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Concept no. 36 - Parliament passes Compensatory Afforestation Fund Bill, 2016

The Parliament has passed the Compensatory Afforestation Fund Bill, 2016 after it was

approved by the Rajya Sabha.

The bill provides for establishment of funds under the public accounts of the Centre and

State levels for compensatory afforestation.

Salient features of the bill

1. Establishes National Compensatory Afforestation Fund (NCAF) under the Public Account

of India, and a State Compensatory Afforestation Fund under the Public Account of each

state.

2. The payments into the funds include compensatory afforestation, net present value of

forest (NPV) and any project specific payments.

3. The NCAF will get 10% of funds collected and the remaining 90% will go to respective

State Fund.

4. The collected funds will be utilised for afforestation, regeneration of forest ecosystem,

wild life protection and forest related infrastructure development.

5. Establishes National and State Compensatory Afforestation Fund Management and

Planning Authorities to manage the funds.

Net present value (NPV) of forest: It is the value of diverted forest which is calculated

and recovered from the user agency for diverting forests. It is calculated for 50 years

period. Basically an expert committee calculates the NPV for every patch of the forest.

Comment

The legislation will allow states to access nearly 42000 crore rupees that is lying idle and

channel it into afforestation projects.

It has provisions for administration of funds and utilization of funds by the user agencies to

undertake plantations, protection of forests and forest-related infrastructure development.

Objections on the bill

1. Provisions of the Bill vesting greater powers in the forest bureaucracy than on resident

tribals.

2. The possible violation of tribal rights, and

3. Gram panchayats not having the final say in deciding what kind of forests could be

grown

4. Several members of the House also raised doubts on whether it would lead to an

ecologically-sustainable replenishing of forests, and whether tribals were not persecuted

by officialdom under the garb of regenerating forests.

Assurance by government

The deficiencies in the bill would be addressed within the Rules of the Bill. Any deficiencies could be dealt with in future after a lapse of 1 year, he added. The provisions of the Panchayati Raj Act are powerful enough to ensure that forest rights [of tribals] and consent

of gram panchayats are respected, said Mr. Dave, Union Minister of Environment, Forest and Climate Change.

History of the bill The Bill was first passed in the Lok Sabha during the UPA government’s tenure but was in cold storage after opposition in the Rajya Sabha. It was again cleared by the Lok Sabha this

year after incorporating amendments.

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Concept no. 37 - AADHAR Act

The Union Government has notified the UIDAI (Terms and Conditions of Service of

Chairperson and Members) Rules, 2016 to give legal status to Unique Identification

Authority of India (UIDAI).

These rules have been framed as per provisions of Aadhaar (Targeted Delivery of Financial

and Other Subsidies, Benefits and Services) Act, 2016.

Key Facts

These rules have detail provisions for appointment of its chairperson and members.

1. The chairperson of UIDAI will be selected on the recommendation of a search-cum-

selection committee headed by the Cabinet Secretary.

2. Besides, Secretaries of Department of Personnel and Training, Finance and Department

of Electronics and Information Technology (DEITY) and two experts will be its members.

3. The two experts will be nominated by the Union Communications and IT Minister. The

Chairperson will draw a salary of the level of a Secretary.

Presently over 102 crore persons in the country have unique identity numbers and

Aadhaar card. The Aadhaar has been linked to more than 12 crore LPG consumers, 27 crore

bank accounts, 13 crore ration cards holders and 7 crore MGNREGA workers.

Background

Union Government is going to notify the Aadhaar Act in two phases for complete

operationalisation of the Act.

After the chairperson and members are appointed they will pass the regulations for

notifying rest of the Act.

Presently, only few Sections of the Act have been notified for operationalisation.

Aadhar's Money Bill row to Supreme Court

The Supreme Court agreed to hear in detail a challenge to the passing of the Aadhaar Bill as

a Money Bill even as the Union government said the judiciary had no jurisdiction to

encroach on legislative procedure in Parliament, where the Speaker was the final authority

to decide on money bill.

Claims by union government in favour of aadhar as money bill

Attorney-General Mukul Rohatgi said the government saved Rs.30,000 crore to Rs.50,000

crore by linking thousands of subsidies to Aadhaar verification.

Claim by critics

The Aadhar bill sought to give legal staus to aadhar and thus in way dealt directly with

money matters as mentioned under 110 of Indian Constitution.

Money Bill

A money bill is a bill that deals with one or more money matters mentioned under Art. 110.

Following matters constitute money matters:

a. The imposition, abolition, alteration etc. of any tax.

b. Borrowing or guarantee by Government of India.

c. Custody, receipt, payment, withdrawal out of Consolidated Fund of India.

d. Declaration of any expenditure as charged on Consolidated Fund of India.

e. Custody, payment into or withdrawl of money out of Contingency Fund of India.

f. Custody, payment into or receipt out of Public account of India.

g. Audit and accounts of Union or of a State

h. Any other matter incidental to above matters.

Procedure to pass money bill

Money bill can be introduced only in Lok Sabha and it can be introduced only on the

recommendation of President. (The bills which are introduced on behalf of Council of

Ministers are introduced on recommendation of President).

It is the Speaker who certifies whether the bill is money bill or not and his decision is final

in this regard i.e. cannot be questioned in any court. Money bill requires simple majority for

its passage.

Lok Sabha enjoys overriding powers in the passage of money bill. When the money bill is

presented in Rajya Sabha after its passage in Lok Sabha, Rajya Sabha has the following

options:

a. It also passes the bill.

b. It rejects the money bill. On being rejected, the money bill is deemed to have been

passed by both the houses of Parliament.

c. It takes no action on the bill for 14 days. On expiry of 14th day, the bill is deemed to

have been passed by both the houses of Parliament.

d. Rajya Sabha can suggest amendments to money bill, then the bill goes back to Lok

Sabha and it is deemed to have been passed by both the houses in the form in which Lok

Sabha passes the bill.

There is no deadlock between the two houses over the passage of money bill because Lok

Sabha has far more powers than Rajya Sabha.

When a money bill is presented to President for his assent, then by convention, he shall

give his assent to the money bill.

Interest of Government in Passing Aadhar bill as money bill

Existing BJP Government has majority in Lok Sabha but not in Rajya Sabha. Thus, by

adopting aadhar bill as money bill, government reduced the role of rajya sabha in passage

of the bill.

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Concept No. 38 - World Happiness Report

About The World Happiness Report 2017

It is the fifth such report since the first was published in 2012. The World Happiness

Report is a measure of happiness published by the United Nations Sustainable

Development Solutions Network (SSDN).

India s position

India ranked at 122nd behind Pakistan and Nepal in the global list of the happiest

countries.

India ranked at 122 out of 155 countries, four notches below its previous rank of 118.

India was behind all South Asian Association for Regional Cooperation (SAARC) nations

except Afghanistan that stood at 141.

About SSDN

In 2012, UN Secretary-General Ban Ki-moon launched the UN Sustainable Development

Solutions Network (SDSN) to mobilize global scientific and technological expertise to

promote practical problem solving for sustainable development, including the design and

implementation of the Sustainable Development Goals (SDGs).

SSDN aim to accelerate joint learning and help to overcome the compartmentalization of

technical and policy work by promoting integrated approaches to the interconnected

economic, social, and environmental challenges confronting the world. The SDSN works

closely with United Nations agencies, multilateral financing institutions, the private sector,

and civil society.

The secretariat of the Sustainable Development Solutions Network is located in Paris,

France, and New York, USA.

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Concept No. 39 - BBIN

How it came into existence?

The sub-grouping, BBIN as it is referred to, was an alternative mooted by the government

after Pakistan rejected the Motor Vehicles Agreement (MVA) at the SAARC summit in

Kathmandu in 2014.

What does BBIN aim to do?

It seeks to allow trucks and other commercial vehicles to ply on one another s highways to facilitate trade.

What all countries are party to it?

Of the other SAARC members, Sri Lanka and the Maldives are not connected by land, and

Afghanistan could only be connected if Pakistan was on board.

Down to just three countries now after Thimphu s decision, India, Nepal and Bangladesh will have to decide whether to wait for Bhutan to reconsider or to press ahead with a truncated BIN arrangement.

Why did Bhutan opt out of BBIN?

The main concern expressed by Bhutanese citizen groups and politicians is over increased

vehicular and air pollution in a country that prides itself on ecological consciousness.

What should India do?

Despite the setback, New Delhi must go on with its efforts because:

1. Bhutan s objections are environmental, not political, and its government may well change its mind as time goes by.

2. Dry runs have been conducted along the routes, and officials estimate the road links

could end up circumventing circuitous shipping routes by up to 1,000 km.

3. Bhutan s concerns may be assuaged if India considers the inclusion of waterways and riverine channels as a less environmentally damaging substitute.

4. A similar initiative for the Asian Highway project under the BCIM (Bangladesh-China-

India-Myanmar) corridor got a boost as countries moved to upgrade the dialogue to the

governmental level.

Connectivity is the new global currency for growth and prosperity as it secures both trade

and energy lines for countries in route, and India must make the most of its geographic

advantages.

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Concept No. 40 - Solar Power Tree

The Union Ministry of Science and Technology has launched Solar Power Tree , an innovative way to generate electricity by harnessing maximum solar energy in a limited

space.

Key Features of Solar Power Tree

1. The Solar Power Tree has been developed by the CSIR (Council of Scientific and

Industrial Research)

2. It can harnesses solar energy for producing electricity with an innovative vertical

arrangement of solar cells.

3. It reduces the requirement of land as compared to conventional Solar Photovoltaic

layout. It keeps the land character intact and is viable in both rural and urban areas.

4. It takes only 4 square feet of land for installing a 5 KW Solar Power tree. But in a

conventional horizontal layout for generating 5 KW it requires 400 square feet of land.

5. On an average, it harnesses more sunrays for one hour in a day as photovoltaic panels

are placed at higher height.

6. It can harness up to 10-15% more power in comparison to a conventional layout on

ground.

7. It has a battery back-up of 2 hours on full load and can give light even after sunset.

8. It is facilitated with water sprinkler at the top for self-cleaning of panels which help to

increase the efficiency of the solar panels.

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Concept No. 41 - Madhya Pradesh becomes first state to have Happiness

Department

Madhya Pradesh became the first state in India to have Happiness Department that will work as knowledge resource centre on the subject of happiness on the lines of Bhutan.

Key Facts

The Happiness Department will work under a working committee headed by a chairman. The committee will evaluate the state s gross happiness.

The department will prepare guidelines for coordination between different departments

like women and child development, health, and sports for propagating happiness in the

state.

It will prescribe action plan and activities for experiencing happiness by identifying and

defining the parameters of happiness and efficiency.

It will also undertake constant researches and surveys for expanding means happiness and

improve norms to assess them. It will publish reports pertaining to status of happiness.

Bhutan is the first country in the world to come up with the concept of Gross National

Happiness (GNH). It has fixed standards of living, education, good governance, health and

psychological happiness among the various parameters that make its citizens happy.

The World Happiness Report 2016 published by the United Nations ranks India at 118th

position among 156 countries.

Concept No. 42 - Ramon Magsaysay award winners

Bezwada Wilson, a renowned campaigner against manual scavenging, and Carnatic singer

T.M. Krishna from Chennai were named for the prestigious Magsaysay Award.

About Bezwada Wilson

Born into a Dalit family in Karnataka, Mr. Wilson, 50, is the national convener of the Safai

Karmachari Andolan formed in 1993. Mr. Wilson was rewarded for his work on reducing

the activity of manual scavenging. Manual scavenging is the work of removing by hand

human excrement from dry latrines and carrying on the head the baskets of excrement to

designated disposal sites.

A hereditary occupation, manual scavenging involves 180,000 Dalit households cleaning

the 790,000 public and private dry latrines across India; 98 per cent of scavengers are

meagrely paid women and girls.

About Mr. Krishna Under the category Emergent Leadership, Mr. Krishna was chosen for the award for bringing social inclusiveness in culture. The award committee hailed him for showing that music can indeed be a deeply transformative force in personal lives and society itself. Krishna was born into a Brahmin family in Chennai and was trained right from the

tender age of six in the refined Carnatic music.

About Ramon Magsaysay awards

The Ramon Magsaysay Award is an annual award established to perpetuate former

Philippine President Ramon Magsaysay's example of integrity in governance, courageous

service to the people, and pragmatic idealism within a democratic society. The prize was

established in April 1957 by the trustees of the Rockefeller Brothers Fund based in New

York City with the concurrence of the Philippine government.

The Ramon Magsaysay Award Foundation gives the prize to Asianindividuals achieving

excellence in their respective fields. The awards were given in six categories, five of which

were discontinued in 2009:

• Government Service (1958–2008) • Public Service (1958–2008) • Community Leadership (1958–2008) • Journalism, Literature, and Creative Communication Arts (1958–2008) • Peace and International Understanding (1958–2008) • Emergent Leadership (2001– ) • Uncategorized (2009– )

Concept No. 43 - Indigenous Tejas inducted into Air Force

First indigenous fighter aircraft The first two contemporary or fourth generation Light Combat Aircraft Tejas, designed and built in India, joined the Indian Air Force s squadron. The induction marked the

fruition of a 33-year, nearly Rs. 8000-crore national dream to have an Indian fighter in the country s air defence fleet.Tejas has been developed for the IAF and the Navy by the

Aeronautical Development Agency (ADA) starting 1985 and produced by the public sector

aircraft manufacturer, Hindustan Aeronautics Ltd, both based in Bengaluru.

HAL said it was ramping up production at its two dedicated production lines. The IAF had

ordered 40 LCA in two versions and promised to buy another 80 in the upgraded Mark 1A

version. The first 20 are expected by 2018-19.

Presently used fighter aircraft

The current IAF fighters are the French-origin Mirage-2000s and the Russian origin

Sukhoi-30s and the aged MiGs.

The LCA was conceived in 1985 to replace the MiG-21 series.

So what exactly are the features of Tejas?

1. It can be maneuvered in any direction regardless of pure aerodynamic principles.

2. It is designed to meet the tactical requirements of a modern air force and is a multi-role

aircraft capable of comprehensive air superiority and air defence roles.

3. It has the fly-by-wire system, which means that the manual flight control has been

replaced by an electronic interface which automatically maneuvers the flight, helping it

stabilise, when needed. Signals sent by the aircraft computers are translated into actions by

the aircraft itself, without the input of a pilot.

4. The material that Tejas is made of is chosen such that the aircraft can be of the lightest

weight possible and yet strong at the same time. 45% of its airframe is made of CFC

materials.

These materials also call for fewer joints or rivets, increasing the aircraft s reliability and lowering its susceptibility to structural cracks which may be caused by fatigue.

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Concept No. 44 - Centre lets microbeads off the hook

What are Microbeads?

Microbeads, also called microplastics, small pellets of plastic, extensively used in personal care products such as shampoo, baby lotion and face cream and considered toxic to marine life.

Status of Microbeads

They are being banned internationally but Indian government has not banned them. The United States has promulgated a ban, which will come into effect next July, on cosmetic products containing microbeads. Over 299 million tonnes of plastic was produced worldwide in 2013 some of which made its way to oceans, costing approximately $13 billion per year in environmental damage to marine ecosystems, says a June 2015 report by the United Nations Environmental Programme that investigated the possible harm by microbeads/microplastics.

Arguments for ban

These plastics are too small to be caught by sewage treatment and water filtration techniques and they pass unchecked into rivers and seas and contaminated them. They take centuries to degrade and worse, are sometimes eaten by fish and other aquatic animals and could even make their way into human diets.

Concept No. 45 - Solar Impulse -2 Completes its Global Journey

About Solar Impulse Project

Solar Impulse is a Swiss long-range experimental solar-powered aircraft project, and also the name of the project's two operational aircraft. The privately financed project is led by Swiss engineer and businessman André Borschberg and Swiss psychiatrist and aeronaut Bertrand Piccard, who co-piloted Breitling Orbiter 3, the first balloon to circle the world non-stop. The Solar Impulse project's goals were to make the first circumnavigation of the Earth by a piloted fixed-wing aircraft using only solar power and to bring attention to clean technologies.

Solar Impulse 1

The aircraft are single-seat monoplanes powered by photovoltaic cells; they are capable of taking off under their own power. The prototype, often referred to as Solar Impulse 1, was designed to remain airborne up to 36 hours. It conducted its first test flight in December 2009. In July 2010, it flew an entire diurnal solar cycle, including nearly nine hours of night flying, in a 26-hour flight. Solar Impulse 2

A second aircraft, completed in 2014 and named Solar Impulse 2, carries more solar cells and more powerful motors, among other improvements. Solar Impulse 2 is made of carbon fiber and has 17,248 solar cells built into the wings that supply the plane with renewable energy, via four motors. The solar cells recharge four lithium polymer batteries, which provide power for night flying. Journey of Solar Impulse 2

In March 2015 Piccard and Borschberg began to circumnavigate the globe with Solar

Impulse 2, departing from Abu Dhabi in the United Arab Emirates. The aircraft was returned to Abu Dhabi in July 2016 after a multi-stage journey around the world. In July 2015, it completed the longest leg of its journey, from Japan to Hawaii. During that leg, the aircraft's batteries sustained thermal damage that took months to repair. Stops in India

Solar Impulse-2 had two stops in India namely Varanasi and Ahemdabad. How winds helped Solar Impulse-2 to carry it’s Global Journey?

Solar Impulse-2 made use of Tailwinds to fly across the globe. Tailwinds are winds blowing in the direction of travel of a vehicle or aircraft; a wind blowing from behind.

Concept No. 46 - A.P. set to be nuclear power hub of India

Nuclear Plants coming up in A.P.

1. After the government announced that U.S. company Westinghouse s Nuclear Power Project (NPP), planned in Gujarat's Mithi Virdi, is being moved to Andhra Pradesh, sources confirmed that Russian-owned Rosatom will build its next phase of six reactors in Andhra Pradesh as well. 2. With other States like Gujarat, Tamil Nadu, West Bengal and Maharashtra facing local protests over NPPs, the government is now pinning its mega plans for generating the clean energy on coastal Andhra Pradesh. In fact, if all the projects under consideration from Russia, the U.S. and NPCIL were to actually go through, NPPs in Andhra could account for more than 30,000 MW of the Modi government s goal of 63,000 MW installed capacity by 2031. 3. The site for the next set of six Russian reactors is believed to be Kavali in Nellore district. 4. Prior to the move by Westinghouse, U.S. company GE-Hitachi had also been allocated a site in Kovvada, where the State plans its nuclear park. 5. Another Russian project that has been hanging fire for years, to build 6 Reactors of 1000 MWe in West Bengal s Haripur may also be moved to Andhra Pradesh due to local protests. Study Relevant, Study Smart!

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Concept No. 47 - Ponzi Scheme

A Ponzi scheme (also a Ponzi game or a Ponzi) is a fraudulent investment operation where

the operator, an individual or organization, pays returns to its investors from new capital

paid to the operators by new investors, rather than from profit earned through legitimate

sources. Operators of Ponzi schemes usually entice new investors by offering higher

returns than other investments, in the form of short-term returns that are either

abnormally high or unusually consistent.

Ponzi schemes occasionally begin as legitimate businesses, until the business fails to

achieve the returns expected. The business becomes a Ponzi scheme if it then continues

under fraudulent terms. Whatever the initial situation, the perpetuation of the high returns

requires an ever-increasing flow of money from new investors to sustain the scheme.

The scheme is named after Charles Ponzi, who became notorious for using the technique in

1920. The idea was actually performed in real life by Ponzi who with his operation took in

so much money that it was the first to become known throughout the United States.

Rose Valley chit fund scam

According to reports, Rose Valley chit fund scam amounts to almost Rs 60,000 crore. The

scam is believed to be the biggest ponzi fraud in India and the scam itself is at least three

times bigger than Saradha scam.

Making of a scam – Rose Valley, as per the ED estimates reportedly collected money from depositors across

India, especially West Bengal, Assam and Bihar

– In March 2015, the ED arrested group’s chairman Gautam Kundu. – Huge amounts were allegedly siphoned off and transferred to other accounts

– ED is certain a major portion of the money was used to bribe politicians for smooth

running of the ponzi chain.

– Rose Valley hotels & entertainment reportedly owns nearly 23 properties across India

– In addition, all the 2,600 bank accounts of the company, which together hold cash

balances of Rs 800-1,000 crore, have been frozen by the government

– There are as many as 30 companies under the Rose Valley banner on paper, which

includes companies such as Rose Valley Airlines, Rose Valley Microfinance, Rose Valley

Fashion, Rose Valley Consultancy, Rose Valley Beverages, Rose Valley Infotech and Rose

Valley Housing Finance, says a news report

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Concept No. 48 - Proposal for National Water Commission: Mihir Shah committee

The Prime Minister’s Office PMO is receptive to the idea of forming the proposed National Water Commission (NWC) by merging the Central Water Commission (CWC) and the

Central Ground Water Board (CGWB).

The National Water Commission (NWC) was the key recommendation of a report by Mihir

Shah committee that was tasked with reorganising river water management in the country.

It will be formed by by merging the Central Water Commission (CWC) and the Central

Ground Water Board (CGWB)

Background

Since 1945 the CWC has been tasked with managing surface water and its associated

structures such as dams and barrages. The CGWB(set up in 1971) on the other hand, is

largely concerned with the quality of groundwater.

Utility of Integration

One, we must take a multidisciplinary view of water. We require professionals from

disciplines other than just engineering and hydrogeology.

If river rejuvenation is the key national mandate of the Ministry of Water Resources, then

this cannot happen without hydrologists and hydrogeologists working together, along with

social scientists, agronomists and other stakeholders.

Two, we need to adopt the participatory approach to water management that has been

successfully tried all over the world, as also in Madhya Pradesh, Gujarat and Andhra

Pradesh.

Three, we must view groundwater and surface water in an integrated, holistic manner.

CWC and CGWB cannot continue to work in their current independent, isolated fashion.

The one issue that really highlights the need to unify CWC and CGWB is the drying up of India’s peninsular rivers, the single most important cause of which is over-extraction of

groundwater.

Four, we need to focus on river basins which must form the fundamental units for

management of water. We have carefully studied the regional presence (or absence) of the

CWC and CGWB and proposed a way forward whereby the NWC is present in all major

river basins of India.

Committee’s Findings

1. The Shah report was scathing in its assessment of the CWC’s competence to manage India’s future water needs. “CWC and CGWB suffer from a lack of professionals.

2. Several States testified that huge delays in techno-economic appraisal by the CWC which

has become a matter of concern.

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Concept No. 49 - One Belt, One Road

The One Belt One Road OBOR initiative was announced by President Xi Jinping of China in .China s initiative for a modern-day silk road, known as One Belt, One Road OBOR , aims to connect Asia, Africa, Europe and their near seas. OBOR can be

conceptualized as the most ambitious infrastructure-based security initiative in the

world today. This has major implications for geopolitical relations and stability in

various regions.

Silk Road Economic Belt Fundamentally, the land-based Silk Road Economic Belt begins in Xi an, China, and linking up with the rest of Central Asia, Europe, the Middle East and Russia. The belt includes countries which were once situated on the original

Silk Road. In addition, South Asia and South East Asia are also included in the Belt. The

Silk Road Economic Belt focuses on connecting China to Europe through Central Asia

and Russia, the Persian Gulf through Central Asia and South East Asia, South Asia and

the Indian Ocean.

21st Century Maritime Silk Road The Maritime Silk Road will complement the Silk

Road Economic Belt, focusing on utilising sea routes and Chinese coastal ports to link

China with Europe via the South China Sea and the Indian Ocean, and the South Pacific

Ocean through the South China Sea.

In just 30 years, China has developed from a poor inward-looking agricultural country

to a global manufacturing powerhouse. Its model of investing and producing at home

and exporting to developed markets has elevated it to the world s second-largest

economy after the USA.

Now faced with a slowing economy at home, China s leadership is looking for new channels to sustain its appetite for growth at a time when developing neighbours are

experiencing rapidly rising demand. The project aims to redirect the country s domestic overcapacity and capital for regional infrastructure development to improve trade and

relations with Asean, Central Asian and European countries.

HOW DOES ONE BELT ONE ROAD WORK?

1. Trade and Investment Facilitation Measures: Improvement in trade and investment

facilitation via the removal of investment and trade barriers for the optimisation of the

potential for expanded cooperation

2. Infrastructure Development

• Railways and highways;

• Sea ports;

• Aviation;

• Energy – Oil and gas pipelines, power supply; and

• Communications – Optical networks.

3. Financial Integration between countries

4. Promotion of People-to-People Relations

Some worry that China has ulterior motives for naval expansion and energy security. To ease worries, President Xi Jinping has emphasised Three Nos

No interference in the internal affairs of other nations

Does not seek to increase the so called sphere of influence

Does not strive for hegemony or dominance

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Concept No. 50 - Recent SBI Merger applicable from 1st April, 2017

State Bank of India SBI , the country’s largest lender has been merged with its associate banks State Bank of Mysore, State Bank of Travancore, State Bank of Bikaner and Jaipur,

State Bank of Patiala, State Bank of Hyderabad and Bhartiya Mahila Bank.

What is the history of merger?

The merger of SBI with its associates began eight years ago when SBI merged State Bank of

Saurashtra with itself in 2008. In 2010, State Bank of Indore was also merged with the

larger bank. SBI has since made repeated attempts to merge its units but none came to

fruition due to a shortage of capital.

What are the benefits expected from merger?

1. The merged entity will have an asset base of about Rs.37 lakh crore, with nearly 24,000

branches and about 58,700 ATMs. SBI and its associates employed 2.85 lakh people in

2014-15.

2. While the network of SBI would stand to increase, its reach would multiply.

Rationalisation of branches would be undertaken.

3. Currently, no Indian bank features in the top 50 banks of the world. With this merger, SBI

has reached among top 50 global banks.

4. Any introduction of new technology by SBI would simultaneously be available uniformly.

The scale of operations and common cost would get rationalised.

5. The increased balance sheet size will enable the bank to obtain better pricing on both

internationally sourced funds and domestic deposits, thus helping it lower lending rates

and improve profitability.

Challenges from merger

The merger poses its unique set of challenges.

1. The scale of the task is substantial given the total staff strength. With more than two

lakh employees, the parent will add close to one-fifth that number by way of additions

posing a huge test in terms of integration of roles, salary, perquisite and pension structures

and, no less importantly, work cultures.

2. Much of the opposition from the bank unions stems from concerns relating to these

issues. Customers of the smaller, community or regional market-focussed subsidiaries such

as the State Bank of Travancore may be discomfited by having to deal with a larger, more

impersonal lender, one where the size of their accounts may be viewed as comparatively

marginal. For regulators, the new entity will throw up interesting oversight issues.

3. Already identified by the Reserve Bank of India as the country’s key Domestic Systemically Important Bank, or too big to fail in simple terms, the enlarged SBI’s capital adequacy norms will climb and may require far more by way of infusion of funds than the

Centre has committed so far.

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Concept No. - 51 Hope Spots

A hope spot is an area of an ocean that needs special protection because of its wildlife and

significant underwater habitats.

Andaman and Nicobar Islands and Lakshadweep islands have recently been named as the

new "hope spots" by the International Union for Conservation of Nature (IUCN) and

Mission Blue, an organization involved in the study of oceans.

The two group of islands, considered extremely rich in marine biodiversity, are the first

places in India to have been added in the list of 50 global 'hope spots'.

Need for declaring hope spots

About 12 per cent of land around the world is under some form of protection (as national

parks, world heritage sites, monuments) while less than one per cent of the oceans is

protected. By identifying such hope spots, IUCN wants to scale up the marine protection

necessary for sustainable development of the ocean .

Concept No. 52 - India International Exchange (INX)

The India INX is located in the country's first International Financial Services Centre (IFSC),

which is located in GIFT City. It was opened in 2017. The India INX is a wholly owned

subsidiary of BSE Ltd.

Important facts about India INX:

1. World's fastest international exchange: India INX will be the fastest international

exchange in the world in terms of order response time, with a median trade speed of four

microseconds. This is better than BSE's domestic exchange at Mumbai, which has a order

response time of six microseconds. In comparison, the second fastest international

exchange at Singapore has an order response time of 60 microseconds.

2. In step with the rest of the world: India INX will be open for trading for 22 hours every

day. The exchange will open for trading activity daily at 4 am when exchanges in Japan

open, and close at 2 am when exchanges in the US close.

3. What will be traded in it? The exchange can trade securities and products other than

Indian rupees. The securities and products that could be traded on the India INX are: equity

shares of companies incorporated outside India, depository receipts, debt securities,

currency and interest rate derivatives, index based derivatives, commodity derivatives and

such other securities that may be allowed.

4. Only derivative products presently: It will offer only derivative products – in equity,

currency and commodities – for the first six months at least.

5. More instruments to follow: During the second phase, it shall offer depository receipts

and bonds. The second phase is likely to take six months to one year for implementation.

Concept No. 53 - Asset Reconstruction company (ARC)

There is a proposal to push asset reconstruction companies (ARCs) either in private or

public sector to take on the non-performing assets of public sector banks. Economic survey

used the term PARA (Public Asset Rehabilitation Agency) for such ARC in public sector.

What is Asset reconstruction?

"Asset reconstruction" means acquisition of loan from any bank or financial institution for

the purpose of realisation of such loan.

How Asset reconstruction (ARC) company works?

1) ARC will take over the NPA's from banks for fixed cost which is less than the NPA

amount.

2) NPA is transferred to ARC along with any security which is pledged while taking loan.

3) Now ARC will issue security receipts for fixed interest rate and will raise money. (These

raised money can be invested in financial institutions)

4) Now ARC will start legal procedure to sell the pledged security in the market, which

takes many years depending on the complications involved. Meanwhile money raised by

issuing security receipts are used for meeting expenses of the ARC.

5) After selling the asset by clearing all litigations, ARC company will redeem (take back)

the security receipts which are issued earlier for agreed price.

Profit of ARC = Sale Price of security + interest on investment – purchase cost of npa –

interest on security receipts – Expenses.

Bad Banks

A bank set up to buy the bad loans of a bank with significant non-performing assets at

market price.

By transferring the bad assets of an institution to the bad bank, the banks clear their

balance sheet of toxic assests. Bad banks are proposed to be set up. Bad banks is another

term used for ARCs

100 important topics for prelims 2017

Concept 54 - US gives up Internet-naming powers to Internet Corporation for

Assigned Names and Numbers

The US is set to cede power of the Internet s naming system to a non-profit organisation

based ICANN — the Internet Corporation for Assigned Names and Numbers — a non-profit

organization on October 1, ending the almost 20-year process to hand over a crucial part of the Internet s governance. The Domain Naming System, DNS, is one of the Internet s most important components. It pairs the easy-to-remember web addresses with their relevant servers. Without DNS, one

would only be able to access websites by typing in its IP address, a series of numbers such as 4.66. . .

Users of the web will not notice any difference because ICANN has essentially been doing

the job for years.

Objections to ceding power But it s a move that has been fiercely criticised by some US politicians as opening the door to the likes of China and Russia to meddle with a system that has always been protected by the US. The proposal may significantly increase the power of foreign governments over

the Internet.

About ICANN

ICANN was created in 1998 to take over the task of assigning web addresses. Until that

point, that job was handled by one man — Jon Postel. He was known to many as the God of the Internet , a nod to his power over the Internet.Postel, who died not long after ICANN was created, was in charge of the Internet Assigned Numbers Authority (IANA).

Concept 55 - Google Duo: Video call app by Google

What is Google Duo?

Google Duo provides simplified one tap video calling on Android and Apple iOS platforms, and the ability to work better on low bandwidth connections.

Competitors

The application, which is being rolled out worldwide over the next few days, will compete with Microsoft s Skype and Apple s FaceTime.

Distinct Features

1. A distinct feature on the app — Knock Knock — allows people to see live video of a

caller who is in their phone book, before answering. Early reviewers said this would help

people look presentable before taking a call. The feature can be disabled totally, or callers

blocked.

2. Also, for video calls on the go, Duo switches between Wi-Fi and cellular data seamlessly,

without dropping the call.

3. Duo has been built with an emphasis on privacy and security, and all calls are end-to-

end encrypted, the company said.

4. Call quality adjusts to changing network conditions to keep one connected – when

bandwidth is limited, Duo will gracefully reduce the resolution to keep the call going

smoothly.

Concept 56 - Olympics Details

Japan s capital Tokyo gears up to host the Olympics Games.

Tokyo last hosted the summer Olympics in 1964

The 31st Summer Olympics (or 2016 Rio Olympics) hosted by Brazilian City, Rio de Janeiro

ended. The games had seen participations from 205 countries, including a first-ever

refugee team featuring in 306 events of 42 sporting disciplines.

Key Facts

Medals Tally: United States ended the Games at the top of the medals tally. They finished

with 46 Gold, 37 Silver and 38 Bronze.

Great Britain finished on second spot with 27 Gold, 23 Silver and 17 bronze. China finished

on third position with a tally of 26 Gold, 18 Silver and 26 Bronze.

India finished at joint 67th position with Mongolia in the medals tally with two medals.

They were won by Sakshi Malik (Bronze medal in 58 kg weight class of Wrestling) and PV

Sindhu (Silver medal in Badminton).

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