Factly :-News Articles For UPSC Prelims | Mar 11, 2021

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Cabinet clears 74% FDI in Insurance Sector

What is the news?

The Union Cabinet has approved a proposal to amend the Insurance Act, 1938. It will increase the foreign direct investment (FDI) limit in the insurance sector to 74% from 49%.

Conditions: The increase in the foreign direct investment(FDI) limit in the insurance sector comes with safeguards such as:

• The majority of directors on the Board and key management persons in health and general insurance companies would be resident Indians. At least 50% of directors will be independent directors.
• The government will also specify a particular percentage of profits to be retained as a general reserve.

Significance of this move: Raising the foreign investment limit(FDI) in the insurance sector is expected to provide the following benefits:

• Improve capital availability in the insurance sector.
• Help in developing the insurance industry as a channel for generating durable funds for the creation of long-term assets.
• An increase in competition in the sector will help in lowering the cost of insurance products.
• It would benefit small insurance players or the ones where the sponsors don’t have the ability to infuse more capital.
• Improve Insurance Penetration in the country.

About Insurance Penetration:

• Insurance penetration is used as an indicator of insurance sector development within a country. It is calculated as the ratio of total insurance premiums to the GDP in a given year.
• Currently, Insurance penetration stands at just 3.71% of the GDP in the country.

Source: Indian Express

Cabinet approves “Pradhan Mantri Swasthya Suraksha Nidhi | PMSSN”

What is the News?

The Union Cabinet approves the Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN).

About Pradhan Mantri Swasthya Suraksha Nidhi(PMSSN):

This program will ensure access to universal & affordable health care through a fund that does not lapse at the end of the financial year.

Features: 

1. It has been set up as a single non-lapsable reserve fund for a share of Health.
2. It will be made from the share of health in the proceeds of Health and Education Cess.
3. The fund will be administered and maintained by the Ministry of Health & Family Welfare

Note: Finance Minister announced the 4% Health and Education Cess during the Budget 2018-19. It replaced the existing 3% Education Cess.

How will the fund be utilised? The fund will be utilized for the following flagship schemes of the Ministry of Health & Family Welfare:

• Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY)
• Ayushman Bharat – Health and Wellness Centres (AB-HWCs)
• National Health Mission
• Pradhan Mantri Swasthya Suraksha Yojana (PMSSY)
• Emergency & disaster preparedness and responses during health emergencies
• Any future programme/scheme that targets to achieve progress towards SDGs and the targets set out in the National Health Policy (NHP) 2017.

Source: PIB

Biden’s “Afghanistan Peace Plan”

What is the News?

The US administration has proposed a new peace plan to the Afghan government and the Taliban. It aims to bring violence to a halt in Afghanistan.

What are the Key Features of Biden’s Afghanistan Peace plan?

1. UN Summit: United Nations will convene a meeting of the foreign ministers from China, Russia, Pakistan, Iran, India, and the United States. It will develop a “unified approach” to peace in Afghanistan.
2. Withdrawal of Troops: The peace plan has kept open the possibility that the 2500-odd US troops in Afghanistan might stay on for a while. Under the Doha agreement with the Taliban, the US had promised to withdraw all troops by May 1 this year.
3. Turkey to Organise a Meeting: The United States has asked Turkey to convene a meeting of the Afghan government and the Taliban to finalise a peace settlement.
4. Taliban to Reduce Violence: The United States has asked Taliban to accept an immediate agreement to reduce violence for 90 days. It will provide the space for the peace initiative.
5. Inclusive Interim Government: US has asked Afghan Government and Taliban to move towards a permanent and comprehensive ceasefire and form an interim unity government.

Where does the Afghanistan Government Stand on this peace plan?

• Afghan Government administration has consistently been critical of the U.S.’s direct outreach to the Taliban.
• During the Doha agreement, Afghan President said that he is the only legitimate representative of the Afghan people. Thus, he opposed making concessions to the Taliban.
• On the Peace Plan Proposal by the US, Afghan President has reiterated his opposition to any transfer of power except through elections. Further, the Afghan Vice President has said that the US can make a decision on their troops, not on the people of Afghanistan.

Source: The Hindu

Astronomers discover most distant “Quasar P172+18”

What is the news?

International team of astronomers discovers the most distant ‘Radio-Loud’ Quasar. It is named “P172+18”.  P172+18 discovered with the help of the European Southern Observatory’s Very Large Telescope (ESO’s VLT).

About P172+18:

• P172+18 is a quasar. It emitted wavelengths with a redshift of 6.8. The higher the redshift of the radio wavelength, the farther away is the source.
  • Redshift is an increase in the wavelength and corresponding decrease in the frequency and photon energy of electromagnetic radiation(such as light).
• The quasar is also one of the fastest accreting quasars. It means it is accumulating objects from the galaxy at an enormous speed.
• Further, 90% of the quasars do not emit strong radio waves, making this newly-discovered quasar special.

About Quasars:

• What are Quasars? Quasars are very luminous objects around black holes in faraway galaxies that emit jets at radio frequencies.
• Origin of Name: The word quasar is short for “quasi-stellar radio source”. This name, which means star-like emitters of radio waves was given in the 1960s when quasars were first detected.
  • However, now most astronomers know most quasars are faint radio emitters. In addition to radio waves and visible light, quasars also emit ultraviolet rays, infrared waves, X-rays, and gamma-rays.
• Where are they found? Quasars are only found in galaxies that have supermassive black holes which power these bright discs.
• How are Quasars formed? Most active galaxies have a supermassive black hole at the centre which sucks in surrounding objects. These objects while moving around a black hole emit energy before being sucked into the black hole. Quasars are formed from this energy.
• Key Characteristics of Quasars:
  • Most quasars are larger than our solar system as they are approximately 1 kiloParsec in width. (Parsec is a unit of length used to measure the astronomical objects outside the Solar System. They are approximately equal to 3.26 light-years).
  • Even though quasars are very bright, we cannot see any quasars in the night sky without using a telescope. This is due to their great distance from Earth.
  • Energy from quasars takes billions of years to reach the Earth’s atmosphere. For this reason, the study of quasars can provide astronomers with information about the early stages of the universe.

Source: Down To Earth

India Not Part of “Troika-plus-Pakistan Conference”

What is the News?

Russia has planned to hold a Troika-plus-Pakistan conference on Afghanistan in Moscow, Russia.

About the Troika-plus-Pakistan Conference:

• Troika-plus-Pakistan meeting involves consultations between the US, Russia, China, Pakistan along with the representatives of the Afghanistan government, Taliban, and other senior Afghan leaders.
• 2 Such meetings held in 2020.
• Purpose: The meeting is expected to discuss ways to assist in advancing the intra-Afghan talks in Doha. It aims to reduce the level of violence and to end the armed conflict in Afghanistan.

Note: Unlike the United Nations(UN) led summit proposed by the US, India has not been invited to this Russian conference.

Why was India excluded from the conference?

• According to diplomatic sources, the Troika process is an already established mechanism. There was no deliberate attempt to leave India out of the proposed talks on Afghanistan.
• Further, the “Troika Plus” meeting would run in addition to and not counter to the US proposals for the future roadmap for Afghanistan.

Source: The Hindu

Lok Sabha gives approval for “National Capital Territory Bill”

What is the News?

Lok Sabha passes the National Capital Territory of Delhi Laws (Special Provisions) Second (Amendment) Bill, 2020.

About National Capital Territory of Delhi Laws Second (Amendment) Bill, 2020:

• The bill amends the National Capital Territory of Delhi Laws (Special Provisions) Second Act,2011. The 2011 Act was valid till 31st December 2020. The Bill seeks to extend this deadline till the end of December 2023.
• The bill seeks to regularise unauthorized colonies based on 2 qualifications
  1. that existed in the National Capital Territory of Delhi as of June 1,2014 and
  2. that had seen development up to 50% as of January 1,2015.
• It also provides protection to certain forms of unauthorized developments in Delhi from punitive action where adequate measures are yet to be taken.

What was the need for this bill?

• There are 1,700 unauthorized colonies in Delhi. Due to unauthorization, these colonies are not receiving proper amenities. This Bill provides ownership rights to those living in these colonies.
• The bill would also facilitate access to institutional credit and also improve the basic amenities.

Source: The Hindu

IDBI Bank out of “PCA framework”

What is the News?

Reserve Bank of India(RBI) has taken out IDBI Bank from the prompt corrective action(PCA) framework. But it is still subject to certain conditions and continuous monitoring.

What is Prompt corrective action(PCA) Framework?

• PCA is an RBI framework. Banks with weak financial metrics are put under the PCA framework by the Reserve Bank of India(RBI).
• Aim: It aims to check the problem of Non-Performing Assets (NPAs) in the Indian banking sector.

When was the PCA framework introduced?

• The RBI introduced the PCA framework in 2002. It is a structured early-intervention mechanism for banks that become undercapitalised due to poor asset quality, or vulnerable due to loss of profitability.

When does RBI invoke PCA?

• The PCA framework is invoked when banks breach any of the three key regulatory trigger points namely
  1. Capital to risk-weighted assets ratio
  2. Net non-performing assets(NPA) and
  3. Return on assets(RoA).

What are the restrictions on Banks when PCA is invoked? There are two types of restrictions:

Mandatory Restrictions: It includes:

• • Restrictions on Dividends
  • Restrictions on Branch expansion
  • Restrictions on Management compensation among others.

Discretionary Restrictions: It includes

• • Curbs on lending and deposits.
  • Recommending the bank owner to bring new management and board among others.

Source: Indian Express

Present Status of “Stand Up India Scheme”

What is the News?

The government has informed the Lok Sabha about the implementation of the Stand Up India Scheme. More than 81% of the accounts under the Stand Up India Scheme belong to women entrepreneurs.

About Stand Up India Scheme:

• Ministry: Launched in 2016 by the Department of Financial Services, Ministry of Finance.
• Objective: The Stand-Up India Scheme facilitates bank loans for setting up a new enterprise in manufacturing, services, agri-allied activities, or the trading sector by SC/ST/Women entrepreneurs.
• Bank Loan: It provides bank loans between Rs 10 lakh and up to 1 crore.
  • The government does not allocate funds for loans under the Scheme. They are extended by Scheduled Commercial Banks(SCBs).
• Eligibility condition for Stand Up India Scheme:
  • SC/ST and/or woman entrepreneurs above 18 years of age.
  • Loans under the scheme are available only for greenfield projects. Greenfield signifies the first time venture of the beneficiary in the manufacturing, services, agri-allied activities or the trading sector.
  • In the case of non-individual enterprises, 51% of the shareholding and controlling stake should be held by either SC/ST and/or Women Entrepreneur.
  • Borrowers should not be in default to any bank/financial institution.
• Repayment: The loan is repayable in 7 years with a maximum moratorium period of 18 months.
• Duration of the Scheme: The Stand-Up India Scheme has been extended up to the year 2025.

Source: PIB