Paper | Topics | Subject |
---|---|---|
GS-II | A Future for the World’s Children? report | |
G20 Meeting | ||
Insolvency and Bankruptcy Code’s (IBC) track record | ||
GS-III | Olive Ridley Turtles | |
Malai Mahadeshwara Wildlife Sanctuary |
Syllabus subtopic: Issues Relating to Development and Management of Social Sector/Services relating to Health, Education, Human Resources.
Prelims and Mains focus: about the report and its key findings; India’s performance
News: A Future for the World’s Children? report was recently released by a Commission of more than 40 child and adolescent health experts from around the world. The Commission was convened by the World Health Organization (WHO), UNICEF and The Lancet.
India specific findings
Global findings
Source: The Hindu
Syllabus subtopic: Important International Institutions, agencies and fora - their Structure, Mandate.
Prelims and Mains focus: about G20, steps taken by India to deepen corporate bond market and attract foreign portfolio investment (FPI)
News: The Finance Ministers and Central Bank Governors’ meeting is being held in Riyadh under Saudi Arabia’s G20 presidency for the first time.
Highlights of the meeting
What are those steps taken by the Indian government?
About G20
Source: Indian Express
Syllabus subtopic: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.
Prelims and Mains focus: about the performance of IBC since its inception
News: After the Insolvency and Bankruptcy Code (IBC) became law in May 2016, the ecosystem of corporate insolvency resolution process (CIRP) was put in place by the year-end. As of December 2019, the system had been in existence for three years.
How good have been the loan recoveries?
As of 31 December 2019, the 190 companies that had defaulted on loans yielded resolution plans with different degrees of realization. Claims worth Rs.3.52 trillion in total had been filed by financial creditors, primarily banks. Of this, around Rs.1.52 trillion—43.1% of the claims under consideration—has been recovered. This is much better than the rate of recovery before IBC was put in place. Take the case of 2015-16: Of the total bad loans up for recovery worth Rs.2.21 trillion, only Rs.22,768 crore, or 10.3% of the loans, was recovered. This evidence suggests IBC has been a huge success compared to the earlier loan recovery process.
Is there a twist in the IBC success rate?
The two biggest loan recoveries in the case of Bhushan Steel and Essar Steel India make up around 49.5% of the overall recovery. If these recoveries are left out, the total rate of recovery falls to 30.5%. If another big recovery, Bhushan Power and Steel, is excluded, then the rate of recovery falls further to 28%, which is substantially lower than the overall rate of recovery of 43.1%. Having said that, it is much better than what used to be the case before IBC was in existence. Also, up until 2015, it used to take 4.3 years on an average to resolve an insolvency case in India. That has fallen dramatically after IBC came into effect.
What about the cases that do not go for resolution?
If a resolution plan cannot be agreed upon within 330 days, the company that has defaulted on the loan goes for liquidation. Till now, liquidation has been initiated against 780 firms, of which 40 have been closed in the process. The recovery rate for firms that were liquidated in October-December was 10.7%. If the biggest recovery is left out, the rate is close to nil.
How many firms are in bankruptcy courts?
As can be seen from the chart, the number of companies being admitted to corporate insolvency resolution proceedings at the National Company Law Tribunal (NCLT) has shot up since January-March in 2017. The number of such companies was 1,961 as of December 2019, up from 1,497 as of September. What the data indicates is that the number of companies facing insolvency resolution is piling up at NCLT faster than it can dispose of them. This is the problem Debt Recovery Tribunals used to face earlier.
What does this mean for the IBC system?
At the current rate of disposal of cases by NCLT, it could take nearly five-six years for the most important cases to be settled. There is also a risk that the new system is getting overloaded with too many corporate defaults being brought under CIRP. One way to get around this hurdle is by encouraging banks to sell smaller loan defaults of up to Rs.100 crore and not take them to NCLT, so as not to clog the IBC system.
Source: Livemint
Syllabus subtopic: Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment.
Prelims and Mains focus: about Olive Ridley Turtles and steps taken for their conservation; about IUCN
News: Preparations are almost done at the Rushikulya rookery on the Odisha coast to welcome and protect Olive ridley turtles during mass nesting. Odisha has half of the world’s Olive Ridley turtle population and 90% of India’s turtle population lives in the state.
Steps taken by the state government
About Olive Ridley Turtles
Source: The Hindu
Syllabus subtopic: Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment.
Prelims and Mains focus: about MM wildlife sanctuary and the tiger reserves mentioned; about NTCA
News: Decks have been cleared to notify the Malai Mahadeshwara Wildlife Sanctuary in Karnataka’s Chamarajanagar district as a tiger reserve. The approval from the National Tiger Conservation Authority (NTCA) is expected any time now.
Background
State Board for Wildlife had given its concurrence to declare M.M. Hills sanctuary as a tiger reserve in January 2019. A proposal was submitted in May 2019 but it was returned as additional clarification was required with respect to the delineation of the boundary in the core area, list of existing settlements and the need to spell out the religious and tourism zone, etc. Hence, a revised proposal was submitted in January 2020 and a presentation made before the NTCA in Delhi.
What does it signify?
What’s next?
About MM Wildlife Sanctuary
Source: The Hindu
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