EDITORIALS & ARTICLES
20th April 2021
Ingenuity Mission on Mars
Recently, the NASA has announced that the Ingenuity had performed its first flight on Mars.
Ingenuity Mission
- It is the first flight of a powered aircraft on another planet.
- The helicopter’s main task is to carry out a technology demonstration to test the first powered flight on Mars.
- It is the first helicopter to fly on Mars.
- It was carried by NASA’s rover called Perseverance.
- The helicopter got its name because of a high school student Vaneeza Rupani of Alabama.
Objective of Ingenuity Mission
- It will help collect samples from the surface from locations where the rover cannot reach.
- Its mission is experimental in nature and completely independent of the rover’s science mission which is searching for signs of ancient life and collecting samples of rock and sediment.
- It is able to fly using counter-rotating blades that spin at about 2,400 rpm.
- It has a wireless communication system, and is equipped with computers, navigation sensors, and two cameras.
- The helicopter was placed on the Martian surface to test the powered flight in the planet’s thin air.
- Its performance during these experimental test flights will help inform decisions about small helicopters for future Mars missions.
- It would give scientists a new perspective on a region’s geology and even allow them to peer into areas that are too steep or slippery to send a rover.
Renewed Tension between Russia and the Czech Republic
Recently, a day after the Czech Republic expelled 18 Russian diplomats, the Russia retaliated by announcing it would send back 20 Czech diplomats, exacerbating relations that have already been strained in recent times.
Tension between Russia and Czech Republic
- Prague had accused Russian embassy officials of being intelligence operatives.
- It said that it suspected Russia of being involved in a 2014 explosion at an arms depot that left two dead.
- In June 2020, Russia was accused of being behind a poisoning scare targeting Czech politicians, including the mayor of Prague.
- Russia offered scathing criticism of the Czech Republic’s decision by saying that Prague wants to fulfill its desire to please US against the background of recent US sanctions against Russia.
Implications of tensions between Russia and Czech Republic
- The diplomatic escalation between Prague and Moscow is believed to be the most serious since 1989, when the Soviet domination of Eastern Europe ended.
- It adds to the worsening of relations between the West and Russia, which are already being tested by Russia’s military buildup on its western frontier as well as in Crimea.
- Czechs have exposed the lengths that the GRU intelligence agency will go to in their attempts to conduct dangerous and malign operations.
- The US has said that it stands with its NATO ally in its firm response against Russia’s subversive actions on Czech soil.
RBI’s panel to review ARCs working
Recently, the Reserve Bank of India (RBI) has set up a committee to undertake a comprehensive review of the working of asset reconstruction companies (ARCs).
- The committee has been set up in the backdrop of public sector banks workingtowards setting up a National Asset Reconstruction Company Ltd to sell large stressed assets of ₹500 crore and above.
- The RBI rejected the UV ARC’s resolution plan for Aircel as it did not conform to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.
- In July 2020, the RBI advised ARCs to put in place Fair Practices Code (FPC), duly approved by their board, in order to achieve the highest standards of transparency and fairness in dealing with stakeholders.
What is the panel to review ARC’s working?
- It is a six-member committee which will be headed by Sudarshan Sen, former Executive Director of RBI.
- The other members are ICICI Bank ED Vishaka Mulye, SBI deputy MD R N Prasad, EY partner Abizer Diwanji, MDI economics professor Rohit Prasad and CA R Anand.
- The panel will submit their report within three months of their first meeting.
- The Department of Regulation (RBI) will provide the necessary secretarial support to the Committee.
Purpose of committee to review ARC’s working
- It aims to review of the working of ARCs in the financial sector ecosystem.
- It will recommend suitable measures for enabling ARCs to meet the growing requirements.
- It will review the existing legal and regulatory framework applicable to ARCs and recommend measures to improve efficacy of ARCs.
- It will review role of ARCs in resolution of stressed assets including under Insolvency and Bankruptcy Code (IBC).
- It will give suggestions for improving liquidity in and trading of security receipts.
- It has also been asked to review business models of the ARCs.
What are Asset Reconstruction Companies (ARCs)?
- The ARCs are entities that purchase bad loans from banks and salvage value from them by finding buyers for the security or selling the business.
- The ARCs are registered under the RBI and regulated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act, 2002).
- The ARCs take over a portion of the debts of the bank that qualify to be recognised as Non-Performing Assets.
- It implies that the ARCs are engaged in the business of asset reconstruction or securitisation or both.
- All the rights that were held by the lender (the bank) in respect of the debt would be transferred to the ARC.
- In February 2021, the government had said that public sector banks will set up anational ARC which will buy bad loans from banks and help clean their books.
Challenges faced by Asset Reconstruction Companies (ARCs)
- The requirement of the ARC is to have sufficient availability of funds to match the huge amount of NPA market.
- The price expectation mismatch between selling bank (s) and buying ARC and agreement on an acceptable valuation of the bad assets will create a challenge for ARC.
- It is the absence of a vibrant distressed debt market in India which makes it difficult to sell NPA assets in the market.
- There is the absence of a mature secondary market for security receipts issued by ARC to Qualified Institutional Buyers.
Real Time Gross Settlement (RTGS) and the National Electronic Fund Transfer (NEFT)
Recently, the RBI has proposed to enable, in a phased manner, payment system operators like mobile wallets regulated by the central bank to take direct membership in Real Time Gross settlement (RTGS) and the National Electronic Fund Transfer (NEFT).
RTGS and NEFT
- The RTGS system is meant for large-value instantaneous fund transfers, while thenational electronic funds transfer (NEFT) system is used for fund transfers of up to Rs 2 lakh.
- The National Electronic Funds Transfer (NEFT) is a payment system that facilitates one-to-one funds transfer.
- Using NEFT, people can electronically transfer money from any bank branch to a person holding an account with any other bank branch, which is participating in the payment system.
Proposal of RBI for RTGS and NEFT
- The RBI proposed that anyone will be able to send money online, or withdraw cash, using a mobile wallet or any non-bank entity through RTGS and NEFT.
- It is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments.
- These entities will not be eligible for any liquidity facility from RBI to facilitate settlement of their transactions in these CPSs.
- The facility will be subject to an overall limit of Rs 2 lakh for non-banks.
Implications of RBI proposal
- The experts say that just as use of UPI increased since it was opened to third-party aggregators, opening the payment system to non-banks would increase digital payments and transactions significantly.
- It will prepare a digital trail of all individuals doing digital transactions on channels outside the banking system, which could help the overall financial system.
- The credit profile can also be tracked while taking a loan from a financial technology (Fintech) company, investing through it or spending through it.
Who can now undertake online transfers?
- The RBI will now allow non-bank entities such as Prepaid Payment Instrument (PPI) issuers, Card Networks, White Label ATM operators, Trade Receivables Discounting System (TReDS) platforms to become members of CPS.
- The mobile wallets like Google Pay, Mobikwik, PayU, Ola Money, PhonePe and Amazon Pay can provide NEFT and RTGS facilities to their customers.
- The transfer will be allowed only to KYC (know your customer)-compliant entities.
Startup India Seed Fund Scheme
Recently, the Ministry of Commerce & Industry launched the Startup India Seed Fund Scheme (SISFS).
What is Startup India Seed Fund Scheme (SISFS)?
- It was announced by the Hon’ble Prime Minister in January 2021 in his Grand Plenary address of ‘Prarambh: Startup India International Summit’.
- Rs. 945 Crore corpus will be divided over the next 4 years for providing seed funding to eligible startups through eligible incubators across India.
- It will Secure seed funding, Inspire innovation, Support transformative ideas, Facilitate implementation, and Start startup revolution (SISFS).
Features of Startup India Seed Fund Scheme (SISFS)
- The online portal created by DPIIT, for the scheme, will allow incubators to apply for funds under it.
- An Experts Advisory Committee (EAC) has been created by DPIIT to execute and monitor the Startup India Seed Fund Scheme.
- The grants of upto Rs 5 Crores shall be provided to the eligible incubators selected by the EAC.
- The selected incubators shall provide grants of up to Rs 20 lakhs for validation of Proof of Concept, or prototype development, or product trials to startups.
Significance of Startup India Seed Fund Scheme (SISFS)
- It aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization.
- The scheme is expected to support an estimated 3,600 startups through 300 incubators.
- It will create a robust startup ecosystem, particularly in Tier 2 and Tier 3 towns of India, which are often deprived of adequate funding.
- It will act as a bridge between ideas and their implementation.
- The independent & ambitious thinking in the Startup ecosystem will encourage entrepreneurship and create a culture that will recognise innovation.
- It envisions promoting virtual incubation for startups by enabling 300 incubators to support startups from all corners of the country.
Eligibility Conditions for Startups
- A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application.
- The startup must have a business idea to develop a product or a service with a market fit, viable commercialization, and scope of scaling.
- The startup should be using technology in its core product or service, or business model, or distribution model, or methodology to solve the problem being targeted.
- Preference would be given to startups creating innovative solutions in sectors such as social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc.
- The Startup should not have received more than Rs 10 lakh of monetary supportunder any other Central or State Government scheme.
- It does not include prize money from competitions and grand challenges, subsidized working space, founder monthly allowance, access to labs, or access to prototyping facility.
- Shareholding by Indian promoters in the startup should be at least 51% at the time of application to the incubator for the scheme, as per Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.
- A startup applicant can avail seed support in the form of grant and debt/convertible debentures each once as per the guidelines of the scheme.
Eligibility Conditions for Incubators
- The incubator must be a legal entity:
- A society registered under the Societies Registration Act 1860, or
- A Trust registered under the Indian Trusts Act 1882, or
- A Private Limited company registered under the Companies Act 1956 or the Companies Act 2013, or
- A statutory body created through an Act of the legislature
- The incubator should be operational for at least two years on the date of application to the scheme
- The incubator must have facilities to seat at least 25 individuals
- The incubator must have at least 5 startups undergoing incubation physically on the date of application
- The incubator must have a full-time Chief Executive Officer, experienced in business development and entrepreneurship, supported by a capable team responsible for mentoring startups in testing and validating ideas, as well as in finance, legal, and human resources functions
- The incubator should not be disbursing seed fund to incubatees using funding from any third-party private entity
- The incubator must have been assisted by the Central/State Government(s)
- In case the incubator has not been assisted by the Central or State Government(s):
- The incubator must be operational for at least three years
- Must have at least 10 separate startups undergoing incubation in the incubator physically on the date of application
- Must present audited annual reports for the last 2 years
- Any additional criteria as may be decided by the Experts Advisory Committee (EAC).
Six Minute Walk Test
Recently, the Ministry of Health and Family Welfare has virtually launched the Six Minute Walk Test.
What is Six Minute Walk Test?
- It is Maharashtra’s government awareness campaign for monitoring fitness of lungs.
- It is a six minute walk test and the campaign is aimed to increase the awareness among the citizens about the simple test which can be done at home.
- It helps to identify the depletion in oxygen level and the patient can be immediately admitted to the hospital if the level drops below the critical level.
- The test is necessary for those who have fever, cough and cold or symptoms of Corona infection as well as for those patients who are in home isolation.
- The oxygen level should be noted with the help of pulse oximeter by putting the finger in the oximeter.
- The oximeter should not be removed and the patient should start walking in the room with the oximeter on your finger and walk for six minutes (do not climb stairs).
- If the Oxygen level is dropped below 93 or it is reducing by more than 3 percent of the initial level registered before walking then:
- It can be deduced that the person is not getting enough oxygen according to his/her requirement and needs to be hospitalised immediately.
- The persons above 60 years of age can do this test for 3 minutes instead of 6 minutes.
Idea behind Six Minute Walk Test
- The six minute walking test (6MWT) was developed by the American Thoracic Societyand it was officially introduced in 2002.
- It is a sub-maximal exercise test used to assess aerobic capacity and endurance.
- The distance covered over a time of 6 minutes is used as the outcome by which to compare changes in performance capacity.
- It provides information regarding functional capacity, response to therapy and prognosis across a broad range of chronic cardiopulmonary conditions.
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