1. Status of NPAs in SHG loans


The Union Ministry of Rural Development (MoRD) has asked states to monitor the status of Non Performing Assets (NPAs) district-wise and take corrective measures to recover overdue/outstanding dues from Self-Help Groups (SHGs).

  • The issue was raised in the review meeting of the Deendayal Antyodaya Yojana- National Rural Livelihoods Mission.
  • A Non Performing Asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.
  • Deendayal Antyodaya Yojana – National Livelihoods Mission
  • It was launched by the Ministry of Rural Development (MoRD), Government of India in 2011.
  • NRLM set out with an agenda to cover 7 Crore rural poor households, across 600 districts, 6000 blocks, 2.5 lakh Gram Panchayats and 6 lakh villages in the country through SHGs and federated institutions and support them for livelihoods collectives in a period of 8-10 years.
  • The Mission aims at creating efficient and effective institutional platforms for the rural poor enabling them to increase household income through sustainable livelihood enhancements and improved access to financial services.

Main Points

NPAs in SHG Loans:

  • About Rs. 91,130 crore have been given to about 54.57 lakh SHGs across the country by the end of March 2020 as loans.
  • Around 37% or Rs. 2,168 crore of this total outstanding bank loans turned out to be NPAs.
  • The proportion of NPAs in bank loans given to SHGs has significantly increased over the last decade from 90% in 2008 to 6.12% in 2018.
  • There has been a rise of 19% in overall NPAs in SHG loans in 2019-20 compared to financial year 2018-19.

State Wise Distribution:

  • Uttar Pradesh, which has 71,907 SHGs, reported that 36.02% of the loans taken by the groups were NPAs at the end of March 2020, as compared to 22.16% in 2018-19.
  • In Arunachal Pradesh, the NPA proportion stood at an alarming 43%, though the number of SHGs there is just
  • Directions: The State Rural Livelihood Missions (SRLMs) were directed by the MoRD to monitor the status of NPA district wise and take immediate corrective actions wherever instances of NPA or overdues were found.
  • A mechanism under which representatives drawn from SHGs monitored loans had proved critical in ensuring timely repayment and therefore, it should be institutionalised in all bank branches.
  • Reasons : In 2019, the National Institute of Rural Development and Panchayati Raj (NIRDPR) has conducted a research study on NPAs by SHGs.
  • It found that poor economic conditions, non-cooperation, lack-of training, expenses towards marriages and social ceremonies, and medical emergencies are the main reasons for non-payment of loans by
  • Expectations of loan waiver from the government was also found to be a major reason for the poor financial health of SHGs.
  • The role played by banks in handholding, timely opening accounts, monitoring and follow-up was not as per the expectation.

Initiatives by Central Government to promote SHGs :

National Institute of Rural Development and Panchayati Raj

  • It is an autonomous organisation under the Union Ministry of Rural Development.
  • It is a premier national centre of excellence in rural development and Panchayati Raj.
  • It has been recognized internationally as one of the UN-ESCAP Centres of Excellence.
  • It builds capacities of rural development functionaries, elected representatives of Panchayati Raj Institutions, bankers, Non-Governmental Organizations and other stakeholders through interrelated activities of training, research and consultancy.
  • The Institute is located in Hyderabad (Telangana).


  • Training SHGs and providing them market linkages for the products/services so that they use the funds for income generating activity and have no problem in paying back the loan amount should be done by the government. In addition, providing group health and life insurance clubbed with loans at low cost will help as members spend a significant portion of the loan on events like ill-health, ceremonies etc.
  • It needs to be ensured that grading of SHGs needs to be done properly and loans should be issued only if it is found suitable for lending. Follow-ups and constant monitoring is a must.
  • Quantum of loan should be high as it is a major limiting factor, one-time lending not only impedes the process of business expansion but also wastes the money lent so far. Banks need to be sensitized to lend multiple doses of credit, for well performing SHGs.


  1. Adjusted Gross Revenue to be Paid in 10 Years


Recently, the Supreme Court of India allowed telecom companies (telcos) 10 years’ time to pay their Adjusted Gross Revenue (AGR) dues to the government.

Adjusted Gross Revenue

  • AGR is a fee-sharing mechanism between the government and the telcos who shifted to the ‘revenue-sharing fee’ model in 1999, from the ‘fixed license fee’
  • In this course, telcos are supposed to share a percentage of AGR with the government.

Main Points

Background of the issue :

  • The telecom sector was liberalised under the National Telecom Policy, 1994 after which licenses were issued to companies in return for a fixed license
  • To provide relief from the steep fixed license fee, the government in 1999 gave an option to the licensees to migrate to the revenue sharing fee model.
  • Under this, mobile telephone operators were required to share a percentage of their AGR with the government as annual license fee (LF) and spectrum usage charges (SUC).
  • License agreements between the Department of Telecommunications (DoT) and the telecom companies define the gross revenues of the latter.
  • The definition of AGR has been under litigation for 14 years. In 2005, Cellular Operators Association of India (COAI) challenged the government’s definition for AGR calculation.
  • However, DoT argued that AGR includes all revenues from both telecom and non-telecom services.
  • The companies claimed that AGR should comprise just the revenue accrued from core services and not dividend, interest income or profit on the sale of any investment or fixed assets.
  • In 2015, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) stayed the case in favour of telecom companies and held that AGR includes all receipts except capital receipts and revenue from non-core sources such as rent, profit on the sale of fixed assets, dividend, interest and miscellaneous income.
  • However, setting aside TDSAT’s order, the Supreme Court upheld the definition of AGR as stipulated by the DoT in October 2019.

Directions Issued by Court:

  • The telecom operators would make the payment of 10% of the total dues as demanded by the Department of Telecom by 31 March 2021.
  • The yearly instalments would commence from 1 April 2021 up to 31 March 2031. The instalments would be paid by 31 March every year.
  • In the event of any default in making payment of annual instalments, interest would be levied as per the agreement along with penalty and interest on penalty automatically without reference to court.
  • Besides, it would be punishable for contempt of court.
  • Compliance with the court order should be reported by the telcos and the telecom department every year on 7 April.
  • The sale of spectrum by telcos facing insolvency proceedings shall be decided by the National Company Law Tribunal (NCLT).

Issues Involved:

  • The definition of AGR has been such a contentious issue because it has huge financial implications for both telcos and the government. It was estimated, after the SC’s 2019 judgment, that the telecom operators owe the government about Rs. 92,000 crore in back charges, interest and penalties on license fee alone.
  • The October 2019 judgment had pushed many telcos on the verge of bankruptcy.
  • While the government has been deprived of the extra revenue, the financial implications for telecom companies — who now have to pay overdue amounts piled up for years — are serious too.
  • Especially at the current juncture, when profits for telcos are under pressure from severe competition and the falling average revenue per user.



  1. Manufacturing Improved: PMI


As per the latest Purchasing Managers’ Index (PMI) data, India’s manufacturing sector activity has started to show signs of growth in August, driven mainly by pick-up in production along with improvement in customer demand.

Purchasing Managers’ Index

  • Purchasing Managers’ Index (PMI) is an indicator of business activity – both in the manufacturing and services sectors.
  • It is calculated separately for the manufacturing and services sectors and then a composite index is also constructed.
  • The PMI summarizes whether market conditions as viewed by purchasing managers
  • are expanding, neutral, or contracting.
  • The purpose of the PMI is to provide information about current and future business conditions to company decision makers, analysts, and investors.
  • The PMI is a number from 0 to 100.
  • PMI above 50 represents an expansion when compared to the previous month;
  • PMI under 50 represents a contraction, and A reading at 50 indicates no change.
  • The PMI is usually released at the start of every month. It is, therefore, considered a good leading indicator of economic activity.
  • The Index (PMI) is compiled by IHS Markit for more than 40 economies worldwide. IHS Markit is a global leader in information, analytics and solutions for the major industries and markets that drive economies worldwide.

Main Points

PMI Data:

  • The Purchasing Managers’ Index (PMI) rose from 46 in July to 52 in August.
  • In PMI parlance, a value above 50 means expansion, while a score below that denotes contraction. In April, the index had slipped into contraction mode, after remaining in the growth territory for 32 consecutive months.

Positive Highlights:

  • New business received by Indian manufacturers expanded at the fastest pace since February.
  • Higher levels of production supported a modest rise in the number of purchases during August.

Goods and Services Tax Collection:

  • GST collections in August stood at— 88% of the august 2019-20 level.
  • Collections in July were marginally higher but at 85.6% of the year earlier.
  • Infrastructure: The contraction in India’s infrastructure sector slowed to 6% in July compared with 12.9% shrinkage in June.
  • Mobility: The Google Mobility index, which measures visits to different locations such as retail shops, workplaces, parks and transport hubs, showed a 2% rise in trends for places such as supermarkets, food warehouses, farmers’ markets, speciality food shops and pharmacies.
  • E-way bills, another widely followed indicator of business activity, reached 8% of last year’s level in August.
  • Petrol consumption: Petrol consumption rose by about 2% in the first fortnight of August from the corresponding period in July.


  • The pick-up in demand from domestic markets gave rise to upturns in production and input buying.
  • Gradually, unlocking after lockdown has increased the pace of mobilization of economic resources.
  • Exports are also on marginal improvement. When compared to imports, the rate of export demand is on the higher side due to strict slash on imports.


  • Unemployment: Despite an expansion in new orders, job shedding continued in the Indian manufacturing sector.
  • The relocation of employees following Covid-19 pandemic is linked to the reduction in staffing numbers.
  • Inflation: Reports of higher raw material costs due to supplier shortages and transportation delays stemming from the Covid-19 pandemic, resulted in rising input prices during August.
  • Exports: The decline in foreign exports weighed slightly on overall new orders as firms cited subdued demand conditions from abroad.


  • Focusing on Atmanirbhar Bharat: The government announced an economic stimulus package of Rs. 20 lakh crore and big-bang systemic reforms under the
  • Atmanirbhar Bharat Abhiyan (self-reliant India). The intended objective of this plan is two-fold.
  • First, interim measures such as liquidity infusion and direct cash transfers for the poor will work as shock absorbers for those in acute stress.
  • The second, long-term reforms in growth-critical sectors to make them globally competitive and attractive.

Increasing the MGNREGA Funding and Expanding to Urban Areas:

  • The Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA) programme has proved to be a bedrock of support in the normal times and during times of difficulty (like Covid-19) and it will be a good idea to expand the scheme to urban areas.
  • Transfer of Cash Benefits: Money in the hands of people can provide an immediate sense of security and confidence, which is the cornerstone to restoring economic normalcy.
  • It will raise the consumption and demand of the economy and can bring back the virtuous cycle of demand and supply in play.
  • Issues with the Banking System: Covid-19 assistance measures undertaken by the Reserve Bank of India (RBI) and the government such as interest rate reductions, credit guarantee and liquidity enhancement schemes are welcome steps.
  • Although banks have largely failed to take initiatives as they are not confident of lending.
  • The RBI should consider a Single One Time Window for restructuring business loans, as required, by all banks.

Tax Incentivization:

  • Big business houses and MSME sector should be supported by the government though tax incentivization to reopen their operations.
  • This will energize consumer demand and boost the functioning of the vendor or ancillary industry in the MSME sector (which has huge potential for job creation).
  • Calibrating Make in India: The ongoing distrust on Chinese manufacturing amid USA-China spat can be very well garnered by India. Making India a global trading hub – devise an incentive regime for companies setting up global trading operations from India.
  • Promoting Sunrise Sectors: It should also encourage sunrise sectors as part of re-imagining Indian economy such as battery manufacturing (storage systems)/ solar panel manufacturing.
  • The government can also consider giving impetus to “Deep Tech”-leveraged businesses – blockchain, robotics, AI, machine learning, etc.
  • Auto-sector Reforms: The auto industry which contributes significantly to GDP (nearly 9%) deserves special treatment. In addition to reducing GST rate, old vehicle scrap policy with tax incentives for creating a demand for new vehicles may be formulated.
  • Labour Law Reforms: Focus should be given to strictly enforce discipline within the factory premises and demand higher productivity. The moves by U.P., M.P. and
  • Gujarat are welcome signals. labour laws must be motivated by concerns of sustainability. Minimum wages, a written job contract that specifies terms and conditions of working, social security provisions etc.




  1. Eighth East Asia Summit Economic Ministers’ Meeting


Recently, the 8 East Asia Summit Economic Ministers’ Meeting (EAS-EMM) was

held virtually and attended by 10 ASEAN members and eight other nations, including India, the USA, and China.

  • The meeting highlighted the importance of strengthening regional supply chains to make them resilient in times of heightened challenges posed by the Covid-19 pandemic and to spur economic growth.
  • Recently, Japan has mooted the Supply Chain Resilience Initiative (SCRI) as a trilateral approach to trade, with India and Australia as the key-partners.

Main Points

Features of the Joint Statement:

  • Any trade-restrictive emergency measures put in place to address the impact of Covid-19 must be targeted, proportionate, transparent, temporary, consistent with the World Trade Organisation (WTO) rules and do not create unnecessary barriers to trade or disruption of global and regional supply chains.
  • Support for the necessary reforms in the WTO and pledge to continue to work together to realise a free, fair, transparent, non-discriminatory, predictable, and stable trade environment.
  • Facilitating the essential movement of people across borders, without undermining each country’s efforts to prevent the spread of the virus and to stabilise the trade and investment.
  • Commitment to facilitate supply chain connectivity, including for essential goods such as medical supplies, medicines, including vaccines, food, commodities and other essential supplies and services in the region.
  • Harness the opportunities of the digital economy to overcome the challenges posed by restricted movement.

India’s Stand:

  • India highlighted its Atmanirbhar Bharat Abhiyan which is about upscaling the growth of Indian industry, its skills and capabilities to make them resilient and less vulnerable to shocks and integrating Indian industries with the global supply chains.

Significance of the Meeting:

  • The meeting comes at a critical juncture when the pandemic has not just posed an unprecedented health crisis but also caused a sharp contraction in economic activities, disrupting trade and investments.
  • The International Monetary Fund (IMF) has predicted a 4.9% contraction for the 2020 global Gross Domestic Product (GDP), warning that the Covid- 19 outbreak has plunged the global economy into its worst recession since the Great Depression in the 1930s.
  • In April, the WTO also warned that global trade volume growth could crash by 13-32% in 2020.

East Asia Summit

  • Established in 2005, it is a forum of 18 regional leaders for strategic dialogue and cooperation on the key political, security, and economic challenges facing the Indo-Pacific region.


  • The concept of an East Asia Grouping was first promoted in 1991 by the then Malaysian Prime Minister, Mahathir bin Mohamad. India is one of the founding members of the East Asia Summit.


  • It comprises the ten member states of the ASEAN which are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, along with 8 other countries namely Australia, China, Japan, India, New Zealand, the Republic of Korea, Russia and the USA.
  • It is an ASEAN-centred forum so it can only be chaired by an ASEAN member.



  1. Compatibility of the Contempt of Court with International Standards


The International Commission of Jurists (ICJ) has urged for a review of criminal contempt laws in India, expressing its concerns over the Supreme Court’s decision to convict Advocate Prashant Bhushan for criminal contempt.

Main points

The Supreme Court’s Decision:

  • The Court found Prashant Bhushan guilty of ‘scandalizing the court’ on a suomotu consideration of his two tweets. It has fined him with Rs. 1.
  • It held that tweets on its “role” in the “last six years” and a photograph of the Chief Justice of India on a motorbike undermines its dignity and the office of the Chief Justice of India (CJI) in the public eye.

Contempt of Court:

Constitutional Provisions:

  • Article 129 and 215 of the Constitution of India empowers the Supreme Court (SC) and High Court respectively to punish people for their respective contempt.
  • Article 142 of the Indian Constitution also empowers the SC to punish for its contempt. However, what is contempt of court per se has not been defined by the Indian Constitution.
  • Statutory Provisions: The Contempt of Court Act, 1971 elaborately deals with the concept of contempt of court.
  • The Act divides contempt into civil and criminal contempt.

International Commission of Jurists’ Views:

  • For the ICJ, the conviction appears to be inconsistent with international standards on freedom of expression and the role of lawyers.


The Universal Declaration of Human Rights: The judgement goes against the general protection of free speech and expression in the Universal Declaration of Human Rights.

  • The Declaration was proclaimed by the United Nations General Assembly in 1948. For the first time, fundamental human rights were made universally applicable and protected.
  • It states that ‘All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.’

The International Covenant on Civil & Political Rights:

  • The judgement is inconsistent with the freedom of expression law guaranteed by the International Covenant on Civil and Political Rights.
  • The ICCPR is a key international human rights treaty, providing a range of protections for civil and political rights.
  • The Covenant compels governments to take administrative, judicial, and legislative measures in order to protect the rights enshrined in the treaty and to provide an effective remedy.
  • The Covenant was adopted by the UN General Assembly in 1966 and came into force in 1976. 173 countries including India have ratified the Covenant.

The United Nations’ Basic Principles on the Role of Lawyers:

  • The judgement goes against the principles enshrined under the UN Basic Principles on the Role of Lawyers.
  • Principle 23: Lawyers “shall have the right to take part in public discussion of matters concerning the law, the administration of justice and the promotion and protection of human rights”.
  • These Principles were adopted by the 8 United Nations Congress on the Prevention of Crime and the Treatment of Offenders, Cuba in 1990.
  • The Bar Association of India also highlighted that “the exercise of contempt jurisdiction by the Court in this manner has potential for more self-harm than the avowed purpose of safeguarding the prestige of the institution”.

International Commission of Jurists

  • Since 1952, the International Commission of Jurists (ICJ) has performed a unique and prominent role as a Non Governmental Organization (NGO) defending human rights and the rule of law worldwide.
  • It is headquartered in Geneva, Switzerland.

Way Forward

  • The contempt of court should not be allowed to be used as a means to prevent criticisms and in the era of social media, besides the need to revisit the law on criminal contempt, even the test for contempt needs to be evaluated.
  • In contemporary times, it is more important that courts are seen to be concerned about accountability rather than threats of contempt action, and processes are
  • On criminal contempt, India can learn from Britain which abolished the offence of scandalizing the judiciary as a form of contempt of court in 2013.
  • The Law Commission of India held that there is a need to retain the provision regarding the contempt of courts. However, it also recommended the definition ofcontempt in the Contempt of Court Act should be restricted to civil contempt, i.e., willful disobedience of judgments of the court.

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