Daily Current Affairs for 23rd May 2020

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Locust swarms attack crops in M.P.

Paper: III

Prelims: General issues on Environmental ecology, Bio-diversity and Climate Change

Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management

Why in news:                     

Locust attack crops in Madhya Pradesh.

 Key points:

The swarms, which could be 1-2 km to 10-12 km long and 1.5-2 km wide, move around 100-150 km every day during daylight in the wind direction. Around late evening, they settle around greenery and attack it.

  • In India, small swarms of desert locusts, in the past weeks, have already arrived from Pakistan, moving east into Rajasthan, and reaching Jodhpur.
  • Though locust attacks are a yearly phenomenon, the lockdown in place meant that the Locust swarms could not be controlled in Rajasthan and hence it is also evident in M.P. this year.


What exactly are locusts?

  • The desert locust (Schistocerca gregaria) is a short-horned grasshopper that is innocuous while it is in a “solitary phase” and moving about independently.
  • These winged insects differ from normal hoppers, and become dangerous only when their populations build up rapidly and the close physical contact in crowded conditions triggers behavioural changes.
  • They, then, enter the “gregarious phase”, by grouping into bands and forming swarms that can travel great distances (up to 150 km daily), while eating up every bit of vegetation on the way.
  • If not controlled at the right time, these insect swarms can threaten the food security of countries. Kenya is already reporting its worst locust outbreak in 70 years, while Ethiopia and Somalia haven’t seen one this bad in quarter of a century.
  • Six swarms of locusts have entered Madhya Pradesh from Rajasthan but have caused minimal crop damage so far as fields lie fallow.
  • This is the first such invasion since 1992-93.
  • The State government has set up district-level teams comprising revenue, police and agriculture officials to track the swarms during the day and they are killed using pesticide.

What kind of damage can they cause?

  • Locusts are polyphagous, i.e. they can feed on a wide variety of crops.
  • Secondly, they have an ability to multiply rapidly.
  • A single female desert locust lays 60-80 eggs thrice during its roughly 90-day life cycle.
  • K L Gurjar, deputy director of LWO, estimates that a 1-square-km area can accommodate 40-80 million of these insects, making the growth of their swarms’ exponential quite like the Covid-19 virus.
  • The damage potential of locusts has been limited in India only because of the country hosting a single breeding season — unlike Pakistan, Iran and East Africa, where they also multiply during January-June

What is the genesis of the present locust upsurge, particularly in East Africa?

  • It lies in the Mekunu and Luban cyclonic storms of May and October 2018 that struck Oman and Yemen, respectively.
  • These turned large desert areas in remote parts of the southern Arabian Peninsula into lakes, which allowed the insects to breed undetected across multiple generations.
  • The swarms attacking crops in East Africa reached peak populations from November onwards, while building up since the start of this year in southern Iran and Pakistan (Balochistan and parts of the Indus Valley and Punjab).
  • Widespread rains in East Africa in late March and April have enabled further breeding.

India’s approach to controlling locust plague

  • India is equipped with a proper structure that is responsible to deal with the locust crisis.
  • India has a regular system in place comprising Locust Officers.
  • These authorised people with the knowledge of environment and agriculture organise six annual border meetings with Pakistan between June and November to analyse the situation and take necessary action. The dialogue is either organised at Munabao in Rajasthan or Kokhropar on the Pakistani side.
  • A wireless conversation also keeps happening between the officials of the two countries during these months from Jodhpur in India and Karachi in Pakistan.

As per the Locust Warning Organisation (LWO), India has not seen any locust upsurges since December 2011 and the cases have decreased drastically after the advent of new technologies in the agricultural sector including advancement in pest control market.

China seeks India’s support for its new draconian law to crack down on Hong Kong protesters

Paper: II

Prelims: Current events of national and international importance.

Mains: General Studies- II: Governance, Constitution, Polity, Social Justice and International relations.

Why in news:

  • China has sought the support and understanding of India and other countries for its controversial decision to impose a new national security law on Hong Kong, saying the new legislation is aimed at containing the “secessionist” forces in the former British colony who have posed a “grave threat” to the country’s national security and sovereignty.
  • In an apparent move to blunt any international backlash, China has sent demarches to India and several other countries explaining the reason for the new draft legislation with a reminder that upholding national security” in Hong Kong Special Administrative Region (HKSAR) is “purely China’s internal affair and no foreign country may interfere in this matter”.
  • Draft legislation on national securitytabled before China’s Parliament.

Key Points:

“One country, two systems”:

  • Since the return to China in 1997, Hong Kong, a former British colony, has been governed by the Basic Law, which allows the territory “to enjoy executive, legislative and independent judicial power, including that of final adjudication”, barring matters of defence and foreign affairs.
  • Article 23 of the Basic Lawrequires Hong Kong to pass national security legislation, but past attempts to do so were shelved amid protests.
  • The legislation would allow Beijing to draft national security laws for Hong Kongand also operate its national security organs in the Special Administrative Region (SAR).
  • If passed, the law will for the first time allow China’s national security organs to formally operate in Hong Kong.

Issues and Concerns:

  • The new legislation would allow Beijing to bypass the legislative council of Hong Kongand hence the draft law, has been criticized by democratic parties in Hong Kong as undermining the “one country, two systems” model that gives the SAR a high degree of autonomy.

Chinese Authority’s Stand: 

  • Beijing has argued that the new legislation is aimed at “preserving national security and sovereignty”by containing the “secessionist” forces in Hong Kong.
  • China has sought the support and understanding of India and other countries for its decision to impose a new national security law on Hong Kong.
  • China has sent demarches to India and other countries, explaining the reason for the draft legislation and argues that the Hong Kong Special Administrative Regionis China’s internal affair and no foreign country can interfere in this matter.

RBI cuts repo rate again, down to 4%

Paper: III

Prelims: Economic and Social Development

Mains: General Studies-III: Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management

Why in news:

  • The Reserve Bank of India (RBI) has reduced the key interest rate or the Repo Rate (the interest rate that the RBI charges for funds given to banks) by 40 bps to stabilize the financial system.
  • Cumulatively, since the imposition of the national lockdown in March 2020, the MPC has cut rates by 115 basis points. The repo rate now stands at 4 per cent.
  • The Reserve Bank of India (RBI) further reduced the key interest rate or the repo rate by 40 bps on Friday, after a yet another out-of-turn Monetary Policy Committee (MPC) meeting as the COVID-19 pandemic induced lockdown continues, albeit with calibrated relaxations.
  • The central bank also extended the loan repayment moratorium for another three months till August 31.
  • The six-member MPC announcement has reduced the repo rate to 4% with five members of the panel voting for the steep cut while one member, Chetan Ghate, voted for a 25-bps cut.

Reason for the RBI to cut interest rates:

  • The Monetary Policy Committee (MPC), was of the view that the macroeconomic impact of the pandemic is turning out to be more severe than initially anticipated, and various sectors of the economy are experiencing acute stress.
  • The impact of the shock has been compounded by the interaction of supply disruptions and demand compression. Beyond the destruction of economic and financial activity, livelihood and health are severely affected.
  • Even as various measures initiated by the government and the Reserve Bank work to mitigate the adverse impact of the pandemic on the economy, this accommodative step is a necessity to revive growth and mitigate the impact of COVID-19 on the economy
  • The decision was also considered keeping inflation within the target.

What are the Other steps taken by the RBI?

  • The central bank has extended the Loan Repayment Moratoriumfor another three months till August 31, 2020.
  • The extension of the moratorium on repayment of term loans by borrowers means that they would not have to pay the loan EMIs during the moratorium period.
  • In addition, Interest Payment Defermentfor working capital loans has also been extended by another six months.
  • RBI has also decided to increase the Group Exposure Limitof banks from 25% to 30% of its capital base.
  • Group exposure limit determines the maximum amount a bank can lend to one business house.
  • All other conditions for the facility remain unchanged — a loan will not be classified by the lender as non-performing and there will not be any impact on individual credit scores.
  • A liquidity facility for Exim Bank of India was also opened as it has been decided to extend a ₹15,000 crore line of credit for a period of 90 days to enable it to avail a U.S. dollar swap facility to meet its foreign exchange requirements.
  • Also, to alleviate difficulties being faced by exporters in their production and realization cycles, it has been decided to increase the maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks from the existing one year to 15 months, for disbursements made up to July 31, 2020.

Why it is important?

  • It will make funds cheaper for banks thus aiding them to bring down lending rates.
  • EMIs on home, auto, personal and term loan rates are expected to come down in the coming days.
  • It will reduce the Cost of Capitaland ease the financial burden on businesses due to the extended lockdown.
  • The extension of the Repayment Moratoriumon loans is a welcome measure.
  • The extension will provide relief to many individuals, especially the self-employed, as they would have found it difficult to service their loans such as car loans, home loans etc. due to loss of income during the lockdown period.
  • Missing an EMI payment would mean risking adverse action by banks which can adversely impact one’s credit score.
  • In another significant measure, the RBI has allowed borrowers and banks to convert the interest charges during the moratorium period (from March 1 to August 31) into a term loan which can be repaid by March 2021.
  • This is expected to reduce the burden on borrowers who have gone for a moratorium.
  • The increase in Group Exposure Limitwill help large corporate borrowers who may find themselves handicapped in raising funds from the markets now.

Issues and challenges:

  • The extended period given may however still not be enough as it will offer borrowers only about seven months from the end of the moratorium period during which they will have to crank up their businesses and service their loans.
  • The RBI could have put off accumulated interest repayment by one year.
  • There was some disappointment in the markets that the RBI did not relax norms for loan restructuring by lenders.
  • Demand for credit is likely to remain low as, with continuing economic and health uncertainty, firms and households will postpone their decisions.
  • Moreover, risk averse banks are likely to hold back even if there are borrowers.
  • Higher-rated borrowers are likely to continue to get easy funding, while lower-rated borrowers will struggle.

Way ahead:

  • Monetary measures may have been taken to ease economic stress. But there are limitations to what it can achieve. It cannot do the heavy lifting alone. Fiscal support is needed.

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