Daily Current affairs: 03 Nov2020

Tables of contents

1.16 Psyche Asteroid

2.Rural Development Fund

3.Personal Guarantors under Insolvency and Bankruptcy Code (IBC)

4.Bulk Drug Park

 

1.16 Psyche Asteroid

Recently, the new images from NASA’s Hubble Space Telescope offer a closer view of the mysterious asteroid 16 Psyche.

About 16 Psyche Asteroid

• It orbits between Mars and Jupiter.

• Unlike most asteroids that are made up of rocks or ice, scientists believe that Psyche is a dense and largely metallic object thought to be the core of an earlier planet that failed in formation.

• The NASA scientists believe that the asteroid is made up of almost entirely of iron, nickel and several other rare materials like gold, platinum, cobalt, iridium and rhenium.

• It is one of the most massive objects in the asteroid belt in our solar system.

• It is a potato-shaped asteroid which has a diameter of around 140 miles.

• It was first discovered on March 17, 1853, by the Italian astronomer Annibale de Gasparis.

• It was named after the ancient Greek goddess of the soul, Psyche.

• Metal asteroids are not commonly found in the solar system, and scientists believe that studying 16 Psyche may offer a rare glimpse of what the inside of a planet really looks like.

• The Psyche spacecraft is expected to be launched from Cape Canaveral, Florida, in 2022.

  • According to the estimates, it will fly past Mars in 2023 and is expected to arrive in the asteroid's orbit in 2026.

  • The spacecraft will stay in orbit around (16) Psyche, like a moon.

Source: The Indian Express

2.Rural Development Fund

Recently, the Union government’s decision to withhold rural development fee from Punjab, and letters asking the Punjab Government to explain its utilisation of the Rural Development Fund (RDF) that it gets largely from the Food Corporation of India (FCI) has enraged the state government.

What is Rural Development Fund or RDF?

• RDF is the 3 percent cess levied on the purchase or sale of agricultural produce under the Rural Development Fund Act, 1987.

• It is executed by Punjab Rural Development Board (PRDB) with the Chief Minister as its chairman.

What is Rural Development Board (RDB)?

• The RDB was incorporated in April 1987 under Rural Development Act, 1987.

• It is mandated with the promotion of better agriculture, and granting relief for the loss and damage to agricultural produce.

• It also provides the facility of streets lights, dharamshalas, panchayat ghars, canals and drains, government health infrastructure, drinking water, sanitation, and government educational institutions in rural areas.

Why has the central government suspended this fund?

• The central government, in a letter from the Union Ministry of Consumer Affairs, Food and Public Distribution, has observed that the fund is being diverted.

• The Union government has asked the state government to explain how it is utilising the money.

  • It has also not made any provision for this fund in the cost sheet that it has sent to the state.

Source: The Indian Express

3.Personal Guarantors under Insolvency and Bankruptcy Code (IBC)

Recently, the Supreme Court on Friday transferred to itself all the petitions challenging the Insolvency and Bankruptcy Code (IBC) provisions relating to initiation of insolvency proceedings against personal guarantors.

What is a personal guarantee?

• The promoters of some of the big business houses submit a personal guarantee to the lenders in order to secure loans easily and effectively and to showcase their intent to repay bank dues on time.

• It is sort of like an assurance from the owner or the owners of the company that the monies borrowed by their company for various purposes shall be re-payed on time as per the agreed schedule.

• It is different from the collateral that firms give to banks to take loans, as Indian corporate laws say that individuals such as promoters are different from businesses and the two are very separate entities.

• A personal guarantee is most likely to be furnished by a promoter or promoter entity when the banks demand for collateral which equals the risk they are taking by lending to the firm.

Issue of Personal Guarantee and Guarantors in the Supreme Court

• The government had always wanted to make promoters of loan defaulters, wilful or otherwise, accountable for their actions when they were at the helm of companies that are now undergoing insolvency resolution.

• In December 2019, the government came out with a new provision that empowered banks to move an application for initiation of insolvency against personal guarantors to corporate debtors.

• In cases of most big companies that were in the Reserve Bank of India’s list for being big defaulters, the actions of erstwhile promoters have been under the lens of the government as well as its probe agencies.

• The Finance Ministry nudged banks to pursue personal insolvency cases against promoters who had furnished personal guarantees for the loans taken by their firms, which later was not re-payed as per the agreed schedule.

Issues under Challenges made in Supreme Court

• One of the major contentions is that if insolvency tribunals start accepting the plea of banks on personal insolvency, it could lead to the initiation of insolvency twice for the same debt.

• The banks have argued that apart from getting the appropriate bids for debt-laden companies, owners who have been declared to be wilful defaulters should also be held liable and their personal guarantees be invoked.

Source: The Hindu

4.Bulk Drug Park

Recently, the Himachal Pradesh government has identified around 1,400 acres in Una district and sent a proposal to the Centre seeking grant to set up a bulk drug park.

What is a Bulk Drug?

• A bulk drug is also called an active pharmaceutical ingredient (API).

• It is the key ingredient of a drug or medicine, which lends it the desired therapeutic effect or produces the intended pharmacological activity.

• APIs are prepared from multiple reactions involving chemicals and solvents.

• The primary chemical or the basic raw material which undergoes reactions to form an API is called the key starting material, or KSM.

• The chemical compounds formed during the intermediate stages during these reactions are called drug intermediates or DIs.

Promotion of Bulk Drug Parks in India

• India has one of the largest pharmaceutical industries in the world (third largest by volume) but this industry largely depends on other countries, particularly China, for importing APIs, DIs and KSMs.

• In January, factories in China shut down when the country went into a lockdown, and later, international supply chains were affected as the Covid pandemic gripped the entire world.

• The border conflict between India and China has pushed the Indian government to call for greater self-reliance across all industries.

• In June 2020, the department of pharmaceuticals announced a scheme for the promotion of three bulk drug parks in the country.

Significance of Bulk Drug Parks

• A bulk drug park will have a designated contiguous area of land with common infrastructure facilities for the exclusive manufacture of APIs, DIs or KSMs.

• The parks are expected to bring down manufacturing costs of bulk drugs in the country and increase competitiveness in the domestic bulk drug industry.

• The Centre’s scheme will support three selected parks in the country by providing a one-time grant-in-aid for the creation of common infrastructure facilities.

• The grant-in-aid will be 70 per cent of the cost of the common facilities but in the case of Himachal Pradesh and other hill states, it will be 90 per cent.

• The Centre will provide a maximum of Rs 1,000 crore per park.

Source: The Indian Express

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