Daily Prelims Notes 18 April 2022

Daily Prelims Notes

18 April 2022

Table Of Contents

1. What is Parboiled Rice, and why Centre wants to stop purchasing it?
2. Gulf of Gabes
3. India-Mauritius Relations
4. Haemophilia
5. Oil Bonds
6. Enforcement Directorate (ED)
7. Fractional Shares
8. Poverty Estimate
9. Agri GVA

1. What is Parboiled Rice and why Centre wants to stop purchasing it?

Subject: Agriculture

Section: MSP

Context- Last week, Telangana CM and members of his Cabinet staged a protest demanding a uniform paddy procurement policy. The protest came after the Centre said it was stopping the purchase of excess parboiled rice, of which Telangana is a major producer.

Concept-

What is Parboiled Rice?

• The dictionary meaning of ‘parboil’ is ‘partly cooked by boiling’.
• Thus, the expression parboiled rice refers to rice that has been partially boiled at the paddy stage, before milling.
• Parboiling of rice is not a new practice, and has been followed in India since ancient times.
• However, there is no specific definition of parboiled rice of the Food Corporation of India or the Food Ministry.

How is it prepared?

• There are several processes for parboiling rice.
• The Central Food Technological Research Institute (CFTRI), Mysuru, uses a method in which the paddy is soaked in hot water for three hours, in contrast to the more common method in which paddy is soaked for 8 hours.
• The water is then drained and the paddy steamed for 20 minutes.
• Also, the paddy is dried in the shade in the method used by the CFTRI, but is sun-dried in the common method.
• The Paddy Processing Research Centre (PPRC), Thanjavur follows a method known as the chromate soaking process.
• It uses chromate, a family of salt in which the anion contains both chromium and oxygen, which removes the odour from the wet rice.
• All processes generally involve three stages—soaking, steaming and drying. After passing through these stages, the paddy goes for milling.

Are all rice varieties suitable for parboiling?

• Generally, all varieties can be processed into parboiled rice, but it is ideal to use long slender varieties to prevent breakage during milling.
• However, aromatic varieties should not be parboiled because the process can make it can lose its aroma.

What are the benefits?

• Parboiling makes rice tougher. This reduces the chances of the rice kernel breaking during milling.
• It also increases the nutrient value of the rice.
• It has a higher resistance to insects and fungi.

Disadvantages:

• The rice becomes darker and may smell unpleasant due to prolonged soaking.
• Besides, setting up a parboiling rice milling unit requires a higher investment than a raw rice milling unit.

How much is the stock of parboiled rice in the country?

• According to the Food Ministry, the total stock of parboiled rice is 40.58 lakh metric tonnes (LMT) as on April 1, 2022.
• Out of this, the highest stock is in Telangana at 16.52 LMT, followed by Tamil Nadu (12.09 LMT) and Kerala (3 LMT).
• The stock was in the range 0.04–2.92 LMT in 10 other states —Andhra Pradesh, Chhattisgarh, Odisha, Jharkhand, West Bengal, Karnataka, Bihar, Punjab and Haryana.
• From the other 10 rice-producing states, including Telangana, the Ministry has no plan to procure parboiled rice.
• In the coming days, the total parboiled rice stock will increase to 47.76 LMT.

How high is the demand?

• The Food Ministry pegs the parboiled rice demand at 20 LMT per annum for distribution under the National Food Security Act, 2013.
• According to the Ministry, the demand for parboiled rice has come down in recent years.
• In the last few years, production in parboiled rice-consuming states such as Jharkhand, Kerala and Tamil Nadu has increased, resulting in less movement to the deficit states.
• Earlier, the Food Corporation of India (FCI) used to procure parboiled rice from states such as Telangana to supply to these states.
• But in recent years, parboiled rice production has increased in these states.
• The current stock is sufficient to meet the demand for the next two years.

2. Gulf of Gabes

Subject: Geography

Section: Mapping

Context- A tanker carrying 750 tonnes of diesel fuel from Egypt to Malta sank saturday in the Gulf Of Gabes off Tunisia Coast.

Concept-

Gulf of Gabes:

• The Gulf of Gabes also known as Lesser Syrtis contrasting with the Greater Syrtis in Libya, is a gulf on Tunisia’s east coast in the Mediterranean Sea, off North Africa.
• The gulf roughly spans the coast from Sfax to Djerba.
• At the head of the gulf is the city of Gabès (Ghannouche) where the tides have a large range of up to 2.1 m at spring tides.
• Both Gabès and Sfax are major ports on the gulf, supporting sponge and tuna fisheries, with Gabès being the economic and administrative centre.
• It is 60 miles (100 km) long and 60 miles wide and is bounded by the Qarqannah (Kerkena) Islands on the northeast and by Jarbah (Djerba) Island on the southeast.

Regional economy of the gulf:

• Except for the Strait of Gibraltar and the Gulf of Venice, it is the only part of the Mediterranean with a substantial tidal range, causing the uncovering of extensive sandbanks at low water.
• Sponge and tuna fisheries are located at the main ports of Qābis (Gabès) and Ṣafāqis (Sfax).
• Oil and natural-gas deposits have been found in the gulf, east of Ṣafāqis.

3. India-Mauritius Relations

Subject: IR

Section: Indian and the world

Context- Mauritius PM Pravind Kumar Jugnauth is in India on an eight-day visit.

• Ministry of External Affairs (MEA) said that PM Jugnauth will participate in the ceremony of the WHO-Global Centre for Traditional Medicine in Jamnagar and the Global Ayush Investment and Innovation Summit in Gandhinagar

Concept-

India- Maldives Relations:

Historical:

• Since 1820’s, Indian workers started coming to Mauritius to work on sugar
• The people who went to Mauritius from India took their language, customs, traditions, religious beliefs with them to their new abode.
• November 2, 1834, marks the day when the ship ‘Atlas’ docked in Mauritius carrying the first batch of Indian indentured labourers.
• This day is now observed in Mauritius as ‘Aapravasi Day’.
• As a tribute to Gandhiji and the Indian freedom struggle, the National Day of Mauritius is celebrated on March 12 (the date of launch of Dandi Salt March).

Political Relation

• After independence in March, 1968, the first PM and the Father of the Mauritian Nation, Seewoosagur Ramgoolam accorded centrality to India in Mauritius’ foreign policy.
• Indian PM Narendra Modi visited Mauritius in 2015, as Chief Guest at the Mauritian National Day celebrations.
• During his visit, PM Modi commissioned the Offshore Patrol Vessel Barracuda, financed by a Government of India (GoI) Line of Credit, into the Mauritian Coast Guard.
• It was during this visit that the PM Modi had outlined India’s maritime cooperation vision of SAGAR – Security and Growth for All in the Region.
• In March 2018, President of India visited Mauritius as a Chief Guest to the commemorative events marking the 50th anniversary of the independence of Mauritius.
• In February 2021, during the visit of Indian Foreign Minister to Mauritius, the two countries also signed a Comprehensive Economic Cooperation and Partnership Agreement (CECPA).
• This was India’s first such agreement with an African country.

Economic Relations:

• India is Mauritius’ largest trading partner and has been the largest exporter of goods and services to Mauritius since 2007.
• In 2020, India represented 10% share of Mauritian total imports and ranked 3rd in their main countries of import.
• The volume of exports from India to Mauritius was 1,027 million $ in 2018, 776 million $ in 2019 and 396 million $ in 2020.
• The value of Mauritian exports to India in 2019 was 24 million $ and 32 million $ in 2020. Trade balance is in favour of India.
• The signing of CECPA between India &Mauritius will further improve trade relation.
• Mauritius was the third largest source of FDI into India during the financial year 2020-21, with FDI equity inflows amounting to USD 5.63 billion.

Developmental relations:

• India and Mauritius signed a MoU in March 2015. The main focus of the pact was the development of island of Agalega, some 1,122 km north of Mauritius.
• In total, India is planning to invest funds to the tune of $ 18 million in all these developmental projects on Agalega Island.
• In January 2021, Modi and Jugnauth inaugurated the Social Housing Project, and laid the foundation stones for a Civil Service College and an 8 MW Solar PV Farm project.
• Two agreements were also exchanged:
  • Extension of US$ 190 million Line of Credit to Mauritius for the Metro Express and other infrastructure projects and
  • MoU on the Implementation of Small Development Projects

Security Relations:

• India is currently assisting Mauritius in constructing a dedicated dockyard to cater for a large number of vessels being inducted into the Mauritius Coast
• India in 2015, exported the first ever warship as an Offshore Patrol Vessel ‘CGS Barracuda’ to Mauritius.
• India handed over ten Fast Interceptor Boats to the National Coast Guard (NCG) of Mauritius under a line of credit agreement.
• In March 2022, Mauritius became the 4thmember of the Colombo Security Conclave (CSC).
  • The CSC was formed in 2011 as a trilateral maritime security grouping of India, Sri Lanka and the Maldives.
  • It aims to increase the security cooperation, covering marine safety and security, human trafficking, counter-terrorism, and cyber security.

India’s Assistance during Pandemic:

• In May 2020, India launched Mission Sagar as part of the India’s outreach initiative towards five Island nations in the Indian Ocean, which included Mauritius, amidst the ongoing COVID-19 pandemic.
• Under the mission, India provided food Items, COVID related Medicines with Medical Assistance Teams to these nations.
• Later in January 2021, India delivered the Made-in-India COVID-19 Vaccines to Mauritius under the Vaccine Maitri Initiative.
• In August 2020, Mauritius had declared a national emergency over an oil spill near its coast. India promptly provided assistance to Mauritius in dealing with the situation.

Cultural Relations:

• India’s relationship with Mauritius is an imprint of Mauritian population of 1.3 million of which 68% are of Indian descent.
• India ranks fourth in terms of Mauritian students studying in overseas tertiary education institutions.
• Mauritius was granted, at 14th Pravasi Bhartiya Divas in January 2017, a special carve-out for issuance of OCI Cards to its nationals of Indian origin.
• Under this initiative, restriction on the number of generations was waived off.
• Mauritius introduced a visa-free regime for Indian tourists in October 2004, whereby Indian tourists visiting Mauritius for a period up to 30 days do not require a visa.

4. Haemophilia

Subject: Science & tech

Section: Basic science

Context- Every year, World Haemophilia Day is observed on April 17 to increase awareness of haemophilia and other bleeding disorders, in order to ensure better diagnosis and better access to care for the millions who remain without treatment.

Concept-

• This year, the theme for World Haemophilia Day is “Access for All: Partnership. Policy. Progress. Engaging your government, integrating inherited bleeding disorders into national policy”.

What Is Haemophilia?

• Haemophilia is usually an inherited bleeding disorder in which the blood does not clot properly, which can lead to spontaneous bleeding as well as bleeding following injuries or surgery.
• Several proteins are present in the blood which can help stop bleeding. These proteins are called clotting factors.
• Haemophilia is a sex-linked recessive disease. Therefore, it shows transmission from an unaffected carrier female (heterozygous individual) to some of the male progeny. A single cut in the affected individual will result in non-stop bleeding.
• Due to the presence of defective forms of blood clotting factors, the exposed blood of affected individuals fails to coagulate.

Sex Linked Disease:

• The sex of an individual is determined by a pair of “sex chromosomes” (a chromosome is a DNA molecule that contains genetic information).
• Females are identified with an XX pair of sex chromosomes, and males with an XY pair.
• When an X chromosome from the mother pairs up with the father’s X chromosome, the offspring is XX (female); when an X chromosome from the mother pairs up with the father’s Y chromosome, the offspring in XY (male).
• Haemophilia is caused by a defect in the X chromosome. If a girl is born with one defective X chromosome, her other X chromosome can compensate for it. In such a case, she is a carrier of haemophilia but will not suffer from the condition herself. Only if both her X chromosomes are defective will she suffer from haemophilia herself.
• On the other hand, if a boy is born with a defective X chromosome, he does not have the second X chromosome to compensate for it, and will suffer from haemophilia.
• That is the reason haemophilia is more common among men.
• The possibility of a female becoming haemophilic is extremely rare because the mother of that individual has to be at least a carrier, and the father should be haemophilic.
• This is rarely possible because a haemophilic male becomes unviable in the later stage of his life. Also, a haemophilic female dies before birth.

Types Of Haemophilia

• There are several types of haemophilia.
• The two most common forms of the disease are Haemophilia A and Haemophilia B.
• Haemophilia A, also called Classic Haemophilia, is caused by a lack of or decrease in clotting factor VIII.
• Haemophilia B, also called Christmas Disease, is caused by a lack of or decrease in clotting factor IX.
• Haemophilia A is more severe than Haemophilia B.
• A person with Haemophilia A cannot synthesise a normal blood protein called antihaemophilic globulin (AHG) required for normal blood clotting. Therefore, even a very small cut may lead to continuous bleeding for a long time.
• In a person with Haemophilia B or Christmas Disease, blood protein plasma thromboplastin is absent.

What Are The Signs And Symptoms Of Haemophilia?

• The common signs and symptoms of haemophilia include bleeding of the mouth and gums, bleeding after circumcision, bleeding in the urine or stool, and bleeding after having shots, among others.

Why Is Haemophilia Also Known As ‘Royal Disease’?

• Haemophilia is also known as ‘royal disease’ because it affected the royal families of England, Germany, Russia, and Spain in the 19th and 20th centuries.
• The family pedigree of Queen Victoria, who ruled England from 1837 to 1901, shows a number of haemophilic descendants as she was believed to have been the carrier of Haemophilia B.
• The disease was carried through various royal family members for three generations after Queen Victoria, and subsequently disappeared.

Haemophilia in India:

• It is a rare disorder worldwide — one type, called Haemophilia A, occurs in about 1 in 5,000 births, while Haemophilia B is even rarer at about 1 in about 20,000 births.
• A vast number of cases, however, are believed to go unreported, particularly in India.
• According to the World Federation of Haemophilia’s Annual Global Survey 2017, released in October 2018, there were over 1.96 lakh persons living with haemophilia across the world in 2017.
• In the country-wise data, India emerges with the highest count at nearly 19,000.

5. Oil Bonds

Subject: Economy

Section: Fiscal policy

Context:

The Finance Minister has said the government cannot bring down taxes – and thus oil prices – because it has to pay for oil bonds issued by the UPA.

From 2015 to 2021, the government has fully paid off four sets of oil bonds — a total of Rs 13,500 crore. As of March 31, 2021, there was Rs 1.31 trillion in outstanding principal and Rs 37,340 crore in interest yet to be repaid on these oil bonds, she said.

Concept:

How much of fuel prices is tax?

• There are two components to the domestic retail price — the price of crude oil itself, and the taxes levied on this basic price.
• The taxes vary from one product to another. For instance, as of now, taxes account for 50% of the total retail price for a litre of petrol, and 44% for a litre of diesel.

Oil bonds:

Previously, Petrol and diesel prices were fixed by the government to cushion consumers from price shocks and if crude oil prices were high, oil refining and marketing companies would technically sell petrol and diesel at retail outlets at a loss. The government, however, compensated oil companies by issuing long-term bonds that they could redeem later. Thus, these bonds are, in essence, promissory notes of deferred payment of subsidies that the government owes to OMCs.

An oil bond is an IOU, or a promissory note issued by the government to the Oil Marketing Companies (OMCs), in lieu of cash the government would have given them so that these companies don’t charge the public the full price of fuel.

There are two components of oil bonds that need to be paid off:

• the annual interest payment, and
• the final payment at the end of the bond’s tenure.

By issuing such bonds, a government can defer the full payment by 5 or 10 or 20 years, and in the interim just pay the interest costs.

For example- An oil bond says the government will pay the oil marketing company the sum of, say, Rs 1,000 crore in 10 years. And to compensate the OMC for not having this money straight away, the government will pay it, say, 8% (or Rs 80 crore) each year until the bond matures.

Purpose:

Thus, by issuing such oil bonds, the government of the day is able to protect/ subsidise the consumers without either ruining the profitability of the OMC or running a huge budget deficit itself.

Conclusion:

Issuing bonds pushes the liability on the future generation. But to a great extent, most of the government’s borrowing is in the form of bonds. However some measures should be taken while issuing bonds:

• The fiscal deficit (which is essentially the level of government’s borrowing from the market) should be  keenly tracked
• The main wisdom while issuing bonds is for a government to employ this tool towards increasing the productive capacity of the economy.

6. Enforcement Directorate (ED)

Subject: Governance

Section: National Bodies

Context:

On May 1st, 1956, an ‘Enforcement Unit’ was formed in the Department of Economic Affairs, for handling Exchange Control Laws violations under the Foreign Exchange Regulation Act (FERA). In the year 1957, this Unit was renamed as ‘Enforcement Directorate’. The administrative control of the Directorate was transferred from the Department of Economic Affairs to the Department of Revenue in 1960.

With the onset of the process of economic liberalization, FERA, 1973, which was a regulatory law was repealed and in its place, effective 1st June, 2000, a new law – Foreign Exchange Management Act, 1999 (FEMA) came into operation. Further, in tune with the International Anti Money Laundering regime, Prevention of Money Laundering Act, 2002 (PMLA) was enacted, and entrusted for its enforcement to the Directorate, from 01.07.2005.

Presently, Directorate of Enforcement is a Multi Disciplinary Organization mandated with the task of enforcing the provisions of two special fiscal laws – Foreign Exchange Management Act, 1999 (FEMA) and Prevention of Money Laundering Act, 2002 (PMLA). 

The main functions of the Directorate:

• Investigate contraventions of the provisions of Foreign Exchange Management Act, 1999 (FEMA)
• Investigate offences of money laundering under the provisions of Prevention of Money Laundering Act, 2002(PMLA) and to take actions of attachment and confiscation of property if the same is determined to be proceeds of crime derived from a Scheduled Offence under PMLA, and to prosecute the persons involved in the offence of money laundering.

There are 156 offences under 28 statutes which are Scheduled Offences under PMLA.

• Processing cases of fugitive/s from India under Fugitive Economic Offenders Act, 2018. The objective of this Act is to provide for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian Courts and to preserve the sanctity of the rule of law in India.
• Sponsor cases of preventive detention under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) in regard to contraventions of FEMA.
• Render cooperation to foreign countries in matters relating to money laundering and restitution of assets under the provisions of PMLA and to seek cooperation in such matters.
• Adjudicate Show Cause Notices issued under the repealed Foreign Exchange Regulation Act, 1973 (FERA) up to 31.5.2002 for the alleged contraventions of the Act

7. Fractional Shares

Subject: Economy

Section: Money Market

Context:

The Company Law Committee, formed by the Ministry of Corporate Affairs, has recommended various measures, including the issuance of fractional shares, restricted stock units (RSUs) and stock appreciation rights (SARs), besides allowing companies to hold shareholders meetings in hybrid mode to boost ease of doing business and improve liquidity in the market.

Concept:

A fractional share

It refers to a portion of a share less than one. It will enable retail investors to own a part of the highly-priced share at a fraction of the cost.

For instance, instead of spending close to ₹67,459 to buy one share of MRF — the highest priced share in India — an investor can invest just ₹100 or ₹1,000 to own a part of the company share.

Restricted Stock Units

The term restricted stock unit (RSU) refers to a form of compensation issued by an employer to an employee in the form of company shares. Restricted stock units are issued to employees through a vesting plan and distribution schedule after they achieve required performance milestones or upon remaining with their employer for a particular length of time.

Unlike stock options or warrants, RSUs will always have some value based on the underlying shares.

Stock Appreciation Rights

Stock Appreciation Rights is a scheme under which the participants, being directors, officers or employees of the company, are entitled to receive cash on account of appreciation in stock prices of the company, subject to fulfillment of certain vesting conditions.

It is a deferred compensation tied to the company’s stock performance. They give employees the right to the monetary equivalent to the appreciation in the value of a specified number of shares over a fixed period.

The cash to be paid is calculated on the basis of the Intrinsic value of the SARs, being the difference between the grant price(fair market value on the date the appreciation rights were granted) and the fair market price of the shares as on the exercise date.

8. Poverty Estimate

Subject: Economy

Section: National Income

Context:

Extreme poverty in India has declined by over 12 percentage points during 2011-2019, a World Bank working paper has said.

Details:

• Extreme poverty was as low as 0.8 per cent in the pre-pandemic year of 2019, and food transfers were instrumental in ensuring that it remained at that level in the pandemic year 2020.
• Extreme poverty is measured as the number of people living on less than $1.90 per day (Rs 144.40 at Rs 76 a dollar).
• The poverty head-count rate was 10.2 percent in 2019, down from 22.5 percent in 2011
• Poverty reduction was higher in rural areas (down from 26.3 to 11.6 per cent between 2011 and 2019) than in urban areas (from 14.2 to 6.3 percent).
• Consumption inequality in India has moderated after 2011, with almost no change between 2015 and 2019 as farmers with small landholding sizes have experienced higher income growth.
• Urban poverty rose by 2 percentage points in 2016 (coinciding with demonetisation) and rural poverty rose by 10 basis points in 2019 (coinciding with a slowdown in the economy).

Poverty Estimation:

A common method used to estimate poverty in India is based on the income or consumption levels and if the income or consumption falls below a given minimum level, then the household is said to be Below the Poverty Line (BPL).

Poverty estimation in India is now carried out by NITI Aayog’s task force through the calculation of poverty line based on the data captured by the National Sample Survey Office under the Ministry of Statistics and Programme Implementation (MOSPI).

Data Collection Methods:

• Uniform Resource Period (URP): Up until 1993-94, the poverty line was based on URP data, which involved asking people about their consumption expenditure across a 30-day recall period, that is the information was based on the recall of consumption expenditure in the previous 30 days.
• Mixed Reference Period (MRP): From 1999-2000 onwards, the NSSO switched to an MRP method which measures consumption of five low-frequency items (clothing, footwear, durables, education and institutional health expenditure) over the previous year, and all other items over the previous 30 days. That is to say, for the five items, survey respondents are asked about consumption in the previous one year. For the remaining items, they are asked about consumption in the previous 30 days.

Various Committees: 

• VM Dandekar and N Rath (1971), made the first systematic assessment of poverty in India, based on National Sample Survey (NSS) data.
• Alagh Committee (1979): Task force constituted by the Planning Commission under the chairmanship of YK Alagh, constructed a poverty line for rural and urban areas on the basis of nutritional requirements and related consumption expenditure.
• Lakdawala Committee (1993): Task Force chaired by DT Lakdawala, based on the assumption that the basket of goods and services used to calculate Consumer Price Index-Industrial Workers (CPI-IW) and Consumer Price Index- Agricultural Labourers (CPI-AL) reflect the consumption patterns of the poor.
• Tendulkar Committee –Expert group constituted by the Planning Commission and, chaired by Suresh Tendulkar, was constituted to review methodology for poverty estimation.
• Rangarajan Committee –The committee was set up in the backdrop of national outrage over the Planning Commission’s suggested poverty line of ₹22 a day for rural areas.

9. Agri GVA

Subject: Economy

Section: National Income

Context:

According to NITI Aayog, India can expect another good year of agriculture growth if the monsoon is normal as predicted. This, along with high commodity prices, could bring growth in agriculture GVA to 4 per cent.

Concept:

Sectoral share of the GVA:

• Agriculture- Least impacted by pandemic related disruption, grew at 3.6% in 2020-21 and projected to grow at 3.9% in 2021-2022.
• Industry- Though contracting by 7% in 2020-21, it is projected to expand by 11.8% in 2021-22
• Service- Services account for more than half of the Indian economy and was the most impacted by the COVID19 related restriction, especially for the activities that need human contact. This sector contracted by 8.4% in 2020-21, however estimated to grow at 8.2% in 2021-22.

Share of sectors in nominal GVA (%)

Agri GVA:

• The agriculture sector has experienced buoyant growth in the past two years.
• The sector, which is the largest employer of workforce, accounted for a sizable 18.8 per cent (2021- 22) in Gross Value Added (GVA) of the country registering a growth of 3.6 per cent in 2020-21 and 3.9 per cent in 2021-22.
• Growth in allied sectors including livestock, dairying and fisheries has been the major drivers of overall growth in the sector.

Percentage Share of GVA of Agriculture & Allied Sector to Total GVA (at current prices)

The share of the sector in total GVA of the economy has a long-term trend of around 18 per cent, improving to 20.2 per cent in the year 2020-21 and 18.8 per cent in 2021-22.

Growth of Agriculture and Allied Sectors (per cent)