Prelims Exam


1.Asset Reconstruction Companies (ARCs) (RBI Master Direction)

Key Regulations (RBI):

  • Minimum net owned fund (NOF) of Rs 300 crore required.
  • Certificate of Registration (CoR) mandatory from RBI before operation.
  • Investment restrictions:
    • Only 10% of owned funds can be used for land/building (own use).
    • No deposit taking allowed.
  • Capital adequacy ratio: minimum 15% of total risk-weighted assets.


  • Buy Non-Performing Assets (NPAs) from banks and financial institutions.
  • Established to address stressed assets in the Indian banking system (announced in Budget 2021-22).
  • Owned by state-owned and private-sector banks (no government equity).
  • Play a vital role in improving banks’ financial health by resolving bad loans.


2. Inheritance Tax (Estate Tax)


  • Tax levied on the total value of assets inherited by legal heirs.
  • Calculated on asset value minus exemptions/deductions.


  • Raise government revenue.
  • Facilitate wealth redistribution.


  • No inheritance tax since 1985 (Inheritance/Estate Tax abolished).



3.Permafrost Region: Shifting from Carbon Sink to Source (Global Biogeochemical Cycles, 2020)


  • Permafrost (permanently frozen ground) covers a quarter of the Northern Hemisphere.
  • Upper 3 meters of permafrost store vast amounts of organic carbon (1 trillion tonnes) and nitrogen (55 billion tonnes).
  • Global warming is thawing permafrost, releasing these stored greenhouse gases.

Northern Permafrost Region:

  • Historically, a major carbon and nitrogen sink.
  • Projected to become a carbon source due to permafrost thaw.
  • Increasing temperatures expose organic carbon, leading to greenhouse gas emissions.

Shift From Sink to Source (2000-2020):

  • Study provides first comprehensive estimates of greenhouse gas emissions and capture.
  • Emitted:
    • 38 million tonnes of Methane (CH4)
    • 670,000 tonnes of Nitrous Oxide (N2O)
    • 12 million tonnes of Carbon Dioxide (CO2)
  • Net source of:
    • 144 million tonnes of CO2 and CH4
    • 3 million tonnes of nitrogen

Impact of Thawing Permafrost:

  • Release of greenhouse gases can significantly impact the global carbon cycle.
  • Potential to accelerate global warming (permafrost carbon feedback).

Emission Sources by Ecosystem Type:

  • Wetlands: Biggest source of methane (83%)
  • All terrestrial ecosystems (except boreal forests) emit methane.
  • Dry tundra: Biggest source of N2O emissions, followed by permafrost bogs.


4.Pulicat Lake: Wetland Under Threat


  • Borders Tamil Nadu and Andhra Pradesh (northern TN, southern AP).


  • India’s second-largest brackish water ecosystem.
  • Rich biodiversity:
    • ~250 bird species (50 intercontinental)
    • Crucial breeding ground for marine life


  • Proposed denotification of a wetland and sanctuary area.

Ecological Significance:

  • Unique hydrology supports diverse wildlife.
  • Extensive mangroves in its eco-sensitive zone (ESZ) provide vital habitat.
  • Plays a key role in the Central Asian Flyway for birds.



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