Sarat Chandra IAS Academy

UPSC Civils Current Affairs 22ndMay-2021


  • Insolvency and Bankruptcy Code (IBC).
  • Poor Health Infrastructure
  • Reserve Bank of India: Surplus transfer
  • White Fungus
  • Iceberg A-76
  • Chipko Movement



1.Insolvency and Bankruptcy Code (IBC).

Context: The Supreme court of India upheld the validity of the Centre’s notification allowing banks to proceed against personal guarantors for recovery of loans given to a company under the Insolvency and Bankruptcy Code (IBC).


  • Petitioners had challenged the November 15, 2019 notification issued under the IBC and other provisions in as far as they relate to personal guarantors to corporate debtors.

What did the supreme court say:

  • Upholding the validity of the notification, the top court ruled that initiation of an insolvency resolution plan for a company does not absolve corporate guarantees given by individuals from paying up the dues to financial institutions.

Expected outcome:

For Lenders:

  • It allows lenders to seek recovery of dues from guarantors of loans even while bankruptcy processes against the companies are pending.
  • It will boost bank’s recovery efforts involving large bad loans.
  • Side by side bankruptcy proceedings before the same forum for both the corporate debtors and their personal guarantors would help the NCLT, as this would facilitate the Committee of Creditors to frame realistic plans, keeping in mind the prospect of realising some part of the creditors’ dues from personal guarantors.

For Promoters:

  • Promoters and related parties, who often act as guarantors, left with no escape route.
  • Approval of resolution plan for a corporate debtor, doesn’t extinguish personal guarantor’s liability for the balance.
  • The adjudicating authority for personal guarantors will be the National Company Law Tribunal [NCLT] if a parallel resolution process is pending in respect of a corporate debtor for whom the guarantee is given.

What is insolvency and bankruptcy?

  • Insolvency is a situation where individuals or companies are unable to repay their outstanding debt.
  • Bankruptcy, is a situation whereby a court of competent jurisdiction has declared a person or other entity insolvent, having passed appropriate orders to resolve it and protect the rights of the creditors. It is a legal declaration of one’s inability to pay off debts.

Insolvency and Bankruptcy Code [IBC]

  • The IBC was enacted in 2016, replacing a host of laws, with the aim to streamline and speed up the resolution process of failed businesses.
  • The Code also consolidates provisions of the current legislative framework to form a common forum for debtors and creditors of all classes to resolve insolvency.
  • The code stipulates that the resolution process of a stressed company will have to be completed in a maximum of 270 days.

 When does the Insolvency and Bankruptcy Code (IBC) apply?

  • In March 2020, the government raised the threshold for invoking insolvency under the IBC to Rs 1 crore from Rs 1 lakh with a view to prevent triggering of such proceedings against small and medium enterprises that are facing currently the heat of coronavirus pandemic.

The Code creates various institutions to facilitate resolution of insolvency. These are as follows:

  • Insolvency Professionals: A specialised cadre of licensed professionals is proposed to be created. These professionals will administer the resolution process, manage the assets of the debtor, and provide information for creditors to assist them in decision making.
  • Insolvency Professional Agencies: The insolvency professionals will be registered with insolvency professional agencies. The agencies conduct examinations to certify the insolvency professionals and enforce a code of conduct for their performance.
  • Information Utilities: Creditors will report financial information of the debt owed to them by the debtor. Such information will include records of debt, liabilities and defaults.
  • Adjudicating authorities: The proceedings of the resolution process will be adjudicated by the National Companies Law Tribunal (NCLT), for companies; and the Debt Recovery Tribunal (DRT), for individuals. The duties of the authorities will include approval to initiate the resolution process, appoint the insolvency professional, and approve the final decision of creditors.
  • Insolvency and Bankruptcy Board: The Board will regulate insolvency professionals, insolvency professional agencies and information utilities set up under the Code. The Board will consist of representatives of Reserve Bank of India, and the Ministries of Finance, Corporate Affairs and Law.


2.Poor Health Infrastructure:

Context: The second wave of the COVID-19 pandemic has exposed the abysmally poor state of the country’s health infrastructure.

Current state of India’s health infrastructure:

  • In April last year, the country had just 62,458 beds with oxygen, according to data presented by Ashwini Kumar Choubey, Union minister of state for health and family welfare in the Rajya Sabha Feb 2, 2021.
  • Lack of Primary Healthcare Services: The existing public primary health care model in the country is limited in scope- This represents only 15% of all morbidities for which people seek care.
  • India had 85.7 physicians per 1,00,000 people in 2017 (in contrast to 98 in Pakistan, 100 in Sri Lanka and 241 in Japan).
  • 53 beds per 1,00,000 people (in contrast to 63 in Pakistan, 79.5 in Bangladesh, 415 in Sri Lanka and 1,298 in Japan).
  • 7 nurses and midwives per 1,00,000 people (in contrast to 220 in Sri Lanka, 40 in Bangladesh, 70 in Pakistan, and 1,220 in Japan).
  • India has among the highest out-of-pocket (OOP) expenditures of all countries in the world- 62% of the total health expenditure in India is OOP.

Reasons and causes for this:

  • Low public health expenditure
  • The country ranks second-last among countries in its region in terms of public health spending as a share of its gross domestic product (GDP), according to the World Health Organization.
  • With less than one per cent public health spending as a share of GDP, India lags behind Bhutan (2.5 per cent), Sri Lanka (1.6 per cent) and Nepal (1.1 per cent), showed the National Health Profile 2019.
  • States also differ a great deal in terms of the fiscal space to deal with the novel coronavirus pandemic because of the wide variation in per capita health expenditure.
  • Inter-State variation in per capita health-care expenditure (between 2010-11 to 2019-20):
    • Kerala and Delhi have been close to the top in all the years.
    • Bihar, Jharkhand and Uttar Pradesh have been consistently towards the bottom of the ranking in all years.
    • Odisha is noteworthy as it had the same per capita health expenditure as Uttar Pradesh in 2010, but now has more than double that of Uttar Pradesh.

What needs to be done? How to manage the pandemic?

  • Enabling Preventive Care: In order to promote preventive care, the Union government has announced the conversion of primary health care centres into Health and Wellness Centers (HWCs).
  • Bringing Behavioural Change: There is a need to ensure people eat right, sleep right, maintain good hygiene, exercise, and adopt a healthy lifestyle that necessitates concerted interventions at various levels of the system.
  • Cooperative Federalism: Given the major role that States have to play in creating strong health systems across the country, allocations provided by the Finance Commission can become the critical catalyst for transforming the nation’s health. State governments should be incentivized to invest in creating a dedicated cadre for public health at the state, district and block levels.
  • More Funding: Public funding on health should be increased to at least 2.5% of GDP as envisaged in the National Health Policy, 2017.
  • Decentralisation: There is a need to make nutrition, water, sanitation and hygiene (WASH) part of the core functions of Panchayati raj institutions and municipalities.
  • A coordinated national plan at the central level to fight the pandemic.
  • The central government should handle the responsibilities including that of procuring vaccines from the international market


3.Reserve Bank of India: Surplus transfer

Context: The RBI announced a surplus transfer of ?99,122 crore for the 9-month period from July 2020 to March 2021.


  • The surplus is usually given based on the RBI’s operations over a one-year period. However, last year the RBI changed its accounting year to an April-March schedule, from the earlier period of July-June. Therefore, the central bank has decided to transfer the surplus for the nine-month period of June 2020 to March 2021.
  • The surplus was decided on while holding the contingency risk buffer at 5.5%, the RBI said. In 2019, the central bank had also adopted a new framework under which it is required to maintain a contingency risk buffer of 5.5-6.5% of its balance sheet. For this year, the RBI had chosen to maintain the lowest required buffer.
  • The surplus transfer amount is the second highest ever in any financial year. In the 2018-’19 fiscal year, the RBI had transferred nearly Rs 1.76 lakh crore. In the last financial year, the central bank transferred Rs 57,128 crore.

How does it help the government?

  • It is expected to help the central government with its expenses as the country battles the second wave of the coronavirus pandemic.
  • This will offer a buffer to absorb the losses in indirect tax revenues that are anticipated in May-June 2021, related to the impact of the now widespread state lockdowns on the level of consumption on discretionary items and contact-intensive services.
  • It will boost overall revenue for the govt and meet its fiscal deficit target.

How does RBI earn?

  • The RBI is a “full service” central bank— not only is it mandated to keep inflation or prices in check, it is also supposed to manage the borrowings of the GOI and of state governments; supervise or regulate banks and NBFCs; and manage the currency and payment systems.
  • While carrying out these functions or operations, it makes profits.
  • Typically, its income comes from the returns it earns on its foreign currency assets, which could be in the form of bonds and treasury bills of other central banks or top-rated securities, and deposits with other central banks.
  • It also earns interest on its holdings of local rupee-denominated government bonds or securities, and while lending to banks for very short tenures, such as overnight.
  • It claims a management commission on handling the borrowings of state governments and the central government.

It’s Expenditure

  • Its expenditure is mainly on the printing of currency notes and on staff.
  • Besides the commission it gives to banks for undertaking transactions on behalf of the government across the country, and to primary dealers, including banks, for underwriting some of these borrowings.

Economic Capital Framework

  • The RBI had formed a committee chaired by former Governor Bimal Jalan to review its economic capital framework and suggest the quantum of excess provision to be transferred to the government.
  • The panel recommended a clear distinction between the two components of the economic capital of RBI i.e. Realized equity and Revaluation balances.
  • Revaluation reserves comprise of periodic marked-to-market unrealized/notional gains/losses in values of foreign currencies and gold, foreign securities and rupee securities, and a contingency fund.
  • Realized equity, which is a form of a contingency fund for meeting all risks/losses primarily built up from retained earnings. It is also called the Contingent Risk Buffer (CBR).

 The revised Surplus Distribution Policy

  • It was finalized is in line with the recommendations of the Bimal Jalan committee. It states-
  • Any surplus due to the government can be paid only from retained earnings and not by using the notional revaluation reserves.
  • The contingent capital buffer has to remain at all times in a band of 5.5 per cent – 6.5 per cent of the RBI’s total balance sheet
  • The total economic capital of the RBI needs to be in the range of 20 per cent – 24.5 per cent of the RBI’s total balance sheet
  • If CBR is below the lower bound of requirement, risk provisioning will be made to the extent necessary and only the residual net income (if any) transferred to the Government.
  • However keeping CBR at a lower range of 5.5%, will reduce RBI’s space to manoeuvre monetary policy.

Issues with the surplus transfer

  • The government has long held the view that going by global benchmarks, the RBI’s reserves are far in excess of prudential requirements.
  • Former RBI governors Y.V. Reddy and D. Subbarao had publicly opposed such transfers, as did former deputy governor Viral Acharya, who argued such a move could be “catastrophic”.
  • Former Chief Economic Advisor Arvind Subramanian had suggested that these funds be utilized to provide capital to government-owned banks.
  • The central bank, on its part, has traditionally preferred to be more cautious and build its reserves – keeping in mind potential threats from financial shocks, and the need to ensure financial stability and provide confidence to the markets.
  • From the central bank’s perspective, bigger reserves on its balance sheet is crucial to maintaining its autonomy.


The infusion of additional funds, thus, will help the government to substantially overcome this shortfall and achieve the fiscal deficit target without having to axe allocations to social sector and poverty alleviation.

It needs the money and the RBI is living up to its role as the lender of last resort – except that this is not a loan, and the government is not a bank, which needs a lender of last resort.


4.White Fungus

Context: Four cases of ‘white fungus’ or ‘candidiasis’ have been detected in Patna, Bihar.

What is While Fungus :

  • White Fungus or Candidiasis is a fungal infection caused by a yeast (a type of fungus) called Candida.
  • Candida normally lives on the skin and inside the body,in places such as the mouth, throat, gut, and vagina, without causing any problems.
  • Candida can cause infections if it grows out of control or if it enters deep into the body (for example, the bloodstream or internal organs like the kidney, heart, or brain).
  • This infection can be caused due to low immunity or if people come in contact with things that contain these moulds like water, etc.


  • Patients of white fungus show Covid-like symptoms but test negative; the infection can be diagnosed through CT-Scan or X-ray.
  • White fungus can affect not just the lungs but also other parts of the body including “nails, skin, stomach, kidney, brain, private parts and mouth.

Who are more Vulnerable to White fungus:

  • Covid-19patients are more prone to white fungus as it affects the lungs and similar symptoms are created like that of coronavirus. The exact cause is unknown yet.
  • Children and women are more at risk of contracting the fungal infection.
  • Like the black fungus, white fungus is also more likely to afflict people with compromised immune systems, pre-existing medical conditions, AIDS, a recent kidney transplant or diabetes.


  • Special caution is required of moulds in water that can lead to infection.
  • Proper sanitation is very important.
  • Iceberg A-76

Context: An enormous iceberg ‘A-76’ has calved from the western side of the Ronne Ice Shelf, lying in the Weddell Sea, in Antarctica.

About A-76:

  • It measures around 4320 sq km in size – currently making it the largest berg in the world.
  • The newly calved berg ‘A-76’ was spotted in recent satellite images captured by the Copernicus Sentinel-1 mission.

[Sentinel-1 is one of the missions of the European Space Agency (ESA) under Copernicus initiative (an earth observation programme)]

  • It has surpassed the now second-place A-23A, about 3,380 sq km in size and also floating in the Weddell Sea.


5.Iceberg A-76

  • An iceberg is ice that broke off from glaciers or shelf ice and is floating in open water.
  • Icebergs travel with ocean currents and either get caught up in shallow waters or ground themselves.
  • The US National Ice Center (USNIC) is the only organisation that names and tracks Antarctic Icebergs.
  • Icebergs are named according to the Antarctic quadrant in which they are spotted.

Ice Shelves:

  • An ice shelf is a floating extension of land ice. The Antarctic continent is surrounded by ice shelves.
  • The Ronne Ice Shelf on the flank of the Antarctic Peninsula is one of the largest of several enormous floating sheets of ice that connect to the continent’s landmass and extend out into the surrounding seas.

Iceberg Calving:

  • Calving is the glaciological term for the mechanical loss (or simply, breaking off) of ice from a glacier margin.
  • Calving is most common when a glacier flows into water (i.e. lakes or the ocean) but can also occur on dry land, where it is known as dry calving.


  • Periodic calving off of large chunks of those shelves is part of a natural cycle, but the process has been accelerated by climate change.
  • Average sea levels have risen about nine inches since 1880, and about a quarter of that increase comes from ice melting in the Greenland and Antarctica ice sheets, along with land-based glaciers elsewhere.
  • According to a recent study, more ambitious national goals to cut greenhouse gas emissions and slow down climate change set recently are not enough to stop sea levels from rising.
  • In fact, melting glaciers and ice sheets will raise sea levels twice as fast as they would if countries fulfilled their earlier pledges under the Paris Agreement.


6.Chipko Movement:

Context: Sunderlal Bahuguna, Environmentalist, leader of Chipko movement dies of Covid at 94.

About Sunderlal Bahuguna:

  • Born in 1927 near Tehri, Uttarakhand.
  • Bahuguna led a life of activism inspired by Mahatma Gandhi. Inspired by non-violence and satyagraha.
  • He is credited for founding the Chipko Movement.
  • In 1981 he refused to accept the Padma Shri since the felling of trees was rampant in the Himalayas.
  • He also undertook a near-5000 km march across the Himalayas where he saw the pace of deforestation and devastation brought by developmental projects and submitted his findings in reports to the United Nations.
  • He was also a key figure in the protests against the Tehri Dam and even went to jail for it in 1995.
  • He also focused on the menace of alcoholism in the hills and empowerment of Dalits. It was Bahuguna’s work that led to the entry of Dalits in temples in Tehri district. He went on to establish an ashram for Dalits, in particular women.
  • Bahuguna undertook many fasts to protest construction of dams and felling of trees.
  • Bahuguna was awarded India’s second-highest civilian honour, Padma Vibhushan, in 2009.

What is Chipko movement:

  • Chipko movement was the uprising against the felling of trees and maintaining the ecological balance originated in Uttar Pradesh’s Chamoli district (now Uttarakhand) in 1973.
  • The name of the movement ‘chipko’ comes from the word ’embrace’, as the villagers hugged the trees and encircled them to prevent being hacked.
  • It was a silent, non-violent protest condemning ecological destruction.
  • Bahuguna is also coined the Chipko slogan ‘ecology is permanent economy’
  • The movement’s biggest triumph was making people aware of their rights to forests, and how grassroots activism can influence policy-making regarding ecology and shared natural resources.
  • The main demand of the people in these protests was that the benefits of the forests (especially the right to fodder) should go to local people.
  • The Chipko movement gathered momentum in 1978 when the women faced police firings and other tortures.
  • The then state Chief Minister, Hemwati Nandan Bahuguna set up a committee to look into the matter, which eventually ruled in favor of the villagers. This became a turning point in the history of eco-development struggles in the region and around the world.

Lasting impact of Chipko Movement:

  • As the movement continued, protests became more project-oriented and expanded to include the entire ecology of the region, ultimately becoming the “Save Himalaya” movement.
  • Between 1981 and 1983, Bahuguna marched 5,000 km (3,100 miles) across the Himalayas to bring the movement to prominence. Throughout the 1980s many protests were focused on the Tehri dam on the Bhagirathi River and various mining operations, resulting in the closure of at least one limestone quarry.
  • Similarly, a massive reforestation effort led to the planting of more than one million trees in the region.
  • In 2004 Chipko protests resumed in response to the lifting of the logging ban in Himachal Pradesh but were unsuccessful in its re-enactment.


“Himalaya is a land of penance. Nothing in the world can be achieved without penance. I am doing this on behalf of all who are striving to save our dying planet. Why should a river, a mountain and forest or the ocean be killed, while we cling to life?”                                    – Sunderlal Bahuguna

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