14 June 2023

DAILY CURRENT AFFAIRS ANALYSIS

1 – Sagar Samridhi: GS III – Infrastructure related issues:

Context:

• ‘SAGAR SAMRIDDHI’ was just introduced by the government.

Key information:

• It is a method for online dredging monitoring.

Aim:

• to quicken the government’s “Waste to Wealth” initiative.

Who created it?

• The National Technology Centre for Ports, Waterways and Coasts (NTCPWC), the technology division of the Ministry of Ports, Shipping, and Waterways, designed this system.

Important characteristics:

• Comparing the new technology to the outdated Draught & Loading Monitor (DLM) system reveals a significant improvement.
• The system will increase the efficiency of various input reports.

The monitoring system known as “Sagar Samriddhi” will enable:

• Visualisation of daily and monthly development.
• Monitoring of downtime and dredger performance.
• simple position tracking information that includes a snapshot of loading, unloading, and idle time.

Significance:

• 100 million cubic metres of maintenance dredging are performed annually at Major Ports and Waterways, costing the Ports and IWAI around Rs. 1000 crores annually.
• The cost of dredging will significantly decrease with the application of the dredging standards and the use of the Sagar Samriddhi, an online dredge monitoring system, as well as increase system transparency and efficiency.

Source The Hindu

2 – First Loss Default Guarantee: GS III – Indian Economy

Context:

• Default loss guarantee (DLG), a safety-net agreement between banks, non-banking finance businesses, and lending service providers (LSPs, also known as fintech players), has been approved by the Reserve Bank of India (RBI) for use in the digital lending market.

An FLDG setup is what?

• DLG is often referred to as FLDG, or First Loss Default Guarantee.
• A FLDG is a contract that pays lenders in the event of a borrower default through the assistance of a third party, such as a financial technology (fintech) participant (LSP).

Significance:

• A specific number of credit-enhancing elements, such as a first loss guarantee, are offered by the LSP for loans that it generates.
• Offering FLDG, in the eyes of fintechs, serves as an example of its underwriting prowess.
• It guarantees the platform’s skin in the game from the lender’s point of view.
• The LSP assumes credit risk without being required to keep any regulatory capital.
• The loan portfolio backed by FLDG is comparable to the LSP’s off-balance sheet portfolio, where the nominal loans are held in the lender’s accounts without undergoing any lending procedures.
• This would make it easier for small and medium-sized fintech companies to enter the digital lending market through joint ventures with banks or NBFCs.

What is an LSP’s role?

• Modern players who employ technological platforms in the loan industry are known as lending service providers.

They are representatives of a bank or NBFC who perform (in whole or in part) one or more of a lender’s duties in:

• acquisition of customers.
• supporting underwriting.
• Pricing assistance.
• a specific debt or loan portfolio being recovered.
• According to the 2013 Companies Act, the LSP-providing DLG must be incorporated as a business.
• Only cash deposits, fixed deposits in a bank with a lien in favour of the regulated firms, or bank guarantees in favour of the regulated entities are acceptable guarantees for digital lending, according to the RBI.
• Any outstanding portfolio of loans should have no more than 5% of its overall value covered by DLGs, according to banks and NBFCs.

Source The Hindu

3 – The Politics and Economics of MSP: GS III – Indian Agriculture:

Context:

• The MSPs (minimum support prices) for 17 crops in this year’s Kharif season were just released by the Union government.

Key information:

• MSPs are extremely important, not just for Indian farmers and the agricultural sector, but also for Indian consumers and the pricing of the food they purchase.
• Because of this, MSP announcements are closely scrutinised and frequently highly politicised.
• Apart from their economic effects, the MSP announcements could have a significant political influence.

What do MSPs do?

• MSPs are “support prices” that the government has announced (and occasionally state governments also include a bonus amount to them).
• They were announced with the intention of giving farmers a safety net.

The necessity and importance of MSP:

• The severe absence of cold storage and warehousing in India means that a farmer has limited negotiating power.
• The farmer and their families risk devastation if market prices fall below their cost of production.
• This kind of widespread distress frequently has additional, wider effects.
• Farmers might decide not to cultivate cotton the following season, for instance, if it caused the bankruptcy of many farmers.
• The result will be a decrease in supply and an increase in price.
• The government promises that it will purchase from farmers at the declared rates by establishing MSPs (a practise known as procurement).
• The idea behind MSPs is that they will prevent farmers from going bankrupt since they are calculated in a way that covers the essential costs of agriculture.
• The other major function of MSPs is to give policymakers a tool with which to modify the production pattern.
• The MSP for pulses can be increased considerably more than the MSP for paddy if the government intends to encourage the cultivation of pulses rather than paddy (rice).

Do all crops genuinely get purchased by the government at MSPs?

• While the government publishes MSPs for a wide variety of crops throughout both the Rabi (winter) and Kharif (summer) seasons, it only purchases a small number of those products, and even then, only from a small number of states.
• Only a small number of Kharif crops profit from government purchases.
• While over 45% of the world’s paddy production is purchased at MSP, only about 25% of cotton and barely 1% to 3% of pulses are.

There are only a few states where the procurement is concentrated:

• Paddy is grown in Telangana, Punjab, Haryana, western Uttar Pradesh, and Chhattisgarh.
• For cotton, Telangana and Maharashtra.
• For pulses, look to Maharashtra and Karnataka.
• Political and economic implications of MSP announcements:

Political factors:

• The agricultural economy of India doesn’t actually follow the rules of the market.
• That is partially due to the fact that national food security is a strategic concern.
• It seems improbable that farming will turn out to be profitable if a significant portion of the population is engaged in it, as is the case in India.
• But when the government gets involved, everything becomes political.
• As elections draw nearer, it is normal for governments to declare high MSPs in an effort to sway the farmer vote.

Economic factors:

• MSPs’ economic benefits extend beyond just farmers.
• Even while agricultural suffering is lessened by a sharp increase in MSPs (or by higher MSPs over time), this might also cause a jump in food inflation.
• Making decisions about MSPs is challenging because there is a trade-off between the interests of consumers and farmers.
• The political component only makes things more difficult.

How does the most recent increase stack up against the rate of food inflation and the rise in production costs?

• Cereal costs increased by about 14% this year.
• The MSP increase is minimal.
• According to the Citi Research note, the cost of cultivation increased by 6.8%; therefore, a 7% increase in MSPs would be sufficient to prevent the agricultural economy from falling behind the non-farm industry.

Impact of increases on monetary policy and inflation:

• It’s unlikely that this increase alone would cause inflation to rise.
• If El Nino has an impact on the regular monsoon, food inflation could still rise.

Financial impact on the government:

• The storage and distribution of foodgrains with subsidies, higher MSPs, and increased procurement costs all put a strain on the government’s finances.
• This MSP rise won’t have a significant impact on the government’s budgeting for food subsidies.

Impact on India’s rural areas:

• The largest contributor to India’s GDP, personal consumption growth, was expanding at a rate of about 2.5% over the previous two quarters, according to the most recent GDP data.
• This is far less than India’s 7.2% overall GDP growth rate.
• India’s rural economy lags behind its metropolitan counterpart.
• GDP consumption growth patterns have been sluggish, and rural consumption drivers continue to be inequitable.
• The 7% MSP hike may just be sufficient to offset the rise in production costs, but it does not portend a populist uptick in rural consumption.

Source The Hindu

4 – Amarnath Yatra: GS I – Indian Culture

Context:

• The security measures for the annual Amarnath Yatra that takes place in Jammu and Kashmir were reviewed by the Union Home Minister.

Amarnath Yatra:

• One of the most famous pilgrimages in the nation is the Amarnath Yatra, an annual journey to the cave shrine of Lord Shiva located high in the Himalayas.
• The Yatra’s official start date, however, is undocumented.
• The cave is only accessible on foot or by pony and is located 3,888 metres above sea level.

Legends around its beginning:

• Legend has it that Lord Shiva picked the Amarnath cave in South Kashmir’s Himalayas when he wished to reveal to Parvati the meaning of his immortality (Amar Katha).
• Legend has it that Buta Malik, a Muslim shepherd, found the cave in 1850.
• The Buta Malik family, along with Hindu priests from the Dashnami Akhara and Purohit Sabha Mattan, continued to serve as the shrine’s official custodians.
• Amarnath became a representation of Kashmir’s long-standing interfaith unity and diverse culture as a result of this unusual confluence of faiths.
• Malik’s family and the Hindu organisations were forced to leave after the Shri Amarnathji Shrine Board, presided over by the Governor, was established in 2000.
• This simplified the Yatra but eliminated one of its most distinctive elements.
• A trickle of water from a crack in the cave roof forms the ice lingam, which represents Lord Shiva.
• As it drips, the water freezes, eventually growing into a towering, smooth ice stalagmite.
• Every year in May, the Shiva lingam takes on its final form before starting to melt.
• Two smaller ice stalagmites to the left of the Shiva lingam stand in for Parvati and Lord Ganesh.

Source The Hindu

5 – Tech can change Agri Landscape: GS III – Indian Agriculture:

Context:

• India’s agriculture is being swiftly reshaped by technology, which is also making business opportunities, uplifting rural communities, feeding the world, and making India a farming powerhouse.

The agricultural sector is important for India:

• Following independence, agriculture dominated the economy and contributed more than half of the country’s GDP.
• More than 20% of India’s GDP still comes from its food production, which is among the largest and most diverse in the world.
• However, there are serious issues preventing the country from reaching its full potential.
• If the problems were resolved, a thriving agriculture sector would help the economy while also vastly enhancing the lives and earnings of farmers.
• A 50% rise from its contribution in 2020, agriculture could contribute approximately Rs 4,92,000 billion to India’s GDP by 2030.

Agri-technology’s function:

• Agriculture technology, which lags behind that of established farming nations, is the key to accelerating India’s transformation into a farming superpower.

Issues facing farmers:

• 50% lack the most basic farming tools.
• Crop damage from pests and weather is a concern for three out of every four farms.
• In India, 50% of farmers lack access to conventional funding and marketing channels.
• For those who are able to obtain informal credit, high interest rates of 10% to 25% above market rates are frequently paid.

Agricultural technology use:

• Solutions are starting to focus more on farmers.
• The farmer is the primary objective of any value chain component that is going digital, whether it is banking, inputs, or another area.
• More than 2000 agritech firms will be founded in India between 2014 and 2023, driven by:
• raised awareness among farmers.
• increasing use of the internet.
• the agriculture industry needs to be more efficient.
• Direct-to-farmer (D2F) sales channels are being developed by agricultural supply companies employing technology to cut out retailers and middlemen.
• Technology is being used by banks and non-banks to develop products that are more specifically aimed at farmers and to lower credit risks.
• For instance, SBI created the YONO Krishi app to address the financial, input, and advice needs of farmers.
• Farmers are now getting mechanisation services from companies that offer agricultural equipment.
• Businesses engaged in the buying, processing, and selling of agricultural products have begun to link their markets and integrate their supply chains backward.
• Over the past few years, direct-from-farm procurement has grown inside the E-Choupal network.

Moving ahead:

• The Indian economy might gain more than Rs 98,380 crore thanks to the agri-technology ecosystem, which could also help farmers’ earnings increase by 25 to 35% in India.
• decrease in input costs.
• increased effectiveness.
• Realisation of price.
• lower credit costs.
• other sources of income.

The following agricultural sectors should be supported by policy measures that the government should take:

• a wider internet audience thanks to farmer collectivization.
• the creation of the agristack.
• digital cards for soil health.
• Transfer of benefits directly enabled by technology.
• E-NAM.
• digital framework.
• credit and marketing are related.
• expectations of investors.
• Digital technologies have the potential to improve production at every stage, from top-notch agricultural outputs to high-quality inputs.
• This might improve rural economies, foster sustainable growth for farmers, and strengthen the overall economy.

Source The Hindu

6 – Akhand Bharat: GS I – Indian Culture

Context:

• The map of ancient India is depicted on a fresco in the recently constructed Parliament building.

Key information:

• The painting shows a unified India (Akhand Bharat), whose geographical region encompasses the modern-day nations of Bangladesh, Afghanistan, Myanmar, Pakistan, Maldives, and Sri Lanka.
• Pakistan, Nepal, and Bangladesh—three of India’s neighbors—have voiced opposition to the artwork.
• The ancient Ashokan Empire is depicted on the map, according to the Indian government.
• Both the Ashoka sculpture and the accompanying Ashokan rock edict are from Sannati in Kalburgi, both in Karnataka. The Ashoka rock edict is from Maski in Raichur.

The decree of Maski:

• Karnataka’s Maski is both a town and an ancient location.
• It is situated along the banks of the Tungabhadra’s tributary river, the Maski.
• The location gained notoriety when C. found a little rock inscription from Emperor Ashoka. In 1915, Beadon.
• The name Ashoka was used for the first time in an edict by Emperor Ashoka; prior edicts had referred to him as Devanampiye piyadasi.
• All of the Devanampiye piyadasi edicts that were previously discovered in the Indian subcontinent belonged to Emperor Ashoka.
• The edict is inscribed on the rock face of Durgada-gudda, one of the site’s gneissic outcrops.

Ashoka’s Sannati sculpture:

• Sannati, a small community in Kalaburagi, Karnataka, by the Bhima River.
• After the roof of the Kali temple in the Chandralamba temple complex collapsed in 1986, it gained notoriety.
• The temple’s foundations were discovered during the collapse to contain historically significant Ashokan edicts inscribed in Prakrit and Brahmi script.
• It resulted in the discovery of Kanaganahalli’s majestic Maha Stupa, also known in the inscriptions as Adholoka Maha-Chaitya (The Great Stupa of the Netherworlds), which was a magnificent structure.
• More notably, archaeologists also uncovered a sculpture-portrait of Ashoka seated on his throne with his queens.
• The stupa was the site of the first Emperor Ashoka engraved portrait, known as Raya Ashoka.
• His excursions into South India have also been clarified by it.
• Despite the fact that Ashoka’s kingdom reached far towards the south, there is still no conclusive evidence of Ashoka’s stay in this region.

Source The Hindu