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News Analysis: 26-01-2019
General Studies-II : Structure, organization and functioning of the Executive and the Judiciary
SC upholds bankruptcy code, cites improved financial flows
In a whoop of victory for credits markets and entrepreneurship, the Supreme Court on Friday upheld the constitutionality of the Insolvency and Bankruptcy Code (IBC), saying the law sends a clear message that India is no longer “the defaulter’s paradise.”
The Code consolidates disparate bankruptcy and insolvency laws of the past under one umbrella.
It said the liquidation value of 63 of the 80 cases resolved through the acceptance of resolution plans was ₹29,788.07 crore. But the amount realised from the resolution process was ₹60,000 crore, that is, 202% higher than the liquidation value
Approximately 3,300 cases have been disposed of by the adjudicating authority based on out-of-court settlements between corporate debtors and creditors which themselves involved claims amounting to over ₹1,20,390 crore
The judgment, however, partially reads down Section 29A. This provision disqualifies certain kinds of persons from submitting a resolution plan.
The court said the very purpose of Section 29A is to ensure that the “persons responsible for insolvency of the corporate debtor do not participate in the resolution process”.
However, the court interprets clause (j) of Section 29A to hold that the “mere fact that somebody happens to be a relative of an ineligible person cannot be good enough to oust such person from becoming a resolution applicant, if he is otherwise qualified”.
The court upheld certain relaxations given to micro, small and medium enterprises (MSME) under Section 29A of the Code. It the MSME form the “bedrock of our economy” and stringent restrictions through the IBC would adversely affect them. That is, instead of resolving crisis, it would lead to the untimely liquidation of MSMEs.
The court said the relaxation for MSMEs is proof that the legislature is alive to the anomalies within the Code and is taking steps to rectify them.
Source: The Hindu
General Studies-II : Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.
10% reservation for the poor challenged in SC
The Supreme Court on Friday sought the government’s response to petitions challenging the Constitution (103rd Amendment) Act, which provides 10% reservation in government jobs and educational institutions for those economically backward in the unreserved category.
The law was passed by Parliament, and received the President’s assent. A Bench, led by Chief Justice of India Ranjan Gogoi, refused to stay it on Friday.
The Act amended Articles 15 and 16 of the Constitution by adding clauses empowering the government to provide reservation on the basis of economic backward- ness.
The petitions in the court said the Act violated the Basic Features of the Constitution.
Source: The Hindu
General Studies-II : India and its neighborhood- relations.
‘SAARC nations must have synergy’
The conundrum of South Asian identity, involving the challenges posed by the 1947 Partition, internal politics of each country and meddling by the U.S. and China, could be resolved if the “negative discourse” on the region was driven out of the public domain and the borders were rendered irrelevant, a panel of diplomats, essayists and foreign policy experts said here on Friday.
The panel comprising former Ambassador and National Security Adviser Shivshankar Menon, Pakistan's former diplomat Husain Haqqani, Singapore-based economist Prasenjit Basu and Canadian essayist of Nepali descent Manjushree Thapa was in conversation with Suhasini Haidar, Diplomatic Affairs Editor of The Hindu at the Jaipur Literature Festival here.
The experts said in the JLF session on “South Asia: Walls and Bridges” that the region’s future lay in cooperation among the eight SAARC nations and strengthening of bonds with emphasis on common ethnicity, culture, traditions, languages and religions.
The panel felt the focus of South Asian discourse needed to shift away from the perception of India's dominance in the region.
Mr. Menon said the walls in South Asia were political, whereas the bridges could be built in every domain.
The SAARC could play a meaningful role, as there were no security or financial dilemmas among the member countries, except between India and Pakistan, he said, and added that there was no need to panic on interference by countries such as China and the U.S.
Ms. Thapa pointed out that when Nepal looked towards India with an “emotional response” for emulating the values of secularism, institutional independence and women's empowerment, the new trends of majoritarianism were sending across confusing signals. “The 2015 Constitution has declared Nepal [to be] a secular State. We expect India to be our role model,” she said.
Ms. Haidar made observations about the role of SAARC in the changing geo-political scenario and stressed the need to go a step ahead of the use of “soft power” and bring the South Asian nations together to ensure regional cooperation.
Source: The Hindu
General Studies-II : Bilateral, regional and global groupings and agreements involving India and/or affecting India's interests Effect of policies and politics of developed and developing countries on India's interests, Indian diaspora.
Crisis in Caracas
Venezuela plunges from one catastrophic crisis to another
The political crisis in Venezuela took a dangerous turn when Juan Guaidó, the new head of the National Assembly, declared himself “acting President”, challenging the authority of President Nicolás Maduro.
Soon after Mr. Guaidó’s announcement, the U.S., Canada, Brazil and a host of other Latin American countries recognised the 35-year-old leader from the Popular Will party as interim President.
A furious Mr. Maduro cut diplomatic ties with the U.S. and ordered American diplomats to leave in 72 hours. Venezuela has grappled with an economic and political crisis of its own making for almost two years now.
When oil prices started falling from its 2014 highs, it badly hit an economy that was over-reliant on petroleum exports and was borrowing heavily to fund its over-spending on social welfare programmes, which former President Hugo Chávez liked to describe as a “Bolivarian revolution”. Mr. Maduro’s government was clueless when the economy started collapsing.
At least 90% of the people now live below the poverty line, inflation is forecast to touch 10 million per cent this year, food and medicine shortages are widespread, and the economic woes have triggered a massive migrant crisis — nearly three million are estimated to have fled the country in recent years.
The opposition, whose attempts to overthrow the Socialists, including the 2002 coup against Chávez, had failed in the past, launched protests against Mr. Maduro.
The government used brute force to suppress them, while the economic situation deteriorated.
This left Venezuela in a constant state of economic hardships and violent street protests over the past two years.
The main opposition boycotted last year’s presidential election, which Mr. Maduro won with 67.8% vote.
Mr. Guaidó’s claim is that the election was not free and fair and therefore Mr. Maduro is not the legitimate President — a claim that the U.S. and its allies back.
While Mr. Maduro shares a lot of the blame for the mismanagement of the economy, forcibly removing him from power with support from foreign nations may destabilise the country further, even leaving aside the legality of such a move.
Mr. Guaidó may have hoped that by anointing himself a rebel President with backing from the U.S., he could win the support of sections of the armed forces, without which he cannot unseat Mr. Maduro.
But that plan appears to have failed with the military declaring its loyalty to President Maduro.
To be sure, the people of Venezuela deserve a better deal from a government that has led them to untold suffering and forced millions to flee the country.
Destabilisation by interfering in the political process is not the solution, however.
What is required is a coordinated international effort to restore some degree of economic and political normalcy. In the long run, it is up to the people of Venezuela to decide their own political destiny.
Source: The Hindu
Other Issues in News:
Bharat Ratna for Pranab, Deshmukh, Hazarika
President Ramnath Kovind on Friday conferred the Bharat Ratna, the nation’s highest civilian honour, on former President Pranab Mukherjee, along with social activist Nanaji Deshmukh (posthumous), and Assamese musician Bhupen Hazarika (posthumous).
Prime Minister Narendra Modi was the first to congratulate the awardees. “Pranab Da is an outstanding statesman of our times. He has served the nation selflessly and tirelessly for decades, leaving a strong imprint on the nation’s growth trajectory. His wisdom and intellect have few parallels,” he tweeted.
Of Nanaji Deshmukh, a senior RSS leader who also worked for rural development and welfare of farmers and was considered a stalwart of the Sangh Parivar, the Prime Minister said: “Nanaji Deshmukh’s stellar contribution towards rural development showed the way for a new paradigm of empowering those living in our villages. He personified humility, compassion and service to the downtrodden. He is a Bharat Ratna in the truest sense.”
He said Bhupen Hazarika popularised India’s musical traditions globally. “The songs and music of Shri Bhupen Hazarika are admired by people across generations. From them radiates the message of justice, harmony and brotherhood.”
Source: The Hindu
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