Current Affairs 16 September 2023

CONTENTS

1. Discontinuation of Incremental Cash Reserve Ratio (I-CRR) by RBI
2. Mandating NavIC Support in All Smartphones Sold in India by 2025
3. Impacts of Artificial Lighting on Coastal Marine Organisms
4. Leopard Sterilization for Population Management
5. Bhoj wetland
6. Sir M. Visvesvaraya

Discontinuation of Incremental Cash Reserve Ratio (I-CRR) by RBI

Context:

The Reserve Bank of India (RBI) has revealed its plan to gradually eliminate the Incremental Cash Reserve Ratio (I-CRR), releasing the amount held by banks under this reserve requirement in stages.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

1. RBI’s Phased Implementation of I-CRR Discontinuation
2. Understanding Incremental Cash Reserve Ratio (I-CRR)
3. Cash Reserve Ratio (CRR)
4. The Use of I-CRR During Demonetization: Why RBI Chooses It
5. Monetary Policy Instruments at RBI’s Disposal

RBI’s Phased Implementation of I-CRR Discontinuation

Smooth Transition

• RBI will phase out the Incremental Cash Reserve Ratio (I-CRR) discontinuation to avoid disrupting liquidity abruptly.

Three Stages

• In the first and second stages, 25% each of impounded funds from banks will be released.
• The third stage will release the remaining 50% of the balance.

Festival Season Preparedness

• The gradual approach ensures banks have ample liquidity to address rising credit demands during the upcoming festival season.

Understanding Incremental Cash Reserve Ratio (I-CRR)

Introduction of I-CRR

• On August 10, 2023, RBI announced that banks must maintain an Incremental Cash Reserve Ratio (I-CRR) of 10% on the increase in their Net Demand and Time Liabilities (NDTL).
• NDTL is the difference between a bank’s total demand and time liabilities (deposits) and the deposits it holds as assets with other banks.

Purpose of I-CRR

• I-CRR was introduced as a temporary measure to manage excess liquidity in the banking system.
• Factors contributing to surplus liquidity included demonetization of Rs 2,000 banknotes, RBI’s surplus transfer to the government, increased government spending, and capital inflows.
• Excess liquidity posed a risk to price and financial stability, necessitating effective liquidity management.

Impact on Liquidity Conditions

• I-CRR was expected to absorb over Rs 1 lakh crore of excess liquidity from the banking system.
• Initially, the banking system experienced liquidity deficits due to I-CRR, exacerbated by GST-related outflows and central bank interventions.
• However, liquidity conditions eventually stabilized.

Cash Reserve Ratio (CRR)

• CRR stands for Cash Reserve Ratio, which is the percentage of cash that banks are required to keep in reserves relative to their total deposits.

Applicability of CRR

• All banks in India, except Regional Rural Banks (RRBs) and Local Area Banks (LABs), must deposit CRR funds with the Reserve Bank of India (RBI).
• RRBs and LABs are exempted from maintaining CRR with RBI but must maintain it within themselves in the form of cash, gold, or approved unencumbered securities.

Usage of CRR Funds

• Banks are prohibited from lending CRR funds to corporates or individual borrowers.
• CRR funds cannot be used for investment purposes, and banks do not earn interest on these reserves.
• CRR ensures the security of a portion of a bank’s deposits with RBI in case of emergencies.
• This cash is readily accessible to customers when they request their deposits.

Role in Inflation Control

• CRR plays a role in controlling inflation. When there is a threat of high inflation, RBI increases the CRR requirement.
• This forces banks to hold more money in reserves, reducing the money available for lending, thus curbing excess liquidity in the economy.

Stimulating Economic Growth

• Conversely, when there is a need to inject funds into the market to stimulate economic growth, RBI lowers the CRR.
• This action allows banks to provide loans to businesses and industries for investment purposes, aiding economic growth.

Applicability to Non-Banking Financial Companies (NBFCs)

• It’s important to note that while commercial banks are required to maintain CRR, NBFCs (Non-Banking Financial Companies) are not subject to this requirement.

The Use of I-CRR During Demonetization: Why RBI Chooses It

Addressing Sudden Liquidity Influx

• RBI opts for I-CRR in cases of abrupt surges in liquidity, as seen during demonetization in November 2016.
• I-CRR allows RBI to manage the specific issue of excess liquidity without affecting other components of its monetary policy. This precision is essential during unique events like demonetization.

Speed of Implementation

• I-CRR can be swiftly implemented. In situations where there is a sudden liquidity surge, such as the return of demonetized currency notes, the central bank may require a tool that can be put into effect promptly.

Temporary Nature

• I-CRR is typically a temporary measure. It is introduced to absorb excess liquidity temporarily and can be phased out once the liquidity situation stabilizes.
• In contrast, other tools like Repo Rate, Statutory Liquidity Ratio (SLR), etc., may have a longer-term and slower impact on liquidity.

Effective Management of Unique Situations

• The use of I-CRR during demonetization allowed RBI to manage the influx of returned currency notes efficiently and prevent unintended consequences on inflation, monetary stability, and economic growth.

Monetary Policy Instruments at RBI’s Disposal

Qualitative Instruments:

• Moral Suasion
  • Non-binding persuasion and communication to influence banks’ lending and investment decisions.
• Direct Credit Controls
  • Regulation of credit flow to specific sectors or industries through RBI directives or credit limits.
• Selective Credit Controls
  • Targeted measures that focus on specific types of loans, like consumer credit, to manage demand in specific economic areas.

Quantitative Instruments:

• Cash Reserve Ratio (CRR)
  • The portion of a bank’s deposits held as cash reserves with the RBI, affecting the funds available for lending.
• Repo Rate
  • The interest rate at which RBI lends short-term funds to commercial banks, influencing their borrowing costs and lending rates.
• Reverse Repo Rate
  • The interest rate at which banks can park excess funds with the RBI, setting a floor for short-term interest rates and managing liquidity.
• Bank Rate
  • The rate at which RBI provides long-term funds to banks and financial institutions, impacting long-term money market rates.
• Open Market Operations (OMOs)
  • RBI’s buying or selling of government securities in the open market, affecting money supply and banking system liquidity.
• Liquidity Adjustment Facility (LAF)
  • Comprises the repo rate and reverse repo rate, used by banks for short-term liquidity needs and daily liquidity management.
• Marginal Standing Facility (MSF)
  • The rate at which banks can borrow overnight funds from RBI using government securities as collateral, serving as a secondary funding source.
• Statutory Liquidity Ratio (SLR)
  • A percentage of a bank’s net demand and time liabilities (NDTL) to be maintained in approved securities.

-Source: The Hindu

Mandating NavIC Support in All Smartphones Sold in India by 2025

Context:

The Indian government is considering a mandate that would require all smartphones sold in India to support the indigenous navigation technology NavIC by 2025. The Ministry of Electronics and Information Technology (MeitY) proposes that all 5G phones must support NavIC by January 1, 2025, and other phones by December 2025. This follows Apple’s decision to include NavIC support in some of its iPhone 15 models.

Relevance:

GS III: Science and Technology

Dimensions of the Article:

1. About NavIC (Navigation with Indian Constellation)
2. Advantages of a Regional Navigation System
3. Old vs New (2nd-Generation) Satellites of NavIC

About NavIC (Navigation with Indian Constellation):

• Development: NavIC, also known as the Indian Regional Navigation Satellite System (IRNSS), is an indigenous navigation satellite system created by ISRO. It was approved in 2006 and became operational in 2018.
• Satellite Coverage: NavIC consists of 7 satellites covering India’s entire landmass and up to 1,500 km beyond its borders.
• Purpose: It aims to reduce India’s reliance on foreign navigation systems, especially for strategic purposes.
• Current Applications: NavIC is currently used for public vehicle tracking, emergency alerts for deep-sea fishermen, and natural disaster tracking in India.
• Expansion Plans: India intends to integrate NavIC into smartphones and expand its coverage from regional to global.

Advantages of a Regional Navigation System:

• Unique System: India is the only country with a regional satellite-based navigation system.
• Global Systems: Other global navigation systems include GPS (USA), GLONASS (Russia), Galileo (Europe), Beidou (China), and systems like GAGAN (India) and Japan’s four-satellite system.
• Accuracy: Fully operational NavIC signals are accurate up to 5m for open signals and even more precise for restricted signals, making it advantageous over GPS.
• Orbit: NavIC satellites are in high geo-stationary orbits, ensuring constant coverage and better signal accessibility, including in challenging terrains.

Old vs New (2nd-Generation) Satellites of NavIC:

Old Satellites (1st Generation):

• Launch Vehicle: Each of the 7 satellites in the initial IRNSS constellation was launched using the Polar Satellite Launch Vehicle (PSLV), ISRO’s primary launch rocket.
• Replacement Satellite: The last 1st-generation satellite, IRNSS-1I, was launched in 2018 to replace an older, partially defunct satellite within the constellation.
• IRNSS-1H Incident: The satellite launched in 2017, IRNSS-1H, was considered lost because the payload’s heat shield failed to open on time. Hence, it is not counted in the operational satellites.

New Satellites (2nd Generation):

• Heavier Payload: The 2nd-generation satellite, NVS-01, launched in May 2023, is part of ISRO’s NVS series and is heavier compared to the older satellites.
• Rubidium Atomic Clock: These new satellites are equipped with Rubidium atomic clocks, an indigenous technology used for precise location determination.
• Increased Location Services: While only four 1st-generation IRNSS satellites provide location services, the 2nd-generation satellites will enhance interoperability and are suitable for wearable devices by transmitting signals in a third frequency, L1, in addition to the existing L5 and S frequencies.
• Extended Mission Life: The 2nd-generation satellites have a longer mission life of over 12 years, whereas the older satellites had a mission life of 10 years.

Impacts of Artificial Lighting on Coastal Marine Organisms

Context:

While the effects of artificial lighting on land-based life have been studied extensively, a recent US-based study highlights the need to also consider its impact on coastal marine organisms, including whales, fish, corals, and plankton.

Relevance:

GS III: Environmental Pollution & Degradation

Dimensions of the Article:

1. Artificial Lighting in the Marine Environment: An Overview
2. Marine Light Pollution: A Growing Concern
3. Impact of Artificial Lighting on the Marine Ecosystem
4. Suggestions for Mitigation

Artificial Lighting in the Marine Environment: An Overview

• Artificial lighting encompasses light produced from sources like electricity, candles, and fire.
• It’s recognized for its negative impacts on terrestrial life, including humans and wildlife.
• Recent research highlights its effects on marine life, particularly concerning low levels and specific wavelengths like blue and green light.

Marine Light Pollution: A Growing Concern

• Excessive or improper use of artificial light in marine settings leads to light pollution.
• Light pollution disrupts natural wildlife patterns and contributes to increased atmospheric CO2.
• Approximately 3% of the world’s Exclusive Economic Zones (EEZs), totaling 1.9 million km2, experience significant artificial light pollution down to a 1-meter depth.
• Many areas in the ocean witness light exposure at depths of 10 meters, 20 meters, and beyond.
• In areas with clear water, nighttime light can penetrate depths exceeding 40 meters.

Sources of Marine Artificial Lighting

• Coastal development features such as buildings, streetlights, billboards, ports, piers, docks, and lighthouses contribute to marine light pollution.
• Vessels like fishing and merchant marine vessels, harbors, and offshore structures like oil rigs are sources of light pollution.
• Common types of artificial lights in the marine environment include LED, fluorescent, metal halide, and plasma lamps.
• White LEDs, known for their broad spectrum and sensitivity to short wavelengths (blue and green light), impact a wide range of marine organisms.

Impact of Artificial Lighting on the Marine Ecosystem

• Marine organisms have evolved over millions of years to adapt to natural light, making them vulnerable to the rising threat of anthropogenic light pollution.
• Anthropogenic light pollution disrupts the natural rhythms of marine life, affecting hormonal cycles, inter-species behavior, and reproduction patterns.
• Illustrative Effects: Female sea turtles, seeking dark, quiet spots to lay their eggs, are deterred by artificial light, potentially preventing them from coming ashore. Hatchlings, confused by inland lights instead of moonlight, can perish due to dehydration or starvation.
• The increasing use of LED lighting is reshaping the characteristics of artificial light.

Suggestions for Mitigation

• Promote “Lights Out” Initiatives: Encourage Lights Out campaigns at the local, state, and regional levels to reduce nighttime lighting, aiding migrating birds attracted to artificial light. This will also benefit marine ecosystems near coastal cities.
• Emphasize Red Light Usage: Increase the use of red light in coastal areas where possible and establish barriers to shield coastlines from artificial light. Red light, with the longest wavelength in the visible spectrum, penetrates less deeply into the water, minimizing its impact on marine life.

-Source: Indian Express

Leopard Sterilization for Population Management

Context:

The Maharashtra and Gujarat governments have both proposed the sterilization of leopards as a strategy for sustainable population management. Maharashtra aims to implement this approach for leopard conservation within the state, while Gujarat focuses on leopards in and around Gir National Park.
Relevance:

GS III: Environment and Ecology

Dimensions of the Article:

1. Sterilizing Leopards in Maharashtra
2. Key Points About Leopards

Sterilizing Leopards in Maharashtra

Need for Sterilization:

• In 2019-20, Maharashtra witnessed 58 human deaths caused by leopard attacks, a significant increase from previous years.
• Increasing leopard-human conflicts and the rising leopard population have led to the need for sustainable management.
• Maharashtra aims to protect both leopards and human communities through sterilization while adhering to conservation laws.

Concerns and Considerations:

• Effectiveness of sterilization in managing leopard populations is questioned.
• Demand for comprehensive scientific research and veterinary skill development.
• Potential stress on leopards during the sterilization process.
• Challenges with traditional sterilization methods.
• Exploration of alternative contraception options.
• Emphasis on addressing conflicts and gaining community support for conservation efforts.

Similar Initiatives in Gujarat:

• Gujarat’s forest department also proposed sterilization, particularly in and around Gir National Park.
• These initiatives highlight the growing concern for managing leopard populations and human-leopard conflicts.

Key Points About Leopards

Scientific Name: Panthera pardus

About Leopards:

• Leopards are the smallest of the Big Cats, including the Tiger, Lion, Jaguar, Snow Leopard, and themselves.
• They are highly adaptable, able to thrive in various habitats.
• Leopards are nocturnal hunters, primarily preying on smaller herbivores like chital, hog deer, and wild boar.
• Melanism, where the skin is entirely black, is a common occurrence among leopards, often referred to as black panthers.

Habitat:

• Found across sub-Saharan Africa, parts of Western and Central Asia, the Indian subcontinent, Southeast, and East Asia.
• The Indian leopard (Panthera pardus fusca) is widespread on the Indian subcontinent.

Population in India:

• A 60% increase in leopard population in India from 2014 to 2018.
• The 2014 estimate of nearly 8,000 leopards has risen to 12,852.
• Highest leopard populations estimated in Madhya Pradesh, Karnataka, and Maharashtra.

Threats:

• Poaching for illegal skin and body part trade.
• Habitat loss and fragmentation.
• Human-leopard conflicts.

Conservation Status:

• IUCN Red List: Vulnerable
• CITES: Appendix-I
• Wildlife (Protection) Act, 1972: Schedule-I

-Source: The Hindu

Bhoj Wetland

Context:

Recently, the National Green Tribunal (NGT) ordered Madhya Pradesh government to stop the operation of cruise vessels as well as other motor-propelled boats in the Bhoj wetland.

Relevance:

GS III: Environment and Ecology

Dimensions of the Article:

1. Bhoj Wetland
2. National Green Tribunal (NGT)

Bhoj Wetland:

• Location: The Bhoj Wetland is situated in Bhopal, Madhya Pradesh, and consists of two interconnected human-made reservoirs, known as the upper and lower lakes.
• Lake Names: The Upper Lake is locally called Bhojtal or Bada Talaab, while the Lower Lake is referred to as Chhota Talaab.
• Biodiversity Richness: These lakes are renowned for their exceptional biodiversity, especially in terms of macrophytes, phytoplankton, and zooplankton. They host a diverse range of aquatic life.
• Fish Species: The wetland supports more than 15 different types of fish species, contributing to its ecological diversity. Additionally, the lakes are home to several vulnerable species, including turtles, amphibians, and aquatic invertebrates.
• Ramsar Designation: The Bhoj Wetland was recognized as a Ramsar site in the year 2002, signifying its global importance as a wetland ecosystem

National Green Tribunal (NGT)

• The NGT was established on October 18, 2010 under the National Green Tribunal Act 2010, passed by the Central Government.
• National Green Tribunal Act, 2010 is an Act of the Parliament of India which enables creation of a special tribunal to handle the expeditious disposal of the cases pertaining to environmental issues.
• NGT Act draws inspiration from the India’s constitutional provision of (Constitution of India/Part III) Article 21 Protection of life and personal liberty, which assures the citizens of India the right to a healthy environment.
• The stated objective of the Central Government was to provide a specialized forum for effective and speedy disposal of cases pertaining to environment protection, conservation of forests and for seeking compensation for damages caused to people or property due to violation of environmental laws or conditions specified while granting permissions.

Structure of National Green Tribunal

• Following the enactment of the said law, the Principal Bench of the NGT has been established in the National Capital – New Delhi, with regional benches in Pune (Western Zone Bench), Bhopal (Central Zone Bench), Chennai (Southern Bench) and Kolkata (Eastern Bench). Each Bench has a specified geographical jurisdiction covering several States in a region.
• The Chairperson of the NGT is a retired Judge of the Supreme Court, Head Quartered in Delhi.
• Other Judicial members are retired Judges of High Courts. Each bench of the NGT will comprise of at least one Judicial Member and one Expert Member.
• Expert members should have a professional qualification and a minimum of 15 years’ experience in the field of environment/forest conservation and related subjects.

Powers of NGT

The NGT has the power to hear all civil cases relating to environmental issues and questions that are linked to the implementation of laws listed in Schedule I of the NGT Act. These include the following:

• The Water (Prevention and Control of Pollution) Act, 1974;
• The Water (Prevention and Control of Pollution) Cess Act, 1977;
• The Forest (Conservation) Act, 1980;
• The Air (Prevention and Control of Pollution) Act, 1981;
• The Environment (Protection) Act, 1986;
• The Public Liability Insurance Act, 1991;
• The Biological Diversity Act, 2002.
• This means that any violations pertaining ONLY to these laws, or any order / decision taken by the Government under these laws can be challenged before the NGT.
• Importantly, the NGT has NOT been vested with powers to hear any matter relating to the Wildlife (Protection) Act, 1972, the Indian Forest Act, 1927 and various laws enacted by States relating to forests, tree preservation etc.

Challenges related to the NGT

• Two important acts – Wildlife (Protection) Act, 1972 and Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 have been kept out of NGT’s jurisdiction. This restricts the jurisdiction area of NGT and at times hampers its functioning as crucial forest rights issue is linked directly to environment.
• Decisions of NGT have also been criticised and challenged due to their repercussions on economic growth and development.
• The absence of a formula-based mechanism in determining the compensation has also brought criticism to the tribunal.
• The lack of human and financial resources has led to high pendency of cases – which undermines NGT’s very objective of disposal of appeals within 6 months.

-Source: The Hindu

Sir M. Visvesvaraya

Context:

Engineer’s Day is celebrated in India on September 15 every year to honour the contributions of Bharat Ratna Sir Mokshagundam Visvesvaraya, also known as Sir MV, who was born on this day in 1861.

Relevance:

GS I: Personalities in News

Dimensions of the Article:

1. About Sir M. Visvesvaraya
2. Key Facts about Krishnaraja Sagar (KRS) Dam

About Sir M. Visvesvaraya:

• Mokshagundam Visvesvaraya, widely known as Sir MV, served as the Diwan of Mysore from 1912 to 1918.
• He earned the title “Father of Modern Mysore” for his exceptional contributions.
• Born on September 15, 1861, in Muddenahalli village, Karnataka.
• He pursued a Bachelor of Arts from the University of Madras and completed civil engineering at the College of Science in Pune.
• Notable contributions include the construction of the Krishna Raja Sagara Dam and the invention of automatic water floodgates.
• Established the Government Engineering College in Bengaluru in 1917, later renamed University Visvesvaraya College of Engineering.
• A precursor of economic planning in India.

Awards:

• Awarded Bharat Ratna in 1955, India’s highest civilian honor.
• Conferred with the British knighthood by King George V.

Key Facts about Krishnaraja Sagar (KRS) Dam:

• Located at the confluence of the Kaveri River with its tributaries, Hemavati and Lakshmana Tirtha, in Mandya district, Karnataka.
• A gravity dam used for irrigation, water supply, and hydroelectric power generation.

Usage:

• Provides irrigation water for Mysore and Mandya, drinking water for Mysore, Mandya, and Bengaluru.
• Supports the Shivanasamudra hydroelectric power station.
• Releases water to Tamil Nadu, stored in the Mettur Dam.

History:

• Built during the rule of Maharaja Krishnaraja Wadiyar IV.
• Construction began in 1911 and completed in 1931.
• Designed by Sir M. Visvesvaraya.

Features:

• Constructed using surki mortar and limestone.
• 2,621 meters (8,600 ft) long and 40 meters (130 ft) high.
• Reservoir covers approximately 130 sq. km, one of Asia’s largest at the time.
• Brindavan Gardens is adjacent to the dam.

-Source: Indian Express