geography

Arctic Region and Arctic Council

The Arctic is a polar region located at the northernmost part of Earth.

8 Jul, 2020

BRAHMAPUTRA AND ITS TRIBUTARIES

About Brahmaputra River: The Brahmaputra called Yarlung

3 Jul, 2020
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    Current Affairs – 17th September 2021

    1.    BAD BANK

    • News: Paving the way for a major clean-up of bad loans in the banking system, the Cabinet on Wednesday cleared a ₹30,600 crore guarantee programme for securities to be issued by the newly incorporated ‘bad bank’ for taking over and resolving non-performing assets (NPAs) amounting to ₹2 lakh crore.
    • Details:
      • The Reserve Bank of India is in the process of granting a licence for the National Asset Reconstruction Company Limited (NARCL), following which toxic assets worth ₹90,000 crore that banks have already fully provided for will move to the NARCL.
      • The Cabinet’s decision, to extend a five-year guarantee for NARCL-issued security receipts to banks, completed the entire cycle of cleaning up India’s banking system that began with the recognition of the extent of bad loans in 2015.
      • Under the mechanism, the NARCL will acquire assets by making an offer to the lead bank. Private sector asset reconstruction firms (ARCs) may also be allowed to outbid the NARCL.
      • Separately, public and private lenders would combine forces to set up an India Debt Resolution Company (IDRC) that would manage these assets and try to raise their value for final resolution.
      • The NARCL will purchase bad loans from banks under a 15:85 structure, where it will pay up to 15% of the net asset value in cash and issue Security Receipts (SRs) for the rest. The government guarantee would be invoked if there is loss against the threshold value. A 15% cash payment would be made to the banks based on some valuation and the rest will be given as security receipts. For those to hold on and have their value intact, there is a need for the government to give a back-stop arrangement and that is why this ₹30,600 crore has been cleared by the Cabinet.
      • Once the NARCL and the IDRC have finally resolved the asset, preferably as a going concern and not through liquidation proceedings, the Minister said the balance 85% held as security receipts would be given to the banks.
      • Government guarantee will be invoked to cover the shortfall between the amount realised from the underlying assets and the face value of SRs issued for that asset, subject to overall ceiling of ₹30,600 crore, valid for 5 years. Since there shall be a pool of assets, it is reasonable to expect that realisation in many of them will be more than the acquisition cost.
    • About NARCL:
      • NARCL has been incorporated under the Companies Act and has applied to Reserve Bank of India for license as an Asset Reconstruction Company (ARC).
      • NARCL has been set up by banks to aggregate and consolidate stressed assets for their subsequent resolution.
      • PSBs will maintain 51% ownership in NARCL.
    • About IDRCL:
      • IDRCL is a service company/operational entity which will manage the asset and engage market professionals and turnaround experts.
      • Public Sector Banks (PSBs) and Public FIs will hold a maximum of 49% stake and the rest will be with private sector lenders.
    • Need for a Bad bank:
      • It will incentivize quicker action on resolving stressed assets thereby helping in better value realization.
      • This approach will also permit freeing up of personnel in banks to focus on increasing business and credit growth.
      • As the holders of these stressed assets and SRs, banks will receive the gains.
      • Further, it will bring about improvement in bank’s valuation and enhance their ability to raise market capital.

    2.    NATIONAL COMPANY LAW TRIBUNAL

    • News: After a brief impasse with the Supreme Court on Thursday, the Central government agreed, as a one-off measure, to reinstate Justice A.I.S Cheema as Acting Chairperson of the National Company Law Appellate Tribunal (NCLAT) till his retirement on September 20 so that he can pronounce the judgments pending with him.
    • About National Company Law Tribunal:
      • The National Company Law Tribunal is a quasi-judicial body in India that adjudicates issues relating to Indian companies.
      • The tribunal was established under the Companies Act 2013 and was constituted on 1 June 2016 by the government of India and is based on the recommendation of the V. Balakrishna Eradi committee on law relating to the insolvency and the winding up of companies.
      • All proceedings under the Companies Act, including proceedings relating to arbitration, compromise, arrangements, reconstructions and the winding up of companies shall be disposed off by the National Company Law Tribunal.
      • The NCLT bench is chaired by a Judicial member who is supposed to be a retired or a serving High Court Judge and a Technical member who must be from the Indian Corporate Law Service, ICLS Cadre.
      • The National Company Law Tribunal is the adjudicating authority for the insolvency resolution process of companies and limited liability partnerships under the Insolvency and Bankruptcy Code, 2016.
      • No criminal court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal.
      • The National Company Law Tribunal has the power under the Companies Act to adjudicate proceedings:
      • Initiated before the Company Law Board under the previous act (the Companies Act 1956);
      • Pending before the Board for Industrial and Financial Reconstruction, including those pending under the Sick Industrial Companies (Special Provisions) Act, 1985;
      • Pending before the Appellate Authority for Industrial and Financial Reconstruction; and
      • Pertaining to claims of oppression and mismanagement of a company, winding up of companies and all other powers prescribed under the Companies Act.

    3.    GOODS AND SERVICES TAX

    • News: The Goods and Services Tax (GST) Council has a packed agenda when it convenes here on Friday, with well over a dozen weighty issues for its consideration, including the extension of tax relief granted for COVID-19 related essentials and initiating talks on bringing petroleum products under the GST regime.
    • Details:
    • The council, which will hold its first physical meeting since the onset of the pandemic, is also likely to consider levying GST on food delivery apps and take up a proposed rejig of tax rates on items such as footwear and textiles that has been kept on hold for over a year.
    • The demand of some States, including the host State Uttar Pradesh, to introduce a new tax system for industries such as brick kilns, gutkha and paan masala, and sand mining, based on production capacity instead of actual output, may also be taken up at least for one or two of these sectors. Instances of tax evasion in these sectors have been quite rampant.
    • Some States, including Kerala, are expected to seek an extension of the five-year compensation period for implementing GST that expires next June and raise concerns about their revenue constraints since the tax was introduced in 2017.
    • About Goods and Services Tax:
      • Period of compensation: Compensation will be provided to a state for a period of five years from the date on which the state brings its State GST Act into force.
      • Projected growth rate and base year:  For the purpose of calculating the compensation amount in any financial year, year 2015-16 will be assumed to be the base year, from revenue will be projected.  The growth rate of revenue for a state during the five-year period is assumed be 14% per annum.
      • Base year revenue: The base year tax revenue consists of the states’ tax revenues from: (i) state Value Added Tax (VAT), (ii) central sales tax, (iii) entry tax, octroi, local body tax, (iv) taxes on luxuries, (v) taxes on advertisements, etc.  However, any revenue among these taxes arising related to supply of (i) alcohol for human consumption, and (ii) certain petroleum products, will not be accounted as part of the base year revenue.
      • Calculation and release of compensation: The compensation payable to a state has to be provisionally calculated and released at the end of every two months.  Further, an annual calculation of the total revenue will be undertaken, which will be audited by the Comptroller and Auditor General of India.
      • Levy and compensation of GST compensation cess: A GST Compensation Cess may be levied on the supply of certain goods and services, as recommended by the GST Council.  The receipts from the cess will be deposited to a GST Compensation Fund.  The receipts will be used for compensating states for any loss due to the implementation of GST.
      • The cess will be capped at: (i) 135% for pan masala, (ii) Rs 400 per tonne for coal, (iii) Rs 4,170 + 290% per 1,000 sticks of tobacco, and (iv) 15% for all other goods and services including motor cars and aerated water.
      • Any unutilised money in the Compensation Fund at the end of the compensation period will be distributed in the following manner: (i) 50% of the fund to be shared between the states in proportion to revenues of the states, and (ii) the remaining 50% will be part of the centre’s divisible pool of taxes.

    4.    UNSC RESOLUTION 1172

    • News: China on Thursday cited a United Nations Security Council (UNSC) resolution issued after the 1998 nuclear tests to question India’s missile programme amid reports of an upcoming test for the Agni-V intercontinental ballistic missile.
    • About United Nations Security Council Resolution 1172:
      • United Nations Security Council resolution 1172, adopted unanimously on 6 June 1998, after hearing of nuclear tests conducted by India and Pakistan in May 1998, the Council condemned the tests and demanded that both countries refrain from engaging in further tests.
      • The Security Council began by stating that all the proliferation of nuclear weapons posed a threat to international peace and security.
      • It was concerned at the tests conducted by India and Pakistan and of a potential arms race in South Asia.
      • The importance of the Nuclear Non-Proliferation Treaty (NPT), the Comprehensive Nuclear-Test-Ban Treaty (CTBT) and the dismantling of nuclear weapons was emphasised.