Daily Prelims Notes 23 November 2023

November 23, 2023
Posted by: OptimizeIAS Team
Category: DPN

Daily Prelims Notes

23 November 2023

Table Of Contents

1. Pak applies for BRICS, seeks Russia’s support

Subject: IR

Section: Internal organisation

Context: Pakistan, which has applied for the BRICS membership, is looking forward to joining the group of developing nations under Russia’s presidency in 2024.

Details:

The bloc currently includes China, the world’s second-largest economy, as well as Brazil, Russia, India, and South Africa. Six new members —Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates— will be added to the bloc in January 2023. Pakistan is hopeful about joining BRICS with these countries.

The next BRICS summit is scheduled for October 2024 in the city of Kazan in Russia.

BRICS:

BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa.
The term BRIC was coined by Jim O’ Neil, the then chairman of Goldman Sachs in 2001.
The first BRIC summit took place in the year 2009 in Yekaterinburg (Russia).
In 2010, South Africa formally joined the association making it BRICS.
The BRICS Leaders’ Summit is convened annually.
The Chairmanship of the forum is rotated annually among the members, in accordance with the acronym B-R-I-C-S.
Together, BRICS accounts for about 40% of the world’s population and about 30% of the GDP (Gross Domestic Product), making it a critical economic engine.
During the Sixth BRICS Summit in Fortaleza (2014) the leaders signed the Agreement establishing the New Development Bank (NDB), headquartered in Shanghai.
Fortaleza Declaration stressed that the NDB will strengthen cooperation among BRICS and will supplement the efforts of multilateral and regional financial institutions for global development thus contributing to sustainable and balanced growth.
Considering the increasing instances of global financial crisis, BRICS nations signed BRICS Contingent Reserve Arrangement (CRA) in 2014 as part of Fortaleza Declaration at Sixth BRICS summit.
- The BRICS CRA aims to provide short-term liquidity support to the members through currency swaps to help mitigating BOP crisis situation and further strengthen financial stability.
- The initial total committed resources of the CRA shall be one hundred billion dollars of the United States of America (USD 100 billion).

2. Review of sedition

Subject: Polity

Section: Constitution

Context: In a recent development, the Supreme Court has announced its decision to hear a series of pleas challenging the constitutional validity of the sedition provision in the Indian Penal Code (IPC) in January. This move follows the introduction of bills by the Centre in Parliament, aiming to replace the outdated colonial-era penal statutes. Among the proposed changes is the repeal of the contentious sedition law.

Chief Justice D Y Chandrachud has expressed his intent to form an appropriate bench to address the matter.

Section 124A of the Indian Penal Code addresses the crime of sedition, which involves engaging in acts or attempts to generate hatred or contempt against the government, with a maximum punishment of life imprisonment. It was incorporated into the penal code in 1890. This happened 57 years before India gained independence and nearly 30 years after the IPC itself was enacted.

The decision to revisit the constitutional validity of the sedition law marks a significant development in the ongoing legal discourse surrounding freedom of expression and the need to reassess archaic legal frameworks. The outcome of the Supreme Court’s review will likely have far-reaching implications on the legal landscape in India.

Why a larger bench is needed?

A larger bench is needed since the provision was upheld in 1962 by a five-judge bench in ‘Kedar Nath Singhvs State of Bihar’.
Senior Advocate Gopal Sankara narayanan for the petitioner surged the SC to list it be fore as even-judge bench keeping in view the Kedarnath decision was delivered by a five-judge bench.

3. IMF, FSB, FATF to update G20 nations, others on implementing roadmap for crypto assets, says FM

Subject: International relation

Section: International organisation

Context: THE INTERNATIONAL Monetary Fund (IMF), Financial Stability Board (FSB) and the Financial Action Taskforce (FATF)will provide regular updates to G20 member nations and other countries about the progress related to implementation of the G20 roadmap for crypto assets, Finance Minister Nirmala Sitharaman

The Financial Stability Board is headquartered in Basel, Switzerland.
It is hosted and funded by the Bank for International Settlements, and is established as a not-for-profit association under Swiss law.
The Board includes all G20 major economies, FSF members, and the European Commission.
The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system.
More specifically, the FSB was established to:
- Assess vulnerabilities affecting the global financial system as well as to identify and review, on a timely and ongoing basis within a macroprudential perspective, the regulatory, supervisory and related actions needed to address these vulnerabilities and their outcomes.
- Promote coordination and information exchange among authorities responsible for financial stability.
- Monitor and advise on market developments and their implications for regulatory policy.
- Monitor and advise on best practice in meeting regulatory standards.
- Undertake joint strategic reviews of the international standard-setting bodies and coordinate their respective policy development work to ensure this work is timely, coordinated, focused on priorities and addresses gaps.
- Set guidelines for establishing and supporting supervisory colleges.
- Support contingency planning for cross-border crisis management, particularly with regard to systemically important firms.
- Collaborate with the International Monetary Fund (IMF) to conduct Early Warning Exercises.
- Promote member jurisdictions’ implementation of agreed commitments, standards and policy recommendations, through monitoring of implementation, peer review and disclosure.
The FSB’s structure comprises the Plenary as the sole decision-making body, a Steering Committee to take forward operational work in between Plenary meetings, and three Standing Committees, each with specific but complementary responsibilities towards the above process:
- The Standing Committee on Assessment of Vulnerabilities (SCAV), which is the FSB’s main mechanism for identifying and assessing risks in the financial system.
- The Standing Committee on Supervisory and Regulatory Cooperation (SRC), which is charged with undertaking further supervisory analysis or framing a regulatory or supervisory policy response to a material vulnerability identified by SCAV.
- The Standing Committee on Standards Implementation (SCSI), which is responsible for monitoring the implementation of agreed FSB policy initiatives and international standards.
The FSB’s decisions are not legally binding on its members – instead the organisation operates by moral suasion and peer pressure, in order to set internationally agreed policies and minimum standards that its members commit to implementing at national level.
Unlike most multilateral financial institutions, the FSB lacks a legal form and any formal power, given that its charter is an informal and nonbinding memorandum of understanding for cooperation adopted by its members.
The FSB has 68 member institutions, comprising ministries of finance, central banks, and supervisory and regulatory authorities from 25 jurisdictions as well as 10 international organizations and standard-setting bodies, and 6 Regional Consultative Groups reaching out to 65 other jurisdictions around the world.
Organizations
- Bank for International Settlements
- European Central Bank
- European Commission
- International Monetary Fund
- Organisation for Economic Co-operation and Development
- The World Bank
Standard-setting bodies
- Basel Committee on Banking Supervision
- International Association of Insurance Supervisors
- International Organization of Securities Commissions

Crypto-assets:

Crypto assets are purely digital assets that use public ledgers over the internet to prove ownership.
They use cryptography, peer-to-peer networks and distributed ledger technology (DLT) – such as blockchain – to create, verify and secure transactions.
They can have different functions and characteristics: they may be used as a medium of exchange; a way to store value; or for other business purposes.
Crypto assets generally operate independently of a central bank, central authority or government.
Some of the more common types of crypto assets are:
- Cryptocurrency
- Utility Tokens
- Security Tokens
- Non-Fungible Tokens
- Stable coins
A simpler way to understand a crypto asset is that they are digital assets except:
- Crypto assets use cryptography
- This kind of asset depends on distributed ledger technology.
- One does not need a third such as a bank to issue crypto assets like what happens with bitcoins.
- Crypto assets have three primary uses: as an investment, a means of exchange, and to access goods and services.

4. SoI, private firm to create 3D maps of cities, towns

Subject: Science and Tech

Section: Awareness in IT

Context:

In a first-of-its-kind initiative, the Survey of India (SoI), historically the custodian of India’s maps, has signed an agreement with a Mumbai-based private company, Genesys International, to prepare three-dimensional maps of several cities and towns.

Digital Twins:

These 3D maps will be called the digital twins.
These maps are three-dimensional representations of cities and when coupled with high-resolution images, can be used in a variety of planning applications.
Genesys International will develop an urban 3-D data model, and allow it to “licence” geospatial data products to buyers in a “content-as-a-service” model.
So far, the company has built digital twins of Ayodhya, the Dharavi slum cluster in Mumbai, Kochi, and Kanpurs, among other applications.

Digital Twin Technology:

A digital twin is a digital representation of a physical object, person, or process, contextualized in a digital version of its environment. Digital twins can help an organization simulate real situations and their outcomes, ultimately allowing it to make better decisions.
The digital twin can and does often exist before there is a physical entity.

Source: The Hindu

5. Lower oxygen at high altitudes increases lifespan in ageing mice

Subject: Science and Tech

Section: Health

Context:

The lower oxygen content at high altitudes increases lifespan significantly in ageing mice, according to a study published in PLOS Biology.

Details of the study:

The study shows that oxygen restriction, or continuous hypoxia, can extend lifespan in an ageing mammal.
Naked mole rat: A rodent that spends most of its life in an oxygen-deficient burrow with a lifespan much longer than scientists have been able to predict based on its size or evolutionary history.
Caloric restriction, or dietary restriction without malnutrition is the gold standard for increasing lifespan in diverse species like yeast, roundworms, fruit flies, mice, and rats.
The animals housed in hypoxic conditions also displayed better neurologic function than their counterparts living in normoxic conditions (normal oxygen conditions).
The mechanism by which hypoxia extends lifespan in mammals is still unknown to researchers.

Significance of the study:

The study provides valuable insights into the potential of hypoxia to enhance healthy lifespan.
Ageing is a highly complex phenomenon, involving numerous molecular mediators. Hypoxia may not target many aspects of ageing since it doesn’t affect the expression of a gene (p21) that’s an important marker of ageing.
Applicability to humans:
- There is no evidence of its applicability to the human population and there is no evidence that people living at high altitudes have a longer maximal lifespan, but there are some clues that the median lifespan might be increased at higher altitudes.

Source: The Hindu

6. CoP28 turns attention to potent methane emissions

Subject: Environment

Section: Climate change

Context:

The powerful heat-trapping emissions, namely methane, are likely to be discussed at the crucial CoP28 meeting in Dubai.

About Methane:

It is the second largest contributor to climate change, accounting for around 16% of the warming effect.
Methane remains in the atmosphere for only about 10 years, but Its warming effect is 28 times greater than CO2 over a 100-year timescale.
Potent but relatively short-lived methane is a key target for countries wanting to slash emissions quickly and slow climate change.
Large amounts of methane are simply leaking into the atmosphere from fossil fuel infrastructure.
Methane concentrations currently is over two-and-a-half times greater than pre-industrial levels.
Atmospheric methane (CH4) occurs abundantly in nature as the primary component of natural gas.

Sources:

Around 60% of methane emissions are linked to human activity and the rest are from wastelands.
Agriculture is the biggest emitter, responsible for roughly a quarter of emissions. Most of that is from livestock (cows and sheep release methane during digestion and in their manure) and rice cultivation, where flooded fields create ideal conditions for methane-emitting bacteria.
The energy sector – coal, oil, and gas – is the second largest source of human-caused methane emissions. Methane leaks from energy infrastructure, such as gas pipelines, and from deliberate releases during maintenance.
Discarded household waste also releases large quantities of methane when it decomposes, if left to rot in landfills.

Curbing methane emissions:

Rapid cuts in methane emissions linked to the fossil fuel sector could prevent up to 0.1 degrees Celsius of warming by mid-century.
Reduction can be achieved by repairing leaky infrastructure and eliminating routine flaring and venting during maintenance.
In agriculture, it’s possible to modify animal diets by adding a compound to improve their health.
For rice fields, changes to water management can be made.

Top methane emitting countries:

The world’s five largest methane emitters (from all sources) are China, India, the United States, Russia and Brazil.
Together, they are responsible for close to half of all methane emissions globally.
Of these, only the United States and Brazil are part of the Global Methane Pledge.
Looking only at energy-related emissions, the five largest emitting countries are China, Russia, the United States, Iran and India.

Source: The Hindu

7. Antarctic ozone hole now larger, thinner & may take longer to recover. Mesosphere has a role to play: Study

Subject: Environment

Section: International convention

Context:

The ozone hole over the Antarctic has not only grown larger but also thinner throughout most of the spring, according to a new study.

Ozone Hole:

The ozone hole is a region of exceptionally depleted ozone in the stratosphere over the Antarctic. It happens at the beginning of the Southern Hemisphere spring from August through October.

Study findings:

Despite making a recovery in area and depth since the 2000s, the Antarctic ozone hole has been massive in the last four years.
There is much less ozone in the centre of the ozone hole compared to 19 years ago.
This reduction is despite the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer, which regulates the production and consumption of human-generated chemicals known to deplete the ozone.
- The Montreal Protocol on Ozone Depleting Substances quadrennial assessment report of 2022 confirmed the phase-out of nearly 99 per cent of banned ozone-depleting substances.
The ozone layer is on track to recover within four decades, according to the United Nations Environment Programme (UNEP).
But, from 2020-22, the ozone hole has been remarkably large. The extent and duration of the 2022 hole were remarkably similar to the large holes of 2020 and 2021.

Factors responsible:

The ozone layer over the Antarctic is intrinsically linked to the climate and dynamics of the Southern Hemisphere.
Other factors like springtime temperature and wind patterns, aerosols from wildfires and volcanic eruptions, as well as changes in the solar cycle ozone hole development could also be responsible for the thinning of the ozone layer.
Role of Polar Vortex:
- The Antarctic ozone hole sits within the polar vortex, which is a circular pattern of wind in the stratosphere that forms during winter and is maintained until late spring.
- Within this vortex, the Antarctic air from the mesosphere (the atmospheric layer above the stratosphere) falls into the stratosphere.
- This intrusion of air brings natural chemicals (nitrogen dioxide, for example) which impact ozone chemistry in October.

For details of Montreal Protocol: Optimize Ias

8. Warm temperatures for prolonged periods may have led to massive pest attack in Assam

Subject: Geography

Section: Physical geography

Context:

Continuous warm temperatures for prolonged periods may have led to the serious pest infestation in Assam that damaged around 28,000 hectares of paddy crop in at least 15 districts. The crop was nearing maturity and about to be harvested when the pests attacked it.
The affected farmers will get benefits under the Pradhan Mantri Fasal Bima Yojana, the national crop insurance policy.

Details:

Pest- Mythimna separata
The pest was first reported as a sporadic pest from Tamil Nadu in 1937 and Kerala and Odisha in 1957.
They are known as the ear-head-cutting caterpillar, rice ear-cutting caterpillar, or armyworm.
It feeds on leaves and can cut off panicles from the base of a crop plant, frequently leaving the field looking like it has been grazed by cattle.
During an outbreak, the pest multiplies in large numbers and moves in swarms from field to field, like an army, to feed and attack the crops.
Reason for pest attack:
- An increase in temperatures with dryness creates a favourable condition for the pest population to increase.
- According to a study, every small rise in global temperatures will reduce the lifecycle of insects, resulting in a higher population of pests, increasing generations, an extension of geographical range and development season, and high risks of invasion by migrant pests and overwintering.
In India, which is home to 6.83 per cent of the world’s insect species, a degree Celsius rise in temperature would enable them to expand in presence about 200 kilometres northwards and 40 metres upward in terms of altitude.

PM Fasal Bima Yojana (PMFBY):

Launched on 18 February 2026.
It aims to reduce the premium burden on farmers and ensure early settlement of crop assurance claims for the full insured sum.
The Scheme covers all Food & Oilseeds crops and Annual Commercial/Horticultural Crops for which past yield data is available and for which a requisite number of crop-cutting experiments (CCEs) are being conducted under the General Crop Estimation Survey (GCES).
OBJECTIVES:
- To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests & diseases.
- To stabilise the income of farmers to ensure their continuance in farming.
- To encourage farmers to adopt innovative and modern agricultural practices.
- To ensure the flow of credit to the agriculture sector.

Implementing Agency:

It will be implemented through a multi-agency framework by selected insurance companies under the overall guidance & control of the Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW),Ministry of Agriculture & Farmers Welfare (MoA&FW), Government of India (GOI) and the concerned State in coordination with various other agencies; viz Financial Institutions like Commercial Banks, Co-operative Banks, Regional Rural Banks and their regulatory bodies, Government Departments viz. Agriculture, Co-operation, Horticulture, Statistics, Revenue, Information/Science & Technology, Panchayati Raj etc.

Source: Down To Earth

9. New study reveals sturgeon caviar sourced from illegal trade, labelled to mislead

Subject: Environment

Section: International Convention

Context:

A new study has revealed that sturgeon products being sold in the international market were from illegal trade and flouting wildlife protection norms.

Sturgeon:

Sturgeon is the common name for the 28 species of fish belonging to the family Acipenseridae.
Sturgeons are long-lived, late-maturing fishes with distinctive characteristics, such as a heterocercal caudal fin similar to those of sharks, and an elongated, spindle-like body that is smooth-skinned, scaleless, and armoured with five lateral rows of bony plates called scutes.
Sturgeon is native to lower Danube countries such as Bulgaria, Romania, Serbia and Ukraine that produce caviar.
- Caviar is a food consisting of salt-cured roe of the family Acipenseridae.
- Traditionally, the term caviar refers only to roe from wild sturgeon in the Caspian Sea and Black Sea (beluga, ossetra and sevruga caviars).
The Danube is the last river body with functional populations of beluga (Huso huso), Russian (Acipenser gueldenstaedtii), stellate (Acipenser stellatus) and sterlet (Acipenser ruthenus) sturgeons.
The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) in 1998 listed the species as endangered and put restrictions on the fishing of sturgeons from the Danube and Black Sea. Since then, the legal, internationally traceable caviar and meat can only be sourced from farmed sturgeons.

Source: Down To Earth

10. Gujarat gets a state fish: Why ghol, the ‘fisherman’s lottery’, was chosen

Subject: Environment

Section: Species in news

Context:

The black-spotted croaker, or the ghol fish — considered a fisherman’s lottery — was declared the state fish of Gujarat.
It has been chosen as the state fish because of its economic value and its uniqueness.
Some other fish species found on the Gujarat coast: Ribbon fish, pomfret, and Bombay Duck.

About Ghol fish or Black-spotted croaker:

The black-spotted croaker (Protonibeadiacanthus), also known in Australia as the black jewfish, is a species of marine ray-finned fish belonging to the family Sciaenidae, the drums and croakers.
It is the only species in the monospecific genus Protonibea.
The fish is usually found in the Indo-Pacific region that stretches from the Persian Gulf to the Pacific Ocean.
It is an expensive fish and is used for medicinal purposes.
It has a huge market in China and other countries.
- While the meat of the fish is exported as frozen fillet or whole fish to European and Middle-Eastern countries, its air bladder — which is cut open from the stomach and dried — is mainly exported to China, Hong Kong and other Asian countries where it is in high demand for its medicinal values.
IUCN Red List: Near Threatened

Source: Indian Express

11. India-Nordic-Baltic region aim to create long term synergies among investors from both region

Subject: IR

Section: Places in news

More about the news:

External Affairs Minister S Jaishankar expressed optimism for the ongoing India-EU Free Trade Agreement (FTA) negotiations, hoping for a prompt conclusion during the 2nd India Nordic Baltic Business Conclave.
Highlighting the promising India-Nordic Baltic relationship, Jaishankar emphasized natural synergies, proposing collaboration in addressing Global South challenges and advancing the Global Biofuels Alliance.
He noted opportunities for Nordic-Baltic countries in India, including expanded trade, joint R&D projects, and telemedicine.
Positive developments such as institutional frameworks for business cooperation and direct flights were highlighted.
Ministers from Nordic-Baltic countries emphasized collaboration in sustainability, digitalization, education, and innovation, viewing India as crucial for economic growth and identifying potential partnerships in fishing expertise and aquaculture.

Some more facts about The Nordic Baltic Eight (NB8)

NB8 is a regional framework consisting of the five Nordic countries i.e Denmark, Finland, Iceland, Norway, and Sweden and the three Baltic countries i.e Estonia, Latvia, and Lithuania.
It was established in 1992 to foster closer ties between the Nordic and Baltic countries.

12. UK Supreme Court Finds UK-Rwanda Asylum Scheme Unlawful

Subject: IR

Section: MSc

Context: UK Supreme Court Finds UK-Rwanda Asylum Scheme Unlawful

What is the Rwanda deal:

The Migration and Economic Development Partnership (MEDP) was unveiled by former Prime Minister Boris Johnson.
This initiative aims to establish a system for relocating asylum seekers, deemed inadmissible by the UK, to Rwanda, particularly those entering through irregular routes like the English Channel.
As outlined in the Memorandum of Understanding between the two nations, the UK will assess asylum applications and coordinate the safe transportation of individuals to Rwanda.
Upon arrival, Rwanda is obligated to provide accommodation, ensuring protection from mistreatment and refoulement.
The authority to recognize or deny refugee status lies solely with Rwanda.
Those not granted recognition will be repatriated to their country of origin.

Why did the U.K. choose Rwanda:

Rwanda provides three options for individuals expelled by the U.K.:
- Repatriation to their home country,
- Relocation to a third country,
- Settlement in Rwanda with proper housing, universal health insurance, and the right to work.
The U.K. covers accommodation and transit expenses.
Rwanda was not the initial choice; former Prime Minister Tony Blair unsuccessfully sought asylum arrangements with Tanzania.
The historical context draws parallels between the current situation and Britain’s colonial past, where specific migrant labor groups were relocated to certain territories.
This echoes past practices where the U.K. moved refugees to colonized regions under the pretext of development and economic growth, aligning with the Migration and Economic Development Partnership (MEDP) arrangement.

Why was it ruled unlawful:

The Supreme Court’s ruling hinged on two key issues.
Firstly, it questioned the Court of Appeal’s authority to intervene in the High Court’s decision.
The Supreme Court deemed the High Court’s decision flawed as it failed to assess the evidence of the risk of refoulement, emphasizing the U.K.’s responsibility, under the European Court, to safeguard refugees from refoulement and ensure asylum. The High Court, instead, placed trust in Rwanda’s expertise and assurances.
Secondly, the Supreme Court found credible evidence indicating that asylum seekers face a genuine risk of ill-treatment through refoulement.
Rwanda’s human rights track record and its failure to comply with assurances were cited as evidence supporting the real risk of refoulement.
Despite Rwanda’s standing as a significant U.K. partner, the court underscored periods of violence in Rwanda since 1994 and the critical assessment of its human rights record in influencing the ruling.

Some facts about Rwanda:

Republic of Rwanda, is a landlocked country in the Great Rift Valley of Central Africa, where the African Great Lakes region and Southeast Africa converge.
It is bordered by Uganda, Tanzania, Burundi, and the Democratic Republic of the Congo.
It is known as the “Land of a Thousand Hills” due to its hilly terrain.
Kigali is the capital of Rwanda.
Kinyarwanda is the official language
Rwanda has the highest percentage of women in parliament in the world.

13. CAG Murmu elected as vice chair of UN external auditor panel

Subject: IR

Section: Internal organisation

Context: CAG Murmu elected as vice chair of UN external auditor panel

More about the news:

Girish Chandra Murmu, the Comptroller and Auditor General of India, has been elected as the Vice-Chair of the UN Panel of External Auditors during the sixty-third session held at the UN headquarters in New York from 20-21 November 2023.
This appointment reflects India’s dedication to the highest standards of external audit and active involvement in shaping the global audit landscape.
The Panel, composed of heads of 12 Supreme Audit Institutions globally, oversees the external audit of the UN Secretariat, funds, programmes, and specialized agencies,conducting financial, performance, and compliance audits of UN entities.
The meeting also served as a platform for discussions on follow-up actions related to the Secretary-General’s response, with Murmu leading discussions on financial and management issues affecting UN organizations.

Some facts about UN Panel of External Auditors

The Panel of External Auditors of the United Nations, the Specialized Agencies and the International Atomic Energy Agency was established by the General Assembly Resolution 1438 (XIV) of 5 December 1959.
It is made up of:
- The members of the United Nations Board of Auditors;
- The external auditors of the Specialized Agencies of the United Nations and of the International Atomic Energy Agency.
The main objectives of the Panel are to further the coordination of the audits for which its members are responsible, and to exchange information on audit methods and findings.
The Panel may submit to the executive heads of the organizations audited any observations or recommendations it may wish to make in relation to the accounts and financial procedures of the organization concerned.
The executive heads of the participating organizations may also, through their auditors, submit requests to the Panel for its opinion or recommendation on any matter within its competence.

14. Banking system in India is experiencing a notable liquidity deficit

Subject: Economy

Section: External Sector

Context: The banking system in India is experiencing a notable liquidity deficit, reaching a five-year high on November 22.

Several factors contribute to this liquidity squeeze:

GST Outflows:
- Heavy outflows are attributed to goods and services tax (GST) payments, creating a significant impact on liquidity.
Bond Auctions:
- Weekly bond auctions have also contributed to the liquidity deficit.
RBI’s Incremental Cash Reserve Ratio (I-CRR):
- The central bank introduced Incremental Cash Reserve Ratio (I-CRR), which withdrew around Rs 1 lakh crore from the banking system.
Frictional Liquidity Movement:
- Frictional liquidity has been oscillating between a small surplus and a deficit of as much as Rs 2 lakh crore during the month.
Historical Context:
- Bloomberg data indicates that the current liquidity deficit is the highest since December 2018.
Kotak Mahindra Bank Report:
- A report from Kotak Mahindra Bank highlighted expectations of Rs 1.5 lakh crore outflows due to GST and Rs 65,000 crore due to auctions.
Previous Liquidity Dynamics:
- Before the introduction of I-CRR, liquidity had remained in surplus. Efforts were made to reduce the surplus, but temporary measures were not effective, leading to the implementation of I-CRR.
I-CRR Objective:
- I-CRR was introduced to address excess surplus liquidity caused by the withdrawal of Rs 2,000-denomination currency notes from circulation.
Timeline of I-CRR Implementation:
- The central bank phased out I-CRR, releasing 25 percent of the funds on September 9, another 25 percent on September 23, and the remaining 50 percent on October 7.
RBI’s Monetary Measures:
- The RBI, in conjunction with rate hikes, used tools to tighten liquidity, transitioning from an ultra-surplus situation post-Covid to a deficit. This strategy aims to contain inflation while protecting economic growth.
Expectations for Future Liquidity:
- The liquidity deficit is expected to ease in the coming days due to inflows from bond redemptions and month-end government spending.
Bond Redemption:
- Significant bond redemptions are expected, with bonds worth Rs 56,572.719 crore set to redeem on November 25 and Rs 32,500 crore on November 29.
Government Spending:
- Month-end government spending is anticipated to contribute to the improvement of the liquidity position.

Issues with Incremental Cash Reserve Ratio (I-CRR)

The Reserve Bank of India (RBI) has recently announced the phased discontinuation of the Incremental Cash Reserve Ratio (I-CRR), a measure implemented to manage excess liquidity in the banking system. The central bank plans to release the funds impounded under I-CRR in stages, ensuring a smooth transition and avoiding abrupt shocks to liquidity.

How Will the RBI Implement Discontinuation of I-CRR?

The discontinuation of I-CRR will be carried out in stages, with 25% of each bank’s impounded funds released in the first and second stages.
The remaining 50% of the balance will be released in the third stage.
This phased approach is designed to provide banks with sufficient liquidity to meet increased credit demand, particularly during the upcoming festival season.

What is I-CRR?

Background:

The RBI introduced the Incremental Cash Reserve Ratio (I-CRR) on August 10, 2023, following the demonetization of Rs 2000 notes and the announcement of monetary policy.
Banks were mandated to maintain an I-CRR of 10% on the increase in their Net Demand and Time Liabilities (NDTL) between May 19 and July 28.
The central bank stated its intention to review the measure in September 2023.

Purpose of Introducing I-CRR:

I-CRR was introduced as a temporary measure to manage excess liquidity in the banking system.
Factors contributing to surplus liquidity included the demonetization of Rs 2,000 banknotes, RBI’s surplus transfer to the government, increased government spending, and capital inflows.
The liquidity surge had the potential to disrupt price stability and financial stability, necessitating effective liquidity management.

Impact of I-CRR on Liquidity Conditions:

I-CRR was expected to absorb over Rs 1 lakh crore of excess liquidity from the banking system.
The measure temporarily turned the banking system’s liquidity into a deficit on August 21, 2023, exacerbated by outflows related to Goods and Services Tax (GST) and central bank intervention to stabilize the rupee.
However, liquidity conditions later returned to surplus.

What is the Cash Reserve Ratio (CRR)?

About:

The Cash Reserve Ratio (CRR) is the percentage of cash that banks are required to keep in reserves against their total deposits.
All scheduled commercial banks, including Small Finance Banks, Payments Banks, Co-operative Banks, and others, must maintain CRR with the RBI.
CRR funds are non-lendable and do not earn interest.

Need to Have Reserve Cash with the RBI:

Ensures security of a portion of the bank’s deposits in case of emergencies.
Provides readily available cash when customers request their deposits.
Helps in controlling inflation by reducing the amount of money available for lending during times of inflationary threats.

Why is RBI Using I-CRR in the Case of Demonetization?

The RBI chose to implement I-CRR during events like demonetization to address sudden liquidity influxes precisely and without affecting other aspects of monetary policy.
I-CRR can be implemented quickly, making it suitable for addressing liquidity surges during unique situations.
It is intended as a temporary measure, absorbing excess liquidity temporarily and phased out once the liquidity situation stabilizes.

Monetary Policy Instruments available with RBI:

Qualitative:

Moral Suasion: Persuasion and communication to influence banks’ behavior.
Direct Credit Controls: Regulating credit flow to specific sectors or industries.
Selective Credit Controls: Targeting specific types of loans to control demand in specific areas.

Quantitative:

Cash Reserve Ratio (CRR): Reserves against total deposits.
Repo Rate: Interest rate for short-term lending to banks.
Reverse Repo Rate: Interest rate for banks to park excess funds.
Bank Rate: Rate for long-term funds provided to banks.
Open Market Operations (OMOs): Buying or selling government securities.
Liquidity Adjustment Facility (LAF): Includes repo and reverse repo rates.
Marginal Standing Facility (MSF): Overnight funds borrowing against collateral.
Statutory Liquidity Ratio (SLR): Percentage of NDTL to be maintained in approved securities.

15. Gold Import in India

Subject: Economy

Section: External Sector

Amendments to Gold Import Policy: Boosting India-UAE Trade

Policy Adjustment:
- The Centre has made amendments to the gold import policy to enhance trade between India and the UAE.
Specific Changes by DGFT:
- The Directorate General of Foreign Trade (DGFT) has granted permission for gold import through India International Bullion Exchange IFSC Ltd (IIBX).
- Import can be done at a concessional duty rate under the Tariff Rate Quota (TRQ) provisions of the India-UAE Comprehensive Economic Partnership Agreement (CEPA).
CEPA Implementation:
- The CEPA between India and the UAE came into effect in May 2022.
Operational Details:
- Valid India-UAE TRQ holders, as notified by the International Financial Services Centres Authority (IFSCA), can import gold through IIBX.
- Physical delivery of the imported gold can be obtained through IFSCA registered vaults located in Special Economic Zones (SEZs).
- This move is in line with the guidelines prescribed by IFSCA.
Facilitating Trade:
- It is expected to benefit the Indian jewelry industry by reducing transaction costs and improving the ease of doing business.
Potential Market Growth:
- The Chairman anticipates that this policy change will contribute to creating a vibrant gold market in India.
- Furthermore, it is expected to boost the exports of value-added jewelry products.
Government and IFSCA Efforts Appreciated:
- Appreciates the efforts of the Government of India and the IFSCA in implementing this progressive policy measure.
CEPA Duty Concession:
- Under the India-UAE CEPA, domestic importers are entitled to a one percent duty concession on a specified quantity of gold under the TRQ provisions of the pact.

About World Gold Council (WGC)

The World Gold Council (WGC) serves as the market development organization for the global gold industry.

Mission and Scope:
- The WGC operates as the market development organization for the gold industry, covering various aspects from gold mining to investment.
Stimulating and Sustaining Demand:
- Its primary goal is to stimulate and sustain demand for gold, working across all segments of the industry.
Membership:
- The WGC is an association whose members include some of the world’s leading gold mining companies.
Responsible Mining Advocacy:
- It actively supports its members in adopting responsible mining practices.
- The WGC has played a role in developing the Conflict-Free Gold Standard, emphasizing ethical and sustainable mining practices.
Conflict-Free Gold Standard:
- The Conflict-Free Gold Standard is a set of guidelines designed to ensure that gold mining activities do not contribute to conflict, human rights abuses, or environmental degradation.
Global Presence:
- The World Gold Council is headquartered in the United Kingdom.
- It has a global presence with offices in key regions, including India, China, Singapore, Japan, and the United States.

About Directorate General of Foreign Trade (DGFT)

The Directorate General of Foreign Trade (DGFT) is a government agency in India that operates under the Ministry of Commerce and Industry. It plays a crucial role in the formulation and implementation of foreign trade policies.

Policy Formulation:
- DGFT is responsible for formulating and implementing the foreign trade policy of India.
Trade Facilitation:
- It works to facilitate and promote India’s international trade.
Licensing and Regulation:
- DGFT issues and regulates various licenses and authorizations related to foreign trade.
Export Promotion:
- The organization is involved in promoting exports and creating a conducive environment for exporters.
Import Regulation:
- DGFT regulates and controls imports to ensure that they comply with various trade policies and regulations.
Tariff and Trade Agreements:
- It is involved in matters related to tariffs and trade agreements.
Customs and Trade Facilitation:
- DGFT collaborates with customs authorities and other agencies to streamline and facilitate trade processes.
Economic Zones and Export Processing Zones:
- It plays a role in the establishment and regulation of Special Economic Zones (SEZs) and Export Processing Zones (EPZs).
Online Services:
- DGFT provides online services for various trade-related activities, including the issuance of licenses and permits.
Promotion of E-commerce in Exports:

With the growing importance of e-commerce in international trade, DGFT works towards promoting and regulating e-commerce activities related to exports.

About Comprehensive Economic Partnership Agreement (CEPA)

A Comprehensive Economic Partnership Agreement (CEPA) is a type of trade agreement between two or more countries that aims to facilitate comprehensive economic cooperation. These agreements go beyond traditional free trade agreements by not only reducing or eliminating tariffs on goods but also addressing various other aspects of economic collaboration.

About Tariff Rate Quota (TRQ)

Tariff Rate Quota (TRQ) is a trade policy tool that combines elements of both protectionism and liberalization. It involves a two-tiered tariff system designed to manage imports of a specific commodity within a predetermined quantity.

In summary, a Tariff Rate Quota is a trade policy mechanism that allows a certain quantity of a commodity to be imported at a lower tariff rate, while imports beyond that quantity face a higher tariff.

This tool enables countries to manage trade in specific sectors, providing a degree of protection to domestic industries while allowing for controlled international market access.

About India International Bullion Exchange IFSC Limited (IIBX)

India International Bullion Exchange IFSC Limited (IIBX) is a significant development in India’s financial landscape, particularly in the domain of bullion trading.

Launch and Inauguration:
- IIBX was inaugurated by the Honourable Prime Minister of India, Shri Narendra Modi, on July 29, 2022.
Promoters:
- IIBX is promoted by leading market infrastructure institutions in India, including NSE, INDIA INX (a subsidiary of BSE), NSDL, CDSL, and MCX.
Location:
- It is established at the Gujarat International Finance Tec-City (GIFT City), which is an International Financial Services Centre (IFSC) in Gandhinagar, Gujarat.
Regulation:
- IIBX is regulated by the International Financial Services Centres Authority (IFSCA).
Objective:
- The primary objective of IIBX is to provide a platform for importing bullion into India and to create a world-class bullion exchange ecosystem. This includes facilitating bullion trading, promoting investment in bullion financial products, and offering vaulting facilities within IFSCs.

Direct Import for Indian Jewellers:
- For the first time, Indian resident jewellers (Qualified Jewellers – QJ) have the opportunity to import bullion directly into India through IIBX by being a Client or a Limited Purpose Trading Member.
Bullion Trading Mechanism:
- Bullion traded on IIBX is kept in vaults authorized by IFSCA and empanelled by India International Depository IFSC Limited (IIDI). Trading is done in the form of Bullion Depository Receipts (BDRs), and a Demat account with IIDI is required for this purpose.

About International Financial Services Centres Authority (IFSCA)

The International Financial Services Centres Authority (IFSCA) was established on April 27, 2020, under the International Financial Services Centres Authority Act, 2019.

Establishment Date:
- IFSCA was established on April 27, 2020.
Legislation:
- It was established under the International Financial Services Centres Authority Act, 2019.
Headquarters:
- IFSCA is headquartered at GIFT City, Gandhinagar, Gujarat.
Unified Authority:
- IFSCA serves as a unified authority for the development and regulation of financial products, financial services, and financial institutions in the International Financial Services Centre (IFSC) in India.
GIFT IFSC:
- The GIFT IFSC (Gujarat International Finance Tec-City International Financial Services Centre) is the maiden international financial services centre in India.
Previous Regulatory Framework:
- Before the establishment of IFSCA, domestic financial regulators such as RBI (Reserve Bank of India), SEBI (Securities and Exchange Board of India), PFRDA (Pension Fund Regulatory and Development Authority), and IRDAI (Insurance Regulatory and Development Authority of India) regulated business activities in IFSC.
Inter-Regulatory Coordination:
- Given the dynamic nature of business in IFSCs and the need for coordination within the financial sector, IFSCA was established as a unified regulator with a holistic vision.
Global Connectivity:
- IFSCA aims to develop a strong global connect and focus on the needs of the Indian economy. It also serves as an international financial platform for the entire region and the global economy.
Promoting Ease of Doing Business:
- One of the main objectives of IFSCA is to create a regulatory environment that facilitates ease of doing business in IFSC.

16. Haryana’s employment reservation law

Subject: Polity

Section: Constitution

Context:

The Punjab and Haryana High Court quashed a law enacted by the Haryana government in 2021 that guaranteed 75% reservation to locals in private sector jobs in Haryana.

Historical Background of the Haryana reservation:

Origin

In November 2020, the Haryana Assembly passed the Haryana State Employment of Local Candidates Bill.

Obligation for the employers:

It made it mandatory for employers in the State to reserve 75% of jobs paying a monthly salary of less than ₹30,000 (originally ₹50,000) for local residents of the State.
The law is applicable to all private entities in the State including companies, trusts, societies, partnerships, and limited liability partnerships.
It also covers any person employing 10 or more persons for the purpose of manufacturing or providing any service.

Local candidate’s definition:

A ‘local candidate’ has been defined under the law as anyone domiciled in Haryana for the past five years.
Such candidates will have to mandatorily register themselves on a designated portal in order to avail benefits.
Employers have to make recruitments only through this portal.

Exemption:

Companies can seek an exemption if they do not find local candidates of a desired skill or qualification, but this claim can be rejected by government officials if they doubt its legitimacy.

Violations and penalty:

Employers found to be violating the Act are liable to a fine between ₹10,000 and ₹2 lakh.

Challenges to the law:

Violation of Article 19:

Several industry associations challenged the validity of the law on the ground that it violates Article 19 of the Constitution.
Article 19 guarantees the right to freedom, including to reside and settle in any part of the Indian territory and practise any profession, business or trade.

Violation of Article 14 and Article 15:

It is also contended that the law was an infringement of Article 14 (equality before the law) and Article 15, which prohibits discrimination on various grounds such as religion, race, caste, sex or place of birth.

Discrimination between residents and non residents:

The court was also apprised that the reservation creates a wedge between persons domiciled in different States and is contrary to the concept of common citizenship envisaged in the Constitution.

State Government’s View:

The State government contended that the law intends to protect the right to livelihood of people domiciled in the State, and that the enactment was rooted in the rising unemployment in Haryana.
It was also asserted that the government is empowered to create such reservations under Article 16(4) of the Constitution.
Article 16(4) stipulates that the right to equality in public employment does not prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State.

Have other States enacted such laws?

States such as Maharashtra, Karnataka, Andhra Pradesh and Madhya Pradesh have enacted laws providing reservations for their local residents in the private sector.

Why did the High Court quash it?

Violation of Article 19(1)(g):

The court ruled that the law was unconstitutional to the extent that a person’s right to carry on occupation, trade, or business under Article 19(1)(g) of the Constitution was being impaired.

Discrimination:

It also highlighted that the law discriminates against individuals who do not belong to a certain State by putting up artificial walls throughout the country.

Parliament’s power is supreme:

Placing reliance on Article 35 of the Constitution, the court outlined that the provision bars the State legislature from legislating on matters that fall within the purview of Article 16(3) of the Constitution (equality of opportunity in matters of public employment) since only the Parliament can pass laws on such subjects.

Return of the Inspector Raj:

The court said that these restrictions amounted to ‘Inspector Raj’ that furthered State control over private employers.
Section 6 of the Act requires employers to submit quarterly reports with details of local candidates employed and Section 8, under which officers could call for documents to ensure the law was being implemented.

17. Bihar Cabinet nod to seek special status for State

Subject: Polity

Section: Federalism

Context:

The Bihar Cabinet passed a resolution on Wednesday requesting the Centre to grant special category status to the State, days after CM Nitish Kumar threatened to launch a movement if the demand remains unfulfilled.

What is Special Category Status (SCS)?

SCS is a classification given by the Centre to assist development of states that face geographical and socio-economic disadvantages.
The Constitution does not make a provision for SCS and this classification was later done on the recommendations of the Fifth Finance Commission in 1969.
Status was first accorded to Jammu and Kashmir, Assam and Nagaland in 1969.
SCS for plan assistance was granted in the past by the National Development Council of the erstwhile Planning Commission.
Eleven States including Assam, Nagaland, Himachal Pradesh, Manipur, Meghalaya, Sikkim, Tripura, Arunachal Pradesh, Mizoram, Uttarakhand and Telangana have been accorded the special category state status.
Telangana, the newest State of India, was accorded the status as it was carved out of another state Andhra Pradesh.
The 14th Finance Commission has done away with the ‘special category status’ for states, except for the Northeastern and three hill states.
It suggested to fill the resource gap of such states through tax devolution by increasing it to 42% from 32%.
SCS is different from Special status which imparts enhanced legislative and political rights, while SCS deals with only economic and financial aspects.
For instance, J&K used to have Special status before Article 370 was repealed.

Parameters (Based on Gadgil Formula):

Hilly Terrain;
Low Population Density and/or Sizeable Share of Tribal Population;
Strategic Location along Borders with Neighbouring Countries;
Economic and Infrastructure Backwardness; and
Nonviable Nature of State finances.

What are the Benefits of Special Category Status?

The Centre pays 90% of the funds required in a centrally-sponsored scheme to special category status states as against 60% or 75% in case of other states, while the remaining funds are provided by the state governments.
Unspent money in a financial year does not lapse and is carried forward.
Significant concessions are provided to these states in excise and customs duties, income tax and corporate tax.
30% of the Centre’s Gross Budget goes to Special Category states.

What are the Concerns regarding Special Category Status?

It causes Increased burden on Central Finances.
Spillover Effect: Giving special status to a state leads to demands from other states too. For instance, demands from Andhra Pradesh, Odisha and Bihar.

18. Harshness of amendments made to PMLA in 2019 shocking, says Sibal

Subject: Polity

Section: Constitutions

Context:

Mr. Sibal raised concern that the amendments made to the anti-money laundering law in 2019 had armed the Enforcement Directorate (ED) with unbridled powers of summons, arrest, raids and attachment of property and made bail nearly impossible while shifting the burden of proof of innocence onto the accused rather than the prosecution.

What is the Prevention of Money Laundering Act (PMLA), 2002?

Money Laundering Definition:

Money laundering is the process of making large amounts of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source.

About Law:

It is a criminal law enacted to prevent money laundering and to provide for confiscation of property derived from, or involved in, money-laundering and related matters.
It forms the core of the legal framework put in place by India to combat Money Laundering.
The provisions of this act are applicable to all financial institutions, banks (Including RBI), mutual funds, insurance companies, and their financial intermediaries.

Recent Amendments:

Clarification about the Position of Proceeds of Crime: Proceeds of the Crime not only includes the property derived from scheduled offense but would also include any other property derived or obtained indulging into any criminal activity relate-able or similar to the scheduled offense.
Money Laundering Redefined: Money Laundering was not an independent crime rather depended on another crime, known as the predicate offense or scheduled offense.
The amendment seeks to treat money laundering as a stand-alone crime.
Under Section 3 of PMLA, the person shall be accused of money laundering if in any manner that person is directly or indirectly involved in the proceeds of the crime.
Continuing Nature of Offense: This amendment further mentioned that the person will be considered to be involved in the offense of money laundering till the time that person is getting the fruits of activities related to money laundering as this offense is of a continuing nature.

What is the Enforcement Directorate?

The Directorate of Enforcement or the ED is a multi-disciplinary organization mandated with investigation of economic crimes and violations of foreign exchange laws.
The origin of this Directorate goes back to 1st May, 1956, when an ‘Enforcement Unit’ was formed in the Department of Economic Affairs for handling Exchange Control Laws violations under Foreign Exchange Regulation Act, 1947 (FERA ’47).
With the onset of the process of economic liberalization, FERA, 1973, which was a regulatory law, was repealed and in its place, Foreign Exchange Management Act, 1999 (FEMA) came into operation.
Recently, with the increase in the number of cases relating to economic offenders taking shelter in foreign countries, the Government has passed the Fugitive Economic Offenders Act, 2018 (FEOA) and ED is entrusted with its enforcement.

Powers of ED:

The ED carries out search (property) and seizure (money/documents) after it has decided that the money has been laundered, under Section 16 (power of survey) and Section 17 (search and seizure) of the PMLA.
On the basis of that, the authorities decide if arrest is needed as per Section 19 (power of arrest).
Under Section 50 of the PMLA, the ED can also directly carry out search and seizure without calling the person for questioning.
It is not necessary to summon the person first and then start with the search and seizure.
If the person is arrested, the ED gets 60 days to file the prosecution complaint (chargesheet) as the punishment under PMLA doesn’t go beyond seven years.
If no one is arrested and only the property is attached, then the prosecution complaint along with attachment order is to be submitted before the adjudicating authority within 60 days.

Contentious Provision:

Allegations of Violation of Article 20(3): PMLA’s provisions on admissibility of statements made by the accused as evidence, and the stringent bail provisions have been the most contentious.
It is the only Act in the country in which a statement recorded before an investigating officer is admissible in court as evidence. Other laws that contained such provisions, such as TADA and POTA, have long been repealed.
Violation of Article 22: ED could summon a person without telling him whether he was being called as a witness or an accused.
The provision for bail stipulates that a magistrate will not grant bail to an accused unless he is convinced that prima facie no case is made out. This provision was struck down by the Supreme Court on the ground that it presupposed the trial at the stage of bail itself.

What are the Recent Controversies Regarding PMLA and the Powers and Efficiency of ED?

The PMLA formulated in 2002 has undergone various critical changes from time to time in order to give itself more strength to deal with the offence of money laundering.
However, on account of these amendments, several petitions have been filed across the country that question the almost blanket powers assigned to the ED under PMLA for searching, seizing, investigating, and attaching assets considered to be proceeds of crimes.
Moreover, in a recent hearing, the SC upheld the constitutional validity of the PMLA and ED’s power to hold inquiries, arrest people and attach property (under Section 5 of the Act).
The Court stated that Section 5 provides for a balancing arrangement to secure the interests of the person and also ensures that the proceeds of crime remain available to be dealt with in the manner provided by the 2002 Act.
Validation of Article 20(3): Judiciary rejected the argument that ED authorities are police officers and, hence, a statement recorded by them (Section 50 of the Act) would be hit by Article 20(3) of the Indian Constitution which says no person accused of an offence shall be compelled to be a witness against himself (self incrimination).
Additionally, the conviction rate of the ED under PMLA is very low, despite thousands of cases registered and people arrested.

19. Ethics and epistemology of ancient Indian Materialists- Indian Philosophies

Subject: History

Section: Art and culture

Introduction

The Indian philosophical tradition was born of the same principle by which all philosophical traditions in the world were developed. By the observation, and contemplation of the world around them.
Through these observations, various schools of philosophy developed their own fundamental ideas of the world, and set forth their ontological, epistemological, and axiological notions.

Background of Indian Philosophy

Philosophy arose in India as an enquiry into the mystery of life and existence.
Indian Philosophy refers to several traditions of philosophical thought that originated in the Indian subcontinent.
Over centuries, India’s intellectual exploration of truth has come to be represented by six systems of philosophy. These are known as Vaishesika, Nyaya, Samkhya, Yoga, Purva Mimansa and Vedanta or Uttara Mimansa.
These six systems of philosophy are said to have been founded by sages Konada, Gotama, Kapila, Patanjali, Jaimini and Vyasa, respectively. These philosophies still guide scholarly discourse in the country.
The six systems of philosophy were developed over many generations with contributions made by individual thinkers. However, today, we find an underlying harmony in their understanding of truth, although they seem distinct from each other.

Orthodox Schools of Indian Philosophy

Orthodox (astika) schools, originally called sanatana dharma, are collectively referred to as Hinduism in modern times. The ancient Vedas are their source and scriptural authority. Hinduism consists of six systems of philosophy & theology.

Samkhya (Kapila):

Samkhya is the oldest of the orthodox philosophical systems, and it postulates that everything in reality stems from purusha (self, soul or mind) and prakriti (matter, creative agency, energy).
Purush cannot be modified or changed while prakriti brings change in all objects.

Yoga (Patanjali):

Yoga literally means the union of two principal entities. Yogic techniques control body, mind & sense organs, thus considered as a means of achieving freedom or mukti.
This freedom could be attained by practising self-control (yama), observation of rules (niyama), fixed postures (asana), breath control (pranayama), choosing an object (pratyahara) and fixing the mind (dharna), concentrating on the chosen object (dhyana) and complete dissolution of self, merging the mind and the object (Samadhi).
Yoga admits the existence of God as a teacher and guide.

Nyaya (Gautama Muni):

Nyaya Philosophy states that nothing is acceptable unless it is in accordance with reason and experience (scientific approach). Nyaya is considered as a technique of logical thinking.
Nyaya Sutras say that there are four means of attaining valid knowledge: perception, inference, comparison, and verbal testimony.

Vaisheshika (Kanada):

The basis of the school’s philosophy is that all objects in the physical universe are reducible to a finite number of atoms and Brahman is regarded as the fundamental force that causes consciousness in these atoms.
Vaisheshika system is considered as the realistic and objective philosophy of universe.
The reality according to this philosophy has many bases or categories which are substance, attribute, action, genus, distinct quality and inherence.
Vaisheshika thinkers believe that all objects of the universe are composed of five elements–earth, water, air, fire and ether.
They believe that God is the guiding principle. The living beings were rewarded or punished according to the law of karma, based on actions of merit and demerit.
The Vaisheshika and Nyaya schools eventually merged because of their closely related metaphysical theories (Vaisheshika only accepted perception and inference as sources of valid knowledge).

Purva Mimamsa (Jaimini):

This philosophy encompasses the Nyaya-vaisheshika systems and emphasizes the concept of valid knowledge. According to Purva Mimamsa, Vedas are eternal and possess all knowledge.
According to Mimamsa philosophy Vedas are eternal and possess all knowledge, and religion means the fulfilment of duties prescribed by the Vedas.
It says that the essence of the Vedas is dharma. By the execution of dharma one earns merit which leads one to heaven after death.

Vedanta:

The Vedanta, or Uttara Mimamsa, school concentrates on the philosophical teachings of the Upanishads (mystic or spiritual contemplations within the Vedas), rather than the Brahmanas (instructions for ritual and sacrifice). The school separated into six sub-schools, each interpreting the texts in its own way and producing its own series of sub-commentaries:
Advaita (Adi Shankara): It states that both the individual self (Atman) and Brahman are the same, and knowing this difference causes liberation.
Visishtadvaita (Ramanuja): It believes that all diversity is subsumed to a unified whole.
Dvaita (Madhvacharya): It considers Brahman and Atman as two different entities, and Bhakti as the route to eternal salvation.
Dvaitadvaita (Nimbarka): It states that the Brahman is the highest reality, the controller of all.
Shuddhadvaita (Vallabhacharya): It states that both God and the individual self are the same, and not different.
Achintya BhedaAbheda (Chaitanya Mahaprabhu): It emphasizes that the individual self (Jīvatman) is both different and not different from Brahman.

Unorthodox Schools of Indian Philosophy

Schools that do not accept the authority of Vedas are by definition unorthodox (nastika) systems. The following schools belong to heterodox schools of Indian Philosophy.

Charvaka (Brihaspati):

Charvaka is a materialistic, sceptical and atheistic school of thought.
According to Charvaka there is no other world. Hence, death is the end of humans & pleasure is the ultimate object in life.
It is also known as the Lokayata Philosophy-the philosophy of masses.

Buddhist philosophy (Siddhartha Gautama):

Buddhism is a non-theistic philosophy whose tenets are not especially concerned with the existence or nonexistence of God. Buddha considered the world as full of misery and considered a man’s duty to seek liberation from this painful world. He strongly criticized blind faith in the traditional scriptures like the Vedas

Jain philosophy (Mahavira):

A basic principle is anekantavada, the idea that reality is perceived differently from different points of view, and that no single point of view is completely true.
According to Jainism, only the Kevalins, those who have infinite knowledge, can know the true answer, and that all others would only know a part of the answer.