Daily Prelims Notes 21 December 2023

  • December 21, 2023
  • Posted by: OptimizeIAS Team
  • Category: DPN
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Daily Prelims Notes

21 December 2023

Table Of Contents

  1. What causes inflation in India: Demand or supply issues?
  2. India’s defence budgeting and the point of deterrence
  3. Lok Sabha passes Telecom Bill 2023 to replace 138­ year­ old Telegraph Act
  4. Outcomes of the COP-28 climate summit
  5. COVID vaccines pillar COVAX to wind down by year-end left with billions unspent
  6. Why the UK banned Air France, Lufthansa, and Etihad ads over ‘greenwashing’ claims
  7. CDSCO to ban common cold and flu syrups for children below 4 yrs; Pharma cos asked to insert warning
  8. Ethanol blending policy
  9. Bihar to develop Sita birthplace
  10. House nod to raise age limit for GST appellate tribunal
  11. Elimination of child labour a distant goal
  12. India’s AI Mission
  13. Overview of Trust Funds at the World Bank

 

 

1. What causes inflation in India: Demand or supply issues?

Subject :Economy

Section: Inflation and Unemployment

Context:

  • Typically, inflation in India is primarily influenced by factors related to supply but there are times when demand factors also play a significant role, according to an article published by the Reserve Bank of India as a part of their December bulletin.

What is Inflation?

  • Inflation, as defined by the International Monetary Fund, is the rate of increase in prices over a given period, encompassing a broad measure of overall price increases or for specific goods and services.
  • It reflects the rising cost of living and indicates how much more expensive a set of goods and/or services has become over a specified period, usually a year.

What are the Different Causes of Inflation?

  • Demand-Pull Inflation:
    • Demand Pull inflation occurs when the demand for goods and services exceeds their supply. When the overall demand in the economy is high, consumers are willing to pay more for the available goods and services, leading to a general rise in prices.
    • A booming economy with high consumer spending can create excess demand, putting upward pressure on prices.
  • Cost-Push Inflation:
    • Cost-push inflation is driven by an increase in the production costs for goods and services. This can be caused by factors such as increased incomes, increased costs of raw materials, or disruptions in the supply chain.
    • For instance, (as per CPI data) inflation in ‘oils and fats’ in March, 2022 soared to 18.79% as the geopolitical crisis due to the Russia-Ukraine war pushed edible oil prices higher.
  • Built-In or Wage-Price Inflation:
    • This type of inflation is often described as a feedback loop between wages and prices. When workers demand higher wages, businesses may raise prices to cover the increased labor costs. This, in turn, prompts workers to seek higher wages, and the cycle continues.
    • Collective bargaining by labor unions can result in higher wages, leading to increased production costs and subsequently higher prices for goods and services.
  • Monetary Inflation:
    • Monetary inflation is often linked to an increase in the money supply in an economy. When there is more money in circulation, consumers have more purchasing power, which can drive up demand and prices.
    • Central banks printing more money or implementing policies that increase the money supply can contribute to monetary inflation.
  • Supply Shocks:
    • Supply shocks occur when there is a sudden and unexpected disruption to the supply of goods and services. Natural disasters, geopolitical events, or other unforeseen circumstances can lead to a reduction in supply, causing prices to rise.
    • A drought affecting agricultural output can lead to a decrease in the supply of crops, causing food prices to spike.
  • Built-In Expectations:
    • If people expect prices to rise in the future, they may adjust their behavior accordingly. This can create a self-fulfilling prophecy where businesses raise prices in anticipation of higher costs, and consumers, expecting further increases, may buy more now, contributing to inflation.
    • If individuals believe that inflation will increase in the future, they may demand higher wages and businesses may raise prices in anticipation of increased costs.

What are the Impacts of Rising Inflation?

  • Inflation erodes the purchasing power of money, meaning that with the same amount of money, individuals can buy fewer goods and services.
  • Central banks often respond to inflation by raising interest rates. Higher interest rates can increase the cost of borrowing for businesses and individuals, potentially slowing down investment and economic growth.
  • High or unpredictable inflation can create uncertainty in the economy. Businesses may find it challenging to plan for the future when prices are constantly changing.
  • Persistent and high inflation can have social and political consequences. It may lead to public dissatisfaction, protests, and demands for wage increases.

Types of inflation include:

Deflation: Deflation is the opposite of inflation and refers to a sustained decrease in the general price level of goods and services. It occurs when the supply of goods exceeds demand, leading to reduced prices. Deflation can discourage spending, as consumers may delay purchases in anticipation of lower prices, which can further slowdown economic growth and potentially lead to recession.

Hyperinflation: Hyperinflation is an extremely high and typically accelerating inflation. It occurs when the price levels rise rapidly, eroding the value of the currency. This phenomenon often results from a collapse in the currency and is detrimental to the economy, leading to a loss of confidence in the currency and undermining economic stability.

Stagflation: Stagflation is a situation characterized by a combination of stagnant economic growth, high unemployment, and high inflation. It presents a challenge for policymakers, as traditional measures to stimulate economic growth, such as increasing the money supply, may exacerbate inflation.

Reflation: Reflation is an attempt to stimulate an economy that is experiencing deflation. It involves the implementation of monetary or fiscal policies to increase the money supply and boost aggregate demand, with the aim of reversing deflation and stabilizing prices.

Key Points from RBI’s December 2023 Bulletin: State of the Economy

  1. Global Economic Outlook:
    • Inflation Impact: A slowing rate of global inflation may contribute to a reduction in global interest rates in the future.
  2. Interest Rate Reductions:
    • Potential Scenario: Disinflation in different geographies may pave the way for interest rate reductions globally.
    • Expectations:Central bank officials anticipate a possibility of reduced global interest rates in response to economic conditions.
  3. Indian Economic Scenario:
    • Economic Activity: India is experiencing a broad-based strengthening of economic activity.
    • Factors Supporting Growth:Easing input costs and corporate profitability are expected to sustain economic activity in India.
  4. CPI Inflation in India:
    • Recent Trends: Consumer Price Index (CPI) inflation in India rose to 5.6% in November.
    • Projection: Officials anticipate CPI inflation to ease to an average of 4.6% in the first three quarters of 2024-25.
  5. Domestic Financial Markets:
    • Market Performance:Domestic financial markets have been positively influenced by the enduring strength of the real economy.
  6. Indian Economic Growth in 2023:
    • Optimistic Outlook: Despite significant global challenges, the Indian economy remained the fastest-growing major economy in 2023.
    • Consumer Confidence: Cautious optimism prevails as consumer confidence remains positive, and perceptions about current income improved.
  7. Supply Chain Pressures and GDP Growth:
    • GDP Growth Forecast: The Reserve Bank of India’s Economic Activity Index forecasts GDP growth for Q3 2023-24 at 6.7%.
  8. Outlook for H2 2023-24 and 2024-25:
    • Sustained Growth: Despite some moderation, growth is expected to be sustained in the second half of 2023-24 and in 2024-25.
    • Positive Indicators: Positive consumer confidence and favorable perceptions about current income contribute to the outlook.

2. India’s defence budgeting and the point of deterrence

Subject :Science and Tech

Section: Defence

Context:

To have India’s defence Budget and national security goals examined through the prism of electoral imperatives would be unprofessional.

Introduction

  • With India in election mode and sops being showered on the electorate (even more certain before the general election in 2024), the allocation for defence in Budget 2024-25, which starts getting planned now, could take a hit. This could impact India’s deterrence posture, which defence preparedness is all about.

Procurements

  • The Medium Multi-Role Combat Aircraft (MMRCA) programme of the Indian Air Force (IAF) earned the sobriquet of being the ‘mother of all procurements’ due its cost, pegged at around $10 billion in 2007.
  • A decade later, the purchase of 36 Rafale jets was of limited value because the requirement was for 126 aircraft. Consequently, many IAF chiefs have spoken of the depleting squadron strength in the IAF, which is now an abysmal 32.
  • It would take another 10 years before it reaches 35 squadrons, as stated by the current IAF chief.

Need for judicious assessment

  • The question is whether ‘affordable defence’ — due to the perennial guns versus butter dilemma — will be the driving factor. Or will ‘affordable effectiveness’ drive the defence Budget allocation?
  • This is best illustrated by the IAF going in for 97 more Tejas Mk1A fighters to overcome the deficit in squadron strength, though this was to be achieved by the 114 multi role fighter aircraft project that the IAF has been pushing for.
  • The threat on the northern borders is a live one, and it would be unprofessional to dismiss our western neighbour’s present benign stance as indicative of a lessening of risk.
  • India needs to be prepared for both. The imperativeness of a judicious assessment of how India plans to prosecute the next war could not be more pressing in these days of electoral one-upmanship.
  • Enough has been written on the inescapable necessity of accretion in sea power to deter China in the environs of the Malacca Strait and further east, as also in the Indian Ocean. The Army needs to modernise too and, considering its size, the Budget requirement would be considerable.
  • The planning and budgeting in the Indian military before the Russia-Ukraine war was for a short sharp conflict. The logistics design was to stock up on 10i (10 days intense) war, and build up to a 40i scenario.
  • The refrain has changed, with the leadership of the armed forces now visualising an extended war scenario, as seen in Ukraine.

The indigenous drive: R&D

  • It needs no reiteration that the armed forces should be technologically modern at any given time. However, developing a local defence industry takes decades, necessitating a smart balance to be maintained between imports and indigenous accretions to ensure the required potency.
  • The Atmanirbhar Bharat public relations drive notwithstanding, a hard clinical view is required on the realities of the armament supply chain that would be in place in the near to mid-term.
  • India’s defence Budget, in real terms, has been more or less stagnant. Defence expenditure (revenue and capital), as a percentage of central government expenditure, has been declining — from around 16.4% in 2012-13 to 13.3% in 2022-23.
  • The Ministry of Defence had asked for ₹1,76,346 crore in 2023–24 for capital acquisitions but only ₹1,62,600 crore was allotted, creating a deficit of ₹13,746 crore.
  • In the sphere of research and development, the picture is not rosy either. The Global Innovation Index 2022 pegs India’s research and development expenditure at just 0.7% of its GDP which places it 53rd globally.
  • The government’s emphasis on indigenisation through the Innovations For Defence Excellence (iDEX) scheme and service-specific projects such as the Baba Mehar Singh competition for unmanned aerial vehicles by the IAF, and similar ones in the other two services, are laudable.
  • Similarly, the restructuring of the Ordnance Factory Board and promulgation of negative lists for imports instil confidence in the private sector for assured contracts.
  • While all these are welcome, and the increase in defence exports heartening, it must be accepted that this drive still has a long gestation period.
  • The momentum should be sustained with a continuum in policy making and adequate defence budgeting by making them election-proof in our boisterous democracy — bipartisan statesmanship would be key in this endeavour.

3. Lok Sabha passes Telecom Bill 2023 to replace 138­ year­ old Telegraph Act

Subject :Polity

Section: Legislation in news

Context:

  • The Telecommunications Bill, 2023 was introduced in the Lok Sabha by the Union minister for Communications, Electronics & Information Technology recently.

About the Telecommunications Bill, 2023:

  • The Telecommunications Bill, 2023 amends and consolidates the laws relating to:
    • development, expansion and operation of telecommunication services and telecommunication networks;
    • assignment of spectrum; and for matters connected therewith.
    • The new Bill seeks to replace the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950.

Highlights of the Bill:

  • National Security:
    • The Bill allows the government to take over telecom services and intercept messages in the interests of national security and in case of emergencies.
  • The Bill says that on the occurrence of any public emergency, including disaster management, or in the interest of public safety, the Central Government or a State Government can:
    • take temporary possession of any telecommunication service or telecommunication network from an authorised entity; or
    • provide for appropriate mechanism to ensure that messages of a user or group of users authorised for response and recovery during public emergency are routed on priority.
    • Under the new Bill, the government can also ask telecommunication services to transmit specific messages.

Simplification of licensing:

  • The Bill seeks to simplify the current licensing regime for telecom networks by moving towards an authorisation system.
  • Currently, the telecom department issues more than 100 types of licences, registrations, and permissions.
  • The Bill seeks to club many of those in a single authorisation process.

Voluntary disclosure:

  • A voluntary undertaking mechanism to facilitate voluntary disclosure of inadvertent lapses and to facilitate compliance has been introduced.
  • A tiered structure for settling disputes arising out of breach of terms and conditions involving an adjudicating officer, designated committee of appeals and the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on top.

Biometric authentication:

  • Entities have been mandated to carry out biometric authentication of their users as a measure to curb fraud.
  • The provision has raised concerns about the privacy of users.

Powers of government:

  • The Bill empowers the central and state governments or a specially authorised officer to seek interception, disclosure, and suspension powers in case of a public emergency or interest or safety.
  • Press messages, meant for publication in India and of correspondents accredited to state or central governments, have been exempted from interception, although they can be intercepted for national security reasons.

Authorisation for telecom-related activities:  

  • Prior authorisation from the central government will be required to:
  • provide telecommunication services,
  • establish, operate, maintain, or expand telecommunications networks, or
  • possess radio equipment.
  • Existing licences will continue to be valid for the period of their grant, or for five years, where the period is not specified.

Assignment of spectrum: 

  • Spectrum will be assigned by auction, except for specified uses, where it will be allocated on an administrative basis.  These include purposes such as:
  • national security and defence,
  • disaster management,
  • weather forecasting, (iv) transport,
  • satellite services such as DTH and satellite telephony, and
  • BSNL, MTNL, and public broadcasting services.
  • The central government may re-purpose or re-assign any frequency range.
  •  The central government may permit sharing, trading, leasing, and surrender of spectrum.

Powers to specify standards:  

  • The central government may prescribe standards and assessments for telecom equipment, infrastructure, networks, and services.

Right of way:  

  • Facility providers may seek a right of way over public or private property to establish telecom infrastructure.
  • Right of way must be provided on a non-discriminatory and non-exclusive basis to the extent possible.

Protection of users: 

  • The central government may provide for measures to protect users which include:
    • prior consent to receive specified messages such as advertising messages,
    •  creation of Do Not Disturb registers, and
    • a mechanism to allow users to report malware or specified messages.
  • Entities providing telecom services must establish an online mechanism for registration and redressal of grievances.

Digital Bharat Nidhi: 

  • The Universal Service Obligation Fund has been established under the 1885 Act to provide for telecom services in underserved areas.
  • The Bill retains this provision, renames the fund as Digital Bharat Nidhi, and also allows its use for research and development.

Adjudication process: 

  • The central government will appoint an adjudicating officer to conduct inquiries and pass orders against civil offences under the Bill.
  • The officer must be of the rank of joint secretary and above.
  • Orders of the adjudicating officer may be appealed before the Designated Appeals Committee within 30 days.
  • Appeals against the orders of the Committee, in connection to breach of terms and conditions, may be filed with The Telecommunications Dispute Settlement and Appellate Tribunal within 30 days.

Issues:

  • As per the new Bill, telecom services and networks will need authorisation from the government, unless it decides to exempt certain entities in public interest.
  • There are concerns that the current definition of telecommunication could be interpreted in a way to potentially open the door for the telecom department to regulate online platforms.
  • The Allocation of Business Rules could stand in the way of that since the telecom department’s remit is limited to regulating the ‘carrier’ layer, that is telecom services, under those rules.

4. Outcomes of the COP-28 climate summit

Subject: Environment

Section: Climate change

Context:

  • The 28th Conference of Parties (COP) to the UNFCCC happened in Dubai, UAE this year.

Loss and Damage Fund:

  • The agreement was reached at COP-27 to create a ‘Loss and Damage’ (L&D) fund and the fund was operationalised at COP-28.
  • World Bank was designated to oversee and administer the fund.
  • Only a meagre $790 million has been pledged so far, by a few nations, despite the corpus requiring $100 billion to more than $400 billion a year.

Global stocktake:

  • The COP28 summit saw the first global stocktake (GST).
  • According to the UNFCCC, the GST enables countries and other stakeholders to see where they are collectively making progress towards meeting the goals of the Paris Agreement — and where they are not.
  • Countries at COP-28 decided to transition away from fossil fuels and also pledged to triple renewable energy capacity by 2030. More than 20 countries also pledged to triple their nuclear energy capacity.
  • However, the transition from fossil fuels is restricted to energy systems alone; they can continue to be used in the plastics, transport, and agriculture sectors.
  • The declaration also refers to ‘transitional fuels’, such as natural gas, for ensuring energy security.
  • The declaration called for accelerated climate mitigation using carbon capture and storage (CCS) and carbon removal(CDR) technologies.

Green Finance:

  • Developed nations and private sectors are asked to take the lead in grant-oriented, concessional finance to enable equitable transition in developing countries.
  • COP28 saw the establishment of innovative global green finance mechanisms to support developing nations in their transition to sustainable practices. The Green Climate Fund received fresh support of $3.5 billion, allowing it to finance adaptation and mitigation projects in vulnerable regions.
  • An additional $188 million was pledged to the Adaptation Fund.

ALTERRA:

  • The COP-28 Presidency introduced ALTÉRRA, an investment initiative with an ambitious goal to globally mobilise an unprecedented sum of $250 billion by 2030.

How did India fare at COP-28?

  • UAE Declaration on Climate and Health:
    • Partnership between COP-28 Presidency and WHO, recognizing health impacts of climate change.
    • Acknowledges benefits of climate action, like reduced air pollution and healthcare costs.
    • Signed by 123 countries committing $1 billion, but India didn’t sign it.
    • Reason: Reducing GHG emissions in health sector could affect gases used for cooling, potentially compromising healthcare needs, especially in rural areas due to ongoing healthcare infrastructure growth.
  • Global Methane Pledge:
    • GMP received attention at COP-28, with Climate and Clean Air Coalition as the new secretariat.
    • Partners announced over $1 billion in new grants to reduce methane emissions in agriculture, waste, and gas sectors.
    • 150+ countries signed the pledge, but India didn’t.
    • Reason: It may shift focus from carbon dioxide to methane, a GHG with a shorter lifetime.
      • India’s methane emissions are primarily from rice cultivation and livestock rearing, crucial for small and marginal farmers’ livelihoods.
  • India abstained from both declarations due to concerns about compromising healthcare infrastructure growth and the focus shift to methane, which doesn’t align with its emissions profile dominated by agriculture and livestock-related methane emissions.

Key takeaways:

  • Acknowledgement of the role of nature-based solutions for biodiversity conservation and climate.
  • Some 134 countries also agreed to a landmark declaration to transition to sustainable and resilient food systems.

Challenges:

  • Dispute between developed and developing nations over fossil-fuel subsidies.
  • Increasing the flow of climate finance and technologies to facilitate just job transitions and inclusive development.
  • Market mechanisms, financial resource allocation, the role of the World Bank as the agency for managing the L&D fund, and private sector engagement in climate action.

Source: The Hindu

5. COVID vaccines pillar COVAX to wind down by year-end left with billions unspent

Subject: Science and Tech

Section: Health

Context:

  • COVAX mechanism, a worldwide initiative launched in April 2020 to ensure equitable access to COVID-19 vaccines is coming to an end from Dec 31, 2023.

COVAX mechanism:

  • It was launched to make the vaccines available equitably and, more importantly, to low-income countries that otherwise would not be able to afford them.
  • The vaccine distribution will shift to regular immunisation programmes.
  • It was initiated by the GAVI–the Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations (CEPI), the World Health Organization (WHO) and the United Nations Children’s Fund (UNICEF).
  • COVAX is one of three pillars of the Access to COVID-19 Tools (ACT) Accelerator.
    • This ACT Accelerator aimed to bring together governments, global health organisations, manufacturers, scientists, the private sector, civil society and philanthropy with the goal of providing innovative and equitable access to COVID-19 diagnostics, treatments, and vaccines.
  • It helped lower-income countries achieve 57 per cent two-dose coverage, compared to the 67 per cent global average.
  • The unspent funds of COVAX will be used by GAVI.
  • Burundi in east Africa received the least number of vaccinations, with 0.32 per cent of its population receiving at least one dose of a COVID-19 vaccine. Yemen (3.85 per cent), Haiti (5.73 per cent), Papua New Guinea (7.27 per cent), Madagascar (10.44 per cent) and the Republic of the Congo (13.93 per cent) were some of the other countries with the least number of vaccinations.

About Gloval Vaccine Alliance (GAVI):

  • Founded in 2000, it aims to improve access to vaccines in the world’s poorest countries.
  • It operates through collaborations with governments, WHO, UNICEF, the World Bank, vaccine manufacturers, and philanthropic foundations.
  • Mission: Its core goal is to save lives, reduce poverty, and protect against epidemics by enhancing vaccine access in lower-income nations.
  • Financial Mechanism: Utilizes a financing model to provide affordable vaccines and support healthcare systems in recipient countries.
  • Impact: Contributed significantly to increasing vaccination rates, reducing child mortality, and preventing the spread of diseases in developing nations.
  • COVID-19 Role: Played a pivotal role in COVAX, ensuring equitable COVID-19 vaccine access globally, particularly for low- and middle-income countries.

CEPI:

  • It was established in 2017 to develop vaccines against emerging infectious diseases and epidemics.
  • Core Mission: Aims to proactively tackle global health threats by accelerating vaccine development and ensuring equitable access to vaccines during outbreaks.
  • It works in partnership with public, private, philanthropic, and civil society sectors, collaborating with organizations like WHO and Gavi.

Source: Down To Earth

6. Why the UK banned Air France, Lufthansa, and Etihad ads over ‘greenwashing’ claims

Subject: Environment

Section: Climate change

In the news:

  • UK’s ad regulator banned Air France, Lufthansa, and Etihad ads for allegedly misleading consumers on air travel’s environmental impact.
  • The Advertising Standards Authority (ASA) found ads claiming sustainability lacked evidence, violating UK ad code and accused of greenwashing.

Greenwashing:

  • Greenwashing is when firms or governments give a false impression that all of their products or activities are climate-friendly or help in reducing emissions. Moreover, greenwashing may also occur when a company highlights sustainable aspects of a product to overshadow its environmentally damaging activities.
  • It can be performed through the use of environmental imagery, misleading labels, and hiding tradeoffs.
  • Examples like the Volkswagen emissions scandal illustrate this tactic, where a company falsely portrayed its products as environmentally friendly.

Further details of Greenwashing

Aviation Industry Emissions:

  • Aviation contributes 2.5% of human-produced CO2 emissions, as per the IPCC 2022 estimates, with predictions of increasing to 5% by 2050.
  • Consideration of non-CO2 emissions like water vapor would attribute nearly 5% of historical global warming to the airline industry.
  • Domestic flight emissions are attributed to a country’s accounts, but international flight emissions (counted as bunker fuels) have no assigned responsibility to any country.
  • This lack of accountability raises concerns about controlling these emissions on a global scale.

Source: Down To Earth

7. CDSCO to ban common cold and flu syrups for children below 4 yrs; Pharma cos asked to insert warning

Subject : Science and Tech

Section::Health

In the news:

  • The Central Drugs Standard Control Organisation (CDSCO), the country’s apex health regulatory agency, has decided to ban the use of a popular anti-cold cocktail medicine combination among children below four years of age.

Expert Committee Recommendation:

  • In June, an expert committee discussed the matter and advised against using this drug combination for children under four.
  • The committee suggested adding a warning regarding this restriction on labels and package inserts.

Reason:

  • Some concerns have been raised over the use of a fixed drug combination of Chlorpheniramine Maleate IP 2mg and Phenylephrine HCI IP 5mg drops. The formulation was an unapproved one for infants.
    • The combination is used to treat cold and flu-like symptoms, which include coughing, sneezing, watery eyes, among others.
    • Makers of these medicines have been asked to insert a ‘warning’.

About CDSCO:

  • Formed in 1961, operates under India’s Ministry of Health and Family Welfare.
  • Regulatory Scope and Functions:
    • Oversees drugs, cosmetics, and medical devices’ safety, efficacy, and quality as per the Drugs and Cosmetics Act.
    • Grants approvals for new drugs, licenses for manufacturing, and regulates clinical trials.
  • Organizational Structure:
    • Comprises expert committees focusing on drug approvals, adverse event monitoring, and policy formulation.
  • Quality Control and Inspections:
    • Manages a network of drug testing laboratories, conducts facility inspections to ensure compliance with regulations.
  • International Collaborations:
    • Collaborates with global regulatory bodies and organizations to align with international standards and practices.

Source: TH BusinessLine

8. Ethanol blending policy

Subject: Environment

Section: Agri and SD

In the news:

  • While ethanol blended petrol (EBP) increased from 1.6% in 2013-14 to 11.8% in 2022-23, the 20% target by 2025 has run into trouble with low sugar stocks in 2022-23 and impending shortfall in sugarcane production this year.
  • NAFED and National Cooperatives Consumers’ Federation of India (NCCF) have authorised to procure maize (corn) for supplying ethanol distilleries.

Ethanol from maize (corn):

  • Only 5-7% of the world’s corn output was used for ethanol production and the U.S. has a corn based ethanol programme.
  • Challenge: Using corn for producing ethanol directly reduces its use as food or livestock feed. It directly links food prices to cruid oil prices through the demand side.
    • High corn prices also increases the price of other soft grains like wheat/barley.

Ethanol from sugarcane:

  • Sugarcane based ethanol production is preferred in tropical countries like Brazil and India.
    • Challenge: More land under water-intensive sugarcane production can displace food production and also degrade water table.
  • In case of sugarcane, ethanol is produced by processing the molasses (C-heavy/B-heavy) and constitutes minimal trade-off with sugar output.
  • The B-heavy molasses path produces less sugar and ethanol simultaneously from sugarcane.
  • Ethanol can also be produced from cane juicewithout the extraction of sugar, but it may lead to conflict between sugar production and ethenol production. This process gives substantially higher yield of ethanol.

Sugarcane molasses:

  • It is a viscous, dark and sugar-rich by-product of sugar extraction from the sugarcane (Saccharum officinarum L.). It is a major feed ingredient, used as an energy source and as a binder in compound feeds.
  • Both the sugar extraction process and the sugar refining process yield molasses, and each step of these processes output specific types of molasses:
    • Integral high-test molasses is produced from unclarified sugarcane juice. Because it is concentrated from unclarified sugarcane juice, heavy incrustations and scum deposits lead to frequent mill interruptions and, therefore, to increased factory maintenance costs.
    • A molasses (first molasses) is an intermediate by-product resulting from first sugar crystal extraction (A sugar), from initial processing at the sugar factory. A molasses contains 80-85% DM. If it has to be stored, it should be inverted in order to prevent crystallization.
    • B molasses (second molasses): It has approximately the same DM content as A molasses but contains less sugar and does not spontaneously crystallize.
    • C molasses (final molasses, blackstrap molasses, treacle) is the end by-product of the processing in the sugar factory. It still contains considerable amounts of sucrose (approximately 32 to 42%). C molasses does not crystallize and can be found in liquid or dried form as a commercial feed ingredient.
    • Syrup-off (liquor-off, jett) is the end by-product from the centrifugation of the final refined masecuite in a raw sugar refinery. Normally, syrup-off is sent to the raw sugar section of the refinery where it is further processed in order to recover more sucrose. Due to its high content of sucrose (90-92% DM), it is an excellent energy source for monogastrics but can be an expensive ingredient.
    • Refinery final molasses is the by-product of refined sugar extraction. It has a very similar composition to that of C molasses produced in a raw sugar factory and it is stored in the same tanks.
    • In some countries the juice is extracted in a simple animal or mechanically driven press, then boiled in open vats. In this rudimentary process, pan (uncrystallized) sugar is produced and the by-product molasses is called “melote”. It contains only 50% DM.

9. Bihar to develop Sita birthplace

Subject :History

Section: Art and culture

Context: Bihar to develop Sita birthplace

More about the news:

  • Bihar Chief Minister Nitish Kumar has launched a Rs 72-crore development plan for Goddess Sita’s birthplace at Punaura Dham in Sitamarhi.

What are the mentions of present-day Bihar in the Ramayana:

  • The Valmiki Ramayana, the primary source book for many subsequent versions, including Tulsidas’s Ramcharitmanas, refers to Sita using four words — Vaidehi, Janaki, Sita, and Mithilapuri. Mithilapuri, an apparent reference to Mithila, connects to Sita’s birth story, where she was found in a ploughed field by King Janak in Ramayana.
  • According to Valmiki, Ram and Laxman visited various sites in Bihar during their travels with Maharishi Vishwamitra, including Chitrakoot, Saran district, Siddhashram in Buxar, the confluence of Ganga and Sone near Patna, and Ahalya’s ashram (Ahirouri in Mithilapuri).
  • Mithila plays a significant role during Ram and Sita’s wedding in the Ramayana.
  • Valmiki mentions Ram visiting Mithilapuri once, while some later versions claim a visit after his coronation.

Which is the birthplace of Sita in Sitamarhi, the Janaki temple or the Punaura Dham

  • Contrary to the belief that Janaki Sthan in Sitamarhi was Sita’s birthplace, recent research spanning nearly a decade indicated that the Janaki temple was constructed around 200 years ago based on a sage’s dream.
  • The research, relying on Valmiki Ramayan and travelers’ accounts, identified Punaura Dham as Sita’s birthplace. 
  • The site, comprising a 100-year-old temple, Sitakund, Sita Vatika, and Luv Kush Vatika, was recommended to the Bihar government and subsequently accepted by the state and central governments for development in the Ramayana Circuit.
  • The decision to develop Punaura Dham followed conclusive research, refuting the previous belief in Janaki Sthan.
  • Statistician and historian Sir William Wilson Hunter’s account in 1877 also acknowledged Punaura as a contender for Sita’s birthplace, three miles southwest of Sitamarhi.

What is the history of Janakpuri in Nepal

  • The modern name Janakpuri is attributed to Mithilapuri, a location mentioned in Valmiki Ramayan.
  • The Indian government, in collaboration with the Nepal government, has incorporated Janakpuri into the Ramayana Circuit.
  • Historically, Janakpur became part of Nepal through the 1816 Indo-Nepal treaty. 
  • Notably, Francis Buchanan Hamilton, a prominent historian on Nepal, does not document ‘Janakpuri,’ but references Mithilapuri.

What are some historical references of the present-day Sitamarhi

  • According to the account of the renowned archaeologist Alexander Cunningham, Sita-Marhi is located slightly more than 40 miles northwest of Darbhanga, around 14 miles from the nearest point of the Nepal frontier.
  • The area is bounded on the east by a branch of the Sowrun Nala, and parts of the village are affected by numerous small streams that converge and flood the region.
  • While Sita-Marhi has some temples dedicated to Sita, Cunningham notes that the place lacks significant archaeological interest beyond these structures.

What are the Bihar government’s plans for Punaura

  • The Punaura Development plan, based on information from the board of religious trust, encompasses the renovation of the temple, creation of a roofed pradakshina path around it, and the development of Luv Kush Vatika, Sita Vatika, and Sita Kund.
  • Additionally, a meditation mandap will be established, and a 3-D film will be screened to depict Sita’s life journey.
  • The Mahavir Temple Trust is set to construct a Sita temple within Sitakund with a budget of Rs 100 crore, and the project will commence after the inauguration of the Ram temple in Ayodhya in January 2024.

10. House nod to raise age limit for GST appellate tribunal

Subject :Polity

Section: National body

Context: House nod to raise age limit for GST appellate tribunal

More about the news:

  • The Rajya Sabha has returned a bill to raise the age limit of the President and members of the Goods and Services Tax (GST) Appellate Tribunals from 67 to 70 years and 65 to 67 years, respectively, aligning them with the age limits of other tribunals.
  • The Central GST (Second Amendment) Bill, 2023, was introduced by Union Finance Minister Nirmala Sitharaman.
  • The amendment aims to address issues arising from the Madras High Court’s 2019 decision to strike down the formation of GST Appellate Tribunals, necessitating amendments to the GST Act in July 2023.
  • The Bill also allows members of the Bar with 10 years of experience to serve as judicial members of the tribunals.
  • The Rajya Sabha also returned the Provisional Collection of Taxes Bill, 2023, which replaced the Provisional Collection of Taxes Act, 1931. Both bills were passed by the Lok Sabha on the preceding day.

What is Goods and Services Tax (GST):

  • GST is an indirect tax that came into effect from 1 July 2017 through the implementation of the 101st Amendment to the Constitution of India by the Indian government.
  • It has actually replaced various indirect taxes such as – service taxes, VAT, excise and others in the country.
  • GST rates are divided into five different tax slabs for collection of tax – 0%, 5%, 12%, 18% and 28%.
  • There are three types of GST i.eState Goods and Services Tax (SGST), Central Goods and Services Tax (CGST) and the Integrated Goods and Services Tax(IGST)

What is the GST Council:

  • GST Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.
  • It makes recommendations to the Union and State Government on issues related to Goods and Service Tax and was introduced by the Constitution (One Hundred and First Amendment) Act, 2016.
  • As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre and the States, shall consist of the following members: –
    • Union Finance Minister – Chairperson
    • The Union Minister of State, in-charge of Revenue of finance – Member
    • The Minister In-charge of finance or taxation or any other Minister nominated by each State Government – Members
  • As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.
  • Every decision of the Goods and Services Tax Council shall be taken at a meeting by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely:
    • The vote of the Central Government shall have a weightage of one third of the total votes cast, and
    • The votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting.

What is GST Appellate Tribunal:

  • The Central Goods and Service Tax Act, 2017 in Section 109 mandates for the constitution of a GSTAT and its Benches.
  • The GSTAT is the specialized appellate authority for resolving disputes under the GST laws.
  • Composition:
    • The GST Tribunal will have one principal bench in New Delhi and as many benches or boards in states as decided by each state, subject to approval of the council.
    • North-eastern states could opt for one bench for 2-3 states and an additional bench for very far-flung areas.
    • The principal bench and state boards would have two technical and two judicial members each, with equal representation from the Centre and states.
    • All four members would not sit for hearing each case. It depends on the threshold or value of dues involved.

11. Elimination of child labour a distant goal

Subject: Polity

Section: Legislation in news

Context: Parliamentary panel suggested country needs uniform definition of ‘child’ to eliminate child labour.

More about the news:

  • The parliamentary panel on Labour, Textiles, and Skill Development has emphasized the need for a uniform definition of ‘child’ across various laws to effectively implement the policy aimed at eliminating child labor by 2025.
  • The panel found ambiguity in the definition of ‘child’ under different legislations and highlighted discrepancies in age criteria and offenses related to child labor.
  • According to the 52nd report of the Parliamentary Standing Committee, there is ambiguity in the definition of ‘child’ under different legislations, such as the Child and Adolescent Labour (Prohibition and Regulation) Act, 1986, the Right of Children to Free and Compulsory Education Act, 2009, the Minimum Wages Act, 1948, and the Juvenile Justice (Care and Protection of Children) Act, 2015.
  • The committee also notes that the employment of children in violation of the Child and Adolescent Labour (Prohibition and Regulation) Act, 1986, is a cognizable offense, while under the Juvenile Justice Act, 2015, it is a non-cognizable offense. The panel suggests addressing these differences in the criteria for determining the age of a child and the classification of offenses to avoid ambiguity.
  • Furthermore, the panel recommends that hazardous occupations and processes should not be included in the positive list of activities where adolescents can work.
  •  It emphasizes the need for strict punishment, such as cancellation of licenses and property attachment, in addition to increasing fines to achieve zero tolerance for child labor.
  • Regarding the utilization of fines collected for child labor offenses, the panel urges the Ministry of Labour & Employment to formulate guidelines and increase the fine amount, considering inflation. It recommends creating a district-level fund for child laborers and suggests using the fund for the rehabilitation of trafficked and migrant child laborers repatriated from other states.
  • The committee also proposes holding principal employers and traffickers accountable for the deployment of child labor. It calls for amendments in the relevant acts to ensure zero tolerance for child labor and recommends a comprehensive Standard Operating Procedure (SOP) for the functions of district project societies (DPS).
  • Additionally, the panel suggests incorporating provisions in the Child and Adolescent Labour (Prohibition and Regulation) Act similar to those in the Protection of Children from Sexual Offences Act, 2012, for action against police for not registering FIRs. It advocates assigning the responsibility of reporting children selling goods or begging at traffic lights to traffic police and making them accountable for not reporting such instances.
  • The committee desires the establishment of a National Level Child Tracking Mechanism to facilitate coordination among states and the Centre for monitoring and reporting at the district level. It emphasizes the importance of preventing, tracing, tracking, rescuing, rehabilitating, and reintegrating rescued children and recommends the development of a detailed SOP in consultation with all stakeholders.

What is a Parliamentary Committee:

  • A Parliamentary committee consists of Members of Parliament who are either elected or appointed from the members of the house, or nominated by the Speaker or Chairman.
  • The concept of Parliamentary committees originated in the British Parliament and has been adopted in India.
  • These committees operate under the guidance of the Speaker of Lok Sabha or the Chairman of Rajya Sabha, presenting their findings and recommendations to the respective houses.
  • The authority of Parliamentary committees is derived from the constitution.
    • Article 105 outlines the powers, privileges, etc., of the houses of Parliament and of the members and committees thereof.
    • Article 118 states that each House of Parliament may establish rules for regulations, subject to the provisions of the constitution, governing its procedure and the conduct of its business.

12. India’s AI Mission

Subject : Science and Tech

Section: awareness in IT

Context: In big AI push, Centre to step up compute capacity

More about the news:

  • As part of its Artificial Intelligence Mission, India aims to develop its own “sovereign AI” by building computational capacity in the country and offering compute-as-a-service to startups.
  •  The plan involves a public-private partnership model and government initiatives, with a goal of creating a digital public infrastructure (DPI) for startups to utilize computational capacity at a lower cost.
  • The initiative aims to support AI applications in sectors like agriculture, healthcare, and education. 
  • The government is also working on building datasets and considering directing big tech companies to share anonymized personal data with the India Datasets platform.

What is the Centre’s Plan to Step up Compute Capacity under the AI Mission

  • The overall plan includes:
  • Establishing a compute capacity ranging from 10,000 to 30,000 GPUs(graphic processing units) under the PPP model.
  • Adding an extra 1,000-2,000 GPUs through the PSU Centre for Development of Advanced Computing (C-DAC).
  • The government is also considering diverse incentive structures for private firms to establish computing centers, such as a capital expenditure subsidy model used in the semiconductor scheme, incentives based on operational expenses, and offering a “usage” fee.

How the Public Model for Building Computing Capacity will Work

  • In the public model, computational capacity will be established within the C-DAC as a component of the National Supercomputing Mission.
  • C-DAC currently possesses the Rudra and Param systems, with plans to integrate 1,000-2,000 GPUs to them.
  • Rudra, an indigenous server platform developed by C-DAC, features two expansion slots for graphic cards.
  • Param Utkarsh, a high-performance computing system at C-DAC, provides AI capabilities across machine learning and deep learning frameworks, along with compute and storage services as a cloud offering.

What is the Legal Framework Related to AI in India:

  • In India, there are currently no specific legal regulations governing the use of deepfake technology. However, existing laws can be applied to address the misuse of this technology, covering aspects such as Copyright Violation, Defamation, and cybercrimes.
  • For instance, the Indian Penal Code, which addresses defamation, and the Information Technology Act of 2000, which pertains to sexually explicit material, could potentially be used to combat malicious deepfake usage.
  • The Representation of the People Act of 1951 contains provisions that prohibit the creation or dissemination of false or deceptive information about candidates or political parties during election periods.
  • Additionally, the Election Commission of India has established regulations requiring registered political parties and candidates to obtain prior approval for all political advertisements on electronic media.
  • Despite these measures, they may still be inadequate in fully addressing the multifaceted challenges arising from AI algorithms, including the potential risks associated with deepfake content.

What are the Recent Global Efforts to Regulate AI:

  • The world’s inaugural AI Safety Summit, hosted at Bletchley Park in the UK, saw 28 major nations, including the US, China, Japan, the UK, France, India, and the European Union, unite in signing a declaration emphasizing the necessity for global action to address the potential perils of AI.
  • The declaration underscores the recognition of significant risks stemming from potential deliberate misuse and unintended control challenges in advanced AI, particularly in domains such as cybersecurity, biotechnology, and the spread of disinformation.
  • In response to these concerns, the US President issued an executive order aiming to fortify defenses against AI-related threats and exercise regulatory oversight over safety standards applied by companies in the assessment of generative AI systems like ChatGPT and Google Bard.
  • During the G20 Leaders’ Summit held in New Delhi, the Indian Prime Minister advocated for the creation of a global framework governing the development of “ethical” AI tools.
  • This shift in New Delhi’s stance signifies a transition from a position of non-interference in AI regulation to a proactive approach, involving the formulation of regulations grounded in a “risk-based, user-harm” perspective.

13. Overview of Trust Funds at the World Bank

Subject: Economy

Section: External Sector

  1. Strategic Use of Trust Funds:
    • Trust funds are strategic financing instruments used by the World Bank to complement core funding from IBRD and IDA.
    • They support specific development priorities, regions, and thematic focus areas.
    • Trust funds enhance the World Bank’s capacity to deliver results in client countries.
    • They provide financial resources for global public goods, fragile states, disaster prevention, relief, partnerships, and innovation.
  2. Trust Fund Reform:
    • The World Bank has undertaken reforms to improve the effectiveness of trust fund resources and activities.
    • The latest reform transitions the IBRD/IDA trust fund portfolio into larger Umbrella 2.0 Programs.
  3. Objectives of Trust Fund Reform:
    • Improve strategic alignment, efficiency, and management oversight.
    • Reduce fragmentation and transaction costs.
  4. Benefits for Development Partners:
    • Elevates the World Bank-Donor partnership to focus on strategy.
    • Enables collective action at scale on development challenges.
    • Supports knowledge exchange, results reporting, and visibility.
    • Facilitates better alignment of trust fund activities with country priorities.
    • Integrates trust fund resources more effectively into World Bank country programs.
  5. Umbrella Programs:
    • Aligned with World Bank’s priorities, maximizing development resource value.
    • Strengthened integration with institutional strategy, planning, and budgeting processes.
    • Facilitate elevated dialogue between the World Bank and development partners.
    • Operate at scale to achieve improved results on the ground.
    • Enhance development effectiveness and impact for client countries.
    • Umbrella 2.0 Programs come with standardized approaches to governance, communications, visibility, and results management.
    • Reduce transaction costs and enhance focus on delivering impactful results.

The trust fund reform aims to streamline the World Bank’s trust fund portfolio, fostering better coordination, alignment, and efficiency in addressing global development challenges.

Trust Funds at WB

Trust funds at the World Bank are financial mechanisms that allow donors to pool their contributions and support specific programs, projects, or initiatives aligned with the World Bank’s development goals. These funds are often earmarked for particular sectors, themes, or geographic regions. The World Bank manages and administers these trust funds, ensuring that resources are allocated efficiently and used in accordance with the donors’ intentions.

Trust funds can support a wide range of activities, including poverty reduction, education, health, infrastructure development, and environmental sustainability. They play a crucial role in leveraging additional resources, promoting collaboration between the public and private sectors, and addressing pressing global challenges.

The World Bank’s engagement with trust funds reflects a partnership approach, where various stakeholders, including governments, philanthropic organizations, and private entities, come together to address specific development needs. The flexibility and targeted nature of trust funds enable the World Bank to respond to emerging challenges and implement innovative solutions to promote sustainable development worldwide.

Overview of World Bank

  1. Foundation and Purpose:
    • Founded in 1944 under the Bretton Woods Agreement.
    • Dedicated to providing financing, advice, and research to aid the economic advancement of developing nations.
    • Fights poverty by offering developmental assistance to middle- and low-income countries.
  2. Structure and Institutions:
    • Comprises five cooperative institutional organizations known as the World Bank Group:
      • International Bank for Reconstruction and Development (IBRD)
      • International Development Association (IDA)
      • International Finance Corporation (IFC)
      • Multilateral Investment Guarantee Agency (MIGA)
      • International Centre for Settlement of Investment Disputes (ICSID)
    • Each institution focuses on specific areas such as debt financing, interest-free loans, private sector investment, guaranteeing investments, and resolving investment disputes.
  3. Funding Sources:
    • Obtains funds from member countries’ capital subscriptions, bond flotations, and earnings from interest payments.
    • Capital subscriptions determine voting power, favoring wealthier and more developed countries.
  4. International Bank for Reconstruction and Development (IBRD): The International Bank for Reconstruction and Development (IBRD) is a vital component of the World Bank Group, playing a key role in promoting global economic development. Established to assist middle-income and creditworthy low-income countries, IBRD provides financial and technical assistance to support a wide range of projects, from infrastructure development to social programs. Through its lending activities and expertise, IBRD contributes significantly to poverty reduction and sustainable development initiatives worldwide.
  5. International Development Association (IDA): The International Development Association (IDA) is an essential arm of the World Bank Group dedicated to addressing the unique challenges faced by the world’s poorest countries. IDA provides low-interest loans and grants to these nations, enabling them to invest in critical areas such as education, healthcare, and infrastructure. By focusing on poverty reduction and sustainable development, IDA aims to uplift marginalized communities and foster long-term economic growth in regions where resources are limited.
  6. International Finance Corporation (IFC): The International Finance Corporation (IFC) serves as the private sector arm of the World Bank Group, striving to advance sustainable and inclusive economic development. IFC supports private enterprises by providing investment, advisory services, and risk management tools. By fostering entrepreneurship and innovation, IFC contributes to job creation, poverty alleviation, and the development of vibrant markets in emerging economies.
  7. Multilateral Investment Guarantee Agency (MIGA): The Multilateral Investment Guarantee Agency (MIGA) operates as a critical instrument within the World Bank Group, promoting foreign direct investment (FDI) in developing countries. MIGA offers political risk insurance and credit enhancement to encourage private-sector investments in regions where uncertainties may deter potential investors. Through its risk mitigation strategies, MIGA facilitates the flow of capital to support projects that contribute to economic growth and development.
  8. International Centre for Settlement of Investment Disputes (ICSID): The International Centre for Settlement of Investment Disputes (ICSID) is an autonomous international institution that facilitates the resolution of investment disputes between governments and private sector entities. Established under the auspices of the World Bank, ICSID provides a neutral and effective forum for arbitration and conciliation, helping to ensure fair and transparent resolution mechanisms for investment-related conflicts. ICSID plays a crucial role in promoting investor confidence and fostering a stable environment for international investment.
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