THE ENVIRONMENT AND ECOLOGY

1. RADIO TAGGING OF INDIAN PANGOLIN

THE CONTEXT: The Odisha Forest and Environment Department has completed its first-ever radio-tagging of the Indian pangolin in an attempt to standardise the rehabilitation protocol for the animal in the State.

THE EXPLANATION: 

• According to the forest department a male pangolin, which was rescued by the Paralakhemundi Forest Division November 2021, was radio-tagged and released in the Nandankanan Wildlife Sanctuary after treatment.
• “To standardise the rehabilitation protocol for such rescued animals, a radio-tagged Indian pangolin was released into the wild in Nandankanan Wildlife Sanctuary following soft release protocols and provision for post-release monitoring”.
• The animal was screened for parasites and diseases during a month-long quarantine at the Nandankanan Zoological Park (NZP), which is the only conservation breeding centre for Indian pangolins in the world.
• According to the forest officials, “the pangolin was found suitable for release in the wild. It gained 780 grams during quarantine and now weighs 14.740 kg. It is exhibiting normal behaviour. It is fitted with a VHF [very high frequency] radio transmitter, weighing 0.5% of its body weight, procured from advanced telemetry systems specialised in radio telemetry instruments”.
• After Madhya Pradesh, Odisha is the second State in the country to release a radio-tagged Indian pangolin into the wild. NZP authorities said the exercise was expected to reveal valuable information on the ecology, dispersal pattern, home range and survival of the reclusive animal.

What is Radio Tagging?

Radio-tracking is the technique of determining information about an animal through the use of radio signals from or to a device carried by the animal. Most radio tracking systems involve transmitters tuned to different frequencies (analogous to different AM/FM radio stations) that allow individual identification.

About Indian Pangolin

The Indian pangolin or thick-tailed pangolin is a solitary, shy, slow moving, nocturnal mammal, Unlike other pangolin species, the Indian pangolin does not often climb trees. Pangolins or scaly anteaters (order Pholidota, meaning ‘scaled animals’) are a group of unusual mammals with tough, protective keratin scales.

Distribution: Bangladesh, India, Nepal, Pakistan and Sri Lanka.

Threats:

• Once known to be found in large numbers, its population is rapidly declining in its range due to habitat loss and rampant poaching for its skin, scales, and meat.
• Pangolins are the most illegally traded mammals in the world and the Indian pangolin is the largest among eight pangolin species. The nocturnal animal lives in burrows and feed on ants and termites. In Odisha, seizures of pangolins and their scales have been made over the past few years.

Conservation status:

• All pangolin species are listed in Convention on International Trade in Endangered Species (CITES) Appendix I.
• In India, pangolins, both Indian and Chinese, are protected under Schedule 1 of the Wildlife (Protection) Act 1972

THE INDIAN ECONOMY

2. ELECTORAL BONDS

THE CONTEXT: Ahead of assembly elections in five states, the Union government approved the issuance of the 19th tranche of electoral bonds which will be open for sale from January 1 to 10 2022.

THE EXPLANATION:

• Electoral bonds have been pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency in political funding. However, Opposition parties have been raising concerns about alleged opaqueness in funding through such bonds.
• The 29 specified SBI branches are in cities such as Lucknow, Shimla, Dehradun Kolkata, Guwahati, Chennai, Thiruvananthapuram, Patna, New Delhi, Chandigarh, Srinagar, Gandhinagar, Bhopal, Raipur, and Mumbai.

What are Electoral Bonds?

• The Government of India has notified the Electoral Bond Scheme 2018. As per provisions of the Scheme, Electoral Bonds may be purchased by a person who is a citizen of India or incorporated or established in India. A person being an individual can buy Electoral Bonds, either singly or jointly with other individuals.
• Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one percent of the votes polled in the last General Election to the House of the People or the Legislative Assembly of the State, shall be eligible to receive the Electoral Bonds. The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.
• State Bank of India (SBI), has been authorised to issue and encash Electoral Bonds through its 29 Authorized Branches ( as per list enclosed) e.f. 01.07.2021 to 10.07.2021.
• The Electoral Bonds shall be valid for fifteen calendar days from the date of issue and no payment shall be made to any payee Political Party if the Electoral Bond is deposited after expiry of the validity period. The Electoral Bond deposited by an eligible Political Party in its account shall be credited on the same day.

INTERNAL SECURITY

3. AFSPA EXTENDED IN NAGALAND

THE CONTEXT: The Government of India has extended the Armed Forces Special Powers Act, 1958 in Nagaland for another six months (June 30, 2022). The decision came days after the Home Ministry had instituted a high-level committee chaired by a Secretary-level officer for examining the possibility of AFSPA repeal in Nagaland.

THE EXPLANATION:

• The Central Government issued a notification in which it declared an entire state of Nagaland as a ‘disturbed area’ and extended the AFSPA, 1958 in the state for the period of another six months. Govt extending the Armed Forces act till June 30, 2022, stated that Nagaland’s ‘disturbed and dangerous’ situation has necessitated the use of armed forces in aid of the civil power. The Indian Army is also currently conducting a court of inquiry into an ambush that went wrong in Nagaland.
• The decision came three weeks after 6 innocent civilians in early December 2021, in the state were killed in an Army ambush and eight more in the violence that was triggered in Mon District, Nagaland

Govt demands repeal of the law

• In view of the improved situation in the Northeast state, the Nagaland government has been consistently taking a stand that the state must not be declared a ‘disturbed area’ and the entire Naga Society has been calling to repeal AFSPA.
• The Chief Minister while informing about the State govt’s clear stand on the law further added that the declaration of a state or any other area as the ‘disturbed area’ under AFSPA is made by the Central Government generally for a period of 6 months only at a time.
• The State Government has passed a resolution against the Armed Forces Special Act that has been adopted in the aftermath of the killing of 14 civilians by the security forces.

What is Armed Forces Special Powers Act (AFSPA)?

How is a region declared ‘disturbed’?

• Section (3) of the AFSPA empowers the governor of the state or Union territoryto issue an official notification in The Gazette of India, following which the Centre has the authority to send in armed forces for civilian aid.
• Once declared ‘disturbed’, the region has to maintain status quo for a minimum of three months, according to The Disturbed Areas (Special Courts) Act, 1976.

 Criticism of AFSPA:

• Sec 4(a) in which army can shoot to kill, as it violates article 21 which gives right to life.
• Section 4(b) search without warrants violates right to liberty and article 22.
• Dispersion of civil assembly by armed forces under section 121 violates right to assembly
• No judicial magistrate permission required while arresting –violate article 22
• Overrides CrPC.
• Violation of human rights
• It alienates the people from army and then from the rest of India. A feeling of otherworldly is generated in their mind.

What should be done?

• Create committees at the district level with representatives of the army, administrators and the public which will report, assess and track complaints in that area.
• All investigations should be time bound reasons for the delay must be communicated with the aggrieved.
• Amendments In-Laws :The lacunae in the Act, as a result of definitional voids with respect to terms like “disturbed”, “dangerous” and “land forces” need to be amplified to ensure greater clarity.
• The onus of proving the alleged person as terrorists should lie with the forces. Sec 7 should be suitable amended to this effect.

4. CHINA ISSUES ‘OFFICIAL’ NAMES FOR 15 PLACES IN ARUNACHAL PRADESH

THE CONTEXT: China’s Ministry of Civil Affairs issued a statement stating that they have ‘standardised’ names for 15 places in Arunachal Pradesh, to be used on Chinese maps. This is the second time China has renamed the names of the places of Arunachal Pradesh.

THE EXPLANATION:

• China shares its 22,457 km land boundary with 14 countries including India, the third longest after the borders with Mongolia and Russia.
• The Ministry of External Affairs has dismissed the Chinese “invention”. According to the ministry ,“Arunachal Pradesh has always been, and will always be, an integral part of India. Assigning invented names to places in Arunachal Pradesh does not alter this fact.”

Why is China giving names to places that are in India?

• China claims some 90,000 sq km of Arunachal Pradesh as its territory. It calls the area “Zangnan” in the Chinese language and makes repeated references to “South Tibet”. Chinese maps show Arunachal Pradesh as part of China, and sometimes parenthetically refer to it as “so-called Arunachal Pradesh”.
• China makes periodic efforts to underline this unilateral claim to Indian territory. Giving Chinese names to places in Arunachal Pradesh is part of that effort.

“According to relevant regulations on the management of place names, the department has standardised some place names in China’s South Tibet region. We have released the first batch of the place names in South Tibet (six in total).

The latitude and longitude listed with the names showed those places as Tawang, KraDaadi, West Siang, Siang (where Mechuka or Menchuka is an emerging tourist destination), Anjaw, and Subansiri respectively.

These six places spanned the breadth of Arunachal Pradesh — “Wo’gyainling” in the west, “Bumo La” in the east and the other four located in the central part of the state.

What is China’s argument for claiming these areas?

• The People’s Republic of China disputes the legal status of the McMahon Line, the boundary between Tibet and British India that was agreed at the Simla Convention — officially the ‘Convention Between Great Britain, China, and Tibet’ — of 1914.
• China was represented at the Simla Convention by a plenipotentiary of the Republic of China, which had been declared in 1912 after the Qing dynasty was overthrown. (The present communist government came to power only in 1949, when the People’s Republic was proclaimed.) The Chinese representative did not consent to the Simla Convention, saying Tibet had no independent authority to enter into international agreements.
• The McMohan Line, named after Henry McMahon, the chief British negotiator at Shimla, was drawn from the eastern border of Bhutan to the Isu Razi pass on the China-Myanmar border. China claims territory to the south of the McMahon Line, lying in Arunachal Pradesh.

THE MISCELLANEOUS

5. SAHITYA AKADEMI AWARDS

THE CONTEXT: The Sahitya Akademi announced its prestigious “Sahitya Akademi Awards, YuvaPuraskar as well as Bal Sahitya Puraskar” for 2021 in various languages.

THE EXPLANATION:

• The Sahitya Akademy Award 2021 was given in 20 Indian languages.
• Namita Gokhale received it in English for her novel titled ‘Things to Leave Behind’.

Other winners include:

• Anuradha Sarma Pujari (Assamese)
• BratyaBasu (Bengali)
• Daya Prakash Sinha (Hindi)
• WaliMohdAseerKashtawari (Kashmiri)
• Khalid Hussain (Punjabi)
• Vindeshwari prasad Mishr “Vinay” (Sanskrit) etc.

Sahitya AkademiYuvaPuraskar 2021

• The Sahitya AkademiYuvaPuraskar 2021 was given in 22 Indian languages.
• Megha Majumdar won this award for her debut book ‘A Burning’, which was published in 2020. This book is about struggles of life in India.
• Megha Majumdar was born in India, but now lives in New York and works as an Editor in chief- Books at Catapult Story.

Other winners of the award include:

• Abhijit Bora (Assamese)
• Gourob Chakraborty (Bengali)
• DrashtiSoni (Gujarati)
• Himanshu Vajpai (Hindi)
• Mahesh Dahal (Nepali)
• SwetapadmaSatapathy (Sanskrit) etc.

Bal Sahitya Puraskar 2021

• The Bal Sahitya Puraskar 2021 was given in 22 Indian languages.
• Anita Vachharajani won the award in the English language. She was awarded for her children’s book titled ‘Amrita Sher-Gil: Rebel With A Paintbrush’.

Other winners include:

• Mrinal Chandra Kalita (Assamese)
• Sunirmal Chakraborty (Bengali)
• Devendra Mewari (Hindi)
• Majeed Majazi (Kashmiri) etc.

The Sahitya Akademi Award

• It is a literary honour in India, conferred annually by the Sahitya Akademi. Award is conferred on writers of the most outstanding books of literary merit, which are published in any of 24 major Indian languages and 22 languages that are listed in the Eighth Schedule of the Indian Constitution. The award was established in 1954.

THE PRELIMS PRACTICE QUESTION

 

Q1. With reference to the Indus river system, of the following four rivers, three of them pour into one of them which joins the Indus direct. Among the following, which one is such river that joins the indus direct? (a) Chenab (b) Jhelum (c) Ravi (d) Sutlej ANSWER FOR 30THDECEMBER 2021 Answer: B

[WpProQuiz 126]

THE CONTEXT: The retail inflation in the Indian economy accelerated in Nov. 2021 towards the upper limit of the RBI’s target range as fruit and vegetable prices rose. There are chances that inflation may rise above 6 percent in early 2022. It is fear that the rising of inflation can impact the recovery of the Indian economy in post-pandemic times. Let us understand the issue of inflation that is impacting the Indian Economy.

TREND OF INFLATION IN INDIA

• In the latest bi-monthly meeting of MPC in December 2021, the committee projects 5.30% inflation rate for FY22 and a dovish forecast at around 5% thereafter.
• Retail inflation rose 4.48 percent in October 2021 from 4.35 percent in September. The data for November 2021 is yet to come. It will release on 13^th
• The food inflation: determined by the consumer food price index rose to 0.85 percent in October, compared to 0.68 percent in September. The inflation in the ‘fuel and light’ category remained elevated at 14.35 percent during the month, according to data released by the National Statistical Office (NSO).

 REASONS FOR THE RISING IN INFLATION IN INDIA

• The sharp rise in commodity prices across the world is a major reason behind the inflation spike in India. This is increasing the import cost for some of the crucial consumables, pushing inflation higher.
• High petrol, diesel, and cooking gas prices drove fuel inflation, while high prices of basic metals, textiles, plastics, and edible oils drove inflation of manufactured items.
• The price of vegetable oils, a major import item, shot up 57% to reach a decadal high in April 2021.
• Metals prices are near the highest in 10 years and international freight costs are escalating.
• The rise in inflation was mostly due to rising in prices of fuel, edible oil prices, and non-alcoholic beverages. Retail inflation edged higher last month despite the base effect as it stood at 7.61 percent in October 2020, while the food inflation was at 11 percent in the year-ago period.

 EFFECTS OF INFLATION ON VARIOUS ASPECTS OF THE ECONOMY AND ECONOMIC GROWTH

NEGATIVE EFFECT

• On Imports: They become costly due to high inflation as the currency depreciates and more foreign currency is lost for imports.

• On Lending: Lending institutions (like banks) feel the pressure of higher lending due to the high inflation rate in the economy. Therefore, they don’t revise the nominal interest rates as the real cost of borrowing falls by the same percentage with which the inflation rises.
• On Income: Increase in inflation increases the nominal value of income while the real value of income remains the same.

• On Expenditure: Increased prices make consumption levels fall as goods and services get costlier.

POSITIVE EFFECT

• On Exports: Inflation makes exportable goods competitive in the world market and thus exports increase.
• On Aggregate demand: High rate of inflation shows there is high demand
• On Savings: Money loses value due to inflation, that’s why people keep less money with them and keep more money in banks. It means that the savings rate increases in the short run. In long run, higher inflates deplete the savings rate in an economy.
• On Wages: Inflation increases the nominal value of wages but their real values fall.

WILL INFLATON DENT ECONOMIC RECOVERY?

• One of the key factors why inflation probably witnessed a rise in November is the sharp rise in the prices of various vegetables. The jump in vegetable prices, though temporary, could hit demand and disrupt economic recovery for a short period.
• While fuel prices have been cut by the government, it seems that fuel demand has fallen after the festive season. This indicates a lower demand for fuel. India’s fuel consumption in November was down 4 percent on a quarterly basis and over 11 percent lower year on year.
• However, the demand will rise again as Covid-19 fades further. This indicates that the present scenario of inflation is unlikely to impact economic recovery for a long period.

BUT RISING INPUT COST BIGGEST WORRY FOR ECONOMIC RECOVERY

• While vegetable prices and fuel demand may fade away over the next few months, India could face a period of persistently high inflation due to rising input costs.
• Many companies across the spectrum from automakers to electronic goods manufacturers have hiked prices of their products due to prolonged disruption in global supply chains and a severe shortage of semiconductors. Car manufacturers are already going for another round of price hikes in January 2022.
• Rising inflation in the non-food category, arising from global supply chain disruptions and fresh restrictions due to the new Omicron variant of coronavirus, seems to be the biggest hurdle in the path of swift economic recovery.

ROLE OF RBI IN CONTROLLING INFLATION

The RBI has adopted policies through which it decreases or increases certain rates to control inflation. Hence it is important to understand what these rates are and how they affect inflation.

1. Interest rate

• Repo Rate- Repo rate (Repurchase or Repossession) is the rate at which RBI buys government securities with an agreement of repossession, from the commercial banks. It is a short-term borrowing from the central bank, against securities, to inject money to meet the gap between the demand for money (loans) and deposits in the bank.
• Reverse Repo rate- It is the rate at which the RBI borrows money from commercial banks. Banks deposit money in RBI when there is no other profitable option to invest the short-term excess liquidity or when there is uncertainty in the market for a significant period of time.
• Bank Rate- Bank rate is the rate at which the RBI allows finance to the domestic banks. It is generally for a short period of time. Unlike, Repo rate, there are no securities to be kept against the finance. But, in policies designed to control inflation, Bank rates are seldom revised.

2. Reserve Ratios

• Cash Reserve Ratio- Banks are required to keep a fraction of deposit liabilities in the form of liquid cash, CRR, with the RBI to ensure the safety and liquidity of the deposits.
• Statutory Liquidity Ratio- Every bank in India has to maintain a minimum proportion of their net demand and time deposits as liquid assets in the form of cash, gold, precious and semiprecious stones. SLR has nearly remained constant for the last 14 years.

3. Open Market Operations

• The RBI can purchase or sell Government securities from or to the public. To control inflation, the RBI sells the securities in the money market which sucks out excess liquidity from the market. As the amount of liquid cash decreases, demand goes down. This part of monetary policy is called the open market operation.

4. Selective Credit Control

• The Banking Regulation Act empowers the RBI to control the level and pattern of advances given by banks, selectively.
• The RBI has been operating selective credit control to contain inflation of goods that are short in supply or sensitive goods like food grains, vegetables, pulses, oilseeds, cotton, sugar, gur, Khansari, etc which are of mass consumption.

BRIEF BACKGROUND TO UNDERSTAND THE TOPIC

1. Definition of Stagflation – It is a stage of persistently high inflation combined with high unemployment and stagnant demand in a country’s economy.
2. Constituents of WPI and CPI
   1. WPI
      1. The wholesale Price Index (WPI) is an indicator of price changes in the wholesale market.
      2. It constitutes primary articles (22.62), fuel and power(13.15), and manufactured goods (64.23) with their weights being in the brackets.
      3. It is released by the office of the Economic Advisor in the ministry of commerce and Industry.
   2. CPI
      1. Consumer Price Index (CPI) is a price index that represents the average price of a basket of goods over time. CPI calculates the average price paid by the consumer to the shopkeepers.
      2. It is calculated on the basis of 8 groups – Education, communication, transportation, recreation, apparel, foods and beverages, housing, and medical care.
      3. Published by CSO.
   3. Monetary Policy Committee
      1. It is statutorily created by amending the RBI Act 1934.
      2. It consists of six members with three being from RBI and 3 appointed by the government
      3. It seeks to maintain inflation in the range of 4 +/- 2% range i.e. 2 to 6% rate.

THE WAY FORWARD

The current Inflation spike is largely due to seasonal factors and thus will subside in a month or two. However, the major focus should lie in boosting growth so that the country doesn’t enter into a phase of stagflation. The following steps can be taken for boosting growth while controlling inflation.

FOR CONTROLLING INFLATION

Supply-side Reforms: Government needs to take steps to boost supply especially of food articles such as vegetables and pulses by bringing more area under cultivation through reclamation of fallow land and increasing productivity.

Prevention of Hoarding and Nexus: Hoarding and nexus between middlemen lead to an increase in inflation without any external factor and harm the interest of consumers. This needs to be prevented through proper monitoring of inflow and outflow of Mandis and through digitalisation of agricultural markets.

FOR BOOSTING GROWTH

Balancing Growth and Inflation: RBI has already cut the interest rates by 135 basis points but has not been passed on to the customer and market due to no change by the banks. Thus, the RBI cannot cut the interest rate anymore for improving growth but we need to focus on banks for better transmission of rates leading to boosting growth.

Boosting Private Sector Investment: Private sector investment can be improved through simplification of policy procedures and maintaining a sound economic environment. Constant protests and abrupt policy changes are going to stop investments and thus a proper environment is important for boosting private sector investment.

Structural Reforms: Land, Labour, Agriculture, and taxation need structural reforms so as to improve both the business and agriculture environment.

Regulation: Demonetisation, GST, Automobile policy, E-commerce policy, etc. have all been abrupt policies that impacted the market drastically. A business flourishes when provided with predictable environmental conditions and thus abrupt changes should be avoided. Instead of creating policy on a day-to-day basis, the government should provide the major regulations along with the budget at the start of the fiscal year and should only do minuscule adjustments around the year.

THE CONCLUSION: Indian Economy is suffering from huge challenges of suppressed growth, investment, production while inflation is increasing along with large unemployment figures. In short, all that can go wrong has been going wrong, and thus, there is a need for a predictable growth model for the Indian economy which the government has failed to provide. It is time, that instead of modifying older policies, the government needs to provide a clear model for boosting growth in all primary, secondary and tertiary sectors. Structural reforms need to be undertaken in the land, labour, and capital. Companies need to be provided with predictable regulatory regimes. The market needs to be given time to adjust to policy changes. Judiciary and the legal system need to be sensitized so as to handle economic cases so that the verdict doesn’t threaten the investors. Lastly, agriculture has the biggest multiplier effect on growth and thus agriculture needs to be boosted with long-term policies and not limited to superficial changes in MSP and loan waivers.