The Hindu Editorial : April 4 ,2019

The Hindu Editorial : April 4 ,2019

Dear Aspirants,

Daily Current Affairs (April 4, 2019) like many other sections is inevitable and this also helps to score in the Banking awareness, Static GK and Financial Awareness sections. Remember, Banking Awareness and Static Awareness Questions are asked from the General Awareness section. This will also help you to ride your preparations for the forthcoming exams.

A) Words and deeds: on Congress manifesto

In its campaign, the Congress must discuss the road map for implementing its manifesto

The Congress party in its manifesto pledges to follow a ‘wealth and welfare’ approach if voted back to power. In an attempt to appeal to the poor without scaring away the rich, it promises to create wealth through promotion of private enterprise and expand welfare for the vulnerable sections of society at an unprecedented scale. An ambitious minimum income guarantee scheme is to directly transfer ₹6,000 a month to the poorest 20% households. The National Rural Employment Guarantee Scheme, introduced by the Congress-led United Progressive Alliance government in 2005, is to be expanded to ensure employment for 150 days instead of the 100 days now. The promised expansion of health care, education and housing has attracted a lot of public attention, but equally eye-catching is the manifesto’s approach to several other critical questions of public policy. While welfare schemes are an attempt by the Congress to reconstruct its lost public support on the basis of a renewed development agenda, the manifesto tries to address many current questions that impact Indian democracy. Defamation will only be a civil offence; provisions for charging people for sedition will be removed from the Indian Penal Code; and the Armed Forces (Special Powers) Act will be amended to address human rights concerns. The party promises to expand reservations to private educational institutions, an unfinished component of UPA-I’s agenda of OBC reservations in educational institutions. Congress leaders stress that this manifesto addresses the needs and aspirations of the marginalised sections of society.

Election manifestos are important for political discussions ahead of elections, and for understanding the direction different political parties propose for the country. However, it must be kept in mind that parties overpromise ahead of elections, and the Congress must explain why it must not face that scepticism. Its manifesto has scant details about how its ambitious schemes will be funded. It is true that the Congress did deliver on many of the promises it made in 2004, though not entirely and to the full extent. Nonetheless, the Congress will do well to address follow-up questions on its schemes and their implementation. The manifesto has triggered a national debate on several issues that are close to people’s lives, and that is a welcome development. It has also prompted a fresh round of debate on broader topics such as India’s development path, the potential and limits of welfare and questions of fiscal discipline and revenue extraction. The Bharatiya Janata Party should join this debate on the merit in the Congress’s promises rather than use this as yet another opportunity to question the patriotism of its opponents. Details are inadequate, but the direction envisioned in the manifesto is encouraging.

B) Serious setback: on SC setting aside RBI’s ‘Feb. 12 circular’

Quashing of the ‘February 12 circular’ could undo credit discipline in the banking system

The Supreme Court order quashing a circular issued by the RBI on resolution of bad loans is a setback to the evolving process for debt resolution. The voiding of the February 12, 2018 circular could slow down and complicate the resolution process for loans aggregating to as much as ₹3.80 lakh crore across 70 large borrowers, according to data from the ratings agency ICRA. The circular had forced banks to recognise defaults by large borrowers with dues of over ₹2,000 crore within a day after an instalment fell due; and if not resolved within six months after that, they had no choice but to refer these accounts for resolution under the Insolvency and Bankruptcy Code. Mounting bad loans, which crossed 10% of all advances at that point, and the failure of existing schemes such as corporate debt restructuring, stressed asset resolution and the Scheme for Sustainable Structuring of Stressed Assets (S4A) to make a dent in resolving them formed the backdrop to this directive. The circular was aimed at breaking the nexus between banks and defaulters, both of whom were content to evergreen loans under available schemes. It introduced a certain credit discipline — banks had to recognise defaults immediately and attempt resolution within a six-month timeframe, while borrowers risked being dragged into the insolvency process and losing control of their enterprises if they did not regularise their accounts. RBI data prove the circular had begun to impact resolution positively.

It is this credit discipline that risks being compromised now. It is not surprising that international ratings agency Moody’s has termed the development as “credit negative” for banks. It is true that the circular failed to take into account the peculiarities of specific industries or borrowers and came up with a one-size-fits-all approach. It is also true that not all borrowers were deliberate defaulters, and sectors such as power were laid low by externalities beyond the control of borrowers. The RBI could have addressed these concerns when banks and borrowers from these sectors brought these issues to its notice. By taking a hard line and refusing to heed representations, the RBI may only have harmed its own well-intentioned move. That said, it is now important for the central bank to ensure that the discipline in the system does not slacken. The bond market does not allow any leeway to borrowers in repayment, and there is no reason why bank loans should be any different. The RBI should study the judgment closely, and quickly reframe its guidelines so that they are within the framework of the powers available to it under the law. Else, the good work done in debt resolution in the last one year will be undone.

VOCABULARY

1) vulnerable

Meaning : exposed to the possibility of being attacked or harmed, either physically or emotionally(adj).

Synonyms : accessible

Antonyms : protected

Example : “we were in a vulnerable position”

2) unprecedented

Meaning : never done or known before(adj).

Tamil Meaning : முன்னெப்போதும் இல்லாத

Synonyms : miraculous

Antonyms : regular

Example : “the government took the unprecedented step of releasing confidential correspondence”

3) manifesto

Meaning : a public declaration of policy and aims, especially one issued before an election by a political party or candidate(n).

Synonyms : promulgation

Example : “he may fudge key issues in the Labour manifesto”

4) Defamation

Meaning : the action of damaging the good reputation of someone; slander or libel(n).

Synonyms : denigration

Antonyms : flattery

Example : “she sued him for defamation”

5) sedition

Meaning : conduct or speech inciting people to rebel against the authority of a state or monarch(n).

Synonyms : mutiny

Antonyms : obedience

6) prompted

Meaning : (of an event or fact) cause or bring about (an action or feeling)(v).

Tamil Meaning : தூண்டியது

Synonyms : arouse

Antonyms : depress

Example : “the violence prompted a wave of refugees to flee the country”

7) extraction

Meaning : the action of extracting something, especially using effort or force(n).

Synonyms : eradication

Antonyms : addition

Example : “mineral extraction”

8) envisioned

Meaning : imagine as a future possibility; visualize(v).

Synonyms : behold

Antonyms : real

Example : “she envisioned the admiring glances of guests seeing her home”

9) quashing

Meaning : reject as invalid, especially by legal procedure(v).

Synonyms : repress

Antonyms : compliment

Example : “his conviction was quashed on appeal”

10) voiding

Meaning : declare that (something) is not valid or legally binding(v).

Synonyms : repress

Antonyms : encourage

Example : “the Supreme court voided the statute”

11) aggregate

Meaning : a whole formed by combining several separate elements(n).

Synonyms : corporate

Antonyms : uncombined

Example : “the council was an aggregate of three regional assemblies”

12) recognise

Meaning : identify (someone or something) from having encountered them before; know again(v).

Synonyms : discern

Antonyms : ignore

Example : “I recognized her when her wig fell off”

13) resolved

Meaning : firmly determined to do something(adj).

Synonyms : agree

Antonyms : begin

Example : “Constance was resolved not to cry”

14) dent

Meaning : a slight hollow in a hard even surface made by a blow or pressure(n).

Synonyms : incision

Antonyms : increase

Example : “there was a hideous dent in the front passenger door”

15) insolvency

Meaning : a slight hollow in a hard even surface made by a blow or pressure(n).

Synonyms : deterioration

Antonyms : achievement

Example : “there was a hideous dent in the front passenger door”

16) prove

Meaning : demonstrate the truth or existence of (something) by evidence or argument(v).

Synonyms : confirm

Antonyms : confuse

Example : “the concept is difficult to prove”

17) impact

Meaning : the action of one object coming forcibly into contact with another(n).

Tamil Meaning : தாக்கம்

Synonyms : buffet

Antonyms : avoidance

Example : “there was the sound of a third impact”

18) peculiarities

Meaning : a strange or unusual feature or habit(n).

Synonyms : eccentricity

Antonyms : simplicity

Example : “for all his peculiarities, she finds him quite endearing”

19) concerns

Meaning : relate to; be about(v).

Synonyms : burden

Antonyms : pastime

Example : “the story concerns a friend of mine”

20) slacken

Meaning : make or become slack(v).

Synonyms : diminish

Antonyms : enlarge

Example : “he slackened his grip”

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