1.Insolvency & Bankruptcy Code (IBC) in India

Syllabus: GS 3 /Economy

News

The Finance Minister has proposed to set up an integrated technology platform to improve the outcomes under the Insolvency & Bankruptcy Code (IBC).

Insolvency:

• In a growing economy like India, a healthy credit flow and generation of new capital are essential.
• When a company or business turns insolvent or “sick”, it begins to default on its loans. 
  • In order for credit to not get stuck in the system or turn into bad loans, it is important that banks or creditors are able to recover as much as possible from the defaulter and as quickly as they can.
• The business can either get a chance, if still viable, to start afresh with new owners, or its assets can be liquidated or sold off in a timely manner. 
• This way fresh credit can be pumped into the system and the value degeneration of assets can be minimised.

Need for INSOLVENCY AND BANKRUPTCY CODE

When insolvency is triggered under the IBC, there can be two outcomes: resolution or liquidation; all attempts are made to resolve the insolvency by either coming up with a restructuring or new ownership plan and if resolution attempts fail, the company’s assets are liquidated.

• In 2016, India’s Non-Performing Assets and debt defaults were piling up, and older loan recovery mechanisms such as the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), Lok Adalats, and Debt Recovery Tribunals were seen to be performing badly, the Insolvency and Bankruptcy Code (IBC) code was introduced.
  • It was introduced to overhaul the corporate distress resolution regime in and consolidate previously available laws to create a time-bound mechanism.

Insolvency and Bankruptcy Code (IBC) 

objective

•  The primary objective of the IBC is to promote entrepreneurship, availability of credit, and balance the interests of all stakeholders by providing for a time-bound process to resolve insolvency

Application

• The IBC applies to companies, limited liability partnerships (LLPs), partnership firms, and individuals. It provides a framework for both corporate and personal insolvency.

Modus oprendi

•  When a corporate debtor (CD), or a company defaults on its loan repayment, either the creditor or the debtor can apply for the initiation of a Corporate Insolvency Resolution Process (CIRP) under Section 6 of the IBC.

Insolvency resolution process

•  The IBC provides for a structured insolvency resolution process overseen by licensed insolvency professionals (IPs). 

Adjudicating authority

•  The National Company Law Tribunal (NCLT) is the adjudicating authority for corporate insolvency resolution processes (CIRP) for companies and LLPs.

Liquidation

If a resolution plan is not approved or implemented within the specified time frame, the corporate debtor may be liquidated to distribute the proceeds to creditors.

Challenges

• Operational Delays: The strict timelines prescribed by the IBC are often difficult to adhere to due to various reasons such as legal complexities, coordination among stakeholders, and judicial backlog.
• Lack of Infrastructure: There has been a lack of adequate infrastructure, including sufficient number of insolvency professionals (IPs) and trained personnel, to handle the increasing number of insolvency cases effectively. 
• Haircuts and Creditor Recovery: The IBC aims to maximize the value of assets for creditors, but in practice, creditors often face significant haircuts (losses) during the resolution process

Way Forward

• Operational Delays: The strict timelines prescribed by the IBC are often difficult to adhere to due to various reasons such as legal complexities, coordination among stakeholders, and judicial backlog.
• Lack of Infrastructure: There has been a lack of adequate infrastructure, including sufficient number of insolvency professionals (IPs) and trained personnel, to handle the increasing number of insolvency cases effectively. 
• Haircuts and Creditor Recovery: The IBC aims to maximize the value of assets for creditors, but in practice, creditors often face significant haircuts (losses) during the resolution process.

2. GM MUSTARD

Syllabus: GS 3/Agriculture/Science and Technology

what are GM crops

• Crops that have undergone genetic engineering processes to alter their DNA are referred to as genetically modified crops.
• This alteration is done to introduce desirable traits such as resistance to pests or herbicides, improved nutritional content, or increased yield.
• The process of creating GM crops typically involves: identification of desired traits, isolation of genes, insertion into crop genome, and expression of the trait.
• The techniques used in GM crops are: gene guns, electroporation, microinjection, agrobacterium etc.
• The types of modification are: transgenic, cis-genic, subgenic and multiple trait integration.
• The main trait types in GM crops are herbicide tolerance (HT), insect resistance (IR), Stacked traits etc.

Indian Scenario in GM crops

Many varieties of GM crops are under different stages of development, like Bt brinjal and DMH-11 mustard.

Bt Cotton: In 2002, the GEAC had allowed the commercial release of Bt cotton.

Bt cotton has two alien genes from the soil bacterium Bacillus thuringiensis (Bt) that allows the crop to develop a protein toxic to the common pest pink bollworm. 

It is the only GM crop that is allowed in India.

Regulatory framework in India

Drugs and Cosmetics Rule (8th Amendment), 1988.

The Genetic Engineering Appraisal Committee (GEAC): It under the Ministry of Environment, Forest and Climate Change (MoEF&CC), is responsible for the assessment of proposals related to the commercial release of GM crops.

Acts and rules that regulate GM crops in India are:

Environment Protection Act, 1986 (EPA)

Biological Diversity Act, 2002

Plant Quarantine Order, 2003

GM policy under Foreign Trade Policy

Food Safety and Standards Act, 2006

3. Panchamasali Lingayats

Context

• Panchamasali Lingayats, a sub-caste of Karnataka’s dominant Lingayat community, have been demanding inclusion in Category 2A of the Other Backward Classes (OBC).

About

• Karnataka state has four categories of OBC: 2A, 2B, 3A and 3B based on the economic, social and educational status. 
• These communities get preferential reservations in jobs and educational institutions based on the categories. 
• While 2A are the most backward, 2B are moderate, and a little above them is 3A and 3B.

Panchmasali lingayat ??

• The Lingayats are followers of 12th-century social reformer Basavanna, who was inspired by the Bhakti Movement. 
• A treasurer in the court of King Bijjala II,  Basavanna rejected Brahmin rituals and temple worship and envisaged a society that was casteless, free of discrimination, and where men and women had equal opportunities.  
• Lingayats had been classified as a Hindu subcaste called “Veerashaiva Lingayats” and they are considered to be Shaivites.

4. Vishnupad and Mahabodhi Temples .

Vishnupad Temple

• The Vishnupad Temple at Gaya: The Hindu temple is dedicated to Lord Vishu.
  • Architecturally, the temple is around 100 feet tall and has 44 pillars. 
  • It is located on the banks of the Falgu river and was built in 1787 on the orders of Queen Ahilyabai Holkar of Ahmadnagar.

Mahabodhi Temple at Bodh Gaya

The Mahabodhi Temple Complex at Bodh Gaya is a UNESCO World Heritage Site. 

• The temple stands to the east of the Mahabodhi Tree, where Gautam Buddha is believed to have attained nirvana. 
• The temple has a unique shape and a height of 170 feet.
• The Mahabodhi Temple Complex is the first temple built by Emperor Asoka in the 3rd century B.C., and the present temple dates from the 5th–6th centuries.

5. CLIMATE FINANCE

Source- Indian express

News..

The 2024 Union Budget, presented by the Finance Minister, includes developing a taxonomy for climate finance to enhance the availability of capital for climate adaptation and mitigation.

What is taxonomy for climate finance?

• Climate finance taxonomy refers to a set of standardised regulations and guidelines to inform companies and investors on making impactful investments towards environmental conservation and combating the climate crisis.
  • It is a system that classifies which parts of the economy may be marketed as sustainable investments. 
  • It helps guide investors and banks in directing trillions toward impactful investments to tackle climate change.
• Taxonomies for sustainable climate financing, in general, include a detailed list of economic sectors and activities and corresponding criteria that determine if it aligns with larger climate goals.
• Countries Having the System: South Africa, Colombia, South Korea, Thailand, Singapore, Canada, and Mexico are some of the countries which have developed taxonomies. The European Union has done this as well.