DAILY NEWS DIARY 18.03.2021

DAILY NEWS DIARY

Of

18.03.2021

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Warm Greetings.

 DnD aims to provide every day news analysis in sync with the UPSC pattern.  It is targeted at UPSC – Prelims & Mains.  Daily articles are provided in the form of Question and Answers  To have a bank of mains questions.  And interesting to read.  Providing precise information that can be carried straight to the exam, rather than over dumping.

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THE HINDU - TH INDIAN EXPRESS - IE BUSINESS LINE - BL ECONOMIC TIMES - ET TIMES OF INDIA - TOI

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INDEX

 Essay Paper 1. Public Sector Banks in the hands of private players for India’s banking sector woes…………………..04

GS 1  History 1. King Anangpal II………………………………………………………………………………………………………………………..05

GS 2  Governance 1. Food Security Act ………………………………………...... 07

Snippets:

1. ‘excessive reliance’ on foreign funds ………………………………………………..……………………...... 09

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ESSAY PAPER EDITORIAL Q- Is Placing Public Sector Banks in the hands of private players a panacea for India’s banking sector woes? Discuss? INTRODUCTION = In the recent Budget session, the Union government announced its intent to privatise Public Sector Banks (PSBs).

Until Now –

Questions raised are!! . While improving efficiency has been cited as the reason for this move, it is not clear whether privatisation brings efficiency or reduces associated risks! . Around the world, innumerable private banks have failed, thus challenging the notion that only private banks are efficient! . Similarly, if private enterprises are the epitome of efficiency, why do private corporate entities have such large volumes of NPAs? History of Nationalisation of Banks and its associated benefits – Bank nationalisation ushered in a revolution for India’s banking sector. Before nationalisation, barring the State Bank of India, most banks were privately owned and they largely benefited the rich and the powerful. The nationalisation of 14 private banks in 1969, followed by six more in 1980, transformed the banking sector – 1. Created jobs, 2. Extended credit to the agriculture sector and benefited the poor. 3. Areas that had so far been neglected, including agriculture, employment-generating productive activities, poverty alleviation plans, rural development, health, education, exports, infrastructure, women’s empowerment, small scale and medium industry, and small and micro industries, became priority sectors for these banks.

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4. The move also helped in promoting more equitable regional growth, and this is evident from RBI data. There were only 1,833 bank branches in rural areas in the country in 1969, which increased to 33,004 by 1995 and continued to grow over the next decades. 5. Banking services also reduced the dependence on moneylenders in rural regions. 6. Nationalised banking improved the working conditions of employees in the banking sector, as the state ensured higher wages, security of services, and other fringe benefits. 7. As an institution, PSBs are vehicles of the Indian economy’s growth and development, and they have become the trustees of people’s savings and confidence. 8. The PSBs played a huge role in making the country self-sufficient by supporting the green, blue, and dairy revolutions. 9. They have also contributed significantly to infrastructural development. 10. Finally, Public sector banks in India are currently earning considerable operating profits, to the tune of ₹1,74,390 crore in 2019-20 and ₹1,49,603 crore in 2018-19. Risks Associated with Large Scale Privatisation – 1. Placing such a huge network of bank branches and the infrastructure and assets in the hands of private enterprises or corporates may turn out to be an irrational move. 2. It could lead to denial of convenient and economical banking services to the common man. 3. The risks of monopoly and cartelisation may only complicate the issue. Way Forward In the context of privatisation and efficiency, it is unfair to blame PSBs alone for the alarming rise of NPAs. On the contrary – 1. Stringent measures are required to recover large corporate stressed assets, which is a key concern for the entire banking sector. 2. This must include strong recovery laws and taking criminal action against wilful defaulters. 3. So far, the government has not exhibited a firm willingness to implement these measures. Wilful default by large corporate borrowers and subsequent recovery haircuts, imposed through the ill-conceived Insolvency and Bankruptcy Code, has resulted in a heap of write-offs, putting a big dent on the balance sheets of PSBs. 4. This has not only affected the profitability of the banks, but has also become an excuse to allege inefficiency. 5. A system to examine top executives of PSBs across the country will also help in improving accountability. But privatisation of PSBs is not a definitive panacea for the problems of the banking sector in India.

GS 1  History Q- To which dynasty did King Anangpal II belong to and why was it in recent news? . A government seminar conducted recently in Delhi highlighted the legacy of the long-forgotten Tomar king — Anangpal II. . It recently came to light that Anangapal II was the founder of Dhillikapuri, which eventually became Delhi

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. The idea of these filed visits was to present “correct history” for the people through the works of historians, academics and archaeologists. . Anangpal II, popularly known as Anangpal Tomar, belonged to the Tomar dynasty that ruled parts of present-day Delhi and Haryana between the 8th and 12th centuries; their rule is attested by multiple inscriptions and coins . Anangpal II was instrumental in populating Indraprastha and giving it its present name, Delhi. The region was in ruins when he ascended the throne in the 11th century; it was he who built Lal Kot fort and Anang Tal Baoli.” . Tomar’s ancestry can be traced to the Pandavas (of the Mahabharata). . After the sminar it was decided that a committee be formed to take the mandate forward. Proposals included “building a statue of Anangpal II at the Delhi airport” and “building a museum dedicated to his legacy” in Delhi . The ASI department is also considering beginning excavation along the fortification of Lal Kot, also known as Qila Rai Pithora. The proposal is to make it an ASI-protected monument so that vertical excavation can be carried out to establish more links between Tomars and Delhi. A site museum could be created later at the place. . Tomars and their Delhi link find mention in some modern-day literature as well. Noted medieval historian Professor K A Nizami’s Urdu book, Ehd-e-Wusta ki Dilli, translated in English as Delhi in Historical Perspectives, looks at Delhi across six centuries (from 1300 to 1800). Tracing the antecedents of Delhi, Nizami refers to Persian annals that describe it as “Inderpat”. And yet, according to his book, Delhi formally emerged as a city only in the 11th century, when Tomar Rajputs took over the mountainous Aravalli region. Nizami said that the most reliable evidence about the early history of Delhi is inscribed on the iron pillar of Masjid Quwaatul Islam, adjacent to the Qutab Minar. He wrote: “According to this inscription, Anangpal of the Tomar Rajputs founded Delhi between 1053 and 1109 AD. It refers to Delhi as Delhi, a name that has endured… its long history.” . Anangpal Tomar II was succeeded by his grandson Prithviraj Chauhan. The Delhi Sultanate was established in 1192 after Prithviraj Chauhan’s defeat in the Battle of Tarain (present-day Haryana) by the Ghurid forces. For Prelims –

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GS 2  Governance Q- Discuss the issues plaguing Food Security Act in light of the recent allegations of 3 crore ration cards being cancelled? BACKGROUND = Though the issue of 'food security' at the household is continuously being addressed by the Government since long, through the Public Distribution System and the Targeted Public Distribution System, the enactment of the National Food Security Act, (NFSA) 2013 on July 5, 2013 marks a paradigm shift in the approach to food security from welfare to rights based approach.

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The Supreme Court recently said it was a “very serious” matter if the Centre had really cancelled around three crore ration cards, even those of tribal people and the poor, solely because they could not be biometrically linked with Aadhaar. “Right to food, which the ration card symbolised, cannot be curbed or cancelled because of lack of Aadhaar.” . Such cancellations had led to starvation deaths across the country. . And the States were in a denial mode, blaming the deaths on diarrhoea and malaria. In fact, anything but lack of food. This cruel exercise deprived millions of Indians living below the poverty line of food and led to starvation deaths in Jharkhand, U.P., Odisha, Karnataka, M.P., Maharashtra, Bihar, Chhattisgarh, West Bengal, Andhra Pradesh and other States Government Vs The Petitioner – 1. Additional Solicitor General Aman Lekhi said the statements made by the petitioner side were misplaced. Issuance of ration card was not dependent on the Aadhaar card. Alternative mechanisms were in place. Besides, the issuance of ration cards was primarily the responsibility of the State governments. 2. The Union of India casually gives an explanation that these cancelled cards were bogus. . The real reason is that the technological system based on iris identification, thumb prints, non-possession of Aadhaar, non-functioning of the Internet in rural and remote areas, etc., led to largescale cancellation of ration cards, without notice to the family concerned

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3. The petitioners should ideally move the respective High Court, rather than file an omnibus petition in the apex court. He said the petitioners had come directly to the apex court without raising their issue with the grievance redressal mechanism under the National Food Security Act. . As the government highlighted the redressal mechanism within the Food Security Act as the right place to go, the petitioner side countered in its report to the court that “not a single State has appointed independent nodal officers or district grievance redressal officer under the Act”. . All the States have mechanically granted additional designations to existing officers. . In many cases, the officers given additional designations are from the Food Supply Department, and they are the main persons responsible for corruption in the food distribution system Way Forward – 1. As referred to the directions imposed by the Supreme Court in the Swaraj Abhiyan cases on the implementation of the Food Security Act, which included social audits, framing of rules and setting up vigilance committees. 2. Supreme Court had laid down in clear terms that “no insistence on Aadhaar can be done for statutory entitlements”. In the meanwhile, The Hunger Watch Report of the Right to Food Campaign in 2020 characterised the hunger situation in India as “grave”. India ranks 94 out of 107 countries in the Global Hunger Index 2020 and is in the ‘Serious Hunger Category’.

GS 3 Snippets  Economic Development Q- Explain the need for India to be prudent about ‘excessive reliance’ on foreign funds? . Making a case for an upgrade in India’s sovereign rating, former New Development Bank president K.V. Kamath said the new development finance institution (DFI) cleared by the Union Cabinet must be careful about preventing ‘excessive reliance’ on foreign funds. . The Economic Survey 2020-21 had also argued India’s sovereign ratings did not reflect its fundamentals. “Never in the history of sovereign credit ratings has the fifth-largest economy in the world been rated at the lowest rung of the investment-grade (BBB-/Baa3)

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. The new DFI should be able to borrow from abroad at sovereign rates but called for careful consideration before foreign capital was pursued. . The institution will have to carefully assess if you are going to use external borrowing for rupee needs, what the total cost is and if it’s still attractive to a borrower. He stressed even global development banks’ soft loans were ‘not really soft’ and ‘excessive reliance on international funds’ would not be prudent.

With respect to the Trade and Commerce Policy of “Industrial Capitalism” of the British, which 3 stages from the following did it contain? 1. England made India not only an exporter of raw materials but an importer of all the industrial products of England. 2. The company followed a policy of destroying the native industries in order to provide markets for her own industries 3. England developed her own industries in India that further exploited the native resources (e.g. Railways). 4. The British reinvested their Finances in all the major industries like Banking, Steel, Cement and Jute. a. 1,2,3 b. 2,3,4 c. 1,3,4 d. 1,2,4

In the recent context with regard to Mullaperiyar Dam, the Tamil Nadu chief secretary took responsibility to give information on the ‘rule curve’ which means? a. The fluctuating storage levels in a reservoir. b. The construction plan of the dam c. The code of conduct and rules of people appointed to look after the safety of the dam d. None Of the above Answer –A NOTE: The Supreme Court said the Tamil Nadu Chief Secretary will be “personally responsible” and “appropriate action” will be taken on failure to give information on the ‘rule curve’ for the Mullaperiyar dam to the Supreme Court-appointed Supervisory Committee. The ‘rule curve’ in a dam decides the fluctuating storage levels in a reservoir. The gate opening schedule of a dam is based on the ‘rule curve’. It is part of the “core safety” mechanism in a dam.

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