 Welcome to the Hindu News Analysis by Shankar Ayes Academy for the date 19th of May 2019. Displayed at the list of news articles taken up for today's analysis, along with the page numbers of Chennai, Bengaluru, Delhi, and Thiruvananthapuram editions. The handwritten notes in PDF format on the time stamping of all the news articles taken up for today's analysis is available in the description section below and also in the comment section for the benefit of the smartphone users. Let us now start our analysis. The first news article of the day is titled, What is India's Stand-On Data Storage? This article appears in FAQ section, the Frequently Asked Questions section, in page 14 of Chennai, Delhi and Thiruvananthapuram editions, and in page 16 of Bengaluru edition. The analysis of this news article will be helpful in your mains preparation in General Studies Paper 2, under government policies and interventions for development in various sectors and issues arising out of their design and implementation, and also in your General Studies Paper 3, under basics of cybersecurity. This news article deals with the concept of data localization and the regulations that are there at present in India. Also, some advantages and disadvantages of data localization are discussed throughout the article. So, in this context, let us see what is meant by data localization first, followed by the present regulations that India has at present. Next, we shall be discussing the need and challenges in implementing data localization in India. Now, what is meant by data localization? You can get a vague idea just by splitting this phrase, data and localization. Here, data refers to the personal data that is collected by the technology companies. For example, Facebook, Microsoft, Google, Amazon, etc. And the term localization means to store this personal data locally, that is within a country. So data localization means the collection, processing and storage of a person's data who is a country's resident within the territory of that particular country. Next, data localization loss. It means the regulations enacted or created by any particular country that wants to store the personal data within its territory. So, it dictates the procedures for data localization to the technology companies that store data outside that particular country. Here, you can take the example of India only. Now, the technology companies that we saw like Facebook, Microsoft, Google, Amazon, etc., all store the personal data of Indian citizens outside India. Hence, India is pushing for data localization. In this context, let us see the present status of regulations with respect to data localization in India now. Currently, the only mandatory rule on data localization in India is by the Reserve Bank of India, it is for the payment systems. Other than this, there are only reports or drafts of bills that are yet to be signed into law in India. The other materials that are available in the public domain on data localization are given below. First, is a white paper that was released by the government inviting the public comments on data localization. This was released just before the Justice Sri Krishna Committee report was released. The second material that is available is the recommendations of the Justice Sri Krishna Committee report on data protection. We will be touching some of the recommendations here and there in our discussion, which is to fall on off. The third material is the Draft Personal Data Protection Bill of 2018. This draft bill contains specific requirements on cross-border data transfers, which means transferring and storage of data cross-border that is outside India. This rule mentioned in the draft bill is seen as stricter than the recommendations of the Sri Krishna Committee on cross-border data transfers. If you see in Sri Krishna Committee report, it recommended for the data localization based on classifying the data as critical data and non-critical or other data. But if you see, this draft bill prefers for storing the entire data inside India only. The final material available in the public domain is the draft e-commerce policy. This policy document also has classes on cross-border data transfer. For example, Facebook India is a subsidiary of Facebook USA. So here, Facebook USA is the parent company. Now, this draft e-commerce policy suggests that the personal data of Indian citizens shared to Facebook USA cannot be transferred to a third party with which Facebook USA has some agreement. The draft policy suggests that even if the user's consent has been taken, the data cannot be shared by Facebook USA to the third party. Now, you can think why India is stressing too much on data localization through these draft proposals. In this context, you have to know the advantages or the need for data localization. The first advantage is that if the data is stored locally, we can protect our Indian data from foreign surveillance. The misuse of data by foreign powers can be eliminated. Also, the misuse of data for commercial interests can also be eliminated. We recently saw an example of Facebook USA sharing the data with its third party. It can be for the commercial interests of both the parties involved. So this can be prevented if the data is stored locally. Next, data localization is very much critical for law enforcement. This is one of the recommendations of Justice Sri Krishna committee. The report tells that access to data will be difficult for Indian law agencies if it is stored outside India. Now, in case of a breach or threat, justice cannot be delayed because of the lengthy legal processes of another nation that stores the data which is generated in India. So, data localization is very much critical for law enforcement. Also, if we store data within India, we will be self-reliant in managing our own data. Enough, let us see some of the challenges or disadvantages in data localization. The first challenge as said in Justice Sri Krishna committee report is that all data cannot be treated alike. There needs to be some differentiation between critical data and other non-critical data. Next challenge is that India is still not ready with necessary infrastructure for data localization. It would take at least 4 to 5 years roughly to have the necessary infrastructure in place. Next challenge would be what if an authoritarian government comes to power in India. Then the government will have access to the entire data that is stored locally and this data can be misused by that government for its own benefits. So, here the individual rights are affected. This is what happens in an authoritarian government to be exact. Such governments will actually restrict the individual rights and also their freedoms. Now, all the challenges and disadvantages that we are going to see will be in trade and business perspective. Data localization will be highly disadvantages to companies. It would lead to companies setting up new infrastructure in India. So, there can be increased costs on data service and also UPS and also generators and then the cooling costs and also increased costs on building and manpower as well. Here, note that personal refers to manpower. Now, if you see, these increased costs can be managed to some larger extent by the global tech giants like Facebook, Google, etc. But think about small companies and startups in India. These are the ones that are likely to be affected if data localization is made mandatory. Their profit margins are likely to become low for these companies. Next is, USA has criticized that India's proposed norms on data localization are most discriminatory and trade-distortive. Discrimination here in the sense, the norms would favor the Indian companies and also increased operating costs because of data localization would lead to trade imbalance between Indian and foreign tech companies. Next, strong data localization laws are likely to affect the transferring of data at present for trade purposes between India and its trading nations. And if data localization is made mandatory, it might lead to complications in exchanging the commercial data. So, when free trade agreements are signed, this data localization class could become an issue to address. Also, it would be difficult for the global companies to have two different compliance levels regarding the storage of data, one in the foreign country where they store their data and the next in India. So, these are some of the challenges or disadvantages in data localization as of now. Let us now see in brief about the data localization trends across different nations of the world. Firstly, China and Vietnam have made it compulsory to store the personal data within their territory because if you see in both these countries, the government controls the entire data and also the individual rights or freedoms are restricted there. So, we can tell that an authoritarian government is in place there. But if you see in the case of European Union, the individual rights are completely protected as per their data localization laws. Next, in the case of USA, there are no data protection laws at the federal level except for few data protection laws like on healthcare, payment systems, etc. Some other countries with data protection laws include Brazil, Japan, South Korea and New Zealand. Now, when a question on data localization comes asking you to suggest some measures, you can insist on the points mentioned here like at least a copy of the personal data can be stored in India and that the individual rights must be protected and also the data localization laws should be favorable for startups. You can also use the need or advantages of data localization that we just discussed in your suggestions as well. With this, we come to the end of the analysis of this news article. Now, have a look at the practice main question. We shall discuss at the end of the analysis session. Moving on to the second news article. The second news article of the day is titled, Hornbills Among Top Seed Disperses Most Threatened. This news article appears in Science and Technology column in page number 15 in Chennai, Delhi and Thiruvananthapuram edition and in page 17 in Bengaluru edition. The contents of this news article will be helpful in your problems preparation under current events of national importance and also under general issues on environmental ecology. This news article reports about the recent mapping study carried out by Nature Conservation Foundation. The study, which was conducted in Pakke Tiger Reserve, has found that hornbills are the top most seed disperses when compared to the other birds and also they are the most threatened. Now, additionally know that hornbill watch is an initiative by this Nature Conservation Foundation partnered along with Conservation India. Also, know that Pakke Tiger Reserve is located in the state of Arunachal Pradesh. In this context, we shall be seeing about hornbills from prelims perspective. Hornbills are birds and they got this name due to the hornbill projections, which you can see on the top of their beaks. Know that India is home to nine species of hornbills. They are found across India, especially in the huge population in southern India, eastern India and also north eastern India. Now, it is very hard for you to remember all these nine species. So, let us see some unique hornbill species. First, we shall see about great hornbill. Great hornbill is the most commonly found hornbill species in India. This great hornbill bird is the state bird of two states, which are Arunachal Pradesh and Kerala. Also know that they are declared as vulnerable under IUCN Red List. Now, know that hornbill festival is celebrated in the state of Nagaland. It is celebrated in the month of December every year and it is called the festival of festivals in the state of Nagaland. Next, we shall see two hornbill species that are endemic to India. Here, the word endemic means the species belong to that particular area only and cannot be seen anywhere. So, the first endemic species here is the Narcundam hornbill. It is endemic to Narcundam island. This particular Narcundam island is a part of Andaman and Nicobar islands group. Narcundam hornbill is classified as endangered under IUCN Red List. The second endemic species is the Malabar Grey hornbill, which is endemic to western guards in India. They are classified as least concerned under IUCN Red List because the population is more in the western guards of India. Next, you need to know that hornbills are frugivores. Frugivores means fruit eating. Almost 75 to 100 percentage of hornbills diets are fruits. The hornbills swallow the entire fruit without damaging the seeds. If you see the other birds, they damage the seeds. These hornbills act as seed dispersers. It means they carry the fruits containing the seeds to the faraway distance and they throw them there after eating the particular fruit. In this study, which is mentioned in the news article, they have found that it disperses seeds as far as 13 kilometer. There is an advantage to the plants in that particular ecosystem because of this seed dispersing act of the hornbills. Since the hornbills disperse the seeds to faraway places, there is less predation pressure for the plants. A particular plant will grow in a new environment in a very healthy manner. When hornbills help many such plants in an ecosystem, the entire ecosystem becomes healthy instead of getting concentrated at one single place. So, a healthy hornbill population indicates that there is a healthy ecosystem present in that particular place. Due to this, hornbills are rightly called as farmers of the forests. Now, like every bird species, the hornbill two faces numerous threats to its existence. They are mentioned here. The first threat is the hunting and poaching of the hornbill. They were hunted for their beaks, feathers and meat by the local tribes since they were of traditional and medicinal value to these tribes. This trend was especially seen in northeastern India where Nishi tribes used to add on the beaks of hornbills in their costume. Also, Vanjo tribes used the tail feathers of hornbills to add on their costume. And the Mishmi tribes used to hunt hornbills for the meat. But now all these tribal groups have started to protect these hornbill species. In this context, know that the government of Arunachal Pradesh recently declared the Pakepaga hornbill festival as a state festival of Arunachal Pradesh in January 2019. It is Arunachal's only conservation festival. The next threat to hornbill population is the fragmentation of forests, which leads to habitat loss of hornbills. Next threat can be a possible catastrophe or a disease that can attack the endemic hornbills, especially the narcondom hornbill. If such a thing happens, it would make the entire species extend because narcondom hornbill is endemic to that particular narcondom island wangli. The same scenario can also be applied to the Gir lions as well, as it is a only Asiatic lion species that is endemic to the Gir forests of Gujarat. With this, we come to the end of the analysis of this news article. Now, have a look at the practice prelims question. We shall discuss at the end of the analysis session. Let us move on to our next news article. The third news article of the day is titled, RBI now uses divergence to compel banks to improve their loan loss ratios. This news article talks about the use of divergence in recognizing the bad loans. This article appears on page number 13 in Chennai, Delhi and Thiruvananthapuram editions and in page 15 in Bengaluru edition. The analysis of this discussion will be helpful in your prelims preparation under current events of national importance and economic and social development and in your main preparation in general studies paper 3 under Indian economy. Divergence takes place when the Reserve Bank of India finds that a lender has under reported the bad loans in a given particular year. So, the RBI which is a bank regulator asks the lender to make disclosures if the additional provisioning for NPAs assessed by RBI exceeds 10 percentage of the reported profit of the bank before the bank makes provisions and contingencies for the reference period under consideration. If you see in the news article, it is mentioned that divergence takes place when under reporting is more than 10 percent of bad loans or provisioning. The news article states that three public sector banks such as Union Bank of India, Indian Bank and Central Bank of India have reported divergence. See these banks have delayed the process of recognizing the bad loans and classifying them as non-performing assets. RBI has considered this delayed recognition and classification of bad loans as amounting to under reporting. For non-performing assets, the banks has to set aside certain amount of money to cover the losses. This is called as provisioning. Now, there is high provisioning required as the banks now have to set aside money to cover the losses as a result of making disclosure about the under reporting. An asset becomes a non-performing asset when it ceases to generate income for the bank. When an amount under a credit facility has not been paid within 90 days past the due date, then the asset is called as non-performing asset. There are three categories of non-performing assets namely, substandard asset, doubtful asset and loss asset. Now, when a loan remains as a non-performing asset for a period less than or equal to 12 months, then this particular asset is called as substandard asset. When the asset remains an NPA for a period of more than 12 months and when the collection of the principal or the interest becomes highly questionable and improbable, then the asset is called as doubtful asset. And when a loan asset is identified as a loss by bank or by the auditors or by RBI inspection and considered as uncollectable, then the asset or the loan given by the bank becomes a loss asset. Now, there are variations in the provisioning for the types of non-performing asset. For example, according to this news article, for substandard assets the provisioning has to be 15 to 20 percentage and the provisioning for doubtful assets has to be 40 percentage. So, when a bank declares NPAs that to in doubtful or loss assets, the provisioning increases. The article also talks about the provisioning coverage ratio. Know that provisioning coverage ratio means the ratio of provisioning to the gross non-performing assets. This ratio indicates the amount of funds that the bank has to set aside in order to cover the loan losses. It was earlier mandated at 0.7 or 70 percentage by the RBE. And this news article notes that the mandate was withdrawn in the year 2011. Now, RBA is using the divergence tool to compel the banks to improve their provisioning coverage ratio. Now, have a look at the practice problems question we shall discuss at the end of the analysis session. Moving on to the next news article. The fourth news article taken up for today's discussion is titled as 150 million US dollar World Bank loan likely for Rebuild Kerala. This news article has appeared on page number 8 in Chennai and Delhi editions and in page number 10 in Bengaluru edition and in page number 6 in Thiruvananthapuram edition. The discussion based on this news article will be relevant in your problems preparation under current events of national and international importance and next under economic and social development, social sector initiatives in particular. The discussion is also relevant in your main preparation in general studies paper 2 under important international institutions, agencies and fora their structure and mandate and also in your general studies paper 3 under infrastructure. This article is about the World Bank's upcoming talks with the Kerala government and union department of economic affairs. This talk is to secure a development policy loan of worth 150 million US dollars from the World Bank and the loan will be used for the Rebuild Kerala initiative. During the negotiations the term and repayment conditions will also be finalized and after the negotiations the loan has to be provided and the bank is aiming to provide the first tranche by the end of June and also the state of Kerala is trying for the second tranche of 200 million US dollars DPL to be obtained in the month of October. Now in this context to have a clear understanding of the news article let us know some important facts about the Rebuild Kerala initiative, the World Bank and also about the development policy loan. First let us see about the Rebuild Kerala initiative for which the loan will be used. We all know that the heavy monsoon in the year 2018 brought widespread flooding to several districts of Kerala and triggered thousands of small to big landslides. The extreme and prolonged rainfall spell in the month of August led to the worst flooding in Kerala which is almost the worst flooding in nearly a century and this flooding impacted almost 5.4 million people which is one sixth of the total states population. So the government of Kerala has recognized that a traditional approach to recovery and reconstruction would not lead to comprehensive preparedness for future disasters and these floods should be taken as a challenge and an opportunity to rebuild the state in order to ensure better standards of living to all the sections of the society. So the Kerala government has established this Rebuild Kerala initiative. It is the state's coordination modality for reconstruction efforts and is formulating a new vision for building a green and resilient Kerala. This initiative will focus on risk informed sustainable development which will make Kerala always disaster prepared. This Rebuild Kerala initiative is preparing Rebuild Kerala Development Program which will have the objective of supporting Kerala's resilient recovery from the August 2018 floods and this program will also enhance Kerala's resilience against natural disasters and the climate change impacts through policy and investment actions in all the priority sectors and the financing will be through from the internal and external sources. So this is where the World Bank's roles come in as it will provide external financing to the initiative. So let us now see about the World Bank. First know that World Bank is part of the World Bank Group. The World Bank Group is the largest multilateral development bank and it is the only multilateral development bank that is not bound to any specific or a particular region. The mission of this World Bank is to help people so that they help themselves and their environment. This is done by providing the resources and also by sharing knowledge, building capacity and forging partnerships in both the public and the private sectors. Currently this World Bank Group has a total membership of 189 member countries. The World Bank Group provides an extensive array of services and advice and it also facilitates private sector finance and investment in the developing countries. This particular World Bank Group is made up of five institutions that are mentioned here. Firstly the International Bank for Reconstruction and Development. Next is International Development Association. Next International Finance Corporation and next Multilateral Investment Guarantee Agency and finally the International Center for Settlement of Investment Disputes. Note that here IBRD and IDA are the World Bank Group's instruments for public lending and together these two are referred to as the World Bank. So always keep in mind that if we say World Bank it only means IBRD plus IDA and to know here the IBRD provides low interest loans to the middle income poor countries which are credit worthy and also IDA is the world's largest source of interest free loans and grants to the poorest countries and many of these poorest countries are present in the African continent. IDA's funds are replenished every three years by the donor countries. The World Bank plays many different and complementary roles such as it acts as a banker, it also acts as a donor, as an advisor, a knowledge resource and also as a partner. Member countries come to the World Bank for financing through loans, credits or grants, economic research, policy advice and technical assistance in designing and carrying out the development projects. Now the World Bank's main business is its lending. These loans are made as a part of comprehensive assistance program which are set out in the country assistance strategy of the World Bank. This strategy tailors the World Bank support that is whether the support is needed in the form of lending or of services and this is based on each borrower's developments needs. The support from the IBRD and IDA is provided depending on the eligibility of the member country. So during loan negotiations the bank and the borrower agree on development objectives, outputs, performance indicators and also with an implementation plan. So once the bank approves the loan and it goes into the effect and the borrower implements the project or program according to the terms agreed on with the World Bank. The bank supervises the implementation of each loan and evaluates its results. Next let us see the lending instruments used by the World Bank. The World Bank offers two basic types of lending instruments to its client governments. They are the investment loans and next is the development policy loans. If you see the investment loans they are issued for projects that have a long term horizon that is the projects which are usually about 5 to 10 years and coming to the development policy loans they have a very short term focus which is likely about from 1 to 3 years. These loans are provided immediately by the World Bank as an external financing measure. This particular loans will support policy and institutional reforms of the central and the state governments in Indian scenario. So Kerala is aiming to receive the financing under this development policy loans. With this we come to the end of the analysis. The displayed practice prelims question will be discussed in the last session. Let us move on to the next news article. The final news article is titled a matter of life and limb. This news article appears in the magazine supplementary in page number 9 in all the editions. Know that magazine is common for all the editions. The content of this article will be relevant in your prelims preparation under general science and also in your main preparation in general studies paper 3 under conservation. Now we have displayed you two images just have a look at them. Though the images may look similar one is actually a snake and the other is a limbless lizard. On your right is a snake and on your left is a limbless lizard. We will learn how to differentiate in this discussion. This article is about limbless lizard belonging to the family Anguidae. The author has found this lizard in his adventurous and tourist trip to the Lightloom Canyon in East Kasi Ilts which is located in the state of Meghalaya. The scientific name of this Asian limbless lizard is Dupassia Gracilis. These lizards are limbless and therefore they look like a snake. Note that a snake does not have an eyelid whereas the limbless lizard has an eyelid. Just have a clear look at this image in order to find the difference. Now these limbless lizards have the ability to draw their tails in self-defense. That is when they are threatened they drop their tails. The dropped tails make twisting movements that attracts the vision of the attacking human and this distracts the attacker from the rest of the body. Meanwhile the lizard escapes. This characteristic of self-amputating ability is called as autotamy and the author here says that Gekko is the champion of this self-amputating ability when it comes under such threats. Some of the species of the same family include four-limbed alligator lizards which are found in the Americas and then the feebly hind-limbed Shelto Pusik which can be seen in Europe and Central Asia and also the completely limbless glass lizards which are seen in India and Southeast Asia. The author highlights that here the different species of the same family has variations in their limb structure. One has four limbs while the other has completely no limbs. This absence of limbs is attributed to the evolutionary labile trait that has been acquired not from one common ancestor but from multiple ancestors over different times across various lizard families. Here note that labile trait means easily changeable behavior. Then the author highlights the need for and the importance of taxonomy and systematic studies for conservation. Taxonomy and systematic studies deal with classification of microorganisms and their nomenclature. This is important for lizards because there is difficulty and near impossibility in identifying the correct species by having a look at them. Also there has been at time confusions between lizards because of variations in their body form. Some may think they are variations of different body form of the same species that is intraspecific variation of body form and some may think they are totally different species. Therefore taxonomy and systematic study are equally important. Also so far the IUCN has not yet assessed the conservation status of this particular limbless lizard. So here the author suggests an assessment on the status so as to take necessary efforts to protect this particular habitat from the human impact. Also these lizards are not among the lizards that are listed in the Schedule 1 protection of Wildlife Protection Act of 1972. Now have a look at the practice prelims question. With this we come to the end of the analysis session. Let us now move on to the practice question discussion session. The first question is consider the following statements. Statement one is in India, hornbill birds are found in the state of Nagaland only and statement two is great hornbill is a state bird of Arunachal Pradesh and Kerala. Here the first statement is wrong. As we have discussed in our article hornbills are found across India. One can easily get confused since the hornbill festival is celebrated in Nagaland state. Also double check yourself if only is given in the statement. Now the second statement is correct. The great hornbill is the state bird of two states namely Arunachal Pradesh and Kerala. Here the question is asked for the correct statements. The correct answer is option B to only since the first statement is wrong. Moving on to the second question. Consider the following statements. The provisioning coverage ratio is the ratio of provisioning to gross non-performing assets. And statement two is it indicates the extent of funds a bank has kept aside to cover loan losses. Which of the above statements is are correct? Here both the statements are correct. For non-performing assets the banks has to set aside certain amount of money to cover the losses. This is the meaning of provisioning which is in the numerator in the first statement. Nothing but the ratio of provisioning to gross non-performing assets. So here the question is asked for the correct answer. The correct answer is option C both one and two. Moving on to the third question. Which among the following institutions constitute the world bank? First is international bank for reconstruction and development in short IBRD. Second is international finance corporation in short IFC. Third is international development association in short IDA. And fourth is multilateral investment guarantee agency in short MIGA. Now we saw in our discussion that all these four institutions plus the International Center for Settlement of Investment Disputes in short ICSID form the World Bank Group. But remember that World Bank is a part of World Bank Group. And both are different. So in a hurry don't put the option D 1, 2, 3 and 4 as the answer. Now if you would have paid attention to the analysis part we already discussed this difference. And we know that only two among these five institutions of World Bank Group form the World Bank. They are international bank for reconstruction and development and international development association. So here the question is asked to choose the correct items. The correct answer here is 1 and 3. So the correct option to this question is option B 1 and 3. Moving on to the fourth question. Consider the following statements. Statement 1. Autotemy is a characteristic feature of certain animals to shed some part of their body when they are threatened. And statement 2 is the Asian glass lizard exhibits this property of self amputating its tails when it feels it is in danger. Here the question is asked for the correct statements. So here both the statements are correct. Nature has blessed certain animals and reptiles to save themselves from dangers by exhibiting this property. Therefore the correct answer here is option C both 1 and 2. Also the author in today's article has said that Gekko is the champion in exhibiting this property. Recently we have analyzed a news article on May 7th in our Hindu news analysis about the grizzled giant squirrel wherein we have also discussed about Indian golden Gekko. The link for the analysis of for this golden Gekko has been given in the description. Moving on to the practice main question. The question is what do you mean by the term data localization? India's proposed norms on data localization is perceived globally as trade distortive, critically analyzed. So here the first part of the question asks for the definition. So mention the definition that we have discussed. The second part of the question asked to critically analyze. You can take either stand here. You can either discuss the need for data localization and how it would help in protecting the individual rights or the other stand which is how data localization will affect the small businesses and startups and lead to trade imbalance or you can analyze both the positives and negatives of data localization in a neutral way. With this we come to the end of today's analysis of all the news articles and also the analysis of the practice, prelims and main questions. Please do like, comment and share the video and please subscribe to Shankar IA's Academy YouTube channel for latest videos and updates. Stay focused and motivated friends. Thank you.