9 PM Daily Current Affairs Brief – July 18th, 2022

Current Affairs Compilations for UPSC IAS Prelims 2022

Mains Oriented Articles

GS Paper 1

• With India set to become most populous nation, a prosperity lesson

GS Paper 2

• Questions about I2U2
• The Agniveer’s journey
• The monkeypox outbreak is an alert on global health inequities
• Secure Indian interests: Ensure fair play in media
• Preserving democracy in India

GS Paper 3

• The rise in the incidence of digital fraud
• We need an orderly transition from coal to renewables
• Declining wheat inventories: Grain of the matter
• Nationalisation, consolidation and privatisation

Prelims Oriented Articles (Factly)

Mains Oriented Articles

GS Paper 1

With India set to become most populous nation, a prosperity lesson

News: Three years ago, the UN Population Prospects (2019) projected that India will surpass China’s population by 2027. But the latest United Nations report, “Population Prospects” forecasts that India will surpass China’s population by 2023 and also reach 1.5 billion by 2030 and 1.66 billion by 2050.

What are the socio-economic reforms carried out by China?

Economic Reforms

Agriculture: China started its economic reforms in 1978 with a primary focus on agriculture. It broke away from the commune system and liberated agri-markets from myriad controls.

During 1978-84, China’s agri-GDP grew by 7.1% per annum and farmers’ real incomes grew by 14% per annum with the liberalisation of agri-prices. As farmers’ real incomes doubled, poverty fell by half in just six years.

Industries: Enhanced incomes of rural people created a huge demand for industrial products. The aim of China’s manufacturing through Town and Village Enterprises (TVEs) was basically to meet the surging demand from the hinterlands.

One-child policy: China introduced the one-child per family policy in 1980, which lasted till early 2016. This policy led to a rapid increase in per capita incomes. Chinese population growth today is just 0.1 per cent per annum compared to India’s 1.1 per cent per annum.

Socio-Economic benefit: In 1978, when China embarked on its economic reforms, its per capita income was at $156.4 which was way below that of India at $205.7. Today, China is more than six times ahead of India in terms of per capita income – China’s per capita income in 2021 was $12,556, while that of India was $1,933 in 2020.

Why India is lagging behind China in Agriculture?

Over a 40-year period, 1978-2018, China’s agriculture has grown at 4.5% per annum while India’s agri-GDP growth ever since reforms began in 1991 has hovered at around 3% per annum.

Market and price liberalisation in agriculture still remains a major issue. For instance, the government did not promote exports and impose stock limits on traders, and suspend futures markets. All this strangles markets.

All this is reflected in the “implicit taxation” of farmers to favour the vocal lobby of consumers, especially the urban middle class.

How India can control the population, and what are the challenges and impacts?

The only way is through effective education, especially that of the girl child, open discussion and dialogue about family planning methods and conversations about the benefits of small family size in society. But this has the following challenges,

Low education: As per the National Family Health Survey-5 (2019-21), of all the girls and women above the age of 6 years, only 16.6% were educated for 12 years or more.

Poor quality: Several ASER reports point to the poor quality of education in India.

Low-level income trap: The NFHS-5 data shows that more than 35% of our children below the age of five are stunted, which means their earning capacity will remain hampered throughout life. They will remain stuck in a low-level income trap.

With this dismal status of women’s health and education, the future of children in India is itself a challenge.

How India can prosper?

India needs a) A focused and aggressive campaign launched to educate the girl child and provide her with more than 12 years of good quality education, b)  An increase in subsidy for the education of the girl child.

This will significantly boost the labour participation rate of women, which is currently at a meagre 25%, and lead to “double engine” growth.

GS Paper 2

Questions about I2U2

News: Recently, the virtual meeting of the I2U2 leaders took place.

What is the I2U2 Summit?

What are the advantages of the I2U2 summit for India?

1) Helps in broadening and deepening the already cordial political and economic relations with Israel and the UAE, 2) I2U2 will align closely with the Indian broad policy goals in sectors such as health, water, and transportation, 3) Enhance basic physical and social infrastructure. For instance, India collaborated with Israel on drip irrigation projects in Gujarat.

What are the challenges associated with the I2U2 summit for India?

India might face challenges in balancing India’s geopolitical equilibrium. For example, Israel views I2U2 as a step towards augmenting opposition to Iran. The growth of I2U2 might create a potential challenge for India to develop India-Iran relations.

Does I2U2 have a security dimension?

No, the I2U2 has not yet acquired a security dimension. But the US views I2U2 as a complement to its China-centred security initiatives in the Indo-Pacific(Quad). Further, I2U2 is also referred to as a “western Asian Quad.” So, there is a high possibility like Quad, the I2U2 might acquire a security dimension.

Note: Initially the Quad started as a joint response to the devastation in the region caused by the Tsunami in 2004.

What does India need to do?

Given the tensions between India and China, India has to downplay the idea of a West Asian Quad and focus on the collaborations that will enhance the country’s developmental needs.

The Agniveer’s journey

News:

Recently, the government of India introduced a new recruitment scheme for the armed forces, Agnipath.

What are the advantages of the Agnipath scheme?

1) Until now more than half of India’s defence budget is spent on pensions, while just around 5% is earmarked for research and development. This situation will change after the implementation of Agnipath. 2) A significant number of Agniveers will be employed in paramilitary forces, and their service and training will be recognised as a degree.

What are the outcomes of the US’s Tour of Duty scheme?

a) According to the US National Institute for Drug Abuse, almost 20% of the veterans coming out of the US’s tour of duty scheme suffer from homelessness and mental health issues compared to the rest of the population, b) Veterans who are unable to readjust well with civilian life have been involved in violent, organised crime and even terrorist activities. For instance, World War II veterans formed the Hells Angels (an “outlaw” motorcycle club). Similarly, On his return, a decorated pilot in the Vietnam War, has joined the Ku Klux Klan(KKK) and is now one of the leading ideologues for racist organisations.

What are the lessons India needs to learn from the Tour of Duty scheme?

1) The free market may pay lip service to patriotic sentiments, but it does not give salaries or jobs based on them, 2) As a large number of armed forces gig workers come out of their service, the agniveers will need assistance with their social and psychological readjustment, 3) The movie Rambo highlighted the “war vet” genre. I.e., the stories of soldiers who come back to a world that does not, cannot understand them. Hence, India must address such incidents.

Serious consideration and resources must be put in place to help agniveers to readjust. Further, India needs to provide assistance in mental health, community and vocational therapy.

The monkeypox outbreak is an alert on global health inequities

Context: Despite causing deaths and being regularly reported from endemic African countries, Monkeypox got global attention only when high-income countries got affected.

The total number of suspected cases reported by the Democratic Republic of Congo in 2022 alone are manifold more than any other country affected by the ongoing outbreak.

Unfortunately, this phenomenon is not an isolated story of its kind.

Reasons for global outbreak

This is the first time that such a large number of monkeypox cases have been detected in non-endemic countries.

It could partially be attributed to a) decrease in immunity provided by smallpox vaccination, b) increase in RT-PCR testing post Covid pandemic and c) increased global travel.

One of the other possible reasons could be new mutations in the virus, although preliminary supporting data is weak.

What are the global health inequities?

Disproportionate attention to diseases affecting developed countries: There are a number of diseases in low- and middle-income countries that affect a large proportion of their populations, but get disproportionately less attention from the global community.

This is a challenge recognized as the ‘10/90 gap’

– It states that diseases and health problems that constitute roughly 10% of the global disease burden but affect people mostly in rich countries receive 90% of the overall health research attention and funding.

However, health problems that constitute 90% of the world’s burden of disease but affect mainly low- and lower-middle income countries get merely 10% of the attention and funds.

Example: A specific example is a group of about 17 diseases, which include leprosy, Lymphatic filariasis and rabies, collectively called ‘neglected tropical diseases’ or NTDs. These diseases have long been a major health problem in low and low-middle income (LMIC) countries, but have not received sufficient/commensurate attention in health policies and financial allocations for years.

Inequity in the availability of potentially effective therapies and vaccines: A drug used to treat smallpox, Tecovirimat, was approved in the US earlier in 2022 for the treatment of monkeypox. There are three second and third generation smallpox vaccines, a few of which have been approved for use against monkeypox, including most recently MVA-BN, approved in 2019.

– However, the US and some countries in Europe have almost exclusive access to Tecovirimat and smallpox vaccines, while these are hardly available in the endemic countries in Africa.

Way forward

World

Outbreaks and epidemics are going to be the unfortunate reality of the future. The only way to respond is with more, better and stronger global collaboration.

India

Improving disease detection and surveillance capabilities is of utmost importance. This includes ramping up RT-PCR testing capacity and making testing more accessible.

An important part in this is educating healthcare workers vis-à-vis monkeypox symptoms, testing and treatment.

Using ring vaccination: In this, the vaccine is given to contacts of all suspected or confirmed cases. Smallpox vaccines can be used like this until monkeypox vaccines are readily available for all. Smallpox vaccines are highly effective in prevention and if given early even in treatment of monkeypox disease.

Utilise India’s large vaccine-manufacturing base for making smallpox and monkeypox vaccines available for all.

Public health emergencies can be better tackled with appropriate communication messages. Implementing effective risk communication messages should be made a priority, starting with informing the citizens about how the virus spreads and what they can do to protect themselves.

Secure Indian interests: Ensure fair play in media

News: Recently, the union minister of state for Information Technology indicated to enact a legislation which would make it mandatory for the Big Tech like Google, Meta, Microsoft, Apple, Twitter and Amazon to pay a slice of revenue to Indian news- papers and websites, for using their original content.

What are the reasons which have compelled the government to move towards this direction?

In Europe, the EU’s copyright rules 2019 mandates Big Tech like Google News to share part of their revenues with the publishers. This has pushed Germany, Spain, and France to institutes legal regime to make it mandatory for the platform to share revenue with the news publishers.

In addition, to the European Countries, Australia had also passed a law to assure its local media a fairer share.

Other reasons

In the information age, the valuable resources are required to create Intellectual properties and such a creation should entail fair rewards.

The market has been distorted due to power asymmetry. Indian news publishers work is routinely used by Big Tech firms for their own business ends and it involves unfair split-up of returns.

There is global demand for efforts in order to restrain the clout of outsized online news dispensers.

The Big Tech majors exercise their market power on digital advertising. This places Indian media companies at a position of disadvantage. Therefore, there is a demand for digital governance as well as a framework which can help Indian news generators to undo such a distortion.

The media constitutes an important institution that upholds core Indian values and supports national sovereignty.

Way Forward

Last year, the Indian Newspaper Society (INS) and the Digital News Publishers Association (DNPA) took Google to regulators on allegation that it has been abusing its dominant position in laying out terms for news aggregation.

The regulator is already doing a probe in this case. The findings of the case could help in building a robust legal framework.

Preserving democracy in India

News: In recent period, the government of Madhya Pradesh, Karnataka and Maharashtra toppled. Further, there were selective arrests of Opposition leaders. This indicates serious issues in the functioning of the Indian democracy

Basic Concept of a democracy

A democratic executive must satisfy two conditions – (1) It must be a stable executive and (2) it must be a responsible executive.

It is not possible to ensure a stable executive and a responsible executive in equal degree in a particular system. Therefore, the constitutional makers have to adopt either of the two features. Former is ensured in the Presidential System and later is ensured in the Parliamentary system. For Example:

(a) England Case: executives are subjected to daily assessment by members of Parliament, through questions, resolutions, no-confidence motions, adjournment motions and debates on addresses and they are also subjected to Periodic assessment by the electorate at the time of the election.

(b) The US Executive: Daily assessment is not available under the American system. There is only periodic assessment.

Therefore, the constituent assembly India adopted the parliamentary system because the fathers of the Indian constitution preferred “more responsibility to more stability as per the Indian need.

What are the problems being faced by Indian democracy?

(1) India has preferred responsible executives to stable executives. However, there are attempts to weaken the opposition in India. which is not in the interest of parliamentary democracy. A vigilant opposition is important for daily assessment of the executive, ensuring a vibrant democracy as well as the very survival of the democracy.

(2) The Anti-defection law has failed to serve its purpose. It was inserted in the 10th Schedule through the 52nd Connotational Amendment Act. Further, the Supreme Court upheld its constitutional validity long ago.

There are cases when a party member shows disloyalty to his party through violation of the whip. They simultaneously decline to resign from his/her seat and to fight an immediate by-election.

Others Issues

In the recent past, the draconian provisions of various legislations, especially the Prevention of Money Laundering Act, have been invoked by the ruling regime against Opposition members.

Way Forward

Political parties, the judiciary and civil society must take steps to ensure that democracy does not fail.

Some political thinkers’ advocates for the ‘theory of recall,’ so that a member whose personal behaviour falls below standards expected of his constituents goes back and seeks the approval of the voters.

Role of Judiciary

The judiciary must be aware of the ground realities and not allow such politically motivated investigations. Judges should readily grant anticipatory bail or regular bail in politically motivated matters.

The Supreme Court can re-write the anti-defection law by invoking powers under Article 142 of the Constitution.

Political Parties

In a democratic set up, criticism from the opposition parties must be tolerated because it is the essence of democracy.

During the Constituent Assembly debates, Ram Narayan Singh said, “A government which does not like opposition and always wants to be in power is not a patriotic but a traitor government.”

At the same time, while Opposition must be credible and strong. It must work constructively. It can make itself credible and strong by feeling the pulse of the people of India and reforming itself.

GS Paper 3

The rise in the incidence of digital fraud

Context: Over the years, there has been a significant change in the types of frauds affecting the banking industry.

Moreover, the economic slowdown has only heightened the risk of fraud and money laundering for the banks.

Why managing financial fraud is significant?

Managing fraud has become more important for banks, due to a) increased regulatory scrutiny, b) increased stakeholder expectations and c) the detrimental effect of the actual fraud loss incurred.

Change in the nature of frauds

There is an increase in digital or technology-related frauds, such as ATM skimming, mobile/internet banking, and identity/data theft, in addition to cyber risks faced by banks.

Why cybercrime needs to be tackled effectively by banks?

Cybercrime and tech-related frauds cause a) reputational damage, b) diminished customer and investor confidence, and c) theft/loss of personally identifiable information. Together, these add up to substantial risks for financial services companies.

These issues ultimately have the potential to affect the financial ecosystem and, in extreme cases, may lead to a systemic crisis.

What are the measures that banks should initiate?

Banks should consider investing in technology to evolve their fraud risk management frameworks (FRM) to tackle newer and more complex challenges.

Banks and financial institutions (FIs) should consider the following proactive steps:

– Banks need to integrate a larger financial crime compliance agenda that will work across the business, compliance, legal, credit, and operations departments.

– Institutions need to take the time to measure the effectiveness, appropriateness, and efficiency of existing controls against an updated risk assessment.

– The current methods of FRM are plagued with a lack of centralised control/monitoring from various systems, and issues related to data availability and quality. This results in increased frauds and delayed detection.

– In light of impending risks from digital platforms, banks should consider building cyber-risk management programmes to achieve three essential capabilities: the ability to be secure, vigilant, and resilient.

Way forward

Risks are inherent in the banking business. However, with frauds on the rise, organisations need to put their business in order by having effective control mechanisms in place.

We need an orderly transition from coal to renewables

News: Since the onset of the pandemic and over the past few months, after the Ukraine-Russia war, commodity prices, especially that of energy, have surged worldwide, which has raised concerns over energy security.

Steps taken to measure inflation in the coal sector in India

Introduction of the national coal index (NCI) as the wholesale price index (WPI) for coal has no component of imported coal.

The NCT reflects international coal prices. It provides a benchmark for revenue-sharing contracts being executed after the auctions for commercial mining of coal.

Status of inflation in the coal sector

For the last six months, the WPI for Coal has been stable at around 131. Over the same period, the NCI has jumped from about 165 to about 238 reflecting the sharp increase in international coal prices.

Measures to address inflation in the coal sector in India.

The domestic coal industry has responded with an increase of over 30% in coal production from April to June to reduce the exposure of the domestic economy to the price volatility of international markets.

The government has permitted commercial mining and allowed the private sector to produce more coal.

What are the measures needed to make the above-mentioned steps more effective?

First, The Ministry of Power needs to finalize its draft National Electricity Policy 2021 as the policy is poised to articulate the importance of domestic coal-based generation in the country.

Second, the financial community has to be sensitised to the need of increasing domestic coal production to meet the growing energy demand. The industry and financial community should adopt a more holistic approach toward environmental, social, and governance (ESG) criteria.

Third, the regulator should address the issues arising from a greater role of the private sector in coal production. There should be a single point of contact for the industry in the form of a dedicated regulator. It would help the new private commercial miners to overcome problems that could arise in due course.

Fourth, in addition to increasing domestic production of coal, there is a requirement to ensure diversification of the production base and improvement in the quality of the coal produced in India.

Fifth, there is a need for reforms in various cross subsidies which cause undue financial burden on the coal sector.

Way Forward

Although coal is a major cause in GHG emissions. But it is unavoidable for India’s energy security in the near future. Therefore, there is a need to adopt processes for orderly transition from coal to 500 GW of renewables.

However, high prices of coal and coal-based generation may encourage import of coal and it will expose us to international energy prices fluctuation. Therefore, there should be increased focus on domestic production of coal.

Declining wheat inventories: Grain of the matter

News: There has been a sharp decline in the government’s wheat inventories to 28.5 million tonnes this year. This is the lowest since 2008.

Reasons for sharp decline of inventories

About 1.8mn tonnes of wheat was sent to about a dozen countries, including Bangladesh and Afghanistan, even after the imposition of the ban on wheat exports.

Why should the declining inventories be not a matter of concern?

The inventory is still about a million tonnes higher than the stocks needed to be held as buffer and strategic reserves for food security purposes.

Besides, there is no dearth of wheat in the market despite record exports and liberal shipments to other countries on humanitarian grounds.

The prices of wheat in the open market, too, have remained fairly stable. It is another indication of the comfortable supply position.

What are the reasons for the depletion of wheat holdings?

The intense heat in March 2022 caused the grains to shrivel and ripen prematurely without attaining full mass. Therefore, there was a fall in crop output. For example, Wheat output, anticipated originally to be over 109 million tonnes, fell to 106.4 million tonnes.

The government’s procurement of wheat dipped by a huge 60% due to lower market arrivals. It happened because private traders, and notably exporters, purchased wheat at rates higher than the minimum support prices (MSPs).

Why is the reduction in the government’s grain stockholding a welcome development?

From the economic standpoint, this would help bring down the cost the Food Corporation of India (FCI) incurs on holding surplus food stocks.

Way Forward

Instead of wheat, the government can help the countries facing acute food insecurity through rice export.

(1) The government can prune the inventories of rice, which, at present, are estimated at more than double the requirement of the public distribution system (PDS) and food-based welfare programmes. The government can sell stock of rice in the domestic market. The private traders can export.

(2) The World Trade Organization (WTO) rules disallows exports from the public food stocks. Therefore, India can plea to WTO to waive this restriction in view of the current global food crisis.

The cropping patterns should be diversified from the paddy crop to other crops, especially oilseeds, for which the country is still heavily dependent on imports.

Some states, including Punjab and Haryana, have already begun offering cash incentives to farmers to replace paddy with other crops. There is scope for similar moves in many other states as well.

Nationalisation, consolidation and privatisation

News: Recently, the privatisation of the public sector banks (PSBs) and insurance companies was discussed by the Finance Minister of India.

History of Nationalization in India

First round: In 1969, there were 73 commercial banks. But the Government of India nationalized a set of fourteen private banks in India.

Second round of nationalisation: It was executed in 1980 when six more banks were nationalized.

Now there are 78 PSBs, excluding small finance banks and payments banks as well as regional rural banks and local area banks.

The Privatization Plan

Ahead of the privatisation plan, the government consolidated PSBs drive to make the banks bigger and stronger. Following this, the number of PSBs has shrunk from 27 in 2017 to 12 at present.

First, the government committed itself to privatise IDBI Bank. Therefore, the privatisation of the IDBI Bank Ltd. is under process. For example, Life Insurance Corporation of India (LIC) acquired 51% in IDBI Bank. LIC has committed to infuse capital for five years, if required, and dilute its stake to 40% within 12 years etc.

In the Union Budget 2021-22, an announcement was made for privatization of 2 among 12 public sector banks (PSBs).

The government has amended the Banks Nationalisation Act to pave the path for privatisation of the PSBs. It mandates the government to bring down its stake just below 51% of the overall shareholding.

What are the reasons for privatization?

The Prime Minister has said that the government’s job is to care for the poor, ensure food, toilets, houses, and supply of clean drinking water. The government has “no business to be in business”.

What are the issues in the privatization of the PSBs?

Traditionally, the government has been divesting its stake in public sector undertakings to make money but the logic behind privatisation of banks is to stop using public money as a lifeline. However, since 1994, the government has pumped in close to Rs 4.5 trillion in these banks as capital.

The Nationalisation Act confers sweeping controlling powers to the government, which are not available to any other major shareholders.

– It can issue directions to the nationalised banks in the public interest. Technically, it needs to be done after consulting with the Reserve Bank of India but the Department of Financial Services, a finance ministry arm, does this often without keeping the banking regulator in the loop.

– The government has the power to appoint whole-time directors including managing director (MD), non-executive chairman and other members in the board of directors of the PSBs.

The government can supersede the board and even sanction making of regulations

The government has the power to liquidate any bank; and also, its nod is necessary for merger between two public sector banks.

In sum, the government enjoys more powers than a majority stakeholder in the Public Sector Banks. The government acts as the superboard as it possesses both ownership and regulatory powers.

Way Forward

The government needs to make more changes to excite investors about the PSBs as merely bringing down the government stake below 51% may not find any taker for the PSBs.

The government must bring down its holding to at least 26% because any serious investor will be willing to look at PSBs when it will have a say in the affairs of the bank with higher voting rights.

Finally, the government should increase the tenure of the CEOs and EDs beyond 60 years and provide market-linked compensation. For example, in private banks, the CEO’s age has been capped at 70 years. The P J Nayak Committee (2014) has also made similar recommendations.

Prelims Oriented Articles (Factly)

Kilo class submarine INS Sindhudhvaj decommissioned

Source: The post is based on the article “Kilo class submarine INS Sindhudhvaj decommissioned” published in The Hindu on 18th July 2022.

What is the News?

Indian Navy has decommissioned INS Sindhudhvaj from service. 

What is INS Sindhudhvaj?

INS Sindhudhvaj was commissioned into the Indian Navy in June 1987.

It was one of the 10 Kilo-class submarines India acquired from Russia between 1986 and 2000. 

Note: Of these 10 kilo class submarines, INS Sindhurakshak was lost in an accident in Mumbai harbour in 2013 while Sindhuvir was transferred to Myanmar in 2020.

Achievements: INS Sindhudhvaj had many firsts to her credit including operationalisation of the indigenised sonar USHUS, indigenised satellite communication systems Rukmani and MSS and indigenised torpedo fire control system.

– It had also successfully undertaken mating and personnel transfer with Deep Submergence Rescue Vessel.

– It was also the only submarine to be awarded the Chief of Naval Staff(CNS) rolling trophy for Innovation by the Prime Minister.

How many submarines does India have currently?

India is currently left with 15 conventional diesel-electric submarines.

This includes seven Russian Kilo-class submarines, four German HDW submarines, four French Scorpene submarines and the indigenous nuclear ballistic missile submarine INS Arihant. 

The last two of the Scorpene class submarines are in various stages of trials and outfitting.

What relaxed ECB norms mean for companies?

Source: The post is based on the article “What relaxed ECB norms mean for companies?” published in Livemint on 18th July 2022.

What is the News?

The Reserve Bank of India has relaxed norms for companies raising external commercial borrowings (ECBs) as part of a set of measures to stem the slide in the rupee.

What are External Commercial Borrowings(ECBs)?

E​​CBs are commercial loans that eligible resident entities can raise from outside India, i.e. from a recognized non-resident entity. 

ECBs can be buyer’s credit, supplier’s credit, foreign currency convertible bonds, foreign currency exchangeable bonds, and loans among others.

ECBs can be raised via the automatic route where cases are examined by Authorized Category Dealer or the approval route where borrowers are mandated to forward their request to RBI through their authorized dealers.

Borrowers must follow norms on minimum maturity period, maximum all-in-cost ceiling, end-uses etc.

What is the relaxation offered by the RBI for ECBs? 

RBI has increased the quantum of funds that Indian firms could raise through external commercial borrowings.

It has been announced that till December 31, 2022, companies availing of the automatic ECB route could raise up to $1.5 billion as against $750 million earlier

The objective of this relaxation was to increase the supply of foreign exchange reserves and thereby prevent the fast depreciation of the rupee witnessed over the last few months.

Why do Indian firms go for ECBs? 

Firstly, ECBs give companies the benefit of borrowing abroad at lower interest rates.

Secondly, they are an avenue to borrow a large volume of funds for a relatively long period of time.

Thirdly, borrowing in foreign currencies enables companies to pay for their machinery imports etc thereby nullifying the impact of varying exchange rates. 

Fourthly, ECBs can help diversify the investor base and funds available at lower cost, helping improve the profitability of companies.

Fifthly, ECB interest rates are also a function of their ratings in the international market.

What are the risks involved for firms raising ECBs?

Though companies get attracted to ECBs due to lower interest rates, the comfort level of the borrower depends on how stable the rate of exchange is between the borrowing and debt servicing times. 

Depreciation of the rupee will raise the debt servicing burden as compared to what has been worked out at the time of availing of the ECB facility. Thus, the companies might need to incur hedging costs to cover for the exchange rate risk.

Why is Kerala protesting Supreme Court’s ESZ notification

Source: The post is based on the article “Why is Kerala protesting the Supreme Court’s ESZ notification” published in The Hindu on 15th July 2022.

What is the News?

Kerala State Assembly has passed a resolution urging the Central government to exclude the State’s human habitations, farmlands and public institutions from the purview of the Ecologically Sensitive Zones(ESZ) recently notified by the Supreme Court to be set up around all protected forests in the country.

The Kerala Assembly has also called upon the Centre to notify the zones by considering the state government’s proposals that marked the ESZ as zero around 10 protected areas of the State.

What is the Supreme Court order on ESZ?

The SC in its order has said national parks, wildlife sanctuaries and such protected forests must have an ESZ of a minimum 1 km from their boundaries.

Click Here to read more about the order

Why is Kerala worried about this SC order?

Kerala is worried about the possible impact of the SCs order on its unique landscape as nearly 30% of Kerala is forested land and the Western Ghats occupies 48% of the State. 

Moreover, there is a network of lakes and canals and wetlands and a 590-kilometres-long coastline which are all governed by a series of environmental conservation and protection legislations.

This leaves little space for its 3.5 crore population with an average population density of 900 persons per square km (much higher than the national average).

What were the State’s earlier efforts to draft ESZ notification?

Earlier, while preparing the draft ESZ notifications for its protected areas, the State Government had taken care to exclude the areas with high population density, government and quasi-government institutions and public institutions from the ambit of the notification.

However, the apex court’s recent order has forced the State government to re-look at the ESZs of at least 10 protected areas which were earlier marked as zero.

What has been the people’s reaction to this SC order?

The Supreme court order comes a decade after Western Ghats Ecology Expert Panel (WGEEP) report, aka the Gadgil report. Against this report, widespread protests happened across the state.

Similarly, this order is being opposed by groups on the ground that the order will upset the lives of thousands of settler farmers and people living on the forest fringes.

They apprehend that the order will effectively turn four lakh acres around the 23 wildlife sanctuaries in the State into buffer zones thus hitting around 1.5 lakh families.

What has Kerala decided to do now?

The Kerala government has decided to approach the Central Empowered Committee, as directed by the SC in its order in order to persuade the forum of the importance of maintaining zero ESZ in human habitation areas.

It may also petition the SC to be exempted from the one-km ESZ regime and to limit it to zero wherever possible.

For new projects, NHAI back to build-operate-transfer model

Source: The post is based on the article “For new projects, NHAI back to build-operate-transfer model” published in Indian Express on 15th July 2022.

What is the News?

National Highway Authority of India(NHAI) plans to offer at least two highway up-gradation projects to private players using the Build-Operate-Transfer(BOT) model under Public-Private Partnership during the third quarter of 2022.

What is the Build-Operate-Transfer(BOT) Model?

A build-operate-transfer (BOT) contract is a model used to finance large projects, typically infrastructure projects developed through Public-Private Partnerships(PPP). 

Under BOT, an entity—usually a government—grants a concession to a private company to finance, build and operate a project. 

The company operates the project for a period of time (perhaps 20 or 30 years) with the goal of recouping its investment and then transferring control of the project to the government.

How is the NHAI planning to implement the BOT Model?

The government has decided to assess the revenue potential of a project every five years during the concession period as against every 10 years earlier. 

This would mean that the concession period (or period till which road developers can collect toll) is extended early in the tenure of the contract, ensuring the surety of revenue for the private company.

What are the other Important PPP Models?

Engineering, Procurement, and Construction(EPC) Model

Under this model, the cost is completely borne by the government. Government invites bids for engineering knowledge from private players. Procurement of raw materials and construction costs are met by the government. 

The private sector’s participation is minimum and is limited to the provision of engineering expertise. A difficulty of the model is the high financial burden on the government.

Hybrid Annuity Model(HAM)

HAM is a mix of the EPC (engineering, procurement and construction) and BOT (build, operate, transfer) models.

Under the HAM model, 40% of the project cost is paid by the government as construction support to the private developer, and the remaining 60% is to be arranged by the developer.

Centre amends the Legal Metrology (Packaged Commodities) Rules 2011 for ease of doing business and reducing the compliance burden for the electronic industries

Source: The post is based on the article “Centre amends the Legal Metrology (Packaged Commodities) Rules 2011 for ease of doing business and reducing the compliance burden for the electronic industries” published in PIB on 17th July 2022.

What is the News?

The Department of Consumer Affairs has released the Legal Metrology (Packaged Commodities), (Second Amendment) Rules 2022.

What is Legal Metrology (Packaged Commodities), (Second Amendment) Rules 2022?

It amends the Legal Metrology (Packaged Commodities) Rules,2011.

This amendment allows electronic products to declare certain mandatory declarations through the QR Code for a period of one year, if not declared in the package itself.

It allows important declarations to be declared effective on the label in the package while the other descriptive information can be conveyed to the Consumer through the QR Code.

The information that can be declared on the QR code includes the address of the manufacturer or packer or importer, the common or generic name of the commodity, the size and dimension of the commodity and customer care details except for the telephone number & email address.

Note: Earlier, all the prepackaged commodities including the electronic products are required to declare all the mandatory declarations as per the Legal Metrology (Packaged Commodities), Rules 2011 on the package.

Snakebites in India: Be specially chary of green pit vipers

Source: The post is based on the article “Be specially chary of green pit vipers” published in The Hindu on 17th July 2022.

What is the News?

According to a study, the antivenom available in India cannot counter the venom of the green pit viper.

Note: Green pit viper is behind most snakebite cases in the northeast.

Data on snakebites

According to available data, over 1.4 million cases of snake bites are reported worldwide resulting in 1,25,000 fatalities annually.

Over 46,000 people die due to snakebites every year in India which is the highest on earth. Out of which, 77% of the victims died outside healthcare facilities.

Most of snakebites are reported in India between June and September. About 58% of the victims are said to be farmers and labourers.

How is antivenom derived in India?

The antivenom is derived from the “Big Four” snakes in India namely Russell’s viper, Common Krait, Indian Cobra and Saw-scaled viper.

However, 80% of all polyvalent antivenom derived in India comes from snakes caught in one district of Tamil Nadu which fails to address the diversity of venoms across the species.

For instance, the venom from monocled cobra from West Bengal contains mostly neurotoxins while the same species from Arunachal Pradesh had cytotoxins in its venom.

Note: Neurotoxin is a poison that acts on the nervous system. Cytotoxins kill the cells in a body.

What does the study say on Green Pit Viper?

Green pit viper is not more lethal than Russell’s viper, but the hemotoxic venom it injects prevents the blood in the body from clotting resulting in internal bleeding.

Moreover, the antivenom available in India cannot counter the venom of the green pit viper.

Suggestions: Experts have ​​called for developing a range of antivenoms that can do what the Big four-snake concoction cannot.  

Department of Consumer Affairs launches ‘Jagriti’, a mascot to empower consumers and generate awareness towards consumer rights

Source: The post is based on the article “Department of Consumer Affairs launches ‘Jagriti’, a mascot to empower consumers and generate awareness towards consumer rights” published in PIB on 15th July 2022

What is the News?

The Department of Consumer Affairs(DoCA) has launched “Jagriti”.

What is Jagriti?

Jagriti is a mascot for empowering consumers and generating awareness of their rights. It will be projected as an empowered consumer who is spreading awareness about consumer rights & addressing solutions to the problems faced by the consumers.

Aim: To strengthen its consumer awareness campaign presence in digital and multimedia and reinforce a young empowered and informed consumer as a top-of-mind consumer rights awareness recall brand.

Themes: The Jagriti mascot will be used to generate consumer awareness about various themes of the Department like provisions of the Consumer Protection Act 2019, Hallmarking, National Consumer Helpline toll-free number 1915, and provisions of the weights & measures Act among others.

Tagline: Jagriti mascot shall be shown along with tagline “Jago Grahak Jago” in all its media campaigns.

Ministry of Home Affairs has been ranked at 1 under the Central Ministries Portal in a National e-Governance Service Delivery Assessment

Source: The post is based on the article “Ministry of Home Affairs has been ranked at 1 under the Central Ministries Portal in a National e-Governance Service Delivery Assessment” published in PIB on 15th July 2022

What is the News?

The Ministry of Home Affairs has been ranked first under the Central Ministries Portal in a National e-Governance Service Delivery Assessment.

What is the National e-Governance Service Delivery Assessment?

Conducted by: Department of Administrative Reforms and Public Grievances (DARPG) in association with its knowledge partners: NASSCOM and KPMG.

Purpose: It is a periodic assessment intended to improve the effectiveness of States/Union Territories and the Central Government in the delivery of their online services to citizens.

Parameters: There were four main parameters of assessment: 1) Accessibility, 2) Content Availability, 3) Ease of Use and Information Security and 4) Privacy for Central Ministry Portals.

Note: An additional three parameters were also used for the Central Ministry Services Portals – End Service Delivery, Integrated Service Delivery and Status and Request Tracking.

Categories: All Government portals that were evaluated were divided into two main categories- 1) States/Union Territories/Central Ministry portal and 2) State/Union Territory/ Central Ministry Services Portals.

What are the key findings?

The Ministry of Home Affairs(MHA) has bagged the first spot under the Central ministries portal.

The Digital Police portal of the National Crime Records Bureau(NCRB) has been placed at number two in the assessment.

Remittances from Gulf countries dropped sharply in FY21 due to Covid: RBI

Source: The post is based on the article “Remittances from Gulf countries dropped sharply in FY21 due to Covid: RBI” published in Business Standard on 17th July 2022.

What is the News?

According to an RBI article, the share of inward remittances from Gulf nations dipped sharply during 2020-21 on account of the economic stress created by the COVID-19 pandemic.

What are the key takeaways from the article?

Share of Remittances from Gulf Countries Declining: The share of India’s inward remittances from Gulf countries has likely declined from more than 50% in 2016-17 to about 30% in 2020-21.

– This decline in remittances from the Gulf countries reflects a slower pace of migration and a larger presence of the Indian diaspora in informal sectors which were hit the most during the pandemic period. 

Advanced economies as a source of Remittance: During this period, advanced economies like the US, the UK and Singapore emerged as important sources for the country for remittances. These countries account for 36% of the total payments in 2020-21.

Major Remittance source country for India: Remittances from the US have surpassed that of the UAE, with the US accounting for 23% of total remittances in 2020-21. Remittances from the UAE now account for 17-18% of India’s total inward remittances.

Financial Distress among remitters: The signs of financial distress among remitters were evident in the increase in smaller denominated transactions (less than $200) in 2020-21.

– The increase in small-size transactions may be due to the reduced sending capacity of the overseas emitters. On the other hand, it might also be indicative of more frequent financial support required by their low-income beneficiaries during the pandemic period.

State-wise Remittance Share: Maharashtra has emerged as the top recipient state surpassing Kerala. Maharashtra now accounts for almost 35% of the total remittances in 2020-21.

– The share of the traditional remittance recipient states of Kerala, Tamil Nadu and Karnataka, has almost halved in 2020-21. These states had strong dominance in the Gulf countries.

Reasons for this compositional shift in remittances: The article highlights the following factors responsible for the compositional shift in inward remittances: 1) Host country dynamics, 2) reducing wage differentials, 3) changing occupational patterns in these states with increasing white-collar migrant workers to GCC region and 4) entry of low-wage semi-skilled workers from other states and Asian countries.