Daily News Analysis: 21 December 2024

1. 75 Years of the Banking Regulation Act, 1949

The Banking Regulation Act, 1949, marked its 75th anniversary, reflecting on its transformative impact on India’s financial sector.

Key Features:

Introduced licensing requirements for banks and empowered the Reserve Bank of India (RBI) to regulate banking operations.
Mandated prudential norms for liquidity and transparency through regular audits and public disclosures.
Strengthened public trust in banks by introducing measures like Prompt Corrective Action (PCA) to address financial distress.

Achievements:

Expanded financial inclusion through initiatives like Priority Sector Lending.
Enhanced stability during economic crises by enforcing strict regulatory oversight.
Adapted to modern challenges with amendments addressing digital banking and new-age financial institutions.

While the Act has been instrumental in shaping India’s banking landscape, challenges like asset quality deterioration and technological disruptions call for further reforms to ensure resilience.

2. 24th BIMSTEC Senior Officials Meeting

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) held its 24th Senior Officials Meeting, focusing on regional cooperation.

Highlights:

Reviewed progress since March 2023 and finalized documents on sustainable development, connectivity, and security.
Reaffirmed India’s commitment to BIMSTEC under its “Neighbourhood First” and “Act East” policies.
Discussed partnerships for counter-terrorism, climate change mitigation, and people-to-people exchanges.

BIMSTEC’s sector-driven approach positions it as a key platform for fostering economic growth and regional stability despite challenges like slow progress and political disputes among member states.

3. State Finances: A Study of Budgets of 2024-25

The Reserve Bank of India (RBI) released a report analyzing state budgets for the fiscal year 2024-25.

Key Findings:

States maintained their Gross Fiscal Deficit (GFD) within the target of 3% of GDP.
Capital expenditure increased to 3.1% of GDP, reflecting a focus on infrastructure development.
Total liabilities declined but remained above pre-pandemic levels.

Recommendations:

Rationalize subsidies to free up resources for productive expenditure.
Improve fiscal transparency by standardizing reporting practices for off-budget borrowings.

Efficient fiscal management is essential to sustain economic growth while addressing socio-economic disparities.

4. India’s Growing Undersea Cable Network

India launched two major undersea cable systems—India Asia Xpress (IAX) and India Europe Xpress (IEX)—to enhance global connectivity.

Significance:

IAX connects Chennai and Mumbai with Southeast Asia; IEX links these cities with Europe.
These fiber-optic cables carry over 99% of international internet traffic, forming the backbone of global communication.

Challenges:

Vulnerability to physical damage from natural disasters or cyberattacks.
Dependence on critical chokepoints like the Malacca Strait necessitates alternative routes.

India’s proactive role in securing undersea cables underscores its ambitions as a digital economy leader.

5. JAM Trinity and Digital Revolution

The JAM Trinity—Jan Dhan accounts, Aadhaar, and Mobile connectivity—has revolutionized governance in India by promoting financial inclusion and transparency.

Achievements:

Over ₹33 trillion transferred directly to beneficiaries through Direct Benefit Transfers (DBT), reducing leakages.
Unified Payments Interface (UPI) facilitated real-time transactions worth ₹200 lakh crore in FY24.

JAM Trinity exemplifies how technology can empower citizens while streamlining public service delivery.

6. Masali: India’s First Solar-Powered Border Village

Masali village in Gujarat has become India’s first solar-powered border village under the PM Suryaghar Yojana.

Key Features:

Location: Situated in Banaskantha district, 40 km from the Pakistan border.
Solar Initiative: 119 houses in the village now have solar rooftops, generating over 225 kilowatts of electricity.
Significance: This initiative is part of the Border Development Project aimed at improving living standards in remote areas.

Impact:

Reduces dependency on conventional energy sources.
Promotes sustainable development in border regions.
Enhances security by ensuring reliable power supply for border surveillance.

Masali’s transformation sets a benchmark for renewable energy adoption in rural and strategic areas.

7. Prashasan Gaon Ki Ore Campaign

The “Prashasan Gaon Ki Ore” campaign was launched during Good Governance Week to strengthen grassroots democracy and improve governance in rural areas.

Objectives:

Address public grievances through special camps.
Enhance service delivery via digital platforms like CPGRAMS (Centralized Public Grievance Redress and Monitoring System).
Disseminate good governance practices across states and union territories.

Coverage:

The campaign is being implemented in northeastern states (Assam, Manipur, Meghalaya) and union territories (Jammu & Kashmir, Ladakh).

Key Activities:

Resolution of public grievances.
Success stories highlighting effective governance.
Improved access to essential services.

This initiative underscores the government’s commitment to bridging the urban-rural governance gap.

8. Phewa Dialogue: Nepal-China Cooperation

The Phewa Dialogue series was recently launched by Nepal and China to promote regional prosperity and economic integration in South Asia.

About Phewa Dialogue:

Named after Phewa Lake in Nepal’s Pokhara Valley.
Focuses on fostering cooperation on trade, technology, and sustainable development.

Significance:

Encourages dialogue among South Asian nations to address shared challenges.
Enhances economic integration through trade and investment partnerships.
Promotes Track II diplomacy involving academic institutions like Sichuan University and Tribhuvan University.

The dialogue highlights Nepal’s strategic role in facilitating regional collaboration.

9. India and ADB Loan Agreement for SMILE Programme

India signed a $350 million loan agreement with the Asian Development Bank (ADB) for the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) programme.

Key Features of SMILE:

Focuses on improving logistics efficiency across national, state, and city levels.
Aims to standardize warehousing infrastructure to attract private investment.
Promotes low-emission smart systems for efficient logistics operations.

Benefits:

Boosts India’s manufacturing sector by enhancing supply chain resilience.
Aligns with India’s goal of becoming a global manufacturing hub under initiatives like “Make in India.”

This agreement reflects India’s commitment to modernizing its logistics infrastructure for economic growth.

10. MSP for Copra Hiked

The government announced an increase in the Minimum Support Price (MSP) for copra by ₹420 to ₹12,100 per quintal for 2025.

What is MSP?

MSP is a market intervention mechanism designed to protect farmers from price fluctuations by ensuring a minimum price for their produce.

Significance of Copra MSP Hike:

Supports coconut farmers by providing assured income.
Encourages higher production of copra, a key raw material for coconut oil and other products.
Aligns with government efforts to boost agricultural income security.

This decision benefits millions of coconut farmers across states like Kerala, Tamil Nadu, and Karnataka.

11. Himalayan Birch Tree: Climate Change Impact

New research indicates that climate change is altering the tree line landscape of the central Himalayas. The Himalayan Birch Tree (Betula utilis) is being replaced by fir trees (Abies spectabilis).

Key Findings:

Fir trees are climbing upslope faster than birch trees due to warmer temperatures and moisture stress affecting birch growth.
Birch trees play a critical ecological role by providing shelter and food for wildlife in high-altitude regions.

Implications:

The shift in vegetation highlights the need for climate adaptation strategies to preserve Himalayan biodiversity and ecosystem stability.

12. Squirrels: Opportunistic Omnivores

A recent study has classified California ground squirrels as “opportunistic omnivores,” shedding light on their adaptive feeding behaviors.

Key Characteristics:

Diet includes nuts, seeds, fungi, insects, bird eggs, and small animals when necessary.
Squirrels store food during winter months to survive harsh conditions.

Types of Squirrels:

Tree Squirrels: Found in forests; adept climbers.
Ground Squirrels: Live primarily underground; known for burrowing behavior.
Flying Squirrels: Use skin membranes (patagium) to glide between trees.

This study emphasizes squirrels’ ecological importance as seed dispersers and contributors to forest regeneration.

13. Northern Giant Hornet (Murder Hornet): Eradication Efforts

The Northern Giant Hornet (Vespa mandarinia), also known as the “murder hornet,” has been eradicated from Washington State since its first sighting in 2019.

Key Facts:

Native to Asia; largest hornet species globally (up to 2 inches long).
Threatens agriculture by destroying honeybee hives within hours.
Delivers venomous stings capable of penetrating beekeeper suits.