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Distribution: weekly

  • Climate change causing a shift in Earth’s axis, finds new study

    About the study

    • A study is published in Geophysical Research Letters of the American Geophysical Union (AGU).
    • The study has added yet another impact of climate change on the earth – marked shifts in the axis along which the Earth rotates.
    • It says that due to the significant melting of glaciers because of global temperature rise, our planet’s axis of rotation has been moving more than usual since the 1990s.

    How the earth’s axis shifts

    • The Earth’s axis of rotation is the line along which it spins around itself as it revolves around the Sun.
    • The points on which the axis intersects the planet’s surface are the geographical north and south poles.
    • The location of the poles is not fixed, however, as the axis moves due to changes in how the Earth’s mass is distributed around the planet.
    • Thus, the poles move when the axis moves, and the movement is called “polar motion”.
    • Generally, polar motion is caused by changes in the hydrosphere, atmosphere, oceans, or solid Earth.
    • But now, climate change is adding to the degree with which the poles wander.

    What the study says

    • As per the study, the north pole has shifted in a new eastward direction since the 1990s, because of changes in the hydrosphere (meaning the way in which water is stored on Earth).
    • From 1995 to 2020, the average speed of drift was 17 times faster than from 1981 to 1995.
    • The faster ice melting under global warming was the most likely cause of the directional change of the polar drift in the 1990s, the study says.
    • The other possible causes are terrestrial water storage change in non‐glacial regions due to climate change and unsustainable consumption of groundwater.

  • RBI to strengthen risk-based supervision (RBS) of banks, NBFCs

    About RBS model

    • The RBI uses the Risk-Based Supervision (RBS) model, including both qualitative and quantitative elements, to supervise banks, urban cooperatives banks, non-banking financial companies and all India financial institutions.

    Decision to review the model

    • The Reserve Bank has decided to review and strengthen the Risk-Based Supervision (RBS) of the banking sector with a view to enable financial sector players to address the emerging challenges.
    • The review process will help make the extant RBS model more robust and capable of addressing emerging challenges, while removing inconsistencies if any.
    •  Annual financial inspection of UCBs and NBFCs is largely based on CAMELS model (Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, and Systems & Control).
    • It is intended to review the existing supervisory rating models under CAMELS approach for improved risk capture in a forward-looking manner and for harmonising the supervisory approach across all Supervised Entities.

    Source:

    https://www.financialexpress.com/industry/banking-finance/rbi-to-strengthen-risk-based-supervision-of-banks-nbfcs/2244259/

  • Hottest planet in the known universe discovered

    About the plane

    • TOI-1431b, also known as MASCARA-5b, was found 490 light-years from Earth and could be the hottest planet in the known universe.
    • Researchers at the University of Southern Queensland’s Centre for Astrophysics in Toowoomba led the global team that made the discovery.
    • NASA’s Training Exoplanet Survey Satellite first flagged TOI-1431b as a possible planet in late 2019.
    • Dayside temperature reaches approximately 2700 degrees celcius and nightside temperature approaches approximately 2300 degrees celcius – no life could survive in its atmosphere.
    • This temperature is significantly greater than the melting point of most metals, many of which will turn to liquid at under 2000 degrees celcius.
    • Titanium melts at 1670 degrees, platinum at 1770 degrees, and stainless steel at between 1375 and 1530 degrees.

    Planet with a retrograde orbit

    • These types of planets, known as ultra-hot Jupiters, are rarely discovered but this particular one is even more unusual due to its retrograde orbit.
    • In our Solar System, all the planets orbit in the same direction that the Sun rotates and they’re all along the same plane.
    • This new planet’s orbit is tilted so much that it is actually going in the opposite direction to the rotation of its host star.

  • [pib] Seven Indian Navy Ships Deployed for Op Samudra Setu II

    Operation Samudra Setu II

    • In support of the nation’s fight against Covid-19 and as part of operation ‘Samudra Setu II’,  seven Indian Naval ships have been deployed for shipment of liquid medical oxygen-filled cryogenic containers and associated medical equipment from various countries.
    • Indian Navy also has the surge capability, to deploy more ships when the need arises to further nation’s fight against COVID-19.
    • It is pertinent that the ships are combat ready and capable of meeting any contingency in keeping with the attributes of versatility of sea power.

    Operation Samudra Setu I

    • It may be recalled that Operation Samudra Setu was launched last year by the Navy and around 4000 Indian citizens stranded in neighbouring countries, amidst COVID 19 outbreak, were successfully repatriated back to India.

  • Don’t worry about the deficit

    The devastation caused by the second wave calls for the government to shed its worry over the fiscal deficit. The article deals with this issue.

    Role of fiscal policy to support economy through second wave

    • As India battles to contain the surge in COVID-19 cases, several states have already imposed severe restrictions at the local level.
    • The services sector has been hit the most as a consequence of these lockdowns and it would be difficult for India to deliver on this optimistic growth projection.
    • Against this background, the role fiscal policy can play to support the economy needs consideration.
    • The monetary policy is already accommodative and may not have enough room to further boost the economy.
    • With headline as well as core inflation inching up in recent months, the RBI may not be in a position to further cut the policy rate.
    •  As per the latest Union Budget, the fiscal deficit is estimated to moderate from 9.5 per cent of GDP in FY21 to 6.8 per cent of GDP in FY22.
    • This expected decline in fiscal deficit is not on account of lower fiscal spending but because of expectations of sharper revenue growth.
    • The revenue receipts are estimated to grow by 15 per cent and fiscal spending by 1 per cent this financial year.
    • With the debt to GDP ratio already more than 90 per cent, additional fiscal expansion will not be an easy choice for the government.

    Government need to create fiscal space

    • Extraordinary times call for extraordinary measures and the government will have to find ways to create fiscal space.
    • This has become especially important as the economy is yet to shrug off the impact of the previous lockdown.
    • Under these difficult circumstances, immediate measures must aim at providing the requisite social safety net to the poor and the vulnerable.
    • The central government has already announced it will distribute an additional five kg of grain to the 800 million beneficiaries of the National Food Security Act, which is welcome.
    • However, given the unprecedented uncertainty brought about by this COVID wave, the ration support under the PDS should be raised further.
    • The government should also consider transferring cash to the bank accounts of the poor, just as it did last time.
    • This becomes important as MGNREGA  may not provide the safety cushion that it is indeed to as long as lockdown measures remain in place.
    • The best stimulus perhaps would be to provide free vaccinations to the population as the benefits of faster and wider vaccine coverage more than outweighs its monetary cost.
    •  Immunisation is a public good. As we get over this crisis, the government must increase its outlay on physical and human health infrastructure.

    How to finance additional cost?

    •  Part of this additional cost may be financed by reducing non-essential government expenditures and use it for COVID-related expenditure.
    • The government may need to resort to additional borrowings from the market than budgeted earlier.
    • The RBI may allow inflation above the upper bound of 6 per cent only in the short run.
    • The plausible rise in interest rates may also be crucial to prevent capital outflows, given the global “economic outlook” when the US economy adopts an easy monetary policy combined with a huge fiscal stimulus.

    Conclusion

    The government should not be deterred by a worsening fiscal deficit in the short run as the additional growth that it generates may make debt consolidation easier when things normalise.

  • [pib] DRDO conducts maiden trial of Python-5 Air to Air Missile

    Tejas adds Python-5 in its capacity

    • Tejas, India’s indigenous Light Combat Aircraft, added the 5th generation Python-5 Air-to-Air Missile (AAM) in its air-to-air weapons capability on April 27, 2021.
    • Trials were also aimed to validate enhanced capability of already integrated Derby Beyond Visual Range (BVR) AAM on Tejas.
    • The test firing at Goa completed a series of missile trials to validate its performance under extremely challenging scenarios.
    • The trials met all their planned objectives.
    • The missiles were fired from Tejas aircraft of Aeronautical Development Agency (ADA) flown by Indian Air Force (IAF) Test pilots.
    • The successful conduct was made possible with years of hard work by the team of scientists, engineers and technicians from ADA and HAL-ARDC along with admirable support from CEMILAC, DG-AQA, IAF PMT, NPO (LCA Navy) and INS HANSA.

  • Govt leverage in Covid-19 vaccine pricing

    How government regulate prices of drugs

    • The Supreme Court flagged the issue of differential pricing for vaccines among States and the Centre and directed the central government to clarify it in an affidavit.
    • To ensure accessibility, the pricing of essential drugs is regulated centrally through The Essential Commodities Act, 1955.
    • Under Section 3 of the Act, the government has enacted the Drugs (Prices Control) Order (DPCO).
    • The DPCO lists over 800 drugs as “essential” in its schedule, and has capped their prices.
    • The capping of prices is done based on a formula that is worked out in each case by the National Pharmaceutical Pricing Authority (NPPA), which was set up in 1997.

    So, why the government is not regulating price of vaccines through DPCO

    • This is because the regulation through DPCO is not applicable for patented drugs or fixed-dose combination (FDC) drugs.
    • This is why the price of the antiviral drug remdesivir, which is currently in great demand, is not regulated by the government.
    • To bring vaccines or drugs used in the treatment of Covid-19 such as remdesivir under the DPCO policy, an amendment can be brought.

    What other options government can explore to deal with the vaccine price issue

    1) Patent Act 1970

    • The Patent Act 1970 has two key provisions that could be potentially invoked to regulate the pricing of the vaccine.
    • Section 100 of the Patents Act gives the central government the power to authorise anyone (a pharma company) to use the invention for the “purposes of the government”.
    • It enables the government to license the patents of the vaccine to specific companies to speed up manufacturing and ensure equitable pricing.
    •  Under Section 92 of the Act, which deals with compulsory licensing, the government can, without the permission of the patent holder, license the patent under specific circumstances prescribed in the Act.
    • Section 92 can be invoked in case of circumstances of national emergency or in circumstances of extreme urgency or in case of public non-commercial use.
    • After the government issues a notification under Section 92, pharma companies can approach the government for a licence to start manufacturing by reverse engineering the product.
    • However, in the case of biological vaccines like Covid-19, even though ingredients and processes are well known, it is difficult to duplicate the process from scratch.
    • The process will also entail new clinical trials to establish safety and efficacy, which makes compulsory licensing less attractive.

    2) The Epidemic Diseases Act, 1897

    • Section 2 of this law gives the government “power to take special measures and prescribe regulations as to dangerous epidemic disease”.
    • These broad, undefined powers can be used to take measures to regulate pricing.
    • However, the law lacks the teeth to implement such an important policy framework.
    • Violation of the Act is penalised under Section 188 of the Indian Penal Code, which deals with “disobedience to order duly promulgated by (a) public servant”.

    3) Direct procurement by the Centre

    • Apart from these legislative options, experts suggest that the central government procuring directly from the manufacturers could be the most beneficial route to ensure equitable pricing.
    • As the sole purchaser, it will have greater bargaining power.

  • Major oil and gas producers form Net Zero Producers’ Forum

    About the Net Zero Producers’ forum

    • Five of the world’s major oil and gas producers are working together to ‘develop pragmatic net-zero emission strategies’.
    • Qatar, the US, Saudi Arabia, Canada and Norway, collectively responsible for 40% of global oil and gas production, will come together to form a cooperative forum that will develop pragmatic net zero-emission strategies.
    • Energy producers are faced with unique responsibilities to furnish the world with energy but the climate crisis requires serious leadership and a strong alliance to deliver a path to net-zero.

    Strategies and technologies

    • The Net Zero Producers’ Forum will consider strategies and technologies which include methane abatement, circular carbon economy approach, development and deployment of clean energy and carbon capture and storage technologies, diversification from reliance on hydrocarbon revenues etc.

    Source:

    https://www.energy.gov/articles/joint-statement-establishing-net-zero-producers-forum-between-energy-ministries-canada

  • Making social welfare universal

    The article highlights the need for universal social protection scheme in India and suggests a way to achieve it.

    Need for universal social security

    • The pandemic has revealed that leveraging our existing schemes and providing universal social security is of utmost importance.
    • This will help absorb the impact of external shocks on our vulnerable populations.
    • The country has over 500 direct benefit transfer schemes for which various Central, State, and Line departments are responsible.
    • However, these schemes have not reached those in need.

    Lessons from Poor Law System in Ireland

    • An example of a universal social protection scheme is the Poor Law System in Ireland.
    • In the 19th century, to deal with poverty and famine, Ireland introduced the Poor Law System to provide relief that was financed by local property taxes.
    • These laws were notable for not only providing timely assistance but maintaining the dignity and respectability of the poor while doing so.
    • They were not designed as hand-outs but as necessary responses to a time of economic crisis.
    • Today, the social welfare system in Ireland has evolved into a four-fold apparatus that promises social insurance, social assistance, universal schemes, and extra benefits/supplements.

    Issues with the existing social protection schemes in Inda

    • Existing schemes in India cover a wide variety of social protections.
    • However, they are fractionalised across various departments and sub-schemes.
    • This causes problems beginning with data collection to last-mile delivery.

    How universal system would help

    • Having a universal system would improve the ease of application by consolidating the data of all eligible beneficiaries under one database.
    • It can also reduce exclusion errors.
    • The Pradhan Mantri Garib Kalyan Yojana (PMGKY) is one scheme that can be strengthened into universal social security.
    • It already consolidates the public distribution system (PDS), the provision of gas cylinders, and wages for the MGNREGS.
    • Generally, social assistance schemes are provided on the basis of an assessment of needs.
    • Having a universal scheme would take away this access/exclusion barrier.
    • For example, PDS can be linked to a universal identification card such as the Aadhaar or voter card, in the absence of a ration card.
    • This would allow anyone who is in need of foodgrains to access these schemes.
    • It would be especially useful for migrant populations.
    • Making other schemes/welfare provisions like education, maternity benefits, disability benefits etc. also universal would ensure a better standard of living for the people.
    • To ensure some of these issues are addressed, we need to map the State and Central schemes in a consolidated manner.
    • This is to avoid duplication, inclusion and exclusion errors in welfare delivery.
    • The implementation of any of these ideas is only possible through a focus on data digitisation, data-driven decision-making and collaboration across government departments.

    Consider the question “What are the issues with existing social security schemes in India? What would be the benefits of replacing all these social security schemes with universal social security scheme?”

    Conclusion

    India is one of the largest welfare states in the world and yet, with COVID-19 striking in 2020, the state failed to provide for its most vulnerable citizens. This underlines the need for a universal social protection scheme in India.

  • The Supply Chain Resilience Initiative (SCRI) formally launched

    Tackling the supply chain disruption through SCRI

    • The Supply Chain Resilience Initiative (SCRI) was formally launched on Tuesday by the Trade Ministers of India, Japan and Australia.
    • The three sides agreed that the pandemic revealed supply chain vulnerabilities globally and in the region and noted the importance of risk management and continuity plans in order to avoid supply chain disruptions.
    • Some of the joint measures they are considering include supporting the enhanced utilisation of digital technology and trade and investment diversification, which is seen as being aimed at reducing their reliance on China.

    How China reacted

    • China’s Foreign Ministry on Wednesday described the move as ‘unrealistic’.
    • The formation and development of global industrial and supply chains are determined by market forces and companies choices, it said.
    • It also said that the artificial industrial ‘transfer’ is an unrealistic approach that goes against the economic laws and can neither solve domestic problems nor do anything good to the stability of the global industrial and supply chains, or to the stable recovery of the world economy.