Current Affairs – June, 2015

Union Government announces Rs 1500 crore Indian Nuclear Insurance Pool

Union Government has launched an Indian Nuclear Insurance Pool (INIP) of 1,500 crore rupees as per the mandatory provision under the Civil Liability for Nuclear Damage Act (CLND), 2010.

It was announced by Minister of State (MoS) in the Department of Atomic Energy Jitendra Singh in New Delhi.

With this launch, INIP became 27th nuclear insurance pool in the world that manages nuclear liabilities. India also has joined an exclusive list of countries having nuclear pools.

The pool will address third party liability insurance in a bid to offset financial burden of foreign nuclear suppliers under the CLNDA, 2010.

The pool is set up by General Insurance Corporation (GIC) of India and 11 other non-life insurers. They are New India, Oriental Insurance, National Insurance and United India Insurance from the public sector apart from private insurance companies.

Why the INIP is formed?

A clause in the CLND Act empowers the operator the Right to Recourse and allows it to sue the suppliers in case of any accident. This was seen as a major hindrance to the growth of the nuclear industry. These concerns led to the formation of the nuclear insurance pool.

Implications of INIP

  • To deal with management of cover to both operators and suppliers on behalf of all direct insurance companies participating in the pool.
  • INIP will offer policies on the nuclear operators liability insurance policy and a nuclear suppliers’ special contingency (against right to recourse) insurance policy.
  • Address third-party liability insurance and later expand into property and other hot zone i.e. inside reactor areas risk. It should be noted that at present it only covers cold zones (outside reactor areas).
  • Provide the risk transfer mechanism to the operators and suppliers to meet their obligations under the CLND Act.

Recommendations of Bibek Debroy committee on restructuring of Indian Railways

Bibek Debroy Committee on the restructuring of Indian Railways has submitted its final report to the Union Ministry of Railways.

The committee has suggested measures for restructuring the Railway Board and its departments so that policy making is separated from day-to-day operations.

Recommendations of Bibek Debroy committee

  • Establishment of an independent regulator Railway Regulatory Authority of India (RRAI) with a separate budget and to be independent of the Ministry.
  • RRAI will decide on tariffs to revamp the cash-strapped railways.
  • Railway Budget should be phased out with gross budgetary support to Indian Railways.
  • There is need to improve the internal resource generation and explore varied methods of financing but also to improve utilisation of available resources.
  • No privatisation of Indian Railway but allowed participation of private sector in the railway projects.
  • Separation of activities like running of hospitals, schools, real estate development, catering, manufacturing of locomotives, coaches and wagons from the core business of running trains.
  • State governments should be asked to entirely fund the Government Railway Police (GRP).
  • General Managers should have the freedom to choose between private security guards and RPF for security on trains.
  • The recommended changes should be implemented only by Union Railways ministry in the first five years including the resolution of the social cost issue.

Background

  • Union government had constituted the high-level committee in September 2014 to restructure the Railways and suggest ways for resource mobilisation.
  • It was seven-member panel headed by eminent economist and NITI Aayog member Bibek Debroy.
  • The other 6 members are former cabinet secretary K M Chandrasekhar, Gusharan Das, Ravi Narain, Partha Mukhopadhyay, Rajendra Kashyap, Ajay Tyagi and Ajay Narayan Jha.