Current Affairs 7th April

No move to vaccinate all adults now: Health Ministry #GS3 #SnT

With a growing public clamour for making vaccines available to all adults, the Union Health Ministry said on Tuesday that India was following a scientific protocol regarding administering vaccines and that it wasn’t possible “to suddenly ramp up” vaccinations.

On a day that the country reported administering a single-day record of 4.3 million shots, Health Secretary Rajesh Bhushan said, “When people say that India isn’t vaccinating fast enough, we must remember that vaccinating isn’t like buying something and carrying it home in a bag; it can’t be immediately accelerated.

We are following a scientific protocol. We have to observe people for half hour for side effects, reactions. Vaccines aren’t given as a matter of individual choice, but according to need.”

All countries had employed a restrictive criterion that prioritised the elderly, health care workers, those with comorbidities and India too was following a guidance protocol of the World Health Organisation (WHO) in prioritising those most at risk.

V.K. Paul, Member (Health), NITI Aayog claimed that India was the only country administering vaccines to healthy adults over 45. However, in several States in the U.S. anyone above the age of 16 is eligible to be vaccinated.

In Israel too, anyone over 16, has been eligible for a vaccine since the first week of February. India was in a “good position” globally.

Justice Ramana will be the next CJI #GS2 #Governance

President Ram Nath Kovind appointed Justice N.V. Ramana as the 48th Chief Justice of India with effect from April 24.

Born into a family of agriculturists in Krishna district of Andhra Pradesh, Chief Justice of India-designate Justice Ramana has adorned many hats — from student leader working for farmers and industrial workers to journalist for a leading Telugu newspaper to a first-generation lawyer. He was Additional Advocate General for Andhra Pradesh before being called to the State High Court Bench in 2001.

Tenure of 16 months

Justice Ramana was the Delhi High Court Chief Justice prior to his elevation to the top court. As CJI, Justice Ramana will have a tenure of 16 months.

The incumbent CJI Sharad A. Bobde had recommended Justice Ramana, the senior most judge of the top court, for appointment as the 48th Chief Justice of India in a letter addressed to the Ministry of Law and Justice, dated March 24.

“In exercise of the powers conferred by clause (2) of Article 124 of the Constitution, the President is pleased to appoint Sri. Nuthalapati Venkata Ramana, judge of the Supreme Court, to be the Chief Justice of India with effect from April 24, 2021.

Seniority norm

With this, both the Supreme Court and the government have followed the seniority norm in the appointment of CJIs.

As Executive Chairman of National Legal Services Authority, Justice Ramana was responsible for making India’s legal aid programme the largest in the world with aid provided on the basis of a ‘means test’ rather than on basis of fixed categories.

Justice Ramana has said one of his primary objectives, besides providing easy access to justice, would be to improve the judicial infrastructure through a special purpose vehicle called the ‘National Judicial Infrastructure Corporation’ to act as a nodal agency.

Vigilance officers to be transferred every 3 years #GS2 #Governance

The Central Vigilance Commission (CVC) has modified the guidelines pertaining to the transfer and posting of officials in the vigilance units of government organisations, restricting their tenure to three years at one place. The tenure may be extended to three more years, albeit at a different place of posting.

The CVC, in its order, said undue long stay of an official in a vigilance department had the potential of developing vested interests, apart from giving rise to unnecessary complaints or allegations.

Continuous postings

Personnel can have two continuous postings in vigilance units at different places of posting, each running to a maximum of three years. Personnel who have worked for over three years at one place should be transferred in phases, with priority given to those who have served for the maximum period.

Those having completed over five years at one place should be shifted on top priority basis.

The Commission said in the first phase, at least 10% of such personnel should be shifted in a sequential order without any exception. In case someone has served at one place for over three years, his tenure at the next place would be curtailed to ensure that the combined tenure was limited to six years.

The first phase of transfer/posting has to be completed by May 31. The exercise of transferring all the personnel in question should be completed by June 30. The order said after transfer from the vigilance unit, there would be a compulsory cooling off period of three years before anyone could be considered again for posting in the unit.

A personnel, having completed three years in the vigilance unit of an organisation, could be considered for transfer on deputation basis in the unit of another organisation, subject to the laid down rules.

Russia calls for inclusive solution to Afghan crisis #GS2 #IR

A solution to the Afghan civil war should balance the ethnic and religious groups of Afghanistan and no group should be left out of the final settlement. Mr. Lavrov said India and Russia were working for stability and connectivity in the region, and urged that “military alliances” should not come up in Asia.

“The Taliban movement is a part of Afghan society. Decision on the settlement in Afghanistan should foresee the participation of all political, ethnic and religious groups in the country. Otherwise, the solution will not be stable. This decision has to be based on balance of ethnic, political and religious interests, including in the legislative bodies.

“Any exclusion of any group from this process will not lead to an implementable and sustainable agreement which can lead to resumption of hostilities, which is not the desire of the stakeholders. Dr. Jaishankar said there is a need to “harmonise” the interests of various stakeholders that are active in and around Afghanistan.

For India, what happens in Afghanistan impacts our security directly. I shared our approach that for a durable peace there would require harmonising the interest of all — both within and around that country,” Mr. Jaishankar said.

The peace process should be based on foundational principles to which we all subscribe and a political solution should mean independent, sovereign, united and democratic Afghanistan.

Apart from the Afghan situation, the major issue on the agenda for Tuesday’s talks was expected to be the delivery of the Russian S400 missile defence system and the threat of U.S. sanctions that the delivery could attract. However, the Ministers said the “specific” issue did not come up during the discussion.

However, Mr. Lavrov acknowledged that the U.S. exerts pressure on any country that wants to sign military and industrial contracts with Russia.

“We did not discuss these responses from the U.S. but we confirmed that we will deepen our military cooperation. We also discussed the prospects of manufacturing Russian military equipment under Make in India scheme. A diplomatic source however told The Hindu that “all issues” were discussed between the two sides.

Significantly, the Indian membership in the Quad featured at the talks, according to Mr. Lavrov. Answering a question, Mr Lavrov indirectly took up the Quad and said he has heard of an ‘Asian NATO’ and ‘Middle East NATO’ and argued that Russia does not believe in the military alliance systems.

India has U.S. as ally in fighting climate change, says envoy #GS2 #IR

India is a “red-hot” investment opportunity because of its “clean energy” shift, said U.S. special envoy, suggesting that having the U.S. as a partner in tackling climate change is a unique advantage.

In his first public address after reaching Delhi for a four-day visit to prepare for U.S. President Joseph Biden’s Climate Change Summit on April 22, Mr. Kerry said the U.S. is committed to bringing emissions to below 1.5 degrees Celsius, and hoped to help India cut emissions as well.

We discussed a range of issues including climate finance, joint research and collaboration. While it is unclear whether he will make any announcements on restoring some of the funding for India that the Trump administration had cancelled, Mr. Kerry is understood to be discussing how to deepen India’s targets for carbon use and renewable energies.

Daily case count highest in the world #GS3 #SnT

With 1,15,232 new COVID-19 cases reported, India continues to record the most number of daily cases globally. Since April 3, India has been registering more daily cases than the U.S. and Brazil, accounting for one in every seven new global cases. The last time India led the world in terms of daily cases was during the first wave in September.

The figure reported is the highest India has recorded in its COVID-19 history. The rapid rise in detected cases was primarily due to a record number of tests conducted on Monday (and for whom results were made available by State health departments on Tuesday). As many as 12.11 lakh tests were conducted on Monday, 3.17 lakh tests more than the previous day.

The figures do not include cases and deaths from Andaman and Nicobar Islands, Ladakh, Nagaland and Sikkim. The data is sourced from, an independent aggregator of daily COVID-19 figures.

India also reported 632 new deaths on Tuesday. The country has so far reported a total of 1,28,27,991 cases and 1,66,350 deaths.

Maharashtra reported 55,469 infections (accounting for nearly 53% of the new cases in the country) on Tuesday followed by Chhattisgarh with 9,921 cases and Karnataka with 6,150 new infections.

Maharashtra also recorded the highest number of casualties (297) on Monday. Punjab followed with 61 deaths while Chhattisgarh registered 53 casualties.

8 crore doses given

The number of COVID-19 vaccine doses administered exceeded the 8 crore mark, with 8,31,10,926 shots given as of 7 a.m. on Tuesday, according to a Health Ministry press release. “More than 43 lakh vaccination doses were administered in the last 24 hours.

This is the highest single-day vaccination coverage in the country so far,” the release said. Nine States — Maharashtra, Gujarat, Rajasthan, Uttar Pradesh, West Bengal, Karnataka, Madhya Pradesh, Kerala, Bihar — accounted for 65% of the total doses given so far.

Ukraine urges NATO to speed up membership #GS2 #IR

Ukrainian President Volodymyr Zelensky on Tuesday urged NATO to speed up his country’s membership in the alliance, saying it was the only way to end fighting with pro-Russia separatists.

Mr. Zelensky spoke with NATO Secretary General Jens Stoltenberg after an increase in clashes and Russian military movements on the border raised fears of an escalation of the separatist conflict in eastern Ukraine.

In a tweet after the call, Mr. Zelensky said it was time for NATO to move forward with Ukraine’s longstanding desire for membership. He said Kiev was committed to defence reforms requested by the alliance for membership.

“But reforms alone will not stop Russia,” said Mr. Zelensky, whose government has said it hopes to be invited this year to join a NATO Membership Action Plan (MAP). “NATO is the only way to end the war in Donbas. Ukraine’s MAP will be a real signal for Russia.”

Fears have been mounting of a major escalation of the conflict in eastern Ukraine, where government forces have battled separatists in the mainly Russian-speaking Donbas region since 2014.

Ukraine last week accused Russia of massing thousands of military personnel on its northern and eastern borders as well as on the Crimean peninsula annexed by Moscow in 2014. Kiev’s Western allies have rushed to its defence, with a series of statements warning Russia against taking further action.

Mr. Stoltenberg said on Tuesday he had called Mr. Zelensky “to express serious concern about Russia’s military activities in and around Ukraine and ongoing ceasefire violations”.

‘India growth outlook of 12.5% faces severe risks’ #GS3 #Economy

After an estimated contraction of 8% in the 12 months ended March 31, India is projected to grow at 12.5% in the current fiscal year, an outlook that, however, now faces significant downside risks because of the ongoing wave of COVID-19 in the country.

The International Monetary Fund’s ‘World Economic Outlook (WEO): Managing Divergent Recoveries’ — released ahead of the virtual World Bank-IMF Spring Meetings — also forecast India’s economy to expand by a relatively more sedate 6.9% in the next financial year.

The projections for India were based on evidence to support the normalisation of economic activity, IMF chief economist Gita Gopinath stressed at a press conference, adding that these forecasts had preceded the current wave of COVID-19 in India, “which is quite concerning”.

Observing that the growth projections in the outlook did already take “a fairly conservative view”, IMF economist Malhar Nabar added, “but it’s true that this very worrying uptick in cases… poses very severe downside risks to the growth outlook for the economy”.

On the global economy, the IMF said it expected growth to rebound to 6% this year, after an estimated contraction of 3.3% in 2020 (calendar year), before easing to 4.4% in 2022. There were, however, significant divergences within and between countries, it observed.

Projections for 2021 were slightly higher than they were in October 2020 due to fiscal support in some large economies and a vaccine-supported recovery. A 1.3 percentage point forecast upgrade for the U.S. especially contributed to this, resulting in U.S. growth projections being reset to 6.4% and 3.5% this calendar year and next, the fund said.

The U.S. GDP level in 2022 is forecast to be higher than in a non-pandemic scenario — the only large economy for which this is true. Other economies are also expected to rebound this year albeit at a slower rate, as per the IMF. The Euro Area is projected to grow at 4.4% and 3.8% over these time periods; China, at 8.4% and 5.6%.

World economy

Global growth is projected to settle at 3.3% in the medium term due to damage inflicted on supply potential as well factors that pre-date the pandemic such as ageing (which has resulted in slower labour force growth in advanced economics and some emerging markets).

Recoveries are also diverging dangerously across and within countries, as economies with slower vaccine roll-out, more limited policy support, and more reliant on tourism do less well.

Averting divergent outcomes would mean “resolving the health crisis everywhere” the IMF said. The average annual loss in per capita GDP over the 2020-24 period relative to pre-pandemic forecasts is expected to be 5.7% in low-income countries and 4.7% in emerging markets. For advanced economies, this number is lower at 2.3%.

“Such losses are reversing gains in poverty reduction, with an additional 95 million people expected to have entered the ranks of the extreme poor in 2020 compared with pre-pandemic projections. Pointing to uneven recoveries within countries, Ms. Gopinath wrote in the outlook that the unskilled, young and women had been impacted more.

Pre-pack: Insolvency resolution option for MSMEs #GS3 #Economy

The central government has promulgated an ordinance allowing the use of pre-packs as an insolvency resolution mechanism for Micro, Small and Medium Enterprises (MSMEs) with defaults up to Rs 1 crore, under the Insolvency and Bankruptcy Code.

The move comes soon after the end of a one-year suspension of insolvency initiation imposed by the government in light of the Covid-19 pandemic. The government had last year also increased the minimum default threshold for insolvency proceedings from Rs 1 lakh to Rs 1 crore.  We examine pre-packs and their impact on the insolvency resolution process.

What are pre-packs?

A pre-pack is the resolution of the debt of a distressed company through an agreement between secured creditors and investors instead of a public bidding process. This system of insolvency proceedings has become an increasingly popular mechanism for insolvency resolution in the UK and Europe over the past decade. Under the pre-pack system, financial creditors will agree to terms with a potential investor and seek approval of the resolution plan from the National Company Law Tribunal (NCLT).

The approval of a minimum of 66 per cent of financial creditors that are unrelated to the corporate debtor would be required before a resolution plan is submitted to the NCLT.  Further NCLTs are also required to either accept or reject any application for a pre-pack insolvency proceeding before considering a petition for a CIRP.

What are the benefits of pre-packs over the Corporate Insolvency Resolution Process (CIRP)?

One of the key criticisms of the CIRP has been the time taken for resolution.  At the end of December 2020, over 86 per cent of the 1717 ongoing insolvency resolution proceedings had crossed the 270-day threshold. One of the key reasons behind delays in the CIRPs are prolonged litigations by erstwhile promoters and potential bidders.

The pre-pack in contrast is limited to a maximum of 120 days with only 90 days available to the stakeholders to bring the resolution plan to the NCLT.

Another key difference between pre-packs and CIRP is that the existing management retains control in the case of pre-packs while a resolution professional takes control of the debtor as a representative of financial creditors in the case of CIRP. Experts note that this allows for minimal disruption of operations relative to a CIRP.

What is the key motivation behind the introduction of the pre-pack?

According to sources aware of developments, pre-packs are largely aimed at providing MSMEs with an opportunity to restructure their liabilities and start with a clean slate while still providing adequate protections so that the system is not misused by firms to avoid making payments to creditors.

“Prepacks will help corporate debtors to enter into consensual restructuring with lenders and address the entire liability side of the company,” said Rajiv Chandak, partner at Deloitte India, noting that the government should consider setting up specific benches of the NCLT to deal with pre-pack resolution plans to ensure that they are implemented in a time-bound manner.

How are creditors protected from misuse by promoters to simply reduce liabilities and retain control?

Experts noted that the pre-pack provisions introduced by the central government also provided for adequate protection to ensure the provisions were not misused by errant promoters.

The pre-pack mechanism allows for a swiss challenge for any resolution plans which proved less than full recovery of dues for operational creditors. Under the swiss challenge mechanism, any third party would be permitted to submit a resolution plan for the distressed company and the original applicant would have to either match the improved resolution plan or forego the investment.

“… adopting plan evaluation process akin to Swiss Challenge, it (the pre-pack mechanism) retains competitive tension such that promoters propose plans with least impairment to rights and claims of creditors,” said Soumitra Majumdar, partner at law firm J Sagar Associates adding that the option available to creditors to require the promoters dilute their shareholding in case the resolution plan provides for impairment of claims by creditors would also be a significant deterrent against “unreasonable terms” in resolution plans.

Creditors are also permitted to seek resolution plans from any third party if they are not satisfied with the resolution plan put forth by the promoter.

What next?

The pre-pack is expected to be rolled out to all corporations over time as legal issues around the provisions are settled through case law, according to experts.

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