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May 2019

Lakshadweep recruits Barn Owls to fight rodent menace


From UPSC perspective, the following things are important :

Prelims level : Barn Owls

Mains level : Not Much

  • With a thriving rat population playing havoc with its coconut yield, the UT of Lakshadweep hires barn owls for help.

What is barn?

  • A barn is an agricultural building usually on farms and used for various purposes.
  • It refers to structures that house livestock, including cattle and horses, as well as equipment and fodder, and often grain.

Recruiting barn owls

  • Coconut is an important money-spinner for the islands, but the pesky rodents account for 30-40% of the yield loss.
  • However, employing owls to hunt down rats is not exactly a new idea for the islanders.
  • Similar attempts were reportedly made in the 1960s as well.
  • The birds were reintroduced in the 19th century for rodent management.

Why barn owls?

  • The reason is that the rats in the Lakshadweep Islands practically live on treetops.
  • The coconut palms here grow so close together that they resemble a jungle. The fronds overlap, allowing the rodents to move easily from one tree to another.
  • Besides, the nocturnal barn owls are natural rat hunters, armed with a powerful auditory mechanism.
  • There is also an important environmental angle to Lakshadweep’s decision to choose biocontrol.
  • The islands being a designated organic zone, use of chemicals for pest control is a strict no-no.
  • If successful, the barn owl campaign will be extended to other islands in Lakshadweep as well.

Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

India facing critical shortage of healthcare providers: WHO


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Healthcare lacunae in India

  • Despite the health sector employing five million workers, India continues to have low density of health professionals.

Critical Shortage in India

  • India faces the problem of acute shortages and inequitable distributions of skilled health workers as have many other low- and middle-income countries.
  • The figures for India are lower than those of Sri Lanka, China, Thailand, United Kingdom and Brazil, according to a WHO database.
  • This workforce statistic has put the country into the “critical shortage of healthcare providers” category.
  • Bihar, Jharkhand, Uttar Pradesh and Rajasthan are the worst hit while Delhi, Kerala, Punjab and Gujarat compare favorably.

Health workforce in India

  • The health workforce in India comprises broadly eight categories, namely: doctors (allopathic, alternative medicine); nursing and midwifery professionals; public health professionals (medical, non-medical); pharmacists; dentists; paramedical workers (allied health professionals); grass-root workers (frontline workers); and support staff.

WHO says

  • Data on the prevalence of occupational vacancies in the health care system in India overall is scarce.
  • Government statistics for 2008, based on vacancies in sanctioned posts showed 18% of primary health centres were without a doctor, about 38% were without a laboratory technician and 16% were without a pharmacist.
  • The need of the hour is to design courses for different categories of non-physician care providers.
  • Competencies (and not qualification alone) should be valued and reform must be brought in regulatory structures to provide flexibility for innovations.

Indian Air Force Updates

IAF gets first Apache Guardian attack helicopter


From UPSC perspective, the following things are important :

Prelims level : Apache Helicopters

Mains level : Modernization of armed forces

  • US aerospace major Boeing has handed over first of the 22 Apache Guardian attack helicopters to the Indian Air Force today.
  • The addition of AH-64E (I) Apache helicopter is a significant step towards modernization of the force’s chopper fleet.

AH-64E Apache

  • The AH-64E Apache is a leading multi-role attack helicopter and is flown by the US Army.
  • The helicopter has been customised to suit the IAF’s future requirements and would have significant capability in mountainous terrain.
  • It has the capability to carry out precision attacks at standoff ranges and operate in hostile airspace with threats from ground.
  • Its ability to transmit and receive the battlefield picture, to and from the weapon systems through data networking makes it a lethal acquisition.

Commonwealth Secretariat Arbitrary Tribunal


From UPSC perspective, the following things are important :

Prelims level : About the tribunal

  • Justice A.K. Sikri of the Supreme Court turned down an offer from the government to nominate him to the London-based Commonwealth Secretariat Arbitrary Tribunal (CSAT).

Commonwealth Secretariat Arbitrary Tribunal

  • The CSAT was established to meet the requirements of the Agreed Memorandum on the Commonwealth Secretariat (1964) in London.
  • It resolves disputes of the Commonwealth organisations, international or intergovernmental.
  • The Tribunal entertains only such cases in which organisations agree to surrender to its jurisdiction.
  • The statute of the CSAT, which was adopted first by Commonwealth governments in 1995, requires the eight-member CSAT to comprise Commonwealth nationals of “high moral character”,
  • They should have held “high judicial office in a Commonwealth country” or jurists of recognised competence with not less than 10 years’ experience.
  • Their tenure is four years with room for one additional term.

Foreign Policy Watch: India-Iran

[op-ed snap] Gulf warning


From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Us Iran tensions might disturb peace in middle east.


Tehran’s decision to stop adhering to some of the provisions of the landmark 2015 nuclear agreement with the international community is a sharp reminder that dark clouds are gathering again in the Middle East.

Reasons for Tehran’s Decision

  • When US President Donald Trump pulled out last year from the nuclear deal negotiated by his predecessor, Barack Obama, Iran had the option of walking out too. It did not.
  • Tehran had hoped that the European powers as well as Russia and China might help limit the effects of America’s renewed hostility.
  • The Europeans had criticised the US withdrawal, affirmed that Iran was in compliance with the nuclear agreement, and offered to sustain economic engagement with Iran if Tehran stayed true to the deal. China and Russia had criticised the US decision as unilateral and arbitrary.
  • But Iran’s hopes of exploiting the cracks among the great powers are looking increasingly unreal as the actions of Europe, China and Russia have not matched their words. Iran’s “strategic patience”, in the words of President Hassan Rouhani, is wearing thin.

Hostile Actions by USA

Meanwhile, the Trump Administration is ratcheting up pressure on Iran.

1.Terming Iran’s armed forces as terrorist Organisation –

  • Last month, it designated the Iranian Islamic Revolutionary Guard Corps (IRGC) as a terrorist organisation.
  • This is the first time the US has labeled the entire wing of a country’s armed force as “terrorist”.

2.Dispatching Aircraft towards Gulf

  • Citing an unexplained threat from Iran, President Trump has despatched the USS Abraham Lincoln aircraft carrier strike group towards the Gulf.

3. Sanctions impacting Iran -Meanwhile, US sanctions aimed at choking Iran’s oil exports and squeezing its finances are beginning to bite.

Tehran’s apprehensions

  • Tehran has no reason to believe that the Trump Administration is open to a reasonable compromise that might include a revised nuclear deal to address any real US concerns.
  • It is no secret in Washington that regime change in Tehran is the Trump Administration’s real goal.

Implications of this decision

  • Iran’s partial withdrawal from the nuclear agreement is aimed at convincing Washington’s allies in Europe as well as its competitors that time is running out to save the deal.
  • Tehran is conscious of Europe’s difficulty in effecting a real break with the US in the Middle East.
  • It also knows that China and Russia have their own fish to fry with America and are unlikely to challenge the US on Iran.
  • Worse still, Moscow and Beijing could use Tehran as a lever in their bargaining with the US.
  • Iran might lack real friends among the major powers, but it has the capacity to bring the house down in the Middle East.
  • With armed proxies across the region, Tehran is well placed to launch an asymmetric war against the US and its allies.
  • Iran has also threatened to close the Straits of Hormuz — the strategic waterway that moves oil from inside the Gulf to the rest of the world — if its own oil sales remain blocked.
  • With neither side ready to step back, the conflict between the US and Iran might well be headed for a costly showdown.

Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

[op-ed snap] A fraught moment: U.S.-China trade war


From UPSC perspective, the following things are important :

Prelims level : Trade War

Mains level : US-China Trade war will impact global Economy harshly.


The U.S.-China trade war has flared up again after a deceptive lull over the last few months, when both sides were trying to negotiate a deal.

Present Situation

  • Out of nowhere, President Donald Trump tweeted that he would raise the 10% tariff imposed on $200-billion worth of Chinese goods to 25%, starting Friday. That the Trump administration pressed ahead with the increase even as China’s Vice Premier Liu He was still in Washington for a second day of talks with U.S. trade officials only underscores the businessman-turned-President’s ‘take no prisoners’ approach to negotiations.
  • China promptly promised retaliatory action, but was yet to spell out the measures.
  • With Mr. Trump tweeting that “the process has begun to place additional tariffs at 25% on the remaining” Chinese goods worth $325 billion, the U.S. administration unambiguously signalled it was not going to be the first to blink.

Implications for the global economy

  • The increase in tariffs imposed on goods crossing international borders essentially represents a new tax on a global economy already facing a slowdown.
  • Last month, the International Monetary Fund trimmed its projection for global growth in 2019 to 3.3%, from a 3.5% forecast made in January, citing slowing momentum in “70% of the world economy”.
  • IMF Chief Economist Gita Gopinath had at the time projected a pick-up in global growth momentum in the second half, predicated substantially on the “improved” outlook for U.S.-China trade tensions.
  • IMF chief Christine Lagarde and Ms. Gopinath, however, presciently warned that the world economy was poised at “a delicate moment”.
  • Were tensions in trade policy to flare up again, it could result in large disruptions to global supply chains and pose downside risks to global growth, the IMF warned.
  • Barely a month later, the world economy faces the very real risk of an escalation in this trade war where other countries, including India, can largely only wait and watch as the U.S. and China raise the pitch.

implications for American Economy

  • While the U.S. may have genuine concerns about Chinese protectionism, the overall economic logic behind Mr. Trump’s trade policy still remains weak.
  • The cost of these tariffs will, after all, eventually be borne by American consumers and could result in U.S. job losses too as the import of Chinese parts become uneconomical for smaller businesses.

Implications for India

Indian policymakers would do well to closely monitor how the latest escalation in trade tensions pans out for global demand and international energy prices, given that the RBI has flagged oil price volatility as a factor that would have a bearing on India’s inflation outlook.

NPA Crisis

[op-ed snap] Resolving India’s banking crisis


From UPSC perspective, the following things are important :

Prelims level : NPA

Mains level : Resolving NPA crisis


The government that assumes office after the general election will have to crack a serious and unresolved problem: India’s banking sector.


  • Non-performing assets (NPAs) at commercial banks amounted to ₹10.3 trillion, or 11.2% of advances, in March 2018. Public sector banks (PSBs) accounted for ₹8.9 trillion, or 86%, of the total NPAs.
  • The ratio of gross NPA to advances in PSBs was 14.6%.
  • These are levels typically associated with a banking crisis.

Origin of the crisis

1. Credit Boom –

  • The answer lies partly in the credit boom of the years 2004-05 to 2008-09. In that period, commercial credit (or what is called ‘non-food credit’) doubled. I
  • Indian firms borrowed furiously in order to avail of the growth opportunities they saw coming.
  • Most of the investment went into infrastructure and related areas — telecom, power, roads, aviation, steel. Businessmen were overcome with exuberance, partly rational and partly irrational.

2.Problems with projects

  • Thereafter, as the Economic Survey of 2016-17 notes, many things began to go wrong.
  • Thanks to problems in acquiring land and getting environmental clearances, several projects got stalled.
  • At the same time, with the onset of the global financial crisis in 2007-08 and the slowdown in growth after 2011-12, revenues fell well short of forecasts. Financing costs rose as policy rates were tightened in India in response to the crisis.
  • The depreciation of the rupee meant higher outflows for companies that had borrowed in foreign currency.
  • This combination of adverse factors made it difficult for companies to service their loans to Indian banks.
  • The year 2014-15 marked a watershed.
  • The Reserve Bank of India (RBI), acting in the belief that NPAs were being under-stated, introduced tougher norms for NPA recognition under an Asset Quality Review.
  • NPAs in 2015-16 almost doubled over the previous year as a result.  It’s just that the cumulative bad decisions of the past were now coming to be more accurately captured.

Impact of higher NPAs

  • Higher NPAs mean higher provisions on the part of banks.
  • Provisions rose to a level where banks, especially PSBs, started making losses. Their capital got eroded as a result. Without adequate capital, bank credit cannot grow.
  • Even as the numerator in the ratio of gross NPAs/advances rose sharply, growth in the denominator fell.

Reason for high NPAs in Public Sector Banks

  • PSBs had a higher exposure to the five most affected sectors — mining, iron and steel, textiles, infrastructure and aviation.
  • These sectors accounted for 29% of advances and 53% of stressed advances at PSBs in December 2014.
  • For private sector banks, the comparable figures were 13.9% and 34.1%. Our rough calculations show that PSBs accounted for 86% of advances in these five sectors.

Plans to prevent such crises

1. Resolve NPAs –

  • One immediate action that is required is resolving the NPAs.
  • Banks have to accept losses on loans (or ‘haircuts’).
  • They should be able to do so without any fear of harassment by the investigative agencies.

2. Loan Resolution Authority – An alternative is to set up a Loan Resolution Authority, if necessary through an Act of Parliament.

3. Recapitalising Banks – Second, the government must infuse at one go whatever additional capital is needed to recapitalise banks — providing such capital in multiple instalments is not helpful.

4. Monitoring macro-prudential indicators –Over the medium term, the RBI needs to develop better mechanisms for monitoring macro-prudential indicators.

5.Governance strengthening at PSBs – Actions needs to be taken to strengthen the functioning of banks in general and, more particularly, PSBs. Governance at PSBs, meaning the functioning of PSB boards, can certainly improve.

6.Risk management

  • Other aspects of concentration risk remain to be addressed. We need to induct more high-quality professionals on PSB boards and compensate them better.
  • Succession planning at PSBs also needs to improve.


The task of accelerating economic growth is urgent. This is not possible without finding a solution to the problems that confront the banking system. There is ample scope for improving performance within the framework of public ownership. It can be done. What is needed is a steely focus on the part of the government.