About World Environment Day:

• It is celebrated annually on June 5 to promote more sustainable practices while advocating for the protection of our planet. 
• Led by the United Nations Environment Programme (UNEP), it is the largest global platform for public outreach to raise awareness and take action on urgent environmental issues – the planet’s most-pressing environmental problems.
• Theme of World Environment Day 2024: Land restoration, desertification, and drought resilience.
• History:
  • The United Nations General Assembly declared June 5 as World Environment Day during the Stockholm Conferenceon the Human Environment, held in Stockholm, Sweden, in 1972 (June 5-16).
  • It was the first world conference to make environmental protection a major issue.
  • The UNEP was established in the same year.
  • World Environment Day was celebrated for the first time in 1973 under the theme 'Only One Earth'.
  • Since then, it has grown into a global platform involving over 150 countries.

Key Facts about United Nations Environment Programme (UNEP):

• It is the leading environmental authority in the United Nations system. 
• UNEP uses its expertise to strengthen environmental standards and practices while helping implement environmental obligations at the country, regional, and global levels.
• UNEP is driving transformational change by drilling down on the root causes of the triple planetary crisis of climate change, nature and biodiversity loss, and pollution.
• UNEP’s work is focused on helping countries transition to low-carbon and resource-efficient economies, strengthening environmental governance and law, safeguarding ecosystems, and providing evidence-based data to inform policy decisions.
• Headquarters: Nairobi, Kenya.
• Reports published by UNEP: Emission Gap Report, Global Environment Outlook, Frontiers, Invest into Healthy Planet.
• It provides secretariat functions for numerous multilateral environmental agreements (MEAs) and other entities as follows:
  • Convention on Biological Diversity (CBD)
  • Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)
  • Minamata Convention on Mercury
  • Basel, Rotterdam, and Stockholm Conventions
  • Vienna Convention for the Protection of Ozone Layer and the Montreal Protocol
  • Convention on Migratory Species

Q1: What is the Minamata Convention?

The Minamata Convention on Mercury is a multilateral environmental agreement that addresses specific human activities which are contributing to widespread mercury pollution. Implementation of this agreement will help reduce global mercury pollution over the coming decades.

Source: World Environment Day turns global gaze towards land restoration

About Pump and Dump Scheme:

• In the stock market, a pump and dump scheme is a type of manipulation activity that involves artificially inflating the price of a stock through false and misleading information, only to sell the stock at the inflated price and leave investors with significant losses.
• It is particularly prevalent in the micro-cap and small-cap sectors, where companies often have limited public information and trading volumes are lower.
• How does pump and dump work? 

This process involves several steps:

• First, a significant amount of stock in a relatively small or thinly traded company is acquired. These stocks are often referred to as ‘penny stocks’ because they trade at low prices and are more susceptible to price manipulation due to low trading volumes.
• Then the stock is aggressively promoted to create a buzz and attract investors. This promotion can take various forms, including sending out mass emails or newsletters with exaggerated claims about the company’s prospects, as well as misleading social media posts. Promoters aim to create buzz and drive interest in the stock.
• As the promotion gains traction, more investors buy into the stock, driving up its price due to increased demand. Sometimes, fraudsters may also engage in coordinated buying to further boost the price. During this phase, the stock often experiences rapid and significant price increases, creating the illusion of a hot, high-potential investment.
• Once the stock price has been pumped up sufficiently, the sell-off begins at the inflated prices. This selling pressure causes the stock price to plummet, often leaving unsuspecting investorswith significant losses as the stock returns to its actual value or even lower.
• Impact:
  • Those who bought into the hype and purchased the stock at inflated prices typically face substantial losses when the stock price crashes.
  • These schemes undermine confidence in the financial markets, making legitimate investors wary of potential fraud.

Under the SEBI guidelines, pump and dump schemes are completely banned.

Q1: What is the Securities and Exchange Board of India (SEBI)?

The SEBI is a statutory regulatory body established by the Government of India in 1992. It was given statutory powers through the SEBI Act, 1992. It aims to regulate the securities market in India and protect the interests of investors in securities.

Source: Explained: What is pump and dump scheme in stock market and how to be safe

About Sticky Inflation:

• Sticky inflation refers to a phenomenon where prices do not adjust quickly to changes in supply and demand, leading to persistent inflation.

Features of sticky inflation:

• Prices for goods or services that don't appear to be coming down anytime soon are considered sticky.
• Causes: Rising wages and prices for consumer goods and services are typically the main factors behind inflation stickiness.
  • Prices for medical services, education, and housing are some of the most important factors that can contribute to sticky inflation.
• It erodes the purchasing power of consumers and puts pressure on housing affordability.
• Sticky inflation presents challenges for central banks in controlling inflation without causing a recession.
• To address sticky inflation, central banks usually raise interest rates.
  • However, raising rates too fast can cause the economy to fall into a recession, while not raising them enough will allow prices to continue increasing.

Q1. What is a repo rate?

A repo rate is the interest rate at which a central bank, such as the Reserve Bank of India (RBI), lends money to commercial banks against government securities. It is used to regulate the economy by controlling inflation and money supply. The current repo rate in India is 6.50% as of June 07, 2024.

Source: Sticky inflation delays rate cut

About Mongla Port

• The Port of Mongla is located in the Bagerhat District of Bangladesh. It lies 62 km north of the Bay of Bengal coastline.
• It is situated at the confluence of the Pasur River and the Mongla River.
• The Port is surrounded and protected by the Sundarban mangrove forest.
• Mongla is the second largest seaport in Bangladesh after Chittagong.

Significance for India:

• Provides strategic access to India's northeastern states (e.g., Assam, Tripura, Meghalaya).
• Reduces distance and transportation costs for goods to and from these regions.
• India Ports Global Limited (IPGL) has expressed interest in operating Mongla Port, which would be its third international port operation after Chabahar in Iran and Sittwe in Myanmar.
• Expansion project: India and Bangladesh signed a MoU on the use of Chattogram and Mongla ports in 2015.
  • The MoU envisages the transit of goods from Mongla port to the northeastern states of India through waterways, roads and railways.

Q1. What are mangroves?

Mangroves are tropical trees or shrubs that grow in coastal areas with salty soil and have adapted to survive in these conditions. They have prop roots and can grow in dense thickets, providing a unique ecosystem for many marine species. Mangroves are important for coastal protection, water quality, and biodiversity, and are found worldwide in the tropics and subtropics.

Source: India eyes Bangladesh's Mongla port

About NaturAfrica initiative:

• The NaturAfrica initiative is a European Union (EU) program aimed at supporting biodiversity conservation in Africa through a people-centred approach.
• It identifies key landscapes for conservation and development, focusing on creating jobs, improving security, and sustainable livelihoods while preserving ecosystems and wildlife.
• The initiative is structured around two pillars: short-term actions in key landscapes and medium-term support to address the root causes of biodiversity loss and environmental degradation by integrating these concerns into other sectors.

About European Commission:

• The European Commission is the executive body of the European Union (EU), responsible for proposing new laws and policies, monitoring their implementation, managing the EU budget, and ensuring the correct application of EU policies and laws across member states.
• It is composed of 27 members, known as Commissioners, each representing a different member state.

The Commission is led by the President, who is elected by the European Parliament and proposed by the European Council.

Q1. What is the European Union?

The European Union (EU) is a political and economic union of 27 countries primarily located in Europe. It promotes democratic values and is a powerful trade bloc. The EU was formed to strengthen economic and political cooperation among its member states, which have a combined GDP of over $16.6 trillion and a population of over 448 million.

Source: Fortress Conservation: Tanzania now ineligible for European Union conservation grant over Maasai evictions

About Capital Account Convertibility:

• Balance of Payments Account: It is a statement of all transactions between a country and the outside world. It consists of two accounts:
  • Current Account: Deals with the import and export of goods and services.
  • Capital Account: Involves cross-border movement of capital via investments and loans.
• Current Account Convertibility: Freedom to convert rupees to other currencies for payments without restrictions.
• Capital Account Convertibility:
  • Freedom to conduct investment transactions without constraints.
  • No limits on converting rupees to foreign currency for asset acquisition.
  • No limits on NRIs bringing in foreign currency to acquire assets in India.
• Why is it important? 

Caution in Developing Countries: Inflows and outflows of capital are volatile, can cause excessive currency appreciation/depreciation, and impact monetary and financial stability.

• India's Progress:
  • Partial capital account convertibility achieved.
  • India's cautious approach in opening its capital account was praised after the 1997 East Asian currency crisis revealed issues with high current account imbalances and volatile short-term capital flows.
  • The 2006 SS Tarapore committee report highlighted that even countries with strong fiscal positions could face currency crises and rapid exchange rate deterioration.

Q1. What is rupee convertibility?

Rupee convertibility refers to the ability to freely exchange the Indian rupee for other foreign currencies or assets without significant restrictions or controls imposed by the Reserve Bank of India (RBI) or the government. It allows for the conversion of rupees into other currencies at market rates, enhancing international trade and investment.

Source: RBI’s agenda: capital account liberalisation, globalisation of the rupee and digital payment system

About Zombie Company:

• A zombie company is a corporate entity with very limited cash flows, only sufficient to pay the interest on the debt borrowed but not the principal amount of the loan.
• The revenue generated by the business operations only covers the fixed routine and operating costs (wages, rent, interest payments on debt, for example).
• These companies, often referred to as the "living dead" or "zombie stocks," have no excess capital to invest in growth, innovation, or significant improvements.
• They are highly dependent on banks for financing.
• They are typically subject to higher borrowing costs and may be one just event—market disruption or a poor quarter performance—away from insolvency or a bailout. 
• They are “uncompetitive survivors” and contribute to lower productivity in the global economy.
• These companies can pose a risk to the broader economy by tying up resources that could be more effectively used by healthier, more innovative firms.

Q1: What is insolvency?

Insolvency refers to situations where a debtor cannot pay the debts they owe. For instance, a troubled company may become insolvent when it is unable to repay its creditors money owed on time, often leading to a bankruptcy filing.

Source: Zombies: Ranks of world’s most debt-hobbled companies are soaring, and not all will survive

About GNSS-based Electronic Toll Collection (ETC) system:

• The GNSS-based Electronic Toll Collection (ETC) system is a barrier-free method of electronic toll collection that uses Global Navigation Satellite System (GNSS) technology to track vehicles and calculate tolls based on the distance travelled on tolled highways.
• Working: The system uses satellites or constellations of satellites to track vehicles' movements and calculate tolls based on the distance travelled on tolled highways.
• Vehicles equipped with GNSS-enabled On Board Units (OBUs) are charged on the distance they have travelled on tolled highway stretches.
• NHAI plans to implement the GNSS-based electronic toll collection (ETC) system within the existing FASTag ecosystem, initially using a hybrid model where both RFID-based ETC and GNSS-based ETC will operate simultaneously.

Significance: 

• Facilitates smooth vehicle movement on National Highways.
• Provides barrier-less, free-flow tolling for a hassle-free experience.
• Implements distance-based tolling, charging users only for the distance travelled.

Enhances toll collection efficiency by reducing leakages and curbing toll evasion.

Q1. What is a FASTag?

A FASTag is an electronic toll collection system used in India. It is a rechargeable RFID passive tag that allows drivers to pay tolls electronically without stopping at toll plazas. The tag is affixed to the windscreen of vehicles and uses Radio Frequency Identification (RFID) technology to deduct toll fees from linked bank accounts or prepaid wallets.

Source: NHAI Invites Global Expression of Interest for Implementation of GNSS-Based Electronic Toll Collection in India