9 PM Daily Current Affairs Brief – June 2nd, 2022
We have initiated some changes in the 9 PM Brief and other postings related to current affairs. What we sought to do:
- Ensure that all relevant facts, data, and arguments from today’s newspaper are readily available to you.
- We have widened the sources to provide you with content that is more than enough and adds value not just for GS but also for essay writing. Hence, the 9 PM brief now covers the following newspapers:
- The Hindu
- Indian Express
- Business Standard
- Times of India
- Down To Earth
- We have also introduced the relevance part to every article. This ensures that you know why a particular article is important.
- Since these changes are new, so initially the number of articles might increase, but they’ll go down over time.
- It is our endeavor to provide you with the best content and your feedback is essential for the same. We will be anticipating your feedback and ensure the blog serves as an optimal medium of learning for all the aspirants.
Mains Oriented Articles
GS Paper 2
- Global food shortages demand an international-level solution
- Another sanctions package
- The challenge of reforming death penalty sentencing
- A case for community-oriented health services
GS Paper 3
- Understanding gun control legislation of different countries
- Opinion: For India, a lesson in food security from Sri Lanka
- Let it fly: With normalcy back, there’s no case for regulating airline tariffs through price bands
- Opinion: The Digital India transformation
- Inflation demands fiscal action more than a monetary one
- Improve governance before divesting
Prelims Oriented Articles (Factly)
- India and Sweden Host Industry Transition Dialogue in Stockholm
- Kerala registers car that runs on hydrogen fuel — 1st in country
- Explained: What are ‘artillery rockets,’ and why is the US sending them to Ukraine?
- Cabinet approves Expanding the mandate of Government e Marketplace – Special Purpose Vehicle (GeM – SPV) to allow procurement by Cooperatives as Buyers
- Explained: Why Neptune and Uranus appear in different colours
- NTPC releases Biodiversity Policy for conservation and restoration of biodiversity
- UNESCO World Heritage Site ‘Valley of Flowers’ opens for Tourists
- India is poised to play a leadership role in global digital revolution: Union Minister at World Summit of Information Society(WSIS) 2022
Mains Oriented Articles
GS Paper 2
Source: This post is based on the article “Global food shortages demand an international-level solution” published in Livemint on 1st June 22.
Syllabus: GS2 – International Relations – Effects of policies and politics of developed and developing countries on India’s interests
Relevance: Global food security crisis due to the Russia-Ukraine war
Context: Food shortages are beginning to cast a shadow over the world. One long-term factor is the warming of our planet, which has slowly destroyed agricultural land.
But the proximate cause of the greatest concern is the war in Ukraine. Russian President Vladimir Putin’s Black Sea blockade is preventing Ukrainian grain and fertilizers from leaving the port of Odessa
A global agreement on food-stock buffers is needed to mitigate the sort of scarcity created by today’s Ukraine war disruption.
What are the underlying causes of the global price inc of wheat?
Russian blockade around Ukraine is one of the causes, but it is not a major one.
– Until 2021, Ukraine exported 8.5% of the world’s total wheat. But this should not lead to such a big increase in wheat prices, which can lead to global food shortages and famine that is being seen today. After all, most countries have some buffer stocks and should be able to absorb this shock.
The major cause is the behavioral response of national and local governments and even of individuals.
At the global level:
– When global policy coordination is poor, the natural reaction to news of some shortage is to hoard supplies. This is known from studies such as Amartya Sen’s classic work on the 1943 Bengal Famine.
– Ukraine has halted its wheat exports because it had no option. Other countries have chosen to stop or curtail shipments.
- For instance: India, for example, announced a virtual ban on wheat exports on 14 May. 26 countries have limited their wheat exports to ensure that they have sufficient supplies for their own citizens.
All this is causing global wheat prices to rise quickly. India’s announcement alone triggered a 6% price increase.
At household level:
A similar phenomenon occurs at the household level.
– Once the fear of shortages sets in, people stock up on more food than they immediately need in order to guard against a full-blown crisis. Yet, these small actions by millions of people, along with local and national government policies, can end up causing crisis.
The same thing has earlier happened with vaccines: Countries acquired far more doses than they needed, in order to guard against the possibility of a future shortage. Such hoarding explains some glaring global inequities in access to covid vaccines.
What needs to be done?
Behavioral responses, as discussed above, are inevitable. Thus, there’s nothing that can be done about it.
But through collective action, the world can overcome shortages that the market cannot fix.
– A system of global buffers or an international agreement, that countries with a surplus must help others during times of scarcity, would go a long way toward solving much of the problem.
Just like the deposit insurance put an end to bank runs, most people would stop hoarding once they had confidence that this system worked, and that in itself would help avert a crisis. For instance: a national PDS and the 2013 National Food Security Act. With a sophisticated system of minimal food guarantees in place for three decades, the psychology of hoarding at the household level has diminished, which in turn has diminished the need to hoard.
Despite recent hiccups, the march of globalization will not end. Hence, we must try to establish minimal global conventions and agreements to prevent it from harming the most vulnerable
Source: This post is based on the article “Another sanctions package” published in Business Standard on 1st June 22.
Syllabus: GS2 – International Relations
Relevance: Russia Ukraine war and related issues
News: The European Union’s (EU’s) announcement of a joint decision to phase out imports of Russian crude oil has, together with some other developments, shaken up oil markets.
This is the sixth such package of sanctions on entities linked to the Russian Federation by the countries of the EU.
Earlier sanctions have benefitted India, but it should be cautious of its Russian oil purchases.
What do the latest sanctions entail?
It would forbid the purchase of seaborne crude oil from Russia in six months and of refined products in eight months.
There will also be a ban on insuring Russian oil shipments to third countries such as India.
Both these measures are, however, considerably less stringent than earlier proposed because of strong objections from within the bloc.
The Hungarian government, the most Moscow-friendly in the EU, demanded that pipeline oil be excluded from any sanctions. Also, the countries dependent on pipeline oil be allowed to substitute seaborne deliveries of oil if the pipelines were interrupted.
And Greece, famously home to shipping tycoons, demanded that an earlier ban on Russian oil being carried on European hulls be rescinded.
What can be the potential impact of these sanctions?
There are multiple impacts of this EU agreement on the broader oil market and on India in particular.
The initial impact on crude oil prices was to cause an immediate appreciation.
The absence of a ban on pipeline oil means that the lasting impact on the Russian oil economy has been minimised since shipments can be diverted elsewhere, including to Indian and Chinese refineries.
The insurance ban might be more difficult to evade, and might raise logistics prices noticeably.
The Saudi alternative: However, the oil market has multiple other drivers. Since that initial appreciation, prices have trended downwards, driven especially by reports of a breakdown of internal cohesion at “OPEC plus”. The grouping adds Russia and some other large producers to the OPEC. If Russia leaves or is expelled from OPEC Plus, then Saudi Arabia might start pumping out more barrels than are allowed under the current OPEC Plus agreement.
How have the earlier sanctions benefitted India?
India has been one of the beneficiaries of the Western sanctions on Russian hydrocarbons, picking up oil shipments at an over 30% discount.
Some estimates suggest that 11-15% of Russia’s oil sales are going to India. According to some global energy analyst reports, the shipping data suggests that shipments of Urals crude to India have gone up to 900,000 barrels a day this month from just 33,000 barrels a day in February.
Bargain-hunting by Indian refineries is a way to ensure that the overall spike in oil prices is not carried through to Indian refiners’ margins, or to the cost of fuel domestically.
Still, there is also a danger if India’s share in Russian exports rises much higher.
Secondary sanctions might still be a distant proposition, but there is a clear political downside risk to the refiners upping their purchases of Russian oil further — especially those that are state-owned.
Source: The post is based on an article “The challenge of reforming death penalty sentencing” published in the “The Hindu” on 02nd June 2022.
Syllabus: GS2 Important Provisions of the Constitution of India
Relevance: Death penalty and Fundamental Rights
News: Recently, the Supreme court, in Manoj and Ors. vs State of MP, has acknowledged that there is an intense and persistent crisis in the fairness of administering the death penalty in India.
Legality of the Death Penalty in India
In Bachan Singh vs State of Punjab (1980), the court upheld the constitutionality of the death penalty.
The court greatly emphasised ‘individualised sentencing’ and called upon courts to consider the ‘crime’ and the circumstances of the accused.
What are the issues involved?
There are issues around the procedural fairness of the imposition of the death penalty.
Since Bachan Singh judgment, there are disagreements on, (1) which case warrant the death penalty, and (2) whether the nature of information about the accused is relevant for sentencing.
A vast majority of prisoners are poor, and the quality of their legal representation has been poor. Therefore, their sentencing information are not collected appropriately. Very little is known about the accused while sentencing.
Since September 2021, the Supreme Court has delivered judgments in 10 cases. The judgments resulted intp three acquittals in one case and commutations in the rest.
The court has been particularly concerned over the lack of information about the accused. The information is central for a fair sentencing process. No relevant information about the accused person enters the courtroom during the sentencing phase.
There is a pervasive arbitrariness in sentencing procedures that impose the death penalty.
Importance of the Manoj judgment
The court has called for reports of the probation officers, prison officers and mental health professionals.
The court has also taken important steps towards realising an ‘individualised sentencing enquiry’ that was envisaged by the court in Bachan Singh 42 years ago.
The court has indicated a shift towards an evidence-based inquiry while sentencing. If a person has been found guilty, the court would take expert opinions and study reports from a wide range of disciplines, before sentencing the guilty person.
The scope of mitigating factors has been broadened by the Supreme court. The court has acknowledged pre-offence details such as socio-economic status, education, family background and also post-offence details such as the conduct of the prisoner in prison as the mitigating factors while sentencing an accused in a case.
Now, it is believed that past social histories, behaviours and life circumstances of the accused is a product of a complex interplay of personal and environmental factors.
The life circumstances of an individual can help determine punishment. It would require an individual’s life choices and moral culpability.
Life-history approach: it provides a framework to understand the life circumstances of an individual as interconnected to each other.
(1) Socio-economic circumstances are understood like how poverty impacts an individual’s access to housing, education and health care, which subsequently impacts and shapes their life choices.
(2) Family background: Any history of violence or neglect (also known as remote factors or experiences) or other negative experiences can shape an individual’s character and affect their actions as adults.
The traditional checklist-based approach of presenting mitigation deviates from the requirements of individualised sentencing. This deviates from the most fundamental principle of the criminal justice system.
The courts are not equipped courts to understand rich information of non-legal expertise into courtrooms,
The procedure adopted by the Supreme Court while sentencing death penalty should be followed by lower courts
The courts need to equip themselves to appreciate the evidence so presented.
There can be conflicting findings in reports and opinions presented to the court during sentencing. Therefore, the courts must not be constrained by the confines of the evidence act in capital sentencing.
The decision in Manoj can lead to more meaningful and informed sentencing inquiry and ensuring procedural fairness for those under the sentence of death.
Source: The post is based on an article “A case for community-oriented health services” published in the “The Hindu” on 02nd June 2022.
Syllabus: GS2 Social Sector, Health Sector
Relevance: National Health mission and Accredited Social Health Activists (ASHA)
News: Recently, India’s Accredited Social Health Activists (ASHA) received the WHO’s Global Health Leaders Awards 2022 in recognition of their work during the COVID-19 pandemic as well as for serving as a link between communities and health systems.
Contributions of the ASHA workers
They have led to increased access to primary health-care services; i.e., maternal and child health including immunisation and treatment for hypertension, diabetes and tuberculosis, etc.
Served both rural, urban populations and difficult-to-reach habitations.
Worked to make India polio free, increasing routine immunisation coverage; reducing maternal mortality; improving new-born survival and in greater access to treatment for common illnesses.
They have become pivotal to nearly every health initiative at the community level, and are integral to demand side interventions for health services in India.
Genesis of the programme
Inspiration: (1) 1975 WHO monograph titled ‘Health by the people’, (2) 1978 International conference on primary health care in Alma Ata, and (3) 2002 Mitanin initiative of Chhattisgarh in which all-female volunteers were available for every 50 households and 250 people.
Initially, India launched the Community health volunteer’s scheme. But it failed because of lack of development of a community connection and lack of political will.
Launch of the programme
It was launched in 2005-06 as part of the National Rural Health Mission. Later it was extended to urban settings after the launch of the National Urban Health Mission in 2013.
Features of the ASHA Programme
One, the key village stakeholders are involved in the process of ASHA selection. This ensures community ownership for the initiatives and forging a partnership.
Two, ASHAs came from the same village where they worked. This ensured familiarity, better community connect and acceptance.
Three, the phrase activist was joined in their name to reflect that they were/are the community’s representative in the health system, and not the lowest-rung government functionary in the community.
Four, they were called volunteers to avoid a slow process for government recruitment and to include elements of the performance-based incentives and some accountability.
Functioning of the Programme
Each of the women-only volunteers work with a population of nearly 1,000 people in rural and 2,000 people in urban areas.
ASHAs coordinate things within villages and with the health system, with the help of Anganwadi workers (AWW), Auxiliary Nurse Midwife (ANM), panchayat representatives and influential community members at the village level. The A-A-A: ASHA, AWW and ANM, act as three frontline functionaries at the village level and form the all-women partnership to provide the primary health-care services to the community.
Platforms such as village health, sanitation and nutrition committees were created, for coordination and service delivery.
What are the challenges?
The ASHA volunteers have dissatisfaction. There are regular agitations and protests by ASHAs in many States of India.
Among the A-A-A, ASHAs do not have a fixed salary. The total payment including performance-based incentives remain low and often delayed. They don’t have opportunities for career progression.
The global recognition should be used as an opportunity to review and further strengthen the ASHA programme. This will make a stronger and community-oriented primary health-care system.
Indian States need to develop mechanisms for higher remuneration for ASHA workers.
An in-built institutional mechanism should be created for their capacity-building and providing avenues for career progression. For example, they can move to cadres such as ANM, public health nurse and community health officers.
The ASHAs and their family should be given the benefits of the social sector services like health insurance.
An independent and external review of the programme needs to be given urgent and priority consideration.
Many of the temporary posts in the National Health Mission can be put to regularization. In fact, ASHAs can be made permanent government employees.
GS Paper 3
Source: This post is based on the article “Understanding gun control legislation of different countries” published in The Hindu on 2nd June 22.
Syllabus: GS3 – Internal security
Relevance: Gun control policies, Laws governing firearms in India
News: The U.S. recently witnessed two episodes of mass shootings in a span of 11 days that killed more than 30 people including elementary school children.
Canada also recently amended its gun control policies.
A look at the laws governing firearms in India, Canada, Japan and New Zealand
What do gun laws in the U.S. say?
The Second Amendment of the U.S. Constitution states that “the right of the people to keep and bear Arms shall not be infringed”,. It is often attributed as the root cause of all firearm-related violence.
What are the gun laws in other countries?
– Possessing a fully-automatic weapon, unless registered before 1978, is illegal in Canada.
– Gun licences are valid for five years and the individual of at least 18 years of age is eligible upon completing the Canadian Firearms Safety Course.
– Vetting is undertaken to ensure that the applicant does not have a history of violence or suffering from mental illnesses or was previously barred from the process.
Canada has recently introduced legislation to amend its Firearms Act. It is proposing to institute a ‘national freeze’ on handguns — preventing the sale, purchase, transfer, and import of handguns into Canada.
Acquiring a gun in Japan is particularly difficult.
One has to present a series of documents, establish their ‘needs’, and undertake an approximately month-long training on handling and safety. One is also required to pass the scrutiny of criminal records and medical health, and then an exam to prove eligibility.
Buying a weapon too requires a separate certification (from the dealer) mentioning the desired model.
Applicants must be 18 years, not suffering from mental illnesses, not have a license revoked less than five years ago, not dependent on alcohol or narcotic substances, and have a fixed residence.
Any violation is punishable with imprisonment.
The turnaround in gun-law legislation in the country came in 2019 following the mass shootings that took place at two mosques in Christchurch.
The legislation now requires firearms dealers to provide license numbers of all its employees at a facility, including those not directly involved in handling any arms but having access to the premises.
It is now also mandatory for all weaponry to have an identification number.
Applicants must be at least 16 years of age and undertake training in handling and storing firearms, and pass an exam.
The vetting process requires the applicant to furnish contact details of known people to ascertain that she/he is a ‘fit and proper person’.
Gun license applicants in India must be at least 21 years and not convicted of any offense involving violence. Also, the applicant should not be of ‘unsound mind’ or a threat to public safety and peace.
Upon receiving an application, the licensing authority (i.e., the Home Ministry), asks the officer in charge of the nearest police station to submit a report about the applicant after thorough vetting.
The Arms Act amended in 2019 has reduced the number of firearms that an individual can procure from three to two.
Indian laws have specific provisions on curtailing the use of licensed weapons to ensure social harmony.
No entity is permitted to sell or transfer any firearm which does not bear the name of the maker, manufacturer’s number, or any other visible or stamped identification mark.
Any act of conversion (such as shortening the barrel of a firearm or converting an imitation firearm into a firearm) or unlawful import-export is punishable with an imprisonment term of seven years, which may extend to life imprisonment and be liable to monetary fines.
Source: This post is based on the article “Opinion: For India, a lesson in food security from Sri Lanka” published in The Indian Express on 2nd June 22.
Syllabus: GS3 – Food Security
Relevance: Need for self-sufficiency in basic foods
Context: India needs to have a strategy of self-reliance in producing basic foods, including edible oils.
Against this backdrop, the article suggests taking lessons from countries like Sri Lanka, and framing a suitable policy to boost its food security for the long term.
Examples of Sri Lanka and Saudi Arabia
Sri Lanka (SL)- (Huge import dependence despite having the resources)
Its population (21.5 million) is less than Tamil Nadu and Kerala.
Despite this fact, it imports a huge amount of dairy products. For instance: its imports of whole milk powder (WMP) were 89,000 tonnes in 2020. This amount of WMP can produce almost 2.1 million liters per day (MLPD) equivalent to milk. While SL produced 1.3 MLPD domestically.
It translates into an import dependence of over 60% — for a country having very little foreign exchange today to import anything, leave alone milk powder.
Saudi Arabia – (Aiming for food security despite having limited resources)
At the other end, we have Saudi Arabia, home to over 35 million inhabitants (including immigrants) and also the world’s largest vertically integrated dairy company.
Almarai Company has six dairy farms in the desert kingdom, producing more than 3.5 MLPD of milk. The animals are sourced from the US and Europe. The entire feed and also forage given to them are procured from abroad.
The company has even purchased thousands of acres of land in California, Argentina, and Romania to grow alfalfa hay, which is then shipped back for feeding the cattle.
India’s import dependence for edible oils
India is hugely import-dependent for edible oils, just as Sri Lanka has been in dairy.
– 60% of its total consumption is imported annually.
Why the import dependence for edible oils has assumed significance now?
Till recently, this dependence didn’t seem to matter. Low international prices meant that the import bill, though high, fell from $9.85 billion in 2012-13 to $9.67 billion in 2019-20.
– Indian consumers paid more or less the same for imported palm, soyabean, and sunflower oil in 2019 as they did in 2012.
But in the last couple of years, retail prices of most oils have increased to almost double or even more.
– The value of India’s vegetable oil imports surged to a record $19 billion in 2021-22.
This has brought to light the dangers of over-dependence on imports of essential food commodities.
As a country with a population many times that of Sri Lanka and Saudi Arabia, India needs to have a strategy of self-reliance for basic foods.
Source: This post is created based on the article “Let it fly: The case of regulating airline tariffs through price bands” published in The Times of India on 2nd June 2022.
Syllabus Topic – GS Paper 3 – Industries and industrial policies
Context: The covid time regulations are still applicable to the aviation industry. There is a need to roll back them.
India’s aviation industry faced a difficult time during covid times. Therefore, the government extended support to the aviation industry in the form of relaxation in the price band for air tickets and reduced GST on domestic maintenance and repair from 18% to 5%.
However, now the government must deregulate the tariffs in the aviation industry
Why the government must deregulate the aviation industry tariffs?
The situation of domestic aviation is back on track. However, the price band is still applicable for 15 days a month. Government must refrain from re-regulating the industry.
First, it is in contravention to the March 1994 decision to deregulate tariff fixation in the aviation industry. The decision liberalized the sector.
Second, the tariff regulations also lead to rent-seeking behavior.
Third, the Input price of aviation is increasing. Turbine fuel, which accounts for 40% of operating costs, is increasing. Thus, airlines should be free to price tickets to reflect it.
Fourth, competition is increasing in the domestic aviation industry. If some firms want to use pricing as a tool of competition, the floor price, set by the government, should not prevent it.
Source: The post is based on an article “The Digital India transformation” published in the Indian Express on 02nd June 2022.
Syllabus: GS3 Indian Economy, Infrastructure
Relevance: Digital India, Digital Economy, Digital Infrastructure
News: Recently, the Prime Minister of India expressed his idea of India that “every Indian must have a smartphone in his hand and every field must be covered by a drone”.
About the Digital India Mission
The Digital India was launched on July 1, 2015. Digital India is a transformative programme to deliver the objectives of the digital transformation of India, bringing about inclusive growth and transformation using technology.
Importance of Digital Transformation
The digital age provides an opportunity to transform the lives of people in many ways. For example, technology is a means to empowerment and a tool that bridges the distance between hope and opportunity.”
How has Digital India led to the digital transformation in India?
India today is home to more than 75 crore smartphones, 133 crore Aadhar Cards, more than 80 crore internet users, has 4G and is now accelerating towards 5G. Further, India has the lowest data tariffs in the world.
Digital India solved some of the most difficult problems faced by the country like public services delivery. The Jan-Dhan-Aadhaar-Mobile (JAM) trinity has ensured targeted delivery of government schemes to its beneficiaries without leakage or misuse. The poorest have received every penny of their entitled benefits.
The government has resorted to DBT technology in the last eight years. This has led to savings of public money.
Digital ecosystem provided ways to tackle the challenge of the pandemic. For example, digital technology was used for vaccination, digital education for students when schools were closed, etc.
The drone’s technology and GIS technologies are being employed to provide digital land records to the rightful owners under the SVAMITVA Yojana. This will reduce disputes, facilitate monetisation of land, availing bank loans and scientific village level planning.
Fintech innovations and India’s digital payments revolution. For example, UPI and Aadhaar-Enabled Payment Systems (AEPS) were some innovative digital payment products.
Digital India has led to the emergence of more than 61,400 start-ups, making India the third-largest start-up ecosystem after the US and China. Nearly 44 start-ups achieved unicorn status in 2021.
India is rapidly becoming atmanirbhar in electronics manufacturing due to Modified Special Incentive Scheme (MSIPS), Electronics Manufacturing Cluster, National Policy on Electronics 2019, etc. As a result, India has more than 250 mobile phones, components and accessories manufacturing units today.
Indian companies have developed their own 4G and 5G technologies. In fact, the commitment to making India self-reliant in semiconductor chip manufacturing has also attracted many big investors.
Digital technology must be low-cost, developmental, inclusive, and substantially home-grown.
Digital technology should bridge the digital divide and usher in digital inclusion.
Source: The post is based on an article “Inflation demands fiscal action more than a monetary one” published in Live Mint on 02nd June 2022.
Syllabus: GS 3 Indian Economy, issues and Challenges in mobilzation of resources; growth and development
News: Recently, Inflation in India has been on an upward path
Status of Inflation
Wholesale price index inflation stands at 15% and consumer price inflation is nearly at 8%.
About the monetary policy system in India
In 2015, India introduced the ‘channel system’, in contrast with the ‘floor system’ of the US.
The policy rate ranges between the upper bound rate at which banks can borrow from RBI under penalty and the lower bound rate (such as the marginal standing facility), at which banks can park their funds with RBI for a positive rate of return (referred to as the reverse repo rate).
Should RBI do another hike in its policy interest rate soon?
The RBI’s standing deposit facility (SDF) rate of 4.15% along with a repo rate hike to 4.4% counts can lead to double tightening of monetary policy.
At present, RBI has adopted the SDF rate at the place of the reverse repo rate. The SDF rate (4.15%) is well above the old 3.35% reverse repo rate. Overall, an SDF is beneficial as it does not require the collateral of government securities, while reverse repo transactions do. This will free up G-Secs for other collateralized borrowings, reducing the risk in such transactions significantly, etc.
An increase in the upper bound (repo rate) makes it costly for banks to have inadequate reserves.
Similarly, a decrease in the lower bound reduces their incentive to park money with RBI and increases liquidity in the banking system, affecting other short-term interest rates as banks go in search of adequate returns on now-surplus funds.
The RBI has raised the reverse repo rate from 4%, to 4.40%. The SDF rate was revised from 3.75% to 4.15%. This means monetary policy was tightened considerably in two ways.
Should monetary policy respond to supply shocks?
The current rise in inflation is primarily a result of oil price escalation on account of the Ukraine-Russia war. This inflation has rippled through all other commodity prices. It constitutes a supply shock.
If RBI raises its lending rate further, it may lead to another shock. For example, the working-capital loans and short-term credit lines to firms will become costlier.
The channel or corridor itself is also an effective policy tool. If the central bank wants to tighten monetary policy, instead of increasing its policy rate each time, the RBI can shift the corridor up.
The corridor changes alter the opportunity cost of funds kept with RBI. For example, if the corridor is shifted downwards, or if the lower-bound SDF rate is declined, banks won’t keep extra funds with RBI. They would invest elsewhere for returns. It will increase demand for short-term securities, thus raising their prices and lowering yields.
The corridor changes have better and more direct transmission than transmission of policy rate changes.
The government can go for fiscal policy. For example, price relief on petroleum products through a reduction in taxes.
At present, the wholesale inflation has not translated directly into retail inflation so far. Therefore, the government should release stock to address food inflation.
The government can invest in cold chains for perishables. It can stabilize prices in the longer term and help India keep inflation in control.
Source: The post is based on an article “Improve governance before divesting’ published in the Business Standard on 02nd June 2022.
Syllabus: GS3 Issues and Challenges in Mobilization of Resources; Investment Models
Relevance: Disinvestment and Privatization; Corporate Governance
News: In the last few decades, the government has realised that the public sector enterprises (PSEs) should not be present in many of the sectors of the economy. Therefore, they need to exit.
What are the issues in the functioning of the PSEs?
The listed PSEs perform worse than their sectoral peers on the stock market.
– For instance, during FY17 to FY22, the PSE index return (Nifty PSE) was less than 2% compared to Nifty 50 return of over 90% and Nifty 500 return of over 85%.
Investors do not have full faith in the PSEs. They are sceptical whether their operations are based only on market considerations, whether PSEs will keep shareholders´ interest as supreme and whether their boards are actually independent.
Investors expect that the structural/operational issues of the PSEs should be resolved before they are listed/or if already listed, to resolve them without any delay.
In the last few decades, the corporate governance norms and standards in India have evolved. The recommendations of Kumar Mangalam Birla Committee 1999 led to the clause 49 requirement in the listing agreement of companies with stock exchanges.
Listed PSEs routinely seek various regulatory dispensations or exemptions. They cite various reasons like serving a public purpose, historical reasons, strategic consideration, PSE´s incorporation under special act, and so on. Therefore, they have put little effort to align their structures, operations and work culture in line with the other listed companies in the private sector.
In India, the rule-making on the subject of minimum public float norms for listed companies is in the government´s domain. However, world over this is in the realm of market regulators and stock exchanges.
The PSEs often disregard the rule whether they don’t have relaxations. For instance, 55 listed PSEs didn´t have the requisite number of independent directors and 28 didn´t have even one-woman directors (independent or otherwise) on their board.
There is constant pressure to achieve the annual target of the disinvestment amount. The government does little to improve the corporate governance of PSEs.
It is important for the PSE to improve the corporate governance norms before initiating any divestment/privatisation process.
The PSEs should follow the same regulatory norms and framework like their peer firms which are listed on the stock market.
The Uday Kotak Committee has taken into account the changing scenario, the experience gained, and reviewed the corporate governance norms.
Instead of announcing the disinvestment amount target, the government should announce the annual targets like the number of PSEs to achieve minimum public float in that year; meeting the norms of independent directors and a woman director in their board; etc.
The new approache will benefit the investors in PSEs and will fetches better price to the government during divestment or privatisation.
Prelims Oriented Articles (Factly)
What is the News?
India and Sweden hosted the Industry Transition Dialogue in Stockholm, Sweden.
What is Industry Transition Dialogue?
Hosted by: India and Sweden as part of the Leadership for Industry Transition (LeadIT) Initiative.
Purpose: To contribute to the UN Conference ‘Stockholm+50’ that will set the agenda for COP27.
At the dialogue, the Union Environment Minister said that the developed countries with their historical experiences must take lead in the global transition towards net-zero and low carbon industry transition.
What is the LeadIT Initiative?
Note: Japan and South Africa are the latest members to join the initiative. This extends the total membership of LeadIT to 37, including countries and companies together.
What is Stockholm+50’?
Source: The post is based on the article “India and Sweden Host Industry Transition Dialogue in Stockholm” published in PIB on 1st June 2022.
What is the News?
The first hydrogen-powered car named “Toyota Mirai” was registered in Kerala in April 2022. With this, Kerala has become one of the select few states to allow the registration of such cars.
Note: The registered vehicle is exempt from taxation because it will be used for research and development purposes.
What is Toyota Mirai?
Toyota Mirai is India’s first fuel-cell electric vehicle(FCEV).
Working: The car’s powertrain works by breaking down hydrogen into oxygen and water that generates electricity. There is a small battery that stores the electricity and then this electricity is used to power the electric motors. The byproduct is water which is emitted from the vehicle’s tailpipe.
Benefits of Toyota Mirai
Less Refuelling Time: They can be refuelled like a conventional combustion engine vehicle at a hydrogen station.Refuelling time for the car is five minutes and can run 600 kilometres on a full tank.
Smaller Battery: The electric battery in Mirai is 30 times smaller than what conventional electric vehicles use.
Faster Charging: They are a lot faster in charging compared to charging a large battery to its full range.
Source: The post is based on the article “Kerala registers car that runs on hydrogen fuel — 1st in-country” published in Down To Earth on 1st June 2022.
What is the News?
The United States has announced that it is sending its High Mobility Artillery Rocket Systems known as HIMARS to Ukraine.
What is HIMARS?
The US-made High Mobility Artillery Rocket Systems are known as HIMARS.
It is a multiple launch rocket system or MLRS – a mobile unit that can simultaneously launch multiple precision-guided missiles.
It is considered a modernized, lighter and more agile version of the M270 MLRS developed in the 1970s for US and allied forces.
What is an artillery rocket?
An artillery rocket is a weapon that is typically propelled by a solid-fuel motor and can carry a variety of warheads.
During the Cold War, most artillery rockets were unguided and imprecise when fired at greater distances.
What’s the difference between a rocket and a missile?
The nomenclature can be confusing sometimes, but generally, the word “rocket” is used in a military context to refer to relatively inexpensive unguided weapons powered by solid-fuel motors.
On the other hand, “missile” is generally shorthand for “guided missiles,” more expensive and complicated weapons that use movable fins to steer themselves to their targets and can fly much farther.
Source: The post is based on the article “Explained: What are ‘artillery rockets,’ and why is the US sending them to Ukraine?” published in Indian Express on 2nd June 2022.
Cabinet approves Expanding the mandate of Government e Marketplace – Special Purpose Vehicle (GeM – SPV) to allow procurement by Cooperatives as Buyers
What is the News?
The Union Cabinet has given its approval for expanding the mandate of Government e-Marketplace(GeM) to allow procurement by Cooperatives as buyers on GeM.
What is the Government e-Marketplace(GeM)?
Launched by: Ministry of Commerce and Industry in 2016.
Aim: To create an open and transparent procurement platform for Government buyers.
At present, the platform is open for procurement by all government buyers: central and state ministries, departments, public sector enterprises, autonomous institutions, local bodies, etc.
However, GeM is not available for use by private sector buyers. But suppliers (sellers) can be from across all segments such as government or private.
What is the recent decision taken by the Government?
The government has now allowed cooperatives also to sell products on the Government e-Marketplace(GeM) platform.
The cooperatives may however be charged a transaction fee to cover the incremental costs.
What is the significance of this decision?
Allowing Cooperative Societies to register on GeM as Buyers would help Cooperatives in getting competitive prices through an open and transparent process.
Source: The post is based on the article “Cabinet approves Expanding the mandate of Government e Marketplace – Special Purpose Vehicle (GeM – SPV) to allow procurement by Cooperatives as Buyers” published in PIB on 1st June 2022.
What is the News?
Neptune and Uranus have much in common. They have similar masses, sizes and atmospheric compositions. But their appearances are in different shades of blue.
At visible wavelengths, Neptune is a rich, deep azure hue while Uranus is a distinctly pale shade of cyan.
Why do Uranus and Neptune appear in different colours?
The haze around Uranus is thicker than that around Neptune. Due to this, Uranus’s atmosphere has a lighter appearance than Neptune’s.
Without this haze in either planetary atmosphere, astronomers believe both planets would be almost identically blue.
Why is the haze thicker on Uranus?
There are three aerosol layers in the atmospheres of Neptune and Uranus. The key layer that affects the colours is the middle layer. The middle layer is a layer of haze particles that is thicker on Uranus than on Neptune.
On both planets, methane ice condenses onto the particles in this middle layer pulling the particles deeper into the atmosphere.
But because Neptune has a more active, turbulent atmosphere than Uranus does, the researcher believes Neptune’s atmosphere is more efficient at churning up methane particles into the haze layer.
This removes more of the haze and keeps Neptune’s haze layer thinner than it is on Uranus with the result that the blue colour of Neptune looks stronger.
Source: The post is based on the article “Explained: Why Neptune and Uranus appear in different colours” published in Indian Express on 2nd June 2022.
What is the News?
National Thermal Power Corporation Limited (NTPC Ltd.), as a member of the India Business & Biodiversity Initiative(IBBI) has released a renewed Biodiversity Policy 2022.
What is the purpose of the Biodiversity Policy 2022?
Aim: To establish a comprehensive vision and guiding principle for conservation, restoration, and enhancement of biodiversity.
– To adopt a precautionary approach for sustainable management of biodiversity in all the decision-making processes to ensure the Earth’s variety of life in and around the business units of NTPC.
– To adopt systematic consideration of local threats to biodiversity beyond the company’s business activities.
What is India Business & Biodiversity Initiative(IBBI)?
Launched by: The Confederation of Indian Industry(CII) with the support of the German International Cooperation (GIZ).
Aim: To serve as a national platform for business and its stakeholders for dialogue sharing and learning, ultimately leading to mainstreaming sustainable management of biological diversity into businesses.
Source: The post is based on the article “NTPC releases Biodiversity Policy for conservation and restoration of biodiversity” published in PIB on 31st May 2022.
What is the News?
The Valley of Flowers will be accessible to the public from June to October which remains covered in a blanket of snow for the remaining six months.
What is the Valley of Flowers?
Located in: Chamoli district of Uttarakhand
Discovered by: The place was accidentally discovered in 1931 by Frank S Smythe, an avid British mountaineer and a botanist when he was traversing through the region.
It was declared as a National Park in 1982.
It was declared a UNESCO World Heritage Site in 2005.
Flora: The valley is home to over 600 flowering species, including some exotic varieties like Brahmakamal which is also the state flower of Uttarakhand. Blue poppy, described as the Queen of Flowers can also be found here.
Fauna: The region also has a rich faunal diversity with species like the leopard, musk deer, and blue sheep.
Climate: The park lies completely in the temperate alpine zone.
Significance: Valley of Flowers National Park complements the rugged mountain wilderness of Nanda Devi National Park to the east. Together, they encompass a unique transition zone between the mountain ranges of the Zanskar and Great Himalayas.
Source: The post is based on the article “UNESCO World Heritage Site ‘Valley of Flowers’ opens for Tourists” published in Indian Express on 31st May 2022.
India is poised to play a leadership role in global digital revolution: Union Minister at World Summit of Information Society(WSIS) 2022
What is the News?
The Minister of State for Communications has attended the opening ceremony of the World Summit of Information Society (WSIS) 2022 held in Geneva, Switzerland.
What is the World Summit of the Information Society (WSIS) 2022?
The World Summit on the Information Society(WSIS) 2022 represents the world’s largest annual gathering of Information and communications technology(ICT) for the development community.
Objective: To provide a platform for multi-stakeholder cooperation, and information exchange to ensure that ICTs remain a key enabler in achieving the globally agreed Sustainable Development Goals (SDGs).
The theme for 2022: “ICTs for Well-Being, Inclusion and Resilience: WSIS Cooperation for Accelerating Progress on the SDGs”.
Source: The post is based on the article “India is poised to play a leadership role in global digital revolution: Union Minister at World Summit of Information Society(WSIS) 2022” published in PIB on 31st May 2022.
Dear Friends, We are happy to release the Mains answer copies of Preksha Agrawal. She has secured AIR 303 in the UPSC Civil Services Examination 2021. Aspirants can learn from these copies and strategize their preparation accordingly. Download link: Preksha Agrawal MGP Copy 1 – GS Test Copy Preksha Agrawal MGP Copy 2 – GS… Continue reading [Download] – Preksha Agrawal AIR 303 (UPSC CSE 2021) – MGP Test Copies
Dear Friends, We are happy to release the Mains answer copies of Prassannakumar V. He has secured AIR 264 in the UPSC Civil Services Examination 2021. Aspirants can learn from these copies and strategize their preparation accordingly. Download link: Prassannakumar V MGP Copy 1 – GS Test Copy Prassannakumar V MGP Copy 2 – GS Test… Continue reading [Download] – Prassannakumar V AIR 264 (UPSC CSE 2021) – MGP Test Copies
Dear Friends, We are happy to release the Mains answer copies of Donthula Zenith Chandra. He has secured AIR 241 in the UPSC Civil Services Examination 2021. Aspirants can learn from these copies and strategize their preparation accordingly. Download link: Donthula Zenith Chandra MGP Copy 1 – GS Test Copy Donthula Zenith Chandra MGP Copy… Continue reading [Download] – Donthula Zenith Chandra AIR 241 (UPSC CSE 2021) – MGP Test Copies
Introduction: Contextual introduction. Body: Write some points related to NITI Aayog’s recommendations for the betterment of gig and platform workers. Conclusion: Write a way forward. A gig worker is a person who engages in income-earning activities outside of a traditional employer-employee relationship, as well as in the informal sector. When gig workers use platforms i.e.,… Continue reading [Answered] Enumerate NITI Aayog’s recommendations for the betterment of gig and platform workers.
[Answered] The dominant position of online aggregator platforms is damaging for small and medium businesses and customers. Discuss and also suggest some international experiences for dealing with this issue.
Introduction: Contextual introduction. Body: Explain how dominant position of online aggregator platforms is damaging small and medium businesses and customers. Also write some international experiences for dealing with this issue. Conclusion: Write a way forward. The proliferation of a wide range of e-commerce platforms has created convenience and increased consumer choice. But in reality, the… Continue reading [Answered] The dominant position of online aggregator platforms is damaging for small and medium businesses and customers. Discuss and also suggest some international experiences for dealing with this issue.
Hello, everyone. We are posting a Compilation of the 10 pm current affairs quiz – June 2022 – Fourth week Click on the following link to download Download The 10 PM Daily Current Affairs Quiz is focused on the current affairs part of UPSC Prelims. The daily current affairs quiz consists of 10 questions based on the daily current affairs.… Continue reading [Download] 10 PM Weekly Compilation – June, 2022 – 4th week
About Must Read News Articles: Must Read News Articles is an initiative by Team ForumIAS to provide links to the most important news articles of the day. It covers several newspapers such as The Hindu, Indian Express, Livemint, etc. This saves the time and effort of students in identifying useful and important articles. With newspaper websites… Continue reading Must Read Current Affairs Articles – July 1, 2022
NITI Aayog and TIFAC Launch Report on Future Penetration of Electric Two-Wheelers in the Indian Market
What is the News? NITI Aayog and Technology Information, Forecasting and Assessment Council (TIFAC) have released a report titled ‘Forecasting Penetration of Electric Two-Wheelers in India’. Note: TIFAC is an autonomous organization set up in 1988 under the Department of Science & Technology to look ahead in the technology domain, assess the technology trajectories and… Continue reading NITI Aayog and TIFAC Launch Report on Future Penetration of Electric Two-Wheelers in the Indian Market
What is the News? The Commonwealth leaders have adopted the Living Lands Charter at the 2022 Commonwealth Heads of Government meeting in Kigali, Rwanda. What is the Living Lands Charter? It is a non-binding agreement adopted by the Commonwealth member countries. Purpose: The charter mandates member countries to safeguard global land resources and arrest land… Continue reading Commonwealth adopts ‘Living Lands Charter’ for future generations
What is the News? NASA has launched CAPSTONE, a microwave oven-sized CubeSat weighing just 55 pounds(25 kg). What is CAPSTONE? Full Form: Cislunar Autonomous Positioning System Technology Operations and Navigation Experiment(CAPSTONE) Aim: To help reduce risk for future spacecraft by validating innovative navigation technologies and by verifying the dynamics of the halo-shaped orbit. Which orbit… Continue reading Explained: What is CAPSTONE, NASA’s new satellite?