- E1: Wilful defaulter?
- E2: Coinage Act & right to issue Rs.1 note
- E3: Gold account scheme
- E4: MNREGA: Sweeping changes
- E5: MPLADS & toilet building
- E7: PDS Reforms: Lessons from Delhi
- E8: Commerce Ministry on IPR and FDI
- E9: Global competiveness index 2014
- E10: MSME speech: fodder material
- E11: BSNL, MTNL merger
- E12: India’s Sovereign rating
E1: Wilful defaulter?
Who is wilful defaulter?
Person/company, who has taken loan from any scheduled commercial bank or financial institution, and
- Has capacity to repay the loan / installment but not repaying the loan.
- Has diverted loan money for other purpose.
- Has not utilized the loan money for the actual purpose (for which they had taken the loan)
- Has sold off the mortgaged assets (in exchange of which, they had taken the loan.)
In simple terms: Has the moolah + but doesn’t want to pay + used the money in desi liquor + makes the collateral vanish = Wilful defaulter.
Why in news?
- Mallya owes ~7,000 crores in loan repayment to total 17 banks.
- September week1: United Bank of India became the first bank to Kingfisher Airlines and its promoter Vijay Mallya as wilful defaulters.
Implication after Wilful defaulter branding?
- Once a lender announces as person/company as “wilful defaulter’- their names are sent to RBI and credit information companies such as CIBIL.
- This way, all other banks and NBFCs are warned not to lend any more money to such totally awesome person.
- As per SEBI order: Willful defaulters can’t raise money from capital market i.e. they cannot issue fresh IPO or bonds.
- In Sep-2014, Rajan issued new directive- from nowon, if person doesn’t repay loan then extract it from ‘guarantors’. And if those guarantors don’t repay the loan then declare them as wilful defaulters as well.
Vinod wisdom on wilful defaulters
Former Comptroller and Auditor General (CAG) Vinod Rai gave following commentary:
- Public sector banks have large NPA because cronies have used political connections to get loans- even for unviable business projects.
- These cronies didnot have the financial knowledge or business acumen to deliver the product / service.
- Kingfisher loan default is just a small trickle- many others like him.
- Solution: need to make bank board members’ appointment more transparent
E2: Coinage Act & right to issue Rs.1 note
|issue bank notes from Rs. 2 till Rs. 10,000||sole right to mint coins of all denominations.|
|Hum notes mein jeethe hain||Hum chillar party hain|
Then who prints notes less than Rs 2?
- 1940: Currency ordinance empowered Government to print one rupee note.
- Later, ordinance was repealed. And in 2011: new Coinage act came.
- Under this act, union Government can mint coins upto Rs.1000
- And as per law ministry’s interpretation – one rupee is included in it.
- Besides, as per RBI act 1934- RBI doesn’t have the power to issue one rupee note.
- Side note: they have stopped printing one rupee and two rupee notes. Only the existing notes in circulation.
E3: Gold account scheme
|Who?||MMTC-PAMP- one of the gold refining companies in India.|
|What?||Gold Metal account scheme. Yet to obtain all clearances though.|
|Features||You can deposit gold jewelry, coin, biscuit etc. Company will melt and sell it. You get interest payment (in gold). Thus, on maturity, you get a heavier coin /biscuit.|
|Benefit||Junta deposits gold- company utilizes it for productive purpose. Thus gold supply will increase. Lower gold imports. Lower current account deficit.|
E4: MNREGA: Sweeping changes
- Rural Development ministry has updated MNREGA guidelines.
- To mitigate drought and water scarcity in rural India.
As per new guidelines:
- 50% of all MNREGA works should be for water conservation works like check dam construction, de-silting of traditional water bodies, minor irrigation tanks and canals.
- 51% of the wagepayment must be made to unskilled laborers. Remaining upto 49% – may be done by Skilled laborers. (if skilled laborers are required for check dams, minor irrigation tanks with machinery)
- Fund transfer to states via E-payment platform
- Fund transfer “just in time basis” so that laborers’ wage payment are not delayed beyond one week in any case.
Proposed: MNREGA only for backward districts?
- Rural development minister said that MNREGA should not be required in areas having high growth rate, high percapita income.
- MNREGA is required only in areas with large tribal or poor population.
- In other words, Modi Government is planning to confine MNREGA only to backward areas.
- Although they’ll need to amend the act for this, but they’ve began ground exercise of identifying the blocks using 2011 Census and planning commission’s Backwardness index.
Proposed: Changing labor to material ratio
|Components||UPA||Rural ministry’s New proposal|
|Will permit greater use of (permanent) material. Perhaps paving way for machinary and contractors- so that ‘permanent’ durable assets can be created.||
E5: MPLADS & toilet building
- Under the MPLADS, each MP can recommend works to the tune of Rs 5 crore annually to the district collector in his or her constituency.
- 2nd Administrative reform commission: absolish MPLADS because it breaches the separation of powers between executive and legislature. But SC ruled in 2010 it is not a breach.
Topic in news because
- Planning and statistics ministry urged all MPs to make toilet construction their top priority this year.
- PM has repeatedly emphasized the importance of separate toilet facility for girl child education.
- MPLADS funds could also be used to install bio-digesters (DRDO) for sarkaari schools.
|Christian and Sikhs||16%|
- Since ’86, we’ve provided money to build toilets in rural India.
- But rural men consider it’s more ‘healthier’ to go out. until that mentality is fixed, merely throwing money won’t help.
- Same even in schools, if toilets are built but not cleaned properly, the children will still go out.
E7: PDS Reforms: Lessons from Delhi
||To solve shopkeepers’ problems:
E8: Commerce Ministry on IPR and FDI
- At present, India has a strong IPR framework, fully compliant with WTO norms.
- But we don’t have a separate IPR policy.
- American pharma, solar companies, Special-301 reports keep rasiing the issue of intellectual property rights (IPR)
Therefore, Commerce ministry decided two things
- Separate IPR policy in next four months.
- Setup a think tank to handle IPR matters more effectively.
Regarding Multibrand FDI
- UPA Government permitted 51% FDI in multibrand retail, with certain caveat.
- So far only one proposal cleared: Tesco(UK).
- The new Commerce minister says we are against multibrand FDI. But no formal notification yet given to scrap the FDI.
- Her reason- there are no pending applications for FDI approval. (hence no need for notification, because everyone knows we are against it so other MNCs won’t waste time in applying anyways.)
E9: Global competiveness index 2014
- World Economic Forum (WEF) releases Global competitiveness index. (HQ: Geneva, Switzerland).
- (as expected), India lost 11 places than previous report. Current rank 71st.
- Among BRICS nations: China>Russia>South Africa>Brazil>India
- Top three: Switerland, Singapore, USA
- It can be taken as a measure of knowing the sustainability of the growth.
- When GCI 2013 was released, govt. was defensive against the rankings. It said, the indicators keep changing and it targets mostly MSME sector. It is not right to single out a single measure.
- But now govt is taking steps to ease doing business- formed the Damodharan committee to give recommendations to improve business climate in the country.
Some of the reasons, why we suck in this report?
- Complex taxation structure.
- Obtaining business permits and plant construction permits.
- Multiple tax rates and complex paper work in various states. Procedure far burdernsome than international standards.
- Complicated procedures to get environment clearance and building permissions.
E10: MSME speech: fodder material
Some fodder points from Minister’s speech
|Why MSME important||Obstacles before MSME|
- Skill India Mission
- Make in India campaign.
- 31 Sector Skill Centres to set standards for job profiles.
- Government began amendments in Apprenticeship Act and factories act.
E11: BSNL, MTNL merger
|BSNL||Serves All India except Delhi and Mumbai|
|MTNL||Serves Delhi and Mumbai|
- Government wants to merge BSNL and MTNL – into a national telecommunication services company.
- Deadline: 2015, June-July.
Challenges to this merger
- MTNL has large debt. Government will have to give it soft loans to clear the debts first, before merging with BSNL.
- MTNL is a listed company. Its shares will have to be de-listed from the stock-exchange. Need clearance under SEBI and Companies Act 2013.
- MTNL employees get higher salary than BSNL.
- Both MTNL and BSNL are overstaffed, if you compare their salary as % of company
- revenue. (Compared to private telecom companies of similar revenue).
- Therefore, Atleast 1 lakh BSNL employees and 20,000 MTNL employees need to be given VRS- imagine the legal and trade union hurdles!
E12: India’s Sovereign rating
|S&P||BBB-||Lowest investment grade. Negative outlook.|
Why in news? Fitch representatives met with Finance ministry officials. They’d inspect the database and reforms and may upgrade the rating.
Thank u sir.
Mrunal Sir please throw some light on NJAC BILL,as the hindu is focussing too much on this topic..and also PM’s tactical approach towards neighbouring countries & Japan..
thank you sir…
thank you fr all the pains you are taking for the aspirants…
can anyone please tell when will the result of the prelims will come??
will it be by start of October or mid October or by the end of October.
Dear sir even if u had a credit card all information goes to CIBIL where your PAN card has been atteched.. So no need this exercise to be repeat.
Who is asking you to repeat?
When you take a loan you are a borrower in cibil database and if you default you are a defaulter but when you willfully default you are willful defaulter
What is the historical perspective of the law such that Union Govt can mint one rupee notes or for that matter mint coins from Rs 1 to rs 1000, but not RBI.
I think Damodaran Committee on Ease of Doing Business already gave its recommendations last year. Or have they formed the same committee under the same chairman again??
if sohan while selling two goats at the same prise, makes 10 % profit on one and 10% loss on other then he makes what % of profit OR wht % of loss OR no profit no loss………………………Please whts the ans explain?
This type of question came in prelims,
Ans : 1 %
Sell(sp) = 100+100 = 200
Cost(cp) = 100/1.1 + 100/.9 = 100* ( 2/.99) = 200/.99 = sp*1/.99
Sp = .99 cp => % loss = cp – sp(=.99cp) / cp * 100 = 1 %
Shortcut : always loss
For x % loss and profit,
Loss percent = (x/10) ^ 2
Can I change my optional for mains now?
Do it after mains baby :P
Mrunal, do u plan to put up PIN for ibps PO and ssc cgl exams?
My question is regarding the ratio of labor to material. How will it benefit the government if it makes the ratio favorable for material i.e.; make it 49:51 instead of 40:60. How is it related to contractors and increase in the number of contractors?
luk mahak..if govt increases d amt of materials to b used,then ofcorse d materials need to b procured frm certain contractors…ryt? so if proportion of materials increases der wil b an increase in contractors too … lemme knw if it helped.
49:51 = to encourage permanent assets by using skilled labour and material because at present only temporary works going on repeatedly without asset permanent constructions, contractors may be utilised in construction of check dams and minor tanks
Presently labours are employed on MNREGA jobs but sitting idle in absence of machinery and materials(People are only interested in wages not in work) in other words , there is lack of supervision and scope of work i.e. what work they should do.. who clear the scope of work. By increasing % limit, more machineries can be hired and the people can be put on use. when there are more money in materials , more contractore will come to bid and there will be healthy competetion.( open secret…its only sarpanch and his brothres/relatives who are contractors). my opinion – MNREGA is one of the reason behind more inflation..
WHy these new topics not showing in the current section of economy topic wise
sir can you pls tell me how to download DD news Online program like THE BIG PICTURE. It will be great help.
thank you for your efforts sir.. salute!!!!
Hi Mrunal sir….plz tell how to download your notes…finding difficulty in doing so…plz.
use google chrome!
find “print” at the end of the discussion.
i have applied with geography optionsin 2014 pre.Is there any probability of changing options during mains
thank u sir.
sir one request
Pls include the images( which are shown in the topic of the article ) in the main article also it makes the article also
wht does it mean by listed company
Listed companies are the ones which hold top positions in the sme (stock market exchanges) like in india , bse and nifty
Thanks alot sir. Please flash some light on NJAC .
what is forensic audit?
Simply great.I am a PCS officer and preparing for IAS.Your blog gives me a reliable shortcut to study with job and spares me from spending time on newspapers.
Sir.,u r gr8.,tiz site is very useful.,i am requesting u with humble to post all the information in English(some matters in hindi).,thanking you…
hey can anyone explain the meaning of labor to material ratio under MNREGA
Mrunal sir thank u so much