Daily Current Affairs 8 October 2020 | UPSC Current Affairs 2020

Current Affairs Of Today Are

1) India-Japan Foreign Ministers’ Strategic Dialogue

India and Japan recently held the 13th India-Japan Foreign Ministers’ Strategic Dialogue in which inter-alia both countries agreed to sign a Memorandum of Cooperation (MoC) in the field of cybersecurity that will promote cooperation in key areas such as 5G network, Critical Information Infrastructure, Internet of Things (IoT) and Artificial Intelligence.

Cyber Security MoC

It will enhance cooperation in areas of mutual interest, which include capacity building in the area of cyberspace, protection of critical infrastructure, sharing information on cybersecurity, developing joint mechanisms for practical cooperation to mitigate cyber threats, etc.
Significance: It will attract stakeholders in the Indian 5G sector as it gets ready to open up for international operators.
This becomes even more important since it is possible that the Chinese companies are not allowed to participate in the 5G arena in India due to recent Indo-China tensions, increasing cybersecurity threat due to Chinese cyber-attacks and hybrid data warfare by China.
Japan is upgrading its cybersecurity as it has been repeatedly hit by cyberattacks this year.
Also, the Covid-19 pandemic has made countries, companies, and institutions dependent on digital technology more than ever before.

Challenges posed by the Covid-19 pandemic were discussed.

The dialogue emphasized a strong partnership between the two countries in overcoming challenges posed by the Covid-19 pandemic.
With Covid-19 and trade tensions between China and the United States are threatening supply chains, Japan has mooted the Supply Chain Resilience Initiative (SCRI) as a trilateral approach to trade, with India and Australia as the key-partners.

The importance of the Indo-pacific region

Japan and India both have similarities in their respective Indo-Pacific visions, that are based on rule of law and respect for sovereignty and territorial integrity.
Both Japan and India need to counter the increasing Chinese aggression in the region.
India launched the Indo-Pacific Oceans Initiative (IPOI) at the East Asia Summit in November 2019.
It focuses on seven central pillars conceived around Maritime Security, Maritime Ecology, Maritime Resources, Capacity Building, and Resource Sharing, Disaster Risk Reduction and Management, Science, Technology and Academic Cooperation, and Trade Connectivity and Maritime Transport.

Abduction of Japanese nationals by North Korea

The issue of abduction of Japanese nationals by North Korea was also raised on which India promised to extend support for closure.
Abductions of Japanese citizens from Japan by agents of the North Korean government took place from 1977 to 1983. Although only 17 Japanese are officially recognized by the Japanese government as having been abducted, there may have been hundreds of victims.

Other Recent Developments Between India and Japan

Recently, India and Japan signed a logistics agreement that will allow armed forces of both sides to coordinate closely in services and supplies. The agreement is known as the Acquisition and Cross-Servicing Agreement (ACSA).
In 2019, India and Japan held the first-ever ministerial-level 2+2 dialogue. This dialogue involves the Defence and Foreign Ministers on both sides and is seen as an endorsement of the special strategic partnership between India and Japan.
Both countries are also part of the Quadrilateral Security Dialogue (QUAD).
Recently, it has been reported that the second Ministerial meeting of Quad countries will be held in Japan.
An “India-Japan Digital Partnership” (I-JDP) was launched during the visit of the Prime Minister of India to Japan in October 2018, furthering existing areas of cooperation as well as new initiatives within the scope of cooperation in S&T/ICT, focusing more on “Digital ICT Technologies”.
In 2014, India and Japan upgraded their relationship to 'Special Strategic and Global Partnership'.
The India-Japan Comprehensive Economic Partnership Agreement (CEPA) that came into force in August 2011 covers trade in goods, services, movement of natural persons, investments, Intellectual Property Rights, custom procedures, and other trade-related issues.
India and Japan defense forces organize a series of bilateral exercises namely, JIMEX, SHINYUU Maitri, and Dharma Guardian. Both countries also participate in a Malabar exercise with the USA.

Source: The Hindu

2) Ratification of 7 Persistent Organic Pollutants

The Union Cabinet has approved the ratification of seven chemicals listed under the Stockholm Convention on Persistent Organic Pollutants (POPs).
The Cabinet further delegated its powers to ratify chemicals under the Stockholm Convention to Union Ministries of External Affairs (MEA) and Environment, Forest and Climate Change (MEFCC) in respect of POPs for streamlining the procedure.

Persistent Organic Pollutants

POPs are identified chemical substances that are characterized by:
Persistence in the environment.
Bio-accumulation in the fatty acids in living organisms.
Less soluble in water.
Adverse effect on human health/ environment.
Exposure to POPs can lead to cancer, damage to central & peripheral nervous systems, diseases of the immune system, reproductive disorders, and interference with normal infant and child development.
The property of long-range environmental transport (LRET) makes them spread widely in the atmosphere.

The Stockholm Convention:

It is a global treaty to protect human health and the environment from POPs.
It was opened for signature in 2001 in Stockholm (Sweden) and became effective in 2004.
POPs are listed in various Annexes to the Stockholm Convention after thorough scientific research, deliberations, and negotiations among member countries.
Objectives:

Support the transition to safer alternatives.
Target additional POPs for action.
Cleanup old stockpiles and equipment containing POPs.
Work together for a POPs-free future.

India ratified the Stockholm Convention in 2006 as per Article 25(4), which enabled it to keep itself in a default "opt-out" position such that amendments in various Annexes of the convention cannot be enforced on it unless an instrument of ratification/ acceptance/ approval or accession is explicitly deposited with UN depositary.
The convention calls to ban nine of the dirty dozen chemicals (key POPs), limit the use of DDT to malaria control, and curtail inadvertent production of dioxins and furans. The convention listed twelve distinct chemicals in three categories:

Eight pesticides (aldrin, chlordane, DDT, dieldrin, endrin, heptachlor, mirex, and toxaphene)
Two industrial chemicals (polychlorinated biphenyls and hexachlorobenzene)
Two unintended by-products of many industrial processes involving chlorine such as waste incineration, chemical, and pesticide manufacturing, and pulp and paper bleaching (polychlorinated dibenzo-p-dioxins and dibenzofurans, commonly referred to as dioxins and furans).

Regulation of Persistent Organic Pollutants Rules:

The Union Cabinet has approved the ratification of seven chemicals listed under the Stockholm Convention. These chemicals are regulated under the following domestic provision for POPs:
Considering its commitment towards providing a safe environment and addressing human health risks, the Ministry of Environment, Forest and Climate Change (MoEFCC) had notified the 'Regulation of Persistent Organic Pollutants Rules, in 2018 under the provisions of the Environment (Protection) Act, 1986.
The regulation inter alia prohibits the manufacture, trade, use, import, and export of seven chemicals, namely:

Chlordecone,
Hexabromobiphenyl,
Hexabromodiphenyl ether and Hepta Bromodiphenyl Ether (Commercial octa-BDE),
Tetrabromodiphenyl ether and Pentabromodiphenyl ether (Commercial Penta-BDE),
Pentachlorobenzene,
Hexabromocyclododecane, and
Hexachlorobutadiene.

Global Environment Facility

GEF was established with the Rio Earth Summit of 1992.
Headquarter: Washington, D.C., USA.
The GEF is jointly managed by the United Nations Development Programme (UNDP), the World Bank, and the United Nations Environment Programme (UNEP).
The financial mechanism was established to help tackle our planet’s most pressing environmental problems.
It provides funds to the developing countries and transition economies for projects related to climate change, biodiversity, the ozone layer, etc.
It is a financial mechanism for 5 major international environmental conventions:

The United Nations Framework Convention on Climate Change (UNFCCC),
The United Nations Convention on Biological Diversity (UNCBD),
The Stockholm Convention on Persistent Organic Pollutants (POPs),
The United Nations Convention to Combat Desertification (UNCCD), and
The Minamata Convention on Mercury.

Source: PIB

3) Supreme Court on Right to Protest

Recently, the Supreme Court (SC) has upheld the right to peaceful protest against the law but also cleared that public ways and public spaces cannot be occupied and that too indefinitely.

Background:

The ruling came after a petition was filed in the SC highlighting problems caused by the protests which led to the roadblock and traffic problems.
Sit-in protests against the Citizenship (Amendment) Act (CAA), 2019 were organized in the Shaheen Bagh area of the capital from December 2019 to March 2020.
The petition highlighted that the Delhi High Court (HC) should have intervened positively and not left the situation fluid and the administration too should have talked to the protesters.
Earlier, the petition was filed in Delhi HC, which heard and disposed of the plea the same day without any specific direction.
Despite a lapse of a considerable period, there was neither any negotiations nor any action by the administration.

Issues with the Protest and its Location:

Protesters did not fully realize the ramifications of the Covid-19 pandemic and continued large gatherings in a small place and there was also a general unwillingness to relocate to another site.
The protest seemed typical of the many digitally-fuelled “leaderless” dissent seen in modern times.
The presence of various groups of protesters had resulted in many influencers, acting possibly at cross-purposes with each other.

Rulings:

On Assembly:

The court cannot accept the plea of the applicants (who sought to intervene in the matter in defense of the protesters) that an indeterminable number of people can assemble whenever they choose to protest.

On Role of Administration:

Such kind of occupation of public ways, whether at the site in question or anywhere else for protests, is not acceptable and the administration should take action to keep the areas clear of encroachments or obstructions.
It highlighted that the State or UT administrations have the entire responsibility to prevent encroachments in public spaces and should not wait for courts to pass suitable orders.

Reference:

SC referred to its 2018 judgment in the Mazdoor Kisan Shakti Sangathan vs Union of India and Another case, which dealt with demonstrations at Delhi’s Jantar Mantar.
The judgment tried to balance the interests of local residents with those of protesters to hold demonstrations and directed the police to devise a proper mechanism for limited use of the area for peaceful protests and demonstrations and to lay down parameters for this.

On technology Involvement:

The verdict also dwelt on the merits and demerits of technology impacting social movements.
The ability to scale up quickly, using digital infrastructure, has empowered movements to embrace their often-leaderless aspirations and evade usual restrictions of censorship.
However, social media channels pose the danger of creating highly polarised environments, which often see parallel conversations running with no constructive outcome evident.

SC’s Observations on Dissent:

SC appreciated the existence of the right to peaceful protest against the legislation and held that “democracy and dissent go hand in hand, but then the demonstrations expressing dissent have to be in designated places alone”.
The seeds of protest and dissent were sown deep during the Freedom struggle but dissent against the colonial rule cannot be equated with dissent in a self-ruled democracy.
The Constitution guarantees the right to protest and express dissent, but with an obligation towards certain duties.
Article 19 confers upon citizens the right to freedom of speech and expression under Article 19(1)(a) and the right to assemble peacefully without arms under Article 19(1)(b).
These rights, in cohesion, enable every citizen to assemble peacefully and protest against action or inaction of the State.
In a democracy, the rights of free speech and peaceful protest are “treasured” and must be encouraged and respected.
However, these rights are also subject to reasonable restrictions mentioned under Article 19(2), imposed in the interest of the sovereignty, integrity, and public order with the help of police regulations.
Fundamental rights do not live in isolation. The right of the protester has to be balanced with the right of the commuter and has to co-exist in mutual respect.

Source: The Hindu

4) Poverty and Shared Prosperity Report: World Bank

The World Bank in its biennial Poverty and Shared Prosperity Report mentions that Covid-19 can add around 27-40 million new poor in Sub-Saharan Africa and around 49-57 million in the South Asia region.
The “new poor” will:

Be more urban poor.
Be more engaged in informal services and manufacturing and less in agriculture.
Live in congested urban settings and work in the sectors most affected by lockdowns and mobility restrictions.

Extreme Poverty Projection

The COVID-19 pandemic is estimated to push an additional 88 million to 115 million people into extreme poverty this year, with the total rising to as many as 150 million by 2021, depending on the severity of the economic contraction.
Percentage of Population: The pandemic and global recession may cause over 1.4% of the world’s population to fall into extreme poverty.
Extreme poverty: It is defined as living on less than $1.90 a day. The World Bank measures poverty lines of $3.20 and $5.50, and also a multidimensional spectrum that includes access to education and basic infrastructure.
Increase in Rate of Poverty: Global extreme poverty rate is projected to rise by around 1.3% to 9.2% in 2020. If the pandemic would not have been there, the poverty rate was expected to drop to 7.9% in 2020.

Regions of Incidence:

Many of the newly poor individuals will be from countries that already have high poverty rates (Sub-Saharan Africa and South Asia).
Around 82% of the total poor will be in middle-income countries (MICs).
Flood Prone Areas: About 132 million of the global poor live in high flood risk regions. The focus on flooding in this report primarily reflects the fact that floods are one of the most common and severe hazards, especially in lower-income countries.

The reverse of Progress Made:

Current increasing poverty is a reversal of the achievements made in two-and-a-half decades (1990-2015).
The extreme poverty rate declined by 26%. It dropped to 10% from nearly 36%.
During 2012-2017, the growth was inclusive and the incomes of the poorest 40% of the population grew.
The average global shared prosperity was 2.3% during the period.

Diminished Shared Prosperity:

Average global shared prosperity is estimated to stagnate or even contract over 2019-2021 due to the reduced growth in average incomes.
Shared prosperity is defined as the growth in the income of the poorest 40% of a country’s population.

Reason:

Global extreme poverty is expected to rise for the first time in 20 years because of the disruption caused by Covid-19.
It is exacerbating the impact of conflict and climate change, which were already slowing down poverty reduction.

Proposed Strategy

The World Bank recommends for a complementary two-track approach which involves short as well as long term strategy:

Short-run:

Without policy actions, the Covid-19 crisis may lead to an increase in income inequality, resulting in a less inclusive world.
Countries need to prepare for a different economy post-Covid, by allowing capital, labor, skills, and innovation to move into new businesses and sectors.

Long-run:

Continuing to focus on foundational development problems, including conflict and climate change as the key areas.

Poverty in India

Poverty estimation in India is carried out by NITI Aayog’s task force through the calculation of the poverty line based on the data captured by the National Sample Survey Office under the Ministry of Statistics and Programme Implementation (MOSPI).
Poverty line estimation in India is based on the consumption expenditure and not on the income levels.
Global Multidimensional Poverty Index 2020:

India lifted as many as 270 million people out of multidimensional poverty between 2005-06 and 2015-16.
Impact of Covid-19: Covid-19 is having a profound impact on the development landscape.
The study finds that on average, poverty levels will be set back 3 to 10 years due to Covid-19.
Sustainable Development Goals: The index emphasizes on measuring and monitoring progress under the goals to reach ‘zero poverty by 2030-Goal 1’ of the SDGs.

Recent Measures Taken:

The government enhanced its social safety programs including direct benefit transfers such as cash transfers under the PM Kisan scheme, more liberal financing under the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 like advance disbursement, direct cash grants to construction workers, and release of free and subsidized food grains under Pradhan Mantri Garib Kalyan Yojana to about 800 million people to ensure food for all.
The Government announced a special economic package of Rs 20 lakh crore (equivalent to 10% of India’s GDP) under Atma Nirbhar Bharat Scheme to make the country independent against the tough competition in the global supply chain and to help in empowering the poor, laborers, migrants who have been adversely affected by Covid.

Source: World Bank

5) Reforms in Exploration and Licensing Policy: Oil & Gas

The Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister has approved the Policy framework on reforms in the exploration and licensing sector for enhancing domestic exploration and production of oil and gas.

Objectives:

Attract new investment in Exploration and Production (E&P) Sector.
Intensification of exploration activities in unexplored areas.
Liberalizing the policy in producing basins.

Four Focus Areas:

Increasing Exploration Activities in Unexpected Areas:

Bidding out uncommercialized basins to contractors without them having to share revenue or production with the Government and only paying royalties/levies.
For unallocated/unexplored areas, the bidding to be based on a revenue-sharing basis but more weightage to work program to be given.
Shorter exploration period and fiscal incentives.

Marketing and Pricing Freedom:

To incentivize enhanced gas production, marketing, and pricing freedom to be granted for those new gas discoveries whose Field Development Plan (FDP) is yet to be approved.
FDP is the evaluation document of multiple development options for a field and selecting the best option based on assessing tradeoffs.
Fiscal incentive on additional gas production from domestic fields over and above normal production.

Preparation of Enhanced Production Profile:

Public sector Undertakings like Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) will prepare an enhanced production profile to enhance production from their existing fields.
For production enhancement, bringing new technology, and capital, No Objection Certificates (NOCs) will be allowed to induct private sector partners.

Promoting Ease of Doing Business:

Measures like setting up coordination mechanism and simplification of approval, alternate dispute resolution mechanism, etc. to be taken.

Background:

Domestic production of oil and gas was declining, import dependence was rising and investment in E&P activities was reducing. Thus, policy reform in this sector was needed.
Earlier, the government between 2016 and 2019 had given pricing freedom for all fields except those given to state-owned ONGC and OIL on a nomination basis.
But, there were restrictions on marketing like a ban on affiliates of producers buying the fuel, etc. This restricted competition kept prices artificially low.
The Hydrocarbon Exploration and Licensing Policy or HELP was approved in March 2016, aimed at increasing the transparency and decreasing the administrative discretion in granting hydrocarbon licenses. It replaced the New Exploration Licensing Policy (NELP), 1997.
Recently, India also launched its first gas exchange which has been named the Indian Gas Exchange (IGX).

Benefits:

Development of support services.
Employment generation.
Transfer of advanced technology.
Reducing import dependence.
Improve the energy security of the country.
Save the precious foreign exchange on imports.

Petroleum

Crude petroleum occurs in sedimentary rocks of the tertiary period.
It consists of hydrocarbons of liquid and gaseous states varying in chemical composition, color, and specific gravity.
It is an essential source of energy for all internal combustion engines in automobiles, railways, and aircraft.
Its numerous by-products are processed in petrochemical industries such as fertilizer, synthetic rubber, synthetic fiber, medicines, vaseline, lubricants, wax, soap, and cosmetics.
Venezuela, Saudi Arabia, Canada, Iran, Iraq, Kuwait, Russia are some major countries with the largest oil reserves.
Digboi, Naharkatiya, and Moran in Assam, Ankleshwar, Kalol, Mehsana, Navagam, Kosamba, and Lunej in Gujarat; Mumbai High in Maharashtra are important oil-producing areas in India.

Natural Gas

Natural gas is found with petroleum deposits and is released when crude oil is brought to the surface. It can be used as a domestic and industrial fuel.
Russia, Norway, the UK, and the Netherlands are the major producers of natural gas.
In India, Jaisalmer, Krishna Godavari delta, Tripura and some areas offshore in Mumbai have natural gas resources.
The Gas Authority of India Limited was set up in 1984 as a public sector undertaking to transport and market natural gas.

Oil and Natural Gas Corporation

Oil and Natural Gas Corporation (ONGC) is a Maharatna Public Sector Undertaking (PSU) of the Government of India.
It was set up in 1995 and is under the Ministry of Petroleum and Natural Gas.
It is the largest crude oil and natural gas company in India, contributing around 70% to Indian domestic production.

Source: PIB

6) Nobel Prize for Chemistry 2020

Recently, Emmanuelle Charpentier of France and Jennifer A Doudna of the USA have been awarded the 2020 Nobel Prize in Chemistry for developing CRISPR/Cas9 genetic scissors, one of gene technology’s sharpest tools.
It is for the first time a Nobel science prize has gone to a women-only team.
Nobel Prize for Medicine/Physiology, 2020: To Harvey J Alter and Charles M Rice from the USA and Michael Houghton from the UK for the discovery of the Hepatitis C Virus.
Nobel Prize in Physics 2020: To three astrophysicists Roger Penrose from the UK, Reinhard Genzel from Germany, and Andrea Ghez from the USA for discoveries related to black holes.
The CRISPR/Cas9 genetic scissors can be used to change the deoxyribonucleic acid (DNA) of animals, plants, and microorganisms with extremely high precision.
The CRISPR/Cas9 tool has already contributed to significant gains in crop resilience, altering their genetic code to better withstand drought and pests.
This technology has had a revolutionary impact on the life sciences and contributes to new cancer therapies. It has the potential of curing inherited diseases.

Discovery:

Charpentier, while studying the Streptococcus pyogenes, a harmful bacterium, discovered a previously unknown molecule, tracrRNA.
TracrRNA was part of bacteria’s ancient immune system, CRISPR/Cas, that disarmed viruses by cleaving (cutting) their DNA.
TracrRNA is programmed to locate the particular problematic sequence on the DNA strand, and a special protein called Cas9 (also known as genetic scissor) is used to break and remove the problematic sequence.
Both scientists collaborated and succeeded in recreating the bacteria’s genetic scissors in a test tube and simplifying the scissors’ molecular components making it easier to use.
In their natural form, the scissors recognize DNA from viruses but the duo reprogrammed them so that they could be controlled and can cut any DNA molecule at a predetermined site.

CRISPR Technology

The CRISPR (short for Clustered Regularly Interspaced Short Palindromic Repeats) technology for gene-editing was first developed in 2012.
It makes gene sequencing very easy, simple, and extremely efficient providing nearly endless possibilities.
Editing, or modifying, gene sequences is not new and has been happening for several decades now, particularly in the field of agriculture, where several crops have been genetically modified to provide particular traits.
The technology replicates a natural defense mechanism in Streptococcus pyogenes that use a similar method to protect itself from virus attacks.
A DNA strand, when broken, has a natural tendency to repair itself but the auto-repair mechanism can lead to the re-growth of a problematic sequence.
Scientists intervene during this auto-repair process by supplying the desired sequence of genetic codes, which replaces the original sequence.

Concerns:

Ethical Concerns: Ease of altering DNA will allow more people to choose the characteristics of their progeny and this will hamper the natural process.
In November 2018, a Chinese researcher claimed to have altered the genes of a human embryo that eventually resulted in the birth of twin baby girls. It was the first documented case of a ‘designer babies’ being produced using gene-editing tools like CRISPR.
It was probably done without any regulatory permission or oversight which makes it even worse.
Not Fully Accurate: Few scientists have pointed out that CRISPR technology is not 100% accurate, and it is possible that some other genes could also get altered by mistake.
Lack of Rules and Guidelines: Doudna has been campaigning for the development of international rules and guidelines for the use of CRISPR technology and has also advocated a general pause on these kinds of applications till such time.

Source: Indian Express

7) What constitutes a breach of the legislature’s privilege?

In an affidavit, filed in pursuant to a plea by Facebook India VP and MD Ajit Mohan and Facebook in the Supreme Court against the summons, the Delhi Assembly said that Mohan has not been issued any summons for breach of privilege.
Delhi assembly said he was only summoned by its Peace and Harmony committee to appear as a witness in connection with northeast Delhi riots.

But, can the Court intervene in such matters?

The proceedings of the assembly cannot be called into question in the court of law and the member or the Presiding Officer in whom powers are vested for regulating the procedure or conduct of business is not subject to the jurisdiction of courts in respect of the exercise by him of those powers.

Basics:

Which provisions of the Constitution protect the privileges of the legislature?
The powers, privileges, and immunities of either House of the Indian Parliament and of its Members and committees are laid down in Article 105 of the Constitution.
Similarly, Article 194 deals with the powers, privileges, and immunities of the State Legislatures, their Members, and their committees.

What constitutes a breach of this privilege?

There are no clear, notified rules to decide what constitutes a breach of privilege, and the punishment it attracts.
Generally, any act that obstructs or impedes either House of the state legislature in performing its functions, or which obstructs or impedes any Member or officer of such House in the discharge of his duty, or has a tendency, directly or indirectly, to produce such results is treated as a breach of privilege.
It is also a breach of privilege and contempt of the House to make speeches or to print or publish libel reflecting on the character or proceedings of the House or its Committees or on any member of the House for or relating to his character or conduct as a legislator.

What is the procedure to be followed in cases of an alleged breach of the legislature’s privilege?

The Legislative Assembly Speaker or Legislative Council Chairman constitutes a Privileges Committee.
The members of the committee are nominated based on the party strength in the Houses.
Speaker or Chairman first decides on the motions.
If the privilege and contempt are found prima facie, then the Speaker or Chairman will forward it to the Privileges Committee by following the due procedure.
The Committee will examine whether statements made by him had insulted the state legislature and its Members and whether their image was maligned before the public.
The Committee, which has quasi-judicial powers, will seek an explanation from all the concerned, will conduct an inquiry, and will make a recommendation based on the findings to the state legislature for its consideration.

Source: The Hindu

8) What are Additional Tier-1 bonds?

Securities and Exchange Board of India has tightened its regulations of additional tier-1 bonds or AT-1 bonds and ensured that these risky instruments are less accessible to retail investors.

Changes introduced:

Banks can issue these bonds only on electronic platforms.
Only institutional investors could subscribe to them.
There shall be a minimum allotment size and trading lot size of ₹1 crore.
(An institutional investor is a company or organization that invests money on behalf of other people. Mutual funds, pensions, and insurance companies are examples.)

Basics:

What are Additional Tier-1 bonds?

Under the Basel III framework, banks’ regulatory capital is divided into Tier 1 and Tier 2 capital.
Tier 1 capital is subdivided into Common Equity (CET) and Additional Capital (AT1).
AT1 bonds are a type of unsecured, perpetual bonds that banks issue to shore up their core capital base to meet the Basel-III norms.

Key features:

These have higher rates than tier-II bonds.
These bonds have no maturity date.
The issuing bank has the option to call back the bonds or repay the principal after a specified period of time.
The attraction for investors is a higher yield than secured bonds issued by the same entity.
Individual investors too can hold these bonds, but mostly high net worth individuals (HNIs) opt for much higher risk, higher-yield investments.
Given the higher risk, the rating for these bonds is one to four notches lower than the secured bond series of the same bank.

However, it has a two-fold risk:

First, the issuing bank has the discretion to skip coupon payments. Under normal circumstances, it can pay from profits or revenue reserves in case of losses for the period when the interest needs to be paid.
Second, the bank has to maintain a common equity tier I ratio of 5.5%, failing which the bonds can get written down. In some cases, there could be a clause to convert into equity as well.
Given these characteristics, AT1 bonds are also referred to as quasi-equity.

Differences between Common Equity (CET) and Additional Capital (AT1):

Equity and preference capital is classified as CET and perpetual bonds are classified as AT1.
By nature, CET is the equity capital of the bank, where returns are linked to the banks’ performance and therefore the performance of the share price.
However, AT1 bonds are in the nature of debt instruments, which carry a fixed coupon payable annually from past or present profits of the bank.

9) Delhi govt to spray bio-decomposer in fields to prevent stubble burning

Delhi Chief Minister Arvind Kejriwal has announced that the Delhi government will start spraying bio-decomposer solution prepared by Pusa Research Institute from October 11 to prevent stubble burning.

What’s the plan?

Pusa Research Institute has developed capsules containing bio-decomposers.
These capsules are mixed with a solution.
When applied on fields, it dissolves the stem of stubble, converts it into compost, the =fertility of land increases, and less fertilizer is used.
Delhi government will provide the solution to farmers free of cost and spray it on farms.
The solution will help in the disposal of stubble, without the involvement of stubble burning.

How were these bio-decomposers formed?

Pusa Decomposer is a mix of seven fungi that produce enzymes to digest cellulose, lignin, and pectin in paddy straw.
The fungi thrive at 30-32 degrees Celsius, which is the temperature prevailing when paddy is harvested and wheat is sown.
The IARI has commercialized the technology. It has licensed six companies.

Source: The Hindu

10) Pakistan to challenge India’s application for exclusive GI tag for Basmati rice in EU

Pakistan has decided to file its opposition in the European Union in response to India’s application for exclusive Geographical Indications (GI) tag to Basmati rice.

Why Pakistan is approaching the EU? What are the provisions in this regard?

Pakistan enacted the Geographical Indications (Registration and Protection) Act in March this year, which gives it the right to oppose Indian application for registration of Basmati rice exclusive rights.
While India has said that it is an Indian-origin product in its application, published in the EU’s official journal on September 11.
As per the EU’s official journal, any country can oppose the application for registration of a name pursuant to Article 50(2) (a) of Regulations (EU) of the European Parliament and of the Council on quality schemes for agricultural products and foodstuffs within three months from the date of publication.

Claims by Pakistan:

Pakistan said it was a major grower and producer of Basmati rice and India’s application for exclusivity is unjustified.

Background:

In May 2010, GI status was given to basmati grown in Punjab, Haryana, Delhi, Himachal Pradesh, Uttrakhand, and parts of western Uttar Pradesh and Jammu & Kashmir

About GI tag:

A GI is primarily an agricultural, natural, or a manufactured product (handicrafts and industrial goods) originating from a definite geographical territory.
Typically, such a name conveys an assurance of quality and distinctiveness, which is essentially attributable to the place of its origin.

What are the benefits?

Once the GI protection is granted, no other producer can misuse the name to market similar products. It also provides comfort to customers about the authenticity of that product.

Who is a registered proprietor of a geographical indication?

Any association of persons, producers, organizations, or authority established by or under the law can be a registered proprietor.
Their name should be entered in the Register of Geographical Indication as a registered proprietor for the Geographical Indication applied for.

How long the registration of Geographical Indication is valid?

The registration of a geographical indication is valid for a period of 10 years.
It can be renewed from time to time for a further period of 10 years each.

Who accords and regulates Geographical Indications?

At the International level: Geographical Indications are covered as a component of intellectual property rights (IPRs) under the Paris Convention for the Protection of Industrial Property. GI is also governed by the World Trade Organisation’s (WTO’s) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
In India, Geographical Indications registration is administered by the Geographical Indications of Goods (Registration and Protection) Act, 1999 which came into force with effect from September 2003. The first product in India to be accorded with GI tag was Darjeeling tea in the year 2004-05.

Source: Indian Express