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25th July Current Affairs

Indian Antarctic Bill 2022 passed

(GS-II: Government policies and interventions)

In News:

The Lok Sabha passed the Indian Antarctica Bill, 2022 under its obligations as a signatory to the Antarctic Treaty

Objectives:

To demilitarise Antarctica, establish it as a zone free of nuclear tests and the disposal of radioactive waste, and ensure that it is used for peaceful purposes only; to promote international scientific cooperation in Antarctica and to set aside disputes over territorial sovereignty.

Need for legislation:

The Antarctic treaty ( signed in 1959 and implemented in 1961) made it mandatory for the 54 signatory countries to specific laws governing territories on which their stations are located. India signed the treaty in 1983 and therefore a law was needed to preserve the pristine Antarctic environment and ocean around it.

India is also a member of of

  • Commission for Conservation of Antarctic Marine Living Resources
  • Council of Managers of National Antarctic Programme ( COMNAP)
  • Scientific Committee of Antarctica Research (SCAR)

Key features of the bill:

Applicability: It will apply to any person, foreigners, corporations, firms, vessels or aircraft that is a part of an Indian expedition to Antarctica.

Central Committee: 10 members ( to be nominated from various ministries) + two experts (on the Antarctic) + chairman (Secretary of the Ministry of Earth Science)

It will give permits, ensure compliance and review information provided by parties to the treaty.

Private tours and expeditions to Antarctica would be prohibited without a permit or written authorisation by a Member country.

Permit can be granted only after the environmental impact assessment and waste management plan have been prepared.

Prohibited activities: The Bill prohibits certain activities in Antarctica including

  • nuclear explosion or disposal of radioactive wastes
  • introduction of non-sterile soil
  • discharge of garbage, plastic or other substance into the sea which is harmful to the marine environment.

Offences and penalties (extends the jurisdiction of Indian courts to Antarctica) :

  • Conducting a nuclear explosion in Antarctica will be punishable with an imprisonment of 20 years which may extend to life imprisonment and a fine of at least Rs 50 crore.
  • Drilling for mineral resources or introducing non-native animals or plants in Antarctica without a permit will be punishable with imprisonment of up to seven years and a fine between Rs 10 lakh and Rs 50 lakh.
  • The central government may notify one or more Sessions Courts to be the Designated Court under the Bill and specify its territorial jurisdiction to try offences punishable under the Bill.

Antarctic Fund: For the welfare of Antarctic research work and the protection of the Antarctic environment.

Establishes a ‘Committee on Antarctic Governance and Environmental Protection.’

Bank nationalization

(GS-III: Effects of liberalisation on the economy (post-1991 changes))

In News:

53rd anniversary of Prime Minister Indira Gandhi nationalising 14 banks. The government will bring legislative changes in the current session of Parliament to enable it to privatise PSBs (denationalization of Banks).

Details:

Nationalization is the process in which the government of a country or a state takes control of a specific company or industry. The post-1967 period saw a series of radical economic policies such as the nationalization of the 14 biggest commercial banks (1969), insurance (1972), coal industry (1973), an effort to nationalize wholesale wheat trade (1973), the takeover of ‘sick’ companies, etc.

According to many economists, the long-term impact of these decisions is being felt now, in terms of a looming banking crisis, inefficient coal sector, and poor insurance penetration (3.76% in 2019; one of the lowest in the world).

Aim:

Aim of bank nationalization of 1969: Government aimed to take away the control from a few private players and expand the banking coverage to rural India so that sectors such as agriculture and small industries could get better credit facilities, thus creating a new class of entrepreneurs.

Nationalization of the 1970s was a bad move as it led to:

The emergence of structural features that bred inefficiency: The strategy of nationalization together with import-substitution-industrialization (ISI) and ‘Licence Quota Raj’ stifled entrepreneurship and innovation.

Nationalization led to lesser competition between the public sector and private sectors, this has again led to the bureaucratic attitude in the functioning of PSUs, Lack of initiatives and responsibility, populist pressures, irresponsible trade unionism, red-tapism, etc.

India lost out on ‘internationalization of production’:

India’s policy of nationalization and ‘protectionist’ inward-looking economy’ failed to take advantage of globalization that created East Asian miracle economies.

The implication of it was that India’s export shrank from 2.4% (1948) to 0.42 in 1980.

Erosion of fiscal prudence: Government expenditure kept rising due to the proliferation of subsidies and grants, salary increases with no relationship to efficiency or output, overstaffing, and other ‘populist measures.

Because of the lack of performance audit, finance from the public banks and PSUs failed to accomplish large public interest

Present Impact:

NPA crisis is considered the legacy of nationalization of banks of the 1970s and 80s: Government ownership and political interference reduced the accountability of banks and the twelve public-sector banks (PSBs) recorded gross NPAs worth Rs 5.47 lakh crore, more than twice the NPA of 19 private banks in 2020.

Also, nationalized banks are either operating under losses or experiencing falling dividends

The insurance sector is facing issues of low penetration (only 3.76% of overall insurance penetration in India), public sector monopoly, low non-life insurance (less than 1%), and poor financial health of public sector insurers.

The government has still not been able to close down all the nationalized ‘sick’ PSUs, thus draining taxpayer’s money.

Nayak Committee report (2014): Public sector banks have the poor financial position, selection process compromised and non-transparent, high NPAs, board governance weak.

Economic Survey review of bank nationalization (2020): Every rupee of taxpayer money invested in PSBs fetches a market value of just 71 paise ( in contrast private sector banks fetches a market value of Rs 3.70)

Issue of “phone banking”: Public sector bank officials can be forced to extend loans when such loans don’t make economic sense.

Economic survey 2020 pointed out that PSBs enjoy less strategic and operating freedom because of majority government ownership.

However, nationalization did help the Indian economy as it led to:

Higher penetration of banking in rural areas and underdeveloped sectors: from just 8,262 bank branches (1969) the number rose to 30,303 in 1979.

  • Liberal credit availability by banks led to India’s growth process, particularly during the Green revolution.
  • Credit to rural areas increased from Rs 115 crore to Rs 3,000 crore, a twenty-fold increase.
  • Both rural bank deposit mobilization and rural credit increased significantly after the 1969 nationalization

Priority-sector lending:e. setting aside 40% of banks’ net bank credit for agriculture, micro and small enterprises, education, housing, and “weaker” sections.

Domestic saving: The rates of domestic savings and investment increased rapidly from 10% in the 1950s to 20% by the 1980s.

Removed monopoly of the private sector in some sectors such as coal: After the nationalization of the coal industry in India, India never witnessed a demand-supply gap until 1991

Investment in Government Securities: There has been a significant increase in the investment of the banks in government and other approved securities in recent years.

The Balance of payment situation improved considerably after nationalization as the green revolution led to a reduction in food and other imports. By 1978-79, foreign exchange reserve had risen to about a peak of $7.3bn.

Soared employment opportunities: The huge expansion of PSUs created job opportunities, giving employment to a vast number of educated youths in the country.

Success of “JAM Trinity”: JAM stands for Jan-Dhan, Aadhaar and Mobile number.

  • The initiative would have been a non-starter had there been only private banks and no PSBs in the country.
  • Of the total 46 crore beneficiaries, only 1.3 crores have accounts in private sector banks — that is just 2.82%.

Thus, conceptually nationalization was a good idea as it pushed for redistribution of wealth, job creation, and financial inclusion. However, efforts should have been taken to improve efficiency and make PSUs competitive as was done by China.

Coastal Erosion

In News:

As per the Ministry of Earth Science (MoES) 34% of India’s coastline is under erosion. West Bengal has suffered the worst (60.5% of its coast is threatened by erosion).

Definition: Coastal Erosion is the process by which local sea-level rise, strong wave action, and coastal flooding wear down or carry away rocks, soils, and/or sands along the coast.

Process: There are four main processes of coastal erosion. These are corrosion, abrasion, hydraulic action and attrition.

Agency: National Centre for Coastal Research (NCCR) (Under MoES) is monitoring shorelines since 1990.

Impact: Destruction of biodiversity and habitat, loss of fertile land, loss of tourism, etc.

Mitigation:

Coastal erosion structures Seawalls, revetments, bulkheads, groins and breakwaters may reduce erosion in the short term.

Indian National Centre for Ocean Information Services (INCOIS)has prepared and published an atlas of Coastal Vulnerability Index (CVI) maps for the entire coastline

Integrated Coastal Zone Management Plan (ICZM): It ensures optimum suitable use of coastal natural resources

National centre for Sustainable coastal management (NSCSCM): To research the areas of CZM including coastal resources and the environment.

India to set up joint theatre commands

In News:

Defence minister Rajnath Singh announced the setting up of joint theatre commands of the tri-services to enhance coordination among the armed forces.

Details:

The defence minister also said India is moving quickly from being the world’s largest importer of defence equipment to an exporter.

About Joint theatre commands:

An integrated or joint theatre command envisages a unified command of the three Services, under a single commander, for geographical theatres (areas) that are of strategic and security concern.

The commander of such a force will be able to bear all resources at his disposal — from the Army, the Indian Air Force, and the Navy — with seamless efficacy.

The integrated theatre commander will not be answerable to individual Services.

Integration and jointness of the three forces will avoid duplication of resources.The resources available under each service will be available to other services too.

The services will get to know one another better, strengthening cohesion in the defence establishment.

The Shekatkar committee has recommended the creation of 3 integrated theatre commands — northern for the China border, western for the Pakistan border, and southern for the maritime role.