Daily News Analysis - by Jatin Verma 13Th January, 2020
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Summary of Daily News Analysis - by Jatin Verma 13th January, 2020 https://www.jatinverma.org P a g e | 1 ©Jatin Verma All Rights Reserved. https://www.jatinverma.org P a g e | 2 Important News Articles Polity & Governance related issues - G.S. Mains Paper-2 Page-1: Tripura HC says social media posting a fundamental right Page-1: SC rebuffs plea to implement CAA Page-1: U.P. govt. suspends Noida SSP over objectionable video Page-7: Nation: U.P. tops list in crimes against women Page-13: SBI to sell electoral bonds from January 13 [Transparency in Politics] ©Jatin Verma All Rights Reserved. https://www.jatinverma.org P a g e | 3 Important News Articles Economy & Internal Security related issues - G.S. Mains Paper-3 Page 15 : No ‘word play’ in health insurance policies: IRDAI Indian Express : Government plans to set up Credit Enhancement fund to boost infrastructure projects Indian Express : As Bharat Net flounders at last mile connectivity, DoT dials the private sector ©Jatin Verma All Rights Reserved. https://www.jatinverma.org P a g e | 4 Important News Articles Environment & Ecology & Sci-Tech - G.S. Mains Paper-3 Page 12 : India to acquire 200 fighter jets for Air Force: Defence Secretary Page 9 : LCA Navy variant successfully lands on INS Vikramaditya Page 9 : New method better estimates melting of debris-covered Himalayan glaciers Page 13 : Species-rich forests offer stable carbon capture PIB Workshop-cum-exhibition on "Bamboo- A wonder grass" concludes in Jammu ©Jatin Verma All Rights Reserved. https://www.jatinverma.org P a g e | 5 ©Jatin Verma All Rights Reserved. https://www.jatinverma.org P a g e | 6 Indian Economy G.S. Mains Paper-3 No ‘word play’ in health insurance policies: IRDAI What is Curative petition? ● Health insurance policy clauses will soon be easier to comprehend. ● It will become more transparent and not vary across companies. ● The regulator IRDAI will soon set in motion the process towards bringing “uniformity” in wordings of the contracts. ● It is proposed to standardise some of the general clauses that are commonly incorporated in the health insurance policy contracts of indemnity-based health products. ● One of the key aspects under the proposed guidelines on ‘Standardisation of General Clauses in Health Insurance Policy Contracts’ will be insurers committing to a timeline in handling claims and in the event of failure to comply, pay interest to the policyholder. ● The policy shall be void and all premium paid thereon shall be forfeited to the company in the event of misrepresentation, mis-description or non-disclosure of any material fact. ● Uniformity in wordings have been proposed by IRDAI with regard to complete discharge, multiple policies, cancellation, renewal of policy, including the company not being bound to give any notice for renewal, as well as migration and portability. According to IRDAI’s annual report for 2018-19: ● The proposed guidelines assume significance in the backdrop of robust growth in the segment. ● Health insurance premium continues to grow over 20% year-on-year in the past four fiscal years. ● General and health insurance companies collected ₹44,873 crore as health insurance premium last fiscal or 21.2% higher compared to 2017-18. ● Share of group health insurance was the highest, in 2018-19, at 48%, followed by individual business at 39% and government business the remaining 13%. ● Both individual and group businesses (other than government schemes) have doubled during the last five year period. Issue with Health insurance policy: ● The importance of health insurance can’t be stressed enough. ● But with so much choice and with varying policy exclusions, it’s often difficult for customers to bring home a product she understands well. ● There is no standardising policy exclusions and also confusion with comparisons and understanding. ● Prelims Reckoner: Difference between Insurance Penetration and Insurance Density? ● insurance penetration measures the contribution of insurance premium to the Gross Domestic Product (GDP) of a country in percentage terms. ©Jatin Verma All Rights Reserved. https://www.jatinverma.org P a g e | 7 ● Insurance density, on the other hand, is the ratio of insurance premium to the total population. ● It gives an indication of how much each of the people in a country spends on insurance in terms of premium. ● In other words, it is the per capita premium for the country, calculated by dividing the total insurance premium by the population. ©Jatin Verma All Rights Reserved. https://www.jatinverma.org P a g e | 8 Indian Express : Government plans to set up Credit Enhancement fund to boost infrastructure projects ● The government plans to set up a Credit Enhancement fund to support infrastructure projects that are rated below ‘AA’. ● Purpose: The fund will provide credit enhancement to such lower rated projects, enabling them to raise loans at better rates while improving their viability. ● The idea is to either set up a professionally managed credit enhancement fund or a well capitalised institution for the same purpose. ● Since institutional investors put in money only in top rated infrastructure projects, augmenting ratings of projects that are otherwise viable but do not have early cash flows, would help in attracting investors. ● Present status: ● Most of the infrastructure projects are rated below ‘AA’, which essentially means large institutions do not fund such projects. ● Through credit enhancement, a borrower or a bond issuer tries to improve its credit worthiness, which helps in lowering interest outgo. ● The collapse of Infrastructure Leasing & Financial Services (IL&FS) has created a funding void in the infrastructure sector, with many projects facing uncertainties and rating downgrades. ● Apart from resulting in liquidity shortage last year and affecting NBFCs, the IL&FS fiasco has had a negative impact on funding availability for long duration infra projects. ● Significance: What difference would be created with the setting up of Credit enhancement Guarantee Fund? ● A Credit Enhancement fund provides partial guarantee against loan losses to the lenders, enabling the borrower to enhance its credit ratings. ● Such a facility can be provided to projects that have strong viability and visibility but the companies executing them presently have weak balance sheet or cash flows, which is usually the case for infra projects where revenues start accruing in later years. ● The Credit Enhancement fund will enable lower rated projects to raise loans at better rates while improving their viability. ● Since institutional investors put in money only in top-rated infrastructure projects, augmenting ratings of projects that are otherwise viable, but do not have early cash flows, would help in attracting investors. ©Jatin Verma All Rights Reserved. https://www.jatinverma.org P a g e | 9 Steps taken by government to augment the Infrastructure capacities: ● The agency providing the facility usually charges a fee for providing its services. ● A Finance Ministry panel that recently finalised the National Infrastructure Pipeline has also made the case for credit enhancement facility for infra projects, along with the need to channelise pension and insurance funds’ money into the infrastructure sector. ● The Finance Ministry, last month, unveiled Rs 102 lakh crore of infrastructure projects that will be implemented between fiscal year 2020 and 2025, with the central government contributing nearly 39 per cent towards these projects, states accounting for another 39 per cent and the private sector 22 per cent. ● Of the total project capital expenditure during fiscals 2020 to 2025, sectors such as energy (24 per cent), urban (16 per cent), railways (13 per cent) and roads (19 per cent) are estimated to account for more than 70 per cent of the projected infrastructure investments in India. Indian Express As BharatNet flounders at last mile connectivity, DoT dials the private sector - About Bharatnet ● The central government’s flagship BharatNet scheme, which aims to provide last mile internet connectivity to all villages and gram panchayats (GP), has missed the targets set for phase one. ● With connectivity targets set for phase two of the project also likely to be missed owing to current delays, the government is now attempting to rope in the private sector to cover up for the failings of implementing agencies. ● As against the initial target for connecting all the 2.50 lakh GPs by end of March 2019, only 1.18 lakh had been connected till then. ● Of the 1.26 lakh GPs that have been made service ready so far, WiFi hotspots are functional only in 15,000. ● The plan to provide fibre to the home (FTTH) connectivity is operational only at 27,856 GPs till end-December. Challenges- ● “Affordability and fair pricing” is likely to change if the private players have their way. ● The Department of Telecommunications (DoT) — the nodal agency for implementation of the project — has blamed the network architecture, the connectivity to old BSNL fibre in part of the network operation and maintenance through BSNL as some of the reasons which had held back optimal utilisation of the network. ● The financial reconciliation of work done so far under phase one of BharatNet, is still pending due to the delay from the central PSU’s side. ©Jatin Verma All Rights Reserved. https://www.jatinverma.org P a g e | 10 ● The handling of Right of Way (RoW) for enhanced architecture and newly created network, along with integration of phase one and two of BharatNet is also flagged as a challenge. Government’s plan- Privatisation:To overcome the failings of nodal agencies involved in the implementation of the project, the Centre now plans to rope in the private sector and complete the phase one as well as phase two part of BharatNet under the public-private-partnership (PPP) model. ● Under the model, private sector will be invited to bid circle-wise for the BharatNet project and the maximum contract duration of the project is likely to be 25 years.