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‘’Paper 4-GS-III, Topic: Investment models & government budgeting – Cabinet to consider proposal for outright sale of Air India

Options on table include 100% sell-off and stake sale of 74% or 51%

    What is important to know:

  • The Union Cabinet will soon decide the fate of the state owned carrier Air India by deliberating on three options to divest the government’s majority stake and consider the creation of a special purpose vehicle (SPV) to get rid of a major portion of its more than ₹50,000-crore debt.
  • The three options on the table are a full 100% sell-off, a 74% stake sale or retaining a 49% share in the airline, as per the note prepared by the Department of Investment and Public Asset Management (DIPAM) for the Cabinet’s consideration, officials aware of the development said.

      Special purpose:

  • The Cabinet will also consider a proposal to clear up Air India’s liabilities by forming a Special Purpose Vehicle (SPV), which will house a portion of its non-aircraft debt along with its subsidiaries and real estate assets. “A major portion of the working capital loan, subsidiaries and prime properties owned by Air India is proposed to be housed in an SPV,” the official said.

   Total debt:

  • According to the plan, of the airline’s over ₹30,000 crore total working capital loan, ₹25,000 crore will be earmarked for the SPV. Air India has a total debt of around ₹52,000 crore which comprises of ₹22,000 crore as aircraft loan and the remaining as working capital loan. Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG advised that the Centre should lease Air India’s assets to an SPV “while keeping the assets and liabilities in the books of the Air India; 74-100% equity of the SPV can be sold to the highest bidder from the private sector.”

   Alternate structure:

  • An alternate structure wherein an SPV takes over the liabilities, subsidiaries and real estate assets of Air India is also possible. Air India has four whollyowned subsidiaries which include its MRO unit Air India Engineering Services Ltd (AIESL), ground handling arm Air India Transport Services Ltd, Airline Allied Services Ltd which operates Alliance Air, and Air India Charters Limited which operates Air India Express. The Hotel Corporation of India (which owns Centaur Hotels) is another subsidiary while it has a joint venture AISATS.

   Source: World United

‘’Paper 4-GS-III, Topic: Pollution & degradation & environmental impact assessment – Motorisation costs to soar in 3 years, says study

Larger workforce expected to settle in cities, people will travel longer distances to work; fuel expenses to rise by 34-36%

    What you need to know:

  • Owning a vehicle in India in 2020 could cost up to 28% more than what it used to in 2012, according to a recently published paper, “Indian auto-mobility 2020: A perceptive picture,” which also predicts a 34% to 36% increase in fuel costs in the next three years.
  • The recently published study, by researchers of the Indian Institute of Science, Bengaluru, the Indian Institute of Management, Lucknow, and Bangalore, and the Central Road Research Institute, New Delhi, used the ‘Delphi technique’ to which experts from leading institutions in India, industry and government, lent their inputs.

   Diverse group:

  • The group consisted of 17 members from different parts of India, with a cumulative 230 years of experience in areas such as transportation engineering, urban transportation planning, statistical analysis, safety analysis, air pollution studies and high speed rail.
  • The paper showed that big Indian cities such as Mumbai and Bengaluru would have greater passenger kilometre travelled/capita (PKT/c) with a larger workforce expected to settle in cities, and commuters having to travel longer distances to reach their places of work.
  • However, the expert group said fuel costs would be a hindrance to the PKT/c growth, as the cost of one litre petrol in India is 37% of the average daily income, which is way higher than the 2% in the U.S., Germany and Japan.
  • As for cars, the number of registered cars per 1,000 population in India (16) is much lower than that of developed countries like the U.S. (423), Germany (517) and Japan (453).
  • However, land use, along with work force participation and agestructure of the population, is perceived to increase motorisation in 2020.

    Source: The Hindu

  

‘’Paper 3-GS-II, Topic: Issues & awareness relating to health sector – Good news on the Zika front

People with a history of dengue infection may not necessarily be at a greater risk of Zika infection

    Brief:

  • Dengue has four virus types (serotypes) that show distinct variation within themselves. While infection by one serotype results in a lifelong immunity against it, infection by a different one results in an increased infectivity and more severe clinical manifestations.
  • This kind of aggravation is called antibody dependent enhancement (ADE). However, in the case of the Zika virus, people infected with any of the four dengue serotypes are said to be at an increased risk of infectivity and clinical manifestations due to ADE.
  • Two studies published recently have shown that this is not true. The first one, published in Nature Communications, found an enhancement of Zika when tests were carried out on cells taken from four rhesus macaques with dengue immunity.
  • However, when the tests were carried out directly on the macaques, they produced completely different results. Compared with macaques that were not already infected with dengue, the four did not either show any increase in the amount of Zika virus. Neither did the disease worsen in them.

   Increased immunity:

  • On the contrary, their previous exposure led to a reduction in the amount of Zika virus and faster clearance. There were changes in the immune system’s response but that did not lead to an increased infectivity.
  • Results from our work may suggest that pregnant women with previous exposure to dengue virus may have limited Zika viremia [amount of virus] and less tendency to have invasion of the central nervous system,” the authors conclude.
  • Results of another study carried out among Zika-infected patients with pre-existing dengue infection also did not show increased infectivity or an enhanced severity of Zika.
  • The results, published in the journal Clinical Infectious Diseases, were based on 65 patients with acute febrile illness (45 patients positive for Zika and 20 patients positive for dengue type-2) between January and June 2016.
  • The researchers found no difference in Zika viral load between those with previous dengue infection and those without it. All Zika-infected patients recovered after receiving recommended supportive therapy.

    Source: News United