KANISHKBIOSCIENCE E -LEARNING PLATFORM - Help you think beyond the issue but relevant to the issue from UPSC prelims and Mains exam point of view. These linkages provided in this ‘hint’ format help you frame possible questions in your mind that might arise(or an examiner might imagine) from each current event. InstaLinks also connect every issue to their static or theoretical background. This helps you study a topic holistically and add new dimensions to every current event to help you think analytically.
TOPIC 2,1
Topics Covered: Inclusive growth and issues arising from it.
Government exploring setting up bad bank, all other options:
Context:
The government is exploring all options, including setting up of a bad bank, to improve the health of the country’s banking sector, Economic Affairs Secretary Tarun Bajaj said recently.
Need for:
It is not just necessary but unavoidable in the present circumstances when NPAs are likely to balloon and much of the resolution will have to take place outside the IBC framework.
Concept of Bad Bank:
A bad bank is a bank set up to buy the bad loans and other illiquid holdings of another financial institution.
The entity holding significant nonperforming assets will sell these holdings to the bad bank at market price.
By transferring such assets to the bad bank, the original institution may clear its balance sheet—although it will still be forced to take write-downs.
Why be concerned about bad loans?
Indian banks’ pile of bad loans is a huge drag on the economy.
It’s a drain on banks’ profits. Because profits are eroded, public sector banks (PSBs), where the bulk of the bad loans reside, cannot raise enough capital to fund credit growth.
Lack of credit growth, in turn, comes in the way of the economy’s return to an 8% growth trajectory. Therefore, the bad loan problem requires effective resolution.
Benefits:
This helps banks or FIs clear-off their balance sheets by transferring the bad loans and focus on its core business lending activities.
Large debtors have many creditors. Hence bad bank could solve the coordination problem, since debts would be centralised in one agency.
It can effect speedier settlements with borrowers by cutting out individual banks.
It can drive a better bargain with borrowers and take more stringent enforcement action against them.
It can raise money from institutional investors rather than looking only to the Government.
What are the Concerns or demerits of such banks?
Suppose, say for example, a bank sells bad loans. Then, it has to take a haircut because when Rs 100 goes bad, the actual amount that can be expected is lower than Rs 100 and that leads to haircut. When it takes haircut that will impact the P&L (Profit & Loss).
So, till that particular aspect is not addressed, creating a new structure may not be as potent in addressing the problem.
InstaLinks:
Prelims Link:
What is an Asset Reconstruction Company?
What is a bad bank?
Who can set up a bad bank in India?
What are stressed assets?
What are non performing assets?
Mains Link:
Discuss the merits and demerits of setting up of bad banks.
Sources: the Hindu.
India mulls E20 fuel to cut vehicular emissions
Topics Covered 2.2: Conservation
India mulls E20 fuel to cut vehicular emissions:
Context:
Ministry of Road Transport and Highways has published a draft notification and invited comments from the public for adoption of E20 fuel as an automobile fuel.
E20 fuel is a blend of 20% of ethanol and gasoline.
Present status:
The current permissible level of blending is 10% of ethanol though India reached only 5.6% of blending in 2019.
Benefits of E20 fuel in particular and ethanol blending in general:
To reduce vehicular emissions.
To reduce emissions of carbon dioxide, hydrocarbons, etc.
To reduce the oil import bill, thereby saving foreign exchange and boosting energy security.
Challenges ahead:
Compatibility of vehicles with the percentage of ethanol in the blend would have to be defined by the vehicle manufacturer.
What is ethanol?
Ethanol is a biofuel and a common by-product of biomass left by agricultural feedstock such as corn, sugarcane, hemp, potato, etc.
What has the Government done and is doing in this regard?
National Biofuel Coordination Committee (NBCC) has allowed Surplus rice available with the FCI to be converted to ethanol for utilization in making alcohol-based hand-sanitizers and for blending in petrol.
The Government of India launched the EBP programme in 2003 for undertaking the blending of ethanol in petrol to address the environmental concerns due to fossil fuel burning, provide remuneration to farmers, subsidize crude imports and achieve forex savings.
The National Policy on Biofuels, 2018 envisages that during an agriculture crop year when there is projected over supply of food grains as anticipated by the Ministry of Agriculture & Farmers’ Welfare, the policy will allow conversion of these surplus quantities of food grains to ethanol, based on the approval NBCC.
InstaLinks:
Prelims Link:
What is ethanol? How is it produced?
Difference between ethanol and molasses?
What is ethanol blending programme?
Benefits of ethanol blending?
Mains Link:
Write a note on the 2013 EBP programme.
Sources: the Hindu.
Intentional genomic alteration (IGA) and GalSafe pigs:
Context:
The US Food and Drug Administration (FDA) approved a first-of-its-kind intentional genomic alteration (IGA) in a line of domestic pigs referred to as GalSafe pigs.
These pigs may be used for food and human therapeutics.
This will be the first time that the regulator has approved an animal biotechnology product for both food and biomedical purposes.
What is intentional genomic alteration?
Intentional genomic alteration in animal’s means making specific changes to the genome of the organism using modern molecular technologies that are popularly referred to as “genome editing” or “genetic engineering”.
Such changes in the DNA sequence of an animal may be carried out for research purposes, to produce healthier meat for human consumption and to study disease resistance in animals among other reasons.
Sources: Indian Express.
TOPIC 2,3
Intentional genomic alteration (IGA) and GalSafe pigs:
Context:
The US Food and Drug Administration (FDA) approved a first-of-its-kind intentional genomic alteration (IGA) in a line of domestic pigs referred to as GalSafe pigs.
These pigs may be used for food and human therapeutics.
This will be the first time that the regulator has approved an animal biotechnology product for both food and biomedical purposes.
What is intentional genomic alteration?
Intentional genomic alteration in animal’s means making specific changes to the genome of the organism using modern molecular technologies that are popularly referred to as “genome editing” or “genetic engineering”.
Such changes in the DNA sequence of an animal may be carried out for research purposes, to produce healthier meat for human consumption and to study disease resistance in animals among other reasons.
Sources: Indian Express.
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