6. Curious Provisions of the Ordinance

Provision 1: Secretary's Power to Review Cabinet Decision

• Secretary to the council of ministers can challenge cabinet decision if it violates law or rules.
• Secretary's opinion leads to Lieutenant Governor's decision, enabling the rescission of the cabinet decision.

Provision 2: Altered Procedure for Summoning Assembly

• New procedure introduced for convening assembly sessions.
• Proposal submitted through Chief Secretary to Lieutenant Governor and Chief Minister for their 'opinion'.
• Deviates from established practice where the cabinet decides and the governor signs the summons.
• Lieutenant Governor cannot unilaterally summon the House and must follow the council of ministers' advice.

Constitutional Non-Conformity

• Analysis reveals non-compliance with Article 239AA and GNCTD Act 1991.
• Parliament is empowered to supplement provisions, not make contradictory provisions.
• No authority granted to Parliament or President to confer powers on Lieutenant Governor or bureaucrats to review cabinet decisions or remove Chief Minister's authority in posting, transfer, and disciplinary matters.

Legal Infirmities of the Ordinance

• Ordinance suffers from serious legal flaws in its current form.
• Contradicts constitutional provisions and grants undue powers to non-elected officials.

7. Judicial safeguards to avoid re-promulgation of ordinances

An Exclusive Economic Zone (EEZ) is a maritime zone that extends beyond a country's territorial sea and is established by coastal nations according to the United Nations Convention on the Law of the Sea (UNCLOS). The EEZ provides a sovereign state with certain rights regarding the exploration and use of marine resources within that zone.

Key features of an EEZ include:

1. Resource Rights: The coastal state has the exclusive rights to explore, exploit, conserve, and manage natural resources found in the waters, seabed, and subsoil within the EEZ. This includes resources like fish, oil, gas, and minerals.

2. Sovereign Rights: The nation holds sovereign rights for the purpose of exploring, exploiting, conserving, and managing natural resources, both living (like fish) and non-living (such as oil and gas) within the EEZ.

3. Jurisdiction: The coastal state has the authority to regulate various activities within the zone, including scientific research, environmental protection, and the construction of artificial islands or structures for economic purposes.

An EEZ typically extends up to 200 nautical miles (370 kilometers) from the coastline, but it can be modified based on specific geographical conditions or agreements between neighboring countries. It's important to note that while coastal states have rights within their EEZs, other nations have the freedom of navigation and overflight through these zones, as well as the right to lay submarine cables and pipelines in accordance with international law

3.Rights of the country in the EEZ

Within their Exclusive Economic Zone (EEZ), countries have specific rights granted by international law, primarily defined by the United Nations Convention on the Law of the Sea (UNCLOS).

Some of these rights include:

• The coastal state has the exclusive right to explore and exploit natural resources, both living (like fish) and non-living (such as oil, gas, and minerals), within its EEZ
• Nations can conduct various economic activities, including fishing, mining, and the extraction of oil and gas, subject to their own regulations and in compliance with international agreements and environmental conservation principles
• Coastal states have the right to conduct scientific research and surveys related to marine ecosystems, resources, and environmental factors within their EEZ
• Countries are responsible for the conservation and management of the marine environment within their EEZ, ensuring that activities carried out do not harm the ecosystem or endanger marine life
• The coastal state has regulatory jurisdiction over the EEZ, allowing it to establish and enforce laws related to customs, immigration, sanitation, and other matters concerning economic activities and environmental protection within this zone
• Nations can construct artificial islands, installations, and structures for economic purposes within their EEZ, provided they comply with international regulations and environmental safeguards
• While coastal states have exclusive rights to the resources within their EEZ, other countries have the freedom of navigation and overflight through these zones for purposes like shipping, laying cables, and conducting military activities, as permitted by international law

Territorial Waters

The territorial waters of a nation encompass all water regions under its authority, consisting of internal waters, the territorial sea, contiguous zone, the Exclusive Economic Zone (EEZ), and potentially extending to the continental shelf.

Territorial Sea

The territorial sea is a concept in international law that refers to the belt of coastal waters extending from a country's baseline (usually the low-water line along the coast) outwards for up to 12 nautical miles (22.2 kilometers), as recognized by the United Nations Convention on the Law of the Sea (UNCLOS)

Contiguous Zone

The contiguous zone is an area of water that extends beyond a country's territorial sea, stretching up to 24 nautical miles (44.4 kilometers) from the baseline. In this zone, a coastal state can exert limited control for the purpose of preventing or punishing infringements of its customs, fiscal, immigration, or sanitary regulations within its territory or territorial sea. While it allows for certain enforcement measures, it doesn't grant full sovereignty, unlike the territorial sea

5. India and Exclusive Economic Zone (EEZ)

• India has an Exclusive Economic Zone (EEZ) that extends up to 200 nautical miles (370 kilometers) from its coastline.
• Within this zone, India holds exclusive rights for exploring, exploiting, conserving, and managing natural resources, both living and non-living, such as fish, oil, gas, minerals, and other marine resources.
• The EEZ of India is significant, offering opportunities for economic activities like fishing, offshore energy exploration, scientific research, and environmental protection.
• India exercises jurisdictional control over this zone, regulating various activities and safeguarding the marine environment in accordance with international laws, including the United Nations Convention on the Law of the Sea (UNCLOS).
• Additionally, while India has exclusive rights to the resources within its EEZ, other nations have the freedom of navigation and overflight through these waters, respecting India's sovereign rights and complying with international laws and agreements.

Previous Year Questions   1.With reference to the United Nations Convention on the Law of Sea, consider the following statements: (UPSC CSE 2022) 1. A coastal state has the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles, measured from baseline determined in accordance with the convention. 2. Ships of all states, whether coastal or land-locked, enjoy the right of innocent passage through the territorial sea. 3. The Exclusive Economic zone shall not extend beyond 200 nautical miles from the baseline from which the breadth of the territorial sea is measured. Which of the statements given above are correct? A.1 and 2 only B.2 and 3 only C.1 and 3 only D.1, 2 and 3 Answer (D)

 

Source: The Hindu

MUDIYETTU

 

 

1. Context

The traditional temple ritual theatre of Mudiyettu, an offshoot of the Bhadrakali cult based on the tale of a battle between Goddess Kali and demon Darika performed by Thirumariyoor Kunjan Marar Smaraka Gurukulam in Irinjalakuda 

 

2. Mudiyettu

• Mudiyettu is a traditional ritualistic dance drama in Kerala, India. It's a vibrant art form that combines elements of dance, music, and drama. Mudiyettu is performed in honor of the goddess Bhadrakali and usually takes place in Bhadrakali temples.
• The performance involves elaborately dressed performers enacting stories from the Hindu mythology, particularly the battle between the goddess Kali and the demon Darika. The main performer, portraying Kali, wears an ornate headdress called a mudiyettu and vibrant costumes. The dance movements, accompanied by rhythmic drumming and chanting, are integral to the storytelling.
• Mudiyettu is not just entertainment; it holds cultural and religious significance in Kerala, celebrating the victory of good over evil while also preserving traditional art forms and folklore.
• Mudiyettu is also known as Mudiyeduppu. The word "Mudi" refers to the headgear of Kali, which is made of wood or metal
• The ritual is a village-wide ceremony where everyone participates. The locals arrive at the temple early in the morning on a designated day after the summer crops have been gathered
• The performance begins with a "Kalampooja", which is the worship of a drawing. The drawing is then erased, and musicians perform hymns. The stage is then set for the drama
• Originally, the characters performed with speech and dance. Later, rhythmic steps were introduced to make the performance more interesting. Viewers also participate in the performance
• Mudiyettu is on UNESCO's List of Intangible Cultural Heritage

3. Way forward

This recognition by UNESCO highlights the cultural significance of Mudiyettu as an ancient ritualistic art form that embodies the rich traditions, rituals, and community practices of Kerala. The inscription aims to raise awareness about Mudiyettu's cultural value and promote its preservation for future generations. UNESCO's acknowledgment also helps in safeguarding and supporting efforts to sustain this unique form of performance art

 

Source: The Hindu

 SUTLEJ-YAMUNA RIVER LINKING 

 

 

 

1. Context

 

 

Union Jal Shakti Minister Gajendra Singh Shekhawat will hold a meeting with the Chief Ministers of Haryana and Punjab on the Sutlej-Yamuna Link (SYL) canal issue in Chandigarh, a Haryana government statement said recently.

 

 

2. About Yamuna River

 

• The Yamuna River is one of the major rivers in India, flowing through the northern part of the country. It is the largest tributary of the Ganges River and plays a significant role in the socio-cultural and economic aspects of India.
• The Yamuna originates from the Yamunotri Glacier in the Uttarakhand state of the Indian Himalayas. It begins its journey at an altitude of approximately 6,387 meters (20,955 feet) near the Bandarpoonch mountain.
• The river flows through several Indian states, including Uttarakhand, Himachal Pradesh, Haryana, Delhi, and Uttar Pradesh, before merging with the Ganges at the holy city of Allahabad (Prayagraj) in Uttar Pradesh. The total length of the Yamuna River is approximately 1,376 kilometres (855 miles).

 

 3. About Sutlej River

 

• The Sutlej River is a powerful and historic river with significance in both its physical and cultural aspects.  The Sutlej originates in Lake Rakshastal in Tibet, flows northwestward through the Himalayas, and enters India through the Shipki La pass in Himachal Pradesh. It then winds through Punjab before merging with the Chenab River in Pakistan.
• With a total length of approximately 1,450 kilometres (900 miles), the Sutlej is the longest of the five rivers that give the Punjab region its name. Its drainage basin covers an area of approximately 395,000 square kilometres (153,000 sq mi).
•  The Sutlej has several tributaries, including the Baspa, Spiti, Nogli Khad, and Soan River. These tributaries contribute to its water flow and overall basin management.

 

 

4. The Sutlej Yamuna Link Canal Dispute in India

 

The Sutlej Yamuna Link (SYL) Canal dispute is a long-standing and contentious issue between the Indian states of Punjab and Haryana. The dispute revolves around the sharing of water from the Ravi and Beas rivers, tributaries of the Indus River.

Background

• In 1966, Punjab was reorganised, carving out Haryana as a separate state.
• The Indus Waters Treaty of 1960 allocated the waters of the Indus River system, including the Ravi and Beas, to India.
• To utilize its share of Ravi and Beas waters, Haryana demanded a canal linking the Sutlej River (a tributary of the Indus) to the Yamuna River (a tributary of the Ganges).
• In 1981, the Rajiv Gandhi government agreed with Punjab and Haryana, allocating Ravi and Beas waters and requiring Punjab to construct the SYL Canal to carry Haryana's share of water to the Yamuna.

5. The Dispute

 

• Punjab opposed the agreement, arguing that it had limited water resources and that sharing with Haryana would leave its farmers with insufficient water.
• Punjab began construction of the canal but later stopped it over concerns about water scarcity and political opposition.
• Haryana filed a petition in the Supreme Court seeking to compel Punjab to complete the canal.
• The Supreme Court has ruled in favour of Haryana on multiple occasions, but Punjab has not complied with the orders.

 

6. Constitutional Provisions for Interstate Water Disputes

 

In India, several constitutional provisions and legislative frameworks deal with interstate water disputes:

Constitutional Provisions

• Article 262: Empowers the Union Parliament to enact laws regarding the adjudication of interstate river water disputes and valley development. This gives the central government authority to intervene and establish tribunals or other mechanisms to resolve water conflicts between states.
• Article 245: Defines the legislative sphere of the Union and states. Although water is not explicitly mentioned, it falls under the concurrent list, meaning both the central and state governments can legislate on it. This can lead to potential overlap and conflicts, making Article 262 crucial for dispute resolution.
• Article 143: Establishes the Supreme Court as the highest court of India, with the power to hear appeals and settle disputes, including those about interstate water rights.

Legislative Frameworks

• Inter-State River Water Disputes Act (1956): This key legislation provides a framework for establishing tribunals to adjudicate interstate water disputes. Upon a state government's request, the central government can refer a dispute to a tribunal, composed of a chairperson and judges. The tribunal's decisions are binding on the parties involved.
• River Boards Act (1956): Establishes river boards for specific river basins to advise the central and state governments on water resource development and utilization. These boards act as consultative bodies, promoting cooperation and coordinated water management between states.
• The National Water Policy (2012): Although not a law, it outlines principles and guidelines for water management in India, including interstate water resources. It emphasizes equitable water distribution, basin-level planning, and efficient water use.

 

7. Arguments of both states

 

Punjab's Arguments

• Punjab argues that it is a water-stressed state with limited groundwater resources.
• Sharing its water with Haryana would adversely affect its agriculture, which is the backbone of its economy.
• The 1981 agreement was unfair and did not take into account Punjab's water scarcity.
• Completing the SYL Canal would lead to environmental degradation in Punjab.

 

Haryana's Arguments

• Haryana argues that it is a landlocked state with even less water than Punjab.
• It relies on Ravi and Beas water for irrigation and drinking water.
• The 1981 agreement was a fair and legal settlement that should be respected.
• Delaying the SYL Canal construction deprives Haryana of its rightful share of water.
• Punjab has sufficient water resources and can manage its water needs while sharing with Haryana.

 

8. Impact and Current Status of Dispute 

 

Impact

• The SYL Canal dispute has strained relations between Punjab and Haryana.
• It has led to protests, political tensions, and even violence.
• The dispute has also hindered economic development in both states.

Current Status

• The Supreme Court has recently ordered the Punjab government to start construction of the SYL Canal.
• Punjab has expressed its opposition to the order and is exploring legal options.
• The resolution of the dispute remains uncertain, with both states holding firm to their positions.

 

 

For Prelims: Yamuna River, Sutlej River, River Linking, Punjab, Haryana, Inter-state River Water Disputes Act, Rivers Board Act, Article 262, Article 245, Article 143, National Water Policy, Indus River, Ganga River   For Mains:  1. Critically analyze the longstanding Sutlej Yamuna Link Canal dispute between Punjab and Haryana. Discuss the historical context, legal aspects, and potential solutions to achieve a sustainable and equitable resolution. (250 Words)

 

 

Previous Year Questions   1. Consider the following tributaries of River Yamuna and arrange them from West to East: (UPSC 2020) 1. Betwa 2. Ken 3. Sindh 4. Chambal Select the correct answer from the codes given below. A. 4, 3, 1 and 2 B. 1, 2, 3 and 4 C. 3, 2, 1 and 4 D. 2, 3, 1 and 4     2. River Sutlej originates from (AFCAT 2013)  A. Northern slopes of the Kailash range B. Spring at Verinarg C. Rakshastal Lake D. Amarkantak plateau     3. Recently, linking of which of the following rivers was undertaken? (UPSC 2016) A. Cauvery and Tungabhadra        B. Godavari and Krishna C. Mahanadi and Sone D. Narmada and Tapti     4. Consider the following statements: (MPSC 2017) 1. According to Article 262 of the Indian Constitution, the Parliament may by law provide for the adjudication of interstate river water dispute. 2. Article 262 empowers the President of India to set up an interstate river water dispute tribunal. Select the incorrect statements:  A. 1 only        B. 2 only          C. Both 1 and 2           D. Neither 1 nor 2     5. Examine the following statements about the following articles of the Indian Constitution: (Telangana Police SI 2018) (a) Article 245 of the Indian Constitution states that the powers of both parliament and the state legislature are subject to the provisions of the Constitution. (b) If an accused person is directed to give his voice sample during the course of the investigation of an offense, there is no violation of his right under Article 20(1). Choose the correct answer: A. Both (a) and (b) are correct      B.  Both (a) and (b) are incorrect C. Only (a) is correct D. Only (b) is correct     6. As per Article 245 ________ is the function of Parliament (UPSSSC PET 2022)   A. Criticising Government B. Governing C. Law-making D. Collecting taxes     7. According to Article 143 of the constitution of India, the ________ has the power to consult the Supreme Court. (AAI ATC Junior Executive 2018) A. Speaker of the Lok Sabha B. Prime Minister of India C. Governor D. President of India   8. Consider the following statements: (UPSC 2010) The Supreme Court of India tenders advice to the President of India on matters of law or fact  1. on its own initiative (on any matter of larger public interest). 2. if he seeks such advice. 3. only if the matters relate to the Fundamental Rights of the citizens Which of the statements given above is/are correct?  A. 1 only             B. 2 only           C. 3 only             D. 1 and 2     9. If National Water Mission is properly and completely implemented, how will it impact the country?  (UPSC 2012)   1. Part of the water needs of urban areas will be met through recycling of waste-water. 2. The water requirements of coastal clues with inadequate alternative sources of water will be met by adopting appropriate technologies that allow for the use of ocean water. 3. All the rivers of Himalayan origin will be linked to the rivers of peninsular India. 4. The expenses incurred by farmers for digging bore-wells and for installing motors and pump-sets to draw ground-water will be completely reimbursed by the Government. Select the correct answer using the codes given below: A. 1 only    B. 1 and 2 only           C. 3 and 4 only          D. 1, 2, 3 and 4     10. With reference to the Indus river system, of the following four rivers, three of them pour into one of them which joins the Indus direct. Among the following, which one is such river that joins the Indus direct? (UPSC 2021)  A. Chenab        B. Jhelum         C. Ravi          D. Sutlej     11. The Indus river originates near: (UPRVUNL AE EE 2016)    A. Mansarovar          B. Gangotri            C. North Kashmir          D.  Siachen Glacier     12. Consider the following tributaries of river Ganga: (CDS GK  2018) 1. Gandak 2. Kosi 3. Ghaghara 4. Gomti Which of the following is the correct order of the above rivers from east to west?  A. 3-4-1-2 B. 2-1-3-4 C. 2-3-1-4 D. 1-2-4-3 Answers: 1-A, 2-C, 3-B, 4-B, 5-B, 6-C, 7-D, 8-B, 9-B, 10-D, 11-A, 12- B   Mains   1. Constitutional mechanisms to resolve the inter-state water disputes have failed to address and solve the problems. Is the failure due to structural or process inadequacy or both? Discuss. (UPSC 2013)

 

Source: The Indian Express

PRADHAN MANTRI KISAN SAMMAN NIDHI (PM-KISAN)

 

 

 

1. Context

 

 

With the number of PM-Kisan beneficiaries dropping by over 20 per cent to 8.12 crore now from a peak of 10.47 crore in April-July 2022, the government has added back 34 lakh farmers under the “saturation drive” since the launch of the Viksit Bharat Sankalp Yatra on November 15.

 

 

2. About Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)

 

 

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is a Central Sector scheme launched by the Government of India on 1 December 2018. The scheme provides income support of Rs. 6,000 per year to all landholding farmer families across the country, to supplement their financial needs for farm expenses.

Objective

The objective of the PM-KISAN scheme is to provide income support to all landholding farmer families across the country to supplement their financial needs for farm expenses. The scheme aims to:

• Increase the income of small and marginal farmers.
• Reduce the burden of debt on farmers.
• Improve the living standards of farmers.

Components

The main component of the PM-KISAN scheme is the provision of income support of Rs. 6,000 per year to all landholding farmer families. The amount is disbursed in three equal instalments of Rs. 2,000 each financial year.

The scheme is implemented through the Direct Benefit Transfer (DBT) system. The amount is transferred directly to the bank accounts of eligible farmers.

Eligibility

To be eligible for the PM-KISAN scheme, a farmer must meet the following criteria:

• Must be an Indian citizen.
• Must own cultivable land (as per land records).
• Must be a member of a farmer's family.

The following categories of beneficiaries of higher economic status shall not be eligible for benefits under the scheme.

1. All Institutional Landholders.
2. Farmer families which belong to one or more of the following categories:

• Former and present holders of constitutional posts
• Former and present Ministers/ State Ministers and former/present Members of LokSabha/ RajyaSabha/ State Legislative Assemblies/ State Legislative Councils,former and present Mayors of Municipal Corporations, former and present Chairpersons of District Panchayats.
• All serving or retired officers and employees of Central/ State Government Ministries /Offices/Departments and its field units Central or State PSEs and Attached offices /Autonomous Institutions under Government as well as regular employees of the Local Bodies
  (Excluding Multi Tasking Staff /Class IV/Group D employees)
• All superannuated/retired pensioners whose monthly pension is Rs.10,000/-or more
  (Excluding Multi Tasking Staff / Class IV/Group D employees) of above category
• All Persons who paid Income Tax in the last assessment year
• Professionals like Doctors, Engineers, Lawyers, Chartered Accountants, and Architects registered with Professional bodies and carrying out their profession by undertaking practices.

Implementation

The implementation of the PM-KISAN scheme is the responsibility of the state governments. The state governments are responsible for identifying and verifying the eligible beneficiaries, and for transferring the amount to their bank accounts.

The scheme has been well-received by farmers across the country. The scheme has helped to improve the income and living standards of small and marginal farmers.

Impact

The PM-KISAN scheme has had a positive impact on the lives of small and marginal farmers across the country. The scheme has helped to:

• Increase the income of small and marginal farmers.
• Reduce the burden of debt on farmers.
• Improve the living standards of farmers.

The scheme has also helped to boost the rural economy. The additional income has been used by farmers to invest in their farms, which has led to increased agricultural production.

 

3. Central Sponsored Schemes (CSS)

 

A Central Sponsored Scheme (CSS) is a program in India where the central government bears a part of the expenditure, while the remaining share is borne by the state government. The central government plays a crucial role in designing the policy framework and guidelines, while the state governments are responsible for implementing the scheme within their respective territories.

Key characteristics of CSS

• Shared funding: Central and state governments contribute to the scheme's total cost, typically with the central government bearing a larger portion (often ranging from 50% to 90%).
• Central guidelines: The central government establishes the overall policy framework, objectives, and operational guidelines for the scheme.
• State implementation: State governments are responsible for implementing the scheme on the ground, adapting it to local conditions within the framework set by the centre.
• Joint monitoring: Both central and state governments monitor the implementation of the scheme and track progress towards achieving its objectives.

 

4. The difference between a central sector scheme and a centrally sponsored scheme

 

Central Sector Schemes (CSS) and Centrally Sponsored Schemes (CSS) are both types of government initiatives in India, but they differ in their funding mechanisms, control, and implementation. 

 

Features	Central Sector Scheme	Centrally Sponsored Scheme
Funding Source	Central Government only	Central & State Governments (shared)
Financial Responsibility	Central Government bears all costs	Shared burden with central government contributing more
Control	Central Government has complete control	Central government leads, but state government has implementation role
Implementation	Central government agencies or departments	State government executes at ground level
Objectives	National priorities and overarching goals	Collaborative effort addressing regional or state-specific needs
Flexibility	More adaptable to national priorities	More adaptable to regional or state-specific needs

 

 

 

 

For Prelims: PM-Kishan, Central Sponsored Scheme, Central Sector Scheme, Viksit Bharat Sankalp Yatra For Mains:   1. Examine the role of state governments in the implementation of PM-KISAN. How can their efforts be enhanced to improve targeting, transparency, and efficiency in fund distribution? (250 Words) 2. Analyze the recent decline in PM-KISAN beneficiaries and the government's efforts to increase enrollment. Discuss the effectiveness of the "saturation drive" and potential strategies for further improvement.  (250 Words)

 

 

Previous Year Questions   1. Read the following statements about the 'PM-KISAN' scheme: (Telangana Police SI Mains 2018) a. The 'Pradhan Mantri Kisan Samman Nidhi' (PM-KISAN) scheme was introduced by the government of India in its interim Budget 2019. b. The scheme took effect from January 1, 2019. c. The scheme aims at supplementing the financial needs of marginal and small farmers procuring various inputs to ensure proper farm income. d. A family comprising of husband, wife and minor children who collectively own cultivable land upto 2 hectares as per land records shall be provided a benefit of Rs. 6,000 per annum per family. Choose the correct statements: A.  a, c and d only         B.  b and d only       C.  a, b and c only          D.  b, c and d only   Answer: A   2. Which of the following is a centrally sponsored scheme to empower adolescent boys? (SSC JE EE 2018)  A. AKSHAY          B. SAKSHAM             C. SABLA             D. UJJWALA   Answers: 1-A, 2-B

 

 

Source: The Indian Express

 

NON PERFORMING ASSET (NPA)

 

 

 

1. Context

The gross non-performing asset (GNPA) ratio of scheduled commercial banks (SCBs) fell to 3.2 per cent at end-September from 3.9 per cent at end-March, a Reserve Bank of India (RBI) report

 

2. What is a Non-Performing Asset (NPA)?

A Non-Performing Asset (NPA) refers to a classification used by financial institutions, primarily banks, to categorize loans or advances that are in default or are in arrears on scheduled payments of principal or interest. In simpler terms, when a borrower fails to make interest or principal payments for a certain period of time, typically 90 days or more past the due date, the loan is classified as a non-performing asset.

NPAs are detrimental to banks and financial institutions as they indicate a risk of default and can lead to financial losses. These assets can hamper the lender's ability to generate income through interest and can also impact their capital adequacy and liquidity.

Financial institutions employ various strategies to manage and recover NPAs, such as restructuring loans, loan recovery processes, selling off bad debts to asset reconstruction companies, or writing off the non-recoverable amount from their books

3. NPA (Non-Performing Assets) –Classifications

Non-performing assets (NPAs) are classified based on the period for which the loan remains overdue and the likelihood of recovery. The classifications typically involve three categories:

1. Substandard Assets: These are assets that have remained non-performing for less than or equal to 12 months. They are characterized by the bank or financial institution experiencing a potential loss if full repayment occurs. Substandard assets have a higher risk of turning into bad loans.

2. Doubtful Assets: These assets have remained in the non-performing category for more than 12 months. There is a significant risk associated with these assets, where the full repayment of the loan is highly uncertain. However, there might still be some potential, albeit remote, for recovery.

3. Loss Assets: When the assets' loss has been identified by the bank or financial institution or an external auditor, and these assets have very little chance of recovery, they are classified as loss assets. These assets are considered uncollectible and of such little value that their continuance as assets is not warranted, and the entire outstanding balance is written off.

These classifications are crucial for banks and financial institutions to assess the health of their loan portfolios and take appropriate measures to manage and mitigate risks associated with NPAs

4. What is the difference between Bank fraud and Non-Performing Assets (NPA’s)?

Bank fraud and Non-Performing Assets (NPAs) are two distinct issues in the banking sector, although they can sometimes be interconnected.

Bank Fraud: Bank fraud involves deliberate deception or dishonest actions carried out by individuals or groups, intending to gain an unfair or unlawful advantage, causing financial loss to the bank or its customers. Fraud can take various forms, such as embezzlement, forgery, loan fraud, identity theft, money laundering, or manipulating financial statements. It's essentially a criminal act involving deceit, misrepresentation, or illegal activities that lead to financial losses for the bank.

Non-Performing Assets (NPAs): NPAs refer to loans or advances that have stopped generating income for the bank because the borrower has defaulted on repayment. When a borrower fails to pay interest or principal for a specified period, typically 90 days or more, the loan is classified as an NPA. NPAs can arise due to various reasons such as economic downturns, borrower insolvency, mismanagement, or inadequate risk assessment by the lending institution.

While these issues are distinct, there can be situations where bank fraud contributes to the creation of NPAs. For instance, if a fraudulent loan is issued based on false documents or misrepresented information, it might result in the borrower defaulting on payments, eventually turning the loan into an NPA

5. What are the impacts of Non-Performing Assets (NPA)

Non-Performing Assets (NPAs) can have significant impacts on banks, the economy, and the overall financial ecosystem.

Here are some of the key effects:

• NPAs erode a bank's profitability as they stop generating income through interest payments. This affects the bank's ability to lend further and impacts its overall financial health. A high level of NPAs can weaken a bank's capital base, affecting its ability to absorb losses and maintain stability
• Banks with high NPAs become cautious about lending, especially to risky sectors or borrowers, leading to a credit crunch. This restricted lending can hamper economic growth as businesses and individuals find it challenging to secure credit for expansion or investment
• High NPAs can dent depositor and investor confidence in the banking system. Customers might withdraw deposits or shift to more stable institutions, causing liquidity issues for the affected bank
• NPAs can have broader economic repercussions. When banks face financial strain due to NPAs, their ability to support economic growth through lending diminishes. This can affect employment, investments, and overall economic development
• Regulators monitor and impose stricter norms on banks with high levels of NPAs to ensure financial stability. Banks might face regulatory penalties or restrictions, impacting their operations and growth prospects
• Banks might need additional capital infusion to cover the losses arising from NPAs. This can strain the bank's resources or necessitate seeking external funding, impacting shareholders and overall financial planning

6. Measures to control Non-Performing Assets (NPA)

Controlling Non-Performing Assets (NPAs) is crucial for the financial health of banks and the stability of the financial system. Several measures can be implemented to manage and control NPAs effectively:

Prudent Lending Practices: Implementing robust credit appraisal and risk assessment mechanisms before disbursing loans can prevent potential NPAs. Thoroughly evaluating borrower creditworthiness, financial stability, and collateral can mitigate risks.

Early Detection and Monitoring: Early identification of potential NPAs is crucial. Banks should closely monitor repayment schedules and intervene at the first signs of distress. Timely action can prevent assets from slipping into the NPA category.

Loan Restructuring and Rescheduling: Offering viable borrowers alternative repayment structures can help them meet their obligations. Loan restructuring involves altering repayment terms, interest rates, or extending the tenure to make repayments more manageable.

Asset Quality Review (AQR): Conducting regular asset quality reviews helps in identifying stressed assets early on. This enables banks to take proactive measures to prevent assets from turning into NPAs.

Asset Reconstruction Companies (ARCs): Collaborating with ARCs allows banks to transfer NPAs to specialized entities that focus on recovering these assets. It helps banks clean up their balance sheets and concentrate on core operations.

Strengthening Recovery Mechanisms: Banks should have robust recovery mechanisms in place, including legal recourse and debt recovery tribunals, to expedite the recovery of NPAs. Effective recovery minimizes losses for the bank.

Loan Recovery through Securitization and Asset Sale: Selling NPAs to other entities or securitizing them can provide liquidity and reduce the burden on banks. However, this should be balanced with ensuring fair value realization.

Prudential Norms and Regulatory Compliance: Adhering to prudential norms set by regulatory authorities helps in maintaining healthy asset quality. Compliance with regulations ensures timely recognition and provisioning for NPAs.

Debt Recovery Tribunals (DRTs) and SARFAESI Act: Utilizing legal mechanisms like DRTs and the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act expedites the recovery process and acts as a deterrent against defaulting borrowers

7. Way forward

Implementing these measures collectively and consistently can aid in controlling NPAs, maintaining a healthy loan portfolio, and preserving the stability of the banking sector.

 

For Prelims: Current events of Economy in Indian Scenario, RBI measurement to Control Non Performing Assets (NPAs) For Mains: General Studies III: Non Performing Asset (NPAs), Bad Bank

 

Previous Year Questions 1.Consider the following statements: Non-performing assets (NPAs) decline in value when (UPSC ESE 2018) 1. Demand revives in the economy. 2. Capacity utilization increases. 3. Capacity utilization, though substantive, is yet sub-optimal. 4. Capacity utilization decreases consequently upon merger of unit. Which of the above statements are correct? A.1, 3 and 4 only B.1, 2 and 4 only C.1, 2 and 3 only D.1, 2, 3 and 4 Answer (C)

Source: Indianexpress

PARTICULARLY VULNERABLE GROUPS (PVTG)

 

 

1. Context

On November 29 2023, the Union Cabinet approved the Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan (PM JANMAN), aimed at providing PVTG households and habitations with basic facilities such as safe housing, clean drinking water and sanitation, improved access to education, health and nutrition, road and telecom connectivity, and sustainable livelihood opportunities

 

2.Who are Particularly Vulnerable Tribal Groups (PVTG)?

 

• Particularly Vulnerable Tribal Groups (PVTGs) are specific indigenous communities in India that face an exceptionally high risk of vulnerability and marginalization due to various factors like geographic isolation, social and economic deprivation, and historical injustices.
• These groups are identified based on criteria set by the Indian government, considering their unique cultural practices, distinct languages, and social customs that set them apart from the larger population.
• PVTGs receive special attention and support from government agencies and NGOs to protect their distinct identities, preserve their cultural heritage, improve their living conditions, and ensure their socio-economic development. Various welfare schemes and initiatives are directed towards these groups to address their specific needs, including access to healthcare, education, livelihood opportunities, land rights, and basic amenities. The aim is to empower these communities while respecting their traditions and way of life
• The actual number of PVTGs is around 63, accounting for overlaps and repetitions, as per the publication ‘The Particularly Vulnerable Tribal Groups of India — Privileges and Predicaments’ by the Anthropological Survey of India
• Baseline surveys have only been conducted for about 40 PVTG groups, emphasising the need for targeted development planning.
• In India, the identification and declaration of Particularly Vulnerable Tribal Groups (PVTGs) is done by the Ministry of Tribal Affairs at the national level, in collaboration with state governments. The identification process involves specific criteria and guidelines set by the government to assess the vulnerability and distinctiveness of tribal communities
• Odisha (formerly Orissa) in India is known to have the highest number of Primitive Tribal Groups (PTGs). This state is home to a significant population of indigenous or tribal communities, some of which are categorized as Primitive Tribal Groups due to their isolated lifestyle, unique cultural practices, and historical marginalisation.

 

3. What are the challenges in PVTG development?

The development of Particularly Vulnerable Tribal Groups (PVTGs) faces several challenges, primarily due to their unique circumstances, cultural isolation, historical marginalization, and specific vulnerabilities.

Some of the key challenges include:

• Many PVTGs reside in remote and geographically isolated areas, which pose challenges in terms of accessibility for delivering essential services like healthcare, education, and infrastructure development
• PVTGs often face economic deprivation, lack of livelihood opportunities, and limited access to resources. Poverty and inadequate infrastructure exacerbate their challenges
• Balancing the preservation of their distinct cultural identities and traditions with the need for socio-economic development poses a challenge. Development interventions must be culturally sensitive and respect their traditional practices
• PVTGs frequently experience health disparities and inadequate access to healthcare facilities. Malnutrition and lack of awareness about modern healthcare practices are common concerns
• Limited access to quality education due to factors like language barriers, lack of schools in remote areas, and cultural differences hampers educational development among PVTGs
• Disputes over land rights and lack of secure land tenure affect their livelihoods. Encroachment on their traditional lands and displacement due to development projects further exacerbate these challenges
• PVTGs are vulnerable to exploitation due to their marginalized status. They often face social discrimination, human rights violations, and exploitation in labor and other spheres

4.Government's Approach in addressing the Issues

 

• Participatory approach from the grassroots level: Rather than a standardized approach, the program tailors strategies to suit the unique requirements of PVTGs, actively engaging them in decision-making related to land rights, social integration, and cultural conservation. This method, rooted in community involvement, embraces their customs, beliefs, and traditions, ensuring their active involvement in the planning, execution, and oversight of development endeavors.
• Enhancing livelihoods: Empowering through skill-building programs and providing resources such as land and credit facilitates sustainable livelihoods. Implementation of the Forest Rights Act, specifically Section 3(1)(e) for the rights of primitive tribal groups and pre-agricultural communities, secures their access to forest resources. Encouraging traditional techniques and skill enhancement via partnerships with industries contributes to preserving cultural heritage alongside sustainable progress.
• Health, nutrition, and education focus: Deploying outreach methods like Mobile Medical Health Units becomes imperative in remote regions. Tailoring these strategies to address specific health concerns like teenage pregnancies and dental health, and bridging language and cultural gaps through trained healthcare personnel or recruiting community members is vital. Collaborating with trusted traditional healers can also assist in addressing intricate health challenges.
• Incorporating their language and culture into educational curricula, offering transportation services, and training educators about PVTG cultural contexts enhance educational accessibility. Additionally, incentivizing staff working in PVTG areas and establishing specialized educational institutions catering to PVTG needs can augment opportunities for these communities.
• Infrastructure development challenges: The settlements of PVTGs often fail to meet requirements for schemes like the Pradhan Mantri Grameen Sadak Yojana, Pradhan Mantri Awas Yojana, and Jal Jeevan Mission due to factors like population thresholds or insufficient surveys

5.What schemes have been floated for PVTG?

 

Several schemes and initiatives have been introduced by the Indian government to address the needs and uplift the living standards of Particularly Vulnerable Tribal Groups (PVTGs). Some of these schemes include:

• Vanbandhu Kalyan Yojana: Launched by the Ministry of Tribal Affairs, this scheme aims to improve the socio-economic status of tribal communities, including PVTGs, by focusing on areas like education, healthcare, livelihood, and infrastructure development.

• Scheduled Tribes Component (STC): Under this scheme, funds are allocated to states to implement various development programs for tribal communities, including PVTGs. These funds support initiatives related to education, health, housing, and skill development.

• Special Central Assistance to Tribal Sub-Schemes (SCA to TSS): This scheme provides financial assistance to tribal development projects, including those focused on PVTGs, aimed at their socio-economic empowerment.

• Forest Rights Act (FRA): Implementation of the Forest Rights Act is crucial for securing land and resource rights for tribal communities, including PVTGs, allowing them access to forest resources and improving their livelihoods.

• Eklavya Model Residential Schools (EMRS): EMRS aims to provide quality education to tribal children, including those from PVTGs, by establishing residential schools with modern facilities and educational resources.

• Integrated Tribal Development Agencies (ITDAs): These agencies work on comprehensive development plans for tribal areas, including PVTG regions, focusing on education, healthcare, infrastructure, and livelihood promotion.

• Tribal Sub-Plan (TSP) and Tribal Development Blocks (TDBs): These plans and blocks are dedicated to tribal development, including PVTGs, ensuring targeted allocation of funds for their socio-economic upliftment

6. Way forward

 

A 2014 report by Dr. Hrusikesh Panda, Secretary of the Ministry of Tribal Affairs, and a 2015 report by Virginius Xaxa highlighted these concerns. The actual number of PVTGs is around 63, accounting for overlaps and repetitions, as per the publication ‘The Particularly Vulnerable Tribal Groups of India — Privileges and Predicaments’ by the Anthropological Survey of India

 

 

For Prelims: Indian Polity and Governance-Constitution, Political System, Panchayati Raj, Public Policy, Rights Issues, etc. For Mains: General Studies II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation

 

Previous Year Questions 1. Consider the following statements about Particularly Vulnerable Tribal Groups (PVTGs) in India:  (UPSC 2019) 1. PVTGs reside in 18 States and one Union Territory. 2. A stagnant or declining population is one of the criteria for determining PVTG status. 3. There are 95 PVTGs officially notified in the country so far. 4. Irular and Konda Reddi tribes are included in the list of PVTGs. Which of the statements given above are correct? A. 1, 2 and 3             B.  2, 3 and 4               C. 1, 2 and 4               D. 1, 3 and 4 Answer: C 2. With reference to the history of India, "Ulgulan" or the Great Tumult is the description of which of the following events? (UPSC 2020) A. The Revolt of 1857 B. The Mappila Rebellion of 1921 C. The Indigo Revolt of 1859 - 60 D. Birsa Munda's Revolt of 1899 - 1900 Answer: D 3. When did the Tana’ Bhagat Movement start?  (Jharkhand Civil Service 2015)  A. April 1912             B. April 1913     C.  April 1914          D.  April 1915   Answer: C   4. Consider the following statements about the Santhal Hool of 1855 - 56: (UPSC CAPF) 1. The Santhals were in a desperate situation as tribal lands were leased out 2. The Santhal rebels were treated very leniently by British officials 3. Santhal inhabited areas were eventually constituted separate administrative units called Santhal parganas 4. The Santhal rebellion was the only major rebellion in mid-19th century India. Which of the statements given above is/are correct?  A. 1 only         B. 2 and 3    C. 1, 3 and 4     D. 1 and 3 only   Answer: D     5. After the Santhal Uprising subsided, what was/were the measure/measures taken by the colonial government? (UPSC 2018) 1. The territories called 'Santhal Paraganas' were created. 2. It became illegal for a Santhal to transfer land to a non-Santhal. Select the correct answer using the code given below: A. 1 only          B.  2 only             C. Both 1 and 2         D. Neither 1 nor 2   Answer: C   6. The National Commission for Backward Classes (NCBC) was formed by insertion of Article ______ in the Constitution of India. (SSC CGL 2020)  A. 328B         B.  338A            C. 338B            D. 328A   Answer: B     7. With reference to the Parliament of India, which of the following Parliamentary Committees scrutinizes and reports to the House whether the powers to make regulations, rules, sub-rules, by-laws, etc. conferred by the Constitution or delegated by the Parliament are being properly exercised by the Executive within the scope of such delegation? (UPSC  2018)   A. Committee on Government Assurances B. Committee on Subordinate Legislation C. Rules Committee D. Business Advisory Committee   Answer: B   8. Justice Madan B Lokur committee was set up to take steps to (Haryana Civil Services 2021) A. Look into violation of environment rules. B. Prevent stubble burning C. Draft new water policy D. Regulate digital lending   Answer: B   9. Match the pairs -  (Committees on Media) (MPSC 2019) (A) (Name)                                    (B) (Year) (a) Chanda Committee                   (i) 1982 (b) Kuldip Nayar Committee        (ii) August, 1977 (c) Verghese Committee               (iii) March, 1977 (d) P.C. Joshi Committee              (iv) 1964   1. (a) – (i), (b) – (ii), (c – (iii), (d) – (iv) 2. (a) – (i), (b) – (iii), (c – (ii), (d) – (iv) 3. (a) – (iv), (b) – (iii), (c – (ii), (d) – (i) 4. (a) – (iv), (b) – (ii), (c – (iii), (d) – (i)   Answer: 3   10. Consider the formation of the following States and arrange these in chronological order :  (UPPSC Combined State Exam 2021) 1. Goa 2. Telangana 3. Jharkhand 4. Haryana Select the correct answer from the codes given below. A. 1, 2, 3, 4       B. 4, 1, 3, 2       C. 3, 2, 4, 1          D. 4, 3, 1, 2   Answer: 2

 

Source: Indianexpress