Pakistan will continue to remain on the grey list of Financial Action Task Force (FATF).
- The country was placed on the Grey List by the watchdog in June 2018 and was given 15 months to complete implementation of a 27-point action plan, failing which it be placed in the Black List.
- It included safeguards against money-laundering and terror-financing by banned outfits and non-government entities through banking and non-banking jurisdictions, capital markets, corporate and non-corporate sectors like chartered accountancy, financial advisory services, cost and management accountancy firm, jewellery and similar related services.
- Pak allies Turkey and Malaysia supported Pakistan at ongoing meet but that was not enough because, 12 out of 39 votes in FATF are required to move out of Grey List.
- FATF had released the Mutual Evaluation Report of Pakistan in October 2019, according to it Pakistan had failed to take enough action to stop terror financing in the country which headquarters groups like Lashkar-e-Tayyaba, Haqqani network and Jaish-e-Mohammed.
- The Financial Action Task Force (FATF) is an inter-governmental body established in 1989on the initiative of the G7.
- Headquarters – Paris
- The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
- The FATF’s decision making body, the FATF Plenary, meets three times per year.
- FATF grey lists a country which it considers as a safe haven for terror funding and money laundering.
- Though, inclusion in the list is not as severe as being black listed.
- It is a warning to the country to tackle the issues. If the country is not actively tackling money laundering or terror funding, it is then blacklisted.
- So far, only two countries have been blacklisted, they are Iran and North Korea.
Black List: Countries known as Non-Cooperative Countries or Territories (NCCTs) are put in the blacklist. These countries support terror funding and money laundering activities.
Consequences of being in the FATF black list:
- Economic sanctions from IMF, World Bank, ADB
- Problem in getting loans from IMF, World Bank, ADB and other countries
- Reduction in international trade
- International boycott
ISRO is also preparing to send its first scientific expedition to study the Sun, named Aditya-L1
- Aditya L1 is a 400 kg-class satellite, which will be launched using the Polar Satellite Launch Vehicle (PSLV) in XL configuration.
- It was planned to be placed at Lagrangian point 1 (L1), which is 1.5 million km from the Earth.
- The space-based observatory will have seven payloads on board to study the Sun’s corona, solar emissions, solar winds and flares, and Coronal Mass Ejections (CMEs), and will carry out round-the-clock imaging of the Sun.
Importance of studying sun:
- The solar weather and environment, which is determined by the processes taking place inside and around the sun, affects the weather of the entire planetary system.
- Variations in this weather can change the orbits of satellites or shorten their lives, interfere with or damage onboard electronics, and cause power blackouts and other disturbances on Earth.
- To learn about and track Earth-directed storms, and to predict their impact, continuous solar observations are needed.
SC Voices Concern Over Deforestation
Chief Justice of India Sharad A. Bobdevoicing concern over the loss of green coverand Deforestation is so rapid that before anyone knows everything will be lost.
- To create space for an over bridge in an accident-prone area of a highway so, they are cutting heritage trees of west Bengal.
- Large-scale removal of trees from forests (or other lands) for the facilitation of human activities.
More in News:
- A three-judge Bench, led by the Chief Justice, was hearing a petition challenging the cutting of heritage trees in West Bengal.
- Condemned humanities tendency to abuse natural resources for greed and profit.
- Estimate the value of a tree, factoring in the value of the quantum of oxygen it emits in its lifetime.
- Bench considered on board economists and environmentalists to estimate the value of a tree, factoring in the value of the quantum of oxygen it emits in its lifetime.
Impacts of Deforestation:
- Loss of biodiversity due to, damage to natural habitats, disturbances in the water cycle, and soil erosion.
- Contributor to climate change and global warming.
Reasons for Deforestation:
- In the field of Agriculture – Due to small-scale and large scale farming Logging – cutting of trees for use as raw material
- Clearing of forest area for the construction of infrastructure for Mining and urban expansion.
Foodgrain Production Set To Touch A Record High
Abundance of late monsoon rains resulted in larger-than-expected harvests
More in News:
- Farmers rake in rabi or winter harvests that were larger-than-expected in almost all crops.
- Production of several crops, including rice and major pulses, was lower than targeted in the kharif or the monsoon season.
- Due to late monsoon rains resulted in cumulative rainfall that was 10% higher than the long-period average for the season.
- No shortage of foodgrains in the country. We will be able to export more if international markets are competitive
- Higher rice output
- The Agriculture Ministry released rice production to reach slightly higher than the 116.48 million tonnes that produced in the previous year.
- Government’s drive to encourage millets and nutri-cereals, production failed to match targets this year, with the estimate pegged at 45.24 million tonnes.
- Pulses production was also estimated to come in lower-than targeted 23 million tonnes, although it was still higher than the previous year’s harvest.
- Most pulses are dry land crops, grown on land without irrigation and the delay in monsoons in many areas hit kharif harvests although rabi production improved.
- It was a similar story with oil seeds. Production was estimated at almost 342 million tonnes, higher than last year but still lower than the target for this year.
- Sugarcane is the only major crop where this year’s estimated production of 3,538 million tonnes was significantly lower than last year’s output of 4,054 million tonnes.
- A glut in sugar production over the last few years had resulted in a crash in prices and an increase in payment arrears from sugar mills to cane farmers.
- The cumulative rainfall in the country during the monsoon season (June to September, 2018) was 9% lower than the long period average.
- The cumulative rainfall in north west India, central India and south peninsula during that period has been normal on the whole.
India’s Imported Food Inflation
Is food inflation in India influenced by global price movements? On the face of it, that seems to be the case.
Return of the Food Inflation:
- The United Nations Food and Agriculture Organisation’s (FAO’s) food price index which is a measure of the change in international prices of a basket of major food commodities with reference to a base period (2002-04 = 100) touched 182.5 points in January 2020, the highest since the 185.8 level of December 2014.
- Also, the year-on-year inflation rate based on this index has risen steadily from 1.13% in August 2019 to 2.86% in September, 5.58% in October, 9.33% in November, 12.22% in December, and now, 11.33% for January 2020.
- This sharp surge in global food prices is reflected in trends in India as well. Retail and wholesale food inflation rates for December 2019 were the highest since November 2013 and December 2013 respectively. Since October or so, food inflation has made a comeback, both in India and globally.
Factors responsible for Inflation:
- Local Factors: Recent rise in domestic food prices, poor rainfall during the first half (June-July) of the monsoon season and too much of it thereafter till about mid-November, leading to both reduced/delayed kharif sowings and damage to the standing crop at maturity/harvesting stage Some of it is also “imported”.
- Foreign factors: India imports two-thirds of its edible oil requirement, higher international prices would have been automatically transmitted to the domestic market.
- Other factor the increase in the retail prices of onion in Delhi from Rs 22 per kg on January 31, 2019 to Rs 50 on January 31, 2020, was purely due to the failure of the domestic kharif crop.
- While global prices can be transmitted to the domestic market too through exports traders would sell abroad if realisations are better relative to the local market the government has foreclosed that possibility by banning/restricting onion shipments since September 2019.
Period of divergence:
- The domestic CFPI and FAO food price index inflation rates started moving in tandem only from around March 2018, while exhibiting significant divergence in the period prior to that.
- The FAO index peaked at 240.1 in February 2011, but remained at 200-plus levels until July 2014.
- Global prices crashed after that, and stayed low up to early 2016, with the FAO index dipping to 149.3 in February 2016.
- Domestic food inflation: It eased from 17.89% in November 2013 to fall below 7% by early 2016, as lower global commodity prices reduced the demand for Indian farm exports, even as they made imports cheaper.
- The actual fall in domestic inflation to the sub-5% range took place after September 2016. And that, in turn, had more to do with domestic factors, especially demonetization.
- The global prices between August 2016 and October 2017, the FAO index inflation, in fact, exceeded the corresponding CPFI rate.
What can happen now:
- When both international and domestic food prices are showing signs of renewed hardening.
- Now the question is: How sustainable is this trend? There are at least three bearish factors currently at play.
- 1 st Factor: The novel coronavirus epidemic that has reduced Chinese buying of everything from palm oil and soyabean to milk powder and meat.
- 2 nd Factor: crude oil. Brent crude prices had touched $70 per barrel after the January 3 United States airstrike that killed Iran’s top military commander, but have dropped since, closing at $57.67/barrel recently.
- 3 rd Factor: Prospect of a bumper rabi (winter-spring) crop in India. The kharif harvest turned out to be not so good because of excess and unseasonal rain.
- That same rain, though, has helped boost rabi acreage by 9.5% compared to last year. The arrival of this crop in the mandis from March should cool down prices, especially of vegetables and pulses, which showed the highest year-on- year retail inflation of 50.19% and 16.71% in January.
- Against these bearish factors are the relatively “bullish” factors.
- Global palm oil ending stocks this year are projected to be the lowest since 2009-10 and sugar is also expected to move into deficit.
- Supply tightness is being seen both globally and in India, even in milk. If Brent crude too, were to rally again, there could be uncertainty ahead.
Karbis Against ST Status For Hill Bods
An Assam-based insurgent group of Karbis, which signed a ceasefire agreement with the Centre, has demanded that the Bodos in the hill areas not be given the Scheduled Tribe status as it will affect the “identity of the Karbis”.
- Background: The Home Ministry, the Assam government and Bodo groups signed the pact on January 27 to redraw and rename the Bodoland Territorial Area District (BTAD), spread over Kokrajhar, Chirang, Baksa and Udalguri districts.
- Under the agreement, the Bodos in the hills will be given the Scheduled Hill Tribe status and villages dominated by the Bodos outside the BTAD will be included and those with non-Bodos excluded.
- The Bodos, an ethnic group in Assam, had been demanding a separate State since 1972, and are recognised as a Scheduled Tribe (Plain).
- After the conclusion of the latest Bodo pact, the Karbi Longri and North Cachar Hills Liberation Front (KLNLF), a militant group that signed a ceasefire pact with the Centre in 2009, has said a “political settlement” should be reached soon.
- KLNLF general secretary Thong Terong Kabi said “The identity of Karbis will come under threat if Bodos who live in the hill areas [along with Karbis] are also given a Scheduled Hill Tribe status,”
- The group’s primary demand was a separate State.
- In Assam, there are 14 recognised Plain Tribe communities, 15 Hills Tribe communities and 16 Scheduled Caste communities.
- After the peace accord with all Bodo groups, the Centre is at a very advanced stage of sealing a peace deal with other key militant groups, including the pro-talks faction of the United Liberation Front of Asom (ULFA) and the Karbi insurgent group. But, with the Assembly election in Assam due in April May next year.
- The final announcements could be tailored to suit the ruling BJP electorally. The BJP is expected to do well in the 15 Assembly constituencies in the Bengali-dominated Barak Valley because of the Citizenship (Amendment) Act (CAA).
- The recent Bodo peace deal will give the ruling party an edge in 12 seats under the BTAD. Similarly, a Karbi peace deal will give the party an edge in the 5 seats in the hill districts.
- There are 33 districts in Assam, and seven have been exempted from the CAA as they fall in the areas protected by the Sixth Schedule of the Constitution. The exempted districts comprise three autonomous district councils: BTAD, Karbi Anglong and Dima Hasao.
- The Karbi Anglong Autonomous Council has 26 seats, and the elections to the councils are due in 2022. “It is one of the oldest councils in existence since 1951.
- Nagaland and Mizoram that were autonomous councils initially became States years ago; only Karbi Anglong and Dima Hasao remain.