Current Affairs for UPSC IAS Exam – 24 & 25 January 2021

24 & 25 January 2021 Current Affairs for UPSC IAS Exam

Contents

1. More flash droughts in India by end of century
2. China defends new village in Arunachal Pradesh
3. RBI proposes 4-tier structure for NBFCs
4. Telcos seek clarity on National Security Directive (NSD)

MORE FLASH DROUGHTS IN INDIA BY END OF CENTURY

Context:

A new study has now pointed out that India could experience more flash droughts such as the severe flash drought of 1979 which affected about 40% of the country.

Relevance:

GS-I: Geography, GS-III: Disaster Management

Dimensions of the Article:

1. What is a Flash Drought?
2. Why do Flash Droughts occur in India?
3. Impact of flash droughts in India
4. Highlights of the recent study predicting flash droughts in India
5. Recently in news: CEEW study on extreme weather events
6. Major issues with handling droughts in comparison with other disasters
7. Various steps that can be taken to reduce/mitigate the impact of droughts

What is a Flash Drought?

• A drought is an event of prolonged shortages in the water supply, whether atmospheric (below-average precipitation), surface water or ground water.
• Flash droughts are droughts that occur very quickly, with soil moisture depleting rapidly.
• Flash droughts could occur in weeks and stay on for months (sub-seasonal to seasonal time periods).
• Several factors including atmospheric anomalies, anthropogenic greenhouse gas emissions play an important role.

Why do Flash Droughts occur in India?

• A considerably long dry spell with significantly low precipitation anomalies during the monsoon results in an increase in air temperature.
• Increased air temperature and precipitation deficit together cause a rapid depletion of soil moisture leading to flash drought.
• Therefore, flash droughts in the monsoon season are primarily caused by the monsoon breaks.
• However, flash droughts can also occur due to delayed onset of the summer.

Impact of flash droughts in India

• Precipitation deficit and lack of soil moisture during a flash drought can lead to reduction in the yield of rice and maize.
• More than 20% of median area under rice and maize cultivation was affected by flash droughts during 1951-2018 monsoon seasons.
• In 1979, a large part of the rice-cultivated region of the Indo-Gangetic Plain and eastern India was severely affected and in 1982 the flash drought during the monsoon season was widespread and affected the eastern and northeastern regions.
• The paper found that top all-India level flash droughts occurred during the monsoon season of 1979, 2001, 1958 and 1986. Except one (1958), all the other major flash droughts occurred in the mid to late monsoon season.
• The top five flash droughts based on the overall severity score occurred in 1979 followed by 2009,1951,1986 and 2005.

Highlights of the recent study predicting flash droughts in India

• To predict the future flash droughts the team used a Community Earth System Model which simulates the summer monsoon precipitation, sea surface temperature, role of El Nino Southern Oscillation, and air temperature over India.
• The analysis showed a considerable rise in the frequency of extremely dry and hot years in the coming three decades.
• They also examined the role of greenhouse gas emissions, industrial aerosols, and land-use/land-cover change.
• The frequency of concurrent hot and dry extremes is projected to rise by about five-fold, causing an approximately seven-fold increase in flash droughts like 1979 by the end of the 21st century.

Recently in news: CEEW study on extreme weather events

• A Study by Council on Energy, Environment and Water (CEEW) found that in the last 50 years, the frequency of flood events increased almost eight times.
• More than 75% of the districts in India are hotspots of extreme climate events such as cyclones, floods, droughts, heat and cold waves.
• According to the study, the yearly average of drought-affected districts increased 13 times after 2005.
• The study also found a shift in the pattern of extreme climate events: In more than 40% of the districts there a shift in the pattern such that flood-prone areas were becoming drought-prone areas and vice-versa.

Major issues with handling droughts in comparison with other disasters

• It is difficult to determine the beginning and end of droughts
• Duration of the drought may range from months to years
• No single indicator can identify the onset and severity and its impacts
• Impact of droughts across various spheres are difficult to quantify and they usually magnify when events continue through the seasons for longer duration.

Various steps that can be taken to reduce/mitigate the impact of droughts

• Periodic review of water shortage
• Crop diversification
• Locating ground water resources using satellite technology and remote sensing
• Adoption of micro-irrigation
• Promotion of water storage, conservation and rejuvenation
• Construction of farm ponds
• Crop Insurance against drought
• Promotion of alternate livelihood like dairy, poultry, beekeeping
• Availing crop advisories to farmers with focus on efficient use of water
• Compulsory rain water harvesting in urban areas

-Source: The Hindu

CHINA DEFENDS NEW VILLAGE IN ARUNACHAL PRADESH

Context:

China said that its construction of a village across the Line of Actual Control (LAC) in Arunachal Pradesh was “beyond reproach” because it had “never recognised” Arunachal.

There have also been reports of Chinese construction of three villages in Arunachal Pradesh 5 kilometres from the Bum La pass.

Relevance:

GS-II: International Relations

Dimensions of the Article:

1. India’s views on Chinese Villages in Indian territory of Arunachal Pradesh
2. Bum La Pass
3. Steps taken (constructions) by India to mitigate Chinese presence in the region
4. Boundary dispute between India and China

India’s views on Chinese Villages in Indian territory of Arunachal Pradesh

• One of the villages is located a few kilometers beyond what India sees as the border separating Arunachal Pradesh and Tibet, on the banks of Tsari Chu river in Upper Subansiri district in Arunachal.
• The state of Arunachal Pradesh is an ‘integral and inalienable’ part of India.
• However, Indian officials said that this area (on which Chinese villages have been established) has been under Chinese control since 1959.
• There are close to two dozen spots along the entire length of the LAC in all sectors where India and China do not agree on its alignment.
• Indian officials said China had earlier built a permanent construction of military barracks in this area.
• While the Chinese government calls them poverty alleviation villages, some of the villages in the border areas are very remote with little economic activity there, so they appear to have a strategic purpose.

Bum La Pass

• Bum La Pass is one of the four officially agreed BPM (Border Personnel Meeting) points between the Indian Army and the People’s Liberation Army of China.
• Earlier in 2020, China had begun work on a strategically significant railway line that will link Sichuan province with Nyingchi in Tibet, which lies close to Arunachal Pradesh border.

Steps taken (constructions) by India to mitigate Chinese presence in the region

• India is set to spend 10% funds of the Border Area Development Programme (BADP) only to improve the infrastructure along the China border.
• The Border Roads Organisation (BRO) constructed the Daporijo bridge over Subansiri river in Arunachal Pradesh in a record span of just 27 days.
• Recently the Defence Minister virtually laid the foundation of a tunnel at Nechiphu in West Kameng district of Arunachal Pradesh.
• The BRO is already constructing an all-weather tunnel under the Se La pass in Arunachal Pradesh which connects Tawang to the rest of Arunachal and Guwahati.
• Indian Defence Minister inaugurated the Sisseri River Bridge located at lower Dibang Valley in Arunachal Pradesh connecting Dibang Valley and Siang.
• Bogibeel bridge, which is India’s longest road-rail bridge connecting Dibrugarh in Assam to Pasighat in Arunachal Pradesh was inaugurated in 2018.

Boundary dispute between India and China

• India and china share a border of around 3,500 kilometers.
• It can be said that the Present border dispute between India and China is result of irregular British policies.
• British sometimes advocated farther northern Kashmiri border in the form of Johnson Line where Aksai Chin was part of Kashmir and another time when they advocated McDonald line under which Aksai Chin falls under Xinjiang Province of China.
• As a result, the disagreement, prevails with India claiming Johnson Line to be correct and China claiming McDonald Line to be correct.

1. Along the Eastern border a boundary demarcating Tibetan region of China and the North-east Frontier Areas of India (current Arunachal Pradesh) was agreed upon by British and Tibetan representatives which came to be called the McMahon Line.
2. This is another contentious issue because China does not recognize the McMahon line as it was signed between British and Tibet in the absence of China.
3. India on its part recognizes Chinese sovereignty over Tibet and accepts McMahon line to be the official boundary.
4. Indian support to Tibetian independence has angered China.

-Source: The Hindu

RBI PROPOSES 4-TIER STRUCTURE FOR NBFCS

Context:

The Reserve Bank of India (RBI) has proposed a tighter regulatory framework for non-banking financial companies (NBFCs) by creating a four-tier structure with a progressive increase in intensity of regulation.

The RBI has also proposed classification of Non-Performing Assets (NPAs) of base layer NBFCs from 180 days to 90 days overdue.

Relevance:

GS-III: Indian Economy

Dimensions of the Article:

1. What exactly are NBFCs?
2. Significance / Importance of NBFCs
3. What are the differences between NBFCs and Banks?
4. More about the RBI’s proposed four-tier structure

What exactly are NBFCs?

• NBFCs or Non-Banking Financial Companies are those companies which provide banking services without meeting the legal definition of a bank.
• A NBFC is incorporated under the Companies Act, 1956 and desirous of commencing business of non-banking financial institution as defined under Section 45 I(a) of the RBI Act, 1934.
• The NBFCs do the business of loans and advances, acquisition of shares, stock, bonds, debentures, securities issued by Government.
• They also deal in other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business.
• However, the companies CANNOT be NBFCs if their primary business is related to agriculture activity, industrial activity, sale/ purchase/ construction of immovable property.

Significance / Importance of NBFCs

• These organizations play a crucial role in the economy, offering their services in urban as well as rural areas, mostly granting loans allowing for growth of new ventures. It has a key role in complementing the banking sector in reaching out to the underserved and unbanked segments of society like the MSMEs sector.
• They alone count for 12.5% raise in Gross Domestic Product of our country.
• Most people prefer NBFCs over banks as they find them safe, efficient and quick in assisting with financial requirements.
• Moreover, there are various loan products available and there is flexibility and transparency in their services.
• NBFCs indulge in wide-ranging lending activities – Because unlike PSBs (Public Sector Banks) which have much heavier burden of Non-performing assets (NPA) hampering the expansion of lending activities, NBFCs do Not have such an issue.
• NBFCs have a role to play in strengthening of microfinance in India which is critically important for women empowerment as various self-help groups (SHGs) led by women and catering largely to women have been involved micro-finance.
• Digital lending platforms like peer-to-peer (P2P) lending have become popular in contemporary times and the NBFCs have a key role in this segment also.
• NBFCs play a vital role as India’s diversity in terms of geographic expanse, demography, caste and class composition etc. is huge and ensuring financial inclusion for the entire population is a critical challenge.

What are the differences between NBFCs and Banks?

• NBFCs CANNOT accept demand deposits; Banks CAN maintain demand deposits (savings/current accounts) but NBFCs accept only term deposits;
• Banks form a part of Payment and Settlement Mechanism but NBFCs do NOT form part of the payment and settlement system and cannot issue cheques drawn on itself;
• Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is available to depositors of Banks; but NOT available to depositors of NBFCs
• Banks, including co-operative banks, can accept deposits; NBFCs, which have been issued Certificate of Registration by RBI with a specific license to accept deposits, are entitled to accept public deposit.

More about the RBI’s proposed four-tier structure

The proposed framework is aimed at protecting financial stability while ensuring that smaller NBFCs continue to enjoy light regulations and grow with ease.

According to the proposal: The regulatory and supervisory framework of NBFCs should be based on a four-layered structure-

Base Layer:

• NBFCs in the lower layer will be known as NBFC-Base Layer (NBFC-BL).
• For NBFCs in this layer least regulatory intervention is warranted.

Middle Layer:

• NBFCs in the middle layer will be known as NBFC-Middle Layer (NBFC-ML)
• The regulatory regime for this layer will be stricter compared to the base layer.
• Adverse regulatory arbitrage vis-à-vis banks can be addressed for NBFCs falling in this layer in order to reduce systemic risk spill-overs, where required.

Upper Layer:

• NBFC in the Upper Layer will be known as NBFC-Upper Layer (NBFC-UL) and will invite a new regulatory superstructure.
• This layer will be populated by NBFCs which have large potential of systemic spill-over of risks and have the ability to impact financial stability.
• There is no parallel for this layer at present, as this will be a new layer for regulation. The regulatory framework for NBFCs falling in this layer will be bank-like, albeit with suitable and appropriate modifications.
• If an identified NBFC-UL does not meet the criteria for classification for four consecutive years, it will move out of the enhanced regulatory framework.

Top Layer:

• Ideally this layer is supposed to be empty.
• It is possible that supervisory judgment might push some NBFCs out of the upper layer of the systemically significant NBFCs for higher regulation/supervision.
• These NBFCs will occupy the top of the upper layer as a distinct set. Ideally, this top layer of the pyramid will remain empty unless supervisors take a view on specific NBFCs.
• If certain NBFCs lying in the upper layer are seen to pose extreme risks as per supervisory judgement, they can be put to higher and bespoke regulatory/supervisory requirements.

-Source: The Hindu

TELCOS SEEK CLARITY ON NATIONAL SECURITY DIRECTIVE (NSD)

Context:

Telecom firms have asked the government to clarify about the entity that will be held liable in the event of a security breach in the network post implementation of the National Security Directive (NSD) in the telecom sector.

Relevance:

GS-III: Internal Security Challenges

Dimensions of the Article:

1. What is National Security Directive (NSD) on the Telecommunication Sector?
2. Major aims of National Security Directive (NSD)

What is National Security Directive (NSD) on the Telecommunication Sector?

• Recently, the Cabinet Committee on Security has sanctioned the setting up of a new National Security Directive (NSD) on the Telecommunication Sector which mandates service providers to purchase equipment from trusted sources.
• Under the provisions of this directive, the Government will declare a list of trusted sources and trusted products for installation in the country’s telecom network.
• This move came after the Centre asked all telecom operators to undertake an ‘Information Security Audit’ of their networks.
• The objective was to specifically check for any ‘backdoor’ or ‘trapdoor’ vulnerabilities in the telecom networks, which can be exploited to extract information and pass on illegally to agencies around the world.
• A backdoor or a trap door is a bug installed in the telecom hardware that allows companies to listen in or collect data being shared on the network.
• Chinese vendors Huawei and ZTE have been under global scrutiny for allegedly installing backdoor vulnerabilities and spying for the Chinese government and have been banned by several countries.

Major aims of National Security Directive (NSD)

• To classify telecom products and their sources under the ‘trusted’ and ‘non-trusted’ categories.
• To provide opportunities to local manufacturers of equipment and handsets in the “Sensitive” telecom sector to counter dumping of products by other countries.

Significance of NSD

• Apart from the directive, the government will release at regular intervals new guidelines for effective monitoring and effective control of the network security of the TSPs.
• The move could potentially make it more difficult for Chinese telecom equipment vendors to supply equipment to Indian telecom players.
• Mobile applications that either have Chinese origins or have central servers in China may also find re-entry in the market extremely difficult.

-Source: The Hindu