Current Affair – June 5, 2021

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CURRENT AFFAIRS

Organization for the Prohibition of Chemical Weapons (OPCW)

  • The head of the international chemical weapons watchdog told the UN Security Council that its experts have investigated 77 allegations against Syria, and concluded that in 17 cases chemical weapons were likely or definitely used.
  • Organization for the Prohibition of Chemical Weapons (OPCW) will be taking up a new issue at its next consultations with Syria.

About OPCW

  • The Organization for the Prohibition of Chemical Weapons (OPCW) is the implementing body for the Chemical Weapons Convention.
  • The OPCW, with its 193 Member States, oversees the global Endeavour to permanently and verifiably eliminate chemical weapons. India is also a member of OPCW.
  • 98% of the global populations live under the protection of the Convention.
  • 98% of the chemical weapons stockpiles declared by possessor States have been verifiably destroyed.

Chemical Weapons Convention

  • The Chemical Weapons Convention entered into force on 29 April 1997.

· It is the world’s first multilateral disarmament agreement to provide for the elimination of an entire category of weapons of mass destruction within a fixed time frame.

  • The OPCW strives to fulfil the Convention’s mandate to end the development, production, stockpiling, transfer and use of chemical weapons; to prevent their re-emergence; to ensure the elimination of existing stocks of such weapons; and, in so doing, to make the world safe from the threat of chemical warfare.
Source: The Hindu

INS Sandhyak

  • Hydrographic survey ship INS Sandhayak, the first of its class indigenously designed and built, was decom-

missioned after 40 years of service.

  • The construction began at Garden Reach Ship Builders Limited (GRSE) Kolkata (then Calcutta) by laying the keel in 1978. The ship was commissioned into the Navy on February 26, 1981.
  • Since commissioning, the ship has been the alma mater, nurturing the hydrographers of the Navy and laying the foundation for a complete hydrographic coverage of the peninsular waters.

Participation in Operations

  • Op Pawan (assisting the Indian Peace Keeping Force in Sri Lanka in 1987)
  • Op Sarong, and Op Rainbow (rendering humanitarian assistance post 2004 Tsunami)
  • Maiden joint Indus HADR Exercise ‘Tiger Triumph’.
Source: The Hindu

Urban cooperative banks under RBI

  • During a meeting of National Congress Party (NCP) approved a plan to set up a task force to prepare an action plan against a recent change in the law that has brought cooperative banks under the supervision of the Reserve Bank of India (RBI).
  • Almost a third of India’s 1,500-plus urban cooperative banks are in Maharashtra — the state has 497 operational urban cooperative banks and 31 district central cooperative banks, with total deposits of Rs 2.93 lakh crore.
  • A large number of these banks are controlled by NCP leaders. The new law brings them under the direct regulation of the RBI, which will increase their accountability and put them under scrutiny that they have so far escaped.

How has The Banking Regulation Act been amended?

  • Cooperative banks have long been under dual regulation by the state Registrar of Societies and the RBI. As a result, these banks have escaped scrutiny despite failures and frauds.

· The changes to The Banking Regulation Act approved by Parliament in September 2020, brought cooperative banks under the direct supervision of the RBI.

  • The amended law has given RBI the power to supersede the board of directors of cooperative banks after consultations with the concerned state government. Earlier, it could issue such directions only to multi-state cooperative banks.

· Urban cooperative banks will now be treated on a par with commercial banks.

  • And a cooperative bank can, with prior approval of the RBI, issue equity shares, preference shares, or special shares to its members or to any other person residing within its area of operation, by way of public issue or private placements.
  • It can also issue unsecured debentures or bonds with maturity of not less than 10 years. This essentially means non- members can become shareholders of the bank, and this will allow the RBI to merge failing banks quickly.

What triggered the need for the changes in the law?

  • India has some 1,540 urban cooperative banks, with a depositor base of 8.6 crore and deposits of at least Rs 5 lakh crore.
  • The financial status of at least 277 urban cooperative banks was weak, and around 105 cooperative banks were unable to meet the minimum regulatory capital requirement.

· The net worth of 47 banks was in the negative.

  • According to RBI’s latest financial stability report, the gross non-performing asset ratio of urban cooperative banks deteriorated from 9.89%  in March 2020 to 10.36% in September 2020.
  • High levels of bad loans
  • Small capital base of these banks
  • Political interference in staff appointments is also a problem with these banks, which has added to inefficiencies.
Source: Indian Express

Monetary Policy

  • The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept the key lending rate (repo rate), unchanged at 4% for the sixth time in a row and slashed the growth rate to 9.5% for fiscal 2021-22.
  • It also kept reverse repo rate – the RBI borrowing rate from banks — under the liquidity adjustment facility (LAF) unchanged at 3.35 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 4.25 per cent.

What prompted the central bank to hold the rates?

  • The policy panel of the RBI said the second wave of Covid-19 has altered the near-term outlook, necessitating urgent policy interventions, active monitoring and further timely measures to prevent emergence of supply chain bottlenecks and build-up of retail margins. Policy support from all sides – fiscal, monetary and sectoral – is required to nurture recovery and expedite return to normalcy.
  • Accordingly, the MPC decided to retain the prevailing repo rate at 4% and continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of Covid-19 on the economy, while ensuring that inflation remains within the target going forward, the panel said.

Why has the growth rate been slashed?

  • The central bank has scaled down the FY22 gross domestic product (GDP) growth to 9.5% as against the previous projection of 10.5%.
  • Urban demand has been dented by the second wave, but adoption of new Covid-compatible occupational models by businesses for an appropriate working environment may cushion the hit to economic activity, especially in manufacturing and services sectors that are not contact intensive.
  • On the other hand, the strengthening global recovery should support the export sector.

Observation on the economy

  • MPC said the forecast of a normal south-west monsoon, the resilience of agriculture and the farm economy, the adoption of Covid compatible operational models by businesses, and the gathering momentum of global recovery are forces that can provide tailwinds to revival of domestic economic activity when the second wave abates.
  • On the other hand, the spread of Covid-19 infections in rural areas and the dent on urban demand pose downside risks.

Inflation

  • The panel has projected the retail inflation at 5.1% – within the RBI’s inflation band of plus/minus 4% — during 2021- 22.

· According to the MPC, going forward, the inflation trajectory is likely to be shaped by uncertainties impinging on the upside and the downside. The rising trajectory of international commodity prices, especially of crude, together with logistics costs, pose upside risks to the inflation outlook.

  • Excise duties, cuss and taxes imposed by the Centre and States need to be adjusted in a coordinated manner to contain input cost pressures emanating from petrol and diesel prices. A normal south-west monsoon along with comfortable buffer stocks should help to keep cereal price pressures in check.
  • Recent supply side interventions are expected to ameliorate the tightness in the pulses market. Further supply side measures are needed to soften pressures on pulses and edible oil prices.

What are the RBI’s plans on the liquidity front?

  • The RBI will continue to conduct regular operations for liquidity management.
  • It has decided to conduct another operation under G-SAP (government securities acquisition programme) for purchase of G-Secs of Rs 40,000 crore on June 17, 2021.
Source: Indian Express

World Environment Day 2021

  • World Environment Day is celebrated on June 5 every year.
  • The theme for 2021’s World Environment Day — ‘Ecosystem restoration’.

Economic Restoration

  • It signifies restoring degraded or destroyed ecosystems and conserving those which are still intact and integral part of nature.
  • This is fundamental as thriving ecosystems provide services such as food, water, nutrient cycling, climate regulation, biodiversity conservation and significant sinks of greenhouse gases.

Significance of Economic restoration

As reported by United Nations Environment Programme, restoration alone can deliver a third of the mitigation by 2030 to keep global warming below 2 degrees Celsius and provide support to societies and economies to adapt to climate change.

Achieving Economic restoration

  • Ecosystem restoration can be achieved through 3 Rs: Reclamation, Revegetation and Rehabilitation’.
  • Ensure that our degraded aquatic and terrestrial ecosystem is restored as soon as possible by adopting appropriate policy and technological interventions.

· Appropriate segregation and treatment mechanism for solid waste management.

  • Remediation of contaminated sites involves cleaning the contaminated media, i.e., groundwater, surface water, and sediments, by adopting various in-situ or ex-situ clean-up technologies.

Programmers’

  • A project for remediation of 12 contaminated areas in eight states — Kerala, Madhya Pradesh, Odisha, Tamil Nadu, Uttar Pradesh, West Bengal, Rajasthan and Gujarat — having multiple sites is being executed through CPCB.
  • Capacity building programme is being implemented by the World Bank for building the knowledge base and technical know-how of the state governments to undertake site remediation work.
  • Hazardous and Other Waste Management Rules, 2016 and Solid Waste Management Rules, 2016 do mandate the state to protect and safeguard the environment and health hazards arising from improper management of waste with long- term sustainability but there are no clear management strategies defined at national to local level with respect to contaminated sites.

Way forward

  • An urgent need for policy intervention (along with technological) and guiding principles to help the pollution control authorities effectively manage contaminated sites.
  • Identification and assessment of contaminated sites
  • Need for appropriate technological intervention
  • Mechanisms for financial and technical support
  • Upgrading existing disposal facilities
  • Monitoring and compliance to restore the contaminated sites in the country which will serve the overall agenda of ecological restoration and climate change.
Source: Down-to-earth

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