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  • NBFC sector resilient under scale-based regulations framework: RBI bulletin

    Why in the News?

    During the transition to the Scale-Based Regulation (SBR) framework, the NBFC sector experienced double-digit credit growth, maintained adequate capital levels, and saw a reduction in delinquency ratios.

    What is Scale-Based Regulation (SBR)?

    • The SBR framework was first outlined in October 2021 and became effective on October 1, 2022.
    • It aims to categorize NBFCs based on their size, activities, and perceived riskiness rather than merely distinguishing between systemically important and non-systemically important entities.

    What are the key points presented by RBI on the resilience of the NBFC sector?

    • Improvement in Asset Quality: Since the introduction of the Scale-Based Regulation (SBR) framework in October 2022, the asset quality of NBFCs has improved, with lower gross non-performing asset (GNPA) ratios.
      • By December 2023, GNPA ratios had decreased to 2.4% for government-owned NBFCs and 6.3% for non-government NBFCs, reflecting enhanced risk management.
    • Double-Digit Credit Growth: The NBFC sector maintained strong credit growth throughout 2023, driven by a diversified funding base, including retail credit (gold loans, vehicle loans, and housing loans) and expanding into industrial and service sectors.
    • Improved Profitability: The sector witnessed a rise in profitability, as evidenced by better returns on assets (RoA) and equity (RoE).
    • Net NPA (NNPA) Performance: Upper layer NBFCs had lower GNPA ratios than middle layer NBFCs, but the latter maintained sufficient provisions for riskier portfolios, ensuring that their NNPA ratios were also controlled.
    • Compliance with SBR: Major NBFCs in the “Upper Layer” identified by the RBI under the SBR framework, such as LIC Housing Finance, Bajaj Finance, and L&T Finance, have complied or initiated steps to comply with listing requirements.

    Regulatory measures  taken up by the NBFC sector 

    • Scale-Based Regulation (SBR) Framework: Introduced in October 2022, the SBR framework categorizes NBFCs into different layers based on their size, systemic importance, and risk profile. For instance, strengthen asset quality, capital requirements, and risk management.
    • Prompt Corrective Action (PCA) Norms: Effective from October 2024, PCA norms will apply to government-owned NBFCs. These measures aim to enhance financial discipline, focusing on capital adequacy and asset quality.
    • Diversification of Funding Sources: Due to rising risk weights on bank lending, NBFCs have diversified their funding base by reducing dependence on bank borrowings and expanding into secured retail credit.
    • Listing Compliance: Many NBFCs in the upper layer have complied or are in the process of complying with listing requirements as part of regulatory mandates.

    What are the emerging risks that NBFCs need to cater? (Way forward) 

    • Cybersecurity Risks: With the increasing use of digital platforms, NBFCs need to enhance cybersecurity measures to safeguard against evolving cyber threats.
    • Climate Risk: The financial impact of climate change poses a new risk. NBFCs must integrate climate-related risks into their risk management frameworks to mitigate potential disruptions.
    • Financial Assurance Functions: The RBI emphasizes that assurance functions like risk management, compliance, and internal audit are critical in maintaining resilience in the face of rapid changes in the financial landscape.
    • Evolving Regulatory Environment: As the financial sector continues to evolve, NBFCs must stay ahead of regulatory changes and ensure that their risk management practices are aligned with emerging threats and new regulations.

  • How Starlink satellites are ‘blinding’ astronomers?

    Why in the News?

    Starlink satellites, operated by Elon Musk’s SpaceX, are causing issues for astronomers by disrupting both optical and radio astronomy due to unintended electromagnetic radiation (UEMR).

    What is a Starlink Satellite?

    • Starlink satellites are part of a network created by Elon Musk’s SpaceX to provide high-speed internet to remote areas around the world.
    • The network, known as a satellite constellation, currently includes more than 6,300 satellites orbiting Earth at around 550 km altitude.
    • These satellites aim to offer internet connectivity to places that would otherwise lack access, especially in rural or underserved regions.

    Why Radio Astronomy matters?

    • Radio astronomy is a branch of astronomy that studies celestial objects using radio frequencies instead of visible light.
    • Radio telescopes detect radio waves, which are longer than light waves, emitted by objects in space such as stars, galaxies, and even black holes.
    • Radio astronomy is important because it helps scientists study the universe beyond what can be seen with optical telescopes.
    • Radio noise from sources like satellites can interfere with these observations, making it difficult for astronomers to collect data, similar to how bright lights can obscure faint stars.

    What Starlink does to Space Communications?

    • Starlink satellites are designed to improve global internet access, especially in hard-to-reach places, by transmitting signals from space.
    • However, these satellites also emit unintended electromagnetic radiation (UEMR), which causes radio noise that disrupts radio astronomy observations.
    • The situation may worsen as more satellites are launched — some estimates suggest 100,000 satellites could be orbiting Earth by 2030.
    • There are currently no regulations controlling how much radio pollution these satellites can emit, making it harder for astronomers to mitigate the impact on their work.

    PYQ:

    [2011] A layer in the Earth s atmosphere called Ionosphere facilitates radio communication. Why?

    1. The presence of ozone causes the reflection of radio waves to Earth.

    2. Radio waves have a very long wavelength.

    Which of the statements given above is/are correct?

    (a) 1 Only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

  • Massive Greenland Landslide

    Why in the News?

    • In September 2023, seismic stations across the world detected an unusual signal which persisted for 9 days.
      • It was caused by a massive landslide in Greenland’s Dickson Fjord (i.e narrow sea inlet with steep sides or cliffs, created by a glacier).

    About the Massive Greenland Landslide

    • The landslide involved a colossal volume of 25 million cubic metres of rock and ice, equivalent to filling 10,000 Olympic-sized swimming pools.
    • The landslide involved 25 million cubic meters of rock and ice, which is enough to fill 10,000 Olympic-sized swimming pools.
    • This event caused a mega-tsunami with waves as high as 200 meters, which significantly impacted the area.
    • The seismic waves created by the landslide lasted for 9 consecutive days.
    • The loss of such a large amount of glacier ice highlights how global warming is speeding up damage to these fragile environments.

    Causes of the Greenland Landslide

    • The main reason for the landslide was global warming, which caused the glaciers in Greenland to melt and shrink over recent decades.
      • The Hvide Stovhorn peak glacier had been holding up the mountain slopes, but as it thinned, the rock above it became unstable and eventually collapsed.
    • The permafrost (frozen ground) on the mountain’s steep slopes started melting because of rising temperatures, making the slopes unstable.
    • When the rocks and ice fell into the fjord, it triggered a submarine landslide (a landslide under water), which made the event even bigger and caused a mega-tsunami.

    Back2Basics: Seismic Waves

    Type  Sub-Type Wave Characteristics Speed Medium of Travel Movement Impact
    Body Waves P-Waves (Primary Waves) • Longitudinal/compressional waves.
    • Fastest seismic waves.    		 Fastest (First to arrive) Solids and liquids Particles move back and forth in the direction of wave travel. First waves to be detected during an earthquake, cause less damage.
    S-Waves (Secondary Waves) • Transverse/shear waves.
    • Slower than P-waves.    		 Slower than P-Waves Solids only Particles move perpendicular to the wave’s direction. Follow P-waves, more ground shaking, cause more damage than P-waves.
    Surface Waves Love Waves • Transverse horizontal motion.
    • Faster than Rayleigh waves.    		 Slower than S-Waves Earth’s surface Particles move side to side, horizontally. Cause significant structural damage.
    Rayleigh Waves • Rolling motion.
    • Slowest seismic waves.    		 Slowest of all seismic waves Earth’s surface Particles move in an elliptical motion (both vertical and horizontal). Cause vertical and horizontal ground movement, highly destructive.

     

    PYQ:

    [2021] Describe the various causes and the effects of landslides. Mention the important components of the National Landslide Risk Management Strategy.

  • Assam records 86% drop in Rhino Poaching since 2016

    Why in the News?

    Kaziranga National Park and other protected habitats of the one-horned rhinoceros in Assam have witnessed an 86% drop in poaching since 2016.

    Reduction in Rhino Poaching

    • From 2000 to 2021, poachers killed 190 rhinos in Assam, with a significant drop occurring after 2016.
    • The announcement was made in a statement marking the celebration of World Rhino Day (22nd September).

    About Project Rhino:

    Details
    Launch Year 2005 (Indian Rhino Vision, 2020)
    Objective To achieve a wild population of at least 3,000 Greater One-Horned Rhinos spread over seven protected areas in Assam by 2020.
    Habitat Terai floodplains of India and Nepal; currently found in Assam, West Bengal, and Uttar Pradesh.
    Partners • Assam Forest Department
    • Bodoland Territorial Council
    • World Wide Fund for Nature (WWF)
    • International Rhino Foundation (IRF)
    • US Fish & Wildlife Service
    Key Actions • Translocation of rhinos from Kaziranga and Pobitora to other protected areas (like Manas National Park) to reduce overcrowding.
    • Improving protection and security against poaching.
    Population Growth • From 2008 to 2012, 18 rhinos were translocated to Manas National Park.
    • By 2020, 14 calves were born in Manas after translocation.
    Conservation Status • IUCN Status: Vulnerable
    • CITES: Appendix I
    • Wildlife Protection Act, 1972: Schedule I
    Significance
    • Project has helped distribute the rhino population across multiple protected areas, making them less vulnerable to poaching and ensuring a stable and sustainable population.
    • The population has increased from around 200 in the 1990s to approximately 2,900 today.

     

    PYQ:

    [2019] Consider the following statements:

    1. Asiatic lion is naturally found in India only.
    2. Double-humped camel is naturally found in India only.
    3. One-horned rhinoceros is naturally found in India only.

    Which of the statements given above is/are correct?

    (a) 1 only
    (b) 2 only
    (c) 1 and 3 only
    (d) 1, 2 and 3

  • Global Cybersecurity Index, 2024

    Why in the News?

    • India has achieved Tier 1 status in the Global Cybersecurity Index (GCI) 2024, published by the International Telecommunication Union (ITU).
      • With a score of 98.49 out of 100, India is now among the top nations demonstrating role-model cybersecurity practices.

    About Global Cybersecurity Index (GCI):

    Details
    Launch  2015, by the International Telecommunication Union (ITU)

    About ITU

    • Founded on 17 May 1865 as the International Telegraph Union
    • Presently has 193 member states, with South Sudan joining most recently in 2011
    • India became a member in 1869
    Objective • Measures the commitment of countries to cybersecurity based on five pillars.
    • Helps identify areas for improvement and encourages capacity and capability building.
    Five Pillars • Legal: Laws and regulations on cybercrime and cybersecurity
    • Technical: Implementation of technical capabilities via national and sector-specific agencies
    • Organizational: National strategies and organizations implementing cybersecurity
    • Capacity Development: Awareness, training, education, and incentives for cybersecurity
    • Cooperation: Partnerships between agencies, firms, and countries
    Strengths and Weaknesses • Most countries are strongest in the Legal pillar.
    • The Capacity Development and Technical pillars are where most countries are weakest.
    GCI 2024 Five-Tier Analysis • Tier 1 (Role-modelling): Score of 95-100
    • Tier 2 (Advancing): Score of 85-95
    • Tier 3 (Establishing): Score of 55-85
    • Tier 4 (Evolving):

     

    PYQ:

    [2020] In India, under cyber insurance for individuals, which of the following benefits are generally covered, in addition to payment for the loss of funds and other benefits?

    1. Cost of restoration of the computer system in case of malware disrupting access to one’s computer

    2. Cost of a new computer if some miscreant willfully damages it, if proved so.

    3. Cost of hiring a specialized consultant to minimize the loss in case of cyber extortion

    4. Cost of defence in the Court of Law if any third-party files a suit

    Select the correct answer using the code given below:

    (a) 1, 2 and 4 only

    (b) 1, 3 and 4 only

    (c) 2 and 4 only

    (d) 1, 2, 3, and 4

  • [pib] Swachh Sagar, Surakshit Sagar 3.0

    Why in the News?

    The Ministry of Earth Sciences (MoES) successfully concluded the Swachh Sagar, Surakshit Sagar 3.0 campaign on September 21st, 2024, organizing beach clean-up drives at more than 80 locations across India’s coastline.

    What is Swachh Sagar, Surakshit Sagar 3.0?

    • It is a 75-day citizen-led campaign for improving ocean health through collective action.
    • It is the third edition of a flagship initiative launched to raise awareness about marine pollution and promote the conservation of coastal areas.
    • The campaign is part of India’s broader Swachh Bharat Mission and Swachhata Hi Seva initiative and aims to promote cleanliness, sustainable practices, and protect marine ecosystems.
    • It also commemorated International Coastal Cleanup Day.

    Key Highlights 

    • More than 60 tons of waste were removed, including plastic, metal, cloth, rubber, and wood debris.
    • The campaign promoted sustainable coastal practices and encourages communities to adopt eco-friendly habits, playing a vital role in reducing marine debris and conserving biodiversity.

  • Methicillin-Resistant Staphylococcus aureus (MRSA)

    Why in the News?

    In 2019, MRSA caused over 100,000 deaths, and although vancomycin has been the main treatment for 40 years, a new study shows it may not stay effective for long.

    About Vancomycin

    • Vancomycin is an antibiotic that has been a cornerstone in the treatment of methicillin-resistant Staphylococcus aureus (MRSA) infections for over 40 years.
    • It is a glycopeptide antibiotic that works by inhibiting the synthesis of bacterial cell walls, making it particularly effective against gram-positive bacteria like MRSA.
    • It has remained effective against MRSA due to its ability to target bacteria that have become resistant to other antibiotics like methicillin.
    • For decades, vancomycin has been the first-line treatment for severe MRSA infections, such as those affecting the bloodstream, heart, bones, and lungs.

    How Vancomycin is losing its effectiveness against MRSA?

    MRSA rarely develops resistance to vancomycin, but when it does, it leads to the emergence of vancomycin-resistant Staphylococcus aureus (VRSA).

    • Resistance Mechanism: When S. aureus acquires the vanA operon, a gene cluster responsible for vancomycin resistance, it can resist the antibiotic. However, this resistance usually comes with a fitness cost—the bacteria tend to grow slower, making them less virulent.
    • Fitness Compensation: Recent research shows that S. aureus can evolve to overcome this fitness cost, allowing VRSA to grow faster and remain resistant even in the absence of vancomycin. This adaptation means the bacteria are less likely to lose their resistance and can spread more easily.
    • Mutations: The study found that additional mutations in the VRSA strains exposed to vancomycin helped the bacteria adapt and maintain resistance. These mutations made the bacteria more fit, ensuring they could thrive even in the presence of vancomycin.
    • Diminishing Options: As VRSA continues to adapt, vancomycin may no longer be reliable for treating MRSA infections. This raises concerns about the long-term viability of the antibiotic, prompting the need for new treatment strategies.

    PYQ:

    [2014] Can overuse and free availability of antibiotics without Doctor’s prescription, be contributors to the emergence of drug-resistant diseases in India? What are the available mechanisms for monitoring and control? Critically discuss the various issues involved.

  • Wide-ranging reforms undertaken in food-processing sector in last 10 years

    Why in the News?

    Prime Minister Narendra Modi stated on Thursday that over the past decade, India has implemented “comprehensive” reforms to revolutionize the food-processing sector.

    What are the steps taken by Govt in food processing industry in India?

    • Priority Sector Lending: In April 2015, food and agro-based processing units were included as agricultural activities under the Priority Sector Lending norms, facilitating easier access to credit for these businesses.
    • FDI Policies: The government allows 100% Foreign Direct Investment (FDI) under the automatic route for the food processing sector, encouraging foreign investment and technological transfer.
    • Special Food Processing Fund: A fund of ₹2,000 crore was established with NABARD to support food processing projects and infrastructure development.
    • Regulatory Reforms: The Food Safety and Standards Authority of India (FSSAI) shifted from product-by-product approvals to an ingredient-based approval process in 2016, simplifying compliance for businesses.
    • Infrastructure Development: Initiatives such as the Pradhan Mantri Kisan Sampada Yojana (PMKSY) aim to create a robust infrastructure for food processing through cold storage facilities, processing units, and logistics support.

    Status of food processing industries in India

    • Economic Contribution: The sector accounts for approximately 13% of India’s total exports and 6% of industrial investment. It is expected to generate around 9 million jobs by 2024.
    • Growth Rate: The industry has been growing at an average annual rate of about 11.18% over recent years, indicating significant potential for expansion.
    • Market Share: Despite being one of the largest producers of agricultural commodities, India’s food processing sector represents only about 10% of total food production.

    What are the still challenges present in food processing industry in India? 

    • Inadequate Infrastructure: A lack of cold storage and transportation facilities leads to over 30% post-harvest losses.
    • Fragmented Supply Chains: The supply chain is highly fragmented, causing inefficiencies and increased costs due to poor connectivity and coordination among stakeholders.
    • Regulatory Complexities: The industry is burdened by a complex web of regulations that can hinder business operations and compliance efforts.
    • Lack of Skilled Labor: There is a significant shortage of skilled professionals in areas such as food technology and quality control, which hampers innovation and adherence to safety standards.
    • Limited Technology Adoption: Many processors still rely on outdated technologies, which affects productivity and product quality. High costs and lack of technical expertise further inhibit technological advancements.

    What should be done by Govt to resolve these challenges? (Way forward)

    • Infrastructure Investment: Increase investments in cold chain logistics and transportation infrastructure to minimize post-harvest losses and improve supply chain efficiency.
    • Financial Support Mechanisms: Facilitate easier access to finance through specialized loans for small and medium enterprises (SMEs) in the food processing sector.
    • Skill Development Programs: Enhance vocational training initiatives focused on food technology and safety management.
    • Regulatory Simplification: Streamline existing regulations to reduce bureaucratic hurdles. A unified regulatory framework could help clarify compliance requirements and foster a more conducive environment for business operations.
    • Promote R&D Investment: Encourage investment in research and development to foster innovation within the sector.

    Mains PYQ:

    Q Elaborate the policy taken by the Government of India to meet the challenges of the food processing sector. (UPSC IAS/2019)

  • Cabinet approves continuation of PM-AASHA to provide better prices to farmers

    Why in the News?

    The government has approved the extension of the PM-AASHA scheme, allocating ₹35,000 crore, to ensure farmers receive better prices for their produce and to regulate price fluctuations of essential commodities for consumers.

    What is PM-AASHA?

    Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) is an umbrella scheme launched by the Government of India in September 2018, aimed at ensuring remunerative prices for farmers’ produce. It integrates various existing schemes to provide a comprehensive approach to price support, including:

    • Price Support Scheme (PSS): Physical procurement of specific crops by central agencies.
    • Price Deficiency Payment Scheme (PDPS): Direct payments to farmers for the difference between the Minimum Support Price (MSP) and market prices.
    • Pilot of Private Procurement & Stockist Scheme (PPPS): Involvement of private players in crop procurement.

    The scheme has been extended until 2025-26 with a financial outlay of ₹35,000 crore to enhance its effectiveness and reach.

    What are the implications of PM-AASHA?

    • Income Security: By ensuring MSP, PM-AASHA aims to stabilize farmers’ incomes and protect them from price fluctuations in the market.
    • Increased Production: The assurance of remunerative prices is expected to encourage farmers to increase production, particularly in pulses and oilseeds, which have historically been underproduced.
    • Market Stability: The scheme helps regulate prices of essential commodities, making them affordable for consumers while ensuring fair compensation for producers.
    • Strengthened Procurement Mechanism: The integration of various schemes under PM-AASHA enhances the overall procurement process, making it more efficient and transparent.

    What are the issues related to MSP?

    • Limited Coverage: MSP is primarily applicable to a few crops like wheat and rice, leaving many farmers without guaranteed prices for their produce.
    • Inefficient Procurement Infrastructure: The existing infrastructure for procurement is inadequate, leading to delays and inefficiencies that affect farmers’ ability to sell their produce at MSP.
    • Lack of Awareness: Many farmers are unaware of their rights regarding MSP or how to access these benefits effectively.
    • Regional Disparities: There are significant regional disparities in the implementation of MSP. States like Punjab and Haryana benefit more from MSP due to better procurement systems, while farmers in other states may struggle to access these benefits.
    • Market Distortions: The MSP system leads to market distortions, encouraging overproduction of certain crops while neglecting others.

    What should be done to resolve the issues related to MSP?

    • Expand MSP Coverage: The government should consider extending MSP to a wider range of crops, particularly those that are crucial for food security and farmer livelihoods.
    • Enhance Procurement Infrastructure: Investments should be made in developing better procurement facilities, including storage and transportation systems, especially in rural areas.
    • Increase Awareness Campaigns: Implementing educational programs for farmers about their rights regarding MSP and how they can benefit from it would empower them significantly.

    Mains PYQ:

    Q What do you mean by Minimum Support Price (MSP)? How will MSP rescue the farmers from the low income trap?  (UPSC IAS/2016)

  • Adjusted Gross Revenue (AGR)

    Why in the News?

    The Supreme Court has dismissed the curative petitions filed by major telecom service providers, seeking relief from the 2019 judgment regarding Adjusted Gross Revenue (AGR) dues.

    What is Adjusted Gross Revenue (AGR)?

    • AGR is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
    • It forms the basis for calculating telecom companies’ dues to the government, including the license fee and spectrum usage charges (SUC).
    • The AGR is divided into:
    1. Spectrum Usage Charges (SUC): These are pegged at 3-5% of AGR, depending on the telecom company’s spectrum holdings.
    2. License Fees: Telecom operators are required to pay 8% of their AGR as a license fee to the government.

    Contention over AGR Calculation

    • The DoT maintains that AGR should include all revenues earned by telecom companies, including non-telecom sources such as deposit interest, asset sales, and dividends.
    • Telecom operators, on the other hand, insist that AGR should only include revenues generated from core telecom services, excluding income from non-telecom sources like interest and capital gains.

    Legal Disputes on AGR

    1. Beginning of the Dispute (2005): The AGR saga began in 2005 when the Cellular Operators Association of India (COAI) challenged the government’s definition of AGR in court. The dispute centered on whether non-telecom revenue should be included in the AGR calculation.
    2. TDSAT Ruling (2015): In 2015, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) ruled in favor of telecom companies. TDSAT held that AGR should include only revenue from core telecom activities and exclude non-core sources such as rent, profit from the sale of assets, dividends, and interest income.
    3. Supreme Court Ruling (2019): Setting aside the TDSAT decision, the SC upheld the DoT’s definition of AGR on October 24, 2019, declaring that AGR must include all revenue sources, including non-telecom activities like interest and capital gains. This ruling significantly increased the financial liabilities of telecom companies, as they had to pay outstanding dues.

    Financial Impact of the AGR Ruling

    The Supreme Court ruling had serious financial implications for telecom companies:

    • Massive Liabilities: Telecom companies, especially Vodafone Idea and Bharti Airtel, faced huge financial liabilities. The ruling resulted in unpaid dues amounting to over ₹1.4 lakh crore, which included penalties and interest.
    • Vodafone Idea’s Crisis: Vodafone Idea, in particular, was hit hard by these liabilities and faced potential insolvency, with its future in the Indian telecom sector hanging in the balance.
    • Sector Consolidation: The financial pressure from the AGR liabilities led to the consolidation of the telecom sector, with smaller players exiting the market.

    PYQ:

    [2019] In India, which of the following review the Independent regulators in sectors like telecommunications, insurance, electricity, etc.?

    1. Ad Hoc Committees set up by the Parliament
    2. Parliamentary Department Related Standing Committees
    3. Finance Commission
    4. Financial Sector Legislative Reforms Commission
    5. NITI Aayog

    Select the correct answer using the code given below:

    (a) 1 and 2

    (b) 1, 3 and 4

    (c) 3, 4 and 5

    (d) 2 and 5