16 December, 2019
4 Min Read
|GS-I||Pending dues: visitor centres at Ajanta, Ellora shut||Modern History|
|GS-II||BRICS’ NDB pledges $100 million to NIIF’s Fund of Funds|
|Longest UN climate talks end with no decision about key issue on agenda|
|Turkey to sign off on military pledge to Libya||Miscellaneous|
|Pleas in SC speak of past judgments|
|‘Maternity scheme exclusionary, need benefits for all’|
|GS-III||Bank NPAs again stoke asset quality concerns||Economic Issues|
Syllabus subtopic: Indian culture will cover the salient aspects of Art Forms, Literature and Architecture from ancient to modern times.
Prelims and Mains focus: About Ajanta and Ellora Caves, UNESCO World Heritage Sites; ecological and other threats faced by our historical monuments
News: Two tourist visitor centres set up at Ajanta and Ellora caves by the Maharashtra government with funding from the Japanese International Cooperation Agency ( JICA) have been shut due to their pending water and electricity dues worth ?5 crore, an official said.
About the two centres and their objectives
The centres, which were supposed to serve as a one-stop location for all information about history and importance of these world famous UNESCO heritage sites, have replicas of some sculptures located inside the caves.
The State set up the two centres, having facilities like audiovisual presentations and library, in 2013 for which ? 125 crore was spent in two phases, the official said. A big chunk of this fund came from JICA.
These centres have replicas of sculptures in Ajanta and Ellora caves. Using multimedia, these facilities make tourists understand the Jataka tales. This helps reduce the time spent by visitors in the caves, which will in turn help in the longevity of these monuments.
Why are the centres closed now?
The facilities ran smoothly for sometime but have been closed since September last year as they do not have water and power supply. The dues of these two centres are now running into ? 5 crore.
The Maharashtra Tourism Development Corporation (MTDC) demanded funds from the government five to six times to clear the dues. The MTDC needs around ?10 crore to clear all the dues and to make these centres operational, the official said, adding the government should sanction regular funds for these facilities.
What it may lead to and way ahead?
The Japanese government spent money on this project. If these centres re main closed for a long time, their whole purpose becomes meaningless. This will also affect the image of our country and the State. The government should plan something concrete for the sustainability of such centres..
People travel thousands of miles to visit Ajanta and Ellora caves. They prefer to spend time in the caves rather than seeing their replicas (at the tourist visitor centres).
These centres surely help elderly tourists who cannot walk for long. But to make these facilities sustainable, the commercial angle also needs to be looked into. There should be additional facilities like a cafeteria, hotel, and a hub to showcase local items.
About Ajanta and Ellora Caves
Rock-cut cave architecture occupies a very important place in the Indian Art tradition. From the humble beginnings at the Barabar Caves, they evolve into spectacular caves at Ajanta and Ellora. Both these caves have been accorded the UNESCO World Heritage Site status.
Table summing up the contrasting features are as follows
Ellora/ Elura/Verul Lena Caves
Near Aurangabad district of Maharashtra
North West of Aurangabad district of Maharashtra
Constructed between 2nd Century BC to 6thCentury AD
Constructed between 6th Century AD to 10th Century AD
Number of caves
30 caves with one incomplete so sometimes considered 29.
4 chaityas and rest viharas.
100 caves with 34 open for public. Caves dedicated to Hinduism are more followed by Buddhist caves.
Cave 10 is the only Chaitya while rest are viharas.
Hinduism, Buddhism and Jainism
Satavahanas, Vakatakas and Chalukyas
Rashtrakutas, Kalachuris, Chalukyas and the Yadavas
Chronology of Construction
2nd-1st Century BC – Hinayana Phase
5th – 6th Century AD – Mahayana Phase
550 – 600 AD – Hindu Phase
600 – 730 AD – Buddhist Phase
730 – 950 AD – Hindu and Jain Phase
Paintings, architecture and sculptures
Architecture and sculptures.
Especially the Kailashnath temple.
About UNESCO world heritage sites
A UNESCO World Heritage Site is a place that is listed by the United Nations Educational, Scientific and Cultural Organization (UNESCO) as of special cultural or physical significance.
The list is maintained by the international World Heritage Programme administered by the UNESCO World Heritage Committee, composed of 21 UNESCO member states which are elected by the General Assembly.
Each World Heritage Site remains part of the legal territory of the state wherein the site is located and UNESCO considers it in the interest of the international community to preserve each site.
Selection of a site:
To be selected, a World Heritage Site must be an already classified landmark, unique in some respect as a geographically and historically identifiable place having special cultural or physical significance (such as an ancient ruin or historical structure, building, city, complex, desert, forest, island, lake, monument, mountain, or wilderness area). It may signify a remarkable accomplishment of humanity, and serve as evidence of our intellectual history on the planet.
Legal status of designated sites:
UNESCO designation as a World Heritage Site provides prima facie evidence that such culturally sensitive sites are legally protected pursuant to the Law of War, under the Geneva Convention, its articles, protocols and customs, together with other treaties including the Hague Convention for the Protection of Cultural Property in the Event of Armed Conflict and international law.
UNESCO World Heritage Sites in India
The Archaeological Survey of India (ASI) is the nodal agency for forwarding any request for World Heritage status to any Indian site whether cultural or natural.
Based on the proposals received from the Central or State Government agencies as well as management Trusts, etc., and after their due scrutiny, the Government forwards the nomination dossiers to the World Heritage Center.
There are 38 World Heritage Sites located in India. These include 30 cultural sites, 7 natural sites and one mixed-criteria site. India has the sixth largest number of sites in the world.
Note: to know more about UNESCO world heritage sites in India, click on the following link below:
Syllabus subtopic: Important International institutions, agencies and fora, their structure, mandate.
Prelims and Mains focus: About BRICS, NDB, NIIF, AIIB
News: New Development Bank (NDB), earlier known as the BRICS Development Bank, has committed $100 million to India’s National Investment and Infrastructure Fund’s (NIIF) Fund of Funds.
NDB is a multilateral development bank that was created by governments to leverage capital for development purposes, especially infrastructure projects.
Founded by Brazil, Russia, India, China and South Africa (collectively the BRICS countries) in July 2014, the bank was launched a year later with an initial authorized capital of $100 billion.
Funding received by NIIF’s FoF so far
Earlier in August, NIIF Fund of Funds (FoF) received a commitment of ?667 crore (close to $100 million) from the Asian Development Bank (ADB), according to a disclosure on ADB’s website.
NIIF’s Fund of Funds, according to the disclosure, is looking to raise about $1 billion to invest in up to 10 private equity funds managed by fund managers in India. Its portfolio funds are expected to provide primarily growth capital to firms across sectors, including green infrastructure, affordable housing, manufacturing and services.
Of the targeted corpus, the fund has so far received commitments worth $700 million, including investments from NDB and ADB.
In June 2018, Asian Infrastructure Investment Bank (AIIB) had approved an equity investment of $100 million as part of FoF’s initial closing, committing a further investment of $100 million as part of phase II for the final closing.
Envisioned in the Union budget 2015, NIIF was launched as an alternative investment fund in December 2016 with a target corpus of ?40,000 crore.
NIIF is a quasi-sovereign wealth fund, in which the government of India holds 49% equity with the rest held by foreign and domestic investors, is mandated to invest in infrastructure and related sectors that could help fuel economic growth in the country.
Its investments are diversified across its three funds— Master Fund, Fund Of Funds and Strategic Fund, across which it manages $4 billion of capital commitments.
Its Fund of Funds is mandated to invest as an anchor investor in third party fund managers. It can also selectively form joint ventures with fund managers.
In 2017, Abu Dhabi’s sovereign wealth fund—Abu Dhabi Investment Authority—committed to invest $1 billion, becoming the first institutional investor in NIIF’s Master Fund and a shareholder in NIIF Ltd, its investment management firm.
BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa.
BRIC started as a formal grouping in 2006 on the margins of G8 outreach summit.
Originally the first four were grouped as "BRIC" before the induction of South Africa in 2010.
1st Summit was held in Russia in 2009. Moreover, first 5-member BRICS summit was held in 2011.
Since 2009, the BRICS nations have met annually at formal summits. 8th summit in 2016 was held in Goa and BIMSTEC countries were invited for a joint summit as per the the tradition. 9th summit will be held in China.
What is the Significance of BRICS?
Starting essentially with economic issues of mutual interest, the agenda of BRICS meetings has considerably widened over the years to encompass topical global issues.
BRICS cooperation has two pillars – consultation on issues of mutual interest through meetings of Leaders as well as of Ministers of Finance, Trade, Health, S&T, Education, Agriculture, Communication, Labour, etc. and practical cooperation in a number of areas through meetings of Working Groups/Senior Officials.
Regular annual Summits as well as meetings of Leaders on the margins of G20 Summits are held. It has been pushing for greater economic growth among the member countries and reform of global financial institutions.
Focused on “greater people-to-people participation” during the BRICS events like BRICS Film Festival, BRICS Wellness Forum, BRICS Youth Forum and BRICS Friendship Cities Conclave held throughout the year across the country.
The New Development Bank(NDB) and the Contingent Reserve Arrangement (CRA) are the financial mechanism under BRICS.
CRA proposes to provide short-term liquidity support to the members through currency swaps to help mitigating BOP crisis situation, if such a situation arises.
It would also contribute to strengthening the global financial safety net and complement existing international arrangements (from IMF) as an additional line of defence.
BRICS Credit Rating Agency may come in near future to challenge the monopoly of the West.
The BRICS free trade agreement may come up against fears of Indian and Russian markets being swamped by Chinese imports.
In the current global political and economic scenario where protectionism and patriotism is on the rise, BRICS can become the bulwark of new globalization and may create new world order driven by emerging economies.
New Development Bank (BRICS bank)
The New Development Bank (NDB) is a multilateral development bank established by the BRICS states. The idea for the NDB was proposed by India at the 4th BRICS summit (2012) held in New Delhi. Then at the 6th BRICS summit held in Fortaleza, Brazil, the BRICS states signed the agreement on the NDB.
In the year 2015, an Indian K.V. Kamath was appointed as the President of the NDB. The headquarter of the Bank is in Shanghai, China. The first regional office of the NDB was established in Johannesburg, South Africa.
Structure of the NDB
The main organs of the Bank are:
Board of Governors;
Board of Directors;
President and Vice-Presidents.
Each country has one vote and none of the countries have veto power.
Major Objectives of the Bank
Promotion of infrastructure and sustainable development projects with a significant development impact in member countries;
Establish strategic partnerships with other multilateral development institutions and national development banks;
Build a balanced project portfolio giving due respect to their geographic location, financing requirements and other factors;
Promoting competitiveness and facilitating job creation;
Build a robust knowledge sharing platform among developing countries.
The NDB has been envisaged as a “dedicated channel of alternate finance” with greater focus on emerging economies and the Global South. Some experts also see it as an alternative to the existing US-dominated World Bank and the IMF.
The Asian Infrastructure Investment Bank (AIIB)
The AIIB was established in January 2016 with its headquarters located in Beijing. It has an authorised capital base of $100 billion. The core mandate of the AIIB is to address Asia-Pacific’s acute infrastructural needs. Its mission is “to improve economic and social development in Asia by investing in high-quality, financially viable and eco-friendly infrastructure projects”. It also aims to mobilize private capital to co-finance projects. The creation of the AIIB is a welcome initiative given Asia’s huge infrastructural deficit.
Members of the AIIB
Regional members: Afghanistan, Australia, Azerbaijan, Bangladesh, Brunei Darussalam, Cambodia, China, Fiji, Georgia, Hong Kong (China), India, Indonesia, Iran, Israel, Jordan, Kazakhstan, Korea, Kyrgyz Republic, Lao PDR, Malaysia, Maldives, Mongolia, Myanmar, Nepal, New Zealand, Oman, Pakistan, Philippines, Qatar, Russia, Samoa, Saudi Arabia, Singapore, Sri Lanka, Tajikistan, Thailand, Timor Leste, Turkey, United Arab Emirates, Uzbekistan, Vanuatu, and Vietnam.
Non-regional members: Austria, Denmark, Egypt, Ethiopia, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, and United Kingdom.
It has the following organs:
Board of Governors: It is the highest decision making body. The voting power is according to shareholding. The shareholding is according to the GDP.
Board of Directors
Chinese interests in creation of the AIIB
Firstly, China wants to make huge profits. China has huge forex reserves. Chinese banks seek to circulate loan money on which they will earn interest. This will help China in making huge profits with China being the largest shareholder of the Bank.
Secondly, it is expected to bolster China’s One Belt One Road Initiative (OBOR). The AIIB is going to finance rail-roads-ports infrastructure along the ancient silk route. Hence, the Bank is going to help in China’s grand strategic designs and geopolitical motives.
Thirdly, China wants to counter hegemonic dominance of the west-dominated World Bank and the IMF. China wants to counter the hegemony of the WB, IMF and the Asian Development Bank through New Development Bank and the AIIB. Some experts also say that countering the IMF will help in popularizing use of the Chinese yuan.
India and the AIIB
The Indian economy also has huge infrastructural funding requirements wherein the AIIB is playing a key role. India has become an important recipient of the AIIB loans. Till December 2017, AIIB had granted over $1 billion worth of loans for various infrastructure projects in India. India was the single largest borrower from the AIIB in 2017. A part of the Bengaluru Metro line and Gujarat rural roads have been granted around $330 million each. The AIIB is also involved in the unique Amravati project in Andhra Pradesh.
Recently, a top official of the AIIB has said, “India is the biggest commitment country for the Asian Infrastructure Investment Bank”. India is one of the most significant countries that the bank is supporting. The AIIB is involved in the transmission lines, rural roads and green projects among others. The bank has laid special emphasis on renewable energy projects in India and elsewhere.
The AIIB and the NDB: Geopolitical and Geo-economic Implications
The NDB represents the “most significant institutional innovation” of intra-BRICS diplomacy. There is a divergence of opinion regarding the geopolitical and geo-economic implications of the two banks. There are experts who say that these two banks are there simply to complement the two Brettonwoods institutions of WB and the IMF. However, other experts contradict it saying that the NDB and AIIB are actually challenging the hegemony of the World Bank and the IMF. Hence, the Western world should be worried about new competition in the global financial architecture.
Multilateralism has been under serious strain for the past few decades as exemplified by the stark failure of the Doha round of negotiations in the WTO and the ever-increasing “proliferation of regional and sectoral trade deals”. Different countries have failed to reach common ground on trade related issues through multilateral institutions.
The creation of the two banks NDB and AIIB is indeed a remarkable development. They reflect changing geo-economic dimension at the global level with the shift of economic power from West to the East. These two institutions have for the first time opened up “a strategic rivalry with Western and Japanese-led lending institutions, namely the World Bank, the International Monetary Fund (IMF), and the Asian Development Bank (ADB), mirroring the broader tussle for power and influence between the developed and developing world”. Indeed the two banks represent a quest for equality for the developing countries as far as the global financial architecture is concerned.
Similarities between the NDB and AIIB
The NDB and the AIIB are very similar as far as their purposes and functions are concerned. Both are chiefly concerned with financing projects of infrastructure and sustainable development in the emerging economies and developing economies. Their strategy is also geared towards forging partnerships with national development banks. They also form partnerships with the traditional multilateral and regional development banks, through co-financing activities in the private and public sectors.
They were created out of a shared frustration with existing multilateral lending forums, whose voting structures are stacked against emerging markets. The BRICS nations were given just 10.3 percent of the votes at the IMF. The countries like Japan, Germany, France, and the U.K., each hold greater voting shares than China, despite the latter being the world’s second largest economy.
Both the NDB and AIIB are following democratic and egalitarian norms to the benefit of the developing countries. The founders of the NDB have repeatedly emphasized the principle of stakeholder equality. Each of the BRICS countries will contribute an equal share of the NDB’s $100 billion start-up capital, giving them 20 percent of the voting rights each. The 5-year presidency is to be rotated equally among its members in the NDB. The AIIB has also sought to give a bigger voice to developing nations. The AIIB has reserved at least 75 percent of voting shares for Asia-Pacific countries, in a powerful contrast to its hierarchal, Western-centric counterparts. The presidency at the IMF is confined to Europeans, whereas the United States has sole discretion over the top role at the World Bank. Japan has led the ADB since its founding in 1966. This is not the state of affairs in either the NDB or the AIIB.
These banks are a sheer recognition of increasing geopolitical and geo-economic clout of the developing economies.
Both the banks have sought to fill the gap in infrastructure investment. They are expected to meet the enormous demand for infrastructure investment in the developing world.
Both the banks are a peaceful way of projecting Chinese power on the global stage concealing the assertive grand strategic designs of Chinese foreign policy. They are expected to help in consolidating and cementing the grand Chinese plan of One Belt One Road initiative (OBOR).
The WB and the IMF seek “strict conditionality of market and structural reform” before helping the developing countries. Fortunately, the NDB and the AIIB do not insist on such strict conditionalities and better understand the specific and contextual developmental requirements of the developing countries. These banks do not interfere in the internal affairs of the countries seeking economic help from them.
Both the NDB and the AIIB are strongly influenced by China’s leadership.
The NDB and the AIIB share the similar four-tier governance structure: a Board of Governor, a Board of Directors, a President (with senior management), and other officials and staff, in the descending order of authority. The Board of Governors, which is represented by all member countries at the Ministerial level, is responsible for most important decisions to these institutions.
Differences between the NDB and AIIB
Although the two institutions have overlapping mandates and other significant similarities they have substantial differences as well.
The NDB has been more of a collaborative effort among the BRICS members where China’s role is markedly different from that in the AIIB. China’s dominance is more starkly visible in the AIIB.
Membership of the two banks is also different. The five BRICS members are members of the NDB and its membership has not expanded since its inception. The AIIB began its operations with a large membership of 57 signatories (including many non-regional members). However, its membership has since grown rapidly to more than 75 members
The NDB because of its small membership is institutionally less complex than the AIIB.
The NDB is principally more outward-oriented while the AIIB is more Asia-centric.
The Asian Development Bank reflects Japanese and US interests in Asia. The threat to the regional dominance of the ADB is likely to come from the AIIB than the NDB. China has certainly this in mind and so it is more enthusiastic about AIIB than NDB.
The NDB and the AIIB are distinct from each other regarding the distribution of voting power in the Boards of Governors and Directors. The distribution of voting powers is much simpler and much more egalitarian in the NDB than in the AIIB. The five founding members of the NDB are entitled with the same voting power (20% each) in sync with their subscribed capital and no single member has veto power. Even in the case of future expansion it has been institutionally stipulated that the BRICS group voting power will collectively remain at 55 percent. The case of AIIB is more complicated. In the case of AIIB the member’s voting power reflects the relative size of its subscription is determined mostly on its financial capacity. However, there are provisions in the very institutional agreement of the AIIB which allows the regional (i.e., Asian) members collectively and China singularly to retain their domineering position against non-regional members.
Major Achievements of the NDB
Since its inception the NDB has come a long way. It has carved out a niche for itself. Now it has firmly graduated out of its start-up phase and initiated many dynamic projects. Apart from its headquarters in Shanghai, China it has come up with Africa Regional Centre of NDB in Johannesburg, South Africa.
It has issued its first green bond raising RMB 3 billion in the Chinese bond market exemplifying its commitment to sustainable development ethics.
It has primarily stayed committed to its core concern of financing infrastructure and sustainable development projects in BRICS countries. It has expressed strong emphasis on renewable energy related projects.
By implication the formation of the NDB and AIIB has brought to the limelight the urgent need for reforms in WB and IMF. These two Brettonwoods institutions need to be reformed in the right earnest if they are to stay relevant in the context of the changing geo-economic realities in the 21st century world.
The NDB has laid strong emphasis on developing and deepening of local capital markets in member countries by providing loans denominated in local currency in addition to US dollar loans. This is expected to help borrowing countries to manage and avoid the foreign exchange risks structurally inherent in loans from other banks.
The NDB needs to learn from the ADB which has kept on modifying its thrust areas in successive decades since its inception to keep pace with the evolving developmental needs of different countries. Hence, in future the NDB should also concentrate on formulating appropriate strategies to deal with the issues of productivity growth and employment generation (which are not directly dealt by other banks).
Challenges faced by the AIIB
The AIIB has emerged as a very robust bank reflected in “the strength of AIIB’s governance frameworks, including its policies on risk management, capital adequacy and liquidity”. However, it is faced with certain challenges:
So far the AIIB has funded only hard infrastructure projects like roads, electrical transmission lines, water supply system etc. Now it should also venture into “soft infrastructure” projects like public finance management, urban management, health policy and administrative management etc.
The projects funded by the AIIB must be socially and environmentally sensitive. The Bank needs to take up eco-friendly projects to help the global community deal with the monstrous threat of climate change.
Another critical challenge is to make the AIIB more dynamic, robust and independent in its project selection and funding.
There is also a need to carefully form and manage strategic partnerships with other multilateral institutions, banks, private sector and sovereign governments.
There is also the challenge of having a lean and thin AIIB bureaucracy with specialised and technical knowledge of banking operations. The AIIB needs to develop its own managerial, financial and legal teams to run the operation of the bank in a robust and efficient manner.
Syllabus subtopic: Important International institutions, agencies and fora, their structure, mandate.
Prelims focus: about COP 25, UNFCCC, IPCC
Mains focus: Challenges for the international community in framing policies to check climate change and their implications
News: The longest-ever climate conference delivered probably the weakest outcome ever.
What led to the deadlock?
The two-week Madrid climate conference could produce an agreement only after removing everything that any country objected to from the final text, and postponing all decisions on the only major agenda item it had to finalise.
After several countries rejected the draft agreement texts, the conference had little option but to remove all contentious phrases and provisions, and produce an agreement that was mired in generalities and lacked any specific decisions.
The issue of framing rules for setting up a new carbon market under Paris Agreement, the only big issue to be finalised in Madrid, was deferred entirely to next year, as no country was willing to budge from their stated positions.
Civil society groups, an important and vocal stakeholder in the negotiations, reacted with anger and disappointment at the outcome of what was the longest ever climate talks.
Mandate of COP 25
Apart from framing the rules for a new carbon market, the Madrid talks was expected to direct all countries to increase their climate actions in view of recent scientific assessments that show the world was not doing enough to prevent the extreme impacts of climate change.
Some countries, especially the most vulnerable ones like small island states, were pushing for language directing all countries to update their climate action plans by next year to reflect the new realities. Such demands were resisted mainly be big developing countries like China, India and Brazil, which had been arguing that countries be asked to deliver on their past and current promises before being asked to make any new commitments.
These developing countries repeatedly pointed out that the current situation was a direct result of developed countries not meeting their targets in the pre-2020 period, and has demanded an assessment of the performance of developed countries on climate action, including their obligation to provide finance and technology to the developing world.
What did the final agreement say?
The final agreement included a general call stressing “the urgency of enhanced ambition” by all countries. There was no direction to update climate action plans by next year.
Similarly, the demand of developing countries, reflected in the earlier drafts in the form of a provision setting up a two-year work programme to assess the performance of developed countries, was also not included in the final agreement.
Even something as innocuous as acknowledging the special reports of the Intergovernmental Panel on Climate Change (IPCC) had run into trouble. Some countries had objected to the fact that an earlier draft mentioned IPCC’s report on oceans but ignored the report on land, both having come out this year. The final agreement thus dropped the names of both the reports and only expressed its “appreciation and gratitude” to the IPCC for coming out with the two special reports.
The result from Madrid means negotiators face an uphill task next year to complete all the unfinished tasks ahead of the transition of the global climate regime from the 1997 Kyoto Protocol to the 2015 Paris Agreement. With the Paris Agreement set to come into effect next year, the rules of the new carbon market will have to be finalised soon. Moreover, with latest studies showing the world needs to do even more than what the Paris pact mandates, countries will be under pressure to increase their commitments.
Paris Climate Deal
The Paris Agreement of 2016 is a historic international accord that brings almost 200 countries together in setting a common target to reduce global greenhouse emissions in an effort to fight climate change.
The pact seeks to keep global temperature rise to below 2 degrees Celsius from pre-industrial levels, and to try and limit the temperature increase even further to 1.5 degrees Celsius.
To this end, each country has pledged to implement targeted action plans that will limit their greenhouse gas emissions.
The Agreement asks rich and developed countries to provide financial and technological support to the developing world in its quest to fight and adapt to climate change.
How does a country leave the Agreement?
Article 28 of the Paris Agreement allows countries to leave the Paris Agreement and lays down the process for leaving.
A country can only give a notice for leaving at least three years after the Paris Agreement came into force.
This happened on November 4, 2016. Therefore, the US was eligible to move a notice for leaving on November 4 this year, which it did.
The withdrawal is not immediate, however. It takes effect one year after the submission of the notice. It means the United States will be out of Paris Agreement only on November 4 next year.
About Intergovernmental Panel of Climate Change (IPCC)
The Intergovernmental Panel on Climate Change (IPCC) is the UN body for assessing the science related to climate change.
Established by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO) in 1988.
Aim: to provide political leaders with periodic scientific assessments concerning climate change, its implications and risks, as well as to put forward adaptation and mitigation strategies.
Composition: It has 195 member states.
The IPCC has three working groups:
Working Group I, dealing with the physical science basis of climate change.
Working Group II, dealing with impacts, adaptation and vulnerability.
Working Group III, dealing with the mitigation of climate change.
About its 6th Assessment Report (AR6)?
It will examine topics such as the link between consumption and behaviour and greenhouse gas emissions, and the role of innovation and technology.
It will assess the connection between short to medium-term actions and their compatibility with the long-term temperature goal in the Paris Agreement.
It will assess mitigation options in sectors such as energy, agriculture, forestry and land use, buildings, transport and industry
Syllabus subtopic: Effect of policies and politics of developed and developing countries on India's interests, Indian diaspora.
Prelims and Mains focus: About the crisis in Libya and geographical locations related to ir related to it; challenges for the international community for peace in Libya
News: Turkey moved closer to military support for Libya’s internationally recognised government when a bilateral deal that provides for a quick reaction force if requested by Tripoli was sent to Parliament.
Late last month, Ankara and Tripoli signed an expanded security and military accord and, separately, a memorandum on maritime boundaries that Greece said violates international law.
While the maritime accord has been sent to the United Nations for approval, the military deal has been presented to Turkey’s Parliament. Parliament will enter it into force after approval.
What it may lead to?
Ankara’s latest move raises tensions in the Mediterranean region and risks confrontation with forces led by Khalifa Haftar based in eastern Libya, where rival political factions have been based since 2014.
Egypt, which has condemned the maritime deal as “illegal”, urged other countries to stop intervening in Libya to enable the country to restore its own security and stability, in an apparent rebuke to Turkey.
About Libyan crisis
Libya has been beset by chaos since Nato-backed forces overthrew long-serving ruler Col Muammar Gaddafi in October 2011.
The oil-rich country, a key departure point for some of the thousands of migrants travelling to Europe, once had one of the highest standards of living in Africa, with free healthcare and free education.
But the stability that led to its prosperity has been shattered and the capital, Tripoli, is now the scene of serious fighting between rival forces as negotiations to build a post-Gaddafi Libya stall.
Is anyone in control?
Only Libya's myriad armed militias really hold sway - nominally backing two centres of political power in the east and west with parallel institutions.
Tripoli administration, the internationally recognised government, known as the Government of National Accord (GNA)
This is under the leadership of Prime Minister Fayez Sarraj, an engineer by profession. He arrived in Tripoli in March 2016, four months after a UN-brokered deal to form a unity government, to set up his administration. Over the last three years he has worked to gain the support of the various militias and politicians, but he has little real power over the whole country or of the forces ostensibly under his control.
Tobruk administration, includes the parliament elected in 2014 after disputed elections
When those who held power in Tripoli refused to give it up in 2014, the newly elected MPs moved to the port of Tobruk, 1,000km (620 miles) away, along with the old government. In 2015 some of these MPs backed the UN deal for a unity government, but the parliament has since refused to recognise it and has been blocking efforts to organise fresh elections because it wants military strongman Gen Khalifa Haftar, who leads a powerful force called the Libyan National Army (LNA), to be guaranteed a senior role in any new set-up.
Some go as far as to suggest that Gen Haftar has ambitions to be "the Sisi of Libya", a reference to Gen Abdul Fattah al-Sisi, who seized power in neighbouring Egypt.
And it is guns that matter. Some security analysts describe Libya as an arms bazaar. It is awash with weapons looted from Gaddafi's arsenal and from allies in the region supporting rival factions.
Militia allegiances often shift out of convenience and with the need to survive.
Weren't they all once allies?
They were united in their hatred for Gaddafi - but nothing more. There was no single group in charge of the rebellion. Militias were based in different cities, fighting their own battles.
They are also ideologically divided - some of them are militant or moderate Islamists, others are secessionists or monarchists, and yet others are liberals. Furthermore, the militias are split along regional, ethnic and local lines, making it a combustible mix.
And after more than four decades of authoritarian rule, they had little understanding of democracy.
Former US President Barack Obama, in an interview published in April 2016, said that the "worst mistake" of his presidency was the failure to prepare for the aftermath of Col Gaddafi's overthrow.
He partly blamed then-UK Prime Minister David Cameron for "the mess", saying he had not done enough to support the North African nation.
Who is Gen Haftar?
He helped Col Gaddafi seize power in 1969 before falling out with him in the 1980s and going into exile. He returned amid the uprising against Gaddafi to fight against his former boss - and in the aftermath cast himself as the main opponent of the Islamist militias in eastern Libya.
For three years he battled various Islamist militias, including groups aligned to al-Qaeda, in the eastern city of Benghazi. However, his critics accused of him of labelling anyone who challenged his authority as "terrorists".
After taking control of Benghazi, he then set his sights on the top job, but the main bone of contention has been a clause in the UN-brokered agreement that prevents a military figure taking political office.
Observers say Gen Haftar's appearance at a series of talks in France, Italy and United Arab Emirates (UAE) was more about establishing himself on the international stage than finding common ground.
This January his forces launched an offensive to seize two southern oil fields. He is now believed to control most of Libya's oil reserves.
Syllabus subtopic: Indian Constitution- historical underpinnings, evolution, features, amendments, significant provisions and basic structure
Prelims and Mains focus: about various judgements cited and their significance
News: The dozen or so petitions filed against the Citizenship (Amendment) Act, 2019, trace a series of Supreme Court judgments in which the court stood up for the dignity of the individual against the “tyranny of the majority”.
What do these judgements say?
These Constitution Bench judgments, which range from the decriminalisation of homosexuality to striking down triple talaq, hold that the State cannot discriminate on the basis of an intrinsic and core identity of an individual. Being Muslim is part of a person’s core identity and dignity. It cannot be the basis for discrimination for granting citizenship, they argue.
“Destruction of individual identity would tantamount to crushing of intrinsic dignity that cumulatively encapsulates the values of privacy, choice, freedom of speech and other expressions,” the Constitution Bench held.
It reminded that religion, race, caste, sex or place of birth were intrinsic and core elements of an individual’s identity under Article 15.
They contend that the amendments classify illegal migrants from Pakistan, Afghanistan and Bangladesh as those who are Hindu, Sikh, Buddhist, Jain, Parsi or Christian on one side, and those who are Muslim on the other. The amendments provide benefitts to illegal migrants who practise any of the six faiths and excludes Muslims.
Syllabus subtopic: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections
Prelims and Mains focus: about PMMVY and its significance, challenges in implementation and the govt’s performance in addressing them
News: Three years after a panIndia maternity benefit programme promising ?6,000 to new mothers was first announced, the chorus on its many exclusions is growing louder leading to a demand for a scheme that is truly universal.
Why so many exclusions?
The many clauses introduced into the long and tedious documentation work totalling 32 pages has led to single women and young brides being left out of its purview, say activists working at the grassroots level.
Activists say that registration for the scheme requires an applicant to provide her husband’s Aadhaar details along with her own, affecting single women which include unwed mothers, deserted a mother seeking benefits needs to provide proof of address of her marital home, which proves challenging for a newlywed expecting a child and often residing in her natal home during pregnancy. She is then forced to go from pillar to post to claim benefits.
About PM Matru Vandana Yojana (PMMVY)
The Pradhan Mantri Matru Vandana Yojana (PMMVY) was announced by PM Modi in a televised address to the nation on December 31, 2016. Five month’s later when the Union Cabinet approved the scheme, it decided to give a benefit of ?5,000 to pregnant and lactating mothers for the birth of the first child.
This would be disbursed in three installments upon meeting several conditionalities — registration of pregnancy, at least one antenatal check-up, registration of child birth and vaccinations.
The remaining cash incentive of upto ?1,000 is to be given under a separate scheme called the Janani Suraksha Yojana so that on an “average” women get a total sum of ?6,000.
The objective is to compensate women for wage loss due to child birth.
Problems faced by a newlywed woman
A mother is unable to get the compensation when she needs it the most, i.e. during the nine months of her pregnancy. While the scheme is solely for the first living child, it ironically leaves out those who are most likely to give birth to one — a newlywed woman.
The requirement that the applicant has to be at least 19 years old also leaves out younger brides, who hesitate in getting their marriages registered as the legal age of marriage is 18 years. 3035% firsttime mothers are under the age of 18 years.
The application form requires separate undertakings from the woman and her husband that the child for whom they are seeking the benefit will be “the first living child for both of them”, further making it prohibitive.
Govt’s target versus actual performance of the scheme
Since the scheme came into effect on January 2017, it has benefited a total of 128 lakh women as per the government’s reply in Parliament last week.
This is 80% of the total target the government has set out for itself — 53 lakh women per year.
Experts estimate that the government’s target itself is 43% of the total 123 lakh first births in the country in a year as derived from the population size of 133.9 crore in 2017 and the birth rate of 20.2 per thousand.
Questions and Concerns raised by the activists
Activists and grassroot workers must make a “formal representation” to the government highlighting their concerns so that corrective actions can be taken. Activists urge for a need for reviewing the scheme and making it universal by re moving restrictions on the number of children as well as including all women, whether they are in the formal or informal sector, engaged in paid or unpaid work.
The sum promised should also be at least on par with minimum wages for women in selfemployment, unpaid work, or working for less than minimum wages.
In order to raise these demands, protest marches are planned across several States on December 31, the third anniversary of the scheme. Workers, part of the Right to Food Campaign’s M.P. Chapter, have also started a signature campaign on the demands, which has so far been endorsed by 1,18,000 people
Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Prelims and mains focus: above the NPA crisis and the role of auditors in reporting bad loans; ethical standards related to auditing
News: India’s bad loan crisis seems far from over, with as many as 10 banks disclosing they had under-reported non-performing assets (NPAs) of close to ?24,000 crore in the year ended 31 March.
These banks are State Bank of India (SBI), Yes Bank, Punjab National Bank, Central Bank of India, UCO Bank, Bank of India, Union Bank of India, Indian Overseas Bank, Indian Bank and Lakshmi Vilas Bank.
For India’s banks, saddled with bad loans of ?9.5 trillion, the findings by the Reserve Bank of India do not bode well.
In 2017, the central bank directed banks to disclose the extent to which their assessment of NPAs and their provisioning diverged from that of RBI, and released guidelines for such classification. In April, RBI mandated banks to disclose information about provisioning divergence, if it exceeded 10% of a bank’s pre-provisioning profit.
Banks were also directed to disclose information if additional NPAs were more than 15 % of reported NPAs.
The country’s largest lender, SBI, reported the largest bad loan divergence so far this year, under-reporting gross NPAs of ?11,932 crore. Divergence refers to the difference between what a bank reports as its bad loans and provisions, and what the central bank finds when auditing that bank’s books. SBI also reported divergence in provision of ?12,036 crore.
The bank disclosed the divergence to the stock exchange last week.
Earlier, SBI had reported its highest bad loan divergence of ?23,239 crore for 2016-17.
While loans turn bad once the repayment overdue exceeds 90 days, provision is the money set aside for each loan a bank disburses. Provisions mirror the change in an asset’s classification from standard to NPA and increases as the asset deteriorates.
Following these disclosures, experts have raised questions about the role of auditors in the reporting process.
Role of auditors in regulation of bank accounts
From a regulatory perspective, auditors are the first line of defence, as bank accounts are prepared in accordance with the guidelines determined by RBI, with which bank auditors are well-versed. Hence, if the regulator RBI has detected misreported accounts, the auditors have to be held responsible and need to be penalized.
As banks hold unsecured deposits from the public, are highly leveraged and play a critical role in payments in the economy, they have to maintain the highest ethical standards. Indeed, by their very nature, banks are meant to stand for integrity and trust.
Is the fault only of auditors?
Lenders are not always at fault and the central bank would have sought NPA classification of some assets in retrospect and with abundant caution.
Not all divergences are a result of incorrect reporting or error of judgement.
In many cases, the stress in the account may have become apparent only in subsequent quarters after March ending. In such cases, it would be challenging for banks to pre-empt stress and, hence, report such account as non-performing. Further, in many cases, divergent accounts would have been factored in the reported results of the first half of the year.
About NPAs (non performing assets)
Classification of NPAs
Depending upon the period up to which a loan has remained as NPA, it is classified into three types:
Substandard Assets: An asset which remains as NPA for less than or equal to 12 months.
Doubtful Assets: An asset which remained in the above category for 12 months.
Loss Assets: These are assets where loss has been identified by the bank or the RBI. However, there may be some value remaining in it and hence the loan has not been not completely written off.
An example of NPA: Suppose State Bank of India (SBI) gives a loan of Rs. 5 crore to a company. They agreed upon for an interest rate of say 5 percent per annum. Now suppose that initially everything was good and the market forces were working in support of the company. In this scenario, the company was able to service the interest amount. Later, due to administrative, technical, legal, environmental, corporate reasons etc. suppose the company is not able to pay the interest rates for 90 days. In that case, a loan given to the company is a good case for the consideration as NPA.
Origin of the present NPA crisis:
The origin of the crisis lies partly in the credit boom of the years 2004-05 to 2008-09. In that period, commercial credit (‘non-food credit’) doubled.
It was a period in which the world economy as well as the Indian economy were booming. Indian firms borrowed furiously in order to avail of the growth opportunities they saw coming.
Most of the investment went into infrastructure and related areas: telecom, power, roads, aviation, steel. Businessmen were overcome with exuberance, partly rational and partly irrational. They believed, as many others did, that India had entered an era of 9% growth.
Thereafter, as the Economic Survey of 2016-17 notes:
Many things began to go wrong. Thanks to problems in acquiring land and getting environmental clearances, several projects got stalled. Their costs soared.
At the same time, with the onset of the global financial crisis in 2007-08 and the slowdown in growth after 2011-12, revenues fell well short of forecasts.
Financing costs rose as policy rates were tightened in India in response to the crisis. The depreciation of the rupee meant higher outflows for companies that had borrowed in foreign currency.
This combination of adverse factors made it difficult for companies to service their loans to Indian banks.
Copyright© Aspire IAS Academy. All rights reserved. Powered by CLT Technologies & Edu-Publishers Private Limited.