IASBUZZ MARCH 2020 EDITION

BrainyIAS (84594-00000) Contents GEOGRAPHY, ENVIRONMENT AND ECOLOGY ...... 4 Why wildlife consumption became popular in China? ...... 4 Ajodhya Hills Hydel Project ...... 5 India Host to Large Migratory Species ...... 6 Eravikulam National Park ...... 7 YOUNGLE BLUE HOLE (YBH)...... 8 POLITY AND GOVERNANCE ...... 10 EASE 3.0 Reforms for Public Sector Banks ...... 10 National Technical Textiles Mission ...... 11 Media Access Control (MAC)-binding ...... 12 Virtual Currency Ban removed by SC ...... 13 What is Curative Petition? ...... 15 ACTS AND BILLS ...... 16 Direct Tax Vivad Se Vishwas Bill 2020 ...... 16 Epidemic Diseases Act, 1897 ...... 17 Surrogacy Regulation Bill 2020 ...... 18 The Central Sanskrit Universities Bill, 2019 ...... 19 SCHEMES AND POLICIES OF GOVERNMENT ...... 21 Yes Bank Crises ...... 21 National Sports Development Fund ...... 22 ECONOMY ...... 23 Road Network in India ...... 23 Inequality And Poverty ...... 25 Unemployment in India ...... 30 Poverty Estimates in India ...... 33 Gross Domestic Product (GDP) of India ...... 36 Understanding Inflation ...... 38 Banking Reforms In India ...... 41 The Indian Railway Management Service (IRMS) ...... 46 Monetary Policy Committee (MPC) ...... 49 India To Set Aside Fiscal Policies To Cope With COVID19 Pandemic ...... 52 Kerala seeks loan from NABARD ...... 54 International Monetary Fund (IMF) ...... 57

www.brainyias.com BrainyIAS (84594-00000) Parallel Economy in India...... 59 Airports Authority of India to raise $300 million ...... 61 What are AT-1 Bonds? ...... 62 Predatory Pricing in India ...... 63 AGRICULTURE ...... 66 Electronic National Agriculture Market (e-NAM) Platform ...... 66 Khola chilli gets GI tag ...... 68 SCIENCE AND TECHNOLOGY ...... 71 Henneguya Salminicola: Anaerobic Parasite ...... 71 Electronic Waste Recycling in India ...... 71 WaxWorm- Plastic Eating Caterpillar ...... 73 India shares SARS-CoV-2 genome ...... 74 WHO declared SARS-CoV-2 a pandemic ...... 75 COVID-19 Virus ...... 76 RaIDer-X ...... 78 INTERNATIONAL AFFAIRS AND GLOBAL ISSUES ...... 80 Oil Price Diplomacy ...... 80 USA- Taliban Deal Breakdown ...... 82 Deal signed between the US and Taliban ...... 85 HISTORY AND CULTURE ...... 86 Sheikh Mujibur Rahman ...... 86 UNESCO World Heritage Site 2020, India bats for inclusion of Dholavira & Deccan Sultanate Monuments ...... 87

www.brainyias.com BrainyIAS (84594-00000) GEOGRAPHY, ENVIRONMENT AND ECOLOGY

Why wildlife consumption became popular in China?

Relevancy  G.S. Paper 2 and 3  COVID-19 outbreak, reasons and role of China Why in news?  Due to miscommunication and false rumors on internet, many people believe that eating non-veg can result in Coronavirus and thus avoiding it.  China is blamed for their consumption of wildlife which might have resulted in Corona outbreak. Background  China, a country of 1.4 billion people, has been the epicentre of several deadly global outbreaks in recent years like, Severe Acute Respiratory Syndrome (SARS), bird flu, and now the novel coronavirus (COVID-19).  Diseases such as COVID-19 are zoonotic, meaning they are transmitted between animals and people.  Other diseases such as HIV, Ebola, and anthrax are also zoonotic. Origin of COVID-19  According to the World Health Organisation, the SARS-CoV was transmitted from civet cats to humans,and MERS-CoV from dromedary camels to humans.  Researchers are yet to conclude how COVID-19, which was first detected in China’s Wuhan, originated.  Many believe that the reason lies in the “wet markets” dotting cities across China, a country which has 50% of the world’s livestock — where fruits, vegetables, hairy crabs and butchered meat are often sold next to bamboo rats, snakes, turtles, and palm civets. China’s wildlife  According to the United Nations Development Programme (UNDP) in China, the country is one of the mega-biodiversity countries in the world, harbouring nearly 10 per cent of all plant species and 14 per cent of animals on earth.  Having 6.5 per cent of the world’s territory, the country is home to 14 per cent of the world’s vertebrates, 20 per cent of fish species, 13.7 per cent of birds, 711 mammal and 210 amphibian species. Wild animals as food  Wildlife eating is practised across China. Animal parts are also used for medicinal purposes, with traders legally selling donkey, dog, deer, crocodile and other meat.  It is widely accepted that one of the reasons why wildlife consumption became popular in China is the Great Leap Forward, an economic and social campaign enforced by dictator Mao Zedong between 1958 and 1962.  While the objective of the programme was to transform China from an agrarian economy to an industrialised state, a brute implementation of maligned policies led to the deaths of an estimated 18 million to 45 million people due to starvation, disease, and violence.  In the year 1960, 62,000 deer were wiped out in the Sichuan province, and the Mongolian gazelle was hunted to near extinction.  Wildlife eating, which was originally practised by a limited number of people in southern China, spread to the rest of the country. Around this time, small farmers turned to rearing wild animals, such as snakes, bats, and turtles, as a means of sustenance, according to Vox.

www.brainyias.com BrainyIAS (84594-00000)  In 1988, China enacted the Wildlife Protection Law, which declared that wildlife resources would be owned by the state. The law also provided legal protection to those engaged in wildlife rearing, and said that the state would encourage the breeding and domestication of wild animals.  The country went on to have the world’s largest wildlife domestication operation with a wide variety of animals, as the government encouraged people to escape poverty.  Wildlife has since been a part of the country’s culinary culture, with the industry promoting these animals as having medicinal, aphrodisiacal, body building properties. Is it safe to eat chicken during Corona Outbreak?  Yes, it is absolutely safe. No link has been found between the consumption of the cooked meat of any animal or bird, and catching the infection.  The only way the SARS-CoV-2 virus is currently spreading is through droplets released by an infected individual in coughs or sneezes, or if you touch your face, mouth, or nose after touching an infected surface.  Many Indians have stopped eating chicken, believing rumours and misinformation on social media. This has led to a crash in prices, and massive losses for the poultry industry.  The WHO does, however, caution against eating “raw or undercooked animal products”.

Ajodhya Hills Hydel Project

Relevancy  G.S. Paper 1 and 3  Objective question- tribals in Ajodhya hills, geography of Ajodhya hills  Subjective question- Forest Rights Act 2006, significance Why in news?  Tribals opposed to a proposed hydel power project in the remote Ajodhya Hills in West Bengal have threatened to heighten their protests. Background  According to the Forest Rights Act, 2006 if a forest land has to be acquired, then at least 50% of the affected population dependent on the land has to give consent in gram sabha, and a third of the villagers have to be women.  The villagers protesting against the project refer to the 900 MW Purulia Pumped Storage Project (PPSP) that came up at Ajodhya Hills in the Baghmundi block of Purulia district around a decade ago. The villagers allege that it lead to massive loss of vegetation and hundreds of tribals lost their livelihoods. Ajodhya Hills  Ajodhya Hills is a small plateau with hilly surroundings located in the Purulia district of the state West Bengal.  It is the easternmost part of the Chhotanagpur Plateau and extended part of Eastern Ghats range. Highest peak of Ajodhya Hills is Chamtaburu.  The hills are largely inhabited by Santals, an ethnic tribe with a population of over 25,00,000 (25 lakh) across West Bengal.  The tribe speaks Santali, an Austroasiatic language that is the most widely-spoken of the Munda languages.  The Turga Pumped Storage Project (TPSP) aims to utilise the waters of the Turga, a tributary of the Subarnarekha river, for peak power generation on a pumped storage type development.

www.brainyias.com BrainyIAS (84594-00000) India Host to Large Migratory Species

Relevancy  G.S. Paper 1 and 3  Environment and Biodiversity Why in news?  Scientists say that the total number of migratory fauna from India comes to 457 species, with new additions to the wildlife list put out by the Convention on the Conservation of Migratory Species (CMS). Birds comprise 83% (380 species) of this figure. Migratory species in India  The ZSI had put the number at 451. Six species were added later.  They are the Asian elephant, great Indian bustard, Bengal florican, oceanic white-tip shark, urial and smooth hammerhead shark.  Globally, more than 650 species are listed under the CMS appendices and India, with over 450 species, plays a very important role in their conservation.  The bird family Muscicapidae has the highest number of migratory species.  The next highest group of migratory birds is raptors or birds of prey, such as eagles, owls, vultures and kites which are from the family Accipitridae.  The estimate of 44 migratory mammal species in India has risen to 46 after COP 13.  The Asian elephant was added to Appendix I and the urial to Appendix II.  The largest group of mammals is definitely bats belonging to the family Vespertilionidae.  Dolphins are the second highest group of mammals with nine migratory species of dolphins listed.  Seven reptiles, which include five species of turtles and the Indian gharial and salt water crocodile, are among the CMS species found in India. Flyways in India  India has three flyways (flight paths used by birds): o The Central Asian flyway, o East Asian flyway and East Asian, o Australasian flyway.  In India, their migratory species number 41, followed by ducks (38) belonging to the family Anatidae. Zoological survey of India  The Zoological Survey of India (ZSI) was launched in 1916 to promote survey, exploration, and research to enhance the knowledge regarding the flora and fauna of the British Indian Empire. It is India’s apex organization on animal taxonomy.  The Zoological Survey of India (ZSI) is a premier Indian organization in zoological research and studies.  It originated as a Zoological Section of the Indian Museum in Kolkata.  Initially, the ZSI had eight regional centres across India. Currently, there are 16 regional centres spread across the country.  The headquarters are in Kolkata.  It has been declared as a designated repository for the National Zoological Collection as per Section 39 of the National Biodiversity Act, 2002. Convention on the Conservation of Migratory Species (CMS)  It is an environmental treaty under the aegis of the United Nations Environment Programme, CMS (also referred to as the Bonn Convention) provides a global platform for the conservation and sustainable use of migratory animals and their habitats.  It is the only global convention specializing in the conservation of migratory species, their habitats and migration routes.

www.brainyias.com BrainyIAS (84594-00000)  CMS brings together the States through which migratory animals pass, the Range States, and lays the legal foundation for internationally coordinated conservation measures throughout a migratory range.  India has signed non legally binding MOU with CMS on the conservation and management of Siberian Cranes (1998), Marine Turtles (2007), Dugongs (2008) and Raptors (2016).  India has been a Party to the CMS since 1983. The Conference of Parties (COP) is the decision-making organ of this convention.

Eravikulam National Park

Relevancy  G.S.Paper 1  National Park and Wildlife Sanctuary Why in news?  The Eravikulam National Park is one of the last surviving habitat of Nilgiri Tahr, a species of mountainous goat endemic to Nilgiris. Background  Prior to 1971, the area was managed as a game preserve by the Kanan Devan Hills Produce Company.  The government of Kerala resumed control in 1971 (Kannan Devan Hill Produce (Resumption of lands) Act, 1971), and declared the Eravikulam-Rajamala Wildlife Sanctuary in 1975 to protect the habitat of the endangered Nilgiri tahr.  It became a National Park in 1978. Details  Eravikulam National Park is a national park located along the Western Ghats in the Idukki district of Kerala .  The terrain consists of high altitude grasslands interspersed with sholas.  Anamudi, 2,695 meters, the highest peak in India south of the Himalayas is inside this park.  Many perennial streams criss-cross the park. They merge to form tributaries of the Periyar river in the west and of the Cauvery River in the east. Species found in Eravikulam National Park  Twenty six species of mammals have been recorded in the park including the largest surviving population of Nilgiri tahr, estimated at about 750 individuals.  Some other animals living in Eravikulam National Park are lion-tailed macaques, gaur, Indian muntjac and sambar deer. Golden jackal, jungle cat, wild dog, dhole, leopard and tiger are the main predators.  Some little-known animals such as Nilgiri langur, stripe-necked mongoose, Indian porcupine, Nilgiri marten, small clawed otter, ruddy mongoose, and dusky palm squirrel are also found. Elephants make seasonal visits.  132 species of birds have been recorded which include endemics like black-and-orange flycatcher, Nilgiri pipit, Nilgiri wood pigeon, white bellied shortwing, Nilgiri flycatcher and Kerala laughingthrush.  Endemic butterflies confined to the shola-grass land ecosystem like the red disk bushbrown and Palni fourring are among the 101 species in the park.  Three major types of plant communities are found in the Park i.e grasslands, shrublands and forests. The terrain above 2000m is covered primarily by grasslands.

www.brainyias.com BrainyIAS (84594-00000) YOUNGLE BLUE HOLE (YBH)

Relevancy  G.S. Paper 3 Geographical features and their location  Youngle Blue Hole (YBH)- Objective questions  Significance of Blue Holes- Subjective type questions Why In news ?  8000 years old carbon was found in the world's deepest blue hole named the Youngle Blue Hole (YBH) located at the coast of Belize.  Belize is a Caribbean country located on the northeastern coast of Central America. What are blue holes?  Blue holes are different from Cenotes which are inland voids usually containing fresh graoundwater rather than seawaterBlue holes are roughly circular and steep-walled depressions.  Their water circulation is poor, and they are commonly anoxic below a certain depth; this environment is unfavorable for most sea life, but nonetheless can support large numbers of bacteria  The deep blue color is caused by the high transparency of water and bright white carbonate sand.  Blue holes formed during past ice ages, when the sea level was as low as 100–120 metres (330– 390 ft) lower than at present.At those times, these formations were targets of the same erosion from rain and chemical weathering common in all limestone-rich terrains; this ended once they were submerged at the end of the ice age.Most blue holes contain freshwater and saltwater. The halocline is the point in these blue holes where the freshwater meets the saltwater and where a corrosive reaction takes place that eats away at the rock. Few interesting facts about YBH  The hole is circular in shape and has over 300 meters across and 125 meters deep.  It is the world’s largest natural formation of its kind and is part of the Belize Barrier Reef System.  Giant stalactites, dripstone sheets, and columns can be found inside the blue hole.  The Blue Hole Monument is one of the seven wonders of Belize’s World Heritage site.  The Belize Blue Hole is part of the Belize Barrier Reef Reserve System, a UNESCO World Heritage Site. Well known Blue Holes  Dragon hole- South china sea(300.89 meters deep)  The great blue hole- Belize (300 meters)  Dean’s blue hole- Bahamas (202 meters)  Guam  The great barrier reef- Australia  The red sea- Egypt Life forms  Many different fossils have been discovered such as crocodile and tortoise fossils in blue holes.  Important types of bacterial colonies have also been found in blue holes.  Due to the conditions of a blue hole, they are forced to live off of sulfur compounds like hydrogen sulfide, which are toxic to most organisms. These special bacteria have produced many insights into the chemistry and biology of microbial life. Expeditions  Exploring blue holes requires an extremely high level of expertise in the diving field, hence the fact that very few divers have ever attempted it.  In 2009, however, a team of scientists set out to study seven of these blue holes in the Bahamas.  In 2018, another group of scientists set out to explore The Great Blue Hole of Belize using two submarines of the latest technology. One of the major scientific contributions to result from this expedition was the first 3-dimensional map of its interior

www.brainyias.com BrainyIAS (84594-00000)  The Red Sea Blue Hole located in Egypt is nicknamed the "Divers' Cemetery" because at least 40 divers have died there. Significance of YBH  YBH have depth of 300 meters and like most blue holes, it is anoxic which means depleted of dissolve oxygen below a certain depth which are not very much favorable for aquatic life.  Concentrations of carbon, usually found in deep marine holes like YBH, provides a natural laboratory to study carbon cycling

www.brainyias.com BrainyIAS (84594-00000) POLITY AND GOVERNANCE

EASE 3.0 Reforms for Public Sector Banks

Relevancy  G.S. Paper 2  For Prelims and Mains: EASE- features, need for, significance and impact. Why in news?  FM Nirmala Sitharaman launches Ease 3.0 for tech-enabled banking. This move is expected to change the customer’s experience at the Public Sector Banks (PSBs). About Ease 3.0 Reform Agenda  Ease (Enhanced Access and Service Excellence) 3.0 reform agenda aims at providing smart, tech- enabled public sector banking for aspiring India. Background  PSB Reforms EASE Agenda is a common reform agenda for PSBs aimed at institutionalizing clean and smart banking.  It was first launched in January 2018.  Subsequent edition of the program ― EASE 2.0 built on the foundation laid in EASE 1.0 and furthered the progress on reforms.  In EASE 2.0, the government had proposed- Pushing liquidity in the public sector banks, Reconstituting the management committee and possible mergers among the ideal partners in the Indian banking sector. Significance of EASE 3.0 agenda:  The Ministry has the idea of establishing paperless and digitally-enabled banking at places where people visit the most.  This launch of EASE 3.0 would change the customer’s experience at the Public Sector Banks.  The government aims to focus on digitalization in the Public Sector Banks (PSBs) among themes that include responsible banking, PSBs as Udyami Mitra, customer responsiveness, credit take-off, and deep financial inclusions.  New features that customers of public sector banks may experience under EASE 3.0 reforms agenda include facilities like: o Palm Banking for “End-to-end digital delivery of financial service”. o “Banking on Go” via EASE banking outlets at frequently visited spots like malls, stations, complexes, and campuses.  The initiative will- o enhance paperless and digital banking o support Udyami Mitra, credit take-off, Dial-a-loan and credit at a click.  EASE will increase the reach all these initiatives and improve the standards of banking sector. Performance of PSB on ease 2.0 index

www.brainyias.com BrainyIAS (84594-00000)

Outcomes  Gross NPAs reduced from Rs 96 lakh crore (14.6%) in March-2018 to Rs 7.17 lakh crore (11.3%) in December-2019;  Record recovery of Rs 2.04 lakh crore in FY19-FY20.  A sharp decline in fraud occurrence from 65% of advances during FY10-FY14 to 0.20% in FY18-FY20.  12 PSBs reporting profits in FY20.  Number of PSBs under PCA down to 4.

National Technical Textiles Mission

Relevancy  G.S. Paper 2  Objective questions- Aims of the mission  Subjective questions- Significance of the mission Why in news?  The Union Government has announced the National Technical Textile Mission with a four-year implementation period from 2020-21 to 2023-24. Key Points  It aims to position the country as a global leader in technical textiles and increase the use of technical textiles in the domestic market.  The Mission will aim at taking domestic market size to $40 billion to $50 billion by 2024.  A Mission Directorate will be operational in the Ministry of Textiles.  It will be implemented for four years starting from 2020-2021 and will have four components- o First component: It will focus on research, development and innovation with an outlay of INR 1,000 crores. . The research will be at both fibre level and application-based in geo, agro, medical, sports and mobile textiles and development of bio-degradable technical textiles. . Research activities will also focus on the development of indigenous machinery and process equipment. o Second component: It will be for the promotion and development of the market for technical textiles. www.brainyias.com BrainyIAS (84594-00000) o Third component: It will focus on export promotion so that technical textile exports from the country reach from the ₹14,000 crores to ₹20,000 crores by 2021-2022 and ensure 10% average growth every year till the Mission ends. . An export promotion council for technical textiles will be set up. o Fourth component: It will focus on education, training and skill development. . The Mission will promote technical education at higher engineering and technology levels related to technical textiles and its application areas. What is Technical Textile?  It can be defined as textile material and products manufactured primarily for their technical and performance rather than aesthetic property for their aesthetic or decorative properties  Technical textiles include textiles for automotive applications, medical textiles, geotextiles, agrotextiles, and protective clothing. Need for the mission  India imports a significant quantity of technical textiles worth $16 billion every year.  Despite 2,100 technical textile manufacturing units in the country, spread over Gujarat, Maharashtra and Tamil Nadu, India still depends on imports.  To reverse this trend (of imports) and to position India as a global leader in technical textiles, a National Technical Textiles Mission is proposed with a four-year implementation period from 2020-21 to 2023-24

Media Access Control (MAC)-binding

Relevancy  G.S.Paper 2 (Governance)  G.S. Paper 3 (Awareness in IT) Why in news?  The authorities have removed ban on social media and restored full internet access in Kashmir on 4th March 2020  Among various conditions, the order, issued by the Principal Secretary says Internet connectivity will be made available “with mac-binding”.  Internet speed in Jammu and Kashmir is still restricted to 2G. This means very slow services. What is mac-binding?  Each electronic device has its own Media Access Control (MAC) address, a hardware identification number that is unique to it. While accessing the Internet, every device is assigned an IP address.  Mac-binding essentially means binding together the MAC and IP addresses, so that all requests from that IP address are served only by the computer having that particular MAC address.  In effect, it means that if the IP address or the MAC address changes, the device can no longer access the Internet.  Also, monitoring authorities can trace the specific system from which a particular online activity was carried out. Media Access Control (MAC) address  Address that uniquely defines a hardware interface is called MAC (Media Access Control) Address.  It identifies the physical address of a computer on the internet.  It is 48 bits (6 bytes) hexadecimal address.  MAC Address of each computer on a network is unique. Internet Protocol (IP) address  The address provided to a connection in a network is called IP (Internet Protocol) address.  It identifies the connection of a computer on the internet.  IPv4 is a 32-bit (4 bytes) address, and IPv6 is a 128-bits (16 bytes) address.

www.brainyias.com BrainyIAS (84594-00000)  IP address does not uniquely identify a device on a network but, it specifies a particular connection in a network.  IP address changes each time a device is connected to the network as it is dynamically allocated to the device when it participates in the network. Only 2G permitted  The government has been relaxing Internet and phone usage in the Union Territory in phases.  It also means that although in theory, the “whitelist system” — where people could only access some websites pre-approved by the government — has been removed, some sites designed for a 4G Internet experience will hardly work. Permitted connections  The Internet can be accessed on all postpaid devices, and those using Local Area Networks (LAN).  While the postpaid SIM card holders shall continue to be provided access to the Internet, these services shall not be made available on prepaid SIM cards unless verified as per the norms applicable for postpaid connections.  Special access terminals provided by the government will continue to run.  The access/communication facilities provided by the government, viz. e-terminals/Internet kiosks apart from special arrangements for tourists, students, traders etc shall continue. Have curbs been lifted?  Not exactly. The latest order is to remain in force till March 17, unless modified earlier.  The government has been relaxing Internet and phone usage in the Union Territory in phases.  The easing of restrictions came after the Supreme Court on January 10 asked for a review of “all orders suspending Internet services forthwith”.  Stating that “an order suspending Internet services indefinitely is impermissible”, the SC ruled that “freedom of speech and expression and the freedom to practise any profession or carry on any trade, business or occupation over the medium of Internet enjoys constitutional protection” under Article 19 of the Constitution.

Virtual Currency Ban removed by SC

Relevancy  G.S.Paper 2 and 3  Objective questions: virtual currency  Subjective question: virtual and crypto currencies, RBI ban on virtual currencies Why in news?  Supreme Court has set aside a ban by the Reserve Bank of India (RBI) on banks and financial institutions from dealing with virtual currency holders and exchanges.  The court held that the ban did not pass the “proportionality” test. The test of proportionality of any action by the government, the court held, must pass the test of Article 19(1)(g), which states that all citizens of the country will have the right to practice any profession, or carry on any occupation or trade and business. Background  In a circular in 2018, the RBI had banned banks from dealing with virtual currency exchanges and individual holders on the grounds that these currencies had no underlying fiat and that it was necessary in the larger public interest to stop banks from providing any services related to these. What are virtual currencies? Are they different from crypto currencies?  There is no globally accepted definition of what exactly is virtual currency. Some agencies have called it a method of exchange of value; others have labelled it a goods item, product or commodity.  Virtual currencies are mostly created, distributed and accepted in local virtual networks.

www.brainyias.com BrainyIAS (84594-00000)  Satoshi Nakamoto, widely regarded as the founder of the modern virtual currency bitcoin and the underlying technology called blockchain, defined bitcoins as “a new electronic cash system that’s fully peer-to-peer, with no trusted third party”.  All users of such virtual currencies would be able to see and keep track of the transactions taking place.  This essentially meant there would be no central regulator for virtual currencies as they would be placed in a globally visible ledger, accessible to all the users of the technology.  Cryptocurrencies, on the other hand, have an extra layer of security, in the form of encryption algorithms.  Cryptographic methods are used to make the currency as well as the network on which they are being traded, secure.  Most crypto currencies now operate on the blockchain or distributed ledger technology, which allows everyone on the network to keep track of the transactions occurring globally. Advantages of using crypto currencies  Easy access and globally recognized  Free from the risk of identity theft  Quick and easy payments  Private and secured  Facilitate e-commerce trade  Facility of faster settlement Disadvantages of using crypto currencies  It can be difficult to understand  Problem of scaling  No way to reverse the payment  Uncertainty and volatility  Losing wallet password and losing all the data  Still not accepted by all Why did the RBI ban virtual currencies?  Owing to the lack of any underlying fiat, episodes of excessive volatility in their value, and their anonymous nature which goes against global money-laundering rules, the RBI initially flagged its concerns on trade and use of the currency.  Risks and concerns about data security and consumer protection on the one hand, and far-reaching potential impact on the effectiveness of monetary policy itself on the other hand, also had the RBI worried about virtual currencies. What did the petitioners say?  The petitioners, who included virtual currency exchanges operational in the country, told the Supreme Court that the RBI action was outside its purview as the non-fiat currency was not a currency as such.  They also argued that there had been no studies conducted either by the RBI or by the central government.  Arguing that the ban was solely on “moral grounds”, the petitioners said the RBI should have adopted a wait-and-watch approach, as taken by other regulators such as the Directorate of Enforcement or the Securities and Exchange Board of India. What did the Supreme Court rule?  Supreme Court held that the RBI directive came up short on the five-prong test to check proportionality — direct and immediate impact upon fundamental rights; the larger public interest sought to be ensured; necessity to restrict citizens’ freedom; inherent pernicious nature of the act prohibited or its capacity or tendency to be harmful to the general public; the possibility of achieving the same object by imposing a less drastic restraint.

www.brainyias.com BrainyIAS (84594-00000) Apart from domestic agencies, the RBI could not be faulted for not adopting a “light-touch” approach as adopted by other countries, the court said, adding that there could be no comparison with other countries such as the US, the UK, Japan, or Singapore as they were developed economies. What is Curative Petition?

Relevancy  G.S.Paper 2 (Governance, Constitution, Polity, Social Justice)  For Prelims: Meaning, evolution and constitutional status.  For Mains: Significance and consequences of this petition Why in news?  Nirbhaya rape and murder convict Pawan Gupta recently filed a fresh mercy plea before the President of India, hours after the Supreme Court (SC) dismissed his curative petition.  A five-judge bench of SC rejected the curative petition filed by Pawan Kumar Gupta, one of the four death row convicts in the December 2012 gangrape and murder case. What is a Curative Petition?  The concept was first evolved by the Supreme Court of India in Rupa Ashok Hurra vs. Ashok Hurra and another case (2002) on the question whether an aggrieved person is entitled to any relief against the final judgement/order of the Supreme Court, even after the dismissal of a review petition.  A curative petition is the last constitutional resort available for redressal of grievances in court after a review plea is dismissed or has been exhausted.  The curative petition is normally decided by judges in-chamber, in rare and exceptional cases, it can be given an open-court hearing.  A curative petition is a second-time review, but not a matter of right. The court will allow a curative petition only when certain requirements as laid down by it are fulfilled.  The aggrieved parties have the statutory right to appeal. Once a decision is given by the Supreme Court of India, the same may be considered final and binding.  The court used the Latin maxim “actus curiae neminem gravabit”, which means that an act of the court shall prejudice no one. It’s objectives are two folds- avoid miscarriage of justice and to prevent abuse of process. Related Constitutional provisions:  The concept of the curative petition is supported by Article 137 of the Indian Constitution.  It provides that in the matter of laws and rules made under Article 145, the Supreme Court has the power to review any judgement pronounced (or order made) by it.  Such a petition needs to be filed within 30 days from the date of judgement or order. Procedure  A curative petition may be filed after a review plea against the final conviction is dismissed.  It can be entertained if the petitioner establishes that there was a violation of the principles of natural justice, and that he was not heard by the court before passing an order.  It must be rare rather than regular.  A curative petition must be first circulated to a Bench of the three senior-most judges, and the judges who passed the concerned judgment, if available.  Only when a majority of the judges conclude that the matter needs hearing should it be listed before the same Bench.  The Bench at any stage of consideration of the curative petition can ask a senior counsel to assist it as amicus curiae (Friend of the court).  A curative petition is usually decided by judges in the chamber unless a specific request for an open- court hearing is allowed.

www.brainyias.com BrainyIAS (84594-00000) ACTS AND BILLS

Direct Tax Vivad Se Vishwas Bill 2020

Relevancy  G.S. Paper 2  For Prelims: Key features of the scheme.  For Mains: Need for and significance. Why in News?  The Union Cabinet has recently approved an amendment to the ‘Direct Tax Vivad se Vishwas Bill, 2020’ in order to widen its scope to cover litigation pending in various Debt Recovery Tribunals (DRTs).  The vivad se vishwas scheme was announced by Union Finance Minister Nirmala Sitharaman during her budget speech on February 1, 2020. The scheme aims to settle the huge number of pending direct tax cases.  The amendment also includes certain search and seizure cases where the recovery is up to INR 5 crore.  Therefore, the Bill in current form allows taxpayers to settle cases pending before the Commissioner (Appeals), Income Tax Appellate Tribunals (ITATs), Debt Recovery Tribunals (DRTs), High Courts and the Supreme Court. About Vivad Se Vishwas Scheme: The Direct Tax Vivad Se Vishwas Bill, 2020:  The Bill is aimed at resolving direct tax related disputes in a speedy manner.  It includes dispute pending in all appellate forums such as- Supreme Court, the High Courts, the Income Tax Appellate Tribunals, etc.  The amnesty scheme, at present, covers disputes pending at the level of commissioner (appeals), Income Tax Appellate Tribunals (ITAT), high courts, the Supreme Court and those in international arbitration.  It offers a complete waiver on interest and penalty to the taxpayers who pay their pending taxes by March 31.  If a taxpayer is not able to pay direct taxes by March 31st then, he will get further time till June 30th. However, in that case, he would have to pay 10 percent more on the tax. Disputes not covered  Where prosecution has been initiated.  Involve persons who have been convicted.  Involving undisclosed foreign income or assets What are the chances for this scheme to be successful?  In the last budget, Sabka Vishwas Scheme was brought in to reduce litigation in indirect taxes.  Through this government expected to raise Rs 39,500 crore from the Sabka Vishwas scheme.  But government was able to collect taxes worth Rs 90,000 crore through 1.90 lakh applications. Criticism from opposition  For the use of Hindi words in its name, arguing that this was government’s way to impose Hindi on the non-Hindi speakers.  The Bill treats honest & dishonest people equally. Significance:  The scheme aims to resolve 483,000 direct tax-related disputes pending in various appellate forums.

www.brainyias.com BrainyIAS (84594-00000) Epidemic Diseases Act, 1897

Relevancy  G.S. Paper 2  Objective question- Act and its provisions  Subjective question- Significance and impact Why in news?  Recently it was decided in a Cabinet Secretary meeting that states and Union Territories should invoke provisions of Section 2 of Epidemic Diseases Act, 1897, so that Health Ministry advisories are enforceable.  At present, at least 60 COVID-19 cases have been confirmed in India. Around the world, more than 119,100 people have been infected and nearly 4,300 have died.  The Epidemic Diseases Act is usually applied across the country for dealing with outbreaks of diseases such as dengue, swine flu, cholera etc. Background of the act  The colonial government introduced the Act to tackle the epidemic of bubonic plague that had spread in the erstwhile Bombay Presidency in the 1890s.  Using powers conferred by the Act, colonies authorities would search suspected plague cases in homes and among passengers, with forcible segregations, evacuations, and demolitions of infected places. Provisions of the 1897 Epidemic Diseases Act  The Act, aims at providing “for the better prevention of the spread of Dangerous Epidemic Diseases.”  Section 2 empowers state governments/UTs to take special measures and formulate regulations for containing the outbreak.  Section 2 of the Act states: “Power to take special measures and prescribe regulations as to dangerous epidemic disease.— o When at any time the State Government is satisfied that the State or any part thereof is visited by, or threatened with, an outbreak of any dangerous epidemic disease, the State Government, if it thinks that the ordinary provisions of the law for the time being in force are insufficient for the purpose, may take, or require or empower any person to take, such measures and, by public notice, prescribe such temporary regulations to be observed by the public or by any person or class of persons as it shall deem necessary to prevent the outbreak of such disease or the spread thereof, and may determine in what manner and by whom any expenses incurred (including compensation if any) shall be defrayed. o In particular and without prejudice to the generality of the foregoing provisions, the State Government may take measures and prescribe regulations for— . The inspection of persons travelling by railway or otherwise, and the segregation, in hospital, temporary accommodation or otherwise, of persons suspected by the inspecting officer of being infected with any such disease.”  Section 3 provides penalties for disobeying any regulation or order made under the Act. These are according to section 188 of the Indian Penal Code (Disobedience to order duly promulgated by public servant).  Section 4 gives legal protection to the implementing officers acting under the Act. Earlier Implementation  In 2018, the district collector of Gujarat’s Vadodara issued a notification under the Act declaring the Khedkarmsiya village in Waghodia taluka as cholera-affected after 31 persons complained of symptoms of the disease.  In 2015, to deal with malaria and dengue in Chandigarh, the Act was implemented and controlling officers were instructed to ensure the issuance of notices and challans of Rs 500 to offenders.

www.brainyias.com BrainyIAS (84594-00000)  In 2009, to tackle the swine flu outbreak in Pune, Section 2 powers were used to open screening centres in civic hospitals across the city, and swine flu was declared a notifiable disease.

Surrogacy Regulation Bill 2020

Relevancy  G.S. Paper 2 (Governance)  Objective question- features of the bill  Subjective questions- significance and implementation Why in news?  The Union Cabinet has recently approved the Surrogacy (Regulation) Bill, 2020.  The Cabinet incorporated all the recommendations of the Rajya Sabha Select Committee before approving the Bill.  The latest Bill is a reformed version of the draft legislation, which was passed by the Lok Sabha in August 2019.  The 2019 Bill was referred to the Select Committee. What is Surrogacy?  It occurs when a woman agrees to gestate a baby for another couple or individual.  There are two kinds of surrogacy- gestational and traditional. o In gestational surrogacy the embryo that is fertilised by the in-vitro method is implanted into the uterus of the surrogate mother who then carries and delivers the baby. . Gestational surrogacy became popular in India due to advances in reproductive medicine, a large pool of impoverished women and low cost compared to countries such as the United States, Canada and Australia. o In traditional surrogacy, the surrogate mother is impregnated with the sperm of the intended father artificially which makes her both the genetic and gestational mother.  Surrogacy can be commercial or altruistic depending upon whether the surrogate is paid money for her pregnancy. The Surrogacy (Regulation) Bill, 2020  The Surrogacy (Regulation) Bill, 2020 aims at banning commercial surrogacy and allowing altruistic surrogacy.  While commercial surrogacy will be prohibited including sale and purchase of human embryo and gametes, ethical surrogacy to Indian married couples, Indian-origin married couples and Indian single woman will be allowed on fulfillment of certain conditions.  The Bill allows a willing woman to be a surrogate mother and would benefit widows and divorced women besides infertile Indian couples. Recommendations of the Committee  Definition of “infertility” as the inability to conceive after five years of unprotected intercourse should be deleted. It is too long a period for a couple to wait for a child.  It was recommended that a surrogate mother need not be a “close relative”. Requiring the surrogate mother to be a “close relative” potentially restricts the availability of surrogate mothers, affecting people in genuine need.  Single women (widow or a divorcee) should be allowed to avail of surrogacy.  The insurance cover for a surrogate mother should be increased to 36 months from 16 months. Features of the bill  It provides for the constitution of surrogacy boards at the national as well as state levels to ensure effective regulation.

www.brainyias.com BrainyIAS (84594-00000)  It seeks to allow ethical altruistic surrogacy to the intending infertile Indian married couple between the age of 23-50 years for females and 26-55 years for males.  Only Indian couples can opt for surrogacy in the country.  It makes it mandatory for the couple to obtain a certificate of essentiality and also a certificate of eligibility before going ahead with surrogacy.  It also provides that intending couples should not abandon the child born out of surrogacy under any condition.  The newborn child shall be entitled to all rights and privileges that are available to a natural child.  The Bill also seeks to regulate the functioning of surrogacy clinics.  All surrogacy clinics in the country need to be registered by the appropriate authority in order to undertake surrogacy or its related procedures.  The Bill provides for various safeguards for surrogate mothers. One of them is insurance coverage.  It also specifies that no sex selection can be done when it comes to surrogacy. Eligibility criteria for surrogate mother To obtain a certificate of eligibility from the appropriate authority, the surrogate mother has to be:  A married woman having a child of her own;  25 to 35 years old;  A surrogate only once in her lifetime; and  Possess a certificate of medical and psychological fitness for surrogacy.  Surrogate mother cannot provide her own gametes for surrogacy. Background  In recent years, India has emerged as a surrogacy hub for couples from other countries.  There were multiple reports concerning unethical practices, exploitation of surrogate mothers, abandonment of children born out of surrogacy and rackets involving intermediaries importing human embryos and gametes prompting the need for a stringent law on surrogacy.  The Law Commission of India also highlighted the need to enact such a law. In its 208th report, the commission recommended prohibiting commercial surrogacy citing concerns over the prevalent use of surrogacy by foreigners and the lack of a proper legal framework resulting in exploitation of the surrogate mother who may have been coerced to become a surrogate due to poverty and lack of education.  Only middlemen and commercial agencies profit from the arrangement.  These women have no power to decide about their own body and life.

The Central Sanskrit Universities Bill, 2019

Relevancy  G.S. Paper 1 (Indian Heritage and Culture, History and Geography of the World and Society). Why in news?  Minister of Human Resource Development Ramesh Pokhriyal 'Nishank' introduced The Central Sanskrit Universities Bill, 2019 in Rajya Sabha on March 2. About the bill  The Bill is intended to convert India’s three deemed-to-be Sanskrit universities into Central Sanskrit Universities o Rashtriya Sanskrit Sansthan, New Delhi, o Shri Lal Bahadur Shastri Rashtriya Sanskrit Vidyapeeth, New Delhi, and o Rashtriya Sanskrit Vidyapeeth, Tirupati. Role of the universities  To disseminate and advance knowledge for the promotion of Sanskrit,

www.brainyias.com BrainyIAS (84594-00000)  To train manpower for the overall development and preservation of Sanskrit and allied subjects.  To make special provisions for integrated courses in humanities, social sciences, and science  Powers and functions  Prescribing courses of study and conducting training programmes  Granting degrees, diplomas, and certificates  Providing facilities through a distance education system  Conferring autonomous status on a college or an institution  Providing instructions for education in Sanskrit and allied subjects. University authorities  A court, which will review the policies of the university and suggest measures for its development.  An Executive Council, which will be the principal executive body.  The 15-member council will include the Vice-Chancellor appointed by the Centre, who will be the chairperson; a joint secretary of the Ministry of Human Resource Development, and two eminent academics from the field of Sanskrit or allied subjects. The council will, among other functions, create teaching and academic posts and their appointment, and manage the revenue and property of the university.  An Academic and Activity Council, which will supervise academic policies.  A Board of Studies, which will approve the subjects for research and recommend measures to improve standards of teaching. Visitor of the universities  Like at all central universities, the President of India will be the Visitor of the central Sanskrit universities. He may appoint persons to review and inspect the functioning of the University. The Executive Council may take action based on the findings of the inspection.

www.brainyias.com BrainyIAS (84594-00000) SCHEMES AND POLICIES OF GOVERNMENT

Yes Bank Crises

Relevancy  G.S.Paper 2 (Governance)  Issue and role of RBI as regulator in such crises Why in news?  Yes Bank, India’s fifth largest private sector lender, is in the middle of a crisis as the Reserve Bank of India (RBI) has taken over its affairs and placed strict limits on its operations.  Yes Bank’s financial position has been undergoing a steady decline largely due to its inability to raise capital. The bank has also experienced serious governance issues and practices in recent years. What is the issue?  Yes Bank has struggled to raise capital it needs to stay above regulatory requirements as it battles high levels of bad loans.  Yes Bank’s total exposure to shadow lenders and developers - both caught up in a funding crunch since late 2018 - was 11.5 per cent as of September 2019 What RBI has done?  RBI unveiled a reconstruction scheme that suggested a clear possibility of the State Bank of India (SBI), India’s largest bank, acquiring a 49 per cent equity stake in the private sector lender.  The acquisition cost is likely to be around Rs 11,760 crore as per the face value of Yes Bank share fixed by the RBI.  SBI had been authorised to pick other members of the consortium in the plan approved by the government Features of Yes Bank Reconstruction Scheme, 2020  Yes Bank’s authorised capital to be altered to Rs 5,000 crore  Number of equity shares reduced to 2,400 crore of face value Rs 2  Investor bank to hold 49 percent stake in the reconstructed bank. It will acquire this stake for not less than Rs 10  There is a three-year lock-in period for such investors. They also cannot reduce their holding below 26 percent  The investor bank (State Bank of India) can appoint two nominee directors  RBI may appoint additional directors to the reconstructed bank’s board  No change has been made in the rights and liabilities of the reconstructed bank  Bank’s Additional Tier 1 capital written down completely and permanently  Account holder won’t be entitled to receive any compensation from the reconstructed bank  The terms of service and remuneration of all employees of Yes Bank will continue to remain the same  The board, however, can discontinue the services of key managerial personnel  There will be no change in the offices or branch network of the reconstructed bank  However, the reconstructed bank can open new offices and branches or close down existing offices or branches

www.brainyias.com BrainyIAS (84594-00000) National Sports Development Fund

Relevancy  G.S. Paper 2  For Prelims and Mains: Features and significance. Why in news?  Under CSR initiative, Security Printing & Minting Corporation of India (SPMCIL) contributes INR 1 crore towards the National Sports Development Fund. What is NSDF?  The National Sports Development Fund (NSDF) was established in November, 1998 under Charitable Endowments Act, 1890 with the aim of promotion of sports and game in the Country.  The Purpose of creation is to impart momentum and flexibility to assisting the cause of sports.  The funds available under NSDF are used for promotion of sports in general and specific sports disciplines and individual sportspersons for achieving excellence at the national and international level in particular

Objectives of NSDF:  To administer and apply the moneys of the Fund for promotion of sports in general and specific sports disciplines and individual sports persons in particular for achieving excellence at the National and of International level;  To impart special training and coaching in relevant sports disciplines to sports persons, coaches and sports specialists;  To construct and maintain infrastructure for promotion of sports and games;  To supply sports equipments to organizations and individuals for promotion of sports and games;  To identify problems and take up research and development studies for providing support to excellence in sports;  To promote international cooperation, in particular, exchanges which may promote the development of sports;  To provide low-interest or interest-free loans for projects and activities related to any of the aforesaid objects. Management and administration of NSDF:  Council of NSDF: The Fund is managed by a Council constituted by the Central Government. Union Minister in charge of Youth Affairs and Sports is the Chairperson of the Council. Members of the Council include senior Officers of the Department of Sports, Chairman & Managing Directors of Private and Public Sector Companies / Corporations, representatives of Sports Promotion Boards, etc.

www.brainyias.com BrainyIAS (84594-00000) ECONOMY

Road Network in India

Topics covered  Road network in India  National ans state highways  International border highways  Famous highway projects  Shortcomings of road transport  Project Bharamala  State Roadways- shortcoming and issues Road network in India  National and state highways, India has a road network of nearly 5,472,144 km.  The national highways comprise less than 2% of the total road network but carry nearly 40% of goods and passenger traffic.  The national highways are the responsibility of the union government, which has constituted the National Highways Authority of India (NHAI) for the development of national highways.  The NHAI has adopted the built-operate-transfer (BOT) model for the development of national highways.  Under this system, a private-sector player is required to build and operate a national highway, collect toll fee to recover expenses, and then transfer the national highway for supervision under the central government.  Toll fee is calculated on the basis of fuel savings made by users by using developed national highway.  The following table shows the total length of India's road network by type of road as on 31 March 2015.

Authority responsible Length (km) Share of network Road classification length

National Highways Ministry of Road Transport and Highways 97,991 1.79%

Public Works Department of state/union State Highways 167,109 3.05% territory Public Works Department of state/union Other PWD roads 1,101,178 20.12% territory Panchayats and government schemes such Rural roads 3,337,255 61% as Pradhan Mantri Gram Sadak Yojana

Urban roads Local governments and municipalities 467,106 8.54%

Various central/state public-sector undertakings and agencies such as Steel Project roads Authority of India Limited, 301,505 5.50% Bharat Heavy Electricals Limited, Border Roads Organisation, etc.

www.brainyias.com BrainyIAS (84594-00000) Total 5,472,144 100% National Highways  Responsibility of National highway authority of India (NHAI)  Constitutes 2 % of all roads & carry 40 % of total road traffic  Funded by cess on petrol & high speed diesel (From central road fund in Public accounts of India)  UP → Highest length of National Highways  Some important highways are: o NH2 Delhi – Kolkata o NH6 Surat – Kolkata o NH4 Mumbai – Chennai o NH7 Varanasi – Cape – comrin (Kanyakumari) o NH5 Jharkhand – Chennai o NH3 Agra – Mumbai o NH8 Delhi – Mumbai

International Border Highways  Responsibility lies with Border road organization (BRO)  Connects Indian borders with neighboring countries  Financed by World Bank  Some important international border highways in India are: o NH1 INDO – PAK BORDER (DELHI, HARYANA, PUNJAB) o NH22 INDO – CHINA BORDER ( HARYANA, PUNJAB, HIMACHAL PRADESH) o NH35 INDO – BANGLADESH BORDER (WB) o NH39 INDO – BHUTAN BORDER (ASSAM, NAGALAND, MANIPUR) o NH28A INDO – NEPAL BORDER (BIHAR) Famous Highway Projects  Golden Quadrilateral → 6 lane highway project connecting Delhi – Mumbai – Kolkata – Chennai  North – South Corridor → Linking Srinagar – Kanyakumari  East – West Corridor → Linking Silchar (Assam) – Porbandar  Mumbai – Pune expressway (1st expressway of country) is not under NHAI as it was built by state government Project Bharatmala  A road built along India’s vast west-to east land border, approx. 5300km, from Gujarat to Mizoram  Linking it to a road network in coastal states, from Maharashtra to Bengal  This is a road network that will, as it were, garland the territory of India  The Bharat Mala plan has a strong strategic component  It’s India’s attempted answer to improve reach and connectivity in border areas, right across a large part of which lies China’s impressive road infrastructure Rashtriya Rajmarg Zila Sanjoyokta Pariyojna  Roads will be developed to connect 100 district HQs across the country Setubharatam  Govt to build 210 rails over bridges in the next two years and about 400-500 bridges would be built as standalone projects. State Highways and District Roads  State highways and district roads account for 15% of the total roads.  State highways usually connect district headquarters.  District roads are remaining roads (other than state highways) within a district connecting urban areas in a district.  The construction and maintenance of these roads are the responsibility of state governments. www.brainyias.com BrainyIAS (84594-00000) Rural Roads  Rural roads are constructed to link villages of our country.  These roads are in poor shape, affecting the rural population's quality of life and Indian farmer's ability to transfer produce to market post-harvest.  Over 30% of Indian farmers' harvest gets spoiled post-harvest because of the poor infrastructure.  For the development of these rural roads, the Pradhan Mantri Gram Sadak Yojana (or Prime Minister Rural Roads Scheme) was launched in December 2000 by the Indian government to provide connectivity to unconnected rural habitations.  The scheme envisions that these roads will be constructed and maintained by the village panchayats.  So far, the programme has produced limited results and no lasting change. Shortcomings of Road Transport  Inadequate road safety measures such as unmanned crossings, lack of pavements on the sides of roads, lack of traffic signals, poor condition of roads, etc.  About 15% of national highways and 75% of state highways are still single-lane roads.  Poor quality of rural roads.  Lack of flyovers, bridges, and many crossings between roads. State Government Presence in Bus Transport  Bus transportation is regulated under respective state laws. Bus services are correspondingly run by state governments.  However, the private sector has been allowed to run bus services. Consequently, the private sector has significant presence in bus transport. Arguments in favour of state government presence in bus transport  State roadways services are available at low cost.  State-run bus services (state roadways) provide services to even those routes that are commercially unviable.  State roadways bring in advantages of large-scale operations. State-run bus services provide facilities such as bus stands, bus stops, etc.  State roadways provide employment to a large number of staff. Problems faced by state roadways Private bus services are making huge profits. However, state roadways are loss making on account of the following reasons:  Services on uneconomic routes  Extensive pilferage of stores  Low level of fares  Poor maintenance of buses  Huge cost borne due to the provision of large-scale facilities such as bus stands

Inequality And Poverty

Topics covered  Kuznets Curve  Sustainable Development And Millennium Development Goals 2019  Economy Noble Prize  Social Economic And Caste Census 2011  N.C.Sexena Committe  S.R.Hashim Committee  Pronab Sen Committee Kuznets Curve

www.brainyias.com BrainyIAS (84594-00000)  As per the Environmental Kuznets Curve, the environment of an country degrades in the initial stages of industrial growth.  After a certain level of economic growth, the society begins to improve its relationship with the environment and levels of environmental degradation reduces.  The pollution reduces with greater protection of the environment, technological improvements, diversification of the economy from manufacturing to services, and increasing scarcity and prices of environmental resources, leading to lower consumption.  However, the opponents criticize this model. It is not certain that after a certain level of economic growth, the relation of society with the environment will improve or not.  It can be understood with the following curve:

Figure: Environmental Kuznets Curve

Sustainable Development And Millennium Development Goals 2019  The Sustainable Development Goals agenda was accepted by all members of the United Nations in 2012 at the Rio De Janeiro Council Meet with an aim to promote a healthy and developed future of the planet and its people.  It was in 2015 when the Sustainable Development Goals were implemented after a successful fifteen-year plan of development called the Millennium Development Goals. What are Sustainable Development Goals (SDGs)?  The Sustainable Development Goals (SDGs) were born at the United Nations Conference on Sustainable Development in Rio de Janeiro in 2012.  The SDGs are a bold commitment to finish what the Millennium Development Goals (MDGs) started, and tackle some of the more pressing challenges.  The objective was to produce a set of universal goals that meet the urgent environmental, political and economic challenges facing the world. The 17 goals under the Sustainable Development Goals are: 1. End hunger, achieve food security and improved nutrition and promote sustainable agriculture 2. End poverty in all its forms everywhere 3. Make cities and human settlements inclusive, safe, resilient and sustainable 4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

www.brainyias.com BrainyIAS (84594-00000) 5. Ensure healthy lives and promote well being for all at all stages 6. Built resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation 7. Ensure availability and sustainable management of water and sanitation for all 8. Ensure sustainable consumption and production pattern 9. Achieve gender equality and empower all women and girls 10. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all 11. Reduce inequalities within and among countries 12. Strengthen the means of implementation and revitalise the global partnership for sustainable development 13. Ensure access to affordable, reliable, sustainable and modern energy for all 14. Conserve and sustainably use the oceans, seas and marine resources 15. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels 16. Take urgent actions to combat climate change and its impact 17. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably managed forests, combat desertification and halt and reverse land degradation and halt biodiversity loss India’s record in implementing Sustainable Development Goals  National Food Security Act is being enforced to provide subsidized food grains.  Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) is being implemented to provide jobs to unskilled labourers and improve their living standards.  Renewable energy generation targets have been set at 175 GW by 2022 to exploit solar energy, wind energy and other such renewable sources of energy efficiency and reduce the dependence on fossil fuels.  The government of India aims to make India open defecation free by the year 2019 under its flagship programme Swachh Bharat Abhiyan.  India has expressed its intent to combat climate change by ratifying the Paris Agreement.  Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Heritage City Development and Augmentation Yojana (HRIDAY) schemes have been launched for improving the infrastructure aspects. Millennium Development Goals  The United Nations in September 2000 made all its members follow a Millennium Development goal that had a series of eight time-bound targets that were supposed to be attained within a time period of fifteen years.  The eight targets under the Millennium Development Goal are as mentioned below: o To achieve universal primary education o To eradicate extreme poverty and hunger o To reduce child mortality o To promote gender equality and empower women o To develop a global partnership for development o To combat HIV/AIDS, malaria and other diseases o To improve maternal health o To ensure environmental sustainability  Once the 15-year target of MDG was attained, the responsibility for the development based on the 17 targets based Sustainable Development Goal.  In 2015, a final report was handed over to the UN, stating the positive impact of the Millennium Development goal based on the eight factors and also on the maternal mortality rate.

Nobel Prize in Economic Sciences 2019  The Sveriges Riksbank Prize in Economic Sciences for 2019 was jointly awarded to Abhijit Banerjee, Esther Duflo, and Michael Kremer, for ‘their experimental approach to alleviating global poverty.’  This is only the second time a woman has bagged the prestigious award, popularly called the Economics Nobel.

www.brainyias.com BrainyIAS (84594-00000)  It is the first time for a husband-wife duo to win the Economics Nobel - Mr. Banerjee is married to Ms. Duflo.  The effort was to understand the impact of interventions to achieve desirable outcomes.  The experiment-based approach of these laureates has transformed development economics and turned it into a flourishing field of research.  They have worked and are still working to understand and alleviate poverty.  The three adopted an evidence-based approach to apply theory to real-life situations using randomised trials and assessing the outcomes.  The approach is derived from the concept of clinical trials in the pharmaceuticals industry. What experiments were done?  The two MIT economists decided to give a bag of pulses free to women who brought their babies for vaccination.  Rajasthan experiment - Despite immunisation being free, women were not bringing in their children for the vaccination shot.  Mumbai and Vadodara experiment - With this, they wanted to understand the learning outcomes in the field of education.  Word soon spread and the rate of immunisation shot up in the region.  Through field studies, Mr. Banerjee and Ms. Duflo established that the problem is that teaching is not adapted to the needs of the students.  They wanted to know whether it is the lack of access to textbooks or hunger that caused poor learning outcomes.  One of their studies resulted in benefiting 5 million children in India through programmes of remedial tutoring in schools.  Learning outcomes improved in schools that were provided with teaching assistants to support students with special needs. Social Economic And Caste Census (2011)  It was the first-ever caste-based census since 1931 census of India.  In June 2011, the Socio-Economic Caste Census (SECC) was conducted through a comprehensive door to door survey across India for generating data on a large number of social and economic indicators relating to households in both rural and urban areas  Data was collected on manual scavenging and Transgender count in India.  It was the first paperless census in India, conducted on handheld electronic devices, in 640 districts.  The first caste census was conducted in the year 1881 in India  Socio-Economic Caste Census 2011 was not conducted under the 1948 Census of India Act as Disclosure of information was not mandatory and Sharing of details was voluntary for the citizens.  SECC 2011 census was conducted in all states and UT’s.  Previous to Socio-Economic Caste Census 2011, there were 3 other censuses which were used to collect data on households Below Poverty Line. o 1992 census o 1997 census o 2002 census  The results of SECC 2011 were released in 2015.  SECC 2011 was first launched from Sankhola village of Hazemara Block in West Tripura District.  Government of India is planning to use the data collected from Socio-Economic Caste Census 2011, to implement their Direct Benefit Transfer (DBT) schemes and to expand Pradhan Mantri Jan Dhan Yojana, Aadhar and Mobile Governance (JAM).  Rural Development Ministry is planning to use the SECC 2011 data in the following programmes. o National Food Security Act o Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) o Deen Dayal Upadhyaya Grameen Kaushalya Yojana o Which were the Ministries responsible for conducting Socio-Economic Caste Census (SECC) 2011?

www.brainyias.com BrainyIAS (84594-00000) o Ministry of Housing and Urban Poverty Alleviation – Urban Areas. o Ministry of Rural Development – Rural Areas o Ministry of Home Affairs: Registrar General and Census Commissioner of India – responsible for the caste census. Caste Census 2011 – Major Findings  10.74 crore households are considered deprived.  The number of households in India – 24.49 Crore, 17.97 crores live in villages.  Around 13% of families in villages live in houses of 1 room.  Approximately 30% of households in rural areas are landless and they majorly get their income from manual labour.  Kerala has the highest number of people with mental illness.  SECC 2011 recorded a higher number of illiterates in than the numbers recorded in 2011 Census of India.  1.80 Lakh households are engaged in manual scavenging for livelihood. Maharashtra has the highest number of manual scavengers.  48% of the rural population is female.  56% of rural households lack agricultural land  35% of urban households are poor.  60% of rural households are deprived or poor. Committee formed to design Below Poverty Line (BPL) census  Dr N C Saxena committee (for rural areas) and SR Hashim committee (for urban areas) was constituted to suggest the design of the new Below Poverty Line (BPL) census. They recommended a three-fold classification of households. o Excluded Households: these would be identified by assets owned and income and would not be eligible for welfare benefits of the government. o Automatically included Households: these would be the households facing extreme social destitution and would automatically be included for the welfare benefits of the government. o Other Households: these households would be eligible for graded benefits decided on the basis of multiple deprivation indicators. N.C.Sexena Committe  Dr. N.C. Saxena Committee was set up by the Ministry of Rural Development to advise it on the suitable methodology for BPL Census and not for estimation of poverty.  However, in the Report submitted by the Expert Group on 21st August 2009 it is mentioned that the percentage of people entitled to BPL status should be revised upwards to at least 50%.  The recommendations of the Expert Group and other alternative methodologies are being tested through a pilot socio-economic survey and a Participatory Rural Appraisal (PRA) exercise in order to finalize the methodology for the final BPL Census.  The committee has suggested proportionate increase in the state level poverty estimates also. S.R.Hashim Committee  The Planning Commission constituted an Expert Group under the Chairmanship of Professor S.R.Hashim to recommend the detailed methodology for identification of families living Below Poverty Line in urban areas.  The Hashim Committee submitted its final report on 24th December, 2012 to the Planning Commission.  In its report, the Hashim Committee recommended three stage identification process to identify the families living Below Poverty Line in urban areas which include automatic exclusion, automatic inclusion and scoring index of the remaining urban families in this order.  The methodology recommended mainly emphasizes on capturing residential, social and occupational vulnerabilities.  This was stated by Dr. (Ms.) Girija Vyas, Union Minister of Housing & Urban Poverty Alleviation (HUPA), in a written reply to a question in the Lok Sabha today. Pronab Sen Committee

www.brainyias.com BrainyIAS (84594-00000)  The high-level panel under Pronab Sen will review and develop the country’s surveys on employment, industry and services sector amid criticism of official statistics.  It will review the existing framework of data sources, indicators and definitions of index of industrial production, periodic labour force survey, time use survey, economic census and unorganised sector statistics, among others.  The SCES will subsume in it the four standing committees on labour force statistics, industrial statistics, services sector and unincorporated sector enterprises. Earlier, expressing concern over “political interference” in influencing statistical data in India, as many as 108 economists and social scientists had called for restoration of “institutional independence” and integrity to the statistical organisations. Unemployment in India

Topics covered:  What is unemployment and its types  Phillips curve  Measurement of Unemployment in India  Causes and impact of Unemployment  Steps Taken by Government

What is unemployment?  Unemployment is often used as a measure of the health of the economy.  Unemployment is a phenomenon that occurs when a person who is actively searching for employment is unable to find work.  The most frequently used measure of unemployment is the unemployment rate, which is the number of unemployed people divided by the number of people in the labour force. Types of Unemployment Disequilibrium unemployment: At the equilibrium level, the wage rate is such that the demand for labour matches with the supply of labour. When the wage rates are pushed above the equilibrium levels due to the government-imposed minimum wage requirements or interference of trade unions, the demand for labour reduces and the supply for labour increases. This leads to a state of disequilibrium or mismatch between the demand and supply of labour. This type of unemployment is also called classical or real wage unemployment.

www.brainyias.com BrainyIAS (84594-00000) Frictional unemployment or search unemployment: Frictional unemployment is the unemployment that results from the time spent between jobs when a worker is searching for or transitioning from one job to another. It is also called search unemployment. Structural unemployment: Structural unemployment is a long-lasting form of unemployment caused by fundamental shifts in an economy and exacerbated by extraneous factors such as technology, competition, and government policy. Reasons why structural unemployment occurs include workers' lack of requisite job skills or that workers live too far from regions where jobs are available and cannot move closer. Jobs are available, but there is a serious mismatch between what employers need and what workers can offer. Cyclical unemployment: Cyclical unemployment comes around due to the business cycle itself. Cyclical unemployment rises during recessionary periods and declines during periods of economic growth. Seasonal unemployment: It is a type of unemployment that is expected to occur at certain parts of the year. For instance, amusement parks may experience seasonal unemployment because during months of summer less people visit these parks. Disguised unemployment: Disguised unemployment exists where part of the labour force is either left without work or is working in a redundant manner, where worker productivity is essentially zero. In other words, disguised unemployment is a kind of unemployment in which some people look like being employed but are actually not employed fully. Disguised unemployment is high in Indian agriculture. Underemployment: A situation in which a worker is employed but not in the desired capacity, whether in terms of compensation, hours, or level of skill and experience. The underemployed are often unsatisfied and continue to look for suitable jobs. Phillips Curve  The Phillips curve is an economic concept developed by A. W. Phillips. This curve shows that inflation and unemployment have a stable and inverse relationship. The theory states that inflation comes with economic growth, which in turn should lead to more jobs and less unemployment.   However, the original concept has been somewhat disproven empirically due to the occurrence of stagflation, when there is high levels of both inflation and unemployment. Measurement of Unemployment in India  National Sample Survey Office (NSSO), an organization under Ministry of Statistics and Programme Implementation (MoSPI) measures unemployment in India on following approaches:  Daily Status Approach: Under this approach, unemployment status of a person is measured for each day in a reference week. A person having no gainful work even for 1 hour in a day is described as unemployed for that day.  Usual Status Approach: This approach estimates only those persons as unemployed who had no gainful work for a major time during the 365 days preceding the date of survey.  Weekly Status Approach: This approach records only those persons as unemployed who did not have gainful work even for an hour on any day of the week preceding the date of survey.  Unemployment stats (based on findings from CMIE’s latest data): o The unemployment rate in India rose to 7.2 percent in February 2019, the highest since September 2016, and up from 5.9 percent in February 2018. www.brainyias.com BrainyIAS (84594-00000) o The total number of employed persons in February 2019 is estimated at 400 million against 406 million in the year-ago period and 407.5 million employed in February 2017. o The labour participation rate fell from 43.2% in January 2019 to 42.7% in February 2019. o Labour Participation Rate defines that section of working population in the economy which is currently employed or seeking employment. Causes of Unemployment  Slow economic growth: A sluggish economic is a state of an economy in which growth is slow, flat or declining. The term can refer to the economy as a whole or a component of the economy, such as weak housing starts, Extended periods of sluggishness can easily lead into a recession, so a sluggish economy is often considered a leading indicator of a potentially steeper downturn.  Small holding : Majorly of the agriculture hold small holding i.e 1 or 2 acres. Therefore they cannot employ others.  Rapid rate of population growth : At the current rate of population growth, world population by 2000 is expected to reach 7 billion or more, with developing countries accounting for some 5.4 billion, and economically advanced nations accounting for 1.6 billion. Other serious consequences of rapid population growth are maternal death and illness, and physical and mental retardation of children of very poor families.  Illiteracy : Illiteracy is the one of the main cause of unemployment. They have to go to hard work. Majority of illiterate labourer remain unemployed hall of the year. Inappropriate educational system: The Indian universities are producing graduates. The system of education does not make the educated fit or employment in industry, Trade, etc.  Use of inappropriate technology : In our Development plans more attention has been given to capital intensive rather than labour intensive technology Which provide more employment.  Government Policies : Government policies showed partiality throughout the public sector. They public enterprises have become monopoly. The private sectors are logging behind and there is failure of employment facilities.  Backwardness in agriculture: The backward nature of our farming results in unemployment because agriculture cannot provide employment opportunities to rural population.  Lack of funds to invest : We have no funds to invest and to increase our economic growth, which results in unemployment.  Nehru’s mixed economy : Nehru adopted mixed economy in India and also adopted sociology which results in speedy growth of science and technology Which results in unemployment.  Immobility of labour: People are reluctant to live their native place and relatives which results in unemployment.  Child labour : Even though child labours are prohibited to work in agriculture, hotels factories etc. They are working on law wages which results unemployment to youth.  Seasonal nature of agricultural: Agricultural labourer do not have work over the year.  Modernization : Some industries have been trying to reduce cost of production by introducing a measure of modernization.Which results in retrenchment and unemployment.  Failure in utilization of natural resources: The natural resources are not property used.  Science and Technology : Now a day’s science and technology has been tremendously developed. It introduced many new instrument appliances etc. which results in unemployment.  High rate of taxes: The gout imposers taxes an income, Wealth, Excise , custom etc. at a very high rate. Therefore manufactures employ minimum employers and even the citizens cannot start private businesses due to heavy taxes.  Unemployment in profession : There are several doctors, lawyers, CA’s, engineers etc are remained unemployed due to having no own financial capacity to start their professions.  Inappropriate Jobs : Several lakh of people are working in jobs not suitable to their qualification, status , wages etc .  Inadequate planning : The government failed to formulate efficient and adequate planning’s of removal of unemployment.

www.brainyias.com BrainyIAS (84594-00000)  Work of trade unions : Trade union of workers call for strikes, the owners declare lockout and factories are closed for number of days, which results in unemployment. Consequences Of Unemployment:  Frustrated young persons are liable to be exploited for unsocial purposes and indulge in anti-social activities  It involves wastage or under utilization of valuable human resources.  Mass illiteracy and ill health are the result of unemployment.  Fall off standard of living and increase of poverty among public.  The time and energies of a large mass of people are not gainfully used.  Backwardness and under development of unemployed people. Steps Taken by Government  Training of Rural Youth for Self-Employment (TRYSEM): This scheme was started in 1979 with objective to help unemployed rural youth between the age of 18 and 35 years to acquire skills for self-employment. Priority was given to SC/ST Youth and Women.  Integrated Rural Development Programme (IRDP) was launched in 1980 to create full employment opportunities in rural areas.  RSETI/RUDSETI: With the aim of mitigating the unemployment problem among the youth, a new initiative was tried jointly by Sri Dharmasthala Manjunatheshwara Educational Trust, Syndicate Bank and Canara Bank in 1982 which was the setting up of the “RURAL DEVELOPMENT AND SELF EMPLOYMENT TRAINING INSTITUTE” with its acronym RUDSETI near Dharmasthala in Karnataka. Rural Self Employment Training Institutes/ RSETIs are now managed by Banks with active co-operation from the Government of India and State Government.  By merging the two erstwhile wage employment programme – National Rural Employment programme (NREP) and Rural Landless Employment Guarantee Programme (RLEGP) the Jawahar Rozgar Yojana (JRY) was started with effect from April, 1, 1989 on 80:20 cost sharing basis between the centre and the States.  Pradhan Mantri Kaushal Vikas Yojana (PMKVY), launched in 2015 has an objective of enabling a large number of Indian youth to take up industry-relevant skill training that will help them in securing a better livelihood.  Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA): It is an employment scheme that was launched in 2005 to provide social security by guaranteeing a minimum of 100 days paid work per year to all the families whose adult members opt for unskilled labour-intensive work. This act provides Right to Work to people.  Stand Up India Scheme, launched in 2016 aims to facilitate bank loans between Rs 10 lakh and Rs. 1 crore to at least one SC or ST borrower and at least one women borrower per bank branch for setting up a greenfield enterprise.  Start Up India Scheme, launched in 2016 aims at developing an ecosystem that promotes and nurtures entrepreneurship across the country.

Poverty Estimates in India

Topics covered  Defining Inclusive growth  Lorenz Curve  Poverty estimation in India  Y.K.Alagh committee  Lakdwala committee (1993)  Tendulkar committee (2005)  Rangarajan committee (2012)  Phillips curve

www.brainyias.com BrainyIAS (84594-00000) What is inclusive growth?  Inclusive growth basically means making sure everyone is included in growth, regardless of their economic class, gender, sex, disability, and religion.  It is that economic growth which benefits all the sections of society.  The inclusive growth approach takes on long-term perspective, and the focus is on productive employment rather than a mere income redistribution among poor people.  With liberalization, the benefits of economic growth have been cornered by a few sections such as rich and middle class. Lorenz Curve  The Lorenz curve is a graphical representation of wealth distribution developed by American economist Max Lorenz in 1905.  On the graph, the straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.  The difference between the straight line and the curved line is the amount of inequality of wealth distribution.

Gini Coefficient  The Gini coefficient is calculated as follows:

Area between Line of Equality and Lorenz Curve Gini coefficient = Area under Line of Equality

 The value of Gini coefficient ranges from 0 to 1.  Tracking the Gini coefficient can demonstrate wealth trends in particular nations over time. Poverty Estimates In India  In 1993, the Planning Commission constituted a task force for the calculation of poverty estimates in India, chaired by Lakdawala. The committee made the following suggestions: o State-specific poverty lines should be constructed and updated using the Consumer Price Index of industrial workers in urban areas and Consumer Price Index of agricultural labourers in rural areas. o Consumption expenditure to be calculated based on calorie consumption, i.e. 2400 in rural areas and 2100 in urban areas. Background of Poverty Estimation in india  The history of poverty estimation in India goes back to 19th century when Dadabhai Naoroji’s efforts and careful study led him to conclude subsistence based poverty line at 1867-68 prices, though he never used the word “poverty line”.  It was based on the cost of a subsistence diet consisting of ‘rice or flour, dhal, mutton, vegetables, ghee, vegetable oil and salt’.  According to him, subsistence was what is necessary for the bare wants of a human being, to keep him in ordinary good health and decency.  His studies included the scale of diet and he came to a conclusion on the subsistence costs based poverty line that varied from Rs.16 to Rs.35 per capita per year in various regions of India.  At that time, per capita income of England was at Rs. 450.  However, since necessities in India cost only about one-third as compared to England at that time, the real difference in terms of purchasing power parity was not fifteen times but only five times. Y K Alagh Committee(1979)

www.brainyias.com BrainyIAS (84594-00000)  Till 1979, the approach to estimate poverty was traditional i.e. lack of income.  It was later decided to measure poverty precisely as starvation i.e. in terms of how much people eat.  This approach was first of all adopted by the YK Alagh Committee’s recommendation in 1979 whereby, the people consuming less than 2100 calories in the urban areas or less than 2400 calories in the rural areas are poor  The logic behind the discrimination between rural and urban areas was that the rural people do more physical work.  Moreover, an implicit assumption was that the states would take care of the health and education of the people. Thus, YK Alagh eventually defined the first poverty line in India. Lakdwala committee (1993)  Task Force chaired by DT Lakdawala, based on the assumption that the basket of goods and services used to calculate Consumer Price Index-Industrial Workers (CPI-IW) and Consumer Price Index- Agricultural Labourers (CPI-AL) reflect the consumption patterns of the poor, made the following suggestions: o Consumption expenditure should be calculated based on calorie consumption as earlier. o State specific poverty lines should be constructed and these should be updated using the CPI-IW in urban areas and CPI-AL in rural areas. o Discontinuation of scaling of poverty estimates based on National Accounts Statistics.

Tendulkar Committee (2005)  The Tendulkar Committee, headed by Suresh Tendulkar, was constituted by the Planning Commission to address three shortcomings in the previous methods of calculating poverty:  Obsolete Consumption Pattern: Consumption patterns were linked to the 1973-74 poverty line baskets (PLBs) of goods and services, whereas there were significant changes in the consumption patterns of the poor since that time, which were not reflected in the poverty estimates.  Inflation Adjustment: There were issues with the adjustment of prices for inflation, both spatially (across regions) and temporally (across time).  Health and Education Expenditure: Earlier poverty lines assumed that health and education would be provided by the state and formulated poverty lines accordingly. Recommendations  Shift from Calorie Consumption based Poverty Estimation: It based its calculations on the consumption of the items like cereal, pulses, milk, edible oil, non-vegetarian items, vegetables, fresh fruits, dry fruits, sugar, salt & spices, other food, intoxicants, fuel, clothing, footwear, education, medical (non-institutional and institutional), entertainment, personal & toilet goods.  Private Expenditure: Incorporation of private expenditure on health and education while estimating poverty.  Uniform Poverty line Basket: Unlike Alagh committee (which relied on separate PLB for rural and urban areas), Tendulkar Committee computed new poverty lines for rural and urban areas of each state based on the uniform poverty line basket and found that all India poverty line (2004-05) was: o INR 446.68 per capita per month in rural areas o INR 578.80 per capita per month in urban areas  Mixed Reference Period: The Committee recommended using Mixed Reference Period based estimates, as opposed to Uniform Reference Period based estimates that were used in earlier methods for estimating poverty.  Price Adjustment Procedure: The Committee also recommended a new method of updating poverty lines, adjusting for changes in prices and patterns of consumption (to correct spatial and temporal issues with price adjustment), using the consumption basket of people close to the poverty line. Rangarajan Committee (2012)  The committee was set up in the backdrop of national outrage over the Planning Commission’s suggested poverty line of INR 22/- a day for rural areas.  The committee intended to review international poverty estimation methods and indicate whether based on these, a particular method for empirical poverty estimation can be developed in India.

www.brainyias.com BrainyIAS (84594-00000)  The committee aims to recommend how these estimates of poverty can be linked to eligibility and entitlements under the various schemes of the Government of India. Recommendations  Methodology Used: The Rangarajan committee estimation is based on an independent large survey of households by Center for Monitoring Indian Economy (CMIE). It has also used different methodology wherein a household is considered poor if it is unable to save.  Normative and Behavioural level: Poverty line should be based on: o Normative level of adequate nutrition: Ideal and desirable level of nutrition. o Behavioral determination of non-food expenses: What people use or consume as per general behavior.  Nutritional Requirement: For normative levels of adequate nutrition – average requirements of calories, proteins and fats based on Indian Council of Medical Research (ICMR) norms, differentiated by age, gender and activity for all-India rural and urban regions is considered: o Calories: 2090 kcal in urban areas and 2155 Kcal in rural areas. o Protein: For rural areas 48 gm and for urban areas 50 gm. o Fat: For urban areas 28 gm and for rural areas 26 gm.  Poverty Threshold: Persons spending below ₹47 a day in cities and ₹32 in villages be considered poor. Based on this methodology, Rangarajan committee estimated that the number of poor were 19% higher in rural areas and 41% more in urban areas than what was estimated using Tendulkar committee formula.  Modified Mixed reference period: Instead of Mixed reference Period (MRP) it recommended Modified Mixed Reference Period (MMRP) in which reference periods for different items were taken as: o 365-days for clothing, footwear, education, institutional medical care, and durable goods. o 7-days for edible oil, egg, fish and meat, vegetables, fruits, spices, beverages, refreshments, processed food, pan, tobacco and intoxicants o 30-days for the remaining food items, fuel and light, miscellaneous goods and services including non-institutional medical; rents and taxes.

Gross Domestic Product (GDP) of India

Topics covered  Background of India’s GDP  Method to calculate GDP  GDP, GVA and PPP  Difference between nominal and real GDP  Rebasing the GDP  Economic growth rate and base year Definition of GDP  Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period.  Though GDP is usually calculated on an annual basis, it can be calculated with reference to any time frame. Background of India’s GDP  In January 2015, the government moved to a new base year of 2011-12 from the earlier base year of 2004-05 for national accounts.  In the new series, the Central Statistics Office (CSO) did away with Gross Domestic Product (GDP) at factor cost and adopted the international practice of valuing industry-wise estimates as gross value added (GVA) at basic prices.  With the move to the new base year, the growth rate of the economy for 2013-14 was estimated at 6.9%; it was 4.7% on the 2004-05 base.  Currently, Indian Economy growth rate is 6.6% (2017)

www.brainyias.com BrainyIAS (84594-00000) Calculation of GDP There are three primary methods by which GDP can be determined. 1. The expenditure approach measures the total value of all the products used in developing a finished product for sale. For instance, a finished car's contribution to a nation's GDP would be measured by the total cost of materials and services that went into the car's construction. 2. The income approach, is an intermediary between the two above-mentioned approaches. It measures GDP by totalling all the domestic income earned by the private as well as government sectors. 3. The production approach is something like the reverse of the expenditure approach. Instead of exclusively measuring the input costs that feed the economic activity, the production approach estimates the total value of economic output and deducts the costs of goods that are consumed in the process, like those of materials and services. Rebasing the GDP of India  This is done by the government often to ensure that the GDP represents the true picture of the economy in terms of structural changes, the importance of the various sectors contribution of agriculture sector etc.  The Present rebasing has been done by CSO taking into consideration the recommendations given the SNA (System of National Accounts) published by the UN in 2008. Old vs New method of calculation  In the older system, very few mutual funds and NBFCs were considered for considering the financial activity. In the new methodology, the coverage has been expanded by including stockbrokers, asset management funds, pension funds, stock exchanges etc  In the older system, Index of Industrial Production (IIP) was used to measure manufacturing and trading activity. This accounted for the volume changes but not value changes. In the newer methodology, we use the concept of GVA – Gross Value Added, which measures the value addition done to the economy.  In the older system, farm produce was taken as a proxy for the calculation of agricultural income. The new methodology has widened the scope for calculating value addition in the agricultural sector.  In the older system, GDP was first estimated by using the Index of Industrial Production (IIP) data and then updated using the ASI data (Annual Survey of Industries). ASI accounted only for those firms which were registered under the Factories Act. In the newer system, data from MCA21 is used (MCA 21 is an e- governance initiative of Ministry of Corporate Affairs, launched in 2006, it allows the firms/companies to electronically file their financial results. Under this data from more than 5,00,000 firms is collected)  In the older system, the trading income data was used from the NSSO’s 1999 establishment survey against this new series uses the 2011-12 survey. What Is Purchasing Power Parity?  Purchasing power parity (PPP) is defined as the number of units of a country's currency required to buy the same amount of goods and services in the domestic market as one dollar would buy in the US.  PPP is an attempt to work out how much currency will be needed to buy the same quantity of goods and services in different countries.  Often exchange rates do not actually reflect different living costs because some goods are not easily traded. Difference Between Nominal GDP and Real GDP  When the GDP is estimated at current prices, it exhibits Nominal GDP, whereas Real GDP is when the estimation is made at constant prices.  Nominal GDP is the monetary value of the economic output produced during the current year at current year prices. The point to be noted is that the prices of the current year are taken into consideration without adjusting for inflation. o Current production of goods and services x Current prices = Nominal GDP  GDP measurement is done at fixed prices, i.e. at the prices which were prevalent at some point of time in the past, known as base year price or reference price.  It reflects the economic output at constant prices.

www.brainyias.com BrainyIAS (84594-00000)  Real GDP is considered as a true indicator of country's economic growth because it exclusively considers the rise in production of goods and services as the reason for increase in GDP. o Current Production of goods and services x Base Year Prices Nominal GDP Economic Growth Rate  An economic growth rate is a measure of the rate of change in a nation's GDP from one year to another.  The economic growth rate provides insight into the general direction and magnitude of growth for the overall economy.  Most commonly, this is examined on a quarterly basis, but economic growth rates can be observed across larger spans of time, such as year over year (YOY) or decade over decade. Real economic growth rate  The real economic growth rate measures the economic growth in relation to GDP, from one period to another, adjusted for inflation, in other words, expressed in real as opposed to nominal terms.  The real economic growth rate, also referred to as the growth rate of real GDP, is a more useful measure than the nominal GDP growth rate due to the fact that it takes into account the growth only due to increase in output (and ignores the contribution of price rise to increase in value of output). Base Year  The base year, updated periodically by the government, is a designated year used as a comparison point for economic data such as the GDP. Presently, 2011-12 is used as the base year for calculating GDP in India.  GDP is calculated by taking into account the quantity of the present year and prices of the base year. Thus, when we talk about GDP growth, we talk about real GDP growth rate.

Understanding Inflation

Topics covered  Types of inflation  Effect of inflation on economy and people  Factors effecting inflation  Inflation over products  Base year and its relevance  Measures to control inflation What is inflation?  Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.  As a result of inflation, the purchasing power of a unit of currency falls.  The ultimate effect of inflation is that the value of money is reduced i.e., the purchasing power of money is reduced. Types Of Inflation Inflation can be classified into the following types:  Galloping inflation: When the inflation rate rises to 10% or greater in a year, it is called galloping inflation. Money loses value so fast that businesses and income of workers cannot keep up with the prices of goods and services.  Hyperinflation: Hyperinflation is very high inflation caused by rapid growth of ‘paper’ money and the monthly inflation rate is greater than 50%. During times of hyperinflation, the value of currency declines continuously to the extent that people lose faith in domestic currency. As a result, they either prefer international currency or large stock of commodities.  Stagflation: It is when economic growth is stagnant, but price inflation is still there. A sluggish economy usually reduces the demand, enough to keep prices from rising. As workers get laid off, they buy less. As a result, businesses lower the prices to attract whatever customers remain. Slow growth in a normal market economy prevents inflation. www.brainyias.com BrainyIAS (84594-00000)  Creeping inflation: When the inflation rate is up to 3%. It is defined as the situation when the inflation of a nation increases gradually, but continuously, over time. Creeping inflation is considered good for the economy because it acts as an incentive for suppliers to enhance production and indicates continuous rise in demand in the economy.  Walking inflation: When the inflation rate rises to 3-10% in a year, it is called walking inflation. It has a harmful effect on the economy. People start to buy more than they need, just to avoid much higher prices in the future. This drives the demand even further, so that suppliers fail to match the demand. As a result, common goods and services are priced out of the reach of most people.  Deflation: It is when the overall price level decreases so that the inflation rate becomes negative. A reduction in money supply or credit availability is the reason for deflation in most cases. Reduced investment spending by the government or individuals may also lead to this situation. Deflation is different from disinflation as the latter implies decrease in the level of inflation, whereas deflation implies negative inflation.  Wages inflation: Wage push inflation is a general increase in the cost of goods that is preceded by and results from an increase in wages. To maintain corporate profits after an increase in wages, employers must increase the prices they charge for the goods and services they provide.  Headline inflation: Headline inflation is the inflation figure as reported through the consumer price index- (CPI), which is released monthly by the Bureau of Labour Statistics. Earlier it was based on the wholesale price index (WPI). The change has been undertaken because earlier the RBI used to target inflation based on WPI, but now RBI targets inflation based on CPI.  Asset inflation: Asset price inflation is an economic phenomenon denoting a rise in price of assets, as opposed to ordinary goods and services. Typical assets are financial instruments such as shares as well as real estate.  Core inflation: It is an inflation measure that excludes transitory or temporary price volatility as in the case of some commodities such as food items, energy products, etc. It reflects the inflation trend in an economy. o Core inflation is calculated to gauge the actual inflation apart from the temporary shocks and volatility. Effects Of Inflation On Various Classes Of Persons  Salaried persons: Salaried workers such as clerks, teachers, and other white collar persons lose purchasing power when there is inflation. The reason is that their salaries are slow to adjust to rising prices.  Debtors and creditors: During periods of rising prices, debtors gain and creditors lose. When prices rise, the value of money falls. Though debtors return the same amount of money, but they pay less in terms of value of money. Thus, inflation brings about a redistribution of real wealth in favour of debtors at the cost of creditors.  Fixed-income group: The recipients of transfer payments such as pensions, unemployment insurance, social security, etc. and recipients of interest and rent live on fixed incomes. All such persons lose because they receive fixed payments, while the value of money continues to fall with rising prices.  Wage earners: Wage earners may gain or lose depending on the speed with which their wages adjust to rising prices. If their unions are strong, they may get their wages linked to the cost of living index. In this way, they may be able to protect themselves from the bad effects of inflation.  Business persons: Business persons of all types, such as producers, traders, and real estate holders, gain during periods of rising prices. When prices rise, the value of their inventories (goods in stock) rise in the same proportion. So they profit more when they sell their stored commodities.  Investors: Persons who hold shares of companies gain during inflation. When prices rise, business activities expand, which increases profits of companies. But those who invest in debentures, securities, bonds, etc., which carry a fixed interest rate, lose during inflation because they receive a fixed sum while the purchasing power is falling.  Government: The government as a debtor gains at the expense of households who are its principal creditors. This is because interest rates on government bonds are fixed and are not raised to offset the expected rise in prices. With inflation, even the real value of bonds is reduced. www.brainyias.com BrainyIAS (84594-00000) Effects Of Inflation On Various Economic Phenomenon  Production: When prices start rising, production is encouraged. Producers earn wind-fall profits in the future. They invest more in anticipation of higher profits in the future.  Balance of payments: When prices rise more rapidly in the home country than in foreign countries, domestic products become costlier compared to foreign products. This tends to increase imports and reduce exports, thereby making the balance of payments unfavourable for the country.  Consumption: When prices start rising, consumption is discouraged. Factors Affecting Inflation Two types of factors affect inflation:  Supply-side (or cost-push) factors: The factors that lead to increased cost of production, transportation, or sale of goods and services in the economy are supply-side factors. For instance, increase in cost of raw materials, wages, transportation fuel, etc. Inflation can be managed through change in both supply and demand-side factors. However, changes in supply-side factors can be brought in the long term. The demand-side factors can be changed in a relatively short term.  Demand-side (or price-pull) factors: The factors that lead to increased demand of goods and services in the economy are demand-side factors. Increased demand for goods and services may be on account of increase in population, increase in the income level of the people, etc. Inflation In Different Types Of Products  Intermediate goods: Intermediate goods are those goods that are used as inputs in the production of other goods. Inflation in intermediate goods leads to price rise in the final goods. For instance, increase in the price of natural gas will lead to increase in the prices of fertilizers.  Luxury goods: Luxury goods such as costly cars, gems and jewellery, etc. are afforded by the rich only. Thus, inflation in these goods is not that pernicious (as in necessity goods) because the rich have the capacity to bear inflation. In fact, some of the luxury items are Giffen goods, which are those goods that people consume more as the price rises and vice versa.  Necessity goods: Necessity goods such as milk, food grains, etc. are consumed by rich as well as poor. Price rise in necessity goods forces poor to reduce the consumption or even stop the consumption of necessity goods. Thus, inflation in necessity goods has a pernicious effect.  Final goods: Final goods are those goods that are consumed by the final consumer. Inflation in final goods affects the ultimate consumer of these goods only.  Fuels o Diesel: Inflation in diesel has impact on the overall price level of an economy because diesel is used in transportation of various goods and even in agriculture and industry. o Petrol: Inflation in petrol is borne by the owner of automobile and thus does not lead to overall inflation in the economy. o Kerosene: Kerosene is consumed mainly by the poor to fulfil a variety of fuel needs such as cooking and lighting. Thus, rise in the prices of kerosene puts extra burden on the poor. To maintain low prices of kerosene, the government gives subsidy on kerosene. o Liquefied petroleum gas (LPG): LPG is used as a cooking fuel. Increase in LPG prices forces many households to use cow dung cakes and wood for cooking. To maintain low prices of LPG, the government provides subsidy. Measurement Of Inflation  Consumer Price Indices – It is calculated by taking price changes for each item in the predetermined lot of goods and averaging them. In 2011, CSO introduced three new CPI’s: CPI – Urban, CPI – Rural and CPI – Combined. The reason to introduce these new CPI’s was that there was no single CPI that could give the effect of inflation as a common man residing in India would experience. The base year for all the three CPI’s is 2010.  Wholesale Price Index (WPI) – It is estimated by the Ministry of Industry and Commerce and measured on a monthly basis, but with a lag of 14 days.

www.brainyias.com BrainyIAS (84594-00000)  Commodity Price Indices – It is a fixed-weight index or (weighted) average of selected commodity prices, which may be based on spot or futures price  Producer Price Indices – It is a measure of the average change in the selling prices over time received by domestic producers for their output.  GDP deflator – It is a measure of general price inflation.  Core Price Indices – It measures the prices paid by consumers for goods and services without the volatility caused by movements in food and energy prices. It is a way to measure the underlying inflation trends. CPI vs. WPI

 WPI, tracks inflation at the producer level and CPI captures changes in prices levels at the consumer level.  Both baskets measure inflationary trends (the movement of price signals) within the broader economy, the two indices differ in which weightages are assigned to food, fuel and manufactured items.  WPI does not capture changes in the prices of services, which CPI does.  In April 2014, the RBI had adopted the CPI as its key measure of inflation. Base year  The government has chosen an arbitrary year to be the base year and set that equal to 100. Currently, the base year is 2011-12.  Every month, the Bureau of Labour Statistics (BLS) surveys prices around the country for a basket of products and publishes the results as a number. Relevance of Base Year  The pattern of consumption by the people is ascertained in the base year as adopted at the discretion of the government.  Accordingly, based on the pattern of consumption, the commodities are selected and weights are allocated to the commodities for inclusion in CPI.  The weight allocated to each commodity reflects the amount of expenditure incurred on that particular commodity Measures To Control Inflation  Fiscal measures: Inflation can be controlled by reducing government expenditure and increasing revenue collection.  Monetary measures: Inflation can be curtailed by controlling the money supply.  Administrative measures: These measures refer to the actions undertaken by the government. Administrative measures such as a check on hoarding can also help in reducing prices.  Apart from these three measures, any change in demand and supply factors can also help in reducing inflation.

Banking Reforms In India

Relevancy  G.S. Paper 2 and 3  Objective questions : RBI, Bank Accounts, Type of banks  Subjective questions: recommendations of Narasimham Committee, Nachiket Mor Committee and P.J.Nayak Committee History of bank reforms of India  Before 1991, India had been nationalizing a large share of its banking sector.  In 1969, the government nationalized banks with deposits greater than Rs. 50 crore. It controlled more than 80 percent of bank branches.  In 1980, the government brought an additional number of banks under its control, nationalizing banks with country-wide deposits more than Rs. 200 crore. About 90 per cent of all banks were controlled by the government and this share remained fairly steady during this period.

www.brainyias.com BrainyIAS (84594-00000)  In 1991, when the government liberalized the economy, it also undertook a number of banking reforms due to decline in banks’ efficiency and productivity, customer service quality and profitability.  The Committee on Financial Systems, chaired by Mr. M.Narashimham in 1991 gave reccomendations over SLC and CRR  In 1998, the Committee on Banking Sector Reforms, also chaired by Mr. Narsimham, recommended a further set of measures to strengthen the banking sector  Beyond these, the 1998 Committee also recommended steps relating to greater technology use, skills training and professional management of banks.  Many of these reforms put in place since 1991 improved the performance and strength of India’s banking sector.

Reserve Bank Of India  The RBI is India's central bank, which commenced its operations on 1 April 1935 during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934.  The RBI is an independent apex monetary authority that also regulates banks and provides important financial services such as storage of foreign exchange reserves, availability of credit, accept deposits from government and banks. Eight Major Functions of the Reserve Bank of India  Banker to the government: o As banker to the government, the RBI manages the banking needs of the government. o It has to maintain and operate the government's deposit accounts. o It collects receipts of the funds and makes payments on behalf of the government. o It represents the Government of India as the member of the IMF and the World Bank.  Issue of bank notes: o The RBI has the sole right to issue currency notes except one-rupee notes, which are issued by the Ministry of Finance. o This function of the RBI has a number of advantages: (i) it brings uniformity in issue of notes; (ii) it makes possible effective state supervision; (iii) it is easier to control and regulate credit in accordance with the requirements in the economy  Custodian of cash reserves of commercial banks: o The commercial banks hold deposits in the Reserve Bank, and the latter has the custody of the cash reserves of the commercial banks.  Lender of last resort: o The commercial banks approach the Reserve Bank in times of emergency to tide over financial difficulties, and the Reserve Bank comes to their rescue though it might charge a higher rate of interest.  Custodian of country's foreign currency reserves: o The Reserve Bank has the custody of the country's reserves of international currency, and this enables the Reserve Bank to deal with crisis connected with adverse balance of payments position.  Controller of credit: o Since credit money forms the most important part of supply of money, and since the supply of money has important implications for economic stability, the importance of control of credit becomes obvious. o Credit is controlled by the Reserve Bank in accordance with the economic priorities of the government.  Regulator of banks and non-banking financial companies: o Opening a bank or a non-banking financial company (NBFC) requires a license from the RBI. It ensures that financial interest of the depositors is not hampered. o It also keeps checks that the banks and NBFCs adhere to capital adequacy norms, etc.  Central clearance and accounts settlement:

www.brainyias.com BrainyIAS (84594-00000) o Since commercial banks have their surplus cash reserves deposited in the Reserve Bank, it is easier to settle the claim of these banks on each other through entries in the books of the Reserve Bank. o The clearing of accounts has now become an essential function of the Reserve Bank. Types Of Bank Accounts  Current account o Current account is mainly for business persons, firms, companies, public enterprises, etc. and is never used for investment or savings. These deposits are the most liquid deposits and there are no limits for the number of transactions or the amount of transactions in a day. While there is no interest paid on the amount held in the account, banks charge certain service charges on such accounts. The current accounts do not have any fixed maturity as these are on continuous basis.  Savings account o It is meant for saving purposes. o Most of the salaried persons, pensioners, and students use savings account. The advantage of having a savings account is that the banks pay interest for the savings. o The savings account holder is allowed to withdraw money from the account as and when required. o The rate of interest ranges from 4% to 6% per annum in India. There is no restriction on the number and amount of deposits. But withdrawals are subjected to certain restrictions. o Some banks recommend maintaining a minimum amount to keep it functioning.  Recurring deposit account or RD account o This account is opened by those who want to save a certain amount of money regularly for a certain period of time and earn a higher interest rate. o In RD account, a fixed amount is deposited every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period. o The period of deposit is minimum 6 months and maximum 10 years. The interest rates vary for different plans based on the amount one has to save and the period of time for which it is deposited. o No withdrawals are allowed from the RD account. However, the bank may allow closing of the account before the maturity period. o These accounts can be opened in single or joint names. Banks also provide nomination facility to RD account holders.  Fixed deposit account (FD account) o It holds a particular sum of money in a bank for a specific period. It is a one-time deposit and one-time take away (withdraw) account. The money deposited in this account cannot be withdrawn before the expiry of period. o However, in case of need, the depositor can ask for closing the fixed deposit prematurely by paying a penalty. The penalty amount varies with banks. A high interest rate is paid on fixed deposits. The rate of interest paid for fixed deposits vary according to the amount, period, and also from bank to bank. Types of banks  Public Sector Banks o They are owned by the Government either totally or as a majority stake holder. o State Bank of India and its five associate banks called the State Bank group o 19 nationalized banks o Regional Rural Banks mainly sponsored by Public Sector Banks o SBI has five associate banks: State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore. Earlier SBI had seven associate banks. State Bank of Saurashtra and Indore merged with SBI.  Private Sector Banks o These include domestic and foreign banks Co-operative Banks are another class of banks and are not considered as commercial banks as they have social objectives and profit is not the motive.

www.brainyias.com BrainyIAS (84594-00000) (explained later) Reserve Bank of India lays down the norms for banking operations and has the final supervising power.  Development Banks o Development Banks are those financial institutions which provide long term capital for industries and agriculture : Industrial Finance Corporation of India (IFCI); Industrial Development Bank of India (IDBI); Industrial Credit and Investment Corporation of India (ICICI) that was merged with the ICICI Bank in 2000; Industrial Investment Bank of India (IIBI); Small Industries Development Bank of India (SIDBI); National Bank for Agriculture and Rural Development (NABARD)a; Export Import Bank of India; National Housing Bank (NHB).  Co-operative Banks o Co-operative Banks are organized and managed on the principle of co-operation, self-help, and mutual help. o They function with the rule of “One member, one vote” and on “no profit, no loss” basis Co- operative banks, as a principle, do not pursue the goal of profit maximization. o Co-operative bank performs all the main banking functions of deposit mobilization, supply of credit and provision of remittance facilities. o Co-operative Banks provide limited banking products and are functionally specialists in agriculture related products, However, co-operative banks now provide housing loans also. Factors For Deteriorating Bank Performance  Low interest rates charged on government bonds  High SLR and CRR locking up funds  Administered interest rates  Directed and concessional lending for populist reasons  Lack of competition Narasimham Committee First Narasimhan Committee Report – 1991 To promote the healthy development of the financial sector, the Narasimhan committee made recommendations. Recommendations of Narasimhan Committee  The supervisory functions over banks and financial institutions can be assigned to a quasi-autonomous body sponsored by RBI.  Establishment of 4 tier hierarchy for banking structure with 3 to 4 large banks (including SBI) at the top and at bottom rural banks engaged in agricultural activities.  Deregulation of Interest rates.  Phased achievement of 8% capital adequacy ratio.  Delegation of direct lending activity of IDBI to a separate corporate body.  A phased reduction in statutory liquidity ratio.  Proper classification of assets and full disclosure of accounts of banks and financial institutions.  Setting up Asset Reconstruction fund to take over a portion of the loan portfolio of banks whose recovery has become difficult.  Abolition of branch licensing policy.  Competition among financial institutions on participating approach. Narasimham Committee Report II – 1998 In 1998 the government appointed yet another committee under the chairmanship of Mr Narsimham. It is better known as the Banking Sector Committee. It was told to review the banking reform progress and design a programme for further strengthening the financial system of India. The committee focused on various areas such as capital adequacy, bank mergers, bank legislation, etc. It submitted its report to the Government in April 1998 with the following recommendations.  Review of banking laws : The committee considered that there was an urgent need for reviewing and amending main laws governing Indian Banking Industry like RBI Act, Banking Regulation Act, State Bank of

www.brainyias.com BrainyIAS (84594-00000) India Act, Bank Nationalisation Act, etc. This up gradation will bring them in line with the present needs of the banking sector in India.  Strengthening Banks in India : The committee considered the stronger banking system in the context of the Current Account Convertibility ‘CAC’. It thought that Indian banks must be capable of handling problems regarding domestic liquidity and exchange rate management in the light of CAC. Thus, it recommended the merger of strong banks which will have ‘multiplier effect’ on the industry.  Capital Adequacy Ratio : In order to improve the inherent strength of the Indian banking system the committee recommended that the Government should raise the prescribed capital adequacy norms. This will further improve their absorption capacity also. Currently, the capital adequacy ratio for Indian banks is at 9 percent.  Bank ownership : As it had earlier mentioned the freedom for banks in its working and bank autonomy, it felt that the government control over the banks in the form of management and ownership and bank autonomy does not go hand in hand and thus it recommended a review of functions of boards and enabled them to adopt professional corporate strategy.  Narrow Banking : Those days many public sector banks were facing a problem of the Non-performing assets (NPAs). Some of them had NPAs were as high as 20 percent of their assets. Thus for successful rehabilitation of these banks, it recommended ‘Narrow Banking Concept’ where weak banks will be allowed to place their funds only in the short term and risk-free assets.  Apart from these major recommendations, the committee has also recommended faster computerization, technology up gradation, training of staff, depoliticizing of banks, professionalism in banking, reviewing bank recruitment, etc. Nachiket Mor Committee  The “Committee on Comprehensive Financial Services for Small Businesses and Low Income Households” was set up by the RBI under the chairmanship of Nachiket Mor.  In its final report, the Committee has outlined six vision statements for full financial inclusion and financial deepening in India.  These statements were included; Universal Electronic Bank Account (UEBA),Ubiquitous Access to Payment Services and Deposit Products at Reasonable Charges, Sufficient Access to Affordable Formal Credit, Universal Access to a Range of Deposit and Investment Products at Reasonable Charges, Universal Access to a Range of Insurance and Risk Management Products at Reasonable Charges and Right to Suitability Key recommendations • Aadhaar will be the prime driver towards rapid expansion in the number of bank accounts. • Providing a universal bank account to all Indians above the age of 18 years by January 1, 2016. To achieve this, a vertically differentiated banking system with payments banks for deposits and payments and wholesale banks for credit outreach. These banks need to have Rs.50 crore by way of capital, which is a tenth of what is applicable for new banks that are to be licensed. • Adjusted 50 per cent priority sector lending target with adjustments for sectors and regions based on difficulty in lending. • Monitoring at the district lecvel such as deposits and advances as a percentage of gross domestic product (GDP). P J Nayak Committee • The P J Nayak Committee or officially the Committee to Review Governance of Boards of Banks in India, was set up by the Reserve Bank of India (RBI) to review the governance of the board of banks in India. • The Committee was set up in January 2014. • The Committee was chaired by P J Nayak, the former CEO and Chairman of Axis Bank. P J Nayak Committee Objectives • To examine the workings of the boards of banks including if sufficient time is given to strategy issues, governance, growth and risk management. • To study the compensation of the board. • To review the regulatory compliance requirements of boards of banks in the country to evaluate what can be rationalised and where requirements need to be enhanced.

www.brainyias.com BrainyIAS (84594-00000) • To review RBI regulatory guidelines on bank ownership, ownership concentration and board concentration. • To study any other issues pertinent to the functioning and governance of the boards of banks. • To study the representation in the banks’ board, to check if the boards have the required mix of capabilities and the required independence to govern, and to inquire into possible conflict of interest in board representation. Why was the P J Nayak Committee set up? • In nationalised banks, the government owns more than 50% of the shares, which gives it majority voting rights. • Because of this, the government can interfere in the boards of such banks and appoint inefficient people to the boards. • That is, the appointment of the members might not always be based on merit. This will lead to overall efficiency and scams such as the Syndicate Bank scam. PJ Nayak Committee Recommendations • The government to transfer its share in the banks to this BIC. Thus, the BIC would become the parent holding company of all these national banks, which would become subsidiaries. As a result of this, all the PSBs (public sector banks) would become ‘limited’ banks. BIC will be autonomous and have the power to appoint the Board of Directors and make other policy decisions. • Repeal the Bank Nationalisation Act (1970, 1980), the SBI Act and the SBI Subsidiaries Act. This is because these acts require the government to have above 50% share in the banks. • After the above acts are repealed, the government should set up a Bank Investment Company (BIC) as a holding company or a core investment company. • The BBB will advice on appointments to the board, banks’ chairman and other executive directors. • Until the BIC is formed, a temporary body called the Bank Boards Bureau (BBB) will be formed to do the functions of the BIC. Once BIC is formed, the BBB will be dissolved.

The Indian Railway Management Service (IRMS)

Relevancy  G.S. Paper 2 and 3  The Indian Railway Management Service (IRMS)- features and concerns  Railways in India- profitability and functions  Rail authority of India  Golden Quadirateral and Diamond Quardilateral Why in news?  Cabinet has approved the merger of its eight services into one: The Indian Railway Management Service (IRMS).  The decision to merge the services is to ensure that officers put railways first instead of their service which had become the case under the present system.  This is in line with the recommendations of numerous committees, notably Rakesh Mohan (2001) and the Bibek Debroy panel (2015).  The reforms as suggested by various committees from time to time including Prakash Tandon Committee (1994) have been largely adopted. The Key Ingredients Of Present Reform Template were the following:  Unite the Railway Budget with the Union Budget  Change the composition of the Railway Board  Allow private entry, including in running of private trains  Transit to commercial accounting and  Separate the core functions of running trains from non-core functions like schools and medical services www.brainyias.com BrainyIAS (84594-00000)  Decentralise decision-making to zones/divisions and even further below  Unify various railway services  Set up a regulator Concerns  The logic is that functionally, departments will continue to exist through various technical and non- technical specialisations, so merging them will not end departmentalism per se.  The current demand is for two distinct services instead of one a civil service, and one that encompasses all engineering specialisations.  There are allegations lower down the ranks that seniors in the Ministry did not put up resistance to the move. The morale of officers is said to be affected.  The government has on record assured all existing officers that no one’s seniority will be hampered and promotion prospects will be protected.  Amid all this, one concern among the higher-ups is that the actual job of safely running trains 24/7 must not get neglected. Existing system of Railway recruitments  The Indian Railways is governed by a pool of officers, among whom engineers are recruited after the Indian Engineering Service Examination, and civil servants through the Civil Services Examination.  The civil servants are in the Indian Railway Traffic Service (IRTS), Indian Railway Accounts Service (IRAS) and Indian Railway Personnel Service (IRPS).  The engineers are in five technical service cadres: o Indian Railway Service of Engineers (IRSE), o Indian Railway Service of Electrical Engineers (IRSEE), o Indian Railway Service of Mechanical Engineers (IRSME), o Indian Railway Service of Signal Engineers (IRSSE) and o The Indian Railway Stores Service (IRSS).  Until the 1950s, the Railways system was run by officers from just three main streams: Traffic, Civil Engineering, and Mechanical. The other streams emerged as separate services over time. History of Indian Railways  Indian railway system started in 1853 with the inauguration of railway line between Mumbai and Thane for a distance of 34 km.  Mumbai-Thane railway line was followed by another railway line between Kolkata and Raniganj in 1854.  In the beginning private companies owned by the British, operated the railway but after the independence in 1950, the whole railway management came under the control of Central government. Viability of Railways  Railways are required to run certain routes that are not remunerative. The cost of operations on these routes is far higher than the revenue generated.  Railways are required to serve national needs even after incurring losses. For instance, railways are required to transport food grains, cement, coal, fertilizers, and various other commodities at a low freight rate.  The route length of railways can be increased only by huge investment of money. The returns from such investments are recovered only after a long period of time. As increasing the railway route length demands high investments, the government prefers to increase the number of trains or number of coaches (in existing trains) and avoids setting up more railway tracks.  Railways are also at a disadvantage on account of limited capacity at important routes, delay in booking, long time taken in transportation, and loss on account of pilferage.  Railways have not raised the tariff levels on account of populist tendencies of successive governments.

www.brainyias.com BrainyIAS (84594-00000) Management of Railways  Railway Board is the top most 7 member body in Indian Railways which reports to the parliament of India through the Railway Ministry.  There are 17 zones in Indian Railways and each zone is headed by General Managers, who in turn reports to the Railway Board.  Railway Zone are further subdivided into operating divisions which are headed by Divisional Railway Managers (DRM) and at present these divisions are 68 in number. Rail Development Authority (RDA)  The union government has established a Rail Development Authority (RDA) in 2017.  The RDA is based in Delhi.  It will only make recommendations to the Ministry of Railways, which will take the final call on passenger and freight fares. Functions of RDA  To recommend tariff commensurate with costs.  To collect, analyse, and disseminate information and statistics concerning the rail sector.  To set "standards for efficiency and performance for consumer satisfaction in both passenger and freight" like setting standards including frequency of trains, hours of service, capacity per coach, cleanliness level, and quality of food, water, furnishing, and linen.  To "check for deviations and suggest remedial measures"  To not involve itself in policy making of the Indian Railways, operations and maintenance of the rail system, financial management, setting technical standards, and compliance of safety standards. Track Gauges in India  Track gauge refers to the spacing of the rails on the railway track, i.e. it is the distance between the inner sides of the rails.  At present, Indian Railways uses three gauges: o Broad gauge: 1676 mm o Metre gauge: 1000 mm o Narrow gauge: is further of two types, 762 mm and 610 mm  The broad gauge is the most widely used gauge with an approximate route length of 60,000 km.  The metre gauge is used for a route length of 4000 km (reduced from 20,000 km at the time of independence).  The narrow gauge is used in a few routes in the hilly terrain. It covers a route length of less than 2000 km. Historical reasons for using different gauges  When the railways was introduced in 1833 in India, broad gauge was used because of two primary reasons: o Greater space between the wheels for large cylinders. o Stability even during high winds and other conditions of unpredictable weather.  In order to reduce the cost of constructing railway tracks, metre gauge was adopted in place of broad gauge.  In hilly areas where sharp turns are required to be taken by trains, narrow gauge is preferable. Diamond Quadrilateral  It is a project of the Indian railways to establish a high speed rail network in India connecting across the four mega cities i.e. Delhi, Mumbai, Kolkata and Chennai, similar to the Golden Quadrilateral expressways. Six corridors under it connecting the metropolitan cities include-  Delhi-Mumbai;  Mumbai-Chennai;  Chennai-Kolkata;

www.brainyias.com BrainyIAS (84594-00000)  Kolkata-Delhi;  Delhi-Chennai diagonal and  Mumbai-Kolkata diagonal. Mission 41K  In order to save 41000 crore rupees in Railways energy cost Railway Ministry has launched Mission 41K, which aims to move 90% of the traffic to the Electric traction over diesel.  The Railway ministry targets doubling current pace of electrification by procuring more and more electricity at cheaper rates via open market instead of sourcing it through DISCOMS. Metro Rails (Functioning)  Kolkata (First mass rapid transit system in India)  Delhi  Bangalore (Wifi Enabled)  Mumbai (Public Private Partnership)  Jaipur  Chennai  Gurgaon (India’s first fully privately financed metro + India’s first fully privately financed metro stations)

Monetary Policy Committee (MPC)

Relevancy  G.S. Paper 2  About Monetary Policy Committee (MPC)  Monetary policy- Qualitative and quantitative tools  Flexible Inflation Targeting Framework (FITF) Why in news?  Globally, policymakers have been caught off-guard by the public health, financial, and economic dislocations triggered by Covid-19.  However, having learnt from the global financial crisis, many major monetary policymakers have taken aggressive measures, some even inter-meeting. In contrast, India’s MPC has been conspicuous by its absence despite the anticipation of significant one-sided hits to inflation and economic growth.  These will undoubtedly affect the MPC’s response function. Thus, an inter-meeting rate action was strongly justified, which would have also helped pacify nervous investors and de-stress the financial system.  The current crisis could slash 1-2 percentage points from full-year GDP growth, depending on the extent and longevity of shutdowns, the wave of economic damage to the business and household sectors, and the swiftness and aggressiveness of the fiscal-monetary policy reponse. What Is Monetary Policy?

 Monetary policy refers to the policy of the Reserve Bank of India with regard to the use of monetary instruments under its control to achieve the goals of GDP growth and lower inflation rate.  The RBI is authorised to made monetary policy under the Reserve Bank of India Act, 1934.  While managing money supply, the RBI keeps primarily two factors in mind: (1) inflation and (2) economic growth.  The main objectives of the monetary policy in India are to maintain the price stability, securing the financial stability and to ensure the adequate flow of credit.  RBI uses various monetary instruments like REPO rate, Reverse RERO rate, SLR, CRR etc to achieve its purpose. Instruments of Monetary Policy

The instruments of monetary policy are of two types: www.brainyias.com BrainyIAS (84594-00000)  Quantitative Instruments: General or indirect (Cash Reserve Ratio, Statutory Liquidity Ratio, Open Market Operations, Bank Rate, Repo Rate, Reverse Repo Rate, Marginal standing facility and Liquidity Adjustment Facility (LAF))  Qualitative Instruments: Selective or direct (change in the margin money, direct action, moral suasion) Quantitative Instruments

 Reserve ratios: Reserve ratios are calculated over total deposits received by a commercial bank. Reserve ratios are of two types: o Cash reserve ratio (CRR): It is the percentage of total deposits a commercial bank is required to maintain with the RBI. According to the Banking Regulation Act, CRR cannot exceed 15% and cannot be less than 3%. The present rate of CRR as prescribed by the RBI is 4%. CRR serves two purposes. The amount deposited with the RBI as CRR acts as an assurance to the depositors that their money will be returned. Moreover, CRR can be used to manage money supply in the economy and thus inflation. o Statutory liquidity ratio (SLR): It refers to the percentage of total deposits that a commercial bank is required to maintain with itself in the form of liquid assets. Liquid assets are those assets that can be converted into cash within 3 months without any significant risk involved. The term liquid assets include gold, government securities, etc. According to the Banking Regulation Act, SLR should be between 15% to 40%. The present rate of SLR is 21.50%. Like CRR, SLR serves two purposes. The amount kept in the form of liquid assets can meet even the sudden high demand for return of money by depositors. Moreover, SLR can also be used to manage money supply in the economy and thus inflation.  Interest rate changes: Interest rate changes can be used to adjust the money supply in the following ways: o Bank rate: It refers to the official interest rate at which the RBI provides loans to the banking system, which includes commercial/cooperative banks, development banks, etc. Such loans are given out either by direct lending or by rediscounting (buying back) the bills of commercial banks. Thus, bank rate is also known as discount rate. Bank rate at present is 5.65%. o Repo rate: Under repo or repurchase agreement, the RBI lends money to commercial banks and commercial banks give government bonds to the RBI with an agreement to purchase them back. In other words, repo rate or repurchase rate is the rate at which the RBI lends money to banks for a short time period. o Reverse repo rate: Under the reserve repo or reverse repurchase agreement, commercial banks park their excess funds at fixed rate with the RBI and the RBI gives government bonds to commercial banks with an agreement to purchase them back. The reverse repo rate, or reverse repurchase rate, is the rate at which commercial banks lend money to the RBI for a short time period. Difference between bank rate and repo rate:

 Bank rate and repo rate seem to be similar because in both, the RBI lends to the banks.  However, repo rate is a short-term measure. It is used to adjust temporary increase or decrease in money supply.  On the other hand, bank rate is a long-term measure and is governed by the long-term monetary policies of the RBI. Qualitative Measures

Qualitative measures are also called instrument of selective credit control. Selective credit control refers to influence in division of credit among various types of borrowers. Some of them are as follows:

 Margin requirement: This refers to the difference between the securities offered and the amount borrowed from the banks. In case the RBI mandates banks to demand higher margin requirements, the amount of credit given on security reduces.

www.brainyias.com BrainyIAS (84594-00000)  Moral suasion: A moral suasion is a persuasion tactic used by the RBI to influence and pressure, but not force, banks in adhering to policy. Tactics used are closed door meetings with bank directors, increased severity of inspections, appeals to community spirit, or vague threats.  Consumer credit regulation: This refers to the issuing of rules regarding downpayments and maximum time period of installment credit for purchase of goods.  Direct action: This step is taken by the RBI against the banks that do not fulfil conditions and requirements. The RBI may refuse to rediscount their papers or charge a penal rate of interest over and above the bank rate, for credit demanded beyond a limit.  Guidelines: The RBI issues oral, written statements, appeals, guidelines, and warnings to the banks. For instance, the RBI requests commercial banks to pass the benefits of decrease in interest rates to the final consumers.  Rationing of credit: The RBI controls the credit allocated by commercial banks to various sectors. For instance, the RBI mandates banks to issue 40% of their credit to the priority sector. Priority sector refers to those sectors of the economy that may not get timely and adequate credit in the absence of this special dispensation but are important for overall growth of economy. Priority sector lending is an important role given by the RBI to the banks for providing a specified portion of the bank lending to a few specific sectors such as agriculture and allied activities, micro and small enterprises, poor people for housing, students for education, social infrastructure, renewable energy, export credit and other low- income groups and weaker sections. What is Monetary Policy Committee?

 The Monetary Policy Committee (MPC) constituted by the Central Government under Section 45ZB. The MPC determines the policy interest rate required to achieve the inflation target.  Before establishment of Monetary Policy Committee, the final decision on interest rates etc. would come from RBI Governor’s desk.  Though there was a Technical Advisory Committee (TAC) comprising of governor as its chairman, the deputy governor as its vice-chairman and other 3 deputy governors to decide on monetary policy yet, the Governor had overriding powers upon the decision making process.  The TAC was advisory in nature and there was no voting system there. Composition of Monetary Policy Committee

 The 6 member Monetary Policy Committee (MPC) constituted by the Central Government as per the Section 45ZB of the amended RBI Act, 1934.  The first meeting of the Monetary Policy Committee (MPC) was held on in Mumbai on October 3, 2016.

Flexible Inflation Targeting Framework (FITF)

 Who sets the inflation target in India: The amended RBI Act provides for the inflation target to be set by the Government of India, in consultation with the Reserve Bank, once every five years.  Flexible Inflation Targeting Framework: Now there is a flexible inflation targeting framework in India (after the 2016 amendment to the Reserve Bank of India (RBI) Act, 1934).  Factors that constitute a failure to achieve the inflation target: o The average inflation is more than the upper tolerance level of the inflation target for any three consecutive quarters, OR o The average inflation is less than the lower tolerance level for any three consecutive quarters.

www.brainyias.com BrainyIAS (84594-00000) India To Set Aside Fiscal Policies To Cope With COVID19 Pandemic

Relevancy  G.S. Paper 2  Fiscal policies- significance, effect  FRBM Act 2003 Why in news?  India is facing an economic shock as many parts of the country go into lockdown and the government will have to spend more and abandon fiscal deficit targets to cope.  Growth may weaken to 3% in the first three months of this year from 4.3% estimated previously, according to Oxford Economics  The readings about Asia’s third-largest economy come as policy makers are focused on ensuring Indians have cash in hand to buy essentials as more cities are locked down to prevent the spread of the virus, and countries around the world race to ease fiscal and monetary policies to shore up their economies What is Fiscal policy?  Fiscal policy is the guiding force that helps the government decide how much money it should spend to support the economic activity, and how much revenue it must earn from the system, to keep the wheels of the economy running smoothly.  Through the fiscal policy, the government of a country controls the flow of tax revenues and public expenditure to navigate the economy.  If the government receives more revenue than it spends, it runs a surplus, while if it spends more than the tax and non-tax receipts, it runs a deficit.  To meet additional expenditures, the government needs to borrow domestically or from overseas.  Alternatively, the government may also choose to draw upon its foreign exchange reserves or print additional money.  While exercising fiscal policy, the government keeps primarily the following factors in mind: o Welfare of people o Financial condition of government o Inflation level in the economy Objectives of Fiscal Policy Development by effective Mobilisation of Resources: The financial resources can be mobilised by:-  Taxation: Through effective fiscal policies, the government aims to mobilise resources by way of direct taxes as well as indirect taxes because most important source of resource mobilisation in India is taxation.  Private Savings: Through effective fiscal measures such as tax benefits, the government can raise resources from private sector and households. Resources can be mobilised through government borrowings by ways of treasury bills, issuance of government bonds, etc., loans from domestic and foreign parties and by deficit financing.  Public Savings: The resources can be mobilised through public savings by reducing government expenditure and increasing surpluses of public sector enterprises. Reduction in inequalities of Income and Wealth:  Fiscal policy aims at achieving equity or social justice by reducing income inequalities among different sections of the society.  The direct taxes such as income tax are charged more on the rich people as compared to lower income groups.

www.brainyias.com BrainyIAS (84594-00000)  Indirect taxes are also more in the case of semi-luxury and luxury items which are mostly consumed by the upper middle class and the upper class.  The government invests a significant proportion of its tax revenue in the implementation of Poverty Alleviation Programmes to improve the conditions of poor people in society. Price Stability and Control of Inflation:  One of the main objectives of fiscal policy is to control inflation and stabilize price.  Therefore, the government always aims to control the inflation by reducing fiscal deficits, introducing tax savings schemes, productive use of financial resources, etc. Employment Generation:  The government is making every possible effort to increase employment in the country through effective fiscal measures. Investment in infrastructure has resulted in direct and indirect employment.  Lower taxes and duties on small-scale industrial (SSI) units encourage more investment and consequently generate more employment.  Various rural employment programmes have been undertaken by the Government of India to solve problems in rural areas.  Similarly, self employment scheme is taken to provide employment to technically qualified persons in the urban areas. Balanced Regional Development:  There are various projects like building up dams on rivers, electricity, schools, roads, industrial projects etc run by the government to mitigate the regional imbalances in the country.  This is done with the help of public expenditure. Reducing the Deficit in the Balance of Payment:  some time government gives export incentives to the exporters to boost up the export from the country.  In the same way import curbing measures are also adopted to check import.  Hence the combine impact of these measures is improvement in the balance of payment of the country. Increases National Income:  it’s the strength of the fiscal policy that is brings out the desired results in the economy.  When the government want to increase the income of the country then it increases the direct and indirect taxes rates in the country.  There are some other measures like: reduction in tax rate so that more peoples get motivated to deposit actual tax. Development of Infrastructure:  when the government of the concerned country spends money on the projects like railways, schools, dams, electricity, roads etc to increase the welfare of the citizens, it improves the infrastructure of the country.  A improved infrastructure is the key to further speed up the economic growth of the country. Foreign Exchange Earnings:  when the central government of the country gives incentives like, exemption in custom duty, concession in excise duty while producing things in the domestic markets, it motivates the foreign investors to increase the investment in the domestic country. What is the difference between fiscal policy and monetary policy?  The government uses both monetary and fiscal policy to meet the county’s economic objectives.  The central bank of a country mainly administers monetary policy.  In India, the Monetary Policy is under the Reserve Bank of India or RBI.  Monetary policy majorly deals with money, currency, and interest rates. On the other hand, under the fiscal policy, the government deals with taxation and spending by the Centre.

www.brainyias.com BrainyIAS (84594-00000) Fiscal Responsibility And Budget Management (FRBM) Act, 2003  Originally, the FRBM Bill had given annual numerical targets as well.  But in the process of making it a law, the annual targets were dissolved and the act simply said that the centre would take appropriate measures to eliminate revenue deficit by 31 March 2008.  The FRBM Act 2003 was adopted to institutionalize the fiscal discipline at both the central and state levels.  The act left the annual numerical targets, to be formulated by the central government in the form of FRBM rules. The key provisions of the act as well as FRBM rules are as follows:  Every year, the government will bring down the revenue deficit by 0.5% and eliminate it by 2007-08.  Total liabilities of the union government should not rise by more than 9% a year.  Every year, the government will bring down the fiscal deficit by 0.3% and bring it down to 3% by 2007-08.  State governments were asked to formulate their own FRBM acts. Those states that have formulated their own FRBM acts have been given autonomy to borrow further without the permission of the central government. Other states can undertake further borrowing only with the permission of Central Government.  The union government would not give guarantee to loans raised by PSUs and state governments for more than 0.5% of the GDP in aggregate. Importance of Fiscal Policy in India:  Through taxation, the fiscal policy helps mobilise considerable amount of resources for financing its numerous projects.  In a country like India, fiscal policy plays a key role in elevating the rate of capital formation both in the public and private sectors.  The fiscal policy gives adequate incentives to the private sector to expand its activities.  Fiscal policy also helps in providing stimulus to elevate the savings rate.  Fiscal policy aims to minimise the imbalance in the dispersal of income and wealth.

Kerala seeks loan from NABARD

Relevancy  G.S. Paper 2  NABARD- role and functions  CBS platform Why in news?  Kerala has approached the National Bank for Agriculture and Rural Development (Nabard) seeking a special revival package, including a Rs 2,000-crore loan under Rural Infrastructure Development Fund.  Seeking assistance in view of the ongoing financial crisis, the state also demanded to reduce the interest rate of refinance of various loans, so as to enable banks to reduce interest rates. About National Bank for Agriculture and Rural Development  It is a statutory body established in 1982 under Parliamentary act-National Bank for Agriculture and Rural Development Act, 1981.  NABARD is a development bank focussing primarily on the rural sector of the country. It is the apex banking institution to provide finance for Agriculture and rural development.  It is responsible for the development of the small industries, cottage industries, and any other such village or rural projects.  Its headquarter is located in Mumbai, the country’s financial capital.

www.brainyias.com BrainyIAS (84594-00000) Functions of NABARD  NABARD also supervises the Regional Rural Banks (RRBs) and Cooperative Banks along with developing their banking practices and integrating them to the Core Banking Solution (CBS) platform.  In order to build an empowered and financially inclusive rural India, NABARD has specific departments that work towards the desired goals. These departments can be collectively categorized into three majors units: o Financial o Developmental o Supervision  Preparation of district-level credit plans by NABARD are used to guide and motivate the banking industry to achieve required targets.  The financial support necessary to build rural infrastructure is provided by NABARD. History  RBI and the Government of India, constituted a Committee to Review the Arrangements for Institutional Credit for Agriculture and Rural development in 1979  The committee was formed under the Chairmanship of Shri B. Sivaraman, former member of Planning Commission.  The 1979 Committee’s report outlined the need for a new organisational device for providing forceful direction, undivided attention and pointed focus to credit related issues linked with rural development.  Thus laid the foundation of NABARD (National Bank for Agriculture and Rural Development) in 1982 as a statutory body under Parliamentary act i.e. National Bank for Agriculture and Rural Development Act, 1981.  Its initial paid up capital was Rs. 100 cr. contributed equally (50:50) by government of India and RBI.  The functions of the 3 institutes of RBI were transferred to NABARD.

o The Agricultural Credit Department (ACD) : RBI provided through its ACD short term refinance to cooperatives. o Agricultural Refinance and Development Corporation (ARDC): RBI set up the Agricultural Refinance Corporation (ARC) in 1963 to work as a refinancing agency in providing medium term and long term agricultural credit to support investment credit needs for agricultural development. o Rural Planning and Credit Cell (RPCC): It was dealing with the Regional Rural Banks (RRBs) since 1979 What is Core Banking Solution (CBS) platform?  CBS is a networking of branches, which enables customers to operate their accounts, and avail banking services from any branch of the Bank on the CBS network, regardless of where he maintains his account.  The customer is no longer the customer of a Branch.  He becomes the Bank’s Customer. NABARD and RBI  RBI have sole right to regulate the banking industry and supervise the various institutions/banks that also include NABARD defined under Banking Regulation Act of 1949.  RBI provides 3 directors to NABARD’s Board of Directors.  NABARD provides recommendations to Reserve Bank of India on issue of licenses to Cooperative Banks, opening of new branches by State Cooperative Banks and Regional Rural Banks (RRBs). Contribution of NABARD Financial Contribution  Direct Lending to Cooperative Banks

www.brainyias.com BrainyIAS (84594-00000)  Pradhan Mantri Awaas Yojana - Grameen (PMAY-G)  Food Processing Fund  Credit Facility to Marketing Federations (CFF)  Refinance - Short Term Loans: Crop loans are extended to farmers for crop production by financial institutions, which support in ensuring food security in the country.  Long Term Loans: NABARD's long-term refinance provides credit to financial institutions for a wide gamut of activities encompassing farm and non-farm activities with tenors of 18 months to more than 5 years.  Long-Term Irrigation Fund (LTIF): The LTIF in NABARD was setup with an initial corpus of Rs 20,000 crore for funding 99 irrigation projects during 2016-17 following announcement in the Union Budget.  Rural Infrastructure Development Fund (RIDF): It was set up with NABARD in 1995-96 by the RBI out of the shortfall in lending to priority sector by scheduled commercial banks for supporting rural infrastructure projects.  Producer Organisation (PO): it is a legal entity formed by primary producers, viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen. A PO can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/benefits among the members.  Warehouse Infrastructure Fund (WIF): Union government created WIF in the year 2013- 14 with NABARD with a corpus of Rs 5,000 crore for providing loans to meet the requirements for scientific warehousing infrastructure for agricultural commodities in the country.  NABARD Infrastructure Development Assistance (NIDA): NIDA has been designed to complement RIDF.  Primary Agricultural Credit Society (PACS) is a basic unit and smallest co-operative credit institution in India. It works on the grassroots level (gram panchayat and village level). It provides credit to farmers in the form of term loans and recovers the amount after harvesting of crop from the cultivator.  Producer Organizations Development Fund (PODF) for POs & PACS: NABARD set up Producer Organizations Development Fund (PODF) with an initial corpus of Rs 50 crore to support and finance Producer Organizations (POs) and Primary Agriculture Credit Societies (PACS) to operate as Multi Service Centres. Developmental Contribution  Kisan Credit Card Scheme for Farmers: The Kisan Credit Card (KCC) scheme was designed by NABARD in association with the RBI in August 1998 for providing crop loans.  RuPayKisan Cards (RKCs): NABARD has been at the forefront of technology revolution by helping rural financial institutions in providing RuPayKisan Cards (RKCs) to all their farmer clients.  Tribal Development: the Tribal Development Programme  Climate Resilient Agriculture  Umbrella Programme on Natural Resource Management (UPNRM):The UPNRM started in 2007, works at enhancing investments in rural areas, creating business opportunities and enabling rural communities to sustainably utilise their natural resources.  Microfinance Sector: NABARD had launched the Self Help Group-Bank Linkage Programme (SHG- BLP) in 1992. Over 23 lakh SHGs were credit-linked during 2017-18 financial year.  EShakti: In a bid to digitise SHGs, project EShakti was launched on 15 March 2015.  Skill Development: Promoting an entrepreneurial culture among the rural youth and encouraging them to start enterprises in the rural off-farm sector has been NABARD’s strategy for over three decades.  Marketing Initiatives: For providing marketing opportunities to rural artisans and producers, NABARD has traditionally facilitated their participation in exhibitions across the country.

www.brainyias.com BrainyIAS (84594-00000)  Incubation Centres: To commercialise innovations and to shape agricultural entrepreneurship in the country, NABARD extended support to Chaudhary Charan Singh Haryana Agricultural University, Hisar and Tamil Nadu Agricultural University, Madurai for establishing Agri Incubation Centres with a total financial commitment of Rs 23.99 crore.

International Monetary Fund (IMF)

Relevancy  G.S. Paper 2  Objective questions- role and objectives of IMF  Subjective questions- India and IMF About International Monetary Fund  The International Monetary Fund (IMF) was set up in 1945 with the objective of promoting world trade by helping nations overcome currency shortage (balance of payment problems).  IMF provides foreign exchange to nations in need and facilitates continuity of foreign trade.  The Board of Governors is the highest decision-making body of the IMF and consists of one governor and one alternate governor for each member country.  The headquarters of the IMF is Washington DC, United States. Background  The IMF was established in July 1944 at the United Nations Bretton Woods Conference in New Hampshire, United States.  The 44 countries at that conference sought to build a framework for economic cooperation to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.  IMF, as per Bretton Woods agreement to encourage international financial cooperation, introduced a system of convertible currencies at fixed exchange rates, and replaced gold with the U.S. dollar (gold at $35 per ounce) for official reserve.  After the Bretton Woods system (system of fixed exchange rates) collapsed in the 1971, the IMF has promoted the system of floating exchange rates.  Countries are free to choose their exchange arrangement, meaning that market forces determine the value of currencies relative to one another. This system continues to be in place today.  Countries which are members of the IMF are also eligible for membership in the International Bank for Reconstruction and Development (IBRD).  IMF was one of the key organisations of the international economic system; its design allowed the system to balance the rebuilding of international capitalism with the maximisation of national economic sovereignty and human welfare, also known as embedded liberalism.  The IMF played a central role in helping the countries of the former Soviet bloc transition from central planning to market-driven economies.  In 1997, a wave of financial crises swept over East Asia, from Thailand to Indonesia to Korea and beyond. The International Monetary Fund created a series of bailouts (rescue packages) for the most-affected economies to enable them to avoid default, tying the packages to currency, banking and financial system reforms.  Global Economic Crisis (2008): IMF undertook major initiatives to strengthen surveillance to respond to a more globalized and interconnected world. These initiatives included revamping the legal framework for surveillance to cover spill-overs (when economic policies in one country can affect others), deepening analysis of risks and financial systems, stepping up assessments of members’ external positions, and responding more promptly to concerns of the members. Objectives of IMF:

www.brainyias.com BrainyIAS (84594-00000)  To ensure balanced international trade  To promote international monetary co-operation.  To eliminate or to minimize exchange restrictions by promoting the system of multilateral payments.  To ensure exchange rate stability  To minimize the imbalances in quantum and duration of international trade.  To grant economic assistance to members countries for eliminating the adverse balance of payment Responsibilities of IMF  Surveillance: To maintain stability and prevent crises in the international monetary system, the IMF reviews country policies and national, regional, and global economic and financial developments through a formal system known as surveillance.  Financial assistance: IMF provides financing to its members breathing room to correct balance of payments problems  Technical assistance: It provides technical assistance and training in several areas, including tax policy and administration, expenditure management, monetary and exchange rate policies, banking and financial system supervision and regulation, legislative frameworks, and statistics, to help member countries strengthen their capacity to design and implement effective policies.  Special Drawing Rights (SDRs): This facility was started in 1971 to improve the situation of international liquidity in the world. The IMF issues an international reserve asset known as Special Drawing Rights that can supplement the official reserves of member countries.  Resources: The primary source of the IMF's financial resources is its members’ quotas, which broadly reflect members’ relative position in the world economy. Lending Facilities of IMF  The Flexible Credit Line (FCL): This instrument is for countries with very strong fundamentals, policies, and track records of policy implementation. It represents a significant shift in how the IMF delivers Fund financial assistance, particularly with recent enhancements, as it has no ongoing (ex post) conditions and no caps on the size of the credit line.  Stand-By Arrangement (SBA): This instrument help countries in economic crisis to overcome the Balance of Payment (BoP) problems.  The Extended Fund Facility is used to help countries address balance of payments difficulties related partly to structural problems that may take longer to correct than macroeconomic imbalances.  The Precautionary and Liquidity Line (PLL) builds on the strengths and broadens the scope of the Precautionary Credit Line (PCL). The PLL provides financing to meet actual or potential balance of payments needs of countries with sound policies, and is intended to serve as insurance and help resolve crises.  The Trade Integration Mechanism allows the IMF to provide loans under one of its facilities to a developing country whose balance of payments is suffering because of multilateral trade liberalization, either because its export earnings decline when it loses preferential access to certain markets or because prices for food imports go up when agricultural subsidies are eliminated. IMF and India  Post-partition period, India had serious balance of payments deficits, particularly with the dollar and other hard currency countries. It was the IMF that came to her rescue.  The Fund granted India loans to meet the financial difficulties arising out of the Indo–Pak conflict of 1965 and 1971.  Since 1970, the assistance that India, as other member countries of the IMF, can obtain from it has been increased through the setting up of the Special Drawing Rights.  In 1981, India was given a massive loan of about Rs. 5,000 crores to overcome foreign exchange crisis resulting from persistent deficit in balance of payments on current account.  India wanted large foreign capital for her various river projects, land reclamation schemes and for the development of communications. Since private foreign capital was not forthcoming, the only

www.brainyias.com BrainyIAS (84594-00000) practicable method of obtaining the necessary capital was to borrow from the International Bank for Reconstruction and Development.  The balance of payments position of India having gone utterly out of gear on account of the oil price escalation since October 1973, the IMF has started making available oil facility by setting up a special fund for the purpose.  India has occupied a special place in the Board of Directors of the Fund. Thus, India had played a creditable role in determining the policies of the Fund. This has increased the India’s prestige in the international circles.

Parallel Economy in India

Relevancy  G.S. Paper 2  Objective questions- features of parallel economy  Subjective questions- impact and depth of parallel economy What is parallel economy?  Black economy is referred by more than 30 different names across the globe as per some international studies. The other names of black economy are parallel economy, black money, informal economy etc.  The parallel economy consists of all the activities in which black incomes are generated and black incomes are factor incomes, property incomes, not reported to direct tax authorities.  Parallel economy in its broadest sense may consist of – o Illegal economy, such as money laundering, smuggling, etc; o Unreported economy including tax evasion; o Unregulated economy i.e. Economic activities outside law and regulations. History Of The Parallel Economy In India:  The British East India Company in late 18th century laid the foundations of both a corrupt bureaucracy and a parallel economy during World War II.  The black economy has grown from about 3% in the mid-50s to 20% by 1980, to 35% by 1990, and 40% by 1995.  The Indian black economy is immense, lucrative, widespread, and has grown significantly since independence.  Supreme Court asked the central government to appraise it of steps taken to implement the recommendations of the Special Investigation Team (SIT) on retrieving black money and to curb the menace of unaccounted wealth. Reasons behind the growth of the black money in the country?  As a percentage of GDP, the black economy is larger than both the industrial and agricultural sectors. Corruption is widespread from the lowest to the highest levels of public administration, law enforcement, judiciary, public enterprise, bureaucracy, and elected officials.  People earning income generated from illegitimate as well as legitimate activities avoid paying taxes because of excessive taxation, greed and perception that government is corrupt and won't use it for public good.  Tax structure, Control and licensing system, donation to political parties, and generation of black money in the public sector, deterioration in the moral and civic standards are the influential factors in parallel economy.  After the ‘Gandhian and Nehruvian era’, officials who lacked their idealism, and were more likely to engage in corruption and rent- seeking practices entered into the government. Implications Of Parallel Economy

www.brainyias.com BrainyIAS (84594-00000)  Cybercrime: o Crypto-currency and unrecorded cash transaction in e-commerce are also emerging means to supply resources to hostile elements in the country.  Economic terrorism: o Pakistan has been flooding the country with counterfeit currency with a view to subverting its economy and funding terrorist activities in different parts of the country. o It is estimated that Pakistan pumped in 16 billion worth of FICN into India in 2010, a figure that rose to 20 billion in 2011 and 25 billion in 2012.  Religious or ideological extremism: o Parallel economy is greatest source of financial help to extremists. o Financial incentives lure unemployed youth towards antinational activities in the name of particular religion or ideology.  Organised crime: o Organised crimes in India especially in metro cities such as Mumbai and Delhi are rising due to flourishing parallel economy. o Such organised criminals also fund for radicalisation of youth and terrorist attacks.  Armed violence: o Armed violence which was hitherto legacy of Maoists or insurgencies is now taking a new form throughout India especially in the form of right wing extremism. o Recently there has been reports of seizure of illegal weapons and public firing by individuals. Black money is easy source of illegal arms trade in India. Strategy for recovering black money So far the Government has adopted a five-pronged strategy to tackle the sensitive issue of Black Money –  Setting up Institutions to Deal with Illicit Funds such as Income Tax Overseas Units.  Joining the Global Crusade Against Black Money  Imparting Skills to the Manpower for Effective Action  Manpower of FT&TR Division in CBDT has been doubled.  Creating an Appropriate Legislative Framework using DTAA and Tax Information Exchange Agreement (TIEA) Recommendations for Black Money Recovery  Creation of effective credible deterrence by Setting up an investigation unit with Enforcement Directorate as the nodal coordinating agency to remove problem of lack of coordination; CAG should audit on suspicious exports vulnerable sectors like Real estate, jewelry, financial markets, have Time frame for Income Tax and CBEC for completing cases.  Reducing disincentives by Rationalization of tax rates, reduce tax terrorism (retrospective amendments), pass GST and Reducing transaction costs by providing internet-based services to pay tax;  Establishment of a central KYC (Know Your Customer) registry to deal with the problem of multiple identities of an individual in financial transactions.  Amend PMLA, FEMA and Make Tax evasion a serious "criminal offence. Reform political funding in India.  To pressurize Swiss authorities to give name of US citizens who have opened numbered bank account in Swiss Banks, US arrested senior bank officers of Union Bank of Switzerland on charges of espionage. India also has Swiss bank branch offices in Mumbai.  To ensure that banks, on a real time basis, report all suspicious transactions, SIT must seek a report from the Financial Intelligence Unit (FIU) of the Indian government on what it has done about suspicious transactions reported by banks. What Type of Economy is followed in India?  Almost 50% of the country’s workforce is dependent on agriculture.

www.brainyias.com BrainyIAS (84594-00000)  Approximately 30% of the workforce is employed in services sector.  2/3rd of the India’s output comes from Services sector.  The productivity of this segment resulted in India shifting more towards market economy.  In the 1990s it opened its economy with privatization, liberalization, and globalization.  Thus we can say, India has a mixed economy.

Airports Authority of India to raise $300 million

Relevancy  G.S. Paper 2  Objective Questions- External commercial borrowing and features  Subjective questions- significance and advantages of ECB  The Sahoo committee report on ECB Why in news?  Airports Authority of India (AAI) is planning to raise close to USD 300 million via the external commercial borrowing (ECB) mode during the next fiscal to fund its capex plans for doubling the passenger-handling capacity of 345 million passengers per annum.  AAI is keen to upgrade some of the airports which are building some greenfield aerodromes, while also modernising underserved and unserved airports under the Udaan scheme. What is External Commercial Borrowing (ECB)?  Any money that has been borrowed from foreign sources for financing commercial activities in India are called external commercial borrowings (ECBs). ECBs are defined as money borrowed from foreign resources, including the following:  Commercial bank loans  Buyers' credit and suppliers' credit  Credit from official export credit agencies and commercial borrowings from the private-sector window of multilateral financial institutions such as International Finance Corporation (Washington), ADB, AFIC, CDC, etc. ECBs in India  India has always promoted capital inflows as a part of the development policy.  The DEA (Department of Economic Affairs), Ministry of Finance, along with Reserve Bank of India, monitors and regulates ECB guidelines and policies.  Unlike China, most of the Indian foreign debt is mainly owned by the private corporate sector.  ECBs have emerged as one of the chief conduits for strengthening the Indian corporate debt market.  RBI recently liberalised the norms for ECB by including more sectors in the window.  The chief purpose for accessing funds through ECBs has evolved over time, with refinancing being the primary reason in the recent past.  There are restrictions with regards to end use of the funds too.  The government follows a well-designed ECB policy - government puts ceiling for the total amount of ECBs that can be obtained by all Indian firms through the ECB route during a year. Advantages  Interest rates are also lower compared to domestic funds.  Due to rising NPAs there is low credit offtake from banks. So ECBs serve the financial needs of the companies.  ECBs provide opportunity to borrow large volume of funds.  The funds are available for relatively long term.  Avenues of lower cost funds can improve the profitability of the companies and can aid economic growth.

www.brainyias.com BrainyIAS (84594-00000)  Corporate can raise ECBs from internationally recognised sources such as banks, export credit agencies, international capital markets etc.  It provides access to international markets for the borrowers and gives good exposure to opportunities globally.  It is a way of raising capital without giving away any control, as debt holders don't have voting rights, etc. Disadvantages  Higher debt on the company’s balance sheet is usually viewed negatively by the rating agencies.  This may result in a possible downgrade by rating agencies which eventually might increase the cost of debt.  The growing importance of ECBs in the composition of external debt is a cause of concern for the Indian economy. Availability of funds at a cheaper rate may bring in lax attitude on the company’s side resulting in excessive borrowing.  This eventually results in higher debt on the balance sheet which may affect many financial ratios adversely.  Since the repayment of the principal and the interest needs to be made in foreign currency, It exposes the company to interest and currency fluctuations.  Companies may have to incur hedging costs or assume exchange rate risk which if goes against may end up negative for the borrowers. The Sahoo Committee report on ECB  The Sahoo Committee was set up in 2013, to develop a framework for access to domestic and overseas capital markets.  The Committee noted that the possibility of market failure can be ameliorated, by requiring firms that borrow in foreign currency to hedge their exchange risk exposure.  The policy should aim at removal of all impediments to the development of the domestic rupee debt market.  The Committee made an assessment of the currency risk by Indian firms undertaking ECB.  The Indian domestic rupee debt market is a viable alternative to foreign borrowing for financing Indian firms and does not entail any market failure.  The present complex array of controls on foreign currency borrowing should be done away with.

What are AT-1 Bonds?

Relevancy  G.S. Paper 2  About AT-1 bonds and key points  Basel norms Why in news?  Recently, the Reserve Bank of India (RBI) has made a proposal to write-down Additional Tier-1 (AT-1) bonds as part of the SBI-led restructuring package for Yes Bank.  The government and the RBI seem to have worked overtime just before the weekend to put together a bailout package for YES Bank.  With the SBI taking up an equity stake in the bank and a lookout on for other white knights, depositors in the troubled bank can probably look forward to an amicable resolution.  But one segment of investors which has been left high and dry is the holders of the bank’s AT1 bonds. What are AT-1 Bonds?

www.brainyias.com BrainyIAS (84594-00000)  AT-1 bonds are like any other bonds issued by banks and companies, but pay a slightly higher rate of interest compared to other bonds.  AT-1 bonds are a type of unsecured, perpetual bonds that banks issue to shore up their core capital base to meet the Basel-III norms.  There are Two Routes through which these bonds can be Acquired: o Initial private placement offers of AT-1 bonds by banks seeking to raise money. o Secondary market buys of already-traded AT-1 bonds. Key points about AT-1 Bonds:  These bonds are also listed and traded on the exchanges. So, if an AT-1 bondholder needs money, he can sell it in the secondary market.  Investors cannot return these bonds to the issuing bank and get the money. i.e there is no put optionavailable to its holders.  However, the issuing banks have the option to recall AT-1 bonds issued by them (termed call options that allow banks to redeem them after 5 or 10 years).  AT-1 bonds are regulated by RBI. If the RBI feels that a bank needs a rescue, it can simply ask the bank to write off its outstanding AT-1 bonds without consulting its investors.  Banks issuing AT-1 bonds can skip interest payouts for a particular year or even reduce the bonds’ face value. Basel-III Norms:  It is an international regulatory accord that introduced a set of reforms designed to improve the regulation, supervision and risk management within the banking sector, post 2008 financial crisis.  Under the Basel-III norms, banks were asked to maintain a certain minimum level of capital and not lend all the money they receive from deposits.  Common Equity Tier 1 capital includes equity instruments where returns are linked to the banks’ performance and therefore the performance of the share price.  Additional Tier-1 capital are perpetual bonds which carry a fixed coupon payable annually from past or present profits of the bank. Risks associated with AT-1 bonds  The issuing bank has the discretion to skip interest payment.  The bank has to maintain a Common equity tier I ratio of 5%, failing which the bonds can get written down. Who are most affected?  There are individuals whose money in fixed deposits was converted into the AT1 bonds with the promise of a higher return.  Mainly the investors are the Institutional investors such as Mutual funds.  Many senior citizens also fell for the promise. So who should invest in AT1 bonds?  Only affluent investors who are willing to take on higher risk of a capital loss for higher yields.

Predatory Pricing in India

Relevancy  G.S. Paper 3  Effects of liberalization on the economy, changes in industrial policy and their effects  Ensuring fair competition and dealing with the problem of predatory pricing What is Predatory Pricing?

www.brainyias.com BrainyIAS (84594-00000)  Predatory pricing, also known as undercutting, is a pricing strategy in which a company prices a product or service artificially low to gain new customers, drive competitors out of the market, or create barriers to entry for new potential competitors.  In India, the Competition Act of 2002, lays down the ground-rules on what constitutes predatory pricing. ‘Predatory pricing’ figures in the section on abuse of dominant position by a market player. How predatory pricing works  A company that can afford the initial losses caused by predatory pricing has an unfair market advantage in the long run.  Investors see such extremely low costs as a good way to increase market share and then to raise prices and create equally extreme profitability further down the line.  This predatory pricing strategy kicks out new entrants, and makes the barrier to entry much harder for new businesses.  This stops the regular competitive market from charging reasonable prices for the consumer and retailer.  In many ways, predatory pricing can be thought of as an anti-competitive pricing practice that can only be used in the short run. How predatory pricing affects the market Short-term effects  The company employing predatory pricing will run initially at a loss.  Competitors may also finance a period of loss in order to keep pace with the predatory company.  Companies that are not able to shoulder the loss, however, will suffer and lose a considerable amount of customers. Consumers will initially benefit from outrageously lower prices that the predatory company is selling at.  Customers might benefit from aggressive competition in the market, if competitors are able to hold their ground, with higher-quality products and services as companies are motivated to establish an advantage over competitors. Long-term effects  Competitors not capable of sustaining themselves against the predatory company will eventually be driven out of the market altogether.  Meanwhile, if the company employing predatory tactics is not regulated in accordance with the law, they will form a monopoly, having now successfully undercut the competition. Under such conditions, prices are likely to rise sharply to compensate for the initial period of short- term loss.  Product quality is likely to drop with no competition around to incentivize quality.  Meanwhile, innovation is usually stifled due to the monopoly company now controlling the market. Customers will suffer from abnormally high prices from the monopoly, as well as a drop in the quality of the product or service. The Legality of Predatory Pricing  Predatory pricing is deemed illegal and anti-competitive in many countries.  Allegations of wrongdoings are hard to prove as firms can deem it as price competition rather than a deliberate act to drive out the competition.  The Competition Act, 2002 outlaws predatory pricing, treating it as an abuse of dominant position, prohibited under Section 4. Predatory pricing under the Act means the sale of goods or provision of services, at a price below cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors. Predatory pricing in India

www.brainyias.com BrainyIAS (84594-00000)  The Confederation of All India Traders (CAIT), a trade body representing brick-and-mortar retailers, has been urging the Commerce and Finance Ministers to launch a probe into the deep discounting practices of e-commerce players for ‘predatory pricing’.  In value terms, online sales still make up less than 5 per cent of the total retail sales in India. It may therefore be hard to accuse them of ‘abusing their dominant position’ though they have deep pockets.  For a case of predatory pricing to stick, the CCI will have to establish that e-commerce platforms are actually selling products below their costs of production. This can be tricky, especially as sellers on these platforms aren’t complaining. In fact, predatory pricing is a much-debated facet of anti-competition law globally, because these laws are essentially meant to protect consumer interests.

www.brainyias.com BrainyIAS (84594-00000) AGRICULTURE

Electronic National Agriculture Market (e-NAM) Platform

Relevancy  G.S. Paper 3 (Agriculture)  About e-NAM, scope and implementation  APMC objectives and issues Why in news?  The government is pushing the states to allow farmer producers’ organisations (FPOs) to trade from their premises through the electronic National Agriculture Market (e-NAM) platform, so that farmers get directly connected to traders and processors from across the country.  If this is achieved, it could be a significant reform in agriculture marketing and may weaken the grip of APMC mandis over trade. What is the issue?  The role of FPOs will be very crucial to build a direct link between traders and farmers.  Out of over 900 FPOs registered under e-NAM, close to 90 have been trading through the e-NAM platform set up at mandis.  The growth of e-NAM has been slow as many states do not promote it due to pressure from traders and commission agents operating in mandis. What is e-NAM?  e-NAM or the e-trading online platform for the National Agriculture Market (NAM) was launched by the Prime Minister on April 2016.  e – National Agriculture Market (e-NAM) is a pan-India electronic trading portal which nets the prevailing Agricultural Produce Market Committees (APMC) Mandis for making a united national market for agricultural commodities.  The e-NAM project would operate via the online portal that is linked to the states’ mandis (Wholesale markets).  All the participating states will be providing the software (Website and Mobile Application) for e-NAM at no cost. What was the mechanism prior to e-NAM?  Agriculture marketing is administered by the States as per their agri-marketing regulations.  Under which, the State is divided into several market areas, each of which is administered by a separate Agricultural Produce Marketing Committee (APMC) which imposes its own marketing regulation.  This fragmentation of markets, even within the State, hinders free flow of agri commodities from one market area to another without commensurate benefit to the farmer. e-NAM mechanism  A competent person will be appointed for one year in each sharing mandi in order to enable the seamless and smooth operation of the portal.  Some key points related to e-NAM are given below: o Farmers under this scheme will be given ‘farmer helpline services’ 24×7 to help them obtain information about the portal. o The GOI is offering a grant of Rs.30 lakhs to the participating agriculture mandis. o Small Farmers’ Agribusiness Consortium (SFAC) is the lead promoter of National Agricultural Market (eNAM). o SFAC through open tender selects a Partner to develop, operate and maintain the NAM e- platform. o SFAC which is formulated under the Department of Agriculture, Cooperation & Farmers’ Welfare (DAC&FW). e-NAM & Its Role in the Agriculture Industry

www.brainyias.com BrainyIAS (84594-00000)  The farmers can benefit if they were to find ways for aggregating produce on their own, bypassing the Arhatiya (business representative) and even the local mandi (Marketplace) in the process.  e – National Agriculture Market (e-NAM) nets the prevailing Agricultural Produce Market Committees (APMC) Mandis for making a united national market for agricultural commodities.  The e-NAM Portal offers a single-window service for all Agricultural Produce Market Committees related information and services. Advantages of NAM  For the farmers, NAM promises more options for sale which would increase his access to markets through warehouse based sales and thus obviate the need to transport his produce to the mandi.  Bulk buyers, processors, exporters etc. benefit from being able to participate directly in trading at the local mandi / market level through the NAM platform, thereby reducing their intermediation costs.  For the local trader in the mandi / market, NAM offers the opportunity to access a larger national market for secondary trading.  The gradual integration of all the major mandis in the States into NAM will ensure common procedures for issue of licences, levy of fee and movement of produce. Issues with e-NAM  The huge share of the trade recorded in the e-NAM portal was actually carried out offline and the values were fed into the portal to make it look like genuine online transactions.  State agricultural departments have been finding it difficult to convince all stakeholders like farmers, traders and commission agents to move to the online platform.  Lack of technical expertise and internet facility at the State Agricultural Departments has also delayed the setting up of grading/assaying facilities.  The platform is not fully functional in any State as there are no scientific sorting/grading facilities or quality testing machines. Focus areas under e-NAM  e-NAM Implementation  Informing and trading commodities on e-NAM  Increasing the involvement of traders on e-NAM  Aggregate the quantity and value of supplies being traded on e-NAM  Increasing the figures of bids cited by traders  Encouraging cashless transactions, e.g. online payments, to farmers  Promoting inter-market trade between Mandis  Offering access to Soil Testing Laboratories to farmers  Accompanying awareness and farmer orientation programs  Providing elementary amenities and facilities for cleaning, sorting and packing to farmers in the Mandi  Creating logistics and infrastructure available to encourage inter-market trade on the e-NAM platform  Undertaking local initiatives and innovative systems to influence greater strength to e-NAM  Safeguarding transparency and accountability in implementation. What is Agriculture Produce Market Committee (APMC)?  The Agricultural Produce Market Committee (APMC) Act regulates mandis (agricultural markets).  Farmers are compulsorily required to auction their agricultural produce at a mandi.  Only licensed traders can purchase from the farmers at the mandi. Issues with APMC  Agriculture is a state subject. Thus, various states have passed different APMC acts to regulate agricultural markets.  State APMCs members are elected or nominated by the state government as per the APMC acts. However, often regular elections are not held and APMCs function under bureaucratic control.  Exploitation by traders by delaying payments to farmers  The payment made to farmers is as low as one-third to one-fourth of the retail prices of agricultural produce and traders do not give sale slips to farmers to save tax. As a result, farmers do not possess any proof of sale of agricultural produce.

www.brainyias.com BrainyIAS (84594-00000)  Double commission of Middleman or trader increases the price of agricultural produce.  No auction takes place in mandis. Even if an auction is held, traders have formed informal cartels and deliberately keep the prices low.  No minimum support price (MSP) for other agricultural commodities such as fruits and vegetables, farmers rely on traders for the determination of prices.  Hoarding of agricultural produce by traders to secure high prices from the retailers.  Infrastructure development has been slow or negligible in mandis.  Issue of license to traders by wrong means like buying shops at high prices or bribing. As a result, traders (also called commission agents) exploit farmers to recover their investment. Conculsion  In conclusion, we can say that this will turn out beneficial to the farmers when they’re receiving a higher price than before on their produce.  Larger retail stores can benefit from this and will be attracted to this due to higher profit margins since no intermediaries will be involved.  The intermediaries that are responsible for the claiming charges that result in higher market price can be put to trial.  When the local market prices are high, the state government has been seen blocking supplies in order to create an imbalance in Demand and Supply; hence it is critical to ensure that the software being used doesn’t have any loopholes.

Khola chilli gets GI tag

Relevancy  G.S. Prelims- G.I tags  G.S. Mains paper 3 (Agriculture)  Subjective questions- Significance of GI Tag Why in news?  The state government has obtained a Geographic Indication (GI) tag for the popular Khola chillies grown by the Canacona Farmers Association.  The government now plans to pursue GI tags for Goa’s coconut vinegar, local rice varieties, mancurad mango, Harmal chillies, Mandoli bananas and other local produce. What is GI Tag?  A GI or Geographical Indication is a name or a sign given to certain products that relate to a specific geographical location or origins like a region, town or country.  Using Geographical Indications may be regarded as a certification that the particular product is produced as per traditional methods, has certain specific qualities, or has a particular reputation because of its geographical origin.  Geographical indications are typically used for wine and spirit drinks, foodstuffs, agricultural products, handicrafts, and industrial products.  GI Tag ensures that none other than those registered as authorized users are allowed to use the popular product name. In order to function as a GI, a sign must identify a product as originating in a given place. Who accords and regulates Geographical Indications?  Geographical Indications are covered as a component of intellectual property rights (IPRs) under the Paris Convention for the Protection of Industrial Property.  At the International level, GI is governed by the World Trade Organisation’s (WTO’s) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

www.brainyias.com BrainyIAS (84594-00000)  In India, Geographical Indications registration is administered by the Geographical Indications of Goods (Registration and Protection) Act, 1999 which came into force with effect from September 2003. Benefits of GI Tags  Prevents unauthorised use of GI tag products by others  Legal protection to the products  Promotes the economic prosperity of producers of GI tag goods by enhancing their demand in national and international markets.  It helps consumers to get quality products of desired traits and is assured of authenticity. Issues of GI Tags  There has been a rise in disputes over the question of the place of origin of the product under consideration. This gets aggravated due to a lack of clear historical evidence.  For example, the disputes surrounding the origin of Roshogulla, a popular dessert, from eastern India. Both West Bengal and Odisha claim that the dessert originated in their own states. By ‘winning’ a GI tag, each state is looking to promote its own cultural and regional jingoism over the other.  This sort of unhealthy competition tends to polarise the country on regional, cultural and linguistic lines. Most states in their rush to corner as many GI tags as possible have forgotten to pay attention to enhance the value of products already having a GI tag.  As a result, neither the local community nor the customer is benefitting economically. This trend undercuts the very idea of GI protection to native endemic products. Importance of GI Tag  It enables the producers to build a reputation and goodwill around their products, which often fetch a premium price.  GI tag helps the producers to differentiate their products from competing products in the mark.  GIs have great potential to play a major role in trade between countries.  The products help in export earning, promotion of tourism, cultural heritage and national identity. For example Kanjeevaram silk sarees and Pochampally Ikat contribute to exports and popularity.  Owing to the premium prices that many GIs command today, there is a possibility of preserving many traditional skills.  Legal protection to GIs protect livelihoods and encourage employment  GI allows genuine producers to capture the market and creates entry barriers for fakes.  Benefit to the rural economy by improving the incomes of farmers or nonfarmers. Geographical Indications Protection  Geographical indications are protected and preserved in various countries and regional systems through a wide array of approaches and often using a consolidation of two or more approaches.  There are three major ways to protect a geographical indication: o Using collective or certification marks o So-called sui generis systems (i.e. Special regimes of protection) o Techniques concentrating on business practices, including administrative product approval schemes. Khola or canacona chilli  It is believed that most of the types of chillies grown in Goa today were introduced by the Portuguese and over the centuries, different hybrid varieties have emerged from what was brought from overseas.  The GI tagging of Canacona chilli has opened up a huge revenue earning opportunity to the farmers of Khola and other villages like Cotigao, Gaondogrem, Sristhal and Barcem.  The locally-grown Khola or Canacona chillies are unique owing to their brilliant red colour and medium-pungent taste.

www.brainyias.com BrainyIAS (84594-00000)  There are approximately 15 varities of chilli in Goa ranging from Portugali mirsaang, tarvotti chilli, aldona chilli etc.  The production is between 100 to 150 tonnes  About 2,000 farmers grow Canacona chilli in the region, What is special about Khola Chilli?  A lot of preparation goes before the saplings of the chilly saplings are transplanted by hand immediately after the monsoon strikes in the month of June.  The peculiarity of this chilly is that it’s red in colour with medium pungent taste and it is grown on the hill slopes of Canacona. Products made using Khola Chilli  Khola Chilli Flakes  Khola Chilli Powder  Red Chilli Sauce  Recheado Masala  Raw Mango Pickle  Chilli Pickle Important GI Tags of 2019  Tawlhlohpuan – is a fine quality fabric woven: Mizoram  Palani Panchamirtham – a ‘prasadam’ or religious offering in temples: Palani Town, Tamil Nadu  Tirur betel vine – valued for its medicinal and cultural usages: Malappuram district of Kerala  Mizo Puanchei – a shawl considered the most colourful textile: Mizoram  Idu Mishmi Textile-Handicraft– Arunachal Pradesh  Odisha rasagola – for the delectable eastern sweet: Odisha  Kandangi Saree-Handicraft– Tamil Nadu  Dindigul Locks-Manufactured– Tamil Nadu  Kaji Nemu-Agricultural– Assam  Srivilliputtur Palkova– Food Stuff- Tamil Nadu  Goan cashew feni was the first product from Goa to acquire GI status. Other future Contenders of GI Tags in Goa  Cow peas from Nerul  Goa’s mango king  Ladyfingers and a pepper variety from Ponda  Mancurad  Taleigao brinjal

www.brainyias.com BrainyIAS (84594-00000) SCIENCE AND TECHNOLOGY

Henneguya Salminicola: Anaerobic Parasite

Relevancy  G.S. Paper 3  Anaerobic parasite  Significance of this discovery Why in news?  Scientists have discovered an animal Henneguya Salminicola which does not need oxygen to produce the energy needed for its survival.  This changes one of science’s assumptions that all animals use aerobic. Background  Animals, including humans, need energy to perform the various tasks that are essential for survival.  Aerobic respiration is one such chemical reaction through which organisms take in oxygen and release carbon dioxide into the atmosphere. About Henneguya salminicola  The discovery bears enormous significance for evolutionary research.  It is a tiny, less than 10-celled parasite which lives in the muscles of salmon fish.  It is a relative of jellyfish and corals and as it evolved, it gave up breathing and consuming oxygen or became anaerobic to produce energy.  It does not not have a mitochondrial genome.  Absense of Mitochondria indicates that the parasite does not breathe oxygen.  Aerobic respiration was thought to be prevalent in animals but now it is confirmed that animals can survive with anaerobic respiration.  However, it is not yet clear how the parasite generates energy.  It may be drawing it from the surrounding fish cells or it may have a different type of respiration such as oxygen-free breathing, which typically characterises anaerobic non-animal organisms like fungi, amoebas or ciliate lineages. What is Aerobic respiration?  Animals, including humans, need energy to perform the various tasks that are essential for survival.  Aerobic respiration is one such chemical reaction through which organisms take in oxygen and release carbon dioxide into the atmosphere.  Through this mechanism, energy is transferred to cells, which can use it for multiple purposes — for instance, to burn food.  Mitochondria is the “powerhouse” of the cell, which captures oxygen to make energy — its absence in the H. salminicola genome indicates that the parasite does not breathe oxygen.

Electronic Waste Recycling in India

Relevancy  G.S. Paper 2 and 3  Importance of e-waste management  Prelims level: E-Waste Management Rules 2016  Mains level: Problem of e-waste and ways to tackle it

www.brainyias.com BrainyIAS (84594-00000) Why in news?  The government has informed recently that e-waste recycling has doubled in India compared to 2017-2018.  The government has reported that the reecyling rate of 10% in 2017-18 has risen to 20% in 2018-19. What is E-waste in India?  As India is the fifth largest E-waste producing country in the world.  According to the Global E-Waste monitor 2017, India generates about 2 million tommes of e-waste annualy.  Some examples of E-waste are: o Computers o Televisions o VCRs o Stereos o Copiers, and o Fax machines  Electronic scrap materials like CPUs consist of possibly harmful substances like lead, beryllium, cadmium or brominated flame retardants.  The recycling and disposal of such electronic waste involved great risk to the workers and communities in developing nations. A lot of care must be taken to prevent hazardous exposure in recycling operations. Care must also be taken to prevent the leaking of harmful materials such as heavy metals from incinerator ashes and landfills. E-waste Management Rules in India  The Environment, Forest and Climate Change Ministry (MoEF&CC) has announced the E-Waste Management Rules 2016.  The new Rules make for stricter norms and are a part of the government’s increased commitment towards environmental governance.  These new rules replaced the earlier E-Waste (Management and Handling) Rules of 2011. Highlights of the new E-waste Management Rules 2016:  The Rules for the first time, bring producers under the ambit of the Extended Producer Responsibility or EPR, together with the targets.  Producers have been made accountable for e-waste collection and for e-waste exchange as well.  CFLs or Compact Fluorescent Lamps as well as other lamps with mercury, and similar equipment have been brought under the purview of the rules.  Additional stakeholders included are: o Manufacturers o Refurbishers and Producer Responsibility Organizations. o Dealers  India’s Environment Ministry has notified rules targeting the wide range of groups like hotels, residential colonies, bulk producers of consumer goods, ports, railway stations, airports and pilgrimage spots.  This is to ensure that the solid waste generated in their facilities are treated and recycled. Key Points of E-waste Management Rules 2016:  Census towns below a lakh would be given three years to establish solid waste processing facilities  Local bodies with a population of one lakh or above were supposed to establish solid waste processing facilities within two years,  The rules on solid waste management have been amended after 16 years.  Old and discarded dump sites would have to be shut-down or bio-remedied within five years.  A transition period of two to five years would be in place beyond which fines would be imposed as per the country’s Environment Minister.

www.brainyias.com BrainyIAS (84594-00000)  Garbage management is the responsibility of municipal bodies, they would have rights to charge user fees and levy spot fines for littering and non-segregation. Reasons for rising e-waste  E-waste is generated when electrical or electronic equipment (EEE) is discarded, or returned within warranty, by consumers, and also from manufacturing and repair rejects  While technology obsolescence creates e-waste (for example, landline phones, 2G vs 4G), power supply voltage surges which damage electronics are a major factor contributing to India’s e-waste  Discarded laptops, desktops, cellphones and their batteries, air conditioners and television sets, cables and wires, tubelights and CFLs which contain mercury, are some examples of e-waste  An additional problem arises when developed countries export their e-waste for recycling and/or disposal (legally or illegally) to developing countries, including India  India enjoys a frugal hand-me-down culture with a long line of re-users from a younger sibling to a maid to her village. As a result, our e-waste takes a lot longer to reach end of life Poor recycling & associated health hazards  A study by ASSOCHAM and NEC finds that around 10% per cent of India’s e-waste gets recycled (2017-18), less than the global recycling rate of only 20 per cent (which was achieved in 2018-19).  95 percent of India’s e-waste is managed by the unorganised sector (kabadiwalas, scrap dealers and dismantlers) using dangerous methods to recover metals from circuit-boards and wires  The workers themselves ignore safety measures needed for their work  The smoke from such burning is known to cause cancer, damage the nervous system, and also poses several other health hazards  Since electrical wires are almost invariably encased in PVC, which contains 57 per cent chlorine, the act of burning produces deadly dioxins  The National Green Tribunal has advised a ban on single-use PVC and short-life PVC products but not on wires and cables Measures that can be taken  Ideally, we should all purchase new products turning in our old ones for a discount so that dealers become aggregators for channelising e-items to authorised dismantlers  Management of e-waste requires its dismantling, refurbishment or recycling and safe disposal  The E-Waste Management Rules 2016 address these issues. Extended producer responsibility is mandated to ensure effective plans for the collection, setting up collection centres and buyback mechanisms or a deposit refund scheme  But the Rules need to be backed by enforcement of the regulatory framework, provision of the necessary infrastructure, and an enabling environment for compliance  Producers can offer attractive buyback prices for circuit boards and channelise their recycling to the formal sector  Wire stripping units can be set up at the points of aggregation and burning, funded by wire and cable manufacturers  Cities should organise quarterly collection drives or provide drop -off centres. Producers should set up collection centres for EEE

WaxWorm- Plastic Eating Caterpillar

Relevancy  G.S. Paper 3 (science and technology) Why in news?  A small waxworm could be useful in our fight against plastic waste, one of the main environmental problems of the modern era.

www.brainyias.com BrainyIAS (84594-00000) Background  About eight million tons of it ends up in the oceans every year.  Humans are addicted to plastic, a material that we can find almost everywhere but that is also very hard to get rid of. About this caterpillar  Researchers from the UK and Spain discovered that a species of caterpillar was capable of tearing apart polyethylene, one of the most common types of plastic.  The waxworm or wax-moth, could digest it and then produce ethylene glycol as a by-product.  Wax moth (Galleria mellonella) caterpillars live in beehives, feeding on honey and wax.  Other organisms could also do this but not as fast, which made this inconspicuous creature particularly interesting.  It remains unclear, whether the caterpillars digest the plastic with enzymes in their gut, or whether they break the substance down through a process of "mechanical milling"—in which case the plastic would be excreted chemically unchanged. Significance  The discovery opened the door to a new way of dealing with plastic pollution, but more research was needed to understand the internal mechanism of the caterpillar.  The caterpillars represent an important breakthrough and help deal with plastics, especially those that are hard to recycle.  Another group of researchers isolated the bacteria in the stomach of the waxworm and fed them just with plastic for a full year.  This helped the researchers to identify the microorganisms that are involved in the process of breaking down the plastic, which could lead to creating a technology to eliminate plastic permanently.

India shares SARS-CoV-2 genome

Relevancy  G.S. Paper 3 (science and technology)  Developments in Biotechnology Why in news?  India has finally shared two whole genome sequence data of the novel coronavirus (SARS-CoV- 2) with the Global Initiative on Sharing All Influenza Data (GISAID). Background  The two sequences were shared by the Pune-based National Institute of Virology.  This news comes after report that India has not shared any genome sequence data with the GISAID. About Global Initiative on Sharing All Influenza Data (GISAID)  GISAID is recognised as an effective and trusted mechanism for rapid sharing of both published and ‘unpublished’ influenza data.  It Provides a collection of influenza sequences containing associated metadata, both clinical and epidemiological. GISAID EpiFlu database is a resource that stores information about Influenza virus.  Initially spurred by the global threat posed by human infections with highly pathogenic avian influenza H5N1, GISAID introduced its novel sharing mechanism in 2008 that permits free and open access to influenza data, to anyone who positively identifies himself or herself, and agrees to respect the inherent rights of contributors.  The Initiative has earned widespread international support around the goal of better understanding the spread and evolution of the influenza virus, its transmissibility and pathogenicity.

www.brainyias.com BrainyIAS (84594-00000)  With this goal in mind, the Initiative determined that scientists from different fields of expertise needed full access to comprehensive genetic sequencing, clinical and epidemiological data, as well as analysis from both human and animal isolates in order to better understand the virus and its potential mutation to a pandemic pathogen.  The Initiative aims to provide developing countries with better access to scientific research and the development of potential pandemic flu vaccines to lessen its dependence on foreign aid. It is already hailed as a model for future initiatives.  A unique collaboration ensued, involving, in addition to members of WHO’s GISRS and OIE/FAO reference laboratories, the wider influenza research community along with officials in governmental institutions and non-governmental organisations. Details  The whole genome sequences of two oronasopharynx (mouth, nose, throat) samples collected on January 27 and 31 from two COVID-19 patients in Kerala were deposited in GenBank.  GISAID said it had updated the database with two SARS-CoV-2 sequences from Kerala and these sequences do not link very closely to other sequences in the tree.  At this point, it is not clear why the sequences appear to differ from the rest in the phylogenetic tree. It could have been possibly due to sequencing errors.  Sequencing the genome of novel coronavirus will help us to know where the virus came from and how the virus has spread.  So far, 26 countries, including India, have shared 178 SARS-CoV-2 genome sequences with the GISAID. At 70, China has shared the highest number of sequences.  The other countries that have shared higher number of sequences are the U.S. (22), Australia and Japan (10 each), and Singapore and South Korea (eight each). Nepal, Vietnam and Cambodia have also shared one sequence each.

WHO declared SARS-CoV-2 a pandemic

Relevancy  G.S. Paper 2, 3  Disaster & Disaster Management Why in news?  WHO recently declared COVID-19 outbreak pandemic at this moment. What is a pandemic?  A pandemic is a measure of the spread of a disease.  When a new disease spreads over a vast geographical area covering several countries and continents, and most people do not have immunity against it, the outbreak is termed a pandemic.  It implies a higher level of concern than an epidemic, which the US Centers of Disease and Control Prevention (CDC) defines as the spread of a disease in a localised area or country.  There is no fixed number of cases or deaths that determine when an outbreak becomes a pandemic.  The Ebola virus, which killed thousands in West Africa, is an epidemic as it is yet to mark its presence on other continents.  Other outbreaks caused by coronaviruses such as MERS (2012) and SARS (2002), which spread to 27 and 26 countries respectively, were not labeled pandemics because they were eventually contained. Pandemics in the past  A major example is the Spanish flu outbreak of 1918, which killed between 20-50 million.  Cholera pandemics have been declared multiple times between 1817 and 1975.  In 1968, an pandemic was declared for H3N2 that caused about a million deaths.  The last pandemic declared by the WHO was in 2009, for H1N1.

www.brainyias.com BrainyIAS (84594-00000) Why has WHO declared a pandemic for COVID-19?  China announced the outbreak on December 31 and declared a public health emergency on January 30.  The WHO waited for 72 days before declaring it a pandemic.  The outbreak was so far mostly limited to China, which has taken stringent countermeasures.  In the last two weeks, cases outside China increased thirteen-fold and countries infected have tripled.  Italy, for instance, had 888 cases on February 29 which rose to 4,636 in a week. Effect of this declaration by WHO  The categorisation as a pandemic can lead to more government attention.  The categorisation by WHO indicates the risk of disease for countries to take preventive measures.  It will help improve funding by international organisations to combat coronavirus. Measures to stop spread  Efforts should also be focused on preventing outbreaks in hospitals and spread in the community.  The priority should be to detect cases early and isolate people who test positive for the virus.  Once a case is detected, the focus should be to trace the contacts and treat them if already infected.  One way to stop the spread in the community is to avoid mass gathering in enclosed spaces.  Though the average incubation period is five-seven days, a few have shown up symptoms at the end of 24 days.

COVID-19 Virus

Relevancy  G.S. Paper 3 (science and technology, disaster and disaster management)  Significance, types, diagnosis and treatment of coronavirus  Impact and role in India What is Corona Virus?  Normally, coronavirus is a large family of viruses that are often the source of respiratory infections, including the common cold.  Coronaviruses were first identified in the 1960s, but their origin is unknown.  They get their name from their crown-like shape.  Most coronaviruses spread the same way other cold-causing viruses do: through infected people coughing and sneezing, by touching an infected person’s hands or face, or by touching things such as doorknobs that infected people have touched.  Almost everyone gets a coronavirus infection at least once in their life, most likely as a young child.  Most of the viruses are common among animals, but sometimes, an animal-based coronavirus mutates and successfully finds a human host. Outbreak of the virus  Wuhan, the 7th-largest city in China, is the epicentre of a virus outbreak, the first few cases of which were reported in December 2019.  It was identified after people developed pneumonia without an evident cause and where current vaccines and treatment methods were not effective.  There have been around 80000 people infected with the virus in China. There have also been almost 3000 fatalities there, exceeding those from SARS.  Cases have also been reported outside China, in Hong Kong, South Korea, Iran, Italy, Australia, Thailand, France, Spain, Germany, the US, countries in West Asia, etc. totalling over 90 countries. India reported its first case towards the end of January 2020. ‘  Worldwide, there have been more than 1 lakh cases. www.brainyias.com BrainyIAS (84594-00000)  There is not much known about the new coronavirus, which has been designated 2019-nCoV.  It is considered a novel virus outbreak because the virus is novel (new – not seen earlier). Human coronavirus There are seven strains of human coronaviruses. They are:  Human coronavirus 229E (HCoV-229E)  Human coronavirus OC43 (HCoV-OC43)  SARS-CoV  Human coronavirus NL63 (HCoV-NL63, New Haven coronavirus)  Human coronavirus HKU1  Middle East respiratory syndrome coronavirus (MERS-CoV)  Novel coronavirus (2019-nCoV) – Wuhan pneumonia or Wuhan coronavirus Coronaviruses are known to cause a significant percentage of all common colds in human beings (adults and children). Transmission Human coronaviruses most commonly spread from an infected person to others through  the air by coughing and sneezing  close personal contact, such as touching or shaking hands  touching an object or surface with the virus on it, then touching your mouth, nose, or eyes before washing your hands  rarely, fecal contamination Symptoms The symptoms depend on the type of coronavirus and how serious the infection is. If you have a mild to moderate upper-respiratory infection such as the common cold, your symptoms may include  Runny nose  Headache  Cough  Sore throat  Fever  Not feeling well overall  Some coronaviruses can cause severe symptoms. The infections may turn into bronchitis and pneumonia, which cause symptoms such as  Fever, which may be quite high if you have pneumonia  Cough with mucus  Shortness of breath  Chest pain or tightness when you breathe and cough  Severe infections are more common in people with heart or lung diseases, people with weakened immune systems, infants, and older adults. Other human coronavirus in headlines Middle East Respiratory Syndrome (MERS):  Middle East Respiratory Syndrome (MERS) is a severe respiratory illness that mainly involves the upper respiratory tract. It causes fever, coughing, and shortness of breath. About 30% of people who have gotten this illness have died. Some people only have mild symptoms.  MERS is caused by the Middle East Respiratory Syndrome Coronavirus (MERS-CoV). It was first reported in Saudi Arabia in 2012 and then spread to many countries. Most cases were spread from people who traveled to the Middle Eastern countries Severe acute respiratory syndrome (SARS):  Severe acute respiratory syndrome (SARS) is a serious form of pneumonia. Infection with the SARS virus causes acute respiratory distress (severe breathing difficulty) and sometimes death.

www.brainyias.com BrainyIAS (84594-00000)  Expand SectionSARS is caused by a member of the coronavirus family of viruses (the same family that can cause the common cold). It is believed the 2003 epidemic started when the virus spread from small mammals in China Are there two types of COVID-19 viruses?  Through their study, researchers have proposed that SARS-CoV-2 can be classified into two types: L and S, but it remains to be seen if the L type evolved from the S type in humans or in an intermediate host.  The researchers have found out that while the L type was prevalent in over 70 per cent of the cases analyzed, the S type of the virus is the ancestral version, which means that the L type is derived from the S type and it transmits and replicates faster in human populations.  Because of this higher transmission rate, the L type is considered to be more aggressive. Treatment  There are no specific treatments for illnesses caused by human coronaviruses.  Most people with common human coronavirus illness will recover on their own.  However, you can do some things to relieve your symptoms  take pain and fever medications (Caution: do not give Aspirin to children)  use a room humidifier or take a hot shower to help ease a sore throat and cough  If you are mildly sick, you should  drink plenty of liquids  stay home and rest What Indian government is doing about COVID-19?  Indian government had airlifted its citizens from Wuhan and kept the individuals in quarantine for 14 days  The government has extended thermal screening to 20 airports along with adding 15 new laboratories to test the virus as a precautionary measure  For travel, the existing visas, including Indian visas, from China and Iran stand suspended. It is advised to avoid traveling to Iran, Italy, South Korea and Singapore  Mumbai port trust has been instructed to not to give any shore permit to any vessel coming from China  The government has also urged all the passengers who have travelled to China recently to come forward for self-reporting at the nearest health facility if they experience symptoms like fever, cough, respiratory distress etc.  A 24x7 helpline number has also been issues for the query on coronavirus

RaIDer-X

Relevancy  For Prelims: What is it? Key features?  For Mains: Significance and it’s relevance today. Why in news?  The Defence Research and Development Organisation (DRDO) and the Indian Institute of Science in Bangalore have developed a new bomb detection device called Raider-X. What is RaIDer-X?  It is an explosives detection device.  It can detect up to 20 explosives from a stand-off distance of two meters.  Developed by the High Energy Material Research Laboratory (HEMRL) — an arm of the DRDO — in Pune and the Indian Institute of Science in Bangalore.  It can also discern bulk explosives even if they have been concealed.

www.brainyias.com BrainyIAS (84594-00000) Applications:  The device has various applications including narcotics, for local police, for customs and other detection agencies who need to detect various elements which may be explosive or non-explosive in nature. Significance:  Most of the recent terrorist attacks had explosives that were made from easily available ingredients like petrol and gelatin sticks rather than high-end materials.  And devices like RaIDer-X are incremental to thwarting the threat from homemade explosives.

www.brainyias.com BrainyIAS (84594-00000) INTERNATIONAL AFFAIRS AND GLOBAL ISSUES

Oil Price Diplomacy

Relevancy  G.S. Paper 2 (Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.)  Reasons, causes and significance of oil prices crash  OPEC  Impact on India Why in news?

 On 8 March 2020, Saudi Arabia initiated a price war with Russia, triggering a major fall in the price of oil, with US oil prices falling by 34%, crude oil falling by 26%, and brent oil falling by 24%.  The price war was triggered by a breakup in dialogue between the Organization of the Petroleum Exporting Countries and Russia over proposed oil production cuts in the midst of the 2019–20 coronavirus pandemic.  Oil prices had already fallen 30% since the start of the year due to a drop in demand. The price war is one of the major causes of the currently ongoing global stock market crash. What is crude oil?

 Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials.  A type of fossil fuel, crude oil can be refined to produce usable products such as gasoline, diesel, and various other forms of petrochemicals.  It is a nonrenewable resource, which means that it can't be replaced naturally at the rate we consume it and is, therefore, a limited resource. Types of crude oil

 Shale oil is crude oil that lies between layers of shale rock. The rock must be broken up to allow access to the layers of oil. New technology has allowed this oil to come to market at a competitive price. As a result, oil prices dropped  West Texas Intermediate crude oil is of very high quality because it is light-weight and has low sulphur content. For these reasons, it is often referred to as “light, sweet” crude oil. These properties make it excellent for making gasoline. That's why it is the major benchmark of crude oil in the Americas.  Brent Blend is a combination of crude oil from 15 different oil fields in the North Sea. It is less “light” and “sweet” than WTI but still excellent for making gasoline. It is refined in Northwest Europe and is the primary benchmark for crude oils in Europe or Africa. What determines oil prices?

 Like most commodities, the fundamental driver of oil's price is supply and demand in the market.  Oil markets are composed of speculators who are betting on price moves, and hedgers who are limiting risk in the production or consumption of oil.  Oil supply is controlled somewhat by a cartel of oil producing nations called OPEC.  Oil demand is driven by everything for gasoline for cars and airline travel to electrical generation. The Organization of the Petroleum Exporting Countries (OPEC)

 OPEC is a permanent, intergovernmental organization, created at the Baghdad Conference in 1960, by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.  It is headquartered in Vienna, Austria.

www.brainyias.com BrainyIAS (84594-00000)  It aims to manage the supply of oil in an effort to set the price of oil in the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.  OPEC membership is open to any country that is a substantial exporter of oil and which shares the ideals of the organization.  As of 2019, OPEC has a total of 14 Member Countries viz. Iran, Iraq, Kuwait, United Arab Emirates(UAE), Saudi Arabia, Algeria, Libya, Nigeria, Gabon, Equatorial Guinea, Republic of Congo, Angola, Ecuador and Venezuela are members of OPEC.  Gabon terminated its membership in January 1995. However, it rejoined the Organization in July 2016. International Energy Agency

 The International Energy Agency (IEA) is an autonomous organisation which works to ensure reliable, affordable and clean energy.  It was established in the wake of 1973 (set up in 1974) oil crisis after the OPEC cartel had shocked the world with a steep increase in oil prices.  It is headquartered in Paris, France  The IEA has four main areas of focus, i.e. 4Es: o Energy security, o Economic development, o Environmental awareness and o Engagement worldwide.  India became an associate member of the International Energy Agency in 2017.  Mexico officially became the International Energy Agency’s 30th member country in February 2018, and its first member in Latin America. Issue of Saudi Arabia and Iran

 Houthis, a rebel Shia group of Yemen that is backed by Iran, bombed the Abqaiq plant as well as the Khurais oil field in Saudi Arabia using drones.  Saudi Aramco, the state-owned oil company, had to suspend the production of almost 6 million barrels per day (about 6 per cent of global oil supply).  It had to restrict the use of 2 mbd of spare capacity.  This is the largest-ever disruption in crude oil production in Saudi Arabia.

Issue of Saudi Arabia and Russia over crude oil

www.brainyias.com BrainyIAS (84594-00000)  For three years, Russia and Saudi Arabia had a deal. Together, they used their collective market power to put a floor under oil prices by limiting their production.  Beginning in 2014, U.S. shale oil production increased its market share; as other producers continued producing oil, prices crashed from above $114 per barrel in 2014 to about $27 in 2016.  In September 2016, Saudi Arabia and Russia agreed to cooperate in managing the price of oil, creating an informal alliance of OPEC and non-OPEC producers that was dubbed "OPEC+."  By January 2020, OPEC+ had cut oil production by 2.1 million barrels per day (bpd), with Saudi Arabia making the largest reductions in production.  As a result of the 2019–20 coronavirus pandemic, factory output and transportation demand fell, bringing overall demand for oil down as well, and causing oil prices to fall.  Although demand for oil was falling globally, a drop in demand in China's markets, the largest since 2008, triggered an OPEC summit in Vienna on 5 March 2020.  At the summit, OPEC agreed to cut oil production by an additional 1.5 million barrels per day through the second quarter of the year, with the group expected to review the policy on 9 June during their next meeting.  OPEC called on Russia and other non-OPEC members of OPEC+ to abide by the OPEC decision.  On 6 March 2020, Russia rejected the demand, marking the end of the unofficial partnership, with oil prices falling 10% after the announcement.  In February 2020, the Trump administration put sanctions on Russia's largest oil company Rosneft. Causes Of Price Fluctuations Of Crude Oil

 High-Supply Scenario: Price War o The price war between Russia and Saudi Arabia has raised the possibility of the market being flooded with excess oil production, leading to a supply shock.According to Goldman Sachs, this price war could drive the oil prices to as low as $20 a barrel.  Low Demand Scenario: Coronavirus impact o China’s efforts to curtail the coronavirus outbreak has disrupted its economy and oil imports.This has slowed down the world’s second-largest economy and has caused global economic disruptions.Also, coronavirusAccording to some forecasts, global oil demand growth in 2020 will be less than 0.48 million barrels per day, down from 1.1 million barrels in December 2019, as the shut-down of factories in China, disruptions in supply chains, and travel restrictions imposed across the world depress demand. USA- Taliban Deal Breakdown

Relevancy  G.S. Paper 2 International Relations  Features of the deal and its impact Why in news?  The United States signed a deal with Taliban insurgents on Saturday that could pave the way toward a full withdrawal of foreign soldiers from Afghanistan  Along with this, a separate joint declaration was also signed between the Afghan government and the US at Kabul.The peace deal is expected to kick-off two processes- o A phased withdrawal of US troops and o An ‘intra-Afghan’ dialogue.  The deal is a fundamental step to deliver a comprehensive and permanent ceasefire and the future political roadmap for Afghanistan peace process and the Central region.  But recently President Trump abruptly breaks off peace talks a week after top U.S. negotiator Khalilzad announced that an agreement had been reached “in principle” with Taliban leaders.  Trump says he cancelled a secret meeting with the Taliban and Afghan President Ghani at Camp David after a U.S. soldier was killed in a Taliban attack.

www.brainyias.com BrainyIAS (84594-00000) Background of the Deal

 On 11 September 2001, terrorist attacks in America killed nearly 3,000 people. Osama Bin Laden, the head of Islamist terror group al-Qaeda, was quickly identified as the man responsible.  The Taliban, radical Islamists who ran Afghanistan at that time, protected Bin Laden, refused to hand him over. So, a month after 9/11, the US launched airstrikes against Afghanistan.  The US was joined by an international coalition and the Taliban were quickly removed from power. However, they turned into an insurgent force and continued deadly attacks, destabilising subsequent Afghan governments.  Since then, the US is fighting a war against the Taliban.  Donald Trump’s 2017 policy on Afghanistan, was based on breaking the military stalemate in Afghanistan by authorising an additional 5,000 soldiers, giving US forces a freer hand to go after the Taliban, putting Pakistan on notice, and strengthening Afghan capabilities.  However, the US realised that the Taliban insurgency could not be defeated as long as it enjoyed safe havens and secure sanctuaries in Pakistan, the US changed track and sought Pakistan’s help to get the Taliban to the negotiating table.  The negotiations began in September 2018 with the appointment of Ambassador Zalmay Khalilzad to initiate direct talks with the Taliban. After nine rounds of US-Taliban talks in Qatar, the two sides seemed close to an agreement. Negotiations of the deal

 Counterterrorism Assurances: The Taliban has agreed to prevent Afghanistan from being used by terrorist groups, but negotiators disagree over how to define the terms “terrorism” and “terrorist.”  Withdrawal of Foreign Forces: Both sides agree on the full withdrawal of the fourteen thousand U.S. troops currently in Afghanistan, as well as of additional foreign forces, but they disagree on the timeline. The United States is reportedly offering a two-and-a-half-year deadline, while the Taliban insists on nine months.  Comprehensive Cease-fire: U.S. negotiators seek a permanent cease-fire among U.S., Taliban, and Afghan government forces prior to a peace deal, but the Taliban insists on putting off a cease-fire until U.S. troops have withdrawn.  Intra-Afghan Dialogue: Washington has urged Afghan government and Taliban leaders to begin official talks on how Afghanistan will be governed after the war, but the Taliban refuses to negotiate with the government until after it has reached a deal with the United States. Impact of failed peace deal

 Many worry that a failed peace deal will exacerbate fighting and increase the civilian death toll, especially since the Taliban has carried out attacks throughout the negotiations and vowed to target civilian participants in the upcoming presidential election.  Since the war began in 2001, more than 2,400 Americans have been killed and some 20,000 injured. More than 1,100 NATO troops have also been killed. The war has cost the United States a total of $975 billion. On top of that, medical care and disability payments for veterans will cost an estimated $1 trillion over the next forty years.  Over the past five years, more than 45,000 Afghan troops and police officers were killed. A UN report found that in the first six months of this year, 3,812 civilians were killed or injured, including 1,207 children. Continued war could also exacerbate the production of illegal drugs and drive more Afghans to seek refuge abroad. Challenges in the Deal

 Issues with Intra-Afgan Dialogue: President Ashraf Ghani faces a political crisis following claims of fraud in his recent re-election. The political tussle is between Ashraf Ghani (who belongs to the largest ethnic group in Afghanistan- the Pashtun) and Abdullah Abdullah (whose base is among his fellow Tajiks, the second largest group in Afghanistan).

www.brainyias.com BrainyIAS (84594-00000) o If there are any concessions made by Mr Ghani’s government to the Taliban (predominantly Pashtun) will likely be interpreted by Mr Abdullah’s supporters as an intra-Pashtun deal reached at the cost of other ethnic groups, especially the Tajiks and the Uzbeks. o Consequently, these ethnic fissures may descend into open conflict and can start the next round of civil war. o Thus, the lifting of the US military footprint and the return of a unilateral Taliban could set the stage for the next round of civil war that has hobbled the nation since the late 1970s.  One-Sided Deal: The fundamental issue with the U.S.’s Taliban engagement is that it deliberately excluded the Afghan government because the Taliban do not see the government as legitimate rulers. Also, there is no reference to the Constitution, rule of law, democracy and elections in the deal. o Taliban is known for strict religious laws, banishing women from public life, shutting down schools and unleashing systemic discrimination on religious and ethnic minorities, has not made any promises on whether it would respect civil liberties or accept the Afghan Constitution. o Therefore, Shariat-based system (political system based on fundamental Islamic values) with the existing constitution is not easy.  Taliban’s internal divisions: The Taliban is fragmented or divided internally. It is composed of various regional and tribal groups acting semi-autonomously. o Therefore, it is possible that some of them may continue to engage in assaults on government troops and even American forces during the withdrawal process. o It is unclear if there is a date for the complete withdrawal of US troops or for concluding the intra-Afghan dialogue, or how long the truce will hold.  Problem with Prisoner's Swap: The US-Taliban agreement and the joint declaration differ. The US-Taliban pact says up to 5,000 imprisoned Taliban and up to 1,000 prisoners from “the other side” held by Taliban “will be released” by March 10. o However, the joint declaration lays down no numbers or deadlines for the prisoner's swap. Afghanistan President held that there is no commitment to releasing 5,000 prisoners. He also held that such prisoners' swap is not in the authority of the US, but in the authority of the Afghan government. Why USA brokedown the peace talk?

 The US government is prioritizing "peace" negotiations with the Taliban rather than the electoral process in Afghanistan.  Zalmay Mamozy Khalilzad, an Afghan-American diplomat was negotiating a withdrawal agreement with the Taliban, not a peace agreement.  The withdrawal of troops from a conflict doesn't mean the war is over. President Barack Obama's administration pulled all its troops out of Iraq at the end of 2011, which helped to create a vacuum that ISIS then deftly exploited.  The Taliban has consistently refused to negotiate directly with the elected Afghan government, despite the fact that the outcome of their talks with the United States will deeply affect the Afghan people the Afghan government represents.  The negotiations have encountered some significant snags, not least that the Taliban keep killing American soldiers even as they negotiate peace. If they cannot agree to a ceasefire during these very important peace talks then they probably don't have the power to negotiate a meaningful agreement anyway. India’s Stand on the deal

 Days after US President Donald Trump called off negotiations with the Taliban, India reiterated its stand that any peace process should have “full consent” of the Afghan government and its people. All sections of Afghan society including legitimately elected government should be part of the peace process.  India has long batted for an “inclusive peace and reconciliation process in Afghanistan, which is Afghan- led, Afghan-owned and Afghan-controlled, leading to a lasting political solution based on the preservation of the gains" made since 2001. This includes preservation of the constitutional order and women’s rights.

www.brainyias.com BrainyIAS (84594-00000)  New Delhi is concerned that anti-India terrorist groups could find a safe haven in Afghanistan, and seeks to insulate itself from groups such as the Islamic State.  New Delhi is already fighting terrorists trained in Pakistan who are infiltrating into Kashmir and would not like to see other groups join the fight. Way forward

 To resolve the Afghan issue through peaceful means, it is also necessary to create a conducive atmosphere of confidence, i.e., removal of the blacklist, opening of the office and exchange of prisoners.  All these provide scaffolding for negotiation and help both sides to gain trust in the tangibility of negotiation. Regional countries too can play a role in this regard, including international organisations like the United Nations and the Organisation of Islamic Conference.  A radical new approach is needed in Afghanistan to build peace step-bystep. In the long term, this means a more inclusive peace processes that is representative of, and endorsed by, the whole of Afghan society.  In this groundbreaking Accord, Taliban leaders, Afghan government representatives, and Afghan and international experts examine how this could be achieved. Deal signed between the US and Taliban

Relevancy  G.S. Paper 2 International Relations  Features of the deal and its impact Why in news?  The United States signed a deal with Taliban insurgents on Saturday that could pave the way toward a full withdrawal of foreign soldiers from Afghanistan US-Taliban peace deal explained  The deal includes a timeline for the withdrawal of all US and NATO troops from Afghanistan as well as guarantees from the Taliban that it will prevent militant groups including al-Qaeda from using Afghan soil to threaten the security of the United States and its allies.  The agreement was signed in the Qatari capital Doha  The agreement lays the groundwork for negotiations between the Taliban and the Afghan government – known as intra-Afghan talks – to end a war that began after the United States launched attacks on Afghanistan after the Sept. 11, 2001 hijacked plane attacks. What next after US-Taliban peace deal?  The US-Taliban agreement calls for a phased withdrawal of American and coalition forces and also requires the Taliban to initiate a formal dialogue with the Afghan government and other political and civil society groups on a permanent nationwide ceasefire and power-sharing in post-war Afghanistan.  A full withdrawal of all US and coalition forces would occur within 14 months of this deal getting signed, if Taliban fulfil their end of the deal, according to the text of the agreement.  Up to 5,000 Taliban prisoners will be released and the Taliban will release up to 1,000 prisoners by March 10, according to the text of the deal.  The United States will work with the UN Security Council to remove Taliban members from sanctions by May 2020, the accord says. What led to Saturday’s accord?  The prospect of a peace arrangement with the Taliban has been raised by Afghan and US leaders for more than a decade. Momentum towards the latest deal came after Trump appointed Khalilzad as his special envoy to Afghanistan.  Progress had stalled several times, most notably in September when Trump cancelled talks after an attack in Kabul that killed 12, including an American soldier.  Talks began again in late 2019, culminating in a seven-day “reduction in violence” agreement that ended on Saturday with the Doha signing.

www.brainyias.com BrainyIAS (84594-00000) HISTORY AND CULTURE

Sheikh Mujibur Rahman

Relevancy  G.S. Paper 2  About Sheikh Mujibur Rahman Why in news?  Recently, Bangladesh postponed the celebration of the birth anniversary of Bangabandhu Sheikh Mujibur Rahman (1920-1975) on 17 March due to the global coronavirus outbreak.  Sheikh Mujibur Rahman was the founding leader of Bangladesh and the country’s first Prime Minister.  He is referred to as Sheikh Mujib or simply Mujib, the title ‘Bangabandhu’ meaning ‘friend of Bengal’.  Prime Minister Narendra Modi was expected to attend the celebrations. About Sheikh Mujibur Rahman  Before joining politics, Rahman studied law and political science in Kolkata and Dhaka, and agitated for Indian independence.  In 1949, he joined the Awami League, a political party which advocated greater autonomy for East Pakistan.  A popular leader in East Pakistan, Rahman played an important role in the six-point movement and the Anti-Ayub movement.  In 1970, his party secured an absolute majority in the Pakistani general elections, the country’s first, winning more seats than all parties in West Pakistan, including Zulfikar Ali Bhutto’s Pakistan Peoples Party.  The election results were not honoured, leading to a bloody civil war, and Sheikh Mujib declared Bangladesh’s independence from Pakistan on March 26, 1971.  The declaration coincided with a ruthless show of strength by the Pakistani military, in which tanks rolled out on the streets of Dhaka and several students and intellectuals were killed.  India under then Prime Minister Indira Gandhi provided full support to Rahman and Bangladesh’s independence movement, resulting in the creation of a sovereign government at Dhaka in January 1971.  Rahman, who had been arrested and taken to West Pakistan, returned to Bangladesh after being freed in January 1972.  For the next three years, Rahman held the new country’s prime ministerial post, and became a celebrated icon in India as well, admired for his moving speeches and charismatic personality. Demise  On 15 August 1975, Rahman was killed in a military coup along with his wife and three sons, including 10-year-old Sheikh Russel.  His daughters, the current Prime Minister Sheikh Hasina and her younger sister Sheikh Rehana, survived as they were abroad at the time.  In 2010, Bangladesh hanged five ex-Army officers convicted of assassinating Rahman, almost 35 years after he was killed.

www.brainyias.com BrainyIAS (84594-00000) UNESCO World Heritage Site 2020, India bats for inclusion of Dholavira & Deccan Sultanate Monuments

Relevancy  G.S. Paper 1 (art and culture)  Important international organizations, agencies and their structures  Objective questions- world heritage sites, heritage sites in India  The convention, significance and selection of world heritage sites Why in news?  Indian government has submitted two nominations for UNESCO world heritage list 2020 which are ‘Dholavira- A Harappan city’ and ‘Monuments and forts of Deccan Sultanate’.  The Government of Madhya Pradesh has submitted the proposal of ‘Group of monuments at Mandu’ in the year 2019 What Is World Heritage Site?  A World Heritage Site is a landmark or area, selected by the United Nations Educational, Scientific and Cultural Organization (UNESCO) for having cultural, historical, scientific or other form of significance, which is legally protected by international treaties.  The sites are judged to be important for the collective and preservative interests of humanity.  World heritage is the designation for places on earth that are of outstanding universal value to humanity.  The proposed nomination must satisfy at least one of these ten criteria  Evaluated by the international council on monuments and sites and the world conservation union  The committee meets once per year to determine whether or not to inscribe each nominated property on the world heritage list.  The World Heritage Committee has divided the world into five geographic zones which it calls regions: Africa, Arab states, Asia and the Pacific, Europe and North America, and Latin America and the Caribbean. Selection Criteria For cultural sites:  A masterpiece of human creative genius  An important interchange of human values over a span of time  A civilization which in living or which has disappeared  An outstanding example of a type of building, architecture or technology  An outstanding example of a traditional human settlement, land-use or sea-use  Directly or tangibly associated with events or living traditions, with ideas or with beliefs, with artistic and literary works of outstanding universal significance For natural site:  Contains superlative natural phenomena or areas of exceptional natural beauty and aesthetic importance  Outstanding examples representing major stages of earth’s history  Outstanding examples representing significant on-going ecological and biological processes in the evolution  Contains the most important and significant natural habitats for in-situ conservation of biological diversity Dholavira- a Harappan City  The city of dholavira is located in Khadir island of the Rann of Kutch in Gujarat  It belongs to the mature Harappan phase  It was excavated by R.S. Bisht in 1985 www.brainyias.com BrainyIAS (84594-00000)  It demonstrates a highly organized system of town planning with perfected proportions, street- patters and an efficient water conservation system that supported life for more than 1200 years ( from 3000 BCE to 1800 BCE) against harsh hot arid climate. Monuments and forts of Deccan Sultanate  Reflects convergence of national and international styles of Islamic architecture and their intersections with the prevalent Hindu architecture of the period of southern India.  There are four components- o Bahamani monuments at Gulbarga, Karnataka- this consists of fort and a huge mosque. There is also a half Gombad complex which consists of seven towers. This was first capital of bahamani dynasty o Bahamani and Baris Shahi monuments at bidar, Karnataka- there are many monuments from 15th to early 16th century period which includes Bidar fort, Madrassa Mehmood gawan, Bahamani tombs, Shahi tombs. The main feature of these monuments are the sophisticated entrance gates and water channels along with these gates. o Adil Shahi monuments at Bijapur, Karnataka- these monuments are from 15th to later 17th century. There are around 80 small and large monuments which consists of many tombs, gates, architectural beauty etc but the one most prominent is Gol Gumbad which is 2nd largest dome in the world. o Qutub Shahi monuments at Hyderabad, Andhra Pradesh- these includes Golconda fort, Charminar, Qutub Shahi tombs etc. WHS in India  There are 38 WHS located in India. These includes 30 cultural sites, 7 natural sites and 1 mixed criteria site  India has the sixth largest number of sites in the world.  China and Italy has the most number i.e 55, of world heritage sites followed by Spain (48), Germany (46) and France (45). Significance  When a site in inscribed on the world heritage list, the resulting prestige often helps raise awareness among citizens and governments of heritage preservation  Greater awareness leads to a general rise in the level of the protection and conservation given to heritage properties.

www.brainyias.com