Mains Focus-(21st June 2018)

Table of Contents

Paper-1: Role of women and women’s organization

Labour force disparity

India has far fewer women working or available for work compared to any other large economy in the world
Women’s participation in the labour force declined sharply in the country precisely when the country’s economic engine was growing the fastest: between 2004-05 and 2011-12

Reasons behind fewer women in the workforce

A big reason why women don’t work is that there is usually no one else to do the tasks that a patriarchal society assigns to them
In rural India, this often means attending to onerous tasks such as fetching water or collecting firewood
In urban India, this may mean childcare in an environment where help is not as easy to come by as in rural India
Data from the two latest quinquennial employment surveys of the National Sample Survey Office (NSSO) show that this was driven by a rise in the share of women who listed ‘attending to domestic duties’ as their principal activity in the year preceding the surveys
The force of patriarchy also manifests itself in socio-religious constraints, which restrict the mobility of women
Across major states, the share of women attending to domestic duties is broadly correlated with the share of women citing social and religious constraints as the main reason for attending to domestic duties

Women interested in part-time work

A majority of women attending to domestic duties are willing to work part-time if such work were made available at their household
Tailoring work seems to be the most preferred option for such women, followed by dairy-related and poultry-related work
Most women who want to take up such work emphasized the need for finance and training

Way Forward

The data suggest that the Skill India initiative may have missed a trick by focusing largely on male candidates looking for full-time work
Given the rising demand for training among homemakers looking for part-time work, they could benefit greatly from a skilling initiative that helps them get into part-time work, or to start their own enterprises

Paper 1: Urbanization , their problems & remedies

More Urbanized ,High Cardiovascular disease.

What is the issue?

Wealthier and more urbanized states tend to face a higher risk of cardiovascular disease (CVD).

What does the data reveal?

Cardiovascular disease risk varies widely among states.Kerala faces the highest risk of CVD at 19.5%.Jharkhand has the lowest risk at 13.5%.
CVD risk is found to be the highest in the Northern, Northeastern and Southern states

Factors

In the North, Northeast and South, higher body mass index, hypertension, diabetes and smoking prevalence contributed to the risk

Socio-economic – There is high variation of risk factors, such as smoking and diabetes.This was influenced by adults’ socio-demographic characteristics.BMI and blood glucose and blood pressure were associated with wealth and living in an urban area.Prevalence of high blood glucose and high BP was high in middle and old age among the poorer groups, and in rural areas.Smoking was more common in the poorer groups, in rural areas, and among males.It was most prevalent among males in the Northeastern states and West Bengal.
Development – Some states are at high risk of CVDs as they are ahead in development and have better healthcare facilities.In less developed states like Jharkhand, life expectancy at birth is less than in developed states like Kerala.Life expectancy is affected by disease pattern.
Lifestyle – Lifestyle, dietary patterns and other factors have played a role in the variations.Another factor is obesogenic environment which promotes weight gain and is not conducive to weight loss.It includes higher urbanisation, walking less, using lift instead of stairs, and easy availability of high-calorie food.The data would help in allocating resources to prevent cardiovascular disease to the most in need.

Making House more affordable

Carpet (floor) Area has been increased by 33% to qualify for Pradhan Mantri Awas Yojana (Urban) Subsidies

The initiative, ‘Housing for All by 2022’ is the central pivot around which the government’s efforts are concentrated. This, in turn, covers different aspects like rental and affordable housing.
Roping in the private sector under the Public-Private Partnership (PPP) model is the key solution.

What more is needed to increase affordability?

Among other initiatives, the government needs to- grant infrastructure status to the entire real estate industry making long-term financing easy for the industry,fix GST rate for all types of housing at 6%,revise carpet area to 60 sq. mt including in metro cities (to qualify for subsidy),make land available at subsidized rates in metros and tier 1 cities so that the projects can be viable,reduce premium on additional FSI (floor space index) to encourage affordable housing within metro cities and,also reduce time taken and cost of permissions and clearances.

Permitting higher Floor Space Index

Land in metros forms a significant proportion of the project cost and renders such projects unviable for the affordable segment.
Policies should be formulated wherein land can be provided at rates that make the affordable projects viable.
Land can be provided to develop composite projects where one segment, say, LIG (lower income group) is cross-subsidised by the revenues earned from the other segment, say HIG (higher income group).
If such corridors allow for high density development, a higher FSI can be permitted, with an incremental benefit of FSI being applied towards affordable housing.
The government should provide incentives to private players who use technology to deliver quality product.
Such standardisation may further improve efficiency and make construction of homes like a manufacturing set-up.

Rewarding developers for last mile connect

Availability of land in cities at affordable pricing is one of the major challenges.
The government could facilitate the development of affordable housing by making surplus land held by PSUs (Public Sector Undertakings) available for affordable housing projects.
Land is a state subject and that adds another layer of complexity.
The central government should guide the states on programmes to allocate and incentivise the usage of land for affordable housing, while also incentivising state governments to facilitate engagement and implementation.
It is also recommended to incentivise developers for infrastructure and last mile connectivity development in semi-urban centres.

Allotting land parcels at subsidized costs

The recent move to raise the carpet area and the RBI’s revision of housing loan limits for priority sector lending (PSL) eligibility will help bring most of the under-construction dwelling units in urban India under the purview of the CLSS.
This will not only bolster homebuyer sentiments, but also further propel construction activity in the affordable housing sector. However, the next steps for the government should be:

Look at the benefits for developers. Elements like reduction in construction inputs should now be a priority.
To make optimum use of the initiative from a consumer’s standpoint, the land allotment should be at better locations and subsidized costs.
Focus should be on building a holistic environment that incorporates infrastructure and social facilities. Access to holistic livelihood facilities will be key in determining the success of the initiative

Paper 2: Issues relating to development & management of Social Sector/Services relating to Health, Education, Human Resources

First Health Repository

National Health Resource Repository (NHRR)

The Union ministry of health and family welfare has launched the first ever registry in the country registry of authentic, standardised and updated geo-spatial data of all public and private healthcare.
Objective: “to create a reliable, unified registry of country’s healthcare resources showing the distribution pattern of health facilities and services between cities and rural areas”
The Indian Space Research Organisation (ISRO) is the project technology partner for providing data security.
It will now be possible to provide comprehensive data on all private and public health establishments and other resources, including Railways, Employees’ State Insurance Corporation (ESIC), defense and petroleum healthcare establishments.
Under the Collection of Statistics Act 2008, more than 20 lakh healthcare establishments such as hospitals, doctors, clinics, diagnostic labs, pharmacies and nursing homes would be enumerated under this census, which will capture data on more than 1,400 variables.
The Central Bureau of Health Intelligence (CBHI) has looped in key stakeholders, including leading associations, allied ministries, and several private healthcare service providers.

Benefits

This resource repository shall enable advanced research towards ongoing and forthcoming healthcare challenges arising from other determinants of health such as disease and the environment.
Approximately 4,000 trained professionals are working with dedication to approach every healthcare establishment to collect information.
It shall also enhance the coordination between central and state government for optimisation of health resources, making ‘live’ and realistic state project implementation plans (PIPs) and improving accessibility of data at all levels, including state heads of departments, and thus decentralise the decision making at district and state level.
Additionally, it shall generate real-world intelligence to identify gaps in health and service ratios, and ensure judicious health resource allocation and management.
It shall identify key areas of improvement by upgrading existing health facilities or establishing new health facilities keeping in view the population density, geographic nature, health condition, distance,” he said.
The NHRR project aims to strengthen evidence-based decision making and develop a platform for citizens and provider-centric services by creating a robust, standardised and secured Information Technology (IT)-enabled repository of India’s healthcare resources.

National Health Profile (NHP)-2018

The health minister also released the National Health Profile (NHP)-2018, prepared by CBHI.
The National Health Profile covers demographic, socio-economic, health status and health finance indicators, along with comprehensive information on health infrastructure and human resources in health.

Paper-2: Separation of powers between various organs dispute redressal mechanism and institutions

Judiciary versus Economy

Introduction:

With an expanding economy, the number of legal disputes involving property, contract, labour, tax and corporate laws is bound to increase.
How these disputes are adjudicated by the courts will have direct consequences for the disputants and also shapes the behaviour of individuals and entities involved in production, commerce and banking.
Judicial findings also influence decision-making of government agencies, which are major actors in a developing economy. Yet, the Indian judiciary doesn’t seem to fully appreciate the economic consequences of its judgments.

Important cases:

Case 1: Power Producers Association of India v. Union of India and Ors.

May 31, 2018 order of the Allahabad High Court ruled that bankruptcy proceedings cannot be started against a power company unless the company is a wilful loan defaulter.
It did not factor in the issue of viability of the project. As such, the ‘wilfulness’ condition is hard to prove. Nonetheless, the ruling is one of the less problematic ones.

Case 2: Rameshwar and Ors v. State of Haryana and Ors (2018)

In this case, the dispute involved 688 acres of land for which the then Haryana government had issued an acquisition notification in 2007. As soon as the notification was issued, builders and developers started approaching owners to buy their land.
Since the official compensation was going to be meagre, many owners sold their land at throwaway prices. Later, the government decided to drop the acquisition plan.

Supreme Court held the State’s decision a fraud, acted out through an unholy nexus between the officials and the builders.

As the owners sold their land under duress and on unconscionable terms, the land should have been restored to them by declaring the deals infructuous. However, the SC handed over the land to the State government.

Case 3: Uddar Gagan Properties Ltd v. Sant Singh & Ors (2016)

In this case, at dispute were 280 acres of land under acquisition in 2005. The land was illegally transferred to developers through dubious deals approved by the then Haryana government.
Here too, the SC handed over the land to the official agency that was an active partner in the fraud. Farmers were forced to accept paltry compensations.

Crux:

Through such judgments, the judiciary has failed not only to protect the legitimate rights of owners, but also to provide economic justice enshrined in Article 38 of the Constitution.
Moreover, the court has transferred land, a precious economic resource, from those who own, need and use it to governments who do not need it by their own accord.

It is due to the perverse incentives created by such judgments that government agencies abuse laws and are sitting on a massive stock of unused land, which would have been put to more productive use by its owners.

Judicial intervention in infrastructure projects

Similarly, several infrastructure projects are being held up due to judicial interventions in the bidding process.
Courts have failed to realise that the quality of infrastructure assets and the technical capability of contractors to deliver them are serious issues. The mere difference in prices demanded by the bidder may or may not be a decisive factor.
Court’s intervention has led to delay in project, escalating its cost far more than any possible gains from ruling in favour of the lowest price bidder.
There are instances where Judiciary didn’t opt for help of experts to assess the construction and maintenance cost rather it went on to interpret a contract and cut into its terms if found not right or reasonable.

Such judicial interventions can undermine the sense of security that comes from signing competitive bidding contracts, thereby discouraging investment.

A public good

The adjudication process can serve as a public good. However, casual and unpredictable adjudication has the opposite effect.

Shivashakti Sugars Limited v. Shree Renuka Sugar Limited and Ors (2017)

In this landmark judgment, Judiciary admitted the role of economic reasoning in adjudication. It also pushed for the inter-discipline between law and economics to serve the developmental needs of the country.
In situations where alternative views are possible or wherever discretion is available, the associated judges have argued for the view which subserves the country’s economic interest.
They have exhorted the courts to avoid outcomes which can have adverse effects on employment, growth of infrastructure, the economy or the revenue of the State.

The way ahead:

Economic analysis of the law and disputes is a welcome move; however courts should not go overboard.

Treating economic growth and the revenue of the state as public purposes is walking on a slippery slope.
While adjudicating such cases, judiciary should consider a cost-benefit analysis of a different kind.

Infringement of individual rights should be considered only if it is absolutely necessary.

The situation should be such that public purpose cannot be achieved without putting limitations on individual rights. Moreover, the degree of infringement should be minimum to realise the purpose. It should not cut too deep.

Finally, infringement should follow the proportionality principle — the social benefit must be commensurate with the seriousness of the infringement.

Connecting the dots:

Judicial intervention in infrastructure projects and bidding process has led to delays and sense of insecurity, discouraging investment. Do you agree? Elucidate.
Indian judiciary doesn’t seem to fully appreciate the economic consequences of its judgments. Do you agree? Give your opinion illustrating through examples.

Paper 2: Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

UNHRC Report on Kashmir

India is upset over the UN body’s report

What prompted this human rights report?

The first ever report by the Office of the UN High Commissioner for Human Rights (OHCHR) on Jammu and Kashmir, including Pakistan-occupied Kashmir, published last week, has been in production since 2016. A new wave of violence had then hit the Kashmir Valley, when protests sparked by the killing of Hizbul Mujahideen militant Burhan Wani were met with force by security personnel; about 51 protesters and civilians were killed in the months that followed, while more than 9,000 were injured by pellets and bullets. Consequently, the OHCRC asked India and Pakistan to allow its teams access to the State, a request that was refused

Why is this report controversial to India?

Apart from being irked by the report’s criticism of India’s handling of the protests, alleged extra-judicial killings and hard tactics, the Ministry of External Affairs is also upset by the terms used to describe militants. For example, Hizbul Mujahideen, which is regarded as a terrorist organisation by India, was described in the report as an “armed group”. Wani, regarded as a terrorist by Indian security forces, was described as the “leader” of the organisation.
India in its official statement said the report “undermines the UN-led consensus on zero tolerance to terrorism”. Finally, it makes specific recommendations aimed at India, including removing the Armed Forces (Special Powers) Act from areas and instituting inquiries into alleged human rights violations.

Significance of SCO for India

Shanghai Cooperation Organisation (SCO) summit in Qingdao, China was the first SCO summit attended by India as a full-fledged member.

SCO-Shanghai Cooperation Organization

SCO grew out of the Shanghai Five grouping — of Russia, China, Kazakhstan, Tajikistan and Kyrgyzstan — which was set up in 1996 to resolve boundary disputes between China and each of the four other members.
It admitted Uzbekistan in 2001, re-christened itself the Shanghai Cooperation Organisation and broadened its agenda to include political, economic and security cooperation.
It admitted India and Pakistan as full members in 2017.

Significance for India

SCO now has about half the world’s population and a quarter of its GDP. Its boundary extends southwards to the Indian Ocean.
The SCO’s relevance for India lies in geography, economics and geopolitics. India has important economic and security interests in these countries.
With India having complicated ties with neighbours, it makes sense to strengthen ties with its neighbours’ neighbours.
With Pakistan joining the Organisation and Afghanistan and Iran knocking on the doors for membership, the logic of India’s membership becomes stronger.
Expanding opportunities for India in Central Asia: India’s relations with Central Asian countries have been constrained by lack of overland access through Pakistan and Afghanistan/Iran, because of political and/or security reasons. SCO should help in this regard.
Russian and Chinese officials suggested that harmonious cooperation in the SCO may pave the way for an India-Pakistan rapprochement, recalling that SCO membership had facilitated resolution of China’s boundary disputes with Russia and Central Asian countries.

Challenging areas:

The SCO is expected to nudge both countries to cooperate in sensitive areas. One example is the Regional Anti-Terrorist Structure (RATS) of the SCO, which coordinates cooperation for security and stability, through intelligence-sharing on criminal and terrorist activities. India and Pakistan have to find ways of cooperating in the RATS.
Defence cooperation is another tricky area: enhanced linkages between armed forces is an SCO objective. India has agreed to participate in the SCO’s counter-terrorism military exercises in Russia later this year, when Indian and Pakistani troops will operate together.
Reconciling Indian and Pakistani perspectives in the SCO’s initiatives on Afghanistan would be yet another challenge.
The challenge for India — besides that of security and defence cooperation with Pakistan — may come from increasing Chinese dominance of the SCO.

Paper-3: Indian economy and issues relating to planning,mobilization of resources ,growth,development and employment

GST-A Game Changer

Performance of GST

One fiscal year into the implementation of the GST, it is worth asking how it has performed in terms of revenue generation both for the country and for individual states

Three important findings:

Aggregate revenues are highly buoyant

This year’s Economic Survey had argued that confusion reigns in understanding GST performance because of focusing on one or more of the bewildering sub-categories of the GST (CGST, SGST, IGST, cess etc)
A revenue growth of 11.9 percent has been observed, compared with the relevant pre-GST numbers
The implied tax buoyancy (responsiveness of tax growth to nominal GDP growth) is 1.2, which is high by the historical standards for indirect taxes

“True” compensation requirements are minimal

The government produces estimates which show that compensation, although financeable from within the GST, has been substantial
Nearly all the states have seen their revenues grow by at least 14 percent
There will be likely improvements in compliance with the introduction of e-way bills and invoice matching
There are very few states where there is a significant decline in the post-GST share compared to the pre-GST share

GST is boosting revenues of consuming states

Evidence from the first nine months suggests this
Many of the net consuming states, such as nearly all the North-eastern states as well as UP, Rajasthan, MP, Delhi, Kerala, and West Bengal, have indeed increased their post-GST shares
States that have seen a small decline in their shares are states that had special tax regimes in terms of incentives or in agriculture

Further reforms

Simplifying the rate structure
Widening the base to include currently exempted sectors
Streamlining procedures for filing and refunds

Way Forward

From a revenue perspective, and especially considering the headwinds, the GST has been a positive development
The GST appears to be a force for fiscal convergence

Reforms for Un-organized sector

Portable smart ID for workers

The Centre has started work to create a national database and Aadhaar-seeded identification number system to facilitate welfare delivery to 40 crore workers in the unorganized sector
This comes ten years after passing a law that envisaged a portable smart ID card for unorganized sector workers

Unorganised Workers Identification Number

The Union Ministry of Labour has called for tenders to design, develop and run the new UWIN — Unorganised Workers Identification Number — Platform
The “single unified sanitized database” will assign a ten-digit UWIN to every worker and include details of both nuclear and extended families of unorganized workers
The Centre will create and maintain the platform and it is up to the states to identify and register unorganized workers
The Socio-Economic and Caste Census 2011 will be used as the base for the platform, and other worker databases — from the states as well as other Central ministries such as Textiles and Health — will also be incorporated into UWIN
The Unorganised Workers Social Security Act, 2008 had first mandated that every worker be registered and issued a smart ID card

Aadhar Mandatory

Those who have enrolled for Aadhaar but have not yet received it can provisionally enroll themselves into the UWIN system with their Aadhaar Enrollment ID
They will be assigned a UWIN number only when they are able to link Aadhaar with their dataset at a later stage

Unemployment in India to rise

Coupled with a continual increase in voluntary unemployment, the International Labour Organisation expects unemployment in India to be higher in 2018
In India, 65% of the population is below 35 years and unemployment, especially among youth, can limit the nation’s ability to reap the much-hyped demographic dividend

Enhancing youth employability

A wide range of stakeholders, including the government, companies, civil society organizations, and for-profit enterprises are working either independently or in cohesion to enhance youth employability
The government has also undertaken a structured approach via the establishment of the ministry of skill development and employment and the Pradhan Mantri Kaushal Vikas Yojana
Currently, four models are used for supporting youth employability in the country
The first model, or the self-employment model, work on the rationale that if youth are trained in a particular skill, they will have the capacity to become micro-entrepreneurs.The second model, or the employer-led model, trains youth in specific skills relevant to an enterprise and then absorbs the youth into their own value chain.The third, the placement-led model, provides training to youth and also established linkages with potential employers
Fourth, the market linkage model provides end-to-end support to self-employed youth, assisting them in earning better incomes

Causes of increasing unemployment

Unemployment is higher among the formally educated in comparison to the illiterate
There is higher youth unemployment in rural areas, while most interventions focus on urban areas
There is a mismatch between the skill sets that industries require and the skill sets that youth are equipped with
These structural challenges result in a demand-supply mismatch which can be summarized as-a mismatch between youth aspirations and the skills training being provided,mismatch in skills training and industry needs,poor industry buy-in for vocational training courses because of lack of standardization and universally accepted certification

Solutions for this problem

The focus should be put on understanding aspirations, industry requirements and standardization across the skill-development value chain
Well-designed interventions will be effective only if the candidates are willing, receptive and capable of absorbing the knowledge or skill being imparted by the intervention
Counseling in skilling programmes is essential to align the aspirations of programme beneficiaries with the expected outcomes of training
While designing programmes, it is critical to map skills being imparted to the specific needs of potential employers so that the skilling-to-employment loop is closed seamlessly
When it comes to designing programmes that focus on self-employment or entrepreneurship, it is important to assess demand for the product or service and study policies or schemes that can be leveraged to enhance sales
There is also scope for increased public-private partnerships
Public-private partnerships (PPPs) can use existing under-utilized infrastructure available with educational institutions to facilitate vocational training and skill development

Way forward

India’s demography provides a great opportunity for the country with regard to economic growth and development milestones
Concentrated and evidence-backed efforts which can cohesively develop and strengthen youth aspirations, the skill development ecosystem and markets where youth can be employed are necessary for India to realize that opportunity

Current account Deficit to get widen

hat is the issue?

New RBI data on India’s Balance of Payments for 2017-18 was released recently.
With CAD expected to widen, it is essential to assess the overall Balance of Payments (BoP) position of India.

What does the data reveal?

CAD – The RBI data show current account deficit (CAD) at around $48 bn.This is the highest since the record $88 bn of 2012-13.CAD is expected to widen to $75 bn during this fiscal.

Forex – India’s forex reserves stands at around $424 billion as on March 2018.This is actually the eighth largest in the world.

What does it imply?

The current reserves can finance 10.9 months of imports.This is better when compared to 7.8 months in March 2014.The RBI’s current forex war chest is clearly sufficient.This can meet the immediate import needs.It could also keep away currency value fluctuations.Given these, any anticipation of a “crisis” position is highly misplaced.

Concern?

Countries generally accumulate reserves by exporting more than importing.IMF data on the current account balances reveals this nature.
Top 10 forex reserves holders have been running surpluses year after year.This is however barring India and Brazil.India has always had deficits on its merchandise trade account.Its value of imports of goods is far in excess of that of exports.However, India has traditionally enjoyed a surplus on its ‘invisibles’ account.
Invisibles basically cover receipts from export of software services.Inward remittances by migrant workers, and tourism also form part of this.
On the other side, it includes payments towards interest, dividend and royalty on foreign loans, investments and technology/brands.Besides it includes payments on banking, insurance and shipping services.However, invisibles surpluses have not largely exceeded trade deficits.This has resulted in the country consistently registering CADs.

How has India been managing this deficit?

India and Brazil represent unique cases of economies that have built reserves.This was largely on the strength of the capital rather than current account of the BoP.Thus, India has been managing these years with CADs, and still accumulating reserves.This is because foreign exchange comes not only from exporting but also from capital flows.It could be by way of foreign investment, commercial borrowings or external assistance.For most years, net capital flows into India have been more than CADs.The surplus capital flows have, then, gone into building reserves.

Is this a sustainable model?

It is to be noted that there have also been years with reserves depletion.This was due to net capital inflows not being adequate to fund even the CAD.
Expecting foreign capital to bridge the gap between exports and imports would not be ideal.

How does the future look?

CAD – The CAD fell sharply from 2012-13 to 2016-17.This was mainly because of India’s oil import bill nearly halving.However, in 2017-18, the CAD has risen due to resurgent global crude prices.Furthermore, CAD is expected to cross $75 billion this fiscal.
Inflows – There are signs of capital flows slowing down as well.Foreign portfolio investment in India also reflects the larger sell-off pattern across emerging market economies.This is primarily in response to profitable rising interest rates in the US.The Swiss investment bank Credit Suisse’s has forecasted on net capital flows to India for 2018-19.Being $55 bn, it is far lower than the projected CAD of $75 bn.
Reserves – Eventually, forex reserves may decline for the first time since 2011-12.The RBI’s data already show the total official reserves as in June at $413.11 bn.This is a dip of around $ 11 bn over the level of end-March 2018.

How to deal with it?

Favourable growth prospects are essential to attract capital flows to fund CADs.The investment environment of the country should also be conducive.
Notably, it is better if these investments go towards augmenting the economy’s manufacturing and services export capacities.This, instead of simply producing or even importing for the domestic market, would be better.In the long run, this can help narrow the CAD to more sustainable levels.

Air-India-Trouble

Why in News:

The central government has decided to postpone the plan to disinvestment of Air India.

Background

Air India came into existence in 1932 as starter airline. It was nationalised in 1953.
For many years the government had been considering the option that whether Air India should be helped in coming out of its current situation or disinvested. This is not first instance. In 2000 also it was tried for disinvestment but it was not materialised due to lack of political will. At that time, the Tatas, the actual promoters of airlines, wanted to buy it back along with Singapore Airlines.

In brief, the journey

1932: Founded by J.R.D. Tata as Tata Airlines – country’s first scheduled airline
1946: Tata Airlines became a public limited company under the name of Air India
1948: Government of India acquires 49% stake in the company; starts international operation under brand of Air India International
1953: Air Corporation Act enacted to nationalise all existing airline assets and Indian Airline Corporation (domestic operations) and Air India International were established
1962: Air India International named as Air India
1994: Air Corporation Act repealed to allow private airlines to operate on domestic routes; Air India, Indian Airlines converted into Limited Companies under Companies Act, 1956
2000: Previous NDA govt drops privatisation plan after deciding to sell 51% of equity of Indian Airlines and 60% of Air India
2007: Erstwhile Air India and Indian Airline were merged into single entity named as National Aviation Company of India Limited (NACIL)
2010: NACIL renamed as Air India Limited
2012: UPA govt rule out AI privatisation; Turnaround plan to infuse over Rs 30,000 crore till 2021 approved
2017: NDA govt approves in-principle approval of Air India’s disinvestment
2018 (Current): Present NDA government drops privatisation plan after it failed to get any buyers for the debt-ridden national carrier

Important Facts:

The central government has decided to privatize Air India by inviting a bid process in March 2018.The government had offered to sell-76% of its stake in Air India,50 % of share of low-cost subsidiary Air India Express in ground-handling arm AISATS as a single entity.The government has delayed the disinvestment process due to:-a) the rising fuel prices,b) the government has not received any bids

Issues

Huge Debt and liabilities which accounts for approx. 33,000 crore
The government continuation with ownership.
Lack of clear road map.Obligation and benefits issue related to permanent and contractual employee.

Plan of action to revive of Air India include:

Improving Efficiencies by bringing private people to work with the airline
Cutting down costs.
Monetisation of Air India assets.

Rift in ICICI

Why in news?

The board of ICICI Bank has acted on the allegations of misconduct against its CEO and managing director.

What are the misconduct issues in ICICI bank?

ICICI Bank’s troubles are rooted in a 2016 complaint by an investor alleging a quid pro quo deal between Bank CEO’s immediate family members and the Videocon group which got a Rs. 3,250-crore loan from it.
When this ‘conflict of interest’ complaint resurfaced in the public domain this year, chairman of board of directors of the bank personally inquired into it two years earlier and found nothing amiss.
With the Central Bureau of Investigation and later the stock market regulator SEBI swooping in, the issue of whether the bank had failed to make adequate disclosures about its dealings with the borrower (who is now a defaulter) and a firm related to CEO’s family member was spotlighted.
The bank is yet to respond to SEBI, but changed tack after the latter decided to launch a probe into allegations of a quid pro quo and alleged misconduct by the bank’s CEO

What were the actions taken by ICICI bank?

The bank earlier maintained that the CEO was on annual personal leave.
Recently the bank asked it’s CEO to stay away from the office till the completion of an inquiry into the charges levelled against her by a whistle-blower.
Till the inquiry is complete the bank will be steered by a new chief operating officer.
Meanwhile, the tenure of the chairman of the bank’s board, is set to end this month and there is still no clarity on his successor, this extended uncertainty in a crisis situation is unwarranted.

What are the concerns with banks action?

The board of ICICI Bank, an institution that often sought to hold a mirror up to the inefficiencies of public sector banks has delayed the process of inquiry.
A probe panel to be led by retired Supreme Court judge to inquire the case has been appointed.
It is debatable whether such a high-profile panel is required to ascertain if CEO, whose term ends next March had made adequate disclosures while deciding on the loans.
The board itself could have dealt with this through an internal investigation rather than giving the impression that it wanted to paper over the issue, sending a poor signal to all stakeholders.
Thus the strength of corporate governance practices in the bank has come under question because of the way the issue has played out.