Current Affairs for SSC CGL Exams - 07 December 2015

:: NATIONAL ::

Supreme Court agrees with Odd Even Formula

After being pulled up by the Delhi High Court and the National Green Tribunal for the worsening air pollution in the Capital, theDelhi government got a breather with none other thanChief Justice of India T.S.Thakur for odd-even formula” of car use
Chief Justice Thakur’s Bench is hearing a suo motu litigation requiring commercial vehicles plying throughDelhi to pay environmentalcompensation cess along with entry toll charges. However,the case recently reached aroad block when the private toll contractor employed by the Municipal Corporation ofDelhi objected to the Supreme Court order, saying that he instead would want to opt out of the toll contract itself.

:: INTERNATIONAL ::

WTO trade facilitation pact

India is likely to ratify the World Trade Organisation’s (WTO) Trade Facilitation Agreement (TFA), aimed at easing customs rules to expedite trade flows, during the Nairobi meeting of the global trade body from December 15 to 18.
Not using all the available safeguards could lead to greater chances of India finding it difficult to implement all its TFA-related commitments on time, thereby giving opportunities to other countries to drag it (India) to the WTO’s dispute settlement panel
In November 2015, WTO member countries had adopted a “protocol of amendment” to make the TFA a part of the overall WTO Agreement. However, the TFA will become operational only after two-thirds of the members ratify it. So far, only 53 of the 162 member countries have done so.
New Delhi is planning to ratify the TFA as part of the government’s initiatives to attract more investment by improving India’s ranking in the World Bank’s “ease of doing business” report, the sources said. The government wants India to leapfrog its position from 130th this year (out of 189 countries) to the top 100 next year and then in the top 50 soon.

Major reforms in the labour laws

The government is striving to introduce five more labour reform legislations in the winter session of Parliament, including the bills to introduce a new wage and industrial relations code and amend laws governing child labour and bonus payments.
These are in addition to the amendments to the Factories Act of 1948 that the government had listed for introduction in the Lok Sabha last week, but eventually wasn’t tabled. The only new bill to be introduced in Parliament’s lower house so far in this session is the Arbitration and Conciliation (Amendment) Bill, 2015.
The government has officially listed the Payment of Bonus (Amendment) Bill, 2015 for consideration and The government has also proposed to introduce the Child Labour (Protection and Regulation) Amendment Bill, 2012 in the Rajya Sabha this week. The Bill proposes that children below fourteen years of age may only be allowed to work in their own family enterprises. It also bars employment of children in hazardous occupations till the age of 18 years. Nobel laureate Kailash Satyarthi has, however, raised concerns about the Bill reducing the list of such occupations from 83 to just three mining, inflammable substances and explosives and hazardous occupations as per the Factories Act. passing in the Lok Sabha this week
The law is being changed to make more employees eligible for bonus and double such payments. It proposes to raise the salary ceiling for statutory bonus payments to Rs 21,000 per month from Rs 10,000 specified under the 1965 law.
The Small Factories (Regulation of Employment and Conditions of Services) Bill, for instance, seeks to make it easier for manufacturing firms to employ upto 40 workers by exempting them from compliance with six labour laws which include the Factories Act, the Industrial Disputes Act of 1947 and the Shops and Establishment Acts of respective states.
The code on wages aims to replace four diferent laws pertaining to salaries — the Payment of Wages Act of 1936, the Minimum Wages Act of 1948, Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. Similarly, the code on industrial relations would substitute three diferent laws — the Trade Unions Act of 1926, the Industrial Disputes Act and the Industrial Employment (Standing Orders) Act of 1946.
The government has also proposed to introduce the Child Labour (Protection and Regulation) Amendment Bill, 2012 in the Rajya Sabha this week. The Bill proposes that children below fourteen years of age may only be allowed to work in their own family enterprises.
It also bars employment of children in hazardous occupations till the age of 18 years.

Tata Group looks at $350 billion market capitalisation by 2025

With its listed firms adding over $100 billion to market capitalisation in the last 15 years, the Tata Group is looking at an increase of nearly $250 billion by 2025, including through acquisitions.
As per its 2025 vision, Tata group aims to be amongst “the 25 most admired corporate and employer brands globally, with a market capitalisation comparable to the 25 most valuable companies in the world

Asset quality of Public sector banks is hampering growth

The current problem of mounting bad loans on the books of PSU banks first caught public attention in early 2012 when a spurt, especially in their restructured standard loans (uncollectible loans that have been given a fresh lease of life) happened.
As of endMarch 2012, ratio of gross NPA plus restructured standard loans (for this combination, a creative and somewhat obfuscating term —stressed assets — was coined later) rose to 8.8 per cent from 6.6 per cent a year earlier.
The corresponding numbers for new private sector and foreign banks were much lower.
The conventional wisdom regarding the provenance of the record build up of impaired loans at PSU banks is the decline in the country’s growth rate in the aftermath of the Global Financial Crisis (2008-10) and the policy atrophy during the second UPA regime, causing significant damage to new projects in infrastructure, power generation and civil aviation sectors.
This line of reasoning is not completely devoid of merit, but it does not explain why PSU banks should be bleeding profusely and private sector and foreign banks should remain largely unscathed.
RBI issued a set of comprehensive guidelines on restructuring of loans in August 2008, but there was no relaxation of asset classification norms.
However, soon thereafter in April 2009, major relaxations in asset classification norms were announced, permitting restructured loans to be categorized as ‘standard’, with a very interesting rider though.
Banks could take advantage of the relaxation provided the restructuring was done within 120 days from the date of approval under the CDR mechanism and within 90 days from the date of receipt of application in other cases.
Lack of accountability has been most manifest at the level of the boards of PSU banks.
The PJ Nayak Committee report has brought out several interesting bits of anecdotal information about their dysfunctional role.
But alongside reforms in this regard, the past boards should be held accountable for what appears to have been systematic gaming of rules on restructuring.
We have five specific suggestions to deal with this problem. First, the government and RBI must recognize the scale of the problem. The capitalization of PSU banks is grossly inadequate.
Further, high impaired assets of PSU banks have already begun impeding credit flow to the economy thereby hindering growth.
Second, following the lead provided by SBI in this regard in 201415, PSU banks should be ready to sell their NPAs to asset reconstruction companies for cash at deep discount, if necessary.
Third, disclosure of full and comprehensive information on the financial health of banks does not happen in India
Fourth, government must be prepared to lower its stake in PSU banks. The ‘Indradhanush’ reforms are just a good beginning. For achieving something real and durable, the government, the political class and the opinion-makers will have to jettison the long-held ideological belief that reduction of government’s equity stake below 50 per cent will be an act of sedition and sacrilege.
Fifth, all stakeholders must realize that commercial banking is undergoing a major transformation right now, driven largely by technology.