Weekly Current Affairs (8th to 14th November 2023) Part - 2 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Radiative Cooling Paint

Context: In a groundbreaking development, researchers at the Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR) in Bengaluru have unveiled a pioneering paint that harnesses the power of radiative cooling.

• This innovative creation has emerged as a beacon of hope amidst the growing concerns of global warming and the urgent need for sustainable cooling solutions.

Understanding Radiative Cooling Technology

Radiative cooling technology is a cutting-edge method designed to dissipate heat from surfaces by emitting thermal radiation into the atmosphere, thereby enabling objects to cool down naturally. The process facilitates the creation of cooler surfaces by emitting thermal radiation directly into the extremely cold universe, utilizing the atmospheric transmission window (8 - 13 µm), all without relying on electricity.

Addressing the Need for Sustainable Cooling Solutions

With the alarming rise in global temperatures and the exacerbation of urban heat island effects, there is an imperative demand for effective cooling technologies. Conventional active cooling devices such as air-conditioners, fans, and refrigerators heavily rely on electrical energy, contributing to increased greenhouse gas emissions and elevated surface temperatures. Radiative cooling technology presents an eco-friendly alternative by emitting thermal radiation without consuming electricity, thereby countering these challenges effectively.

Unveiling Radiative Cooling Paint

The radiative cooling paint is formulated from a novel magnesium oxide (MgO)-polyvinylidene fluoride (PVDF) polymer nanocomposite, crafted from materials that are abundant, cost-effective, and environmentally friendly. This remarkable paint boasts high solar reflectivity and infrared thermal emissivity, attributes crucial for its outstanding cooling capabilities.

Remarkable Features and Benefits

The MgO-PVDF paint, enhanced with dielectric nanoparticles, exhibits exceptional solar reflectance of 96.3% and remarkable thermal emission of 98.5%. Tailored specifically to combat the escalating heat impact on buildings, this paint significantly reduces electricity consumption while providing essential cooling relief during scorching summer days. Its unparalleled optical features lower surface temperatures by approximately 10°C in intense sunlight, surpassing the performance of standard white paints.

Versatility and Application

Beyond its cooling prowess, the paint's water-resistant and hydrophobic nature ensures effortless application on diverse surfaces. Its consistent coverage and strong adhesion make it an ideal solution for various infrastructures, promising sustainability and efficiency.

• In essence, this groundbreaking radiative cooling paint not only addresses the critical need for sustainable cooling but also represents a remarkable stride toward combating climate change while prioritizing eco-friendly solutions in the face of rising global temperatures.
• This innovative technology undoubtedly paves the way for a cooler and more sustainable future.

The State of Food and Agriculture 2023

Context: In a groundbreaking report titled 'The State of Food and Agriculture 2023' released by the Food and Agriculture Organization (FAO), the dire consequences of unhealthy diets and the surge in ultra-processed foods have been starkly revealed.

• The findings shed light on the staggering hidden costs—exceeding a colossal USD 7 trillion annually—that extend beyond mere health implications, encompassing far-reaching environmental and economic impacts.

Unveiling the Hidden Costs

• Hidden Costs of Unhealthy Diets: The consumption of ultra-processed foods, fats, and sugars has led to monumental hidden costs, surpassing USD 7 trillion per year. These costs primarily stem from health-related issues such as obesity, non-communicable diseases, and reduced labor productivity.
• Global Impact and Economic Burden: Upper-middle-income and high-income countries bear the brunt of these hidden costs, accounting for a substantial 75%. The report estimates that these unhealthy diets equate to nearly 10% of the global GDP, significantly impacting 154 countries worldwide.
• India's Predicament: India faces a hidden cost of approximately USD 1.1 trillion, ranking as the third-largest globally. Factors contributing to this staggering figure include disease burden, social costs of poverty, and environmental expenses.

The Pervasive Spread of Processed Foods

• Rapid Rise in Consumption: Processed food consumption is on the rise, especially in peri-urban and rural areas worldwide. Urbanization, lifestyle shifts, altered employment profiles, and longer commuting times are key drivers fueling this trend.
• Urban vs. Rural Consumption Patterns: Contrary to conventional beliefs, consumption patterns of processed foods exhibit a widespread prevalence across both urban and rural areas. This underscores the need for comprehensive strategies beyond focusing solely on urban centers.

Food Insecurity and Future Projections

• Global Food Insecurity: Despite efforts, moderate to severe food insecurity remains alarmingly high—encompassing 29.6% of the global population, affecting approximately 2.4 billion individuals. Among South Asian countries, India grapples with a significant undernourishment challenge.
• Future Projections: By 2030, chronic undernourishment is projected to afflict nearly 600 million individuals, emphasizing the urgency of addressing these systemic issues.

Addressing the Burden of Ultra-Processed Foods

• Transforming Agrifood Systems: Sustainable, inclusive, and healthier agrifood systems are crucial in mitigating the burden of ultra-processed foods. Encouraging diverse, nutritious, and less processed foods, alongside regulating marketing, labeling, and taxation, is pivotal.
• Enhancing Access and Affordability: Improving access and affordability of healthy foods, especially for vulnerable groups, through social protection, food assistance, and public procurement, is imperative.
• Empowering Consumers and System Efficiency: Educating and empowering consumers, minimizing food losses and waste, enhancing resource efficiency, and embracing cleaner energy sources are vital strategies.

Government Initiatives and the Role of FAO

• Government Initiatives: Initiatives like the National Food Security Act, PM-POSHAN Scheme, Fit India Movement, and Eat Right Movement aim to promote healthier lifestyles and combat food-related challenges.
• About FAO: The Food and Agriculture Organization, a specialized agency of the UN, spearheads global efforts to eradicate hunger and celebrates World Food Day annually on October 16th. With a presence in over 130 countries, FAO leads various publications and initiatives aimed at fostering sustainable food systems.

Conclusion

The 'State of Food and Agriculture 2023' report serves as a clarion call to action, emphasizing the urgency of transforming our food systems to combat the burgeoning challenges posed by unhealthy diets and processed foods. Collaboration between stakeholders, innovative strategies, and concerted efforts are essential to ensure a healthier and more sustainable future for all.

India’s Steel Sector

India's steel sector has been a pivotal component of the nation's industrial landscape. The recent ISA Steel Conclave 2023 emphasized the critical role of steel in India's sustainable future, focusing on augmenting production capacities to meet the growing demands of the infrastructure sector.

State of India's Steel Sector

Present Scenario

• India stands as the world's second-largest producer of crude steel, with an output of 125.32 million tonnes (MT) in FY23.
• Remarkable growth: The industry has experienced a 75% increase in production since 2008.
• Per-capita consumption: Despite growth, India's per capita steel consumption remains at 86.7 kilograms, below the global average of 233 kgs.
• Policy projections: The National Steel Policy aims for a crude steel capacity of 300 MT, production of 255 MT, and a per capita consumption of 158 kgs by 2030-31.

Significance of Steel Sector

• Vital industry: Steel finds extensive use in construction, infrastructure, automotive, engineering, and defense sectors, contributing significantly to India's GDP (2% in FY 21-22).

Challenges Faced by the Steel Sector

Barriers to Setting up Modern Steel Plants

• High investment: Establishing modern steel-making plants demands substantial investment (around Rs 7000.00 crores for a 1-tonne capacity plant), posing challenges for domestic entities.
• Financial challenges: Cyclical demand influenced by factors like monsoons leads to financial strains and closures during low-demand periods.

Low Per Capita Consumption and Technology Investment

• Economic disparities: India's low per capita consumption reflects economic disparities, reducing the incentive for establishing large-scale steel plants.
• Technology lag: Historical underinvestment in technology, research, and development has resulted in dependence on international expertise, adding to costs.

Environmental Concerns and EU’s CBAM Impact

• Carbon footprint: Steel production contributes significantly to carbon dioxide emissions, necessitating a shift to greener technologies.
• Impact of CBAM: The EU's Carbon Border Adjustment Mechanism will adversely affect India's steel exports by imposing additional scrutiny and taxes.

The Way Forward

Adopting Green Technologies

• Promotion of Green Steel: Utilizing low-carbon energy sources like hydrogen or electricity can reduce environmental impact.
• Enhancing carbon efficiency: Measures to improve carbon efficiency in steel production can offset the impact of CBAM.

Advocating for Fair Policies and Collaboration

• Dialogue with policymakers: Engaging with policymakers and international bodies to advocate for fair CBAM policies is essential.
• Collaborative efforts: Joint initiatives with other industries and countries can foster innovative solutions for the challenges faced by India's steel sector.

Conclusion

India's steel sector faces both opportunities and challenges. By investing in sustainable practices, adopting advanced technologies, and engaging in collaborative efforts, the sector can overcome hurdles and pave the way for a robust, environmentally conscious future.

Electoral Trusts Scheme, 2013

Context: In the realm of political funding in India, the Electoral Trusts Scheme stands as a pivotal mechanism instituted in 2013.

• While the recent focus has been on the Electoral Bonds Scheme, the roots of structured political contributions trace back to the Electoral Trusts (ET) Scheme introduced by the Central Board of Direct Taxes (CBDT).

The Electoral Trusts Scheme

• The Electoral Trusts Scheme, 2013 was formulated with the primary objective of enabling companies to channel contributions received from other corporations and individuals towards political parties. However, eligibility for an Electoral Trust rests exclusively with companies registered under Section 25 of the Companies Act, 1956. These trusts operate within a framework that requires renewal every three financial years, establishing a clear procedure for approval, receipt, and distribution of voluntary contributions.
• Under the purview of the Income-tax Act, 1961, and Income Tax Rules-1962, the Electoral Trusts facilitate contributions from Indian citizens, companies registered in India, resident firms, Hindu undivided families, associations of persons, or groups of individuals in India. Nevertheless, they are prohibited from accepting contributions from foreign entities or non-Indian citizens and are restricted from receiving donations from other registered electoral trusts.

Operational Mechanisms of Electoral Trusts

• One of the key facets of the Electoral Trusts Scheme revolves around the allocation of funds. A maximum of 5% of the total funds collected during a financial year is allocated for administrative expenses, while the remaining 95% is mandated for distribution among eligible political parties registered under the Representation of the People Act, 1951. To ensure accountability, Electoral Trusts are obligated to maintain meticulous records of receipts, distributions, as well as a comprehensive list of donors and recipients.
• Moreover, every Electoral Trust is subject to audit, requiring accounts to be audited by a certified accountant, with audit reports submitted to the Commissioner of Income-tax or the Director of Income-tax.

Understanding Electoral Bonds

• Contrasting the Electoral Trusts Scheme, the Electoral Bonds (EB) introduced in 2018 serve as financial instruments for political party donations. Issued in varying denominations without a maximum limit, these bonds can be purchased from the State Bank of India within specified periods throughout the year. Notably, these bonds do not disclose the donor's identity on the bond itself.

Comparative Analysis: Electoral Trusts vs. Electoral Bonds

• The distinction between the two funding mechanisms lies in transparency and accountability. Electoral Trusts operate with transparency, disclosing both contributors and beneficiaries, and maintain a robust reporting system submitted to the Election Commission of India (ECI). Conversely, the Electoral Bonds Scheme lacks transparency due to donor anonymity, making it arduous to trace the origins of contributions.

Trends and Funding Dynamics

• Statistical data from 2013-14 to 2021-22 showcases a significant surge in political funding through government schemes, predominantly via the Electoral Bonds Scheme. During this period, political parties received a substantial Rs 9,208 crore through EBs, overshadowing the Rs 1,631 crore facilitated by ETs between 2017-18 and 2021-22.
• An analysis by the Association for Democratic Reforms (ADR) reveals that a notable portion of the donations via Electoral Trusts in 2021-22 was secured by a single political party, capturing 72% of total donations. Additionally, more than half (55%) of political funding over the years came through Electoral Bonds.

Conclusion

The Electoral Trusts Scheme, instituted in 2013, and the subsequent introduction of the Electoral Bonds Scheme in 2018 have transformed the landscape of political funding in India. While the EB Scheme has garnered larger contributions, questions surrounding transparency persist, contrasting the more transparent framework of the Electoral Trusts. As debates ensue over the future of political funding mechanisms, the balance between transparency and financial support remains a focal point in the ongoing discourse.

CAFRAL Raises Concerns Over NBFC and Digital Lending Practices

Context: In a recent report, the Centre for Advanced Financial Research and Learning (CAFRAL), an institution backed by the Reserve Bank of India (RBI), has sounded the alarm on significant risks within the Non-Banking Finance Company (NBFC) sector and highlighted the perils lurking in the digital lending landscape.

• This scrutiny comes amidst concerns about the interdependencies within the NBFC ecosystem and the potential dangers posed by fraudulent lending apps collecting personal data, potentially endangering users' privacy and security.

Key Concerns Unveiled by CAFRAL

Interdependency Risks in NBFC Sector:

• CAFRAL's observations pinpoint a concerning trend where banks predominantly extend their lending to larger NBFCs, creating a web of interdependencies within the NBFC sector. This interconnectedness amplifies the ripple effects of any shocks, with instances like the defaults of IL&FS in 2018 and DHFL in June 2019, triggering liquidity crises and denting confidence in the NBFC sector. This, in turn, adversely affected the asset quality and profitability of the banks that had lent to these troubled NBFCs.

Impact of Contractionary Monetary Policy on NBFCs:

• The report flags the repercussions of a contractionary monetary policy on NBFCs, where tightening policy rates by the RBI escalate borrowing costs for NBFCs, diminishing their profitability. Consequently, to sustain their margins, these companies tend to pivot towards riskier segments such as unsecured loans and subprime borrowers. Additionally, they increase exposure to capital markets via investments in equities and mutual funds. Such strategies expose them to heightened credit, market, and liquidity risks, potentially impacting their solvency and stability.

Warnings About Illicit Lending Apps and Fintech Impact:

• CAFRAL highlights the proliferation of fake or illicit digital lending apps masquerading as legitimate platforms. These apps surreptitiously gather personal data, raising concerns about potential misuse, and pose significant safety and privacy risks for users. With the burgeoning FinTech industry diversifying products, the report notes approximately 1100 lending apps available for Indian Android users across 80 app stores, increasing the potential for data privacy breaches.

Understanding Non-Banking Finance Companies (NBFCs)

• An NBFC, registered under the Companies Act, 1956, engages in various financial activities such as loans, investments, leasing, and insurance. It is differentiated from entities primarily involved in agriculture, industry, goods trading, services, or immovable property trading. The RBI regulates NBFCs under the RBI Act 1934, with specific criteria determining their registration.

How NBFCs Differ from Banks

• Unlike banks, NBFCs cannot accept demand deposits, are excluded from the payment and settlement system, and do not offer deposit insurance, commonly available for bank depositors in cases of bank failures.

Strategies for Mitigation and Progress

• The report outlines crucial steps to mitigate these risks, emphasizing the need for enhanced monitoring of inter-linkages and spillovers within the NBFC sector and between NBFCs and banks. Strengthening risk management practices, bolstering corporate governance, and tighter regulatory oversight over digital lending applications are also recommended.

Loss and Damage Fund

Context: In an era defined by the ever-intensifying climate crisis, the 'Loss and Damage' (L&D) fund has emerged as a crucial financial mechanism. This fund, designed to address the irreversible consequences of climate change, stands as a beacon of hope for communities, countries, and ecosystems grappling with the profound impacts of environmental degradation.

Understanding the 'Loss and Damage' Fund

The L&D fund stands as a testament to the proactive response to climate change. It serves as a recognition of the real losses incurred by various entities due to the relentless march of climate change, extending beyond mere monetary value to encompass human rights, well-being, and environmental sustainability.

Genesis and Evolution of the L&D Fund

• The origins of the L&D fund trace back over three decades, marked by persistent calls for affluent nations to acknowledge their historical role in elevating the world's temperature. It wasn't until COP 19 in 2013 that the formal agreement within the United Nations Framework Convention on Climate Change (UNFCCC) laid the groundwork for establishing this fund.
• Subsequent developments, including the establishment of the Santiago Network for L&D at COP 25 and further discussions at COP 26 and COP 27, have propelled the establishment of the fund. However, challenges in operationalizing it have surfaced, primarily due to unresolved issues and disagreements among member states.

Challenges Encountered

• Foremost among the challenges faced is the reluctance of developed nations, notably the United States, in committing to be primary donors to the fund. This reluctance casts a shadow over the fund's objectives and weakens the collaborative spirit necessary to combat climate change effectively.
• Moreover, uncertainty looms over the fund's size and structure, with no clear commitment or framework established. Diplomatic breakdowns between developed and developing nations further complicate matters, raising doubts about the fund's effectiveness and its ability to address the needs of vulnerable communities.

Global Consequences and Security Implications

• The repercussions of a weakened L&D fund extend far beyond diplomatic rifts. The absence of adequate support exacerbates the suffering of vulnerable communities, leading to potential security implications as conflicts and tensions escalate in climate-vulnerable regions.

The Way Forward: Urgent Actions Required

To navigate these challenges and pave the way for effective climate action, several critical steps need to be taken:

• Global Commitment: Developed nations must actively contribute as primary donors to the L&D fund, ensuring robust financial support.
• Transparency and Structure: Clear discussions are imperative to define the fund's size, operational guidelines, and allocation mechanisms for enhanced accountability.
• Inclusive Diplomacy: Open dialogues that address the concerns of developing nations are crucial for fostering collaboration and effective climate action.
• Security Mitigation: Proactive measures must be taken to address the security implications of climate-induced instability, ensuring support for vulnerable communities and averting humanitarian crises.

Conclusion

The 'Loss and Damage' fund stands as a beacon of hope amid the climate crisis. However, its effectiveness hinges on global cooperation and commitment. Only through concerted efforts, transparent discussions, and inclusive actions can this fund serve its intended purpose of mitigating the irreversible consequences of climate change and securing a sustainable future for all.