1. ARBITRAGE FUNDS
TAG: GS 3: ECONOMY
THE CONTEXT: Investors are back to arbitrage funds, pouring in as much as Rs 10,074 crore in July, with cumulative flows rising to Rs 23,800 crore this financial year.
EXPLANATION:
- The inflows reflect high returns and better taxation treatment these funds offer compared to debt plans.
- Over the last year, data from value research show arbitrage funds generated 6.25% returns. This is higher than 2.7-3% that big banks pay for parking money savings accounts.
What is an arbitrage fund? How does it generate returns?
- An arbitrage fund seeks to generate returns on the price differential in the cash and futures market.
- In such a scheme, the fund manager simultaneously buys a company in the cash market and sells an equivalent quantity in the futures segment as long as the futures trade at a reasonable premium.The spread between the two generates the return for the scheme.
- The fund does not take any naked exposure to any individual security or an index as each buy transaction in the cash market has a corresponding sell transaction in the futures
- While 65% of the corpus is allocated to arbitrage products the fund manager is free to choose the balance of 35% between arbitrage or debt products, depending on his view on the market.
Why is it gaining popularity with investors?
- High returns compared with savings accounts and better taxation are driving investors to arbitrage funds.
- Rich investors also prefer these funds as they are treated as equity funds for taxation, which significantly increases post tax returns.
- Investors holding for less than a year pay 15% capital gains tax, while if they sell after a year they pay only 10% long term capital gains tax for gains above Rs 1 lakh. Compared to this in a debt fund, rich investors have to pay short term capital gains tax at 30%.
What are the risks of investing in this scheme?
- Arbitrage funds rank high on safety. The scheme always has a market neutral position by buying in the cash market and simultaneously selling the same security in the futures market.
- Compared to debt funds where there could be some credit risk, there is no such risk here.
What is Futures Market?
- A futures market is an auction market in which participants buy and sell commodity and futures contracts for delivery on a specified future date.
- Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future.
- Futures market provide physical or electronic trading venues, details of standardized contracts, market and price data, clearing houses, exchange self-regulations, margin mechanisms, settlement procedures, delivery times, delivery procedures and other services to foster trading in futures contracts.
- Futures market can be organized as non-profit member-owned organizations or as for-profit organizations.
- Futures markets can be integrated under the same brand name or organization with other types of exchanges, such as stock markets, options markets, and bond markets.
2. THE BHARATIYA SAKSHYA BILL, 2023
TAG: GS 2: GOVERNANCE
THE CONTEXT: Recently, Union Home Minister introduced the Bharatiya Sakshya Bill in Lok Sabha that would repeal the current Indian Evidence Act of 1872.
EXPLANATION:
- The new Bharatiya Sakshya Bill has 167 sections. Of these, 23 sections sourced from the Evidence Act have been amended, 1 section is entirely new, and 5 sections have been removed.
Bharatiya Sakshya Bill, 2023 definition:
- As per the Bill, it aims to ‘consolidate and to provide for general rules and principles of evidence for fair trial’.
- Citing the reason for bringing this Bill, the government said that the existing Indian Evidence Act has not kept up with the technological advancements and societal changes of the past decades.
- Adding on, the government says the new Bill aims to align the laws with the contemporary needs and aspirations of the people.
Key provisions of the Bharatiya Sakshya Bill:
- The Bill makes electronic or digital records admissible as evidence, thereby they will have the same legal effect as paper documents.
- It repeals five existing provisions of the Evidence Act, modifies 23 provisions, and adds one new provision.
- Also, the Bill proposes amendments to 23 Sections and contains 170 Sections in total.
- In the Bill, the scope of expansion for secondary evidence to include copies made from the original by mechanical processes, counterparts of documents, and oral accounts of document contents has been done.
- Through the Bill, the government is aiming to introduce precise and uniform rules for dealing with evidence during the trial of cases.
Indian Evidence Act, 1872
- The Indian Evidence Act, originally passed in India by the Imperial Legislative Council in 1872, during the British Raj, contains a set of rules and allied issues governing admissibility of evidence in the Indian courts of law
- It consolidates, defines, and amends the law of evidence in India. It extends to the whole of India. It introduced a standard set of law applicable to all Indians. It has eleven chapters and 167 sections,
- The Act applies to all judicial proceedings in or before any Court in India, including Courts-martial (except those convened under the Army Act, the Naval Discipline Act, or the Indian Navy Discipline Act, 1934, or the Air Force Act).
- It does not apply to affidavits presented to any Court or officer, or proceedings before an arbitrator.
- The enactment and adoption of the Indian Evidence Act was a path-breaking judicial measure introduced in India, which changed the entire system of concepts pertaining to admissibility of evidences in the Indian courts of law.
- Until then, the rules of evidences were based on the traditional legal systems of different social groups and communities of India and were different for different people depending on caste, community, faith and social position.
- The law is mainly based upon the firm work by Sir James Fitzjames Stephen, who could be called the founding father of this comprehensive piece of legislation.
- When India gained independence on 15 August 1947, the Act continued to be in force throughout the Republic of India. After 1947, the Act continues in force in India.
- However, it was repealed in Pakistan in 1984 by the Evidence Order 1984 (also known as the “Qanun-e-Shahadat”).
This Act is divided into three parts and there are 11 chapters in total under this Act.
Part 1: Part 1 deals with relevancy of the facts. There are two chapters under this part: the first chapter is a preliminary chapter which introduces to the Evidence Act and the second chapter specifically deals with the relevancy of the facts.
Part 2: Part 2 consists of chapters from 3 to 6. Chapter 3 deals with facts which need not be proved, chapter 4 deals with oral evidence, chapter 5 deals with documentary evidence and chapter 6 deals with circumstances when documentary evidence has been given preference over the oral evidence.
Part 3: The last part, that is part 3, consists of chapter 7 to chapter 11. Chapter 7 talks about the burden of proof. Chapter 8 talks about estoppel, chapter 9 talks about witnesses, chapter 10 talks about examination of witnesses, and last chapter which is chapter 11 talks about improper admission and rejection of evidence.
3. LUNA -25: RUSSIAN LUNAR MISSION
TAG: GS 3: SCIENCE AND TECHNOLOGY
THE CONTEXT: Russia has once again shown its interest into lunar exploration with the much-anticipated launch of the Luna-25 recently. If successful, this will be the first lunar mission by Russia to touch down on the moon’s surface in 47 years since 1976.
EXPLANATION:
- The launch comes nearly a month after the Indian Space Research Organisation (ISRO) sent its own moon lander, Chandrayaan-3, which is supposed to land on August 23, 2023.
- The US, China and the erstwhile USSR are the only three countries that have managed to successfully execute a soft-landing on the moon.
What is the Luna-25 mission?
- The Luna 25 mission’s main objective is to execute a pinpoint landing near the moon’s south pole, due to its potential for revealing critical insights into the moon’s geological composition.
- The mission aims to collect geological samples which will give scientists the opportunity to study this unexplored region of the moon.
- Furthermore, scientists also hope that the mission is successful in finding water or at least its building blocks which could aid in establishing human colonies in the near future.
- The landing craft was launched in a Souyz-2 Fregat rocket from the Vostochny Cosmodrome and is expected to stay on the moon for a year.
- In the meantime, it will collect samples using its robotic arm, collect data from its spectrometers, use the imaging systems to take pictures and beam all the information back to Earth.
Why is this mission important for Russia?
- Russia’s Luna-25 mission is also called as Luna-Glob-Lander which is seen as a bid to reclaim some of its prestige back as one of the leaders in space exploration.
- The last successful lunar mission was the Luna-24 probe launched by the Soviet space programme in 1976. This mission returned with geographical samples which showed the presence of water on the moon.
- Since the dissolution of the Soviet Union, Russia has tried to launch two landing missions to Mars–Mars-96 in 1996 and the Phobos Grunt in 2011. Both missions ended with the spacecrafts crash-landing into the Pacific Ocean.
- Russia’s space programme has been hampered due to the multiple sanctions imposed on the country since 2014 and the latest sanctions imposed in 2022 due to the ongoing conflict in Ukraine.
- The restriction of access to equipment and expertise from western countries have impeded on the success of the Russian space programme.
Luna-25 mission and Chandrayaan-3:
- According to Russia’s space agency, Roscosmos, the landing of Luna-25 will not have any impact on Chandrayaan-3 as the landing region of the spacecrafts is different and “there is enough space on the moon for everyone.”
- Moreover, the Luna-25 landing craft is stationary while Chandrayaan-3 comes with a landing craft and a rover.
- Also, the Chandrayaan-3 mission is supposed to last for two weeks though both missions have similar objectives–find traces of water on Earth’s only natural satellite while collecting scientific data.
4. VISHWAKARMA SCHEME
TAG: GS 2: SOCIAL JUSTICE
THE CONTEXT: Prime Minister announced Vishwakarma scheme, which will allocate between 13,000 and 15,000 crores for people with traditional skills.
EXPLANATION:
- On the occasion of India’s 77th Independence Day, the Prime Minister addressed the nation from the Red Fort’s ramparts and unveiled several programmes for the urban poor, women’s self-help groups, and skilled professionals.
- The Vishwakarma scheme, which is for skilled workers like barbers, goldsmiths, washing men, etc., is one of the programmes.
- On the occasion of Vishwakarma Jayanti (on 17th September), the programme will be unveiled.
Vishwakarma Scheme
- Prime Minister Vishwakarma Kaushal Samman (PM-VIKAS) scheme has been announced for traditional artisans and craftsmen in the budget 2023-24.
- The components of the scheme will include access to
- Financial support
- Access to advanced skill training to increase the calibre.
- Knowledge of modern digital techniques and efficient green technologies
- Brand promotion
- Linkage with local and global markets
- Digital payments
- Social security
- The Vishwakarma Scheme strives to raise the quality, scope, scale, and accessibility of the goods and services provided by artisans and craftspeople.
- It seeks to incorporate them into both the national and international value chains.
- These workers will become more economically empowered, particularly those from Scheduled Castes, Scheduled Tribes, Other Backward Communities, women etc.
5. BIRD SURVEY AT CORBETT TIGER RESERVE
TAG: GS 3: ECOLOGY AND ENVIRONMENT
THE CONTEXT: Recently, a bird survey was conducted in Corbett Reserve in Nainital, Uttarakhand.
EXPLANATION:
- The Corbett Tiger Reserve in Nainital conducted a bird study that resulted in a count of about 275 bird species.
- A 62-member team consisting of ornithologists, conservationists, volunteers from World Wide Fund (WWF) India, Tiger Conservation Foundation, and Village Volunteer Protection Force conducted the survey between June 20 and June 23.
- It covered overall 540 km of 135 forest trails provided insights into the diverse bird species inhabiting at Corbett Tiger Reserve.
HIGHLIGHTS OF THE REPORT
- The report is compiled by Oriental Trials, an NGO working for conservation of wildlife.
- The data included both non-resident species that seek shelter during their hard treks and resident species, who call the reserve their year-round home.
- The survey documented two species that are on the International Union for Conservation of Nature (IUCN) list of critically endangered.
- Red-headed vulture
- White-rumped vulture
- It covered the vast range of landscape in the reserve, including grassland, dense forest, rivers, and hilly terrains.
- The researchers included two endangered species in their survey:
- Egyptian vulture
- Pallas’s fish-eagle.
- The scientific names of Pallas’s fish-eagle and Egyptian vulture are halieetus leucoryphus and neophron percnopterus respectively.
- Four threatened bird species were also counted in the survey:
- Great hornbill
- Great slaty woodpecker
- Grey-crowned prinia
- River tern.
- The reserve is home to about 10 near-threatened bird species:
- Alexandrine parakeet
- River lapwing
- Red-breasted parakeet
- Oriental darter
- Lesser fish-eagle
- Himalayan griffon
- Great thick-knee
- Gray-headed fish-eagle
- Black-necked stork
- Asian woolley-necked stork.
- The IUCN classifies around 256 of the species found in the survey as being of least concern.
Corbett Tiger Reserve
- Corbett tiger reserve is located in Ramnager in Nainital district.
- The distinctive features of the park are:
- It has sub-Himalayan belts.
- It is the best eco-tourism destination.
- It has 488 different species of plants.
- Rich fauna
- The climate is sub-tropical.
- It has Dhikala, Bijrani, Jhirna, Durgadevi and Sitavani zones.
- Ramganga, Sonanadi, Mandal, Palain and Kosi are the major rivers are the most significant hydrological resource flowing through the Corbett.
- It shelters lots of endangered species includes 50 mammal species, 549 bird species, and 26 reptile species.
- Corbett Tiger Reserve which covers 1288.31 sq. kms spreading over three districts of Uttarakhand viz., Pauri, Nainital and Almora comprising of Sonanadi wildlife sanctuary & reserve forest area, Corbett National Park of 521sq km forms.
