial asset that ARC buys. It also means these Security receipts are backed by discounted bad debts that an ARC owns.

Whereas, ARC uses this fund to make an upfront payment to buy the discounted bad debts.

Furthermore, an ARC can only raise investments from Qualified Institutional Buyer (QIB).

How are ARCs different from the IBC?

• The Insolvency and Bankruptcy Code (IBC) aims at the resolution and reorganization of insolvent companies. Whereas, ARCs are set up for clearing up NPAs.
• ARCs primarily deal with recovery. Whereas the IBC seeks a resolution of insolvency. Further, in the IBC Process, creditors can make insolvency resolution an economically viable process and entities can apply for insolvency, bankruptcy, or liquidation.

Source: The Hindu

“Startup India Seed Fund Scheme” launched

What is the News? 

Union Minister of Commerce & Industry launches the Startup India Seed Fund Scheme (SISFS).

About Startup India Seed Fund Scheme (SISFS):

• The scheme was announced during the Prarambh: the ‘Startup India International Summit’. Which marks the 5-year anniversary of the Startup India initiative.

Objective:

• Startup India Seed Fund Scheme(SISFS) aims to provide financial assistance to startups. Assistance is provided for proof of concept, prototype development, product trials, market entry, and commercialization.
• Thus, it would help to grow startups to a beginner’s level. After that, startups will be able to raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions.

Implementation:

•  The Department for Promotion of Industry and Internal Trade (DPIIT) constituted An Experts Advisory Committee(EAC). Which will be responsible for the overall execution and monitoring of the Startup India Seed Fund Scheme.

Funding:

1. Eligible incubators throughout India will hand out funding to eligible startups across India.
2. Grants of up to Rs 5 Crores shall be provided to the eligible incubators selected by the EAC.
3. The selected incubators shall provide grants of up to Rs 20 lakhs for validation of Proof of Concept, or prototype development, or product trials to startups.
4. After that, Startups will further receive investments of up to Rs 50 lakhs for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments.

Duration:

• The scheme will have a corpus of Rs. 945 Crore. This will be divided over the next 4 years.

Significance of the scheme:

• The SISFS scheme will help startups in:
  • Secure seed funding
  • Inspire innovation
  • Support transformative ideas
  • Facilitate implementation and
  • Start startup revolution.
• The Scheme will also create a robust startup ecosystem particularly in Tier 2 and Tier 3 towns of India. These towns lack adequate funding facilities for startups.

Source: PIB

“NASA’s Mars Helicopter Ingenuity” Makes First Flight on Another Planet

What is the News?

NASA’s Mars Helicopter Ingenuity successfully flies on Mars. It is the first powered flight on another planet.

 About NASA’s Mars Helicopter Ingenuity

• Ingenuity is the first helicopter to fly on Mars. NASA’s rover called Perseverance carried it to the Red Planet.
• Purpose: The helicopter’s main task is to carry out a technology demonstration to test the first powered flight on Mars. Further, it also aims to collect samples from the locations on Mars where the rover cannot reach.
• Features: NASA’s Mars Helicopter Ingenuity is able to fly using counter-rotating blades that spin at about 2,400 rpm. It also has a wireless communication system and is equipped with computers, navigation sensors, and two cameras. Moreover, it is also solar-powered and is able to charge on its own.
• Note: The Ingenuity helicopter’s mission is experimental in nature and is completely independent of the Perseverance rover mission.

Why it was an engineering challenge?

The atmosphere on Mars is 1% in density compared to the atmosphere on Earth. Thus, to fly on Mars, helicopter blades need to rotate 8 times as fast as a passenger helicopter to fly on Earth.

A helicopter flying a few meters from the surface on Mars requires the same amount of energy, as it requires to fly 2-3 times the height of Mt Everest on earth.

Moreover, a helicopter requires to have its own energy source from solar panels. Also, Ingenuity will face very cold Martian nights that can be brutal on batteries and the onboard computer.

• Significance of the mission:
  • A helicopter was placed on the surface of Mars for the first time ever.
  • Hence, it’s performance during this mission will help in considering small helicopters for future Mars missions — where they can perform a support role as robotic scouts, surveying terrain from above or as full standalone science craft.

Perseverance Rover:

• Perseverance is a car-sized Mars rover designed to explore the crater Jezero on Mars as part of NASA’s Mars 2020 mission.
• Launched in: The rover was launched in July,2020. It landed at the Jezero Crater of Mars in February.2021.
• Purpose:
  • The rover is designed to better understand the geology of Mars and seek signs of ancient life.
  • It will also collect and store a set of rock and soil samples that could be returned to Earth in the future.
  • Further, it will also test new technology to benefit future robotic and human exploration of Mars.

Source: The Hindu

“Great Indian Bustard” Poaching in Pakistan desert

What is the News?

A group of hunters shot down two Great Indian Bustards(GIBs) in a protected area of southern Punjab’s Cholistan in Pakistan. This has left wildlife activists in India shocked and outraged.

Why is India Concerned?

• The Grassland Habitat in Pakistan’s Cholistan desert is very similar to the habitat in Rajasthan’s Desert National Park(DNP). Where the Great Indian Bustard(GIB) was killed.
• In these areas, the last remaining populations of  Great Indian Bustard reside.
• Rajasthan shares the international border with Pakistan’s Sindh and Punjab provinces. The remaining Indian-bred GIBs may also fly across to Pakistan’s desert and become easy prey for the gun-toting poachers.
• Hence, the hunting of the GIB will not only drastically reduce India’s GIB population but will also affect the desert ecosystem.

Note: The hunting of the Houbara bustards in Pakistan has also led to an alarming decline in their numbers. It also has drastically reduced India’s share of annual winter migration of this bird.

About Great Indian Bustard:

• The Great Indian Bustard is one of the heaviest flying birds in the world.
• Vegetation: It inhabits dry grasslands and scrublands on the Indian subcontinent.
• Flagship Species: It is the flagship grassland species, representing the health of the grassland ecology.
• Habitat: It is endemic to the Indian subcontinent. In India, the population confines mostly to Rajasthan and Gujarat.
  • In Rajasthan also GIB’s population is less than 100. This accounts for 95% of its total world population.
• State Bird: GIB is the State bird of Rajasthan.
• Conservation Status:
  • IUCN Red List: Critically Endangered
  • CITES: Appendix I
  • Wildlife (Protection) Act,1972: Schedule I
• Threats: The bird under constant threat due to a) Collision/ electrocution with power transmission lines b) Hunting (still prevalent in Pakistan) c) Irrigation and farming technology among others.

Initiatives for Protection of GIB:

• Great Indian Bustard Project: It was launched by the Rajasthan Government. It aims at the conservation of the remaining population of Great Indian Bustard (Ardeotis nigriceps) locally called Godawan.
• The Ministry of Environment, Forests and Climate Change (MoEFCC) has included the Great Indian Bustard(GIB) under the Species Recovery Programme.

Source: The Hindu

EU Council Approves “EU’s Indo-Pacific Strategy”

What is the News?

The Council of the European Union has approved the EU’s Indo-Pacific Strategy for cooperation in the Indo-Pacific.

About EU Indo-Pacific Strategy:

• The Indo-Pacific region spans from the east coast of Africa to the Pacific Island States. It has the world’s two most populous countries, which are also huge economies — India and China.
• Aim: The strategy aims to contribute to the stability, security, prosperity, and sustainable development of the Indo-Pacific Region. Basis of strategy are the promotion of democracy, rule of law, human rights, and international law.

Also Read – Increasing Significance of Indo-Pacific for EU

Key Features of the Strategy:

• Security and Defence: The strategy aims to develop partnerships with the Indo-Pacific countries in the areas of security and defence. Areas include addressing maritime security, malicious cyber activities, emerging technologies, terrorism, and organised crime.
• Rules-Based Order: The strategy will be based on upholding democracy, human rights, the rule of law, and respect for international law.
• On Covid-19: EU will work with countries to mitigate the economic and human effects of the Covid-19 pandemic. It will also ensure an inclusive and sustainable socio-economic recovery.

About Council of the European Union:

• Council of the European Union was established in 1967. It is one of the Institutions of the European Union(EU) as listed in the Treaty on European Union.
• Functions: It is tasked with:
  • Negotiating and adopting EU laws (in most cases together with the European Parliament)
  • Coordinating EU member states’ policies
  • Developing the EU’s common foreign and security policy,
  • Concluding international agreements and
  • Adopting the EU budget (together with the European Parliament).

 Source: The Hindu

National Climate Vulnerability Assessment Report

What is the News?

The Department of Science and Technology(DST) has released the National climate vulnerability assessment report.

About National Climate Vulnerability Assessment Report:

• The National Climate Vulnerability Assessment Report identifies the most vulnerable states and districts in India, as per the current climate risk and key drivers of vulnerability.
• Indicators: Several key drivers of Vulnerability used by the report for the assessment, For instance: 1) percentage of the population living below the poverty line; 2) income share from natural resources; 3) Also, the proportion of marginal and small landholdings, 4) women’s participation in the workforce, and; 5) the density of healthcare workers among others.
• Participation: Around 24 states and 2 Union Territories participated in the exercise. The DST and the Swiss Agency for Development & Cooperation(SDC) organized it jointly.

Key Findings:

• High Climate Vulnerable States: The report identifies eight eastern states as highly vulnerable to climate change: Jharkhand, Mizoram, Odisha, Chhattisgarh, Assam, Bihar, Arunachal Pradesh and West Bengal.
  • These states are mostly from the eastern part of the country. Thus, they require prioritization of adaptation interventions.
• Lower-middle Vulnerable States: Himachal Pradesh, Telangana, Sikkim, and Punjab.
• Low Vulnerable States: Uttarakhand, Haryana, Tamil Nadu, Kerala, Nagaland, Goa and Maharashtra.
• Climate Vulnerable Districts: The report also identifies Climate Vulnerable districts. According to it, among all states, Assam, Bihar, and Jharkhand have over 60% districts in the category of highly vulnerable.

Significance:

• The assessment will help Policymakers in taking appropriate climate actions.
• Further, it will also benefit climate-vulnerable communities across India through development of better-designed climate change adaptation projects.

Source: AIR

“Vande Bharat Mission” Becomes One of Top Civilian Evacuation Mission

What is the News?

 Vande Bharat Mission (VBM) becomes one of the largest evacuation missions of civilians by a country.

About Vande Bharat Mission(VBM):

• Vande Bharat Mission started in May 2020 to bring back Indians stranded abroad due to COVID-19 and the resultant lockdowns.
• The first phase of the Vande Bharat mission aimed at destinations with a high concentration of Indians.
• Currently, into the middle of Phase 10, the mission surpasses the large-scale airlift of 1.1 lakh people in 1990 at the onset of the Gulf War.

Cargo Only Flights:

• Air India has also chartered some flights as “cargo-only flights”. These flights shipped fruits and vegetables to NRIs and rural farmers in West Asian countries, Singapore and Kuala Lumpur. So that NRIs living there do not face the food shortage.

Transport Bubbles:

• Transport bubbles or air travel arrangements are temporary arrangements between two countries aimed at restarting commercial passenger services when regular international flights are suspended as a result of the pandemic.
• The arrangements are reciprocal in nature. The airlines from both countries enjoy similar benefits.
• India has established such arrangements with countries such as the US, UK, UAE, Canada, Ethiopia, France among others.

Source: The Hindu