📰 SCIENCE-GENE-TOOL
•Scientists have created a new gene editing tool that tweaks the individual RNA ‘letters’ in human cells without making changes to the entire genome, paving the way for therapies that can reverse mutations.The tool was developed by scientists from The Broad Institute and Massachusetts Institute of Technology.
📰 IIT team tracks urban heat island effect in 89 cities
Researchers push for use of sustainable building materials
•Between February and May, most of the 89 Indian cities that are to be developed as Smart Cities have been found to be 1-5 degrees C cooler during the day relative to the surrounding non-urban areas. More than 60% of the total 89 urban areas are 1-5 degrees C cooler during April (it’s 70% in May).
•This observation is in variance with the globally witnessed phenomenon of urban areas getting significantly warmer during the day compared with the surrounding areas as a result of urban heat island effect.
•In contrast, during the post-monsoon period (October to January), about 80% of the urban areas show typical urban heat island effect and are 1-6 degrees C warmer than the surrounding non-urban areas.
•During the night, all the cities studied are warmer (1-5 degrees C) than the surrounding non-urban areas due to urban heat island effect regardless of the season and location.
•Compared with other cities, urban areas in semi-arid and arid regions of western India show higher warming in the night.
•The night time warming is driven mainly by heat stored in buildings and impervious concrete areas.
Vegetation in focus
•A team of researchers led by Prof. Vimal Mishra from the Civil Engineering department at IIT Gandhinagar found that cities are cooler during the day than the surrounding non-urban areas only when the non-urban areas lack vegetation and moisture either due to lack of irrigation or water bodies.
•These cities (Kurnool, Vijayawada, Badami, Bijapur, Aurangabad and cities in Gujarat and Rajasthan) are typically located in western and central parts of India.
•However, cities (Varanasi, Lucknow, Allahabad, Kanpur, and Patna) in the Gangetic Plain, north-western India (Punjab and Haryana) and southern tip of the west coast show typical urban heat island effect during the day; these cities are 3-5 degrees C warmer than the surrounding non-urban areas during the pre-monsoon (February-May) and post-monsoon (October-January) periods.
•The non-urban areas in these areas have vegetation in the form of trees or agriculture and have moisture due to irrigation.
•“There are two reasons why urban areas in western and central parts of India become cooler than non-urban areas during summer. The non-urban areas have no crop and moisture, the soil is dry and day-time air temperature is above 40 degrees C. On the other hand, the urban areas have vegetation cover and water bodies. This is why cities are cooler than the surrounding non-urban areas during the day,” explains Prof. Mishra.
•More than 70 of the 89 cities studied are surrounded by non-urban areas which have more than 50% of total land cover under agriculture between November and March.
•This results in non-urban areas being cooler than the cities during the post-monsoon season. The results were published in the journal Scientific Reports .
•Aerosols too have an effect in reducing the temperature but their role in cooling during day time is less compared with vegetation and irrigation.
•“Cities being significantly warmer than surrounding non-urban areas during night has policy-related implications,” says Prof. Mishra. “During heat-waves, the prominent night urban heat island effect which is prevalent across cities could worsen the levels of discomfort.”
Planning requirement
•“Since the government is planning to develop these as smart cities, we should think of using more sustainable building materials that absorb less heat during the day. We also need to include passive cooling measures such as increased tree cover, increased ventilation in buildings and orientation of buildings in modern building designs to reduce the night-time urban heat island effect,” he says. There should be an optimal combination of impervious cover, vegetation cover, and water bodies within the cities.
•The researchers used satellite data (2000-2014) and community land model to identify the impact of irrigation and show the cooling seen in cities is due to lack of vegetation and moisture in non-urban areas relative to cities.
📰 ‘Don’t deny food items for lack of Aadhaar’
Centre issues instruction to all States
•The Centre has instructed the States not to deny PDS benefits to any person who does not have Aadhaar or has not linked the ration card to the 12-digit biometric identifier, and warned them of strict action for violations. It also asked the States not to delete eligible households from the list of beneficiaries for non-possession of Aadhaar.
•The instruction was issued this week to all the States, after an 11-year-old Jharkhand girl allegedly died of starvation recently after she was denied PDS rations. In the directive, the Union Food Ministry clarified that deletion from the ration card database could happen only after a proper verification of the ration card holder establishes “beyond reasonable doubt” that an entry pertaining to the said ration card holder is not genuine.
•State field functionaries have been asked to ensure that beneficiaries are not turned away for non-possession of Aadhaar, and all exceptions in this regard are recorded in a separate logbook.When contacted, Ajay Bhushan Pandey, CEO of the Unique Identification Authority of India (UIDAI), told PTI: “The aim is to ensure that no one is denied any food benefits for lack of Aadhaar, lack of linking, or technical difficulty in biometric authentication. As long as a person is genuine, he has to be given the benefit...”
•The States and the Union Territories will have to provide Aadhaar enrolment facilities to those without Aadhaar and link their Aadhaar numbers with ration cards, the Food Ministry said, warning of strict action for violation of the notification. As per the National Food Security Act, the States have been given time till December to link Aadhaar with ration cards.
Deadline extended
•However, the Centre on Wednesday told the Supreme Court that the deadline for mandatory linking of Aadhaar for benefits of government schemes would be extended till March 31 next for those who do not have the biometric identification number. So far, 82% of the ration cards have been seeded with Aadhaar.
•The Food Ministry’s directive mentions that until Aadhaar is assigned to the beneficiary, subsidised foodgrains will have to be given on production of ration card, enrolment slip and other stipulated documents. Irrespective of whether all members of an eligible household have Aadhaar, full quantity of subsidised foodgrains or transfer of food subsidy on complaince with the requirements will have to be extended. Even in the case of failure of biometric authentication due to a glitch or poor biometric quality, the beneficiary will have to be given the benefits on production of Aadhaar card along with the ration card.
•All these cases — those without Aadhaar, Aadhaar not linked to the ration card, or failure of biometric authentication — will have to be recorded as “exceptions” by the fair price shop dealer.
📰 Govt. working on tougher consumer protection law
Laws existed even in Vedic period against unfair trade, says PM
•A new consumer protection law is on the anvil to crack down on misleading advertisements and simplify the grievance redressal mechanism, Prime Minister Narendra Modi said on Thursday. He was speaking at the inauguration of a two-day international conference on Consumer Protection for East, South, Southeast and Asian nations.
•Mr. Modi said India’s consumer protection traditions dated back 2,500 years. Laws existed even in the Vedic period to prevent unfair trade practices and adulteration of products, he said.
•Extolling the virtues of the new Goods and Services Tax (GST), Mr. Modi said it was one of the key consumer-friendly reforms that his government had introduced. The GST would benefit consumers in the long run as prices would come down because of competition among manufacturers, he said.
•Consumers can no longer be cheated as they can see on receipts the tax they are paying, Mr. Modi said.
•“Today, we are in the process of enacting a new Consumer Protection Act, keeping in view business practices and requirements of the country. The proposed Act lays great emphasis on consumer empowerment,” he said.
•The new law will replace the Consumer Protection Act, 1986, and is in line with the revised UN guidelines on consumer protection. It is currently with the Cabinet Secretariat and will be placed before the Cabinet for consideration soon, the Prime Minister said.
📰 India for ‘constructive’ Rohingya policy
Our objective will be to see how they can go back to their place of origin, says Foreign Secretary S. Jaishankar
•Seeking a ‘constructive’ approach to dealing with the exodus of the Rohingya, India said on Thursday that the displaced members of the community will have to return to their place of origin in the Rakhine province of Myanmar.
•Speaking at a think tank event here, on the prospects of India-Japan cooperation in the Bay of Bengal and Asia-Pacific regions, Foreign Secretary S. Jaishankar highlighted India’s regional humanitarian responsibilities and growing convergence with Tokyo.
•“The exodus of a large number of people from the Rakhine state to Bangladesh is clearly a matter of concern. Our objective will be to see how they can go back to their place of origin. Clearly that is not easy,” he said. “We are talking to Bangladesh and separately engaged with Myanmar and we feel that this is a situation better addressed with practical measures and constructive conversation, rather than doing very strong condemnations and, having checked the condemnation box, moving to the next issue.”
•He highlighted the need for “a sober, sensitive and locally sensitive approach” in dealing with the humanitarian emergency that the exodus had become.
Regional cooperation
•Mr. Jaishankar also brought up the ties between connectivity, regional cooperation and humanitarian response to evolving crises. “One of the areas we want to see in the agenda of BIMSTEC is collaboration on the HADR— that, we would like these member countries to cooperate on humanitarian assistance to disaster situation. In the last three years, Nepal earthquake relief, (India’s response to) Yemen civil war, Maldivian water crisis, and even Operation Insaniyat for the Rohingyas are part of cooperation.”
📰 A bold step in bank reform
It’s been late coming, but the recapitalisation of public sector banks is a winner
•With India’s economic growth faltering in the last couple of years, the government has been casting about for ways to galvanise the economy. Last November, it tried demonetisation. It was a bold move but its economic benefits will be long in coming while the short-term disruption has been very real and demoralising. This year, it pushed through the goods and services tax (GST). Again, this is hugely positive over the medium term, but is painful in the short run.
Cheering the markets
•The government seems to have realised that a simpler, more effective remedy is at hand: recapitalising public sector banks (PSBs) and enhancing the flow of credit. The proposal to recapitalise PSBs to the extent of ₹2.11 trillion (₹2.11 lakh crore) is a winner by any reckoning. It is, perhaps, the most effective way to provide a much-needed fiscal stimulus to the economy and revive growth. Small wonder that the markets have given the move a rapturous welcome.
•To understand the significance of bank recapitalisation, we need a little primer on bank capital. Regulation requires that banks hold assets only in proportion to the capital they have. ‘Capital’ is a combination of equity, equity-like instruments and bonds. For a given balance sheet, there is a certain minimum of capital that banks must hold. This is called ‘capital adequacy’. The higher the capital is above the regulatory minimum, the greater the freedom banks have to make loans. The closer bank capital is to the minimum, the less inclined banks are to lend. If capital falls below the regulatory minimum, banks cannot lend or face restrictions on lending.
•When loans go bad and turn into non-performing assets (NPAs), banks have to make provisions for potential losses. This tends to erode bank capital and put the brakes on loan growth. That is precisely the situation PSBs have been facing since 2012-13.
•‘Stressed advances’ (which represent non-performing loans as well as restructured loans) have risen from a little over 10% in 2012-13 to 15% in 2016-17. This has caused capital adequacy at PSBs to fall. Average capital at PSBs has fallen from over 13% in 2011-12 to 12.2% in 2016-17. The minimum capital required is 10.5%. An estimated 10 out of 20 PSBs have capital of just one percentage point above the minimum or less. Inadequate capital at PSBs has taken its toll on the flow of credit. Growth in credit has fallen below double digits over the last three years. Between 2009-10 and 2014-15, annual credit growth was in the range of 15-20%. In the ‘India Shining’ period of 2004-09, credit growth had been over 20%.
•Some observers ascribe the deceleration in credit growth to poor demand. They say that corporates have excessive debt and are in no position to finance any investment. This may be true of large corporates. However, it is not true of enterprises in general. One study, which covered over 4,000 companies, showed that the debt to equity ratio fell below 0.8 (which is a low level of debt) in 2008-09 and remained low until 2012-13. (J. Dennis Rajakumar, ‘Are corporates overleveraged?’, Economic and Political Weekly, October 31, 2015).
•Moreover, demand for investment finance may have decelerated but demand for working capital remains strong. If anything, the introduction of GST has increased small business demand for working capital. Low growth in credit is confined to PSBs. Private banks have seen loan growth of 15% this year.
Evident since 2014
•The government has realised that there is a problem with the supply of credit. It has to do with PSBs’ inability to lend for want of adequate capital. The National Democratic Alliance (NDA) government should have recognised the problem when it assumed office in May 2014. At the time, stressed advances were already 10% of the total. The NDA government should have moved swiftly to recapitalise PSBs.
•Instead, it chose to sweep the problem under the carpet. Market estimates had placed the requirement of government capital at a minimum of ₹2 lakh crore over a four-year period. In 2015, under the Indradhanush Plan, the government chose to commit a mere ₹70,000 crore over the period.
•The dominant view in government at the time seemed to be that PSBs had messed up in a big way, so putting more capital into them was simply ‘money down the drain’. Their role needed to be shrunk through consolidation or by selling strategic stakes to private investors.
•This is a mistaken view. The bad loan problem at PSBs is not entirely the result of mismanagement. There have certainly been cases of malfeasance and poor appraisal of credit. However, as the Economic Survey of 2016-17 made clear, these are not responsible for the bulk of the NPA problem. The problem is overwhelmingly the result of factors extraneous to management.
•PSBs, unlike their private sector counterparts, had lent heavily to infrastructure and other related sectors of the economy. Following the global financial crisis of 2007, sectors to which PSBs were exposed came to be impacted in ways that could not have been entirely foreseen. Blaming PSBs for the outcomes and starving them of capital was not the answer.
•The failure to quickly recapitalise PSBs has adversely impacted the economy in many ways. First, it has come in the way of adequate supply of credit. Second, it has hindered the effective resolution of the NPA problem and kept major projects from going through to completion. Resolution requires banks to write-off a portion of their loans in order to render projects viable. They cannot do so if they see that write-offs will cause their capital to fall below the regulatory minimum. Third, corporates are stuck with high levels of debt and are unable to make fresh investments.
•The government’s move to recapitalise banks changes the picture. Of the ₹2.11 trillion package, ₹1.35 trillion will be towards issue of recapitalisation bonds. PSBs will subscribe to these bonds. The government will plough back the funds into banks as equity. Another ₹180 billion will be provided as budgetary support. The remaining ₹580 billion will be raised from the market. Analysts believe the package should enable banks to provide adequately for NPAs and support modest loan growth. Once PSBs have enough capital and are in a mood to lend, they can liquidate excess holding of government securities and use the cash to make more loans.
•Analysts worry about the fiscal impact of the recapitalisation package. International norms allow borrowings for bank recapitalisation not to be counted towards the fiscal deficit. In the past, India has used this accounting fudge. The proposed recapitalisation bonds are likely to add to the fiscal deficit unless the government resorts to other fudges such as getting the Life Insurance Corporation of India or a separate holding company to issue the bonds. The government should not worry unduly about missing the fiscal deficit target of 3.2% of GDP. The markets will understand that the fiscal stimulus is well spent.
Getting the record straight
•Analysts also fret over repeated bailouts of PSBs and the costs to the exchequer. They seem to think that bank bailouts have to do with government ownership and inefficiency and the answer is to privatise some of our PSBs. They couldn’t be more wrong.
•The overwhelming majority of bank systems worldwide are privately owned. And yet these systems are prone to periodic bouts of bank failures. The International Monetary Fund has documented 140 episodes of banking crises in 115 economies in the world in the period 1970-2011. The median cost of bank recapitalisation in these crises was 6.8% of GDP. India’s cost of recapitalisation over a 20-year period is less than 1% of the average GDP during this period.
•The Modi government has shown courage in opting for substantial recapitalisation of banks. This is not something that fits into the ‘reform’ mantra whereby private is good and public is bad. Reserve Bank of India Governor Urjit Patel has welcomed the move in effusive terms: “The Government of India’s decisive package to restore the health of the Indian banking system is in the view of the [RBI] a monumental step forward in safeguarding the country’s economic future.” Indeed. The government’s recapitalisation move promises to do more to quickly usher in ‘acche din’ than any other single measure it has initiated during its tenure.
📰 The Kashmir gambit
A short history of ‘out of the box’ formulae to find a political solution in Jammu and Kashmir
•In September 1960, Jawaharlal Nehru travelled to Pakistan for a visit amid high expectations all around for the resolution of Kashmir. The visit followed the resolution of some major bilateral issues including sharing of Indus waters, and as former High Commissioner to Pakistan T.C.A. Raghavan recounts in his book The People Next Door , Nehru and Ayub Khan were going to give the impasse over Jammu and Kashmir a personal push. However, matters came to a full stop after Nehru suggested that the “status quo” at the ceasefire line was the only solution. For Ayub Khan, this was a non-starter, as he felt the ceasefire line would never be accepted by Pakistan given that it had no political or religious underpinnings.
•Forty years later, as Prime Minister, Atal Bihari Vajpayee and then Manmohan Singh started a similar conversation with Pakistan’s Pervez Musharraf. The four-step formula, as their version of the talks from 2000-2008 was called, came around to the idea that eventually “borders cannot be redrawn”. As Musharraf wrote in his memoirs, and the Prime Minister’s special envoy Satinder Lambah outlined in a speech in 2014, the “out of the box” solution on Kashmir would require greater freedoms and interactions for Kashmiris on both sides of the Line of Control (LoC), leading to a lasting peace. The cross-LoC bus, which allowed Indian Kashmiris and Pakistani Kashmiris to visit each other, seemed the logical first step forward. On the Indian side, the period saw a greater level of engagement between New Delhi and Srinagar, and of the mainstream with separatist thought, even including an abortive attempt for talks with the militant group, Hizbul Mujahideen, in 2000.
Fast forward to the present
•In 2017, the landscape in Kashmir seems far removed from a decade ago and certainly from half a century ago. But as the government begins another attempt to tackle the Kashmir issue with the appointment of an interlocutor, former Intelligence Bureau Director Dineshwar Sharma this week, it is clear that some things have not changed. To begin with, the move acknowledges that the solution of the problems in J&K lies in the realm of politics, and not security. Home Minister Rajnath Singh’s announcement was preceded by statements from Army Chief General Bipin Rawat and police officers in Kashmir that even with all the gains made on the military and counter-insurgency front, a political solution is needed, and urgently.
•Second, the open mandate to speak to all parties implicitly indicates that the government is willing to speak to separatists for a “sustained dialogue”, a considerable turn from the hardline policy of the Modi government thus far. That the government is now aligning closer to the policy of its predecessors indicates that the Centre could also consider talks with Pakistan, as outlined in the Agenda of Alliance document of the PDP-BJP coalition in J&K. Mr. Sharma’s success in reaching out to all stakeholders in the Valley depends on confidence in the Modi government’s seriousness in a long-lasting dialogue process in the State, with a view to effecting an enduring peace — one envisaged but not achieved by so many earlier governments.
