National Current Affairs – UPSC/KAS Exams- 12th December 2018
Centre RBI Tussle
Topic: Indian Economy
IN NEWS: The situation created by Urjit Patel’s resignation should be used to push through much-needed reforms in the relations between the central government and RBI.
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- The one important issue is that of the central bank’s governance and autonomy.
- There are multiple flashpoints between the RBI and the Centre that seem to have precipitated this outburst.
- Disagreements between RBI and the centre over setting benchmark interest rates have been common over the years.
- But the disagreements appear to be over regulation in itself this time.
Concerns of RBI
- There are three issues on which the Centre seems to have irked the RBI.
- It has refused to accept Governor Urjit Patel’s point that the RBI is hobbled by lack of adequate powers in regulating public sector banks.
- The second is the tussle over the RBI’s burgeoning reserves, a piece of which the Centre is eyeing to bridge its fiscal gap, while the RBI resents this.
- The last is the attempt by the Centre to set up an independent payments regulator, which the RBI sees as encroachment of its turf.
- Also, the centre insisted on easing prudential norms for MUDRA and SME lending.
- With domestic banks just halfway through the process of resolving their mountain of NPAs from large corporates, it would be imprudent to increase SME loans without toning up their credit appraisal systems first.
- Centre has also demanded to relax Prompt Corrective Action rules for public sector banks, which might be fraught with risks to financial stability.
Concerns of centre
- The centre is upset over an RBI circular of February 12 which redefined NPAs and revised the framework for resolution.
- It is also upset that the central bank is not doing enough to ease the ongoing liquidity squeeze through extraordinary measures.
- However, the RBI argues that it lacks powers to replace managements or revoke licenses of PSBs, when questioned on regulatory gaps that led to bank NPAs and frauds.
- But it has effectively used its existing supervisory powers to plug process gaps in banks or head off ever greening of loans in recent times.
- The centre finds RBI guilty of not detecting the bad loans of banks in time or figuring out the IL&FS mess despite it being a systemically important NBFC.
- However, much of this applies to the government as well.
- As the owner of PSU banks, it needed to know what was happening and that is why it had its directors on these banks.
- As for IL&FS, apart from RBI, others were members of the Financial Stability and Development Council which is headed by the finance minister and the top shareholders of IL&FS include LIC, SBI and Central Bank of India.
- The government is also concerned with raising repo rates, since it is projected to rise its borrowings from the market in the future.
- There is an estimation of Rs 1.7 lakh crore of ‘extra budgetary resources’ to be raised in FY19, which will correspondingly involve higher interest payments in future if interest rates are raised.
The road ahead
- The crisis points to several reforms that are needed in the RBI and changes in its equation with the Centre.
- As former RBI Governor Raghuram Rajan points out in his book, we need a clearer enunciation of the central bank’s responsibilities.
- The position of the RBI Governor in the government hierarchy is not defined clearly. “There is a danger in keeping the position ill-defined because the constant effort of the bureaucracy is to whittle down its power.”
- The personal element in decision-making in the RBI has to be taken out and replaced by an institutional mechanism, much like the MPC did in the case of monetary policy.
- The reference of the reserves sharing issue to a committee is one such idea where there will be little scope for the Governor to act on his own just as the government too cannot exert pressure on him.
- If the issues are not resolved, the tussle will undermine investor confidence and strengthens fears about institutional erosion when India is already experiencing economic turmoil.
- Thus the Centre and the central bank must talk behind closed doors and resolve their differences as mature entities, as they have done so many times in the past.
Source: The Hindu
Water traces found on asteroid Bennu
Topic: Science and Technology
IN NEWS: NASA’s OSIRIS-REx spacecraft has discovered ingredients for water on a nearby skyscraper-sized asteroid, a rocky acorn-shaped object that may hold clues to the origins of life on the earth.
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- OSIRIS-REx, which flew last week within a scant 19 km of the asteroid Bennu some 2.25 million km from the earth, found traces of hydrogen and oxygen molecules part of the recipe for water and thus the potential for life, embedded in the asteroid’s rocky surface.
- The probe, on a mission to return samples from the asteroid to earth for study, was launched in 2016. Bennu orbits the Sun at roughly the same distance as the earth.
- There is concern among scientists about the possibility of Bennu impacting earth late in the 22nd century.
- Asteroids are among the leftover debris from the solar system’s formation some 4.5 billion years ago.
Significance of the Discovery:
- Scientists believe asteroids and comets crashing into early earth may have delivered organic compounds and water that seeded the planet for life, and atomic-level analysis of samples from Bennu could provide key evidence to support that hypothesis.
Source:The Hindu
SC directs Centre to declare area around national parks as eco-sensitive
Topic: Envirnment and Ecology
In news: The Supreme Court directed the Union Environment Ministry to declare 10 km area around 21 national parks and wildlife sanctuaries across the country as ‘eco-sensitive zones’.
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- Court took the initiative after its amicus curiae informed the court that the State governments have taken no effort to protect the area around these sanctuaries and parks.
- The court recorded that the issue has been pending for the past 12 years.
The parks and sanctuaries are:
- The Pobitora sanctuary in Assam; Hemis High Altitude and Kishtewar national parks, Changthang, Hokersar, Trikuta sanctuaries in Jammu and Kashmir; Jogimatti, Thimlapura and Yadahalli Chinkara sanctuaries in Karnataka; Deolgaon Rehekuri and Thane Creek Flamingo sanctuaries and the Malvan marine sanctuary in Maharashtra; Siroi National Park and Khongjaingamba Ching sanctuary in Manipur; Baghmara Pitcher Plant sanctuary in Meghalaya; Fakim and Puliebadze and Rangapahar sanctuaries in Nagaland; Bhimrao Ambedkar bird sanctuary and Pilibhit sanctuary in Uttar Pradesh and the Jorepokhri sanctuary in West Bengal.
Source: The Hindu
Universal Health Coverage (UHC) India Japan Partnership
Topic: Health related Topics
In news: November 12th is celebrated as universal health coverage day.
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- According to the World Health Organisation, UHC means “ensuring that everyone, everywhere can access essential quality health services without facing financial hardship”. It sounds basic, yet the basics often pose a major challenge.
- India has taken the vital first step towards UHC through Ayushman Bharat. This challenge is reminiscent of the path that Japan took more than half a century ago.
- A major political decision was required to expand national health insurance and establish medical schools all over Japan.
- Japan is partnering with India in wide-ranging projects for better healthcare. Japan has previously worked with India to eradicate polio in India.
- Japanese and Indian doctors are exchanging ideas and expertise at a research and control centre on diarrhoea established by Japan in Kolkata, and precious lives of newborns are being saved daily in a children’s hospital constructed in Chennai.
- In 17 cities across Tamil Nadu, urban healthcare systems are being strengthened with Japan’s cooperation.
- India and Japan signed a new Memorandum of Cooperation on healthcare to pursue the synergies between Ayushman Bharat and Japan’s Asia Health and Wellbeing Initiative.
- Japan aim to pursue our cooperation in various fields, such as honing skills of doctors in surgery of trauma as well as providing technical training for Indian nurses studying in Japanese caregiving facilities.
Source: The Hindu
Pradhan Mantri Fasal Bima Yojana
Topic: Government Policies
In news: Pradhan Mantri Fasal Bima Yojana (PMFBY) has been under implementation in the country including the States of Andhra Pradesh and Telangana since Kharif 2016 season.
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Objectives:
- To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases.
- To stabilise the income of farmers to ensure their continuance in farming.
- To encourage farmers to adopt innovative and modern agricultural practices.
- To ensure flow of credit to the agriculture sector.
Highlights of the Scheme:
- There will be a uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops.
- In case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5%. The premium rates to be paid by farmers are very low and balance premium will be paid by the Government to provide full insured amount to the farmers against crop loss on account of natural calamities.
- There is no upper limit on Government subsidy. Even if balance premium is 90%, it will be borne by the Government.
- The use of technology will be encouraged to a great extent. Smart phones will be used to capture and upload data of crop cutting to reduce the delays in claim payment to farmers. Remote sensing will be used to reduce the number of crop cutting experiments.
- PMFBY is a replacement scheme of NAIS / MNAIS, there will be exemption from Service Tax liability of all the services involved in the implementation of the scheme. It is estimated that the new scheme will ensure about 75-80 per cent of subsidy for the farmers in insurance premium.
Source: The Hindu
Regulatory Indicators for Sustainable Energy (RISE)
Topic: Environment and Ecology
In news: World Bank has released its report — Regulatory Indicators for Sustainable Energy (RISE) 2018 — charting global progress on sustainable energy policies. The report was released on the sidelines of the 24th Conference of the Parties to the UN Framework Convention on Climate Change(COP24).
Highlights of the Report:
- World Bank has released its report, Regulatory Indicators for Sustainable Energy (RISE) 2018 charting global progress on sustainable energy policies. The report was released on the sidelines of the 24th Conference of the Parties to the UN Framework Convention on Climate Change(COP24).
- This momentum was particularly marked in renewable energy. Among the countries covered by RISE, only 37 per cent had a national renewable energy target in 2010. By 2017, that had grown to 93 per cent.
- By last year, 84 per cent of countries had a legal framework in place to support renewable energy deployment, while 95 per cent allowed the private sector to own and operate renewable energy projects.
- Among the four SDG7 target areas — renewable energy, energy efficiency, electricity access and access to clean cooking — the last one continued to be the most overlooked and underfunded by policymakers.
- India has gained a great success in renewable energy auctions that delivered record-setting low prices for solar power. However, to realize its full potential, the country needs to address critical gaps, such as failing utilities, clean cooking, and the slow progress on decarbonizing heating and transport.
Source: The Hindu
Voyager 2 spacecraft
Topic: Science and Technology
IN NEWS: NASA’s Voyager 2 has entered interstellar space, leaving behind the solar system.
More on the Topic:
- Voyager 2 is the only probe ever to study Neptune and Uranus during planetary flybys.
- Voyager 2 is the only spacecraft to have visited all four gas giant planets — Jupiter, Saturn, Uranus and Neptune — and discovered 16 moons, as well as phenomena like Neptune’s mysteriously transient Great Dark Spot, the cracks in Europa’s ice shell, and ring features at every planet.
- The Voyager mission was launched in the 1970’s, and the probes sent by NASA were only meant to explore the outer planets – but they just kept on going.
- Voyager 1 departed Earth on 5 September 1977, a few days after Voyager 2 and left our solar system in 2013.
- The mission objective of the Voyager Interstellar Mission (VIM) is to extend the NASA exploration of the solar system beyond the neighborhood of the outer planets to the outer limits of the Sun’s sphere of influence, and possibly beyond.
- The Voyager spacecraft are the third and fourth human spacecraft to fly beyond all the planets in our solar system.
- Pioneers 10 and 11 preceded Voyager in outstripping the gravitational attraction of the Sun.
Source: The Hindu
