Weekly Current Affairs (8th to 14th July 2024) Part - 2 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

GS3/Economy

Financial Stability Report, June 2024

Why in news?

• The Reserve Bank of India (RBI) bi-annual Financial Stability Report (FSR) for June 2024 underscores India's robust financial resilience amid global uncertainties while highlighting concerns over the proliferation of digital personal loans and their impact on financial stability measures.

Key Highlights of the FSR for June 2024

Global Macrofinancial Risks:

• The global economy and financial system exhibit resilience amidst heightened risks and uncertainties.
• IMF projects global growth at 3.2% in 2024, while the World Bank forecasts 2.6%.
• Risks include disinflation, high public debt, economic fragmentation, geopolitical tensions, climate disasters, and cyber threats.
• EMEs remain vulnerable to external shocks.

Domestic Macrofinancial Risks:

• Strong macroeconomic fundamentals and stable financial system support Indian economic expansion.
• Healthy balance sheets across financial institutions with improving asset quality and robust earnings.

Improved Asset Quality:

• GNPA ratio of SCBs moderated to 2.8% in March 2024.
• Net NPAs improved to 0.6%.
• GNPA ratio expected to decrease further to 2.5% by March 2025.

Deposits and Credit Growth:

• Deposit growth reached 13.5% in Q1 2024.
• Overall credit growth remained healthy at 19.2%.

Capital Adequacy and Profitability:

• SCBs maintain a CRAR of 16.8%.
• ROA and ROE are at decadal highs.

Stress Test Results:

• Banks exhibit resilience to stress scenarios.

What are Non-Performing Assets?

• Category Description Definition

Types of NPAs:

• Sub-standard Assets.
• Doubtful Assets.
• Loss Assets.

Gross NPA (GNPA) and Net NPA:

NPA Ratios:

Why are Digital Personal Loans a Concern?

• Rise of Digital Personal Loans:
• Impact on Banking Sector:
• RBI's Concerns:

What can be Done to Recover Digital Personal Loans?

• Financial Technology:
• Creditworthiness Assessment:
• Improved Efficiency:
• Legal Recourse:

Mains Question:

• Examine the trends in non-performing assets (NPAs) in India and the implications for the banking sector's health.
• Evaluate the rise of digital personal loans in India, key factors driving their popularity, and risks to financial stability.

GS4/Ethics

Probity in Governance

Why in news?

Probity in governance refers to the adherence to the highest ethical standards and integrity in public administration. It is crucial for maintaining transparency, accountability, and trust in government institutions.

Importance of Probity

• Ensures fair and just decision-making processes.
• Promotes public trust in government actions.
• Prevents corruption and unethical practices.

Examples of Probity in Governance

• Regular auditing of government accounts to prevent financial irregularities.
• Implementing whistleblower protection laws to encourage reporting of wrongdoings.
• Transparent recruitment processes based on merit to ensure fairness.

Challenges to Achieving Probity

• Lack of awareness among the public about their rights and entitlements.
• Complex bureaucratic procedures that can lead to corruption.
• Political interference in administrative decisions.
• Insufficient enforcement of existing anti-corruption laws.

GS3/Environment

UNESCO Warns of 90% Soil Degradation by 2050

Why in News?

Recently, at an international conference in Agadir, Morocco, United Nations Educational, Scientific and Cultural Organization (UNESCO) Director-General urged its 194 Member States to improve soil protection and rehabilitation as the organisation warns that by 2050, up to 90% of the planet's soil could be degraded. This alarming prediction highlights a major threat to global biodiversity and human life.

What are UNESCO's Insights on Global Soil Degradation?

Current State of Soil Degradation:

• UNESCO states that according to the World Atlas of Desertification, 75% of soils are already degraded, directly affecting 3.2 billion people. The current trend may increase the impact to 90% by 2050.

World Soil Health Index:

• UNESCO will establish a 'world soil health index' with international partners to standardise soil quality measurement and comparison. This will help identify trends in degradation or improvement and vulnerable areas, aiming to improve the evaluation of soil management practices.

Pilot Programme for Sustainable Soil Management:

• UNESCO will launch a pilot programme for sustainable soil and landscape management in ten natural sites supported by its Biosphere Reserves Programme. The program aims to assess and improve management methods, and promote best practices worldwide.

Training Programs:

• UNESCO will train member government agencies, indigenous communities, and conservation organisations to access soil-protection tools.

What is Soil Degradation?

• Definition:

  Soil degradation is defined as a change in soil health status resulting in a diminished capacity of the ecosystem to provide goods and services for its beneficiaries. It involves biological, chemical, and physical decline in soil quality. Soil degradation encompasses a broad range of processes that reduce soil health and its ability to function properly within its ecosystem. It follows the LADA (Land Degradation Assessment in Drylands) definition of land degradation, highlighting the complexity of degradation processes and their subjective evaluation by different stakeholders.

• Causes:

  Soil degradation can be caused by various factors such as physical factors like rainfall, surface runoff, floods, wind erosion, and tillage. Biological factors include human and plant activities that reduce soil quality, while chemical factors involve nutrient reduction due to alkalinity, acidity, or waterlogging. The Green Revolution boosted food production but led to significant soil degradation. Deforestation exposes soil minerals by removing trees and crop cover, which are vital for soil formation. Rapid urbanisation and development projects led to the conversion of land for non-agricultural use, impacting soil quality. Untreated sewage and industrial waste were released into rivers, resulting in toxic water with heavy metals that degraded the soil. Mining activities, such as opencast mining, disturbed the water table, contaminated soil and water, and destroyed local flora and fauna. Many states did not enforce pollution laws, allowing industries to dump toxic effluent on agricultural land.

• Impact:

  Degraded soils lead to reduced food production, heightened food insecurity, and diminished ecosystem services. Soil degradation is also a significant environmental issue affecting climate change mitigation and resilience due to its impact on carbon stocks.

• Initiatives Related to Management of Soil:

  Global Soil Partnership (GSP), World Soil Day, Bonn Challenge, Land Degradation Neutrality (LDN), Sustainable Development Goal 15, Recarbonization of Agricultural Soils (RECSOIL). In India: Soil Health Management under National Mission for Sustainable Agriculture (NMSA), Soil Health Card Scheme, Paramparagat Krishi Vikas Yojana (PKVY), Sub-Mission on Agroforestry (SMAF) Scheme.

Way Forward

Regenerative Agriculture:

• It focuses on restoring soil health through practices like crop rotation, cover cropping, and reduced tillage. These methods enhance soil organic matter, improve water retention, and increase biodiversity.

Develop and use biochar, compost, and other organic amendments:

• To improve soil structure and fertility.

Promote Agroforestry:

• Integrate trees and shrubs into agricultural landscapes. Not only prevents soil erosion but also enhances soil fertility.

Assessment and Mapping:

• Create a global database on standardising soil health monitoring this allows for better tracking of progress and facilitates targeted interventions.

Green Infrastructure:

• Integrate green roofs, bioswales, and urban parks into city planning. This allows rainwater infiltration, reduces runoff, and creates pockets of healthy soil.

Reclaim and remediate abandoned industrial sites for urban agriculture or green spaces:

• Promoting soil regeneration.

Bioremediation:

• Utilize microbes and plants to break down or neutralize contaminants in polluted soils, promoting natural soil healing.

Phytomining:

• Explore the use of specific plants that can absorb and accumulate metals from contaminated soils, offering a natural remediation approach.

GS3/Science and Technology

Global Reports on Trans Fats and Insufficient Physical Activity

Why in news?

• Recently, the World Health Organization (WHO) has published the fifth milestone report on progress towards global trans fat elimination, covering the period from 2018–2023. In another development, a study was published in the Lancet Global Health journal that indicates almost 50% of adults in India engaged in insufficient levels of physical activity in 2022.

Key Highlights of the WHO Report on Trans Fat

• Industrially produced TFA is identified as a major contributor to heart disease. TFA offers no nutritional benefits and is detrimental to public health.
• In 2018, WHO set a target to eliminate TFA from the global food supply by the end of 2023. Even though the target has not been fully met, there has been remarkable progress made and sustained elimination would be achieved by 2025.
• By 2023, WHO's REPLACE action framework facilitated widespread adoption of best-practice policies in 53 countries, impacting 3.7 billion people, a substantial increase from 6% coverage five years earlier.
• WHO initiated a Validation Programme to recognise countries achieving TFA elimination goals. Denmark, Lithuania, Poland, Saudi Arabia, and Thailand were the first to receive the TFA Validation Certificate.
• WHO recommends all countries enact and enforce best-practice policies, engage in the Validation Programme, and encourage companies to reformulate products to eliminate TFA globally.
• Implementing best practice policies in just eight additional countries, (including Azerbaijan and China) would eliminate 90% of the global TFA burden.

Highlights of the Lancet Paper on Insufficient Physical Activity

• The definition of insufficient physical activity is not performing at least 150 minutes of moderate-intensity or 75 minutes of vigorous-intensity physical activity per week.
• Globally, about a third (31.3%) of adults were insufficiently physically active in 2022, up from 26.4% in 2010.
• South Asia ranks second highest globally in terms of insufficient physical activity among adults, following the high-income Asia Pacific region. In India, 57% of women were found to be insufficiently physically active, compared to 42% of men.
• Projections indicate that by 2030, 60% of Indian adults could be insufficiently active if current trends persist.
• Physical inactivity increases the risk of non-communicable diseases such as diabetes and heart disease. Rising physical inactivity, along with sedentary lifestyles, contributes to the increasing prevalence of these diseases and burdens healthcare systems.

What can be done to Ensure a Healthier Lifestyle among the Population?

• Check food labels for "partially hydrogenated oils" which indicate trans fats and choose healthy fats like olive oil, avocado, nuts, and fatty fish.
• Aim for at least 150 minutes of moderate-intensity exercise or 75 minutes of vigorous-intensity exercise per week as recommended by WHO. Break up sedentary time with short walks or stretches throughout the day.
• Encourage opportunities for women to participate in physical activity, like safe walking paths and women-only fitness classes. Promote the health benefits of exercise specifically for women.
• Raise awareness about the dangers of trans fats and the importance of physical activity through educational campaigns. Partner with schools, workplaces, and community centres to spread the message.
• Advocate for stronger government regulations to limit trans fats in processed foods. Support policies that promote physical activity like walkable neighbourhoods and public recreation facilities.

GS3/Economy

India's Ambitious Airport Expansion Plan

Why in News?

• India plans to double its number of operational airports to 300 by 2047, driven by an eightfold increase in passenger traffic. This ambitious expansion involves developing existing airstrips and constructing new airports across the country.

Factors Driving this Expansion

• Development of Existing Airstrips

  The Airports Authority of India (AAI) plans to develop 70 airstrips into airports capable of handling narrow-body aircraft like A320 or B737. Existing airstrips at Mandavi (Gujarat), Sultanpur (Uttar Pradesh), Tura (Meghalaya), and Chhindwara (Madhya Pradesh) can be upgraded for small aircraft. Nearly 40 airstrips are slated for development to accommodate smaller aircraft.

• New airports Construction

  New airports will be built if existing airstrips cannot be developed or if there is no civilian airport within 50 km. Greenfield airports may be constructed in Kota (Rajasthan), Parandur (Tamil Nadu), Kottayam (Kerala), Puri (Odisha), Purandar (Maharashtra), Car Nicobar, and Minicoy (Andaman and Nicobar Islands).

• Projected Passenger Traffic Growth

  Passenger traffic is expected to increase eightfold, from 376 million to 3-3.5 billion annually by 2047. International traffic may constitute 10-12% of this growth. The plan is part of Vision 2047, aiming to accommodate this massive increase in air travel demand.

• UDAN Scheme Implementation

  Improving connectivity to tier-II and -III cities through schemes like UDAN (Ude Desh ka Aam Nagrik). In 2014, there were 74 operational airports, which has now increased to 148.

• Rising Income Levels

  India's economy is projected to grow substantially by 2047, with per capita income expected to reach USD 18,000-USD 20,000. This economic growth is a crucial factor driving aviation expansion.

• Anticipated Growth in Air Cargo

  While passenger traffic is a primary focus, the expansion also considers the growing air cargo sector. E-commerce growth is driving demand for efficient air freight services.

• Development of Major International Hubs

  India aims to position its major airports as international hubs, competing with established hubs in the Middle East and Southeast Asia.

• Under-Penetration of Air Travel

  India's aviation market is one of the largest in the world, but air travel penetration is still low compared to developed countries. This creates a huge growth opportunity as income levels rise and air travel becomes more accessible.

Challenges for the Expansion of Airports in India

• Land Scarcity

  Increasing urbanization is exacerbating the land shortage, particularly in larger towns and cities. The cost and availability of land may impact the viability of many airport projects.

• Massive Investment Requirements

  India needs more than USD 40 billion in airport development by 2047. Total expenditure could reach USD 70-80 billion when including upgrades to airspace infrastructure and ground transportation.

• Infrastructure Constraints

  Many existing airports are reaching or have reached saturation, including critical hubs like Mumbai. Several cities urgently need new airports or significant expansions of existing ones; this can hinder the development process of new airports.

• Air Navigation Services (ANS) Infrastructure

  Significant investments (possibly up to USD 6-7 billion) are needed in ANS technology, people, and training.

Way Forward

• Integrated Land Use Planning

  Create special economic zones around airports, similar to "Aerotropolis" concept, which combines the airport with business, logistics, and residential areas.

• Multi-Modal Transportation Integration

  Develop integrated transportation hubs like Frankfurt Airport's long-distance train station, which connects the airport directly to the national rail network.

• Green Airport Design

  Prioritize sustainable and environmentally friendly airport designs. Adopt Oslo Airport's approach of using sustainable materials and other eco-friendly technologies.

• Public-Private Partnerships (PPP)

  Leverage PPP models to attract investment and expertise. Develop a robust PPP framework similar to build-operate-transfer (BOT) model.

• Capacity Enhancement of Existing Airports

  Maximizing capacity through technological and operational improvements. Implement advanced air traffic management systems and optimize runway usage to increase capacity without building new runways.

• Smart Airport Technologies

  Leverage cutting-edge technologies to enhance efficiency and passenger experience. Adopt technologies like biometric boarding and automated baggage handling systems to improve operational efficiency and capacity.

Mains Question:

Q. Discuss India's Vision 2047 for airport infrastructure expansion, and how does it aim to meet the anticipated increase in passenger traffic?

GS3/Economy

Push for Hybrid Electric Vehicles

Why in news?

• Recently, the state government of Uttar Pradesh announced the waiver of registration fees for strong hybrid and plug-in hybrid electric vehicles (EVs). This move aligns Uttar Pradesh with Tamil Nadu and Chandigarh, which also offer incentives to promote cleaner alternatives to petrol and diesel vehicles.

What is a Hybrid Electric Vehicle (HEV)?

• About Electric Vehicle:
• An Electric Vehicle (EV) is a vehicle that can be powered by an electric motor, draws electricity from a battery, and is capable of being charged from an external source.

Types of Electric Vehicles (EVs):

• Battery Electric Vehicle (BEV):
• These vehicles are fully powered by electricity, making them more efficient compared to hybrid and plug-in hybrids.
• Fuel Cell Electric Vehicle (FCEV):
• Electric energy for EVs is produced from chemical energy. For example, a Hydrogen FCEV.
• Hybrid Electric Vehicle (HEV):
• Also called Strong Hybrid EV, these vehicles use both an internal combustion engine (usually petrol) and a battery-powered motor powertrain. The petrol engine is used both to drive and charge when the battery is empty.
• Plug-in Hybrid Electric Vehicle (PHEV):
• These vehicles use both an internal combustion engine and a battery charged from an external socket. PHEVs are more efficient than HEVs but less efficient than BEVs.

Significance of Hybrid EVs:

• Practicality in the Medium Term (5-10 years):
• Hybrids are seen as a practical and viable option for the medium term as India moves towards full electrification of its vehicle fleet.
• Cost of Ownership Perspective:
• Hybrids are considered cost-effective due to waivers on registration fees, RTO fees, etc. For example, the UP government has announced a 100% waiver on registration fees for strong hybrids.
• Decarbonisation Drive:
• Hybrid vehicles play a role in India's decarbonisation efforts by emitting lower total carbon emissions compared to electric and traditional ICE vehicles.

Challenges in Adoption of Electric Vehicles in India

• Higher Cost:
• The high upfront cost remains a primary barrier for electric vehicles compared to conventional internal combustion engine vehicles.
• Lack of Clean Energy:
• Much of India's electricity is generated from burning coal, which hinders the reduction of carbon emissions through EV adoption.
• Supply Chain Issues:
• Global supply chain issues for lithium-ion batteries pose a significant challenge for EV adoption.
• Underdeveloped Charging Infrastructure:
• India's current charging infrastructure is inadequate for the increased demand for EVs.
• Suboptimal Battery Technology:
• Current EV batteries have limitations in capacity and voltage, affecting driving range.
• Persistent Resistance to Change:
• Indian consumers resist adopting EVs due to lack of awareness and reluctance to embrace new technologies.

Way Forward

• Addressing Cost Concerns:
• The government needs to provide demand incentives, targeted subsidies, and develop a network of battery swapping stations.
• Enhancing Charging Infrastructure:
• Prioritize the installation of fast-charging stations and integrate renewable energy sources like solar and wind power.
• Boosting Battery Technology and Supply Chain:
• Incentivize domestic lithium-ion cell manufacturing and implement efficient battery recycling programs.
• Promoting Consumer Awareness and Education:
• Conduct targeted public awareness campaigns and focus on rural outreach programs to promote the adoption of EVs.

GS3/Economy

Women's Representation in Corporates

Why in news?

• Recently, a report by the National Council of Applied Economic Research (NCAER) has revealed that women's representation in top management and company boards in India has increased but still lags behind the global average. In another study by the World Bank, it has been highlighted that India needs to assign a specific priority sector tag for women-led rural enterprises for easier access to credit.

Key Findings of the NCAER on Women's Representation in Indian Corporates

• The share of Women in Top Management Positions increased from nearly 14% in FY14 to about 22% in FY23.
• The share of Women on Company Boards in India around 5% nearly 16%
• The share of Women in Middle and Senior Management Roles in India is only 20% with a global average of 33%
• Share of Women Representation in NSE Listed Firms: Almost 60% of the firms studied, including 5 of the top 10 NSE-listed firms by market capitalization, did not have any women in their top management teams as of March 2023. About 10% of the firms had just one woman

Key Recommendations of the World Bank on Boosting Employment Opportunities for Women in India

• Assign Priority Sector Tag for Women-led Rural Enterprises: study found that loans to women's micro-enterprises are not prioritised separately. It suggests creating a new sub-category within the micro-enterprise sector to cater specifically to women-owned ventures with high growth potential.
• Bridging the Digital Divide: The report emphasised the need to equip women entrepreneurs with digital literacy, training programs for digital bookkeeping and payment systems to enhance their financial management capabilities.
• Graduation Programs for Sustainable Growth The report suggests implementing graduation programs to help micro-loan borrowers transition to mainstream commercial finance. It also advocates for the strategic use of district-level data analytics by stakeholders, including banks, to make informed decisions and effectively promote women's entrepreneurship in rural India.
• Strengthening the Institutional Ecosystem: The report recommends decentralising incubation centres in rural areas for mentorship and business support. It also suggests developing women's entrepreneur associations to foster community and peer learning.

Mains Question:

Discuss the state of Women's workforce participation in Indian corporates. Also, suggest measures to enhance their participation in the workforce.