Daily Current Affairs 23 July 2020 | UPSC Current Affairs 2020

Current Affairs Of Today Are

1) Direct Monetisation

• AMID A spike in the country’s debt levels and falling revenues, an SBI report has recommended direct monetization as a plausible way of fundingtheCentre’sdeficitatlower rates without increasing inflation and affecting debt sustainability.
• Under monetization, the government can raise funds directly from the RBI via issuance of “COVID perpetual bonds” or such instrument
• India’sdebttoGDPratiohasrisen substantially over the years, and contraction in growth this year could raise questions over debt sustainability. TheGDPcollapseis pushing up the debt to GDP ratio by at least 4 percent, implying that “growth rather than continued fiscal conservatism is the only mantra” to get back on track,
• The Finance Ministry has, so far, not taken any view on the monetization of the deficit, though it has said itis open to considering all options.TheFiscalResponsibilityand Budget Management(FRBM)Act “clearly mentions that direct monetization of deficit can be used by the government in certain exceptional circumstances. The current COVIDpandemicisonesuch,” SBI said. Monetizations imply means that the RBI directly funds the central government’s deficit.
• The report argued bringing growth back is more important to debt sustainability, compared to fears of rating downgrades resulting just from higher deficit levels
• Direct monetization means Govt. will take/borrow money (by issuing bonds to RBI) from RBI (so RBI may print extra money and give to govt) at any rate mutually decided by them.  The tenure can also be decided by them OR it can be perpetual which means, govt will have to pay interest forever and it will not repay the principal. Our FRBM Act allows that in case of exceptional circumstances.
• This will increase fiscal deficit, Govt. Debt and Inflation BUT to what extent that depends on the amount of monetization. Right now the demand in the economy is less, so we can say that inflation may not increase much, but there will be some inflation. (The various newspapers quoting that inflation has crossed 6% is not because of high demand but because of supply disruptions).
• As all the macroeconomic parameters (like fiscal deficit, Debt....) are expressed in terms of GDP, so if GDP decreases or GDP growth slowdown, even smaller (absolute Debt) will look high in terms of percentage of GDP. And actually, the percentage is the proper way to judge. Because of Rs. 5 crore loan for me is not sustainable but for Mr. Mukesh Ambani its nothing because his income is huge. So, percentage matters, and if our growth declines then our Debt/Fiscal Deficit can become unsustainable. That is why the article is saying "Growth rather than continued fiscal conservatism is the only mantra"

When govt. should go for direct monetization?

• Answer: When the banks don't have sufficient liquidity i.e. there is a shortage of liquidity in the economy then if govt will try to borrow from banks it will further deteriorate the liquidity situation and will result in an increase in interest rate which will hamper the investments (for which govt is trying hard presently) in the economy and recovery may be slow. So, in this situation, govt can go for direct monetization. BUT if banks are flush with liquidity, then the first govt should try to borrow from banks.

Source: Indian Express

2) Vriksharopan Abhiyan

• Union Home Minister Shri Amit Shah will launch Vriksharopan Abhiyan in the presence of Union Minister of Coal, Mines and Parliamentary Affairs, Shri Pralhad Joshi in New Delhi
• During the launch event, Union Home Minister will inaugurate and lay the Foundation stone of 6 Eco parks/ Tourism sites. The event will take place through Video Conferencing across more than 130 locations spread in 38 Districts of 10 coal/lignite bearing States.
• Vriksharopan Abhiyan will be organized by Ministry of Coal involving all Coal/Lignite PSUs tomorrow during which large scale plantation would be carried out in mines, colonies, offices and other suitable areas of Coal/Lignite PSUs and seedlings will be distributed in the nearby areas for promoting plantation by the society.
• The eco-parks/tourism sites would provide avenues for recreation, adventure, water sport, bird watching, etc. for the people residing in nearby areas and may also be integrated to form part of the tourism circuit. These sites are being planned to generate revenue for self-sustenance and create employment potential for local people.
• Going Green is the key thrust area of the coal sector involving maximization of green cover through ecological reclamation of mined-out areas and overburden dumps, a plantation in and around mines and avenue plantation at suitable places. The ministry’s Going Green initiative will kick start through active participation of coal/lignite PSUs as well as private miners. This year, three coal/lignite PSUs i.e. Coal India Limited( CIL),  NLC India Limited ( NLCIL) and Singareni Collieries Company Ltd ( SCCL)   have set an ambitious target to cover 1789 Ha of the area in and around the coalfields under bio-reclamation/plantation (1626 Ha), creation of grassland (70 Ha), Hi-tech Cultivation (90 Ha) and Bamboo Plantation (3 Ha).

Source: PIB

3) Kakrapar Atomic Power Plant-3

• The third unit of the Kakrapar Atomic Power Project (KAPP-3) in Gujarat achieved its ‘first criticality’ — a term that signifies the initiation of a controlled but sustained nuclear fission reaction
• This is a landmark event in India’s domestic civilian nuclear program given that KAPP-3 is the country’s first 700 MWe (megawatt electric) unit, and the biggest indigenously developed variant of the Pressurised Heavy Water Reactor (PHWR).
• The PHWRs, which use natural uranium as fuel and heavy water as moderator, is the mainstay of India’s nuclear reactor fleet. Until now, the biggest reactor size of the indigenous design was the 540 MWe PHWR, two of which have been deployed in Tarapur, Maharashtra.
• The operationalization of India’s first 700MWe reactor marks a significant scale-up in technology, both in terms of optimization of its PHWR design — the new 700MWe unit addresses the issue of excess thermal margins — and an improvement in the economies of scale, without significant changes to the design of the 540 MWe reactor. (‘Thermal margin’ refers to the extent to which the operating temperature of the reactor is below its maximum operating temperature.)
• Four units of the 700MWe reactor are currently being built at Kakrapar (KAPP-3 and 4) and Rawatbhata (RAPS-7 and 8). The 700MWe reactors will be the backbone of a new fleet of 12 reactors to which the government accorded administrative approval and financial sanction in 2017, and which are to be set up in fleet mode.

What does achieving criticality mean?

• Reactors are the heart of an atomic power plant, where a controlled nuclear fission reaction takes place that produces heat, which is used to generate steam that then spins a turbine to create electricity. Fission is a process in which the nucleus of an atom splits into two or smaller nuclei, and usually some by-product particles. When the nucleus splits, the kinetic energy of the fission fragments is transferred to other atoms in the fuel as heat energy, which is eventually used to produce steam to drive the turbines. For every fission event, if at least one of the emitted neutrons on average causes another fission, a self-sustaining chain reaction will take place. A nuclear reactor achieves criticality when each fission event releases a sufficient number of neutrons to sustain an ongoing series of reactions.

What are the milestones in the evolution of India’s PHWR technology?

• PHWR technology started in India in the late 1960s with the construction of the first 220 MWe reactor, Rajasthan Atomic Power Station, RAPS-1 with a design similar to that of the Douglas Point reactor in Canada, under the joint Indo-Canadian nuclear co-operation. Canada supplied all the main equipment for this first unit, while India retained responsibility for construction, installation, and commissioning.
• For the second unit (RAPS-2), import content was reduced considerably, and indigenization was undertaken for major equipment. Following the withdrawal of Canadian support in 1974 after Pokhran-1, Indian nuclear engineers completed the construction, and the plant was made operational with a majority of components being made in India.
• From the third PHWR unit (Madras Atomic Power Station, MAPS-1) onward, the evolution and indigenization of the design began. The first two units of PHWR using indigenously developed standardized 220 MWe design were set up at the Narora Atomic Power Station.
• This standardized and optimized design had several new safety systems that had been incorporated in five more twin-unit atomic power stations with a capacity of twin 220 MWe units located at Kakrapar, Kaiga, and Rawatbhata.
• To realize economies of scale, the design of 540 MWe PHWR was subsequently developed, and two such units were built at Tarapur. Further optimizations were carried out when the upgrade to 700 MWe capacity was undertaken, with KAPP-3 the first unit of this kind.

Does the 700MWe unit mark an upgrade in terms of safety features?

• PHWR technology has several inherent safety features. The biggest advantage of the PHWR design is the use of thin-walled pressure tubes instead of the large pressure vessels that are used in pressure vessel type reactors. This results in the distribution of pressure boundaries to a large number of small-diameter pressure tubes, thus lowering the severity of the consequence of an accidental rupture of the pressure boundary.
• Additionally, the 700 MWe PHWR design has enhanced safety through a dedicated ‘Passive Decay Heat Removal System’, which can removing decay heat (released as a result of radioactive decay) from the reactor core without requiring any operator actions. This is on the lines of similar technology adopted for Generation III+ plants to negate the possibility of a Fukushima-type accident that happened in Japan in 2011.
• The 700 MWe PHWR unit, like the one deployed in KAPP, is equipped with a steel-lined containment to reduce any leakages, and a containment spray system to reduce the containment pressure in case of a loss of coolant accident.

Source: Indian Express

4) Unified bond market

• Securities and Exchange Board of India (SEBI) chairman Ajay Tyagi called for the unification of the financial markets, adding that the corporate bond market needed reforms without any further delay
• Unification of financial markets is an idea whose time has come. The market infrastructure for corporate bond and Government ­Sectors markets should be integrated
• The market infrastructure institutions dealing with these two types of securities should follow the same rules and regulations, he said, adding that the economies of scope and scale would also dictate such unification.
• The two main segments under BONDs are Corporate (companies) bonds and Government bonds. And right now there are different rules and regulations regarding its issuance and trading. 
• SEBI chief is saying that it should be integrated into one bond market to achieve efficiency and scale.
• Right now first-time Govt. bonds are issued through RBI but these bonds are then traded on capital markets also. Individuals are allowed to purchase govt bonds in primary and secondary markets.
• Demat Account is required to hold and trade securities (shares and bonds)

Source: The Hindu

5) Global Fund to Fight AIDS, Tuberculosis, and Malaria (GFTAM)

• Deprived of sources of livelihood during the pandemic, sex workers, transpersons, gay and bisexual men, drug users and people living with HIV/AIDS have petitioned the Global Fund for AIDS, TB and Malaria (GFATM) protesting against being ignored by the government and multilateral agencies in coronavirus (COVID-19) related emergency relief efforts.
• The petitioners urge the GFATM to issue guidance to governments to channelize their COVID-19 relief funds to the emergency survival needs of KPs.

About GFTAM:

• Popularly known as the Global Fund, it aims to “attract, leverage and invest additional resources to end the epidemics of HIV/AIDS, tuberculosis and malaria to support attainment of the Sustainable Development Goals established by the United Nations.”
• Founded in 2002, the Global Fund is a partnership between governments, civil society, the private sector, and people affected by the diseases.
• Secretariat is in Geneva, Switzerland.
• The G8 formally endorsed the call for the creation of the Global Fund at its summit in July 2001 in Genoa, Italy

How is it administered?

• The Global Fund was formed as an independent, non-profit foundation under Swiss law and hosted by the World Health Organization in January 2002.
• In January 2009, the organization became an administratively autonomous organization, terminating its administrative services agreement with the World Health Organization.

Role of GFTAM:

• The Global Fund is a financing mechanism rather than an implementing agency.
• Programs are implemented by in-country partners such as ministries of health, while the Global Fund secretariat monitors the programs.
• Implementation is overseen by Country Coordinating Mechanisms, country-level committees consisting of in-country stakeholders that need to include, according to Global Fund requirements, a broad spectrum of representatives from government, NGOs, faith-based organizations, the private sector, and people living with the diseases.

Fundraising:

• Since the Global Fund was created in 2002, public sector contributions have constituted 95 percent of all financing raised; the remaining 5 percent comes from the private sector or other financing initiatives such as Product Red.

Source: The Hindu

6) Counter-cyclical fiscal policy

• The Centre is likely to wait for the development of a COVID­19 vaccine before committing to any further “fiscal push” to revive the economy
• Whether the government was planning any further fiscal measures as part of an economic stimulus, as opposed to monetary and credit­based measures which have so far dominated the Centre’s response to the crisis.
• The government was willing to do whatever was necessary to drive consumption but added that at a time of uncertainty, people were unwilling to spend. 
• cite of higher balance data from Jan Dhan accounts to argue that people were more inclined to save than spend during the pandemic, thus flattening demand.
• Once we have the vaccine, then the uncertainty that people have will go down significantly. If the vaccine comes through in the next few months, then the time will be right for a fiscal push as it will generate demand for even discretionary spending. The timing is important so that the bang for the buck is maximized
• Discretionary Spending means its not necessary spending. Your necessary spending covers spending on food, health, housing/rentals, etc but not going out for vacation or movies. For a poor person having basic food items can be a necessity but non-vegetarian meals can be discretionary expenditures.   Necessary and discretionary expenditures may also vary in between class of people.
• The Chief Economic Advisor is saying that during this time of uncertainty regarding the corona crisis, people are not willing to spend and their discretionary spending has declined. And this can be seen with a high amount of money in Jan Dhan Accounts. And he is saying that if at this point in time govt goes for a fiscal push then people will be willing to save and it may not increase the demand in the economy. BUT if the vaccine comes then the uncertainty regarding the crisis will go away and people will be willing to spend even for discretionary expenditure which will drive the demand. U SHOULD UNDERSTAND THAT THIS STORY OF GDP GROWTH  AND CONSUMERISM IS MAINLY DrIVEN BY DISCRETIONARY EXPENDITURE
• Counter-Cyclical Fiscal Policy: Right now the present CYCLE of the economy is in the down phase, which means the economy is in recession. And if govt wants to COUNTER it then it will have to increase spending and reduce tax. So, countercyclical fiscal policy means in times of recession/slowdown govt counters it by increasing govt spending and reducing tax.

Source: The Hindu

7) State of Food Security and Nutrition in the World

• According to a study titled State of Food Security and Nutrition in the World, hunger and malnutrition are increasing around the world. In this scenario, achieving the Sustainable Development Goal (2) of ‘Zero Hunger’ by 2030 will be very difficult.

About

• The State of Food Security and Nutrition in the World is the most authoritative global study tracking progress towards ending hunger and malnutrition.
• It is produced jointly by the Food and Agriculture Organization (FAO) of the United Nations, the International Fund for Agriculture (IFAD), the United Nations Children’s Fund (UNICEF), the UN World Food Programme (WFP) and the World Health Organization (WHO).

Increasing Hunger:

• Steep Rise: The study estimates that almost 690 million people went hungry in 2019 – up by 10 million from 2018, and by nearly 60 million in five years (2014-2019).
• Hunger is an uncomfortable or painful physical sensation caused by insufficient consumption of dietary energy.
• For decades, FAO has used the prevalence of undernourishment indicator to estimate the extent of hunger in the world, thus “hunger” may also be referred to as undernourishment.
• Chronic Hunger: There has been no change in the hunger trend since 2000, After steadily diminishing for decades, chronic hunger slowly began to rise in 2014 and continues to do so.
• Regional Hotspots: Asia remains home to the greatest number of hunger (381 million). Africa is second (250 million), followed by Latin America and the Caribbean (combined 48 million).
• Rate of Hunger: The rate of undernourishment (hunger) in Africa is double compared to Asia and it is expected that by 2030, Africa will be home to more than half of the world’s chronically hungry.
• Impact of Covid-19: The Covid-19 pandemic could also push over 130 million more people into chronic hunger by the end of 2020.
• Reasons: High costs and low affordability was the main reason behind the hunger.

Increasing Malnutrition:

• Affordability: The study estimates that 3 billion people or more cannot afford a healthy diet.
• In sub-Saharan Africa and southern Asia, this is the case for 57% of the population.
• The key reason behind malnutrition is the high cost of nutritious foods and the low affordability of healthy diets for vast numbers of families.
• According to the study, healthy diet costs far more than USD 1.90/day, which is the international poverty threshold.
• It puts the price of even the least expensive healthy diet at five times the price of filling stomachs with starch only.
• Impact on Children: According to the study, in 2019, nearly a third of children under five (191 million) were stunted (too short) or wasted (too thin). Another 38 million under-fives were overweight.

Suggestions

• Shifting of Diet: A global switch to healthy diets would help check the backslide into hunger while delivering enormous savings.
• Shift to a healthy diet will reduce the health costs associated with unhealthy diets.
• The diet-related social cost of greenhouse gas emissions, estimated at USD 1.7 trillion, could also be cut by up to three-quarters by 2030.
• Transform Food Systems: The transformation of food systems will not only reduce the cost of nutritious foods but also increase the affordability of healthy diets.
• The study calls on governments:
• To mainstream nutrition in their approaches to agriculture.
• Work to cut cost-escalating factors in the production, storage, transport. distribution and marketing of food – including by reducing inefficiencies and food loss and waste.
• Support local small-scale producers to grow and sell more nutritious foods and secure their access to markets.
• Prioritize children’s nutrition as the category in greatest need.
• Foster behavior change through education and communication;
• Embed nutrition in national social protection systems and investment strategies.

Way Forward

• This study is the reminder that such a huge percentage of humanity is still going hungry and should be a wake-up call for the government in particular and society in general. Innovative strategies such as shifting towards Smart Food is the need of the hour, which is highly nutritious and will certainly help to reduce hunger.

Source: WHO

8) Tech Cold War Between U.S.A and China

• Recently, the U.S.A blocked China's access to chip-making tools and designated Chinese telecom giants Huawei, ZTE as national security threats. However, with the 5G rollout approaching, the move will impact several countries including India.
• Recently, the United Kingdom also reversed its earlier decision and blocked Huawei from its 5G network rollout.

U.S.A-China Tech Relation:

• China has traditionally resisted against American big-data companies such as Facebook and Google to operate within its jurisdiction.
• However, both Countries still have significant dealings on the technology side.
• Last year, Apple recorded USD 100 million of daily sales in China, while Huawei Technologies reported record revenues primarily from its exposure in western markets, including the U.S.A.
• The latest steps by U.S.A against Huawei mark the first real prohibitory action by a western government in the nearly two decades.
• This has been done on the ground that China’s equipment is designed to aid snooping.
• There have been apprehensions that American telecoms players are too much dependent on subsidized Chinese technology.

Impact of Ban on Chip Making Tools:

• Huawei could face shortages in its supply of specialist chips for which it relies on the U.S.A.
• Technological cold war could extend beyond the U.S.A and China, and compel other countries, including India, to effectively choose between one of the camps.
• Some of the countries perceive the same threat as that of the U.S.A, and others are wary of trade sanctions by the U.S.A.
• This could have a bearing on the growing competition to dominate next-generation technologies such as 5G networks and artificial intelligence.
• Impact the plans of most countries preparing to transition to a 5G regime, including India.

India’s Position:

• In 2009, the Department of Telecommunications (DoT) had advised Indian mobile companies to suspend deals with Chinese equipment makers after fears that Chinese equipment was being used for hacking and spying.
• However, India did not take strong actions on any of the DoT’s recommendations. Indeed, much of India’s telecom growth story has been supported by Chinese companies in both hardware and software.
• The approach changed after the standoff in Ladakh, wherein India has asked state-owned telecom service providers to exclude Chinese companies from the scope of their network upgrade contracts.
• India also justified the ban on 59 mobile apps with Chinese links on grounds of a threat to national security.
• This was part of the wider decision to signal curbs on Chinese investments and tech companies in the country.
• The border clashes and the U.S.A action could now force India into the anti-China camp.

Conclusion

• With the Chinese being increasingly blocked by governments in 5G networks, other global players could be at a competitive advantage.
• The other leaders in the telecoms network equipment market are the European players such as Ericsson and Nokia, and South Korea’s Samsung.
• India’s Reliance Jio has also designed and developed a complete 5G solution from scratch.
• This could also have a bearing on the global 5G rollout, especially in the countries outside of North America and Europe.

Source: Indian Express

9) Indian Military Equipment of Russian Origin

According to a paper published by Stimson Center, 86% of the equipment, weapons and platforms currently in military service in India are of Russian origin.

About

The Stimson Center is a nonprofit think tank based in Washington, USA. It aims to enhance international peace and security through a combination of analysis and outreach.

Data Analysis:

• Stimson Center data shows that more than 55% of Indian defense imports since 2014 have been from Russia.
• For the Navy, more than 41% of equipment is of Russian origin while two-thirds for the Indian Air Force (IAF).
• The figure for the Army is 90%, as it assigns around 10,000 pieces of military hardware from Russia.
• Stockholm International Peace Research Institute (SIPRI) data shows that Russia continues to occupy the First position as India’s defense supplier, with 9.3 billion USD worth of exports to India.
• The USA is a second, with defense supplies worth 2.3 billion USD to India in the same period.

Russia's Military Equipment:

• The Navy's only active aircraft carrier INS Vikramaditya and it's only nuclear attack submarine in service, Chakra II, are from Russia.
• So are the Army’s T-90 and T-72 main battle tanks and IAF’s Su30 MKI fighter.
• The country’s only nuclear-capable supersonic cruise missile, BrahMos, is produced by a joint venture with Russia.
• As India has been spreading its supplier base with Israel, the USA, and France, Russia still remains a major supplier. This is indicated by following latest developments:
• India has approved proposals to acquire 21 Mig29 and 12 Su30 MKI fighter aircraft from Russia for 2.4 billion USD.
• India and Russia had agreed to a joint program to develop a variant of the Fifth Generation Fighter Aircraft Programme (FGFA) in 2007.
• India has not committed to the Fifth Generation Fighter Aircraft Programme (FGFA) program with Russia.
• It is negotiating on the price of AK103 rifles for Make in India.

USA’s Military Equipment: 

• Apache and Chinook helicopters, M777 howitzer guns for the Army.
• Boeing C-17 and C-130J for IAF and P8I submarine hunter aircraft for Navy.

Reasons: 

• There are many reasons for India's dependency on Russia for the supply of military types of equipment:
• Legacy Issue: India and Russia have a longstanding defense relationship and there is familiarity with each other’s processes and systems.
• Specialized Equipment: The kind of specialized equipment that Russia provides to India makes a difference from other countries, e.g. the S-400 Air Defence Missile Systems, nuclear submarines, and aircraft carriers.
• Combat Capability: Each of the systems supplied by Russia has its advantages and uses as they have been used effectively to develop maximum combat capability especially when focusing on India’s higher-end strike platforms.

Significance:

• Border Clash with China: Notwithstanding India’s growing mutual convergence with the USA against China following the recent tensions on the Ladakh border, its armed forces remain heavily dependent on equipment, weapons, and military platforms of Russian origin which form the bulk of its inventory.
• USA’s CAATSA: Recently, the USA has asked all its allies and partners, including India, to stop transactions with Russia. The USA can risk triggering sanctions under Countering America’s Adversaries Through Sanctions Act (CAATSA).

Source: Indian Express

10) MANODARPAN: Mental Health Initiative

• Recently, the Ministry of Human Resources Development (MHRD) has launched the 'Manodarpan' initiative under Atmanirbhar Bharat Abhiyan.
• It is aimed to provide psychosocial support to students, family members, and teachers for their mental health and well-being during the times of Covid-19.

Description: 

• The platform includes a national toll-free helpline for students of schools, universities, and colleges, which will be manned by a pool of experienced counselors, psychologists, and mental health professionals.
• It also has a website, a national database of counselors that will host an interactive online chat platform, advisories, and tips through webinars and other resources.

Significance: 

• It would act as an element of strengthening human capital and increasing productivity for the education sector in the wake of covid-19.
• Covid 19 lockdown had led to forced close down of schools and colleges.
• Therefore, it would help children as well as their parents in facing tense situations and their effects on academics.

Source: PIB