Note4Students
From UPSC perspective, the following things are important :
Prelims level: Lipids, Non-polar compounds
Mains level: Not Much
A researcher from IIT Bombay is using biologically active lipid molecules as chemical biology tools to elucidate their biological disease-causing function.
About the research
- The research is focused to explore how lipids play critical roles in infectious diseases by intervening in cellular signaling, membrane trafficking, and protein function all of which are intimately involved in host-pathogen interplay.
- The research works with lipids from Mycobacteria tuberculosis (Mtb), which synthesizes atypical lipids predisposed on its surface to interact with the human host membrane.
- Using Mtb lipids as tools, the research elucidates a direct correlation between human host lipid membrane modification and modulation of associated signaling pathways by these exogenous Mtb lipids.
What are Lipids?
- A lipid is a biomolecule that is soluble in nonpolar solvents.
- Non-polar solvents are typically hydrocarbons used to dissolve other naturally occurring hydrocarbon lipid molecules that do not (or do not easily) dissolve in water, including fatty acids, waxes, sterols, fat-soluble vitamins (such as vitamins A, D, E, and K), monoglycerides, diglycerides, triglycerides, and phospholipids.
- The functions of lipids include storing energy, signaling, and acting as structural components of cell membranes.
- Lipids have applications in the cosmetic and food industries as well as in nanotechnology.
Role of Lipids
- Lipids are important components of living cells and are responsible for maintaining the integrity of our cell membrane, which allows nutrients and drugs to pass through the cell.
- These are commonly breached during infection and in diseases.
- Lipids play a major role in altering cell membrane properties modulating lipid and protein diffusion and membrane organization.
- Thus, changes in membrane properties control the proper functioning of cells and are harnessed by pathogens for their survival and infection.
- Lipids critically dictate the molecular interactions of drugs with membranes influencing drug diffusion, partitioning, and accumulation, thereby underpinning lipid-composition specificity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: IUSSTF
Mains level: India-US collaboration in STEM
Indian students will undertake a research internship at Viterbi School of Engineering, University of Southern California, LA, USA under the IUSSTF Program.
What is IUSSTF?
- IUSSTF is an acronym for the Indo-U.S. Science and Technology Forum.
- It is established under an agreement between the Governments of India and the USA in March 2000.
- It is an autonomous bilateral organization jointly funded by both the Governments that promote Sci-Tech, Engineering and Innovation through substantive interaction among government, academia and industry.
- The Department of Science & Technology, Governments of India and the U.S. Department of States are respective nodal departments.
About Viterbi Program
- The Viterbi Program of IUSSTF was developed between IUSSTF and the Viterbi School of Engineering, University of Southern California (USC).
- This program is a part of the Government’s endeavour to encourage research and development amongst the bright young Indian minds to create long-term, sustainable, and vibrant linkages between India and the US.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Breach of privacy in sharing of call record data of citizens.
Context
In bypassing established protocol to seek call details of citizens en masse, the government violates SC guidelines.
What is the issue?
- Departure from stringent protocol: The Cellular Operators Association of India has reported mass requests from the government for mobile call detail records (CDRs).
- Which is a serious departure from the stringent protocol established by the UPA government following an uproar in 2013 after prominent politicians were found to be under unauthorised surveillance.
- Records of all customers: Records have been sought for all consumers on certain dates in parts of Delhi, Andhra Pradesh, Haryana, Himachal Pradesh, Jammu & Kashmir, Kerala, Odisha, Madhya Pradesh and Punjab.
- In the case of Delhi, records were sought for the last three days of campaigning before assembly elections, while the anti-CAA protests were at their peak.
- How the data was requested? Requests were delivered by local offices of the Department of Telecommunications, taking advantage of a condition in licences granted to operators, which permits the DoT to inspect their CDRs, which go back one year.
Breach of many requirements and norms
- A serious breach of privacy: These requests depart from established protocol and international expectations on multiple counts, and amount to a serious breach of privacy.
- What is the protocol for requesting CDR information? A CDR request is supposed to be sanctioned by the home secretary and handled by a police officer of the rank of SP or above,
- But in this case DoT offices were used.
- The requirement of informing magistrate was not fulfilled: The requirement to report CDR requests on a monthly basis to the district magistrate was not complied with.
- No reason was offered: Most importantly, no reason was offered for snooping on the traffic of citizens.
- Surveillance must be specific and purposive: It is generally understood that communications surveillance must be specific and purposive, and must not trespass on the privacy of the innocent.
- Invasion of privacy of all citizens: Indiscriminate mass surveillance of communications invades the privacy of all citizens to the detriment of public trust. In this case, it was for purposes which are not verifiably honourable, since the government has chosen not to reveal them.
Why the CDR data matters if it is metadata only?
- Combining CDR with other data gives more information: CDRs are all metadata and no content. They do not reveal any words uttered or messaged.
- But combining the metadata with phone location data reveals a lot about connections between specific people and the actions that they take.
- Multi-dimensional map of human activity: If data is available at scale, as was the case here, it is possible to build a multi-dimensional map of human activity, and correlate it with real events.
- This would disturb the balance of information power between the citizen and the state, and amount to a breach of privacy.
Conclusion
If the government needs CDR data for a legitimate purpose, it should have no objection to following the rule-book scrupulously. And if there is a reason for sidestepping protocol in a sensitive matter, it should explain why.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- India is unprepared for dealing with pandemics.
Context
India is unprepared for dealing with the outbreak of coronavirus.
Is India really faring better than the other countries?
- 45 days for first 100,000: Globally, it took roughly 45 days for the first 100,000 cases. It is likely to take nine days for the next 100,000.
- Death count: The global death count is now doubling every nine days and stands at 8,248, with 207,518 confirmed cases.
- That is how epidemics work — they gather steam as infected individuals go on to infect even more people. Confirmed cases in India, as of today stand at 169.
- It is much lower than in small countries such as Iceland (around 250). Could this really be the case that we have fared better than everyone else?
- Probably India is not performing better: Testing in India remains abysmally low. Only about 10 in a million people in India have been tested, compared to say nearly 120 in a million in Thailand or 40 per million in Vietnam.
- Why testing in not being done in India? The stated explanation is that the limited number of test kits are being conserved for when they are truly needed but when is the need greater than right now?
- There are probably shortages even in being able to procure adequate supplies given that many countries are seeking to buy the limited stocks.
- Importance of testing: Testing is the most important thing we could be doing right now.
- As the Director-General of the World Health Organization, said recently about the need for more testing, “You cannot fight a fire blindfolded.”
Avoiding undercounting
- Timely identification is essential to prevent secondary infection: We need to identify coronavirus-infected patients in a timely manner in order to increase our chances of preventing secondary infections.
- There is no shame in saying that we have far more cases than what we have detected so far.
- K.’s admitted undercounting: Even the United Kingdom, which has a far better health system than India, has admitted that it is probably undercounting its true infections by a factor of 12, and is likely have about 10,000 cases.
- Is it possible that India with 20 times their population has only 169 cases?
- Preparedness to deal with a higher number of cases: If widespread testing were to commence in India, the number of confirmed cases would likely climb to the thousands very quickly. This is something we have to be prepared for without panic or fear-mongering.
- Positive action: This is how epidemics move and the real numbers should spur us into positive action.
- Strict measures by the government: At some stage, it is possible that the government may have to put in place very strict measures on quarantining and closures, much like what China had to do to control the epidemic in Wuhan.
How prepared is India?
- There is not an easy answer to how worst things could go.
- Mutation or sensitivity of virus: If we escape the worst, either because this virus mutates to a less virulent form or because there is something about its temperature or geographical sensitivity that we know nothing about, then we should count our blessings.
- Viruses do mutate and generally to be less lethal.
- Projection from Europe: If the projections from Europe are applicable in India, our ‘namastes’ and clean hands notwithstanding, the prevalence in India would be upwards of 20%.
- In other words, we should expect to see about 200-300 million cases of COVID-19 infections and about four and eight million severe cases of the kind that are flooding hospitals in Italy and Spain at the moment.
- More importantly, these cases are projected to appear in just a two to the four-month window.
- In the current scenario, we are not ready.
- India has somewhere between 70,000 and 100,000 intensive care unit beds and probably a smaller number of ventilators.
- That is simply inadequate.
- What should be done? The next two weeks should be spent on planning for large, temporary hospitals that can accommodate such numbers. If we are lucky, we will not need them.
Unprepared for pandemics
- Catastrophic event with highest probability-Pandemic: This all sounds doomsday-like. But we have known for decades now that of all catastrophic events to befall humanity, between an asteroid hit and a nuclear war, a disease pandemic has always been the highest on our list of impact and probability.
- Not enough changes in preparedness: There were some changes after the Severe Acute Respiratory Syndrome (SARS) but not nearly enough.
- Pandemic preparedness always took a backseat to the crisis of the moment.
- And in fairness, there is truly no amount of preparation that can fully mitigate such an occurrence.
Conclusion
Things are about to get a lot worse. Let us hope that this brings out the best in us, and not the worst. Whether we know this or not, these events are just a dress rehearsal for the more challenging events such as climate change that are likely to be with us this century. And if we take care of each other, we will survive both these challenges with our humanity intact.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: AT-1 bonds.
Mains level: Paper 3- Issues involved in banking system and resolution process in case of failures.
Context
Resolving bank failure is tough but following a set of principles could achieve a fair and efficient outcome.
Key issues involved in the resolution
- Challenge in courts: Resolving Yes Bank’s failure is no easy task. Some bondholders are already challenging the restructuring plan of the Reserve Bank of India in court, and seem ready for a long-drawn battle.
- How much dilution is fair for existing shareholders to take?
- AT-1 Bonds issue: Should the value of the Additional Tier 1 (AT-1) bonds be written off entirely?
- As such issues become matters of policy discussion and address, we must not lose sight of some fundamental principles of resolving bank failures.
- Three of them should be on the top of the list: honour contracts, address market failure and protect systemic stability.
How honouring contracts matter for economy?
- For efficient outcomes: Honouring contracts is vital for achieving efficient outcomes between contracting parties such as lenders and borrowers, managers and shareholders, and insiders and outsiders.
- Shying away from entering a contract: If there is uncertainty over this fundamental principle, contracting parties will shy away from entering contracts in the first place.
- Lenders will be less willing to lend.
- Prospective minority shareholders will be less keen to buy shares in a company.
- Impact on allocative efficiency: This will ultimately compromise the economy’s allocative efficiency, or the market’s ability to deploy capital to its best use.
AT-1 bond issue
- Honouring contract in Yes banks resolution: There are several issues in the application of this principle in Yes Bank’s resolution.
- The most visible one concerns the decision of writing off its perpetual contingent, or AT-1, bonds.
- Write off: According to the original agreement, these additional tier-1 (AT-1) bonds are indeed supposed to be written off at a time like this.
- And this write-off need not happen before the common equity value goes down to zero.
- The entire idea behind these perpetual contingent bonds is to improve a bank’s capitalization if its common equity value falls below a certain threshold, but does not hit zero.
- Counter argument: These bondholders and some commentators are arguing that writing off those bonds will be a big blow to India’s bond market.
- Moral hazard problem: This is just the opposite of the truth. Not writing them off in accordance with the original contract will create a severe moral hazard problem.
- What incentive would any bondholder have to correctly price and monitor these banks in the future?
- Market discipline would die a quick death, and the bond market will suffer in the long run.
- What the resolution process should do? Therefore, the resolution process should honour the contract and write off the entire value of Yes Bank’s AT-1 bonds.
Dealing with critical market failures
- Second core principle: The second core principle in this resolution should be to tackle some critical market failures that led here.
- Several observers have pointed out the failure of board oversight, promoter negligence and reckless lending at the bank.
- Vital market failure in the purchase of AT-1 bonds by retail investors: Indeed, these issues must be addressed. But there seems to be another vital market failure hidden in this crisis: the purchase of AT-1 bonds by retail investors.
- Why AT-1 bonds are complex? AT-1 bonds are “information-sensitive” instruments, which means that the value of these instruments is extremely sensitive to information on the firm’s fundamentals.
- Complex financial security: They are very complex financial securities. Understanding the risk and reward associated with these securities and valuing them properly is not an easy task even for the best of market professionals.
- Retail investors are certainly not suited to buy this product. Still, several of them ended up holding Yes Bank AT-1 bonds in their asset portfolios.
- Demand deposits and market failure: Banking theory relies on the idea that demand deposits are information-insensitive instruments.
- Hence, a retail investor can place deposits in a bank without worrying about understanding the real risks borne by it. Government-backed deposit insurance makes deposits even more liquid and riskless.
- Hence, retail investors should hold regular deposits in a bank, and not complex securities like AT-1 bonds.
- Where is the market failure involved? If such bonds are sold to them without proper disclosure of the associated risks, then it amounts to a serious market failure.
- Way forward: This market failure must be corrected.
- Holding investment advisors to higher standards of fiduciary responsibility is one way of doing so.
- Prohibiting retail investors from investing in such securities is another critical step to prevent such a market failure.
Way forward to carry out the resolution process
- Restitution of value to retail investors: Meanwhile, the resolution process could consider partial or full restitution of value to retail investors in Yes Bank’s AT-1 bonds, if these products were indeed mis-sold to them.
- Large professional investors should be treated differently: But such a rescue must not extend to large professional investors who willingly bought these bonds for higher returns.
- One mechanism to do this could be to create a separate fund for retail investors with investments capped at a certain point.
- Or, their AT-1 investments up to a specific limit could be converted into a simple deposit contract. The legal hurdles may be insurmountable.
- However, in principle, those who mis-sold these products to retail investors should be required to compensate them.
- Conflict in two principles: Sometimes, these principles can come into direct conflict with each other.
- If the resolution allows retail investors in those AT-1 bonds to recover their investments, it would go against the “honour the contract” principle, but it would address the “market failure” issue.
- Ensuring systemic stability: How should we reconcile this conflict? That’s where the third principle comes in: ensuring systemic stability.
- After all, the regulator’s main objective is to restore the market’s faith in the country’s financial system.
- While this is not an easy task, protecting the capital and confidence of small investors can go a long way in restoring their faith in the banking system.
Conclusion
Resolving bank distress is never an easy job. But honouring contracts, addressing market failure and ensuring systemic stability can together go a long way in achieving a fair and efficient outcome.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Discretionary powers of the Supreme Court
Mains level: Executie and Judiciary
The Supreme Court has removed a Minister against whom disqualification petitions were pending before the Speaker since 2017.
- The court invoked its discretionary powers under Art. 142 of the Indian Constitution.
What is Article 142?
- Article 142 of the Constitution empowers the Supreme Court to pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it.
- Any decree so passed or orders so made shall be enforceable throughout the territory of India.
- The phrase ‘necessary for doing complete justice’ encompasses a power of equity which is employed when the strict application of the law is inadequate to produce a just outcome.
- The power under Article 142 can be exercised when the SC has to decide difficult cases where adequate laws may not exist, or existing laws may not be adequate, in order to deliver complete justice.
Scope and limitations
- Supreme Court in State of Punjab v Rafiq Masih (2014) has opined that- Article 142 of the Constitution of India is supplementary in nature and cannot supersede the substantive provisions, though they are not limited by the substantive provisions in the statute”.
- Article 212 of the Constitution bars courts from inquiring into proceedings of the Legislature.
- In this case, however, prompted by the fact that the Speaker’s conduct has been called into question on several occasions, the court invoked Article 142.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Supplementary grants
Mains level: Various grants in Parliament
Supplementary Grants
Lok Sabha recently held voting on supplementary demands for grants for Jammu and Kashmir and passed the proposals on voice vote.
What are Supplementary Grants?
- The additional grant required to meet the required expenditure of the government is called Supplementary Grants.
- When grants, authorised by the Parliament, fall short of the required expenditure, an estimate is presented before the Parliament for Supplementary or Additional grants.
- These grants are presented and passed by the Parliament before the end of the financial year.
- When actual expenditure incurred exceeds the approved grants of the Parliament, the Ministry of Finance and Ministry of Railways presents a Demand for Excess Grant.
How it works?
- The Comptroller and Auditor General of India bring such excesses to the notice of the Parliament.
- The Public Accounts Committee examines these excesses and gives recommendations to the Parliament.
- The Demand for Excess Grants is made after the actual expenditure is incurred and is presented to the Parliament after the end of the financial year in which the expenses were made.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Flexi Fare System
Mains level: Not Much
During the eight months period from 1st July 2019 to 29th February 2020, approximately 28.93 Lakh berths remained vacant in Rajdhani, Shatabdi and Duronto type trains having Flexi fare.
What is Flexi Fare System?
- The flexi-fare scheme was introduced by the IRCTC in 2016 for the 142 “premium trains” such as Shatabdi, Rajdhani, and Duronto (now Vande Bharat Exp. as well).
- Under this dynamic pricing system, the base fare increases by 10% with every 10% of berths sold, with a limit set at 1.5 times the original price.
- The scheme was applicable to all classes, except AC first class and executive class. The pricing system is still in force.
Reasons for flexi fares:
- Indian Railways run about 12900 passenger trains per day and the railways is losing around more than 40% of what they spend on passenger trains.
- The trains like Rajdhani are the ones in which the elite class prefers to travel. So, some revenue can be garnered from them.
- The cost of service is almost double of what is being charged from the passengers.
- Freight business is already very expensive in India as compared to other countries in the world. Therefore, a further increase in this area is not feasible.
Issues with the system
- After the introduction of Flexi-fares, the railways lost 700,000 passengers in just 11 months while the additional revenue earned as a result of the scheme was ₹ 552 crore.
- While drawing upon the fundamentals of dynamic pricing, what Indian Railways failed to introduce was a simple principle that Flexi-fares work ways, hikes, and declines.
- The railways model just focused on increasing fares with no provision for a decrease in price when demand is low.
- While half of the decision-makers in the Railway Board support it, half of them oppose it stating that what the railways require is an increase in ticket prices across the board.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GreenCo Rating System
Mains level: Not Much
The Union Ministry of Railways has informed about the applications of Greenco Ratings on Workshops and Production Units of Indian Railways.
GreenCo Ratings
- GreenCo Rating is the “first of its kind in the World” holistic framework that evaluates companies on the environmental friendliness of their activities using life cycle approach.
- Implementation of GreenCo rating provides leadership and guidance to companies on how to make products, services and operations greener.
- It is developed by Confederation of Indian Industry’s (CII) Sohrabji Godrej Green Business Centre.
- It has been acknowledged in India’s Intended Nationally Determined Contribution (INDC) document, submitted to UNFCCC in 2015.
- GreenCo rating is applicable to both manufacturing facilities and service sector units.
- The rating is implemented at unit or facility level. The unit or facility has to be in operation for a minimum period of 3 years. In case of new plants/ facilities minimum 2 years operation is required.
Utility
It helps the industrial units in identifying and implementing various possible measures in terms of energy conservation, material conservation, recycling, utilization of renewable energy, GHG reduction, water conservation, solid and liquid waste management, green cover etc.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Nano-composites and its applications
Mains level: Not Much
A group of scientists at the International Advanced Research Centre for Powder Metallurgy & New Materials (ARCI) have developed a process for size-selective deposition of nanocomposite coatings which can reduce friction of these dynamic systems.
What are Nanocomposites?
- Nanocomposite coatings are formed by mixing two or more dissimilar materials at nanoscale to improve the physical, chemical and physicochemical properties of the new materials.
- The scientists have found that nickel tungsten-based coatings with infusion of particular sized Silicon Carbide (SiC) submicron particles using a pulsed electroplating can provide an excellent combination of wear and corrosion resistance.
Applications
- Many aerospace, defence, automobile, space devices need to reduce friction, wear, and tear to enhance the life of components.
- Lubricating these dynamic systems add to the cost, complexity, and weight of these systems.
- The coating could help in reducing the friction of such devices.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: PFZ
Mains level: Application based initiaitives by ISRO
The Indian National Centre for Ocean Information Services (INCOIS), Hyderabad has reported that Oceansat Satellite data from ISRO are used to prepare the PFZ advisories on the potential rich fishing areas and provide to the sea faring fishermen in all states.
Potential Fishing Zone (PFZ)
- This is the first advisory service started by INCOIS. The backbone of this service is the real-time data for ocean color and SST provided by the OCEANSAT and NOAA respectively.
- This service was started because there was a need to identify the potential fishing zones to help the fishermen to get better catch while they were at the sea.
- This service was started by the Ministry of Earth Sciences with the help of the Department of Space and several institutions under the Ministry of Agriculture.
How it works?
- This service makes use of parameters such as sea surface temperature and chlorophyll content provided by NOAA-AVHRR and Oceancolor satellites.
- Features such as oceanic fronts, Meandering Patterns, Eddies, Rings, Up Welling areas etc. are identified sites for fish accumulation.
- These features can easily be identified from Sea Surface Temperature and Chlorophyll data.
- The availability of Chlorophyll from OCEANSAT and MOdDIS has further enriched these advisories in the recent years.
- Hence, PFZ advisories have helped the fishing community to locate the fishing zones with accuracy.
Special advisories for fisherman
- Another feature of PFZ service is the generation of species-specific advisory to enable the fishermen folk to distinguish between the exploited and under-exploited species in the potential fishing zones.
- This enables them to have sustainable fishery management by targeting only the under-exploited species in the fishing zones.
- This approach enables them to avoid fishing the over-exploited species over and over again.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 3- Suggestions to avoid next global financial crisis.
Context
Although we could not have predicted it, Covid-19 was not the reason, but just the trigger for the ongoing financial crash as all we needed was the proverbial straw to break the finance sector’s back
Economic sudden stop
- Not just any trigger: Covid-19 was not just any trigger as it gave birth to the concept of the economic “sudden stop.” When the global equity markets dropped on 31 January 2020 following the WHO declaration of the Public Health Emergency of International Concern, El-Erian (2020) warned the investors on 2 February 2020 that they should snap out of the “buy the dip” mentality.
- Pointing out two vulnerabilities, namely structurally weak global growth and less effective central banks, he introduced the concept of “sudden stop” economic dynamics.
- What is sudden stop? It can be considered as an abrupt onset of a deep recession.
- Supply and demand shock: In the case of Covid-19, it is a sudden stop of economic activity resulting in supply and demand shocks to the global economy as major cities in infected countries, more than 100 and counting, are put on lockdown.
- And, add to that the deepening oil price war between Russia and Saudi Arabia.
- On 8 March 2020 in New York, the futures markets opened and oil futures (both Brent and WTI) are trading about 21% down, gold is above $1,700 per ounce, and all United States (US) equity index futures are trading about 4% down.
- Long terms treasury yield at historical lows: What is worse is that with the long-term US Treasury yields at their historical lows (10-year yield below 0.5% and 30-year yield below 1%), the capital markets are frozen (not to mention many oil projects that will go bust at these prices).
Disorderly non-financial private sector debt leading to dire consequences
- A disorderly global non-financial private sector debt deleveraging, which is likely to lead to deep global debt deflation, followed by a recession (and possibly a depression).
- Which could result in creating financial and economic instabilities, and further tensions in international relations with dire consequences for emerging and developing countries, not to mention developed countries.
- Difference in developed and developing countries debts: While in developed and high-income developing countries, the non-financial private sector is more over-indebted, in middle-income and low-income developing countries, the public sector is more over-indebted.
- Impact on developed economies: Given that the global non-financial private sector debt deleveraging has already started, the public sector debts of the developed and high-income developing countries will also go up and the governments’ ability to rescue their economies will also decline in these countries.
- Impact on funding for climate change: Furthermore, this will severely constrain the governments’ ability to spend on climate change-related projects to address the potentially catastrophic effects for many years to come, diminishing our hopes to make the necessary investments and innovations to address the now existential climate crisis on time will diminish.
- The corona factor: The measures we have to take to control the spread of Covid-19 before a cure is found will further challenge the financial system, as people stop earning an income and businesses go bankrupt.
Way forward
- Three authorities solution: In the suggested framework, there would be three authorities to maintain a deposit account at the central bank in each country
- 1. A deleveraging authority for leverage reduction.
- 2. Lastenausgleich (based on German Currency Reforms) authority for capital levies.
- 3. Climate authority for financing needs in developing national climate plans.
- These national authorities should be globally coordinated through the appropriate United Nations agencies.
- Control the three authorities: The Lastenausgleich authority would be under the finance ministry, whereas the deleveraging and climate authorities would be not-for-profit corporations promoted by the government.
- Capitalisation issue: The government would capitalise the deleveraging and climate authorities by the Treasury-issued zero-coupon perpetual bonds.
- The deleveraging authority would then sell its equalisation claims to the central bank in exchange for an increased balance in its deposit account at the bank, while the climate authority would wait until the deleveraging concludes.
- Further, the climate authority would not be allowed to open deposit accounts to its borrowers to ensure that it would be a pure financial intermediary, not a bank.
- Framework: Assuming that a globally agreed-upon debt reduction percentage that would bring the global non-financial sector leverage well under 100% is determined and that all countries agree to act simultaneously, the framework is as follows
- (i) the financial institutions comprising the banks and non-bank financial institutions (NBFIs) write down all the loans and debt securities on both sides of their balance sheets by the required percentage;
- (ii) the deleveraging authority compensates the banks and NBFIs for the loss if any; and
- (iii) the deleveraging authority pays each qualified resident their allocated amount less than the debt relief if any.
- If an NBFI gain after the above debt reduction, it should owe equalisation liabilities to the deleveraging authority of its jurisdiction.
- Note that as all debts mean all debts, public sector debts will also be written down by the same percentage except the official debts of the sovereigns that fall out of the scope of our proposed framework and should be handled by other means.
- After deleveraging: After deleveraging the balance of the deleveraging authority account at the central bank goes down whereas the total balance of the bank accounts (reserves) at the central bank goes up by the total payment made by the deleveraging authority.
- Hence, the base money goes up by the total payment of the deleveraging authority.
- Since NBFIs and residents cannot maintain deposit accounts at the central bank, they have to be paid through a bank which creates deposits for the NBFIs and residents against reserves.
- Hence, the broad money goes up by the amount of the payment to the NBFIs and residents.
- Issue of multi-currency balance sheet: One issue is that in many countries, the bank and NBFI balance sheets are multi-currency balance sheets.
- However, the deleveraging authority payments are in domestic currency, which may create currency risk for some banks and NBFIs.
- Backed by the central banks, the globally coordinated national deleveraging authorities should stand ready to intervene to avoid potential crises.
- Condition to spend on climate bonds: The authorities would require their domestic banks and other financial institutions to spend an internationally agreed-upon percentage of their newly found money, if any, after the deleveraging on the interest-bearing, finite-maturity bonds the national climate authorities would issue.
- Since the promoter of the climate authority is the government, the bonds of the climate authority would have the same credit with the government bonds, and the central bank would accept the climate authority bonds in its open market operations.
- Climate authority bonds as reserves: Therefore, the climate authority bonds would be the main tool to manage the reserves and deposits created through the equalisation claims.
- In addition, the climate authority bonds could be used for the greening of the financial system through the investment of foreign exchange reserves of the central banks proposed by the Bank of International Settlements (BIS 2019).
- Progressive wealth tax collection: Lastly, equipped with a “globally coordinated wealth registry” (Stiglitz et al 2019), the Lastenausgleich authorities would collect progressive wealth taxes from the owners of real and non-debt financial assets for the equalisation of burdens.
- While a part of these taxes could be used to retire some of the equalisation claims and the corresponding reserves and deposits created in the deleveraging process, another part could be transferred to the climate authorities, and the rest could be spent in the interests of the society.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Requirement of cooling off period for accepting the government office post-retirement by the judges to ensure the independence of judiciary.
Context
It has been recently announced that the President has nominated former Chief Justice of India, Ranjan Gogoi, to the Rajya Sabha. However, the time has come for us to ask a difficult question: Should judges stop accepting post-retirement jobs offered by the government, at least for a few years after retiring, because accepting such posts could undermine the independence of the judiciary?
The issue of post-retirement employment of the judges
- Retirement age of judges: Unlike federal judges in the US, judges in India do not hold office for life. They remain in office until they reach the retirement age — 65 for Supreme Court judges and 62 for high court judges.
- Protection against arbitrary removal: These judges do not hold their offices at the “pleasure” of the President. In other words, they cannot be arbitrarily removed by the government once they are appointed, and can only be impeached by a supermajority of both houses of Parliament “on the ground of proved misbehaviour or incapacity”.
- Difficult impeachment process: The impeachment process is a very difficult one and never in the history of independent India has a judge been impeached, though attempts have sometimes been made to do so. Judges, therefore, enjoy security of tenure while holding office, which is essential for maintaining judicial independence.
- How retirement of judges could undermine judicial independence? The retirement of judges threatens to undermine judicial independence.
- This is because some judges — not all — are offered post-retirement employment by the government. It is often feared that a judge who is nearing retirement could decide cases in a manner that pleases the government in order to get a favourable post-retirement position.
Not an unprecedented move
- Former CJI Gogoi is certainly not the first retired judge to be appointed to political office.
- In 1952, Justice Fazl Ali was appointed the Governor of Orissa, shortly after retiring from the Supreme Court.
- In 1958, Chief Justice M C Chagla resigned from the Bombay High Court in order to become India’s Ambassador to the US at Prime Minister Nehru’s invitation.
- In April 1967, Chief Justice Subba Rao resigned from the Supreme Court to contest elections for President.
- In 1983, Justice Baharul Islam resigned from the Supreme Court to contest as a Congress (I) candidate for a Lok Sabha seat, after ruling in favour of Bihar’s Congress (I) chief minister, Jagannath Mishra, in a controversial case where Mishra had been accused of criminal wrongdoing and misuse of office.
- In more recent times, Chief Justice P Sathasivam was appointed the Governor of Kerala. There are many other such examples.
Why restrictions about employment were not included in the Constitution?
- The Constitution provides that a retired Supreme Court judge cannot “plead or act in any court or before any authority within the territory of India”.
- Constituent assembly debate: In the Constituent Assembly, K T Shah, an economist and advocate, suggested that high court and Supreme Court judges should not take up an executive office with the government, “so that no temptation should be available to a judge for greater emoluments, or greater prestige which would in any way affect his independence as a judge”.
- However, this suggestion was rejected by B R Ambedkar because he felt that the “judiciary decides cases in which the government has, if at all, the remotest interest, in fact, no interest at all”.
- Government is the largest litigant in the courts: In Ambedkar’s time, the judiciary was engaged in deciding private disputes and rarely did cases arise between citizens and the government. “Consequently”, said Ambedkar, “the chances of influencing the conduct of a member of the judiciary by the government are very remote”.
- This reasoning no longer holds today because the government is one of the largest litigants in the courts.
Question of independence of the judiciary
- The question of constitutional propriety: In the words of India’s first Attorney General, M C Setalvad, all this raises “a question of constitutional propriety” relating to the independence of the judiciary.
- After all, could the government not use such tactics to reward judges who decide cases in its favour?
- Public perception of compromised judiciary: Further, if a judge decides highly controversial and contested cases in favour of the government and then accepts a post-retirement job, even if there is no actual quid pro quo, would this not lead to the public perception that the independence of the judiciary is compromised?
Law Commission recommendations
- In its 14th report in 1958, the Law Commission noted that retired Supreme Court judges used to engage in two kinds of work after retirement:
- Firstly, “chamber practice” (a term which would, today, mean giving opinions to clients and serving as arbitrators in private disputes).
- Secondly, “employment in important positions under the government”.
- The Law Commission frowned upon chamber practice but did not recommend its abolition.
- Ban on post-retirement government employment: It strongly recommended banning post-retirement government employment for Supreme Court judges because the government was a large litigant in the courts.
- The Commission’s recommendations were never implemented.
Conclusion
It is about time that we start expecting the judges of our constitutional courts to follow CJI Hidayatullah’s excellent example in which he had accepted government job only after the cooling period of several years.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much.
Mains level: Paper 2- Opportunity for India to assume global leadership in dealing with the COVID-19 pandemic
Context
A leadership role by India in mobilising world collaboration would be in keeping with its traditional activism globally.
Challenges and two aspects associated with it.
- The COVID-19 pandemic has brought out in sharp relief the compelling reality that has been staring us in the face for the past several years.
- This reality has two aspects.
- First aspect: That most challenges confronting the world and likely to confront it in the future are cross-national in character. They respect no national boundaries and are not amenable to national solutions.
- Second aspect: These challenges are cross-domain in nature, with strong feedback loops.
- A disruption in one domain often cascades into parallel disruptions in other domains.
- For example, the use of chemical fertilizers and toxic pesticides may promote food security but have injurious health effects, undermining health security.
- Whether at the domestic or the international level, these inter-domain linkages need to be understood and inform policy interventions. The UN Sustainable Development Goals (SDGs) reflect this awareness.
Rise in nationalism
- Need for multilateral approach: The intersection of cross-national and cross-domain challenges demand multilateral approaches.
- They require empowered international institutions of governance.
- Underlying these must be a spirit of internationalism and solidarity, a sense of belonging to common humanity.
- Moving in the reverse direction-Rise of nationalism: Over the past decade and more, the world has been moving in the reverse direction. There has been an upsurge in narrow nationalism, an assertion of parochial interests over the pursuit of shared interests and a fostering of competition among states rather than embracing collaboration.
- The global challenge of COVID-19: COVID-19 has brought these deepening contradictions into very sharp relief. This is a global challenge which recognises no political boundaries. It is intimately linked to the whole pattern of large-scale and high-density food production and distribution.
- Health crisis turned into economic crisis: It is a health crisis but is also spawning an economic crisis through disrupting global value chains and creating a simultaneous demand shock. It is a classic cross-national and cross-domain challenge.
How countries are dealing with COVID-19 and possible outcomes
- No coordination at the international level: But interventions to deal with the COVID-19 crisis are so far almost entirely at the national level, relying on quarantine and social distancing. There is virtually no coordination at the international level.
- Blame game at the international level: We are also seeing a blame game erupt between China and the United States which does not augur well for international cooperation and leadership.
- The hopeful outcome of international cooperation: While this is the present state of play, the long-term impact could follow alternative pathways.
- One, the more hopeful outcome would be for countries to finally realise that there is no option but to move away from nationalistic urges and embrace the logic of international cooperation through revived and strengthened multilateral institutions and processes.
- The depressing outcome of intense nationalist trends: The other more depressing consequence may be that nationalist trends become more intense, countries begin to build walls around themselves and even existing multilateralism is further weakened.
- Institutions such as the United Nations and the World Health Organization which are already marginalised may become increasingly irrelevant.
- There could be a return to autarkic economic and trade policies and an even deeper and more pervasive anti-globalisation sentiment.
- Depression decade ahead: Unless there is a conscious effort to stem this through a reaffirmation of multilateralism, we are looking at a very depressing decade ahead.
- This is when the world needs leadership and statesmanship, both in short supply.
- Contrast with the financial crisis: This is in contrast to the U.S.-led response to the global financial and economic crisis of 2008 when the G-20 summit was born and a coordinated response prevented catastrophic damage to the global economy.
Leadership role for India
- Is there a role here for India which is a key G-20 country, the world’s fifth-largest economy and with a long tradition of international activism and promotion of rule-based multilateralism?
- In this context, Prime Minister Narendra Modi’s remarks at the recent Economic Times Global Business Summit are to be welcomed.
- While speaking of the COVID-19 crisis, he said, “Like today, the world is facing a huge challenge in the form of Corona Virus. Financial institutions have also considered it a big challenge for the financial world. Today, we all have to face this challenge together. We have to be victorious with the power of our resolution of ‘Collaborate to Create’.”
- He went on to observe that while the world today is “inter-connected, inter-related and also interdependent”, it has “not been able to come on a single platform or frame a Global Agenda, a global goal of how to overcome world poverty, how to end terrorism, how to handle Climate Change issues.”
- From “Equal distance” to friendship with all: Modi lauded government’s policy of seeking friendship with all countries as contrasted from the earlier policy of non-alignment. He seemed to suggest that non-alignment was a defensive policy which advocated “equal distance from every country”.
- Now, he claimed, India was still “neutral” — presumably meaning non-alignment — “but not on the basis of distance but on the basis of friendship”.
- He cited India’s friendship with Iran and Saudi Arabia, and with the U.S. as well as Russia.
India’s foreign policy
- Non-alignment: Mr Modi may wish to distinguish his foreign policy from that of his predecessors, but what he describes as its “essence” is hardly distinguishable from the basic principles of Indian foreign policy since Nehru.
- Non-alignment was not defensive: India’s non-alignment was anything but defensive. The international peace-keeping contribution that the Prime Minister referred to has its origins in Nehru’s sense of international responsibility.
- Friendship with all: India has always professed its desire to have friendly relations with all countries but has been equally firm in safeguarding its interests when these are threatened.
- Mutually beneficial partnership: India’s non-alignment did not prevent it from forging strong and mutually beneficial partnerships with major countries.
- The India-Soviet partnership from 1960-1990 is an example just as the current strategic partnership with the U.S. is.
- Foreign policy rooted in a civilisational sense: The foreign policy of his predecessors had been rooted in India’s civilisational sense, its evolving place in the international system and its own changing capabilities.
- Their seminal contributions should be acknowledged and built upon rather than proclaim a significant departure.
Move in line with traditional foreign policy
- The Prime Minister’s plea for global collaboration to deal with a densely interconnected world is in line with India’s traditional foreign policy.
- Move in keeping with traditional activism on a global scale: A leadership role in mobilising global collaboration, more specifically in fighting COVID-19 would be in keeping with India’s traditional activism on the international stage.
- Commendable SAARC move: The Prime Minister has shown commendable initiative in convening leaders of the South Asian Association for Regional Cooperation nations for a regional collaborative effort on COVID-19.
- International initiative: This should be followed by an international initiative, either through the G-20 or through the U.N.
Way forward
- Reformed and Strengthened U.N. should be India’s agenda: The Prime Minister made no reference to the role of the U.N., the premier multilateral institution, as a global platform for collaborative initiatives. There may have been irritation over remarks by the UN Secretary-General on India’s domestic affairs and the activism displayed by the UN Commissioner for Human Rights on the Citizenship (Amendment) Act controversy.
- The U.N. Secretary General’s statement on India’s domestic affairs and activism by UN Secretary-General on India’s domestic affairs should not influence India’s long-standing commitment to the U.N. as the only truly inclusive global platform enjoying international legitimacy despite its failings.
- If one has to look for a “single platform” where a Global Voice could be created, as the Prime Minister suggested, surely a reformed and strengthened U.N. should be on India’s agenda.
- Opportunity for India in the pandemic: The COVID-19 pandemic presents India with an opportunity to revive multilateralism, become a strong and credible champion of internationalism and assume a leadership role in a world that is adrift. The inspiration for this should come from reaffirming the wellsprings of India’s foreign policy since its Independence rather than seeking to break free.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Polymerase Chain Reaction Test
Mains level: Coronovirus outbreak and its mitigation
The diagnosis of COVID-19 can be done with the Polymerase Chain Reaction (PCR) Test which is explained as under:
The PCR Test
- It uses a technique that creates copies of a segment of DNA. ‘Polymerase’ refers to the enzymes that make the copies of DNA.
- Kary Mullis, the American biochemist who invented the PCR technique, was awarded the Nobel Prize for Chemistry in 1993.
- The ‘chain reaction’ is how the DNA fragments are copied, exponentially — one is copied into two, the two are copied into four, and so on.
- However, SARS-COV-2 is a virus made of RNA, which needs to be converted into DNA. For this, the technique includes a process called reverse transcription.
- A ‘reverse transcriptase’ enzyme converts the RNA into DNA. Copies of the DNA are then made and amplified.
- A fluorescent DNA binding dye called the “probe” shows the presence of the virus. The test also distinguishes SARS-COV-2 from other viruses.
Various Stages:
1) Collection and transport
- Testing centre takes swabs from nasal cavities and back of the throat (pharynx), and puts samples in a “virus transport medium”, which contains balanced salts and albumin to prevent the virus from disintegrating.
- Sample is then transported in cold storage to the testing lab.
2) Extraction of viral RNA
- Coronaviruses have large single-stranded RNA genomes.
- Testing lab extracts the RNA from the samples, using commercially available kits.
3) Putting THE RNA in THE PCR mix
- Extracted RNA is added to a polymerase chain reaction (PCR) mix.
- This includes the ‘master mix’, which contains a ‘reverse transcriptase’ enzyme that converts the RNA into DNA.
- Master Mix contains Taq polymerase, the enzyme that creates copies of the DNA, nucleotides, as well as other elements such as magnesium — an ion of which is needed to amplify the DNA.
- The PCR mix also contains ‘reagents’ such as ‘primers’ and ‘probes’.
- Primers are particular strands of DNA that are designed to bind with the DNA that is to be copied; probes are used to detect the specific sequence in the DNA sample.
- Finally, the PCR mix consists of a “housekeeping” gene — a normal human gene (RNAse P) that is used to ensure that samples were properly collected, and RNA extracted.
4) Amplification of the viral DNA
- Sample, in its PCR mix, is put into tubes or plates, which are then put in a thermal cycler machine that is used to conduct the PCR process.
- First, the RNA is converted into DNA. Then the process of copying the genes starts.
- The thermal cycler heats and cools the mixture with the sample, alternating between three temperatures — for melting the DNA to separate the two strands.
- The thermal cycler runs 30-40 such cycles in order to amplify the DNA to check for the virus.
5) Testing against controls
- Amplified DNA is tested against a positive control, which usually consists of genes of the virus cloned into plasmid, and a negative control, which is a ‘known’ sample that has tested negative for the virus earlier.
- RNase P should show amplification, positive control should be positive, negative control should be negative, and then whatever result you get for the specimen, is the correct result.
- In order for a test to be valid before the result is released, certain ‘validity criteria’ have to be met.
- If the housekeeping gene (RNase P) is positive, positive control is positive, negative control is negative, and the sample does not show any PCR positive result, the sample is declared negative.
- If the PCR result is positive, the patient has COVID-19.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Heavy Water
Mains level: Nuclear pollution
In a controversial move, Japan has decided to dump the radioactive heavy water from the Fukushima nuclear power plant into the Sea. The dumping of nuclear waste is considered to be the easiest way to get rid of it.
What is Heavy Water?
- Heavy water (deuterium oxide) is a form of water that contains a larger than normal amount of the hydrogen isotope deuterium rather than the common hydrogen that makes up most of the hydrogen in normal water.
- Heavy water is used in certain types of nuclear reactors, where it acts as a neutron moderator to slow down neutrons.
- Slowed neutrons are more likely to react with the fissile uranium-235 than with uranium-238 which captures neutrons without fissioning.
Where is Fukushima waste?
- It is currently being stored in large tanks, but those are expected to be full by 2022.
- Almost 1.2 million liters of radioactive water from the Fukushima nuclear power plant is to be released into the ocean.
- The contaminated water has since been used to cool the destroyed reactor blocks to prevent further nuclear meltdowns.
Hazards of the nuclear contamination
- Radioactive pollution in the ocean has been increasing globally — and not just since the disaster at Fukushima.
- Radiation levels in the sea off Fukushima were millions of times higher than the government’s limit of 100 Becquerel.
- A single Becquerel that gets into our body is enough to damage a cell that will eventually become a cancer cell.
- Even the smallest possible dose, a photon passing through a cell nucleus, carries a cancer risk. Although this risk is extremely small, it is still a risk.
Who else dumped radioactive water into oceans?
The dumping of nuclear waste in drums was banned in 1993 by the London Convention on the Prevention of Marine Pollution. But discharging liquid contaminated with radiation into the ocean is still permitted internationally.
- The lion’s share of dumped nuclear waste came from Britain and the Soviet Union, figures from the IAEA show.
- By 1991, the US had dropped more than 90,000 barrels and at least 190,000 cubic meters of radioactive waste in the North Atlantic and Pacific.
- To this day, around 90% of the radiation in the ocean comes from barrels discarded in the North Atlantic, most of which lie north of Russia or off the coast of Western Europe.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Nominated members in RS
Mains level: Ethical issue involved
Former CJI Ranjan Gogoi has been nominated as a member of Rajya Sabha.
Nominated members in RS
- As per the Fourth Schedule to the Constitution of India on 26 January 1950, the Rajya Sabha was to consist of 216 members of which 12 members were to be nominated by the President and the remaining 204 elected to represent the States.
- The present strength, however, is 245 members of whom 233 are representatives of the states and union territories and 12 are nominated by the President.
- The Rajya Sabha is not subject to dissolution; one-third of its members retire every second year.
- The 12 nominated members of the Rajya Sabha are persons who are eminent in particular fields, and are well known contributors in the particular field.
- The nominated members are usually amongst persons having special knowledge or practical experience in literature, science, art and social service.
Constitutional provisions
- 80(1)(a) of Constitution of India makes provision for the nomination of 12 members to the Rajya Sabha by the President of India in accordance with provisions of Arts.80(3).
- 80(3) says that the persons to be nominated as members must be possessing special knowledge or practical experience in respect of such matters as the following namely : Literature, science, art and social service.
Earlier CJIs in other Offices
- Justice Hidayatullah was appointed vice-president nine years after his tenure as CJI ended (1979).
- Justice Ranganath Mishra was appointed six years after his retirement (1998).
- Justice Bahraul Islam served as a member of the Rajya Sabha several years before he was elevated to the SC (1983).
- Justice Subba Rao, who contested for the post of president (and lost to Zakir Hussain) was roundly criticised for the decision at that time.
Issues with CJI’s appointment
- Late Arun Jaitley cautioned, in 2012, that “pre-retirement judgments are influenced by a desire for a post-retirement job”. Perhaps, those words were never more relevant than they are today.
- The immediacy and hurried nature of the present appointment, barely four months after Justice Gogoi retired, is bound to give rise to questions about its context.
- It was a tenure that inspired much scrutiny; a tenure which saw the repeated use of sealed envelopes, the contents of which were known only to the government; a tenure which recorded a significant and frequent number of judgments in favour of the executive.
What were the alternatives?
- Several appointments to administrative bodies require a cooling-off period for individuals so as to eliminate the possibility or suspicion of a conflict of interest or quid pro quo.
- Officials who retire from sensitive positions are barred from accepting any other appointment for a period of time, normally two years.
- These cooling-off periods in posts are premised on the snapping off of the nexus between previous incumbency and new appointment by the interposition of a sufficient time gap.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Rivers mentioned in the newscard
Mains level: Not Much
Environmental organisations from across central and Eastern Europe have criticised a major project intending to link three rivers and provide seamless navigation between three of Europe’s peripheral seas, according to a statement.
Danube-Oder-Elbe Canal
- For centuries Europe’s rulers have dreamed of construction of a huge Y-shaped canal connecting the Elbe, Oder and Danube rivers, most of which would be on Czech territory.
- The Canal intends to connect the Danube, Oder and Elbe rivers and thus provide another navigable link from the Black Sea to the North and Baltic Seas.
- The Main-Danube Canal already provided a navigable connection between the Black Sea and the North Sea.
- Several hundred kilometres of artificial waterways would have to be built for the canal, according to the statement.
- Critics have called on the European Commission to ensure that the project be excluded from EU funding, and not be included as part of the Trans-European Transport Network.
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From UPSC perspective, the following things are important :
Prelims level: Sheikh Mujib and his legacy
Mains level: NA
March 17 is the birth anniversary of Bangabandhu Sheikh Mujibur Rahman (1920-1975), the founding leader of Bangladesh and the country’s first Prime Minister.
Sheikh Mujibur Rahman
- Before joining politics, Rahman studied law and political science in Kolkata and Dhaka and agitated for Indian independence.
- He is referred to as Sheikh Mujib or simply Mujib, the title ‘Bangabandhu’ meaning ‘friend of Bengal’.
- 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.
Role in Bangladesh liberation
- 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 People’s 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 PM 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.
His legacy
- 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.
- 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.
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From UPSC perspective, the following things are important :
Prelims level: Essential Commodities Act, PSF
Mains level: Read the attached story
The Price Monitoring Division (PMD) in the Department of Consumer Affairs is monitoring the retail and wholesale prices of 22 essential food commodities due to increased panic buying by customers.
Essential Commodities Act
- The ECA is an act which was established to ensure the delivery of certain commodities or products, the supply of which if obstructed owing to hoarding or black-marketing would affect the normal life of the people.
- The ECA was enacted in 1955. This includes foodstuff, drugs, fuel (petroleum products) etc.
- It has since been used by the Government to regulate the production, supply and distribution of a whole host of commodities it declares ‘essential’ in order to make them available to consumers at fair prices.
- Additionally, the government can also fix the maximum retail price (MRP) of any packaged product that it declares an “essential commodity”.
- The list of items under the Act includes drugs, fertilizers, pulses and edible oils, and petroleum and petroleum products.
- The Centre can include new commodities as and when the need arises, and takes them off the list once the situation improves.
How ECA works?
- If the Centre finds that a certain commodity is in short supply and its price is spiking, it can notify stock-holding limits on it for a specified period.
- The States act on this notification to specify limits and take steps to ensure that these are adhered to.
- Anybody trading or dealing in the commodity, be it wholesalers, retailers or even importers are prevented from stockpiling it beyond a certain quantity.
- A State can, however, choose not to impose any restrictions. But once it does, traders have to immediately sell into the market any stocks held beyond the mandated quantity.
- This improves supplies and brings down prices. As not all shopkeepers and traders comply, State agencies conduct raids to get everyone to toe the line and the errant are punished.
- The excess stocks are auctioned or sold through fair price shops.
Ex: The Union Government has brought masks and hand-sanitisers under the ECA to make sure that these products, key for preventing the spread of Covid-19 infection, are available to people at the right price and in the right quality.
What about Food Items?
- The items covered include rice, wheat, atta, gram dal, arhar dal, moong dal, urad dal, masoor, dal, tea, sugar, salt, Vanaspati, groundnut oil, mustard oil, milk, soya oil, palm oil, sunflower oil, gur, potato, onion and tomato.
- Based on the deliberations, Government takes various measures from time to time to stabilize prices of essential food items which, inter-alia, include appropriately utilizing trade and fiscal policy instruments like import duty.
- The govt. can impose stock limits and advise State for effective action against hoarders & black marketers etc. to regulate domestic availability and moderate prices.
- The government utilizes the buffer of agri-horticultural commodities like pulses, onion, etc. built under Price Stabilization Fund (PSF) to help moderate the volatility in prices.
Back2Basics
Price Stabilization Fund (PSF)
- The PSF was set up in 2014-15 under the Department of Agriculture, Cooperation & Famers Welfare (DAC&FW) to help regulate the price volatility of important agri-horticultural commodities like onion, potatoes and pulses were also added subsequently.
- Procurement of these commodities will be undertaken directly from farmers or farmers’ organizations at farm gate/mandi and made available at a more reasonable price to the consumers.
- Losses incurred, if any, in the operations will be shared between the Centre and the States.
- PSF provides for advancing interest-free loans to State Governments/ UTs and Central agencies to support their working capital and other expenses they might incur on procurement and distribution interventions for such commodities.
- The scheme provides for maintaining a strategic buffer of the commodities for subsequent calibrated release to moderate price volatility and discourages hoarding and unscrupulous speculation.
- The PSF is managed centrally by a Price Stabilization Fund Management Committee (PSFMC) which will approve all proposals from State Governments and Central Agencies.
- The PSF is maintained as a Central Corpus Fund by Small Farmers Agribusiness Consortium (SFAC), a society promoted by the Ministry of Agriculture for linking agriculture to private businesses and investments and technology.
With inputs from: http://www.arthapedia.in/index.php?title=Price_Stabilisation_Fund_(PSF)
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