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  • Virtual human’ NEON

    NEONs are being called the world’s first artificial humans. They look and behave like real humans, and could develop memories and emotions — though from behind a 4K display.

    NEON

    • Star Labs is headed by India-born scientist Pranav Mistry who underlines that what was showcased at CES was the product of just four months’ work.
    • The company says NEONs are computationally created virtual humans — the word derives from NEO (new) + humaN.
    • For now, the virtual humans can show emotions when manually controlled by their creators.
    • But the idea is for NEONs to become intelligent enough to be fully autonomous, showing emotions, learning skills, creating memories, and being intelligent on their own.
    • Star Labs thinks they can be “friends, collaborators, and companions”, but all that is a few years away.

    How does it work?

    There are two core technologies behind his virtual humans.

    • First, there is the proprietary CORE R3 technology that drives the “reality, real time and responsiveness” behind NEONs.
    • It is the front-end reality engine that is able to give you that real expression.
    • The company claims CORE R3 “leapfrogs in the domains of Behavioral Neural Networks, Evolutionary Generative Intelligence and Computational Reality”, and is “extensively trained” on how humans look, behave and interact.
    • But in the end, it is like a rendition engine, converting the mathematical models to look like actual humans.
    • The next stage will be SPECTRA, which will complement CORE R3 with the “spectrum of intelligence, learning, emotions and memory”.
    • But SPECTRA is still in development, and is not expected before NEONWORLD 2020 later this year.

    How could NEONs be used?

    • NEONs are the interface for technologies and services.
    • They could answer queries at a bank, welcome you at a restaurant, or read out the breaking news on television at an unearthly hour.
    • This form of virtual assistance would be more effective, for example, while teaching languages, as NEONs will be capable of understanding and sympathizing.

    How are they different from Virtual Assistants?

    • Virtual Assistants now learn from all the data they are plugged into. NEONs will be limited to what they know and learn.
    • Their leaning could potentially be limited to the person they are catering to, and maybe her friends — but not the entire Internet.
    • They will not be an interface for you to request a song, rather they will be a friend to speak to and share experiences with.
    • Currently, its developer doesn’t want NEONs to have collective memory, or to share data among themselves.

  • [op-ed of the day] Revisiting the NBFC Crisis

    Context

    While India was trying to deal with the problems arising out of the large NPA accumulated by the commercial banks, the Indian financial sector was dealt with another blow in the form of the NBFC crisis.

    Effects of IL&FS and DHFL collapse:

    • Balance sheets affected: The collapse of these two big entities affected the balance sheets of banks and mutual fund companies.
    • Credit crunch: It also resulted in a credit crunch that dampened demand and pushed a slowing economy towards recession.
    • Tarnished image of NBFCs: Being leaders in the industry, their failure has tarnished the image of the NBFC sector as a whole.

    Types of NBFCs and their numbers

    • Total number: As of September 2019 there were a total 9,642 NBFCs in India.
    • Deposit-taking NBFC (NBFCs-D): Only 82 of India’s NBFCs were deposit-taking institutions (NBFCs-D) permitted to mobilise and hold deposits.
    • Non-deposit taking NBFCs (NBFCs-ND): The rest of the NBFCs which are not deposit-taking, are categorised as non-deposit taking NBFCs.
      • They did not have access to the savings of ordinary households.
      • For this reason, the majority of these institutions were not considered to be entities that needed strict regulation
    • Systematically important (NBFCs-ND-SI): Of a large number of non-deposit taking NBFCs (NBFCs-ND), only 274 were identified as being systematically important (NBFCs-ND-SI), by virtue of having an asset size of â‚č500 crores or more.

    Significance of NBFCs as expressed by assets holdings

    • A significant player in the financial markets: As at the end of March 2019, these two sets-NBFCs-D and NBFC-ND-SI- held assets that amounted to almost a fifth of that held by the scheduled commercial banks.
      • This made them significant players in the web of credit, as well as large enough as a group to affect the health of the financial sector.
    • Non-deposit taking NBFCs must rely on resources garnered from the “market,” including the banking system, besides the market for bonds, debentures, and short-term paper.
    • Extension of financial entities: Individual investors would only be marginally involved in direct investment in these instruments.
      • So, the NBFCs are essentially extensions of the activity of other financial entities such as banks, insurance companies, and mutual funds.

    Concentrated lending by NBFCs

    • Industry getting lion’s share: Industry accounted for the biggest chunk of lending, amounting to 57% of gross advances in September 2019.
      • Much of this lending to industry went to the infrastructural sector.
    • At second place-retail sector: A second major target for lending by the NBFCs was the retail sector, with retail loans accounting for 20% of gross advances.
      • Within the retail sector, vehicle/auto loans accounted for as much as 44% of loans.

    What went wrong?

    • Diversification by commercial banks: Following a surge in capital flows into India which began in 2004, banks were flush with liquidity.
      • Under pressure to lend and invest to cover the costs of capital and intermediation and earn a profit, banks were looking for new areas into which they could move
      • Increase in retail lending by banks: The pressure resulted in a significant increase in retail lending, with lending for housing, automobiles and consumer durables.
      • There was also a substantial increase in lending to the infrastructural sector and commercial real estate.
    • Why NBFCs flourished even in the face of competition by banks? What the growth of the NBFCs indicates is that banks were unable to exhaust the liquidity at their disposal.
      • Banks were also unable to satisfy the potential for lending to these sectors, providing a space for NBFCs to flourish.
    • The willingness of NBFCs suited the banks: The willingness of the NBFCs to enter these areas suited the banks in two ways.
      • First, it permitted the banks to use their liquidity even when they themselves were stretched and could not discover, scrutinise and monitor new borrowers.
      • Banks could lend to the NBFCs, which could then take on the tasks associated with expanding the universe of borrowers to match the increased access to liquid funds.
      • The second was that it helped the banks to move risks out of their own books.
    • Short term lending to NBFCs, and long-term lending by NBFCs: Banks accepts short term deposits, so there is limit in their ability to lend that short term deposits as a long term debt.
      • On the other hand, these were the sectors to which additional credit could be easily pushed.
      • Lending to NBFCs that in turn lent to these sectors, appeared to be a solution to the problem.
      • Bank lending to the NBFCs was short term, and the latter used these short-term funds to provide long-maturity loans
      • NBFCs expected that they would be able to roll over much of these loans so that they were not capital short.
      • Role of rating agencies: What they needed for the purpose were ratings that ranked their instruments as safe.
      • The ratings companies were more than willing to provide such ranks.
    • The two risks involved in this model: The NBFC-credit build-up was an edifice that was burdened with two kinds of risks.
      • First risk: A possible default on the part of borrowers.
      • The probability of which only increases as the universe of borrowers is expanded rapidly to exhaust the liquidity at hand.
      • The second risk: The second was the possibility that developments in the banking sector and other segments of the financial sector would reduce the appetite of these investors for the debentures, bonds and commercial paper issued by the NBFCs
      • Since the NBFCs banked on being able to roll-over short-term debt to sustain long-term lending.
      • A slowdown in or halt to the flow of funds would lead to a liquidity crunch that can damage the balance sheet of these institutions.
    • Which of the two risks is involved in the present crisis? The crisis that affected the NBFCs was a result of both kinds of setbacks.
      • First setback: Loans to areas like infrastructure, commercial real estate and housing went bad.
      • Second setback: With the non-performing assets problem in the commercial banking sector curtailing their access to bank lending.
    • Why the problem turned systemic? Given the importance of ratings and “image” in ensuring access to capital, some firms with the requisite image were able to mobilise large sums of capital and expand their business.
      • When entities like that go bust, the response of lenders and investors to the event tends to be drastic, with systemic effects on the sector as a whole.

    Conclusion

    The episode was a shadow banking crisis that has had far-reaching consequences for the economy as a whole. Therefore, its high time that measures are taken to avoid the occurrence of such a crisis in the future.

  • Artemis Mission

    NASA wants to send the first woman and the next man to the Moon by the year 2024, which it plans on doing through the Artemis lunar exploration program. An Indian American astronaut named Raja Chari is set to accompany the crew in this mission.

    Artemis Mission

    • In 2011, NASA began the ARTEMIS (Acceleration, Reconnection, Turbulence, and Electrodynamics of the Moon’s Interaction with the Sun) mission using a pair of repurposed spacecraft and in 2012 the Gravity Recovery and Interior Laboratory (GRAIL) spacecraft studied the Moon’s gravity.
    • For the program, NASA’s new rocket called the Space Launch System (SLS) will send astronauts aboard the Orion spacecraft a quarter of a million miles away from Earth to the lunar orbit.
    • The astronauts going for the Artemis program will wear newly designed spacesuits, called Exploration Extravehicular Mobility Unit, or xEMU.
    • These spacesuits feature advanced mobility and communications and interchangeable parts that can be configured for spacewalks in microgravity or on a planetary surface.

  • Kaziranga National Park

    Kaziranga, home of the world’s most one-horned rhinos, has 96 species of wetland birds — one of the highest for wildlife preserves in India.

    Kaziranga National Park

    • It is a protected area in the northeast state of Assam.
    • Spread across the floodplains of the Brahmaputra River, its forests, wetlands and grasslands are home to tigers, elephants and the world’s largest population of Indian one-horned rhinoceroses.
    • Much of the focus of conservation efforts in Kaziranga are focused on the ‘big four’ species— rhino, elephant, Royal Bengal tiger and Asiatic water buffalo.
    • The 2018 census had yielded 2,413 rhinos and approximately 1,100 elephants.
    • The tiger census of 2014 said Kaziranga had an estimated 103 tigers, the third highest population of the striped cat in India after Jim Corbett National Park (215) in Uttarakhand and Bandipur National Park (120) in Karnataka.
    • Kaziranga is also home to nine of the 14 species of primates found in the Indian subcontinent.

  • Places in news: Kolkata Port

    PM Modi has renamed the Kolkata Port Trust after Dr Syama Prasad Mookerjee, at an event to mark its 150th anniversary.

    History of Kolkata’s port

    • In the early 16th century, the Portuguese first used the present location of the port to anchor their ships, since they found the upper reaches of the Hooghly river beyond Kolkata, unsafe for navigation.
    • Job Charnock, an employee and administrator of the East India Company, is believed to have founded a trading post at the site in 1690.
    • Since the area was situated on the river with jungle on three sides, it was considered safe from enemy invasion.
    • After the abolition of slavery in the British Empire in 1833, this port was used to ship lakhs of Indians as ‘indentured labourers’ to far-flung territories throughout the Empire.
    • During World War II, the port was bombed by Japanese forces.

    Its administration

    • As Kolkata grew in size and importance, merchants in the city demanded the setting up of a port trust in 1863.
    • The colonial government formed a River Trust in 1866, but it soon failed, and administration was again taken up by the government.
    • Finally, in 1870, the Calcutta Port Act (Act V of 1870) was passed, creating the offices of Calcutta Port Commissioners.
    • In 1869 and 1870, eight jetties were built on the Strand. A wet dock was set up at Khidirpur in 1892. The Khidirpur Dock II was completed in 1902.
    • As cargo traffic at the port grew, so did the requirement of more kerosene, leading to the building of a petroleum wharf at Budge Budge in 1896.
    • In 1925, the Garden Reach jetty was added to accommodate greater cargo traffic. A new dock, named King George’s Dock, was commissioned in 1928 (it was renamed Netaji Subhash Dock in 1973).
    • In 1975, the Commissioners of the port ceased to control it after the Major Port Trusts Act, 1963, came into force.

    Significance

    • After Independence, the Kolkata Port lost its preeminent position in cargo traffic to ports at Mumbai, Kandla, Chennai, and Visakhapatnam.
    • The Kolkata port is the only riverine port on R. Hooghly in the country, situated 203 km from the sea.
    • The Farakka Barrage, built in 1975, reduced some of the port’s woes as Ganga waters were diverted into the Bhagirathi-Hooghly system.

  • Explained: The fundamentals of the Indian Economy

    PM Modi highlighted the strong absorbent capacity of the Indian economy while referring to certain fundamentals. He emphasized the strength of these basic fundamentals in absorbing the shocks of ongoing economic slowdown.

    What are the ‘fundamentals of an economy’?

    • The PM has reiterated a phrase of reassurance — underscoring the strong fundamentals of the Indian economy — that has been often used by policymakers in the past when the economy is seen to be faltering.
    • When one talks about the fundamentals of an economy, one wants to look at economy-wide variables such as the overall GDP growth, the overall unemployment rate, the level of fiscal deficit, the valuation of a country’s currency against the US dollar, the savings and investment rates in an economy, the rate of inflation, the current account balance, the trade balance etc.
    • There is intuitive wisdom in looking at these “fundamentals” of an economy when it goes through a tough phase.
    • Such an analysis, when done honestly, can give a sense of how deep the strain in an economy run.
    • It can answer the question whether the current crisis just an exaggerated response to a sectoral problem or is there something more “fundamentally” wrong with the economy that needs urgent attention and “structural” reform.
    • To be sure about the broader health of the economy, one looks at the broader variables. That way, one reduces the chances of getting the diagnosis wrong.

    Their relevance

    • The first advance estimates of national income for the current financial year, released earlier in the week, found that nominal GDP was expected to grow at just 7.5% in 2019-20.
    • This is the lowest since 1978. Real GDP is calculated after deducting the rate of inflation from the nominal GDP growth rate.
    • So, if for argument sake, the inflation for this financial year is 4%, then the real GDP growth would be just 3.5%.
    • Just for perspective, the Union Budget presented in July 2019 expected a real GDP growth of 8% to 8.5% and a nominal GDP growth of 12% to 12.5%, with a 4% inflation level.

    So, what is the current state of the fundamentals?

    The data on most variables that one may call as fundamentals of the Indian economy are struggling.

    • Growth rate — both nominal and real — has decelerated sharply; now trending at multi-decade lows. Gross Value Added, which maps economic growth by looking at the incomes-generated is even lower; and its weakness in across most of the sectors that traditionally generated high levels of employment.
    • Inflation is up but the consolation is that the spike is largely due to transient factors.
    • However, a US-Iran type of conflagration could result is a sharp hike in oil prices and, as such, domestic inflation may rise in the medium term.
    • Unemployment is also at the highest in several decades.According to some calculations, between 2012 and 2018, India witnessed a decline in the absolute number of employed people — the first instance in India’s history.
    • Fiscal deficit, which is proxy for the health of government finances, is on paper within reasonable bounds but over the years, the credibility of this number has come into question. Many, including the CAG, has opined that the actual fiscal deficit is much higher than what is officially accepted.
    • Bucking the trend, the current account deficit, is in a much better state but trade weakness continues as do the weakness of the rupee against the dollar; although on the rupee-dollar issue, a case can be made that the rupee is still overvalued and thus hurting India’s exports.
    • Similarly, while the benchmark stock indices have run up, and grabbed all attention, the broader stock indices like the BSE500 have struggled.

  • National Strategy for Financial Inclusion (NSFI)

    The Reserve Bank of India (RBI) has chalked out an ambitious strategy for financial inclusion of all till 2024.

    National Strategy for Financial Inclusion (NSFI)

    • Financial inclusion is increasingly being recognised as a key driver of economic growth and poverty alleviation the world over.
    • The strategy aims to strengthen the ecosystem for various modes of digital financial services in all Tier-II to Tier VI centres to create the necessary infrastructure to move towards a less-cash society by March 2022.
    • One of the objectives of the strategy includes increasing outreach of banking outlets of to provide banking access to every village within a 5-km radius or a hamlet of 500 households in hilly areas by March 2020.
    • RBI said that the aim was also to see that every adult had access to a financial service provider through a mobile device by March 2024.
    • With the aim of providing basic of financial services, a target has been set that every willing and eligible adult, who has been enrolled under the PM Jan Dhan Yojana, be enrolled under an insurance scheme and a pension scheme by March 2020.
    • The plan is also to make the Public Credit Registry (PCR) fully operational by March 2022 so that authorised financial entities could leverage the same for assessing credit proposals from all citizens.

  • [pib] State Energy Efficiency Index 2019

    The Ministry of Power and New & Renewable Energy has released the ‘State Energy Efficiency Index 2019’.

    State Energy Efficiency Index

    • The first such Index, the “State Energy Efficiency Preparedness Index 2018”, was launched on August 1, 2018.
    • The index tracks the progress of Energy Efficiency (EE) initiatives in 36 states and union territories based on 97 significant indicators.
    • It is developed by Bureau of Energy Efficiency (BEE) in association with Alliance for an Energy Efficient Economy (AEEE).
    • It categorizes states as ‘Front Runner’, ‘Achiever’, ‘Contender’ and ‘Aspirant’ based on their efforts and achievements towards energy efficiency implementation.
    • It incorporates qualitative, quantitative and outcome-based indicators to assess energy efficiency initiatives, programs and outcomes in five distinct sectors – buildings, industry, municipalities, transport, agriculture, and DISCOMs.

    Performance evaluation

    • For rational comparison, States/UTs are grouped into four groups based on aggregated Total Primary Energy Supply (TPES) required to meet the state’s actual energy demand (electricity, coal, oil, gas, etc.) across sectors.
    • TPES grouping shall help states compare performance and share best practices within their peer group.
    • Under four categories based on TPES, Haryana, Kerala, Karnataka, Maharashtra, Himachal Pradesh, Uttarakhand, Puducherry and Chandigarh have been evaluated as progressive states/UTs in the index.
    • The top performing states Haryana, Kerala and Karnataka – are in the ‘Achiever’ category.
    • Manipur, Jammu & Kashmir, Jharkhand and Rajasthan performed the worst in each of their groups.

    Utilities of the index

    • It will help states contribute towards national goals on energy security and climate action by helping drive EE policies and program implementation.
    • It will help tracking progress in managing the states’ and India’s energy footprint and institutionalising the data capture and monitoring of EE activities by states.

  • [pib] Indian Cyber Crime Coordination Centre (I4C)

    Union Minister for Home Affairs has inaugurated the Indian Cyber Crime Coordination Centre (I4C) and also dedicated National Cyber Crime Reporting Portal to the Nation.

    I4C

    • The scheme to setup I4C was approved in October 2018 to deal with all types of cybercrimes in a comprehensive and coordinated manner.
    • At the initiative of Union Ministry for Home Affairs (MHA), 15 States and UTs have given their consent to set up Regional Cyber Crime Coordination Centres at respective States/UTs.
    • It has seven components:
    1. National Cyber Crime Threat Analytics Unit
    2. National Cyber Crime Reporting Portal
    3. National Cyber Crime Training Centre
    4. National Cyber Crime Research and Innovation Centre
    5. National Cyber Crime Forensic Laboratory Ecosystem
    6. Platform for Joint Cyber Crime Investigation Team
    7. Cyber Crime Ecosystem Management Unit

    About National Cyber Crime Reporting Portal

    • National Cyber Crime Reporting Portal (www.cybercrime.gov.in) is a citizen-centric initiative that will enable citizens to report cyber crimes online through the portal.
    • All the cyber crime related complaints will be accessed by the concerned law enforcement agencies in the States and Union Territories for taking action as per law.
    • This portal was launched on pilot basis on 30th August, 2019 and it enables filing of all cyber crimes with specific focus on crimes against women, children, particularly child pornography, child sex abuse material, online content pertaining to rapes/gang rapes, etc.
    • This portal also focuses on specific crimes like financial crime and social media related crimes like stalking, cyber bullying, etc.
    • This portal will improve coordination amongst the law enforcement agencies of different States, districts and police stations for dealing with cyber crimes in a coordinated and effective manner.

  • Species in news: Chinese paddlefish

    One of the largest freshwater species, Chinese paddlefish has been declared extinct.

    Chinese paddlefish

    • The Chinese paddlefish (Psephurus gladius) was an iconic species, measuring up to 7 m in length, dating back from 200 million years ago, and therefore swimming the rivers when dinosaurs ruled the Earth.
    • Its ancestral home was the Yangtze River.
    • It was once common in the Yangtze, before overfishing and habitat fragmentation — including dam building — caused its population to dwindle from the 1970s onwards.
    • Between 1981 and 2003, there were just around 210 sightings of the fish. The researchers estimate that it became functionally extinct by 1993, and extinct sometime between 2005-2010.

    How did the study determine that it has gone extinct?

    • Chinese researchers made this conclusion based on the Red List criteria of the International Union for Conservation of Nature (IUCN).
    • The Red List has several categories for extinction, or for how endangered a species is.
    • For example, “extinct in the wild” means a species survives only in a captive environment while “locally extinct” means a species has ceased to exist in a particular area but may exist in other areas.
    • Then there is “functionally extinct”, which means the species continues to exist but it has too few members to enable to reproduce meaningfully enough to ensure survival.
    • To be “globally extinct”, it means a species has no surviving member anywhere. Such a conclusion is reached when there is no reasonable doubt left that its last member has died.

    How does extinction status matters for conservation?

    • Declaring a species extinct is an elaborate process.
    • It involves a series of exhaustive surveys, which need to be taken at appropriate times, throughout the species’ historic range and over a time-frame that is appropriate to the species’ life cycle and form.
    • When these surveys fail to record the existence of any individuals belonging to that species, a species may be presumed to be extinct.
    • Once declared extinct, a species is not eligible for protective measures and conservation funding; therefore, the declaration has significant consequences.