Finance: RBI released a draft Prudential Framework for project finance, proposing 5 per cent provisioning during the construction phase of infrastructure projects.
Technology: AlphaFold 3's implications for drug discovery continued to be analysed. The underlying protein-folding science entered wider policy discussion.
Aviation: IndiGo ordered 30 Airbus A350-900 wide-body aircraft, signalling a strategic push into international long-haul routes.
Polity: The Delhi High Court addressed child safety in cyberspace, emphasising the need to extend the physical child protection framework to digital environments.
RBI released a draft "Prudential Framework for Income Recognition, Asset Classification and Provisioning pertaining to Advances: Projects Under Implementation" and invited public comments.
Purpose: Infrastructure projects in India have a history of long delays and cost overruns, leading to loans being classified as Non-Performing Assets (NPAs). The framework attempts to manage this risk systematically.
Key provision: Banks must maintain a provision (a financial reserve set aside against potential loss) of 5 per cent of the loan amount during the construction phase of a project. Once the project becomes operational, provisioning can reduce to 2.5 per cent, and further to 1 per cent on meeting specific conditions.
Applicability: All commercial banks, Non-Banking Financial Companies (NBFCs), Urban Co-operative Banks, NABARD, and National Housing Bank (NHB).
NPA definition: A loan or advance where principal or interest payment has been overdue for more than 90 days. Once classified as NPA, banks must set aside significantly higher provisions and cannot recognise interest as income.
Concern addressed: Delays in infrastructure projects often cause loans to turn NPA during construction, deterring bank lending to infrastructure. The graduated provisioning framework is designed to price and manage this risk without discouraging infrastructure lending.
2. India-EFTA Trade and Economic Partnership Agreement
GS area: International Relations (Trade)
Coverage and analysis of the India-EFTA TEPA (Trade and Economic Partnership Agreement), signed on 10 March 2024, continued.
EFTA: The European Free Trade Association. Its four members are Iceland, Liechtenstein, Norway, and Switzerland. None are EU members.
What it is: Not a standard Free Trade Agreement. The TEPA is a comprehensive agreement covering trade in goods, services, investment, and intellectual property.
Investment pledge: EFTA countries made a binding commitment to facilitate USD 100 billion in investments into India over 15 years. This is the unique feature distinguishing TEPA from other FTAs.
Jobs: The investment target is expected to generate 1 million direct jobs in India.
Re-balancing clause: If investments fall short of targets, India can re-balance or suspend the duty concessions it has extended. This is an innovative enforcement mechanism rarely seen in trade agreements.
Negotiation history: 16 years of negotiations across 21 formal rounds.
3. Passive Euthanasia and the Right to Die with Dignity
GS area: Polity (Judiciary), Society
Renewed discussion on passive euthanasia policy and the implementation of the Supreme Court's advance directive framework.
Aruna Shanbaug case (2011): The Supreme Court legalised passive euthanasia under strict conditions in this case, allowing withdrawal of life support from a patient in a permanently vegetative state.
Common Cause v. Union of India (2018): A five-judge Constitution Bench reaffirmed the right to die with dignity as a fundamental right under Article 21. It recognised the living will or advance medical directive, allowing competent adults to specify their wishes about end-of-life treatment.
Passive versus active euthanasia: Passive euthanasia involves withdrawing or withholding life-sustaining treatment. Active euthanasia involves administering a lethal dose. India permits passive euthanasia; active euthanasia remains prohibited.
Forum: Motor Accident Claims Tribunals handle accident compensation cases under the Motor Vehicles Act, not euthanasia. Advance directives are handled through medical institutions and courts.
Article 21: Guarantees the right to life and personal liberty. The Supreme Court has interpreted this to include the right to die with dignity. It does not, however, extend to active euthanasia.
Static linkage: Fundamental rights, judiciary, end-of-life law.
4. IndiGo Orders Airbus A350-900
GS area: Economy (Civil Aviation)
IndiGo placed an order for 30 Airbus A350-900 wide-body aircraft, marking the airline's first push into long-haul international aviation.
A350-900: A wide-body twin-engine jet aircraft capable of long-haul international routes. Wide-body aircraft have two aisles; narrow-body (like IndiGo's existing A320 family) have one.
IndiGo's strategy: The airline had until now operated exclusively narrow-body aircraft on domestic and short-haul international routes. The A350 order reflects an ambition to compete on long-haul routes to Europe, North America, and Australia.
India's aviation market: India is the world's third-largest domestic aviation market. The Directorate General of Civil Aviation (DGCA) is the statutory regulatory body.
UDAN scheme: Ude Desh ka Aam Naagrik (UDAN) regional connectivity scheme has expanded domestic routes. The A350 order is at the other end of the spectrum, targeting premium international travel.
The Delhi High Court emphasised the need to extend the concept of "good touch/bad touch" in child safety education to the digital domain.
POCSO Act: The Protection of Children from Sexual Offences Act, 2012 is a comprehensive law addressing sexual abuse of children. It applies to both boys and girls under 18 years.
Contact and non-contact offences: POCSO covers both physical contact offences (such as penetrative and non-penetrative sexual assault) and non-contact offences (such as voyeurism, exhibitionism, and using children for pornographic purposes).
Digital dimension: With the growth of online communication, courts have been expanding POCSO's application to cover digital abuse, including receiving sexual material digitally, online grooming, and cyber stalking.
IT Act: Section 67B of the Information Technology Act, 2000 specifically punishes child pornography online.
Static linkage: Child protection law, POCSO Act, IT Act, digital governance.
6. Briefly noted
FDI trends: Gross FDI into India declined in FY2023-24 while repatriation and disinvestment (profits sent back to foreign investors) increased, reducing net FDI. The India VIX (India's volatility index, measuring expected 30-day volatility of Nifty 50) surged above 16.5 due to election uncertainty.
Vietnam and market economy status: Vietnam formally requested the United States to reclassify it from a "non-market economy" to a "market economy" to avoid high anti-dumping duties. India faces the same non-market economy designation from the US in WTO anti-dumping proceedings.
Anti-submarine warfare context: India's contribution to the UN Counter-Terrorism Committee Executive Directorate (CTED) Trust Fund was reported at USD 500,000. India opposes terrorism in all its forms and is active in the Financial Action Task Force (FATF).
Practice MCQs
Check yourself
With reference to RBI's draft Prudential Framework on project finance, what provisioning rate is proposed for the construction phase of infrastructure projects?
Check yourself
The India-EFTA TEPA (Trade and Economic Partnership Agreement) includes a unique "re-balancing clause." What does this clause do?
Check yourself
The Supreme Court's recognition of passive euthanasia and advance medical directives in India was primarily established in which case?
Check yourself
EFTA, the counterpart to India in the recently signed TEPA, includes which four countries?
Check yourself
Which section of the Information Technology Act, 2000 specifically addresses child pornography online?