Feb 29, 2016: India’s National Solar Mission and WTO ruling, Bank Board Bureau, Basel-III

Feb 29, 2016: India’s National Solar Mission and WTO ruling, Bank Board Bureau, Basel-III

General Studies: Daily Capsule

Curtain Raiser –News Update (Feb 29, 2016)

India’s National Solar Mission and WTO ruling:

Complaint by the United States	On 6 February 2013, the United States requested consultations with India concerning certain measures of India relating to domestic content requirements under the Jawaharlal Nehru National Solar Mission (“NSM”) for solar cells and solar modules.
As per the US, measures of India are inconsistent as per	Article III:4 of the GATT 1994;   Article 2.1 of the TRIMs Agreement; and   Articles 3.1(b), 3.2, 5(c), 6.3(a) and (c), and 25 of the SCM Agreement.
Findings of Panel established by Dispute Settlement Body (DSB) of the WTO	·         The Panel found that the DCR measures are trade-related investment measures ·          The Panel found that this suffices to establish that they are inconsistent with both Article III:4 of the GATT 1994 and Article 2.1 of the TRIMs Agreement.

Source: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds456_e.htm

Some Quotes on WTO ruling to illustrate the impact and to give a feel of the subject:

Vinay Rustagi, managing director of Bridge to India	·         "It is a blow for domestic solar manufacturers because the DCR was a safety net for them," ·           "But DCR could never have been a long-term, sustainable policy. Many fundamental reforms are needed to make local industry competitive in the long run."  Read more at: http://economictimes.indiatimes.com/news/economy/policy/solar-mission-india-to-appeal-against-wto-ruling/articleshow/51147890.cms
http://www.huffingtonpost.com/entry/the-wto-just-ruled-agains_b_9307884.html?section=india (The WTO Just Ruled Against India's Booming Solar Program)	·         Bringing this case is a perverse move for the United States ·          Nearly half of U.S. states have renewable energy programs that, like India's solar program, include "buy-local" rules that create local, green jobs and bring new solar entrepreneurs to the economy ·          The U.S. government should drop this case to avoid undermining jobs and climate protections not just in India, but also at home.

Bank Board Bureau:

Chairman Bank Board Bureau	Vinod Rai (former Comptroller and Auditor-General of India (CAG); can a CAG hold a government office post-retirement?)
Mandate of Bank Board Bureau	·         The Bureau will recommend for selection of heads - Public Sector Banks and Financial Institutions ·          and help Banks in developing strategies and capital raising plans
Composition of BBB	·         three ex-officio members ·          and three expert members ·          in addition to Chairman
	All the Members and Chairman will be part time
	start functioning from 1st April, 2016

Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=136968

And also: Centre’s nod for Bank Board Bureau, Feb 29, 2016, The Hindu

Basel –III:

Basel III (or the Third Basel Accord) is a global, voluntary regulatory framework on bank capital adequacy, stress testing, andmarket liquidity risk. It was agreed upon by the members of the Basel Committee on Banking Supervision in 2010–11.

Basel III is intended to strengthen bank capital requirements by increasing bank liquidity and decreasing bank leverage.

The non-performing assets of public sector banks are estimated at almost Rs. 4 lakh crore, and they need to raise capital of Rs. 2.4 lakh crore by 2018 to conform to Basel-III capital requirement norms, according to the government.

New Accounting System:

Currently used accounting system	Cash Accounting (recognizes a transaction only when money changes hand)
Recommended Accounting System by the Fourteenth Finance Commission	Accrual System (recognizes the transaction at the time it is made; provides more current snapshot)

Source: Be cautious on new accounting system:CGA, by TCA Sharad Raghavan, Feb 29, 2016,

 The Hindu