Part of: Prelims and GS-III -Biodiversity; Environment
Context: The population of the vulnerable eastern swamp deer, which is extinct elsewhere in South Asia, has dipped in the Kaziranga National Park and Tiger Reserve.
Key takeaways
The eastern swamp deer is endemic to Kaziranga and is not the primary prey of the park’s carnivores, primarily the tiger.
But its population is crucial for the ecological health of the tiger reserve.
The encouraging sign is the animal has now moved to other areas such as Orang National Park and Laokhowa-Burachapori wildlife sanctuaries.
About Swamp deer
There are three subspecies of swamp deer found in the Indian Subcontinent.
The western swamp deer found in Nepal,
Southern swamp deer/Hard Ground Barasingha, found in central and north India and
Eastern swamp deer found in the Kaziranga (Assam) and Dudhwa National Parks (Uttar Pradesh).
Context: The Union Cabinet has approved a three-year extension of the tenure of the National Commission for Safai Karamcharis that was set to end on March 31.
National Commission For Safai Karamcharis
The National Commission for Safai Karamcharis (NCSK) was constituted on 12th August 1994 as a statutory body by an Act of Parliament viz. ‘National Commission for Safai Karamcharis Act, 1993’.
The act “The National Commission for Safai Karamcharis Act, 1993” lapsed in February 2004.
The Commission is acting as a Non-Statutory body of the Ministry of Social Justice and Empowerment whose tenure is extended from time to time through Government Resolutions.
Context Recently, the Election Commission has postponed Punjab elections 2022 by a week to February 20 in view of Guru Ravidas Jayanti which falls on February 16.
About Guru Ravidas
Ravidas, also called Raidas, of the 15th or 16th century, was a mystic, poet, saint of North Indian Bhakti movement
He founded the Ravidassia religion and compiled a new holy book, Amritbani Guru Ravidass Ji.
He was born in Varanasi into untouchable leather-working Chamar caste.
He valued the worship of a formless God.
Along with Kabir, he was one of the most noted disciples of Bhagat Ramanand.
41 verses of Bhakt Ravidas are incorporated into Sikh’s religious book, Adi Granth.
He was vocal against the varna (caste) system
He imagined an egalitarian society called Begumpura, means “land without sorrow”
His disciples came to be known as Ravidas-panthis and followers came to be known as Ravidassias.
He also mentioned ‘Sahaj’, a mystical state where there is a union of the truths of the many and the one.
Part of: Prelims and GS-II International Relations
Context: India & Denmark agreed to initiate joint research and development on green fuels including green hydrogen, during the Joint S&T Committee meeting on 14th January 2022.
Key takeaways
The Joint Committee discussed national strategic priorities and developments in Science, Technology, and Innovation of both countries.
Special focus was on green solutions of the future – strategy for investments in green research, technology, and innovation at the virtual meeting.
The committee emphasised on development of bilateral collaboration on mission-driven research, innovation, and technology development, as agreed by the two Prime Ministers while adopting the Green Strategic Partnership – Action Plan 2020-2025.
Part of: Prelims and GS-II International Relations
Context: Experts from India and Israel deliberated on widening the scope of India-Israel Industrial R&D and Technological Innovation Fund (I4F) at its 8th Governing Body meeting.
Key takeaways
They approved 3 joint R&D projects worth 5.5 million $ and suggested measures to create a broader India-Israel collaborative ecosystem.
India-Israel Industrial R&D and Technological Innovation Fund (I4F) fund is a cooperation between the Department of Science and Technology (DST), Government of India, and the Israel Innovation Authority, Government of Israel.
Objective: To promote, facilitate and support joint industrial R&D projects between companies from India and Israel to address the challenges in the agreed ‘Focus Sectors’.
Aim: To promote, facilitate and support joint industrial R&D between India & Israel, which would lead to the co-development and commercialization of innovative technologies benefiting both countries.
Global Innovation & Technology Alliance (GITA) is appointed to implement the I4F program in India, while Israel Innovation Authority is the implementing agency in Israel.
Context: The process of capital account convertibility is likely to receive a further push this year, as the government and RBI move towards allowing greater foreign participation in domestic bond markets.
What is the capital account convertibility?
The balance of payments account, which a statement of all transactions made between a country and the rest of the world world, consists of two accounts
Current account: deals mainly with import and export of goods and services
Capital account: It is made up of cross-border movement of capital by way of investments and loans.
Capital account convertibility (CAC) means the freedom to conduct investment transactions without any constraints.
In other words, CAC means there is no restrictions on the amount of rupees an Indian resident can convert into foreign currency to enable to acquire any foreign asset.
Similarly, there should be no restraints on the NRI relative bringing in any amount of foreign currency to acquire an asset in India.
How did the capital account convertibility evolve?
In 1991 put India adopted the path of economic liberalisation (set in motion by the Narasimham Committee’s recommendations). Within five years, the country had moved to a market-determined exchange rate and full current account convertibility.
Though this also marked the beginning of the process of liberalising the capital account, in the three decades since liberalisation began, progress on this aspect has remained gradual.
While the current position is a partially open capital account, non-residents essentially have complete freedom to engage in most investment and other capital transactions in India
Capital account convertibility has mostly been in a single direction since 1991—with more flexibility around inflows rather than outflows.
Foreign Exchange Management Act, 1999 further liberalised current account, and to some extent, capital account transactions, albeit maintaining strong control over the latter.
Gradually, foreign investors have been allowed to participate in the domestic equity, debt and bond markets over the past two decades.
As a result, foreign direct investment in India now is largely unrestricted, and its impact is stark: in the past five years, the flow of FDI has accounted for almost 50% of total FDI inflows since 1991.
Foreign Portfolio investors (FPIs) have also been active in the equity, debt and G-sec markets. During 2021, FPIs invested $10.8 billion in initial public offerings (IPOs) of Indian firms—the highest ever amount
According to latest data on India’s international investment position, direct overseas investments total around $200 billion, while portfolio investments are below $8 billion, after several years of moderate growth.
To be fair, liberalisation of the capital account has been consistent through business cycles in the past three decades. This suggests that institutional capacity and political willingness to achieve capital account convertibility is strong.
What are the challenges associated?
The two Tarapore Committee Reports—1997 and 2006—laid out a path to full convertibility. However, both reports did set a number of preconditions for convertibility to be achieved. These include
gross fiscal deficit being less than 3.5% of GDP
Inflation rate of 3-5% over three years
Effective CRR being 3%
Gross NPAs of 5% or less.
India has yet to fully meet all of these criteria.
Inflows and outflows of the foreign and domestic capital, which are prone to volatility, can lead to excessive appreciation/depreciation of their currency and impact the monetary and financial stability.
The 2006 Tarapore committee’s report on fuller capital account convertibility released argued that even countries that had comfortable fiscal positions have experienced currency crises and rapid deterioration of the exchange rate.
The report further points that an excessive appreciation of the exchange rate causes exporting industries to become unviable, and imports to become much more competitive, causing the current account deficit to worsen.
However, there has been an improvement in the economy. India’s foreign reserves today stand at $635 billion, the fourth largest in the world.
How fuller convertibility would benefit India?
Large foreign exchange reserves lead to high sterilisation costs. In 2018, SBI estimated the sterilisation coefficient at -0.93. If some control is brought over India’s sterilisation costs through an opening of the capital account, it is estimated this could free up almost 1% of GDP in sterilisation costs over time
Sterilization is a form of monetary action in which a central bank seeks to limit the effect of inflows and outflows of capital on the money supply.
Gurther liberalisation of the capital account is needed to power the next stage of India’s economic development.
Way Forward
Limiting sovereign debt to 60% of GDP (as recommended by the NK Singh panel) should be part of economic policy in a post COVID-19 world.
RBI governors have been cautious time and again, calling for convertibility to be seen as a process, and not a single event. Thus, the process towards full convertibility will not be linear and India looks set to continue moving gradually
RBI can bank on India’s current economic strengths and macro stability to further the cause of capital account convertibility in 2022.
Context: Political signals over the decades have reinforced the informal social contract between State & Farmers
An agricultural field has been kept strapped to the national aim of ‘food security’ for so long that many farmers tend to see their role as state-appointed, with inputs assured by governments that must in due course pay for the output of their farms.
What is the Supreme Court observation on Poor credit discipline of farmers?
In a lawsuit related to the dismissal of a daily-wage worker by Patiala Central Cooperative Bank the Supreme Court drew attention over an attitudinal problem in our farm sector.
Farm loan waivers schemes drive banks to financial distress and possible collapse.
No farmers were repaying the loans in anticipation of a loan waiver ahead of Punjab polls.
What is the history and impact of farm loan waivers?
Ahead of India’s 2009 general election farm-loan waiver was declared by the Congress-led Centre worth ₹60,000 crore. It was packaged as distress relief.
Various states run parties were quick to adopt that ploy.
Its lasting effect is visible in the handy tool of politics.
Waivers leave loan books of banks in a mess whereby the lenders wait for the government to pay the needful
It also imposes fiscal costs to the government that are usually unaffordable.
How it leads to poor credit discipline?
Farm-loan waivers been used in election manifests to win votes.
Overtime farmers view these as work bonuses they deserve.
Farmers view loan waivers as an unstated pact with the state or as an informal social contract where these loans are mistaken for grants.
In some states this serves as a tool for collective bargaining by tillers.
This approach is not only bad for lenders but also creates wrong attitudes that obstruct farm reforms.
Unless cultivators operate like business units rather than as state suppliers saving this sector from stagnancy will be difficult.
What needs to done?
Political parties need to avoid such pre-poll assurance of write offs. This will favour our economy for an even bigger reason.
The loans should not be mistaken as grants.
The prices set by freely-traded agricultural crops must play the reformist role of signalling scarcities and overflows. This will incentivize farmers to adapt their expenses and exertions to market reality.
Insurers and future deals could cushion their risks.
Reform-minded states should take up a model farm laws by the Centre. At the same time, the provisions must be designed to secure farmers from exploitation by private buyer cartels.
In News: Red Sanders (Red Sandalwood) has fallen back into the ‘endangered’ category in the International Union for Conservation of Nature’s (IUCN) Red List.
Also scheduled in appendix II of CITES and Wildlife Protection Act
The species, Pterocarpus santalinus, is an Indian endemic tree species, with a restricted geographical range in the Eastern Ghats.
Found in Tropical Dry Deciduous forest in Andhra Pradesh; usually grow in the rocky, degraded and fallow lands with Red Soil and hot and dry climate.
It was classified as ‘near threatened’ in 2018 and has now joined the ‘endangered’ list once again in 2021.
Known for their rich hue and therapeutic properties, are high in demand across Asia, particularly in China and Japan, for use in cosmetics and medicinal products as well as for making furniture, woodcraft and musical instruments.
Costs anything between Rs 50 lakh to Rs 1 crore in the international market.
“Over the last three generations, the species has experienced a population decline of 50-80 per cent. It is assessed as Endangered” – Latest IUCN Assessment
How did it fall in the endangered category?
The species is dwindling in its natural habitat due to over-exploitation.
The over-harvest of the species has left the population structure skewed, with trees of harvestable size and maturity being scarce and making up less than 5 per cent of the trees remaining in the wild.
The harvest of the tree is also restricted at the state level, but despite this illegal trade continues. This is evidenced by the large volume of timber and Red Sanders products seized by authorities at all stages of the illegal supply. All this despite the physical deterrents and patrols in place in Andhra Pradesh, as well as international, national and state-level laws preventing the cutting and transport of species.
The slow growth of the species and continued harvesting leaves no time for the species to recover naturally. Cattle grazing and invasive species also threaten the species.
About IUCN Red List of Threatened Species
It was established in 1964, by the IUCN and has evolved to become the world’s most comprehensive information source on the global extinction risk status of animal, fungus and plant species.
The IUCN Red List is a critical indicator of the health of the world’s biodiversity.
It uses a set of quantitative criteria to evaluate the extinction risk of thousands of species.
It provides information about range, population size, habitat and ecology, use and/or trade, threats, and conservation actions that will help inform necessary conservation decisions.
It is used by government agencies, wildlife departments, conservation-related NGOs, natural resource planners, educational organisations, students, and the business community.
The Index is available for five groups: birds, mammals, amphibians, corals and cycads.
About CITES
Convention on International Trade in Endangered Species (CITES) is part of a multilateral treaty that includes plant, animals and birds under varying categories of threat of extinction and which will be jointly protected by members of the International Union for Conservation of Nature (IUCN).
India is a signatory to CITES.
(TEST YOUR KNOWLEDGE)
Model questions: (You can now post your answers in comment section)
Q.1 Which of the following is/are true regarding Guru Ravidas?
He was one of the most noted disciples of Bhagat Ramanand.
He has mentioned ‘Sahaj’, a mystical state where there is a union of the truths of the many and the one.
Select the correct answer:
Only 1
Only 2
Both 1 and 2
Neither 1 nor 2
Q.2 National Commission for Safai Karamcharis works under which of the following Ministry?
Ministry of Urban Affairs
Ministry of Social justice and Empowerment
Ministry of Rural development
Ministry of commerce
Q.3 What is the IUCN status of Eastern swamp deer?
Vulnerable
Extinct
Critically endangered
Least concern
ANSWERS FOR 20th Jan 2022 TEST YOUR KNOWLEDGE (TYK)
