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DAILY NEWS ANALYSIS

Monthly DNA

21 Apr, 2021

15 Min Read

National Climate Vulnerability Assessment Report

GS-III : Biodiversity & Environment Climate Change

National Climate Vulnerability Assessment Report

The Department of Science and Technology (DST) has recently released the National climate vulnerability assessment report.

About National Climate Vulnerability Assessment Report:

  • The National Climate Vulnerability Assessment Report identifies the most vulnerable states and districts in India, as per the current climate risk and key drivers of vulnerability.
  • The report uses several key drivers of Vulnerability for the assessment-
    • 1) a percentage of the population living below the poverty line;
    • 2) income share from natural resources;
    • 3) Also, the proportion of marginal and small landholdings,
    • 4) women’s participation in the workforce, and;
    • 5) the density of healthcare workers among others.
  • Participation: Around 24 states and 2 Union Territories participated in the exercise. The DST and the Swiss Agency for Development & Cooperation(SDC) organized it jointly.

Key Findings:

  • High Climate Vulnerable States: The report identifies eight eastern states as highly vulnerable to climate change: Jharkhand, Mizoram, Odisha, Chhattisgarh, Assam, Bihar, Arunachal Pradesh and West Bengal.
    • These states are mostly from the eastern part of the country. Thus, they require the prioritization of adaptation interventions.
  • Lower-middle Vulnerable States: Himachal Pradesh, Telangana, Sikkim, and Punjab.
  • Low Vulnerable States: Uttarakhand, Haryana, Tamil Nadu, Kerala, Nagaland, Goa and Maharashtra.
  • Climate Vulnerable Districts: The report also identifies Climate Vulnerable districts. According to it, among all states, Assam, Bihar, and Jharkhand have over 60% districts in the category of highly vulnerable.

Significance:

  • The assessment will help Policymakers in taking appropriate climate actions.
  • Further, it will also benefit climate-vulnerable communities across India through the development of better-designed climate change adaptation projects.

Source: TH

EU’s Indo-Pacific Strategy approved by EU Council

GS-II : International Relations Europe

EU’s Indo-Pacific Strategy approved by EU Council

The Council of the European Union has approved the EU’s Indo-Pacific Strategy for cooperation in the Indo-Pacific.

About EU Indo-Pacific Strategy:

  • The Indo-Pacific region spans from the east coast of Africa to the Pacific Island States with the world’s two most populous countries & economies — India and China.
  • The strategy aims to contribute to the stability, security, prosperity, and sustainable development of the Indo-Pacific Region. The basis of strategy is the promotion of democracy, rule of law, human rights, and international law.

Key Features of the Strategy:

  • Security and Defence: The strategy aims to develop partnerships with the Indo-Pacific countries in the areas of security and defence.
    • Areas include addressing maritime security, malicious cyber activities, emerging technologies, terrorism, and organised crime.
  • Rules-Based Order: The strategy will be based on upholding democracy, human rights, the rule of law, and respect for international law.
  • On Covid-19: EU will work with countries to mitigate the economic and human effects of the Covid-19 pandemic. It will also ensure an inclusive and sustainable socio-economic recovery.

About Council of the European Union:

  • Council of the European Union was established in 1967. It is one of the Institutions of the European Union(EU) as listed in the Treaty on European Union.
  • It is tasked with:
    • Negotiating and adopting EU laws (in most cases together with the European Parliament)
    • Coordinating EU member states’ policies
    • Developing the EU’s common foreign and security policy,
    • Conclusion international agreements and
    • Adopting the EU budget (together with the European Parliament).

Source: TH

NASA's Ingenuity Rover takes flight in Mars' Atmosphere

GS-III : S&T Space mission

NASA's Ingenuity Rover takes flight in Mars' Atmosphere

NASA’s Mars Helicopter Ingenuity has successfully flown on Mars. It is the first powered flight on another planet.

About NASA’s Mars Helicopter Ingenuity

  • Ingenuity is the first helicopter to fly on Mars. NASA’s rover called Perseverance carried it to the Red Planet.
  • The helicopter’s main task is to carry out a technology demonstration to test the first powered flight on Mars. It also aims to collect samples from the locations on Mars that the rover cannot reach.
  • Features: NASA’s Mars Helicopter Ingenuity is able to fly using counter-rotating blades that spin at about 2,400 rpm.
    • It also has a wireless communication system and is equipped with computers, navigation sensors, and two cameras.
    • Moreover, it is also solar-powered and is able to charge on its own.

Why it was an engineering challenge?

  • The atmosphere on Mars is 1% in density compared to the atmosphere on Earth. Thus, to fly on Mars, helicopter blades need to rotate 8 times as fast as a passenger helicopter to fly on Earth.
  • A helicopter flying a few meters from the surface on Mars requires the same amount of energy, as it requires to fly 2-3 times the height of Mt Everest on earth.
  • Moreover, a helicopter requires to have its own energy source from solar panels.
  • Also, Ingenuity will face very cold Martian nights that can be brutal on batteries and the onboard computer.
  • Significance of the mission:
    • A helicopter was placed on the surface of Mars for the first time ever.
    • Hence, its performance during this mission will help in considering small helicopters for future Mars missions — where they can perform a support role as robotic scouts, surveying terrain from above or as full standalone science craft.

Perseverance Rover:

  • Perseverance is a car-sized Mars rover designed to explore the crater Jezero on Mars as part of NASA’s Mars 2020 mission.
  • The rover was launched in July 2020. It landed at the Jezero Crater of Mars in February.2021.
  • Purpose:
    • The rover is designed to better understand the geology of Mars and seek signs of ancient life.
    • It will also collect and store a set of rock and soil samples that could be returned to Earth in the future.

Further, it will also test new technology to benefit future robotic and human exploration of Mars.

Source: TH

Startup India Seed Fund Scheme

GS-III : Economic Issues MSME

Startup India Seed Fund Scheme

Union Minister of Commerce & Industry recently launched the Startup India Seed Fund Scheme (SISFS).

About Startup India Seed Fund Scheme (SISFS):

  • The scheme was announced during the Prarambh: the ‘Startup India International Summit’. Which marks the 5-year anniversary of the Startup India initiative.

Objective:

  • Startup India Seed Fund Scheme(SISFS) aims to provide financial assistance to startups.
  • Assistance is provided for proof of concept, prototype development, product trials, market entry, and commercialization.
  • Thus, it would help to grow startups to a beginner’s level. After that, startups will be able to raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions.

Implementation:

  • The Department for Promotion of Industry and Internal Trade (DPIIT) constituted an Experts Advisory Committee(EAC) which will be responsible for the overall execution and monitoring of the Startup India Seed Fund Scheme.

Funding:

  1. Eligible incubators throughout India will hand out funding to eligible startups across India.
  2. Grants of up to Rs 5 Crores shall be provided to the eligible incubators selected by the EAC.
  3. The selected incubators shall provide grants of up to Rs 20 lakhs for validation of Proof of Concept, or prototype development, or product trials to startups.
  4. After that, Startups will further receive investments of up to Rs 50 lakhs for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments.

Duration:

  • The scheme will have a corpus of Rs. 945 Crore. This will be divided over the next 4 years.

Significance of the scheme:

  • The SISFS scheme will help startups in:
    • Secure seed funding
    • Inspire innovation
    • Support transformative ideas
    • Facilitate implementation and
    • Start startup revolution.
  • The Scheme will also create a robust startup ecosystem, particularly in Tier 2 and Tier 3 towns of India. These towns lack adequate funding facilities for startups.

About Startup India:

  • It envisages building a robust Startup ecosystem in the country for nurturing innovation and providing opportunities to budding entrepreneurs.
  • It was launched in 2016.
  • The action plan of this initiative focuses on the following three areas:
    • Simplification and Handholding.
    • Funding Support and Incentives.
    • Industry-Academia Partnership and Incubation.

Seed Funding

  • It typically represents the first official money that a business venture or enterprise raises.
  • It helps a company to finance its first steps, including things like market research and product development.
  • There are many potential investors in a seed funding situation: founders, friends, family, incubators, venture capital companies and more.
  • One of the most common types of investors participating in seed funding is a so-called "angel investor."
    • Angel investors tend to appreciate riskier ventures (such as startups with little by way of a proven track record so far) and expect an equity/stock stake in the company in exchange for their investment.

Department for Promotion of Industry and Internal Trade

  • The department was earlier called the Department of Industrial Policy & Promotion and was renamed DPIIT in January 2019.
  • It comes under the Ministry of Commerce and Industry.
  • In 2018, matters related to e-commerce were transferred to the Department and in 2019, the Department was given charge for matters related to Internal Trade, the welfare of traders and their employees and Startups.
  • The role of DPIIT is to promote/accelerate the industrial development of the country by facilitating investment in new and upcoming technology, foreign direct investment and supporting the balanced development of industries.
  • Major engagements of DPIIT:
    • Business Reform Action Plan (BRAP) ranking of states,
    • Industrial Corridors,
    • Invest India,
    • Make in India initiative, etc.

Source: PIB

Sudarshan Sen Committee for Asset Reconstruction Companies by RBI

GS-III : Economic Issues NPA

Sudarshan Sen Committee for Asset Reconstruction Companies by RBI

Reserve Bank of India(RBI) has set up the Sudarshan Sen committee to review the working of Asset Reconstruction Companies (ARCs) Comprehensively.

About Asset Reconstruction Company (ARC):

  • Asset Reconstruction Company (ARC) is a specialized financial institution that buys the Non-Performing Assets (NPAs) from banks and financial institutions.
  • It helps banks in cleaning up their balance sheets.
  • Thus, it helps banks to concentrate on normal banking activities.
  • Banks, Instead of going after the defaulters, can focus on selling their bad assets to the ARCs at a mutually agreed value.

Regulated by:

  • SARFAESI (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest) Act, 2002 provides the legal basis for the setting up of ARCs in India.
  • ARCs function under the supervision and control of the Reserve Bank of India (RBI).

Capital Requirements for an ARC:

  • As per the SARFAESI Act, ARCs should have a minimum net owned funds of Rs. 100Cr.
  • The ARCs also have to maintain a capital adequacy ratio of 15% of its risk-weighted assets.
    • The amount of Risk-weighted assets helps to determine the minimum capital that a bank must hold to reduce the risk of insolvency.

What are the resolution strategies of an ARC?

As per the SARFAESI Act, an ARC can:

  • Restructure or reschedule the loan
  • Enter into settlements,
  • sell or lease the borrower’s business,
  • take over or change the management, and
  • Also, engage in security interest enforcement (sell, take possession, or lease the owned asset).
    • But enforcement or security interest can only be conducted when at least 75% of secured creditors and the ARC are in agreement.

What are sources of funds for ARCs?

An ARC can issue bonds, debentures, and security receipts to meet its funding requirements.

Security Receipt:

  • It is a receipt that an ARC issues to a Qualified Institutional Buyer (QIB). Whereas, QIB receives the title, right, or interest in the financial asset that ARC buys.
  • It also means these Security receipts are backed by discounted bad debts that an ARC owns.
  • Whereas, ARC uses this fund to make an upfront payment to buy the discounted bad debts.
  • Furthermore, an ARC can only raise investments from Qualified Institutional Buyer (QIB).

How are ARCs different from the?IBC?

  • The Insolvency and Bankruptcy Code (IBC) aims at the resolution and reorganization of insolvent companies. Whereas, ARCs are set up for clearing up NPAs.
  • ARCs primarily deal with recovery. Whereas the IBC seeks a resolution of insolvency.
  • Further, in the IBC Process, creditors can make insolvency resolution an economically viable process and entities can apply for insolvency, bankruptcy, or liquidation.

Source: TH

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