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  • RBI signs $400 mn currency swap facility for Sri Lanka

    The RBI has agreed to a $400 million currency swap facility for Sri Lanka till November 2022.

    Practice question for mains:

    Q. What are Currency Swaps? Discuss the efficacy of Currency Swap Agreements for liberalizing bilateral trade.

    Why such move by RBI?

    • The RBI’s action follows a recent bilateral ‘technical discussion’ on rescheduling Colombo’s outstanding debt repayment to India.
    • Following the outbreak of COVID-19 in the region, India had proposed a virtual meeting to discuss the request. Sri Lanka owes $960 million to India.
    • In turn, Sri Lanka would facilitate, protect and promote a liberal ecosystem for Indian investors.

    What are Currency Swaps?

    • A currency swap, also known as a cross-currency swap, is an off-balance sheet transaction in which two parties exchange principal and interest in different currencies.
    • Currency swaps are used to obtain foreign currency loans at a better interest rate than could be got by borrowing directly in a foreign market.

    How does it work?

    • In a swap arrangement, RBI would provide dollars to a Lankan central bank, which, at the same time, provides the equivalent funds in its currency to the RBI, based on the market exchange rate at the time of the transaction.
    • The parties agree to swap back these quantities of their two currencies at a specified date in the future, which could be the next day or even three months later, using the same exchange rate as in the first transaction.
    • These swap operations carry no exchange rate or other market risks, as transaction terms are set in advance.

    Why does one need dollars?

    • FPIs investors look for safer investments but the current global uncertainty over COVID outbreak has led to a shortfall everywhere in the global markets.
    • This has pulled down foreign exchange reserves of many small and developing countries.
    • This means that the government and the RBI cannot lower their guard on the management of the economy and the external account.

    Benefits of currency swap

    • The absence of an exchange rate risk is the major benefit of such a facility.
    • This facility provides the flexibility to use these reserves at any time in order to maintain an appropriate level of balance of payments or short-term liquidity.
    • Swaps agreements between governments also have supplementary objectives like the promotion of bilateral trade, maintaining the value of foreign exchange reserves with the central bank and ensuring financial stability (protecting the health of the banking system).

  • What is Khazan Farming System?

    The Salim Ali Bird Sanctuary in low-lying floodplains of Goa is characterized by an estuarine agricultural system called Khazan farming.

    Try this question from our AWE initiative:

    How far is the Integrated Farming System (IFS) helpful in sustaining agricultural production? (10 Marks)

    Khazan Farming

    • The low-lying floodplains of Goa host an estuarine agricultural system called Khazan farming.
    • This system is a carefully designed topo-hydro-engineered agro-aquacultural ecosystem mainly based on the regulation salinity and tides.

    How does it work?

    • Centuries ago, people in this region reclaimed low-lying brackish coastal floodplains and mangrove forests.
    • They constructed bunds using locally available material to prevent the ingress of saltwater, which killed the halophilic mangroves.
    • To control the flow of tidal waters, they built openings in bunds fitted with one-way gates.
    • These channels would fill in with the oncoming tide and bring with them fish, crab and shrimp, and the gates would automatically shut when the water level was equal on both sides.
    • This prevented the water from overflowing into the fields used to grow paddy and which has a low tolerance to salt.
    • When the tide receded, these gates would open outwards automatically, allowing the water to drain out.
    • During this time, a bag net was set at the gate to catch fish that had entered in earlier.

    Benefits of Khazan

    • Every bit of space was precious and used efficiently — the bunds were used to grow a variety of vegetables.
    • The Khazan system allowed for the farmer and the fisher to harmoniously coexist and was the key to sustaining what is considered Goa’s staple — fish, curry and rice.

    Why is it neglected these days?

    • Today, for various reasons, but primarily due to post-independence agrarian reforms of 1961, these lands largely lie fallow and are in a state of decay.
    • Lack of cultivation and maintenance of the bunds and sluice gates is leading to their breaching and the natural reclamation of these fallow lands by mangroves.
    • Moreover, mangroves are protected by law and it is illegal to cut them.
    • Areas that have these trees growing on them also come under the purview of the coastal regulation zone (CRZ); according to the 2011 notification, the mangrove areas are classified as CRZ I and cannot be developed upon.

    Back2Basics: Salim Ali Bird Sanctuary

    • The Salim Ali Bird Sanctuary is Goa’s smallest protected area — it comprises barely two square kilometres of lush mangrove forests.
    • The sanctuary is located on Chorão, one of Goa’s estuarine islands in the Mandovi river approximately five kilometres from capital Panaji.
    • The sanctuary and its surrounds are home to marsh crocodiles, smooth-coated otter, the unique glossy-marsh snake that feeds on crabs, mud lobsters, sap-sucking sea slugs, among others.

  • In news: National Centre for Disease Control (NCDC)

    India’s premier organisation mandated to collect data about diseases, the NCDC is failing in its task as the spread of COVID-19 continues unabated.

    Practice question for mains:

    Q. Health infrastructure in India is hardly capable of handling any pandemic. Critically comment.

    About the National Centre for Disease Control

    • The NCDC carries out nationwide disease surveillance through its Integrated Disease Surveillance Programme (IDSP).
    • It is a vertical programme under Directorate General of Health Services.

    Its formation

    • This programme has been present in the country in different avatars since 1997 when the National Surveillance Programme for Communicable Diseases was set up.
    • This was upscaled to the Integrated Disease Surveillance Project in 2004, with assistance from the World Bank, to address the demands of the WHO’s International Health Regulations, 2005.
    • Under this, each country had to assess public health emergencies of international concern within 48 hours and report them to WHO within the next 24 hours.
    • It was then included in the 12th Plan (2012-17) under the Union Health Ministry and renamed IDSP.

    Mandate of the NCDC

    To aid the process of an investigation, NCDC has put down 10 steps that need to be followed for each outbreak:

    • Determine the existence of an outbreak
    • Confirm the diagnosis
    • Define a case
    • Search for cases
    • Generate hypothesis using descriptive findings
    • Test hypothesis with the analytical study
    • Draw conclusions
    • Compare hypothesis with established facts
    • Communication of findings
    • Execute preventive measures

    Why did NCDC fail?

    • IDSP’s manual says weekly and monthly updates are mandatory for each State and UTs even if no outbreaks are reported.
    • But this has never been observed to date.
    • There is an overlap between the diseases being followed by IDSP and other agencies like the National Vector Borne Disease Control Programme
    • The fact that IDSP does not collect mortality data was also a concern. Moreover, the IDSP was not investigating zoonotic diseases.

  • [pib] Kumhar Sashaktikaran Yojana (KSY)

    The Centre has distributed 100 electric potter wheels to 100 trained artisans under the KSY.

    Try this question from CSP 2018:

    Q. Consider the following provisions under the Directive Principles of State Policy as enshrined in the Constitution of India:

    1. Securing for citizens of India a uniform civil code.
    2. Organising village panchayats.
    3. Promoting cottage industries in rural areas.
    4. Securing for all the workers reasonable leisure and Cultural opportunities.

    Which of the above are the Gandhian Principles that are reflected in the DPSP?

    (a) 1, 2 and 4

    (b) 2 and 3

    (c) 1, 3 and 4

    (d) 1, 2, 3 and 4

    Kumhar Sashaktikaran Yojana

    • KSY is an initiative of the Khadi and Village Industries Commission (KVIC) for the empowerment of potters’ community in the remotest of locations in the country.
    • It reaches out to the potters in U.P., M.P., Maharashtra, J&K, Haryana, Rajasthan, West Bengal, Assam, Gujarat, Tamil Nadu, Odisha, Telangana and Bihar.

    Benefits provided

    This program provides the following support to potters.

    • Training for advanced pottery products
    • Latest, new technology pottery equipment like the electric Chaak
    • Market linkages and visibility through KVIC exhibitions

    Back2Basics: KVIC

    • The KVIC is a statutory body formed in April 1957 under the ‘Khadi and Village Industries Commission Act of 1956’.
    • It is an apex organisation under the Ministry of Micro, Small and Medium Enterprises, with regard to khadi and village industries within India.
    • It seeks to plan, promote, facilitate, organise and assist in the establishment and development of khadi and village industries in the rural areas.
    • Its head office is in Mumbai, whereas its six zonal offices in Delhi, Bhopal, Bangalore, Kolkata, Mumbai and Guwahati.

  • Rosalind Franklin: the unsung heroine of DNA

    The famous British scientist and virologist Rosalind Franklin is remembered across the world on her birth centenary who worked to construct the double-helix structure of DNA.

    Try this PYQ from CSP 2019:

    DNA/RNA has been an all-time favourite of UPSC!

    Q.‘RNA interference (RNAi)’ technology has gained popularity in the last few years. Why?

    1. It is used in developing gene-silencing therapies.
    2. It can be used in developing therapies for the treatment of cancer.
    3. It can be used to develop hormone replacement therapies.
    4. It can be used to produce crop plants that are resistant to viral pathogens.

    Select the correct answer using the code given below:

    (a) 1, 2 and 4

    (b) 2 and 3

    (c) 1 and 3

    (d) 1 and 4 only

    Rosalind Franklin (1920-1958)

    • She was an English chemist and X-ray crystallographer whose work was central to the understanding of the molecular structures of DNA (deoxyribonucleic acid), RNA (ribonucleic acid), viruses, coal, and graphite.
    • Although her works on coal and viruses were appreciated in her lifetime, her contributions to the discovery of the structure of DNA were largely recognised posthumously.

    DNA breakthrough

    • In 1952, Raymond Gosling, a graduate student at King’s College London, took a historic X-ray photograph under Franklin’s supervision.
    • Photo 51, as it is called, demonstrates the now-familiar, double-helix structure of DNA.

    Why is she remembered now?

    • The world is currently gripped in a pandemic, and her pioneering research in virology provided a crucial early step in the search for cures, vaccinations and tests.
    • During the Second World War, Franklin carried out research into coal and graphite that proved important for gas-masks, the PPE of that time.
    • It is because of Franklin, her collaborators and successors, that today’s researchers are able to use tools such as DNA sequencing and X-ray crystallography to investigate viruses such as COVID-10.

    Back2Basics: DNA/RNA 

    • Deoxyribonucleic acid (DNA) and Ribonucleic acid (RNA) are perhaps the most important molecules in cell biology, responsible for the storage and reading of genetic information that underpins all life.
    • They are both linear polymers, consisting of sugars, phosphates and bases, but there are some key differences which separate the two.
    • These distinctions enable the two molecules to work together and fulfil their essential roles.
    • DNA encodes all genetic information and is the blueprint from which all biological life is created. And that’s only in the short-term.
    • In the long-term, DNA is a storage device, a biological flash drive that allows the blueprint of life to be passed between generations.
    • RNA functions as the reader that decodes this flash drive. This reading process is multi-step and there are specialized RNAs for each of these steps.

    Three types of RNA

    • Messenger RNA (mRNA) copies portions of genetic code; a process called transcription and transports these copies to ribosomes, which are the cellular factories that facilitate the production of proteins from this code.
    • Transfer RNA (tRNA) is responsible for bringing amino acids, basic protein building blocks, to these protein factories, in response to the coded instructions introduced by the mRNA. This protein-building process is called translation.
    • Finally, Ribosomal RNA (rRNA) is a component of the ribosome factory itself without which protein production would not occur.

  • Deepening ties with South Korea

    South Korea’s technological advancement and manufacturing capabilities can be helpful in India’s economic growth and human resource development. Seoul’s successful development story of the last few decades can complement Modi’s vision of making a “New India” by 2022.

  • Gold and forex reserves cannot finance stimulus

    The article analyses the issues with suggestions like printing of currency and using forex reserves to finance the stimulus. They also lead to an increase in government debts.

    Context

    • Prime Minister announced a stimulus package of ₹20 trillion to fight the economic fallout of the covid pandemic.
    • Since then, several unorthodox ideas have been floated to raise funds for it without straining government finances.
    • Among the suggestions are the printing of currency, and using foreign exchange reserves or household gold.

    Let’s look at entries in the RBI’s balance sheets

    • On the liabilities side of it is the currency in circulation, commercial bank reserves  and government reserves.
    • On the asset side of it is forex reserves, government securities and gold.
    • The balancing item represents the central bank’s equity and accumulated surplus.

    Let’s look at 3 options suggested above and issues with them-

    1) Printing currency

    • Doing this would increase the liabilities of the RBI under “currency in circulation”.
    • But it first needs to acquire assets to offset this increase in liability.
    • These assets could be government securities, forex reserves or gold.
    • Thus, one way for the government to finance its expenditure would be to issue government bonds and ask RBI to print currency with which to subscribe to such bonds.
    • This is known as deficit monetization.
    •  It is important to note that for the central bank to print money, the government would have to issue bonds to it.
    • It will increase government debt.

    2) Monetisation of gold held by household

    • This would first involve the government buying gold from households in exchange for its bonds.
    • Then, the accumulated gold would be bought by RBI from the government with newly printed currency.
    •  In this case, instead of creating new money to acquire government bonds, RBI would be doing the same to acquire gold.
    • This too involves the Centre taking on additional debt.
    •  Moreover, gold monetization schemes in the past have yielded only mild success.

    3) Using RBI’s forex reserves

    • Against every dollar of forex reserves shown by RBI on the asset side, an equivalent rupee amount has already been created on the liability side.
    • This is because whenever RBI acquires foreign currency, it pays for it using the Indian rupee.
    • Thus, no additional currency can be printed against such already-acquired reserves.
    • The only way our forex reserves can be used for generating additional resources is by pledging them to a third party.
    • The pledging of RBI’s assets to raise funds is done only under extreme circumstances, for instance, during the 1991 balance of payments crisis.
    • We are certainly not in a situation that warrants a repeat of an exercise where RBI’s assets, be it gold or forex reserves, have to be mortgaged.

    So, what is the way out?

    • There are only three ways to finance government expenditure: taxes, debt and asset sales.
    • Taxes and asset sales can pitch in a bit towards the stimulus bill.

    Consider the question “Examine the ways in which government can raise the funds to finance the stimulus package and also discuss the issues with each move.”

    Conclusion

    There is no escaping the fact that we are staring at a higher build-up of government debt in the future. When we stop harbouring the notion that we can pay the stimulus bill without any deterioration in government finances, we will be able to see the bitter truth: There is no such thing as a free lunch.

    Read more about the issue here:

    India’s rising Forex Reserves

  • False urban rural binary

    The article brings out the issues in the rural-urban binary, which leads to the disparity in the allocation of resources to the urban areas.

    Congestion and health issues in cities

    • The congestion in large cities has turned out to be their worst enemy during this pandemic.
    • Congestion is most evident in slums in large cities and poses a grave health and environmental challenges.
    • Yet, the Centre’s allocation for the rural component of the Swachh Bharat Mission is about seven times more than for urban areas.
    • Class I cities have 1.4 beds per 1,000 people. (with the population more than 1 lakh)
    • However, the urban support under the National Health Mission is just three per cent of the total allocation, while 97 per cent of the funds are set aside for rural areas.

    Issues with the present urban development programs

    • The Jawaharlal Nehru National Urban Renewal Mission (2005-2014) allocated the bulk of funds to large cities: 70 per cent to large cities and 30 per cent to smaller towns.
    • Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and the Smart Cities Mission, focus on Class I cities.
    • Both these schemes provide funds for the more developed cities that already have relatively better infrastructure.
    • But these schemes overlook the nearly seven crore people who live in smaller towns.
    • These are towns that lag behind in services and infrastructure as compared to the big cities.

    Consider the question “The rural-urban binary has led to the policy formulation in which there is a huge disparity in the allocation of resources and attention on the urban area. Comment.”

    Conclusion

    The pandemic has forced us to reflect on the unequal and unplanned development of urban settlements and the absence of infrastructure to provide for the teeming millions.  The challenges of urban poverty and congestion cry for more attention, more government support.

    Original article:

    https://indianexpress.com/article/opinion/columns/coronavirus-covid-19-pandemic-india-urban-cities-6520574/

  • Women officers can now get permanent commission in Indian Army

    The Ministry of Defence (MoD) has issued the formal Government Sanction Letter for grant of Permanent Commission (PC) to women officers in the Army.

    Try this question for mains:

    Q.“Concern for equality of sexes or political expediency should not influence defence policies.” Discuss on lines with the debate over the induction of women in the armed forces.

    Also read: https://www.civilsdaily.com/burning-issue-women-in-armed-forces/

    Why such an order?

    • The order follows a Supreme Court verdict in February that directed the government that women Army officers be granted PC and command postings in all services other than combat.
    • Following this, Army Chief had said it was an enabling one and gives a lot of clarity on how to move forward.
    • He had stated that the same procedure for male SSC officers will be followed for women to give PC.

    Women in Army: Background of the case

    • The induction of women officers in the Army started in 1992.
    • They were commissioned for a period of five years in certain chosen streams such as Army Education Corps, Corps of Signals, Intelligence Corps, and Corps of Engineers.
    • Recruits under the Women Special Entry Scheme (WSES) had a shorter pre-commission training period than their male counterparts who were commissioned under the Short Service Commission (SSC) scheme.
    • In 2006, the WSES scheme was replaced with the SSC scheme, which was extended to women officers. They were commissioned for a period of 10 years, extendable up to 14 years.
    • Serving WSES officers were given the option to move to the new SSC scheme or to continue under the erstwhile WSES.
    • They were to be, however, restricted to roles in streams specified earlier — which excluded combat arms such as infantry and armoured corps.

    2 key arguments shot down

    • The Supreme Court rejected arguments against a greater role for women officers, saying this violated equality under the law.
    • They were being kept out of command posts on the reasoning that the largely rural rank and a file will have problems with women as commanding officers. The biological argument was also rejected as disturbing.
    • While male SSC officers could opt for permanent commission at the end of 10 years of service, this option was not available to women officers.
    • They were, thus, kept out of any command appointment, and could not qualify for a government pension, which starts only after 20 years of service as an officer.
    • The first batch of women officers under the new scheme entered the Army in 2008.

    Arguments by the Govt

    • The Centre had mentioned several reasons behind the differential treatment of women officers.
    • It had proposed that women officers with up to 14 years of service would be granted a permanent commission, while those above 14 years would be permitted to serve for up to 20 years and retire with pension without being considered for permanent commission.
    • It also stated that those with more than 20 years of service would immediately be released with pension
    • This order did not grant permanent commission to women with over 14 years of service, and hence discriminatory.
    • Furthermore, the 2019 order granted permanent commission only for staff appointments and not command appointments.
    • The centre justified this by stating that that the units in Army are composed entirely of male soldiers, who are mostly from rural backgrounds and thus, are not mentally prepared to accept women officers in the command of units.
    • It also stated that the lower physical capacity of women officers would be a challenge for them to command units wherein officers are expected to lead the men from the front and need to be in prime physical condition to undertake combat tasks.
    • The government also stated that the adverse conditions, including two unsettled borders and internal security situations in the northeast and Jammu and Kashmir, have a major bearing on the employment of women officers in light of their physiological limitations.
    • Also, it had stated that the isolation and hardships would eat into their resolve and that they have to heed to the call of pregnancy, childbirth and family.
    • The government also argued that women ran the risk of capture by the enemy and being taken as prisoners of war.

    SC Criticized the Government’s Note

    • Reflects Poorly on Women: The note had shown women officers in a poor light, saying isolation and hardships would eat into their resolve and that they would have to heed to the call of pregnancy, childbirth and family. The note had mentioned that women ran the risk of capture by enemy and taken prisoner of war.
    • Patriarchal Notion: The court held that the the note reflected the age-old patriarchal notion that domestic obligations rested only with women.
    • Sex Stereotype: The court also dismissed the point that women are physiologically weaker than men as a “sex stereotype”.
    • Offence to dignity of Indian Army: The court noted that challenging abilities of women on the ground of gender is an offence not only to their dignity as women but to the dignity of the members of the Indian Army – men and women – who serve as equal citizens in a common mission.

    Implications of the judgement

    • The SC did away with all discrimination on the basis of years of service for grant of PC in 10 streams of combat support arms and services, bringing them on a par with male officers.
    • It has also removed the restriction of women officers only being allowed to serve in staff appointments, which is the most significant and far-reaching aspect of the judgment.
    • It means that women officers will be eligible to the tenant all the command appointments, at par with male officers, which would open avenues for further promotions to higher ranks for them.
    • It also means that in junior ranks and career courses, women officers would be attending the same training courses and tenanting critical appointments, which are necessary for higher promotions.

    Back2Basics: Permanent Commission (PC) Vs. Short Service Commission (SSC)

    • SSC means an officer’s career will be of a limited period in the Indian Armed Forces whereas a PC means they shall continue to serve in the Indian Armed Forces, till they retire.
    • The officers inducted through the SSC usually serve for a period of 14 years. At the end of 10 years, the officers have three options.
    • A PC entitles an officer to serve in the Navy till he/she retires unlike SSC, which is currently for 10 years and can be extended by four more years, or a total of 14 years.
    • They can either select for a PC or opt-out or have the option of a 4-years extension. They can resign at any time during this period of 4 years extension.

  • Open Credit Enablement Network (OCEN)

    A new credit protocol infrastructure called the OCEN protocol is set to be launched very soon.

    Practice question for mains:

    Q. What is Open Credit Enablement Network (OCEN)? How it is expected to be a gamechanger in the micro-credit facilitation services in India?

    Open Credit Enablement Network (OCEN)

    • OCEN is a credit protocol infrastructure, which will mediate the interactions between loan service providers, usually fintech and mainstream lenders, including all large banks and NBFCs.
    • It is developed by a think tank, Indian Software Products Industry Round Table (iSPIRT).
    • With this, a credit will become more accessible for a large number of entrepreneurs and small businesses in the country.
    • Private equity and venture capital players, angel investors, high net worth individuals and others also could be part of this exercise as investors.

    How will it work?

    • iSpirit is partnering with key leaders such as SBI, HDFC Bank Ltd., ICICI Bank Ltd., IDFC First Bank Ltd., Axis Bank Ltd. etc. for this new credit rail.
    • Account Aggregators which will be using these APIs to embed credit offerings in their applications, and will be called ‘Loan Service Providers’, which will play a crucial role in democratizing access to credit, and lowering interest rates for customers.

    Why need OCEN?

    • The cost of lending being too high in India, small value loans becomes very unfeasible.
    • OCEN which seeks to connect lenders to marketplaces and thereby to borrowers is a technology system.
    • If implemented, the technology can democratize lending to micro-enterprises and street vendors in a big way.