Q.1) MGNREGA is playing a crucial role in reviving the rural economy during the pandemic.Comment
Why this question:
- With unemployment figures at a 45-year high, and with the added economic destruction caused by the novel coronavirus pandemic, MGNREGA numbers are set to rise.
- Introduce with MGNREGA and its objectives
- Then write how MGNREGA is helping in revival of rural economy
- Highlight the issues with MGNREGA
Conclude by suggesting reforms in MGNREGA such as timely wage payment.
Q.2) Whether the benefits created by genetically modified(GM) crops outweigh the costs is a long standing or contentious debate in India. In this context analyze the status and future prospects of GM crops in India. (250 marks - 15 words)
Why this question? - Recently, Shetkari Sanghatana - the farmers’ union founded by the late leader Sharad Joshi - announced fresh plans in its agitation for use of genetically modified seeds.
Intro - Define what GM crops are. Tell, status of GM crops in India that are commercialized.
Body - First discuss the pros and cons of GM crops in India. Based on this discussion tell whether India should proceed with GM crops or not. Substantiate your point of view with some committee reports.
Way forward - There is a need to undertake more research to come up with authentic findings of pros and cons of GM crops before commercializing them.
Conclusion - Based on the above discussion summarize your anwer.
Q.3) What are rights issue and why companies are going for it amidst COVID-19 outbreak? Examine (250 words - 15 marks)
Why this question? - Reliance Industries Limited recently concluded its rights issue, raising a total of Rs 53,124 crore and witnessing an oversubscription of 1.59 times or received applications worth over Rs 84,000 crore.
Intro - Define what is the rights issue.
Body - Discuss why companies are going for rights issue - mention the regulatory changes made by SEBI amidst COVID-19. Then tell how the rights issues are beneficial for companies - efficient way of raising capital etc.
Conclusion - Summarize your answer based on the above discussion.
Q.4) The rise of India, China, and Brazil over the past few decades has reduced the G-7’s relevance. Discuss (250 words)
Why this question?
The next G7 summit, tentatively scheduled in Washington DC in mid-June, has been postponed by the host, the U.S. recently.
Mention recent proposal by the US President of a G10 or G11 instead, with the inclusion of India, South Korea, Australia, and possibly Russia.
- In brief about G-7
- Economic relevance of G7
- less than a third of global GDP on a purchasing power parity (PPP) basis
- The emergence of new economies and a corresponding decrease of relevance of G-7
- India’s economy is already the third-largest in the world in PPP terms
- The seven largest emerging economies (E7), comprising Brazil, China, India, Indonesia, Mexico, Russia, and Turkey, account for over a third of global GDP on purchasing power parity (PPP).
- Other limitations of G-7
- failed to head off the economic downturn of 2007-08
- The G7 has not covered itself with respect to contemporary issues.
- No action on earlier decisions
Turning the G-7 into an effective multilateral forum covering key global issues.
Q.5) The recent ordinance changing the provisions of Insolvency and Bankruptcy Code is drafted in the right spirit , though not immune from shortcomings. Comment. 15 marks ( 250 words)
Why this question:
The President of India promulgated an ordinance suspending the Insolvency and Bankruptcy Code (IBC) for a period of at least six months from 25 March, 2020 to protect businesses from being dragged to bankruptcy courts.
President came up with an ordinance to restructure the IBC amidst Covid 19 .
About the ordinance:
- The IBC (Amendment) Ordinance says that no business can be taken to bankruptcy tribunals for defaults during the period of the IBC’s suspension.
- It introduces Section 10 A under the Insolvency and Bankruptcy Code, with the objective of suspending Section 7, Section 9 and Section 10 of the Code, 2016 dealing with initiation of Corporate Insolvency Resolution Process (CIRP).
- Section 7 allows a financial creditor to file for initiating the corporate insolvency resolution process against a corporate debtor.
- Section 9 provides for application of insolvency by an operational creditor, while Section 10 is for initiation of insolvency proceedings by a corporate applicant.
- This suspension denotes a bar on the ability of a financial creditor, operational creditor and a corporate applicant seeking initiation of CIRP.
- The IBC suspension is applicable for a period of six months or such further period, not exceeding one year from such date.
- The suspension will not apply to any corporate default committed before 25 March,2020.
- Reduce stress on business
- Prevent closure of enterprises
- Job loss reduction
- Prevent the halt of liquidity cycle in numerous industries
- The above benefits indirectly would also reduce the social expenditure done by government on vulnerable sections
- No opportunity to Restructure Companies - As per experts, while pausing fresh bankruptcy proceedings could give a breather to many companies, it could also deprive lenders the opportunity to restructure certain companies which may be beyond redemption.
- Ambiguity regarding Proviso of Section 10 A - It states no application for insolvency resolution shall ever be filed against a corporate debtor for any default occurring during the suspension period.
- While the main Section 10A suspends such applications for a limited period, the proviso enlarges the scope to provide complete amnesty under the IBC for any default occurring during such period.
- Further the proviso does not appear to be legally tenable.
- As creditors can still approach courts, and as banks/FIs can still approach Debt Recovery Tribunals.
- Voluntary Resolution - Section 10A also suspends provisions of Section 10 of the IBC which enables voluntary insolvency resolution.
- This is difficult to understand as such voluntary insolvency resolution should have been made easier for companies facing distress.
- Nature of default - The ordinance appears to consider every default occurring during the suspension period to be a consequence of the pandemic.
- There could be cases where defaults were imminent due to other reasons, but which will now still enjoy this protection.
- The ordinance should have protected only such defaults which may occur as a direct consequence of the pandemic or the lockdown and should have left this determination to the National Company Law Tribunal.
- MSME Challenge - Earlier, the government increased the minimum default amount to trigger corporate insolvency resolution from Rs.1 lakh to Rs. 1 crore.
- This was purportedly done to protect MSMEs from insolvency petitions.
- However, this also operates against such MSMEs because they will now be forced to approach civil courts to recover undisputed debts below Rs. 1 crore.
- The suspension of these provisions would now impact even claims above Rs.1 crore for at least six months to a year.
Proactive Steps must be taken to address the concerns in the ordinance.