08 September 2023 CNA
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TABLE OF CONTENTS
A. GS 1 Related B. GS 2 Related C. GS 3 Related ECONOMY 1. Impact of RBI’s lending guidelines D. GS 4 Related E. Editorials ART AND CULTURE 1. Disappearing languages, vanishing voices INTERNATIONAL RELATIONS 1. Finding Seoul in the Indo-Pacific F. Prelims Facts 1. Delhi may turn venue for dialogue on reviving the Black Sea Grain Initiative 2. What is heat index and why is it important to measure 3. African Union to join G-20, as Sherpas reach a deal G. Tidbits 1. PM Modi presents a 12-point proposal to expand India-ASEAN relations H. UPSC Prelims Practice Questions I. UPSC Mains Practice Questions
A. GS 1 Related
Nothing here for today!!!
B. GS 2 Related
Nothing here for today!!!
C. GS 3 Related
1. Impact of RBI’s lending guidelines
Syllabus: Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment.
Mains: Indian economic policies, financial sector reforms, and their impact.
Prelims: About the role and functions of RBI.
Context
On August 18, the Reserve Bank of India (RBI) introduced guidelines enabling borrowers to switch between fixed and floating interest rates, addressing concerns and providing flexibility.
Introduction
- On August 18, the Reserve Bank of India (RBI) introduced new guidelines allowing borrowers to switch from floating interest rate-based loans to fixed interest rate-based loans.
- The objective is to address borrowers’ concerns related to loan tenure and increased EMIs when benchmark interest rates rise.
- These provisions apply to both existing and new loans and will be implemented by the end of the current calendar year.
RBI’s Instructions:
Option to Switch Interest Rate Mechanism
- Borrowers now have the option to switch from floating to fixed interest rates for their loans.
- This switch is based on a board-approved policy drafted by the lending entity.
Policy Guidelines
- The lending entity’s policy must specify how many times such a switch is allowed during the loan tenure.
- Lenders must transparently communicate all relevant charges, service charges, and administrative costs associated with this transition.
- The responsibility lies with the lender to clearly communicate the impact of the change from floating to fixed interest rates (e.g., changes in EMI and/or loan tenure) at the time of loan sanction.
Borrower Options
- Borrowers can choose to enhance the EMI, extend the loan tenure, or opt for a combination of both.
- They also have the choice to prepay the loan partially or in full during the loan tenure. However, prepayment may incur foreclosure charges or prepayment penalties.
Quarterly Statements
- Lending entities are required to provide borrowers with statements at the end of each quarter.
- These statements should detail principal and interest recovered, EMI amounts, remaining EMIs, and the annualised rate of interest/Annual Percentage Rate (APR) for the entire loan tenure.
- RBI emphasises that these statements should be simple and easily understood by borrowers.
Application of Instructions
- The instructions apply to equated instalment-based loans with variations based on the nature of the loan.
Difference between Fixed and Floating Interest Rates
- Fixed interest rates remain constant during the loan tenure, providing certainty and security.
- Floating interest rates fluctuate based on market dynamics and the base rate, carrying some risk.
- Floating rates are generally lower than fixed rates but can rise with benchmark rates.
- Floating interest rate loans do not have prepayment penalties, unlike fixed-rate loans.
Assessing Repayment Capacity
- RBI requires lending entities to assess the repayment capacity of prospective borrowers.
- This assessment allows borrowers sufficient headroom/margin for potential tenure elongation or increased EMIs.
- Parameters for assessment include the borrower’s payment capacity and age.
- RBI suggests avoiding excessively long elongation, ensuring that extensions are reasonable.
Commercial Decision by Banks
- RBI emphasises that the decision to allow switches between interest rate mechanisms is a commercial decision that banks need to make.
- The guidelines provided by RBI offer a broad framework for banks to follow.
Nut Graf: RBI’s recent guidelines empower borrowers to transition between fixed and floating interest rates, emphasising transparency, options, and borrower-centric communication in loan management.
D. GS 4 Related
Nothing here for today!!!
E. Editorials
1. Disappearing languages, vanishing voices
Syllabus: Indian Culture – Salient aspects of Art Forms, Literature and Architecture from ancient to modern times.
Mains: Importance of Linguistic Diversity and reason for its decline
Prelims: Linguistic Diversity Index
Context: The stark reality of language loss threatens diverse cultures, erasing identities and traditions, fueled by migration and globalization, demanding urgent preservation efforts.
Extinction of Languages:
- The extinction of languages is a global phenomenon affecting the world’s linguistic diversity. There are approximately 7,000 distinct languages spoken worldwide, each representing a unique cultural and historical heritage.
- Mathematical models predict that around 40% of languages with fewer than 35,000 speakers could disappear within the next century. This extinction implies that these languages will no longer be spoken as a mother tongue or as the principal language of a community.
- In the Indian context, the prevalence of a few dominant languages, such as English, which boasts 340 million native speakers and over 1.2 billion second language speakers, contributes to the shrinking linguistic diversity. English’s global reach can be attributed in part to British colonial rule.
Linguistic Diversity Index (LDI):
- The Linguistic Diversity Index (LDI) quantifies the decline in the number of mother-tongue speakers of the world’s languages over a specified period, typically 30 years.
- The Language Diversity Index measures the probability that two randomly selected people within a population have different mother tongues. It ranges from 0 (everyone speaks the same language) to 1 (no two people share the same mother tongue).
- The UK has an LDI of 0.139, indicating a moderate level of linguistic diversity, while India has an LDI of 0.930, reflecting its high linguistic diversity.
- The USA, despite its predominant use of English, has an LDI of 0.353, illustrating the influence of significant immigrant populations who bring their languages and contribute to diversity.
- The top-ranking three countries with the highest LDI are Papua Guinea (0.990), Vanuatu (0.972) and the Solomon Islands (0.965).
Also read 8th Schedule of the Indian Constitution- Official Languages.
Reasons for Shrinking Linguistic Diversity:
- Shrinking linguistic diversity is primarily driven by migration patterns. When people migrate to countries where a dominant language is spoken, they often face social and economic pressures to adopt that dominant language. As a result:
- First-generation migrants typically become bilingual, retaining their mother tongue but acquiring proficiency in the dominant language.
- The next generation may have a weaker connection to their parents’ mother tongue, as they prioritize the dominant language for education and social interaction.
- By the third generation, the original mother tongue may no longer be spoken or understood, leading to its potential extinction within the family.
- The increasing globalization and interconnectedness of the world further encourage the adoption of dominant languages for better economic opportunities and communication.
Impact of Shrinking Linguistic Diversity:
- A loss of linguistic diversity equates to a loss of cultural diversity. Languages are carriers of cultural values, traditions, and indigenous knowledge.
- As languages become extinct, unique identities and cultural expressions vanish, erasing the rich tapestry of human culture.
- Dozens of languages are currently on the brink of extinction, with only one living native speaker. This precarious state reflects the urgent need to preserve these languages to safeguard cultural heritage.
Provisions in the Indian Constitution for Minority Languages:
- Article 29 of the Indian Constitution safeguards the interests of minorities by ensuring that they have the right to conserve their distinct language, script, or culture.
- Article 345 empowers Indian states to specify their official language(s) for official purposes within the state.
- Article 348(1)(a) allows for the use of any language for official purposes of the Union, thus promoting linguistic diversity and inclusivity.
- Article 350 B provides for the appointment of a special officer for linguistic minorities to investigate and monitor the protection of their rights, further emphasizing the importance of linguistic diversity in India.
Nut Graf: In a world where linguistic diversity is rapidly diminishing, the Linguistic Diversity Index (LDI) serves as a crucial tool to assess and comprehend this decline. This index measures the decline in mother-tongue speakers of languages worldwide. It sheds light on the profound consequences of language loss and the urgent need for preservation efforts.
Category: INTERNATIONAL RELATIONS
1. Finding Seoul in the Indo-Pacific
Syllabus: Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests.
Mains: India – South Korea relations
Context: Amidst 50 years of diplomatic ties, the Camp David summit offers a strategic reset, allowing India and South Korea to collaborate.
Significance of Camp David Summit:
- Repairing Seoul-Tokyo Relations: The Camp David summit between the U.S., Japan, and South Korea signifies a positive shift in Seoul-Tokyo relations, addressing historical tensions.
- Strengthening U.S.-Led Alliances: It contributes to a stronger U.S.-led alliance structure in East Asia, aligning with AUKUS, the Quad, and the CHIP 4 Alliance.
- Regional Security Adaptation: The summit reflects an acknowledgement of the changing regional security environment, emphasizing the need for coordinated responses to emerging challenges.
- Potential for Indo-Pacific Strategy: The summit opens opportunities for South Korea to reorient itself in the Indo-Pacific, aligning with the American perspective on China and deepening engagement in the region.
- Departure from Passive China Policy: South Korea’s departure from its traditionally passive approach towards China underscores its willingness to address the growing Chinese military presence in the region, despite economic dependencies.
Opportunities for Delhi and Seoul:
- South Korea’s Indo-Pacific Role: South Korea’s evolving strategic direction in the Indo-Pacific offers an opportunity for India to enhance its relations with Seoul.
- Desire to Join the Quad: South Korea’s interest in joining the Quad reflects a growing desire for regional engagement and aligns with India’s interests.
- “Global Pivotal State” Vision: President Yoon Suk Yeol’s foreign policy vision positions South Korea as a “global pivotal state,” creating avenues for partnership with India.
Potential Areas for Strengthened Cooperation:
- Political and Diplomatic Engagement:
- Annual Foreign Minister-level Summits: Regular high-level meetings between the foreign ministers of India and South Korea can facilitate strategic discussions, enhance mutual understanding, and provide a platform for addressing regional and global challenges.
- 2+2 Format Dialogue: Exploring a 2+2 dialogue format, which involves meetings between the defence and foreign ministers of both countries, can deepen security cooperation and coordination on regional issues.
- Reciprocal Visits by Leaders: Reciprocal visits by leaders, such as Prime Minister Narendra Modi of India and President Yoon Suk Yeol of South Korea, can strengthen personal rapport and political ties, fostering a closer partnership.
- Critical and Emerging Technology:
- iCET Initiative: Collaborating on a South Korea-Japan-India-U.S. initiative focused on Critical and Emerging Technology (iCET) can promote technological innovation, cybersecurity, and economic growth by sharing expertise and resources in this critical area.
- Defence Collaboration:
- Leveraging South Korea’s Expertise: South Korea’s advanced defence technology and capabilities can support India’s defence modernization efforts. Leveraging this expertise can include joint research and development projects, technology transfer, and collaborative defence production.
- Co-production Opportunities: Exploring co-production opportunities for military equipment like the K9 Vajra self-propelled howitzer and K2 Black Panther tanks can enhance self-reliance in defence production and promote economic cooperation.
- Civilian Nuclear Reactors:
- Clean Energy Cooperation: Collaborating on Korean-built civilian nuclear reactors can help India meet its growing energy demands while reducing carbon emissions. This partnership aligns with India’s commitment to clean and sustainable energy sources.
- Addressing Legal Challenges: Both countries should work together to address challenges related to India’s nuclear liability law and international agreements, ensuring a conducive environment for the import and operation of Korean-built reactors in India.
Nut Graf: In commemorating 50 years of diplomatic relations, India and South Korea have a prime opportunity to strengthen cooperation in multiple key areas. This includes political and diplomatic engagement through high-level summits, exploring critical technology initiatives, deepening defence collaboration, and fostering clean energy cooperation with Korean-built nuclear reactors. These strategic partnerships align with evolving geopolitical dynamics in the Indo-Pacific, ensuring mutual benefits and regional stability.
F. Prelims Facts
1. Delhi may turn venue for dialogue on reviving the Black Sea Grain Initiative
Syllabus: GS 2- International relations
Prelims: Black Sea Grain Initiative
Reviving the Black Sea Grain Initiative (BSGI)
- UN Secretary-General Antonio Guterres seeks to renew the BSGI during discussions at the G-20 Summit in Delhi.
- The BSGI, facilitating grain exports from Russia and Ukraine, expired in July, prompting urgent negotiations.
Read more on the Black Sea Grain Initiative (BSGI).
Key Leaders and Compromise Efforts
- Prominent figures attending the G-20 Summit, including Turkey’s President Recep Erdogan, Russian Foreign Minister Sergey Lavrov, EU leaders, and UN officials, aim to reach a compromise.
- The objective is to enable the resumption of grain exports from blockaded Ukrainian ports at the earliest opportunity.
India’s Support and MEA’s Position
- India expresses support for the BSI, although Ministry of External Affairs (MEA) officials claim to be unaware of specific sideline meetings related to the initiative at the G-20 Summit.
BSGI Background and Lapse
- The BSI initially emerged to address potential shortages of wheat and sunflower oil during the Ukraine conflict but lapsed in July.
- Russia refused to renew the deal, citing unfulfilled promises by Western countries.
UN’s Active Involvement
- UN Secretary-General Guterres plays a proactive role in resolving the issue, with potential concessions involving greater access to financial markets for Russia.
- In return, guarantees are sought to prevent Russia from threatening or bombing Ukrainian ships or ports involved in grain exports.
President Erdogan’s Involvement
- Turkey’s President Erdogan, following his Russia visit, is expected to advance discussions regarding the BSGI during his meetings in Delhi.
- He expressed optimism about reaching a swift solution.
New Proposals and Global Food Impact
- Turkey and the United Nations collaborated on a fresh set of proposals for Russia to consider, with discussions on the way forward scheduled during their Delhi visit.
- The BSGI includes agreements among Russia, Ukraine, Turkey, and the UN to resume grain and foodstuff exports and promote Russian food products and fertilisers globally.
- Without these agreements, the world faces the risk of significant food inflation, especially impacting African nations, as Russia and Ukraine collectively account for a substantial share of global barley, maize, and wheat exports.
2. What is heat index and why is it important to measure
Syllabus: GS 3- Environment
Prelims: Heat Index
Iran’s Unprecedented Heat
- In August, Iran experienced a record-breaking heat index of 70°C in its coastal region, leading to extreme conditions considered nearly unsurvivable.
- Public holidays were declared in early August due to the unprecedented heat.
Repeat Occurrence of Extreme Heat
- This year, Iran has faced multiple instances of extreme heat, including a heat index of 66.7°C recorded in July at the Persian Gulf Airport.
Understanding Heat Index
- The heat index, or apparent temperature, gauges how hot the weather feels to humans and is influenced by both air temperature and relative humidity.
Calculating Heat Index
- Dr. Robert Steadman of Colorado State University developed a complex formula in 1979 to calculate the heat index, considering factors like air temperature, humidity, wind, extra radiation, and barometric pressure.
- The dew point, the temperature at which air becomes saturated with moisture and condensation occurs, is a crucial element in this calculation.
Read more on Heat Index.
Importance of Measuring Heat Index
- Heat index matters because higher temperatures increase the air’s moisture-holding capacity, affecting how humans perceive the temperature.
- During heatwaves, humidity is often elevated, causing the heat index to surpass the actual air temperature.
- High humidity can lead to heat stress, with symptoms including elevated heart rate, heat-related exhaustion, rashes, and potential fatalities if untreated.
Impact of High Humidity on the Body
- High humidity impedes the body’s ability to dissipate excess heat through sweating and evaporation, as the air is already saturated with moisture.
- In contrast, lower humidity allows for efficient sweat evaporation, making the apparent temperature closely align with the actual air temperature.
- Thus, the heat index is a more accurate indicator of the heat’s impact on humans.
Adaptation to Extreme Heat
- A heat index exceeding 67°C poses severe risks to people and animals with prolonged exposure.
- In light of climate change, preparing for and adapting to such extreme conditions is crucial.
- Strategies may include early warning systems, adjusting work schedules, and implementing sustainable cooling solutions to safeguard health and well-being.
3. African Union to join G-20, as Sherpas reach a deal
Syllabus: GS 2- International Relations
Prelims: African Union and G20
African Union to Join G-20
- Negotiators at the Sherpa meeting near Delhi have agreed to the African Union’s (AU) membership in the G-20, making it the 55th member.
- The AU will join the European Union as the only two regional bodies in the G-20.
- The official renaming of the G-20 as the “G-21” is yet to be confirmed, but Indian officials see this development as a lasting impact of India’s efforts during its G-20 Presidency.
Ongoing Negotiations
- Sherpas, representing G-20 leaders, will continue discussions at the Delhi G-20 venue until a draft declaration is agreed upon.
- No G-20 summit has ended without a joint statement, and Indian officials aim to bridge gaps in the draft by the summit’s conclusion on Sunday.
Key Challenges
- The primary challenge is resolving the “geopolitical issue” paragraph in the draft, particularly concerning United Nations General Assembly resolutions condemning Russia’s invasion of Ukraine.
- Disagreements persist in areas like climate financing, debt restructuring, fossil fuel phase-out deadlines, and carbon emission reductions.
- Tensions between Indian and Chinese delegates have led to confrontations and debates over proposed initiatives and wording.
China and Russia’s Support for AU Membership
- Chinese Foreign Ministry spokesperson Mao Ning expressed China’s early support for the AU’s G-20 membership.
- China views the AU as an important partner in strengthening global governance and international fairness.
- Russia’s G-20 Sherpa also noted Moscow’s early support for the AU’s membership.
Continued Negotiations
- While significant progress has been made, differences persist in various areas, necessitating ongoing negotiations.
G. Tidbits
1. PM Modi presents a 12-point proposal to expand India-ASEAN relations
- During the annual ASEAN-India Summit, Prime Minister Narendra Modi presented a comprehensive 12-point plan aimed at bolstering cooperation between India and ASEAN.
- The proposal centred on areas such as connectivity, trade, digital transformation, and the establishment of a rules-based global order in the post-COVID era.
- Modi also announced the creation of a multi-modal connectivity and economic corridor that would link Southeast Asia, India, West Asia, and Europe.
- India extended an offer to share its digital public infrastructure stack with its ASEAN counterparts.
- The proposal emphasised the significance of collaborative actions to counteract terrorism, the financing of terrorism, and cyber disinformation. Additionally, it advocated for addressing concerns relevant to the Global South in international forums.
- During his speech at the East Asia Summit, Modi urged for cooperative efforts to strengthen the sovereignty and territorial integrity of nations. He championed the adoption of a robust code of conduct in the South China Sea that complies with the United Nations Convention on the Law of the Sea (UNCLOS).
H. UPSC Prelims Practice Questions
Q1. Consider the following statements regarding fixed and floating interest rates:
- Fixed rates remain unchanged during the loan tenure.
- Floating rates are generally higher than fixed rates.
- Floating-rate loans may have prepayment penalties.
How many of the statements given above are incorrect?
- Only one
- Only two
- All three
- None
CHECK ANSWERS:-
Answer: b
Explanation:
Fixed rates offer stability while floating rates vary with market conditions. Floating interest rates are generally lower than fixed interest rates, and they do not draw any prepayment penalty— unlike fixed-rate loans.
Q2. Consider the following statements about the African Union (AU):
- It was officially launched in 2002.
- It promotes the integration of African economies.
- The AU aims to defend the sovereignty, territorial integrity and independence of its member states
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
CHECK ANSWERS:-
Answer: c
Explanation:
The AU was launched in 2002. It aims to promote the integration of African economies, and it defends the sovereignty, territorial integrity and independence of its members.
Q3. What was the primary objective of signing the Black Sea Grain Initiative?
- To promote trade in luxury goods
- To prevent shortages of essential commodities
- To enhance cultural exchange
- To boost tourism in the Black Sea region
CHECK ANSWERS:-
Answer: b
Explanation:
The Black Sea Grain Initiative aimed to avert massive shortages of wheat, sunflower oil, and other commodities due to the Ukraine conflict.
Q4. The 38th parallel divides which countries in East Asia?
- China and North Korea
- North Korea and South Korea
- South Korea and Japan
- Russia and North Korea
CHECK ANSWERS:-
Answer: b
Explanation:
The 38th parallel divides North Korea and South Korea in East Asia.
Q5. Consider the following statements regarding the heat index:
- The heat index is solely determined by air temperature.
- High relative humidity results in a lower heat index.
- The heat index indicates how the human body perceives temperature.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
CHECK ANSWERS:-
Answer: a
Explanation:
Statements 1 & 2 are incorrect. It is a combination of air temperature and relative humidity. High relative humidity actually results in a higher heat index.
I. UPSC Mains Practice Questions
- ASEAN and India need to strengthen their cooperation not just in terms of economic engagement but also in other fields. In this background, throw light on the 12-point proposal for Indo-ASEAN cooperation, and its benefits. (15 marks, 250 words) [GS-2; International Relations]
- When a language goes extinct, it strips humanity of a part of its history. Elaborate with the status of linguistic extinction in the world. (15 marks, 250 words) [GS-1; Society and Culture]
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