Current Affairs for IAS Exams - 5 November 2017

Current Affairs for IAS Exams - 5 November 2017

::NATIONAL::

Navy widening patrolling areas of Indian Ocean Region

  • The Indian Navy is broadening its patrol areas in the Indian Ocean Region to cover all choke points in the face of increasing maritime threats, its chief Sunil Lanba .
  • “Last year, we had a relook at our deployment pattern and we reached a consensus within the Navy to have a mission-based deployment so that our areas of interest can be kept under permanent surveillance. So the ingress and egress routes of the Indian Ocean Region are being kept under surveillance so that we have better awareness and know what is happening,” Admiral Lanba said on the sidelines of the first Goa Maritime Conclave (GMC), which saw the participation of 10 Indian Ocean littoral states.
  • Under the mission-based deployment, 12 to 15 ships are now permanently deployed at the choke points and crucial sea lanes of communication.
  • Addressing the GMC, Defence Minister NirmalaSitharaman had expressed concern that “extra-regional nations maintain near permanent presence” in the region, in an oblique reference to China. The Chinese have been sending ships to the northern Indian Ocean in the name of anti-piracy operations and over the last two to three years on average about 8-10 ships have been deployed. This August, the number shot up to 14.
  • Apart from getting access to several ports and facilities in the Indian Ocean, China recently opened its first overseas military base in Djibouti in the Horn of Africa, giving it the ability to monitor across the Gulf of Aden and the Persian Gulf. “Now”, former Navy Chief Admiral Arun Prakash toldThe Hindu, “it is imperative that our Navy should be more visible in our own waters.”
  • Vice Admiral Shekhar Sinha, former Western Naval Commander, said China, a huge importer of energy, has been trying to get past the Malacca dilemma, a critical choke point, from which most of its supplies pass through. He named three choke points for the Chinese — Gulf of Aden, Gulf of Hormuz and the Malacca straits — and added that they now have Djibouti at the Gulf of Aden and the Gwadar port and Chinese companies have acquired stakes in Kuantan port in Malaysia, close to the Malacca Straits. “Then all three choke points will be under the surveillance of the Chinese. That will slightly restrict the Indian Navy and the U.S. Navy,” he noted.
  • Speaking on the conclave, Admiral Lanba said the key takeaways were the identification of common security threats across all countries and a broader agreement for greater coordination and information sharing. The threats, essentially non-traditional in nature, include maritime terrorism, unregulated fishing, illegal fishing in the global commons, pollution, sea piracy, drug and human trafficking.
  • While India is looking at cooperative frameworks to deal with common threats, Adm. Lanba clarified that efforts like coordinated patrols and joint patrols will be done only with maritime neighbours. “We only do coordinated patrols and joint patrols with nations who are our maritime neighbours. We are not looking at joint patrols with the U.S. Navy at this moment,” he added.
  • Over the last year, the Navy, to test the waters, stepped up its presence and maintained round the clock surveillance on India’s vital areas of interest across the length and breadth of the Indian Ocean Region (IOR). This allows India to position itself as a net security provider in the region. “Earlier, there were flag showing missions in terms of overseas deployments for exercises and visits. The need of the hour is to change the nature of deployments. All choke points (meaning straits which connect seas or narrow water channels where ships and submarines of adversaries can be choked off) and sea lanes are now under 24/7 surveillance. They are now institutionalised deployments,” a senior Navy officer said.
  • The new mission-based deployment concept, which was unveiled in the Naval Commander’s Conference in May, has mission-ready ships and aircraft being deployed along critical sea lanes of communications and choke points from Malacca straits to the Persian Gulf. The biannual Naval Commander’s Conference, which recently reviewed its effectiveness, has formalised it.
  • The cycle of 12-15 ships in effect means a turnaround of 36-45 ships, with one set deployed, one set in transit, and one set in maintenance.
  • “These ships are deployed always ready to meet any eventuality across the spectrum of operations ranging from acts of maritime terrorism and piracy to humanitarian assistance and disaster relief (HADR) missions,” the officer stated.
  • Adm. Arun Prakash said the new maritime strategy had listed “naval presence” as a mission. "This is, firstly, to reassure our friends that you are there, second to send a message to your adversaries and third, it is a measure of maritime domain awareness."
  • In this backdrop, he said Bay of Bengal and Arabian Sea can be effectively monitored if India were to sit at the three choke points.
  • Another aspect is that India is positioning itself as the net security provider in the region and the first responder in the case of natural disasters.
  • For instance, in May, the Indian Navy was the first to respond to heavy rain and flooding in Sri Lanka as also to the requirements post Cyclone Mora in Bangladesh and Myanmar.

Govt to infuse capital to give stimulus to banks

  • The government has announced a capital infusion in public sector banks amounting to Rs. 2.11 lakh crore over financial years 2017-18 and 2018-19 through the issue of recapitalisation bonds, enabling the banks to tap the market, and through budgetary support. Of this sum, Rs. 1.35 lakh crore will come through recap bonds, Rs. 18,000 crore from the budget and Rs. 58,000 crore that banks can raise from the market. However, the government is yet to decide on the modalities of the recap bonds.
  • The government has issued recapitalisation bonds in the past, between 1986 and 2001, worth over Rs. 20,000 crore. The process typically is that the government issues the bonds to banks in lieu of capital.
  • After lenders subscribe to these bonds, the money raised by the government is used to infuse fresh equity into the banks. Except the interest that has to be paid, there will not be an additional burden on the government. It is likely to have a marginal impact on fiscal deficit.
  • Reacting to the move, RBI Governor Urjit Patel said the capital infusion would be “liquidity neutral for the government,” except the interest expense that will contribute to the annual fiscal deficit. He pointed out that a well-capitalised banking system was a pre-requisite for stable economic growth. Similar bonds have been used by many countries, including Chile, the Philippines, Finland, Hungary, and Argentina.
  • Reeling under the pressure of bad loans for the last three years, capital has eroded significantly in public sector banks. These banks are overly dependent on the government for funds due to their limited ability to tap the capital market because of the subdued valuation of their share price.
  • Most of the public sector banks’ shares are trading at a discount to their book value. However, the government is also constrained to make a significant capital allotment from its budget, since it wants to stick to the path of fiscal discipline.
  • The Finance Minister has pegged the fiscal deficit target at 3.2% of the GDP. So, recap bonds were an option which fulfilled both objectives: supporting banks with their capital needs but without disturbing the fiscal math.
  • According to a report by State Bank of India, from 1986 to 2001, the interest paid by the government to the nationalised banks on recap bonds worked out to 0.07% of GDP per annum on average. But during the period, the banks paid dividends to the government amounting to 0.06% of the GDP on an average. So, the net impact on fiscal deficit was only 0.03% of the GDP.
  • The move will strengthen the capital adequacy of public sector banks, which is required for provisioning for bad loans and adhering to the Basel-III framework. Following a sharp increase in bad loans, which is almost 10% of the banks’ advances, the capital position of the public sector banks has weakened.
  • In the past two years, NPAs have increased to Rs. 4.55 lakh crore. The banking system is saddled with bad loans and stressed assets close to Rs. 10 lakh crore. As the banks were wary of lending, credit growth slipped to a 60-year low of 5% in April.
  • Analysts and rating agencies claim the capital infusion will be sufficient for public sector banks. Pointing out that the funds infusion would be credit positive, rating agency Moody’s said external capital requirements over the next two years would be around Rs. 70,000 crore-Rs. 95,000 crore for 11 banks rated by the agency.
  • “In addition to the fact that Moody’s estimates of capital requirement is for only the 11 rated banks, while the government factors in the entire PSU bank universe, the government’s estimate of capital requirement could also be factoring in a much higher loan growth than was seen in the last three years,” the agency said.
  • While capital infusion is welcome, it must be ensured that the government is not throwing good money after bad money. Improving credit discipline and risk management systems are the need of the hour for public sector banks. The governance issues of the banks and their over-enthusiastic lending in the past, for instance, need to be addressed.
  • The government should initiate long-pending reforms, especially those recommended by the P.J. Nayak Committee that said, among other things, that it should cede control of nationalised banks and cut its stake below 51%.

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::INTERNATIONAL::

U.S. proposed sanctions on Myanmar

  • U.S. lawmakers proposed sanctions against Myanmar’s military, in some of the strongest efforts yet by Washington to pressure the southeast Asian nation to end abusive treatment of its Rohingya Muslim minority.
  • House Republicans and Democrats introduced legislation that would curtail assistance or cooperation with Myanmar’s military and require the White House to identify senior military officials who would have U.S. visa bans imposed or reimposed against them.
  • A bipartisan group in the Senate, including Senate Armed Services Committee chairman John McCain, introduced their Bill.
  • It calls for renewal of import and trade restrictions on Myanmar, including re-imposing a ban on jade and rubies from the country also known as Burma.
  • “Our legislation would hold accountable the senior military officials responsible for the slaughter and displacement of innocent men, women and children in Burma, and make clear that the United States will not stand for these atrocities,” Mr. McCain said in a statement.
  • • The tough proposals came as U.S. President Donald Trump departed for an extended trip to Asia.

U.S. discusses Maldives political turmoil with India

  • Amidst growing political turmoil in Male, a team of U.S. diplomats met senior External Affairs Ministry officials to discuss the events in the Maldives. The team, led by the U.S. Ambassador to Sri Lanka and the Maldives, AtulKeshap, shared their concerns about the political situation with Foreign Secretary S. Jaishankar and spoke about development cooperation in Sri Lanka.
  • Among the concerns on the Maldives was the crackdown by the government on Opposition leaders, most of whom are in exile facing prison terms as former President Mohammad Nasheed or are under arrest as former President Maumoon Abdul Gayoom’s son FarisMaumoon.
  • The American diplomats also said the action in Parliament in August, where the Army was called in to stop lawmakers from passing an impeachment motion against the Speaker of the Assembly, was “very discouraging”.
  • Asked about the concerns from the U.S. that called the Parliament action “disturbing and unfortunate” in a public statement, Maldives Ambassador to India Ahmed Mohamed said the allegations that the Yameen government was undemocratic were “sensational” and represented a “western double standard”.
  • The growth of Islamist radicalism was another area of concern discussed, given the fall of IS would send foreign fighters back to their countries of origin. Nearly 200 Maldivians are estimated to have travelled to Iraq and Syria, and the Maldives, with a population of just 4 lakhs, is believed to be among the countries worst affected by IS radicalisation.
  • The U.S. diplomats also brought up the growing influence of Chinese investment, as well as its maritime presence, with the China-Maldives “friendship bridge” from Male to Hulhumale, an island being developed by Chinese companies, becoming the focus of their attention.
  • The Ministry refused to comment about whether India shared the concerns the U.S. team expressed, but a senior official confirmed the meetings in Delhi.
  • While India has not made any public statements on the situation in the Maldives in the recent past, Prime Minister Narendra Modi, who cancelled his visit to Male abruptly in March 2015, has not yet rescheduled the visit, indicating that tensions between the two countries still prevail.
  • In August, days after the Parliament crisis, former President Nasheed visited India and met officials here, seen as a signal of India’s displeasure to Male.

Climate change is due to human activity

  • The United States government released a major scientific report that says climate change is “extremely likely” to be caused by human activity and will get worse without major cuts to carbon emissions.
  • The findings of the federally mandated report were approved by the White House, even though they are starkly at odds with the position of President Donald Trump, who has labelled global warming a Chinese hoax and named fossil fuel ally Scott Pruitt to head the Environmental Protection Agency.
  • The Climate Science Special Report spans more than 600 pages and is part of a larger report known as the Fourth National Climate Assessment, which is being issued in draft form for public comment.
  • Based on “a large body of scientific, peer-reviewed research,” global annually averaged surface air temperature has increased by about 1.8 Fahrenheit (1 degree Celsius) over the last 115 years (1901-2016), it says.
  • “This period is now the warmest in the history of modern civilization,” said the report, available at science2017.globalchange.gov .
  • Since the last report of its kind was issued in 2014, “stronger evidence has emerged for continuing, rapid, human-caused warming of the global atmosphere and ocean,” the text said.

::SCIENCE AND TECHNOLOGY::

Western Ghats are hotspots of rattan or cane

  • Scientists have discovered that non-protected areas near the Agastyamalai Biosphere Reserve, Silent Valley-Mukurthi National Parks and Coorg-Wayanad in the Western Ghats are hotspots of rattan or cane (light, flexible climbing palms) species.
  • Urgent conservation attention in the face of threats including habitat loss and excessive harvesting would be critical here, warns a study published in Plant Diversity.
  • Using location records from field studies and literature, scientists at Bengaluru’s Asoka Trust for Ecology and Environment (ATREE) and Pune's Indian Institute for Science Education and Research (IISER) first mapped the distribution of all 21 endemic rattan species across the Western Ghats. At 19, the Western Ghats in Kerala and Tamil Nadu have the highest number of species.
  • The team then designated ‘conservation values’ (CV) for each species based on aspects such as the area it is found in and the commercial harvesting pressure it faces. Three species showed very high CV; the authors suggest that these be classified as endangered while three others be categorised as near-threatened and 15 as vulnerable for prioritising conservation action.
  • Utilising niche modelling to predict areas of high rattan diversity, the scientists also identified three rattan hotspots in the Western Ghats. All these areas fall outside existing protected area networks, where excessive unsustainable harvests could be a problem. Loss of tropical forest tracts to coffee and tea plantations — as is common in the Coorg-Wayanad complex — is also an issue, say the scientists.
  • “Forest department managers need to encourage farmers to establish large-scale plantations in private lands and develop agro-forestry systems as well,” says co-author Aravind N.A. (ATREE). “The Forest Department has already established a few rattan plantations in some districts... this needs to be replicated at a wider scale where the demand for rattan is high,” says ATREE's G. Ravikanth, another co-author.

::BUSINESS AND ECONOMY::

ITC plans afforestation

  • ITC is exploring the possibility of using land around temples, the railways and national highways in order to expand its afforestation programme. These lands would not be owned byITC.
  • ITC is already partnering the National Highway Authority of India for implementing the National Green Highways Mission, which envisages roadside plantations along 1 lakh km of national highways.
  • A pilot project is under way to plant trees along highways NH44 and NH40, totalling about 500 acres. There is also scope for using degraded forest lands, according to Mr. Singh.
  • This fibre-security initiative is part of ITC’s four-pronged strategy to stay ahead in the intensely competitive business of paper and paperboards. It has four paper-making units including an integrated unit. Three units are in Andhra Pradesh and Telangana and one in West Bengal.
  • ITC’s pulpwood requirement is largely sourced from plantations under its social and farm-forestry programmes. It enables import-substitution, creates farmers’ livelihoods and rejuvenates the environment through carbon sequestration, Mr. Singh said. The farmers can sell the wood fibre to anyone.
  • Under this afforestation programme, ITC has ‘greened’ more than 6.2 lakh acres in Telangana, Andhra Pradesh and Odisha, a state it has entered recently. “We need an additional 60,000-80,000 acres,” Mr. Singh said. “This initiative has generated 113 million mandays of employment” chairman Y.C. Deveshwar had said at the last annual general meeting.
  • ITC encourages mainly tribal and marginalised farmers to take up forestry programmes close to its factories, to supply wood.
  • Mr. Singh said that while it took about four years to grow a full tree, wood is taken in a manner such that it can be “harvested from each tree for 15 years before a new one is required to be planted.” Mr. Singh said that ITC used inputs from its R&D unit to develop and supply to the farmers high-quality, disease-resistant seedlings to increase yields.
  • The paper division’s product range includes cigarette tissues, FMCG cartons, electrical insulation papers, decorative laminate base and writing and printing papers. In paper boards, its products range from 100% virgin food-grade boards to recycled boards. Together, the division’s four units have a 7 lakh tonne capacity.
  • For the second quarter, this division clocked an 18% growth in profits at Rs. 274.2 crore although turnover was hit by subdued demand in the FMCG and legal cigarette industries as well as due to zero-duty imports under Free Trade Agreements with ASEAN countries and imports from China, the company had said.

Bank recap is necessary but not sufficient condition

  • Bank recapitalisation is a necessary but not sufficient condition for turning around the health of banks, said former Reserve Bank of India Deputy Governor H.R. Khan.
  • “While there is no harm in recapitalising public sector banks, the full features of the move are being awaited,” he said, while speaking at the Conclave on Mapping Financial Market with the Future Economy.
  • SBI deputy managing director NeerajVyas said that consolidation would happen in the banking industry and ‘everybody’ was ‘bullish’ on the move. “If you set aside 50% of the capital infusion for provisions, the rest could go towards giving the bank balance sheets a fillip,” he said, adding a positive sentiment had been created, which will reflect in the health of banks as well as future credit growth.
  • To a query on SBI’s expectation from the capital infusion, Mr. Vyas said while SBI was a healthy bank, it was up to the government to decide on this.
  • He said post SBI family merger, the bank was now one-quarter of the Indian banking industry and among the world’s 50 largest banks.
  • He said financial inclusion had brought 28 crore new accounts into the system, of which 13 crore were in SBI.

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