News 1: Rupee slides to new low of 80.79 on Fed rate increase, stance
Background:
- The Indian rupee on Thursday weakened sharply against the dollar to a new record low in the wake of the U.S. Federal Reserve increasing interest rates by 75 basis points and signaling more such steep increases in the future.
- The rupee depreciated by 83 paise to close at 80.79, suffering its biggest single day fall since February 24, when Russia invaded Ukraine.
Reason behind the fall:
- Due to rise in dollar index, rupee and other major currencies will come under pressure
- Depreciating rupee is unattractive to foreign portfolio investors
Steps that can be taken to arrest the slide:
- Curbs on imports of non-essential goods
- Reduction in thresholds on aggregate overseas investments by resident Indians
- Mandates for exporters to quicken their remittances
- Asking importers to sell dollars directly to oil marketing companies
- Easing norms for foreign portfolio investment in debt market
- Increasing the external commercial borrowing limits under automatic route
- Temporarily abolishing interest-rate caps for banks to attract deposits from non-resident Indians.
News 2: Telecom bill moots licensing of OTT apps, dues waiver
Background:
- The government has released the draft of ‘The Indian Telecommunication Act, 2022’ wherein it has proposed several significant changes, including provisions for waiving off dues for financially stressed operators, bringing over-the-top (OTT) platforms (such as WhatsApp, Zoom, Netflix) within the ambit of telecom services that require a license to operate, and provisions for message interception in case of public emergency.
- The Bill, released late on Wednesday inviting comments from stakeholders, seeks to replace the existing framework comprising the Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950, that govern the sector.
The Indian Telecommunication bill:
- The explanatory note said the Bill aims to consolidate and amend laws governing provision, development, expansion and operation of telecom networks and infrastructure, and spectrum assignment.
- The Bill proposes a framework to address defaults in payment by a licencee, whereby under “extraordinary circumstances”, the government may allow for deferred payment, conversion of a part or all of it into shares in the licencee or even write-offs.
- The Bill also simplifies the framework for mergers, demergers and acquisitions, for which the entities would need to comply with norms under the Companies Act, 2013, and only need to inform the telecom department.
- Noting that telecom users wish to know who was calling them, the Centre said it had included provisions related to identity to help prevent cyberfrauds using telecom services.
- The draft Bill had provided clarity on two critical aspects: insolvency proceedings for stressed telecom companies and bringing OTT platforms and Internet Service Providers (ISPs) under the umbrella of the Ministry of Telecommunications.
News 3: Central govt. signs ₹1,700-cr. deal for BrahMos missiles
Background:
- The Defence Ministry on Thursday signed a ₹1,700-crore contract with BrahMos Aerospace Pvt Ltd for 35 combat and three practice BrahMos supersonic surface-to-surface cruise missiles for two P-15B class of stealth guided missile destroyers of the Indian Navy.
BrahMos missiles:
- BrahMos is a joint venture between the DRDO and Russia’s NPO Mashinostroyeniya and the missile derives its name from Brahmaputra and Moskva rivers.
- Flight range of missile: 290 km with supersonic speed all through the flight
- BrahMos is a two-stage missile with solid propellant booster engine as its first stage and liquid ramjet in second stage which takes the missile closer to 3 Mach speed in cruise phase.
- It operates on Fire and Forget principle, adopts varieties of flights on its way to the target and due to its large kinetic power n impact has increased its destructive power. It can carry a conventional warhead weighing between 200 – 300 kgs.
News 4: NCC and UNEP sign MoU on tackling plastic pollution
Background:
- The National Cadet Corps (NCC) and United Nations Environment Programme (UNEP) in New Delhi on Thursday signed a Memorandum of Understanding (MoU) to tackle the issue of plastic pollution and achieve the universal goal of clean water bodies through Puneet Sagar Abhiyan and ‘Tide Turners Plastic Challenge programme’.
- The aim is to synergise and collate efforts towards engaging youth for promoting clean water bodies.
UNEP:
- Established: 1972
- Headquarter: Nairobi, Kenya
- Members: 193
- United Nations Environment Programme (UNEP) has been the global authority that sets the environmental agenda, promotes the coherent implementation of the environmental dimension of sustainable development within the United Nations system and serves as an authoritative advocate for the global environment.
- Objective:
- UNEP works on delivering transformational change for people and nature by drilling down on the root causes of the three planetary crises of climate change, nature and biodiversity loss, and pollution and waste.
- UNEP employs seven interlinked subprogrammes for action: Climate Action, Chemicals and Pollutions Action, Nature Action, Science Policy, Environmental Governance, Finance and Economic Transformations and Digital Transformations.
- Through its campaigns, particularly World Environment Day, UNEP raises awareness and advocates for effective environmental action.
UNEP hosts the secretariats of several multilateral environmental agreements and research bodies, including
- The Convention on Biological Diversity (CBD),
- The Minamata Convention on Mercury,
- The Convention on Migratory Species and The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
In 1988, the World Meteorological Organization and UNEP established the Intergovernmental Panel on Climate Change (IPCC).
UNEP is also one of several Implementing Agencies for the Global Environment Facility (GEF) and the Multilateral Fund for the Implementation of the Montreal Protocol
News 5: What US Fed’s latest rate hike means, and what to expect in the future
Background:
- “My colleagues and I are strongly committed to bringing inflation back down to our 2% goal. We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses,” a sombre US Federal Reserve chair Jerome Powell.
- Powell also signalled a further intensification of the American central bank’s fight against runaway inflation in the coming months.
Relation between Inflation and interest rate hikes:
- Interest rate hikes are the primary monetary policy tool used by central banks to tackle sporadic spurts in inflation.
- When interest rates go up in an economy, it becomes more expensive to borrow; so households are less inclined to buy goods and services, and businesses have a disincentive to borrow funds to expand, buy equipment or invest in new projects.
- A subsequent lowering of demand for goods and services ends up depressing wages and other costs, in turn, bringing runaway inflation under control.
- Even though the linkages of monetary policy to inflation and employment are not direct or immediate, monetary policy is a key factor in tackling runaway prices.
Impact across markets:
- The Fed’s primary tool of monetary policy is the federal funds rate, changes in which influence other interest rates — which in turn influence borrowing costs for households and businesses, as well as broader financial conditions.
- Theoretically, a signal to hike policy rates in the US should be a negative for emerging market economies, especially from a debt market perspective.
- Emerging economies such as India tend to have higher inflation and, therefore, higher interest rates than in developed countries. As a result, investors, including Foreign Portfolio Investors, tend to borrow in the US at lower interest rates in dollar terms and invest that money in the bonds of countries such as India in rupee terms to earn a higher rate of interest.
- When the Fed raises its policy rates, the difference between the interest rates of the two countries narrows, thus making countries such as India less attractive for the currency carry trade.
- A high-rate signal by the Fed would also mean a lower impetus to growth in the US, which could be yet negative news for global growth, especially when China is reeling under the impact of a real estate crisis and a lockdown-induced downturn.
- Higher returns in the US debt markets could also trigger a churn in emerging market equities, tempering foreign investor enthusiasm. There is also a potential impact on currency markets, stemming from outflows of funds.
Other important news
5G:
- 5G is the 5th generation mobile network. It is a new global wireless standard after 1G, 2G, 3G, and 4G networks.
- 5G enables a new kind of network that is designed to connect virtually everyone and everything together including machines, objects, and devices.
- 5G wireless technology is meant to deliver higher multi-Gbps peak data speeds, ultra low latency, more reliability, massive network capacity, increased availability, and a more uniform user experience to more users.
- Higher performance and improved efficiency empower new user experiences and connects new industries.
- While earlier generations of cellular technology (such as 4G LTE) focused on ensuring connectivity, 5G takes connectivity to the next level by delivering connected experiences from the cloud to clients. 5G networks are virtualized and software-driven, and they exploit cloud technologies.
- The 5G network will also simplify mobility, with seamless open roaming capabilities between cellular and Wi-Fi access. Mobile users can stay connected as they move between outdoor wireless connections and wireless networks inside buildings without user intervention or the need for users to reauthenticate.
- 5G technology should improve connectivity in underserved rural areas and in cities where demand can outstrip today’s capacity with 4G technology.
- New 5G networks will also have a dense, distributed-access architecture and move data processing closer to the edge and the users to enable faster data processing.
Evolution from 1G to 5G:
- The 1G era was defined by briefcase-sized phones and short conversations between a relatively small number of professional people.
- In the lead up to 2G, the demand for mobile services grew and never slowed down.
- Phones that could fit in your pocket, SMS and mobile internet access were hallmarks of the 3G world.
- Thanks to 4G, we have smartphones, app stores and YouTube.
- Now, 5G is completely reshaping both our professional and personal lives by enabling new use cases like connective vehicles, Augmented Reality and enhanced video and gaming.
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Recent Posts
- Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, a collective of the United States, United Kingdom and Norway governments, came up with a $1 billion fund.
- LEAF is supported by transnational corporations (TNCs) like Unilever plc, Amazon.com, Inc, Nestle, Airbnb, Inc as well as Emergent, a US-based non-profit.
- The world lost more than 10 million hectares of primary tropical forest cover last year, an area roughly the size of Switzerland.
- Ending tropical and subtropical forest loss by 2030 is a crucial part of meeting global climate, biodiversity and sustainable development goals. Protecting tropical forests offers one of the biggest opportunities for climate action in the coming decade.
- Tropical forests are massive carbon sinks and by investing in their protection, public and private players are likely to stock up on their carbon credits.
- The LEAF coalition initiative is a step towards concretising the aims and objectives of the Reducing Emissions from Deforestation and Forest Degradation (REDD+) mechanism.
- REDD+ was created by the United Nations Framework Convention on Climate Change (UNFCCC). It monetised the value of carbon locked up in the tropical forests of most developing countries, thereby propelling these countries to help mitigate climate change.
- It is a unique initiative as it seeks to help developing countries in battling the double-edged sword of development versus ecological commitment.
- The initiative comes at a crucial time. The tropics have lost close to 12.2 million hectares (mha) of tree cover last year according to global estimates released by Global Forest Watch.
- Of this, a loss of 4.2 mha occurred within humid tropical primary forests alone. It should come as no surprise that most of these lost forests were located in the developing countries of Latin America, Africa and South Asia.
- Brazil has fared dismally on the parameter of ‘annual primary forest loss’ among all countries. It has lost 1.7 mha of primary forests that are rich storehouse of carbon. India’s estimated loss in 2020 stands at 20.8 kilo hectares.
- Between 2002-2020, Brazil’s total area of humid primary forest reduced by 7.7 per cent while India’s reduced by 3.4 per cent.
- Although the loss in India is not as drastic as in Brazil, its position is nevertheless precarious. For India, this loss is equivalent to 951 metric tonnes worth carbon dioxide emissions released in the atmosphere.
- It is important to draw comparisons between Brazil and India as both countries have adopted a rather lackadaisical attitude towards deforestation-induced climate change. The Brazilian government hardly did anything to control the massive fires that gutted the Amazon rainforest in 2019.
- It is mostly around May that forest fires peak in India. However, this year India, witnessed massive forest fires in early March in states like Odisha, Uttarakhand, Madhya Pradesh and Mizoram among others.
- The European Union’s Copernicus Atmospheric Monitoring Service claimed that 0.2 metric tonnes of carbon was emitted in the Uttarakhand forest fires.
- Implementation of the LEAF Coalition plan will help pump in fresh rigour among developing countries like India, that are reluctant to recognise the contributions of their forest dwelling populations in mitigating climate change.
- With the deadline for proposal submission fast approaching, India needs to act swiftly on a revised strategy.
- Although India has pledged to carry out its REDD+ commitments, it is impossible to do so without seeking knowledge from its forest dwelling population.
Context:-
At the recently concluded Leaders’ Summit on Climate in April 2021, Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, a collective of the United States, United Kingdom and Norway governments, came up with a $1 billion fund plan that shall be offered to countries committed to arrest the decline of their tropical forests by 2030.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]What is LEAF Coalition?
Why LEAF Coalition?
Brazil & India
According to the UN-REDD programme, after the energy sector, deforestation accounts for massive carbon emissions — close to 11 per cent — in the atmosphere. Rapid urbanisation and commercialisation of forest produce are the main causes behind rampant deforestation across tropical forests.
Tribes, Forests and Government
Disregarding climate change as a valid excuse for the fires, Indian government officials were quick to lay the blame for deforestation on activities of forest dwellers and even labelled them “mischievous elements” and “unwanted elements”.
Policy makers around the world have emphasised the role of indigenous tribes and local communities in checking deforestation. These communities depend on forests for their survival as well as livelihood. Hence, they understand the need to protect forests. However, by posing legitimate environmental concerns as obstacles to real development, governments of developing countries swiftly avoid protection of forests and rights of forest dwellers.
For instance, the Government of India has not been forthcoming in recognising the socio-economic, civil, political or even cultural rights of forest dwellers. According to data from the Union Ministry of Tribal Affairs in December, 2020 over 55 per cent of this population has still not been granted either individual or community ownership of their lands.
To make matters worse, the government has undertaken systematic and sustained measures to render the landmark Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 ineffective in its implementation. The Act had sought to legitimise claims of forest dwellers on occupied forest land.
Various government decisions have seriously undermined the position of indigenous people within India. These include proposing amendments to the obsolete Indian Forest Act, 1927 that give forest officials the power to take away forest dwellers’ rights and to even use firearms with impunity.
There is also the Supreme Court’s order of February, 2019 directing state governments to evict illegal encroachers of forest land or millions of forest dwellers inhabiting forests since generations as a measure to conserve wildlife. Finally, there is the lack of data on novel coronavirus disease (COVID-19) deaths among the forest dwelling population;
Tardy administration, insufficient supervision, apathetic attitude and a lack of political intent defeat the cause of forest dwelling populations in India, thereby directly affecting efforts at arresting deforestation.
Way Forward
Tuntiak Katan, a global indigenous leader from Ecuador and general coordinator of the Global Alliance of Territorial Communities, aptly indicated the next steps at the Climate Summit:
“The first step is recognition of land rights. The second step is the recognition of the contributions of local communities and indigenous communities, meaning the contributions of indigenous peoples.We also need recognition of traditional knowledge practices in order to fight climate change”
Perhaps India can begin by taking the first step.