Daily Current Affairs | 8th June 2020
Gairsain now becomes summer capital of Uttarakhand
With Governor Baby Rani Maurya giving her assent for declaration of Bhararisen (Gairsain) in Chamoli district as the summer capital of Uttarakhand, a two-decade long wait of the hill region came to an end.
- Gairsain, a tehsil in Chamoli district, is located nearly 270-km from existing temporary capital of Dehradun.
- Even when Uttarakhand was carved out as a separate state from Uttar Pradesh on November 9, 2000, statehood activists had contended that Gairsain was best suited to be the capital of the mountainous state since it was between both Kumaon and Garhwal regions.
- But it was Dehradun in the plains that was names the temporary capital.
How the grounds were laid for the capital?
- Officials in the government recall that former CM Vijay Bahuguna (then as Congress leader) had held first cabinet meeting in Gairsain in the local block office building in 2012.
- It was then announced that Gairsain will host at least one session in a year. Bahuguna had also laid foundation stone of a Vidhan Sabha building in Gairsain in January 2013.
What is being done?
- Developed in an area of 47-acres, the Vidhan Sabha complex in Bhararisen stands at a height of 2380-metre from the sea level, making it a cold location for the entire year.
- The building is opened only for a few days a year and is kept closed for the remainder. When a session is convened, files as well as officers and staff from Vidhan Sabha and Secretariat in Dehradun make the 10-hour journey here and return as soon as the proceedings end.
Strong FPI inflows, rising foreign currency assets propel forex reserves to record high
Unlike in 1991, when India had to pledge its gold reserves to stave off a major financial crisis, the country can now depend on its soaring foreign exchange reserves to tackle any crisis on the economic front.
Forex reserves
Foreign exchange reserves are assets like foreign currencies (capital inflows to the capital markets, FDI and external commercial borrowings), gold reserve, SDRs (special drawing rights of the IMF), and deposits with IMF, treasury bills, bonds, and other government securities. This reserve is held to provide back up support to the government liabilities like; various bank reserves deposited with the central bank by the government or financial institutions and issuance of local currency by the Central Bank. RBI is the custodian of the Foreign exchange reserves in India.
- The International Monetary Fund says official foreign exchange reserves are held in support of a range of objectives like supporting and maintaining confidence in the policies for monetary and exchange range management including the capacity to intervene in support of the national or union currency.
- It will also limit external vulnerability by maintaining foreign currency liquidity to absorb shocks during times of crisis or when access to borrowing is curtailed.
How forex reserves increased in India site slowdown in the economy?
- The major reason for the rise in forex reserves is the rise in investment in foreign portfolio investors in Indian stocks and foreign direct investments (FDIs).
- Foreign investors had acquired stakes in several Indian companies in the last two months.
- After pulling out Rs 60,000 crore each from debt and equity segments in March, Foreign Portfolio Investments (FPIs), who expect a turnaround in the economy later this financial year, have now returned to the Indian markets and bought stocks worth over $2.75 billion in the first week of June.
- On the other hand, the fall in crude oil prices has brought down the oil import bill, saving the precious foreign exchange. Similarly, overseas remittances and foreign travels have fallen steeply – down 61 per cent in April from $12.87 billion.
How will it help India?
- The rising forex reserves give a lot of comfort to the government and the Reserve Bank of India in managing India’s external and internal financial issues at a time when the economic growth is set to contract by 1.5 per cent in 2020-21.
- It’s a big cushion in the event of any crisis on the economic front and enough to cover the import bill of the country for a year.
- The rising reserves have also helped the rupee to strengthen against the dollar. The foreign exchange reserves to GDP ratio is around 15 per cent.
- Reserves will provide a level of confidence to markets that a country can meet its external obligations, demonstrate the backing of domestic currency by external assets, assist the government in meeting its foreign exchange needs and external debt obligations and maintain a reserve for national disasters or emergencies.
Where does India keep its forex reserves?
- The RBI Act, 1934 provides the overarching legal framework for deployment of reserves in different foreign currency assets and gold within the broad parameters of currencies, instruments, issuers and counter-parties.
- As much as 64 per cent of the foreign currency reserves is held in the securities like Treasury bills of foreign countries, mainly the US, 28 per cent is deposited in foreign central banks and 7.4 per cent is also deposited in commercial banks abroad, according to the RBI data.
- India also held 653.01 tonnes of gold as of March 2020, with 360.71 tonnes being held overseas in safe custody with the Bank of England and the Bank for International Settlements, while the remaining gold is held domestically.
- In value terms (USD), the share of gold in the total foreign exchange reserves increased from about 6.14 per cent as at end-September 2019 to about 6.40 per cent as at end-March 2020.
Cost involved in maintaining forex reserves –
- The return on India’s forex reserves kept in foreign central banks and commercial banks is negligible.
- While the RBI has not divulged the return on forex investment, analysts say it could be around one per cent, or even less than that, considering the fall in interest rates in the US and Euro zone.
- Another issue is the high ratio of volatile flows (portfolio flows and short-term debt) to reserves which is around 80 per cent. This money can exit at a fast pace.
- There are some differences among academics on the direct as well as indirect costs and benefits of the level of forex reserves, from the point of view of macro-economic policy, financial stability and fiscal or quasi-fiscal impact, former RBI Governor YV Reddy said in one of his speeches.
China publishes white paper on fight against COVID-19
China has exonerated itself from the global allegations of delay in reporting the COVID19 outbreak, saying the virus was first noticed in Wuhan on December 27 as a viral pneumonia and human-to-human transmission was discovered on January 19, after which it took swift actions to curb it.
- The white paper explains China’s prevention, control and treatment efforts in the battle against the virus, as well as the efforts made at a global level in international cooperation. China has made full use of the weapon to win the battle against COVID-19.
- A centralised and efficient command system forms a strong guarantee for China to win the all-out people’s war against COVID-19, the white paper detailing China’s fight against the disease stated.
- All local authorities and sectors follow the leadership and instructions of the central authorities, perform their respective duties and cooperate with each other, the white paper noted.
- From early outbreak to an all-out nationwide effort to save as many lives as possible, the Chinese Government has taken the most comprehensive, the strictest and the most thorough prevention and control measures to combat the coronavirus outbreak, according to the white paper.
- Science and technology have always been the most powerful weapon used by mankind to combat epidemics, and China has made full use of the weapon to win the battle against COVID-19, according to the white paper.
- China has vowed to continue advocating globalisation and multilateralism amid the coronavirus pandemic and in its aftermath, said the white paper.
- China has released information on COVID-19 in an open and transparent manner as required by law, said the white paper. “It released authoritative and detailed information as early as possible on a regular basis,” stated the white paper, “thus effectively responding to public concern and building public consensus.”
What’s the issue?
- US president Donald Trump and leaders of several countries have accused China of not being transparent in reporting the deadly disease, leading to huge human casualties and economic crisis across the world.
- Recently, the World Health Assembly (WHA), the decision-making body of Geneva-based World Health Organisation (WHO), passed a unanimous resolution to probe the origin of the virus. China also backed the resolution.
IAF inducts indigenously developed pod ARPIT to evacuate critical patients from remote areas
The Indian Air Force has designed, developed and inducted an Airborne Rescue Pod for Isolated Transportation (ARPIT). This pod will be utilised for evacuation of critical patients with infectious diseases including COVID-19 from high altitude area, isolated and remote places.
Why?
Requirement of an air evacuation system with facility to prevent spread of infectious aerosol from a COVID19 patient during air travel was felt by IAF when COVID19 was declared as a pandemic.
- The system has been developed as a lightweight isolation system made from aviation certified material.
- It has a transparent and durable cast Perspex for enhanced patient visibility which is larger, higher and wider than the existing models.
- The isolation system caters for suitable number of air exchanges, integration of medical monitoring instruments, and ventilation to an intubated patient.
- In addition, it generates high constant negative pressure in the isolation chamber for prevention of infection risk to aircrew, ground crew and health care workers involved in air transportation.
- The ARPIT utilises High Efficiency Particulate Air (HEPA) H-13 class filters and supports invasive ventilation using Transport Ventilator.
- The design integrates life support and monitoring instruments (defibrillator with multipara monitor, pulse oximeter, Infusion pumps etc), long arm gloves for use by health care professionals and power pack with high endurance.
- Design requirements have been evolved and are based on the guidelines issued by Ministry of Health and Family Welfare (MoHFW), National Accreditation Board for Hospitals & Healthcare Providers (NABH) and Centre for Disease Control (CDC), USA.
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