Daily Current Affairs

Prelims Prominence - June 7, 2018


First-ever quantitative assessment of nitrogen pollution in India

Enlighten about the assessment

  • Nitrogen particles make up the largest fraction of PM2.5
  • The burning of crop residue contributes over 240 million kg of nitrogen oxides (NOx: a generic term for the nitrogen oxides that are most relevant for air pollution, namely nitric oxide and nitrogen dioxide) and about 7 million kg of nitrous oxide (N2O) a year.
  • The Indian Nitrogen Assessment assesses the sources, impacts, trends and future scenarios of reactive nitrogen in the Indian environment
  • Agriculture remains the largest contributor to nitrogen emissions,also the non-agricultural emissions of nitrogen oxides and nitrous oxide are growing rapidly
  • Indian NOx emissions grew at 52% from 1991 to 2001 and 69% from 2001 to 2011.
  • Nitrogen is one of the main inputs for agriculture as a fertilizer, but inefficiencies along the food chain mean about 80% of nitrogen is wasted, contributing to air and water pollution plus greenhouse gas emissions
  • Agricultural soils contributed to over 70% of N2O emissions from India in 2010, followed by waste water (12%) and residential and commercial activities (6%). Since 2002, N2O has replaced methane as the second largest Greenhouse Gas (GHG) from Indian agriculture.

Ammonia emission

  • Cattle account for 80% of the ammonia production, though their annual growth rate is 1%, due to a stable population.
  • India is globally the biggest source of ammonia emission, nearly double that of NOx emissions.
  • But at the current rate of growth, NOx emissions will exceed ammonia emissions and touch 8.8 tonnes by 2055, the report says.


Second Bi -Monthly Monetary Policy Review

  • The Monetary Policy Committee (MPC) of RBI has decided to hike Repo (short term lending rate) to 6.25% from 6.00%.

Enlighten about the second Bi-monthly Monetary Policy Statement

The current policy rates of RBI

  • Repo Rate: 6.25%
  • Reverse Repo Rate: 6.00%
  • Marginal Standing Facility (MSF) Rate: 6.50%

The recent rise of 25 basis points in key policy rates is for the first time in four and half years since NDA government was formed in May, 2014.

Enlighten about the terms

Repo Rate

  • Repo rate, or repurchase rate, is the rate at which RBI lends to banks for short periods.
  • This is done by RBI buying government bonds from banks with an agreement to sell them back at a fixed rate.
  • When RBI increases Repo Rate, the banks can borrow less at a lower cost and thus need to lend at higher rates. This contributes to hike of the interest rates in markets. When RBI increases the repo rate, the move is generally called a tight monetary policy stance.

Reverse Repo Rate

  • Reverse repo rate is the rate of interest at which the RBI borrows funds from other banks in the short term.
  • This is done by RBI selling government bonds / securities to banks with the commitment to buy them back at a future date.
  • The banks use the reverse repo facility to deposit their short-term excess funds with the RBI and earn interest on it.
  • RBI can reduce liquidity in the banking system by increasing the rate at which it borrows from banks.
  • Hiking the repo and reverse repo rate ends up reducing the liquidity and pushes up interest rates.
  • When the RBI increases the Reverse Repo, it means that now the RBI will provide extra interest on the money which it borrows from the banks. An increase in reverse repo rate means that banks earn higher returns by lending to RBI. This indicates a hike in the deposit rates.

Marginal Standing Facility

  • Marginal Standing Facility is a new Liquidity Adjustment Facility (LAF) window created by Reserve Bank of India in 2011.
  • MSF is the rate at which the banks are able to borrow overnight funds from RBI against the approved government securities.
  • The rate of interest on MSF is above 100 bps above the Repo Rate.
  • The banks can borrow up to 1 percent of their net demand and time liabilities (NDTL) from this facility.

Enlighten about Monetary Policy Committee

  • The Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016, to provide for a statutory and institutionalised framework for a Monetary Policy Committee, for maintaining price stability, while keeping in mind the objective of growth.
  • The Monetary Policy Committee would be entrusted with the task of fixing the benchmark policy rate (repo rate) required to contain inflation within the specified target level.

- Inflation Target: Four per cent.
- Upper tolerance level: Six per cent.
- Lower tolerance level: Two per cent.

  • As per the provisions of the RBI Act, out of the six Members of Monetary Policy Committee, three Members will be from the RBI and the other three Members of MPC will be appointed by the Central Government.
  • The Members of the Monetary Policy Committee appointed by the Central Government shall hold office for a period of four years, with immediate effect or until further orders, whichever is earlier.

International Organisations

BRICS ministerial meeting + India-Brazil-South-Africa (IBSA) summit held in Pretoria.

Enlighten about IBSA Summit

  • Organisation of Ministerial Summit between external affairs minister of India. Brazil and South Africa was organized in Pretoria, South Africa.
  • This ministerial summit chaired by India’s External Affairs Minister Sushma Swaraj

IBSA Declaration on SouthSouth Cooperation

  • The outcome of this meeting was a document titled IBSA Declaration on SouthSouth Cooperation.
  • It calls for contribution of each of the member of IBSA forum to contribute to greater understanding of development cooperation as a common endeavour of the global South.
  • Discussions were held regarding various multilateral missions to be pursued as part of Buenos Aires Plan of Action (BAPA+40) events.
  • South Africa and Brazil expressed their gratitude towards India for hosting this meeting.
  • Later on 28 September, 9th IBSA ministerial commission meeting is scheduled to be held in New York on the margins of 73rd United Nations General Assembly session.

Enlighten About IBSA

  • IBSA Dialogue Forum, comprising India, Brazil, South Africa, is a tripartite group which supports promotion of cooperation in various fields

Enlighten about its objectives

  • To promote South-South cooperation by making an important axis between three important countries of three continents viz. India, Africa and South America.
  • To build consensus on issues of international importance such as UN and UNSC reforms and reforms in Brettonwoods Organizations.
  • To increase trade / exchange of information opportunities between the three countries and their efforts in international poverty alleviation and social development.
  • IBSA was established in 2003 via Brasilia Declaration by external affairs ministers of India, Brazil and South Africa

Cabinet Decisions

8500 Crore bailout package for Sugar Industry Approved by Cabinet

Enlighten about some Sugar statics

  • Sugar production - India is world’s second largest sugar producer after Brazil
  • UP is India’s top sugar producing state, Maharashtra is on number 2 in production of both sugarcane as well as sugar.

Problem of Sugar Mills

  • The bumper harvest of sugarcane has created problem of plenty for already troubled cane farmers, sugar mills as well as governments at centre and state.
  • The sugar mills need to buy cane from farmers at state advised price (SAP) but have to sell their produce at either marginal cost above production or in loss.
  • Thus, higher price purchase of sugarcane but low price sale of sugar in open market creates stress on sugar mills and they are unable to make payments to farmers. This leads to accumulation of arrears.

Efforts done by the government

  • Though government decontrolled sugar industry partially in 2013 and allowed them to sell their produce in open market
  • The problem in the sugar industry that is that the price of its raw material (cane) is fixed by state and central governments as State Advised Price (SAP) and Fair andRemunerative Price (FRP) respectively.
  • The government supported cane prices are attractive to farmers, but loss due to any fall in the prices of sugar in open market has to be borne by the sugar industry.
  • Further, absence of infrastructure for ethanol production makes sure that the surplus production of sugarcane is not optimally absorbed.

What’s in the package

  • It includes Rs. 4500 crore soft loan for building ethanol production capacity and Rs. 1540-crore production-linked direct payments to cane farmers by sugar mills.
  • The government has also hiked import duty on sugar to curb the problem of plenty. Government has also decided to create some kind of stock of sugar.

Health Sector

Maternal mortality ratio- Drops to 130 from 167 Kerala has the lowest MMR of 46, followed by Maharashtra with 61 and Tamil Nadu 66

  • The latest Sample Registration System (SRS) data indicating the Maternal Mortality Ratio (MMR) has brought glad tidings.
  • As per the data, the MMR (number of maternal deaths per 1,00,000 live births) has dropped from 167 (in 2011-2013, the last SRS period) to 130 for the country.
  • This 28% drop is an achievement arising from painstakingly reducing the MMR in each of the States.

Bifurcation of states for SRS

The SRS segments States into three groups:

  • Empowered Action Group”(EAG) — Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Odisha, Rajasthan, Uttar Pradesh/Uttarakhand and Assam.
  • Southern States — Andhra Pradesh, Telangana, Karnataka, Kerala and Tamil Nadu; and
  • Others— the remaining States and union territories.

Enlighten about SRS Statics

  • The highest reduction from the last SRS is with the EAG States at 23%, a drop from 246 (2011-2013) to 188, while the Other States have dropped by 19%, taking the MMR down from 115 in 2011-2013, to 93 now.
  • Southern States, which are at a better average of 77, dropped 17%. Truly encouraging is the massive drop of 29% in Uttar Pradesh/Uttarakhand where the MMR has dropped from 285 to 201.
  • Kerala remains at the top with an MMR of 46 (down from 61).
  • Maharashtra retains its second position with 61, but the pace of fall has been much lower, dropping from 68 during 2011-13. Tamil Nadu with 66 (79) is in the third position.
  • Three States have already achieved the UN’s Sustainable Development Goal of MMR 70.”

Sources – The Hindu, LiveMint, PIB