Oct 25th 2024 Current Affairs

Index:

1. Q2 Revenue Growth at 16-Quarter Low

Context: A Crisil analysis indicates a significant slowdown in revenue growth for Indian companies during the July-September quarter of 2024 (Q2), reaching a 16-quarter low.

Data is based on an analysis of 435 firms, accounting for half of India’s listed market capitalization.

Key Points:

Overall Revenue Growth:
- Growth dropped to 5-7%, the weakest in 4 years.
- Significant decline from 3% in the previous quarter (April-June 2024, Q1).

Sectoral Performance:
- Construction Sector:
  - Poor performance due to sluggish government spending post-elections.
  - Impact of above-normal monsoon, leading to slower construction activity.
- Commodities Sector: Coal and other industrial commodities faced a 6-7% revenue decline.
- Investment-Linked Sectors:
  - Power segment grew just by 1%.
  - Construction-linked sectors like steel saw a 2-3% revenue dip due to lower demand and price pressure from cheap Chinese imports.
- Petrochemicals: Reported flat growth in Q2.
- Agriculture: Fertilizer sector witnessed a 20-22% revenue drop.

Factors Contributing to Slowdown:
- High base effects from Q2 of the previous year.
- Weak global prices across many sectors.
- Sluggish government spending and a slow pickup in projects post-elections.
- Monsoon-related disruptions impacted the construction and related sectors.

Export-Related and IT Sectors:
- Export-related firms saw a modest 5% revenue uptick.

IT sector managed modest growth of 3-4%, highlighting resilience compared to other sectors.

2. How Panchayat-Level Weather Forecasts Will Help

Context: Panchayat-Level Weather Forecasting is a joint initiative launched by the Panchayati Raj Ministry, India Meteorological Department (IMD), and Ministry of Earth Sciences to provide five-day weather forecasts updated every hour at the gram panchayat level.

The program was officially launched by Rajiv Ranjan Singh (Panchayati Raj Minister) and Jitendra Singh (MoS, Ministry of Science & Technology and Ministry of Earth Sciences) on October 24.

Key Points:

Objective:
- Empowering rural communities by enhancing disaster preparedness and promoting sustainable agricultural practices.
- Focus on localized weather forecasts to increase climate resilience in rural areas.
- Helps tackle environmental challenges effectively, especially with climate change leading to unpredictable weather patterns.

Forecast Delivery:
- Forecasts are available on platforms such as e-GramSwaraj, Gram Manchitra portals, and the Meri Panchayat app.
- e-GramSwaraj is already operational, providing data on temperature, wind speed, cloud cover, rainfall, and humidity.
- Forecasts include five-day updates on minimum and maximum temperatures, rainfall, wind direction and speed, and overall weather conditions.

Benefits to Rural Communities:
- Localized and detailed weather information can assist farmers in planning activities like sowing, irrigation, harvesting, and even disaster preparedness.
- Helps mitigate risks associated with unpredictable weather, which is increasingly a concern due to climate change.
- Empowers local communities to make informed decisions for agriculture and other critical activities.
- Provides crucial support for rural livelihoods and enhances resilience to natural disasters like floods or droughts.

Why Local Forecasts Matter:
- Localized forecasts offer more precision in decision-making for rural areas, where broad-scale weather predictions may not suffice.
- Panchayats will receive daily weather updates on key parameters to ensure accurate planning for agricultural and rural activities.
- IMD uses sophisticated models to provide boundary-specific localized data down to the panchayat level, crucial for India’s 55 lakh village panchayats.

Challenges of Weather Forecasting:
- While advanced technologies exist, the science of weather forecasting has inherent uncertainties, especially in cases like the Indian monsoon and cyclonic systems.

Accurate predictions require precise spatial and time-window forecasting, making localized systems important for managing rural agricultural needs.

3. Justice Sanjiv Khanna Appointed as the 51st Chief Justice of India (CJI)

CONTEXT: Justice Sanjiv Khanna appointed as the 51st Chief Justice of India by President Droupadi Murmu.

Oath: Expected to take oath on November 11, 2024.
Predecessor: Will succeed CJI D. Y. Chandrachud, who retires on November 10, 2024.
Tenure: His tenure will be six months, as he is set to retire on March 13, 2025.

Background:

Education: Graduated from Delhi University’s Campus Law Centre.
Career:
- Enrolled as an advocate in 1983.
- Primarily practiced in the Delhi High Court.
- June 2005: Elevated as a judge of the Delhi High Court.
- Served as Senior Standing Counsel for the Income Tax Department.
- Also held the position of standing counsel in civil matters.

Constitutional Provision:

The appointment is made under Article 124(2) of the Constitution of India.

4. Overflowing Godowns, Unhappy Millers: Paddy Procurement Crisis in Punjab

Context: Punjab’s paddy procurement process has faced delays and mismanagement due to overflowing storage facilities and miller resistance, despite favorable weather conditions for harvesting.

Key Points:

Procurement Status as of October 23, 2024:
- 81 lakh tonnes of paddy procured so far in Punjab.
- Around 90% of procured paddy lies unsold in mandis due to insufficient storage capacity.
- Rice millers resist government procurement of paddy as godowns are full, leading to storage crises.
- Delayed processing impacts the paddy milling schedule

Challenges in Storage:
- Government godowns have reached near capacity, storing both current stock and carryover stock from the previous season under schemes like the National Food Security Act (NFSA).
- Private rice millers hesitate to take on government paddy due to space shortages, forcing farmers to wait longer for payment.

Hybrid Paddy Issues:
- Hybrid varieties of paddy have gained popularity but have lower yield and different processing requirements than traditional varieties.
- Millers argue that these hybrids do not meet FCI standards, resulting in mill-milling alignment problems and further slowing down the process.

Labour and OTR (Out-Turn Ratio) Problems:
- Mandi laborers seek higher wages similar to their counterparts in Haryana, causing additional delays.
- Millers are struggling with OTR percentages, facing a lower grain recovery rate (paddy-to-rice yield) from hybrid paddy, which further complicates their ability to meet FCI requirements.
- Current OTR is 67% for parboiled rice but millers suggest it be reduced to 62% for hybrids.

Impact on Farmers:
- Only 22% of the paddy crop has been harvested as of now, causing concern among farmers.
- Farmers deliberately slow down harvesting to avoid the risks of delayed payment due to the crisis.
- Delays affect farmer incomes and could potentially lead to protest actions if issues are not resolved swiftly.

Environmental and Agricultural Consequences:
- Delay in procurement could lead to a shorter window for wheat sowing, which can force farmers to burn stubble, contributing to air pollution in northern India.
- Prolonged crisis risks sparking unrest among farmers.

Possible Solutions:
- The government could increase temporary storage solutions, and speed up the pace of paddy procurement.
- Adjust OTR norms for hybrid varieties to ensure a smoother process.
- Better coordination between government agencies and millers will be crucial to solving storage and procurement issues.
- Address labour wage disputes promptly to avoid further protests and delays.

5. Landfall of a Cyclone: Cyclone Dana

CONTEXT: Cyclone Dana is expected to make landfall between Bhitarakanika National Park and Dhamra port in Odisha, bringing wind speeds up to 120 km/h.

Heavy rains hit Odisha and West Bengal, with over 1 million people evacuated from the affected areas.

What is Landfall?

Landfall: The event when the centre or eye of a tropical cyclone moves over the coastline from the ocean to land.
Cyclones are rotating storm systems developing over warm ocean waters between the Tropics of Cancer and Capricorn.
Cyclones have a central eye (an area of calm winds) surrounded by a storm wall where winds are strongest.

Characteristics of Landfall:

Not a Direct Hit: Landfall does not necessarily mean the eyewall (where the most severe winds occur) comes ashore. The storm can cause severe damage even before the eye reaches land.
According to the US NOAA, strongest winds are not always located at the center, meaning destructive impacts can be felt before landfall.

Extent of Damage:

Cyclone Dana may cause damage such as:
- Destruction of kutcha houses.
- Disruption of power and communication.
- Minor disruptions in rail and road traffic.
- Potential flooding and threats from flying debris.
Damage results from heavy rainfall, strong winds, and storm surges.

Duration of Landfall:

Landfall usually lasts a few hours, depending on:
- Wind speed and size of the storm.
- Cyclone Dana is expected to bring winds of 125 km/h for about 5-6 hours.

Cyclone Weakening: Once on land, cyclones lose intensity as the moisture supply is cut off and friction from land surfaces increases.

6. India-China Agreement on Patrolling Along the LAC (2024)

Background:

LAC (Line of Actual Control): The boundary between India and China, not clearly demarcated, leading to frequent disputes.
2020 Border Standoff: Escalated tensions in areas like Eastern Ladakh, Galwan Valley, Pangong Tso, and Gogra-Hot Springs. Both sides had significant troop deployments.
Diplomatic Efforts: Continuous negotiations since 2020 through diplomatic and military channels to resolve border issues.

Recent Developments (2024):

April 2024 Statement by PM Modi: Emphasized the importance of India-China relations and the need to resolve the prolonged border situation.
Chinese Response: Chinese Foreign Ministry responded positively, signaling progress in resolving the boundary issues.
May 2024: Indian External Affairs Minister S. Jaishankar highlighted that the core unresolved issues revolved around “patrolling rights” along the LAC.

Key Elements of the Agreement:

Patrolling Pact (2024):
- Announced by Foreign Secretary Vikram Misri.
- Patrolling Rights Restored: Both sides can resume patrolling and grazing in certain areas, such as Demchok and Depsang Plains, to the status quo as of pre-May 2020.
- Patrolling System: Indian troops patrol up to the Indian perception of the LAC, leaving behind markers of their presence.

Article 4 of the 2005 Border Pact:
- Codifies conduct during face-offs:
  - Exercise self-restraint.
  - Avoid escalation.
  - No use of force.
  - No provocative actions.
  - No marking or placing signs at the spot.

Three-Step Process for De-escalation:
- Disengagement: Immediate step to pull back troops from friction points.
- De-escalation: Reduction of military presence.
- De-induction: Complete withdrawal of troops from the disputed areas.
- Close Monitoring: Emphasis on preventing clashes like those that occurred in Galwan (2020).

Contours of the Agreement:

Areas Covered:
- Eastern Ladakh: Demchok, Depsang Plains, and legacy issues predating the 2020 incursions.
- Previous Disengagements: In Galwan, Pangong Tso, and Gogra-Hot Springs, disengagement had already taken place but no renegotiations were made on reopening them.

Diplomatic Meetings:

BRICS Summit 2024 (Kazan, Russia): PM Modi and President Xi Jinping endorsed the agreement.
Divergent Statements:
- India emphasized complete disengagement.
- China focused on overall progress but avoided specific mention of disengagement.

Cautionary Approach:

Trust-Building: India is cautious about trusting China’s actions, emphasizing the need to “trust but verify.”
Next Steps:
- India’s Special Representatives on the boundary question will meet to explore a mutually acceptable solution.
- China focused on broader talks, with foreign ministers and officials to improve bilateral relations.

Strategic circles in India remain cautious, expecting the entire process to take a couple of years.