QUIZ – 2020: Insights Current Affairs Quiz, 27 May 2020

Solution: d)

The issue of international sovereign bonds will have several long-term implications. It may facilitate the inclusion of India’s government bonds in the global debt indices. India’s representation in global debt market indices is small compared to other emerging markets. This may lead to higher foreign inflows into India.

Two, inclusion in global benchmarks would also improve the attractiveness of rupee-denominated sovereign bonds. Three, the rates at which the government borrows overseas will act as a yardstick for pricing of other corporate bonds, helping India Inc raise money overseas. While some commentators think that the government can borrow at very low costs overseas, this argument is weak, as it will have to hedge against forex risks.

But despite so many benefits, there are risks too. Dollar-denominated bonds are more sensitive to global interest rates. Global shocks, as seen in the 2013 taper tantrums, can lead to heightened selling pressure on Indian bonds.

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Solution: b)

The 15th Finance Commission has used the 2011 Census as the sole criteria for population but has reduced the weight for population to 15% from the earlier 27.5%. While retaining the 15% assigned to geographical area, it has enhanced the focus on forest and ecology from 7.5% to 10%.
It has also reduced the weight of income distance (how much lower or higher than the national average a state is) from 50% to 45% to provide higher devolution to the states with lower per capita income. Demographic performance and tax effort have been brought in as parameters to reward the states performing better on both these counts.

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Solution: c)

In 2020-21, the following grants will be provided to states: (i) revenue deficit grants, (ii) grants to local bodies, and (iii) disaster management grants.  The Commission has also proposed a framework for sector-specific and performance-based grants.

Revenue deficit grants: In 2020-21, 14 states are estimated to have an aggregate revenue deficit of Rs 74,340 crore post-devolution.  The Commission recommended revenue deficit grants for these states.

Grants to local bodies: The total grants to local bodies for 2020-21 has been fixed at Rs 90,000 crore, of which Rs 60,750 crore is recommended for rural local bodies (67.5%) and Rs 29,250 crore for urban local bodies (32.5%). The grants will be divided between states based on population and area in the ratio 90:10. The grants will be made available to all three tiers of Panchayat- village, block, and district.

Disaster risk management:  The Commission recommended setting up National and State Disaster Management Funds (NDMF and SDMF) for the promotion of local-level mitigation activities.  The Commission has recommended retaining the existing cost-sharing patterns between the centre and states to fund the SDMF (new) and the SDRF (existing).  The cost-sharing pattern between centre and states is (i) 75:25 for all states, and (ii) 90:10 for north-eastern and Himalayan states.

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Solution: c)

European Union (EU) has become the first multilateral bloc to declare climate emergency.

Similar climate emergency declarations have already been made in several EU member states, including Spain, France and the United Kingdom. Outside Europe Canada, Argentina and Bangladesh have declared a climate emergency.

Solution: c)

The Mizoram government had passed a resolution revoking the implementation of the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (FRA).

About Forest Rights Act (FRA):

• The act was passed in December 2006.
• It deals with the rights of forest-dwelling communities over land and other resources.
• The Act grants legal recognition to the rights of traditional forest dwelling communities, partially correcting the injustice caused by the forest laws.

Rights under the Act:

• Title rights –Ownership to land that is being farmed by tribals or forest dwellers subject to a maximum of 4 hectares; ownership is only for land that is actually being cultivated by the concerned family, meaning that no new lands are granted.
• Use rights –to minor forest produce (also including ownership), to grazing areas, to pastoralist routes, etc.
• Relief and development rights –to rehabilitation in case of illegal eviction or forced displacement; and to basic amenities, subject to restrictions for forest protection.
• Forest management rights –to protect forests and wildlife.

Eligibility to get rights under the Act is confined to those who “primarily reside in forests” and who depend on forests and forest land for a livelihood. Further, either the claimant must be a member of the Scheduled Tribes scheduled in that area or must have been residing in the forest for 75 years.