September 2019

Daily Current Affairs (05-09-19)

POLAVARAM HYDRO ELECTRIC PROJECT

Related Topics: Infrastructure Development, Multipurpose Irrigation Projects

News

Andhra Pradesh Cabinet has ratified the preclosure of the Polavaram Hydro Electric Project (PHEP) contract that was awarded to Navayuga Engineering Company Limited (NECL) for nearly Rs. 3217 crore and gave its nod for reverse tendering.

About the Project

  • It is a multipurpose irrigation project across Godavari River in West Godavari district with its reservoirs spreading across states of Chhattisgarh and Orissa as well.
  • The project endeavours to develop irrigation, drinking water facilities and hydropower to regions of East Godavari, Vishakhapatnam, Krishna and West Godavari districts of Andhra Pradesh.
  • The project, which will interlink several rivers in Andhra Pradesh, is estimated to irrigate 75.38 lakh acres in the state.
  • It will also help supply 7.32 thousand million cubic feet (TMC) of drinking water to Visakhapatnam city and another 16.12 TMC of water for industrial purposes.
  • The project also aims to help the Rayalaseema region (comprising Anantapur, Chittoor, Kadapah and Kurnool districts out of the total 13 districts in the state) get more water.

[Source: The Hindu, Livemint]

 

PM LAGHU VYAPARI MAAN-DHAN YOJANA

Related Topics: Government Schemes & Interventions, Social Security

Why in News

Prime Minister has launched PM Laghu Vyapari Maan-dhan Yojana.

About the Scheme

  • National Pension Scheme for Traders and Self Employed Persons (PM Laghu Vyapari Maan-dhan Yojana) is a pension scheme for retailers and traders benefitting over three crore self-employed workers in the country.
  • It is a voluntary and contributory pension scheme for entry age of 18 to 40 years with a provision for minimum assured pension of Rs 3,000/- monthly on attaining the age of 60 years.
  • The scheme is an extension of the PM Shram Yogi Maan-dhan Yojana.
  • Government has earmarked Rs 750 crore for the scheme in the Union Budget 2019-20.

Contribution

  • The Central Government shall give 50 % share of the monthly contribution and remaining 50% contribution shall be made by the beneficiary.
  • The monthly contribution is kept low to make it affordable. For example, a beneficiary is required to contribute as little as Rs.100/- per month at a median entry age of 29 years.

Who is Eligible?

  • The provisions of this scheme shall apply to the laghu vyaparis, who are self-employed and working as shop owners, retail traders, rice mill owners, oil mill owners, workshop owners, commission agents, brokers of real estate, owners of small hotels, restaurants and other laghu vyaparis
  • All shopkeepers and self-employed persons, as well as retail traders with GST turnover below Rs 1.5 crore and aged between 18-40 years, can enrol for the scheme.
  • The beneficiary should not be income tax payer.
  • The beneficiary should not be a member of EPFO/ESIC/NPS (Govt.) / PM-SYM.
[Source: The Hindu]

 

VULNERABILITY AND RESILIENCE OF INDIA TO CLIMATE CHANGE

Related Topics: Environment & Biodiversity, Climate Change

Context

  • HSBC’s 2018 Assessment categorised India as the country which is most vulnerable to climate change.
  • Even after repeated scientific warnings, carbon emissions continue to rise in China, the U.S. and India, three of the biggest emitters.

Growth vs Environment

  • Brazil, under its President Jair Bolsonaro, is encouraging unprecedented deforestation of Amazon rainforest under the false pretext of promoting economic growth.
  • Majority of the countries including U.S. and India are also mistakenly thinking that slashing environmental regulations would raise economic growth.
  • Cutting hurdles to investment can boost short term growth and benefit interest groups.
  • But, damaging the environment in this way would be self defeating in today’s fragile ecology, as it would impact long term growth and well-being.

Indian Scenario

  • A number of Indian States have experienced extreme heatwaves in the past three years.
  • Delhi, recently recorded a temperature of 48oC, the hottest day in 21 years.
  • India’s exposure to climate hazards is heightened by the location of its vast coastline in the eye of the storm, across the Indian Ocean, Bay of Bengal and the Arabian Sea.
  • These regions also have a high population density.
  • For instance, Kerala which experienced intense floods and landslides in 2018 and 2019, is among the states with highest population density.
  • How badly this exposure will affect lives and livelihoods will depend both on the degrees of vulnerability and resilience to climate change.
  • Increasing temperatures and changing seasonal rainfall patterns are aggravating droughts and hurting agriculture across the country.
  • These events will become more damaging when infrastructure is not resilient.

Building Resilience

  • India is not doing enough to boost its coastal and inland defences to counter the harmful impacts of climate hazards.
  • There is a need to do more to build resilience in the sectors of agriculture, fisheries, manufacturing, energy, transport, health, and education.
  • The priority for spending at the national and state levels for disaster management needs to rise.
  • Adequate resources must also be allocated for implementing climate action plans that most states have prepared.

Why India should take the lead on climate change?

  • Climate change is contributing to prolonged, year-round droughts in parts of Asia and across the world.
  • Increasing heat and changing weather patterns are affecting production and food security in weather-dependent agricultural economies, such as India.
  • In 2017, India experienced over 75 billion total hours of labour lost due to intense heat.
  • This is 48.8% of the total global loss and 7% of India’s total working population.
  • India should be alarmed at ecological destruction even in faraway places like Amazon.
  • As forest fires worsen global warming, the hardest hit by the resulting floods, storms, heatwaves and droughts will be in India.
  • As the country that is most at risk for climate damage, it should lead in pressing the global community to take sweeping climate action.

Way Forward

  • As the sixth largest economy in the world, India’s need for further economic growth is clear.
  • This development will be most effective when coordinated with sustainability and climate action.
  • India must reinforce its infrastructure and adapt its agriculture and Industry.
  • It also needs to replace urgently its fossil fuels with renewable energy.

[Source: The Hindu, Hindustan Times, Reuters]

 

EXTERNAL BENCHMARK-BASED LENDING

Related Topics:  Economy & Banking

News

  • RBI has issued a circular making it mandatory for banks to link all new floating rate personal or retail loans and floating rate loans to MSMEs to an external benchmark effective October 1, 2019.
  • The discussion was kicked off in August 2017, when RBI constituted an Internal Study Group (ISG) to examine the efficacy of the MCLR system, which reported that the system did not allow for effective transmission of rate cuts to customers.
  • Even before RBI had made it mandatory, several banks, including State Bank of India, Bank of Baroda and Oriental Bank of Commerce had launched repo-linked lending rate products.

Why making External benchmark mandatory?

  • By pegging the rate to an external benchmark, RBI is hoping for a faster transmission of rate cuts than has happened so far under the MCLR system.
  • Banks have been reluctant to cut interest rates despite the RBI lowering the repo rate by 110 basis points (bps) between February 2019 and August 2019.

Present Scenario

  • At present, interest rates on loans are linked to a bank’s marginal cost of fund-based interest rate (MCLR).
  • Existing loans and credit limits linked to the MCLR, base rate or BPLR, would continue till repayment or renewal.

External Benchmark

  • Banks can choose from one of the four external benchmarks — repo rate, three-month treasury bill yield, six-month treasury bill yield or any other benchmark interest rate published by Financial Benchmarks India Private Ltd (FBIL).
  • Adoption of multiple benchmarks by the same bank is not allowed within a loan category.
  • While banks are free to decide on the spread over the external benchmark, credit risk premium can change only when borrower’s credit assessment undergoes a substantial change.
  • The interest rate under external benchmark shall be reset at least once in three months.

Transition to External Benchmark from MCLR

  • Existing borrowers who have the option of pre-paying without incurring pre-payment charges will be eligible to shift to the benchmark-linked rate without any additional charges, except reasonable administrative and legal costs.
  • For other borrowers, the option to move to an external benchmark will be available on the basis of their agreement with the bank.

About Financial Benchmarks India Private Ltd (FBIL)

  • FBIL is jointly owned by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), Foreign Exchange Dealers’ Association of India (FEDAI) and the Indian Banks’ Association (IBA).
  • It was incorporated in December 2014 under the Companies Act 2013.
  • It was recognised by Reserve bank of India as an Independent Benchmark administrator in 2015.
  • Its aim is to develop and administer benchmarks relating to money market, government securities and foreign exchange in India.
  • It also will make policies for possible cessation of any benchmark and to follow steps for ensuring orderly transition to the new benchmarks.

[Source: The Hindu, Livemint]

 

FACTS OF THE DAY

SEA ROUTE FROM CHENNAI TO VLADIVOSTOK

India and Russia have agreed to open a maritime route between the ports of Chennai and Vladivostok to ensure connectivity between the two countries. A Memorandum of Intent was signed between the Indian Ministry of Shipping and Russia’s Ministry of Transport for the development of maritime communications between the ports of Chennai and Vladivostok in Russia’s Far East Region after Prime Minister Narendra Modi’s talks with Russian President Vladimir Putin. The two leaders held the delegation-level talks at the India-Russia 20th Annual Summit after a two-hour tete-a-tete on board a ship, aimed at strengthening the special and privileged relationship between the two sides.

LUPIN’S MEK INHIBITOR COMPOUND (LNP3794)

German Pharmaceutical major Boehringer Ingelheim and India’s Lupin Ltd. have announced a licensing, development and commercialisation agreement for Lupin’s MEK inhibitor compound (LNP3794) as a potential targeted therapy for patients with difficult-to-treat cancers. The objective is to develop Lupin’s lead MEK inhibitor compound in combination with one of Boehringer Ingelheim’s innovative KRAS inhibitors for patients with gastrointestinal and lung cancers harbouring a broad range of oncogenic KRAS mutations. The collaboration has a strategic goal to focus on patients with gastrointestinal or lung cancers defined by KRAS mutations, sub-populations that currently need more effective therapeutic options.

MEGALITHIC SWORD UNEARTHED IN KERALA

Kerala State Archaeology Department has unearthed a Megalithic era iron sword, a chisel and a few decorated pottery from a rock-cut cave in Kannur district. The 105-cm sword, said to be 2,500 years old, was found during a scientific clearance at the historical site. The recovery of the implements revealed the technological advancement of the Megalithic people. Megaliths refer to large stone structures that were constructed either as burial sites or as commemorative sites.

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