Weekly Current Affairs (8th to 14th August 2022) - 1 - UPSC PDF Download

Tejas Jets for Delivery

Context: The Government of India has offered to sell 18 Light-Combat Aircraft (LCA) “Tejas” to Malaysia.

• Argentina, Australia, Egypt, the United States, Indonesia, and the Philippines were also interested in the single-engine jet.
• The Indian government gave a USD6 billion contract to state-owned Hindustan Aeronautics Limited in 2021 for 83 of the locally produced Tejas jets for delivery starting around 2023.

What is Tejas Aircraft?

About:

• The Light Combat Aircraft (LCA) programme was started by the Government of India in 1984 when they established the Aeronautical Development Agency (ADA) to manage the LCA programme.
• It replaced the ageing Mig 21 fighter planes.

Designed by:

• Aeronautical Development Agency under the Department of Defence Research and Development.

Manufactured by:

• State-owned Hindustan Aeronautics Limited (HAL).

Features:

• The lightest, smallest and tailless multi-role supersonic fighter aircraft in its class.
• Designed to carry a range of air-to-air, air-to-surface, precision-guided, weapons.
• Air to air refuelling capability.
• Maximum payload capacity of 4000 kg.
• It can attend the maximum speed of Mach 1.8.
• The range of the aircraft is 3,000km

Variants of Tejas:

• Tejas Trainer: 2-seater operational conversion trainer for training air force pilots.
• LCA Navy: Twin- and single-seat carrier-capable for the Indian Navy.
• LCA Tejas Navy MK2: This is phase 2 of the LCA Navy variant.
• LCA Tejas Mk-1A: This is an improvement over the LCA Tejas Mk1 with a higher thrust engine.

Recovery of Coral Reefs in Great Barrier Reef

Context: According to the Australian Institute of Marine Science's (AIMS) annual long-term monitoring report, Australia's northern and central Great Barrier Reef (GBR) has experienced high levels of coral reef cover over the past 36 years.

• The researchers also warned that the gains could be quickly reversed due to rising global temperatures.

What are the Key highlights of Report?

Quick Recovery:

• It states that reef systems are resilient and capable of recovering after disturbances such as accumulated heat stress, cyclones, predatory attacks.
• It shows record levels of region-wide coral cover in the northern and central GBR since the first ever Australian Institute of Marine Science (AIMS) survey was done.
• Coral cover is measured by determining the increase in the cover of hard corals.

Growth in Central & Northern:

• The hard coral cover in northern Great Barrier Reef had reached 36% while that in the central region had reached 33%.
• Meanwhile, coral cover levels declined in the southern region from 38% in 2021 to 34% in 2022.

Dominated by Acropora corals:

• The high level of recovery is fueled by the increase in the fast-growing Acropora corals, which are a dominant type in the Great Barrier Reef.
• Incidentally, these fast-growing corals are also the most susceptible to environmental pressures such as rising temperatures, cyclones, pollution, crown-of-thorn starfish (COTs) attacks which prey on hard corals and so on.

Less Natural Calamities:

• Also, behind the recent recovery in parts of the reef, are the low levels of acute stressors in the past 12 months — no tropical cyclones, lesser heat stress in 2020 and 2022 as opposed to 2016 and 2017, and a decrease in COTs outbreaks.

What are the Issues Highlighted by the Report?

Climate change:

• The biggest threat to the health of the reef is climate change-induced heat stress, resulting in coral bleaching.
• Despite several global initiatives sea temperatures are predicted to increase by 1.5°C to 2°C by the time the century nears its end.
• According to the United Nations assessment in 2021, the world is going to experience heating at 1.5°C in the next decade, the temperature at which bleaching becomes more frequent and recovery less impactful.

Frequent Mass bleaching:

• In recent times mass bleaching events have become more frequent.
• The first mass bleaching event occurred in 1998 when the El Niño weather pattern caused sea surfaces to heat, causing 8% of the world’s coral to die.
• The second event took place in 2002. But the longest and most damaging bleaching event took place from 2014 to 2017.
• The aerial surveys by AIMS included 47 reefs and coral bleaching was recorded on 45 of these reefs.
  • While the levels were not high enough to cause coral death it did leave sub-lethal effects such as reduced growth and reproduction.

What are Coral Reefs?

About:

• Corals are marine invertebrates or animals which do not possess a spine.
• They are the largest living structures on the planet.
• Each coral is called a polyp and thousands of such polyps live together to form a colony, which grow when polyps multiply to make copies of themselves.
• Further, they are of two types:
  • Hard corals: They extract calcium carbonate from seawater to build hard, white coral exoskeletons. They are in a way the engineers of reef ecosystems and measuring the extent of hard coral is a widely-accepted metric for measuring the condition of coral reefs.
  • Soft corals: They attach themselves to such skeletons and older skeletons built by their ancestors. Soft corals also add their own skeletons to the hard structure over the years.
  • These growing multiplying structures gradually form coral reefs.

Significance:

• They support over 25% of marine biodiversity even though they take up only 1% of the seafloor.
• The marine life supported by reefs further fuels global fishing industries.
  • Besides, coral reef systems generate USD 2.7 trillion in annual economic value through goods and service trade and tourism.

What is Australia’s Great Barrier Reef?

About:

• It is the world’s largest reef system stretching across 2,300 km and having nearly 3,000 individual reefs.
• Further, it hosts 400 different types of coral, gives shelter to 1,500 species of fish and 4,000 types of mollusc.

Significance:

• In pre-Covid-19 times, the Reef generated USD 4.6 billion annually through tourism and employed over 60,000 people including divers and guides.

Way Forward

• With estimates that coral reefs are among the most threatened ecosystems on Earth, there is a dire need for societal-level changes to reduce human impacts on coral reef ecosystems is no longer a debate.
• The achievement of Sustainable Development Goals(SDG 14) by 2030 could help improve ocean resources, to be sure.
• Actions that protect top predators, identify key herbivorous fish species for protection, halt destructive fishing, boating and diving, and manage exploitation of reef fish cannot hurt.
  • Nevertheless, much more aggressive action and education from the top down to grassroots efforts to achieve a carbon-neutral planet are required to protect coral reefs.

India’s Solar Power Dream

Context: Government of India has set the target to expand India’s renewable energy installed capacity to 500 GW by 2030.

• India is also targeting to reduce India’s total projected carbon emission by 1 billion tonnes by 2030, reduce the carbon intensity of the nation’s economy by less than 45% by the end of the decade, achieve net-zero carbon emissions by 2070.

What is the Present Status of Renewable Energy in India?

The total installed capacity for renewable energy in India is 151.4 GW.

• The following is the breakup of total installed capacity for Renewables:
  • Wind power: 40.08 GW
  • Solar Power: 50 GW
  • Biopower: 10.61 GW
  • Small Hydro Power: 4.83 GW
  • Large Hydro: 46.51 GW
• Present Solar Power capacity:
  • 45 solar parks of aggregate capacity 37 GW have been approved in India.
  • Solar Parks in Pavagada (2 GW), Kurnool (1 GW) and Bhadla-II (648 MW) are included in the top 5 operational solar parks of 7 GW capacity in the country.
  • The world’s largest renewable energy park of 30 GW capacity solar-wind hybrid project is under installation in Gujarat.

What are the Challenges?

• Heavily Dependent on Imports:
  • India doesn't have enough module and PV cell manufacturing capacity.
  • The current solar module manufacturing capacity is limited to 15 GW per year, whereas the domestic production is around 3.5 GW only.
  • Further, out of the 15 GW of module manufacturing capacity, only 3-4 GW of modules are technologically competitive and worthy of deployment in grid-based projects.
• Raw Material Supply:
• The silicon wafer, the most expensive raw material, is not manufactured in India.
• It currently imports 100% silicon wafers and around 80% cells.
  • Further, other key raw materials, such as silver and aluminum metal pastes for making electrical contacts, are also almost 100% imported.

What are Government Initiatives?

• PLI scheme to Support Manufacturing:
  • The Scheme has provisions for supporting the setting up of integrated manufacturing units of high-efficiency solar PV modules by providing Production Linked Incentive (PLI) on sales of such solar PV modules.
• Domestic Content Requirement (DCR):
  • Under some of the current schemes of the Ministry of New & Renewable Energy (MNRE), namely Central Public Sector Undertaking (CPSU) Scheme Phase-II, PM-KUSUM, and Grid-connected Rooftop Solar Programme Phase-II, wherein government subsidy is given, it has been mandated to source solar PV cells and modules from domestic sources.
  • Further, the government made it mandatory to procure modules only from an Approved List of Manufacturers (ALMM) for projects that are connected to state/ central government grids.
• Imposition of Basic Customs Duty on import of solar PV cells & modules:
  • The Government has announced the imposition of Basic Customs Duty (BCD) on the import of solar PV cells and modules.
  • Further, it has imposed a 40% duty on the import of modules and a 25% duty on the import of cells.
  • Basic custom duty is the duty imposed on the value of the goods at a specific rate.
• Modified Special Incentive Package Scheme (M-SIPS):
  • It's a scheme of the Ministry of Electronics & Information Technology.
  • The scheme mainly provides a subsidy for capital expenditure on Pv cells and modules – 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZ.

Way Forward

• As India is making significant progress in the development of solar PV modules, but for it to become a manufacturing hub, it will require more policy interventions like developing home-grown technologies which could, in the short-term, work with the industry to provide them with trained human resource, process learnings, root-cause analysis through right testing and, in the long term, develop India’s own technologies.
• This would further require substantial investment in several clusters which operate in industry-like working and management conditions, appropriate emoluments, and clear deliverables.

OTEC Plant in Lakshadweep

Context: Recently, the National Institute of Ocean Technology, an autonomous institute under the Union Ministry of Earth Sciences (MoES) is establishing an Ocean Thermal Energy Conversion Plant with a capacity of 65 kilowatts (kW) in Kavaratti, Lakshadweep.

• The plant will power the one lakh liter per day low temperature thermal desalination plant, which converts seawater into potable water.
• The plant is the first of its kind in the world as it will generate drinking water from sea water using indigenous technology, green energy and environmentally friendly processes.

What is Ocean Thermal Energy Conversion?

About:

• Ocean Thermal Energy Conversion (OTEC) is a process for producing energy by harnessing the temperature differences (thermal gradients) between ocean surface waters and deep ocean waters.
• Oceans are huge heat reservoirs as they cover almost 70% of Earth’s surface.
• Researchers focus on two types of OTEC technologies-
  • Closed cycle method - where a working fluid (ammonia) is pumped through a heat exchanger for evaporation and the steam runs a turbine.
  • The vapour is turned back to fluid (condensation) by the cold water found at the depths of the ocean where it returns to the heat exchanger.
  • Open cycle method - where the warm surface water is pressurized in a vacuum chamber and converted to steam which runs the turbine. The steam is then condensed using cold ocean water from lower depths.

Historical perspective:

• India initially had planned to set up an OTEC plant way back in 1980, off the Tamil Nadu coast. However, with the foreign vendor closing down its operation, it had to be abandoned.

India’s OTEC Potential:

• As India is geographically well-placed to generate ocean thermal energy, with around 2000 kms of coast length along the South Indian coast, where a temperature difference of above 20°C is available throughout the year.
• The total OTEC potential around India is estimated as 180,000 MW, considering 40% of gross power for parasitic losses.

How does an OTEC Plant Work?

About: As the energy from the sun heats the surface water of the ocean. In tropical regions, surface water can be much warmer than deep water. This temperature difference can be used to produce electricity and desalinate ocean water.

• Ocean Thermal Energy Conversion (OTEC) systems use a temperature difference (of at least 77°F) to power a turbine to produce electricity.
• Warm surface water is pumped through an evaporator containing a working fluid. The vaporized fluid drives a turbine/generator.
• Then the vaporized fluid is turned back to a liquid in a condenser cooled with cold ocean water pumped from deeper into the ocean.
• OTEC systems use seawater as the working fluid and can use condensed water to produce desalinated water.

Significance:

• Two of the biggest advantages of OTEC are that it produces clean environmentally friendly renewable energy and, unlike solar plants which can't work at night and wind turbines which only work when it's windy, OTEC can produce energy at all times.

What are the Related Recent Initiatives of the Government?

• Deep Sea Mining:
  • The MoES is developing technologies for mining deep sea resources like polymetallic nodules from the Central Indian Ocean at a water depth of 5,500 meters.
• Weather Forecasting:
  • The ministry is also working on introducing ocean climate change advisory services for climate risk assessment due to sea level rise; cyclone intensity and frequency; storm surges and wind waves; biogeochemistry, and changing harmful algal blooms in the coastal waters of India.
• Deep Ocean Mission:
  • MoES is trying to design and develop a prototype crewed submersible rated for 6,000 meters of water depth under the Deep Ocean Mission.
  • It will include technologies for underwater vehicles and underwater robotics.
• DNA Bank:
• There efforts are being made to improve the detection, sampling and DNA storage of benthic fauna of the northern Indian Ocean through systematic sampling using a remotely operated vehicle.

National Institute of Ocean Technology (NIOT)

• It was established in November 1993 as an autonomous society under the Ministry of Earth Sciences, Government of India.
• It aims to develop reliable indigenous technologies to solve various engineering problems associated with harvesting of non-living and living resources in the Indian Exclusive Economic Zone.

World Tribal Day

Context: The International Day of the World's Indigenous People is observed on 9 August each year to raise awareness and protect the rights of the world's indigenous population.

• On 9th August 2018, the first National Report on the State of India’s Tribal People’s Health was submitted to the Government of India by the Expert Committee on Tribal Health.

What is World Tribal Day?

About: The day recognizes the first meeting of the United Nations Working Group on Indigenous Populations in Geneva in 1982.

• It has been celebrated every year since 1994, in accordance with the declaration by the United Nations.
• To date, numerous indigenous peoples experience extreme poverty, marginalization, and other human rights violations.

Theme:

• The theme for 2022 is “The Role of Indigenous Women in the Preservation and Transmission of Traditional Knowledge”.

What do we need to know about the Report?

About:

• The 13-member committee was jointly appointed by the Ministry of Health and Family Welfare and the Ministry of Tribal Affairs.
• It took five years of research for the committee to bring out the evidence and provide a true picture of the state of tribal people of the country.

Findings:

• Geographical Location:
  • Tribal people are concentrated in 809 blocks in India.
  • Such areas are designated as the Scheduled Areas.
  • Unexpected finding was that 50% of India’s tribal population (around 5.5 crore) live outside the Scheduled Areas, as a scattered and marginalised minority.
• Health:
  • The health status of tribal people has certainly improved during the last 25 years.
• Mortality Rate:
  • Under-five child mortality rate has declined from 135 (Deaths per 1000) in 1988 (National Family Health Survey NFHS-1) to 57(Deaths per 1000) in 2014 (NFHS-4).
  • The % of excess of under-five mortality among STs compared to others has widened.
• Malnutrition:
  • Child malnutrition is 50% higher in tribal children (42% compared to 28% in others).
• Malaria and Tuberculosis:
  • Malaria and tuberculosis are three to eleven times more common among the tribal people.
  • Though the tribal people constitute only 8.6% of the national population, 50% malaria deaths in India occur among them.
• Public Health Care:
  • Tribal people heavily depend on government-run public health care institutions, such as primary health centres and hospitals.
  • There is a 27% to 40% deficit in the number of such facilities, and 33% to 84% deficit in medical doctors in tribal areas.
  • Government health care for the tribal people is starved of funds as well as of human resources.
• Tribal Sub-Plan (TSP) Audit:
  • It is an official policy of allocating and spending an additional financial outlay equal to the percentage of the ST population in the State.
  • As estimated for 2015-16, annually Rs 15,000 crore should be additionally spent on tribal health.
  • However, it has been completely flouted by all States.
  • No accounts or accountability exist on policy.
  • No one knows how much was spent or not spent.

What were the Major Recommendations of the Committee?

• Firstly, the committee suggested launching a National Tribal Health Action Plan with a goal to bring the status of health and healthcare at par with the respective State averages in the next 10 years.
• Second, the committee suggested nearly 80 measures to address the 10 priority health problems, the health care gap, the human resource gap and the governance problems.
• Third, the committee suggested allocation of additional money so that the per capita government health expenditure on tribal people becomes equal to the stated goal of the National Health Policy (2017), i.e., 2.5% of the per capita GDP.

What Steps has the Government of India taken for Tribal Welfare?

• Anamaya
• 1000 Springs Initiative
• Pradhan Mantri Adi Adarsh Gram Yojna (PMAAGY)
• TRIFED
• Digital Transformation of Tribal Schools
• Development of Particularly Vulnerable Tribal Groups
• Pradhan Mantri Van Dhan Yojana
• Eklavya Model Residential Schools

Monetary Policy Review: RBI

Context: Recently, the Reserve Bank of India (RBI) in its Monetary Policy Committee (MPC) Review announced a 50-basis point hike in the repo rates thereby taking the cumulative rate hike over the last three months to 140 basis points.

What are the Highlights?

Key Rates:

• Policy Repo Rate: 5.40%
  • Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Here, the central bank purchases the security.
• Standing Deposit Facility (SDF): 5.15%
  • The SDF is a liquidity window through which the RBI will give banks an option to park excess liquidity with it.
  • It is different from the reverse repo facility in that it does not require banks to provide collateral while parking funds.
• Marginal Standing Facility Rate: 5.65%
  • MSF is a window for scheduled banks to borrow overnight from the RBI in an emergency situation when interbank liquidity dries up completely.
  • Under interbank lending, banks lend funds to one another for a specified term.
• Bank Rate: 5.65%
  • It is the rate charged by the RBI for lending funds to commercial banks.
• Cash Reserve Ratio (CRR): 4.50%
  • Under CRR, the commercial banks have to hold a certain minimum amount of deposit (NDTL) as reserves with the central bank.
• Statutory Liquidity Ratio (SLR): 18.00%
  • SLR is the minimum percentage of deposits that a commercial bank has to maintain in the form of liquid cash, gold or other securities.

Projections:

• GDP Growth for 2022-23: 7.2%
  • Gross Domestic Product (GDP) gives the economic output from the consumers’ side. It is the sum of private consumption, gross investment in the economy, government investment, government spending and net foreign trade (the difference between exports and imports).
• Inflation Projection for 2022-23: 6.7%
  • Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.

Why a Hike in the Repo Rate?

• Even as the consumer price inflation has eased from its surge in April 2022, it is expected to remain uncomfortably high and above the upper threshold (6%) of the target.
• These elevated levels of inflation remained the key concern for the MPC as the inflation target of Government of India according to RBI is (4%+/- 2%)
• It is expected that Inflation would remain above the Upper Threshold (6 %), in Q2 and Q3 (FY 2022-23).
• This sustained high inflation may destabilise inflation expectations and harm growth in the medium term.
• The withdrawal of Monetary Accommodation (Expanding money Supply) or increasing Rates can keep inflation expectations in range and contain the Second-Round Effects of Inflation.
  • Second-round effects occur when inflation passes to impact the wage and price setting, leading to a wage-price spiral.

How will Hike in repo rate impact Borrowers and Depositors?

• It will hit the home loan customers and prospective borrowers, as it will result in a hike in lending rates.
• It will benefit the conservative investors, who like to park their funds in bank fixed deposits, since the deposit rates are expected to increase following the rate hike.
• The deposit rate hike will help fulfil the credit demand in the economy and also help banks raise additional funds.

What about Liquidity?

• While improving the availability of funds with the banks, Rates Hike will lead to a gradual decline in systemic liquidity.
• To maintain adequate liquidity in the system, RBI will conduct two-way fine-tuning operations in the form of Variable Rate Repo (VRR) and Variable Rate Reverse Repo (VRRR) operations of different maturities.
  • The Variable Rate Operations are usually undertaken to reduce the money flow by taking out existing cash present in the system.
  • The central bank has been rebalancing the surplus liquidity in the system by shifting it out of the fixed-rate overnight reverse repo window to VRRR auctions of longer maturity.

What is Monetary Policy Framework?

About:

• In May 2016, the RBI Act was amended to provide a legislative mandate to the central bank to operate the country’s monetary policy framework.

Objective:

• The framework aims at setting the policy (repo) rate based on an assessment of the current and evolving macroeconomic situation, and modulation of liquidity conditions to anchor money market rates at or around the repo rate.
• Reason for Repo Rate as Policy Rate: Repo rate changes transmit through the money market to the entire financial system, which, in turn, influences aggregate demand.
• Thus, it is a key determinant of inflation and growth.

What is the Monetary Policy Committee?

• Origin: Under Section 45ZB of the amended (in 2016) RBI Act, 1934, the central government is empowered to constitute a six-member Monetary Policy Committee (MPC).
• Objective: Further, Section 45ZB lays down that “the Monetary Policy Committee shall determine the Policy Rate required to achieve the inflation target”.
  • The decision of the Monetary Policy Committee shall be binding on the Bank.
• Composition: Section 45ZB says the MPC shall consist of 6 members:
• RBI Governor as its ex officio chairperson,
• Deputy Governor in charge of monetary policy,
• An officer of the Bank to be nominated by the Central Board,
• Three persons to be appointed by the central government.
• This category of appointments must be from “persons of ability, integrity and standing, having knowledge and experience in the field of economics or banking or finance or monetary policy”.

What are the Instruments of Monetary Policy?

• Repo Rate
• Standing Deposit Facility (SDF) Rate
• Marginal Standing Facility (MSF) Rate
• Liquidity Adjustment Facility (LAF)
• LAF Corridor
• Main Liquidity Management Tool
• Fine Tuning Operations
• Reverse Repo Rate
• Bank Rate
• Cash Reserve Ratio (CRR)
• Statutory Liquidity Ratio (SLR)
• Open Market Operations (OMOs)

What is an Expansionary Monetary Policy?

About:

• An expansionary monetary policy is focused on expanding (increasing) the money supply in an economy. This is also known as Easy Monetary Policy.
• It is implemented by lowering key interest rates thus increasing market liquidity (money supply). High market liquidity usually encourages more economic activity.
• When RBI adopts Expansionary Monetary Policy, it decreases Policy Rates (Interest Rates) like Repo, Reverse Repo, MSF, Bank Rate etc.

Implications:

• Causes an increase in bond prices and a reduction in interest rates.
• Lower interest rates lead to higher levels of capital investment.
• The lower interest rates make domestic bonds less attractive, so the demand for domestic bonds falls and the demand for foreign bonds rises.
• The demand for domestic currency falls and the demand for foreign currency rises, causing a decrease in the exchange rate. (The value of the domestic currency is now lower relative to foreign currencies)
• A lower exchange rate causes exports to increase, imports to decrease and the balance of trade to increase.

What is Contractionary Monetary Policy?

About:

• A contractionary monetary policy is focused on contracting (decreasing) the money supply in an economy. This is also known as Tight Monetary Policy.
• A contractionary monetary policy is implemented by increasing key interest rates thus reducing market liquidity (money supply). Low market liquidity usually negatively affects production and consumption. This may also have a negative effect on economic growth.
• When RBI adopts a contractionary monetary policy, it increases Policy Rates (Interest Rates) like Repo, Reverse Repo, MSF, Bank Rate etc.

Implications:

• Contractionary monetary policy causes a decrease in bond prices and an increase in interest rates.
• Higher interest rates lead to lower levels of capital investment.
• The higher interest rates make domestic bonds more attractive, so the demand for domestic bonds rises and the demand for foreign bonds falls.
• The demand for domestic currency rises and the demand for foreign currency falls, causing an increase in the exchange rate. (The value of the domestic currency is now higher relative to foreign currencies)
• A higher exchange rate causes exports to decrease, imports to increase and the balance of trade to decrease.