Daily Prelims Notes 15 March 2022

Daily Prelims Notes

15 March 2022

Table Of Contents

1. Import Intensity of Exports
2. Mumbai Climate Action Plan
3. Rabi Crops
4. India’s Energy Mix
5. Strategic Oil Reserves
6. State Legal Service Authority
7. Inflation-Wholesale Price Index  
8. Budget For UTs
9. Food Crisis & Indexes
10. Unemployment rate
11. Rashtriya Indian Military College (RIMC)
12. ISIS

1. Import Intensity of Exports

Topic: Economy

Section: External Sector

Context: The depreciation in the value of the rupee may be good for the country’s export sectors, but there’s a vulnerable sub-category that’s adversely impacted: labour-intensive export sectors such as gems and jewellery, pharmaceuticals and electronics that are highly dependent on imports of inputs.

How does depreciation impact imports /exports?

Usually, depreciation in the domestic currency is expected to give a boost to exports, as trader’s get more local currency when they convert the export proceeds, but importers, on the other hand, need more local currency to buy the same quantity of imported inputs.

Sectors such as gems & jewellery and electronics that have a high import intensity — the value addition of imported items as a proportion of the value of items that are subsequently exported — are faced with higher input costs and lower demand as they are forced to pass on some of the increase in cost of imports. Since the beginning of the year, the rupee has depreciated by 2.6 per cent to a near all-time low of Rs 76.5 as against the US dollar

What is import intensity?

It can simply be defined as the degree of value addition of an imported item that subsequently gets exported. In the Indian context, gems and jewellery is a typical example of such export product having high import t intensity.

Another way of defining import intensity of exports is to identify those exports which are heavily dependent on imported inputs.

Why rupee depreciation doesn’t help Indian exports?

A strong currency reflects the strength of a nation and will always be good for exports, because India, at the end of the day, is a net importer of goods

Conclusion:

Experts said any benefit to exports from a weaker rupee in high value-addition sectors would also depend on the movement of currencies of nations that India competes with in such sectors. The currencies of most developing countries, including competitors such as Bangladesh, Vietnam and Indonesia have also weakened this year but to a less extent than the rupee. However, a general slowdown in the recovery of global trade due to the Russia-Ukraine conflict is a key concern among exporters.

2. Mumbai Climate Action Plan

Topic: Environment

Section: Climate change

Context- The Mumbai Climate Action Plan (MCAP) has laid down a 30-year roadmap for the city to tackle the challenges of climate change by adopting inclusive and robust mitigation and adaptation strategies.

Concept-

• The action plan has set short, medium and long term climate goals aimed towards zero emission of greenhouse gas or a net-zero target for 2050.
• It has been said that actions must be taken on priority across six strategic areas—
  • sustainable waste management,
  • urban greening and biodiversity,
  • urban flooding and water resource management,
  • energy and buildings,
  • air quality and
  • sustainable mobility.

What is the Mumbai Climate Action Plan (MCAP)?

• The Brihanmumbai Municipal Corporation (BMC) prepared the plan with technical support from the World Resources Institute (WRI), India and the C40 Cities network.
• The plan throws light on the current climate of the city called Baseline Assessment—climate and air pollution risks, greenhouse gas inventory.
• It also then assesses future trajectories in the business-as-usual scenarios and assesses future emission reduction scenarios to make Mumbai net-zero by 2050.
• It also lists down Sectoral Priorities and Plans, including ongoing initiatives in the departments, gaps, short-, and long-term action points.

Why does Mumbai need a climate action plan?

• As per a study conducted by WRI India on Mumbai’s vulnerability assessment, the city will face two major challenges—
  • temperature rise, and
  • extreme rain events which will lead to flooding.
• As per the vulnerability assessment of greenhouse gas and natural green cover, the city has witnessed a warming trend.
• The analysis has revealed a warming trend over 47 years (1973-2020) with an increase of 0.25°C per decade for the city.

What is the current greenhouse gas emission?

• In 2019, which is taken as a base year, Mumbai’s GHG emissions were 23.42 million tonnes of carbon dioxide emission, which is 1.8 tonnes CO2e per person.
• Out of which, 16.9 million tonnes or 72 per cent is from the energy sector, followed by 4.56 million tonnes of CO2 e or 20 per cent from the transportation sector.
• The city’s waste sector contributes to a total of eight per cent of the total emissions.
• Most of the city’s emissions come from energy use in residential buildings followed by commercial buildings and transport.
• Electricity consumption contributes significantly to total emissions (64.3%), due to the city’s predominantly coal-based grid.

About C40:

• The C40 group was started in 2005 by the then Mayor of London, Ken Livingstone, and got its name in 2006, since it had 40 members that year.
• It has 96 members at present, representing over one-quarter of the global economy.
• It connects the world’s largest cities to deliver urgent and essential climate action needed to secure a sustainable future for urban citizens worldwide.
• The group is committed to delivering on climate targets set under the 2016 Paris Agreement, and sets the bar for cities to develop and implement local level plans that comply with those targets.
• It has its offices in New York, USA and London, UK.

About Mumbai:

• Mumbai is on a narrow peninsula on the southwest of Salsette Island, which lies between the Arabian Sea to the west, Thane Creek to the east and Vasai Creek to the north.
• Mumbai consists of two distinct regions: Mumbai City district and Mumbai Suburban district, which form two separate revenue districts of Maharashtra.
• Mumbai lies at the mouth of the Ulhas River on the western coast of India, in the coastal region known as the Konkan.
• It sits on Salsette Island (Sashti Island), which it partially shares with the Thane district.
• Mumbai is India’s second largest city (by population) and is the financial and commercial capital of the country as it generates 6.16% of the total GDP.

3. Rabi Crops

Topic: Agriculture

Section: Cropping pattern

Context- Russian invasion of Ukraine is happening when Indian farmers seem set to harvest a bumper Rabi (winter-spring) crop.

• Their prices have all firmed up, due to the war-induced disruption of grain trade via the Black Sea and Russian banks being blocked from the international payments system.

Concept-

About Winter Crops:

• Rabi Crops are sown in winter and harvested in spring.
• The crops are grown either with rainwater that has percolated into the ground or using irrigation.
• A good rain in winter spoils the Rabi crops but is good for Kharif crops.

Kharif vs Rabi Crops:

4. India’s Energy Mix

Topic: Economy

Section: Energy

Context- While downscaling coal, India needs to look beyond solar, at hydel and nuclear power- IPCC

Concept-

• The latest report of the Intergovernmental Panel on Climate Change (IPCC) counts India among the countries more vulnerable to climate change, which underscores the need for urgent action.
• India has committed to raise its non-fossil fuel capacity to 500 GW by 2030, from 152 GW now.
• To triple its non-fossil fuel power in nine years, India has to look beyond solar.
• Wind Energy an estimated potential of 700 GW at a hub height of 120 meters.
• India has built up 40 GW of wind capacity.
• Offshore wind power is too expensive — around ₹8 a kWh — essentially due to high installation costs.
• Large hydro potential is estimated at 145 GW, is thrice as much as the existing capacity.
• Between 1971 and 1991, India built 1,592 large dams (according to the National Register of Large Dams) , averaging 80 a year;
• Nuclear power, capacity today is 6,780 MW. There seems to be little scope for adding more than the proposed 10 PHWRs of 700MW each and four more 1,000 MW plants at Kudankulam.
• Oceans, like large hydro and nuclear, can provide 24×7 base load energy.
• Coal will remain essential as a baseload power source. Carbon emissions can be controlled through carbon capture and utilisation (or sequestration) technologies.
• India needs a mix of all sources in the right measure.

5. Strategic Oil Reserves

Topic: Geography

Section: Economic Geography

Context: The 31 Member Countries of the Governing Board of the International Energy Agency agreed to release 60 million barrels of oil from their emergency reserves to send a unified and strong message to global oil markets that there will be no shortfall in supplies as a result of Russia’s invasion of Ukraine

Content

About Strategic oil reserves –

• Strategic petroleum reserves are huge stockpiles of crude oil to deal with any crude oil-related crisis like the risk of supply disruption from natural disasters, war or other calamities.
• According to the agreement on an International Energy Programme (I.E.P.), each International Energy Agency (IEA) country has an obligation to hold emergency oil stocks equivalent to at least 90 days of net oil imports.
• In case of a severe oil supply disruption, IEA members may decide to release these stocks to the market as part of a collective action.
• India’s strategic crude oil storages are currently located at Visakhapatnam (Andhra Pradesh), Mangaluru (Karnataka), and Padur (Karnataka).
• The government has also given approval for setting up of two additional facilities at Chandikhol (Odisha) and Padur (Karnataka).
• The concept of dedicated strategic reserves was first mooted in 1973 in the US, after the OPEC oil crisis.
• Underground storage is, by far the most economic method of storing petroleum products because the underground facility rules out the requirement of large swathes of land, ensures less evaporation and, since the caverns are built much below the sea level, it is easy to discharge crude into them from ships.
• The construction of the Strategic Crude Oil Storage facilities in India is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL).
  • ISPRL is a wholly owned subsidiary of Oil Industry Development Board (OIDB) under the Ministry of Petroleum & Natural Gas.
• After the new facilities get functional a total of 22 days (10+12) of oil consumption will be made available.
• With the strategic facilities Indian refiners also maintain crude oil storage (industrial stock) of 65 days.
• Thus, approximately a total of 87 days (22 by strategic reserves + 65 by Indian refiners) of oil consumption will be made available in India after completion of Phase II of the SPR programme. This will be very close to the 90 days mandate by the IEA.

6. State Legal Service Authority

Topic: Polity

Section: Judiciary

Context- The Supreme Court expressed concern over fake claims for getting ex-gratia compensation of ₹50,000, meant for the family members of those who lost lives due to Covid, saying it had never visualised that this could be misused.

Concept-

• The top court had earlier directed all States governments and Union Territories to appoint a dedicated nodal officer to coordinate with the member secretary of the State Legal Service Authority (SLSA) to facilitate payment of ex-gratia compensation to the family members of Covid victims.

State Legal Services Authority:

• It is headed by the Chief Justice of the State High Court who is its Patron-in-Chief.
• A serving or retired Judge of the High Court is nominated as its Executive Chairman.

Legal Services Institutions for providing Free Legal Aid:

• National Level : National Legal Services Authority
• State Level : State Legal Services Authority.
• District Level : District Legal Services Authority. The District Judge of the District is its ex-officio Chairman.
• Taluka/ Sub-Division Level : Taluka/ Sub-Divisional Legal Services Committee headed by a senior Civil Judge.
• Supreme Court: Supreme Court Legal Services Committee
• High Court : High Court Legal Services Committee

National Legal Services Authority:

• The National Legal Services Authority (NALSA) was constituted under the Legal Services Authorities Act, 1987 in 1995 for providing free and competent legal services to the weaker sections of the society.
• The Chief Justice of India is the Patron-in-Chief and the second senior most Judge of Supreme Court of India is the Executive Chairman of the Authority.
• Article 39 A of the Constitution provides for free legal aid to the poor and weaker sections of the society, to promote justice on the basis of equal opportunity.
• Article 14 and Article 22 (1) ensures equality before law.

7. Inflation-Wholesale Price Index

Topic: Economy

Section: Inflation and unemployment

Context:  The retail inflation hit an eight-month high to 6.7% and WPI over 13% in February.

Content:

Inflation is defined as a situation where there is sustained, unchecked increase in the general price level and a fall in the purchasing power of money. Thus, inflation is a condition of price rise.

Causes of Inflation

There can be two sets of factors that can cause inflation in an economy. They are:

• Demand Pull and Cost Push.
  • Demand Pull Factors
  • Rise in population.
  • Black money.
  • Rise in income.
  • Excessive government expenditure.
• Cost Push Factors
  • Infrastructure bottlenecks which lead to rise in production and distribution costs.
  • Rise in Minimum Support Price (MSP).
  • Rise in international prices.
  • Hoarding and black marketing.
  • Rise in indirect taxes.

Measures of Inflation-

• Consumer Price Index/Retail Inflation–

It measures price changes from the perspective of a retail buyer.

It is released by the National Statistical Office (NSO).

The CPI calculates the difference in the price of commodities and services such as food, medical care, education, electronics etc, which Indian consumers buy for use.

The CPI has several sub-groups including food and beverages, fuel and light, housing and clothing, bedding and footwear.

Four types of CPI are as follows:

• CPI for Industrial Workers (IW).
• CPI for Agricultural Labourer (AL).
• CPI for Rural Labourer (RL).
• CPI (Rural/Urban/Combined).

Of these, the first three are compiled by the Labour Bureau in the Ministry of Labour and Employment. Fourth is compiled by the National Statistical Office (NSO) in the Ministry of Statistics and Programme Implementation.

Base Year for CPI is 2012. The Monetary Policy Committee (MPC) uses CPI data to control inflation. Thus, it is also called headline inflation

• Wholesale Price Index–

It measures the changes in the prices of goods sold and traded in bulk by wholesale businesses to other businesses.

Published by the Office of Economic Adviser, Ministry of Commerce and Industry.

 It is the most widely used inflation indicator in India and measures inflation at wholesale level.

 The base year of All-India WPI has been revised from 2004-05 to 2011-12 in 2017.

The index basket of the WPI covers commodities falling under the three major groups namely Primary Articles, Fuel and Power and Manufactured products. (The index basket of the present 2011-12 series has a total of 697 items including 117 items for Primary Articles, 16 items for Fuel & Power and 564 items for Manufactured Products.)

8. Budget For UTs

Topic: Polity

Section: Parliament and Legislature

Context- The Jammu and Kashmir Budget 2022-23 of around ₹1.42 lakh crore was passed by the Lok Sabha on Monday.

Concept-

About Budget:

• Annual Financial Statement (AFS), the document as provided under Article 112, shows estimated receipts and expenditure of the Government of India.
• The receipts and disbursements are shown under the three parts, in which Government Accounts are kept viz.,
  • (i) Consolidated Fund,
  • (ii) Contingency Fund and
  • (iii) Public Account.
• Annual Financial Statement has the following heads.
  • Statement I – Consolidated Fund of India [Receipts and Expenditure: Revenue Account; Receipts and Expenditure: Capital Account]
  • Statement IA – Expenditure charged on the Consolidated Fund of India
  • Statement 2 – Contingency Fund of India
  • Statement 3 – Public Accounts of India [Receipts and Expenditure]
  • Receipts & Expenditure of Union Territories without Legislature.
• According to Department-related Parliamentary Standing Committee on Home Affairs has found, Union Territories (UTs) without legislature grossly under utilised funds allocated to them in the past financial year, and those UTs that have a legislature performed better on the development front, the
• In its 238th report tabled in Parliament on Monday, the committee headed by Congress leader Anand Sharma said the utilisation of funds was noticeably low in Andaman and Nicobar Islands (A&NI) and Ladakh.
• Ladakh has been demanding statehood or at least a legislature ever since the region was turned into a UT in 2019 after its separation from the erstwhile state of Jammu and Kashmir.
• MP from Ladakh has demanded in Parliament that the region be included in the Sixth Schedule of the Constitution.
• While recommending examination of the possibility of including Ladakh in the 5th/6th Schedule, the standing committee report said:
• The Committee recommends that special status may be granted to the UT of Ladakh considering the developmental needs of the tribal population.

9. Food Crisis & Indexes

Topic: Agriculture

Section: Report and Indices

Context- Russia-Ukraine war can spark a food crisis.

Concept-

Food Crisis facts:

• Russia and Ukraine are import-ant players in the global trade of grains and oilseeds among other agricultural commodities.
• The armed conflict between the two countries has raised concerns over food security for the Middle East and Africa.
• The crisis would spur food inflation and the poor harvest due to dry spells in South America and Indonesia and rising demand for wheat and oilseeds in China and India can worsen the situation.
• In 2020, African countries imported $4 billion worth agriculture produce from Russia.
  • Ninety per cent of imports consisted of wheat and 6 per cent sunflower oil.
• Similarly, Ukraine exported about $2.9 billion of agricultural. commodities to African countries in 2019-20 of which About 48 per cent of imports included wheat, 31 per cent maize, and the balance sunflower oil, barley, and soybeans.
• Russia accounts for about 10 per cent of global wheat production while Ukraine has a 4 per cent share.
• Russia and Ukraine contribute about a quarter of the global wheat exports.
• Russia and Ukraine are important players in corn production and had a 14 per cent share of global maize exports in 2020.
• Also, these two countries lead in sunflower oil production and have a 40 per cent share in exports.
• China is the largest producer of wheat in the world.

Indices by FAO:

• Food Price Index: The FAO Food Price Index (FFPI) is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices weighted by the average export shares of each of the groups over 2014-2016.
• FAO Vegetable Oil Price Index
• FAO Cereal Price Index
• FAO Dairy Price Index
• FAO Meat Price Index
• FAO Sugar Price Index

10. Unemployment rate

Topic: Economy

Section: Unemployment and Inflation

Latest report- Periodic Labour Force Survey (PLFS) of April-June 2021.

• 12.7 persons out of 100 in the labour force are unemployed.
• The unemployment rate among the labour force between 15 and 29 years is 25.5. In the last quarter it was 22.9 and in the corresponding quarter of 2020 it was 34.7.
• The unemployment rate among women in this age group is 31 and among men it is 24.
• The unemployment rate among all ages during the period is 12.7. The rate among women in all ages is 14.3 and men in all ages is 12.2.
• The highest urban unemployment rate for persons of all ages is in Kerala at 24.4, followed by Chhattisgarh (19.2). Gujarat has the lowest (5.5), followed by Delhi (7.9).
• The urban unemployment rate is 12.6 percent, three per cent higher than its previous quarter. During the same period, the GSDP at constant price fell over 20 per cent – denotes even a short run fall in the economic growth contributes to rise in the unemployment.
• Labour Force Participation Rate (LFPR), is 37.1. In the last quarter it was 37.5 and in the corresponding quarter of 2020, the number was 35.9.
• The Worker Population Ratio (WPR), was 32.4 and in the previous quarter it was 34.0; in the corresponding quarter of 2020 it was 28.4.

11. Rashtriya Indian Military College (RIMC)

Topic: National Organisation

Section: Important News

Context: Rashtriya Indian Military College (RIMC), Dehradun, previously the Prince of Wales Royal Indian Military College, turned 100 years young on Sunday, Rashtriya Indian Military College (RIMC), Dehradun, previously the Prince of Wales Royal Indian Military College, turned 100 years young on Sunday

Concept:

• The Rashtriya Indian Military College (RIMC), is an Inter Service Category ‘A’ establishment, administered through the Army Training Command (ARTRAC) under the aegis of the Ministry of Defence (MoD). Christened the Prince of Wales Royal Indian Military College, it was inaugurated on 13 March 1922 by His Royal Highness, Prince Edward VIII, the Prince of Wales.
• It was then located on the premises of the erstwhile Imperial Cadet Corps (also called Rajwada Camp), in Dehradun Cantonment
• The purpose of this Institution was to provide Indian Boys with suitable education and training to ensure a high pass-rate for the Indians being sent to the Royal Military College, Sandhurst, as part of the Indianisation programme of the Officer cadre of the Indian Army.
• RIMC was not, in fact, a College, but a pre-Sandhurst institution run along the lines of an English Public School. The British believed that to become an Army Officer, if an education in Britain was impossible, a Public School education in India was an absolute necessity
• The College provides Public School education to young boys in the age group of 11½ to 18 years, specially selected through an All India Competitive Examination. A dedicated feeder to the National Defence Academy (NDA) and the Naval Academy (NAVAC), the College aims to send maximum Boys to the NDA/NAVAC

12. ISIS

Topic: International Relation

Section: Important News

Context: Within days of the elimination of the first caliph of the Islamic State of Iraq and Syria (ISIS), Abu Bakr al-Baghdadi, in a US raid in Syria in October 2019, the group named Abu Ibrahim al-Hashemi al-Qurashi its new caliph

Concept:

• ISIS was founded by Abu Musab al-Zarqawi, pledged allegiance to Al-Qaeda, and participated in the Iraqi insurgency following the 2003 invasion of Iraq by a multi-national coalition led by the United States. In June 2014, the group proclaimed itself to be a worldwide caliphate, announced the establishment of a worldwide caliphate. Al-Baghdadi was named its caliph, to be known as “Caliph Ibrahim,” and the Islamic State of Iraq and the Levant was renamed the Islamic State (IS).
• The ISIS aimed to create an Islamic state called a caliphate across Iraq, Syria and beyond. The group implements Sharia Law, to establish a society that mirrors the region’s ancient past. ISIS is known for killing thousands of people and carrying out public executions, crucifixions and other acts
• ISIL had also established official “provinces” in Libya, Egypt (Sinai Peninsula), Saudi Arabia, Yemen, Algeria, Afghanistan, Pakistan, Nigeria and the North Caucasus.
• In 2021, IS African affiliates had once again seized territory and settlements in conflicts such as the Boko Haram insurgency, in Nigeria and the Insurgency in Cabo Delgado, in Mozambique. Notable take overs by IS include Mocímboa da Praia and the Sambisa Forest. Supporters there has been a surge of establishment of “New Provinces” in Indonesia.
• In 2015, the number of Indians who have joined the IS was 23, compared to 760 from the U.K. and 150 from the U.S.