News Snippet

News 1: Centre raises credit limit under ECLGS – (Important as Government of India has extended this option to organizations which were facing severe stress on account of COVID-19 pandemic)

News 2: WTO warns ‘darkened’ trade outlook – (It talks about trade curbs can further worsen condition and cooling of demand in shipping rates might increase the recessionary fears

News 3: Oil rises as OPEC+ agrees to deep cuts – (All about OPEC+ supply cuts and its implication on energy prices)

News 4: What is the Insolvency and Bankruptcy Code? – (It is crucial as IBC is one of the measures which deals with insolvency resolution or restructuring which has occurred due to NPAs and bad debts)

News 5: Parliament Committees and their role in law-making (It is important as questions from Parliamentary Committee has been asked in UPSC Mains)

News 6: Nobel Prize 2022 for chemistry

Other important news:

  1. UN Human Rights Council (UNHRC):

News 1: Centre raises credit limit under ECLGS for airlines


The Ministry of Finance has raised the credit limit for airlines under the Emergency Credit Line Guarantee Scheme (ECLGS), making them eligible for a sum equivalent to 100% of their outstanding debt, up to a maximum of ₹1,500 crore.

This is the second time the government has liberalised the scheme for the aviation sector.

The scheme introduced for medium and small enterprises during the outbreak of the COVID-19 pandemic was extended till March 2023 and its guaranteed cover expanded by ₹50,000 crore to ₹5 lakh crore.

ECLGS (Emergency Credit Line Guarantee Scheme)

  1. Ministry: Ministry of Finance
  2.  Emergency Credit Line Guarantee Scheme (ECLGS) was launched in May 2020 as part of the Aatmanirbhar Bharat Abhiyaan.
  3. The main objective of the Scheme was to provide an incentive to Member Lending Institutions (MLIs), i.e., Banks, Financial Institutions (FIs) and Non-Banking Financial Companies (NBFCs) to increase access to, and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by providing them 100 per cent guarantee for any losses suffered by them due to non-repayment of the Guaranteed Emergency Credit Line (GECL) funding by borrowers
  4. The structure of the scheme allows easy access to credit as the lenders offer pre-approved loans based on borrower’s existing credit outstanding and there is no fresh appraisal undertaken by lenders since additional credit is sanctioned over and above the credit facilities already assessed.
  5. Further, the interest rate is also capped with a view to lower the cost of credit and loans are sanctioned without any processing charges, pre-payment charges and guarantee fee.
  6. The overall ceiling initially announced for ECLGS was Rs 3 lakh crore which was subsequently enhanced to Rs 5 lakh crore. However, ECLGS being a demand driven scheme, sanctions/disbursements are made by lending institutions based on assessment of borrower’s requirement and their eligibility.

Reason behind launching ECLGS

ECLGS was formulated as a specific response to the unprecedented situation caused by COVID-19 and the consequent lockdown, which had severely impacted manufacturing and other activities in the MSME sector.

The Scheme aimed at mitigating the economic distress being faced by MSMEs by providing them additional funding of up to Rs. 3 lakh crores in the form of a fully guaranteed emergency credit line


  • Ministry: Department of Financial Services, Ministry of Finance
  • Established: 2014 under Companies Act, 1956
  • National Credit Guarantee Trustee Company Ltd (NCGTC) is a private limited company incorporated to act as a common trustee company for multiple credit guarantee funds.
  • Credit guarantee programmers are designed to share the lending risk of the lenders and in turn, facilitate access to finance for the prospective borrowers.
  • The intent of NCGTC is therefore, to manage multiple guarantee schemes as part of a larger financial inclusion programme of the government covering different cross-sections and segments of the economy like students, micro entrepreneurs, women entrepreneurs, SMEs, skill and vocational training needs, etc.

News 2: WTO warns ‘darkened’ trade outlook


  1. The World Trade Organization (WTO) forecast a slowdown of global trade growth next year as sharply higher energy and food prices and rising interest rates curb import demand and warned of a possible contraction if the war in Ukraine worsens.
  2. The WTO said there was high uncertainty over its forecasts. It provided a band of trade growth expansion of 2% to 4.9% for this year and of -2.8% to 4.6% for 2023.
  3. Weather events hitting food-producing regions or damaging energy export infrastructure could further hit trade, along with weakness in China, where COVID-19 outbreaks have disrupted production.

Warns against curbs

  1. “These would only deepen inflationary pressures and reduce living standards and would likely make us more rather than less vulnerable to the crisis we are grappling with.”
  2. The WTO’s forecast does not cover services, but the WTO said tourist arrivals were likely to fall after tripling in the first seven months of 2022.
  3. Lower shipping rates, the global body said, might have been greeted before as a sign of supply chains improvements, but was probably more the result of cooling demand.

World Trade Organization

  1. Established: 1995 after the Uruguay Round of Negotiation
  2. Headquarters: Geneva, Switzerland
  3. Members: 164 representing 98% of world trade

UPSC 2016 prelims

In the context of which of the following do you sometimes find the terms ‘amber box, blue box and green box’ in the news?

(a)  WTO affairs

(b)  SAARC affairs

(c)  UNFCCC affairs

(d)  India –EU negotiations on FTA

Answer – Option a (Official UPSC Answer key)

News 3: Oil rises as OPEC+ agrees to deep cuts


Oil rose about 1% on Wednesday, as OPEC+ members agreed to its deepest cuts to output since the 2020 COVID pandemic, despite a tight market and opposition to cuts from the United States and others.

News 4: What is the Insolvency and Bankruptcy Code?


Speaking at the sixth anniversary of the Insolvency and Bankruptcy Board of India (IBBI) Union Finance Minister Nirmala Sitharaman said that the country could not afford to lose the “sheen” of its insolvency law, the Insolvency and Bankruptcy Code (IBC).

Addressing the issue of haircuts — or the debt that banks forgo — she said it was unacceptable that banks should take a hefty haircut on loans that go through the resolution process.

What is the IBC?

In a growing economy, a healthy credit flow and generation of new capital are essential, and when a company or business turns insolvent or “sick”, it begins to default on its loans.

In order for credit to not get stuck in the system or turn into bad loans, it is important that banks or creditors are able to recover as much as possible from the defaulter, as quickly as they can.

In 2016, at a time when India’s Non-Performing Assets and debt defaults were piling up, and older loan recovery mechanisms were performing badly, the IBC was introduced to overhaul the corporate distress resolution regime in India and consolidate previously available laws to create a time-bound mechanism with a creditor-in-control model as opposed to the debtor-in-possession system.

When insolvency is triggered under the IBC, there can be just two outcomes: resolution or liquidation.

What are the challenges for the IBC?

According to its regulator IBBI, the first objective of the IBC is resolution — finding a way to save a business through restructuring, change in ownership, mergers etc.

The second objective is to maximise the value of assets of the corporate debtor.

The third is to promote entrepreneurship, availability of credit, and balancing of interests.

Keeping this order in mind, when one looks at the IBBI data for the 3,400 cases admitted under the IBC in the last six years, more than 50% of the cases ended in liquidation, and only 14% could find a proper resolution.

Furthermore, the IBC was touted as a time-bound mechanism. Timeliness is key here so that the viability of the business or the value of its assets does not deteriorate further.

The IBC was thus initially given a 180-day deadline to complete the resolution process, with a permitted 90-day extension. It was later amended to make the total timeline for completion 330 days — which is almost a year.

However, in FY22, it took 772 days to resolve cases involving companies that owed more than ₹1,000 crore. The average number of days it took to resolve such cases increased rapidly over the past five years.

Parliamentary Standing Committee on Finance pointed out in 2021, that in the five years of the IBC, creditors on an average had to bear an 80% haircut in more than 70% of the cases.

What are haircuts?

When a bank takes a ‘haircut’, it means it accepts less than what was due in a particular loan account.

For example: If a bank was owed Rs 10,000 by a borrower and it agrees to take back only Rs 8,000, it takes a 20% haircut. Banks do this for accounts where chances of full recovery are bleak. Instead of losing all the money or letting an asset lose value over time, banks sometimes choose to settle for less.

Critics say that with banks agreeing to as much as a 90-95% haircut on a loan amount, India’s bankruptcy laws are proving to be inefficient in terms of loan recovery.

What are experts saying?

In order to address the delays, the Parliamentary Standing Committee suggested that the time taken to admit the insolvency application and transfer control of the company to a resolution process, should not be more than 30 days after filing.

The IBBI has also called for a new yardstick to measure haircuts. It suggested that haircuts not be looked at as the difference between the creditor’s claims and the actual amount realised but as the difference between what the company brings along when it enters IBC and the value realised.

News 5: Parliament Committees and their role in law-making

What are Committees of Parliament, and what do they do?

A Parliamentary Committee is a panel of MPs that is appointed or elected by the House or nominated by the Speaker, and which works under the direction of the Speaker. It presents its report to the House or to the Speaker.

Parliamentary Committees have their origins in the British Parliament.

They draw their authority from Article 105, which deals with the privileges of MPs, and Article 118, which gives Parliament authority to make rules to regulate its procedure and conduct of business.

Legislative business begins when a Bill is introduced in either House of Parliament. But the process of lawmaking is often complex, and Parliament has limited time for detailed discussions.

What are the various Committees of Parliament?

Broadly, Parliamentary Committees can be classified into Financial Committees, Departmentally Related Standing Committees, Other Parliamentary Standing Committees, and Ad hoc Committees.

The Financial Committees include the Estimates Committee, Public Accounts Committee, and the Committee on Public Undertakings. These committees were constituted in 1950.

Seventeen Departmentally Related Standing Committees came into being in 1993, to examine budgetary proposals and crucial government policies. The aim was to increase Parliamentary scrutiny, and to give members more time and a wider role in examining important legislation.

The number of Committees was subsequently increased to 24. Each of these Committees has 31 members — 21 from Lok Sabha and 10 from Rajya Sabha.

Ad hoc Committees are appointed for a specific purpose. They cease to exist after they have completed the task assigned to them and have submitted a report to the House. The principal Ad hoc Committees are the Select and Joint Committees on Bills.

Parliament can also constitute a Joint Parliamentary Committee (JPC) with a special purpose, with members from both Houses, for detailed scrutiny of a subject or Bill.

Also, either of the two Houses can set up a Select Committee with members from that House. JPCs and Select Committees are usually chaired by ruling party MPs and are disbanded after they have submitted their report.

How do discussions/ debates in the Parliamentary Committees differ from those in Parliament?

The time to speak on a Bill is allocated according to the size of the party in the House. MPs often do not get adequate time to put forward their views in Parliament, even if they are experts on the subject.

Committees are small groups with relatively less demands on their time; in these meetings, every MP gets a chance and the time to contribute to the discussion. Parliament has only around 100 sittings a year; Committee meetings are independent of Parliament’s calendar.

Also, because the discussions are confidential and off-camera, party affiliations usually do not come in the way of MPs speaking their minds in ways they are unable to do in Parliament, whose proceedings are telecast live, and members are often constrained to speak to their constituencies.

As a result, many MPs concede that “real discussions” happen inside the Committees — agreeing in principle with the former US President.

Woodrow Wilson who observed that “Congress in session is Congress on public exhibition, whilst Congress in its committee rooms is Congress at work”.

The Committees work closely with multiple Ministries and facilitate inter-ministerial coordination. Bills that are referred to Committees often return to the House with significant value-addition.

How are the Committees constituted, and how are their chairpersons chosen?

There are 16 Departmentally Related Standing Committees for Lok Sabha and eight for Rajya Sabha; however, every Committee has members from both Houses. Lok Sabha and Rajya Sabha panels are headed by members of these respective Houses.

Among the important Lok Sabha panels are: Agriculture; Coal; Defence; External Affairs; Finance; Communications & Information Technology; Labour; Petroleum & Natural Gas; and Railways. The important Rajya Sabha panels include Commerce; Education; Health & Family Welfare; Home Affairs; and Environment.

There are other Standing Committees for each House, such as the Business Advisory Committee and the Privileges Committee. The Presiding Officer of each House nominates members to these panels. A Minister is not eligible for election or nomination to Financial Committees, and certain Departmentally Related Committees.

Presiding Officers use their discretion to refer a matter to a Parliamentary Committee, but this is usually done in consultation with leaders of parties in the House.

The appointment of heads of the Committees is also done in a similar way. By convention, the main Opposition party gets the post of PAC chairman; it is currently with the Congress.

The heads of the panels schedule their meetings. They play a clear role in preparing the agenda and the annual report and can take decisions in the interest of the efficient management of the Committee. The chairperson presides over the meetings and can decide who should be summoned before the panel.

An invitation to appear before a Parliamentary Committee is equivalent to a summons from a court: If one cannot come, he or she has to give reasons, which the panel may or may not accept. However, the chairman should have the support of the majority of the members to summon a witness.

MPs typically have a one-year tenure on Parliamentary Committees. Usually, the composition of a committee remains more or less the same in terms of representation of the various parties.

How important are the recommendations of the Committees?

Reports of Departmentally Related Standing Committees are recommendatory in nature. They are not binding on the government, but they do carry significant weight.

In the past, governments have accepted suggestions given by the Committees and incorporated them into the Bill after it has come back to the House for consideration and passage.

These panels also examine policy issues in their respective Ministries and make suggestions to the government. The government has to report back on whether these recommendations have been accepted.

Based on this, the Committees table Action Taken Reports, detailing the status of the government’s action on each recommendation.

However, suggestions by the Select Committees and JPCs — which have a majority of MPs and heads from the ruling party — are accepted more frequently.

UPSC 2018 Mains

Why do you think the committees are considered to be useful for parliamentary work?  Discuss, in this context, the role or the Estimates Committee.

UPSC 2017 Mains

Discuss the role of Public Accounts Committee in establishing accountability of the government to the people.

News 6: Nobel Prize 2022 for chemistry


The Nobel Prize in Chemistry 2022 has gone to Carolyn R Bertozzi, Morten Meldal and K Barry Sharpless, the latter winning the second Nobel of his career.

The three have been awarded for their work in click chemistry, in which molecules snap together fast and firmly, without the need for a long, complicated process and too many unwanted byproducts. Their work has applications in the field of medical science, including the treatment of cancer.

What is click chemistry?

Story of Ammonia

A big part of what chemists do is making new molecules, which is as much an art as it is science. The standard approach is to mimic nature.

In the early 20th century, finding nitrogen in a form usable by plants, despite it being the most abundant element in the atmosphere, was one of the discoveries scientists were striving hard to achieve.

German chemist, Fritz Haber cracked the code for ammonia, which combined nitrogen and hydrogen that plants could synthesise for nitrogen, and Carl Bosch figured out a way to produce it in massive amounts.

The Haber-Bosch process is still the dominant way of producing cheap fertilizer and is at the heart of industrialised agriculture. However, this process is extremely energy intensive and polluting and the modern-day challenge is to therefore produce so-called ‘green ammonia’.

This principle extends to most synthetic chemicals — where scientists try to create a natural substance, in a way that is different from the usual method which is often circuitous and creates several unwanted toxic by-products.

Shortly after winning his first Nobel Prize in 2001, Sharpless began discussing ways to synthesise chemicals that were efficient and not wasteful.

To be able to create new pharmaceuticals, Sharpless argued, chemists ought to be moving away from trying to make ‘natural’ molecules and creating new ones in simpler ways that did the job.

As an example, he said, it was hard to coax carbon atoms — the building blocks of organic molecules — from different molecules to link to each other. Instead, why not take smaller molecules, which already have a complete carbon frame and link them using bridges of nitrogen atoms or oxygen atoms?

Sure, it wouldn’t be as elegantly constructed as the natural stuff but would be efficient, greener and useful. This Lego-block like approach to making new molecules is the essence of ‘click chemistry.’ The ‘click’ is from an analogy he drew from seatbelts clicking snugly into buckles


Other important news

UN Human Rights Council (UNHRC)

  1. Established: 2006
  2. Headquarters: Geneva, Switzerland
  3. Parent Organization: United Nations General Assembly
  4. The Human Rights Council is an inter-governmental body within the United Nations system responsible for strengthening the promotion and protection of human rights around the globe and for addressing situations of human rights violations and make recommendations on them.
  5. It has the ability to discuss all thematic human rights issues and situations that require its attention throughout the year.
  6. It is made up of 47 United Nations Member States which are elected by the UN General Assembly (UNGA).
  7. Members of the Council serve for a period of three years and are not eligible for immediate re-election after serving two consecutive terms.


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