Daily Prelims Notes 9 March 2022

March 9, 2022
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Daily Prelims Notes

9 March 2022

Table Of Contents

1. Rupee-Rouble trade

Subject : Economy

Section : External sector

Concept:

Rupee-Rouble trade, as the name suggests, is a settlement arrangement where a Russian bank keeps enough INR deposits to pay off the Indian exporters to Russia in INR. Correspondingly on the flip side, an Indian bank keeps enough Rouble deposits in Russia to pay for Indian imports. For example-INR-dollar is Rs 77 and Rouble-dollar is 110. Ergo, Russians have to shell out 1.428 (110 by 77) Roubles for every INR.

This is how the exchange rate between Rouble and rupee is derived indirectly.
Under this arrangement, a Russian bank will need to open an account in an Indian bank while an Indian bank will open its account in Russia Both sides can then mutually agree to hold currency worth a specified amount in the local currencies in their respective accounts.
The two nations once embraced rupee payment for Russian export of S-400 Triumf air defence system in 2019 with the deal being for US 5.2 to 5,6 billion to escape sanctions by the US under its Countering America’s Adversaries Through Sanctions Act (CAATSA)

Merits –

Eliminates dependence on the US$ for bilateral trade.
Bypass economic sanctions like the blocking the Russian banks from the SWIFT payments network.
A battered Rouble in the wake of its war with Ukraine works in India’s favor with imports costing less.
Avoid any delay or default in payments.
Eliminate supply disruption

Demerits-

US dollar being the link currency for determining the exchange value of any two currencies with both Rouble and INR not being hard currencies i.e., freely floating in the international currency markets.
The valuation is actually a key issue for pegging the rouble-rupee exchange rate. All the global currencies are coded against the dollar only. If there is no way to know the dollar -rouble rate, there is no way to know rupee-rouble prices either.
Not useful in commodity specific trade bans.
Volatility-The fluctuation in the value of rouble could make it difficult to implement the rupee-rouble payment mechanism.
- Firstly, it will be difficult to decide a fair exchange rate between the rupee and the rouble.
- Moreover, if the value of the rouble continues falling sharply, then trading may not happen as the rouble in the Indian bank’s Russian account will lose value.
- If India helps Russia flout economic sanctions, it may then be accused of siding with Russia and this could hurt New Delhi’s diplomatic relations with the Western power

Alternatives

Cryptocurrency
Barter trade
India’s flagship payments system Unified Payments Interface could also be potentially linked to Russia’s own System for Transfer of Financial Messages.
Stable peg to rupee-rouble

2. Foreign exchange swap

Subject: Economy

Section: External sector

Context:

On March 10, the RBI will sell USD 5 billion to banks that have bid at the lowest currency premium. The intent here is that the central bank acquires dollars from the seller, charging the lowest premium possible for the two-year tenor. Accordingly, banks that bid at the lower range of the auction are successful at the auction. Assuming a dollar rate of Rs 75, the system liquidity will shrink by Rs 37,500 crore. RBI has a two-year window to buy back these dollars.

Interestingly, apart from March 10, the far leg of March 13, 2019’s three-year USD–INR buy/sell auction falls due on March 28, 2022. This again is a USD 5 billion swap, where RBI will sell dollars to banks. With two sell auctions at play in March, nearly Rs 75,000 crore of surplus liquidity could be sucked out of the system.

Concept:

It is a forex tool whereby the central bank uses its currency to buy another currency or vice versa. In a Dollar–Rupee buy/sell swap, the central bank buys dollars (US dollars or USD) from banks in exchange for Indian Rupees (INR) and immediately gets into an opposite deal with banks promising to sell dollars at a later date. In a dollar–rupee sell/buy swap it sells USD in exchange for INR and promises to buy dollars from banks after some years.

Impact (Dollar–Rupee sell/buy swap)

Dollar inflows from the auction and inflows of a like amount from a maturing swap towards the month end is expected to cool the volatility in the USD-INR exchange rate
Reduce the supply of money from the economy thus, decline in inflation without changing the accommodative stance of monetary policy.
Increase in capital inflows thus, reducing current account deficit.
Increase credibility of government stabilization policies and thus, encourage investor and consumer confidence in the economy.
Forex swaps help in liquidity management-longer-term liquidity adjustment tools. A dollar–rupee buy/sell swap injects INR into the banking system while sucking out the dollars, and the reverse happens in a sell/buy swap.
Liquidity intervention through swaps indicates the RBI’s plan to use a different toolkit rather than the traditional ones, and this leaves room for the central bank to buy bonds when needed. Consequently, the strategy will contain bond yields.
Usually, in May, RBI makes its dividend payment to the government for the previous fiscal. The surplus from these swaps could pad up the pay-outs.

3. Crude oil price dynamics and impact

Subject : Economy

Section :Inflation

Context:

Russia is the third largest producer of oil in the world and, more importantly, the world’s largest exporter of oil and gas and the second largest exporter of crude oil after Saudi Arabia. So, disruption of supplies due to the ongoing war and Black sea blockage is bound to roil energy markets.

Concept :

Impact-

Rise in import bill and current account deficit-leading depreciation of domestic currency.
Imported inflation and reversal of easy monetary policy
Oil and natural gas as a universal intermediate enters in multiple ways into the costs of commodities, making oil price increases a driver of overall non core-inflation
Stock and commodity market crash leading to large scale capital outflow.
Supply shortages leading to stagflation as it being the basic raw material to various industries and transportation services.
The policy trilemma refers to the trade-offs a government faces when deciding international monetary policy. In particular, the policy trilemma contends that it is not possible to have all three objectives at the same time, but has to choose two from the following three options:
- Free movement of capital
- Independent (autonomous) monetary policy
- Fixed (managed) exchange rates

Why were oil prices rising even before the Ukraine crisis?

The main reason is global demand was already outstripping supply. Reasons for low supply

Russia has been holding back from providing additional supplies of natural gas to Europe. As the price of gas shot up, so did the price of oil as consumers shifted from gas to oil and coal
Continued underinvestment in oil and gas exploration because of the “public and regulatory aversion” to fossil fuels.
There is very limited “spare capacity” within the OPEC (Organization of the Petroleum Exporting Countries).

Russia’s share in global exports is around 12%. “Russia supplies close to 5 million barrels a day to the global market and that is not an insignificant amount and a ban will immediately tighten the market further.

Why Venezuela cannot fill the gap?

Venezuela has the world’s largest oil reserves but producing oil requires more than just reserves. The country’s oil-producing apparatus is in disrepair partly due to the government’s mismanagement but also because of harsh US sanctions. Oil-producing companies are in debt and most don’t even have good quality drilling equipment

4. Crude oil and stagflation

Subject: Economy

Section: Economic Growth

Context:

Imported inflation, end of easy monetary policy and supply chain disruption has the potential of pushing an economy into stagflation.

Concept:

Stagflation is said to happen when an economy faces stagnant growth as well as persistently high inflation. In other words, the worst of both worlds. That’s because with stalled economic growth, unemployment tends to rise and existing incomes do not rise fast enough and yet, people have to contend with rising inflation. So people find themselves pressurized from both sides as their purchasing power is reduced. The most famous case of stagflation happened in the early and mid-1970s when OPEC (The Organization of Petroleum Exporting Countries), which works like a cartel, decided to cut supply and sent oil prices soaring across the world

A 10 per cent increase in crude oil prices raises wholesale inflation by 0.9 per cent and retail inflation by 0.5 per cent.

Higher prices will reduce this demand. Fewer goods and services being demanded will then disincentivise businesses from investing in new capacities, which, in turn, will exacerbate the unemployment crisis and lead to even lower incomes. Thus leading to Stagflation.

Can the latest spike in oil prices send India into stagflation?

There are various indicators that suggests India is not in stagflation

Rising consumption demand
Rising private investment to around 27.9% highest in last one decade
Risin government expenditure especially the capex
Rise in trade post covid recovery
Rise in unicorns startups
Recovery in manufacturing post covid
Chances of rise in export post Ukraine-Russia trade blockage

However, it cannot be denied that stagnation is not impossible in near future-

The average prices will perhaps hover at levels above $100 and as India imports more than 84% of its total oil demand it will lead to imported inflation.
Since oil is such a basic cost in our economy, this spike will likely ensure that Indians suffer from high inflation. A 10 percent increase in crude oil prices raises wholesale inflation by 0.9 per cent and retail inflation by 0.5 per cent.
India is facing the most acute unemployment crisis it has seen in the past five decades.
India will see lower than previously forecast economic growth. It will expand 8.9% in the year ending March, according to data released Monday by the Statistics Ministry.

5. RBI interest subsidy scheme

Subject: Economy

Section: Monetary Policy

Exporters get subsidy under the ‘Interest Equalisation Scheme for pre and post-shipment Rupee Export Credit’. Under the scheme, large manufacturing and merchant exporters get an interest subsidy of 3% on pre- and post-shipment rupee credit for the outbound shipment of 416 products (tariff lines). However, manufacturing MSMEs get a 5% subsidy on such credit to ship out any product. The interest equalisation scheme has immensely benefited the exporters, especially the small ones, as it has made credit available at reasonable costs.

The scheme, introduced in 2015, was initially valid up to March 2020. Its validity was then extended periodically, along with that of the foreign trade policy, up to September 2021.it has extended up to March 31,2024 or till further review, whichever is earlier. The interest equalisation rates under the scheme have been revised to 2 per cent and 3 percent for specified categories of MSME manufacturer exporters.

The scheme will not apply to telecom instruments and entities availing benefits under the Production Linked Incentive (PLI) scheme of the government.

6. Sin goods and sin tax

Subject: Economy

Section :Fiscal Policy

Concept:

Sin goods are goods which are considered harmful to society. Examples of sin goods: Alcohol and Tobacco, Candies, Drugs, Soft drinks, Fast foods, Coffee, Sugar, Gambling, etc. Taxes levied by the government on sin goods called Sin Tax.

A sin tax is placed on goods and services that are seen to be socially detrimental. Thus, Tobacco, gambling ventures, alcohol, cigarettes, and other things are examples of products that are subject to a sin tax.

According to the current GST rate structure, some of the sin goods that attract a cess include cigarettes, pan masala and aerated drinks. Apart from sin goods, luxury products like cars also attract a cess. Sin Taxes are intended to serve two objectives:

One, to make the undesirable goods so expensive that rational consumers would be forced to give up the habit.
Two, to make the industry producing these products pay higher tax, which can be used to fund other welfare expenditure.

Society accepts sin taxes because they affect only those who use sin taxed products or engage in sin taxed behaviors. When individual states run a deficit, a sin tax is generally one of the first taxes recommended by lawmakers to help fill the budget gap. A sin tax is a type of Pigovian tax, which is levied on companies which create negative externalities with their business practices. Sin tax proponents maintain that the targeted behaviours and goods produce negative externalities. Sin taxes are typically regressive taxes, meaning the less money a person makes, the more significant is the percentage of their income these taxes consume.

Examples of sin tax-

Tobacco products are taxed at a rate of 28 per cent in India, whereas tobacco leaves are taxed at a rate of 5%.
Under the current GST structure, some of the sin goods that attract an additional cess include tobacco products, aerated drinks and pan masala. The cess is paid by the centre to states to compensate for any loss of revenue arising on account of implementation of GST. There is a cess of 65% on unmanufactured tobacco bearing a brand name while it is 160% for scented zarda. Pan masala containing gutkha is subject to a cess of 204%.The current cess on cigarettes is 5% plus up to Rs 4,170 per 1,000 sticks.

National Calamity Contingent Duty-The National Calamity Contingency Fund (NCCF) is a dedicated fund maintained by the Government of India for supplementing the disaster relief efforts of various state governments and is operated under the broad framework laid down by the 11th Finance Commission. It has a core corpus of Rs. 500 crore and is replenished through the National Calamity Contingent Duty imposed on cigarettes, pan masala, beedis, other tobacco products and cellular phones.

7. HC pulls up Meghalaya govt over coal mining

Subject: Environment

Section: Pollution

Context:

The Meghalaya High Court Monday directed the state government to set up a committee “without any political interference “to implement the ban on rat-hole coal mining put in place by the National Green Tribunal (NGT) and the Supreme Court

Concept:

The Jaintia Coal Miners and Dealers’ Association claims there are some 60,000 coal mines across 360 villages in East Jaintia Hills district. Moolamylliang used to be one such village until the National Green Tribunal banned rat-hole mining in April 2014.
Though the NGT ban did not stop illegal mining in the district, it helped Moolamylliang reform — in part because unregulated mining had contaminated its farmlands and turned the streams acidic, and also because the village dorbar, or traditional governing body, had a change of guard.

Rat Hole Mining

Rat hole mining involves digging of very small tunnels, usually only 3-4 feet high, which workers (often children) enter and extract coal.
The National Green Tribunal (NGT) banned it in 2014, on grounds of it being unscientific and unsafe for workers. The state (Meghalayan) government has challenged the NGT ban in the Supreme Court.
According to available government data, Meghalaya has a total coal reserve of 640 million tonnes, most of which is mined unscientifically by individuals and communities.
Since the coal seam is extremely thin in Meghalaya, no other method would be economically viable.
In 2018, at least 15 workers died after they were trapped in one such mine in East Jainitia Hills.

Impacts

The water sources of many rivers, especially in Jaintia Hills district, have turned acidic.
The water also has high concentration of sulphates, iron and toxic heavy metals, low dissolved oxygen (DO) and high BOD, showing its degraded quality.
The roadside dumping of coal is a major source of air, water and soil pollution.
Off road movement of trucks and other vehicles in the area for coal transportation also adds to the ecological and environmental damage of the area.
The practice has been declared as unsafe for workers by the NGT.
The mines branch into networks of horizontal channels, which are at constant risk of caving in or flooding.

The Countering America’s Adversaries Through Sanctions Act (CAATSA)

The Countering America’s Adversaries through Sanctions Act (CAATSA) is a United States Federal Law that has imposed sanctions against Iran, Russia and North Korea. This act prevents trade partners of the United States from entering into bilateral contracts with these three nations.

It was enacted in 2017 and empowers the US President to impose at least five of the 12 listed sanctions on persons engaged in a “significant transaction” with Russian defence and intelligence sectors. For example- The USA administration has recently imposed sanctions on Turkey for its purchase of the S-400 missile system from Russia.

Its “ultimate goal”, “is to prevent revenue from flowing to the Russian Government.

Types of Sanctions:

prohibition on loans to the sanctioned person.
prohibition of Export-Import bank assistance for exports to sanctioned persons.
prohibition on procurement by the United States Government to procure goods or services from the sanctioned person.
denial of visas to persons closely associated with the sanctioned persons.

There are only two sanctions that may impact either India-Russia relations or India-US relations.

Prohibition of Banking transactions: likely to have an impact on India-Russia relations, this would mean difficulties for India in making payments in US Dollars to Russia for the purchase of the S-400 systems.
Export Sanction: The second sanction will have greater consequences for India-US relations. It will deny the license for, and export of, any items controlled by the US.

Waiver Criteria: The US President was given the authority in 2018 to waive CAATSA sanctions on a case-by-case basis.

impact –

Russian Origin Weapon Systems-It will also affect India’s purchase of spare parts, components, raw materials and other assistance along with major defence purchases.
Hamper global trade and risk of future trade war.
Hamper the United States Asian allies in resisting a rising Chinese influence.
Discourage other nations from building a defensive relationship with the United States as concerns regarding strategic autonomy.
Rise of parallel trading system leading to decline of the US$ dominance.

8. Electronic Voting Machine (EVM)

TOPIC: Polity

Context- Ahead of the counting of votes for the Assembly elections in five states, Samajwadi Party (SP) chief Akhilesh Yadav on Tuesday accused the ruling BJP of “stealing” votes and claimed that his party workers intercepted a truck carrying EVMs in Varanasi.

Concept-

All available EVMs in a district are normally stored in a treasury or a warehouse under the direct control of the District Electoral Officer (DEO).
During a non-election period, EVMs cannot be moved out of the warehouse without specific instructions from the Election Commission.
During poll season, EVMs are allocated randomly to various Assembly segments through software in the presence of party representatives.
From this point, the Returning Officer (RO) of the Assembly segment takes charge of the allocated machines and stores them in designated strong rooms.
Here, the second round of randomisation takes place. EVMs are commissioned to specific polling stations in the presence of party representatives.

About EVMs:

The Election Commission in December, 1977 mooted the idea of EVM to overcome certain problems associated with use of ballot papers.
MB Haneefa invented the first Indian voting machine in 1980.
It was first used in 1981 in the by-election to North Paravur Assembly Constituency of Kerala.
The EVMs were commissioned in 1989 by Election Commission of India in collaboration with Bharat Electronics Limited and Electronics Corporation of India Limited.
The law was amended by the Parliament in December, 1988 and a new section 61A was inserted in the Representation of the People Act, 1951 empowering the Commission to use voting machines.
In 2004, in the General Election to the Lok Sabha, the EVMs (more than one million) were used in all 543 Parliamentary Constituencies in the country.

HISTORY OF EVM – 40 YEARS:

1977: CEC- S. L. Shakdhar talked about introducing an Electronic machine.
1980-81: EVMs developed and demonstrated by ECIL and BEL.
1982-83: EVMs used first time in 50 polling stations of Parur AC in Kerala. And then in 11 Assembly Constituencies: 8 states, 1UT.
1984: SC suspends EVM usage: cannot be used till RP Act is amended.
1988: RP Act amended: enabling use EVMs w.e.f. 15.03.1989.
2018: SC dismissed petition asking for return to Ballot papers!

9. Sarkaria Commission

TOPIC: Polity

Context- On February 13, West Bengal Chief Minister Mamata Banerjee called her Tamil Nadu counterpart M K Stalin and suggested a meeting of CMs of non-BJP ruled states over the “constitutional overstepping and brazen misuse of power by (their) Governors”.

Concept-

About Sarkaria Commission:

The Sarkaria Commission was set up in 1983 by the central government of India.
The Sarkaria Commission’s charter was to examine the central-state relationship on various portfolios and suggest changes within the framework of Constitution of India.
The Commission was so named as it was headed by Justice Ranjit Singh Sarkaria (Chairman of the commission), a retired judge of the Supreme Court of India.
The other members of the committee were Shri B. Sivaraman (Cabinet Secretary), Dr S.R. Sen (former Executive Director of IBRD) and Rama Subramaniam (Member Secretary).

Recommendations on Role of Governor:

On the issue of appointment of the Governors, it made some important recommendations, as given in the following:
- The Governor should be eminent in some walk of life and from outside the state.
- He should be a detached figure without intense political links, or should not have taken part in politics in the recent past.
- Besides, he should not be a member of the ruling party.
- He should be appointed after effective consultations with the state Chief Minister and Vice President and Speaker of the Lok Sabha should be consulted by the PM before his selection.
- Procedure of consulting the chief minister in the appointment of the state governor should be prescribed in the constitution itself
- As far as possible, the governor should enjoy the term of five years.
- He should be removed before his tenure only on the grounds as mentioned in the constitution or if aspersions are cast on his morality, dignity, constitutional propriety, etc.
- In the process of removal, the state government may be informed and consulted.

Other Important Recommendations:

Setting up a permanent inter-state council.
Article 356 should be used sparingly.
Residuary power should remain with the parliament.
Reasons should be communicated to the state when state bills are vetoed by the President.
Centre should have powers to deploy its armed forces, even without the consent of states. However, it is desirable that the states should be consulted.
Institution of all-India service should be strengthened.

10. Taj Mahal UNESCO World Heritage Site

TOPIC: Art & Culture

Section: Architecture

Context- There are no historical records to prove that Shah Jahan ordered the hands of workers to be chopped oﬀ.

Concept-

About the Heritage:

UNESCO describes it as a “masterpiece of architectural style in conception, treatment and execution”.
The Taj Mahal was conceived as An immense mausoleum of white marble, built in Agra between 1631 and 1648 by Shah Jahan for his wife Mumtaz Mahal.
The Taj Mahal is located on the right bank of the Yamuna River in a vast Mughal garden
The mosque and the guest house in the Taj Mahal complex are built of red sandstone in contrast to the marble tomb in the centre.
UNESCO states that several historical and Quranic inscriptions in the Arabic script have helped understand how the Taj Mahal was built.
Masons, stone-cutters, inlayers, carvers, painters, calligraphers, dome builders and other artisans were requisitioned from the whole empire and also from Central Asia and Iran to construct the monument.
The Taj Mahal is considered to be the greatest architectural achievement in the whole range of Indo-Islamic architecture.
The entire structure is perfectly symmetrical with the gardens laid out in the Charbagh fashion with a concourse of waterways down the middle.
The entire structure is raided on a platform giving it a lofty aura.
The minarets are perfectly proportional and splendidly positioned at the corner of the platform and the fluted double dome and the now ubiquitous chattris are an example of artistic syncretism of the time.
The pietra dura overlays on the walls signal artistic opulence and the Arabic calligraphy and latticework signal a refined and graceful structure of the entire edifice.
The uniqueness of the monument has been attributed to the calligraphy.
- This distinguishing feature in the monument was devised and supervised by a noble, Amanat Khan, who was originally a calligrapher from Shiraz in Iran and migrated to the Mughal court in 1608 CE.
- Impressed with his work, Shah Jahan conferred on him the title of ‘Amanat Khan’ (like an heirloom) and a ‘mansab’, a land title that ranked with the nobility.
The court chronicler, Abdul Hamid Lahori and the writings by Lahori’s son, Lutfullah Muhandis, two architects are mentioned by name: Ustad Ahmad Lahori and Mir Abd-ul Karim.
- Ustad Ahmad Lahori had laid the foundations of the Red Fort in Delhi.
- Mir Abd-ul Karim had been the favourite architect of the previous emperor, Jahangir.

11. Aspirational District

TOPIC: Governance

Section: Schemes

Context- Addressing a webinar on Union Budget, titled ‘Financing for Growth & Aspirational Economy’ Prime Minister Narendra Modi on Tuesday called for identifying three sectors in which the nation could be in the top three in the world.

Concept-

India can emerge among the top 3 countries in sectors such as
- construction,
- start-ups, and
- recently opened up areas such as drones, space and geo-spatial data.
Priority schemes AtmaNirbhar Bharat Abhiyan, PM Gatishakti National Masterplan, Aspirational Districts Programme or the development of Eastern India and the North-East can boost up these sectors.
The Prime Minister stressed the link between India’s aspirations and strength of MSME.

About Aspirational District Programme:

The 115 districts were identified from 28 states, at least one from each state.
Aspirational Districts are those districts in India, that are affected by poor socio-economic indicators.
The improvement in these districts can lead to the overall improvement in human development in India.
At the Government of India level, the programme is anchored by NITI Aayog. In addition, individual Ministries have assumed responsibility to drive the progress of districts.
The objective of the program is to monitor the real-time progress of aspirational districts.
ADP is based on 49 indicators from the 5 identified thematic areas, which focuses closely on improving people’s
- Health & Nutrition,
- Education,
- Agriculture & Water Resources,
- Financial Inclusion & Skill Development, and
- Basic Infrastructure.
The broad strategy of the programme include:
- Convergence: horizontal and vertical governments.
- Collaboration: impactful partnerships between government, market and civil society.
- Competition: fosters accountability on district governments.

12. India-China Dispute

TOPIC: Geography

Section: Map

Context- India and China have mutually decided to hold a fresh round of Corps Commander talks at the Indian side of ChushulMoldo Meeting Point on March 11.

Concept-

The two sides have so far held 14 rounds of talks, with disengagement undertaken on the north and south banks of Pangong Tso (lake), Galwan and Gogra areas.
The other areas yet to be resolved are Hot Springs, Demchok and Depsang.

Pangong Tso lake:

Pangong Lake is located in the Union Territory of Ladakh.
It is situated at a height of almost 4,350m and is the world’s highest saltwater lake.
Extending to almost 160km, one-third of the Pangong Lake lies in India and the other two-thirds in China.

Galwan Valley:

The valley refers to the land that sits between steep mountains that buffet the Galwan River.
The river has its source in Aksai Chin, on China’s side of the LAC, and it flows from the east to Ladakh, where it meets the Shyokriver on India’s side of the LAC.
The valley is strategically located between Ladakh in the west and Aksai Chin in the east, which is currently controlled by China as part of its Xinjiang Uyghur Autonomous Region.

Hot Springs and Gogra Post:

Hot Springs is just north of the Chang Chenmo river and Gogra Post is east of the point where the river takes a hairpin bend coming southeast from Galwan Valley and turning southwest.
The area is north of the Karakoram Range of mountains, which lies north of the Pangong Tso lake, and south east of Galwan Valley.

Chang Chenmo River:

Chang Chenmo River or Changchenmo River is a tributary of the ShyokRiver, part of the Indus River system.
It is at the southern edge of the disputed Aksai Chin region and north of the Pangong Lake basin.
The source of Chang Chenmo is near the Lanak Pass.

13. Coral Reefs

TOPIC: Environment

Section: Biodiversity

Context- Degradation, loss of coral reefs can affect 4.5 million people in southeast Asia: IPCC report.

Concept-

Coral reefs have suffered terribly in the past three decades. Yet, they are resilient and would be able to withstand challenges posed by a warming world, a recent study by the Government of Australia has said.
The study noted that since 2010, almost all regions had exhibited a decline in average coral cover. According to estimates, coral reefs would experience further declines in the coming decades as sea temperatures arose.
However, the increases in global coral cover between 2002 and 2009 and in 2019 offered hope. It showed that coral reefs globally remained resilient and could recover if conditions permitted.
For instance, coral reefs in East Asia, which has 30 per cent of the world’s coral reefs, had more coral on average in 2019 than they did in 1983. This, despite the area being affected by large-scale coral bleaching events during the last decade.

About Coral Reefs:

Coral reefs are one of the most biologically diverse marine ecosystems on the Earth.
Coral reefs play an important role in marine ecosystems and support the habitats of flora and fauna in the sea.
They are the underwater structures that are formed of coral polyps that are held together by calcium carbonate.
Coral reefs are also regarded as the tropical rainforest of the sea and occupy just 0.1% of the ocean’s surface but are home to 25% of marine species.
They are usually found in shallow areas at a depth less than 150 feet. However, some coral reefs extend even deeper, up to about 450 feet.
Coral polyps are the individual corals that are found on the calcium carbonate exoskeletons of their ancestors.
Corals can be found in all the oceans but the biggest coral reefs are mostly found in the clear, shallow waters of the tropics and subtropics.
The largest of these coral reef systems, The Great Barrier Reef in Australia, the largest coral reef is more than 1,500 miles long.

Coral Reefs in India:

Coral reefs are present in the areas of Gulf of Kutch, Gulf of Mannar, Andaman & Nicobar, Lakshadweep Islands and Malvan.

Largest Coral Reef Area:

Indonesia has the largest coral reef area in the world.
India, Maldives, Sri Lanka and Chagos have the maximum coral reefs in South Asia.
Great Barrier Reef of the Queensland coast of Australia is the largest aggregation of coral reefs.

Major threats for the corals:

Natural: Environmental-Temperature, Sediment Deposition, Salinity, pH, etc
Anthropogenic: Mining, Bottom Fishing, Tourism, pollution, etc.

Types of Coral Reefs

Coral Bleaching:

The coral and the zooxanthellae share a symbiotic relationship and 90% of the nutrients that are produced by the algae are transferred to the coral hosts.
But this relationship gets affected under severe environmental stress which causes the loss of symbiotic algae (zooxanthellae).
As a result, the white calcium-carbonate exoskeleton is visible through its transparent tissue leading to a condition known as Coral Bleaching.
The corals become vulnerable in the absence of the algae and begin to die if the temperature of the sea remains high for weeks.