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  • Foldscope: A new paper microscope

    fold

    Researchers from the Indian Institute of Science (IISc), Bengaluru, have developed a cheap paper microscope (foldscope) connected to a smartphone camera that could find wider application in a variety of research areas, and in some cases potentially replace more expensive equipment.

    What is Foldscope?

    • The Foldscope is a handheld microscope made mostly of paper that can be easily linked to a smartphone camera.
    • It has a magnification of around 140x and can identify objects just 2 micrometres wide.
    • It was first created by researchers at Stanford University in 2014.
    • IISc version of Foldscope costs around Rs 400, much cheaper than that of Stanford’s one.

    How is Foldscope comparable to electron microscope?

    • The researchers found that Foldscope could capture the roundness and aspect ratio of an object to within 5% of those imaged by a state-of-the-art instrument called a scanning electron microscope (SEM).
    • SEM costs more than Rs 50 lakh each.
    • Preparing a sample for study through a Foldscope takes less than an hour, whereas the same process for an SEM was “tedious and time-consuming”.

    Potential applications

    • Foldscopes can be used in pharmaceuticals (to inspect drug products), environmental science (to observe pollutants), and cosmetics (to observe powders and emulsions), among other fields.
    • They can also be used to study “soil particles’ morphology,” which can “help understand soil structure, nutrient availability, and plant growth” in agriculture.
    • It allows for in-field soil analysis and visualisation of soil structure per Indian Standard Soil Classification System which earlier required bulky microscopes with high resolution.

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  • Capital Expenditure (CAPEX): Crucial Role Of The States

    Expenditure

    Central Idea

    • The budget’s clear thrust towards capital expenditure is evident in the 33% increase in its allocation. The primary goal of this allocation is to bolster aggregate demand in the short term and enhance the economy’s productive capacity in the long term. This strategy is widely regarded as beneficial, especially considering the crucial role that infrastructure plays in the growth and development of any economy.

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    Capital Expenditure of the states

    • Capex of the states exceed than the central govt: The combined spending of Indian states on capital expenditure now exceeds that of the central government.
    • For example: In 2021-22, this figure combined for states and Union territories, according to budget estimates, was â‚č10.5 trillion. The Centre’s effective capital expenditure that year was â‚č8.4 trillion, including â‚č2.5 trillion as grant for creation of assets.

    What is Capital Expenditure (CAPEX)?

    • Capital expenditure refers to investments in upgrading existing or building new physical assets by the government or private businesses.
    • As businesses expand, capex has a multiplier effect on the economy, creating demand and unleashing animal spirits.

    Main types of Capex

    • Infrastructure development: This includes building and upgrading public infrastructure such as roads, highways, railways, ports, airports, power plants, and water supply systems.
    • Defence and security: This involve the acquisition and maintenance of defence equipment, weapons systems, and other security-related investments.
    • Social sector spending: This includes investment in areas such as education, healthcare, and social welfare programs to improve the quality of life of the citizens.
    • Rural development: This includes spending on agricultural and rural infrastructure such as irrigation systems, rural electrification, and rural housing.
    • Capital investments in public sector enterprises: The government may also invest capital in public sector enterprises to improve their efficiency and profitability

    Key reasons why the Indian government emphasizes Capex?

    • Promoting economic growth: Capital expenditure is critical for promoting economic growth by creating demand for goods and services, boosting private sector investment, and increasing employment opportunities. By investing in infrastructure, the government can provide the necessary framework for businesses to grow and thrive.
    • Improving public services: Capital expenditure is required to build and upgrade public facilities such as hospitals, schools, and water supply systems, and provide necessary equipment and supplies. This investment in public services is crucial for improving the quality of life of citizens and promoting social and economic development.
    • Infrastructure development: It is critical for promoting trade, commerce, and investment, and improving the country’s overall competitiveness. By investing in infrastructure, the government can create new economic opportunities, support the growth of existing industries, and attract foreign investment.
    • Creating employment opportunities: Capital expenditure creates employment opportunities in the short term through the construction of infrastructure projects and in the long term by supporting economic growth and promoting private sector investment.
    • Attracting private sector investment: The government’s emphasis on Capex can also help attract private sector investment by providing the necessary infrastructure and a favourable business environment.

    What are the concern over State capex?

    • Uneven capacity CAPEX: One general macro-economic challenge is to address this uneven inclination of states or capacity for capital expenditure, which adds uncertainty to the impact of an expansionary fiscal policy led by capex, thus weakening its potential benefits.
    • The ultimate aim of all CAPEX is to enhance the productive capacity of the economy: The nature of state capital expenditure drawn in is also vitally important. Ideally, the nature of state capital expenditure drawn in by central capital expenditure should be such that it dovetails with the latter to optimize long-term enhancements of economic capacity.
    • States have tendency to postpone capex: The Union budget for 2023-24 encourages states to make reforms in urban local bodies to become creditworthy for municipal bond issuance. However, states have a tendency to postpone capital expenditure until revenue streams firm up.

    Way ahead

    • States need to improve their execution capacity and establish an enabling regulatory environment to ensure quality and speed of expenditure.
    • The planning and budgeting cycle of states should also be aligned with fund releases to fully utilize resources within the available time.
    • States play a crucial role in capital expenditure and must not only budget more but also spend fully and uniformly throughout the year.

    Conclusion

    • States need to prioritize timely and efficient execution of capital expenditure and fully utilizing budgeted capital amounts uniformly throughout the year. The RBI report, while acknowledging that Indian states made higher capital outlays in 2022-23, notes that states would do well to mainstream capital planning rather than treating them as residuals and first stops for cutbacks in order to meet budgetary targets.

    Mains Question

    Q. What do you understand by Capital Expenditure (CAPEX)? Highlight the concerns over capex by the states and suggest a way ahead.

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  • Distributed Renewable Energy (DRE) Transforming Rural Women’s Life

    DRE

    Central Idea

    • Women from rural India are adopting clean energy-based livelihood technologies to catalyse their businesses. From solar refrigerators to silk-reeling machines and biomass-based cold storage to bulk milk chillers, distributed renewable energy (DRE) is transforming women’s livelihoods at the grassroots.

    What is Distributed Renewable Energy (DRE)?

    • DRE refers to the generation and distribution of electricity from renewable energy sources, such as solar, wind, hydro, geothermal, and biomass, through small-scale, decentralized systems.
    • These systems are often installed in remote or rural areas where it is difficult or expensive to connect to a centralized power grid.
    • DRE systems can range from individual rooftop solar panels to small-scale wind turbines, mini-hydro systems, and biomass generators.
    • They are typically designed to serve a single household or community, rather than a large urban or industrial center.
    • DRE systems are also known as off-grid or mini-grid systems, and they can be standalone or connected to a larger power grid.

    Recent Statistics

    • More than 80% are women: A recent Council on Energy, Environment and Water (CEEW) study has shown that out of the 13,000 early adopters of clean tech livelihood appliances, more than 80% are women.
    • Future projection: By 2030, India is expected to see 30 million women-owned micro, small and medium enterprises (MSMEs) employing around 150 million people. DRE livelihood technologies a $50 billion market opportunity in India alone have the potential to transform rural livelihoods, with women at the core of this transition.

    DRE

    Advantages of DRE systems

    • Several advantages: They are more resilient to natural disasters and grid failures, they can reduce energy costs for communities and households, and they can increase energy access in areas that are not served by the main power grid.
    • Reduce carbon emissions: Additionally, DRE systems can reduce carbon emissions and help to mitigate the impacts of climate change.
    • DRE advantages for women: DRE-powered technologies provide an additional advantage to women farmers and microentrepreneurs by enhancing income opportunities through mechanization. They also free women from several gender-assigned manual activities that are laborious.

    DRE

    Steps to scale up this impact

    • Leverage the experience of early women adopters: The technology providers must leverage early users to share their experiences with potential customers, becoming demo champions/sales agents to market these products, based on their first-hand product experience and local credibility.
    • For example: Kissan Dharmbir, an energy-efficient food processor manufacturer, engaged Neetu Tandan, an Agra-based micro-entrepreneur using the processor to produce fruit squashes and jams, as a demo champion. Her demonstrations are generating sales leads.
    • Organise hyperlocal events and demos: These events also create spaces for women to network, become aware of the product and connect with people who can help them procure, finance and use these machines.
    • For example: At an event in Hamirpur, Uttar Pradesh, more than 200 women booked seven appliances on the spot, including solar sewing machines and multi-purpose food processors.
    • Enable easy finance to purchase products: Limited avenues to avail financing for these clean technology products remain a bottleneck. Financiers supporting women farmers and microentrepreneurs should consider the technologies themselves as collaterals while easing the loan application process.
    • For example: Samunnati Finance, a financier in the agri-value chain, availed an 80% first-loan default guarantee to support six women-led FPOs in Andhra Pradesh that purchased 100-kg solar dryers.
    • Support backwards and forward market linkages: Only technology provision is not enough in all cases. Many rural products have larger market potential. Thus, finding and connecting producers to consumption hubs in urban areas are equally important to generate higher incomes.
    • Ensure adequate after-sales services buy backs: Technology manufacturers and promoters should also ensure adequate after-sales services and buy-backs. To build financiers’ confidence, evidence on the economic viability of these technologies should be shared and promoters must offer partial default guarantees.
    • Enable policy convergence: No private sector entity has the kind of reach and scale government institutions have, so leveraging their reach is imperative to exponentially scale up. Multiple Ministries are working towards promoting livelihoods for women from State rural livelihood missions, horticulture and agriculture departments, Ministry of Micro, Small and Medium Enterprises, to the Ministry of Textiles. They should embrace clean energy solutions to further their respective programmes and outcomes.

    What are the challenges that women face?

    • Perception of high risk: The high starting price and newness of DRE appliances can create a perception of high risk, particularly for women users who may have a lower risk appetite due to socio-economic factors.
    • Low belief: Due to historical limitations on women’s access to new information, people tend to want to physically touch and see high-tech, high-priced DRE products before believing in their ability and promised benefits.
    • Limited network: Women often struggle with established market linkages because of their limited mobility and networks outside their villages.

    DRE

    Conclusion

    • Much like it takes a village to raise a child, scaling the impact of clean energy solutions on women’s livelihoods needs a village of policymakers, investors, financiers, technology promoters and other ecosystem enablers. Only then can we truly unlock the potential of rural women and clean technologies simultaneously.

    Mains question

    Q. What do you understand by Distributed Renewable Energy (DRE)? What is to be done scale up this impact from thousands of women to millions of them?

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  • PMI suggests Services activity hit 12-year high

    services

    The Purchasing Managers Index (PMI) for the services sector in India rose to 55.3 in February. This marks the highest level of the PMI in the services sector in 12 years, driven by an increase in new business orders and employment.

    Service Sector

    The service sector, also known as the tertiary sector, includes a wide range of economic activities that are focused on providing intangible goods and services to customers.

    Some examples of activities that fall under the service sector include:

    1. Hospitality and tourism: This includes activities such as hotels, restaurants, travel agencies, and tour operators.
    2. Retail and wholesale trade: This includes businesses that buy and sell goods, such as supermarkets, department stores, and online retailers.
    3. Financial services: This includes banks, insurance companies, and investment firms.
    4. Professional and business services: This includes activities such as legal services, accounting, consulting, and advertising.
    5. Information and communication technology: This includes activities such as software development, telecommunications, and data processing.
    6. Healthcare and social assistance: This includes activities such as hospitals, clinics, nursing homes, and social services.
    7. Education and training: This includes activities such as schools, colleges, universities, and vocational training.
    8. Transportation and logistics: This includes activities such as shipping, warehousing, and distribution.

    Purchasing Managers’ Index

    • PMI is an indicator of business activity — both in the manufacturing and services sectors.
    • The S&P Global India Services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies.
    • It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before.
    • It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.

    How is the PMI derived?

    • The PMI is derived from a series of qualitative questions.
    • Executives from a reasonably big sample, running into hundreds of firms, are asked whether key indicators such as output, new orders, business expectations and employment were stronger than the month before and are asked to rate them.

    How does one read the PMI?

    • A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction.
    • Higher the difference from this mid-point greater the expansion or contraction. The rate of expansion can also be judged by comparing the PMI with that of the previous month data.
    • If the figure is higher than the previous month’s then the economy is expanding at a faster rate. If it is lower than the previous month then it is growing at a lower rate.

    Recent trends in Services PMI

    • For the 19th straight month, the headline figure was above the neutral 50 mark, denoting expansion.
    • There was substantial moderation in cost pressures as input prices increased at the slowest pace in almost two-and-a-half years and output charge inflation softened to a 12-month low.
    • Still, capacity pressures remained mild and jobs rose only marginally.

     

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  • Hidden corridor discovered in Pyramid of Giza using Cosmic-Ray Muon Radiography

    muon

    A hidden corridor has been unearthed by scientists inside the Great Pyramid of Giza using a non-invasive technique called cosmic-ray muon radiography.

    What is Cosmic-Ray Muon Radiography (CMR)?

    • CMR is a technique used to study the density and composition of materials hidden within large and dense objects, such as geological formations, archaeological sites, and industrial facilities.
    • The technique involves using muons, a type of cosmic-ray particle, to generate images of the interior of such objects.
    • Muon particles are created when cosmic rays, mostly protons and atomic nuclei, collide with atoms in the Earth’s upper atmosphere.
    • These muons travel through the atmosphere and penetrate deep into the ground, passing through objects along their path.
    • Muons are highly penetrating particles that can penetrate several meters of rock or other materials, making them ideal for imaging the internal structure of objects.

    Working principle

    • The principle behind CMR is to measure the flux of muons passing through an object and compare it to the expected flux based on the object’s geometry and composition.
    • Differences in the measured and expected flux indicate variations in the object’s density or composition, which can be used to create an image of the object’s internal structure.

    Applications

    Some key applications of cosmic-ray muon radiography include:

    1. Volcano monitoring: By using muon radiography to create images of the interior of volcanoes, scientists can better understand their structure and potential eruption hazards.
    2. Archaeology: Muon radiography can be used to explore the interior of pyramids and other ancient structures without damaging them.
    3. Nuclear reactor monitoring: Muon radiography can be used to detect the presence of nuclear materials within reactors and to monitor their condition over time.

    Great Pyramid of Giza

    muon

    • The Great Pyramid is the largest of the three pyramids in Giza, originally standing roughly 147 m above the Giza plateau.
    • Construction was started in 2550 BC, during the reign of Khufu, often considered the greatest pharaoh of Egypt’s old kingdom.
    • It is estimated that the pyramid was built using 2.5 million stone blocks, each weighing between 2.5 and 15 tonnes.

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  • Yellowstone NP celebrates its 151st anniversary

    yellow

    Yellowstone National Park, which celebrated its 151st anniversary earlier this week, is widely considered to be the first national park in the world.

    Yellowstone National Park

    • It is a large protected area located primarily in the U.S. state of Wyoming, although it also extends into Montana and Idaho.
    • It was established in 1872 and is widely considered to be the first national park in the world.
    • It spans an area of over 9,000 sq. km comprising lakes, canyons, rivers, iconic geothermal features such as the Old Faithful geyser, and mountain ranges.

    Some key features and attractions of Yellowstone National Park include:

    1. Geothermal features: Yellowstone is famous for its geothermal features, including geysers, hot springs, mud pots, and steam vents. The most famous of these is Old Faithful, a geyser that erupts on a regular schedule.
    2. Wildlife: Yellowstone is home to a diverse array of wildlife, including grizzly bears, wolves, bison, elk, and moose. Visitors can see these animals in their natural habitats throughout the park.
    3. Scenic drives: The park has several scenic drives, including the Grand Loop Road, which takes visitors to many of the park’s major attractions.
    4. Fishing: The park has many rivers and lakes that offer excellent fishing opportunities, including the Yellowstone River.

     

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  • Artificial intelligence (AI): AI Arms Race and India

    AI

    Central Idea

    • Hosting the G20 leaders’ summit later this year is an excellent opportunity for India to demonstrate its capabilities and contributions to information technology and the digital economy. The newest weapons will not be the biggest bombs, tanks or missiles but AI-powered applications and devices which will be used to wage and win wars. India must wake up to the challenge to protect itself against the potential consequences of an AI war.

    (Source: Indian Express, Article is written by Aasif Shah, a fellow from IIT Madras and winner of the Young Researcher Award 2022 from Indian Commerce Association)

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    Interesting: Message from Robot

    • Recalling the conversation between the world’s first human robot Sophia and CNBC’s Andrew Ross, in which he voiced his concerns about advancements in Artificial intelligence (AI), We all want to prevent a bad future where robots turn against humans,
    • Sophia retorted, don’t worry if you’re nice to me, I will be nice to you.
    • The message was clear: It is up to humans and nations how they utilise AI and appreciate its advantages.
    • The astonishing AI advancements are nothing but a warning to prepare for the unexpected.

    What is Artificial Intelligence (AI)?

    • AI is a constellation of technologies that enable machines to act with higher levels of intelligence and emulate the human capabilities of sense, comprehend and act.
    • The natural language processing and inference engines can enable AI systems to analyze and understand the information collected.
    • An AI system can also take action through technologies such as expert systems and inference engines or undertake actions in the physical world.
    • These human-like capabilities are augmented by the ability to learn from experience and keep adapting over time.
    • AI systems are finding ever-wider application to supplement these capabilities across various sectors.

    AI

    The AI growth in recent times

    • AI has grown significantly in recent times: There is widespread fear that as the usage of AI increases, both blue- and white-collar workers may be replaced and rendered unemployed. But despite criticism in some parts of the world, AI has grown significantly in recent times.
    • Global Market size: The global AI market size was estimated at $65.48 billion in 2020 and is expected to reach $1,581.70 billion by 2030, according to a recent Bloomberg report.
    • Applications and global impact: The growing impact of AI on banking and financial markets, e-commerce, education, gaming and entertainment is changing the world order.
    • Driving forces: The driving forces behind the evolution of AI growth are greater availability of data, higher computing power and advancements in AI algorithms.
    • Many people believe that AI has little bearing on their daily lives: In actuality, we all interact with AI through social media, transportation, banking, cell phones, smartwatches, and other devices.

    AI

    The Real AI threat: AI arms race

    • An Iranian nuclear scientist was hit by machine gun fire in 2020.
    • It was later discovered that the scientist was actually targeted and killed by an Israeli remote-controlled machine gun using AI.
    • There are a series of similar adverse incidents that spark moral discussions regarding the potential benefits and drawbacks of AI.
    • The AI arms race between countries like the US, China and Russia, points to the possibility that AI can escalate global conflict and pose significant security risks.
    • Smaller countries like Israel and Singapore are also in the lead.

    Where does India stand in the AI ecosystem?

    • Investments in India is increasing: According to a Nasscom report, investments in AI applications in India are expected to increase at a compound annual growth rate (CAGR) of 30.8 per cent and reach $881 million during 2023.
    • Contribution of India: The report further added that although there is a massive increase in global investments in AI, the contribution of India has remained at 1.5 per cent.
    • Centres of Excellence for artificial intelligence (AI): In the Budget 2023-24 speech, finance minister made an announcement about the government’s intent to establish three Centres of Excellence for artificial intelligence (AI) in prestigious educational institutions in India.

    AI

    Conclusion

    • Of late India has made considerable strides in digital technology. It is currently the third-largest startup hub in the world and is home to many leading technology companies. However, India still lags behind China in terms of overall AI capabilities. China is leading the way in terms of research, development and AI applications, including development of intelligent robots, autonomous systems, and intelligent transportation systems. The current trend of AI development suggests that it will determine future economies and national security to influence world politics.

    Mains Question

    Q. The newest weapons will not be the biggest bombs, tanks or missiles but AI-powered applications and devices which will be used to wage and win wars. Discuss.

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  • South Asia Need to Invest In Human Capital

    South Asia

    Central Idea

    • The last few years have ushered in a harsh new reality where crises are the norm rather than the exception. Pandemics, economic slumps and extreme weather events were once tail-end risks, but all three have hit South Asia in rapid succession since 2020.  To strengthen resilience and protect the well-being of future generations, governments across South Asia need to take urgent policy action and invest in human capital.

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    South Asia Overview

    • Countries: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
    • Population: The region has a total population of over 1.8 billion people, making it the most populous region in the world.
    • Geography: South Asia has a diverse geography, with mountain ranges such as the Himalayas and Hindu Kush, major rivers like the Ganges, Indus, and Brahmaputra, and coastal areas along the Arabian Sea, Bay of Bengal, and Indian Ocean.
    • Economy: India is the largest economy in the region, accounting for more than 70% of the region’s total GDP. Agriculture is a major employer in most countries, with rice and wheat being staple crops. The manufacturing sector is also a significant contributor to the region’s economy, with textiles, garments, and leather products being major exports
    • Climate: The climate of South Asia is varied, with the monsoon season bringing heavy rainfall to much of the region and causing flooding in some areas. The region’s geography and size also result in varying climate patterns. In general, the region experiences hot and humid summers and mild winters.
    • Climate Change Risks: Climate change poses significant risks to the region, with some areas, such as the Maldives, at risk of sea level rise. Other risks include increased frequency and severity of extreme weather events, such as floods and droughts. The region is also vulnerable to the impacts of climate change on health, including increased incidence of heat-related illness and infectious diseases.
    • Biodiversity and Environmental Threats:
    • South Asia is home to several biodiversity hotspots, such as the Western Ghats in India and the Eastern Himalayas.
    • However, the region faces significant environmental threats, such as deforestation, air and water pollution, and climate change.
    • Deforestation is a major problem in the region, with logging and land use change leading to habitat destruction and loss of biodiversity.

    South Asia

    An underutilized asset of South Asia: Analysis

    • South Asia’s people are its biggest asset but remain wastefully underutilized:
    • With nearly half its population under the age of 24 and over one million young people set to enter the labour force every month until 2030, the region could reap an enviably high demographic dividend.
    • Stunting one of the significant challenges: South Asia is also home to over one third of the world’s stunted children. And a child born in the region today can, by the age of 18, expect to attain only 48% of their full productive potential.
    • Governments spending on Health and education: South Asian governments on average spend just 1% of GDP on health and 2.5% on education. In comparison, the global average is 5.9% on health and 3.7% on education.
    • COVID-19 pandemic, a blow to regions human capital: The COVID-19 pandemic, which pushed an additional 35 million people across South Asia into extreme poverty, dealt an unprecedented blow to the region’s human capital. Among its most woeful impacts is a rise in learning poverty, or the inability to read and understand a simple text by age 10. Ineffective remote instruction, during the pandemic increased South Asia’s learning poverty from 60% to 78%.
    • The poorest and most vulnerable people fell further behind: For example, in Bangladesh, the poorest students lost 50% more in terms of learning than the richest students. Several countries still show little to no signs of recovery, and South Asia’s students could lose up to 14.4% of their future earnings.

    Interventions that can make a difference

    • Affordable education: Recent evidence suggests that even simple and low-cost education programmes can lead to sizable gains in skills.
    • For instance:
    • In Bangladesh attending a year of additional pre-school through two-hour sessions significantly improved literacy, numeracy, and social-development scores.
    • In Tamil Nadu, six months of extra remedial classes after school helped students catch up on about two-thirds of lost learning linked to 18 months of school closures.
    • In Nepal, government teachers ran a phone tutoring programme that helped increase students’ foundational numeracy by 30%.
    • Robust systems for crisis management: The need for countries to have robust systems in place to support individuals and families during times of crisis. Such systems, which can include social safety nets, health care, and education programs, can help to mitigate the impact of crises like the pandemic, protect vulnerable populations, and promote resilience. By investing in these systems before a crisis strikes, countries can better prepare themselves to respond to the challenges that may arise.
    • Use data and technology: Effective systems are needed to respond to crises quickly and maintain vital services like healthcare and education. Coordination across sectors is important. Data and technology play a crucial role in the delivery of services, human development systems should ensure they are effectively used.

    South Asia

    World Bank study: Interdependence of health, education and skills for human development

    • A new World Bank study, Collapse and Recovery: how COVID eroded human capital and what to do about it, analyses the pandemic’s impacts on young people, stresses the multi-dimensional and complementary nature of human development.
    • The health, education, and skills people acquire at various stages of their lives, build and depend on each other.
    • To be effective, human development systems must recognise and exploit these overlapping connections. In other words, they should be agile, resilient and adaptive.

    Conclusion

    • The road ahead for South Asia is rocky. The next crisis may be just around the corner. A robust human development system would not only mitigate the damage but also help ensure lives and livelihoods are protected. It could provide the resilience South Asia needs to prosper in an increasingly volatile world. While the outlook is grim, it is important to remember that well-designed and implemented interventions can make a difference if governments act fast.

    Mains question

    Q. South Asia possesses remarkable human capital, but it remains underutilized and has been further impacted by the COVID-19 pandemic. Discuss and suggest what can be done to address the issues?

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  • World Wildlife Day- 2023: 50 years of the CITES

    March 3 marks the 50th anniversary of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) in 1973.

    Why is World Wildlife Day marked?

    • March 3 marks the anniversary of CITES’ establishment.
    • CITES is considered a landmark agreement on conservation that focuses on ensuring the sustainability of endangered species.
    • In 2013, the United Nations General Assembly (UNGA) proclaimed March 3 as the UN World Wildlife Day to celebrate and raise awareness of protecting the world’s wild animals and plants.
    • This was as the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) was signed in 1973 on this day.

    What is the CITES?

    • CITES stands for the Convention on International Trade in Endangered Species of Wild Fauna and Flora.
    • It is as an international agreement aimed at ensuring “that international trade in specimens of wild animals and plants does not threaten their survival”.
    • It was drafted after a resolution was adopted at a meeting of the members of the International Union for Conservation of Nature (IUCN) in 1963.
    • It entered into force on July 1, 1975, and now has 183 parties.
    • The Convention is legally binding on the Parties in the sense that they are committed to implementing it; however, it does not take the place of national laws.
    • India is a signatory to and has also ratified CITES convention in 1976.

    CITES Appendices

    • CITES works by subjecting international trade in specimens of selected species to certain controls.
    • All import, export, re-exports and introduction from the sea of species covered by the convention has to be authorized through a licensing system.
    • It has three appendices:
    1. Appendix I includes species threatened with extinction. Trade-in specimens of these species are permitted only in exceptional circumstances.
    2. Appendix II provides a lower level of protection.
    3. Appendix III contains species that are protected in at least one country, which has asked other CITES Parties for assistance in controlling trade.

    A critical assessment

    • Having wildlife allowed to be traded further legitimises their movement and increases the possibility of their illegal trade.
    • Nearly two-thirds of cases, CITES protections lag after a species is determined to be threatened by international trade a/c to NatGeo.
    • For example, while pangolins were finally added to Appendix I in 2017, an estimated million were trafficked between 2000 and 2013.
    • Its laxity has been questioned, on matters such as the ivory trade being allowed at times despite the convention banning it in 1989.

    Conclusion

    • CITES needs to evolve to address new challenges and work more closely with other international agreements and initiatives.
    • There is a need of continued efforts to protect wildlife and biodiversity and the need for international cooperation and collaboration to achieve this goal.

     

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  • What is the Expected Credit Loss (ECL) regime?

    The Reserve Bank of India is moving closer towards ring-fencing the banking system from credit losses as it proposes to move to provision on the principles of ‘expected losses’ from ‘incurred losses. ‘

    What is a Loan-Loss Provision?

    • The RBI defines a loan loss provision as an expense that banks set aside for defaulted loans.
    • Banks set aside a portion of the expected loan repayments from all loans in their portfolio to cover the losses either completely or partially.
    • In the event of a loss, instead of taking a loss in its cash flows, the bank can use its loan loss reserves to cover the loss.
    • The level of loan loss provision is determined based on the level expected to protect the safety and soundness of the bank.

    What is Expected Credit Loss (ECL) regime?

    • The Expected Credit Loss (ECL) regime is a new accounting standard that was introduced by the International Financial Reporting Standards (IFRS) in response to the global financial crisis of 2008.
    • The ECL regime requires banks and other financial institutions to estimate and report the expected losses from their loan portfolios over the lifetime of the loans.
    • Under the ECL regime, financial institutions must assess the credit risk associated with each loan and estimate the expected losses that will result from default or other credit events.
    • These expected losses must be recognized in the financial institution’s accounts and reported to investors and other stakeholders.
    • Under this practice, a bank is required to estimate expected credit losses based on forward-looking estimations rather than wait for credit losses to be actually incurred before making corresponding loss provisions.

    Benefits of the ECL regime

    • ECL will result in excess provisions as compared to a shortfall in provisions, as seen in the incurred loss approach.
    • It will further enhance the resilience of the banking system in line with globally accepted norms.

    Issues with this regime

    • It requires banks to provide for losses that have already occurred or been incurred.
    • The delay in recognizing loan losses resulted in banks having to make higher levels of provisions which affected the bank’s capital.
    • This affected banks’ resilience and posed systemic risks.
    • The delays in recognizing loan losses overstated the income generated by the banks, which, coupled with dividend payouts, impacted their capital base.

     

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