1. Parliament has just passed a dangerous bill READ MORE
2. Ensuring no migrant worker goes hungry READ MORE
3. In solving crime, the false promise of technology READ MORE
4. The Slow Poison of Hate Speech Harms in Obvious and Insidious Ways READ MORE
5. Faulty Biometrics, Duplication, Errors: What CAG Audit Report Says About Aadhaar Regime READ MORE
6. Unravelling Concerns Over the Criminal Procedure (Identification) Bill, 2022 READ MORE

1. Ending extreme poverty in India READ MORE
2. Roadblocks to social cohesion and amity READ MORE
3. Rethinking agrarian suicides in India READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. Budget session of Parliament ends on productive note READ MORE
2. Russia suspended from UN Human Rights Council over Ukraine READ MORE
3. India-US 2+2 dialogue will provide opportunity to discuss key issues: MEA READ MORE
4. Explained: What is SDF, the RBI’s new tool to absorb excess liquidity to control inflation? READ MORE
5. Explained: Indonesia’s palm oil crisis, and its implications for India READ MORE
6. What Is Hybrid Immunity and Why Is it ‘the Best Kind of Immunity to Have’? READ MORE
7. RBI stays accomodative, warns of ‘tectonic shifts’ READ MORE

Main Exam

GS Paper- 1

1. Ending extreme poverty in India READ MORE
2. Roadblocks to social cohesion and amity READ MORE
3. Rethinking agrarian suicides in India READ MORE
4. Bankim Chandra Chatterjee gave India the means to express itself. Sri Aurobindo echoed him READ MORE
5. With India’s geographical diversity, states must tailor climate change plans to localised concerns READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Parliament has just passed a dangerous bill READ MORE
2. Ensuring no migrant worker goes hungry READ MORE
3. In solving crime, the false promise of technology READ MORE
4. The Slow Poison of Hate Speech Harms in Obvious and Insidious Ways READ MORE
5. Faulty Biometrics, Duplication, Errors: What CAG Audit Report Says About Aadhaar Regime READ MORE
6. Unravelling Concerns Over the Criminal Procedure (Identification) Bill, 2022 READ MORE

INTERNATIONAL ISSUES

1. Ukraine and the anatomy of India’s neutrality READ MORE
2. Is India’s position on Russia affecting its relationship with the U.S.? READ MORE
3. BRICS and the creation of a multipolar world READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. Beyond Border-Gavaskar: Periodic reappraisal of the economic gains from the trade pact with Australia is pragmatic READ MORE
2. Driving monetary policy in troubled times READ MORE
3. The future of Indian trade deals READ MORE

ENVIRONMENT AND ECOLOGY 

1. Thazhampettai: Climate change, erratic ocean currents make fishing in this Tamil Nadu village unpredictable READ MORE

SECURITY

1. Not just AFSPA, India must reboot its counter-insurgency strategy & free its Army from it READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

1. Fill yourself with Ram Naam to be in bliss READ MORE
2. A few good officers: There are still some dedicated men & women who are keeping IPS flag flying READ MORE

Questions for the MAIN exam

1. ‘Recent Russia-Ukraine war is challenge for India’s strategic autonomy and maintaining a balance between Russia and West is not as easy as was in recent past’. In the light of statement discuss whether the NAM like initiative is still relevant for India’s foreign policy?
2. Instead of joining multilateral trade pacts like RCEP, India is focusing on bilateral trade pacts, that shows India is choosing its interests over the regional interests. In the light of the statement discuss how bilateral trade pacts are more beneficial for India?

QUOTATIONS AND CAPTIONS

• Integrity, the choice between what’s convenient and what’s right.
• The India-Australia Economic Cooperation and Trade Agreement (ECTA) signed last week is a key step in enhancing bilateral economic ties between the two major Indian Ocean littoral states and reflects the growing strategic alignment between New Delhi and Canberra.
• Ukraine crisis could catapult India to the centre of a diplomatic and economic triangle, with Russia and China, in Indo-Pacific.
• New Delhi is basking in its well-deserved spotlight with well-crafted diplomacy. India could be looking at a new dawn. After all, RIC controls 22 per cent of the global GDP and 16 per cent of global exports of goods and services.
• The right against self-incrimination is at the heart of protection against police excess and torture. Record-keeping as mandated by the Bill violates this right.
• The Monetary Policy Committee must give priority to reviving growth. Inflation threat can be addressed through non-monetary measures.
• The Criminal Procedure (Identification) Bill creates a system with virtually no fetters on processing measurements from any arrestee, detainee, convicted offender, or any person whose measurement may be considered “expedient” for any investigation.
• The role played by subsidised foodgrain programmes in eliminating extreme hunger in the country has an all-round stamp of approval. Their impact on reducing the level of poverty, however, cannot be considered a foregone conclusion since poverty is not just a measure of hunger.
• The government must carry out a holistic review of India’s counter-insurgency strategy, transform the CRPF (if not done in the last 8 years) and relieve the armed forces for their primary mission.
• The vacancies raise questions on the justice delivery system as tribunals are institutions that play an important role in discharging judicial or quasi-judicial duties.

Essay Topic

• The future belongs to nations with grains, not guns.

50-WORD TALK

• The third positive indigenisation list released by the defence ministry with some big-ticket items like naval utility helicopters, light tanks and anti-drone systems is a major step forward. However, a mere list isn’t enough. Indian private industry should be better integrated and emphasis should be on spending more on R&D.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

[WpProQuiz 197]

THE CONTEXT: The Centre constituted the Ken-Betwa Link Project Authority to implement the first initiative under the national river interlinking policy, which seeks to bring nearly 11 lakh hectares of land under irrigation in the parched Bundelkhand region straddling Uttar Pradesh and Madhya Pradesh. Earlier, the finance minister allocated Rs 44,605 crore for the implementation of the Ken-Betwa River link project for irrigation of the Bundle Khand region in the Union Budget 2022-23.

KEN BETWA LINK PROJECT: OVERVIEW

• It is a river-interlinking project that aims to transfer surplus water from the Ken river in Madhya Pradesh to Betwa in Uttar Pradesh to irrigate the drought-prone Bundelkhand region. Both Ken and Betwa are the tributaries of the Yamuna.
• It is the first river interlinking project, among the 16 similar projects planned under the Peninsular Rivers Development of the National Perspective Plan (NPP).
• The main objective of the NPP is the transfer of water from river basins with surplus water to those with scarce water, for tackling the problem of water scarcity. The NPP comprises the Himalayan Rivers Development and Peninsular Rivers Development.
• The Ken Betwa River linking project, the construction schedule for which has been planned for eight years, will be executed in two phases:
• Phase-I: In the first phase, the Daudhan dam complex and its appurtenances, such as low-level tunnel, high-level tunnel, 221-kilometre Ken-Betwa link canal, and powerhouses will be completed.
• Phase-II: In the second phase, the Ken Betwa link project development works will be started for the lower Orr dam, Bina complex project, and Kotha barrage.

KEN BETWA RIVER LINKING PROJECT TIMELINE

• August 1980: The National Perspective Plan(NPP) is formulated.
• August 2005: MoU signed by state governments of MP, UP, and the ce
• central government to prepare the DPR for the project.
• April 2010: The National Water Development Agency (NWDA) completes the DPR for phase-I of the KBLP.
• January 2014: The NWDA completes the DPR for phase II of the project.
• September 2014: Special Committee on interlinking of rivers (ILR) was constituted, for implementing the ILR program.
• April 2015: A task force for interlinking of rivers was constituted by MoWR, River Development, and Ganga Rejuvenation.
• March 2021: Governments of UP and MP sign an MoU with the Jal Shakti Ministry for implementing the Ken betwa river linking project.
• February 2022: Government announces budget allocation of Rs 44,605 crore for the project during the Union Budget 2022-23.

KEN BETWA PROJECT COST

• The project will be completed at an estimated cost of around Rs 44,605 crores. The Ken-Betwa Link Project Authority, a special purpose vehicle (SPV) for implementing the project will be formed and the central government will bear 90% of the total project cost, while the states will bear the rest (UP and MP).

A Special Purpose Vehicle (SPV) for the project:

• A Special Purpose Vehicle (SPV) called Ken-Betwa Link Project Authority (KBLPA) will be set up to implement the project. In fact, the Centre has set in motion the process of creation of the National Interlinking of Rivers Authority (NIRA), an independent, autonomous body for planning, investigation, financing, and implementation of the interlinking of river (ILR) projects in the country.
• The NIRA will have powers to set up SPV for individual link projects.

KEN BETWA RIVER LINKING PROJECT: BENEFITS AND IMPACT

• The government envisions the interlinking of rivers as a top priority towards sustainable development of water resources in India. The Ken Betwa link project has been planned as a multi-purpose project for providing several benefits in terms of better utilisation of water resources and addressing the water scarcity in several parts of the Bundelkhand region.
• The region is prone to recurring drought conditions that have impacted socio-economic development in the area. Moreover, the location is not rich in groundwater due to the hard rock and marginal alluvium terrain. Hence, the project will help in utilising the floodwater during monsoon and stabilise the availability of water during lean months, especially in drought years.
• The Ken and Betwa river project will also provide annual irrigation and hydropower generation. The districts that will benefit from the Ken Betwa link pariyojna include Chhatarpur, Tikamgarh, Sagar, Damoh, Datia, Vidisha, Shivpuri, and Raisen and Panna in Madhya Pradesh and Jhansi, Mahoba, Banda and Lalitpur in Uttar Pradesh. Due to the project, as many as 62 lakh people in the Bundelkhand region will also experience an improved drinking water supply.

SOCIAL, ECONOMIC, AND ENVIRONMENTAL IMPACTS OF THE PROJECT

Social Impact: A major goal of the project is to provide irrigation to the water-scarce Bundelkhand region. According to the Water Resources Ministry, a total of 10 villages consisting of 1,585 families are likely to be affected by this project.

• Loss of Land: In all 6422.62 ha of private lands would be lost by the project affected families for the construction of the Daudhan dam and other project components along with the canal network under the project. Besides, as per the project design, about 5339.00 ha of forest lands would also be brought under various project components. This indicates that the landowners would lose their landed properties.
• Loss of Livelihood: About 72 percent of households would become landless, nearly 21 percent would become marginal farmers and almost 7 percent will fall under the small farmer category. As a result of land acquisition, the project affected big farmers who would lose their big farmer status.
• Loss of Employment: Due to land acquisition, several families, who become landless, would lose their total self-employment, who otherwise have been engaged in their farming activity.
• Loss of Income: Project-affected household’s socio-economic environment will affect their family life due to loss of land, livelihood, and employment resulting in reduced family income.

Economic Impact:

• This project will prove several economic benefits like the development of agro-based industries, and transportation and storage facilities.
• Increased farm supplies, production, and consumption of fertilizer, pesticide, farm equipment, and employment generation.
• Economic benefits of irrigation water supply include various benefits on, crop production; recharges groundwater, animal husbandry, farm equipment, and agro-processing.
• Livestock production, especially milk, is a major part of the agricultural economy in the Bundelkhand region. Under the project, a large water body will be coming up by constructing a dam and will certainly recharge and increase the groundwater levels in the project area. This will help the farming community as well as other water users who depended on groundwater facilities.
• The project has good potential, particularly because of the close proximity of the Daudhan dam site to Khajurao for recreation and tourism development.
• Provision for the development of tourist huts, and picnic spots has been made on the periphery of Rangwan reservoir (about 9 km from the Daudhan dam site).
• The negative part of the KBLP project is crop and livestock production loss due to the submergence of the crop area upstream of the reservoir.

Environmental Impact:

• This project would submerge an area of 9,000 hectares. Of which 5,258 hectares are forest land (including 4,141 hectares of Panna Tiger Reserve).
• River diversion would bring drastic changes in the physical and chemical compositions of the sediment load, river morphology, and the shape of the delta formed at the river mouth. All these have serious economic and livelihood implications that are merely ignored by the project.
• The project may also lead to a loss of two million trees.
• The land use land cover and vegetation data show that tree density and diversity are comparatively higher in the submerged area.
• The regeneration pattern also shows that the seedling diversity and richness and sapling density diversity and richness are high in the submerged area.
• Minimum flow in the Ken River is adequate to dilute the untreated sewage. Hence the impact on the surface water quality is negligible, which will still be reduced by sewage treatment measures.
• There are valuable timber trees that are going to be submerged.

WILL THE PROJECT AFFECT THE PANNA TIGER RESERVE?

• Panna Tiger Reserve is one of the country’s important and successful tiger recovery reserves.
• A species recovery plan was developed to reinforce the tiger population, because of which the tiger population has increased from 0 in 2009 to 54 in 2019.
• Panna Tiger Reserve was included in the global network of biosphere reserves by the United Nations Educational, Scientific, and Cultural Organisation (UNESCO) in 2020.
• The UNESCO cited PTR as a critical tiger habitat.
• The Project will lead to the submergence of a major portion of the core area of the Panna Tiger Reserve in Madhya Pradesh, triggering a major loss of the tiger and its major prey species such as chital and sambar.
• The project may incur an estimated loss of 58.03 square kilometers (10.07 percent) of critical tiger habitat (CTH) in the reserve.
• There will be an indirect loss of 105.23 sq km of CTH because of habitat fragmentation and loss of connectivity due to submergence.
• The total area submerged would be 86.50 sq km, of which 57.21 sq km lies within Panna Tiger Reserve. This will account for 65.50 percent of total submergence.

THE INTERLINKING OF RIVERS

The National Perspective Plan (NPP) presented the development of water resources through the inter-basin transfer and the transfer of water from water surplus basins to water-deficit basins. The interlinking of rivers is a large-scale civil engineering project that aims to effectively manage water resources in India under the NPP.

Positives of interlinking of rivers for multi-dimensional inter-related problems

Droughts: The drought-prone regions like Vidharbha face perennial droughts. The interlinking of seasonal peninsular rivers with their Himalayan counterparts may be a gamechanger for this region’s agriculture and food security prospects.

Floods: Interlinking of rivers will contribute to flood and drought hazard mitigation for India. It will most likely eradicate the flooding problems which recur in the northeast and the north every year. For example, floodwaters of the Kosi river could be diverted to other east-flowing rivers.

Improve the inland navigation:

• Interlinking of rivers will create a network of navigation channels. Water transport is cheaper, less-polluting compare to road and railways.
• Further, the interlinking of rivers can ease the pressure on railways and roads also.
• More importantly, India has the huge untapped potential of inland water transport, which can be a game-changer in the logistics aspect and, thus, overall costs of goods & services.

Negatives of interlinking of rivers for multi-dimensional inter-related problems:

• Ecological challenges: The ambitious project will divert forest areas and submergence fertile land leading to deforestation and soil- erosion. For example, the Ken-Betwa link projects have reduced 8% of the forest land of Panna National Park. Also, river diversion may bring significant changes in the physical and chemical compositions of the sediment load, river morphology, and the shape of the delta formed in the river basin.
• Social challenges: Reconstruction and rehabilitation of millions of people in and around the river catchments could face significant psychological damage, resulting in social unrest and protests in the initial stages.
• Political challenges: India’s inter-state river doesn’t have a bright history (for example, the Cauvery River dispute). Further, water being a state subject demands sustained inter-state cooperation which may be a challenge given the diversity India offers.

THE WAY FORWARD:

• The interlinking of rivers in India has both pros and cons. Implementing the project in its entirety may be a challenge in present times. Therefore, the government must opt for a decentralized method of implementation instead of a centralized one.
• Inter-linking projects should receive the nod only after appropriate EIA and environmental clearances.
• Further, we must look for alternatives for efficient water use in India. For instance, measures like efficient water use in agriculture (per drop more crop), resourceful rainwater harvesting in drought-prone areas, and so on can be looked upon to liberate India from the persistent water stress.
• Adopt Alternative measures: A case study of Jakhni village of Banda district
• A 2019 NITI Aayog report mentioned Jakhni village of Banda district in Bundelkhand, one of the most water-scarce regions of India. The area witnessed heavy out-migration in search of water and better livelihood opportunities.
• However, through rigorous water conservation efforts such as the construction of farm ponds, restoration of water bodies, collection and utilization of greywater, raising of farm bunds, and intensive plantation of trees since 2014, the water situation has improved. Jakhni village, for example, has become a self-sufficient water village.
• Once a drought-prone village, it now produces nearly 23,000 quintals of basmati rice. The production of other crops has also increased manifold.

THE CONCLUSION: In the era of climate change; river networking is the need of time for development. Successful implementation of the Ken- Betwa link project largely looms upon the timely release of water from the surplus basin to the deficit basin. The problem of providing domestic water supplies in areas away from the rivers will largely remain unsolved. Some of the project’s major criticisms are its socioeconomic viability, environmental impacts, displacement and rehabilitation of affected people, the challenge of resource mobilization, geopolitical constraints, and domestic political dynamics. There is an urgent need to take Socio-environmental concerns related to the link Project so a very detailed hydrological, geological, meteorological, and environmental analysis of the project would be imperative for the benefit of India.

THE PARLIAMENTARY PROCEEDINGS: BUDGET SESSION 2022

1. PARLIAMENT PASSES CONSTITUTION (SCHEDULED TRIBES) ORDER (AMENDMENT) BILL, 2022

THE CONTEXT: Both the houses of the Parliament has passed the Constitution (Scheduled Tribes) Order (Amendment) Bill, 2022.

THE EXPLANATION:

• The Bill seeks to amend the Constitution (Scheduled Tribes) Order, 1950, which specifies the tribes and tribal communities deemed to be Scheduled Tribes (STs) in various states and union territories.

• Inclusion of certain community in the list of STs in Tripura: The Bill seeks to amend Part XV of the Schedule to the 1950 Order, which specifies the STs in Tripura.  It includes the Darlong community as a sub-tribe of the Kuki tribe in the list of STs in Tripura.

Value Addition:

• Darlongs is a small community of around 11,000 people in Tripura.
• Despite its small population, the community has a high prevalence of education, cultural activities and members of the community are serving in different high positions in the local administration.
• Tribal musicologist and Rosem (tribal instrument) maestro Thanga Darlong was conferred the prestigious Padma Shri award a few years back for his contribution to culture.
• Darlongs, despite being Scheduled Tribes, were never given ST certificates.
• Since they were considered a generic tribe under the Kuki community, they were handed their tribal certificates as members of ‘Kuki’ community.
• The subsequent identity crisis among them, especially Darlong youths, who were equipped with modern education, culminated in the demand for a separate statutory identity of their own in 1995.

Tribes of Tripura-

• Tripura, the tiny Northeast state of 37 lakh people houses 19 tribal communities. 
• These include Tripuri or Debbarma, Reangs or Brus, Jamatia, Noatia, Uchoi, Chakma, Mog, Lushai, Kuki, Munda, Kour, Oram, Santhal, Bhil, Bhutia, Chaimar or Sermai, Garo, Khasi, Lepcha and Halam.
• Many of these communities are further divided into sub-tribes. For example, Kuki’s have nearly 17-18 sub-tribes within the community.
• It is an umbrella tribal community including many smaller clans like Khasi, Lushai, Hmars and other generic clans.
• In course of time, Lushai, Hmar, Garo etc. came out of Kuki as separate communities.
• Halam community also has several sub-tribes such as Rangkhawl, Ranglong, Dab, Chaimar or Sermai, Bong, Korbong, Harbong, Bongcher etc.
• Out of 37 lakh people of Tripura, nearly 30 per cent are tribals, who mostly live in areas under jurisdiction of the Tripura Tribal Areas Autonomous District Council (TTAADC), spread in patches across all eight districts and covering 70 per cent of the state’s geographical area.
• The state, which was ruled by tribal kings for over 500 years till 1949, when it merged into the Indian Union, saw tribals become minority in their own state due to arrival of East Pakistani refugees who fled their country.

2. RESERVATION TO OBCS

THE CONTEXT: According to the Ministry of Social Justice and Empowerment,

(i) The following States have provided 27% to OBCs: –

Assam, NCT of Delhi, Goa, Gujarat, Haryana (27% in Class III & IV posts, 10% in Class I & II posts), Odisha, Uttar Pradesh, Chandigarh, Daman & Diu.

(ii) The following States have given more than 27% reservation to OBCs:-

Andhara Pradesh (29%), Bihar (33%), Karnataka (32%), Kerala (40%),Tamil Nadu (50%),Andaman & Nicobar (38%), Puducherry (34%).

(iii) The following States have given less than 27% reservation to OBCs:-

Chhattisgarh (14%), Himachal Pradesh (12% in Category-I posts & 18% in Category-II posts), Jharkhand (14%), Madhya Pradesh (14%), Manipur (17%), Punjab (12%), Rajasthan (21%), Sikkim (21%), Uttarakhand (14%), West Bengal (17%), Dadra & Nagar Haveli (5%).

(iv) The following States have not given any reservation to OBCs:-

Arunachal Pradesh, Meghalaya, Mizoram, Nagaland, Tripura and Lakshadweep.

The reservation policy in State/UT Government services etc. is decided and implemented by the concerned Governments, while keeping in view the interests of the citizens of the State/UT. The Central Government has no role in deciding the reservation policy of State Government.

THE ECONOMIC DEVELOPMENTS

3. INVESTMENT AND EXPORT IN STEEL SECTOR

THE CONTEXT: According to the Union Ministry of Steel, the investment and export in steel sector as follows:

THE EXPLANATION:

1. Notification of the following policies having impact on investment and export in the steel sector:-

a. National Steel Policy 2017 which envisages inter-alia domestically meeting the entire demand of steel and high-grade automotive steel, electrical steel, special steel and alloys for strategic applications.

b. Domestically Manufactured Iron & Steel Products (DMI&SP) Policy for promoting procurement of Made in India steel.

c. Steel Scrap Recycling Policy to enhance the availability of domestically generated scrap for making steel at competitive prices.

d. Steel Import Monitoring System (SIMS)in order to enhance production through disseminating advance information regarding grades of the imports for enhancing investment and import substitution.

e. Production-Linked Incentive (PLI) Scheme for Specialty Steel with an outlay of Rs 6,322 Crore to promote the manufacturing of specialty steel within the country for domestic use and export by attracting Capital investments.

2. Establishment of Project Development Cell in the Ministry to attract and facilitate investment in the steel sector.

3. ‘Make in India’ initiative and the PM Gati Shakti National Master Plan, with further engagement with potential users, including from Railways, Defence, Petroleum and Natural Gas, Housing, Civil Aviation, Road Transport and Highways, Agriculture and Rural Development sectors to enhance the steel usage, overall demand for steel and investment in steel sector in the country.

4. Adjustments in basic custom duty on steel products and trade remedial measures like Anti-dumping duty (ADD), Countervailing duty (CVD) on certain raw materials and steel products to enhance competitiveness of India’s steel sector.

5. Other measures to improve Ease of Doing Business and Reducing Compliance burden, Market Access Initiatives (MAI), Startup India initiative etc. to help domestic industry in capacity creation, providing level playing field and creating a conducive business environment to attract investments and promote exports.

4. ADB PROJECTS INDIA’S ECONOMY TO GROW BY 7.5% IN FY23

THE CONTEXT: Asian Development Bank projected a 7 per cent collective growth for South Asian economies in 2022 with the subregion’s largest economy India growing by 7.5 per cent in the current fiscal year before picking up to eight per cent the next year.

THE EXPLANATION:

The Manila-based multilateral funding agency, Asian Development Bank (ADB) has projected the GDP growth rate of the Indian economy, in its flagship Asian Development Outlook (ADO) 2022, as follows:

• 2022-23 (FY23): 7.5 per cent
• 2023-24 (FY24): 8.0 per cent

ADB said developing Asia’s economies are forecast to grow 5.2% this year and 5.3% in 2023, thanks to a robust recovery in domestic demand and continued expansion in exports.

VALUE ADDITION:

Asian Development Bank (ADB)

• ADB is a regional development bank established in 1966, Headquartered at Manila, Philippines
• It has 68 members. India is a founding member. Forty-nine are from within Asia and the Pacific and 19 outside.
• It aims to promote social and economic development in Asia and the Pacific.

Voting rights:

• It is modelled closely on the World Bank and has a similar weighted voting system where votes are distributed in proportion with members’ capital subscriptions.
• As of 31 December 2020, ADB’s five largest shareholders are Japan and the United States (each with 15.6% of total shares), the People’s Republic of China (6.4%), India (6.3%), and Australia (5.8%).

Roles and functions:

• Dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
• This is carried out through investments – in the form of loans, grants and information sharing – in infrastructure, health care services, financial and public administration systems, helping nations prepare for the impact of climate change or better manage their natural resources, as well as other areas.

THE SCIENCE AND TECHNOLOGY

5. GROSS EXPENDITURE ON RESEARCH AND DEVELOPMENT (GERD)

THE CONTEXT: According the Department of Science and Technology, that the Gross Expenditure on Research and Development (GERD), in absolute terms, has been consistently increasing over the years and has increased 3 times during the last 10 years.

THE EXPLANATION:

• According the department, some of the key efforts made by Government include the successive increase in plan allocations for Scientific Departments, incentivizing investment by private sector to increase their share in GERD, improving the ease of doing  business in the Science, Technology and Innovation (STI) activities; introducing flexible tools for public procurement; creating avenues for collaborative STI funding through portfolio-based funding mechanisms such as Public-Private-Partnerships and other innovative hybrid funding mechanisms.
• It also noted that, the Government has allowed corporate sector to make R&D investments under the provision of Corporate Social Responsibility (CSR). Corporates can invest in technology business incubators or contribute in research efforts carried out by institutions and national research laboratories as a part of their CSR.
• Also the Department noted that as part of the new draft Science, Technology and Innovation (STI) policy, several provisions have been included with the focus to increase GERD. Some of the key provisions include; greater participation of central, state, local governments and public sector enterprises; fiscal incentives to attract private sector; fiscal and non-fiscal incentives to attract Foreign Direct Investment; Micro-financing through crowdfunding and philanthropic sources; linking public procurement with domestic industries; Public Private Partnerships (PPPs) and industry led mission oriented joint initiatives; etc.

Value Addition:

• According to UNESCO’s stats, the global expenditure on research and development (R&D) has crossed $1.7 trillion. The most used indicator to measure country-wise investments in R&D is the gross domestic expenditure on R&D (GERD) as the percentage of gross domestic product (GDP).
• A comparison of the R&D spending of some of the countries representing different regions of the world and India in terms of GERD as a percentage of GDP shows India to be a low spender (only 0.66 per cent of the GDP) in comparison to the developed countries and emerging economic powers of East Asia.
• Worst still, the percentage expenditure for the last couple of years is showing a downward trend. A quick analysis of the allocations to various R&D organisations in the recently presented 2022-23 budget shows continued stagnation.

THE PRELIMS PERSPECTIVE

6. EXPLAINED: WHY CENTRE HAS OPPOSED ODISHA’S PLANS FOR LANDMARK LINGARAJ TEMPLE

THE CONTEXT: The Ministry of Home Affairs has said several sections of the proposed ordinance are in conflict with the Ancient Monuments and Archaeological Sites and Remains Act.

THE EXPLANATION:

The Central government has told the Odisha government that its ordinance to bring the 11th-century Lingaraj temple in Bhubaneswar and its associated temples under a special law is outside the legislative competence of the state legislature. It also said the ordinance is in conflict with the rules laid down under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (AMASR Act).

What is the Lingaraj Temple Ordinance, 2020?

• Lingaraj temple, the largest in Bhubaneswar, was constructed by King Jajati Keshari in the 10th Century and completed by King Lalatendu Keshari in the 11th Century.
• In December 2019, the Odisha Government had announced a development plan for the temple and its peripheral area in Bhubaneshwar. The 66-acre “Ekamra Kshetra” development plan was launched to preserve the heritage and development of the nine sites and their nearby areas at a cost of around Rs 700 crore.

Why has the Centre opposed the ordinance?

The Ministry of Home Affairs has said several sections of the proposed ordinance conflicted with the Ancient Monuments and Archaeological Sites and Remains (AMASR) Act. The AMASR Act provides for preservation of ancient and historical monuments and archaeological sites and remains of national importance.

Value Addition:

Ancient Monuments and Archaeological Sites and Remains Act, 1958

• The AMASR Act provides for the preservation of ancient and historical monuments and archaeological sites and remains of national importance. It also provides for the regulation of archaeological excavations and for the protection of sculptures, carvings and other like objects.

• The Archaeological Survey of India functions under the provisions of this act. It was founded in 1861 by Alexander Cunningham- the first Director-General of ASI. Alexander Cunningham is also known as the “Father of Indian Archaeology”.

• The Act prohibits construction in a ‘prohibited area’, an area of 100 meters around a protected monument was amended in 2010 to declare the 100-metre radius of protected monuments as prohibited areas and the next 300-metre radius as regulated areas.
• It does not permit construction in such prohibited areas even if it is for public purposes, except under certain conditions. The iconic monuments in India, Taj Mahal, Ajanta Caves, The Great Stupa at Sanchi and the Sun Temple of Konark, among others are designated as “ancient monuments of national importance” and protected under the AMASR Act.
• The Archaeological Survey of India is the custodian of these monuments.

THE PRELIMS PRACTICE QUESTIONS

QUESTION OF THE DAY

Q1. Director of CBI is appointed by Central Government on the recommendation of a committee consisting of which of the following?

1. The Prime Minister as Chairperson
2. The Leader of Opposition in the Lok Sabha
3. The Chief Justice of India or Judge of the Supreme Court nominated by him
4. The union home minister

Select the correct answer using the code given below:

a) 1 and 3 only

b) 1, 2 and 3 only

c) 1, 3 and 4 only

d) All of them

ANSWER FOR 6TH APRIL 2022

Answer: C

Explanation:

• Antarctic Treaty signed in 1959 — India joined the Treaty System in 1983.
• The Antarctic Treaty came into force on June 23, 1961, after ratification by the 12 countries that were then active in Antarctic science. (Statement 1 is correct and statement 2 is incorrect).
• The Treaty covers the area south of 60°S latitude. (Statement 3 is correct).
• Its key objectives are to demilitarize Antarctica, to establish it as a zone free of nuclear tests and the disposal of radioactive waste, and to ensure that it is used for peaceful purposes only; to promote international scientific cooperation in Antarctica and to set aside disputes over territorial sovereignty. (Statement 4 is correct).
• Of the 54 signatory countries, 29 have ‘consultative’ status that give them voting rights. The Treaty parties meet each year at the Antarctic Treaty Consultative Meeting.

1. We Need Climate Action – But It Shouldn’t Be at the Expense of Social Justice READ MORE
2. The hijab case and the struggle for the right to be and remain different READ MORE

1. A moment of moral awakening READ MORE
2. Beauty, body and soul READ MORE

1. Safety first: The Dam Safety Authority might be able to monitor safety aspects of Mullaperiyar dam READ MORE
2. 10 Reasons Why Hydropower Dams Are a False Climate Solution READ MORE
3. IPCC report shows a greater need for increased climate action READ MORE

1. Explained: How electoral bonds work, and why they face criticism READ MORE
2. A candid conversation about the ‘caged parrot’ READ MORE
3. The hijab case and the struggle for the right to be and remain different READ MORE
4. Has IAS failed the nation? Not really: Critiques of the service should also recognise its immense strengths & many constraints READ MORE
5. Criminal Identification Bill: A good step, but more needs to be done READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. Rajnath Singh launches second edition of swarm drone competition for start-ups READ MORE
2. Explained: Why Centre has opposed Odisha’s plans for landmark Lingaraj Temple READ MORE
3. Sri Lankan President Gotabaya Rajapaksa revokes state of emergency declared on April 1 READ MORE
4. Union Bank launches super-app UnionNXT, digital project SMBHAV READ MORE
5. Parliament passes Constitution (Scheduled Tribes) Order (Amendment) Bill, 2022 READ MORE
6. Pahwa Plastics: The Judgement That Endangers India’s Environmental Jurisprudence READ MORE
7. ADB projects India’s economy to grow by 7.5% in FY23 READ MORE

Main Exam   

GS Paper- 1

1. Safety first: The Dam Safety Authority might be able to monitor safety aspects of Mullaperiyar dam READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Explained: How electoral bonds work, and why they face criticism READ MORE
2. A candid conversation about the ‘caged parrot’ READ MORE
3. The hijab case and the struggle for the right to be and remain different READ MORE
4. Has IAS failed the nation? Not really: Critiques of the service should also recognise its immense strengths & many constraints READ MORE
5. Criminal Identification Bill: A good step, but more needs to be done READ MORE

SOCIAL ISSUES AND SOCIAL JUSTICE

1. We Need Climate Action – But It Shouldn’t Be at the Expense of Social Justice READ MORE

INTERNATIONAL ISSUES

1. Repairing the complex India-Nepal relationship READ MORE
2. Neutrality dissonance READ MORE
3. Amid Sanctions Against Russia, BRICS Can Lead the Change Towards National Currency Payments READ MORE
4. India’s Dilemma Over West vs Russia READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. India-Australia trade pact promises significant economic, strategic gains READ MORE
2. Economic well-being key to social stability READ MORE
3. Sri Lankan economic crisis and India READ MORE
4. Export opportunity: India can become a reliable grain exporter READ MORE

ENVIRONMENT AND ECOLOGY  

1. 10 Reasons Why Hydropower Dams Are a False Climate Solution READ MORE
2. IPCC report shows a greater need for increased climate action READ MORE

SECURITY

1. Not just AFSPA, India must reboot counter-insurgency strategy & free Army from it READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

1. A moment of moral awakening READ MORE
2. Beauty, body and soul READ MORE

Questions for the MAIN exam

1. ‘India needs to be a sensitive and generous partner for the “neighbourhood first” policy to take root’. In the light of the statement discuss the need for revival of relations between India and Nepal.
2. ‘If the CBI is to tread the path of virtue, it should have a strong leader with a distinct belief in the law and ethics’. Comment on the statement in the light of recent criticism facing by CBI in its working.

QUOTATIONS AND CAPTIONS

• Every heart to love will come, but like a refugee.
• India needs to be a sensitive and generous partner for the “neighbourhood first” policy to take root.
• Reforming the criminal justice system is the task of many years. In the immediate future, however, it is at least possible to curtail the manner in which the UAPA plays havoc with the lives of so many individuals.
• If the CBI is to tread the path of virtue, it should have a strong leader with a distinct belief in the law and ethics.
• The primary task of constitutional politics is to transmute a partisan controversy into a reasoned public debate.
• Constitutional governance entails rectitude, and responsibility, in the exercise of power.
• Ukraine’s plea at the UNSC should not be interpreted for solutions. It must be a moment to recognise the human costs of war.
• Regulation needs to find its way through the ‘efficiency vs equity’ argument, encouraging gains through technology to pay, via taxes, for traditional market inefficiency.
• Any laxity on grabbing this export opportunity would mean missing the golden chance to create the much-needed export outlet for the surplus grains.
• The government must carry out a holistic review of India’s counter-insurgency strategy, transform the CRPF (if not done in the last 8 years) and relieve the armed forces for their primary mission.
• Not only does hydel power fail to prevent catastrophic climate change, but it also renders countries more vulnerable to climate change while emitting significant amounts of methane.

50-WORD TALK

• Evidence shows Russian troops killed unarmed civilians in Bucha. True to type, the Kremlin’s claimed it’s the victim of disinformation, but survivor testimony is backed up by video and satellite imaging. The world must unite to demand punishment for this war crime. India has done well to strongly condemn it.
• The need today in order to increase the happiness quotient of people in India is to follow the economic policies of Scandinavian countries marked by social security and job market flexibility. This will raise incomes and reduce social tensions that result from income disparities. The Scandinavian societies are free of sectarian tensions. There is a strong sense of social responsibility which prompts these nations to opt for taking in refugees who are victims of ethnic conflict.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

[WpProQuiz 195]

THE CONTEXT: In February 2022, Elon Musk’s Starlink lost dozens of satellites that were caught in a geomagnetic storm a day after they were launched. The loss of over 40 satellites in a single solar event has been described as “unheard of” and “huge”.However, the satellites were designed to burn up on reentry into the Earth’s atmosphere and did not create debris in space. The following article explains the phenomenon of geomagnetic storms from a geographical perspective.

GEOMAGNETIC STORMS

A geomagnetic storm is a major and temporary disturbance of Earth’s magnetosphere. They occur when a surge of the solar wind (charged particles from the sun) interacts with Earth’s magnetic field and generates currents in Earth’s upper atmosphere.

The magnetosphere shields our planet from harmful solar and cosmic particle radiation, Solar Storms occur during the release of magnetic energy associated with sunspots (‘dark’ regions on the Sun that are cooler than the surrounding photosphere – the lowest layer of the solar atmosphere) and can last for a few minutes or hours.

A Solar Storm or a Coronal Mass Ejection (CME) as astronomers call it, is an ejection of highly magnetized particles from the sun. These particles can travel several million km per hour and can take about 13 hours to five days to reach Earth.

Earth is surrounded by an immense magnetic field called the magnetosphere. Generated by powerful, dynamic forces at the center of Earth, our magnetosphere shields us from erosion of our atmosphere by the solar wind, erosion and particle radiation from coronal mass ejections, and cosmic rays from deep space. Our magnetosphere plays the role of gatekeeper, repelling this unwanted energy that’s harmful to life on Earth.

• The Bow Shockoccurs when the magnetosphere of an astrophysical object interacts with the nearby flowing ambient plasma such as the solar wind. For Earth and other magnetized planets, it is the boundary at which the speed of the stellar wind abruptly drops as a result of its approach to magnetopause.
• The Polar Cuspsare near-zero magnetic field magnitude and funnel-shaped areas between field lines that map to the dayside and nightside of the magnetopause surface. They are the primary regions for direct entry of magnetosheath/solar wind plasma into the magnetosphere and may create the appearance of beautiful auroras when seen from the arctic regions of the Earth.
• Van Allen radiation belt, doughnut-shaped zones of highly energetic charged particles trapped at high altitudes in Earth’s magnetic field. The belts are most intense over the Equator and are effectively absent above the poles. The Van Allen radiation belt is a zone of energetic charged particles originating from the solar wind. The particles are captured and held around a planet by that planet’s magnetic field. It surrounds Earth, containing a nearly impenetrable barrier that prevents the fastest, most energetic electrons from reaching Earth.

IMPACT OF GEOMAGNETIC STORMS ON EARTH

ON SPACE WEATHER: Not all solar flares reach Earth, but solar flares/storms, Solar Energetic Particles (SEPs), high-speed solar winds, and Coronal Mass Ejections (CMEs) that come close can impact space weather in near-Earth space and the upper atmosphere.

ON  MAGNETOSPHERE: Coronal Mass Ejections (CMEs) significantly loaded with matter traveling at millions of miles an hour can potentially create disturbances in the magnetosphere. Geomagnetic storms result in intense currents in the magnetosphere, changes in the radiation belts, and changes in the ionosphere, including heating the ionosphere and the thermosphere.

ON SPACE-DEPENDENT SERVICES: Solar storms can hit operations of space-dependent services like Global Positioning Systems (GPS), radio, and satellite communications. Aircraft flights, power grids, and space exploration programs are also vulnerable to geomagnetic storms.

ON COMMUNICATION: Geomagnetic storms interfere with high-frequency radio communications that rely on the ionosphere for propagation.

ON POWER GRIDS, OIL, AND GAS PIPELINES: When the earth is in the direct path of such solar storms, these magnetized and charged solar particles will interact with the earth’s magnetic field and induce strong electric currents on the earth’s surface that can damage long-distance cables.

ON UNDERSEA INTERNET CABLES: Undersea cables have a higher risk of failure compared to land cables due to their large lengths as current is proportional to the area of the loop formed by the two grounds and the cable.

HEALTH RISKS FOR ASTRONAUTS: Astronauts on spacewalks face health risks from possible exposure to solar radiation outside the Earth’s protective atmosphere.

FORMATION OF AURORAS: These storms can create the appearance of beautiful auroras aurora borealis (the northern lights) and aurora australis (the southern lights.)

LINK BETWEEN SOLAR STORMS AND ANIMAL BEACHINGS: Researchers from a cross-section of fields pooled massive data sets to see if disturbances to the magnetic field around Earth could be what confuses these sea creatures, known as cetaceans. CETACEANS are thought to use Earth’s magnetic field to navigate. Since intense solar storms can disturb the magnetic field, scientists want to determine whether they could, by extension, actually interfere with animals’ internal compasses and lead them astray. However solar storms may not be the primary cause of animal beaching but the research continues.

LINK BETWEEN SOLAR STORMS AND MIGRATORY BIRDS: Birds possess a magnetic sense and rely on the Earth’s magnetic field for orientation during migration. However, the geomagnetic field can be altered by solar activity at relatively unpredictable intervals. How birds cope with the temporal geomagnetic variations caused by solar storms during migration is still unclear.

CONCERNS WITH GEOMAGNETIC STORMS

• The Sun goes through an 11-year cycle – cycles of high and low sunspots activity. It also has a longer 100-year cycle. During the last three decades, when the internet infrastructure was booming, it was a low period. And very soon, either in this cycle or the next cycle, we are going towards the peaks of the 100-year cycle. So it is highly likely that we might see one powerful solar storm during our lifetime
• The rapid development of technology took place in the last three decades when the Sun was in its period of low activity and there are very limited studies on whether our current infrastructure can withstand a powerful solar storm.

GEOMAGNETIC STORMS AND INDIA

• The countries in the lower latitudes are at a much lower risk but there is a need for more studies to fully understand the effects of geomagnetic storms and the regions of lower latitudes.
• Modelled and Simulation Studies to understand how connectivity will be affected on a country-scale, showed that the majority of cables connecting India will be unaffected.
• Even under the high-failure scenario, some international connectivity remains (e.g., India to Singapore, the Middle East, etc.). Unlike in China, the key cities of Mumbai and Chennai do not lose connectivity even with high failures
• Compared to the US, India is less vulnerable, but we still need to know more about the strength of solar storms and whether a powerful one can affect India.

THE WAY FORWARD

• Shutdown Strategy:‘Shutdown Strategy’ can help minimize the connectivity loss during and after a solar storm impact. Similar to how we power off power grids, a temporary internet shutdown can protect our equipment during a solar event and ensure the continuation of services.
• Systematic Protocols:
• We need a more systematic protocol for doing this. Both NASA and the European Space Agency have probes now that can detect a solar storm and can give about 13 hours of warning.
• Experts from different fields need to come together to design protocols for power companies and internet service providers.
• Also, today’s health care system depends on power and the internet and we need to have a fallback strategy.
• With the increasing global dependence on satellites for almost every activity, there is a need for better space weather forecasts and more effective ways to protect satellites.

THE CONCLUSION: Current models are capable of predicting a storm’s time of arrival and its speed. But we are still not able to predict the storm’s structure or orientation. Independent solar observations show that solar superstorms capable of large-scale damage may occur only a few times in a century. Nevertheless, given their potential to cause large-scale disruption to our modern society, research and studies are needed to help us prepare and take steps for reducing their impact.

MAINS QUESTIONS:

1. What are geomagnetic storms? What steps are needed to prepare for any possible cause of a powerful solar storm in the future?
2. Explain the possible consequences of a powerful solar storm on life and property on Earth.

ADDED INFORMATION: 5 categories measure geomagnetic storms given by National Oceanic and Atmospheric Administration, USA (NOAA).

THE PARLIAMENTARY PROCEEDINGS: BUDGET SESSION 2022

1. THE DELHI MUNICIPAL CORPORATION (AMENDMENT) BILL, 2022

THE CONTEXT: The Parliament passed Delhi Municipal Corporation (Amendment) Bill 2022 which seeks to merge three municipal corporations of Delhi into a single entity. 

THE EXPLANATION:

• The Bill seeks to amend the Delhi Municipal Corporation Act, 1957 passed by Parliament.  The Act was amended in 2011 by Delhi Legislative Assembly to trifurcate the erstwhile Municipal Corporation of Delhi into: (i) North Delhi Municipal Corporation, (ii) South Delhi Municipal Corporation, and (iii) East Delhi Municipal Corporation.  The Bill seeks to unify the three corporations.

• Unification of Municipal Corporations in Delhi:  The Bill replaces the three municipal corporations under the Act with one Corporation named the Municipal Corporation of Delhi.

• Powers of the Delhi government: The Act as amended in 2011 empowers the Delhi government to decide various matters under the Act. These include: (i) total number of seats of councillors and number of seats reserved for members of the Scheduled Castes, (ii) division of the area of corporations into zones and wards, (iii) delimitation of wards, (iv) matters such as salary and allowances, and leave of absence of the Commissioner, (v) sanctioning of consolidation of loans by a corporation, and (vi) sanctioning suits for compensation against the Commissioner for loss or waste or misapplication of Municipal Fund or property.  Similarly, the Act mandates that the Commissioner will exercise his powers regarding building regulations under the general superintendence and directions of the Delhi government.  The Bill instead empowers the central government to decide these matters.

• Number of Councillors: The Act provides that the number of seats in the three corporations taken together should not be more than 272.  The 14^th Schedule to the Act specifies 272 wards across the three Corporations.  The Bill states that the total number of seats in the new Corporation should not be more than 250.

• Removal of Director of Local Bodies: The Act provides for a Director of Local Bodies to assist the Delhi government and discharge certain functions which include: (i) coordinating between Corporations, (ii) framing recruitment Rules for various posts, and (iii) coordinating the collecting and sharing of toll tax collected by the respective Corporations.  The Bill omits the provision for a Director of Local Bodies.

• Special officer to be appointed by the central government: The Bill provides that the central government may appoint a Special Officer to exercise powers of the Corporation until the first meeting of the Corporation is held after the commencement of the Bill.

• E-governance system for citizens: The Bill adds that obligatory functions of the new Corporation will include establishing an e-governance system for citizen services on anytime-anywhere basis for better, accountable, and transparent administration.

• Conditions of service for sweepers: The Act provides that a sweeper employed for doing house scavenging of a building would be required to give a reasonable cause or a 14 day notice before discontinuing his service.   The Bill seeks to omit this provision.

2. THE CHARTERED ACCOUNTANTS, THE COST AND WORKS ACCOUNTANTS AND THE COMPANY SECRETARIES (AMENDMENT) BILL, 2021

THE CONTEXT: The Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021 was passed by both the houses of the Parliament.

THE EXPLANATION:

• The Bill seeks to amend
  • The Chartered Accountants Act, 1949,
  • The Cost and Works Accountants Act, 1959, and
  • The Company Secretaries Act, 1980.
• The three Acts provide for the regulation of the professions of chartered accountants, cost accountants and company secretaries, respectively.  The Bill seeks to strengthen the disciplinary mechanism under these Acts, and provide for time bound disposal of cases against members of the Institute of Chartered Accountants of India, the Institute of Cost Accountants of India and the Institute of Company Secretaries of India.

Key features of the Bill include:

• Registration of firms: The Bill adds that firms must register with the Institutes by making an application to the respective Councils of the Institutes.  The Councils must maintain a register of firms containing details such as pendency of any actionable complaint or imposition of penalty against the firms.
• Disciplinary Directorate: Under the Acts, the respective Councils of the three Institutes must each constitute a Disciplinary Directorate, headed by Director (Discipline) who is an officer of the Institute.  The Bill adds that each Directorate must also include at least two Joint Directors.
• Under the Acts, on receiving a complaint, the Director arrives at a prima facie opinion on the alleged misconduct.  Depending on the misconduct, the Director places the matter before the Board of Discipline or the Disciplinary Committee.  The Bill amends this to empower the Directorate to independently initiate investigations against members or firms.  The Director must decide whether a complaint is actionable within 30 days of receiving such complaint.  If the complaint is actionable, the Director must submit a preliminary examination report to the Board or the Committee (as the case may be), within 30 days.  Under the Acts, a complaint may be withdrawn if permitted by the Board or Committee.  The Bill provides that a complaint filed with the Directorate will not be withdrawn under any circumstances.
• Board of Discipline: Under the three Acts, each Council constitutes a Board of Discipline.  Members of the Board include: (i) presiding officer (having experience in law and knowledge of disciplinary matters), (ii) two members and (iii) Director (Discipline) as secretary.  Under the Chartered Accountants Act, 1949, one of the two members is nominated by the central government while the other is a member of the Council.  As per the other two Acts, both the members are from the Councils or the Institutes.
• The Bill empowers the three Councils to constitute multiple Boards.  The presiding officer and one of the two members must not be a member of the institutes and will be nominated by the central government from a panel of persons provided by the Councils.  An officer of the Institute, of the rank of Deputy Secretary, will function as the Secretary of the Board.  After receiving the preliminary examination report, the Board must conclude its inquiry within 90 days.
• Disciplinary Committee: Under the three Acts, the Councils constitute Disciplinary Committees consisting of: (i) Presiding Officer (President or Vice-President of the Council), (ii) two members elected from the Council, and (ii) two members nominated by the central government.  The Bill amends the Acts to provide that the Presiding Officer must not be a member of the institutes and shall be nominated by the central government.  The Committee must conclude its inquiry in 180 days from the receipt of preliminary examination report.
• Penalties:  Under the Acts, in cases of professional or other misconduct the Committees may: (i) reprimand or remove the member from the register of the Institute, or (ii) impose a fine of up to five lakh rupees.  The Bill increases the maximum amount of fine to ten lakh rupees.  The Bill also adds that if a partner or owner of a firm is repeatedly found guilty of misconduct during last five years, the Committee may take certain actions against the firm.  The actions include: (i) prohibiting the firm from undertaking activities related to the profession of chartered account, cost accountant, or company secretary, as the case may be, for up to two years, or (ii) impose a fine of up to Rs 50 lakh.

Key Issues and Analysis

• The Bill proposes to change the composition of the two disciplinary entities to allow for more external representation.  However, these external members will be selected from a panel of persons prepared by the three Councils.  This may be against the objective of resolving conflict of interest between the disciplinary and administrative functions of the three professional Councils.
• The mandate of the proposed Coordination Committee may overlap with certain functions of the three Institutes.  Further, being chaired by the Secretary of the Ministry of Corporate Affairs, it may impinge on the independence of the three Institutes.
• The Bill provides for disclosure of pending complaints or actionable information against members and firms.  Disclosing details of pending complaints before finding guilt may tarnish their professional reputation.

• Though the President will have a non-executive role, he will be held responsible for implementation of decisions of the Councils.

 THE POLITY AND GOVERNANCE

3. MULLAPERIYAR SUPERVISORY PANEL CONTINUES FOR A YEAR WHILE AUTHORITY: CENTRE TO SUPREME COURT

THE CONTEXT: The Central Government suggested to the Supreme Court to let the Mullaperiyar dam supervisory committee continue for a year, by which time the National Dam Safety Authority under the new Dam Safety Act will become fully functional.

THE EXPLANATION:

• “According to the Government statement, during the period of one year, when the National Dam Safety Authority becomes fully functional, the Supervisory Committee on Mullaperiyar Dam may continue its functioning as per the existing mandate in regulating the operations of the Mullaperiyar dam”.
• The Centre suggested that the Chief Secretaries of Tamil Nadu and Kerala be made accountable in order to ensure that the decisions of the supervisory committee on the maintenance and safety of the dam are duly complied with by the two States.
• “To address the technical concerns of both the States, the Chief Secretaries of the States may be requested to nominate technical experts as members to participate in the meetings conducted by the supervisory committee. This would ensure accountability of the decisions/ action taken,” the Centre further recommended.

VALUE ADDITION:

ABOUT MULLAIPERIYAR DAM

• It is a masonry gravity dam on the Periyar River in the Indian state of Kerala.
• It was constructed between 1887 and 1895 and also reached an agreement to divert water eastwards to the Madras Presidency area.
• The dam created the Periyar Thekkady reservoir, from which water was diverted eastwards via a tunnel to augment the small flow of the Vaigai River.
• It originates from the Sivagiri hills of Western Ghats and flows through the Periyar National Park.
• The main tributaries of Periyar are Muthirapuzha, Mullayar, Cheruthoni, and Perinjankutti.
• According to a 999-year lease agreement made during British rule, the operational rights were handed over to Tamil Nadu.

Mullaiperiyar dam: The current dispute

The Supreme Court order came after a court-appointed supervisory committee had suggested 139.50 ft as the permissible level. The court has directed both states to go by the committee’s recommendation. Tamil Nadu had wanted the level increased to 142 ft as fixed by the Supreme Court in 2014, while Kerala wanted it within 139 ft as per a rule curve fixed until the end of the month.

Kerala’s stance: 

• The state governments of Kerala have pointed out the unfairness of the 1886 lease agreement and its validity itself. Its core issue is the safety of the Mullaperiyar Dam. Kerala wants to decommission the 100+-year-old dam and construct a new one in its place, as not doing so will endanger many lives in the process.
• The Kerala Government stated that it did not object to giving water to Tamil Nadu but pointed out that raising its level would add more pressure than the dam could take. The dams, as pointed out by Kerala, were leaking and had many structural faults.
• In addition, the Kerala government has accused Tamil Nadu of adopting an “obsolete” gate operation schedule dating back to 1939.

Tamil Nadu’s Stance:

• For Tamil Nadu, the Mullaperiyar dam and the diverted Periyar waters act as a lifeline for Theni, Madurai, Sivaganga, Dindigul and Ramnad districts, providing water for irrigation and drinking, and also for the generation of power in Lower Periyar Power Station.
• Tamil Nadu argues that building a new dam is for gaining unfair tax revenues from developing states.
• Tamil Nadu is not able to access data that is in Kerala’s terrain. There is no road built, the power supply has not been restored, although Tamil Nadu has paid for it.

THE GOVERNMENT SCHEMES IN THE NEWS

4. BUDGET FOR PRADHAN MANTRI ANNADATA AAY SANRAKSHAN ABHIYAN(PM-AASHA)

THE CONTEXT: Under PSS, Government has provided Government Guarantee amounting to Rs. 40,500/- cr. for extending cash credit facilities to Central Nodal Agencies i.e. NAFED & FCI for procurement of pulses, oilseeds & copra at Minimum Support Price (MSP). Central Nodal Agencies withdraw the required funds against the Government Guarantee for making payment of MSP value to farmers and other incidental costs involved in the PSS operations.

THE EXPLANATION:

Components of PM-AASHA

The new Umbrella Scheme includes the mechanism of ensuring remunerative prices to the farmers and is comprised of,

Price Support Scheme (PSS):

• In Price Support Scheme (PSS), physical procurement of pulses, oilseeds and Copra will be done by Central Nodal Agencies with proactive role of State governments. It is also decided that in addition to NAFED, Food Cooperation of India (FCI) will take up PSS operations in states /districts.
• The procurement expenditure and losses due to procurement will be borne by Central Government as per norms.

Price Deficiency Payment Scheme (PDPS):

• Under Price Deficiency Payment Scheme this scheme (PDPS), it is proposed to cover all oilseeds for which MSP is notified. In this direct payment of the difference between the MSP and the selling/modal price will be made to pre-registered farmers selling his produce in the notified market yard through a transparent auction process. All payments will be done directly into the registered bank account of the farmer.
• This scheme does not involve any physical procurement of crops as farmers are paid the difference between the MSP price and Sale/modal price on disposal in the notified market. The support of central government for PDPS will be given as per norms.

The pilot of the Private Procurement & Stockist Scheme (PPPS):

• Under this scheme, participation of the private sector in procurement operations will be piloted.
• States have the option to roll out the scheme on a pilot basis in selected districts/APMCs involving private stockists.

Need for PM-AASHA:

• A major issue with the MSP is its poor coverage. Further, there are certain problems with the implementation of MSP such as the procurement centres being far away resulting into heavy transportation cost, non-opening of Procurement centres timely, lack of covered storage/godowns facility for the temporary storage of produces, delays in payments, etc. Thus to address the gaps in the MSP system and give better returns to farmers, PM-AASHA is an important step.
• Increasing MSP is not adequate and it is more important that farmers should get full benefit of the announced MSP. Further, it is essential that if price of the agriculture produce market is less than MSP, then in that case State Government and Central Government should purchase either at MSP or work in a manner to provide MSP for the farmers through some other mechanism.
• A holistic approach of solving any issue is important rather than in fragments. Thus, to address issue of farmer’s income and enhancing livelihood, a compressive policy has been the need of the hour

Significance of PM-AASHA:

1. Income Security to farmers: The policy is an important step to achieve government’s commitment to double farmers’ income by 2022. If properly implemented, the scheme is expected to help revive the rural economy by assuring better income to farmers and thus address farmers’ distress
2. Stabilizing commodity markets: It will help in stabilising commodity markets and will also benefit the farmers by providing options to the state governments to compensate farmers when the market prices fall below MSP.
3. Better coverage of MSP: MSP procurement system has been very poor both in terms of geography and the crops covered. The new scheme would ensure better coverage of MSP and provision of crop-wise procurement is expected to benefit both farmers and states.
4. Reduce the need for physical procurement: The PDPS scheme under PM-AASHA will reduce the need for the government to physically procure food crops as the difference between the support and market prices can instead simply be paid in cash to the farmer.
5. Reduce storage and wastage: As the need for physical procurement will reduce, it will also reduce the consequent needs for transport and store them and then dispose of them under PDS. This would also reduce wastage of grains/crops.
6. Reduce food subsidy bill: In recent years, the government has been seeing the accumulation of large food grain stocks in its godowns over and above the buffer requirement. This entails storage and wastage costs that add on to the food subsidy bill. Thus the new policy would help in bringing down India’s food subsidy bill.

THE DATASHEET

5. THE CORPORATE DONATIONS TO POLITICAL PARTIES

VALUE ADDITION:

WHAT IS AN ELECTORAL BOND?

An electoral bond is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India. The citizen or corporate can then donate the same to any eligible political party of his/her choice. The bonds are similar to bank notes that are payable to the bearer on demand and are free of interest. An individual or party will be allowed to purchase these bonds digitally or through cheque.

How to use electoral bonds?

Using electoral bonds is quite simple. The bonds will be issued in multiples of Rs 1,000, Rs 10,000, Rs 100,000 and Rs 1 crore (the range of a bond is between Rs 1,000 to Rs 1 crore). These will be available at some branches of SBI. A donor with a KYC-compliant account can purchase the bonds and can then donate them to the party or individual of their choice. Now, the receiver can encash the bonds through the party’s verified account. The electoral bond will be valid only for fifteen days.

The 29 specified SBI branches are in cities such as New Delhi, Gandhinagar, Chandigarh, Bengaluru, Bhopal, Mumbai, Jaipur, Lucknow, Chennai, Kolkata and Guwahati.

When are the bonds available for purchase?

The electoral bonds are available for purchase for 10 days in the beginning of every quarter. The first 10 days of January, April, July and October has been specified by the government for purchase of electoral bonds. An additional period of 30 days shall be specified by the government in the year of Lok Sabha elections.

THE PRELIMS PRACTICE QUESTIONS

QUESTION OF THE DAY

Q1. Consider the following statements about Antarctic Treaty:

1. It was signed in 1959 and came into force in 1961.
2. India is the foundation member of this treaty.
3. The Treaty covers the area south of 60°S latitude.
4. Its one of the objective is to create a nuclear tests free zone.

Which of the statements given above is/are correct?

     a) 1 and 2 only

b) 2, 3 and 4 only

c) 1, 3 and 4 only

d) All of them

ANSWER FOR 5TH APRIL 2022

Answer: b)

Explanation:

• Statement 1 is incorrect: It is built by the kings of the Ganga dynasty.
• Statement 2 is correct: It is an example of Kalinga Architecture.

1. Opinion: India’s weakening democracy needs urgent electoral reforms READ MORE  
2. The Need for a Supreme Court Bench in South India READ MORE
3. Centre’s New Exam System is not Reform but Elite Capture READ MORE
4. Why the inordinate delay in SC’s hearing of FCRA and electoral bonds cases is of concern READ MORE

1. Strengthen secularism, save the republic: India, as a nation, can survive only as a secular state — where the state has no religion and does not promote any religion READ MORE  
2. Urban planning key to realising rights for persons with disabilities. Learn from Karnataka READ MORE
3. Grassroots Wisdom~I READ MORE

1. Explained: The Punjab-Haryana dispute over rivers waters and SYL Canal READ MORE
2. Climate crisis: No universal solutions READ MORE

1. Your response to situations can immortalise you READ MORE
2. The Magic Of Three READ MORE
3. Stop stereotyping differently abled READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. The Indian Antarctic Bill and its various provisions READ MORE
2. ISRO to send team to investigate objects that fell from sky in Maharashtra READ MORE
3. Bill introduced to ban financing of weapons of mass destruction READ MORE
4. Quixplained: How does India acquire forex? READ MORE
5. Explained: The Punjab-Haryana dispute over rivers waters and SYL Canal READ MORE
6. Temple-360 to offer online darshan at pilgrimage centres READ MORE
7. What is Russia’s Wagner Group of mercenaries in Ukraine? READ MORE
8. India’s Trade Deficit Rose 88% In 2021-22 READ MORE

Main Exam    

GS Paper- 1

1. Strengthen secularism, save the republic: India, as a nation, can survive only as a secular state — where the state has no religion and does not promote any religion READ MORE  
2. Urban planning key to realising rights for persons with disabilities. Learn from Karnataka READ MORE
3. Grassroots Wisdom~I READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Opinion: India’s weakening democracy needs urgent electoral reforms READ MORE  
2. The Need for a Supreme Court Bench in South India READ MORE
3. Centre’s New Exam System is not Reform but Elite Capture READ MORE
4. Why the inordinate delay in SC’s hearing of FCRA and electoral bonds cases is of concern READ MORE

SOCIAL ISSUES AND SOCIAL JUSTICE

1. We Need Climate Action – But It Shouldn’t Be at the Expense of Social Justice READ MORE

INTERNATIONAL ISSUES

1. India must focus on Nepal’s geo-economics READ MORE
2. In the middle: On the Ukraine war India must fulfil its responsibilities as a non-aligned democracy READ MORE
3. Oz is just the start: Australia FTA shows India is now confident on trade. Aim bigger, including the ambitious deal with US READ MORE
4. The BIMSTEC Charter: Much Ado About Nothing READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. MSMEs need innovative solutions as inflation kicks in READ MORE  
2. Close the policy gap: RBI has fallen behind the curve READ MORE
3. Why India needs to bring back nature-positive farming READ MORE

ENVIRONMENT AND ECOLOGY  

1. Climate crisis: No universal solutions READ MORE

TECHNOLOGY

1. The rise and rise of Facial Recognition Technology READ MORE

SECURITY

1. Afspa removal: It will restore peace, dignity READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

1. Your response to situations can immortalise you READ MORE
2. The Magic Of Three READ MORE
3. Stop stereotyping differently abled READ MORE

Questions for the MAIN exam

1. ‘Without any legal safeguards in place, the widespread deployment of facial recognition technology by the Indian State makes it a tool to gain collective control over society’. Critically analyse the statement.
2. ‘BIMSTEC is not just an alternative of SAARC for India, but it is an important platform to counter China’. In the light of the statement, discuss how can India use this platform to counter China?

QUOTATIONS AND CAPTIONS

• Be careful that victories do not carry the seed of future defeats.
• Without any legal safeguards in place, the widespread deployment of facial recognition technology by the Indian State makes it a tool to gain collective control over society.
• The pandemic showed that human interventions in natural processes can have disastrous consequences; we should now scale up natural-positive food systems that would simultaneously promote crop, soil and human health.
• Good leadership and long-term change happen when people are open to understanding each other, willing to learn from each other and mutually invested in fostering change that positively impacts the community as a whole.
• While disability rights are guaranteed by the Constitution, their realisation lies with state and municipal laws.
• The announcement of the reduction of the area under the law should be welcomed as a significant step to restore not just peace, but also dignity.
• The IPCC report says the world is not on track for achieving the mitigation goals. The response to that should be to redouble efforts and limit harm to the extent possible.
• The World Trade Organisation rules on FTAs in goods require that whenever an FTA includes one or more developed countries as members, all member countries must eliminate duties and other trade restrictions on substantially all products traded among them.
• The Constitution of India adopted that moral framework for the governance of India. Equality, justice and fraternity are as much a part of the great Buddhist tradition as of the modern European Renaissance.
• Secularism was chosen as the foundational principle of the republic to keep the nation united. Enlightened citizens should realise that if secularism is jettisoned, the hard-won national unity will be in peril.

50-WORD TALK

• India’s focus has to be on geo-economics — towards a prosperous Nepal, to help it create wealth and jobs so that one-third of its population is not on errands abroad. India has stopped looking at which government is in power in Nepal as long as there is mutual respect, mutual trust and mutual concern for each other’s national interests.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

[WpProQuiz 194]

THE CONTEXT: The Russian invasion of Ukraine, which started in February 2021, is the largest conventional military attack seen since World War II and can cause a global economic catastrophe. It has deep implications for the world economy as well as the Indian economy. This article analyses those consequences and suggests the way forward for them.

ECONOMIC IMPACTS ON THE WORLD

ENERGY AND COMMODITIES MARKETS:

• Russia is the world’s 3rd largest oil producer, the 2nd largest natural gas producer, and among the top 5 producers of steel, nickel, and aluminum. It is also the largest wheat exporter globally (almost 20% of global trade).
• On its side, Ukraine is a key producer of corn (6th largest), wheat (7th), and sunflowers (1st), and is amongst the top ten producers of sugar beet, barley, soya, and rapeseed.
• On the day the invasion began, financial markets worldwide fell sharply, and the prices of oil, natural gas, metals, and food commodities surged.
• Brent oil prices breached USD 130 per barrel following the latest developments, while Europe’s TTF gas prices surged at a record EUR 192 on 4th March.
• While high commodity prices were one of the risks already identified as potentially disruptive to the recovery, the escalation of the conflict increases the likelihood that commodity prices will remain higher for much longer. In turn, it intensifies the threat of long-lasting high inflation, thereby increasing the risks of stagflation & social unrest in both advanced & emerging countries.

AUTOMOTIVE, TRANSPORT, CHEMICALS ARE THE MOST VULNERABLE SECTORS:

• The crisis is obviously strongly impacting an already strained automotive sector due to various shortages and high commodity & raw material prices: metals, semiconductors, cobalt, lithium, and magnesium.
• Ukrainian automotive factories supply major carmakers in Western Europe: some announced the stoppage of factories in Europe while other plants around the world are already planning outages due to chip shortages.
• Airlines and maritime freight companies will also suffer from higher fuel prices, airlines being the most at risk.
• First, fuel is estimated to account for about a third of their total costs.
• Second, European countries, the US and Canada, have forbidden access to their territories to Russian airlines and in turn, Russia has banned European and Canadian aircraft from its airspace.
• This means higher costs since airlines will have to take longer routes. Eventually, airlines have little room for rising costs as they continue to face lower revenues due to the impact of the pandemic.
• Rail freight will also be impacted: European companies are forbidden to do business with Russian Railways, which will likely disrupt freight activity between Asia and Europe, transiting through Russia.
• It is expected that feedstock for petrochemicals will be more expensive, and the soaring prices of natural gas will impact the fertilizer markets, hence the whole agri-food industry.

DEEP RECESSION AHEAD FOR THE RUSSIAN ECONOMY:

• The Russian economy will be in great difficulty in 2022, falling into a deep recession. Coface’s updated GDP forecast for 2022 stands at -7.5% after the recovery experienced last year. This has led to a downgrade of the country’s risk assessment from B (fairly high) to D (very high).
• Sanctions notably target major Russian banks, the Russian central bank, the Russian sovereign debt, selected Russian public officials & oligarchs, and the export control of high-tech components to Russia. These measures put considerable downward pressure on the Russian ruble, which has already plummeted and will drive a surge in consumer price inflation.
• Russia has built up relatively strong financials: a low level of public external debt, a recurrent current account surplus, as well as substantial foreign reserves (app. USD 640 bn). However, the freeze imposed by western depositary countries on the latter prevents the Russian central bank from deploying them and reduces the effectiveness of the Russian response.
• The Russian economy could benefit from higher prices for commodities, especially for its energy exports.
• However, EU countries announced their intention to limit their imports from Russia. In the industrial sector, restricted access to Western-produced semiconductors, computers, telecommunications, automation, and information security equipment will be harmful, given the importance of these inputs in the Russian mining and manufacturing sectors.

EUROPEAN ECONOMIES ARE AT A HIGH RISK:

• Because of its dependence on Russian oil & natural gas, Europe appears to be the region most exposed to the consequences of this conflict. Replacing all Russian natural gas supply to Europe is impossible in the short to medium run and current price levels will have a significant effect on inflation.
• While Germany, Italy, and some countries in the Central and Eastern European region are more dependent on Russian natural gas, the trade interdependence of Eurozone countries suggests a general slowdown.
• On top of that, we estimate that a complete cut of Russian natural gas flows to Europe would raise the cost to 4 percentage points in 2022, which would bring annual GDP growth close to zero, more probably in negative territory – depending on demand destruction management.

NO REGION WILL BE SPARED BY IMPORTED INFLATION AND GLOBAL TRADE DISRUPTIONS:

• In the rest of the world, the economic consequences will be felt mainly through the rise in commodity prices, which will fuel already existing inflationary pressures. As always, when commodity prices soar, net importers of energy & food products will be particularly affected, with the specter of major supply disruptions in the event of an even greater escalation of the conflict. The drop in demand from Europe will also hamper global trade.
• In Asia-Pacific, the impact will be felt almost immediately through higher import prices, particularly in energy prices. Many economies in the region are net energy importers, led by China, Japan, India, South Korea, Taiwan, and Thailand.
• As North American trade and financial links with Russia and Ukraine are fairly limited, the impact of the conflict will mainly be felt through the price channel and through the slowdown of European growth.
• Despite the prospect of slower economic growth and higher inflation, the recent geopolitical events are not expected to derail monetary policy in North America at this stage.

IMPACT ON INDIA

Despite India’s limited direct exposure, the combination of supply disruptions and the ongoing terms of trade shock will likely weigh on growth, resulting in a sharper rise in inflation, and (leading to) a wider current account deficit.

India’s trade with Russia and Ukraine

• India runs a trade deficit with Russia, with exports declining while imports are increasing. Oil forms a major part of our import basket from Russia.
• According to the MoF report, 8 percent of our total imports have been imported from Russia in FY22.

Here are the ways India could suffer due to a Russia-Ukraine war even without being part of it.

BAN ON RUSSIA’S CRUDE EXPORTS:

• In reaction to the US’s ban on all oil and gas imports from Russia, Brent crude prices surged to nearly $130 per barrel in the first week of March 2022.
• This is a major setback for global economic growth as Russia is one of the largest exporters of crude oil globally. India’s trade, however, comprises only 1% of oil imports from Russia, but there could be a spillover impact in the form of high inflation and sluggish growth.
• On March 13, Morgan Stanley lowered India’s GDP forecast for the fiscal year 2023 by 50 basis points to 7.9%. After that, the UN report downgraded India’s 2022 GDP to 4.6% due to the war.
• More risks could arise if global growth conditions weaken further, which would hamper India’s export and capital expenditure cycle.

INFLATIONARY CONCERNS:

• India depends on imports to meet up to 85% of its crude oil needs. The surge in international oil prices to a 14-year high will now result in broader price pressures.
• The impact on India’s economy will be felt mostly through higher cost-push inflation weighing in on all economic agents—households, businesses, and government.
• Every 10% rise in crude oil prices leads to a 0.4 percentage point rise in consumer inflation.
• It is estimated that retail inflation at 6% for the fiscal year 2023 is much higher than the RBI’s 4.5%.
• An increase of U.S.$25/bbl. would lead to an estimated reduction in the growth of 0.7% points and an increase in inflation of nearly 1% point. If the prices of other imported commodities also increase, the inflation impact will be higher.
• This has increased the risks of a higher import bill and, in turn, a widening of India’s current account deficit (CAD).
• A study by the RBI in 2019 had estimated an increase in the current account
• deficit (CAD) following a U.S.$10/bbl. increase in global crude price, to be nearly 0.4% points of GDP. Thus, for an increase of U.S.$25/bbl. in global crude prices, the CAD may increase by 1% point of GDP.
• The RBI Professional Forecasters Survey’s median estimate of CAD at 1.9% of GDP for 2022-23 may have to be revised upwards to 2.9%.

INDIA’S DEFENCE SUPPLIES:

• Between 2016 and 2020, India accounted for nearly 25% of Russia’s total arms exports. This explains that the share of defense expenditure in India’s budget every year is not little.
• This time, a key defense contract in question is the delivery of the Russia-developed S-400 air missile system worth $5 billion, which was signed in October 2018.
• Moreover, the Indian Army’s main battle tank force is composed predominantly of Russian T-72 M1 and T-90S, accounting for 66% and 30% of all units, respectively.
• India will continue to rely on Russian weapons systems in the middle term, despite the US’s threat of sanctions over the S-400 purchase looms large over India.

OTHER AREAS:

• POST-COVID DISRUPTION: The geopolitical uncertainty coupled with the likely slowdown in the global economy and high inflation could lead to a major spike in gold prices, as central banks are left with limited legroom to raise interest rates.
• DIGITAL CURRENCIES: Day one of the conflicts also witnessed 8 percent of cryptocurrencies’ market capitalization of $1.59 trillion being wiped out.
• SEMICONDUCTORS: Russia and Ukraine are both suppliers of raw materials used in semiconductor manufacturing. Russia is the leading producer of palladium, essential for memory and sensor chips. And Ukraine is a leading exporter of highly purified neon gas that is used in etching circuit designs into silicon wafers to create chips.
• PHARMA: India exported over $181 million worth of pharmaceutical goods to Ukraine in FY21, growing nearly 44 percent over FY20, while exports to Russia were nearly $591 million in FY21, with YoY growth of 6.95 percent.
• TEA: Russia is one of the biggest importers of Indian tea, with a share of 18 percent in Indian tea exports.
• SUNFLOWER OIL: Indians, as the country depends almost totally on Ukraine and Russia for sunflower oil imports. In 2020-21, India imported 1.9 million tonnes of crude sunflower oil, of which Ukraine accounted for 1.4 million tonnes. The rest came from Russia.
• IMPACT ON PAYMENT SETTLEMENT: Due to the discontinuation of transactions through SWIFT, there would be some disruption in trade to and from Russia and Ukraine.

WHAT ARE THE CHALLENGES FOR RBI AND GOI IN RECENT TIMES?

• Policymakers may have to exercise a critical choice regarding who bears the burden of higher prices of petroleum products in India among consumers and industrial users, oil marketing companies, and the Government.
• If the oil marketing companies are not allowed to raise the prices of petroleum products, the bill for oil sector-linked subsidies would go up.
• If the central and State governments reduce excise duty and value-added tax (VAT) on petroleum products, their tax revenues would be adversely affected.
• If, on the other hand, the burden of higher prices is largely passed on to the consumers and industrial users, the already weak investment and private consumption would suffer further.
• If growth is to be revived, maximum attention should be paid to supporting consumption growth and reducing the cost of industrial inputs to improve capacity utilization.
• If RBI reduces the interest rate, it will further increase the money supply, which will lead to further higher inflation. If the RBI increases the interest rate, it will reduce the money supply in the economy but will impact the economic recovery negatively.

THE WAY FORWARD:

• As a short-term measure, the Rupee-Rouble trade agreement should be finalized as soon as possible.
• Notional policy on semiconductors should be promoted effectively so that India could become self-reliant in semiconductor and chip making.
• RBI should take more liberal steps i.e. accommodative monetary policy. As developed countries are being forced to raise their interest rates and inflationary pressures continue to mount in India and abroad, the RBI may find it advisable to raise the policy rate to stem inflationary pressures and the outward flow of the U.S. dollar even as the growth objective would be served by fiscal policy initiatives.
• For recovery, maximum attention should be paid to supporting consumption growth and reducing the cost of industrial inputs to improve capacity utilization.
• India should increase the capacity of its strategic petroleum reserve so that at the time of a war-like situation, India can manage the impact of hiked crude oil prices, in a long term manner, needs to focus on renewable energy sources.
• To address the shortage of sunflowers oil, the government should take steps to promote domestic cultivation of the oil like the government is doing for palm oil under National Mission on Edible Oils – Oil Palm (NMEO-OP).

THE CONCLUSION: World leaders should come together not for discussing the scale of sanctions but to work out ways to resolve the issue and put an end to the mayhem. Diplomatic channels should be used to have dialogue, negotiate, convince and arrive at amicable solutions to end the conflicts. The increased spate of sanctions on one country is a pain to other dependent countries and it disrupts the world order. Prolonged armed conflicts will worsen the plight of innocent countries and their people.

Economic Impacts of Russia-Ukraine War, Economic Impacts on The World, Recession Ahead for the Russian Economy, European Economies, Inflation & Global Trade Disruptions, India’s Trade with Russia and Ukraine, India’s Defence Supplies, Impact on Payment Settlement

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