Daily PT Capsule Mar 11 & 14

Pulses Production Growth

India has seen a gradual rise in the growth rate of pulses output at 2.61 per cent during the last decade, which has surpassed the growth rate of rice, wheat and all cereals together.

Agriculture Ministry data shows that during the last four decades (1970-2010) the production of pulses in the country has witnessed a gradual upward trend and notably, it has more or less remained nearly 18 million tonnes since 2010. Earlier the production hovered around 14-15 million tonnes.

Figures suggest the growth rate in pulses production during this decade has been at 2.61 per cent, which has been higher than that of rice that stands at 1.59 per cent, wheat at 1.89 per cent and all cereals together at 1.88 per cent.

Analysis

What is the status of pulses production in India? – India has the ubiquitous position as the leading producer, the foremost consumer and the largest importer of pulses.

Why is it gaining importance? – Pulses are a major source of protein. The changing lifestyle and improving disposable income there is a shift in consumption pattern of consumers. It can be seen in the increasing demand of protein products leading to what is known as ‘protein inflation’. Protein is a very essential component in the diet of a healthy individual and pulses are the most readily available source of fixing this protein in the diet.

The focus in the past owing to the green revolution has been on cereals, mainly wheat and rice. But these cereals are water intensive crops that also require large amounts of fertilisers.

What is being done to promote pulses? – The development of transgenic pigeonpea and chickpea for resistance against gram pod borer is at an advanced stage at the Indian Institute of Pulses Research (IIPR). Once achieved, this will help boost pulses output further and will go a long way to help the country achieve self sufficiency.

IIPR is striving to intensify the breeding programme through both conventional and genomics-enabled crop improvement. It has exclusive focus on development of hybrids in pigeonpea, transgenics against pod borer in chickpea and pigeonpea, high yielding varieties with tolerance to biotic and abiotic stresses.

Climate risk management and efficient extension models for dissemination of pulse-based technologies for farmers to make the pulse cultivation in the country productive and remunerative are also being worked upon.

Source: TheHindu

Insolvency code to avert NPAs

The government plans to deal with the issue of stressed assets of public sector banks by targeting structural issues whether it is wilful defaulter or due to policy paralysis or business challenges.

A major step forward in this regard is the the Bankruptcy and Insolvency Code, 2015 that was introduced in Parliament in December.

In the budget session Finance Minister Arun Jaitley told Parliament that Rs. 1 lakh crore of stressed assets were added in the first nine months of the current financial year itself.

Analysis

What is the bankruptcy and  insolvency code? – The Code seeks to create a unified framework for resolving insolvency and bankruptcy in India.  Insolvency is a situation where individuals or organisations are unable to meet their financial obligations.

The Code seeks to repeal the Presidency Towns Insolvency Act, 1909 and Provincial Insolvency Act, 1920.  In addition, it seeks to amend 11 laws, including the Companies Act, 2013, Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and Sick Industrial Companies (Special Provisions) Repeal Act, 2003, among others.

The insolvency resolution process (IRP) will be managed by a licensed professional.  The professional will also control the assets of the debtor during the process.  The Code also proposes to set up insolvency professional agencies.  These agencies will admit insolvency professionals as members and develop a code of conduct and evolve performance standards for them.

The Code proposes to establish information utilities which will maintain a range of financial information about firms.

The Code seeks to establish the Insolvency and Bankruptcy Board of India, to oversee insolvency resolution in the country.  The Board will have 10 members, including representatives from the central government and Reserve Bank of India.  It will register information utilities, insolvency professionals and insolvency professional agencies under it, and regulate their functioning.

The Code also creates an Insolvency and Bankruptcy Fund.The Code proposes two separate tribunals to adjudicate grievances related to insolvency, bankruptcy and liquidation of different entities under the law: (i) the National Company Law Tribunal will have jurisdiction over companies and limited liability partnerships, and (ii) the Debt Recovery Tribunal will have jurisdiction over individuals and partnership firms.

Source: TheHindu, PRS

Homebuyer Protection through Real Estate Bill

The Rajya Sabha passed the much anticipated Real Estate Bill, overcoming the sharp political rivalries that have stalled a lot of legislative activity in the House. In the course of five years, the Bill went through several rounds of discussions and numerous changes were made to its original text before it was passed.

According to Minister of Housing and Urban Poverty Alleviation M. Venkaiah Naidu, a total of 76,044 companies are involved in the real estate sector. It is estimated to contribute about 9 per cent of GDP (gross domestic product). He told the House that a total of 17,526 projects were launched between 2011 and 2015 with an investment value of Rs.13.70 lakh crore. The sheer scale of these numbers demands that this sector be run on transparent lines, taking into consideration both the need to foster fair play and encourage equity.

Analysis

What is the Real Estate Bill? – The real estate bill brings in the much needed reforms in the Real Estate sector.

1) It establishes the State Real Estate Regulatory Authority for that particular state as the government body to be approached for redressal of grievances against any builder. This will happen once every state ratifies this Act and establishes a state authority on the lines set up in the law.

2) This Act obliges the developer to park 70% of the project funds in a dedicated bank account. This will ensure that developers are not able to invest in numerous new projects with the proceeds of the booking money for one project, thus delaying completion and handover to consumers.

3) This law makes it mandatory for developers to post all information on issues such as project plan, layout, government approvals, land title status, sub contractors to the project, schedule for completion with the State Real Estate Regulatory Authority (RERA) and then in effect pass this information on to the consumers.

4) Carpet area has been clearly defined in the law. Currently, if a project is delayed, then the developer does not suffer in any way. Now, the law ensures that any delay in project completion will make the developer liable to pay the same interest as the EMI being paid by the consumer to the bank back to the consumer.

5) The developer cannot make any changes to the plan that had been sold without the written consent of the buyer. This puts paid to a common and unpopular practice by developers to increase the cost of projects.

6) The maximum jail term for a developer who violates the order of the appellate tribunal of the RERA is three years with or without a fine.

What will be the impact of the legislation? – It is hoped that the legislation will improve the trust quotient, which has been identified as a key factor hurting the credibility of the sector that serves the role of a multiplier in a growing economy. If that happens, it would go a long way in strengthening the overall demand sentiment. A better regulatory environment could also inject a sense of clarity in the operation of the industry, and facilitate prospective investors to look at it as a huge opportunity. It is important to note that the Central legislation has to be implemented by the States. The responsibility of providing the enabling ecosystem rests with them. The proof of the pudding will lie in the manner the States implement the legislation.

Source: The Hindu, Economic Times

Laterite Habitat Destruction

In the absence of vegetation and an acidic nature that makes cultivation difficult, the laterite soils spread across the West Coast have been classified as a wasteland. It is, perhaps, this lack of environmental regulation that sees the habitat levelled or mined for red brick blocks that mark most homes in coastal Karnataka.

Small frog species hide from predators in the crevices of the porous rocks; while multitude varieties of snakes roam around the area. There are different species of birds present as well. However, considered wasteland, mining continues to flourish.

Analysis

What is the Laterite soil? – Laterite is a soil and rock type rich in iron and aluminium, and is commonly considered to have formed in hot and wet tropical areas. Nearly all laterites are of rusty-red coloration, because of high iron oxide content. They develop by intensive and long-lasting weathering of the underlying parent rock.

It is mainly found on the summits of Western Ghats at 1000 to 1500 m above mean sea level, Eastern Ghats, the Rajamahal Hills, Vindhyas, Satpuras and Malwa Plateau.

It also occurs at lower levels and in valleys in several other parts of the country. It is well developed in south Maharashtra, parts of Karnataka, Andhra Pradesh, Orissa, West Bengal, Kerala, Jharkhand, Assam and Meghalaya.

Source: TheHindu, Wikipedia

New pricing policy for hard-to-reach, deep sea gas fields

The Union cabinet approved a new pricing formula for gas discoveries made in difficult-to-access areas. The formula will be based on a weighted one-year average of prices of fuel oil, naptha and imported coal.

Since the rate is not enough to incentivise exploration, the government approved the new price formula for undeveloped gas discoveries in deep-sea, ultra-deep sea and high-temperature, high-pressure areas using average of landed price of naphtha, fuel oil and liquefied natural gas (LNG).

The decision follows Finance Minister Arun Jaitley’s comments during his Budget speech about the government’s plans to incentivise gas production from deep-water, ultra deep-water, high-pressure and high-temperature areas.

The Cabinet also approved the Hydrocarbon Exploration and Licensing Policy (HELP). The highlights of the new policy involve granting explorers a uniform license for exploration and production of all forms of hydrocarbons. The previous policy required a separate license for each type of hydrocarbon.

The new policy also incorporates an open acreage policy wherein exploration and production companies will be allowed to choose the blocks they want to use from the designated area. In addition, the policy moves towards an easier revenue-sharing mechanism from the current profit-sharing mechanism.

Analysis

What is the revenue sharing model vs profit sharing model? – The earlier contracts were based on the concept of profit-sharing where profits are shared between government and the contractor after recovery of cost. Under the profit-sharing methodology, it became necessary for the government to scrutinise cost details of private participants and this led to many delays and disputes. Under the new regime, the government will not be concerned with the cost incurred and will receive a share of the gross revenue from the sale of oil, gas, etc.

What will be the impact of new pricing? –  The new pricing would be positive for upstream companies since the new pricing will be applicable to existing as well as future discoveries. This will lead to prices rising by about 70-80 per cent of their current levels and will enable companies to begin work on their new discoveries in these difficult areas.

It is part of the government’s plans to incentivise gas production from deep-water, ultra deep-water,high-pressure and high-temperature areas.

Source: TheHindu

Should Marital Rapes be criminalized in India?

Minister for Women and Child Welfare Maneka Gandhi submitted in Parliament that the government wouldn’t criminalise ‘marital rape’. It is furthering the government’s stand from April 2015, when it had said that there was no proposal to amend Section 375 of the Indian Penal Code which makes an exception to “sexual intercourse by a man with his own wife” so long as the wife is above 15 years of age.

This was in reply to the UN Committee on Elimination of Discrimination against Women. Since then, however, the government has agreed, along with about 150 world leaders, to adopt the 17 Goals for 2030 set out by the UNDP. At the United Nations Sustainable Development Summit on September 25, 2015, Prime Minister Narendra Modi addressed the UNGA committing India to the goals which include a target of eliminating “all forms of violence against all women and girls in the public and private spheres.” The reference to private spheres is what the U.N. believes must include the criminalisation of marital rape, if India is to keep that promise.

A top U.N. official said that the issue is one of consent, not culture, suggesting that India would be violating the Sustainable Development Goals it has adopted if it did not amend the law accordingly.

Analysis

What is section 375 of IPC? ? It defines Rape – A man is said to commit “rape” who, except in the case hereinafter excepted, has sexual intercourse with a woman under circumstances falling under any of the six following de­scriptions:-

(First) —  Against her will.

(Secondly) — Without her consent.

(Thirdly) — With her consent, when her consent has been obtained by putting her or any person in whom she is interested in fear of death or of hurt.

(Fourthly) — With her consent, when the man knows that he is not her husband, and that her consent is given because she believes that he is another man to whom she is or believes herself to be law­fully married.

(Fifthly) — With her consent, when, at the time of giving such consent, by reason of unsoundness of mind or intoxication or the administration by him personally or through another of any stupe­fying or unwholesome substance, she is unable to understand the nature and consequences of that to which she gives consent.

(Sixthly) — With or without her consent, when she is under sixteen years of age.

(Exception) — Sexual intercourse by a man with his own wife, the wife not being under fifteen years of age, is not rape.]

Source: TheHindu, IndiaKanoon

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