- RBI cuts repo rate again, extends moratorium
- China seeks India’s support for Hong Kong Law
- Will exit Open Skies Treaty, announces U.S.
- Biomedical waste disposal poses a huge challenge
- Aarogya Setu: Protection or threat?
RBI CUTS REPO RATE AGAIN, EXTENDS MORATORIUM
Focus: GS-III Indian Economy
Why in news?
- The Reserve Bank of India (RBI) further reduced the key interest rate or the repo rate by 40 bps on 22nd May 2020 after the Monetary Policy Committee (MPC) meeting as the COVID-19 pandemic induced lockdown continues.
- The Reserve Bank of India (RBI) has extended the moratorium on repayment for term loans by another three months till August 31, All other conditions for the facility remain unchanged.
Details of the Monetary Policy Changes
- The six-member MPC announcement has reduced the repo rate to 4%.
- The MPC also decided to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target.
- All conditions for the Loan Moratorium facility remain unchanged.
- In view of the extension of the lockdown and continuing disruptions on account of COVID-19, it has been decided to permit lending institutions to extend the moratorium on term loan instalments by another three months, i.e., from June 1, 2020 to August 31, 2020. Accordingly, the repayment schedule and all subsequent due dates, as also the tenor for such loans, may be shifted across the board by another three months.
- Also, to alleviate difficulties being faced by exporters in their production and realisation cycles, it has been decided to increase the maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks from the existing one year to 15 months, for disbursements made up to July 31, 2020.
Background to what was done before:
- In end March, the regulator announced the moratorium for a three-month period — March 1 to May 25.
- In a move to ease financial stress and to maintain adequate liquidity in the system, the Reserve Bank of India had announced several steps on 17th April 2020 including targeted long–term repo operations.
Highlights: Demand collapse
- Domestic economic activity has been impacted severely by the two-month lockdown.
- The top six industrialised States that account for about 60% of industrial output are largely in red or orange zones.
- High frequency indicators point to a collapse in demand beginning in March 2020 across both urban and rural segments.
- The MPC is of the view that headline inflation may remain firm in the first half of 2020-21, but should ease in the second half, aided also by favourable base effects.
What is Repo?
- A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities.
- In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day at a slightly higher price.
- That small difference in price is the implicit overnight interest rate. Repos are typically used to raise short-term capital.
- They are also a common tool of central bank open market operations.
- For the party selling the security and agreeing to repurchase it in the future, it is a repo; for the party on the other end of the transaction, buying the security and agreeing to sell in the future, it is a reverse repurchase agreement.
Monetary Policy Committee (MPC)
- The Monetary Policy Committee of India is responsible for fixing the benchmark interest rate in India.
- The meetings of the Monetary Policy Committee are held at least 4 times a year and it publishes its decisions after each such meeting.
- The committee comprises six members – three officials of the Reserve Bank of India and three external members nominated by the Government of India.
- They need to observe a “silent period” seven days before and after the rate decision for “utmost confidentiality”.
- The Governor of Reserve Bank of India is the chairperson ex officio of the committee.
- The Reserve Bank of India Act, 1934 was amended by Finance Act (India), 2016 to constitute MPC which will bring more transparency and accountability in fixing India’s Monetary Policy.
- The monetary policy are published after every meeting with each member explaining his opinions.
- The committee is answerable to the Government of India if the inflation exceeds the range prescribed for three consecutive months.
- Key decisions pertaining to benchmark interest rates used to be taken by the Governor of Reserve Bank of India alone prior to the establishment of the committee.
- The Governor of RBI is appointed and can be disqualified by the Government anytime.
-Source: The Hindu
CHINA SEEKS INDIA’S SUPPORT FOR HONG KONG LAW
Focus: GS-II International Relations
Why in news?
China has sought the support and understanding of India and other countries for its controversial decision to impose a new national security law on Hong Kong, saying the new legislation is aimed at containing the “secessionist” forces in the former British colony who have posed a “grave threat” to the country’s national security and sovereignty.
- In an apparent move to blunt any international backlash, China has sent demarches to India and several other countries explaining the reason for the new draft legislation with a reminder that upholding national security in Hong Kong Special Administrative Region (HKSAR) is purely China’s internal affair and no foreign country may interfere in this matter.
- The legislation for upholding national security in the Hong Kong SAR is purely China’s internal affair and No foreign country may interfere in this matter – the demarche said.
Background: Law and Impact
- China on 22nd May 2020 introduced the draft of a controversial national security law in Hong Kong in its parliament to tighten Beijing’s control over Hong Kong, the former British colony.
- This could be the biggest blow to the territory’s autonomy and personal freedoms since 1997 when it came under Chinese rule.
- Hong Kong is a Special Administrative Region (SAR) of China.
- It has observed a “one country, two systems” policy since Britain returned sovereignty to China on July 1, 1997, which has allowed it certain freedoms the rest of China does not have.
- The demarche said since the return of Hong Kong to China 23 years ago, the Hong Kong SAR has not acted out its constitutional duty for national security in line with China’s Constitution and the Basic Law.
- While the seven-month-long agitation last year in which millions took part subsided during the coronavirus (COVID-19) crisis from January to April, protesters returned to streets this month, with the pro-autonomy and pro-freedom legislators grappling with the security officials in local legislature protesting against the curbs.
Special Status of Hong Kong
- Since the return to China in 1997, Hong Kong has been governed by the Basic Law, which allows the territory “to enjoy executive, legislative and independent judicial power, including that of final adjudication”, barring matters of defence and foreign affairs.
- The Basic Law requires Hong Kong to pass national security legislation, but past attempts to do so were shelved when the moves triggered wide protests.
- The law will also for the first time allow China’s national security organs to formally operate in Hong Kong. Pa
-Source: The Hindu
WILL EXIT OPEN SKIES TREATY, ANNOUNCES U.S.
Focus: GS-II International Relations
Why in news?
The U.S. has given notice that it will exit the Open Skies Treaty (OST), an agreement that allows countries to monitor signatories’ arms development by conducting surveillance flights over each other’s territories.
- U.S. said Russia had “continuously and flagrantly” violated the treaty.
- The U.S.’s exit last year from another arms deal the West had signed with Russia — the Intermediate-Range Nuclear Forces (INF) treaty — as well as its imminent departure from the OST has raised the strong possibility that the Trump administration may not renew the New Start Treaty, an agreement signed by the Obama administration with Russia that caps Russian and U.S. nuclear arsenal.
- The Trump administration has been worried that extending New Start would negatively impact an arm deal with China and Russia.
- The U.S. has used the treaty more intensively than Russia.
- The State Department told the U.S. Congress earlier this year that it is concerned that China’s nuclear stockpile could be doubled if the New Start Treaty continued as is, without including China.
Open Skies Treaty (OST)
- The Treaty on Open Skies establishes a program of unarmed aerial surveillance flights over the entire territory of its participants.
- The treaty is designed to enhance mutual understanding and confidence by giving all participants, regardless of size, a direct role in gathering information about military forces and activities of concern to them.
- Open Skies is one of the most wide-ranging international efforts to date promoting openness and transparency of military forces and activities.
- The OST, first proposed in the early years of the Cold War, came into effect in 2002 and it allows its 34 signatories to conduct unarmed reconnaissance flights over the territory of treaty countries.
-Source: The Hindu
BIOMEDICAL WASTE DISPOSAL POSES A HUGE CHALLENGE
Focus: GS-III Environment and Ecology
Why in news?
The Covid-19 pandemic has presented a unique challenge where the country has to deal with an unestimated amount of such waste exclusively from Covid hospitals, quarantine centres and home quarantine facilities.
How is it being handled now?
- The Central Pollution Control Board (CPCB) had issued detailed guidelines in April on handing Covid-linked medical waste and launched a mobile app last week to track its collection and disposal.
- It specified scientific ways to collect, transport and dispose of such waste and asked state pollution control boards to adhere to it while monitoring the entire process.
- The guidelines had specific dos and don’ts for handing Covid-19 related waste — categorised yellow for highly infectious waste — at healthcare facilities, quarantine camps/homes, home care facilities, sample collection centres, laboratories, isolation wards and Common Biomedical Waste Treatment Facilities (CBWTF).
Work on ground
- Many states had assigned the job of collection and disposal of biomedical waste to private agencies and deployed dedicated vehicles for waste transportation till the CBWTFs.
- Civic bodies in many cities have also engaged trained manpower for its collection from quarantine homes/centres and home care facilities.
- It is the responsibility of the respective state pollution control boards/committees to maintain records of Covid-19 treatment wards, quarantine centres, quarantines homes and ensure proper collection and disposal of biomedical waste as per CPCB guidelines.
Central Pollution Control Board (CPCB)
- The Central Pollution Control Board (CPCB) of India is a statutory organisation under the Ministry of Environment and Forests (MoEF).
- It was established in 1974 under the Water (Prevention and Control of pollution) Act, 1974.
CPCB is also entrusted with the powers and functions under the Air (Prevention and Control of Pollution) Act, 1981.
- It serves as a field formation and also provides technical services to the Ministry of Environment and Forests under the provisions of the Environment (Protection) Act, 1986.
- It Co-ordinates the activities of the State Pollution Control Boards by providing technical assistance and guidance and also resolves disputes among them.
- It is the apex organisation in country in the field of pollution control, as a technical wing of MoEF
-Source: Times of India
AAROGYA SETU: PROTECTION OR THREAT?
Focus: GS-II Governance
- The Data of millions of Indians, collected through the Aarogya Setu app, could be vulnerable to threats from adversarial state and non-state actors and pose a national security challenge, according to cybersecurity experts and former intelligence officials.
- Indian government officials reject these concerns, saying their encryption standards have adequate protection against data or network breaches.
How does the app work?
- Since its launch in early April, Aarogya Setu has had at least 106 million sign-ups and the process requires users to declare their mobile numbers, name, gender, age, and whether they belong to a set of high-risk professions, such as law enforcement or health care.
- The application then routinely asks people to “self-assess” their health by answering questions such as whether they have any of the symptoms associated with Covid-19 or if they have a history of diabetes, hypertension or obesity – factors that make people more susceptible to the disease.
Government’s Use of Aarogya Setu App
- Aarogya Setu is meant to trace close contact between people so that they can be reached in the event any of them is infected with Covid-19.
- According to government officials, at least 110 million people have signed up on it, and while a rule making it mandatory for office-goers to install it was partially relaxed recently, with just the condition that air passengers must install it if they are taking a flight.
- Government officials has said that their data encryption standards have adequate protection against breaches.
Concerns of Threat:
- National databases in general are a huge cause of concern, as sometimes the leaks don’t even appear on the dark web. They are simply scooped away for doing passive profiling of citizens of adversarial countries.
- The threat is particularly serious due to the nature of information involved.
- The users of Aarogya Setu part with information that can directly identify them, where they have been, and what health conditions they suffer from, making it a target for common cyber criminals who can offer these up on the dark web for a price, as well as state-backed hackers for espionage.
- Cyber criminals are known to use such data to determine multiple point of information about an individual, which can then be used to bypass identity checks for crimes such as bank account theft.
How does Data breach happen?
Fundamentally, data breaches can happen in two ways:
- The most common method is deceiving someone into divulging sensitive information or giving a hacker privileged access – a tactic commonly known as a phishing attack.
- The other is code-based attacks on computer networks, which usually make use of flaws in software, or what are known as exploits.
Till now, as of 23rd May, officials have not detected such an attempt on health data in India.
- There is a 3rd risk factor associated with the Aarogya Setu push – modified or impostor applications that look like Aarogya Setu but are spying tools.
- These have been spread using the same techniques as phishing, often through messaging applications or via links sent over WhatsApp.
- While this might not expose the entire database, it could compromise individuals who are successfully targeted.
-Source: Hindustan Times