12th Nov, 2018-IAS Current Affairs
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Reserve Bank of India (GS3: Indian Economy)
Issue: The Union government will not yield ground on its right to issue a directive to the Reserve Bank of India (RBI).
What is the directive about?
Government and RBI were in talks to finalize the economic capital framework of the central bank, which would lead to a transfer of surplus reserves with the central bank to the government.
Section 7 (1) of the Reserve Bank of India Act, 1934, says that the Union government can “from time to time give such directions to the (central) bank as it may, after consultation with the governor of the bank, considered necessary in the public interest”. Further, Section 7 (2) gives the government powers to entrust the business of RBI to its central board of directors.
Acharya JB Kripalani and Maulana Abul Kalam Azad (GS1: Indian History)
Issue: The Prime Minister, Shri Narendra Modi, has paid tributes to Acharya JB Kripalani and Maulana Abul Kalam Azad on their birth anniversaries.
About Acharya Kripalani
Jivatram Bhagwandas Kripalani (11 November 1888 – 19 March 1982), popularly known as Acharya Kripalani, was an Indian politician, noted particularly for holding the presidency of the Indian National Congress during the transfer of power in 1947. Kripalani was a Gandhian socialist, environmentalist, mystic and independence activist.
He grew close to Gandhi and at one point, he was one of Gandhi’s most ardent disciples. Kripalani was a familiar figure to generations of dissenters, from the Non-Cooperation Movements of the 1920s to the Emergency of the 1970s.
Nehru supported Kripalani in the election of the Congress President in 1950. Kripalani, supported by Nehru, was defeated by Patel’s candidate Purushottam Das Tandon. Bruised by his defeat, and disillusioned by what he viewed as the abandonment of the Gandhian ideal of a countless village republics, Kripalani left the Congress and became one of the founders of the Kisan Mazdoor Praja Party. This party subsequently merged with the Socialist Party of India to form the Praja Socialist Party.
Kripalani remained in opposition for the rest of his life and was elected to the Lok Sabha in 1952, 1957, 1963 and 1967 as a member of Praja Socialist Party. His wife since 1938, Sucheta Kripalani, remained in Congress and went from strength to strength in the Congress Party, with several Central ministries; she was also the first female Chief Minister, in Uttar Pradesh.
Kripalani moved the first-ever No confidence motion on the floor of the Lok Sabha in August 1963, immediately after the disastrous India-China War.
About Maulana Abul Kalam Azad
He was an Indian scholar and the senior Muslim leader of the Indian National Congress during the Indian independence movement. Following India’s independence, he became the first Minister of Education in the Indian government. He is commonly remembered as Maulana Azad; the word Maulana is an honorific meaning ‘Our Master’, and he had adopted Azad (Free) as his pen name. His contribution to establishing the education foundation in India is recognised by celebrating his birthday as “National Education Day” across India
As a young man, Azad composed poetry in Urdu, as well as treatises on religion and philosophy. He rose to prominence through his work as a journalist, publishing works critical of the British Raj and espousing the causes of Indian nationalism. Azad became the leader of the Khilafat Movement, during which he came into close contact with the Indian leader Mahatma Gandhi. Azad became an enthusiastic supporter of Gandhi’s ideas of non-violent civil disobedience, and worked to organise the non-co-operation movement in protest of the 1919 Rowlatt Acts. Azad committed himself to Gandhi’s ideals, including promoting Swadeshi (indigenous) products and the cause of Swaraj (Self-rule) for India. In 1923, at an age of 35, he became the youngest person to serve as the President of the Indian National Congress.
In October 1920, Maulana Abul Kalam Azad was elected as a member of foundation committee to establish Jamia Millia Islamia at Aligarh in U. P. without taking help from British colonial government. He assisted in shifting the campus of the university from Aligarh to New Delhi in 1934. The main gate (Gate No. 7) to the main campus of the university is named after him.
Azad was one of the main organizers of the Dharasana Satyagraha in 1931, and emerged as one of the most important national leaders of the time, prominently leading the causes of Hindu-Muslim unity as well as espousing secularism and socialism. He served as Congress president from 1940 to 1945, during which the Quit India rebellion was launched. Azad was imprisoned, together with the entire Congress leadership.
Amidst communal turmoil following the partition of India, he worked for religious harmony. As India’s Education Minister, Azad oversaw the establishment of a national education system with free primary education and modern institutions of higher education. He is also credited with the establishment of the Indian Institutes of Technology and the foundation of the University Grants Commission, an important institution to supervise and advance higher education throughout the country.
National Education Day (India) an annual observance in India to commemorate the birth anniversary of Maulana Abul Kalam Azad, the first education minister of independent India, who served from 15 August 1947 until 2 February 1958. National Education Day of India is celebrated on 11 November every year in India. He also worked for Hindu-Muslim unity through the Al-Hilal newspaper
Fed interest rates (GS3: Indian Economy)
Issue: The Federal Open Market Committee (FOMC), the monetary policy committee of the US Federal Reserve, in its latest meeting that ended on 8 November, decided to keep interest rates unchanged. The federal funds rate will continue to be in the range of 2-2.25%.
Reason for low interest rates in USA
In the aftermath of the financial crisis, which started when Lehman Brothers went bust in September 2008, the US Fed launched an easy money policy. This included pushing the federal funds rate towards 0% and printing and pumping money into the financial system to keep overall interest rates low. The idea was that at lower interest rates people would borrow and spend money, businesses would borrow and expand and growth would be back. This happened, but to a limited extent. Since 2015, FOMC has raised interest rates eight times. It is expected to do so three times in 2019.
Is higher interest rate a problem?
The easy money policy of the US Fed was followed by other Western central banks as well. This led to big financial institutions borrowing money in the Western markets at low interest rates and investing it in financial markets (both stock and debt markets) all over the world. With interest rates in the US rising, this arbitrage has started to unravel. As interest rates rise, financial investors will withdraw the money they invested in stock and debt markets around the world. This will lead to falling markets and rising interest rates.
How will higher interest rates hurt India?
In 2018-19, FIIs sold stocks worth ₹55,935 crore and debt securities worth ₹52,823 crore, explaining why the stock market has fallen and interest rates are up. When foreign investors sell they get paid in rupees. They need to convert these rupees into dollars. This pushes up the demand for dollars and the rupee loses value against it. India will continue to face this risk over the next few years.
Health start-up fund (GS2: Issues related to Health)
Issue: Venture capital investment in home-grown health-tech startups in 2018 is at an all-time high with continuing investor interest, data from Tracxn Technologies shows.
What the data shows?
- $510 million has been invested across 80 health-tech startups, led by medicine ordering website PharmEasy, which raised $115 million across three rounds this year. Other significant funding rounds include fitness startup Curefit raising $100 million from IDG Ventures, and online pharmacy Netmeds securing a $35 million round led by Cambodian investor DPC Group.
- Investments in health-tech startups have been rising steadily with 2016 and 2017 recording $163 million and $343 million, respectively, but the number of rounds fell from 135 in 2016 and 130 in 2017 to 80 so far this year.
- Health-tech is broadly defined as use of technologies, such as analytics, internet of things, mobile and wearable devices, among others, to improve delivery of healthcare services.
- According to investors, increased funding in health-tech startups is a factor of sectoral tailwinds such as increased internet penetration, rise in digital payments and big-ticket government initiatives.
- Demonetisation and the subsequent surge in digital payments also helped health-tech startups
- Healthcare schemes, such as Ayushman Bharat, have also put the spotlight on healthcare, leading to positive sentiments even among startups
Pollinators (GS3: Conservation of Environment)
Issue: Across India’s agrarian plains, plantations and orchards, millions of birds, bats and insects toil to pollinate crops. However, many of these thousands of species may be in dangerous decline.
In 2015, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) found that pollinators lead to huge agricultural economic gains
Observations made in the report
- The report estimated pollinator contribution in India to be $0.831-1.5 billion annually for just six vegetable crops. This is an underestimation considering that nearly 70% of tropical crop species are dependent on pollinators for optimal yields.
- The decline of moths, bees, butterflies, hoverflies and other pollinators is undeniably linked to human activity: large tracts of natural habitats have been cleared for monoculture cultivation, while the use of pesticides and fertilisers is pushing out nature’s little helpers.
- In a series of studies at the University of Calcutta, researchers have showed that native Indian bees, when exposed to multiple pesticides, suffer from memory and olfactory impairment, lower response rates, and oxidative stress which damages cells.
- team estimated that between 1964 and 2008, there was a 40-60% growth in relative yields of pollinator-dependent crops, while pollinator-independent crops such as cereals and potatoes saw a corresponding 140% rise in yields
Steps needed to fight this challenge
Apart from promoting organic farming and lowering pesticide usage, landscape management is key. The EU Pollinators’ Initiative adopted in June can provide pointers to India, particularly a policy of direct payment support to farmers to provide buffer strips for pollinators for nectar- and pollen-rich plants. India has millions of hectares of reserve forests, some of which have been converted to pulpwood plantations. Much of this can be restored to become thriving homes for pollinators. The same can be done in gram panchayat levels. Fallow areas and government land can be used to plant flowering species for pollinators.
Armistice day (GS1: World History)
Issue: World leaders gathered under driving rain in Paris on November 11 to lead global commemorations marking 100 years since the end of World War I, at a time of growing nationalism and diplomatic tensions.
Around 70 leaders including the U.S. and Russian Presidents Donald Trump and Vladimir Putin marked the centenary of the 1918 Armistice in the French capital
About 70 current-day nations were involved in WWI, which had six empires and colonial powers at its heart: Austria-Hungary, Britain, France, Germany, Russia and the Ottoman Empire. Around 10 million soldiers are estimated to have been killed during the fighting and more than double that number wounded. Between five and 10 million civilians are estimated to have been killed.
What is Armistice Day?
Armistice Day is commemorated every year on 11 November to mark the armistice signed between the Allies of World War I and Germany at Compiègne, France at 5:45 am, for the cessation of hostilities on the Western Front of World War I
The date is a national holiday in France, and was declared a national holiday in many Allied nations. In some countries Armistice Day coincides with Remembrance Day and Veterans Day, and other public holidays. Armistice Day is not celebrated in Germany, but a German national day of mourning, Volkstrauertag, has been observed on the Sunday closest to 16 November since 1952.
Quad (GS3: Security)
Issue: Officials from Australia, India, Japan and the United States will hold the third “Quadrilateral” or Quad meeting in Singapore on November 14th
The meet, that comes exactly a year after the format was revived, will be held on the sidelines of the East Asia Summit, that Prime Minister Narendra Modi will attend, and is expected to focus on infrastructure projects, maritime security cooperation and discuss regional challenges including development.
Project undertaken by these countries so far
- India and Japan have recently announced a series of joint projects along what they have called the “Asia-Africa growth corridor” in the Indo-Pacific region. Among the projects that they will work together on are the Jamuna Railway bridge in Bangladesh and other bridges in North Eastern states; housing, school and electricity projects in Rohingya areas in Myanmar, an LNG plant in Sri Lanka and a cancer hospital in Kenya.
- Similiarly, Australian PM Morrison unveiled a massive $2 billion ‘Australian Infrastructure Financing Facility for the Pacific’ (AIFFP) this week which he will fund projects in neighbouring countries like Fiji, Solomon Islands and Vanuatu, and also announced plans for closer defence and maritime security cooperation under a “Boe Pacific Security Declaration” that will include a naval base in Papua New Guinea (PNG).
What is Quad?
The Quadrilateral Security Dialogue (QSD, also known as the Quad) is an informal strategic dialogue between the United States, Japan, Australia and India that is maintained by talks between member countries. The dialogue was initiated in 2007 by Prime Minister Shinzo Abe of Japan, with the support of Vice President Dick Cheney of the US, Prime Minister John Howard of Australia and Prime Minister Manmohan Singh of India. The dialogue was paralleled by joint military exercises of an unprecedented scale, titled Exercise Malabar. The diplomatic and military arrangement was widely viewed as a response to increased Chinese economic and military power, and the Chinese government responded to the Quadrilateral dialogue by issuing formal diplomatic protests to its members.
During the 2017 ASEAN Summits all four former members rejoined in negotiations to revive the quadrilateral alliance. With Prime Minister Malcolm Turnbull of Australia, Prime Minister Shinzo Abe of Japan, Prime Minister Narendra Modi of India, and President Donald Trump of the United States agreeing in Manila to revive the security pact among tensions in the South China Sea caused primarily by China and its territorial ambitions.
The QSD is maintained by continuing security discussions among members, and may be formally resumed if Australia were to commit its naval forces to joint military exercises by other members.