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GS Paper: GS3

  • [pib] Atmanirbhar Bharat Abhiyan (Self-reliant India Mission)

    The PM has announced the Atma-nirbhar Bharat Abhiyan (or Self-reliant India Mission) and said that in the days to come the government would unveil the details of an economic package — worth Rs 20 lakh crore or 10% of India’s GDP in 2019-20 — aimed towards achieving this mission.

    Try a question:

    ‘Doubling Farmer’s Income’ and ‘USD 5 trillion economy’  seems more like slogans today in wake of COVID pandemic. Comment on the statement with keeping in view the Atmanirbhar Bharat Abhiyan of the government.

    Atmanirbhar Bharat: With a special package

    • PM has announced a special economic package and gave a clarion call for Self-reliant India.
    • The package will provide a much-needed boost towards achieving self-reliance.
    • This package, taken together with earlier announcements by the government during COVID crisis and decisions taken by RBI, is to the tune of Rs 20 lakh crore, which is equivalent to almost 10% of India’s GDP.
    • The package will also focus on land, labour, liquidity and laws. It will cater to various sections including cottage industry, MSMEs, labourers, middle class, and industries, among others.

    Five pillars of a self-reliant India

    PM iterated that a self-reliant India will stand on five pillars viz.

    1) Economy, which brings in quantum jump and not incremental change

    2) Infrastructure, which should become the identity of India

    3) System, based on 21st-century technology-driven arrangements

    4) Vibrant Demography, which is our source of energy for a self-reliant India and

    5) Demand, whereby the strength of our demand and supply chain should be utilized to full capacity

    Is this a new package?

    • The PM did not give the details, but he specified that this calculation of Rs 20 lakh crore includes what the government has already announced and the steps taken by the RBI.
    • This means the total amount of additional money — that is over and above what the government would have spent even in the absence of a Covid crisis — will not be Rs 20 lakh crore.
    • It would be substantially less.

    Why?

    • That’s because the PM has included the actions of RBI, India’s central bank, as part of the government’s “fiscal” package, even though only the government controls the fiscal policy and not the RBI (which controls the ‘monetary’ policy).
    • Government expenditure and RBI’s actions are neither the same nor can they be added in this manner.

    What did the RBI provide earlier?

    • A rough estimate suggests that the RBI’s decisions have provided additional liquidity of Rs 5-6 lakh crore since the start of the Covid-19 crisis.
    • Add this to the Rs 1.7 lakh crore of the first fiscal relief package announced by the Centre on March 26. Together, the two already account for 40 per cent of the Rs 20-lakh crore package.
    • That leaves an effective amount of Rs 12 lakh crore.
    • However, if the government is including RBI’s liquidity decisions in the calculation, then the actual fresh spending by the government could be considerably lower than Rs 12 lakh crore.
    • That’s because RBI has been coming out with long term bond-buying operations (long term repo operation or LTRO, to infuse liquidity into the banking system) worth Rs 1 lakh crore at a time.
    • If for argument’s sake, RBI comes out with another LTRO of Rs 1 lakh crore, then the overall fiscal help falls by the same amount.

    Why shouldn’t RBI’s package be included in the overall package?

    • That is because direct expenditure by a government — either by way of wage subsidy or direct benefit transfer or any, immediately and necessarily stimulates the economy.
    • In other words, that money necessarily reaches the people — either as someone’s salary or someone’s purchase.
    • But credit easing by the RBI — that is, making more money available to the banks so that they can lend to the broader economy — is not like government expenditure.
    • That’s because, especially in times of crisis, banks may take that money from RBI and elsewhere and, instead of lending it, park it back with the RBI.

    Back2Basics: Long Term Repo Operations (LTRO)

    • The LTRO is a tool under which the RBI provides 1-3 year money to banks at the prevailing repo rate, accepting government securities with matching or higher tenure as the collateral.
    • Funds through LTRO are provided at the repo rate.
    • But usually, loans with higher maturity period (here like 1 year and 3 years) will have a higher interest rate compared to short term (repo) loans.
    • According to the RBI, the LTRO scheme will be in addition to the existing Liquidity Adjustment Facility (LAF) and the Marginal Standing Facility (MSF) operations.
    • The LAF and MSF are the two sets of liquidity operations by the RBI with the LAF having a number of tools like repo, reverse repo, term repo etc.

    What are Repo and Reverse Repo rates?

    • The repo rate is the rate at which the RBI lends money to the banking system (or banks) for short durations.
    • The reverse repo rate is the rate at which banks can park their money with the RBI.
    • With both kinds of the repo, which is short for repurchase agreement, transactions happen via bonds — one party sells bonds to the other with the promise to buy them back (or repurchase them) at a later specified date.
    • In a growing economy, commercial banks need funds to lend to businesses.
    • One source of funds for such lending is the money they receive from common people who maintain savings deposits with the banks. Repo is another option.

  • [pib] CHAMPIONS Portal for Indian MSMEs

    In a major initiative, Union Ministry of MSME has launched CHAMPIONS portal for assisting Indian MSMEs march into the big league as National and Global Champions.

    MSME sector has been hit badly by COVID. Initiatives like CHAMPIONS portal are crucial for this sector.

    CHAMPIONS Portal

    • ‘CHAMPIONS’ is a technology-driven Control Room-Cum-Management Information System.
    • The CHAMPIONS is an acronym for Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength
    • As the name suggests, the portal is basically for making the smaller units big by solving their grievances, encouraging, supporting, helping and handholding.
    • It is a technology-packed control room-cum-management information system.

    Three basic objectives of the CHAMPIONS

    1) How to help the MSMEs in this difficult situation in terms of finance, raw materials, labour, permissions, etc.

    2) How to help them capture new opportunities like manufacturing of medical accessories and products like PPEs, masks, etc.

    3) How to identify the sparks, i.e., the bright MSMEs who can not only withstand but can also become national and international champions.

    Technology imbibed in the portal

    • In addition to ICT tools including telephone, internet and video conference, the system is enabled by Artificial Intelligence, Data Analytics and Machine Learning.
    • It is also fully integrated on a real-time basis with GOI’s main grievances portal CPGRAMS and MSME Ministry’s own other web-based mechanisms.
    • The entire ICT architecture is created in house with the help of NIC in no cost. Similarly, the physical infrastructure is created in one of the ministry’s dumping rooms in record time.

     A hub and spoke model of network

    • As part of the system, a network of control rooms is created in a Hub & Spoke Model.
    • The Hub is situated in New Delhi in the Secretary MSME’s office.
    • The spokes will be in the States in various offices and institutions of Ministry.
    • As of now, 66 state-level control rooms are created as part of the system.

  • Shift in the US trade politics and opportunities for India

    The article focuses on the changes in the US trade politics fueled by the corona pandemic. Also there has been a growing demand for abandoning the WTO. So, amid this shift in the US politics, what are the opportunities for India at the global level?

    What went wrong with the WTO: The US point of view

    • Latest opposition to the WTO was expressed in a forceful article by a US senator, Josh Hawley.
    • In his opinion, corona pandemic expresses the hard truth about the modern global economy: it weakens American workers and empowers China’s rise.
    • So, what went wrong?
    • Capital and goods moved across borders easier than before but so did jobs. And too many jobs left America’s borders for elsewhere.
    • As factories closed, workers suffered, from small towns to the urban core.
    • So, he wants US to abandon the WTO.

    Rise of trade politics in the US

    • Under Trump, the Republican Party has turned from the champion to a critic of free trade.
    • The Democratic Party, which embraced globalisation since the early 1990s, has seen the erosion of working-class support.
    • Elections this year could reveal if the shifting alignments on trade are now cast in stone or if anti-trade sentiment in America is deep and wide.

    What alternatives are suggested by the senator?

    • In replacing the WTO, Hawley suggests the following two measures-
    • 1) The United States must seek new arrangements and new rules, in concert with other free nations, to restore America’s economic sovereignty.
    • 2) This, in turn, involves building a new network of trusted friends and partners to resist Chinese economic imperialism.

    How this matters for India?

    • India will have to take a fresh look at the global economy battered by the coronavirus.
    • India should pay close attention to Hawley’s theme on working with “trusted friends and partners” to restructure international trade.
    • Hawley is not alone in articulating this view.
    • Reuters reported from Washington that the Trump Administration is “turbocharging” an initiative to rearrange the global supply chains currently centered on China.
    • This rearrangement of the global supply chain offers an opportunity for India to lead the future global supply chains.

    Consider the question, “Critically analyse the opportunities presented to India by the changes in trade politics in the US”.

    Conclusion

    Hobbled as it was by shaky political coalitions and preoccupied by multiple domestic challenges, India in the mid-1990s struggled to cope with the profound changes in the global economic order. As the world trade system arrives at a contingent moment a quarter of a century later, India is hopefully better prepared.

  • Pokhran-II nuclear tests

    Yesterday, May 11 was celebrated as the National Technology Day. It marks the day on which India successfully test-fired its first nuclear bombs in 1998.

    Practice question for mains

    Q. India’s nuclear policy of ‘No First Use’ needs a revamp. Examine.

    India and nuclear weapons

    • India is currently among eight countries in the world that have a publicly known nuclear weapons program.
    • At the time of our independence, leaders were opposed to fully embracing nuclear weapons.
    • Just two years before in 1945, the world had witnessed the horrific nuclear bombings of Hiroshima and Nagasaki.
    • Mahatma Gandhi called the use of nuclear weapons morally unacceptable.

    Why India did equip itself with nuclear arms?

    • Then PM Jawaharlal Nehru was sceptical but kept the door open for future consideration.
    • This future beckoned early, as India’s defeat in the 1962 Sino-Indian War gave rise to legitimate fears about national security.
    • Then in 1974, India conducted its first nuclear test, codenamed “Smiling Buddha”, at Pokhran in Rajasthan.
    • Then-Prime Minister Indira Gandhi called the test a peaceful nuclear explosion.
    • India demonstrated to the world that the country could defend itself in an extreme situation and chose not to immediately weaponize the nuclear device it tested at Pokhran.

     The Pokhran II tests

    • India’s fence-sitting finally ended when it detonated another device in 1998, again at Pokhran.
    • Assigned the code name Operation Shakti, the mission was initiated on May 11, 1998.
    • The tests consisted of 5 detonations, the first being a fusion bomb while the remaining four were fission bombs.
    • One fusion and two fission bombs were tested on May 11, and two more fission bombs on May 13.
    • With the tests, India achieved its objective of building fission and thermonuclear weapons with yields up to 200 kilotons.

    Aftermath

    • After Pokhran-II, Vajpayee had declared India a nuclear state — then the sixth country in the world to join this league.
    • Unlike in 1974, India had this time chosen to actively develop its nuclear capabilities, and the tests followed economic sanctions by the United States and Japan. The sanctions were later lifted.

    Back2Basics: India’s nuclear programme

    • India started its own nuclear programme in 1944 when Homi Jehangir Bhabha founded the Tata Institute of Fundamental Research.
    • Physicist Raja Ramanna played an essential role in nuclear weapons technology research; he expanded and supervised scientific research on nuclear weapons and was the first directing officer of the small team of scientists that supervised and carried out the test.
    • After independence, PM Nehru authorised the development of a nuclear programme headed by Homi Bhabha.
    • The Atomic Energy Act of 1948 focused on peaceful development.
    • India was heavily involved in the development of the Nuclear Non-Proliferation Treaty but ultimately opted not to sign it.
    • In 1954, two important infrastructure projects were commissioned. The first established Trombay Atomic Energy Establishment at Mumbai (Bombay). The other created a governmental secretariat, Department of Atomic Energy (DAE), of which Bhabha was the first secretary.

    Nuclear Suppliers Group (NSG)

    • The NSG is a multilateral export control regime and a group of nuclear supplier countries that seek to prevent nuclear proliferation by controlling the export of materials, equipment and technology that can be used to manufacture nuclear weapons.
    • The NSG was founded in response to the Indian nuclear test in May 1974 and first met in November 1975.
    • It was solely aimed to deny advanced technology, and isolate and contain India.

  • [pib] BiPAP Non-Invasive Ventilator “SwasthVayu”

    National Aerospace Laboratories (NAL) Bangalore, a constituent of the lab of CSIR has developed a Non-Invasive BiPAP Ventilator ‘SwasthVayu ’in a record time of 36 days to treat COVID-19 patients.

    The name ‘SwasthVayu’ can be tricky to guess, specially after some days. In prelims, UPSC may throw some options related to air pollution.

    SwasthVayu

    • A ventilator is a machine that provides mechanical ventilation by moving breathable air into and out of the lungs, to deliver breaths to a patient who is physically unable to breathe, or breathing insufficiently.
    • BiPAP (Bilevel Positive Airway Pressure) Non-Invasive ventilator is a microcontroller-based precise closed-loop adaptive control system.
    • It is a built-in biocompatible “3D printed manifold & coupler” with HEPA filter (Highly Efficient Particulate Air Filter).

    Benefits of SwasthVayu

    • The major advantage of this machine is that it is simple to use without any specialized nursing, cost-effective, compact and configured with the majority of indigenous components.
    • This is ideal for treating COVID -19 patients in Wards, Makeshift Hospitals, dispensaries and home in current Indian COVID 19 scenario.

  • Taking India’s agri-marketing and PDS system on a more efficient path

    Agriculture is still the mainstay of Indian economy. There are certain problems that persist in the agri-marketing and PDS. The author suggests to use the present corona crisis to embark on the path of the reform in these areas.

     Supply lines maintained during the lockdown

    • India seems to have contained the mortality rate from Covid-19 to 3.3% which is lower than the global average of about 7 per cent.
    • On the food front too, India has done reasonably well.
    • Despite initial disruptions in supply lines, India has somehow managed to feed its large population of 1.37 billion.
    • In fact, if there is any complaint, it is from the producer’s side that the prices of perishables have collapsed in some parts of the country.
    • But, from the consumer’s point of view, even for perishables like milk and vegetables, supply lines were quickly restored and food is easily available in the markets at reasonable prices.
    • On keeping supply lines for essential food alive and running, those in the government managing the food logistics surely deserve to be complimented.

    Reforms in agri-marketing and PDS

    • Agriculture still engages India’s largest workforce.
    • And it may be the only sector that registers a respectable growth this year as almost all other major sectors may plummet into negative territory.
    • Agriculture sector is in urgent need of the reforms that can help farmers get a better price for their produce with consumers still paying a reasonable price for their food.
    • Following ways are suggested for agri-marketing:
    • While the APMC markets can keep doing their business as usual, it is time to open channels for direct buying from farmers/farmer producer organisations (FPOs).
    • Any registered large buyer, be it processors or retail groups or exporters must be encouraged by providing them with a license, that is valid all over India.
    • They should be exempted from any market fee and other cesses as they will not be using the services of the APMC market yards.
    • E-NAM can flourish if grading and dispute settlement mechanisms are put in place.
    • Private mandis with modern infrastructure need to be promoted in competition with APMCs.
    • On the PDS front, we need to move towards cash transfers that can be withdrawn from anywhere in the country.
    • Some initiative has already been taken by the Madhya Pradesh and even Uttar Pradesh is now moving along these lines.
    • But much more can be done to put India’s agri-marketing and PDS system on a more efficient path.

    Consider the question asked by the UPSC in 2014 “There is also a point of view that Agricultural Produce Marketing Committees set up under the State Acts have not only impeded the development of agriculture but also have been the cause of food inflation in India. Critically examine.”

    Conclusion

    The recovery of the economy, whether it will be V-shape or J-shape, depends upon the package that the government announces. The mega reforms need to be built in this recovery package.

    Agriculture Produce Marketing Committee Regulation (APMC) Act.

    • All wholesale markets for agricultural produce in states that have adopted the Agricultural Produce Market Regulation Act (APMRA) are termed as “regulated markets”.
    • With the exception of Kerala, J & K, and Manipur, all other states have enacted the APMC Act.
    • It mandates that the sale/purchase of agricultural commodities notified under it are to be carried out in specified market areas, yards or sub-yards. These markets are required to have the proper infrastructure for the sale of farmers’ produce.
    • Prices in them are to be determined by open auction, conducted in a transparent manner in the presence of an official of the market committee.
    • Market charges for various agencies, such as commissions for commission agents (arhtiyas); statutory charges, such as market fees and taxes; and produce-handling charges, such as for cleaning of produce, and loading and unloading, are clearly defined, and no other deduction can be made from the sale proceeds of farmers.
    • Market charges, costs, and taxes vary across states and commodities.

  • New approach to economic revival: SNAP

    In this article the author suggests a new approach to deal with multiple bankruptcies and stressed assets that would come up post COVID. So, what is the new approach and how it is different from the existing IBC? Read further.

    Why is speed of resolution important?

    • First, because it is the only way to revive the economy.
    • As revenues have dried up cash flow problems have cascaded down the supply chain.
    • Firms will consequently be unable to restart production unless they first get credit to pay their suppliers and workers.
    • But impaired firms cannot get credit and impaired banks cannot provide it.
    • So, the entire economy will be stuck unless the balance sheet problem is sorted out.
    • Second, speed will also minimise the losses from the COVID crisis.
    • The value of bankrupt firms decays rapidly over time, and the bill for this loss will have to be borne ultimately by the government.
    • So, speed is necessary to contain the damage to the government’s financial position, which has been badly eroded by the COVID crisis.
    • But moving quickly will be difficult.
    • The only real mechanism that currently exists to handle stress and bankruptcy is the Insolvency and Bankruptcy Code (IBC) system, which has been suspended for six months.

    Why the IBC cannot help much?

    • Many have therefore argued for bringing the IBC back into operation as soon as possible.
    • Why such a strategy would not be very effective? The system is slow, with many cases taking two years or more; it could easily become overwhelmed completely if it is forced to absorb a large new set of bankrupt firms.
    • In addition, the IBC envisages that banks maximise their recoveries by auctioning off the bankrupt firms to the highest bidder.
    • But in a nation and indeed a world, where all balance sheets are damaged, it is not obvious who would be able to buy these firms, or at what prices.
    • So recovery rates from sales could be low, undermining the objective of the exercise.
    • Even if strong bidders could be found, there is a fundamental political, even philosophical, question of whether it is really right to take these firms away from their promoters.
    • After all, many of these firms did nothing wrong; they got into financial difficulties because of the corona crisis.

    So, what is the solution?

    • What is needed is a new set of procedures that can utilise much of the existing IBC framework, but are simple, straightforward, and prompt, with a built-in expiry clause.
    • Let’s Call them Special Non-Adversarial Procedures (SNAP).
    • As soon as the lockdown is largely over, the IBC creditor committees (CoCs) could meet to assess the new wave of NPAs.
    • The largest, most complex cases — say, those with debts exceeding Rs 10,000 crore — would be sent to the IBC for regular treatment.
    • But all other cases would be eligible under SNAP
    • After all, the wider the set of companies that are put back on their feet quickly, the stronger the recovery will be.

    How would the SNAP work?

    • Under SNAP, CoCs would, over the next three months, examine delinquent firms’ financial records, checking to see whether they are actually viable.
    • If so, these firms would be designated as Lockdown Affected Enterprises (LAEs), eligible under SNAP.
    • Since the basis of the designation would be that the firm is fundamentally sound but because of COVID impact, an Insolvency Professional (IP) appointed by the CoC would work with existing management (who would continue to run the firm) to arrange for interim finance.
    • Then, the IP would assess how much of a debt reduction the firm needs, and within three months would present a specific proposal to the CoC.
    • If the CoC can reach a two-third majority in favour of the proposal, the promoter would keep the firm, while the firm would be granted immediately released from bankruptcy.
    • Since the National Company Law Tribunal (NCLT) is already overloaded, it would not be involved at all in SNAP.
    • If the CoC cannot reach agreement within the three-month deadline, or if at any subsequent point the firm defaults on its newly reduced debt, it would be sent to the IBC for resolution.
    • SNAP would be disbanded by end-December 2020.

    Checks and balances under SNAP

    • Such a system would have a series of checks and balances, to prevent firms from securing undeserved debt reductions.
    • Banks would need to certify that defaulters are truly LAEs.
    • IPs would need to certify the size of the debt reduction.
    • A large majority of creditor banks would need to agree to the IP’s proposal.

    What should be the role of the government in SNAP?

    • With these checks and balances in place, the government should then commit to two things.
    • First, it should provide some legal cover, ensuring that bankers would not be subject to investigations by the anti-corruption agencies, as long as they followed the LAE rules.
    • Second, the public sector banks would be compensated for the costs of the reduction in the value of the asset, automatically and fully.

    Major advantage of SNAP

    • Besides speed, SNAP would have one further major advantage.
    • It would reduce the adversarial nature of the IBC process, arising because promoters are forced to cede their firms.
    • Under the proposed system, promoters would not only have incentives to cooperate; they would actually want to take the initiative, applying for LAE designation themselves, in the hopes that they could get back to business as soon as possible.
    • Such a system might seem difficult to envisage, but it is certainly feasible: It is a design feature under Chapter 11 of the American bankruptcy act.
    • If SNAP succeeds, some of the special procedures could be introduced permanently into the IBC framework, adding a new dimension: Not just liquidation and rehabilitation under new promoters but rehabilitation under existing management.

    Way forward

    • After SNAP, repair of the financial system would have to go back to addressing the long-standing problems, which will have been aggravated by the crisis.
    • Firms that were unviable even before the COVID crisis would be sent directly to the IBC, but with the IBC reformed.
    • The government should issue guidelines focusing on the following three-
    • 1. Focusing the COCs on the goal of maximising value, disregarding non-commercial objectives.
    • 2. Directing the NCLT courts to focus on the CoCs’ adherence to the procedure rather than on the merits of their decisions.
    • 3. Increasing competition in the auction by allowing promoters to bid for their assets, as long as they have not been declared wilful defaulters.
    • For the power and real estate sectors, a sui generis approach via the creation of a bad bank is still the best way forward.
    • Real estate resolutions need to take into account the interests of home-owners, something that is almost impossible to do under the IBC.

    Consider the question, “Economic revival after the pandemic would require some tweaks in the IBC as it was not designed to handle such situations. Suggest the ways to handle the bankruptcies more effectively and changes that are desired in the IBC.”

    Conclusion

    Introducing three-pronged strategy quickly would set the stage for the economic recovery of India:  1) Special, expedited, non-adversarial and time-bound bankruptcy procedures (SNAP) for COVID-affected firms 2) A reformed IBC focused squarely on loss-minimisation 3)Bad banks for stressed assets in the power and real estate sectors.

    Back2Baciscs: What is Insolvency and Bankruptcy Code-2016?

    1. The Code creates time-bound processes for insolvency resolution of companies and individuals.  These processes will be completed within 180 days.  If insolvency cannot be resolved, the assets of the borrowers may be sold to repay creditors.
    2. The resolution processes will be conducted by licensed insolvency professionals (IPs).  These IPs will be members of insolvency professional agencies (IPAs).  IPAs will also furnish performance bonds equal to the assets of a company under insolvency resolution.
    3. Information utilities (IUs) will be established to collect, collate and disseminate financial information to facilitate insolvency resolution.
    4. The National Company Law Tribunal (NCLT) will adjudicate insolvency resolution for companies.  The Debt Recovery Tribunal (DRT) will adjudicate insolvency resolution for individuals.
    5. The Insolvency and Bankruptcy Board of India will be set up to regulate functioning of IPs, IPAs and IUs.

  • Indigenous antibody test: COVID Kavach ELISA

    Indian Council of Medical Research (ICMR)-National Institute of Virology (NIV) at Pune has developed and validated the indigenous IgG ELISA test “COVID KAVACH ELISA” for antibody detection for COVID-19.

    Our thumb rule suggests that the ELISA test is being used only for the diagnosis of HIV infection. Right?

    But the ELISA test is a broader term to diagnose antibody-antigen interaction after certain virus infection to a person.  UPSC can test your basic knowledge of core biology with a question based on this concept.

    What is ELISA test?

    • ELISA (enzyme-linked immunosorbent assay) is a plate-based assay technique designed for detecting and quantifying substances such as peptides, proteins, antibodies and hormones.
    • Other names, such as enzyme immunoassay (EIA), are also used to describe the same technology.
    • In an ELISA, an antigen must be immobilized on a solid surface and then complexed with an antibody that is linked to an enzyme.
    • Detection is accomplished by assessing the conjugated enzyme activity via incubation with a substrate to produce a measurable product.
    • The most crucial element of the detection strategy is a highly specific antibody-antigen interaction.

    What are antibodies?

    • An antibody is a large, Y-shaped protein produced mainly by plasma cells that are used by the immune system to neutralize pathogens such as pathogenic bacteria and viruses.
    • There are five immunoglobulin classes (isotypes) of antibody molecules found in serum: IgG, IgM, IgA, IgE and IgD.
    • They are distinguished by the type of heavy chain they contain.

    Application of ELISA

    • Presence of antigen or the presence of antibody in a sample can be evaluated
    • Determination of serum antibody concentrations in a virus test
    • Used in the food industry when detecting potential food allergens
    • Applied in disease outbreaks- tracking the spread of disease e.g. HIV, bird flu, common, colds, cholera, STD etc

    Significance

    • Robust antibody tests are critical for surveillance to understand the proportion of the population exposed to infection.
    • The test will have the advantage of testing 90 samples together in a single run of 2.5 hours.
    • Moreover, ELISA based testing is easily possible even at the district level as the ELISA kit has an inactivated virus.
    • There are also minimal bio-safety and bio-security requirements as compared to the real-time RT-PCR test.
    • The test has the advantage of having much higher sensitivity and specificity as compared to the several rapid test kits which have recently flooded the Indian market.

    Limitations

    • Since the ELISA test is based on the detection of antibodies, it can only help in knowing if the person has been previously infected by a coronavirus.
    • It takes one-three weeks for the antibodies to develop in response to infection.
    • So, if a person who has been recently infected by the virus is tested during the window period (the time taken to develop antibodies) the result will turn out to be negative.
    • But a repeat test after a couple of weeks will indicate the true infection status.

    How it is different from the PCR test?

    • While the RT-PCR, which detects the RNA of the coronavirus, enables detection of current infection, it will not be useful if the testing is carried out days after the infection clears as the virus will no longer be present.
    • However, antibodies developed in response to the coronavirus infection will be present in the blood for a longer duration and hence the ELISA test can help detect past infection.
    • The maximum time the antibodies will be present in the body is not known for coronavirus.

    Back2Basics: Reverse Transcriptase – Polymerase Chain Reaction (PCR) Test

    • It uses a technique that creates copies of a segment of DNA. ‘Polymerase’ refers to the enzymes that make the copies of DNA.
    • Kary Mullis, the American biochemist who invented the PCR technique, was awarded the Nobel Prize for Chemistry in 1993.
    • The ‘chain reaction’ is how the DNA fragments are copied, exponentially — one is copied into two, the two are copied into four, and so on.
    • However, SARS-COV-2 is a virus made of RNA, which needs to be converted into DNA. For this, the technique includes a process called reverse transcription.
    • A ‘reverse transcriptase’ enzyme converts the RNA into DNA. Copies of the DNA are then made and amplified.
    • A fluorescent DNA binding dye called the “probe” shows the presence of the virus. The test also distinguishes SARS-COV-2 from other viruses.

  • Species in news: Sal Forest Tortoise

    A recent study by ecologists in the Wildlife Institute of India, Dehradun, has found that the area designated as a protected area network has only a small overlap with the actual habitat of Sal forest tortoise. Over 90% of the potential distribution of the species falls outside the current protected area’s network.

    What you should focus on?

    On map, identify areas where Sal forest tortoise are found.

    Revise the map of various Forest system of India and their characteristics as well.

    Also…..Is tortoise a mammal or an amphibian?…..or something else??

    Sal Forest/ Elongated Tortoise

    • Also known as the elongated tortoise (Indotestudo elongata), the sal forest tortoise, recently assessed as Critically Endangered, is heavily hunted for food.
    • It is collected both for local use, such as decorative masks, and international wildlife trade.
    • The Sal forest tortoise is widely distributed over eastern and northern India and Southeast Asia.
    • It is one of the only four land tortoises found in India. It is legally protected under Schedule IV of the Indian Wildlife (Protection) Act, 1972 as amended up to 2006.
    • According to the IUCN, the population of the species may have fallen by about 80% in the last three generations (90 years).

    About Sal Forest

    • It is a forest type dominated by a single plant species, commonly known as Sal tree (Shorea robusta).
    • It belongs to the category ‘Tropical Moist Deciduous Forest’.
    • The distribution of Sal forests is controlled by the conditions of topography, geology, and soil.
    • Sal forests are mainly distributed in the South and Southeast Asia, occurring along the base of Tropical Himalayas from Assam to Punjab, in the eastern districts of Central India, and on the Western Bengal Hills.

    Also read the complete series on-

    Natural Vegetation and Wildlife- Part 1 | An Overview of Natural Vegetation Types Found in India

  • New approach to the revival of economy

    As our attention now shifts to the revival of the economy, we have to take stock of the damage to the economy. As recently as 2008 we have faced a financial crisis, but this crisis is bigger in the scale and our fiscal health is weaker than it was at the time of the 2008 crisis. So, to deal with the situation we have to adopt a novel approach. What should be the approach? Read further to know.

    From 2014 to Covid-19 in finance and banking

    • TBS challenge: As far back as December 2014, the banking sector and infrastructure firms had come under financial stress, a problem that was termed the Twin Balance Sheet (TBS) challenge.
    • By December 2019, the problem had spread to the NBFC and real estate sectors, raising the number of stressed balance sheets to four.
    • Following the Covid-19 shock, the problem of stressed balance sheets will spread across the economy.

    How bad is the damage likely to be?

    • Reports suggest that around one-third of industrial and service firms have applied for moratoria on their bank loans.
    • If only a quarter of these deferred loans eventually go bad, then the stock of non-performing assets (NPAs) would increase by Rs 5 lakh crore.
    • Senior bank officials have been quoted as estimating that the stock of NPAs could increase by as much as Rs 9 lakh crore.
    • In this case, we would be looking at NPAs of Rs 18 lakh crore, equivalent to around 18 per cent of current loans outstanding.

    So, how is the situation different from 2008 financial crisis?

    • At one level, the answer is simple: The shareholders of the financial institutions, which in most cases means the government.
    • But this is where the ubiquity of the balance sheet problem comes in.
    • When the TBS challenge first materialised, after the Global Financial Crisis of 2008-09, the government had a relatively strong balance sheet.
    • Deficits were low, and the consolidated debt-GDP ratio, having fallen by 17 percentage points over the previous 7 years, stood at just over 60 per cent of GDP.
    • So, fiscal room was available, allowing the government to recapitalise the PSU banks.
    • This time, the government’s financial position will be quite different.
    • Central and state government deficits and debts will increase dramatically this year.
    • Revenues, already slowing, have been decimated by the Covid crisis, while expenditures have increased.
    • Add in a slowly recovering economy, and it becomes clear that the fiscal position will remain weak for some considerable time.
    • What are the options with the government? The government will want to pass the burden onto the corporate and household sectors, in the form of higher taxes, more arrears, and possibly higher inflation.
    • But these sectors will resist, for they have financial problems of their own.

    2 ways to minimise the size of the loss

    • It will be tempting to delay recognising the problem, pushing it into the future, by allowing banks not to classify bad loans as NPAs, and barring them from taking defaulters to the IBC system.
    • But this would be the wrong approach and there are two ways to minimise the loss.
    • 1. Prevent bankruptcies from occurring.
    • To do this, banks will need to identify the firms that are viable, and lend them the funds they need to tide them over the immediate crisis.
    • But banks are reluctant to bear the risk of making such loans.
    • So, the government might need to create a guarantee fund to support lending.
    • 2. When firms default, resolve as quickly as possible
    • Speed is necessary because the financial position of stressed firms tends to worsen over time.
    • By definition, stressed firms have poor cash flows and can’t obtain much in the way of loans from banks.
    • So, they don’t have enough money to fund their operations properly.
    • Which means that over time their underlying business deteriorates, destroying the firms’ market value.
    • While public attention focuses on the size of the NPAs, a much more important number is the recovery rate — the degree to which the banks can recover on these loans.
    • And the only way to maximise the recovery rate is to sort out the bad loans speedily.
    • The economy will reap an additional benefit since the resolved firms will be able to contribute to the recovery.

    Consider the question “As the economy stares at the destruction caused by the pandemic certain novel measures to salvage the economy are necessary. In light of this statement suggest the measures that the government should take to avoid the NPA problem from mounting.”

    Conclusion

    A new approach is consequently needed. The immediate problems created by the crisis must be addressed, decisively and quickly. Then the attention will have to turn to address the pre-COVID legacy balance sheet problems.

    Back2Basics: What is NPA?

    • A non-performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.
    • Banks are required to classify NPAs further into Substandard, Doubtful and Loss assets.
    • Substandard assets: Assets which has remained NPA for a period less than or equal to 12 months.
    • Doubtful assets: An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months.
    • Loss assets: As per RBI, “Loss asset is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted, although there may be some salvage or recovery value.”