[op-ed snap] Regulator’s Role

Mains Paper 3 : issues relating to planning, mobilization of resources |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : RBI

Mains level : Supreme court's direction to Kotak Bank on disclosures


CONTEXT

The Supreme Court  has told the regulator that it is duty bound to disclose the list of defaulters and also make public its annual inspection reports of banks and financial institutions.

Background

  • IT is a fraught time for India’s central bank.
  • After a much publicised conflict between the government and the RBI, which finally led to the exit of Governor Urjit Patel and a knock to its institutional reputation, it has been dealt another blow by the Supreme Court.
  • The SC, while stating that the RBI had committed contempt of court, has warned the regulator that non-compliance of its order would be taken seriously as the bank had been refusing to provide information on all these under the RTI Act, citing its disclosure policy.
  • The other legal test the RBI faces is the unprecedented case of a regulated entity — the Kotak Bank — taking it to court over a regulatory ruling on lowering the shareholding of the original promoter of the bank.

Reasons for non- disclosure

1. Protecting Banking Secrecy – For long, the RBI has resisted disclosure of defaulters on the ground that it would violate banking secrecy laws while justifying holding back information and inspection reports of its supervisory teams on individual banks on fears of a weakening of trust among depositors and the impact on the financial markets and stocks of listed banks.

2. Low levels of financial Literacy – There is some truth to this argument in a country with low levels of financial literacy given that in the past, the country’s finance minister and the RBI were forced to publicly assure depositors and investors of a private bank that their money was safe after a run on the bank, fuelled by rumours.

3.Damages due to different interpretations –Similarly, realising the potential damage which could arise because of the interpretation of a provision in the Financial Resolution and Deposit Insurance Bill on protection of deposits, the government had to step in last year to assuage concerns.

Arguments in favour of disclosure

That does not, however, mean non-disclosure in perpetuity.

Based on regulatory Findings

  • One approach could be to provide this information after the RBI and the bank or an institution and its board have achieved closure and taken action based on regulatory findings, to limit any damage.
  • This could be preferably to Parliament, which could help strengthen prudential supervision.

Conclusion

  • As successive RBI governors and bankers have indicated, the pile up of bad loans in India is also because of judicial delays.
  • India’s two-year-old insolvency law has been a signature reform, but at the end of last year in over 30 per cent of the cases, the 270-day deadline had been breached.
  • It is with good reason that after the 2008 financial crisis, governments worldwide are focussed on financial stability. Any hasty step which endangers that mandate may prove costly.
RBI Notifications

[op-ed snap] No good options in Afghanistan

Mains Paper 2 : Bilateral, Regional and Global Groupings and agreements involving India |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Doha Talks

Mains level : Peace in afghanistan seems elusive.


CONTEXT

In Afghanistan, ‘reconciliation’ means different things to different players and to different groups of Afghans.

Background

During the last 50 years, Afghanistan has been through different governance systems — monarchy till 1973; communist type rule, initially home-grown and then imposed by the U.S.S.R. with its 1979 intervention; jihadi warlordism in the early 1990s; shariat-based Taliban rule; and a democratic republic based on a presidential system since 2004.

Negotiating a U.S. exit

  • The U.S. began its operations in Afghanistan, primarily against the al-Qaeda, 18 years ago.
  • The cumulative cost has been over $800 billion on U.S. deployments and $105 billion on rebuilding Afghanistan, with nearly 2,400 American soldiers dead.

Trump’s Policy

  • U.S. President Donald Trump’s policy announced in August 2017 was aimed at breaking the military stalemate by authorising a small increase in U.S. presence, removing operational constraints, putting Pakistan on notice, improving governance and strengthening the capabilities of Afghan security forces.
  • Within a year, the policy failure was apparent.
  • Afghan government continued to lose territory and today controls less than half the country.
  • Since 2015, Afghan security forces have suffered 45,000 casualties with over 3,000 civilians killed every year.

Talks With Taliban

  • Last year, U.S. senior officials travelled to Doha to open talks with the Taliban, followed by the appointment of Ambassador Zalmay Khalilzad as Special Representative for Afghan Reconciliation.
  • Five rounds of talks have been held and a sixth is likely soon.

Terms of talks

  • Mr. Khalilzad is seeking guarantees that the Taliban will not provide safe haven to terrorist groups such as al-Qaeda and Afghan territory will not be used to launch strikes against the U.S., while the Taliban have demanded a date for U.S. withdrawal along with the release of all Taliban detainees in Guantánamo and Afghanistan.
  • Mr. Khalilzad has also sought a ceasefire in Afghanistan and engagement in an intra-Afghan dialogue in return.
  • Al-Fatah- The Taliban have responded with their new spring offensive, al-Fath, and refuse to engage with the Afghan government.
  • An intra-Afghan dialogue with political and civil society leaders planned for around the third week of this month in Doha was called off on account of the presence of Afghan officials.
  • Us exit is aim of talks -It is clear that Mr. Khalilzad is not negotiating peace in Afghanistan; he is negotiating a managed U.S. exit. Given the blood and treasure expended, the optics of the exit is important. As former U.S. Defence Secretary J. Mattis said, “The U.S. doesn’t lose wars, it loses interest”.

Increasing polarisation

  • There is growing polarisation in Afghanistan along ethnic and even sectarian divides.
  • With three presidential elections (in 2004, 2009 and 2014) and three parliamentary elections (in 2005, 2010 and 2018), faith in the electoral process and the election machinery has eroded.

Elusive peace

  • Mr. Khalilzad met with his Russian and Chinese counterparts in Moscow where the three reiterated support for “an inclusive Afghan-led, Afghan-owned peace process”.
  • However, there is no common understanding of what it means or which Afghans should own and lead the process.

The Pakistan factor

  • Pakistan is once again centre-stage as the country with maximum leverage. To demonstrate its support, Pakistan released Mullah Abdul Ghani Baradar, a leader and founder of the Taliban.
  •  Pakistan Prime Minister Imran Khan’s recent statement suggesting the formation of an interim government in Kabul to overcome the hurdles in the Doha talks provoking a furious backlash from Afghanistan from the government and the opposition figures.
  • Even Mr. Khalilzad dubbed the statement as ‘inappropriate’. Pakistan has since backtracked but it shows that old habits die hard.

Conclusion

  • Even without getting into details of why the post-Bonn order in Afghanistan is fraying, there is agreement that peace in Afghanistan cannot be restored by military action.
  • It is also clear that a prolonged U.S. military presence is not an answer.
  • The problem is that a U.S. withdrawal will end the U.S. war in Afghanistan but without a domestic and regional consensus, it will not bring peace to Afghanistan.
  • Sadly, today there are no good options in Afghanistan.
Foreign Policy Watch: India-Afghanistan

[op-ed snap] Lay off

Mains Paper 3 : Intellectual Property Rights |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : FL 2027

Mains level : Pepsico suit against farmers will not benefit anyone.


CONTEXT

PepsiCo’s suing nine Gujarat farmers for alleged infringement of its intellectual property rights (IPR) over a proprietary potato variety makes for bad optics, bordering on a public relations disaster.

Background

  • The American food-and-beverage giant enjoys IPR protection in India for FL 2027, a potato variety with high dry matter and low sugar content that is better suited for making chips (normal table potatoes have more moisture, which adds to dehydration and energy costs during processing, and higher sugar that causes blackening on frying).
  • Such protection is, indeed, required for incentivising agricultural research and development of new plant varieties by breeders, both in the private and public sectors.

 Protection of Plant Varieties and Farmers’ Rights Act

  • Under the Protection of Plant Varieties and Farmers’ Rights Act, 2001(PPVFRA), over 3,500 varieties across a range of crops — including those bred or improved by individual farmers — have so far been granted registration certificates for up to 15 years.
  • These certificates confer on the breeders the exclusive rights over commercial production, sale, marketing, distribution, export and import of their protected varieties.

Exceptions Allowed

  • However, the PPVFRA simultaneously entitles farmers to “save, use, sow, re-sow, exchange, share or sell” the produce and seeds of any variety protected under the Act.
  • Such freedom is conditional only upon no sale of such seeds in branded form — in other words, being “put in a package or any other container and labeled”.

No violation of IPR

It is clear from this that the Gujarat farmers had not committed any IPR infringement by merely growing FL 2027 potato, even if without PepsiCo’s authorisation.

Mutual benefit agreement

  • PepsiCo may have developed this processing-grade variety solely for its Lay’s chips and for contract cultivation by farmers through a buy-back mechanism at pre-fixed rates.
  • The company claims to be working with some 24,000 farmers across nine states.
  • It’s fair to assume they benefit from the arrangement, both on account of being insulated from open market price fluctuations — huge in potatoes — and also receiving quality farm inputs and extension support.
  • PepsiCo may, in turn, have legitimate concerns over farmers independently cultivating its proprietary varieties and possibly even supplying their produce to rival chips/French fries makers.
  • But that still does not constitute an IPR infringement.

Way Forward

  • It would be in PepsiCo’s best interest to simply withdraw its suit against the Gujarat farmers, without attaching conditions.
  • A $65-billion multinational seeking Rs one crore each of damages from Average Joe farmers of Sabarkantha — that too, during election time — is going to only invite opprobrium and consumer backlash.
  • The losses from that will far outweigh any pyrrhic legal victory.
Intellectual Property Rights in India

Indian subcontinent’s collision with Asia boosted oxygen in world’s oceans

Mains Paper 1 : Geographical Features & Their Location |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Indian Plate

Mains level : Plate Tectonics Theory, Continental Drift Theory


News

  • When the landmass that is now the Indian subcontinent slammed into Asia about 50 million years ago, the oxygen in the world’s oceans increased, altering the conditions for life.

Impact of Indian Plate

  • The collision was already known to have changed the configuration of the continents, the landscape, global climate and more.
  • Researchers used microscopic seashells to create a record of ocean nitrogen over a period from 70 million years ago – shortly before the extinction of the dinosaurs – until 30 million years ago.

Nitrogen dating to find Oxygen level

  • Every organism on Earth requires “fixed” nitrogen – sometimes called “biologically available nitrogen.”
  • Nitrogen has two stable isotopes: 15N and 14N. In oxygen-poor waters, decomposition uses up “fixed” nitrogen.
  • This occurs with a slight preference for the lighter nitrogen isotope, 14N, so the ocean’s 15N-to-14N ratio reflects its oxygen levels.
  • That ratio is incorporated into tiny sea creatures called foraminifera during their lives, and then preserved in their shells when they die.
  • By analysing their fossils researchers were able to reconstruct the 15N-to-14N ratio of the ancient ocean, and therefore identify past changes in oxygen levels.

Why study oxygen?

  • Oxygen controls the distribution of marine organisms, with oxygen-poor waters being bad for most ocean life.
  • Many past climate warming events caused decrease in ocean oxygen that limited the habitats of sea creatures, from microscopic plankton to the fish and whales that feed on them.
  • Scientists trying to predict the impact of current and future global warming have warned that low levels of ocean oxygen could decimate marine ecosystems, including important fish populations.
  • The researchers found that in the 10 million years after dinosaurs went extinct, the 15N-to-14N ratio was high, suggesting that ocean oxygen levels were low.
  • They first thought that the warm climate of the time was responsible, as oxygen is less soluble in warmer water.
  • Global climate was not the primary cause of this change in ocean oxygen and nitrogen cycling.

Back2Basics

Movement of Indian Plate

  • Until roughly 140 million years ago, the Indian Plate formed part of the supercontinent Gondwana. It was a large island situated off the Australian coast, in a vast ocean.
  • The Tethys Sea separated it from the Asian continent till about 225 million years ago.
  • India is supposed to have started her northward journey about 200 million years ago at the time when Pangaea
  • India collided with Asia about 40-50 million years ago causing rapid uplift of the Himalayas.
  • The positions of India since about 71 million years till the present are shown in the Figure. It also shows the position of the Indian subcontinent and the Eurasian plate.
  • About 140 million years before the present, the subcontinent was located as south as 50◦ S. latitude. The two major plates were separated by the Tethys Sea and the Tibetan block was closer to the Asiatic landmass.
  • During the movement of the Indian plate towards the Asiatic plate, a major event that occurred was the outpouring of lava and formation of the Deccan Traps. This started somewhere around 60 million years ago and continued for a long period of time.
  • Note that the subcontinent was still close to the equator. From 40 million years ago and thereafter, the event of formation of the Himalayas took place.
Global Geological And Climatic Events

Committee constituted to oversee clean air programme

Mains Paper 3 : Conservation, Environmental Pollution & Degradation, Eia |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : National Clean Air Plan (NCAP)

Mains level : Combating urban air pollution


News

  • The MoEFCC has constituted a committee to implement the National Clean Air Programme (NCAP), which aims to reduce particulate matter (PM) pollution by 20%-30% in at least 102 cities by 2024.

National Clean Air Programme (NCAP)

  • The NCAP unveiled in January is envisaged as a scheme to provide the States and the Centre with a framework to combat air pollution.
  • The NCAP is envisioned as a five-year action plan with 2019 as the first year. There would be a review every five years.
  • For achieving the NCAP targets, the cities would be expected to calculate the reduction in pollution, keeping 2017’s average annual PM levels as the base year.
  • The NCAP requires cities to implement specific measures such as:
  1. Ensuring roads are pothole-free to improve traffic flow and thereby reduce dust” (within 60 days) or
  2. Ensuring strict action against unauthorized brick kilns (within 30 days)
  • It doesn’t specify an exact date for when these obligations kick in.
  • Experts have criticised the lack of mandatory targets and the challenge of inadequate enforcement by cities.

Committee to implement NCAP

  • The committee will be chaired by the Secretary, Union Environment Ministry and has among its members the Joint Secretary (Thermal), Ministry of Power; Director-General, The Energy Resources Institute (TERI) etc.
  • The committee would be headquartered in New Delhi and its remit includes ensuring “inter-ministerial organisation and cooperation, sharing information and resolving issues that could arise between ministries.
  • The committee would also give overall guidance and directions to effectively implement the programmes.

Why such move?

  • The World Health Organization’s (WHO) database on air pollution over the years has listed Tier I and Tier II Indian cities as some of the most polluted places in the world.
  • In 2018, 14 of the world’s 15 most polluted cities were in India.
Air Pollution

Ishad Mango is under the threat of becoming rare

Mains Paper 3 : Food Processing & Related Industries In India |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Ishad Mango

Mains level : Not Much


News

  • A local mango variety called Ishad is facing the threat of becoming rare in its homeland, Ankola of Uttara Kannada district.

Ishad Mango

  • The mango has two variants — Kari Ishad, which has thin skin, more pulp and is sweeter, and Bili Ishad, which has thick skin and has less pulp and sweetness.
  • Some farmers did try to grow it outside Ankola taluk, but failed.
  • It is delicate to handle given its short shelf life. Hence, the fruit cannot be transported to faraway places.
  • The pulp of this mango has been extracted for over a century for making value-added products.
  • Oriental Canneries and Industries set up a unit in Ankola in 1908 to extract pulp from Ishad for making value-added products.
  • The then Bombay government supported it by supplying wood.
  • The pulp is used for making 48 recipes. It was being used in the United States, Australia and Sri Lanka.

Army invokes emergency powers for missiles deal

Mains Paper 3 : Various Security Forces, Agencies & Their Mandates |

Note4Students

From UPSC perspective, the following things are important :

Prelims level : VSHORAD, Spike-LR, Igla-S air defence systems

Mains level : Emergency financial powers to defence forces


News

  • The Army is in the process of procuring Spike-LR Anti-Tank Missiles from Israel and Igla-S Very Short Range Air Defence Systems (VSHORAD) from Russia through a set of new financial powers for emergency procurements sanctioned by the Defence Ministry earlier this month.

Emergency financial powers to Army

  • After the Pulwama attack, the government has given emergency powers to the armed forces for buying equipment to enable them to fight wars on the western border with Pakistan.
  • Under the latest emergency financial powers, armed forces have been given a free hand to procure equipment worth upto ₹300 crore on a priority basis.
  • The government also relaxed certain rules to cut delays in military purchase like allowing the three services to procure required weapons and equipment from a single vendor.
  • Entirely new systems not in use can also be procured under the new powers.
  • For the procurement under the emergency orders, the forces need not even take concurrence of the Integrated Financial Advisor from the defence finance department.
  • The defence Ministry feels that since the forces have to fight wars, they should decide on their requirement and priority in the acquisition and buy that equipment.
Indian Army Updates