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23rd September Part-2: Daily News Analysis
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Rishab Arora
Graduate in Economics. Gold medal in Dissertation, Prepared various documents on Demonetisation and GST, Share-trading and many more

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shishu, Kishore and Tarun are 3 categories under mudra loan
3 divisions are - Sishu,kisore and tarun
  1. The lowdown on cases before new CJI (GS-2) Over 54,000 cases are pending in the Supreme Court. But only a few grab public attention, and they become the litmus test for the court. Justice Ranjan Gogoi, who assumes office as the Chief Justice of India on October 3, has a slew of keenly watched cases. Some of the most anticipated among them is the monitoring of the preparation of the National Register of Citizens (NRC) of Assam, which happens to be Justice Gogoi's native State. * A Bench, led by Justice Gogoi, recently agreed to monitor the setting up and functioning of special courts to try cases against sitting Members of Parliament and the Assemblies. Justice Gogoi will head the Supreme Court through a politically-decisive term. He will assume office just months ahead of the 2019 general election. The fate of the Ramjanmabhoomi-Babri Masjid appeals lies in the balance in the court. The incumbent Chief Justice, Dipak Misra, is scheduled to pronounce a judgment this month on whether or not the appeals should be referred to a Constitution Bench. Whatever be the verdict, the next and decisive step would lie with Justice Gogoi.

  2. * The case of the release of seven convicts in the Rajiv Gandhi assassination case may bounce back to the court. The State government has requested the Tamil Nadu Governor to release the convicts. If a challenge comes to the court against the Governor's decision, whatever it may be, the court has limited power of judicial review of the Governor's constitutional discretion under Article 161. One of the biggest challenges for Justice Gogoi would be the pending petitions against Article 35A, which provides special status, rights and privileges to Jammu and Kashmir. The hearing is scheduled for the second week of January 2019, after the panchayat elections in the State * In Courting The People-Public Interest Litigation in Post Emergency India , Anuj Bhuwania said that with public interest litigation or PIL, "a new kind of judicial process had emerged, entirely court-led and managed, sometimes even initiated and implemented by its own machinery. The court appointed its own lawyers and instrumentalities." Many of the closely followed cases in the court are PIL petitions, which are filed by third parties against injustices in society A Justice Gogoi-led Bench is hearing a contempt petition over the government's delay in appointing the anti-corruption ombudsman, Lokpal. A series of orders from the Special Bench of Justices Gogoi and Nariman has seen the government publish its second and final draft of the NRC in Assam. Now the court is examining a draft standard procedure to receive the objections and claims of over 40 lakh people left out of the draft NRC

  3. * The court is also hearing petitions on the fate of Rohingya refugees. In the recent years, the court has heard challenges against customs and personal law practices. It has adjudicated a series of religious issues from triple talaq to a temple ban on women of a certain age to the right to pray of Parsi women, who marry outside their faith, in the Tower of Silence. A batch of petitions challenging nikah halala - which involves a female divorcee marrying someone else, consummating the marriage and then getting a divorce in order to make it allowable to remarry her previous husband - awaits Justice Gogoi's attention. Justice Gogoi's term will see four retirements from the court. Three would be that of his present Collegium colleagues: Justices Madan B. Lokur, Kurian Joseph and A.K. Sikri. Justice A.M. Sapre would retire a few months ahead of Justice Gogoi himself. It is to be seen whether the new Collegium would function with a "spirit of collegiality" (as senior advocate Fali Nariman puts it) after a tumultuous first half of 2018. It is also to be seen whether Justice Gogoi would decide positively issues like live-streaming of court proceedings and continue with the publication of Collegium resolutions on the court website.

  4. Why do Mudra loans have credit risks? (GS-3) What is the problem? Former RBI Governor Raghuram Rajan, in his report to Parliament recently, said that while non-performing assets stemming from corporate loans are a current problem, the government should focus on sources of the next crisis. In particular, he warned, the government should refrain from setting ambitious credit targets or waiving loans. He called out Mudra loans as those with potential credit risks. He particularly flagged the culture of meeting targets by rushing through due process and then offering populist sops such as mass waiver of loans. "Credit targets are sometimes achieved by abandoning appropriate due diligence, creating the environment for future NPAs. Both Mudra loans as well as the Kisan Credit Card, while being popular, have to be examined more closely for potential risk. The Credit Guarantee Scheme for the MSME run by the SIDBl is a growing contingent liability and needs to be examined with urgency," he said in his note.

  5. What is Mudra? The Micro Units Development & Refinance Agency Ltd. (Mudra) was set up in 2015 under the Pradhan Mantri Mudra Yojana (PMMY) to help develop and refinance the non-corporate business, sector by supporting finance institutions that lend to micro/small business entities engaged in manufacturing, trading and service activities. It is aimed at using micro finance as an economic development tool that helps to provide income-generating opportunities to the people at the bottom of the pyramid, targeting small manufacturing units, shopkeepers, fruits and vegetable vendors, truck and taxi operators, food-service units, repair shops, machine operators, artisans and food processors.

  6. Is repayment a challenge?' Critics of the scheme say that too many best practices in loan origination have been neglected while authorising and disbursing loans. Earlier this year, the CBI registered a case against a former official of Punjab National Bank for alleged abuse of official position in sanctioning and disbursing 26 Mudra loans amounting to 65 lakh. * Even if loans are sought by business owners genuinely seeking growth and bankers disburse them with an eye on economic development, ensuring repayment is still a challenge. First, these loans are unsecured - a collateral that could protect the interests of the bank is not required, unless an asset that is purchased can itself serve as collateral. The scheme is meant for those who need small amounts, but do not have access to such funds, but the very nature of the business of such borrowers is susceptible to volatility and annual cycles, not to mention the itinerant ways of some business owners, such as vegetable vendors. They may choose one location for their place of business on a day, and another elsewhere in their city the next day. Further, the public banking system may not be staffed for work this may entail. When it comes to collection, bank staff may choose to go after one loan with outstanding of 10 lakh, for example, rather than 10 loans of 1,00,000 each

  7. What is the average loan size? Loans under the Mudra scheme are disbursed under three heads, starting from loans up to #50,000 and going up to 10 lakh. About 32.53 lakh crore had been sanctioned for about 4.81 crore PMMY loans under all three heads in the financial year 2017-18. The average size of a sanctioned loan stood at Rs. 52,706 for the year. The State Bank of India recently said it had disbursed Rs. 28,556 crore under the PMMY scheme in FY18. Non-performing assets arising out of this scheme is about 5.2% for India's largest bank, a figure that the bank views as being under 'acceptable limits' The website dedicated to PMMY does not indicate the quantum of loans that have soured or details of collections. In May, the government said a total of 76 lakh crore had been disbursed to 12 crore beneficiaries under the Mudra scheme since its inception in 2015. Of these, 3.25 crore were first-time entrepreneurs and 9 crore borrowers were women