Daily Prelims Notes 30 September 2022

Daily Prelims Notes

30 September 2022

Table Of Contents

1. Right to abortion
2. UNESCO launches list of 50 iconic Indian heritage textiles
3. CAD widens to 2.8 percent of GDP
4. ASI finds Buddhist caves and temples
5. Solar geoengineering might work but local temperatures could keep rising for years
6. The mess in the UK economy
7. Commodity Derivative Market
8. About the Global Innovation Index–GII
9. Stockholm Convention to take final call on 5 Persistent Organic Pollutants

1. Right to abortion

Subject: Polity

Context: The Supreme Court in a significant judgment, said it is unconstitutional to distinguish between married and unmarried women for allowing termination of pregnancy on certain exceptional grounds when the foetus is between 20-24 weeks.

Concept :

• A three-judge Bench led by Justice D Y Chandrachud framed the interpretation of Rule 3B of the Medical Termination of Pregnancy Rules, 2003, as per which only some categories of women are allowed to seek termination of pregnancy between 20-24 weeks under certain extraordinary circumstances.
• The ruling was incidentally delivered on World Safe Abortion Day (September 28), emphasising female autonomy in accessing abortion.
• Sustainable development goals related to the right to abortion :
• SDG 3.1 pertains to reducing the maternal mortality ratio
• SDGs 3.7 and 5.6 pertain to universal access to sexual and reproductive health and rights.

Medical Termination of Pregnancy (MTP) Act

• The Medical Termination of Pregnancy Act, 1971 (“MTP Act”) was passed due to the progress made in the field of medical science with respect to safer abortions.
• The MTP Act was amended in 2021 which expands the access to safe and legal abortion services on therapeutic, eugenic, humanitarian, and social grounds to ensure universal access to comprehensive care.

Key Provisions of the MTP Amendment Act, 2021:

Termination due to Failure of Contraceptive Method or Device:

• Under the Act, a pregnancy may be terminated up to 20 weeks by a married woman in the case of failure of contraceptive method or device. It allows unmarried women to also terminate a pregnancy for this reason.

Opinion Needed for Termination of Pregnancy:

• Opinion of one Registered Medical Practitioner (RMP) for termination of pregnancy up to 20 weeks of gestation.
• Opinion of two RMPs for termination of pregnancy of 20-24 weeks of gestation.
• Opinion of the State-level medical board is essential for a pregnancy to be terminated after 24 weeks in case of substantial foetal abnormalities.

Upper Gestation Limit for Special Categories:

• Increases the upper gestation limit from 20 to 24 weeks for special categories of women, including survivors of rape, victims of incest and other vulnerable women (differently abled women, minors, among others).

Confidentiality:

• The “name and other particulars of a woman whose pregnancy has been terminated shall not be revealed”, except to a person authorised in any law that is currently in force.

2. UNESCO launches list of 50 iconic Indian heritage textiles

Subject :  Culture

Context: UNESCO on Thursday released a list of 50 exclusive and iconic heritage textile crafts of the country included in its List of Intangible Cultural Heritage of Humanity.

Concept :

• Handmade for the 21st Century: Safeguarding Traditional Indian Textile released by UNESCO lists the histories and legends behind the textiles, describes the complicated and secret processes behind their making, mentions the causes for their dwindling popularity, and provides strategies for their preservation.
• UNESCO stated that it hopes that India will consider expanding its register of elements inscribed in the UNESCO Representative List of the Intangible Cultural Heritage of Humanity by nominating one of the textile crafts featured in this publication.
• No textile crafts from India have been included in the List of the Intangible Cultural Heritage of Humanity yet.

UNESCO’s Convention for Safeguarding the Intangible Heritage

• The Convention of the Safeguarding of the Intangible Cultural Heritage was adopted by the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 2003 and entered into force in 2006.
• It comprises 24 members and is elected in the General Assembly of the Convention according to the principles of equitable geographical representation and rotation.
• Members of the Committee are elected for a term of four years.

Publications:

• Representative List of the Intangible Cultural Heritage of Humanity.
• List of Intangible Cultural Heritage in Need of Urgent Safeguarding.
• Register of good safeguarding practices.

Which Indian Elements were Recognized as ICH?

• India has 14 intangible cultural heritage elements on the prestigious UNESCO Representative List of ICH of Humanity.
• Other than the Durga Puja there are 13 Traditions in India recognised by UNESCO as ICH.

3. CAD widens to 2.8 percent of GDP

Subject :Economics

Context: Reserve Bank of India data shows that India’s current account deficit has widened to 2.8% of GDP in April- June period when compared to 1.5 % in the preceding quarter. It is also observed that India’s external debt has declined by 2.5 billion USD to 617.1 billion dollars.

Concept :

• CAD has widened mainly due to high merchandise trade deficit and net outflow of investment income payments.

What is investment income?

• Investment Income is the income that is generated through dividends, payment of interest, and capital gains through the sale of any asset or security and profits made by any kind of investment vehicles like bonds, mutual funds, etc.

Current Account Deficit–

• A current account deficit occurs when the total value of goods and services a country imports exceeds the total value of goods and services it exports.
• If there is a deficit on the current account, there will be a surplus on the Financial/Capital account to compensate for the net withdrawals.
• Current Account: It shows export and import of visibles (also called merchandise or goods – represent trade balance) and invisibles (also called non-merchandise). Invisibles include services, transfers and income.Thus,
• The balance of trade in goods
• The balance of trade in services.
• Net current income e.g. profit from overseas investment.
• Transfer payments e.g. payments to the EU.
• The balance of exports and imports of goods is referred to as the trade balance. Trade Balance is a part of ‘Current Account Balance’.
• Capital Account: It shows a capital expenditure and income for a country. It gives a summary of the net flow of both private and public investment into an economy.
• External Commercial Borrowing (ECB), Foreign Direct Investment, Foreign Portfolio Investment, etc form a part of capital account.

The size of current account deficit/surplus is affected by several factors including:

• Overvalued exchange rate-If the currency is overvalued, imports will be cheaper, and therefore there will be a higher quantity of imports. Exports will become uncompetitive, and therefore there will be a fall in the quantity of exports
• Economic growth-If there is an increase in national income, people will tend to have more disposable income to consume goods. If domestic producers cannot meet the domestic demand, consumers will have to import goods from abroad.
• Saving rates – influencing the level of import spending, thus increasing the deficit.
• Decline in competitiveness/export sector-In the UK, there has been a decline in the exporting manufacturing sector because it has struggled to compete with developing countries in the far east. This has led to a persistent deficit in the balance of trade.
• Higher inflation-If India’s inflation rises faster than our main competitors then it will make UK exports less competitive and imports more competitive. However, inflation may also lead to a depreciation in the currency to offset this decline in competitiveness.
• Recession in other countries-If India’s main trading partners experience negative economic growth, then they will buy less of our exports, worsening India’s current account.
• Borrowing money-If countries are borrowing money to invest e.g. third world countries, then this will lead to deterioration in current account position.
• Financial flows to finance the current account deficit.-If a country can attract more financial flows (either short-term portfolio investment or long-term direct investment), then these flows on the financial account will enable the country to run a larger current account deficit.

Impact for the economy

• Cost Push inflation- due to supply shortage
• Rise in import bill
• Decline in forex reserve
• Rise capital inflows- If there is a deficit on the current account, there will be a surplus on the Financial/Capital account to compensate for the net withdrawals. However, capital flows are likely to be lower than the current account deficit due to war led outflows.
• Higher external borrowing

Dip in external debt

• The external debt to GDP ratio declined to 19.4 % at June end, from 19.9% at March end.
• The external debt-to-GDP ratio is the ratio between a country’s external debt and its gross domestic product (GDP).
• RBI stated that the valuation gains due to the appreciation of the USD and other major currencies like the Japanese yen and euro were responsible for the decline. Otherwise, the external debt would have increased by 11.9 billion USD.

External debt

• It refers to money borrowed from a source outside the country. External debt has to be paid back in the currency in which it is borrowed.
• External debt can be obtained from foreign commercial banks, international financial institutions like IMF, World Bank, ADB etc and from the government of foreign nations.
• External debt is money borrowed by a government or corporation from a foreign source. It includes both public and publicly guaranteed debt and non-guaranteed private sector external debt.
• Normally these types of debts are in the form of tied loans, meaning that these have to be used for a predefined purpose as determined by a consensus of the borrower and the lender.
• Sovereign debt is a central government’s debt. It is debt issued by the national government in a foreign currency in order to finance the issuing country’s growth and development.

4. ASI finds Buddhist caves and temples

Subject: Culture

Context: The Archaeological Survey of India (ASI) finds Buddhist caves and temples in Madhya Pradesh’s Bandhavgarh Tiger Reserve.

Concept :

• The Archaeological Survey of India (ASI) earlier this year discovered Buddhist caves and stupas, and Brahmi inscriptions, dating back to the 2nd century, and Hindu temples from the 9th-11th centuries, and possibly the world’s largest Varahasculpture also dating to the same period, at the Bandhavgarh Tiger Reserve in Madhya Pradesh.
• The Varaha sculpture is among the many monolithic sculptures of the 10 incarnations of Lord Vishnu that were discovered by an ASI at the national park earlier this year.
• The exploration took place 84 years after the last such effort in 1938.
• The caves and some of their remains had ‘Chaitya’ (rounded) doors and stone beds typical of Mahayana Buddhism sites.
• This discovery brings the total number of caves found in Bandhavgarh to 76, as 50 are already in the records since the last survey.
• The inscriptions (Brahmi texts dating to the 2^nd – 5^th centuries) discovered mention sites such as Mathura and Kaushambi, and Pavata, Vejabharada and Sapatanaairikaa. The kings they mention include Bhimsena, Pothasiri and Bhattadeva.
• Some remains of the Gupta period, such as door jambs and carvings in caves, have also been found.

Buddhist Architecture

• The founder of Buddhist art in India was the greatest Maurya ruler Ashoka. The Buddhist art is represented in the forms of the Stupas, the Viharas, the Chaityas, and the images of Buddha in various postures and the stories of his life engraved on the stone slabs.

Stupas

• The older stupas were enlarged during the time period between Mauryas and Guptas
• The famous amongst these are– Sanchi, Bharhut and Amaravati
• Stupa has a cylindrical drum or a circular anda over which one can see harmika and chhatra. The circumambulatory path, Pradakshina path, is enclosed by railings called vedika.

Viharas

• It was the ancient Indian term for a Buddhist monastery.
• Originally, viharas were dwelling places used by wandering monks during the rainy season but eventually they evolved into centers of learning and Buddhist architecture through the donations of wealthy lay Buddhists.
• Life in “Viharas” was codified early on. It is the object of a part of the Pali canon, the Vinaya Pitaka or “basket of monastic discipline.”
• Typical large sites such as the Ajanta Caves, Aurangabad Caves, Karli Caves, and Kanheri Caves contain several vihara

Chaitya Architecture

• It refers to a shrine, sanctuary, temple or prayer hall in Indian religions.
• Most early examples of chaitya that survive are Indian rock-cut architecture
• Chaityas have a gigantic hall with high vaulted roof, with a lot of sculpture work on the pillars and the entrance
• The largest Chaitya-Griha among all Buddhist monuments in India is the Karle caves.
• Many Chaityas show a stupa at the back. Chaityas were carved either as rectangular halls or apsidal vault-roof or apsidal vault pillarless halls

5. Solar geoengineering might work but local temperatures could keep rising for years

Subject : Environment

Context:

Theoretically, aerosol particles would reflect a little more sunlight back to space, dampening the effects of global warming, but research shows that temperatures locally or regionally might continue to increase over the following few years.

Different Types of Solar geoengineering:

Geoengineering is at best a supplement to emissions cuts, not a substitute for them. It is possible that a combination of emissions cuts, carbon removal and solar geoengineering could provide a significantly safer climate than emissions cuts alone or emissions cuts and carbon removal.

6. The mess in the UK economy

Subject :Economy

Context:

Britain’s pound depreciated  to an all-time low post the mini-budget laid out to slash taxes and expand spending to cushion soaring energy prices.

In the budget?

• Freeze on energy bills-energy subsidies
• Tax cut to boost consumption and investment spending
• Rise in public expenditure and borrowing

Impact- large scale capital outflows due to the prospect of higher inflation caused by the tax cuts. 

• The currency fell to a low of $1.0327 i.e. a 37-year low.
• A sharp rise in the yields or the effective interest rate charged of gilts–as government bonds due panic sell off of bonds.

What are the immediate implications?

• More money in the hands of the people by way of reducing taxes could fuel unproductive spending and demand pull inflation.
• UK’s imports will become costlier at a time when the economy is already struggling with historic inflation fuelled by rising prices of imported Russian gas in the wake of the war in Ukraine.
  • This means Britain will face more currency-induced inflation (imported inflation) pressure than its European peers and leading decline in investment sentiments.
• A sharp rise in the yields implies a rise in the cost of borrowing at the time when it intends to substantially increase its borrowings.
• Thus leading to the twin deficit issue –current account deficit and fiscal deficit.

UK economy

The UK economy was facing two big problems:

• Inflation-The biggest contributor to this spike is the price are:
  • Rise in energy prices due the Ukraine war and related shortage of natural gas export to the UK
  • Rising energy demand as winter arriving – rising electricity bills
• Stagnant growth-
  • The UK’s economy has largely been stagnant since the global financial crisis of 2008.
  • The UK economy has still not recovered to the pre-pandemic level. Between 2007 and 2020, the UK’s GDP has grown from $2.73 trillion to $2.89 trillion

7. Commodity Derivative Market

Subject :Economy

Context:

The Securities and Exchange Board of India has allowed Foreign portfolio investors (FPIs) to participate in the exchange traded commodity derivatives (ETCDs) market subject to certain risk management measures

Details:

• It aims at increasing the depth and liquidity in the commodity derivative market.
• FPIs will be allowed only in cash-settled non-agricultural commodity derivative contracts and few non agricultural indices.
• The previously used Eligible Foreign Entity (EFE) method has been terminated due to non participation.
  • In October 2018, Sebi had permitted eligible foreign entities (EFEs) having actual exposure to Indian commodity markets, to participate in the commodity derivative segment of recognised stock exchanges for primarily hedging their exposure.
• FPIs other than individuals, family offices and corporates may participate in commodity derivatives products as ‘clients’ and would be subject to rules and position limits.
• FPIs belonging to categories such as individuals, family offices and corporates will be allowed a position limit of 20% of the client level position limit in a particular commodity derivative contract

Concept:

• Derivatives are financial contracts that derive their values from the price fluctuations of their underlying assets such as stocks, currency, bonds, commodities etc.
• Two types of derivatives:
  • One that is subject to standardised terms and conditions, hence, traded in the stock exchanges and known as Exchange Traded Derivatives (ETDs), 
  • Second type that is traded between private counter-parties, in the absence of a formal intermediary and  known as Over the Counter (OTC) derivatives.
• Commodity derivatives are financial instruments that allow investors to profit from commodities without actually owning them. A derivatives contract entails the right to exchange a commodity at a later date for a specified price
• The commodity derivatives market is a place where investors can buy stocks in commodities rather than in major corporations that trade in these commodities.
• Two separate commodity markets:

• Spot markets are also known as “cash markets” or “physical markets” where traders exchange physical commodities, and that too for immediate delivery.
• Derivatives markets in India involve two types of commodity derivatives: futures and forwards; these derivatives contracts use the spot market as the underlying asset and give the owner control of the same at a point in the future for a price that is agreed upon in the present. When the contracts expire, the commodity or asset is delivered physically.
• Commodities ETDs-These types of Exchange Traded Derivatives have commodities as the underlying asset and are traded on the price fluctuations of commodities. Some of the examples of standardized contracts on commodities include gold, crude oil, silver, natural gas, copper, zinc etc.
  • The Multi Commodity Exchange of India Limited (MCX), India’s first listed exchange, is a state-of-the-art, commodity derivatives exchange that facilitates online trading of commodity derivatives transactions, thereby providing a platform for price discovery and risk management.

8. About the Global Innovation Index–GII

Subject : Index

India climbs to the 40th rank in the Global Innovation Index of WIPO– a huge leap of 41 places in 7 years

Findings:

• Innovation is at a crossroads as we emerge from the pandemic, facing global uncertainties and underperformance in innovation-driven productivity.
• Switzerland remains the world’s leader in innovation for the 12th consecutive year.
• The second position was secured by the United States (US) followed by Sweden, the United Kingdom (UK) and the Netherlands.
• Emerging economies are showing consistently strong performance including, India and Turkey.
• India is the innovation leader in the lower middle-income group.
  • India secured the 40th position in the Global Innovation Index.
  • This is the first time the country entered the top 40.
  • Last year, India was at the 46th position.
  • Leading in the world in  ICT services exports and holds top rankings in other indicators, including venture capital receipt value, finance for startups and scaleups, graduates in science and engineering, labor productivity growth and domestic industry diversification

About the Global Innovation Index–GII:

• It is published by by the World Intellectual Property Organization (WIPO), in partnership with the Portulans Institute and with the support of its corporate partners including the Confederation of Indian Industry (CII), the Brazilian National Confederation of Industry (CNI), Ecopetrol (Colombia), and the Turkish Exporters Assembly (TIM).
• The GII aims to capture the multi-dimensional facets of innovation ranking and rich analysis referencing around 132 economies.
• Indicators: The index ranks world economies according to their innovation capabilities and consists of roughly 80 indicators grouped into innovation inputs and outputs.
• Components:
  • Innovation Input Sub-Index: Five input pillars capture elements of the economy that enable and facilitate innovative activities.
    • Innovation inputs: Institutions; Human capital and research; Infrastructure; Market sophistication; Business sophistication.
  • Innovation Output Sub-Index: Innovation outputs are the result of innovative activities within the economy.
    • Innovation outputs: Knowledge and technology outputs; Creative outputs
    • Although the Output Sub-Index includes only two pillars, it carries the same weight as the Input Sub-Index in calculating the overall GII scores.
  • The overall GII score is the average of the Input and Output Sub-Indices, on which the GII economy rankings are then produced.

9. Stockholm Convention to take final call on 5 Persistent Organic Pollutants

Subject :Environment

Context: The 18th meeting of the Persistent Organic Pollutants Review Committee of the Stockholm Convention is taking place this week in Rome.

Details:

• The 18th meeting of the Persistent Organic Pollutants (POP) Review Committee (POPRC-18) to the Stockholm Convention has included five more chemicals in its agenda.
• The listed chemicals include a pesticide, a flame retardant and some plastic stabilising substances.
• Three of the listed chemicals — chlorpyrifos, chlorinated paraffin beyond prescribed standards and long-chain perfluoro carboxylic acids — were already nominated at the 17th meeting (POPRC-17) in January this year.
• Experts will determine if these chemicals are POPs which demand global action due to their adverse effects on human health and the environment.
• Their draft risk profiles will be adopted and global action will be warranted if they fall into the hazardous chemicals category.
• These chemicals will then be elevated for the third review stage (Annex-F) or risk management evaluation.
• Socio-economic considerations associated with possible control measures are evaluated at this stage. Thereafter, they will be considered for recommendation to the Conference of the Parties to list them under the Stockholm Convention.
• Two chemicals — dechlorane plus, a flame retardant and UV-328, a stabiliser used in some personal care products — which qualified for risk management evaluation at POPRC-17 will be evaluated at this session.
• POPRC-18 aims to list each of these chemicals in Annex A (elimination), B (restriction) and/or C (unintended release) of the Stockholm Convention.

India’s resistance:

• The United Nations Environment Programme’s proposal to list chlorpyrifos as POP was resisted by India. Still, chlorpyrifos got nominated as Persistent organic pollutants.
• Chlorpyrifos is not a carcinogen and its concentrations are low.
• India had also opposed the decision to list flame retardant dechlorane plus.
• Chlorpyrifos was registered under the Insecticide Act of 1968 since 1977 and Anupam Verma Committee recommended its review for continued use in 2015.
• China and India are among the largest producers of chlorpyrifos. Nearly 48 per cent of chlorpyrifos or 24,000 tonnes was produced in India. Globally, some 50,000 tonnes of chlorpyrifos is being used annually, according to estimates by the China Crop Protection Industry Association.
• Chlorpyrifos was approved for agricultural use in 2021, which includes its use as a pesticide against pests affecting Bengal gram, rice and cotton.
• It is one of the ten pesticides banned by Punjab and Haryana governments in August 2022.
• Chlorpyrifos is approved for 18 crops in India, while it was being used for 23 crops.
• The Stockholm Convention has listed 31 chemicals as of December 2020. This list is likely to expand further amid evidence pointing towards the health burden of hazardous chemicals and pesticides.

Why ban is important?

Acute pesticide poisoning is an ongoing major global public health challenge, with about 385 million cases of unintentional acute pesticide poisoning and 11,000 deaths every year, according to a global study.