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GS Paper: GS3

  • Bhadbhut Project

    The Gujarat government recently awarded the contract for a the Bhadbhut project in Bharuch, Gujarat. It has faced protests from local fishermen for its likely impact on fishing patterns, notably those of hilsa.

    Make a note of major dams in India along with the rivers, terrain, major wildlife sanctuaries and national parks incident to these rivers.

    What is the Bhadbhut Project?

    • It is planned to be a 1.7-km causeway-cum-weir barrage with 90 gates, across the river Narmada, 5 km from Bhadbhut village, and 25 km from the mouth of the river, where it flows into the Gulf of Khambhat.
    • The barrage will stop most of the excess water flowing out of the Sardar Sarovar Dam from reaching the sea and thus create a “sweet water lake” of 600 mcm (million cubic metres) on the river.
    • The barrage will also have a six-lane road that will connect the left and right banks of the river and provide shorten the land distance between two large industrial estates in Surat and Bharuch.
    • The project also aims to prevent flooding in years when rainfall is higher than normal.
    • Embankments 22 km long will be made and will extend upstream towards Bharuch, from either side of the river.
    • The project is part of the larger Kalpasar Project, which entails the construction of a 30-km dam across the Gulf of Khambhat between Bharuch and Bhavnagar districts.
    • The reservoir is meant to tap the waters of the Narmada, Mahisagar and Sabarmati.

    Why are fishermen upset?

    • The barrage is expected to interfere with the migration and breeding cycle of hilsa.
    • A marine fish, hilsa migrate upstream and arrives in the brackish water of the Narmada estuary near Bharuch for spawning usually during the monsoon months of July and August, and continue doing so till November.
    • Once the barrage is built, it is expected to block its natural entry.

    About Hilsa Fish

    IUCN status: Least Concerned

    • The Hilsa is a species of fish related to the herring, in the family Clupeidae.
    • It is a very popular and sought-after food fish in the Indian Subcontinent.
    • Though it’s a saltwater fish, it migrates to sweet waters.
    • It is the national fish of Bangladesh and state symbol in the Indian states of West Bengal and Tripura.
    • The fish contributes about 12% of the total fish production and about 1.15% of GDP in Bangladesh.

  • Death Valley records the highest temperature on Earth

    California’s Death Valley registered a temperature of 54.4 degrees Celsius or 129.9 degrees Fahrenheit on August 16, 2020, which, once verified, could be the hottest temperature ever recorded on Earth.

    Some years back, there was a question in the mains:

    Major hot deserts in the northern hemisphere are located between 20-30 degree north and on the western side of the continents. Why?

    Death Valley and its location

    • Death Valley is a desert valley in Eastern California, in the northern Mojave Desert, bordering the Great Basin Desert.
    • It is one of the hottest places on Earth, along with deserts in the Middle East and the Sahara.
    • The valley is extremely dry because it lies in the rain shadow of four major mountain ranges (including the Sierra Nevada and the Panamint Range).
    • Moisture moving inland from the Pacific Ocean must pass eastward over the mountains to reach Death Valley; as air masses are forced upward by each range, they cool and moisture condenses, to fall as rain or snow on the western slopes.
    • When the air masses reach Death Valley, most of the moisture has already been lost and there is little left to fall as precipitation.

    Key factors leading to its high temperature

    • Solar heating: The valley’s surface (consisting of soil, rocks, sand, etc.) undergoes intense solar heating because the air is clear and dry, and the land is dark and sparsely vegetated. This is especially noticeable in summer when the sun is nearly directly overhead.
    • Trapping of warm air: Warm air naturally rises and cools; in Death Valley, this air is subject to continual reheating as it is trapped by high, steep valley walls and recycled back to the valley floor.
    • Migration of warm air from other areas (advection): Warm desert regions adjacent to Death Valley, especially to the south and east, often heat air before it arrives in Death Valley.
    • Warm mountain winds: As winds are forced up and over mountains (e.g., the numerous ranges west of Death Valley), the winds can be warmed in several ways. The resulting dry, warm winds are known as foehn winds.

  • [pib] Partial Credit Guarantee Scheme (PCGS) 2.0

    As part of Aatmanirbhar Bharat Abhiyan, announced by the Government, the Partial Credit Guarantee Scheme (PCGS) 2.0   was launched to provide Portfolio Guarantee for purchase of Bonds or Commercial Papers (CPs) with a rating of AA and below issued by NBFCs/HFCs/ MFIs by Public Sector Banks (PSBs).

    Try this PYQ:

    When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen? (CSP 2015)

    (a) India’s GDP growth rate increases drastically

    (b) Foreign Institutional Investors may bring more capital into our country

    (c) Scheduled Commercial Banks may cut their lending rates

    (d) It may drastically reduce the liquidity to the banking system

    About Partial Credit Guarantee Scheme (PCGS)

    • Under the scheme, any PSB can purchase securities (minimum rating of ‘AA’) of financially-sound non-banking finance companies.
    • The objective is to address temporary asset-liability mismatches of otherwise solvent NBFCs/Housing finance companies (HFCs) without having to resort to distress sale of their assets to meet their commitments.
    • The government will provide a one-time, six months’ partial credit guarantee to public sector banks for first loss of up to 10%.
    • Also, these NBFCs/HFCs are mandated that the CRAR (capital to risk-weighted assets ratio) shall not go below the regulatory minimum while exercising of the option to buy back the assets.

    What is CRAR?

    • CRAR also known as Capital Adequacy Ratio (CAR) is the ratio of a bank’s capital to its risk.
    • CRAR is decided by central banks and bank regulators to prevent commercial banks from taking excess leverage and becoming insolvent in the process.
    • The Basel III norms stipulated a capital to risk-weighted assets of 8%.
    • In India, scheduled commercial banks are required to maintain a CAR of 9% while Indian public sector banks are emphasized to maintain a CAR of 12% as per RBI norms.
    • It is arrived at by dividing the capital of the bank with aggregated risk-weighted assets for credit risk, market risk, and operational risk.
    • RBI tracks CRAR of a bank to ensure that the bank can absorb a reasonable amount of loss and complies with statutory Capital requirements.
    • The higher the CRAR of a bank the better capitalized it is.

  • Economic crisis without culprit

    Contradictions in the present crisis

    • India registered negative economic growth in 1972-73, 1965-66 and 1957-58.
    • All these were drought years.
    • 1957-58 also registered a significant balance of payments (BOP) deterioration and 1979-80 witnessing the second global oil shock following the Iranian Revolution.
    • Farmers harvested a bumper rabi crop last year and public cereal stocks at 94.42 million tonnes as on July 1 were also 2.3 times the required level.
    • There’s no shortage today of food, forex or even savings.
    • Foreign exchange reserves were at an all-time high of $538.19 billion.
    • So, the real GDP decline of 5-10 per cent for 2020-21 would be the country’s first-ever not triggered by an agricultural or a BOP crisis.

    “Western style” demand slowdown in India

    • What India has been going through is a full-fledged recession bereft of consumption and investment demand.
    • Households have cut spending.
    • The same goes with businesses. Many have shut or are operating at a fraction of their capacity and pre-lockdown staff strength.
    • This demand-side uncertainty and the resulting economic contraction is something new to India.
    • Banks are also facing a problem of plenty.
    • While their deposits are up 11.1 per cent, the corresponding credit growth has been just 5.5 per cent.
    • At some point when all this reduced spending and investments leads to a further contraction of incomes, it is bound to reduce savings as well.

    Why the government is not spending?

    • Solution in such a situation is the spending by the government.
    • There are three probable reasons why government isn’t doing that.

    1.Optimism

    • Hope that once the worst of the pandemic is behind us, people will start spending and businesses, too, will spring back to life.
    • However, this assumes the economy wasn’t doing all that badly previously and that the lockdown hasn’t caused too much of permanent damage.
    • The truth is that growth had already slid to 3.9 per cent in 2019-20.

    2.State of Government finances

    • In 2007-08 global financial crisis, the Centre’s fiscal deficit was only 2.5 per cent of GDP, whereas it stood at 4.6 per cent in 2019-20.
    •  The space for a fiscal stimulus, in other words, is very limited compared to that time.

    3.Sustainability of debt

    •  Between 2007-08 and 2019-20, the Centre’s outstanding debt-GDP ratio has come down from 56.9 to 49.25 per cent.
    • So has general government debt, which includes the liabilities of states, from 74.6 to 69.8 per cent.
    • Economists such as Olivier Blanchard have shown that public debts are sustainable provided governments can borrow at rates below nominal GDP growth (i.e. GDP unadjusted for inflation).
    • The nominal GDP averaged 11.1 per cent during  2014-15 to 2018-19.
    • As against this, the weighted average interest rate on Central government securities ruled between 6.97 per cent in 2016-17 and 8.51 per cent in 2014-15.
    • Only with nominal GDP growth falling to 7.2 per cent in 2019-20, and most likely zero this fiscal, has the Blanchard debt sustainability formula come under threat.

    Way forward

    • Government can take lessons from the Vajpayee period when the weighted average cost of Central borrowings more than halved from 12.01 per cent in 1997-98 to 5.71 per cent in 2003-04.
    • In the last four months, yields on 10-year Indian government bonds have softened from 6.5 to 5.9 per cent and even more for states — from 7.9 to 6.4 per cent.
    •  Interest rates will fall further as banks have nobody to lend to.

    Consider the question “Examine how covid induced economic recession is different from the past recessions? What are the options with the government to deal with the situation?” 

    Conclusion

    Governments should borrow and spend. They need worry only about GDP growth, real and nominal.

    Sources: https://indianexpress.com/article/opinion/columns/a-crisis-without-villains-6557602/

  • Correcting the agri market

    The article analyses the highlights the importance of post harvest infrastructure for the better price realisation of agri-commodities. It also suggests the two areal which could help the farmers in this regard.

    Purpose of Agriculture Infrastructure Fund

    • Creating post-harvest physical infrastructure is as important as the changes in the legal framework (like the recent ordinances).
    • The recently announced Rs 1 lakh crore Agriculture Infrastructure Fund (AIF) will be used over the next four years.
    • This fund will be used to build post-harvest storage and processing facilities.
    • NABARD will steer this initiative in association with the Ministry of Agriculture and Farmers Welfare, largely anchored at FPOs.
    • The creation of the AIF presumes that there is already large demand for storage facilities and other post harvest infrastructure.

     Reforms in 2 areas which could help farmers get better price realisation

    1) Negotiable warehouse receipt

    • More and better storage facilities can help farmers avoid distress sellingimmediately after the harvest.
    • But small farmers cannot hold stocks for long as they have urgent cash needs to meet family expenditures.
    • Therefore, the value of the storage facilities at the FPO level could be enhanced by a negotiable warehouse receipt system.
    • FPOs can give an advance to farmers, say 75-80 per cent of the value of their produce at the current market price.

    How NABARD can play an important role

    • Since NABARD is also responsible for the creation of 10,000 more FPOs, it can create a package that will help these outfits realise better prices
    • FPOs will need large working capital to give advances to farmers against their produce as collateral.
    • NABARD can ensure that FPOs get their working capital at interest rates of 4 to 7 per cent.
    • Currently, most FPOs get capital from microfinance institutions at rates ranging from 18-22 per cent per annum which is not economically viable unless the off-season prices are substantially higher than the prices at harvest time.

    2)Improving Agri-futures markets

    • A vibrant futures market is a standard way of reducing risks in a market economy.
    • Several countries — be it China or the US — have agri-futures markets that are multiple times the size of those in India.

    Way forward

    • 1) NABARD  should devise a compulsory module that trains FPOs to use the negotiable warehouse receipt system and navigate the realm of agri-futures to hedge their market risks.
    • 2) Government agencies dealing in commodity markets — the FCI, NAFED, State Trading Corporation (STC) — should increase their participation in agri-futures.
    • That is how China deepened its agri-futures markets.
    • 3) The banks that give loans to FPOs and traders should also participate in commodity futures as “re-insurers” for the healthy growth of agri-markets.
    • 4)  Government policy has to be more stable and market friendly.
    • In the past, it has been too restrictive and unpredictable.

    Consider the question “Creating post-harvest physical infrastructure is as important as the changes in the legal framework. In light of this, highlight the importance of recently announced Agriculture Infrastructure Fund and suggest the measures to increase the price realisation of agri-products by farmers.” 

    Conclusion

    India needs to not only spatially integrate its agri-markets (one nation, one market) but also integrate them temporally — spot and futures markets have to converge. Only then will Indian farmers realise the best price for their produce and hedge market risks.

  • Expansion of the National Cadet Corps (NCC)

    In his I-Day speech, PM spoke about the expansion of the National Cadet Corps (NCC) in coastal and border districts of India.

    Try this question:

    Q.The Shekatkar Committee recommendations sometimes seen in the news are related to:

    a) Modernization of Railways b) Modernization of Defence c) Road Infrastructure d) Cashless Payments

    About NCC

    • The NCC, which was formed in 1948, has its roots to British era uniformed youth entities like University Corps or University Officer Training Corps.
    • It enrols cadets at the high school and college level and also awards certificates on completion of various phases.
    • Headed by a Director-General of three-star military rank, the NCC falls under the purview of MoD and is led by serving officers from the Armed forces at various hierarchical positions.
    • The NCC currently has 17 regional directorates which govern the NCC in units in various states or groups of states and union territories.
    • Each school and college units have Associate NCC Officers and cadets are also assigned various leadership roles in the form of cadet appointments.
    • NCC has a dual funding model where both the centre and states or union territories provide budgetary support.

    Training the cadets

    • The NCC cadets receive basic military training at various levels and also have academic curriculum basics related to Armed forces and their functioning.
    • Various training camps, adventure activities and military training camps are an important aspect of NCC training.
    • NCC cadets have played an important role over the years in relief efforts during various emergency situations.
    • During the ongoing pandemic, over 60,000 NCC cadets have been deployed for voluntary relief work in coordination with district and state authorities across the country.

    PM’s announcement

    • Expansion of NCC in the border and coastal area has been under consideration of the Ministry of Defence for quite some time.
    • PM took this I-Day to announce that from the 173 coastal and border districts, one lakh cadets, a third of them girls, will be trained.
    • Currently, the NCC has the strength of around 14 lakh cadets from Army, Navy and Air Force wings.
    • Border and coastal areas will get trained manpower to fight with disasters. Youth will acquire the required skills for careers in armed forces.

    Significance of expansion

    • In the coastal regions, where youth are already familiar with the sea, the training will increase interest in careers in Navy, Coast Guard and also Merchant shipping avenues.
    • In the border area, the trained cadets can play an important role in various contingencies and also in supporting roles to the Armed forces in various roles.

  • RBI’s Positive Pay system

    The new ‘Positive Pay’ mechanism was recently introduced by the Reserve Bank of India (RBI).

    Try this PYQ:

    With reference to digital payments, consider the following statements:

    1. BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
    2. While a chip-pin debit card has four factors authentication, BHIM app has only two factors of authentication.

    Which of the statements given above is/are correct? (CSP 2018)

    a) 1 only
    b) 2 only
    c) Both 1 and 2
    d) Neither 1 nor 2

    What is the move?

    • Issuers will be able to send all details to their bank, thereby ensuring faster clearance of cheques above Rs 50,000.
    • All cheques will be processed as per the information sent by the account holder at the time of issuance of cheques.
    • This will cover approximately 20 per cent of transactions by volume and 80 per cent by value.
    • It will make cheque payments safer and reduces instances of frauds.

    What is Positive Pay Mechanism?

    • Positive Pay is a fraud detection tool adopted by banks to protect customers against forged, altered or counterfeit cheques.
    • It crosses verifies all details of the cheque issued before funds are encashed by the beneficiary.
    • In case of a mismatch, the cheque is sent back to the issuer for examination.
    • By following such a system, a bank knows of a cheque being drawn by the customer even before it is deposited by the beneficiary into his/her account.

    How does the mechanism work?

    • Under Positive Pay feature, the issuer will first share the details of the issued cheque like cheque number, date, name of the payee, account number, amount and the likes through his/her net banking account.
    • Along with this, an image of the front and reverse side of the cheque is also required to be shared, before handing it over to the beneficiary.
    • When the beneficiary submits the cheque for encashment, the details are compared with those provided to the bank through Positive Pay.
    • If the details match, the cheque is honoured. However, in the case of mismatch, the cheque is referred to the issuer.
    • In this way, any cheque where any sort of fraud has happened cannot be cleared at all and hence, a depositor’s money can be protected.

  • In news: Mauritius Oil Spill

    A Japanese ship recently struck a coral reef resulting in an oil spill of over 1,000 tonnes into the Indian Ocean near Mauritius.

    Try this PYQ:

    Q.Recently, “oil zapper’’ was in the news. What is it? (CSP 2011)

    (a) It is an eco-friendly technology for the remediation of oily sludge and oil spills.

    (b) It is the latest technology developed for undersea oil exploration.

    (c) It is a genetically engineered high biofuel-yielding maize variety.

    (d) It is the latest technology to control the accidentally caused flames from oil wells.

    What caused the Mauritius oil spill?

    • A Japanese vessel struck a coral reef resulting in an oil spill of over 1,000 tonnes into the Indian Ocean.
    • The ship was carrying an estimated 4,000 tonnes of oil.
    • The accident had taken place near two environmentally protected marine ecosystems and the Blue Bay Marine Park Reserve, which is a wetland of international importance.

    How dangerous are oil spills?

    • Oil spills affect marine life by exposing them to harsh elements and destroying their sources of food and habitat.
    • Further, both birds and mammals can die from hypothermia as a result of oil spills.
    • For instance, oil destroys the insulating ability of fur-bearing mammals, such as sea otters.
    • It also decreases the water repellency of birds’ feathers, without which they lose their ability to repel cold water.

    Some major incidents

    • Some of the world’s largest oil spills include the Persian Gulf War oil spill of 1991 when more than 380 million gallons of oil was poured into the northern Persian Gulf by Iraq’s forces.
    • The 2010 Deepwater Horizon oil spill in the Gulf of Mexico is also considered to be among the largest known accidental oil spills in history.
    • Starting April 20, 2010, over 4 million barrels of oil flowed over a period of 87 days into the Gulf of Mexico.

    How is the oil spill cleaned?

    • There are a few ways to clean up oil spills including skimming, in situ burning and by releasing chemical dispersants.
    • Skimming involves removing oil from the sea surface before it is able to reach the sensitive areas along the coastline.
    • In situ burning means burning a particular patch of oil after it has concentrated in one area.
    • Releasing chemical dispersants helps break down oil into smaller droplets, making it easier for microbes to consume, and further break it down into less harmful compounds.
    • Natural actions in aquatic environments such as weathering, evaporation, emulsification, biodegradation and oxidation can also accelerate the recovery of an affected area. But these occur differently in freshwater and marine environments.

  • [pib] Sarabhai Crater

    The Indian Space Research Organization (ISRO) has named a crater captured by Chandrayaan 2 Orbiter after Vikram Sarabhai.

    Try this PYQ:

    What do you understand by the term Aitken Basin? (CSP 2012)

    (a) It is a desert in southern Chile which is known to be the only location on earth where no rainfall takes place

    (b) It is an impact crater on the far side of the Moon

    (c) It is a Pacific coast basin, which is known to house large amounts of oil and gas

    (d) It is a deep hypersaline anoxic basin where no aquatic animals are found

    Sarabhai Crater

    • “Sarabhai” Crater is named after Dr Vikram Sarabhai and around 250 to 300 kilometres east of this Crater is where the Apollo 17 and Luna 21 Missions had landed.
    • The crater captured in 3D images shows that the Crater has a depth of around 1.7 Kms taken from its raised rim and the slope of Crater walls is in between 25 to 35 degree.
    • These findings will help the Space Scientists to understand further the process of the lunar region filled with lava.

    Who was Vikram Sarabhai?

    • Sarabhai was an Indian physicist and astronomer who initiated space research and helped develop nuclear power in India.
    • He is internationally regarded as the Father of the Indian Space Program.
    • Known as the cradle of space sciences in India, the Physical Research Laboratory (PRL) was founded in 1947 by him. He was the founder of ISRO.
    • He started a project for the fabrication and launch of an Indian satellite.
    • As a result, the first Indian satellite, Aryabhata, was put in orbit in 1975 from a Russian cosmodrome.

  • Myth of the pristine forest

    • The COVID-19 pandemic has driven migrant workers back to their villages, including many situated inside or on the fringes of forested areas, including sanctuaries and national parks.
    • Even as they seek to remake livelihoods there, a new battle has emerged between the forest department (FD) and these local communities.
    • It pertains to the declaration of a Critical Wildlife Habitat (CWH), which a PIL in the Bombay High Court seeks to get the department to urgently notify.

    Try this question for mains:

    Forest dwellers are integral to the very survival and sustainability of the forest ecosystem. Analyse.

    What is Critical Wildlife Habitat (CHW)?

    • CWH is a provision under the Forest Rights Act, 2006 (FRA).
    • The Act primarily focuses on recognising the historically-denied rights of forest-dwellers to use and manage forests.
    • The CWH provision, however, is an attempt to assuage concerns of wildlife conservationists.
    • It allows for the possibility that in protected areas (PAs) — wildlife sanctuaries and national parks — these rights could be attenuated, and, if absolutely necessary, forest-dwellers could be relocated in the interest of wildlife conservation.

    Forest dwellers vs. Wildlife

    • Conservationists believe that wildlife needs absolutely “inviolate” areas — those devoid of humans and human activities.
    • Many others believe human-wildlife co-existence is generally possible and must be promoted if we are to have “socially just conservation”.

    Achieving balanced conservation: The FRA provisions

    • A careful reading of the CWH provisions in the FRA shows that it is open to both possibilities, as long as they are arrived at through a rigorous and participatory process.
    • It requires setting up a multi-disciplinary expert committee, including representatives from local communities.
    • It also requires determining — using “scientific and objective criteria” and consultative processes — whether, and wherein the PA, the exercise of forest rights will cause irreversible damages.
    • It then requires determining whether coexistence is possible through a modified set of rights or management practices.
    • Only if the multi-stakeholder expert committee agrees that co-existence or other reasonable options are not possible, should relocation be taken up, again with the informed consent of the concerned gram sabhas.
    • For any such process to commence, the Act requires that all forest rights under the FRA must first be recognised.

    Issues with the FRA

    (1) Concerns of eviction

    • Hardline conservationists took FRA as a great opportunity to complete its agenda of evicting forest-dwellers from PAs.
    • It has been observed that many villages were resettled when they had rights claims pending, others had their claims illegally rejected or incompletely granted, and several had not even applied to this controversy erupted.
    • However, there are settlements in some of these PAs, and of course, people in villages adjacent to all the PAs are likely to have customary rights.
    • In spite of the court ordering rapid completion of the rights recognition process, there has been almost no progress on this front.

    (2) Issues with expert committees

    • The constitution of the expert committees is faulty. They do not contain expert social scientists familiar with the area. Wildlife enthusiasts are sometimes substituted for experts in life sciences.
    • Many members have challenged the very constitutionality of the FRA, making a travesty of the idea of “objectivity” in the process.

    (3) Criteria judging the damages

    • The criteria being used by the committees to determine the threat of “irreversible damage” to wildlife are quite extreme and are not supported by any consensus even among ecologists.
    • There are no objective criteria decided yet by these committees.

    Conclusion

    • The FRA begins by recognising that forest dwellers “are integral to the very survival and sustainability of the forest ecosystem”.
    • In that context, the CWH provision should not be seen as simply a tool for evicting forest-dwellers to create so-called “inviolate” spaces.
    • It is an opportunity to rigorously and participatorily explore all avenues of co-existence.
    • Such co-existence is indeed possible. In general, forest-dwellers harbour both the knowledge and the attitudes needed for conservation.
    • Co-managing PAs is, therefore, the most effective and socially just long-term solution, and relocation should be seen as the absolute last resort.

    B2BASICS

    Forest Rights act