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GS Paper: GS3

  • Species in news: Assam keelback snake

    More than a century after it was first seen, the Assam keelback — a snake species endemic to the region — was rediscovered in 2018 at the Poba Reserve Forest (RF) by a team from Wildlife Institute of India (WII).

    Try this question from CSP 2018:

    Q.In which one of the following State Pakhui Wildlife Sanctuary is located?

    (a) Arunachal Pradesh (b) Manipur (c) Meghalaya (d) Nagaland

    Assam Keelback Snake

    • The species is small — about 60 cm long, brownish, with a patterned belly.
    • This particular keelback does not belong to the generalized keelback snake of India but is rather a unique genus (Herpetoreas).
    • It was discovered 129 years ago by Samuel Edward Peel, a British tea planter based in Upper Assam.
    • The snake’s ‘lost’ status has a lot to do with the habitat it occupies — in this case, a lowland evergreen forest.
    • These forests have been selectively degraded during the last 100 years: tea plantations have been made, selective logging has taken place, and many other activities such as oil exploration and coal mining.

    Is the snake under threat?

    • Most snakes and other reptiles are categorised as ‘data deficient’ in the IUCN list.
    • There is practically no information available about it and it is difficult to determine its status.

  • Species in news: Globba Andersonii Plant

    A team of researchers have “rediscovered” a rare species called Globba andersonii from the Sikkim Himalayas near the Teesta River valley region after a gap of nearly 136 years.

    Try this question from CSP 2016:

    Q.With reference to ‘Red Sanders’, sometimes seen in the news, consider the following statements:

    1. It is a tree species found in a part of South India.
    2. It is one of the most important trees in the tropical rain forest areas of South India.

    Which of the above statements is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

    Globba Andersonii

    IUCN status: Critically Endangered

    • Globba andersonii is characterised by white flowers, non-appendaged anthers (the part of a stamen that contains the pollen) and a “yellowish lip”.
    • The plant, known commonly as ‘dancing ladies’ or ‘swan flowers’ was thought to have been extinct until its “re-collection”, for the first time since 1875.
    • The earliest records of the collection of this plant were dated between the period 1862-70 when it was collected by Scottish botanist Thomas Anderson from Sikkim and Darjeeling.
    • Then, in 1875, the British botanist Sir George King, had collected this taxon from the Sikkim Himalayas.

  • Why spending on infrastructure matters

    Spending on infrastructure can help kickstart the economy. This article highlights the importance of spending on infrastructure and suggests ways to find resources.

    Gloomy prospects for Indian economy

    • The IMF estimates the global economy to contract by -4.9 per cent this year.
    • It could still contract should the virus not recede in the latter half of 2020.
    • As for the Indian economy, growth has been decelerating for the past eight quarters.
    • Indications by the RBI suggest that growth is contracting for the first time in four decades.
    •  We must address the elephant in the room — the need to further aid a demand recovery as the economy begins to reopen.

    Components of Indias growth

    • Growth in the Indian economy has been dominated by the following components respectively-
    • 1) Consumption.
    • 2) It is followed by investments.
    • 3) Government expenditure.
    • 4) Net exports.
    • However, consumption and investment demand have been subdued for the past few quarters, dragging down overall growth.
    • Keynesian theory suggests that for aggregate demand to increase, at least one of the components of GDP needs to expand.

    Declining consumption demand

    • These two components were perhaps casualties of a sharp deceleration in credit supply.
    •  The IL&FS debacle in September 2018 only made matters worse.
    • The NBFC sector, suffered from funding crunches leading to a further squeeze in credit supply.
    • Freeze in credit supply impacted consumption demand.
    • This deceleration is likely to exacerbate going forward.

    Declining rate of investment

    • Broad-based utilisation levels, as represented by the RBI, dropped to 68.6 per cent in Q3FY20.
    • This is well below the 75 per cent benchmark for new capacity addition, implying suboptimal levels of fresh investments.
    • A higher rate of investments is essential for sustainable economic growth.
    • The deteriorating economic scenario and increasing levels of debt with rating downgrades for industries are likely to aggravate existing problems.

    Importance of expenditure on spending on infrastructure

    • Government expenditure is the only exogenously determined element in a Keynesian framework.
    • The positive push required to aid a demand recovery has to come through the government.
    • However, with sparse resources that India has, we must deploy funds that yield a higher return.
    • One key area that can provide the necessary support is infrastructure investment.
    • A study by S&P Global estimates 1 per cent of GDP spend on infrastructure can boost real growth by 2 per cent while creating 1.3 million direct jobs.
    • Historically, countries have used infrastructure to provide counter-cyclical support to the economy.
    • Notably, infrastructure has strong links to growth and with both supply and demand-side features that help generate employment and long-term assets.
    • India already has an upper hand here.
    • Front-loading key projects with greater visibility from the recently announced National Infrastructure Pipeline (NIP) could aid in a quicker recovery.

    Special infrastructure bond

    •  India already has several institutions for infrastructure development purposes from the likes of IIFCL, IRFC to more recently NIIF.
    • Taking a cue from China, floating special infrastructure bonds through this organisation to accelerate the funding of the NIP could aid a speedier recovery.
    • Further, taking a page from the New Deal and its Reconstruction Finance Corporation, this institution’s ability for greater leverage can be used to make amends to our credit channels.
    • This ability could also be used for the development of state government and urban local body bond markets.
    • This could help businesses and bankers overcome risk aversion and bring back trust in the system while financing new paths for growth.

    Consider the question “Highlight the role of consumption and investment as the two largest contributors to India’s growth and explain how spending on the infrastructure could help revive the economy hit hard by the pandemic”

    Conclusion

    The exogenous component in the form of spending by the government could step-in in a greater way, perhaps because, it is the only one that can.

  • PM Formalization of Micro Food Processing Enterprises (PM FME) Scheme

    The Ministry for Food Processing Industries (MoFPI) has launched the PM Formalization of Micro Food Processing Enterprises (PM FME) as a part of “Atmanirbhar Bharat Abhiyan”.

    Practice question for mains:

    Q.What is the PM FME Scheme? Discuss its potential to neutralize various challenges faced by India’s unorganized food industries.

    PM FME Scheme

    • It aims to provide financial, technical and business support for upgradation of existing micro food processing enterprises.
    • It is a centrally sponsored scheme to be implemented over a period of five years from 2020-21 to 2024-25 with an outlay of Rs 10,000 crore.
    • The expenditure under the scheme would to be shared in 60:40 ratios between Central and State Governments, in 90:10 ratios with NE and the Himalayan States, 60:40 ratio with UTs with the legislature and 100% by Centre for other UTs.

    Features of the scheme

    • The Scheme adopts One District One Product (ODODP) approach to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products.
    • The States would identify food product for a district keeping in view the existing clusters and availability of raw material.
    • The ODOP product could be a perishable produce based product or cereal-based products or a food product widely produced in a district and their allied sectors.
    • An illustrative list of such products includes mango, potato, litchi, tomato, tapioca, kinnu, bhujia, petha, papad, pickle, millet-based products, fisheries, poultry, meat as well as animal feed among others.
    • The Scheme also place focus on waste to wealth products, minor forest products and Aspirational Districts.

    Credit facility provided

    • Existing Individual micro food processing units desirous of upgradation of their unit can avail credit-linked capital subsidy @35% of the eligible project cost with a maximum ceiling of Rs.10 lakh per unit.
    • Seed capital @ Rs. 40,000/- per SHG member would be provided for working capital and purchase of small tools.
    • FPOs/ SHGs/ producer cooperatives would be provided a credit-linked grant of 35% for capital investment along the value chain.
    • Support for marketing & branding would be provided to develop brands for micro-units and groups with 50% grant at State or regional level which could benefit a large number of micro-units in clusters.

    Why need such a scheme?

    • The unorganized food processing sector comprising nearly 25 lakh units contribute to 74% of employment in the food processing sector.
    • Nearly 66% of these units are located in rural areas and about 80% of them are family-based enterprises supporting livelihood rural household and minimizing their migration to urban areas.

    Challenges faced

    • The unorganised food processing sector faces a number of challenges which limit their performance and their growth.
    • These challenges include lack of access to modern technology & equipment, training, access institutional credit, lack of basic awareness on quality control of products; and lack of branding & marketing skills etc.
    • Owing to these challenges; the unorganised food processing sector contributes much less in terms of value addition and output despite its huge potential.

  • Gold Nanoparticles and their applications

    Indian researchers have successfully synthesized gold nanoparticles (GNPs) using psychrotolerant Antarctic bacteria through a non-toxic, low-cost, and eco-friendly way.

    Nanotechnology is a pathbreaking technology which can create many new materials and devices with a wide range of applications, such as in nanomedicine, nanoelectronics etc.   GNPs are another distinct development.

    What are Gold Nanoparticles?

    • Metallic NPs have been efficiently exploited for biomedical applications and among them, GNPs are found to be effective in biomedical research.
    • And NPs are those materials that are at least one dimension smaller than 100 nanometers.
    • NPs have a high surface-to-volume ratio and they can provide the tremendous driving force for diffusion, especially at elevated temperatures.
    • GNPs are melted at much lower temperatures (300 °C) than bulk gold (1064 °C).
    • NPs have been found to impart various desirable properties to different day-to-day products.
    • For example, GNPs are found to have greater solar radiation absorbing ability than the conventional bulk gold, which makes them a better candidate for use in the photovoltaic cell manufacturing industry.

    Properties of GNP

    1) Biomedical

    • Genotoxicity describes the property of a chemical agent that is capable of damaging the genetic information of DNA and thus causing the mutation of the cell, which can lead to cancer.
    • The study revealed the genotoxic effect of GNPs on a sulphate reducing bacteria (SRB).
    • These GNPs can be used as composite therapeutic agent clinical trials, especially in anti-cancer, anti-viral, anti-diabetic, and cholesterol-lowering drugs.

    2) Optical

    • GNPs have unique optical properties too. For example, particles above 100 nm show blue or violet colour in the water, while the colour becomes wine red in 100 nm gold colloidal particles.
    • They can thus be used for therapeutic imaging.

    3) Electronics

    • GNPs are also found to be useful in the electronics industry.
    • Scientists have constructed a transistor known as NOMFET (Nanoparticles Organic Memory Field-Effect Transistor) by embedding GNPs in a porous manganese oxide.
    • NOMFETs can mimic the feature of the human synapse known as plasticity or the variation of the speed and strength of the signal going from neuron to neuron.
    • These novel transistors can now facilitate better recreation of certain types of human cognitive processes, such as recognition and image processing and have their application in AI.

  • Kholongchhu Hydel Project

    India and Bhutan took a major step forward for the construction of the 600 MW Kholongchhu project.

    Try this question from CSP 2019:

    What is common to the places known as Aliyar, Isapur and Kangsabati?

    (a) Recently discovered uranium deposits

    (b) Tropical rain forests

    (c) Underground cave systems

    (d) Water reservoirs

    Kholongchhu Hydel Project

    • The Kholongchhu project is regarded as a “milestone” in the India-Bhutan partnership, under which four hydropower projects have been built in the last 30 years totalling a capacity of 2,100 MW.
    • It is one of four additional projects agreed to in 2008, as a part of India’s commitment to helping Bhutan create a total 10,000 MW of installed capacity by 2020.
    • The project is located at the lower course of Kholongchhu just before its confluence with Drangmechu (Gongrichu) in Trashiyangtse District of Bhutan.
    • The GoI will provide, as a grant, the equity share of the Bhutanese DGPC in the JV Company.
    • Once the project is commissioned, the JV partners will run it for 30 years, called the concession period, after which the full ownership will transfer to the Bhutan government.

    Whats’ so special with the project?

    • It is the first hydropower joint venture project in Bhutan’s less developed eastern region of Trashiyangtse.
    • It is the first time an India-Bhutan hydropower project will be constructed as a 50:50 joint venture and not as a government-to-government agreement.

  • What is Gynandromorphism?

    Recently, a rare biological phenomenon called Gynandromorphism was observed in dragonflies at Kole wetlands of Kerala.

    Gynandromorphism is a core biology concept. We can expect a prelims question in a rare scenario.

    Try this question from CSP 2013:

    Q.Improper handling and storage of cereal grains and oilseeds result in the production of toxins known as aflatoxins which are not generally destroyed by normal cooking process. Aflatoxins are produced by

    (a) Bacteria (b) Protozoa (c) Moulds (d) Viruses

    Gynandromorphism

    • Gynandromorphs are individual animals that have both genetically male and female tissues and often have observable male and female characteristics.
    • They may be bilateral, appearing to divide down the middle into male and female sides, or they may be mosaic, with patches characteristic of one sex appearing in a body part characteristic of the other sex.
    • Gynandromorphs occur in insects, spiders, crustaceans, and other arthropods as well as in birds, but they are extremely rare, and discovering one in the field or in the laboratory is a major event.
    • Estimating how frequently they occur is difficult because they usually go unnoticed in species where sexual dimorphism is less pronounced.
    • Gynandromorphs have been reported in mosquitoes, fruit flies, and in other insects, but they are most dramatic in those butterfly species in which the male and female wing colours and patterns are dramatically different.

  • Governance of the commercial banks

    This article discusses the nitty-gritty of the recently released discussion paper by the RBI on governance. Governance in the commercial bank has been in the news following the failures of some banks.

    Discussion paper by RBI

    • Recently RBI released a discussion paper on ‘Governance in Commercial Banks in India’.
    • Recently there have been high-profile instances involving governance failures in certain banks.
    • These instances have called into question the adequacy of the existing legal regime for ensuring good governance in commercial banks.
    • Internationally, the question of governance norms in banks is treated differently given the complex nature of functions performed by banks in comparison to other businesses.
    • Functions of the banks make them critical for allocation of resources in the economy, protection of consumer interests and maintenance of financial stability.

    Objectives of the discussion paper

    • The stated objective of the discussion paper is to align the current regulatory framework on bank governance with global best practices.
    • Best practices include the guidelines issued by the Basel Committee on Banking Supervision and the Financial Stability Board.

    Current regulatory framework

    • To this end, RBI adopts international standards for bank governance into the general corporate governance framework in India.
    • This general governance framework comprises the Companies Act, 2013, and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Requirements, 2015.
    • These governance norms focus on the responsibilities of the board of directors, board structure and practices.
    • And it also includes aspects of risk management, internal audit, compliance, whistle-blowing, vigilance, disclosure and transparency.

    Issue of connection between management and owner

    • RBI also constituted an internal working group to review the extant regulatory guidelines relating to ownership and control in private sector banks.
    • This group is expected to submit its report by September 30, 2020.
    • But the assumption that deeper connections between the management and the owners necessarily lead to mismanagement needs to evaluated carefully and recalibrated to ensure balanced reforms.
    • The governance risks attributable to such connections might be relevant for government-owned banks as well.

    Key recommendations in the paper

    • (1) The majority of a commercial bank’s board must comprise of independent directors.
    • This is a standard higher than that prescribed under the Companies Act and the SEBI Regulations.
    • (2) The chairperson of the board must be an independent director.
    • (3) Chairpersons of crucial board committees (the audit committee, the risk management committee and the nomination and remuneration committee) must be independent directors who are not chairpersons of any other board committee.
    • (4) The tenures of non-promoter CEOs and WTDs should be limited to 15 years.

    Way forward

    • In order to make the reform effective, the appointment process for independent directors also needs to be re-evaluated to limit the role of controlling-shareholders.
    • The liability regime for directors on the boards of banking companies should also be revisited to balance the rights and liabilities of the directors.
    • The efficacy of implementation of norms as prescribed will depend on adequate enforcement.
    • The findings of the report of the working group have to be considered to formulate a comprehensive and effective governance framework for commercial banking in India.

    Consider the question “Given the complex nature of functions performed by the banks in comparison to other businesses subjecting them to stricter norms of governance is necessary. In light of this examine the adequacy of existing governance norms and suggest ways to improve them.”

    Conclusion

    RBI must exercise caution to ensure that the reforms balance the interests of all the stakeholders and do not come at the cost of discouraging investments and entrepreneurship in the Indian banking industry.

  • Why India is producing less and less oil?

    India’s crude oil production fell 7.1% in May 2020 compared to May 2019 on the back of low demand due to the Covid-19 pandemic.

    Practice question for mains:

    Q.Discuss the impact of Covid-19 pandemic on the global crude oil dynamics.

    Crude oil exploration in India

    • Crude oil production in India is dominated by two major state-owned exploration and production companies, ONGC and Oil India.
    • These companies are the key bidders for crude oil block auctions and end up acquiring most of the blocks that are put up for auction in India.

    Falling production

    • Domestic production of crude has been falling every year since FY 2012.
    • This has led to a steady climb in the proportion of imports in domestic crude oil consumption from 81.8% in 2012 to 87.6% in 2020.

    Why is production falling?

    • Most of India’s crude oil production comes from ageing wells that have become less productive over time.
    • A lack of new oil discoveries in India coupled with a long lead time to begin production from discovered wells has led to a steady decline in India’s crude oil production making dependency on imports.
    • The output of these ageing wells is declining faster than new wells can come up according to experts.
    • Domestic exploration companies are attempting to extend the life of currently operational wells.

    Why are there not more private players?

    • There has been a lack of interest in exploration and production in India from major private players, particularly those based abroad.
    • According to experts, this is because of long delays in the operationalization of production even after an oil block is allotted due to delays in approvals.
    • Some of the key approvals which are required to begin production include environmental clearances and approval by the Directorate General of Hydrocarbons after the allottee completes a seismic survey and creates a field development plan.

    What policy changes could help?

    • Existing public and private sector players have asked for reduced levies of oil production including oil cess, royalties, and profit petroleum especially when crude oil prices are below $45/barrel.
    • Experts say the requirement to pay royalties to the government at low crude prices can make it unviable for these companies to invest in further exploration and production.

    OALP could help

    • The government introduced the Open Acreage Licensing Programme (OALP) in 2019 to allow companies to carve out blocks that they are interested in and with lower royalties and no oil cess.
    • However, existing players are calling for a relaxation of royalties and oil cess on block allotted under previous policies.
    • The Chinese government offered a floor price to oil producers insulating them somewhat from any sharp falls in international crude prices.
    • This kind of policy at least allows for a company to have a fixed worst-case scenario for the sale of crude oil attracts more investment in exploration and production.

    Back2Basics: OALP

    • The OALP, a part of the government’s Hydrocarbon Exploration and Licensing Policy (HELP), gives exploration companies the option to select the exploration blocks on their own, without having to wait for the formal bid round from the Government.
    • The company then submits an application to the government, which puts that block up for bid.
    • OALP offers single license to explore conventional and unconventional oil and gas resources to propel investment in and provide operational flexibility to the investors.

  • New rules to regulate exotic animal trade

    The Environment Ministry’s wildlife division has introduced new rules to regulate the import and export of ‘exotic wildlife species’.

    Practice questions for mains:

    Q.What are Zoonotic Diseases? Discuss how the illicit trade in wildlife has resulted in the spread of zoonotic diseases of the scale of the ongoing COVID-19?

    Which exotic species are these new regulations talking about?

    • The Wildlife Crime Control Bureau is an organisation that is tasked with monitoring illegal trade.
    • The advisory says ‘exotic live species’ will cover animals under Appendices I, II and III of the Convention on International Trade in Endangered Species (CITES) of Wild Fauna and Flora.
    • It will not include species from the Schedules of the Wild Life (Protection) Act, 1972.

    What are the new rules?

    • Currently, it is the Directorate-General of Foreign Trade, Ministry of Commerce that oversees such trade.
    • Under the new rules, owners and possessors of such animals and birds must also register their stock with the Chief Wildlife Warden of their States.
    • Officials of the Wildlife Department will also prepare an inventory of such species and have the right to inspect the facilities of such traders to check if these plants and animals are being housed in inhumane conditions.
    • Additionally, stockists will have six months to declare their stock.

    Why such a move?

    • The illegal trade is estimated to generate revenues of up to $23 billion a year, a/c to FATF.
    • India continues to battle wildlife crime, with reports suggesting that many times such species are available for trade on online market places.

    Also read:

    Guidelines for Import of Exotic Species

    Back2Basics: 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:

    • Appendix I includes species threatened with extinction. Trade-in specimens of these species are permitted only in exceptional circumstances.
    • Appendix II provides a lower level of protection.
    • Appendix III contains species that are protected in at least one country, which has asked other CITES Parties for assistance in controlling trade.