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27 Jan, 2020

21 Min Read

Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana


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 the move and its significance; about PMJAY and its objectives

News: India is aiming to plug significant gaps in providing healthcare in smaller cities and towns under the ambitious Ayushman Bharat programme by signing up hospitals operated by state-run companies and Indian Railways.


  • The PMJAY, launched in September 2018, aims to provide health insurance for secondary and tertiary hospitalization to over 100 million poor and vulnerable families, which would total around 500 million beneficiaries.

  • Since its launch, over 7.8 million patients have availed of insurance services under the scheme at over 21,271 hospitals across the country, information on the PMJAY website showed as of Saturday.

  • However, a research conducted by PMJAY for April-July last year showed that there was disparity in where these services were availed of, based on the disease burden and socio-economic status.

About the move

It has been decided that all public hospitals should be empanelled under AB-PMJAY (Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana) in order to expand its coverage.


  • The government’s push to get public hospitals empanelled is due to a lack of secondary and tertiary healthcare facilities in poorer regions.

  • A number of hospitals in smaller cities— including those run by state-run enterprises—are under-utilized, even though there is strong demand for their services in these regions especially because of the insurance programme.


  • Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) is a Centrally Sponsored Scheme having central sector component under Ayushman Bharat Mission anchored in the Ministry of Health and Family Welfare (MoHFW).

  • It is an umbrella of two major health initiatives, namely Health and wellness Centres (HWCs) and National Health Protection Scheme (NHPS).

  1. Health and Wellness Centres (HWCs)

Under this 1.5 lakh existing sub centres will bring health care system closer to the homes of people in the form of Health and wellness centres. These centres will provide comprehensive health care, including for non-communicable diseases and maternal and child health services.

List of Services to be provided at Health & Wellness Centre

  • Pregnancy care and maternal health services
  • Neonatal and infant health services
  • Child health
  • Chronic communicable diseases
  • Non-communicable diseases
  • Management of mental illness
  • Dental care
  • Eye care
  • Geriatric care Emergency medicine

  1. National Health Protection Mission (PM-JAY)


  • AB-PMJAY provides a defined benefit cover of Rs. 5 lakh per family per year. This cover will take care of almost all secondary care and most of tertiary care procedures.

  • To ensure that nobody is left out (especially women, children and elderly) there will be no cap on family size and age in the scheme.

  • The benefit cover will also include pre and post-hospitalisation expenses. All pre-existing conditions will be covered from day one of the policy. A defined transport allowance per hospitalization will also be paid to the beneficiary.

  • Benefits of the scheme are portable across the country and a beneficiary covered under the scheme will be allowed to take cashless benefits from any public/private empanelled hospitals across the country.

  • The beneficiaries can avail benefits in both public and empanelled private facilities. All public hospitals in the States implementing AB-PMJAY, will be deemed empanelled for the Scheme. Hospitals belonging to Employee State Insurance Corporation (ESIC) may also be empanelled based on the bed occupancy ratio parameter. As for private hospitals, they will be empanelled online based on defined criteria.

  • To control costs, the payments for treatment will be done on package rate (to be defined by the Government in advance) basis. The package rates will include all the costs associated with treatment. For beneficiaries, it will be a cashless, paper less transaction. Keeping in view the State specific requirements, States/ UTs will have the flexibility to modify these rates within a limited bandwidth.

Eligibility criteria

  • AB-PMJAY is an entitlement based scheme with entitlement decided on the basis of deprivation criteria in the SECC database.

  • The different categories in rural and urban areas include
    • families having only one room with kucha walls and kucha roof;
    • families having no adult member between age 16 to 59;
    • female headed households with no adult male member between age 16 to 59;
    • disabled member and no able bodied adult member in the family;
    • SC/ST households;
    • landless households deriving major part of their income from manual casual labour,
    • Families in rural areas having any one of the following: households without shelter, destitute, living on alms, manual scavenger families, primitive tribal groups, legally released bonded labour.
    • For urban areas, 11 defined occupational categories are entitled under the scheme - Occupational Categories of Workers, Rag picker, Beggar, Domestic worker, Street vendor/ Cobbler/hawker / Other service provider working on streets, Construction worker/ Plumber/ Mason/ Labour/ Painter/ Welder/ Security guard/, Coolie and another head-load worker, Sweeper/ Sanitation worker / Mali, Home-based worker/ Artisan/ Handicrafts worker / Tailor, Transport worker/ Driver/ Conductor/ Helper to drivers and conductors/ Cart puller/ Rickshaw puller, Shop worker/ Assistant/ Peon in small establishment/ Helper/Delivery assistant / Attendant/ Waiter, Electrician/ Mechanic/ Assembler/ Repair worker, Washerman/ Chowkidar.

As per the SECC 2011, the following beneficiaries are automatically excluded:

  • Households having motorized 2/3/4 wheeler/fishing boat
  • Households having mechanized 3/4 wheeler agricultural equipment
  • Households having Kisan Credit Card with credit limit above Rs. 50,000/ -
  • Household member is a government employee
  • Households with non - agricultural enterprises registered with government
  • Any member of household earning more than Rs. 10,000/ - per month
  • Households paying income tax
  • Households paying professional tax
  • House with three or more rooms with pucca walls and roof
  • Owns a refrigerator
  • Owns a landline phone
  • Owns more than 2.5 acres of irrigated land with 1 irrigation equipment
  • Owns 5 acres or more of irrigated land for two or more crop season
  • Owning at least 7.5 acres of land or more with a t least one irrigation equipment.

Source: Livemint

Oslo Accords

GS-II : International Relations U.S.A

Oslo Accords

Syllabus subtopic:

  • Effect of Policies and Politics of Developed and Developing Countries on India’s interests, Indian Diaspora.
  • Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests.

Prelims and Mains focus: About the move to withdraw and its implications, About Oslo Accords, West bank settlements; Six-Days war

News: Palestinian officials threatened on Sunday to withdraw from key provisions of the Oslo Accords, which define relations with Israel, if U.S. President Donald Trump announces his West Asia peace plan next week.


  • Mr. Trump’s initiative will turn Israel’s temporary occupation (of Palestinian territory) into a permanent occupation.

  • The Palestinians, who see east Jerusalem as the capital of their future state, said Mr Trump’s plan buries the two­state solution that has been the cornerstone of global West Asia diplomacy.

About Oslo Accords

  • The Israeli­Palestinian Interim Agreement, signed in Washington in 1995, sought to put into practice the first Oslo peace deal agreed two years earlier. The agreement set out the scope of Palestinian autonomy in the West Bank and Gaza.

  • Under the Oslo Accords, both Israel and the Palestinians agreed that the status of settlements would be decided by negotiations. But the negotiation process has been all but dead for several years now.

  • Israel walked into East Jerusalem in 1967 (Six-Day War), and subsequently annexed it. For Israel, Jerusalem is non-negotiable. The Palestinians want East Jerusalem as the capital of their future state. Most of the world’s nations look at it as occupied territory.

About West Bank

It is a landlocked territory near the Mediterranean coast of Western Asia, bordered by Jordan to the east and by the Green Line separating it and Israel on the south, west and north. The West Bank also contains a significant section of the western shore of the Dead Sea.

About West Bank settlements

  • The West Bank was captured by Jordan after the 1948 Arab-Israeli War.
  • Israel snatched it back during the Six Day War of 1967, and has occupied it ever since.
  • It has built some 130 formal settlements in the West Bank, and a similar number of smaller, informal settlements have mushroomed over the last 20-25 years.
  • Over 4 lakh Israeli settlers — many of them religious Zionists who claim a Biblical birthright over this land — now live here, along with some 26 lakh Palestinians.

Are settlements legal or illegal?

  • The United Nations General Assembly, the UN Security Council, and the International Court of Justice have said that the West Bank settlements are violative of the Fourth Geneva Convention.

  • Under the Fourth Geneva Convention (1949), an occupying power “shall not deport or transfer parts of its own civilian population into the territory it occupies”.

  • Under the Rome Statute that set up the International Criminal Court in 1998, such transfers constitute war crimes, as does the “extensive destruction and appropriation of property, not justified by military necessity and carried out unlawfully and wantonly”.

Source: The Hindu

Cases of diabetes and cancer rise in rural areas of M.P.


Syllabus subtopic: Issues Relating to Development and Management of Social Sector/Services relating to Health, Education, Human Resources.

Prelims and Mains focus: about the findings and their causes; about IHCI and its achievements; about non-communicable diseases and steps for their prevention; about National Health Mission (NHM)

News: Non­communicable diseases like hypertension, diabetes and cancer are posing a bigger challenge in the non­tribal rural areas of Madhya Pradesh than in the urban areas owing to a rapidly growing rate of incidence and the lack of awareness, according to the National Health Mission (NHM).


  • Screening of 30 lakh persons above the age of 30 across the State in December has revealed that Raisen, Hoshangabad and Seoni districts face the highest burden of the diseases.

  • The State unit of the National Health Mission anticipates urban districts like Bhopal, Gwalior or Indore to fare the worst.

Why more cases in non-tribal rural areas?

More awareness, as in the case of urban areas, translates into patients undergoing treatment despite a high incidence. As a result, the burden is moderate in urban areas, but due to low awareness in rural areas, it is increasing there.

Non Communicable Disease Control Programme

  • During the screening drive, taken up under the Centre’s Non-Communicable Disease Control Programme, what surprised officials was the low incidence in the 89 tribal blocks in the State, which has largest tribal population in the country, despite the low awareness levels.

  • The programme, which was launched recently and under which 86% of those screened have been put under treatment, focusses on identifying non­communicable diseases at the primary health­centre (PHC) level itself, and ensuring treatment up to the district­level and follow­ups with patients to continue medication.

  • In the first phase, 1,200 PHCs were roped in. In contrast to patients visiting a health centre, ASHA workers now go door­to­door to draft family profiles and screen them for the non­communicable diseases, added Dr. Sidana.

Case of hypertension in rural areas

  • Trans fatty acids when consumed in hydrogenated forms is a major cause of hypertension or high blood pressure levels. Cooking oil is still reused for the purpose in several rural areas.

  • The India Hypertension Control Initiative, supported by the World Health Organisation, is catering to patients above 18 suffering from the diseases in Bhopal, Sehore, Chhindwara, Seoni, Ujjain and Ratlam districts.

  • Of the screened persons, 2,55,420 were diagnosed for hypertension.

  • Of the country’s 100 districts with the highest prevalence of hypertension, 15 were in Madhya Pradesh.

About India Hypertension Control Initiative (IHCI)

  • The IHCI was launched in Kerala in April 2018 as a multi-partner five-year initiative with the Union Ministry of Health and Family Welfare, Indian Council of Medical Research, State government, and WHO India.

  • The IHCI was also launched in Madhya Pradesh, Telangana, Maharashtra, and Punjab.

  • The results from Kerala had been the most impressive so far because of the infrastructure strength of non-communicable disease clinics across the State.

  • Each patient was given a treatment book and the health card was kept at the hospital.

  • Every month there was a follow-up on the patient by the hospital over the phone or by visit of an Accredited Social Work Activist.

  • With the success of the initiative, the government is considering replicating it in other districts too.

About Non-communicable diseases (NCDs)

  • NCDs are medical conditions or diseases that are not caused by infectious agents. These are chronic diseases of long duration, and generally slow progression and are the result of a combination of genetic, physiological, environmental and behaviours factors.

  • NCDs are one of the major challenges for public health in the 21st century, not only in terms of human suffering they cause but also the harm they inflict on the socioeconomic development of the country. NCDs kill approximately 41 million people (71% of global deaths) worldwide each year, including 14 million people who die too young between the ages of 30 and 70. The majority of premature NCD deaths are preventable.

  • According to World Health Organization (WHO) projections, the total annual number of deaths from NCDs will increase to 55 million by 2030, if timely interventions are not done for prevention and control of NCDs.

  • In India, nearly 5.8 million people (WHO report, 2015) die from NCDs (heart and lung diseases, stroke, cancer and diabetes) every year or in other words 1 in 4 Indians has a risk of dying from an NCD before they reach the age of 70.

  • In a report “India: Health of the Nation’s States” by Ministry of Health and Family Welfare (MOHFW), Government of India (GOI), it is found that there is increase in the contribution of NCDs from 30% of the total disease burden- ‘disability-adjusted life years’ (DALYs) in 1990 to 55% in 2016 and also an increase in proportion of deaths due to NCDs (among all deaths) from 37% in 1990 to 61% in 2016. This shows a rapid epidemiological transition with a shift in disease burden to NCDs.

Major NCDs and their risk factors

  • The major NCDs are cardiovascular diseases, cancers, chronic respiratory diseases and diabetes.

  • Physical inactivity, unhealthy diets (diets low in fruit, vegetables, and whole grains, but high in salt and fat), tobacco use (smoking, second-hand smoke, and smokeless tobacco), and the harmful use of alcohol are the main behavioural risk factors for NCDs.

  • They contribute to raised blood pressure (hypertension); raised blood sugar (diabetes); raised and abnormal blood lipids (dyslipidaemia); and obesity. Air pollution is also leading risk factor for NCDs in terms of both outdoor air pollution and household air pollution that mainly results from burning solid fuels in the home for cooking and heat.

  • Although morbidity and mortality from NCDs mainly occur in adulthood, exposure to risk factors begins in early life. Therefore, NCDs and its risk factors have great importance to young people as well.

  • NCDs are rapidly increasing globally and reached epidemic proportions in many countries, largely due to globalization, industrialization, and rapid urbanization with demographic and lifestyle changes.

Actions to beat non-communicable diseases

  • The epidemic of NCDs cannot be halted simply by treating the sick, healthy persons have to be protected by addressing the root causes. Reducing the major risk factors for NCDs is the key focus of MOHFW to prevent deaths from NCDs. Tackling the risk factors will therefore not only save lives; it will also provide a huge boost for the economic development of the country.

  • MOHFW, GOI is already implementing “National Programme for Prevention and Control of Cancer, Diabetes, Cardiovascular disease and Stroke” (NPCDCS) with the objective to increase awareness on risk factors, to set up infrastructure (like NCD clinics, cardiac care units) and to carry out opportunistic screening at primary health care levels.

  • In response to the “WHO Global Action Plan for the Prevention and Control of NCDs 2013-2020”, India is the first country to adopt the National Action Plan with specific national targets and indicators aimed at reducing the number of global premature deaths from NCDs by 25% by 2025. The global action plan has suggested 9 targets for countries to set. But India has taken the unprecedented step of setting a tenth target to address household air pollution. India’s National Monitoring Framework for Prevention and Control of NCDs has committed for a 50% relative reduction in household use of solid fuel and a 30% relative reduction in prevalence of current tobacco use by 2025.

  • Integration of NPCDCS with the National Health Mission (NHM) resulted into augmented infrastructure and human resources particularly in the form of frontline workers- the ANM and the ASHA. With the active participation of these frontline workers the population-based periodic screening of hypertension, diabetes, and common cancers (oral, breast, cervical cancers) is initiated to facilitate the early detection of common NCDs.

  • Prevention and management of chronic obstructive pulmonary disease (COPD) and chronic Kidney disease (CKD); and better management of co-morbidities such as diabetes and tuberculosis are also considered under the programme.

  • Integration of AYUSH with NPCDCS is a further step for promoting healthy life style changes among the population. Health promotion through social media is also being used to generate awareness about prevention and control of NCDs, such as use of mobile technology in applications called mDiabetes for diabetes control, mCessation to help for quit tobacco, and no more tension as a support for mental stress management.

  • All people should join together to reduce premature deaths from NCDs by one third by 2030, the commitment made in 2015, as a part of Sustainable Development Goals. Young people can contribute in different ways to prevent NCDs such as sharing information/ targeted messages on key risk factors about NCDs on social media; organizing and supporting interventions to ensure healthy lives and promote wellbeing for all people, at all ages.

Unite in the fight against NCDs by:

  • being physical active,
  • choosing healthy diets,
  • saying no to tobacco,
  • reducing harmful use of alcohol,
  • promoting cleaner cities,
  • through universal health coverage.

Source: The Hindu

Rashtriya Uchchatar Shiksha Abhiyan (RUSA)


Syllabus subtopic:

  • Issues Relating to Development and Management of Social Sector/Services relating to Health, Education, Human Resources.
  • Public/Civil Service Values and Ethics in Public Administration

Prelims and Mains focus: about RUSA: objectives and corruption

News: The HRD Ministry has approached the Prime Minister’s Office (PMO) to flag alleged corruption in the implementation of the Rashtriya Uchchatar Shiksha Abhiyan (RUSA).


In a meeting held in July, 2019 between the Ministry and TISS, the institute’s director pointed out some “serious irregularities” in utilisation of funds. Following the meeting, TISS was asked by the Ministry to conduct a complete audit of funds released under RUSA.

How was the corruption unravelled?

  • An audit by Tata Institute of Social Sciences (TISS) last year uncovered that Rs 23 lakh was allegedly spent out of RUSA funds on the personal trips of an IAS officer of the Kerala cadre, who was RUSA’s national mission director during her stint as joint secretary at the HRD Ministry. She left the Ministry seven months ago and is currently posted as Principal Secretary, Fisheries, in Kerala.

  • The audit also discovered that RUSA’s national coordinator allegedly misappropriated Rs 2.02 crore of the funds. He had submitted handwritten taxi bills of Rs 1.26 crore to justify some of the expenditure.

  • The alleged corruption undermines the Centre’s efforts to streamline functioning of higher educational institutions in states. RUSA aims to improve the quality of such institutions by ensuring conformity to prescribed norms and standards.

About Rashtriya Uchchatar Shiksha Abhiyan (RUSA)

  • RUSA, a Centrally Sponsored Scheme (CSS), launched in October 2013, is aimed at improving higher education in states.

  • The scheme is being operated in mission mode for funding state universities and colleges to achieve the aims of equity, access and excellence. Since 2016-17, the government has spent an average of Rs 1,500 crore every year on RUSA.

  • TISS has been the implementing agency of the scheme since November 2013 and, as per the government’s MoU with the institute, will incur expenditure and submit claims to the HRD Ministry for reimbursement.

  • The central funding (in the ratio of 60:40 for general category States, 90:10 for special category states and 100% for union territories) would be norm based and outcome dependent. The funding would flow from the central ministry through the state governments/union territories to the State Higher Education Councils before reaching the identified institutions. The funding to states would be made on the basis of critical appraisal of State Higher Education Plans, which would describe each state’s strategy to address issues of equity, access and excellence in higher education.


The salient objectives of RUSA are to;

  • Improve the overall quality of state institutions by ensuring conformity to prescribed norms and standards and adopt accreditation as a mandatory quality assurance framework.
  • Usher transformative reforms in the state higher education system by creating a facilitating institutional structure for planning and monitoring at the state level, promoting autonomy in State Universities and improving governance in institutions.
  • Ensure reforms in the affiliation, academic and examination systems.
  • Ensure adequate availability of quality faculty in all higher educational institutions and ensure capacity building at all levels of employment.
  • Create an enabling atmosphere in the higher educational institutions to devote themselves to research and innovations.
  • Expand the institutional base by creating additional capacity in existing institutions and establishing new institutions, in order to achieve enrolment targets.
  • Correct regional imbalances in access to higher education by setting up institutions in unserved & underserved areas.
  • Improve equity in higher education by providing adequate opportunities of higher education to SC/STs and socially and educationally backward classes; promote inclusion of women, minorities, and differently abled persons.


  • RUSA would create new universities through upgradation of existing autonomous colleges and conversion of colleges in a cluster. It would create new model degree colleges, new professional colleges and provide infrastructural support to universities and colleges.

  • Faculty recruitment support, faculty improvements programmes and leadership development of educational administrators are also an important part of the scheme. In order to enhance skill development the existing central scheme of Polytechnics has been subsumed within RUSA. A separate component to synergise vocational education with higher education has also been included in RUSA. Besides these, RUSA also supports reforming, restructuring and building capacity of institutions in participating state.

The following are the primary components of RUSA that capture the key action and funding areas that must be pursued for the fulfilment of the targets:

  • Up gradation of existing autonomous colleges to Universities
  • Conversion of colleges to Cluster Universities
  • Infrastructure grants to Universities
  • New Model Colleges (General)
  • Upgradation of existing degree colleges to model colleges
  • New Colleges (Professional)
  • Infrastructure grants to colleges
  • Research, innovation and quality improvement
  • Equity initiatives
  • Faculty Recruitment Support
  • Faculty improvements
  • Vocationalisation of Higher Education
  • Leadership Development of Educational Administrators
  • Institutional restructuring & reforms
  • Capacity building & preparation, data collection & planning

Source: Indian Express

Bar-­headed goose


Syllabus subtopic: Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment.

Prelims and Mains focus: about the bar-headed geese: its conservation status and need for conservation

News: While the Kundavada lake on the outskirts of Karnataka’s Davangere city, which was the winter abode for many bar­headed geese from Mongolia, has failed to attract these winged visitors this time, the Kondajji lake located nearby has emerged as their new home.

Why did it happen?

  • The bar­headed geese, known for their ability to fly in extreme altitude and weather conditions, used to arrive at the Kundavada lake in the third week of November.

  • As the temperature drops in Mongolia in the last week of October, these birds migrate to comparatively warmer places in India.

  • They used to stay at the Kundavada lake till the first week of March. The lake is spread over 260 acres and is also a source of drinking water for Davangere city. Bird enthusiasts have recorded the presence of bar­headed geese in the Kundavada lake from 2012.

  • Large tracts of agricultural land in the vicinity of Kundavada have been converted into residential layouts in recent times. The Department of Horticulture has established a glasshouse on the bank of the lake on a three­acre area in 2018. In November 2018, only 10 bar­headed geese came to Kundavada. Last November, not a single goose visited the lake.

  • Following the loss of habitat in Kundavada, the bar­headed geese have made the Kondajji lake, located in a forest 14 km from Davangere, their new abode. The geese were sighted in Kondajji for the first time in January 2019, and in the second week of January this year, as many as 430 geese have been counted here.

Way ahead

The onus is on the Department of Forest and Wildlife to ensure minimum human interference near the Kondajji lake to ensure a comfortable stay for the birds.

About the bird

  • Geese, ducks and swans (the biological family Anatidae): collectively known as waterfowl.

  • Geese, which are larger than ducks and smaller than swans, are subdivided into three groups: grey, black and white geese.

  • About 73 cm long and weighing 1.6 kilograms, the Bar-headed Goose is a large bird. It eats mainly grasses, water plants, seeds and berries, but also partakes of smaller animal matter including insects and crustaceans. Its legs are well-developed for walking and running in soft wet land where it forages.

  • It is a migratory bird. It spends the summer months in central Asia, nesting and raising its young. As winter sets in it migrates to warmer climes of Southern Asia.

  • The Bar-headed Goose is one of few bird species known to fly over the Himalayas. There are reports of it actually flying over Mount Everest. How it deals with oxygen issues at enormous heights - as well as the reason for following that high-altitude route - is a matter of great interest for scientists.

  • Conservation status: Least Concern (LC)

Source: The Hindu

New Financial Resolution Authority on the anvil

GS-III : Economic Issues Banking

New Financial Resolution Authority on the anvil

Syllabus subtopic:

  • Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment
  • Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Prelims and Mains focus: About the proposed law and key changes to be brought by it; its advantages; about FRDI Bill; NBFCs

News: The Finance Ministry is working on putting in place a comprehensive resolution framework for financial institutions that have a precarious financial positions.

What is it for?

It is to ensure that the failure of some of the systemically important financial institutions does not affect the entire system.


  • In the recent period, the failure of some large non-banking financial companies (NBFCs), along with co-operative banks, have created panic among depositors as well as the financial sector as a whole.

  • In September 2019, the RBI had put Punjab and Maharashtra Co-operative Bank under “directions” due to weak financial health over its exposure to near-bankrupt realty player HDIL, to which it has loaned over 70 per cent of its Rs 9,000 crore in advances. While the central bank slapped restrictions on the bank for six months on September 24, it allowed withdrawal of only Rs 1,000, creating panic among the depositors.

  • On September 26, following a spate of complaints from the depositors, the RBI relaxed the curbs and capped withdrawal at Rs 10,000 and then, on October 3, the cash withdrawal limit was raised to Rs 25,000. It was subsequently raised to Rs 40,000 and then to Rs 50,000 over the next one month.

  • In November 2019, the government amended the Insolvency and Bankruptcy Code (IBC) rules to provide for a resolution of financial service providers (FSP) including NBFCs. This provided a generic framework for insolvency and liquidation proceedings of systemically important FSPs other than banks. Following this, the Reserve Bank of India (RBI) moved for resolution of DHFL.

  • However, government sources said these changes do not address the issue comprehensively and were aimed at immediate resolution of NBFCs.

About the proposed framework

  • The mechanism proposed by the Ministry — which is likely to be brought in through a new law — envisages setting up of a Resolution Authority comprising members from financial sector regulators as well as senior government officials as its members.

  • The government has held series of discussions — including during meetings of the Financial Stability and Development Council — to put in place a framework in this regard.

Ambit of resolution authority

  • The ambit of the Resolution Authority is likely to be over banks, NBFCs, insurance companies, securities market players, co-operative banks and regional rural banks.

  • In the recent period, the failure of some large non-banking financial companies (NBFCs), along with co-operative banks, have created panic among depositors as well as the financial sector as a whole. The central government is also working on increasing the deposit insurance limit of Rs 1 lakh at present to Rs 5 lakh.

Changes likely to be in FRDI Bill

  • The central government is also working on increasing the deposit insurance limit of Rs 1 lakh at present to Rs 5 lakh.

  • The Finance Ministry had, in 2018, withdrawn the proposed Financial Resolution and Deposit Insurance (FRDI) Bill over the controversial bail-in clause, which led to fears that the government may cancel or modify deposits in banks.

  • The new resolution framework being piloted by the Department of Economic Affairs could tone down some of the bail-in provisions, providing protection to deposit holders.

  • On the lines of the FRDI Bill, the proposed framework aims to address the issue of insolvency of firms in the financial sector — so that if a bank, NBFC, insurance company, pension fund or mutual fund run by an asset management company, fails, a solution is available to either sell that firm, merge it with another firm, or close it down, with the least disruption to the system, to the economy, and to investors and other stakeholders.

  • This would require change in existing laws so that some of the powers of financial sector regulators are transferred to the Resolution Authority being proposed in the new regime.

  • The Bill is expected to come in the Parliament after it is cleared by the Union Cabinet. Department of Economic Affairs has been piloting it and is expected to be ready with it. The bail-in provision was controversial and the government would truncate the issue and bring it. So, the government would be coming up with the revised version of the bill.

Way forward

A framework for resolution is required even for banks, insurance companies, mutual funds, securities market companies, so that their failure does not affect the financial system adversely. The proposed law is aimed at addressing this issue at the broader level.

Source: Indian Express

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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 draft policy and its significance; initiatives taken to boost gas-based economy, about PESO  

Corruption Perceptions Index (CPI­-2019)

Syllabus subtopic: Role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders.   Prelims and Mains focus: About the key highlights of the index; India’s performance; About Transparency International   News: Transparency In

Sagarmatha Dialogue

Sagarmatha Dialogue Syllabus subtopic: Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests. India and its Neighborhood- Relations.   Prelims and Mains focus: About the event and its significance   News:

New snake eel species discovered in Odisha

Syllabus subtopic: Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment.   Prelims and Mains focus: About the new species of the eel; about ZSI and its functions   News: A new snake eel species residing in the Bay of Bengal has been discovered

Republic Day 2020

Syllabus subtopic: Indian Constitution- historical underpinnings, evolution, features, amendments, significant provisions and basic structure. Prelims and Mains focus: about the national war memorial; significance of the republic day News: In a first, homage will be paid to the fallen soldiers

Legislative Councils

Syllabus subtopic: Parliament and State Legislatures—Structure, Functioning, Conduct of Business, Powers & Privileges and Issues Arising out of these. Prelims and Mains focus: about LCs: strength, selection of members, objectives News: The Andhra Pradesh government seems to be contem


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