The National Bank for Agriculture and Rural Development (NABARD) revealed its ‘Climate Strategy 2030’ document, aiming to address India’s need for enhanced green financing.
Key Pillars of Climate Strategy 2030:
The strategy focuses on four key pillars:
Accelerating green lending across sectors,
Playing a broader market-making role,
Internal green transformation, and
Strategic resource mobilization.
Green Financing Scenario in India
Despite India’s requirement of $170 billionannually for achieving sustainable development goals by 2030, the current green finance inflows remain critically insufficient.
As of 2019-20, India secured only about $49 billion in green financing, with a significant portion allocated to mitigation efforts, leaving minimal funds for adaptation and resilience.
About NABARD:
It was established on July 12, 1982, based on the recommendation of the Sivaraman Committee to promote sustainable rural development and agricultural growth in India.
Aim: To facilitate credit flow for the promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts, and other rural crafts.
It operates as a statutory body under the Reserve Bank of India (RBI) Act, 1934, with its headquarters located in Mumbai.
It is governed by a Board of Directors appointed by the GoI:
Representatives from the RBI;
Central and state governments;
Experts from various fields related to Rural Development and Finance.
Functions of NABARD:
Refinance Support: NABARD provides refinance facilities to banks and financial institutions for agricultural and rural development activities, including crop loans and rural infrastructure projects.
Financial Inclusion: It promotes financial inclusion by expanding banking services in rural areas, supporting SHGs, FPOs, and MFIs, and facilitating access to credit for rural communities.
Priority Sector Lending: NABARD plays a crucial role in channelling credit to priority sectors such as agriculture, small-scale industries, and rural infrastructure, in alignment with the Reserve Bank of India’s priority sector lending guidelines.
Direct Lending: It extends direct loans to institutions for specific rural development projects, such as agricultural production, rural infrastructure development, and agri-processing units.
Scheme Implementation: The organization administers government schemes and funds like Rural Infrastructure Development Fund (RIDF), Watershed Development Fund (WDF) to finance rural infrastructure projects and watershed development activities.
Credit Planning: NABARD collaborates with central and state governments, RBI, and other stakeholders to formulate credit policies and plans for agriculture and rural sectors.
Research and Training: NABARD promotes research and development in agriculture, supports capacity building and training programs for rural stakeholders, and facilitates technology transfer initiatives.
PYQ:
[2013] Which of the following grants/grants direct credit assistance to rural households?
Regional Rural Banks
National Bank for Agriculture and Rural Development
Land Development Banks
Select the correct answer using the codes given below:
After the launch of the Nilgiri Tahr Conservation Project, the Tamil Nadu government gears up to assess the population of Nilgiri Tahr (state animal).
The Forest Departments of Tamil Nadu and Kerala will collaborate in a synchronized way.
Nilgiri Tahr Conservation Project (2022 to 2027):
Under The Nilgiri Tahr project, the Tamil Nadu government plans to develop a better understanding of the Nilgiri Tahr population through-
Surveys and radio telemetry studies;
Reintroduce the Tahrs to their historical habitat;
Address proximate threats; and
Increase public awareness of the species.
October 7 will be celebrated as ‘Niligiri Tahr Day’ in honour of E.R.C. Davidar, who was responsible for pioneering one of the first studies of the species in 1975.
Historic significance of Nilgiri Tahr:
Evidence in Tamil Sangam literature dating back to 2,000 years.
The late Mesolithic (10,000-4,000 BC) paintings highlight the significance of the Tahr in folklore, culture, and life.
About Nilgiri Tahr
It is endemic to the Nilgiri Hills and the southern portion of the Western Ghats in the states of Tamil Nadu and Kerala in Southern India.
It is the state animal of Tamil Nadu.
The Nilgiri tahr inhabits the open montane grassland habitat of the South Western Ghats montane rain forests eco-region.
At elevations from 1,200 to 2,600 metres (3,900 to 8,500 ft), the forests open into grasslands interspersed with pockets of stunted forests, locally known as sholas.
It is estimated that there are 3,122 Nilgiri Tahrs in the wild. It has become locally extinct in around 14% of its traditional shola forest-grassland habitat.
Conservation Status:
IUCN Conservation Status: Endangered
Wildlife (Protection) Act of India, 1972: Schedule I
Eravikulam National Park in Anamalai hills of Kerala is home to the largest population of this Tahr.
October 7 is celebrated as ‘Nilgiri Tahr Day’ to honour E.R.C. Davidar, the man who was responsible for conducting first studies of the species in 1975.
On April 3, Taiwan was struck by an earthquake of 7.4 magnitude. This was strongest in last 25 years.
Reason behind the earthquake in Taiwan
In the Taiwan region, the Philippine Sea plate is moving northwest towards the Eurasian plate at a velocity of about 7.8 cm per year, which is faster than the motion of the Indian plate.
Lying 160 km off the coast of China, Taiwan was formed at a convergent boundary of the Philippine and Eurasian plates in the western Pacific Ocean. It is a country of strong earthquakes.
Why other countries should take lesson from Taiwan in quake resilience?
In 1999, the Chi-Chi earthquake of magnitude 7.7 occurred in the central part of Taiwan and impacted the western region. It killed more than 2,430 people and left 11,305 wounded. It caused more than 50,000 buildings to collapse and partially damaged as many.
In 2024, Hualien earthquake killed at least 13 people and injured about 1,000. Most of the deaths were caused by earthquake-triggered rockfalls and not by toppled buildings. Despite being of nearly comparable magnitude, the 2024 earthquake has caused minimal damage compared to the 1999 earthquake.
Taiwan’s earthquake preparedness
Advanced Monitoring and Early Warning Systems: Taiwan boasts the most advanced earthquake-monitoring network and early warning systems, allowing for quick detection and alerting of seismic activity.
Public Awareness Campaigns and Drills: Widespread awareness campaigns and regular drills on earthquake safety have significantly improved the public’s understanding of earthquake risks and proper safety protocols.
Government Regulations and Incentives: The government constantly updates earthquake safety requirements for both new and existing buildings. Additionally, incentives such as subsidies are offered to residents to improve the quake resistance of buildings, encouraging compliance with safety standards.
Scientific Judgments for Seismic Risk: Utilizing knowledge of earthquake frequency and severity in different areas, Taiwan is able to make sound scientific judgments regarding seismic risk.
Utilization of New Technologies: Taiwan employs cutting-edge technologies such as seismic dampers and base isolation systems to enhance building resilience. For example, Taipei 101, the nation’s iconic building, features a tuned mass damper—a massive steel sphere suspended by cables within the tower—which acts as a pendulum to counteract building motion during earthquakes.
What India can learn from Taiwan?
Importance of Seismic Safety Regulations: India, especially in tectonically unstable regions like the Himalayas, must prioritize seismic safety regulations in all infrastructure projects.
Customized Seismic Codes: Similar to Taiwan, India should develop seismic codes tailored to specific regions based on local earthquake activity, building types, and construction materials. These customized codes can better address the unique seismic risks faced by different parts of the country.
Utilization of Traditional Architectural Styles: In some parts of India, traditional architectural styles may possess inherent earthquake resistivity. By rediscovering and encouraging the use of these traditional techniques, India can promote earthquake-resistant building practices that are culturally and environmentally sustainable.
Integration of Seismic Zonation Maps: Indian code IS 1893 already specifies seismic designs based on seismic zonation maps. It’s crucial for India to integrate these maps effectively into urban planning and construction practices to ensure that buildings are designed and located in accordance with seismic risk assessments.
Conclusion
Earthquakes is natural disasters with unpredictable occurrences, can have devastating effects on society. However, their impact can be mitigated through preventive measures such as early warning systems, construction regulations, and raising awareness about earthquake preparedness.
Mains PYQ
Q Discuss about the vulnerability of India to earthquake related hazards. Give examples including the salient features of major disasters caused by earthquakes in different parts of India during the last three decades.(UPSC IAS/2021)
Mains question for practice
Q Analyzing Taiwan’s earthquake preparedness following the April 3rd 7.4 magnitude earthquake, explore lessons for India’s earthquake resilience strategy.
Q) ‘Clean energy is the order of the day.’ Describe briefly India’s changing policy towards climate change in various international fora in the context of geopolitics. (UPSC IAS/2022)
Q) ‘Climate change’ is a global problem. How India will be affected by climate change? How Himalayan and coastal states of India will be affected by climate change? (UPSC 2017)
Prelims
With reference to ‘Global Climate Change Alliance’, which of the following statements is/are correct? (UPSC 2017) 1. It is an initiative of the European Union. 2. It provides technical and financial support to targeted developing countries to integrate climate change into their development policies and budgets. 3. It is coordinated by World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD).Select the correct answer using the codes given below: a) 1 and 2 only b) 3 only c) 2 and 3 only d) 1, 2 and 3
Note4Students:
Prelims: Climate Change Reports;
Mains: Environmental Governance; Climate Justice;
Mentor comments:Recently, climate variability in the form of floods and cyclones has destroyed crops, property and infrastructure, as well as in negative impacts on human health and well-being. All of these impacts set back general socio-economic development. Also globally, Climate change impacts, an array of Internationally guaranteed Human Rights. States have their own set of challenges to take effective measures to redress these climate impacts, and therefore, to mitigate climate change, and to ensure that all human beings have the necessary capacity to adapt to the climate crisis. We must ensure climate justice requires climate action to be consistent with existing human rights, standards, and principles.
Let’s learn
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Why in the News?
The European Court of Human Rights has ruled that countries have a responsibility to protect their citizens from the consequences of climate change, setting a legal precedent for future climate litigation.
Recently, our Supreme Court has also underscored the urgency of recognizing climate change as a human rights crisis.
These two landmark decisions have set important precedents for legal accountability and policy action to address the adverse impacts of climate change on individuals and communities.
How is the Climate crisis interrelated with Human Rights?
The 5th Report of the Intergovernmental Panel on Climate Change confirms that climate change is caused by anthropogenic emissions of greenhouse gases.
This year’s unprecedented heat was accompanied by other alarming trends, including ocean heat accumulation, sea level rise, Antarctic Sea ice loss, and glacier retreat.
Among other impacts, climate change negatively affects people’s rights to health, housing, water, and food.
Countries such as Germany, Ireland, New Zealand, Finland, South Korea, South Africa, and Philippines have enacted comprehensive climate laws that have facilitated the mobilization of public sector resources, increased capacity for climate action, and promoted cross-sectoral collaboration.
Challenges faced by India:
Rising Temperatures and Natural Disasters: More than 80% of its population lives in districts that are at risk of climate-induced disasters. They are majorly affecting livelihoods, food security, and exacerbating existing socio-economic inequalities.
Agri-dependent Population: With a 1.2 billion growing population and its high dependence on agriculture, India probably will be severely impacted by continuing climate change.
Melting of Himalayan Glaciers: Global observations of melting glaciers suggest that climate change is well underway in the region, with glaciers receding at an average rate of 10–15 meters per year.
Forest Wealth on decrease: India’s forests are already changing because of socioeconomic pressures; virgin forest areas are less dense and monocultures and plantations are preferred to native species. These conditions will be greatly exacerbated by climate change.
Forest Fires: As per State of the Forest Report 2019, over 36% of India’s forest cover is prone to fires, recently being the Nilgiri Forest Fires.
Efforts made by the Indian Government:
Worked on Decoupling Emissions: India has achieved two of its Nationally Determined Contribution (NDC) targets:
First, by reducing the emissions intensity of its GDP by 33% to 35% from the 2005 level.
Second, by achieving 40% cumulative electric power installed capacity from non-fossil fuel sources, well ahead of the target year of 2030.
Sustainable Development Goals: India’s localization model for the SDGs, has successfully integrated into local-level planning through multi-tiered and multi-stakeholder processes.
For example, in programs like poverty alleviation, food security, access to clean water and sanitation, and gender equality.
Judicial Intervention: Looking at the impacts of climate change from a rights perspective, affecting humanity’s right to health, life, and liberty, the Supreme Court has brought them within the purview of Constitutional Fundamental Rights.
Measures to Enhance India’s Climate Governance:
To Mitigate Climate Change: States must act to limit anthropogenic emissions of greenhouse gases (e.g. mitigate climate change), including through regulatory measures, to prevent to the greatest extent possible the current and future negative human rights impacts of climate change.
Restoring Capacity to Adapt to Climate Change: States must build adaptive capacities in vulnerable communities, by devoting adequate resources to the realization of the economic, social and cultural rights of all persons, particularly those facing the greatest risks.
To Ensure Effective Remedy for Human Rights: States should be accountable to rights-holders for their contributions to climate change including for failure to adequately regulate the emissions of businesses under their jurisdiction.
To Ensure Equity: Those who have contributed the least to greenhouse gas emissions (i.e. the poor, children, and future generations) are those most affected. Hence bringing Equity is a must.
Understanding and managing Glycemic Index (GI) in diets is crucial for promoting long-term health and mitigating the risk of chronic diseases.
What is Glycemic Index (GI)?
Prof. David Jenkins of the University of Toronto introduced Glycemic Index (GI) in 1981.
GI measures how quickly a food raises blood glucose levels compared to a reference food, typically glucose or white bread, which is assigned a value of 100.
GI Classification and Glycemic Load (GL):
Multiplying GI by the amount of carbohydrate consumed gives the Glycemic Load (GL).
Accordingly, foods are classified as:
Low GI (below 55): Brown rice, steel-cut oats, legumes (such as lentils and chickpeas), most fruits (like apples, berries, and oranges), vegetables, nuts, and seeds.
Medium GI (56-69): Whole wheat products, such as whole wheat bread and pasta, some types of rice (like basmati rice), and certain fruits like pineapple and mango.
High GI (70 or above): Refined carbohydrates and sugary foods such as white rice, white bread, refined flour products, potatoes, sweetened drinks (like soda), candies, cookies, and sugary snacks.
Debate and Perspectives:
The Prospective Urban Rural Epidemiology (PURE) study, spanning 20 countries including India, revealed the link between high GI diets and cardiovascular events and mortality.
Evidence supports the association between high GI diets and increased risk of type 2 diabetes, cardiovascular disease, and mortality.
Relevance to India
In South Asia, where diets are rich in high GI foods like white rice, efforts to reduce GI and GL are crucial.
Lowering GI and GL can help prevent not only diabetes but also premature cardiovascular disease, which is prevalent in India.
PYQ:
[2011] Regular intake of fresh fruits and vegetables is recommended in the diet since they are a good source of antioxidants. How do antioxidants help a person maintain health and promote longevity?
(a) They activate the enzymes necessary for vitamin synthesis in the body and help prevent vitamin deficiency
(b) They prevent excessive oxidation of carbohydrates, fats and proteins in the body and help avoid unnecessary wastage of energy
(c) They neutralize the free radicals produced in the body during metabolism
(d) They activate certain genes in the cells of the body and help delay the ageing process
Mains PYQ Relevance: Q) Suggest measures to improve water storage and irrigation system to make its judicious use under depleting scenarios. (UPSC IAS/2020) Q) What is water stress? How and why does it differ regionally in India? (UPSC 2019)
Prelims
Q) If National Water Mission is properly and completely implemented, how will it impact the country? (UPSC 2012) 1. Part of the water needs of urban areas will be met through recycling of waste water.The water requirement of coastal cities with inadequate alternative sources of water will be met by adopting appropriate technologies that allow for use of ocean water. 2. All the rivers of Himalayan origin will be linked to the rivers of peninsular India. 3. The expenses incurred by farmers for digging bore wells and for installing motors and pump sets to draw groundwater will be completely reimbursed by the Government. Select the correct answer using the codes given below:
(a) 1 only (b) 1 and 2 only (c) 3 and 4 only (d) 1, 2, 3 and 4
Note4Students:
Prelims: World Earth Day;
Mains: Environmental Governance;
Mentor comments:Prolonged water stress can have devastating effects on public health and economic development. More than two billion people worldwide lack access to safe drinking water; and nearly double that number more than half the world’s population—are without adequate sanitation services. Without better water management, population growth, economic development and climate change are poised to worsen water stress.
Let’s learn
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Why in the News?
On account of Earth Day (April 22), India needs to be prepared for water stressed challenges. Recently, IMD has also predicted a hotter summer and longer heat waves from April to June.
Present Scenario:
India houses 18% of the world’s population (2.4% of the earth’s surface area), having just 4% of global freshwater resources.
Nearly half of its rivers are polluted, and 150 of its primary reservoirs are at just 38% of their total live storage capacity.
India is the largest user of groundwater in the world.
The Present challenge before the Indian Govt. to combat Climate Change:
Heavy Investment: India has invested heavily in disaster preparedness, but the nature of climatic shocks will continue to change. There will be sudden shocks (heavy rainfall, rapid declines in water availability) as well as slow onset but periodic stresses (reduced water retention in soils, changes in trend lines for rainfall).
Lack of Preparedness: India is programmed to consider acute stresses (heat, water, or extreme weather) as temporary, to be handled often as disaster relief. Seasonal disaster preparedness and responses are no longer sufficient to tackle climate risks.
High Interdependence: The climate is directly related to the economy, and the economic production frontier will expand or shrink depending on the intersections between land, food, energy, and water. Climate action cannot be left to a few particular sectors.
Relationship between Water and the Economy
A key component of the Economy:
Agriculture: The India Employment Report 2024 shows that Agriculture still employs around 45% of the population and absorbs most of the country’s labor force. Precipitation is the primary source of soil moisture and both blue (rivers and aquifers) water and green (vegetation) water impact the food we grow.
Allied Sectors: The Council on Energy, Environment, and Water (CEEW) study showed that monsoon rainfall is changing patterns in India, with 55% of ‘tehsils’ or sub-districts seeing a significant increase of more than 10% in southwest monsoon rainfall.
A key component of the Clean Energy Transition:
Green hydrogen: It is seen as a crucial pillar for decarbonizing industry and long-distance transport sectors. The Green hydrogen is produced using water and electricity sourced from renewables. Pumped storage hydropower which acts as a natural battery is an important component of a clean but reliable power system.
If there is a climate crisis, it will impact hydrometeorological disasters. According to the UN World Water Development Report 2020, almost 75% of natural disasters in the last two decades were related to water.
What does the Effective Water Governance need?
Needs to recognize Interactions with Food and Energy Systems: Although India has adopted several policies, most do not recognize this nexus while planning or at the implementation stage.
For example, while the scaling up of green hydrogen is desirable, the link with water availability is not always considered.
Similarly, the impact of scaling up solar irrigation pumps on groundwater levels must be analyzed to deploy the technology where there is an optimal mix of solar resources and higher groundwater levels.
Need to identify the Food-Land-Water nexus: Policies need to be designed differently, based on local evidence and community engagement. India needs to focus on the judicious use of blue and green water through water accounting and efficient reuse.
For Example, the National Water Mission targets increasing water use efficiency by 20% by 2025.
Similarly, the Atal Mission on Rejuvenation and Urban Transformation (AMRUT) 2.0 calls for reducing non-revenue water, which is lost before it reaches the end user, to less than 20% in urban local bodies.
Need for Water Accounting Principles: The present policies and programs are not backed by any baseline set using water accounting principles that will help quantify freshwater use. It is essential for promoting water use efficiency and creating incentives for investments in treated wastewater reuse.
For example, in the absence of water use data for the reference year, it is difficult to quantify the potential water saving in one sector, such as agriculture.
Need to leverage financial tools: Financial commitments for climate change adaptation in the water and agriculture sectors are still relatively small. It is necessary to raise money for climate adaptation in the water sector.
For Example, India’s Green Credit Programme has the potential to partially bridge the adaptation funding gap by encouraging investment in wastewater treatment, desalination plants, and agricultural extension services.
Similarly, investments in India under Corporate Social Responsibility, there is a potential to leverage about ₹12,000 crore worth of investments every year.
Conclusion: A water-secure economy is the first step towards a climate-resilient one. It is possible to make a start by pursuing more coherence in water, energy and climate policies, creating data-driven baselines to increase water savings, and enabling new financial instruments and markets for adaptation investments.
The International Monetary Fund (IMF) released its latest Global Financial Stability Report warning about the risks to the Global Financial System.
What is the IMF’s worry about Inflation?
Premature Investor Enthusiasm: The IMF believes that investors may be overly optimistic about the end of high inflation and the subsequent lowering of interest rates by central banks. This enthusiasm could be premature.
Stalled Inflation: The IMF highlights that inflation may have stalled in some major advanced and emerging economies. Core inflation in the most recent three months has been higher than in the previous three months, indicating a potential slowdown in the decline of inflation.
Geopolitical Risks: The IMF warns that geopolitical risks, such as ongoing conflicts in West Asia and Ukraine, could disrupt aggregate supply and lead to higher prices. This could counteract efforts to lower inflation and deter central banks from lowering interest rates.
Potential Impact on Central Bank Action: The IMF suggests that if these risks persist, central banks may delay or refrain from lowering interest rates as expected by investors, which could have consequences for asset prices and investor losses.
How it will impact the Indian Market?
Strong Fund Flows: Emerging markets like India have experienced strong inflows of foreign capital, driven by optimism surrounding potential interest rate cuts by central banks.
Vulnerability: If central banks in Western countries signal a prolonged period of high interest rates, investors may withdraw funds from emerging markets like India, putting pressure on their currencies.
Depreciation of the Indian Rupee: The Indian rupee has already been depreciating, reaching a new low against the U.S. dollar. This trend could continue if capital outflows accelerate.
In response to currency depreciation and capital outflows, the RBI may intervene by curbing liquidity and raising interest rates. However, this could slow down the economy.
Potential Effects on Financial System: A severe outflow of capital could have implications for India’s financial system, potentially exacerbating the depreciation of the rupee and causing instability.
Private Credit Market Scenario:
The private credit market globally grew to $2.1 trillion last year, indicating its significant size and importance in the financial landscape.
The IMF is concerned about the unregulated private credit market, where non-bank financial institutions lend to corporate borrowers. Troubles in this market could potentially affect the broader financial system.
India has also witnessed the growth of a small private credit market, particularly with the rise of Alternative Investment Funds (AIFs).
Conclusion: The IMF’s concerns over premature investor optimism on inflation and risks from geopolitical tensions highlight potential challenges for India’s financial stability. Vigilance over capital flows and regulation of the private credit market are essential safeguards.
Mains PYQ:
Q The World Bank and the IMF, collectively known as the Bretton Woods Institutions, are the two inter-governmental pillars supporting the structure of the world’s economic and financial order. Superficially, the World Bank and the IMF exhibit many common characteristics, yet their role, functions and mandate are distinctly different. Elucidate.
On April 12, the Environment Ministry issued further guidelines on its Green Credit Programme (GCP)
What is the Green Credit Programme?
The Green Credit Programme is a new market-based instrument in India designed to incentivize individuals, industries, and local bodies for their voluntary environmental actions across different sectors.
It is included under the government’s ‘Lifestyle for Environment’ or ‘LiFE’ movement and is a domestic voluntary market mechanism where green credit serves as a singular unit of credit provided for each specified activity.
Features of the Green Credit Programme:
Open-Platform: Participants, including individuals, organizations, and both public and private companies, can invest in these environmental initiatives and receive ‘green credits’ in return. These credits are earned based on the environmental impact of the invested activities.
Public sector companies such as Indian Oil, Power Grid Corporation of India, National Thermal Power Corporation, Oil India, Coal India, and National Hydropower Corporation have reportedly registered to invest in the GCP.
Set with Priority: The Ministry has prescribed rules for the first initiative under the GCP, focusing on afforestation. Participants can pay for afforestation projects in degraded forest and wasteland areas, with tree planting conducted by State forest departments.
The Indian Council of Forestry Research and Education (ICFRE), an autonomous body of the Environment Ministry, is responsible for administering the GCP. They define methodologies to calculate green credits and manage a trading platform for credit exchange.
Regional Participation: Thirteen state forest departments have offered 387 land parcels totaling nearly 10,983 hectares of degraded forest land for afforestation projects under the GCP.
Enhanced Decision-Making: Successful participants will receive estimates of the costs involved in their chosen afforestation projects, facilitating informed decision-making and planning.
Why has the GCP stoked controversy?
Commodification of Environmental Conservation: Critics argue that the GCP turns environmental conservation into a commodity, potentially undermining the spirit of India’s forest conservation laws.
Forest Diversion Concerns: The GCP’s provision for companies to “exchange” green credits for complying with compensatory afforestation requirements raises concerns that it could be exploited by industries seeking to ease forest diversion requirements, particularly in sectors like mining and infrastructure.
Ecological Impact: Planting trees as a part of afforestation efforts does not guarantee ecosystem improvement. India’s diverse forest types require specific approaches, and planting the wrong types of trees could lead to the proliferation of invasive species or disrupt sustainable ecosystems.
Monoculture Threat: There’s a risk that the GCP may promote the replacement of natural forests with invasive monocultures, potentially harming biodiversity and ecological balance.
Carbon Trading Controversy: The GCP allows green credits resulting from carbon storage (e.g., tree planting) to be used for carbon trading. However, the methodology for equating these activities is unclear, raising doubts about the effectiveness and legitimacy of such carbon trading schemes.
Conclusion: The Green Credit Programme in India, faces criticism for potentially commodifying conservation, raising forest diversion concerns, posing ecological risks like monoculture, and lacking clarity in carbon trading methodologies. So there is a need for rigorous oversight and adaptation.
Mains PYQ
Q Explain the purpose of the Green Grid Initiative launched at World Leaders Summit of the COP26 UN Climate Change Conference in Glasgow in November, 2021. When was this idea first floated in the International Solar Alliance (ISA)?
The sharp reduction in Household Net Financial Savings and the rise in Household Debt burden are a cause for concern for growth and economic stability.
BACK2BASICS:
What are household financial savings?
Household financial savings refer to currency, bank deposits, debt securities, mutual funds, pension funds, insurance, and investments in small savings schemes. The total of these savings is referred to as gross household financial savings.
What is Household Debt?
Household debt is all household liabilities (including non-profit institutions serving households) that require payments of interest or principal by households to creditors at a fixed date in the future.
Debt is calculated as the sum of the following liability categories: loans (primarily mortgage loans and consumer credit) and other accounts payable.
What are the present reasons behind the Lower Financial savings?
Increased borrowing or reduced gross financial savings are the primary drivers of lower net financial savings.
Lower net financial savings due to increased borrowing for consumption or investment can stimulate aggregate demand and output.
Higher interest rates can lead to increased interest payments by households, reducing their net financial savings.
Implication of Higher Debt Burden on the Indian Market: The rise in household debt burden has two concerns for the macroeconomy.
Debt Repayment and Financial Fragility: Household debt sustainability depends on the gap between the interest rate and income growth rate.
Suppose households fail to meet their debt repayment commitments. In that case, it reduces the income of the financial sector and deteriorates their balance sheets, which in turn can have a cascading effect on the macroeconomy.
Scheduled Commercial Banks Lending vs. Growth Rate of GNS: The weighted average lending rate registered a sharp rise in the last two years, particularly due to the tight monetary policy stance of the RBI and the sharp rise in the call money rate during this period.
Impact on Consumption Demand: Reducing household wealth can lead to lower consumption expenditure as households may attempt to preserve their wealth by increasing their savings.
Reduced Higher household debt: Higher household debt can also reduce consumption expenditure in at least two ways.
If higher household leverage is perceived as an indicator of higher default risk, then it may induce banks to indulge in credit rationing and reduce credit disbursement. The consequent reduction in credit disbursement can adversely affect consumption.
Higher debt can reduce consumption expenditure by increasing the interest burden, not to mention the effect of higher interest rates on consumption expenditure.
Low household Financial wealth: Recent trends in the Indian economy indicate a decline in household financial wealth relative to GDP, alongside an increase in household leverage (debt to net worth ratio).
The financial wealth/net worth of the household is the difference between the stock of financial assets and liabilities.
Macroeconomic Implication:
Implications of the Procyclical Leverage: Given that both the flow indicator of liabilities to disposable income and the debt to net worth show an increasing trend, where households are vulnerable.
Fall in the Household Savings: The policy mantra of higher interest rates to counter inflation by reducing macroeconomic output and employment can leave households with an increasing level of debt in their balance sheets and potentially push the households into a debt trap.
The implications of high-interest rates on debt burden can hurt the consumption of the households and consequently aggregate demand.
Suggestive measures:
Promote sustainable borrowing: Policymakers need to address the growing vulnerabilities of households by implementing measures to promote sustainable borrowing practices and reduce reliance on debt.
Prioritizes production and employment: Additionally, the policies aimed at fostering a more balanced economy that prioritizes production and employment alongside financial activities may be necessary to ensure long-term economic stability and growth.
Conclusion: The change in the composition of the asset side of the household balance sheet towards financial assets indicates some degree of financialization of the economy which moves from a production-based economy to a monetary or financial exchange-based economy making the 5 trillion dollar economy both jobless and fragile.
Mains PYQ:
Q The public expenditure management is a challenge to the Government of India in the context of budgetmaking during the post-liberalization period. Clarify it.(UPSC IAS/2019)
A significant health concern in Tamil Nadu is found through ingestion of Rat poison containing Yellow Phosphorus, leading to liver toxicity.
Since December 2017, the team at CMC Vellore introduced Plasma Exchange, (a cost-effective treatment) for acute liver failure caused by rat poison ingestion.
What is Plasma Therapy (Plasmapheresis)?
Plasma exchange, also known as plasmapheresis, is a medical procedure used to treat various conditions by removing and replacing plasma from the blood.
During Plasma Exchange, the patient’s blood is circulated through a machine that separates plasma from other blood components, such as red and white blood cells and platelets.
Working procedure:
The plasma, which may contain harmful substances or antibodies, is discarded.
The remaining blood components are mixed with replacement plasma or a plasma substitute and returned to the patient’s bloodstream.
Usage of Plasmapheresis:
In Autoimmune diseases: Conditions such as Guillain-Barre syndrome, myasthenia gravis, systemic lupus erythematosus, and certain forms of vasculitis.
In Neurological disorders: Conditions such as multiple sclerosis, chronic inflammatory demyelinating polyneuropathy, and certain types of encephalitis.
In Toxicological emergencies: Poisoning or overdose with substances such as drugs, chemicals, or toxins that can be removed from the bloodstream through plasma exchange.
Benefits observed in TN’s Case
The treatment significantly improved survival rates, with 63.9% of patients treated in 2022-2023 successfully discharged.
Retrospective studies at CMC Vellore demonstrated promising outcomes, with survival rates of 75% among children and 80.2% among adults treated with plasma exchange.
What is Plasma in Human Blood?
Human blood plasma is the liquid component of blood, constituting about 55% of its total volume.
It is a pale yellowish fluid that carries various substances throughout the body, including nutrients, hormones, electrolytes, antibodies, and waste products.
Plasma plays a crucial role in maintaining homeostasis and transporting essential components to tissues and organs.
Composition:
Water: Approximately 90% of plasma consists of water, making it the primary solvent for carrying dissolved substances.
Proteins: Plasma contains a variety of proteins, including albumin, globulins, and fibrinogen. These proteins perform functions such as maintaining osmotic pressure, transporting lipids and hormones, and aiding in blood clotting.
Electrolytes: Plasma contains ions such as sodium, potassium, chloride, calcium, and bicarbonate, which help regulate fluid balance, pH, and nerve function.
Nutrients: Glucose, amino acids, lipids, and vitamins are transported in plasma and provide energy and building blocks for cells.
Waste Products: Metabolic waste products, such as urea, creatinine, and bilirubin, are transported in plasma to be eliminated from the body.
Hormones: Hormones produced by endocrine glands are carried in plasma to target tissues, where they regulate various physiological processes.
Gases: Oxygen and carbon dioxide are transported in plasma, primarily bound to hemoglobin in red blood cells.
Functions:
Plasma carries nutrients, gases, hormones, and waste products to and from cells throughout the body.
Plasma helps regulate fluid balance, electrolyte concentrations, pH, and temperature.
Antibodies and immune cells in plasma help defend against pathogens and foreign substances, contributing to the body’s immune response.
Plasma proteins such as fibrinogen play a crucial role in blood clotting, helping to stop bleeding and repair damaged blood vessels.
Plasma buffers changes in pH by absorbing or releasing hydrogen ions, helping maintain the body’s acid-base balance.
PYQ:
[2011] A married couple adopted a male child. A few years later, twin boys were born to them. The blood group of the couple is AB positive and 0 negative. The blood group of the three sons is A positive, B positive, and O positive. The blood group of the adopted son is-
