Title: The Russian ride
(PM Modi’s meeting with the Russian President signals a necessary recalibration)
Context:- Prime Minister Narendra Modi visited Sochi to meet Russian President Vladimir Putin for a day-long “informal summit”.
As was his Wuhan meeting with Chinese President Xi Jinping, the Sochi visit was aimed at resetting and rebalancing bilateral ties that have weakened over the past few years.
The special understanding between India and Russia has frayed, with India drifting closer to the U.S. and Russia to China.
Substantively, Mr. Modi’s visit was premised on a number of new realities facing India. First, India’s existing dependence on Russian military hardware, with orders for about $12 billion more in the pipeline, must not be jeopardised at any cost. These have been made more difficult by a new U.S. law (Countering America’s Adversaries Through Sanctions Act) that would hit India’s big-ticket hardware purchases and energy deals from Russia, and Mr. Modi would have wanted to reassure Mr. Putin that India will not bow to such pressure.
Second, Russia’s recent military exercises and helicopter sales to Pakistan as well as its outreach to the Afghan Taliban have been viewed with deep concern by India, which has sought to extract assurances that this would not in any way hurt its national security interests.
Third, the new push to strengthen ties is driven by the global instability that the Donald Trump administration has set off. India appears to have decided it can no longer depend on consistency in the U.S.’s foreign policy.
Informal summits of the kind in Sochi and Wuhan are also useful to break the ice and reset relations when needed. But a comprehensive shift in foreign policy must be accompanied by greater transparency.
Final Words
Without clarity, at a time of global flux India may appear to be attempting to travel in two boats at once.
Title: Seller beware
(The proposed change to the Bankruptcy Code must treat homebuyers a step above lenders)
Context:- The Union Cabinet has cleared an ordinance amending the Insolvency and Bankruptcy Code (IBC), a law which came into force in November 2016 to hasten the process of winding up failed businesses.
The change to the law is expected to help offer better treatment to homebuyers when it comes to recovering their dues from bankrupt companies.
A 14-member panel formed by the Ministry of Corporate Affairs had recommended last month that homebuyers should be treated as financial creditors during the bankruptcy resolution process.
It is yet to be known whether homebuyers will be treated better or worse than banks and other financial lenders under the amended law.
Economically speaking, homebuyers are not creditors but only customers to real estate developers.
Unlike traditional creditors such as banks and institutional investors, they do not offer their money in expectation of excess returns.
Homebuyers simply want the delivery of a good that was promised to them. It is thus unfair to push homebuyers, who did not choose to risk their money on an uncertain venture in the first place, down the pecking order when it comes to sharing the spoils of a bankrupt entity.
Until now, homebuyers have had to knock on the doors of the courts to uphold their rights, while other stakeholders benefited significantly at their cost.
The amendment, if it meets expectations, could also reduce the inconsistencies between the IBC and the Real Estate Regulation Act (RERA).
While RERA was introduced with the goal of protecting the rights of buyers by ensuring the timely and honest delivery of homes, they have had to be content with a relatively low status among the various stakeholders in a bankruptcy proceeding.
In fact, buyers have been treated as unsecured creditors. The removal of this inconsistency can help courts deliver better justice to homebuyers in the future.
Along with RERA, the proposed amendment can go a long way in stopping unscrupulous real estate developers from fleecing homebuyers with promises that they cannot really keep.
Final Words:
While upholding homeowner rights could cause pain to wayward real estate developers and large creditors like banks, it will help in the development of a transparent and more efficient real estate market.
Vocabulary words:
Fray (verb) = Discord, strife (कलह)
Substantively (adv) = In a way that is important and meaningful (काफ़ी)
Premise (verb) = Based on (आधार)
Jeopardise (verb) = Put someone or something into danger (ख़तरे में डालना)
Set off (phrasal verb) = To start a journey
Contemplate (verb) = Think deeply or examine (विचार करना)
Intriguing (adj) = Arousing one's curiosity or interest (दिलचस्प)
Hitherto (adv) = Until now (अब तक)
Travail (verb) = Engage in painful or laborious effort
Unscrupulous (adj) = Having or showing no moral principles (बेशरम)
Fleece (verb) = Obtain a great deal of money from someone
Definition
The Countering America's Adversaries Through Sanctions Act is a United States federal law that imposed sanctions on Iran, North Korea, and Russia.
