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GS Paper: GS3

  • What is Project Seabird?

    Defence Minister has recently visited the Karwar Naval Base in Karnataka to inspect infrastructure development under Phase II of “Project Seabird”.

    Project Seabird

    • The largest naval infrastructure project for India, Project Seabird involves the creation of a naval base at Karwar on the west coast of India.
    • INS Kadamba is an Indian Navy base located near Karwar in Karnataka.
    • The first phase of construction of the base was code-named Project Seabird and was completed in 2005.
    • INS Kadamba is currently the third-largest Indian naval base and is expected to become the largest naval base in the eastern hemisphere after the completion of expansion Phase IIB.

    Why need such a base?

    • During the Indo-Pakistan War of 1971, the Indian Navy faced security challenges for its Western Fleet in Mumbai Harbour due to congestion in the shipping lanes from commercial shipping traffic, fishing boats and tourists.
    • At the end of the war, various options were considered on addressing these concerns
    • Upon completion, it will provide the Indian Navy with its largest naval base on the west coast and also the largest naval base east of the Suez Canal.
    • The Navy’s lone aircraft carrier INS Vikramaditya is based at Karwar.

  • Successful test-fire of Agni-Prime Missile

    A new generation nuclear-capable ballistic missile Agni-P (Prime) was successfully test-fired by the Defence Research and Development Organization (DRDO).

    Agni-Prime Missile

    • Agni-P is a new generation advanced variant of the Agni class of missiles.
    • It is a canisterised missile with a range capability between 1,000 and 2,000 km.
    • Many advanced technologies including composites, propulsion systems, innovative guidance and control mechanisms and state-of-the-art navigation systems have been introduced.
    • The missile strengthens India’s credible deterrence capabilities.

    What is the upgrade?

    • Agni-P has improved parameters including manoeuvring and accuracy.
    • Canisterisation of missiles reduces the time required to launch the missile while improving its storage and mobility.

    What are Agni Missiles?

    • Agni class of missiles are the mainstay of India’s nuclear launch capability which also includes the Prithvi short-range ballistic missiles, submarine-launched ballistic missiles and fighter aircraft.
    • The longest of the Agni series, Agni-V, an Inter-Continental Ballistic Missile (ICBM) with a range of over 5,000 km, has already been tested several times and validated for induction.

    An arsenal for peace

    • In the last few years, India has also operationalized its submarine-based nuclear launch capability, completing the nuclear triad.
    • This is especially important given India’s No-First-Use policy while reserving the right of massive retaliation if struck with nuclear weapons first.

  • [pib] India to become self-reliant in Phosphatic Fertilizers

    The Department of Fertilisers is ready with an Action Plan to make India Aatmanirbhar in Rock Phosphate, the key raw material of DAP and NPK Fertilizers.

    What are Phosphatic Fertilizers?

    • Phosphorus is the eleventh most abundant element on the earth. Commercial phosphate fertilizers are manufactured using phosphate rock.
    • Approximately two-thirds of the world’s phosphate resources are derived from sedimentary and marine phosphate rock deposits.
    • Ground rock phosphate has been used as a source of phosphorous for soils in the past.
    • However, due to the low concentration of phosphorous in this native material, high transportation costs, and small crop responses, the usage of rock phosphate has reduced considerably in agriculture.
    • On the other hand, the usage of phosphorous based fertilizers has grown significantly.

    Which are the most common Ph fertilizers?

    • The most commonly used phosphatic fertilizers are Diammonium Phosphate (DAP), Monoammonium Phosphate (MAP), NPKs, and SSP.
    • DAP is the world’s most widely used phosphorus fertilizer. It is popular due to its relatively high nutrient content and its excellent physical properties.
    • DAP is an excellent source of phosphorus (P) and nitrogen (N) for plant nutrition.
    • It provides the correct proportion of phosphorous and nitrogen for the farming of grains such as wheat, barley, fruits, and vegetables.
    • NPKs, also called compound fertilizers, are fertilizers that contain all three nutrients, nitrogen, phosphorus, and potassium in different proportions.

    Also read

    [pib] Nutrient Based Subsidy (NBS) for Phosphatic & Potassic (P&K) Fertilizers

    Why need Phosphorus?

    • Phosphorus is an essential nutrient required for plant growth. It helps in root development, plant maturation, and seed development.
    • If soils are deficient in phosphorus, food production becomes restricted, unless the nutrient is added in the form of fertilizers.
    • Hence, to increase food production, an adequate amount of phosphorus is required.
    • Along with nitrogen and potassium, phosphorus is one of the most important elements for plant life.
    • Soil gets depleted of phosphorus due to several reasons including being washed away by rain. Therefore, modern farming is reliant on the use of phosphorus-based fertilizers.

    Consumption in India

    • Rock Phosphate is the key raw material for DAP and NPK fertilisers and India is 90% dependent on imports.
    • Volatility in international prices affects the domestic prices of fertilisers and hinders the progress and development of the agriculture sector in the country.

    Answer this PYQ in the comment box:

    Q.What are the advantages of fertigation in agriculture? (CSP 2020)

    1.Controlling the alkalinity of irrigation water is possible.
    2. Efficient application of Rock Phosphate and all other phosphatic fertilizers is possible.
    3. Increased availability of nutrients to plants is possible.
    4. Reduction in the leaching of chemical nutrients is possible.

    Select the correct answer using the code given below:
    (a) 1, 2 and 3 only

    (b) 1,2 and 4 only

    (c) 1,3 and 4 only

    (d) 2, 3 and 4 only

  • Fighting hunger needs fighting climate change

    The article suggests pathways to achieve SDG-2 by the adoption of climate-friendly agriculture practices.

    Food and SDG

    • Food is a common thread linking all 17 UN Sustainable Development Goals (SDGs) and critical to achieving overall goals within the timeframe.
    • NITI Aayog recently released the SDG India Index 2020-21, highlighting the national and states’ progress on SDGs.
    • The report states that 34.7% children aged under five in India are stunted.
    • 40.5% of children between 6-59 months are anaemic.
    • 50.3% of pregnant women between 15-49 years are anaemic.
    • India shares a quarter of the global hunger burden.
    • Four out of 10 children in India are not meeting their full human potential because of chronic undernutrition or stunting.
    • NFHS-5 shows many states have not fared well on nutrition indicators.
    • In addition to the malnutrition challenges, India’s food system faces negative consequences of the Green Revolution technologies.

    Pathways to follow in meeting the targets under SDG-2 (Zero Hunger)

    • Crop diversification especially in those areas where the existing practices are ecologically unsustainable should be promoted.
    • While Indian agriculture is a significant contributor to GHG emissions.
    • As per third Biennial Update Report submitted by Government of India to UNFCCC, agriculture sector contributes 14% of the total emissions.
    • Some of the climate-smart interventions like conservation agriculture, organic farming and agro-ecological approaches can effectively address the environmental concerns while ensuring food security and nutrition.
    • Crop-residue burning has become a huge problem in parts of the country.
    • This is mainly propelled by monoculture and a package of subsidies.
    • Conservation agriculture offers solutions to such problems with good agronomy and soil management such as zero-tillage or no-till farming, crop rotation, in-situ crop harvest residue management/mulching, etc, and industrial uses like baling and bio-fuel production.
    • Use of botanical pesticides, green-manuring, biological pest control, etc. are nature-friendly and such practices lead to eco-conservation.
    • The organic movement, fortunately, is catching up in Sikkim, Himachal Pradesh, and a few other states.
    • Modifying consumer behaviour forms an essential ingredient to transform Indian food systems and correlate positively with crop and diet diversity.
    • POSHAN Abhiyaan, India’s national nutrition mission, can play an effective role in addressing the issues of persistent malnutrition.
    • According to FAO estimates, 40% of the food produced in India is either lost or wasted in every stage of supply chain.
    • Winning the fight against food loss and waste can save India $61 billion in 2050 through increased industry profitability and reduced food insecurity, as well as reduced GHG emissions, water usage, and environmental degradation.
    • Shifting towards a circular economy can enable India progress towards the SDGs including halving food waste by 2030 and improving resource efficiency.

    Conclusion

    India’s success is essential to achieve the planetary goal of Zero Hunger. There is a need for transformation towards sustainable, nutritious and resilient food systems to achieve the goal of zero hunger.

    Source:-

    https://www.financialexpress.com/opinion/fighting-hunger-needs-fighting-climate-change/2279369/

  • Digital Millennium Copyright Act

    Union Minister for Electronics and Information Technology was locked out of his Twitter account for an hour allegedly over a notice received for violation of the Digital Millennium Copyright Act (DMCA).

    Why such a move by Twitter?

    • The DMCA oversees the implementation of two 1996 treaties signed by World Intellectual Property Organization (WIPO) member nations.

    What is the DMCA?

    • The Digital Millennium Copyright Act, or DMCA, is a 1998 law passed in the US and is among the world’s first laws recognizing intellectual property on the internet.
    • The law oversees the implementation of the two treaties signed and agreed upon by member nations of the World Intellectual Property Organization (WIPO) in 1996.
    • WIPO members had then agreed upon two treaties, namely the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.
    • The said protection, accorded by each member state, must not be any less in any way than the one being given to a domestic copyright holder.
    • Further, it also obligates those signatories to the treaty to ensure ways to prevent circumvention of the technical measures used to protect copyrighted work.
    • It also provides the necessary international legal protection to digital content.

    What is WIPO and how does it ensure the protection of content on the internet?

    • The rapid commercialization of the internet in the late 1990s started with static advertisement panels being displayed on the internet.
    • It became important for website owners to get the user to spend more time on their webpage.
    • For this, fresh content was generated by creators and shared over the Internet.
    • The problem started when the content would be copied by unscrupulous websites or users, who did not generate content on their own.
    • Further, as the Internet expanded worldwide, websites from countries other than the one where the content originated, also started to copy the unique content generated by the websites.
    • To avoid this and bring to task the unauthorized copiers, the members of WIPO, which was established in 1967, also agreed to extend the copyright and intellectual property protection to digital content.
    • As of date, 193 nations across the world, including India, are members of WIPO.

    Who can generate a DMCA notice and how are they sent to companies or websites?

    • Any content creator of any form, who believes that their original content has been copied by the user or a website without authorization can file an application citing their intellectual property has been stolen or violated.
    • Users can either approach the website on which the content has been hosted, or third-party service providers like DMCA.com, which utilize a team of experts to help take down the stolen content for a small fee.
    • In the case of social media intermediaries like Facebook, Instagram or Twitter, content creators can directly approach the platform with proof of them being original creators.
    • Since these companies operate in nations that are signatories to the WIPO treaty, they are obligated to remove the said content if they receive a valid and legal DMCA takedown notice.
    • Platforms, however, also give the other users against whom allegations of content cheating have been made, a chance to reply to the DMCA notice by filing a counter-notice.
    • The platform shall then decide which party is telling the truth and shall accordingly, either restore the content or keep it hidden.

  • MCA raises threshold of Small and Medium Companies

    The Ministry of Corporate Affairs has expanded the turnover and borrowing thresholds for Small and Medium-sized Companies (SMC), allowing a larger number of firms to benefit from reporting exemptions under accounting norms.

    What is the change?

    • The MCA has increased the turnover threshold for SMCs to Rs 250 crore from Rs 50 crore, and the borrowing threshold to Rs 50 crore from Rs 10 crore.
    • SMCs are permitted to avail a number of exemptions under the Company (Accounting Standards) Rule 2021 to reduce the complexity of regulatory filings for smaller firms.
    • Banks, financial institutions, insurance companies, and listed companies cannot be classified as SMCs.
    • Further, any company which is either the holding company or subsidiary of a company that is not an SMC cannot be classified as an SMC.

    What are the exemptions available to SMCs that are not available to other firms?

    • SMC are completely exempted from having to file cash flow statements and provide a segmental break up of their financial performance in mandatory filings.
    • SMCs can also avail partial reporting exemptions in areas including reporting on employee benefits obligations such as pensions.
    • SMCs are exempted from having to provide a detailed analysis of benefit obligations to employees, but are still required to provide actuarial assumptions used in valuing the company’s obligations to employees.
    • SMCs are also exempted from having to report diluted earnings per share in their filings.
    • Diluted earnings per share reflect the per-share earnings of a company assuming that all options to convert other securities into shares are exercised.

    Answer this PYQ in the comment box:

    Q. What is/ are the recent policy initiative(s) of the Government of India to promote the growth of the manufacturing sector?

    1. Setting up of National Investment and Manufacturing Zones.
    2. Providing the benefit of single window clearance.
    3. Establishing the Technology Acquisition and Development Fund.

    Select the correct answer using the codes given below:

    (a) 1 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

    How does this impact these firms?

    • Experts have noted that the move would promote ease of doing business for the firms that would now be included under the definition of SMC.
    • The Accounting Standards for SMC, which were notified in December 2006 and amended from time to time, are much simpler as compared to Indian Accounting Standards (Ind AS).
    • These accounting standards involve less complexity in their application, including the number of required disclosures being less onerous.
    • Ind AS standards are applied to larger firms and are largely similar to International Financial Reporting Standards (IFRS) used in most developed jurisdictions.

  • Skull found in China represents a new human species

    Scientists have announced that a skull discovered in northeast China represents a newly discovered human species they have named Homo longi, or “Dragon Man”.

    Answer this PYQ in the comment box:

    Q.The word ‘Denisovan’ is sometimes mentioned in media in reference to (CSP 2019):

    (a) fossils of a kind of dinosaurs

    (b) an early human species

    (c) a cave system found in North-East India.

    (d) a geological period in the history of Indian subcontinent

    Who is the “Dragon Man”, the latest Chinese discovery?

    • The cranium found in China has been dubbed the “Dragaon Man” or Homo longi, a name that has been derived from the Long Jiang or Dragon River in the Heilongjiang province of China where the city of Harbin is located.
    • The skull was reportedly discovered back in 1933, when a bridge was built over the Songhua River.
    • For thousands of years, the skull remained buried in sediments.
    • Because of the distinctive shape of the skull, which was found almost complete, some members of the team have suggested that it be declared a part of a new species of the genus Homo.
    • Significantly, the size of the skull, which has a considerable brain capacity, is comparable to that of modern humans and Neanderthals.

    Why is this discovery being considered significant?

    • For one, it brings new knowledge about the evolution of Homo sapiens.
    • It might help to bridge the gaps between our ancient ancestors called Homo erectus and us.
    • This knowledge is important because there is very little consensus in the scientific community about how different human species are related, and which species are our immediate ancestors.
    • Smithsonian for instance notes that some palaeontologists believe Homo heidelbergensis to be our immediate ancestors.
    • This species was discovered in 1908, and lived about 700,000 to 200,000 years ago in Europe and possibly China and some parts of Africa.

    Back2Basics: Species of Humans

    • Modern humans are the only human species that exist in the world today.
    • While the exact number of human species is a matter of debate, most scientists believe that there are at least 21 of them.

    As per the Smithsonian National Museum of Natural History, there are over 21 human species.  Major among these are:

    (1) Sahelanthropus tchadensis

    • Sahelanthropus tchadensis is believed to be the oldest member of the human family tree.
    • It lived about 7-6 million years ago somewhere around present-day Chad in Africa.
    • It had both ape-like and human-like features and was bipedalled, an ability that may have increased its chances of survival.

    (2) Homo erectus

    • Homo erectus lived about 1.89 million-110,000 years ago, in Northern, Eastern, and Southern Africa and Western and East Asia.
    • ‘Turkana Boy’ is the most complete fossil belonging to this species and is dated to be around 1.6 million years old.

    (3) Modern man

    • Homo neanderthalensis lived about 400,000-40,000 years ago and co-existed with Homo sapiens for a few thousand years.
    • They lived in Europe and in southwestern and central Asia.
    • Homo sapiens evolved about 300,000 years ago, and are found worldwide.

  • Species in news: Euphlyctis Kerala

    A new species of skittering frog has been identified from the surroundings of the Thattekkad bird sanctuary.

    Euphlyctis Kerala

    • The new species is named Euphlyctis Kerala in honor of the remarkable biodiversity of the State, which is also known for many endemic species of frogs.
    • The new species is known to be found in the freshwater bodies of the foothills of the Western Ghats, south of the Palakkad Gap.
    • Although multiple skittering frogs have been described from India for almost two centuries (since 1799), the taxonomic mess within this group created a lot of confusion due to “morphological character crypticity”.
    • Members of the genus Euphlyctis (skittering frogs) have their distribution range from Arabian Peninsula, Pakistan, India, Nepal, Sri Lanka, Myanmar, and Thailand.
    • As of now, Kerala is known to have 180 species of frogs and there could be many more new species awaiting formal descriptions.

  • Where is the Indian rupee headed?

    The article explains the factors affecting the Indian rupee’s value against the dollar in implications of change in value for the Indian economy.

    Factor’s affecting rupee’s value

    • First, India’s foreign exchange reserves need to be considered, which have been increasing quite rapidly.
    • Second, there are daily fluctuations caused by foreign portfolio investment (FPI) flows.
    • Third, there is the external factor of the dollar, when the US currency strengthens against the euro, the rupee tends to decline and vice-versa.
    • Fourth, there is the concept of the real effective exchange rate (REER), a construct of economists in which relative inflation comes into play.
    • If inflation in India is higher than in countries associated with its export basket of currencies, then the rupee is overvalued and will correct through depreciation.
    • Fifth, at what stage will the RBI intervene by buying or selling dollars to stabilize the Indian currency also matters.

    Let’s look at some of these factors in detail.

    Impact of the U.S. economy and Fed

    • The dollar is driven by the US economy as well as its Federal Reserve’s policies.
    • The Fed’s recent indication that it would raise its policy rate of funds in the years ahead was enough to strengthen the dollar and weaken the rupee.  As an increase in US rates could see global investor money flocking back to the US, the dollar gained in relative value.
    • The dollar should logically be strengthening, given improving US growth, now reinforced by the Fed.

    Inflation factor

    • The inflation factor, however, has been curious.
    • Indian inflation will be high in India and hence also the rupee’s REER.
    • To the extent the market understands this concept and uses it for valuation, it should be pushing the rupee downwards.
    • But the pressure will be less this time as global inflation is also being raised by rising commodity prices.
    • Indian inflation may not be so much higher as to warrant a deep depreciation.

    Increase in Forex reserves

    • An increase in forex reserves is an indication that India is getting in more dollars than we are spending.
    • This also means that our combined current and capital accounts are in surplus zone.
    • However, India’s current account will go into a deficit this year, as imports will be greater than exports, but will not be very high. Maybe 0.5-1% of GDP.
    • The capital account can get tricky.
    • Inward foreign direct investment was high in 2020-21.
    • At $60 billion in equity and $80 billion overall, it was one of the world’s highest.
    • Therefore, capital flows should remain strong.
    • External commercial borrowings could slow down amid weak investment within India.
    • So the fundamentals suggest that the rupee should be stable, with a tilt towards depreciation.

    The RBI intervention

    • The RBI’s surplus liquidity and accommodative stance have not worked in favour of the rupee.
    • In response to its April policy, when RBI affirmed its dovish stance, the rupee began falling on expectations that if RBI kept rates low at a time of high inflation and excessive market borrowing by the government, investors will potentially move out.
    • This pushed the rupee towards the 75 level against the dollar, but reverted with time as RBI kept infusing liquidity and managed the yield curve.
    •  In April, RBI bought $4.2 billion worth of the US currency.
    • Exports have grown smartly in the first two months of 2021-22, and at this stage, the central bank would not want to that trend by stalling the rupee’s depreciation.

    Conclusion

    Taking all these factors into account, one can foresee the rupee moving in the range of ₹74-75 to the dollar, unless there’s a shock of some sort, though none looks likely at present.

  • Microfinance institutions

    The microfinance institutions (MFI) faced several restrictions by RBI which were not applicable to banks, NBFC and small finance banks. This denied the MFIs level playing field. A recent Consultative document by the RBI frees MFIs from such restrictions. The article explains this in detail.

    Background of regulation of MFI’s  by RBI

    • RBI first allowed informal self-help groups to open savings accounts in banks and bank lending to these groups in 1991-92.
    • In 2000, RBI permitted all types of institutions to offer microcredit and bank loans extended to these institutions for on-lending were treated as part of the priority sector lending.
    • Beyond these, RBI was unwilling to bring in any regulations on the plea that as long as these are not deposit-taking institutions there is no need to regulate them. 
    • That was the stand of various RBI-appointed committees too, including the Vyas Committee of 2004.
    • Based on the Malegam Committee recommendations, RBI came out with detailed guidelines for microfinance institutions (not the microfinance sector) in 2011.
    • These guidelines introduced a new category of NBFCs, viz NBFC-MFIs (microfinance institutions).
    • It also set norms for income criteria for clients of MFIs, repayment period, borrower loan limits, interest rate norms and caps, limits on a number of lenders to a borrower and a host of other norms and criteria.

    How these norms created the issue of a level playing field?

    • After 2015-16, the entry of small finance banks, eight of which were MFIs, into the microfinance space started to create issues.
    • MFIs discovered to their dismay that while they had to adhere to a set of regulations, it was a free-for-all for non-MFIs (banks, SFBs and NBFCs).
    • The main issue was that non-MFIs need not adhere to the norm of number of lenders (two in the case of NBFC-MFIs) and per-borrower loan limits.
    • It prompted non-MFIs to target borrowers identified and nurtured by MFIs with higher loan amounts, leading to high levels of borrower indebtedness.
    • In addition, the interest rate cap (2.75 times the base rate declared quarterly by RBI) was squeezing the margins of small and medium MFIs, as none of them get loans from the biggest banks.

    Way forward

    • The recent Consultative Document by RBI frees MFIs from the restriction imposed by the 2011 regulations and gives them a level-playing field.
    • Another important feature for MFIs is that by doing away with the 50% income generation loans criteria and the repayment period norms.
    • RBI is facilitating credit flow into lifecycle needs like housing, water sanitation, education, health, renewable energy, etc, which are now as important as income generation.
    • On the interest rate front, initially, some upward correction could be there by medium and small MFIs based on their borrowing rates.
    • The document enhances the role for the regulator as the adoption of Board-approved policies to determine the norms of household indebtedness and to fix a transparent rate of interest by each institution and their implementation need a rigorous supervisory oversight

    Conclusion

    Providing a level playing field to the MFI is critical to their development, the document by RBI rightly does that. It will help in providing credit to those who remain outside the formal banking network.

    Source:

    https://www.financialexpress.com/opinion/unfettering-microfinance-recent-rbi-consultative-document-frees-mfis-from-shackles-imposed-by-2011-regulations/2277925/