NEWS ANALYSIS · Salient features of the Act It seeks to establish the National Compensatory Affo...

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August 30, 2019

NEWS ANALYSIS

Tags: GS Paper 3, Security Challenges and their Management in Border Areas

Context: Russia is likely to offer India its conventional submarines on the government to

government route.

Analysis:

It will be done under the Navy’s

Project 75I at the summit

between Indian Prime Minister

and Russian President at

Vladivostok next week.

Russian conventional submarines

will be offered through the

government to the government

route to India at the summit to save

a lot of time in the procurement

process.

The possibility of offering India

the Su57, the Russian Fifth

Generation Fighter Aircraft

(FGFA), is also being explored, but it has not been decided yet.

The Navy is looking to buy six advanced conventional diesel electric submarines under

Project 75I that, after several delays, has made progress in the past several months.

The procurement is under the Strategic Partnership (SP) model, and is the second

project to be processed through this route after the Navy’s tender for utility

helicopters.

The Russian submarine will likely be based on the Amur 1650 conventional

submarine, modified to suit Indian requirements.

The contenders for Project75I are the Naval Group of France, Rosoboronexport Rubin

Design Bureau of Russia, ThyssenKrupp Marine Systems of Germany and Saab Group of

Sweden.

The Indian partners will be shortlisted based on the technical and financial capability to

execute the project and absorb the technologies. The foreign manufacturer will be selected

separately.

However, the strategic partnership is a long drawn process with many uncertainties,

as this model is being attempted for the first time.

India was to have jointly developed its FGFA based on the Russian jet. But after protracted

negotiations, India decided last year not to go ahead with the project.

1. RUSSIA SET TO OFFER SUBMARINES DURING INDIA RUSSIA SUMMIT


Tags: GS Paper 3, Indian Economy and issues relating to Planning, Mobilization of

Resources, Growth, Development and Employment.

Context: The Reserve Bank of India (RBI), in its annual report for 2018-19, has said the lack of

domestic demand is holding back the animal spirits in the economy.

Analysis of the report:

RBI emphasised the need to revive consumption demand and private investment

during 2019-20.

The report said the recent deceleration could be in the nature of a soft patch mutating into a

cyclical downswing, rather than a deep structural slowdown.

Nonetheless, there are still structural issues in land, labour, agricultural marketing and the

like, which need to be addressed

The report said that the policy focus at this point should remain on improving the ease of

doing business.

The RBI stressed on continued policy focus on reforms in factors of production,

faster implementation of capital expenditure by public authorities, among others.

While the central bank’s analysis confirms that a broad-based cyclical downturn is underway

in several sectors like manufacturing, trade, hotels, transport, communication and

broadcasting, construction; and agriculture, it added that the growth trend has witnessed

slight moderation since 2016-17, contributed mainly by the services sector.

The Central bank also said reviving consumption demand and private investment has

assumed the highest priority in 2019-20.

This involves strengthening the banking and nonbanking sectors, a big push for spending on

infrastructure and implementation of much needed structural reforms in the areas of labour

laws, taxation, and other legal reforms.

All these measures will also enhance ease of doing business in pursuit of fulfilling the

vision of India becoming a $5 trillion economy by 2024-25.

On the financial sector, the banking regulator said several measures had resulted in a

decline in gross nonperforming assets (GNPA) ratio of the banking system to 9.1% at

end March 2019, from 11.2% in the previous year, apart from a decline in fresh

slippages and an improvement in provision coverage ratio.

Add on for prelims:

Reserve Bank of India:

The Reserve Bank of India was established on April 1, 1935 in accordance with the

provisions of the Reserve Bank of India Act, 1934.

The Central Office of the Reserve Bank was initially established in Calcutta but was

permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and

where policies are formulated.

2. RBI’s ANNUAL REPORT

https://www.rbi.org.in/Scripts/OccasionalPublications.aspx?head=Reserve%20Bank%20of%20India%20Act


Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully

owned by the Government of India.

The Reserve Bank's affairs are governed by a central board of directors. The board is

appointed by the Government of India in keeping with the Reserve Bank of India Act.

The members of the board are appointed/nominated for a period of four years

Constitution:

Official Directors

Full-time: Governor and not more than four Deputy Governors

Non-Official Directors

Nominated by Government: ten Directors from various fields and two

government Official

Others: four Directors - one each from four local boards

Tags: GS paper 2, Government Policies and Interventions for Development in various

sectors and Issues arising out of their Design and Implementation.

Context: Government has transferred ₹47,436 crore to 27 States for afforestation drives in their

respective regions.

Analysis of the step:

These are long pending dues part of the Compensatory Afforestation Fund (CAF), a

₹54,000 crore tranche that has been collected for nearly a decade as environmental

compensation from industry, which has razed forest land for its business plans.

The amount to be paid by industry depends on the economic value of the goods and

services that the razed forest would have provided.

These include timber, bamboo, firewood, carbon sequestration, soil conservation, water

recharge, and seed dispersal.

Industrialists pay this money and this is eventually transferred to the States concerned to

carry out afforestation.

Only a fraction of this corpus had actually been disbursed to States, due to the lack of a legal

framework and instances of States using it for non forestry purposes.

The CAF Act 2016, which came into being more than a decade since it was devised,

established an independent authority the Compensatory Afforestation Fund

Management and Planning Authority to execute the fund.

The government said that the centre would use geographic tagging technology to keep a tab

on whether States were using their allotted funds appropriately.

The Fund will be used as per provisions of the CAF Act and Rules.

These include catchment area treatment, wildlife management, forest fire prevention, soil

and moisture conservation work in the forest and cannot be used for payment of salary,

travelling allowances, making buildings and buying office equipment for forest officers.

3. AFFORSTATION DRIVES


Odisha, the top recipient of funds, got nearly ₹6,000 crore followed by Chhattisgarh and

Madhya Pradesh. Kerala got the least funds.

Activists and environmentalists have raised concerns that the funds are used by the State to

ride roughshod over tribal rights and unscientific afforestation methods were often

implemented to make good razed forests.

The Compensatory Afforestation Fund

Act, 2016

The act provides for the

establishment of funds under the

public accounts of India and the

public accounts of each State which

will be used for compensatory

afforestation.

Levies are imposed on

development projects that seek

land inside a Reserved Forest or a

Protected Area (PA) in a sanctuary

or a national park.

These collected levies are accrued

in the CAMPA Funds which are to

be utilised to plant trees elsewhere

in order to compensate the loss of

forest due to development projects.

Salient features of the Act

It seeks to establish the National

Compensatory Afforestation Fund under the Public Account of India, and a State

Compensatory Afforestation Fund under the Public Account of each state.

The payments into the funds include compensatory afforestation, NPV, and any project

specific payments. The National Fund will get 10% of funds collected and the remaining 90%

will go to respective State Fund.

The collected funds will be utilised for afforestation, regeneration of forest ecosystem, wild

life protection and infrastructure development.

The act also seeks to establish National and State Compensatory Afforestation Fund

Management and Planning Authorities to manage the funds.

The determination of NPV will be delegated to an expert committee constituted by the

central government.

NPV (net present value) quantifies the services provided by the forest.

It includes goods and services (tourism and timber); regulating services (climate change);

and none-material benefits (recreation).

It seeks to provide safety, security and transparency in utilization of CAMPA funds which are

currently kept in Nationalized Banks and managed by an ad-hoc body.

These funds would be brought under the focus of Parliament and State Legislatures by

transferring them to non-lapsable interest-bearing funds.


Tags: GS Paper 2, Government Policies and Interventions for Development in various

sectors and Issues arising out of their Design and Implementation.

Context: Recently GI tag has been given for T.N.’s Dindigul lock and Kandangi saree.

Analysis:

Two products from Tamil Nadu the Dindigul lock and the Kandangi saree are given

the Geographical Indication tag by the Geographical Indications Registry.

Both these products were losing their sheen in the market, and the GI tag would help them

get some recognition.

About the Dindigul locks

They are known throughout the world for their superior quality and durability, so much so

that even the city is called Lock City.

About the Kandangi sarees

These are manufactured in the entire Karaikudi taluk in Sivaganga district.

They are characterised by large contrast borders and some are known to have borders

covering as far as two-thirds of the saree which is usually around 5.10 m-5.60 m in length.

Add on for prelims:

What is GI status?

GI status is an indication that identifies goods as produced from a particular area, which

has special quality or reputation attributable to its geographical origin.

GI tag helps the producers to differentiate their products from competing products in the

mark.

It enables the producers to build a reputation and goodwill around their products,

which often fetch a premium price.

The products help in export earning, promotion of tourism, cultural heritage and national

identity.

For example, Kanjeevaram silk sarees and Pochampally Ikat contribute to exports and

popularity.

GIs have great potential to play a major role in trade between countries.

Legal protection to GIs protects livelihoods and encourage employment

Owing to the premium prices that many GIs command today, there is a possibility of

preserving many traditional skills.

Benefit to the rural economy by improving the incomes of farmers or non farmers.

GI allows genuine producers to capture the market and creates entry barriers for fakes.

Under Paris Convention for the Protection of Industrial Property, GIs are covered as an

element of IPRs.

4. GI TAGS


GI is governed by WTO’s Agreement on Trade-Related Aspects of Intellectual Property

Rights (TRIPS).

In the India, GI tag is governed by Geographical Indications of Goods (Registration and

Protection Act), 1999.

This Act is administered by Controller General of Patents, Designs and Trade Marks, who is

also Registrar of Geographical Indications.


Tags: GS Paper 3, Environment conservation and pollution and biodiversity.

Context: The UN report highlights that the carbon pollution worldwide is destabilising marine

environment.

Analysis:

A draft UN report obtained by AFP warns that the same oceans that nourished human

evolution are poised to unleash misery on a global scale unless the carbon pollution

destabilising Earth’s marine environment is brought to heel.

According to the Intergovernmental Panel on Climate Change (IPCC) “special report” on

oceans and Earth's frozen zones, known as the cryosphere destructive changes already set

in motion could see a steady decline in fish stocks, a hundred fold or more increase in the

damages caused by superstorms, and hundreds of millions of people displaced by rising

seas.

As the 21st century unfolds, melting glaciers will first give too much and then too little to

billions who depend on them for fresh water.

5. UN WARNS OF RISING SEAS, STORM SURGES


Without deep cuts to manmade emissions, at least 30% of the northern hemisphere’s

surface permafrost could melt by century’s end, unleashing billions of tonnes of carbon and

accelerating global warming even more.

The 900-page scientific assessment is the fourth such tome from the UN in less than a year,

with others focused on a 1.5Celsius cap on global warming, the state of biodiversity, and

how to manage forests and the global food system.

All four conclude that humanity must overhaul the way it produces and consumes almost

everything to avoid the worst ravages of climate change and environmental degradation.

Governments of the countries meet in Monaco next month to vet the new report’s official

summary.

By 2050, many low lying megacities and small island nations will experience “extreme sea

level events” every year, the report concludes.

Even if the world manages to cap global warming at two degrees Celsius, the global ocean

waterline will rise enough to displace more 250 million people.

The report indicated this could happen as soon as 2100, though some experts think it is

more likely to happen on a longer timescale.


Tags: GS Paper 3, Indian Economy and related issues.

Context: The recent RBI special report released reflects a severe rise in bank frauds.

Analysis:

According to RBI special report, as compared to

the previous year Bank frauds saw a 73.8% jump

in value in 2018-19.

The report said that the number of cases of frauds

reported by banks increased by 15% in 2018-19

on a year on year basis, with the amount involved

rising by 73.8%, though mostly related to

occurrences in earlier years.

Banks had taken 55 months, on an average, to

report large frauds.

The overall average lag between the date of

occurrence and its detection by banks was 22

months, the RBI report said.

Public sector banks (PSBs), which constitute the

largest market share in bank lending, have

accounted for the bulk of frauds reported in 2018-

19. These were followed by private sector banks

and foreign banks.

The total number of counterfeit notes detected had fallen in 2018-19 from the previous

years.

There has been an increase in counterfeit notes in all the categories.

6. BANK FRAUDS


PRELIMS BOOSTERS

It is India’s first indigenously built engineless semi-high-speed train. Earlier, it was

known by the name Train 18.

It runs between Delhi and Varanasi at a maximum speed of 160 kmph.

It has been built by the Integral Coach Factory, Chennai, in a record time of 20 months.

The train is a 100% ‘Make in India’ project and is claimed to be built at half the cost of a

similar train set that is imported.

It is energy-efficient as its coaches will be fitted with LED lights. Coaches will have

automatic doors and retractable footsteps.

1. VANDE BHARAT EXPRESS


It will be inter-connected with fully sealed gangways along with a GPS-based Passenger

Information System. It is provided with Bio toilets.

Context: The Prime Minister launched Fit India Movement on National Sports Day.

What is Fit India Movement?

Envisioned by the Prime

Minister, the nation-wide Fit

India Movement aims to

motivate every Indian to

incorporate simple, easy

ways of staying fit in their

everyday life.

The initiative is the need of

the hour and it will lead the

country towards a healthy

future.

National Sports Day:

It is celebrated on 29

August, on the birth

anniversary of hockey

legend Major Dhyan

Chand.

On this Day, President

confers the National

Sports Awards, National

Adventure Awards,

Arjuna Award, Khel

Ratna, Dronacharya

Award and Dhyanchand

Award to recognise the

exceptional achievements

of Indian sportspersons.

2. FIT INDIA MOVEMENT

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