IAS Gyan

Daily News Analysis


4th April, 2020


-       Lockdown halts harvesting season in forests

-       Lakhs of tribals in Odisha, who have pinned their hopes on sale of Non-Timber Forest Products (NTFP) being collected during March-June, are staring at a grim future as the COVID19 lockdown has coincided with the harvesting season.

-       Wild honey, tamarind, mango, tendu leaves, sal leaves, sal seeds, mahua seeds, neem seeds, karanj (pongamia) seeds, mahua flowers and tejpatta (bay leaf) are major NTFPs collected during the summer season.

-       The labour-intensive NTFP collection employs millions of tribals.

-       Experts say that the State government should immediately establish and ensure collection centers under Van Dhan Vikash Kendra scheme assuring minimum support price and total procurement of minor forest produces to forest dependent communities.

-       About Van Dhan Vikas Karyakram:

-       It is primarily a component under the Mechanism for Marketing of Minor Forest Produce (MFP) through Minimum Support Price (MSP) & Development of Value Chain of Ministry of Tribal Affairs (MoTA).

-       Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.

-       The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).

-       MSP is price fixed by Government of India to protect the producer - farmers - against excessive fall in price during bumper production years. The minimum support prices are a guarantee price for their produce from the Government.

-       The major objectives are to support the farmers from distress sales and to procure food grains for public distribution. In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced minimum price.

-       The programme aims to tap into traditional knowledge & skill sets of tribals by adding technology & IT to upgrade it at each stage and to convert the tribal wisdom into a viable economic activity.

-       The proposition is to set-up tribal community owned MFP-centric multi-purpose Van Dhan Vikas Kendras (the Kendra) in predominantly tribal districts.

-       About 3000 Van Dhan Kendras are proposed to be set up in span of 2 years i.e. 1500 Kendras to be set-up in each year.

-       Each Kendra would act as common facility centers for procurement cum value addition to locally available MFPs and skill based handicraft.

-       It is an initiative of the Ministry of Tribal Affairs and TRIFED. The scheme will be implemented through Ministry of Tribal Affairs as Nodal Department at the Central Level and TRIFED as Nodal Agency at the National Level.

-       The Tribal Cooperative Marketing Development Federation of India (TRIFED) came into existence in 1987. It is a national-level apex organization functioning under the administrative control of Ministry of Tribal Affairs, Govt. of India. TRIFED has its registered and Head Office located in New Delhi and has a network of 13 Regional Offices located at various places in the country.

-       It is engaged in marketing development of tribal products and provides marketing support to the products made by tribals through a network of retail outlets, which presently consist of 29 of its own outlets located throughout the country and 14 State Government organization’s Show Rooms.    

-       Like exemption accorded to agricultural operations through a recent Home Ministry guideline, the market of minor forest produce should be recognized as critical for tribal community’s sustenance, feel experts.

Reference: https://www.thehindu.com/news/national/other-states/lockdown-halts-harvesting-season-in-forests/article31253235.ece

-       Over two fold rise in domestic violence cases: NCW

-       The first week of the nationwide lockdown has resulted in a steep rise in violence against women.

-       There has also been an almost three fold increase in police apathy towards women’s complaints, with the NCW receiving 16 complaints on the issue as compared to six earlier.

-       About National Commission of Women (NCW)

-       NCW is the statutory body of the Government of India, generally concerned with advising the government on all policy matters affecting women.

-       It was established in 31 January 1992 under the provisions of the Indian Constitution, as defined in the 1990 National Commission for Women Act.

Reference: https://www.thehindu.com/news/national/covid-19-lockdown-spike-in-domestic-violence-says-ncw/article31238659.ece


-       Explained: Who are Tablighi Jamaat

-       Origins

-       The Tablighi Jamaat (Society of Preachers) was founded by a Deobandi Islamic scholar Muhammad Ilyas al-Kandhlawi in Mewat, India, in 1926.

-       As its name suggests, Al-Kandhlawi’s goal was to establish a group of dedicated preachers as a Muslim revivalist society, who could revive “true” Islam, which he saw was not being practiced by many Muslims.

-       The slogan Al-Kandhlawi coined for his new organization captured the essence of its activities — “Oh Muslims, become true Muslims”. Al-Kandhlawi called upon his fellow Muslims to “enjoin the good and forbid the evil”.

-       This was also a time when Islam and Hinduism had seen several revivalist streams in Asia. India had seen the rise of the Deobandi School in the second half of the 19th century. Scholars like Jamal ad-Din Afghani and Mohammed Abduh called for reformation of faith through their Salafi preachings.

-       In India, Hinduism was seeing revivalist movements such as the Shuddhi Movement in the early 20th century. Al-Kandhlawi’s mission was also to revive his faith, but based on its core teachings and lifestyle of its early leaders.

-       Also in Mewat where the Tablighi was founded, the Meos Muslims, a Rajput ethnic group, had followed syncretic traditions. Al-Kandhlawi wanted to end it all through dawa (proselytising). He sent his volunteers to villages to spread “the message of Allah”.

-       The organization grew fast in British India. In its annual conference held in November 1941, some 25,000 people attended. After Partition, it grew stronger in Pakistan and East Pakistan (lately Bangladesh).

-       Now, Tablighi’s largest national wing is in Bangladesh. The group has presence in 150 countries and millions of followers.

-       Ideology and organisation

-       Inspired by the Deobandi creed, the Tablighis urge fellow Muslims to live like the Prophet did. They are theologically opposed to the syncretic nature of Sufi Islam and insist on its members to dress like the Prophet did (trouser or robe should be above the ankle).

-       Men usually shave their upper lip and keep long beard. The focus of the organisation was not on converting people from other faiths into Islam. Rather, it is focused on ‘purifying’ the Muslim faith.

-       The organisation has a loose structure. The Emir is the leader of the international movement and is always related to the group’s founder Muhammad Ilyas al-Kandhlawi. The current leader, Maulana Saad Kandhalvi, is the grandson of the founder.

-       The group also has a Shura Council, which is largely an advisory council with different national units and national headquarters.

-       Activities

-       The Tablighi Jamaat members have declared they are not political. They have also decried violence in the name of religion. They say the Prophet Mohammed has commanded all Muslims to convey the message of Allah, and the Tablighis take this as their duty.

-       They divide themselves into small Jamaats (societies) and travel frequently across the world to spread the message of Islam to Muslim houses.

-       During this travel, they stay in local mosques. The group’s modus operandi is peaceful and it is focused entirely on the Muslim community worldwide.

-       The Tablighi Jamaat has been banned in some Central Asian countries such as Uzbekistan, Tajikistan and Kazakhstan, whose governments see its puritanical preaching is as extremist.

Reference: https://www.thehindu.com/news/national/explained-who-are-the-tablighi-jamaat-the-organisation-at-the-epicentre-of-coronavirus-outbreak-in-india/article31238915.ece



-       The spectre of a post-COVID19 world

-       China’s pivotal role

-       The consequences for the global economy of China ceasing to be the world’s biggest exporter of manufactured goods are considerable, and with no country in a position to replace it, this development will precipitate a further economic downturn internationally.

-       Added to this are: a global slowdown, increasing political and policy uncertainties, alterations in social behavior, new environmental norms, etc.

-       Prognosis for India

-       On the economic plane, according to most experts, a global recession seems inevitable.

-       Uncertainty, panic and lockdown policies are expected to cause demand worldwide to decline in a precipitous way. This will inevitably lead to a vicious downward cycle, where companies close down, resulting in more lay-offs and a further drop in consumption.

-       A precipitous decline in GDP would follow. To compensate for this loss, massive inflows of government funds would be needed, but most governments, India included, might find it difficult to find adequate resources for this purpose.

-       Pandemic as disrupter

-       COVID19 is, in turn, expected to bring about major changes in the global order.

-       Given that the U.S. is among the countries badly affected by this pandemic, together with existing uncertainties affecting its financial markets, the U.S. can be expected to step back even further — from one of assertion to neutrality in global affairs.

-       Meantime, China and Russia have strengthened their relationship, and improved their asymmetric capabilities.

-       Russia has become far more economically and politically stable and an important power broker in West Asia.

-       These shifts are likely to have a direct impact on the liberal international order. It could, in turn, give a boost to authoritarian regimes and trends.

-       Social concerns

-       Social distancing and isolation can lead to an ‘epidemic of despair’ arising from a fear of unknown causes, resulting in serious anxiety and mental problems

-        Inequality in incomes impacting segments of the population, facing a common malaise will become starker.

-       Those without high levels of skills would fall further behind. This is evident to some extent already given recent reports of mass migration across the Indian landmass.

-       A major law and order situation might arise.

-       Digital factor

-       The rise of digital autocracies could lead to digital repression, and in the age of AI-powered surveillance, create a capacity for predictive control, or what is often referred to as ‘social management’.

Reference: https://www.thehindu.com/opinion/lead/the-spectre-of-a-post-covid-19-world/article31252172.ece


-       Questions over foreign donations for PM-CARES

-       What is PM-CARES?

-       PM-CARES is a public charitable trust launched on March 28 as a “dedicated national fund with the primary objective of dealing with any kind of emergency or distress situation, like the one posed by the COVID19 pandemic, and to provide relief to the affected.”

-       Confusion over foreign donations

-       Initially, Indian ambassadors were directed to mobilize donations from abroad, with SWIFT (Society for Worldwide Interbank Financial Telecommunication) code details made available in order to accept such contributions.

-       However, the Centre has now seemed to take a step back, indicating that foreign funds would be accepted only from individuals and foundations, with details of foreign donations unavailable for now.

-       The PM-CARES Fund also does not seem to have any website with details of objectives, income and expenditure as yet, raising concerns about its transparency and accountability.

Reference: https://www.thehindu.com/news/national/pm-cares-centre-sends-conflicting-signals-on-foreign-donations/article31245203.ece


-       Lockdown lifts Delhi’s air quality to a 5-year high

-       Central Pollution Control Board (CPCB) data shows pollution fell within cities recording a ‘good’ on AQI.

-       The key factor that triggered the decline was the number of on-road vehicles, which contributed to a 51% reduction in NOx levels and a 32% reduction in carbon monoxide levels during March 22-23 as compared to March 21.

-       Research studies have attributed the key sources of PM2.5 in summer to be: dust and construction activities (35%), transport sector (20%) and industry (20%). 

-       Lockdown effect: During the lockdown, PM10 and PM2.5 levels were reduced by about 35-40%.

-       About CPCB

-       It is a statutory organization, which was constituted in September 1974 under the Water (Prevention and Control of Pollution) Act, 1974. It was also entrusted with the powers and functions under the Air (Prevention and Control of Pollution) Act, 1981.

Reference: https://www.thehindu.com/news/cities/Delhi/coronavirus-lockdown-lifts-delhis-march-air-quality-to-5-year-high/article31252221.ece


-       IIT-Roorkee develops ventilator

-       IIT-Roorkee has developed a low-cost portable ventilator in association with AIIMS-Rishikesh, which can be manufactured for just ₹25,000.

-       Named ‘Prana-Vayu,’ the closed-loop ventilator can deliver the required amount of air to the patient, with an automated process, controlling the pressure and flow rates.

Reference: https://www.thehindu.com/news/national/coronavirus-iit-roorkee-develops-prana-vayu-a-low-cost-ventilator/article31252339.ece



-       NSA invoked against four Indore residents

-       Case relates to attack on health workers.

About National Security Act (NSA):

-       It is a stringent law that allows preventive detention for months, if authorities are satisfied that a person is a threat to national security or law and order. The person does not need to be charged during this period of detention. The goal is to prevent the individual from committing a crime.

-       It was promulgated on September 23, 1980, during the Indira Gandhi government and its purpose is "to provide for preventive detention in certain cases and for matters connected therewith".

-       It applies to the entirety of India.

-       As per the NSA, the grounds for preventive detention of a person include:

A. Acting in any manner prejudicial to the defence of India, the relations of India with foreign powers, or the security of India.

B. Regulating the continued presence of any foreigner in India or with a view to making arrangements for his expulsion from India.

C. Preventing them from acting in any manner prejudicial to the security of the State or from acting in any manner prejudicial to the maintenance of public order or from acting in any manner prejudicial to the maintenance of supplies and services essential to the community it is necessary so to do.

-       Under the NSA, an individual can be detained without a charge for up to 12 months; the state government needs to be intimated that a person has been detained under the NSA.

-       A person detained under the NSA can be held for 10 days without being told the charges against them.

-       The detained person can appeal before a high court advisory board but they are not allowed a lawyer during the trial.

-       As per a Law Commission report from 2001, more than 14 lakh people (14, 57,779) were held under preventive laws in India.


Reference: https://www.thehindu.com/news/national/other-states/nsa-invoked-against-four-indore-residents-for-attacking-healthcare-workers/article31242314.ece


-       States get ₹11,092 crores  for COVID19

-       The Union Ministry of Home Affairs (MHA) on Friday approved the release of ₹11,092 crores under the State Disaster Risk Management Fund (SDRMF) to all the States to take measures for containment of the COVID19 pandemic.

-       The funds were allocated to the States on the recommendation of the 15th Finance Commission.

-       About SDRF

-       The SDRF, constituted under Section 48 (1) (a) of the Disaster Management Act, 2005 is the primary fund available with the States to meet the expenditure of immediate relief to the victims of disasters.

-       SDRF is located in the ‘Public Account’ under ‘Reserve Fund’.

Reference: https://www.thehindu.com/news/national/centre-releases-11092-crore-under-sdrmf/article31251774.ece



-       Rice exports halted on supply chain disruption due to virus

-       Indian rice traders have stopped signing new export contracts amid the nationwide lockdown to curb the spread of COVID-19, as labour shortages and logistics disruptions have hampered the delivery of even existing contracts.

-       The halt in exports from the world’s biggest exporter is allowing rival countries such as Thailand to raise shipments in the short term and lift global prices, forcing millions of poor consumers in Africa to pay high prices.

-       New Delhi mainly exports non-basmati rice to Bangladesh, Nepal, Benin and Senegal, and premium basmati rice to Iran, Saudi Arabia and Iraq.

-       As Cambodia, Vietnam and Myanmar curbed their rice exports, demand for Indian rice surged, but traders are not signing new contracts.

-       Thailand, the only key exporter to offer rice currently, has seen its export prices soar to their highest in seven years this week.

Reference: https://www.thehindubusinessline.com/economy/agri-business/locked-down-india-rice-rates-hit-3-month-low-thai-prices-off-6-12-year-peaks/article31178706.ece


-       Third TLTRO for ₹25,000 cr. on April 7

-       To ensure adequate liquidity in the system, especially in the corporate bond market, the Reserve Bank of India (RBI) on Friday announced the third targeted long-term repo operation (TLTRO) on April 7 for ₹25,000 crores.

-       The central bank announced the LTROs on February 6 and has pumped in ₹1 lakh crores since then.

-       About LTRO

-       Under LTRO, RBI provides longer-term (one- to three-year) loans to banks at the prevailing repo rate. As banks, get long-term funds at lower rates, their cost of funds falls. In turn, they reduce interest rates for borrowers.

-       Repo rate (repurchase agreement) is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.

-       LTRO helped RBI ensure that banks reduce their marginal cost of funds-based lending rate, without reducing policy rates.

-       LTRO also showed the market that RBI would not only rely on revising repo rates and conducting open market operations for its monetary policy, but also use new tools to achieve its intended objectives.

Reference: https://www.thehindubusinessline.com/moneyandbanking/?page=2&site=http://www.thehindubusinessline.com/money-and-banking/article9752163.ece%23mmyun

-       Foreign investors sell over ₹1 lakh cr. securities in a month, for first time in history

-       For the first time in the history of the Indian capital markets, foreign portfolio investors (FPIs) have sold securities worth over ₹1 lakh crores in a single month.

-       Foreign portfolio investment (FPI)

-       FPI involves holding financial assets from a country outside of the investor's own.

-       FPI holdings can include stocks, ADRs, GDRs, bonds, mutual funds, and exchange traded funds.

-       Along with foreign direct investment (FDI), FPI is one of the common ways for investors to participate in an overseas economy, especially retail investors.

-       Unlike FDI, FPI consists of passive ownership; investors have no control over ventures or direct ownership of property or a stake in a company.

-       As per data from the National Securities Depository Limited (NSDL), the cumulative net outflow from the debt and equity segments was pegged at ₹1.18 lakh crores in March.

-       Further, both the equity and debt segments have individually registered new highs in terms of monthly outflows of ₹61,973 crores and ₹60,376 crores, respectively.

-       The ongoing COVID19 pandemic that has affected stocks worldwide is the primary reason for such record outflows as foreign investors shy away from riskier assets and emerging markets.

-       Interestingly, buying by domestic institutional investors (DIIs), which include banks, insurance companies, mutual funds and domestic financial institutions, has been acting as a strong counter force.

-       Meanwhile, the voluntary retention route, or VRR, in debt securities, which was opened up for FPI investments in January, has seen an inflow of ₹4,165 crores in March while hybrid securities saw a marginal outflow of ₹19 crores, according to NSDL data.

-       What is VRR?

-       It is a new channel of investment available to FPIs to encourage them to invest in debt markets in India over and above their investments through the regular route. The objective is to attract long-term and stable FPI investments into debt markets while providing FPIs with operational flexibility to manage their investments.

-       How much money can an FPI invest through this route?
Investments under this route as of now shall be capped at Rs 40,000 crores for government securities and Rs. 35,000 crores per annum. However, the limit could be changed from time to time based on macro-prudential considerations and assessment of investment demand. There will be separate limits for investment in government securities and investment in corporate debt.

-       Are there any other facilities for investors through VRR?

-       FPIs investing through this route will be eligible to participate in repos for their cash management, provided that the amount borrowed or lent under repo were not to exceed 10 per cent of the investment under VRR. They will also be eligible to participate in any currency or interest rate derivative instrument, OTC or exchange-traded instrument to manage their interest rate risk or currency risk.


Reference: https://www.thehindu.com/business/foreign-investors-sell-over-1-lakh-cr-securities-in-a-month-for-first-time-in-history/article31252148.ece



-       India’s manufacturing activity weakens in march: PMI

What is a PMI?

-       PMI or a Purchasing Managers’ Index (PMI) is an indicator of business activity -- both in the manufacturing and services sectors. It is a survey-based measures that asks the respondents about changes in their perception of some key business variables from the month before.

-       It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.

-       The Nikkei India release Manufacturing Purchasing Managers' Index (PMI), which is compiled by IHS Markit.


How is the PMI derived?

-       The PMI is derived from a series of qualitative questions. Executives from a reasonably big sample, running into hundreds of firms, are asked whether key indicators such as output, new orders, business expectations and employment were stronger than the month before and are asked to rate them.


How does one read the PMI?

-       A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction.

-       Higher the difference from this mid-point greater the expansion or contraction. The rate of expansion can also be judged by comparing the PMI with that of the previous month data. If the figure is higher than the previous month’s then the economy is expanding at a faster rate. If it is lower than the previous month then it is growing at a lower rate.


What are its implications for the economy?

-       The PMI is usually released at the start of the month, much before most of the official data on industrial output, manufacturing and GDP growth becomes available. It is, therefore, considered a good leading indicator of economic activity. Economists consider the manufacturing growth measured by the PMI as a good indicator of industrial output, for which official statistics are released later. Central banks of many countries also use the index to help make decisions on interest rates.


What does it mean for financial markets?

-       The PMI also gives an indication of corporate earnings and is closely watched by investors as well as the bond markets. A good reading enhances the attractiveness of an economy vis-a- vis another competing economy. For instance, India’s manufacturing activity as measured by the PMI expanded to 57.6 5 in July, while for China it dipped for the first time in over a year.


Reference: https://www.thehindu.com/business/Economy/indias-manufacturing-activity-weakens-in-march-pmi/article31234362.ece