Current Affairs 2nd June 2023 for UPSC Prelims Exam
Additional Disclosure from FPI
Context: Additional disclosure norms have been mandated by SEBI from high-risk foreign portfolio investors (FPIs) who have concentrated single group exposures and/ or significant overall holdings in their India equity investment portfolio.
- SEBI seeks to categorize FPIs into high, moderate and low risk. The norms will not impact low-risk and moderate-risk FPIs.
- All FPIs other than government and government-related entities such as central banks, sovereign wealth funds, and pension funds or public retail funds, will be categorized as high-risk FPIs.
- It aims to implement transparency measures for fully identifying all holders of ownership, economic, and control rights.
- High-risk FPIs, holding more than 50 per cent of their equity Asset Under Management (AUM) in a single corporate group, will have to comply with the requirements for additional disclosures.
- Existing high-risk FPIs having share in Indian equity markets of over Rs 25,000 crore will also be required to comply with new disclosure requirements.
- In case of failure to follow the new norms within 6 months, FPIs will have to bring down its AUM below the threshold.
Reasons given for proposed changes:
- To ensure greater investor protection, and providing greater trust and transparency in the Indian securities market ecosystem.
- Additional measures also guard against possible circumvention of Minimum Public Shareholding (MPS).
Significance of SEBI norms:
- Some FPIs are concentrating a significant portion of their equity portfolio in a single investee company/ company group.
- Such concentrated investments increase possibility that promoters of such corporate groups, or other investors acting in nexus, could use the FPI route for circumventing regulatory requirements such as that of maintaining MPS.
Foreign Portfolio Investment (FPI):
It is a type of short-term investment in which investors invest in assets and securities outside their country. FPI does not provide investors direct ownership of a company’s assets.
Context: Recently, India has witnessed an unusually high number of western disturbances (WDs) in the last three months.
- According to data from the India Meteorological Department (IMD), there were six WDs in May.
About Western Disturbances
These are east-moving rain-bearing wind systems that originate beyond Afghanistan and Iran, and pick up moisture from as far as the Mediterranean Sea and even the Atlantic Ocean.
- These are examples of extra-tropical cyclones that are a result of low-pressure areas formed due to the interactions between polar and tropical winds.
- It is a non-monsoonal precipitation pattern driven by the westerlies.
- Western Disturbances frequently influence weather over India, particularly the northwestern regions.
- In the case of the Indian subcontinent, moisture is sometimes shed as rain when the storm system encounters the Himalayas.
- Western disturbances are more frequent and stronger in the winter season.
Significance of Western Disturbances
- Precipitation during the winter season has great importance in agriculture, particularly for the rabi crops.
- Wheat among them is one of the most important crops, which helps to meet India’s food security.
Unusual Western Disturbances in May 2023
- The trend of decreasing activity of WDs during winter months and their increasing activity in the summer months is a possible result of human-induced climate change.
- It could indicate changing characteristics of the typical weather conditions during these seasons.
- Negative impact of increasing WDs during summer could be their possible interaction with monsoon weather systems, such as low-pressure areas and depressions in the Bay of Bengal and the Arabian Sea.
- Such interaction can lead to extreme rainfall events and even cloud bursts in the hills and mountains, which can cause floods, flash floods and landslides.
Context: Recently, S&P Global India Manufacturing Purchasing Managers’ Index (PMI) rose from 57.2 in April to 58.7 in May on strong demand.
- The increase in output was the fastest in 28 months.
- Manufacturing sector also generated more employment opportunities in May this year.
- The manufacturing index has now spent 22 consecutive months above the key level of 50. A reading above 50 indicates expansion in activity, while a sub-50 print is a sign of contraction.
About Purchasing Managers’ Index (PMI)
- PMI or a Purchasing Managers’ Index (PMI) is an indicator of business activity — both in the manufacturing and services sectors.
- It is a survey-based measures that asks the respondents about changes in their perception of some key business variables from the month before.
- It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.
- The index is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers.
- To provide information about current and future business conditions to company decision makers, analysts, and investors.
- It is an indicator of economic health because the manufacturing and services sector is a key driver of economic growth.
- In general, a high PMI reading is seen as a positive sign for the economy, as it indicates that the manufacturing and services sectors are performing well and contributing to economic growth.
- A low PMI reading is seen as a negative sign, as it indicates that the manufacturing and services sectors are struggling and may be dragging down overall economic performance.
World’s Largest Grain Storage Plan in Cooperative Sector
Context: Recently, Union cabinet cleared a ₹1 trillion scheme to increase foodgrain storage capacity by 70 million tonnes in the cooperative sector.
About the Scheme
- This will be world’s largest grain storage plan in the cooperative sector.
- It will let cooperatives set up decentralised storage facilities across the country.
- The plan is to converge existing schemes of:
- Ministry of Agriculture and Farmers Welfare:
- Agriculture Infrastructure Fund (AIF),
- Agricultural Marketing Infrastructure Scheme (AMI),
- Mission for Integrated Development of Horticulture (MIDH),
- Sub Mission on Agricultural Mechanization (SMAM)
- Ministry of Food Processing Industries:
- Pradhan Mantri Formalization of Micro Food Processing Enterprises Scheme (PMFME),
- Pradhan Mantri Kisan Sampada Yojana (PMKSY)
- Ministry of Consumer Affairs, Food and Public Distribution:
- Allocation of food grains under the National Food Security Act,
- Procurement operations at Minimum Support Price
- It will utilize the funds available under the schemes for this purpose.
- It will led to a creation of infrastructure such as godowns, etc. for Agriculture and Allied purposes, at selected ‘viable’ Primary Agricultural Credit Societies (PACS).
- There are more than 1,00,000 Primary Agricultural Credit Societies (PACS) in the country with a huge member base of more than 13 crore farmers.
- Implementation: An Inter-Ministerial Committee (IMC) will be constituted under the Chairmanship of Minister of Cooperation, with Minister of Agriculture and Farmers Welfare, Minister of Consumer Affairs, Food and Public Distribution, Minister of Food Processing Industries and Secretaries concerned as members
Significance of Scheme
- It aims to address not just the shortage of agricultural storage infrastructure in the country by facilitating establishment of godowns at the level of PACS, but would also enable PACS to undertake various other activities, viz:
- Functioning as Procurement centres for State Agencies/ Food Corporation of India (FCI);
- Serving as Fair Price Shops (FPS);
- Setting up custom hiring centers.
- Setting up common processing units, including assaying, sorting, grading units for agricultural produce, etc.
- Creation of decentralized storage capacity at the local level would reduce food grain wastage and strengthening food security of the country.
- By providing various options to the farmers, it would prevent distress sale of crops, thus enabling the farmers to realise better prices for their produce.
- It would hugely reduce the cost incurred in transportation of food grains to procurement centres and again transporting the stocks back from warehouses to FPS.
- Through ‘whole-of-Government’ approach, the Plan would strengthen PACS by enabling them to diversify their business activities, thus enhancing the incomes of the farmer members as well.
Context: A successful training launch of a medium-range ballistic missile, Agni-1 was carried out by the Strategic Forces Command from APJ Abdul Kalam Island, Odisha.
About Agni-1 Missile
- Agni-I is a medium-range ballistic missile that was developed by DRDO of India in the Integrated Guided Missile Development Program (IGMDP).
- IGMDP was conceived by renowned scientist Dr. A P J Abdul Kalam to enable India technological self-reliance in the field of missile technology.
- It is a single-stage missile that was developed after the Kargil War.
Ballistic Missile V/s Cruise Missile
- Ballistic Missiles: Ballistic missiles are long-range weapons that are propelled into the air by rocket engines. They follow a parabolic trajectory, initially climbing to high altitudes and then descending toward their target under the force of gravity.
- Cruise missiles: Unlike ballistic missiles, remain in the Earth’s atmosphere throughout their flight. They are powered by jet engines or propellers, allowing them to sustain flight for extended periods. Cruise missiles fly at lower altitudes and follow a more controlled and level flight path.
Agni Class of Missiles
- The Agni missile is a family of medium to intercontinental range ballistic missiles.
- Agni missiles are long range, nuclear weapons capable, surface to surface ballistic missiles.
- Range of Agni Missiles:
- Agni I has a range of 700-800 kilometers.
- Agni II has a range of around 2000 kilometers.
- Agni III has a range of almost 2,500 kilometers.
- Agni IV has a range of about 3,500 kilometers and can be launched from a road mobile launcher.
- Agni-V: The Agni-V is the longest missile in the Agni series, with a range of nearly 5,000 kilometers.
- Agni-P (Prime) is a canisterized missile with a range of 1,000 to 2,000 kilometers. It will replace Agni-I missile.