Daily Prelims Notes 23 October 2023

Daily Prelims Notes

23 October 2023

Table Of Contents

1. The Bedouin Arabs in the Israeli army
2. Vienna Convention on Diplomatic Relations
3. Two experiments conducted by ISRO paved way for Gaganyaan test mission
4. Tej now extremely severe cyclone over the Arabian Sea; yellow alert issued for eight districts in Kerala
5. Sensitive ecosystem in Cauvery’s birthplace cries for attention amid deficit rainfall
6. Months after community added to ST list, Himachal asks Delhi to define Hattees
7. How bat genomes provide insights into immunity and cancer
8. Fluorescence: making animals glow
9. RBI opens up its dated securities to help Russia park its Rupee surplus
10. New Report Calls for Global Minimum Tax on Billionaires

1. The Bedouin Arabs in the Israeli army

Subject: IR

Section: Places in news

Who are the Bedouin Arabs in the Israeli army:

• The Bedouins are a nomadic Muslim Arab people who live mainly in the Negev desert of southern Israel.
• They have traditionally been pastoralists with no powerful or exclusive national affiliation, who would, until about a century and a half ago, wander the area between Saudi Arabia and the Sinai with their livestock.

How did the Bedouins come to join the Israel Defence Forces (IDF):

• Bedouin transitioned from nomadic to settled life during Ottoman rule.
• They aided early Jewish settlers and provided intelligence in the 1948-49 Arab-Israeli war.
• In the 1950s, many Bedouin were recognized as Israeli citizens, and settlements were built for them.
• Bedouin continued to serve in the IDF, mainly in scouting roles.
• Specialized Bedouin search and rescue units were created in 2003.
• A memorial was inaugurated in 1993 to honor Bedouin soldiers, and the Garden of the Broken Heart is dedicated to those with unknown burial places.

Is it compulsory for the Bedouin to train with the IDF:

• No. Army training is compulsory only for the Jewish population of Israel. However, many Bedouin youth also volunteer. 

To what extent are the Bedouin integrated in Israeli society:

• Many Bedouin serving in desert reconnaissance units come from northern Israel, where they have coexisted with Jewish and Arab communities since the 1950s.
• Some Bedouin who underwent army conscription found it helped them appreciate Jewish culture, despite initial language challenges.
• The Bedouin population in Israel is around 210,000, with a significant presence in the Negev desert.
• In 2020, Israel appointed its first Bedouin ambassador, and the first Bedouin high-tech company, Sadel Technologies, was founded by a Bedouin.
• In 2022, the Israeli government launched Operation Negev Shield to promote Bedouin community integration through educational programs and visits by IDF officers to schools in Bedouin communities.

2. Vienna Convention on Diplomatic Relations

Subject: IR

Section: International conventions

What is Vienna Convention on Diplomatic Relations:

• The Vienna Convention on Diplomatic Relations was adopted in 1961 by the United Nations Conference on Diplomatic Intercourse and Immunities held in Vienna, Austria.
• It came into force on April 24, 1964 and is nearly universally ratified, with Palau and South Sudan being the exceptions.
• It provides a complete framework for the establishment, maintenance and termination of diplomatic relations on a basis of consent between independent sovereign States.
• The Vienna Convention applies not only to diplomats but also to both military and civilian personnel from the military departments, who are present in the country under the authority of the chief of the diplomatic mission.
• It explains the functions of a diplomatic mission, including representing the State, protecting the State, promoting friendly relations between the sending and receiving State.
• The security of any High Commission or Embassy is the responsibility of the host nation.
• While diplomatic missions can also employ their own security, ultimately, the host nation is accountable for security.
• The Convention codifies the longstanding custom of diplomatic immunity.
• Under this, the diplomatic missions are granted privileges that enable diplomats to perform their functions without fear of coercion or harassment by the host country.

What is Article 11.1 of the Vienna Convention on Diplomatic Relations:

• It deals with the size of the diplomatic mission
• In the absence of specific agreement as to the size of the mission, the receiving State may require that the size of a mission be kept within limits considered by it to be reasonable and normal,having regard to circumstances and conditions in the receiving State and to the needs of the particular mission.

What are the other key provisions of Vienna Convention on Diplomatic Relations:

• As per the Vienna Convention, a “receiving State” refers to the host nation where a diplomatic mission is located.
• Article 9: The host State can prohibit a member of the Sending state (persona non grata) from entering or remaining in the host State. The host State can expel the envoys.This person could be the head of mission, member of the diplomatic staff, or any other member of the mission.
• Article 22: It confirms the inviolability of mission premises.
  •  It bars the enforcement officers of the host State from searching the premises of the diplomatic mission and seizing its property or documents.
  •  Diplomatic bags may not be opened or detained.
  • The host State has a special duty to protect the premises of the diplomatic mission against intrusion, damage, disturbance of the peace or infringement of dignity.
• Article 27: The host State shall permit and protect free communication of the mission for official purposes.
• Article 29: Diplomatic members are not subject to any form of detention or arrest.
• Article 31: Diplomats are exempt from the criminal, civil and administrative jurisdiction of the host State.It is possible for the diplomat’s home country to waive immunity but this can happen only when the individual has committed a ‘serious crime’.
• Article 34: Sets out the tax exemption accorded to diplomats along with detailed exceptions in respect of matters unrelated to their official duties or to ordinary life in the receiving State.
• Article 36 :Provides for exemption from customs duties on diplomatic imports throughout a diplomat’s posting.
• Article 38 :  It bars from all privileges and immunities, except for immunity for their official acts, nationals, and permanent residents of the receiving State. 

India and Vienna Convention on Diplomatic Relations.

• India acceded to the Vienna Convention on Diplomatic Relations in 1965.
• India has enacted the Diplomatic Relations (Vienna Convention) Act, 1972 to give effect to the Vienna Convention..

3. Two experiments conducted by ISRO paved way for Gaganyaan test mission

Subject: Science and Tech

Section: Space technology

In the news:  Test Vehicle Abort Mission (TV-D1) flight was successfully tested by ISRO.

Context:

The Gaganyaan mission, which aims to place humans in space, had its first test flight completed by the Indian Space Research Organisation (ISRO) to demonstrate a crew escape system. The flight was delayed twice due to inclement weather, and on Saturday, it was temporarily postponed just five seconds before the scheduled lift-off due to a glitch in the system.

What is the Gaganyaan Mission?

• The Gaganyaan Mission is a project headed by the Indian Space Research Organisation (ISRO). Three Indian astronauts—one of them a woman—are to spend three days in space as part of this mission.
•  For five to seven days, the astronauts will orbit the Earth at a height of 300 to 400 kilometers.
•  India will become the fourth country to launch a manned space mission as a result of the program.

The Gaganyaan Mission seeks to: 

• Construct a spacecraft that can support human habitation
• Show that humans are capable of space travel.
• Emergency Landing in Indian sea waters
• The mission will take place in 2025.
• ISRO carried out a test flight for the Gaganyaan Mission on October 21, 2023.

Components of Gaganyaan Rocket: GSLV Mk-III

1. Crew Module

• A crew module and service module.
• The crew members will be selected by the IAF and ISR.
• Crew will perform micro-gravity and other scientific experiments for a week.

2. Crew Module Atmospheric Re-entry technology – CARE

• Satellites that are launched for communication or remote sensing are meant to remain in space.
• However, a manned spacecraft needs to come back.
• While reentering Earth’s atmosphere, the spacecraft needs to withstand very high temperatures created due to friction.
• A prior critical experiment was carried out in 2014 along with GSLV MK-III when the CARE (Crew Module Atmospheric Re-entry Experiment) capsule successfully demonstrated that it could survive atmospheric re-entry.

3. Crew Escape System – PAT

• The Crew Escape System is an emergency accident avoidance measure.
• In July 2018, ISRO completed the first successful flight ‘pad abort test’ or Crew Escape System.
• Environmental Control & Life Support System ECLSS
• ECLSS will Maintain steady cabin pressure and air composition
• Remove carbon dioxide and other harmful gases
• Control temperature and humidity
• Manage parameters like fire detection and suppression.

4. Vyommitra

• ISRO’s humanoid robot that will test-flight Gangayaan.
• It is a Gynoid (female humanoid).
• Vyom Mitra was built by ISRO’s Inertial Systems Unit, Thiruvananthapuram.

What is the Test Vehicle Abort Mission 1 (TV-D1)?

• The Indian Space Research Organization (ISRO) carried out the Test Vehicle Abort Mission 1 (TV-D1) test mission to confirm the Crew Escape System’s (CES) operation. This test’s main goal was to mimic an abort scenario during a space launch and show that the crew escape system can securely remove the crew module from the launch vehicle in an emergency.

What are the characteristics of Test Vehicle Abort Mission 1?

• Objective: TV-D1’s main goal was to evaluate the effectiveness of the Crew Escape System (CES). The CES is a vital safety element intended to protect astronauts in the case of a space launch emergency, such as a malfunctioning or failed rocket.
• Abort Simulation: TV-D1 acted out an abort scenario in which the crew escape system was put to the test in a controlled environment to make sure it could successfully extract the crew module from the launch vehicle and bring it back to Earth without incident.
• Emergency Scenarios: It’s possible that the system experienced a variety of emergencies during the test, such as an engine failure or other anomalies that would have needed the crew to safely evacuate the launch vehicle.
• Validation: TV-D1’s accomplishment indicated that the crew escape system—a crucial part of the Gaganyaan program, which aims to launch humans into space—could function as planned.
• Data Gathering: The test gathered important information about how the crew escape system operates, such as the order of operations, timing, and safety precautions in place.
• Human Spaceflight Preparation: As part of the Gaganyaan program, TV-D1 was a major step toward preparing for upcoming human space missions. It contributes to the astronauts’ safety and security during their space travels.

What does the success of the mission signify for the ISRO?

• Validation of the Crew Escape System: TV-D1’s main objective was to test and confirm the Crew Escape System’s (CES) operation. The mission’s accomplishment suggests that the Crew Escape System (CES) can fulfil its vital responsibility of protecting astronauts in the event of an emergency by rapidly severing the crew module from the launch vehicle. This is a major advancement in the safety of human spaceflight.
• Milestone for Gaganyaan: TV-D1 was a significant milestone in the Gaganyaan program, which aspires to launch humans into space. This test flight’s accomplishment shows that ISRO is making real headway in creating the equipment and technologies required for upcoming human spaceflights.
• Capability Demonstration: The successful completion of TV-D1 by ISRO demonstrates the technical prowess and knowledge of the organization in organizing, carrying out, and resolving irregularities during a challenging space mission. It proves that ISRO is prepared to manage manned space flights shortly.
• International Recognition: ISRO’s standing in the space exploration industry is enhanced by the successful crew escape mechanism test. It suggests that ISRO is a dependable and capable collaborator for space cooperation.
• Safety Assurance: TV-D1’s accomplishments are a big step toward guaranteeing the safety of astronauts taking part in the next human space missions. The effectiveness of the CES in real-world settings is crucial to mission safety, and its accomplishment increases trust in the Gaganyaan program’s safety protocols.

For details of Gaganyaan mission: https://optimizeias.com/isro-plans-gaganyaan-unmanned-flight-tests-gears-for-abort-mission/

Source: TH

4. Tej now extremely severe cyclone over the Arabian Sea; yellow alert issued for eight districts in Kerala

Subject: Geography

Section: Physical geography

In the news: The very severe cyclone, Tej, that formed over the Arabian Sea intensified into an extremely severe cyclone.

About Tej cyclone:

• The cyclone, which is moving north-westwards, is likely to cross the Yemen coast close to Al Ghaidah as a very severe cyclonic storm with wind speed of 125-135 kmph gusting to 150 kmph.
• Regions impacted: Socotra and Al Ghaidah (Yemen), Salalah (Oman) in the Arabian sea region.
• Impact in India: Kerala is likely to receive isolated heavy rainfall triggered by the weather systems over the Arabian Sea and the Bay of Bengal.

How are Cyclones Classified?

• Cyclones are classified on the basis of wind speed by the Indian Meteorological Department (IMD):
  • Depression: Wind speeds of between 31–49 km/h
  • Deep Depression: Between 50-61 km/h
  • Cyclonic Storm: Between 62–88 km/h
  • Severe Cyclonic Storm: Between 89-117 Km/h
  • Very Severe Cyclonic Storm: Between 118-166 Km/h
  • Extremely Severe Cyclonic Storm: Between 166-221 Km/h
  • Super Cyclonic Storm: Above 222 Km/h

Colour- Coded Weather Warning

• Issued by the IMD.
• Objective is to alert people ahead of severe or hazardous weather which has the potential to cause damage, widespread disruption or danger to life.
• Warnings are updated daily.
• The IMD uses 4 colour codes:

1. Green (All is well): No advisory is issued.
2. Yellow (Be Aware): Yellow indicates severely bad weather spanning across several days. It also suggests that the weather could change for the worse, causing disruption in day-to-day activities.
3. Orange/Amber (Be prepared): The orange alert is issued as a warning of extremely bad weather with the potential of disruption in commute with road and rail closures, and interruption of power supply.
4. Red (Take Action): When the extremely bad weather conditions are certainly going to disrupt travel and power and have significant risk to life, the red alert is issued.

• These alerts are universal in nature and are also issued during floods, depending on the amount of water rising above land/in a river as a result of torrential rainfall.

Source: TH

5. Sensitive ecosystem in Cauvery’s birthplace cries for attention amid deficit rainfall

Subject: Geography

Section: Physical geography

In the news: Deficit rainfall and drought led to reduced storage in Karnataka’s Cauvery basin reservoirs.

Kodagu- Place of origin of Cauvery river:

• Kodagu, which is the main catchment area as well as place of origin of the Cauvery river, is under stress due to the sensitive ecosystem.
• Located in the Western Ghats region of karnataka.
• The Krishnaraja Sagar (KRS) reservoir is located downstream the cauvery river.

Rainfed cultivation of paddy in Kodagu:

• There is an age-old practice of cultivating paddy in the valleys with the help of rainwater.
• These paddy fields act like small ponds or a micro reservoir system that sustains the ecosystem of Kodagu and the Cauvery river.
• Now, the farmers are shunning paddy mainly because it is not remunerative. The high labour cost, commercialisation of crops and man-animal conflict near the Nagarahole National Park are also forcing them to shun paddy cultivation.
• The government is reviving rain-fed paddy cultivation by providing an incentive of ₹10,000 an acre.

Implication of rainfall deficit at Kodagu:

• Drinking water needs of towns and cities in the basin, including Bengaluru will be impacted.
• Inter-State sharing of Cauvery water may be hampered.
• Deficit in storage of reservoirs.
• Decline in rain-fed paddy cultivation in Kodagu.

Cauvery river:

• Flows through Tamilnadu and Karnataka state.
• Originate at Talakaveri in the Brahmagiri range in the Western Ghats, Kodagu district of the state of Karnataka.
• It reaches the sea in Poompuhar, in Mayiladuthurai district. It is the third largest river – after Godavari and Krishna – in southern India, and the largest in the state of Tamil Nadu.
• In ancient Tamil literature it was also called Ponni river.
• Tributaries:
  • Left- Harangi, Hemavati, Shimsha, Arkavati, Sarabanga, Thirumanimutharu
  • Right- Lakshmana Tirtha, Kabini, Bhavani, Noyyal, Amaravati, Moyar

Source: TH

6. Months after community added to ST list, Himachal asks Delhi to define Hattees

Subject: Geography

Section: Human geography

Context:

• There is confusion in the Tribal Development Department (TDDD) about who the “Hattees” actually are and whether people already classified as Scheduled Castes should be included as members of this community.
• TDD noted that while the Bill introduced in Parliament excluded Scheduled Castes (SC), the entry added to the ST list just says “Hattee of Trans-Giri area of Sirmour District”.

Details:

• Few months ago, Hattee community of Himachal Pradesh’s Trans-Giri area (Sirmaur district) was included in the Scheduled Tribes (ST) list of the State.  The only other ST in the region are the Gujjars.
• According to past observations of the Office of the Registrar-General of India (RGI), people who are referred to as Hattees in the region also include those from communities such as Koli, Badhai, Lohar, Dhaki, Dom, Chamar, which are already designated as SCs.

Hatti Tribe (Himachal Pradesh):

• The Hattis are a close-knit community who got their name from their tradition of selling homegrown vegetables, crops, meat and wool etc. at small markets called ‘haat’ in towns.
• The Hattee community has been demanding their inclusion in the ST list since 1967 because they share ethnic ties with the people of the Jaunsar-Bawar region, who were declared as ST in Uttarakhand.
• Their demand for tribal status gained strength because of resolutions passed at various maha Khumblis over the years.
• Earlier in 2017, Registrar General of India (RGI) has rejected the proposal of hattees to be included in the ST list based on information that “Hattee” was a term used to refer to the inhabitants of Trans-Giri area and that this included people from “upper status social groups” like the Khash-Khanet (Rajput) and Bhat (Brahmin) castes and people from Scheduled Caste communities.

What is the Process of Inclusion in the ST List?

• The process to include tribes in the ST list begins with the recommendation from the respective State governments, which are then sent to the Tribal Affairs Ministry, which reviews and sends them to the Registrar General of India for approval.
• This is followed by the National Commission for Scheduled Tribes approval before the list is sent to the Cabinet for a final decision.

Benefits in the Inclusion in the ST List:

• Some of the major benefits include post-matric scholarship, overseas scholarship and the national fellowship, besides education, concessional loans from the National Scheduled Tribes Finance and Development Corporation, and hostels for students.
• In addition, they will also be entitled to benefits of reservation in services and admission to educational institutions as per the government policy.

Source: TH

7. How bat genomes provide insights into immunity and cancer

Subject: Science and tech

Section: Biotechnology  

Context:

Bats, by many measures, are truly remarkable organisms. Their lives are notably extended, and they enjoy a unique defense against a range of diseases, including cancer.

About Bats

• Significant Population: Bats constitute a substantial part of the mammal world, making up 20% of all mammal species globally. The planet is home to over 1,400 bat species, each exhibiting its own unique characteristics.
• Diverse Characteristics: Bats exhibit a wide range of sizes, from the tiny 2-gram bumblebee bat to the formidable flying foxes, boasting a 1.5-meter wingspan and weighing up to 1.6 kg.
• Ecological Importance: Bats play pivotal roles in maintaining ecological balance by contributing to essential processes such as pollination and insect population control.

Bats as Virus Reservoirs

• Notorious Reputation: Bats have come under scrutiny primarily due to their role as hosts for various deadly viruses, including coronaviruses, Nipah, Ebola, Marburg virus, and Hendra virus.
• COVID-19 Spotlight: The COVID-19 pandemic has thrust bats into the spotlight, raising concerns about their potential impact on human health.
• Natural Pathogen Hosts: Bats are unique in their ability to harbour numerous pathogens without falling victim to infections, sparking scientific interest in understanding the source of their resistance.

Unlocking Bat Genomes

• Genomic Exploration: Scientists have embarked on comprehensive studies of bat genomes, revealing invaluable insights into their distinctive biology.
• Compact Genomes: Bats boast relatively small genomes, typically consisting of around 2 billion bases, making them ideal subjects for genomic research.
• Metagenomic Sequencing: The ambitious Bat1K global genome consortium is currently undertaking the task of sequencing genomes of all bat species worldwide, promising further revelations about their genetic makeup.

Immune Insights from Bat Genomes

• Crucial Immune Genes: The immune-related genes of bats have been a major focus of research, with these creatures exhibiting unique genomic features.
• Reduced Immune Genes: Bats possess a smaller percentage of immune-related genes, approximately 2.7-3.5% compared to humans, who have around 7%.
• Positive Selection: Certain immune genes in bats have undergone positive selection, equipping them to control the spread of viruses while mitigating the inflammatory responses that often prove detrimental to humans.

Long-Read Sequencing and Deeper Insights

• Sequencing Advancements: Long-read sequencing technologies have revolutionized our ability to assemble complete genomes quickly and accurately.
• Immune Response Alterations: Recent research employing long-read technology has revealed significant changes in genes responsible for immune responses in bats.
• Interferon Dynamics: There has been a shift in the relative proportions of interferon-alpha (IFN-α) and interferon-omega (IFN-ω) in bats, impacting their immune properties.
• Tumor Suppression and Longevity: Genes linked to tumor suppression and DNA repair in bats exhibit signs of positive selection, contributing to their extended lifespans and reduced cancer risk.

Future Prospects

• Emerging Zoonotic Threats: The ongoing processes of deforestation, ecological degradation, and heightened human-animal interactions are anticipated to result in more frequent zoonotic disease outbreaks.
• Genomic Tools: Advanced genome sequencing techniques hold the promise of aiding in the management of these outbreaks while preserving ecological balance, providing insights without disrupting the delicate equilibrium of nature.

8. Fluorescence: making animals glow

Subject: Science and tech

Section: Msc 

Context: A recent study reported that the bodies of animals belonging to all the known mammalian orders fluoresced in some way. Some 107 species also had fur that fluoresced.

Fluorescence 

• when an object absorbs some light of higher energy (like blue color) and  releases it at lower energy (like red color). It usually happens when an electron  absorbs a photon, or a particle of light, jumps to a higher energy level, before releasing that energy and jumping back down.
• In this process, the electron’s spin must not change. If its spin changes, the process is called phosphorescence.
• Fluorescence has many applications. The fluorescent lamp uses an electric discharge to bombard a material with UV light. The material absorbs it and re emits it as visible light. More curiously, scientists have been finding that the bodies of many mammals also fluoresce.

What is the Purple Economy?

Key Points:

• The Purple Economy, also sometimes referred to as the care economy, obtains its name from the color adopted by many feminist movements.
• It represents a new vision of economics that recognizes the importance of care work, empowerment and autonomy of women to the functioning of the economies, wellbeing of societies and life sustainability.
• Care work consists of two overlapping activities and can be paid or unpaid:
  • 1) direct, personal, and relational care activities, such as feeding a baby or nursing an ill partner; and
  • 2) indirect care activities or domestic work, such as cooking and cleaning.
• The bulk of care work worldwide is provided by unpaid carers, mostly women and girls. Paid care work is also predominantly carried out by women, often those from socially disadvantaged groups, including migrants.
• Being mostly in the service sector, care work is often associated with significant wage penalties and poor working conditions.
• How does the purple economy aims to address the problem?
  • The Purple Economy aims to overcome the fragility of the care economy at the national and international levels and address the multiple and intersecting inequalities created by the disproportionate reliance on women’s unpaid and underpaid labour, and under-investment in the care sector.
  • Purple Economy calls for the internalisation of the costs of care. The movement argues for making transitions to sustainable care arrangements along with environmental sustainability.
  • Public investments in the care sector should be seen as a source of decent and quintessentially green jobs.
  • Women benefit from job and entrepreneurship opportunities created in other, less feminised green sectors, such as energy or transport.

9. RBI opens up its dated securities to help Russia park its Rupee surplus

Subject: Economy

Section: External Sector 

In News: Countries accumulating surplus in INR to be able to invest in G Secs through Rupee Accounts.

Key Points:

• With RBI’s amendment in FEMA Regulations 2019, countries holding Rupee accounts in India can directly invest that money in Government dated securities and thus earn interest and invest in India at the same time.
• The move is seen emerging from Russia’s rising Rupee balance after India paid for Russian crude oil in Rupees, because of the US led sanctions.
• This move aims to benefit 22 countries having bilateral trade settlements in INR (Indian Rupee) with India.
• Why was this move required?
  • International Trade Settlement in rupees, initiated in July last year, aims to promote the growth of global trade with emphasis on exports from India and to support the increasing interest of the global trading community in INR.
  • This is likely to increase the Rupee balance with participating countries.
•  Russia can get some comfort over its mounting surplus rupee problem as it, along with 21 other countries, can now invest in dated Government Securities and Treasury Bills through a rupee account.
• Reserve Bank of India has notified the amendment in Foreign Exchange Management (Debt Instruments) Regulations, 2019.
• The notification also said the amount of consideration for the purchase of dated Government Securities / treasury bills by persons resident outside India shall be paid out of funds held in their rupee account.
• Also, the sale/maturity proceeds (net of taxes, as applicable) of instruments held by persons resident outside India who maintain a rupee account shall be credited to the said rupee account.

Was there no such arrangement earlier?

• The new system will be apart from options to invest through the Foreign Portfolio Investor (FPI) route and Special Rupee Vostro Account (SRVA).

10. New Report Calls for Global Minimum Tax on Billionaires

Subject: Economy

Section: Fiscal Policy

Key Points:

• Report titled ‘Global Tax Evasion Report’ prepared by the EU Tax Observatory, a research laboratory established in 2021 with expertise in international tax issues has called for a global minimum tax on billionaires’ wealth.
• The report studies tax avoidance in view of the rising income and wealth inequality, high public debt in the post-COVID-19 context, and the significant need for government revenue to address climate change and fund essential services like healthcare, education, and infrastructure.
• The report investigates the effects of international reforms adopted over the past 10 years, such as the automatic international exchange of bank information, and the international agreement on a global minimum tax for MNCs, among other issues.
  • The automatic exchange of information was introduced in 2017 to fight offshore tax evasion by wealthy individuals. Countries exchanged information on the deposits of non-residents to foreign tax authorities as part of the common reporting standard.
  • In 2021, a group of 136 countries, including India agreed to an OECD proposal to set a minimum global tax rate of 15% for MNCs and sought to make it harder for them to avoid taxation.

Key findings of the report:

• Firstly, offshore tax evasion by wealthy individuals has decreased over the past decade, the report says, attributing it to the automatic exchange of bank information.
• But it also highlights that offshore tax evasion still happens due to non-compliance by offshore financial institutions and limitations in the automatic exchange of bank information.
• Not all assets are subject to the automatic exchange of bank information, allowing individuals to exploit these gaps, especially in the realm of real estate.
• Report finds a considerable amount of profit shifting to tax havens, with no apparent impact of policies so far.
• US multinationals are responsible for around 40% of this profit shifting, with Continental European countries being the most affected by this evasion.
• It finds that global billionaires have effective tax rates equivalent to 0% to 0.5% of their wealth due to the frequent use of shell companies to avoid income taxation.
• The report highlights the emergence of new forms of aggressive tax competition that negatively affect government revenues.
• Over the past 15 years, many countries have introduced preferential tax regimes aimed at attracting specific socio-economic groups perceived as particularly mobile.

Recommendation:

• Governments should put a global minimum tax on billionaires, which could raise $250 billion annually.
• If levied, the sum would be equivalent to only 2% of the nearly $13 trillion in wealth owned by the 2,700 billionaires globally.