Daily Prelims Notes 7 May 2022

May 7, 2022
Posted by: OptimizeIAS Team
Category: DPN

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Daily Prelims Notes

7 May 2022

Table Of Contents

1. Front running

Subject: Economy

Section: Capital Market

Context:

Axis Asset Management Company, which manages assets worth Rs 259,818 crore, suspended two fund managers on Friday for various irregularities, including front-running the AMC’s transactions on their personal accounts.

Concept:

Front running involves purchasing a stock based on advance non-public information regarding an expected large transaction that will affect the price of the share.

Example-Front-running has been very common in mutual fund houses and foreign portfolio investors. When mutual funds make a big order, some fund managers buy the same shares in their personal accounts before executing the MFs’ order. When MFs purchase in huge quantities, the price of the share is expected to go up.

Law-Sebi has categorized front running as a form of market manipulation and insider trading because a person who commits a front running activity expects security’s price movements based on the non-public information.

Insider trading :

Insider trading involves trading in a public company’s stock by someone who has non-public, material information about that stock for any reason. Material non-public information is any information that could substantially impact an investor’s decision to buy or sell the security that has not been made available to the public. Insider trading can be either illegal or legal depending on when the insider makes the trade

Insider trading in India is prohibited by the Companies Act, 2013 and the SEBI Act, 1992. SEBI has formed the SEBI (Prohibition of Insider Trading) Regulations, 2015 which prescribe the rules of prohibition and restriction of Insider Trading in India.

The Regulations provide that the communication or dissemination of any confidential information, by an insider, is prohibited.

If any person contravenes with any provision of the SEBI Regulations, it amounts to an offence under the Act and is punishable with imprisonment up to 10 years or a fine up to 25 crores, whichever is higher. Under the SEBI Regulations, the adjudicating officer may impose a penalty on any person who contravenes with the provisions of the regulations except for the offence committed under section 24 of the Act. SEBI also has the power to investigate the case of Insider Trading and related matters.

2. The Cooling-off period for retired Bureaucrats

Subject: Polity

Section: Civil service

Context: Archana Goyal Gulati, an 1989-batch official of the Indian Posts and Telecommunication Accounts and Finance Service (Indian P&TAFS), has joined Google as Chief of Public Policy after taking voluntary retirement from the civil service. As she completed the one-year cooling period that is necessary before taking up the post-retirement job.

What is the cooling-off period?

Post-retirement commercial employment for the three All India Services (IAS, Indian Police Service, and Indian Forest Service) is covered under the AIS Death-cum-Benefits Rules, and for the Central Civil Services under the CCS (Pension) Rules.
Rule 9 of the CCS (Pension) Rules states that “if a pensioner who, immediately before his retirement was a member of Central Service Group ‘A’ wishes to accept any commercial employment before the expiry of one year from the date of his retirement, he shall obtain the previous sanction of the Government to such acceptance”.
Non-compliance with these rules can lead to the government declaring that the employee “shall not be entitled to the whole or such part of the pension and for such period as may be specified”.
Post-retirement commercial employment include
- Employment in any capacity including that of an agent, under a company, co-operative society, firm or individual engaged in trading or business (this does not include employment under a body corporate, wholly or substantially owned or controlled by the Central Government or a State Government)
- Setting up practice, either independently or as a partner of a firm, as adviser or consultant in certain matters specified under the rules, including matters that are relatable to the pensioner’s official knowledge or experience.

What about government servants joining politics after retirement?

While in service, the Conduct Rules bar government servants from being associated with any political party or organization, and from taking part in or assisting any political activity.
There is no rule, however, to stop government servants from joining politics after retirement.

3. Russia’s Victory Day

Subject: International relation

Section: Important events

Context: It is believed that President Vladimir Putin will use his May 9 speech to draw parallels between the conflict in Ukraine and the heroism of Soviet soldiers during World War II.

About Russia’s Victory Day

On May 9, Russia commemorates the defeat of the Nazis during World War II.
Notably, while the allies observes Victory in Europe Day, on May 7, the day Nazis surrendered in France Soviet leader. Joseph Stalin chose to celebrate the fall of the Nazis in Soviet-controlled Berlin the next day.
While Russia’s first post-Soviet president Boris Yeltsin made Victory Day celebrations an annual affair.
It was Soviet leader Leonid Brezhnev who declared May 9 a national holiday.
Victory Day celebrations usually include a massive military parade in Moscow. Russian leaders also traditionally stand on the tomb of revolutionary leader Vladimir Lenin in Red Square.

4. Section 11 of the Electricity Act

Subject: Economy

Section: Infrastructure

Context:

With the coal and power supply situation in the country becoming a cause of concern, the Power Ministry has read the riot act to the imported coal based (ICB) power plants directing them to start operations.

Concept:

Section 11 of the Electricity Act, allows the government to order a Genco, in extraordinary circumstances, to operate and maintain any generating station in accordance with the government’s directions.

India is the third-largest producer and second-largest consumer of electricity worldwide, with an installed power capacity of 395.07 GW, as of January 2022.

India’s power sector is one of the most diversified in the world. Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste.

India was ranked fourth in wind power, fifth in solar power and fourth in renewable power installed capacity, as of 2020. India is the only country among the G20 nations that is on track to achieve the targets under the Paris Agreement.

Electricity regulation:

The Electricity Act 2003 governs the activities relating to generation, transmission, distribution, trading and use of electricity in India. The generation of electricity (except hydro) is an activity that does not require a licence. Distribution, transmission and trading of electricity are licensed activities under the Electricity Act.

The main objectives of the Electricity Act are:

Promoting competition.
Protecting the interest of consumers.
Ensuring electricity supply to all areas along with a rationalisation of tariffs.
Ensuring transparent policies and promotion of efficiency.

The Central Electricity Authority is the statutory body under the Electricity Act that advises the Government of India on establishing policies, safety requirements and technical standards.

The Government of India (in consultation with the states and the CEA) sets policies (such as the NTP and National Electricity Policy) as a guideline for the Central Electricity Regulatory Commission (CERC) and the State Electricity Regulatory Commissions (SERCs) when they make their regulations.

The regulatory commissions are set up at the central and state level to regulate and oversee generation, distribution and transmission of electricity. They are independent bodies with functions as specified under the Electricity Act.

At the central level, CERC is responsible for the following:

Regulating the tariffs of the generating companies that are owned or controlled by the Government of India.
Regulating tariffs of generating companies (other than those owned or controlled by the Government of India), if these generating companies enter into or otherwise have a composite scheme for generation and sale of electricity in more than one state.
Regulate inter-state transmission of electricity.
Determine tariffs for inter-state transmission of electricity.
Adjudicating disputes involving generating companies or transmission licensees in relation to any of the previous matters.
Issuing licences to transmission licensees and electricity traders.

At the state level, the SERCs perform similar functions to those of CERC. The functions of SERCs include the following:

Regulating the purchase and procurement of electricity by distribution licensees.
Facilitating intra-state transmission of electricity and issuing licences to applicants for transmission licensees, distribution licensees and electricity traders within the state.
Determining the tariffs for the generation, supply, transmission and wheeling of electricity (wholesale, bulk or retail) within the state.
Adjudicate disputes between the licensees and/or the generating companies.
Specify state grid codes consistent with the grid code specified by CERC.

There are four types of activities covered by the Electricity Act, that is:

Three licensed activities:
- transmission of electricity;
- trading of electricity (purchase of electricity for resale); and
- distribution of electricity.
De-licensed activity-Generation activity except hydropower

No licence is required under the Electricity Act for operating a generation plant (except hydro). However, a number of approvals, consents and permits must be obtained and maintained during the operation of the plant from various central and state bodies.

5. Gas flaring at oil and gas facilities and global warming

Subject: Environment

Section: Capital Market

Context:

Gas flared at oil and gas facilities is greater than EU’s total import from Russia and a key source of methane emission

What is gas flaring?

Gas flaring is the burning of natural gas associated with oil extraction.
The practice has persisted from the beginning of oil production over 160 years ago and takes place due to a range of issues, from market and economic constraints, to a lack of appropriate regulation and political will.
Flaring is a monumental waste of a valuable natural resource that should either be used for productive purposes, such as generating power, or conserved.
For instance, the amount of gas that is currently flared each year – about 144 billion cubic meters – could power the whole of sub-Saharan Africa.

Impact of Gas flaring:

Gas flaring is turning out to be a major source of methane emission, a greenhouse gas (GHG) “over 80 times more powerful than carbon dioxide as a warming gas in a 20-year timeframe”.
The World Bank’s latest 2022 Global Gas Flaring Tracker Report underscored that the efforts to curb this global warming causing activity have “stalled” in the last one decade.
Reduction Partnership — “a multi-donor trust fund composed of governments, oil companies, and multilateral organizations committed to ending routine gas flaring at oil production sites across the world” — has been tracking gas flaring using satellite technology.
According to the latest data released May 5,2022, the world in 2021 burnt 144 billion cubic metres (bcm) of gas at oil and gas facilities.
It is estimated that this gas flaring resulted in approximately 400 million tonnes of carbon dioxide (MMtCO2e) equivalent emissions globally last year.Of this, 361 MMtCO2e was in the form of CO2 and 39 MMtCO2e was in the form of methane.
Gas flaring is considered both energy waste and global-warming activity. The flared gas in 2021 is more than the European Union’s 27 member states’ gas imports from Russia.
To make sense of its energy potential, the wasted 144 bcm of natural gas would have generated 1,800 terawatt hours of energy or nearly two-thirds of the European Union’s net domestic electricity generation.
Not only could the gas wasted displace dirtier fuels and increase energy access in some of the world’s poorest countries, but by utilizing the gas that is currently being flared, the world could make significant progress towards much needed energy security.

Way forward

Gas flaring is a direct source of methane. Methane has more warming potential than CO2 but its atmospheric life is much less. Thus, its control can lead to fast reduction in emission of GHGs, thus controlling climate change.
In 2015, countries and companies committed to end flaring by 2030 under the World Bank-initiated Zero Routine Flaring initiative.The latest assessment shows that efforts are matching the commitment made. “Global gas flaring volumes have remained largely static over the last 10 years, plateauing at around 144 bcm.”

6. NFHS 5

Subject: Governance

Topic: Health

Context: The NFHS-5 national report lists progress from NFHS-4 (2015-16) to NFHS-5 (2019-21). The report also provides data by socio-economic and other background characteristics; useful for policy formulation and effective programme implementation.

Concept:

The Total Fertility Rate (TFR), an average number of children per woman, has further declined from 2.2 to 2.0 at the national level between National Family Health Survey (NFHS) 4 and 5.
There are only five States — Bihar (2.98), Meghalaya (2.91), Uttar Pradesh (2.35), Jharkhand (2.26) Manipur (2.17) — in India which are above replacement level of fertility of 2.1 as per the national report of NFHS 5.
Institutional births increased from 79% to 89% across India and in rural areas around 87% births being delivered in institutions and the same is 94% in urban areas.
As per results of the NFHS-5, more than three fourths (77%) children aged between 12 and 23 months were fully immunised, compared with 62% in NFHS-4.
The level of stunting among children under five years has marginally declined from 38% to 36% in the country since the last four years. Stunting is higher among children in rural areas (37%) than urban areas (30%) in 2019-21.
NFHS-5 shows an overall improvement in Sustainable Development Goals indicators in all States/Union Territories (UTs).
The extent to which married women usually participate in three household decisions (about health care for herself; making major household purchases; visit to her family or relatives) indicates that their participation in decision-making is high, ranging from 80% in Ladakh to 99% in Nagaland and Mizoram. Rural (77%) and urban (81%) differences are found to be marginal.
The prevalence of women having a bank or savings account has increased from 53% to 79% in the last four years.
Compared with NFHS-4, the prevalence of overweight or obesity has increased in most States/UTs in NFHS-5. At the national level, it increased from 21% to 24% among women and 19% to 23% among men. More than a third of women in Kerala, Andaman and Nicobar Islands, Andhra Pradesh, Goa, Sikkim, Manipur, Delhi, Tamil Nadu, Puducherry, Punjab, Chandigarh and Lakshadweep (34-46 %) are overweight or obese.

NFHS

The National Family Health Survey (NFHS) is a large-scale, multi-round survey conducted in a representative sample of households throughout India. All National Family Health Surveys have been conducted under the stewardship of the Ministry of Health and Family Welfare, Government of India, with the International Institute for Population Sciences, Mumbai, serving as the nodal agency. ICF International (formerly Macro International), Maryland, USA, provided technical assistance for all four surveys conducted as on date

National Family Health Survey (NFHS)	Year
NFHS-1	1992-93
NFHS-2	1998-99
NFHS-3	2005-06
NFHS-4	2014-15
NFHS-5	2019-21

the survey provides state and national information for India on fertility, infant and child mortality, the practice of family planning, maternal and child health, reproductive health, nutrition, anaemia, utilization and quality of health and family planning services. Each successive round of the NFHS has had two specific goals: a) to provide essential data on health and family welfare needed by the Ministry of Health and Family Welfare and other agencies for policy and programme purposes, and b) to provide information on important emerging health and family welfare issues.

7. Legal Age for Marriage

Subject: Governance

Topic: Gender

Context: About 25 per cent of women aged 18-29 and 15 per cent of men aged 21-29 got married before reaching the minimum legal age of marriage, according to the latest National Family Health Survey (NFHS) conducted between 2019-21.

Concept:

In India, the legal age of marriage for women is 18 and 21 for men.
However, the government is planning to make it 21 for both men and women.
The NFHS-5 said about two-fifths of women married before reaching the legal age in West Bengal (42 per cent), Bihar (40 per cent), and Tripura (39 per cent), and about one-third of them tied the knot before reaching the legal age of marriage in Jharkhand (35 per cent) and Andhra Pradesh (33 per cent).
The percentage of women marrying before reaching the legal minimum age of 18 is lowest in Lakshadweep (4 per cent); Jammu and Kashmir, and Ladakh (6 per cent each); Himachal Pradesh, Goa, and Nagaland (7 per cent each), and Kerala and Puducherry (8 per cent each).
But the report also said that early marriage has been declining over time.
Marriage before the legal age of 18 is 23 per cent for women age 20-24, compared with 47 per cent for women age 45-49. Similarly, for men, marriage before the legal age of 21 years has dropped from 27 per cent for men aged 45-49 to 18 per cent for men aged 25-29.
The median age at first marriagefor women aged 20-49 slightly increased from 19 years in 2015-16 to 19.2 years in 2019-21.For men aged 25-49, the median age at first marriage slightly increased between 2015-16 and 2019-21 (from 24.5 to 24.9 years), the NFHS said.
It was also noted that women having 12 or more years of schooling marry much later than other women. The median age at first marriage for women aged 25-49 increases from 17.1 years for women with no schooling to 22.8 years for women with 12 or more years of schooling.