Daily Prelims Notes 1 August 2024

August 1, 2024
Posted by: OptimizeIAS Team
Category: DPN

Daily Prelims Notes

1 August 2024

Table Of Contents

1. What was Madhav Gadgil-panel report which recommended no urbanisation on Western Ghats?

Sub: Env

Sec: Env legislation

Context: As the devastating series of landslides hit Kerala’s Wayanad district, claiming nearly 160 lives with the toll expected to rise as rescuers search through the debris, the 13-year-old Madhav Gadgil-panel report on Western Ghats is back in focus. The report has warned against activities such as indiscriminate quarrying and construction in Ecologically Sensitive Areas (ESAs) of the Western Ghats, including regions like Wayanad. The report recommended a complete ban on new urban development in the Western Ghats region to prevent habitat destruction and pollution.

Recommendations of Madhav Gadgil-panel report on Western Ghats

The report recommended classifying 64 percent of the Western Ghats, spread over six states, into Ecologically Sensitive Zones called ESZ 1, ESZ 2 and ESZ 3.
It also recommended designating the entire region as an Ecologically Sensitive Area (ESA).
Almost all developmental activities like mining, construction of thermal power plants, dams were to stop along with the decommissioning of similar projects that have completed their shelf life in ESZ 1.
For Goa, WGEEP recommended an indefinite moratorium on new environmental clearances for mining in ESZs 1 and 2, a phasing out of mining in Ecologically Sensitive Zone 1 by 2016, and continuation of existing mining in Ecologically Sensitive Zone 2 under strict regulation with an effective system of social audit.
In the Ratnagiri and Sindhudurg districts of Maharashtra, the panel advised that in ESZs 1 and 2, no new polluting (red and orange category) industries, which would include coal-based power plants, should be permitted to be established, and the existing red and orange category industries should be asked to switch to zero pollution by 2016.
Further, it found that plains and coastal tracts in these districts were under “severe environmental and social stress”.
In all the zones, genetically modified crops should not be allowed, use of plastic bags be prohibited, Special Economic Zones should not be permitted, new hill stations should not be allowed, changing the land use from farmland to non-farm land and the stoppage of diversions of rivers to protect the ecology of the region, and public lands should not be converted into private lands.
The report also suggested a bottom-to-top approach instead of a top-to-bottom approach in governance of the environment, indicating decentralization and more powers to local authorities.
It recommended the establishment of a Western Ghats Ecology Authority under the Environment (Protection) Act, 1986, as a professional body to manage the ecology of the region and to ensure its sustainable development.
Another major recommendation was a ban on growing single commercial crops like tea, coffee, cardamom, rubber, banana and pineapple, which have led to “fragmentation of forest, soil erosion, degradation of river ecosystems and toxic contamination of the environment”.
A policy shift is urgently warranted curtailing the environmentally disastrous practices and switching over to a more sustainable farming approach in the Western Ghats.
The panel had urged the Ministry of Environment and Forests to take critical steps to involve citizens, including proactive and sympathetic implementation of the provisions of the Community Forest Resources of the Forest Rights Act.
It stated that new settlement patterns and development are resulting in hill-cutting and physical changes in slope profile due to roads, terracing and construction.

Implementation:

Environment Minister Jayanthi Natarajan constituted a High-Level Working Group on Western Ghats under former Indian Space Research Organization (ISRO) chief Dr K Kasturirangan, which found that of the nearly 1,750 responses it had examined, 81% were not in favour of the Gadgil recommendations.
In an affidavit filed before the National Green Tribunal in 2014, the Ministry of Environment and Forests submitted that it is examining the recommendations of the K Kasturirangan-led panel and will not process the Gadgil report for further action.
In 2017, the Environment Ministry issued a draft notification, demarcating an area of 56,285 sq km in the Western Ghats as ESA as opposed to the 59,940 sq km recommended by the Kasturirangan committee.
In Kerala, this was brought down to 9,993.7 sq km from the Kasturirangan committee recommendation of 13,108 square km as part of ESA.

Recommendations of the Kasturirangan committee report

The Kasturirangan committee report proposes 37 per cent of the total area of Western Ghats, which is roughly 60,000 square kilometres, to be declared as eco-sensitive area (ESA).
- The state of Karnataka has the highest percentage of the ESA- 46.50 per cent.
The report recommended a blanket ban on mining, quarrying, setting up of red category industries and thermal power projects.
It also stated that the impact of infrastructural projects on the forest and wildlife should be studied before permission is given for these activities.
It also stated that the UNESCO Heritage tag is an opportunity to build global and domestic recognition of the enormous natural wealth that exists in the Western Ghats.
- The 39 sites are located across the Western Ghats and distributed across the states (Kerala 19), Karnataka (10), Tamil Nadu (6) and Maharashtra (4).

Significance of Western ghats

It was accorded the World Heritage status by UNESCO, the Western Ghats are a 1,600-km-long mountain chain running the western coast of the country covering six states — Gujarat, Maharashtra, Goa, Tamil Nadu, Karnataka and Kerala.
These Ghats are home to high mountain forests, which moderate the tropical climate of the region and present one of the best examples of the monsoon system on the planet.
They are home to 325 globally threatened flora, fauna, bird, amphibian, reptile and fish species. About 60 percent of the mountain range is in Karnataka.

Recent News

By 2022, the Centre announced a high-powered committee constituted by the Ministry of Environment, Forest and Climate Change (MoEF&CC) to conduct physical landscaping and submit a detailed report in a year’s time.

2. ‘Zombies’ in our genes helped us evolve, and could help fight cancers

Sub : Science

Sec: Health

Context:

Most viruses can’t really affect the genome but retroviruses buck this trend as they can integrate and reshape the genomes of the hosts they infect.

What are retrovirus?

Retroviruses are viruses with RNA as genetic material and belong to the family Retroviridae of Retroviruses.
They can reverse-transcribe it to DNA and thus insert it into the host’s genome.
They perform reverse transcriptase where they convert the virus’s RNA into a corresponding DNA sequence.

How does retrovirus affect the genome?

In the life cycle of a retrovirus, the reverse-transcribed DNA is integrated into the host’s DNA along with another enzyme called integrase, which acts like glue to bind the two DNA genomes.
Once bound, the viral DNA is called a provirus, and is complete with all the ingredients it needs to be functional.
At the end of this process, the virus practically hijacks human cells and turns them into virus-making factories.
Retroviral genome invasions can sometimes mess up the integration process, causing ‘zombie’ regions in the host’s genome called as endogenous retroviruses (ERVs).
ERVs usually can’t replicate and produce functional proteins since they lack their regulatory regions.
If the abortive integrations involve the germ cells that produce the gametes, sperm cells and ova then the host will be able to transmit its ERVs to its offspring.
Thus retroviruses have left a number of genomic elements in the genome, sort of the genetic fossils of early infections.
These elements have long lost the potential to produce viruses but researchers believe they have played a big hand in the evolution of their hosts.

What is Syncytin?

Syncytins are a class of genes thought to be descended from an ERV.
These genes originally came from viruses and were acquired by chance as the mammalian host evolved.
With time they have became essential for the host because they helped create the placenta, an organ that became crucial to support a growing baby.
This change is thought to have been important for the evolution of mammals with placentas from their egg-laying ancestors.

What is MERVL-gag?

Scientists recently discovered a protein called MERVL-gag derived from an ERV.
They found that MERVL-gag plays a key role in controlling some other proteins during the transition.
They also found MERVL-gag works closely with another protein called URI, which helps the embryo transition from totipotency to pluripotency.

3. Tanzania Evicting Tens of Thousands Of Maasai: HRW

Sub: Geo

Sec: Human geo

Eviction of Maasai from Ancestral Lands:

The Tanzanian government is forcibly evicting tens of thousands of Maasai from their ancestral lands.
Human Rights Watch reported that government rangers have beaten some Maasai community members with impunity.

Tensions and Relocation Program:

Long-standing tensions exist between the Tanzanian authorities and the nomadic Maasai community.
The government’s relocation program, launched in 2022, aims to move approximately 82,000 people from the Ngorongoro Conservation Area to Handeni district by 2027.

Conservation and Tourism Controversy

The government claims the relocation is to conserve the UNESCO World Heritage site from human encroachment.
Human Rights Watch argues that the land will be used for conservation and tourism purposes, sparking international criticism.
As a result, the World Bank and the European Union have withdrawn funding from the initiative.

About Maasai community:

The Maasai are a Nilotic ethnic group (people indigenous to the Nile Valley) living in northern, central, and southern Kenya, and northern Tanzania, near the African Great Lakes region.
They speak the Maa language, part of the Nilotic language family, related to Dinka, Kalenjin, and Nuer languages.
While most Maasai speak Swahili and English, some elders in rural areas primarily use the Maa language.
Population and Census Data:
- The 2019 census reported 1,189,522 Maasai in Kenya, up from 377,089 in the 1989 census.
- However, many Maasai distrust the census process, often refusing to participate or providing false information, viewing it as government interference.

4. How can people across the Indian Subcontinent prevent fatal encounters with sloth bears? Learn from species’ behaviour towards tigers, advise scientists

Sub: Env

Sec: Species in news

Sloth Bear:

The sloth bear, also known as the Indian bear, is native to the Indian subcontinent and is the only species in the genus Melursus.
This myrmecophagous bear primarily feeds on fruits, ants, and termites.
It is listed as vulnerable on the IUCN Red List due to habitat loss and degradation.

Physical Characteristics and Evolution:

The sloth bear is also referred to as the “labiated bear” because of its long lower lip and palate, which it uses for sucking up insects.
It has distinctive features, including long, shaggy fur, a mane around the face, and long, sickle-shaped claws.
The species is lankier than brown and Asian black bears and shares characteristics with insectivorous mammals, having evolved from an ancestral brown bear during the Pleistocene through divergent evolution.

Breeding and Interaction with Humans

Sloth bears breed in the spring and early summer, with births occurring near the beginning of winter.
Historically, the sloth bear’s habitat has been significantly reduced, and their population diminished due to hunting for food and products like bacula and claws.
Sloth bears have also been tamed and used as performing animals and pets.

Sloth Bear Characteristics and Aggressiveness:

Despite having a diet similar to the largely non-aggressive giant pandas, sloth bears are notably aggressive, with around 7-8% of their attacks on humans being fatal, compared to 14% for global brown bear attacks.
Its aggressive behaviour is attributed to its evolutionary history alongside now-extinct predators and the existing Bengal tiger.

Evolutionary Defense Mechanisms:

Sloth bears exhibit aggressive defensive behaviour towards tigers, which are a significant threat. They are known to charge at tigers, a strategy that has been successful in deterring attacks, with 86% of observed interactions ending without physical contact.
The bear’s physical adaptations, including long, blunt claws suited for digging rather than climbing, limit their escape options, reinforcing their aggressive defence strategy.

Source: DTE

5. Bank Credit Growth and Loan Trends

Sub: Eco

Sec: Monetary Policy

Overall Bank Credit Growth
- Decline in Growth: Reduced to 13.9% as of June 30, 2024, from 16.3% in June 2023.
- Non-Food Credit: Total stands at ₹163.46 lakh crore.
Credit Card Outstanding
- Increase: Up by ₹51,000 crore to ₹273,044 crore.
- Growth Rate: Slowed to 23.3% from 37.6% a year ago.
Gold Loans
- Significant Increase: Grew by 30.5% to ₹123,776 crore from ₹94,872 crore.
- Attributed to the rise in gold prices prompting more pledges.
Personal Loan Segment
- Growth Rate: Slowed to 16.6% (₹50.91 lakh crore) from 21.3% a year ago.
- Housing Loans: Accelerated growth at 18.2% to ₹24.27 lakh crore from ₹20.52 lakh crore.
Impact of RBI Measures
- Risk Weights: Increased by 25% on unsecured loans, credit card receivables, and NBFCs.
- Aimed at mitigating risks in these segments.
Sectoral Credit Growth
- Agriculture & Allied Activities: Remained robust at 17.4%, though down from 19.7%.
- Industry Credit: Grew at 7.7% to ₹37.12 lakh crore, slightly up from 7.4%.
- Services Sector: Substantial moderation to 15.1% from 26.8%, primarily due to slower growth in NBFCs and trade.
Deposit Growth
- Absolute Growth: Deposits expanded by ₹23.9 lakh crore over the last 12 months, reaching ₹211.8 lakh crore as of July 12, 2024.
- Deposit Growth: Expected to remain prominent in FY25, with banks intensifying efforts to strengthen their liability franchises.

6. Surge in India’s Mineral Imports

Sub: Eco

Sec: External Sector

Overview:

India has experienced a significant increase in its major mineral imports, with an almost 80% rise in value terms over the past five years, reaching ₹68,633 crore in FY24.
However, there was a 2% year-over-year decrease from ₹70,125 crore in the previous fiscal year.
In FY19, the value of these imports was ₹38,604 crore.

Major Minerals:

Key Minerals Imported:
- The main minerals include copper ore concentrates, phosphorite, manganese ore, limestone, iron ore, bauxite, asbestos, sulphur, magnesite, and fluorspar.
- These ten minerals make up 97% of India’s mineral imports.
Volume Increase:
- The volume of these major mineral imports rose by 9% over the five-year period, totaling 619.42 lakh tonnes.

Top Imported Minerals:

Copper Ore Concentrates:
- Leading the list, copper ore concentrate imports were valued at ₹25,951 crore, constituting nearly 40% of the total mineral imports in FY24.
- This figure more than doubled from ₹12,146 crore five years ago.
Phosphorite:
- Phosphorite imports accounted for ₹12,649 crore (approximately 20% of the total), also doubling from ₹5,625 crore five years prior.
Other Significant Imports:
- Manganese ore: ₹7,760 crore
- Limestone: ₹6,616 crore
- Bauxite: ₹4,397 crore
- Notably, iron ore imports decreased, whereas manganese ore and bauxite shipments surged by 60-80% between FY19 and FY24.

Volume Insights:

In volume terms, limestone imports were the highest at 338.09 lakh tonnes (55% of total imports), followed by phosphorite at 55.98 lakh tonnes (14%).

Critical Minerals:

Apart from lithium-ion and copper, the import of 24 categories of critical minerals in FY24 was valued at ₹1,396.6 crore, with a volume of 82,260 tonnes.

Conclusion:

The increase in India’s mineral imports highlights the country’s growing demand for these resources, which are crucial for various industries. The shift in import patterns, including the significant rise in specific minerals like copper ore concentrates and phosphorite, indicates changes in industrial needs and economic priorities.

7. SEBI Tightening May Impact F&O Volumes and Earnings of Bourses

Sub: Eco

Sec: Capital market

Background:

The Securities and Exchange Board of India (SEBI) has proposed measures to curb excessive trading in equity derivatives.

Potential Impact:

Reduction in F&O Volumes:
- The proposed regulations could lead to a 30-40% reduction in equity derivatives volumes.
- This reduction is expected to affect exchanges and brokers who focus heavily on retail investors.
Earnings Impact:
- The impact on earnings will likely be significant for the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE):
- NSE: The options segment contributes approximately 60% of NSE’s revenue, based on estimates for FY25. The earnings impact for NSE could be 25-30% by FY26.
BSE: The options segment accounts for 40% of BSE’s revenue. The projected earnings impact for BSE is 15-18%.
MCX: No impact is expected on the Multi Commodity Exchange (MCX) from these regulations.
NSE IPO Concerns:
- A reduction in earnings could impact NSE’s pricing power for its anticipated IPO.

Key SEBI Proposal:

One major proposal from SEBI is to restrict weekly options to a single contract per exchange.

Concentration of Turnover:

On the BSE, the majority of the notional turnover occurs on expiry days (96-97%), while for the NSE’s Nifty and Bank Nifty, it is 64% and 62% respectively.

Expert Opinions:

BSE’s Strategy: The BSE may need to drop one index, likely the Bankex, due to lower income from derivatives compared to the NSE.
Market Share Gap: The measures may reduce BSE’s chances of closing the market share gap with NSE in the derivatives segment.

Conclusion:

The proposed SEBI regulations aim to temper the frenzied trading activity in the derivatives market, which could lead to significant shifts in market dynamics and earnings for major Indian exchanges like the NSE and BSE. The full impact will depend on the implementation of these measures and the market’s response.

Understanding Derivatives:

Financial contracts deriving value from an underlying asset (stocks, commodities, currencies).
Types: Futures and options.
- Futures: Obligation to buy/sell an asset at a predetermined price on a specific date.
- Options: Right, not obligation, to trade an asset at a specific price on a specific date.

SEBI’s Proposed Measures:

Minimum Contract Size:
- Increase to ₹15 lakh – ₹20 lakh; after six months, possibly ₹20 lakh – ₹30 lakh.
- Current Size: ₹5 lakh – ₹10 lakh.
Upfront Collection of Option Premium:
- Brokers to collect premiums upfront from clients.
- Current Practice: Only short options require margin; long options require premium payment.
Intraday Monitoring of Position Limits:
- MIIs (Market Infrastructure Institutions) to monitor intraday limits.
- Current Practice: Monitored at end-of-day, potential for undetected intraday positions.
Rationalisation of Weekly Index Products:
- Provide weekly options on a single benchmark index per exchange.
- Current Practice: Weekly contracts across different indices, resulting in speculative movement.
Removal of Calendar Spread Benefit on Expiry Day:
- No margin benefit for positions expiring on the same day.
Rationalisation of Options Strikes:
- Uniform strike intervals up to a 4% coverage near the index price, increasing as it moves away.
- Limit: Not more than 50 strikes at contract launch.
Increase in Margin Near Contract Expiry:
- Increase Extreme Loss Margin (ELM) by 3% the day before expiry, and 5% on expiry day.

Rationale for Measures:

Union Budget 2024-25:
- Securities Transaction Tax (STT): Doubled for F&O of securities, effective October 1, 2024.
- Increased to 0.02% and 0.1%, respectively.
Market Impact:
- 92.50 lakh unique individuals and firms traded in the NSE index derivatives, incurring a cumulative trading loss of ₹51,689 crore in FY 2023-24.
- Only 15% of investors made a net profit.

8. Bank of Japan Raises Interest Rate for Second Time in 17 Years

Sub: Eco

Sec: monetary policy

Interest Rate Increase
- Interest Rate: Raised to 0.25% from 0% to 0.1%.
- This is the second rate hike in 17 years, following the first in March 2023.
Monetary Policy Adjustment
- The BoJ plans for further rate increases if the economy performs as expected.
- Aims to adjust the degree of monetary accommodation based on economic conditions.
Impact on Yen
- The decision caused the yen to rise to 150.41 against the dollar.
- Japan’s Ministry of Finance spent nearly $37 billion in the past month to support the yen.
Economic Context
- Wages are rising significantly, with unions achieving the largest increases in three decades.
- Inflation has been above the BoJ’s 2% target since April 2022, moderating the impact of wage growth on consumption.
BoJ Governor’s Remarks
- Governor Kazuo Ueda noted the rate hike remains low in real terms.
- He emphasized that the increase won’t significantly harm the economy and highlighted strong personal consumption.
Reduction in Bond Purchases
- The BoJ plans to halve monthly Japanese Government Bond purchases from six trillion yen ($40 billion) over the next two years.
Market Reaction
- The yen has shown volatility, especially strengthening recently due to expectations of a BoJ rate hike.
- Earlier in July, the yen reached its weakest level against the dollar since 1986.
Future Outlook
- Attention shifts to the U.S. Federal Reserve for its upcoming rate decision.
- Analysts expect a potential pause in rate hikes by the Fed, with speculation about a rate cut in September.

9. Haniyeh’s death means for Israel-Iran rivalry

Subject: IR

Sec: Places in news

Context:

Israel carried out a massive air strike on Hodeidah, the Red Sea port city in Yemen, that is controlled by the Houthi militia, in response to a drone attack by the Houthis that had hit Tel Aviv.

More on News:

The common factor of all three groups — Yemen’s Houthis, Lebanon’s Hezbollah, and Palestine’s Hamas — is that all of them are backed by Iran, Israel’s chief rival in West Asia.
The killing of Haniyeh, the most high-profile leader of Hamas outside Gaza, would be particularly seen as a victory by the Israelis.
Haniyeh was arguably the most powerful leader of Hamas after Sheikh Ahmed Yassin and Abdel Aziz al-Rantisi.
In 2006, Haniyeh led the group to victory in parliamentary elections in the West Bank and Gaza, ending the monopoly of Fatah, the party of Palestinian Authority President Mahmoud Abbas (Abu Mazen).

Two challenges:

The PA’s international backers, mainly in the West, were not ready to accept a government run by Hamas, which was designated as a terrorist group by Israel and some Western countries.
Abbas and Fatah were unhappy with a Hamas Prime Minister.
The PA faced a major economic crisis as financial assistance from the West dried up. Tensions broke out between Fatah and Hamas.
Abbas then dissolved the elected Hamas government, a move welcomed by Israel and the West; but rejected by Hamas and Haniyeh.
This led to a civil war between the two Palestinian factions, with Fatah expelling Hamas from the West Bank and Hamas capturing Gaza and expelling Fatah from the enclave.

10. Migrants seeking refuge in Italy could be taken to Albania pending asylum decisions

Subject: IR

Sec: Places in news

Context:

Migrants rescued at sea while attempting to reach Italy may see themselves transported to Albania beginning next month while their asylum claims are processed, under a controversial deal in which the small Balkan country will host thousands of asylum-seekers on Italy’s behalf.

More on News:

The five-year deal, signed by Meloni and her Albanian counterpart, Eid Rama, provides for the sheltering of up to 3,000 migrants picked up by the Italian coast guard in international waters each month. They will be screened initially on board the ships that have rescued them, before being sent to Albania for additional screening.
Those who are sent to Albania will retain their right under international and European Union law to apply for asylum in Italy and have their claims processed there, but their movement in and out of the centres in Albania will be restricted.
The International Rescue Committee (IRC) highlights the risks associated with the scheme and urges the EU and its member states not to use this dangerous model as a blueprint for their own approaches to asylum and migration.
The first delay came due to the crumbling soil at the Gjader camp site, which needed intervention to consolidate it. Also, the heat wave in July forced authorities to impose a break during the hottest hours of the day.

Albania:

Officially known as the Republic of Albania is a country in Southeastern Europe.
It is situated in the Balkans, and is located on the Adriatic and Ionian Seas within the Mediterranean Sea
It shares land borders with Montenegro to the northwest, Kosovo to the northeast, North Macedonia to the east, and Greece to the
Tirana is its capital and largest city.
Albania joined the UNSC as a non-permanent member for the first time in 2022.
Italy’s top court ruling that it is illegal to return sea migrants to Libya aligns with Article 98 of the United Nations Convention on the Law of the Sea (UNCLOS).
- This article obligates states to help anyone found at sea in danger of being lost and to rescue those in distress if they can do so without serious danger to their own ship or people.

11. Former Union Health Secretary Preeti Sudan appointed UPSC chairperson

Subject: Polity

Sec: National Body

Context:

“The President has approved the appointment of Preeti Sudan, Member, UPSC under clause (1A) of the Article 316 of the Constitution for performing the duties of Chairman, UPSC with effect from August 1, 2024, till further orders or till April 29, 2025, whichever is earlier,” a July 29 letter addressed by Additional Secretary, Department of Personnel and Training to Secretary, UPSC said.

More on News:

“The President has approved the appointment of Preeti Sudan, Member, UPSC under clause (1A) of the Article 316 of the Constitution for performing the duties of Chairman, UPSC with effect from August 1, 2024, till further orders or till April 29, 2025, whichever is earlier,” a July 29 letter addressed by Additional Secretary, Department of Personnel and Training to Secretary, UPSC said.

Appointment of UPSC Chairman:

As per Article 312 of the Indian Constitution, the Parliament is entitled to create one or more All India services (including an All-India Judicial Service) common to the Union and the States.

The recruitment to all these services is made by the Union Public Service Commission (UPSC).
Appointed by the President of India.
UPSC comprises a chairman and 10 members.
Each member holds office for a tenure of 6 years or 65 years.
The member can be removed by the President of India following the procedure provided in the constitution.
UPSC is a Constitutional body.
It comes under the Part XIV of the Constitution of India.