Current based PRELIMS QUESTION 3 MARCH 2020

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1. Prompt Corrective Action (PCA) sometimes seen in the news, which of the following statement is incorrect regarding this?
(a) It is a quick corrective measure taken in case a bank is found to be having low Capital Adequacy Ratio (CAR) or high NPAs.
(b) It is a quick corrective measure taken in case a bank is found to be having high Non-Performing Assets (NPAs).
(c) It is applicable to commercial banks, co-operative banks, non-banking financial companies (NBFCs) and FMIs.
(d) None of the above

2. Consider the following statements regarding The Lokpal.
1. The Lokpal consists of eight Members including a Chairperson out of whom 50% are Judicial Members.
2. The salary, allowances and other conditions of services of the Chairperson are the same as that of Chief Justice of India.
3. Lokpal will have power of superintendence and direction over any central investigation agency including CBI for cases referred to them by the Lokpal.
4. The Lokpal has jurisdiction over all public servants including personnel from Armed Forces.
Which of the statement(s) given above is/are correct?
(a) 1, 2 and 3 only
(b) 2 and 3 only
(c) 2, 3 and 4 only
(d) 1, 2, 3 and 4


3. Consider the following statements with respect to The Indian Science Congress.
1. Indian Science Congress Association is a premier scientific organisation started in the year 1914 in Kolkata.
2. The Farmer’s Science Congress was inaugurated for the first time in the Indian Science Congress, highlighting the importance of farmer’s innovations and their scientific validity.
Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

4. Consider the following statements with respect to International Criminal Court (ICC).
1. India did not sign the Rome Statute, and thus, is not a member of ICC because of following reasons.
2. ICC is governed by an international treaty called The Rome Statute.
3. The ICC court has retrospective jurisdiction.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3

5. Consider the following statements regarding Index of Industrial Production (IIP).
1. Mining, manufacturing, and electricity are the three broad sectors in which IIP constituents fall.
2. It is compiled and published by the Central Statistical Organization, Ministry of Statistics and Programme Implementation.
3. While the Annual Survey of Industries (ASI) is a short term indicator, IIP is the prime source of long-term industrial statistics.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3

 

1.Answer-c
Explanation-
Reserve Bank of India PCA Framework for commercial banks
The RBI has specified certain regulatory trigger points, as a part of PCA Framework, in terms of three parameters, i.e. capital to risk weighted assets ratio (CRAR), net non-performing assets (NPA) and Return on Assets (RoA), for initiation of certain structured and discretionary actions in respect of banks hitting such trigger points.
The PCA framework is applicable only to commercial banks and not extended to co-operative banks, non-banking financial companies (NBFCs) and FMIs.
The trigger points along with structured and discretionary actions that could be taken by the Reserve Bank are described below:
CRAR
(i) CRAR less than 9%, but equal or more than 6% – bank to submit capital restoration plan; restrictions on RWA expansion, entering into new lines of business, accessing/renewing costly deposits and CDs, and making dividend payments; order recapitalisation; restrictions on borrowing from inter-bank market, reduction of stake in subsidiaries, reducing its exposure to sensitive sectors like capital market, real estate or investment in non-SLR securities, etc.
(ii) CRAR less than 6%, but equal or more than 3% – in addition to actions in hitting the first trigger point, RBI could take steps to bring in new Management/ Board, appoint consultants for business/ organizational restructuring, take steps to change ownership, and also take steps to merge the bank if it fails to submit recapitalization plan.
(iii) CRAR less than 3% – in addition to actions in hitting the first and second trigger points, more close monitoring; steps to merge/amalgamate/liquidate the bank or impose moratorium on the bank if its CRAR does not improve beyond 3% within one year or within such extended period as agreed to.
Net NPAs
(i) Net NPAs over 10% but less than 15% – special drive to reduce NPAs and contain generation of fresh NPAs; review loan policy and take steps to strengthen credit appraisal skills, follow-up of advances and suit-filed/decreed debts, put in place proper credit-risk management policies; reduce loan concentration.
(ii) Net NPAs 15% and above – In addition to actions on hitting the above trigger point, bank’s Board is called for discussion on corrective plan of action.
ROA less than 0.25% – restrictions on accessing/renewing costly deposits and CDs, entering into new lines of business, bank’s borrowings from inter-bank market, making dividend payments and expanding its staff; steps to increase fee-based income; contain administrative expenses; special drive to reduce NPAs and contain generation of fresh NPAs; and restrictions on incurring any capital expenditure other than for technological up gradation and for some emergency situations.

 

2.Answer-b
Explanation
Former Supreme Court judge Justice Pinaki Chandra Ghose was appointed as the first head of the Lokpal.
What is the composition?
Lokpal is the national anti-corruption ombudsman. Under the 2013 Act, the Lokpal should consist of a chairperson and such number of members, not exceeding 8.
Of the members, 50% should be judicial members. Also, not less than 50% of the members should be from among persons belonging to the SCs, the STs, OBCs, minorities and women. The same rules apply for members of the search committee.
How is the selection done?
The selection procedures for the members and the chairperson are the same. A search committee will prepare a panel of candidates, and a selection committee will recommend names from among this panel. The Chairperson and the Members are appointed by the President of India by warrant under his hand and seal and hold office for a term of five years from the date on which they enter upon the office or until they attain the age of 70 years, whichever is earlier. Salaries, allowances and service conditions of the Lokpal chairperson will be the same as that for the Chief Justice of India. For other members, these will be the same as that for a judge of the Supreme Court.
What after the selection process?
It has an Inquiry Wing, headed by the Director of Inquiry. This conducts preliminary inquiry into any offence allegedly committed by a public servant punishable under the Prevention of Corruption Act, 1988. It also have a “Prosecution Wing, headed by the Director of Prosecution. This is to prosecute public servants in relation to any complaint by the Lokpal under this Act.
Who all does the Act cover?
The Act covers a wide range of public servants with various rules for each. These ranges from the Prime Minister, ministers and MPs, to groups A, B, C and D employees of the central government.
It shall apply to public servants in and outside India.
The Act also includes the Lokpal’s own members under the definition of “public servant”.
The Chairperson, Members, officers and other employees of the Lokpal, while functioning under the provisions of the Act, shall be deemed to be public servants.
A complaint under this Act shall only relate to a period during which the public servant was holding or serving in that capacity.
The Armed forces do not come under its ambit.
How does an inquiry proceed?
The Lokpal may, after receiving a complaint against any public servant, order a preliminary inquiry which has to be completed within 90 days.
After receiving the report of the preliminary inquiry, the Lokpal may order an investigation by any agency or departmental proceedings.
S/he may also take any other appropriate action by the competent authority, or it can order closure of the proceedings.
Lokpal will have power of superintendence and direction over any central investigation agency including CBI for cases referred to them by the Lokpal.
What are the limitations?
If a complaint is filed against the PM, the Lokpal shall inquire or cause an inquiry to be conducted into the allegation of corruption. However, the Act does not allow a Lokpal inquiry if the allegation against the Prime Minister relates to
1. international relations
2. external and internal security
3. public order
4. atomic energy
5. space
Also, complaints against the PM are not to be probed unless the full Lokpal bench considers the initiation of an inquiry and at least 2/3rds of the members approve it. Such an inquiry against the PM (if conducted) is to be held in camera. If the Lokpal concludes that the complaint deserves to be dismissed, the records of the inquiry are not to be published or made available to anyone.

What are the Lokayuktas?
The Lokayuktas are the state equivalents of the central Lokpal. States have to establish the Lokayukta to deal with complaints on corruption against certain public functionaries in the states. In some states, Lokayuktas were already functioning when the 2013 Act was passed. Most states, however, are without a Lokayukta even after the 2013 Act. The Supreme Court recently directed these states to take steps for appointment of Lokayukta.

 

 

3.Answer-c
Explanation-
The Farmer’s Science Congress was inaugurated for the first time in the 107 years of history of the Indian Science Congress, highlighting the importance of farmer’s innovations and their scientific validity.
Farmers Science Congress was organized as a part of the ongoing 107th Indian Science Congress at University of Agricultural Sciences, Bengaluru.
Around 120 innovative farmers from across the country are participating in Farmers Science Congress and showcase their products.
Experts from the different agriculture sector discussed on three themes:
1. Farmers innovation on integrated agriculture and entrepreneurship for doubling farmers income
2. Climate change, bio-diversity, conservation, ecosystem services & farmers empowerment
3. Agrarian distress, rural bio-entrepreneurship, policy issues in a day event.
The Indian Science Congress Association (ISCA) owes its origin to the foresight and initiative of two British Chemists, namely, Professor J. L. Simonsen and Professor P.S. MacMahon. It occurred to them that scientific research in India might be stimulated if an annual meeting of research workers somewhat on the lines of the British Association for the Advancement of Science could be arranged.
 To advance and promote the cause of science in India.
 To hold an annual congress at a suitable place in India.
 To publish such proceedings, journals, transactions and other publications as may be considered desirable.
 To secure and manage funds and endowments for the promotion of Science inlcuding the rights of disposing of or selling all or any portion of the properties of the Association.
 To do and perform any or all other acts, matters and things as are conductive to, or incidental to, or necessary for, the above objects.
The first meeting of the Congress was held from January 15-17, 1914 at the premises of the Asiatic Society, Calcutta, with the Honourable Justice Sir Asutosh Mukherjee, the then Vice-Chancellor of the Calcutta University, as President.
The 107th edition of the Indian Science Congress (ISC) was recently held in Bengaluru.

 

4.Answer-b
Explanation-
International Criminal Court (ICC)
Governed by an international treaty called ‘The Rome Statute’, the ICC is the world’s first permanent international criminal court.
It investigates and, where warranted, tries individuals charged with the gravest crimes of concern to the international community: genocide, war crimes, crimes against humanity and the crime of aggression. Through international criminal justice, ICC aims to hold those responsible for their crimes and to help prevent these crimes from happening again.
On 17 July, 1998 Rome Statute was adopted by 120 States in direction of creating a more just world. On 1 July, 2002 Rome Statute took effect upon ratification by 60 states, officially establishing the ICC. Since it has no retroactive jurisdiction, the ICC deals with crimes committed on or after this date.
After 2010 amendments – the Rome Statute also sets new standards for victims’ representation in the Courtroom, and ensures fair trials and the rights of the defence.
Facts and Figures
It has 6 official languages: English, French, Arabic, Chinese, Russian and Spanish. It has 2 working languages: English and French.
ICC has 6 field offices: Kinshasa and Bunia (Democratic Republic of the Congo, “DRC”); Kampala (Uganda); Bangui (Central African Republic, “CAR”); Nairobi (Kenya), Abidjan (Côte d’Ivoire).
ICC Headquarters at The Hague, the Netherlands.
Organisation Structure
Four organs of the ICC
 Presidency conducts external relations with States, coordinates judicial matters such as assigning judges, situations and cases to divisions, and oversees the Registry’s administrative work.
 Judicial Divisions (18 judges in 3 divisions) Pre-Trial, Trial and Appeals – conduct judicial proceedings
 Office of the Prosecutor conducts preliminary examinations, investigations, and prosecutions.
 Registry conducts non-judicial activities, such as security, interpretation, outreach, support to Defence and victims’ lawyers etc.
The International Committee of the Red Cross (ICRC) is the Detention Centre’s inspecting authority and as such has unrestricted access and examine, on unannounced visits.
Jurisdiction and Working of Court
ICC has jurisdiction over four main crimes:
 The crime of Genocide
 Crimes against Humanity
 War crimes
 Crime of Aggression
The crimes were referred to the ICC Prosecutor by the United Nations Security Council (UNSC) pursuant to a resolution adopted under chapter VII of the UN charter.
ICC is not a UN organization but is has a cooperation agreement with the United Nations.
ICC cannot impose a death sentence; it can impose lengthy terms of imprisonment of up to 30 years or life when so justified by the gravity of the cases.
The ICC court has no retrospective jurisdiction as it can deal only with crimes committed after 1 July 2002 when the 1998 Rome Statute came into force.
India and ICC
India did not sign the Rome Statute, and thus, is not a member of ICC because of following reasons:
 State sovereignty
 National interests
 Difficulty in collection of evidences
 Problem to find impartial prosecutors
 Crime definition

 

5.Answer-b
Explanation
Index of Industrial Production
IIP is an index that shows the growth rates in different industry groups of the economy in a fixed period of time.
It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation.
IIP is a composite indicator that measures the growth rate of industry groups classified under: 1. Broad sectors, namely, Mining, Manufacturing, and Electricity; 2. Use-based sectors, namely Basic Goods, Capital Goods, and Intermediate Goods.
Base Year for IIP is 2011-2012.
The eight core industries of India represent about 40% of the weight of items that are included in the IIP.
IIP is the only measure on the physical volume of production.
It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc, for policy-making purposes.
IIP remains extremely relevant for the calculation of the quarterly and advance GDP estimates.
IIP vs ASI
While the IIP is a monthly indicator, the Annual Survey of Industries (ASI) is the prime source of long-term industrial statistics. The ASI is used to track the health of the industrial activity in the economy over a longer period. The index is compiled out of a much larger sample of industries compared to IIP.