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THE INTERNATIONAL RELATIONS

1. CHINA CONSTRUCTING BRIDGE ON PANGONG LAKE IN LADAKH

THE CONTEXT: China is constructing a bridge in eastern Ladakh connecting the north and south banks of Pangong Tso (lake), which will significantly bring down the time for the People’s Liberation Army (PLA) to move troops and equipment between the two sectors.

THE EXPLANATION:

• “On the north bank, there is a PLA garrison at Karnak fort and on the south bank at Moldo, and the distance between the two is around 200 km. The new bridge between the closest points on two banks, which is around 500 m, will bring down the movement time between the two sectors from around 12 hours to three or four hours,” one of the sources said. The bridge is located around 25 km ahead of the Line of Actual Control (LAC), the source stated.

• The construction had been going on for some time and it would reduce the overall distance by 140-150 km, the other source said.
• Earlier, the PLA had to take a roundabout crossing Rudok county. But now the bridge would provide a direct axis, the first source said, adding that the biggest advantage with the new bridge was the inter-sector movement as the time would come down significantly. “They need to build piers for the bridge, which has been underway,” the source stated.
• The bridge is in China’s territory and the Indian Army would have to now factor this in its operational plans, the source noted. India holds one-third of the 135-km-long boomerang-shaped lake located at an altitude of over 14,000 feet. The lake, a glacial melt, has mountain spurs of the Chang Chenmo range jutting down, referred to as fingers.
• The north bank, which has much higher differences in perception of the LAC than the south bank, was the initial site of the clashes in early May 2020, while tensions on the south bank flared up later in August. The Indian Army got a tactical advantage over the PLA on the south bank in August-end by occupying several peaks lying vacant since 1962, gaining a dominating view of the Moldo area. On the north bank too, the Indian troops set up posts facing PLA positions on the ridge-lines of Finger 4.

About Pangong Lake

• Pangong Tso is popular for its changing colour ability. Its colour changes from shades of blue to green to red.
• It is one of the highest altitude lakes in the world that is filled with saline water. It is located at an altitude of 4350 m above sea level.
• It is located in disputed territory. Approximately 60 percent of the lake, in terms of length, lies in China, and the eastern end of Pangong Tso lies in Tibet.

THE INDIAN ECONOMY

2. RBI APPROVES SMALL OFFLINE E-PAYMENTS

THE CONTEXT: The Reserve Bank of India (RBI) has come out with the framework for facilitating small-value digital payments in offline mode, a move that would promote digital payments in semi-urban and rural areas.

THE EXPLANATION:

• The framework incorporates feedback received from the pilot experiments on offline transactions conducted in different parts of the country between September 2020 and June 2021.
• Offline digital payment does not require Internet or telecom connectivity.
• “Under this new framework, such payments can be carried out face-to-face (proximity mode) using any channel or instrument like cards, wallets and mobile devices,” the RBI said.
• “Such transactions would not require an Additional Factor of Authentication. Since the transactions are offline, alerts (by way of SMS and/or e-mail) will be received by the customer after a time lag,” it added.
• There is a limit of ₹200 per transaction and an overall limit of ₹2,000 until the balance in the account is replenished. The RBI said the framework took effect ‘immediately’.

3. INDIA’S INCOME INEQUALITY FELL POST-2020 LOCKDOWN AS RICH GOT POORER, US ECONOMIC STUDY SHOWS

THE CONTEXT: Millions of Indians were pushed into poverty during the Covid-19 pandemic, but the period post the initial strict lockdown also saw a decline in income inequality in the country.

THE EXPLANATION:

• The paper, titled ‘Inequality in India declined during Covid’, published by the National Bureau of Economic Research (NBER) said the pandemic in India was associated with a decline in inequality in two senses.
• Indians from higher income groups had larger relative reductions in income than the poor.
• Consumption inequality also declined, albeit only marginally so.
• The researchers’ main source of data was the Consumer Pyramids Household Survey (CPHS), conducted by the Centre for Monitoring Indian Economy, which comprises a sample of 1.97 lakh households, with monthly information on their finances available from January 2015 to July 2021.
• The study’s most remarkable finding that income inequalities have declined in the months since the lockdown was lifted seems to stand in contrast with what other recent studies have said about income inequalities in India.
• According to the World Inequality Report 2022, the top 10 percent of Indians had about 96 times more income on average than the bottom 50 percent. Similarly, Oxfam International claimed that in 2021 India’s top 1 percent owned about 77 percent of the country’s wealth.
• The NBER paper, however, qualifies its findings by noting that Gini coefficients — a statistical measure of the amount of inequality that exists in a population.
• The decline in inequality actually began in 2018, a trend that was “interrupted” by the lockdown, but which then resumed.

HOW DID THE GAP SHORTEN?

• Income inequality is basically the average gap between the incomes of the rich and the poor. This ‘inequality’ falls if the incomes of the rich fall, or if the incomes of the poor rise.
• The study shows that the reduction in income inequality in India could be attributed to incomes of upper-income households falling during the pandemic.
• According to the study, income poverty in urban areas jumped from 40 percent before the pandemic to nearly 70 percent during the lockdowns. Poverty was defined, in this case, by the World Bank’s $1.9 a day (or less) benchmark. After the lockdown, poverty fell and income and consumption increased, “but it did not recover to pre-pandemic levels”, the researchers said.
• However, despite the increase in poverty, income inequality fell in both urban and rural areas, largely because the earnings of richer households went down.

WHY DID THE INCOMES OF RICHER PEOPLE FALL?

• The sources of income of India’s rich derive “disproportionately” from services and capital income (basically wealth derived from wealth, like dividends and interest), both of which were “disproportionately impacted during the pandemic”. Unlike for the rich, capital incomes do not form a major share in the incomes of poorer households.
• A larger fraction of top-quartile income is from the service sector… and that sector experienced the largest drop in consumer expenditure during the pandemic.
• Demand for the type of labour supplied by the rich also dropped more than for the poor.
• The employment rate fell more for the poorer sections of society during the lockdown, but they also recovered more quickly.
• The performance of the lower percentiles was “particularly remarkable” since India, unlike the US, had “little fiscal stimulus in the form of income transfers”.

4. ALL YOU NEED TO KNOW ABOUT GST COMPENSATION

THE CONTEXT: States are seeking an extension of GST compensation for five more years.

WHAT IS GST COMPENSATION?

• The introduction of the Goods & Services Tax (GST) required States and Union Territories (with Legislature) to subsume their sovereignty in a GST Council, raising the issue of loss on account of migration from Value Added Tax/Sales Tax to GST. Any mechanism to remedy this should be backed by the legislature.
• Keeping this in mind, Section 18 of the Constitution (One Hundred and First Amendment) Act, 2016 prescribes: “Parliament shall, by law, on the recommendation of the Goods and Services Tax Council, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for a period of five years.”
• Accordingly, the Parliament enacted a law — GST (Compensation to States) Act, 2017. The law prescribes that the financial year 2015-16 shall be taken as the base year for the purpose of calculating compensation and States were assured of a 14 percent growth in revenues every year.

HOW IS IT FUNDED?

• In order to mobilize resources for compensation, a cess is being levied on such goods, as recommended by the Goods and Services Tax Council, over and above the GST on that item. It is called compensation cess.
• As of date, compensation cess is levied on products such as pan masala, tobacco, aerated waters and motor cars apart from coal.

WHO PAYS COMPENSATION TO WHOM? WHEN?

• The consumer is required to pay for compensation. It is collected by the Centre which releases it to States.
• The proceeds of the compensation cess will be credited to a non-lapsable fund known as the Goods and Services Tax Compensation Fund in the public account.

FOR HOW LONG WILL IT BE PAID?

• According to the law, it will be paid for five years from the date GST came into effect; i.e. till June 2022. However, a cess will continue to be levied for repayment of loans taken to compensate States during FY21 and FY22.

WHY ARE STATES DEMANDING AN EXTENSION OF THE COMPENSATION?

• States say their revenue situation is yet to improve on two counts due to the introduction of the GST and because the pandemic has affected revenue collection.
• At the same time, their expenses have gone up and they expect a higher deficit as revenue growth is low.
• Considering all these, States are seeking an extension of compensation for five more years. Any decision, in this regard, has to be taken by GST Council.

THE SCIENCE AND TECHNOLOGY

5. ISRO GEARING UP FOR MULTIPLE SPACE MISSIONS IN 2022

THE CONTEXT: After a rather muted 2021 in terms of satellite launches, the Indian Space Research Organisation (ISRO) is gearing up for a number of missions in 2022 including the launch of the first unmanned mission of Gaganyaan, its Chairman, K. Sivan said.

• In his New Year’s message for 2022, Mr. Sivan said ISRO had a number of missions to execute this year. These include
  • the launch of the Earth Observation Satellites,
  • EOS-4 and EOS-6 onboard the Polar Satellite Launch Vehicle (PSLV), and
  • the EOS-02 on board the maiden flight of the Small Satellite Launch Vehicle (SSLV).
  • “[ISRO has] many test flights for Crew Escape System of Gaganyaan and launch of the first unmanned mission of Gaganyaan. In addition, we also have Chandrayaan-03, Aditya Ll, XpoSat, IRNSS and technology demonstration missions with indigenously developed advanced technologies,” he said. Design changes on Chandrayaan-3 and testing have seen huge progress, he said.
  • Sivan said the hardware in loop test of Aditya L1 spacecraft and accommodation studies for XpoSat in the SSLV have been completed and ISRO has delivered the S-band SAR payload to NASA for NISAR [NASA-ISRO SAR] mission.
  • Three new space science missions are also in the pipeline, Mr. Sivan said. These include a Venus mission, DISHA –a twin aeronomy satellite mission and TRISHNA, an ISRO-CNES [Centre national d’étudesspatiales] mission in 2024.

THE DISASTER MANAGEMENT

6. INDIA’S OLD DAMS: GANDHI SAGAR IN MP NEEDS IMMEDIATE REPAIR, SAYS CAG REPORT

THE CONTEXT: Gandhi Sagar Dam on Chambal River in Madhya Pradesh is in need of immediate repair, warned a new CAG report. It is one of the five water reservoirs of national importance.

THE EXPLANATION:

• The absence of regular checks, non-functional instruments and choked drains are the major problems plaguing the dam for years, the report by the Comptroller and Auditor General of India (CAG) released December 23, 2021.
• Gandhi Sagar was put in Category II of the dam inspection report.
• Dams with major deficiencies, which may lead to complete failure / partial failure and need attention at once, fall under Category I. Those with minor to medium deficiencies, which are rectifiable but need immediate attention fall under Category II.
• The CAG report mentioned there is one dam in Category I but didn’t name it. As many as 27 other smaller dams of MP were in Category II.

ABOUT GANDHI SAGAR DAM

• Gandhi Sagar Dam was constructed in 1960 to provide drinking water to several districts of Rajasthan and generate 115 megawatts of electricity. It has been breached several times in recent years, causing flooding in downstream areas.
• Three districts in the state, Sheopur, Morena and Bhind, with an approximate collective population of 4.35 million (as per the 2011 Census), lie downstream the dam.
• Gandhi Sagar Dam was among the few of national importance to be instrumented but many of the instruments have been non-functional for years, the CAG report observed.
• The state dam safety organization (SDSO), the department responsible for its maintenance, did not comply with recommendations by the Central Water Commission (CWC) and Dam Safety Inspection Pane (DSIP) on remedial measures, according to the CAG.

THE PRELIMS PRACTICE QUESTION

Q1. With reference to Madanapalle of Andhra Pradesh, which one of the following statements is correct?

a) PingaliVenkayya designed the tricolor Indian National Flag here.

b) PattabhiSitaramaiah led the Quit India Movement of the Andhra region from here.

c) Rabindranath Tagore translated the National Anthem from Bengali to English here.

d) Madame Blavatsky and Colonel Olcott set up headquarters of Theosophical Society first here.

ANSWER FOR 31^STDECEMBER 2021

Answer: D

Explanation:

Please refer to the following map of the Indus River System.