Daily Prelims Notes 5 April 2022

Daily Prelims Notes

5 April 2022

Table Of Contents

1. Satellite Phones
2. The U.N. climate report’s emissions pathways – decoded
3. Pollution From Dumpsite Fires
4. Biomining
5. Hyderabad’s Biological E to get mRNA technology from WHO to produce Covid vaccines
6. Decision on pesticide ban likely this week
7. Relation of BOP with the exchange rate
8. The India-Australia FTA
9. External exposure and risk

1. Satellite Phones

Subject: Science & Tech

Section: Space Science

Context- There is renewed interest in satellite communication deployments, with Starlink, operated by SpaceX, and OneWeb, promoted by Bharti Global, vying to enter the Indian market for offering satellite broadband connectivity to every corner of the country.

Concept-

• A satellite phone is a type of mobile phone that connects to other phones or the telephone network by radio through orbiting satellites instead of terrestrial cell sites, as cellphones do.
• SAT phones rely on a network of satellites for communication. They are rarely affected by violent storms and, depending upon their system architecture, work virtually anywhere.
• The advantage of a satphone is that its use is not limited to areas covered by cell towers; it can be used in most or all geographic locations on the Earth’s surface.
• They are capable of receiving and making calls anywhere in the world, even in the remotest parts be it the Himalayas or an uninhabited island in the Pacific.
• Traditional SAT phone buyers are government and public safety agencies, energy companies, shippers, and search and rescue organisations.
• However, an increasing number of private individuals are buying SAT phones as a backup against losing their ability to communicate with the world.
• The concept of a satellite phone is not new. In fact, the first satellite phone was launched by Motorola in 1989.

Difference between Satellite Phone and Cell Phone: 

2. The U.N. climate report’s emissions pathways – decoded

Subject: Environment

Section: Climate Change

Context- The U.N. climate science panel report released on Monday lays out several paths for greenhouse gas emissions that could limit climate change or, alternatively, see it spiral out of control.

Concept-

• The United Nations’ climate science body, the Intergovernmental Panel on Climate Change (IPCC) published the third instalment of its Sixth Assessment Report (AR6) April 4, 2022.
• The report prepared by the IPCC Working Group III (WG-III) focuses on the mitigation of climate change, ie, the solutions necessary to halt global warming.
• six takeaways from the SPM titled the Summary for Policymakers:
  1. Greenhouse gas (GHG) emissions were 54 per cent higher in 2019 than they were in 1990, but growth is slowing.
  2. Least developed countries emitted only 3.3 per cent of global emissions in 2019.
  3. Pledges to the Paris Agreement are insufficient, emissions must fall 43 per cent by 2030 compared to 2019.
  4. Abundant and affordable solutions exist across sectors including energy, buildings, and transport, as well as individual behavioural changes.
  5. The impact on GDP would be negligible and the long-term benefits of cutting emissions immediately would outweigh the initial costs.
  6. Finance falls short, especially in developing countries, but there is sufficient money in the world to close this gap.
• The pathways for mitigating Cimate change:

3. Pollution From Dumpsite Fires

Subject: Environment

Section: Pollution

Context- ‘Unscientific’ disposal, treatment of waste behind massive fire at Ghazipur landfill, say experts.

Concept-

• A massive fire broke out at the Ghazipur landfill on the afternoon of March 28, 2022 near East Delhi Municipal Corporation (EDMC).
• Toxins from the fire will spread into adjoining habitations and public spaces, including Noida, Ghaziabad, Khichdipur residential area and Ghazipur market, experts noted.
• Key pollutants emitted by dumpsite fires include:
  • Particulate matter
  • Oxides of sulphur and nitrogen
  • Dioxins furans
  • Polycyclic aromatic hydrocarbons
  • Volatile organic compounds
• Impacts of Dumpsites Fires:
  • First, dumpsite fires present a human health and safety risk for the workers, firefighters and informal waste pickers.
  • Second, fires contribute to slope instability (mass and volume reduction due to fire).
  • Third, the potentially harmful emissions from the fires leave behind a thick and dense blanket of smoke. It contains massive gaseous pollutants such as oxides of nitrogen and sulphur, particulate matter.
  • Various physical, chemical and microbiological processes generate heat in unregulated dumpsites, leading to surface and sub-surface fires.
  • Decomposition of biodegradable waste, for instance, increases the temperature at unregulated dumpyards.
  • The sub-surface fires at dumpsites result from air filtration into the waste mass. The waste and the methane generated in the landfill act as fuel. Since the fire is below the surface, it is difficult to detect, gauge its extent and extinguish.
• Solid Waste Management Rules, 2016 mandates compaction of waste and daily soil cover of 10 centimetres (soil / inert debris / construction material).
  • Compaction of waste is important to remove the air pockets in the waste heap, which can otherwise accumulate methane.

4. Biomining

Subject: Environment

Section: Pollution

Context- Urban local bodies need a comprehensive policy for reuse of reclaimed land.

Concept-

• The Union Ministry of Housing and Urban Affairs recognised that the unlined dumpsites in India are creating various irreversible environmental hazards. The major sources of pollution are:
  • Puddles of leachate flowing through the adjacent area and reaching the water table Long-term issues of greenhouse gas emissions
  • Surface water and groundwater pollution
  • Dumpsite surface fires
  • Limitations on urban development that make this mode of disposal unmanageable
• The Centre has earmarked Rs 1,41,600 crore under its flagship Swachh Bharat Mission 2.0 (SBM 2.0), with a goal of achieving “garbage-free cities”. The focus of the mission is on remediation of all legacy dumpsites in the country by biomining.

What is Biomining?

• Biomining is mineral processing with microbes.
• Biomining is the process of using microorganisms (microbes) to extract metals of economic interest from rock ores or mine waste.
• Biomining techniques may also be used to clean up sites that have been polluted with metals.
• Valuable metals are commonly bound up in solid minerals. Some microbes can oxidize those metals, allowing them to dissolve in water. This is the basic process behind most biomining, which is used for metals that can be more easily recovered when dissolved than from the solid rocks.
• A different biomining technique, for metals which are not dissolved by the microbes, uses microbes to break down the surrounding minerals, making it easier to recover the metal of interest directly from the remaining rock.

What metals are currently biomined?

• Most current biomining operations target valuable metals like copper, uranium, nickel, and gold that are commonly found in sulfidic (sulfur-bearing)
• Microbes are especially good at oxidizing sulfidic minerals, converting metals like iron and copper into forms that can dissolve more easily.
• Other metals, like gold, are not directly dissolved by this microbial process, but are made more accessible to traditional mining techniques because the minerals surrounding these metals are dissolved and removed by microbial processes.
• When the metal of interest is directly dissolved, the biomining process is called “bioleaching,” and when the metal of interest is made more accessible or “enriched” in the material left behind, it is called “biooxidation.”

What processes are used to biomine?

• Heap leaching: freshly mined material is moved directly into heaps that are then bioleached.
• Dump leaching: low-value ore or waste rock is placed in a sealed pit and then bioleached to remove more of the valuable metals from the waste pile.
• Agitated leaching: crushed rocks are placed into a large vat that is shaken to distribute the microbes and material evenly and speed up the bioleaching process.
• Leaching times vary from days to months, making this process slower than conventional mineral extraction techniques.
• Dump and heap leaching are the oldest and most established biomining techniques, but the use of agitated leaching is becoming more common for minerals that are resistant to leaching, including some copper sulfides like chalcopyrite.

What are the environmental risks of biomining?

• the release of the microbes themselves into the local environment are considered to be relatively small.
• The greatest environmental risks are related to leakage and treatment of the acidic, metal-rich solution created by the microbes.
• This risk can be managed by ensuring that biomining is conducted under controlled conditions with proper sealing and waste management protocols.

How common is biomining?

• Biomining is currently a small part of the overall mining industry.
• worldwide, 10-15% of copper is extracted using bioleaching.
• Biomining is also important in the gold industry, where roughly 5% of global gold is produced using biooxidation.

5. Hyderabad’s Biological E to get mRNA technology from WHO to produce Covid vaccines

Subject: Science

Section: Biotechnology

Context: Hyderabad-based vaccine manufacturer Biological E. Limited (BE) on Monday announced that it had been selected as a recipient of mRNA technology from the World Health Organisation (WHO) technology transfer hub.

Background: The company was selected by WHO’s Advisory Committee on Vaccine Product Development (ACPDV) after they examined a number of proposals from India.

mRNA vaccine technology transfer hub

• Announced on 21 June 2021, the objective of the technology transfer hub is to build capacity in low- and middle-income countries to produce mRNA vaccines through a centre of excellence and training (the mRNA vaccine technology hub). The hub is located at Afrigen, Cape Town, South Africa, and will work with a network of technology recipients (spokes) in low- and middle-income countries.
• How it will work ?
  • Concretely, the Hub at Afrigen will share technology and technical know-how with local producers. WHO and partners will bring training and financial support to build the necessary human capital for production know-how, quality control and product regulation, and will assist where needed with the necessary licenses.
  • The Hub and partners create a global common good for the benefit of all by providing a range of services along the entire vaccine value chain. Recipients will be able to contribute to the global effort to increase local vaccine production capacity, and may sign agreements with producers or develop vaccines locally.

WHO’s Advisory Committee on Vaccine Product Development (ACPDV)

• ACPDV is an independent standing WHO committee of experts which provides external advice to WHO related to priority infectious disease pathogens, associated vaccine and monoclonal antibody product development approaches and related manufacturing and delivery technologies.
• The committee’s remit covers disease areas where there is, or may be, substantial disease burden in low- and middle-income countries (LMICs), where no vaccine related products currently exist, but where there is ongoing product development activity which may benefit from WHO guidance, or technologies that could expedite availability and access of vaccine products in LMICs.

About mRNA Vaccine

https://optimizeias.com/mrna-vaccines/

About DNA based Vaccine

https://optimizeias.com/dna-based-vaccines/

6. Decision on pesticide ban likely this week

Subject: Agriculture

Section: Pesticides

Context: Union Agriculture Ministry is likely to consider this week the expert panel’s recommendations on the proposed ban on 27 pesticides.

Background:

• The long-pending ban on 27 widely-used pesticides, which includes 12 insecticides, 8 fungicides and 7 herbicides, is poised to take final shape soon, with the Centre having already issued a draft order banning the manufacturing and sale of these on grounds of the grave risk they pose to humans and animals.
• Ministry set up an expert committee under TP Rajendran, a former assistant director general of Indian Council of Agricultural Research (ICAR), to consider the objections and suggestions taking into consideration all aspects related to safety, toxicity, efficacy, updated status of submission of required study and data, technical and scientific requirements, availability of safer substitutes, farmers interests and ban status in other countries.
• The committee submitted its report in November 2021

Pesticide usage in India:

• India is the 2^nd largest pesticide manufacturer in the world. It is the 5^th largest exporter after China, USA, Germany and France.
• However India accounts only for 1% of the global pesticide consumption. Though the ‘per hectare usage’ is relatively low compared to rest of the countries, indiscriminate use (in terms of quantity and timing) is still an issue.

Items covered under draft notification:

• The draft notification, titled ‘Banning of Insecticides Order 2020’, prohibits the import, manufacture, sale, transport, distribution and use of 27 pesticides, including Acephate, Atrazine, Benfuracarb, Butachlor, Captan, Carbofuran, Chlorpyriphos, 2,4-D, Deltamethrin and others.
• It also proposes to ban the chemical Malathion that was used extensively by the government during the recent locust attack.
• Out of the 27 pesticides which are proposed to be banned three are Monocrotophos, Methomyl and Carbofuran which are associated with high levels of toxicity leading to even farmers’ deaths.

On which crops are these 27 pesticides mainly used?

• According to Punjab Agriculture University (PAU), these pesticides are used on almost all crops — rice, wheat, maize, sugarcane, cotton, oilseeds, various vegetables, fruit etc.

What are the alternatives available to farmers?

• Integrated Pest Management (IPM) techniques, which are using cost-effective mechanical methods

• Bio-pesticides
• Newer molecular target-specific low toxicity pesticides, usage of which is extremely low, and which are a little more expensive
• Pheromone traps, which are quite economical, are meant for mating disruption, for suppression of pest population, and mass trapping. Such traps slowly release synthetic attractants which help in the detection of a single species of insect in the fields.
• Neem-based biopesticides, which are environment-friendly, is very effective cost-wise and yield-wise. It’s bitter taste keeps pests away from plants.
• Moreover, the right kind of seeds and precise irrigation can also help farmers keep the pests away.

7. Relation of BOP with the exchange rate

Subject: Economy

Section: External Sector

Context: exchange rate and BOP

India’s BoP is a ledger of its transactions with the rest of the world. It shows how much money went out of the country and how much money came into the country through international transactions.

These transactions could be:

• Trade (export or import) of goods (such as cars, gadgets, or raw materials) or services (such as an Indian company selling computer software to someone in the US or an American firm providing banking services to some Indians).
• Investments — such as an Indian buying some land in the US or an American firm investing in the Indian stock exchanges — and
• Exchange of loans and aids between Indian and other countries of the world.

The relationship between balance of payments and exchange rates under a floating-rate exchange system will be driven by the supply and demand for the country’s currency and all transactions taking place with other countries.

• Suppose there is surplus in balance of payments-It means money inflows are greater than the money outflows due to the net positive international transactions.

Example-Let initial exchange rate be Rs. 40 = $1. An increase in demand for India’s exportables means an increase in the demand for Indian rupee relative to the demand of the US$ and decrease in the supply of the Indian rupee relative to the supply of the US$  . Consequently, the dollar depreci­ates while the Indian rupee appreciates.

• Suppose there is deficit in balance of payments-It means money outflows are greater than the money inflows due to the net negative international transactions.

Example-Let initial exchange rate be Rs. 40 = $1. An increase in demand for India’s importables means an increase in the demand for the US$ relative to the demand of the Indian rupee and decrease in the supply of the US $ relative to the supply of the Indian rupee. Consequently, the dollar appreci­ates while the Indian rupee depreciates.

BOP always balances in accounting sense:

The BOP figures are published in a single column with positive (credit) and negative (debit) signs. Since payments side of the account enumerates all the uses which are made up of the total foreign purchasing power acquired by this country in a given period, and since the receipts of the accounts enumerate all the sources from which foreign purchasing power is acquired by the same country in the same period, the two sides must balance. The entries in the account should, therefore, add up to zero.

In reality, total receipts may diverge from total payments because of: (i) the difficulty of collecting accurate trade information; (ii) the difference in the timing between the two sides of the balance; and (iii) a change in the exchange rates, etc.

Because of such measurement problems, resources are made to ‘balancing items’ that intend to eliminate errors in measurement. The purpose of incorporating this item in the BOP account is to adjust the difference between the sums of the credit and the sums of the debit items in the BOP accounts so that they add up to zero by construc­tion. Hence the proposition ‘the BOP always balances’. It is a truism. It only suggests that the two sides of the accounts must always show the same total. It implies only equality. In this book-keeping sense, BOP always balances.

Example-The net result of a current account deficit (of $ 26.6 billion) and a capital account surplus (of $ 90.1 billion) is that a total of 63.5 billion US dollars have entered the Indian economy — and the BoP accounts — during April and December 2021. The only way to balance the BoP is for some authority to take these excess dollars out of the equation. That authority is the RBI and it takes out these dollars and keeps it with itself as the forex reserves.

RBI management of exchange rate through forex exchange 

In March 1992, Liberalised Exchange Rate Management System (LERMS) involving the dual exchange rate was instituted. A unified single market-determined exchange rate system based on the demand for and supply of foreign exchange replaced the LERMS effective March 1, 1993.

The Reserve Bank’s exchange rate policy focuses on ensuring orderly conditions in the foreign exchange market. For this purpose, it closely monitors the developments in the financial markets at home and abroad. When necessary, it intervenes in the market by buying or selling foreign currencies. The market operations are undertaken either directly or through public sector banks.

In addition to the traditional instruments like forward and swap contracts, the Reserve Bank has facilitated increased availability of derivative instruments in the foreign exchange market. It has allowed trading in Rupee-foreign currency swaps, foreign currency-Rupee options, cross-currency options, interest rate swaps and currency swaps, forward rate agreements and currency futures.

The central bank can also influence the value of the rupee by way of monetary policy. RBI can tweak the repo rate (the rate at which RBI lends to banks) and the liquidity ratio (the portion of money banks are required to invest in government bonds) to control rupee.

RBI can raise the repo rate, which leads to a rise in interest rates, bond yields and return on debt papers, drawing more investor money to chase better returns if the same is low in other markets. On the other hand, higher interest rates stem money circulation in the economy, leaving more money in the hands of the RBI to manage the currency demand-supply situation.

The Reserve Bank’s exchange rate policy focuses on ensuring orderly conditions in the foreign exchange market. For this purpose, it closely monitors the developments in the financial markets at home and abroad. Consider the various steps taken by the RBI to prevent depreciation of Indian rupee

1. Selling of forex
2. Buying of forex
3. Sterilization
4. Currency swap agreement
5. Rise in repo rate

8. The India-Australia FTA

Subject: Economy

Section: External Sector 

Context: India-Australia FTA

Concept:

The India-Australia FTA, officially called the Australia-India Economic Cooperation and Trade Agreement, is the first trade agreement signed by India with a developed economy after more than a decade.

Details:

The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries, and covers areas like:

• Trade in Goods
• Rules of Origin
• Trade in Services
• Technical Barriers to Trade (TBT)
• Sanitary and Phytosanitary (SPS) measures
• Dispute Settlement
• Movement of Natural Persons.
• Telecom
• Customs Procedures
• Pharmaceutical products, and Cooperation in other Areas.

ECTA provides for an institutional mechanism to encourage and improve trade between the two countries.

The ECTA between India and Australia covers almost all the tariff lines dealt in by India and Australia respectively.

• Australia will provide zero-duty market access for 96.4 per cent value of Indian exports (98 percent of tariff lines) on the first day of implementation of the agreement. Tariffs on the remaining 113 tariff lines, amounting to 3.6 per cent of India’s exports, will be phased out in five years.
• India will also eliminate tariffs on more than 85 percent of the Australian goods exports immediately, rising to almost 91 percent in over 10 years.

Under the agreement, Indian graduates from STEM (Science, Technology, Engineering and Mathematics) will be granted extended post-study work visas.

Australia will also set up a programme to grant visas to young Indians looking to pursue working holidays in Australia.

The exclusion list:

India has managed to completely shield its dairy sector from any tariff reduction under the FTA while excluding most sensitive agriculture items such as chickpea, walnut, pistachio nut, wheat, rice, bajra, apple, sunflowers seed oil and sugar.

Other items where no concessions have been extended include silver, platinum, jewellery, iron ore, and most medical devices.

Types of Trade Agreements

Free Trade Agreement (FTA):

A free trade agreement is an agreement in which two or more countries agree to provide preferential trade terms, tariff concession etc. to the partner country.

India has negotiated FTA with many countries e.g. Sri Lanka and various trading blocs as well e.g. ASEAN.

Preferential Trade Agreement (PTA):

In this type of agreement, two or more partners give preferential right of entry to certain products. This is done by reducing duties on an agreed number of tariff lines.

Tariffs may even be reduced to zero for some products even in a PTA. India signed a PTA with Afghanistan.

Comprehensive Economic Partnership Agreement (CEPA):

Partnership agreement or cooperation agreement are more comprehensive than an FTA.

CEPA covers negotiation on the trade in services and investment, and other areas of economic partnership.

India has signed CEPAs with South Korea and Japan.

Comprehensive Economic Cooperation Agreement (CECA):

CECA generally covers negotiation on trade tariff and TRQ (Tariff Rate Quotas) rates only. It is not as comprehensive as CEPA. India has signed CECA with Malaysia.

9. External exposure and risk

Subject: Economy

Section: External Sector

Context:

Global inflation, the launch of a monetary tightening cycle in the US with increased interest rates, depreciating exchange rates and the fallout of the war in Ukraine are forcing many countries to borrow their way out of balance of payments difficulties.

Concept:

India’s position

India seems less affected by these circumstances due to:

• Low external debt-India’s external debt-to-GDP ratio stood at 20 per cent at the end of 2021.
• Large foreign exchange reserves– at $632 billion seem ample to handle any contingency.

Issue:

• Rise in external commercial borrowing
• Easy money policies in the developed countries-given the differentials in interest rates between global and domestic markets, Indian financial and non-financial firms borrowed money abroad to finance their expansion at home as well as to substitute high-cost domestic debt with cheaper foreign debt.
• Decline in the share of long-term debt in the total from 95 per cent at the end of September 1999 to 82 per cent at the end of December 2021
• Concentrated debt exposure- volumes of debt in the hands of a few large corporations and corporate groups.
• Non revenue generating debt-Much of this debt has been incurred to invest in activities that are not export oriented and are unlikely to yield revenues denominated in dollars.
• The rupee depreciation vis-à-vis the dollar-likely to increase the value of external debt
• Higher Portfolio investors- still account for a large share of India’s “borrowed” reserves. These investors  are prone to exit rather rapidly in herd-like fashion when conditions turn for the worse.

Factors making the external debt portfolio stable and also sustainable.

• Low reliance on external borrowing and issuance of majority of securities at fixed coupon.
• External borrowing from official sources which are of long term and concessional in nature.
• Low issuance of short-term bonds with a view to elongate the maturity profile.
• Low debt to GDP ratio and low external debt to total debt ratio
• High Indian currency denominated external debt
• If the Interest Rate-Growth Differential (IRGD), the difference between the interest rate and growth rate, becomes negative, the governments need not worry about deficits since the growth would take care of the interest payment obligations. This would ensure the sustainability of public debts.
• Diversified debt exposure
• Higher forex reserves